[Federal Register Volume 72, Number 162 (Wednesday, August 22, 2007)]
[Rules and Regulations]
[Pages 47130-48175]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 07-3820]



[[Page 47129]]

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Part II





Department of Health and Human Services





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Centers for Medicare & Medicaid Services



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42 CFR Parts 411, 412, 413, and 489



Medicare Program; Changes to the Hospital Inpatient Prospective Payment 
Systems and Fiscal Year 2008 Rates; Final Rule

Federal Register / Vol. 72, No. 162 / Wednesday, August 22, 2007 / 
Rules and Regulations

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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

42 CFR Parts 411, 412, 413, and 489

[CMS-1533-FC]
RIN 0938-AO70


Medicare Program; Changes to the Hospital Inpatient Prospective 
Payment Systems and Fiscal Year 2008 Rates

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

ACTION: Final rule with comment period.

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SUMMARY: We are revising the Medicare hospital inpatient prospective 
payment systems (IPPS) for operating and capital-related costs to 
implement changes arising from our continuing experience with these 
systems, and to implement certain provisions made by the Deficit 
Reduction Act of 2005 (Pub. L. 109-171), the Medicare Improvements and 
Extension Act under Division B, Title I of the Tax Relief and Health 
Care Act of 2006 (Pub. L. 109-432), and the Pandemic and All Hazards 
Preparedness Act (Pub. L. 109-417). In addition, in the Addendum to 
this final rule with comment period, we describe the changes to the 
amounts and factors used to determine the rates for Medicare hospital 
inpatient services for operating costs and capital-related costs. We 
also are setting forth the rate of increase limits for certain 
hospitals and hospital units excluded from the IPPS that are paid on a 
reasonable cost basis subject to these limits, or that have a portion 
of a prospective payment system payment based on reasonable cost 
principles. These changes are applicable to discharges occurring on or 
after October 1, 2007.
    In this final rule with comment period, as part of our efforts to 
further refine the diagnosis related group (DRG) system under the IPPS 
to better recognize severity of illness among patients, for FY 2008, we 
are adopting a Medicare Severity DRG (MS DRG) classification system for 
the IPPS. We are also adopting the structure of the MS-DRG system for 
the LTCH prospective payment system (referred to as MS-LTC-DRGs) for FY 
2008.
    Among the other policy decisions and changes that we are making, we 
are making changes related to: limited revisions of the 
reclassification of cases to MS-DRGs, the relative weights for the MS-
LTC-DRGs; applications for new technologies and medical services add-on 
payments; the wage data, including the occupational mix data, used to 
compute the FY 2008 wage indices; payments to hospitals for the 
indirect costs of graduate medical education; submission of hospital 
quality data; provisions governing the application of sanctions 
relating to the Emergency Medical Treatment and Labor Act of 1986 
(EMTALA); provisions governing the disclosure of physician ownership in 
hospitals and patient safety measures; and provisions relating to 
services furnished to beneficiaries in custody of penal authorities.

DATES: Effective Date: This final rule with comment period is effective 
October 1, 2007 and applies to discharges occurring on or after that 
date.
    Comment Date: We will consider public comments only on the 
provisions of section V., Changes to the IPPS for Capital Related 
Costs, of the preamble of this final rule with comment period, if we 
receive them at one of the addresses provided below, no later than 5 
p.m. on November 20, 2007.

ADDRESSES: In commenting on the provisions of section V. of the 
preamble of this final rule with comment period, please refer to file 
code CMS-1533-FC.
    Because of staff and resource limitations, we cannot accept 
comments by facsimile (FAX) transmission.
    You may submit comments in one of three ways (no duplicates, 
please):
    1. Electronically. You may submit electronic comments on specific 
issues in this regulation to http://www.cms.hhs.gov/eRulemaking. Click 
on the link ``Submit electronic comments on CMS regulations with an 
open comment period''. (Attachments should be in Microsoft Word, 
WordPerfect, or Excel; however, we prefer Microsoft Word.)
    2. By regular mail. You may mail written comments (one original and 
two copies) to the following address ONLY: Centers for Medicare & 
Medicaid Services, Department of Health and Human Services, Attention: 
CMS-1533-FC, P.O. Box 8011, Baltimore, MD 21244-1850.
    Please allow sufficient time for mailed comments to be received 
before the close of the comment period.
    3. By express or overnight mail. You may send written comments (one 
original and two copies) to the following address ONLY: Centers for 
Medicare & Medicaid Services, Department of Health and Human Services, 
Attention: CMS-1533-FC, Mail Stop C4-26-05, 7500 Security Boulevard, 
Baltimore, MD 21244-1850.
    4. By hand or courier. If you prefer, you may deliver (by hand or 
courier) your written comments (one original and two copies) before the 
close of the comment period to one of the following addresses. If you 
intend to deliver your comments to the Baltimore address, please call 
telephone number (410) 786-7195 in advance to schedule your arrival 
with one of our staff members. Room 445-G, Hubert H. Humphrey Building, 
200 Independence Avenue, SW., Washington, DC 20201, or 7500 Security 
Boulevard, Baltimore, MD 21244-1850.
    (Because access to the interior of the Hubert H. Humphrey Building 
is not readily available to persons without Federal Government 
identification, commenters are encouraged to leave their comments in 
the CMS drop slots located in the main lobby of the building. A stamp-
in clock is available for persons wishing to retain proof of filing by 
stamping in and retaining an extra copy of the comments being filed.)
    Comments mailed to the addresses indicated as appropriately for 
hand or courier delivery may be delayed and received after the comment 
period.
    Submitting Comments: You can assist us by referencing the file code 
CMS-1533-FC and the specific ``issue identifier'' that precedes section 
V., Changes to the IPPS for Capital Related Costs.
    Inspection of Public Comments: All comments received before the 
close of the comment period are available for viewing by the public, 
including any personally identifiable or confidential business 
information that is included in a comment. We post all comments 
received before the close of the comment period on the following Web 
site as soon as possible after they have been received: http://www.cms.hhs.gov/eRulemaking. Click on the link ``Electronic Comments on 
CMS Regulations'' on that Web site to view public comments.
    Comments received timely will also be available for public 
inspection, generally beginning approximately 3 weeks after publication 
of a document, at the headquarters of the Centers for Medicare & 
Medicaid Services, 7500 Security Boulevard, Baltimore, Maryland 21244, 
Monday through Friday of each week from 8:30 a.m. to 4:00 p.m. To 
schedule an appointment to view public comments, phone 1-800-743-3951.

FOR FURTHER INFORMATION CONTACT: Marc Hartstein, (410) 786-4548, 
Operating Prospective Payment, Diagnosis Related Groups (DRGs), Wage 
Index, New Medical Services and Technology Add-On Payments, and 
Hospital Geographic Reclassifications Issues.

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    Tzvi Hefter, (410) 786-4487, Capital Prospective Payment, Excluded 
Hospitals, Graduate Medical Education, Critical Access Hospitals, and 
Long-Term Care (LTC)-DRG Issues.
    Siddhartha Mazumdar, (410) 786-6673, Rural Community Hospital 
Demonstration Issues.
    Sheila Blackstock, (410) 786-3502, Quality Data for Annual Payment 
Update Issues.
    Thomas Valuck, (410) 786-7479, Hospital Value-Based Purchasing 
Issues.
    Jacqueline Proctor, (410) 786-8852, Disclosure of Physician 
Ownership in Hospitals.
    Marilyn Dahl, (410) 786-8665, Patient Safety Measures Issues.
    Fred Grabau, (410) 786-0206, Services to Beneficiaries in Custody 
of Penal Authorities Issues.

SUPPLEMENTARY INFORMATION:

Electronic Access

    This Federal Register document is also available from the Federal 
Register online database through GPO Access, a service of the U.S. 
Government Printing Office. Free public access is available on a Wide 
Area Information Server (WAIS) through the Internet and via 
asynchronous dial-in. Internet users can access the database by using 
the World Wide Web; the Superintendent of Documents' home page address 
is http://www.gpoaccess.gov/, by using local WAIS client software, or 
by telnet to swais.access.gpo.gov, then login as guest (no password 
required). Dial-in users should use communications software and modem 
to call (202) 512-1661; type swais, then login as guest (no password 
required).

Acronyms

ACGME--Accreditation Council for Graduate Medical Education
AMGA--American Medical Group Association
AHA--American Hospital Association
AHIMA--American Health Information Management Association
AHRQ--Agency for Health Care Research and Quality
AMI--Acute myocardial infarction
AOA--American Osteopathic Association
APR DRG--All Patient Refined Diagnosis Related Group System
ASC--Ambulatory surgical center
ASP--Average sales price
AWP--Average wholesale price
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
BLS--Bureau of Labor Statistics
CAH--Critical access hospital
CART--CMS Abstraction & Reporting Tool
CBSAs--Core-based statistical areas
CC--Complication or comorbidity
CCR--Cost-to-charge ratio
CDAC--Clinical Data Abstraction Center
CIPI--Capital input price index
CPI--Consumer price index
CMI--Case-mix index
CMS--Centers for Medicare & Medicaid Services
CMSA--Consolidated Metropolitan Statistical Area
COBRA--Consolidated Omnibus Reconciliation Act of 1985, Pub. L. 99-
272
CoP--[Hospital] Condition of participation
CPI--Consumer price index
CY--Calendar year
DRA--Deficit Reduction Act of 2005, Pub. L. 109-171
DRG--Diagnosis-related group
DSH--Disproportionate share hospital
ECI--Employment cost index
EMR--Electronic medical record
EMTALA--Emergency Medical Treatment and Labor Act of 1986, Pub. L. 
99-272
FDA--Food and Drug Administration
FIPS--Federal information processing standards
FQHC--Federally qualified health center
FTE--Full-time equivalent
FY--Fiscal year
GAAP--Generally Accepted Accounting Principles
GAF--Geographic Adjustment Factor
GME--Graduate medical education
GMEC--Graduate Medical Education Committee
HCAHPS--Hospital Consumer Assessment of Healthcare Providers and 
Systems
HCFA--Health Care Financing Administration
HCRIS--Hospital Cost Report Information System
HHA--Home health agency
HHS--Department of Health and Human Services
HIC--Health insurance card
HIPAA--Health Insurance Portability and Accountability Act of 1996, 
Pub. L. 104-191
HIPC--Health Information Policy Council
HIS--Health information system
HIT--Health information technology
HMO--Health maintenance organization
HSA--Health savings account
HSCRC--Maryland Health Services Cost Review Commission
HSRV--Hospital-specific relative value
HSRVcc--Hospital-specific relative value cost center
HQA--Hospital Quality Alliance
HQI--Hospital Quality Initiative
ICD-9-CM--International Classification of Diseases, Ninth Revision, 
Clinical Modification
ICD-10-PCS--International Classification of Diseases, Tenth Edition, 
Procedure Coding System
IHS--Indian Health Service
IME--Indirect medical education
IOM--Institute of Medicine
IPF--Inpatient psychiatric facility
IPPS--Acute care hospital inpatient prospective payment system
IRF--Inpatient rehabilitation facility
JCAHO--Joint Commission on Accreditation of Healthcare Organizations
LAMCs--Large area metropolitan counties
LTC-DRG--Long-term care diagnosis-related group
LTCH--Long-term care hospital
MAC--Medicare Administrative Contractor
MCC--Major complication or comorbidity
MCE--Medicare Code Editor
MCO--Managed care organization
MCV--Major cardiovascular condition
MDC--Major diagnostic category
MDH--Medicare-dependent, small rural hospital
MedPAC--Medicare Payment Advisory Commission
MedPAR--Medicare Provider Analysis and Review File
MEI--Medicare Economic Index
MGCRB--Medicare Geographic Classification Review Board
MIEA-TRHCA--Medicare Improvements and Extension Act, Division B of 
the Tax Relief and Health Care Act of 2006, Pub. L. 109-432
MMA--Medicare Prescription Drug, Improvement, and Modernization Act 
of 2003, Pub. L. 108-173
MPN--Medicare provider number
MRHFP--Medicare Rural Hospital Flexibility Program
MSA--Metropolitan Statistical Area
NAICS--North American Industrial Classification System
NCD--National coverage determination
NCHS--National Center for Health Statistics
NCQA--National Committee for Quality Assurance
NCVHS--National Committee on Vital and Health Statistics
NECMA--New England County Metropolitan Areas
NQF--National Quality Forum
NTIS--National Technical Information Service
NVHRI--National Voluntary Hospital Reporting Initiative
OES--Occupational employment statistics
OIG--Office of the Inspector General
OMB--Executive Office of Management and Budget
O.R.--Operating room
OSCAR--Online Survey Certification and Reporting (System)
PMSAs--Primary metropolitan statistical areas
PPI--Producer price index
PPS--Prospective payment system
PRA--Per resident amount
PRM--Provider Reimbursement Manual
ProPAC--Prospective Payment Assessment Commission
PRRB--Provider Reimbursement Review Board
PSF--Provider Specific File
PS&R--Provider Statistical and Reimbursement (System)
QIG--Quality Improvement Group, CMS
QIO--Quality Improvement Organization
RCE--Reasonable compensation equivalent
RHC--Rural health clinic
RHQDAPU--Reporting hospital quality data for annual payment update
RNHCI--Religious nonmedical health care institution

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RRC--Rural referral center
RUCAs--Rural-urban commuting area codes
RY--Rate year
SAF--Standard Analytic File
SCH--Sole community hospital
SFY--State fiscal year
SIC--Standard Industrial Classification
SNF--Skilled nursing facility
SOCs--Standard occupational classifications
SOM--State Operations Manual
SSA--Social Security Administration
SSI--Supplemental Security Income
TEFRA--Tax Equity and Fiscal Responsibility Act of 1982, Pub. L. 97-
248
UHDDS--Uniform hospital discharge data set
VBP--Value-based purchasing

Table of Contents

I. Background
    A. Summary
    1. Acute Care Hospital Inpatient Prospective Payment System 
(IPPS)
    2. Hospitals and Hospital Units Excluded from the IPPS a. 
Inpatient Rehabilitation Facilities (IRFs) b. Long-Term Care 
Hospitals (LTCHs) c. Inpatient Psychiatric Facilities (IPFs)
    3. Critical Access Hospitals (CAHs)
    4. Payments for Graduate Medical Education (GME)
    B. Provisions of the Deficit Reduction Act of 2005 (DRA)
    C. Provisions of the Medicare Improvements and Extension Act 
under Division B, Title I of the Tax Relief and Health Care Act of 
2006
    D. Provisions of the Pandemic and All-Hazards Preparedness Act
    E. Issuance of a Notice of Proposed Rulemaking
    1. DRG Reclassifications and Recalibrations of Relative Weights
    2. Proposed Changes to the Hospital Wage Index
    3. Other Decisions and Proposed Changes to the IPPS for 
Operating Costs and GME Costs
    4. Proposed Changes to the IPPS for Capital-Related Costs
    5. Proposed Changes to the Payment Rates for Excluded Hospitals 
and Hospital Units: Rate-of-Increase Percentages
    6. Services Furnished to Beneficiaries in Custody of Penal 
Authorities
    7. Determining Proposed Prospective Payment Operating and 
Capital Rates and Rate of Increase Limits
    8. Impact Analysis
    9. Recommendation of Update Factors for Operating Cost Rates of 
Payment for Inpatient Hospital Services
    10. Discussion of Medicare Payment Advisory Commission 
Recommendations
    F. Public Comments Received on the Proposed Rule
II. Changes to DRG Classifications and Relative Weights
    A. Background
    B. DRG Reclassifications
    1. General
    2. Yearly Review for Making DRG Changes
    C. MedPAC Recommendations for Revisions to the IPPS DRG System
    D. Refinement of DRGs Based on Severity of Illness
    1. Evaluation of Alternative Severity-Adjusted DRG Systems
    a. Overview of Alternative DRG Classification Systems
    b. Comparative Performance in Explaining Variation in Resource 
Use
    c. Payment Accuracy and Case-Mix Impact
    d. Other Issues for Consideration
    2. Development of the Medicare Severity DRGs (MS DRGs)
    a. Comprehensive Review of the CC List
    b. Chronic Diagnosis Codes
    c. Acute Diagnosis Codes
    d. Prior Research on Subdivisions of CCs into Multiple 
Categories
    e. Medicare Severity DRGs (MS-DRGs)
    3. Dividing MS DRGs on the Basis of the CCs and MCCs
    4. Conclusion
    5. Impact of the MS-DRGs
    6. Changes to Case-Mix Index (CMI) from the MS-DRGs
    7. Effect of the MS-DRGs on the Outlier Threshold
    8. Effect of the MS-DRGs on the Postacute Care Transfer Policy
    E. Refinement of the Relative Weight Calculation
    1. Summary of RTI's Report on Charge Compression
    2. RTI Recommendations
    a. Short-Term Recommendations
    b. Medium-Term Recommendations
    c. Long-Term Recommendations
    F. Hospital-Acquired Conditions, Including Infections
    1. General
    2. Legislative Requirement
    3. Public Input
    4. Collaborative Effort
    5. Criteria for Selection of the Hospital-Acquired Conditions
    6. Selection of Hospital-Acquired Conditions
    7. Other Issues
    G. Changes to Specific DRG Classifications
    1. Pre-MDCs: Intestinal Transplantation
    2. MDC 1 (Diseases and Disorders of the Nervous System)
    a. Implantable Neurostimulators
    b. Intracranial Stents
    3. MDC 3 (Diseases and Disorders of the Ear, Nose, Mouth, and 
Throat)--Cochlear Implants
    4. MDC 8 (Diseases and Disorders of the Musculoskeletal System 
and Connective Tissue)
    a. Hip and Knee Replacements
    b. Spinal Fusions
    c. Spinal Disc Devices
    d. Other Spinal DRGs
    5. MDC 17 (Myeloproliferative Diseases and Disorders, Poorly 
Differentiated Neoplasm): Endoscopic Procedures
    6. Medicare Code Editor (MCE) Changes
    a. Non-Covered Procedure Edit: Code 00.62 (Percutaneous 
angioplasty or atherectomy of intracranial vessel(s))
    b. Non-Specific Principal Diagnosis Edit 7 and Non-Specific O.R. 
Procedures Edit 10
    c. Limited Coverage Edit 17
    d. Revision to Part 1, Pancreas Transplant Edit A
    7. Surgical Hierarchies
    8. CC Exclusions List
    a. Background
    b. CC Exclusions List for FY 2008
    9. Review of Procedure Codes in CMS DRGs 468, 476, and 477
    a. Moving Procedure Codes from CMS DRG 468 (MS-DRGs 981 through 
983) or CMS DRG 477 (MS-DRGs 987 through 989) to MDCs
    b. Reassignment of Procedures Among CMS DRGs 468, 476, and 477 
(MS-DRGs 981 through 983, 984 through 986, and 987 through 989)
    c. Adding Diagnosis or Procedure Codes to MDCs
    10. Changes to the ICD-9-CM Coding System
    11. Other DRG Issues Addressed in the FY 2008 IPPS Proposed Rule
    a. Seizures and Headaches
    b. Devices That are Replaced Without Cost or Where Credit for a 
Replaced Device is Furnished to the Hospital
    12. Other MS-DRG Issues Raised in the Public Comments on the 
Proposed Rule
    a. Heart Transplants or Implants of Heart Assist System and 
Liver Transplants (Pre-MDC)
    b. Gliadel[reg] Wafer (MDC 1)
    c. Myasthenia Gravis and Acute and Chronic Inflammatory 
Demyelinating Neuropathies (AIDP-CIDP) (MDC 1)
    d. Peripheral and Spinal Neurostimulators (MDC 1 and MDC 8)
    e. Stroke and Administration of Tissue Plasminogen Activator 
(tPA) (MDC 1)
    f. Gliasite[reg] Radiation Therapy System (RTS) (MDC 1)
    g. Noninvasive Ventilation (MDC 4)
    h. Heart Assist Devices (MDC 5)
    i. Automatic Implantable Cardioverter-Defibrillators (ACID) Lead 
and Generator Procedures (MDC 5)
    j. Artificial Heart (MDC 5)
    k. Vascular Procedures (MDC 5)
    l. Coronary Artery Stents (MDC 5)
    m. Endovascular Repair of Aortic and Thoracic Aneurysms (MDC 5)
    n. O.R. Procedures for Obesity (MDC 10)
    o. Penile Restorative Procedures (MDC 12)
    p. Female Reproductive System Reconstruction Procedures (MDC 13)
    q. Urological and Gynecological Disorders with Grafts or 
Prosthesis (MDCs 13 and 14)
    r. High Dose Interleukin-2 (HD-IL-2) (MDC 17)
    s. Computer Assisted Surgery
    13. Changes to MS-DRG Logic As a Result of Public Comments
    H. Recalibration of DRG Weights
    I. MS-LTC-DRG Reclassifications and Relative Weights for LTCHs 
for FY 2008
    1. Background
    2. Changes in the LTC-DRG Classifications
    a. Background
    b. Patient Classifications into DRGs
    3. Development of the FY 2008 MS-LTC-DRG Relative Weights
    a. General Overview of Development of the MS-LTC-DRG Relative 
Weights
    b. Data
    c. Hospital-Specific Relative Value Methodology
    d. Treatment of Severity Levels in Developing Relative Weights
    e. Low-Volume MS-LTC-DRGs
    4. Steps for Determining the FY 2008 MS-LTC-DRG Relative Weights

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    J. Add-On Payments for New Services and Technologies
    1. Background
    2. Public Input Before Publication of a Notice of Proposed 
Rulemaking on Add-On Payments
    3. FY 2008 Status of Technologies Approved for FY 2007 Add-On 
Payments
    a. Endovascular Graft Repair of the Thoracic Aorta
    b. Restore[reg] Rechargeable Implantable Neurostimulators
    c. X STOP Interspinous Process Decompression System
    4. FY 2008 Application for New Technology Add-On Payments
    5. Technical Correction
III. Changes to the Hospital Wage Index
    A. Background
    B. Core-Based Statistical Areas for the Hospital Wage Index
    C. Occupational Mix Adjustment to the FY 2008 Wage Index
    1. Development of Data for the FY 2008 Occupational Mix 
Adjustment
    2. Timeline for the Collection, Review, and Correction of the 
Occupational Mix Data
    3. Calculation of the Occupational Mix Adjustment for FY 2008
    4. 2007-2008 Occupational Mix Survey for the FY 2010 Wage Index
    D. Worksheet S-3 Wage Data for the FY 2008 Wage Index
    1. Included Categories of Costs
    2. Contract Labor for Indirect Patient Care Services
    3. Excluded Categories of Costs
    4. Use of Wage Index Data by Providers Other Than Acute Care 
Hospitals under the IPPS
    E. Verification of Worksheet S-3 Wage Data
    F. Wage Index for Multicampus Hospitals
    G. Computation of the FY 2008 Unadjusted Wage Index
    1. Method for Computing the FY 2008 Unadjusted Wage Index
    2. Expiration of the Imputed Floor
    3. CAHs Reverting Back to IPPS Hospitals and Raising the Rural 
Floor
    4. Application of Rural Floor Budget Neutrality
    H. Analysis and Implementation of the Occupational Mix 
Adjustment and the FY 2008 Occupational Mix Adjusted Wage Index
    I. Revisions to the Wage Index Based on Hospital Redesignations
    1. General
    2. Effects of Reclassification/Redesignation
    3. FY 2008 MGCRB Reclassifications
    4. Hospitals That Applied for Reclassification Effective in FY 
2008 and Reinstating Reclassifications in FY 2008
    5. Clarification of Policy on Reinstating Reclassifications
    6. ``Fallback'' Reclassifications
    7. Geographic Reclassification Issues for Multicampus Hospitals
    8. Redesignations of Hospitals under Section 1886(d)(8)(B) of 
the Act
    9. Reclassifications under Section 1886(d)(8)(B) of the Act
    10. New England Deemed Counties
    11. Reclassifications under Section 508 of Pub. L. 108-173
    12. Other Issues
    J. FY 2008 Wage Index Adjustment Based on Commuting Patterns of 
Hospital Employees
    K. Process for Requests for Wage Index Data Corrections
    L. Labor-Related Share for the Wage Index for FY 2008
    M. Wage Index Study Required under Pub. L. 109-432
    N. Proxy for the Hospital Market Basket
IV. Other Decisions and Changes to the IPPS for Operating Costs and 
GME Costs
    A. Reporting of Hospital Quality Data for Annual Hospital 
Payment Update
    1. Background
    2. FY 2008 Quality Measures
    3. New Quality Measures and Program Requirements for FY 2009 and 
Subsequent Years
    a. New Quality Measures for FY 2009 and Subsequent Years
    b. Data Submission
    4. Retiring or Replacing RHQDAPU Program Quality Measures
    5. Procedures for the RHQDAPU Program for FY 2008 and FY 2009
    a. Procedures for Participating in the RHQDAPU Program
    b. Procedures for Participating in the RHQDAPU Program for FY 
2009
    c. Chart Validation Requirements
    d. Data Validation and Attestation
    e. Public Display
    f. Reconsideration and Appeal Procedures
    g. RHQDAPU Program Withdrawal Requirements
    6. Electronic Medical Records
    7. New Hospitals
    B. Development of the Medicare Hospital Value-Based Purchasing 
Plan
    C. Rural Referral Centers (RRCs)
    1. Annual Update of RRC Status Criteria
    a. Case-Mix Index
    b. Discharges
    2. Acquired Rural Status of RRCs
    D. Indirect Medical Education (IME) Adjustment
    1. Background
    2. IME Adjustment Factor for FY 2008
    3. Time Spent by Residents on Vacation or Sick Leave and in 
Orientation
    a. Background
    b. Vacation and Sick Leave Time
    c. Orientation Activities
    d. Regulation Changes
    E. Payments to Disproportionate Share Hospitals (DSHs): 
Technical Correction
    1. Background
    2. Technical Correction: Inclusion of Medicare Advantage Days in 
the Medicare Fraction of the Medicare DSH Calculation
    F. Hospital Emergency Services under EMTALA
    1. Background
    2. Recent Legislation Affecting EMTALA Implementation
    a. Secretary's Authority to Waive Requirements During National 
Emergencies
    b. Provisions of the Pandemic and All-Hazards Preparedness Act
    c. Revisions to the EMTALA Regulations
    G. Disclosure of Physician Ownership in Hospitals and Patient 
Safety Measures
    1. Disclosure of Physician Ownership in Hospitals
    2. Patient Safety Measures
    H. Rural Community Hospital Demonstration Program
V. Changes to the IPPS for Capital-Related Costs
    A. Background
    B. Policy Change
VI. Changes for Hospitals and Hospital Units Excluded from the IPPS
    A. Payments to Existing and New Excluded Hospitals and Hospital 
Units
    B. Separate PPS for IRFs
    C. Separate PPS for LTCHs
    D. Separate PPS for IPFs
    E. Determining LTCH Cost-to-Charge Ratios (CCRs) under the LTCH 
PPS
    F. Report of Adjustment (Exceptions) Payments
VII. Services Furnished to Beneficiaries in Custody of Penal 
Authorities
VIII. MedPAC Recommendations
IX. Other Required Information
    A. Requests for Data from the Public
    B. Collection of Information Requirements
    C. Waiver of Notice of Proposed Rulemaking

Regulation Text

Addendum--Schedule of Standardized Amounts, Update Factors, and Rate-
of-Increase Percentages Effective With Cost Reporting Periods Beginning 
On or After October 1, 2007

I. Summary and Background
II. Changes to the Prospective Payment Rates for Hospital Inpatient 
Operating Costs for FY 2008
    A. Calculation of the Adjusted Standardized Amount
    1. Standardization of Base-Year Costs or Target Amounts
    2. Computing the Average Standardized Amount
    3. Updating the Average Standardized Amount
    4. Other Adjustments to the Average Standardized Amount
    a. Recalibration of DRG Weights and Updated Wage Index Budget 
Neutrality Adjustment
    b. Reclassified Hospitals--Budget Neutrality Adjustment
    c. Imputed Rural Floor--Budget Neutrality Adjustment
    d. Case-Mix Budget Neutrality Adjustment
    e. Outliers
    f. Rural Community Hospital Demonstration Program Adjustment 
(Section 410A of Pub. L. 108-173)
    5. FY 2008 Standardized Amount
    B. Adjustments for Area Wage Levels and Cost-of-Living
    1. Adjustment for Area Wage Levels
    2. Adjustment for Cost-of-Living in Alaska and Hawaii
    C. DRG Relative Weights
    D. Calculation of the Prospective Payment Rates
    1. Federal Rate
    2. Hospital Specific Rate (Applicable Only to SCHs and MDHs)
    a. Calculation of Hospital Specific Rate

[[Page 47134]]

    b. Updating the FY 1982, FY 1987, FY 1996, and FY 2002 Hospital 
Specific Rates for FY 2008
    3. General Formula for Calculation of Prospective Payment Rates 
for Hospitals Located in Puerto Rico Beginning On or After October 
1, 2007 and Before October 1, 200
    a. Puerto Rico Rate
    b. National Rate
III. Changes to Payment Rates for Acute Care Hospital Inpatient 
Capital-Related Costs for FY 2008
    A. Determination of Federal Hospital Inpatient Capital Related 
Prospective Payment Rate Update
    1. Projected Capital Standard Federal Rate Update
    a. Description of the Update Framework
    b. MedPAC Update Recommendation
    2. Outlier Payment Adjustment Factor
    3. Budget Neutrality Adjustment Factor for Changes in DRG 
Classifications and Weights and the GAF
    4. Exceptions Payment Adjustment Factor
    5. Capital Standard Federal Rate for FY 2008
    6. Special Capital Rate for Puerto Rico Hospitals
    B. Calculation of the Inpatient Capital-Related Prospective 
Payments for FY 2008
    C. Capital Input Price Index
    1. Background
    2. Forecast of the CIPI for FY 2008
IV. Changes to Payment Rates for Excluded Hospitals and Hospital 
Units: Rate-of-Increase Percentages
V. Tables

Table 1A--National Adjusted Operating Standardized Amounts, Labor/
Nonlabor (69.7 Percent Labor Share/30.3 Percent Nonlabor Share If Wage 
Index Is Greater Than 1)

Table 1B--National Adjusted Operating Standardized Amounts, Labor/
Nonlabor (62 Percent Labor Share/38 Percent Nonlabor Share If Wage 
Index Is Less Than or Equal to 1)

Table 1C--Adjusted Operating Standardized Amounts for Puerto Rico, 
Labor/Nonlabor

Table 1D--Capital Standard Federal Payment Rate

    Table 2--Hospital Case-Mix Indexes for Discharges Occurring in 
Federal Fiscal Year 2006; Hospital Wage Indexes for Federal Fiscal 
Year 2008; Hospital Average Hourly Wages for Federal Fiscal Years 
2006 (2002 Wage Data), 2007 (2003 Wage Data), and 2008 (2004 Wage 
Data); and 3-Year Average of Hospital Average Hourly Wages
    Table 3A--FY 2008 and 3-Year Average Hourly Wage for Urban Areas 
by CBSA
    Table 3B--FY 2008 and 3-Year Average Hourly Wage for Rural Areas 
by CBSA
    Table 4A--Wage Index and Capital Geographic Adjustment Factor 
(GAF) for Urban Areas by CBSA--FY 2008
    Table 4B--Wage Index and Capital Geographic Adjustment Factor 
(GAF) for Rural Areas by CBSA--FY 2008
    Table 4C--Wage Index and Capital Geographic Adjustment Factor 
(GAF) for Hospitals That Are Reclassified by CBSA--FY 2008
    Table 4F--Puerto Rico Wage Index and Capital Geographic 
Adjustment Factor (GAF) by CBSA--FY 2008
    Table 4J--Out-Migration Wage Adjustment--FY 2008
    Table 5--List of Medicare Severity Diagnosis-Related Groups (MS-
DRGs), Relative Weighting Factors, and Geometric and Arithmetic Mean 
Length of Stay
    Table 6A--New Diagnosis Codes
    Table 6B--New Procedure Codes
    Table 6C--Invalid Diagnosis Codes
    Table 6D--Invalid Procedure Codes
    Table 6E--Revised Diagnosis Code Titles
    Table 6F--Revised Procedure Code Titles
    Table 6G--Additions to the CC Exclusions List
    Table 6H--Deletions from the CC Exclusions List
    Table 6I--Complete List of Complication and Comorbidity (CC) 
Exclusions
    (Available only through the Internet on the CMS Web site at: 
http://www.cms.hhs.gov / AcuteInpatientPPS/)
    Table 7A--Medicare Prospective Payment System Selected 
Percentile Lengths of Stay: FY 2006 MedPAR Update--March 2007 
GROUPER V24.0 CMS DRGs
    Table 7B--Medicare Prospective Payment System Selected 
Percentile Lengths of Stay: FY 2006 MedPAR Update--March 2007 
GROUPER V25.0 CMS DRGs
    Table 8A--Statewide Average Operating Cost-to-Charge Ratios--
July 2007
    Table 8B--Statewide Average Capital Cost-to-Charge Ratios--July 
2007
    Table 8C--Statewide Average Total Cost-to-Charge Ratios for 
LTCHs--July 2007
    Table 9A--Hospital Reclassifications and Redesignations--FY 2008
    Table 9C--Hospitals Redesignated as Rural under Section 
1886(d)(8)(E) of the Act--FY 2008
    Table 10--Geometric Mean Plus the Lesser of .75 of the National 
Adjusted Operating Standardized Payment Amount (Increased to Reflect 
the Difference Between Costs and Charges) or .75 of One Standard 
Deviation of Mean Charges by Medicare Severity Diagnosis-Related 
Groups (MS-DRGs)--July 2007
    Table 11--FY 2008 MS-LTC-DRGs, Relative Weights, Geometric 
Average Length of Stay, Short-Stay Outlier Threshold, and IPPS 
Comparable Threshold

Appendix A--Regulatory Impact Analysis

I. Overall Impact
II. Objectives
III. Limitations on Our Analysis
IV. Hospitals Included In and Excluded From the IPPS
V. Effects on Excluded Hospitals and Hospital Units
VI. Quantitative Effects of the Policy Changes Under the IPPS for 
Operating Costs
    A. Basis and Methodology of Estimates
    B. Analysis of Table I
    C. Effects of the Changes to the DRG Reclassifications and 
Relative Cost-Based Weights (Column 2)
    D. Effects of Wage Index Changes (Column 3)
    E. Combined Effects of DRG and Wage Index Changes (Column 4)
    F. Effects of the Expiration of the 3-Year Provision Allowing 
Urban Hospitals That Were Converted to Rural as a Result of the FY 
2005 Labor Market Area Changes to Maintain the Wage Index of the 
Urban Labor Market Area in Which They Were Formerly Located (Column 
5)
    G. Effects of MGCRB Reclassifications (Column 6)
    H. Effects of the Adjustment to the Application of the Rural 
Floor (Column 7)
    I. Effects of Application of the Imputed Floor (Column 8)
    J. Effects of the Expiration of Section 508 of Pub. L. 108-173 
(Column 9)
    K. Effects of the Wage Index Adjustment for Out-Migration 
(Column 10)
    L. Effects of All Changes with CMI Adjustment Prior to Estimated 
Growth (Column 11)
    M. Effects of All Changes with CMI Adjustment and Assumed 
Estimated (Column 12)
    N. Effects of Policy on Payment Adjustments for Low-Volume 
Hospitals
    O. Impact Analysis of Table II
VII. Effects of Other Policy Changes
    A. Effects of Policy on Hospital-Acquired Conditions, Including 
Infections
    B. Effects of MS-LTC-DRG Reclassifications and Relative Weights 
for LTCHs
    C. Effects of New Technology Add-On Payments
    D. Effects of Requirements for Hospital Reporting of Quality 
Data for Annual Hospital Payment Update
    E. Effects of Policy on Cancellation of Classification of 
Acquired Rural Status and Rural Referral Centers
    F. Effects of Policy Change on Payment for IME and Direct GME
    G. Effects of Policy Changes Relating to Emergency Services 
under EMTALA During an Emergency Period
    H. Effects of Policy on Disclosure of Physician Ownership in 
Hospitals and Patient Safety Measures
    I. Effects of Implementation of the Rural Community Hospital 
Demonstration Program
    J. Effects of Policy Changes on Services Furnished to 
Beneficiaries in Custody of Penal Authorities
VIII. Impact of Changes in the Capital IPPS
    A. General Considerations
    B. Results
IX. Alternatives Considered
X. Overall Conclusion
XI. Accounting Statement
XII. Executive Order 12866

Appendix B--Recommendation of Update Factors for Operating Cost Rates 
of Payment for Inpatient Hospital Services

I. Background
II. Inpatient Hospital Update for FY 2008
III. Secretary's Final Recommendation
IV. MedPAC Recommendation for Assessing Payment Adequacy and 
Updating Payments in Traditional Medicare

[[Page 47135]]

I. Background

A. Summary

1. Acute Care Hospital Inpatient Prospective Payment System (IPPS)
    Section 1886(d) of the Social Security Act (the Act) sets forth a 
system of payment for the operating costs of acute care hospital 
inpatient stays under Medicare Part A (Hospital Insurance) based on 
prospectively set rates. Section 1886(g) of the Act requires the 
Secretary to pay for the capital-related costs of hospital inpatient 
stays under a prospective payment system (PPS). Under these PPSs, 
Medicare payment for hospital inpatient operating and capital-related 
costs is made at predetermined, specific rates for each hospital 
discharge. Discharges are classified according to a list of diagnosis-
related groups (DRGs).
    The base payment rate is comprised of a standardized amount that is 
divided into a labor-related share and a nonlabor-related share. The 
labor-related share is adjusted by the wage index applicable to the 
area where the hospital is located; and if the hospital is located in 
Alaska or Hawaii, the nonlabor-related share is adjusted by a cost-of-
living adjustment factor. This base payment rate is multiplied by the 
DRG relative weight.
    If the hospital treats a high percentage of low-income patients, it 
receives a percentage add-on payment applied to the DRG-adjusted base 
payment rate. This add-on payment, known as the disproportionate share 
hospital (DSH) adjustment, provides for a percentage increase in 
Medicare payments to hospitals that qualify under either of two 
statutory formulas designed to identify hospitals that serve a 
disproportionate share of low-income patients. For qualifying 
hospitals, the amount of this adjustment may vary based on the outcome 
of the statutory calculations.
    If the hospital is an approved teaching hospital, it receives a 
percentage add-on payment for each case paid under the IPPS, known as 
the indirect medical education (IME) adjustment. This percentage 
varies, depending on the ratio of residents to beds.
    Additional payments may be made for cases that involve new 
technologies or medical services that have been approved for special 
add-on payments. To qualify, a new technology or medical service must 
demonstrate that it is a substantial clinical improvement over 
technologies or services otherwise available, and that, absent an add-
on payment, it would be inadequately paid under the regular DRG 
payment.
    The costs incurred by the hospital for a case are evaluated to 
determine whether the hospital is eligible for an additional payment as 
an outlier case. This additional payment is designed to protect the 
hospital from large financial losses due to unusually expensive cases. 
Any outlier payment due is added to the DRG-adjusted base payment rate, 
plus any DSH, IME, and new technology or medical service add-on 
adjustments.
    Although payments to most hospitals under the IPPS are made on the 
basis of the standardized amounts, some categories of hospitals are 
paid the higher of a hospital-specific rate based on their costs in a 
base year (the higher of FY 1982, FY 1987, FY 1996, or FY 2002) or the 
IPPS rate based on the standardized amount. For example, sole community 
hospitals (SCHs) are the sole source of care in their areas, and 
Medicare-dependent, small rural hospitals (MDHs) are a major source of 
care for Medicare beneficiaries in their areas. Both of these 
categories of hospitals are afforded this special payment protection in 
order to maintain access to services for beneficiaries. (Until FY 2007, 
an MDH has received the IPPS rate plus 50 percent of the difference 
between the IPPS rate and its hospital-specific rate if the hospital-
specific rate is higher than the IPPS rate. In addition, an MDH does 
not have the option of using FY 1996 as the base year for its hospital-
specific rate. As discussed below, for discharges occurring on or after 
October 1, 2007, but before October 1, 2011, an MDH will receive the 
IPPS rate plus 75 percent of the difference between the IPPS rate and 
its hospital-specific rate, if the hospital-specific rate is higher 
than the IPPS rate.)
    Section 1886(g) of the Act requires the Secretary to pay for the 
capital-related costs of inpatient hospital services ``in accordance 
with a prospective payment system established by the Secretary.'' The 
basic methodology for determining capital prospective payments is set 
forth in our regulations at 42 CFR 412.308 and 412.312. Under the 
capital IPPS, payments are adjusted by the same DRG for the case as 
they are under the operating IPPS. Capital IPPS payments are also 
adjusted for IME and DSH, similar to the adjustments made under the 
operating IPPS. In addition, hospitals may receive outlier payments for 
those cases that have unusually high costs.
    The existing regulations governing payments to hospitals under the 
IPPS are located in 42 CFR Part 412, Subparts A through M.
2. Hospitals and Hospital Units Excluded from the IPPS
    Under section 1886(d)(1)(B) of the Act, as amended, certain 
specialty hospitals and hospital units are excluded from the IPPS. 
These hospitals and units are: rehabilitation hospitals and units; 
long-term care hospitals (LTCHs); psychiatric hospitals and units; 
children's hospitals; and cancer hospitals. Religious nonmedical health 
care institutions (RNHCIs) are also excluded from the IPPS. Various 
sections of the Balanced Budget Act of 1997 (Pub. L. 105-33), the 
Medicare, Medicaid and SCHIP [State Children's Health Insurance 
Program] Balanced Budget Refinement Act of 1999 (Pub. L. 106-113), and 
the Medicare, Medicaid, and SCHIP Benefits Improvement and Protection 
Act of 2000 (Pub. L. 106-554) provide for the implementation of PPSs 
for rehabilitation hospitals and units (referred to as inpatient 
rehabilitation facilities (IRFs)), LTCHs, and psychiatric hospitals and 
units (referred to as inpatient psychiatric facilities (IPFs)), as 
discussed below. Children's hospitals, cancer hospitals, and RNHCIs 
continue to be paid solely under a reasonable cost-based system.
    The existing regulations governing payments to excluded hospitals 
and hospital units are located in 42 CFR Parts 412 and 413.
a. Inpatient Rehabilitation Facilities (IRFs)
    Under section 1886(j) of the Act, as amended, rehabilitation 
hospitals and units (IRFs) have been transitioned from payment based on 
a blend of reasonable cost reimbursement subject to a hospital-specific 
annual limit under section 1886(b) of the Act and the adjusted facility 
Federal prospective payment rate for cost reporting periods beginning 
on or after January 1, 2002 through September 30, 2002, to payment at 
100 percent of the Federal rate effective for cost reporting periods 
beginning on or after October 1, 2002. IRFs subject to the blend were 
also permitted to elect payment based on 100 percent of the Federal 
rate. The existing regulations governing payments under the IRF PPS are 
located in 42 CFR Part 412, Subpart P.
b. Long-Term Care Hospitals (LTCHs)
    Under the authority of sections 123(a) and (c) of Pub. L. 106-113 
and section 307(b)(1) of Pub. L. 106-554, the LTCH PPS was effective 
for a LTCH's first cost reporting period beginning on or after October 
1, 2002. LTCHs that do not meet the definition of ``new'' under Sec.  
412.23(e)(4) are paid, during a 5-year

[[Page 47136]]

transition period, a LTCH prospective payment that is comprised of an 
increasing proportion of the LTCH Federal rate and a decreasing 
proportion based on reasonable cost principles. Those LTCHs that did 
not meet the definition of ``new'' under Sec.  412.23(e)(4) could elect 
to be paid based on 100 percent of the Federal prospective payment rate 
instead of a blended payment in any year during the 5-year transition. 
For cost reporting periods beginning on or after October 1, 2006, all 
LTCHs are paid 100 percent of the Federal rate. The existing 
regulations governing payment under the LTCH PPS are located in 42 CFR 
Part 412, Subpart O.
c. Inpatient Psychiatric Facilities (IPFs)
    Under the authority of sections 124(a) and (c) of Pub. L. 106-113, 
inpatient psychiatric facilities (IPFs) (formerly psychiatric hospitals 
and psychiatric units of acute care hospitals) are paid under the IPF 
PPS. Under the IPF PPS, some IPFs are transitioning from being paid for 
inpatient hospital services based on a blend of reasonable cost-based 
payment and a Federal per diem payment rate, effective for cost 
reporting periods beginning on or after January 1, 2005. For cost 
reporting periods beginning on or after January 1, 2008, all IPFs will 
be paid 100 percent of the Federal per diem payment amount. The 
existing regulations governing payment under the IPF PPS are located in 
42 CFR 412, Subpart N.
3. Critical Access Hospitals (CAHs)
    Under sections 1814, 1820, and 1834(g) of the Act, payments are 
made to critical access hospitals (CAHs) (that is, rural hospitals or 
facilities that meet certain statutory requirements) for inpatient and 
outpatient services based on 101 percent of reasonable cost. Reasonable 
cost is determined under the provisions of section 1861(v)(1)(A) of the 
Act and existing regulations under 42 CFR Parts 413 and 415.
4. Payments for Graduate Medical Education (GME)
    Under section 1886(a)(4) of the Act, costs of approved educational 
activities are excluded from the operating costs of inpatient hospital 
services. Hospitals with approved graduate medical education (GME) 
programs are paid for the direct costs of GME in accordance with 
section 1886(h) of the Act; the amount of payment for direct GME costs 
for a cost reporting period is based on the hospital's number of 
residents in that period and the hospital's costs per resident in a 
base year. The existing regulations governing payments to the various 
types of hospitals are located in 42 CFR Part 413.

B. Provisions of the Deficit Reduction Act of 2005 (DRA)

    The Deficit Reduction Act of 2005 (DRA), Pub. L. 109-171, made a 
number of changes to the Act relating to prospective payments to 
hospitals and other providers for inpatient services. The final rule 
implements amendments made by (1) section 5001(a), which, effective for 
FY 2007 and subsequent years, expands the requirements for hospital 
quality data reporting; and (2) section 5001(c), which requires the 
Secretary to select, by October 1, 2007, at least two hospital-acquired 
conditions that meet certain specified criteria that will be subject to 
a quality adjustment in DRG payments during FY 2008.
    In this final rule with comment period, we also discuss our 
development of a plan to implement, beginning with FY 2009, a value-
based purchasing plan for section 1886(d) hospitals, in accordance with 
the requirements of section 5001(b) of Pub. L. 109-171.

C. Provisions of the Medicare Improvements and Extension Act under 
Division B, Title I of the Tax Relief and Health Care Act of 2006

    In this final rule with comment period, we discuss the provisions 
of section 106(b)(1) of the Medicare Improvements and Extensions Act 
under Division B, Title I of the Tax Relief and Health Care Act of 2006 
(MIEA-TRHCA), Pub. L. 109-432, which requires MedPAC to submit to 
Congress, not later than June 30, 2007, a report on the Medicare wage 
index classification system applied under the Medicare Prospective 
Payment System. Section 106(b) of the MIEA-TRHCA requires the report to 
include any alternatives that MedPAC recommends to the method to 
compute the wage index under section 1886(d)(3)(E) of the Act.
    In addition, we discuss the provisions of section 106(b)(2) of the 
MIEA-TRHCA, which instructs the Secretary of Health and Human Services, 
taking into account MedPAC's recommendations on the Medicare wage index 
classification system, to include in the FY 2009 IPPS proposed rule one 
or more proposals to revise the wage index adjustment applied under 
section 1886(d)(3)(E) of the Act for purposes of the IPPS.
    We note that we published a notice in the Federal Register on March 
23, 2007 (72 FR 13799) that addressed the provisions of section 106(a) 
of the MIEA-TRHCA relating to the extension of geographic 
reclassifications of hospitals under section 508 of Pub. L. 108-173 
(that expired on March 31, 2007) through September 30, 2007.

D. Provisions of the Pandemic and All-Hazards Preparedness Act

    On December 19, 2006, Congress enacted the Pandemic and All-Hazards 
Preparedness Act, Pub. L. 109-417. Section 302(b) of Pub. L. 109-417 
makes two specific changes that affect EMTALA implementation in 
emergency areas during an emergency period. Specifically section 
302(b)(1)(A) of Pub. L. 109-417 amended section 1135(b)(3)(B) of the 
Act to state that sanctions may be waived for the direction or 
relocation of an individual for screening where, in the case of a 
public health emergency that involves a pandemic infectious disease, 
that direction or relocation occurs pursuant to a State pandemic 
preparedness plan. In addition, sections 302(b)(1)(B) and (b)(1)(C) of 
Pub. L. 109-417 amended section 1135(b)(3)(B) of the Act to state that, 
if a public health emergency involves a pandemic infectious disease 
(such as pandemic influenza) the duration of a waiver or modification 
under section 1135(b)(3) of the Act (relating to EMTALA) shall be 
determined in accordance with section 1135(e) of the Act as that 
subsection applies to public health emergencies.
    In this final rule with comment period, we are making changes to 
the EMTALA regulations to conform them to the sanction waiver 
provisions of section 302(b) of Pub. L. 109-417.

E. Issuance of a Notice of Proposed Rulemaking

    On May 3, 2007, we issued in the Federal Register (72 FR 24680) a 
notice of proposed rulemaking that set forth proposed changes to the 
Medicare IPPS for operating costs and for capital-related costs in FY 
2008. We also set forth proposed changes relating to payments for GME 
and IME costs and payments to certain hospitals and units that continue 
to be excluded from the IPPS and paid on a reasonable cost basis that 
would be effective for discharges occurring on or after October 1, 
2007. Below is a summary of the major changes that we proposed to make:
1. DRG Reclassifications and Recalibrations of Relative Weights
    We proposed to adopt a Medicare Severity DRG (MS-DRG) 
classification system for the IPPS to better recognize severity of 
illness. We presented the methodology we used to establish the MS-DRGs 
and discussed our efforts to

[[Page 47137]]

further analyze alternative severity-adjusted DRG systems and to refine 
the relative weight calculations for DRGs.
    We presented a proposed listing and discussion of hospital-acquired 
conditions, including infections, which were evaluated and proposed to 
be subject to the statutorily required quality adjustment in DRG 
payments for FY 2008.
    We proposed limited annual revisions to the DRG classification 
system in the following areas: Intestinal transplants, 
neurostimulators, intracranial stents, cochlear implants, knee and hip 
replacements, spinal fusions and spinal disc devices, and endoscopic 
procedures.
    We presented our reevaluation of certain FY 2007 applicants for 
add-on payments for high-cost new medical services and technologies, 
and our analysis of the FY 2008 applicant (including public input, as 
directed by Pub. L. 108-173, obtained in a town hall meeting).
    We proposed the annual update of the long-term care diagnosis-
related group (LTC-DRG) classifications and relative weights for use 
under the LTCH PPS for FY 2008. We proposed that the LTC-DRGs would be 
revised to mirror the proposed MS-DRGs for the IPPS.
2. Proposed Changes to the Hospital Wage Index
    In section III. of the preamble to the proposed rule, we proposed 
revisions to the wage index and the annual update of the wage data. 
Specific issues addressed included the following:
    <bullet> The FY 2008 wage index update, using wage data from cost 
reporting periods that began during FY 2004.
    <bullet> Analysis and implementation of the proposed FY 2008 
occupational mix adjustment to the wage index.
    <bullet> Proposed changes relating to expiration of the imputed 
rural floor for the wage index and application of budget neutrality for 
the rural floor.
    <bullet> Proposed changes in the determination of the wage index 
for multicampus hospitals.
    <bullet> The proposed revisions to the wage index based on hospital 
redesignations and reclassifications, including reclassifications for 
multicampus hospitals.
    <bullet> The proposed adjustment to the wage index for FY 2008 
based on commuting patterns of hospital employees who reside in a 
county and work in a different area with a higher wage index.
    <bullet> The timetable for reviewing and verifying the wage data 
that were in effect for the FY 2008 wage index.
    <bullet> The labor-related share for the FY 2008 wage index, 
including the labor-related share for Puerto Rico.
3. Other Decisions and Proposed Changes to the IPPS for Operating Costs 
and GME Costs
    In section IV. of the preamble to the proposed rule, we discussed a 
number of the provisions of the regulations in 42 CFR Parts 412, 413, 
and 489, including the following:
    <bullet> The reporting of hospital quality data as a condition for 
receiving the full annual payment update increase.
    <bullet> Development of the Medicare value-based purchasing plan 
and reports on the ``listening sessions'' held.
    <bullet> The proposed updated national and regional case-mix values 
and discharges for purposes of determining RRC status and a proposed 
policy change relating to the acquired rural status of RRCs.
    <bullet> The statutorily-required IME adjustment factor for FY 2008 
and a proposed policy change relating to determining counts of 
residents on vacation or sick leave and in orientation for IME and 
direct GME purposes.
    <bullet> Proposed changes relating to the waiver of sanctions for 
requirements for emergency services for hospitals under EMTALA during 
national emergencies.
    <bullet> Proposed policy changes relating to the disclosure to 
patients of physician ownership of hospitals and patient safety 
measures.
    <bullet> Discussion of the fourth year of implementation of the 
Rural Community Hospital Demonstration Program.
4. Proposed Changes to the IPPS for Capital-Related Costs
    In section V. of the preamble to the proposed rule, we discussed 
the payment policy requirements for capital-related costs and capital 
payments to hospitals and proposed changes relating to adjustments to 
the Federal capital rate to address continuous large positive margins.
5. Proposed Changes to the Payment Rates for Excluded Hospitals and 
Hospital Units: Rate-of-Increase Percentages
    In section VI. of the preamble to the proposed rule, we discussed 
payments to excluded hospitals and hospital units, and proposed changes 
for determining LTCH CCRs under the LTCH PPS.
6. Services Furnished to Beneficiaries in Custody of Penal Authorities
    In section VII. of the preamble to the proposed rule, we clarified 
when individuals are considered to be in ``custody'' for purposes of 
Medicare payment for services furnished to beneficiaries who are under 
penal authorities.
7. Determining Proposed Prospective Payment Operating and Capital Rates 
and Rate-of-Increase Limits
    In the Addendum to the proposed rule, we set forth proposed changes 
to the amounts and factors for determining the FY 2008 prospective 
payment rates for operating costs and capital-related costs. We also 
established the proposed threshold amounts for outlier cases. In 
addition, we addressed the proposed update factors for determining the 
rate-of-increase limits for cost reporting periods beginning in FY 2008 
for hospitals and hospital units excluded from the PPS.
8. Impact Analysis
    In Appendix A of the proposed rule, we set forth an analysis of the 
impact that the proposed changes would have on affected hospitals.
9. Recommendation of Update Factors for Operating Cost Rates of Payment 
for Inpatient Hospital Services
    In Appendix B of the proposed rule, as required by sections 
1886(e)(4) and (e)(5) of the Act, we provided our recommendations of 
the appropriate percentage changes for FY 2008 for the following:
    <bullet> A single average standardized amount for all areas for 
hospital inpatient services paid under the IPPS for operating costs 
(and hospital-specific rates applicable to SCHs and MDHs).
    <bullet> Target rate-of-increase limits to the allowable operating 
costs of hospital inpatient services furnished by hospitals and 
hospital units excluded from the IPPS.
10. Discussion of Medicare Payment Advisory Commission Recommendations
    Under section 1805(b) of the Act, MedPAC is required to submit a 
report to Congress, no later than March 1 of each year, in which MedPAC 
reviews and makes recommendations on Medicare payment policies. 
MedPAC's March 2007 recommendations concerning hospital inpatient 
payment policies addressed the update factor for inpatient hospital 
operating costs and capital-related costs under the IPPS and for 
hospitals and distinct part hospital units excluded from the IPPS. We 
addressed these recommendations in Appendix B of the proposed rule. For 
further information relating specifically to the MedPAC March 2007 
reports or to obtain a copy of the reports, contact

[[Page 47138]]

MedPAC at (202) 220-3700 or visit MedPAC's Web site at: www.medpac.gov.

F. Public Comments Received on the Proposed Rule

    We received approximately 900 timely pieces of correspondence in 
response to the FY 2008 IPPS proposed rule issued in the Federal 
Register on May 3, 2007. These public comments addressed issues on 
multiple topics in the proposed rule. We present a summary of the 
public comments and our responses to them in the applicable subject 
matter sections of this final rule with comment period.

II. Changes to DRG Classifications and Relative Weights

A. Background

    Section 1886(d) of the Act specifies that the Secretary shall 
establish a classification system (referred to as DRGs) for inpatient 
discharges and adjust payments under the IPPS based on appropriate 
weighting factors assigned to each DRG. Therefore, under the IPPS, we 
pay for inpatient hospital services on a rate per discharge basis that 
varies according to the DRG to which a beneficiary's stay is assigned. 
The formula used to calculate payment for a specific case multiplies an 
individual hospital's payment rate per case by the weight of the DRG to 
which the case is assigned. Each DRG weight represents the average 
resources required to care for cases in that particular DRG, relative 
to the average resources used to treat cases in all DRGs.
    Congress recognized that it would be necessary to recalculate the 
DRG relative weights periodically to account for changes in resource 
consumption. Accordingly, section 1886(d)(4)(C) of the Act requires 
that the Secretary adjust the DRG classifications and relative weights 
at least annually. These adjustments are made to reflect changes in 
treatment patterns, technology, and any other factors that may change 
the relative use of hospital resources.

B. DRG Reclassifications

1. General
    As discussed in the preamble to the FY 2007 IPPS final rule (71 FR 
47881 through 47971), we are focusing our efforts in FY 2008 on making 
significant reforms to the IPPS consistent with the recommendations 
made by MedPAC in its ``Report to the Congress, Physician-Owned 
Specialty Hospitals'' in March 2005. MedPAC recommended that the 
Secretary refine the entire DRG system by taking into account severity 
of illness and applying hospital-specific relative value (HSRV) weights 
to DRGs.\1\ We began this reform process by adopting cost-based weights 
over a 3-year transition period beginning in FY 2007 and making interim 
changes to the DRG system for FY 2007 by creating 20 new CMS DRGs and 
modifying 32 others across 13 different clinical areas involving nearly 
1.7 million cases. As described below in more detail, these refinements 
were intermediate steps towards comprehensive reform of both the 
relative weights and the DRG system that is occurring as we undertook 
further study.
---------------------------------------------------------------------------

    \1\ Medicare Payment Advisory Commission: Report to the 
Congress, Physician-Owned Specialty Hospitals, March 2005, page 
viii.
---------------------------------------------------------------------------

    Currently, cases are classified into CMS DRGs for payment under the 
IPPS based on the principal diagnosis, up to eight additional 
diagnoses, and up to six procedures performed during the stay. In a 
small number of DRGs, classification is also based on the age, sex, and 
discharge status of the patient. The diagnosis and procedure 
information is reported by the hospital using codes from the 
International Classification of Diseases, Ninth Revision, Clinical 
Modification (ICD-9-CM).
    The process of forming the DRGs was begun by dividing all possible 
principal diagnoses into mutually exclusive principal diagnosis areas, 
referred to as Major Diagnostic Categories (MDCs). The MDCs were formed 
by physician panels to ensure that the DRGs would be clinically 
coherent. The diagnoses in each MDC correspond to a single organ system 
or etiology and, in general, are associated with a particular medical 
specialty. Thus, in order to maintain the requirement of clinical 
coherence, no final DRG could contain patients in different MDCs. Most 
MDCs are based on a particular organ system of the body. For example, 
MDC 6 is Diseases and Disorders of the Digestive System. This approach 
is used because clinical care is generally organized in accordance with 
the organ system affected. However, some MDCs are not constructed on 
this basis because they involve multiple organ systems (for example, 
MDC 22 (Burns)). For FY 2007, cases are assigned to one of 538 DRGs in 
25 MDCs. The table below lists the 25 MDCs.

                       Major Diagnostic Categories
                                 [MDCs]
------------------------------------------------------------------------
 
------------------------------------------------------------------------
1............................  Diseases and Disorders of the Nervous
                                System.
2............................  Diseases and Disorders of the Eye.
3............................  Diseases and Disorders of the Ear, Nose,
                                Mouth, and Throat.
4............................  Diseases and Disorders of the Respiratory
                                System.
5............................  Diseases and Disorders of the Circulatory
                                System.
6............................  Diseases and Disorders of the Digestive
                                System.
7............................  Diseases and Disorders of the
                                Hepatobiliary System and Pancreas.
8............................  Diseases and Disorders of the
                                Musculoskeletal System and Connective
                                Tissue.
9............................  Diseases and Disorders of the Skin,
                                Subcutaneous Tissue and Breast.
10...........................  Endocrine, Nutritional and Metabolic
                                Diseases and Disorders.
11...........................  Diseases and Disorders of the Kidney and
                                Urinary Tract.
12...........................  Diseases and Disorders of the Male
                                Reproductive System.
13...........................  Diseases and Disorders of the Female
                                Reproductive System.
14...........................  Pregnancy, Childbirth, and the
                                Puerperium.
15...........................  Newborns and Other Neonates with
                                Conditions Originating in the Perinatal
                                Period.
16...........................  Diseases and Disorders of the Blood and
                                Blood Forming Organs and Immunological
                                Disorders.
17...........................  Myeloproliferative Diseases and Disorders
                                and Poorly Differentiated Neoplasms.
18...........................  Infectious and Parasitic Diseases
                                (Systemic or Unspecified Sites).
19...........................  Mental Diseases and Disorders.
20...........................  Alcohol/Drug Use and Alcohol/Drug Induced
                                Organic Mental Disorders.

[[Page 47139]]

 
21...........................  Injuries, Poisonings, and Toxic Effects
                                of Drugs.
22...........................  Burns.
23...........................  Factors Influencing Health Status and
                                Other Contacts with Health Services.
24...........................  Multiple Significant Trauma.
25...........................  Human Immunodeficiency Virus Infections.
------------------------------------------------------------------------

    In general, cases are assigned to an MDC based on the patient's 
principal diagnosis before assignment to a DRG. However, under the most 
recent version of the CMS GROUPER (Version 24.0), there are 9 DRGs to 
which cases are directly assigned on the basis of ICD-9-CM procedure 
codes. These DRGs are for heart transplant or implant of heart assist 
systems, liver and/or intestinal transplants, bone marrow transplants, 
lung transplants, simultaneous pancreas/kidney transplants, pancreas 
transplants, and for tracheostomies. Cases are assigned to these DRGs 
before they are classified to an MDC. The table below lists the nine 
current pre-MDCs.

                     Pre-Major Diagnostic Categories
                               [Pre-MDCs]
------------------------------------------------------------------------
 
------------------------------------------------------------------------
DRG 103......................  Heart Transplant or Implant of Heart
                                Assist System.
DRG 480......................  Liver Transplant and/or Intestinal
                                Transplant.
DRG 481......................  Bone Marrow Transplant.
DRG 482......................  Tracheostomy for Face, Mouth, and Neck
                                Diagnoses.
DRG 495......................  Lung Transplant.
DRG 512......................  Simultaneous Pancreas/Kidney Transplant.
DRG 513......................  Pancreas Transplant.
DRG 541......................  ECMO or Tracheostomy with Mechanical
                                Ventilation 96+ Hours or Principal
                                Diagnosis Except for Face, Mouth, and
                                Neck Diagnosis with Major O.R.
DRG 542......................  Tracheostomy with Mechanical Ventilation
                                96+ Hours or Principal Diagnosis Except
                                for Face, Mouth, and Neck Diagnosis
                                without Major O.R.
------------------------------------------------------------------------

    Once the MDCs were defined, each MDC was evaluated to identify 
those additional patient characteristics that would have a consistent 
effect on the consumption of hospital resources. Because the presence 
of a surgical procedure that required the use of the operating room 
would have a significant effect on the type of hospital resources used 
by a patient, most MDCs were initially divided into surgical DRGs and 
medical DRGs. Surgical DRGs are based on a hierarchy that orders 
operating room (O.R.) procedures or groups of O.R. procedures by 
resource intensity. Medical DRGs generally are differentiated on the 
basis of diagnosis and age (0 to 17 years of age or greater than 17 
years of age). Some surgical and medical DRGs are further 
differentiated based on the presence or absence of a complication or 
comorbidity (CC).
    Generally, nonsurgical procedures and minor surgical procedures 
that are not usually performed in an operating room are not treated as 
O.R. procedures. However, there are a few non-O.R. procedures that do 
affect DRG assignment for certain principal diagnoses. An example is 
extracorporeal shock wave lithotripsy for patients with a principal 
diagnosis of urinary stones.
    Once the medical and surgical classes for an MDC were formed, each 
diagnosis class was evaluated to determine if complications, 
comorbidities, or the patient's age would consistently affect the 
consumption of hospital resources. Physician panels classified each 
diagnosis code based on whether the diagnosis, when present as a 
secondary condition, would be considered a substantial CC. A 
substantial CC was defined as a condition which, because of its 
presence with a specific principal diagnosis, would cause an increase 
in the length of stay by at least one day in at least 75 percent of the 
patients. Each medical and surgical class within an MDC was tested to 
determine if the presence of any substantial CC would consistently 
affect the consumption of hospital resources.
    A patient's diagnosis, procedure, discharge status, and demographic 
information is entered into the Medicare claims processing systems and 
subjected to a series of automated screens called the Medicare Code 
Editor (MCE). The MCE screens are designed to identify cases that 
require further review before classification into a DRG.
    After patient information is screened through the MCE and any 
further development of the claim is conducted, the cases are classified 
into the appropriate DRG by the Medicare GROUPER software program. The 
GROUPER program was developed as a means of classifying each case into 
a DRG on the basis of the diagnosis and procedure codes and, for a 
limited number of DRGs, demographic information (that is, sex, age, and 
discharge status).
    After cases are screened through the MCE and assigned to a DRG by 
the GROUPER, the PRICER software calculates a base DRG payment. The 
PRICER calculates the payment for each case covered by the IPPS based 
on the DRG relative weight and additional factors associated with each 
hospital, such as IME and DSH payment adjustments. These additional 
factors increase the payment amount to hospitals above the base DRG 
payment.
    The records for all Medicare hospital inpatient discharges are 
maintained in the Medicare Provider Analysis and Review (MedPAR) file. 
The data in this file are used to evaluate possible DRG classification 
changes and to recalibrate the DRG weights. However, in the FY 2000 
IPPS final rule (64 FR 41500), we discussed a process for considering 
non-MedPAR data in the recalibration process. In order for us to 
consider using particular non-MedPAR data, we must have sufficient time 
to evaluate and test the data. The time necessary to do so depends upon 
the nature and quality of the non-MedPAR data submitted. Generally, 
however, a significant sample of the non-MedPAR data should be 
submitted by mid-october for consideration in conjunction with the next 
year's proposed rule. This

[[Page 47140]]

date allows us time to test the data and make a preliminary assessment 
as to the feasibility of using the data. Subsequently, a complete 
database should be submitted by early December for consideration in 
conjunction with the next year's proposed rule.
    As we proposed in the FY 2008 IPPS proposed rule, for FY 2008, we 
are adopting significant changes to the current DRGs. As described in 
detail below, we proposed significant improvement in the DRG system to 
recognize severity of illness and resource usage by proposing to adopt 
Medicare Severity DRGs (MS-DRGs). The changes we proposed (and are 
adopting in this final rule with comment period) will be reflected in 
the FY 2008 GROUPER, Version 25.0, and will be effective for discharges 
occurring on or after October 1, 2007. As noted in the proposed rule, 
our DRG analysis was based on data from the December 2006 update of the 
FY 2006 MedPAR file, which contained hospital bills received through 
December 31, 2006, for discharges occurring in FY 2006. For this final 
rule with comment period, our analysis is based on more recent data 
from the March 2007 update of the FY 2006 MedPAR file, which contains 
hospital bills received through March 31, 2007, for discharges 
occurring in FY 2006.
2. Yearly Review for Making DRG Changes
    Many of the changes to the DRG classifications we make annually are 
the result of specific issues brought to our attention by interested 
parties. As we indicated in the proposed rule, we encourage individuals 
with concerns about DRG classifications to bring those concerns to our 
attention in a timely manner so they can be carefully considered for 
possible inclusion in the annual proposed rule and, if included, may be 
subjected to public review and comment. Therefore, similar to the 
timetable for interested parties to submit non MedPAR data for 
consideration in the DRG recalibration process, concerns about DRG 
classification issues should be brought to our attention no later than 
early December in order to be considered and possibly included in the 
next annual proposed rule updating the IPPS.
    The actual process of forming the DRGs was, and will likely 
continue to be, highly iterative, involving a combination of 
statistical results from test data combined with clinical judgment. We 
describe in detail below the process we used to develop the MS-DRGs 
that we proposed and are adopting in this final rule with comment 
period. In addition, in deciding whether to make further modification 
to the MS-DRGs for particular circumstances brought to our attention, 
we considered whether the resource consumption and clinical 
characteristics of the patients with a given set of conditions are 
significantly different than the remaining patients in the MS-DRG. We 
evaluated patient care costs using average charges and lengths of stay 
as proxies for costs and relied on the judgment of our medical advisors 
to decide whether patients are clinically distinct or similar to other 
patients in the MS-DRG. In evaluating resource costs, we considered 
both the absolute and percentage differences in average charges between 
the cases we selected for review and the remainder of cases in the MS-
DRG. We also considered variation in charges within these groups; that 
is, whether observed average differences were consistent across 
patients or attributable to cases that were extreme in terms of charges 
or length of stay, or both. Further, we considered the number of 
patients who will have a given set of characteristics and generally 
preferred not to create a new DRG unless it would include a substantial 
number of cases.

C. MedPAC Recommendations for Revisions to the IPPS DRG System

    In the FY 2006 and FY 2007 IPPS final rules, we discussed a number 
of recommendations made by MedPAC regarding revisions to the DRG system 
used under the IPPS (70 FR 47473 through 47482 and 71 FR 47881 through 
47939).
    In Recommendations 1-3 in the 2005 Report to Congress on Physician 
Owned Specialty Hospitals, MedPAC recommended that CMS:
    <bullet> Refine the current DRGs to more fully capture differences 
in severity of illness among patients.
    <bullet> Base the DRG relative weights on the estimated cost of 
providing care.
    <bullet> Base the weights on the national average of the hospital-
specific relative values (HSRVs) for each DRG (using hospital-specific 
costs to derive the HSRVs).
    <bullet> Adjust the DRG relative weights to account for differences 
in the prevalence of high-cost outlier cases.
    <bullet> Implement the case-mix measurement and outlier policies 
over a transitional period.
    As we noted in the FY 2006 IPPS final rule, we had insufficient 
time to complete a thorough evaluation of these recommendations for 
full implementation in FY 2006. However, we did adopt severity-weighted 
cardiac DRGs in FY 2006 to address public comments on this issue and 
the specific concerns of MedPAC regarding cardiac surgery DRGs. We also 
indicated that we planned to further consider all of MedPAC's 
recommendations and thoroughly analyze options and their impacts on the 
various types of hospitals in the FY 2007 IPPS proposed rule.
    For FY 2007, we began this process. In the FY 2007 IPPS proposed 
rule, we proposed to adopt Consolidated Severity DRGs (CS DRGs) for FY 
2008 (if not earlier). However, based on public comments received on 
the FY 2007 IPPS proposed rule, we decided not to adopt the CS DRGs. 
Rather, we decided to make interim changes to the existing DRGs for FY 
2007 by creating 20 new DRGs involving 13 different clinical areas that 
would significantly improve the CMS DRG system's recognition of 
severity of illness. We also modified 32 DRGs to better capture 
differences in severity. The new and revised DRGs were selected from 40 
existing CMS DRGs that contained 1,666,476 cases and represent a number 
of body systems. In creating these 20 new DRGs, we deleted 8 and 
modified 32 existing DRGs. We indicated that these interim steps for FY 
2007 were being taken as a prelude to more comprehensive changes to 
better account for severity in the DRG system by FY 2008. In the FY 
2007 IPPS final rule, we indicated our intent to pursue further DRG 
reform through two initiatives. First, we announced that we were in the 
process of engaging a contractor to assist us with evaluating 
alternative DRG systems that were raised as potential alternatives to 
the CS DRGs in the public comments. Second, we indicated our intent to 
review over 13,000 ICD-9-CM diagnosis codes as part of making further 
refinements to the current CMS DRGs to better recognize severity of 
illness based on the work that CMS (then HCFA) did in the mid-1990's to 
adopt severity DRGs. We describe in detail below the progress we have 
made on these two initiatives, our actions for FY 2008, and our plans 
for continued analysis of reform of the DRG system for FY 2009. We note 
that revising the DRGs to better recognize severity of illness has 
implications for the outlier threshold, the application of the 
postacute care transfer policy, the measurement of real case-mix versus 
apparent case-mix, and the IME and DSH payment adjustments. We discuss 
these implications in more detail in the following sections.
    In the FY 2007 IPPS proposed rule, we discussed MedPAC's 
recommendations to move to a cost-based HSRV weighting methodology 
beginning with the FY 2007 IPPS

[[Page 47141]]

proposed rule. Although we proposed to adopt HSRV weights for FY 2007, 
we decided not to adopt the proposed methodology in the final rule 
after considering the public comments we received on the proposal. 
Instead, in the FY 2007 IPPS final rule, we adopted a cost-based 
weighting methodology without the hospital-specific portion of the 
methodology. The cost-based weights are being adopted over a 3-year 
transition period in \1/3\ increments between FY 2007 and FY 2009. In 
addition, in the FY 2007 IPPS final rule, we indicated our intent to 
further study the hospital-specific methodology as well as other issues 
brought to our attention with respect to the cost-based weights. There 
was significant concern in the public comments that we account for 
charge compression--the practice of applying a higher charge markup 
over costs to lower cost than higher cost items and services--if we are 
to develop relative weights based on cost. Further, public commenters 
expressed concern about potential inconsistencies between how costs and 
charges are reported on the Medicare cost reports and charges on the 
Medicare claims. In the FY 2007 IPPS final rule, we used costs and 
charges from the cost report to determine departmental level cost-to-
charge ratios (CCRs) to apply to charges on the Medicare claims to 
determine the cost-based weights. The commenters were concerned about 
potential distortions to the cost-based weights that would result from 
inconsistent reporting between the cost reports and the Medicare 
claims. After publication of the FY 2007 IPPS final rule, we entered 
into a contract with RTI International to study both charge compression 
and to what extent our methodology for calculating DRG relative weights 
is affected by inconsistencies between how hospitals report costs and 
charges on the cost report and how hospitals report charges on 
individual claims. Further, as part of its study of alternative DRG 
systems, the RAND Corporation is analyzing the HSRV cost-weighting 
methodology.
    As we present below, we believe that revisions to the DRG system to 
better recognize severity of illness and changes to the relative 
weights based on costs rather than charges are improving the accuracy 
of the payment rates in the IPPS. We agree with MedPAC that these 
refinements should be pursued. Although we continue to caution that any 
system that groups cases will always present some opportunities for 
providers to specialize in cases they believe to have higher margins, 
we believe that the changes we have adopted and the continuing reforms 
we proposed, and are adopting in this final rule with comment period, 
for FY 2008 will improve payment accuracy and reduce financial 
incentives to create specialty hospitals.

D. Refinement of DRGs Based on Severity of Illness

    For purposes of the following discussions, the term ``CMS DRGs'' 
means the DRG system we currently use under the IPPS; the term 
``Medicare-Severity DRGs (MS-DRGs)'' means the revisions that we 
proposed to make (and are adopting in this final rule with comment 
period) to the current CMS DRGs to better recognize severity of illness 
and resource use based on case complexity. Although we have found the 
terms ``CMS DRGs'' and ``MS-DRGs'' useful to distinguish the current 
DRG system from the DRGs that we proposed to adopt for FY 2008, we 
invited public comments on how to best refer to both the current DRGs 
and the proposed DRGs to avoid confusion and improve clarity.
    Comment: One commenter responded to our request for name 
suggestions for the new DRG system. The commenter agreed that the name 
should differentiate which DRG scheme is being referenced. The 
commenter did not provide an alternative suggestion.
    Response: We agree with the importance of being able to 
differentiate between the current and the revised DRG system. We 
believe the name ``Medicare Severity DRGs (MS-DRGs)'' is an appropriate 
name for this revised system. Therefore, we are adopting as final our 
reference to the revised DRG system as the ``Medicare Severity DRGs (MS 
DRGs).''
1. Evaluation of Alternative Severity-Adjusted DRG Systems
    In the FY 2007 IPPS final rule, we stated our intent to engage a 
contractor to assist us with an evaluation of alternative DRG systems 
that may better recognize severity than the current CMS DRGs. We noted 
it was possible that some of the alternative systems would better 
recognize severity of illness and are based on the current CMS DRGs. We 
further stated that if we were to develop a clinical severity concept 
using the current CMS DRGs as the starting point, it was possible that 
several of the issues raised by commenters (in response to the CS DRGs, 
which, in the FY 2007 IPPS proposed rule, we proposed to adopt for FY 
2008 or earlier) would no longer be a concern. We noted that if we were 
to propose adoption of severity DRGs for FY 2008, we would consider the 
issues raised by commenters on last year's proposed rule as we 
continued to make further refinements to account for complexity as well 
as severity to better reflect relative resource use. We stated that we 
believed it was likely that at least one of several alternative 
severity-adjusted DRG systems suggested for review (or potentially a 
system we would develop ourselves) would be suitable to achieve our 
goal of improving payment accuracy beginning in FY 2008.
    On September 1, 2006, we awarded a contract to the RAND Corporation 
to perform an evaluation of alternative severity-adjusted DRG 
classification systems. RAND is evaluating several alternative DRG 
systems based on how well they are suited to classifying and making 
payments for hospital inpatient services provided to Medicare patients. 
Each system is being assessed on its ability to differentiate among 
severity of illness. A final report is due on or before September 1, 
2007.
    RAND's draft interim report focused on the following criteria:
    <bullet> Severity-adjusted DRG classification systems.
     <bullet> How well does each classification system explain 
variation in resource use?
     <bullet> How would the classification system affect a hospital's 
patient mix?
     <bullet> Are the groupings manageable, administratively feasible 
and understandable?
    <bullet> Payment accuracy--What are the payment implications of 
selected models?
    In response to our request, several vendors of DRG systems 
submitted their products for evaluation. The following products were 
evaluated by RAND:

3M/Health Information Systems (HIS)

    <bullet> CMS DRGs modified for AP-DRG Logic (CMS+AP-DRGs)
    <bullet> Consolidated Severity-Adjusted DRGs (CS DRGs)

Health Systems Consultants (HSC)

    <bullet> Refined DRGs (HSC-DRGs)

HSS/Ingenix

    <bullet> All-Payer Severity DRGs with Medicare modifications (MM-
APS-DRGs)

Solucient

    <bullet> Solucient Refined DRGs (Sol-DRGs)

    Vendors submitted their commercial (off-the-shelf) software to RAND 
in late September 2006. The five systems were compared to the CMS DRGs 
that were in effect as of October 1, 2006 (FY 2007). RAND assigned FY 
2004 and FY 2005 Medicare discharges from acute care hospitals to the 
FY 2007 CMS DRGs and

[[Page 47142]]

to each of the alternative severity-adjusted DRG systems. RAND's 
initial analysis provided an overview of each alternative DRG 
classification system, their comparative performance in explaining 
variation in resource use, differences in DRG grouping logic, and case 
mix change.
    A Technical Expert Panel comprised of individuals representing 
academic institutions, hospital associations, and MedPAC was formed in 
October 2006. The members received the preliminary draft report of 
RAND's alternative severity-adjusted DRG systems evaluation in early 
January 2007. The panel met with RAND and CMS on January 18, 2007, to 
discuss the preliminary draft report and to provide additional 
comments. RAND incorporated items raised by the panel into its 
preliminary draft report and submitted a revised interim report to CMS 
in mid-March 2007. CMS posted RAND's interim report on the CMS Web site 
in late March 2007. Interested individuals can view RAND's interim 
report on the CMS Web site at: http://www.cms.hhs.gov/Reports/Reports/itemdetail.asp?itemID=CMS1197292. The report may also be viewed on 
RAND's Web site at http://www.rand.org/pubs/online/health.
    At this time, RAND has completed its evaluation of the alternative 
severity adjusted DRG systems. RAND's interim report reflects its 
evaluation of five alternative DRG systems using the criteria described 
above. Since the proposed rule, RAND evaluated the Medicare Severity 
DRG (MS-DRG) system using the same criteria applied to the other DRG 
systems. We are continuing to work with RAND to evaluate alternate 
methodologies for establishing relative weights using the MS-DRGs. Once 
RAND completes its work on the alternate methodologies for establishing 
relative weights, we will be in a better position to evaluate the issue 
of charge compression and potential improvements to our methodology to 
determine cost-based relative weights. We plan to review RAND's 
analysis of these issues and determine if it will be appropriate to 
propose additional adjustments to the MS-DRGs or the relative weight 
methodology in the FY 2009 IPPS proposed rule.
    We instructed RAND to evaluate the MS-DRGs using the same criteria 
that it applied to the other DRG systems. Consistent with conclusions 
we made in the IPPS proposed rule, RAND's findings demonstrate that MS-
DRGs explain 43 percent of the cost variation; a 9.1 percent 
improvement over the CMS DRGs. RAND reports that the explanatory power 
of the MS-DRGs is higher than the CMS+AP-DRGs, but lower than the other 
systems analyzed. The MS-DRGs have the lowest adjusted R\2\ values 
among the severity-adjusted systems in seven MDCs. In three of these 
MDCs, the R\2\ values are actually lower than under the CMS DRGs: MDC 
19 (Mental Diseases and Disorders), MDC 20 (Alcohol/Drug Use and 
Alcohol/Drug Induced Organic Mental Disorders) and MDC 22 (Burns). RAND 
attributes the reduction in R\2\ values to how the CMS DRGs were 
collapsed to form the base DRGs and recommends future examination. We 
agree that RAND's findings provide us with potential issues to examine 
to further improve the MS-DRGs for FY 2009.
    Although RAND's findings related to R<SUP>2</SUP> in certain MDCs 
are of concern, we believe the MS-DRGs remain an improvement over the 
current CMS DRGs and have significant advantages over the other DRG 
systems being evaluated. Specifically, they are more up-to-date because 
of our review of secondary diagnoses and classification into MCCs and 
CCs. Further, they are understandable, available in the public domain, 
and will have fewer transition issues than the other systems. As MS-
DRGs are a modification of the current CMS DRGs, they allow for updates 
and maintenance to continue using the same process as under the current 
CMS DRGs.
    Depending on the criteria being evaluated, the relative merits of 
each system being evaluated by RAND are different. For instance, the CS 
DRGs performed well in explaining resource variation but have the 
highest potential for case-mix growth. Other than the MS-DRGs, the 
CMS+AP-DRGs did the poorest among the systems evaluated in explaining 
variation in resource usage but did the best on producing reliable and 
stable results. The remaining systems generally performed somewhere in 
between on most of the measures that RAND used in its comparative 
analysis. The MS-DRGs are the result of modifications to the CMS DRGs 
to better account for severity. Unlike the other systems, the MS-DRGs 
are available in the public domain, and as a result, systems 
implementation and other costs are likely to be at a minimum. As 
suggested above, RAND found that the MS-DRGs are an improvement over 
the CMS DRGs and compare favorably to the alternative DRG systems being 
evaluated on some criteria and not as well on others.
    As RAND has completed its evaluation of the alternative DRG 
systems, including the MS-DRGs, consistent with RAND's findings, we 
believe it is appropriate at this time to adopt the MS-DRG system for 
the Medicare IPPS in FY 2008. While there will be an opportunity for 
the public to comment on RAND's findings, we expect to permanently 
adopt the MS-DRGs for the IPPS. We do not think it is likely that there 
will be persuasive public comments suggesting that one of the 
alternative DRG systems being evaluated by RAND is clearly superior. In 
our view, none of the systems appears to be clearly superior or 
inferior to the other systems based on the criteria RAND used for the 
evaluation. Given the strong support in the public comments for the MS-
DRGs and the fact they compare well overall to the alternative DRG 
systems being evaluated by RAND, we believe it is likely that the MS-
DRGs will be the system that Medicare uses permanently for the IPPS. 
However, because we are interested in public input on this issue, we 
are making RAND's final report available on the CMS Web Site at: http://www.cms.hhs.gov/Reports/Reports/itemdetail.asp?itemID=CMS1197292. The 
report may also be viewed on RAND's Web site at http://www.rand.org/pubs/online/health.
    Interested members of the public can write to the following address 
to make their views known to us about the RAND Report:
    Division of Acute Care, Center for Medicaid Management, 7500 
Security Boulevard, C4-08-06, Baltimore, MD 21244, Attn: Mady Hue.
    In the FY 2008 IPPS proposed rule, we proposed to adopt the MS-DRGs 
for FY 2008. We are providing the following update on RAND's progress 
in evaluating the MS-DRGs against the alternative DRG systems. In the 
proposed rule, we also invited public comment regarding RAND's 
preliminary analysis of each vendor-supplied alternative severity-
adjusted DRG system described below. A summary of any public comments 
that we received and our responses to those comments are presented 
under each subject area.
a. Overview of Alternative DRG Classification Systems
    Analysis of how each of the six severity adjusted DRG systems 
performs began by using the current CMS DRGs as a baseline. Two of the 
six systems (CS DRGs and MM-APS-DRGs) are derivatives of all-patient 
severity-adjusted DRG systems that have been modified by their 
developers for the Medicare population and two of the systems (HSC-DRGs 
and Sol-DRGs) are all-patient systems that incorporate severity levels 
into the CMS DRGs. The CMS+AP-DRGs are a combination of CMS DRGs and a 
modification for the Medicare population of the major CC

[[Page 47143]]

(MCC) severity groupings used in the AP-DRG system. (The AP-DRG system 
was developed by 3M/HIS specifically for the State of New York to 
capture the non-Medicare population.) The MS-DRG system modifies the 
current CMS DRGs by collapsing any paired DRGs (DRGs distinguished by 
the presence or absence of CCs and/or age) into base DRGs and then 
splits the base DRGs into MCC/CC-severity levels.
    Table A below shows how each of the six alternative severity-
adjusted systems classifies patients into base DRGs and their 
corresponding severity levels.

                               Table A.--Logic of CMS and Alternative DRG Systems
----------------------------------------------------------------------------------------------------------------
                                  CMS-DRG    CMS+AP-DRG   HSC-DRG    Sol-DRG    MM-APS-DRG    CS DRG     MS-DRG
----------------------------------------------------------------------------------------------------------------
Number of MDCs................  25          25           25         25         25           25         25
Number of base DRGs...........  379         379          391        393        328          270        335
Total number of DRGs..........  538         602          1,293      1,261      915          863        745
Number of DRGs <500 discharges  97 (18%)    97 (16%)     374 (29%)  474 (38%)  115 (13%)    113 (13%)  38 (5.2%)
Number of CC (severity)         2           3            3 (med)    3 (med)    3            4          3
 subclasses.                                              or 4       or 4
                                                          (surg)     (surg)
CC subclasses.................  With CC,    Without CC,  No CC,     Minor/no   Without CC,  Minor,     Without
                                 without     With CC      Class C    substant   With CC,     Moderate   CC, With
                                 CC for      for          CC,        ial CCs,   With Major   , Major,   CC, With
                                 selected    selected     Class B    Moderate   CC with      Severe     Major CC
                                 base DRGs   base DRGs    CC,        CCs,       some         with       with
                                             and Major    Class A    Major      collapsing   some       collapsi
                                             CC across    CC         CCs,       at base      collapsi   ng
                                             DRGs         (Surgica   Catastro   DRG level    ng at      between
                                             within MDC   l only)    phic CCs                DRG        severity
                                                                     (Surgica                level      levels
                                                                     l only)                            for same
                                                                                                        base
                                                                                                        DRG.
Multiple CCs recognized.......  No          No           No         No         Yes (in      Yes        No.
                                                                                computatio
                                                                                n of
                                                                                weight)
CC assignment logic...........  Presence/   Presence/    Presence/  Presence/  Presence/    18-step    Presence/
                                 absence     absence      absence    absence    absence      process    absence.
MDC assignment................  Principal   Principal    Principal  Principal  Principal    Principal  Principal
                                 diagnosis   diagnosis    diagnosi   diagnosi   diagnosis    diagnosi   diagnosi
                                                          s          s                       s with     s.
                                                                                             reroutin
                                                                                             g
Death used in DRG assignment..  Yes (in     Yes (in      Yes        Yes        Yes (in      No         Yes (in
                                 selected    selected     (``early   (``early   selected                selected
                                 DRGs)       DRGs)        death''    death''    DRGs)                   DRGs and
                                                          DRGs)      DRGs)                              CC
                                                                                                        assignme
                                                                                                        nts).
----------------------------------------------------------------------------------------------------------------

    RAND's evaluation of the logic for each system demonstrated the 
following:
    <bullet> Four systems add severity levels to the base CMS DRGs; the 
CS DRGs add severity levels to the base APR DRGs, which are comparable 
but not identical to the base CMS DRGs. Both the CS DRGs and MM-APS-
DRGs collapse some base DRGs with low Medicare volume. The MS-DRGs 
collapse the current CMS DRG splits and either leave the base DRG 
undivided or divide it into two or three severity levels.
    <bullet> The HSC-DRGs and the Sol-DRGs use uniform severity levels 
for each base DRG (three for medical and four for surgical). The 
general structure of the MS-DRG logic establishes three severity levels 
for each base DRG: With MCC, with CC, and without CC. However, CMS 
consolidated severity levels for the same base DRG if they do not meet 
specific statistical criteria. The general structure of the MM-APS-DRG 
logic includes three severity levels for each base DRG, but some 
severity levels for the same base DRG are consolidated to address 
Medicare low-volume DRGs and nonmonotonicity issues. Monotonicity is 
when the average costs for a severity group consistently rise as the 
severity level of the group increases. For example, in a monotonic 
system, if within a base DRG there are three severity groups and level 
1 severity is less than level 2 severity and level 2 severity is less 
than level 3 severity, the average costs for a level 3 case would be 
greater than the average costs for a level 2 case, which would be 
greater than the average costs for a level 1 case. When a DRG is 
nonmonotonic, the mean cost in the higher severity level is less than 
the mean cost in the lower severity level. The general structure of the 
CS DRGs includes four severity levels for each base DRG. However, 
severity level consolidations occur to address Medicare low-volume DRGs 
and nonmonotonicity. The CS DRGs consolidate both adjacent severity 
levels for the same base DRG and the same severity level across 
multiple base DRGs (especially for severity level 4).
    <bullet> Under the CMS+AP-DRGs and MM-APS-DRGs, each diagnosis is 
assigned a uniform CC-severity level across all base DRGs (other than 
CCs on the exclusion list for specific principal diagnoses). The 
remaining systems assign diagnoses to CC-severity level classifications 
by groups of DRGs.
    <bullet> Under the grouping logic used by all systems other than 
the CS DRGs, each discharge is assigned to the highest severity level 
of any secondary diagnosis. The MS-DRGs assign discharges with no CC 
but certain high cost devices to a higher severity level. The CS DRGs 
adjust the initial severity level assignment based on other factors, 
including the presence of additional CCs. None of the other systems 
adjusts the severity level classification for additional factors or 
CCs. However, the MM-APS-DRG system handles additional CCs through an 
enhanced relative weight.

[[Page 47144]]

    <bullet> The HSC-DRGs and the Sol-DRGs have a medical ``early 
death'' DRG within each MDC. The CS DRGs do not use death in the 
grouping logic. In addition, most complications of care do not affect 
the DRG assignment. The MS-DRGs use death in making an assignment in 
selected DRGs and do not count certain conditions as MCCs and CCs (such 
as cardiac arrest) in patients who die during the inpatient stay.
b. Comparative Performance in Explaining Variation in Resource Use
    In evaluating the comparative performance of each alternative DRG 
system, RAND used MedPAR data from FY 2004 and FY 2005. RAND excluded 
data from CAHs, Indian Health Service hospitals, and hospitals that 
have all-inclusive rate charging practices. Consistent with CMS 
practice, RAND did not exclude data from Maryland hospitals, which 
operate under an IPPS waiver. Records that failed edits for data 
consistency or that had missing variables that were needed to determine 
standardized costs were also excluded.
    RAND reported that evaluation of each alternative severity-adjusted 
DRG system is a complex process due to differences in how each of the 
severity levels are applied, the number of severity-adjusted DRGs in 
each system, and the average number of discharges assigned to each DRG. 
In addition, the manner in which the DRGs for patients 0 to 17 years of 
age are assigned in the severity-adjusted systems affects the number of 
low volume DRGs using Medicare discharges. Low-volume, severity-
adjusted DRGs can affect the relative performance of a classification 
system. However, the percentage of Medicare discharges assigned to 
these DRGs is small--approximately 0.7 percent in the HSC-DRG and Sol-
DRG systems compared to 0.1 percent in the CMS DRGs.
    To facilitate compatrisons across the severity-adjusted DRG system, 
RAND assigned a severity level to each MS-DRG consistent with the 
method used for the other DRG systems. The severity level is based on 
the lowest severity level. If a base MS-DRG divided into two DRGs, one 
for both discharges with no CC and discharges with CCs and the other 
for discharges with MCCs, RAND assigned Level 0 to the DRG for 
discharges with no MCC and Level 2 to the DRG for discharges with MCCs. 
RAND also assigned Severity Level 0 to base DRGs that do not split by 
CC level. Table B summarizes the distribution of DRGs and discharges 
across severity levels by classification system, exclusive of MDC 15, 
ungroupable discharges, and statistical outliers. In comparison to the 
other severity-adjusted systems, the MS-DRGs have a much higher 
percentage of discharges assigned to the lowest severity level. This 
includes base DRGs that are not divided into severity subgroups, the no 
CC severity level, and the no MCC severity level in those base DRGs 
that are split based on the presence of a MCC only. Sixty percent of 
discharges are assigned to Severity Level 0 DRGs compared to only 20 
percent in the CS DRG system. There are several reasons for the higher 
percentage, including the reassessment of CC assignments, the 
collapsing of the no CC and CC severity levels in 43 base MS-DRGs, and 
no severity subgroups in 53 base MS-DRGs.

[[Page 47145]]

[GRAPHIC] [TIFF OMITTED] TR22AU07.001

    Severity-adjusted DRGs are designed to reduce the amount of cost 
variation within DRGs. To compare how much within-DRG variation occurs 
in each DRG system, RAND computed the mean standardized cost, standard 
deviation, and coefficient of variation (CV) for each DRG across the 
various systems. Each severity-adjusted system has a smaller proportion 
of DRGs with a CV >100 percent than the CMS DRGs. Seventeen percent of 
the 511 CMS DRGs to which Medicare patients were assigned in 2005 had a 
CV >100 percent. In contrast, 8 percent of the 736 MS-DRGs have a CV 
>100 percent. This is a slightly lower percentage than in the CMS+AP 
DRGs but slightly higher percentage than the other four severity-
adjusted DRG systems. Only 1.7 percent of discharges are assigned to 
MS-DRGs with a CV >100 percent, which is comparable to the percentage 
of discharges assigned to DRGs with a CV >100 percent in the CS DRGs 
and the CMS+AP DRGs. The MM-APS DRGs and CMS+AP DRGs have slightly 
lower and higher percentages, respectively, of discharges assigned to 
DRGs with a CV >100 percent.
    RAND utilized a general linear regression model to evaluate how 
well each severity-adjusted DRG system explains variation in costs per 
case. The initial results demonstrate that all six severity-adjusted 
DRG systems predict cost better than the CMS DRGs. The CS DRGs have 
higher adjusted R\2\ values (explanatory power) than the other 
severity-adjusted systems in nearly every MDC. In general, the adjusted 
R\2\ value for the CS DRGs is 0.4458, a 13-percent improvement over the 
adjusted R\2\ value for the CMS DRGs. The HSC-DRGs demonstrate an 11-
percent improvement, while the adjusted R\2\ values for the MM-APS-DRGs 
and Sol-DRGs are 10.0 percent and 9.7 percent higher, respectively, 
than the CMS DRG R\2\ value. The adjusted R\2\ value for the MS-DRGs is 
0.4300, a 9.1 percent improvement over the CMS DRGs. The CMS+AP-DRGs 
show the smallest improvement, nearly 8 percent.
    Another aspect of RAND's evaluation was to identify the validity of 
each alternative DRG system as a measurement for resource costs. For a 
base DRG, the severity levels should be monotonic; that is, the mean 
cost per discharge should increase simultaneously with an increase in 
the severity level. A distinction between patient groups and varying 
treatment costs should be accomplished by the severity levels. When a 
DRG is nonmonotonic, the mean cost in the higher severity level is less 
than the mean cost in the lower severity level. RAND studied the 
percentage differences and absolute differences in cost between the 
severity levels within the base DRGs for each system under evaluation. 
For the analysis, RAND assigned the severity levels for discharges 
assigned to the CMS+AP-

[[Page 47146]]

DRGs and CS DRGs that include several base DRGs to the base DRG to 
which they would have been assigned at a lower severity level.
    Table C shows the percentage difference between the mean 
standardized cost for discharges with severity levels 1 through 3 as 
applicable to the adjacent lower severity level within the base DRG 
(for example, Base DRG 1 Severity Level 1 compared with Base DRG 1 
Severity Level 0). The first column of the table shows the number of 
DRGs with severity level 0 and the proportion of discharges assigned to 
those DRGs. The ``Other DRGs'' column, which is not applicable to the 
MS-DRGs, includes DRGs for age 0 to 17 years and any DRGs for which 
there was no base DRG with severity level 0 that could be used in the 
comparison, for example, no Medicare discharges were assigned to the 
base DRG severity level 0. For severity level 1 and higher, RAND 
computed the ratio of the mean cost for that level to the mean cost for 
the adjacent lower level (for example, mean cost<INF>DRG!Level!2</INF>/
mean cost<INF>DRG!Level!1</INF>) and reported the results by the 
magnitude of the ratio. RAND used the number of discharges assigned to 
the higher severity level to calculate the percentage of discharges 
assigned to each ratio category.
    For the two systems (CMS+AP-DRGs and CS DRGs) that include several 
base DRGs, RAND assigned those discharges to the lower severity level 
base DRG. Following that methodology, RAND was able to calculate how 
much more costly the discharges assigned to the consolidated or lower 
severity levels were than the discharges in the base DRG assigned to 
the next higher severity level. Results demonstrate that, overall, 
nonmonotonicity is not a factor across the alternative DRG systems. 
There are only a small percentage of discharges that are assigned to 
nonmonotonic DRGs. Unlike the other systems, all severity level 1 or 
level 2 MS-DRGs were monotonic.
    Using the data from severity of illness levels 1 through 3 (except 
for the MM-APS-DRGs, which do not have a severity of illness level 3), 
RAND calculated the discharge-weighted mean cost difference between 
severity levels and the mean ratio of the cost per discharge for the 
higher severity level to the adjacent lower severity level. The 
greatest cost discrimination was present in the higher severity levels 
versus the lower severity levels across all the systems. Unlike the 
other systems, each MS-DRG was at least 20 percent more costly than the 
adjacent lower severity DRG. The remaining systems demonstrated 
equivalent percentage cost differences between the severity levels as 
shown in Table C below.

[[Page 47147]]

[GRAPHIC] [TIFF OMITTED] TR22AU07.002

    In examining whether each of the alternative DRG systems provided 
stability in the relative weights from year to year, RAND compared the 
relative weights derived from the MedPAR data in FY 2004 to the 
relative weights data from FY 2005. RAND's results demonstrate that 
generally, across all the systems, only a small percentage of DRGs had 
greater than a 5-percent change in relative weights. RAND did not 
repeat this analysis for the MS-DRGs. However, RAND had no reason to 
expect that the results would be substantially different for this 
system. For further details and discussion, we encourage readers to 
view RAND's full interim report on the CMS Web site at: http://www.cms.hhs.gov/Reports/Reports/itemdetail.asp?itemID=CMS1197292. The 
report may also be viewed on RAND's Web site at http://www.rand.org/pubs/online/health.
    c. Payment Accuracy and Case-Mix Impact
    Similar to how CMS established the relative weights in the FY 2007 
IPPS final rule, RAND used standardized costs as determined by the 
national CCR and the FY 2005 MedPAR data to construct relative weights 
for each of the DRG systems being evaluated. RAND analyzed the effect 
of variations in the explanatory power on the distribution of Medicare 
payments for each system under evaluation. The preliminary findings 
indicate payment accuracy is improved by each severity-adjusted system 
by redistributing payment from lower-cost discharges to higher-cost 
discharges. However, the total payment redistribution across systems 
differs and reflects the payment impact of improved explanatory power. 
Although these findings are estimates, the percent of total payment 
redistributed was the least under the CMS+AP-DRGs (7.1 percent) and the 
most under the CS DRGs (11.9 percent). The total payment redistribution 
under the MS-DRGs is 8.4 percent of the total payment. The 
redistribution is less than the CS DRG system, the same as the HSC-DRG 
system, and more than in the other systems, even though some of these 
systems have higher explanatory power.
    Table D shows changes in case-mix index (CMI) by hospital category 
across alternative severity-adjusted DRG

[[Page 47148]]

systems. Results demonstrate that, under the severity-adjusted systems, 
urban hospitals have a higher average CMI than under the CMS DRGs, and 
rural hospitals have a lower CMI. The analysis suggests that any system 
adopted to better recognize severity of illness with a budget 
neutrality constraint will result in payment redistribution that can be 
expected to benefit urban hospitals at the expense of rural hospitals. 
This impact occurs because patients treated in urban hospitals are 
generally more severely ill than patients in rural hospitals and the 
CMS DRGs are not currently recognizing the full extent of these 
differences. For purposes of the study, RAND assumed no behavioral 
changes in coding practice or the types of patients treated.
    On average, the CMI for urban hospitals increases under the 
severity-adjusted systems, and that for rural hospitals decreases. The 
change is greatest in the CS DRGs, where the CMI for rural hospitals is 
2.4 percent lower than that under the CMS DRGs. The CMI for large urban 
hospitals (those located in metropolitan areas with more than 1 million 
population) and other urban hospitals is 0.6 and 0.1 percent higher, 
respectively, under the CS DRGs. Under the MS-DRGs, there is a slightly 
larger increase in the average CMI for large urban hospitals, a 
reduction in the CMI for other urban hospitals, and a smaller reduction 
for rural hospitals.
    The CMI for larger hospitals increases, while that for smaller 
hospitals decreases across the systems. This result is consistent with 
a severity-adjusted DRG system shifting payment from less expensive 
cases to more expensive cases. Larger hospitals tend to have relatively 
more complex cases and severely ill patients than smaller hospitals do. 
Teaching hospitals also tend to treat more complex cases, but the 
impact on these facilities differs by severity-adjusted DRG system. 
Across all the severity-adjusted systems, nonteaching hospitals have a 
lower CMI, ranging from a 0.2 percent reduction under the HSC-DRGs and 
Sol-DRGs to a 0.5 percent reduction under the CS DRGs. In three of the 
systems (CMS+AP-DRG, HSC-DRG, and MM-APS-DRG), hospitals with large 
teaching programs (100 or more residents) would experience a larger 
increase than hospitals with smaller teaching programs. Under the Sol-
DRG system, hospitals with large teaching programs would have a 0.1 
percent increase, compared with a 0.2 percent increase for hospitals 
with smaller teaching programs. Under the CS DRG system, the CMI for 
hospitals with large teaching programs would be about the same, but 
that for hospitals with smaller teaching programs would increase 0.7 
percent relative to the CMS DRGs.

                                       Table D.--CMI Change in Alternative DRG Systems Relative to the CMS DRG CMI
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                       Percentage change from CMS-DRG CMI
                                                                                 CMS-  -----------------------------------------------------------------
                                                       Number of    Number of     DRG    CMS+AP-                          MM-APS-
                                                       hospitals    discharges    CMI      DRG      HSC-DRG    Sol-DRG      DRG       CSDRG      MS-DRG
                                                                                        (Percent)  (Percent)  (Percent)  (Percent)  (Percent)  (Percent)
--------------------------------------------------------------------------------------------------------------------------------------------------------
ALL.................................................        3,890   12,165,763    1.00       0.0        0.0        0.0        0.0        0.0        0.0
By Geographic Location:
    Large urban areas (pop>1 million)...............        1,485    5,715,356    1.02       0.5        0.4        0.3        0.6        0.6        0.7
    Other urban areas (pop<1 million )..............        1,186    4,578,447    1.04      -0.2       -0.2       -0.1       -0.2        0.1       -0.3
    Rural hospitals.................................        1,219    1,871,960    0.84      -1.3       -0.9       -1.0       -1.4       -2.4       -1.7
Bed Size (Urban):
    0--99 beds......................................          685      611,139    0.91      -1.0       -1.1       -1.1       -1.3       -1.6       -1.2
    100-199 beds....................................          875    2,346,922    0.93       0.0        0.1        0.0        0.1        0.0        0.0
    200-299 beds....................................          511    2,446,737    1.00       0.1        0.2        0.3        0.3        0.6        0.3
    300-499 beds....................................          433    2,965,216    1.08       0.3        0.3        0.3        0.4        0.8        0.4
    500 or more beds................................          167    1,923,789    1.17       0.6        0.3        0.2        0.4        0.4        0.5
Bed Size (Rural):
    0-49 beds.......................................          543      330,242    0.73      -2.5       -2.1       -2.2       -2.7       -5.0       -3.0
    50-99 beds......................................          398      595,599    0.80      -1.4       -1.0       -1.1       -1.6       -2.7       -2.0
    100-149 beds....................................          160      415,367    0.85      -1.1       -0.7       -0.8       -1.2       -2.0       -1.5
    150-199 beds....................................           69      260,910    0.91      -0.8       -0.6       -0.7       -0.8       -1.5       -1.0
    200 or more beds................................           49      269,842    0.99      -0.6       -0.1       -0.1       -0.6       -0.5       -0.9
Urban by Region:
    New England.....................................          129      541,471    0.99       0.1       -0.2       -0.5       -0.5       -0.6       -0.5
    Middle Atlantic.................................          370    1,621,488    1.00       0.0       -0.4       -0.5       -0.3       -1.5       -0.1
    South Atlantic..................................          432    2,208,336    1.04       0.5        0.7        0.7        0.7        1.4        0.7
    East North Central..............................          410    1,856,164    1.03       0.6        0.7        0.6        0.8        1.5        0.6
    East South Central..............................          168      696,943    1.06      -0.2       -0.2       -0.2       -0.2       -0.3       -0.4
    West North Central..............................          164      657,322    1.08      -0.3       -0.3        0.0       -0.3        0.3       -0.3
    West South Central..............................          369    1,115,411    1.05       0.1        0.0        0.1        0.3        0.5        0.3
    Mountain........................................          153      465,093    1.08       0.4        0.2        0.5        0.4        1.0        0.7
    Pacific.........................................          423    1,016,135    1.03       0.0       -0.2       -0.1       -0.1        0.2        0.3
    Puerto Rico.....................................           53      115,440    0.87      -1.1       -1.4       -0.1       -1.2       -5.1       -1.3
Rural by Region:
    New England.....................................           34       49,842    0.90      -0.6       -0.6       -0.5       -1.1       -0.6       -1.1
    Middle Atlantic.................................           68      139,639    0.85      -1.1       -0.7       -0.7       -1.3       -1.5       -1.4
    South Atlantic..................................          191      409,116    0.82      -0.8       -0.4       -0.5       -0.9       -1.8       -1.2
    East North Central..............................          163      290,069    0.87      -1.1       -0.7       -0.9       -1.3       -1.8       -1.6
    East South Central..............................          201      328,326    0.82      -1.5       -0.9       -1.1       -1.4       -3.2       -1.9
    West North Central..............................          184      240,449    0.87      -1.6       -1.2       -1.1       -1.8       -2.5       -2.0
    West South Central..............................          227      266,419    0.80      -2.1       -1.8       -1.9       -2.0       -4.3       -2.5
    Mountain........................................           91       80,219    0.85      -1.2       -1.0       -0.4       -1.3       -1.2       -1.1
    Pacific.........................................           60       67,881    0.86      -0.9       -1.0       -1.1       -1.4       -1.6       -1.6

[[Page 47149]]

 
By Payment Classification:
Teaching Status:
    Non-teaching....................................        2,791    6,115,193    0.92      -0.4       -0.2       -0.2       -0.4       -0.5       -0.4
    Fewer than 100 Residents........................          853    4,061,451    1.04       0.1        0.2        0.2        0.2        0.7        0.2
    100 or more Residents...........................          246    1,989,119    1.16       0.8        0.3        0.1        0.5        0.0        0.6
Urban DSH:
    Non-DSH.........................................          778    2,574,640    1.02      -0.1        0.0        0.1       -0.2        0.5        0.0
    100 or more beds................................        1,541    7,378,095    1.05       0.3        0.2        0.2        0.4        0.4        0.4
    Less than 100 beds..............................          352      341,068    0.82      -0.9       -0.8       -1.0       -1.1       -2.0       -1.1
Rural DSH:
    Non-DSH.........................................          238      300,747    0.87      -1.4       -1.0       -0.9       -1.7       -1.9       -1.7
    SCH.............................................          402      599,823    0.83      -1.3       -1.0       -1.0       -1.4       -2.4       -1.8
    RRC.............................................          132      466,395    0.92      -0.8       -0.3       -0.5       -0.7       -1.4       -1.1
Other Rural
    100 or more beds................................           60      135,146    0.80      -0.9       -0.8       -1.2       -1.3       -2.0       -1.5
    Less than 100 beds..............................          387      369,849    0.74      -2.1       -1.6       -1.7       -2.2       -4.3       -2.6
Urban teaching and DSH:
    Both teaching and DSH...........................          829    4,705,476    1.09       0.5        0.3        0.3        0.5        0.5        0.5
    Teaching and no DSH.............................          204    1,108,092    1.06       0.0        0.1        0.0       -0.1        0.4        0.1
    No teaching and DSH.............................        1,064    3,013,687    0.95      -0.1        0.1        0.0        0.1        0.1        0.1
    No teaching and no DSH..........................          574    1,466,548    1.00      -0.2       -0.1        0.1       -0.3        0.5        0.0
Rural Hospital Types:
    RRC.............................................          145      519,808    0.92      -0.8       -0.4       -0.5       -0.7       -1.4       -1.1
    SCH.............................................          423      457,119    0.79      -1.6       -1.2       -1.2       -1.7       -3.0       -2.1
    MDH.............................................          180      164,453    0.75      -2.1       -1.7       -1.7       -2.3       -4.1       -2.7
    SCH and RRC.....................................           76      266,027    0.92      -0.9       -0.7       -0.7       -1.1       -1.3       -1.3
    MDH and RRC.....................................            8       19,746    0.85      -1.4       -0.6       -0.8       -1.6       -1.9       -1.7
    Other Rural.....................................          387      444,807    0.77      -1.6       -1.2       -1.4       -1.8       -3.3       -2.1
--------------------------------------------------------------------------------------------------------------------------------------------------------

    RAND also noted that changes in documentation and coding that 
increase case mix will occur with each severity adjusted DRG system 
they evaluated. Increases in CMI after adopting the system could be the 
result of improved coding rather than increases in actual patient 
severity. RAND observed that the experience of Maryland hospitals using 
the APR DRG system provides some indication of the likely impact on 
case-mix of introducing a severity-adjusted system. RAND also noted 
that coding behaviors are expected to vary under alternative systems 
according to RAND. Therefore, the risk of case-mix growth due to 
improved documentation and coding exists with any system. However, RAND 
advises that the amount of risk can be assessed based on the logic of 
the DRG system and result in anticipated changes in coding behavior. 
For the analysis we presented in the proposed rule, RAND found that the 
CMS+AP-DRG system may have the lowest risk of case-mix increase, while 
the CS DRGs present the greatest risk. The remaining systems under 
evaluation demonstrated equivalent risk, based on the DRG logic and 
other features specific to each system.
    RAND did not repeat the analysis of the potential for documentation 
and coding improvements to increase case-mix using the MS-DRGs because 
it only worked with FY 2005 data to evaluate them. Further, CMS did a 
detailed analysis of the likely impact of documentation and coding 
improvements on case-mix using the MS-DRGs. Section II.D.6. of the 
preamble of this rule describes in detail the CMI impact under the MS-
DRGs using the State of Maryland's experience and data.
d. Other Issues for Consideration
    RAND was asked to examine whether each of the alternative severity-
adjusted DRG systems under evaluation appears to contain logic that is 
manageable, administratively feasible, and understandable. RAND's 
results describe the extent to which those features are present in the 
grouping logic of each system. A brief summary of these findings and 
other discussion points follow. For more complete details of the 
grouping logic for each system evaluated, we encourage readers to 
review RAND's interim report at the following CMS Web site: http://www.cms.hhs.gov/Reports/Reports/itemdetail.asp?itemID=CMS1197292. The 
report may also be viewed on RAND's Web site at http://www.rand.org/pubs/online/health.
    To increase and promote understanding of a DRG classification 
system, the grouping logic should include a uniform structure. With the 
exception of the CS DRGs, RAND found that there is uniformity in the 
hierarchical structure for assigning discharges to MDCs, DRGs, and 
severity levels for each system evaluated. The CS DRGs utilize a 
complex rerouting logic and severity of illness level assignment. 
However, the result is a higher explanatory power that accounts for 
limitations in the current system. Therefore, due to the complexities 
associated with that system, it may not easily be understood. However, 
if the results yield clinically coherent groups of patients with 
comparable costs, RAND concluded that the system may be worth exploring 
further. The HSC-DRG and Sol-DRG grouping logic uses a standard number 
of severity levels for each base DRG, although the result is an 
increase in the number of low-volume DRGs. The standard severity level 
structure provides increased understanding, although as mentioned

[[Page 47150]]

previously, low-volume, severity-adjusted DRGs can affect the relative 
performance of a classification system. The MM-APS-DRGs and CS DRGs use 
standard DRG severity levels. However, the method of collapsing DRGs 
varies due to the modifications made for Medicare use. The underlying 
logic of the MS-DRG system uses standard severity levels, but the 
criteria for establishing severity subgroups result in severity levels 
that vary by base DRG. Because the severity levels are often collapsed 
and the resulting subgroups depend on the particular DRG, it is a more 
complicated system to understand than those systems that uniformly 
define subgroups according to RAND. By only collapsing DRGs to 
determine relative weights, RAND notes it is possible to preserve the 
underlying DRG structure, which perhaps would lead to a more 
understandable system.
    As stated earlier, there are also several transition issues that 
require attention when evaluating alternative severity-adjusted DRG 
systems. In determining how manageable, administratively feasible, and 
understandable the systems being evaluated are, consideration should be 
given to how they crosswalk or map to the current CMS DRGs. Because 
four of the systems under evaluation are based on the underlying CMS 
DRG grouping logic to establish their base DRGs (CMS+AP-DRGs, HSC-DRGs, 
Sol-DRGs, and MM-APS-DRGs), the CMS DRGs are able to crosswalk smoothly 
to these severity-adjusted DRGs. Conversely, crosswalking in reverse or 
backward mapping from the CMS+AP DRGs to the CMS DRGs is problematic 
due to the discharges in one severity level of the CMS+AP-DRG system 
compared to several base CMS DRGs. As expected, the CS DRGs do not 
crosswalk easily to the CMS DRGs due to the complex grouping logic. The 
MM-APS-DRGs pose unique complications as well due to the large number 
(over 1,000) of DRGs. Although the MS-DRGs are based on the CMS DRGs, 
there are challenges in crosswalking discharges between the two systems 
because of the revisions in the CC list and the sequential renumbering 
of the DRGs.
    System updates are another important factor that may have serious 
implications. All of the DRG systems RAND evaluated were reported to 
make annual updates to reflect ICD-9-CM coding changes. However, the CC 
severity level assignments for each system have not routinely been 
reviewed and revised. The CC exclusion list and severity level 
assignments should be reviewed where appropriate to reflect current 
patterns of care, according to RAND. RAND found that the MS-DRGs are 
the most updated of the severity-adjusted DRG systems. CMS reviewed the 
CC list and severity-level assignments in developing the MS-DRGs. 
Further, the MS-DRGs incorporate recent refinements in the CMS DRGs to 
account for complexity as well as severity. According to RAND, the 
other CMS-based systems use CC lists and severity level assignments 
that are based on outdated analyses of the effect of a condition on 
treatment costs from either the 1988 Yale study or the 1994 CMS 
refinement study. The APR DRGs have not been reviewed for several years 
and are not as current as the severity-based systems according to RAND.
    Accessibility to each of the severity-adjusted DRG system's logic 
and software is also a concern. Each system RAND analyzed is currently 
maintained as a proprietary product. In general, all of the vendors 
indicated a willingness to place their product in the public domain, 
under certain terms. As such, CMS believes it is likely there would 
need to be discussion as to whether there would be any limitations 
(such as the source code as well as the DRG logic) on the availability 
of the DRG systems to hospitals or competing vendors. None of these 
concerns would be an issue with the MS-DRGs. RAND further noted that 
because the MS-DRGs are in the public domain, there should be less 
disruption to existing arrangements for acquiring and installing the 
GROUPER software and integrating that software with other hospital 
systems. The intent of each vendor to provide public access to its 
GROUPER logic and software is described in further detail in RAND's 
interim report.
    Comment: One commenter supported the efforts of CMS to evaluate 
several alternatives to the existing DRG system. The commenter 
expressed appreciation that CMS had incorporated comments submitted by 
the provider community in setting the criteria for evaluating the 
various DRG products. This commenter also stated it looked forward to 
reviewing the final recommendations when the RAND report is released.
    Response: We appreciate the commenter's support of our efforts. As 
we indicated in the proposed rule, we have focused our efforts in 
response to public comments regarding the refinement of the current DRG 
system. With the assistance of RAND in the evaluation of alternative 
severity-adjusted DRG systems, our objective has been to select a 
classification system that will better recognize severity of illness, 
utilization of resources, and complexity of services. The ultimate goal 
of these combined objectives is to greatly improve the payment accuracy 
of the IPPS.
    Comment: Several commenters supported the implementation of a 
severity-based system. However, they urged CMS to wait until RAND 
completes the final report before moving forward with a specific 
system. One commenter articulated its appreciation of the thorough 
analysis conducted on the other alternative severity-adjusted systems. 
However, the commenter remains concerned that CMS would consider moving 
forward with the MS-DRGs in the absence of completing an analysis of 
them using the same criteria applied to the other systems under review. 
Other commenters expressed concern that CMS may implement the proposed 
MS-DRGs for FY 2008 and then switch to a completely different severity-
based system in FY 2009, or phase in a different system in subsequent 
years. One commenter stated that, given the potential for heightened 
administrative burdens as well as financial consequences, it would seem 
prudent that CMS invest the needed time and energy to confirm whether 
its belief in the proposed MS-DRG system can be validated. This same 
commenter added that by stating it is not precluded from adopting 
another system for FY 2009, CMS is tacitly acknowledging that the MS-
DRG system may not be the best system. Another commenter stated that 
CMS' request for RAND to evaluate the proposed MS-DRGs indicates it is 
not satisfied that the MS DRGs are ready for long-term use in the IPPS.
    Response: In the proposed rule, we indicated that we asked RAND to 
evaluate the proposed MS-DRG system using the same criteria it is 
applying to the other alternative severity-adjusted DRG systems. Our 
intent in not committing permanently to the MS-DRGs was not to suggest 
that we were not satisfied with the long-term application of the MS-DRG 
system or that we had concerns about it being the best system. Rather, 
we were interested in an objective evaluation of the MS-DRGs by RAND 
using the same criteria applied to the other alternative severity-
adjusted systems. That is, before making a permanent commitment to the 
MS-DRGs, we were interested in knowing how well it demonstrates the 
ability to meet the objectives described previously--better recognition 
of severity of illness, utilization of resources, complexity of 
services and improved payment accuracy over the current CMS DRG system. 
While we proposed the MS-DRGs for

[[Page 47151]]

implementation in FY 2008, we were further interested in the public's 
response to the MS-DRGs and RAND's evaluation of them before making a 
final decision on a permanent DRG system to use for Medicare payment. 
Specifically, public comments on the FY 2007 IPPS proposed rule asked 
that CMS show evidence that the alternative system proposed results in 
an improved payment system compared to the current system, test the 
degree to which the variation in costs within cases at the DRG level is 
reduced, maintain the improvements made over the years to account for 
complexity of service and new technologies, and avoid a proprietary 
system that lacks transparency. We considered all these factors in the 
development of the MS-DRGs and had we not provided the proposed MS-DRG 
system to RAND for evaluation, we would not be able to make a fair 
comparison and final determination for the best course of action for 
Medicare long term. At the time of the proposed rule, we were unsure 
whether RAND would be able to complete its evaluation of the MS-DRGs by 
the time of this final rule with comment period. However, as summarized 
above, RAND has completed its analysis of the MS-DRG system and found 
that it compares favorably to the other DRG systems being evaluated on 
a number of criteria.
    As RAND has completed its evaluation of alternative DRG systems, 
including the MS-DRGs, consistent with RAND's findings, we believe it 
is appropriate at this time to adopt the MS-DRG system for Medicare in 
FY 2008. We believe the MS-DRGs represent an improvement over the 
current CMS DRGs. While there will be an opportunity for the public to 
comment on RAND's findings, we expect to permanently adopt the MS-DRGs 
for the IPPS. We do not believe it is likely that there will be 
persuasive public comments suggesting that one of the alternative DRG 
systems being evaluated by RAND is clearly superior. We plan on using 
RAND's report to continue to examine ways to improve and refine the 
Medicare inpatient payment system and expect that any future 
refinements will be based on the MS-DRGs. Therefore, as final policy 
for FY 2008, we are adopting the MS-DRGs as the new classification 
system for the IPPS.
    Comment: One commenter agreed that CMS should adopt a transparent 
and publicly available DRG system and applauded the proposed MS-DRGs. 
The commenter stated that the transparency of the current system has 
been a critical aspect of its success over the years, and this will be 
even more important to ensure the successful adoption of the new 
severity-adjusted system chosen.
    Response: We appreciate the commenter's support for the proposal to 
use MS DRGs. We agree that transparency is an important factor in the 
selection of a new severity-adjusted DRG system. We refer readers to 
sections II.D.2. and 3. of the preamble of this final rule with comment 
period for a complete discussion of the MS-DRGs.
    Comment: One commenter stated CMS should consider adopting a more 
robust severity-based DRG system than the proposed MS-DRGs. The 
commenter admitted that it regards the APR DRG system highly and 
indicated it should not be abandoned because it is more complicated to 
implement and because of the controversy surrounding its suggested 
implementation. The commenter also noted that, as RAND stated in its 
preliminary report, it is a more robust, accurate, and precise system, 
and it was reluctant to see CMS abandon this superior system entirely 
before receiving RAND's final report and recommendations. Further, the 
commenter stated that, while the MS-DRGs would unquestionably represent 
a major improvement over the current CMS DRGs, it believed CMS has the 
ability and should proceed with introducing a better and more robust 
system and continue exploring further options while waiting for RAND's 
final report.
    Response: In the FY 2007 proposed rule (71 FR 24015), we proposed 
to adopt the CS DRGs which were based on a consolidated version of the 
APR DRGs. We received a significant number of public comments strongly 
urging us not to move forward with the CS DRGs. These comments are 
described in detail in the FY 2007 final rule (71 FR 47906 through 
47912). Among other concerns, the public comments suggested that the 
system was overly complex and difficult to understand. Further, there 
was concern that the logic and source code would not be available in 
the public domain like the current CMS DRGs and that many of the 
improvements and refinements made to the CMS DRGs over the years would 
be abandoned. For these and other reasons, we decided not to adopt the 
CS DRGs for FY 2007. Our proposed adoption of MS-DRGs did not raise 
these same concerns in the public comments. Given that the MS-DRGs are 
a substantial improvement over the current CMS DRGs in their ability to 
recognize severity of illness and meet other objectives that we set for 
IPPS payment reform, we believe it is a better system to select for use 
by Medicare than the CS DRGs or APR DRGs.
    Comment: One commenter, a vendor, submitted its DRG product to RAND 
for evaluation. The commenter expressed its concern that CMS developed 
a completely new and untested severity system while there are several 
alternate systems currently under evaluation by RAND. The commenter 
noted that its product has been in continuous use for 18 years and is 
based on the original Yale University methodology and developed under 
contract with the Health Care Financing Administration, now CMS, 
between 1986 and 1989.
    The commenter urged CMS to continue with the current CMS DRGs for 
one more year. According to the commenter, introducing a new temporary 
severity system, the MS-DRGs, with the expectation that hospitals move 
to another system for FY 2009, will create unnecessary havoc for the 
hospital industry. The commenter noted that it is pleased with the work 
CMS has done in reviewing 13,549 secondary diagnosis codes to refine 
the CC list and believed the use of this new list will result in a 
greatly improved DRG GROUPER. However, the commenter stated it is not 
fair to compare the FY 2008 MS-DRGs (with the new CC list and new 
codes) with FY 2006 and FY 2007 alternative severity systems using the 
unrevised CC list. The commenter recommended that CMS create Version 
25.0 CMS DRGs with the new CC list and new codes to allow the vendors 
of the alternative systems until November or December to incorporate 
the information into updated versions of their systems. The commenter 
also suggested that the RAND report deadline could be extended beyond 
September 1, 2007, to allow the comparison of alternative DRG systems 
to occur with the revised CC list.
    In addition, the commenter believed the MS-DRGs have the following 
shortcomings:
    <bullet> Although CMS' chief concern is Medicare patients, it is 
shortsighted to ignore non-Medicare patients in the proposed MS-DRG 
system, as the health care industry often focuses its attention on the 
Medicare relative value system for all of its hospital patients.
    <bullet> The DRG system has always been comprehensive, including 
all possible ICD-9-CM diagnoses and procedures. Consolidating low-
volume procedures and procedures now performed primarily in an 
outpatient setting creates confusion in the MS-DRG classification 
system. Procedures such as tonsillectomies, carpal tunnel release, and 
cataract extractions are different MDCs and are treated by different 
medical specialists. They are similar

[[Page 47152]]

only with respect to historical cost data and only for the time being.
    <bullet> Eliminating newborns, maternity, and congenital anomalies 
from the usual MS-DRG severity level approach does not provide a 
comprehensive severity system.
    Lastly, the commenter indicated that whatever software system is 
chosen for the public, it should be provided in a modern and accessible 
software language and format. The commenter recommended a ``C'' 
version, on CDs or DVDs, and suggested that continuing to place CMS 
software into the public domain written in IBM assembler and 
distributed through the National Technical Information Service (NTIS) 
on 9-track tapes or 3480 cartridges seems difficult to imagine, as this 
technology is over 40 years old.
    Response: We disagree that we are implementing a ``completely new 
and untested severity system.'' While the MS-DRGs constitute a major 
reform to better recognize severity of illness, they are a refinement 
of the current CMS DRGs that have been in use for Medicare payment for 
over 20 years. Further, our proposed rule analysis--subsequently 
validated by RAND--suggested that they are major improvement over the 
current CMS DRGs. Most of the other systems represent less updated 
refinements of the CMS DRGs. While these systems have been in use for 
other purposes, we note that (other than the APR DRGs that are used for 
payment in Maryland and the AP DRGs that were used in New York's all 
payer ratesetting system in the 1990s), the other systems being 
evaluated have never been used for Medicare payment.
    We stated in the FY 2008 IPPS proposed rule that we developed the 
MS-DRG system in response to public comments received as a result of 
the FY 2007 proposed rule (in response to the proposed CS DRGs). We 
also stated we submitted the MS-DRG system to RAND for evaluation and 
the final report was expected on or before September 1, 2007. At this 
time RAND has completed the evaluation of alternative severity-adjusted 
DRG systems, including the MS-DRGs. In the near future, we will post 
RAND's analysis of the MS-DRG system to the following CMS Web site: 
http://www.cms.hhs.gov/Reports/Reports/itemdetail.asp?itemID=CMS1197292. The report may also be viewed on 
RAND's Web site at http://www.rand.org/pubs/online/health. This report 
is referred to as an Addendum to RAND's interim report that was 
released in March 2007. A completed final report incorporating the 
evaluation of all six severity adjusted DRG systems into one document 
will be posted to the CMS Web site after September 1, 2007.
    As noted above, we share the commenter's concern about adopting one 
DRG system this year and potentially another one next year. We believe 
the MS-DRGs should be the system that is adopted for long-term use by 
Medicare for IPPS payment. However, we are interested in obtaining 
further public input on RAND's findings. We do not believe it is likely 
that there will be persuasive public comments suggesting that one of 
the alternative DRG systems evaluated by RAND is clearly superior to 
the MS-DRGs.
    We appreciate the commenter's support of our efforts in the review 
of 13,549 secondary diagnosis codes. We agree that a new, updated CC 
list greatly improves the ability of a DRG GROUPER to reflect severity 
of illness and distribute payments more accurately. The intent of 
RAND's evaluation was to compare each of the alternative DRG systems in 
its current form. The fact that delays would be necessary to allow the 
other systems to adopt the improvements that CMS made to the CC list 
for the MS-DRGs suggests that the other systems would not be ready for 
implementation as soon. As noted elsewhere, we are interested in 
adopting comprehensive improvements to the DRG system for severity of 
illness at the earliest possible date. We do not believe it is in the 
public interest to delay adopting these improvements to wait for the 
alternative DRG systems to incorporate refinements to the CC list. 
Further, we note that CMS first discussed performing a comprehensive 
review of the CC list over 2 years ago. Each vendor could have 
undertaken a similar review of the CC list to improve its DRG product 
at any time.
    We disagree with the commenter's assertion that our decision should 
turn on how the MS-DRGs can be used for non-Medicare payers. As we have 
stated many times in the past, we encourage private insurers and other 
non-Medicare payers to make refinements to Medicare's DRG system to 
better suit the needs of the patients they serve. With respect to the 
maternity and newborn DRGs, we cannot adopt the same approach to refine 
these DRGs that we did with the rest of the MS-DRGs because of the 
extremely low volume of Medicare patients there are in these DRGs. 
Medicare simply does not have enough cases in these DRGs to apply the 
same approach we did in the other MDCs. Whether we made revisions to 
these DRGs or not, private insurers and other private payers would have 
to develop their own DRGs or relative weights to address the needs of 
these patients that are not well-represented in the Medicare 
population. With respect to other pediatric patients, in our view, a 
significant advantage of the MS-DRGs over the prior CMS DRGs is the 
fewer number of low volume DRGs. By eliminating pediatric (ages 0 to 17 
years) splits, the MS-DRGs will have fewer low-volume DRGs and less 
instability in the DRG relative weights for the cases paid using these 
DRGs.
    With regards to the software, undere CMS' agreement with its 
contractor, the software provided by NTIS is the same public domain 
software that is provided to CMS for use by our system maintainers, 
regional offices, and fiscal intermediaries.MAC. We will consider this 
comment as we make updates to our information systems and related 
contracts.
    As stated elsewhere in this final rule with comment period, we are 
adopting the MS-DRGs for implementation on October 1, 2007 (FY 2008). A 
detailed discussion summarizing the public comments received in 
response to the MS-DRG proposal is described in section II.D.2. of the 
preamble of this final rule with comment period.
2. Development of the Medicare Severity DRGs (MS-DRGs)
    As discussed previously, we are committed to continuing our efforts 
of making refinements to the current CMS DRGs to better recognize 
severity of illness. In the FY 2007 IPPS final rule, we stated that we 
had begun a comprehensive review of over 13,000 diagnosis codes to 
determine which codes should be classified as CCs when present as a 
secondary diagnosis. We stated that we would also build on the severity 
DRG work we performed in the mid-1990's. We received a number of public 
comments on last year's proposed rule that supported the refinement of 
the current CMS DRGs so that they better recognize severity of illness 
for FY 2007.
    We also committed to performing a more thorough reform of the 
entire DRG system to better recognize severity of illness for FY 2008. 
As a result of this broad based analysis, we developed the MS-DRGs that 
we proposed and are adopting in this final rule with comment period. 
The MS-DRGs represent a comprehensive approach to applying a severity 
of illness stratification for Medicare patients throughout the DRGs. As 
discussed in proposed rule and in section II.D.5. of the preamble of 
this final rule with comment period, the MS-DRGs maintain the 
significant advancements in identifying medical technology made

[[Page 47153]]

to the DRGs in past years. At the same time, they greatly improve our 
ability to identify groups of patients with varying levels of severity 
using secondary diagnoses. Further, they improve our ability to assign 
patients to different DRG severity levels based on resource use that is 
independent of the patient's secondary diagnosis--referred to in this 
discussion as ``complexity.'' We proposed to adopt the MS-DRGs for FY 
2008 and also submitted the system to RAND to be considered as part of 
its evaluation of alternative DRG systems. In the proposed rule, we 
encouraged comments on our proposed methodology to establish a severity 
DRG system and the resulting DRGs.
a. Comprehensive Review of the CC List
    Our efforts to better recognize severity of illness began with a 
comprehensive review of the CC list. Currently, 115 DRGs are split 
based on the presence or absence of a CC. For these DRGs, the presence 
of a CC assigns the discharge to a higher weighted DRG. The list of 
diagnoses designated as a CC was initially created at Yale University 
in 1980-1981 as part of the project to develop an ICD-9-CM version of 
the DRGs. The researchers at Yale University developed the ICD-9-CM 
DRGs using national hospital data with diagnoses and procedures coded 
in ICD-9-CM from the second half of 1979. Because hospitals only began 
reporting ICD-9-CM codes in 1979, discharge abstracts at that time were 
much less likely to fully report all secondary diagnoses. As a result, 
the Yale University researchers developed a liberal definition of a CC 
as any secondary diagnosis that ``would cause an increase in length of 
stay by at least 1 day in at least 75 percent of the patients.'' 
Because of the likely underreporting of secondary diagnoses in the 1979 
data, the Yale University researchers also used age as a surrogate for 
identifying patients with a CC. The original version of the ICD-9-CM 
DRGs assigned patients to a CC DRG if they had a secondary diagnosis on 
the CC list or if the patient was 70 years or older.
    With the implementation of the IPPS in FY 1984, the coding of 
secondary diagnoses by hospitals dramatically improved. During the 
first 4 years of the IPPS, the CC definition included the age 70 
criterion. With the improved coding and reporting of diagnoses 
associated with the implementation of the IPPS, the use of age as a 
surrogate for CCs was no longer necessary. Thus, beginning in FY 1988, 
the age 70 criterion was removed from the CC definition and a CC DRG 
was defined exclusively by the presence of a secondary diagnosis on the 
CC list.
    Except for new diagnosis codes that were added to ICD-9-CM after FY 
1984 (for example, HIV), the CC list of diagnoses currently used in the 
CMS DRGs is virtually identical to the CC list created at Yale 
University. However, there have been dramatic changes not only in the 
accuracy and completeness of the coding of secondary diagnoses but also 
in the characteristics of patients admitted to hospitals and the 
practice patterns within hospitals as well.
    Since the implementation of the IPPS, Medicare average length of 
stay has dropped dramatically from 9.8 days in 1983 to 5.7 days in 
2005. The economic incentives inherent in DRGs motivated a change in 
practice patterns to discharge patients earlier from the hospital. 
These changes were facilitated by the increased availability of 
postacute care services, such as nursing homes and home health 
services, which allowed problems previously requiring continued 
hospitalization to be effectively treated outside the acute care 
hospital. Furthermore, there has also been a dramatic shift to 
outpatient surgery that avoids costly inpatient stays. Many surgical 
procedures formerly performed in the hospital are now routinely 
performed on an outpatient basis. As a result, patients admitted to the 
hospital today are on average more likely to have a CC than when the 
IPPS was implemented. The net effect of better coding of secondary 
diagnoses, reductions in hospital length of stay, increased 
availability of postacute care services, and the shift to outpatient 
care is that most patients (nearly 80 percent) admitted to a hospital 
now have a CC. As a result of the changes that have occurred during the 
22 years since the implementation of the IPPS, the CC list as currently 
defined has lost much of its capacity to discriminate hospital resource 
use.
    Currently, 115 CMS DRGs have a CC subdivision. Up until FY 2002, 
the number of DRGs with a CC subdivision remained essentially unchanged 
from the original FY 1984 version of the DRGs. As a means of improving 
the payment accuracy of the DRGs, beginning with the FY 2002 DRG 
update, each base CMS DRG without a CC subdivision was evaluated to 
determine if a CC subdivision was warranted. Over the past five DRG 
updates, only seven base CMS DRGs have had a CC subdivision added. The 
primary constraint preventing a significant increase in the number of 
base CMS DRGs with a CC subdivision is the low number of patients who 
would be assigned to the non-CC group. Thus, the expansion of the 
number of CMS DRGs subdivided based on a CC is constrained because the 
vast majority of patients would be assigned to the CC group and few 
patients would be assigned to the non CC group. To remedy these 
problems, we reviewed each of the 13,549 secondary diagnosis codes to 
evaluate their assignment as a CC or non-CC using statistical 
information from the Medicare claims data and applying medical judgment 
based on current clinical practice. We refer to this list in this 
section as the ``revised CC list.''
    The need for a revised CC list prompted a reexamination of the 
secondary diagnoses that qualify as a CC. Our intent was to better 
distinguish cases that are likely to result in increased hospital 
resource use based on secondary diagnoses. Using a combination of 
mathematical data and the judgment of our medical advisors, we included 
the condition on the CC list if it could demonstrate that its presence 
would lead to substantially increased hospital resource use.
    Diagnoses may require increased hospital resource use because of a 
need for such services as:
    <bullet> Intensive monitoring (for example, an intensive care unit 
(ICU) stay).
    <bullet> Expensive and technically complex services (for example, 
heart transplant).
    <bullet> Extensive care requiring a greater number of caregivers 
(for example, nursing care for a quadriplegic).
    There are 3,326 diagnosis codes on the current CC list. Our 2006 
review of the CC list reduced the number of diagnosis codes on the CC 
list to 2,583. Based on the current CC list, 77.66 percent of patients 
have at least one CC present. Based on the revised CC list from our 
2006 review, the percent of patients having at least one CC present 
would be reduced to 40.34 percent.
b. Chronic Diagnosis Codes
    The 1979 data used in the original formation of the CC list often 
did not have the manifestations of a chronic disease fully coded. As a 
result, the CC list included many chronic diseases with a broad range 
of manifestations. Such chronic illness diagnoses usually do not cause 
a significant increase in hospital resource use unless there is an 
acute exacerbation present or there is a significant deterioration in 
the underlying chronic condition. Therefore, in the revised CC list, we 
removed chronic diseases without a significant acute manifestation. 
Recognition of the impact of the chronic disease is accomplished by 
separately coding the acute manifestation. For example, the mitral 
valve disease codes

[[Page 47154]]

(codes 396.0 through 396.9) are assigned to the current CC list. 
However, unless the mitral valve abnormalities are associated with 
other diagnoses indicating acute deterioration, such as acute 
congestive heart failure, acute pulmonary edema, or respiratory 
failure, they would not be expected to significantly increase hospital 
resource use. Therefore, the revised CC list did not include the mitral 
valve codes. Recognition of the contribution of mitral valve disease to 
the complexity of hospital care would be accomplished by separately 
coding those diseases on the CC list that are associated with an acute 
exacerbation or deterioration of the mitral valve disease.
    The revised CC list applied the criterion that chronic diagnoses 
having a broad range of manifestations are not assigned to the CC list 
as long as there are codes available that allow the acute 
manifestations of the disease to be coded separately. For some 
diseases, there are ICD-9-CM codes that explicitly include a 
specification of the acute exacerbation of the underlying disease. For 
example, for congestive heart failure, the following codes specify an 
acute exacerbation of the congestive heart failure:
    <bullet> 428.21, Acute systolic heart failure
    <bullet> 428.41, Acute systolic and diastolic heart failure
    <bullet> 428.43, Acute on chronic systolic heart failure
    <bullet> 428.31, Acute diastolic heart failure
    <bullet> 428.33, Acute on chronic diastolic heart failure
    These congestive heart failure codes are included on the revised CC 
list. However, the following congestive heart failure codes do not 
indicate an acute exacerbation and are not included in the revised CC 
list:
    <bullet> 428.0, Congestive heart failure not otherwise specified
    <bullet> 428.1, Left heart failure
    <bullet> 428.20, Systolic heart failure not otherwise specified
    <bullet> 428.22, Chronic systolic heart failure
    <bullet> 428.32, Chronic diastolic heart failure
    <bullet> 428.40, Systolic and diastolic heart failure
    <bullet> 428.9, Heart failure not otherwise specified
    As a result of this approach, most chronic diseases were not 
assigned to the revised CC list. In general, a significant acute 
manifestation of the chronic disease must be present and coded for the 
patient to be assigned a CC. We made exceptions for diagnosis codes 
that indicate a chronic disease in which the underlying illness has 
reached an advanced stage or is associated with systemic physiologic 
decompensation and debility. The presence of such advanced chronic 
diseases, even in the absence of a separately coded acute 
manifestation, significantly adds to the treatment complexity of the 
patient. Thus, the presence of the advanced chronic disease inherently 
makes the reason for admission more difficult to treat. For example, 
under the revised CC list, stage IV, V, or end-stage chronic renal 
failure (codes 585.4 through 585.6) are designated as a CC, but stage I 
through III chronic renal failure (codes 585.1 through 585.3) are not. 
For obesity, a body mass index over 35 (codes V85.35 through V85.4) is 
a CC, but a body mass index between 19 and 35 is not. End-stage renal 
failure and extreme obesity are examples of chronic diseases for which 
the advanced stage of the disease is clearly specified.
    However, for most major chronic diseases, the stage of the disease 
is not clearly specified in the code. These codes were evaluated based 
on the consistency and intensity of the physiologic decompensation and 
debility associated with the chronic disease. For example, quadriplegia 
(codes 344.00 through 344.09) requires extensive care with a 
substantial increase in nursing services and more intensive monitoring. 
Therefore, quadriplegia is considered a CC in the revised CC list.
c. Acute Diagnosis Codes
    Examples of acute diseases included on the revised CC list included 
acute myocardial infarction (AMI), cerebrovascular accident (CVA) or 
stroke, acute respiratory failure, acute renal failure, pneumonia, and 
septicemia. These six diseases are representative of the types of 
illnesses we included on the revised CC list. Other acute diseases were 
designated as a CC if their impact on hospital resource use would be 
expected to be comparable to these representative acute diseases. For 
example, acute endocarditis was included on the CC list but urinary 
tract infection was not.
    The revised CC list is essentially comprised of significant acute 
disease, acute exacerbations of significant chronic diseases, advanced 
or end stage chronic diseases and chronic diseases associated with 
extensive debility. Compared to the existing CC list, the revised CC 
list requires a secondary diagnosis to have a consistently greater 
impact on hospital resource use.
    The following Table E compares the current CC list and the revised 
CC list. There are 3,326 diagnosis codes on the current CC list. The CC 
revisions reduce the number of diagnosis codes on the CC list to 2,583. 
Based on the current CC list, 77.66 percent of patients have at least 
one CC present, using FY 2006 MedPAR data. Based on the revised CC 
list, the percent of patients having at least one CC present is reduced 
to 40.34 percent. The revised CC list increases the difference in 
average charges between patients with and without a CC by 56 percent 
($15,236 versus $9,743).

       Table E.--Comparison of Current CC List and Revised CC List
------------------------------------------------------------------------
                                                 Current CC   Revised CC
                                                    list         list
------------------------------------------------------------------------
Codes designated as a CC......................        3,326        2,583
Percent of patients with one or more CCs......        77.66        40.34
Percent of patients with no CC................        22.34        59.66
Average charge of patients with one or more         $24,538      $31,451
 CCs..........................................
Average charge of patients with no CCs........      $14,795      $16,215
------------------------------------------------------------------------

    The analysis above suggests that merely reviewing and updating the 
CC list can lead to significant improvements in the ability of the CMS 
DRGs to recognize severity of illness. Although we could potentially 
adopt this one change to better recognize severity of illness in the 
CMS DRGs, we have undertaken additional analyses that further refine 
secondary diagnoses into MCCs, CCs and non-CCs as described below.
d. Prior Research on Subdivision of CCs into Multiple Categories
(1) Refined DRGs
    During the mid-1980s, CMS (then HCFA) funded a project at Yale 
University to revise the use of CCs in the CMS DRGs. The Yale 
University project mapped all secondary diagnoses that were considered 
a CC in the CMS DRGs into 136 secondary diagnosis groups, each of which 
was assigned a CC complexity level. For surgical patients, each of the 
136 secondary diagnosis groups was assigned to 1 of 4 CC complexity 
levels (non-CC, moderate CC, MCC, and catastrophic CC). For medical 
patients, each of the 136 secondary diagnosis groups was assigned to 1 
of 3 CC complexity levels (non-CC, moderate/MCC, and catastrophic CC). 
All age subdivisions and CC subdivisions in the DRGs were

[[Page 47155]]

eliminated and replaced by the four CC subgroups for surgical patients, 
or the three CC subgroups for medical patients. The Yale University 
project did not reevaluate the categorization of secondary diagnosis as 
a CC versus a non-CC. Only the diagnoses on the standard CC list were 
used to create the moderate, major, and catastrophic subgroups. All 
secondary diagnoses in a secondary diagnosis group were assigned the 
same level, and a patient was assigned to the subgroup corresponding to 
the highest level secondary diagnosis. The number of secondary 
diagnoses had no effect on the subgroup assigned to the patient (that 
is, multiple secondary diagnoses at one level did not cause a patient 
to be assigned to a higher subgroup). The DRG system developed by the 
Yale University project demonstrated that a subdivision of the CCs into 
multiple subclasses would improve the predictability of hospital costs.
(2) 1994 Severity DRGs
    We also examined the work we performed in the mid-1990's to revise 
the CMS DRGs to better recognize severity. In 1993, we reevaluated the 
use of CCs within the CMS DRGs. The reevaluation excluded the CMS DRGs 
associated with pregnancy, newborn, and pediatric patients (MDCs 14 and 
15 and DRGs defined based on age 0-17). The major CC list from the AP-
DRGs that are used for Medicaid payment by New York and other States 
was used to identify an initial list of MCCs. Using Medicare data, we 
reevaluated the categorization of each secondary diagnosis as a non-CC, 
CC, or an MCC. The end result was that 111 diagnoses that were non-CCs 
in the standard CMS DRGs were made a CC, 220 diagnoses that were a CC 
were made a non-CC, and 395 CCs were considered an MCC.
    All CC splits in the CMS DRGs were eliminated, and an additional 24 
DRGs were merged together. The resulting base CMS DRGs were then 
subdivided into three, two, or no subgroups based on an analysis of 
Medicare data. The result was 84 DRGs with no subgroups, 124 DRGs with 
two subgroups, and 85 DRGs with three subgroups. An additional 63 
pregnancy, newborn, and pediatric DRGs not evaluated resulted in a 
total of 652 DRGs.
    A patient was assigned to the CC subgroup corresponding to the 
highest level secondary diagnosis. Multiple secondary diagnoses at one 
level did not cause a patient to be assigned to a higher subgroup. The 
categorization of a diagnosis as non-CC, CC, or MCC was uniform across 
the CMS DRGs, and there were no modifications for specific DRGs. As 
part of the FY 1995 IPPS proposed rule, we made a complete file of the 
revised DRG descriptions available to the public. However, we never 
adopted the revised DRGs (55 FR 27756).
e. Medicare Severity DRGs (MS-DRGs)
    We had several options in developing a refinement to the current 
CMS DRGs to better recognize increased resource use due to severity of 
illness. One option would involve simply taking the work performed in 
1994 and then updating it with all the code changes that have taken 
place since then. We were reluctant to do this because of changes in 
medical practices as well as the substantial changes in ICD-9-CM codes 
since that time. Another option would have been to build on current CMS 
DRGs which include a number of advancements that better identify 
medical practices and technologies. Many commenters on the FY 2007 IPPS 
proposed rule urged us to take the latter approach because they 
believed the current base CMS DRGs clearly differentiate between the 
complexities of varying surgical procedures and medical devices. 
Therefore, we chose the option of developing a new severity DRG system 
based on the current CMS DRGs.
    The development of the 1994 Severity DRGs involved three steps:
    <bullet> Consolidation of existing DRGs into base DRGs.
    <bullet> Categorization of each diagnosis as an MCC, CC, or non-CC.
    <bullet> Subdivision of each base DRG into subclasses based on CCs.
    We reviewed and revised each of the three steps and applied them to 
our current CMS DRGs to develop DRGs that better identify severity of 
illness among Medicare patients. We refer to this system that we 
proposed (and are adopting in this final rule with comment period) as 
the Medicare Severity DRGs (MS-DRGs). The purpose of the MS-DRGs is to 
more accurately stratify groups of Medicare patients with varying 
levels of severity.
    (1) Consolidation of Existing CMS DRGs into Base MS-DRGs
    The first step in our process was the consolidation of existing CMS 
DRGs into new proposed base MS-DRGs. We combined together the 115 pairs 
of CMS DRGs that are subdivided based on the presence of a CC. We 
further consolidated the CMS DRGs that are split on the basis of a 
major cardiovascular condition, AMI with and without major complication 
(CMS DRGs 121 and 122), and cardiac catheterization with and without 
complex diagnoses (CMS DRGs 124 and 125). We also consolidated the 
three pairs of burn CMS DRGs that were defined based on the presence of 
a CC or a significant trauma (CMS DRGs 506 and 507; 508 and 509; and 
510 and 511). Next, we consolidated the 43 pediatric CMS DRGs that are 
defined based on age less than or equal to 17. These pediatric CMS DRGs 
contain a very low volume of Medicare patients. As shown in Table 10 of 
the FY 2007 IPPS final rule (71 FR 48318), only two of these pediatric 
CMS DRGs contained more than 100 patients (CMS DRGs 298 and 333). 
Seventeen of these pediatric DRGs had no patients (CMS DRGs 30, 33, 41, 
48, 54, 58, 137, 252, 255, 282, 330, 340, 343, 393, 405, 446, and 448). 
As we have stated frequently, our primary focus in maintaining the CMS 
DRGs is to serve the Medicare population. We do not have the data or 
the expertise to maintain the DRGs in clinical areas that are not 
relevant to the Medicare population. We continue to encourage users of 
the CMS DRGs (or MS-DRGs that are being adopted) to make relevant 
adaptations if they are being used for a non-Medicare patient 
population.
    In addition to the pediatric CMS DRGs defined by the age of the 
patient, there are a number of CMS DRGs that relate primarily to the 
pediatric or adult population that have very low volume in the Medicare 
population, such as male sterilization, tubal interruptions, 
circumcisions, tonsillectomies, and myringotomies. These CMS DRGs were 
consolidated into the most clinically similar MS-DRG.
    Over the past two decades, the site of service for some elective 
procedures such as carpal tunnel release, cataract extraction, and 
laparoscopy has shifted from the inpatient to the outpatient setting, 
resulting in the CMS DRGs associated with these procedures having very 
low volume. These CMS DRGs were also consolidated into the most 
clinically similar MS-DRG. In addition, there were some clinically 
related CMS DRGs that had significant Medicare patient volume but had 
no significant difference in resource use. For example, thyroid (CMS 
DRG 290) and parathyroid (CMS DRG 289) procedures were virtually 
identical in terms of hospital resource use and were, therefore, 
consolidated. In total, 34 of these CMS DRGs were consolidated. The DRG 
consolidations are summarized in Table F below.
    Four pairs of MS-DRGs (223 and 224; 228 and 229; 323 and 324; and 
551 and 552) were defined based on the presence of a CC or some other 
condition. For example, MS-DRG 323 is defined based on the presence of 
a CC or the performance of extracorporeal shock

[[Page 47156]]

wave lithotripsy. For these MS-DRGs, the CC condition was removed and 
the pair of DRGs remains separate but defined based only on the other 
condition (that is, MS-DRG 323 became urinary stones with 
extracorporeal shock wave lithotripsy). As was done in the 1994 
severity DRG work, we did not consolidate any of the CMS DRGs for 
maternity or newborn cases.
    Before proceeding further, we made one additional change to a base 
DRG assignment after completing these consolidations. We assigned 
cranial-facial bone procedures to a new base DRG (Cranial/Facial Bone 
Procedures). These cases were previously assigned to DRGs 52 and 55 
through 63. We also created a new base DRG, MS-DRG 245 (Automatic 
Implantable Cardiac Defibrillator (ACID) Lead and Generator 
Procedures). This DRG was created by removing automatic implantable 
cardiac defibrillator leads and generator procedures from the pacemaker 
DRG (CMS DRG 551; now new MS-DRGs 242 through 244).
    Table F below shows how DRGs in the CMS DRGs (Version 24.0) were 
consolidated into new base MS DRGs. We refer readers to section II.D.2. 
of the preamble of the proposed rule and this final rule with comment 
period for a detailed discussion of CCs and MCCs under the MS-DRG 
system.

                                           Table F.--DRG Consolidation
----------------------------------------------------------------------------------------------------------------
                                                                        MS-DRGs
        CMS-DRG version 24.0                 DRG description         version 25.0    New base MS-DRG description
----------------------------------------------------------------------------------------------------------------
6...................................  Carpal Tunnel Release.......              40  Peripheral & Cranial Nerve &
                                                                                41   Other Nervous System
                                                                                42   Procedure with MCC, with
                                                                                     CC, and without CC/MCC.
7, 8................................  Peripheral & Cranial Nerve &
                                       Other Nervous System
                                       Procedure.
----------------------------------------------------------------------------------------------------------------
36..................................  Retinal Procedures..........             116  Intraocular Procedures with
                                                                               117   and without CC/MCC.
38..................................  Primary Iris Procedures.
39..................................  Lens Procedures with or
                                       without Vitrectomy.
42..................................  Intraocular Procedures
                                       Except Retina, Iris & Lens.
----------------------------------------------------------------------------------------------------------------
43..................................  Hyphema.....................             124  Other Disorders of the Eye
                                                                               125   with and without MCC.
46, 47, 48..........................  Other Disorders of the Eye.
----------------------------------------------------------------------------------------------------------------
50..................................  Sialoadenectomy.............             139  Salivary Gland Procedures.
51..................................  Salivary Gland Procedures
                                       Except Sialoadenectomy.
----------------------------------------------------------------------------------------------------------------
52..................................  Cleft Lip & Palate Repair...             133  Other Ear, Nose, Mouth &
                                                                                     Throat O.R. Procedures with
                                                                                     and without CC/MCC.
55..................................  Miscellaneous Ear, Nose,
                                       Mouth & Throat Procedures.
----------------------------------------------------------------------------------------------------------------
56..................................  Rhinoplasty.................             131  New DRG--Cranial/Facial Bone
                                                                               132   Procedures with and without
                                                                                     CC/MCC.
57, 58..............................  Tonsillectomy &
                                       Adenoidectomy Procedure,
                                       Except Tonsillectomy &/or
                                       Adenoidectomy Only.
59, 60..............................  Tonsillectomy &/or
                                       Adenoidectomy Only.
61, 62..............................  Myringotomy with Tube
                                       Insertion.
63..................................  Other Ear, Nose, Mouth &
                                       Throat O.R. Procedures.
----------------------------------------------------------------------------------------------------------------
67..................................  Epiglottitis................             152  Otitis Media & Upper
                                                                               153   Respiratory Infection with
                                                                                     and without MCC.
68, 69, 70..........................  Otitis Media & Upper
                                       Respiratory Infection.
71..................................  Laryngotracheitis.
----------------------------------------------------------------------------------------------------------------
72..................................  Nasal, Trauma & Deformity...             154  Other Ear, Nose, Mouth &
                                                                               155   Throat Diagnoses with MCC,
                                                                               156   with CC, without CC/MCC.
73, 74..............................  Other Ear, Nose, Mouth &
                                       Throat Diagnoses.
----------------------------------------------------------------------------------------------------------------
185, 186............................  Dental & Oral Diseases                   157  Dental & Oral Diseases with
                                       Except Extractions &                    158   MCC, with CC, without CC/
                                       Restorations.                           159   MCC.
187.................................  Dental Extractions &
                                       Restorations.
----------------------------------------------------------------------------------------------------------------
199.................................  Hepatobiliary Diagnostic                 420  Hepatobiliary Diagnostic
                                       Procedure for Malignancy.               421   Procedures with MCC, with
                                                                               422   CC, without CC/MCC.
200.................................  Hepatobiliary Diagnostic
                                       Procedure for Non-
                                       Malignancy.
----------------------------------------------------------------------------------------------------------------

[[Page 47157]]

 
244, 245............................  Bone diseases & Specific                 553  Bone Diseases &
                                       Arthropathies.                          554   Arthropathies with and
                                                                                     without MCC.
246.................................  Non-Specific Arthropathies.
----------------------------------------------------------------------------------------------------------------
259, 260............................  Subtotal Mastectomy for                  584  Breast Biopsy, Local
                                       Malignancy *.                           585   Excision & Other Breast
                                                                                     Procedures with and without
                                                                                     CC/MCC.
261.................................  Breast Procedures for Non-
                                       Malignancy Except Biopsy &
                                       Local Excision.
262.................................  Breast Biopsy & Local
                                       Excision for Non-
                                       Malignancy.
----------------------------------------------------------------------------------------------------------------
267.................................  Perianal & Pilonidal                     579  Other Skin, Subcutaneous
                                       Procedures.                             580   Tissue & Breast Procedures
                                                                               581   with MCC, with CC, without
                                                                                     CC/MCC.
268.................................  Skin, Subcutaneous Tissue &
                                       Breast Plastic Procedures.
269, 270............................  Other Skin, Subcutaneous
                                       Tissue & Breast Procedure.
----------------------------------------------------------------------------------------------------------------
289.................................  Parathyroid Procedures......             625  Thyroid, Parathyroid &
                                                                               626   Thyroglossal Procedures
                                                                               627   with MCC, with CC, without
                                                                                     CC/MCC.
290.................................  Thyroid Procedures.
291.................................  Thyroglossal Procedures.
----------------------------------------------------------------------------------------------------------------
294.................................  Diabetes > 35...............             637  Diabetes with MCC, with CC,
                                                                                     without CC/MCC.
295.................................  Diabetes < 35.
----------------------------------------------------------------------------------------------------------------
338.................................  Testes Procedures for                    711  Testes Procedures with and
                                       Malignancy.                             712   without CC/MCC.
339, 340............................  Testes Procedures, Non-
                                       Malignancy.
----------------------------------------------------------------------------------------------------------------
342, 343............................  Circumcision................  ..............  Procedure 64.0 changed to
                                                                                     non-O.R. Cases with only
                                                                                     this procedure will go to
                                                                                     medical DRGs.
----------------------------------------------------------------------------------------------------------------
351.................................  Sterilization, Male.........             729  Other Male Reproductive
                                                                               730   System Diagnoses with and
                                                                                     without CC/MCC
352.................................  Other Male Reproductive
                                       System Diagnoses.
----------------------------------------------------------------------------------------------------------------
361.................................  Laparoscopy & Incisional                 744  D&C, Conization, Laparascopy
                                       Tubal Interruption.                     745   & Tubal Interruption with
                                                                                     and without CC/MCC.
362.................................  Endoscopic Tubal
                                       Interruption.
363.................................  D&C, Conization & Radio-
                                       Implant, for Malignancy.
364.................................  D&C, Conization Except for
                                       Malignancy.
----------------------------------------------------------------------------------------------------------------
411.................................  History of Malignancy                    843  Other Myeloproliferative
                                       without Endoscopy.                      844   Disease or Poorly
                                                                               845   Differentiated Neoplasm
                                                                                     Diagnosis with MCC, with
                                                                                     CC, without CC/MCC.
412.................................  History of Malignancy with
                                       Endoscopy.
413, 414............................  Other Myeloproliferative
                                       Disease or Poorly
                                       Differentiated Neoplasm
                                       Diagnosis.
----------------------------------------------------------------------------------------------------------------
465.................................  Aftercare with History of                949  Aftercare with and without.
                                       Malignancy as Secondary
                                       Diagnosis.
----------------------------------------------------------------------------------------------------------------
466.................................  Aftercare without History of             950  CC/MCC.
                                       Malignancy as Secondary
                                       Diagnosis.
----------------------------------------------------------------------------------------------------------------
* Codes 85.22 and 85.23 in CMS DRGs 259 and 260 were moved to MS-DRG 582 and 583.

    As summarized in Table G, the consolidation resulted in the 
formation of 335 base MS-DRGs.

        Table G.--Consolidation of Current CMS DRGs Into MS DRGs
------------------------------------------------------------------------
                                                                 Number
------------------------------------------------------------------------
Current CMS DRGs.............................................        538
Elimination of CC subgroups..................................       -114
Elimination of MCC subgroups.................................         -7
Elimination of CC complexity subgroups.......................         -5

[[Page 47158]]

 
Elimination of age 0-17 subgroups............................        -43
Consolidation due to volume or resource similarity...........        -34
New DRG......................................................         +1
Revised Base DRGs............................................        311
Newborn, maternity and error DRGs............................        +24
Base DRGs for severity subdivision...........................        335
------------------------------------------------------------------------

    The end result of the consolidation of the CMS DRGs in the MS-DRGs 
was similar to the consolidation performed in the 1994 severity DRGs. 
The 1994 DRG consolidations resulted in 356 base DRGs plus 2 error 
DRGs. The number of the 1994 base DRGs is different because new CMS 
DRGs have been added since 1994, the 43 age 0-17 pediatric CMS DRGs 
were not consolidated, and some of the volume shifts to outpatient care 
had not yet occurred in 1994. In the 1994 severity DRGs, 24 DRGs were 
consolidated due to volume or resource similarity. Sixteen of these 
1994 DRG consolidations are included in the 34 consolidations done in 
the 2007 consolidations. However, due to concerns expressed by our 
physician consultants, 8 of the DRG consolidations from 1994 were not 
done. For example, interstitial lung disease (DRGs 92 and 93) was not 
consolidated with simple pneumonia and pleurisy (DRGs 89, 90, 91) as 
was done in the 1994 consolidations.
    Comment: One commenter expressed concern that the focus of MS-DRGs 
was on the Medicare population. As a result of this focus, many of the 
DRGs reflect severity and resource use only for the Medicare 
population. The commenter stated that certain diagnoses present 
differently at different ages or actually represent a different disease 
process. For instance, the commenter stated that hypertension in a 
child represents a very different disease than for adults. The 
commenter also stated that CMS DRGs 569 and 570 (Major Small and Large 
Bowel Procedures with CC and with or without Major Gastrointestinal 
Diagnosis, respectively) have different costs for a Medicare patient 
than a child. The commenter also indicated that CMS did not perform 
updates to MDC 14 (Obstetrics) and MDC 14 (Newborns and Other Neonates 
with Problems Arising in the Perinatal Period). The commenter stated 
that the MS-DRGs will not work well for other populations.
    Response: The MS-DRGs were specifically designed for purposes of 
Medicare hospital inpatient services payment. As we stated above, we 
generally use MedPAR data to evaluate possible DRG classification 
changes and recalibrate the DRG weights. The MedPAR data only represent 
hospital inpatient utilization by Medicare beneficiaries. We do not 
have comprehensive data from non-Medicare payers to use for this 
purpose. The Medicare program only provides health insurance benefits 
for people over the age of 65 or who are disabled or suffering from 
end-stage renal disease. Therefore, newborns, maternity, and pediatric 
patients are not well-represented in the MedPAR data that we used in 
the design of the MS-DRGs. We simply do not have enough data to 
establish stable and reliable DRGs and relative weights to address the 
needs of non-Medicare payers for pediatric, newborn, and maternity 
patients. For this reason, we encourage those who want to use MS-DRGs 
for patient populations other than Medicare make the relevant 
refinements to our system so it better serves the needs of those 
patients.
(2) Categorization of Diagnoses
    We decided to establish three different levels of CC severity into 
which we would subdivide the diagnosis codes. The proposed three levels 
are MCC, CC, and non-CC. Diagnosis codes classified as MCCs reflect the 
highest level of severity. The next level of severity includes 
diagnosis codes classified as CCs. The lowest level is for non-CCs. 
Non-CCs are diagnosis codes that do not significantly affect severity 
of illness and resource use. Therefore, secondary diagnoses that are 
non-CCs do not affect the DRG assignment under either the CMS DRGs or 
the MS-DRGs.
    The categorization of diagnoses as an MCC, CC, or non-CC was 
accomplished using an iterative approach in which each diagnosis was 
evaluated to determine the extent to which its presence as a secondary 
diagnosis resulted in increased hospital resource use. In order to 
begin this iterative process, we started with an initial categorization 
of each diagnosis as an MCC, CC, or non-CC. As noted previously, the 
1994 CC revision began by separating CCs into MCC and CC based on the 
AP-DRG major CCs. One way to begin this iterative process would have 
been to use the 1994 CC categorization. However, the 1994 CC 
categorization was based on FY 1992 data and ICD-9-CM diagnosis codes, 
which now are 15 years old. Since 1992, 1,897 new diagnosis codes have 
been added, and 346 diagnosis codes have been deleted. Because the 
revised CC list (explained in section II.C.2.a. of this preamble) was 
based on current ICD-9-CM codes and used recent data, we decided to 
utilize the revised CC list rather than the 1994 categorization as our 
starting point for determining whether each secondary diagnosis should 
be an MCC, a CC, or a non-CC.
    The revised CC list categorizes each diagnosis as a CC or a non-CC. 
We decided to use this list in combination with the categorization 
under the AP-DRGs and the APR DRGs. The AP-DRGs and the APR DRGs are 
updated annually with current codes and provide a good comparison 
source to use with the revised CC list. We designated as an MCC any 
diagnosis that was a CC in the revised CC list and was an AP-DRG major 
CC and was an APR DRG default severity level 3 (major) or 4 
(extensive). We designated as a non-CC any diagnosis that was a non-CC 
in the revised CC list and was an AP-DRG non-CC and was an APR DRG 
default severity level of 1 (minor). Any diagnoses that did not meet 
either of the above two criteria was designated as a CC.
    The only exception to our approach was for diagnoses related to 
newborns, maternity, and congenital anomalies. These diagnoses are very 
low volume in the Medicare population and were not reviewed for 
purposes of creating the revised CC list. We used the APR DRGs to 
categorize these diagnoses. For newborn, obstetric, and congenital 
anomaly diagnoses, we designated the APR DRG default severity level 3 
(major) and 4 (extreme) diagnoses as an MCC, the APR DRG default 
severity level 2 (moderate) diagnoses as a CC, and the APR DRG default 
severity 1 (minor) diagnoses as a non-CC. Table H summarizes the number 
of codes in each CC category.

              Table H.--Initial Categorization of CC Codes
------------------------------------------------------------------------
                                                               Number of
                                                                 codes
------------------------------------------------------------------------
MCC..........................................................      1,096
CC...........................................................      4,221
Non CC.......................................................      8,232
                                                              ----------
    Total....................................................     13,549
------------------------------------------------------------------------

    This initial CC categorization of diagnosis codes was used to begin 
the iterative process of determining the proposed final CC 
categorization for each diagnosis code.

[[Page 47159]]

(3) Additional CC Exclusions
    For some CMS DRGs, the presence of specific secondary diagnoses 
affects the base DRG assignment. For example, in MDC 5 (Diseases and 
Disorders of the Circulatory System), the presence of an AMI code as 
the principal diagnosis or as a secondary diagnosis will cause the 
patient to be assigned to the AMI DRGs (CMS DRGs 121 through 123). 
Therefore, if the AMI code is present as a secondary diagnosis, it 
should not be used to assign the CC category for a patient because it 
is redundant within the definition of the base DRG. Similarly, for MDC 
24 (Multiple Significant Trauma), specific combinations of significant 
trauma as principal or secondary diagnosis cause the assignment to the 
multiple trauma DRGs (CMS DRGs 484 through 487). Therefore, any 
secondary diagnosis of trauma is redundant with the definition of the 
multiple trauma DRGs and should not be used to determine the CC 
category for a patient. Any secondary diagnoses that are used to assign 
a specific proposed base MS-DRG were excluded from the determination of 
the CC category for patients assigned to that base MS-DRG.
    Comment: Several commenters asked that we make changes to the CC 
and exclusion list for codes associated with sepsis. The commenters 
stated that two Systemic Inflammatory Response Syndrome (SIRS) codes, 
995.91 (Sepsis) and 995.92 (Severe sepsis) are CCs under MS-DRGs. The 
commenters believed that if a patient has SIRS and pneumonia, both 
conditions should be coded, and that this coding would result in a 
patient admitted with SIRS being assigned to MS-DRG 871 (Septicemia 
without Mechanical Ventilation with MCC). The commenters stated that 
the pneumonia would count as a MCC in this case. The commenters 
requested that CMS exclude pneumonia from being a MCC when it occurs 
with sepsis. The commenters believed pneumonia should be excluded as an 
MCC for a patient with sepsis because it is an underlying and related 
condition, and that these patients should not be assigned to MS-DRG 
871. The commenters stated that the other SIRS codes, 995.93 (Systemic 
Inflammatory Response Syndrome due to noninfectious process without 
acute organ dysfunction) and 995.94 (Systemic Inflammatory Response 
Syndrome due to noninfectious process with acute organ dysfunction) are 
excluded from acting as a CC for pancreatitis (code 577.0). The 
commenters asked that CMS not exclude codes 995.93 and 995.94 with code 
577.0.
    Response: The commenters are mistaken about codes 995.91 and 
995.92. While these two codes are not CCs, they are on the MCC list. 
Our data and the judgment of our medical advisors support the 
assignment of these codes to the MCC list. Furthermore, we do not 
believe it is appropriate to exclude pneumonia as an MCC for sepsis and 
severe sepsis. These patients would be at an extremely high level of 
severity. SIRS is not always associated with pneumonia but when it is, 
the patient is at a higher severity level. Therefore, we are not making 
this change to the CC exclusion list by excluding pneumonia codes from 
acting as a MCC with code 995.91 and 995.92. On the second issue the 
commenters raised, they are incorrect that codes 995.91 and 995.92 are 
excluded from acting as a CC for code 577.0. These codes are not on the 
CC exclusion list for code 577.0. Therefore, both would act as a MCC 
for code 577.0. We are not making any changes to the CC exclusion list 
as a result of these comments.
    (4) Analysis of Secondary Diagnoses
    The 311 base MS-DRGs (335 total base DRGs minus the MDC 14, MDC 5, 
and error DRGs) were subdivided into three CC subgroups. Patients were 
assigned to the subgroup corresponding to the most extreme CC present. 
All but four of the base MS-DRGs had strictly monotonically increasing 
average charges across the three CC subgroups (that is, average charges 
progressively increased from the non-CC to the CC to the MCC 
subgroups). The four MS-DRGs that failed to have monotonically 
increasing charges all had at least one CC subgroup with very low 
volume. For example, the non CC subgroup for the pancreas transplant 
DRG (CMS DRG 513) had only 2 cases. The overall statistics by CC 
subgroup for the 311 base MS-DRG are contained in Table I. Patients in 
the MCC subgroup have average charges that are nearly double the 
average charges for patients in the CC subgroup. The CC subgroup with 
the largest number of patients is the non-CC subgroup with 41.1 percent 
of the patients.

 Table I.--Overall Statistics for MS-DRGs Excluding Those in MDCs 14 and
                                   15
------------------------------------------------------------------------
                                      Number of                Average
            CC subgroup                 cases      Percent     charges
------------------------------------------------------------------------
Major..............................    2,604,696       22.2      $44,246
CC.................................    4,293,744       36.6       24,131
Non-CC.............................    4,818,411       41.1       18,435
------------------------------------------------------------------------

    In order to evaluate the initial assignment of secondary diagnoses 
to the three CC subclasses, we devised a system that determined the 
impact on resource use of each secondary diagnosis. For each secondary 
diagnosis, we measured the impact in resource use for the following 
three subsets of patients:
    (a) Patients with no other secondary diagnosis or with all other 
secondary diagnoses that are non-CCs.
    (b) Patients with at least one other secondary diagnosis that is a 
CC but none that is an MCC.
    (c) Patients with at least one other secondary diagnosis that is an 
MCC.
    Numerical resource impact values were assigned for each diagnosis 
as follows:

------------------------------------------------------------------------
                   Value                               Meaning
------------------------------------------------------------------------
0.........................................  Significantly below expected
                                             value for the non-CC
                                             subgroup.
1.........................................  Approximately equal to
                                             expected value for the non-
                                             CC subgroup.
2.........................................  Approximately equal to
                                             expected value for the CC
                                             subgroup.
3.........................................  Approximately equal to
                                             expected value for the MCC
                                             subgroup.
4.........................................  Significantly above the
                                             expected value for the MCC
                                             subgroup.
------------------------------------------------------------------------

    Each diagnosis for which Medicare data were available was evaluated 
to determine its impact on resource use and to determine the most 
appropriate CC subclass (non-CC, CC, or MCC) assignment. In order to 
make this determination, the average charge for each subset of cases 
was compared to the expected charge for cases in that

[[Page 47160]]

subset. The following format was used to evaluate each diagnosis:

----------------------------------------------------------------------------------------------------------------
 
----------------------------------------------------------------------------------------------------------------
Code.....................................  Diagnosis..................   Cnt1     C1   Cnt2     C2   Cnt3     C3
----------------------------------------------------------------------------------------------------------------

    Count (Cnt) is the number of patients in each subset and C1, C2, 
and C3 are a measure of the impact on resource use of patients in each 
of the subsets. The C1, C2, and C3 values are a measure of the ratio of 
average charges for patients with these conditions to the expected 
average charge across all cases. The C1 value reflects a patient with 
no other secondary diagnosis or with all other secondary diagnoses that 
are non-CCs. The C2 value reflects a patient with at least one other 
secondary diagnosis that is a CC but none that is a major CC. The C3 
value reflects a patient with at least one other secondary diagnosis 
that is a major CC. A value close to 1.0 in the C1 field would suggest 
that the code produces the same expected value as a non-CC diagnosis. 
That is, average charges for the case are similar to the expected 
average charges for that subset and the diagnosis is not expected to 
increase resource usage. A higher value in the C1 (or C2 and C3) field 
suggests more resource usage is associated with the diagnosis and an 
increased likelihood that it is more like a CC or major CC than a non-
CC. Thus, a value close to 2.0 suggests the condition is more like a CC 
than a non-CC but not as significant in resource usage as an MCC. A 
value close to 3.0 suggests the condition is expected to consume 
resources more similar to an MCC than a CC or non-CC. For example, a C1 
value of 1.8 for a secondary diagnosis means that for the subset of 
patients who have the secondary diagnosis and have either no other 
secondary diagnosis present, or all the other secondary diagnoses 
present are non-CCs, the impact on resource use of the secondary 
diagnoses is greater than the expected value for a non-CC by an amount 
equal to 80 percent of the difference between the expected value of a 
CC and a non-CC (that is, the impact on resource use of the secondary 
diagnosis is closer to a CC than a non-CC).
    Table J below shows examples of the results.

                       Table J.--Examples of Impact on Resource Use of Secondary Diagnoses
----------------------------------------------------------------------------------------------------------------
             Code                  Cnt1        C1       CntC2        C2        Cnt3        C3      CC  subclass
----------------------------------------------------------------------------------------------------------------
401.1, Benign essential            12,308      0.955     40,113      1.715      5,297      2.384  Non CC.
 hypertension.
530.81, Esophageal reflux.....    294,673      0.986    917,058      1.639    122,076      2.302  Non CC.
560.1, Paralytic Ileus........     10,651      1.466     87,788      2.320     51,303      3.226  CC.
491.20, Obstructive chronic         7,003      1.416     32,276      2.193     13,355      3.035  CC.
 bronchitis.
410.71, Subendocardial              1,657      2.245     30,226      2.778     42,862      3.232  MCC.
 infarction initial episode.
518.81, Acute respiratory           5,332      2.096    118,937      2.936    223,054      3.337  MCC.
 failure.
----------------------------------------------------------------------------------------------------------------

    The resource use impact reports were produced for all diagnoses 
except obstetric, newborn, and congenital anomalies (10,690 diagnoses). 
These mathematical constructs were used as guides in conjunction with 
the judgment of our clinical staff to classify each secondary diagnosis 
reviewed as an MCC, CC or non-CC. Our clinical panel reviewed the 
resource use impact reports and modified 14.9 percent of the initial CC 
subclass assignments as summarized in Table K below. The rows in the 
table are the initial CC subclass categories and the columns are the 
final CC subclass categories.
    Comment: Several commenters acknowledged the detailed description 
of the methodology used in categorizing secondary diagnoses as MCCs, 
CCs, or non-CCs. While they were appreciative of the detailed iterative 
process outlined in the proposed rule (72 FR 24702), the commenters 
requested that CMS provide the numerical values (the C1 to C3 values) 
that were assigned to classify each diagnosis as an MCC, CC or non-CC.
    Response: We agree that it would be helpful to share the data we 
developed and used for each individual code as part of our CC 
evaluation process. We will post this data on the CMS Web site at: 
http://www.cms.hhs.gov/AcuteInpatientPPS/ under the Downloads section.

                                       Table K.--CC Subclass Modifications
----------------------------------------------------------------------------------------------------------------
                                                                             Final CC subclass
                   Initial CC subclass                    ------------------------------------------------------
                                                              MCC         CC       Non-CC     Total     Percent
----------------------------------------------------------------------------------------------------------------
MCC......................................................        847         62          0        909        8.5
CC.......................................................        542      2,579        737      3,858       36.1
Non-CC...................................................          0        272      5,651      5,923       55.4
----------------------------------------------------------------------------------------------------------------
    Total................................................      1,389      2,913      6,388     10,690  .........
    Percent..............................................       13.0       27.2       59.8  .........  .........
----------------------------------------------------------------------------------------------------------------

    Of the diagnoses initially designated as an MCC, 6.8 percent were 
made a CC (62/909), and of the diagnoses initially designated as non-
CC, 4.6 percent were made a CC (272/5,923). The major shift occurred in 
the diagnoses initially assigned to the CC subclass. Fourteen percent 
of the diagnoses initially designated as a CC were made an MCC (542/
3858), and 19.1 percent of the diagnoses initially designated a CC were 
made a non-CC (737/3,858). In determining the CC subclass assigned to a 
diagnosis, imprecise codes were, in general, not assigned to the MCC or 
CC

[[Page 47161]]

subclass. For example, the congestive heart failure codes have the 
following CC subclass assignments:

----------------------------------------------------------------------------------------------------------------
                    Code                                            CC subclass assignment
----------------------------------------------------------------------------------------------------------------
428.21, Acute systolic heart failure........  MCC.
428.41, Acute systolic & diastolic heart      MCC.
 failure.
428.43, Acute on chronic systolic heart       MCC.
 failure.
428.31, Acute diastolic heart failure.......  MCC.
428.33, Acute on chronic diastolic heart      MCC.
 failure.
428.1, Left heart failure...................  CC.
428.20, Systolic heart failure NOS..........  CC.
428.22, Chronic systolic heart failure......  CC.
428.32, Chronic diastolic heart failure.....  CC.
428.40, Systolic & diastolic heart failure..  CC.
428.0, Congestive heart failure NOS.........  Non-CC.
428.9, Heart failure NOS....................  Non-CC.
----------------------------------------------------------------------------------------------------------------

    The acute heart failure codes are MCCs, and the chronic heart 
failure codes are CCs. However, Not Otherwise Specified (NOS) heart 
failure codes are non-CCs. Thus, the precise type of heart failure must 
be specified in order for an MCC or CC to be assigned.
    There are currently 13,549 ICD-9-CM diagnosis codes. The external 
cause of injury and poisoning codes (E800 through E999) and congenital 
abnormality codes were not included in our current CC review for the 
MS-DRGs. We excluded the external cause of injury and poisoning codes 
from consideration as an MCC or a CC because they describe how an 
injury occurred, and not the exact nature of the injury. For instance, 
if a patient fell on the deck of a boat and fractured his or her skull, 
one would assign an E code to describe the fall on the boat. A separate 
diagnosis code would be assigned to describe the exact nature of any 
resulting injury such as a contusion, fractured bone, or skull fracture 
and concussion. A patient would be assigned to a severity level based 
on the exact nature of the injury and not the manner in which the 
injury occurred. Therefore, we decided not to classify any of the E 
codes as either an MCC or a CC. The congenital abnormality codes 
describe abnormalities when a baby is born. At times, a beneficiary may 
live with these congenital abnormalities for years without a problem. 
The congenital abnormalities may later lead to complications that 
require hospital admissions. Should these congenital abnormalities lead 
to medical problems that result in a hospital admission for a Medicare 
beneficiary, the exact nature of the condition being treated would also 
be assigned a code. This more precise code would be evaluated to 
determine whether or not it was an MCC or a CC. Therefore, we decided 
not to classify congenital abnormality codes as an MCC or a CC, but to 
instead use the other reported diagnosis codes that better describe the 
reason for the admission. Excluding the external cause of injury codes, 
we reviewed 10,690 diagnosis codes.
    As was done in our 1994 severity proposal, diagnoses that were 
closely associated with patient mortality were assigned different CC 
subclasses, depending on whether the patient lived or died. These 
diagnoses are:
    <bullet> 427.41, Ventricular fibrillation
    <bullet> 427.5, Cardiac arrest
    <bullet> 785.51, Cardiogenic shock
    <bullet> 785.59, Other shock without mention of trauma
    <bullet> 799.1, Respiratory arrest
    Resource use for patients with these diagnoses who were discharged 
alive was consistent with an MCC. Resource use for patients with these 
diagnoses who died was consistent with a non-CC. Further, most patients 
who died could legitimately have one of these diagnoses coded. As a 
result, these diagnoses are assigned an MCC subclass for patients who 
lived and a non-CC subclass for patients who died.
    For some secondary diagnoses assigned to the CC subclass, our 
medical advisors identified specific clinical situations in which the 
diagnosis should not be considered a CC. In such clinical situations, 
the CC exclusion list was used to exclude the secondary diagnosis from 
consideration in determining the CC subgroup, essentially making the 
secondary diagnosis a non-CC. For example, primary cardiomyopathy (code 
425.4) is designated as a CC. However, for patients admitted for 
congestive heart failure, our medical advisors believed that primary 
cardiomyopathy should be treated as a non-CC. In order to accomplish 
that, the congestive heart failure principal diagnoses were added to 
the CC exclusion list for primary cardiomyopathy as a secondary 
diagnosis.
    The list of diagnosis codes that we proposed to classify as an MCC 
(which we are adopting in this final rule with comment period) was 
included in Table 6J in the Addendum to FY 2008 IPPS proposed rule. The 
diagnosis codes that we proposed to classify as a CC (which are 
adopting in this final rule with comment period) were included in Table 
6K in the Addendum to the proposed rule. The E-codes, which are 
diagnosis codes used to classify external causes of injury and 
poisoning, are not included in this list. All E codes are designated as 
non-CCs under the current CMS DRG system and our evaluation supports 
this non-CC designation as appropriate. We are including a list of 
changes to the MCC and CC lists as a result of public comments on the 
proposed rule later in section II.G.13. of the preamble of this final 
rule with comment period. We will post a complete final list of the MCC 
and CC codes on the CMS Web site at: http://www/cms/hhs/gov/
AcuteInpatientPPS/ under the Files for Download section.
    Comment: One commenter supported the basic methodology used to 
identify MCCs and CCs. The commenter's analysis of discharge data 
generally confirms the notion that the presence of chronic disease does 
not usually have material impact on the expected cost of care. The 
commenter agreed that the emphasis on acute manifestations of chronic 
diseases is both clinically and financially appropriate. The commenter 
stated that the current CC list is nearly 25 years old and does not 
reflect the extent to which clinical practice has changed during that 
period, with concomitant changes in expected resource use. The 
commenter further stated that the current CC list also does not reflect 
the nature of changes in coding practices during that period, changes 
that have undermined the value of the current CC list. The commenter 
stated that the elimination of common secondary diagnoses such as code 
428.0 (Congestive heart failure, unspecified)

[[Page 47162]]

and code 427.31 (Atrial fibrillation) from the CC list will help to 
restore CC status as a meaningful indicator of differential expected 
resource use. The commenter also believed that elimination of these 
diagnosis codes will address the current situation in which nearly 80 
percent of Medicare discharges contain one or more CCs.
    Response: We agree that it was important to perform a careful 
review of the CC list to develop lists that more accurately identify 
patients with significantly different severity levels. We believe that 
by using both statistical data as well as input from our medical 
advisors, we were able to develop the MCCs and CCs that do a much 
better job of classifying Medicare patients with varying levels of 
severity. We also agree that is important to remove chronic diagnoses 
from the CC list that do not have a significant impact on severity. We 
also believe that nonspecific codes such as code 428.0 should not be 
included on the CC list. The ICD-9-CM coding system has more specific 
codes to identify the specific type of heart failure. These more 
specific codes have data supporting their inclusion on the MCC and CC 
list. Our medical advisors also supported the inclusion of the more 
specific heart failure codes on the MCC and CC list. We also agree that 
patients with atrial fibrillation (code 427.31) do not necessarily have 
a higher level of severity. The Medicare data suggest that when this 
condition appears on the claim and the patient has no other secondary 
diagnosis that is a CC, the charge data suggest the condition produces 
an expected value for a non-CC rather than a CC case. Further in the 
judgment of our medical advisors, the condition should not be on the CC 
list. When the atrial fibrillation leads to additional cardiac 
problems, the additional problems may be represented by codes that are 
on the MCC or CC list. We agree that by removing codes from the CC list 
that do not contribute to significantly higher levels of severity, we 
can better recognize severity of illness and more accurately reimburse 
hospitals.
    We spent extensive time carefully reviewing the ICD-9-CM diagnosis 
codes to develop the MCC and CC list. Our current CC list for Version 
24.0 of the CMS DRGs contains 3,326 codes. The MS-DRGs have 3,342 codes 
on the MCC list and 4,922 codes on CC list. While we did remove codes 
from the CC list and add others to the list, we believe that the end 
result is a better classification of conditions for identifying 
differences in severity of illness. We appreciate the commenter's 
support for our efforts.
    Comment: Several commenters supported the MCC and CC lists as a 
better means of identifying severity. The commenters recommended that 
CMS consider adopting the revised CC list in FY 2008 as an interim step 
toward IPPS reform. The commenters recommended that CMS delay 
implementation of the new severity system until FY 2009 but adopt the 
revised CC list in FY 2008. The commenters stated that by implementing 
the revised CC list in FY 2008, CMS could move forward in its goal of 
utilizing a system that more accurately recognizes the severity of 
illness of patients. The commenters believed this option would allow a 
more accurate DRG system to be in place while CMS is evaluating the 
final RAND report to determine which severity-based DRG system to 
propose for implementation in FY 2009.
    Another commenter who supported the move to MS-DRGS and CMS' 
efforts in creating the MCC and CC lists stated that it had been 
working with CMS for years to develop a mechanism to appropriately 
account for the resources involved in the care of patients with severe 
sepsis. The commenter believed that the MS-DRGs in which severe sepsis 
is recognized as a major complication, along with acute respiratory 
distress syndrome, organ failure, and other conditions where resource 
use is more intense, will go a long way towards better recognition of 
severity of illness.
    One commenter applauded CMS for the work it has put into developing 
a system that will consider complexity of care as well as severity of 
illness in determining Medicare payment for hospital inpatient 
services. The commenter particularly supported the recognition of 
hemophilia and end-stage renal disease as MCCs. The commenter stated 
that these conditions clearly meet the criteria for treatment as MCCs 
because they often require ``expensive and technologically complex'' 
services that lead to substantially increased resource use and reflect 
the highest level of severity. The commenter encouraged CMS to add 
other diagnoses as the evidence warrants.
    Response: Comments and responses on whether to implement MS-DRGs in 
FY 2008 or at a later date are discussed in detail in section II.D. of 
the preamble of this final rule with comment period. We appreciate the 
support for our efforts in creating the MCC and CC lists and agree that 
it is important to examine data using the system and continue to refine 
the MCC and CC lists.
    Comment: One commenter commended CMS on the systematic way it 
reviewed 13,549 secondary diagnosis codes to evaluate their assignment 
as a CC or non-CC using a combination of mathematical data and the 
judgment of its medical advisors. The commenter stated that, as part of 
the effort to better recognize severity of illness, CMS conducted the 
most comprehensive review of the CC list since the creation of the DRG 
classification. However, the commenter disagreed with the 
classification of many common secondary diagnoses as non-CCs. 
Specifically, the commenter questioned threshold levels that were used 
and at what point in the analysis CMS decided that a code was not a CC. 
For example, the commenter asked what was considered ``intensive 
monitoring,'' inquiring whether intensive monitoring refers to 
additional nursing care on a daily basis, additional testing, intensive 
care unit care, extended length of stay, all of these factors, or some 
other factor. In some instances, the commenter noted that similar or 
comparable codes within the same group have remained a CC/MCC, while 
other clinically similar codes or codes requiring similar resources may 
have been omitted. Without greater transparency, and a code-by-code 
explanation, the commenter was unable to determine why significant 
secondary diagnoses requiring additional resources have been removed 
from the CC list. For the most part, the commenter's analysis 
concentrated on reviewing current CCs that have been omitted from the 
revised CC list.
    The commenter made the following overall recommendations with 
regard to the CC list:
    <bullet> CMS should make the final revised CC list publicly 
available as quickly as possible so that hospitals may focus on 
understanding the impact of the revised CC list, training and educating 
their coders, and working with physicians for any documentation 
improvements required to allow the reporting of more specific codes 
where applicable.
    <bullet> CMS should consider additional refinements to the revised 
CC list and, in particular, address issues where the ICD-9-CM codes may 
need to be modified to provide the distinction between different levels 
of severity.
    <bullet> In situations where a new code is required, CMS should 
default to leaving the codes as CCs until new codes can be created.
    Response: The process of evaluating both claims data and clinical 
issues is a challenging one. Our medical advisors performed an 
extensive evaluation of codes for the MCC and CC lists, combining their 
medical judgment and claims data. We have reviewed a number of specific 
codes raised by

[[Page 47163]]

commenters and considered whether or not the codes should be a MCC or 
CC. These numerous code requests are discussed below. Also, as 
mentioned earlier, we plan to post the data we used to evaluate each 
code on the CMS Web site. These data may assist the public in making 
recommendations for additional changes to the MCC and CC lists. Any 
revisions made to the MS-DRGs or the MCC and CC lists are being made 
available with this final rule with comment period. As suggested by the 
commenter, we plan to evaluate further refinements to the MCC and CC 
lists each year as we obtain additional recommendations and data under 
the MS-DRG system.
    Comment: One commenter acknowledged the significant effort and 
consideration CMS has given to developing both the mathematical and 
clinical judgment criteria in determining severity classifications. 
However, the commenter did not believe it was possible to fully assess 
the assignment of diagnosis codes in the severity classification 
because there was an incomplete description of the process in the 
proposed rule.
    Response: As stated earlier, we plan to post on the CMS Web site 
the data used in analyzing how to classify each ICD-9-CM code as an 
MCC, CC, or non-CC. Our process for making CC/MCC decisions was an 
iterative one involving data review and clinical analysis. In the FY 
2008 IPPS proposed rule (72 FR 24702 through 24705), we explained in 
detail our methodology for determining whether a secondary diagnosis 
qualified as an MCC, CC, or non-CC. Although posting these data results 
on the CMS Web site may be helpful in illustrating for commenters the 
data we used in classifying conditions as MCCs, CCs or non-CCs, we note 
that these data were combined with clinical judgment to make the final 
determinations. That is, the data were used as an adjunct to the 
judgment of our medical advisors. Clinical judgment may differ by 
individual physician. Thus, the data alone may be helpful but not 
definitive in helping commenters understand the reasons for some of our 
decisions. Nevertheless, we welcome further public input on potential 
revisions to the MCC and CC lists for FY 2009. We anticipate making 
updates to the MCC and CC lists each year as we receive additional 
recommendations and data. Again, below we respond to comments about 
specific codes.
    Comment: One commenter commended CMS for undertaking a long-overdue 
comprehensive review and revision of the CC list. However, the 
commenter stated that more industry input is needed regarding the 
revised CC and MCC designations in the MS-DRG system. The commenter 
stated that the brevity of the public comment period, in combination 
with insufficient detail associated with the process and rationale for 
categorization of diagnoses as MCCs, CCs, and non-CCs, made it very 
difficult to conduct a thorough analysis of all of the codes on the MCC 
and CC lists. Another commenter stated that its members have only had 
an opportunity to do a cursory comparison of the current CMS CC list to 
the MS-DRG MCC and CC lists. The commenter stated that it should have 
the ability to do a complete analysis prior to implementation. The 
commenter believed such a review would be time intensive and likely to 
take a number of months of information exchange before it could be 
completed. Although the commenter acknowledged that the MCC and CC 
lists were included in the Federal Register notice and posted on the 
CMS Web site, the commenter believed the review was hampered by a lack 
of GROUPER software and a GROUPER Definitions Manual from being able to 
complete their review. The commenter also expressed concern that the 
analysis of secondary diagnoses was based on charges instead of costs. 
The commenter stated that if CMS' intent is to convert to a cost-based 
structure, a determination of the impact of secondary diagnoses should 
not be based on charges. The commenter added that this analysis 
appeared to be inconsistent with the evolution to a cost-based DRG 
weight system.
    Response: We recognize the extensive time that is required by the 
public in order to perform a review of the MCC and CC lists. However, 
we note that a DRG Definitions Manual and GROUPER have never been made 
available until after completion of the final rule in past years and 
public commenters never before suggested that we need to delay 
implementation of proposed changes to the IPPS. While we acknowledge 
that the changes proposed for FY 2008 are significantly more 
comprehensive than the changes we propose in a typical year, the base 
DRG assignments under the MS-DRGs are largely unchanged from the prior 
CMS DRGs. The major changes result from assignment of a case to a DRG 
severity level using the new classification of secondary diagnoses as 
MCCs, CCs or non-CCs. For this reason, we made extensive information 
available to allow public commenters to perform a variety of analyses. 
The proposed rule included comprehensive lists of the codes that we 
classified as MCCs and CCs, and we made this information available 
electronically on the CMS Web site. The FY 2006 MedPAR data that were 
used to simulate proposed rule policies were made available 
simultaneous with public display of the FY 2008 proposed rule. This 
data file included both the CMS DRG assigned to the case using the 
Version 24.0 GROUPER and the proposed MS-DRG assignment. Further, we 
provided--at no extra cost to the purchaser--an FY 2005 version of the 
MedPAR that also included the CMS and MS-DRG assignment at the case 
level. For these reasons, we do not believe the lack of availability of 
a GROUPER or a DRG Definitions Manual should have precluded commenters 
from being able to analyze the revised MCC and CC lists. In fact, we 
note that a number of public commenters did provide suggestions for 
further revisions to these lists, suggesting there was ample time to be 
able to do these analyses.
    We have considered the suggestion that we analyze changes to the 
MCC and CC lists using average costs instead of charges. We adopted a 
cost-based weighting methodology because of our concern that 
differential markups among routine and ancillary services made charges 
a poor proxy for costs when setting relative weights for dissimilar 
types of cases. That is, different types of cases would use very 
different mixes of routine and ancillary services with variable markups 
and could create distortions in relative weights that are based on 
charges. However, we are less concerned about using charges when 
comparing cases that share the same primary diagnosis, which are likely 
to use similar mixes of services when deciding whether to make a DRG 
change. In these cases, we believe charges may provide a reasonable 
proxy for costs because the cases use similar services with similar 
markups.
    The methodology that we use to develop cost-based weights is very 
complex and works well to give us a measure of relative average 
resource use when combining a high number of cases together in a single 
DRG. We would need to analyze whether a methodology that tries to 
determine average costs at the case or code level would provide 
reliable results for making decisions about MCCs and CCs or DRG 
changes. Nevertheless, we appreciate this comment and will continue to 
give it further consideration as we evaluate alternative approaches to 
updating the MCC and CC lists and the MS-DRGs in the future.
    Comment: One commenter stated that CMS should address the 
inconsistencies

[[Page 47164]]

within the CC list identified by its physician and hospital reviewers. 
The commenter also recommended that, where necessary, CMS should obtain 
additional input from physicians in the appropriate specialties to 
determine the standard of care and consequent increased hospital 
resource use of some of the conditions. The commenter provided a list 
of conditions that were removed from the revised CC list and urged CMS 
to maintain them on the CC list.
    Response: We agree that the review of codes for the MCC and CC list 
was a daunting task requiring careful review by our panel of medical 
advisors. We used a number of physicians in this process, including 
internists and surgeons, to evaluate the effect of specific codes on a 
patient's severity levels. When necessary, our panel contacted other 
medical specialists, such as orthopedists and oncologists, to obtain 
additional input. We appreciate the CC issues brought to our attention. 
We reexamined specific codes brought to our attention below. We expect 
that we will continue to revise and update both the CC list and MCC 
list as we gain experience and data under the MS-DRG system. We 
anticipate making additional changes in the future with this added 
information.
    Comment: One commenter stated that, in some cases, the current ICD-
9-CM classification system does not adequately distinguish between 
acute and chronic forms of a condition. In the MS-DRG system, this 
distinction appears to be critical in predicting resources utilized at 
the patient level. The commenter recommended that CMS work with the 
NCHS to make ICD-9-CM code modifications to improve this acute and 
chronic distinction. Additionally, the commenter suggested that CMS and 
HHS should take immediate steps for the adoption of ICD-10-CM, as this 
system is much better than ICD-9-CM at distinguishing clinical 
severity, which is a key aspect of any severity-adjusted DRG system. 
The commenter believed that continued use of ICD-9-CM severely limits 
the ability of a severity-adjusted DRG system to recognize severity of 
illness.
    Response: We encourage anyone with specific recommendations for 
revisions to the ICD-9-CM diagnosis codes to contact Donna Pickett, 
National Center for Health Statistics, Centers for Disease Control and 
Prevention at: (301) 458-4434. Information on requesting changes to the 
ICD-9-CM diagnosis codes can be found on the Web site at: http://www.cdc.gov/nchs/icd9.htm. The Department is continuing to evaluate 
whether to move to ICD-10.
    Comment: One comment disagreed with CMS' elimination of many 
chronic conditions from the CC list. The commenter stated that patient 
care resources are utilized to prevent acute exacerbation of a chronic 
condition. The commenter believed that to not include these conditions 
on a CC list is a major flaw in the logic. The commenter supported 
inclusion of chronic conditions on the CC list as means to recognize 
the resources utilized to manage these conditions effectively, whether 
they are currently in an acute phase. The commenter did not mention 
specific chronic conditions that should be added to the MCC and CC 
lists.
    Response: We address comments on specific conditions below. 
However, as a general matter, we found the Medicare data do not 
generally support that chronic or ``unspecified'' conditions are more 
resource intensive than conditions with an acute manifestation of a 
chronic disease that are described by specific codes. After carefully 
considering this issue, our medical advisors agreed that unspecified or 
chronic conditions generally are not suggestive of a higher level of 
severity of illness in and of themselves when there are more specific 
codes available to further describe the patient's specific condition or 
an acute manifestation of a chronic disease. We note that unspecified 
and chronic conditions are very commonly found in the Medicare patient 
population. The purpose of the MS-DRGs is to identify those conditions 
that lead to higher severity of illness and resource use relative to 
the average Medicare patient. These conditions suggest average or less 
than average resource use across the entire Medicare population. If we 
were to classify chronic and unspecified conditions as MCCs and CCs, 
the MS-DRGs ability to better recognize severity of illness would be 
significantly diminished.

Condition-Specific Comments

    We received a number of recommendations of codes to be added to the 
CC list and the MCC list. We have divided these recommendations into 
three general categories and will address them accordingly. The three 
categories are:
    <bullet> Nonspecific codes
    <bullet> Symptoms, chronic conditions, and low severity conditions
    <bullet> High severity codes that were erroneously left off of the 
CC or MCC list.
    The first category of recommendations includes a number of codes 
that are nonspecific. For instance, one frequent recommendation for 
addition to the CC list is the nonspecific code 428.0 (Congestive heart 
failure, unspecified). This code is one of several codes that identify 
patients who have heart failure. Depending on the degree of certainty 
by the physician of the exact nature of the heart failure, a code can 
be assigned to indicate a very specific and acute form of heart 
failure, or a more general, nonspecific code can be assigned to 
represent a patient with heart failure, but the exact nature of the 
heart failure is unknown. Other nonspecific conditions include 
disorders of a heart valve. If the exact nature of the disorder of a 
heart valve is known, a specific code can be assigned. If the exact 
nature or degree of the disorder of the valve is not known, a more 
general, nonspecific code can be assigned. As discussed earlier in this 
final rule with comment period, our claims data and the clinical 
analysis of our medical advisors indicate that patients described by 
the more general, nonspecific codes are not at a higher severity level. 
If a patient's condition worsens and develops additional diagnoses or 
complications, these more specific conditions may be on the CC list or 
MCC list. The most frequently mentioned, nonspecific code by commenters 
was code 428.0. Therefore, we will provide a detailed summary of these 
comments and our response. There were a number of other nonspecific 
conditions suggested for additions to the CC list. We will address 
these conditions after summarizing the comments on congestive heart 
failure.
    The second category includes a variety of codes representing 
symptoms, chronic conditions, and other conditions that do not describe 
a high level of severity. These conditions do not themselves indicate a 
high severity level using our mathematical analysis of the claims data 
combined with the clinical analysis by our medical advisors. As stated 
earlier, we did not include most chronic conditions on the CC list or 
the MCC list unless the code also indicates an acute exacerbation that 
would raise the severity level. If a patient has a chronic condition 
that deteriorates or develops into an acute complication, the more 
acute condition or complication may be on the CC list or the MCC list.
    The third category of codes includes codes that commenters 
suggested should have been included on the CC list or the MCC list 
because they clearly describe a high level of severity. Upon further 
review, we agree that this third group of codes meet the criteria for 
being included on the CC list or MCC list. The claims data and our 
medical advisors' clinical analysis clearly support the addition of 
these codes to the CC list or the MCC list.

[[Page 47165]]

(a) Codes Representing Nonspecific Conditions
    <bullet> Congestive Heart Failure--Code 428.0
    Comment: One commenter endorsed the implementation of the revised 
CC list. The commenter stated that CMS used new criteria for refining 
the CC and MCC lists, which led to the removal of codes currently on 
the CC list. The commenter compared the old and revised CC lists and 
found that the revision added 2,002 codes and dropped 425 codes, for a 
net increase of 1,577 codes. The commenter stated that, even though the 
number of added codes far exceeds the number of dropped codes, in the 
last three MedPAR files, the dropped codes were used an average of 
40,864 times, while the added codes were used an average of only 887 
times. The commenter stated that many of the dropped codes pertain to 
unspecified conditions for which more specific codes are available and 
included on the revised CC list. The highest volume code, code 428.0, 
was applied to an average of 2.3 million Medicare fee-for-service cases 
a year during the past 3 years. This code is the most widely used 
secondary diagnosis code, despite the fact that 12 more specific codes 
were added in FY 2003. The additional codes are shown in the Table L 
below.

 Table L.--Incidence of Secondary Diagnosis Coding for Heart Failure FY
                              2004-FY 2006
------------------------------------------------------------------------
                                                                 New in
           ICD-9-CM code                   Description          FY 2003
------------------------------------------------------------------------
428.0.............................  Congestive heart failure,
                                     unspecified.
428.1.............................  Left heart failure.......
428.20............................  Systolic heart failure;            x
                                     unspecified.
428.21............................  Systolic heart failure;            x
                                     acute.
428.22............................  Systolic heart failure;            x
                                     chronic.
428.23............................  Systolic heart failure;            x
                                     acute on chronic.
428.30............................  Diastolic heart failure;           x
                                     unspecified.
428.31............................  Diastolic heart failure;           x
                                     acute.
428.32............................  Diastolic heart failure;           x
                                     chronic.
428.33............................  Diastolic heart failure;           x
                                     acute on chronic.
428.40............................  Combined systolic and              x
                                     diastolic heart failure;
                                     unspecified.
428.41............................  Combined systolic and              x
                                     diastolic heart failure;
                                     acute.
428.42............................  Combined systolic and              x
                                     diastolic heart failure;
                                     chronic.
428.43............................  Combined systolic and              x
                                     diastolic heart failure;
                                     acute on chronic.
428.9.............................  Heart failure,
                                     unspecified.
------------------------------------------------------------------------

    The commenter stated that, by making code 428.0 a non-CC, hospitals 
will react by coding more precisely using the more definitive heart 
failure codes, raising the CMI, which results in documentation and 
coding-related overpayments. The commenter argued that, if the revised 
CC list were implemented before hospitals had a chance to improve their 
coding to accommodate the revisions, ``case-mix creep and IPPS 
overpayments would ensure.''
    Response: This commenter suggests reasons why Medicare should adopt 
the MS-DRGs over a transition period and does not appear to be opposed 
to our decision not to classify congestive heart failure as either an 
MCC or a CC. The commenter also suggests how hospitals will respond to 
the coding incentives that will be presented by revisions to the MCC 
and CC lists as well as the MS-DRGs. The issue of adopting the MS-DRGs 
over a transition is addressed in detail in section II.E. of the 
preamble of this final rule with comment period. We further address the 
implications of the coding incentives raised in this public comment in 
section II.D.6. of the preamble of this final rule with comment period 
that discusses an adjustment to IPPS rates for improvements in 
documentation and coding.
    Comment: A number of other commenters urged CMS to classify the 
condition under code 428.0 as a CC. The commenters indicated that code 
428.0 identifies an acute condition, not a benign or a chronic 
condition. Some commenters stated that any inpatient with congestive 
heart failure requires increased nursing care to closely monitor and 
assess physical symptoms and vital signs for indications of increased 
congestion. Patients often need to undergo repeated laboratory studies.
    Another commenter stated that the proposed rule incorrectly 
characterized the diastolic and systolic heart failure codes as 
congestive heart failure. The commenter pointed out that according to 
the Fourth Quarter 2002 issue of Coding Clinic for ICD-9-CM, congestive 
heart failure is not an inherent component of the codes in category 428 
for systolic and diastolic heart failure. Therefore, according to 
Coding Clinic, the commenter stated that code 428.0 should be assigned 
as an additional code when the patient has systolic or diastolic 
congestive heart failure. The commenter added that code 428.0 may 
appropriately be assigned by itself when congestive heart failure is 
documented, but there is no documentation of systolic or diastolic 
heart failure. The commenter stated that, in ICD-9-CM, there is no 
distinction between an acute exacerbation of congestive heart failure 
and chronic congestive heart failure. Code 428.0 is assigned for both. 
The commenter added that codes 402.11 (Benign hypertensive heart 
disease with congestive heart failure) and 402.91 (Unspecified 
hypertensive heart disease with congestive heart failure) are on the CC 
list. The commenter suggested that code 428.0 be included on the 
revised CC list as well.
    Another commenter who objected to the removal of code 428.0 from 
the CC list stated that, currently, ICD-9-CM codes do not distinguish 
between acute, chronic, or acute exacerbation of chronic congestive 
heart failure. All forms of this condition are assigned to code 428.0. 
The commenter indicated that medical record documentation may not 
typically include information on whether the congestive heart failure 
is systolic or diastolic (acute versions of heart failure with this 
specificity are considered MCCs). The commenter requested that code 
428.0 be added as an MCC until a new code can be created to identify 
acute exacerbation of congestive heart failure. The commenter stated 
that the fact that there is ``congestion'' is medically more 
problematic and more resource intensive and may necessitate care in the 
intensive care unit and a prolonged

[[Page 47166]]

hospital stay. The commenter stated that coding guidelines necessitate 
that acute pulmonary edema of cardiac origin be assigned code 428.0.
    Response: Given the number of public comments on this one 
condition, our medical advisors reviewed the data and clinical issues 
surrounding code 428.0 again. They strongly recommend that we not 
change this code to a CC. There are three reasons for this 
recommendation. First, as stated earlier, we developed a policy of 
classifying nonspecific codes as non-CCs when a more specific code was 
available that identified the more specific nature of the patient's 
illness. Second, data for this and other nonspecific codes do not 
support assigning it to a higher severity level. Third, in the clinical 
judgment of our medical advisors, the use of a nonspecific code means 
that the physician had not identified a medical condition that 
indicates the patient is at a higher severity level or requires greater 
resources. This code is vague and does not provide any description of 
the exact nature of the heart failure. Data for this very commonly 
reported code clearly indicate that these patients are at a low 
severity level. However, claims data and our general policy of 
assigning nonspecific codes to a lower severity level were not the only 
factors that we used to classify a code as an MCC, CC, or non-CC. As 
stated above, the data were only used as an adjunct to the judgment of 
our medical advisors. In the judgment of our medical advisors, the 
condition described by code 428.0 does not suggest an increase in 
patient severity of illness. In this case, 12 more specific codes are 
available to indicate the more severe forms of heart failure. If the 
physician includes more precise information in the medical record that 
would allow the coder to identify a more specific code to describe the 
type of heart failure, the documentation will reflect that the hospital 
treated a more severely ill patient and the case will be assigned to a 
higher severity level.
    While we decided to classify code 428.0 as a non-CC based on our 
policy concerning nonspecific codes, the data, and the judgment of our 
medical advisors, we note that heart failure is an important national 
health issue. We believe it is very important for hospitals and 
physicians to use the most specific codes that describe the incidence 
of heart failure in their patients. In order to accurately and 
completely evaluate health care outcomes for the treatment of heart 
failure, detailed and accurate information is needed on patients with 
this condition. Physicians and hospitals will undermine efforts to 
obtain more information on patients with this disease when they use a 
nonspecific code when there is a more detailed code to describe their 
patient. We highly encourage physicians and hospitals to work together 
to use the most specific codes that describe their patients'' 
conditions. Such an effort will not only result in more accurate 
payment by Medicare but will provide better information on the 
incidence of this disease in the Medicare patient population.
    Comment: As stated earlier, a number of commenters requested CMS to 
add additional nonspecific codes to the CC list. These codes represent 
a variety of nonspecific conditions affecting multiple body systems. 
The commenters stated that the following nonspecific codes may increase 
the severity level for a patient, and should, therefore, be added to 
the CC list.
    <bullet> 070.70, Unspecified viral hepatitis C
    <bullet> 287.30, Primary thrombocytopenia, unspecified
    <bullet> 287.5, Thrombocytopenia, unspecified
    <bullet> 303.00, Acute alcohol intoxication, unspecified
    <bullet> 345.90, Epilepsy, unspecified, without intractable 
epilepsy
    <bullet> 403.90, Hypertensive chronic kidney disease, unspecified, 
with chronic kidney disease stage I through stage IV, or unspecified
    <bullet> 424.0, Mitral valve disorders
    <bullet> 424.1, Aortic valve disorders
    <bullet> 426.13, Other second degree atrioventricular block
    <bullet> 426.6, Other heart block
    <bullet> 426.9, Conduction disorder, unspecified
    <bullet> 447.6, Arteritis, unspecified
    <bullet> 458.9, Hypotension, unspecified
    <bullet> 451.2, Thrombophlebitis of lower extremities, unspecified
    <bullet> 459.0, Hemorrhage, unspecified
    <bullet> 585.5, Chronic kidney disease, unspecified
    <bullet> 707.0, Decubitus ulcer, unspecified
    <bullet> 780.39, Other convulsions
    Response: As previously stated, we did not classify nonspecific 
codes to the MCC list or the CC list when more specific codes were 
available to identify the condition of the patient. In general, we 
found that the data did not support classifying unspecified codes as 
either MCCs or CCs. Further, after detailed discussions of potential 
clinical scenarios among our medical advisors, there was a consensus 
that a specified condition for the patient generally signals higher 
degree of severity of illness. If the physician was to diagnose 
additional information about the patient's condition or should the 
patient's condition worsen, a more precise code would be assigned that 
may be a CC or an MCC. As a result of these comments, our medical 
advisors again reviewed these codes and determined that their original 
decisions were correct. That is, they do not believe that these 
nonspecific codes should be classified as MCCs or CCs when more 
specific codes are available that provide more information about 
patient severity of illness. For these reasons, we are not adding the 
codes listed above to the CC list.
(b) Symptoms, Chronic Conditions, and Low Severity Conditions
    Comment: Commenters requested that we add a number of codes to the 
CC list that describe symptoms, chronic conditions, and low severity 
conditions. These conditions include the following codes:
    <bullet> 070.54, Chronic viral hepatitis C
    <bullet> 250.4x, Diabetes mellitus with renal manifestations
    <bullet> 250.5x, Diabetes mellitus with ophthalmic manifestations
    <bullet> 250.6x, Diabetes mellitus with neurological manifestations
    <bullet> 250.7x, Diabetes mellitus with peripheral circulatory 
disorders
    <bullet> 250.8x, Diabetes mellitus with other specified 
manifestations
    <bullet> 263.0, Moderate Malnutrition
    <bullet> 263.1, Mild malnutrition
    <bullet> 276.51, Dehydration
    <bullet> 276.52, Hypovolemia
    <bullet> 276.6, Fluid overload
    <bullet> 276.7, Hyperpotassemia
    <bullet> 276.9, Electrolyte and fluid disorders
    <bullet> 280.0, Iron deficiency anemias, secondary to blood loss 
(chronic)
    <bullet> 284.8, Aplastic anemias, not elsewhere classified
    <bullet> 287.39 Other primary thrombocytopenia
    <bullet> 287.4 Secondary thrombocytopenia
    <bullet> 303.01 Acute alcohol intoxication, continuous
    <bullet> 303.02 Acute alcohol intoxication, episodic
    <bullet> 306.00, Blindness
    <bullet> 389.9, Deafness
    <bullet> 413.9, Angina pectoris
    <bullet> 427.31, Atrial fibrillation
    <bullet> 428.1, Left heart failure (change from CC to MCC)
    <bullet> 451.0, Thrombophlebitis of superficial vessels of lower 
extremities;
    <bullet> 492.8, Other emphysema
    <bullet> 496, Chronic airway obstruction, not elsewhere classified
    <bullet> 585.3, Chronic kidney disease, stage III (moderate)
    <bullet> 599.7, Hematuria
    <bullet> 710.0, Systemic lupus erythematosus
    <bullet> 731.3, Major osseous defects

[[Page 47167]]

    <bullet> 786.03, Apnea
    <bullet> 788.20, Urinary retention
    <bullet> 799.02, Hypoxemia
    <bullet> V45.1, Renal dialysis status
    Response: As discussed earlier, we did not assign chronic 
conditions to the CC list or the MCC list. These conditions do not 
themselves indicate a high severity level using our mathematical 
analysis of the claims data combined with the clinical judgment by our 
medical advisors. As stated earlier, we did not include most chronic 
conditions on the CC list or the MCC list unless the code also 
indicates an acute exacerbation that would raise the severity level. If 
the chronic condition worsens and the patient develops an acute 
complication, the more specific code for the acute exacerbation would 
identify the increased level of severity of illness and, if warranted, 
would be on the CC or the MCC list. We also did not include general 
symptoms on the CC list because, alone, they do not suggest a high 
level of severity of illness. Codes identifying symptoms such as 
hematuria, apnea, or hypoxemia that are found in many patients may 
indicate a wide range of patient severity and describe a transient 
finding. Should the physician diagnose a more specific condition that 
led to the symptoms, more information about the patient and their 
severity of illness would be known. The specific diagnosis may indicate 
higher severity of illness and the code that describes it may be 
included on the CC list or the MCC list. We also did not include 
conditions on the CC list or the MCC list that do not generally raise 
the severity level of a patient. If the code describes patients who 
range from mild to severe, we believe it is best to use additional 
secondary diagnosis codes that would be reported to better describe the 
true nature of the patient's condition. These more precise codes may be 
on the CC list or the MCC list.
    Our clinical advisors reviewed claims data and the clinical issues 
surrounding patients who had the symptoms, chronic diagnoses, and less 
severe conditions listed above. They recommend that we not add the 
codes listed above to the CC list because these conditions do not 
significantly increase a patient's severity of illness. Therefore, we 
are not adding the codes listed above to the CC list.
(c) High Severity Codes That Were Erroneously Left Off of the CC List 
or the MCC List
    As stated earlier, a number of commenters recommended the addition 
of codes to the CC list or the MCC list for conditions that the 
commenters stated clearly represented a high severity level. The 
commenters provided information on the degree to which these conditions 
are life threatening and require extensive amounts of resources. The 
commenters questioned why these conditions were left off of the CC and 
MCC lists. Commenters recommended the removal of two codes from the CC 
list because the commenters believed they do not increase the patient's 
severity level or lead to more resource use. We discuss these 
conditions below.
    Comment: Commenters requested that we add the following five codes 
to the CC list. The commenters stated that these conditions clearly 
increase the severity level and lead to more resource use.
    <bullet> 285.1, Acute posthemorrhagic anemia
    <bullet> 403.91, Hypertensive chronic kidney disease, unspecified, 
with chronic kidney disease stage V or end stage renal disease
    <bullet> 426.53, Other bilateral bundle branch block
    <bullet> 426.54, Trifascicular block
    <bullet> 451.11, Phlebitis and thrombophlebitis, femoral vein 
(deep) (superficial)
    Response: We agree with the commenters that the five codes listed 
above should have been included on the CC list. Upon further review of 
our data and discussions among our medical advisors, there was 
consensus that these codes describe patients with a higher severity 
level. Therefore, we are adding them to the CC list.
    Comment: Commenters requested that we remove the following two 
codes from the CC list and make them non-CCs. The commenters indicated 
that there are more specific heart failure codes that would be assigned 
along with these codes that would indicate whether or not the patient 
had a severe form of heart failure. The commenters stated that these 
two codes do not indicate the exact nature of the heart failure and 
therefore should not be on the CC list.
    <bullet> 402.11, Hypertensive heart disease, benign, with heart 
failure
    <bullet> 402.91, Hypertensive heart disease, unspecified, with 
heart failure
    Response: We agree with the commenters. Upon further review, we do 
not believe the codes meet the criteria to be considered CCs. The codes 
do not describe the exact nature of the heart failure. The more 
specific heart failure codes that would be reported along with these 
codes would be used to justify the assignment to a high severity level. 
Therefore, we are removing the two codes from the CC list.
    Comment: Commenters requested that we add the following four codes 
to the MCC list. The commenters indicated that these four codes 
describe patients at the highest level of severity. Patients with these 
conditions would use an extensive amount of resources. Furthermore, the 
commenters added, codes that describe similar conditions are currently 
on the MCC list. The commenters believed these codes were erroneously 
excluded from the MCC list.
    <bullet> 282.69, Other sickle-cell disease with crisis
    <bullet> 345.2, Petit mal status
    <bullet> 345.71, Epilepsia partialis continua, with intractable 
epilepsy
    <bullet> 780.01, Coma
    Response: We agree that we made an error in excluding these four 
codes from the MCC list. Therefore, we are adding the four codes to the 
MCC list. We provide a summary of all the additions and deletions to 
the CC list and the MCC list at the end of this section.
Additional Comments on CC List
    We received several additional comments concerning the CC and MCC 
lists which we summarize below. Some of the comments involved the 
commenter's confusion about our proposed CC and MCC lists. Others 
involved a disagreement with our proposal of not making significant 
changes to the DRGs to better distinguish severity of illness in 
pregnancies and newborns, even though they are not a significant part 
of the Medicare population. We also received recommendations for 
alternative ways to classify conditions as CCs that do not meet our 
current criteria. In addition, we received comments on our proposal of 
not classifying specific conditions as a CC/MCC when the patient dies. 
We discuss these issues below.
    <bullet> Other Myelopathy--Code 336.8
    Comment: One commenter requested that we add code 336.8 (Other 
myelopathy) to the CC list.
    Response: Code 336.8 is already on the CC list. Therefore, we are 
not making any further change for code 336.8.
    <bullet> Ascites--Code 789.5
    Comment: One commenter requested that we add the code 789.5 
(Ascites) to the CC list
    Response: We note that code 789.5 is being deleted as of October 1, 
2007, when two new codes are being created, code 789.51 (Malignant 
ascites) and code 789.59 (Other ascites). Both of these new codes are 
on the CC list. Therefore no additional change is required for ascites.
    <bullet> Aplastic Anemias, Not Elsewhere Classified--Code 284.8

[[Page 47168]]

    Comment: One commenter objected to the removal of code 284.8 
(Aplastic anemias, not elsewhere classified (NEC)) from the CC list.
    Response: Code 284.8 was placed on the MCC list. Thus, while it is 
not classified as a CC as the comment suggested, it is an MCC. We are 
maintaining code 284.8 on the MCC list, as we agree that this is a 
condition that places a patient at a high severity level.
    <bullet> Complications of Pregnancy, Childbirth and Puerperium--
Codes 630 through 677
    Comment: One commenter objected to the removal of codes from 
category 630 through 677 (Complications of pregnancy, childbirth and 
puerperium) of the CC list. The commenter was concerned about the 
number and wide breadth of codes from Chapter 11 of the ICD-9-CM, 
Complications of pregnancy, childbirth and puerperium (categories 630-
677), that are being removed from the CC list . The commenter 
acknowledged CMS'' position that, due to the low volume in the Medicare 
population, diagnoses related to newborns, maternity and congenital 
anomalies codes in this section were not reviewed. Of special concern 
to the commenter were conditions such as infections, acute renal 
failure, air and pulmonary embolism, cardiac arrest, shock, among 
others, that are MCCs or CCs and would be coded as such if not for the 
fact that the ICD-9-CM classification considers problems associated 
with pregnancy, childbirth and the puerperium to be so clinically 
significant that they require special combination codes. The 
combination codes are intended to identify that the presence of the 
pregnancy complicates the condition. For example, code 415.19 (Other 
pulmonary embolism and infarction) is an MCC, while code 673.20 
(Obstetrical blood-clot embolism, unspecified) is not even a CC.
    The commenter recommended that codes in Chapter 11 be carefully 
evaluated and validated with clinical experts, similar to the process 
to which the codes in other chapters were submitted. The commenter 
believed that combination codes should be treated consistently. If the 
condition is considered a CC or MCC in a nonpregnant patient, the 
corresponding pregnancy-related combination code also should be a CC or 
MCC.
    Response: As we stated in our proposed rule and elsewhere in this 
final rule with comment period, we focused our attention in developing 
the MS-DRGs for the Medicare population. We did not conduct a detailed 
review of Chapter 11 codes. We encourage other payers who want to use 
MS-DRG to update the system for their own population. Diagnoses related 
to newborns, maternity, and congenital anomalies are very low volume in 
the Medicare population and were not reviewed for purposes of creating 
the MCC and CC lists. We used the APR DRGs to categorize these 
diagnoses. This DRG system is used for the all payer ratesetting system 
in Maryland and will be based on data that better reflects the newborn 
and maternity population than Medicare. For newborn, obstetric, and 
congenital anomaly diagnosis, we classified severity level 3 (major) 
and 4 (extreme) diagnoses as an MCC. We designated default severity 
level 2 (moderate) diagnoses as a CC and all other diagnoses as a non-
CC. We encourage the commenter to review the MCC and CC lists in on the 
CMS Web site. Many codes in the 630 to 677 range appear on the MCC 
list.
    <bullet> Extreme Immaturity--Code 765.0
    Comment: One commenter objected to codes in category 765.0 (Extreme 
immaturity) not being classified as CCs. The commenter stated that 
codes in category 765.0 represent infants with a birth weight of less 
than 1000 gm. The commenter indicated that common problems with very 
low birthweight babies are low oxygen levels at birth; inability to 
maintain body temperature; difficulty feeding and gaining weight; 
infection; breathing problems, such as respiratory distress syndrome; 
neurological problems, such as intraventricular hemorrhage; 
gastrointestinal problems, such as necrotizing enterocolitis; and 
sudden infant death syndrome (SIDS). The commenter stated that while 
some of these problems have unique ICD-9-CM codes that could be 
reported, not all of them do (for example, inability to maintain body 
temperature).
    Response: While we appreciate the commenter's concern about the CC 
classifications for newborns, we state again that we did not examine 
these newborn codes as part of our development of the MS-DRGs. We 
focused our efforts on the Medicare population and used the APR DRG 
classification for newborn diagnoses for Medicare. If the APR DRG 
classification of this condition were to change, we would also adopt 
the same designation for Medicare.
    <bullet> Exclusion of MCCs and CC When a Patient Dies
    Comment: Several commenters addressed codes that represent 
diagnoses associated with patient mortality. The commenter indicated 
that, in the proposed rule, CMS noted that diagnoses that were closely 
associated with patient mortality were assigned different CC 
subclasses, depending on whether the patient lived or died.
    These diagnoses are:
    <bullet> 427.41, Ventricular fibrillation;
    <bullet> 427.5, Cardiac arrest;
    <bullet> 785.51, Cardiogenic shock;
    <bullet> 785.59, Other shock without mention of trauma; and
    <bullet> 799.1, Respiratory arrest.
    The commenters agreed that these diagnoses should be considered 
MCCs for patients who are discharged alive. However, the commenters 
disagree with CMS'' proposal to make these diagnoses non-CCs when a 
patient dies. The commenters urged CMS to consider the patient's length 
of stay or other factors when these codes are reported and count them 
as an MCC when a patient dies during the admission. The commenters 
agreed that a patient who expires soon after admission may not have 
significant resources associated with these conditions. However, the 
commenters believed that this is not true when a patient has been 
hospitalized longer, such as for a week.
    Response: Our medical advisors examined this issue again and 
continue to believe it is not appropriate to classify a case as an MCC 
based on one of the codes above if the patient dies. While we 
understand the concern of the commenters, we do not believe that a long 
length of stay patient will necessarily lead to the conclusion that it 
is appropriate to code these conditions in a patient that dies in the 
hospital. It is a possible that a terminally ill patient with a long 
length of stay required no special resuscitation efforts that would 
suggest higher resource use associated with coding of these conditions. 
We are concerned that changing our policy to allow use of these codes 
for a patient that died in the hospital could lead to accurate and 
widespread coding of the conditions when they are not indicative of a 
higher patient resource costs. Therefore, we are continuing our policy 
of classifying the diagnoses listed above as MCCs only if the patient 
is discharged alive. We will evaluate alternative approaches such as 
looking at the length of stay and other factors for these patients and 
make future DRG revisions, as needed.
    <bullet> Selected Conditions in Joint Replacement Patients
    Comment: One commenter asked that we classify certain codes as MCCs 
or CCs for patients having a joint replacement. The commenter 
specifically requested that the following codes be made either MCCs or 
CCs when occurring in a joint replacement patient:

[[Page 47169]]

    <bullet> 731.3, Major osseous defect
    <bullet> 278.0, Obesity
    <bullet> 278.01, Morbid obesity
    <bullet> V85.35, Body mass index 35.0-35.9, adult
    <bullet> V85.37, Body mass index 37.0-37.9, adult
    Response: We do not believe that we should make further changes to 
the MS-DRG assignments based on combinations of selected diagnoses. 
These types of analyses could be done with virtually any MS-DRG and 
would add significant complexity to the DRG system that we do not 
believe is warranted at this time. Our medical advisors reviewed both 
the data and clinical issues surrounding these codes and determined 
that they would not significantly increase the severity level for 
Medicare patients on average across all patients. Therefore, they are 
not CCs. We are not changing these codes to CCs. They will remain non-
CC for all cases.
    The following table summarizes changes to the proposed MCC (Table 
6J) and CC (Table 6K) lists published in the proposed rule. These 
changes are a result of review of comments and were discussed in detail 
above. A complete, updated CC and MCC list will be posted on the CMS 
Web site at: http://www.cms.hhs.gov/AcuteInpatientPPS/ under Downloads. 
We will continue to evaluate our criteria for the development of the CC 
and MCC list to determine if refinements to these criteria are needed. 
As we gain data and experience under MS-DRGs, we believe that there may 
be refinements to these criteria.

           Changes to MCC and CC List as a Result of Comments
------------------------------------------------------------------------
 
------------------------------------------------------------------------
Add to CC list:
    285.1..............................  Acute posthemorrhagic anemia.
    403.91.............................  Hypertensive chronic kidney
                                          disease, unspecified, with
                                          chronic kidney disease stage V
                                          or end stage renal disease.
    426.53.............................  Other bilateral bundle branch
                                          block.
    426.54.............................  Trifascicular block.
    451.11.............................  Phlebitis and thrombophlebitis,
                                          femoral vein (deep)
                                          (superficial).
Remove from CC list:
    345.2..............................  Petit mal status.
    345.71.............................  Epilepsia partialis continua,
                                          with intractable epilepsy.
    402.11.............................  Hypertensive heart disease,
                                          benign, with heart failure.
    402.91.............................  Hypertensive heart disease,
                                          unspecified, with heart
                                          failure.
    780.01.............................  Coma.
Add to MCC list:
    282.69.............................  Other sickle-cell disease with
                                          crisis.
    345.2..............................  Petit mal status.
    345.71.............................  Epilepsia partialis continua,
                                          with intractable epilepsy.
    780.01.............................  Coma.
Remove from MCC list:
    None...............................
------------------------------------------------------------------------

3. Dividing MS-DRGs on the Basis of the CCs and MCCs
    In developing the MS-DRGs, two of our major goals were to create 
DRGs that would more accurately reflect the severity of the cases 
assigned to them and to create groups that would have sufficient volume 
so that meaningful and stable payment weights could be developed. As 
noted above, we excluded the CMS DRGs in MDCs 14 and 15 from 
consideration because these DRGs are low volume. As stated previously, 
we do not have the expertise or data to maintain the CMS DRGs for 
newborns, pediatric, and maternity patients. We continue to maintain 
MDCs 14 and 15 without modification in order to have MS-DRGs available 
for these patients in the rare instance where there is a Medicare 
beneficiary admitted for maternity or newborn care.
    In designating an MS-DRG as one that will be subdivided into 
subgroups based on the presence of a CC or MCC, we developed a set of 
criteria to facilitate our decision-making process. In order to warrant 
creation of a CC or major CC subgroup within a base MS-DRG, the 
subgroup had to meet all of the following five criteria:
    <bullet> A reduction in variance of charges of at least 3 percent.
    <bullet> At least 5 percent of the patients in the MS-DRG fall 
within the CC or MCC subgroup.
    <bullet> At least 500 cases are in the CC or MCC subgroup.
    <bullet> There is at least a 20-percent difference in average 
charges between subgroups.
    <bullet> There is a $4,000 difference in average charges between 
subgroups.
    Our objective in developing these criteria was to create 
homogeneous subgroups that are significantly different from one another 
in terms of resource use, that have enough volume to be meaningful, and 
that improve our ability to explain variance in resource use. These 
criteria are essentially the same criteria we used in our 1994 severity 
analysis. In developing the MS-DRGs, we continued to apply our 
longstanding policy that each DRG should contain patients who are 
similar from a clinical perspective.
    To begin our analysis, we subdivided each of the base MS-DRGs into 
three subgroups: non-CC, CC, and MCC. Each subgroup was then analyzed 
in relation to the other two subgroups using the volume, charge, and 
reduction in variance criteria. The criteria were applied in the 
following hierarchical manner:
    <bullet> If a three-way subdivision met the criteria, we subdivided 
the base MS-DRG into three CC subgroups.
    <bullet> If only one type of two-way subdivisions met the criteria, 
we subdivided the base MS-DRG into two CC subgroups based on the type 
of two-way subdivision that met the criteria.
    <bullet> If both types of two-way subdivisions met the criteria, we 
subdivided the base MS- DRG into two CC subgroups based on the type of 
two-way subdivision with the highest R\2\ (most explanatory power to 
explain the difference in average charges).
    <bullet> Otherwise, we did not subdivide the base MS-DRG into CC 
subgroups.
    For any given base MS-DRG, our evaluation in some cases showed that 
a subdivision between a non-CC and a combined CC/MCC subgroup was all 
that was warranted (that is, there was not a great enough difference 
between the CC and MCC subgroups to justify separate CC and MCC 
subgroups). Conversely, in some cases, even though an MCC subgroup was 
warranted, there was not a sufficient difference between the non-CC and 
CC subgroups to justify separate non-CC and CC subgroups.
    Based on this methodology, a base MS-DRG may be subdivided 
according to the following three alternatives, rather than the current 
``with CC'' and ``without CC'' division.
    <bullet> DRGs with three subgroups (MCC, CC, and non-CC).
    <bullet> DRGs with two subgroups consisting of an MCC subgroup but 
with the CC and non-CC subgroups combined. We refer to these groups as 
``with MCC'' and ``without MCC.''
    <bullet> DRGs with two subgroups consisting of a non-CC subgroup 
but with the CC and MCC subgroups combined. We refer to these two 
groups as ``with CC/MCC'' and ``without CC/MCC.''
    As a result of the application of these criteria, 745 MS-DRGs were 
created as shown in the following table.

[[Page 47170]]



                    Table M.--Number of CC Subgroups
------------------------------------------------------------------------
                                                 Number of
                   Subgroups                      base MS-    Number of
                                                    DRGs       MS-DRGs
------------------------------------------------------------------------
No subgroups..................................           53           53
Three subgroups...............................          152          456
Two subgroups: CC and major CC; non-CC........           43           86
Two subgroups: non-CC and CC; major CC........           63          126
                                               -------------------------
    Subtotal..................................          311          721
------------------------------------------------------------------------
MDC 14........................................           22           22
Error DRGs....................................            2            2
                                               -------------------------
        Total.................................          335          745
------------------------------------------------------------------------

    The 745 MS-DRGs represent an increase over the 652 DRGs we proposed 
in our 1994 CC revision analysis. The increase in the number of DRGs is 
primarily the result of an increase in the number of proposed base MS-
DRGs that are subdivided into three CC subgroups. The distribution of 
patients across the different types of CC subdivisions is contained in 
Table N below. The table shows that 51.7 percent of the patients are 
assigned to base MS-DRGs with three CC subgroups, and only 11.8 percent 
of the patients are assigned to base MS-DRGs with no CC subgroups.

      Table N.--Distribution of Patients by Type of CC Subdivision
------------------------------------------------------------------------
                CC subdivision                     Count       Percent
------------------------------------------------------------------------
None..........................................    1,382,810         11.8
(MCC and CC), Non-CC..........................      629,639          5.4
MCC, (CC and Non-CC)..........................    3,650,321         31.2
MCC, CC, and Non-CC...........................    6,054,081         51.7
------------------------------------------------------------------------

    Using Medicare charge data (without applying any criteria to remove 
statistical outlier cases), the reduction in variance (R\2\) was 
computed for current CMS DRGs, the MS-DRGs with all 311 base MS-DRGs 
subdivided into 3 CC subgroups, and the MS-DRGs collapsed into 745 
DRGs. Table O below shows that the R\2\ for the MS-DRGs with all 311 
base MS-DRGs subdivided into 3 CC subgroups (957 DRGs composed of 311 
base MS-DRGs subdivided into 3 CC subgroups plus an additional 22 MDC 
14 and MDC 15 DRGs as well as 2 error DRGs) is 10.62 percent higher 
than the current CMS DRGs. Collapsing the 957 MS-DRGs down to 745 MS-
DRGs lowers this increase in R\2\ slightly to 9.41 percent. Although 
adopting a 3-way split for each base MS-DRG would produce a DRG system 
with higher explanatory power, the 957 MS-DRGs would not meet the 
criteria we specified above for subdividing each base DRG. The criteria 
we specified above would create a monotonic DRG system. We believe that 
the value of having a monotonic DRG system outweighs the slight 
decrease in explanatory power. For this reason, we proposed to adopt 
the 745 MS-DRGs.

             Table O.--Explanatory Power (R\2\) for MS-DRGs
------------------------------------------------------------------------
                                                                Percent
                                                       R\2\      change
------------------------------------------------------------------------
Current CMS DRG...................................      36.19  .........
2007 CMS Severity DRGs with 3 CC Subgroups........      40.03      10.62
2007 CMS Severity DRGs Collapsed to 714 DRGs......      39.59       9.41
------------------------------------------------------------------------

    Comment: One commenter supported our five criteria for establishing 
severity subgroups. The commenter believed the use of specific 
quantitative criteria to determine how specific base DRGs are divided 
into terminal categories that reflect severity levels is logical and 
designed to ensure that only substantively important differences in 
resource requirements are recognized by the MS-DRG system. The 
commenter did note that CMS had not explicitly included statistical 
significance in these criteria and urged CMS to consider CC or MCC 
splits only when they meet minimal standards of both size and 
statistical significance.
    Response: We appreciate the commenter's support for our five 
criteria for establishing severity subgroups. We will consider the 
commenter's other suggestion as we make further refinements to the MS-
DRGs.
    Comment: One commenter disagreed with our five criteria for 
establishing severity subgroups. The commenter stated that these 
criteria are too restrictive, lack face validity, and create perverse 
admission selection incentives for hospitals by significantly 
overpaying for cases without a CC and underpaying for cases with a CC. 
The commenter recommended that the existing five criteria be modified 
for low-volume subgroups to assure materiality. For higher volume MS-
DRG subgroups, they recommended that two other criteria be considered, 
particularly for nonemergency, elective admissions. These two criteria 
are:
    <bullet> Is the per-case underpayment amount significant enough to 
affect admission vs. referral decisions on a case-by-case basis?
    <bullet> Is the total level of underpayments sufficient to 
encourage systematic admission vs. referral policies, procedures, and 
marketing strategies?
    The commenters also recommended refining the five existing criteria 
for MCC/CC/without subgroups as follows:
    <bullet> Create subgroups if they meet the five existing criteria, 
with cost difference between subgroups ($1,350) substituted for charge 
difference between subgroups ($4,000).
    <bullet> If a proposed subgroup meets criteria <greek-i> 2 and 
<greek-i> 3 (at least 5 percent of discharges in the subgroup and at 
least 500 cases) but fails one of the others, create the subgroup if 
either of the following criteria is met:

--At least $1,000 cost difference per case between subgroups; or
--At least $1,000,000 overall cost should be shifted to cases with a CC 
(or MCC) within the base DRG for payment weight calculations.

    The commenter stated that this approach would affect DRGs where the 
total dollars under consideration may be quite high (for example, in 
the hundreds of millions), due to large numbers of procedures, but the 
percentage difference in average charges falls short of the 20 percent 
difference in average charges between subgroups.
    Response: We disagree that the five criteria for establishing 
severity subgroups are too restrictive and will lead to overpayments 
for cases without a CC and underpay for cases with a CC. Relative to 
the current CMS DRGs, the statistical data above suggest that the 
construction of the MS-DRGs using these criteria will improve payment 
accuracy. The explanatory of the MS-DRGs to predict resource use is 
more than 9 percent greater than under the current CMS DRGs. Further, 
under the current CMS DRGs, nearly 78 percent of patients are in the 
highest severity level, while only 22.2 percent are in the

[[Page 47171]]

highest severity level under the MS-DRGs. In addition to having a 
better distribution of cases among severity levels, the MS-DRGs have 
more significant difference in average charges over the different 
severity levels compared to the current CMS DRGs (72 FR 24706).
    The commenter does not appear to disagree with these statistics 
suggesting that improvements will result from the MS-DRGs. Rather, the 
commenter is suggesting that we should create more subgroups with 
smaller differences in average charges (or costs). We do not believe 
the first two alternative criteria are practical or necessary to apply. 
They would require us to make subjective judgments about whether a 
hospital would treat patients or refer them elsewhere solely based on 
payment incentives. We do not believe it is possible or appropriate for 
us to make judgments about whether a hospital would decide to treat or 
not treat a patient based on how much they are paid. Further, with the 
exception of cardiac specialty hospitals, we have no evidence hospitals 
are selectively treating or avoiding particular types of patients 
because of incentives present in Medicare's IPPS payments. The reforms 
we are making are intended to pay hospitals more accurately for the 
patients they are already treating and avoid incentives for more 
specialty hospitals to form. Therefore, we do not believe it is 
practical or necessary to use the first two criteria suggested by the 
commenter.
    With respect to the last criteria, we note that the MS-DRGs 
represent a significant expansion in the number of DRGs from 538 in FY 
2007 to 745 in FY 2008. The commenter is suggesting that we create 
additional subgroups with less variation between the subgroups. 
Payments under a prospective payment system are predicated on averages. 
Thus, most individual cases within any DRG system will have costs that 
are either higher or lower than the average for that group. While 
creating groups that have lower differences in average charges or costs 
between the groups may lessen variation around the average and improve 
explanatory power, it will also create more low-volume groups and 
increase the likelihood that the relative weights will be nonmonotonic 
and have instability in their values from year to year. We believe the 
value of a lower number of DRGs outweighs the benefit we would obtain 
from a slight increase in R\2\ and the risk of having nonmonotonic DRGs 
that would come from adopting the commenter's suggestions.
4. Conclusion
    We believe the MS-DRGs represent a substantial improvement over the 
current CMS DRGs in their ability to differentiate cases based on 
severity of illness and resource consumption. As developed, the MS-DRGs 
increase the number of DRGs by 207, while maintaining a reasonable 
patient volume in each DRG. The MS-DRGs increase the explanation of 
variance in hospital resource use relative to the current CMS DRGs by 
9.41 percent. Further, the data shown below in Table P and Table Q 
illustrate how assignment of cases to different severity of illness 
subclasses improves in the MS-DRGs relative to the CMS DRGs.

                Table P.--Overall Statistics for CMS DRGs
------------------------------------------------------------------------
                                                                Average
           CC subclass--current CMS DRG              Percent    charges
------------------------------------------------------------------------
One or more CCs...................................      77.66    $24,538
Non-CC............................................      22.34     14,795
------------------------------------------------------------------------


                Table Q.--Overall Statistics for MS-DRGs
------------------------------------------------------------------------
                                    Number of                  Average
           CC subgroup                cases       Percent      charges
------------------------------------------------------------------------
MCC..............................    2,607,351         22.2      $44,219
CC...............................    4,298,362         36.6       24,115
Non-CC...........................    4,826,980         41.1       18,416
------------------------------------------------------------------------

    Under the current CMS DRGs, 78 percent of cases are assigned to the 
highest severity levels (CC) and the remaining 22 percent are assigned 
to the lowest severity level (non-CC). Applying the three severity 
subclasses to FY 2006 data would result in approximately 22 percent of 
patients being assigned to the severity subgroup with the highest level 
of severity (MCC), 41 percent being assigned to the lowest severity 
subclass (non-CC), and the remaining 37 percent being assigned to the 
middle severity subclass (CC). Adding the new MCC subgroup greatly 
enhances our ability to identify and pay hospitals for treating 
patients with high levels of severity. As Table Q above shows, the new 
subgroups also have significantly different resource requirements. The 
MCC subgroup contains patients with average charges almost twice as 
large as for those in the CC group ($44,219 compared to $24,115).
    In addition to resulting in improvements in the DRG system's 
recognition of severity of illness, we believe the MS-DRGs are 
responsive to the public comments that were made on last year's IPPS 
proposed rule with respect to how we should undertake further DRG 
reform. In the FY 2007 IPPS final rule, we identified three major 
concerns in the public comments about our proposed adoption of CS DRGs:
    We received comments after the FY 2007 IPPS final rule suggesting 
that further adjustments were needed to the proposed DRG system. The 
commenters believed that the CS DRGs did not incorporate many of the 
changes to the DRG assignments that have been made over the years to 
the CMS DRGs. There was significant interest in the public comments in 
either revising the CS DRGs to reflect these changes or using the CMS 
DRGs as the starting point to better recognize severity.
    We believe that the MS-DRGs are responsive to these suggestions. 
The MS-DRGs use the CMS DRGs as the starting point for revising the 
DRGs to better recognize resource complexity and severity of illness. 
We are generally retaining all of the refinements and improvements that 
have been made to the base DRGs over the years that recognize the 
significant advancements in medical technology and changes to medical 
practice. At the same time, the MS-DRGs greatly improve our ability to 
identify groups of patients with varying levels of severity. They 
retain all of the improvements made to the DRGs over the years, while 
providing a more equitable basis for hospital payment.
    We received many comments on the FY 2007 IPPS rule about the 
potential use of a proprietary DRG system. The comments about the CS 
DRGs raised compelling issues about the potential government use of a 
proprietary system, including concerns about the availability, price, 
and transparency of the source code, logic and documentation of the DRG 
system. The commenters noted that CMS makes available these resources 
in the public

[[Page 47172]]

domain for purchase through the National Technical Information Service 
at nominal fees to cover costs. The commenters urged CMS not to adopt a 
proprietary DRG system that would not be available on the same terms as 
the current CMS DRGs.
    There are no proprietary issues associated with the MS-DRGs. The 
MS-DRGs will be available on the same terms as the current CMS DRGs 
through the National Technical Information Service.
    We also received other comments on the FY 2007 IPPS rule concerning 
the use of CS DRGs. The commenters stated that no alternatives to CS 
DRGs had been evaluated. The commenters suggested that alternative DRG 
systems can better recognize severity than the CS DRGs and should be 
evaluated before CMS decides which system to adopt. In response to 
these concerns, we contracted with RAND Corporation to evaluate several 
alternative DRG systems, including the MS-DRGs that we proposed and are 
finalizing in this final rule with comment period for FY 2008.
    As indicated above, we believe the MS-DRGs offer significant 
improvements to the DRG system without many of the liabilities the 
public commenters on the FY 2007 IPPS rule identified with the CS DRGs. 
Thus, we believe the MS-DRGs offer significant improvements in 
recognition of severity of illness and complexity of resources and are 
adopting them for FY 2008.
    Comment: Many commenters supported the MS-DRGs. One commenter 
stated that ``your proposal showcases the best of CMS, evidenced, for 
example, by an elegant and reasonable framework for severity-adjusted 
DRGs.'' Another commenter stated that it was ``about time that Medicare 
adopted a DRG system that allows for more equitable reimbursement for 
cases of severe illness with high risk of death or significant 
morbidity.'' Other commenters stated that it was very apparent that CMS 
dedicated an extensive amount of thought, planning, and resources 
toward the development of the MS DRGs, and that the system appears to 
be a very reasonable approach toward stratifying the patient grouping 
system more distinctly based on the severity of the patient's illness.
    Many commenters found the MS-DRGs to represent a reasonable 
approach to DRG refinement, stating they are, in principle, a positive 
advancement and will create a more equitable and accurate payment 
system. Other commenters stated that the MS DRGs are an effective 
method for incorporating greater refinements to reflect variations in 
patient severity. Other commenters stated that hospitals providing 
services to more complex patients should be paid in a manner that 
reflects the nature of that care. These commenters stated that they do 
not want to see a payment system that rewards hospital inefficiency and 
it is reasonable that Medicare reimbursement policy assures that 
services are appropriately compensated. Other commenters stated that, 
over time, some DRGs have become more profitable than others. The 
commenters stated that making adjustments in rates helps to restore 
balance to the entire hospital inpatient payment system. These 
commenters endorsed CMS' efforts to achieve these goals through the 
adoption of the MS-DRGs.
    Other commenters expressed their appreciation for CMS' recognition 
and consideration of issues raised in the public comments on last 
year's proposal to adopt CS DRGs. The commenters indicated that CMS 
took account of the public comments in crafting this year's MS-DRG 
proposal. The commenter applauded CMS for addressing many concerns that 
were expressed regarding CS DRGs. One of these commenters stated that 
MS-DRGs are significantly superior to the CS DRGs that were proposed 
last year. One commenter indicated that it had asked CMS to do the 
following when considering adoption of a new DRG system:
    <bullet> Show evidence that the alternative resulted in an improved 
hospital payment system compared to the existing DRG system;
    <bullet> Test the degree to which the variation in costs within 
cases at the DRG level is reduced;
    <bullet> Consider whether there were easier ways to adjust for 
severity similar to the differentiation of patients in FY 2006 based on 
the absence or existence of a major cardiovascular diagnosis;
    <bullet> Maintain the improvements made to differentiate cases 
based on complexity in the existing system; and
    <bullet> Avoid creating a system that is proprietary and lacks 
transparency.
    The commenter indicated that CMS made a concerted effort to develop 
a system that incorporates all of these goals and indicated their 
support for these meaningful improvements to the IPPS. Like this 
commenter, several other commenters were also in agreement that the 
proposed DRG system should not be proprietary to avoid limiting public 
access to the system. Another commenter who expressed appreciation for 
CMS' responsiveness to issues raised in last year's IPPS rule indicated 
that the MS-DRGs are logical, transparent, and nonproprietary, which 
well suits the needs of the health care community. Other commenters 
also expressed support for CMS' decision to make the MS-DRGs 
nonproprietary, open, and accessible, and available on the same terms 
as the current DRGs.
    Another commenter stated that it had decades of experience doing 
work with DRG systems and believe that there has been a need for a 
severity adjustment mechanism in the CMS DRGs to facilitate more 
accurate payment under the IPPS. In its view, the MS-DRG methodology is 
an appropriate mechanism to add severity adjustments to IPPS for FY 
2008. According to the commenter, the MS-DRGs' advantages include:
    <bullet> They are based on the current CMS DRGs, whose technical 
features, data structures, and program algorithms have been fine-tuned 
over the years to accommodate the insertion and deletion of DRGs, 
changes in code/criteria lists, changes to CC and CC exclusion lists, 
changes in hierarchy, addition or deletion of DRG criteria, among 
others.
    <bullet> Additional severity adjustments will not require 
substantial modifications to this basic, extensible, and highly 
efficient architecture. The architecture will facilitate the addition 
of new categories necessitated by the introduction of new technologies 
or the application of the methodology to non-Medicare populations.
    The commenter recommended that CMS plan for a more flexible, four-
character nomenclature in the severity DRG system as soon as reasonably 
possible. The commenter noted that all commercially available severity-
adjusted DRG systems have adopted a nomenclature that employs an 
initial 3-digit base DRG designation followed by a 1-digit severity 
score. This approach is far more flexible and transparent. More 
importantly, the approach lends itself more readily to the addition of 
new base DRGs and the evolution of more granular severity-adjustment.
    Many commenters were supportive of the MS-DRGs because they were 
derived from the existing system and, therefore, preserve the numerous 
policy decisions made over the years and embodied in the CMS DRGs. 
These commenters appreciated that severity stratifications were created 
from the existing base DRGs with the result of redistribution within, 
rather than across, the DRGs. Commenters also stated that the MS-DRGs 
provide CMS with the flexibility of making DRG reassignments within a 
base MS-DRG by moving more complex services up a severity level. Other 
commenters stated that the MS-

[[Page 47173]]

DRG system does a better job than last year's proposed CS DRGs or the 
current CMS DRGs of reflecting advancements in medical technology and 
other improvements in medical care.
    Some commenters stated that, with the development and proposal of 
MS-DRGs, they saw little reason for CMS to continue assessing and 
considering alternative patient classification systems in the 
foreseeable future. These commenters stated that the MS-DRG system is 
more transparent, accessible, and understandable than the alternative 
systems being evaluated by RAND.
    Some commenters stated that the MS-DRGs provide more accurate 
grouping for severity of illness while retaining the CMS-DRG 
refinements to account for more accurate payment of resource 
utilization. However, these commenters recommended that the 
implementation of MS-DRGs be delayed for one year to wait for the final 
RAND report and the availability of a GROUPER. One commenter stated 
that the MS-DRGs are an excellent attempt to define severity of illness 
based on DRGs for the Medicare population but urged us not to implement 
them in FY 2008 unless it is deemed to be the final system adopted from 
the ones being studied by RAND. Several commenters stated that 
hospitals will undergo enormous costs to ``educationally gear up'' for 
the MS-DRGs. The commenter stated that the hospital community must 
expend educational dollars in its attempt to improve coding to optimize 
each case's DRG assignment. These comments were concerned about the 
burden and expense that would be imposed on hospitals from adopting one 
significant DRG reform this year and another one next year. A number of 
other similar comments urged CMS not to move to MS-DRGs if it plans to 
implement another new severity system in FY 2009.
    Response: We appreciate the support for MS-DRGs. We agree that, 
building on the current DRG system, we have maintained the best aspects 
of our past efforts while adding additional refinements to better 
identify severity. We also agree that it is beneficial to consider 
moving to a four-character nomenclature for MS-DRGs. We have already 
developed an internal version with four characters, with the fourth 
character indicating the severity levels. Systems restrictions prevent 
us from using this four-character numbering system in Medicare's data 
systems at this time. However, we will continue to evaluate the 
possibility of moving to such a numbering system.
    With respect to the comments about the RAND project and the concern 
about adopting two different DRG reforms in succeeding years, we note 
that RAND has completed its evaluation of alternative DRG systems, 
including the MS-DRGs. Consistent with RAND's findings, we believe it 
is appropriate at this time to adopt the MS-DRG system for Medicare in 
FY 2008. While there will be an opportunity for the public to comment 
on RAND's findings, we expect to permanently adopt the MS-DRGs for the 
IPPS. We do not believe it is likely that there will be persuasive 
public comments suggesting that one of the alternative DRG systems 
being evaluated by RAND is clearly superior.
    Comment: One commenter fully endorsed the move to MS-DRGs, but 
stressed the need of maintaining the current level of transparency in 
the DRG system, regardless of the chosen methodology. The commenter 
stated that many companies offer software that hospitals and health 
plans utilize in managing the billing, coding, and payment for hospital 
inpatient services under the DRGs. The development of this software is 
possible only because the current DRG methodology is a transparent 
system. By that, they mean that members of the public can obtain full 
access to the details underlying the system by purchasing information 
and software from the National Technical Information Service (NTIS) at 
a nominal charge in a timely manner (well in advance of the 
implementation of changes). The commenter appreciated the agency's 
commitment in the FY 2007 final rule to ``continue to strive to promote 
transparency in our decision making as well as in future payment and 
classification systems, as we have done in the past.'' The commenter 
commended CMS for its continued attention to the transparency issue and 
appreciates CMS' proposal to make the MS-DRGs available on the same 
terms as they currently do CMS DRGs through NTIS.
    Response: We agree that it is important to provide updates and 
modifications to the DRG system in a transparent manner. We intend to 
continue our efforts to do so by providing the necessary information 
through our regulations, Web sites, and through NTIS. The MS-DRGs will 
be available to the public on the same terms as the CMS DRGs.
    Comment: MedPAC reviewed the MS-DRGs and commended CMS for its 
commitment to improve the accuracy of Medicare payments for hospital 
acute inpatient services. MedPAC stated that CMS staff had made 
significant progress toward achieving this goal with the development of 
MS-DRGs coupled with cost-based weights. MedPAC's analysis showed that 
MS-DRGs will result in a substantial improvement in payment accuracy. 
MedPAC took several steps to evaluate the proposed MS-DRGs. First, they 
examined their face validity. An effective patient classification 
system, in the context of a payment system, should group together 
clinically similar cases that have similar costs. In addition, MedPAC 
stated that relative weights calculated for the classification groups 
(MS-DRGs) generally should exhibit a consistent hierarchy of values 
across levels of severity of illness for different conditions. 
Therefore, one issue is how much costs vary around the mean cost per 
case for cases grouped within MS-DRGs. Another issue is whether 
relative weights for different severity levels show the expected 
hierarchy across most clinical conditions. For comparison, MedPAC also 
looked at the cost variation and relationships among relative weights 
for cases grouped in the current DRGs and in the severity categories of 
the APR DRGs. MedPAC also examined how the MS-DRGs would affect payment 
accuracy in the IPPS, measured by how closely payments would track 
costs for different types of cases. MedPAC compared payment accuracy 
under the MS-DRGs with the results under the current CMS DRGs and the 
severity categories of the APR DRGs.
    MedPAC found that MS-DRGs did a better job of grouping cases with 
similar costs into the same category. This was expected because the MS-
DRGs break out high severity (and high cost) cases with MCCs into 
separate DRGs. For comparison, MedPAC also calculated the amount of 
variation in costs among cases within the severity classes of APR DRGs 
(Version 23). The average absolute difference for the APR DRGs, in 
turn, was 7.4 percent lower than the value for DRGs. MedPAC stated that 
this suggests that at least some opportunities are available for 
further refinement of the MS-DRGs. Although MedPAC found the MS-DRGs 
were not perfect, and may need to be further refined over time, it 
believed they represent a significant improvement over the current CMS 
DRGs. MedPAC's analysis showed that payment accuracy increased 
substantially when moving from the current DRGs to one based on the MS-
DRGs.
    Response: We agree with MedPAC that the MS-DRGs represent a 
significant improvement over the current CMS DRGs. As suggested above, 
we intend to use RAND's evaluation of the MS-DRGs to make further 
improvements to it. We appreciate MedPAC's suggestion to use the APR 
DRGs to also help us identify potential

[[Page 47174]]

areas where further improvements can be made to the MS-DRGs.
    Comment: One comment stated that the ``Crosswalk from CMS DRGs to 
MS-DRGs'' was somewhat misleading. The commenter was concerned that 
some entities are interpreting it as a one-to-one mapping. The 
commenter suggested that it be clarified that an individual DRG code 
cannot be mapped directly to a MS-DRG. The commenter recommended that 
MS-DRG implementation be delayed so that CMS can release the MS-DRG 
GROUPER and allow hospitals time to analyze the impact prior to 
implementation.
    Response: After public display of the proposed rule, we were asked 
to provide additional information on the CMS Web site showing how the 
current CMS DRGs map to the new MS-DRGs. Although we provided this 
information, we were concerned about its usefulness because of the very 
issue raised in this public comment. That is, there is not a one-to-one 
crosswalk between the 538 DRGs that exist under the CMS DRGs and the 
745 MS-DRGs. While this information may not have been as useful as 
originally anticipated by members of the public that requested it, we 
believe the fact that there is not a one-to-one crosswalk between the 
CMS DRGs and the MS-DRGs was well understood by the public based on the 
description of each system in the proposed rule. In addition, we made 
other information available to the public that would allow for a 
detailed analysis of the MS-DRG proposal as well as the continuing 
transition to cost-based weights. We made available two MedPAR files 
(FY 2005 and FY 2006) that included the CMS DRG and MS-DRG assignment 
for each case. In addition, we made available charge-based, cost-based, 
and blended weights under the CMS DRGs and the blended weights under 
the MS-DRGs. With this information, we believe the public had detailed 
information to be able to do a comprehensive analysis of our proposal 
to adopt MS-DRGs. We do not believe that there should have been any 
confusion associated with the publicly requested CMS DRG to MS-DRG 
crosswalk on the CMS Web site, and we do not see this comment as a 
reason to delay implementation of the MS-DRGs.
    Comment: A number of commenters urged CMS to process more than nine 
diagnosis and six procedure codes. The commenters stated that this 
particular concern is more acute with MS-DRGs where a hospital needs to 
make sure that CMS processes codes that are MCCs and CCs because they 
determine DRG assignment. The commenters also stated that vendors and 
health care groups make decisions about quality of care based upon the 
CMS claim file. The commenters asked CMS to commit to a timeframe when 
it will revise its systems to accept all 25 diagnosis and procedure 
codes provided via electronic transmissions.
    Response: We recognize the importance of using and analyzing as 
much clinical data from claims as possible. Unfortunately, current 
system limitations preclude CMS from processing more than nine 
diagnoses and six procedures at this time. We will continue to review 
this matter in conjunction with our other information systems 
priorities.
    Comment: Several commenters stated that ICD-10-CM and ICD-10-PCS 
would provide a much better foundation for a severity-adjusted DRG 
system than ICD-9-CM. The value of MS-DRGs or any other severity-
adjusted DRG system that relies on claims data will be limited by the 
continued use of an obsolete, non-specific classification system. ICD-
10-CM and ICD-10-PCS would provide greater clinical detail, and up-to-
date clinical information for capturing information on disease 
severity, including complications, comorbidities and risk factors, as 
well as more detailed information on the use of medical technology and 
its impact on resource utilization and outcomes. The longer adoptions 
of contemporary classifications are delayed, the more CMS must develop 
alternatives that become costly to administer and for providers costly 
to continually implement.
    One commenter stated that, in previous years, the commenter's 
recognition of the industry's need for consistency in medical coding, 
improved data integrity, and more precise and contemporary data 
reflecting 21st century medicine has led it to advocate for adoption 
and coordinated implementation of ICD-10-CM and ICD-10-PCS in their 
previous comments on the IPPS. The commenter stated that it is 
unfortunate that, as new initiatives that rely heavily on coded data 
gain momentum (such as present on admission reporting, pay-for-
performance, and DRG refinements to better recognize severity of 
illness), ICD-10-CM and ICD-10-PCS still have not been implemented as 
replacements for ICD-9-CM.
    One commenter stated that if the obsolete ICD-9-CM coding system 
had been replaced earlier, claims data that would significantly add to 
the knowledge needed to measure severity, quality, and other factors 
under consideration would now be available. The commenter stated that 
the proposed MS-DRG system and other proposals in this year's proposed 
rule are excellent examples of how ICD-10-CM and ICD-10-PCS could 
improve the ability to refine reimbursement systems in order to better 
reflect severity of illness. The commenter urged CMS and HHS to take 
immediate action to secure the adoption and implementation of these two 
classification systems, and supporting transaction standards as early 
as possible.
    Response: We are continuing to carefully analyze issues associated 
with implementing ICD-10.
    Comment: Several commenters opposed the reuse of the current CMS 
DRG numbers in the MS-DRG system. Although one commenter acknowledged 
the advantages of maintaining the current 3-digit numerical scheme, it 
believed the use of the same DRG numbers in both the CMS DRG and MS-DRG 
systems will create confusion when analyzing longitudinal data, given 
the same DRG number will have a different meaning in the two systems. 
The commenter suggested that delaying implementation of a severity-
adjusted DRG system until FY 2009 would allow additional time for 
making more extensive systems modifications, such as adopting an 
alphanumeric or 4-digit numerical structure for the new DRG system. 
Another commenter suggested that CMS begin numbering with a 4-digit 
number so that there will not be confusion about which system is being 
used.
    Response: We agree that it is beneficial to consider moving to a 4-
character nomenclature for MS-DRGs. We have already developed an 
internal version with four characters, with the fourth character 
indicating the severity levels. Systems restrictions prevent us from 
using this 4-character numbering system in Medicare's data systems at 
this time. However, we will continue to evaluate the possibility of 
moving to such a numbering system in the future. We do not expect the 
changes to our data systems that would be necessary to adopt a 4-digit 
DRG numbering system will occur with a year's delay of the MS-DRGs. 
Therefore, we do not believe that we should delay the improvements in 
recognition of severity of illness in our payment system for this 
reason. If there is public interest, we will make our internal 4-digit 
numbering system available on the CMS Web site to assist the public in 
understanding the future numbering system we would be likely to adopt. 
Such information may also be useful to the public to engage in the 
types of analysis suggested by this public comment.

[[Page 47175]]

    Comment: One commenter stated that the Medicare CMS DRG GROUPER is 
used by some payers for their commercial, non-Medicare business. The 
commenter understands that CMS may want to move to MS-DRGs for Medicare 
patients, but is concerned about its continued access to the current 
GROUPER program, should Medicare decide to replace CMS DRGs with MS-
DRGs. The commenter requested that the existing CMS GROUPER remain 
intact for commercial insurers to utilize for their non-Medicare 
contracts. The commenter suggested this could be done by keeping the 
GROUPER in the CMS database with the title ``CMS GROUPER.'' The 
commenter stated CMS would not need to update the weights of the CMS 
GROUPER or make any other adjustments.
    Response: The focus of CMS' efforts is in developing and 
maintaining a DRG system that is appropriate for its Medicare 
population. We have, and will continue to, encourage other payers to 
make any necessary modifications to this program to meet their needs. 
The current versions of the CMS DRGs will remain in the public domain. 
However, we do not intend to make any updates to them once we move to 
the MS-DRGs or another severity DRG system. We do not believe that 
Medicare should undertake the effort and expense to maintain and update 
a DRG system that will have no application for Medicare beneficiaries. 
We encourage other payers to avail themselves of any DRG logic in our 
nonproprietary system from past years and use this information as 
appropriate to develop updates and refinements annually to suit the 
needs of their own patient populations.
5. Impact of the MS-DRGs
    Unlike the CS DRGs we proposed last year for FY 2008, the payment 
impacts from the MS-DRGs we proposed to adopt (and are finalizing in 
this final rule with comment period) for FY 2008 would largely be 
redistributive within each base MS-DRG. Such a result occurs because we 
collapse the current CC/non-CC, age and other distinctions that exist 
in the CMS DRGs and redivide them based on MCCs, CCs, and non-CCs. 
Thus, within each base MS-DRG, some cases will be paid more and some 
less, but the base MS-DRGs are retained so there is no redistribution 
between types of cases as would have occurred under the proposed CS 
DRGs. In the proposed rule, we encouraged readers to review Table 5 in 
the Addendum to the proposed rule for a list of the proposed MS-DRGs 
and the proposed respective relative weight from the revisions we 
proposed to better recognize severity of illness to better understand 
how payment for cases within each base MS-DRG will be affected.
    As indicated above, all of the severity DRG systems being evaluated 
by RAND can be expected to result in similar redistributions in case-
mix among hospitals. The payment models used by RAND and CMS (and RTI 
as well) all assume static utilization. That is, payment impact models 
simulate the effects of a change in policy, assuming no change to 
Medicare utilization. Any system adopted to better recognize severity 
of illness with a budget neutrality constraint will result in case-mix 
changes that can be expected to benefit urban hospitals at the expense 
of rural hospitals. This impact occurs because patients treated in 
urban hospitals are generally more severely ill than patients in rural 
hospitals and the CMS DRGs are not currently recognizing the full 
extent of these differences. Similarly, there will be differential 
impacts among other categories of hospitals (for example, teaching, 
disproportionate share, large urban, and other urban hospitals) 
depending on the mix of cases that each hospital treats. The impact of 
the MS-DRGs can be expected to have similar effects on case-mix as the 
DRG systems being analyzed by RAND. These conclusions are confirmed by 
RAND's analysis earlier in this final rule with comment period as well 
as the payment impacts we illustrated in the proposed rule and again in 
this final rule with comment period.
    Comment: One commenter believed that a ``stop loss'' provision 
should be instituted as part of the transition. Similar to that under 
the IPF PPS, no hospital can receive less than 70 percent of what they 
would otherwise have been paid under the old system. Another commenter 
asked that CMS investigate mechanisms for dampening large payment rate 
fluctuations.
    Response: Changes in payments from MS-DRGs will be mitigated in any 
single year by adopting them over a 2-year transition period. We 
believe a 2-year transition period for implementation of the MS-DRGs 
addresses the concern of these commenters. Further information is 
provided in section II.E. of the preamble of this final rule with 
comment period about how MS-DRG relative weights are being determined 
to reflect implementation over a 2-year period.
6. Changes to Case-Mix Index (CMI) From the MS-DRGs
    After the 1983 implementation of the IPPS DRG classification 
system, CMS observed unanticipated growth in inpatient hospital case-
mix (the average relative weight of all inpatient hospital cases), 
which we use as a proxy measurement for severity of illness. We had 
projected the rate of growth in case-mix for the period 1981 to 1984 to 
be 3.4 percent. The realized rate of growth during this period, which 
included the introduction of the IPPS, was 8.4 percent, a variance in 
excess of 1.6 percent per year. The unexpected growth in payments was 
due to increases in the hospital case-mix index (CMI) beyond the 
previously projected trend. Hospitals' CMI values measure the expected 
treatment cost of the mix of patients treated by a particular hospital. 
There are three factors that determine changes in a hospital's CMI:
    (a) Admitting and treating a more resource intensive patient-mix 
(due, for example, to technical changes that allow treatment of 
previously untreatable conditions and/or an aging population);
    (b) Providing services (such as higher cost surgical treatments, 
medical devices, and imaging services) on an inpatient basis that 
previously were more commonly furnished in an outpatient setting; and
    (c) Changes in documentation (more complete medical records) and 
coding practice (more accurate and complete coding of the information 
contained in the medical record).
    We note that changes in patient-mix and medical practice signal 
real changes in underlying resource utilization and cost of treatment. 
While these changes may have occurred in response to incentives from 
IPPS policies, they represent real changes in resource needs. In 
contrast, changes in CMI as a result of improved documentation and 
coding do not represent real increases in underlying resource demands. 
For the implementation of the IPPS in 1983, improved documentation and 
coding were found to be the primary cause in the underprojection of CMI 
increases, accounting for as much as 2 percent in the annual rate of 
CMI growth observed post-PPS.\2\
---------------------------------------------------------------------------

    \2\ Carter, Grace M. and Ginsburg, Paul: The Medicare Case Mix 
Index Increase, Medical Practice Changes, Aging and DRG Creep, Rand, 
1985.
---------------------------------------------------------------------------

    The Medicare Trustees Technical Review Panel \3\ has previously 
determined the annual measured change in CMI for inpatient hospital 
services to oscillate around an underlying real trend of 1 percent 
annual growth. In 1991 the Medicare-specific trend in real CMI growth 
was found in a then-HCFA

[[Page 47176]]

funded study \4\ to be within a range of 1 to 1.4 percent. In the 
annual study conducted by CMS, there has been no evidence to support a 
real case-mix increase in excess of the annually projected 1 percent 
upper bound in the period. MedPAC findings have echoed this with its 
recent study of real case-mix change finding growth rates for years 
2002, 2003, and 2004 of 1 percent, 0.6 percent, and 0.4 percent, 
respectively.\5\
---------------------------------------------------------------------------

    \3\ Review of Assumptions and Methods of The Medicare Trustees' 
Financial Projections; Technical Review Panel on the Medicare 
Trustees Reports, December 2000.
    \4\ ``Has DRG Creep Crept Up? Decomposing the Case Mix Index 
Change Between 1987 and 1988''; Carter, Newhouse, Relles; R-4098-
HCFA/ProPAC (1991).
    \5\ Medicare Payment Advisory Commission: Report to the 
Congress, March 2006 (p. 52).
---------------------------------------------------------------------------

    In the proposed rule, we indicated that we believe that adoption of 
the proposed MS-DRGs would create a risk of increased aggregate levels 
of payment as a result of increased documentation and coding. MedPAC 
notes that ``refinements in DRG definitions have sometimes led to 
substantial unwarranted increase in payments to hospitals, reflecting 
more complete reporting of patients' diagnoses and procedures.'' MedPAC 
further notes that ``refinements to the DRG definitions and weights 
would substantially strengthen providers' incentives to accurately 
report patients' comorbidities and complications.'' To address this 
issue, MedPAC recommended that the Secretary ``project the likely 
effect of reporting improvements on total payments and make an 
offsetting adjustment to the national average base payment amounts.'' 
\6\
---------------------------------------------------------------------------

    \6\ Medicare Payment Advisory Commission: Report to Congress on 
Physician-Owned Specialty Hospitals, March 2005, p. 42.
---------------------------------------------------------------------------

    The Secretary has broad discretion under section 1886(d)(3)(A)(vi) 
of the Act to adjust the standardized amount so as to eliminate the 
effect of changes in coding or classification of discharges that do not 
reflect real changes in case-mix. While we modeled the changes to the 
DRG system and relative weights to ensure budget neutrality, we are 
concerned that the large increase in the number of DRGs will provide 
opportunities for hospitals to do more accurate documentation and 
coding of information contained in the medical record. Coding that has 
no effect on payment under the current CMS-DRGs may result in a case 
being assigned to a higher paid DRG under the proposed MS-DRGs. Thus, 
more accurate and complete documentation and coding may occur because 
it will result in higher payments under the MS-DRG system. For the 
proposed rule, we stated that the potential for more accurate and 
complete documentation and coding will apply equally under the acute 
IPPS as well as under the LTCH PPS because the same DRGs are used for 
both payment systems. However, for reasons explained elsewhere in this 
final rule with comment period, we are limiting this analysis to the 
IPPS.
    CMS in the past has adjusted standardized amounts under the IRF PPS 
to account for case-mix increases due to improvements in documentation 
and coding. In 2004, RAND \7\ published a technical report as part of 
the follow-up to the implementation of the IRF PPS. The initial weights 
used within the IRF PPS were based on a mix of CY 1999 and CY 1998 
data. The study reviewed the changes between this base data set and the 
IRF PPS implementation year of 2002. The report found that the weight 
per discharge for IRFs had grown by 3.4 percent between the CY 1999 
data set and the CY 2002 data set. In a detailed analysis of both 
statistical patterns in acute stay records and directly measured coding 
practices, RAND found that the level of case-mix increase associated 
with documentation and coding-induced changes in the transition year 
ranged between 1.9 and 5.8 percent, with the upper end of the estimate 
associated with real declines in resource use. (We note that RAND 
revised its report in late 2005 to reflect an upper bound of 5.9 
percent, instead of the 5.8 percent that we reported in the FY 2006 IRF 
PPS proposed and final rules.)
---------------------------------------------------------------------------

    \7\ Carter, Paddock: Preliminary Analyses of Changes in Coding 
and Case Mix Under the Inpatient Rehabilitation Facility Prospective 
Payment System, RAND, 2004.
---------------------------------------------------------------------------

    We used the results of this analysis to justify a 1.9 percent 
adjustment to payment rates for IRFs in FY 2006 (70 FR 47904) and a 2.6 
percent adjustment to payment rates for IRFs in FY 2007 (71 FR 48370), 
for a combined total adjustment of 4.5 percent. The implementation year 
was marked by the transitioning of hospitals to the IRF PPS payment 
based on cost reports beginning January 1, 2002, and staggered to 
October 1, 2002. A combination of increased familiarity with the system 
by providers and the staggered transition could mean that documentation 
and coding-induced case-mix change continued as hospitals experienced 
ongoing changes in the early years of the IRF PPS and as the incentives 
within the system were more widely recognized. We also recognize that 
significant changes in IRF patient populations may be occurring as a 
result of recent regulatory changes, such as the phase-in of the 75-
percent rule compliance percentage. We intend to continue analyzing 
changes in coding and case-mix closely, using the most current 
available data, as part of our ongoing monitoring of the IRF PPS and, 
based on this analysis, we intend to propose additional payment 
refinements for IRFs in the future as the analysis indicates such 
adjustments are warranted.
    Furthermore, as part of our analysis of this issue, we considered 
the recent experience of the State of Maryland with adopting the APR 
DRG system. Maryland introduced APR DRGs for payment for three teaching 
hospitals in 2000. Between State fiscal years (SFYs) 2001 and 2005,\8\ 
the remaining hospitals continued to be paid using modified CMS DRGs. 
In June 2004, the remaining hospitals were notified that Maryland would 
expand the use of APR DRGs throughout its all payer charge-per-case 
system beginning in July 2005. Hospitals in Maryland improved coding 
and documentation in response to the adoption of APR DRGs. As a result 
of this improved documentation and coding, reported CMI increased at a 
greater rate than real CMI. Given the similarity between coding 
incentives using the APR DRGs in Maryland and the MS-DRGs that are 
being proposed for Medicare, we analyzed Maryland data to develop an 
adjustment for improved documentation and coding.
---------------------------------------------------------------------------

    \8\ Maryland uses a July 1 to June 30 State fiscal year. Prior 
to FY 2003, Maryland had a 6-month lag in the data used to calculate 
the hospital base case-mix index and case-mix change. Maryland used 
12 months data ending December even though the hospitals' rate year 
was July 1 to June 30. In FY 2003, Maryland moved to what it calls 
``Real Time Case-Mix'' and started using 12 months data ending June 
30 to calculate case-mix index and case-mix change for a rate year 
beginning July 1.
---------------------------------------------------------------------------

    For the Maryland analysis, we assume that, in SFY 2005, those 
hospitals not already being paid under the APR DRG system began acting 
as if the transition to the new DRG logic had already taken place. This 
assumption is supported by the following facts: (a) Maryland hospitals 
were reporting to the Health Services and Cost Review Commission 
(HSCRC), Maryland's governing body of its all-payer ratesetting system 
using the APR DRG GROUPER in 2005; (b) hospitals were provided training 
in coding under the APR DRG GROUPER; (c) hospitals had access to 
reports based on APR DRG logic; and (d) hospitals were given large 
amounts of feedback as to their performance under the GROUPER by the 
HSCRC relative to peer hospitals.
    The incentives for Maryland hospitals are to code as completely and 
accurately as possible because, beginning in July 2005, all Maryland 
hospitals were paid using APR DRGs. SFY 2005 was an

[[Page 47177]]

important year in Maryland, as it marked the beginning of the 2-year 
period of transition after which a hospital's revenues were reduced if 
coding was not as complete as a peer hospital. Under the current CMS 
DRGs, each secondary diagnosis code is recognized as either a CC or 
non-CC. Hospitals in Maryland and nationally for Medicare only needed 
to code one secondary diagnosis as a CC when paid using CMS DRGs for 
the patient to be assigned to a higher-weighted DRG split based on the 
presence or absence of a CC. Under the APR DRGs, each secondary 
diagnosis is designated as minor, moderate, major, or extreme. Under 
the MS-DRGs, each secondary diagnosis is designated as a non-CC, CC, or 
MCC. Hospitals in Maryland have incentives under the APR DRGs to code 
until a case is assigned to the highest of the four severity levels 
within a base DRG. Under the MS-DRGs, hospitals will have incentives to 
code until a case is assigned to one of up to three severity levels 
within a base DRG. Although the APR DRGs and the MS-DRGs may be 
different, we believe that hospitals have the same incentive under both 
systems to code as completely as possible. For this reason, we believe 
that the Maryland experience is a reasonable basis for projecting 
changes in coding practices for the wider national hospital population 
for the first 2 years of the MS-DRGs.
    We believe the analysis presented below provides a reasonable 
analysis of the potential growth in CMI due to improved documentation 
and coding. In addition to the similarity between coding incentives 
under the proposed MS-DRGs and the APR DRGs, we note that Maryland is 
an all-payer State; therefore, hospitals are paid by all third party 
payers--not just the State's Medicaid program--using the APR DRGs. 
Coding has been very important for each hospital's overall revenue for 
many years, and the incentives are uniform across all third party 
payers. The transition to APR DRGs was known well in advance of the 
actual date and, as stated above, hospitals were provided training in 
coding under the APR DRGs. It is reasonable to expect that hospitals' 
experience with improved documentation and coding will occur over a 
period of at least 2 years. Thus, the experience in Maryland may be 
similar to expectations for case-mix growth for the nation as a whole. 
Finally, in reviewing the results from Maryland, we note that three 
large teaching hospitals began using APR DRGs prior to SFY 2005. These 
facilities generally treat a wider variety of patients with higher 
acuity that gives them a greater potential for increasing coding under 
the APR DRG system than other hospitals throughout Maryland. Because 
these hospitals were paid using the APR DRGs earlier than other 
Maryland hospitals, we believe data for these hospitals need to be 
analyzed from an earlier time period. However, based on the 
consultations with the HSCRC, we believe there were special issues with 
one of these hospitals that may have made its case-mix growth during 
the early years of the transition to the APR DRGs atypical of the other 
teaching hospitals.\9\ Therefore, we did not separately analyze the 
data for this hospital from the earlier time period and, as stated 
below, included its data with the rest of the Maryland hospitals.
---------------------------------------------------------------------------

    \9\ The HSCRC informed us that it began using APR DRGs for this 
hospital to calculate the CMI and case-mix change to set the 
hospital's charge per case target (CPC) that is used in Maryland's 
all-payer ratesetting system for payment. However the HSCRC also 
compared the reasonableness of hospital rates and costs for this 
hospital relative to peer institutions using modified CMS DRGs to 
calculate CMI and case-mix change. This use of dual systems to 
calculate CMI and case-mix change made it difficult for the hospital 
to code aggressively in the first few years of using APR DRGs.
---------------------------------------------------------------------------

    As part of its contract with CMS, 3M Health Information Systems 
reviewed the Maryland data in the context of our proposed changes to 
adopt MS-DRGs. 3M grouped Medicare cases in Maryland through both the 
CMS DRGs Version 24.0 and the proposed MS-DRGs for FY 2008. At our 
request, 3M deleted two of the three early transition hospitals from 
the data. It compared the results of the observed growth in case-mix 
from these data to the same process applied to Medicare data, excluding 
Maryland hospitals.
    The MedPAR data file for Federal fiscal year (FFY) 2006 (October 
2005 through September 2006) was used to create relative weights for 
both CMS DRG Version 24.0 and the MS-DRGs. The MedPAR data file 
contained 12,794,280 records. In constructing the weights, the 
following edits were used:
    <bullet> Cases with zero covered charges or length of stay were 
excluded.
    <bullet> Cases with length of stay greater than 2 years were 
excluded.
    <bullet> Only hospitals contained in the impact file for the FY 
2007 IPPS final rule were included.
    The latter criterion excluded providers reimbursed outside of the 
IPPS, including Maryland hospitals, from the weight calculation. 3M 
employed standardized charge-based relative weights developed in 
accordance with the CMS methodology. Cost-based weights were not used 
and no adjustment to the charge weights was made for application of CMS 
transfer and postacute care transfer payment policy.
    3M further grouped 2 years of MedPAR data from FY 2004 and FY 2005, 
using CMS DRG Version 24.0 and the MS-DRGs for hospitals nationally. 
Using 2 years of MedPAR data with one version of each DRG system 
further required 3M to make adjustments to the data to reflect 
revisions to ICD-9-CM codes that are made each year. MedPAR data for 
Maryland IPPS acute care providers within the IPPS data set were 
similarly assigned to the MS-DRGs and CMS DRGs for FYs 2004 through 
2006.
    Each Maryland record, exclusive of the two early transition 
teaching hospitals for the 3 observed years (SFY 2004 to SFY 2006), was 
assigned to a proposed MS-DRG based on the ICD-9-CM codes the hospital 
submitted. The same results were obtained from data at the national 
level using the MS-DRGs. Further, we obtained data from the HSCRC 
showing the weighted average increase in case-mix for calendar years 
2001 to 2003 for the two large academic medical centers that began an 
early transition to the APR DRGs. In addition, we also obtained case-
mix increases under the CMS DRGs for FYs 2004 through 2006. The 
Medicare Actuary examined the data below:

[[Page 47178]]



    Table R.--Maryland and National Data Used for Case-Mix Adjustment
                                Analysis
------------------------------------------------------------------------
                                 FY 2004 to   FY 2005 to    FY 2004 to
                                    2005         2006          2006
                                 (percent)    (percent)      (percent)
------------------------------------------------------------------------
Rest of Maryland MS-DRG CMI            2.30         2.57  4.93
 [Delta].
------------------------------------------------------------------------
                                                           CY 2000 to FY
                                                                2003
------------------------------------------------------------------------
Early Transition Hospitals....          4.4          6.7  11.4
National MS-DRG CMI [Delta]...         0.47         2.65  3.13
National CMS DRG CMI [Delta]..        -0.04         1.20  1.16
Blend of MS-DRG & CMS DRG       ...........  ...........  1.68
 [Delta] using 0.47 Percent
 for 2005 and 1.2 Percent for
 2006.
Difference between Maryland     ...........  ...........  9.58
 Early Transition Hospitals
 and National Data.
Difference between Rest of      ...........  ...........  3.20
 Maryland and National Data.
Medicare Actuary Estimate (75%/ ...........  ...........  4.8
 25%) [Delta] between Early
 Transition and Rest of
 Maryland.
------------------------------------------------------------------------

    The data above show that case-mix for hospitals increased by 4.93 
percent from SFYs 2004 to 2006, during which Maryland adopted the APR 
DRGs for most hospitals. Case-mix for the two large teaching hospitals 
that were paid using the APR DRGs earlier than other hospitals in the 
State increased by 11.4 percent from SFYs 2001 to 2003. The weighted 
average increase in Maryland from these two categories of hospitals is 
5.58 percent. Case-mix using the MS-DRGs would have increased 0.47 
percent in FY 2005 and 2.65 percent in FY 2006. Nationally, Medicare 
case-mix using the CMS DRGs decreased by 0.04 percent in FY 2005 and 
increased by 1.2 percent in FY 2006. The Actuary calculated a Medicare 
case-mix increase nationally over 2 years using a blend of these data 
from the MS-DRGs for FY 2005 and national Medicare data for FY 2006 
from the CMS DRGs. The Actuary did not use either the -0.04 percent for 
the CMS DRGs or the 2.65 percent for the MS-DRGs to create this blended 
case-mix because these figures appeared atypical to national trends. 
Therefore, the Actuary dropped one atypically high and low number from 
each of the 2 years of data and calculated an average increase of 1.68 
percent from FY 2004 to FY 2006. These data demonstrate that the 
measure of average CMI for Medicare cases is growing more rapidly 
within Maryland than nationally. Case-mix for the Maryland teaching 
hospitals and the rest of Maryland increased 9.58 percent and 3.20 
percent more, respectively, than the national average over 2 years, 
suggesting that improved documentation and coding lead to perceived, 
but not real, changes in case-mix.
    The Actuary noted that the case-mix increase in Maryland for two 
large teaching hospitals over a 2-year period was much higher in the 
early years of the APR DRGs than other Maryland hospitals (11.4 percent 
compared to 4.93 percent for the rest of Maryland). Further, teaching 
hospitals generally treat cases with higher acuity than other hospitals 
and have more opportunity to improve coding and documentation to 
increase case-mix than other hospitals. Teaching hospitals also 
represent a higher proportion of national Medicare data than they do of 
the data in Maryland. The two early transition teaching hospitals in 
Maryland account for approximately 10 percent of the Medicare 
discharges in Maryland. Nationally, teaching hospitals account for 
approximately 50 percent of Medicare discharges. Therefore, the Actuary 
believes that the teaching hospitals should be given a higher weight in 
the national data than they represent in Maryland. However, like other 
hospitals, teaching hospitals vary in size and patient mix and not all 
have the same opportunity to improve documentation and coding. 
Therefore, we believe the weight given to teaching hospitals should be 
higher than the 10 percent for the two early transition hospitals in 
Maryland but lower than the 50 percent of discharges that they account 
for in Maryland. The Actuary gave a weight of 25 percent for teaching 
hospitals and 75 percent for the rest of Maryland to the excess growth 
in case-mix over the national average and estimates that an adjustment 
of 4.8 percent will be necessary to maintain budget neutrality for the 
transition to the MS-DRGs. This analysis reflects our current estimate 
of the necessary adjustment needed to maintain budget neutrality for 
improvements in documentation and coding that lead to increases in 
case-mix. Consistent with the statute, we will compare the actual 
increase in case-mix due to documentation and coding to our projection 
once we have actual data to revise the Actuary's estimate and the 
adjustment we make to the standardized amounts.
    Based on the Actuary's analysis, using the Secretary's authority 
under section 1886(d)(3)(A)(vi) of the Act to adjust the standardized 
amount to eliminate the effect of changes in coding or classification 
of discharges that do not reflect real changes in case mix, we proposed 
to reduce the IPPS standardized amounts by 2.4 percent each year for FY 
2008 and FY 2009. We indicated that we were considering proposing a 4.8 
percent adjustment for FY 2008. However, we believed it would be 
appropriate to provide a transition because we would be making a 
significant adjustment to the standardized amounts. In the proposed 
rule, we expressed interest in receiving public comments on whether we 
should apply the proposed adjustment in a single year, over 2 years, or 
in different increments than \1/2\ of the adjustment each year. Section 
1886(d)(3)(A)(vi) of the Act further gives the Secretary authority to 
revisit adjustments to the standardized amounts for changes in coding 
or classification of discharges that were based on estimates in a 
future year. Consistent with the statute, we will compare the actual 
increase in case mix due to documentation and coding to our projection 
once we have actual data for FY 2008 and FY 2009 for the FY 2010 and FY 
2011 IPPS rules. At that time, if necessary, we may make a further 
adjustment to the standardized amounts to account for the difference 
between our projection and actual data.
    Comment: Many commenters opposed the documentation and coding 
adjustment, which they believed would reduce payments to hospitals by 
$24 billion over the next 5 years. The commenters did not believe this 
reduction is warranted. They suggested the adjustment for documentation 
and coding is a ``backdoor attempt'' to reduce Medicare's inpatient 
hospital payments. One commenter stated that the documentation and 
coding

[[Page 47179]]

adjustment would result in a total estimated reduction in payment for 
Pennsylvania hospitals of $67.5 million in FY 2008, and an estimated 
$1.6 billion over the next 5 years. The commenter stated that such 
reductions and attempts at backdoor budget cuts would only further 
erode scarce resources and challenge hospitals in their ability to care 
for patients. The commenter stated that until MS-DRGs are fully 
implemented, and CMS can document and demonstrate that any increase in 
case-mix results from changes in coding practices rather than real 
changes in patient severity, there should be no documentation and 
coding adjustment.
    Response: We stress that there are no savings attached to this 
adjustment. This adjustment is not a ``backdoor'' attempt to reduce 
Medicare inpatient hospital payments. Without a documentation and 
coding adjustment, the changes to MS-DRGs would not be budget neutral. 
Substantial evidence supports our conclusion that the CMI will increase 
as a result of adoption of MS-DRGs without corresponding growth in 
patient severity. We have provided evidence from studies going back 
over 20 years that show that hospitals respond to incentives when 
payment classifications are changed to improve documentation and coding 
to receive higher payments. Maryland provides a recent example 
demonstrating the validity of the finding that hospitals respond to 
changes in payment classification groups by changing documentation and 
coding practices. Furthermore, we are not aware of a situation in which 
a new or revised payment system provided a payment incentive to improve 
documentation and coding, yet hospitals did not improve documentation 
and coding.
    Comment: Many commenters stated that the documentation and coding 
adjustment is based on assumptions made with little to no data or 
experience about how medical record documentation and coding practices 
will change as a result of the implementation of MS-DRGs. One commenter 
stated that the proposed adjustment has no basis in actual data or 
research pertaining to inpatient hospital coding practices. One 
commenter objected to the -2.4 percent adjustment for documentation and 
coding stating it could not understand the proposal and noted that the 
hospitals are utilizing the coding system that the Department of Health 
and Human Services has created. The commenter stated that if, in fact, 
the new severity DRGs were designed to better recognize the resources 
needed to treat the various DRG conditions, the argument can be made 
that CMS has been underpaying institutions for over 20 years. Other 
commenters objecting to the documentation and coding adjustment further 
indicated that hospitals have operated under the current DRG system for 
23 years and hospitals are already expert in their ability to maximize 
coding for payment. These commenters stated that not even in the 
initial years of the IPPS was coding change found to be in the 
magnitude of CMS' proposed FY 2008 and FY 2009 cuts. The commenters 
stated that the proposed MS-DRGs would be a refinement of the existing 
system; the underlying classification of patients and ``rules of 
thumb'' for coding would be the same. They stated that there is no 
evidence that an adjustment of 4.8 percent over 2 years is warranted 
when studies by RAND, cited in the preamble, are looking at claims 
between 1986 and 1987 at the beginning of the IPPS that showed only a 
0.8 percent growth in case-mix due to coding. The commenters stated 
that even moving from the original reasonable cost-based system to a 
new patient classification-based PPS did not generate the type of 
coding changes CMS contends will occur under the MS-DRGs.
    Many commenters disagreed with the applicability of generalizing 
from the experience in Maryland to Medicare. One commenter indicated 
that MS-DRGs and APR DRGs are two completely different ways to classify 
patients, and generalizing from one system to the other cannot be done. 
The existing classification rules will change only marginally with the 
introduction of MS-DRGs, whereas they are very different under the APR 
DRG system. Differences include:
    <bullet> APR DRGs consider multiple CCs in determining the 
placement of the patient and, ultimately, the payment. In fact, to be 
placed in the highest severity level, more than one high-severity 
secondary diagnosis is required.
    <bullet> APR DRGs consider interactions among primary and secondary 
diagnoses. Thus, factors that increase the severity level for a case 
under the APR DRGs will not occur under the MS-DRGs.
    <bullet> APR DRGs consider interactions among procedures and 
diagnoses as well. MS-DRGs do not.
    <bullet> APR DRGs have four severity subclasses for each base DRG, 
while MS-DRGs have three tiers, and this is only for 152 base DRGs--106 
base DRGs only have two tiers and 77 base DRGs are not split at all.
    <bullet> Less than half the number of patient classifications in 
the MS-DRG system are dependent on the presence or absence of a CC--410 
for MS-DRGs versus 863 for APR DRGs.
    The commenters believed that all of these differences make the 
Maryland experience an invalid comparison. They suggested there is 
significantly less possibility for changes in coding to affect payment 
under the MS-DRGs.
    Another commenter indicated that the CMS analysis is not applicable 
to Medicare because Maryland hospitals were not paid using a DRG system 
prior to APR DRG implementation. DRG data were collected for 
statistical purposes, but DRGs were not used for reimbursement. The 
commenter added that coding practices under APR DRGs are not 
necessarily comparable to MS-DRGs because they were not designed for 
reimbursement purposes. Further, the commenter found that the system 
logic is not always consistent with nationally recognized coding rules 
and guidelines, resulting in possible changes in coding practices that 
do not necessarily represent improved coding. The commenter stated that 
hospitals have little ability to change their classification and coding 
practices. Another commenter stated that Maryland's hospitals were paid 
prior to the APR DRGs under a State ratesetting system where an 
incentive to code accurately did not significantly affect what a 
hospital was paid. The commenter stated that APR DRGs are also much 
more complicated than MS-DRGs. The commenter stated that generalizing 
the Maryland experience to the rest of the nation's hospitals is an 
``apples to oranges'' comparison.
    One commenter also disagreed with CMS' use of the example of the 
IRF PPS to justify the coding adjustment. The commenter believed that 
the IRF experience is an inappropriate comparison. The commenter stated 
that coding changes seen under the IRF PPS were the result of moving 
from a cost-based system to a PPS, not the marginal difference of 
moving from the existing CMS DRGs to the refined MS-DRGs. In addition, 
coding under the IRF PPS is driven by the Inpatient Rehabilitation 
Patient Assessment Instrument (IRF-PAI). This tool provides an 
incentive for IRFs to code in a way that differs from the IPPS, which 
does not utilize a patient assessment instrument. The commenter 
believed that coding for the IRF-PAI differs significantly from the 
longstanding coding rules that inpatient PPS hospitals have followed 
for the following reasons:
    <bullet> The IRF-PAI introduced a new data item into coding--
namely, ``etiological

[[Page 47180]]

diagnosis.'' The definition of this new diagnosis and the applicable 
coding rules are significantly different than the ``principal 
diagnosis'' used to determine the DRG. More importantly, the Official 
Coding Guidelines that apply to all other diagnostic coding do not 
apply to the selection of the ICD-9-CM etiologic diagnoses codes.
    <bullet> The Official Coding Guidelines do not consistently apply 
to the coding of secondary diagnoses on the IRF-PAI. Several different 
exceptions to the guidelines have been developed by CMS for the 
completion of the IRF-PAI.
    <bullet> The definition of what secondary diagnoses may be 
appropriately reported differs under the IRF-PAI from the definition 
used by other inpatient coders.
    <bullet> Most hospitals are already coding as carefully and 
accurately as possible because of other incentives in the system to do 
so, such as risk adjustment in various quality reporting systems. 
Analysis of Medicare claims from 2001 to 2005 suggests that hospitals 
have been coding CCs at high rates for many years. More than 70 percent 
of claims already include CCs, and more than 50 percent of claims have 
at least eight secondary diagnoses (the maximum number accepted in 
Medicare's DRG GROUPER). Hospitals'' assumed ability to use even more 
CCs under MS-DRGs is very low.
    The commenter also indicated that according to an article in the 
magazine Healthcare Financial Management, the level of coding on claims 
suggests that the presence of a CC on a bill is not strongly influenced 
by financial gain. The proportion of surgical cases with a CC code is 
higher for cases where there is no CC split and, thus, no financial 
benefit, than on those cases where there is a CC split and a 
corresponding higher payment. Thus, coding is driven primarily by 
coding guidelines and what is in the medical record rather than by 
financial incentives according to this commenter. In addition, the 
commenter believed that many cases simply do not have additional CCs to 
be coded. For many claims, additional codes are simply not warranted 
and not supported by the medical record. Therefore, there is no 
opportunity for a coding change to increase payment.
    The commenter analyzed the all-payer health care claims databases 
from California, Connecticut, Florida, and Michigan because, unlike the 
MedPAR files, these databases include all 25 diagnoses reported on the 
claims. This analysis showed that only 0.25 percent of claims had an 
MCC or CC appear for the first time in positions 10 through 25. The 
commenter believed this strongly suggests that hospitals will not be 
able to ``re-order'' their secondary diagnoses to appear higher on the 
claim so that Medicare will pay a higher rate. The commenter's coding 
experts note that most hospitals use software that automatically re-
sorts the secondary diagnoses to ensure that those pertinent to payment 
are included in positions two through nine.
    The commenter also examined secondary diagnosis codes and found 
that there were relatively few non-specific codes listed among the 
common secondary diagnoses of discharges without a MCC/CC. The 
commenter believed that this means hospitals cannot shift large numbers 
of discharges to MCCs or CCs based on coding a more specific code to 
replace a nonspecific code.
    The commenter further indicated that there is no opportunity for 
increased payment due to a change in coding for 77 base DRGs under the 
MS-DRG system, as there is only one severity class and no 
differentiation in payment. Additionally, there are MS-DRGs that are 
now split between ``with MCC'' and ``without MCC'' (a combined non-CC 
and CC MS-DRG) that have historically contained a single CC/non-CC 
split. These DRGs already required secondary diagnosis coding; thus, 
the codes to qualify the case as an MCC already would have been 
present. In these cases, it is very unlikely that the medical record 
would justify an MCC that is not already present in the medical record. 
Coders must code strictly based on what the physician notes in the 
chart. Therefore, the commenter believed it is highly unlikely that a 
coder will be able to select an MCC that was not previously present in 
the medical record.
    One commenter stated that case-mix will and should increase from 
adoption of the MS-DRGs. According to the comment, changes in case-mix 
due to improved accuracy in documentation and coding have been observed 
since the introduction of DRG payments in 1983. These changes have 
occurred in every refinement of every classification system across 
every care setting. The commenter stated that changes are driven 
primarily by the fact that documentation and numbers of diagnoses coded 
is inevitably incomplete due to time pressures for completion of 
paperwork and limitations of computer systems to identify this 
information. If an item is not used and/or not important, it is less 
well documented. Refinements in patient classification make certain 
paperwork more important, encouraging providers to improve their 
documentation and reporting accuracy. This, in turn, increases apparent 
case mix that depends on these codes according to this commenter. The 
commenter stated that coding changes that affect CMI are desirable in 
the long run, since they represent more accurate data and evidence-
based care, payments, quality measurement, management decisions, and 
policy are all enhanced. This increase in accuracy is not only desired, 
it is necessary to truly reform health care (severity adjusted 
payments, quality measurement and reporting, value based-purchasing, 
among others), where ``bad data'' is frequently cited as an excuse to 
defer reform efforts. This commenter stated that it is impossible to 
accurately predict the total magnitude and timing of case-mix changes. 
Every hospital will have their own documentation and coding accuracy 
baseline, and their own real CMI based on accurate data for their 
patient mix. Each will have a different commitment to increasing their 
accuracy, resources to do so, and learning curve for implementation. 
The commenter believed that, like any prediction of the future, it will 
inevitably be wrong, particularly due to its complexity.
    Response: Many of the commenters ascribed the term ``behavioral 
offset'' to our proposed rule and believed that CMS was pejoratively 
describing hospital motives. We note that we did not use the term 
``behavioral offset'' to describe the proposed -2.4 percent adjustment 
to IPPS rates for FYs 2008 and 2009 for changes in documentation and 
coding. We regret that the term ``behavioral offset'' has been 
attributed to us. The proposed rule uses the phrase ``documentation and 
coding adjustment'' to refer to the proposed -4.8 percent (-2.4 percent 
each year for FYs 2008 and 2009) adjustment to the IPPS standardized 
amounts to maintain budget neutrality for the MS-DRGs consistent with 
the statute. Further, we believe it is important to address the notion 
in some of the public comments that CMS believes changes in how 
services are documented or coded that is consistent with the medical 
record is inappropriate or otherwise unethical. We do not believe there 
is anything inappropriate, unethical or otherwise wrong with hospitals 
taking full advantage of coding opportunities to maximize Medicare 
payment that is supported by documentation in the medical record. In 
its public comments, MedPAC recommended an adjustment for improvements 
in documentation and coding and also noted that hospitals' efforts to 
improve the specificity and

[[Page 47181]]

accuracy of documentation and coding are perfectly legitimate.\10\
---------------------------------------------------------------------------

    \10\ Medicare Payment Advisory Commission: Letter to Acting 
Administrator Leslie Norwalk, June 11, 2007, page 12.
---------------------------------------------------------------------------

    We encourage hospitals to engage in complete and accurate coding. 
Section 1886(d)(3)(A)(vi) of the Act authorizes the Secretary to adjust 
the standardized amount so as to eliminate the effect of changes in 
coding or classification of discharges that do not reflect real changes 
in case-mix. In its public comments, MedPAC indicated that the 
increases in payments that result from improvements in documentation 
and coding are not warranted because the increase in measured case-mix 
does not reflect any real change in illness severity or the cost of 
care for the patients being treated. Therefore, offsetting adjustments 
to the PPS payment rates are needed to protect the Medicare program and 
those who support it through taxes and premiums from unwarranted 
increases in spending.\11\
---------------------------------------------------------------------------

    \11\ Medicare Payment Advisory Commission: Letter to Acting 
Administrator Leslie Norwalk, June 11, 2007, page 12.
---------------------------------------------------------------------------

    In response to the comment that stated, ``moving from the original 
reasonable cost-based system to a new patient classification-based PPS 
did not generate the type of coding changes CMS contends will occur 
under the MS-DRGs,'' we believe the estimates for improvements in 
documentation and coding are within the range of those projected under 
the original IPPS. As stated above, for the implementation of the IPPS 
in 1983, RAND found that improved documentation and coding were found 
to be the primary cause in the underprojection of CMI increases, 
accounting for as much as 2 percent in the annual rate of CMI growth 
observed post-PPS.\12\ This study found a 2 percent annual change in 
case-mix from improvements in documentation and coding during the 
original adoption of the IPPS, while we are forecasting a 4.8 percent 
total increase due to the MS-DRGs. MedPAC's public comments citing a 
study in Health Affairs found that the original adjustment for 
anticipated increases in case mix due to documentation and coding 
``were substantially smaller than the actual change in case mix which 
increased more than 7 percent from the pre-PPS period to the first full 
year of the PPS system.'' \13\ MedPAC further noted that CMI increases 
due to improvements in documentation can be expected to occur over many 
years. It stated that the Prospective Payment Assessment Commission (a 
predecessor of MedPAC) considered case-mix change in developing its 
annual update recommendations to the Congress and made offsetting 
adjustments for continuing coding improvements for 10 consecutive years 
from 1986 to 1995. \14\ For these reasons, we disagree with the comment 
that our forecast of changes in case-mix from improvements in 
documentation and coding are not within the range of those projected 
when the original IPPS was implemented.
---------------------------------------------------------------------------

    \12\ Carter, Grace M. and Ginsburg, Paul: The Medicare Case Mix 
Index Increase, Medical Practice Changes, Aging and DRG Creep, Rand, 
1985.
    \13\ Medicare Payment Advisory Comission: Letter to Acting 
Administrator Leslie Norwalk, June 11, 2007, page 12 citing 
Steinwald, B. and L. Dummit. 1989. ``Hospital Case-mix change: 
Sicker patient or DRG Creep?'' Health Affairs. Summer, 1989.
    \14\ Medicare Payment Advisory Commission: Letter to Acting 
Administrator Leslie Norwalk, June 11, 2007, page 11.
---------------------------------------------------------------------------

    With respect to comments about the use of the APR DRG system in 
Maryland to forecast an adjustment for improvements in documentation 
and coding for Medicare, we agree that there are differences between 
the APR DRGs being used in Maryland and the MS-DRGs being proposed for 
use by Medicare. We believe that coding incentives in Maryland under 
the APR DRGs and nationally under the MS-DRGs are similar, not 
identical. The Maryland experience provides a useful example to 
forecast the potential increase in case mix from improvements in 
documentation because it is a recent and similar change to what we plan 
to adopt for Medicare. Although the APR DRGs and the MS DRGs may be 
different, we believe that hospitals have the same incentive under both 
systems to code as completely as possible. Moreover, as explained 
above, we estimated CMI growth using the MS DRG and CMS DRG GROUPERs, 
not APR DRG GROUPER. We used Medicare claims from Maryland hospitals 
for our analysis, but we grouped the claims under the CMS DRG GROUPER 
and proposed MS DRG GROUPER.
    For these reasons, we continue to believe that the Maryland 
experience is a reasonable basis for projecting increased case mix in 
the wider national hospital population for the first 2 years of the MS-
DRGs. MedPAC supported using the Maryland experience to forecast 
potential increases in case mix by stating: ``The case-mix reporting 
changes that occurred in Maryland-when that state adopted APR DRGs in 
its all payer rate-setting system--provide one of the few recent 
benchmarks for comparison outside of Medicare's historical 
experience.'' \15\
---------------------------------------------------------------------------

    \15\ Medicare Payment Advisory Commission: Letter to Acting 
Administrator Leslie Norwalk, June 11, 2007, page 12.
---------------------------------------------------------------------------

    The reference to the IRF PPS was not intended to suggest that we 
used the experience with that system to forecast a potential adjustment 
under the IPPS. Rather, we were merely noting that the adoption of a 
PPS system for IRFs also produced an increase in case-mix as a result 
of the new incentives presented by going to a different payment system. 
The example suggests that there is strong evidence that hospitals--
whether they are IRFs, acute care IPPS hospitals, or LTCHs--respond to 
coding incentives presented by their respective payment systems and 
will react accordingly. MedPAC's public comments also supported this 
point. In its public comments on the FY 2008 IPPS proposed rule, MedPAC 
stated that there were increases in case mix with the introduction of 
prospective payment systems for IRFs and LTCHs.\16\
---------------------------------------------------------------------------

    \16\ Medicare Payment Advisory Commission: Letter to Acting 
Administrator Leslie Norwalk, June 11, 2007, page 11.
---------------------------------------------------------------------------

    The comments about reordering of codes and substituting specific 
codes for nonspecific codes suggests that hospitals are already 
maximizing coding opportunities and there is no further changes they 
can make that would result in an increase in Medicare payment. With 
respect to reordering of codes, the commenter argues that MCCs and CCs 
will already be found in the first 9 fields on the Medicare claim and 
the codes that are stored or processed from fields 10 to 25 cannot be 
moved up higher on the claim to increase payment. While this public 
comment suggests that there will be no opportunity to increase case mix 
by moving secondary diagnoses higher on a claim, another public comment 
provided a specific estimate of how much this practice could increase 
case-mix. The commenter examined data from New York State discharges 
and indicated that if MCC and CC codes that are currently provided 
beyond the original 9 diagnoses on the claim that are used by Medicare 
are moved to the first 9 positions, case mix would increase by 0.5 
percent. This reaffirms CMS' views that hospitals focus their 
documentation and coding efforts to maximize reimbursement. Again, we 
believe these examples provide evidence from the public comments 
supporting the necessity for us to apply an adjustment for 
documentation and coding to meet the requirements of the law.

[[Page 47182]]

    We believe increases in case-mix do not only have to come from 
moving codes higher on the claim. A hospital can merely change the 
order of a principal and secondary diagnosis for closely related 
conditions to affect payment. The selection of a principal diagnosis 
that was previously coded as secondary can increase hospital payment. 
Again, we found a public comment suggesting that reordering of 
principal and secondary diagnoses can increase case mix. The commenter 
stated some DRG groups only count a code in ``the primary position 
while others only count a code in a secondary position.'' The commenter 
is noting that many DRGs are split based on the presence or absence of 
an MCC or CC as a secondary diagnosis. According to the commenter, many 
Medicare patients have multiple conditions occasioning their admission, 
suggesting that reordering the principal and secondary diagnosis codes 
can result in an increase in case-mix.
    We also disagree with the comments suggesting that hospitals do not 
have the opportunity to substitute a specified for an unspecified code 
to increase case mix. In fact, we believe these incentives will be very 
strong under the MS-DRGs with the reclassification of many unspecified 
codes as non-CCs. Again, we found statements in the public comments 
that support the notion that hospitals will have opportunities to 
substitute a specified for an unspecified condition to increase case-
mix under the MS DRGs. One commenter indicated that the CC list 
revisions encourage coding of more detailed codes and estimates that 
switching from ``not otherwise specified'' codes to detailed codes 
could increase case mix by 0.5 percent. Another commenter states: ``The 
most dramatic example is ICD-9-CM code 428.0, Congestive heart failure, 
unspecified, which was applied to an average of 2.3 million Medicare 
fee-for-service cases a year during the past three years. This was the 
most widely used secondary diagnosis code, despite the fact that 12 
more specific codes were added in FY 2003 * * * if the revised CC list 
were implemented before hospitals had a chance to improve their coding 
to accommodate the revisions, then case-mix creep and inpatient 
prospective payment system (IPPS) overpayments would ensue.''
    We further note that many of the public comments arguing against 
the documentation and coding adjustment also request a year's delay in 
implementation of the MS-DRGs so ``hospitals may focus on understanding 
the impact of the revised CC list, training and educating their coders, 
and working with their physicians for any documentation improvements 
required to allow the reporting of more specific codes where 
applicable.'' We believe this comment provides a strong indication 
that, even though many public commenters themselves argue against the 
need for the documentation and coding adjustment, the same commenters 
would like a year's delay to take the very actions that they say make 
an adjustment unnecessary. The MS-DRGs are not making any changes to 
ICD-9-CM codes. While the MS-DRGs do include some consolidations of 
base DRGs, the major changes from the current DRGs simply involve 
adding severity levels to many of the new MS-DRGs. The move to MS-DRGs 
will not necessitate additional data elements or changes in reporting 
practices. Therefore, hospitals may continue to document and code as 
they do currently to be paid by Medicare under the MS-DRGs. The only 
reason hospitals would need a delay in the MS-DRGs is to have more time 
to understand how their revenues are affected by coding under the new 
DRG system. In our view, there is a clear indication in these comments 
that hospitals will change their documentation and coding practices and 
increase case mix consistent with the payment incentives that are 
provided by the MS-DRG system.
    As further evidence that documentation and coding practices are 
affected by payment, we note a recent article in the Journal of AHIMA 
(American Health Information Management Association) which discusses 
methods for improving clinical documentation in order to increase 
reimbursement. The article describes a program at a hospital utilizing 
clinical documentation specialists that work on the hospital treatment 
floors to encourage improvements in clinical documentation. The article 
states that one year after implementing the program, the hospital 
gained an additional $1.5 million in reimbursement. In the second year, 
the hospital gained $900,000. The article reports a similar program at 
another hospital where the ``the academic hospital was overly 
conservative in its coding practices and ``leaving money on the table.' 
'' \17\ These examples provide strong support for concluding that there 
were opportunities under the current CMS DRGs to improve coding and 
increase payment. With incentives changing under the MS-DRGs, we 
believe there will be additional opportunities to improve documentation 
and coding. We believe this article supports our contention that 
hospital coders and physicians will respond to incentives available 
under MS-DRGs by improving documentation and coding to increase case-
mix.
---------------------------------------------------------------------------

    \17\ Dimick, Chris ``Clinical Documentation Specialists,'' 
Journal of AHIMA, July-August 2007, pages 44-50.
---------------------------------------------------------------------------

    Comment: One commenter stated that the ICD-9-CM Official Guidelines 
for Coding and Reporting and the American Hospital Association's Coding 
Clinic for ICD 9-CM provide official industry guidance on complete, 
accurate ICD-9-CM coding, without regard to the impact of code 
assignment on reimbursement. AHIMA's Standards of Ethical Coding 
stipulate that ``coding professionals are expected to support the 
importance of accurate, complete, and consistent coding practices for 
the production of quality healthcare data.'' The commenter believed 
that all diagnoses and procedures should be coded and reported in 
accordance with the official coding rules and guidelines and does not 
advocate the practice of only coding enough diagnoses and procedures 
for correct DRG assignment. The commenter stated that increased 
attention to the quality of coding and documentation as a result of the 
role coding plays in DRG assignment has led to much-improved coding 
practices since the adoption of the IPPS in 1983. The commenter further 
noted that hospitals code more completely so CMS has more complete data 
to make DRG modifications that would recognize the resource-
intensiveness of a diagnosis or procedure.
    Response: We believe the commenter's assertion supports our point 
that improvements in documentation and coding occurred as a result of 
the payment incentives provided by the IPPS. That is, the commenter is 
saying that the adoption of the original IPPS in 1983 led hospitals to 
improve documentation and coding practices because ``of the role coding 
plays in DRG assignment.'' The commenter believed that MS-DRGs will not 
lead to changes in documentation and coding practices and cites--among 
other sources--AHIMA's Standards of Ethical Coding. AHIMA is a 
professional association representing more than 51,000 health 
information professionals who work throughout the healthcare industry 
whose work is closely engaged with the diagnosis and procedure 
classification systems that serve to create the DRGs. The article cited 
above from the July-August issue of the Journal of AHIMA provided 
documented examples of how hospitals can change coding practices to 
maximize payments. Thus, there is an

[[Page 47183]]

assertion in this comment that official coding rules and guidelines 
require all diagnoses and procedures to be reported on the claim 
minimizing opportunities for changes in documentation and coding to 
increase case mix. However, AHIMA's own professional journal provides 
strong evidence of opportunities that exist for improvements in coding 
to increase payment. As we stated previously and suggested by the 
article in the Journal of AHIMA, we believe that payment incentives 
lead hospital staff to carefully examine documentation and coding 
practices, work with physicians to improve the precision of clinical 
documentation in order to make subsequent changes in coding.
    Comment: A number of commenters requested that CMS not make the 
documentation and coding adjustment until hospitals have had experience 
with the MS-DRGs. Once the MS-DRGs are fully implemented, the 
commenters indicated that CMS can investigate whether payments have 
increased due to coding rather than the severity of patients and 
determine if an adjustment is necessary. Several commenters stated that 
CMS is not required to make a prospective adjustment to IPPS rates to 
account for improvements in documentation and coding and should not do 
so without an understanding of whether there will even be coding 
changes in the first few years of the refined system. Another commenter 
stated that CMS should retrospectively determine the national rate 
reduction to offset increases in case-mix from improvements in 
documentation and coding even though the reduction would be made to 
future rates and would not account for potential increases in payment 
that would occur until the adjustment is made. The commenter indicated 
that section 1886(d)(3)(A)(vi) of the Act authorizes just such an 
adjustment and it is the only way to ensure that the level of the 
reduction is accurate. All of these commenters argued that CMS can 
always correct for additional payments made as a result of coding 
changes in a later year when there is sufficient evidence and an 
understanding of the magnitude.
    One commenter suggested that CMS defer (but not eliminate) 
adjustments for improvements in documentation and coding. This 
commenter suggested that CMS make the adjustment at a later time when 
there is actual data suggesting how much improvements in documentation 
have increased case mix but that we consider a ``stop loss'' if initial 
coding changes appear to far exceed the current 4.8 percent estimate. 
The commenter indicated that CMS should encourage facilities to improve 
their documentation and coding accuracy sooner (that is, prior to 
adjusting for documentation and coding), and not do any MCC/CC 
consolidations until after coding improvements have occurred (that is, 
have 3 severity levels for all DRGs).
    Another commenter noted that RAND's evaluation of alternative 
severity DRG systems included an assessment of how coding behaviors are 
expected to vary under each system. However, RAND did not evaluate the 
MS-DRGs and further noted that it was not able to empirically assess 
the relative risk the alternative severity-adjusted systems pose for 
case mix increases attributable to coding improvement without having 
the opportunity to observe actual changes in coding behavior when a DRG 
system is used for payment. The commenter did not believe any payment 
adjustment to account for case mix increases, which are attributable to 
coding improvements, should be made until CMS has conducted appropriate 
research to determine the extent to which improvements in coding 
becomes an issue under the proposed MS-DRG system. While the design of 
the MS-DRG system may encourage an increased level of coding 
specificity, the commenter stated that it is unknown what effect, if 
any, this might have on the CMI.
    Response: RAND did not repeat the analysis of the potential for 
documentation and coding improvements to increase case mix using the 
MS-DRGs because it only worked with FY 2005 data to evaluate them. The 
RAND report refers readers to the analysis CMS did of the likely impact 
of documentation and coding improvements on case mix using the MS-
DRGs.\18\
---------------------------------------------------------------------------

    \18\ Wynn, Barbara O., Beckett, Megan, et al., ``Evaluation of 
Severity Adjusted DRG System: Draft Interim Report,'' RAND HEALTH, 
August, 2007, Addendum, page 27.
---------------------------------------------------------------------------

    With respect to delaying making any adjustments for documentation 
and coding, the commenters are correct that section 1886(d)(3)(A)(vi) 
of the Act gives the Secretary authority to revisit adjustments to the 
standardized amounts for changes in coding or classification of 
discharges that were based on estimates in a future year. We also note 
that section 1886(d)(4)(C) of the Act requires that ``changes in 
classifications or weighting factors'' not increase or decrease 
aggregate inpatient hospital payments. We believe that Congress has 
expressed its clear preference that all changes to DRG 
reclassifications be budget neutral. Substantial evidence indicates 
that, unless we make an adjustment to account for improvements in 
documentation and coding, aggregate payments under the IPPS will 
increase when we adopt MS-DRGs as a result of these improvements in 
documentation and coding. Further, as discussed above, the independent 
Office of the Actuary validated the -1.2 percent adjustment to the 
standardized amount to ensure that improvements in documentation and 
coding do not increase case-mix and IPPS payments.
    In addition, by revisiting the adjustment at a later date when we 
have actual data, we can ensure that the standardized amounts are 
permanently set at the level they otherwise would have been had the 
increase in case mix due to improvements in documentation and coding 
been known. That is, any overestimate or underestimate of the 
adjustment for improvements in documentation would not be permanently 
embedded in the IPPS standardized amount for subsequent years. While 
any differences between projected and actual data could result in 
higher or lower payments to hospitals for the intervening years, MedPAC 
believes that CMS should provide an adjustment that lies somewhere in 
the middle of its own estimate of 2.0 percent and CMS' estimate of 4.8 
percent. In its comments, MedPAC recommended that CMS should adopt an 
adjustment for improvements in documentation and coding between 1.6 and 
1.8 percent per year that would ``put both Medicare and the hospital 
industry at some risk that the actual value will turn out to be higher 
or lower than the adjustment that is applied.'' \19\
---------------------------------------------------------------------------

    \19\ Medicare Payment Advisory Commission: Letter to Acting 
Administrator Leslie Norwalk, June 11, 2007, page 13.
---------------------------------------------------------------------------

    Comment: Several commenters agreed with RAND's assertion that the 
magnitude of coding improvement is likely to vary across hospitals, 
depending on how strong their current coding practices are and the 
resources they are able to devote to improving them. One commenter 
stated that the hospitals that already use the more specific codes and 
those with a low proportion of cases in split DRGs would receive fewer, 
if any, overpayments because their case mix indices would not increase 
as much, or at all. The commenter stated that New York hospitals, in 
particular, would have less opportunity for coding improvement than 
other hospitals because the union of the Medicare CC list and the New

[[Page 47184]]

York State CC list has 279 more codes than the Medicare CC list alone. 
Thus, moving from the union of the CC list to the revised CC list would 
add only 1,298 codes, 279 fewer codes than in the rest of the country. 
Furthermore, New York hospitals are well-practiced in using specific 
codes because the New York State AP-DRG grouper differentiates between 
CCs and major CCs, as the MS-DRG grouper would do. This commenter and 
others that cited the RAND study agree that CMS' practice of making an 
across-the-board adjustment to PPS payments to address case mix 
increases attributable to coding improvements raises an equity issue 
that CMS needs to consider. The adjustment to the standardized amount 
for documentation and coding for hospitals that have already improved 
coding would result in significant payment losses according to the 
commenter rather than offsetting higher case mix indices. The commenter 
stated that these changes are not uniform, creating unintended 
distributional impacts. The commenter stated that the process to make 
adjustments for documentation and coding is an across the board 
adjustment to the standardized amount, while actual changes will vary 
widely. This will create unintended distributional impacts across 
patient types, providers, and states that will in turn, according to 
the commenter, create push-back in providers, states, Congress, and 
potentially the courts.
    One of these commenters acknowledged that CMS may not have the 
option to recoup overpayments on a hospital-specific basis, as is done 
in New York. The commenter suspected that the proposed documentation 
and coding adjustment is too high because hospitals in other states--
particularly New York--have more experience with secondary diagnosis 
coding than the Maryland hospitals had before their change to APR DRGs. 
Therefore, hospitals in other states probably have less opportunity to 
generate documentation and coding improvements that increase case mix.
    Response: We agree that completeness of hospital coding practices 
may well vary across hospitals. Although we recognize this variability, 
we believe there will be potential for coding improvements to increase 
case mix for all hospitals. For instance, as noted above, a hospital 
can change the order of a principal and secondary diagnosis for closely 
related conditions to affect payment. The selection of a principal 
diagnosis that was previously coded as secondary can increase hospital 
payment. This type of potential coding change to increase case mix 
could be available to all hospitals irrespective of whether or not they 
maximized coding in the past. As noted above, a commenter examined data 
from New York State discharges and indicated that if MCC and CC codes 
that are currently provided beyond the original 9 diagnoses on the 
claim that are used by Medicare are moved to the first 9 positions, 
case mix would increase by 0.5 percent. Thus, this comment indicates 
that there will be at least some opportunity to increase case mix 
through improvements in documentation and coding in States like New 
York that have used sophisticated DRG systems in the past for payment. 
Similarly, there are public comments suggesting hospitals can select a 
specified condition in place of an unspecified one to increase payment 
under the MS-DRGs but that this change in documentation and coding 
practice will not be applicable in areas of the country where a DRG 
system is in use that distinguishes between MCCs and CCs. As noted 
above, congestive heart failure, unspecified appears on an average of 
2.3 million cases per year from FY 2004 to FY 2006 or on over 20 
percent of the Medicare claims. In our view, billing of an unspecified 
code on this magnitude of claims suggests potential improvements in 
coding from substituting a specified for an unspecified code are 
widespread. While improvements in documentation and coding that 
increase case mix may be variable, section 1886(d)(3)(A)(vi) of the Act 
only allows us to apply the adjustments that are a result of changes in 
the coding or classification of discharges that do not reflect real 
changes in case mix to the standardized amounts.
    Comment: Several commenters indicated that there should be a 
transition to the MS-DRGs. A number of commenters supported a 4-year 
transition period for implementing the MS-DRGs. The commenters stated 
that such a transition would allow hospitals the opportunity to educate 
their employees and physicians to assure proper, accurate coding, along 
with allocation of required resources through their budgetary process. 
The commenters recommended that FY 2008 be used to prepare for and test 
the MS-DRGs. In FY 2009 through 2011, the DRG weights would be computed 
as a blend of the MS-DRGs and the current DRGs. These commenters 
believed a 1-year delay would provide hospitals adequate time to 
implement and test the new system and adjust operations and staffing 
for predicted revenues. They also suggested that the 1-year delay would 
provide CMS adequate time to finalize data and a CC list, introduce and 
test software for case classification and payment, and train its fiscal 
agents. It would also allow vendors and State agencies time to 
incorporate such changes into their respective software and information 
systems. Other commenters were concerned that CMS would implement the 
MS-DRGs in FY 2008 and then, as a result of the final RAND report, move 
to another new system for FY 2009. These commenters urged CMS to delay 
the implementation of the MS-DRGs if there was a possibility for 
another completely new system in FY 2009. These commenters stated that 
hospitals will expend a large number of hours educating their coding 
staff about the MS-DRGs so that they can attempt to legitimately 
optimize their payment. Some commenters recommended that CMS implement 
the MS-DRGs effective October 1, 2007, with a 3-year phase-in approach 
of the relative weights.
    One commenter indicated that CMS should phase in the revised CC 
list and MS-DRGs to reduce the amount of documentation and coding 
related overpayments that would be made ``in the first place.'' The 
commenter recommended that the MS-DRGs not be implemented in FY 2008. 
Instead, they recommend that the revised CC list be used with a Version 
25.0 of the current CMS DRGs and allow vendors of the alternative 
severity systems being evaluated by RAND to incorporate this 
information into an updated version of their systems. The commenter 
stated that the updated version of the CMS DRGs using the revised CC 
list would produce a greatly improved DRG GROUPER. The commenter 
recommended a 5-year phase-in during which the old CC list/CMS-DRG 
weights and the new CC list/MS-DRG weights would be blended in the 
following proportions: 80/20 percent in FY 2008, 60/40 percent in FY 
2009, 40/60 percent in FY 2010, 20/80 percent in FY 2011, and 0/100 
percent in FY 2012. The commenter stated that CMS should release the 
MS-DRG grouper software as soon as possible and should also encourage 
vendors to release products as soon as possible that ensure that both 
old and new CCs are listed among the first eight secondary diagnoses, 
as these are the only ones that can be used for payment purposes. With 
respect to the phase-in, the commenter believed it is prudent to begin 
to use the new CC list/MS-DRGs in FY 2008 so that hospitals are 
compelled as soon as possible (1) to improve their coding, and (2) to 
educate

[[Page 47185]]

their physicians about complete documentation. However, the commenter 
would not want the new DRG weights to represent a majority of the blend 
until they can be based on the first year of corrected data. The FY 
2010 weights would be based on the FY 2008 cases, so they would reflect 
the first year's coding corrections and would presumably be more 
accurate. Because it can take several years for hospitals and 
physicians to adjust to new documentation and coding requirements, 
continuing blended payments in FY 2011 would be important to minimize 
documentation and coding related overpayments, according to the 
commenter.
    The commenter stated that the goal is to minimize the aggregate 
level of documentation and coding related overpayments so that 
hospitals not generating increases in case mix are not unfairly 
penalized by an across-the-board reduction. If overpayments could be 
recouped on a hospital-specific basis, the commenter stated that an 
attenuated phase-in would not be necessary. The commenter stated that 
they realized that their recommended phase in would be cumbersome 
because each case would have to be grouped twice to determine the DRG 
assignment under the CMS DRG and MS-DRG GROUPERS. However, the 
commenter believed this is the better policy option since the 
alternative for good-coding hospitals and those with relatively few 
patients in split DRGs would be to effectively eliminate the IPPS 
update for 2 years.
    Response: We received many comments in support of the MS-DRGs, 
particularly because they are so structurally similar to the current 
DRGs, and therefore, we believe that a full year's delay is 
unwarranted. While the MS-DRGs include some consolidations of base 
DRGs, the major changes from the current DRGs simply involve adding 
severity levels to many of the new MS-DRGs. The move to MS-DRGs will 
not necessitate additional data elements or changes in reporting 
practices. Providers will be submitting the same clinical information 
on their claims. In our view, the issues in the comments concerning the 
need to examine the new system in detail do not justify delaying the 
move to this new system. We have provided detailed information in both 
the proposed and final rule as well as on our Web site on the formation 
of the MS-DRGs. We believe the significant benefits of the new system 
outweigh concerns by the provider community that they have not had time 
to analyze the details of the new system. We are confident that once 
they start working with the new system, they will find it simple to 
understand and far better at identifying and paying for more costly and 
severely ill patients. Accordingly, we do not believe that extensive 
preparation for implementation of the MS DRGs is necessary, and 
therefore, we are not delaying adoption of the MS-DRGs until FY 2009.
    MedPAC also carefully evaluated the options of implementing MS-DRGs 
in FY 2008 versus deferring the implementation until FY 2009 and agrees 
with our assessment that there is not sufficient cause to delay the 
proposed adoption of MS-DRGs beyond FY 2008. While MedPAC agreed that 
MS-DRGs should be implemented in FY 2008, it also stated that the 
transition should coincide with the transition to cost-based weights--
that is, implement the MS-DRGs over a 2-year period beginning in FY 
2008.\20\ We agree with MedPAC that the MS-DRGs should be implemented 
over a 2-year transition period that coincides with the phase-in of 
cost-based weights. Therefore, we will implement MS-DRGs beginning in 
FY 2008 over a 2-year transition period where the DRG relative weights 
will be a blend of 50 percent each of the CMS DRG and MS DRG weights. 
We have provided more detail in section II.D.2. of the preamble of this 
final rule with comment period about the DRG relative weight 
calculations over this 2-year transition period.
---------------------------------------------------------------------------

    \20\ Medicare Payment Advisory Commission: Letter to Acting 
Administrator Leslie Norwalk, June 11, 2007, page 10.
---------------------------------------------------------------------------

    There appears to be a suggestion in many of the public comments 
both here and above that delaying implementation of MS-DRGs will allow 
the improvements in documentation and coding to occur before they have 
any financial impact on the Medicare program because hospitals would 
know and be encouraged to code using the incentives provided under the 
MS-DRGs, while Medicare would continue to be using the current CMS DRGs 
for payment. As discussed, one comment suggested that we could lessen 
the need for the documentation and coding adjustment by minimizing the 
financial impact of improvements in documentation and coding through a 
long transition period (5 years). We believe hospitals will not improve 
documentation and coding consistent with the incentives provided under 
the MS-DRGs unless they have a financial incentive to do so. As 
indicated in one public comment, ``Documentation and numbers of 
diagnosis codes is inevitably incomplete due to time pressures for 
completion of `paperwork' and limitation of computer systems to capture 
this information. If an item is not used and/or not important, it is 
less well documented.''
    If there is a delay in MS-DRGs, the coding incentives that would 
come with its adoption would not be present and, therefore, likely 
would not occur. While we appreciate the suggestion for adopting a long 
transition period to provide an incentive to improve coding but 
minimize its financial impact on Medicare, such an idea may well just 
extend the period of time that documentation and coding improvements 
occur while delaying the improvements in recognition of severity of 
illness that would result from adopting MS DRGs. Again, we do not 
believe that either delaying or adopting MS-DRGs over a long period of 
time will reduce the need to apply a documentation and coding 
adjustment of the magnitude we estimated. We believe that adopting 
either of the ideas would only result in us needing to delay or extend 
the period of time over which the documentation and coding adjustment 
is applied.
    Comment: MedPAC indicated that case-mix might increase more or less 
than the 4.8 percent we estimated from Maryland's experience. MedPAC 
recommended an adjustment between 1.6 and 1.8 percent a year for 2 
years. This adjustment is based on a comparison between the MS-DRGs in 
Maryland and nationally (2.0 percent over 2 years) increased:
    <bullet> To reflect their view that many hospitals do not respond 
quickly to improve reporting after major changes in the DRG 
definitions; and
    <bullet> The estimated change in case-mix for hospitals in the rest 
of the nation may reflect some improvements in documentation and coding 
in response to changes in the DRG definitions that were adopted in 2006 
(such as the refinements to the cardiac care DRGs among others).
    MedPAC recommended that we apply an adjustment that is somewhere in 
the middle between their estimate of 2.0 and the CMS figure of 4.8 
percent. According to MedPAC, a middle point in the range of 1.6 to 1.8 
percent per year would put both Medicare and the hospital industry at 
some risk that the actual value will turn out to be higher or lower 
than the adjustment that is applied. If the actual increase due to 
improvements in case-mix reporting turns out to be higher, the Medicare 
program will have paid more than it should have. If the actual increase 
is lower, the hospitals will have been paid less than they should have. 
MedPAC noted that we have already stated a willingness to correct for 
any difference

[[Page 47186]]

between our forecast and the actual increase in case mix due to 
improved coding when data become available in 2009 when we prepare the 
proposed rule for fiscal year 2010. MedPAC further suggested that CMS 
plan on taking coding adjustments for longer than two years. CMS may 
want to adopt a series of adjustments that takes somewhat higher 
adjustments in the first few years of the MS-DRG changes, on the 
assumption that history has shown that previous coding adjustments have 
underestimated the impact of the changes.
    Response: We proposed to adjust the IPPS standardized amounts by -
2.4 percent each year for FYs 2008 and 2009 for improvements in 
documentation and coding that will increase case-mix. As we are 
adopting the MS-DRGs over a 2-year transition period, we do not believe 
that the incentives to improve documentation and coding will be as 
strong in the first year as we previously estimated. Further, as 
suggested above by the evidence when the IPPS was first implemented, 
MedPAC, and other public comments, it can take several years for 
hospitals and physicians to adjust their documentation and coding 
practices in response to payment incentives. For these reasons, we 
believe the documentation and coding adjustment should be applied over 
a period of 3 rather than 2 years. We do not agree with MedPAC that a 
larger adjustment ``should be taken in the first few years of the MS-
DRGs on the assumption that history has shown that previous coding 
adjustments have underestimated the impact of changes.'' Rather, as 
stated above, we believe that the coding incentives during the first 
year of MS-DRGs will be lessened because we are adopting them over a 2-
year transition period. Therefore, we believe a smaller adjustment 
should be applied in the initial year. We continue to believe that our 
analysis justifies a -4.8 percent adjustment for improvements in 
documentation and coding at this time. Therefore, we are applying an 
adjustment of -1.2 percent in this final rule with comment period to 
the IPPS standardized amounts for FY 2008 and based on current 
projections will apply adjustments of -1.8 percent each year to the 
IPPS standardized amounts for FYs 2009 and 2010.
    Consistent with the statute, we will compare the actual increase in 
case-mix due to documentation and coding to our projection once we have 
actual data to revise the Actuary's estimate and the adjustment we make 
to the standardized amounts. With these adjustments occurring over 3 
rather than 2 years, we will have information in 2009 as we prepare the 
IPPS rule for FY 2010 to reevaluate how the actual increase in case mix 
compares to our estimate. We may also have partial year information in 
2008 to inform any proposal for FY 2009. Therefore, we will consider 
revising the planned adjustments for FY 2009 and FY 2010 if information 
in the Medicare billing data suggests that our projections are either 
too high or low compared to actual experience.
    Based on the Actuary's analysis, using the Secretary's authority 
under section 1886(d)(3)(A)(vi) of the Act to adjust the standardized 
amount to eliminate the effect of changes in coding or classification 
of discharges that do not reflect real changes in case-mix, we are 
reducing the IPPS standardized amount by -1.2 percent for FY 2008. 
Section 1886(d)(3)(A)(vi) of the Act further gives the Secretary 
authority to revisit adjustments to the standardized amounts for 
changes in coding or classification of discharges that were based on 
estimates in a future year. Consistent with the statute, we will 
compare the actual increase in case-mix due to documentation and coding 
to our projection once we have actual data for FY 2008. At that time, 
if necessary, we may make a further adjustment to the standardized 
amounts to account for the difference between our projection and actual 
data.
7. Effect of the MS-DRGs on the Outlier Threshold
    To qualify for outlier payments, a case must have costs greater 
than Medicare's payment rate for the case plus a ``fixed loss'' or cost 
threshold. The statute requires that the Secretary set the cost 
threshold so that outlier payments for any year are projected to be not 
less than 5 percent or more than 6 percent of total operating DRG 
payments plus outlier payments. The Secretary is required by statute to 
reduce the average standardized amount by a factor to account for the 
estimated proportion of total DRG payments made to outlier cases. 
Historically, the Secretary has set the cost threshold so that 5.1 
percent of estimated IPPS payments are paid as outliers. The FY 2007 
cost outlier threshold is $24,485. Therefore, for any given case, a 
hospital's charge adjusted to cost by its hospital-specific CCR must 
exceed Medicare's DRG payment by $24,485 for the case to receive cost 
outlier payments.
    Adoption of the MS-DRGs will have an effect on calculation of the 
outlier threshold. For the proposed rule and this final rule with 
comment period, we analyzed how the outlier threshold would be affected 
by adopting the MS-DRGs. Using FY 2005 MedPAR data, we have simulated 
the effect of the MS-DRGs on the outlier threshold. By increasing the 
number of DRGs from 538 to 745 to better recognize severity of illness, 
the MS-DRGs would be providing increased payment that better recognizes 
complexity and severity of illness for cases that are currently paid as 
outliers. That is, many cases that are high-cost outlier cases under 
the current CMS DRG system would be paid using an MCC DRG under the MS-
DRGs and could potentially be paid as nonoutlier cases. For this 
reason, we expected the FY 2008 outlier threshold to decline from its 
FY 2007 level of $24,485. We proposed an FY 2008 outlier threshold of 
$23,015. In this final rule with comment period, we are establishing an 
FY 2008 outlier threshold of $22,650. In section II.A.4. of the 
Addendum to this final rule with comment period, we provide a more 
detailed explanation of how we determined the final FY 2008 cost 
outlier threshold. We address any comments received on the FY 2008 
proposed outlier threshold in section II.A.4. of the Addendum to this 
final rule with comment period.
8. Effect of the MS-DRGs on the Postacute Care Transfer Policy
    Existing regulations at Sec.  412.4(a) define discharges under the 
IPPS as situations in which a patient is formally released from an 
acute care hospital or dies in the hospital. Section 412.4(b) defines 
transfers from one acute care hospital to another. Section 412.4(c) 
establishes the conditions under which we consider a discharge to be a 
transfer for purposes of our postacute care transfer policy. In 
transfer situations, each transferring hospital is paid a per diem rate 
for each day of the stay, not to exceed the full DRG payment that would 
have been made if the patient had been discharged without being 
transferred.
    The per diem rate paid to a transferring hospital is calculated by 
dividing the full DRG payment by the geometric mean length of stay for 
the DRG. Based on an analysis that showed that the first day of 
hospitalization is the most expensive (60 FR 45804), our policy 
provides for payment that is double the per diem amount for the first 
day (Sec.  412.4(f)(1)). Transfer cases are also eligible for outlier 
payments. The outlier threshold for transfer cases is equal to the 
fixed-loss outlier threshold for nontransfer cases, divided by the 
geometric mean length of stay for the DRG, multiplied by the length of 
stay for the case, plus one day. The purpose of the IPPS postacute care 
transfer payment policy is to avoid providing an incentive for a 
hospital to transfer

[[Page 47187]]

patients to another hospital early in the patients' stay in order to 
minimize costs while still receiving the full DRG payment. The transfer 
policy adjusts the payments to approximate the reduced costs of 
transfer cases.
    Beginning with the FY 2006 IPPS, the regulations at Sec.  412.4 
specified that, effective October 1, 2005, we make a DRG subject to the 
postacute care transfer policy if, based on Version 23.0 of the DRG 
Definitions Manual (FY 2006), using data from the March 2005 update of 
FY 2004 MedPAR file, the DRG meets the following criteria:
    <bullet> The DRG had a geometric mean length of stay of at least 3 
days;
    <bullet> The DRG had at least 2,050 postacute care transfer cases; 
and
    <bullet> At least 5.5 percent of the cases in the DRG were 
discharged to postacute care prior to the geometric mean length of stay 
for the DRG.
    In addition, if the DRG was one of a paired set of DRGs based on 
the presence or absence of a CC or major cardiovascular condition 
(MCV), both paired DRGs would be included if either one met the three 
criteria above.
    If a DRG met the above criteria based on the Version 23.0 DRG 
Definitions Manual and FY 2004 MedPAR data, we made the DRG subject to 
the postacute care transfer policy. We noted in the FY 2006 final rule 
that we would not revise the list of DRGs subject to the postacute care 
transfer policy annually unless we make a change to a specific CMS DRG. 
We established this policy to promote certainty and stability in the 
postacute care transfer payment policy. Annual reviews of the list of 
CMS DRGs subject to the policy would likely lead to great volatility in 
the payment methodology with certain DRGs qualifying for the policy in 
one year, deleted the next year, only to be reinstated the following 
year. However, we noted that, over time, as treatment practices change, 
it was possible that some CMS DRGs that qualified for the policy will 
no longer be discharged with great frequency to postacute care. 
Similarly, we explained that there may be other CMS DRGs that at that 
time had a low rate of discharges to postacute care, but which might 
have very high rates in the future.
    The regulations at Sec.  412.4 further specify that if a DRG did 
not exist in Version 23.0 of the DRG Definitions Manual or a DRG 
included in Version 23.0 of the DRG Definitions Manual is revised, the 
DRG will be a qualifying DRG if it meets the following criteria based 
on the version of the DRG Definitions Manual in use when the new or 
revised DRG first became effective, using the most recent complete year 
of MedPAR data:
    <bullet> The total number of discharges to postacute care in the 
DRG must equal or exceed the 55th percentile for all DRGs; and
    <bullet> The proportion of short-stay discharges to postacute care 
to total discharges in the DRG exceeds the 55th percentile for all 
DRGs. A short-stay discharge is a discharge before the geometric mean 
length of stay for the DRG.
    A DRG also is a qualifying DRG if it is paired with another DRG 
based on the presence or absence of a CC or MCV that meets either of 
the above two criteria.
    The MS-DRGs that we proposed to adopt (and are finalizing in this 
final rule with comment period) for FY 2008 are a significant revision 
to the current CMS DRG system. Because the new MS-DRGs are not 
reflected in Version 23.0 of the DRG Definitions Manual, consistent 
with Sec.  412.4, we proposed to recalculate the 55th percentile 
thresholds in order to determine which MS-DRGs would be subject to the 
postacute care transfer policy. Further, under the MS-DRGs, the 
subdivisions within the base DRGs will be different than those under 
the current CMS DRGs. Unlike the current CMS DRGs, the MS-DRGs are not 
divided based on the presence or absence of a CC or MCV. Rather, the 
MS-DRGs have up to three subdivisions based on: (1) The presence of a 
MCC; (2) the presence of a CC; or (3) the absence of either an MCC or 
CC. Consistent with our existing policy under which both DRGs in a CC/
non-CC pair are qualifying DRGs if one of the pair qualifies, we 
proposed that each MS-DRG that shared a base MS-DRG would be a 
qualifying DRG if one of the MS-DRGs that shared the base DRG 
qualified. We proposed to revise Sec.  412.4(d)(3)(ii) to codify this 
policy.
    Similarly, we believe that the changes to adopt MS-DRGs also 
necessitate a revision to one of the criteria used in Sec.  412.4(f)(5) 
of the regulations to determine whether a DRG meets the criteria for 
payment under the ``special payment methodology.'' Under the special 
payment methodology, a case subject to the special payment methodology 
that is transferred early to a postacute care setting will be paid 50 
percent of the total IPPS payment plus the average per diem for the 
first day of the stay. Fifty percent of the per diem amount will be 
paid for each subsequent day of the stay, up to the full MS-DRG payment 
amount. A CMS DRG is currently subject to the special payment 
methodology if it meets the criteria of Sec.  412.4(f)(5). Section 
412.4(f)(5)(iv) specifies that if a DRG meets the criteria specified 
under Sec.  412.4(f)(5)(i) through (f)(5)(iii), any DRG that is paired 
with it based on the presence or absence of a CC or MCV is also subject 
to the special payment methodology. Given that this criterion would no 
longer be applicable under the MS-DRGs, we proposed to add a new Sec.  
412.4(f)(6) that includes a DRG in the special payment methodology if 
it is part of a CC/non-CC or MCV/non-MCV pair. We proposed to update 
this criterion so that it conforms to the proposed changes to adopt MS-
DRGs for FY 2008. The revision would make an MS-DRG subject to the 
special payment methodology if it shares a base MS-DRG with an MS-DRG 
that meets the criteria for receiving the special payment methodology.
    Comment: One commenter urged CMS to ``suspend application of the 
postacute care transfer policy for one year, until sufficient data is 
available, and then apply the criteria anew to the MS-DRGs.'' As an 
alternative to ceasing the application of the postacute care transfer 
policy for one year, the commenter recommended that CMS limit the 
application of the postacute care transfer policy as much as possible 
until better data are available and not to increase the average length 
of stay for less complicated DRGs over their current levels.
    Response: Under both the CMS DRGs and MS-DRGs, there were two 
criteria for making a DRG subject to the postacute care transfer 
policy. These criteria are:
    <bullet> The total number of discharges to postacute care in the 
DRG must equal or exceed the 55th percentile for all DRGs; and
    <bullet> The proportion of short-stay discharges to postacute care 
to total discharges in the DRG must equal or exceed the 55th percentile 
for all DRGs.
    While these criteria are identical under the CMS DRGs and the MS-
DRGs, we needed to recalculate the 55th percentile thresholds in order 
to determine which MS-DRGs would be subject to the postacute care 
transfer policy to conform the existing policy to the new DRG system. 
Further, we also needed to make a conforming change to our policy that 
a DRG is subject to the postacute care transfer policy if it is one of 
a paired set of DRGs based on the presence or absence of a CC or MCV 
where one of the DRGs in the set meets the numerical criteria specified 
above. As the MS-DRGs have subdivisions based on MCC, CCs and non-CCs 
rather than MCVs, CCs and non-CCs, we needed to amend the regulatory 
text to reflect the nomenclature of the MS-DRG system. Therefore, our 
policy for making a DRG subject to the postacute care transfer policy 
under the MS-DRGs is unchanged other than to make it

[[Page 47188]]

conform to the new DRG system. As our policy is unchanged, we do not 
believe that either suspending or limiting application of the postacute 
care transfer policy under the MS-DRGs is warranted.
    Comment: One commenter opposed CMS' ``proposal to significantly 
expand the list of the DRGs subject to the postacute care transfer 
policy.'' The commenter, a hospital, noted that ``manual processes'' 
would have to take place in order to identify patients meeting the home 
health criteria. Specifically, the commenter stated that, ``hospitals 
[would] either have to contact patients to determine if they have 
received home health services within 3 days after discharge or wait for 
the fiscal intermediary to let the hospital know that a patient 
received home care that was not planned at the time of discharge which 
requires coders to review and correct the disposition and for the 
Business Office to resubmit the claim.''
    Response: We note that we did not propose to change or expand the 
postacute care transfer policy provision in this year's proposed rule. 
Rather, we applied existing post-acute transfer policy to the new MS-
DRG system. Thus, the criteria that would have made a CMS-DRG subject 
to the postacute care transfer policy last year were the same as those 
applied to the MS-DRGs for FY 2008. We note that in FY 2007, 190 CMS 
DRGs of 538 CMS DRGs were subject to the postacute care transfer 
policy, or about 35 percent. For FY 2008, 273 out of 745 MS-DRGs are 
subject to the postacute care transfer policy or about 36 percent. 
Therefore, the proportion of postacute care transfer MS-DRGs subject to 
the policy is very similar to what it was last year under the CMS DRGs. 
Thus, we disagree there has been a ``significant expansion'' of DRGs 
subject to the postacute care transfer policy. Rather, we are simply 
conforming the existing postacute care transfer policy to the new MS-
DRGs.
    In response to the commenter's concern about it being 
administratively burdensome to identify patients who received home 
health care services subsequent to discharge from the acute care 
hospital, we note that, under section 1886(d)(5)(J)(ii)(III) of the 
Act, the term ``qualified discharge'' includes a discharge from an IPPS 
hospital upon which the patient is provided home health services from a 
home health agency if such services relate to the condition or 
diagnosis for which the patient received hospital inpatient services. 
The proposed rule did not make any change to application of the 
postacute care transfer policy in this circumstance. We note that, in 
most instances, patients are discharged from the acute hospital with a 
written plan of care for the provision of home health services, so 
hospitals would usually know if a patient was going to receive home 
health care services at the time of discharge. Additionally, we do not 
expect that the administrative burden of identifying patients 
discharged to home for the provision of home health services within 3 
days will be any greater under the MS-DRG system than it was under the 
CMS DRG system because the proportion of DRGs subject to the postacute 
care transfer policy is very similar under both systems.
    Comment: One commenter stated that it is unreasonable to categorize 
all three MS-DRGs in the same base DRG as subject to the postacute care 
transfer policy if only one of the three meets the criteria. The 
commenter suggested that, for base MS-DRGs where there are three base-
DRGs, two of the three base-DRGs should meet the postacute care 
transfer criteria (on their own) for all of them to be subject to the 
postacute care transfer policy and that if only one meets the criteria, 
none should be subject to the postacute care transfer policy.
    Response: Under the CMS DRG system, some DRGs were paired with 
others (with CC or without CC). Under that system, if one DRG qualified 
for the postacute care transfer policy, we included its paired DRG so 
as not to create an incentive for hospitals not to include any code 
that would identify a complicating or comorbid condition. The same 
logic applies under the MS-DRG system: If one DRG in a set meets the 
postacute care transfer criteria, we believe that it is appropriate to 
include the paired or grouped DRGs so as not to create any coding 
incentives to bypass the postacute care transfer payment. Therefore, we 
disagree with the commenter that it is ``unreasonable'' to include a 
group of MS-DRGs where only one MS-DRG in the group meets the postacute 
care transfer criteria on its own. We also note that we apply the same 
logic to the special-pay MS-DRGs. That is, if an MS-DRG qualifies to 
receive the special payment methodology, any other MS-DRGs that share 
the same base MS-DRG also qualify to receive the special payment 
methodology.
    In this final rule with comment period, we are adopting the 
proposed postacute care transfer policy conforming changes as final.
    In addition, Sec.  412.4(f)(3) states that the postacute care 
transfer policy does not apply to CMS DRG 385 for newborns who die or 
are transferred. We proposed to make a conforming change to this 
paragraph to reflect that this CMS DRG would become MS-DRG 789 
(Neonates, Died or Transferred to Another Acute Care Facility) under 
our proposed DRG changes for FY 2008. We did not receive any comments 
on this proposal and, therefore, are finalizing this conforming change 
as proposed.
    These revisions do not constitute a change to the application of 
the postacute care transfer policy. Therefore, any savings attributed 
to the postacute care transfer policy will be unchanged as a result of 
adopting the MS-DRGs. Consistent with section 1886(d)(4)(C)(iii) of the 
Act, aggregate payments from adoption of the MS-DRGs cannot be greater 
or less than those that would have been made had we not made any DRG 
changes.
    We also proposed and are adopting as final technical changes to 
Sec. Sec.  412.4(f)(5)(i) and (f)(5)(iv) to correct a cross-reference 
and a typographical error, respectively.

E. Refinement of the Relative Weight Calculation

    In the FY 2007 IPPS final rule (71 FR 47882), effective for FY 
2007, we began to implement significant revisions to Medicare's 
inpatient hospital rates by basing the relative weights on hospitals' 
estimated costs rather than on charges. This reform was one of several 
measured steps to improve the accuracy of Medicare's payment for 
inpatient stays that include using costs rather than charges to set the 
relative weights and making refinements to the current CMS-DRGs so they 
better account for the severity of the patient's condition. Prior to FY 
2007, we used hospital charges as a proxy for hospital resource use in 
setting the relative weights. Both MedPAC and CMS have found that the 
limitations of charges as a measure of resource use include the fact 
that hospitals cross-subsidize departmental services in many different 
ways that bear little relation to cost, frequently applying a lower 
charge markup to routine and special care services than to ancillary 
services. In MedPAC's 2005 Report to the Congress on Physician-Owned 
Specialty Hospitals, MedPAC found that hospitals charge much more than 
their costs for some types of services (such as operating room time, 
imaging services and supplies) than others (such as room and board and 
routine nursing care).\21\ Our analysis of the MedPAC report in the FY 
2007 IPPS

[[Page 47189]]

proposed rule (71 FR 24006) produced consistent findings.
---------------------------------------------------------------------------

    \21\ Medicare Payment Advisory Commission:Report to the 
Congress: Physician-Owned Specialty Hospitals, March 2005, p. 26.
---------------------------------------------------------------------------

    In the FY 2007 IPPS proposed rule, we proposed to implement cost-
based weights incorporating aspects of a methodology recommended by 
MedPAC, which we called the hospital-specific relative value cost 
center (HSRVcc) methodology. MedPAC indicated that an HSRVcc 
methodology would reduce the effect of cost differences among hospitals 
that may be present in the national relative weights due to differences 
in case mix adjusted costs. After studying Medicare cost report data, 
we proposed to establish 10 national cost center categories from which 
to compute 10 national CCRs based upon broad hospital accounting 
definitions. We made several important changes to the HSRVcc 
methodology that MedPAC recommended using in its March 2005 Report to 
the Congress on Physician-Owned Specialty Hospitals. We refer readers 
to the FY 2007 IPPS proposed rule (71 FR 24007 through 24011) for an 
explanation and our reasons for the modification to MedPAC's 
methodology. In its public comments on the FY 2007 IPPS proposed rule, 
MedPAC generally agreed with the adaptations we made to its 
methodology. MedPAC further recommended that we expand the number of 
distinct hospital department CCRs being used from 10 to 13, which we 
subsequently adopted in the FY 2007 IPPS final rule.
    We did not finalize the HSRVcc methodology for FY 2007 because of 
concerns raised in the public comments on the FY 2007 IPPS proposed 
rule (71 FR 47882 through 47898). Rather, we adopted a cost-based 
weighting methodology without the hospital-specific relative weight 
feature. In response to a comment from MedPAC, we also expanded the 
number of distinct hospital departments with CCRs from 10 to 13. We 
indicated our intent to study whether to adopt the HSRVcc methodology 
after we had the opportunity to further consider some of the issues 
raised in the public comments. In the interim, we adopted a cost-based 
weighting methodology over a 3-year transition period, substantially 
mitigating the redistributive payment impacts illustrated in the 
proposed rule, while we engaged a contractor to assist us with 
evaluating the HSRVcc methodology.
    Some commenters raised concerns about potential bias in cost-based 
weights due to ``charge compression,'' which is the practice of 
applying a lower percentage markup to higher cost services and a higher 
percentage markup to lower cost services. These commenters were 
concerned that our proposed weighting methodology may undervalue high 
cost items and overvalue low cost items if a single CCR is applied to 
items of widely varying costs in the same cost center. The commenters 
suggested that the HSRVcc methodology would exacerbate the effect of 
charge compression on the final relative weights. One of the commenters 
suggested an analytic technique of using regression analysis to 
identify adjustments that could be made to the CCRs to better account 
for charge compression. We indicated our interest in researching 
whether a rigorous model should allow an adjustment for charge 
compression to the extent that it exists. We engaged a contractor, RTI 
International (RTI), to study several issues with respect to the cost-
based weights, including charge compression, and to review the 
statistical model provided to us by the commenter for adjusting the 
weights to account for it. We discuss RTI's findings in detail below.
    Commenters also suggested that the cost report data used in the 
cost methodology are outdated, not consistent across hospitals, and do 
not account for the costs of newer technologies such as medical 
devices. However, the relationship between costs and charges (not costs 
alone) is the important variable in setting the relative weights under 
this new system. Older cost reports also do not include the hospital's 
higher charges for these same medical devices. Therefore, it cannot be 
known whether the CCR for the more recent technologies will differ from 
those we are using to set the relative weights. The use of national 
average cost center CCRs rather than hospital-specific CCRs may 
mitigate potential inconsistencies in hospital cost reporting. 
Nevertheless, in the FY 2007 IPPS final rule, we agreed that it was 
important to review how hospitals report costs and charges on the cost 
reports and on the Medicare claims and asked RTI to further study this 
issue as well.
    In summary, we proposed to adopt HSRVcc relative weights for FY 
2007 using national average CCRs for 10 hospital departments. Based on 
public comments concerned about charge compression and the accuracy of 
cost reporting, we decided not to finalize the HSRVcc methodology, but 
adopted cost-based weights without the hospital specific feature. In 
response to comments from MedPAC, we expanded the number of hospital 
cost centers used in calculating the national CCRs from 10 to 13. 
Finally, we decided to implement the cost-based weighting methodology 
gradually, by blending the cost-based and charge-based weights over a 
3-year transition period beginning with FY 2007, while we further 
studied many of the issues raised in the public comments. We refer 
readers to the FY 2007 IPPS final rule (71 FR 47882) for more details 
on our final policy for calculating the cost-based DRG relative 
weights.
1. Summary of RTI's Report on Charge Compression
    In August 2006, we awarded a contract to RTI to study the effects 
of charge compression in calculating DRG relative weights. The purpose 
of the study was to develop more accurate estimates of the costs of 
Medicare inpatient hospital stays that can be used in calculating the 
relative weights per DRG. RTI was asked to assess the potential for 
bias in relative weights due to CCR differences within the 13 CCR 
groups used in calculating the cost-based DRG relative weights and to 
develop an analysis plan that explored alternative methods of 
estimating costs with the objective of better aligning the charges and 
costs used in those calculations. RTI was asked to consider methods of 
reducing the variation in CCRs across services within cost centers by:
    <bullet> Modifying existing cost centers and/or creating new 
centers.
    <bullet> Using statistical methods, such as the regression 
adjustment for charge compression. Some commenters on the FY 2007 IPPS 
proposed rule suggested that we use a regression adjustment to account 
for charge compression.
    As part of its contract, RTI convened a Technical Expert Panel 
composed of individuals representing academic institutions, hospital 
associations, medical device manufacturers, and MedPAC. The members of 
the panel met on October 27, 2006, to evaluate RTI's analytic plan, to 
identify other areas that are likely to be affected by compression or 
aggregation problems, and to propose suggestions for adjustments for 
charge compression. We posted RTI's draft interim report on the CMS Web 
site in March 2007. For more information, interested individuals can 
view RTI's report at the following Web site: http://www.cms.hhs.gov/Reports/Reports/itemdetail.asp?itemID=CMS1197292. The report may also 
be viewed on RAND's Web site at http://www.rand.org/pubs/online/health.
    As the first step in its analysis, RTI compared the reported 
Medicare program charge amounts from the cost reports to the total 
Medicare charges summed across all claims filed by providers. Using 
cost and charge data

[[Page 47190]]

from the most recent available Medicare cost reports and inpatient 
claims from IPPS hospitals, RTI was charged with performing an analysis 
to determine how well the MedPAR charges matched the cost report 
charges used to compute CCRs. The accuracy of the DRG cost estimates is 
directly affected by this match because MedPAR charges are multiplied 
by CCRs to estimate cost. RTI found consistent matching of charges from 
the Medicare cost report to charges grouped in the MedPAR claims for 
some cost centers but there appeared to be problems with others. For 
example, RTI found that the data between the cost report and the claims 
matched well for total discharges, days, covered charges, nursing unit 
charges, pharmacy, and laboratory. However, there appeared to be 
inconsistent reporting between the cost reports and the claims data for 
charges in several ancillary departments (medical supplies, operating 
room, cardiology, and radiology). For example, the data suggested that 
hospitals often include costs and charges for devices and other medical 
supplies within the Medicare cost report cost centers for Operating 
Room, Radiology or Cardiology, while other hospitals include them in 
the Medical Supplies cost center.
    RTI found that some charge mismatching results from the way in 
which charges are grouped in the MedPAR file. Examples include the 
intermediate care nursing charges being grouped with intensive care 
nursing charges and electroencephalography (EEG) charges being grouped 
with laboratory charges. RTI suggested that reclassifying intermediate 
care charges from the intensive care unit to the routine cost center 
could address the former problem.
    As the second step in its analysis, RTI reviewed the existing cost 
centers that are combined into the 13 groups used in calculating the 
national average CCRs. RTI identified CCRs with potential aggregation 
problems and considered whether separating the charge groups could 
result in more accurate cost conversion at the DRG level. The analysis 
led RTI to calculate separate CCRs for Emergency Room and Blood and 
Blood Administration, both of which had been included in ``Other 
Services'' in FY 2007.
    During this second step, RTI noted that a variation of charge 
compression is also present in inpatient nursing services because most 
patients are charged a single type of accommodation rate per day that 
is linked to the type of nursing unit (routine, intermediate, or 
intensive), but not to the hours of nursing services given to 
individual patients. Unlike the situation with charge compression in 
ancillary service areas, there are virtually no detailed charge codes 
that can distinguish patient nursing care use. Therefore, any potential 
bias cannot be empirically evaluated or adjustments made without 
additional data.
    Next, RTI examined individual revenue codes within the cost centers 
and used regression analysis to determine whether certain revenue codes 
in the same cost center had significantly different markup rates. Those 
revenue codes include devices, prosthetics, implants within the Medical 
Supplies cost center, IV Solutions within the Drugs cost center, CT 
scanning and MRI within the Radiology cost center, Cardiac 
Catheterization within the Cardiology cost center, and Intermediate 
Care Units within the Routine Nursing Care cost center. Devices, 
prosthetics, and implants within the Medical Supplies cost center have 
a lower markup and, as a result, a higher CCR than the remainder of the 
medical supplies group according to RTI's analysis. Within the Drugs 
CCR, IV Solutions have a much higher markup and much lower CCR than the 
other drugs included in the category. Within the Radiology CCR, CT 
scanning and MRI have higher markups and lower CCRs than the remaining 
radiology services. RTI's results for Cardiac Catheterization and 
Intermediate Care Units were ambiguous due to data problems.
    RTI's analysis also determined the impact of the disaggregated CCRs 
on the relative weights. Differences in CCRs alone do not necessarily 
alter the DRG relative weights. The impact on the relative weights is 
the result of the interaction of CCR differences and DRG differences in 
the proportions of the services with different CCRs. In FY 2007, we 
calculated relative weights using CCRs for 13 hospital departments. The 
RTI analysis suggests expanding the number of distinct hospital 
department CCRs from 13 to 19. Of the additional six CCRs, two would 
result from separating the Emergency Department and Blood (Products and 
Administration) from the residual ``Other Services'' category. Four 
additional CCRs would result from applying a regression method similar 
to a method suggested in last year's public comments to three existing 
categories: supplies, radiology, and drugs. This method, as adapted by 
RTI, used detailed coding of charges to disaggregate hospital cost 
centers and derive separate, predicted alternative CCRs for the 
disaggregated services. RTI's analysis suggests splitting Medical 
Supplies into one CCR for Devices, Implants, and Prosthetics and one 
CCR for Other Supplies; splitting Radiology into one CCR for MRIs, one 
CCR for CT scans, and one CCR for Other Radiology; and splitting Drugs 
into one CCR for IV Solutions and one CCR for Other Drugs.
    RTI's draft report provides the potential impacts of adopting these 
changes to the CCRs. We note that RTI's analysis was based on Version 
24.0 of the CMS DRGs. Because the proposed MS-DRGs were under 
development for the FY 2008 IPPS proposed rule, they were unavailable 
to RTI for their analysis. The results of RTI's analysis may be 
different if applied to the MS-DRGs. However, it seems reasonable to 
believe that the impact of RTI's suggestions will be consistent using 
Version 24.0 of the CMS DRGs and the MS-DRGs, as both systems generally 
use the same base DRGs while applying different subdivisions to 
recognize severity of illness. Of all the adjusted CCRs, the largest 
impact on weights came from accounting for charge compression in 
medical supplies for devices and implants. The impact on weights from 
accounting for CCR differences among drugs was modest. The impact of 
splitting MRI and CT scanning from the radiology CCR was greater than 
the impact of modifying the Drugs CCRs, but less than the impact of 
splitting the Medical supplies group. Separating Emergency Department 
and Blood Products and Administration from the ``Other Services'' 
category would raise the CCR for other services in the group.
    RTI found that disaggregating cost centers may have a mitigating 
effect on the impact of transitioning from charge-based weights to 
cost-based weights. That is, the changes being suggested by RTI will 
generally offset (fully or more than fully in some cases or in part in 
other cases) the impacts of fully implemented cost-based weights that 
we are adopting over the FY 2007-FY 2009 transition period. Thus, RTI's 
analysis suggests that expanding the number of distinct hospital 
department CCRs used to calculate cost-based weights from 13 to 19 will 
generally increase the relative weights for surgical DRGs and decrease 
them for the medical DRGs compared to the fully implemented cost-based 
weights to which we began transitioning in FY 2007.
2. RTI Recommendations
    In its report, RTI provides recommendations for the short term, 
medium term, and long term, to mitigate aggregation bias in the 
calculation of relative weights. We summarize RTI's

[[Page 47191]]

recommendations below and respond to each of them.
a. Short-Term Recommendations
    Most of RTI's short-term recommendations have already been 
described above. The most immediate changes that RTI recommends 
implementing include expanding from 13 distinct hospital department 
CCRs to 19 by:
    <bullet> Disaggregating ``Emergency Room'' and ``Blood and Blood 
Products'' from the ``Other Services'' cost center;
    <bullet> Establishing regression-based estimates as a temporary or 
permanent method for disaggregating the Medical Supplies, Drugs, and 
Radiology cost centers; and
    <bullet> Reclassifying intermediate care charges from the intensive 
care unit cost center to the routine cost center.
    We believe these recommendations have significant potential to 
address issues of charge compression and potential mismatches between 
how costs and charges are reported in the cost reports and on the 
Medicare claims.
    RTI's recommendations show significant promise in the short term 
for addressing issues raised in the public comments on the cost-based 
weights in the FY 2007 IPPS proposed rule. However, in the time 
available for the development of the proposed rule, we were unable to 
investigate how RTI's recommended changes may interact with other 
potential changes to the DRGs and to the method of calculating the DRG 
relative weights. As we noted above, RTI's analysis was done on the 
Version 24.0 of the CMS DRGs and not the MS-DRGs we proposed for FY 
2008. For the proposed rule and this final rule with comment period, we 
were not able to examine the combined impacts of the MS-DRGs and RTI's 
recommendations. In addition, we believe it is also important to 
consider that, in the FY 2007 IPPS final rule (71 FR 47897), we 
anticipated undertaking further analysis of the HSRVcc methodology over 
the next year in conjunction with the research we were to do on charge 
compression. Analysis of the HSRVcc methodology will be part of the 
second phase of the RAND study of alternative DRG systems to be 
completed by September 1, 2007, that has not been completed in time for 
this final rule with comment period. As a result, we have also been 
unable to consider the effects of the HSRVcc methodology together with 
the MS-DRGs and RTI's recommendations. Finally, we note that in order 
to complete the analysis in time for the proposed rule or this final 
rule with comment period, RTI's study used only hospital inpatient 
claims. However, hospital ancillary departments typically include both 
inpatient and outpatient services within the same department and only a 
single CCR covering both inpatient and outpatient services can be 
calculated from Medicare cost reports. Although we believe that 
applying the regression method used by RTI to only inpatient services 
is unlikely to have had much impact for the adjustments recommended by 
RTI, the preferred approach would be to apply the regression method to 
the combined inpatient and outpatient services. The latter approach 
would ensure that any potential CCR adjustments in the IPPS would be 
consistent with potential CCR adjustments in the OPPS. We hope to 
expand their analysis to incorporate outpatient services during the 
coming year.
    Although we did not propose to adopt RTI's recommendations for FY 
2008, we solicited public comments on expanding from 13 CCRs to 19 
CCRs. Again, we noted that RTI's analysis suggests significant 
improvements that could result in the cost-based weights from adopting 
its recommendations to adjust for charge compression. Therefore, we 
also expressed interest in public comments on whether we should proceed 
to adopt the RTI recommended changes for FY 2008 in the absence of a 
detailed analysis of how the relative weights would change if we were 
to address charge compression while simultaneously adopting an HSRVcc 
methodology together with the MS-DRGs. Given the change in the impacts 
that were illustrated in last year's FY 2007 IPPS final rule (71 FR 
47915-47916), going from a hospital-specific to a nonhospital-specific 
cost-weighting methodology, we believe that sequentially adjusting for 
charge compression and later adopting an HSRVcc methodology could 
create the potential for instability in IPPS payments over the next 2 
years (that is, payments for surgical DRGs would increase and payment 
for medical DRGs would decrease if we were to adopt the RTI recommended 
changes for FY 2008, but could potentially reverse direction if we were 
to adopt an HSRVcc methodology for FY 2009). Again, we solicited public 
comments on all of these issues before making a final decision as to 
whether to proceed with the RTI's short-term recommendations in the 
final rule for FY 2008.
    Comment: Many commenters commented on whether we should proceed in 
adopting the recommendations made by RTI in its January 2007 report, 
particularly concerning changes in cost reporting practices and the 
additional, regression-based CCRs. Several commenters focused on 
problems highlighted by RTI with the inconsistent and varying methods 
in which hospitals group their charges in MedPAR and report costs and 
charges on the Medicare cost report, which can result in distortions in 
the DRG weights. Some commenters asserted that mismatching is not 
caused by the failure of hospitals to prepare their cost reports 
correctly, as appeared to be suggested by the RTI study. Other 
commenters noted that RTI recommends the incorporation of edits to 
reject cost reports or require more intensive review by auditors to 
resolve the lack of uniformity in cost reporting. However, the 
commenters believed that such edits or audits will not solve the 
mismatch problem because hospitals' reporting is consistent with the 
cost reporting instructions. The commenters described that, currently, 
cost report instructions included with the CMS Form-339 allow for three 
methods of reporting Medicare charges. The method selected by each 
hospital is specific to its information systems and based on the method 
that most accurately aligns Medicare program charges on Cost Report 
Worksheet D-4 (inpatient) and/or Worksheet D, Part IV (outpatient) with 
the overall cost and charges reported on Worksheets A and C. Many 
hospitals elect to allocate some or all of the Medicare program charges 
from the Medicare Provider Statistical and Reimbursement (PS&R) data to 
various lines in the cost report based on hospital-specific financial 
system needs. Under this scenario, total hospital CCRs are aligned with 
the hospital's program charges, but would not match the charge 
groupings used in MedPAR.
    Instead of increased edits or cost report rejections, the 
commenters believed that hospitals must be educated to report costs and 
charges, particularly for supplies, in a way that is consistent with 
how MedPAR groups charges. The commenters are launching such an 
educational campaign, which would encourage consistent reporting that 
they believe would, in turn, produce consistent groupings of 
departments within the 13 cost center groups that are currently used to 
create the cost-based weights, or any future expansion of the 
categories that may occur. The commenters stated that their educational 
efforts will take time and CMS should recognize that some hospitals 
will be in a better position to adopt certain cost report changes more 
rapidly because the changes may be more expensive and time-consuming 
for some hospitals to adopt relative to

[[Page 47192]]

others. The commenters requested that CMS communicate with its fiscal 
intermediaries/MAC that such action is appropriate and encouraged for 
improvements in Medicare's cost-based weights. The commenters were 
concerned that, without direction from CMS, the fiscal intermediaries/
MAC may not allow hospitals to change how they report costs.
    Although one commenter supported the education of hospitals in 
better cost reporting, this commenter opposed mandating hospitals to 
make these cost reporting changes. One commenter stated that ``it is 
important to note that charge compression results from hospitals' 
markup practices,'' and that the problem would be eliminated if 
hospitals would use a single markup for all items and services included 
within all revenue centers. Another commenter asserted that hospitals 
are not consistent in their cost reporting and the first step should be 
to issue cost report instructions. The next step would be to allocate 
audit resources to the fiscal intermediary/MAC in order to determine 
whether these instructions are properly implemented because reporting 
of costs and charges does have an indirect effect on payments to 
hospitals. Another commenter stated that CMS needs to place more 
emphasis and audit resources toward ensuring that hospitals properly 
complete their cost reports. However, while another commenter supported 
scrutiny and auditing for extreme CCRs, the commenter also appreciated 
that CMS has limited audit resources. One commenter stated that 
adjustments to revenue codes reported on the standard UB-04 claims 
forms may also be appropriate to better match charges on claims forms 
with the charges (and costs) reported on the Medicare cost report. 
Other commenters stated that the costing of the weights should be done 
at the UB revenue code level. Given the variety of ways in which 
hospitals report their costs and charges, it is impossible to make 
assumptions related to revenue codes across all hospitals without the 
assistance of the PS&R crosswalk, which is submitted with the filed 
cost report as an attachment to the CMS-339 form. The commenters noted 
that if CMS is going to continue a transition to cost-based weights, 
hospitals will need time to align their mapping of cost centers into 
departments or cost categories for purposes of cost reporting and 
claims reporting. The accurate costing of claims would be in line with 
the original MedPAC recommendations.
    In light of the cost reporting and MedPAR mismatch problems, the 
commenters did not believe that a temporary, regression-based 
adjustment that does not fix the underlying concerns with cost 
reporting is appropriate. The commenters are concerned that, for the 
sake of expediency, the use of estimates (a regression analysis 
approach), as opposed to efforts to collect accurate data at the 
appropriate cost center level, would be insufficient. In addition, the 
commenters expressed doubt that a regression model can be easily 
validated, as the DRG weights are modified on an annual basis. One 
commenter argued that CMS did not include details of the regression-
based adjustment in the proposed rule and, consequently, the commenter 
could not assess the impact of implementing the adjustment. The 
commenter agreed with CMS' assessment that RTI's adjustments might 
change if they are implemented jointly with MS-DRGs, and if estimated 
using both inpatient and outpatient costs and charges. This commenter, 
along with others, believed that, at the very least, implementation of 
the regression-based CCRs should be delayed, and once short-term 
educational efforts and CMS' long-term cost report evaluation are 
underway, it would be more appropriate to have an informed discussion 
on which cost report changes are needed to alleviate the issue of 
charge compression.
    Response: In the FY 2008 IPPS proposed rule (72 FR 24715), we 
stated that because we did not have sufficient time to investigate how 
RTI's recommended changes might interact with other possible changes to 
the DRGs and the DRG relative weights, and because RTI's regression 
method was only applied to inpatient services and not also outpatient 
services, we decided not to propose implementing RTI's recommendations 
for FY 2008. However, we also stated that, despite these concerns, we 
believe RTI's recommendations have the potential to significantly 
address the issues of charge compression and potential mismatches 
between how costs and charges are reported in the cost reports and on 
the Medicare claims. Therefore, we solicited comments on whether we 
should expand the 13 CCRs to 19 CCRs for FY 2008.
    We have carefully considered all comments, ranging from those 
urging us to adopt all 19 CCRs in FY 2008, to those believing that the 
regression-based CCRs should be delayed for at least a year, if used at 
all. Because of concerns that we and some commenters continue to have 
about premature adoption of the regression-based CCRs without the 
benefit of knowing how they will interact with other DRG changes, and 
the arguments in the comments summarized above concerning cost and 
claims reporting, we have decided to finalize our proposal to not 
implement the four regression-based CCRs for medical supplies and 
devices, IV drugs, and radiology (MRI and CT scans) for FY 2008. 
However, as we explain in more detail in response to comments below, we 
are adopting the two cost report-based CCRs for ``Emergency Room'' and 
``Blood and Blood Products'' for a total of 15 national average CCRs 
for FY 2008. We believe these changes to the relative weight 
methodology do not have the disadvantages that are of concern to the 
commenters. That is, recognizing these additional departments will 
allow us to use information that is already being reported by hospitals 
in their cost reports and adopt some of the changes being recommended 
by RTI without going to a regression-based model at this time.
    Many of the concerns in the comments summarized above related to 
how hospitals' report costs and charges on the cost report and how 
hospitals include charges on their bills for inpatient services or the 
way the charges are grouped in the MedPAR. RTI indicated that more 
precise cost reporting is the best solution to address the issue of 
charge compression in the long term. Many commenters believed that 
rather than rely on increased edits and audits to resolve the lack of 
uniformity in cost reporting, hospitals must be educated to report 
costs and charges in a manner that is consistent with the way in which 
MedPAR groups charge, and the commenters were launching an educational 
campaign accordingly. We agree with the educational initiative of these 
commenters. Participation in these educational initiatives by hospitals 
is voluntary. Hospitals are not required to change how they report 
costs and charges if their current cost reporting practices are 
consistent with rules and regulations and applicable instructions. 
However, to the extent allowed under current regulations and cost 
report instructions, we encourage hospitals to report costs and charges 
consistently with how the data are used to determine relative weights. 
We believe achieving this goal is of mutual benefit to both Medicare 
and hospitals.
    The commenters also suggested that CMS should inform the fiscal 
intermediary/MAC that hospitals may be changing their cost reporting 
and allocation methodologies in response to the educational initiative, 
that such action is encouraged, and that more

[[Page 47193]]

audit resources should be allocated to fiscal intermediaries/MAC to 
ensure that any new cost reporting instructions are being implemented 
properly. First, we intend to notify the fiscal intermediaries/MAC of 
this cost reporting educational initiative subsequent to the issuance 
of this final rule with comment period, and provide both fiscal 
intermediaries/MAC and hospitals with guidance on how to address 
requests for changes in cost reporting practices from hospitals. 
Second, each hospital that wishes to change its cost reporting 
practices must follow the directives at Sec.  413.53(a)(1) of our 
regulations and PRM-1, section 2203, regarding matching the charges to 
the costs reported in each cost center. We recommend that the hospital 
also disclose the changes made in a cover letter with the submission of 
the cost report.
    Commenters submitted suggestions about how MedPAR could be modified 
to further distinguish categories of charges. As we stated in the 
proposed rule, we will consider suggestions for adding additional 
revenue codes to MedPAR in conjunction with other competing priorities 
for our information systems. We cannot create additional revenue codes. 
Requests for new revenue codes on hospital bills have to be made to and 
approved by the National Uniform Billing Committee (NUBC).
    Comment: Some commenters were uncertain whether RTI's 
recommendations to expand certain cost categories through regression 
analysis is the appropriate solution to address the issue of charge 
compression and potential inconsistencies in how hospitals report costs 
and charges. The commenters supported the expansion of categories to 
include CCRs based on cost centers that already exist on the cost 
report, such as emergency department and blood products, and possibly 
others after further examination. Another commenter stated that 
creating a CCR for blood and blood products will reflect more 
accurately the cost of blood and will help ensure future IPPS updates 
will account more adequately for these products. Although one commenter 
understood that CMS has not been able to analyze the effect of 
implementing the regression adjustments with the proposed MS-DRGs, the 
commenter believed that CMS should adopt RTI's adjustment to the CCRs 
for drugs and IV solutions for FY 2008, and subsequently analyze and 
report on the effects of this adjustment on MS-DRGs. Another commenter 
noted that while the RTI regression estimates provide a practical 
short-term approach to address charge compression for drugs, supplies, 
and radiology revenue cost centers, this method does not identify all 
of the charge compression that occurs at each hospital in these revenue 
centers, nor does it address charge compression that may be occurring 
in other revenue centers such as cardiology, or the routine and 
intensive care revenue cost centers where nursing costs per day are 
currently treated as if they were uniform across patient categories.
    Another commenter also asked that CMS remember that the primary use 
of the cost report is to determine a hospital's costs of treating 
Medicare patients. The commenter noted that the cost report is still 
used for cost-based payment for many hospitals, such as CAHs, SCHs, and 
MDHs, and many State Medicaid plans and other payers also rely on data 
from the cost report to determine payment rates. Because of these uses, 
the commenters asked CMS to proceed cautiously with changing the cost 
report to avoid unintended consequences for hospitals where the cost 
report determines a significant portion of current payment. The 
commenter offered its services in reviewing and discussing cost report 
changes that Medicare may propose. Another commenter recommended that 
CMS work with hospital finance experts so the most appropriate and 
accurate instructions are issued, with very specific instructions as to 
where services are to be classified on the cost report and that 
subcategories should be eliminated.
    Another commenter did not support RTI's recommendations for 
revising the cost reports to reduce cost and charge misalignment and to 
create new cost centers because of ``the enormous amount of work 
hospitals would have to perform'' to change internal operations and 
data collection to accommodate the revisions. The commenter expressed 
concern that this would lead to ``rising inefficiency and 
administrative costs.'' This commenter, and others, believed that 
``clear, detailed instructions from CMS'' would be needed to 
differentiate between a ``device,'' ``implant,'' or ``IV solution,'' 
and other ``new nomenclature that distinguishes and separates tens of 
thousands of items and drugs, for instance, implantable spinal screws, 
bandages and bone cement, into specific cost centers'' would be 
necessary.
    Response: As we noted in the proposed rule and in response to 
comments above, we believe that RTI's regression-based CCRs may be a 
promising means for addressing charge compression in the short term. 
However, because we do not yet know how the additional regression-based 
CCRs would interact with the MS-DRGs or with the HSRV methodology, and 
the significant concerns raised by a number of commenters about 
adopting regression-based CCRs, we are not adopting the adjustments to 
address charge compression in the FY 2008 IPPS final rule. We note 
RTI's long-term recommendations suggest addressing charge compression 
through adding new cost centers to the cost report and undertaking 
additional activities such as improvements in how hospitals report 
costs and charges. Thus, we believe that RTI and many of the public 
comments conclude that ultimately improved and more precise cost 
reporting is the best way to minimize charge compression. While we are 
not adopting the regression-based adjustments to address charge 
compression, we believe that the FY 2008 IPPS final rule relative 
weights should take advantage of additional information that is already 
reported on the cost report. Because the cost report currently allows 
for the creation of specific CCRs for Emergency Room and Blood and 
Blood Products, and some commenters expressed explicit support for 
expanding the number of CCRs based on cost centers that already exist 
on the cost report, we have decided to separate Emergency Room costs 
and charges and Blood and Blood Products costs and charges from the 
current ``Other Services'' CCR for the purposes of calculating the 
cost-based portion of the FY 2008 relative weights. That is, in 
accordance with RTI's short-term recommendation, for FY 2008, we are 
adding two additional CCRs to the current list of 13 CCRs, for a total 
of 15 CCRs. We are using line 61 on Worksheets C, Part I and D-4 to 
create the Emergency Room CCR and lines 46 and 47 on Worksheets C, Part 
I and D-4 to create a CCR for Blood and Blood Products. We are 
modifying the table listing the 15 cost center groupings in section 
II.H. of the preamble of this final rule with comment period 
accordingly.
    With respect to the commenters that asked CMS to remember that the 
primary use of the cost report is to determine a hospital's costs of 
treating Medicare patients, we intend to proceed cautiously as the 
commenters suggest. To the extent that the cost report changes that we 
make improve consistency and accuracy of cost reporting, these benefits 
will extend to providers whose payments are based on reasonable costs 
(CAHs) or otherwise use the cost report to determine hospital-specific 
rates (SCHs and MDHs). As we stated above, we intend to work with 
finance and cost report experts in the hospital community if we

[[Page 47194]]

decide to modify the cost report or its instructions to address issues 
with the DRG relative weights. We also understand that hospitals may be 
concerned about the resources that may be required to adapt to 
potential cost report changes. Any changes that would be made to the 
Medicare cost report would be done under the Paperwork Reduction Act 
and, by law, could not be undertaken without considering the burden 
that would be imposed on all hospitals.
    Comment: Some commenters supported making adjustments to address 
charge compression. These commenters noted that charge compression was 
first identified in 2000 and MedPAC and other researchers have also 
recognized this issue. The commenters recommended implementation of a 
regression-based adjustment in the FY 2007 final rule and stated that 
this methodology has been evaluated and validated through RTI's study. 
Many commenters believe that RTI's results provide ample evidence of 
charge compression that justifies the implementation of their 
recommendations for the FY 2008 final rule. Furthermore, commenters 
stated that RTI's regression-based adjustment is appropriate and can be 
implemented immediately without any administrative burdens to the 
hospital. Several commenters emphasized that CMS should make it a 
priority to apply the regression methodology to the Medical supplies 
CCR. These commenters noted that in the proposed rule, CMS stated: ``of 
all the adjusted CCRs, the largest impact on weights came from 
accounting for charge compression in medical supplies for devices and 
implants,'' which demonstrates that a regression approach should be 
applied at least to disaggregate the medical supplies category into one 
CCR for ``Devices and Implants'' and a separate CCR for ``Other 
Supplies.''
    One commenter disagreed with the reasons CMS expressed in the 
proposed rule for delaying implementation of RTI's recommendations, and 
found them to be ``rather insubstantial.'' The commenter did not 
believe that the combined impact of RTI's recommendations and the 
proposed MS-DRGs need to be studied before CMS could proceed with 
implementing the regression-based CCRs. The commenter noted that the 
relative independence of RTI's recommendations from the proposed MS-DRG 
changes was confirmed by a study commissioned by AdvaMed. The commenter 
also stated that the fact that RTI's analysis only included inpatient 
claims is relatively insignificant. The commenter believed that if 
further adjustments need to be made to incorporate outpatient claims 
into the regression estimate next year, they can be done with a fairly 
minor impact. This commenter, and others, urged CMS to implement a 
regression that uses both inpatient and outpatient claims when making 
an adjustment for charge compression for the CY 2008 OPPS, and use the 
same regression in subsequent years for both the IPPS and OPPS.
    Another commenter stated that, although it understood that CMS 
wishes to understand the various interactions of regression-based CCRs 
with other aspects of the IPPS, the effect of charge compression is 
``demonstrable and measurable'' and should be implemented in FY 2008 
for the ``sake of payment accuracy.'' Another commenter stated that 
CMS' concern about the interaction between addressing charge 
compression and other proposed changes appeared ``disingenuous, as CMS 
is proposing so many changes that the interaction of the various 
components cannot be estimated.'' The commenter also questioned CMS' 
hesitation to make changes to the cost report to accommodate RTI's 
recommendation due to limited information system resources, time 
constraints, and inconvenience. The commenter asserted that ``hospitals 
find the defense of scarce resources, compressed implementation lead 
times and cost justification vis-a-vis outcomes an interesting option 
for CMS given the fact that it is manifestly unavailable to hospitals 
who have similar issues.''
    Response: We disagree with the notion of the commenter that found 
us to be ``disingenuous'' because the ``interaction of various 
components [of the IPPS] cannot be estimated.'' We refer the commenter 
to the payment impact section of the IPPS proposed rule (72 FR 25119) 
and this final rule with comment period as well as the FY 2007 IPPS 
proposed rule (71 FR 24025) where we simulate the interaction of a 
number of different payment reforms including the adoption of cost-
based weights, severity DRGs, and other changes. We note that for some 
categories of hospitals, the impact of adopting MS-DRGs is significant. 
The RTI work suggests that further changes to the relative weights will 
also be significant and potentially result in additional 
redistributions of Medicare payment. In our view, the ``interactions of 
various components'' can be determined and before we adopt potential 
policy options in a final rule, the public should be fully informed on 
the potential impacts. As we discussed in the FY 2008 proposed rule, we 
have concerns about implementing regression-based CCRs in the final 
rule without specifically proposing them because of concerns about how 
these changes would interact with the transition to MS-DRGs, the 
calculation of cost-based relative weights, and possibly the HSRV 
method.
    Despite the commenters' support for the regression-based CCRs, we 
are still concerned about the accuracy of using regression-based 
estimates to determine relative weights rather than the Medicare cost 
report. Many public commenters, including several national hospital 
associations, shared these same concerns. However, we believe that more 
specific CCRs will improve payment accuracy for several DRGs. 
Therefore, as we stated above, we are implementing RTI's recommendation 
to expand the current 13 CCRs to 15 CCRs without the use of a 
regression-based adjustment.
    In the proposed rule, we indicated there was insufficient time to 
assess how RTI's recommendations may interact with other potential 
changes to the DRGs and to the method of calculating the DRG relative 
weights. We noted that RTI's study examined charge compression within 
Version 24.0 of the CMS DRGs, and we could not examine their 
interactive effects with the MS-DRGs and be able to timely publish the 
FY 2008 proposed rule. For this reason, we requested public comment on 
whether to adopt these changes in the final rule without having fully 
analyzed them for the proposed rule. While there was strong support for 
adopting the regression-based charge adjustments in these comments, 
many other commenters believed that we should provide the public with 
modeled payment impacts and an opportunity to comment before 
implementing regression-based CCRs.
    We are also continuing to consider whether to adopt an HSRV payment 
methodology for FY 2009. We anticipate undertaking further analysis of 
the HSRV methodology and would like to incorporate RTI's 
recommendations into that analysis. Although its evaluation of 
alternative severity DRG systems is complete, we are currently working 
with RAND to study the HSRV methodology. Furthermore, we continue to 
believe that adjusting for charge compression and later adopting the 
HSRV methodology could create payment instability over the next 2 years 
and it would be preferable to consider simultaneously adopting these 
changes.
    Finally, if we were to adopt adjustments for charge compression, 
the preferred approach would be to apply

[[Page 47195]]

the regression method to the combined inpatient and outpatient 
services. The RTI report discussed the notion that separating services 
that are generally delivered in outpatient settings might improve the 
accuracy of CCRs for inpatient services, and these areas include 
therapeutic radiology, nuclear medicine, chemotherapy, 
electroconvulsive therapy and outpatient surgery. RTI noted that while 
these charges are not significant under the IPPS, aggregation bias may 
be present in these outpatient services which would affect the overall 
department CCR. Therefore, we will consider expanding our analysis to 
include outpatient services.
    Comment: One commenter urged CMS to separately distinguish 
intermediate (step-down) level nursing care costs. Another commenter 
argued that it is illogical that nursing costs are reflected in the 
relative weights only through flat room and board charges, given that 
nursing care is a variable, rather than a fixed cost. The commenter 
asserted that, as a result, a significant amount of money is being 
misallocated across hospitals for required nursing care. The commenter 
urged CMS to give serious consideration to the RTI report's 
recommendation to establish study groups and research options for 
improving patient-level charging within nursing units, as the outcomes 
could improve precision in relative resource weights without adding 
substantial administrative costs to either Medicare or to hospitals. 
Specifically, the commenter strongly supported the creation of a 
separate direct and indirect cost center at each hospital and the 
inclusion of these data in the annual Medicare cost report, the 
reporting and collection of nursing intensity data, and adjustment of 
the Medicare payment for severity of illness by modifying the proposed 
APR DRG severity adjustment formula to incorporate nursing intensity 
and cost within each diagnosis and severity category. The commenter 
also mentioned the New York State Medicaid model, which was the first 
prospective payment system to recognize and reimburse for relative 
nursing resource consumption levels among DRGs through the use of 
Nursing Intensity Weights (NIWs). The NIWs, which were developed by an 
expert panel, have been reevaluated and updated periodically to 
maintain consistency with changes in the DRG definitions. The commenter 
recommended that, because this program has been successfully 
implemented in a large state for a number of years, a Medicare 
demonstration project based on this model should be launched.
    Response: The commenters' raise interesting concerns related to 
nursing costs that are variable but are reflected in the DRG weights 
only as fixed costs through flat room and board charges. There are 
currently no detailed charge codes that can be used to distinguish the 
intensity in nursing services provided by type of patient. In its 
report, RTI noted ``because intensity of nursing is likely correlated 
with DRG assignment, this could be a significant source of bias in DRG 
weights.'' Particularly because nursing comprises such a significant 
portion of hospital costs and charges, we agree that this issue should 
be further studied. We are interested in knowing whether the public has 
any ideas for how the relative weight methodology can systematically 
recognize and reimburse for differences in nursing resource consumption 
provided across hospital inpatients. We will consider whether we should 
study the possibility of using NIWs to recognize nursing intensity in 
the DRG relative weights.
    Comment: Commenters supported adopting the regression CCRs to 
alleviate charge compression, but some commenters were concerned that 
the application of this adjustment methodology to capital intensive 
radiology services is premature and requires additional analysis. The 
commenters noted that the RTI report found that within the Radiology 
CCR, CT scanning and MRI have higher markups and lower CCRs than the 
remaining radiology services. Implementing RTI's recommendation to 
apply a regression method to split Radiology into one CCR each for 
MRIs, CT scans and Other Radiology could potentially result in lower 
CCRs for the CT and MRI categories. One commenter cited an analysis 
conducted by Direct Research, LLC, that found that the majority of 
hospitals do not allocate the capital costs of MRI and CT scan machines 
to the radiology cost center. Rather, the capital costs could be 
allocated more broadly across hospital services on a square footage 
basis. However, the commenter noted that RTI's analysis for radiology 
services assumes a detailed capital allocation for these services that 
results in differential CCRs found in MRIs and CT scans, which the 
commenter suggested is actually not found in the data. Therefore, the 
commenters requested that the regression-based CCRs for radiology not 
be adopted at this time.
    Response: We appreciate the comment on the limitations of the 
regression-based CCR on radiology. This is another example of how 
changes to cost reporting can potentially improve the accuracy of CCRs 
for radiology and other departments. In our view, the commenter raises 
another issue that requires additional analysis before we adopt 
regression-based adjustments to address charge compression.
    Comment: One comment addressed our proposal to move cost report 
line 54 for EEG out of the Cardiology cost center group into the 
Laboratory cost center group. The commenter noted that where providers 
elect to report EEG separately on line 54, this seems appropriate. 
However, some providers combine EEG with EKG on line 53 (usually 
because the EEG services are purchased as outside services and not a 
separate cost center for the hospital). In those instances, moving only 
the EEG costs would be impossible. The commenter noted that CMS did not 
indicate what portion of providers separately report EEG services on 
line 54, but the commenter was concerned that there will be continued 
mismatching under either grouping. The commenter encouraged CMS to 
consider expanding the MedPAR database to include separate fields for 
all revenue codes so that detailed analyses and accurate matching of 
costs and charges can be performed. The commenter also concurred with 
CMS' recommendation to move radioisotope costs to the radiology 
services grouping and out of ``other services.''
    Response: We responded earlier that suggestions for adding 
additional revenue codes to MedPAR will be considered in conjunction 
with other competing priorities for our information systems. In the FY 
2008 proposed rule, we decided to move the costs for cases involving 
EEG from the Cardiology cost center group to the Laboratory Cost center 
group to maintain consistency with their corresponding EEG MedPAR 
claims, which are categorized under Laboratory charges. Although the 
commenter indicated that hospitals may be combining EEG costs with EKG 
costs on line 53 instead of reporting it as a separate cost on line 54, 
we believe the MedPAR is clear in categorizing EEG claims under revenue 
codes 0740 and 0749, and therefore, costs for EEG should be reported on 
line 54 of the cost report as well. For this reason, we are finalizing 
our proposal to move the costs for cases involving EEG from the 
Cardiology cost center group to the Laboratory Cost center for purposes 
of calculating the DRG relative weights. As described in the FY 2008 
IPPS proposed rule, we will also calculate the DRG relative weights for 
FY 2008 by moving radioisotype costs from the Other

[[Page 47196]]

Services CCR to the Radiology Services CCR.
    Comment: One commenter was concerned that hospitals do not have 
consistent charging and billing practices on an inpatient and 
outpatient basis for the administration of medications by injection 
and/or infusion at the bedside.
    Response: We did not propose any changes on this issue. However, we 
will consider this issue as we research potential improvements that can 
be made to how hospitals report costs and charges.
    Comment: One commenter stated that it believed it is important for 
CMS to explicitly recognize the ``limitations'' of the cost-based 
weighting methodology and its applicability to non-Medicare patients 
because this is a ``major precedent setting change for the entire 
hospital field.'' The commenter stated that in studies that it 
conducted, it found that the use of departmental CCRs presents a bias 
in that the higher unit costs of services provided to children that are 
labor intensive in terms of nursing and respiratory therapy are not 
reflected in the department-wide CCRs. The commenter requested that, at 
a minimum, CMS recognize in the final rule that there are cost issues 
in the Medicare CCR methodology that have implications for non-Medicare 
patient populations.
    Response: The cost-based relative weights were developed solely 
using Medicare data. We do not have non-Medicare data that can be used 
to set DRG relative weights. For this reason, we are concerned that 
non-Medicare payers may be using our payment systems and rates without 
making refinements to address the needs of their own populations. As 
stated earlier, we encourage non-Medicare payers to adapt the MS-DRGs 
and the relative weight methodology to better serve their needs.
    Among its other short-term recommendations, RTI also suggested that 
we incorporate edits to reject or require more intensive review of cost 
reports from hospitals with extreme CCRs. This action would reduce the 
number of hospitals with excluded data in the national CCR 
computations, and would also improve the accuracy of all departmental 
CCRs within problem cost reports by forcing hospitals to review and 
correct the assignment of costs and charges before the cost report is 
filed. Although we do not have a substantive disagreement with the 
recommendation, we generally focus our audit resources on areas in 
which cost report information directly affects payments to individual 
providers.
    RTI further suggested revising cost report instructions to reduce 
cost and charge mismatching and program charge misalignment in its 
short-term recommendations. Although RTI suggests such an action could 
be immediately effective for correcting the reporting of costs and 
charges for medical supply items that are now distributed across 
multiple cost centers, we note that changes to improve cost reporting 
now will not become part of the relative weights for several years 
because of lags between the submission of hospital reports and our 
ability to use them in setting the relative weights. Currently, we 
expect there will continue to be a 3-year lag between a hospital's cost 
report fiscal year and the year it is used to set the relative weights. 
Thus, even if it were possible to issue instructions immediately 
beginning for FY 2008, revised reporting would not affect the relative 
weights until at least FY 2011. Nevertheless, we agree with this 
recommendation, and in the proposed rule, we welcomed public input on 
potential changes to cost reporting instructions to improve consistency 
between how charges are reported on cost reports and in the Medicare 
claims. We indicated that we would consider these changes to the cost 
reporting instructions as we consider further changes to the cost 
report below.
    In the summary of the comments above, we stated that some 
commenters believed that RTI's recommendation to incoporate edits to 
reject cost reports or require more intensive audits will not solve the 
mismatch problem because hospitals' reporting is consistent with cost 
reporting instructions. The commenters instead recommended that 
hospitals be educated to report costs and charges in a manner that is 
consistent with how MedPAR groups charges. However, other commenters 
supported more intensive auditiing of cost reports. In response to 
these comments, we stated above that we agree with the initiative to 
educate hospitals to improve cost reporting and that we intend to 
inform the fiscal intermediaries/MAC of this educational initiative. We 
also stated that we intend to provide the fiscal intermediaries/MAC of 
this educational initiative. We also stated that we intend to provide 
fiscal intermediaries/MAC and hospitals with guidance on how to address 
requests for changes in cost reporting practices from hospitals.
    Comment: Some commenters supported the use of the Standard Analytic 
File (SAF) to calculate CCRs, as used by RTI in its study, as the SAF 
provides more detailed charge data on supplies, drugs and radiology 
services, which would improve the payment accuracy for those revenue 
centers with significant charges.
    Response: We appreciate the comment on the use of the SAF to 
calculate national CCRs. The RTI study used the SAF to extract detailed 
charge information for selected revenue codes with potential 
aggregation bias and used this information in the creation of the 
synthetic CCRs. However, because we are not expanding the CCRs using 
regression adjustments for FY 2008, it is not necessary to use the SAF 
to compute the relative weights in this final rule with comment period. 
Rather, we are using the FY 2006 MedPAR file and FY 2005 hospital cost 
reports to calculate the national CCRs.
    Comment: Many commenters noted that, while the proposed rule seems 
to suggest that methods of addressing charge compression should be 
considered together with implementation of an HSRV methodology, these 
two issues (charge compression and HSRV) need not and should not be 
linked. The commenters reiterated their opposition to implementation of 
the HSRV methodology, as previously expressed in comments on the FY 
2007 proposed rule, arguing that the method is flawed and may even 
introduce more bias into the relative weight calculations. Another 
commenter (who also opposed implementation of the HSRV methodology) 
stated that should the HSRV method be implemented, many DRG weights 
could move in one direction if the charge compression adjustments were 
implemented in FY 2008, and then move in the other direction if the 
HSRV method were to be implemented in FY 2009. This commenter requested 
that CMS delay both changes for at least one year, and implement the 
HSRV method and the regression-based CCRs only after issuing a formal 
proposal with a thorough analysis that is made available to the public 
for review and comment. One commenter stated that the RTI revisions 
should be reviewed in combination with the severity-based system 
recommended by RAND and should not be adopted in FY 2008. The commenter 
stated that CMS and the provider community should evaluate these 
recommendations and implement them together in FY 2009. One commenter 
stated that the combined use of hospital-specific charges and a 
national CCR will result in a distortion of the DRG weights and a 
shifting of Medicare payments among hospitals, not based on resource 
utilization, but rather on a mathematical calculation. This commenter 
recommended that CMS review the impact of using hospital-specific

[[Page 47197]]

charges and costs to determine whether the national CCR has created 
inaccurate DRG weights.
    MedPAC commented that adopting cost-based HSRV weights would result 
in substantial additional improvements in payment accuracy. MedPAC 
believed that the HSRV methodology removes all of the differences in 
the level of costs across hospitals, and is preferable to CMS' current 
method used for standardization, which is incomplete and introduces 
avoidable errors into the computation of payment weights. Two other 
commenters supported the adoption of the HSRV methodology and strongly 
opposed the current methodology and believed it is flawed for the 
following reasons: (1) The proposed formula derives a national average 
charge based on all hospitals being weighted equally, which 
disadvantages hospitals located in historically ``low charge'' States, 
and results in small, rural hospitals carrying the same weight as 
large, urban hospitals; (2) The data being used are outdated and do not 
reflect the cost of new technology; (3) Costs in excess of 25 percent 
are omitted by CMS from ``high cost'' hospitals in the cost base, while 
leaving in all of the charges from those same ``high cost'' hospitals 
and assigning a relative value on reduced costs. Since the costs are 
being excluded, but not the charges, there is a corresponding 
mismatching of revenues and costs; (4) The data contain only audited 
data, and hospitals that have not been audited would not be included in 
the data.
    These two commenters stated that CMS should test the sensitivity of 
weights using various methodological assumptions and share the 
resulting data with the public. The commenters requested that CMS 
should ``strive'' to create a system that improves payments and does 
not include the ``obvious flaws'' listed above.
    Response: Many commenters expressed their concerns and opposition 
to the HSRV methodology last year. As we explained in response to those 
comments in the FY 2007 IPPS final rule, we decided not to adopt the 
HSRV methodology to standardize charges for FY 2007 but stated that we 
would undertake further analysis of the method. As we indicated in the 
FY 2008 IPPS proposed rule, we engaged RAND as the contractor to study 
alternative DRG systems. The second phase of the RAND study will 
include evaluating the HSRV methodology; the evaluation report will not 
be available until after the issuance of this final rule with comment 
period. Therefore, we will consider those results as we plan changes as 
part of the FY 2009 IPPS rulemaking process. We intend to carefully 
analyze how the relative weights would change if we were to adopt 
regression-based CCRs to address charge compression while 
simultaneously adopting an HSRV methodology using fully phased-in MS-
DRGs. Although many commenters do not believe that the HSRV methodology 
and addressing charge compression should be linked, we believe, as did 
one commenter, that sequentially adjusting for charge compression and 
later adopting the HSRV methodology could create instability in IPPS 
payments over the next 2 years. Accordingly, we intend to include a 
detailed description and discussion of RAND's and any other analyses 
that we may undertake on these issues in the FY 2009 IPPS proposed 
rule.
    In response to the commenters who supported adopting the HSRV 
methodology and believed it superior to the method used by CMS 
currently, in the FY 2007 IPPS final rule (71 FR 47883), we stated that 
there are certain administrative difficulties with adjusting charges to 
costs using hospital-specific CCRs. Therefore, at least until we have 
the opportunity to analyze the results of RAND's analysis, we are 
utilizing national average CCRs to determine cost. We also do not 
believe that the use of hospital-specific charges together with 
national average CCRs redistributes Medicare payments among hospitals 
merely based on a mathematical calculation, as one commenter indicated. 
On the contrary, a system that improves payment accuracy and moderates 
the influence of individual hospital reporting practices on a national 
payment system is not one which haphazardly redistributes payments. We 
note that, in a report issued in July 2006, the GAO found that CMS's 
system of national CCRs shows promise to improve payment accuracy 
because it reduces the impact that individual hospital-reporting 
practices has on the DRG relative weights (GAO-06-880, ``CMS's Proposed 
Approach to Set Hospital Inpatient Payments Appears Promising''). With 
respect to the commenters' concerns regarding inappropriate ``equal 
weighting'' of hospitals, under CMS' current methodology for computing 
national CCRs, these concerns were addressed in last year's IPPS final 
rule. The national CCRs are the sum of all costs divided by the sum of 
all charges. Thus, all hospitals are not weighted equally. Larger 
hospitals will have more weight than smaller hospitals in the final CCR 
calculation.
    In response to the commenters' concerns that the data are outdated 
and do not reflect the costs of new technology, there is an inevitable 
lag between the availability of information from hospital claims or 
cost reports and the time it can be used to determine relative weights. 
We always use the most recent data available to set relative weights. 
Furthermore, as we noted in the FY 2007 IPPS final rule, CMS' current 
method of using national average CCRs eliminates the need to match 
claims (for FY 2008, the 2006 MedPAR) to the time period of the CCRs 
(for FY 2008, FY 2005 HCRIS), which would be necessary under an HSRV 
method that uses hospital-specific CCRs. Thus, we can use claims data 
from one year later under our cost-based weighting methodology. We also 
note that add-on payments made for the latest advancements in medical 
technologies may not be included in the 2-year-old hospital claims data 
that are used to set the relative weights.
    Regarding the comments stating that CMS mismatches revenues and 
costs by omitting excessive costs from ``high cost'' hospitals in the 
cost base, while leaving in the charges from those same ``high cost'' 
hospitals, we note that this is not actually the case. If a hospital's 
costs are dropped from the national average CCR calculations, the 
hospital's charges are also dropped from the national average CCR 
calculations. Lastly, the commenters' assertion that the cost report 
data used for CCRs include only audited data is incorrect. If the 
commenters are referring to the cost report data that CMS uses to 
calculate the national average CCRs, we note that in accessing data for 
IPPS hospitals from HCRIS, we select all IPPS hospitals, and do not 
only select hospitals whose cost reports are audited.
    Comment: MedPAC submited comments on the method we use to calculate 
the national CCRs for the cost-based relative weights. The methodology 
to calculate the national CCRs is described in section II.H. of the 
preamble of this final rule with comment period. MedPAC suggested that 
we standardize the Medicare charges and costs used to calculate the 
national CCRs from the Medicare cost reports to adjust for differences 
in local wage levels, IME, and DSH. The standardization would be 
consistent with the use of national standardized charges by revenue 
center also used in the calculation of cost-based relative weights from 
the MedPAR.
    Response: While we did not propose any changes to the cost-based 
relative weights methodology, we appreciate the comment on maintaining 
consistency

[[Page 47198]]

among our data sources. Although we currently standardize charges from 
the MedPAR file when calculating relative weights, we do not 
standardize costs and charges from hospital cost reports, as MedPAC 
recommended. We may consider this recommendation as we continue to 
refine our methodology for calculating relative weights. However, we 
note that there would be no need to standarize costs and charges from 
hospital cost reports under an HSRV methodology.
b. Medium-Term Recommendations
    RTI recommended that we expand the MedPAR file to include separate 
fields that disaggregate several existing charge departments. For 
compatibility with prior years' data, the new fields should partition 
the existing ones rather than recombine charges. RTI recommended 
including additional fields in the MedPAR file for the hospital 
departments that it statistically disaggregated in its report, as well 
as intermediate care, observation beds, other special nursing codes, 
therapeutic radiation and EEG, and possibly others. As with some of 
RTI's earlier recommendations with respect to cost reports, we will 
examine this suggestion in conjunction with other competing priorities 
CMS has been given for our information systems. We have limited 
information systems resources, and we will need to consider whether the 
time constraints we have to develop the IPPS final rule, in conjunction 
with the inconvenience of using the SAF and accounting for charge 
compression through regression, will justify the infrastructure cost to 
our information systems of incorporating these variables into the 
MedPAR.
    Finally, RTI's medium-term recommendations include encouraging 
providers to use existing standard cost centers, particularly those for 
Blood and Blood Administration and for Therapeutic Radiology, in the 
current Medicare cost report. We believe this is closely related to the 
recommendation for improved cost reporting instructions. Therefore, we 
will consider this recommendation as part of any further effort we may 
undertake to revise cost reporting instructions or change the cost 
report.
    Comment: Some commenters supported expanding the MedPAR file to 
include separate fields to disaggregate additional cost centers. One 
commenter supported this recommendation and suggested that the 
assignment of revenue codes and charges to revenue centers in MedPAR 
should be reviewed and changed to better reflect hospital accounting 
practices as reflected on the Medicare cost report.
    Response: We will consider suggestions for modifying MedPAR in 
conjunction with other competing priorities we have for our information 
systems. Further, while we support the efforts of the national hospital 
associations to streamline hospital's reporting practices, we note that 
CMS does not instruct hospitals in the appropriate revenue codes to use 
because hospitals have discretion as to where and how they allocate 
charges based on their own financial system needs.
c. Long-Term Recommendations
    RTI's long-term recommendations include adding new cost centers to 
the Medicare cost report and/or undertaking the following activities:
    <bullet> Add ``Devices, Implants and Prosthetics'' under the line 
for ``Medical Supplies Charged to Patients.'' Consider also adding a 
similar line for IV Solutions as a subscripted line under the line for 
``Drugs Charged to Patients.''
    <bullet> Add CT Scanning and MRI as subscripted lines under the 
line for ``Radiology-Diagnostic.'' About one-third of hospitals that 
offer CT Scanning and/or MRI services are already reporting these 
services on nonstandard line numbers. More consistent reporting for 
both cost centers would eliminate the need for statistical estimation 
on the radiology CCRs.
    <bullet> In consultation with hospital industry representatives, 
determine the best way to separate cardiology cost centers and add a 
new standard cost center for cardiac catheterization and/or for all 
other cardiac diagnostic laboratory services. About 20 percent of 
hospitals already include a nonstandard line on their cost reports for 
catheterization. Creating a new standard cost center could improve 
consistency in reporting and substantially improve the program charge 
mismatching that now occurs.
    <bullet> In consultation with hospital industry representatives, 
consider establishing a new cost center to capture intermediate care 
units as distinct from routine or intensive care.
    <bullet> Establish expert study groups or other research vehicles 
to study options for improving patient-level charging within nursing 
units. Nursing accounts for one-fourth of IPPS charges and 41 percent 
of the computed costs from our claims analysis file. Historically, 
nursing charges and costs have been assigned to patients without 
relying on individual measures of service use. Consideration should be 
given to finding ways to improve precision in nursing cost finding that 
will improve relative resource weights without adding substantial 
administrative costs to either the Medicare program or to hospitals.
    We agree with RTI that attention should be paid to these issues as 
we consider changes to the Medicare cost report. The cost report has 
not been revised in nearly 10 years. During this time, there have been 
significant changes to the Medicare statute and regulations that have 
affected the Medicare payment policies. Necessary incremental changes 
have been made to the Medicare cost report over the years to 
accommodate the Medicare wage index, disproportionate share payments, 
indirect and direct graduate medical education payments, reporting of 
uncompensated care costs, among others. The adoption of cost-based 
weights for the IPPS beginning in FY 2007 has brought further attention 
to the importance of the Medicare cost report and how hospitals report 
costs and charges. We recently began doing a comprehensive review of 
the Medicare cost report and plan to make updates that will consider 
its many uses. As we update the cost report, we will give strong 
consideration to RTI's recommendations and potential long-term 
improvements that could be made to the IPPS cost-based relative 
weighting methodology.
    Comment: Several commenters made recommendations for how the 
relative weights would be calculated under a 3-year transition from the 
current DRGs to the new MS-DRGs. Some commenters suggested three 
options as follows:
    (1) Use two GROUPERs (CMS DRGs and MS-DRGs) and then blend the 
weights for each individual case.
    (2) Blending current DRG weights with MS-DRG weights: To calculate 
a blended cost-based weight, CMS could first calculate cost-based 
weights using the current DRGs. CMS could then calculate cost-based 
weights using the MS-DRGs. The blended weight for each MS-DRG would be 
based on the weighted average relative weights (based on the current 
DRGs from which cases group into the new MS-DRGs) and the MS-DRG 
weight. Under this approach, CMS would continue to calculate cost-based 
weights for the current DRGs during the first 2 years of the transition 
period. This approach recognizes that a case has different relative 
weights in the new system versus the current DRG system.
    (3) Blending MS-DRG base and severity level weights: CMS would 
blend the actual MS-DRG weight with the weight of the base MS-DRG. The 
base MS-DRG weight is determined by

[[Page 47199]]

using expected case mix volume among severity levels. For example, if 
an MS-DRG was subdivided into two subgroups: with the non-CC DRG 
accounting for 90 percent of the cases and the other 10 percent in the 
CC DRG, these ratios would be used to blend the base and the DRG-
specific weight. Under this approach, CMS would not have to calculate 
weights using two different DRG systems. On the other hand, this 
approach does not use the current system when calculating the blended 
rates.
    The commenters noted that while option 1 would provide the most 
accurate blended weights, it is the most burdensome to implement 
because it would require use of two GROUPERs, whereas under options 2 
and 3, CMS would only use the blended relative weights, allowing 
hospitals and Medicare contractors to use only one grouping software.
    MedPAC suggested that CMS adopt a 2-year transition period for MS-
DRGs to coincide with the remainder of the current transition period 
for implementing cost-based weights, so as to ``balance the payment 
impacts of implementing severity refinements and cost-based weights.'' 
MedPAC suggested that a 2-year transition might work as follows: CMS 
could group cases using the MS-DRG grouper beginning in FY 2008, but 
then use a blended weight for each category. The blended weight for an 
MS-DRG would reflect partly the weight that would have been assigned 
under an MS-DRG system with fully implemented cost-based weights. The 
weight for each MS-DRG in FY 2008 would be a blend of two parts:
    <bullet> 50 percent of the average DRG weight that would have been 
attached to cases in the MS-DRG from the 2006 MedPAR file under a 
policy of \1/3\ charge-based weights and \2/3\ cost-based weights. 
These DRG weights are the ones that would have applied to the same 
cases under the FY 2008 policy if CMS simply continued the transition 
to cost-based weights without changing the DRG definitions.
    <bullet> 50 percent of the CMS refined weights for the MS-DRG for 
FY 2008. In FY 2009, cases would be grouped in the MS-DRGs and the 
weight for each MS-DRG would be a 100 percent cost-based weight.
    Response: We have carefully considered each comment in determining 
whether there should be a transition period for the relative weights 
computed using MS-DRGs, the length of the transition and how to compute 
weights during the transition. We also considered how to accommodate a 
transition to MS-DRG relative weights with the continuing transition to 
cost-based weights. Although we received strong general support for 
adopting the MS-DRGs, we do believe that some transition is warranted 
to mitigate the magnitude of potential changes in payment to hospitals 
that could occur in one year. Furthermore, we agree with MedPAC that a 
two-year transition period that coincides with the remainder of the 
transition period for implementing cost-based weights is appropriate. 
By having these changes occur simultaneously over the same transition 
period, we can avoid having large changes in payment that would occur 
with sequential implementation. Further, we can also accomplish all of 
the payment reforms according to the same schedule. Accordingly, we are 
implementing a 2-year transition to MS-DRGs. For FY 2008, the first 
year of the transition, 50 percent of the relative weight for each MS-
DRG will be based on the CMS DRG relative weight and 50 percent will be 
based on the MS-DRG relative weight. In FY 2009, the relative weights 
will be based entirely on the MS-DRG relative weight. The blended 
relative weights for FY 2008 are computed as follows:
    First, using the Version 24.0 GROUPER, relative weights are 
calculated based on 100 percent costs and 100 percent charges, 
respectively (see section II.H. of the preamble of this final rule with 
comment period for a description of the cost- and charge-based 
calculations). Then these weights are blended using two-thirds of the 
cost-based weights and one-third charge-based weights to establish the 
CMS DRG portion of the transition weights.
    Second, using the Version 25.0 GROUPER, relative weights are 
calculated based on 100 percent costs and 100 percent charges, 
respectively (see section II.H. of the preamble of this final rule with 
comment period for a description of how we compute cost-based and 
charge-based weights). These weights are then blended using two-thirds 
of the cost-based weights and one-third charge-based weights to 
establish the MS-DRG portion of the transition weights.
    Under the transition blend we are adopting in this final rule with 
comment period, we group cases to MS-DRGs (using the Version 25.0 
GROUPER), but the payment weight for each DRG is a 50/50 blend of the 
MS-DRG weight and the CMS DRG weight. Thus, we had to determine a 
blended weight for each DRG. Using the claims in the FY 2006 MedPAR 
database that we used to compute cost-based weights under the Version 
24.0 GROUPER, we grouped each case to a CMS DRG (using the Version 24.0 
GROUPER) and an MS-DRG (using the Version 25.0 GROUPER). Commonly, a 
set of cases that grouped to a single MS-DRG grouped to two or more CMS 
DRGs. Therefore, we determined an average CMS DRG weight for all cases 
that grouped to each MS-DRG. Specifically, we summed the CMS DRG 
weights of all the cases that grouped to each MS-DRG and then divided 
that number by the transfer-adjusted case count. To establish the final 
blended weight for each DRG, we added 50 percent of the MS-DRG weight 
to 50 percent of the average CMS DRG weight for that MS-DRG. These 
final blended relative weights are listed in Table 5 of this final rule 
with comment period.
    Comment: Some commenters expressed concern about the continued 
transition from charge-based weights to cost-based weights, in light of 
RTI's recommendations to alleviate charge compression on the relative 
weights and the proposal to introduce MS-DRGs. For FY 2008, we proposed 
that the relative weights would be based on one-third charges and two-
third costs. Some commenters suggested that this transition should be 
delayed until the public comments associated with cost reporting and 
charge compression can be addressed. We have also received comments 
expressing concern on the potential fluctuations in hospital payment if 
we were to implement both RTI's recommendations on charge compression 
along with the MS-DRG system. In both cases, commenters suggested 
delaying the transition from charge-based to cost-based weights by 
maintaining the relative weights at two-third charges and one-third 
costs. MedPAC also expressed concern about continuing the transition to 
cost-based weights. However, unlike the commenter above, MedPAC 
suggested that CMS discontinue the transition period to cost-based 
weights and implement 100 percent cost-based weights in FY 2008. 
MedPAC's recommendation to discontinue the transition to cost-based 
weights presumed full introduction of the MS-DRGs in FY 2008. The 
commenters believed the payment fluctuations that will occur with full 
implementation of MS-DRGs can be mitigated by fully adopting cost 
weights. However, as suggested above, MedPAC also suggested as an 
alternative adopting MS-DRG weights according to the same schedule as 
the cost-based weights.
    Response: We appreciate the commenters' expressing concerns about 
the continued transition to cost-based relative weights and the 
potential changes in payment from the

[[Page 47200]]

application of this methodology. In the FY 2007 IPPS final rule, we 
discussed our rationale for implementing cost-based weights over a 3-
year transition period. We stated that the 3-year transition would 
mitigate the annual payment effects from the changes to the relative 
weights while we further study whether to make adjustments to account 
for charge compression. We believe that the cost-based methodology 
reduces bias in the relative weights and makes Medicare's payments more 
accurate for both medical and surgical DRGs. Therefore, any delays in 
the transition would not further our goal of payment accuracy. We 
believe that current efforts to improve cost reporting and our decision 
not to implement regression-based CCRs will alleviate concerns about 
additional fluctuations in hospital payments from further changes to 
the relative weight methodology. Furthermore, we believe that, for some 
types of hospitals (such as rural hospitals), the payment changes from 
MS-DRGs are the opposite of those that will occur from the transition 
to cost-based weights. For this reason, we believe a 2-year transition 
of the MS-DRG system that coincides with the remaining two years of the 
transition to cost-based weights will reduce the magnitude of annual 
payment changes and achieve our long-term goal of improvements in 
payment accuracy. Therefore, we are continuing with the 3-year 
transition to cost-based weights. For FY 2008, the DRG relative weights 
will be a blend of 33 percent of charge-based weights and 67 percent of 
cost-based weights. For the first year of the MS-DRG transition, the 
relative weights will be a blend of 50 percent of the CMS-DRG weight 
and 50 percent of the MS-DRG weight.

F. Hospital-Acquired Conditions, Including Infections

1. General
    Medicare's IPPS encourages hospitals to treat patients efficiently. 
Hospitals receive the same DRG payment for stays that vary in length. 
In many cases, complications acquired in the hospital do not generate 
higher payments than the hospital would otherwise receive for other 
cases in the same DRG. To this extent, the IPPS does encourage 
hospitals to manage their patients well and to avoid complications, 
when possible. However, complications, such as infections, acquired in 
the hospital can lead to higher Medicare payments in two ways. First, 
the treatment of complications can increase the cost of hospital stays 
enough to generate outlier payments. However, the outlier payment 
methodology requires that hospitals experience large losses on outlier 
cases (for example, in FY 2007, the fixed-loss amount was $24,485 
before a case qualified for outlier payments, and the hospital then 
only received 80 percent of its estimated costs above the fixed-loss 
cost threshold). Second, under the MS-DRGs we are adopting in this 
final rule with comment period, there are 258 sets of DRGs that are 
split into 2 or 3 subgroups based on the presence or absence of a major 
CC (MCC) or CC. If a condition acquired during the beneficiary's 
hospital stay is one of the conditions on the MCC or CC list, the 
result may be a higher payment to the hospital under the MS-DRGs. (We 
refer readers to section II.D. of this final rule with comment period 
for a detailed discussion of DRG reforms.)
2. Legislative Requirement
    Section 5001(c) of Pub. L. 109-171 requires the Secretary to 
select, by October 1, 2007, at least two conditions that are (a) high 
cost or high volume or both, (b) result in the assignment of a case to 
a DRG that has a higher payment when present as a secondary diagnosis, 
and (c) could reasonably have been prevented through the application of 
evidence-based guidelines. For discharges occurring on or after October 
1, 2008, hospitals will not receive additional payment for cases in 
which one of the selected conditions was not present on admission. That 
is, the case will be paid as though the secondary diagnosis was not 
present. Section 5001(c) provides that we can revise the list of 
conditions from time to time, as long as the list contains at least two 
conditions. Section 5001(c) also requires hospitals to submit the 
secondary diagnoses that are present at admission when reporting 
payment information for discharges on or after October 1, 2007.
3. Public Input
    In the FY 2007 IPPS proposed rule (71 FR 24100), we sought input 
from the public regarding conditions with evidence-based guidelines 
that should be selected in order to implement section 5001(c) of Pub. 
L. 109-171. The comments that we received were summarized in the FY 
2007 IPPS final rule (71 FR 48051 through 48053). In the FY 2008 IPPS 
proposed rule (72 FR 24716), we again sought formal public comment on 
conditions that we proposed to select under section 5001(c). As 
discussed below, in this final rule with comment period, we first 
summarize the comments we received on the FY 2007 IPPS proposed rule. 
We then explain our detailed proposals included in the FY 2008 proposed 
rule, followed by a summary of the public comments on each condition 
proposed and our responses to those public comments.
    In summary, the majority of the comments that we received in 
response on the FY 2007 IPPS proposed rule addressed conceptual issues 
concerning the selection, measurement, and prevention of hospital-
acquired infections. Many commenters encouraged CMS to engage in a 
collaborative discussion with relevant experts in designing, 
evaluating, and implementing this section. The commenters urged CMS to 
include individuals with expertise in infection control and prevention, 
as well as representatives from the provider community, in the 
discussions.
    Many commenters supported the statutory requirement for hospitals 
to submit information regarding secondary diagnoses present on 
admission beginning in FY 2008, and suggested that it would better 
enable CMS and health care providers to more accurately differentiate 
between comorbidities and hospital-acquired complications. MedPAC, in 
particular, noted that this requirement was recommended in its March 
2005 Report to Congress and indicated that this information is 
important to Medicare's value-based purchasing efforts. Other 
commenters cautioned us about potential problems with relying on 
secondary diagnosis codes to identify hospital-acquired complications, 
and indicated that secondary diagnosis codes may be an inaccurate 
method for identifying true hospital-acquired complications.
    A number of commenters expressed concerns about the data coding 
requirement for this payment change and asked for detailed guidance 
from CMS to help them identify and document hospital-acquired 
complications. Other commenters expressed concern that not all 
hospital-acquired infections are preventable and noted that sicker and 
more complex patients are at greater risk for hospital-acquired 
infections and complications. Commenters suggested that CMS include 
standardized infection-prevention process measures, in addition to 
outcome measures of hospital-acquired infections.
    Some commenters proposed that CMS expand the scope of the payment 
changes beyond the statutory minimum of two conditions. They noted that 
the death, injury, and cost of hospital-acquired infections are too 
high to limit this provision to only two conditions. Commenters also 
recommended that CMS annually select additional hospital

[[Page 47201]]

acquired complications for the payment change. Conversely, a number of 
commenters proposed that CMS initially begin with limited 
demonstrations to test CMS' methodology before nationwide 
implementation. One commenter recommended that CMS include appropriate 
consumer protections to prevent providers from billing patients for the 
nonreimbursed costs of the hospital-acquired complications and to 
prevent hospitals from selectively avoiding patients perceived at risk 
of complications.
    In addition to the broad conceptual suggestions, some commenters 
recommended specific conditions for possible inclusion in the payment 
changes, which we discussed in detail in the preamble of the proposed 
rule and in section II.D.4. of this final rule with comment period. We 
also discuss throughout section II.D. of the preamble of this final 
rule with comment period other comments that we have considered in 
developing hospital-acquired conditions that would be subject to 
reporting.
    As it is not addressed elsewhere, we are responding here to the 
comment about hospitals billing patients for costs of hospital-acquired 
complications that are not counted as MCCs and CCs. Section 5001(c) 
does not make the additional cost of a hospital acquired complication a 
noncovered cost. The additional costs that a hospital would incur as a 
result of a hospital-acquired complication remains a covered Medicare 
cost that is included in the hospital's IPPS payment. Medicare's 
payment to the hospital is for all inpatient hospital services provided 
during the stay. The hospital cannot bill the beneficiary for any 
charges associated with the hospital-acquired complication. With 
respect to the concern about a hospital avoiding patients that are at 
high risk of complications, we note that the policy is selecting only 
those conditions that are ``reasonably preventable.'' Thus, we are only 
selecting those conditions where, if hospital personnel are engaging in 
good medical practice, the additional costs of the hospital-acquired 
condition will, in most cases, be avoided and the risk of selectively 
avoiding patients at high risk of complications will be minimized. We 
further note that Medicare's high cost outlier policy is unaffected by 
section 5001(c). The hospital's total charges for all inpatient 
services provided during the stay will continue to be used to determine 
whether the case qualifies for an outlier payment. Thus, there will 
continue to be limitations on a hospital's financial risk of treating 
high cost cases even if, despite the hospital maintaining good medical 
practice to avoid complications, a reasonably preventable condition 
occurs after admission. Finally, as stated further below, we are 
continuing to work to identify exclusions for situations where the 
policy should not apply for the selected condition.
4. Collaborative Effort
    CMS worked with public health and infectious disease experts from 
the Centers for Disease Control and Prevention (CDC) to identify a list 
of hospital-acquired conditions, including infections, as required by 
section 5001(c) of Pub. L. 109-171. As previously stated, the selected 
conditions must meet the following three criteria: (a) high cost or 
high volume or both; (b) result in the assignment of the case to a DRG 
that has a higher payment when present as a secondary diagnosis; and 
(c) could reasonably have been prevented through the application of 
evidence-based guidelines. CMS and CDC staff also collaborated on 
developing a process for hospitals to submit a Present on Admission 
(POA) indicator with each secondary condition. The statute requires the 
Secretary to begin collecting this information as of October 1, 2007. 
The POA indicator is required in order for us to determine which of the 
selected conditions developed during a hospital stay. The current 
electronic format used by hospitals to obtain this information (ASC 
X12N 837, Version 4010) does not provide a field to obtain the POA 
information. We issued instructions requiring acute care IPPS hospitals 
to submit the POA indicator for all diagnosis codes, effective October 
1, 2007, through Change Request No. 5499, with a release date of May 
11, 2007. The instructions specify how hospitals under the IPPS submit 
this information in segment K3 in the 2300 loop, data element K301 on 
the ASC X12N 837, Version 4010 claim. Specific instructions on how to 
select the correct POA indicator for a diagnosis code are included in 
the ICD-9-CM Official Guidelines for Coding and Reporting. These 
guidelines can be found at the following Web site: http://www.cdc.gov/nchs/datawh/ftpserv/ftpicd9/ftpicd9.htm.
    CMS and CDC staff also received input from a number of groups and 
organizations on hospital-acquired conditions, including infections. 
Many of these groups and organizations recommended the selection of 
conditions mentioned in the FY 2007 IPPS final rule, including the 
following because of the high cost or high volume (frequency) of the 
condition, or both, and because in some cases preventable guidelines 
already exist:
    <bullet> Surgical site infections. The groups and organizations 
stated that there were evidence-based measures to prevent the 
occurrence of these infections which are currently measured and 
reported as part of the Surgical Care Improvement Program (SCIP).
    <bullet> Ventilator-associated pneumonias. The groups and 
organizations indicated that these conditions are currently measured 
and reported through SCIP. However, other organizations counseled 
against selecting these conditions because they believed it was 
difficult to obtain good definitions and that it was not always clear 
which ones are hospital acquired.
    <bullet> Catheter associated bloodstream infections.
    <bullet> Pressure ulcers.
    <bullet> Hospital falls. The injury prevention groups included this 
condition among a group referred to as ``serious preventable events,'' 
also commonly referred to as ``never events'' or ``serious reportable 
events.'' A serious preventable event is defined as a condition which 
should not occur during an inpatient stay.
    <bullet> Bloodstream infections/septicemia. Some commenters 
suggested that we focus on one specific organism, such as staph aureus 
septicemia.
    <bullet> Pneumonia. Some commenters recommended the inclusion of a 
broader group of pneumonia patients, instead of restricting cases to 
ventilator-associated pneumonias. Some commenters mentioned that while 
prevention guidelines exist for pneumonia, it is not clear how 
effective these guidelines may be in preventing pneumonia.
    <bullet> Vascular catheter associated infections. Commenters 
indicated that there are CDC guidelines for these infections. Other 
commenters stated that while this condition certainly deserves focused 
attention by health care providers, there is not a unique ICD 9 CM code 
that identifies vascular catheter-associated infections. Therefore, 
these commenters suggested that there would be difficulty separately 
identifying these conditions.
    <bullet> Clostridium difficile-associated disease (CDAD). Several 
commenters identified this condition as a significant public health 
issue. Other commenters indicated that, while prevalence of this 
condition is emerging as a public health problem, there is not 
currently a strategy for reasonably preventing these infections.
    <bullet> Methicillin-resistant staphylococcus aureus (MRSA). 
Several commenters indicated that MRSA has

[[Page 47202]]

become a very common bacteria occurring both in and outside the 
hospital environment. However, other organizations stated that the code 
for MRSA (V09.0, Infection with microorganism resistant to penicillins 
Methicillin-resistant staphylococcus aureus) is not currently 
classified as a CC. Therefore, the commenters stated that MRSA does not 
lead to a higher reimbursement when the code is reported.
    <bullet> Serious preventable events. As stated earlier, some 
commenters representing injury prevention groups suggested including a 
broader group of conditions than hospital falls which should not be 
expected to occur during a hospital admission. They noted that these 
conditions are referred to as ``serious preventable events,'' and 
include events such as the following: (a) leaving an object in during 
surgery; (b) operating on the wrong body part or patient, or performing 
the wrong surgery; (c) air embolism as a result of surgery; and (d) 
providing incompatible blood or blood products. Other commenters 
indicated serious preventable events are so rare that they should not 
be selected as a hospital condition that cannot result in a case being 
assigned to a higher paying DRG.
5. Criteria for Selection of the Hospital-Acquired Conditions
    CMS and CDC staff greatly appreciate the many comments and 
suggestions offered by organizations and groups that were interested in 
providing input into the selection of the initial hospital-acquired 
conditions.
    CMS and CDC staff evaluated each recommended condition under the 
three criteria established by section 1886(d)(4)(D)(iv) of the Act. In 
order to meet the higher payment criterion, the condition selected must 
have an ICD-9-CM diagnosis code that clearly identifies the condition 
and is classified as a CC, or as an MCC (as proposed for the MS DRGs in 
the proposed rule). Some conditions recommended for inclusion among the 
initial hospital-acquired conditions did not have codes that clearly 
identified the conditions. Because there has not been national 
reporting of a POA indicator for each diagnosis, there are no Medicare 
data to determine the incidence of the reported secondary diagnoses 
occurring after admission. To the extent possible, we used information 
from the CDC on the incidence of these conditions. CDC's data reflect 
the incidence of hospital-acquired conditions in 2002. We also examined 
FY 2006 Medicare data on the frequency that these conditions were 
reported as secondary diagnoses. We developed the following criteria to 
assist in our analysis of the conditions. The conditions described were 
those recommended for inclusion in the initial hospital-acquired 
infection provision.
    <bullet> Coding--Under section 1886(d)(4)(D)(ii)(I) of the Act, a 
discharge is subject to the payment adjustment if ``the discharge 
includes a condition identified by a diagnosis code'' selected by the 
Secretary under section 1886(d)(4)(D)(iv) of the Act. We only selected 
conditions that have (or could have) a unique ICD-9-CM code that 
clearly describes the condition. Some conditions recommended by the 
commenters would require the use of two or more ICD-9-CM codes to 
clearly identify the conditions. Although we did not exclude these 
conditions from further consideration, the need to utilize multiple 
ICD-9-CM codes to identify them may present operational issues. For 
instance, the complexities associated with selecting septicemia as a 
hospital-acquired condition subject to section 5001(c) of the DRA may 
present operational issues in identifying whether or not the condition 
was present upon admission. The vast number of clinical scenarios that 
we would have to account for could complicate implementation of the 
provision.
    <bullet> Burden (High Cost/High Volume)--Under section 
1886(d)(4)(D)(iv)(I) of the Act, we must select cases that have 
conditions that are high cost or high volume, or both.
    <bullet> Prevention guidelines--Under section 1886(d)(4)(D)(iv)(II) 
of the Act, we must select codes that describe conditions that could 
reasonably have been prevented through application of evidence-based 
guidelines. We evaluated whether there is information available for 
hospitals to follow to prevent the condition from occurring.
    <bullet> MCC or CC--Under section 1886(d)(4)(D)(iv)(III) of the 
Act, we must select codes that result in assignment of the case to a 
DRG that has a higher payment when the code is present as a secondary 
diagnosis. The condition must be an MCC or a CC that would, in the 
absence of this provision, result in assignment to a higher paying DRG.
    <bullet> Considerations--We evaluated each condition above 
according to how it meets the statutory criteria in light of the 
potential difficulties that we would face if the condition were 
selected.
6. Selection of Hospital-Acquired Conditions
    We discuss below our analysis of each of the conditions that were 
raised as possible candidates for selection under section 5001(c) of 
Pub. L. 109-171 according to the criteria described above in section 
II.D.5. of the preamble of this final rule with comment period. We also 
discuss any considerations, which would include any administrative 
issues surrounding the selection of a proposed condition. For example, 
the condition may only be able to be identified by multiple codes, 
thereby requiring the development of special GROUPER logic to also 
exclude similar or related ICD-9-CM codes from being classified as a 
CC. Similarly, a condition acquired during a hospital stay may arise 
from another condition that the patient had prior to admission, making 
it difficult to determine whether the condition was reasonably 
preventable. Following a discussion of each condition, we provide a 
summary that describes how each condition was considered for the 
proposed rule, whether we are selecting it to be subject to the 
provision in this FY 2008 IPPS final rule or if it will continue to be 
considered for the future. In the proposed rule, we presented 13 
conditions. The summary discussion and table reflect changes to the 
order of the conditions. The summary presents the conditions that best 
meet the statutory criteria and which conditions we are selecting to be 
subject to the payment adjustment for hospital-acquired conditions 
beginning in FY 2009. In the proposed rule, we encouraged comments on 
these conditions. We asked commenters to recommend how many and which 
conditions should be selected in the FY 2008 IPPS final rule along with 
justifications for these selections. We also encouraged additional 
comments on clinical, coding, and prevention issues that may affect the 
conditions selected. While, in this final rule with comment period, we 
present these 13 conditions in the order they were proposed, we have 
re-ranked these conditions based on how well they meet the statutory 
criteria according to compelling public health reasons in addition to 
public comment and internal analysis.
    We received approximately 127 timely public comments on this 
section from hospitals and health care systems, provider associations, 
consumer groups, purchasers, medical device manufacturers, 
pharmaceutical companies, information technology companies, and health 
care research organizations.
    Comment: Some commenters urged CMS to use discretion in selecting 
hospital-acquired conditions that will be subject to the statutory 
provision and suggested that CMS limit the number of conditions 
selected. A large majority of

[[Page 47203]]

commenters strongly supported the inclusion of three of the serious 
preventable events (object left in surgery, air embolism and blood 
incompatibility) and generally commented that the remaining conditions 
are not always preventable or may not have unique codes established.
    A number of commenters both supported and opposed the conditions 
other than the three serious preventable events mentioned above. The 
commenters were generally optimistic about considering proposed 
conditions for the future upon resolution of suggested issues. A few 
commenters proposed that CMS initially begin with limited 
demonstrations to test CMS' methodology before nationwide 
implementation. These commenters specifically mentioned the Michigan 
Hospital Association Keystone Center.
    The commenters who suggested not including conditions other than 
the three serious preventable events mentioned above noted that sicker 
and more complex patients are at greater risk for hospital-acquired 
infections and complications. In particular, the commenters believed 
some of the conditions proposed are a biological inevitability at a 
certain predictable rate regardless of safe practice. In addition, the 
commenters expressed concern about the difficulty of distinguishing 
between hospital-acquired and community-acquired infections. The 
commenters also believed that CMS should use incentives to allow 
hospitals to adopt innovative infection prevention technologies and 
provide necessary treatments for infections. Finally, a few commenters 
submitted additional conditions that were not included in the 13 
conditions we considered in the proposed rule.
    Response: In general, we discuss our responses to each of these 
comments below in the context of the specific conditions they 
reference. With respect to the general comment that we should only 
select the three serious preventable events, we believe there is a 
significant public health interest in selecting more than just these 
conditions. According to the commenters, many of the other conditions 
we considered are not always preventable and, therefore, should not be 
selected. The statute indicates that the provision should apply to 
conditions that ``could reasonably have been prevented through the 
application of evidence-based guidelines.'' Therefore, for this reason, 
we are selecting other conditions in addition to the serious 
preventable events to be subject to this provision in this final rule 
with comment period. We discuss the application of the statutory 
criteria to each of the conditions we considered below and why we 
believe the condition is ``reasonably preventable.''
(a) Catheter-Associated Urinary Tract Infections
    Coding--ICD-9-CM code 996.64 (Infection and inflammatory reaction 
due to indwelling urinary catheter) clearly identifies this condition. 
The hospital would also report the code for the specific type of 
urinary infection. For instance, when a patient develops a catheter 
associated urinary tract infection during the inpatient stay, the 
hospital would report code 996.64 and 599.0 (Urinary tract infection, 
site not specified) to clearly identify the condition. There are also a 
number of other more specific urinary tract infection codes that could 
also be coded with code 996.64. These codes are classified as CCs. If 
we were to select catheter-associated urinary tract infections, we 
would implement the decision by not counting code 996.64 and any of the 
urinary tract infection codes listed below when both codes are present 
and the condition was acquired after admission. If only code 966.64 
were coded on the claim as a secondary diagnosis, we would not count it 
as a CC.
    Burden (High Cost/High Volume)--CDC reports that there are 561,667 
catheter-associated urinary tract infections per year. For FY 2006, 
there were 11,780 reported cases of Medicare patients who had a 
catheter associated urinary tract infection as a secondary diagnosis. 
The cases had average charges of $40,347 for the entire hospital stay. 
According to a study in the American Journal of Medicine, catheter-
associated urinary tract infection is the most common nosocomial 
infection, accounting for more than 1 million cases in hospitals and 
nursing homes nationwide.\22\ Approximately 11.3 million women in the 
United States had at least one presumed acute community-acquired 
urinary tract infection resulting in antimicrobial therapy in 1995, 
with direct costs estimated at $659 million and indirect costs totaling 
$936 million. Nosocomial urinary tract infection necessitates one extra 
hospital day per patient, or nearly 1 million extra hospital days per 
year. It is estimated that each episode of symptomatic urinary tract 
infection adds $676 to a hospital bill. In total, according to the 
study, the estimated annual cost of nosocomial urinary tract infection 
in the United States ranges between $424 and $451 million.
    Prevention guidelines--There are widely recognized guidelines for 
the prevention of catheter-associated urinary tract infections. 
Guidelines can be found at the following Web site: http://www.cdc.gov/ncidod/dhqp/gl_catheter_assoc.html.
---------------------------------------------------------------------------

    \22\ Foxman, B.: ``Epidemiology of urinary tract infections: 
incidence, morbidity, and economic costs,'' The American Journal of 
Medicine, 113 Suppl 1A, pp. 5s-13s, 2002.
---------------------------------------------------------------------------

    CC--Codes 996.64 and 599.0 are classified as CCs in the CMS DRGs as 
well as in the MS-DRGs.
    Considerations--The primary prevention intervention would be not 
using catheters or removing catheters as soon as possible, both of 
which are worthy goals because once catheters are in place for 3 to 4 
days, most clinicians and infectious disease/infection control experts 
do not believe urinary tract infections are preventable. While there 
may be some concern about the selection of catheter associated urinary 
tract infections, it is an important public health goal to encourage 
practices that will reduce urinary tract infections. Approximately 40 
percent of Medicare beneficiaries have a urinary catheter during 
hospitalization based on Medicare Patient Safety Monitoring System 
(MPSMS) data.
    As stated above in the Coding section, this condition is clearly 
identified through ICD-9-CM code 996.64. Code 996.64 is classified as a 
CC. The hospital would also report the code for the specific type of 
urinary infection. For instance, when a patient develops a catheter 
associated urinary tract infection during the inpatient stay, the 
hospital would report codes 996.64 and 599.0 or another more specific 
code that clearly identifies the condition. These codes are classified 
as CCs under the CMS DRGs as well as the MS-DRGs. To select catheter-
associated urinary tract infections as one of the hospital-acquired 
conditions that would not be counted as a CC, we would not classify 
code 996.64 as a CC if the condition occurred after admission. 
Furthermore, we would also not classify any of the codes listed below 
as CCs if present on the claim with code 996.64 because these 
additional codes identify the same condition. The following codes 
represent specific types of urinary infections. We did not include 
codes for conditions that could be considered chronic urinary 
infections, such as code 590.00 (Chronic pyelonephritis, without lesion 
or renal medullary necrosis). Chronic conditions may indicate that the 
condition was not acquired during the current stay. We would not count 
code 996.64 or any of the following codes representing acute urinary

[[Page 47204]]

infections if they developed after admission and were coded together on 
the same claim.
    <bullet> 112.2 (Candidiasis of other urogenital sites)
    <bullet> 590.10 (Acute pyelonephritis, without lesion of renal 
medullary necrosis)
    <bullet> 590.11 (Acute pyelonephritis, with lesion of renal 
medullary necrosis)
    <bullet> 590.2 (Renal and perinephric abscess)
    <bullet> 590.3 (Pyeloureteritis cystica)
    <bullet> 590.80 (Pyelonephritis, unspecified)
    <bullet> 590.81 (Pyelitis or pyelonephritis in diseases classified 
elsewhere)
    <bullet> 590.9 (Infection of kidney, unspecified)
    <bullet> 595.0 (Acute cystitis)
    <bullet> 595.3 (Trigonitis)
    <bullet> 595.4 (Cystitis in diseases classified elsewhere)
    <bullet> 595.81 (Cystitis cystica)
    <bullet> 595.89 (Other specified type of cystitis, other)
    <bullet> 595.9 (Cystitis, unspecified)
    <bullet> 597.0 (Urethral abscess)
    <bullet> 597.80 (Urethritis, unspecified)
    <bullet> 599.0 (Urinary tract infection, site not specified)
    We believe the condition of catheter-associated urinary tract 
infection meets all of our criteria for selection as one of the initial 
hospital-acquired conditions. We can easily identify the cases with 
ICD-9-CM codes. The condition is a CC under both the CMS DRGs and the 
MS-DRGs. The condition meets our burden criterion with its high cost 
and high frequency. There are prevention guidelines on which the 
medical community agrees to avoid catheter-associated urinary tract 
infections. We believe this condition best meets the criteria 
discussed. Therefore, we proposed the selection of catheter-associated 
urinary tract infections as one of the initial hospital-acquired 
conditions.
    We encouraged comments on both the selection of this condition and 
the related conditions that we proposed to exclude from being counted 
as CCs.
    Comment: Most commenters suggested that a large number of 
physicians believe urinary tract infections may not be preventable 
after several days of catheter placement. A few commenters submitted 
the following statement from the proposed rule (72 FR 24719): ``once 
catheters are in place for 3-4 days, most clinicians and infection 
control experts do not believe UTIs are preventable.'' The commenters 
also noted the potential difficulty in identifying this condition at 
admission.
    Still other commenters believed this condition is difficult to code 
because the ICD-9-CM codes do not distinguish between catheter-
associated inflammation and infection. The commenters asked CMS to 
consider a new code for ``inflammatory reaction from indwelling 
catheter'' distinct from ``catheter associated urinary tract 
infection.''
    In addition, the commenters noted that prevention guidelines are 
still being debated. The commenters referenced the prevention guideline 
published in 1981 and posted on the Web site at: http://www.cdc.gov/ncidod/dhqp/gl_catheter_assoc.html.
    A few commenters also recommended exceptions for this condition, 
including patients with immunosuppression, patients who have a catheter 
placed for therapeutic installation of antimicrobial/chemotherapy 
agent, patients with sustained urinary tract trauma, and patients in 
need of permanent use of a catheter.
    Commenters stated that Medicare reimbursement does not cover the 
increased cost of antibiotic-coated catheters which have been shown to 
reduce the incidence of catheter infections. These same commenters 
asked CMS to change Medicare payment policy to encourage the 
application of proven existing technology.
    Commenters provided two potential examples of unintended 
consequences if this condition is to be implemented. First, the 
commenters believed that physicians and hospitals will increase 
urinalysis testing to identify urinary tract infections prior to 
admission. Second, the commenters suggested that physicians and 
hospitals will use more antibiotics to ``clean'' the urine of bacteria 
upon admission.
    Response: CMS seeks to reduce the incidence of preventable catheter 
associated urinary tract infections by reducing unnecessary and 
inappropriate use of indwelling urinary catheters in hospitalized 
Medicare patients. There is widespread evidence that catheters may lead 
to an increased risk of infection if they are in place for several 
days. In addition, there are prevention guidelines to assist physicians 
in determining how long a urinary catheter should be left in place that 
can prevent catheter-associated urinary tract infections. Therefore, we 
believe that catheter-associated urinary tract infections are 
reasonably preventable by following well-established prevention 
guidelines, and we are selecting this condition.
    Concerning the request for the creation of a new code for 
``inflammatory reaction from indwelling catheter,'' we recommend the 
commenter contact the CDC. The CDC is responsible for maintaining the 
diagnosis part of the ICD-9-CM codes. We encourage commenters to send 
specific requests for new or revised ICD-9-CM diagnosis codes to Donna 
Pickett, CDC, at 3311 Toledo Road, Room 2402, Hyattsville, MD 20782, or 
via e-mail to <a href="/cdn-cgi/l/email-protection#395d5f490d795a5d5a175e564f"><span class="__cf_email__" data-cfemail="0d696b7d394d6e696e236a627b">[email protected]</span></a>. Additional information on requesting a new 
ICD-9-CM diagnosis code may be obtained from the Web site at: http://www.cdc.gov/nchs/icd9.htm.
    The commenters are correct that prevention guidelines for avoiding 
catheter-associated urinary tract infections are scheduled to be 
updated by CDC's Healthcare Infection Control Practices Committee 
(HICPAC). The National Quality Forum (NQF) is currently working to 
update hospital-acquired infection definitions. The effort currently 
underway will update prevention guidelines that have been in place 
since 1981. We believe the ongoing effort to update prevention 
guidelines for avoiding catheter-associated urinary tract infections 
provides further evidence that this condition is a strong candidate to 
be selected because of how well it meets the statutory criteria.
    We appreciate the many comments urging CMS to consider implementing 
exceptions for catheter-associated urinary tract infections when it is 
a hospital-acquired condition but is not preventable. We will carefully 
consider these suggestions as we plan for the implementation of this 
new requirement in FY 2009.
    With respect to the comment about encouraging the use antibiotic-
coated catheters, we continue to work in cooperation with device 
companies and other associations to ensure that Medicare beneficiaries 
receive the most current therapeutic modalities. We annually update 
Medicare inpatient hospital payment rates to reflect hospital resource 
use for the latest medical technology and other innovations in how care 
is delivered.
    We do not agree there will be significant unintended consequences 
of selecting catheter-associated urinary tract infections. As stated 
earlier, we believe this condition is generally avoidable if medical 
professionals carefully follow longstanding prevention guidelines. We 
believe hospitals, physicians, and others that treat Medicare patients 
will focus on taking medically appropriate steps to determine the 
length of time a catheter is in place. We do not believe it is 
inappropriate to perform a urinalysis upon admission to the hospital if 
clinically indicated. We would not

[[Page 47205]]

consider doing so an unintended consequence.
    We appreciate all the public comments on this condition, and have 
considered all of these points of view. We believe this condition meets 
the criteria of the DRA:
    <bullet> There are unique codes that identify catheter-associated 
urinary tract infections that are currently considered to be a CC under 
the MS-DRGs;
    <bullet> Prevention guidelines currently exist and will be updated 
prior to the October 1, 2008 implementation date of this provision; and
    <bullet> As shown above, catheter-associated urinary tract 
infections are high cost/high volume conditions.
    Therefore, in this final rule with comment period, we are selecting 
the condition of catheter-associated urinary tract infections to be 
subject to the provision beginning October 1, 2008.
(b) Pressure Ulcers
    Coding--Pressure ulcers are also referred to as decubitus ulcers. 
The following codes clearly identify pressure ulcers.
    <bullet> 707.00 (Decubitus ulcer, unspecified site)
    <bullet> 707.01 (Decubitus ulcer, elbow)
    <bullet> 707.02 (Decubitus ulcer, upper back)
    <bullet> 707.03 (Decubitus ulcer, lower back)
    <bullet> 707.04 (Decubitus ulcer, hip)
    <bullet> 707.05 (Decubitus ulcer, buttock)
    <bullet> 707.06 (Decubitus ulcer, ankle)
    <bullet> 707.07 (Decubitus ulcer, heel)
    <bullet> 707.09 (Decubitus ulcer, other site)
    Burden (High Cost/High Volume)--This condition is both high-cost 
and high volume. For FY 2006, there were 322,946 reported cases of 
Medicare patients who had a pressure ulcer as a secondary diagnosis. 
These cases had average charges for the hospital stay of $40,381.
    Prevention guidelines--Prevention guidelines can be found at the 
following Web sites: http://www.npuap.org/positn1.html and http://www.ncbi.nlm.nih.gov/books/bv.fcgi?rid=hstat2.chapter.4409.
    CC--Decubitus ulcer codes are classified as CCs under the CMS DRGs. 
Codes 707.00, 707.01, and 707.09 are CCs under the MS-DRGs. Codes 
707.02 through 707.07 are considered MCCs under the MS-DRGs. As 
discussed earlier, MCCs result in even larger payments than CCs.
    Considerations--Pressure ulcers are an important hospital acquired 
complication. Prevention guidelines exist (non-CDC) and can be 
implemented by hospitals. Clinicians may state that some pressure 
ulcers present on admission cannot be identified (skin is not yet 
broken (Stage I) but damage to tissue is already done and skin will 
eventually break down). However, by selecting this condition, we would 
provide hospitals the incentive to perform careful examination of the 
skin of patients on admission to identify decubitus ulcers. If the 
condition is present on admission, the provision will not apply. In the 
proposed rule, we proposed to include pressure ulcers as one of our 
initial hospital-acquired conditions. This condition can be clearly 
identified through ICD-9-CM codes. These codes are classified as a CC 
under the CMS DRGs and as a CC or MCC under the MS-DRGs. Pressure 
ulcers meet the burden criteria because they are both high cost and 
high frequency cases. There are clear prevention guidelines. While 
there is some question as to whether all cases with developing pressure 
ulcers can be identified on admission, we believe the selection of this 
condition will result in a closer examination of the patient's skin on 
admission and better quality of care. We welcomed comments on the 
proposed inclusion of this condition.
    Comment: A majority of commenters supported the intent of selecting 
the condition of pressure ulcers, but had concerns about how the 
provision would be implemented in practice. A large majority of 
commenters believed hospitals will more carefully examine the skin of 
patients if this condition is selected. However, many commenters cited 
difficulty in detecting stage 1 pressure ulcers on admission, 
particularly in certain patient populations.
    The commenters cited the Guidance to Surveyors for Long-Term Care 
Facilities (CMS Manual System Pub. 100-07, State Operations Provider 
Certification issued November 2004, page 5), noting CMS'' previous 
acknowledgment that some pressure ulcers are ``unavoidable.'' The 
commenters cited evidence of an increased risk of pressure ulcer 
reoccurrence after a patient has had at least one stage IV ulcer.
    The commenters expressed concern about how this condition will be 
coded upon admission. The commenters also suggested that present-on-
admission coding of pressure ulcers will rely solely on physicians' 
notes and diagnoses, according to Medicare coding rules. The commenters 
were concerned that the current ICD-9-CM codes for pressure ulcers are 
not precise enough to delineate differences in wound depth, which is an 
important factor for determining the severity of an ulcer.
    The commenters recommended that CMS supplement ICD-9-CM codes for 
pressure ulcers with severity adjustments for complications and 
comorbidities that are present on admission. Because patients with 
pressure ulcers often have other complicating conditions, the 
commenters stated that it is unlikely that pressure ulcers would 
potentially be the only secondary diagnosis that would change the DRG 
assignment from one without a CC to one with a CC. Lastly, the 
commenters noted that accurate identification of a pressure ulcer 
requires the education and expertise of a trained physician.
    The commenters suggested that CMS should exclude patients enrolled 
in the Medicare hospice benefit and patients with certain diagnoses 
that make them more highly prone to pressure ulcers such as hemiplegia, 
quadriplegia, wasting syndrome, with advanced AIDS and/or protein 
malnutrition associated with a variety of serious end stage illnesses.
    Response: We appreciate the overwhelming public support for the 
intent of selecting this condition, provided we can address the 
concerns raised in the public comments. We acknowledge the commenters' 
concern that CMS previously stated some pressure ulcers are 
``unavoidable.'' However, we believe improved screening to identify 
pressure ulcers upon admission for inpatient care will increase the 
quality of care. By screening patients entering the hospital for 
pressure ulcers, the ulcers will be discovered earlier and improve 
treatment of this preventable condition. We agree that the POA coding 
of pressure ulcers will rely on the attending physician, who has 
primary responsibility for documenting and diagnosing a patient's 
clinical conditions. Pressure ulcers that are identified through 
screening upon admission that are documented properly will continue to 
be assigned to a higher paying DRG.
    With respect to the comment about patients with pressure ulcers 
having other complications and comorbidities, we note that many of the 
new MS-DRGs are subdivided into two or more severity levels. We will 
continue to evaluate the need for additional severity levels within 
base MS-DRGs. On the specific issue of the MS-DRGs that include 
pressure ulcers, we note that these MS-DRGs are already divided into 
three severity levels as follows:
    <bullet> MS-DRG 573 (Skin Graft &/or Debridement for Skin Ulcer or 
Cellulitis with MCC)

[[Page 47206]]

    <bullet> MS-DRG 574 (Skin Graft &/or Debridement for Skin Ulcer or 
Cellulitis with CC)
    <bullet> MS-DRG 575 (Skin Graft &/or Debridement for Skin Ulcer or 
Cellulitis without CC/MCC)
    We are aware that many patients with pressure ulcers may also have 
other comorbid and complicating conditions that will continue to assign 
the patient to a higher paying DRG. We do not believe this fact should 
preclude physicians and hospitals from screening patients for pressure 
ulcers upon admission. As we indicated in the proposed rule (72 FR 
24726), we believe only a minority of cases will have one of the 
selected conditions as the only CC or MCC present on the claim. 
However, we believe it will continue to lead to improvements in the 
quality of care. We believe the selection of this condition will lead 
the physician and hospital to perform a proper skin exam upon 
admission, leading to earlier identification and treatment of pressure 
ulcers.
    With respect to the comment that accurate identification of a 
pressure ulcer requires the education and expertise of a trained 
physician, we agree. Hospitals should be using properly educated and 
trained physicians to identify and treat pressure ulcers (as well as 
all other medical conditions).
    We appreciate all the public comment on this condition, and have 
considered all of these points of view. We believe the condition of 
pressure ulcers meets the criteria of the DRA:
    <bullet> There are unique codes that identify pressure ulcers that 
are currently considered to be a CC or an MCC under the MS-DRGs;
    <bullet> Prevention guidelines to avoid pressure ulcers currently 
exist; and
    <bullet> As shown above, pressure ulcers are high-cost/high-volume 
conditions. Therefore, in this final rule with comment period, we are 
selecting the condition of pressure ulcers to be subject to the payment 
adjustment for hospital acquired conditions beginning October 1, 2008. 
We referred the matter concerning the need for additional, detailed 
ICD-9-CM codes to the CDC. We believe further specificity in the ICD-9-
CM codes will aid in distinguishing early from late stage pressure 
ulcers prior to the implementation date of this provision on October 1, 
2008.
Serious Preventable Events
    Serious preventable events are events that should not occur in 
health care. The injury prevention community has developed information 
on serious preventable events. CMS reviewed the list of serious 
preventable events and identified those events for which there was an 
ICD-9-CM code that would assist in identifying them. We identified four 
types of serious preventable events to include in our evaluation. These 
include leaving an object in a patient; performing the wrong surgery 
(surgery on the wrong body part, wrong patient, or the wrong surgery); 
air embolism following surgery; and providing incompatible blood or 
blood products. Three of these serious preventable events have unique 
ICD-9-CM codes to identify them. There is not a clear and unique code 
for surgery performed on the wrong body part, wrong patient, or the 
wrong surgery. Each of these events is discussed separately.
(c) Serious Preventable Event--Object Left in during Surgery
    Coding Retention of a foreign object in a patient after surgery is 
identified through ICD-9-CM code 998.4 (Foreign body accidentally left 
during a procedure).
    Burden (High Cost/High Volume)--For FY 2006, there were 764 cases 
reported of Medicare patients who had an object left in during surgery 
reported as a secondary diagnosis. The average charges for the hospital 
stay were $61,962. This is a rare event. Therefore, it is not high 
volume. However, an individual case will likely have high costs, given 
that the patient will need additional surgery to remove the foreign 
body. Potential adverse events stemming from the foreign body could 
further raise costs for an individual case.
    Prevention guidelines--There are widely accepted and clear 
guidelines for the prevention of this event. This event should not 
occur. Prevention guidelines for avoiding leaving objects in during 
surgery are located at the following Web site: http://www.qualityindicators.ahrq.gov/psi_download.htm.
    CC--This code is a CC under the CMS DRGs as well as under the MS 
DRGs.
    Considerations--There are no significant considerations for this 
condition. There is a unique ICD-9-CM code and wide agreement on the 
prevention guidelines. We proposed to include this condition as one of 
our initial hospital-acquired conditions. The cases can be clearly 
identified through an ICD-9-CM code. This code is a CC under both the 
CMS DRGs and the MS-DRGs. There are clear prevention guidelines. While 
the cases may not meet the high frequency criterion, they do meet the 
high-cost criterion. Individual cases can be high cost. In the proposed 
rule, we welcomed comments on including this condition as one of our 
initial hospital-acquired conditions.
    Comment: A large majority of commenters supported CMS' efforts to 
identify the condition of ``object left in surgery'' as one that should 
not occur in the hospital setting. The commenters supported selecting 
this condition in this year's IPPS rule.
    The commenters applauded CMS for identifying a hospital acquired 
condition that has discrete ICD-9-CM codes and known methods of 
prevention. In addition, a few commenters noted that prevention 
guidelines for this condition are fully identified and endorsed by the 
NQF. MedPAC also complimented CMS for its efforts to identify ``object 
left in surgery'' and stated that CMS should not allow a case to be 
classified as a CC/MCC if this ``never event'' occurs during a 
patient's stay.
    The commenters urged CMS to make exceptions for objects 
deliberately left in place in surgery as opposed to accidental retained 
foreign objects. The commenters noted that a patient may return to the 
hospital months or years after an object was left in during surgery, 
and it is necessary to have POA codes to identify patients that return 
to a different hospital to have the object removed. All of the 
commenters recognized that this event can cause great harm to patients.
    Response: We believe exceptions for this condition are not 
necessary. The code that identifies this event, 998.4 (Foreign body 
accidentally left during a procedure) specifically states that the 
object was accidentally left in during the surgery. This code would not 
be assigned if a device or implant was deliberately implanted into a 
patient. In addition, as stated earlier, we recognize the important 
role of the attending physician in designating whether or not the 
serious preventable event occurred during the current admission. We 
agree with the commenters that a patient may return to the hospital 
months or years after the surgery to have the foreign object removed. 
In this circumstance, the hospital would code the condition as present 
on admission and the provision would not apply. By documenting the 
event early, the correct POA code can be applied. We agree with the 
commenters that this serious preventable event should be selected as a 
hospital-acquired condition in this final rule with comment period. 
Therefore, we are including this condition in the list of those to be 
implemented in FY 2009.

[[Page 47207]]

(d) Serious Preventable Event--Air Embolism
    Coding--An air embolism is identified through ICD-9-CM code 999.1 
(Complications of medical care, NOS, air embolism).
    Burden (High Cost/High Volume)--This event is rare. For FY 2006, 
there were 45 reported cases of air embolism for Medicare patients. The 
average charges for the hospital stay were $66,007.
    Prevention guidelines--there are clear prevention guidelines for 
air embolisms. This event should not occur. Serious preventable event 
guidelines can be found at the following Web site: http://www.qualityindicators.ahrq.gov/psi_download.htm.
    CC--This code is a CC under the CMS DRGs and is an MCC under the 
MS-DRGs.
    Considerations--There are no significant considerations for this 
condition. There is a unique ICD-9-CM code and wide agreement on the 
prevention guidelines. In addition, as stated earlier, the condition is 
a CC under the CMS DRGs and an MCC under the MS-DRGs. While the 
condition is rare, it does meet the cost burden criterion because 
individual cases can be expensive. Therefore, air embolism is a high-
cost condition because average charges per case are high. In the 
proposed rule, we welcomed comments on the proposal to include this 
condition.
    Comment: A large number of commenters supported CMS' efforts to 
select this condition as one that should not occur in the hospital 
setting. The commenters considered this an appropriate condition to 
include for the final rule. The commenters applauded CMS for 
identifying a hospital acquired condition that has discrete ICD-9-CM 
codes and known methods of prevention.
    In addition, the commenters noted that prevention guidelines for 
this condition are fully identified and endorsed by the NQF. MedPAC 
also complimented CMS for its efforts to identify ``air embolism'' and 
stated that CMS should not allow a case to be classified as a CC/MCC if 
this ``never event'' occurs during a patient's stay.
    The commenters urged CMS to make exceptions for situations when air 
embolism is technically unavoidable because of a special surgical 
procedure. All of the commenters recognized that this event can cause 
great harm to patients.
    Response: We appreciate the support for the selection of this 
condition. We also welcome specific recommendations that would clearly 
define an appropriate exception to this condition, including any 
appropriate ICD-9-CM diagnosis and procedure codes which the commenter 
believes clearly define such an occurrence and the justification for an 
exception. At this point, we do not believe such an exception is 
necessary.
    We agree with commenters that this serious preventable event should 
be included in the FY 2008 final rule. Therefore, we are including the 
condition of air embolism in the list of those to be implemented in FY 
2009.
(e) Serious Preventable Event--Blood Incompatibility
    Coding--Delivering ABO-incompatible blood or blood products is 
identified by ICM-9-CM code 999.6 (Complications of medical care, NOS, 
ABO incompatibility reaction).
    Burden (High Cost/High Volume)--This event is rare. Therefore, it 
is not high volume. For FY 2006, there were 33 reported cases of blood 
incompatibility among Medicare patients, with average charges of 
$46,492 for the hospital stay. Therefore, individual cases have high 
costs.
    Prevention guidelines--There are prevention guidelines for avoiding 
the delivery of incompatible blood or blood products. The event should 
not occur. Serious preventable event guidelines can be found at the 
following Web site: http://www.qualityindicators.ahrq.gov/psi_download.htm
    CC--This code is a CC under the CMS DRGs as well as the MS-DRGs.
    Considerations--There are no significant considerations for this 
condition. There is a unique ICD-9-CM code which is classified as a CC 
under the CMS DRGs as well as the MS-DRGs. There is wide agreement on 
the prevention guidelines. While this may not be a high-volume 
condition, average charges per case are high. Therefore, we believe 
this condition is a high-cost condition and, therefore, meets our 
burden criterion. We proposed to include this condition as one of our 
initial hospital acquired conditions.
    Comment: A large number of commenters supported CMS' efforts to 
identify ``blood incompatibility'' as one condition that should not 
occur in the hospital setting. The commenters considered this an 
appropriate condition to include for FY 2009. The commenters applauded 
CMS for identifying a hospital acquired condition that has discrete 
ICD-9-CM codes and known methods of prevention. In addition, the 
commenters noted that prevention guidelines for this condition are 
fully identified and endorsed by the NQF. MedPAC also complimented CMS 
for its efforts to identify ``blood incompatibility'' and stated that 
CMS should not allow a case to be classified as a CC/MCC if this 
``never event'' occurs during a patient's stay.
    The commenters urged CMS to make exceptions for situations when 
blood incompatibility is technically unavoidable in emergencies when 
patients deliberately receive unmatched blood. All of the commenters 
recognized that this event can cause great harm to patients.
    Response: As suggested by commenters, hospitals should not be 
transfusing incompatible blood. The condition meets the criteria for 
being selected. It is a potential hospital acquired condition that has 
discrete ICD-9-CM codes and known methods of prevention. Prevention 
guidelines for this condition are fully identified and endorsed by the 
NQF. We acknowledge that there may a rare emergency where a hospital 
does not have compatible blood available for transfusion. We welcome 
specific recommendations that would define circumstances where blood 
incompatibility is unavoidable, including any appropriate ICD-9-CM 
diagnosis and procedure codes, which the commenters believe clearly 
define such an occurrence. If providers can provide such a clinical 
scenario that can be identified by existing or new ICD-9-CM codes, we 
will consider excluding this situation from the provision. We agree 
with the commenters that this serious preventable event should be 
included in the FY 2008 final rule. Therefore, we are including the 
condition of blood incompatibility in the list of those to be 
implemented in FY 2009.
(f) Staphylococcus Aureus Bloodstream Infection/Septicemia
    Coding--ICD-9-CM Code 038.11 (Staphylococcus aureus septicemia) 
identifies this condition. However, the codes selected to identify 
septicemia are somewhat complex. The following ICD-9-CM codes may also 
be reported to identify septicemia:
    <bullet> 995.91 (Sepsis) and 995.92 (Severe sepsis). These codes 
are reported as secondary codes and further define cases with 
septicemia.
    <bullet> 998.59 (Other postoperative infections). This code 
includes septicemia that develops postoperatively.
    <bullet> 999.3 (Other infection). This code includes but is not 
limited to sepsis/septicemia resulting from infusion, injection, 
transfusion, and vaccination (ventilator-associated pneumonia is also 
included here).

[[Page 47208]]

    Burden (High Cost/High Volume)--CDC reports that there are 290,000 
cases of staphylococcus aureus infection annually in hospitalized 
patients of which approximately 25 percent are bloodstream infections 
or sepsis. For FY 2006, there were 29,500 cases of Medicare patients 
who had staphylococcus aureus infection reported as a secondary 
diagnosis. The average charges for the hospital stay were $82,678. 
Inpatient staphylococcus aureus result in an estimated 2.7 million days 
in excess length of stay, $9.5 billion in excess charges, and 
approximately 12,000 inpatient deaths per year.
    Prevention guidelines--CDC guidelines are located at the following 
Web site: http://www.cdc.gov/ncidod/dhqp/gl_intravascular.html.
    CC--Codes 038.11, 995.91, 998.59, and 999.3 are classified as CCs 
under the CMS DRGs and as MCCs under the MS-DRGs.
    Considerations--Preventive health care associated bloodstream 
infections/septicemia that are preventable are primarily those that are 
related to a central venous/vascular catheter, a surgical procedure 
(postoperative sepsis) or those that are secondary to another 
preventable infection (for example, sepsis due to catheter-associated 
urinary tract infection). Otherwise, physicians and other public health 
experts may argue whether septicemia is reasonably preventable. The 
septicemia may not be simply a hospital acquired infection. It may 
simply be a progression of an infection that occurred prior to 
admission. Furthermore, physicians cannot always tell whether the 
condition was hospital-acquired. We examined whether it might be better 
to limit the septicemia cases to a specific organism (for example, code 
038.11 (Staphylococcus aureus septicemia)). CDC staff recommended that 
we focus on staphylococcus aureus septicemia because this condition is 
a significant public health issue. As stated earlier, there is a 
specific code for staphylococcus aureus septicemia, code 038.11. 
Therefore, the cases would be easy to identify. However, as stated 
earlier, while this type of septicemia is identified through code 
038.11, coders may also provide sepsis code 995.91 or 995.92 to more 
fully describe the staphylococcus aureus septicemia. Codes 995.91 and 
995.92 are reported as secondary codes and further define cases with 
septicemia. Codes 995.91 and 995.92 are CCs under the CMS DRGs and MCCs 
under the MS-DRGs.
    <bullet> 998.59 (Other postoperative infections). This code 
includes septicemia that develops postoperatively.
    <bullet> 999.3 (Other infection). This code includes but is not 
limited to sepsis/septicemia resulting from infusion, injection, 
transfusion, and vaccination (ventilator-associated pneumonia is also 
indexed here).
    To implement this condition as one of our initial ones, we would 
have to exclude the specific code for staphylococcus aureus septicemia, 
038.11, and the additional septicemia codes, 995.91, 995.92, 998.59, 
and 999.3.
    We acknowledge that there are additional issues involved with the 
selection of this condition that may involve developing an exclusion 
list of conditions present on admission for which we would not apply a 
CC exclusion to staphylococcus aureus septicemia. For example, a 
patient may come into the hospital with a staphylococcus aureus 
infection such as pneumonia. The pneumonia might develop into 
staphylococcus aureus septicemia during the admission. It may be 
appropriate to consider excluding cases such as those of patients 
admitted with staphylococcus aureus pneumonia that subsequently develop 
staphylococcus aureus septicemia from the provision. In order to 
exclude cases that did not have a staphylococcus aureus infection prior 
to admission, we would have to develop a list of specific codes that 
identified all types of staphylococcus aureus infections such as code 
482.41 (Pneumonia due to staphylococcus aureus). We likely would not 
apply the new provision to cases of staphylococcus aureus septicemia if 
a patient were admitted with staphylococcus aureus pneumonia. However, 
if the patient had other types of infections, not classified as being 
staphylococcus aureus, and then developed staphylococcus aureus 
septicemia during the admission, we would apply the provision and 
exclude the staphylococcus aureus septicemia as a CC. We were not able 
to identify any other specific ICD-9-CM codes that identify specific 
infections as being due to staphylococcus aureus.
    Other types of infections, such as urinary tract infections, would 
require the reporting of an additional code, 041.11 (Staphylococcus 
aureus), to identify the staphylococcus aureus infection. This 
additional coding presents administrative issues because it will not 
always be clear which condition code 041.11 (Staphylococcus aureus) is 
describing. We do not believe it would be appropriate to make code 
041.11, in combination with other codes, subject to the hospital-
acquired conditions provision until we better understand how to address 
the administrative issues that would be associated with their 
selection. Therefore, we would exclude staphylococcus aureus septicemia 
cases with code 482.41 reported as being subject to the hospital-
acquired conditions provision. Stated conversely, we would allow 
staphylococcus aureus septicemia to count as a CC if the patient was 
admitted with staphylococcus aureus pneumonia.
    We recognize that there may be other conditions which we should 
consider for this type of exclusion. We proposed to include 
staphylococcus aureus bloodstream infection/septicemia (code 038.11) as 
one of our initial hospital-acquired conditions. We also proposed to 
exclude codes 995.91, 998.59, and 999.3 from counting as an MCC/CC when 
they were reported with code 038.11. The condition can be clearly 
identified through ICD 9 CM codes that are classified as CC under the 
CMS DRGs and MCCs under the MS-DRGs. The condition meets our burden 
criterion by being both high cost and high volume. There are prevention 
guidelines which we acknowledge are subject to some debate among the 
medical community. We also acknowledge that we would have to exclude 
this condition if a patient were admitted with a staphylococcus aureus 
infection of a more limited location, such as pneumonia. In the 
proposed rule, we encouraged commenters to make suggestions on this 
issue and to recommend any other appropriate exclusion for 
staphylococcus aureus septicemia. We also encouraged comments on the 
appropriateness of selecting staphylococcus aureus septicemia as one of 
our proposed initial hospital acquired conditions.
    Comment: Many commenters opposed CMS' proposed selection of this 
condition as part of the FY 2008 final rule. There were a minority of 
commenters who strongly supported the selection of this condition. 
These commenters noted the existence of technologies that allow the 
physician to determine the presence of Staphylococcus Aureus upon 
admission. Many more commenters stated that accurately identifying 
staphylococcus aureus septicemia on admission will be difficult, 
particularly in patients who may have a staphylococcus aureus infection 
in a limited location. Several commenters referenced the FY 2008 IPPS 
proposed rule, which stated ``physicians cannot always tell whether the 
condition was hospital acquired.'' Other commenters also noted that 
there is still debate

[[Page 47209]]

among physicians regarding the prevention guidelines for staphylococcus 
aureus septicemia. The proliferation of changes in coding guidelines 
presents coding problems for hospitals to accurately identify present-
on-admission status according to some comments. Specifically, the 
commenters noted that codes to identify sepsis are very complex and 
have had recent changes. For instance, there is a code that currently 
includes septicemia that develops postoperatively, but does not clearly 
distinguish between intravascular and catheter-associated sources of 
septicemia. The commenters also suggested that additional coding may be 
necessary to accurately identify this condition in the many forms it 
often presents upon admission. Some commenters suggested that the 
addition of codes may create a challenge for coding staff to identify 
the correct code.
    A large majority of commenters urged CMS to narrow the category for 
staphylococcus aureus septicemia to include only patients for whom it 
is reasonably clear that the hospital was the source of the infection 
and that it could have been reasonably prevented.
    Response: We appreciate the plethora of comments regarding 
staphylococcus aureus septicemia. The commenters were very insightful 
and presented the challenges of selecting this condition in the FY 2008 
final rule.
    We agree that the recent proliferation of ICD-9-CM codes for this 
condition will make it difficult to code and could present an 
administrative burden on hospitals. In addition, we are sensitive to 
the difficulty of identifying when a disease has progressed to sepsis 
or septicemia. Given the course of progression to septicemia, it can be 
very difficult for a clinician to appropriately diagnose staphylococcus 
aureus septicemia as present on admission.
    While we acknowledge the many concerns raised by the commenters, we 
continue to believe that hospital acquired staphylococcus aureus 
septicemia remains a significant public health issue. We are aware of 
the continued need to prevent Staphylococcus Aureus septicemia in the 
hospital setting. Therefore, we plan to engage in a collaborative 
discussion with relevant experts to identify the circumstances when 
staphylococcus aureus septicemia is preventable. If we can identify 
when staphylococcus aureus septicemia is a reasonably preventable 
condition and have codes to distinguish those situations, we will 
consider this condition for future years. We appreciate the many 
comments and suggestions as we consider staphylococcus aureus 
septicemia for selection in the future, and look forward to receiving 
more public input to identify only instances when this condition is 
preventable.
    Therefore, we are not selecting this condition in this final rule 
with comment period. We plan to collaborate with the public on this 
important public health issue and continue to consider the condition 
for selection in the FY 2009 final rule. We encourage and welcome 
public comment to further evaluate this condition.
(g) Ventilator Associated Pneumonia (VAP) and Other Types of Pneumonia
    Coding--Pneumonia is identified through the following codes:
    <bullet> 073.0 (Ornithosis with pneumonia)
    <bullet> 112.4 (Candidiasis of lung)
    <bullet> 136.3 (Pneumocystosis)
    <bullet> 480.0 (Pneumonia due to adenovirus)
    <bullet> 480.1 (Pneumonia due to respiratory syncytial virus)
    <bullet> 480.2 (Pneumonia due to parainfluenza virus)
    <bullet> 480.3 (Pneumonia due to SARS-associated coronavirus)
    <bullet> 480.8 (Pneumonia due to other virus not elsewhere 
classified)
    <bullet> 480.9 (Viral pneumonia, unspecified)
    <bullet> 481 (Pneumococcal pneumonia [Streptococcus pneumoniae 
pneumonia])
    <bullet> 482.0 (Pneumonia due to Klebsiella pneumoniae)
    <bullet> 482.1 (Pneumonia due to Pseudomonas)
    <bullet> 482.2 (Pneumonia due to Hemophilus influenzae [H. 
influenzae])
    <bullet> 482.30 (Pneumonia due to Streptococcus, unspecified)
    <bullet> 482.31 (Pneumonia due to Streptococcus, Group A)
    <bullet> 482.32 (Pneumonia due to Streptococcus, Group B)
    <bullet> 482.39 (Pneumonia due to other Streptococcus)
    <bullet> 482.40 (Pneumonia due to Staphylococcus, unspecified)
    <bullet> 482.41 (Pneumonia due to Staphylococcus aureus)
    <bullet> 482.49 (Other Staphylococcus pneumonia)
    <bullet> 482.81 (Pneumonia due to Anaerobes)
    <bullet> 482.82 (Pneumonia due to Escherichia coli [E. coli])
    <bullet> 482.83 (Pneumonia due to other gram-negative bacteria)
    <bullet> 482.84 (Pneumonia due to Legionnaires' disease)
    <bullet> 482.89 (Pneumonia due to other specified bacteria)
    <bullet> 482.9 (Bacterial pneumonia unspecified)
    <bullet> 483.0 (Pneumonia due to Mycoplasma pneumoniae)
    There is not a unique code that identifies ventilator-associated 
pneumonia. The creation of a code for ventilator-associated pneumonia 
was discussed at the September 29, 2006 meeting of the ICD-9-CM 
Coordination and Maintenance Committee meeting. Many issues and 
concerns were raised at the meeting concerning the creation of this 
proposed new code. It has been difficult to define ventilator-
associated pneumonia. We plan to continue working closely with the CDC 
to develop a code that can accurately describe this condition for 
implementation in FY 2009. CDC will address the creation of a unique 
code for this condition at the September 28-29, 2007 ICD-9-CM 
Coordination and Maintenance Committee meeting.
    While we list 27 pneumonia codes above, our clinical advisors do 
not believe that all of the codes mentioned could possibly be 
associated with ventilator-associated pneumonia. Our clinical advisors 
specifically question whether the following codes would ever represent 
cases of ventilator-associated pneumonia: 073.0, 480.0, 480.1, 480.2, 
480.3, 480.8, 480.9, and 483.0. Therefore, we have a range of pneumonia 
codes, all of which may not represent cases that could involve 
ventilator-associated pneumonia. In addition, we do not have a specific 
code that uniquely identifies cases of ventilator-associated pneumonia.
    Burden (High Cost/High Volume)--CDC reports that there are 250,205 
ventilator-associated pneumonias per year. Because there is not a 
unique ICD-9-CM code for ventilator-associated pneumonia, there is not 
accurate data for FY 2006 on the number of Medicare patients who had 
this condition as a secondary diagnosis. However, we did examine data 
for FY 2006 on the number of Medicare patients who listed pneumonia as 
a secondary diagnosis. There were 92,586 cases with a secondary 
diagnosis of pneumonia, with average charges of $88,781. According to 
the journal Critical Care Medicine, patients with ventilator-associated 
pneumonia have statistically significantly longer intensive care 
lengths of stay (mean = 6.10 days) than those who do not (mean = 5.32-
6.87 days). In addition, patients who develop ventilator-associated 
pneumonia incur, on average, greater than or equal to $10,019 in 
additional hospital costs compared to those who do not.\23\

[[Page 47210]]

Therefore, we believe that this is a high-volume condition.
---------------------------------------------------------------------------

    \23\ Safdar N.: Clinical and Economic Consequences of 
Ventilator-Associated Pneumonia: a Systematic Review, Critical Care 
Medicine, 2005, 33(10), pp. 2184-2193.
---------------------------------------------------------------------------

    Prevention guidelines--Prevention guidelines are located at the 
following Web site: http://www.cdc.gov/ncidod/dhqp/gl_hcpneumonia.html. However, it is not clear how effective these 
guidelines are in preventing pneumonia. Ventilator-associated pneumonia 
may be particularly difficult to prevent.
    CC--All of the pneumonia codes listed above are CCs under the CMS 
DRGs and under the MS-DRGs, except for the following pneumonia codes 
which are non-CCs: 073.0, 480.0, 480.1, 480.2, 480.3, 480.8, 480.9, 
483.0. However, as mentioned earlier, there is not a unique ICD-9-CM 
code for ventilator-associated pneumonia. Therefore, this condition 
does not currently meet the statutory criteria for being selected.
    Considerations--Hospital-acquired pneumonias, and specifically 
ventilator-associated pneumonias, are an important problem. However, 
based on our work with the medical community to develop specific codes 
for this condition, we have learned that it is difficult to define what 
constitutes ventilator-associated pneumonia. Although prevention 
guidelines exist, it is not clear how effective these are in preventing 
pneumonia. Clinicians cannot always tell which pneumonias are acquired 
in a hospital. In addition, as mentioned above, there is not a unique 
code that identifies ventilator-associated pneumonia. There are a 
number of codes that capture a range of pneumonia cases. It is not 
possible to specifically identify if these pneumonia cases are 
ventilator-associated or arose from other sources. Because we cannot 
identify cases with ventilator-associated pneumonia and there are 
questions about its preventability, we did not propose to select this 
condition as one of our initial hospital-acquired conditions. However, 
we welcomed public comments on how to create an ICD-9-CM code that 
identifies ventilator-associated pneumonia, and we encouraged 
participation in our September 28-29, 2007 ICD-9-CM Coordination and 
Maintenance Committee meeting where this issue will be discussed. We 
indicated that we would reevaluate the selection of this condition in 
FY 2009.
    Comment: Some commenters urged CMS to select ventilator-associated 
pneumonia at this time. Most commenters recommended that CMS delay 
selecting this condition until a unique code is established.
    Some commenters submitted an evidence-based peer-reviewed American 
Association for Respiratory Care (AARC) Clinical Practice Guideline 
(CPG) on strategies that should be disseminated and available to 
hospitals for the prevention of ventilator associated pneumonia. The 
CPG can be found at http://www.rcjournal.com/cpgs/09.03.0869.html. 
Concurrently, the AARC acknowledges that more research needs to be done 
in this area.
    A majority of commenters believed this condition can be reasonably 
prevented through evidence-based medicine guidelines. These commenters 
noted that current unique codes for this condition are absent. These 
commenters urged CMS to consider the development of an explicit ICD-9-
CM code for this ventilator-associated pneumonia and to select it at a 
later date.
    Response: At the time of publication of this final rule with 
comment period, there is not a code associated with ventilator-
associated pneumonia. Therefore, this condition does not currently meet 
the statutory criteria for being selected. However, the ICD-9-CM 
Coordination and Maintenance Committee will meet September 27-28, 2007, 
to discuss the creation of a unique ICD-9-CM code for this condition. 
Further information of the Committee's activities on diagnosis code 
issues can be found at the Web site: http://www.cdc.gov/nchs/icd9.htm. 
We believe that once this condition has a unique code, it should be 
further considered for selection beginning in FY 2009.
    We believe that ventilator-associated pneumonia meets some of the 
criteria for being selected. There are guidelines for prevention of 
ventilator-associated pneumonia within CDC evidence based guidelines 
for healthcare associated pneumonia. More information can be found at: 
http://www.cdc.gov/ncidod/dhqp/gl_hcpneumonia.html. Furthermore, we 
are aware that the American Thoracic Society and the Infectious Disease 
Society of America collaborated to produce guidelines on the prevention 
of ventilator-associated pneumonia. As indicated above, most pneumonias 
are CCs. Therefore, it is reasonable to believe that ventilator-
associated pneumonia will also be classified as a CC once a new code is 
created to identify it. At that time, we can further consider whether 
the condition is reasonably preventable and should be subject to this 
provision.
    We appreciate all the public comment on this condition, and 
considered all of the respondents' point of view. While we acknowledge 
the clinical challenge of clearly identifying ventilator-associated 
pneumonia, we believe that once this condition has a unique ICD-9-CM 
code, coupled with well-known prevention guidelines that are the result 
of evidence-based medicine, we will give strong consideration for 
selecting this condition for FY 2009, and including it in the FY 2009 
IPPS proposed rule.
(h) Vascular Catheter-Associated Infections
    Coding--The proposed rule noted that the code used to identify 
vascular catheter associated infections is ICD-9-CM code 996.62 
(Infection due to other vascular device, implant, and graft). This code 
includes infections associated with all vascular devices, implants, and 
grafts. It does not uniquely identify vascular catheter associated 
infections. Therefore, there was not a unique ICD-9-CM code for this 
infection at the time of the proposed rule. CDC and CMS staff requested 
that the ICD-9-CM Coordination and Maintenance Committee discuss the 
creation of a unique ICD-9-CM code for vascular catheter associated 
infections because the issue is important for public health. The 
proposal to create a new ICD-9-CM was discussed at the March 22 23, 
2007 meeting of the ICD-9-CM Coordination and Maintenance Committee. A 
summary of this meeting can be found at: http://www.cdc.gov/nchs/icd9.htm. In the proposed rule, we indicated that coders would have to 
assign code 996.62 plus an additional code for the infection such as 
septicemia to identify vascular catheter-associated infections. 
Therefore, a list of specific infection codes would have to be 
developed to go along with code 996.62 if CDC did not create a code for 
vascular catheter-associated infections. If the vascular catheter-
associated infection was hospital-acquired, the DRG logic would have to 
be modified so that neither the code for the vascular catheter 
associated infection along with the specific infection code would count 
as a CC. However, even if these actions were taken, we were concerned 
that code 996.62 is not specific to vascular catheter-associated 
infections.
    Burden (High Cost/High Volume)--CDC reports that there are 248,678 
central line associated bloodstream infections per year. It appears to 
be both high cost and high volume. However, we were not able to 
identify Medicare data on these cases because there is no existing 
unique ICD-9-CM code.
    Prevention guidelines--CDC guidelines are located at the following 
Web site: http://www.cdc.gov/ncidod/dhqp/gl_intravascular.html.
    CC--Code 996.62 is a CC under the CMS DRGs and the MS-DRGs. 
However, as stated earlier, this code is broader than vascular catheter 
associated infections. Therefore, at the time of the

[[Page 47211]]

proposed rule, there was not a unique ICD-9-CM code to identify the 
condition, and it did not meet the statutory criteria to be selected. 
However, the proposed rule indicated that we will be seeking to create 
a code(s) to identify this condition and may select it as a condition 
under the provision beginning in FY 2009.
    Considerations--There was not yet a unique ICD-9-CM code to 
identify this condition at the time of the proposed rule. In the 
proposed rule, we indicated that if a code were created prior to 
October 1, 2007, we would be able to specifically identify these cases. 
Some patients require long-term indwelling catheters, which are more 
prone to infections. Ideally catheters should be changed at certain 
time intervals. However, circumstances might prevent such practice (for 
example, the patient has a bleeding diathesis). In addition, a patient 
may acquire an infection from another source which can colonize the 
catheter. As mentioned earlier, coders would also assign an additional 
code for the infection, such as septicemia. Therefore, a list of 
specific infection codes would have to be developed to go along with 
code 996.62. If the vascular catheter-associated infection was 
hospital-acquired, the DRG logic would have to be modified so that 
neither the code for the vascular catheter-associated infection along 
with the specific infection code would count as a CC. Without a 
specific code for infections due to a catheter, it would be difficult 
to identify these patients. Given the current lack of an ICD-9-CM code 
for this condition, we did not propose to include it as one of our 
initial hospital-acquired conditions. However, we believed it showed 
merit for inclusion in future lists of hospital acquired conditions 
once we had resolved the coding issues and were able to better identify 
the condition in the Medicare data. We indicated that we would 
reevaluate the selection of this condition in FY 2009.
    We encouraged comments on this condition which was identified as an 
important public health issue by several organizations that provided 
recommendations on hospital-acquired conditions. We indicated that we 
were particularly interested in receiving comments on how we should 
handle additional associated infections that might develop along with 
the vascular catheter-associated infection.
    Comment: Some commenters stated there was not a unique ICD-9-CM 
code for vascular catheter-associated infection. Therefore, the 
condition does not meet the criteria for being selected. These 
commenters requested that CMS consider creating an explicit code for 
catheter-associated infections and selecting the condition at that 
time. One commenter recommended that CMS examine selecting vascular-
catheter associated infections and identify the condition using the CPT 
codes for insertion of a central venous catheter. Other commenters 
recommend selecting the condition and rely on the use of specific codes 
for the insertion of catheters to supplement the existing code 996.62 
(Infection and inflammatory reaction due to other vascular device, 
implant, and graft). The commenters believed that this alternative 
approach may reduce the need to rely on a unique code for catheter 
associated blood stream infection (CA-BSI). Some commenters noted that 
it is possible to screen for bloodstream infections upon admission. 
Other commenters suggested that CMS exempt vascular surgery, 
implantable device codes, and other obvious sources of existing 
conditions that cause blood stream infection prior to catheter 
placement. Finally, the commenters suggested that CMS exclude long-term 
catheter insertions such as the tunneled central venous catheter using 
codes 365.57 through 365.66.
    Response: Since the publication of the FY 2008 IPPS proposed rule, 
CDC has created a new code for vascular catheter-associated infection. 
The new code 999.31, (Infection due to central venous catheter) will 
become effective on October 1, 2007. It is available for public viewing 
along with other new codes listed on the CMS Web site at: http://www.cms.hhs.gov/ICD9ProviderDiagnosticCodes/Downloads/new_diagnosis_codes_2007.pdf. This new code will address commenters concerns 
regarding coding for this condition.
    We appreciate all the public comment on this condition, and have 
considered all of these points of view. For the proposed rule, our only 
barrier to selecting vascular catheter-associated infections was the 
absence of a unique code to identify the condition. As CDC has since 
created a code to identify vascular catheter-associated infections, we 
believe the condition meets the criteria for being selected:
    <bullet> There are unique codes that identify vascular catheter-
associated infections as a CC under the MS-DRGs;
    <bullet> Prevention guidelines exist to avoid vascular catheter-
associated infections; and
    <bullet> As shown above, vascular catheter-associated infections 
are high-volume conditions.
    At this time, we have not decided whether there are specific 
clinical situations where a vascular catheter associated infection 
would not be considered preventable. We will consider exceptions to the 
policy in the circumstances provided in the public comments. We will 
consider these suggestions before the provision becomes effective in FY 
2009.
(i) Clostridium Difficile-Associated Disease (CDAD)
    Coding--This condition is identified by ICD-9-CM code 008.45 
(Clostridium difficile).
    Burden (High Cost/High Volume)--CDC reports that there are 178,000 
cases per year in U.S. hospitals. For FY 2006, there were 110,761 
reported cases of Medicare patients with CDAD as a secondary diagnosis, 
with average charges for the hospital stay of $52,464. Therefore, this 
is a high-cost and high-volume condition.
    Prevention guidelines--Prevention guidelines are not available. 
Therefore, we do not believe this condition can reasonably be prevented 
through the application of evidence-based guidelines.
    CC--Code 008.45 is a CC under the CMS DRGs and the MS-DRGs.
    Considerations--CDAD is an emerging problem with significant public 
health importance. If found early CDAD cases can easily be treated. 
However, cases not diagnosed early can be expensive and difficult to 
treat. CDAD occurs in patients on a variety of antibiotic regiments, 
many of which are unavoidable, and therefore preventability is an 
issue. We did not propose to include CDAD as one of our initial 
hospital acquired conditions at this time, given the lack of prevention 
guidelines. We welcomed public comments on CDAD, specifically on its 
preventability and whether there is potential to develop guidelines to 
identify it early in the disease process and/or diminish its incidence. 
We indicated that we would reevaluate the selection of this condition 
in FY 2009.
    Comment: Commenters noted the current clinical debate surrounding 
this condition reveals that it is very difficult to prevent in all 
cases; it can be prevalent within the hospital setting. In addition, 
some commenters noted this condition may be caused by the treatment 
protocol prescribed for a principal diagnosis; it can also occur if the 
patient is immune-compromised. Finally, some commenters stated that a 
significant percentage of CDAD is unavoidable, and it is difficult to 
distinguish community acquired from hospital acquired CDAD. Commenters

[[Page 47212]]

also urged CMS to delay selection of this condition because there is a 
lack of unique codes, complication codes, and guidelines for prevention 
of this condition.
    Response: This condition meets two of the three statutory criteria. 
There is an ICD-9-CM code for CDAD. The code is 008.45 (Clostridium 
difficile). Therefore, the condition can be clearly identified through 
the use of ICD-9-CM codes. Code 008.45 is also a CC under the CMS DRGs 
and the MS-DRGs. Also, as shown above, CDAD occurs with significant 
frequency in the Medicare population and is a high cost condition. 
However, prevention guidelines for this condition are currently 
unavailable. As suggested by the commenters, leading clinicians believe 
this condition may not be reasonably preventable because it can occur 
as a result of broad spectrum antibiotic administration, which is often 
unavoidable. Although we agree with these commenters, we are also aware 
of the public interest in this issue and will continue to be interested 
in selecting this condition if treatment protocols evolve to the point 
where CDAD is a preventable condition and prevention guidelines are 
developed.
    We are not selecting this condition for implementation in the FY 
2008 final rule. It does not currently meet the statutory guidelines 
for being selected because there are no prevention guidelines. 
Nevertheless, we will consider adopting this condition in the future if 
prevention guidelines to avoid CDAD are developed.
(j) Methicillin-Resistant Staphylococcus Aureus (MRSA)
    Coding--MRSA is identified by ICD-9-CM code V09.0 (Infection with 
microorganisms resistant to penicillins). One would also assign a 
code(s) to describe the exact nature of the infection.
    Burden (High Cost/High Volume)--For FY 2006, there were 95,103 
reported cases of Medicare patients who had MRSA as a secondary 
diagnosis. The average charges for these cases were $31,088. This 
condition is a high-cost and high-volume infection. MRSA has become a 
very common bacterium occurring both in and outside of the hospital 
environment.
    Prevention guidelines--CDC guidelines are located at the following 
Web site: http://www.cdc.gov/ncidod/dhqp/pdf/ar/mdroGuideline2006.pdf.
    CC--Code V09.0 is not a CC under the CMS DRGs and the MS-DRGs. The 
specific infection would be identified in a code describing the exact 
nature of the infection, which may be a CC.
    Considerations--As stated earlier, preventability may be hard to 
ascertain since the bacteria have become so common both inside and 
outside the hospital. There are also considerations in identifying MRSA 
infections because hospitals would report the code for MRSA along with 
additional codes that would describe the exact nature of the infection. 
We would have to develop a list of specific infections that could be 
the result of MRSA. We did not propose to include MRSA as one of our 
initial hospital-acquired conditions because the condition is not a CC. 
We recognize that associated conditions may be a CC. In the proposed 
rule, we welcomed comments on the proposal not to include this 
condition. Should there be support for including this condition, we 
requested recommendations on what codes might be selected to identify 
the specific types of infections associated with MRSA.
    Comment: Commenters displayed a high level of interest in this 
condition, not only as a hospital-acquired condition, but also as a 
broader public health problem that continues to affect Medicare 
beneficiaries. Commenters noted that MRSA is both high volume and high 
cost, referring to the language in the proposed rule. For this reason, 
many commenters believed this condition should be given a unique ICD-9-
CM code to be tracked in FY 2008. Furthermore, the commenters urged CMS 
to include it on the list of conditions for FY 2009 for which 
reimbursement may be withheld. Medical device companies that provide 
products to screen for MRSA commented in support of selecting the 
condition.
    However, a large number of commenters had reservations about 
selecting this condition because MRSA is not a CC or MCC under the new 
MS-DRGs. Most commenters acknowledged the clear prevention guidelines 
for MRSA. However, they contend that there remains debate on whether 
MRSA is reasonably preventable. These commenters indicated MRSA is 
ubiquitous and may be colonizing in so many potential patients that it 
is difficult to determine if it is acquired in a hospital. The 
commenters also noted current literature reveals a strain of community 
acquired MRSA that may be difficult to detect upon admission to the 
hospital.
    Response: We acknowledge the strong public health interest in 
reducing the number of MRSA related infections. However, MRSA does not 
currently meet the statutory criteria to be selected. Although there is 
an ICD-9-CM code to identify MRSA and CDC has prevention guidelines to 
reduce its incidence, we do not believe that there is a consensus among 
public health experts that MRSA is preventable. The public comments and 
the literature on this condition reveal a vigorous debate over whether 
MRSA is really community-acquired rather than hospital acquired given 
the significant potential number of patients that can be colonized with 
MRSA prior to admission. While this concern may be possible to address 
through screening patients for MRSA upon admission, the condition is 
not currently identified as a CC or MCC under the MS-DRGs. If present 
as a secondary diagnosis, the presence of MRSA alone does not lead to 
higher Medicare payment. Our data do not suggest that presence of MRSA 
alone will lead to higher hospital costs that would justify classifying 
it as a CC or MCC. Therefore, as the condition is not an MCC or CC, it 
does not meet the statutory criteria for being selected at this time.
    Although we are not selecting MRSA at this time, we believe it is a 
precursor to several other conditions that we have selected. MRSA may 
be a precursor to catheter associated urinary tract infections, 
vascular catheter-associated infections, and mediastinitis after 
coronary artery bypass graft (CABG) surgery--a surgical site infection 
that we have selected and is discussed in more detail below.
(k) Surgical Site Infections
    Coding--Surgical site infections are identified by ICD-9-CM code 
998.59 (Other postoperative infection). The code does not tell the 
exact location or nature of the postoperative wound infection. The code 
includes wound infections and additional types of postoperative 
infections such as septicemia. The coding guidelines instruct the coder 
to add an additional code to identify the type of infection. To 
implement this condition we would have to remove both code 998.59 and 
the specific infection from counting as a CC if they occurred after the 
admission. We would have to develop an extensive list of possible 
infections that would be subject to the provision. We may also need to 
recommend the creation of a series of new ICD-9-CM codes to identify 
various types of surgical site infections, should this condition merit 
inclusion among those that are subject to the proposed hospital-
acquired conditions provision.
    Burden (High Cost/High Volume)--CDC reports that there are 290,485 
surgical site infections each year. As stated earlier, there is not a 
unique code for surgical site infection. Therefore, we examined 
Medicare data on patients

[[Page 47213]]

with any type of postoperative infection. For FY 2006, there were 
38,763 reported cases of Medicare patients who had a postoperative 
infection. These patients had average charges for the hospital stay of 
$79,504. We are unable to determine how many of these patients had 
surgical site infections.
    Prevention guidelines--CDC guidelines are available at the 
following Web site: http://www.cdc.gov/ncidod/dhqp/gl_surgicalsite.html.
    CC--Code 998.59 is a CC under the CMS DRGs and the MS-DRGs.
    Considerations--As mentioned earlier, code 998.59 is not exclusive 
to surgical site infections. It includes other types of postoperative 
infections. Therefore, code 998.59 does not currently meet the 
statutory criteria for being subject to the provision because it does 
not uniquely identify surgical site infections. To identify surgical 
site infections, we would need new codes that provide more detail about 
the type of postoperative infection as well as the site of the 
infection. In addition, one would report both code 998.59 as well a 
more specific code for the specific type of infection, making 
implementation difficult. While there are prevention guidelines, it is 
not always possible to identify the specific types of surgical 
infections that are preventable. Therefore, we did not propose to 
select surgical site infections as one of our proposed hospital-
acquired conditions at this time. However, we welcomed public comments 
on whether we can develop criteria and codes to identify preventable 
surgical site infections that would assist us in reducing their 
incidence. We indicated that we were exploring ways to identify 
surgical site infections and would reevaluate this condition in FY 
2009.
    Comment: A number of commenters specifically requested that CMS 
consider selecting mediastinitis after coronary artery bypass graft 
(CABG) surgery. Commenters noted that mediastinitis is a postoperative 
infection that can arise after CABG.
    Commenters stated that the condition meets the criteria set forth 
in the DRA. According to the comments, mediastinitis is a frequently 
occurring and costly infection that will develop after CABG surgery. 
The commenters noted that there are unique codes to identify 
mediastinitis and prevention guidelines that are backed by evidence 
based medicine have been developed.
    Response: We agree that mediastinitis meets the statutory criteria 
for being selected.
    Coding--There are unique ICD-9-CM codes to identify the condition. 
The ICD-9-CM code for mediastinitis is 519.2.
    Burden (High Cost/High Volume)--We examined Medicare data on 
patients who received a CABG operation (with codes 36.10-36.19) and 
also had mediastinitis (ICD-9-CM code 519.2) as a secondary diagnosis. 
For FY 2006, there were 108 reported cases of Medicare patients who had 
this postoperative infection after CABG. These patients had average 
charges for the hospital stay of $304,747. Therefore, mediastinitis is 
a high-cost condition.
    Prevention guidelines--The CDC surgical site infection prevention 
guidelines are backed by evidence based medicine. Further information 
can be found at: http://www.cdc.gov/ncidod/dhqp/gl_surgicalsite.html.
    We are selecting this condition because it meets the statutory 
criteria and was suggested in the public comments. We would identify 
the coronary artery bypass graft procedures through procedure codes 
36.10 through 36.19. Therefore, when a patient has a coronary artery 
bypass graft performed (code 36.10 through 36.19), and a secondary 
diagnosis of mediastinitis (code 519.2) is reported that was not 
present on admission, we will not count mediastinitis as an MCC 
beginning October 1, 2009.
    ``Surgical site infections'' is a broad category, and we were 
looking for assistance from the public for ways to identify specific 
surgical site infections. We appreciate the suggestion to select 
mediastinitis after CABG surgery when it is a hospital acquired 
condition. We are selecting this condition for implementation in this 
FY 2008 final rule. We welcome additional recommendations for other 
types of surgical site infections that could also be selected and look 
forward to working with stakeholders and the public as we consider 
additional surgical site infections in the future.
(l) Serious Preventable Event--Surgery on Wrong Body Part, Patient, or 
Wrong Surgery
    Coding--Surgery performed on the wrong body part, wrong patient, or 
the wrong surgery would be identified by ICD-9-CM code E876.5 
(Performance of inappropriate operation). This diagnosis code does not 
specifically identify which of these events has occurred.
    Burden (High Cost/High Volume)--As stated earlier, there are not 
unique ICD-9-CM codes which capture surgery performed on the wrong body 
part or the wrong patient, or the wrong surgery. Therefore, we examined 
Medicare data on the code for performance of an inappropriate 
operation. For FY 2006, there was one Medicare case reported with this 
code, and the patient had average charges for the hospital stay of 
$24,962. This event is rare. Therefore, it is not high volume. 
Individual cases could have high costs. However, we were unable to 
determine the impact with our limited data.
    Prevention guidelines--There are guidelines to ensure that the 
correct surgery was performed on the correct patient or correct 
patient's body part. This event should not occur. Further information 
and prevention guidelines can be found at: http://www.ahrq.gov/clinic/ptsafety/.
    CC--This code is not a CC under the CMS DRGs and the MS-DRGs. 
Therefore, it does not meet the criteria for selection under section 
1886(d)(4)(D)(iv) of the Act. However, Medicare does not pay for 
performing surgery on the wrong body part or patient, or performing the 
wrong surgery. These services are not considered to be reasonable and 
necessary and are excluded from Medicare coverage.
    Considerations--There are significant considerations for the 
selection of this condition. There is not a unique ICD-9-CM code that 
would describe the nature of the inappropriate operation. All types of 
inappropriate operations are included in code E876.5. Unlike other 
conditions, performance of an inappropriate operation is not a 
complication of a prior medical event that was medically necessary. 
Rather, in this case, there was a needed intervention but it was done 
to either the wrong body part or the wrong patient, or was not the 
correct operation. Thus, a service was completed that was not 
reasonable and necessary and Medicare does not pay for any inpatient 
service associated with the wrong surgery. It is not necessary for us 
to select this condition because Medicare does not pay for it under any 
circumstances.
    Comment: A majority of commenters agreed that there are not unique 
codes to identify wrong surgery. In addition, these commenters pointed 
out that there are guidelines to ensure that the correct surgery is 
being performed on the correct patient or correct patient's body part. 
These commenters stated that wrong surgery is a serious preventable 
event that should not occur.
    One commenter urged CMS to rank the condition--surgery on wrong 
body part, wrong patient, or wrong surgery (wrong site surgery)--higher 
in our list of hospital-acquired conditions. This commenter stated that 
wrong site surgery may not be rare, but rather may be quite prevalent. 
The commenter disagreed with CMS' belief that wrong

[[Page 47214]]

site surgery should not be considered as a complication because it is a 
risk of being in a hospital. The commenter recommended the development 
of specific codes for wrong site surgery.
    Response: With respect to this latter comment, the commenter may 
have misunderstood our discussion of this issue in the proposed rule. 
We never asserted wrong site surgery is not a complication because it 
is a risk of being in a hospital. Rather, we stated the event itself is 
wrong and should never occur. Unlike CCs and MCCs, wrong surgery is not 
a complication of a prior medical event that was medically necessary. 
Wrong surgery is not a CC or an MCC because the entire event itself 
should never occur, is not reasonable and necessary and should not 
result in any payment to the hospital or physician. We are not 
selecting wrong surgery because it is not an event for which Medicare 
should pay less; it is an event for which Medicare should pay nothing 
at all.
    As stated in the proposed rule, there is not a unique ICD-9-CM code 
that identifies surgery performed on the wrong body part or the wrong 
patient, or the wrong surgery. Code E876.5 (Performance of 
inappropriate operation) does not describe what specifically was wrong 
with the surgery, such as whether it was performed on the wrong side, 
the wrong patient, or if the wrong surgery were performed. In examining 
Medicare data on the code for performance of an inappropriate 
operation, we found only one case reported in FY 2006. We agree this is 
a serious issue that requires close examination and monitoring.
    The proposed rule indicated that wrong surgery (right patient, 
wrong surgery, right surgery, wrong patient, etc.) is not a reasonable 
and necessary service. Therefore, it is not covered by Medicare and 
should not be paid. Wrong surgery is not a CC and does not meet the 
criteria of the statute. As stated above, there are generally 
recognized guidelines hospitals and physicians must follow to ensure 
that the correct surgery was performed on the correct patient or 
correct patient's body part. This event should not occur. If hospitals 
fail to ensure the correct surgery is performed, there are other 
provisions in the regulations to address this alarming event. For 
instance, a hospital must meet the CoPs in order to participate in 
Medicare. If wrong surgery was performed, the hospital could be out of 
compliance with the Surgical Services CoP, the Quality Assessment and 
Performance Improvement CoP, or potentially others. Performance of 
wrong surgery may suggest a systems failure or systems that do not 
comply with the CoPs that should be further investigated. We are 
interested in promoting a culture of safety and are interested in 
helping hospitals improve their performance. The hospital would have an 
opportunity to develop and present a plan of correction to avoid 
termination of its participation in Medicare by addressing the 
deficiencies that resulted in an incorrect surgery being performed. The 
final action that would be taken would depend on the individual 
circumstances and whether the hospital has addressed the problem to 
reduce the chance of a similar occurrence in the future. In any event, 
we reiterate that the way for Medicare to address wrong surgery is not 
through this provision that does not pay extra for preventable hospital 
complications when we should be paying nothing at all, but instead 
through Medicare's regulations that ensure that every Medicare provider 
meets basic quality of care standards.
(m) Falls and Fractures, Dislocations, Intracranial Injury, Crushing 
Injury, and Burns
    Coding--There is no single code that shows that a patient has 
suffered a fall in the hospital. Codes would be assigned to identify 
the nature of any resulting injury from the fall such as a fracture, 
contusion, concussion, etc. There is a code to indicate that a patient 
fell from bed, code E884.4 (Fall from bed). One would then assign a 
code that identifies the external cause of the injury (the fall from 
the bed) and an additional code(s) for any resulting injury (a 
fractured bone).
    Burden (High Cost/High Volume)--As stated earlier, there is not a 
code to identify all types of falls. Therefore, in the FY 2008 IPPS 
proposed rule, we examined Medicare data on the number of Medicare 
beneficiaries who fell out of bed. For FY 2006, there were 2,591 cases 
reported of Medicare patients who fell out of bed. These patients had 
average charges of the hospital stay of $24,962. However, depending on 
the nature of the injury, costs may vary in specific cases.
    Prevention guidelines--Falls may or may not be preventable. Serious 
preventable event guidelines can be found at the following Web site: 
http://www.qualityindicators.ahrq.gov/psi_download.htm.
    CC--Code E884.4 is not a CC under the CMS DRGs or the MS-DRGs.
    Considerations--There are not clear codes that identify all types 
of falls. Hospitals would also have to use additional codes for 
fractures and other injuries that result from the fall. In addition, 
depending on the circumstances, the falls may or may not be 
preventable. We did not propose the inclusion of falls as one of our 
initial hospital-acquired conditions because we could only identify a 
limited number of these cases, and they were not classified as CCs. 
However, we welcomed public comments on how to develop codes or coding 
logic that would allow us to identify injuries that result from falls 
in the hospital so that Medicare would not recognize the higher costs 
associated with treating patients who acquire these conditions in the 
hospital.
    Comment: Several commenters stated that the category of falls is 
not appropriate for inclusion as one of the hospital-acquired 
conditions. Specifically, the commenters noted that it is impossible to 
prevent all falls, and the definition of what constitutes a 
``preventable fall'' is not well-defined. Several commenters strongly 
recommended the inclusion of falls for the final rule because falls and 
their resulting injuries are an important public health safety issue. 
However, these commenters did not give further details or 
recommendations to CMS regarding how to identify falls and related 
injuries as a hospital-acquired condition that would be subject to this 
provision.
    Response: With respect to the comment that not all falls are 
preventable, we reiterate that the statutory provision authorizes the 
Secretary to select conditions that ``could reasonably have been 
prevented through the application of evidence based guidelines.'' We 
believe that injuries that occur in the hospital due to falls are 
preventable. As discussed earlier, we received a couple of comments 
urging us to include falls as one of our hospital acquired conditions. 
We recognize that preventable injuries are an important patient safety 
issue. Therefore, we considered additional ways to identify patients 
who had preventable injuries that occurred in the hospital. We examined 
the use of a combination of External cause of injury codes and the 
specific injury to identify these cases. We identified five external 
causes of injury codes that would identify falls in a hospital. These 
include:
    <bullet> E884.2 Fall from chair
    <bullet> E884.3 Fall from wheelchair
    <bullet> E884.4 Fall from bed
    <bullet> E884.5 Fall from other furniture
    <bullet> E884.6 Fall from commode
    These codes clearly identify certain types of falls. If coded for 
an inpatient, they could identify that the fall occurred in the 
hospital. If these codes appeared

[[Page 47215]]

on a claim along with a fracture or trauma code that did not reflect 
that the condition was present on admission, we could conclude that the 
injury was a result of a fall in the hospital that should not be 
counted as an MCC or CC. However, we identified potential problems in 
using the external cause of injury codes. There is a separate field on 
the electronic claim to report one external cause of injury code. 
However, hospitals do not report the POA indicator with this field. 
Therefore, we will not be able to tell if the external cause of injury 
code is identifying an event that occurred before or after admission.
    Hospitals can also report external cause of injury codes as a 
secondary diagnosis. If the hospital lists the external cause of injury 
code among the secondary diagnoses, the hospital would be assigning a 
Present on Admission indicator to the external cause of injury code. In 
these cases, we would be able to identify that one of the five types of 
falls indicated above occurred after admission. We could use this 
information along with the ICD-9-CM diagnosis code for the specific 
type of injury, such as a fracture, to not allow the specific injury to 
count as a MCC or CC, since it would be the result of a preventable 
injury. In our analysis of the use of an external cause of injury code, 
we believe this approach is too complicated to identify preventable 
injuries. Therefore, we focused on simply identifying injuries that 
should not occur during a hospitalization. If a preventable injury 
occurs during a hospitalization, it should be included on our list of 
hospital acquired conditions.
    We reviewed diagnosis codes contained in the Injury and Poisoning 
Chapter of ICD-9-CM and attempted to develop a list of codes that could 
identify potential adverse events that may or may not have been the 
result of a fall occurring in the hospital setting. After reviewing 
each category of diagnosis codes, we identified the following injuries 
that should not occur during a patient's hospitalization. The generic 
categories of injuries are as follows:
    <bullet> Fractures--ICD-9-CM code range 800 through 829
    <bullet> Dislocations--ICD-9-CM code range 830 through 839
    <bullet> Intracranial injury--ICD-9-CM code range 850 through 854
    <bullet> Crushing injury--ICD-9-CM code range 925 through 929
    <bullet> Burns--ICD-9-CM code range 940 through 949
    <bullet> Other and unspecified effects of external causes--ICD-9-CM 
code range 991 through 994
    In our view, the above conditions should not occur after admission 
to the hospital. That is, if the patient is admitted to the hospital 
without a crushing injury, a burn, fracture, dislocation, among others, 
we can see no reason why such an event would not be preventable while 
the patient is in the hospital. None of these injuries should occur 
after admission. We believe this range of conditions offers a 
relatively uncomplicated method to determine if an injury or trauma is 
acquired in the hospital. This range of conditions meets the statutory 
criteria for being selected when they are MCCs or CCs. First, they are 
identifiable with ICD-9-CM codes. Second, injuries that occur as a 
result of a fall in the hospital complicate the care and treatment of 
the patient. Fractures and dislocations and other injuries are common 
in the Medicare population. There were more than 175,000 fractures and 
other traumatic injuries in the above range of codes for FY 2006. 
Third, hospital acquired injuries included in this range of codes 
should not occur and are preventable. Although we have not identified 
specific prevention guidelines for the conditions described by the 
above range of codes, we believe these types of injuries and trauma 
should not occur in the hospital, and we look forward to working with 
CDC and the public in identifying research that has or will occur that 
will assist hospitals in following the appropriate steps to prevent 
these conditions from occurring after admission.
    We welcome public comments on additions and deletions to this 
injury list as well as our findings on the use of a combination of 
external cause of injury codes and injury codes to identify patients 
that acquired an injury in the hospital due to a fall. We also welcome 
any additional suggestions to identify cases where preventable 
injuries, such as falls, occur during hospitalization. We will review 
all recommendations in the FY 2009 IPPS rule in order to further refine 
our policy to identify preventable injuries and ensure that Medicare 
does not pay extra by counting them as MCC or CCs.
(n) Other Conditions Suggested Through Comment: Deep Vein Thrombosis 
(DVT)/ Pulmonary Embolism (PE)
    Comment: A number of commenters encouraged CMS to select Venous 
Thromboembolism (VTE), which includes both Deep Vein Thrombosis (DVT) 
and Pulmonary Embolism (PE), as a preventable condition. The commenters 
noted that prophylactic measures exist to avoid these conditions and 
they are preventable if these steps are followed.
    The commenters asserted that this condition meets the DRA criteria 
requirements for a condition eligible for a payment adjustment in that 
it involves high cost and high volume (according to the 2006 MedPAR 
data, DVT resulted in more than 180,000 discharges with a mean 
standardization cost of $17,410 and PE in more than 100,000 discharges 
with a mean standardization cost of $20,742), and results in assignment 
to a higher paying DRG if present as a secondary diagnosis. The 
commenters also noted that both DVT and PE have ICD-9-CM codes that are 
on the MCC and CC lists. In addition, this condition can be prevented 
in accordance with evidence-based guidelines. These commenters cited 
Geerts, et al., Prevention of Venous Thromboembolism: The Seventh ACCP 
Conference on Antithrombotic and Thrombolytic Therapy, Chest, 126: 
338S-400S (2004). The commenters acknowledged DVT and PE are identified 
by multiple codes, but asserted that administrative issues surrounding 
the selection of this condition could be resolved. They requested that 
CMS consider selecting DVT and PE as preventable complications for 
which hospitals will not receive additional payments.
    Response: We appreciate these comments suggesting that we add DVT 
and PE to our list of conditions that would be subject to the hospital 
acquired conditions provision. A DVT is a blood clot that forms in a 
vein, most commonly in the lower extremity. It can arise secondary to a 
number of clinical circumstances, including prolonged inactivity or 
bedrest, or from extended periods of time with the lower extremity in a 
bent position. It can also arise in the setting of a hypercoagulable 
state such as that which occurs with a number of malignancies, where 
the blood has an increased propensity to form clots, and it is also 
more common in patients taking oral contraceptives, particularly in 
conjunction with regular tobacco use. A PE is a clot that occurs in one 
of the pulmonary arteries that supplies a portion of the lung, most 
commonly when part or all of a DVT migrates to the pulmonary vessels 
from its original location, although it can also occur in the absence 
of a DVT, and it is a particularly serious event that is often life 
threatening. We refer readers to the current medical literature to 
further define DVT and PE.
    We agree that there are circumstances where these conditions are 
preventable,

[[Page 47216]]

and where the condition meets the statutory criteria to be selected. 
These conditions can be identified by unique ICD-9-CM codes. DVT can be 
identified through codes 453.40 (Venous embolism and thrombosis of 
unspecified deep vessels of lower extremity), 453.41 (Venous embolism 
and thrombosis of deep vessels of proximal lower extremity), and 453.42 
(Venous embolism and thrombosis of deep vessels of distal lower 
extremity). All three codes are on the CC list. PE is identified 
through codes 415.10 (Iatrogenic pulmonary embolism and infarction) and 
415.19 (Other pulmonary embolism and infarction). Both of these codes 
are on the MCC list. The commenters provided Medicare data showing that 
these conditions are both frequent and high cost in the Medicare 
population. Finally, the commenters have identified prevention 
guidelines backed by evidence based medicine to avoid DVTs and PEs. 
Therefore, at least in some circumstances, these conditions meet the 
statutory criteria for being selected.
    We appreciate the collaborative efforts of other organizations to 
further define the prevention guidelines for this condition. We 
recognize that routine admission physical examinations should include 
efforts to detect a DVT. Although we believe DVTs and PEs may be 
preventable in certain circumstances (such as when an otherwise healthy 
patient is having elective surgery on a lower extremity), it is 
possible that a patient may have a DVT upon admission that goes 
unidentified, and it is also possible that DVT may occur because of 
other circumstances, such as an occult malignancy. If a DVT is 
clinically suspected upon admission to the hospital, the definitive 
diagnosis of a DVT can be made with a Doppler ultrasound examination or 
intravenous venogram, or both. We anticipate that it is not feasible to 
perform these studies on every hospitalized patient. In the case of a 
patient who is admitted with a clinically unapparent DVT that is not 
detected, the hospital will have followed all typical patient care 
protocols yet the DVT went undiagnosed upon admission. It may remain 
undetected until the patient exhibits symptoms of either the DVT or a 
PE that is unrelated to the patient's principal diagnosis. In these 
circumstances, we believe the DVT or PE should continue to be counted 
as an MCC or CC because, in our view, the condition either was 
unidentifiable prior to admission or did not likely occur as a result 
of poor management of the patient while they were in the hospital. We 
believe it is very important to select DVTs and PEs only when they are 
preventable through following standard prevention guidelines. We will 
seek to identify clearly defined instances of preventable DVT and PE 
that should not occur in the hospital setting which will help to 
further increase hospital quality of care.
    We appreciate suggestions on how to identify DVTs and PEs that are 
preventable hospital acquired conditions. If we can identify only those 
circumstances where DVTs and PEs are preventable and meet the statutory 
criteria for being selected, we likely would make them subject to the 
provision in the FY 2009 IPPS final rule. We welcome comments on this 
issue and look forward to working with stakeholders to identify 
instances of preventable DVTs and PEs prior to implementation of this 
provision on October 1, 2008.
(o) Other Conditions Suggested Through Public Comment: Legionnaires' 
Disease
    Comment: One commenter suggested that CMS select Legionnaire's 
disease. The commenter asserted that this condition is high cost/high 
volume: CDC estimates between 8,000 and 18,000 cases per year. Due to 
underreporting and underdiagnosis, only 2 to 10 percent of cases are 
reported. Death occurs in 10 to 15 percent of cases. In addition, the 
commenter cited established prevention guidelines: CDC prevention 
guidelines are available and widely distributed. Finally, the commenter 
stated that Legionnaires' disease is identified by ICD-9-CM code 
482.84.
    Response: While there may be a discrete ICD-9-CM code to identify 
Legionnaires' disease, it is not typically a hospital acquired 
condition. Legionnaires' disease is usually acquired outside of a 
hospital from a contaminated water supply that may or may not have any 
relation to a particular institution. Any outbreak of Legionnaires' 
disease suggests a significant public health emergency that should be 
addressed by public health resources rather than by a particular 
Medicare payment policy.
(p) CMS Response to Additional Comments
    We welcomed any comments on the clinical aspects of the conditions 
and on which conditions should be selected for implementation on 
October 1, 2008. We also solicited comments on any problematic issues 
for specific conditions that may support not selecting them as one of 
the initial conditions. We encouraged comments on how some of the 
administrative problems can be overcome if there is support for a 
particular condition.
    Commenters did not raise any general administrative concerns. 
Rather, a number of commenters addressed the potential for an appeals 
process and POA coding issues. We have included the comment and 
response for each issue below:
    <bullet> Appeals Process:
    Comment: A large number of commenters requested clarification from 
CMS on how hospitals appeal CMS decisions that a particular patient may 
fall under the hospital-acquired conditions policy and, therefore, is 
not eligible for higher payment through assignment to the higher CC/MCC 
level of the MS-DRG. They asked CMS to provide specific instructions 
for hospitals to follow for appealing a decision.
    Response: We do not believe a separate appeals process is necessary 
for the payment adjustment for hospital-acquired conditions because 
existing procedures provide adequate opportunity for review. Under 42 
CFR Sec.  412.60(d), a hospital has 60 days after the date of the 
notice of the initial assignment of a discharge to a DRG to request a 
review of that assignment. The hospital may submit additional 
information as a part of its request. A hospital that believes a 
discharge was assigned to the incorrect DRG as a result of the payment 
adjustment for hospital-acquired conditions may request review of the 
DRG assignment by its fiscal intermediary or MAC.
    However, we note that section 1886(d)(7)(B) of the Act, as amended 
by section 5001(c)(2) of the DRA, provides that there shall be no 
administrative or judicial review of the establishment of DRGs, 
including the selection and revision of codes under the payment 
adjustment for hospital acquired conditions. Therefore, although a 
hospital may request review of a DRG assignment in a particular case, 
the statute does not provide for review of the codes we select to be 
subject to the payment adjustment for hospital-acquired conditions.
    <bullet> POA Coding
    Comment: Commenters suggested that all secondary diagnoses coded as 
present on admission be used to support the development of new 
complication rate measures and other quality indicators in the future. 
They suggested that CMS should develop special Grouper logic to exclude 
similar ICD-9-CM codes. The commenters stated that reducing hospital 
payments for a condition present upon admission, but not documented, is 
too punitive.

[[Page 47217]]

    Many commenters submitted the experiences of two States that 
already use present-on-admission coding. They believed it takes several 
years and intense educational efforts to achieve reliable data and 
therefore there must be a strong clinical training component.
    The commenters recommended that CMS implement the collection of the 
POA indicator but delay the implementation of any conditions that are 
dependent on its use until physicians and hospitals have an appropriate 
level of experience.
    Response: We refer commenters to the Change Request No. 5499 
released on May 11, 2007, for answers to additional questions regarding 
present-on-admission coding. We remind commenters that the DRG payment 
adjustment based on the POA indicator is not applicable until October 
1, 2008. It is important to note that hospitals will gain experience in 
reporting POA information during FY 2008 prior to it having a payment 
impact in FY 2009.
    <bullet> Prevention Guidelines
    Comment: A small number of commenters questioned the feasibility 
and reliability of current prevention guidelines. The commenters 
supported CMS' goal of encouraging improvements in health care and 
reducing the number of preventable infections, but believed that 
hospitals must be reimbursed appropriately for providing the care 
patients need. The commenters believed that CMS should be sure that 
hospitals are not penalized for infections that originated outside the 
hospital or that are caused by factors beyond the hospital's control.
    The commenters suggested that CMS should recognize that, even with 
the best infection control practices, some infections will occur 
anyway. They added that reducing payments for all cases in which those 
infections occur could harm hospitals' ability to purchase and provide 
advanced drugs and treatment modalities or invest in other infection 
control technologies.
    Response: We address each concern regarding prevention guidelines 
in the respective response for each condition. We are committed to 
improving quality and decreasing the number of hospital-acquired 
conditions. In that goal, we have chosen these specific conditions 
because they fulfill the criteria outlined in the DRA: the conditions 
have unique codes that are MCCs or CCs; the conditions are high volume, 
high cost or both; and the conditions can be reasonably prevented 
through the application of evidence-based guidelines.
    <bullet> Academic Centers/Hospitals with high risk patients:
    Comment: Commenters representing academic centers and hospitals 
with high risk patient populations urged CMS to consider excluding 
patients considered to be high risk such as those that are more 
susceptible to infections.
    Response: As indicated above, we are selecting conditions that are 
``reasonably preventable'' through application of evidence-based 
guidelines and meet the other statutory criteria. In response to 
comments on each of the conditions considered, we indicated that we are 
researching whether to establish exceptions to the conditions for 
specific clinical circumstances where the condition may not be 
preventable. The determination of whether a patient is ``high risk'' 
will depend on the specific circumstances of the patient and the 
condition under consideration. We do not believe it is possible to 
classify a patient generally as ``high risk'' in all the circumstances 
where the provision could potentially apply. As we indicated above, we 
welcome public comments on clinical scenarios where a specific 
condition may not be reasonably preventable in the hospital and how to 
identify and distinguish those circumstances from other situations 
where the condition is preventable.
7. Other Issues
    Under section 1886(d)(4)(D)(vi) of the Act, ``[a]ny change 
resulting from the application of this subparagraph shall not be taken 
into account in adjusting the weighting factors under subparagraph 
(C)(i) or in applying budget neutrality under subparagraph (C)(iii).'' 
Subparagraph (C)(i) refers to DRG classifications and relative weights. 
Therefore, the statute requires the Secretary to continue counting the 
conditions selected under section 5001(c) of the DRA as MCCs or CCs 
when updating the relative weights annually. Thus, the higher costs 
associated with a case with a hospital-acquired MCC or CC will continue 
to be assigned to the MCC or CC DRG when calculating the relative 
weight but payment will not be made to the hospital at one of these 
higher-paying DRGs. Further, subparagraph (C)(iii) refers to the budget 
neutrality calculations that are done so aggregate payments do not 
increase as a result of changes to DRG classifications and relative 
weights. Again, the higher costs associated with the cases that have a 
hospital-acquired MCC or CC will be included in the budget neutrality 
calculation but Medicare will make a lower payment to the hospital for 
the specific cases that includes a hospital-acquired MCC or CC. Thus, 
to the extent that the provision applies and cases with an MCC or CC 
are assigned to a lower-paying DRG, section 5001(c) of the DRA will 
result in cost savings to the Medicare program. We note that the 
provision will only apply when the selected conditions are the only 
MCCs and CCs present on the claim. Therefore, if a nonselected MCC or 
CC is on the claim, the case will continue to be assigned to the higher 
paying MCC or CC DRG, and there will be no savings to Medicare from the 
case. We believe the provision will apply in a small minority of cases 
because it is rare that one of the selected conditions will be the only 
MCC or CC present on the claim.
    To summarize, we appreciate all of the comments on hospital-
acquired conditions and look forward to continued input as we plan to 
implement these hospital-acquired conditions. Below is the list of 
conditions that we are selecting in this FY 2008 final rule. These 
conditions will be made subject to the provision beginning on October 
1, 2008 (FY 2009).
    <bullet> Serious Preventable Event--Object Left in Surgery
    <bullet> Serious Preventable Event--Air Embolism
    <bullet> Serious Preventable Event--Blood incompatibility
    <bullet> Catheter-Associated Urinary Tract Infections
    <bullet> Pressure Ulcers (Decubitus Ulcers)
    <bullet> Vascular Catheter-Associated Infection
    <bullet> Surgical Site Infection--Mediastinitis After Coronary 
Artery Bypass Graft (CABG) Surgery
    <bullet> Hospital Acquired Injuries--Fractures, Dislocations, 
Intracranial Injury, Crushing Injury, Burn, and Other Unspecified 
Effects of External Causes
    We will also propose the following conditions for consideration in 
the FY 2009 IPPS proposed rule. We will work diligently to address 
issues surrounding these conditions and propose to select these 
conditions in the FY 2009 IPPS final rule.
    <bullet> Ventilator Associated Pneumonia (VAP)
    <bullet> Staphylococcus Aureus Septicemia
    <bullet> Deep Vein Thrombosis (DVT)/ Pulmonary Embolism (PE)
    Finally, we list below the set of conditions that signal further 
analysis for future implementation.
    <bullet> Methicillin Resistant Staphylococcus Aureus (MRSA)
    <bullet> Clostridium Difficile-Associated Disease (CDAD)
    <bullet> Wrong Surgery--Provision not applicable because Medicare 
should not pay less; it should not pay at all.

[[Page 47218]]



                                     Table 1.--Hospital-Acquired Conditions
                                                 (in rank order)
----------------------------------------------------------------------------------------------------------------
                                                                                               May be considered
            Condition             Considered in NPRM   Proposed in NPRM     Selected in FY         in future
                                                                            2008 final rule       rulemaking
----------------------------------------------------------------------------------------------------------------
1. Serious Preventable Event--    Yes...............  Yes...............  Yes...............  N/A.
 Object left in surgery.
2. Serious Preventable Event--    Yes...............  Yes...............  Yes...............  N/A.
 Air embolism.
3. Serious Preventable Event--    Yes...............  Yes...............  Yes...............  N/A.
 Blood incompatibility.
4. Catheter-Associated Urinary    Yes...............  Yes...............  Yes...............  N/A.
 Tract Infections.
5. Pressure Ulcers (Decubitus     Yes...............  Yes...............  Yes...............  N/A.
 Ulcers).
6. Vascular Catheter-Associated   Yes...............  No (No FY 2008      Yes (Code Created   N/A.
 Infection.                                            code).              for FY 2008).
7. Surgical Site Infection--      Yes (All surgical   No (No unique       Yes (Comments       N/A.
 Mediastinitis after Coronary      site infections,    codes).             suggested
 Artery Bypass Graft (CABG)        not just                                Mediastinitis
 surgery.                          Mediastinitis).                         which has unique
                                                                           code).
8. Falls........................  Yes...............  No (Coding not      Yes (Operational    Expand to all
                                                       unique).            difficulties will   hospital acquired
                                                                           be overcome by FY   injuries, adverse
                                                                           2009).              events.
9. Ventilator Associated          Yes...............  No (Coding not      No (Coding not      Yes--FY 2009 IPPS
 Pneumonia (VAP).                                      unique).            unique).            final rule
                                                                                               (Pursuing code
                                                                                               with CDC).
10. Staphylococcus Aureus         Yes...............  Yes...............  No (Must identify   Yes--FY 2009 IPPS
 Septicemia.                                                               subset where        final rule.
                                                                           preventable).
11. Deep Vein Thrombosis (DVT)/   No................  No................  No................  Yes--FY 2009 IPPS
 Pulmonary Embolism (PE).                                                                      final rule (Work
                                                                                               to identify
                                                                                               situations where
                                                                                               it should be
                                                                                               preventable).
12. Methicillin Resistant         Yes...............  No................  No................  Yes.
 Staphylococcus Aureus (MRSA).
13. Clostridium Difficile--       Yes...............  No................  No................  Yes.
 Associated Disease (CDAD).
Other: Medicare Does not Pay
 For:
14. Wrong Surgery...............  Yes...............  No................  No................  Provision not
                                                                                               Applicable.
                                                                                               Medicare should
                                                                                               not pay at all.
----------------------------------------------------------------------------------------------------------------

G. Changes to Specific DRG Classifications

1. Pre-MDCs: Intestinal Transplantation
    In the FY 2005 IPPS final rule (69 FR 48976), we reassigned 
intestinal transplant cases from CMS DRG 148 (Major Small and Large 
Bowel Procedures with CC) and CMS DRG 149 (Major Small and Large Bowel 
Procedures without CC) to CMS DRG 480 (Liver Transplant and/or 
Intestinal Transplantation). In the FY 2006 IPPS final rule (70 FR 
47286), we continued to evaluate these cases to see if a further DRG 
change was warranted. While we found that intestinal only transplants 
and combination liver-intestine transplants have higher average charges 
than other cases in CMS DRG 480, these cases are extremely rare (there 
were only 4 cases in FY 2004) and the insufficient number of cases did 
not warrant creating a separate DRG.
    For FY 2008, we examined the September 2006 update of the FY 2006 
MedPAR file and found 1,208 cases assigned to CMS DRG 480. In section 
II.C. of the preamble of the FY 2008 IPPS proposed rule, we proposed to 
split CMS DRG 480 into two severity levels: MS-DRG 005 (Liver 
Transplant and/or Intestinal Transplant with MCC) and MS-DRG 006 (Liver 
Transplant and/or Intestinal Transplant without MCC). The following 
table displays our results:

------------------------------------------------------------------------
                                                  Average
              MS-DRG                Number of    length of     Average
                                      cases         stay       charges
------------------------------------------------------------------------
MS-DRG 006--All cases............          446        10.05     $129,519
MS-DRG 006--Intestinal transplant            3           34      354,793
 cases only......................
MS-DRG 005--All cases............          762        22.25      243,271
MS-DRG 005--Intestinal transplant            9        40.22      460,089
 cases only......................
MS-DRG 005--Intestinal and liver             1           56    1,179,425
 transplant......................
------------------------------------------------------------------------

    Under the MS-DRGs, 10 of 13 intestinal transplant cases are 
assigned to proposed MS-DRG 005 based on the secondary diagnosis of the 
patient. The three remaining intestinal transplant cases do not have an 
MCC and would

[[Page 47219]]

be assigned to MS-DRG 006, absent further changes to the DRG logic. 
These three intestinal transplants have average charges of 
approximately $354,793 and an average length of stay of 34 days. 
Average charges and length of stay for these three cases are more 
comparable to the average charges of approximately $243,271 and average 
length of stay of 22.25 days for all cases assigned to proposed MS-DRG 
005. For this reason, we proposed to move all intestinal transplant 
cases to MS-DRG 005. As part of the proposal, we proposed to redefine 
proposed MS-DRG 005 as ``Liver Transplant with MCC or Intestinal 
Transplant.'' The presence of a liver transplant with MCC or an 
intestinal transplant would assign a case to the higher severity level. 
We also proposed to redefine proposed MS-DRG 006 as ``Liver Transplant 
without MCC''.
    Comment: Two commenters supported the proposed reassignment of 
intestinal transplants to MS-DRG 005. One commenter stated that CMS 
should continue to evaluate the frequency of this procedure and 
reassign it to an appropriate DRG reflective of its high resource 
utilization.
    Response: We appreciate the support of the commenters and agree 
that when we receive sufficient data, we will again consider a separate 
intestinal transplant DRG.
    Comment: One commenter supported separate MS-DRGs for intestinal 
transplants and combination liver-intestine transplants. The commenter 
cited that the data from the Milliman 2005 U.S. Organ and Tissue 
Transplant Cost Estimates and Discussion Research Report supports 
separate MS-DRGs. This report provided data for 58 intestine only 
transplants with estimated first year billed charges of $813,600 and 47 
liver-intestine transplants with estimated first year billed charges of 
$830,200.
    Response: The report submitted by the commenter does not indicate 
whether the patients cited in the study were Medicare. Further, it is 
not clear whether the identified costs were hospital inpatient only or 
total. For these reasons, we are not using these data to make an MS-DRG 
assignment. However, we are open to considering, to the extent 
feasible, reliable, validated data other than MedPAR data in annually 
recalibrating and reclassifying the DRGs.
    In this final rule with comment period, we are adopting as final 
our proposal to reassign intestinal transplantation cases to MS-DRG 
005. We are also redefining MS-DRG 005 as ``Liver Transplant with MCC 
or Intestinal Transplant'' and MS-DRG 006 as ``Liver Transplant without 
CC''.
2. MDC 1 (Diseases and Disorders of the Nervous System)
a. Implantable Neurostimulators
    We received a joint request from three manufacturers to review the 
DRG assignment for cases involving neurostimulators. The commenters are 
concerned that:
    <bullet> Neurostimulator cases may be assigned to 30 different DRGs 
in 12 different MDCs depending upon the patient's principal diagnosis.
    <bullet> Neurostimulator cases represent a small proportion of the 
total cases in their assigned DRG and have higher costs.
    <bullet> The 11 new ICD-9-CM codes created beginning in FY 2007 
that identify pain are assigned to MDC 23 (Factors Influencing Health 
Status and Other Contacts With Health Services) rather than MDC 1 
(Diseases and Disorders of the Nervous System). The manufacturers were 
concerned that these pain codes will be a common principal diagnosis 
for patients who receive a neurostimulator and will be assigned to MDC 
23, which contains a wide variety of dissimilar diagnoses. The new ICD-
9-CM codes are: 338.0 (Central pain syndrome), 338.11 (Acute pain due 
to trauma), 338.12 (Acute post-thoracotomy pain), 338.18 (Other acute 
postoperative pain), 338.19 (Other acute pain), 338.21 (Chronic pain 
due to trauma), 338.22 (Chronic post-thoracotomy pain), 338.28 (Other 
chronic postoperative pain), 338.29 (Other chronic pain), 338.3 
(Neoplasm related pain (acute)(chronic)), and 338.4 (Chronic pain 
syndrome).
    The manufacturers recommended that we:
    <bullet> Reroute all spinal and peripheral neurostimulator cases 
into a common set of base DRGs.
    <bullet> Reclassify ICD-9-CM pain codes 338.0 through 338.4 
currently assigned to MDC 23 into MDC 1 when reported as the principal 
diagnosis.
    <bullet> Revise surgical CMS DRGs in MDC 1 based on whether the 
patient received a major device.
    <bullet> Split the single surgical CMS DRG in MDC 19 (Mental 
Diseases and Disorders) and MDC 23 into two CMS DRGs: one CMS DRG for 
minor procedures as defined by CMS DRGs 477 (Non-Extensive O.R. 
Procedure Unrelated to Principal Diagnosis) and CMS DRG 468 (Extensive 
O.R. Procedure Unrelated to Principal Diagnosis) and one CMS DRG for 
major procedures.
    <bullet> Create a new CMS DRG in MDC 1 for major devices.
    The manufacturers recognized that implementing a re-routing feature 
in the CMS DRG system would be a major undertaking and, alternatively, 
suggested reassigning the pain codes to MDC 1 as an interim step. In 
the FY 2008 IPPS proposed rule, we noted that we agreed with this 
suggestion. With respect to the suggestion to split the single surgical 
CMS DRG in MDCs 19 and 23 into two CMS DRGs and create a major device 
CMS DRG within MDC 1, in the FY 2008 IPPS proposed rule, we encouraged 
commenters to examine the assignment of neurostimulator cases under the 
MS-DRGs to determine whether the changes we proposed to adopt to better 
recognize severity in the CMS DRG system would address these concerns.
    The implantation of a neurostimulator requires two types of 
procedures. First, the surgeons implant leads containing electrodes 
into the targeted section of the brain, spine, or peripheral nervous 
system. Second, a neurostimulator pulse generator is implanted into the 
pectoral region and extensions from the neurostimulator pulse generator 
are tunneled under the skin and connected with the proximal ends of the 
leads. Hospitals stage the two procedures required for a full system 
neurostimulator implant.
    There are separate ICD-9-CM procedure codes that identify the 
implant of the leads and the insertion of the pulse generator. The 
three codes for the leads insertion are: 02.93 (Implantation or 
replacement of intracranial neurostimulator lead(s)); 03.93 
(Implantation or replacement of spinal neurostimulator lead(s)); and 
code 04.92 (Implantation or replacement of peripheral neurostimulator 
lead(s). The five codes for the insertion of the pulse generator are: 
86.94 (Insertion or replacement of single array neurostimulator pulse 
generator, not specified as rechargeable); 86.95 (Insertion or 
replacement of dual array neurostimulator pulse generator, not 
specified as rechargeable); 86.96 (Insertion or replacement of other 
neurostimulator pulse generator); 86.97 (Insertion or replacement of 
single array rechargeable neurostimulator pulse generator); and 86.98 
(Insertion or replacement of dual array rechargeable neurostimulator 
pulse generator).
    The patient's principal diagnosis determines the MDC assignment. 
Implant of a cranial, spinal or peripheral neurostimulator will result 
in assignment of the case to a surgical DRG within that MDC. Although 
the manufacturers are correct that neurostimulator cases can 
potentially be assigned to many different CMS DRGs

[[Page 47220]]

based on the patient's principal diagnosis, they also provided data 
that showed that nearly 90 percent are assigned to 6 different CMS DRGs 
that cross two MDCs. In MDC 1, neurostimulator cases are assigned to 
four CMS DRGs: CMS DRG 7 (Peripheral and Cranial Nerve and Other 
Nervous System Procedures with CC); CMS DRG 8 (Peripheral and Cranial 
Nerve and Other Nervous System Procedures without CC); CMS DRG 531 
(Spinal Procedures with CC); and CMS DRG 532 (Spinal Procedures without 
CC). In MDC 8 (Disease and Disorders of the Musculoskeletal System and 
Connective Tissue), neurostimulator cases are assigned to two CMS DRGs: 
CMS DRG 499 (Back and Neck Procedures Except Spinal Fusion with CC); 
and CMS DRG 500 (Back and Neck Procedures Except Spinal Fusion without 
CC).
    With very limited exceptions, such as tracheostomies and certain 
types of transplants, the principal diagnosis is fundamental to the 
assignment of a case to an MDC within the DRG system. By relying on the 
patient's principal diagnosis, the DRG system will group together 
patients who are clinically similar. As indicated in the proposed rule, 
for this reason, we were concerned about adopting the suggestion that 
all neurostimulator cases be rerouted to a common DRG irrespective of 
the patient's principal diagnosis. We believe such a step would be 
fundamentally inconsistent with the idea of creating common groups of 
patients who are clinically similar based on diagnosis and procedures. 
For this reason, we do not believe that a rerouting step should be 
adopted that would group together all neurostimulator cases.
    However, in the FY 2008 IPPS proposed rule, we agreed with the 
manufacturers' suggestion that the new ICD-9-CM codes created in FY 
2007 for central and chronic pain syndrome and chronic pain (codes 
338.0, 338.21 through 338.29, and 338.4) should be assigned to MDC 1 
when present as the principal diagnosis. The manufacturers requested 
that we reclassify the pain codes (338.0 through 338.4) from MDC 23 to 
MDC 1. Our medical consultants advised that the acute pain codes (codes 
338.11 through 338.19) should remain in MDC 23 because the acute pain 
is not a neurological condition. According to the manufacturers, the 
National Center for Health Statistics' (NCHS) choice in locating the 
pain codes within ICD-9-CM's Nervous System chapter has much clinical 
validity, particularly for chronic pain. The manufacturers further 
noted that acute pain is typically self-limited, a symptomatic response 
to an immediate insult that serves the body as a warning sign. However, 
chronic pain is unrelenting and serves no warning or protective 
function. It is a disease process of its own accord, according to the 
commenters.
    The manufacturers described pain as follows. Broadly, there are two 
main categories of pain: Nociceptive and neuropathic. Nociceptive pain 
is caused by sensory neurons, called nociceptors, responding to tissue 
damage. This type of pain is the body's normal response to injury. The 
pain is usually localized and time-limited. That is, when the tissue 
damage heals, the pain typically resolves. Acute pain is typically 
nociceptive. In general, nociceptive pain is typically treated with 
anti-inflammatories and, in more severe cases, with opioids via a 
morphine pump for example.
    In contrast, neuropathic pain is caused by malfunctioning or 
pathologically altered nervous pathways stemming from injury to the 
nervous system, either as a direct result of trauma to a nerve (phantom 
limb syndrome, reflex sympathetic dystrophy/complex regional pain 
syndrome after injury) or due to other medical conditions that cause 
damage to the nerve such as herpes (postherpetic neuralgia), diabetes 
(diabetic neuropathy), and peripheral vascular disease (critical limb 
ischemia). Failed back surgery syndrome (FBSS) is another common source 
of neuropathic pain. Typically, neuropathic pain is chronic and may 
persist for months or years beyond the healing of damaged tissue. 
Because the nerves themselves have been damaged, neuropathic pain can 
be considered its own disease process. Neuropathic pain may be more 
difficult to treat than nociceptive pain and has been shown to be more 
responsive to neurostimulation.
    The pain codes, created effective October 1, 2006, are currently 
assigned to MDC 23. The neurostimulator cases with a principal 
diagnosis using the pain codes were assigned to CMS DRG 461 (O.R. 
Procedure with Diagnoses of Other Contact with Health Services) for the 
first time in FY 2007. As explained above, prior to our adoption of the 
new pain codes in FY 2007, these cases had historically been assigned 
to CMS DRGs 7 and 8 (Peripheral and Cranial Nerve and Other Nervous 
System Procedure with and without CC, respectively) in MDC 1. Adopting 
the commenters' recommendation would result in the neurostimulator 
cases being assigned to their historic CMS DRGs.
    Our medical officers agreed that cases that use the new pain 
diagnosis codes for central and chronic pain syndrome and chronic pain 
(codes 338.0, 338.21 through 338.29, and 338.4) as a principal 
diagnosis should be assigned to MDC 1. For this reason, in the FY 2008 
IPPS proposed rule, we proposed to assign cases with a principal 
diagnosis of central pain syndrome (code 338.0), chronic pain due to 
trauma (code 338.21), chronic post-thoracotomy pain (code 338.22), 
other chronic postoperative pain (code 338.28), other chronic pain 
(code 338.29), or chronic pain syndrome (code 338.4) to MDC 1, although 
we explained that we planned to monitor their use and may reassign them 
if needed.
    Comment: Several commenters supported our proposal to assign 
diagnosis codes for central and chronic pain syndrome and chronic pain 
as a principal diagnosis to MDC 1. One commenter stated that this 
proposal recognizes the fundamentally neurologic nature of these cases.
    Response: We appreciate the support of the commenters. Accordingly, 
in this final rule with comment period, we are adding diagnosis codes 
338.0, 338.21, 338.22, 338.28, 338.29, and 338.4 when assigned as a 
principal diagnosis to MDC 1.
b. Intracranial Stents
    Effective October 1, 2004, the ICD-9-CM Coordination and 
Maintenance Committee created procedure code 00.62 (Percutaneous 
angioplasty or atherectomy of intracranial vessel(s)). At the same 
time, we created code 00.65 (Percutaneous insertion of intracranial 
vascular stent(s)). It is our customary practice to assign new codes to 
the same DRG as their predecessor codes. The service described by code 
00.62 was removed from code 39.50 (Angioplasty or atherectomy of other 
noncoronary vessel(s)), which is assigned to CMS DRG 533 (Extracranial 
Procedures with CC) and CMS-DRG 534 (Extracranial Procedures without 
CC) (MS-DRGs 37, 38, and 39 (Extracranial Procedures with MCC, with CC, 
and without CC/MCC, respectively, in this final rule with comment 
period) when the patient has a principal diagnosis in MDC 1. Therefore, 
we assigned code 00.62 to CMS DRGs 533 and 534 in MDC 1 beginning in FY 
2005. In addition, we made code 00.65 a non-O.R. procedure for DRG 
assignment. We also assigned code 00.62 to the Non-Covered Procedure 
edit of the MCE, as Medicare had a national non-coverage determination 
for intracranial angioplasty and atherectomy with stenting.
    Effective November 6, 2006, Medicare covers percutaneous 
transluminal angioplasty (PTA) and stenting of intracranial arteries 
for the treatment of

[[Page 47221]]

cerebral artery stenosis in cases in which stenosis is 50 percent or 
greater in patients with intracranial atherosclerotic disease when 
furnished in accordance with FDA-approved protocols governing Category 
B Investigational Device Exemption (IDE) clinical trials. CMS 
determined that coverage of intracranial PTA and stenting is reasonable 
and necessary under these circumstances. All other indications for PTA 
without stenting to treat obstructive lesions of the vertebral and 
cerebral arteries remain noncovered. This decision can be found online 
in the CMS Coverage Manual (Publication 100.3): http://www.cms.hhs.gov/Manuals/IOM/itemdetail.asp at section 20.7.B.5.
    A manufacturer recently met with CMS to request that code 00.62 be 
reassigned to CMS DRGs 1 and 2 (Craniotomy Age > 17 with and without 
CC, respectively) (MS-DRGs 025 (Craniotomy and Endovascular 
Intracranial Procedures with MCC), 026 (Craniotomy and Endovascular 
Intracranial Procedures with CC), and 027 (Craniotomy and Endovascular 
Intracranial Procedures without CC/MCC) in this final rule with comment 
period) and CMS-DRG 543 (Craniotomy with Major Device Implant or Acute 
Complex Central Nervous System Principal Diagnosis) (MS-DRGs 023 and 
024 (Craniotomy with Major Device Implant or Acute Complex Central 
Nervous System Principal Diagnosis with MCC and without MCC, 
respectively, in this final rule with comment period). The manufacturer 
noted that other similar endovascular intracranial procedures that 
treat a cerebrovascular blockage are currently assigned to the 
craniotomy CMS DRGs. These endovascular-approach cases already assigned 
to the craniotomy CMS DRGs are identified by procedure codes 39.72 
(Endovascular repair or occlusion of head and neck vessels), 39.74 
(Endovascular removal of obstruction from head and neck vessel(s)), and 
39.79 (Other endovascular repair (of aneurysm) of other vessels). Under 
the MS-DRGs in the FY 2008 IPPS proposed rule, we proposed the 
assignment of procedure codes 39.72, 39.74, and 39.79 to MS-DRGs 025, 
026, and 027 and MS-DRGs 023 and 024. Although we have concerns about 
the assignment of additional endovascular procedures to an open 
surgical DRG, we agreed that there is clinical consistency between 
procedure codes 39.72, 39.74, and 39.79 and procedure code 00.62. For 
this reason, we agreed that procedure code 00.62 should be assigned to 
MS-DRGs 025, 026, and 027, and MS-DRGs 023 and 024, which are divided 
by the presence or absence of specific CCs.
    In order to assure appropriate DRG assignment as described above, 
we proposed to make conforming changes to the MCE by removing code 
00.62 from the Non-Covered Procedure edit. However, as intracranial PTA 
is only covered when performed in conjunction with insertion of a 
stent, we proposed to redefine the edit by specifying that code 00.62 
must be accompanied by code 00.65 (Percutaneous insertion of 
intracranial vascular stent(s)). Should code 00.65 not be reported on 
the claim, the case would fail the MCE edit. For a full discussion of 
this change, we refer readers to the MCE discussion in section II.F.6. 
of the preamble of this final rule with comment period.
    Although we proposed to assign endovascular intracranial procedures 
to the same MS-DRGs as craniotomy, we remained concerned that 
endovascular intracranial procedures are clinically different than open 
craniotomy surgical procedures and may have very different resource 
requirements. At the current time, there are an insufficient number of 
cases to warrant creation of a separate base DRG for endovascular 
intracranial procedures. However, as we indicated in the proposed rule, 
we intend to revisit the assignment of intracranial endovascular 
procedures at a later date when more data are available to analyze 
these cases.
    Comment: Several commenters supported the proposal to assign 
endovascular procedure codes to open surgical DRGs. One commenter 
commended CMS for the proposal and stated that the reassignment places 
these cases in DRGs of more appropriate clinical and resource 
homogeneity (than their previous assignments to the extracranial 
procedure DRGs).
    Response: We continue to have reservations about the classification 
of open craniotomy surgeries and endovascular cranial procedures within 
the same DRGs. However, we note that there is clinical consistency 
between procedure codes 39.72, 39.74, 39.79 (endovascular procedures on 
the head and neck), which are assigned to open surgical DRGs, and code 
00.62 (an intracranial endovascular procedure). We will continue to 
monitor these DRGs for uniformity both from a clinical as well as a 
resource-consumption standpoint as more data become available.
    In this final rule with comment period, for FY 2008, we are 
assigning code 00.62 to MS-DRGs 25, 26, and 27 as well as MS-DRGs 23 
and 24, as we proposed and describe above. We note that the claims 
containing code 00.62 must be accompanied by code 00.65 in order to 
qualify as a covered procedure. As previously stated, the lack of code 
00.65 on the claim will cause the claim to fail the MCE edit, and the 
claim will be denied.
3. MDC 3 (Diseases and Disorders of the Ear, Nose, Mouth, and Throat)--
Cochlear Implants
    Cochlear implants were first covered by Medicare in 1986 and were 
assigned to CMS DRG 49 (Major Head and Neck Procedures) in MDC 3 
(Diseases and Disorders of the Ear, Nose, Mouth, and Throat). CMS DRG 
49 is the highest weighted DRG in that MDC. However, two manufacturers 
of cochlear implants contend that this DRG assignment is clinically and 
economically inappropriate and have requested that cochlear implant 
cases be reassigned from CMS DRG 49 to CMS DRG 543 (Craniotomy with 
Major Device Implant or Acute Complex Central Nervous System Principal 
Diagnosis).
    The manufacturers stated that procedures assigned to CMS DRG 49 are 
performed mostly for diseases such as head and neck cancers, while 
procedures in CMS DRG 543 include operations on and inside the skull 
and implantation of complex devices, including intracranial 
neurostimulators. The manufacturers described the cochlear implant 
procedure as requiring incisions behind the ear to remove a section of 
the temporal bone, followed by microscopic neurotologic surgery under 
general anesthesia, and is typically completed in 2 to 4 hours to 
restore hearing to the profoundly deaf. For these reasons, these 
manufacturers believe cochlear implant procedures are similar to open 
craniotomies.
    Based on their analysis of the FY 2005 MedPAR data, the 
manufacturers identified a total of 139 cochlear implant cases using 
ICD-9-CM procedure codes 20.96 (Implantation or replacement of cochlear 
prosthetic device NOS), 20.97 (Implantation or replacement of cochlear 
prosthetic device, single channel), and 20.98 (Implantation or 
replacement of cochlear prosthetic device, multiple channel). The 
manufacturers reported 121 out of 139 cochlear implant cases were 
assigned to CMS DRG 49 with average standardized charges of 
approximately $58,078.
    When we reviewed the FY 2006 MedPAR data, we identified 104 
cochlear implant cases assigned to CMS DRG 49. In the MS-DRGs in the FY 
2008 IPPS proposed rule, CMS-DRG 49 is subdivided into two severity 
levels: MS-DRG 129 (Major Head and Neck

[[Page 47222]]

Procedures with CC or MCC) and MS DRG 130 (Major Head and Neck 
Procedures without CC). The following table displays our results:

------------------------------------------------------------------------
                                                  Average
              MS-DRG                Number of    length of     Average
                                      cases         stay       charges
------------------------------------------------------------------------
MS-DRG 130--All cases............        1,095         3.04      $23,928
MS-DRG 130--Code 20.96 cases only           38         1.63       51,740
MS-DRG 130--Code 20.97 cases only            2         1.50       38,855
MS-DRG 130--Code 20.98 cases only           45         1.24       50,219
MS-DRG 129--All cases............        1,244         5.35       34,169
MS-DRG 129--Code 20.96 cases only           10         2.70       81,351
MS-DRG 129--Code 20.97 cases only            1         5.00       95,441
MS-DRG 129--Code 20.98 cases only            8         3.13       53.510
------------------------------------------------------------------------

    Under the proposed MS-DRGs, 19 out of 104 cochlear implant cases 
are assigned to MS-DRG 129 based on the secondary diagnosis of the 
patient. The 85 remaining cochlear implant cases do not have a CC or 
MCC and were proposed to be assigned to MS-DRG 130, absent further 
changes to the DRG logic.
    The average charges of approximately $54,238 for cochlear implant 
cases are higher than the average charges of approximately $29,375 for 
the other cases in CMS DRG 49. However, the average charges are not as 
high as the average charges of approximately $78,118 for cases assigned 
to CMS DRG 543. Further, our medical advisors do not believe that 
surgery to implant a cochlear implant is clinically similar to an open 
craniotomy in MDC 1 because typically a craniotomy involves removing 
and then replacing a section of the skull in order to perform a 
procedure on or within the brain, whereas a cochlear implant involves 
drilling a hole in the mastoid bone in order to insert the implant into 
the inner ear.
    We have been unable to address this issue under the current DRGs 
because there are not enough inpatient cochlear implant cases to 
warrant creation of a separate DRG. Although these cases will continue 
to have higher charges than other cases in their assigned DRG, in the 
FY 2008 proposed rule, we proposed to move the cochlear implant cases 
to the higher DRG severity level within CMS DRG-49. As part of this 
proposal, we indicated that we would redefine MS-DRG 129 as ``Major 
Head and Neck Procedures with CC or MCC or Major Device.'' The presence 
of a major head and neck procedure with a CC or MCC or major device 
would assign the case to the higher severity level within CMS-DRG 49.
    Comment: Some commenters supported the proposed reassignment of 
cochlear implant cases to MS-DRG 129.
    Response: We appreciate the commenters' support for the proposed 
MS-DRG assignment for these cases.
    Comment: Two commenters expressed appreciation for CMS's 
recognition of the payment issues facing cochlear implants by proposing 
to classify these cases to MS-DRG 129. However, one of the commenters 
stated that, even with the proposed reassignment, the costs of these 
cases are nearly 60 percent higher than all cases within MS-DRG 129.
    The commenters contended that these procedures should be assigned 
to MS-DRG 24 (Craniotomy with Major Device Implant or Acute Complex 
Central Nervous System Principal Diagnosis with MCC). They pointed out 
that cases that have been assigned to DRG 543 in the CMS-DRGs are 
assigned to MS-DRGs 23 and 24 (Craniotomy with Major Device Implant or 
Acute Complex Central Nervous System Principal Diagnosis with and 
without MCC) in the MS-DRGs. The commenters stated that cochlear 
implant procedures are clinically and resource coherent with other 
craniotomy procedures such as Kinetra[supreg] dual array deep brain 
stimulator and should be assigned to MS-DRG 024. One of the commenters 
indicated that the principal diagnosis codes for hearing loss are 
currently assigned to MDC 3, not MDC 1. They believed that this MDC 
assignment prevents cochlear implants from being assigned to MS-DRG 
024. The commenters suggested that sensorineural hearing loss (codes 
389.10-389.18) is a nervous system disorder that should be assigned to 
MDC 1. One commenter stated that cochlear implantation cases should be 
assigned as a pre-MDC based on complexity and should be assigned to a 
separate or different DRG that involves implantation of a complex 
neural stimulation device. Another commenter recommended that CMS 
develop a third level of complexity for major head and neck procedures 
and assign cochlear implants to the highest severity level.
    Response: Our medical advisors do not believe that surgery to 
implant a cochlear implant is clinically similar to an open craniotomy 
in MDC 1. Typically, a craniotomy involves removing and then replacing 
a section of the skull in order to perform a procedure on or within the 
brain, whereas a cochlear implant involves entering the mastoid bone, 
not the intracranial space.
    With regard to the MDC assignment, we believe that sensorineural 
hearing loss is due to a defect in the inner ear or the acoustic nerve 
and is a disorder of the ear that is appropriately assigned to MDC 3.
    As the low volume of cochlear implant cases does not justify a new 
MS-DRG, the current base DRG assignment for cochlear implants is 
appropriate. In addition, MS-DRG 129 does not meet the criteria for a 
three-level split. Therefore, we do not believe there is a better 
alternative to the policy we proposed. Accordingly, in this final rule 
with comment period, we are assigning all cochlear implant cases to MS-
DRG 129. MS-DRG 129 is redefined as ``Major Head and Neck Procedures 
with CC or MCC or Major Device.''
4. MDC 8 (Diseases and Disorders of the Musculoskeletal System and 
Connective Tissue)
a. Hip and Knee Replacements
    In the FY 2006 IPPS final rule (70 FR 47303), we deleted DRG 209 
(Major Joint and Limb Reattachment Procedures of Lower Extremity) and 
created two new DRGs: 544 (Major Joint Replacement or Reattachment of 
Lower Extremity) and 545 (Revision of Hip or Knee Replacement). The two 
new DRGs were created because revisions of joint replacement procedures 
are significantly more resource intensive than original hip and knee 
replacement procedures. DRG 544 includes the following procedure code 
assignments:
    <bullet> 81.51, Total hip replacement
    <bullet> 81.52, Partial hip replacement
    <bullet> 81.54, Total knee replacement

[[Page 47223]]

    <bullet> 81.56, Total ankle replacement
    <bullet> 84.26, Foot reattachment
    <bullet> 84.27, Lower leg or ankle reattachment
    <bullet> 84.28, Thigh reattachment
    DRG 545 includes the following procedure code assignments:
    <bullet> 00.70, Revision of hip replacement, both acetabular and 
femoral components
    <bullet> 00.71, Revision of hip replacement, acetabular component
    <bullet> 00.72, Revision of hip replacement, femoral component
    <bullet> 00.73, Revision of hip replacement, acetabular liner and/
or femoral head only
    <bullet> 00.80, Revision of knee replacement, total (all 
components)
    <bullet> 00.81, Revision of knee replacement, tibial component
    <bullet> 00.82, Revision of knee replacement, femoral component
    <bullet> 00.83, Revision of knee replacement, patellar component
    <bullet> 00.84, Revision of knee replacement, tibial insert (liner)
    <bullet> 81.53, Revision of hip replacement, not otherwise 
specified
    <bullet> 81.55, Revision of knee replacement, not otherwise 
specified
    Further, we created a number of new ICD-9-CM procedure codes 
effective October 1, 2005, that better distinguish the many different 
types of joint replacement procedures that are currently being 
performed. In the FY 2006 IPPS final rule (70 FR 47305), we indicated a 
commenter had requested that, once we receive claims data using the new 
procedure codes, we closely examine data from the use of the codes 
under the two new DRGs to determine if future additional DRG 
modifications are needed.
    Further, the American Association of Hip & Knee Surgeons (AAHKS) 
recommended that we make further refinements to the DRGs for knee and 
hip arthroplasty procedures. AAHKS previously presented data to CMS on 
the important differences in clinical characteristics and resource 
utilization between primary and revision total joint arthroplasty 
procedures. AAHKS stated that CMS' decision to create a separate DRG 
for revision of total joint arthroplasty (TJA) in October 2005 resulted 
in more equitable reimbursement for hospitals that perform a 
disproportionate share of complex revision of TJA procedures, 
recognizing the higher resource utilization associated with these 
cases. AAHKS stated that this important payment policy change led to 
increased access to care for patients with failed total joint 
arthroplasties, and ensured that high volume TJA centers could continue 
to provide a high standard of care for these challenging patients.
    AAHKS further stated that the addition of new, more descriptive 
ICD-9-CM diagnosis and procedure codes for TJA in October 2005 gave it 
the opportunity to further analyze differences in clinical 
characteristics and resource intensity among TJA patients and 
procedures. Inclusive of the preparatory work to submit its 
recommendations, the AAHKS compiled, analyzed, and reviewed detailed 
clinical and resource utilization data from over 6,000 primary and 
revision TJA procedure codes from 4 high volume joint arthroplasty 
centers located within different geographic regions of the United 
States: University of California, San Francisco, CA; Mayo Clinic, 
Rochester, MN; Massachusetts General Hospital, Boston, MA; and the 
Hospital for Special Surgery, New York, NY. Based on its analysis, 
AAHKS recommended that CMS examine Medicare claims data and consider 
the creation of separate DRGs for total hip and total knee arthroplasty 
procedures. CMS DRG 545 currently contains revisions of both hip and 
knee replacement procedures. AAHKS stated that based on the differences 
between patient characteristics, procedure characteristics, resource 
utilization, and procedure code payment rates between total hip and 
total knee replacements, separate DRGs were warranted. Furthermore, 
AAHKS recommended that CMS create separate base DRGs for routine versus 
complex joint revision or replacement procedures as shown below.

Routine Hip Replacements

    <bullet> 00.73, Revision of hip replacement, acetabular liner and/
or femoral heal only
    <bullet> 00.85, Resurfacing hip, total, acetabulum and femoral head
    <bullet> 00.86, Resurfacing hip, partial, femoral head
    <bullet> 00.87, Resurfacing hip, partial, acetabulum
    <bullet> 81.51, Total hip replacement
    <bullet> 81.52, Partial hip replacement
    <bullet> 81.53, Revision of hip replacement, not otherwise 
specified

Complex Hip Replacements

    <bullet> 00.70, Revision of hip replacement, both acetabular and 
femoral components
    <bullet> 00.71, Revision of hip replacement, acetabular component
    <bullet> 00.72, Revision of hip replacement, femoral component

Routine Knee Replacements and Ankle Procedures

    <bullet> 00.83, Revision of knee replacement, patellar component
    <bullet> 00.84, Revision of knee replacement, tibial insert (liner)
    <bullet> 81.54, Revision of knee replacement, not otherwise 
specified
    <bullet> 81.55, Revision of knee replacement, not otherwise 
specified
    <bullet> 81.56, Total ankle replacement

Complex Knee Replacements and Other Reattachments

    <bullet> 00.80, Revision of knee replacement, total (all 
components)
    <bullet> 00.81, Revision of knee replacement, tibial component
    <bullet> 00.82, Revision of knee replacement, femoral component
    <bullet> 84.26, Foot reattachment
    <bullet> 84.27, Lower leg or ankle reattachment
    <bullet> 84.28, Thigh reattachment
    AAHKS also recommended the continuation of CMS DRG 471 (Bilateral 
or Multiple Major Joint Procedures of Lower Extremity) without 
modifications. CMS DRG 471 includes any combination of two or more of 
the following procedure codes:
    <bullet> 00.70, Revision of hip replacement, both acetabular and 
femoral components
    <bullet> 00.80, Revision of knee replacement, total (all 
components)
    <bullet> 00.85, Resurfacing hip, total, acetabulum and femoral head
    <bullet> 00.86, Resurfacing hip, partial, femoral head
    <bullet> 00.87, Resurfacing hip, partial, acetabulum
    <bullet> 81.51, Total hip replacement
    <bullet> 81.52, Partial hip replacement
    <bullet> 81.54, Total knee replacement
    <bullet> 81.56, Total ankle replacement
    As discussed in section II.C. of the preamble of this final rule 
with comment period, we proposed, and are adopting in this final rule 
with comment period, MS-DRGs to better recognize severity of illness 
for FY 2008. The MS-DRGs include two new severity of illness levels 
under the current base DRG 544. We also proposed to add three new 
severity of illness levels to the base DRG for Revision of Hip or Knee 
Replacement (currently DRG 545). The new MS-DRGs are as follows:
    <bullet> MS-DRG 466 (Revision of Hip or Knee Replacement with MCC)
    <bullet> MS-DRG 467 (Revision of Hip or Knee Replacement with CC)
    <bullet> MS-DRG 468 (Revision of Hip or Knee Replacement without 
CC/MCC)
    <bullet> MS-DRG 469 (Major Joint Replacement or Reattachment of 
Lower Extremity with MCC)

[[Page 47224]]

    <bullet> MS-DRG 470 (Major Joint Replacement or Reattachment of 
Lower Extremity without MCC)
    We found that the MS-DRGs greatly improved our ability to identify 
joint procedures with higher resource costs. The following table 
indicates the average charges for each new MS-DRG for the joint 
procedures.

     MS-DRGs That Replace DRGs 544 and 535 With New Severity Levels
------------------------------------------------------------------------
                                                  Average
              MS-DRG                Number of    length of     Average
                                      cases         stay       charges
------------------------------------------------------------------------
MS-DRG 466.......................        3,886         9.55   $69,649.08
MS-DRG 467.......................       10,078         6.06    48,575.01
MS-DRG 468.......................       26,718         4.06    38,720.28
MS-DRG 483.......................       28,211         8.46    53,676.09
MS-DRG 484.......................      390,344         4.03    33,465.85
------------------------------------------------------------------------

    AAHKS analyzed Medicare data under the CMS DRG system and was 
unaware of how its analysis would change under the proposed MS-DRGs. 
Under the CMS DRGs, the AAHKS recommendation would replace 2 DRGs with 
4 new ones. However, under the proposed MS- DRGs, the AAHKS 
recommendation would result in 5 DRGs becoming 12. Because AAHKS is 
recommending four new joint replacement DRGs (two for knees and two for 
hips), each would need to be subdivided into severity levels under our 
proposed MS-DRG system. Therefore, the four new joint DRGs could be 
subdivided into three levels each, leading to 12 new DRGs. For the 
proposed rule, we indicated that the changes we proposed to adopt are 
sufficiently better for recognizing severity of illness among the hip 
and knee replacement cases. We did not believe that there would be 
significant improvements in the proposed MS-DRGs' recognition of 
severity of illness from creating an additional 7 DRGs. However, we 
acknowledged the valuable assistance the AAHKS had provided to CMS in 
creating the new joint replacement procedure codes and modifying the 
joint replacement DRGs beginning in FY 2006. These efforts greatly 
improved our ability to categorize significantly different groups of 
patients according to severity of illness. In the proposed rule, we 
welcomed comments from AAHKS on whether the proposed MS-DRGs recognize 
patient complexity and severity of illness in the hip and knee 
replacement DRGs consistent with the concerns it expressed to us in 
previous comments. We also welcomed public comments from others on 
whether the proposed changes to the hip and knee replacement DRGs 
better recognize severity of illness and complexity of these operations 
in the Medicare patient population.
    Comment: Two commenters supported CMSs' efforts to refine the DRG 
system to better identify costs associated with different joint 
procedures. The commenters encouraged CMS to continue working with the 
orthopedic community, including AAHKS, to monitor the need for 
additional new DRGs. The commenters stated that proposed MS-DRGs 466 
through 470 are a good first step. However, they stated that CMS should 
continue to evaluate the data for these procedures and consider 
additional refinements to the MS-DRGs, including the need for 
additional severity levels.
    Response: We agree that MS-DRGs better identify resource costs for 
joint procedures than do the CMS DRGs. The AAHKS and others are welcome 
to suggest additional refinements to us if they believe further 
improvements are needed.
    Comment: One commenter (AAHKS) stated that it was pleased that CMS 
decided to recognize both surgical complexity and medical severity of 
illness in the MS-DRGs. The commenter stated that MS-DRGs are more 
reflective of procedural complexity than the CS-DRGs proposed last 
year. In addition, the commenter believed that the process is fairly 
straightforward, making it easier to understand, with the grouping 
logic available in the public domain. However, the commenter raised 
several concerns about the proposed joint replacement and revision MS-
DRGs. AAHKS stated that its data suggest that all three base DRGs 
(primary replacement, revision of major joint replacement, and 
bilateral joint replacement) should be separated into three severity 
levels (that is, MCC, CC, and non-CC). We proposed three severity 
levels for revision of hip and knee replacement (MS-DRGs 466, 467, and 
468). The commenter agreed with this 3-level subdivision.
    The commenter recommended that the base DRG for the proposed two 
severity subdivision MS-DRGs for major joint replacement or 
reattachment of lower extremity with and without CC/MCC (MS-DRGs 483 
and 484) be subdivided into three severity levels, as was the case for 
the revision of hip and knee replacement MS-DRGs. The commenter also 
recommended that the two severity subdivision MS-DRGs for bilateral or 
multiple major joint procedures of lower extremity with and without MCC 
(MS-DRGs 461 and 462) be subdivided three ways for this base DRG. The 
commenter acknowledged that the three-way split would not meet all five 
of the criteria for establishing a subgroup, and stated that these 
criteria were too restrictive, lack face validity, and create perverse 
admission selection incentives for hospitals by significantly 
overpaying for cases without a CC and underpaying for cases with a CC. 
The commenter recommended that the existing five criteria be modified 
for low volume subgroups to assure materiality. For higher volume MS-
DRG subgroups, the commenter recommended that two other criteria be 
considered, particularly for nonemergency, elective admissions:
    <bullet> Is the per-case underpayment amount significant enough to 
affect admission vs. referral decisions on a case-by-case basis?
    <bullet> Is the total level of underpayments sufficient to 
encourage systematic admission vs. referral policies, procedures, and 
marketing strategies?
    The commenter also recommended refining the five existing criteria 
for MCC/CC without subgroups as follows:
    <bullet> Create subgroups if they meet the five existing criteria, 
with cost difference between subgroups ($1,350) substituted for charge 
difference between subgroups ($4,000);
    <bullet> If a proposed subgroup meets criteria number 2 and 3 (at 
least 5 percent and at least 500 cases) but fails one of the others, 
then create the subgroup if either of the following criteria are met:
    <bullet> At least $1,000 cost difference per case between 
subgroups; or
    <bullet> At least $1 million overall cost should be shifted to 
cases with a CC (or

[[Page 47225]]

MCC) within the base DRG for payment weight calculations.
    Response: In section II.B.3. of this preamble, we respond to the 
recommendation that we modify our five criteria for creating severity 
subgroups and state we do not believe it is appropriate to do so at 
this time. At this time, we believe the criteria we established to 
create subdivisions within a base DRG are reasonable and establish the 
appropriate balance between better recognition of severity of illness, 
sufficient differences between the groups, and a reasonable number of 
cases in each subgroup. However, we may consider further modifications 
to the criteria at a later date once we have had some experience with 
MS-DRGs created using the proposed criteria. We examined data for the 
base DRGs for MS-DRGs 461 and 462 (Bilateral or Multiple Major Joint 
Procedures of Lower Extremity with MCC and without MCC, respectively) 
as well as the base DRGs for MS-DRGs 469 and 470 (Major Joint 
Replacement or Reattachment of Lower Extremity with CC and without CC, 
respectively) for the proposed rule.
    Our data did not support creating additional subdivisions based on 
the criteria we proposed.
    Comment: Another commenter (AAHKS) continued to support the 
separation of routine and complex joint procedures. The commenter 
believed that certain joint replacement procedures have significantly 
lower average charges than do other joint replacements. The commenter's 
data suggest that more routine joint replacements are associated with 
substantially less resource utilization than other more complex 
revision procedures. The commenter stated that leaving these procedures 
in the revision MS-DRGs results in substantial overpayment for these 
relatively simple, less costly revision procedures, which in turn 
results in a relative underpayment for the more complex revision 
procedures.
    Response: We examined data on this issue and identified two 
procedure codes for partial knee revisions that had significantly lower 
average charges than did other joint revisions. The two codes are as 
follows:
    <bullet> 00.83 Revision of knee replacement, patellar component
    <bullet> 00.84 Revision of total knee replacement, tibial insert 
(liner)
    The following table illustrates our findings for MS-DRG 466 
(Revision of Hip or Knee Replacement with MCC), MS-DRG 467 (Revision of 
Hip or Knee replacement with CC), and MS-DRG 468 (Revision of Hip or 
Knee Replacement without CC/MCC):

------------------------------------------------------------------------
                                                  Average
              MS-DRG                Number of    length of     Average
                                      cases         stay       charges
------------------------------------------------------------------------
MS-DRG 466--All cases............        3,886         9.55   $69,649.08
MS-DRG 466 with code 00.83 or              258        10.53    54,141.72
 00.84 only......................
MS-DRG 467--All cases............       10,078         6.06    48,575.01
MS-DRG 467 with code 00.83 or              955         5.47    31,191.04
 00.84 only......................
MS-DRG 468--All cases............       26,718         4.06    38,720.28
MS-DRG 468 with code 00.83 or            2,718         3.45    22,799.31
 00.84 only......................
------------------------------------------------------------------------

    Cases with codes 00.83 and 00.84 have significantly lower charges 
than do other cases in these DRGs. For cases in MS-DRG 466, those with 
codes 00.83 or 00.84 have average charges of $54,141.72 compared to 
average charges of $69,646.08 for all cases within the DRG, a 
difference of $15,507.36. There is a difference of $17,383.97 for MS-
DRG 467 and $15,920.97 for MS-DRG 468. The data suggest that these less 
complex partial knee revisions are less resource intensive than other 
cases assigned to MS-DRGs 466, 467, or 468. We examined other 
orthopedic DRGs to which these two codes could be assigned. As can be 
seen in the table below, these cases have very similar average charges 
to those in MS-DRG 485 (Knee Procedures with Principal Diagnosis of 
Infection with MCC), MS-DRG 486 (Knee Procedures with Principal 
Diagnosis of Infection with CC), MS-DRG 487 (Knee Procedures with 
Principal Diagnosis of Infection without CC), MS-DRG 488 (Knee 
Procedures without Principal Diagnosis of Infection with CC or MCC), 
and MS-DRG 489 (Knee Procedures without Principal Diagnosis of 
Infection without CC).

------------------------------------------------------------------------
                                                  Average
              MS-DRG                Number of    length of     Average
                                      cases         stay       charges
------------------------------------------------------------------------
MS-DRG 485--All cases............          916        12.69   $59,722.69
MS-DRG 485 with code 00.83 or              174        11.71    57,649.86
 00.84 only......................
MS-DRG 486--All cases............        1,461         8.39    37,730.19
MS-DRG 486 with code 00.83 or              336         7.73    37,315.10
 00.84 only......................
MS-DRG 487--All cases............        1,139         5.84    27,184.41
MS-DRG 487 with code 00.83 or              262         7.73    29,142.35
 00.84 only......................
MS-DRG 488--All cases............        1,462         5.66    30,073.21
MS-DRG 488 with code 00.83 or              703         4.24    30,138.06
 00.84 only......................
MS-DRG 489--All cases............        3,687         3.11    18,865.79
MS-DRG 489 with code 00.83 or            2,456         3.18    22,122.64
 00.84 only......................
------------------------------------------------------------------------

    Given the very similar resource requirements of MS-DRG 485 and the 
fact that these DRGs also contain knee procedures, we will move codes 
00.83 and 00.84 out of MS-DRGs 466, 467, and 468 and into MS-DRGs 485, 
486, 487, 488, and 489. We will continue to monitor the revision DRGs 
to determine if additional modifications are needed.
    Comment: One commenter expressed concern about the grouper logic 
for assigning cases to MS-DRG 471 (Bilateral or Multiple Major Joint 
Procedures of Lower Extremity (current CMS-DRG 471)). Specifically, the 
commenter stated that the following bilateral joint replacements should 
be,

[[Page 47226]]

but are not, assigned to MS-DRGs 461 and 462.
    <bullet> A patient receives identical acetabular revisions of both 
hips (00.71 and 00.71).
    <bullet> A patient receives a total revision of one hip (00.70) and 
an acetabular revision of the other hip (00.71).
    <bullet> A patient receives both a total hip replacement (81.51) 
and a total knee replacement (81.54).
    <bullet> A patient receives both a total revision of one hip 
(00.70) and a total replacement of the other hip (81.51).
    Response: We addressed this issue in the FY 2007 final rule and do 
not believe additional modifications are needed. We are providing the 
following summary of the previous action. After publication of the FY 
2006 IPPS final rule, a number of hospitals and coding personnel 
advised us that the DRG logic for CMS DRG 471 (Bilateral or Multiple 
Major Joint Procedures of Lower Extremity), which utilizes the new and 
revised hip and knee procedure codes under CMS DRGs 544 and 545, also 
includes codes that describe procedures that are not bilateral or that 
do not involve multiple major joints. CMS DRG 471 was developed to 
include cases where major joint procedures such as revisions or 
replacements were performed either bilaterally or on two joints of one 
lower extremity. We changed the logic for CMS DRG 471 in FY 2006 for 
the first time when we added the new and revised codes. The commenters 
indicated that, by adding the more detailed codes that do not include 
total revisions or replacements to the list of major joint procedures 
to CMS DRG 471, we were assigning cases to CMS DRG 471 that did not 
have bilateral or multiple joint procedures. For example, when a 
hospital reported a code for revision of the tibial component (code 
00.81) and patellar component of the right knee (code 00.83), the FY 
2006 DRG logic assigned the case to CMS DRG 471. The commenters 
indicated that this code assignment was incorrect because only one 
joint has undergone surgery, but two components were used. One 
commenter indicated that ICD-9-CM did not identify left/right 
laterality. Therefore, it was difficult to use the current coding 
structure to determine if procedures were performed on the same leg or 
on both legs. The commenters raised concern about whether CMS intended 
to pay hospitals using CMS DRG 471 for procedures performed on one 
joint. The commenters indicated that the DRG assignments for these 
codes would also make future data analysis misleading. The commenters 
recommended removing codes from CMS DRG 471 that do not specifically 
identify bilateral or multiple joint procedures so that it would only 
include cases involving the more resource intensive cases of bilateral 
or multiple total joint replacements and revisions.
    We agreed that the new and revised joint procedure codes should not 
be assigned to CMS DRG 471 unless they include bilateral and multiple 
joints. Therefore, in the FY 2007 IPPS final rule, we removed the 
following codes from CMS DRG 471 that did not identify bilateral and 
multiple joint revisions or replacements:
    <bullet> 00.71, Revision of hip replacement, acetabular component
    <bullet> 00.72, Revision of hip replacement, femoral component
    <bullet> 00.73, Revision of hip replacement, acetabular liner and/
or femoral head only
    <bullet> 00.81, Revision of knee replacement, tibial component
    <bullet> 00.82, Revision of knee replacement, femoral component
    <bullet> 00.83, Revision of knee replacement, patellar component
    <bullet> 00.84, Revision of total knee replacement, tibial insert 
(liner)
    <bullet> 81.53, Revision of hip replacement, not otherwise 
specified
    <bullet> 81.55, Revision of knee replacement, not otherwise 
specified
    DRG 471 contains the following codes:
    <bullet> 00.70, Revision of hip replacement, both acetabular and 
femoral components
    <bullet> 00.80, Revision of knee replacement, total (all 
components)
    <bullet> 00.85, Resurfacing hip, total, acetabulum and femoral head
    <bullet> 00.86, Resurfacing hip, partial, femoral head
    <bullet> 00.87, Resurfacing hip, partial, acetabulum
    <bullet> 81.51, Total hip replacement
    <bullet> 81.52, Partial hip replacement
    <bullet> 81.54, Total knee replacement
    <bullet> 81.56, Total ankle replacement
    As a result of the removal of the identified codes from CMS DRG 471 
in FY 2007, the reporting of one or more of the following hip or knee 
revision codes would be assigned to DRG 545: 00.71, 00.72, 00.73, 
00.81, 00.82, 00.83, 00.84, 81.53, and 81.55. This list included 
partial revisions of the knee and hip as well as unspecified joint 
procedures such as code 81.55 where it was not clear if the revision is 
total or partial.
    Given this historical information of the changes we made in FY 
2007, we will address the current commenter's concerns. The commenter's 
first scenario in which a patient received identical acetabular 
revisions of both hips 00.71 and 00.71 would not be assigned to CMS DRG 
471 (Bilateral or Multiple Major Joint Procedures of Lower Extremity), 
which becomes MS-DRGs 461 and 462. Even though this scenario identified 
revisions to two joints, they were both partial revisions that were 
less resource intensive than full bilateral or multiple joint revisions 
or replacements. In our view, the decision not to assign these cases to 
CMS DRG 471 was consistent with the public comments we received on the 
FY 2007 IPPS rule to ensure that CMS DRG 471 includes only full 
bilateral or multiple joint replacements or revisions. Similarly, the 
second scenario in which a patient receives a total revision of one hip 
(00.70) and a partial acetabular revision of the other hip (00.71) 
would not lead to the assignment of CMS DRG 471 for the same reason. As 
with the first scenario, code 00.71 was not included in CMS DRG 471. 
There was only one total and one partial joint revision in this 
scenario. Again, we believe that our decision not to assign these cases 
to CMS DRG 471 was consistent with the public comments to only include 
bilateral or multiple full revisions or replacements in this DRG. The 
third and fourth scenarios in which a patient received both a total hip 
replacement (81.51) and a total knee replacement (81.54) and another 
patient received both a total revision of one hip (00.70) and a total 
replacement of the other hip (81.51) would be assigned to CMS DRG 471. 
These are either full replacements or revisions on multiple joints. As 
we adopted the same logic to assign cases under the MS-DRGs as under 
the CMS DRGs, only full replacements or revisions of multiple joints 
will be included in MS-DRGs 461 and 462 (the MS-DRG analog to CMS DRG 
471). Therefore, we are not making any revisions to the bilateral or 
multiple major joint procedures of lower extremity DRGs, MS DRG 461 and 
462. The same procedure code DRG logic used in CMS DRG 471 will be 
applied to MS DRGs 461 and 462.
b. Spinal Fusions
    In the FY 2007 IPPS final rule (71 FR 47947), we discussed a 
request that urged CMS to consider applying a severity concept to all 
of the back and spine surgical cases, similar to the approach that was 
used in the FY 2006 final rule in refining the cardiac DRGs with an 
MCV. Specifically, the commenter recommended that the use of spinal 
devices be uniquely identified within the spine DRGs. The commenter's 
suggestion involved the development of 10 new spine DRGs as

[[Page 47227]]

well as additional modifications. One of these modifications included 
revising CMS DRG 546 (Spinal Fusions Except Cervical with Curvature of 
the Spine or Malignancy). The commenter stated CMS DRG 546 did not 
adequately recognize clinical severity or the resource differences 
among spinal fusion patients whose surgeries include fusing multiple 
levels of their spinal vertebrae.
    We agreed with the commenter that it was important to recognize 
severity when classifying groups of patients into specific DRGs. In 
addition, in response to recommendations from MedPAC's March 2005 
Report to Congress, we stated that we were conducting a comprehensive 
analysis of the entire DRG system to determine if we could better 
identify severity of illness. We further stated that until results from 
our analysis were available, it would be premature to implement a 
severity concept for the spine DRGs. Therefore, we did not make any 
adjustments to those DRGs at that time.
    Under the MS-DRGs described in section II.D. of the preamble of the 
proposed rule, we proposed a number of refinements that would better 
recognize severity for FY 2008. The proposed MS-DRGs, which we are 
adopting in this final rule with comment period, included several 
refinements to the spine DRGs. These refinements are described in 
detail below.
    In the FY 2006 IPPS final rule, we noted that there are numerous 
innovations occurring in spinal surgery such as artificial spinal disc 
prostheses, kyphoplasty, vertebroplasty and the use of spine 
decompression devices. As part of our analysis of the DRG system for 
the proposed rule, we did a comprehensive review of the DRGs for spinal 
fusion and other back and neck procedures to determine whether 
additional refinements beyond the proposed MS-DRGs were necessary. We 
studied data from the FY 2006 MedPAR file for the entire group of spine 
DRGs. This group included DRG 496 (Combined Anterior/Posterior Spinal 
Fusion), DRGs 497 and 498 (Spinal Fusion Except Cervical with and 
without CC, respectively), DRGs 499 and 500 (Back and Neck Procedures 
Except Spinal Fusion with and without CC, respectively), DRGs 519 and 
520 (Cervical Spinal Fusion with and without CC, respectively), and DRG 
546 (Spinal Fusion Except Cervical with Curvature of the Spine or 
Malignancy).
    As indicated earlier, we proposed a two or three-way split for each 
of these spine DRGs to better recognize severity of illness, complexity 
of service, and resource utilization. In addition, we examined the 
procedure codes that identify multiple fusion or refusion of the 
vertebrae (codes 81.62 through 81.64) to determine if the data 
supported further refinement when a greater number of vertebrae are 
fused.
    In applying the proposed MS-DRG logic, CMS DRG 497 and 498 were 
collapsed and the result was a split with two severity levels: proposed 
MS-DRG 459 (Spinal Fusion Except Cervical with MCC) and proposed MS-DRG 
460 (Spinal Fusion Except Cervical without MCC). There were a total of 
51,667 cases in proposed MS-DRGs 459 and 460. We identified 288 cases 
where nine or more (T1-S1) vertebrae were fused (code 81.64) that we 
proposed to assign to MS-DRGs 459 and 460. The average charges and 
length of stay for cases in these MS-DRGs were closer to the average 
charges and length of stay for cases in proposed MS-DRGs 456 through 
458 (Spinal Fusion Except Cervical with Curvature of the Spine or 
Malignancy with MCC, with CC, and without CC, respectively). For 
example, in proposed MS-DRG 460, there were 238 cases with an average 
length of stay of 6.20 days and average charges of $110,908 when nine 
or more noncervical (T1-S1) vertebrae are fused. There were an 
additional 50 cases in which nine or more vertebrae were fused in 
proposed MS-DRG 459 with average charges of $171,839. Without any 
further modification to the proposed MS-DRGs, these cases would be 
assigned to proposed MS-DRGs 459 and 460 that have average charges of 
$59,698 and $99,298, respectively. However, we believe that the average 
charges for these cases ($142,871, $95,489, and $77,528, respectively) 
are more comparable to the average charges for cases in proposed MS-
DRGs 456 through 458. We believe these data support assigning cases 
where nine or more noncervical (T1-S1) vertebrae are fused from MS-DRG 
459 and 460 into MS-DRG 456 through 458. The table below represents our 
findings.

------------------------------------------------------------------------
                                                  Average
              MS-DRG                Number of    length of     Average
                                      cases         stay       charges
------------------------------------------------------------------------
MS-DRG 459 (Spinal Fusion Except         3,186        10.10      $99,298
 Cervical with MCC)--All Cases...
MS-DRG 459 (Spinal Fusion Except            50        13.00      171,839
 Cervical with MCC)--Cases with
 Procedure Code 81.64 (Fusion or
 refusion of 9 or more vertebrae)
MS-DRG 460 (Spinal Fusion Except        48,481         4.36       59,698
 Cervical without MCC)--All Cases
MS-DRG 460 (Spinal Fusion Except           238         6.20      110,908
 Cervical without MCC)--Cases
 with Procedure Code 81.64
 (Fusion or refusion of 9 or more
 vertebrae)......................
MS-DRG 456 (Spinal Fusion Except           548        14.79      142,871
 Cervical with Curvature of the
 Spine or Malignancy with MCC)--
 All Cases.......................
MS-DRG 456 (Spinal Fusion Except            61        13.34      170,655
 Cervical with Curvature of the
 Spine or Malignancy with MCC)--
 Cases with Procedure Code 81.64
 (Fusion or refusion of 9 or more
 vertebrae)......................
MS-DRG 457 (Spinal Fusion Except         1,500         8.14       95,489
 Cervical with Curvature of the
 Spine or Malignancy with CC)--
 All Cases.......................
MS-DRG 457 (Spinal Fusion Except           146         8.88      125,722
 Cervical with Curvature of the
 Spine or Malignancy with CC)--
 Cases With Procedure Code 81.64
 (Fusion or refusion of 9 or more
 vertebrae)......................
MS-DRG 458 (Spinal Fusion Except         1,340         4.58       77,528
 Cervical with Curvature of the
 Spine or Malignancy without CC)--
 All Cases.......................
MS-DRG 458 (Spinal Fusion Except            81         6.21      123,823
 Cervical with Curvature of the
 Spine or Malignancy without CC)--
 Cases with Procedure Code 81.64
 (Fusion or refusion of 9 or more
 vertebrae)......................
------------------------------------------------------------------------

    Therefore, we proposed to move those cases that include fusing or 
refusing nine or more noncervical (T1-S1) vertebrae from MS-DRGs 459 
and 460 into MS DRGs 456 though 458. This modification would include 
revising the MS-DRG title to reflect the fusion or refusion of nine or 
more noncervical (T1-S1) vertebrae. The revised titles for proposed MS-
DRGs 456 through 458 would be as follows:

[[Page 47228]]

    <bullet> MS-DRG 456 (Spinal Fusion Except Cervical with Spinal 
Curvature or Malignancy or 9+ Fusions with MCC)
    <bullet> MS-DRG 457 (Spinal Fusion Except Cervical with Spinal 
Curvature or Malignancy or 9+ Fusions with CC)
    <bullet> MS-DRG 458 (Spinal Fusion Except Cervical with Spinal 
Curvature or Malignancy or 9+ Fusions without CC/MCC)
    In the FY 2008 IPPS proposed rule, we invited public comment on 
this topic as well as on the additional changes we proposed to the 
spine MS-DRGs discussed below.
    Further analysis demonstrated that spinal fusion cases with a 
principal diagnosis of tuberculosis or osteomyelitis also have higher 
average charges than other cases in CMS DRG 497 (MS-DRGs 459 and 460 in 
this final rule with comment period) that were more similar to the 
cases assigned to CMS DRG 546 (MS-DRGs 456 through 458 in this final 
rule with comment period). Although the volume of cases is relatively 
low, the data show very high average charges for these patients. The 
following tables display our results:

------------------------------------------------------------------------
                                                  Average
             MS-DRGs                Number of    length of     Average
                                      cases         stay       charges
------------------------------------------------------------------------
MS-DRG 459 (Spinal Fusion Except         3,186        10.10      $99,298
 Cervical with MCC)..............
MS-DRG 460 (Spinal Fusion Except        48,481         4.36       59,698
 Cervical without MCC)...........
MS-DRG 456 (Spinal Fusion Except           548        14.79      142,870
 Cervical with Spinal Curvature
 or Malignancy or 9+ Fusions with
 MCC)............................
MS-DRG 457 (Spinal Fusion Except         1,500         8.14       95,489
 Cervical with Spinal Curvature
 or Malignancy or 9+ Fusions with
 CC).............................
MS-DRG 458 (Spinal Fusion Except         1,340         4.58       77,528
 Cervical with Spinal Curvature
 or Malignancy or 9+ Fusions
 without CC/MCC).................
------------------------------------------------------------------------


                     Tuberculosis and Osteomyelitis
------------------------------------------------------------------------
                                                  Average
       Principal diagnosis          Number of    length of     Average
                                      cases         stay       charges
------------------------------------------------------------------------
Codes 015.02, 015.04, 015.05,              194         24.8     $128,073
 730.08, 730.18 and 730.28.......
------------------------------------------------------------------------

    For this reason, we proposed to add the following diagnoses to the 
principal diagnosis list for MS-DRGs 456 through 458:
    <bullet> 015.02, Tuberculosis of bones and joints, vertebral 
column, bacteriological or histological examination unknown (at 
present)
    <bullet> 015.04, Tuberculosis of bones and joints, vertebral 
column, tubercle bacilli not found (in sputum) by microscopy, but found 
by bacterial culture
    <bullet> 015.05, Tuberculosis of bones and joints, vertebral 
column, tubercle bacilli not found by bacteriological examination, but 
tuberculosis confirmed histologically
    <bullet> 730.08, Acute osteomyelitis of other specified sites
    <bullet> 730.18, Chronic osteomyelitis of other specified sites
    <bullet> 730.28, Unspecified osteomyelitis of other specified 
sites.
    For the complete list of principal diagnosis codes that lead to 
assignment of CMS DRG 546 (MS-DRGs 496 through 498 in this final rule 
with comment period), we refer readers to section II.D.4.b. of the 
preamble of the FY 2007 IPPS final rule (71 FR 47947).
    Comment: One commenter expressed support of CMS' refinement of the 
DRGs for spinal procedures, and noted that it had made several 
recommendations in the past. Specifically, this commenter was pleased 
with the refinements to address multiple level procedures such as those 
in proposed MS-DRGs 456-458 (Spinal Fusion Except Cervical with Spinal 
Curvature or Malignancy or 9+ Fusions with MCC/with CC/and without CC/
MCC, respectively), as well as the proposal to add specified diagnoses 
of tuberculosis and osteomyelitis to the list of principal diagnoses 
for MS-DRGs 456-458. The commenter also supported the proposal to move 
cases involving the use of motion-preserving spine devices into the 
higher severity level of MS-DRG 490.
    This commenter suggested that MS-DRG 460 (Spinal Fusion Except 
Cervical without MCC) should include severity levels that distinguish 
with CC and without CC cases. The commenter urged CMS to create a CC 
split for this MS-DRG.
    Response: We appreciate the commenter's support for the refinements 
proposed to the spine DRGs. The data analysis conducted in developing 
the MS-DRGs did not support a CC split for proposed MS-DRG 460. As 
stated in the FY 2008 proposed rule, in order to warrant creation of a 
CC or major CC subgroup within a base MS-DRG, the subgroup had to meet 
all five criteria. We refer readers to the FY 2008 proposed rule (72 FR 
24705) and section II.D.3 of this final rule with comment period for a 
complete listing of the criteria. As stated in the proposed rule, the 
data did support a split for proposed MS-DRG 460 with two severity 
levels of with MCC and without MCC. Therefore, in this final rule with 
comment period we are implementing MS-DRG 460 as final policy.
    Comment: One manufacturer requested that CMS reassign newly created 
procedure code 84.82 (Insertion or replacement of pedicle-based dynamic 
stabilization device(s)), effective October 1, 2007, from proposed MS-
DRG 490 to MS-DRG 460. The commenter stated the surgical procedure 
requirements for code 84.82 are very similar to other procedures that 
were proposed for assignment to MS-DRG 460 as a result of the 
complexity and resources utilized. The commenter further noted that in 
the FY 2008 proposed rule (72 FR 24734) CMS reported a total of 83 
cases identified by code 84.59 (Insertion of other spinal devices) a 
predecessor code to 84.82 and it is unknown whether the cases reported 
with code 84.59 truly reflect dynamic stabilization procedures.
    Response: In developing the MS-DRGs, we conducted a comprehensive 
review of the entire group of spine DRGs and proposed a number of 
revisions to account for differences in level of severity, complexity, 
and resource utilization. We believe the proposed spinal MS-DRGs more 
appropriately classify the variety of emerging spinal technologies. In 
response to the uncertainty of correct coding and

[[Page 47229]]

accurate charge information for the reporting of pedicle-based dynamic 
stabilization devices by code 84.59, we refer the commenter to the ICD-
9-CM Coordination and Maintenance Committee Meeting's September 28-29, 
2006 and March 22-23, 2007 interim coding advice regarding these 
devices, which was to continue using code 84.59 to describe this 
technology.
    Effective October 1, 2007, new code 84.82 will be available to 
identify and describe procedures using pedicle-based dynamic 
stabilization devices more accurately. Our practice has been to assign 
a new code to the same MS-DRG as its predecessor code unless we have 
clinical information or cost data that demonstrates a different MS-DRG 
assignment is warranted. At this time, we have no information to 
suggest that ICD-9-CM code 84.82 should be reassigned from MS-DRG 490. 
As final policy for FY 2008, code 84.82 will be assigned to MS-DRG 490.
    Comment: Two commenters indicated that they supported the 
reassignment of spinal fusion cases with a principal diagnosis of 
tuberculosis or osteomyelitis to MS-DRGs 456-458 (Spinal Fusion Except 
Cervical with Spinal Curvature or Malignancy or 9+ Fusions with MCC/
with CC/and Without CC/MCC, respectively) to better recognize the 
utilization of resources involved with these cases, however they 
recommended that the MS-DRG titles be modified to reflect these 
conditions. One of the commenters suggested the following title 
modifications:
    <bullet> MS-DRG 456 (Spinal Fusion Except Cervical with Spinal 
Curvature, Malignancy, Tuberculosis, or Osteomyelitis or 9+ Fusions 
with MCC)
    <bullet> MS-DRG 457 (Spinal Fusion Except Cervical with Spinal 
Curvature, Malignancy, Tuberculosis, or Osteomyelitis or 9+ Fusions 
with CC)
    <bullet> MS-DRG 458 (Spinal Fusion Except Cervical with Spinal 
Curvature, Malignancy, Tuberculosis, or Osteomyelitis or 9+ Fusions 
without CC/MCC)
    Response: We appreciate the commenter's support of the proposal to 
reassign cases with a principal diagnosis of tuberculosis or 
osteomyelitis to MS-DRGs 456-458. We also appreciate the suggestion for 
revising the DRG titles to better classify these patients. While we 
recognize the creative approach to modifying the code titles, we must 
limit the DRG titles to 68 characters.
    We have reviewed the MS-DRG titles and are revising them as 
follows:
    <bullet> MS-DRG 456 (Spinal Fusion Except Cervical with Spinal 
Curvature or Malignancy or 9+ Fusions with MCC)
    <bullet> MS-DRG 457 (Spinal Fusion Except Cervical with Spinal 
Curvature or Malignancy or 9+ Fusions with CC)
    <bullet> MS-DRG 458 (Spinal Fusion Except Cervical with Spinal 
Curvature or Malignancy or 9+ Fusions without CC/MCC)
    Therefore, effective October 1, 2007, the new titles for MS-DRGs 
456-458 will be implemented as above.
c. Spinal Disc Devices
    Over the past several years, manufacturers of spinal disc devices 
have requested reassignment of DRGs for their products and applied for 
new technology add-on payment. CHARITE<SUP>TM</SUP> is one of these 
devices. CHARITE<SUP>TM</SUP> is a prosthetic intervertebral disc. On 
October 26, 2004, the FDA approved the CHARITE<SUP>TM</SUP> Artificial 
Disc for single level spinal arthroplasty in skeletally mature patients 
with degenerative disc disease between L4 and S1. On October 1, 2004, 
we created new procedure codes for the insertion of spinal disc 
prostheses (codes 84.60 through 84.69). We provided the CMS DRG 
assignments for these new codes in Table 6B of the FY 2005 IPPS 
proposed rule (69 FR 28673). We received comments on the FY 2005 
proposed rule recommending that we change the assignments for these 
codes from CMS DRG 499 (Back and Neck Procedures Except Spinal Fusion 
with CC) and CMS DRG 500 (Back and Neck Procedures Except Spinal Fusion 
without CC) to the CMS DRGs for spinal fusion, CMS DRG 497 (Spinal 
Fusion Except Cervical with CC) and CMS DRG 498 (Spinal Fusion Except 
Cervical without CC), for procedures on the lumbar spine and to CMS 
DRGs 519 and 520 for procedures on the cervical spine. In the FY 2005 
IPPS final rule (69 FR 48938), we indicated that CMS DRGs 497 and 498 
are limited to spinal fusion procedures. Because the surgery involving 
the CHARITE<SUP>TM</SUP> Artificial Disc is not a spinal fusion, we 
decided not to include this procedure in these CMS DRGs. However, we 
stated that we would continue to analyze this issue and solicited 
further public comments on the DRG assignment for spinal disc 
prostheses.
    In the FY 2006 final rule (70 FR 47353), we noted that, if a 
product meets all of the criteria for Medicare to pay for the product 
as a new technology under section 1886(d)(5)(K) of the Act, there is a 
clear preference expressed in the statute for us to assign the 
technology to a DRG based on similar clinical or anatomical 
characteristics or costs. However, for FY 2006, we did not find that 
the CHARITE<SUP>TM</SUP> Artificial Disc met the substantial clinical 
improvement criterion and, thus, did not qualify as a new technology. 
Consequently, we did not address the DRG classification request made 
under the authority of this provision of the Act.
    We did evaluate whether to reassign the CHARITE<SUP>TM</SUP> 
Artificial Disc to different CMS DRGs using the Secretary's authority 
under section 1886(d)(4) of the Act (70 FR 47308). We indicated that we 
did not have Medicare charge information to evaluate CMS DRG changes 
for cases involving an implant of a prosthetic intervertebral disc like 
the CHARITE<SUP>TM</SUP> and did not make a change in its CMS DRG 
assignments. We stated that we would consider whether changes to the 
CMS DRG assignments for the CHARITE<SUP>TM</SUP> Artificial Disc were 
warranted for FY 2007, once we had information from Medicare's data 
system that would assist us in evaluating the costs of these patients.
    As we discussed in the FY 2007 IPPS proposed rule (71 FR 24036), we 
received correspondence regarding the CMS DRG assignments for the 
CHARITE<SUP>TM</SUP> Artificial Disc, code 84.65 (Insertion of total 
spinal disc prosthesis, lumbosacral). The commenter had previously 
submitted an application for the CHARITE<SUP>TM</SUP> Artificial Disc 
for new technology add-on payments for FY 2006 and had requested a 
reassignment of cases involving CHARITE<SUP>TM</SUP> implantation to 
CMS DRGs 497 and 498. The commenter asked that we examine claims data 
for FY 2005 and reassign procedure code 84.65 from CMS DRGs 499 and 500 
into CMS DRGs 497 and 498. The commenter again stated the view that 
cases with the CHARITE<SUP>TM</SUP> Artificial Disc reflect comparable 
resource use and similar clinical indications as do those in CMS DRGs 
497 and 498. If CMS were to reject reassignment of the 
CHARITE<SUP>TM</SUP> Artificial Disc to CMS DRGs 497 and 498, the 
commenter suggested creating two separate DRGs for lumbar disc 
replacements.
    On February 15, 2006, we posted a proposed national coverage 
determination (NCD) on the CMS Web site seeking public comment on our 
proposed finding that the evidence is not adequate to conclude that 
lumbar artificial disc replacement with the CHARITE<SUP>TM</SUP> 
Artificial Disc is reasonable and necessary. The proposed NCD stated 
that lumbar artificial disc replacement with the CHARITE<SUP>TM</SUP> 
Artificial Disc is generally not indicated in patients over 60 years 
old. Further, it stated that there is insufficient evidence among 
either the aged or disabled Medicare population to make a

[[Page 47230]]

reasonable and necessary determination for coverage. With an NCD 
pending to make spinal arthroplasty with the CHARITE<SUP>TM</SUP> 
Artificial Disc noncovered, we indicated in the FY 2007 IPPS proposed 
rule that we did not believe it was appropriate at that time to 
reassign procedure code 84.65 from CMS DRGs 499 and 500 to CMS DRGs 497 
and 498.
    After considering the public comments and additional evidence 
received, we made a final NCD on May 16, 2006, that Medicare would not 
cover the CHARITE<SUP>TM</SUP> Artificial Disc for the Medicare 
population over 60 years of age. For Medicare beneficiaries 60 years of 
age and under, local Medicare contractors have the discretion to 
determine coverage for lumbar artificial disc replacement procedures 
involving the CHARITE<SUP>TM</SUP> Artificial Disc. The final NCD can 
be found on the CMS Web site at: http://www.cms.hhs.gov/mcd/viewncd.asp:ncd_id-150.10&ncd_version1&basket=ncd%3A150%2E10%3A1%3ALumbar+Artificial+Disc+Replacement%280ADR%29.
    We agreed with a commenter on the FY 2007 IPPS proposed rule that 
it was not appropriate to consider a DRG revision at that time for the 
CHARITE<SUP>TM</SUP> Artificial Disc, given the recent decision to 
limit coverage for surgical procedures involving this device. Although 
we had reviewed the Medicare charge data, we were concerned that there 
were a very small number of cases for patients under 60 years of age 
who had received the CHARITE<SUP>TM</SUP> Artificial Disc. We believed 
it appropriate to base the decision of a DRG change on charge data only 
on the population for which the procedure is covered. We had an 
extremely small number of cases for Medicare beneficiaries under 60 on 
which to base such a decision. For this reason, we did not believe it 
was appropriate to modify the CMS DRGs in FY 2007 for 
CHARITE<SUP>TM</SUP> cases.
    For FY 2008, we proposed to collapse CMS DRGs 499 and 500 (Back and 
Neck Procedures Except Spinal Fusion With and Without CC, respectively) 
and identified a total of 74,989 cases. Under the proposed MS-DRGs 
(which we are adopting in this final rule with comment period), the 
result of the analysis of the data supports that these CMS DRGs split 
into two severity levels: MS-DRG 490 (Back and Neck Procedures Except 
Spinal Fusion with CC or MCC) and MS-DRG 491 (Back and Neck Procedures 
Except Spinal Fusion Without CC or MCC). We found a total of 53 cases 
that used the CHARITE<SUP>TM</SUP> Artificial Disc. Without any further 
modification to the proposed MS-DRGs, average charges are $26,481 for 6 
cases with a CC or MCC and $37,324 for 47 CHARITE<SUP>TM</SUP> cases 
without a CC or MCC. (We find it counterintuitive that average charges 
for cases in the higher severity level are lower but checked our data 
and found it to be correct).
    We also analyzed data for other spinal disc devices. Average 
charges for the X Stop Interspinous Process Decompression Device (code 
84.58) are $31,400 for cases with a CC or MCC and $28,821 for cases 
without a CC or MCC. Average charges for other specified spinal devices 
described by code 84.59 (Coflex, Dynesys, M-Brace) are $34,002 for 18 
cases with a CC or MCC and $33,873 for 65 cases without a CC or MCC. We 
compared these average charges to data in the proposed spinal fusion 
MS-DRGs 453 (Combined Anterior/Posterior Spinal Fusion With MCC), 454 
(Combined Anterior/Posterior Spinal Fusion with CC), 455 (Combined 
Anterior/Posterior Spinal Fusion without CC/MCC), 459 (Spinal Fusion 
Except Cervical with MCC), and 460 (Spinal Fusion Except Cervical 
without MCC). These cases have lower average charges than the spinal 
fusion MS-DRGs. The following tables display the results:

------------------------------------------------------------------------
                                                  Average
       MS-DRGs 490 and 491          Number of    length of     Average
                                      cases         stay       charges
------------------------------------------------------------------------
MS-DRG 490--All Cases............       17,493         5.13      $29,656
MS-DRG 490--Cases with Procedure             6         3.33       26,481
 Code 84.65 (CHARITE\TM\)........
MS-DRG 491--All Cases............       57,496         2.27       17,789
MS-DRG 491--Cases with Procedure            47         2.43       37,324
 Code 84.65 (CHARITE\TM\)........
MS-DRG 491--Cases without               57,449         2.27       17,773
 Procedure Code 84.65
 (CHARITE\TM\)...................
MS-DRG 490--All Cases............       17,493         5.13       29,656
MS-DRG 490--Cases with Procedure           179         2.65       31,400
 Code 84.58 (X Stop).............
MS-DRG 490--Cases without               17,314         5.15       29,638
 Procedure Code 84.58 (X Stop)...
MS-DRG 491--All Cases............       57,496         2.27       17,789
MS-DRG 491--Cases with Procedure         1,174         1.34       28,821
 Code 84.58 (X Stop).............
MS-DRG 491--Cases without               56,322         2.29       17,559
 Procedure Code 84.58 (X-Stop)...
MS-DRG 490--All Cases............       17,493         5.13       29,656
MS-DRG 490--Cases with Procedure            18         5.56       34,002
 Code 84.59 (Coflex/Dynesys/M-
 Brace)..........................
MS-DRG 490--Cases without               17,475         5.13       29,651
 Procedure Code 84.59 (Coflex/
 Dynesys/M-Brace)................
MS-DRG 491--All Cases............       57,496         2.27       17,789
MS-DRG 491--Cases with Procedure            65         2.35       33,873
 Code 84.59 (Coflex/Dynesys/M-
 Brace)..........................
MS-DRG 491--Cases without               57,431         2.27       17,770
 Procedure Code 84.59 (Coflex/
 Dynesys/M-Brace)................
------------------------------------------------------------------------


------------------------------------------------------------------------
                                                  Average
  MS-DRGs 453, 454, 455, 459 and    Number of    length of     Average
               460                    cases         stay       charges
------------------------------------------------------------------------
MS-DRG 453--Combined Anterior/             792        15.84     $180,658
 Posterior Spinal Fusion With MCC
MS-DRG 454--Combined Anterior/           1,411         8.69      116,402
 Posterior Spinal Fusion With CC.
MS-DRG 455--Combined Anterior/           1,794         4.84       85,927
 Posterior Spinal Fusion Without
 CC/MCC..........................
MS-DRG 459--Spinal Fusion Except         3,186        10.10       99,298
 Cervical with MCC...............
MS-DRG 460--Spinal Fusion Except        48,481         4.36       59,698
 Cervical without MCC............
------------------------------------------------------------------------

    The data demonstrate that the average charges for 
CHARITE<SUP>TM</SUP> and the other devices are higher than other cases 
in proposed MS-DRGs 490 and 491 but lower than proposed MS-DRGs 453 
through 455 and 459 and 460. For this reason, we do not believe that 
any of the cases that use these spine devices should be assigned to the 
spinal fusion

[[Page 47231]]

MS-DRGs. However, we do believe that the average charges for cases 
using these spine devices are more similar to the higher severity level 
in MS-DRG 490.
    As such, in the FY 2008 IPPS proposed rule, we proposed to move 
cases with procedure codes 84.58, 84.59, and 84.65 into proposed MS-DRG 
490 and revise the title to reflect disc devices. The proposed modified 
MS-DRG title would be: MS-DRG 490 (Back and Neck Procedures Except 
Spinal Fusion with CC or MCC or Disc Devices).
    We believe these proposed changes to the spine DRGs are appropriate 
to recognize the similar utilization of resources, differences in 
levels of severity, and complexity of the services performed for 
various types of spinal procedures described above. We encouraged 
commenters to provide input on this approach to better recognize the 
types of patients these procedures are being performed upon and their 
outcomes.
    Comment: Several commenters supported our proposal to recognize 
utilization of resources, differences in levels of severity, and the 
complexity of spinal procedures in proposed MS-DRGs 490 and 491. The 
commenters were pleased with the proposal to reassign cases identified 
by procedure codes 84.58 \24\, 84.59 and 84.65 to proposed MS-DRG 490 
(Back and Neck Procedures Except Spinal Fusion with CC or MCC or Disc 
Devices). One commenter stated that the proposed refinements to MS-DRG 
490 result in Medicare payment that better recognizes patient 
conditions and procedural complexity. Another commenter believed that 
the proposals will provide more appropriate payment and ensure patient 
access to spine technologies. This commenter commended CMS for its 
responsiveness in considering resource use associated with new 
technologies, such as spine motion preservation devices, and stated the 
proposal to assign higher payment rates will enable hospitals to 
provide Medicare patients with access to these technologies.
---------------------------------------------------------------------------

    \24\ Effective October 1, 2007, procedure code 84.58 
(Implantation of interspinous process decompression device) has been 
deleted and replaced by new procedure code 84.80 (Insertion or 
replacement of interspinous process device(s)).
---------------------------------------------------------------------------

    Two commenters suggested CMS also consider moving cases with 
procedure code 84.62 (Insertion of total spinal disc prosthesis, 
cervical) into MS-DRG 490. The commenters stated that this procedure is 
clinically coherent with the other cases proposed for reassignment to 
this DRG. Many commenters also recommended that CMS continue analyzing 
claims data in the future to ensure appropriate DRG assignment for all 
spinal related procedures.
    Response: We greatly appreciate the commenters' support of our 
proposal. We analyzed data for procedure code 84.62 and found 23 cases 
with an average length of stay of 1.48 days and average charges of 
$30,114 in MS-DRG 491. We also identified 4 cases in MS-DRG 490 with an 
average length of stay of 10.5 days and average charges of $104,313. 
The table below displays our results.

------------------------------------------------------------------------
                                                  Average
              MS-DRG                Number of    length of     Average
                                      cases         stay       charges
------------------------------------------------------------------------
MS-DRG 490--All cases............       17,493         5.13      $29,655
MS-DRG 490--Cases with code 84.62            4        10.50      104,313
MS-DRG 490--Cases without code          17,484         5.13       29,633
 84.62...........................
MS-DRG 491--All cases............       57,496         2.27       17,788
MS-DRG 491--Cases with code 84.62           23         1.48       30,114
MS-DRG 491--Cases without code          57,470         2.27       17,783
 84.62...........................
------------------------------------------------------------------------

    We agree that cases with procedure code 84.62 appear to require 
greater utilization of resources than other cases in MS-DRG 491 and 
they are clinically similar to other spine disc prostheses cases we are 
assigning to MS-DRG 490. Therefore, in this FY 2008 final rule, we are 
moving cases identified by procedure code 84.62 from MS-DRG 491 to MS-
DRG 490.
    Comment: One commenter urged CMS to reconsider the placement of 
procedure code 84.65 (Insertion of total spinal disc prosthesis, 
lumbosacral) into MS-DRG 490. The commenter indicated this code 
represents technology that is a significant alternative to spinal 
fusion for a number of patients diagnosed with degenerative disc 
disease. The commenter noted that a total disc replacement is different 
from the other procedures included in MS-DRG 490 and is more complex. 
For example, excision of an intervertebral disc (code 80.51) represents 
only one component of a total disc replacement surgery; however, both 
procedures are assigned to the same DRG and receive the same payment. 
The commenter further noted that other procedures included in MS-DRG 
490 do not involve the removal of a disc and including all of these 
procedures together is not an accurate reflection of clinical 
coherence.
    According to the commenter, a variety of new artificial discs are 
leading to improvements in the area of total disc replacement 
procedures, including the ProDisc-L\TM\ Total Disc Arthroplasty. In 
addition, the commenter stated, ``appropriate Medicare payment is 
essential to ensure access to this alternative treatment and the 
diffusion of an innovative new technology.'' The commenter believed 
that the most appropriate MS-DRG assignment for code 84.65 is MS-DRG 
460 (Spinal Fusion Except Cervical without MCC) and requested that CMS 
reassign procedure code 84.65 to MS-DRG 460 and modify the title to 
``Spinal Fusion Except Cervical without MCC and Artificial Disc 
Replacement.''
    Response: We disagree with the commenter that cases identified by 
procedure code 84.65 should be reassigned to MS-DRG 460 with a revised 
title. We provided the analysis in the FY 2008 IPPS proposed rule that 
demonstrated the average charges for code 84.65 were substantially 
lower than the average charges for the spinal fusion MS-DRGs but higher 
than the average charges for other cases in proposed MS-DRGs 490 and 
491. As a result, we proposed to move cases identified by procedure 
code 84.65 into the higher severity level and modify the proposed title 
to reflect disc devices. We agree with the above statement, 
``appropriate Medicare payment is essential to ensure access to this 
alternative treatment and the diffusion of an innovative new 
technology'' made by the commenter. The charge data do not support 
moving cases with procedure code 84.65 into the spinal fusion DRGs at 
this time. As a result, effective October 1, 2007, cases

[[Page 47232]]

identified by procedure code 84.65 will remain assigned to MS-DRG 490 
(Back and Neck Procedures Except Spinal Fusion with CC or MCC or Disc 
Devices) with the modified title as proposed.
d. Other Spinal DRGs
    We did not identify any data to support moving cases in or out of 
CMS DRGs 496 (Combined Anterior/Posterior Spinal Fusion), 519 (Cervical 
Spinal Fusion with CC), or 520 (Cervical Spinal Fusion without CC)). 
Under the proposed MS-DRG system, we proposed to split CMS DRG 496 into 
three severity levels: MS-DRG 453 (Combined Anterior/Posterior Spinal 
Fusion with MCC), MS-DRG 454 (Combined Anterior/Posterior Spinal Fusion 
with CC), and proposed MS-DRG 455 (Combined Anterior/Posterior Spinal 
Fusion without CC). We also proposed to split CMS DRG 519 into three 
severity levels: MS-DRG 471 (Cervical Fusion with MCC), MS-DRG 472 
(Cervical Fusion with CC), and MS-DRG 473 (Cervical Fusion without CC). 
In the FY 2008 IPPS proposed rule, we did not propose changes to these 
DRGs.
    We did not receive any public comments on the above proposals to 
refine the remaining spinal DRGs. Therefore, in this final rule with 
comment period, we are adopting as final MS-DRGs 453, 454, 455, 471, 
472, and 473.
5. MDC 17 (Myeloproliferative Diseases and Disorders, Poorly 
Differentiated Neoplasm): Endoscopic Procedures
    Between last year's final rule and this year's proposed rule, we 
received a request from a manufacturer to review the DRG assignment of 
codes 33.71 (Endoscopic insertion or replacement of bronchial 
valve(s)), 33.78 (Endoscopic removal of bronchial device(s) or 
substances), and 33.79 (Endoscopic insertion of other bronchial device 
or substances) with the intent of moving these three codes out of CMS 
DRG 412 (History of Malignancy With Endoscopy) (MS-DRGs 843, 844, and 
845 in this final rule with comment period). The requestor noted that 
CMS DRG 412 is titled to be a DRG for cases with a history of 
malignancy, and none of the three codes (33.71, 33.78, or 33.79) 
necessarily involve treatment for malignancies. In addition, the 
requestor believed the integrity of the DRG is compromised because the 
other endoscopy codes assigned to CMS DRG 412 are all diagnostic in 
nature, while codes 33.71, 33.78, and 33.79 represent therapeutic 
procedures.
    The requestor also stated that while the diagnostic endoscopies in 
CMS DRG 412 do not have significant costs for equipment or 
pharmaceutical agents beyond the basic endoscopy, the therapeutic 
procedures described by codes 33.71, 33.78, and 33.79 involve 
substantial costs for devices or substances in relation to the cost of 
the endoscopic procedure itself. The requestor was concerned that, if 
these three codes continue to be assigned to CMS DRG 412, payment will 
be so inadequate as to constitute a substantial barrier to Medicare 
beneficiaries for these treatments.
    ICD-9-CM procedure codes 33.71, 33.78, and 33.79 were all created 
for use beginning October 1, 2006. In the proposed rule, we stated that 
these codes have been in use only for a few months, and we had no data 
to make a different DRG assignment. We assigned these codes based on 
the advice of our medical officers to a DRG that included similar 
clinical procedures.
    On the matter of codes 33.71, 33.78, and 33.79 being therapeutic in 
nature while all other endoscopies assigned to CMS DRG 412 are 
diagnostic, we disagreed with the commenter in the proposed rule. CMS 
DRG 412 includes procedure codes for therapeutic endoscopic destruction 
of lesions of the bronchus, lung, stomach, anus, and duodenum, as well 
as codes for polypectomy of the intestine and rectum. In addition, we 
note that there are codes for insertion of therapeutic devices 
currently located in this DRG.
    In the proposed rule, we stated that it would be premature to 
assign these codes to another DRG without any supporting data. We 
indicated that we would reconsider our decision for these codes if we 
had data suggesting that a DRG reassignment was warranted. Therefore, 
aside from the proposed changes to the MS-DRGs, in the FY 2008 IPPS 
proposed rule, we did not propose to change the current DRG assignment 
for codes 33.71, 33.78, and 33.79.
    Comment: We did not receive any specific comments addressing the 
published proposal. We did receive comments asking CMS to use external 
data to make DRG assignments until Medicare data are available.
    Response: We reiterate that the new codes under discussion were 
created for use beginning October 1, 2006. Commenters did not provide 
any external data for us to evaluate. We have no data that would 
support a different DRG assignment for these codes. Therefore, codes 
33.71 (Endoscopic insertion or replacement of bronchial valve(s)), 
33.78 (Endoscopic removal of bronchial device(s) or substances), and 
33.79 (Endoscopic insertion of other bronchial device or substances) 
will remain assigned to MS-DRGs 843, 844, and 845 (Other 
Myeloproliferative Disease or Poorly Differentiated Neoplasm Diagnosis 
w/MCC, w/CC or w/o CC/MCC respectively) until we have data that suggest 
a different DRG assignment would be warranted.
6. Medicare Code Editor (MCE) Changes
    As explained under section II.B.1. of the preamble of this final 
rule with comment period, the Medicare Code Editor (MCE) is a software 
program that detects and reports errors in the coding of Medicare 
claims data. Patient diagnoses, procedure(s), and demographic 
information are entered into the Medicare claims processing systems and 
are subjected to a series of automated screens. The MCE screens are 
designed to identify cases that require further review before 
classification into a DRG. For FY 2008, we proposed to make the 
following changes to the MCE edits.
a. Non-Covered Procedure Edit: Code 00.62 (Percutaneous angioplasty or 
atherectomy of intracranial vessel(s))
    As discussed in II.G.2. of the preamble of this final rule with 
comment period, under MDC 1, code 00.62 is a covered service when 
performed in conjunction with code 00.65 (Percutaneous insertion of 
intracranial vascular stent(s)). Effective November 6, 2006, Medicare 
covers PTA and stenting of intracranial arteries for the treatment of 
cerebral artery stenosis in cases in which stenosis is 50 percent or 
greater in patients with intracranial atherosclerotic disease when 
furnished in accordance with the FDA-approved protocols governing 
Category B Investigational Device Exemption (IDE) clinical trials. CMS 
determined that coverage of intracranial PTA and stenting is reasonable 
and necessary under these circumstances. Therefore, we proposed to make 
a conforming change and to add the following language to this edit: 
Procedure code 00.62 (PTA of intracranial vessel(s)) is identified as a 
noncovered procedure except when it is accompanied by procedure code 
00.65 (Intracranial stent).
    We did not receive any public comments on this proposal. Therefore, 
for FY 2008, we are adopting as final our proposed revision of the 
coverage edit, recognizing procedure code 00.62 (Percutaneous 
angioplasty or atherectomy of intracranial vessel(s)) as a covered 
procedure when reported in conjunction with procedure code 00.65 
(Intracranial stent).

[[Page 47233]]

b. Non-Specific Principal Diagnosis Edit 7 and Non-Specific O.R. 
Procedures Edit 10
    When MCE Non-Specific Principal Diagnosis Edit 7 and Non-Specific 
O.R. Procedures Edit 10 were created at the beginning of the IPPS, it 
was with the intent that they were to encourage hospitals to code as 
specifically as possible. While the codes on both edits are valid 
according to the ICD-9-CM coding scheme, more precise codes are 
preferable to give a more complete understanding of the services 
provided on the Medicare claims. When the MCE was created, we had 
intended that these specific edits would allow educational contact 
between the provider and the contractor. It was never the intention 
that these edits would be used to deny/reject or return-to-provider 
those claims submitted with non-specific codes. However, we found these 
two edits to be misunderstood, and found that claims were erroneously 
being denied, rejected, or returned. On November 11, 2006, CMS issued a 
Joint Signature Memorandum that instructed all fiscal intermediaries 
and all Part A and Part B Medicare Administrative Contractors (A/B 
MACs) to deactivate the Fiscal Intermediary Shared System Edits W1436 
through W1439 and W1489 through W1491 which edited for Non-Specific 
Diagnoses and the Non-Specific Procedures.
    Therefore, in the FY 2008 IPPS proposed rule, we proposed to make a 
conforming change to the MCE by removing the following codes from Edit 
7:
00320
01590
01591
01592
01593
01594
01596
0369
0399
0528
05310
0538
05440
0548
0558
05600
0568
06640
07070
07071
0728
0738
07420
08240
0979
09810
09830
09950
0999
1009
1109
1129
1149
1279
129
1309
13100
1319
1329
1369
1370
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1372
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138
1390
1391
1398
1409
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1579
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1749
1769
179
1809
1839
1874
1879
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1899
1909
1929
1949
1969
1991
20490
20491
20590
20591
20690
20691
20890
20891
2129
2139
2149
2159
2169
2189
2199
2229
2239
2249
2259
2279
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2299
2306
2319
2329
2349
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2399
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2519
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3239
3249
326
32700
32710
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3309
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[[Page 47234]]

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[[Page 47235]]

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7799
78031
78051
78052
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78054
78055
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78058
78079
7825
78261
78262
78340
78830
78900
78930
78940
78960
79009
7901
7904
7905
7906
79091
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7929
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79500
7954
7964
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7993
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7999
8290
8291
8398
8399
8409
8419
8439
8469
8479
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8678
8679
86800
86810
9009
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9029
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9048
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9050
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9060
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94300
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94400
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94403
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94405
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94500
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94502
94503
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94505
94506
94509
9460
9479
9490
9491
9492
9493
9494
9495
9519
9529
9539
9549
9559
9569
9579
95890
9599
9609
9639
9649
9659
9679
9699
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9739
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[[Page 47238]]

9989

    In addition, we proposed to make a conforming change to the MCE by 
removing the following codes from Edit 10:

0650
0700
3500
3510
3520
3550
3560
3570
3610
3710
3770
3800
3810
3830
3840
3850
3860
3880
4040
4050
4100
4210
4240
4400
4440
4500
4590
0763
0769
4610
4620
4640
4650
4660
4680
5300
5310
5640
7550
7670
7700
7720
7760
7770
7780
7790
7800
7810
7820
7830
7840
7850
7870
7880
7890
0780
2630
7910
7920
7930
7940
7950
7960
7980
7990
8000
8010
8020
8040
8070
8080
8090
8100
8120
8130
8153
8155
8400
8440
8460
8469
8660
8670

    Comment: Several commenters commended CMS for simplifying what they 
considered to be a burdensome edit that has ceased to serve its 
intended purpose.
    Response: We appreciate the commenters' support for the removal of 
the specified codes from Edit 7 and Edit 10.
    Comment: One commenter pointed out that code 015.95 (Tuberculosis 
of unspecified bones and joints, tubercle bacilli not found by 
bacteriological examination, but tuberculosis confirmed histologically) 
was included on the list of nonspecific principal diagnoses in the MCE, 
but was not included in the list of codes to be deleted in the proposed 
rule.
    Response: The commenter is correct; code 015.95 should have been 
included in the list of codes to be deleted from Edit 7. We have 
modified the list to include deletion of this code as part of the 
deletion of the edit in the MCE software.
    After consideration of the public comments received, in this final 
rule with comment period, we are finalizing our deletion of the 
specified listed codes in Edit 7 (Non-Specific Principal Diagnosis) 
(including code 015.95) and in Edit 10 (Non-Specific O.R. Procedures) 
of the MCE.
c. Limited Coverage Edit 17
    Edit 17 in the MCE contains ICD-9-CM procedure codes describing 
medically complex procedures, including lung volume reduction surgery, 
organ transplants, and implantable heart assist devices which are to be 
performed only in certain pre-approved medical centers. CMS has 
established, through regulation (CMS-3835-F: Medicare Conditions of 
Participation: Requirements for Approval and Reapproval of Transplant 
Centers to Perform Organ Transplants, published in the Federal Register 
on March 30, 2007 (72 FR 15198)), a survey and certification process 
for organ transplant programs. The organs covered in this transplant 
regulation are heart, heart and lung combined, intestine, kidney, 
liver, lung, pancreas, and multivisceral. Historically, kidney 
transplants have been regulated under the End-Stage Renal Disease 
(ESRD) conditions for coverage. Other types of organ transplant 
facilities have been regulated under various NCDs.
    The regulation becomes effective on June 28, 2007. Organ transplant 
programs will have 180 days from the June 28, 2007 effective date of 
the regulation to apply for participation in the Medicare program under 
the new survey and certification process. After these programs apply, 
we will survey and approve programs that meet the new Medicare 
conditions of participation. Until transplant facilities are surveyed 
and approved, kidney transplant facilities will continue to be 
regulated under the ESRD conditions for coverage, and other types of 
organ transplant facilities will continue to be regulated under the 
NCDs.
    In the FY 2008 IPPS proposed rule, we proposed to add conforming 
Medicare Part A payment edits to the MCE, consistent with the 
requirements of the organ transplant regulation (CMS-3835-F), to ensure 
that Medicare covers only those organ transplants performed in Medicare 
approved facilities. We proposed to add the following procedure codes 
to the existing list of limited coverage procedures under Edit 17:
    <bullet> 55.69, Other kidney transplantation
    <bullet> 52.80, Pancreatic transplant, not otherwise specified
    <bullet> 52.82, Homotransplant of pancreas
    We did not receive any public comments on this portion of the 
proposed MCE revisions. Therefore, we will implement the changes as 
stated above by adding procedure codes 55.69, 52.80, and 52.82 to the 
list of limited coverage procedures in the MCE.
d. Revision to Part 1, Pancreas Transplant Edit A
    Effective for services performed on or after April 26, 2006, we 
published an NCD for Pancreas Transplants in section 260.3 of the 
Coverage Manual, stating that pancreas alone transplants are reasonable 
and necessary for Medicare beneficiaries in facilities that are 
Medicare-approved for kidney transplantation. In addition, patients 
must have a diagnosis of Type I diabetes mellitus. The complete NCD can 
be found at the following CMS Web site: http://www.cms.hhs.gov/mcd/ 
viewncd

[[Page 47239]]

.asp?ncd--id=260.3&ncd--version= 
3&basket=ncd%3A260%2E3%3A3%3APancreas+Transplants.
    Edit A in the MCE currently includes the following language and 
codes.
    Procedure codes 52.80 (Pancreatic transplant, not otherwise 
specified) and 52.82 (Homotransplant of pancreas) are identified as 
non-covered procedures except for the following two conditions:
    When either 52.80 or 52.82 are combined with the procedure code in 
Procedure list 2 and there is at least one principal or secondary 
diagnosis code present from both Diagnosis List 1 and Diagnosis List 2.

Procedure List 1:
    Code 52.80
    Code 52.82
Procedure List 2: 
    Code 55.69
Diagnosis List 1:
    Codes 250.00 through 250.93

Diagnosis List 2:
    Code 403.01
    Code 403.11
    Code 403.91
    Code 404.02
    Code 404.03
    Code 404.12
    Code 404.13
    Code 404.92
    Code 404.93
    Codes 585.1 through 585.6
    Code 585.9
    Code V42.0
    Code V43.89''

    This technical correction was not included in the FY 2008 IPPS 
proposed rule because of the timing of the release of the NCD. However, 
we need to make a revision to Edit A in the MCE to conform to the 
changes in our national coverage of the pancreas alone (PA) procedure. 
This NCD was implemented on July 3, 2006, which prevented us from 
addressing the MCE edit in the FY 2007 IPPS final rule. However, 
because the MCE changes for FY 2007 are retroactive to April 26, 2006, 
both procedure codes 52.80 and 52.82 will still trigger a limited 
coverage edit when coverage criteria have been met. Therefore, we are 
removing Edit A in its entirety from the MCE.
7. Surgical Hierarchies
    Some inpatient stays entail multiple surgical procedures, each one 
of which, occurring by itself, could result in assignment of the case 
to a different DRG within the MDC to which the principal diagnosis is 
assigned. Therefore, it is necessary to have a decision rule within the 
GROUPER by which these cases are assigned to a single DRG. The surgical 
hierarchy, an ordering of surgical classes from most resource intensive 
to least resource intensive, performs that function. Application of 
this hierarchy ensures that cases involving multiple surgical 
procedures are assigned to the DRG associated with the most resource 
intensive surgical class.
    Because the relative resource intensity of surgical classes can 
shift as a function of DRG reclassification and recalibrations, we 
reviewed the surgical hierarchy of each MDC, as we have for previous 
reclassifications and recalibrations, to determine if the ordering of 
classes coincides with the intensity of resource utilization.
    A surgical class can be composed of one or more DRGs. For example, 
in MDC 11, the surgical class ``kidney transplant'' consists of a 
single DRG (DRG 302) and the class ``kidney, ureter and major bladder 
procedures'' consists of three DRGs (DRGs 303, 304, and 305). 
Consequently, in many cases, the surgical hierarchy has an impact on 
more than one DRG. The methodology for determining the most resource 
intensive surgical class involves weighting the average resources for 
each DRG by frequency to determine the weighted average resources for 
each surgical class. For example, assume surgical class A includes DRGs 
1 and 2 and surgical class B includes DRGs 3, 4, and 5. Assume also 
that the average charge of DRG 1 is higher than that of DRG 3, but the 
average charges of DRGs 4 and 5 are higher than the average charge of 
DRG 2. To determine whether surgical class A should be higher or lower 
than surgical class B in the surgical hierarchy, we would weight the 
average charge of each DRG in the class by frequency (that is, by the 
number of cases in the DRG) to determine average resource consumption 
for the surgical class. The surgical classes would then be ordered from 
the class with the highest average resource utilization to that with 
the lowest, with the exception of ``other O.R. procedures'' as 
discussed below.
    This methodology may occasionally result in assignment of a case 
involving multiple procedures to the lower weighted DRG (in the 
highest, most resource intensive surgical class) of the available 
alternatives. However, given that the logic underlying the surgical 
hierarchy provides that the GROUPER search for the procedure in the 
most resource intensive surgical class, in cases involving multiple 
procedures, this result is sometimes unavoidable.
    We note that, notwithstanding the foregoing discussion, there are a 
few instances when a surgical class with a lower average charge is 
ordered above a surgical class with a higher average charge. For 
example, the ``other O.R. procedures'' surgical class is uniformly 
ordered last in the surgical hierarchy of each MDC in which it occurs, 
regardless of the fact that the average charge for the DRG or DRGs in 
that surgical class may be higher than that for other surgical classes 
in the MDC. The ``other O.R. procedures'' class is a group of 
procedures that are only infrequently related to the diagnoses in the 
MDC, but are still occasionally performed on patients in the MDC with 
these diagnoses. Therefore, assignment to these surgical classes should 
only occur if no other surgical class more closely related to the 
diagnoses in the MDC is appropriate.
    A second example occurs when the difference between the average 
charges for two surgical classes is very small. We have found that 
small differences generally do not warrant reordering of the hierarchy 
because, as a result of reassigning cases on the basis of the hierarchy 
change, the average charges are likely to shift such that the higher 
ordered surgical class has a lower average charge than the class 
ordered below it.
    For FY 2008, we did not propose any revisions of the surgical 
hierarchy for any MDC. In general, the MS DRGs that we proposed (and 
are adopting in this final rule with comment period) for use in FY 2008 
and discussed in section II.D. of the preamble of this final rule with 
comment period follow the same hierarchical order as the CMS DRGs they 
are replacing, except for DRGs that were deleted and consolidated.
    Comment: Two commenters supported no changes in the surgical 
hierarchy for FY 2008. However, one commenter stated that CMS should 
continue to revisit this issue on an annual basis.
    Response: We will continue to conduct annual analysis of the 
surgical hierarchy in the MS-DRGs as we have with the CMS-DRGs and 
propose revisions when necessary. For FY 2008, there will no changes to 
the surgical hierarchy.
8. CC Exclusions List
a. Background
    As indicated earlier in the preamble of this final rule with 
comment period, under the IPPS DRG classification system, we have 
developed a standard list of diagnoses that are considered CCs. 
Historically, we developed this list using physician panels that 
classified each diagnosis code based on whether the diagnosis, when 
present as a secondary condition, would be considered a substantial 
complication or

[[Page 47240]]

comorbidity. A substantial complication or comorbidity was defined as a 
condition that, because of its presence with a specific principal 
diagnosis, would cause an increase in the length of stay by at least 1 
day in at least 75 percent of the patients. We refer readers to section 
II.D.2. and 3. of the preamble of this final rule with comment period 
for a discussion of the refinement of CCs in relation to the MS-DRGs we 
proposed and are adopting in this final rule with comment period for FY 
2008.
b. CC Exclusions List for FY 2008
    In the September 1, 1987 final notice (52 FR 33143) concerning 
changes to the DRG classification system, we modified the GROUPER logic 
so that certain diagnoses included on the standard list of CCs would 
not be considered valid CCs in combination with a particular principal 
diagnosis. We created the CC Exclusions List for the following reasons: 
(1) to preclude coding of CCs for closely related conditions; (2) to 
preclude duplicative or inconsistent coding from being treated as CCs; 
and (3) to ensure that cases are appropriately classified between the 
complicated and uncomplicated DRGs in a pair. As we indicated above, we 
developed a list of diagnoses, using physician panels, to include those 
diagnoses that, when present as a secondary condition, would be 
considered a substantial complication or comorbidity. In previous 
years, we have made changes to the list of CCs, either by adding new 
CCs or deleting CCs already on the list.
    In the May 19, 1987 proposed notice (52 FR 18877) and the September 
1, 1987 final notice (52 FR 33154), we explained that the excluded 
secondary diagnoses were established using the following five 
principles:
    <bullet> Chronic and acute manifestations of the same condition 
should not be considered CCs for one another.
    <bullet> Specific and nonspecific (that is, not otherwise specified 
(NOS)) diagnosis codes for the same condition should not be considered 
CCs for one another.
    <bullet> Codes for the same condition that cannot coexist, such as 
partial/total, unilateral/bilateral, obstructed/unobstructed, and 
benign/malignant, should not be considered CCs for one another.
    <bullet> Codes for the same condition in anatomically proximal 
sites should not be considered CCs for one another.
    <bullet> Closely related conditions should not be considered CCs 
for one another.
    The creation of the CC Exclusions List was a major project 
involving hundreds of codes. We have continued to review the remaining 
CCs to identify additional exclusions and to remove diagnoses from the 
master list that have been shown not to meet the definition of a 
CC.\25\
---------------------------------------------------------------------------

    \25\ See the FY 1989 final rule (53 FR 38485, September 30, 
1988), for the revision made for the discharges occurring in FY 
1989; the FY 1990 final rule (54 FR 36552, September 1, 1989), for 
the FY 1990 revision; the FY 1991 final rule (55 FR 36126, September 
4, 1990), for the FY 1991 revision; the FY 1992 final rule (56 FR 
43209, August 30, 1991) for the FY 1992 revision; the FY 1993 final 
rule (57 FR 39753, September 1, 1992), for the FY 1993 revision; the 
FY 1994 final rule (58 FR 46278, September 1, 1993), for the FY 1994 
revisions; the FY 1995 final rule (59 FR 45334, September 1, 1994), 
for the FY 1995 revisions; the FY 1996 final rule (60 FR 45782, 
September 1, 1995), for the FY 1996 revisions; the FY 1997 final 
rule (61 FR 46171, August 30, 1996), for the FY 1997 revisions; the 
FY 1998 final rule (62 FR 45966, August 29, 1997) for the FY 1998 
revisions; the FY 1999 final rule (63 FR 40954, July 31, 1998), for 
the FY 1999 revisions; the FY 2001 final rule (65 FR 47064, August 
1, 2000), for the FY 2001 revisions; the FY 2002 final rule (66 FR 
39851, August 1, 2001), for the FY 2002 revisions; the FY 2003 final 
rule (67 FR 49998, August 1, 2002), for the FY 2003 revisions; the 
FY 2004 final rule (68 FR 45364, August 1, 2003), for the FY 2004 
revisions; the FY 2005 final rule (69 FR 49848, August 11, 2004), 
for the FY 2005 revisions; the FY 2006 final rule (70 FR 47640, 
August 12, 2005), for the FY 2006 revisions; and the FY 2007 final 
rule (71 FR 47870) for the FY 2007 revisions. In the FY 2000 final 
rule (64 FR 41490, July 30, 1999, we did not modify the CC 
Exclusions List because we did not make any changes to the ICD-9-CM 
codes for FY 2000.
---------------------------------------------------------------------------

    For FY 2008, as we proposed, we are making limited revisions to the 
CC Exclusions List to take into account the changes that will be made 
in the ICD-9-CM diagnosis coding system effective October 1, 2007. (See 
section II.G.10. of the preamble of this final rule with comment period 
for a discussion of ICD-9-CM changes.) We are making these changes in 
accordance with the principles established when we created the CC 
Exclusions List in 1987. In addition, as discussed in section II.D.3. 
of the preamble of this final rule with comment period, we are 
indicating on the CC exclusion list some updates to reflect the 
exclusion of a few codes from being an MCC under the MS-DRG system that 
we are adopting for FY 2008.
    Tables 6G and 6H, Additions to and Deletions from the CC Exclusion 
List, respectively, which are included in the Addendum to this final 
rule with comment period, will be effective for discharges occurring on 
or after October 1, 2007. Each of these principal diagnoses for which 
there is a CC exclusion is shown with an asterisk, and the conditions 
that will not count as a CC are provided in an indented column 
immediately following the affected principal diagnosis.
    A complete updated MCC, CC, and Non-CC Exclusions List is available 
through the Internet on the CMS Web site at: http:/www.cms.hhs.gov/
AcuteInpatientPPS. Beginning with discharges on or after October 1, 
2007, the indented diagnoses will not be recognized by the GROUPER as 
valid CCs for the asterisked principal diagnosis.
    Alternatively, the complete documentation of the GROUPER logic, 
including the current CC Exclusions List, is available from 3M/Health 
Information Systems (HIS), which, under contract with CMS, is 
responsible for updating and maintaining the GROUPER program. The 
current DRG Definitions Manual, Version 24.0, is available for $225.00, 
which includes $15.00 for shipping and handling. Version 25.0 of this 
manual, which will include the final FY 2008 DRG changes, will be 
available in hard copy for $250.00. Version 25.0 of the manual is also 
available on a CD for $200.00; a combination hard copy and CD is 
available for $400.00. These manuals may be obtained by writing 3M/HIS 
at the following address: 100 Barnes Road, Wallingford, CT 06492; or by 
calling (203) 949-0303. Please specify the revision or revisions 
requested.
9. Review of Procedure Codes in CMS DRGs 468, 476, and 477
    Each year, we review cases assigned to CMS DRG 468 (Extensive O.R. 
Procedure Unrelated to Principal Diagnosis), CMS DRG 476 (Prostatic 
O.R. Procedure Unrelated to Principal Diagnosis), and CMS DRG 477 
(Nonextensive O.R. Procedure Unrelated to Principal Diagnosis) to 
determine whether it would be appropriate to change the procedures 
assigned among these CMS DRGs. Under the MS-DRGs that we are adopting 
for FY 2008, discussed in section II.D. of the preamble of this final 
rule with comment period, CMS DRG 468 has a three-way split and becomes 
MS-DRGs 981, 982, and 983 (Extensive O.R. Procedure Unrelated to 
Principal Diagnosis with MCC, with CC, and without CC/MCC). CMS DRG 476 
becomes proposed MS-DRGs 984, 985, and 986 (Prostatic O.R. Procedure 
Unrelated to Principal Diagnosis with MCC, with CC, and without CC/
MCC). CMS DRG 477 becomes MS-DRGs 987, 988, and 989 (Nonextensive O.R. 
Procedure Unrelated to Principal Diagnosis with MCC, with CC, and 
without CC/MCC).
    MS-DRGs 981 through 983, 984 through 986, and 987 through 989 
(formerly CMS DRGs 468, 476, and 477, respectively) are reserved for 
those cases in which none of the O.R. procedures performed are related 
to the principal diagnosis. These CMS DRGs are

[[Page 47241]]

intended to capture atypical cases, that is, those cases not occurring 
with sufficient frequency to represent a distinct, recognizable 
clinical group. MS-DRGs 984 through 986 (previously CMS DRG 476) are 
assigned to those discharges in which one or more of the following 
prostatic procedures are performed and are unrelated to the principal 
diagnosis:
    <bullet> 60.0, Incision of prostate.
    <bullet> 60.12, Open biopsy of prostate.
    <bullet> 60.15, Biopsy of periprostatic tissue.
    <bullet> 60.18, Other diagnostic procedures on prostate and 
periprostatic tissue.
    <bullet> 60.21, Transurethral prostatectomy.
    <bullet> 60.29, Other transurethral prostatectomy.
    <bullet> 60.61, Local excision of lesion of prostate.
    <bullet> 60.69, Prostatectomy, not elsewhere classified.
    <bullet> 60.81, Incision of periprostatic tissue.
    <bullet> 60.82, Excision of periprostatic tissue.
    <bullet> 60.93, Repair of prostate.
    <bullet> 60.94, Control of (postoperative) hemorrhage of prostate.
    <bullet> 60.95, Transurethral balloon dilation of the prostatic 
urethra.
    <bullet> 60.96, Transurethral destruction of prostate tissue by 
microwave thermotherapy.
    <bullet> 60.97, Other transurethral destruction of prostate tissue 
by other thermotherapy.
    <bullet> 60.99, Other operations on prostate.
    All remaining O.R. procedures are assigned to MS-DRGs 981 through 
983 and 987 through 989 (previously CMS DRGs 468 and 477), with MS-DRGs 
987 through 989 (previously CMS DRG 477) assigned to those discharges 
in which the only procedures performed are nonextensive procedures that 
are unrelated to the principal diagnosis.\26\
---------------------------------------------------------------------------

    \26\ The original list of the ICD-9-CM procedure codes for the 
procedures we consider nonextensive procedures, if performed with an 
unrelated principal diagnosis, was published in Table 6C in section 
IV. of the Addendum to the FY 1989 final rule (53 FR 38591). As part 
of the FY 1991 final rule (55 FR 36135), the FY 1992 final rule (56 
FR 43212), the FY 1993 final rule (57 FR 23625), the FY 1994 final 
rule (58 FR 46279), the FY 1995 final rule (59 FR 45336), the FY 
1996 final rule (60 FR 45783), the FY 1997 final rule (61 FR 46173), 
and the FY 1998 final rule (62 FR 45981), we moved several other 
procedures from DRG 468 to DRG 477, and some procedures from DRG 477 
to DRG 468. No procedures were moved in FY 1999, as noted in the 
final rule (63 FR 40962); in FY 2000 (64 FR 41496); in FY 2001 (65 
FR 47064); or in FY 2002 (66 FR 39852). In the FY 2003 final rule 
(67 FR 49999) we did not move any procedures from DRG 477. However, 
we did move procedure codes from DRG 468 and placed them in more 
clinically coherent DRGs. In the FY 2004 final rule (68 FR 45365), 
we moved several procedures from DRG 468 to DRGs 476 and 477 because 
the procedures are nonextensive. In the FY 2005 final rule (69 FR 
48950), we moved one procedure from DRG 468 to 477. In addition, we 
added several existing procedures to DRGs 476 and 477. In the FY 
2006 (70 FR 47317), we moved one procedure from DRG 468 and assigned 
it to DRG 477. In FY 2007, we moved one procedure from DRG 468 and 
assigned it to DRGs 479, 553, and 554.
---------------------------------------------------------------------------

    In the FY 2008 IPPS proposed rule, we did not propose to change the 
procedures assigned among these DRGs. We did not receive any public 
comments on this subject. Therefore, for FY 2008, we are not changing 
the procedures assigned among these DRGs.
a. Moving Procedure Codes From CMS DRG 468 (MS-DRGs 981 Through 983) or 
CMS DRG 477 (MS-DRGs 987 through 989) to MDCs
    We annually conduct a review of procedures producing assignment to 
CMS DRG 468 (MS-DRGs 981 through 983 in this final rule with comment 
period) or CMS DRG 477 (MS-DRGs 987 through 989 in this final rule with 
comment period) on the basis of volume, by procedure, to see if it 
would be appropriate to move procedure codes out of these DRGs into one 
of the surgical DRGs for the MDC into which the principal diagnosis 
falls. The data are arrayed in two ways for comparison purposes. We 
look at a frequency count of each major operative procedure code. We 
also compare procedures across MDCs by volume of procedure codes within 
each MDC.
    We identify those procedures occurring in conjunction with certain 
principal diagnoses with sufficient frequency to justify adding them to 
one of the surgical DRGs for the MDC in which the diagnosis falls. In 
the FY 2008 IPPS proposed rule, we did not propose to remove any 
procedures from CMS DRG 468 (MS-DRGs 981 through 983 in this final rule 
with comment period) or CMS DRG 477 (MS-DRGs 987 through 989). We did 
not receive any public comments on this subject. Therefore, based on 
this year's review, we are not removing any procedures from these DRGs.
b. Reassignment of Procedures Among CMS DRGs 468, 476, and 477 (MS-DRGs 
981 through 983, 984 through 986, and 987 through 989)
    We also annually review the list of ICD-9-CM procedures that, when 
in combination with their principal diagnosis code, result in 
assignment to CMS DRGs 468, 476, and 477 (MS-DRGs 981 through 983, 984 
through 986, and 987 through 989, respectively, in this final rule with 
comment period), to ascertain whether any of those procedures should be 
reassigned from one of these three DRGs to another of the three DRGs 
based on average charges and the length of stay. We look at the data 
for trends such as shifts in treatment practice or reporting practice 
that would make the resulting DRG assignment illogical. If we find 
these shifts, we would propose to move cases to keep the DRGs 
clinically similar or to provide payment for the cases in a similar 
manner. Generally, we move only those procedures for which we have an 
adequate number of discharges to analyze the data.
    We did not propose to move any procedure codes among these DRGs. We 
did not receive any public comments on this subject. Therefore, we are 
not moving any procedure codes from CMS DRG 476 (MS-DRGs 984, 985, and 
986 in this final rule with comment period) to CMS DRG 468 (MS-DRGs 
981, 982, and 983 in this final rule with comment period) or to CMS DRG 
477 (MS-DRGs 987, 988, and 989 in this final rule with comment period), 
or from CMS DRG 477 (MS-DRGs 987, 988, and 989 in this final rule with 
comment period) to CMS DRGs 468 (MS-DRGs 981, 982, and 983 in this 
final rule with comment period) or to CMS DRG 476 (MS-DRGs 984, 985, 
and 986 in this final rule with comment period) for FY 2008.
c. Adding Diagnosis or Procedure Codes to MDCs
    Based on our review this year, as we proposed, we are not adding 
any diagnosis codes to MDCs for FY 2008. We did not receive any public 
comments on this subject.
10. Changes to the ICD-9-CM Coding System
    As described in section II.B.1. of the preamble of this final rule 
with comment period, the ICD-9-CM is a coding system used for the 
reporting of diagnoses and procedures performed on a patient. In 
September 1985, the ICD-9-CM Coordination and Maintenance Committee was 
formed. This is a Federal interdepartmental committee, co chaired by 
the National Center for Health Statistics (NCHS), the Centers for 
Disease Control and Prevention, and CMS, charged with maintaining and 
updating the ICD-9-CM system. The Committee is jointly responsible for 
approving coding changes, and developing errata, addenda, and other 
modifications to the ICD-9-CM to reflect newly developed procedures and 
technologies and newly identified diseases. The Committee is also 
responsible for promoting the use of Federal and non Federal 
educational programs and other communication techniques with a view 
toward

[[Page 47242]]

standardizing coding applications and upgrading the quality of the 
classification system.
    The Official Version of the ICD-9-CM contains the list of valid 
diagnosis and procedure codes. (The Official Version of the ICD-9-CM is 
available from the Government Printing Office on CD-ROM for $25.00 by 
calling (202) 512-1800.) The Official Version of the ICD-9-CM is no 
longer available in printed manual form from the Federal Government; it 
is only available on CD-ROM. Users who need a paper version are 
referred to one of the many products available from publishing houses.
    The NCHS has lead responsibility for the ICD-9-CM diagnosis codes 
included in the Tabular List and Alphabetic Index for Diseases, while 
CMS has lead responsibility for the ICD-9-CM procedure codes included 
in the Tabular List and Alphabetic Index for Procedures.
    The Committee encourages participation in the above process by 
health-related organizations. In this regard, the Committee holds 
public meetings for discussion of educational issues and proposed 
coding changes. These meetings provide an opportunity for 
representatives of recognized organizations in the coding field, such 
as the American Health Information Management Association (AHIMA), the 
American Hospital Association (AHA), and various physician specialty 
groups, as well as individual physicians, health information management 
professionals, and other members of the public, to contribute ideas on 
coding matters. After considering the opinions expressed at the public 
meetings and in writing, the Committee formulates recommendations, 
which then must be approved by the agencies.
    The Committee presented proposals for coding changes for 
implementation in FY 2008 at a public meeting held on September 28-29, 
2006, and finalized the coding changes after consideration of comments 
received at the meetings and in writing by December 4, 2006. Those 
coding changes are announced in Tables 6A through 6F in the Addendum to 
this proposed rule. The Committee held its 2007 meeting on March 22-23, 
2007. Proposed new codes for which there was a consensus of public 
support and for which complete tabular and indexing changes can be made 
by May 2007 will be included in the October 1, 2007 update to ICD-9-CM. 
Code revisions that were discussed at the March 22-23, 2007 Committee 
meeting could not be finalized in time to include them in the Addendum 
to the proposed rule. These additional codes are included in Tables 6A 
through 6F of this final rule with comment period and are marked with 
an asterisk (*).
    Copies of the minutes of the procedure codes discussions at the 
Committee's September 28-29, 2006 meeting can be obtained from the CMS 
Web site at: http://cms.hhs.gov/ICD9ProviderDiagnosticCodes/03_meetings.asp. The minutes of the diagnosis codes discussions at the 
September 28-29, 2006 meeting are found at: http://www.cdc.gov/nchs/icd9.htm. Paper copies of these minutes are no longer available and the 
mailing list has been discontinued. These Web sites also provide 
detailed information about the Committee, including information on 
requesting a new code, attending a Committee meeting, and timeline 
requirements and meeting dates.
    We encourage commenters to address suggestions on coding issues 
involving diagnosis codes to: Donna Pickett, Co Chairperson, ICD-9-CM 
Coordination and Maintenance Committee, NCHS, Room 2402, 3311 Toledo 
Road, Hyattsville, MD 20782. Comments may be sent by E mail to: 
<a href="/cdn-cgi/l/email-protection#e4808294d0a4878087ca838b92"><span class="__cf_email__" data-cfemail="6a0e0c1a5e2a090e09440d051c">[email protected]</span></a>.
    Questions and comments concerning the procedure codes should be 
addressed 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, C4-08-06, 
7500 Security Boulevard, Baltimore, MD 21244 1850. Comments may be sent 
by E mail to: <a href="/cdn-cgi/l/email-protection#87f7e6f3f5eee4eee6a9e5f5e8e8ecf4b5c7e4eaf4a9efeff4a9e0e8f1"><span class="__cf_email__" data-cfemail="3c4c5d484e555f555d125e4e5353574f0e7c5f514f1254544f125b534a">[email protected]</span></a>.
    The ICD-9-CM code changes that have been approved will become 
effective October 1, 2007. The new ICD-9-CM codes are listed, along 
with their DRG classifications, in Tables 6A and 6B (New Diagnosis 
Codes and New Procedure Codes, respectively) in the Addendum to this 
final rule with comment period. As we stated above, the code numbers 
and their titles were presented for public comment at the ICD-9-CM 
Coordination and Maintenance Committee meetings. Both oral and written 
comments were considered before the codes were approved. In the FY 2008 
IPPS proposed rule, we only solicited comments on the proposed 
classification of these new codes.
    Comment: One commenter expressed concern that the 2-month timeframe 
between adoption of new ICD-9-CM codes and the effective date of new 
codes creates a disadvantage for the coding community because updating 
of facility-specific and industry information, such as education/
training materials and code books, is based on the final codes. The 
commenter noted that ICD-9-CM code changes discussed at the March 22-
23, 2007 ICD-9-CM Coordination and Maintenance Committee meeting were 
not listed in the FY 2008 IPPS proposed rule, so the coding community 
has 2 months, rather than 5 months, to update its coding products. The 
commenter recommended that CMS consider implementation of codes 
discussed at the spring meeting in April of the following year, rather 
than forcing the new codes into the October release.
    Response: We are sympathetic to the commenter's concern that the 
short timeframe between adoption of new codes and the effective date of 
new codes may make it challenging to update coding products. However, 
this short time period has proven to be invaluable for collecting 
MedPAR data on new technologies as soon as possible. Therefore, we will 
continue our current process of attempting to expedite the creation of 
new ICD-9-CM codes.
    For codes that have been replaced by new or expanded codes, and the 
corresponding new or expanded diagnosis codes are included in Table 6A. 
New procedure codes are shown in Table 6B. Diagnosis codes that have 
been replaced by expanded codes or other codes or have been deleted are 
in Table 6C (Invalid Diagnosis Codes). These invalid diagnosis codes 
will not be recognized by the GROUPER beginning with discharges 
occurring on or after October 1, 2007. Table 6D contains invalid 
procedure codes. These invalid procedure codes will not be recognized 
by the GROUPER beginning with discharges occurring on or after October 
1, 2007. Revisions to diagnosis code titles are in Table 6E (Revised 
Diagnosis Code Titles), which also includes the DRG assignments for 
these revised codes. Table 6F includes revised procedure code titles 
for FY 2008.
    In the September 7, 2001 final rule implementing the IPPS new 
technology add on payments (66 FR 46906), we indicated we would attempt 
to include proposals for procedure codes that would describe new 
technology discussed and approved at the Spring meeting as part of the 
code revisions effective the following October. As stated previously, 
ICD -9-CM codes discussed at the March 22-23, 2007 Committee meeting 
that received consensus and that were finalized by May 2007, are 
included in Tables 6A through 6F of the Addendum to this final rule 
with comment period.
    Section 503(a) of Pub. L. 108-173 included a requirement for 
updating ICD-9-CM codes twice a year instead of a single update on 
October 1 of each

[[Page 47243]]

year. This requirement was included as part of the amendments to the 
Act relating to recognition of new technology under the IPPS. Section 
503(a) amended section 1886(d)(5)(K) of the Act by adding a clause 
(vii) which states that the ``Secretary shall provide for the addition 
of new diagnosis and procedure codes on April 1 of each year, but the 
addition of such codes shall not require the Secretary to adjust the 
payment (or diagnosis related group classification) * * * until the 
fiscal year that begins after such date.'' This requirement improves 
the recognition of new technologies under the IPPS system by providing 
information on these new technologies at an earlier date. Data will be 
available 6 months earlier than would be possible with updates 
occurring only once a year on October 1.
    While section 1886(d)(5)(K)(vii) of the Act states that the 
addition of new diagnosis and procedure codes on April 1 of each year 
shall not require the Secretary to adjust the payment, or DRG 
classification, under section 1886(d) of the Act until the fiscal year 
that begins after such date, we have to update the DRG software and 
other systems in order to recognize and accept the new codes. We also 
publicize the code changes and the need for a mid year systems update 
by providers to identify the new codes. Hospitals also have to obtain 
the new code books and encoder updates, and make other system changes 
in order to identify and report the new codes.
    The ICD-9-CM Coordination and Maintenance Committee holds its 
meetings in the spring and fall in order to update the codes and the 
applicable payment and reporting systems by October 1 of each year. 
Items are placed on the agenda for the ICD-9-CM Coordination and 
Maintenance Committee meeting if the request is received at least 2 
months prior to the meeting. This requirement allows time for staff to 
review and research the coding issues and prepare material for 
discussion at the meeting. It also allows time for the topic to be 
publicized in meeting announcements in the Federal Register as well as 
on the CMS Web site. The public decides whether or not to attend the 
meeting based on the topics listed on the agenda. Final decisions on 
code title revisions are currently made by March 1 so that these titles 
can be included in the IPPS proposed rule. A complete addendum 
describing details of all changes to ICD-9-CM, both tabular and index, 
is published on the CMS and NCHS Web sites in May of each year. 
Publishers of coding books and software use this information to modify 
their products that are used by health care providers. This 5 month 
time period has proved to be necessary for hospitals and other 
providers to update their systems.
    A discussion of this timeline and the need for changes are included 
in the December 4-5, 2005 ICD-9-CM Coordination and Maintenance 
Committee minutes. The public agreed that there was a need to hold the 
fall meetings earlier, in September or October, in order to meet the 
new implementation dates. The public provided comment that additional 
time would be needed to update hospital systems and obtain new code 
books and coding software. There was considerable concern expressed 
about the impact this new April update would have on providers.
    In the FY 2005 IPPS final rule, we implemented section 
1886(d)(5)(K)(vii) of the Act, as added by section 503(a) of Pub. L. 
108-173, by developing a mechanism for approving, in time for the April 
update, diagnosis and procedure code revisions needed to describe new 
technologies and medical services for purposes of the new technology 
add-on payment process. We also established the following process for 
making these determinations. Topics considered during the Fall ICD-9-CM 
Coordination and Maintenance Committee meeting are considered for an 
April 1 update if a strong and convincing case is made by the requester 
at the Committee's public meeting. The request must identify the reason 
why a new code is needed in April for purposes of the new technology 
process. The participants at the meeting and those reviewing the 
Committee meeting summary report are provided the opportunity to 
comment on this expedited request. All other topics are considered for 
the October 1 update. Participants at the Committee meeting are 
encouraged to comment on all such requests. There were no requests for 
an expedited April l, 2007 implementation of an ICD-9-CM code at the 
September 28-29, 2006 Committee meeting. Therefore, there were no new 
ICD-9-CM codes implemented on April 1, 2007.
    We believe that this process captures the intent of section 
1886(d)(5)(K)(vii) of the Act. This requirement was included in the 
provision revising the standards and process for recognizing new 
technology under the IPPS. In addition, the need for approval of new 
codes outside the existing cycle (October 1) arises most frequently and 
most acutely where the new codes will identify new technologies that 
are (or will be) under consideration for new technology add-on 
payments. Thus, we believe this provision was intended to expedite data 
collection through the assignment of new ICD-9-CM codes for new 
technologies seeking higher payments.
    Current addendum and code title information is published on the CMS 
Web site at: www.cms.hhs.gov/icd9ProviderDiagnosticCodes/01_overview.asp#TopofPage. Information on ICD-9-CM diagnosis codes, along 
with the Official ICD-9-CM Coding Guidelines, can be found on the Web 
site at: www.cdc.gov/nchs/icd9.htm. Information on new, revised, and 
deleted ICD-9-CM codes is also provided to the AHA for publication in 
the Coding Clinic for ICD-9-CM. AHA also distributes information to 
publishers and software vendors.
    CMS also sends copies of all ICD-9-CM coding changes to its 
contractors for use in updating their systems and providing education 
to providers.
    These same means of disseminating information on new, revised, and 
deleted ICD-9-CM codes will be used to notify providers, publishers, 
software vendors, contractors, and others of any changes to the ICD-9-
CM codes that are implemented in April. The code titles are adopted as 
part of the ICD-9-CM Coordination and Maintenance Committee process. 
Thus, although we publish the code titles in the IPPS proposed and 
final rules, they are not subject to comment in the proposed or final 
rules. We will continue to publish the October code updates in this 
manner within the IPPS proposed and final rules. For codes that are 
implemented in April, we will assign the new procedure code to the same 
DRG in which its predecessor code was assigned so there will be no DRG 
impact as far as DRG assignment. Any midyear coding updates will be 
available through the Web sites indicated above and through the Coding 
Clinic for ICD-9-CM. Publishers and software vendors currently obtain 
code changes through these sources in order to update their code books 
and software systems. We will strive to have the April 1 updates 
available through these Web sites 5 months prior to implementation 
(that is, early November of the previous year), as is the case for the 
October 1 updates.
11. Other DRG Issues Addressed in the FY 2008 IPPS Proposed Rule
a. Seizures and Headaches
    After publication of the FY 2007 IPPS final rule (71 FR 47928), we 
received correspondence expressing concerns about the revisions we made 
to the seizure and headache DRGs effective on October 1, 2006. We 
created new DRGs

[[Page 47244]]

562 (Seizure Age > 17 With CC), DRG 563 (Seizure Age > 17 Without CC), 
and DRG 564 (Headaches Age > 17) as an interim step to better recognize 
severity of illness among seizure and headache patients for FY 2007. 
Although national Medicare utilization data supported the revised DRGs, 
the commenter indicated that the change did not appropriately recognize 
hospital resources associated with the patients treated in the 
hospital's inpatient headache program. The commenter stated that 
patients who are admitted to the hospital's inpatient headache program 
suffer from chronic headache pain and require inpatient treatment that 
can last up to 12 days. The commenter noted that these patients are 
referred from around the country after several months of unsuccessful 
pain relief and treatment. The commenter indicated that the majority of 
patients treated at the hospital's inpatient headache program are drug 
dependent from being administered increasing dosages of pain relievers 
that have been unsuccessful in resolving chronic headache pain. 
Further, the commenter noted that the patients require detoxification 
before any headache treatment begins. The commenter urged CMS to 
subdivide the headache DRG to better recognize the higher level of 
severity associated with treating chronic headache patients in the 
hospital's program.
    Although we are sympathetic to the commenter, it is not feasible to 
design a DRG system that addresses concerns that may be unique to one 
facility. Other than this one commenter, we did not receive any concern 
about our decision to create separate DRGs for seizures and headaches. 
However, we agreed to review this issue as part of our effort to 
redesign the DRG system to better recognize severity of illness for FY 
2008.
    As discussed in section II.C. of the preamble of this final rule 
with comment period, we are adopting MS-DRGs for FY 2008. While the CMS 
DRG structure did not support splitting the headache DRG based on the 
presence or absence of a CC, the MS-DRGs support the creation of a 
split for the headache DRGs based on whether the patient has a MCC as 
shown below:

------------------------------------------------------------------------
                                                  Average
              MS-DRG                Number of    length of     Average
                                      cases         stay       charges
------------------------------------------------------------------------
MS-DRG 102 (Headaches with MCC)..        1,268         5.04      $19,077
MS-DRG 103 (Headaches without           14,277         3.22       11,989
 MCC)............................
------------------------------------------------------------------------

    (The criteria for determining whether to subdivide a DRG are 
described in detail earlier in section II.D. of the preamble of this 
final rule with comment period.) Thus, we proposed to create two MS-
DRGs for headaches under the MS-DRGs as shown below:
    <bullet> MS-DRG 102 (Headaches with MCC).
    <bullet> MS-DRG 103 (Headaches without MCC).
    We believe this proposed structure would better recognize those 
headache patients who are severely ill and require more resources as 
described by the commenter. We refer the readers to section II.D. of 
the preamble of this final rule with comment period for a detailed 
discussion of the MS-DRGs.
    Comment: Three commenters supported a DRG system that accounts for 
the severity of illness, intensity of service, and differences in the 
cost of care in treating headache patients. They strongly support CMS' 
proposal to revise its current headache classification, CMS DRG 564 
(Headaches Age > 17), that was effective as of October 1, 2006 (FY 
2007). One of the commenters stated that CMS DRG 564 does not 
adequately classify headache cases based on the presence or absence of 
complicating conditions and assumes a relatively short length of stay, 
resulting in inadequate payments to cover the costs of treating 
severely complex chronic headache patients that are referred to 
specialized treatment centers such as theirs. The commenters also 
agreed with the use of secondary diagnoses to improve payments and 
better account for severity within a DRG that is defined by the 
diagnosis of headache. However, the commenters indicated that certain 
secondary diagnoses related to medication overuse and dependency are 
not considered MCCs for headache cases. According to one of the 
commenters, the common secondary diagnosis codes used for patients with 
medication overuse and dependency are identified by the following ICD-
9-CM codes (a fifth digit representing the drug dependence as 
unspecified (0), continuous (1), episodic (2), or in remission (3) 
would be applied according to the physician documentation):
    <bullet> 304.0x, Opioid type dependence.
    <bullet> 304.1x, Sedative, hypnotic or anxiolytic dependence.
    <bullet> 304.2x, Cocaine dependence.
    <bullet> 304.3x, Cannabis dependence.
    <bullet> 304.4x, Amphetamine and other psychostimulant dependence.
    <bullet> 304.5x, Hallucinogen dependence.
    <bullet> 304.6x, Other specified drug dependence.
    <bullet> 304.7x, Combinations of opioid type drug with any other.
    <bullet> 304.8x, Combinations of drug dependence excluding opioid 
type drug.
    <bullet> 304.9x, Unspecified drug dependence.
    The commenters recognize that most of the above listed conditions 
were included on the proposed CC list; however, none of them were 
included on the proposed MCC list. Therefore, the majority of patients 
treated in the commenter's specialized headache program will not 
qualify to be assigned to proposed MS-DRG 102 (Headache with MCC) and 
will be paid using proposed MS-DRG 103 (Headache without MCC)--the 
lower severity level. The commenter further noted that, in contrast to 
patients who primarily exhibit substance abuse, the headache patient 
does not primarily exhibit addictive disease, but is a desperate 
individual who takes increasing amounts of medication to control pain 
that has not successfully been controlled. In addition, the patient 
experiences withdrawal phenomena (sweating, shaking, crawling skin, 
sleeplessness, changes to blood pressure and pulse) as he or she 
attempts to reduce the drugs at the recommendation of the physician. 
The commenter noted that a chronic headache patient with a narcotics 
addiction is more costly to treat because, to ensure a successful 
treatment outcome, the patient must be effectively withdrawn from the 
offending medication, while simultaneously addressing the escalating 
pain and controlling it which requires inpatient hospitalization that 
can last up to 2 weeks.
    Another commenter suggested that according to the MCCs identified, 
there appeared to be a significant variance in cost for headache 
patients whose stay involved an additional two days. This commenter 
encouraged CMS to examine the creation of a CC split under the current 
CMS DRG classification if the adoption of the MS-DRG system does not 
take place. The commenter stated the determination should consider 
whether the MCCs used in the MS-DRG

[[Page 47245]]

analysis are on the current CMS DRG CC list.
    One of the commenters provided several suggestions for how the 
proposed MS-DRG classification could more accurately identify case 
complexity for inpatient headache cases. The suggestions are described 
below.
    1. Include the ICD-9-CM codes (304.00-304.93) on the list of MCCs. 
These conditions are true indicators of case complexity and patients 
with these complications should be paid at the higher severity level if 
there are only these two adult headache DRGs.
    2. If the above suggestion of moving those codes to the MCC list 
has unintended consequences for a large number of the other (non-
headache) DRGs, another approach would be to add a modifier to the CC 
list recognizing these codes as MCCs for cases in which the principal 
diagnosis is headache.
    3. Add a third headache MS-DRG specifically for the opioid and 
other medication overuse codes.
    The commenter indicated a preference for the third option stating 
that based on the data available and medical judgment, this MS-DRG 
would be the most clinically appropriate method to better recognize 
severity among headache cases. In addition, the commenter noted it is 
most consistent with efforts already underway in the ICD-10 
classification system to identify medication overuse in patients with a 
principal diagnosis of headache, although ICD-10 is not yet available.
    Response: We appreciate the commenter's support of the proposed MS-
DRG classification system to better recognize severity of illness, 
intensity of service, and differences in the cost of care in treating 
headache patients. The commenters are correct that the drug dependency 
diagnosis codes (304.0x-304.9x) are not considered MCCs in the proposed 
MS-DRG system. As we discussed in the proposed rule (72 FR 24702), we 
categorized diagnoses as MCCs, CCs, and non-CC based on an iterative 
approach in which each diagnosis was evaluated to determine the extent 
to which its presence as a secondary diagnosis resulted in increased 
hospital resources.
    We examined the MedPAR data for headache patients with drug 
dependency (codes 304.00-304.93). Our medical advisors also analyzed 
clinical issues surrounding patients who have these codes reported as a 
secondary diagnosis. After evaluation of the data and clinical issues, 
our medical advisors recommend that we not change the CC status for the 
drug dependency codes. Our analysis demonstrated approximately 254 
cases in MS DRG 103 with an average length of stay of 4.9 days and 
average charges approximately $2,500 higher than without drug 
dependency. There were 25 cases in MS DRG 102 with an average length of 
stay of 7 days and average charges approximately $5,000 higher than all 
cases in MS-DRG 102. The results are shown in the table below.

                                Headaches
------------------------------------------------------------------------
                                                  Average
               DRG                  Number of    length of     Average
                                      cases         stay       charges
------------------------------------------------------------------------
MS-DRG 102 with MCC--All cases...        1,268         5.04      $19,077
MS-DRG 102 with MCC--With                   25            7       24,061
 secondary diagnosis of drug
 dependency codes 304.00-304.93..
MS-DRG 103 without MCC--all cases       14,277         3.22       11,989
MS-DRG 103 with MCC--With                  254          4.9       14,447
 secondary diagnosis of drug
 dependency codes 304.00-304.93..
------------------------------------------------------------------------

    The process used to subdivide a MS-DRG into severity levels based 
upon the presence of a CC or MCC included five criteria. All five 
criteria had to be met to satisfy the requirement of creating severity 
levels. We refer readers to section II.D.3. of the preamble to this 
final rule with comment period for a complete discussion of these 
criteria.
    In studying the data for headaches, the number of cases that 
include secondary diagnoses of drug dependency does not meet the 
minimum requirement of 500 cases to create another subdivision. 
Therefore, only the ``with MCC'' and ``without MCC'' severity levels 
were established and proposed for headache cases.
    We agree with the commenter that headache patients who suffer from 
medication overuse are not identical to substance abuse patients. 
However, if a headache patient presents to the hospital with withdrawal 
phenomena and it is the drug withdrawal symptoms that require attention 
and resolution prior to directing treatment towards the headache 
symptoms, the reason for the patient's admission (or principal 
diagnosis) appears to be the drug withdrawal. The Official ICD-9-CM 
Guidelines for Coding and Reporting instruct that the principal 
diagnosis is defined in the Uniform Hospital Discharge Data Set (UHDDS) 
as ``that condition established after study to be chiefly responsible 
for occasioning the admission of the patient to the hospital for 
care.'' Therefore, these headache patients are being admitted to 
address their drug dependency and drug withdrawal before any headache 
treatment can begin.
    As discussed above, at this time, analysis of the data does not 
support assigning the drug dependency codes as MCCs. Secondly, there is 
not justification to warrant adding modifiers to the drug dependency 
codes that are currently on the CC list to consider those diagnoses as 
MCCs for headache cases only. (Further, modifiers are not used in ICD-
9-CM.) Lastly, the data does not support subdividing the proposed MS-
DRGs for headaches into another severity level.
    In this FY 2008 final rule, we are adopting the MS-DRGs. Therefore, 
effective October 1, 2007, the MS-DRGs for headache cases will be as 
follows:
    <bullet> MS-DRG 102 (Headaches with MCC)
    <bullet> MS-DRG 103 (Headaches without MCC).
    Comment: One commenter applauded CMS for the changes in the DRG 
structure to better recognize differences in patient severity. This 
commenter recommended further refinements to proposed MS-DRG 100 
(Seizures with MCC) and MS-DRG 101 (Seizures without MCC). According to 
the commenter, most Medicare patients who are assigned to the seizure 
DRGs are admitted to receive acute treatment that is typically provided 
in the general medical setting. Alternatively, the commenter stated 
that patients who suffer from uncontrolled seizures or intractable 
epilepsy are admitted to an epilepsy center for a comprehensive 
evaluation to identify the epilepsy seizure type, the cause of the 
seizure, and the location of the seizure. The commenter added that 
these patients are admitted to the hospital for 4 to 6 days with 24-
hour monitoring that includes the use of EEG video monitoring along 
with cognitive testing and brain imaging procedures. The commenter 
noted that

[[Page 47246]]

patients treated in an epilepsy center receive highly technical care 
that is comparable to the care received in a hospital's intensive care 
unit, and these patients are more costly to treat.
    With the assistance of an outside reviewer, the commenter analyzed 
cost data for proposed MS-DRGs 100 and 101, which focused on a target 
group of patients identified with a diagnosis of epilepsy (diagnosis 
codes 345.0 through 345.9) or convulsions (diagnosis code 780.39) and 
the presence of EEG video monitoring (vEEG) (procedure code 89.10) or a 
Wada test (procedure code 89.19). The commenter stated that the 
patients identified with those codes are treated in specialized 
epilepsy centers. The commenter recommended that CMS further refine 
proposed MS-DRGs 100 and 101 by subdividing cases with the combination 
of a diagnosis of epilepsy and one of the diagnostic tests performed 
into separate DRGs defined as follows:
    <bullet> MS-DRG XXX (Epilepsy Evaluation with MCC)
    <bullet> MS-DRG XXX (Epilepsy Evaluation without MCC)
    The commenter acknowledged that the target group of cases 
constitutes a small portion of the total cases found in MS-DRGs 100 and 
101. However, the commenter noted that the diagnostic procedures 
described above (codes 89.10 and 89.19) are performed by a small 
minority of hospitals in the United States. The commenter believed that 
the recommendation to refine these DRGs would result in a minimal 
impact on other hospitals, while substantially improving the accuracy 
of payment to those hospitals specializing in epilepsy treatment.
    Response: We appreciate the commenter's support of our efforts to 
better recognize severity in the DRG system and its recommendation to 
further refine the proposed seizure DRGs. Epilepsy is currently 
identified by ICD-9-CM diagnosis codes 345.0x through 345.9x. There are 
two fifth-digits that may be assigned to a subset of the epilepsy 
codes, depending on the physician documentation:
    <bullet> 0--without mention of intractable epilepsy.
    <bullet> 1--with intractable epilepsy.
    According to the commenter, the specialized epilepsy centers focus 
on treating patients who suffer from intractable epilepsy. The data 
that the commenter reviewed included the range of epilepsy codes (345.0 
through 345.9), the code for convulsions (780.39) and the codes for the 
diagnostic tests (89.10 and 89.19). The data that were submitted by the 
commenter did not clearly identify the specific epilepsy codes reviewed 
or the combination of the diagnostic procedures performed along with 
specified epilepsy codes. It was also unclear what secondary codes were 
reviewed in the analysis. As a result, we were unable to conduct our 
own analysis to evaluate the commenter's recommendation. In addition, 
we do not believe that we should make further changes to the MS-DRG 
assignments based on combinations of selected diagnoses. These types of 
analyses could be done with virtually any MS-DRG and would add 
significant complexity to the DRG system that we do not believe is 
warranted at this time. We encourage the commenter to provide the 
specific codes used in its analysis so we can examine this issue as we 
continue to make further refinements to the DRGs for FY 2009.
    We also note that the topic of epilepsy has been discussed over the 
last couple of years at the ICD-9-CM Coordination and Maintenance 
Committee meetings due to confusion with physician documentation and 
the implications of coding a patient as having a one-time seizure 
versus ``labeling'' the patient as having the diagnosis of epilepsy. It 
is unclear if the data identifying these conditions are accurate and 
reliable as a result of this confusion.
    In conclusion, as final policy for FY 2008, effective October 1, 
2007, the following seizure DRGs are adopted as proposed:
    <bullet> MS-DRG 100 (Seizures with MCC).
    <bullet> MS-DRG 101 (Seizures without MCC).
b. Devices That Are Replaced Without Cost or Where Credit for a 
Replaced Device Is Furnished to the Hospital
(1) Background
    We addressed the topic of Medicare payment for devices that are 
replaced without costs or where credit for a replaced device is 
furnished to the hospital in the FY 2007 IPPS final rule (71 FR 47962). 
In that final rule, we included the following background information:
    In recent years, there have been several field actions and recalls 
with regard to failure of implantable cardiac defibrillators (ICDs) and 
pacemakers. In many of these cases, the manufacturers have offered 
replacement devices without cost to the hospital or credit for the 
device being replaced if the patient required a more expensive device. 
In some circumstances, manufacturers have also offered, through a 
warranty package, to pay specified amounts for unreimbursed expenses to 
persons who had replacement devices implanted. Nonetheless, we believe 
that incidental device failures that are covered by manufacturer 
warranties occur routinely. While we understand that some device 
malfunctions may be inevitable as medical technology grows increasingly 
sophisticated, we believe that early recognition of problems would 
reduce the number of people who would be potentially adversely affected 
by these device problems. The medical community needs heightened and 
early awareness of patterns of device failures, voluntary field 
actions, and recalls so that it can take appropriate corrective action 
to care for patients. Systematic efforts must be undertaken by all 
interested and involved parties, including manufacturers, insurers, and 
the medical community, to ensure that device problems are recognized, 
and are addressed as early as possible so that patients' quality of 
health care is protected and high quality medical care, equipment, and 
technologies are provided. We are taking several steps to assist in the 
early recognition and analysis of patterns of device problems to 
minimize the potential for harm from device related defects to Medicare 
beneficiaries and the public in general.
    In recent years, CMS has recognized the importance of data 
collection as a condition of Medicare coverage for selected services. 
In 2005, we issued an NCD that expanded coverage of ICDs and also 
required registry participation when the devices were implanted for 
certain clinical indications. The NCD included this requirement in 
order to ensure that the medical care received by Medicare 
beneficiaries was reasonable and necessary and, therefore, that the 
provider or supplier would be appropriately paid. Presently, the 
American College of Cardiology [mu] National Cardiovascular Data 
Registry (ACC NCDR) collects these data and maintains the registry.
    In addition to ensuring appropriate payment of claims, collection, 
and ongoing analysis of ICD implantation, registry data can facilitate 
public response to the quality of health care issues in the event of 
future device recalls. Analysis of registry data may uncover patterns 
of device malfunction, device related infection, or early battery 
depletion that would trigger a more specific investigation. Patterns 
found in registry data may identify problems in patient outcomes 
earlier than the currently available mechanisms, which do not 
systematically collect detailed information about each patient who 
receives an ICD.
    We encourage the medical community to work to develop additional 
registries

[[Page 47247]]

for implantable devices, so that timely and comprehensive information 
is available regarding devices, recipients of those devices, and 
patients' quality of health care status and medical outcomes. While 
participation in an ICD registry is required as a Medicare condition of 
coverage for ICD implantation for certain clinical conditions, we 
believe that the potential benefits of other data collection extend 
well beyond their application in Medicare's specific NCDs. As medical 
technology continues to advance swiftly, data collection regarding the 
short term and long term medical outcomes of new technologies, 
especially concerning implanted devices that may remain in the bodies 
of patients for their lifetimes, will be essential to the timely 
recognition of any specific device related problems, patterns of 
complications, and health-related outcomes. This information will 
facilitate early interventions to mitigate any harm potentially imposed 
upon Medicare beneficiaries and the public, and to improve the quality 
and efficiency of health care services provided.
    Moreover, published data from registries may further help the 
development of high quality, evidence based clinical practice 
guidelines for the care of patients who may receive device implants. In 
turn, widespread use of evidence based guidelines may reduce variation 
in medical practice, leading to improved personal care and overall 
public health. Registry information may also contribute to the 
development of more comprehensive and refined quality metrics that may 
be used to systematically assess the collected data, and then improve 
the safety and quality of health care provided to Medicare 
beneficiaries. Such improvements in the quality of care that result in 
better personal health will require the sustained commitment of 
industry, payers, health care providers, and others to progressively 
work towards that goal, and to ensure excellent and open communication 
and rapid system wide responses.
    One strategy for this data collection involves adding information 
to the claims forms. CMS has a long history of collecting hemoglobin or 
hematocrit data from ESRD patients on the claims form. Modification of 
claims forms was necessary to do that. CMS is exploring the use of 
claims data to collect other types of clinical or technical data such 
as device manufacturer and model number. The systematic recording of 
model numbers can enhance knowledge of device-related outcomes and 
complications. We look forward to further discussions with the public 
about new strategies to both recognize device related problems early as 
well as recognize health-related outcomes of new technologies.
    In addition, we believe that the routine identification of Medicare 
claims for certain device implantation procedures in situations where a 
payment adjustment is appropriate may enhance the medical community's 
recognition of device related problems, potentially leading to more 
timely improvements in medical device technologies. This systematic 
approach, which enables hospitals to identify and then appropriately 
report selected services when devices are replaced without cost to the 
hospital, or with full or partial credit to the hospital for the cost 
of the replaced device, should provide comprehensive information 
regarding the hospitals' experiences with Medicare beneficiaries who 
have specific medical devices that are being replaced. Because Medicare 
beneficiaries are common recipients of implanted devices, the claims 
information may be particularly helpful in identifying patterns of 
device related problems early in their natural history, so that 
appropriate strategies to reduce future problems may be developed. One 
possible strategy would be for the Medicare program to use information 
obtained through the use of bar coding of medical devices. The FDA 
issued a final rule in the Federal Register on February 26, 2004 (69 FR 
9119), that required bar codes for human drugs and biological product 
labels effective April 26, 2006. In the final rule, FDA deferred action 
on requiring bar codes for medical devices, noting the difficulty in 
standardizing medical devices, as compared to drugs and biologicals, 
which have the unique NDC numbering system. This rule can be reviewed 
on the Federal Register's Web site at: http://www.docket.access.gpo.gov/2004/04-4249.htm.
    We intend to monitor FDA's work in this area to determine how this 
technology could help CMS promote higher quality through better 
clinical decision making and, as discussed below, assist in improving 
the accuracy of the Medicare payment system.
    In addition to our concern for overall public health, we also have 
a fiduciary responsibility to the Medicare Trust Fund to ensure that 
Medicare pays only for covered services. Therefore, in the FY 2007 IPPS 
final rule, we indicated that we believe we need to consider whether it 
is appropriate to reduce the Medicare payment in cases in which an 
implanted device is replaced at reduced or no cost to the hospital or 
with partial or full credit for the removed device. Such consideration 
could cover certain devices for which credit for the replaced medical 
device is given, or medical devices that are replaced as a result of or 
pursuant to a warranty, field action, voluntary recall, or involuntary 
recall, and medical devices that are provided free of charge. We 
indicated that conveying this information to the Medicare beneficiary 
could provide for a reduction in the IPPS payment if we determine that 
the device is replaced without cost to the provider or beneficiary or 
when the provider receives full credit for the cost of a replaced 
device.
    In FY 2007 IPPS final rule, we indicated a need to develop a 
methodology to determine the amount of the reduction to the otherwise 
payable IPPS payment for medical devices furnished to Medicare 
beneficiaries. We believe that this policy is appropriate because, in 
these cases, the full cost of the replaced device is not incurred and, 
therefore, an adjustment to the payment is necessary to remove the cost 
of the device.
(2) Current and Proposed Policies
    In the CY 2007 OPPS final rule (71 FR 68071 through 68077), we 
adopted a policy that requires a reduced payment to a hospital or 
ambulatory surgical center when a device is provided to them at no 
cost. From our experience with the OPPS, we understand that a 
manufacturer will often provide a credit or partial credit for the 
recalled device rather than a free replacement. In other situations, a 
manufacturer will provide either a full or partial credit for a device 
that needs to be replaced only during the manufacturer's warranty 
period. In either of these situations, the original implantation of the 
device was paid for either by Medicare, another third party on behalf 
of the beneficiary by making payment directly to the hospital, or the 
implantation was paid for directly by the beneficiary. Therefore, we 
believe that Medicare should not pay the hospital for the full cost of 
the replacement if the hospital is receiving a partial or full credit, 
either due to a recall or service during the warranty period. The 
device was already paid for at the time of initial implantation, and 
Medicare should retain the credit that is being provided to the 
hospital for service to a Medicare beneficiary.
    Moreover, we also believe that a proposed adjustment is consistent 
with section 1862(a)(2) of the Act, which excludes from Medicare 
coverage an item or service for which neither the beneficiary, nor 
anyone on his or her behalf, has an obligation to pay.

[[Page 47248]]

Payment of the full IPPS payment amount in cases in which the device 
was replaced under warranty or in which there was a full or partial 
credit for the price of the recalled or failed device effectively 
results in Medicare payment for a noncovered item. Therefore, in the FY 
2008 IPPS proposed rule, we proposed to adjust the IPPS payment amount 
in these circumstances under the authority of section 1886(d)(5)(I) of 
the Act, which permits the Secretary to make ``exceptions and 
adjustments to such payment amounts * * * as the Secretary deems 
appropriate.''
    Under the OPPS, we currently only apply the reduced payment amount 
in situations where the hospital received a replacement device at no 
cost or at full credit for the replacement device. Unlike the current 
OPPS policy, we proposed for purposes of the IPPS to apply the policy 
for partial as well as full credit for a replacement device. As we 
indicated above, our experience with the OPPS suggests that the policy 
should be applied beyond full replacement of a recalled device. We 
proposed to reduce the amount of the Medicare IPPS payment when a full 
or partial credit towards a replacement device is made or the device is 
replaced without cost to the hospital or with full credit for the 
removed device. However, we do not believe that the IPPS policy should 
apply to all DRGs and all situations in which a device is replaced 
without cost to the hospital for the device or with full or partial 
credit for the removed device. We recognize that, in many cases, the 
cost of the device is a relatively modest part of the IPPS payment. In 
other situations, we believe the amount of the credit will also be 
nominal. In these cases, we believe that the averaging nature of 
payments under the IPPS would incorporate any significant savings from 
a warranty replacement, field action, or recall into the payment rate 
for the associated DRG, and that no specific adjustment would be 
necessary or appropriate. For this reason, we proposed to apply the 
policy only to those DRGs under the IPPS where the implantation of the 
device determines the base DRG assignment and situations where the 
hospital received a credit equal to 20 percent or more of the cost of 
the device. We believe a credit that is equal to or more than this 
percentage is substantial, and Medicare should not pay for the full 
cost of these replacement devices because hospitals have received 
significant savings from the manufacturer for its replacement costs. In 
the proposed rule, we sought comment on the application of this 
percentage amount. We further believe that it is appropriate to limit 
application of the policy only to those DRGs where implantation of the 
device determines the DRG assignment. In making a decision to assign a 
case based on whether a device was implanted, we recognized that the 
device cost was a significant portion of the overall costs faced by the 
hospital that treats the case. Therefore, we believe that Medicare 
should not make full payment for those DRGs where the assignment of the 
case is made based on implantation of the device when the hospital is 
receiving either a full or significant partial credit for the device. 
In the proposed rule, we included a listing of the CMS DRGs (including 
the proposed new MS-DRG title) that would be subject to this policy.
    CMS has requested and received new condition codes from the 
National Uniform Billing Committee (NUBC) to describe claims where a 
provider has received a device or product without cost. We will use 
these condition codes to reduce payment when the hospital used a device 
for which full or partial credit is given, or the item was replaced as 
a result of or under a warranty, field action, voluntary recall, 
involuntary recall, or otherwise provided free of charge. On November 
4, 2005, we issued Change Request 4058, Transmittal 741, in the 
Medicare Claims Processing Manual. The effective date of this 
transmittal was April 1, 2006, and the implementation date was April 3, 
2006. This transmittal specifies that the following two new condition 
codes have been created. They are defined below:
    <bullet> Condition Code 49--Product Replacement within Product 
Lifecycle. Replacement of a product earlier than the anticipated 
lifecycle due to an indication that the product is not functioning 
properly.
    <bullet> Condition Code 50--Product Replacement for Known Recall of 
a Product. The manufacturer or the FDA has identified the product for 
recall and therefore replacement.
    This transmittal can be accessed at the following Web site: http://www.cms.hhs.gov/Transmittals/downloads/R741CP.pdf.
    Hospitals must report these codes on any claim for IPPS services 
that includes a replacement device or product for which they received 
full or partial credit. Hospital billing offices would report one of 
these condition codes in addition to the specific code for the type of 
procedure performed (for example, replacement of a defibrillator). We 
proposed to require the hospital to provide invoices or other 
information indicating its normal cost of the device and the amount of 
the credit it received.
    Under our policy, the fiscal intermediary (or, if applicable, the 
MAC) would process claims involving DRGs that are subject to this 
policy that include a device that is replaced without cost to the 
hospital for the device or with full or partial credit for the removed 
device as identified by condition codes 49 or 50. For a device provided 
to the hospital without cost, the fiscal intermediary (or, if 
applicable, the MAC) would subtract the cost of the device from the DRG 
payment. For a device for which the hospital received a full or partial 
credit, the fiscal intermediary (or, if applicable, the MAC) would 
subtract the amount credited from the DRG payment. CMS will issue 
specific claims processing instructions to Medicare contractors and 
hospitals on implementing this policy. We proposed to require the 
hospital to provide invoices or other information indicating the cost 
of the device and the amount of credit it received. In the proposed 
rule, we sought comment on the best approach to making this payment 
adjustment and what types of documentation hospitals should provide to 
the fiscal intermediary or MAC.
    We proposed to invoke our special exceptions and adjustment 
authority under section 1886(d)(5)(I)(i) of the Act to make this 
adjustment. The special exceptions and adjustment authority authorizes 
us to provide ``for such other exceptions and adjustments to [IPPS] 
payment amountsm * * * as the Secretary deems appropriate.'' We believe 
it would be appropriate to adjust payments for surgical procedures to 
replace certain devices by providing payments to hospitals only for the 
non-device-related procedural costs when such a device is replaced 
without cost to the hospital for the device or with full credit for the 
removed device.
    Comment: Many commenters addressed this proposal. Some commenters 
suggested that CMS rescind the implementation of the proposed policy. 
Other commenters supported ``the goal of accurate payment for services 
provided and * * * the concept of a payment offset for devices that are 
replaced without cost or where a credit is furnished to the hospital 
for a replaced device.'' However, most commenters also suggested that, 
if CMS were to implement the policy, CMS reconsider the process.
    The commenters believed that blanket implementation of the proposal 
ignores the underlying concept of the DRG payment system. They stated 
that DRG payments are fundamentally based on averages of historical 
costs and charges.

[[Page 47249]]

They added that to reduce the payment for cases involving replacement 
of a medical device assumes that either these types of cases have not 
occurred in the past or are occurring at such a dramatic increase as to 
materially skew the averages used to develop the DRG weights. The 
commenters reiterated that CMS has stated that we believe device 
failures that are covered by manufacturers' warranties occur routinely. 
The commenter noted that this statement acknowledges that incidental 
device failure has occurred in the past and was likely covered by the 
manufacturer warranty. The commenter stated that, if so, this practice 
is part of the historical cost and charge data used to develop the 
current DRG weights for cases involving implantation, and that 
reduction of payment of certain cases involving a reimplantation would 
ignore the average DRG weight for those cases that already implicitly 
include this reduction.
    Another commenter suggested that CMS develop a proxy to the full 
cost of the device by using a percentage of the DRG, based on 
historical data because Medicare does not reimburse providers at full 
cost. One commenter recommended that, if adopted, CMS include in this 
policy that these claims will not be included in the calculation of 
relative weights, as this will reduce payment of services for 
procedures with non-replacement devices.
    Several commenters suggested that CMS should consider raising the 
proposed threshold from 20 percent to greater than 50 percent of the 
cost of the device. Given the administrative burden of manually 
processing these claims, the commenters believed that it is not worth 
the burden on the hospitals' or fiscal intermediaries' part if only a 
nominal portion of the cost of the device is at issue. Commenters 
further suggested that if CMS implements this policy, estimated costs 
should be calculated from the charges on the claims and the DRG payment 
only reduced by the device cost if the payment is greater than the cost 
of the case less the cost of the device.
    Several commenters cited the administrative burden that would 
result with implementation of this policy. One commenter stated that 
the proposal would result in significant operational burden and would 
essentially delay payment for otherwise clean claims. The commenter 
encouraged CMS to obtain invoice cost information from hospitals by 
having the hospitals report returned devices with a specific code 
similar to the use of HCPCS code C9399 (outpatient reporting for new 
drugs without HCPCS codes). The commenter indicated that hospitals are 
able to report the HCPCS code and the NCD number for drugs in the 
remarks section of the claim form in form locator field 84. The 
commenter believed a similar approach can be used in the inpatient 
setting when either Condition Code 49 or 50 is present on the claim. 
This would trigger the hospital to report the percentage of the device 
credit in the remarks field. The commenter suggested that this approach 
would provide CMS with the data it needs while eliminating the need for 
hard copy invoices, which will significantly reduce the hospital 
reporting burden. Another commenter suggested using a similar 
approach--applying an average adjustment based on the previous year's 
experience with credits to arrive at an aggregate method for making 
payment adjustments rather than a claim-by-claim approach.
    Some commenters raised concerns about the use of condition code 49 
with devices that are returned within the warranty period. These 
commenters explained that the time from explant of a device, receipt of 
the device by the manufacturer, subsequent device analysis and issuance 
of the warranty results can often be eight weeks or longer. According 
to the commenters, a hospital will be unaware during this time whether 
a full, partial, or even zero credit will be made. The commenter 
suggested that hospitals be either: (1) Allowed to submit the claims 
immediately without condition code 49 and submit a claim adjustment 
with condition code 49 at a later date once the credit determination is 
made; or (2) allow hospitals to hold the claim until a determination is 
made on the level of the credit. Another commenter who suggested that 
CMS adopt this approach raised a concern about ``unintended 
consequences.'' The commenter expressed a concern that hospitals may 
not return a nonworking device to avoid the payment offset resulting in 
the manufacturer being unable to identify defects that need to be 
corrected. This commenter suggested that ``discouraging device return 
from hospitals'' would be ``detrimental to industry efforts at 
identifying trends and improving the long-term reliability of current 
and future products.'' The commenter suggested that allowing hospitals 
to submit a bill without Condition Code 49 and later submitting an 
adjustment claim with the code could avoid discouraging hospitals from 
returning devices that are replaced.
    Other commenters raised concerns about the nomenclature that is 
used to describe Condition Code 49. These commenters were concerned 
that Condition Code 49 describes ``replacement of a product earlier 
than the anticipated lifecycle due to an indication that the product is 
not functioning properly.'' One commenter was concerned that submitting 
a bill immediately with Condition Code 49 would indicate a premature 
determination that a device was replaced due to improper functioning. 
Like the commenter above, this commenter was concerned that the 
manufacturer may make a later determination that the device was 
functioning properly or the warranty period had expired and hospital 
will have already billed using Condition Code 49. Another commenter 
suggested that a device may be replaced during a warranty period even 
though it is functioning properly (for example, the patient depleted a 
battery prematurely because of higher than normal energy needs). In 
this case, the commenter was concerned that Condition Code 49 will 
label the replacement as being due to a malfunction when it actually 
results from higher than normal use but proper functioning of the 
device. The commenter suggested alternative nomenclature for Condition 
Code 49 that focuses on the product being replaced earlier than its 
anticipated lifecycle as a result of either a product malfunction or 
higher than normal use.
    Finally, some commenters raised concerns about the use of invoices 
to determine the level of the reduction in Medicare's payment. One 
commenter indicated that credits are derived using the original and 
current contract prices for the device being explained and the product 
price for the replacement device. According to this commenter, 
manufacturers can provide hospitals with the credit dollar amount and 
the percentage the credit represents of the full cost of the device. 
Based on that information, hospitals will easily be able to determine 
whether they need to submit a claim with Condition Code 49 (that is, 
the credit is equal to or greater than the threshold reduction where 
the policy applies) and can furnish Medicare without the dollar amount 
of the credit that is due.
    Response: We disagree with the commenters who suggested that our 
proposal assumes that either device recalls or replacements have not 
occurred in the past or are occurring at such a dramatic increase as to 
materially skew the averages used to develop the DRG weights. Our 
policy assumes that hospital charges include the full cost of the 
device. Although the relative weights are based on estimated costs, 
charges are an important element of the relative weight methodology. We 
apply hospital cost-to-charge ratios to hospital

[[Page 47250]]

charges to determine the DRG relative weight. If hospitals have uniform 
charging practices for all cases irrespective of whether they receive a 
device at no cost or with a partial credit, the CCR will be applied to 
a hospital charge that does not reflect that the hospital did not pay 
the full cost of the device. Under these circumstances, we believe it 
is appropriate that Medicare's payment should recognize a hospital's 
reduced cost for a device that it receives either at no or a 
substantially reduced cost.
    We agree with the commenters who suggested that the proposed 
threshold should be raised from 20 percent to 50 percent or greater of 
the cost of the device. The commenters have raised valid issues about 
potential administrative burden and delays that could occur when 
determining whether a device was replaced due to a malfunction or due 
to higher than normal use. We agree that the policy should not apply if 
only a nominal portion of the cost of the device is at issue.
    With respect to the suggestion that the policy should only apply if 
Medicare's payment is greater than estimated costs of the case (less 
the device) calculated from the charges on the claims, we believe the 
policy we have adopted to recognize the lower costs of replaced devices 
that are either replaced at no cost or partial cost is reasonable. 
However, we may consider this idea in the future as we continue to make 
refinements to our policy for full or partial credit devices.
    We understand the commenters' concerns about potential delays that 
could occur while a returned device is being evaluated during a 
warranty service period. Of the suggestions we received to address this 
concern, we agree that hospitals should have the options of either: (1) 
Submitting the claims immediately without Condition Code 49 and a claim 
adjustment with Condition Code 49 at a later date once the credit 
determination is made or (2) holding the claim until a determination is 
made on the level of the credit. We believe that giving hospitals these 
options would address the concern of the commenter that hospitals may 
not return a non-working device for a replacement. Further, these ideas 
would facilitate more efficient administration of the policy by 
allowing the hospital to be provided with all of the information it 
needs to be paid correctly by Medicare without the need to suspend 
claims or delay payment. However, hospitals should note that if 
choosing option 1 above, the rules for submitting adjustment claims 
still apply and can be found at: http://www.cms.hhs.gov/manuals/downloads/clm104c01.pdf, section 130.2.
    The commenters raise a valid point concerning the nomenclature for 
Condition Code 49 that only describes device malfunctions when the 
policy may apply to other situations. We will bring the concerns of the 
commenter to the National Uniform Billing Committee (NUBC) for further 
consideration. The NUBC is a committee brought together by the American 
Hospital Association and includes the participation of all major 
national provider and payer organizations. Their major role is to 
maintain the integrity of the UB 92 and (now UB 04) data set and to be 
a forum for discussions that lead to mutually agreed data elements for 
the claim as well as the data elements for other claim-related 
transactions.
    With respect to the comments about using invoice information as 
documentation for the credit due to Medicare, we provided invoices as 
an example of the type of documentation a fiscal intermediary or MAC 
may require to determine the percentage credit. Our fiscal 
intermediaries (or MAC if applicable) are in the best position to 
evaluate and determine matters regarding the adequacy of documentation 
to determine Medicare payment. In this final rule with comment period, 
we are not requiring any specific documentation to determine whether 
the percentage credit will apply. Invoices or the documentation 
(including those suggested in the public comments) would be at the 
discretion of the fiscal intermediary or MAC.
    Therefore, after consideration of the public comments received, for 
FY 2008, we are implementing the following decisions regarding returned 
devices. We are applying the policy to the MS-DRGs listed in the chart 
below; those cases being MS-DRGs where the implantation of the device 
determines the base DRG assignment. Further, we are applying the policy 
in situations where the hospital received a credit equal to 50 percent 
or more of the cost of the device. Hospitals have the option of either: 
(1) Submitting the claims immediately without condition code 49 and a 
claim adjustment with condition code 49 at a later date once the credit 
determination is made or (2) holding the claim until a determination is 
made on the level of the credit. Should hospitals choose option 1, we 
note that the rules for submitting adjustment claims do apply, and can 
be found at the Web site noted above. CMS will issue specific claims 
processing instructions to Medicare contractors and hospitals on 
implementing this policy.

                                          DRGs Subject to Final Policy
----------------------------------------------------------------------------------------------------------------
                 MDC                            MS-DRG                    Narrative description of DRG
----------------------------------------------------------------------------------------------------------------
PRE..................................   1 and 2...............  Heart Transplant or Implant of Heart Assist
                                                                 System with and without MCC, respectively
                                                                 (former CMS-DRG 103, Heart Transplant or
                                                                 Implant of Heart Assist System).
1....................................   25 and 26.............   Craniotomy and Endovascular Intracranial
                                                                 Procedure with MCC or with CC, respectively
                                                                 (former CMS-DRG 1, Craniotomy Age > 17 with
                                                                 CC).
1....................................   26 and 27.............   Craniotomy and Endovascular Intracranial
                                                                 Procedure with CC or without CC/MCC,
                                                                 respectively (former CMS-DRGs 2, Craniotomy Age
                                                                 > 17 without CC).
1....................................   40 and 41.............   Peripheral & Cranial Nerve & Other Nervous
                                                                 System Procedure with MCC; or with CC or
                                                                 Peripheral Neurostimulator, respectively
                                                                 (former CMS-DRG, 7 Peripheral & Cranial Nerve &
                                                                 Other Nervous System Procedures with CC).
1....................................   42....................   Peripheral & Cranial Nerve & Other Nervous
                                                                 System Procedure without CC/MCC (former CMS-DRG
                                                                 8, Peripheral & Cranial Nerve & Other Nervous
                                                                 System Procedures without CC).
1....................................   23 and 24.............   Craniotomy with Major Device Implant or Acute
                                                                 Complex Central Nervous System Principal
                                                                 Diagnosis with MCC or Chemotherapy Implant; and
                                                                 without MCC [or Chemotherapy Implant],
                                                                 respectively (former CMS-DRG 543, Craniotomy
                                                                 with Major Device Implant or Acute Complex
                                                                 Central Nervous System Principal Diagnosis).
3....................................   129 and 130...........   Major Head & Neck Procedures with CC/MCC or
                                                                 Major Device; or without CC/MCC, respectively
                                                                 (former CMS-DRG 49, Major Head & Neck
                                                                 Procedures).

[[Page 47251]]

 
5....................................   216, 217, and 218.....   Cardiac Valve & Other Major Cardiothoracic
                                                                 Procedure with Cardiac Catheterization With
                                                                 MCC; or with CC; or without CC/MCC,
                                                                 respectively (former CMS-DRG 104, Cardiac Valve
                                                                 & Other Major Cardiothoracic Procedures with
                                                                 Cardiac Catheterization).
5....................................   219, 220, and 221.....   Cardiac Valve & Other Major Cardiothoracic
                                                                 Procedure without Cardiac Catheterization with
                                                                 MCC; or with CC, or without CC/MCC,
                                                                 respectively (former CMS-DRG 105, Cardiac Valve
                                                                 & Other Major Cardiothoracic Procedures without
                                                                 Cardiac Catheterization).
5....................................   237...................   Major Cardiovascular Procedures with MCC or
                                                                 Thoracic Aortic Aneurysm Repair (former CMS-DRG
                                                                 110, Major Cardiovascular Procedures with CC).
5....................................   238...................   Major Cardiovascular Procedures without MCC
                                                                 (former CMS-DRG 111, Major Cardiovascular
                                                                 Procedures without CC).
5....................................   260, 261, and 262.....   Cardiac Pacemaker Revision Except Device
                                                                 Replacement with MCC, or with CC, or without CC/
                                                                 MCC, respectively (former CMS-DRGs 117, Cardiac
                                                                 Pacemaker Revision Except Device Replacement).
5....................................   258 and 259...........   Cardiac Pacemaker Device Replacement with MCC,
                                                                 and Without MCC, respectively (former CMS-DRG
                                                                 118, Cardiac Pacemaker Device Replacement).
5....................................   226 and 227...........   Cardiac Defibrillator Implant without Cardiac
                                                                 Catheterization with MCC and without MCC,
                                                                 respectively (former CMS-DRG 515, Cardiac
                                                                 Defibrillator Implant without Cardiac
                                                                 Catheterization).
5....................................   215...................   Other Heart Assist System Implant (former CMS-
                                                                 DRG 525, Other Heart Assist System Implant).
5....................................   222 and 223...........   Cardiac Defibrillator Implant with Cardiac
                                                                 Catheterization with Acute Myocardial
                                                                 Infarction/Heart Failure/Shock with MCC and
                                                                 without MCC, respectively (former CMS-DRGs 535,
                                                                 Cardiac Defibrillator Implant with Cardiac
                                                                 Catheterization with Acute Myocardial
                                                                 Infarction/Heart Failure/Shock).
5....................................   224 and 225...........   Cardiac Defibrillator Implant with Cardiac
                                                                 Catheterization without Acute Myocardial
                                                                 Infarction/Heart Failure/Shock with MCC and
                                                                 without MCC, respectively (former CMS-DRG 536,
                                                                 Cardiac Defibrillator Implant with Cardiac
                                                                 Catheterization without Acute Myocardial
                                                                 Infarction/Heart Failure/Shock).
5....................................   242, 243, and 244.....   Permanent Cardiac Pacemaker Implant with MCC,
                                                                 with CC, and without CC/MCC, respectively (MS-
                                                                 DRG 551, Permanent Cardiac Pacemaker Implant
                                                                 with Major Cardiovascular Diagnosis or AICD
                                                                 Lead or Generator.
5....................................   242, 243, and 244.....   Permanent Cardiac Pacemaker Implant with MCC,
                                                                 with CC, and without CC/MCC, respectively
                                                                 (former CMS-DRG 552, Other Permanent Cardiac
                                                                 Pacemaker Implant without Major Cardiovascular
                                                                 Diagnosis).
8....................................   461 and 462...........   Bilateral or Multiple Major Joint Procedures of
                                                                 Lower Extremity with MCC, or without MCC,
                                                                 respectively (former CMS-DRG 471, Bilateral or
                                                                 Multiple Major Joint Procedures of Lower
                                                                 Extremity).
8....................................   469 and 470...........   Major Joint Replacement or Reattachment of
                                                                 Lower Extremity with MCC or without MCC,
                                                                 respectively (former CMS-DRG 544, Major Joint
                                                                 Replacement or Reattachment of Lower
                                                                 Extremity).
8....................................   466, 467, and 468.....   Revision of Hip or Knee Replacement with MCC,
                                                                 with CC, or without CC/MCC, respectively
                                                                 (former CMS-DRG 545, Revision of Hip or Knee
                                                                 Replacement).
----------------------------------------------------------------------------------------------------------------

    To codify in regulations the policies for the IPPS discussed above, 
we are adding a new paragraph (g) to Sec.  412.2 and a new Sec.  412.89 
to 42 CFR part 412, Subpart F. We are also making a technical, 
conforming change to the heading of Subpart F and adding an uncoded 
center heading before the proposed new Sec.  412.89.
12. Other MS-DRG Issues Raised in the Public Comments on the Proposed 
Rule
a. Heart Transplants or Implants of Heart Assist System and Liver 
Transplants (Pre-MDC)
    In our analysis of heart transplant or implant of heart assist 
system base DRGs and liver transplant base DRGs, we found that each 
warranted two subdivisions based on our five criteria for establishing 
the MS-DRGs discussed in section II.D. of this final rule with comment 
period. We proposed two MS-DRGs for heart transplant or implant of 
heart assist system: MS-DRG 001 (Heart Transplant or Implant of Heart 
Assist System with MCC) and MS-DRG 002 (Heart Transplant or Implant of 
Heart Assist System without MCC). We also proposed two MS-DRGs for 
liver transplant: MS DRG 005 (Liver Transplant with MCC or Intestinal 
Transplant) and MS-DRG 006 (Liver Transplant without MCC).
    Comment: Two commenters responded to our proposal on the 
subdivision of heart transplant or implant of heart assist system. One 
commenter representing one of the manufacturers of left ventricular 
assist devices (LVAD) stated that this change seems to appropriately 
identify severity of illness based upon mean length of stay days and 
charges associated with implantable LVADs as long as hospitals 
accurately report and document complications.
    Another commenter representing transplant surgeons recommended that 
CMS defer implementation of separate severity levels for heart 
transplant and liver transplants pending further study. The commenter 
stated that payment for the uncomplicated procedures--the without MCC 
group--are too low, resulting in financial instability for many centers 
and the creation of inappropriate patient selection incentives. The 
commenter submitted an analysis showing that of the 37 heart transplant 
centers for which data were available, 10 (27 percent) would undergo 
DRG payment reductions of more than 10 percent while, of the 52 liver 
transplant centers, 11 (19 percent) would experience reductions of more 
than 10 percent, with many experiencing reductions over 20 percent. The 
commenter indicated that transplant cases are relatively low volume 
which makes these DRGs more vulnerable to fluctuations.
    The commenter stated that while the concept of dividing DRGs based 
on severity is conceptually sound in the context of admissions for many 
medical conditions and perhaps for certain surgical admissions, 
transplantation as a whole is an extremely complex process that 
generally involves patients with life threatening conditions. The 
commenter stated that the presence or absence of a condition on the MCC 
list is not a good predictor of inpatient hospital costs for liver and 
heart transplants. The commenter stated that one factor that

[[Page 47252]]

influences hospital costs and lengths of stay is the characteristics of 
the donor organ. The commenter stated that the donor risk index and the 
model for end-stage liver disease (MELD) system which prioritizes 
patients waiting for liver transplants by severity of illness are two 
important factors for any severity index for transplant DRGs. This 
information is not identified in the MedPAR data.
    Several commenters also stated that the use of certain donor organs 
increase in hospital costs for transplantation. A category of donor 
called DCD (donor after cardiac death) generally represents a donor 
with a severe brain injury who is taken to the operating room, removed 
from the ventilator, and who dies a cardiac, rather than a brain, 
death. Another category of donor called ECD (extended or expanded 
criteria donor) is generally older and sicker than a standard donor. 
Use of organs from DCD or ECD donors permits transplantations that may 
be more expensive, as the organs may not be optimal. The commenters 
suggested that we take these issues into consideration when making DRG 
assignments.
    In addition, two commenters stated that a separate DRG may be 
needed to address the significantly higher costs associated with 
combined liver/kidney transplants. One of the commenters stated that 
the recent increases in volume justify creation of a separate DRG. 
Another commenter stated that the Milliman 2005 U.S. Organ and Tissue 
Transplant Cost Estimates and Discussion Research Report indicates a 
separate MS-DRG is warranted at a higher level. However, the commenter 
did not provide data on combined liver/kidney transplants from the 
report.
    Response: We cannot use the factors suggested in the commenters to 
subdivide the transplant DRGs because they are not distinctly 
identified in the current ICD-9-CM coding system. The National Center 
for Health Statistics is responsible for the maintenance of the 
diagnosis codes. We have advised representatives from the transplant 
industry to approach the National Center for Health Statistics in order 
to request unique codes to identify cases that include factors such as 
a DCD or ECD donor or the patient's MELD score. Without specific data 
that show how these factors affect patient costs, we cannot use them to 
subdivide the transplant DRGs. Suggestions on coding issues involving 
diagnosis codes should be directed to: Donna Pickett, Co-chairperson, 
ICD-9-CM Coordination and Maintenance Committee, NCHS, Room 2402, 3311 
Toledo Road, Hyattsville, MD 20782. Comments may be sent by E-mail to: 
<a href="/cdn-cgi/l/email-protection" class="__cf_email__" data-cfemail="4420223470040700076a232b32">[email protected]</a>.
    The table below illustrates our findings on heart and liver 
transplant MS-DRGs:

----------------------------------------------------------------------------------------------------------------
                                                                     Number of    Average length      Average
                             MS-DRG                                    cases          of stay         charges
----------------------------------------------------------------------------------------------------------------
MS-DRG 001 (Heart transplant or implant of heart assist system               572           41.03       $442, 339
 with MCC)......................................................
MS-DRG 002 (Heart transplant or implant of heart assist system               304           22.81         250,693
 without MCC)...................................................
MS-DRG 005 (Liver transplant with MCC or intestinal transplant).             762           22.25        243, 271
MS-DRG 006 (Liver transplant without MCC).......................             446           10.05         129,519
----------------------------------------------------------------------------------------------------------------

    The data support the current MCC split for heart and liver 
transplants. Therefore, we disagree with the commenter who suggested 
that diagnosis codes do not explain patient resource cost for these 
DRGs. In addition, the MCC split was supported by another commenter 
that manufactures LVADs. In response to the comments about the impact 
on transplant centers, we note that the change to the MS-DRGs is 
redistributive within each base DRG. Payment for the high severity 
cases will increase, and it will decrease for other cases. In total, 
Medicare payments for transplants likely will be unchanged. Rather, 
Medicare's payment will be better directed to reflect patient severity 
of illness. In response to the comment about combined liver/kidney 
transplants, we believe these patients would have a secondary diagnosis 
that is an MCC that would result in the patient being assigned to MS-
DRG 005. For instance, a common cause of combined liver and kidney 
failure is hepatorenal syndrome, in which the liver failure actually 
causes the kidney failure. In this case, the principal diagnosis is 
liver failure. The second diagnosis--kidney failure--is an MCC. 
Patients with combined liver/kidney failure are very sick patients, and 
we believe it is highly likely that if they are properly coded, all 
patients would be assigned to MS-DRG 005 and be paid the maximum amount 
for a patient receiving a liver transplant. At this time, we do not 
believe that a separate MS-DRG is needed for combined liver-kidney 
transplants.
    With respect to the Milliman 2005 US Organ and Tissue Transplant 
Cost Estimates and Discussion Research Report discussed by the 
commenter, we are open to considering, to the extent feasible, 
reliable, validated data other than MedPAR data in annually 
recalibrating and reclassifying the DRGs. Because the commenter did not 
provide data on combined liver/kidney transplants from the report, we 
could not fully evaluate the commenter's claims.
b. Gliadel[supreg] Wafer (MDC 1)
    Gliadel[supreg] Wafer is the only implantable chemotherapy agent 
approved by FDA for the treatment of malignant brain tumors. This 
treatment is approved for newly diagnosed patients with high-grade 
malignant glioma and for patients with recurrent glioblastoma 
multiforme, which is the most fatal form of primary brain tumor. ICD-9-
CM procedure code 00.10 (Implantation of chemotherapeutic agent) was 
created October 1, 2002 to uniquely identify this technology. In the FY 
2008 IPPS proposed rule, we proposed to assign the technology to MS-DRG 
23 (Craniotomy with Major Device Implant or Acute Complex Central 
Nervous System Principal Diagnosis with MCC) and MS-DRG 24 (Craniotomy 
with Major Device Implant or Acute Complex Central Nervous System 
Principal Diagnosis without MCC).
    Comment: One commenter, the manufacturer of the Gliadel[supreg] 
Wafer technology, recommended that CMS recognize the complexity and 
costs associated with implantation of Gliadel[supreg] Wafer and 
reassign all cases that use it to MS-DRG 23. The commenter also 
recommended that the MS-DRG titles for MS-DRG 23 and 24 be revised to:
    <bullet> MS-DRG 023, ``Craniotomy with Acute Complex Central 
Nervous System Principal Diagnosis with MCC or Major Device Implant''; 
and
    <bullet> MS-DRG 024, ``Craniotomy with Acute Complex Central 
Nervous System Principal Diagnosis without MCC.''
    The commenter provided data showing a total of 502 cases receiving 
the Gliadel[supreg] Wafer. The majority of the patients, 84 percent 
(423 cases), were assigned to MS-DRG 24. For MS-DRG

[[Page 47253]]

24, the commenter reported that the standardized average charges for 
Gliadel[supreg] cases were approximately $74,069, which is 27 percent 
greater than the average charges for non-Gliadel cases in MS-DRG 24 of 
approximately $58,181. Many commenters encouraged CMS to reassign these 
cases to MS-DRG 23.
    Response: Based on our review on the FY 2006 MedPAR data, we found 
73 Gliadel[supreg] cases assigned to MS-DRG 23 and 398 cases assigned 
to MS-DRG 24. The following table displays our results:

----------------------------------------------------------------------------------------------------------------
                                                                     Number of    Average length      Average
                             MS-DRG                                    cases          of stay         charges
----------------------------------------------------------------------------------------------------------------
MS-DRG 23--All cases............................................           2,950           13.63         $91,518
MS-DRG 23--Gliadel cases........................................              73           12.44         104,975
MS-DRG 24--All cases............................................           2,432            8.63          61,865
MS-DRG 24--Gliadel cases........................................             398            7.03          75,482
----------------------------------------------------------------------------------------------------------------

    Under the MS-DRGs, 73 out of 471 Gliadel[supreg] cases are assigned 
to MS-DRG 023. The 398 remaining Gliadel[supreg] cases do not have an 
MCC and would be assigned to MS-DRG 024, absent further changes to the 
DRG logic.
    The average charges of approximately $75,482 for Gliadel[supreg] 
cases are higher than the average charges of approximately $61,865 for 
the overall cases in MS-DRG 024 and are approximately midway between 
the with and without MCC severity levels. In this final rule with 
comment period, we are assigning all Gliadel[supreg] cases to MS-DRG 
23. The title for MS-DRG 023 is changed to ``Craniotomy with Major 
Device Implant or Acute Complex Central Nervous System Principal 
Diagnosis with MCC or Chemo Agent Implant''. The presence of craniotomy 
with major device implant or acute complex central nervous system 
principal diagnosis with MCC or implantation of chemotherapeutic agent 
would assign a case to the higher severity level.
c. Myasthenia Gravis and Acute and Chronic Inflammatory Demyelinating 
Neuropathies (AIDP-CIDP) (MDC 1)
    Comment: One comment, a national association that represents 
neurologists and neuroscience professionals, was concerned that there 
are no separate DRGs for Myasthenia Gravis and Acute and Chronic 
Inflammatory Demyelinating Neuropathies (AIDP-CIDP). Myasthenia gravis 
is an autoimmune disease caused by antibodies that block receptors at 
the neuromuscular junction resulting in decreased activation of muscles 
by nerves, leading to varying degrees of muscle weakness. Acute 
inflammatory demyelinating neuropathy, also known as Guillain-Barre 
Syndrome, is caused by an autoimmune process that attacks the myelin 
sheaths around nerves, causing defective nerve transmission that leads 
to sensory loss and muscle weakness. Chronic inflammatory demyelinating 
neuropathy is a chronic, relapsing form of the acute syndrome.
    We proposed to assign these conditions to MS-DRGs 56 and 57 
(Degenerative Nervous System Disorders With and Without MCC, 
respectively). According to the commenter, cases with these conditions 
should not be assigned to an MS-DRG for degenerative nervous system 
disorders.
    The commenter stated that a separate DRG needs to be established to 
recognize the substantially higher costs of treating patients with an 
acute exacerbation of myasthenia gravis. There are two ICD-9-CM 
diagnosis codes for myasthenia gravis: code 358.00 (Myasthenia gravis 
without (acute) exacerbation) and code 358.01 (Myasthenia gravis with 
exacerbation). According to the commenter, in addition to 
plasmapheresis, acute myasthenia gravis patients often require 
respiratory support, intensive care unit stays, and IVIG 
administration. The commenter requested that CMS review cost data for 
admissions under this diagnosis and determine whether these cases had 
costs that were substantially higher than other cases assigned to the 
same DRG.
    The commenter stated that, similar to myasthenia gravis, AIDP and 
CIDP are highly likely to require respiratory support and intensive 
care unit stays with plasmapheresis or IVIG administration, or both, 
when presenting acutely or in acute exacerbation. The ICD-9-CM 
diagnosis code that is reported for AIDP is code 357.0 (Acute infective 
polyneuritis), and the appropriate diagnosis code for CIDP is code 
357.81 (Chronic inflammatory demyelinatng polyneuritis). The commenter 
stated that the data on AIDP and CIDP are unavailable at this time. 
Therefore, the commenter requested that CMS track these cases in 
consideration of a separate DRG for AIDP/CIDP for next year.
    Response: The commenter raised a concern that myasthenia gravis 
cases are being assigned to the degenerative nervous system disorders 
DRG, and did not believe that the condition should be assigned to that 
DRG. However, we would point out that myasthenia gravis cases are 
currently assigned to CMS-DRG 12 (Degenerative Nervous System 
Disorders). Moving to the MS-DRGs did not alter this DRG logic. We 
simply subdivided this DRG into two severity levels. Given the 
extensive changes we are making in moving to MS-DRGs we believe it is 
premature to consider refinements to this base DRG for myasthenia 
gravis cases. Rather, we will wait to gain experience under the MS-DRGs 
and determine whether further refinements are needed to the base DRGs.
d. Peripheral and Spinal Neurostimulators (MDC 1 and MDC 8)
    In our analysis of spinal procedures and peripheral and cranial 
nerve and other nervous system procedures based DRGs in MDC 1, we found 
that each warranted three subdivisions based on our five criteria. 
There are three MS-DRGs for spinal procedures: MS-DRG 28 (Spinal 
Procedures with MCC), MS-DRG 29 (Spinal Procedures with CC), and MS-DRG 
30 (Spinal Procedures without CC). There are three MS-DRGs for 
peripheral and cranial nerve and other nervous system procedures: MS-
DRG 40 (Peripheral and Cranial Nerve and Other Nervous System 
Procedures with MCC), MS-DRG 41 (Peripheral and Cranial Nerve and Other 
Nervous System Procedures with CC), and MS-DRG 42 (Peripheral and 
Cranial Nerve and Other Nervous System Procedures without CC).
    For back and neck procedures based DRGs in MDC 8, we found that the 
base DRG warranted two subdivisions based on our five criteria. There 
are two MS-DRGs for back and neck procedures except spinal fusion: MS-
DRG 490 (Back and Neck Procedures Except Spinal Fusion with CC/MCC or 
Disc Devices) and MS-DRG 491 (Back and Neck Procedures Except Spinal 
Fusion without CC/MCC).
    Comment: Several commenters analyzed the effects of the MS-DRGs and 
contended that the payment levels for cases with implantable

[[Page 47254]]

neurostimulator devices are, in many instances, inadequate to cover the 
cost of the device and the hospital procedure to implant it. The 
commenters stated that most neurostimulator cases are assigned to the 
lowest severity level in these DRGs and concluded that the average 
charges of these cases are more similar to the higher severity levels. 
The commenters recommended that CMS:
    <bullet> For spinal cord nonrechargeable stimulator cases in MDC 1: 
Reassign all full system implants which includes cases reported with 
ICD-9-CM procedure codes 03.93 (Implantation or replacement of spinal 
neurostimulator lead(s)) and 86.94 (Insertion or replacement of single 
array neurostimulator pulse generator, not specified as rechargeable), 
or 86.95 (Insertion or replacement of dual array neurostimulator pulse 
generator, not specified as rechargeable), to MS-DRG 29 and revise the 
title to ``Spinal Procedure with CC or Major Device Implant.''
    <bullet> For spinal cord rechargeable neurostimulator cases in MDC 
1: Reassign all full-system implant cases reported with ICD-9-CM 
procedure codes 03.93 and 86.97 (Insertion or replacement of single 
array rechargeable neurostimulator pulse generator) or 86.98 (Insertion 
or replacement of dual array rechargeable neurostimulator pulse 
generator) to MS-DRG 28, and revise the title to ``Spinal Procedure 
with MCC or Major Device Implant.''
    <bullet> For spinal cord rechargeable neurostimulator cases in MDC 
8: Reassign all full-system implant cases reported with ICD-9-CM 
procedure codes 03.93 and 86.97 (Insertion or replacement of single 
array rechargeable neurostimulator pulse generator) or 86.98 (Insertion 
or replacement of dual array rechargeable neurostimulator pulse 
generator) to MS-DRG 490.
    <bullet> For peripheral nonrechargeable neurostimulator cases in 
MDC 1: Reassign all full-system implant cases reported with ICD-9-CM 
procedure codes 04.92 (Implantation or replacement of peripheral 
neurostimulator lead(s)) and 86.94 or 86.95 to MS-DRG 041 and revise 
the title to ``Peripheral and Cranial Nerve and Other Nervous System 
Procedures with CC or Major Device Implant.''
    <bullet> For peripheral rechargeable neurostimulator cases in MDC 
01: Reassign all full-system implant cases reported with ICD-9-CM 
procedure codes 04.92 and 86.97 or 86.98 to MS-DRG 040 and revise the 
title to ``Peripheral and Cranial Nerve and Other Nervous System 
Procedures with MCC or Major Device Implant.''
    Two commenters recommended device-dependent surgical DRGs for these 
cases. Several commenters also provided an alternative option to the 
recommendations listed above:
    <bullet> Assign all full-system spinal cord stimulator cases 
(rechargeable and non-rechargeable) in MDC 1 to MS-DRG 029.
    <bullet> Assign all full-system Spinal cord stimulator cases 
(rechargeable and non-rechargeable) in MDC 8 to MS-DRG 490.
    <bullet> Assign all full-system peripheral neurostimulator cases 
(rechargeable and non-rechargeable) in MDC 1 to MS-DRG 041.
    <bullet> Maintain the new-technology add-on payment for 
rechargeable neurostimulators for one additional year because of 
limited data.
    Response: We analyzed the FY 2006 MedPAR data for full system 
spinal and peripheral neurostimulators, both nonrechargeable and 
rechargeable, using the procedure codes listed above. We found that the 
majority of spinal neurostimulator cases in MDC 1 (113 cases) were 
assigned to MS-DRG 030. The majority of the peripheral neurostimulator 
cases (44 cases) were assigned to MS-DRG 042. The majority of the 
spinal neurostimulator cases (253 cases) in MDC 8 were assigned to MS-
DRG 491. The following table displays our results:

----------------------------------------------------------------------------------------------------------------
                                                                     Number of    Average length      Average
                             MS-DRG                                    cases          of stay         charges
----------------------------------------------------------------------------------------------------------------
                                                Spinal Procedures
----------------------------------------------------------------------------------------------------------------
MS-DRG 028--With MCC............................................           1,531           14.67      $88,392.05
MS-DRG 029--With CC.............................................           2,699            7.63       46,223.20
MS-DRG 030--Without MCC or CC...................................           3,540            3.67       27,081.14
----------------------------------------------------------------------------------------------------------------
                                             Spinal Neurostimulators
----------------------------------------------------------------------------------------------------------------
MS-DRG 028--With MCC............................................               7            2.57       81,208.14
MS-DRG 029--With CC.............................................              29            3.10       68,090.03
MS-DRG 030--Without MCC/CC......................................             113            1.81       57,399.84
----------------------------------------------------------------------------------------------------------------

    The average charges for the 113 spinal neurostimulator cases 
assigned to MS DRG 030 of approximately $57,400 are much higher than 
the average charges of approximately $27,081 for the overall charges in 
MS-DRG 030. The charges for these cases more closely approximate the 
charges for the other cases in the CC level, MS-DRG 029.

----------------------------------------------------------------------------------------------------------------
                                                                     Number of    Average length      Average
                             MS-DRG                                    cases          of stay         charges
----------------------------------------------------------------------------------------------------------------
                                     Peripheral and Cranial Nerve Procedures
----------------------------------------------------------------------------------------------------------------
MS--DRG 040-With MCC............................................           4,300           13.59      $64,354.13
MS-DRG 041--With CC.............................................           7,388            7.53       37,421.99
MS-DRG 042--Without MCC/CC......................................           5,112            3.65       30,600.18
----------------------------------------------------------------------------------------------------------------
                                           Peripheral Neurostimulators
----------------------------------------------------------------------------------------------------------------
MS-DRG 040--With MCC............................................              12            8.92       63,170.42
MS-DRG 041--With CC.............................................              24            4.96       45,118.04
MS-DRG 042--Without MCC/CC......................................              44            1.71       50,716.25
----------------------------------------------------------------------------------------------------------------


[[Page 47255]]

    The average charges for the 44 peripheral neurostimulator cases 
assigned to MS-DRG 042 of approximately $50,716 are much higher than 
the average charges of approximately $30,600 for the overall charges in 
MS-DRG 042. Further, they are even higher than the 24 MS-DRG 041 cases 
with a peripheral neurostimulator and a CC. The relationship between 
average charges for neurostimulator cases and the MS-DRG where they are 
assigned does not appear to be monotonic in this case. We believe the 
low volume of cases for this technology may explain this unusual 
pattern in average charges. One or a few cases with aberrant charges 
could potentially be skewing the data. Nevertheless, we do believe the 
data for the MS-DRG 042 peripheral neurostimulator cases does 
illustrate that their average charges should be reassigned to a higher 
severity level. Although average charges for peripheral neurostimulator 
cases without an MCC or CC appear to be midway between average charges 
for cases in MS-DRGs 040 and 041, we do not believe these cases should 
be assigned to the ``with MCC'' MS-DRG at this time. Before deciding 
whether further MS-DRG assignment is warranted, we prefer to have more 
data that demonstrates monotonicity in the average charges.

----------------------------------------------------------------------------------------------------------------
                                                                     Number of    Average length      Average
                         MS-DRG in MDC 8                               cases          of stay         charges
----------------------------------------------------------------------------------------------------------------
MS-DRG 490--All cases...........................................          17,493            5.13      $29,656.66
MS-DRG 490--Spinal neurostimulator cases........................              49            3.69       62,385.33
MS-DRG 491--All cases...........................................          57,496            2.27       17,788.59
MS-DRG 491--Spinal neurostimulator cases........................             253            1.62       56,238.72
----------------------------------------------------------------------------------------------------------------

    The average charges for the 253 spinal neurostimulator cases 
assigned to MS-DRG 491 in MDC 8 of approximately $56,239 are much 
higher than the average charges of approximately $17,789 for the 
overall charges in MS-DRG 491. The charges for these cases are also 
higher than the average charges of $29,656 for MS-DRG 490. We believe 
these cases should be assigned to MS-DRG 490 at this time.
    In this final rule with comment period, we are assigning full 
system spinal cord nonrechargeable and rechargeable neurostimulator 
cases in MS-DRG 030 to MS-DRG 029 in MDC 1. ICD 9 CM procedure codes 
03.93 and 86.94 or 86.95 or 86.97 or 86.98 must be reported in order 
for the spinal neurostimulator cases to be assigned to MS-DRG 029. We 
are defining MS-DRG 029 as ``Spinal Procedures with CC or 
Neurostimulator.'' The presence of a spinal procedure with CC or 
neurostimulator would assign the case to the second severity level.
    We are also assigning full system peripheral nonrechargeable and 
rechargeable neurostimulator cases in MS-DRG 042 to MS-DRG 041 in MDC 
1. ICD-9-CM procedure codes 04.92 and 86.94 or 86.95 or 86.97 or 86.98 
must be reported in order for the peripheral neurostimulator cases to 
be assigned to MS-DRG 041. We are defining MS-DRG 041 as ``Peripheral 
and Cranial Nerve and Other Nervous System Procedures with CC or 
Neurostimulator.'' The presence of a peripheral and cranial nerve 
procedure with CC or neurostimulator would assign the case to the 
second severity level.
    The full system spinal cord nonrechargeable and rechargeable 
neurostimulator cases in MS-DRG 491 are being assigned to MS-DRG 490. 
ICD-9-CM procedure codes 03.93 and 86.94 or 86.95 or 86.97 or 86.98 
must be reported in order for the spinal neurostimulator cases to be 
assigned to MS-DRG 490. We are defining MS-DRG 490 as ``Back and Neck 
Procedures Except Spinal Fusion with CC/MCC or Disc Devices or 
Neurostimulator.'' The presence of a back and neck except spinal fusion 
procedure with CC/MCC or disc devices or neurostimulator would assign 
the case to the second severity level.
    We refer readers to section II.J. of the preamble to this final 
rule with comment period for new technology discussions about 
rechargeable neurostimulators. We will continue to monitor these low 
volume full system neurostimulator cases for further refinements if 
warranted.
e. Stroke and Administration of Tissue Plasminogen Activator (tPA) (MDC 
1)
    In FY 2006, CMS created CMS DRG 559 (Acute Ischemic Stroke with Use 
of Thrombolytic Agent) by assigning diagnosis codes for embolic stroke 
codes plus procedure code 99.10 (Injection or infusion of thrombolytic 
agent) to this new CMS DRG. The coding content of CMS DRGs 14 
(Intracranial Hemorrhage or Cerebral Infarction) was not modified--
cases that included a diagnosis code for embolic stroke but the patient 
was not administered a thrombolytic agent continued to be assigned to 
this DRG. CMS DRG 15 (Nonspecific CVA and Precerebral Occlusion without 
Infarct) also remained unchanged. Under the new MS-DRGs, the former CMS 
DRG 559 will have three severity levels: MS-DRG 061 (Acute Ischemic 
Stroke with Use of Thrombolytic Agent with MCC), MS-DRG 062 (Acute 
Ischemic Stroke with Use of Thrombolytic Agent with CC), and MS-DRG 063 
(Acute Ischemic Stroke with Use of Thrombolytic Agent w/o CC/MCC).
    Comment: One commenter agreed with CMS' proposal to take the 
severity of a patient's illness into account when establishing payment 
rates. The commenter noted that severely ill or complex patients 
require more intensive evaluation, treatment, and monitoring, resulting 
in higher costs. The commenter added that it is logical to reimburse 
hospitals at a higher rate for those patients who require more care.
    However, the commenter expressed some concerns with the proposed 
payment rates for stroke patients with a CC or without a CC/MCC who are 
treated with tPA, noting that according to its calculations, 
reimbursement rates for MS-DRGs 062 and 063 will decrease. The 
commenter believed that this decrease could create a financial 
disincentive for hospitals if payment for MS-DRGs 062 and 063 fails to 
provide adequate reimbursement for those costs incurred by facilities 
that administer tPA.
    Response: The cost of treating patients with tPA continues to be 
represented in MS-DRGs 061, 062, and 063, but the cases have been 
distributed according to the presence of an MCC, or a CC, or the lack 
of either an MCC or CC in MS-DRG 063 according to the historical data 
represented by MedPAR. Medicare likely will continue to pay the same 
amount for all patients treated with tPA. However, our payments will 
better reflect patient severity of illness by paying higher amounts for 
those cases where the patient has an MCC or CC than if they do not.
    Comment: One commenter urged CMS to create a process that allows 
for periodic evaluation and updating of the MCC and CC lists, noting 
that CMS must

[[Page 47256]]

institute a process that allows for the addition of other conditions 
that create a special concern for one set of patients, including stroke 
patients, to the MCC and CC lists.
    Response: As described in section II.D.3. of this preamble, we 
reviewed more than 13,000 diagnosis codes in order to establish the MCC 
and CC lists. This review activity is an ongoing, annual process, as 
CMS has reviewed portions of the diagnosis codes every year with regard 
to placement on the CC list. The difference is that this year more than 
13,000 diagnosis codes were reviewed, and the designation has changed 
from simply ``CC'' to major comorbidity or complication (MCC) or 
comorbidity or complication (CC). We believe these lists to be 
comprehensive and we will continue to evaluate their content with 
regard to all patients.
    Comment: One commenter expressed concern about the so-called ``drip 
and ship'' cases where tPA is administered in the emergency department 
at Hospital A, but the patient is immediately transferred to Hospital 
B, which has a stroke center. The commenter pointed out that many 
community hospitals do not have the necessary resources, including 
neurology expertise, to care for the critically ill stroke patient. 
However, the commenter added, with the support of a nearby stroke 
center, they are able to diagnose ischemic stroke and institute 
reperfusion (tPA) treatment within the critical three hour window. The 
commenter stated that transfer after administration of tPA is required 
by the need to closely monitor patients after reperfusion treatment. 
Given the critical need to minimize brain damage by immediately 
administering the tPA when indicated, the commenter stated that the 
original hospital where the patient presented with stroke symptoms must 
not delay treatment until after the patient is transferred.
    When a patient is treated with reperfusion therapy in a local 
emergency department, but transferred and admitted to another hospital 
with the necessary stroke services, it is the understanding of the 
commenter that CMS' current policy, as implemented through the DRG 
GROUPER, requires that those cases be assigned to a stroke DRG that 
does not recognize the reperfusion therapy. The hospital to which the 
patient was ultimately admitted did not administer the reperfusion 
therapy, and the hospital which administered the thrombolytic drug did 
not admit the patient. The commenter noted that these patients are in 
the severely ill category and require the same high level of resources 
as any other patient who receives reperfusion therapy and who would 
normally be assigned to CMS DRG 559.
    The commenter made the following suggestion: ``When a patient has 
been started on reperfusion therapy [tPA] at another hospital, as an 
outpatient, and is transferred to a hospital with a stroke center, the 
case should be assigned to one of the ``stroke-with-thrombolytic agent 
DRGs'' (MS-DRGs 061, 062, or 063).
    Response: We previously considered this situation in 2005 when we 
created DRG 559 that separately distinguished stroke patients 
administered a thrombolytic agent. The commenter is suggesting that it 
is not the thrombolytic agent itself that raises the hospital's costs 
(although in our view, it is certainly an element of higher costs) but 
all of the other services that are provided by the receiving hospital 
to such a patient. Although we recognize the concerns of the commenter, 
the emergency room is already being compensated for the administration 
of the tPA. Therefore, we do not believe it would be appropriate for 
Medicare to pay for the same service at another facility.
f. Gliasite [supreg] Radiation Therapy System (RTS) (MDC 1)
    Comment: One commenter, the manufacturer of Gliasite [reg] 
Radiation Therapy System (RTS), wrote that this technology is used in 
the treatment of malignant brain cancer. The commenter indicated that 
patients who undergo this treatment require two admissions. The first 
admission includes tumor debulking and a special catheter is implanted. 
The following ICD-9-CM procedures are assigned to report the procedures 
performed: Code 01.59 (Other excision or destruction of lesion or 
tissue of brain) and code 01.27 (Insertion of catheter(s) into cranial 
cavity or tissue). Under the proposed MS-DRGs, the case for this 
admission with a principal diagnosis of glioblastoma and procedure 
codes 01.59 and 01.27 would be assigned to MS-DRGs 26 and 27 
(Craniotomy and Endovascular Intracranial Procedures with and without 
MCC/CC, respectively).
    The commenter added that the second admission usually occurs in a 
week or 10 days and entails liquid radioisotope infused into the 
special catheter. The patient is monitored for a few days and then the 
radioisotope is removed. ICD-9-CM procedure code 92.20 (Infusion of 
liquid brachytherapy radioisotope) and code 01.27 (Removal of 
catheter(s) from cranial cavity or tissue) would be assigned to 
identify the procedures performed in the second admission. Under the 
proposed MS-DRGs, for the second admission, the case with a principal 
diagnosis of glioblastoma and procedure codes 92.20 and 01.27 would be 
assigned to medical MS-DRGs 54 and 55 (Nervous System Neoplasm with and 
without MCC, respectively).
    The commenter requested that CMS recognize the resources associated 
with infusion of radioisotope and establish two new surgical MS-DRGs 
for these admissions/treatments:
    <bullet> Liquid radiotherapy infusion for glioblastoma without 
tumor debulking.
    <bullet> Liquid radiotherapy infusion for glioblastoma with 
craniotomy, tumor debulking, and implantation of infusion catheter.
    The commenter stated that the costs of the implant can be 
considered equivalent to the cost of an MCC and should be recognized in 
a surgical MS-DRG descriptor.
    Response: The refinement of the DRGs is not based on the creation 
of any new logic under the MS-DRGs. We believe that it is not 
appropriate to make DRG revisions of this nature as part of the final 
rule since the base DRG has not changed for these cases. However, we 
will examine the need for further DRG refinements as we gain experience 
under the MS DRGs.
g. Noninvasive Ventilation (MDC 4)
    Comment: One commenter representing a national association 
requested the creation of a new DRG for noninvasive positive pressure 
ventilation (NPPV). According to the commenter, NPPV is an effective 
and preferred treatment in the management of patients with acute 
exacerbations of chronic obstructive pulmonary disease and other forms 
of respiratory failure.
    Currently, this treatment is identified in ICD-9-CM by procedure 
code 93.90 (Continuous positive airway pressure (CPAP)) and does not 
require the use of mechanical ventilation via an endotracheal tube or 
tracheotomy. The commenter indicated that NPPV is a valuable and 
clinically appropriate option for patients who may require short term 
(<96 hours) ventilatory support when presenting with an acute 
respiratory failure condition. The commenter noted that results have 
demonstrated improved outcomes and less risk associated with less 
invasive devices. Therefore, the commenter stated, the selection of 
treatment for ventilatory support does not solely rely on patient 
acuity. To better recognize NPPV as an appropriate treatment in acute 
respiratory conditions and ensure proper reimbursement, the commenter 
also proposed that CMS consider

[[Page 47257]]

including NPPV (code 93.90) in proposed MS-DRG 207 (Respiratory System 
Diagnosis with Ventilatory Support 96+hours) if the creation of a new 
MS-DRG was not a viable option.
    Response: We met with the commenter on June 13, 2007, regarding the 
above requests to create a new MS-DRG for patients who receive NPPV or 
reassign cases to a different MS-DRG. After discussing the clinical and 
coding issues surrounding NPPV, we advised the commenter to request a 
new procedure code to distinguish between the various treatments that 
are currently included in code 93.90. We informed the commenter about 
the ICD-9-CM Coordination and Maintenance Committee and the process for 
requesting a new procedure code.
h. Heart Assist Devices (MDC 5)
    Comment: One commenter requested that CMS create an additional 
severity level in MS-DRG 215 that would be titled ``Other Heart Assist 
Implant without Major Complications.'' The commenter indicated that CMS 
should have a consistent number of severity levels between this MS-DRG 
and MS-DRGs 001 or 002 (Heart Transplant or Implant of Heart Assist 
System with MCC or without MCC, respectively). In the proposed rule, 
MS-DRG 215 (formerly CMS DRG 525, and still titled ``Other Heart Assist 
System Implant'') had no severity levels. The commenter stated that, by 
capturing the severity of the cases with devices coded to 37.65 
(Implant of external heart assist system), hospitals will be more 
appropriately reimbursed and CMS will be consistent in its policy.
    The commenter added that without a severity breakdown in MS-DRG 
215, it feared the integrity of the MS-DRG will be distorted, causing 
an unwarranted financial windfall for some cases. The commenter 
indicated that Medicare will be overpaying less severe cases and 
underpaying cases with major complications if MS-DRG 215 is not 
subdivided into with MCC and without MCC severity levels.
    Response: We reviewed the following data specifically in light of 
this comment. Our findings are represented in the table below.

----------------------------------------------------------------------------------------------------------------
                                                                     Number of    Average length      Average
                             MS-DRG                                    cases          of stay         charges
----------------------------------------------------------------------------------------------------------------
MS-DRG 215--All cases...........................................             142           11.32     $204,885.12
MS-DRG 215--Cases with insertion of nonimplantable heart assist               63           10.95      134,669.43
 system (code 37.62)............................................
MS-DRG 215--Cases with repaid heart assist and system (code                   29           14.07      225,962.07
 37.63).........................................................
MS-DRG 215--Cases with implant of external heart assist (VAD)                 59           11.80      286,953.90
 (code 37.65)...................................................
----------------------------------------------------------------------------------------------------------------

    In the proposed rule (72 FR 24705), we explained that we developed 
a set of criteria to facilitate the decision-making process surrounding 
the subdivision of a DRG into subgroups based on the presence of a CC 
or MCC. We specified that in order to warrant creation of a CC or MCC 
subgroup within a base MS-DRG, the subgroup had to meet all of the five 
criteria listed. One of the criteria was that the subgroup contained at 
least 500 cases. In this instance, there are only 142 cases in the 
MedPAR data. Therefore, there are too few cases to warrant a 
subdivision of the base DRG into severity levels. We will continue to 
monitor this DRG, and should future data prove that a subdivision of 
MS-DRG 215 is warranted, we will consider revision of its structure.
i. Automatic Implantable Cardioverter-Defibrillators (ACID) Lead and 
Generator Procedures (MDC 5)
    Comment: One commenter commended CMS for creating a separate, stand 
alone DRG for automatic implantable cardioverter-defibrillator (AICD) 
generator replacements and defibrillator lead replacements. The new DRG 
is MS-DRG 245 (AICD lead and generator procedures). The MS-DRG contains 
the following codes:
    <bullet> 00.52, Implantation or replacement of transvenous lead 
[electrode] into left ventricular coronary venous system.
    <bullet> 00.54, Implantation or replacement of cardiac 
resynchronization defibrillator pulse generator device only [CRT-D].
    <bullet> 37.95, Implantation of automatic cardioverter/
defibrillator leads(s) only.
    <bullet> 37.96, Implantation of automatic cardioverter/
defibrillator pulse generator only.
    <bullet> 37.97, Replacement of automatic cardioverter/defibrillator 
leads(s) only.
    <bullet> 37.98, Replacement of automatic cardioverter/defibrillator 
pulse generator only.
    The commenter indicated that under the current CMS DRGs, the 
defibrillator generator and defibrillator lead replacements were 
included in DRG 551 with pacemaker implants. The commenter supported 
this new MS-DRG, which recognizes the distinct differences in resource 
utilization between pacemaker and defibrillator generators and leads. 
The commenter stated that CMS should consider additional refinements 
for the defibrillator generator and leads. In reviewing the 
standardized charges for the AICD leads, the commenter believed that 
the leads may be more appropriately assigned to another DRG such as MS-
DRG 243 (Permanent Cardiac Pacemaker Implant with CC) or MS-DRG 258 
(Cardiac Pacemaker Device Replacement with MCC). The commenter 
recommended that CMS consider moving the defibrillator leads back into 
a pacemaker DRG, either MS-DRG 243 or MS-DRG 258.
    Response: We appreciate the commenter's support for the refinements 
made through the MS-DRGs to better identify differences in patient care 
costs associated with pacemakers and defibrillators. In our view, the 
data support separate DRGs for these very different devices. The 
commenter supported the proposed DRG change we made that removed both 
the defibrillator generators and leads from the pacemaker MS DRG and 
then recommended that we move the defibrillator leads only back into a 
pacemaker DRG. The commenter, as stated, had supported this change 
because the commenter believed that it better identified devices that 
were quite different. We proposed separating defibrillator and 
pacemaker devices because they are such different devices. Moving the 
defibrillator leads back into a pacemaker MS-DRG defeats the purpose of 
creating separate MS-DRGs for defibrillators and pacemakers. Therefore, 
we are finalizing MS DRG 245 as proposed with the leads and generator 
codes listed above.
j. Artificial Heart (MDC 5)
    Comment: One commenter requested that ICD-9-CM code 37.52 
(Implantation of total replacement heart system) [which includes 
artificial heart] be moved from CMS DRG 525 (Other Heart Assist System 
Implant) to CMS DRG 103 (Heart Transplant or Implant of Heart Assist 
System). These CMS DRGs would be renumbered and renamed in the proposed 
MS-DRG system, with CMS DRG 525 becoming

[[Page 47258]]

MS-DRG 215 (Other Heart Assist System Implant) and CMS DRG 103 becoming 
MS-DRGs 001 (Heart Transplant or Implant of Heart Assist System with 
MCC) and 002 (Heart Transplant or Implant of Heart Assist System 
without MCC). The commenter stated that the change of MS-DRG assignment 
from MS-DRG 215 to MS-DRGs 001 or 002 will more accurately reflect the 
grouping of procedures for the implantation of a total replacement 
heart system with heart transplantation and other heart assist systems 
intended as destination therapy to more accurately recognize hospital 
resources for the treatment of end-stage heart failure. We received a 
similar comment from another manufacturer.
    Response: Medicare does not currently cover artificial heart 
implants. ICD-9-CM procedure code 37.52 (Implantation of total 
replacement heart system) was created for potential use for discharges 
on or after October 1, 2003. However, code 37.52 was immediately put on 
the noncovered procedure list of the MCE as no device then existed that 
was deemed safe and effective as an artificial heart. The technology 
remains noncovered by Medicare. For this reason, we currently have no 
data to suggest that the DRG assignment for procedure code 37.52 needs 
to be changed.
    Our review of the second manufacturer's product shows it to be a 
bi-ventricular device, not an artificial heart as described in their 
marketing literature. This commenter also is currently in the process 
of requesting coverage for its device. We recommend that the 
manufacturer of this device request to be added to the agenda of the 
ICD-9-CM Coordination and Maintenance Committee meeting of September 
27, 2007. An ICD-9-CM procedure code will help us to determine whether 
a Medicare patient treated with this new technology should be assigned 
to a DRG other than the one that includes the predecessor code used to 
describe the service.
    Comment: One commenter suggested that CMS reevaluate the 
appropriateness of including ICD-9-CM procedure code 37.62 (Insertion 
of nonimplantable heart assist system) in CMS DRG 525 (Other Heart 
Assist System Implant), which will become MS-DRG 215 (Other Heart 
Assist System Implant), and reassign code 37.62 to more accurately 
reflect hospital resource consumption of services involving mechanical 
support for cardiovascular failure. The commenter suggested that 
patients treated with a nonimplantable heart assist system are less 
costly than other patients in MS-DRG 215 and should be reassigned to a 
different DRG that would reflect its lower costs. Further, the 
commenter suggested that hospitals may not be using code 37.62 
consistent with its intended purpose.
    Response: The commenter has not provided a compelling justification 
for changing the placement of code 37.62. Our understanding is that 
this code describes use of a nonimplantable heart assist system to 
temporarily replace the heart's function. The function of the device to 
replace the heart means that there are only three potential MS-DRGs 
where code 37.62 could be assigned: MS-DRG 215 (Other Heart Assist 
System Implant) and MS-DRGs 001 and 002 (Heart Transplant or Implant of 
Heart Assist System with and without MCC, respectively). The commenter 
suggested that the code should be assigned to a lower paying MS-DRG 
than MS-DRG 215. However, the only other MS-DRGs to which the code 
could be assigned have even higher payment weights. Therefore, we are 
making no changes to the DRG assignment for code 37.62 for FY 2008. 
Although the commenter suggested potential problems with use of the 
code, the commenter did not suggest any potential solutions for how to 
address this problem. Therefore, we have no information upon which to 
take further action to address the commenter's concern.
k. Vascular Procedures (MDC 5)
    We proposed three MS-DRGs for vascular procedures: MS-DRG 252 
(Other Vascular Procedures with MCC), MS-DRG 253 (Other Vascular 
Procedures with CC) and MS-DRG 254 (Other Vascular Procedures without 
CC/MCC).
    Comment: One commenter evaluated the diagnoses associated with MS-
DRGs 252, 253, and 254 to assess whether patients with diagnoses not on 
the CC or MCC lists were more costly to treat. The commenter selected 
the following 30 diagnosis codes:

 
 
 
250.70, Diabetes with peripheral circulatory disorders, type II or
 unspecified type, not stated as uncontrolled.
263.9, Unspecified protein-calorie malnutrition.
276.1, Hyposmolality and/or hyponatremia.
276.2, Acidosis.
276.51, Dehydration.
276.7, Hyperpotassemia.
276.8, Hypopotassemia.
280.0, Secondary to blood loss (chronic).
285.1, Acute posthemorrhagic anemia.
287.5, Thrombocytopenia, unspecified.
410.71, Subendocardial infarction, initial episode of care.
427.1, Paroxysmal ventricular tachycardia.
427.31, Atrial fibrillation.
440.1, Atherosclerosis of renal artery.
440.24, Atherosclerosis of the extremities with gangrene.
444.22, Arterial embolism and thrombosis, lower extremity.
458.9, Hypotension, unspecified.
491.21, Obstructive chronic bronchitis with (acute) exacerbation.
496, Chronic airway obstruction, not elsewhere classified.
511.9, Unspecified pleural effusion.
518.0, Pulmonary collapse.
599.0, Urinary tract infection, site not specified.
682.6, Other cellulitis and abscess, leg, except foot.
682.7, Other cellulitis and abscess, foot, except toes.
707.15, Ulcer of other part of foot.
785.4, Gangrene.
790.7, Bacteremia.
996.62, Infection and inflammatory reaction due to vascular device,
 implant and graft.
997.1, Cardiac complications.
998.11, Hemorrhage complicating a procedure.
 


[[Page 47259]]

    The commenter recommended that CMS should:
    <bullet> Reassign vascular procedure cases containing two or more 
of the identified diagnosis codes from MS-DRG 253 to MS-DRG 252.
    <bullet> Reassign vascular procedure cases containing two or more 
of the identified diagnosis codes from MS-DRG 254 to MS-DRG 253.
    Response: In our proposed rule analysis, we found that the vascular 
procedures DRG warranted three subdivisions according to our five 
criteria. Nineteen of the 30 diagnosis codes suggested by the commenter 
already appear on the CC or MCC list and will result in a patient being 
assigned to either MS-DRG 252 or MS-DRG 253. The remaining 11 diagnosis 
codes do not appear on either list. These codes are: 250.70, 276.51, 
276.7, 276.8, 280.0, 287.5, 427.31, 440.1, 458.9, 496, and 707.15.
    Although the commenter has identified common diagnoses in this 
patient population, our medical advisors reviewed the clinical issues 
and claims data for cases reporting each of the conditions not on the 
MCC or CC list as a secondary diagnosis. After evaluating the claims 
data and analyzing the clinical issues, our medical advisors recommend 
that we not change the CC status for the codes mentioned above. They do 
not believe there is sufficient justification for making these codes 
CCs. We do not believe that we should make further changes to the MS-
DRG assignments based on combinations of selected diagnoses. These 
types of analyses could be done with virtually any MS-DRG and would add 
significant complexity to the DRG system that we do not believe is 
warranted at this time. We reiterate that the MS-DRGs--like the 
predecessor CMS-DRGs--are intended to establish an average payment 
based on groups of patients that are similar in costs and clinical 
characteristics. Over time, we found that the CMS DRGs did not 
sufficiently recognize differences in patient severity of illness, and 
we proposed to adopt the MS-DRGs as an alternative to achieve this 
objective. While we acknowledge that further potential improvements may 
be warranted as we have more experience with the new system, we have 
significant concerns about selectively analyzing specific diagnoses 
within a given MS-DRG to change their DRG assignment. Although we have 
increased the assigned severity level for a limited number of cases, 
these decisions recognize that the patient was more complex than was 
suggested by their secondary diagnosis either because of a specific 
procedure (in the case of intestinal transplants) or the type of 
technology used to treat their condition (in the case of cochlear 
implants and spinal stabilization devices).
    We refer readers to section II.D.2.a. of this preamble for complete 
information on the CC list.
l. Coronary Artery Stents (MDC 5)
    Effective for cases discharged on or after October 1, 2005 (FY 
2006), the ICD-9-CM Coordination and Maintenance Committee created a 
series of adjunct codes further describing procedures on the vascular 
system. These codes were at the 00.4 subcategory (Adjunct vascular 
system procedures), with codes 00.40 through 00.43 describing the 
number of vessels upon which a procedure was performed, and codes 00.45 
through 00.48 describing the number of stents which were inserted. As 
these codes were deemed to be adjunct codes that supplemented the 
information describing a patient's hospital treatment, they were not 
considered procedure codes that would affect DRG assignment. However, 
coders were encouraged to thoroughly and completely code all hospital 
stays, in case this information would be used for future DRG 
determination. We received comments on the proposed MS-DRGs concerning 
the DRG assignment for procedures on multiple coronary vessels and 
insertion of multiple stents in coronary arteries.
    Comment: Commenters have analyzed standardized charges in the FY 
2006 MedPAR data for percutaneous transluminal coronary angioplasty 
(PTCA) in conjunction with codes indicating insertion of drug-eluting 
or non-drug-eluting coronary artery stent(s) and the use of codes 
indicating procedures on multiple vessels and/or insertion of multiple 
stents. These commenters believe that mean standardized charges for 
these combination codes vary substantially from the mean standardized 
charges associated with the DRGs to which they are proposed to be 
assigned. The DRGs under consideration in this section for drug-eluting 
stents are MS-DRG 246 (Percutaneous Cardiovascular Procedure with Drug-
Eluting Stent with MCC) (formerly CMS DRG 557 (Percutaneous 
Cardiovascular Procedure with Drug-Eluting Stent with Major 
Cardiovascular Diagnosis)) and MS-DRG 247 (Percutaneous Cardiovascular 
Procedure with Drug-Eluting Stent without MCC) (formerly CMS DRG 558 
(Percutaneous Cardiovascular Procedure with Drug-Eluting Stent without 
Major Cardiovascular Diagnosis)). The DRGs under consideration in this 
section for non-drug-eluting stents are MS-DRG 248 (Percutaneous 
Cardiovascular Procedure with Non-Drug-Eluting Stent with MCC) and MS-
DRG 249 (Percutaneous Cardiovascular Procedure with Non-Drug-Eluting 
Stent with MCC). (These were either formerly CMS DRG 555 (Percutaneous 
Cardiovascular Procedures with Major Cardiovascular Diagnosis) or CMS 
DRG 556 (Percutaneous Cardiovascular Procedure with Non-Drug-Eluting 
Stent without Major Cardiovascular Diagnosis), respectively.)
    The commenters recommended that PTCA code 00.66 (Percutaneous 
transluminal coronary angioplasty [PTCA] or coronary atherectomy) in 
combination with a code for insertion of a drug-eluting or non-drug-
eluting stent, plus adjunct codes indicating procedures on multiple 
vessels and insertion of multiple stents be assigned to MS-DRGs 246 and 
248 as described above. They stated that their analysis of standardized 
charges for PTCA with insertion of a drug-eluting or non-drug-eluting 
stent(s) in multiple vessels or with insertion of multiple stents vary 
substantially from the mean standardized charges associated with the 
DRGs to which they are proposed to be assigned. The commenters found 
that the variation in charges between the subgroups and the overall DRG 
average meet CMS' criteria for moving cases between DRGs, and suggested 
that cases with multiple vessels and multiple stents be moved up to the 
first DRG in the series. That is, cases with insertion of drug-eluting 
stents in MS-DRG 247 would be assigned to MS-DRG 246, and cases with 
non-drug-eluting stents in MS-DRG 249 would be assigned to MS-DRG 248. 
In each of the MS-DRGs, cases where multiple vessels are treated or 
multiple stents are placed would be assigned to the ``with MCC'' MS-DRG 
rather than the ``without MCC'' MS-DRG.
    Response: We reviewed the MedPAR data in response to these comments 
and found that PTCAs with four or more vessels or four or more stents 
were more comparable in average charges to the higher weighted DRG in 
the group. These data are summarized in the following tables.

[[Page 47260]]



----------------------------------------------------------------------------------------------------------------
                                                                     Number of    Average length      Average
                             MS-DRG                                    cases          of stay         charges
----------------------------------------------------------------------------------------------------------------
MS-DRG 246--All cases...........................................          31,204            6.34      $64,009.36
MS-DRG 246--Cases with codes 00.66 and 36.07 with 4 or more                1,425            5.68        78,02.93
 vessels (code 00.43) and 4 or more stents (code 000.48)........
MS-DRG 247--All cases...........................................         267,684            2.24       40,857.34
MS-DRG 247--Cases with codes 00.66 and 36.07 with 4 or more                8,095            2.33       61,666.34
 vessels (code 00.43) and 4 or more stents (code 000.48)........
MS-DRG 248--All cases...........................................           4,710            6.53       56,671.61
MS-DRG 248--Cases with codes 00.66 and 36.06 with 4 or more                  112            6.38       69,431.81
 vessels (code 00.43) and 4 or more stents (code 000.48)........
MS-DRG 249--All cases...........................................          27,914            2.55       35,577.22
MS-DRG 249--Cases with codes 00.66 and 36.06 with 4 or more                  232            3.76       54,203.87
 vessels (code 00.43) and 4 or more stents (code 000.48)........
----------------------------------------------------------------------------------------------------------------

    In both cases, we believe that the average charges for cases where 
four or more vessels are treated or four or more stents are placed more 
closely approximate average charges in the higher weighted MS-DRG. 
Therefore, we are assigning these cases to the higher weighted MS-DRG 
according to the following logic.
    Claims containing code 00.66 for PTCA, and code 36.07 (Insertion of 
drug-eluting coronary artery stent(s)), and code 00.43 (Procedure on 
four or more vessels) or code 00.48 (Insertion of four or more vascular 
stents) are assigned to MS-DRG 246. In addition, claims containing code 
00.66 for PTCA, and code 36.06 (Insertion of non-drug-eluting coronary 
artery stent(s)), and code 00.43 or code 00.48 are assigned to MS-DRG 
248.
    We are also making conforming changes to the MS-DRG titles as 
follows: MS-DRG 246 is titled ``Percutaneous Cardiovascular Procedures 
with Drug-Eluting Stent(s) with MCC or 4 or more Vessels/Stents''. The 
title for MS-DRG 247 will remain unchanged. MS-DRG 248 is titled 
``Percutaneous Cardiovascular Procedures with Non Drug-Eluting Stent(s) 
with MCC or 4 or more Vessels/Stents''. The title for MS-DRG 249 will 
remain unchanged. This DRG modification is based on newly created codes 
that were developed to provide additional detail on the number of 
vessels treated and the number of stents inserted. The DRG combines two 
distinct concepts: the insertion of four or more stents or the 
performance of a vascular procedure on four or more vessels, in order 
to determine the DRG assignment. Although we are adopting this DRG 
change for FY 2008, we plan to continue examining whether this revision 
of the DRG definition captures a relatively homogeneous group of cases. 
We currently only have one year of data on these new codes. Therefore, 
we plan to revisit this issue further in next year's proposed rule when 
we have a second year of data to better distinguish the different types 
of cases that are treated with this technology.
m. Endovascular Repair of Aortic and Thoracic Aneurysms (MDC 5)
    Comment: Several commenters expressed concern that the relative 
weights for MS-DRGs 237 and 238 (Major Cardiovascular Procedures with 
MCC and without MCC, respectively), formerly CMS-DRGs 110 and 111 
(Major Cardiovascular Procedures with CC and without CC, respectively) 
do not reflect the severity of illness and the resource use required 
for such complex care. One commenter noted that regardless of the DRG 
assignment, the cost of the endovascular graft or device does not 
change, nor is it insignificant. The commenter further stated that MS-
DRGs 237 and 238 do not adequately factor into the relative weights 
that the device is not incidental to treatment; it is a major component 
of the treatment.
    Response: New MS-DRGs 237 and 238 are exactly the same as their 
predecessor CMS DRGs 110 and 111 in content. Using historic Medicare 
charges and hospital cost report data submitted to us by hospitals, we 
have included the cost of the device into the MS-DRG relative weights.
    Comment: Several commenters suggested that MS-DRGs 237 and 238 
should be divided into three levels of severity: ``with MCC'', ``with 
CC'', and ``without CC/MCC'' and noted that it is important that CMS be 
consistent and not create inequities with regard to major surgical 
procedures. One commenter stated that patients with aortic aneurysm 
fall naturally into three clinical categories, with patients who are 
genetically predisposed to an aneurysm are likely to be younger 
(between 50 and 60 years of age, not between 70 and 80 years of age) 
and are more likely to be healthier than the typical aneurysm patient. 
Those cases are suggested for an MS-DRG without CC/MCC. The commenter 
added that the other cases would fall into the ``with MCC'' or ``with 
CC'' MS-DRGs based on the severity of their CCs.
    Response: When we consolidated all existing DRGs into the base 
DRGs, we removed all demarcations that had been added over the years, 
including considerations for age, gender, and discharge disposition, as 
well as elimination of the current split based on the presence or 
absence of a CC, burns, trauma, AMI, major cardiovascular condition, 
among others. We then applied the severity criteria described elsewhere 
in this preamble, and stated that in order to warrant creation of a CC 
or major CC subgroup within a base MS-DRG, the subgroup had to meet all 
five criteria. The commenter states that genetically predisposed 
patients tend to be younger. Although age is a variable that would be 
available in the Medicare claims data, genetic predisposition to a 
certain class of diseases generally cannot be identified in the ICD-9-
CM coding system. Therefore, as we are not able to identify those 
patients, we cannot subdivide these MS-DRGs using genetic 
predisposition as criterion.
    We considered subdividing MS-DRGs 237 and 238 into three DRGs for 
the proposed rule. However, MS-DRGs 237 and 238 did not meet the 
criteria for a 3-way split.
    Comment: Two commenters suggested that instead of ``with MCC'' in 
the surgical DRGs, CMS should establish a list of devices that would be 
equivalent to the MCC categorization and further subdivide the MS-DRGs 
based on the presence of ``with Major Device.'' Specifically, they 
suggested that endovascular devices or grafts used during 
cardiovascular procedures should be considered major devices. 
Therefore, they added, when a major device or implantable graft is used 
in a cardiovascular repair procedure, such as those performed to repair 
an abdominal or thoracic aortic aneurysm, CMS should assign those cases 
to MS-DRGs where the DRG title has been changed to reflect that the 
costs of the device are similar to the costs of an MCC.

[[Page 47261]]

    Response: We believe the commenter is suggesting that we establish 
a list of major devices and use them as a proxy for MCCs. We will take 
this suggestion under consideration in future reviews of the MS-DRGs.
    We looked at data to review the differences between endovascular 
graft repair of abdominal aortic aneurysm (code 39.71) and endovascular 
graft repair of thoracic aortic aneurysm (code 39.73). Our findings are 
represented in the table below.

----------------------------------------------------------------------------------------------------------------
                                                                     Number of    Average length      Average
                             MS-DRG                                    cases          of stay         charges
----------------------------------------------------------------------------------------------------------------
MS-DRG 237--All cases...........................................          20,789           11.47      $93,824.52
MS-DRG 237--Cases with code 39.71 (abdominal)...................           1,484            8.95       89,929.39
MS-DRG 237--ases with code 39.73 (thoracic).....................             277           10.98      119,120.51
MS-DRG 238--All cases...........................................          42,797            4.88       51,410.12
MS-DRG 238--Cases with code 39.71 (abdominal)...................          14,091            2.58       55,798.25
MS-DRG 238--Cases with code 39.73 (thoracic)....................             877            4.95       72,426.29
----------------------------------------------------------------------------------------------------------------

    Review of these data shows that the 887 thoracic cases in MS-DRG 
238 have average charges that are between both groups. We believe that 
the data indicate that endovascular repair of the thoracic aorta cases 
should be assigned to MS-DRG 237.
    Therefore, we are assigning procedure code 39.73 (Endovascular 
implantation of graft in thoracic aorta) to MS-DRG 237 in FY 2008.
n. O.R. Procedures for Obesity (MDC 10)
    Comment: One commenter was concerned with the conditions that are 
classified as MCCs and CCs for MS-DRGs 619, 620, 621 (O.R. Procedures 
for Obesity with MCC, with CC, and without CC/MCC, respectively), 
previously CMS DRG 288. The commenter fully supported efforts to base 
payments on patient severity, but states that some of the proposed 
changes do not appear to achieve that goal. The commenter acknowledged 
the three severity levels added to former CMS DRG 288 (O.R. Procedures 
for Obesity). However, the commenter stated that all of the morbidly 
obese Medicare patients will have one or more serious comorbidities. 
The commenter was concerned about the application of the complete MCC 
and CC list to MS-DRGs 619, 620, and 621. The commenter stated that the 
following codes, which are on the MCC and CC lists, should not be 
considered MCCs or CCs for these bariatric DRGs because these 
conditions are ``contraindications'' to performing bariatric surgery:
    <bullet> Diabetes codes 250.10 through 250.13; 250.20 through 
250.23; and 250.30 through 250.33 (all MCCs).
    <bullet> Coronary atherosclerosis codes 414.02 through 414.04; and 
414.06 and 414.07 (all CCs).
    <bullet> Aneurysm and dissection of heart codes 414.10 (CC), 414.12 
(MCC), and 414.19 (CC).
    The commenter also requested that the following codes be classified 
as CCs for these bariatric DRGs:
    <bullet> Diabetes codes--250.00 through 250.93.
    <bullet> Obstructive sleep apnea--327.23.
    <bullet> Hypertensive disease--401.0 through 405.99.
    <bullet> Cirrhosis of liver without mention of alcohol--571.5.
    <bullet> Biliary cirrhosis--571.6.
    <bullet> Other chronic nonalcoholic liver disease--571.8.
    <bullet> Unspecified chronic liver disease without mention of 
alcohol--571.9.
    Response: Our clinical advisors disagree with the recommendations 
to change the diabetes, coronary atherosclerosis, and aneurysm and 
dissection codes from MCCs and CCs to non-CCs for the bariatric MS-
DRGs. They believe these conditions represent significant CCs in the 
general patient population and the data we used to perform this 
analysis support their judgment. Although we do have secondary 
diagnosis codes that are ``exclusions'' (not counted as an MCC or a CC 
if they are related to the principal diagnosis), we have not analyzed 
whether to classify a particular diagnosis as an MCC or a CC for 
purposes of determining if a particular type of surgery should be 
performed. However, we believe the commenter indicates that our 
decision to classify these conditions as MCCs or CCs is correct by 
suggesting that the presence of these conditions is so significant in 
increasing severity of illness that it is a contraindication to 
surgery. We expect that physicians will not order surgical procedures 
that are contraindicated merely because the case would be assigned to a 
higher-paying DRG.
    Our medical advisors evaluated the request to make the codes 
specified above CCs. Our medical advisors reviewed claims data and 
clinical issues for cases reporting codes 250.00 through 250.93; 
327.23; 401.0 through 405.99; and 571.5 as secondary diagnoses. After 
evaluating the claims data and analyzing the clinical issues, our 
medical advisors recommend that we not change the CC status for codes 
250.00 through 250.93; 327.23; 401.0 through 405.99; and 571.5. They do 
not believe there is sufficient justification for making these codes 
CCs at this time.
o. Penile Restorative Procedures (MDC 12)
    Comment: One commenter, a national organization representing the 
prosthetic urology community applauded CMS for moving forward to ensure 
that Medicare payments for inpatient services are appropriate and 
accurately reflect the severity and resources required for patient 
care. The commenter supported the proposal to implement MS-DRGs on 
October 1, 2007. However, the commenter indicated that the cost of 
implants and prosthetics used in penile implant procedures are 
comparable to the resources utilized in a patient with a MCC or CC 
diagnosis. Generally, the commenter suggested that in surgical MS-DRGs 
where implants and prostheses are part of the ICD-9-CM procedure code 
title that CMS should consider revising the MS-DRG titles to account 
for the costs associated with surgical procedures that use an implant 
or prosthesis. As an example, the commenter expressed support for the 
proposed modification to MS-DRG 129 (Major Head and Neck Procedure with 
CC/MCC or Major Device). The commenter believed that, when a major 
implant/prosthesis/device demonstrates costs that are greater than or 
similar to the difference between the relative weights of a CC/MCC DRG 
versus a without CC/MCC DRG pair, CMS should recognize the device or 
implant in the MS-DRG titles and reassign these cases. Specifically, 
the commenter recommended that the title for proposed MS-DRG 709 (Penis 
Procedures with CC or MCC) be revised to add the phrase ``or major 
device or implant'' and include all cases where an implantable 
prosthesis is used in a penile restorative procedure.
    Response: We appreciate the commenter's support for MS-DRGs and

[[Page 47262]]

its general suggestions for future refinements. The commenter did not 
provide specific examples of types of implants and prosthesis which 
they want to have evaluated for possible DRG reassignment. We are not 
clear as to whether or not there will be ICD- 9-CM procedure codes for 
these specific implants. It is premature to modify the MS-DRG titles at 
this time without more specific information and analysis.
    Comment: This same commenter also urged CMS to review clinically 
significant conditions for penile restorative procedures on the 
proposed MCC and CC lists.
    Response: We refer readers to section II.D.3. of this final rule 
with comment period for a complete discussion on the public comments 
received on the MCC and CC lists. We welcome any specific 
recommendations for future revisions and refinements to the MCC and CC 
lists.
p. Female Reproductive System Reconstruction Procedures (MDC 13)
    Comment: Two commenters requested that CMS establish levels within 
MS-DRG 748 (Female Reproductive System Reconstruction Procedures). The 
commenters noted that all of the other proposed MS-DRGs for surgical 
male and female reproductive system procedures have either ``MCC or 
CC'' subdivisions. The commenters believed that CMS may have made an 
oversight by not establishing severity levels within this MS-DRG.
    Response: As stated in the FY 2008 proposed rule, in order to 
warrant creation of a CC or MCC subgroup within a base MS-DRG, the 
subgroup has to meet all five criteria. In developing the proposed MS-
DRGs, this base DRG did not meet three of the five criteria required to 
subdivide a DRG into additional severity subgroups. MS-DRG 748 failed 
the following three criteria:
    <bullet> At least 5 percent of the patients in the MS-DRG fall 
within the MCC or CC subgroup.
    <bullet> At least 500 cases are in the MCC or CC subgroup.
    <bullet> There is a $4,000 difference in average charge between 
subgroups.
    We refer readers to section II.D.3 of the FY 2008 proposed rule (72 
FR 24705) for a complete listing of the criteria.
    As such, effective October 1, 2007, we are adopting the MS-DRGs as 
final policy and MS-DRG 748 will remain as proposed with the following 
title: MS-DRG 748 (Female Reproductive System Reconstruction 
Procedures).
q. Urological and Gynecological Disorders With Grafts or Prosthesis 
(MDCs 13 and 14)
    Comment: We received comments commending CMS for the creation of 
new ICD-9-CM procedure codes that identify the use of grafts or 
prosthetics in female pelvic prolapse repair procedures. The commenters 
acknowledged that the use of these new codes will result in better data 
collection, outcomes research, and improve the quality of health care 
for women. However, the commenters indicated that the cost of implants 
and prosthetics used in treating various urological and gynecological 
conditions are comparable to the resources utilized in a patient with 
an MCC or CC diagnosis. Specifically, the commenters recommended that 
the titles for the following proposed MS-DRGs be revised to add the 
term, ``or major device'' to account for cases where a graft or 
prosthesis is used.
    <bullet> MS-DRG 333 (Rectal Resection with CC).
    <bullet> MS-DRG 662 (Minor Bladder Procedures with Major CC).
    <bullet> MS-DRG 707 (Major Male Pelvic Procedures with CC or Major 
CC).
    <bullet> MS-DRG 709 (Penis Procedures with CC or Major CC).
    <bullet> MS-DRG 746 (Vagina, Cervix & Vulva Procedures with CC or 
Major CC).
    Response: We appreciate the commenter's support of the new 
procedure codes and the suggestion to revise the proposed MS-DRG 
titles. The newly created codes describing the use of grafts or 
prosthetics are restricted to female pelvic prolapse repair procedures 
and are not effective until October 1, 2007. As a result, there is no 
data available for analysis at this time. We will evaluate these 
recommendations as we obtain additional data using the MS-DRGs to 
determine if future changes to the above mentioned MS-DRGs are 
warranted.
r. High Dose Interleukin-2 (HD-IL-2) (MDC 17)
    We received comments concerning the appropriate assignment within 
the MS-DRGs of patients receiving High-dose Interleukin-2 (IL-2).
    In the FY 2004 final rule (68 FR 45360, August 1, 2003), we 
discussed the creation of a specific code to identify IL-2 (procedure 
code 00.15, High-dose infusion of Interleukin-2 (IL-2)) and the 
subsequent modification of existing CMS DRG 492 (Chemotherapy with 
Acute Leukemia as Secondary Diagnosis) by adding code 00.15 to the DRG 
logic and changing the title to ``Chemotherapy with Acute Leukemia or 
with use of High Dose Chemotherapy Agent''. This drug is marketed as 
Proleukin(copyright). Under the proposed MS-DRGs, CMS DRG 492 would be 
replaced by MS-DRG 837 (Chemotherapy with Acute Leukemia as Secondary 
Diagnosis or with High Dose Chemotherapeutic Agent with MCC), MS-DRG 
838 (Chemotherapy with Acute Leukemia as Secondary Diagnosis with CC or 
High Dose Chemotherapeutic Agent), or MS-DRG 839 (Chemotherapy with 
Acute Leukemia as Secondary Diagnosis without CC/MCC).
    Administration of high-dose Interleukin-2 (HD-IL-2) is a hospital 
inpatient-based regimen that can produce durable remissions of 
metastatic renal cell cancer and metastatic melanoma in a subset of 
patients. In contrast to traditional cytotoxic chemotherapies which 
target cancer cells directly, HD-IL-2 enhances the body's natural 
cancer defenses by stimulating the growth and activity of cancer-
killing white blood cells. HD-IL-2 therapy is associated with severe 
complications that can include: hypotension, metabolic acidosis, acute 
renal failure, arrhythmia, myocardial inflammation, coagulation 
defects, hyperthyroidism, psychosis, respiratory distress syndrome, 
catheter related septicemia, hyperbilirubinemia and thrombocytopenia.
    To safely administer HD-IL-2, the FDA-approved label states that 
HD-IL-2 ``should be administered in a hospital setting under the 
supervision of a qualified physician experienced in the use of 
anticancer agents. An intensive care facility and specialists skilled 
in cardiopulmonary or intensive care medicine must be available.'' 
Strict nursing protocols must be followed in order to minimize adverse 
events such as cardiac arrhythmias as well as severe hypotension.
    Because it is associated with such severe side effects, HD-IL-2 
therapy requires substantially greater resource utilization, including 
longer hospital stays and additional nursing support, than conventional 
chemotherapy. Conventional chemotherapy may be administered to patients 
either on an outpatient basis or through a series of short (that is, 1 
to 3 day) inpatient stays. By contrast, FDA approval for high-dose IL-2 
refers specifically to the following protocol:
    ``Each course of high-dose IL-2 therapy is administered during two 
separate hospital admissions, with an average length of stay of six to 
seven days each. For the first cycle, Interleukin-2 is administered 
every 8 hours over a 5-day period. Patients are then discharged to rest 
at home for

[[Page 47263]]

several days, and then readmitted for a second cycle consisting of an 
identical dosing regimen. These two cycles comprise the first course of 
high-dose IL-2 therapy, which may be repeated after 8 to 12 weeks if 
the patient is responding.''
    Based on data from peer reviewed publications, some centers may 
administer IL-2 ``off-label'' in low- or intermediate-dose regimens. 
For such off-label uses, IL-2 is either not administered as a bolus, or 
in a much lower-dose bolus. Because low- or intermediate-dose IL-2 
therapy poses a lower risk of serious side effects, its administration 
is less resource intensive in terms of patient monitoring, nursing 
support, and length of stay.
    A specific code was created for the administration of High-dose 
Interleukin-2 beginning with cases discharged on or after October 1, 
2003. Code 00.15 (High-dose infusion interleukin-2 (IL-2)) came from 
existing code 99.28 (Injection or infusion of biological response 
modified [BMR] as an antineoplastic agent), which had been created for 
use on or after October 1, 1994. However, as there may be some 
confusion in the industry concerning the differentiation and correct 
coding of ``high-dose'' IL-2 therapy from less resource intensive uses, 
some non-high-dose cases have probably been incorrectly billed under 
00.15 as high-dose cases when they should have been classified to code 
99.28. Code 00.15 is specifically titled ``High-dose infusion 
Interleukin-2'' and contains inclusion terms specifying ``Infusion (IV 
Bolus, CIV) interleukin.'' A specifically written ``excludes note'' in 
the Tabular section of the Procedure Manual sends Coders to code 99.28 
to correctly describe the administration of low-dose infusion 
Interleukin-2. This confusion has possibly caused Medicare to overpay 
for some non-high-dose cases as if they were high dose cases, and may 
have reduced the reported average charges and costs of true high-dose 
IL-2 therapy [in the MedPAR data files]. If reported average charges do 
not reflect true high-dose IL-2 therapy, the result of this coding 
inaccuracy may be causing the IPPS relative weight to reflect a blend 
of the costs of patient treated with high-dose and low-dose 
administration of IL-2.
    To address this incorrect coding issue, CMS will clarify the ICD-9-
CM coding system by making additional entries in both the Index and 
Tabular portions of the Procedure section of the code book. Procedure 
code 00.15 should only be billed for ``bolus, high-dose IL-2.'' Cases 
must satisfy the following four criteria, as documented in the medical 
record, to qualify for use of code 00.15 as ``bolus, high-dose IL-2'':
    <bullet> Bolus infusions given over no more than 30 minutes at a 
dose of no less than 600,000 IU/kg (weight adjusted);
    <bullet> Placement and utilization of a central line;
    <bullet> Administration in a hospital setting under the supervision 
of a qualified physician experienced in the use of anticancer agent 
with an intensive care facility and specialists skilled in 
cardiopulmonary or intensive care medicine available, and
    <bullet> A planned 5-day treatment protocol.
    Comment: Commenters indicated that the administration of High-dose 
IL-2 is an extremely complicated and advanced therapy, requiring much 
stricter nursing protocols to prevent or manage the expected 
complications which accompany this type of cytotoxic therapy. The 
commenters also noted that HD-IL-2 cases are assigned to a CMS DRG for 
chemotherapy that, in their view, is clinically inappropriate. The 
commenters stated that technologies should be assigned to clinically 
consistent DRGs. Therefore, the commenters added, when a therapy 
differs clinically and in resource allocation from the other cases 
assigned to the same base DRG, adoption of a new DRG for that 
technology is warranted. Commenters urged CMS to reassess whether cases 
using HD-IL-2 and other treatments involving advanced technologies are 
assigned to appropriate DRGs and to create new, clinically appropriate 
DRGs for all advanced therapies.
    Response: The cost of treating patients with HD-IL-2 continues to 
be represented in MS-DRGs 837, 838, and 839, but the cases have been 
distributed according to the presence or absence of an MCC, a CC, or 
the lack of either a comorbidity or complication according to the 
historical data represented by MedPAR. Medicare likely will continue to 
pay the same amount for all patients in these MS-DRGs. However, our 
payments will better reflect patient severity of illness by paying 
higher amounts for those cases where the patient has an MCC or CC than 
if they do not. The data suggest that it is appropriate to divide CMS 
DRG 492 based on severity levels, so for the MS-DRG system, new MS-DRGs 
837, 838, and 839 were created, as described above. Our findings are 
represented in the following table.

----------------------------------------------------------------------------------------------------------------
                                                                     Number of    Average length      Average
                             MS-DRG                                    cases          of stay         charges
----------------------------------------------------------------------------------------------------------------
MS-DRG 837--All cases...........................................           1,525           22.62     $107,269.93
MS-DRG 837--Cases with IL-2 Infusion (Code 00.15)...............              56            8.11       73,104.34
MS-DRG 837--Cases without IL-2 Infusion (Code 00.15)............           1,469           23.17      108,600.39
MS-DRG 838--All cases...........................................             855            9.15       46,596.45
MS-DRG 838--Cases with IL-2 Infusion (Code 00.15)...............             555            4.78       44,008.54
MS-DRG 838--Cases without IL-2 Infusion (Code 00.15)............             522           11.94       48,247.36
MS-DRG 839--All cases...........................................           1,307            6.04       22,693.30
MS-DRG 839--Cases with IL-2 Infusion (Code 00.15)...............              20            4.40       38,002.15
MS-DRG 839--Cases without IL-2 Infusion (Code 00.15)............           1,287            6.07       22,455.40
----------------------------------------------------------------------------------------------------------------

    These data suggest that average charges for patients receiving HD-
IL-2 are either comparable or lower than other patients within assigned 
MS-DRGs 837 and 838. For this reason, we believe most cases treated 
with HD-IL-2 will be paid adequately under the MS-DRGs. The remaining 
20 cases in MS-DRG 839 have average charges that are more than $15,000 
higher than other cases within this MS-DRG. The average charges for 
these cases are closer to those for MS-DRG 838.
    In spite of the possibility of erroneous coding of low-dose IL-2 
cases to procedure code 00.15 instead of the more appropriate code 
99.28 as discussed above, the data do not currently suggest a problem 
with Medicare payment for most of the HD-IL-2 cases assigned to MS-DRGs 
837, 838, and 839. However, the data do suggest that the costs of cases 
of IL-2 coded with 00.15 currently assigned to MS-DRG 839 are closer to 
MS-DRG 838. Therefore, for FY 2008, we are assigning procedure code 
00.15 (High-dose infusion of Interleukin-2 (IL-2)) to MS-DRG 837 
(Chemotherapy with Acute Leukemia as Secondary Diagnosis

[[Page 47264]]

or with High Dose Chemotherapeutic Agent with MCC) and MS-DRG 838 
(Chemotherapy with Acute Leukemia as Secondary Diagnosis with CC or 
High Dose Chemotherapeutic Agent).
s. Computer Assisted Surgery
    Comment: We received one comment from a manufacturer requesting 
that CMS recognize improved clinical outcomes resulting from computer 
assisted surgery and develop new MS-DRGs to group patients together who 
receive this technology. The commenter noted that effective October 1, 
2004, CMS created codes to describe specific forms of computer assisted 
surgery. The commenter further noted that clinical outcomes are 
superior when computer assisted surgery is utilized; however, assigning 
the computer assisted surgery codes does not affect the DRG assignment. 
The commenter encouraged CMS to consider this issue as it continues to 
refine the DRG system.
    Response: We appreciate the commenter's recommendation that CMS 
evaluate how to better recognize the clinical outcomes associated with 
computer-assisted surgical procedures. It is unclear which procedures 
the commenter is proposing we specifically examine at this time. 
Currently, the procedure codes that identify the use of computer 
assisted surgery are as follows:
    <bullet> 00.31, Computer assisted surgery with CT/CTA.
    <bullet> 00.32, Computer assisted surgery with MR/MRA.
    <bullet> 00.33, Computer assisted surgery with fluoroscopy.
    <bullet> 00.34, Imageless computer assisted.
    <bullet> 00.35, Computer assisted surgery with multiple datasets.
    <bullet> 00.39, Other computer assisted surgery.
    We will continue to study this issue as we obtain additional data 
under the MS-DRGs and determine if it is appropriate to make further 
modifications.
13. Changes to MS-DRG Logic As a Result of Public Comments
    To assist the readers in identifying all changes that were made to 
the MS-DRGs as a result of public comments received on the FY 2008 IPPS 
proposed rule, we have developed the following summary chart of those 
changes.

                                              MS-DRG Summary Chart
----------------------------------------------------------------------------------------------------------------
         MDC/MS-DRG                 Proposed title              Final title         Procedure code reassignments
----------------------------------------------------------------------------------------------------------------
                                                     Pre-MDC
                                              Intestinal Transplant
----------------------------------------------------------------------------------------------------------------
MS-DRG 005..................  Liver transplant and/or    Liver transplant w MCC    Cases with procedure code
                               intestinal transplant w    or intestinal             46.97 (Transplant of
                               MCC.                       transplant.               intestine) are reassigned
                                                                                    from MS-DRG 006 to MS-DRG
                                                                                    005.
MS-DRG 006..................  Liver transplant and/or    Liver transplant w/o
                               Intestinal Transplant w/   MCC.
                               o MCC.
----------------------------------------------------------------------------------------------------------------
                              MDC 1 (Diseases and Disorders of the Nervous System)
                                     Implantation of Chemotherapeutic Agent
                                               Intracranial Stents
----------------------------------------------------------------------------------------------------------------
MS-DRG 023..................  Craniotomy with major      Cranio w major dev iImpl/ Cases with procedure code
                               device implant or acute    acute complex CNS PDX     00.10 (Implantation of
                               complex central nervous    with MCC or chemo         chemotherapeutic agent) are
                               system principal           implant.                  reassigned from MS-DRG 024
                               diagnosis with MCC.                                  to MS-DRG 023.
MS-DRG 024..................  Craniotomy with major      Cranio w major dev impl/  Cases with procedure code
                               device implant or acute    acute complex CNS PDX w/  00.62 (Percutaneous
                               complex central nervous    o MCC.                    angioplasty or atherectomy
                               system principal                                     of intracranial vessel(s))
                               diagnosis without MCC.                               are reassigned from MS-DRGs
                                                                                    037-039 to MS-DRGs 023-024.
----------------------------------------------------------------------------------------------------------------
                                               Intracranial Stents
----------------------------------------------------------------------------------------------------------------
MS-DRG 025..................  Craniotomy & endovascular  Craniotomy &              Cases with procedure code
                               intracranial procedures    endovascular              00.62 (Percutaneous
                               w MCC.                     intracranial procedures   angioplasty or atherectomy
                                                          w MCC.                    of intracranial vessel(s))
                                                                                    are reassigned from MS-DRGs
                                                                                    037 039 to MS-DRGS 025-027.
MS-DRG 026..................  Craniotomy & endovascular  Craniotomy &endovascular
                               intracranial procedures    intracranial procedures
                               w CC.                      w CC.
MS-DRG 027..................  Craniotomy & endovascular  Craniotomy &
                               intracranial procedures    endovascular
                               w/o CC/MCC.                intracranial procedures
                                                          w/o CC/MCC.
----------------------------------------------------------------------------------------------------------------

[[Page 47265]]

 
                                             Spinal Neurostimulators
----------------------------------------------------------------------------------------------------------------
MS-DRG 028..................  Spinal procedures w MCC..  Spinal procedures w MCC.  Full system spinal cord non-
MS-DRG 029..................  Spinal procedures w CC...  Spinal procedures w CC     rechargeable and
                              .........................   or spinal                 rechargeable neurostimulator
MS-DRG 030..................  Spinal procedures w/o CC/   neurostimulators..        cases in MS-DRG 030 are
                               MCC.                      Spinal procedures w/o CC/  reassigned to MS-DRG 029 in
                                                          MCC..                     MDC 1. ICD-9-CM procedure
                                                                                    codes 03.93 (Implantation or
                                                                                    replacement of spinal
                                                                                    neurostimulator lead(s)),
                                                                                    and 86.94 (Insertion or
                                                                                    replacement of single array
                                                                                    neurostimulator pulse
                                                                                    generator, not specified as
                                                                                    rechargeable), or 86.95
                                                                                    (Insertion or replacement of
                                                                                    dual array neurostimulator
                                                                                    pulse generator, not
                                                                                    specified as rechargeable),
                                                                                    or 86.97 (Insertion or
                                                                                    replacement of single array
                                                                                    rechargeable neurostimulator
                                                                                    pulse generator), or 86.98
                                                                                    (Insertion or replacement of
                                                                                    dual array rechargeable
                                                                                    neurostimulator pulse
                                                                                    generator) must be reported
                                                                                    in order for the spinal
                                                                                    neurostimulator cases to be
                                                                                    assigned to MS-DRG 029.
----------------------------------------------------------------------------------------------------------------
                                               Intracranial Stents
----------------------------------------------------------------------------------------------------------------
MS-DRG 037..................  Extracranial procedures w  Extracranial procedures   Cases with procedure code
                               MCC.                       w MCC.                    00.62 (Percutaneous
MS-DRG 038..................  Extracranial procedures w  Extracranial procedures    angioplasty or atherectomy
MS-DRG 039..................   CC.                        w CC..                    of intracranial vessel(s))
                              Extracranial procedures w/ Extracranial procedures    are reassigned from MS-DRGs
                               o CC/MCC.                  w/o CC/MCC..              037 to MS-DRGs 023-027.
----------------------------------------------------------------------------------------------------------------
                                           Peripheral Neurostimulators
----------------------------------------------------------------------------------------------------------------
MS-DRG 040..................  Periph & cranial nerve &   Periph & cranial nerve &  Full system peripheral non-
                               other nerv syst proc w     other nerv syst proc      rechargeable and
MS-DRG 041..................   MCC.                       with MCC.                 rechargeable neurostimulator
                              Peripheral/Cranial nerve   Periph/cranial nerve &     cases in MS-DRG 042 are
                               & other nerv syst proc     other nerv syst proc w    reassigned to MS-DRG 041.
MS-DRG 042..................   with CC..                  CC or periph neurostim..  ICD 9 CM procedure codes
                              Peripheral/cranial nerve   Periph/cranial nerve &     04.92 (Implantation or
                               & other nerv syst proc w/  other nerv syst proc w/   replacement of peripheral
                               o CC/MCC..                 o CC/MCC..                neurostimulator lead(s)),
                                                                                    and 86.94 (Insertion or
                                                                                    replacement of single array
                                                                                    neurostimulator pulse
                                                                                    generator, not specified as
                                                                                    rechargeable), or 86.95
                                                                                    (Insertion or replacement of
                                                                                    dual array neurostimlator
                                                                                    pulse generator, not
                                                                                    specified as rechargeable),
                                                                                    or 86.97 (Insertion or
                                                                                    replacement of single array
                                                                                    rechargeable neurostimulator
                                                                                    pulse generator), or 86.98
                                                                                    (Insertion or replacement of
                                                                                    dual array rechargeable
                                                                                    neurostimulator pulse
                                                                                    generator) must be reported
                                                                                    in order for the peripheral
                                                                                    neurostimulator cases to be
                                                                                    assigned to MS-DRG 041.
----------------------------------------------------------------------------------------------------------------
                                                   Pain Codes
----------------------------------------------------------------------------------------------------------------
MS-DRG 091..................  Other disorders of         Other disorders of        Cases with a principal
                               nervous system w MCC.      nervous system w MCC.     diagnosis of code 338.0
MS-DRG 092..................  Other disorders of         Other disorders of         (Central pain syndrome) or
                               nervous system w CC..      nervous system w CC..     code 338.21 (Chronic pain
MS-DRG 093..................  Other disorders of         Other disorders of         due to trauma) or code
                               nervous system w/o CC/     nervous system w/o CC/    338.22 (Chronic post-
                               MCC..                      MCC..                     thoracotomy pain) or code
                                                                                    338.28 (Other chronic
                                                                                    postoperative pain) or code
                                                                                    338.29 (Other chronic pain)
                                                                                    or code 338.4 (Chronic pain
                                                                                    syndrome) are reassigned
                                                                                    from MDC 23, MS-DRGs 947-948
                                                                                    to MS-DRGs 091-093.
----------------------------------------------------------------------------------------------------------------
                        MDC 3 (Disease and Disorders of the Ear, Nose, Mouth, and Throat)
                                                Cochlear Implants
----------------------------------------------------------------------------------------------------------------
MS-DRG 129..................  Major head & neck          Major head & neck         Cochlear implant cases are
                               procedures w CC/MCC.       procedures w CC/MCC or    reassigned from MS-DRG 130
MS-DRG 130..................  Major head & neck           Major Device.             to MS-DRG 129. The ICD 9 CM
                               procedures w/o CC/MCC..   Major head & neck          procedure codes for cochlear
                                                          procedures w/o CC/MCC..   implants are: 20.96
                                                                                    (Implantation or replacement
                                                                                    of cochlear prosthetic
                                                                                    device, not otherwise
                                                                                    specified), or 20.97
                                                                                    (Implantation or replacement
                                                                                    of cochlear prosthetic
                                                                                    device, single channel), or
                                                                                    20.98 (Implantation or
                                                                                    replacement of cochlear
                                                                                    prosthetic device, multiple
                                                                                    channel).
----------------------------------------------------------------------------------------------------------------

[[Page 47266]]

 
                             MDC 5 (Disease and Disorders of the Circulatory System)
                              Endovascular Implantation of Graft in Thoracic Aorta
----------------------------------------------------------------------------------------------------------------
MS-DRG 237..................  Major cardiovascular       Major cardiovasc          Cases with procedure code
                               procedures w MCC.          procedures w MCC or       39.73 (Endovascular
                              .........................   thoracic aortic           implantation of graft in
MS-DRG 238..................  Major cardiovascular        aneurysm repair.          thoracic aorta) are
                               procedures w/o MCC..      Major cardiovascular       reassigned from MS-DRG 238
                                                          procedures w/o MCC..      to MS-DRG 237.
----------------------------------------------------------------------------------------------------------------
                                   Multiple Vessels, Multiple Coronary Stents
----------------------------------------------------------------------------------------------------------------
MS-DRG 246..................  Percutaneous               Perc cardiovasc proc w    Cases in MS-DRG 247 with
                               cardiovascular pro w       drug-eluting stent w      procedure code 00.66
                               drug-eluting stent w       MCC or 4+ Vessels/        (Percutaneous transluminal
MS-DRG 247..................   Major CC.                  Stents.                   coronary angioplasty [PTCA]
                              Percutaneous               Perc cardiovasc proc w     or coronary atherectomy),
                               cardiovascular proc w      drug-eluting stent w/o    and code 36.07 (Insertion of
                               drug-eluting stent w/o     MCC..                     drug-eluting coronary artery
                               Major CC..                                           stent(s)), and code 00.43
                                                                                    (Procedure on four or more
                                                                                    vessels), or code 00.48
                                                                                    (Insertion of four or more
                                                                                    vascular stents) are
                                                                                    reassigned to MS-DRG 246.
MS-DRG 248..................  Percutaneous               Perc cardiovasc proc w    Cases in MS-DRG 249 with
                               cardiovascular proc w      non-drug-eluting stent    procedure codes 00.66
                               non-drug-eluting stent w   w MCC or 4+ Ves/stents.   (Percutaneous transluminal
MS-DRG 249..................   Major CC.                 Perc cardiovasc proc w     coronary angioplasty [PTCA]
                              Percutaneous                non-drug-eluting stent    or coronary atherectomy),
                               cardiovascular proc w      w/o MCC..                 and code 36.06 (Insertion of
                               non-drug-eluting stent w/                            non-drug-eluting coronary
                               o Major CC..                                         artery stent(s)), and code
                                                                                    00.43 (Procedure on four or
                                                                                    more vessels), or code 00.48
                                                                                    (Insertion of four or more
                                                                                    vascular stents) are
                                                                                    reassigned to MS-DRG 248.
               MDC 8 (Diseases and Disorders of the Musculoskeletal System and Connective Tissue)
                                                  Spinal Fusion
----------------------------------------------------------------------------------------------------------------
MS-DRG 456..................  Spinal fusion exc cerv w   Spinal fusion exc cerv w  The following diagnoses are
                               spinal curv, malig or 9+   spinal curv/malig/infec   added to the principal
                               fusions w MCC.             or 9+ fusions w MCC.      diagnosis list for MS-DRGs
MS-DRG 457..................  Spinal fusion exc w        Spinal fusion exc cerv w   456-458: 015.02
                               spinal curv, malig or 9+   spinal curv/malig/infec   (Tuberculosis of bones and
                               fusions w CC..             or 9+ fusions w CC..      joints, vertebral column,
MS-DRG 458..................  Spinal fusion exc w        Spinal fusion exc cerv w   bacteriological or
                               spinal curv, malig or 9+   spinal curv/malig/infec   histological examination
                               fusions w/o CC/MCC..       or 9+ fusions w/o CC/     unknown (at present));
                                                          MCC..                     015.04 (Tuberculosis of
                                                                                    bones and joints, vertebral
                                                                                    column, tubercle bacilli not
                                                                                    found (in sputum) by
                                                                                    microscopy, but found by
                                                                                    bacterial culture); 015.05
                                                                                    (Tuberculosis of bones and
                                                                                    joints, vertebral column,
                                                                                    tubercle bacilli not found
                                                                                    by bacteriological
                                                                                    examination, but
                                                                                    tuberculosis confirmed
                                                                                    histologically); 730.08
                                                                                    (Acute osteomyelitis of
                                                                                    other specified sites);
                                                                                    730.18 (Chronic
                                                                                    osteomyelitis of other
                                                                                    specified sites); and 730.28
                                                                                    (Unspecified oteomyelitis of
                                                                                    other specified sites).
                                                                                   Procedure code 81.64 (Fusion
                                                                                    or refusion of 9 or more
                                                                                    vertebrae) is added to the
                                                                                    list of procedures for MS-
                                                                                    DRGs 456-458.
----------------------------------------------------------------------------------------------------------------
                                            Hip and Knee Replacements
----------------------------------------------------------------------------------------------------------------
MS-DRG 466..................  Revision of hip or knee    Revision of hip or knee   Cases with procedure code
                               replacement w MCC.         replacement w MCC.        00.83 (Revision of knee
MS-DRG 467..................  Revision of hip or knee    Revision of hip or knee    replacement, patellar
                               replacement w CC..         replacement w CC..        component), or code 00.84
MS-DRG 468..................  Revision of hip or knee    Revision of hip or knee    (Revision of total knee
                               replacement w/o CC/MCC..   replacement w/o CC/MCC..  replacement, tibial insert
                                                                                    (liner)) are reassigned from
                                                                                    MS-DRGs 466-468 to MS-DRGs
                                                                                    485-489.
MS-DRG 485..................  Knee procedures w pdx of   Knee procedures w pdx of
                               infection w MCC.           infection w MCC.
MS-DRG 486..................  Knee procedures w pdx of   Knee procedures w pdx of
                               infection w CC.            infection w CC.
MS-DRG 487..................  Knee procedures w pdx of   Knee procedures w pdx of  .............................
                               infection w/o CC/MCC.      infection w/o CC/MCC.
MS-DRG 488..................  Knee procedures w/o pdx    Knee Procedures without
                               of infection w CC/MCC.     Principal Diagnosis of
                                                          Infection with CC/MCC.
MS-DRG 489..................  Knee procedures w/o pdx    Knee Procedures without
                               of infection w/o CC/MCC.   Principal Diagnosis of
                                                          Infection without CC/
                                                          MCC.
----------------------------------------------------------------------------------------------------------------

[[Page 47267]]

 
                                                Spinal Procedures
                                             Spinal Neurostimulators
----------------------------------------------------------------------------------------------------------------
MS-DRG 490..................  Back & neck procedures     Back & neck proc exc      Cases with procedure codes
                               except spinal fusion w     spinal fusion with CC/    84.59 (Insertion of other
                               CC/MCC or disc devices.    MCC or disc device/       spinal devices), or 84.62
MS-DRG 491..................  Back & neck procedures      neurostim.                (Insertion of total spinal
                               except spinal fusion w/o  Back & neck proc exc       disc prosthesis, cervical),
                               CC/MCC..                   spinal fusion w/o CC/     or 84.65 (Insertion of total
                                                          MCC..                     spinal disc prosthesis,
                                                                                    lumbosacral), or 84.80
                                                                                    (Insertion or replacement of
                                                                                    interspinous process
                                                                                    device(s)), or 84.82
                                                                                    (Insertion or replacement of
                                                                                    pedicle-based dynamic
                                                                                    stabilization device(s)), or
                                                                                    84.84 (Insertion or
                                                                                    replacement of facet
                                                                                    replacement devices) are
                                                                                    reassigned from MS-DRG 491
                                                                                    to MS-DRG 490.
                                                                                   Reassign full system spinal
                                                                                    cord non-rechargeable and
                                                                                    rechargeable neurostimulator
                                                                                    cases in MS-DRG 491 to MS-
                                                                                    DRG 490 in MDC 8. ICD-9-CM
                                                                                    procedure codes 03.93
                                                                                    (Implantation or replacement
                                                                                    of spinal neurostimulator
                                                                                    lead(s)), and 86.94
                                                                                    (Insertion or replacement of
                                                                                    single array neurostimulator
                                                                                    pulse generator, not
                                                                                    specified as rechargeable),
                                                                                    or 86.95 (Insertion or
                                                                                    replacement of dual array
                                                                                    neurostimulator pulse
                                                                                    generator, not specified as
                                                                                    rechargeable), or 86.97
                                                                                    (Insertion or replacement of
                                                                                    single array rechargeable
                                                                                    neurostimulator pulse
                                                                                    generator), or 86.98
                                                                                    (Insertion or replacement of
                                                                                    dual array rechargeable
                                                                                    neurostimulator pulse
                                                                                    generator) must be reported
                                                                                    in order for the spinal
                                                                                    neurostimulator cases to be
                                                                                    assigned to MS-DRG 490.
----------------------------------------------------------------------------------------------------------------
                MDC 17 (MYELOPROLIFERATIVE DISEASES AND DISORDERS, POORLY DIFFERENTIATED NEOPLASM
                                    High-dose infusion interleukin-2 [IL-2])
----------------------------------------------------------------------------------------------------------------
MS-DRG 837..................  Chemo w acute leukemia as  Chemo w acute leukemia    Cases with procedure code
                               sdx or w high dose chemo   as sdx or w high dose     00.15 (High-Dose Infusion
                               agent w MCC.               chemo agent w MCC.        Interleukin-2 [IL-2]) are
                                                                                    reassigned from MS-DRG 839
                                                                                    to MS-DRG 838.
MS-DRG 838..................  Chemo w acute leukemia as  Chemo w acute leukemia
                               sdx or w high dose chemo   as sdx w CC or high
                               agent w CC.                dose chemo agent.
MS-DRG 839..................  Chemo w acute leukemia as  Chemo w acute leukemia
                               sdx or w high dose chemo   as sdx w/o CC/MCC.
                               agent w/o CC/MCC.
----------------------------------------------------------------------------------------------------------------
                MDC 23 (Factors Influencing Health Status and Other Contacts with Health Status)
----------------------------------------------------------------------------------------------------------------
MS-DRG 947..................  Signs & symptoms w MCC...  Signs & symptoms w MCC..  Cases with a principal
MS-DRG 948..................  Signs & symptoms w/o MCC.  Signs & symptoms w/o       diagnosis of code 338.0
                                                          MCC..                     (Central pain syndrome),
                                                                                    338.21 (Chronic pain due to
                                                                                    trauma), or 338.22 (Chronic
                                                                                    post-thoracotomy pain), or
                                                                                    338.28 (Other chronic
                                                                                    postoperative pain), or
                                                                                    338.29 (Other chronic pain),
                                                                                    or 338.4 (Chronic pain
                                                                                    syndrome) are reassigned
                                                                                    from MDC 23, MS-DRGs 947-948
                                                                                    to MS-DRGs 091-093 in MDC 1.
----------------------------------------------------------------------------------------------------------------

H. Recalibration of DRG Weights

    In section II.E. of the preamble of this final rule with comment 
period, we stated that we are continuing to implement the cost-based 
DRG relative weights under a 3-year transition period such that, in FY 
2008 (year two of the transition), the relative weights will be 
recalibrated using a blend of 67 percent of the cost-based relative 
weight and 33 percent of the charge-based relative weight. For FY 2009, 
the relative weights will be 100 percent cost-based. We are making a 
few minor changes to the cost-based relative weighting methodology that 
we adopted in the FY 2007 IPPS final rule (71 FR 47962 through 47971). 
However, in section II.E.2. of the preamble of the FY 2008 IPPS 
proposed rule, we requested public comments about whether to adopt any 
of the short-term recommendations to the cost-based relative weighting 
methodology for FY 2008 made by RTI. In response to those comments, we 
state in section II.E.2. of the preamble of this final rule with 
comment period that we are not adopting RTI's recommended regression-
based CCRs for medical supplies and devices, IV drugs, and CT Scans and 
MRIs for FY 2008. However, as recommended by RTI, for FY 2008, we are 
adding two new CCRs for a total of 15 CCRs: One for ``Emergency Room'' 
and one for ``Blood and Blood Products,'' both of which can be derived 
directly from the Medicare cost report.
    As we proposed, in developing the FY 2008 system of weights, we 
used two data sources: Claims data and cost report data. As in previous 
years, the claims data source is the MedPAR file. This file is based on 
fully coded diagnostic and procedure data for all Medicare inpatient 
hospital bills. The FY 2006 MedPAR data used in this final rule with 
comment period include discharges occurring on October 1, 2005, through 
September 30, 2006, based on bills received by CMS through March 2007, 
from all hospitals subject to the IPPS and short-term, acute care 
hospitals in Maryland (which are under

[[Page 47268]]

a waiver from the IPPS under section 1814(b)(3) of the Act). The FY 
2006 MedPAR file used in calculating the relative weights includes data 
for approximately 11,782,098 Medicare discharges from IPPS providers. 
Discharges for Medicare beneficiaries enrolled in a Medicare Advantage 
managed care plan are excluded from this analysis. The data exclude 
CAHs, including hospitals that subsequently became CAHs after the 
period from which the data were taken. The second data source used in 
the cost-based relative weighting methodology is the FY 2005 Medicare 
cost report data files from HCRIS, which represents the most recent 
full set of cost report data available. We used the March 31, 2007 
update of the HCRIS cost report files for FY 2005 in setting the 
relative cost-based weights.
    Because we are implementing the relative weights on a transitional 
basis, it is necessary to calculate both charge-based and cost-based 
relative weights. The charge-based methodology used to calculate the 
DRG relative weights from the MedPAR data is the same methodology that 
was in place for FY 2006 and FY 2007 and was applied as follows:
    <bullet> To the extent possible, all the claims were regrouped 
using the MS-DRGs being adopted for FY 2008, as discussed in section 
II.D. of the preamble of this final rule with comment period.
    <bullet> The transplant cases that were used to establish the 
relative weights for heart and heart-lung, liver and/or intestinal, and 
lung transplants (MS-DRGs 001, 002, 005, 006, and 007, respectively; 
previously CMS DRGs 103, 480, and 495) were limited to those Medicare-
approved transplant centers that have cases in the FY 2006 MedPAR file. 
(Medicare coverage for heart, heart-lung, liver and/or intestinal, and 
lung transplants is limited to those facilities that have received 
approval from CMS as transplant centers.)
    <bullet> Organ acquisition costs for kidney, heart, heart-lung, 
liver, lung, pancreas, and intestinal (or multivisceral organs) 
transplants continue to be paid on a reasonable cost basis. Because 
these acquisition costs are paid separately from the IPPS rates, it was 
necessary to subtract the acquisition charges from the total charges on 
each transplant bill that showed acquisition charges before computing 
the average charge for the DRG and before eliminating statistical 
outliers.
    <bullet> Total charges were standardized to remove the effects of 
differences in area wage levels, IME and DSH payments, and, for 
hospitals in Alaska and Hawaii, the cost-of-living adjustment was 
applied. Beginning with FY 2008, because hospital charges include 
charges for both operating and capital costs, we are standardizing 
total charges to remove the effects of differences in geographic 
adjustment factors, large urban add-on payments, cost-of-living 
adjustments, DSH payments, and IME adjustments under the capital IPPS 
as well.
    <bullet> Statistical outliers were eliminated by removing all cases 
that were beyond 3.0 standard deviations from the mean of the log 
distribution of both the standardized charges per case and the 
standardized charges per day for each DRG.
    <bullet> The average charge for each DRG was then recomputed 
(excluding the statistical outliers). To compute the average DRG 
charge, we sum the standardized charges by DRG and divide by the 
transfer adjusted case count. A transfer case is counted as a fraction 
of a case based on the ratio of its transfer payment under the per diem 
payment methodology to the full DRG payment for nontransfer cases. That 
is, a transfer case receiving payment under the transfer methodology 
equal to half of what the case would receive as a nontransfer would be 
counted as 0.5 of a total case. The average charge per DRG is then 
divided by the national average standardized charge per case to 
determine the relative weight.
    The new charge-based weights were then normalized by an adjustment 
factor of 1.50850 so that the average case weight after recalibration 
was equal to the average case weight before recalibration. This 
normalization adjustment is intended to ensure that recalibration by 
itself neither increases nor decreases total payments under the IPPS as 
required by section 1886(d)(4)(C)(iii) of the Act.
    The methodology we used to calculate the DRG cost-based relative 
weights from the FY 2006 MedPAR claims data and FY 2005 Medicare cost 
report data is as follows:
    <bullet> To the extent possible, all the claims were regrouped 
using the FY 2008 MS-DRG classifications discussed in section II.D. of 
the preamble of this final rule with comment period.
    <bullet> The transplant cases that were used to establish the 
relative weights for heart and heart-lung, liver and/or intestinal, and 
lung transplants (MS-DRGs 001, 002, 005, 006, and 007, respectively; 
previously CMS DRGs 103, 480, and 495) were limited to those Medicare-
approved transplant centers that have cases in the FY 2006 MedPAR file. 
(Medicare coverage for heart, heart-lung, liver and/or intestinal, and 
lung transplants is limited to those facilities that have received 
approval from CMS as transplant centers.)
    <bullet> Organ acquisition costs for kidney, heart, heart-lung, 
liver, lung, pancreas, and intestinal (or multivisceral organs) 
transplants continue to be paid on a reasonable cost basis. Because 
these acquisition costs are paid separately from the prospective 
payment rate, it is necessary to subtract the acquisition charges from 
the total charges on each transplant bill that showed acquisition 
charges before computing the average cost for each DRG and before 
eliminating statistical outliers.
    <bullet> Claims with total charges or total length of stay less 
than or equal to zero were deleted. Claims that had an amount in the 
total charge field that differed by more than $10.00 from the sum of 
the routine day charges, intensive care charges, pharmacy charges, 
special equipment charges, therapy services charges, operating room 
charges, cardiology charges, laboratory charges, radiology charges, 
other service charges, labor and delivery charges, inhalation therapy 
charges, and anesthesia charges were also deleted.
    <bullet> At least 96.1 percent of the providers in the MedPAR file 
had charges for 10 of the 15 cost centers. Claims for providers that 
did not have charges greater than zero for at least 10 of the 15 cost 
centers were deleted.
    <bullet> Statistical outliers were eliminated by removing all cases 
that were beyond 3.0 standard deviations from the mean of the log 
distribution of both the total charges per case and the total charges 
per day for each DRG.
    Once the MedPAR data were trimmed and the statistical outliers were 
removed, the charges for each of the 15 cost groups for each claim were 
standardized to remove the effects of differences in area wage levels, 
IME and DSH payments, and for hospitals in Alaska and Hawaii, the 
applicable cost of living adjustment. Beginning with FY 2008, because 
hospital charges include charges for both operating and capital costs, 
we are standardizing total charges to remove the effects of differences 
in geographic adjustment factors, large urban add-on payments, cost-of-
living adjustments, DSH payments, and IME adjustments under the capital 
IPPS as well. Charges were then summed by DRG for each of the 15 cost 
groups so that each DRG had 15 standardized charge totals. These 
charges were then adjusted to cost by applying the national average 
CCRs developed from the FY 2005 cost report data.
    The 15 cost centers that we used in the relative weight calculation 
are shown in the following table. Included

[[Page 47269]]

in the 15 CCRs are two distinct CCRs for FY 2008 for ``Emergency Room'' 
and ``Blood and Blood Products.'' The costs and charges for these two 
additional CCRs are removed from the ``Other Services'' CCR. The table 
shows the lines on the cost report that we used to create the 15 
national cost center CCRs that we used to adjust the DRG charges to 
cost. For FY 2008, we are making minor revisions to the Cardiology, 
Laboratory, Radiology, and Other Services CCRs we are using to 
calculate the DRG relative weights, as follows:
    <bullet> The costs for cases involving Electroencephalography 
(EEG), cost report line 54, are currently in the Cardiology cost center 
group. However, MedPAR categorizes the claims data for EEG under 
Laboratory Charges (revenue codes 0740 and 0749). In order to maintain 
consistency with matching costs on the cost report to charges on MedPAR 
claims, we are moving cost report line 54 for EEG out of the Cardiology 
cost center group into the Laboratory cost center group.
    <bullet> In the FY 2007 IPPS proposed rule, we originally included 
the costs for Radioisotopes, cost report line 43, in the Radiology cost 
center group. However, in response to comments, we moved Radioisotopes 
to the Other Services cost center group. After researching this issue 
further over the past year, we believe that Radioisotopes is a 
radiology-related service that more appropriately belongs in the 
Radiology cost center group. Accordingly, for FY 2008, as we proposed, 
we are moving the cost report line item for line 43, Radioisotopes, out 
of the Other Services cost center group and into the Radiology cost 
center group. The version of the 15 cost center groupings are in the 
table below:
BILLING CODE 4120-01-P
[GRAPHIC] [TIFF OMITTED] TR22AU07.003


[[Page 47270]]


[GRAPHIC] [TIFF OMITTED] TR22AU07.004


[[Page 47271]]


[GRAPHIC] [TIFF OMITTED] TR22AU07.005


[[Page 47272]]


[GRAPHIC] [TIFF OMITTED] TR22AU07.006


[[Page 47273]]


[GRAPHIC] [TIFF OMITTED] TR22AU07.007


[[Page 47274]]


[GRAPHIC] [TIFF OMITTED] TR22AU07.008


[[Page 47275]]


[GRAPHIC] [TIFF OMITTED] TR22AU07.009

BILLING CODE 4120-01-C

[[Page 47276]]

    We developed the national average CCRs as follows:
    Taking the FY 2005 cost report data, we removed CAHs, Indian Health 
Service hospitals, all inclusive rate hospitals, and cost reports that 
represented time periods of less than 1 year (365 days). We included 
hospitals located in Maryland as we are including their charges in our 
claims database. We then created CCRs for each provider for each cost 
center (see prior table for line items used in the calculations) and 
removed any CCRs that were greater than 10 or less than 0.01. We 
normalized the departmental CCRs by dividing the CCR for each 
department by the total CCR for the hospital for the purpose of 
trimming the data. We then took the logs of the normalized cost center 
CCRs and removed any cost center CCRs where the log of the cost center 
CCR was greater or less than the mean log plus/minus 3 times the 
standard deviation for the log of that cost center CCR. Once the cost 
report data were trimmed, we calculated a Medicare specific CCR. The 
Medicare specific CCR was determined by taking the Medicare charges for 
each line item from Worksheet D, Part 4 and deriving the Medicare 
specific costs by applying the hospital specific departmental CCRs to 
the Medicare specific charges for each line item from Worksheet D, Part 
4. Once each hospital's Medicare specific costs were established, we 
summed the total Medicare specific costs and divided by the sum of the 
total Medicare specific charges to produce national average, charge 
weighted CCRs.
    After we multiplied the total charges for each DRG in each of the 
15 cost centers by the corresponding national average CCR, we summed 
the 15 ``costs'' across each DRG to produce a total standardized cost 
for the DRG. The average standardized cost for each DRG was then 
computed as the total standardized cost for the DRG divided by the 
transfer adjusted case count for the DRG. The average cost for each DRG 
was then divided by the national average standardized cost per case to 
determine the relative weight.
    The new cost-based relative weights were then normalized by an 
adjustment factor of 1.50957 so that the average case weight after 
recalibration was equal to the average case weight before 
recalibration. Since more trims were applied to the data under the 
cost-based weighting methodology than under the charge-based 
methodology, a smaller universe of claims was used in the cost-based 
weighting methodology. In this instance, the different universe of 
claims also resulted in a slightly higher cost-based normalization 
factor than the normalization factor derived for charge-based weights. 
The normalization adjustment is intended to ensure that recalibration 
by itself neither increases nor decreases total payments under the 
IPPS, as required by section 1886(d)(4)(C)(iii) of the Act.
    The 15 national average CCRs for FY 2008 are as follows:

------------------------------------------------------------------------
                            Group                                 CCR
------------------------------------------------------------------------
Routine Days.................................................      0.553
Intensive Days...............................................      0.490
Drugs........................................................      0.209
Supplies & Equipment.........................................      0.345
Therapy Services.............................................      0.428
Laboratory...................................................      0.177
Operating Room...............................................      0.303
Cardiology...................................................      0.196
Radiology....................................................      0.181
Emergency Room...............................................      0.309
Blood and Blood Products.....................................      0.455
Other Services...............................................      0.451
Labor & Delivery.............................................      0.501
Inhalation Therapy...........................................      0.198
Anesthesia...................................................      0.146
------------------------------------------------------------------------

    As we explained in section II.D. of the preamble of this final rule 
with comment period, in response to comments, we are implementing the 
MS-DRGs with a 2-year transition period beginning in FY 2008. For FY 
2008, the first year of the transition, 50 percent of the relative 
weight for a DRG is based on the two-thirds cost-based weight/one-third 
charge-based weight calculated using FY 2006 MedPAR data grouped to the 
Version 24.0 (FY 2007) DRGs. The remaining 50 percent of the FY 2008 
relative weight for a DRG is based on the two-thirds cost-based weight/
one-third charge based weight calculated using FY 2006 MedPAR grouped 
to the Version 25.0 (FY 2008) MS-DRGs. In FY 2009, the relative weights 
will be based on 100 percent cost weights computed using the Version 
26.0 (FY 2009) MS-DRGs. Specifically, the blended relative weights for 
FY 2008 are computed as follows:
    First, using the Version 24.0 GROUPER, relative weights are 
calculated based on 100 percent cost-based and 100 percent charge-
based, respectively. These weights are then blended using two-thirds of 
the cost-based weights and one-third of the charge-based weights to 
establish the CMS DRG portion of the transition weights.
    Second, using the Version 25.0 FY 2008 (MS-DRG) GROUPER, relative 
weights are calculated based on 100 percent cost-based weights and 100 
percent charge-based weights, respectively. These weights are then 
blended using two-thirds of the cost-based weights and one-third of the 
charge-based weights to establish the MS-DRG portion of the transition 
weights.
    Under the transition blend we are adopting in this final rule with 
comment period, we will group cases to MS-DRGs (using the Version 25.0 
GROUPER), but the payment weight for each DRG will be a 50/50 blend of 
the MS-DRG weight and CMS DRG weight. Thus, we had to determine a 
blended weight for each DRG. Using the claims in the FY 2006 MedPAR 
database that we used to compute cost based weights under the Version 
24.0 GROUPER, we grouped each case to a CMS-DRG (using the Version 24.0 
GROUPER) and an MS-DRG (using the Version 25.0 GROUPER). Commonly, a 
set of cases that grouped to a single MS-DRG grouped to two or more CMS 
DRGs. Therefore, we determined an average CMS DRG weight for all cases 
that grouped to each MS-DRG. Specifically, we summed the CMS DRG 
weights of all the cases that grouped to each MS-DRG and then divided 
that number by the transfer-adjusted case count. To establish the final 
blended weight for each DRG, we added 50 percent of the MS-DRG weight 
to 50 percent of the average CMS DRG weight for that MS-DRG. These 
final blended relative weights are listed in Table 5 of this final rule 
with comment period.
    When we recalibrated the DRG weights for previous years, we set a 
threshold of 10 cases as the minimum number of cases required to 
compute a reasonable weight. We used that same case threshold in 
recalibrating the DRG weights for FY 2008. Using the FY 2006 MedPAR 
data set, there are 7 MS-DRGs that contain fewer than 10 cases. Under 
the MS-DRGs, we have fewer low-volume DRGs than under the CMS DRGs 
because we no longer have separate DRGs for patients age 0 to 17 years. 
With the exception of newborns, we previously separated some DRGs based 
on whether the patient was age 0 to 17 years or age 17 years and older. 
Other than the age split, cases grouping to these DRGs are identical. 
The DRGs for patients age 0 to 17 years generally have very low volumes 
because children are typically ineligible for Medicare. In the past, we 
have found that the low volume of cases for the pediatric DRGs could 
lead to significant year-to-year instability in their relative weights. 
Although we have always encouraged non-Medicare payers to develop 
weights applicable to their own patient populations, we have heard 
frequent complaints from providers about the use of the Medicare 
relative weights in the pediatric population. We believe that

[[Page 47277]]

eliminating this age split in the MS-DRGs will provide more stable 
payment for pediatric cases by determining their payment using adult 
cases that are much higher in total volume. All of the low volume DRGs 
listed below are for newborns. Newborns are unique and require separate 
DRGs that are not mirrored in the adult population. Therefore, it 
remains necessary to retain separate DRGs for newborns. In FY 2008, 
because we do not have sufficient MedPAR data to set accurate and 
stable cost weights for these low-volume DRGs, we are computing weights 
for the low-volume DRGs by adjusting their FY 2007 weights by the 
percentage change in the average weight of the cases in other DRGs. The 
crosswalk table is shown below:

------------------------------------------------------------------------
   Low Volume DRG            DRG title             Crosswalk to DRG
------------------------------------------------------------------------
789.................  Neonates, Died or       FY 2007 FR weight
                       Transferred to          (adjusted by percent
                       Another Acute Care      change in average weight
                       Facility.               of the cases in other
                                               DRGs).
790.................  Extreme Immaturity or   FY 2007 FR weight
                       Respiratory Distress    (adjusted by percent
                       Syndrome, Neonate.      change in average weight
                                               of the cases in other
                                               DRGs).
791.................  Prematurity With Major  FY 2007 FR weight
                       Problems.               (adjusted by percent
                                               change in average weight
                                               of the cases in other
                                               DRGs).
792.................  Prematurity Without     FY 2007 FR weight
                       Major Problems.         (adjusted by percent
                                               change in average weight
                                               of the cases in other
                                               DRGs).
793.................  Full-Term Neonate With  FY 2007 FR weight
                       Major Problems.         (adjusted by percent
                                               change in average weight
                                               of the cases in other
                                               DRGs).
794.................  Neonate With Other      FY 2007 FR weight
                       Significant Problems.   (adjusted by percent
                                               change in average weight
                                               of the cases in other
                                               DRGs).
795.................  Normal Newborn........  FY 2007 FR weight
                                               (adjusted by percent
                                               change in average weight
                                               of the cases in other
                                               DRGs).
------------------------------------------------------------------------

I. MS-LTC-DRG Reclassifications and Relative Weights for LTCHs for FY 
2008

1. Background
    In the June 6, 2003 LTCH PPS final rule (68 FR 34122), we changed 
the LTCH PPS annual payment rate update cycle to be effective July 1 
through June 30 instead of October 1 through September 30. In addition, 
because the patient classification system utilized under the LTCH PPS 
uses the same CMS DRGs as those currently used under the IPPS for acute 
care hospitals, in that same final rule, we explained that the annual 
update of the long term care diagnosis related group (LTC-DRG) 
classifications and relative weights will continue to remain linked to 
the annual reclassification and recalibration of the CMS DRGs used 
under the IPPS. Therefore, we specified that we will continue to update 
the LTC-DRG classifications and relative weights to be effective for 
discharges occurring on or after October 1 through September 30 each 
year. We further stated that we will publish the annual proposed and 
final update of the LTC-DRGs in same notice as the proposed and final 
update for the IPPS (69 FR 34125).
    Comment: Several commenters strongly recommended that we establish 
one rulemaking cycle that would encompass the update of the LTCH PPS 
payment rates (July 1) as well as the development of the LTC-DRG 
weights (October 1). One commenter also suggests that this change 
should begin for RY 2009 and, for that year, CMS should implement a 3-
month update to the standardized amount (July 1, 2008 through September 
30, 2008 with no other policy changes. The commenters also have stated 
that there should only be one rulemaking cycle because of interactive 
effects of adjustments made at two different times.
    Response: In the RY 2008 LTCH PPS final rule (72 FR 26874), we 
responded to a similar comment by stating that we would ``evaluate 
whether such a consolidation is a workable alternative to the present 
schedule.'' While we appreciate the continued interest of commenters on 
this issue, we note that we did not propose a change to the LTCH PPS 
update cycle in the FY 2008 IPPS proposed rule. Therefore, we do not 
believe that the IPPS final rule is the appropriate vehicle for 
addressing these concerns. Rather, we believe that exploring the 
possibility of the consolidation of the LTCH PPS rulemaking cycles 
would be better addressed in the LTCH PPS rate year regulations since 
those rules are the primary vehicle for proposing and finalizing policy 
changes to the LTCH PPS. Therefore, we will continue our evaluation of 
this suggestion for the time being.
    In the FY 2008 IPPS proposed rule, we did not address the issue 
concerning changing the present update cycle for the LTCH PPS, and 
therefore, we are not making any changes to the LTCH PPS update cycle 
in this final rule with comment period. However, we will take all 
comments and suggestions concerning the RY 2009 update into 
consideration when preparing the RY 2009 LTCH PPS proposed rule. 
Commenters' concerns regarding any changes to the present rulemaking 
cycle will be considered when we evaluate the possibility of making 
changes to the present update cycle as well as any options that may be 
available. To this end, any proposed changes to the present update 
cycle would be included in the RY 2009 LTCH PPS proposed rule for 
public comment.
    In the past, the annual update to the IPPS CMS DRGs has been based 
on the annual revisions to the ICD-9-CM codes and was effective each 
October 1. As discussed in the FY 2008 IPPS proposed rule (72 FR 24755 
through 24757), with the implementation of section 503(a) of Pub. L. 
108-173, there is the possibility that one feature of the GROUPER 
software program may be updated twice during a Federal fiscal year 
(October 1 and April 1) as required by the statute for the IPPS. 
Section 503(a) of Pub. L. 108-173 amended section 1886(d)(5)(K) of the 
Act by adding a new clause (vii) which states that ``the Secretary 
shall provide for the addition of new diagnosis and procedure codes in 
[sic] April 1 of each year, but the addition of such codes shall not 
require the Secretary to adjust the payment (or diagnosis related group 
classification) * * * until the fiscal year that begins after such 
date.'' This requirement improves the recognition of new technologies 
under the IPPS by accounting for those ICD-9-CM codes in the MedPAR 
claims data earlier than the agency had accounted for new technology in 
the past. In implementing the statutory change, the agency has provided 
that ICD-9-CM diagnosis and procedure codes for new medical technology 
may be created and assigned to existing DRGs in the middle of the 
Federal fiscal year, on April 1. However,

[[Page 47278]]

this policy change will not impact the DRG relative weights in effect 
for that year, which will continue to be updated only once a year 
(October 1), nor will it have any impact on Medicare payments in that 
year. The use of the ICD-9-CM code set is also compliant with the 
current requirements of the Transactions and Code Sets Standards 
regulations at 45 CFR Parts 160 and 162, promulgated in accordance with 
the Health Insurance Portability and Accountability Act of 1996 
(HIPAA), Pub. L. 104-191.
    As noted above, the patient classification system used under the 
LTCH PPS is the same patient classification system that is used under 
the IPPS. Therefore, the ICD-9-CM codes currently used under both the 
IPPS and LTCH PPS may be updated as often as twice a year. This 
requirement is included as part of the amendments to the Act relating 
to recognition of new medical technology under the IPPS.
    Because we do not publish a midyear IPPS rule, any April 1 ICD-9-CM 
coding update will not be published midyear. Rather, we will assign any 
new diagnosis or procedure codes to the same DRG in which its 
predecessor code was assigned, so that there will be no impact on the 
DRG assignments (as also discussed in section II.G.10. of the preamble 
of this final rule with comment period). Any coding updates will be 
available through the Web sites provided in section II.G.10. of the 
preamble of this final rule with comment period and through the Coding 
Clinic for ICD 9-CM, a product of the American Hospital Association. 
Publishers and software vendors currently obtain code changes through 
these sources in order to update their code books and software system. 
If new codes are implemented on April 1, revised code books and 
software systems, including the GROUPER software program, will be 
necessary because we must use current ICD-9-CM codes. Therefore, for 
purposes of the LTCH PPS, because each ICD 9-CM code must be included 
in the GROUPER algorithm to classify each case under the LTCH PPS, the 
GROUPER software program used under the LTCH PPS would need to be 
revised to accommodate any new codes.
    In implementing section 503(a) of Pub. L. 108-173, there will only 
be an April 1 update if new technology codes are requested and 
approved. We note that any new codes created for April 1 implementation 
will be limited to those diagnosis and procedure code revisions 
primarily needed to describe new technologies and medical services. 
However, we reiterate that the process of discussing updates to the 
ICD-9-CM is an open process through the ICD-9-CM Coordination and 
Maintenance Committee. Requestors will be given the opportunity to 
present the merits for a new code and to make a clear and convincing 
case for the need to update ICD-9-CM codes for purposes of the IPPS new 
technology add-on payment process through an April 1 update (as also 
discussed in section II.G.10. of the preamble of this final rule with 
comment period).
    As we discussed in the FY 2008 IPPS proposed rule (72 FR 24755), at 
the September 28, 2006 ICD-9-CM Coordination and Maintenance Committee 
meeting, there were no requests for an April 1, 2007 implementation of 
ICD 9-CM codes. Therefore, the next update to the ICD-9-CM coding 
system will not occur until October 1, 2007 (FY 2008). Because there 
were no coding changes suggested for an April 1, 2007 update, the ICD-
9-CM coding set implemented on October 1, 2006, will continue through 
September 30, 2007 (FY 2008). The update to the ICD-9-CM coding system 
for FY 2008 is discussed above in section II.G.10. of the preamble of 
this final rule with comment period. Accordingly, in this final rule 
with comment period, as discussed in greater detail below, we are 
modifying and revising the LTC-DRG classifications and relative 
weights, to be effective October 1, 2007 through September 30, 2008 (FY 
2008). In addition, we will notify LTCHs of any revisions to the 
GROUPER software used under the IPPS and the LTCH PPS that may be 
implemented on April 1, 2008. As discussed in greater detail below, the 
MS-LTC-DRGs for FY 2008 in this final rule with comment period are the 
same as the MS-DRGs adopted under the IPPS for FY 2008 (GROUPER Version 
25.0) discussed in section II.B. of the preamble to this final rule 
with comment period.
2. Changes in the LTC DRG Classifications
a. Background
    Section 123 of Pub. L. 106 113 specifically requires that the 
agency implement a PPS for LTCHs that is a per discharge system with a 
DRG-based patient classification system reflecting the differences in 
patient resources and costs in LTCHs. Section 307(b)(1) of Pub. L. 106-
554 modified the requirements of section 123 of Pub. L. 106-113 by 
specifically requiring that the Secretary examine ``the feasibility and 
the impact of basing payment under such a system [the LTCH PPS] on the 
use of existing (or refined) hospital diagnosis-related groups (DRGs) 
that have been modified to account for different resource use of long-
term care hospital patients as well as the use of the most recently 
available hospital discharge data.''
    In accordance with section 123 of Pub. L. 106-113 as amended by 
section 307(b)(1) of Pub. L. 106-554 and Sec.  412.515 of our existing 
regulations, the LTCH PPS uses information from LTCH patient records to 
classify patient cases into distinct LTC-DRGs based on clinical 
characteristics and expected resource needs. As described in section 
II.D. of the preamble of this final rule with comment period, we are 
adopting MS-DRGs under the IPPS because we believe that adopting this 
system will result in a significant improvement in the DRG system's 
recognition of severity of illness and resource usage. We believe these 
improvements in the DRG system will be equally applicable to the LTCH 
PPS. The changes we are currently making for the IPPS are reflected in 
the FY 2008 GROUPER, Version 25.0, to be effective for discharges 
occurring on or after October 1, 2007 through September 30, 2008. 
Currently, the LTC-DRGs used as the patient classification system under 
the LTCH PPS correspond to the current CMS DRGs applicable under the 
IPPS for acute care hospitals.
    Consistent with our historical practice of having LTC-DRGs 
correspond to the DRGs applicable under the IPPS, under the broad 
authority of section 123(a) of Pub. L. 106-113, as modified by section 
307(b) of Pub. L. 106-554, as proposed, under the LTCH PPS we are 
adopting the use of MS-LTC-DRGs, which correspond to the MS-DRGs we are 
adopting under the IPPS. In addition, as stated above, we will be using 
the FY 2008 GROUPER Version 25.0 to classify cases effective for LTCH 
discharges occurring on or after October 1, 2007 through September 30, 
2008. The changes to the current CMS DRG classification system used 
under the IPPS for FY 2008 (GROUPER Version 25.0) are discussed in 
section II.D. of the preamble to this final rule with comment period.
    Comment: Four commenters indicated support for the adoption of the 
MS-LTC-DRGs for the LTCH PPS but noted specific concerns and included 
policy suggestions that they believed could address these concerns.
    Response: We appreciate the commenters' support. We have seriously 
considered the areas of concern as well as the policy suggestions. As 
stated above, we are adopting the use of MS-LTC-DRGs beginning in FY 
2008.

[[Page 47279]]

Below, we explain our responses to these stated concerns.
    Comment: Several commenters expressed concern about the adoption of 
the MS-LTC-DRGs for FY 2008 in advance of RAND's final report. These 
commenters envisioned that a report recommending a DRG system other 
than the MS-DRGs, (upon which the MS-LTC-DRGs are based) could result 
in a CMS decision to implement ``yet another'' patient classification 
system in FY 2009.
    Response: As noted above in our response to similar comments 
focusing on the use of the MS-DRGs by the IPPS, as RAND has completed 
its evaluation of the alternative DRG systems, including the MS-DRGs, 
consistent with RAND's findings, we believe it is appropriate at this 
time to adopt the MS-DRG system for Medicare in FY 2008 for the IPPS 
and at the same time, we are also adopting the MS-LTC-DRGs for the LTCH 
PPS. While there will be an opportunity for the public to comment on 
RAND's findings, we do not think it is likely that there will be 
persuasive public comments suggesting that one of the alternative DRG 
systems being evaluated by RAND is clearly superior. We plan to use 
RAND's report to continue to examine ways to improve and refine 
Medicare inpatient payment systems and expect that any future 
refinements will be based on MS-DRGs. Therefore, as final policy for FY 
2008, we are adopting the MS-LTC-DRGs as the new classification system 
for the LTCH PPS. However, since we are interested in public input on 
this issue, we will make RAND's final report available on the CMS Web 
Site at: http://www.cms.hhs.gov/Reports/downloads/
    Interested members of the public can write to the following 
address:
    Division of Acute Care, Center for Medicare Management, 7500 
Security Boulevard, C4-08-06, Baltimore, MD 21244, Attn: Mady Hue.
    Comment: Two commenters requested that CMS delay adoption of the 
MS-LTC-DRGs until FY 2009 in order to provide LTCHs additional time to 
analyze the impact of the new classification system and to provide 
meaningful comments. The commenters suggested that, during this time, 
CMS examine the interaction of MS-LTC-DRG relative weights and new 
policies established for RY 2008 (for example, revisions to the short-
stay outlier policy resulting in the ``IPPS comparable threshold'') 
before implementing MS-LTC-DRGs. The commenters further stated that 
such a delay would allow LTCHs the opportunity to adjust to the other 
recent LTCH PPS changes.
    Response: We do not believe that it is either appropriate or 
necessary to delay the adoption of the MS-LTC-DRGs until FY 2009 as the 
commenters suggest. We believe that we provided a comprehensive 
analysis of the MS-DRG classification system, upon which the MS-LTC-
DRGs are based, in the proposed rule and, as discussed elsewhere in 
these responses, clear and specific direction, which are evidenced by 
the number of comments that were received, which allowed hospital 
stakeholders to simulate the impacts of the proposed policy change. We 
do not believe a full year delay in implementation of the MS-DRGs and 
the MS-LTC-DRGs is necessary or appropriate. We believe that 
implementing the severity-based DRGs will result in more appropriate 
Medicare payments, a goal that should not be postponed. However, 
although we are not delaying the adoption of the severity-based DRGs 
for either the IPPS or the LTCH PPS, we are providing a 2-year 
transition to the full adoption of both the MS-DRGs and the MS-LTC-
DRGs, described elsewhere in these responses. We believe the transition 
will mitigate the payment impact of the new DRG system for both acute 
care hospitals and LTCHs as they adapt to the system. Furthermore, as 
we note in our discussion of a similar comment regarding the adoption 
of the MS-DRGs for the IPPS (see section II.E. of the preamble of this 
final rule with comment period), many commenters supported immediate 
adoption of the MS-DRGs, particularly because they are so structurally 
similar to the current DRGs. Therefore, we continue to maintain that a 
full year's delay in the adoption of the MS-LTC-DRGs under the LTCH PPS 
is unwarranted. While the MS-DRGs do include some consolidations of 
base DRGs, the major changes from the current DRGs involve adding 
severity levels to the base DRGs. Therefore, the move to MS-LTC-DRGs 
will not necessitate additional data elements. Because we do not 
believe that extensive preparation for implementation of the MS-DRGs is 
necessary, we do not believe that it is appropriate or necessary to 
delay adoption of the MS-DRGs until FY 2009. We continue to believe 
that payment adjustments that were finalized in the RY 2008 LTCH PPS 
final rule, among which was the revision to the short-stay outlier 
policy noted by the commenters, will result in more appropriate 
Medicare payments to LTCHs. The revised SSO policy addresses the issue 
of LTCH discharges that are comparable to an acute care IPPS hospital 
discharge based on the length of stay for that discharge. That policy 
is not tied to or affected by the adoption of the MS-LTC-DRGs. Nor do 
we believe that the extension of the 25 percent threshold adjustment 
that we finalized for RY 2008 at revised Sec.  412.534 and new Sec.  
412.536, which governs Medicare payments for patients discharged from 
LTCHs who were admitted from specific referring hospitals, is tied to 
or affected by the adoption of the MS-LTC-DRGs. Furthermore, as noted 
above, because the MS-LTC-DRGs are so structurally similar to the LTC-
DRGs, we do not believe that postponing the adoption of the severity-
weighted DRGs in order to evaluate the interaction of the policy 
changes implemented for the LTCH PPS for RY 2008 would confer any 
significant advantage to stakeholders.
    Comment: Four commenters urged CMS to establish a 3-year transition 
to the full adoption of the MS-LTC-DRGs in order to minimize the 
``impact of behavioral changes in coding'' resulting from the new 
system. Referring to the proposed 2.4 percent downward adjustment, the 
commenters also maintained that a 3-year transition would allow CMS to 
analyze LTCH data which would indicate whether there were coding 
changes that could warrant the application of a prospective adjustment 
to LTCH PPS payment rates.
    Response: We have carefully considered each comment in determining 
whether there should be a transition period for the relative weights 
computed using the MS-LTC-DRGs, the length of the transition, and how 
to compute the relative weights during the transition. Although we 
received strong general support for adopting the MS-LTC-DRGs, we agree 
that some transition is warranted to mitigate the magnitude of 
potential changes in payment to LTCHs that could occur in one year. As 
discussed in section II.D. of the preamble to this final rule with 
comment period, although MedPAC recommended that CMS fully implement 
MS-DRGs immediately, MedPAC suggested that, if the agency chose not to 
fully implement severity-adjusted DRGs in FY 2008, CMS should implement 
MS-DRGs over a 2-year transition. Accordingly, as we discussed earlier 
regarding implementation of the MS-DRGs under the IPPS, we are also 
implementing a 2 year transition to MS-LTC-DRGs. For FY 2008, the first 
year of the transition, 50 percent of the relative weight for a MS-LTC-
DRG will be based on average relative weight under Version 24.0 of the 
LTC-DRG GROUPER. The remaining 50 percent of the FY 2008 relative 
weight for a MS-

[[Page 47280]]

LTC-DRG will be based on the MS-LTC-DRG relative weight. For a more 
detailed description of the calculation of the MS-LTC-DRG relative 
weights for FY 2008 under this transition methodology, we refer readers 
to section II.I.4. (step 7 of Steps for Determining the FY 2008 MS-LTC-
DRG Relative Weights) of the preamble of this final rule with comment 
period.) In FY 2009, the MS-LTC-DRG relative weights will be based on 
100 percent of MS-LTC-DRG relative weights.
    As discussed in detail elsewhere in these responses, we are not 
finalizing the proposed 2.4 percent downward adjustment to the MS-LTC-
DRG relative weights.
    Comment: Some commenters maintained that they are unable to fully 
evaluate the impact of the proposed MS-DRG system on their member 
hospitals due to the lack of access to the necessary tools. The 
commenters note that neither an MS-LTC-DRG GROUPER nor an MS-LTC-DRG 
Definitions Manual has been made available to help them completely 
understand the proposed system. Therefore, the commenters believed they 
have been prevented from thoroughly and completely evaluating the 
proposed system and providing meaningful comments. The commenter 
recommended delaying implementation of the MS-LTC-DRGs until such 
information has been made available and providers have had the 
opportunity to review it and provide meaningful comments.
    Response: We disagree that LTCHs have not had adequate access to 
information concerning the changes to the MS-DRGs and the MS-LTC-DRGs. 
Ample and thorough information was published in the FY 2008 IPPS 
proposed rule. We refer the commenters to Section II.D.2., 
``Development of Proposed Medicare Severity DRGs (MS-DRGs)'' beginning 
on page 24697 of the May 3, 2007 Federal Register (72 FR 24697 through 
24707), where CMS' entire process for the creation of the MS-DRGs was 
explained. We discussed the creation of base MS-DRGs, upon which the 
MS-LTC-DRGs are based, and the consolidation from the existing DRGs is 
summarized in Table F of the Addendum to the proposed rule (72 FR 
24702). We also discussed the process for applying the severity 
criteria to each of the 335 base DRGs, resulting in 745 proposed MS-
DRGs.
    We discussed the proposed changes to the LTC-DRG classifications 
(72 FR 24755 through 24771), and indicated that we proposed to conform 
the LTC-DRG system to the IPPS DRG system by using MS-LTC-DRGs which 
correspond to the proposed MS-DRGs. Further specific conforming 
language was spelled out on pages 24756 through 24757 of the FY 2008 
IPPS proposed rule.
    In addition, we made other information available to the public that 
would allow for a detailed analysis of the MS-LTC-DRG proposal. We made 
available two MedPAR files (FY 2005 and FY 2006) that included the CMS 
DRG and MS-DRG assignment for each case. As discussed in the preamble 
to the proposed rule, the MS-LTC-DRGs and MS-DRGs share identical 
titles. Furthermore, Table 11 of the Addendum to the proposed rule 
listed the relative weight for each MS-LTC-DRG. With this information, 
the public could determine the MS-LTC-DRG assignment and relative 
weight for all cases in the FY 2005 and FY 2006 MedPAR files. 
Therefore, we believe the public had detailed information with which to 
perform a comprehensive analysis of our proposal to adopt MS-LTC-DRGs.
    Because we believe that adequate access to proposed changes to MS-
LTC-DRGs has been provided, as discussed above, we are not delaying 
their implementation. As stated above, we are adopting the use of MS-
LTC-DRGs under the LTCH PPS, which correspond to the MS-DRGs adopted 
under the IPPS. Accordingly, we will be using the FY 2008 GROUPER 
Version 25.0 effective for LTCH discharges occurring on or after 
October 1, 2007 through September 30, 2008.
    In conjunction with the changes to the existing CMS DRGs for the 
IPPS by adoption of the MS-DRGs, as discussed above, we are adopting 
the MS-LTC-DRGs for the LTCH PPS, as both sets of DRGs are determined 
from the same DRG structure. Although the structure of the DRGs used 
under the IPPS and the LTCH PPS are identical, we refer to the DRGs 
under the LTCH PPS as MS-LTC-DRGs. This conforming change, that is, to 
replicate the MS-LTC-DRG structure after the MS-DRG structure, is 
appropriate in order to maintain consistency and uniformity among a 
number of stakeholders, such as acute care hospitals, LTCHs, 
epidemiologists, rate setting organizations, and payors, among others. 
Notwithstanding the value of consistency, however, we also emphasize, 
that the adoption of the MS-LTC-DRGs as the patient classification 
system for the LTCH PPS will improve identification of severity of 
illness and hospital resource use which will result in more appropriate 
Medicare payments for LTCHs. As noted above, the patient classification 
system used under the LTCH PPS is the same patient classification 
system used under the IPPS, which historically has been updated 
annually as required by section 1886(d)(4)(C) of the Act and is 
effective for discharges occurring on or after October 1 through 
September 30 of each year. As such, the updates to the MS-DRG 
classification system used under the IPPS for FY 2008 (GROUPER Version 
25.0), discussed in section II.D. of the preamble of this final rule 
with comment period, will be applicable to updates under the LTCH PPS 
(that is, the MS-LTC-DRGs).
    As discussed above, we proposed to adopt the MS-LTC-DRGs as the 
patient classification system under the LTCH PPS, beginning with 
discharges occurring on or after October 1, 2007. However, in the 
proposed rule, we omitted proposed changes to the regulation text 
reflecting the proposed change from LTC-DRGs to MS-LTC-DRGs. As 
discussed previously in this preamble, in this final rule with comment 
period, we are adopting MS-LTC-DRGs for use in the LTCH PPS beginning 
with discharges on or after October 1, 2007. In this final rule with 
comment period, we are revising the regulation text to conform to our 
proposed and final policy. Consequently, we are revising the regulation 
text at Sec.  412.503 where we define terms associated with the LTCH 
PPS in order to indicate the adoption of the MS-LTC-DRGs as the patient 
classification system under the LTCH PPS beginning with FY 2008 for 
discharges occurring on or after October 1, 2007. First, we are adding 
language to the definition of ``LTC-DRG'' indicating that effective, 
October 1, 2007, the MS-LTC-DRGs are used to classify patient 
discharges occurring on or after October 1, 2007, from a long-term care 
hospital and that for patient discharges occurring on or after October 
1, 2007 and that references to LTC-DRGs in 42 CFR Part 412, Subpart O 
for policy descriptions and/or payment calculations shall be considered 
to be references to the MS-LTC-DRGs. Secondly, we are adding a 
definition of ``MS-LTC-DRGs'' as ``* * * the severity-adjusted 
diagnosis-related group used to classify patient discharges from a 
long-term care hospital based on clinical characteristics and average 
resource use, for prospective payment purposes for discharges from a 
long-term care hospital occurring on or after October 1, 2007.''
    Under the LTCH PPS, as described in greater detail below, we 
determine relative weights for each of the MS-LTC-DRGs to account for 
the difference in resource use by patients exhibiting the case 
complexity and multiple

[[Page 47281]]

medical problems characteristic of LTCH patients. (Unless otherwise 
noted in this final rule with comment period, our MS-LTC-DRG analysis 
is based on LTCH data from the March 2007 update of the FY 2006 MedPAR 
file, which contains hospital bills received through March 31, 2007, 
for discharges occurring in FY 2006.)
    LTCHs do not typically treat the full range of diagnoses as do 
acute care hospitals. Therefore, as we discussed in the August 30, 2002 
LTCH PPS final rule (67 FR 55985), which implemented the LTCH PPS, and 
the FY 2006 IPPS final rule (70 FR 47324), we use low-volume quintiles 
in determining the DRG relative weights for DRGs with less than 25 LTCH 
cases (low-volume LTC-DRGs). Specifically, we group those low-volume 
DRGs into 5 quintiles based on average charges per discharge. (A 
listing of the composition of low-volume quintiles for the FY 2007 LTC-
DRGs (based on FY 2005 MedPAR data) appears in section II.I.2. of the 
FY 2007 IPPS final rule (71 FR 47975 through 47978).) We also adjust 
for cases in which the stay at the LTCH is less than or equal to five 
sixths of the geometric average length of stay; that is, short stay 
outlier cases, as discussed below in section II.I.4. of the preamble of 
this final rule with comment period.
b. Patient Classifications into DRGs
    Generally, under the LTCH-PPS, Medicare payment is made at a 
predetermined specific rate for each discharge; that is, payment varies 
by the DRG to which a beneficiary's stay is assigned. Just as cases 
have been classified into the MS-DRGs for acute care hospitals under 
the IPPS (section II.B. of the preamble of this final rule with comment 
period), cases have been classified into MS-LTC-DRGs for payment under 
the LTCH-PPS based on the principal diagnosis, up to eight additional 
diagnoses, and up to six procedures performed during the stay, as well 
as demographic information about the patient. The diagnosis and 
procedure information is reported by the hospital using the ICD-9-CM 
coding system. Under the MS-DRGs for the IPPS and the MS-LTC-DRGs for 
the LTCH-PPS, these factors will not change.
    Section II.B. of the preamble of this final rule with comment 
period discusses the organization of the existing CMS DRGs, which we 
are maintaining under the MS-DRG and MS-LTC-DRG systems. As noted 
above, the patient classification system for the LTCH-PPS is derived 
from the IPPS DRGs and is similarly organized into 25 major diagnostic 
categories (MDCs). Most of these MDCs are based on a particular organ 
system of the body and the remainder involves multiple organ systems 
(such as MDC 22, Burns). Accordingly, the principal diagnosis 
determines MDC assignment. Within most MDCs, cases are then divided 
into surgical DRGs and medical DRGs. Under the present CMS DRGs, some 
surgical and medical DRGs are further differentiated based on the 
presence or absence of CCs. The existing LTC-DRGs are similarly 
categorized. (See section II.B. of the preamble of this final rule with 
comment period for further discussion of surgical DRGs and medical 
DRGs.)
    The MS-DRGs and the MS-LTC-DRGs contain base DRGs that have been 
subdivided into one, two, or three severity levels. The most severe 
level has cases with at least one code that is a major CC, referred to 
as ``with MCC''. The next lower severity level contains cases with at 
least one CC, referred to as ``with CC''. Those DRGs without an MCC or 
a CC are referred to as ``without CC/MCC''. When data did not support 
the creation of three severity levels, the base DRG was divided into 
either two levels or the base was not subdivided. The two-level 
subdivisions consist of one of the following subdivisions:
    <bullet> With CC/MCC.
    <bullet> Without CC/MCC.
    In this type of subdivision, cases with at least one code that is 
on the CC or MCC list are assigned to the ``with CC/MCC'' DRG. Cases 
without a CC or an MCC are assigned to the ``without CC/MCC'' DRG.
    The other type of two-level subdivision is as follows:
    <bullet> With MCC.
    <bullet> Without MCC.
    In this type of subdivision, cases with at least one code that is 
on the MCC list are assigned to the ``with MCC'' DRG. Cases that do not 
have an MCC are assigned to the ``without MCC'' DRG. This type of 
subdivision could include cases with a CC code, but no MCC.
3. Development of the FY 2008 MS-LTC-DRG Relative Weights
a. General Overview of Development of the MS-LTC-DRG Relative Weights
    As we stated in the August 30, 2002 LTCH-PPS final rule (67 FR 
55981), one of the primary goals for the implementation of the LTCH-PPS 
is to pay each LTCH an appropriate amount for the efficient delivery of 
medical care to Medicare patients. The system must be able to account 
adequately for each LTCH's case-mix in order to ensure both fair 
distribution of Medicare payments and access to adequate care for those 
Medicare patients whose care is more costly. To accomplish these goals, 
we have annually adjusted the LTCH-PPS standard Federal prospective 
payment system rate by the applicable relative weight in determining 
payment to LTCHs for each case. (As we have noted above, as proposed, 
we are adopting the MS-LTC-DRGs for the LTCH-PPS for FY 2008. However, 
this change in the patient classification system does not affect the 
basic principles of the development of relative weights under a DRG-
based prospective payment system. For purposes of clarity, in the 
general discussion below in which we describe the basic methodology of 
the patient classification system, in use since the start of the LTCH-
PPS (that is, LTC-DRGs), we use ``MS-LTC-DRG'' to specify the DRG 
system that will be used by the LTCH prospective payment system 
beginning in FY 2008.)
    Although the adoption of the MS-LTC-DRGs will result in some 
modifications of existing procedures for assigning weights in cases of 
zero volume and/or nonmonotonicity, discussed in detail in the 
following sections, as we proposed, the basic methodology for 
developing the FY 2008 MS-LTC-DRG relative weights in this final rule 
with comment period continue to be determined in accordance with the 
general methodology established in the August 30, 2002 LTCH-PPS final 
rule (67 FR 55989 through 55991). (As noted above, in this preamble, 
``LTC-DRGs'' will be used in descriptions of the basic methodology 
established at the beginning of the LTCH-PPS that will remain unchanged 
with the adoption of the MS-LTC-DRGs. Use of ``MS-LTC-DRGs'' will 
indicate a discussion of specifics aspects of our adoption of the 
severity-weighted patient classification system beginning in FY 2008.)
    Under the LTCH-PPS, relative weights for each MS-LTC-DRG are a 
primary element used to account for the variations in cost per 
discharge and resource utilization among the payment groups (Sec.  
412.515). To ensure that Medicare patients classified to each MS-LTC-
DRG have access to an appropriate level of services and to encourage 
efficiency, we calculate a relative weight for each MS-LTC-DRG that 
represents the resources needed by an average inpatient LTCH case in 
that MS-LTC-DRG. For example, cases in an MS-LTC-DRG with a relative 
weight of 2 will, on average, cost twice as much to treat as cases in 
an MS-LTC-DRG with a weight of 1.

[[Page 47282]]

b. Data
    In the FY 2008 IPPS proposed rule (72 FR 24757), to calculate the 
proposed MS-LTC-DRG relative weights for FY 2008, we obtained total 
Medicare allowable charges from FY 2006 Medicare LTCH bill data from 
the December 2006 update of the MedPAR file, which were the best 
available data at that time, and we used the proposed Version 25.0 of 
the CMS GROUPER proposed for use under the IPPS to classify cases. We 
also proposed that if more recent data were available, we would use 
those data and the finalized Version 25.0 of the CMS GROUPER. 
Consistent with that proposal, to calculate the MS-LTC-DRG relative 
weights for FY 2008 in this final rule with comment period, we obtained 
total Medicare allowable charges from FY 2006 Medicare LTCH bill data 
from the March 2007 update of the MedPAR file, which are the best 
available data at this time, and we used the Version 25.0 of the CMS 
GROUPER used under the IPPS (as discussed in section II.B. of the 
preamble of this final rule with comment period) to classify cases.
    As we discussed in the FY 2007 IPPS final rule (71 FR 47974), we 
have excluded the data from LTCHs that are all-inclusive rate providers 
and LTCHs that are reimbursed in accordance with demonstration projects 
authorized under section 402(a) of Pub. L. 90-248. Data from 
demonstration projects authorized under section 222(a) of Pub. L. 92-
603 are also excluded. Therefore, in the development of the FY 2008 MS-
LTC-DRG relative weights in this final rule with comment period, we 
have excluded the data of the 17 all inclusive rate providers and the 2 
LTCHs that are paid in accordance with demonstration projects that had 
claims in the FY 2006 MedPAR file.
c. Hospital-Specific Relative Value Methodology
    By nature, LTCHs often specialize in certain areas, such as 
ventilator-dependent patients and rehabilitation and wound care. Some 
case types (DRGs) may be treated, to a large extent, in hospitals that 
have, from a perspective of charges, relatively high (or low) charges. 
This nonarbitrary distribution of cases with relatively high (or low) 
charges in specific MS-LTC-DRGs has the potential to inappropriately 
distort the measure of average charges. To account for the fact that 
cases may not be randomly distributed across LTCHs, as we proposed, in 
this final rule with comment period, we use a hospital specific 
relative value (HSRV) method to calculate the MS-LTC-DRG relative 
weights instead of the methodology used to determine the MS-DRG 
relative weights under the IPPS described in section II.H. of the 
preamble of this final rule with comment period. We believe this method 
will remove this hospital specific source of bias in measuring LTCH 
average charges. Specifically, we reduce the impact of the variation in 
charges across providers on any particular MS-LTC-DRG relative weight 
by converting each LTCH's charge for a case to a relative value based 
on that LTCH's average charge.
    Under the HSRV method, we standardize charges for each LTCH by 
converting its charges for each case to hospital-specific relative 
charge values and then adjusting those values for the LTCH's case-mix. 
The adjustment for case-mix is needed to rescale the hospital-specific 
relative charge values (which, by definition, average 1.0 for each 
LTCH). The average relative weight for a LTCH is its case-mix, so it is 
reasonable to scale each LTCH's average relative charge value by its 
case-mix. In this way, each LTCH's relative charge value is adjusted by 
its case- mix to an average that reflects the complexity of the cases 
it treats relative to the complexity of the cases treated by all other 
LTCHs (the average case-mix of all LTCHs).
    In accordance with the methodology established under Sec.  412.523, 
as implemented in the August 30, 2002 LTCH-PPS final rule (67 FR 55989 
through 55991), we continue to standardize charges for each case by 
first dividing the adjusted charge for the case (adjusted for short-
stay outliers under Sec.  412.529 as described in section II.I.4. (step 
3) of the preamble of this final rule with comment period) by the 
average adjusted charge for all cases at the LTCH in which the case was 
treated. Short stay outliers are cases with a length of stay that is 
less than or equal to five sixths the average length of stay of the MS-
LTC (see Sec.  412.529 and Sec.  412.503). (As discussed above, we are 
revising the regulations at Sec.  412.503 to specify that regulatory 
references to LTC-DRGs for policy descriptions and/or payment 
calculations shall be considered as references to the MS-LTCs for LTCH 
discharges occurring on or after October 1, 2007). The average adjusted 
charge reflects the average intensity of the health care services 
delivered by a particular LTCH and the average cost level of that LTCH. 
The resulting ratio is multiplied by that LTCH's case-mix index to 
determine the standardized charge for the case.
    Multiplying by the LTCH's case-mix index accounts for the fact that 
the same relative charges are given greater weight at a LTCH with 
higher average costs than they would at a LTCH with low average costs, 
which is needed to adjust each LTCH's relative charge value to reflect 
its case-mix relative to the average case-mix for all LTCHs. Because we 
standardize charges in this manner, we count charges for a Medicare 
patient at a LTCH with high average charges as less resource intensive 
than they would be at a LTCH with low average charges. For example, a 
$10,000 charge for a case at a LTCH with an average adjusted charge of 
$17,500 reflects a higher level of relative resource use than a $10,000 
charge for a case at a LTCH with the same case-mix, but an average 
adjusted charge of $35,000. We believe that the adjusted charge of an 
individual case more accurately reflects actual resource use for an 
individual LTCH because the variation in charges due to systematic 
differences in the markup of charges among LTCHs is taken into account.
d. Treatment of Severity Levels in Developing Relative Weights
    With the implementation of the LTCH-PPS for FY 2003, we established 
a procedure to address setting relative weights for LTC-DRG ``pairs'' 
that were differentiated on the presence or absence of CCs (71 FR 
47979). Beginning with FY 2008, as we proposed, we are adopting a 
severity-based patient classification system for the LTCH-PPS, the MS-
LTC-DRGs described above, which requires us to adapt our existing 
procedures for dealing with setting relative weights for the severity 
levels within a specific base MS-LTC-DRG. As proposed, we are also 
modifying our existing methodology for maintaining monotonicity when 
setting relative weights for the MS-LTC-DRGs.
    As under the existing procedure, under the MS-LTC-DRGs, for 
purposes of the annual setting of the relative weights, there continue 
to be three different categories of DRGs based on volume of cases 
within specific MS-LTC-DRGs. MS-LTC-DRGs with at least 25 cases are 
each assigned a unique relative weight; low-volume MS LTC-DRGs (that 
is, MS-LTCs that contain between one and 24 cases annually) are grouped 
into quintiles (described below) and assigned the weight of the 
quintile. No-volume MS-LTC-DRGs (that is, no cases in the databases 
were assigned to those MS LTC-DRGs) are crosswalked to other MS-LTC-
DRGs based on the clinical similarities and assigned the weight of the 
quintile that is closest to the relative weight of the crosswalked MS-
LTC-DRG. (We provide in-depth discussions of our policy regarding

[[Page 47283]]

weight setting for low volume MS-LTCs in section II.I.3.e. of the 
preamble of this final rule with comment period and for no-volume MS-
LTC-DRGs, under Step 5 in section II.I.4. of the preamble of this final 
rule with comment period.)
    As described above, in response to the need to account for severity 
and pay appropriately for cases, we have developed a severity-adjusted 
patient classification system which we are adopting for both the IPPS 
and the LTCH PPS. As described in greater detail above, the MS-LTC-DRG 
system can accommodate three severity levels: ``with MCC'' (most 
severe); ``with CC,'' and ``without CC/MCC'' (the least severe) with 
each level assigned an individual MS-LTC-DRG number. In cases with two 
subdivisions, the levels are either ``with CC/MCC'' and ``without CC/
MCC'' or ``with MCC'' and ``without MCC''. Two parallel numbering 
systems have been developed to describe MS-LTC-DRGs, which are 
identical to the MS DRGs numbers under the IPPS. That is, while each 
severity level in each DRG category gets a unique MS-LTC-DRG number, in 
conjunction, each of the severity levels in a single DRG category are 
also assigned the same ``base-DRG'' number. Therefore, under the 
system, multiple sclerosis and cerebellar ataxia with MCC is MS-LTC-DRG 
58; multiple sclerosis and cerebellar ataxia with CC is MS-LTC-DRG 59; 
and multiple sclerosis and cerebellar ataxia without CC/MCC is MS-LTC-
DRG 60.
    As noted above, beginning with FY 2008, while the LTCH PPS and the 
IPPS will use the same patient classification system, the methodology 
that is used to set the DRG weights for use in each payment system 
differs because the overall volume of cases in the LTCH PPS is much 
less than in the IPPS. As a general rule, as proposed, we are 
determining the relative weights for the MS-LTC-DRGs using the 
following steps: (1) If an MS-LTC-DRG has at least 25 cases, it is 
assigned its own relative weight; (2) if an MS-LTC-DRG has between 1 
and 24 cases, it is assigned to a quintile to which we will assign a 
relative weight; and (3) if an MS-LTC-DRG has no cases, it is 
crosswalked to another MS-LTC-DRG based upon clinical similarities to 
assign an appropriate relative weight (as described in detail in Step 5 
of the Steps for Determining the FY 2008 MS-LTC-DRG Relative Weights, 
below). Furthermore, in determining the MS-LTC-DRG relative weights, as 
proposed, when necessary, adjustments were made to account for 
nonmonotonicity, as explained below.
    Theoretically, as with the existing LTC-DRG system, cases under the 
MS-LTC-DRG system that are more severe require greater expenditure of 
medical care resources and will result in higher average charges. 
Therefore, in the three severity levels, weights should increase with 
severity, from lowest to highest. If the weights do not increase (that 
is, if based on the relative weight calculation outlined above, an MS-
LTC-DRG with MCC would have a lower relative weight than one with CC, 
or the MS-LTC-DRG without CC/MCC would have a higher relative weight 
than either of the others), there is a problem with monotonicity. Since 
the start of the LTCH PPS for FY 2003 (67 FR 55990), we have adjusted 
the setting of the LTC-DRG relative weights in order to maintain 
monotonicity by grouping both sets of cases together and establishing a 
new relative weight that is assigned to both LTC-DRGs. We continue to 
believe that utilizing nonmonotonic relative weights to adjust Medicare 
payments would result in inappropriate payments. This is because when 
nonmonotonicity exists, cases that are more severe and require greater 
expenditure of medical care resources would be paid based on a lower 
relative weight than cases that are less severe and require lower 
resource use. Similarly, as proposed, we are establishing a procedure 
for dealing with nonmonotonicity under the MS-LTC-DRG classification 
system, which is discussed in greater detail below in section II.I.4. 
(Step 6) of the preamble of this final rule with comment period.
e. Low-Volume MS-LTC-DRGs
    In order to account for LTC-DRGs with low volume (that is, with 
fewer than 25 LTCH cases), under current policy, in accordance with the 
methodology established in the August 30, 2002 LTCH PPS final rule (67 
FR 55984--55995), we group those ``low-volume LTC-DRGs'' (that is, DRGs 
that contained between 1 and 24 cases annually) into one of five 
categories (quintiles) based on average charges, for the purposes of 
determining relative weights. For this FY 2008 IPPS final rule, as we 
proposed, we are continuing to employ this treatment of low-volume MS-
LTC-DRGs with a modification to combine MS-LTC-DRGs for the purpose of 
computing a relative weight in cases where necessary to maintain 
monotonicity in determining the FY 2008 MS-LTC-DRG relative weights 
using the best available LTCH data. In this final rule with comment 
period, using LTCH cases from the March 2007 update of the FY 2006 
MedPAR file, we identified 303 MS-LTC-DRGs that contained between 1 and 
24 cases. This list of MS-LTC-DRGs was then divided into one of the 5 
low-volume quintiles, each containing a maximum of 61 MS-LTC-DRGs (303/
5 = 60, with a remainder of 3 MS-LTC-DRGs). Consistent with our current 
methodology, as proposed, we are making an assignment to a specific 
low-volume quintile by sorting the low-volume MS-LTC DRGs in ascending 
order by average charge. For this final rule with comment period, this 
results in an assignment to a specific low-volume quintile of the 
sorted 303 low-volume MS-LTC-DRGs by ascending order by average charge. 
Because the number of low-volume MS-LTC-DRGs for FY 2008 is not evenly 
divisible by five, to determine the composition of the low-volume 
quintiles in accordance with our established methodology, the average 
charge of the low-volume MS-LTC-DRG was used to determine which low-
volume quintile received the additional MS-LTC-DRGs. After sorting the 
303 low-volume MS-LTC-DRGs in ascending order, we grouped the first 
fifth (1st through 60th) of low volume MS-LTC-DRGs (with the lowest 
average charge) into Quintile 1. Because the average charge of the 61st 
MS-LTC-DRG in the sorted list is closer to the 60th MS-LTC-DRGs average 
charge (assigned to Quintile 1) than to the average charge of the 62nd 
MS-LTC-DRG in the sorted list (to be assigned to Quintile 2), we placed 
the 61st MS-LTC-DRG into Quintile 1. This process was repeated through 
the remaining low-volume MS-LTC-DRGs so that 3 low volume quintiles 
contain 61 MS-LTC-DRGs and 2 low-volume quintiles contain 60 MS-LTC-
DRGs. The highest average charge cases were grouped into Quintile 5.
    In order to determine the relative weights for the MS-LTC-DRGs with 
low-volume for FY 2008, based on the methodology established in the 
August 30, 2002 LTCH PPS final rule (67 FR 55984), as proposed, we are 
using the five low-volume quintiles described above. In addition, as 
proposed, in cases where the initial assignment of the low-volume MS-
LTC-DRGs to quintiles results in nonmonotonicity within a base DRG, in 
order to ensure appropriate Medicare payments, we make adjustments to 
the treatment of low-volume MS-LTC-DRGs to preserve monotonicity, as 
discussed in detail in section II.I.4 (Step 6 of the methodology for 
determining the FY 2008 MS-LTC-DRG relative weights). The composition 
of each of the five low-volume quintiles shown in the chart below was 
used in determining the MS-LTC-DRG relative weights for FY 2008. We 
determine a

[[Page 47284]]

relative weight and (geometric) average length of stay for each of the 
five low-volume quintiles using the methodology that we apply to the 
regular MS-LTC-DRGs (25 or more cases), as described below in section 
II.I.4. of the preamble of this final rule with comment period. We are 
assigning the same relative weight and average length of stay to each 
of the MS-LTC-DRGs that make up an individual low-volume quintile. We 
note that, as this system is dynamic, it is possible that the number 
and specific type of MS-LTC-DRGs with a low volume of LTCH cases will 
vary in the future. We use the best available claims data in the MedPAR 
file to identify low-volume MS-LTC-DRGs and to calculate the relative 
weights based on our methodology.

             Composition of Low-Volume Quintiles for FY 2008
------------------------------------------------------------------------
      MS-LTC-DRG               MS-LTC-DRG (version 25) description
------------------------------------------------------------------------
            QUINTILE 1 (Version 25 relative weight = 0.4739)
------------------------------------------------------------------------
30....................  Spinal procedures w/o CC/MCC.
32....................  Ventricular shunt procedures w CC.
33....................  Ventricular shunt procedures w/o CC/MCC.
60....................  Multiple sclerosis & cerebellar ataxia w/o CC/
                         MCC.
66....................  Intracranial hemorrhage or cerebral infarction w/
                         o CC/MCC.
67....................  Nonspecific cva & precerebral occlusion w/o
                         infarct w MCC.
68....................  Nonspecific cva & precerebral occlusion w/o
                         infarct w/o MCC.
69....................  Transient ischemia.
72....................  Nonspecific cerebrovascular disorders w/o CC/
                         MCC.
76....................  Viral meningitis w/o CC/MCC.
79....................  Hypertensive encephalopathy w/o CC/MCC.
88....................  Concussion w MCC***.
122...................  Acute major eye infections w/o CC/MCC.
123...................  Neurological eye disorders.
133...................  Other ear, nose, mouth & throat O.R. procedures
                         w CC/MCC***.
149...................  Dysequilibrium.
159...................  Dental & Oral Diseases w/o CC/MCC.
182...................  Respiratory neoplasms w/o CC/MCC.
183...................  Major chest trauma w MCC.
184...................  Major chest trauma w CC**.
201...................  Pneumothorax w/o CC/MCC.
261...................  Cardiac pacemaker revision except device
                         replacement w CC.
313...................  Chest pain.
328...................  Stomach, esophageal & duodenal proc w/o CC/MCC.
331...................  Major small & large bowel procedures w/o CC/MCC.
349...................  Anal & stomal procedures w/o CC/MCC.
376...................  Digestive malignancy w/o CC/MCC.
379...................  G.I. hemorrhage w/o CC/MCC.
434...................  Cirrhosis & alcoholic hepatitis w/o CC/MCC.
446...................  Disorders of the biliary tract w/o CC/MCC.
505...................  Foot procedures w/o CC/MCC.
512...................  Shoulder,elbow or forearm proc,exc major joint
                         proc w/o CC/MCC.
544...................  Pathological fractures & musculoskelet & conn
                         tiss malig w/o CC/MCC.
547...................  Connective tissue disorders w/o CC/MCC.
563...................  Fx, sprn, strn & disl except femur, hip, pelvis
                         & thigh w/o MCC.
645...................  Endocrine disorders w/o CC/MCC.
661...................  Kidney & ureter procedures for non-neoplasm w/o
                         CC/MCC.
688...................  Kidney & urinary tract neoplasms w/o CC/MCC.
696...................  Kidney & urinary tract signs & symptoms w/o MCC.
714...................  Transurethral prostatectomy w/o CC/MCC.
718...................  Other male reproductive system O.R. proc exc
                         malignancy w/o CC/MCC.
724...................  Malignancy, male reproductive system w/o CC/MCC.
726...................  Benign prostatic hypertrophy w/o MCC.
756...................  Malignancy, female reproductive system w/o CC/
                         MCC.
759...................  Infections, female reproductive system w/o CC/
                         MCC.
761...................  Menstrual & other female reproductive system
                         disorders w/o CC/MCC.
825...................  Lymphoma & non-acute leukemia w other O.R. proc
                         w/o CC/MCC.
836...................  Acute leukemia w/o major O.R. procedure w/o CC/
                         MCC.
869...................  Other infectious & parasitic diseases diagnoses
                         w/o CC/MCC.
880...................  Acute adjustment reaction & psychosocial
                         dysfunction.
881...................  Depressive neuroses.
882...................  Neuroses except depressive.
883...................  Disorders of personality & impulse control.
886...................  Behavioral & developmental disorders.
894...................  Alcohol/drug abuse or dependence, left ama.
95....................  Alcohol/drug abuse or dependence w
                         rehabilitation therapy.
897...................  Alcohol/drug abuse or dependence w/o
                         rehabilitation therapy w/o MCC.
906...................  Hand procedures for injuries.
916...................  Allergic reactions w/o MCC.
922...................  Other injury, poisoning & toxic effect diag w
                         MCC.
923...................  Other injury, poisoning & toxic effect diag w/o
                         MCC.

[[Page 47285]]

 
965...................  Other multiple significant trauma w/o CC/MCC.
------------------------------------------------------------------------
            QUINTILE 2 (Version 25 relative weight = 0.6478)
------------------------------------------------------------------------
42....................  Periph & cranial nerve & other nerv syst proc w/
                         o CC/MCC.
58....................  Multiple sclerosis & cerebellar ataxia w MCC.
75....................  Viral meningitis w CC/MCC.
77....................  Hypertensive encephalopathy w MCC.
78....................  Hypertensive encephalopathy w CC**.
83....................  Traumatic stupor & coma, coma >1 hr w MCC.
84....................  Traumatic stupor & coma, coma >1 hr w/o CC/MCC.
99....................  Non-bacterial infect of nervous sys exc viral
                         meningitis w/o CC/MCC.
102...................  Headaches w MCC***.
113...................  Orbital procedures w CC/MCC.
121...................  Acute major eye infections w CC/MCC.
133...................  Other ear, nose, mouth & throat O.R. procedures
                         w CC/MCC**.
134...................  Other ear, nose, mouth & throat O.R. procedures
                         w/o CC/MCC**.
148...................  Ear, nose, mouth & throat malignancy w/o CC/MCC.
152...................  Otitis media & URI w MCC.
153...................  Otitis media & URI w/o MCC.
156...................  Nasal trauma & deformity w/o CC/MCC.
157...................  Dental & Oral Diseases w MCC***.
184...................  Major chest trauma w CC***.
188...................  Pleural effusion w/o CC/MCC*.
200...................  Pneumothorax w MCC.
245...................  AICD lead & generator procedures.
282...................  Circulatory disorders w AMI, discharged alive w/
                         o CC/MCC.
284...................  Circulatory disorders w AMI, expired w CC*.
311...................  Angina pectoris.
336...................  Peritoneal adhesiolysis w MCC.
382...................  Complicated peptic ulcer w/o CC/MMCC.
384...................  Uncomplicated peptic ulcer w/o MCC.
433...................  Cirrhosis & alcoholic hepatitis w CC*.
437...................  Malignancy of hepatobiliary system or pancreas w/
                         o CC/MCC.
443...................  Disorders of liver except malig,cirr,alc hepa w/
                         o CC/MCC.
499...................  Local excision & removal int fix devices of hip
                         & femur w/o CC/MCC.
514...................  Hand or wrist proc, except major thumb or joint
                         proc w/o CC/MCC.
534...................  Fractures of femur w/o MCC.
535...................  Fractures of hip & pelvis w MCC.
555...................  Signs & symptoms of musculoskeletal system &
                         conn tissue w MCC.
556...................  Signs & symptoms of musculoskeletal system &
                         conn tissue w/o MCC.
578...................  Skin graft &/or debrid exc for skin ulcer or
                         cellulitis w/o CC/MCC.
598...................  Malignant breast disorders w MCC.
599...................  Malignant breast disorders w/o CC/MCC**.
600...................  Non-malignant breast disorders w CC/MCC.
601...................  Non-malignant breast disorders w/o CC/MCC.
630...................  Other endocrine, nutrit & metab O.R. proc w/o CC/
                         MCC.
642...................  Inborn errors of metabolism.
660...................  Kidney & ureter procedures for non-neoplasm w
                         MCC.
687...................  Kidney & urinary tract neoplasms w CC.
693...................  Urinary stones w/o esw lithotripsy w MCC.
694...................  Urinary stones w/ot esw lithotripsy w/o MCC**.
723...................  Malignancy, male reproductive system w CC.
730...................  Other male reproductive system diagnoses w/o CC/
                         MCC.
769...................  Postpartum & post abortion diagnoses w O.R.
                         procedure.
803...................  Other O.R. proc of the blood & blood forming
                         organs w CC.
815...................  Reticuloendothelial & immunity disorders w CC.
816...................  Reticuloendothelial & immunity disorders w/o CC/
                         MCC**.
842...................  Lymphoma & non-acute leukemia w/o CC/MCC.
848...................  Chemotherapy w/o acute leukemia as secondary
                         diagnosis w/o CC/MCC.
855...................  Infectious & parasitic diseases w O.R. procedure
                         w/o CC/MCC.
864...................  Fever of unknown origin.
876...................  O.R. procedure w principal diagnoses of mental
                         illness.
903...................  Wound debridements for injuries w/o CC/MCC.
905...................  Skin grafts for injuries w/o CC/MCC.
917...................  Poisoning & toxic effects of drugs w MCC.
918...................  Poisoning & toxic effects of drugs w/o MCC.
929...................  Full thickness burn w skin graft or inhal inj w/
                         o CC/MCC.
956...................  Limb reattachment, hip & femur proc for multiple
                         significant trauma.
964...................  Other multiple significant trauma w CC.
977...................  HIV w or w/o other related condition.
------------------------------------------------------------------------

[[Page 47286]]

 
            QUINTILE 3 (Version 25 relative weight = 0.7790)
------------------------------------------------------------------------
78....................  Hypertensive encephalopathy w CC***.
102...................  Headaches w MCC**.
103...................  Headaches w/o MCC**.
125...................  Other disorders of the eye w/o MCC.
157...................  Dental & Oral Diseases w MCC**.
158...................  Dental & Oral Diseases w CC.
199...................  Pneumothorax w MCC.
238...................  Major cardiovascular procedures w/o MCC.
246...................  Percutaneous cardiovascular proc w drug-eluting
                         stent w MCC.
250...................  Perc cardiovasc proc w/o coronary artery stent
                         or AMI w MCC.
254...................  Other vascular procedures w/o CC/MCC.
263...................  Vein ligation & stripping 285 Circulatory
                         disorders w AMI, expired w/o CC/MCC*.
287...................  Circulatory disorders except AMI, w card cath w/
                         o MCC.
294...................  Deep vein thrombophlebitis w CC/MCC.
304...................  Hypertension w MCC.
348...................  Anal & stomal procedures w CC.
352...................  Inguinal & femoral hernia procedures w/o CC/MCC.
354...................  Hernia procedures except inguinal & femoral w
                         CC.
358...................  Other digestive system O.R. procedures w/o CC/
                         MCC.
380...................  Complicated peptic ulcer w MCC.
381...................  Complicated peptic ulcer w CC.
383...................  Uncomplicated peptic ulcer w MCC.
387...................  Inflammatory bowel disease w/o CC/MCC*.
390...................  G.I. obstruction w/o CC/MCC*.
421...................  Hepatobiliary diagnostic procedures w CC.
424...................  Other hepatobiliary or pancreas O.R. procedures
                         w CC.
494...................  Lower extrem & humer proc except hip,foot,femur
                         w/o CC/MCC.
502...................  Soft tissue procedures w/o CC/MCC.
504...................  Foot procedures w CC.
507...................  Major shoulder or elbow joint procedures w CC/
                         MCC.
517...................  Other musculoskelet sys & conn tiss O.R. proc w/
                         o CC/MCC.
533...................  Fractures of femur w MCC.
553...................  Bone diseases & arthropathies w MCC.
597...................  Malignant breast disorders w MCC.
599...................  Malignant breast disorders w/o CC/MCC***.
604...................  Trauma to the skin, subcut tiss & breast w MCC.
618...................  Amputat of lower limb for endocrine,nutrit,&
                         metabol dis w/o CC/MCC.
619...................  O.R. procedures for obesity w MCC.
620...................  O.R. procedures for obesity w CC**.
624...................  Skin grafts & wound debrid for endoc, nutrit &
                         metab dis w/o CC/MCC.
644...................  Endocrine disorders w CC.
657...................  Kidney & ureter procedures forneoplasm w CC.
662...................  Minor bladder procedures w MCC.
665...................  Prostatectomy w MCC.
694...................  Urinary stones w/ot esw lithotripsy w/o MCC***.
695...................  Kidney & urinary tract signs & symptoms w MCC.
722...................  Malignancy, male reproductive system w MCC.
744...................  D&C, conization, laparascopy & tubal
                         interruption w CC/MCC.
746...................  Vagina, cervix & vulva procedures w CC/MCC.
749...................  Other female reproductive system O.R. procedures
                         w CC/MCC.
755...................  Malignancy, female reproductive system w CC.
809...................  Major hematol/immun diag exc sickle cell crisis
                         & coagul w CC.
810...................  Major hematol/immun diag exc sickle cell crisis
                         & coagul w/o CC/MCC.
816...................  Reticuloendothelial & immunity disorders w/o CC/
                         MCC***.
821...................  Lymphoma & leukemia w major O.R. procedure w CC.
826...................  Myeloprolif disord or poorly diff neopl w maj
                         O.R. proc w MCC.
835...................  Acute leukemia w/o major O.R. procedure w CC.
838...................  Chemo w acute leukemia as sdx or w high dose
                         chemo agent w CC.
843...................  Other myeloprolif dis or poorly diff neopl diag
                         w MCC***.
844...................  Other myeloprolif dis or poorly diff neopl diag
                         w CC***.
896...................  Alcohol/drug abuse or dependence w/o
                         rehabilitation therapy w MCC.
909...................  Other O.R. procedures for injuries w/o CC/MCC.
989...................  Non-extensive O.R. proc unrelated to principal
                         diagnosis w/o CC/MCC.
------------------------------------------------------------------------
            QUINTILE 4 (Version 25 relative weight = 1.0810)
------------------------------------------------------------------------
28....................  Spinal procedures w MCC.
29....................  Spinal procedures w CC.
38....................  Extracranial procedures w CC.

[[Page 47287]]

 
53....................  Spinal disorders & injuries w/o CC/MCC*.
88....................  Concussion w MCC**.
89....................  Concussion w CC.
103...................  Headaches w/o MCC***.
124...................  Other disorders of the eye w MCC.
168...................  Other resp system O.R. procedures w/o CC/MCC.
241...................  Amputation for circ sys disorders exc upper limb
                         & toe w/o CC/MCC.
242...................  Permanent cardiac pacemaker implant w MCC***.
244...................  Permanent cardiac pacemaker implant w/o CC/MCC.
257...................  Upper limb & toe amputation for circ system
                         disorders w/o CC/MCC*.
286...................  Circulatory disorders except AMI, w card cath w
                         MCC.
347...................  Anal & stomal procedures w MCC.
351...................  Inguinal & femoral hernia procedures w CC.
368...................  Major esophageal disorders w MCC.
369...................  Major esophageal disorders w CC.
370...................  Major esophageal disorders w/o CC/MCC**.
407...................  Pancreas, liver & shunt procedures w/o CC/MCC.
408...................  Biliary tract proc except only cholecyst w or w/
                         o c.d.e. w MCC***.
412...................  Cholecystectomy w c.d.e. w CC.
414...................  Cholecystectomy except by laparoscope w/o c.d.e.
                         w MCC.
415...................  Cholecystectomy except by laparoscope w/o c.d.e.
                         w CC.
418...................  Laparoscopic cholecystectomy w/o c.d.e. w CC.
420...................  Hepatobiliary diagnostic procedures w MCC.
423...................  Other hepatobiliary or pancreas O.R. procedures
                         w MCC.
476...................  Amputation for musculoskeletal sys & conn tissue
                         dis w/o CC/MCC*.
478...................  Biopsies of musculoskeletal system & connective
                         tissue w CC.
479...................  Biopsies of musculoskeletal system & connective
                         tissue w/o CC/MCC.
482...................  Hip & femur procedures except major joint w/o CC/
                         MCC.
486...................  Knee procedures w pdx of infection w CC.
487...................  Knee procedures w pdx of infection w/o CC/MCC.
490...................  Back & neck procedures except spinal fusion w CC/
                         MCC or disc devices
493...................  Lower extrem & humer proc except hip, foot,
                         femur w CC.
497...................  Local excision & removal int fix devices exc hip
                         & femur w/o CC/MCC.
503...................  Foot procedures w MCC.
511...................  Shoulder,elbow or forearm proc,exc major joint
                         proc w CC.
516...................  Other musculoskelet sys & conn tiss O.R. proc w
                         CC.
562...................  Fx, sprn, strn & disl except femur, hip, pelvis
                         & thigh w MCC.
577...................  Skin graft &/or debrid exc for skin ulcer or
                         cellulitis w CC.
584...................  Breast biopsy, local excision & other breast
                         procedures w CC/MCC.
620...................  O.R. procedures for obesity w CC***.
659...................  Kidney & ureter procedures for non-neoplasm w
                         MCC.
667...................  Prostatectomy w/o CC/MCC.
675...................  Other kidney & urinary tract procedures w/o CC/
                         MCC.
709...................  Penis procedures w CC/MCC.
711...................  Testes procedures w CC/MCC.
717...................  Other male reproductive system O.R. proc exc
                         malignancy w CC/MCC.
725...................  Benign prostatic hypertrophy w MCC.
754...................  Malignancy, female reproductive system w MCC.
760...................  Menstrual & other female reproductive system
                         disorders w CC/MCC.
776...................  Postpartum & post abortion diagnoses w/o O.R.
                         procedure.
781...................  Other antepartum diagnoses w medical
                         complications.
823...................  Lymphoma & non-acute leukemia w other O.R. proc
                         w MCC.
824...................  Lymphoma & non-acute leukemia w other O.R. proc
                         w CC.
834...................  Acute leukemia w/o major O.R. procedure w MCC.
843...................  Other myeloprolif dis or poorly diff neopl diag
                         w MCC**.
844...................  Other myeloprolif dis or poorly diff neopl diag
                         w CC**.
845...................  Other myeloprolif dis or poorly diff neopl diag
                         w/o CC/MCC**.
928...................  Full thickness burn w skin graft or inhal inj w
                         CC/MCC.
958...................  Other O.R. procedures for multiple significant
                         trauma w CC.
983...................  Extensive O.R. procedure unrelated to principal
                         diagnosis w/o CC/MCC.
985...................  Prostatic O.R. procedure unrelated to principal
                         diagnosis w CC.
986...................  Prostatic O.R. procedure unrelated to principal
                         diagnosis w/o CC/MCC.
------------------------------------------------------------------------
            QUINTILE 5 (Version 25 relative weight = 1.5863)
------------------------------------------------------------------------
12....................  Tracheostomy for face,mouth & neck diagnoses w
                         CC.
26....................  Craniotomy & endovascular intracranial
                         procedures w CC.
31....................  Ventricular shunt procedures w MCC.
37....................  Extracranial procedures w MCC.
131...................  Cranial/facial procedures w CC/MCC.
134...................  Other ear, nose, mouth & throat O.R. procedures
                         w/o CC/MCC***.

[[Page 47288]]

 
137...................  Mouth procedures w CC/MCC.
139...................  Salivary gland procedures 164 Major chest
                         procedures w CC.
226...................  Cardiac defibrillator implant w/o cardiac cath w
                         MCC.
227...................  Cardiac defibrillator implant w/o cardiac cath w/
                         o MCC.
237...................  Major cardiovascular procedures w MCC.
242...................  Permanent cardiac pacemaker implant w MCC**.
243...................  Permanent cardiac pacemaker implant w CC.
248...................  Percutaneous cardiovasc proc w non-drug-eluting
                         stent w MCC.
258...................  Cardiac pacemaker device replacement w MCC.
260...................  Cardiac pacemaker revision except device
                         replacement w MCC.
327...................  Stomach, esophageal & duodenal proc w CC.
329...................  Major small & large bowel procedures w MCC.
330...................  Major small & large bowel procedures w CC.
335...................  Peritoneal adhesiolysis w MCC.
350...................  Inguinal & femoral hernia procedures w MCC.
370...................  Major esophageal disorders w/o CC/MCC***.
405...................  Pancreas, liver & shunt procedures w MCC.
406...................  Pancreas, liver & shunt procedures w CC.
408...................  Biliary tract proc except only cholecyst w or w/
                         o c.d.e. w MCC**.
409...................  Biliary tract proc except only cholecyst w or w/
                         o c.d.e. w CC.
417...................  Laparoscopic cholecystectomy w/o c.d.e. w MCC.
454...................  Combined anterior/posterior spinal fusion w CC.
456...................  Spinal fusion exc cerv w spinal curv, malig or
                         9+ fusions w MCC.
459...................  Spinal fusion except cervical w MCC.
460...................  Spinal fusion except cervical w/o MCC.
466...................  Revision of hip or knee replacement w MCC.
467...................  Revision of hip or knee replacement w CC.
469...................  Major joint replacement or reattachment of lower
                         extremity w MCC.
470...................  Major joint replacement or reattachment of lower
                         extremity w/o MCC.
471...................  Cervical spinal fusion w MCC.
472...................  Cervical spinal fusion w CC.
477...................  Biopsies of musculoskeletal system & connective
                         tissue w MCC.
480...................  Hip & femur procedures except major joint w MCC.
481...................  Hip & femur procedures except major joint w CC.
485...................  Knee procedures w pdx of infection w MCC.
488...................  Knee procedures w/o pdx of infection w CC/MCC.
492...................  Lower extrem & humer proc except hip, foot,
                         femur w MCC.
498...................  Local excision & removal int fix devices of hip
                         & femur w CC/MCC.
513...................  Hand or wrist proc, except major thumb or joint
                         proc w CC/MCC.
576...................  Skin graft &/or debrid exc for skin ulcer or
                         cellulitis w MCC.
582...................  Mastectomy for malignancy w CC/MCC.
664...................  Minor bladder procedures w/o CC/MCC.
668...................  Transurethral procedures w MCC.
669...................  Transurethral procedures w CC.
691...................  Urinary stones w esw lithotripsy w CC/MCC.
713...................  Transurethral prostatectomy w CC/MCC.
715...................  Other male reproductive system O.R. proc for
                         malignancy w CC/MCC.
802...................  Other O.R. proc of the blood & blood forming
                         organs w MCC.
829...................  Myeloprolif disord or poorly diff neopl w other
                         O.R. proc w CC/MCC.
837...................  Chemo w acute leukemia as sdx or w high dose
                         chemo agent w MCC.
845...................  Other myeloprolif dis or poorly diff neopl diag
                         w/o CC/MCC***.
933...................  Extensive burns or full thickness burns w MV 96+
                         hrs w/o skin graft.
957...................  Other O.R. procedures for multiple significant
                         trauma w MCC.
963...................  Other multiple significant trauma w MCC.
969...................  HIV w extensive O.R. procedure w MCC.
984...................  Prostatic O.R. procedure unrelated to principal
                         diagnosis w MCC.
------------------------------------------------------------------------
*One of the original 303 low-volume MS LTC-DRGs initially assigned to
  this low-volume quintile; removed from this low-volume quintile in
  addressing nonmonotonicity (see step 6 in section II.I.4.below).
**One of the original 303 low-volume MS LTC-DRGs initially assigned to a
  different low-volume quintile but moved to this low-volume quintile in
  addressing nonmonotonicity (see step 6 in section II.I.4 below).
***One of the original 303 low-volume MS LTC-DRGs initially assigned to
  this low-volume quintile but moved to a different low-volume quintile
  in addressing nonmonotonicity (see step 6 in section II.I.4 below).

    We note that we will continue to monitor the volume (that is, the 
number of LTCH cases) in these low-volume quintiles to ensure that our 
quintile assignment results in appropriate payment for such cases and 
does not result in an unintended financial incentive for LTCHs to 
inappropriately admit these types of cases.
4. Steps for Determining the FY 2008 MS-LTC-DRG Relative Weights
    As we noted previously, although the adoption of the MS-LTC-DRGs 
with three severity levels results in some

[[Page 47289]]

slight modifications of existing procedures for assigning weights in 
cases of zero volume and/or nonmonotonicity, described in detail 
elsewhere in this section, as proposed, the FY 2008 MS-LTC-DRG relative 
weights in this final rule with comment period are based on the 
methodology established in the August 30, 2002 LTCH PPS final rule (67 
FR 55989 through 55991). In summary, for FY 2008, LTCH cases are 
grouped to the appropriate MS-LTC-DRG, while taking into account the 
low volume MS-LTC-DRGs as described above, before the FY 2008 MS-LTC-
DRG relative weights can be determined. After grouping the cases to the 
appropriate MS-LTC-DRG, we calculate the relative weights for FY 2008 
by first removing statistical outliers and cases with a length of stay 
of 7 days or less, as discussed in greater detail below. Next, we 
adjust the number of cases in each MS-LTC-DRG for the effect of short-
stay outlier cases, as also discussed in greater detail below. The 
short-stay adjusted discharges and corresponding charges are used to 
calculate ``relative adjusted weights'' in each MS-LTC-DRG using the 
HSRV method described above.
    Below we discuss in detail the steps for calculating the FY 2008 
MS-LTC-DRG relative weights. We note that, as we stated above in 
section II.I.3.b. of the preamble of this final rule with comment 
period, we have excluded the data of all-inclusive rate LTCHs and LTCHs 
that are paid in accordance with demonstration projects that had claims 
in the FY 2006 MedPAR file.
    Step 1--Remove statistical outliers.
    The first step in the calculation of the FY 2008 MS-LTC-DRG 
relative weights is to remove statistical outlier cases. We define 
statistical outliers as cases that are outside of 3.0 standard 
deviations from the mean of the log distribution of both charges per 
case and the charges per day for each MS-LTC-DRG. These statistical 
outliers are removed prior to calculating the relative weights. As 
noted above, we believe that they may represent aberrations in the data 
that distort the measure of average resource use. Including those LTCH 
cases in the calculation of the relative weights could result in an 
inaccurate relative weight that does not truly reflect relative 
resource use among the MS-LTC-DRGs.
    Step 2--Remove cases with a length of stay of 7 days or less.
    The FY 2008 MS-LTC-DRG relative weights reflect the average of 
resources used on representative cases of a specific type. Generally, 
cases with a length of stay of 7 days or less do not belong in a LTCH 
because these stays do not fully receive or benefit from treatment that 
is typical in a LTCH stay, and full resources are often not used in the 
earlier stages of admission to a LTCH. As explained above, if we were 
to include stays of 7 days or less in the computation of the FY 2008 
MS-LTC-DRG relative weights, the value of many relative weights would 
decrease and, therefore, payments would decrease to a level that may no 
longer be appropriate. We do not believe that it would be appropriate 
to compromise the integrity of the payment determination for those LTCH 
cases that actually benefit from and receive a full course of treatment 
at a LTCH, by including data from these very short-stays. Thus, as 
explained above, in determining the FY 2008 MS-LTC-DRG relative 
weights, as we proposed, we remove LTCH cases with a length of stay of 
7 days or less.
    Step 3--Adjust charges for the effects of short-stay outliers.
    After removing cases with a length of stay of 7 days or less, we 
are left with cases that have a length of stay of greater than or equal 
to 8 days. The next step in the calculation of the FY 2008 MS-LTC-DRG 
relative weights is to adjust each LTCH's charges per discharge for 
those remaining cases for the effects of short-stay outliers (as 
defined in Sec.  412.529(a) in conjunction with Sec.  412.503 for LTCH 
discharges occurring on or after October 1, 2007). (We note that even 
if a case was removed in Step 2 (that is, cases with a length of stay 
of 7 days or less), it was paid as a short-stay outlier if its length 
of stay was less than or equal to five-sixths of the average length of 
stay of the MS-LTC-DRG, in accordance with Sec.  412.529. As discussed 
above, we are revising the regulations at Sec.  412.503 to specify that 
regulatory references to LTC-DRGs for policy descriptions and/or 
payment calculations shall be considered as references to the MS-LTC-
DRGs for LTCH discharges occurring on or after October 1, 2007.)
    We make this adjustment by counting a short-stay outlier as a 
fraction of a discharge based on the ratio of the length of stay of the 
case to the average length of stay for the MS-LTC-DRG for non-short-
stay outlier cases. This has the effect of proportionately reducing the 
impact of the lower charges for the short-stay outlier cases in 
calculating the average charge for the MS-LTC-DRG. This process 
produces the same result as if the actual charges per discharge of a 
short-stay outlier case were adjusted to what they would have been had 
the patient's length of stay been equal to the average length of stay 
of the MS-LTC-DRG.
    As we explained in the FY 2008 IPPS proposed rule (72 FR 24765), 
counting short-stay outlier cases as full discharges with no adjustment 
in determining the MS-LTC-DRG relative weights would lower the MS-LTC-
DRG relative weight for affected MS-LTC-DRGs because the relatively 
lower charges of the short-stay outlier cases would bring down the 
average charge for all cases within an MS-LTC-DRG. This would result in 
an ``underpayment'' for non-short-stay outlier cases and an 
``overpayment'' for short-stay outlier cases. Therefore, as we 
proposed, we adjust for short-stay outlier cases under Sec.  412.529 in 
this manner because it results in more appropriate payments for all 
LTCH cases.
    Step 4--Calculate the FY 2008 MS-LTC-DRG relative weights on an 
iterative basis.
    The process of calculating the MS-LTC-DRG relative weights using 
the HSRV methodology is iterative. First, for each LTCH case, we 
calculate a hospital-specific relative charge value by dividing the 
short-stay outlier adjusted charge per discharge (see step 3) of the 
LTCH case (after removing the statistical outliers (see step 1)) and 
LTCH cases with a length of stay of 7 days or less (see step 2) by the 
average charge per discharge for the LTCH in which the case occurred. 
The resulting ratio is then multiplied by the LTCH's case-mix index to 
produce an adjusted hospital-specific relative charge value for the 
case. An initial case-mix index value of 1.0 is used for each LTCH.
    For each MS-LTC-DRG, as we proposed, the FY 2008 relative weight is 
calculated by dividing the average of the adjusted hospital-specific 
relative charge values (from above) for the MS-LTC-DRG by the overall 
average hospital-specific relative charge value across all cases for 
all LTCHs. Using these recalculated MS-LTC-DRG relative weights, each 
LTCH's average relative weight for all of its cases (case-mix) is 
calculated by dividing the sum of all the LTCH's MS-LTC-DRG relative 
weights by its total number of cases. The LTCHs' hospital-specific 
relative charge values above are multiplied by these hospital-specific 
case-mix indexes. These hospital-specific case-mix adjusted relative 
charge values are then used to calculate a new set of MS-LTC-DRG 
relative weights across all LTCHs. This iterative process is continued 
until there is convergence between the weights produced at adjacent 
steps, for example, when the maximum difference is less than 0.0001.
    Step 5--Determine an FY 2008 relative weight for MS-LTC-DRGs with 
no LTCH cases.

[[Page 47290]]

    As we stated above, we determine the relative weight for each MS-
LTC-DRG using total Medicare allowable charges reported in the best 
available LTCH claims data (that is, the March 2007 update of the FY 
2006 MedPAR file for this final rule with comment period). Of the FY 
2008 MS-LTC-DRGs, we identified a number of MS-LTC-DRGs for which there 
were no LTCH cases in the database. That is, based on data from the FY 
2006 MedPAR file used in this final rule with comment period, no 
patients who would have been classified to those MS-LTC-DRGs were 
treated in LTCHs during FY 2006 and, therefore, no charge data were 
reported for those MS-LTC-DRGs. Thus, in the process of determining the 
MS-LTC-DRG relative weights, we are unable to determine weights for 
these MS-LTC-DRGs with no LTCH cases using the methodology described in 
Steps 1 through 4 above. However, because patients with a number of the 
diagnoses under these MS-LTC-DRGs may be treated at LTCHs beginning in 
FY 2008, for this final rule with comment period, as we proposed, we 
are assigning relative weights to each of the no-volume MS-LTC-DRGs 
based on clinical similarity and relative costliness with the exception 
of ``transplant'' MS-LTC-DRGs and ``error'' MS-LTC-DRGs (as discussed 
below). In general, as we proposed, we determined relative weights for 
the MS-LTC-DRGs with no LTCH cases in the FY 2006 MedPAR file used in 
this final rule with comment period by crosswalking these MS-LTC-DRGs 
to other MS-LTC-DRGs and then assigning them the relative weight of the 
appropriate low-volume quintile (as described in greater detail below).
    Specifically, as we stated above, we determine the relative weight 
for each MS-LTC-DRG using total Medicare allowable charges reported in 
the March 2007 update of the FY 2006 MedPAR file. Of the 745 MS-LTC-
DRGs for FY 2008, we identified 185 MS-LTC-DRGs for which there were no 
LTCH cases in the database. For this final rule with comment period, as 
noted above, we are assigning relative weights to each of the 185 no 
volume MS-LTC-DRGs (with the exception of 8 ``transplant'' MS-LTC-DRGs 
and 2 ``error'' MS-LTC-DRGs, as discussed below) based on clinical 
similarity and relative costliness to one of the remaining 560 (745 - 
185 = 560) MS-LTC-DRGs for which we are able to determine relative 
weights, based on FY 2006 LTCH claims data. Then we assigned them the 
relative weight of the appropriate low-volume quintile, as discussed 
below. (As explained below in Step 7, when necessary, we made 
adjustments to account for nonmonotonicity.)
    As we proposed, our methodology for determining the relative 
weights for the no-volume MS-LTC-DRGs is as follows: We crosswalk the 
no-volume MS-LTC-DRG to an MS-LTC-DRG for which there are LTCH cases in 
the FY 2006 MedPAR file and to which it is similar clinically and in 
intensity of use of resources as determined by criteria such as care 
provided during the period of time surrounding surgery, surgical 
approach (if applicable), length of time of surgical procedure, 
postoperative care, and length of stay. If the MS-LTC-DRG to which it 
is crosswalked is grouped to one of the low-volume quintiles, we assign 
the relative weight for the applicable low-volume quintile to the no-
volume MS-LTC-DRG. However, if the MS-LTC-DRG to which the no-volume 
MS-LTC-DRG is crosswalked is not one of the MS-LTC-DRGs in a low-volume 
quintile, we do the following: (1) Compare the relative weight of the 
MS-LTC-DRG to which the no-volume MS-LTC-DRG is crosswalked to the 
relative weights of each of the five quintiles; (2) assign the no-
volume MS-LTC-DRG the relative weight of the low-volume quintile with 
the relative weight that is closest to the MS-LTC-DRG to which the no-
volume MS-LTC-DRG is crosswalked. As stated above, assigning the 
relative weight of a quintile to a no-volume MS-LTC-DRG that is cross-
walked to a MS-LTC-DRGs that has 25 or more cases and, therefore, is 
not in a low-volume quintile is consistent with our methodology used in 
determining relative weights for MS-LTC-DRGs that have a low-volume of 
LTCH cases (that is, 24 or fewer cases), which is discussed above in 
section II.I.e. of this preamble. (As we noted above, in the infrequent 
case where nonmonotonicity involving a no-volume MS-LTC-DRG results, 
additional measures as described in Step 6 are required in order to 
maintain monotonically increasing relative weights.) For this final 
rule with comment period, a list of the no-volume FY 2008 MS-LTC-DRGs 
and the FY 2008 MS-LTC-DRG to which it is crosswalked is shown in the 
chart below.

               No-Volume MS-LTC-DRG Crosswalk for FY 2008
------------------------------------------------------------------------
                                                           Cross-walked
  MS-LTC-DRG             MS-LTC-DRG description             MS-LTC-DRG
------------------------------------------------------------------------
9.............  Bone marrow transplant..................             823
11............  Tracheostomy for face, mouth & neck                   12
                 diagnoses w MCC.
13............  Tracheostomy for face, mouth & neck                   12
                 diagnoses w/o CC/MCC.
20............  Intracranial vascular procedures w PDX                31
                 hemorrhage w MCC.
21............  Intracranial vascular procedures w PDX                32
                 hemorrhage w CC.
22............  Intracranial vascular procedures w PDX                33
                 hemorrhage w/o CC/MCC.
23............  Craniotomy w major device implant or                  31
                 acute complex CNS PDX w MCC.
24............  Craniotomy w major device implant or                  33
                 acute complex CNS PDX w/o MCC.
25............  Craniotomy & endovascular intracranial                26
                 procedures w MCC.
27............  Craniotomy & endovascular intracranial                26
                 procedures w/o CC/MCC.
34............  Carotid artery stent procedure w MCC....              37
35............  Carotid artery stent procedure w CC.....              38
36............  Carotid artery stent procedure w/o CC/                38
                 MCC.
39............  Extracranial procedures w/o CC/MCC......              38
61............  Acute ischemic stroke w use of                        70
                 thrombolytic agent w MCC.
62............  Acute ischemic stroke w use of                        71
                 thrombolytic agent w CC.
63............  Acute ischemic stroke w use of                        72
                 thrombolytic agent w/o CC/MCC.
90............  Concussion w/o CC/MCC...................              89
114...........  Orbital procedures w/o CC/MCC...........             113
115...........  Extraocular procedures except orbit.....             125
116...........  Intraocular procedures w CC/MCC.........             125
117...........  Intraocular procedures w/o CC/MCC.......             125
129...........  Major head & neck procedures w CC/MCC or             146
                 major device.

[[Page 47291]]

 
130...........  Major head & neck procedures w/o CC/MCC.             148
132...........  Cranial/facial procedures w/o CC/MCC....             131
135...........  Sinus & mastoid procedures w CC/MCC.....             133
136...........  Sinus & mastoid procedures w/o CC/MCC...             133
138...........  Mouth procedures w/o CC/MCC.............             137
150...........  Epistaxis w MCC.........................             152
151...........  Epistaxis w/o MCC.......................             153
165...........  Major chest procedures w/o CC/MCC.......             164
185...........  Major chest trauma w/o CC/MCC...........             184
215...........  Other heart assist system implant.......             238
216...........  Cardiac valve & oth maj cardiothoracic               237
                 proc w card cath w MCC.
217...........  Cardiac valve & oth maj cardiothoracic               238
                 proc w card cath w CC.
218...........  Cardiac valve & oth maj cardiothoracic               250
                 proc w card cath w/o CC/MCC.
219...........  Cardiac valve & oth maj cardiothoracic               237
                 proc w/o card cath w MCC.
220...........  Cardiac valve & oth maj cardiothoracic               238
                 proc w/o card cath w CC.
221...........  Cardiac valve & oth maj cardiothoracic               250
                 proc w/o card cath w/o CC/MCC.
222...........  Cardiac defib implant w cardiac cath w               242
                 AMI/HF/shock w MCC.
223...........  Cardiac defib implant w cardiac cath w               243
                 AMI/HF/shock w/o MCC.
224...........  Cardiac defib implant w cardiac cath w/o             242
                 AMI/HF/shock w MCC.
225...........  Cardiac defib implant w cardiac cath w/o             243
                 AMI/HF/shock w/o MCC.
228...........  Other cardiothoracic procedures w MCC...             252
229...........  Other cardiothoracic procedures w CC....             253
230...........  Other cardiothoracic procedures w/o CC/              254
                 MCC.
231...........  Coronary bypass w PTCA w MCC............             237
232...........  Coronary bypass w PTCA w/o MCC..........             238
233...........  Coronary bypass w cardiac cath w MCC....             237
234...........  Coronary bypass w cardiac cath w/o MCC..             238
235...........  Coronary bypass w/o cardiac cath w MCC..             237
236...........  Coronary bypass w/o cardiac cath w/o MCC             238
247...........  Percutaneous cardiovascular proc w drug-             246
                 eluting stent w/o MCC.
249...........  Percutaneous cardiovasc proc w non-drug-             248
                 eluting stent w/o MCC.
251...........  Perc cardiovasc proc w/o coronary artery             250
                 stent or AMI w/o MCC.
259...........  Cardiac pacemaker device replacement w/o             258
                 MCC.
262...........  Cardiac pacemaker revision except device             261
                 replacement w/o CC/MCC.
295...........  Deep vein thrombophlebitis w/o CC/MCC...             294
296...........  Cardiac arrest, unexplained w MCC.......             283
297...........  Cardiac arrest, unexplained w CC........             284
298...........  Cardiac arrest, unexplained w/o CC/MCC..             285
332...........  Rectal resection w MCC..................             356
333...........  Rectal resection w CC...................             357
334...........  Rectal resection w/o CC/MCC.............             358
337...........  Peritoneal adhesiolysis w/o CC/MCC......             336
338...........  Appendectomy w complicated principal                 371
                 diag w MCC.
339...........  Appendectomy w complicated principal                 372
                 diag w CC.
340...........  Appendectomy w complicated principal                 373
                 diag w/o CC/MCC.
341...........  Appendectomy w/o complicated principal               371
                 diag w MCC.
342...........  Appendectomy w/o complicated principal               372
                 diag w CC.
343...........  Appendectomy w/o complicated principal               373
                 diag w/o CC/MCC.
344...........  Minor small & large bowel procedures w               371
                 MCC.
345...........  Minor small & large bowel procedures w               372
                 CC.
346...........  Minor small & large bowel procedures w/o             373
                 CC/MCC.
353...........  Hernia procedures except inguinal &                  354
                 femoral w MCC.
355...........  Hernia procedures except inguinal &                  354
                 femoral w/o CC/MCC.
410...........  Biliary tract proc except only cholecyst             409
                 w or w/o c.d.e. w/o CC/MCC.
411...........  Cholecystectomy w c.d.e. w MCC..........             412
413...........  Cholecystectomy w c.d.e. w/o CC/MCC.....             412
416...........  Cholecystectomy except by laparoscope w/             415
                 o c.d.e. w/o CC/MCC.
419...........  Laparoscopic cholecystectomy w/o c.d.e.              418
                 w/o CC/MCC.
422...........  Hepatobiliary diagnostic procedures w/o              421
                 CC/MCC.
425...........  Other hepatobiliary or pancreas O.R.                 424
                 procedures w/o CC/MCC.
453...........  Combined anterior/posterior spinal                   454
                 fusion w MCC.
455...........  Combined anterior/posterior spinal                   454
                 fusion w/o CC/MCC.
457...........  Spinal fusion exc cerv w spinal curv,                456
                 malig or 9+ fusions w CC.
458...........  Spinal fusion exc cerv w spinal curv,                456
                 malig or 9+ fusions w/o CC/MCC.
461...........  Bilateral or multiple major joint procs              480
                 of lower extremity w MCC.
462...........  Bilateral or multiple major joint procs              482
                 of lower extremity w/o MCC.
468...........  Revision of hip or knee replacement w/o              467
                 CC/MCC.
473...........  Cervical spinal fusion w/o CC/MCC.......             472
483...........  Major joint & limb reattachment proc of              480
                 upper extremity w CC/MCC.
484...........  Major joint & limb reattachment proc of              482
                 upper extremity w/o CC/MCC.
489...........  Knee procedures w/o pdx of infection w/o             488
                 CC/MCC.

[[Page 47292]]

 
491...........  Back & neck procedures except spinal                 490
                 fusion w/o CC/MCC.
506...........  Major thumb or joint procedures.........             514
508...........  Major shoulder or elbow joint procedures             507
                 w/o CC/MCC.
509...........  Arthroscopy.............................             505
510...........  Shoulder, elbow or forearm proc, exc                 511
                 major joint proc w MCC.
537...........  Sprains, strains, & dislocations of hip,             505
                 pelvis & thigh w CC/MCC.
538...........  Sprains, strains, & dislocations of hip,             505
                 pelvis & thigh w/o CC/MCC.
583...........  Mastectomy for malignancy w/o CC/MCC....             582
585...........  Breast biopsy, local excision & other                584
                 breast procedures w/o CC/MCC.
614...........  Adrenal & pituitary procedures w CC/MCC.             629
615...........  Adrenal & pituitary procedures w/o CC/               630
                 MCC.
621...........  O.R. procedures for obesity w/o CC/MCC..             620
625...........  Thyroid, parathyroid & thyroglossal                  628
                 procedures w MCC.
626...........  Thyroid, parathyroid & thyroglossal                  629
                 procedures w CC.
627...........  Thyroid, parathyroid & thyroglossal                  630
                 procedures w/o CC/MCC.
653...........  Major bladder procedures w MCC..........             659
654...........  Major bladder procedures w CC...........             660
655...........  Major bladder procedures w/o CC/MCC.....             661
656...........  Kidney & ureter procedures for neoplasm              657
                 w MCC.
658...........  Kidney & ureter procedures for neoplasm              657
                 w/o CC/MCC.
663...........  Minor bladder procedures w CC...........             662
666...........  Prostatectomy w CC......................             665
670...........  Transurethral procedures w/o CC/MCC.....             665
671...........  Urethral procedures w CC/MCC............             687
672...........  Urethral procedures w/o CC/MCC..........             688
692...........  Urinary stones w esw lithotripsy w/o CC/             691
                 MCC.
697...........  Urethral stricture......................             688
707...........  Major male pelvic procedures w CC/MCC...             660
708...........  Major male pelvic procedures w/o CC/MCC.             661
710...........  Penis procedures w/o CC/MCC.............             709
712...........  Testes procedures w/o CC/MCC............             711
716...........  Other male reproductive system O.R. proc             715
                 for malignancy w/o CC/MCC.
734...........  Pelvic evisceration, rad hysterectomy &              717
                 rad vulvectomy w CC/MCC.
735...........  Pelvic evisceration, rad hysterectomy &              718
                 rad vulvectomy w/o CC/MCC.
736...........  Uterine & adnexa proc for ovarian or                 754
                 adnexal malignancy w MCC.
737...........  Uterine & adnexa proc for ovarian or                 755
                 adnexal malignancy w CC.
738...........  Uterine & adnexa proc for ovarian or                 756
                 adnexal malignancy w/o CC/MCC.
739...........  Uterine, adnexa proc for non-ovarian/                754
                 adnexal malig w MCC.
740...........  Uterine, adnexa proc for non-ovarian/                755
                 adnexal malig w CC.
741...........  Uterine, adnexa proc for non-ovarian/                756
                 adnexal malig w/o CC/MCC.
742...........  Uterine & adnexa proc for non-malignancy             755
                 w CC/MCC.
743...........  Uterine & adnexa proc for non-malignancy             756
                 w/o CC/MCC.
745...........  D&C, conization, laparascopy & tubal                 744
                 interruption w/o CC/MCC.
747...........  Vagina, cervix & vulva procedures w/o CC/            746
                 MCC.
748...........  Female reproductive system                           749
                 reconstructive procedures.
750...........  Other female reproductive system O.R.                749
                 procedures w/o CC/MCC.
765...........  Cesarean section w CC/MCC...............             744
766...........  Cesarean section w/o CC/MCC.............             769
767...........  Vaginal delivery w sterilization &/or                769
                 D&C.
768...........  Vaginal delivery w O.R. proc except                  769
                 steril &/or D&C.
770...........  Abortion w D&C, aspiration curettage or              769
                 hysterotomy.
774...........  Vaginal delivery w complicating                      769
                 diagnoses.
775...........  Vaginal delivery w/o complicating                    769
                 diagnoses.
777...........  Ectopic pregnancy.......................             769
778...........  Threatened abortion.....................             759
779...........  Abortion w/o D&C........................             759
780...........  False labor.............................             759
782...........  Other antepartum diagnoses w/o medical               759
                 complications.
789...........  Neonates, died or transferred to another             761
                 acute care facility.
790...........  Extreme immaturity or respiratory                    761
                 distress syndrome, neonate.
791...........  Prematurity w major problems............             760
792...........  Prematurity w/o major problems..........             761
793...........  Full term neonate w major problems......             760
794...........  Neonate w other significant problems....             760
795...........  Normal newborn..........................             761
799...........  Splenectomy w MCC.......................             423
800...........  Splenectomy w CC........................             424
801...........  Splenectomy w/o CC/MCC..................             424
804...........  Other O.R. proc of the blood & blood                 803
                 forming organs w/o CC/MCC.
820...........  Lymphoma & leukemia w major O.R.                     821
                 procedure w MCC.
822...........  Lymphoma & leukemia w major O.R.                     821
                 procedure w/o CC/MCC.

[[Page 47293]]

 
827...........  Myeloprolif disord or poorly diff neopl              826
                 w maj O.R. proc w CC.
828...........  Myeloprolif disord or poorly diff neopl              826
                 w maj O.R. proc w/o CC/MCC.
830...........  Myeloprolif disord or poorly diff neopl              829
                 w other O.R. proc w/o CC/MCC.
839...........  Chemo w acute leukemia as sdx or w high              837
                 dose chemo agent w/o CC/MCC.
887...........  Other mental disorder diagnoses.........             881
915...........  Allergic reactions w MCC................             916
927...........  Extensive burns or full thickness burns              933
                 w MV 96+ hrs w skin graft.
955...........  Craniotomy for multiple significant                   26
                 trauma.
959...........  Other O.R. procedures for multiple                   958
                 significant trauma w/o CC/MCC.
970...........  HIV w extensive O.R. procedure w/o MCC..             969
------------------------------------------------------------------------

    To illustrate this methodology for determining the relative weights 
for the 185 MS-LTC-DRGs with no LTCH cases, we are providing the 
following example, which refers to the no volume MS-LTC-DRGs crosswalk 
information for FY 2008 provided in the chart above.
    Example: 
    There were no cases in the FY 2006 MedPAR file used for this final 
rule with comment period for MS-LTC-DRG 22 (Intracranial vascular 
procedures w PDX hemorrhage w/o CC/MCC). We determined that MS-LTC-DRG 
33 (Ventricular shunt procedures w/o CC/MCC), which is assigned to low-
volume Quintile 1 for the purpose of determining the FY 2008 MS-LTC-DRG 
relative weights, is similar clinically and based on resource use to 
MS-LTC-DRG 22. Therefore, we are assigning the same relative weight of 
MS-LTC-DRG 33 of 0.4739 (Quintile 1) for FY 2008 (see the Composition 
of Low-Volume Quintiles for FY 2008 chart above in section II.I.3.e. of 
this preamble) to MS-LTC-DRG 22.
    Furthermore, for FY 2008 as proposed, we are establishing MS-LTC-
DRG relative weights of 0.0000 for the following transplant MS-LTC-
DRGs: Heart transplant or implant of heart assist system w MCC (MS-LTC-
DRG 1); Heart transplant or implant of heart assist system w/o MCC (MS-
LTC-DRG 2); Liver transplant w MCC or intestinal transplant (LTC-DRG 
5); Liver transplant w/o MCC (MS-LTC-DRG 6); Lung transplant (MS-LTC-
DRG 7); Simultaneous pancreas/kidney transplant (MS-LTC-DRG 8); 
Pancreas transplant (MS-LTC-DRG-10) and Kidney transplant (MS-LTC-DRG 
652). (We note that in the FY 2008 IPPS proposed rule (72 FR 24768), we 
inadvertently neglected to include proposed MS-LTC-DRG 652 (Kidney 
transplant) in the list of transplant MS-LTC-DRGs for which we proposed 
to assign a relative weight of 0.0000 for FY 2008. However, the 
proposed relative weight of 0.0000 for MS-LTC-DRG 652 was correctly 
shown in Table 11 of the FY 2008 IPPS proposed rule and was also 
correctly footnoted as being one of the proposed MS-LTC-DRGs that was 
assigned a proposed relative weight of 0.0000 (see 72 FR 25109). We 
also note that this is consistent with our treatment of the current 
LTC-DRG for a kidney transplant (LTC-DRG 302 (see 71 FR 47984)). This 
is because Medicare will only cover these procedures if they are 
performed at a hospital that has been certified for the specific 
procedures by Medicare and presently no LTCH has been so certified. 
Based on our research, we found that most LTCHs only perform minor 
surgeries, such as minor small and large bowel procedures, to the 
extent any surgeries are performed at all. Given the extensive criteria 
that must be met to become certified as a transplant center for 
Medicare, we believe it is unlikely that any LTCHs will become 
certified as a transplant center. In fact, in the nearly 20 years since 
the implementation of the IPPS, there has never been a LTCH that even 
expressed an interest in becoming a transplant center.
    If in the future a LTCH applies for certification as a Medicare-
approved transplant center, we believe that the application and 
approval procedure would allow sufficient time for us to determine 
appropriate weights for the MS-LTC-DRGs affected. At the present time, 
we would only include these eight transplant MS-LTC-DRGs in the GROUPER 
program for administrative purposes only. Because we use the same 
GROUPER program for LTCHs as is used under the IPPS, removing these MS-
LTC-DRGs would be administratively burdensome.
    In this final rule with comment period, as we proposed in Table 11 
of the FY 2008 IPPS proposed rule (72 FR 25114), we are assigning a 
relative weight of 0.0000 for the 2 ``error'' MS-LTC-DRGs: MS-LTC-DRG-
998 (Principal diagnosis invalid as discharge diagnosis) and MS-LTC-DRG 
999 (Ungroupable), (We note that in the discussion of proposed MS-LTC-
DRGs with no LTCH cases in the FY 2008 IPPS proposed rule) (72 FR 24766 
247769), we inadvertently neglected to include the 2 proposed ``error'' 
MS-LTC-DRGs (i.e., MS-LTC-DRGs 998 and 999) in the list of MS-LTC-DRGs 
for which we proposed to assign a relative weight of 0.0000 for FY 
2008. However, as stated above, the proposed relative weight of 0.0000 
for MS-LTC-DRGs 998 and 999 were correctly shown in Table 11 of the FY 
2008 IPPS proposed rule and were also correctly footnoted as being one 
of the proposed MS-LTC-DRGs that was assigned a proposed relative 
weight of 0.0000 (see 72 FR 25114). We also note that this is 
consistent with our treatment of the current ``error'' LTC-DRGs (that 
is, LTC-DRG 469 (Principal Diagnosis Invalid as Discharge Diagnosis) 
and LTC-DRG 470 (Ungroupable)) (see 71 FR 48328)).
    Again, we note that, as this system is dynamic, it is entirely 
possible that the number of MS-LTC-DRGs with no volume of LTCH cases 
based on the system will vary in the future. We used the most recent 
available claims data in the MedPAR file to identify no volume MS-LTC-
DRGs and to determine the relative weights in this final rule with 
comment period.
    Step 6--Adjust the FY 2008 MS-LTC-DRG relative weights to account 
for nonmonotonically increasing relative weights.
    As explained in section II.B. of the preamble of this final rule 
with comment period, the IPPS FY 2008 MS-DRGs, on which the FY 2008 MS-
LTC-DRGs are based, provide a significant improvement in the DRG 
system's recognition of severity of illness and resource usage. The MS-
DRGs contain base DRGs that have been subdivided into one, two, or 
three severity levels. Where there are three severity levels, the most 
severe level has at least one code that is referred to as an MCC. The 
next lower severity level contains cases with at least one code that is 
a CC.

[[Page 47294]]

Those cases without a MCC or a CC are referred to as without CC/MCC. 
When data did not support the creation of three severity levels, the 
base was divided into either two levels or the base was not subdivided. 
The two-level subdivisions could consist of the CC/MCC and without the 
CC/MCC. Alternatively, the other type of two level subdivision could 
consist of the MCC and without MCC. In base MS-LTC-DRGs with two 
levels, cases classified into a ``without CC/MCC'' MS-LTC-DRG are 
expected to have lower resource use (and lower costs) than the ``with 
CC/MCC'' and ``with MCC.''
    That is, theoretically, cases that are more severe typically 
require greater expenditure of medical care resources and will result 
in higher average charges. Therefore, in the three severity levels, 
relative weights should increase by severity, from lowest to highest. 
If the weights do not increase (that is, if within a base MS-LTC-DRG, 
an MS-LTC-DRG with MCC has a lower relative weight than one with CC, or 
the MS-LTC-DRG without CC/MCC has a higher relative weight than either 
of the others, they are nonmonotonic. We continue to believe that 
utilizing nonmonotonic relative weights to adjust Medicare payments 
would result in inappropriate payments. Consequently, as proposed, in 
general, we combine MS-LTC-DRG severity levels within a base MS-LTC-DRG 
for the purpose of computing a relative weight when necessary to ensure 
that monotonicity is maintained. Specifically, under each of the 
example scenarios provided below, we would combine severity levels 
within a base MS-LTC-DRG as follows:
    The first example of nonmonotonically increasing relative weights 
for MS-LTC-DRG pertains to base MS-LTC-DRGs with a three-level split 
and each of the three levels has 25 or more LTCH cases and, therefore, 
did not fall into one of the five low volume quintiles. If 
nonmonotonicity is detected in the relative weights of MS-LTC-DRGs in 
adjacent severity levels (for example, the relative weight of the 
``with MCC'' (the highest severity level) is less than the ``with CC'' 
(the middle level), or the ``with CC'' is less than the ``without CC/
MCC''), we combine the adjacent MS-LTC-DRGs and determine one relative 
weight based on the case weighted average of the combined LTCH cases of 
the nonmonotonic MS-LTC-DRG. The case-weighted average charge is 
determined by dividing the total charges for all LTCH cases in both 
severity levels by the total number of LTCH cases for the combined MS-
LTC-DRGs. We apply this relative weight to both affected levels of the 
base MS-LTC-DRG. If nonmonotonicity remains an issue because the above 
process results in a relative weight that is still nonmonotonic to the 
remaining MS-LTC-DRG within the base MS-LTC-DRG, we combine all three 
of the severity levels to determine one relative weight based on the 
case-weighted average charge of the combined severity levels which is 
assigned to each of the MS-LTC-DRGs in that base MS-LTC-DRG.
    A second example of nonmonotonically increasing relative weights 
for an MS-LTC-DRG pertains to the situation where there are three 
severity levels and one or more of the severity levels within a base 
MS-LTC-DRG has less than 25 LTCH cases (that is, low volume). If 
nonmonotonicity occurs in the case where either the highest or lowest 
severity level (``with MCC'' or ``without CC/MCC'') has 25 LTCH cases 
or more and the other two severity levels are low volume (and therefore 
the other two severity levels would otherwise be assigned the relative 
weight of the applicable quintile(s)), we combine the data for the 
cases in the two adjacent low volume MS-LTC-DRGs for the purpose of 
determining a relative weight. If the combination results in at least 
25 cases, we calculate one relative weight based on the case-weighted 
average charge of the combined severity levels and assign it to both of 
the severity levels. If the combination results in less than 25 cases, 
based on the case weighted average charge of the combined low-volume 
MS-LTC-DRGs, both MS-LTC-DRGs are assigned the relative weight of the 
quintile that has the closest relative weight to the case-weighted 
average charge of the combined low volume MS-LTC-DRGs. If 
nonmonotonicity persists, we combine all three severity levels and one 
relative weight would be assigned to all three levels based on the 
case-weighted average charge of the combined severity levels. 
Similarly, in nonmonotonic cases where the middle level has 25 cases or 
more but either or both the lowest or highest severity level has less 
than 25 cases (that is, low volume), we combine the nonmonotonic low-
volume MS-LTC-DRG with the middle level MS-LTC-DRG of the base DRG. We 
calculate one relative weight based on the case-weighted average charge 
of the combined severity levels and apply it to both of the affected 
MS-LTC-DRGs. If the nonmonotonicity persists, we combine all three 
levels for the purpose of determining a relative weight based on the 
case-weighted average charge of the combined severity levels, and apply 
that relative weight to all three levels.
    A third example of nonmonotonicity involves a base MS-LTC-DRG with 
three severity levels where at least one of the severity levels has no 
cases. As discussed in greater detail in Step 5, based on clinical 
similarity, we initially cross-walk the no-volume MS-LTC-DRG to an MS-
LTC-DRG to which it is similar clinically and in intensity of resource 
use and then assign the no-volume MS-LTC-DRG the relative weight of the 
quintile with the relative weight closest to that of the MS-LTC-DRG to 
which the no-volume MS-LTC-DRG had been cross-walked. If this results 
in nonmonotonicity, in the case where the no-volume MS-LTC-DRG is 
either the lowest or highest severity level, we assign to the no-volume 
MS-LTC-DRG the same relative weight that is assigned to the middle 
level of the MS-LTC-DRG in that base DRG. If nonmonotonicity persists, 
all three severity levels are combined for the purpose of calculating 
one relative weight based on the case-weighted average charge of the 
combined severity levels which is applied to each of the three levels. 
In the proposed rule, we noted that this is a departure from our 
current treatment of no-volume LTC-DRGs which results in an ultimate 
assignment to a quintile. However, this was not accurate. In fact, this 
policy is consistent with our existing policy. We believe this 
treatment achieves monotonically increasing relative weights while 
providing appropriate payment for the no-volume MS-LTC-DRG because the 
relative weight assigned to the no-volume MS-LTC-DRG is based on the 
average charges of services rendered within the same base MS-LTC-DRG.
    We apply the same process where the base MS-LTC-DRG contains a two-
level split. For example, if nonmonotonicity occurs in a base MS-LTC-
DRG with two severity levels (that is, the higher severity level 
relative weight is less than the lower severity level), where both of 
the MS-LTC-DRGs have at least 25 cases or where one or both of the MS-
LTC-DRGs is low volume, we combine the two MS-LTC-DRGs of that base MS-
LTC-DRG for the purpose of determining a case-weighted relative weight. 
If the combination results in at least 25 cases, we calculate one 
relative weight and assign it to both of the MS-LTC-DRGs. If the 
combination results in less than 25 cases, we calculate the case-
weighted average charge for the combined MS-LTC-DRG. After we calculate 
the case-weighted average charge for the combined MS LTC DRGs, we 
compare that weight to the weights

[[Page 47295]]

of the quintiles and apply the quintile weight closest to that case-
weighted average weight to both of these MS-LTC-DRGs.
    Step 7--Calculate MS-LTC-DRG transition blended relative weights 
for FY 2008.
    As discussed above in section II.I.2.a. of this preamble, we are 
implementing the MS-LTC-DRGs with a 2-year transition beginning in FY 
2008. For FY 2008, the first year of the transition, 50 percent of the 
relative weight for a MS-LTC-DRG will be based on the average LTC-DRG 
relative weight under Version 24.0 of the LTC-DRG GROUPER. The 
remaining 50 percent of the relative weight will be based on the MS-
LTC-DRG relative weight under Version 25.0 of the MS-LTC-DRG GROUPER. 
In FY 2009, the MS-LTC-DRG relative weights will be based on 100 
percent of the MS-LTC-DRG relative weights.
    We used the following methodology to calculate the transition 
blended MS-LTC-DRG relative weights for FY 2008. To determine the 
payment for a particular case under the MS-LTC-DRGs in FY 2008, we will 
group cases to MS-LTC-DRGs (using the Version 25.0 GROUPER), but the 
relative weight for each case will be determined based on a 50/50 blend 
of the MS-LTC-DRG relative weight applying steps 1-6 above and the LTC-
DRG relative weight applying steps 1-6 above. Thus, we determined a 
blended weight for each MS-LTC-DRG in the Version 25.0 GROUPER. Using 
LTCH claims in the FY 2006 MedPAR file, we grouped each case to an LTC-
DRG (using the Version 24.0 GROUPER) and an MS-LTC-DRG (using the 
Version 25.0 GROUPER) and applied steps 1-6 above to each set of 
grouped claims to determine a set of LTC-DRG relative weights and a set 
of MS-LTC-DRG relative weights. Commonly, a set of cases that grouped 
to a single MS-LTC-DRG grouped to two or more LTC-DRGs. Therefore, we 
determined an average LTC-DRG relative weight using the Version 24.0 
GROUPER for all cases that grouped to each MS-LTC-DRG. Specifically, we 
summed the LTC-DRG relative weights of all the cases that grouped to 
each MS-LTC-DRG and then divided that number by the number of LTCH 
cases. To establish the final transition blended weight for each MS-
LTC-DRG in the Version 25.0 GROUPER, we added 50 percent of the MS-LTC-
DRG relative weight to 50 percent of the average LTC-DRG relative 
weight for that MS-LTC-DRG.
    We also note that after calculating the transition blended relative 
weights, we adjusted the FY 2008 MS-LTC-DRG relative weights to account 
for nonmonotonically increasing relative weights using the method 
described above in Step 6. As noted above, we continue to believe that 
utilizing nonmonotonic relative weights to adjust Medicare payments 
would result in inappropriate payments. Therefore, in general, we 
combine MS-LTC-DRG severity levels within a base MS-LTC-DRG for the 
purpose of determining the transition blended relative weight when 
necessary to ensure that monotonicity is maintained. (For specific 
details on how severity levels within a base MS-LTC-DRG are combined 
when nonmonotonicity occurs, refer to Step 6 above.)
    Step 8--Calculate the FY 2008 budget neutrality factor.
    As we established in the RY 2008 LTCH PPS final rule (72 FR 26882), 
under the broad authority conferred upon the Secretary under section 
123 of Pub. L. 106-113 as amended by section 307(b) of Pub. L. 106-554 
to develop the LTCH PPS, beginning with the MS-LTC-DRG update for FY 
2008, the annual update to the MS-LTC-DRG classifications and relative 
weights will be done in a budget neutral manner such that estimated 
aggregate LTCH PPS payments would be unaffected, that is, would be 
neither greater than nor less than the estimated aggregate LTCH PPS 
payments that would have been made without the MS-LTC-DRG 
classification and relative weight changes. Historically, we have not 
updated the LTC-DRGs in a budget neutral manner because we believed 
that past fluctuations in the LTC-DRG relative weights were primarily 
due to changes in LTCH coding practices. We believe that changes in the 
LTCH PPS payment rates, including the LTC-DRG relative weights, should 
accurately reflect changes in LTCHs' true cost of treating patients 
(real CMI increase), and should not be influenced by changes in coding 
practices (apparent CMI increase). As we explained in the RY 2008 LTCH 
PPS final rule (72 FR 26882), because LTCH 2006 claims data does not 
appear to significantly reflect changes in LTCH coding practices in 
response to the implementation of the LTCH PPS, we believe that, 
beginning with FY 2008, it is appropriate to update the MS-LTC-DRGs so 
that estimated aggregate LTCH PPS payments will neither increase nor 
decrease. Thus, in that same final rule, we established under Sec.  
412.517(b) that the annual update to the MS-LTC-DRG classifications and 
relative weights be done in a budget neutral manner. (As discussed 
above, we are revising the regulations at Sec.  412.503 to specify that 
``MS-LTC-DRG'' is used in place of ``LTC-DRG'' for discharges occurring 
on or after October 1, 2007. For a detailed discussion on the 
establishment of the requirement to update the MS-LTC-DRG 
classifications and relative weights in a budget neutral manner, refer 
to the RY 2008 LTCH PPS final rule (72 FR 26880 through 26884). 
Updating the MS-LTC-DRGs in a budget neutral manner will result in an 
annual update to the individual MS-LTC-DRG classifications and relative 
weights based on the most recent available data to reflect changes in 
relative LTCH resource use, and the MS-LTC-DRG relative weights will be 
uniformly adjusted to ensure that estimated aggregate payments under 
the LTCH PPS would not be affected (that is, decreased or increased). 
Consistent with that provision, we are updating the MS-LTC-DRG 
classifications and relative weights for FY 2008 based on the most 
recent available data and include a budget neutrality adjustment.
    To ensure budget neutrality in updating the MS-LTC-DRG 
classifications and relative weights under new Sec.  412.517(b), as we 
proposed, we are using a method that is similar to the methodology used 
under the IPPS. (A discussion of the IPPS DRG budget neutrality 
adjustment can be found in the FY 2007 IPPS final rule (71 FR 47970).) 
We note that, in this final rule with comment period, we have modified 
our proposed methodology for ensuring budget neutrality in updating the 
MS-LTC-DRG classifications and relative weights for FY 2008 to 
accommodate the use of blended transition relative weights (discussed 
in Step 7 above). Specifically, after recalibrating the MS-LTC-DRG 
relative weights, as we do under the methodology as described in detail 
in Steps 1 through 7 above, we calculate and apply a normalization 
factor to the MS-LTC-DRG relative weights to ensure that estimated 
payments are not influenced by changes in the composition of case types 
or changes made to the classification system. That is, the 
normalization adjustment is intended to ensure that the recalibration 
of the MS-LTC-DRG relative weights (that is, the process itself) 
neither increases nor decreases total estimated payments. To calculate 
the normalization factor for FY 2008, as proposed (with modifications 
to accommodate the use of blended transition relative weights) we use 
the following steps: (1) We use the most recent available claims data 
(FY 2006) and the MS-LTC-DRG transition blended relative weights 
(determined above in Step 7 of the Steps for Determining the FY 2008 
MS-LTC-DRG

[[Page 47296]]

Relative Weights) to calculate the average CMI; (2) we group the same 
claims data (FY 2006) using the FY 2007 GROUPER (Version 24.0) and FY 
2007 relative weights (established in the FY 2007 IPPS final rule (71 
FR 47971-47984 and 48321-48331) and calculate the average CMI; and (3), 
we compute the ratio of these average CMIs by dividing the average CMI 
determined in step (2) by the average CMI determined in step (1). In 
determining the MS-LTC-DRG relative weights for FY 2008, based on the 
latest available data, the normalization factor is estimated as 
1.020905, which is applied to each MS-LTC-DRG transition blended 
relative weight. That is, each MS-LTC-DRG transition blended relative 
weight is multiplied by 1.020905 in the first step of the budget 
neutrality process. Accordingly, the relative weights in Table 11 in 
the Addendum of this final rule with comment period reflect this 
normalization factor. We also ensure that estimated aggregate LTCH PPS 
payments (based on the most recent available LTCH claims data) after 
reclassification and recalibration (the new (i.e., FY 2008) relative 
weights) are equal to estimated aggregate LTCH PPS payments (for the 
same most recent available LTCH claims data) before reclassification 
and recalibration (the existing (i.e., FY 2007) relative weights). 
Therefore, in general, we calculate the budget neutrality adjustment 
factor by simulating estimated total payments under both sets of 
GROUPERs and relative weights using current LTCH PPS payment policies 
(RY 2008) and the most recent available claims data (from the FY 2006 
MedPAR file). (We note, in the FY 2008 IPPS proposed rule (72 FR 
24770), we proposed to simulate estimated total payments for purposes 
of determining the proposed FY 2008 budget neutrality adjustment using 
current LTCH PPS payment policies, which at that time, were RY 2007 
LTCH PPS rates and policies. Since the publication of the proposed 
rule, we have established RY 2008 LTCH PPS rates and policies in the RY 
2008 LTCH PPS final rule (72 FR 26870-27029). Accordingly, we are using 
RY 2008 LTCH PPS rates and policies in determining the FY 2008 budget 
neutrality adjustment in this final rule with comment period.) In this 
final rule with comment period, the budget neutrality adjustment was 
determined using the following steps: (1) We simulate estimated total 
payments using the normalized transition-blended relative weights under 
GROUPER Version 25.0 (as described above in Step 7); (2) we simulate 
estimated total payments using the FY 2007 GROUPER (Version 24.0) and 
FY 2007 LTC-DRG relative weights (as established in the FY 2007 IPPS 
final rule (71 FR 47971-47984 and 48321-48331); and (3) we calculate 
the ratio of these estimated total payments by dividing the estimated 
total payments determined in step (2) by the estimated total payments 
determined in step (1). Then, for FY 2008, each of the normalized 
transition-blended relative weights is multiplied by the budget 
neutrality factor to determine the budget neutral relative weight for 
each MS-LTC-DRG. Accordingly, in determining the MS-LTC-DRG relative 
weights for FY 2008, based on the most recent available data, we are 
establishing a budget neutrality factor of 0.996467, which is applied 
to the transition blended relative weights after normalizing. The FY 
2008 MS-LTC-DRG relative weights in Table 11 in the Addendum of this 
final rule with comment period reflect this budget neutrality factor.
    Table 11 in the Addendum to this final rule with comment period 
lists the MS-LTC-DRGs and their respective transition-blended budget 
neutral relative weights, geometric mean length of stay, and five-
sixths of the geometric mean length of stay (used in the determination 
of short stay outlier payments under Sec.  412.529) for FY 2008. The 
``IPPS Comparable Threshold'' (that is, the IPPS geometric average 
length of stay plus one standard deviation) for each MS-LTC-DRG (used 
in the determination of short stay outlier payments under Sec.  
412.529(c)(3) as established in the RY 2008 LTCH PPS final rule (72 FR 
26904-26918)) for FY 2008 is also included in Table 11 in the Addendum 
to this final rule with comment period.
    In determining the proposed MS-LTC-DRG relative weights for FY 
2008, in the FY 2008 IPPS proposed rule (72 FR 24771), we proposed to 
apply a case mix budget neutrality factor to the MS-LTC-DRG relative 
weight to eliminate the effect of changes in coding or classification 
of discharges that do not reflect real change in case mix. The budget 
neutrality factor was proposed because we believed that adoption of the 
MS-LTC-DRGs would create a risk of increased aggregate levels of 
payment as a result of increased documentation and coding. We believed 
this adjustment would be necessary for FY 2008 and FY 2009 to ensure 
that estimated aggregate LTCH PPS payments would be neither greater 
than nor less than the estimated aggregate LTCH PPS payments that would 
have been made without the adoption of the MS-LTC-DRG patient 
classification system. Accordingly, in the proposed rule each proposed 
MS-LTC-RG relative weights presented in Table 11 was multiplied by a 
factor of 0.976 to account for improvements in coding and documentation 
resulting from the adoption of the new patient classification system.
    In this final rule with comment period, as discussed in the 
responses below, we are not implementing the proposed case-mix budget 
neutrality factor to the MS-LTC-DRG relative weights. Accordingly, the 
MS-LTC-DRG relative weights in Table 11 of the Addendum to this final 
rule with comment period do not reflect any adjustment to account for 
changes in coding and documentation that do not reflect real change in 
case mix.
    Comment: While several commenters supported the adoption of a 
patient classification system that recognizes differences in patient 
acuity in LTCHs, a number of commenters opposed CMS' proposal to apply 
a budget neutrality adjustment factor to the MS-LTC-DRG relative 
weights in anticipation of changes in coding or classification of 
discharges resulting from the adoption of the MS-LTC-DRGs. Commenters 
expressed doubt that the adoption of the proposed MS-LTC-DRGs would 
lead to the coding changes CMS expects. Specifically, these commenters 
believed that in certain situations, such as where there are 
corresponding and equivalent subclassifications under both the proposed 
and existing systems, there may not be any real opportunity for coding 
improvements for those groups. For instance, one commenter cited MS-
LTC-DRG 207 and 208 (LTC-DRGs 565 and 566) as an example of a DRG group 
that would not experience upcoding. Consequently, several commenters 
opposed the application of the adjustment for improved coding practices 
across all MS-LTC-DRGs and requested that CMS refrain from applying an 
adjustment to any MS-LTC-DRG for which they believed coding changes are 
inapplicable. A commenter asserted specifically that for the DRGs in 
which upcoding is impossible, CMS would be ``imposing a payment penalty 
for these cases.'' One commenter, a LTCH trade association group, 
commissioned a report to evaluate the proposed ``coding adjustment'' to 
the MS-LTC-DRG relative weights to account for changes in coding or 
classification of discharges resulting from the adoption of the new 
patient classification system. CMS had stated in the proposed rule that 
the ``coding adjustment'' is necessary in order to maintain budget 
neutrality. Based on the commissioned report, the

[[Page 47297]]

commenter concluded that the magnitude of the proposed ``coding 
adjustment'' is inappropriate for LTCHs because it would not result in 
budget neutrality, rather, it would result in an overall reduction in 
aggregate LTCH payments. The commenter noted that since approximately 
34 percent of LTCH cases are paid under the short-stay outlier policy 
where cases are paid at or below costs, there is no opportunity for 
upcoding in those cases. Furthermore, according to the commissioned 
report, approximately 61 percent of current LTCH discharges already are 
coded at what would be the highest severity level under the new MS-LTC-
DRG system. That is, the commenter asserted that there is no 
opportunity to up-code these cases because they are either in a base 
MS-DRG with only one severity level or these cases are already coded in 
the highest severity level of a base MS-DRG with multiple severity 
levels. The report noted that according to their own analysis, this 
number of LTCH cases is almost triple the number of IPPS discharges 
that appear in the highest severity level MS-DRGs. The commissioned 
report further attempted to analyze LTCH discharges and for the 
potential for upcoding within a base MS-DRG (``MS-DRG family'') by 
calculating what the report terms as ``upcode ratios.'' The report 
defines an ``upcode ratio'' as the ratio of the relative weight of the 
MS-DRG with the highest severity level within the MS-DRG family to the 
relative weight of the base MS-DRG with the lowest severity level. 
Presumably, the higher the ``upcode ratio,'' the greater the incentive 
for upcoding into the highest severity level since the upcoding would 
result in a higher payment. Based on the ``upcode ratios,'' the report 
contrasted the potential for upcoding by LTCHs and IPPS hospitals. The 
report concluded that since 97 percent of LTCH discharges are 
distributed in the lowest ``upcode ratio'' quartile versus 25 percent 
of IPPS discharges, LTCHs therefore have less incentive to upcode 
within the same base MS-DRG than IPPS hospitals. The report also 
estimated that if every LTCH upcoded every discharge to the highest 
possible severity level, LTCHs' maximum potential for upcoding would 
result in a 3.61 percent increase in the case mix index. The report 
translated this finding to mean that 66 percent of all LTCH cases would 
have to be upcoded to the highest severity level in order to make the 
proposed adjustment to the LTCH relative weights budget neutral. The 
commenter believed it was unreasonable for CMS to assume that LTCHs 
could improve coding to that extent. Finally, the report also predicted 
that a significant number of LTCH discharges would be subjected to the 
25 percent rule and thus paid at rates that are similar to IPPS rates 
and not based on MS-LTC-DRGs. The report noted that IPPS hospitals are 
not subject to the 25 percent rule, implying that the magnitude of the 
[l]dquo;coding adjustment'' which was based on primarily IPPS data, is 
inappropriate for LTCHs. The commenter concludes that ``the vast 
majority of LTCH discharges present no opportunity to upcode and most 
of the remaining LTCH discharges provide little potential to do so.'' 
Another commenter stated that the significant year-to-year changes in 
LTCH payments due to both policy changes and routine rate and weighting 
adjustments which results in large payment fluctuations for some DRGS, 
creates a challenge to LTCHs to effectively operate, plan for the 
future, and maintain quality care for Medicare patients. In particular, 
one commenter using MedPAR 2005 claims data compared estimated payments 
under the proposed MS-DRG system (with the ``coding adjustment'' 
included) to estimated payment under the current system and asserted 
that according to their analysis, large payment changes would result in 
the ten most common LTC-DRGs. The commenter cited specifically that the 
change in payment for the top ten DRGs ranges from over a 25 percent 
reduction in some cases to over a 30 percent increase in others. In 
light of the volatility apparent in adopting the new MS-LTC-DRG system, 
the commenter recommended that CMS delay making an adjustment for 
improved coding practices until after a transition to the MS-LTC-DRG 
system has occurred. The commenter suggested that once the transition 
has fully occurred, CMS could apply an appropriate adjustment based on 
actual, rather than anticipated, coding change.
    Response: In the proposed rule, we indicated that we believe that 
adoption of the proposed MS-LTC-DRGs would create a risk of increased 
aggregate levels of payment as a result of increased documentation and 
coding. MedPAC noted that ``refinements in DRG definitions have 
sometimes led to substantial unwarranted increase in payments to 
hospitals, reflecting more complete reporting of patients' diagnoses 
and procedures.'' MedPAC further noted that ``refinements to the DRG 
definitions and weights would substantially strengthen providers' 
incentives to accurately report patients' comorbidities and 
complications.'' To address this issue, MedPAC recommended that the 
Secretary ``project the likely effect of reporting improvements on 
total payments and make an offsetting adjustment to the national 
average base payment amounts'' [Report to Congress on Physician-Owned 
Specialty Hospitals, March 2005, p. 42]. While we modeled the changes 
to the DRG system and relative weights to ensure budget neutrality, we 
are concerned that the large increase in the number of DRGs and 
refinements of severity levels will provide opportunities for hospitals 
to do more accurate documentation and coding of information contained 
in the medical record. Coding that has no effect on payment under the 
current LTC-DRGs may result in a case being assigned to a higher paid 
DRG under the proposed MS-LTC-DRGs. We note that while the commenters 
have attempted to analyze the potential for improvements in 
documentation and coding to affect the MS-LTC-DRG assignment within a 
base MS-LTC-DRG, improved documentation may also result in a case being 
assigned from a lower paid MS-LTC-DRG into a higher paid MS-LTC-DRG of 
a completely different base MS-LTC-DRG. In particular, the commissioned 
report submitted by the LTCH trade association demonstrated to us that 
commenters are pre-occupied with focusing on the potential for 
improving documentation and coding where the MS-LTC-DRG assignment 
would change from a lower severity level to a higher severity level 
within the same base MS-LTC-DRG. We are emphasizing here that in 
addition to the potential for improvements in documentation and coding 
to change the severity level within a base DRG (``intra-DRG change''), 
the potential for improvements in documentation and coding to result in 
the assignment of a case into a higher paid MS-LTC-DRG outside of the 
base MS-LTC-DRG (``inter-DRG documentation and coding changes'') is 
also a likely consequence of more accurate and complete documentation 
and possible for LTCH discharges because patients are admitted with 
multiple CCs. In general, the commenters expressed the belief that 
``the vast majority of LTCH discharges present no opportunity to 
upcode'' (emphasis added). We disagree with this belief since 
generally, the commenters have provided arguments based on examples 
which focus entirely on ``intra-DRG change'' without accounting for the 
``inter-DRG change'' potential which may be possible for LTCH 
discharges because patients are

[[Page 47298]]

admitted with multiple complications and comorbidities. One commenter 
cited two MS-LTC-DRGs for patients on ventilators, MS-LTC-DRG 207 and 
208 (previously LTC-DRG 565 and 566), as MS-LTC-DRGs that would not 
experience ``intra-DRG change'' because the classification groups under 
the old and new classification systems for these ventilator patients 
remains unchanged. We acknowledge that for MS-LTC-DRG 207, which is a 
high paying MS-LTC-DRG, there appears to be no incentive for 
improvements in documentation and coding that result in ``intra-DRG 
change'' from the lower paid MS-LTC-DRG 208 to the higher paid MS-LTC-
DRG 207 or for documentation and coding improvements that affect 
``inter-DRG change'' because this DRG is already such a high paying 
DRG. However, for patients that were classified in MS-LTC-DRG 208, 
there may be some opportunity for documentation and coding improvements 
that affect ``inter-DRG change,'' depending on the existence of 
specific CCs. While we take issue with some of the commenters' 
generalizations, we agree that there are significant differences in the 
distribution of patients among the severity DRGs between those in IPPS 
hospitals and those in LTCHs. Accordingly, we agree with the comments 
that it would be appropriate to further adjust the proposed budget 
neutrality adjustment that we are utilizing for IPPS hospitals to 
reflect the experiences of the LTCHs. However, due to the complexity of 
the interactions, at this time we are unable to determine the extent to 
which MS-LTCndash;DRGs are susceptible to increased case-mix 
improvements in documentation and coding in order to estimate an 
appropriate adjustment for such improvements that would be applicable 
to LTCHs. Accordingly, we are not finalizing the proposed case-mix 
budget neutrality factor to the MS-LTC-DRG relative weights at this 
time.
    While some commenters have noted that not all MS-LTC-DRGs are 
equally susceptible to improvements in documentation and coding and 
suggested that we apply the adjustment for such improvements to only 
those MS-LTC-DRGs for which improvements in documentation and coding 
are possible, we note that in general, we apply adjustments to the LTCH 
PPS on a system-wide basis since the LTCH PPS is a system devised upon 
averages. We also note that some commenters attempted to analyze the 
impact of the short-stay outlier policy and the 25 percent rule on 
improvements in documentation and coding. As we stated previously in 
this final rule, we continue to believe that payment adjustments that 
were finalized in the RY 2008 LTCH PPS final rule, among which was the 
revision to the short-stay outlier policy (Sec.  412.529(c)) noted by 
the commenters, will result in more appropriate Medicare payments to 
LTCHs. The revised short-stay outlier policy addresses the issue of 
LTCH discharges that are comparable to an acute care IPPS hospital 
discharge based on the length of stay for that discharge. That policy 
is not tied to or affected by the adoption of the MS-LTC-DRGs. Nor do 
we believe that the extension of the 25 percent threshold adjustment 
that we finalized for RY 2008 at revised 412.534 and new 412.536, which 
governs Medicare payments for patients discharged from LTCHs who were 
admitted from specific referring hospitals, is tied to or affected by 
the adoption of the MS-LTC-DRGs. Furthermore, as noted above, since the 
MS-LTC-DRGs are so structurally similar to the LTC-DRGs, we do not 
believe that postponing the adoption of the severity-weighted DRGs in 
order to evaluate the interaction of the policy changes implemented for 
the LTCH PPS for RY 2008 would confer any significant advantage to 
stakeholders. However, we agree with the commenters that the fact that 
a large number of LTCH discharges are paid as short-stay outliers based 
on cost could have an effect on the budget neutrality adjustment 
applicable to LTCHs as compared to the adjustment we are finalizing for 
the IPPS and the LTCH budget neutrality would need to be adjusted 
accordingly.
    In response to the commenter's concern that our policy changes and 
routine rate and weighting adjustments result in large payment 
fluctuations for some DRGs, we note that fluctuations are seen year to 
year resulting from refinements to the LTC PPS that are necessary in 
order to pay appropriately for LTCH cases. Each year, we recalibrate 
the relative weights based on the most recent available LTCH claims 
data, which reflect current LTCH patient mix and coding practices. The 
annual recalibration of the relative weights to which LTCH cases are 
assigned will appropriately reflect more or less resource use than the 
previous year's LTC-DRG relative weights. We understand the concerns 
expressed by the commenters regarding the fluctuations in payments for 
certain MS-LTC-DRGs based on the proposed FY 2008 reweighting of the 
MS-LTC-DRGs. However, we remind the commenters that the existing budget 
neutrality requirement for changes in DRGs and recalibrating the 
relative weights mitigates any effect of the change to MS-LTC-DRGs on 
estimated aggregate LTCH PPS payments. Additionally, as we have 
discussed earlier, transitioning the relative weights for FY 2008 
should further mitigate the effects from adoption of the MS-LTC-DRG 
system. For the reasons discussed in the comments and responses section 
of this final rule with comment period, we will not be implementing the 
proposed case-mix budget neutrality factor to the MS-LTC-DRG relative 
weights at this time.
    While we agree that the IPPS adjustment would need to be adjusted 
to be applicable to LTCHs, we continue to believe more accurate and 
complete documentation and coding will occur because it will result in 
higher aggregate payments under the MS-LTC-DRG system. We have every 
reason to expect that hospitals will respond to the adoption of MS-LTC-
DRGs in much the same way as they have responded to similar events in 
the past. They will improve their documentation and coding of diagnoses 
and procedures, and this change will lead to increases in reported case 
mix. The reason to make offsetting adjustments is also the same. 
Although hospitals' efforts to improve the specificity and accuracy of 
documentation and coding are perfectly legitimate, the increases in 
payments that result are not warranted because the increase in measured 
case-mix does not reflect any real change in illness severity or the 
cost of care for the patients being treated. Therefore, offsetting 
adjustments to the PPS payment rates are needed to protect the Medicare 
program from unwarranted increases in spending. We believe the question 
is not whether documentation and coding will improve, resulting in 
higher case mix and payments, rather, the question is only how much 
will coding change when the incentives to code particular secondary 
diagnoses change with the adoption of MS-LTC-DRGs, and how long will 
these changes continue.
    Section 123 of the BBRA, as amended by section 307(b) of the BIPA, 
provides that the Secretary may specify appropriate adjustments to the 
long-term care hospital payment system, including updates. This broad 
discretionary authority includes our ability to make adjustments and 
updates for case mix changes due to improved coding and documentation 
changes that do not reflect real change in case mix regardless of 
whether such adjustment

[[Page 47299]]

is for anticipated case-mix changes or case mix changes that occurred 
in a previous time period. We remain convinced that an adjustment is 
needed to eliminate the effect of changes in coding or classification 
of LTCH discharges that do not reflect real change in case mix 
resulting from the adoption of the proposed MS-LTC-DRGs. However, as 
discussed above, after revisiting this issue, we believe that the 
adjustment for anticipated improvements in coding and documentation 
adopted in this final rule with comment period for IPPS hospitals needs 
to be adjusted to apply to LTCHs. At this time, CMS has not been able 
to determine an appropriate adjustment to the factor used for IPPS 
hospitals in order to make it applicable to LTCHs; however, we will 
continue to monitor LTCHs' response to the MS-LTC-DRG transition. 
Beginning with RY 2009, if CMS is able to estimate an appropriate 
adjustment factor applicable to LTCHs, CMS would propose an adjustment 
factor to LTCHs to account prospectively for coding and documentation 
changes. We note that in previous years, we have adjusted the annual 
update to the LTCH PPS standardized rate for case-mix changes due to 
coding and documentation changes to recoup payments made in a prior 
period by making a prospective adjustment during the rate setting 
cycle. Specifically, the adjustments for coding and documentation 
changes implemented in the RY 2007 and RY 2008 regulations were based 
on actual LTCH case mix data from FY 2004 and FY 2005, respectively (71 
FR 27820-2 and 72 FR 26887-90). Since we have an established mechanism 
to adjust LTCH payments to account for the effect of changes in coding 
and documentation which is based on actual LTCH data and since we 
cannot determine an appropriate adjustment factor applicable to LTCHs 
at this time, we believe it is appropriate to continue using this 
established process rather than making an adjustment at this time based 
on an estimate of projected LTCH specific case mix change due to 
improved coding and documentation. Therefore, at this time, we are not 
finalizing the proposed case-mix budget neutrality factor to the MS-
LTC-DRG relative weights in FY 2008. Instead, consistent with past LTCH 
payment policy, we could propose to make future adjustments to account 
for improvements in coding and documentation that do not reflect real 
changes in case samix during these years that we are implementing MS-
LTC-DRGs.
    Comment: Finally, one commenter believed that CMS' proposal for FY 
2008 would effectively penalize LTCHs twice for the same case-mix 
changes. That is, the commenter noted that in RY 2008, CMS finalized a 
retrospective adjustment to account for past coding improvements by 
reducing the expected update (i.e., full market basket) to the standard 
payment rate by 2.49 percent in order to recoup payments made in a 
prior period (FY 2005). The commenter further noted that the reduction 
in the market basket update reduces the base rate and therefore has a 
permanent prospective effect. The commenter stated that ``the effect of 
the case-mix reduction to the market basket of 2.49 percent is 
applicable to payments in RY 2008 and each rate year thereafter. It is 
never made up.'' The commenter concluded that the ``additional downward 
coding adjustment factor of 2.4 percent in each of two years, or any 
other adjustment that is not borne out by careful retrospective 
analyses after the full transition to MS-LTC-DRGs, to payments to LTCHs 
in future years, is redundant and unsupported.''
    Response: As discussed above, we are not implementing the proposed 
case-mix budget neutrality factor to the MS-LTC-DRG relative weights in 
FY 2008. Where CMS ultimately determines that an adjustment is 
necessary, CMS will propose adjustments to the LTCH PPS in order to 
account for changes to coding or documentation that do not reflect real 
changes in case-mix.

J. Add-On Payments for New Services and Technologies

1. Background
    Sections 1886(d)(5)(K) and (L) of the Act establish a process of 
identifying and ensuring adequate payment for new medical services and 
technologies (sometimes collectively referred to in this section as 
``new technologies'') under the IPPS. Section 1886(d)(5)(K)(vi) of the 
Act specifies that a medical service or technology will be considered 
new if it meets criteria established by the Secretary after notice and 
opportunity for public comment. Section 1886(d)(5)(K)(ii)(I) of the Act 
specifies that the process must apply to a new medical service or 
technology if, ``based on the estimated costs incurred with respect to 
discharges involving such service or technology, the DRG prospective 
payment rate otherwise applicable to such discharges under this 
subsection is inadequate.''
    The regulations implementing this provision establish three 
criteria for new medical services and technologies to receive an 
additional payment. First, Sec.  412.87(b)(2) states that a specific 
medical service or technology will be considered new for purposes of 
new medical service or technology add-on payments until such time as 
data are available to reflect the cost of the technology in the DRG 
weights through recalibration. There is a lag of 2 to 3 years from the 
point a new medical service or technology is first introduced on the 
market (generally on the date that the technology receives FDA 
approval) and when data reflecting the use of the medical service or 
technology are used to calculate the DRG weights. For example, data 
from discharges occurring during FY 2006 are used to calculate the FY 
2008 DRG weights in this final rule with comment period. Section 
412.87(b)(2) provides that, ``a medical service or technology may be 
considered new within 2 or 3 years after the point at which data begin 
to become available reflecting the ICD-9-CM code assigned to the new 
medical service or technology (depending on when a new code is assigned 
and data on the new medical service or technology become available for 
DRG recalibration). After CMS has recalibrated the DRGs based on 
available data to reflect the costs of an otherwise new medical service 
or technology, the medical service or technology will no longer be 
considered `new' under the criterion for this section.''
    The 2-year to 3 year period during which a medical service or 
technology can be considered new would ordinarily begin with FDA 
approval, unless there was some documented delay in bringing the 
product onto the market after that approval (for instance, component 
production or drug production has been postponed until FDA approval due 
to shelf life concerns or manufacturing issues). After the DRGs have 
been recalibrated to reflect the costs of an otherwise new medical 
service or technology, the special add-on payment for new medical 
services or technologies ceases (Sec.  412.87(b)(2)). For example, an 
approved new technology that received FDA approval in October 2006 and 
entered the market at that time may be eligible to receive add-on 
payments as a new technology until FY 2010 (discharges occurring before 
October 1, 2009), when data reflecting the costs of the technology 
could be used to recalibrate the DRG weights. Because the FY 2009 DRG 
weights would be calculated using FY 2007 MedPAR data, the costs of 
such a new technology would be reflected in the FY 2009 DRG weights.
    Section 412.87(b)(3) further provides that new medical services or 
technologies must be inadequately paid

[[Page 47300]]

otherwise under the DRG system to receive the add-on payment. To assess 
whether technologies would be inadequately paid under the DRGs, we 
establish thresholds to evaluate applicants for new technology add-on 
payments. In the FY 2004 IPPS final rule (68 FR 45385), we established 
the threshold at the geometric mean standardized charge for all cases 
in the DRG plus 75 percent of 1 standard deviation above the geometric 
mean standardized charge (based on the logarithmic values of the 
charges and transformed back to charges) for all cases in the DRG to 
which the new medical service or technology is assigned (or the case 
weighted average of all relevant DRGs, if the new medical service or 
technology occurs in many different DRGs).
    However, section 503(b)(1) of Pub. L. 108-173 amended section 
1886(d)(5)(K)(ii)(I) of the Act to provide for ``applying a threshold * 
* * that is the lesser of 75 percent of the standardized amount 
(increased to reflect the difference between cost and charges), or 75 
percent of 1 standard deviation for the diagnosis-related group 
involved.'' The provisions of section 503(b)(1) apply to classification 
for fiscal years beginning with FY 2005. (We refer readers to section 
IV.D. of the preamble to the FY 2005 IPPS final rule (69 FR 49084) for 
a discussion of the revision of the regulations to incorporate the 
change made by section 503(b)(1) of Pub. L. 108-173.) Table 10 of the 
Addendum to the FY 2007 IPPS final rule (71 FR 48319) contained the 
final thresholds that are being used to evaluate applications for new 
technology add-on payments for FY 2008. An applicant must demonstrate 
that the cost threshold is met using information from inpatient 
hospital claims.
    We were recently asked to revisit the issue of whether the HIPAA 
Privacy Rule at 45 CFR Parts 160 and 164 applies to claims information 
that providers submit with applications for new technology add-on 
payments. We previously addressed this issue in the September 7, 2001 
final rule (66 FR 46917) that established the new technology add on 
payment regulations. In the preamble to that final rule, we explained 
that health plans, including Medicare, and providers that conduct 
certain transactions electronically, including the hospitals that would 
be receiving payment under the FY 2001 IPPS final rule, are required to 
comply with the HIPAA Privacy Rule. We further explained how such 
entities could meet the applicable HIPAA requirements by discussing how 
the HIPAA Privacy Rule permitted providers to share with health plans 
information needed to ensure correct payment, if they had obtained 
consent from the patient to use that patient's data for treatment, 
payment, or health care operations. We also explained that because the 
information to be provided within applications for new technology add-
on payment would be needed to ensure correct payment, no additional 
consent would be required. The HHS Office of Civil Rights has since 
amended the HIPAA Privacy Rule, but the results remain. The HIPAA 
Privacy Rule no longer requires covered entities to obtain consent from 
patients to use or disclose protected health information for treatment, 
payment, or health care operations, and expressly permits such entities 
to use or to disclose protected health information for any of these 
purposes. (We refer readers to 45 CFR 164.502(a)(1)(ii), and 506(c)(1) 
and (c)(3) and the Standards for Privacy of Individually Identifiable 
Health Information published in the Federal Register on August 14, 
2002, for a full discussion of changes in consent requirements).
    Section 412.87(b)(1) of our existing regulations provides that a 
new technology is an appropriate candidate for an additional payment 
when it represents ``an advance that substantially improves, relative 
to technologies previously available, the diagnosis or treatment of 
Medicare beneficiaries.'' For example, a new technology represents a 
substantial clinical improvement when it reduces mortality, decreases 
the number of hospitalizations or physician visits, or reduces recovery 
time compared to the technologies previously available. (We refer 
readers to the September 7, 2001 final rule (66 FR 46902) for a 
complete discussion of this criterion.)
    The new medical service or technology add-on payment policy 
provides additional payments for cases with high costs involving 
eligible new medical services or technologies while preserving some of 
the incentives under the average-based payment system. The payment 
mechanism is based on the cost to hospitals for the new medical service 
or technology. Under Sec.  412.88, Medicare pays a marginal cost factor 
of 50 percent for the costs of a new medical service or technology in 
excess of the full DRG payment. If the actual costs of a new medical 
service or technology case exceed the DRG payment by more than the 50-
percent marginal cost factor of the new medical service or technology, 
Medicare payment is limited to the DRG payment plus 50 percent of the 
estimated costs of the new technology.
    Section 1886(d)(4)(C)(iii) of the Act requires that the adjustments 
to annual DRG classifications and relative weights must be made in a 
manner that ensures that aggregate payments to hospitals are not 
affected. Further, the Congressional report language accompanying 
section 533 of Pub. L. 106-554 indicated Congress' intent to require 
the Secretary to implement the new mechanism on a budget neutral basis 
(H.R. Conf. Rep. No. 106-1033, 106th Cong., 2nd Sess. at 897 (2000)). 
Therefore, in the past, we accounted for projected payments under the 
new medical service and technology provision during the upcoming fiscal 
year at the same time we estimated the payment effect of changes to the 
DRG classifications and recalibration. The impact of additional 
payments under this provision was then included in the budget 
neutrality factor, which was applied to the standardized amounts and 
the hospital-specific amounts.
    Section 1886(d)(5)(K)(ii)(III) of the Act, as amended by section 
503(d)(2) of Pub. L. 108-173, provides that there shall be no reduction 
or adjustment in aggregate payments under the IPPS due to add-on 
payments for new medical services and technologies. Therefore, add-on 
payments for new medical services or technologies for FY 2005 and later 
years have not been budget neutral.
    Applicants for add-on payments for new medical services or 
technologies for FY 2009 must submit a formal request, including a full 
description of the clinical applications of the medical service or 
technology and the results of any clinical evaluations demonstrating 
that the new medical service or technology represents a substantial 
clinical improvement, along with a significant sample of data to 
demonstrate the medical service or technology meets the high-cost 
threshold. Complete application information, along with final deadlines 
for submitting a full application, will be available on our Web site 
after the publication of this FY 2008 IPPS final rule at: http://www.cms.hhs.gov/AcuteInpatientPPS/08_newtech.asp. To allow interested 
parties to identify the new medical services or technologies under 
review before the publication of the proposed rule for FY 2009, the Web 
site will also list the tracking forms completed by each applicant.
2. Public Input Before Publication of a Notice of Proposed Rulemaking 
on Add-On Payments
    Section 1886(d)(5)(K)(viii) of the Act, as amended by section 
503(b)(2) of Pub. L. 108-173, provides for a mechanism

[[Page 47301]]

for public input before publication of a notice of proposed rulemaking 
regarding whether a medical service or technology represents a 
substantial clinical improvement or advancement. The process for 
evaluating new medical service and technology applications requires the 
Secretary to--
    <bullet> Provide, before publication of a proposed rule, for public 
input regarding whether a new service or technology represents an 
advance in medical technology that substantially improves the diagnosis 
or treatment of Medicare beneficiaries.
    <bullet> Make public and periodically update a list of the services 
and technologies for which applications for add-on payments are 
pending.
    <bullet> Accept comments, recommendations, and data from the public 
regarding whether a service or technology represents a substantial 
clinical improvement.
    <bullet> Provide, before publication of a proposed rule, for a 
meeting at which organizations representing hospitals, physicians, 
manufacturers, and any other interested party may present comments, 
recommendations, and data regarding whether a new medical service or 
technology represents a substantial clinical improvement to the 
clinical staff of CMS.
    In order to provide an opportunity for public input regarding add-
on payments for new medical services and technologies for FY 2008 
before publication of the FY 2008 IPPS proposed rule, we published a 
notice in the Federal Register on December 22, 2006 (71 FR 77031), and 
held a town hall meeting at the CMS Headquarters Office in Baltimore, 
MD, on February 22, 2007. In the announcement notice for the meeting, 
we stated that the opinions and alternatives provided during the 
meeting would assist us in our evaluations of applications by allowing 
public discussion of the substantial clinical improvement criterion for 
each of the FY 2008 new medical service and technology add on payment 
applications before the publication of the FY 2008 IPPS proposed rule.
    Approximately 70 individuals attended the town hall meeting in 
person, while additional participants listened over an open telephone 
line. Boston Scientific presented data on how its product 
(Wingspan[supreg] Stent System with Gateway\TM\ PTA Balloon Catheter) 
meets the substantial clinical improvement criterion, as well as the 
need for additional payments to ensure its access to Medicare 
beneficiaries. No other attendees at the town hall meeting made a 
presentation with regard to the Wingspan[supreg] new technology add-on 
payment application.
    In the FY 2008 IPPS proposed rule, we considered Boston 
Scientific's presentation made at the town hall meeting, as well as 
written comments submitted with their application, in our evaluation of 
the Wingspan[supreg] new technology application for FY 2008 in the FY 
2008 IPPS proposed rule. We have summarized these comments under 
section I.4. of the preamble of this final rule with comment period. At 
the Town Hall meeting, we did not receive any other comments regarding 
substantial clinical improvement of Wingspan[supreg].
    There were a number of public comments made at the Town Hall 
meeting suggesting that CMS provide more specific detail about how it 
would apply the substantial clinical improvement criterion. For 
example, the public commenters at the Town Hall meeting suggested that 
CMS provide clear guidance with respect to the type of data that 
applicants should submit to support an application for add-on payments 
for new medical services and technologies. We were asked to work with 
stakeholders, including researchers, clinicians, representatives of 
patients, and manufacturers, to develop specific criteria and data 
quality standards that would make determinations of ``substantial 
clinical improvement'' more predictable and transparent.
    In the FY 2008 IPPS proposed rule, we welcomed public comment on 
this issue. In particular, we indicated that we were interested in any 
``specific criteria or data quality standards'' that the commenters 
believed we should adopt to improve the new technology add-on 
application process, or any concerns or challenges that commenters 
believed we may encounter in undertaking this effort. Again, as we 
stated at the new technology Town Hall meeting, we indicated that we 
continue to be interested in working with our stakeholders to improve 
the inpatient new technology add-on payment process. We stated that we 
were interested in ensuring that the latest medical technology that 
improves care for the Medicare patient population continues to be 
available to our beneficiaries.
    Comment: One commenter supported how CMS currently evaluates 
whether a technology represents a substantial clinical improvement over 
existing technologies. Specifically, the commenter stated, ``we believe 
the new technology add-on payment mechanism is structured fairly and 
provides technologies that truly improve care with a challenging yet 
reasonable opportunity to qualify for enhanced payment status * * * the 
criteria articulated by CMS to prove substantial clinical improvement 
offer significant discretion and flexibility on the parts of both 
applicants and CMS to, respectively, demonstrate and decide whether a 
new technology truly represents an advancement in care.''
    Response: We appreciate the commenter's support of our application 
of the criteria we currently use to determine whether a new technology 
merits an add-on payment. The commenter noted that the current 
standards allow us an opportunity to be both fair and flexible and for 
each individual application to be evaluated on a case-by-case basis 
rather than by a stringent set of inflexible criteria. We believe the 
commenter raises a reasonable concern that establishing specific data 
standards may make it more difficult for an applicant to qualify for a 
new technology add-on payment because such standards cannot account for 
the various types of new technologies that may become available in the 
future and the types of requirements that those novel technologies may 
or may not be able to meet.
    Comment: Several commenters suggested that CMS revise or alter the 
standards we use to determine whether a technology meets the 
substantial clinical improvement criterion. One commenter requested 
that CMS ``quickly announce its proposed data standards for a showing 
of substantial clinical improvement'' and stated that, in the past, CMS 
did not provide clear guidance on the type of data that applicants 
would need to submit. The commenter applauded CMS' recent endeavor to 
provide clear guidance on the issue. Another commenter supported the 
provision of more detailed criteria for the types of data and 
documentation that would help to demonstrate whether a new technology 
was a substantial clinical improvement, but did not recommend any 
specific standards that CMS could use. The commenter did, however, 
recommend that applicants utilize credentialed coding professionals to 
ensure correct codes and DRGs are identified prior to submitting a 
detailed cost analysis.
    Response: The purpose of us asking for public input on how to 
improve the substantial clinical improvement criterion was to garner 
information and ideas from the public and stakeholders about how that 
specific criterion could be improved. We note that we did not propose 
any specific standards for substantial clinical improvement, but

[[Page 47302]]

instead, we were anticipating that members of the public, including 
those who recommended we revise our standards, would suggest some ideas 
that we could consider adopting in a subsequent notice of proposed 
rule-making. Our goal was to present the ideas submitted by the public 
commenters to learn whether past or potential future applicants would 
find them useful.
    In response to the comment suggesting that an applicant seek coding 
advice before submitting a new technology application, our regulations 
neither require nor prohibit an applicant from using the any specific 
type of expertise available in the health care community in preparing 
its application. We certainly encourage applicants to make the best 
possible case for why the technology that interests them should receive 
an add-on payment. If that effort involves use of a medical coder, we 
encourage the applicant to seek that expertise.
    Comment: One commenter recommended that CMS deem the ``drugs and 
biologicals for which the FDA has granted fast track approval or 
approval based on surrogate endpoints to represent substantial clinical 
improvements.'' The commenter also suggested that CMS deem a device to 
be a substantial clinical improvement ``* * * if it has been granted a 
humanitarian device exemption or priority review based on the fact that 
it represents breakthrough technologies, that offer significant 
advantages over existing approved alternatives, for which no 
alternatives exist, or the availability of which is in the best 
interests of the patients.''
    Response: The FDA provides a number of different types of approvals 
to devices, drugs and other medical products. At this time, we do not 
believe that any particular type of FDA approval alone would 
automatically demonstrate a substantial clinical improvement for the 
Medicare population. However, as noted in previous final rules, we do 
take FDA approval into consideration in our evaluation of new 
technology applications. We note that an Humanitarian Device Exemption 
(HDE) approval only requires an approval threshold of safety and 
probable benefit as opposed to the safety and effectiveness standard 
that exists for pre-market approval (PMA). Among other requirements, 
the labeling of a humanitarian use device must state that the 
effectiveness of the device for the specific indication has not been 
demonstrated. While an HDE approval certainly does not preclude us from 
considering a technology for an add-on payment (as we do in this final 
rule with comment period for Wingspan[supreg]), neither does it suggest 
that the product automatically meets the requirement to be judged a 
substantial clinical improvement. We will continue to evaluate products 
receiving an HDE approval by measuring it against the specific criteria 
we listed for determining substantial clinical improvement at 66 FR 
46914.
    Comment: One commenter stated that our current administration of 
the substantial clinical improvement criterion is ``inconsistent and 
unnecessarily opaque.'' The commenter recommended that CMS ``convene a 
panel of stakeholders, including researchers, clinicians, industry 
representatives and patient groups to develop specific, generally 
applicable criteria for determining whether a new product represents a 
substantial clinical improvement, including the creation of objective 
standards for the use of external data.'' The commenter specifically 
recommended that we convene a panel to consider, as a starting point 
for developing more specific standards on substantial clinical 
improvement, the following criteria:
    <bullet> Clinical Effectiveness: The expected magnitude of 
improvement in patient health outcomes, including mortality, morbidity, 
quality of life, and functional status.
    <bullet> Clinical and Organizational Efficiency: The expected 
impact of the technology on resource utilization, assessed at the level 
of individual patients. CMS would consider improvements in the timely 
and efficient delivery of care, as well as short and long-term savings 
across various settings of care. In addition, CMS would weigh the 
expected impact of the technology on resource utilization, assessed at 
the level of health care institutions and the health care system. This 
would include the impact on worker productivity, the extent to which 
the technology increases the capacity of existing facilities, etc.
    <bullet> Strength and Consistency of Evidence: The level of 
confidence that the judgments about clinical effectiveness and clinical 
efficiency are reliable and based on scientific studies, 
pathophysiologic reasoning, economic modeling, clinical judgment and 
other sources of information. The assessment of evidence should be 
undertaken with recognition of the practical and economic challenges to 
proving definitively the benefits of novel technologies.
    <bullet> Safety: The degree to which the technology may reduce the 
risk of adverse events for patients and health care providers.
    Response: In response to the comment that suggested that our 
application of the substantial clinical improvement criterion is 
``inconsistent and unnecessarily opaque,'' we again note that the 
intent of soliciting comments on this topic in the proposed rule was to 
obtain ideas for how to make improvements in our policy from those who 
are dissatisfied with it. Nevertheless, we reiterate that CMS has been 
committed to providing ample opportunity for applicants and other 
interested parties to make their views known to us through the 
application process, at the annual public meeting, and during the 
comment period on the proposed rule. We encourage interested parties to 
contact CMS staff for more information about the new technology add-on 
application process. Interested parties may contact Tiffany Swygert at 
(410) 786-4642 or Michael Treitel at (410) 786-4552.
    In response to the comment about convening a panel of stakeholders, 
we believe the commenter is suggesting that we establish an advisory 
panel under the Federal Advisory Committee Act (FACA). Although we 
believe it may be unnecessary to establish a FACA committee solely for 
this purpose, we do not have objections to having a one-time public 
meeting specifically to consider ideas that are raised on this topic. 
We convened a new technology and coding workshop this past year prior 
to the New Technology Town Hall meeting. We received favorable feedback 
from the many attendees at that meeting and we would consider having a 
similar meeting intended to garner ideas for addressing the topic of 
specific data standards.
    In response to the ideas offered in the public comments that could 
be used as a basis of developing more specific and transparent criteria 
for evaluating whether a technology represents a substantial clinical 
improvement, it is exactly these kinds of ideas for which we would like 
further public reaction--potentially through a forum like the public 
meeting noted above. We are interested in public comments from past or 
potential future new technology applicants and other stakeholders 
whether these ideas would improve the new technology application 
process and if they should be developed further.
    Comment: A number of commenters addressed topics relating to the 
marginal cost factor for new technology, implementation of ICD-10-CM, 
external

[[Page 47303]]

data, and changing our standards under the newness criterion.
    Response: We did not request comment nor propose to make any 
changes to any of the issues addressed by the commenters. As the 
comments are unrelated to any of the provisions in the proposed rule, 
we are not responding to them in this final rule with comment period.
3. FY 2008 Status of Technologies Approved for FY 2007 Add-On Payments
a. Endovascular Graft Repair of the Thoracic Aorta
    W. L. Gore & Associates, Inc., submitted an application for 
consideration of its Endovascular Graft Repair of the Thoracic Aorta 
(GORE TAG) for new technology add-on payments for FY 2006. The 
manufacturer argued that endovascular stent-grafting of the descending 
thoracic aorta provides a less invasive alternative to the traditional 
open surgical approach required for the management of descending 
thoracic aortic aneurysms. The GORE TAG device is a tubular stent-graft 
mounted on a catheter-based delivery system, and it replaces the 
synthetic graft normally sutured in place during open surgery. The 
device was initially identified using ICD-9-CM procedure code 39.79 
(Other endovascular repair (of aneurysm) of other vessels). The 
applicant also requested a unique ICD-9-CM procedure code. As noted in 
Table 6B of the FY 2006 IPPS final rule (70 FR 47637), new procedure 
code 39.73 (Endovascular implantation of graft in thoracic aorta) was 
assigned to this technology.
    In the FY 2006 IPPS final rule (70 FR 47356), we approved the GORE 
TAG device for new technology add-on payment for FY 2006. FDA approved 
GORE TAG on March 23, 2005. Because the technology remained within the 
2-to 3-year period during which it could be considered new for FY 2007, 
we continued add-on payments for the endovascular graft repair of the 
thoracic aorta in the FY 2007 IPPS final rule (71 FR 47999). GORE TAG 
will have been on the market for more than 3 years as of March 23, 
2008, or less than 6 months of FY 2008. Our practice has been to begin 
and end new technology add-on payments on the basis of a fiscal year. 
In general, we extend add-on payments for an additional year only if 
the 3-year anniversary date of the product's entry on the market occurs 
in the latter half of the fiscal year (70 FR 47362). Because the 3-year 
anniversary date of GORE TAG's entry onto the market was in the first 
half of the fiscal year, in the FY 2008 IPPS proposed rule, we proposed 
to discontinue its new technology add-on payment for FY 2008. In 
response to the proposed rule, we received the following public 
comments:
    Comment: One commenter recommended that we continue to make add-on 
payments for GORE TAG since the approval date of the device is only 8 
days away from being in the second half of FY 2008. The commenter 
requested that CMS should consider the possible delay in making this 
technology available on the market since devices can routinely take 
several months to enter the general provider population.
    Another commenter, the manufacturer of GORE TAG, also requested 
that we continue to make the new technology add-on payments for an 
additional year and noted that the technology remains inadequately paid 
under the MS-DRGs.
    Response: As we stated in the proposed rule, GORE TAG received FDA 
approval on March 23, 2005 which falls in the first half of FY 2005. 
The 3-year anniversary of the product's FDA approval will be during the 
first half of FY 2008. Our policy is that we only provide an additional 
year of new technology add-on payment if the 3-year anniversary of FDA 
approval is during the second half of the fiscal year unless we receive 
evidence of a documented delay in making the product available on the 
market. The manufacturer did not provide a documented delay in 
marketing of the device. Therefore, our policy is not to allow the 
product to receive an additional year of new technology add-on 
payments.
    Although we are not extending an additional year of new technology 
add-on payments to GORE TAG, we note that cases where a thoracic aortic 
stent is placed through an endovascular procedure will be reassigned 
from MS-DRG 238 (Major Cardiovascular Procedures without MCC) to MS-DRG 
237 (Major Cardiovascular Procedures without MCC). For more 
information, we refer readers to section II.D. of the preamble of this 
final rule with comment period.
    Because the technology no longer meets the newness criterion, we 
are finalizing our proposal to discontinue new technology add-on 
payments for GORE TAG for FY 2008.
b. Restore[supreg] Rechargeable Implantable Neurostimulator
    Medtronic Neurological submitted an application for new technology 
add-on payments for its Restore[supreg] Rechargeable Implantable 
Neurostimulator for FY 2006. The Restore[supreg] Rechargeable 
Implantable Neurostimulator is designed to deliver electrical 
stimulation to the spinal cord to block the sensation of pain. The 
technology standard for neurostimulators uses internal sealed batteries 
as the power source to generate the electrical current. These internal 
batteries have finite lives, and require replacement when their power 
has been completely discharged. According to the manufacturer, the 
Restore[supreg] Rechargeable Implantable Neurostimulator ``represents 
the next generation of neurostimulator technology, allowing the 
physician to set the voltage parameters in such a way that fully meets 
the patient's requirements to achieve adequate pain relief without fear 
of premature depletion of the battery.'' The applicant stated that the 
expected life of the Restore[supreg] rechargeable battery is 9 years, 
compared to an average life of 3 years for conventional neurostimulator 
batteries. We approved new technology add-on payments for all 
rechargeable, implantable neurostimulators for FY 2006 and FY 2007. 
Cases involving these devices, made by any manufacturer, are identified 
by the presence of newly created ICD-9-CM code 86.98 (Insertion or 
replacement of dual array rechargeable neurostimulator pulse 
generator).
    The FDA approved the Restore[supreg] Rechargeable Implantable 
Neurostimulator in 2005. However, as noted in the FY 2006 IPPS final 
rule (70 FR 47358), at least one similar product was approved by the 
FDA as early as April 2004. Because the Restore[supreg] Rechargeable 
Implantable Neurostimulator will be beyond the 2- to 3-year period 
during which it can be considered new for FY 2008, in the FY 2008 IPPS 
proposed rule, we proposed to discontinue add-on payments for the 
technology in FY 2008. In response to the proposed rule, we received 
the following public comments:
    Comment: The manufacturer of Restore[supreg] recommended that we 
continue to make add-on payments for rechargeable implantable 
neurostimulators for an additional year. The commenter indicated that 
an additional year of the add-on payment, ``maintains the hospital 
payment level for rechargeable neurostimulator devices until data 
reflects the market volume and costs associated with rechargeable 
technology.'' The commenter stated that ``rechargeable neurostimulators 
were launched in 2005 in a limited fashion and the majority were sold 
during the second half of FY 2005.'' The commenter also noted that 
Restore[supreg] was launched on the market on April 8, 2005 and that a 
unique ICD-9-

[[Page 47304]]

CM procedure code to identify rechargeable neurostimulators was not 
created until FY 2006. According to the commenter, prior to the date 
for which a unique ICD-9-CM code was effective, ``there was no way to 
identify rechargeable neurostimulators separately from non-rechargeable 
ones.'' The manufacturer stated that there were 12,801 rechargeable 
neurostimulators sold in FY 2006, but its analysis of FY 2006 MedPAR 
data showed that only 0.3 percent of all rechargeable neurostimulators 
sold in the United States were implanted in Medicare patients in the 
inpatient hospital setting. Therefore, the manufacturer suggested, the 
low utilization of rechargeable stimulators in FY 2005 may be 
justification for extending the add-on payment period because they 
``still fall within the 2-3 year period of newness to qualify for add-
on.''
    Response: Implantable rechargeable neurostimulators do not qualify 
for an additional year of new technology add-on payments. As we 
indicated in the FY 2006 final rule, the Advanced Bionics 
Precision[supreg] Rechargeable Neurostimulator was approved by the FDA 
on April 2004 (70 FR 47358). Thus, the FDA approved a substantially 
similar rechargeable neurostimulator product more than 3 years ago. No 
commenters provided documentation or even asserted that there was a 
delay in the marketing of the Advanced Bionics Precision[supreg] 
Rechargeable Neurostimulator. Therefore, we are finalizing our proposal 
to discontinue new technology add-on payments for rechargeable 
implantable neurostimulators for FY 2008. Although we are not extending 
an additional year of new technology add-on payments for rechargeable 
implantable neurostimulators, we are making the following DRG 
reassignments:
    <bullet> MDC 1--Spinal neurostimulators from MS-DRG 30 (Spinal 
Procedures without CC) to MS-DRG-29 (Spinal Procedures with CC);
    <bullet> MDC 1--Peripheral neurostimulators from MS-DRG 42 
(Peripheral and Cranial Nerve and Other Nervous System Procedures 
without CC) to MS-DRG 41 (Peripheral and Cranial Nerve and Other 
Nervous System Procedures with CC);
    <bullet> MDC 8--Full system spinal cord neurostimulators from MS-
DRG 491 (Back and Neck Procedures Except Spinal Fusion without CC/MCC) 
to MS-DRG 490 (Back and Neck Procedures Except Spinal Fusion with CC/
MCC or Disc Devices).
    For more information on DRG reassignments for rechargeable 
implantable neurostimulators, we refer readers to section II.G.2. of 
the preamble of this final rule with comment period.
c. X STOP Interspinous Process Decompression System
    St. Francis Medical Technologies submitted an application for new 
technology add-on payments for the X STOP Interspinous Process 
Decompression System (X STOP) for FY 2007. Lumbar spinal stenosis 
describes a condition that occurs when the spaces between bones in the 
spine become narrowed due to arthritis and other age-related 
conditions. This narrowing, or stenosis, causes nerves coming from the 
spinal cord to be compressed, thereby causing symptoms including pain, 
numbness, and weakness. It particularly causes symptoms when the spine 
is in extension, when a patient stands fully upright or leans back. The 
X STOP device is inserted between the spinous processes of adjacent 
vertebrae in order to provide a minimally invasive alternative to 
conservative treatment (exercise and physical therapy) and invasive 
surgery (spinal fusion). It works by limiting the spine's extension 
that compresses the nerve's roots while still preserving as much motion 
as possible. The device is inserted in a relatively simple, primarily 
outpatient procedure using local anesthesia. However, in some 
circumstances, the physician may prefer to admit the patient for an 
inpatient stay. The manufacturer described the device as providing ``a 
new minimally invasive, stand-alone alternative treatment for lumbar 
spinal stenosis.''
    The X STOP Interspinous Process Decompression system received pre-
market approval from the FDA on November 21, 2005. The device was 
initially described by ICD-9-CM code 84.58 (Implantation of 
Interspinous process decompression device) (excluding: fusion of spine 
(codes 81.00 through 81.08, and 81.30 through 81.39)). This ICD-9-CM 
code went into effect on October 1, 2005. As noted in section II.G.4.c. 
of this preamble of this final rule with comment period, X STOP will be 
identified by ICD-9-CM code 84.80 (Insertion or replacement of 
interspinous process device(s)), effective October 1, 2007.
    In the FY 2007 final rule, with respect to substantial clinical 
improvement, we noted our concern that, during the FDA approval 
process, the Center for Devices and Radiological Health Advisory Panel 
voted against pre-market approval of X STOP because of concerns about 
proper patient selection, as well as the lack of objective endpoints. 
The applicant addressed our concerns by demonstrating that the 
mechanism of effect on the spine in cadavers with in vivo clinical 
radiographic data. That is, the applicant was able to show that the X 
STOP device limits spine extension that compresses the nerve. Thus, we 
indicated that we believed the technology has promise for providing a 
less invasive alternative to procedures such as laminectomy or fusion 
for patients that have failed conservative treatment (exercise, 
physical therapy, and medication). The X STOP system represents a new 
level of treatment on the continuum of care for patients with lumbar 
spinal stenosis that previously did not exist.
    Accordingly, after consideration of the comments received, we 
approved the X STOP Interspinous Process Decompression System for new 
technology add-on payment for FY 2007. For FY 2007, cases involving X 
STOP were identified by ICD-9-CM code 84.58 (Implantation of 
interspinous process decompression device). These cases were generally 
included in CMS DRG 499 (Back and Neck Procedures Except Spinal Fusion 
with CC) and CMS DRG 500 (Back and Neck Procedures Except Spinal Fusion 
without CC) for FY 2007. As noted in section II.G.4.c. of the preamble 
of this final rule with comment period, beginning FY 2008, cases 
involving X STOP will be identified with ICD-9-CM code 84.80 and will 
generally be included in MS-DRG 490 (Back and Neck Procedures Except 
Spinal Fusion with CC/MCC or Disc Devices or Neurostimulator).
    The X STOP Interspinous Process Decompression System is still 
within the 2- to 3-year period during which it can be considered new 
for FY 2008. However, in the proposed rule, we noted that we were 
concerned that it may no longer meet the cost-threshold criterion. In 
section II.G.4.c. of the preamble of the FY 2008 IPPS proposed rule (72 
FR 24734), we proposed to adopt MS-DRGs for FY 2008 and assign cases 
with procedure codes 84.58 (replaced by procedure code ``84.80'' in 
this final rule with comment period) into proposed MS-DRG 490. Proposed 
MS-DRG 490 would include back and neck procedures except spinal fusion 
with a CC or MCC. As indicated earlier, we did a comprehensive review 
of the spinal fusion and nonspinal fusion DRGs. Based on this review, 
we proposed to further modify MS-DRG 490 to also include the higher 
cost of cases where the patient receives a spinal disc device such as 
an artificial spinal disc prosthesis, or an interspinous process 
decompression system. Our earlier analysis of the spinal and nonspinal 
fusion DRGs showed that the

[[Page 47305]]

average charge per case for cases involving X STOP is $29,162. The 
average charge per case for MS-DRG 490 is $29,656. Therefore, cases 
that use X STOP have a lower average charge per case than all cases in 
MS-DRG 490. The data show that the technology is not inadequately paid 
under the revised MS-DRGs, and it no longer meets the cost threshold 
for new technology add-on payment. For this reason, we proposed to 
discontinue new technology add-on payments for X STOP in FY 2008 and 
correlate the payments under MS-DRG 490. In the FY 2008 IPPS proposed 
rule, we noted that the high costs for cases using X STOP that 
necessitated an add-on payment under the CMS DRGs would no longer be 
necessary if we were to adopt MS-DRGs because of the higher payment 
that would be made under MS-DRG 490 (72 FR 24734).
    We received the following public comments on this proposal:
    Comment: One commenter supported our recommendation to discontinue 
add-on payment for X STOP since it would no longer meet the cost 
threshold under the MS-DRG system. However, the commenter noted that it 
would expect the add-on payment to continue if the MS-DRG system was 
not finalized as proposed.
    Response: In this final rule with comment period, we are finalizing 
our proposals to discontinue new technology add-on payments for X STOP 
in FY 2008 and to correlate the payments under MS-DRG 490.
4. FY 2008 Application for New Technology Add-On Payments
    Boston Scientific submitted an application for the Wingspan[supreg] 
Stent System with Gateway<SUP>TM</SUP> PTA Balloon Catheter 
(Wingspan[supreg]) for new technology add-on payments for FY 2008. The 
device is designed for the treatment of patients with significant 
intracranial arterial stenosis who are refractory to medical 
management. The device consists of the following: a self-expanding 
nitinol stent; a multilumen over wire delivery catheter; and a 
Gateway<SUP>TM</SUP> PTA Balloon Catheter. The device is used to treat 
stenoses that occur in the intracranial vessels. Prior to stent 
placement, the Gateway<SUP>TM</SUP> PTA Balloon is inflated to dilate 
the target lesion, and then the stent is deployed across the lesion to 
restore and maintain luminal patency. Effective October 1, 2004, two 
new ICD-9-CM procedure codes were created to code intracranial 
angioplasty and intracranial stenting procedures: procedure codes 00.62 
(Percutaneous angioplasty or atherectomy of intracranial vessels) and 
00.65 (Percutaneous insertion of intracranial vascular stents).
    On August 3, 2005, the Wingspan[supreg] was approved by the FDA as 
an HDE. We note that the applicant submitted an application for new 
technology add-on payment in FY 2006 but was not approved for add-on 
payment because it had not yet received FDA approval. In November 2006, 
we issued a national coverage determination (NCD) on intracranial 
stents. The NCD stated that the treatment of cerebral artery stenosis 
in patients with intracranial atherosclerotic disease with intracranial 
percutaneous transluminal angioplasty (PTA) and stenting is reasonable 
and necessary when furnished in accordance with the FDA-approved 
protocols governing Category B Investigational Device Exemption (IDE) 
clinical trials. Currently, there are no clinical trials in place for 
the Wingspan[supreg]. However, because the technology is covered by 
Medicare, if it is used in the setting of a clinical trial, in the FY 
2008 IPPS proposed rule, we evaluated whether the Wingspan[supreg] met 
the criteria for an inpatient new technology add-on payment. 
Wingspan[supreg] has been available on the market since August 3, 2005. 
Therefore, we believe that the technology meets the newness criterion.
    The applicant noted in its application that cases of intracranial 
angioplasty and stenting cases are currently grouped to CMS DRGs 533 
(Extracranial Procedure with CC) and 534 (Extracranial Procedure 
Without CC). However, the applicant believes these cases should be 
assigned to CMS DRGs 1 (Craniotomy Age >17 with CC), 2 (Craniotomy Age 
>17 without CC), and 543 (Craniotomy with Major Device Implant or Acute 
Complex Central Nervous System Principal Diagnosis) based on resource 
use and for clinical consistency with other endovascular intracranial 
procedures assigned to these DRGs. As discussed in section II.D. of the 
preamble of the proposed rule and this final rule with comment period, 
we proposed to move procedure code 00.62 to MS-DRGs 25, 26, and 27 
(Craniotomy & Endovascular Intracranial Procedures with MCC, with CC, 
and without CC/MCC, respectively) and MS-DRGs 23 and 24 (Craniotomy 
with Major Device Implant or Acute Complex Central Nervous System 
Principal Diagnosis with MCC or without MCC, respectively) under the 
MS-DRG system, which are comparable to DRGs 1, 2, and 543 under the 
current CMS DRG system.
    To demonstrate that the Wingspan[supreg] meets the cost threshold, 
the manufacturer submitted data from MedPAR and non-MedPAR databases. 
Using the FY 2005 MedPAR data, the applicant identified cases of 
intracranial angioplasty that had a procedure code of 39.50 
(Angioplasty or atherectomy of other noncoronary vessels) in 
combination with one of the following principal diagnosis codes: any 
principal diagnosis code that begins with the prefix of 433 (Occlusion 
and stenosis of precerebral arteries), excluding 433.10 (Carotid artery 
without mention of cerebral infarction) and 433.11 (Carotid artery with 
cerebral infarction); any principal diagnosis code that begins with the 
prefix of 434 (Occlusion of cerebral arteries), 437.0 (Cerebral 
atherosclerosis), 437.1 (Other generalized ischemic cerebrovascular 
disease), or 437.9 (Unspecified). The applicant noted that procedure 
code 39.50 is the predecessor code for identifying cases of 
intracranial angioplasty. The applicant explained that, given the 
newness of procedure codes 00.62 and 00.65 that were implemented 
beginning October 1, 2005, it believes there are still cases being 
coded with the predecessor procedure codes. Using this methodology, the 
applicant found 577 cases in DRG 533 and 179 cases in DRG 534. The 
applicant noted that charges in the MedPAR file do not include the 
total costs of devices, drugs, and medical supplies associated with the 
Wingspan[supreg], so the applicant conducted an estimate of the charges 
associated with the Wingspan[supreg]. The applicant determined that 
costs associated with the Wingspan[supreg] are approximately $10,073. 
Because we use charges to determine if a technology meets the 
threshold, it is necessary to inflate the costs to charges. Using the 
national average CCR of 0.47, the applicant inflated the costs 
associated with the Wingspan[supreg] to $21,432 in charges. After 
adding the charges associated with the Wingspan[supreg], the average 
standardized charge per case was $76,416 and $51,277 for DRGs 533 and 
534, respectively.
    In the proposed rule, we stated our concern that the cases 
identified by the applicant may not be a useful proxy to identify cases 
of intracranial angioplasty. Procedure code 39.50 describes cases of 
angioplasty in any artery of the body except the heart. Intracranial 
angioplasty with stenting was not covered by Medicare in any 
circumstance prior to October 2006. Therefore, the Medicare cases 
submitted by the applicant under procedure code 39.50 should not 
involve intracranial angioplasty because they are neither described by 
the code nor covered by Medicare. Furthermore, procedure code

[[Page 47306]]

00.62 is assigned to the Non-Covered Procedure edit of the MCE. The 
applicant supplied Medicare data from FY 2005 for claims coded with 
procedure code 00.62. It is unclear to us how these claims were 
processed despite the Non-Covered Procedure edit. Because these data 
appear to be based on claims that may not have been coded or processed 
correctly, we question the reliability and validity of these data. In 
the FY 2008 IPPS proposed rule, we noted our concern that it may not be 
appropriate to rely on these data for purposes of determining whether 
the technology meets the cost threshold (72 FR 24775).
    As stated above, the applicant also submitted non-Medicare data. 
The applicant used the 2005 patient discharge data from California's 
Office of Statewide Health Planning and Development database for 
hospitals in California and the 2005 patient data from Florida's Agency 
for Health Care Administration for hospitals in Florida. Similar to the 
analysis above, the applicant identified cases of intracranial 
angioplasty using procedure code 39.50 in combination with the 
diagnosis codes listed above. The applicant identified 43 cases in DRG 
533, and 21 cases in DRG 534. These cases already included charges 
associated with Wingspan[supreg] so it was not necessary to further 
increase them to include the cost of the technology like the applicant 
did with the Medicare data. The average standardized charge per case 
was $89,697 and $40,475 for DRGs 533 and 534, respectively. As 
discussed above, we are concerned about whether these cases actually 
represent cases of intracranial angioplasty and are concerned about our 
inability to validate non-Medicare data. In addition, similar to the 
analysis described above, the applicant also identified cases of 
intracranial angioplasty using procedure code 00.62. The applicant 
found 30 cases in DRG 533, and 23 cases in DRG 534. The average 
standardized charge per case was $93,215 and $31,479 for DRGs 533 and 
534, respectively. Based on these data, the applicant maintains that 
the technology meets the cost threshold.
    As noted above, the applicant has requested that cases of the 
Wingspan[supreg] be reassigned to CMS DRGs 1, 2 and 543. In section 
II.G.2. of the preamble of the proposed rule, we proposed to assign 
procedure code 00.62 to proposed MS-DRGs 23, 24, 25, 26 and 27, which 
we proposed to replace DRGs 1, 2, and 543 of the CMS DRGs. The 
thresholds in Table 10 of the Addendum of the FY 2007 IPPS final rule 
(as corrected at 71 FR 60040) for DRGs 1, 2 and 543 are $53,969, 
$37,116 and $64,397, respectively. Analyzing the same Medicare and non-
Medicare data that the applicant used to demonstrate that the 
Wingspan[supreg] exceeds the cost threshold for DRGs 533 and 534, the 
applicant compared the average standardized charge per case to the 
thresholds for DRGs 1, 2, and 543. The applicant maintains that the 
Wingspan[supreg] would still exceed the cost threshold even if it were 
reassigned to DRGs 1, 2, and 543.
    However, for the reasons described above, it was not clear to us at 
the time of the proposed rule whether Wingspan[supreg] met the cost 
threshold for new technology add-on payment. In the proposed rule, we 
welcomed public comments on this issue. In response, we received the 
following public comments:
    Comment: One commenter was concerned that the technology will not 
meet the cost criterion unless CMS accepts the external data submitted 
by the applicant. The commenter raised further concerns that CMS' 
narrow application of the cost criterion combined with the proposed MS-
DRGs will prevent technologies from being approved and discourage 
manufacturers from seeking add-on payments in the future. The commenter 
urged CMS to implement new technology add-on payments in a manner that 
encourages continued innovation and access to advanced technologies.
    The applicant supported our decision to reassign the technology 
from the MS-DRGs for extracranial procedures to the MS-DRGs for 
craniotomy. However, it stated that CMS should accept the MedPAR and 
non-MedPAR analyses to evaluate whether the technology meets the cost 
criterion. The commenter explained that the analysis is based on claims 
with unique codes which describe intracranial angioplasty and stenting 
and the economic results are consistent with analogous 
neuroendovascular procedures. The commenter also noted that two years 
of MedPAR data showed consistency in resources, mean length of stay and 
mean standardized charges. Additionally, the costs for cases of 
intracranial angioplasty with stenting (including resources such as 
hours spent in radiology, clinical monitoring, and advance imaging 
evaluations, among others) are consistent with unruptured brain 
aneurysm treatments with craniotomy assigned to CMS DRGs 1 and 2. The 
commenter stated that the MedPAR data currently reflect a low volume of 
cases of intracranial angioplasty because procedures using the 
technology have not been covered by Medicare. However, the applicant 
anticipates the volume of cases to increase now that Medicare coverage 
has been expanded to include the Wingspan [reg] HDE population. In 
addition, due to the newness of procedure code 00.62, the applicant 
supplemented the MedPAR data with external data that includes 
intracranial angioplasty and stenting which it asserts demonstrates the 
technology meets the cost criterion.
    In addition, the applicant submitted FY 2005 and FY 2006 MedPAR 
data that included any paid or unpaid cases where procedure code 00.62 
was coded. In the FY 2005 MedPAR, the applicant found 21 cases in DRG 
533 and fewer than 11 cases in DRG 534. The average standardized charge 
per case including an additional $21,432 for charges related to the 
device was $90,312 and $47,144 for DRGs 533 and 534 respectively. In 
the FY 2006 MedPAR, the applicant found 15 cases in DRG 533 and fewer 
than 11 cases in DRG 534. The average standardized charge per case 
including an additional $21,432 for charges related to the device was 
$75,032 and $55,759 for DRGs 533 and 534 respectively. Based on the 
data it submitted, the applicant maintains that the Wingspan [reg] 
meets the cost criteria for MS-DRGs 23, 24, 25, 26 and 27--the MS-DRGs 
to which the technology is assigned beginning in FY 2008.
    Response: Without further detail from the commenter, we cannot 
respond to the comment suggesting that we have applied the cost 
criterion too narrowly. However, we note that CMS policy is to accept 
external data to determine whether a technology meets the cost 
criterion provided that it can be validated. Although our preference is 
to evaluate the cost criterion using data that reflect the cost of 
cases using the technology in Medicare patients, we do have a policy 
that permits us to use external data.
    We continue to have concerns about validity and reliability of the 
claims for Medicare cases submitted by the applicant because of 
Medicare's policy of not covering intracranial angioplasty with 
stenting at all or only through an FDA approved clinical trial. We note 
that there is currently no clinical trial in place for Wingspan [reg] 
in the United States. Therefore, Medicare should not have paid for any 
case of intracranial angioplasty with stenting during the time period 
for which the applicant submitted claims. With respect to the external 
data submitted by the applicant, we believe it is a useful proxy to 
determine whether the average standardized charge per case exceeds the 
thresholds in Table 10. As the

[[Page 47307]]

applicant notes, the external data show that the average cost of these 
cases including the technology exceeds the cost thresholds shown in the 
IPPS rule for MS-DRGs 23 through 27.
    The applicant also maintains that the technology meets the 
substantial clinical improvement criterion. In the past there has been 
no surgical or medical treatment available for recurrent strokes that 
occur despite optimal medical management. The applicant asserts that 
the Wingspan [reg] provides a new treatment option for these patients. 
The applicant submitted three studies to support this position.
    First, the applicant cites data derived from a series of cases of 
45 patients who received the Wingspan [reg] that demonstrate 4.4 
percent composite ipsilateral stroke or death at 30 days, 7.0 percent 
composite ipsilateral stroke or death at 6 months, and 9.3 percent 
ipsilateral stroke or death at 13 months. The applicant then used 
patients in the well known Warfarin-Aspirin Symptomatic Intracranial 
Disease (WASID) trial as a historical control against which to compare 
patients who received Wingspan [reg]. The WASID trial compared the 
warfarin vs. aspirin therapy in treating symptomatic intracranial 
arterial stenosis, and it demonstrated a 23 percent stroke/death rate 
at one year in patients with severe (70 percent or greater) stenosis, 
and a 21 percent stroke/death rate at 2 years in patients with 50 
percent or greater stenosis. The applicant also submitted data from an 
ongoing Wingspan [reg] registry of patients that demonstrate a 4.8 
percent stroke/death rate at 30 days, and a 9.7 percent stroke/death 
rate at 3 to 6 month follow up in 72 patients. In addition, the 
applicant submitted data from a multicenter NIH registry of 131 
patients with 70 percent or greater stenosis that demonstrate an 8.4 
percent rate of stroke, intracerebral hemorrhage or death at 30 days 
and a 9.9 percent rate of stroke and death at the mean 3.2 months 
followup.
    As we noted in the FY 2008 IPPS proposed rule, while we recognize 
that Wingspan [reg] may represent a promising technology in patients 
with significant intracranial arterial stenosis who are refractory to 
medical management, we are concerned that, to date, there has been no 
controlled, randomized trial to demonstrate its clinical efficacy (72 
FR 24775). We are also concerned that the Wingspan [reg] data did not 
compare patients over the same followup periods as WASID. In addition, 
we are concerned over the use of WASID patients as a control group 
against which to compare Wingspan [reg] patients. The current FDA 
Humanitarian Device Exemption, in combination with the current CMS NCD, 
while providing access to this technology for very ill patients with 
generally poor prognoses who have few other options, also effectively 
designates the technology as investigational, and in need of further 
studies to prove its effectiveness. We would prefer that the product's 
effectiveness be demonstrated before we judge whether the product 
represents a substantial clinical improvement. For these reasons, we 
are concerned that there may not be sufficient evidence that Wingspan 
[reg] represents an advance that substantially improves the diagnosis 
or treatment of Medicare beneficiaries. However, in the proposed rule, 
we welcomed public comments that may pertain to this matter.
    Comment: Some commenters recommended that CMS approve Wingspan 
[reg]. None of the comments, except for a comment from the 
manufacturer, contained any data or analysis in response to our 
concerns regarding the substantial clinical improvement criterion. 
However, the manufacturer did submit a detailed comment, including two 
studies which were not published at the time of the initial 
application. One study was the original Wingspan [reg] study used to 
achieve HDE status with the FDA; this study was discussed in the FY 
2008 IPPS proposed rule (72 FR 24774-24775) and does not contain any 
new information regarding the efficacy of intracranial stenting. The 
second study involved a registry of 78 patients with >50 percent 
stenosis treated at four U.S. institutions, and it was designed to 
evaluate the acute results of intracranial stenting with the Wingspan 
[reg] device. Findings include a 6.1 percent major peri-procedural 
morbidity and mortality (5 of 78), of which 4 of 78 resulted in death 
within 30 days. The technical success rate was found to be 98.8% (81/
82). The authors of the study concluded that Wingspan [reg] has a high 
degree of technical success, that it has an acceptable risk of peri-
procedural morbidity and mortality, and that it is a viable 
endovascular treatment option.
    The manufacturer asserted again that the Wingspan [reg] device 
``addresses a treatment need for a patient population, who are 
unresponsive or inappropriate for other available options and otherwise 
face a high risk of stroke and death, if left untreated,'' and also 
that ``Wingspan's self-expanding stent design represents a substantial 
clinical improvement over off-label balloon expandable stents because 
of improved access, superior conformability in curved intracranial 
vessels, and atraumatic deployment to reduce the risk of vessel 
rupture.'' Finally, the manufacturer asserts significantly improved 
outcomes in patients receiving Wingspan [reg] compared to patients 
treated medically in the WASID study.
    Response: We acknowledge that the Wingspan [reg] technology has the 
potential to provide a new treatment option for patients who have 
severe intracranial arterial disease and who are failing currently 
available medical therapy. The FDA recognized the technology's 
potential by granting HDE status, and CMS did so by extending limited 
Medicare coverage in the context of an FDA approved clinical trial. 
However, neither FDA's HDE approval nor CMS's coverage with evidence 
development decision prove the technology's effectiveness. As we stated 
in the FY 2008 IPPS proposed rule, we would prefer that the product's 
effectiveness be demonstrated before we judge whether Wingspan [reg] is 
a substantial clinical improvement in patients that otherwise would 
have no treatment options. We note that the studies provided by the 
applicant articulate the need for controlled, randomized prospective 
studies to determine the effectiveness of the device. Therefore, even 
information submitted by the applicant raises the concern that it may 
be premature to find the technology to be a substantial clinical 
improvement because its effectiveness is yet to be determined.
    We remain concerned that in the absence of compelling data such as 
a prospective, randomized controlled study comparing similar groups of 
patients, there is not sufficient data to demonstrate that Wingspan 
[reg] patients have better outcomes than those who receive medical 
treatment. Similarly, the data presented also did not demonstrate 
Wingspan [reg] patients will not have worse outcomes than those who 
receive medical treatment. In addition, we do not believe that the 
currently available data adequately demonstrate effectiveness to 
qualify as a substantial clinical improvement over existing treatment, 
particularly in light of the very serious potential adverse events 
associated with the device. For these reasons, we are not approving the 
Wingspan [reg] for new technology add-on payments for FY 2008.
5. Technical Correction
    Section 1886(d)(5)(K)(i) of the Act requires that the Secretary 
establish a mechanism to recognize the costs of new medical services 
and technologies under subsection (d) of section 1886 of the Act. As 
made clear under section 1886(d)(1)(A) of the Act, subsection (d)

[[Page 47308]]

provides the methodology for payment with respect to the operating 
costs of inpatient hospital services. Section 1886(g) of the Act 
provides for payment of capital costs of inpatient hospital services. 
Although it has always been our policy that new technology add-on 
payment is available only with respect to operating costs, Sec.  
412.88(a)(2) of our regulations does not specifically refer to 
operating costs or the operating CCR. Therefore, we proposed to revise 
Sec.  412.88(a)(2) to clarify that the new technology add-on payment is 
available only for operating costs, and that we estimate the costs of a 
case by applying the hospital's operating CCR to the billed charges.
    We did not receive any public comment on this proposal. Therefore, 
we are finalizing the proposed revision of Sec.  412.88(a)(2) to 
clarify that the new technology add on payment is available only for 
operating costs. This correction will not have an impact on new 
technology add-on payments because, to the best of our knowledge, MACs 
already correctly apply only the operating CCR to calculate new 
technology add-on payments.

III. Changes to the Hospital Wage Index

A. Background

    Section 1886(d)(3)(E) of the Act requires that, as part of the 
methodology for determining prospective payments to hospitals, the 
Secretary must adjust the standardized amounts ``for area differences 
in hospital wage levels by a factor (established by the Secretary) 
reflecting the relative hospital wage level in the geographic area of 
the hospital compared to the national average hospital wage level.'' In 
accordance with the broad discretion conferred under the Act, we 
currently define hospital labor market areas based on the definitions 
of statistical areas established by the Office of Management and Budget 
(OMB). A discussion of the FY 2008 hospital wage index based on the 
statistical areas, including OMB's revised definitions of Metropolitan 
Areas, appears under section III.B. of the preamble of this final rule 
with comment period.
    Beginning October 1, 1993, section 1886(d)(3)(E) of the Act 
requires that we update the wage index annually. Furthermore, this 
section provides that the Secretary base the update on a survey of 
wages and wage-related costs of short-term, acute care hospitals. The 
survey must exclude the wages and wage-related costs incurred in 
furnishing skilled nursing services. This provision also requires us to 
make any updates or adjustments to the wage index in a manner that 
ensures that aggregate payments to hospitals are not affected by the 
change in the wage index. The adjustment for FY 2008 is discussed in 
section II.B. of the Addendum to this final rule with comment period.
    As discussed below in section III.I. of the preamble of this final 
rule with comment period, we also take into account the geographic 
reclassification of hospitals in accordance with sections 1886(d)(8)(B) 
and 1886(d)(10) of the Act when calculating IPPS payment amounts. Under 
section 1886(d)(8)(D) of the Act, the Secretary is required to adjust 
the standardized amounts so as to ensure that aggregate payments under 
the IPPS after implementation of the provisions of sections 
1886(d)(8)(B) and (C) and 1886(d)(10) of the Act are equal to the 
aggregate prospective payments that would have been made absent these 
provisions. The budget neutrality adjustment for FY 2008 is discussed 
in section II.A.4.b. of the Addendum to this final rule with comment 
period.
    Section 1886(d)(3)(E) of the Act also provides for the collection 
of data every 3 years on the occupational mix of employees for short-
term, acute care hospitals participating in the Medicare program, in 
order to construct an occupational mix adjustment to the wage index. A 
discussion of the occupational mix adjustment that we are applying 
beginning October 1, 2007 (the FY 2008 wage index) appears under 
section III.C. of the preamble of this final rule with comment period.

B. Core-Based Statistical Areas for the Hospital Wage Index

    The wage index is calculated and assigned to hospitals on the basis 
of the labor market area in which the hospital is located. In 
accordance with the broad discretion under section 1886(d)(3)(E) of the 
Act, beginning with FY 2005, we define hospital labor market areas 
based on the Core-Based Statistical Areas (CBSAs) established by OMB 
and announced in December 2003 (69 FR 49027). For a discussion of OMB's 
revised definitions of CBSAs and our implementation of the CBSA 
definitions, we refer readers to the preamble of the FY 2005 IPPS final 
rule (69 FR 49026 through 49032). The revised area designations 
established by OMB resulted in a higher wage index for some areas and a 
lower wage index for others. Further, some hospitals that were 
previously classified as urban became classified as rural. Given the 
significant payment impacts upon some hospitals because of these 
changes, we provided a transition period to the new labor market areas 
in the FY 2005 IPPS final rule. As part of that transition, we allowed 
urban hospitals that became rural under the new definitions to maintain 
their assignment to the Metropolitan Statistical Area (MSA) where they 
were previously located for the 3 year period of FY 2005, FY 2006, and 
FY 2007. For a discussion of the transition, we refer readers to the FY 
2005 IPPS final rule (69 FR 49032 through 49034).
    FY 2007 was the last year of the transition period for urban 
hospitals that became classified as rural. Therefore, for discharges on 
or after October 1, 2007 (FY 2008), these hospitals will receive their 
statewide rural wage index or their FY 2008 MGCRB reclassified wage 
index. (These hospitals were and are eligible to apply for 
reclassification by the MGCRB both during the transition period and in 
subsequent years. These hospitals are considered rural for 
reclassification purposes.)
    Consistent with the FY 2005, FY 2006, and FY 2007 IPPS final rules, 
for FY 2008 we are providing that hospitals receive 100 percent of 
their wage index based upon the CBSA configurations. Specifically, for 
each hospital, we will determine a wage index for FY 2008 employing 
wage index data from FY 2004 hospital cost reports and using the CBSA 
labor market definitions. We consider CBSAs that are MSAs to be urban, 
and CBSAs that are Micropolitan Statistical Areas as well as areas 
outside of CBSAs to be rural. In addition, where an MSA has been 
divided into Metropolitan Divisions, we consider the Metropolitan 
Division to comprise the labor market areas for purposes of calculating 
the wage index (69 FR 49029).
    On December 18, 2006, OMB announced the inclusion of two new CBSAs 
and the revision of designations for six areas (OMB Bulletin No. 07-
01). The new CBSAs are as follows:
    <bullet> Lake Havasu-Kingman, Arizona (CBSA 29420). This CBSA comes 
from Mohave County, Arizona.
    <bullet> Palm Coast, Florida (CBSA 37380). This CBSA comes from 
Flager County, Florida.
    The revised CBSA designations are as follows:
    <bullet> Mauldin, South Carolina and Easley, South Carolina qualify 
as new principal cities of the Greenville-Mauldin-Easley, South 
Carolina CBSA.
    <bullet> Conway, Arkansas qualifies as a new principal city of the 
Little Rock-North Little Rock-Conway, Arkansas CBSA.
    <bullet> Goleta, California qualifies as a new principal city of 
the Santa Barbara-Santa Maria-Goleta, California CBSA.

[[Page 47309]]

    <bullet> Franklin, Tennessee qualifies as a new principal city of 
the Nashville-Davidson-Murfreesboro-Franklin, Tennessee CBSA.
    <bullet> Fort Pierce, Florida no longer qualifies as a principal 
city of the Port St. Lucie-Fort Pierce, Florida CBSA; the new 
designation is Port St. Lucie, Florida CBSA.
    (We note also that OMB renamed the Essex County, Massachusetts 
Metropolitan Division as the Peabody, Massachusetts Metropolitan 
Division. OMB also changed the CBSA code from 21604 to 37764.)
    The OMB bulletin is available on the OMB Web site at http://www.whitehouse.gov/OMB--go to ``Bulletins'' or ``Statistical Programs 
and Standards.'' CMS will apply these changes to the IPPS beginning 
October 1, 2007.
    Comment: One commenter stated that the term ``Core-Based 
Statistical Area'' actually includes both Metropolitan Statistical 
Areas (MSAs) and Micropolitan Statistical Areas (Micropolitan). The 
commenter also noted that Micropolitan Areas are considered by CMS to 
be part of statewide rural areas. The commenter agreed that, for the FY 
2005 proposed and final rules, it was a good idea for CMS to 
differentiate between the old and new Census definitions by utilizing 
the term CBSA rather than MSA. However, the commenter suggested that, 
to be technically correct, CMS should now return to using the term MSAs 
when referring to urban areas.
    Response: We disagree with the commenter that we should now use the 
term ``MSA'' rather than ``CBSA'' when referring to urban areas. As the 
commenter noted, CBSA is the broader classification for MSAs and 
Micropolitan Areas. Therefore, it is technically correct to refer to 
either MSA or Micropolitan Areas as CBSAs. Further, when it is 
necessary for CMS to distinguish between urban and rural areas, we 
specify ``urban'' or ``rural''. In addition, we believe that our labor 
market area terminology and definitions are explained clearly enough in 
the preamble of our proposed and final rules to minimize confusion.

C. Occupational Mix Adjustment to the FY 2008 Wage Index

    As stated earlier, section 1886(d)(3)(E) of the Act provides for 
the collection of data every 3 years on the occupational mix of 
employees for each short-term, acute care hospital participating in the 
Medicare program, in order to construct an occupational mix adjustment 
to the wage index, for application beginning October 1, 2004 (the FY 
2005 wage index). The purpose of the occupational mix adjustment is to 
control for the effect of hospitals' employment choices on the wage 
index. For example, hospitals may choose to employ different 
combinations of registered nurses, licensed practical nurses, nursing 
aides, and medical assistants for the purpose of providing nursing care 
to their patients. The varying labor costs associated with these 
choices reflect hospital management decisions rather than geographic 
differences in the costs of labor.
1. Development of Data for the FY 2008 Occupational Mix Adjustment
    On October 14, 2005, we published a notice in the Federal Register 
(70 FR 60092) proposing to use a new survey, the 2006 Medicare Wage 
Index Occupational Mix Survey (the 2006 survey) to apply an 
occupational mix adjustment to the FY 2008 wage index. In the proposed 
2006 survey, we included several modifications based on the comments 
and recommendations we received on the 2003 survey, including (1) 
allowing hospitals to report their own average hourly wage rather than 
using BLS data; (2) extending the prospective survey period; and (3) 
reducing the number of occupational categories but refining the 
subcategories for registered nurses.
    We made the changes to the occupational categories in response to 
MedPAC comments to the FY 2005 IPPS final rule (69 FR 49036). 
Specifically, MedPAC recommended that CMS assess whether including 
subcategories of registered nurses would result in a more accurate 
occupational mix adjustment. MedPAC believed that including all 
registered nurses in a single category may obscure significant wage 
differences among the subcategories of registered nurses, for example, 
the wages of surgical registered nurses and floor registered nurses may 
differ. Also, to offset additional reporting burden for hospitals, 
MedPAC recommended that CMS should combine the general service 
categories that account for only a small percentage of a hospital's 
total hours with the ``all other occupations'' category because most of 
the occupational mix adjustment is correlated with the nursing general 
service category.
    In addition, in response to the public comments on the October 14, 
2005 notice, we modified the 2006 survey. On February 10, 2006, we 
published a Federal Register notice (71 FR 7047) that solicited 
comments and announced our intent to seek OMB approval on the revised 
occupational mix survey (Form CMS 10079 (2006)). OMB approved the 
survey on April 25, 2006.
    The 2006 survey provides for the collection of hospital specific 
wages and hours data, a 6-month prospective reporting period (that is, 
January 1, 2006, through June 30, 2006), the transfer of each general 
service category that comprised less than 4 percent of total hospital 
employees in the 2003 survey to the ``all other occupations'' category 
(the revised survey focuses only on the mix of nursing occupations), 
additional clarification of the definitions for the occupational 
categories, an expansion of the registered nurse category to include 
functional subcategories, and the exclusion of average hourly rate data 
associated with advance practice nurses.
    The 2006 survey included only two general occupational categories: 
nursing and ``all other occupations.'' The nursing category has four 
subcategories: registered nurses, licensed practical nurses, aides, 
orderlies, attendants, and medical assistants. The registered nurse 
subcategory includes two functional subcategories: management personnel 
and staff nurses or clinicians. As indicated above, the 2006 survey 
provided for a 6-month data collection period, from January 1, 2006 
through June 30, 2006. However, we allowed flexibility for the 
reporting period begin and end dates to accommodate some hospitals' bi-
weekly payroll and reporting systems. That is, the 6-month reporting 
period had to begin on or after December 25, 2005, and end before July 
9, 2006.
    We are using the 6-month 2006 survey data to calculate the 
occupational mix adjustment for the FY 2008 wage index. We used the 1st 
quarter of 2006 survey data in the FY 2007 wage index to comply with a 
court decision in Bellevue Hosp. Center v. Leavitt, 443 F.3d 163 (2nd 
Cir. 2006). For a discussion of our use of the 2006 survey data in the 
FY 2007 wage index, in compliance with the Bellevue decision, we refer 
readers to the FY 2007 IPPS final rule (71 FR 48007) as well as the FY 
2007 IPPS final notice (71 FR 59886). However, as stated above, we are 
using the entire 6-month 2006 survey data (that is, from the period 
January 1, 2006 through June 30, 2006) to calculate the occupational 
mix adjustment for the FY 2008 wage index.
2. Timeline for the Collection, Review, and Correction of the 
Occupational Mix Data
    In a Joint-Signature Memorandum that we issued on April 21, 2006 
(JSM-06412), and in the FY 2007 IPPS final rule (71 FR 48008), we 
discussed the

[[Page 47310]]

schedule for the 1st quarter 2006 occupational mix survey data that 
would be used in the FY 2007 wage index. The schedule included 
deadlines for--
    <bullet> Hospitals to submit 1st quarter occupational mix data. The 
deadline was June 1, 2006.
    <bullet> Fiscal intermediary/MAC review of the submitted 1st 
quarter data. The deadline was June 22, 2006.
    <bullet> Availability of the submitted first quarter data on the 
CMS Web site. The deadline was June 29, 2006.
    <bullet> Hospitals to submit requests to their fiscal intermediary/
MAC for corrections to their 1st quarter occupational mix data. The 
deadline was July 13, 2006.
    <bullet> Fiscal intermediaries/MAC to submit corrected 1st quarter 
occupational mix survey data to CMS. The deadline was July 27, 2006.
    In the Joint-Signature Memorandum, we also indicated that hospitals 
were to submit their 2nd quarter 2006 occupational mix survey data to 
their fiscal intermediary/MAC by August 31, 2006. On October 6, we 
published on our Web site both the audited 1st quarter and unaudited 
2nd quarter 2006 occupational survey data and Worksheet S-3 wage data 
to be used in calculating the FY 2008 wage index. In addition, we sent 
a letter to hospitals through their fiscal intermediary/MAC (dated 
October 6, 2006) that discussed the timeframe for reviewing and 
correcting Worksheet S-3 wage data and the 2nd quarter 2006 survey 
data, and an opportunity for hospitals to request additional 
adjustments to their 1st quarter 2006 survey data for the FY 2008 wage 
index. The revision and correction process for all of the data used for 
computing the FY 2008 wage index is discussed in detail in section 
III.K. of the preamble of this final rule with comment period.
3. Calculation of the Occupational Mix Adjustment for FY 2008
    For FY 2008 (as we did for FY 2007), we are calculating the 
occupational mix adjustment factor using the following steps:
    Step 1--For each hospital, determine the percentage of the total 
nursing category attributable to a nursing subcategory by dividing the 
nursing subcategory hours by the total nursing category's hours 
(registered nurse management personnel and registered nurse staff 
nurses or clinicians are treated as separate nursing subcategories). 
Repeat this computation for each of the five nursing subcategories: 
registered nurse management personnel; registered nurse staff nurses or 
clinicians; licensed practical nurses; nursing aides, orderlies, and 
attendants; and medical assistants.
    Step 2--Determine a national average hourly rate for each nursing 
subcategory by dividing a subcategory's total salaries for all 
hospitals in the occupational mix survey database by the subcategory's 
total hours for all hospitals in the occupational mix survey database.
    Step 3--For each hospital, determine an adjusted average hourly 
rate for each nursing subcategory by multiplying the percentage of the 
total nursing category (from Step 1) by the national average hourly 
rate for that nursing subcategory (from Step 2). Repeat this 
calculation for each of the five nursing subcategories.
    Step 4--For each hospital, determine the adjusted average hourly 
rate for the total nursing category by summing the adjusted average 
hourly rate (from Step 3) for each of the nursing subcategories.
    Step 5--Determine the national average hourly rate for the total 
nursing category by dividing total nursing category salaries for all 
hospitals in the occupational mix survey database by total nursing 
category hours for all hospitals in the occupational mix survey 
database.
    Step 6--For each hospital, compute the occupational mix adjustment 
factor for the total nursing category by dividing the national average 
hourly rate for the total nursing category (from Step 5) by the 
hospital's adjusted average hourly rate for the total nursing category 
(from Step 4).
    If the hospital's adjusted average hourly rate is less than the 
national average hourly rate (indicating the hospital employs a less 
costly mix of nursing employees), the occupational mix adjustment 
factor is greater than 1.0000. If the hospital's adjusted average 
hourly rate is greater than the national average hourly rate, the 
occupational mix adjustment factor is less than 1.0000.
    Step 7--For each hospital, calculate the occupational mix adjusted 
salaries and wage-related costs for the total nursing category by 
multiplying the hospital's total salaries and wage-related costs (from 
Step 5 of the unadjusted wage index calculation in section III.F. of 
the preamble of this final rule with comment period) by the percentage 
of the hospital's total workers attributable to the total nursing 
category (using the occupational mix survey data, this percentage is 
determined by dividing the hospital's total nursing category salaries 
by the hospital's total salaries for ``nursing and all other'') and by 
the total nursing category's occupational mix adjustment factor (from 
Step 6 above).
    The remaining portion of the hospital's total salaries and wage-
related costs that is attributable to all other employees of the 
hospital is not adjusted by the occupational mix. A hospital's all 
other portion is determined by subtracting the hospital's nursing 
category percentage from 100 percent.
    Step 8--For each hospital, calculate the total occupational mix 
adjusted salaries and wage related costs for a hospital by summing the 
occupational mix adjusted salaries and wage-related costs for the total 
nursing category (from Step 7) and the portion of the hospital's 
salaries and wage-related costs for all other employees (from Step 7).
    To compute a hospital's occupational mix adjusted average hourly 
wage, divide the hospital's total occupational mix adjusted salaries 
and wage-related costs by the hospital's total hours (from Step 4 of 
the unadjusted wage index calculation in section III.F. of the preamble 
of this final rule with comment period).
    Step 9--To compute the occupational mix adjusted average hourly 
wage for an urban or rural area, sum the total occupational mix 
adjusted salaries and wage-related costs for all hospitals in the area, 
then sum the total hours for all hospitals in the area. Next, divide 
the area's occupational mix adjusted salaries and wage-related costs by 
the area's hours.
    Step 10--To compute the national occupational mix adjusted average 
hourly wage, sum the total occupational mix adjusted salaries and wage-
related costs for all hospitals in the Nation, then sum the total hours 
for all hospitals in the Nation. Next, divide the national occupational 
mix adjusted salaries and wage-related costs by the national hours. The 
FY 2008 final occupational mix adjusted national average hourly wage is 
$30.9133.
    Step 11--To compute the occupational mix adjusted wage index, 
divide each area's occupational mix adjusted average hourly wage (Step 
9) by the national occupational mix adjusted average hourly wage (Step 
10).
    Step 12--To compute the Puerto Rico specific occupational mix 
adjusted wage index, follow Steps 1 through 11 above. The FY 2008 final 
occupational mix adjusted Puerto Rico specific average hourly wage is 
$13.5536.
    The table below is an illustrative example of the occupational mix 
adjustment.
BILLING CODE 4120-01-P

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BILLING CODE 4120-01-C

[[Page 47314]]

    Because the occupational mix adjustment is required by statute, all 
hospitals that are subject to payments under the IPPS, or any hospital 
that would be subject to the IPPS if not granted a waiver, must 
complete the occupational mix survey, unless the hospital has no 
associated cost report wage data that are included in the FY 2008 wage 
index.
    For the FY 2007 wage index, if a hospital did not respond to the 
occupational mix survey, or if we determined that a hospital's 
submitted data were too erroneous to include in the wage index, we 
assigned the hospital the average occupational mix adjustment for the 
labor market area (71 FR 48013). We believed this method had the least 
impact on the wage index for other hospitals in the area. For areas 
where no hospital submitted data for purposes of calculating the 
occupational mix adjustment, we applied the national occupational mix 
factor of 1.0000 in calculating the area's FY 2007 occupational mix 
adjusted wage index. We indicated in the FY 2007 IPPS final rule that 
we reserve the right to apply a different approach in future years, 
including potentially penalizing nonresponsive hospitals.
    For the FY 2008 wage index, we are handling the data for hospitals 
that did not respond to the occupational mix survey (neither the 1st 
quarter nor 2nd quarter data) in the same manner as discussed above for 
the FY 2007 wage index. In addition, if a hospital submitted survey 
data for either the 1st quarter or 2nd quarter, but not for both 
quarters, we used the data the hospital submitted for one quarter to 
calculate the hospital's FY 2008 occupational mix adjustment factor. 
Lastly, if a hospital submitted a survey(s), but that survey data could 
not be used because we determined it to be aberrant, we also assigned 
the hospital the average occupational mix adjustment for its labor 
market area. For example, if a hospital's individual nurse category 
average hourly wages were out of range (that is, unusually high or 
low), and the hospital did not provide sufficient documentation to 
explain the aberrancy, or the hospital did not submit any registered 
nurse staff salaries or hours data, we assigned the hospital the 
average occupational mix adjustment for the labor market area in which 
it is located.
    In calculating the average occupational mix adjustment factor for a 
labor market area, we replicated Steps 1 through 6 of the calculation 
for the occupational mix adjustment. However, instead of performing 
these steps at the hospital level, we aggregated the data at the labor 
market area level. In following these steps, for example, for CBSAs 
that contain providers that did not submit occupational mix survey 
data, the occupational mix adjustment factor ranged from a low of 
0.8971 (CBSA 39820, Redding, CA), to a high of 1.0731 (CBSA 19, Rural 
Louisiana). Also, in computing a hospital's occupational mix adjusted 
salaries and wage-related costs for nursing employees (Step 7 of the 
calculation), in the absence of occupational mix survey data, we 
multiplied the hospital's total salaries and wage-related costs by the 
percentage of the area's total workers attributable to the area's total 
nursing category. For FY 2008, there is one CBSA in which none of the 
providers submitted the occupational mix survey (CBSA 49740, Yuma, AZ). 
In the absence of any data in this labor market area, we applied an 
occupational mix adjustment factor of 1.0 to all provider(s).
    In the FY 2007 IPPS final rule, we also indicated that we would 
give serious consideration to applying a hospital-specific penalty if a 
hospital does not comply with regulations requiring submission of 
occupational mix survey data in future years. We stated that we believe 
that section 1886(d)(5)(I)(i) of the Act provides us with the authority 
to penalize hospitals that do not submit occupational mix survey data. 
That section authorizes us to provide for exceptions and adjustments to 
the payment amounts under IPPS as the Secretary deems appropriate. We 
also indicated that we would address this issue in the FY 2008 IPPS 
proposed rule.
    In the FY 2008 IPPS proposed rule, we solicited comments and 
suggestions for a hospital-specific penalty for hospitals that do not 
submit occupational mix survey. In response to the FY 2007 IPPS 
proposed rule, some commenters suggested a 1-percent to 2-percent 
reduction in the hospital's wage index value or a set percentage of the 
standardized amount. We note that any penalty that we would determine 
for nonresponsive hospitals would apply to a future wage index, not the 
FY 2008 wage index.
    Below is a summary of the public comments we received on the FY 
2008 IPPS proposed rule and our responses:
    Comment: Commenters supported CMS's proposal for the FY 2008 wage 
index to handle the occupational mix data for nonresponsive hospitals 
in the same manner as the data were handled for the FY 2007 wage index. 
The commenters also opined that full participation in the occupational 
mix survey is critical, and hospitals that do not participate should 
not benefit from the participation of others. Several commenters 
encouraged CMS to develop a methodology that encourages hospitals to 
report but does not unfairly penalize neighboring hospitals.
    In addition, two commenters recommended that, for future surveys, 
CMS should not simply provide substitute data for nonresponsive 
hospitals, because that data will also have an impact on other 
hospitals. One commenter suggested that CMS should consider a penalty 
for hospitals that do not respond to the occupational mix survey that 
would either reduce the hospital's wage index value by no more than 0.5 
percentage points, or reduce the hospital's standardized amount by no 
more than 0.4 percentage points (the original penalty applied to 
hospitals that did not submit quality data). The commenter noted that, 
since CMS began imposing the penalty for not reporting quality data, 
the rate of reporting that data has increased. Another commenter 
suggested a penalty of a 2-percent reduction in a hospital's wage index 
value for nonsubmission or submission of aberrant occupational mix 
data. Several commenters also suggested that, if CMS decides to adopt a 
penalty for non-responsive hospitals, CMS should also establish an 
appeal process for hospitals with extenuating circumstances (for 
example, hospitals affected by Hurricane Katrina).
    Response: As proposed, in the FY 2008 final wage index in this 
rule, we have assigned nonresponsive hospitals the average occupational 
mix adjustment for the labor market area. For areas where no hospital 
submitted survey data, we applied the national occupational mix 
adjustment factor of 1.0000 in calculating the area's FY 2008 
occupational mix adjusted wage index. We appreciate the suggestions we 
received regarding future penalties for hospitals that do not submit 
occupational mix survey data. We may consider proposing a policy to 
penalize hospitals that do not submit occupational mix survey data for 
FY 2010, the first year of the application of the new 2007-2008 
occupational mix survey. One option we may consider is paying hospitals 
that do not submit occupational mix survey data at the same reduced 
IPPS rate that currently applies to hospitals that do not submit 
quality data (or an update to the standardized amount that equals the 
market basket less 2.0 percentage points). We agree that hospitals may 
have extenuating circumstances that preclude them from submitting 
occupational mix survey data and they should not be subject to a 
nonresponse

[[Page 47315]]

penalty. For instance, hospitals that do not begin operations until 
after the survey period would clearly be unable to provide occupational 
mix survey data. There may be other extenuating circumstances as well 
that warrant special consideration. The survey period for the FY 2010 
occupational mix adjustment is July 1, 2007 to June 30, 2008. Hospitals 
will be required to submit occupational mix survey data from that time 
period to their fiscal intermediaries (or MAC) by September 1, 2008, or 
one month prior to the first day of FY 2009. Therefore, we would have 
more than a year to address any potential extenuating circumstances 
that could apply to hospitals that do not submit survey data. If we 
decide to adopt a policy that will penalize hospitals for not 
responding to the occupational mix survey, we will announce it in the 
FY 2009 IPPS proposed rule so hospitals will be aware of the policy 
prior to the deadline for submitting the data. The FY 2009 IPPS final 
rule will be made available to the public by August 1, 2008.
4. 2007-2008 Occupational Mix Survey for the FY 2010 Wage Index
    As stated earlier, section 304(c) of Pub. L. 106-554 amended 
section 1886(d)(3)(E) of the Act to require CMS to collect data every 3 
years on the occupational mix of employees for each short-term, acute 
care hospital participating in the Medicare program. We used 
occupational mix survey data collected in 2006 in the FY 2007 IPPS. 
Since we implemented the 2006 survey, we received several public 
comments suggesting further improvements to the occupational mix survey 
instructions and definitions. Specifically, some commenters recommended 
that we include certain employees, such as surgical technicians and 
paramedics in the occupational mix adjustment. The commenters indicated 
that these occupations perform similar functions, and in some cases, 
are used as substitutes for nursing staff. Therefore, they recommended 
that CMS include these occupations with the nursing categories on the 
survey. (On the 2003 and 2006 surveys, these categories were included 
in the ``All Other Occupations'' category.) The commenters also 
recommended that CMS expand the list of cost centers for the survey to 
include additional cost centers that contain a significant number of 
nursing personnel.
    Some commenters suggested that CMS not collect occupational mix 
data for the ``Registered Nurse'' subcategories (that is, Management 
Personnel and Staff Nurse/Clinician). The commenters expressed concern 
that requiring the subcategories led to errors and inconsistencies in 
reporting, and added to the hospitals' collection burden. The 
commenters did not believe that this level of specificity significantly 
affects the adjustment. Therefore they recommended that CMS eliminate 
the registered nurse subcategories.
    In addition, commenters recommended that CMS provide for a 1-year 
data collection period rather than a 6-month data collection period for 
the next survey collection. The commenters suggested that a 1-year data 
collection period would provide a better representation of a hospital's 
employment mix, which can vary during different times of the year. The 
commenters also indicated that a 1-year data collection period would 
allow hospitals to verify their wages and hours to year-end payroll 
reports and contractor invoices.
    In response to these suggestions we have modified the occupational 
mix survey. The revised 2007-2008 occupational mix survey will provide 
for the collection of hospital-specific wages and hours data for a 1-
year prospective reporting period from July 1, 2007, through June 30, 
2008, additional clarifications to the survey instructions, the 
elimination of the registered nurse subcategories, some refinements to 
the definitions of the occupational categories, and the inclusion of 
additional cost centers that typically provide nursing services. The 
revised 2007-2008 Medicare occupational mix survey will be applied 
beginning with the FY 2010 wage index.
    On February 2, 2007, we published a notice soliciting comments on 
the proposed revisions to the occupational mix survey (Form CMS-10079 
(2006)) (72 FR 5055). The comment period for the proposed survey ended 
on April 3, 2007. We are in the process of developing a final notice 
for publication in the Federal Register.

D. Worksheet S-3 Wage Data for the FY 2008 Wage Index

    The FY 2008 wage index values (to be effective for hospital 
discharges occurring on or after October 1, 2007, and before October 1, 
2008) in section II.B. of the Addendum to this final rule with comment 
period are based on the data collected from the Medicare cost reports 
submitted by hospitals for cost reporting periods beginning in FY 2004 
(the FY 2007 wage index was based on FY 2003 wage data).
1. Included Categories of Costs
    The FY 2008 wage index includes the following categories of data 
associated with costs paid under the IPPS (as well as outpatient 
costs):
    <bullet> Salaries and hours from short-term, acute care hospitals 
(including paid lunch hours and hours associated with military leave 
and jury duty).
    <bullet> Home office costs and hours.
    <bullet> Certain contract labor costs and hours (which includes 
direct patient care, certain top management, pharmacy, laboratory, and 
nonteaching physician Part A services, and certain indirect patient 
care as discussed in section III.D.2. of the preamble of this final 
rule with comment period).
    <bullet> Wage-related costs, including pensions and other deferred 
compensation costs.
2. Contract Labor for Indirect Patient Care Services
    In the FY 2003 IPPS final rule (67 FR 50022), we discussed the 
inclusion of contract labor cost in calculating the wage index. Our 
policy has evolved over the years with the increasing role of contract 
labor in meeting special personnel needs of hospitals. In response to 
suggestions that we further expand our definition of contract labor for 
the wage index, we indicated our intent to begin collecting data in 
future Medicare cost reports on the following overhead services: 
administrative and general (A&G); housekeeping; and dietary. We 
selected these three overhead services for consideration because they 
are provided at all hospitals, either directly or through contracts, 
and together they comprise about 60 percent of a hospital's overhead 
hours. Consistent with our consideration of contract A&G services, we 
also stated that we would begin collecting costs and hours data 
associated with other contract management services that would not be 
included on the cost report as overhead A&G and are not top management 
contracts (that is, the chief executive officer, chief financial 
officer, chief operating officer, and nurse administrator) that are 
included on Line 9 of Worksheet S-3, Part II.
    We revised the cost report, beginning October 1, 2003 (the FY 2004 
cost report), to provide for the collection of cost and hours data for 
the four identified contract indirect patient care services. We added 
four new line items to Worksheet S-3, Part II: Line 9.03 (Contract 
management and administrative services); Line 22.01 (Contract A&G 
services); Line 26.01 (Contract housekeeping services); and Line 27.01 
(Contract dietary services). We stated in the FY 2003 final rule that 
our decision on whether to include these costs in calculating the wage

[[Page 47316]]

index would depend on our analyses of the data and public comments. The 
FY 2008 wage index, which is based on FY 2004 cost report data, is the 
first year that we can assess the impact of including these costs in 
the wage index.
    As part of the FY 2008 wage index desk review program, we required 
the fiscal intermediaries (or, if applicable, the MAC) to verify the 
accuracy of the data reported on the new Lines 9.03, 22.01, 26.01, and 
27.01. As we discussed in the FY 2008 IPPS proposed rule, after 
completion of these reviews, some hospitals continued to fail our edits 
for reasonableness. Many of these edit failures were for wage data that 
were not to be included in the wage index and would be excluded through 
the wage index calculation. Some hospitals that continued to critically 
fail edits related to contract labor were also designated for removal 
from the FY 2008 wage index due to failure of other critical wage 
edits. In addition, some of the aberrant data were resolved through the 
correction process described in section III.K. of the preamble of this 
final rule with comment period. Ultimately, we believe that the amount 
of aberrant data on these new line items is minimal and will have 
little impact on area wage index values. In addition, we have simulated 
the effect of including these wage data for contract indirect patient 
care services on the wage index. We note that the results of these 
simulations differ from those specified in the FY 2008 IPPS proposed 
rule (72 FR 24782) not only because we used more updated and accurate 
wage data for the final rule analysis, but also because of changes we 
incorporated into Step 2 and Step 4 of the wage index calculation for 
this final rule with comment period to more accurately account for the 
wages and hours of contract labor. (We refer readers to section III.G., 
Computation of the FY 2008 Unadjusted Wage Index, of this preamble for 
a more detailed explanation of the changes to the wage index 
calculation).
    Under this simulation, we found that the resulting average hourly 
wage will not be affected for 3,032 hospitals (85.0 percent), will 
decrease for 327 hospitals (9.2 percent), and will increase for 209 
hospitals (5.9 percent). The average hourly wage for 12 hospitals will 
decline by 5 percent or greater (the largest being 7.8 percent). The 
average hourly wage for 67 hospitals will decline between 1 and 5 
percent. Twenty-one hospitals are experiencing an increase of 1 percent 
or greater in average hourly wage from this policy, with the increase 
for 2 of these hospitals being larger than 5 percent (the largest 
increase is 7.8 percent.) At the labor market area level, we found that 
the resulting average hourly wage will not affect 232 areas (53.3 
percent), will decrease for 132 areas (30.3 percent), and will increase 
for 71 areas (16.3 percent). The wage index of 13 areas will decrease 
between 1 percent and 5 percent, with the largest decrease for an urban 
area being 4.07 percent and the largest decrease for a rural area being 
0.63 percent. The largest increase in an area's wage index is 0.69 
percent for an urban area and 0.30 percent for a rural area.
    As a result of the correction, and using the final data, the 
combined effect on the FY 2008 wage index of including the new contract 
labor lines 9.03, 22.01, 26.01, and 27.01 is the following for 
hospitals:

------------------------------------------------------------------------
                                                              Number of
                Percent change to wage index                  hospitals
------------------------------------------------------------------------
Greater than -5 percent....................................            0
-1 percent to -5 percent...................................           47
Between -1 percent and +1 percent..........................        3,522
+1 percent to +5 percent...................................            0
Greater than +5 percent....................................            0
------------------------------------------------------------------------

    The wage index values for 98.7 percent of all hospitals will change 
by less than 1 percent, and 119 hospitals (3.3 percent) will experience 
no change as a result of including the new contract labor lines. We 
believe that the combined effect of including these costs in the wage 
index is negligible because the higher labor costs associated with 
contract management and A&G services are offset by the lower labor 
costs associated with contract housekeeping and dietary services.
    Public commenters have expressed interest in including in the wage 
index the costs and hours for contract management, A&G, housekeeping, 
and dietary services. We also believe that including a more 
comprehensive measure of area differences in the cost of labor will 
improve the accuracy of the wage index. For these reasons, we are 
including these contract services in the wage index, beginning with FY 
2008.
    In the FY 2008 IPPS proposed rule, we invited public comment on 
whether we should revise a future cost report to collect contract labor 
data for the remaining indirect patient care cost centers on Worksheet 
S-3, Part II for possible inclusion in the wage index. We indicated 
that we would consider these comments in the context of potential 
reforms of the IPPS wage index for FY 2009 and subsequent years. As 
indicated in section III.M. of the preamble of this final rule with 
comment period, section 106(b) of the MIEACMS-TRHCA (Pub. L. 109-432) 
requires the Secretary to consider a MedPAC study and nine specific 
aspects of the wage index in making one or more proposals for revisions 
in FY 2009.
    Comment: Several commenters stated that they supported including 
salaries and hours for contract indirect patient care services in the 
wage index, as it discourages hospitals from outsourcing in order to 
raise their average hourly wage for the wage index. However, they noted 
that CMS had made an error in computing the wage index in the proposed 
rule with regards to lines 22.01, 26.01, and 27.01. The new lines were 
included in Step 4 of the calculation (the step that allocates a 
portion of overhead wages and wage related costs to excluded areas, and 
then subtracts the associated amount from total wages and wage-related 
costs). However, lines 22.01, 26.01, and 27.01 were not included in 
total wages in Step 2. Therefore, an amount for overhead wages and wage 
related costs for excluded areas was subtracted from total wages that 
did not include those costs. The commenters requested that CMS correct 
the calculation and reassess the impact on hospitals of including the 
new contract indirect patient care services in the wage index.
    Some commenters recommended that CMS provide a transition if the 
impact of including overhead contract labor costs in the wage index on 
any hospital is great. One commenter suggested that CMS should provide 
a 2-3 year transition for labor market areas that have more than a 2 
percent reduction in the wage index. In addition, the commenter urged 
CMS to revise future cost reports to collect the remaining contract 
labor indirect patient care costs on Worksheet S-3, Part II for 
possible inclusion in the wage index.
    Response: We appreciate the commenters bringing to our attention 
the error in the proposed wage index calculation. As indicated above, 
we have corrected the calculation.
    As discussed above, we believe the impact of this policy is 
generally very minor, and we do not believe the additional complexity 
of a transition wage index is warranted for an impact this small. 
Further, we continue to believe it is prudent policy to include in the 
wage index the costs for these contract indirect patient care services. 
Therefore, we are adopting this policy, beginning with the FY 2008 wage 
index. We will consider the inclusion of contract labor costs 
associated with the remaining indirect cost centers on Worksheet S-3, 
Part II, in our study of

[[Page 47317]]

wage index reforms for FY 2009 and future years.
3. Excluded Categories of Costs
    Consistent with the wage index methodology for FY 2007, the wage 
index for FY 2008 also excludes the direct and overhead salaries and 
hours for services not subject to IPPS payment, such as SNF services, 
home health services, costs related to GME (teaching physicians and 
residents) and certified registered nurse anesthetists (CRNAs), and 
other subprovider components that are not paid under the IPPS. The FY 
2008 wage index also excludes the salaries, hours, and wage-related 
costs of hospital-based rural health clinics (RHCs), and Federally 
qualified health centers (FQHCs) because Medicare pays for these costs 
outside of the IPPS (68 FR 45395). In addition, salaries, hours, and 
wage-related costs of CAHs are excluded from the wage index, for the 
reasons explained in the FY 2004 IPPS final rule (68 FR 45397).
4. Use of Wage Index Data by Providers Other Than Acute Care Hospitals 
Under the IPPS
    Data collected for the IPPS wage index are also currently used to 
calculate wage indices applicable to other providers, such as SNFs, 
home health agencies, and hospices. In addition, they are used for 
prospective payments to IRFs, IPFs, and LTCHs, and for hospital 
outpatient services. We note that, in the IPPS rules, we do not address 
comments pertaining to the wage indices for non-IPPS providers. Such 
comments should be made in response to separate proposed rules for 
those providers.

E. Verification of Worksheet S-3 Wage Data

    The wage data for the FY 2008 wage index were obtained from 
Worksheet S-3, Parts II and III of the FY 2004 Medicare cost reports. 
Instructions for completing the Worksheet S-3, Parts II and III are in 
the Provider Reimbursement Manual, Part I, sections 3605.2 and 3605.3. 
The data file used to construct the wage index includes FY 2004 data 
submitted to us as of February 26, 2007. As in past years, we performed 
an intensive review of the wage data, mostly through the use of edits 
designed to identify aberrant data.
    We asked our fiscal intermediaries/MAC to revise or verify data 
elements that resulted in specific edit failures. For the proposed FY 
2008 wage index, we identified and excluded 23 hospitals with data that 
were too aberrant to include in the proposed wage index, although we 
stated that if these data elements were corrected, we intended to 
include some of these providers in the FY 2008 final wage index. 
However, because some unresolved data elements were included in the 
calculation of the proposed FY 2008 wage index, we instructed fiscal 
intermediaries/MAC to complete their data verification of questionable 
data elements and to transmit any changes to the wage data no later 
than April 13, 2007. While the data for some hospitals were resolved, 
the data for some other hospitals were identified as too aberrant to 
include in the final wage index. Therefore, we determined that the data 
for 30 hospitals should not be included in the FY 2008 final wage 
index.
    In constructing the FY 2008 wage index, we include the wage data 
for facilities that were IPPS hospitals in FY 2004, even for those 
facilities that have since terminated their participation in the 
program as hospitals, as long as those data do not fail any of our 
edits for reasonableness. We believe that including the wage data for 
these hospitals is, in general, appropriate to reflect the economic 
conditions in the various labor market areas during the relevant past 
period. However, we exclude the wage data for CAHs as discussed in 68 
FR 45397. For this final rule with comment period, we removed 19 
hospitals that converted to CAH status between February 17, 2006, the 
cut-off date for CAH exclusion from the FY 2007 wage index, and 
February 16, 2007, the cut-off date for CAH exclusion from the FY 2008 
wage index. After removing hospitals with aberrant data and hospitals 
that converted to CAH status, the FY 2008 wage index is calculated 
based on 3,569 hospitals.
F. Wage Index for Multicampus Hospitals
    As discussed earlier under section III.B. of the preamble of this 
final rule with comment period, effective October 1, 2004, for the 
IPPS, CMS implemented new labor market areas based on the CBSA 
definitions of MSAs. As a result of these labor market areas, there are 
multicampus hospitals previously located in a single MSA that are now 
located in more than one CBSA. A multicampus hospital is a single 
integrated institution. For this reason, the multicampus hospital has 
one provider number and submits a single cost report that combines the 
total wages and hours of each of its campuses. When campuses of a 
multicampus hospital are located in the same CBSA, the wages and hours 
for the entire institution are included in the calculation of the wage 
index for that labor market area and there is no need to separate the 
data by campus. However, when a multicampus hospital has campuses 
located in different labor market areas, wages and hours are reported 
in a single CBSA even though the hospital's staff is working at 
campuses in more than one labor market area. The wage data are reported 
in the labor market area of the hospital campus associated with the 
provider number. Wages and hours are not reported separately for each 
campus and no data from the multicampus hospital are used in 
determining the wage index for the labor market area(s) where the other 
campus(es) are located. Under Sec.  412.64(b)(5) of our regulations, 
the wage-adjusted standardized amount is based on geographic location 
of the hospital facility at which the discharge occurred. Therefore, 
the wage index for each hospital campus used to make the IPPS payment 
is based on its geographic location, while the wage data from all of 
the campuses, including those that may be located in a different 
geographic area, are applied to one area only. We have received 
inquiries from several hospitals suggesting that we should adopt a 
policy that results in an allocation of a multicampus hospital's wages 
and hours across the different labor market areas where its campuses 
are located.
    The wage index was developed to adjust the IPPS standardized amount 
to reflect area differences in hospital wage levels in the hospital's 
geographic area compared to the national hospital wage level as 
required under section 1886(d)(3)(E) of the Act. Although we 
acknowledge that reporting the wage data into a single labor market 
area when individual campuses of a multicampus hospital are located in 
different labor market areas may not allocate wage data with exact 
precision, the Medicare cost report, in its current form, does not 
enable a multicampus hospital to separately report its costs by 
location. The fact that a multicampus hospital submits a single cost 
report reflects that it is an integrated institution with one 
accounting structure. Nevertheless, we agree with the comments brought 
to our attention that we should consider a policy that allocates a 
multicampus hospital's wages and hours among the different labor market 
areas where it is located. That is, rather than giving 100 percent of 
the hospital's wage data to the labor market area associated with its 
provider number, we believe that an allocation of its wage data should 
be made to each campus.
    We considered three alternative methods of apportionment: beds, 
discharges, or FTE staff. A hospital's number of discharges can 
fluctuate from

[[Page 47318]]

year to year and may be an unstable data source to use in allocating a 
hospital's wages and hours among the different campuses. Alternatively, 
while a hospital's number of beds is a more static number, it likely 
does not correlate well with how a hospital incurs its wage costs. 
Furthermore, neither of these numbers is available on a campus-specific 
basis in Medicare's data systems. (While an individual campus of a 
multicampus hospital located in a different labor market area than the 
remainder of the institution is required to indicate a suffix on its 
provider number when submitting a claim in order to receive payment 
using the wage index for its geographic location, the suffix is only 
used by the fiscal intermediary (or, if applicable, the MAC) and is not 
retained in Medicare's historical data files that we use to determine 
IPPS rates).
    Given the unavailability of beds and discharges and their 
respective drawbacks for allocating wages and hours across multiple 
campuses, in the FY 2008 IPPS proposed rule, we proposed to apportion 
wages and hours for each campus of a multicampus hospital based on FTE 
staff. For example, a multicampus hospital may have three campuses 
located in two different labor market areas. Campuses A and B are 
located in labor market area 1 and have 50 and 25 FTEs, respectively. 
Campus C is located in labor market area 2 and has an additional 25 
FTEs. Therefore, 75 percent of the hospital's FTEs work in labor market 
1 and 25 percent in labor market area 2. Under the proposed policy, we 
would apportion 75 percent of the hospital's occupational mix adjusted 
total salaries, wage-related costs and hours to labor market 1 and 25 
percent to labor market 2. We believe that the number of FTEs will 
provide the best method of apportioning wages and hours among the 
different campuses, thereby allowing the apportioned wage data to be 
included in each geographic area where the hospital has employees 
working.
    We indicated that the proposed policy would require the 
identification of all multicampus hospitals located in more than one 
CBSA, the county, State, and zip code of each campus, and the campus-
specific number of FTEs. Based on our comprehensive interactions with 
our fiscal intermediaries since adopting the revised labor market areas 
beginning in FY 2005, we are only aware of three multicampus hospitals 
that are located in more than one labor market area. We are beginning 
the process to make updates and refinements to the cost report for the 
future. We are currently planning to add additional lines to Worksheet 
S-2 of the cost report that will allow a multicampus hospital to report 
the locations of its different campuses (county, State, and zip code) 
and number of FTE staff by location so this information would become 
part of the cost report submission process. The effective date of the 
revised cost report is not expected until FY 2009. Therefore, we would 
not have data from multicampus hospitals under our normal wage data 
collection process to be able to allocate wages to each labor market 
area by FTEs until at least the FY 2013 wage index. In the interim, we 
proposed to collect this information from multicampus hospitals on a 
small survey form through our fiscal intermediaries/MAC as part of the 
wage index desk review process beginning with the FY 2009 wage index. 
In the proposed rule, we indicated that we will not be able to apply 
this policy to the FY 2008 wage index unless we have this information 
from multicampus hospitals prior to the close of the comment period for 
the proposed rule. Therefore, for the FY 2008 wage index, we indicated 
that multicampus hospitals with campuses located in more than one 
geographic area should submit the information during the comment period 
on the proposed rule for the county, State, and zip code of its 
campuses, and the FTE number, including contract labor, per campus 
along with supporting documentation.
    We stated that the hospitals should submit data from their FY 2004 
cost reporting period to match the same data that will be used for the 
FY 2008 wage index. However, if unavailable, the hospital may submit 
the data for a subsequent cost reporting period that is closest to the 
FY 2004 reporting period that provides the information in order to 
apportion the hospital's wage data among its campuses. These data will 
enable CMS to apportion the wages and hours of the multicampus hospital 
among its different campuses for use in the FY 2008 wage index 
calculations should the proposal become final.
    As stated earlier, we are only aware of three hospitals that would 
be affected by this information collection request. As stipulated under 
5 CFR 1320.3(c)(4), the proposed information collection request is 
exempt from the Paperwork Reduction Act (PRA) as it does not affect 10 
or more persons within a 12-month period. In the proposed rule, we 
stated that if, during the IPPS rule comment period, we determine the 
number of affected persons surpasses the threshold of 10 as specified 
in 5 CFR 1320.3(c)(4), we would not adopt the policy until FY 2009 in 
order for us to seek the requisite approval from OMB under the PRA. As 
we discuss below, only two hospitals are affected by the data 
submission. Therefore, the information collection is exempt from the 
PRA.
    Comment: Several commenters were supportive of our proposed policy 
to include the wages and hours of each campus of a multicampus hospital 
in the wage index calculation of its respective CBSA, as opposed to the 
current situation where all wages and hours for the entire hospital are 
included in the CBSA where the campus associated with the provider 
number is located. However, the commenters urged that we exercise 
flexibility with respect to the basis for allocating the wage data 
among the campuses. Some commenters stressed the difficulty for 
hospitals with fully integrated operations to collect data and 
determine an FTE count for each campus, particularly in light of the 
short timeframe to submit this information. One commenter suggested 
three alternative approaches to allocating wage data that may be much 
less administratively burdensome than collecting FTE information: 
Medicare discharges; Medicare inpatient and outpatient reimbursement; 
and number of beds.
    Another commenter, a multicampus hospital, believed that providing 
FTEs for each campus is extremely burdensome, given the fully 
integrated structure of its organization. The commenter stated that 
over half of the organization's employees have responsibilities at two 
and three of its campuses. The commenter indicated that some types of 
employees, such as those involved with information services and human 
resources, spend time at all three campuses and nurses move from 
facility to facility depending on need. While this commenter offered 
support for CMS' proposal, the commenter also suggested that there are 
better, simpler, and easier methods to consider. The commenter 
suggested that CMS allow discharges as the basis for allocating 
salaries and hours among campuses. Another multicampus hospital 
recommended that, in order to determine the FTEs per campus, CMS should 
allow multicampus hospitals to use a methodology that allocates the 
wages and hours of staff not directly assigned to a single campus using 
the same proportions as the staff that are directly assigned to a 
single campus.
    There was consensus among the commenters that the benefit of having 
more accuracy in the wage index calculations should outweigh concerns 
over which alternative methods to use

[[Page 47319]]

in of allocating salaries and hours, particularly as it relates to FY 
2008 and the time constraints involved. Moreover, one commenter 
believed that discharge data from its campuses would be a more accurate 
means of allocating at this point because there was not enough time to 
accurately assign FTEs to each campus. Another commenter pointed out 
that to not allocate salaries and hours to each campus runs contrary to 
Congress' intent when it established the area wage adjustment and the 
method is not as important as is the result.
    Response: For the FY 2008 wage index, we received the requested 
data from one multicampus hospital. Although the hospital stated some 
of the concerns summarized in the comments above about the difficulty 
of providing these data, it was able to provide FTEs per campus by the 
close of the comment period on June 12, 2007. We appreciate the efforts 
this multicampus hospital made to provide the requested data, given the 
short timeframe and the difficulty it reported in collecting the data.
    Another commenter submitted a multicampus hospital's number of beds 
and suggested that CMS use this information to allocate the multicampus 
hospital's wages and hours by campus in the absence of the number of 
FTEs if the multicampus hospital did not provide the requested 
information.
    We continue to believe that using FTE data is the most appropriate 
methodology for apportioning salaries and hours among the campuses. 
However, in light of the comments and after further consideration, we 
have concluded that, given the time constraints, it is reasonable to 
use Medicare discharge data in the absence of FTE data until we have a 
routine process for collecting this information via Worksheet S-3 of 
the Medicare cost report. Although we stated in the proposed rule that 
discharge data are not available on a campus-specific basis in 
Medicare's data systems, we have since determined that the data can be 
obtained through the local systems of the fiscal intermediaries/MAC. We 
believe that Medicare discharge data, although not ideal for allocating 
salaries and hours, provide a reasonable indication of staffing 
requirements for each campus. We continue to believe that the number of 
beds does not correlate well with how a hospital incurs its wage costs. 
A hospital's bed size alone, without its occupancy rate, does not 
necessarily reflect a hospital's staffing needs, whereas the number of 
discharges does provide a more accurate measure of a hospital's 
staffing requirements. Therefore, we have chosen not to use the number 
of beds as an alternative method for allocating wage data to the 
campuses of multicampus hospitals in the absence of FTE data. 
Therefore, as our final policy, and as reflected in the FY 2008 wage 
index in this final rule with comment period, we are using FTEs or 
Medicare discharge data to allocate salaries and hours to the campuses 
of multicampus hospitals that are located in different labor markets. 
We will continue the policy of using annually reported FTEs or Medicare 
discharges to allocate wage data by campus until revisions are made to 
Worksheet S-3 of the Medicare cost report to require reporting of FTE 
data by campus, and until such data in the cost report can be used to 
calculate the wage index, at which time the wage data of a multicampus 
hospital will be allocated among its campuses based only on reported 
FTE counts by campus. Once Worksheet S 3 of the Medicare cost report is 
revised to require reporting of FTE data by campus, all multicampus 
hospitals that cross labor market area boundaries will have to provide 
the FTE data by campus on the cost report.
    We agree with the commenter that suggested that hospitals should be 
allowed to report the number of directly assigned staff to each campus, 
and all other employees can be allocated to each campus using the same 
proportions as the directly assigned staff. Once revisions to the cost 
report have been made, we will provide further detailed instructions 
for how to report FTE data by campus.
    Also, until the cost report data can be used to allocate wages and 
hours, multicampus hospitals having campuses that are located in more 
than one labor market are to report their FTEs or Medicare discharge 
data to CMS during the comment period for the respective IPPS update. 
Therefore, for the FY 2009 wage index, such hospitals are to report 
their FTEs or Medicare discharge data during the FY 2009 comment 
period. If a multicampus hospital that crosses labor market areas fails 
to submit FTE or Medicare discharge data, and CMS is aware that the 
hospital meets this criteria, CMS will automatically allocate the 
hospital's wages and hours to its campuses based on Medicare discharge 
data obtained from the intermediary/MAC. Given the consensus among 
commenters that the benefit of having more accuracy in the wage index 
calculations outweighs concerns over which alternative methods to use 
in allocating wage data, we believe that it is a reasonable policy to 
automatically allocate a hospital's wage and hours based on discharge 
data in the absence of FTE data.
    For the FY 2008 wage index, we allocated salaries and hours to the 
campuses of two multicampus hospitals. One Illinois hospital submitted 
FTEs per campus. Two of their three campuses are located in Cook 
County, the Chicago-Naperville-Joliet, IL CBSA, with 60.61 percent of 
their FTEs at one of the campuses and 17.18 percent of the FTEs at the 
other campus. The third campus is located in Lake County, Lake County-
Kenosha County, IL-WI CBSA, and has 22.21 percent of the hospital's 
FTEs.
    As recommended by the second multicampus hospital, which is located 
in Massachusetts, we used Medicare discharge data to allocate salaries 
and hours to its campuses. The hospital also has three campuses with 
two of them located in Bristol County, the Providence-New Bedford-Fall 
River, RI-MA CBSA, and the third campus located in Plymouth County, the 
Boston-Quincy CBSA. The two campuses in Bristol County have 90 percent 
of the Medicare discharges, while the campus in the Boston-Quincy area 
has 10 percent of Medicare discharges.
    Based on the above proportions, we allocated the hospitals' 
salaries and hours to the respective CBSAs of each campus. For wage 
index calculation purposes, we created two new records for each of 
these providers, one record for each CBSA allocation. Although we are 
not including a separate entry for each campus in Table 2, as discussed 
in section III.I.7. of the preamble of this final rule with comment 
period, each campus's wage data will be included in a public use file, 
``Three Year MGCRB Reclassification Data for FY 2009 Application,'' 
that will be posted on the CMS Web site at: http://www.cms.hhs.gov/AcuteInpatientPPS/WIFN/list.asp#TopOfPage, concurrent with the 
publication of this final rule with comment period. As discussed in 
section III.I.7. of the preamble of this final rule with comment 
period, these campus-specific data will be considered appropriate wage 
data for reclassification under Sec. Sec.  412.230. 412.232 and 412.234 
because they will be part of the CMS hospital wage survey used to 
construct the wage index. We consider these data to constitute 
``published hospital wage survey data'' under section 
1886(d)(10)(D)(vi) of the Act. The wage indices for the four affected 
CBSAs were recalculated with the following results:

[[Page 47320]]



                     FY 2008 Final Pre-Reclassification Occupational Mix Adjusted Wage Index
----------------------------------------------------------------------------------------------------------------
                                                                                    Wage index      Wage index
                              CBSA                                 Wage and hour     (without          (with
                                                                   allocation(%)    allocation)     allocation)
----------------------------------------------------------------------------------------------------------------
                                                  Massachusetts
----------------------------------------------------------------------------------------------------------------
Boston-Quincy, MA (14484).......................................            10.0          1.1736          1.1883
Providence-New Bedford-Falls River, RI-MA (39300)...............            90.0          1.0645          1.0567
                                                                 -----------------------------------------------
    Total.......................................................             100  ..............  ..............
----------------------------------------------------------------------------------------------------------------
                                                    Illinois
----------------------------------------------------------------------------------------------------------------
Chicago-Naperville-Naperville, IL (16974).......................            77.8          1.0643          1.0623
Lake County-Kenosha County, IL-WI (29404).......................            22.2          1.0341          1.0618
                                                                 -----------------------------------------------
    Total.......................................................             100  ..............  ..............
----------------------------------------------------------------------------------------------------------------
*The final FY 2008 post-reclassified wage indices are included in Table 4A of the Addendum to this final rule
  with comment period.

G. Computation of the FY 2008 Unadjusted Wage Index

1. Method for Computing the FY 2008 Unadjusted Wage Index
    The method used to compute the FY 2008 wage index without an 
occupational mix adjustment follows:
    Step 1--As noted above, we based the FY 2008 wage index on wage 
data reported on the FY 2004 Medicare cost reports. We gathered data 
from each of the non Federal, short-term, acute care hospitals for 
which data were reported on the Worksheet S-3, Parts II and III of the 
Medicare cost report for the hospital's cost reporting period beginning 
on or after October 1, 2003, and before October 1, 2004. In addition, 
we include data from some hospitals that had cost reporting periods 
beginning before October 2003 and reported a cost reporting period 
covering all of FY 2004. These data are included because no other data 
from these hospitals would be available for the cost reporting period 
described above, and because particular labor market areas might be 
affected due to the omission of these hospitals. However, we generally 
describe these wage data as FY 2004 data. We note that, if a hospital 
had more than one cost reporting period beginning during FY 2004 (for 
example, a hospital had two short cost reporting periods beginning on 
or after October 1, 2003, and before October 1, 2004), we include wage 
data from only one of the cost reporting periods, the longer, in the 
wage index calculation. If there was more than one cost reporting 
period and the periods were equal in length, we include the wage data 
from the later period in the wage index calculation.
    Step 2--Salaries--The method used to compute a hospital's average 
hourly wage excludes certain costs that are not paid under the IPPS. 
(We note that, as we stated in section III.D.2. of this final rule with 
comment period, we are including lines 22.01, 26.01, and 27.01 of 
Worksheet S-3, Part II for overhead services in the wage index 
beginning in FY 2008. However, because these lines were only used for 
purposes of data collection up to this point, and had not been 
incorporated into the wage index or onto line 101 of Worksheet A, the 
electronic cost reporting software had not been modified to incorporate 
these 3 line items, for wages and hours respectively, into line 1 of 
Worksheet S-3, Part II. Therefore, the first step in the wage index 
calculation for FY 2008 is to compute a ``revised'' Line 1, by adding 
to the Line 1 on Worksheet S-3, Part II (for wages and hours 
respectively) the amounts on Lines 22.01, 26.01, and 27.01.) In 
calculating a hospital's average salaries plus wage related costs, we 
subtract from Line 1 (total salaries) the GME and CRNA costs reported 
on Lines 2, 4.01, 6, and 6.01, the Part B salaries reported on Lines 3, 
5 and 5.01, home office salaries reported on Line 7, and exclude 
salaries reported on Lines 8 and 8.01 (that is, direct salaries 
attributable to SNF services, home health services, and other 
subprovider components not subject to the IPPS). We also subtract from 
Line 1 the salaries for which no hours were reported. To determine 
total salaries plus wage related costs, we add to the net hospital 
salaries the costs of contract labor for direct patient care, certain 
top management, pharmacy, laboratory, and nonteaching physician Part A 
services (Lines 9 and 10), home office salaries and wage-related costs 
reported by the hospital on Lines 11 and 12, and nonexcluded area wage-
related costs (Lines 13, 14, and 18).
    We note that contract labor and home office salaries for which no 
corresponding hours are reported are not included. In addition, wage-
related costs for nonteaching physician Part A employees (Line 18) are 
excluded if no corresponding salaries are reported for those employees 
on Line 4.
    Step 3--Hours--With the exception of wage-related costs, for which 
there are no associated hours, we compute total hours using the same 
methods as described for salaries in Step 2.
    Step 4--For each hospital reporting both total overhead salaries 
and total overhead hours greater than zero, we then allocate overhead 
costs to areas of the hospital excluded from the wage index 
calculation. First, we determine the ratio of excluded area hours (sum 
of Lines 8 and 8.01 of Worksheet S-3, Part II) to revised total hours 
(Line 1 minus the sum of Part II, Lines 2, 3, 4.01, 5, 5.01, 6, 6.01, 
7, and Part III, Line 13 of Worksheet S-3). We then compute the amounts 
of overhead salaries and hours to be allocated to excluded areas by 
multiplying the above ratio by the total overhead salaries and hours 
reported on Line 13 of Worksheet S-3, Part III. Next, we compute the 
amounts of overhead wage-related costs to be allocated to excluded 
areas using three steps: (1) we determine the ratio of overhead hours 
(Part III, Line 13 minus the sum of lines 22.01, 26.01, and 27.01) to 
revised hours excluding the sum of lines 22.01, 26.01, and 27.01 (Line 
1 minus the sum of Lines 2, 3, 4.01, 5, 5.01, 6, 6.01, 7, 8, 8.01, 
22.01, 26.01, and 27.01). (We note that for the FY 2008 and subsequent 
wage index calculations, we are excluding the sum of lines 22.01, 
26.01, and 27.01 from the determination of the ratio of overhead hours 
to revised hours, since hospitals typically do not provide fringe 
benefits (wage-related costs) to contract personnel. Therefore, it is 
not necessary for the wage index calculation to exclude overhead wage-
related costs

[[Page 47321]]

for contract personnel. Further, if a hospital does contribute to wage-
related costs for contracted personnel, the instructions for lines 
22.01, 26.01, and 27.01 require that associated wage-related costs be 
combined with wages on the respective contract labor lines.); (2) we 
compute overhead wage-related costs by multiplying the overhead hours 
ratio by wage-related costs reported on Part II, Lines 13, 14, and 18; 
and (3) we multiply the computed overhead wage-related costs by the 
above excluded area hours ratio. Finally, we subtract the computed 
overhead salaries, wage-related costs, and hours associated with 
excluded areas from the total salaries (plus wage-related costs) and 
hours derived in Steps 2 and 3.
    Step 5--For each hospital, we adjust the total salaries plus wage-
related costs to a common period to determine total adjusted salaries 
plus wage-related costs. To make the wage adjustment, we estimate the 
percentage change in the employment cost index (ECI) for compensation 
for each 30-day increment from October 14, 2003, through April 15, 
2005, for private industry hospital workers from the BLS' Compensation 
and Working Conditions. We use the ECI because it reflects the price 
increase associated with total compensation (salaries plus fringes) 
rather than just the increase in salaries. In addition, the ECI 
includes managers as well as other hospital workers. This methodology 
to compute the monthly update factors uses actual quarterly ECI data 
and assures that the update factors match the actual quarterly and 
annual percent changes. We also note that, since April 2006 with the 
publication of March 2006 data, the BLS' ECI uses a different 
classification system, the North American Industrial Classification 
System (NAICS), instead of the Standard Industrial Codes (SICs), which 
no longer exist. We have consistently used the ECI as the data source 
for our wages and salaries and other price proxies in the IPPS market 
basket and are not making any changes to the usage at this time. 
However, in the proposed rule, we solicited comments on our continued 
use of the BLS ECI data in light of the BLS change in system usage to 
the NAICS-based ECI. The factors used to adjust the hospital's data 
were based on the midpoint of the cost reporting period, as indicated 
below.

                    Midpoint of Cost Reporting Period
------------------------------------------------------------------------
                                                            Adjustment
                  After                       Before          factor
------------------------------------------------------------------------
10/14/2003..............................      11/15/2003         1.05743
11/14/2003..............................      12/15/2003         1.05355
12/14/2003..............................      01/15/2004         1.04964
01/14/2004..............................      02/15/2004         1.04578
02/14/2004..............................      03/15/2004         1.04198
03/14/2004..............................      04/15/2004         1.03830
04/14/2004..............................      05/15/2004         1.03482
05/14/2004..............................      06/15/2004         1.03153
06/14/2004..............................      07/15/2004         1.02821
07/14/2004..............................      08/15/2004         1.02466
08/14/2004..............................      09/15/2004         1.02086
09/14/2004..............................      10/15/2004         1.01705
10/14/2004..............................      11/15/2004         1.01344
11/14/2004..............................      12/15/2004         1.01003
12/14/2004..............................      01/15/2005         1.00671
01/14/2005..............................      02/15/2005         1.00336
02/14/2005..............................      03/15/2005         1.00000
03/14/2005..............................      04/15/2005         0.99663
------------------------------------------------------------------------

    For example, the midpoint of a cost reporting period beginning 
January 1, 2004, and ending December 31, 2004, is June 30, 2004. An 
adjustment factor of 1.02821 would be applied to the wages of a 
hospital with such a cost reporting period. In addition, for the data 
for any cost reporting period that began in FY 2004 and covered a 
period of less than 360 days or more than 370 days, we annualize the 
data to reflect a 1-year cost report. Dividing the data by the number 
of days in the cost report and then multiplying the results by 365 
accomplishes annualization.
    Step 6--Each hospital is assigned to its appropriate urban or rural 
labor market area before any reclassifications under section 
1886(d)(8)(B), section 1886(d)(8)(E), or section 1886(d)(10) of the 
Act. Within each urban or rural labor market area, we add the total 
adjusted salaries plus wage-related costs obtained in Step 5 for all 
hospitals in that area to determine the total adjusted salaries plus 
wage-related costs for the labor market area.
    Step 7--We divide the total adjusted salaries plus wage-related 
costs obtained under both methods in Step 6 by the sum of the 
corresponding total hours (from Step 4) for all hospitals in each labor 
market area to determine an average hourly wage for the area.
    Step 8--We add the total adjusted salaries plus wage related costs 
obtained in Step 5 for all hospitals in the Nation and then divide the 
sum by the national sum of total hours from Step 4 to arrive at a 
national average hourly wage. Using the data as described above, the 
national average hourly wage (unadjusted for occupational mix) is 
$30.9346.
    Step 9--For each urban or rural labor market area, we calculate the 
hospital wage index value, unadjusted for occupational mix, by dividing 
the area average hourly wage obtained in Step 7 by the national average 
hourly wage computed in Step 8.
    Step 10--Following the process set forth above, we develop a 
separate Puerto Rico-specific wage index for purposes of adjusting the 
Puerto Rico standardized amounts. (The national Puerto Rico 
standardized amount is adjusted by a wage index calculated for all 
Puerto Rico labor market areas based on the national average hourly 
wage as described above.) We add the total adjusted salaries plus wage 
related costs (as calculated in Step 5) for all hospitals in Puerto 
Rico and divide the sum by the total hours for Puerto Rico (as 
calculated in Step 4) to arrive at an overall average hourly wage 
(unadjusted for occupational mix) of $13.5584 for Puerto Rico. For each 
labor market area in Puerto Rico, we calculate the Puerto Rico-specific 
wage index value by dividing the area average hourly wage (as 
calculated in Step 7) by the overall Puerto Rico average hourly wage.
    Step 11--Section 4410 of Pub. L. 105-33 provides that, for 
discharges on or after October 1, 1997, the area wage index applicable 
to any hospital that is 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 that State. For FY 2008, this change affects 340 hospitals in 
68 urban areas. The areas affected by this provision are identified by 
a footnote in Table 4A in the Addendum of this final rule with comment 
period.
2. Expiration of the Imputed Floor
    Section 4410 of Pub. L. 105-33 provides that the area wage index 
applicable to any hospital that is located in an urban area of a State 
may not be less than the area wage index applicable to hospitals 
located in rural areas of that State (``the rural floor''). There are 
two States that have no rural areas (New Jersey and Rhode Island) and 
one State that has rural areas but no IPPS hospitals located in the 
rural areas of the State (Massachusetts). In the FY 2005 IPPS final 
rule (69 FR 49109), we temporarily adopted an ``imputed'' floor measure 
to address a concern by some individuals that hospitals in all-urban 
States were disadvantaged by the absence of rural areas, because there 
is no floor within the State. We limited application of the policy to 
FYs 2005, 2006, and 2007 and indicated our intent to make additional 
changes to the policy or eliminate it for fiscal years after FY 2007.
    In FY 2008, the rural floor will apply to 340 hospitals in 24 
States. If the imputed rural floor were to continue into FY 2008, it 
would apply to an

[[Page 47322]]

additional 30 hospitals in New Jersey. In FY 2007, 40 hospitals in 10 
urban areas received higher wage indices due to the imputed floor 
policy: Massachusetts (10 hospitals in 2 areas); New Jersey (30 
hospitals in 8 areas); Rhode Island (no areas and no hospitals). In 
Massachusetts, the imputed rural floor will no longer apply because one 
hospital acquired rural status under Sec.  412.103. We note that if a 
State has a hospital reclassified as rural under Sec.  412.103, the 
State will be considered to have IPPS hospitals located in rural areas 
because, in this case, the reclassified hospital is treated as being 
located in a rural area in accordance with section 1886(d)(8)(E) of the 
Act. This policy also accords with how we defined an ``all-urban 
State'' under Sec.  412.64(h)(5) of the regulations, which specifies 
that ``A State with rural areas and with hospitals reclassified as 
rural under Sec.  412.103 is not an all-urban State.'' Therefore, in 
the case where a State has no hospitals that are geographically located 
in its rural areas, and one or more hospitals in the State are 
reclassified as rural under Sec.  412.103, the data for the 
reclassified rural hospitals will be used to set the rural floor for 
the State until a new geographically located rural hospital opens and 
data are available from that hospital (as noted above, 4 years later) 
to compute the rural floor.
    In the FY 2008 IPPS proposed rule, we proposed to discontinue the 
imputed floor policy after the FY 2007 wage index. We stated that after 
further considering the issue, we do not believe that it is necessary 
to have an ``imputed'' rural floor in States that have no rural areas 
or no rural hospitals. As discussed above, the imputed floor would not 
apply to two of the three States: it is not necessary for Rhode Island 
and it is no longer necessary for Massachusetts. In addition, we stated 
that the imputed rural floor methodology creates a disadvantage in the 
application of the wage index to hospitals in States with rural 
hospitals but no urban hospitals receiving the rural floor. Because the 
application of a rural floor requires a transfer of payments from 
hospitals in States with rural hospitals but where the rural floor is 
not applied to hospitals in States where either a rural or imputed 
floor is applied, we stated that we believed the policy should apply 
only when required by statute. Thus, only States with both rural areas 
and hospitals located in such areas (including any hospital 
reclassified under Sec.  412.103) would benefit from the rural floor, 
as required by Congress.
    However, in light of the public comments, we believe it appropriate 
to transition the expiration of the imputed rural floor over a 2-year 
period. We will continue the imputed rural floor for FY 2008, but allow 
it to expire in FY 2009. Thus, beginning in FY 2009, only States with 
both rural areas and hospitals located in such areas (including any 
hospital reclassified under Sec.  412.103) would benefit from the rural 
floor, as required by Congress.
    As in past years, we applied a budget neutrality adjustment to the 
standardized amount to ensure that payments remained constant to 
payments that would have occurred in the absence of the imputed rural 
floor policy.
    Comment: Several commenters in States affected (and potentially 
affected) by the imputed floor policy questioned whether CMS has given 
enough reason to allow the imputed floor provision to expire. They 
mentioned that the imputed floor was created to protect all-urban 
States by offering them a wage index protection similar to that offered 
to other States with a rural floor. The commenters noted that the 
rationale behind creating the imputed floor still exists and that 
hospitals benefiting from the policy were counting on it to continue. 
The commenters added that because CMS has used its broad authority to 
enact other policies absent statutory authority, many of them disagreed 
with CMS' contention that an imputed floor system should be applied 
only if required by statute. The commenters requested that CMS consider 
the severe negative financial impact of its proposed policy on several 
New Jersey hospitals, and requested a rationale to justify the 
estimated 0.2 percent decrease in urban hospital reimbursement rates 
resulting from the expiration of the imputed floor. Other commenters 
explained that about 8 Massachusetts hospitals would experience a 
decrease in Medicare payments of $8 million, or 3.9 percent of their 
Medicare inpatient and outpatient revenue, if CMS no longer imputes a 
rural floor for that State. Some commenters stated that as the number 
of States utilizing the imputed floor decreases, the original rationale 
of protecting States with ``unique circumstances'' holds more true 
today than when originally proposed.
    One commenter supported CMS's proposal to discontinue the imputed 
floor because it agreed that this type of floor should only apply when 
required by statute.
    Response: With respect to the impact on payment for Massachusetts 
hospitals from discontinuing the imputed rural floor, we note that an 
urban hospital applied to be redesignated as rural under 42 CFR Sec.  
412.103. Therefore, as this hospital was approved for an urban-to-rural 
designation, it is now considered to be rural for purposes of its IPPS 
payments. Therefore, its wage index will set the rural floor for 
Massachusetts, and the imputed rural floor would no longer apply in 
Massachusetts. Thus, the payment impact of concern to the commenter 
about hospitals in Massachusetts would occur irrespective of whether we 
continued the imputed rural floor. (We refer readers to the next 
comment/response for more information about this issue.)
    The imputed floor was originally authorized for only 3 years. In 
the FY 2005 IPPS final rule (69 FR 49110), we indicated that during the 
3 years that the policy is in effect, we would determine whether to 
make additional changes to the policy or eliminate it. Given that we 
had indicated in the FY 2005 IPPS final rule that the provision was set 
to expire after 3 years, we believe that hospitals in all urban States 
should not have been relying on the policy to continue. Hospitals in 
these States were given a reasonable expectation that the policy would 
expire after 3 years.
    The intent of the imputed floor was to create a protection for all-
urban States similar to the protection offered to urban-rural mixed 
States by the rural floor. However, about 50 percent of urban-rural 
mixed States do not benefit from the rural floor provision because, in 
those States, the urban wage indices are all above the rural floor. 
Thus, like hospitals in all urban States prior to the creation of the 
imputed rural floor, hospitals in these States do not receive any 
benefit from a rural floor.
    We further note that the imputed rural floor provides a guaranteed 
benefit for certain all-urban States that is not guaranteed to 
hospitals in urban-rural mixed States. Specifically, the imputed rural 
floor methodology creates a mathematical certainty that New Jersey 
hospitals will benefit from the imputed rural floor and Rhode Island 
hospitals will not. The imputed rural floor is based on a comparison of 
the average of the ratios of the lowest-to-highest wage indices of all 
of the all-urban States to the ratio of the lowest-to-highest wage 
index of each of those States individually. For each State, we then 
take the higher of the State-specific ratio and the average of the 
ratios of the all-urban States and multiply it by the highest area wage 
index applicable in the State. The product becomes the imputed floor 
below which no wage

[[Page 47323]]

index in the State could fall. The ratio of the lowest-to-highest wage 
index within each State multiplied by the highest wage index will never 
provide any benefit to hospitals within an individual State. This 
calculation will only set the floor equal to the wage index that is 
already the lowest within the State. The methodology can only have a 
benefit to hospitals within a State if its State-specific ratio of the 
lowest-to-highest wage index is lower than the average of these ratios 
across all of the all-urban States. New Jersey will always have a 
lowest-to-highest wage index ratio of less than 1.0 because it has more 
than one labor market area. Rhode Island has only one labor market area 
so the ratio of its lowest-to-highest wage index will always be 1.0. As 
long as Rhode Island has only one labor market area, New Jersey will 
always have the lower ratio of the lowest-to-highest wage index among 
these two States, and thus New Jersey's ratio of the lowest-to-highest 
wage index will always be lower than the average of these ratios for 
New Jersey and Rhode Island. By contrast, Rhode Island's ratio of the 
lowest-to-highest wage index will always be higher than the average of 
these two States (and all three all-urban States if the imputed rural 
floor were still applicable in Massachusetts) and it can never obtain 
any benefit. Thus, the provision, as currently formulated, provides a 
guaranteed benefit to New Jersey hospitals that is not afforded to 
mixed urban-rural States, and no protection at all for Rhode Island 
hospitals. The imputed floor was never intended to provide an exclusive 
and unending benefit to a single state. Because, in the current system, 
New Jersey would always have hospitals benefiting from the imputed 
floor, and only slightly more than half of all urban-rural mixed States 
have hospitals benefiting from the rural floor, we no longer view the 
imputed floor as being a protective measure.
    However, in light of the public comments, we believe it appropriate 
to transition the expiration of the imputed rural floor over a 2-year 
period. We will continue the imputed rural floor for FY 2008, but 
beginning with the FY 2009 wage index, we will no longer apply an 
imputed floor policy for all-urban States.
    Comment: One commenter questioned whether Massachusetts should 
indeed lose its imputed floor due to a hospital acquiring an urban-to-
rural reclassification under 42 CFR 412.103. The commenter noted that 
the ``hold harmless'' provisions (in section 1886(d)(8)(C) of the Act) 
protect a State's rural floor from being unduly reduced due to the 
effects of reclassification/redesignation. The commenter believed the 
imputed floor should be treated in a similar manner.
    Response: As discussed in section III.I.2. of the preamble of this 
final rule with comment period, we have a policy that precludes an 
urban-to-rural redesignation under Sec.  412.103 from reducing the 
rural wage index. However, when no hospitals are geographically located 
in a rural area, or when no rural hospitals' wage data can be used to 
calculate the rural wage index, there is no rural wage index. 
Therefore, the urban-to-rural redesignation is not reducing the rural 
wage index. Rather, the data of the redesignated hospital establish the 
rural wage index. The imputed floor was intended to be applied in 
states where a rural floor could not be calculated and is rendered moot 
when an urban-to-rural redesignation within a State establishes a 
situation where a rural floor can be calculated. Therefore, we disagree 
with this commenter and are calculating a rural wage index for 
Massachusetts based on the average hourly wage for the one hospital 
that has been redesignated as rural. This rural wage index will become 
the rural floor for Massachusetts hospitals for FY 2008.
    For all of the reasons stated above, we are not continuing the 
imputed rural floor in fiscal years after FY 2008. Nevertheless, we 
recognize that we still need a policy for determining the rural wage 
index when a new IPPS hospital opens in a State that has rural areas, 
but no IPPS hospitals. There is a lag between the time a hospital opens 
or becomes an IPPS provider and when the hospital's cost report wage 
data are available to include in calculating the area wage index. For 
example, if a hospital files its first Medicare cost report as an IPPS 
provider with a beginning date of January 1, 2007, and an ending date 
of December 31, 2007, the hospital's FY 2007 wage data would not be 
included in the wage index until the FY 2011 IPPS update. Therefore, 
when a rural IPPS hospital opens in a State that has rural areas, but 
no wage data are available to calculate a rural wage index, in the FY 
2008 proposed rule, we proposed to apply a wage index to that hospital 
using the same methodology that we currently use for home health and 
other postacute care providers in rural Massachusetts (71 FR 65906). 
That is, we will use the unweighted average of the wage indices from 
all CBSAs that are contiguous to the rural counties of the State. (We 
define contiguous as sharing a border.)
    Comment: One organization commented that CMS should allow data from 
a new hospital that opens in a rural area to be included in the rural 
wage index as soon as a full year's cost report is available for the 
hospital. The commenter stated that it is ``unfair, inconsistent, and 
unnecessary to have to wait 4 years'' for a new hospital's data to be 
included in the rural wage index. However, this commenter and others 
stated that they supported the use of data from contiguous counties to 
establish the rural wage index when a new rural hospital opens and 
there are no data available to calculate the rural wage index.
    Response: We note that we did not receive any comments opposing our 
proposal to use data from contiguous counties to establish the rural 
wage index when a new rural hospital opens and there are no data 
available to calculate the rural wage index.
    The IPPS final rule for FY 2007 provides a detailed response to a 
similar comment explaining why the wage data submission and review 
process occurs over a 4-year time period (71 FR 48016). As we stated, 
the 4-year time period is necessary to allow time for hospitals to 
complete and submit their wage data for the fiscal year, for the fiscal 
intermediaries to present the results of their review to hospitals, for 
hospitals to review any potential errors in the wage index files, for 
us to resolve any disputes between the fiscal intermediary and the 
hospital, and, finally, for the wage indices to be calculated and 
published in advance of the fiscal year. The commenter suggested that 
we use wage data for a new rural hospital that are from a later time 
period than all other hospitals that does not go through this rigorous 
collection, review and correction process. We have two concerns about 
the commenter's suggestion. First, we would be concerned about the 
consistency of using wage data from a new rural hospital that does not 
undergo the same rigorous collection, review and correction process as 
wage data for other hospitals. Second, as the wage index is a relative 
measure of area differences in wage levels, it is imperative that the 
data included in the calculation are from the same time period, 
particularly because wage costs are subject to inflationary effects and 
hospital employment trends fluctuate over time (for example, 
outsourcing is more common now than it was several years ago). 
Therefore, our methodology would be flawed if we used data from very 
different time periods.
    We appreciate the commenters' support of our proposal to use the

[[Page 47324]]

unweighted average of the wage indices from all CBSAs that are 
contiguous to the rural counties of the State to compute the rural wage 
index when a new hospital opens and there are no other data available 
to calculate the rural wage index. Because we received no comments that 
oppose this proposal, we are adopting this policy as final in this 
final rule with comment period. The policy affects no rural areas for 
the FY 2008 wage index.
    We will apply the wage index calculated above until the new IPPS 
hospital files a cost report for the base year that is used in 
calculating the wage index. (In the above example, the rural hospital's 
wage index will be calculated for FYs 2008, 2009, and 2010 using urban 
area data.) Further, under section 4410 of Pub. L. 105-33, the wage 
index for this rural hospital would become the State's rural floor. As 
stated above, however, if a State has rural areas, and a hospital is 
reclassified as rural under Sec.  412.103, then there would be no need 
to apply the above policy. The reclassified hospital would set the 
rural floor, and the wage data of the newly opened rural hospitals 
would be included in the calculation of the wage index of the rural 
area only once their wage data correlated with the survey year used to 
establish the wage index (4 years after wage data are reported).
3. CAHs Reverting Back to IPPS Hospitals and Raising the Rural Floor
    Medicare payments to CAHs are based on 101 percent of reasonable 
costs and are generally greater than the payments Medicare would make 
if the same hospitals were paid under the IPPS, which pays hospitals a 
fixed rate per discharge. Also, as a CAH, a hospital is guaranteed to 
recover its costs, while under the IPPS, it is not. We are aware of a 
situation where two rural hospitals in a State are considering 
converting from CAH status back to IPPS even though they continue to be 
CAH eligible. The CAHs would convert back to IPPS even though it would 
not directly benefit them. As IPPS providers, the hospitals' wage data 
would eventually set the rural floor for the State (that is, in 4 years 
when the hospitals' first IPPS cost reports would be included in a base 
year used in calculating the State's rural wage index). In this case, 
we are concerned that these hospitals are converting solely in order to 
take advantage of the rural floor provisions for the other hospitals in 
the State, but not for any reasons that are intrinsic to the two 
specific hospitals. Because the hospitals' wage levels are higher than 
most, if not all, of the urban IPPS hospitals in the State, including 
one hospital in the State that acquired rural status under Sec.  
412.103, the wage indices for most, if not all, of the State's urban 
hospitals would increase as a result of the rural floor provision if 
the CAHs convert to IPPS status. Such an arrangement would increase 
payments to the hospitals in the State at the expense of every other 
IPPS hospital in the nation. The two rural hospitals that are currently 
CAHs were last paid under the IPPS in FY 2003. We simulated the effect 
of allowing these two hospitals to set the State's rural floor with the 
same data used to calculate the FY 2003 wage index as would occur in FY 
2011 if these hospitals were to convert to IPPS status in FY 2007 and 
no other hospitals were to open in the rural area of the State. Based 
on this simulation, all hospitals except two would be paid using the 
rural floor, increasing payments in excess of $220 million for a single 
year. If the average hourly wage for these two hospitals increased 
faster than the national average, the increase in payments would be 
even higher. It seems likely that over 5 years, Medicare payments to 
hospitals in this State would increase by more than $1 billion. Again, 
these increased payments would be budget neutralized at the expense of 
all other IPPS hospitals nationwide. Given that the hospitals continue 
to be eligible for the higher paying CAH status, we are concerned that 
hospitals are converting to IPPS status solely in order to raise the 
State's rural floor. We are concerned about the propriety of such an 
arrangement if the intent is to manipulate the State's area wage index 
values to receive higher Medicare reimbursement.
    Section 1886(d)(5)(I)(i) of the Act allows the Secretary the 
authority to ``provide by regulation for such other exceptions and 
adjustments * * * as the Secretary deems appropriate.'' In the FY 2008 
IPPS proposed rule, we solicited public comments regarding whether it 
would be appropriate for CMS to establish a policy under this authority 
to preclude the arrangement described above and, if so, how such a 
policy would be applied. We believe that any policy should only apply 
to a CAH that continues to meet the CAH certification requirements and 
should not apply if a CAH no longer met those requirements and 
converted to an IPPS provider.
    Comment: Several commenters shared the concerns of CMS about the 
possibility of intentional gaming of the CAH conversion system in order 
to achieve greater payments through the establishment of a state rural 
floor. The commenters in general were supportive of CMS developing a 
policy to prevent or mitigate the impacts of a situation where a State 
will gain benefits at the expense of all other IPPS hospitals 
nationwide. Some commenters suggested that CMS should consider this 
issue in the broader context of wage index reform planned for the FY 
2009 IPPS proposed rule. Some commenters provided suggestions to assist 
in determining what CAH conversions should or should not be precluded 
based on historical data.
    Other commenters were concerned that CMS may be overreaching its 
authority by granting itself the ability to restrict a hospital's 
ability to choose the type of Medicare provider it wishes to be. The 
commenters were also concerned with CMS attempting to determine the 
intent of hospitals seeking conversion. One commenter added that as 
long as a hospital is essentially the same provider as when it was 
previously an IPPS hospital, CMS should reinstate the provider as an 
IPPS hospital. Another commenter suggested that ``Section 
1886(d)(5)(I)(i) does not provide CMS the authority to adopt a policy 
that precludes qualified CAHs from converting to IPPS'', and even if 
CMS has the authority, the policy would be ``discriminatory and 
constitutes bad public policy.'' Some commenters also suggested that 
CMS was inappropriately ``singling out'' hospitals in one State to 
apply this policy.
    Response: We appreciate the commenters' ideas and contributions to 
this matter for consideration. While we have proposed no policy 
pertaining to this issue at this time, we will consider all of these 
comments as we develop the FY 2009 IPPS proposed rule. One approach 
that we will explore in the context of wage index reform is to apply 
the rural floor budget neutrality adjustment at the State level. Such 
an application would protect hospitals in other States from being 
harmed by potential gaming associated with the rural floor. Thus, in 
the scenario of concern to us, the CAHs would convert to IPPS status 
and set a rural floor that would raise the wage index for most or all 
urban hospitals within the State. However, budget neutrality would be 
achieved by adjusting the wage index for all hospitals within the State 
rather than all hospitals nationwide. Under such a policy, we would no 
longer be concerned about the scenario of CAHs converting to IPPS 
status to raise the rural floor. While the former CAHs that pay high 
wages in this circumstance would continue to set the rural floor, the 
policy would be redistributive within the State rather than across 
States. Under such a policy, we would not have to address the concern 
raised in the

[[Page 47325]]

comments of having to determine the motives of the CAH converting to 
IPPS status because the within State budget neutrality adjustment would 
provide no advantage to the State's hospitals in the aggregate and 
would merely redistribute existing Medicare payments differently within 
the State. The new policy that we intend to explore in next year's IPPS 
rule would also resolve the concern that CMS is ``singling out'' one 
State because we would propose to apply the new policy (that is, 
applying budget neutrality within a State rather than across all 
hospitals nationwide) in any State that benefits from the rural floor.
    Again, we look forward to addressing this issue in next year's IPPS 
proposed rule as we develop a proposal (or proposals) to reform the 
IPPS wage index as required under section 106(b) of the MIEA-TRHCA.
4. Application of Rural Floor Budget Neutrality
    Section 4410 of the Balanced Budget Act of 1997 (BBA) established 
the rural floor by requiring that the wage index for a hospital in any 
urban area cannot be less than the area wage index determined for the 
State's rural area. Since FY 1998, we have implemented the budget 
neutrality requirement of this provision by adjusting the standardized 
amounts. A discussion and illustration of the calculation of the 
standardized amounts is shown in the Addendum of every year's IPPS 
rule. \27\
---------------------------------------------------------------------------

    \27\ The BBA was enacted on August 5, 1997, and required 
application of the rural floor beginning with the FY 1998 IPPS. See 
the following for a description and calculation of the IPPS 
standardized amounts since that time: 62 FR 46038-46043, August 29, 
1997; 63 FR 41006-41010, July 31, 1998; 64 FR 41544-41549, July 30, 
1999; 65 FR 47111-47116, August 1, 2000; 66 FR 39939-39946, August 
1, 2001; 67 FR 50120-50126, August 1, 2002; 68 FR 45474-45480, 
August 1, 2003; 69-FR-49273-49282, August 11, 2004; 70 FR 47491-
47498, August 12, 2005; 71 FR 59889-58980, October 11, 2006.
---------------------------------------------------------------------------

    In the FY 2008 IPPS proposed rule, we proposed a prospective change 
to how budget neutrality is applied to implement the rural floor for FY 
2008 and subsequent years. Section 4410(a) of the BBA indicates that 
``the area wage index applicable * * * to any hospital which is not 
located in a rural area * * * may not be less than the area wage index 
applicable * * * to hospitals located in rural areas in the State in 
which the hospital is located.'' Section 4410(b) of the BBA imposes the 
budget neutrality requirement and states that the Secretary shall 
``adjust the area wage index referred to in subsection (a) for 
hospitals not described in such subsection.''
    One possible interpretation of section 4410(b) of the BBA is that 
the budget neutrality adjustment would be applied only to those 
hospitals that do not receive the rural floor. In other words, the wage 
index of an urban hospital subject to the rural floor would be 
increased to the level of the rural wage index in the same State, but 
would not be adjusted for budget neutrality. Thus, urban hospitals 
receiving the rural floor would receive a higher wage index than the 
rural hospitals within the same State (because rural floor hospitals 
would not be subject to budget neutrality, whereas rural hospitals 
would be). We believe such a reading would not be in accordance with 
Congressional intent, which was to set a floor for urban hospitals, not 
to pay urban hospitals a wage index higher than the wage index 
applicable to rural hospitals.
    In order to avoid the apparent contradiction between raising an 
urban hospital's wage index to the rural floor and not applying budget 
neutrality to its wage index, we also believe the statute could be read 
to allow an iterative calculation of budget neutrality and wage 
indices. Under such iterative calculations (consistent with section 
4410(a) of the BBA), we would raise the wage index for urban hospitals 
to the level of the pre-budget neutrality rural wage index. Consistent 
with section 4410(b) of the BBA, we would adjust the wage index for all 
nonrural floor hospitals to achieve budget neutrality. However, such an 
adjustment would result in an urban hospital that would receive the 
rural floor having a higher wage index than a rural hospital in the 
same State. Therefore, we would then decrease wage indices for the 
rural floor hospitals so they are equal to the adjusted rural wage 
index in the same State. At this point, payments would be less in the 
aggregate than they were prior to applying the rural floor. 
Accordingly, a new budget neutrality adjustment would have to be 
calculated to raise the wage indices and total payments for rural 
hospitals and nonrural floor urban hospitals. The rural wage index 
would now be higher than the wage index for the rural floor hospitals 
in the same State. Therefore, the wage index for rural floor hospitals 
would then be increased again to the level of the State's rural wage 
index, leading to budget neutrality being recalculated again, the wage 
index reduced for rural floor hospitals, and so forth until the wage 
index and the budget neutrality adjustment stabilize.
    We have determined that the iterative method is substantively 
equivalent to simply adjusting all area wage indices by a uniform 
percentage. We have performed the iterative calculation using provider-
level data based on FY 2007 MedPAR data and the first half of FY 2007 
wage index data. Using such data, we determined that the iterative 
method results in the same final wage indices through four decimal 
places that would result if a uniform budget neutrality factor were 
applied to all hospitals' wage indices. Furthermore, an iterative 
method, which requires adjusting only the wage index values of nonrural 
floor providers, reassigning the lowered rural floor value to rural 
floor providers, and reiterating the budget neutrality factor applied 
to the nonrural floor providers would require an excessive number of 
iterations and computer processing, which is not necessary if we simply 
apply a uniform budget neutrality adjustment to all wage index values. 
The latter method is accomplished more quickly, is less complex, and 
arrives at the same final wage index values. Because the IPPS schedule 
is relatively condensed, with a proposed rule issued in April, a 60-day 
comment period until June, and then only 2 months to analyze comments, 
respond to them, determine final policies and calculate final rates 
prior to the August 1 publication, we believe it would not be practical 
to require such multiple layers of calculations, when a uniform 
adjustment would produce substantively identical results. Therefore, we 
proposed to implement the rural floor budget neutrality requirement by 
applying a uniform budget neutrality adjustment to all hospital wage 
indices rather than the more complicated iterative process illustrated 
below.
    The following hypothetical example, which includes a series of nine 
iterations, illustrates how the iterative process works. The example 
assumes three IPPS hospitals in one State. Hospital A is rural and 
Hospitals B and C are urban.

[[Page 47326]]



                                              Pre-Floor Wage Index
----------------------------------------------------------------------------------------------------------------
                                        Hospital A           Hospital B           Hospital C           Total
----------------------------------------------------------------------------------------------------------------
Wage Index.......................  0.9500.............  1.1700.............  0.8600.............  ..............
Relative Weights.................  100................  200................  150................  ..............
Location.........................  Rural..............  Urban..............  Urban..............  ..............
Standardized Amounts.............  $1,000.............  $1,000.............  $1,000.............  ..............
Payments.........................  $95,000............  $234,000...........  $129,000...........       $458,000
----------------------------------------------------------------------------------------------------------------
Note: Hospital C is urban and has a lower wage index than Hospital A which is rural.


                                  Post-Floor Wage Index; Pre-Budget Neutrality
----------------------------------------------------------------------------------------------------------------
                                        Hospital A           Hospital B           Hospital C           Total
----------------------------------------------------------------------------------------------------------------
Wage Index.......................  0.9500.............  1.1700.............  0.9500.............  ..............
Relative Weights.................  100................  200................  150................  ..............
Location.........................  Rural..............  Urban..............  Urban..............  ..............
Standardized Amounts.............  $1,000.............  $1,000.............  $1,000.............  ..............
Payments.........................  $95,000............  $234,000...........  $142,500...........       $471,500
----------------------------------------------------------------------------------------------------------------
Note: Hospital C's wage index is raised to the same level as Hospital A.


                               Post Floor--Budget Neutrality Process--Iteration 1
                         [Step 1: Apply budget neutrality to Hospital A and Hospital B.]
----------------------------------------------------------------------------------------------------------------
                                      Hospital A          Hospital B          Hospital C             Total
----------------------------------------------------------------------------------------------------------------
Wage index......................  0.9110............  1.1220............  0.9500............  BN Factor.
Relative weights................  100...............  200...............  150...............  0.95897.
Location........................  Rural.............  Urban.............  Urban.............  Target.
Standardized amounts............  $1,000............  $1,000............  $1,000............  $458,000.
Payments........................  $91,102...........  $224,398..........  $142,500..........  $458,000.
----------------------------------------------------------------------------------------------------------------


 
                         [Step 2: Reduce Hospital C's wage index to Hospital A's level.]
----------------------------------------------------------------------------------------------------------------
                                      Hospital A          Hospital B          Hospital C             Total
----------------------------------------------------------------------------------------------------------------
Wage index......................  0.9110............  1.1220............  0.9110............  BN Factor.
Relative weights................  100...............  200...............  150...............  0.95897.
Location........................  Rural.............  Urban.............  Urban.............  Target.
Standardized amounts............  $1,000............  $1,000............  $1,000............  $458,000.
Payments........................  $91,102...........  $224,398..........  $136,653..........  $452,153.
----------------------------------------------------------------------------------------------------------------


                                                   Iteration 2
                         [Step 1: Apply budget neutrality to Hospital A and Hospital B.]
----------------------------------------------------------------------------------------------------------------
                                      Hospital A          Hospital B          Hospital C             Total
----------------------------------------------------------------------------------------------------------------
Wage index......................  0.9279............  1.1428............  0.9110............  BN Factor.
Relative weights................  100...............  200...............  150...............  1.01853.
Location........................  Rural.............  Urban.............  Urban.............  Target.
Standardized amounts............  $1,000............  $1,000............  $1,000............  $458,000.
Payments........................  $92,790...........  $228,557..........  $136,653..........  $458,000.
----------------------------------------------------------------------------------------------------------------


 
                        [Step 2: Increase Hospital C's wage index to Hospital A's level.]
----------------------------------------------------------------------------------------------------------------
                                      Hospital A          Hospital B          Hospital C             Total
----------------------------------------------------------------------------------------------------------------
Wage index......................  0.9279............  1.1428............  0.9279............  BN Factor.
Relative weights................  100...............  200...............  150...............  1.01854.
Location........................  Rural.............  Urban.............  Urban.............  Target.
Standardized amounts............  $1,000............  $1,000............  $1,000............  $458,000.
Payments........................  $92,790...........  $228,557..........  $139,185..........  $460,532.
----------------------------------------------------------------------------------------------------------------


[[Page 47327]]


                                                   Iteration 3
                         [Step 1: Apply budget neutrality to Hospital A and Hospital B.]
----------------------------------------------------------------------------------------------------------------
                                      Hospital A          Hospital B          Hospital C             Total
----------------------------------------------------------------------------------------------------------------
Wage index......................  0.9206............  1.1338............  0.9279............  BN Factor.
Relative weights................  100...............  200...............  150...............  0.99212.
Location........................  Rural.............  Urban.............  Urban.............  Target.
Standardized amounts............  $1,000............  $1,000............  $1,000............  $458,000.
Payments........................  $92,059...........  $226,756..........  $139,185..........  $458,000.
----------------------------------------------------------------------------------------------------------------


 
                         [Step 2: Reduce Hospital C's wage index to Hospital A's level.]
----------------------------------------------------------------------------------------------------------------
                                      Hospital A          Hospital B          Hospital C             Total
----------------------------------------------------------------------------------------------------------------
Wage index......................  0.9206............  1.1338............  0.9206............  BN Factor.
Relative weights................  100...............  200...............  150...............  0.99212.
Location........................  Rural.............  Urban.............  Urban.............  Target.
Standardized amounts............  $1,000............  $1,000............  $1,000............  $458,000.
Payments........................  $92,059...........  $226,756..........  $138,088..........  $456,903.
----------------------------------------------------------------------------------------------------------------


                                                   Iteration 4
                         [Step 1: Apply budget neutrality to Hospital A and Hospital B.]
----------------------------------------------------------------------------------------------------------------
                                      Hospital A          Hospital B          Hospital C             Total
----------------------------------------------------------------------------------------------------------------
Wage index......................  0.9238............  1.1377............  0.9206............  BN Factor.
Relative weights................  100...............  200...............  150...............  1.00344.
Location........................  Rural.............  Urban.............  Urban.............  Target.
Standardized amounts............  $1,000............  $1,000............  $1,000............  $458,000.
Payments........................  $92,376...........  $227,536..........  $138,088..........  $458,000.
----------------------------------------------------------------------------------------------------------------


 
                        [Step 2: Increase Hospital C's wage index to Hospital A's level.]
----------------------------------------------------------------------------------------------------------------
                                      Hospital A          Hospital B          Hospital C             Total
----------------------------------------------------------------------------------------------------------------
Wage index......................  0.9238............  1.1377............  0.9238............  BN Factor.
Relative weights................  100...............  200...............  150...............  1.00344.
Location........................  Rural.............  Urban.............  Urban.............  Target.
Standardized amounts............  $1,000............  $1,000............  $1,000............  $458,000.
Payments........................  $92,376...........  $227,536..........  $138,563..........  $458,475.
----------------------------------------------------------------------------------------------------------------


                                                   Iteration 5
                         [Step 1: Apply budget neutrality to Hospital A and Hospital B.]
----------------------------------------------------------------------------------------------------------------
                                      Hospital A          Hospital B          Hospital C             Total
----------------------------------------------------------------------------------------------------------------
Wage index......................  0.9224............  1.1360............  0.9238............  BN Factor.
Relative weights................  100...............  200...............  150...............  0.99852.
Location........................  Rural.............  Urban.............  Urban.............  Target.
Standardized amounts............  $1,000............  $1,000............  $1,000............  $458,000.
Payments........................  $92,238...........  $227,198..........  $138,563..........  $458,000.
----------------------------------------------------------------------------------------------------------------


 
                         [Step 2: Reduce Hospital C's wage index to Hospital A's level.]
----------------------------------------------------------------------------------------------------------------
                                      Hospital A          Hospital B          Hospital C             Total
----------------------------------------------------------------------------------------------------------------
Wage index......................  0.9224............  1.1360............  0.9224............  BN Factor.
Relative weights................  100...............  200...............  150...............  0.99852.
Location........................  Rural.............  Urban.............  Urban.............  Target.
Standardized amounts............  $1,000............  $1,000............  $1,000............  $458,000.
Payments........................  $92,238...........  $227,198..........  $138,358..........  $457,794.
----------------------------------------------------------------------------------------------------------------


[[Page 47328]]


                                                   Iteration 6
                         [Step 1: Apply budget neutrality to Hospital A and Hospital B.]
----------------------------------------------------------------------------------------------------------------
                                      Hospital A          Hospital B          Hospital C             Total
----------------------------------------------------------------------------------------------------------------
Wage index......................  0.9230............  1.1367............  0.9224............  BN Factor.
Relative weights................  100...............  200...............  150...............  1.00064.
Location........................  Rural.............  Urban.............  Urban.............  Target.
Standardized amounts............  $1,000............  $1,000............  $1,000............  $458,000.
Payments........................  $92,298...........  $227,344..........  $138,358..........  $458,000.
----------------------------------------------------------------------------------------------------------------


 
                        [Step 2: Increase Hospital C's wage index to Hospital A's level.]
----------------------------------------------------------------------------------------------------------------
                                      Hospital A          Hospital B          Hospital C             Total
----------------------------------------------------------------------------------------------------------------
Wage index......................  0.9230............  1.1367............  0.9230............  BN Factor.
Relative weights................  100...............  200...............  150...............  1.00064.
Location........................  Rural.............  Urban.............  Urban.............  Target.
Standardized amounts............  $1,000............  $1,000............  $1,000............  $458,000.
Payments........................  $92,298...........  $227,344..........  $138,447..........  $458,089.
----------------------------------------------------------------------------------------------------------------


                                                   Iteration 7
                         [Step 1: Apply budget neutrality to Hospital A and Hospital B.]
----------------------------------------------------------------------------------------------------------------
                                      Hospital A          Hospital B          Hospital C             Total
----------------------------------------------------------------------------------------------------------------
Wage index......................  0.9227............  1.1364............  0.9230............  BN Factor.
Relative weights................  100...............  200...............  150...............  0.99972.
Location........................  Rural.............  Urban.............  Urban.............  Target.
Standardized amounts............  $1,000............  $1,000............  $1,000............  $458,000.
Payments........................  $92,272...........  $227,281..........  $138,447..........  $458,000.
----------------------------------------------------------------------------------------------------------------


 
                         [Step 2: Reduce Hospital C's wage index to Hospital A's level.]
----------------------------------------------------------------------------------------------------------------
                                      Hospital A          Hospital B          Hospital C             Total
----------------------------------------------------------------------------------------------------------------
Wage index......................  0.9227............  1.1364............  0.9227............  BN Factor.
Relative weights................  100...............  200...............  150...............  0.99972.
Location........................  Rural.............  Urban.............  Urban.............  Target.
Standardized amounts............  $1,000............  $1,000............  $1,000............  $458,000.
Payments........................  $92,272...........  $227,281..........  $138,408..........  $457,961.
----------------------------------------------------------------------------------------------------------------


                                                   Iteration 8
                         [Step 1: Apply budget neutrality to Hospital A and Hospital B.]
----------------------------------------------------------------------------------------------------------------
                                      Hospital A          Hospital B          Hospital C             Total
----------------------------------------------------------------------------------------------------------------
Wage index......................  0.9228............  1.1365............  0.9227............  BN Factor.
Relative weights................  100...............  200...............  150...............  1.00012.
Location........................  Rural.............  Urban.............  Urban.............  Target.
Standardized amounts............  $1,000............  $1,000............  $1,000............  $458,000.
Payments........................  $92,283...........  $227,308..........  $138,408..........  $458,000.
----------------------------------------------------------------------------------------------------------------


 
                        [Step 2: Increase Hospital C's wage index to Hospital A's level.]
----------------------------------------------------------------------------------------------------------------
                                      Hospital A          Hospital B          Hospital C             Total
----------------------------------------------------------------------------------------------------------------
Wage index......................  0.9228............  1.1365............  0.9228............  BN Factor.
Relative weights................  100...............  200...............  150...............  1.00012.
Location........................  Rural.............  Urban.............  Urban.............  Target.
Standardized amounts............  $1,000............  $1,000............  $1,000............  $458,000.
Payments........................  $92,283...........  $227,308..........  $138,425..........  $458,016.
----------------------------------------------------------------------------------------------------------------


[[Page 47329]]


                                                   Iteration 9
                         [Step 1: Apply budget neutrality to Hospital A and Hospital B.]
----------------------------------------------------------------------------------------------------------------
                                      Hospital A          Hospital B          Hospital C             Total
----------------------------------------------------------------------------------------------------------------
Wage index......................  0.9228............  1.1365............  0.9228............  BN Factor.
Relative weights................  100...............  200...............  150...............  0.99995.
Location........................  Rural.............  Urban.............  Urban.............  Target.
Standardized amounts............  $1,000............  $1,000............  $1,000............  $458,000.
Payments........................  $92,279...........  $227,297..........  $138,425..........  $458,000.
----------------------------------------------------------------------------------------------------------------

    In the example above, the wage indices are shown only to the 4th 
decimal place even though they are not rounded. However, the actual 
wage indices that we calculate for the IPPS are rounded to 4 decimal 
places. In the 9th and final iteration of the budget neutrality 
adjustment shown above, there was no change to the wage indices through 
the 4th decimal place relative to the 8th iteration. Therefore, because 
the wage indices stopped changing, we could not obtain further 
precision in the budget neutrality and wage index calculations in the 
example shown above with further iterations. We note that the example 
above produces the same result as simply applying a uniform adjustment 
to hospital wage indices. Using the same data as the above hypothetical 
example, we show this result below:

                                              Pre-Floor Wage Index
----------------------------------------------------------------------------------------------------------------
                                        Hospital A           Hospital B           Hospital C           Total
----------------------------------------------------------------------------------------------------------------
Wage Index.......................  0.9500.............  1.1700.............  0.8600.............  ..............
Relative Weights.................  100................  200................  150................  ..............
Location.........................  Rural..............  Urban..............  Urban..............  ..............
Standardized Amounts.............  $1,000.............  $1,000.............  $1,000.............  ..............
Payments.........................  $95,000............  $234,000...........  $129,000...........        $458,000
----------------------------------------------------------------------------------------------------------------
Note: Hospital C is urban and has a lower wage index than Hospital A which is rural.


                                  Post-Floor Wage Index; Pre-Budget Neutrality
----------------------------------------------------------------------------------------------------------------
                                        Hospital A           Hospital B           Hospital C           Total
----------------------------------------------------------------------------------------------------------------
Wage Index.......................  0.9500.............  1.1700.............  0.9500.............  ..............
Relative Weights.................  100................  200................  150................  ..............
Location.........................  Rural..............  Urban..............  Urban..............  ..............
Standardized Amounts.............  $1,000.............  $1,000.............  $1,000.............  ..............
Payments.........................  $95,000............  $234,000...........  $142,500...........        $471,500
----------------------------------------------------------------------------------------------------------------
Note: Hospital C's wage index is raised to the same level as Hospital A.


                                          Post Floor--Budget Neutrality
----------------------------------------------------------------------------------------------------------------
                                      Hospital A          Hospital B          Hospital C             Total
----------------------------------------------------------------------------------------------------------------
Wage Index......................  0.9228............  1.1365............  0.9228............  BN Factor.
Relative Weights................  100...............  200...............  150...............  0.971368.
Location........................  Rural.............  Urban.............  Urban.............  Target.
Standardized Amounts............  $1,000............  $1,000............  $1,000............  $458,000.
Payments........................  $92,280...........  $227,300..........  $138,420..........  $458,000.
----------------------------------------------------------------------------------------------------------------

    We note that, as proposed, our change applies the budget neutrality 
adjustment to the wage index, and not to the standardized amount. In 
previous years, we applied a budget neutrality adjustment to the 
standardized amount to ensure that payments remained constant to 
payments that would have occurred in the absence of the rural floor 
requirement in section 4410 of the BBA. We believe such an adjustment 
is in keeping with the statute, which requires that the rural floor not 
result in aggregate payments that are greater or less than those that 
would have been made in the absence of a rural floor. We believe that 
an adjustment to the wage index would result in a substantially similar 
payment as an adjustment to the standardized amount, as both involve 
multipliers to the standardized amount, and both would be based upon 
the same modeling parameters. We do note that because hospitals have 
different labor-related shares (62 percent for hospitals with wage 
indices less than or equal to 1; 69.7 percent for hospitals with wage 
indices greater than 1), an adjustment to the wage index would have 
slightly different effects from an adjustment to the standardized 
amount, as each wage index would be adjusted by a uniform percentage.
    For FY 2008, we are using FY 2006 discharge data and FY 2008 wage 
indices to simulate IPPS payments without the rural floor. We compare 
these simulated payments to simulated payments using the same data with 
a rural floor.
    We believe that the statute supports either an adjustment to the 
standardized amount or the wage indices because under either 
methodology, the rural floor would not result in aggregate

[[Page 47330]]

payments that were greater or less than those that would have been made 
in the absence of a rural floor.
    Comment: Many commenters requested additional information as to the 
purpose and method CMS is proposing for applying the rural floor budget 
neutrality adjustment to the wage index. Most commenters were 
supportive of CMS' proposal. Other commenters expressed concern that 
CMS acknowledged that because the labor-related share is higher for 
hospitals with a wage index greater than 1.0000, an adjustment to the 
wage index, as opposed to the standardized amount, will treat hospitals 
in an inequitable manner. One commenter did not view it to be 
appropriate to intentionally move from an equitable adjustment system 
to one known to be potentially problematic. Another commenter stated 
that, for past years, the methodology for applying the adjustment was 
flawed because the adjustment was a cumulative adjustment (that is, 
previous year adjustments were not removed before making current year 
adjustments), causing an ``inappropriate duplicating effect'' to be 
``permanently built into the standardized amount.'' Commenters 
requested clarification as to whether the proposed one-time 1.002214 
adjustment is meant to address a single year transition to a new system 
of budget neutrality adjustment, or is meant to reverse effects of 
prior year cumulative adjustments. One commenter requested CMS to more 
clearly explain and fully disclose any known errors in the calculation 
from past years' methodologies, as well as report standardized amount 
adjustment figures from 1999 through 2007. Several commenters suggested 
that besides removing any compounding effect on the standardized amount 
(which some deemed to be ``budget-negative'') for the current year, a 
positive adjustment should also be implemented in FY 2008 to 
retroactively reimburse hospitals. Some commenters claimed that the 
proposed adjustment is not adequate to fix the effects of past data 
errors, nor adequate to reimburse hospitals for past underpayments.
    Response: We appreciate that most commenters supported our proposal 
to apply the rural floor budget neutrality adjustment to the wage index 
rather than the standardized amount. For FY 2008, we will apply budget 
neutrality for application of the rural floor to the wage index rather 
than the standardized amounts.
    With respect to the concern that the budget neutrality adjustment 
will have a greater impact on hospitals with a labor-related share of 
69.7, we believe that this policy is consistent with the intent of 
section 403 of Pub. L. 108-173. Under section 403 of Pub. L. 108-103, 
CMS must use a labor-related share of 62 percent for hospitals with a 
wage index less than or equal to 1, unless application of a labor-
related share of 62 percent would result in lower payments to a 
hospital than would otherwise be made. We believe that Congress 
intended that the wage index adjustment should have less of an impact 
on hospitals with lower wage indexes. Thus, although we could evenly 
distribute the effect of the budget neutrality adjustment across all 
hospitals by applying one budget neutrality factor to the wage indexes 
of hospitals with a labor-related share of 69.7 and a different factor 
to the wage indexes of hospitals with a labor-related share of 62 
percent, we do not believe such an adjustment would be as consistent 
with the intent of Congress.
    Regarding the cumulative nature of the budget neutrality 
adjustment, the rural floor budget neutrality adjustment previously was 
a cumulative adjustment, similar to the adjustments we currently make 
for updates to the wage index and DRG reclassification and 
recalibration. Beginning in FY 2008, the rural floor budget neutrality 
adjustment will be noncumulative. However, we do not believe that our 
prior policy of cumulatively adjusting for rural floor budget 
neutrality was improper. The commenters are correct that the one-time 
1.002214 adjustment is meant to address a single year transition to a 
noncumulative system of budget neutrality adjustment.
    With regard to alleged errors in FYs 1999 through 2007, our 
calculation of budget neutrality in past fiscal years is not within the 
scope of this rulemaking. Even if errors were made in prior fiscal 
years, we would not make an adjustment to make up for those errors when 
setting rates for FY 2008. It is our longstanding policy that finality 
is critical to a prospective payment system. Although errors in 
ratesetting are inevitable, we believe the need to establish final 
prospective rates outweighs the greater accuracy we might gain if we 
retroactively recomputed rates whenever an error is discovered.

H. Analysis and Implementation of the Occupational Mix Adjustment and 
the FY 2008 Occupational Mix Adjusted Wage Index

    As discussed in section III.C. of the preamble of this final rule 
with comment period, for FY 2008, we apply the occupational mix 
adjustment to 100 percent of the FY 2008 wage index. We calculated the 
occupational mix adjustment using data from the 2006 occupational mix 
survey data, using the methodology described in section III.C.3. of the 
preamble of this final rule with comment period.
    Using the first and second quarter occupational mix survey data and 
applying the occupational mix adjustment to 100 percent of the final FY 
2008 wage index results in a national average hourly wage of $30.9133 
and a Puerto-Rico specific average hourly wage of $13.5536. After 
excluding data of hospitals that either submitted aberrant data that 
failed critical edits, or that do not have FY 2004 Worksheet S-3 cost 
report data for use in calculating the FY 2008 wage index, we 
calculated the FY 2008 wage index using the occupational mix survey 
data from 3,367 hospitals. Using the Worksheet S-3 cost report data of 
3,569 hospitals and occupational mix first and/or second quarter survey 
data from 3,367 hospitals represents a 94.3 percent survey response 
rate. The FY 2008 national average hourly wages for each occupational 
mix nursing subcategory as calculated in Step 2 of the occupational mix 
calculation are as follows:

------------------------------------------------------------------------
                                                              5. Average
          4. Occupational mix nursing subcategory            hourly wage
                                                                 ($)
------------------------------------------------------------------------
National RN Management.....................................      38.6202
National RN Staff..........................................      33.4705
National LPN...............................................      19.2209
National Nurse Aides, Orderlies, and Attendants............      13.6938
National Medical Assistants................................      15.7737
National Nurse Category....................................      28.7329
------------------------------------------------------------------------

    The national average hourly wage for the entire nurse category as 
computed in Step 5 of the occupational mix calculation is $28.7329. 
Hospitals with a nurse category average hourly wage (as calculated in 
Step 4) of greater than the national nurse category average hourly wage 
receive an occupational mix adjustment factor (as calculated in Step 6) 
of less than 1.0. Hospitals with a nurse category average hourly wage 
(as calculated in Step 4) of less than the national nurse category 
average hourly wage receive an occupational mix adjustment factor (as 
calculated in Step 6) of greater than 1.0.
    Based on the January through June 2006 occupational mix survey 
data, we determined (in Step 7 of the occupational mix calculation) 
that the national percentage of hospital employees in the Nurse 
category is 42.96 percent, and the national percentage of hospital 
employees in the

[[Page 47331]]

All Other Occupations category is 57.04 percent. At the CBSA level, the 
percentage of hospital employees in the Nurse category ranged from a 
low of 27.26 percent in one CBSA, to a high of 85.30 percent in another 
CBSA.
    We compared the final FY 2007 occupational mix adjusted wage 
indices for each CBSA to the final FY 2008 wage indices adjusted for 
occupational mix. In implementing an occupational mix adjusted wage 
index based on the above calculation using 6 months of survey data for 
FY 2008 as opposed to 3 months of survey data used for FY 2007, the 
final wage index values for 20 rural areas (42.5 percent) and 188 urban 
areas (48.4 percent) will decrease as a result of the adjustment. 
Eleven rural areas (23.4 percent) and 120 urban areas (30.9 percent) 
will experience a decrease of 1 percent or greater in their wage index 
values. The largest negative impacts will be 5.91 percent and 14.85 
percent for a rural and urban area, respectively. In addition, 26 rural 
areas (55.3 percent) and 198 urban areas (51.0 percent) will experience 
an increase in their wage index values. Eleven rural areas (23.4 
percent) and 134 urban areas (34.5 percent) will experience an increase 
of 1 percent or greater in their wage index values. The largest 
increase for a rural area will be 13.28 percent and the largest 
increase for an urban area will be 11.56 percent. One rural area will 
be unaffected. These results indicate that a larger percentage of rural 
areas (55.3 percent) benefit from an occupational mix adjustment than 
do urban areas (51.0 percent), although the difference in these 
percentages is smaller than it has been in past years. Furthermore, 
while approximately one-third of rural CBSAs have experienced a 
decrease in their wage indices as a result of the occupational mix 
adjustment from the time the occupational mix adjustment was first 
implemented in FY 2005 until FY 2007, this percentage has grown to 42.5 
percent for FY 2008.
    The wage index values for FY 2008 (except those for hospitals 
receiving wage index adjustments under section 1886(d)(13) of the Act) 
are shown in Tables 4A, 4B, 4C, and 4F in the Addendum to this final 
rule with comment period.
    Tables 3A and 3B in the Addendum to this final rule with comment 
period list the 3-year average hourly wage for each labor market area 
before the redesignation of hospitals based on FYs 2006, 2007, and 2008 
cost reporting periods. Table 3A lists these data for urban areas and 
Table 3B lists these data for rural areas. In addition, Table 2 in the 
Addendum to this final rule with comment period includes the adjusted 
average hourly wage for each hospital from the FY 2002 and FY 2003 cost 
reporting periods, as well as the FY 2004 period used to calculate the 
FY 2008 wage index. The 3-year averages are calculated by dividing the 
sum of the dollars (adjusted to a common reporting period using the 
method described previously) across all 3 years, by the sum of the 
hours. If a hospital is missing data for any of the previous years, its 
average hourly wage for the 3-year period is calculated based on the 
data available during that period.
    The wage index values in Tables 2, 4A, 4B, 4C, and 4F and the 
average hourly wages in Tables 2, 3A, and 3B in the Addendum to this 
final rule with comment period include the occupational mix adjustment 
as well as the budget neutrality adjustment for the rural floor.

I. Revisions to the Wage Index Based on Hospital Redesignations

1. General
    Under section 1886(d)(10) of the Act, the Medicare Geographic 
Classification Review Board (MGCRB) considers applications by hospitals 
for geographic reclassification for purposes of payment under the IPPS. 
Hospitals must apply to the MGCRB to reclassify by September 1 of the 
year preceding the year during which reclassification is sought. 
Generally, hospitals must be proximate to the labor market area to 
which they are seeking reclassification and must demonstrate 
characteristics similar to hospitals located in that area. The MGCRB 
issues its decisions by the end of February for reclassifications that 
become effective for the following fiscal year (beginning October 1). 
The regulations applicable to reclassifications by the MGCRB are 
located in Sec. Sec.  412.230 through 412.280.
    Section 1886(d)(10)(D)(v) of the Act provides that, beginning with 
FY 2001, a MGCRB decision on a hospital reclassification for purposes 
of the wage index is effective for 3 fiscal years, unless the hospital 
elects to terminate the reclassification. Section 1886(d)(10)(D)(vi) of 
the Act provides that the MGCRB must use the 3 most recent years' 
average hourly wage data in evaluating a hospital's reclassification 
application for FY 2003 and any succeeding fiscal year.
    Section 304(b) of Pub. L. 106-554 provides that the Secretary must 
establish a mechanism under which a statewide entity may apply to have 
all of the geographic areas in the State treated as a single geographic 
area for purposes of computing and applying a single wage index, for 
reclassifications beginning in FY 2003. The implementing regulations 
for this provision are located at Sec.  412.235.
    Section 1886(d)(8)(B) of the Act requires the Secretary to treat a 
hospital located in a rural county adjacent to one or more urban areas 
as being located in the MSA to which the greatest number of workers in 
the county commute, if the rural county would otherwise be considered 
part of an urban area under the standards for designating MSAs and if 
the commuting rates used in determining outlying counties were 
determined on the basis of the aggregate number of resident workers who 
commute to (and, if applicable under the standards, from) the central 
county or counties of all contiguous MSAs. In light of the new CBSA 
definitions and the Census 2000 data that we implemented for FY 2005 
(69 FR 49027), we undertook to identify those counties meeting these 
criteria. The eligible counties are identified under section III.I.8. 
of the preamble of this final rule with comment period.
2. Effects of Reclassification/Redesignation
    Section 1886(d)(8)(C) of the Act provides that the application of 
the wage index to redesignated hospitals is dependent on the 
hypothetical impact that the wage data from these hospitals would have 
on the wage index value for the area to which they have been 
redesignated. These requirements for determining the wage index values 
for redesignated hospitals are applicable both to the hospitals located 
in rural counties deemed urban under section 1886(d)(8)(B) of the Act 
and hospitals that were reclassified as a result of the MGCRB decisions 
under section 1886(d)(10) of the Act. Therefore, as provided in section 
1886(d)(8)(C) of the Act, the wage index values were determined by 
considering the following:
    <bullet> If including the wage data for the redesignated hospitals 
would reduce the wage index value for the area to which the hospitals 
are redesignated by 1 percentage point or less, the area wage index 
value determined exclusive of the wage data for the redesignated 
hospitals applies to the redesignated hospitals.
    <bullet> If including the wage data for the redesignated hospitals 
reduces the wage index value for the area to which the hospitals are 
redesignated by more than 1 percentage point, the area wage index 
determined inclusive of the wage data for the redesignated hospitals 
(the combined wage index value) applies to the redesignated hospitals.
    <bullet> If including the wage data for the redesignated hospitals 
increases the

[[Page 47332]]

wage index value for the urban area to which the hospitals are 
redesignated, both the area and the redesignated hospitals receive the 
combined wage index value. Otherwise, the hospitals located in the 
urban area receive a wage index excluding the wage data of hospitals 
redesignated into the area.
    Rural areas whose wage index values would be reduced by excluding 
the wage data for hospitals that have been redesignated to another area 
continue to have their wage index values calculated as if no 
redesignation had occurred (otherwise, redesignated rural hospitals are 
excluded from the calculation of the rural wage index). The wage index 
value for a redesignated rural hospital cannot be reduced below the 
wage index value for the rural areas of the State in which the hospital 
is located.
    CMS has also adopted the following policies:
    <bullet> The wage data for a reclassified urban hospital is 
included in both the wage index calculation of the area to which the 
hospital is reclassified (subject to the rules described above) and the 
wage index calculation of the urban area where the hospital is 
physically located.
    <bullet> In cases where urban hospitals have reclassified to rural 
areas under 42 CFR 412.103, the urban hospital wage data are: (a) 
included in the rural wage index calculation, unless doing so would 
reduce the rural wage index; and (b) included in the urban area where 
the hospital is physically located.
3. FY 2008 MGCRB Reclassifications
    Under section 1886(d)(10) of the Act, the MGCRB considers 
applications by hospitals for geographic reclassification for purposes 
of payment under the IPPS. The specific procedures and rules that apply 
to the geographic reclassification process are outlined in Sec.  
412.230 through Sec.  412.280.
    At the time this final rule with comment period was constructed, 
the MGCRB had completed its review of FY 2008 reclassification 
requests. There were 365 hospitals approved for wage index 
reclassifications by the MGCRB for FY 2008. Because MGCRB wage index 
reclassifications are effective for 3 years, hospitals reclassified 
during FY 2006 or FY 2007 are eligible to continue to be reclassified 
based on prior reclassifications to current MSAs during FY 2008. There 
were 299 hospitals approved for wage index reclassifications in FY 2006 
and 214 hospitals approved for wage index reclassifications in FY 2007. 
Some of the hospitals that reclassified for FY 2006 and FY 2007 have 
elected not to continue their reclassifications in FY 2008 because, 
under the revised labor market area definitions, they are now 
physically located in the areas to which they previously reclassified. 
Of all of the hospitals approved for reclassification for FY 2006, FY 
2007, and FY 2008, 866 hospitals are in a reclassification status for 
FY 2008.
    Prior to FY 2004, hospitals had been able to apply to be 
reclassified for purposes of either the wage index or the standardized 
amount. Section 401 of Pub. L. 108-173 established that all hospitals 
will be paid on the basis of the large urban standardized amount, 
beginning with FY 2004. Consequently, all hospitals are paid on the 
basis of the same standardized amount, which made such 
reclassifications moot. Although there could still be some benefit in 
terms of payments for some hospitals under the DSH payment adjustment 
for operating IPPS, section 402 of Pub. L. 108-173 equalized DSH 
payment adjustments for rural and urban hospitals, with the exception 
that the rural DSH adjustment is capped at 12 percent (except that 
rural referral centers and, effective for discharges occurring on or 
after October 1, 2006, MDHs have no cap). (A detailed discussion of 
this application appears in section IV.I. of the preamble of the FY 
2005 IPPS final rule (69 FR 49085). The exclusion of MDHs from the 12 
percent DSH cap under Pub. L. 109-171 was discussed under section 
IV.F.4. of the preamble of the FY 2007 IPPS final rule (71 FR 48066).)
    Under Sec.  412.273, hospitals that have been reclassified by the 
MGCRB were permitted to withdraw their applications within 45 days of 
the publication of the proposed rule. The request for withdrawal of an 
application for reclassification or termination of an existing 3-year 
reclassification that would be effective in FY 2008 had to be received 
by the MGCRB within 45 days of the publication of the proposed rule, 
that is, by June 18, 2007. If a hospital elected to withdraw its wage 
index application after the MGCRB had issued its decision, but prior to 
the above date, it could later cancel its withdrawal in a subsequent 
year and request the MGCRB to reinstate its wage index reclassification 
for the remaining fiscal year(s) of the 3-year period (Sec.  
412.273(b)(2)(i)). The request to cancel a prior withdrawal or 
termination had to be in writing to the MGCRB no later than the 
deadline for submitting reclassification applications for the following 
fiscal year (Sec.  412.273(d)). For further information about 
withdrawing, terminating, or canceling a previous withdrawal or 
termination of a 3-year reclassification for wage index purposes, we 
refer the reader to Sec.  412.273, as well as the August 1, 2002, IPPS 
final rule (67 FR 50065) and the August 1, 2001 IPPS final rule (66 FR 
39887).
    Changes to the wage index that result from withdrawals of requests 
for reclassification, wage index corrections, appeals, and the 
Administrator's review process are incorporated into the wage index 
values published in this final rule with comment period. These changes 
affect not only the wage index value for specific geographic areas, but 
also the wage index value redesignated hospitals receive; that is, 
whether they receive the wage index that includes the data for both the 
hospitals already in the area and the redesignated hospitals. Further, 
the wage index value for the area from which the hospitals are 
redesignated may have been affected.
    Applications for FY 2009 reclassifications are due to the MGCRB by 
September 4, 2007 (the first working day of September 2007). We note 
that this is also the deadline for canceling a previous wage index 
reclassification withdrawal or termination under Sec.  412.273(d). 
Applications and other information about MGCRB reclassifications were 
available, beginning in mid July 2007, via the CMS Internet Web site 
at: http://cms.hhs.gov/providers/prrb/mgcinfo.asp, or by calling the 
MGCRB at (410) 786-1174. The mailing address of the MGCRB is: 2520 Lord 
Baltimore Drive, Suite L, Baltimore, MD 21244-2670.
    Comment: Several commenters stated that, although the 
reclassification rules provide some flexibility, there is a problem 
when a hospital qualifies for reclassification to two different areas. 
The commenters stated that, with fluctuations in area wage indices, the 
primary area might not be the higher wage index for each year of the 3-
year reclassification. Thus, the commenter suggested that CMS allow 
hospitals to reclassify to the best eligible location based on the 
proposed post-reclassified wage index published in Tables 4A, 4B, and 
4C in the applicable IPPS proposed rule.
    Response: The Medicare regulations at Sec.  412.230(a)(5)(ii) state 
that ``a hospital may not be redesignated to more than one area.'' 
Although wage index values may fluctuate from year to year, a hospital 
cannot be reclassified to a primary and secondary area at the same time 
in order to choose the higher area wage index value for the current 
year. Instead, we allow hospitals to decide, on a yearly basis, whether 
to withdraw, terminate, reinstate, or fallback to their existing 
reclassification based on the higher of the published

[[Page 47333]]

area wage indices. We believe that the current policy allows hospitals 
enough flexibility to select the wage index that would benefit them the 
most during each fiscal year. Therefore, we are making no changes to 
our policies with regards to this matter.
4. Hospitals That Applied for Reclassification Effective in FY 2008 and 
Reinstating Reclassifications in FY 2008
    Applications for FY 2008 reclassifications were due to the MGCRB by 
September 1, 2006. We note that this deadline also applied for 
canceling a previous wage index reclassification withdrawal or 
termination under Sec.  412.273(d). The MGCRB, in evaluating a 
hospital's request for reclassification for FY 2008 for the wage index, 
utilized the official data used to develop the FY 2007 wage index. The 
wage data used to support the hospital's wage comparisons were from the 
CMS hospital wage survey. Generally, the source for these data is the 
IPPS final rule to be published on or before August 1, 2006. However, 
the wage tables identifying the 3-year average hourly wage of hospitals 
were not available in time to include them in the FY 2007 IPPS final 
rule. Therefore, we made the data available subsequent to the 
publication of the FY 2007 IPPS final rule.
    Section 1886(d)(10)(C)(ii) of the Act indicates that a hospital 
requesting a change in geographic classification for a fiscal year must 
submit its application to the MGCRB not later than the first day of the 
13-month period ending on September 30 of the preceding fiscal year. 
Thus, the statute requires that FY 2008 reclassification applications 
were to be submitted to the MGCRB by no later than September 1, 2006. 
For this reason, we required hospitals to file an FY 2008 
reclassification application by the September 1, 2006 deadline even 
though the average hourly wage data used to develop the final FY 2007 
wage indices were not yet available. However, as outlined in Sec.  
412.256(c)(2), we also allowed hospitals with incomplete applications 
submitted by the deadline to request an extension beyond September 1, 
2006, to complete their applications. We also allowed hospitals 30 days 
from the date the final wage data were posted on the CMS Web site to 
request to cancel a withdrawal or termination in order to reinstate a 
reclassification for FY 2008 or FY 2009, or both fiscal years. For a 
more detailed discussion of the procedures used for the FY 2008 MGCRB 
applications, we refer readers to the FY 2007 IPPS final rule (71 FR 
48022-48023).
    Comment: One commenter requested that CMS provide a special 30-day 
period from the publication date of the FY 2008 IPPS final rule to 
allow hospitals to reinstate or withdraw their reclassification 
requests, as CMS provided in the FYs 2005 and 2007 IPPS final rules. 
The commenter requested this special accommodation due to the 
unexpected change in the wage index calculation (see section III.G. of 
this preamble for the correction to Step 2 of the calculation) and the 
published corrections to the proposed out-migration adjustments (72 FR 
31510).
    Response: We understand the commenter's concern, but we believe 
that no additional time period is needed for hospitals to determine 
whether they should reinstate or withdraw their reclassifications for 
FY 2008 wage index. The FYs 2005 and 2007 IPPS final rules included 
provisions necessary to allow hospitals additional time to analyze the 
wage data and reassess their reclassification decisions with respect to 
significant changes in policies and the wage index that occurred in 
those years. We included a provision in the FY 2005 IPPS final rule 
that established an extra 30-day period after the final rule was 
published to allow hospitals more time to assess their situations with 
regards to the change in the labor market area definitions and the new 
policies for implementing that change. In the FY 2007 IPPS final rule, 
due to changes in the wage index as a result of a court decision 
(Bellevue Hosp. Center v. Leavitt, 443 F.3d 163, 179 (2nd Cir. 2006), 
CMS made reclassification decisions on behalf of hospitals and allowed 
hospitals a 30-day period, after the final wage data were posted on 
CMS's Web site, to reverse a withdrawal or to terminate a 
reclassification.
    In the current situation, regarding the post-publication 
corrections to the proposed FY 2008 out-migration adjustments, CMS 
published these corrections on June 7, 2007. With the 45-day period for 
reclassification withdrawals and terminations ending on June 18, 2007, 
we believe that hospitals had sufficient time to reevaluate their 
reclassifications based on the revised published data. Regarding the 
correction to Step 2 of the wage index calculation, this change 
generally had a minor effect on area average hourly wages and wage 
index values. Although the average hourly wages for some hospitals were 
more significantly impacted, hospitals could have determined their 
correct average hourly wages using the wage data that were posted on 
our Web site and by adding the correction to Step 2 in the calculator 
that was also posted on our Web site. We note that the national and 
state hospital associations and many hospitals commented that they were 
aware of an error in the calculation. Therefore, we do not believe it 
is necessary and will not provide a 30-day period from publication of 
the FY 2008 IPPS final rule to allow hospitals to reinstate or withdraw 
their reclassification requests.
    Comment: One commenter requested clarification on whether the 45-
day period to withdraw reclassification requests runs from the posting 
of the display version of the IPPS proposed rule on the CMS Web site or 
from the date of its publication in the Federal Register.
    Response: We appreciate the commenter's concern. We are clarifying 
in this final rule with comment period that the 45-day period to 
withdraw or terminate reclassification requests begins the day the 
proposed rule is published in the Federal Register.
5. Clarification of Policy on Reinstating Reclassifications
    Under Sec.  412.273(a) of our regulations, a hospital or group of 
hospitals may withdraw its application for reclassification at any time 
before the MGCRB issues its decision or, if after the MGCRB issues its 
decision, within 45 days after publication of CMS's annual notice of 
proposed rulemaking for the upcoming fiscal year. In addition, a 
hospital may terminate a reclassification that is already in effect 
within 45 days after publication of the notice of proposed rulemaking 
for the upcoming fiscal year. Once a withdrawal or termination has been 
made, the hospital or group of hospitals will not be reclassified for 
purposes of the wage index to the same area for that year. The hospital 
also will not be reclassified to the withdrawn or terminated 
reclassification area in subsequent fiscal years unless the hospital 
subsequently cancels its withdrawal or termination. The procedures for 
making a withdrawal or termination, as well as for canceling a 
withdrawal or termination are specified at Sec.  412.273. In the FY 
2003 IPPS final rule (67 FR 50065-50066), we clarified our existing 
policy stating that a previous 3-year reclassification may not be 
reinstated after a subsequent 3-year reclassification to another area 
takes effect. Therefore, a hospital can only have one active 3-year 
reclassification at a time.
    We have been asked whether a hospital (or group of hospitals) can 
reinstate the two remaining years of a previously approved 3-year

[[Page 47334]]

reclassification to one area, while at the same time the individual 
hospital (or group) request a new 3-year reclassification from the 
MGCRB to a different area and be approved for both at the same time. In 
this case, the hospital or group of hospitals is permitted to apply to 
a different area than the previously approved reclassification but, as 
stated in Sec.  412.273(b)(2), once they accept a newly approved 
reclassification, a previously terminated and reinstated 3-year 
reclassification would be permanently terminated.
    Following the policy set forth at Sec.  412.273(d), a hospital may 
cancel a previous withdrawal or termination by submitting written 
notice of its intent to the MGCRB no later than September 1 for 
reclassifications effective at the start of the second following fiscal 
year 13 months later. At the same time (because the deadline for 
geographic reclassification applications for the second following 
fiscal year 13 months later is also September 1), a hospital or group 
of hospitals could apply for reclassification to a different area. If 
the application is denied, the hospital or group of hospitals can 
select between the reinstated geographic reclassification and the home 
area wage index for the following fiscal year. The hospital or group of 
hospitals must file a written request to the MGCRB within 45 days after 
publication of the notice of proposed rulemaking to terminate the 
reinstated reclassification and receive the home area wage index. If 
the hospital or group of hospitals takes no action, the pending 
geographic reclassification will go into effect. If the new geographic 
reclassification application is approved, the hospital or group of 
hospitals will have 45 days from publication of the notice of proposed 
rulemaking to accept either of the two pending geographic 
reclassifications or revert to the home area wage index. If the 
hospital or group of hospitals takes no action, the most recent 
approved geographic reclassification will go into effect and the prior 
reclassification will be permanently terminated. Alternatively, the 
hospital or group of hospitals can withdraw the most recent approved 
reclassification and accept the previously approved and reinstated 
reclassification within 45 days of publication of the notice of 
proposed rulemaking. Such an action will permanently terminate the most 
recently approved geographic reclassification. Finally, the hospital or 
group hospitals can write to the MGCRB within 45 days of publication of 
the notice of proposed rulemaking to withdraw both geographic 
reclassifications in order to receive the home area wage index. In this 
case, the hospital or group of hospitals can only reinstate one of the 
two geographic reclassifications. The other geographic reclassification 
is permanently terminated. Once a hospital or group of hospitals makes 
a decision for the following fiscal year within 45 days of publication 
of the notice of proposed rulemaking, the hospital or group of 
hospitals cannot change the decision for that fiscal year. It is also 
important to note that the reinstatement of a reclassification only 
applies to those withdrawals which were made after the MGCRB issued an 
approved 3-year decision, not a withdrawal made prior to the MGCRB 
issuing an approval decision.
    For example, a hospital has been reclassified to area ``A'' for FYs 
2007 through 2009. The hospital accepts this geographic 
reclassification for FY 2007. The hospital also applies for 
reclassification to a different area ``B'' for FYs 2008 through 2010 by 
September 1, 2006. If reclassification to area ``B'' is denied, the 
hospital can either withdraw or terminate its reclassification to area 
``A'' within 45 days of publication of the proposed rule for FY 2008 
and receive the home area wage index for FY 2008 or receive the 
reclassification to area ``A'' for FY 2008. If the hospital does 
nothing, it will receive the area ``A'' reclassification. If the 
hospital's reclassification application to area ``B'' is approved by 
the MGCRB, the hospital can (1) do nothing (and, therefore, receives 
the reclassification to area ``B'' for FY 2008, permanently terminating 
the reclassification to area ``A''); (2) within 45 days of publication 
of the notice of proposed rulemaking, withdraw the reclassification to 
area ``B'' and receive the reclassification to area ``A'' for FY 2008 
(permanently terminating the reclassification to area ``B''); or (3) 
withdraw or terminate both the reclassifications to both areas ``A'' 
and ``B'' and receive the home area wage index for FY 2008. If the 
latter option is selected, the hospital can only reinstate one of the 
withdrawn/terminated reclassifications by September 1, 2007 (to take 
effect for FY 2009). Upon the sunset of the 45-day window, the 
reclassification selection is final and the hospital will receive that 
wage index for the fiscal year, in this case for FY 2008.
6. ``Fallback'' Reclassifications
    As indicated in section III.I.3. of the preamble of this final rule 
with comment period, the regulations at Sec.  412.273 provide the 
process that a hospital wishing to withdraw or terminate a 
reclassification must follow. If a hospital has an existing 
reclassification and then applies to the MGCRB to a second area and is 
approved, it has a choice between two reclassifications and its home 
area wage index for the following fiscal year. We have been asked a 
procedural question about how the hospital accepts its previously 
approved reclassification (its ``fall back'' reclassification) or how 
it can ``fall back'' to its home area wage index. As the example 
provided in the section III.I.5. of the preamble of this final rule 
with comment period illustrates, a hospital will automatically be given 
its most recently approved reclassification (thereby permanently 
terminating any previously approved reclassifications) unless it 
provides written notice to the MGCRB within 45 days of publication of 
the notice of proposed rulemaking that it wishes to withdraw its most 
recently approved reclassification and ``fall back'' to either its 
prior reclassification or its home area wage index for the following 
fiscal year. If the hospital wishes to accept its home area wage index 
in preference to its previous ``fall back'' reclassification, the 
hospital must also state in its request to the MGCRB that it is not 
only withdrawing its most recently approved reclassification but also 
terminating its previously approved reclassification.
7. Geographic Reclassification Issues for Multicampus Hospitals
    In FY 2005, we modified the reclassification rules at Sec.  
412.230(d)(2)(iii) to allow campuses of multicampus hospitals located 
in separate wage index areas to support a reclassification application 
to the geographic area in which another campus is located using the 
average hourly wage data submitted on the cost report for the entire 
hospital. This special rule applies for applications for 
reclassifications effective in FY 2006 through FY 2008. In the FY 2007 
IPPS final rule, we decided not to extend this special rule for 
multicampus hospitals. However, we believe that the change to how we 
allocate a multicampus hospital's wage data has implications for 
multicampus hospitals' reclassification requests.
    As stated above, we proposed to allocate the multicampus hospital's 
wage data across the different labor market areas where the campuses 
are located based upon FTEs. After consideration of the public comments 
received on the proposed rule, as discussed in section III.F. of the 
preamble of this final rule with

[[Page 47335]]

comment period, we are finalizing the policy that we will use FTEs or 
Medicare discharge data to allocate salaries and hours to the campuses 
of multicampus hospitals that are located in different labor market 
areas (although we note that, as discussed in section III.F. of the 
preamble of this final rule with comment period, once the cost report 
is revised to require reporting of FTE data by campus and such data are 
available for use in calculating the wage index, the wage data of a 
multicampus hospital will be allocated among its campuses based only on 
reported FTEs). For this reason, an individual campus located in a 
geographic area distinct from the geographic area associated with the 
provider number of the multicampus hospital will now have published, 
hospital-specific wage data that it may use to support a request for an 
individual reclassification. The campus' wage data will be included in 
a public use file, titled, ``Three Year MGCRB Reclassification Data for 
FY 2009 Applications'', that will be posted on the Internet at http://www.cms.hhs.gov/AcuteInpatientPPS/WIFN/list.asp#TopOfPage, concurrent 
with the publication of this final rule with comment period. The 
campus-specific data will also be provided to the MGCRB. These data 
will be considered appropriate wage data under Sec.  412.230, because 
they will be part of the CMS hospital wage survey used to construct the 
wage index. Furthermore, we consider these data to constitute 
``published hospital wage survey data'' under section 
1886(d)(10)(D)(vi) of the Act. We received no public comments regarding 
our proposal in the proposed rule. Therefore, we are finalizing the 
policy that a hospital may use this campus-specific data (derived from 
allocating hospital wage data among campuses based on Medicare 
discharges or FTEs) to support a request for reclassification. Thus, 
our policy allowing the allocation of wage data using FTE or Medicare 
discharge data is somewhat different from our prior policy on 
multicampus hospitals because under the policy being finalized in this 
final rule with comment period, an individual campus of a multicampus 
hospital will be considered to have campus-specific data to support an 
individual reclassification request. In addition, we note that when a 
multicampus hospital's wage data are divided by FTEs or Medicare 
discharges, the ratio of wages to hours remains constant. Thus, the 
effect of our policy, in some sense, is that the individual campus of a 
multicampus hospital effectively uses the average hourly wage of the 
entire multicampus institution to support its individual 
reclassification request (see campus-specific average hourly wages in 
Table 2 of the Addendum to this final rule with comment period). 
However, as stated above, an individual campus of a multicampus 
hospital will now be considered to have hospital-specific data to 
support an individual reclassification request. We are revising our 
regulations at Sec.  412.230(d)(2) to reflect this final policy.
    In the FY 2008 IPPS proposed rule, we noted that where a 
multicampus hospital spanning two or more geographic areas does not 
provide us with appropriate FTE data, its campus-specific data would 
not be included in the public use file we use to construct the wage 
index. We stated that, for this reason, unless a multicampus hospital 
has provided us with FTE data, we would not have appropriate campus-
specific wage data that could be used to support an individual 
reclassification under Sec.  412.230, and the reclassification request 
for the individual campus would be denied. However, because we have 
decided to automatically allocate a multicampus hospital's wages and 
hours among its campuses based on discharge data if a hospital fails to 
submit FTE or discharge data to us (as discussed in section III.F. of 
the preamble of this final rule with comment period), a hospital campus 
located in a geographic area distinct from the geographic area 
associated with the provider number of the multicampus hospital will 
now automatically have appropriate campus-specific wage data that could 
be used to support an individual reclassification.
    Under current policy, an individual campus of a multicampus 
hospital located in a different area than the one associated with the 
provider number does not have to provide any official wage index data 
to join a group reclassification. However, given that we are allocating 
a portion of the average hourly wage of the hospital's data to the 
labor market area that includes this campus, we also proposed that this 
same data be used as part of a group reclassification application. We 
are adopting this policy as final in this final rule with comment 
period. Again, these data will be published in a public use file and 
will be considered appropriate wage data under Sec. Sec.  412.232 and 
412.234. We are amending our regulations at Sec.  412.232 and Sec.  
412.234 to reflect this final policy. As we stated above, because we 
have decided to automatically allocate a multicampus hospital's wages 
and hours among its campuses based on discharge data if a hospital 
fails to submit FTE or discharge data to us (as discussed in section 
III.F. of the preamble of this final rule with comment period), a 
hospital campus located in a geographic area distinct from the 
geographic area associated with the provider number of the multicampus 
hospital will now automatically have official wage data to include in a 
group reclassification application.
8. Redesignations of Hospitals Under Section 1886(d)(8)(B) of the Act
    Beginning October 1, 1988, section 1886(d)(8)(B) of the Act 
required us to treat a hospital located in a rural county adjacent to 
one or more urban areas as being located in the MSA if certain criteria 
were met. Prior to FY 2005, the rule was that a rural county adjacent 
to one or more urban areas would be treated as being located in the MSA 
to which the greatest number of workers in the county commute, if the 
rural county would otherwise be considered part of an urban area under 
the standards published in the Federal Register on January 3, 1980 (45 
FR 956) for designating MSAs (and New England County Metropolitan Areas 
(NECMAs)), and if the commuting rates used in determining outlying 
counties (or, for New England, similar recognized areas) were 
determined on the basis of the aggregate number of resident workers who 
commute to (and, if applicable under the standards, from) the central 
county or counties of all contiguous MSAs (or NECMAs). Hospitals that 
met the criteria using the January 3, 1980 version of these OMB 
standards were deemed urban for purposes of the standardized amounts 
and for purposes of assigning the wage data index.
    Effective beginning FY 2005, we use OMB's 2000 CBSA standards and 
the Census 2000 data to identify counties qualifying for redesignation 
under section 1886(d)(8)(B) for the purpose of assigning the wage index 
to the urban area. Hospitals located in these counties have been known 
as ``Lugar'' hospitals and the counties themselves are often referred 
to as ``Lugar'' counties. We provide the chart below with the listing 
of the rural counties designated as urban under section 1886(d)(8)(B) 
of the Act that we are using for FY 2008. For discharges occurring on 
or after October 1, 2007, hospitals located in the rural county in the 
first column of this chart will be redesignated for purposes of using 
the wage index of the urban area listed in the second column.

[[Page 47336]]



 Rural Counties Redesignated as Urban Under Section 1886(d)(8)(B) of the
                Act (Based on CBSAs and Census 2000 Data)
------------------------------------------------------------------------
             Rural county                             CBSA
------------------------------------------------------------------------
Cherokee, AL..........................  Rome, GA.
Macon, AL.............................  Auburn-Opelika, AL.
Talladega, AL.........................  Anniston-Oxford, AL.
Hot Springs, AR.......................  Hot Springs, AR.
Windham, CT...........................  Hartford-West Hartford-East
                                         Hartford, CT.
Bradford, FL..........................  Gainesville, FL.
Hendry, FL............................  West Palm Beach-Boca Raton-
                                         Boynton, FL.
Levy, FL..............................  Gainesville, FL.
Walton, FL............................  Fort Walton Beach-Crestview-
                                         Destin, FL.
Banks, GA.............................  Gainesville, GA.
Chattooga, GA.........................  Chattanooga, TN-GA.
Jackson, GA...........................  Atlanta-Sandy Springs-Marietta,
                                         GA.
Lumpkin, GA...........................  Atlanta-Sandy Springs-Marietta,
                                         GA.
Morgan, GA............................  Atlanta-Sandy Springs-Marietta,
                                         GA.
Peach, GA.............................  Macon, GA.
Polk, GA..............................  Atlanta-Sandy Springs-Marietta,
                                         GA.
Talbot, GA............................  Columbus, GA-AL.
Bingham, ID...........................  Idaho Falls, ID.
Christian, IL.........................  Springfield, IL.
DeWitt, IL............................  Bloomington-Normal, IL.
Iroquois, IL..........................  Kankakee-Bradley, IL.
Logan, IL.............................  Springfield, IL.
Mason, IL.............................  Peoria, IL.
Ogle, IL..............................  Rockford, IL.
Clinton, IN...........................  Lafayette, IN.
Henry, IN.............................  Indianapolis-Carmel, IN.
Spencer, IN...........................  Evansville, IN-KY.
Starke, IN............................  Gary, IN.
Warren, IN............................  Lafayette, IN.
Boone, IA.............................  Ames, IA.
Buchanan, IA..........................  Waterloo-Cedar Falls, IA.
Cedar, IA.............................  Iowa City, IA.
Allen, KY.............................  Bowling Green, KY.
Assumption Parish, LA.................  Baton Rouge, LA.
St. James Parish, LA..................  Baton Rouge, LA.
Allegan, MI...........................  Holland-Grand Haven, MI.
Montcalm, MI..........................  Grand Rapids-Wyoming, MI.
Oceana, MI............................  Muskegon-Norton Shores, MI.
Shiawassee, MI........................  Lansing-East Lansing, MI.
Tuscola, MI...........................  Saginaw-Saginaw Township North,
                                         MI.
Fillmore, MN..........................  Rochester, MN.
Dade, MO..............................  Springfield, MO.
Pearl River, MS.......................  Gulfport-Biloxi, MS.
Caswell, NC...........................  Burlington, NC.
Davidson, NC..........................  Greensboro-High Point, NC.
Granville, NC.........................  Durham, NC.
Harnett, NC...........................  Raleigh-Cary, NC.
Lincoln, NC...........................  Charlotte-Gastonia-Concord, NC-
                                         SC.
Polk, NC..............................  Spartanburg, NC.
Los Alamos, NM........................  Santa Fe, NM.
Lyon, NV..............................  Carson City, NV.
Cayuga, NY............................  Syracuse, NY.
Columbia, NY..........................  Albany-Schenectady-Troy, NY.
Genesee, NY...........................  Rochester, NY.
Greene, NY............................  Albany-Schenectady-Troy, NY.
Schuyler, NY..........................  Ithaca, NY.
Sullivan, NY..........................  Poughkeepsie-Newburgh-
                                         Middletown, NY.
Wyoming, NY...........................  Buffalo-Niagara Falls, NY.
Ashtabula, OH.........................  Cleveland-Elyria-Mentor, OH.
Champaign, OH.........................  Springfield, OH.
Columbiana, OH........................  Youngstown-Warren-Boardman, OH-
                                         PA.
Cotton, OK............................  Lawton, OK.
Linn, OR..............................  Corvallis, OR.
Adams, PA.............................  York-Hanover, PA.
Clinton, PA...........................  Williamsport, PA.
Greene, PA............................  Pittsburgh, PA.
Monroe, PA............................  Allentown-Bethlehem-Easton, PA-
                                         NJ.
Schuylkill, PA........................  Reading, PA.
Susquehanna, PA.......................  Binghamton, NY.
Clarendon, SC.........................  Sumter, SC.
Lee, SC...............................  Sumter, SC.
Oconee, SC............................  Greenville, SC.
Union, SC.............................  Spartanburg, SC.
Meigs, TN.............................  Cleveland, TN.
Bosque, TX............................  Waco, TX.
Falls, TX.............................  Waco, TX.
Fannin, TX............................  Dallas-Plano-Irving, TX.
Grimes, TX............................  College Station-Bryan, TX.
Harrison, TX..........................  Longview, TX.
Henderson, TX.........................  Dallas-Plano-Irving, TX.
Milam, TX.............................  Austin-Round Rock, TX.
Van Zandt, TX.........................  Dallas-Plano-Irving, TX.
Willacy, TX...........................  Brownsville-Harlingen, TX.
Buckingham, VA........................  Charlottesville, VA.
Floyd, VA.............................  Blacksburg-Christiansburg-
                                         Radford, VA.
Middlesex, VA.........................  Virginia Beach-Norfolk-Newport
                                         News, VA.
Page, VA..............................  Harrisonburg, VA.
Shenandoah, VA........................  Winchester, VA-WV.
Island, WA............................  Seattle-Bellevue-Everett, WA.
Mason, WA.............................  Olympia, WA.
Wahkiakum, WA.........................  Longview, WA.
Jackson, WV...........................  Charleston, WV.
Roane, WV.............................  Charleston, WV.
Green, WI.............................  Madison, WI.
Green Lake, WI........................  Fond du Lac, WI.
Jefferson, WI.........................  Milwaukee-Waukesha-West Allis,
                                         WI.
Walworth, WI..........................  Milwaukee-Waukesha-West Allis,
                                         WI.
------------------------------------------------------------------------

    As in the past, hospitals redesignated under section 1886(d)(8)(B) 
of the Act are also eligible to be reclassified to a different area by 
the MGCRB. Affected hospitals are permitted to compare the reclassified 
wage index for the labor market area in Table 4C in the Addendum to 
this final rule with comment period into which they have been 
reclassified by the MGCRB to the wage index for the area to which they 
are redesignated under section 1886(d)(8)(B) of the Act. Hospitals 
could withdraw from an MCGRB reclassification within 45 days of the 
publication of the proposed rule.
    Comment: One hospital commented that its county should have been 
listed as a Lugar county in the proposed rule and inquired about their 
absence on the Lugar county list. The commenter stated it had used 2002 
and 2003 Census data to calculate the commuting exchange between 
counties.
    Response: Section 1886(d)(8)(B) of the Act requires the Secretary 
of Health and Human Services to determine Lugar counties using the 
standards published in the Federal Register by the Director of the 
Office of Management and Budget based on the most recent decennial 
census. The most recent decennial census was completed in 2000. The law 
does not permit us to use 2003 Census data to determine the Lugar 
status for FY 2008. Davidson County must qualify for Lugar status based 
on 2000 Census data. We reviewed the 2000 Census data and determined 
that Davidson County, NC does meet the criteria to be a Lugar county. 
Therefore, in this final rule with comment period, we added Davidson 
County, NC to the above list of rural counties that are redesignated as 
urban for FY 2008 under section 1886(d)(8)(B) of the Act. Thus, for FY 
2008, the hospitals in Davidson County, NC will receive the wage index 
for hospitals that are reclassified to Greensboro-High Point, NC in 
Table 4C of the Addendum to this final rule with comment period.
9. Reclassifications Under Section 1886(d)(8)(B) of the Act
    We have been asked whether Lugar hospitals and counties (discussed 
above in section III.H.8. of the preamble of this final rule with 
comment period) are considered urban or rural for MGCRB 
reclassification purposes. As stated in the regulations at 42 CFR 
412.64(b)(3), as well as in section 1886(d)(8)(B) of the Act, Lugar 
hospitals are deemed to be located in an urban area. Therefore, because 
they are physically located in a rural area and are deemed urban, they 
receive the reclassified wage index (Table 4C in the Addendum to this 
final rule with comment period) for the urban area to which they have 
been redesignated. Because Lugar hospitals are treated like 
reclassified hospitals, when they are seeking reclassification by the 
MCGRB, they are subject to the rural reclassification rules set forth 
at

[[Page 47337]]

Sec.  412.230. The procedural rules set forth at Sec.  412.230 list the 
criteria which a hospital must meet in order to reclassify as a rural 
hospital. Lugar hospitals will be subject to the proximity criteria and 
payment thresholds that apply to rural hospitals. Specifically, the 
hospital will have to be no more than 35 miles from the area to which 
it seeks reclassification (Sec.  412.230(b)(1)); the hospital will have 
to show that its average hourly wage is at least 106 percent of the 
average hourly wage of all other hospitals in the area in which the 
hospital is located (Sec.  412.230(d)(1)(iii)(C)); and the hospital 
will have to demonstrate that its average hourly wage is equal to at 
least 82 percent of the average hourly wage of hospitals in the area to 
which it seeks redesignation (Sec.  412.230(d)(1)(iv)(C)).
    Hospitals not located in a Lugar county seeking reclassification to 
the urban area where the Lugar hospitals have been redesignated are not 
permitted to measure to the Lugar county to demonstrate proximity (no 
more than 15 miles for an urban hospital, and no more than 35 miles for 
a rural hospital or the closest urban or rural area for RRCs or SCHs) 
in order to be reclassified to such urban area. These hospitals must 
measure to the urban area exclusive of the Lugar County to meet the 
proximity or nearest urban or rural area requirement.
10. New England Deemed Counties
    Our regulations at 42 CFR 412.64(b)(1)(ii)(B) list New England 
counties that are deemed to be parts of urban areas under section 
601(g) of the Social Security Amendments of 1983 (Pub. L. 98-21, 42 
U.S.C. 1395ww(note)). These counties include Litchfield County, 
Connecticut; York County, Maine; Sagadahoc County, Maine; Merrimack 
County, New Hampshire; and Newport County, Rhode Island. OMB standards 
designate and define two categories of CBSAs: Metropolitan Statistical 
Areas (MSAs) and Micropolitan Statistical Areas (65 FR 82235). For our 
labor market area definitions, we treat micropolitan areas as rural.
    Of these five counties, three (York County, Sagadahoc County, and 
Newport County) are also included in metropolitan areas by OMB, whereas 
the remaining two, Litchfield County and Merrimack County, are located 
in micropolitan statistical areas and would be treated as rural under 
our labor market area definitions were they not deemed urban under 
Sec.  412.64(b)(1)(ii)(B) of the regulations. Litchfield County and 
Merrimack County have been listed as being part of urban CBSA 25540 
Hartford-West Hartford East Hartford, CT, and urban CBSA 31700 
Manchester-Nashua, NH, respectively. Even though hospitals located in 
Litchfield County and Merrimack County are in micropolitan statistical 
areas, they have been treated as urban for reclassification purposes. 
Under our regulations, we have deemed both of these two New England 
counties and the hospitals within them as urban. Because the counties 
themselves were deemed urban, the hospitals within them have also been 
treated as urban for reclassification purposes, even though Litchfield 
and Merrimack counties are in micropolitan statistical areas. However, 
upon further consideration of this issue, we believe the hospitals 
located within these New England counties should be treated the same as 
Lugar hospitals. That is, the area would be considered rural but the 
hospitals within them would be deemed to be urban.
    Comment: Many commenters opposed the proposed change to treat the 
two New England deemed counties (Litchfield, CT and Merrimack, NH) as 
rural. The commenters stated that the statute requires continuing the 
1979 urban classifications of these New England hospitals in 
determining if a hospital is in an urban or rural area for purposes of 
section 1886(d) of the Act. Most of the commenters believed the change 
is not warranted and is contrary to the meaning of the statute. 
However, some commenters stated that they would be willing to accept 
the policy change if their published proposed statewide rural wage 
index does not change in the final rule as a result of this policy 
change.
    Response: We appreciate the commenters' concerns regarding our 
proposed policy. We believe that our proposed policy change is 
consistent with section 601(g) of Pub. L. 98-21, which requires certain 
hospitals located in New England to be classified as being located in 
an urban area. The statute does not require that the counties in which 
these hospitals are located be deemed urban. Furthermore, the proposed 
change to how New England deemed counties are to be treated in the wage 
index calculation was not designed to reduce the statewide rural floor. 
Rather, it was to promote consistency within the regulations with 
regard to how we treat rural hospitals that are redesignated to urban 
areas for purposes of the wage index. That is, we found that there is 
no practical difference between the purpose of the ``Lugar'' and deemed 
urban counties provisions of the statute with regard to the IPPS. Both 
provisions treat hospitals that are geographically rural as urban for 
the purposes of section 1886(d) of the Act. For this reason, we believe 
that Medicare should have a consistent policy between these two types 
of rural counties with respect to how the hospitals located in such 
counties are treated for geographic reclassification purposes and for 
purposes of calculating pre- and post-reclassified wage indices.
    We note that section 1886(d)(8)(C) of the Act protects rural area 
IPPS wage indices from reductions that will occur due to the effects of 
reclassifications. That is, a rural area IPPS wage index can not 
decrease as a result of hospitals reclassifying in or out of the area. 
Therefore, the rural IPPS wage index will not change as a result of 
this policy change. However, we cannot ensure that the IPPS wage index 
that is published in the proposed rule will not change in the final 
rule. The wage index correction process is not finalized each year 
until after the proposed rule is published. During the correction 
process, a hospital's wage index data can change and cause the area 
wage index to fluctuate up or down. Therefore, any change to the area 
or national average hourly wage as a result of the wage data correction 
process may cause a change between the proposed and final rule in an 
area wage index. If any change occurred between the proposed and final 
rule in the wage index for rural Connecticut or New Hampshire, it 
happened as a result of corrections to the wage data and not this 
policy.
    After consideration of the public comments received, we are 
adopting as final, without modification, the proposed policy to treat 
New England deemed counties that are still considered rural by OMB as 
rural under IPPS, and the hospitals within them as being reclassified 
to their deemed urban area and subject to the rural reclassification 
rules. As we proposed, we are changing our policy and considering 
Litchfield County and Merrimack County as rural but will continue to 
consider the hospitals within them as being redesignated to urban CBSA 
25540 Hartford-West Hartford-East Hartford, CT, and urban CBSA 31700 
Manchester-Nashua, NH, respectively. Under our policy, hospitals 
located in these counties--like the Lugar hospitals described in 
section III.I.8. of the preamble of this final rule with comment 
period--must meet the rural requirements set forth at Sec.  412.230 for 
individual reclassifications and Sec.  412.232 for group 
reclassifications. We are revising Sec.  412.64(b)(1)(ii)(B) 
accordingly. Hospitals not located inside one of these deemed New

[[Page 47338]]

England counties are not permitted to measure to these counties to 
demonstrate close proximity in order to be reclassified to the CBSA(s) 
to which the hospitals in Litchfield and Merrimack counties are 
redesignated. Due to policies in place that protect the rural wage 
index from decreasing as a result of hospital reclassifications, the 
proposed policy would have no effect on the rural wage index for IPPS 
hospitals. However, non-IPPS payment systems (SNF, IRF, and HHA, among 
others) that use the pre-reclassified wage index may be affected by 
this policy change. However, we are limiting this policy change for 
deemed New England counties only to IPPS hospitals because it was only 
discussed in the FY 2008 IPPS proposed rule. Any change to non-IPPS 
provider wage indices would be addressed in the respective payment 
rules for those payment systems.
11. Reclassifications under Section 508 of Pub. L. 108-173
    Under section 508 of Pub. L. 108-173, a qualifying hospital could 
appeal the wage index classification otherwise applicable to the 
hospital and apply for reclassification to another area of the State in 
which the hospital is located (or, at the discretion of the Secretary, 
to an area within a contiguous State). We implemented this process 
through notices published in the Federal Register on January 6, 2004 
(69 FR 661), and February 13, 2004 (69 FR 7340). Such reclassifications 
were applicable to discharges occurring during the 3-year period 
beginning April 1, 2004, and ending March 31, 2007. Section 106(a) of 
the MIEA-TRHCA (Pub. L. 109-432), extended any geographic 
reclassifications of hospitals that were made under section 508 and 
that would expire on March 31, 2007, by 6 months until September 30, 
2007. On March 23, 2007, we published a notice in the Federal Register 
(72 FR 13799) that indicated how we are implementing section 106(a) of 
the MIEA-TRHCA through September 30, 2007. Because the section 508 
provision will expire on September 30, 2007, and will not be applicable 
in FY 2008, in this final rule with comment period, we are not making 
any changes related to the provision.
    Comment: A number of commenters expressed support for the 
reclassification opportunities provided by provisions in section 508 of 
Pub. L. 108-173 (MMA). The commenters highlighted the necessity to 
preserve these provisions to allow certain hospitals to continue to 
compete for labor in markets they would not be able to reclassify to 
under prior reclassification standards.
    Response: Provisions in section 508 of Pub. L. 108-173 allocated a 
capped amount of funding to allow some hospitals that otherwise would 
not qualify to do so to seek a form of geographic reclassification. The 
section 508 provisions were mandated by Congressional action and were 
originally set to expire on March 31, 2007. However, section 106(a) of 
the MIEA-TRHCA extended any geographic reclassifications that were set 
to expire on March 31, 2007, by 6 months, through September 30, 2007. 
Further extension of section 508 would require a change in the Medicare 
statute.
    Comment: One commenter addressed the use of our special exceptions 
and adjustment authority under section 1886(d)(5)(I)(i) in the FY 2007 
IPPS final rule to grant a hospital a reclassified wage index for FY 
2008 (we refer readers to 71 FR 48070 for more information). The 
commenter stated that a special exception was granted to this hospital 
because it was not reclassified under section 508 of Pub. L. 108-173, 
although multiple hospitals in neighboring areas were so reclassified. 
(In FY 2007, the Secretary invoked the special exceptions and 
adjustments authority to allow this hospital to receive the same 
reclassified wage index as the neighboring hospitals on the grounds 
that the reclassifications of neighboring hospitals under section 508 
of Pub. L. 108-173, in combination with other factors, created unique 
circumstances making such an exception appropriate in this situation.) 
The commenter believed that, while this special exception allowed the 
hospital to increase employee salaries, another one-year extension is 
necessary to allow the hospital to further overcome competitive 
disadvantages. The commenter added that, prior to the Secretary's 
action, neighboring hospitals had a period of 2\1/2\ years of enhanced 
wage indices due to section 508 provisions. Because the hospital has 
limited ability under current rules to seek a higher wage index 
reclassification, the commenter stated that further action is needed to 
allow the hospital to compete with its peers.
    Response: In the FY 2007 final rule, CMS cited the unique 
circumstances surrounding the section 508 reclassifications in granting 
the adjustment to this hospital. We stated that it was appropriate to 
give the hospital in the single hospital urban area the same wage index 
as the nearby section 508 hospitals until the expiration of the 
provision on March 31, 2007. As the MIEA-TRHCA extended any geographic 
reclassifications that were set to expire on March 31, 2007, by 6 
months, through September 30, 2007, we also extended the special 
exception and gave this hospital the same wage index as the neighboring 
section 508 hospitals through the end of FY 2007. By law, the section 
508 reclassifications will expire on September 30, 2007. Therefore, the 
basis for providing this hospital with a special wage index will end 
with the expiration of section 508 on September 30, 2007.
12. Other Issues
    We have been advised of a reclassification scenario of concern to a 
particular hospital. In this scenario, two hospitals were approved by 
the Medicare Geographic Classification Review Board (MGCRB) for a 3-
year group reclassification. Prior to the second year of the 3-year 
reclassification, one of the hospitals reclassified individually to 
another area. Consistent with our policy, the second hospital retained 
its group geographic reclassification for the two remaining years (66 
FR 39888, August 1, 2001). However, once the group reclassification 
expires, the second hospital does not qualify to reclassify 
individually to another area. We have been asked to consider potential 
regulatory options that would allow this hospital to either reclassify 
or receive a declining blend of its home area and reclassified wage 
index as a transition to its post-reclassified wage index.
    In the proposed rule, we indicated that there are no options under 
our current regulations that would allow this hospital to reclassify 
individually or as a group. The hospital does not meet the well 
established wage data comparison criteria to reclassify as an 
individual hospital. In order for a group reclassification to be 
approved, all hospitals in the county must apply as a group. We have 
been informed that one hospital will not join the group 
reclassification because it qualifies individually to reclassify to a 
different area with a higher wage index than where the group applied.
    We considered whether to change our regulations for this type of 
situation. However, we decided not to propose a change to our 
regulations, given the need to gather additional information and better 
understand the policy issues in such a case. In this regard, we 
solicited public comments on whether such a situation is consistent 
with the purpose of reclassification. In particular, we requested 
comments on how a hospital that is applying to reclassify would 
demonstrate similarity to

[[Page 47339]]

hospitals in the neighboring area when the hospital would qualify to be 
part of a group reclassification if all other hospitals in the county 
in which the hospital is located agreed to apply.
    In addition, we requested comments on how we could make a 
determination that a hospital's own area wage index is inappropriate 
when the hospital does not meet the current criteria for 
reclassification on its own, but would meet the criteria for a group 
reclassification in the event all hospitals in the county in which the 
hospital is located would agree to submit a group application. Finally, 
given that reclassifications are in effect for three years, we 
requested comments on whether or how we could address this situation 
while simultaneously maintaining the distinction between group and 
individual reclassifications--particularly the rule that all members of 
a group must apply for a group reclassification.
    For all the above reasons, we decided, as noted, not to propose 
changes to the regulations to address the situation brought to our 
attention. Rather, we believe it is appropriate to gather additional 
information and seek comment on this or similar situations. We 
indicated that if commenters wished to raise issues with the points 
described in this section or comment on other issues we did not 
consider in the questions raised above, we welcomed such public 
comments.
    Comment: One commenter requested that CMS exercise caution when 
expanding reclassification options or adding exceptions to the current 
wage index process. The commenter suggested that CMS collect additional 
information on similar situations and should consider the matter when 
considering global wage index reform for FY 2009.
    Response: We appreciate the commenter's suggestions. At this time, 
CMS has made no policy proposal to address this particular issue. As 
indicated above, section 106(b)(2) of Pub. L. 109-432 instructs the 
Secretary of Health and Human Services, taking into account MedPAC's 
recommendations on the Medicare wage index classification system, to 
include in the FY 2009 IPPS proposed rule one or more proposals to 
revise the wage index adjustment applied under section 1886(d)(3)(E) of 
the Act for purposes of the IPPS. The proposal (or proposals) must 
consider a variety of issues including ``the modification or 
elimination of geographic reclassifications and other adjustments.'' We 
will consider this issue and many others as part of our comprehensive 
review of the wage index and geographic reclassification for FY 2009.
    Under section 1886(d)(10)(C)(iii) of the Act, the MGCRB's decision 
may be appealed to the Secretary and the ``decision of the Secretary 
shall be final and shall not be subject to judicial review.'' Under 
Sec.  412.276(b) of our regulations, the decision of the MGCRB is final 
and binding on the parties unless it is reviewed by the Administrator 
and the decision is changed by the Administrator based on the 
hospital's appeal or the Administrator's discretionary review of the 
decision. Under the statute and regulations, the Administrator's review 
must take place within certain timeframes. After those timeframes have 
expired, the decision is final.
    We are concerned about the role that an error in the average hourly 
wage might have had on a reclassification decision by the MGCRB. We 
seek comment on the appropriateness of prospectively addressing 
situations where there is an error made in a hospital's average hourly 
wage that is later used for a geographic reclassification application. 
For example, if we became aware or were made aware through subsequent 
public input that an error existed in the average hourly wage of a 
hospital that can be used in a geographic reclassification application 
prior to it being awarded, we might republish the wage data from the 
IPPS final rule. If significant, we might also consider prospective 
adjustments to the 3-year average hourly wage for future 
reclassifications if some or all of those 3 years span the time period 
that the hospital was reclassified based on erroneous data. We welcome 
ideas from the public on this and other suggestions for addressing this 
issue.

J. FY 2008 Wage Index Adjustment Based on Commuting Patterns of 
Hospital Employees

    In accordance with the broad discretion under section 1886(d)(13) 
of the Act, as added by section 505 of Pub. L. 108-173, beginning with 
FY 2005, we established a process to make adjustments to the hospital 
wage index based on commuting patterns of hospital employees. The 
process, outlined in the FY 2005 IPPS final rule (69 FR 49061), 
provides for an increase in the wage index for hospitals located in 
certain counties that have a relatively high percentage of hospital 
employees who reside in the county but work in a different county (or 
counties) with a higher wage index. Such adjustments to the wage index 
are effective for 3 years, unless a hospital requests to waive the 
application of the adjustment. A county will not lose its status as a 
qualifying county due to wage index changes during the 3-year period, 
and counties will receive the same wage index increase for those 3 
years. However, a county that qualifies in any given year may no longer 
qualify after the 3-year period, or it may qualify but receive a 
different adjustment to the wage index level. Hospitals that receive 
this adjustment to their wage index are not eligible for 
reclassification under section 1886(d)(8) or section 1886(d)(10) of the 
Act. Adjustments under this provision are not subject to the budget 
neutrality requirements under section 1886(d)(3)(E) of the Act.
    Hospitals located in counties that qualify for the wage index 
adjustment are to receive an increase in the wage index that is equal 
to the average of the differences between the wage indices of the labor 
market area(s) with higher wage indices and the wage index of the 
resident county, weighted by the overall percentage of hospital workers 
residing in the qualifying county who are employed in any labor market 
area with a higher wage index. To date, we have used pre-reclassified 
wage indices when determining the out-migration adjustment. In the FY 
2005 IPPS final rule (69 FR 49061 through 49063), we stated that it was 
reasonable to interpret the term ``wage index'' in section 
1886(d)(13)(D) of the Act to mean the pre-reclassified, pre-adjusted 
wage index. At the time, we stated that it was unclear whether to use 
the pre- or post-reclassified wage index as the basis for comparison to 
determine the out-migration adjustment. We also cited complicating 
factors such as the use of blended wage indices as a result of the 
labor market area transition as another reason to base the out-
migration adjustment on the pre-reclassified wage index. However, we 
indicated that we will continue to examine the possibility of employing 
post-reclassification wage indices as we refine our policy for future 
adjustments.
    We have reconsidered our policy in this final rule with comment 
period and as proposed, we are calculating the out-migration adjustment 
using the post-reclassified wage index. First, the labor-market area 
transition has ended and the use of blended wage indices is no longer a 
complicating factor in determining whether to use pre- or post-
reclassified wage indices to determine the out-migration adjustment. 
Second, we are applying budget neutrality for application of the rural 
floor to area wage indices rather than to the standardized amount 
beginning in FY 2008. The budget neutrality adjustment

[[Page 47340]]

for the rural floor is being applied to the post-reclassification wage 
indices and is a component of the wage index that is being used to 
adjust for area differences in wages. Therefore, we believe the out-
migration adjustment should be determined using the post-reclassified 
wage index that reflects the budget neutrality adjustment for 
application of the rural floor.
    We are using the same formula described in the FY 2005 final rule 
(69 FR 49064), with the addition of now using the post-reclassified 
wage indices, to calculate the out-migration adjustment. This 
adjustment is calculated as follows:
    Step 1. Subtract the wage index for the qualifying county from the 
wage index of each of the higher wage area(s) to which hospital workers 
commute.
    Step 2. Divide the number of hospital employees residing in the 
qualifying county who are employed in such higher wage index area by 
the total number of hospital employees residing in the qualifying 
county who are employed in any higher wage index area. For each of the 
higher wage areas, multiply this result by the result obtaining in Step 
1.
    Step 3. Sum the products resulting from Step 2 (if the qualifying 
county has workers commuting to more than one higher wage area).
    Step 4. Multiply the result from Step 3 by the percentage of 
hospital employees who are residing in the qualifying county and who 
are employed in any higher wage index area.
    These adjustments will be effective for each county for a period of 
3 fiscal years. Hospitals that received the adjustment in FY 2007 will 
be eligible to retain that same adjustment for FY 2008. For hospitals 
in newly qualified counties, adjustments to the wage index are 
effective for 3 years, beginning with discharges occurring on or after 
October 1, 2007.
    Hospitals receiving the wage index adjustment under section 
1886(d)(13)(F) of the Act are not eligible for reclassification under 
sections 1886(d)(8) or (d)(10) of the Act unless they waive the out-
migration adjustment. Consistent with our FY 2005, 2006, and 2007 final 
rules, we are specifying that hospitals redesignated under section 
1886(d)(8) of the Act or reclassified under section 1886(d)(10) of the 
Act will be deemed to have chosen to retain their redesignation or 
reclassification. Section 1886(d)(10) hospitals that wish to receive 
the out-migration adjustment, rather than their reclassification, had 
to follow the termination/withdrawal procedures specified in 42 CFR 
412.273 and section III.I.3. of the preamble of this final rule with 
comment period. Otherwise, they were deemed to have waived the out-
migration adjustment. Hospitals redesignated under section 1886(d)(8) 
of the Act were deemed to have waived the out-migration adjustment, 
unless they explicitly notified CMS that they elected to receive the 
out-migration adjustment instead within 45 days from the publication of 
the proposed rule.
    Comment: Several commenters expressed concern about using post-
reclassified wage data instead of the current policy of using pre-
reclassified wage data for the out-migration adjustment. The commenters 
stated that the out-migration adjustment is not subject to budget 
neutrality requirements set forth at section 1886(d)(3)(E) of the Act 
and using pre-reclassified wage data is more technically correct. 
Another commenter suggested that use of the post-reclassified wage 
indices would result in a ``mismatch of the wage indices compared to 
the commuting patterns of employees.'' According to the commenters, the 
use of the attaching area wage index that includes the wage data of 
reclassified hospitals would mean that the adjustment includes 
``counties that are not included in the underlying census data.''
    Response: The out-migration adjustments are not included in any 
budget neutrality calculations and there is no adjustment to either the 
standardized amount or the wage index to make the additional payments 
under section 1886(d)(13) of the Act budget neutral. Under section 
1886(d)(13) of the Act, the home area wage index for hospitals eligible 
for an out-migration adjustment is increased based on the weighted 
average of the difference between the wage index for the higher wage 
index MSA(s) to which its hospital employees commute and the wage index 
of the labor market area in which the qualifying county is located, 
multiplied by the overall percentage of hospital workers residing in 
the qualifying county who are employed in any MSA with a higher wage 
index. This adjustment to the wage index for all eligible hospitals 
increases aggregate Medicare payments and does not result in any 
redistribution of payments as would occur if there were a budget 
neutrality adjustment to either the standardized amount or the wage 
index like there is for revisions to area wage indices, geographic 
reclassification, and application of the rural floor. Application of 
the out-migration adjustment remains a nonbudget neutral policy as it 
has always been in the past.
    Use of a post-reclassified area wage index does have the potential 
to result in the out-migration adjustment being determined using wage 
data for hospitals geographically located in the labor market area as 
well as other hospitals reclassified into the area. Under section 
1886(d)(8)(C) of the Act, an area wage index may increase as a result 
of including the wage data of hospitals that are reclassified to the 
area (the same section precludes an area wage index from decreasing as 
a result of hospitals reclassifying into the area). However, for most 
labor market areas, the post-reclassified area wage index and the pre-
reclassified area wage index are the same and reflect only the wage 
data of hospitals that are geographically located in the area. This 
result occurs because hospitals generally reclassify to areas that have 
similar wage levels as their own, so the data for reclassifying 
hospitals rarely affect the area wage index. Therefore, we believe that 
the post-reclassified wage index accurately reflects an area's wage 
levels, even though it may sometimes include the data for hospitals 
that are reclassified to the area. We also believe that using the post-
reclassified wage index instead of the pre-reclassified wage index is 
technically more appropriate for computing the out-migration 
adjustment. Because the out-migration adjustment is an add-on to the 
post-reclassified wage index adjusted for rural floor budget 
neutrality, consistently, the out-migration adjustment itself should be 
computed using post-reclassified wage indices adjusted for rural floor 
budget neutrality. Under the new policy that we are adopting in this 
final rule with comment period, the out-migration adjustment is 
calculated based on the post-reclassified area wage index values in 
Tables 4A and 4B of the Addendum to this final rule with comment 
period. The attaching area wage index values in Table 4C of the 
Addendum to this final rule with comment period are not used in 
computing the adjustment.
    Further, we note that in the FY 2005 final rule (69 FR 49063), we 
originally stated that we were concerned about using the post-
reclassification wage index as a basis for determining the out-
migration adjustment because, in some counties, not all hospitals are 
receiving the same wage index due to individual hospital 
reclassifications (for example, in the FY 2005 final rule, we stated 
that, in one county, there may be two hospitals that receive different 
wage indexes because one hospital has been reclassified). We stated 
that, given the differing wage indexes in this situation,

[[Page 47341]]

it was unclear which wage index would be most appropriate to use as the 
basis for comparison for this county. After further considering this 
issue, we no longer believe that use of the post reclassification wage 
index presents a concern in this situation. If a hospital reclassifies 
to another labor market area, the reclassified hospital may raise the 
wage index of that labor market area (creating a new, higher post-
reclassification wage index), but there is still only one wage index 
for each county in that specific geographic area. Under section 
1886(d)(8)(C) of the Act, a reclassified hospital may receive a 
separate wage index that is different from the wage index of the area 
to which the hospital reclassified. However, under section 
1886(d)(13)(G) of the Act, a reclassified hospital is not eligible to 
receive the out-migration adjustment. Therefore, it is not possible for 
two hospitals in the same county to qualify for the out-migration 
adjustment and yet have different wage indices. In addition, we 
acknowledge that, due to the application of the rural floor, a CBSA 
could have more than one wage index value. Specifically, if a CBSA 
crosses State lines, and the rural floor is applied in some counties 
and not others in the CBSA, hospitals in the CBSA could receive 
different wage indices, depending on the State in which they are 
geographically located. However, even in this situation, there is only 
one wage index for a particular county. For labor market areas that 
have more than one wage index, both the computation and the application 
of the out-migration adjustment would be based on the wage index of the 
qualifying county in which the hospital workers reside and the county 
to which the workers are commuting.
    Comment: Commenters expressed concern about a New England hospital 
not qualifying to receive an out-migration adjustment. The commenters 
stated that the reason for a change in the county's eligibility for the 
out-migration adjustment is due to CMS' proposed policy to use the 
post-reclassified wage data instead of pre-reclassified wage data.
    Response: Some hospitals that previously qualified for an out-
migration adjustment may not qualify in FY 2008 because we recalculate 
the out-migration adjustment every 3 years for all hospitals. In 
recalculating the out-migration adjustment, there is a possibility that 
a hospital that previously received an out-migration adjustment may no 
longer qualify for the adjustment because its count no longer meets the 
10-percent commuting threshold to a higher wage index area (that is, 
less than 10 percent of the county's hospital employees commute to a 
labor market area with a higher wage index (or wage indices)). Another 
criterion for qualifying for the out-migration adjustment is that the 
3-year average hourly wage of the hospital(s) in the county where the 
hospital is located must equal or exceed the 3-year average hourly wage 
of all hospitals in the labor market area in which the county is 
located. The New England hospital in question is in a single county 
CBSA. Therefore, the 3-year average hourly wage of the hospitals in the 
county equals the 3-year average hourly wage of all hospitals in the 
CBSA in which the county is located. However, the county does not meet 
the 10-percent threshold, which requires that at least 10 percent of 
the county's hospital employees commute to higher wage index areas. The 
county no longer qualifies for the out-commuting adjustment because of 
changes in the wage indices for the areas to where its hospital workers 
commute. The use of post-reclassified wage index had no effect on this 
hospital no longer qualifying for an out-migration adjustment.
    Comment: One commenter expressed confusion regarding a county that 
was once eligible for the out-migration adjustment but, for FY 2008, 
the county is no longer eligible.
    Response: We understand the concern for counties that previously 
were eligible for the out-migration adjustment but were not included on 
Table 4J of the Addendum to the proposed rule to receive an adjustment. 
Eligibility for the out-migration adjustment is affected by the 
percentage of a county's hospital employees who commute to areas with 
higher wage indices, and the difference between the 3-year average 
hourly wage of the hospitals in the county and the 3-year average 
hourly wage of all hospitals in the labor market area in which the 
county is located. The amount of the out-migration adjustment is 
affected by the percentage of hospital employees who commute to areas 
with higher wage indices, and the difference between the wage index of 
each higher wage index area to which the county's hospital employees 
commute and the wage index of the labor market area in which the county 
is located. Thus, eligibility for the out-migration adjustment and the 
out-migration percentage for each county is a function of both the 
commuting data and changes in the wage index values. Because the wage 
indices associated with each resident county and the labor market areas 
to which county residents commute change each year, a county's out-
migration percentage can vary each 3-year period that a county is 
qualified for the out-migration adjustment because a higher wage index 
area in one year might not be a higher wage index area in the next 
year. These normal changes in wage index values could also result in a 
county not deemed a qualifying county in one year becoming a qualifying 
county at a later point, or vice versa. A county could, therefore, not 
be listed in the proposed rule and be listed in the final rule due to 
the county wage data fluctuating. Therefore, if a county is not listed 
as eligible for receiving the out-migration adjustment on Table 4J of 
the Addendum to this final rule with comment period, the county's wage 
data or commuting patterns did not warrant an adjustment.
    Table 4J in the Addendum to this final rule with comment period 
lists the out-migration wage index adjustments for FY 2008. Hospitals 
that are not otherwise reclassified or redesignated under section 
1886(d)(8) or section 1886(d)(10) of the Act will automatically receive 
the listed adjustment. In accordance with the procedures discussed 
above, redesignated/reclassified hospitals were deemed to have waived 
the out-migration adjustment unless CMS was otherwise notified. 
Hospitals that were eligible to receive the out-migration wage index 
adjustment and that withdrew their application for reclassification 
will automatically receive the wage index adjustment listed in Table 4J 
in the Addendum to this final rule with comment period.

K. Process for Requests for Wage Index Data Corrections

    The preliminary Worksheet S-3 wage data and occupational mix survey 
data files (1st and 2nd quarter 2006) for the FY 2008 wage index were 
made available on October 6, 2006, through the Internet on the CMS Web 
site at: http://www.cms.hhs.gov/AcuteInpatientPPS/WIFN/list.asp#TopOfPage. In a memorandum dated October 6, 2006, we 
instructed all fiscal intermediaries/MAC to inform the IPPS hospitals 
they service of the availability of the wage index data files and the 
process and timeframe for requesting revisions (including the specific 
deadlines listed below). We also instructed the fiscal intermediaries/
MAC to advise hospitals that these data were also made available 
directly through their representative hospital organizations.
    If a hospital wished to request a change to its data as shown in 
the October 6, 2006 wage and occupational mix data files, the hospital 
was to submit corrections along with complete,

[[Page 47342]]

detailed supporting documentation to its fiscal intermediary by 
December 4, 2006. Hospitals were notified of this deadline and of all 
other possible deadlines and requirements, including the requirement to 
review and verify their data as posted on the preliminary wage index 
data file on the Internet, through the October 6, 2006 memorandum 
referenced above.
    In the October 6, 2006 memorandum, we also specified that a 
hospital could request revisions to 1st and/or 2nd quarter occupational 
mix survey data if they missed the previous deadlines (June 1, 2006, 
for the 1st quarter data collection and August 31, 2006, for the 2nd 
quarter collection) for submitting occupational mix survey data to 
their fiscal intermediaries. A hospital requesting revisions to its 1st 
and/or 2nd quarter occupational mix survey data was to copy its 
record(s) from the CY 2006 occupational mix preliminary files posted to 
our Web site in October, highlight the revised cells on its 
spreadsheet, and submit its spreadsheet(s) and complete documentation 
to its fiscal intermediary no later than December 4, 2006.
    The fiscal intermediaries (or, if applicable, the MAC) notified the 
hospitals by mid-February 2007 of any changes to the wage index data as 
a result of the desk reviews and the resolution of the hospitals'' 
early-December revision requests. The fiscal intermediaries/MAC also 
submitted the revised data to CMS by mid-February 2007. CMS published 
the proposed wage index public use files that included hospitals' 
revised wage data on February 23, 2007. In a memorandum also dated 
February 23, 2007, we instructed fiscal intermediaries/MAC to notify 
all hospitals regarding the availability of the proposed wage index 
public use files and the criteria and process for requesting 
corrections and revisions to the wage index data. Hospitals had until 
March 12, 2007 to submit requests to the fiscal intermediaries/MAC for 
reconsideration of adjustments made by the fiscal intermediaries/MAC as 
a result of the desk review, and to correct errors due to CMS's or the 
fiscal intermediary's (or, if applicable, the MAC's) mishandling of the 
wage index data. Hospitals were also required to submit sufficient 
documentation to support their requests.
    After reviewing requested changes submitted by hospitals, fiscal 
intermediaries/MAC were required to transmit any additional revisions 
resulting from the hospitals' reconsideration requests by April 13, 
2007. The deadline for a hospital to request CMS intervention in cases 
where the hospital disagreed with the fiscal intermediary's (or, if 
applicable, the MAC's) policy interpretations was April 20, 2007.
    Hospitals were given the opportunity to also examine Table 2 in the 
Addendum to the proposed rule. Table 2 of the proposed rule contained 
each hospital's adjusted average hourly wage used to construct the wage 
index values for the past 3 years, including the FY 2004 data used to 
construct the proposed FY 2008 wage index. We noted that the hospital 
average hourly wages shown in Table 2 only reflected changes made to a 
hospital's data and transmitted to CMS by February 21, 2007.
    We released the final wage index data public use files in early May 
2007 on the Internet at http:/www.cms.hhs.gov/AcuteInpatientPPS/WIFN/
list.asp#TopOfPage. The May 2007 public use files were made available 
solely for the limited purpose of identifying any potential errors made 
by CMS or the fiscal intermediary/MAC in the entry of the final wage 
index data that result from the correction process described above 
(revisions submitted to CMS by the fiscal intermediaries/MAC by April 
13, 2007). If, after reviewing the May 2007 final files, a hospital 
believed that its wage or occupational mix data were incorrect due to a 
fiscal intermediary or MAC or CMS error in the entry or tabulation of 
the final data, the hospital had to send a letter to both its fiscal 
intermediary or MAC and CMS that outlined why the hospital believed an 
error existed and to provide all supporting information, including 
relevant dates (for example, when it first became aware of the error). 
CMS and the fiscal intermediaries (or, if applicable, the MAC) had to 
receive these requests no later than June 8, 2007.
    Each request also had to be sent to the fiscal intermediary or the 
MAC. The fiscal intermediary or the MAC reviewed requests upon receipt 
and contacted CMS immediately to discuss its findings.
    At this point in the process, that is, after the release of the May 
2007 wage index data files, changes to the wage and occupational mix 
data were only made in those very limited situations involving an error 
by the fiscal intermediary or the MAC or CMS that the hospital could 
not have known about before its review of the final wage index data 
files. Specifically, neither the fiscal intermediary or the MAC nor CMS 
approved the following types of requests:
    <bullet> Requests for wage index data corrections that were 
submitted too late to be included in the data transmitted to CMS by 
fiscal intermediaries or the MAC on or before April 13, 2007.
    <bullet> Requests for correction of errors that were not, but could 
have been, identified during the hospital's review of the February 23, 
2007 wage index public use files.
    <bullet> Requests to revisit factual determinations or policy 
interpretations made by the fiscal intermediary or the MAC or CMS 
during the wage index data correction process.
    Verified corrections to the wage index data received timely by CMS 
and the fiscal intermediaries or the MAC (that is, by June 8, 2007) 
were incorporated into the final wage index in this final rule with 
comment period, which will be effective October 1, 2007.
    We created the processes described above to resolve all substantive 
wage index data correction disputes before we finalize the wage and 
occupational mix data for the FY 2008 payment rates. Accordingly, 
hospitals that did not meet the procedural deadlines set forth above 
will not be afforded a later opportunity to submit wage index data 
corrections or to dispute the fiscal intermediary's (or, if applicable 
the MAC's) decision with respect to requested changes. Specifically, 
our policy is that hospitals that do not meet the procedural deadlines 
set forth above will not be permitted to challenge later, before the 
Provider Reimbursement Review Board, the failure of CMS to make a 
requested data revision. (See W. A. Foote Memorial Hospital v. Shalala, 
No. 99-CV-75202-DT (E.D. Mich. 2001) and Palisades General Hospital v. 
Thompson, No. 99-1230 (D.D.C. 2003).) We refer the reader also to the 
FY 2000 final rule (64 FR 41513) for a discussion of the parameters for 
appealing to the PRRB for wage index data corrections.
    Again, we believe the wage index data correction process described 
above provides hospitals with sufficient opportunity to bring errors in 
their wage and occupational mix data to the fiscal intermediary's (or, 
if applicable, the MAC's) attention. Moreover, because hospitals had 
access to the final wage index data by early May 2007, they had the 
opportunity to detect any data entry or tabulation errors made by the 
fiscal intermediary or the MAC or CMS before the development and 
publication of the final FY 2008 wage index by August 1, 2007, and the 
implementation of the FY 2008 wage index on October 1, 2007. If 
hospitals availed themselves of the opportunities afforded to provide 
and make corrections to the wage and occupational mix data, the wage 
index implemented on October 1 should be accurate. Nevertheless, in the 
event that

[[Page 47343]]

errors are identified by hospitals and brought to our attention after 
June 8, 2007, we retain the right to make midyear changes to the wage 
index under very limited circumstances.
    Specifically, in accordance with Sec.  412.64(k)(1) of our existing 
regulations, we make midyear corrections to the wage index for an area 
only if a hospital can show that: (1) the fiscal intermediary or the 
MAC or CMS made an error in tabulating its data; and (2) the requesting 
hospital could not have known about the error or did not have an 
opportunity to correct the error, before the beginning of the fiscal 
year. For purposes of this provision, ``before the beginning of the 
fiscal year'' means by the June deadline for making corrections to the 
wage data for the following fiscal year's wage index. This provision is 
not available to a hospital seeking to revise another hospital's data 
that may be affecting the requesting hospital's wage index for the 
labor market area. As indicated earlier, since CMS makes the wage index 
data available to hospitals on the CMS Web site prior to publishing 
both the proposed and final IPPS rules, and the fiscal intermediaries 
or the MAC notify hospitals directly of any wage index data changes 
after completing their desk reviews, we do not expect that midyear 
corrections will be necessary. However, under our current policy, if 
the correction of a data error changes the wage index value for an 
area, the revised wage index value will be effective prospectively from 
the date the correction is made.
    In the FY 2006 IPPS final rule (70 FR 47385), we revised Sec.  
412.64(k)(2) to specify that, effective on October 1, 2005, that is 
beginning with the FY 2006 wage index, a change to the wage index can 
be made retroactive to the beginning of the Federal fiscal year only 
when: (1) the fiscal intermediary (or, if applicable, the MAC) or CMS 
made an error in tabulating data used for the wage index calculation; 
(2) the hospital knew about the error and requested that the fiscal 
intermediary (or if applicable the MAC) and CMS correct the error using 
the established process and within the established schedule for 
requesting corrections to the wage index data, before the beginning of 
the fiscal year for the applicable IPPS update (that is, by the June 
08, 2007 deadline for the FY 2008 wage index); and (3) CMS agreed that 
the fiscal intermediary (or if applicable, the MAC) or CMS made an 
error in tabulating the hospital's wage index data and the wage index 
should be corrected.
    In those circumstances where a hospital requested a correction to 
its wage index data before CMS calculates the final wage index (that 
is, by the June deadline), and CMS acknowledges that the error in the 
hospital's wage index data was caused by CMS's or the fiscal 
intermediary's (or, if applicable, the MAC's) mishandling of the data, 
we believe that the hospital should not be penalized by our delay in 
publishing or implementing the correction. As with our current policy, 
we indicated that the provision is not available to a hospital seeking 
to revise another hospital's data. In addition, the provision cannot be 
used to correct prior years' wage index data; it can only be used for 
the current Federal fiscal year. In other situations where our policies 
would allow midyear corrections, we continue to believe that it is 
appropriate to make prospective-only corrections to the wage index.
    We note that, as with prospective changes to the wage index, the 
final retroactive correction will be made irrespective of whether the 
change increases or decreases a hospital's payment rate. In addition, 
we note that the policy of retroactive adjustment will still apply in 
those instances where a judicial decision reverses a CMS denial of a 
hospital's wage index data revision request.
    Comment: One commenter suggested that, for future wage indices, CMS 
should provide an additional public use file that reflects the data 
that are actually used in computing the wage index that is published in 
the proposed rule. The commenter noted that after CMS posts the 
February public use file, CMS makes revisions and corrections to the 
file and includes the updates in the proposed wage index. The commenter 
expressed support for CMS' decision to use the latest available data to 
compute the proposed wage index and for the timing and purpose of the 
February and May public use files. However, the commenter opined that a 
data file that matches the proposed wage index would be particularly 
helpful to the public for review and comments on the proposed rule, and 
CMS could release the file strictly for this purpose. The commenter 
also noted that releasing this new wage data file would be consistent 
with CMS releasing an up-to-date version of the MedPAR file along with 
each proposed rule.
    Response: We believe that the commenter's suggestion is reasonable. 
In the interest of meeting the data needs of the public, beginning with 
the FY 2009 wage index, we will post an additional public use file on 
our Web site that reflects the actual data that are used in computing 
the proposed wage index. The release of this new file will not alter 
the current wage index process or schedule. We will notify the hospital 
community of the availability of these data as we do with the current 
public use wage data files through our Hospital Open Door forum. We 
encourage hospitals to sign up for automatic notifications of 
information about hospital issues and the scheduling of the Hospital 
Open Door forums at: http://www.cms.hhs.gov/OpenDoorForums/.

L. Labor-Related Share for the Wage Index for FY 2008

    Section 1886(d)(3)(E) of the Act directs the Secretary to adjust 
the proportion of the national prospective payment system base payment 
rates that are attributable to wages and wage-related costs by a factor 
that reflects the relative differences in labor costs among geographic 
areas. It also directs the Secretary to estimate from time to time the 
proportion of hospital costs that are labor-related: ``The Secretary 
shall adjust the proportion (as estimated by the Secretary from time to 
time) of hospitals' costs which are attributable to wages and wage-
related costs of the DRG prospective payment rates * * *'' We refer to 
the portion of hospital costs attributable to wages and wage-related 
costs as the labor-related share. The labor-related share of the 
prospective payment rate is adjusted by an index of relative labor 
costs, which is referred to as the wage index.
    Section 403 of Pub. L. 108-173 amended section 1886(d)(3)(E) of the 
Act to provide that the Secretary must employ 62 percent as the labor-
related share unless this ``would result in lower payments to a 
hospital than would otherwise be made.'' However, this provision of 
Pub. L. 108-173 did not change the legal requirement that the Secretary 
estimate ``from time to time'' the proportion of hospitals' costs that 
are ``attributable to wages and wage-related costs.'' We believe that 
this reflected Congressional intent that hospitals receive payment 
based on either a 62-percent labor-related share, or the labor-related 
share estimated from time to time by the Secretary, depending on which 
labor-related share resulted in a higher payment.
    We have continued our research into the assumptions employed in 
calculating the labor-related share. Our research involves analyzing 
the compensation share separately for urban and rural hospitals, using 
regression analysis to determine the proportion of costs influenced by 
the area wage index, and exploring alternative methodologies to 
determine whether all or only a portion of professional fees and

[[Page 47344]]

nonlabor intensive services should be considered labor-related.
    In the FY 2006 IPPS final rule (70 FR 47392), we presented our 
analysis and conclusions regarding the frequency and methodology for 
updating the labor-related share for FY 2006. We also recalculated a 
labor-related share of 69.731 percent, using the FY 2002 based PPS 
market basket for discharges occurring on or after October 1, 2005. In 
addition, we implemented this revised and rebased labor-related share 
in a budget neutral manner, but consistent with section 1886(d)(3)(E) 
of the Act, we did not take into account the additional payments that 
would be made as a result of hospitals with a wage index less than or 
equal to 1.0 being paid using a labor-related share lower than the 
labor-related share of hospitals with a wage index greater than 1.0.
    The labor-related share is used to determine the proportion of the 
national PPS base payment rate to which the area wage index is applied. 
In this final rule with comment period, we are not making any changes 
to the national average proportion of operating costs that are 
attributable to wages and salaries, fringe benefits, professional fees, 
contract labor, and labor intensive services. Therefore, we are 
continuing to use a labor-related share of 69.731 percent for 
discharges occurring on or after October 1, 2007. Tables 1A and 1B in 
the Addendum to this final rule with comment period reflect this labor-
related share. We note that section 403 of Pub. L. 108-173 amended 
sections 1886(d)(3)(E) and 1886(d)(9)(C)(iv) of the Act to provide that 
the Secretary must employ 62 percent as the labor-related share unless 
this employment ``would result in lower payments to a hospital than 
would otherwise be made.''
    We also are continuing to use a labor-related share for the Puerto 
Rico specific standardized amounts of 58.7 percent for discharges 
occurring on or after October 1, 2007. Consistent with our methodology 
for determining the national labor-related share, we added the Puerto 
Rico-specific relative weights for wages and salaries, fringe benefits, 
contract labor, nonmedical professional fees, and other labor intensive 
services to determine the labor-related share. Puerto Rico hospitals 
are paid based on 75 percent of the national standardized amounts and 
25 percent of the Puerto Rico-specific standardized amounts. For Puerto 
Rico hospitals, the national labor-related share will always be 62 
percent because the wage index for all Puerto Rico hospitals is less 
than 1.0. A Puerto Rico-specific wage index is applied to the Puerto 
Rico-specific portion of payments to the hospitals. The labor-related 
share of a hospital's Puerto Rico specific rate will be either 62 
percent or the Puerto Rico-specific labor-related share depending on 
which results in higher payments to the hospital. If the hospital has a 
Puerto Rico-specific wage index of greater than 1.0, we will set the 
hospital's rates using a labor-related share of 62 percent for the 25 
percent portion of the hospital's payment determined by the Puerto Rico 
standardized amounts because this amount will result in higher 
payments. Conversely, a hospital with a Puerto Rico-specific wage index 
of less than 1.0 will be paid using the Puerto Rico-specific labor-
related share of 58.7 percent of the Puerto Rico-specific rates because 
the lower labor-related share will result in higher payments. The 
Puerto Rico labor-related share of 58.7 percent for FY 2007 is 
reflected in the Table 1C of the Addendum to this final rule with 
comment period.

M. Wage Index Study Required Under Pub. L. 109-432

    Section 106(b)(1) of the MIEA-TRHCA (Pub. L. 109-432) requires 
MedPAC to submit to Congress, not later than June 30, 2007, a report on 
the Medicare wage index classification system applied under the 
Medicare Inpatient Prospective Payment System. Section 106(b) of MIEA-
TRHCA requires the report to include any alternatives that MedPAC 
recommends to the method to compute the wage index under section 
1886(d)(3)(E) of the Act.
    In addition, section 106(b)(2) of the MIEA TRHCA instructs the 
Secretary of Health and Human Services, taking into account MedPAC's 
recommendations on the Medicare wage index classification system, to 
include in the FY 2009 IPPS proposed rule one or more proposals to 
revise the wage index adjustment applied under section 1886(d)(3)(E) of 
the Act for purposes of the IPPS. The proposal (or proposals) must 
consider each of the following:
    <bullet> Problems associated with the definition of labor markets 
for the wage index adjustment;
    <bullet> The modification or elimination of geographic 
reclassifications and other adjustments;
    <bullet> The use of Bureau of Labor of Statistics data or other 
data or methodologies to calculate relative wages for each geographic 
area;
    <bullet> Minimizing variations in wage index adjustments between 
and within MSAs and statewide rural areas;
    <bullet> The feasibility of applying all components of CMS' 
proposal to other settings;
    <bullet> Methods to minimize the volatility of wage index 
adjustments while maintaining the principle of budget neutrality;
    <bullet> The effect that the implementation of the proposal would 
have on health care providers on each region of the country;
    <bullet> Methods for implementing the proposal(s) including methods 
to phase in such implementations; and
    <bullet> Issues relating to occupational mix such as staffing 
practices and any evidence on quality of care and patient safety 
including any recommendation for alternative calculations to the 
occupational mix.
    In the proposed rule, we indicated that we look forward to 
reviewing the MedPAC report on the wage index later this year. As 
required by the law, we will consider MedPAC's recommendations and each 
of the factors specified above in making a proposal (or proposals) in 
the FY 2009 IPPS proposed rule.
    Comment: Many commenters provided comments and suggestions on the 
MIEA-TRHCA requirements to study the wage index.
    Response: We appreciate the commenters' ideas and suggestions on 
the wage index in response to the statutory requirements under Pub. L. 
109-432. We plan to consider all of the comments we received when 
developing our FY 2009 proposed rule.
    We note that MedPAC released its June 2007 report to Congress on 
June 15, 2007. As the statute requires, the report includes MedPAC's 
analysis and recommendations on alternatives to the method to compute 
the wage index. The full report can be downloaded from MedPAC's Web 
site at http://www.medpac.gov/documents/Jun07_EntireReport.pdf.

N. Proxy for the Hospital Market Basket

    In the FY 2006 IPPS final rule (70 FR 47387), we changed the base 
year cost structure for the IPPS hospital index for the hospital market 
basket for operating costs from FY 1997 to FY 2002. As discussed in 
that final rule, the IPPS hospital index primarily uses the BLS data as 
price proxies, which are grouped in one of the three BLS categories. 
The categories are Producer Price Indexes (PPIs), Consumer Price 
Indexes (CPIs), and Employment Cost Indexes (ECIs), discussed in detail 
in the FY 2006 IPPS final rule (70 FR 47388 through 47391). We evaluate 
the price proxies using the criteria of reliability, timeliness, 
availability, and relevance. The PPIs, CPIs, and ECIs selected by us 
and used for this proposed rule meet these criteria as described in the 
FY 2006 IPPS final

[[Page 47345]]

rule. We believe they continue to be the best measures of price changes 
for the cost categories.
    Beginning April 2006 with the publication of March 2006 data, the 
BLS' ECI began using a different classification system, the North 
American Industrial Classification System (NAICS), instead of the 
Standard Industrial Codes (SIC), which no longer exist. We have 
consistently used the ECI as the data source for our wages and salaries 
and other price proxies in the IPPS market basket and are not making 
any changes to the usage at this time. Thus, we used the BLS-NAICS-
based ECIs as price proxies in the market basket.

IV. Other Decisions and Changes to the IPPS for Operating Costs and GME 
Costs

A. Reporting of Hospital Quality Data for Annual Hospital Payment 
Update (Sec.  412.64(d)(2))

1. Background
    Section 5001(a) of the Deficit Reduction Act of 2005, Pub. L. 109-
171 (DRA), set out new requirements for the Reporting Hospital Quality 
Data for Annual Payment Update (RHQDAPU) program. We established the 
RHQDAPU program in order to implement section 501(b) of Pub. L. 108-
173. It builds on our ongoing voluntary Hospital Quality Initiative, 
which is intended to empower consumers with quality of care information 
to make more informed decisions about their health care while also 
encouraging hospitals and clinicians to improve their quality of care.
    Section 5001(a) of the DRA revised the mechanism used to update the 
standardized amount for payment for hospital inpatient operating costs. 
Specifically, sections 1886(b)(3)(B)(viii)(I) and (II) of the Act 
provide that the payment update for FY 2007 and each subsequent fiscal 
year be reduced by 2.0 percentage points for any ``subsection (d) 
hospital'' (that is, a hospital paid under the IPPS) that does not 
submit certain quality data in a form and manner, and at a time, 
specified by the Secretary.
    Sections 1886(b)(3)(B)(viii)(III) and (IV) of the Act required that 
we expand the ``starter set'' of 10 quality measures established by the 
Secretary as of November 1, 2003, provided that certain requirements 
were met. In expanding this set of measures, section 
1886(b)(3)(B)(viii)(IV) of the Act provides that we must begin to adopt 
the baseline set of performance measures as set forth in a 2005 report 
issued by the Institute of Medicine (IOM) of the National Academy of 
Sciences under section 238(b) of the MMA, \28\ effective for payments 
beginning with FY 2007.
---------------------------------------------------------------------------

    \28\ Institute of Medicine, ``Performance Measurement: 
Accelerating Improvement,'' December 1, 2005, available at http://www.iom.edu/CMS/3809/19805/31310.aspx.
---------------------------------------------------------------------------

    The IOM measures include: Hospital Quality Alliance (HQA) quality 
measures (the HQA is a public-private collaboration to improve the 
quality of care provided by the nation's hospitals by measuring and 
publicly reporting on that care), the HCAHPS patient perspective 
survey, and three structural measures. The structural measures are: (1) 
implementation of computerized provider order entry for prescriptions, 
(2) staffing of intensive care units with intensivists, and (3) 
evidence-based hospital referrals. These structural measures constitute 
the Leapfrog Group's original ``three leaps,'' and are part of the 
National Quality Forum's 30 Safe Practices for Better Healthcare.
    Sections 1886(b)(3)(B)(viii)(V) and (VI) of the Act require that, 
effective for payments beginning with FY 2008, we add other quality 
measures that reflect consensus among affected parties, and provide the 
Secretary with the discretion to replace any quality measures or 
indicators in appropriate cases, such as where all hospitals are 
effectively in compliance with a measure, or the measures or indicators 
have been subsequently shown to not represent the best clinical 
practice. Thus, the Secretary has broad discretion to replace measures 
on the basis that they are not appropriate.
    Section 1886(b)(3)(B)(viii)(VII) of the Act requires that we 
establish procedures for making quality data available to the public 
after ensuring that a hospital has the opportunity to review, in 
advance, its data that are to be made public. In addition, this section 
requires that we report quality measures of process, structure, 
outcome, patients' perspective on care, efficiency, and costs of care 
that relate to services furnished in inpatient settings on the CMS Web 
site.
    Section 1886(b)(3)(B)(viii)(I) of the Act also provides that any 
reduction in a hospital's payment update will apply only with respect 
to the fiscal year involved, and will not be taken into account for 
computing the applicable percentage increase for a subsequent fiscal 
year.
    The ``starter set'' of 10 quality measures we established as of 
November 1, 2003 are as follows:
Heart Attack (Acute Myocardial Infarction or AMI)
    <bullet> Was aspirin given to the patient upon arrival to the 
hospital?
    <bullet> Was aspirin prescribed when the patient was discharged?
    <bullet> Was a beta-blocker given to the patient upon arrival to 
the hospital?
    <bullet> Was a beta-blocker prescribed when the patient was 
discharged?
    <bullet> Was an ACE inhibitor given for the patient with heart 
failure?
Heart Failure (HF)
    <bullet> Did the patient get an assessment of his or her heart 
function?
    <bullet> Was an ACE inhibitor given to the patient?
Pneumonia (PNE)
    <bullet> Was an antibiotic given to the patient in a timely way?
    <bullet> Had the patient received a pneumococcal vaccination?
    <bullet> Was the patient's oxygen level assessed?
    We adopted these measures after the Secretary of HHS joined in a 
partnership with several collaborators intended to promote hospital 
quality improvement and public reporting of hospital quality 
information. These collaborators included the American Hospital 
Association, the Federation of American Hospitals, the Association of 
American Medical Colleges, the Joint Commission on Accreditation of 
Healthcare Organizations (the Joint Commission), the National Quality 
Forum (NQF), the American Medical Association, the Consumer-Purchaser 
Disclosure Project, the AARP, the American Federation of Labor-Congress 
of Industrial Organizations, the Agency for Healthcare Research and 
Quality (AHRQ), as well as CMS and others. This collaboration, 
originally known as the National Voluntary Hospital Reporting 
Initiative, is now known as the HQA.
    This starter set of 10 quality measures was endorsed by the NQF. 
The NQF is a voluntary consensus standard setting organization 
established to standardize health care quality measurement and 
reporting through its consensus development process. In addition, this 
starter set is a subset of measures currently collected for the Joint 
Commission as part of its certification program.
    We chose these 10 quality measures in order to collect data that 
will: (1) provide useful and valid information about hospital quality 
to the public; (2) provide hospitals with a sense of predictability 
about public reporting expectations; (3) begin to standardize

[[Page 47346]]

data and data collection mechanisms; and (4) foster hospital quality 
improvement.
    Hospitals submit quality data through the QualityNet Exchange 
secure Web site (www.qnetexchange.org). We believe that this Web site 
meets or exceeds all current Health Insurance Portability and 
Accountability Act requirements for security of personal health 
information. Data from this initiative are used to populate the 
Hospital Compare Web site, www.hospitalcompare.hhs.gov. This Web site 
assists beneficiaries and the general public by providing information 
on hospital quality of care for consumers who need to select a 
hospital. It further serves to encourage consumers to work with their 
doctors and hospitals to discuss the quality of care they provide to 
patients, thereby providing an additional incentive to improve the 
quality of care they provide.
    In the FY 2007 IPPS final rule (71 FR 48137), we amended our 
regulations at Sec.  412.64(d)(2) to reflect the 2.0 percentage point 
reduction in the payment update for FY 2007 and subsequent fiscal years 
for hospitals that do not comply with requirements for reporting 
quality data as provided for under section 5001(a) of the DRA. We also 
added 11 additional quality measures to the 10 measure starter set to 
establish an expanded set of 21 quality measures (71 FR 48029 through 
48037). These 21 measures are as follows:

------------------------------------------------------------------------
                 Topic                           Quality measure
------------------------------------------------------------------------
Heart Attack (Acute Myocardial           <bullet> Aspirin at arrival.*
 Infarction).
                                         <bullet> Aspirin prescribed at
                                          discharge.*
                                         <bullet> ACE inhibitor (ACE-I)
                                          or Angiotensin Receptor
                                          Blocker (ARBs) for left
                                          ventricular systolic
                                          dysfunction.*
                                         <bullet> Beta blocker at
                                          arrival.*
                                         <bullet> Beta blocker
                                          prescribed at discharge.*
                                         <bullet> Fibrinolytic
                                          (thrombolytic) agent received
                                          within 30 minutes of hospital
                                          arrival.
                                         <bullet> Percutaneous Coronary
                                          Intervention (PCI) received
                                          within 120 minutes of hospital
                                          arrival.
                                         <bullet> Adult smoking
                                          cessation advice/counseling.
Heart Failure (HF).....................  <bullet> Left ventricular
                                          function assessment.*
                                         <bullet> ACE inhibitor (ACE-I)
                                          or Angiotensin Receptor
                                          Blocker (ARBs) for left
                                          ventricular systolic
                                          dysfunction.*
                                         <bullet> Discharge
                                          instructions.
                                         <bullet> Adult smoking
                                          cessation advice/counseling.
Pneumonia (PNE)........................  <bullet> Initial antibiotic
                                          received within 4 hours of
                                          hospital arrival.*
                                         <bullet> Oxygenation
                                          assessment.*
                                         <bullet> Pneumococcal
                                          vaccination status.*
                                         <bullet> Blood culture
                                          performed before first
                                          antibiotic received in
                                          hospital.
                                         <bullet> Adult smoking
                                          cessation advice/counseling.
                                         <bullet> Appropriate initial
                                          antibiotic selection.
                                         <bullet> Influenza vaccination
                                          status.*
Surgical Care Improvement Project        <bullet> Prophylactic
 (SCIP)--named SIP for discharges prior   antibiotic received within 1
 to July 2006 (3Q06).                     hour prior to surgical
                                          incision.
                                         <bullet> Prophylactic
                                          antibiotics discontinued
                                          within 24 hours after surgery
                                          end time.
------------------------------------------------------------------------
*Measure included in 10 measure starter set.

    In addition, in the FY 2007 IPPS final rule (71 FR 48031 through 
48044), we set out RHQDAPU program procedures for data submission, 
program withdrawal, data validation, attestation, public display of 
hospitals' quality data, and reconsiderations. In response to public 
comments, we required that reporting of the expanded quality measures 
begin with discharges occurring on or after the third calendar quarter 
of 2006 (July through September discharges). We also responded to 
public comments regarding whether we should establish more structured 
reconsideration procedures for FY 2008 and what such procedures might 
include.
    Under section 1886(b)(3)(B)(viii)(V) of the Act, for payments 
beginning with FY 2008, we are required to add other measures that 
reflect consensus among affected parties, and, to the extent feasible 
and practicable, we must include measures set forth by one or more 
national consensus building entities.
2. FY 2008 Quality Measures
    Commenters on the FY 2007 IPPS proposed rule requested that we 
notify the public as far in advance as possible of any proposed 
expansions of the measurement set and program procedures in order to 
encourage broad collaboration and to give hospitals time to prepare for 
any anticipated change. Taking these concerns into account, in the CY 
2007 OPPS final rule (71 FR 68201), we adopted additional quality 
measures for the FY 2008 update. The six additional measures we adopted 
are as follows:
    <bullet> HCAHPS survey
    <bullet> SCIP Quality Measures
    --SCIP-VTE 1: Venous thromboembolism (VTE) prophylaxis ordered for 
surgery patient
    --SCIP-VTE 2: VTE prophylaxis within 24 hours pre/post surgery
    --SCIP Infection 2: Prophylactic antibiotic selection for surgical 
patients
    <bullet> Mortality (Medicare Patients)
    --Acute Myocardial Infarction 30-day mortality Medicare patients
    --Heart Failure 30-day mortality Medicare patients
    For the FY 2008 payment determination, we are requiring hospitals 
to report the following 27 measures:

[[Page 47347]]



------------------------------------------------------------------------
                 Topic                           Quality measure
------------------------------------------------------------------------
Heart Attack (Acute Myocardial           <bullet> Aspirin at arrival.*
 Infarction).
                                         <bullet> Aspirin prescribed at
                                          discharge.*
                                         <bullet> ACE inhibitor (ACE-I)
                                          or Angiotensin Receptor
                                          Blocker (ARBs) for left
                                          ventricular systolic
                                          dysfunction.*
                                         <bullet> Beta blocker at
                                          arrival.*
                                         <bullet> Beta blocker
                                          prescribed at discharge.*
                                         <bullet> Fibrinolytic
                                          (thrombolytic) agent received
                                          within 30 minutes of hospital
                                          arrival.**
                                         <bullet> Percutaneous Coronary
                                          Intervention (PCI) received
                                          within 120 minutes of hospital
                                          arrival.**
                                         <bullet> Adult smoking
                                          cessation advice/counseling.**
Heart Failure (HF).....................  <bullet> Left ventricular
                                          function assessment.*
                                         <bullet> ACE inhibitor (ACE-I)
                                          or Angiotensin Receptor
                                          Blocker (ARBs) for left
                                          ventricular systolic
                                          dysfunction.
                                         <bullet> Discharge
                                          instructions.**
                                         <bullet> Adult smoking
                                          cessation advice/counseling.**
Pneumonia (PNE)........................  <bullet> Initial antibiotic
                                          received within 4 hours of
                                          hospital arrival.*
                                         <bullet> Oxygenation
                                          assessment.*
                                         <bullet> Pneumococcal
                                          vaccination status.*
                                         <bullet> Blood culture
                                          performed before first
                                          antibiotic received in
                                          hospital.**
                                         <bullet> Adult smoking
                                          cessation advice/counseling.**
                                         <bullet> Appropriate initial
                                          antibiotic selection.**
                                         <bullet> Influenza vaccination
                                          status.**
Surgical Care Improvement Project        <bullet> Prophylactic
 (SCIP)--named SIP for discharges prior   antibiotic received within 1
 to July 2006 (3Q06).                     hour prior to surgical
                                          incision.**
                                         <bullet> Prophylactic
                                          antibiotics discontinued
                                          within 24 hours after surgery
                                          end time.**
                                         <bullet> SCIP-VTE 1: Venous
                                          thromboembolism (VTE)
                                          prophylaxis ordered for
                                          surgery patients.***
                                         <bullet> SCIP-VTE 2: VTE
                                          prophylaxis within 24 hours
                                          pre/post surgery.***
                                         <bullet> SCIP Infection 2:
                                          Prophylactic antibiotic
                                          selection for surgical
                                          patients.***
Mortality Measures (Medicare patients).  <bullet> Acute Myocardial
                                          Infarction 30-day mortality
                                          Medicare patients.***
                                         <bullet> Heart Failure 30-day
                                          mortality Medicare
                                          patients.***
Patients' Experience of Care...........  <bullet> HCAHPS patient
                                          survey.***
------------------------------------------------------------------------
*Measure included in 10 measure starter set.
**Measure included in 21 measure expanded set.
***Measure added in CY 2007 OPPS final rule.

    Comment: One commenter stated that CMS' proposal to expand the 
surgical infection set, add a 30-day mortality measure, and add patient 
experience (HCAHPS) are consistent with priorities it suggested for the 
hospital measure set.
    Response: CMS adopted the SCIP Infection 2 measure, the HCAHPS 
survey measure, AMI and Heart Failure 30-Day Mortality for Medicare 
Patients in the CY 2007 OPPS final rule (71 FR 68201) for the FY 2008 
update.
    Comment: One commenter applauded CMS' decision to add two 
additional SCIP measures, SCIP-VTE 1 and SCIP-VTE 2, to the RHQDAPU 
program. The commenter believed that the addition of these measures 
will help improve quality of care for Medicare beneficiaries and reduce 
the risk of postoperative complications associated with VTE (venous 
thromboembolism) occurring after approximately 25 percent of all major 
surgical procedures performed without prophylaxis. The commenter noted 
that VTE is preventable through the use of well-researched measures of 
established efficacy and believed such prophylactic measures should be 
applied in settings beyond surgical ones. For example, the commenter 
encouraged CMS to include safety measures relating to VTE as medical 
prophylaxis to the RHQDAPU program.
    Response: We appreciate the commenter's support of CMS' decision to 
add SCIP VTE-1 and SCIP VTE-2 to the RHQDAPU program. CMS recognizes 
the commenter's suggestion that CMS should include safety measures 
relating to VTE as medical prophylaxis to the RHQDAPU program. The NQF 
is currently conducting an evaluation of VTE measures that was 
sponsored by the Joint Commission. A variety of VTE measures are 
currently being evaluated and tested and we are supportive of this 
evaluation to test additional VTE measures. CMS hopes that these 
evaluations will result in VTE measures that may be considered for 
RHQDAPU in the future.
    Comment: One commenter asked that CMS clarify the AMI topic. The 
commenter stated that under the Joint Commission's requirements, 
starting with 3rd quarter 2006, hospitals are required to submit data 
on PCI received within 90 minutes of hospital arrival versus the 120 
minute criteria for the AMI topic. However, the current document lists 
RHQDAPU program measures for 2007 (72 FR 24804) and 2008 and 2009 (72 
FR 24804) and includes the criteria of 120 minutes instead of 90 
minutes.
    Response: We acknowledge NQF has changed its endorsement of the PCI 
measure from 120 minutes to 90 minutes of hospital arrival. We also 
acknowledge that the Joint Commission has changed its reporting 
requirement for the PCI measure to correspond with the NQF endorsement. 
Although we generally look to the NQF as an appropriate consensus-
building entity that endorses many quality measures we believe would be 
appropriate for inclusion in the RHQDAPU program, NQF endorsement of a 
particular measure, or an NQF change regarding endorsement of a 
particular measure, does not automatically lead to an immediate 
adoption of a measure or a change in our definition of a measure for 
purposes of the RHQDAPU program. At this time, we are not adopting this 
change in this final rule with comment period. However, if we believe 
that the

[[Page 47348]]

NQF change is an appropriate change for the RHQDAPU program, we would 
expect to adopt this change through a future rulemaking.
    Comment: One commenter commended CMS for publishing the FY 2008 
reporting measures as part of the CY 2007 OPPS final rule. The 
commenter finds the ability to comment and plan a year in advance very 
helpful. The FY 2008 IPPS proposed rule included five new measures for 
FY 2009--four process and one outcome measure. The commenter commended 
CMS for putting these measures forth in the proposed rule because it 
will give hospitals time to plan and establish proper data collection 
mechanisms.
    Response: We appreciate the commenter's support and we will 
continue to provide the public with as much notice as possible when 
adopting new measures in the future.
    Comment: One commenter believed that the current Heart Attack 
(Acute Myocardial Infarction) measures do not reflect the current 
standard of care. The commenter believes that these measures require 
some modification in order to reflect available clinical evidence. The 
commenter also encouraged CMS to consider adopting a system whereby 
hospitals that participate in heart registries are deemed to have 
submitted and met necessary baselines for the AMI measures.
    Response: The current performance measures for assessing quality of 
care for acute myocardial infarction were endorsed by the National 
Quality Forum, and based on the joint performance measurement 
recommendations of the American College of Cardiology and the American 
Heart Association, two well-respected consensus-building entities. As 
clinical science changes, CMS will align and modify our performance 
measures.
    We agree that registries hold much potential to reduce data 
collection burden. However, before we could ``deem'' a hospital that 
participates in a registry to have met the RHQDAPU requirements for the 
AMI measures, as the commenter suggests, we would have to ensure that 
the specifications, including data definitions of the registry were 
sufficiently comparable to those used in the RHQDAPU program.
    Comment: One commenter stated that although the RHQDAPU AMI 
measures are important in improving AMI outcomes, studies have shown 
that they are not very effective at capturing the variation in short-
term 30-day mortality rates.
    Response: We acknowledge that many of the current process of care 
measures, including the AMI measures, are based on studies showing the 
relationship between the process of care and long-term patient outcomes 
(not necessarily 30-day mortality rates). We believe that, at the 
patient level, the measures are very important because they are 
positively related to outcomes. One reason why the current RHQDAPU 
program process measures are weakly correlated with the 30-day 
mortality measures is because there is a low variation of the process 
measures to explain the variation of the mortality measures. More 
importantly, the current set of process measures is only a small part 
of a broad spectrum of measures or factors that are relevant to 
outcomes. They are not expected to capture completely the variation in 
30-day mortality rates.
    Comment: One commenter stated that in addition to the current 
process measures, CMS should consider adopting measures that reflect a 
greater variety of processes and also outcomes. To that end, the 
commenter suggested that CMS should take a leadership role with 
stakeholders to develop consensus recommendations regarding the 
addition of new AMI quality measures under the RHQDAPU program. As the 
leading Federal agency in the development of quality measures for 
hospitals, the commenter believed CMS has a responsibility to keep 
abreast of changes in the standard of care, bring together the relevant 
stakeholders to build consensus, and act quickly and appropriately to 
update the quality measures for the RHQDAPU program.
    Response: In selecting the measures for the RHQDAPU program, CMS 
makes every effort to remain abreast of changes in clinical guidelines 
and standards of care. We work closely with the Joint Commission, the 
HQA, and the NQF, among others, in this effort. Specifically, we 
collaborate with technical expert panels that include clinician 
experts, specialty societies, practice guideline committees, and 
others. We work with relevant stakeholders in developing performance 
measures that reflect current standards of care. For example, the 
performance measures selected by CMS for inclusion in the RHQDAPU 
program to assess quality of care for acute myocardial infarction not 
only were endorsed by the National Quality Forum, but CMS also 
considered the recommendations of a joint performance measurement 
committee of the American College of Cardiology and the American Heart 
Association. Similar technical panels exist for all of the current 
RHQDAPU process measure sets.
    We are not adopting any other new RHQDAPU measures for FY 2008.
3. New Quality Measures and Program Requirements for FY 2009 and 
Subsequent Years
a. New Quality Measures for FY 2009 and Subsequent Years
    In the FY 2008 IPPS proposed rule (72 FR 24805), we proposed to add 
1 outcome measure and 4 process measures to the existing 27 measure set 
to establish a new set of 32 quality measures to be used for the FY 
2009 annual payment determination. We proposed to adopt these measures 
a year in advance in order to provide additional time for hospitals to 
prepare for changes related to the RHQDAPU program. We proposed to add 
the following quality measures for the FY 2009 RHQDAPU program:
    <bullet> Pneumonia 30-day Mortality (Medicare patients)
    <bullet> SCIP Infection 4: Cardiac Surgery Patients with Controlled 
6AM Postoperative Serum Glucose
    <bullet> SCIP Infection 6: Surgery Patients with Appropriate Hair 
Removal
    <bullet> SCIP Infection 7: Colorectal Patients with Immediate 
Postoperative Normothermia
    <bullet> SCIP Cardiovascular 2: Surgery Patients on a Beta-Blocker 
Prior to Arrival Who Received a Beta-Blocker During the Perioperative 
Period
    We stated that the above measures reflect our continuing commitment 
to quality improvement in both clinical care and patient safety. These 
additional measures also demonstrate our commitment to include in the 
RHQDAPU program only those quality measures that reflect consensus 
among the affected parties and that have been reviewed by a consensus 
building process. The proposed measures have been put forth by the HQA 
for inclusion in its public reporting set, contingent on endorsement by 
the NQF. (In the case of SCIP Infection 7, the HQA recently withdrew 
its previous support unless the measure receives NQF endorsement.) We 
stated that we anticipated that the NQF would endorse these measures 
prior to the publication of this final rule with comment period. 
Notwithstanding, we indicated that any measure that was not endorsed by 
that time would not be finalized in this final rule with comment 
period.
    We requested public comment on these five measures and indicated 
that we would finalize the FY 2009 RHQDAPU measure set in this final 
rule with comment period. However, as we explained, at this time we are 
only finalizing one of the additional measures we proposed to add as 
part of the complete FY 2009 measure set. We will further address 
adding additional

[[Page 47349]]

measures to the final FY 2009 measure set for the RHQDAPU program in 
the CY 2008 Outpatient Prospective Payment System (OPPS) final rule 
scheduled for publication in November 2007 and, if necessary, in the FY 
2009 IPPS proposed and final rules.
    Comment: Numerous commenters stated that they support CMS' 
continued focus on quality measures and value-based purchasing. In 
addition, the commenters stated that they were aware that the Deficit 
Reduction Act of 2005 expanded quality reporting requirements for 
hospitals and provided the Secretary with the discretion to add 
additional quality measures that reflect consensus among affected 
parties. In the proposed rule, CMS proposed to add five new measures 
and described the process for adding additional measures, and the 
commenters supported CMS' proposed addition of these five measures 
because they align with CMS' focus on measures that can be implemented 
successfully and which represent aspects of care that are important to 
patients, efficiency, effectiveness, and patient-centered care.
    Response: We appreciate the commenters' support of our continued 
focus on quality measures and value-based purchasing. Indeed, in 
adopting additional measures, we aim to choose measures that promote 
efficiency, effectiveness, and patient-centered care.
    Comment: One commenter stated that including four more SCIP 
measures will be time-consuming and will require more training for the 
data collectors and medical records coders. As for the fifth measure, 
Pneumonia 30-day mortality, the commenter noted that this will require 
no additional effort on its part since the data will come from Medicare 
claims data. The new risk adjustment methodology utilized for the AMI 
and HF 30-day mortality measures is an improvement on earlier 
methodology used for CMS mortality measures published in the 1980's. 
The commenter assumed the new risk adjustment methodology will be 
utilized for Pneumonia mortality.
    Response: We appreciate the time and effort required to abstract 
medical record information for quality measures while recognizing the 
vital utility of the information derived from abstraction to improve 
our nation's healthcare services. Throughout, we have encouraged 
hospitals to leverage the primary intent of the SCIP measures, namely, 
systems level change through the institution. For this reason, we 
believe that the optimal effect of SCIP will be to change the processes 
of care for surgical patients making the act of data acquisition a 
consequence of the delivery of care rather than an afterthought. To be 
specific, the additional measures require the answer to 10 questions: 
The answers to six questions are known prior to incision, the answers 
to two more are known in the post-anesthesia care unit (PACU), and the 
answers to the final two, required only for cardiac surgery patients, 
are known by postoperative day number two. In brief, the documentation 
of these questions should be coordinated with the entire surgical team 
to make collection easier and to serve as checks on the quality of 
surgical services.
    The commenter's assumption that AMI, HF, and pneumonia measures 
share common new risk adjustment methodology and confidence intervals 
for estimating three possible categories for calculation is correct. 
The three categories into which a hospital can fall based on this 
methodology are displayed on Hospital Compare as ``Better than U.S. 
National Rate,'' ``No Different than U.S. National Rate,'' and ``Worse 
than U.S. National Rate.''
    Comment: Several commenters appreciated and supported the focus on 
quality but opined strongly that CMS does not understand the resources 
and internal systems requirements not only to report but to actually do 
the work of improving care. The commenters stated that the number of 
measures is growing too quickly, from 10 to 21 to 27 to 32, in 4 years 
time, without any recognition for the work it takes to report and 
improve care. While the commenters appreciated the full year notice for 
new measures, the commenters were very concerned about the number of 
new measures added each year and suggested that CMS consider what it 
means for hospitals to garner the resources necessary to assess and 
improve care processes and to influence clinical practice changes to 
align with the evidence and to be able to report the measures.
    Response: We are aware of the burden on hospitals to abstract data 
to report the current measures of quality. There are ongoing efforts to 
define measures that can be based on claims (for example, AMI 
mortality), to reduce the burden of data collection on current process 
of care measures, and to learn how currently reported measures might be 
collected from a functional electronic medical record system. However, 
it is important for hospitals to continue to incorporate the process of 
data collection for the current measures into their routine of care. 
The incorporation of data collection into the hospitals' daily routine 
will ultimately reduce their overall burden. When making decisions 
about future measure requirements, CMS intends to continue to carefully 
consider the resources and internal systems a hospital will need to 
report measures and implement them into their standard of care.
    Comment: One commenter stated that adding monitoring of these 
measures does not help improve patient care, instead, it just makes 
sure that hospitals have good documentation. The commenter believed 
that organizations with small sample size can be at a disadvantage with 
the implementation of these measures.
    Response: We believe that careful and complete documentation is a 
very important facet of delivering quality and safe health care. Many 
quality improvement experts believe that even a few performance measure 
``failures'' provide enough information to develop quality improvement 
interventions. A single case that fails a performance measure may 
identify a flaw in the system of care that prevented the patient from 
receiving evidence-based care. In addition, we continue to look for 
ways to address concerns related to small sample sizes.
    Comment: One commenter did not believe that quality improvement has 
been addressed with the first set of 27 measures and that the data 
collection burdens of the current 27 and the five additional proposed 
for FY 2009 had not been addressed. The commenter noted that not every 
provider has all of this documentation electronically and that to 
gather this data requires more time and cost. The commenter requested 
that CMS evaluate whether the quality of care has been improved with 
the current measures before adding additional measures that may or may 
not improve quality.
    Response: We believe that there is substantial evidence that 
quality of care and patient outcomes have improved over the years that 
CMS has focused on hospital quality. Multiple published studies as well 
as the annual National Healthcare Quality Report that the Agency for 
Healthcare Research and Quality produces for Congress have highlighted 
the improvements in processes of care. These processes are very 
important at the patient-level in reducing mortality, improving quality 
of life, and reducing readmission. The NQF endorsement process also 
considers the impact of process measures on outcomes. NQF endorses 
process measures that possess a considerable evidence base between the 
process measure and patient outcomes. There has been a steady decline 
in hospital and 30-day rates of mortality for conditions such as AMI 
and

[[Page 47350]]

pneumonia which may be due in part to improvements in care for the 
current RHQDAPU process measures.
    We are aware that there is a burden of data collection for all of 
the RHQDAPU process measures. Few institutions have the ability to 
capture this data electronically and even those with fully integrated 
electronic medical records often have to resort to manual data 
collection to capture the information for the performance measures. 
There are ongoing efforts to work with vendors of electronic record 
systems to incorporate the data elements for the RHQDAPU process 
measures into their tools.
    Comment: Two commenters stated that CMS should continue to allow 
private sector organizations to have full access to provider 
performance information (numerator and denominator) from the Hospital 
Compare Web site. Many plans rely heavily on the all-payer data to 
populate their provider selection tools; withholding or limiting access 
to granular performance data would impose additional reporting 
requirements on providers.
    Response: A downloadable Microsoft Access database is available on 
Hospital Compare Web site and it is updated on a quarterly basis. It 
contains counts of each hospital's patients actually receiving each 
measure's process of care (that is, numerators) and counts of each 
hospital's patients eligible to receive each measure's process of care 
(that is, denominators) for hospitals represented on Hospital Compare. 
There are no plans to discontinue this service.
    Comment: One commenter supported the CMS RHQDAPU program that 
provides hospitals the opportunity to submit quality data. The 
commenter continued to support the reportable measures under the 
pneumonia topic, in particular the provision of adult smoking cessation 
counseling services, a clinical intervention in which respiratory 
therapists are acknowledged experts.
    Response: CMS continues to believe that the provision of preventive 
services such as smoking cessation counseling are important to 
improving patient outcomes and we encourage hospitals to develop 
systems approaches that would include team members such as respiratory 
therapists to provide this patient education.
    Comment: One commenter proposed that CMS study application of an 
exclusionary criterion to the 30-day pneumonia mortality measure in the 
presence of this ICD-9 Diagnosis Code for the index admission for 
pneumonia. Otherwise, the commenter believed that a hospital's 
pneumonia 30-day mortality rate will be unfairly represented in public 
reporting and annual payment determination because they may be caring 
for many pneumonia patients who are actually receiving CMO (comfort 
measures only).
    Response: We addressed this concern by taking each patient's health 
status on admission into consideration. Using inpatient and outpatient 
claims data for the year prior to admission, the pneumonia 30-day 
mortality measure model adjusts for a number of factors associated with 
the likelihood that patients are at the end of their lives, including 
protein-calorie malnutrition, metastatic cancer, dementia, and age. 
Hospitals with very sick patients, therefore, will be expected to have 
more deaths, and the model will adjust their risk-standardized 
mortality rate (RSMR) accordingly.
    In addition, we were careful in our approach to include information 
about each patient's status at admission and to not adjust for possible 
complications of the admission. Although some codes, by definition, 
represent conditions that are present before admission (for example 
cancer), other codes and conditions cannot be differentiated from 
complications that occur during the hospitalization (for example 
infection, shock, and transition to comfort care-only or hospice 
status). Excluding patients from the analysis who transition to comfort 
care or hospice may inadvertently reward hospitals that poorly manage 
their patients.
    Comment: One commenter supported CMS' decision to add a SCIP 
measure related to glycemic control, SCIP Infection 4: Cardiac Surgery 
Patients with Controlled 6AM Postoperative Serum Glucose and noted that 
there is clinical evidence to support the importance and contribution 
of postoperative glycemic control for cardiac surgery patients. The 
commenter also suggested that CMS work with the quality organizations 
and other stakeholders to develop measures to assess glycemic control 
in all hospital inpatients.
    Response: We appreciate the supportive comment and we look forward 
to continuing to review the evidence base for glycemic control to 
potentially expand the suite of measures to accommodate other patient 
populations. With respect to SCIP infection 4, we are deferring 
finalizing this measure until it receives NQF endorsement and will 
further address its inclusion in the FY 2009 RHQDAPU measurement set 
(effective with discharges CY 2008 discharges) in the CY 2008 OPPS 
final rule which is scheduled for publication in November 2007.
    Comment: Two commenters strongly supported the expansion of the 
quality items to include additional anti-infection process measures. 
For FY 2008, the commenter supported the inclusion of SCIP Infection 4, 
SCIP Infection 6, and SCIP Infection 7.
    Response: We appreciate the comment and support for the proposed 
inclusion of SCIP Infection 4, SCIP Infection 6, and SCIP Infection 7 
in the FY 2009 RHQDAPU measurement set (effective with CY 2008 
discharges). However, we are not adding these measures in this final 
rule with comment period, because they have yet received the 
endorsement of a consensus building entity such as the NQF, which we 
rely upon to ensure that our selection of each RHQDAPU measure is an 
appropriate one for the program. We intend to add SCIP Infection 4 and 
SCIP Infection 6 to the FY 2009 measurement set (effective with CY 2008 
discharges) in the CY 2008 OPPS final rule which is scheduled for 
publication in November 2007, if these measures have received NQF 
endorsement. With regard to SCIP Infection 7, we believe it is feasible 
and appropriate to wait to adopt this measure until the NQF endorses 
it.
    Comment: Three commenters recommend that SCIP Infection 7 be 
withheld from the RHQDAPU program until it is NQF approved.
    Response: We appreciate the importance of relying on the 
endorsement of a consensus building entity such as the NQF to assure 
broad consensus and reliability for our measures. SCIP Infection 7 is 
still pending NQF endorsement, and as a result, we are not finalizing 
the adoption of this measure for the RHQDAPU program at this time. We 
believe it is feasible and appropriate to wait to adopt this measure 
until a consensus building entity such as the NQF endorses it. When CMS 
determines adoption of this measure is timely, we will do so through 
the rulemaking process. We will address the status of this measure in 
the CY 2008 OPPS final rule.
    Comment: One commenter requested that SCIP-Cardiovascular-2 not be 
required. The commenter indicated that this measure has good intentions 
but, as written, is very difficult to abstract. The commenter added 
that if the definition of perioperative end time is edited to be more 
consistent, the commenter would welcome this measure. Until then, the 
commenter feared it would only cause more problems then it would solve. 
The commenter gives beta-blockers after

[[Page 47351]]

surgery--but not likely within the nebulous end time of the 
perioperative period. Because the commenter believed that this 
definition was a convoluted definition, it stated that there was no 
easy way to create policies or procedures to address this measure in a 
reasonable and logical manner.
    Response: We are not adopting this measure at this time because it 
has not yet received the endorsement of a consensus building entity 
such as the NQF. However, we continue to believe that this measure is 
appropriate because the peri-operative period for the SCIP cardiac 
measures is defined as 24 hours prior to surgical incision through 
discharge from the post anesthesia care/recovery area. Beta blockers 
have been shown to reduce complications in patients at risk for 
cardiovascular complications. Patients with a history of myocardial 
infarction who have beta blocker therapy initiated and maintained show 
a 20-30 percent reduction in subsequent cardiac events. Studies show 
that mortality from cardiac events is reduced substantially when beta 
blocker therapy is given in the peri-operative period. If SCIP 
Cardiovascular-2 receives NQF endorsement, we intend to add it for 
purposes of the FY 2009 RHQDAPU program in the CY 2008 OPPS final rule.
    After careful consideration of the public comments received, we are 
taking the following actions with respect to the five proposed 
measures: We are adopting as final the Pneumonia 30-day Mortality 
measure we proposed. We intend to add SCIP Infection 4, SCIP Infection 
6 and SCIP Cardiovascular-2 to the FY 2009 RHQDAPU measurement set 
(effective with CY 2008 discharges) in the CY 2008 OPPS final rule 
which is scheduled for publication in November 2007 if these measures 
have received NQF endorsement. We are not adopting the proposed SCIP 
Infection 7 measure in this final rule with comment period. We believe 
it is feasible and appropriate to wait to adopt this measure until the 
NQF endorses it. When CMS determines adoption of this measure is 
timely, we will finalize its adoption for the RHQDAPU program through 
the rulemaking process.
    The following table contains a list of 18 measures and 8 measure 
sets from which we proposed that additional quality measures could be 
selected for inclusion in the RHQDAPU program. It includes measures and 
measure sets that highlight CMS' interest in improving patient safety 
and outcomes of care, with a particular focus on the quality of 
surgical care and patient outcomes. In order to engender a broad review 
of potential performance measures, the list includes measures that have 
not yet been considered for approval by the HQA or received endorsement 
by the NQF consensus review process for public reporting. It also 
includes measures developed by organizations other than CMS as well as 
measures that are to be derived from administrative data (such as 
claims) that may need to be modified for specific use by the Medicare 
program if implemented under the RHQDAPU program.
    We solicited public comment from a broad set of stakeholders on the 
measures and measure sets that were listed, as well as any critical 
gaps or ``missing'' measures or measure sets. We specifically requested 
input concerning the following:
    <bullet> Which of the measures or measure sets should be included 
in the FY 2009 RHQDAPU program or in subsequent years?
    <bullet> What challenges for data collection and reporting are 
posed by the identified measures and measure sets? What improvements 
could be made to data collection or reporting that might offset or 
otherwise address those challenges?

 Possible Measures and Measure Sets for the RHQDAPU Program for FY 2009
                      and Subsequent Years Measure
------------------------------------------------------------------------
                      Measure                 Clinical condition
------------------------------------------------------------------------
            Intensive Care Unit (ICU) Critical Care Measures
------------------------------------------------------------------------
1............  Stress Ulcer Disease   ICU/critical care.
                Prophylaxis.
2............  Urinary Catheter-      ICU/critical care.
                Associated Urinary
                Tract Infection For
                Intensive Care Unit
                (ICU) Patients.
------------------------------------------------------------------------
                          Readmission Measures
------------------------------------------------------------------------
3............  Readmission Heart      Efficiency/HF.
                Failure (HF) Within
                30 Days Rate--
                Medicare Only (CMS
                Methodology).
4............  Readmission (same      Efficiency/AMI.
                hospital) Acute
                Myocardial
                Infarction (AMI)
                Within 30 Days Rate.
5............  Readmission (same      Efficiency/PNE.
                hospital) PNE Within
                30 Days Rate.
6............  Readmission Within 30  Surgical Care.
                Days Of Surgery--
                Medicare Only (SCIP
                Global-2).
------------------------------------------------------------------------
      NQF--Nursing Sensitive Condition Set (Outcomes Measures Only)
------------------------------------------------------------------------
7............  Failure To Rescue--    Patient centered.
                Nursing Sensitive
                Measure.
8............  Pressure Ulcer         Patient centered.
                Prevalence--Nursing
                Sensitive Measure.
9............  Patient Falls          Patient centered.
                Prevalence--Nursing
                Sensitive Measure.
10...........  Patient Falls With     Patient centered.
                Injury--Nursing
                Sensitive Measure.
------------------------------------------------------------------------
                       Cancer (Inpatient) Measures
------------------------------------------------------------------------
11...........  Patients With Early    Cancer--Breast.
                Stage Breast Cancer
                Who Have Evaluation
                Of The Axilla.
12...........  College Of American    Cancer--Breast.
                Pathologists Breast
                Cancer Protocol.
13...........  Surgical Resection     Cancer--Colon.
                Includes At Least 12
                Nodes (ACOS-02).
14...........  College Of American    Cancer--Colon.
                Pathologists Colon
                And Rectum Protocol.
15...........  Completeness Of        Cancer--Colon.
                Pathologic Reporting
                (CCO-04).
------------------------------------------------------------------------
       Leapfrog Leaps, identified by IOM and Deficit Reduction Act
------------------------------------------------------------------------
16...........  Use Of Computerized    Patient Safety.
                Physician Order
                Entry (CPOE) Systems.
17...........  Use of Intensivists    Patient Safety.
                in ICUs/ ICU
                Physician Staffing
                (IPS).
18...........  Evidence-Based         Patient Safety.
                Hospital Referrals.
------------------------------------------------------------------------

[[Page 47352]]

 
 Measure Sets of Potential Interest Sets Under Active Review by National
                           Quality Forum (NQF)
------------------------------------------------------------------------
1............  Healthcare-Associated  Patient Safety.
                Infection measures--
                under consideration
                by the NQF National
                Voluntary Consensus
                Standards for
                Reporting of
                Healthcare-
                associated
                Infections Data
                Project.
2............  Readmission Rates by   Efficiency.
                Condition--under
                consideration by NQF
                National Voluntary
                Consensus Standards
                for Hospital Care:
                Additional
                Priorities, 2007
                Project.
3............  Average Length of      Efficiency.
                Stay (ALOS) by
                Condition--under
                consideration by NQF
                National Voluntary
                Consensus Standards
                for Hospital Care:
                Additional
                Priorities, 2007
                Project.
4............  AHRQ Quality           Patient Safety, various
                Indicators,            conditions.
                including Patient
                Safety Indicators--
                under consideration
                by NQF National
                Voluntary Consensus
                Standards for
                Hospital Care:
                Additional
                Priorities, 2007
                Project.
------------------------------------------------------------------------
            Measure Sets/Practices Previously Endorsed by NQF
------------------------------------------------------------------------
5............  Safe Practices for     Patient Safety.
                Better Healthcare.
6............  Serious Reportable     Patient Safety.
                Events in Healthcare
                (``Never Events'').
------------------------------------------------------------------------
                       Other Hospital Measure Sets
------------------------------------------------------------------------
7............  Hospital Emergency     Various.
                Department Measures.
8............  Vascular Surgery       Surgical Care.
                Complications (for
                Carotid
                Endarterectomy,
                Lower Extremity
                Bypass, Open Surgery
                Abdominal Aortic
                Aneurysm Repair,
                Endovascular
                Abdominal Aortic
                Aneurysm Repair).
------------------------------------------------------------------------

    Comment: Numerous commenters stated that CMS should only choose 
measures that have been selected by these two groups (NQF-endorsed, 
HQA-adopted).
    Response: We are committed to adopting NQF-endorsed and HQA-adopted 
measures whenever possible. Currently, the only measures that are 
publicly reported or tied to the annual payment update are those 
measures that are NQF-endorsed and HQA-adopted.
    Comment: Numerous commenters stated that CMS should look to the NQF 
goals as a framework for the types of measures that should be included 
in the RHQDAPU program.
    Response: NQF goals, priorities and measurement frameworks have 
been, and will continue to be, considered when we select measures to 
adopt for the RHQDAPU program.
    Comment: One commenter stated that CMS should also reiterate that 
it will follow the goals of the NQF in considering new measures in 
connection with future reporting under other voluntary initiatives. 
Included for future consideration should be measures that span multiple 
populations, for instance, pediatric asthma measures. By including 
these measures on the list of reportable measures, hospitals can submit 
the data to the Quality Improvement Organization (QIO) Clinical 
Warehouse, and report them on Hospital Compare even though the measures 
will not be included in the RHQDAPU program.
    Response: It is our intent to consider NQF goals and priorities 
when identifying measures for future reporting. In terms of reporting 
measures that are not RHQDAPU-required, we have in the past, and will 
most likely in the future, make public on Hospital Compare data 
pertaining to measures that we have asked hospitals to report under 
another voluntary reporting initiative but that are not, at the time, 
RHQDAPU-required. Since CMS plays an important role in the provision of 
health care services to multiple populations though the Medicare and 
Medicaid programs, the development of standardized performance measures 
that promote care for all populations is important, whether or not 
those measures are included in the RHQDAPU program.
    Comment: One commenter fully supported the mortality rate reporting 
and would like to see mortality measures for additional diagnoses 
included in the RHQDAPU program. The commenter stated that its 
hospitals would appreciate receiving reports on a quarterly basis to 
further inform care improvement efforts.
    Response: The methodology used to calculate the current risk-
standardized mortality rates requires one year of inpatient Medicare 
claims data plus one year of data on the patient's prior 
hospitalizations and outpatient care (Part A and Part B data). 
Quarterly reporting using the current methodology is not feasible and 
would likely not provide useful information on trends in mortality. 
Additional work is also needed to include additional diagnoses beyond 
AMI, HF, and pneumonia to validate the risk adjustment models using 
claims-based data.
    Comment: One commenter was concerned that CMS has not yet 
implemented hospital reporting for three Leapfrog Leap measures 
identified by the Institute of Medicine and included in the DRA--use of 
computerized physician order entry (CPOE) systems, use of intensivists 
in ICUs/ICU physician staffing, and evidence-based hospital referrals. 
The commenter urged that CMS implement these important measures of 
patient safety in FY 2008.
    Response: The Leapfrog measures are under consideration for 
inclusion in the RHQDAPU program in FY 2010 and subsequent years. 
However, while we believe that these measures are important in large 
institutions or academic centers, it is unclear that they are broadly 
applicable to the more than 3000 PPS hospitals that participate in the 
RHQDAPU program. In addition, these measures of structure have broad 
financial implications for hospitals such as the costs of implementing 
CPOE systems, the availability of trained intensivists in many 
communities, and the need for access to healthcare services in many 
regions of the country. For the majority of surgical services and 
almost all medical diagnoses, there is limited evidence to support 
improved patient outcomes based on hospital referral to high-volume 
hospitals. For a small number of operations or diagnoses, it may be 
reasonable to develop metrics for ``evidence-based referrals.'' We will 
continue to study these issues and will propose to adopt the Leapfrog 
measures if we believe they

[[Page 47353]]

are appropriate for the RHQDAPU program.
    Comment: Two commenters opposed the inclusion of the three 
structural measures supported by The Leapfrog Group. They indicated 
that these structural standards are best viewed as ``aspirational best 
practices'' (as The Leapfrog Group itself intended), as opposed to a 
national standard of care. Because the proposed standards represent 
``leaps'' beyond normal practices, the commenters stated that rural 
hospitals have not been asked by the Leapfrog Group to comply with the 
standards. In addition, they indicated that these measures are not NQF 
endorsed and HQA recommended for inclusion in the program.
    Response: We appreciate this comment. The purpose of the list of 
possible measures for FY 2009 and beyond is to elicit comment from a 
wide array of stakeholders. As we have stated, we are committed to 
using measures that are endorsed by a consensus building entity such as 
the NQF and supported by the HQA. We will consider this comment in 
future decisions about measures expansion.
    Comment: One commenter stated that it is not clear from the 
information provided in the proposed rule, how the patient safety 
measures 16, 17, and 18 would be reported and whether they would be 
reported on an annual basis. The commenter also stated that all 
measures currently reported for RHQDAPU are at the patient level, and 
these Leapfrog Leap Measures address structural components and, 
therefore, would require a different infrastructure to collect.
    Response: We appreciate these comments, and they highlight 
important operational questions that CMS must answer before it 
considers adding these measures in the future. We will consider data 
collection frequency and data infrastructure needs of these structural 
measures in our future measures expansion decisions.
    Comment: One commenter stated that it is critical to include the 
Joint Commission Mortality measure for ICUs in the RHQDAPU measure set. 
The Leapfrog Group Intensivist Physician Staffing Leap could be 
augmented by use of the Joint Commission ICU mortality measure now in 
the field.
    Response: We do not believe that the Joint Commission ICU mortality 
measure has been endorsed by a consensus building entity such as the 
NQF. CMS strives to use consensus based measures for inclusion in the 
RHQDAPU measure set, and NQF endorsement is only one of many possible 
methods to demonstrate this consensus basis.
    Comment: One commenter stated that a glaring weakness of the 
Leapfrog data is that they are self-reported and becoming ever more 
complicated, which will certainly lead to disparities in data 
interpretation. While it is a useful exercise for an individual 
provider to work through the Leapfrog questions, the commenter believed 
that it was ridiculous to assume that providers' responses can be 
compared to each other meaningfully.
    Response: The Leapfrog survey data is not one of the measures 
recommended by the IOM report, and we are not otherwise considering 
adopting it for the RHQDAPU program.
    Comment: Two commenters asked that as CMS moves forward with the 
initial expansion of these quality measures, as well as future 
measures, CMS be cognizant of the need for appropriate recognition of 
imaging technology within these measures. For example, the commenters 
supported CMS' efforts in adopting the current quality measures, such 
as the measure requiring that patients receiving a percutaneous 
coronary intervention receive the intervention within the first 120 
minutes of admission for myocardial infarction. The commenters state 
that Medicare beneficiaries can benefit greatly from this life-saving 
procedure and imaging equipment is intrinsic to performing this 
procedure. As CMS looks to the future and implements its value based 
purchasing program for Medicare, the commenters asked that appropriate 
imaging used during specific diagnostic and therapeutic procedures be 
properly addressed within the measures.
    Response: We are aware of the role that imaging technology can play 
in the delivery of quality healthcare and will, as appropriate, 
consider these technologies as measure sets and priority areas expand 
in the future. However, we are not aware of specific quality metrics 
that have focused on the type of imaging equipment that is used related 
to the current performance measures for hospital quality.
    Comment: One commenter believed that wherever possible, quality 
measures developed as part of the RHQDAPU program should be applied in 
other care settings through inclusion in the Physician Quality 
Reporting Initiative (PQRI) and the outpatient quality reporting 
program measure sets. The commenter believed it made sense for CMS' 
quality measures to be consistent across provider settings.
    Response: We agree and are involved in efforts to do just that. In 
particular, we are participating in an NQF group dealing with 
harmonization of measures across settings. In the future, we intend, as 
often as possible, to adopt measures that have been developed for one 
setting (for example, physician practices) in other appropriate and 
feasible settings (for example, hospital outpatient department). It 
makes sense to align the incentives for high quality care.
    Comment: One commenter urged CMS to take the leadership role with 
stakeholders to develop consensus recommendations for care coordination 
quality measures for adoption into the RHQDAPU program. In the absence 
of care coordination, patient safety issues, medication errors, and 
miscommunication can lead to suboptimal outcomes and increased costs, 
as documented by numerous studies. Care coordination is particularly 
important for vulnerable populations that have chronic health care 
needs, although everyone that suffers acute illness will need at least 
temporary care coordination on some level. The commenter believed that 
CMS should take the lead in encouraging the development of measures in 
this area because it likely would improve the outcomes among patients 
who receive care across different types of facilities and also should 
help reduce unnecessary expenditures for duplicative care as patients 
move between care settings.
    Response: This is an important comment and we could not agree more. 
There are ongoing efforts to develop a standard framework for quality 
improvement and quality assessment that addresses care transitions that 
is in part based on recently NQF-endorsed measures of care transition.
    Hospital performance on the 30-day mortality measures reflects both 
the quality of care during patients'' hospitalizations and the 
coordination of their care at discharge or transfer. By addressing 30-
day (rather than in-hospital) mortality and assigning the outcome for 
transfer patients to the first admitting hospital, the measures hold 
hospitals accountable for transitions in care to other settings and 
discharge planning. Actions taken at the admitting hospital, during a 
transfer, at a receiving hospital, and in outpatient settings after 
discharge all can affect 30-day mortality. CMS hopes this approach will 
encourage coordination between hospitals and their provider networks. 
CMS is also developing a readmission measure that will complement the 
mortality measure by promoting efforts to reduce unnecessary 
readmissions. Readmission rates are influenced by the quality of 
inpatient and outpatient care,

[[Page 47354]]

availability and use of effective disease management programs and the 
capacity of the health care system. Short-term readmission is almost 
always an adverse event for patients and expensive for the health care 
system. Measurement and dissemination of readmission rates, which are 
the joint responsibility of hospitals and clinicians, will create 
incentives to invest in interventions to facilitate transitions in care 
and improve patient outcomes.
    Comment: One commenter recommended that in order to ensure that 
patient needs are met across multiple providers, CMS should encourage 
consensus organizations to develop appropriate measures at the 
practice, group, hospital, or organizational level and that CMS should 
encourage the development of measures that address each of the 
following areas, identified by the NQF as ``essential components and 
subcomponents for which performance measures should be developed if 
care coordination is to be comprehensively measured and improved:''
    <bullet> Medical home for each patient;
    <bullet> Proactive plan of care and follow-up for each patient;
    <bullet> Use of standardized, integrated information systems;
    <bullet> Standardized data elements for patient's personal 
medication records;
    <bullet> Standardized data elements for medication reconciliation; 
and
    <bullet> Standardized care guidelines for transitions between care 
settings that include medication reconciliation and care plan and 
communication plan between medical team members, patients, and 
caregivers.
    Response: We appreciate this thoughtful comment. Although the 
recommendations are challenging to implement, we are committed to 
moving forward to develop measures that incorporate these types of 
goals and frameworks. Again, there are ongoing efforts to develop a 
standard quality framework based on measures of care transition between 
the hospital and the post-acute setting that are endorsed by one or 
more consensus building entities such as the NQF.
    Comment: One commenter stated that from an administrative point of 
view, it was worth pointing out that not all the potential new measures 
are included in the medical records consistently, for example, Stress 
Ulcer Disease Prophylaxis, Community Acquired Pneumonia, and American 
College of Surgeons protocols. Readmission rates would have to be 
captured from Medicare claims data.
    Response: For stress ulcer prophylaxis, since these medications do 
require a physician's signed order, we believe that they can always be 
found in the chart. Antibiotics for pneumonia or for prevention of 
surgical site infections also require a physician's order and we also 
believe they can be found in the chart. We agree that readmission rates 
would most likely be captured from Medicare claims data.
    Comment: One commenter stated that among the AHRQ data measures, 
Failure to Rescue is a poor measure of quality. The data come from 
administrative files, are subject to coding disparities, and do not 
adequately consider co-morbid or chronic conditions.
    Response: We proposed this measure and other AHRQ data measures for 
potential inclusion in future years to solicit public comment. We thank 
the commenter and will consider this comment in measure selection for 
future years.
    Comment: One commenter stated that for some of the possible 
measures identified for inclusion in the RHQDAPU program for FY 2009 
and subsequent years, the documentation exists in the medical record 
now but is not currently being abstracted. Thus, it would take 
considerable extra effort to find and report it. Another commenter had 
concerns regarding two ICU critical care measures--stress ulcer disease 
prophylaxis and urinary catheter-associated urinary tract infection. 
The commenter agreed that both are worthy subjects. However, in this 
commenter's institution, this information is on the medical chart and 
would require chart extraction, which is time-consuming and costly. The 
commenter stated that as CMS continues to expand the measures for 
hospital quality, it is import that it be recognized that there are 
costs to this process.
    Response: We recognize the burden and resources required for 
collection of data to report the measures of hospital quality included 
in the RHQDAPU program and will consider the burden when we select 
additional measures to adopt in the future. We also note that there are 
ongoing efforts to develop measures that do not require chart 
abstraction (for example, claims-based measures of mortality), efforts 
to streamline data collection tools, and efforts to incorporate the 
data requirements for many of these performance measures into 
electronic medical record tools.
    Comment: One commenter urged CMS to proceed to adopt additional 
infection prevention measures, regardless of whether they have been 
formally agreed to through the sometimes over-lengthy consensus 
process. Specifically, the commenter supported the inclusion of urinary 
catheter-associated urinary tract infection (UTI) for ICU patients as 
an outcome measure.
    Response: Whenever possible, we use measures that are based on 
high-quality scientific evidence, widely accepted clinical guidelines, 
and consensus recommendations endorsed by the National Quality Forum. 
We realize that at times this can create delays in implementing 
measures, but it ensures that all the relevant stakeholders, including 
relevant medical experts, have adequately reviewed the measures.
    Comment: One commenter urged CMS to turn its focus on outcome 
measures relating to issues other than hospital-acquired infections. 
The commenter supported the 30 day morality measures for AMI and Heart 
Failure for inclusion in the FY 2008 rule. The commenter also supported 
the other outcome measures listed for possible inclusion in FY 2009 and 
future. Specifically, the commenter supported the 30-day Pneumonia 
mortality measure, the four 30-day readmission measures, and the AHRQ 
quality and patient safety indicators.
    Response: This year, CMS will be publicly reporting data on 
measures of 30-day mortality for AMI and HF, and beginning next year 
will report the hospital 30-day pneumonia mortality we are adopting as 
final in this rule. There are ongoing efforts to develop measures of 
outcome such as hospital readmission and measures of inpatient care 
that focus on patient safety.
    Comment: One commenter was concerned about the readmission measures 
for acute myocardial infarction and pneumonia within 30 days at the 
same hospital and believed that by restricting these measures to the 
same hospital, an inappropriate incentive is created for these cases to 
be referred to a different hospital. The commenter believed that these 
measures should apply to both readmission to the same hospital or to 
another hospital where the readmission has occurred and believed that 
only by reviewing both statistics will one have a balanced view of what 
is happening with patients returning to any hospital within 30 days for 
the same condition.
    Response: We are considering readmission to any hospital in 
connection with the readmission measures that were identified in the 
proposed rule as possible measures for the RHQDAPU program for FY 2009 
and subsequent years.
    Comment: One commenter stated that, as with previous measures now 
being reported under the RHQDAPU program, it is important to have an 
initial data

[[Page 47355]]

collection period prior to a public reporting period to assess the 
reliability and validity of the measures and data collection processes. 
During the initial data collection period, many problems are uncovered 
and details can be worked through. The commenter believed that a number 
of the measures listed for consideration, however, remain far from 
being ready for field-testing.
    Response: We agree that the measures and measure set in the list of 
possible measures for FY 2009 and beyond are at different stages of 
development, and that not all can be used as early as FY 2009 without 
additional development.
    Comment: Two commenters requested that CMS address the deficit of 
measures relating to medical prophylaxis of VTE. Given the 
effectiveness of available prophylactic measures, the commenter also 
asks that CMS promote the development of a measure relating to VTE 
readmission. The commenters also asked CMS to promote the development 
of measures related to glycemic control for all inpatients. In 
recognition of the importance of coordinating care for a single patient 
across an array of providers, the commenters encouraged CMS to consider 
taking an active role in encouraging the development of measures 
relating to care coordination.
    Response: We appreciate this comment. The NQF is currently 
conducting an evaluation of VTE measures that was sponsored by the 
Joint Commission. A variety of VTE measures are being evaluated and 
tested and CMS is supportive of this effort.
    Comment: Several commenters strongly encouraged CMS to adopt 
measure 13, one of the possible cancer (inpatient) measures, for 
implementation under the RHQDAPU program in FY 2009, if not sooner. The 
commenters believed that incorporation of measure 13 would send the 
message that adequate lymph node evaluation of at least 12 nodes is 
critical to patient care and would result in better outcome with 
increased survival for stage II and III colon cancer patients and noted 
that the evaluation of at least 12 lymph nodes is critical in 
determining colon cancer patient prognosis, planning for treatment 
options, and is associated with increased survival. One commenter 
supported the consideration of the number of lymph nodes evaluated as a 
measure of the quality of colon cancer care.
    Response: We appreciate these comments, and agree that this measure 
shows much potential for future adoption in the program to improve 
quality of care for colon cancer patients. As we have stated, we are 
committed to using measures that are endorsed by a consensus building 
entity such as the NQF and supported by the HQA. Our current process 
for measure adoption includes consideration of measures that can be 
implemented nationally and have been endorsed by the NQF. We are 
constantly reviewing and updating our portfolio of quality measures to 
incorporate such new and innovative measures that speak directly to our 
goal of improving the quality of care for our beneficiaries.
    Comment: Two commenters stated that CMS should consider computer-
assisted navigation of surgical procedure measures. The commenters also 
state that CMS encourages hospitals to report the computer assisted 
surgery codes (00.31; 00.32; 00.33; and 00.34) when the technology is 
used with total joint procedures. The commenters also encouraged CMS to 
remind hospitals to code for computer-assisted navigation surgery when 
it is used to encourage more accurate billing and charges for computer-
assisted surgery for total joint procedures and more complete data for 
analysis and DRG assignment. This is important because of the need for 
more accurate data to analyze the impact of navigation on improved 
patient outcomes.
    Response: We will consider this measure in future measures 
expansion decisions. Computer-assisted surgery is in its infancy and we 
are sure there will be opportunity to design quality measures for this 
adjunctive technique as the evidence base grows. We encourage complete 
and accurate coding for all procedures and CMS has a very proactive 
program to promote that at many levels. Accurate coding is also 
critical to producing valid measure estimates of surgical process 
measures, since these surgical procedure codes are used as one data 
element to define the population of patients eligible to receive 
surgical processes of care measured. We agree that the claims database 
represents a tremendous opportunity to understand clinical patterns in 
computer-assisted surgery.
    Comment: One commenter stated that in keeping with the continued 
expansion of quality measures and the appropriate criteria that CMS has 
specified, CMS should add computer-assisted surgery to the list of 
inpatient quality measures. The commenter indicated that computer-
assisted surgery improves outcomes and often reduces length of stay. 
However, the commenter added, the capital equipment needed for these 
procedures requires an initial investment from the hospital. The 
commenter believed that the new quality measures are therefore ideally 
suited for this situation; creating a quality measure for computer-
assisted surgery will award hospitals for prioritizing patient care, 
clinical outcomes, and long-term efficiency over short term financial 
interests.
    Response: Computer-assisted surgery is in its infancy and we are 
sure there will be opportunity to design quality measures for this 
adjunctive technique as the evidence-base grows. For the most part, CMS 
SCIP measures are designed to improve the quality of systems of 
perioperative care delivery. As we have stated, we are committed to 
adopting consensus-based and evidence-based measures for the RHQDAPU 
program.
    Comment: Three commenters recommended that CMS evaluate whether the 
measures currently utilized are capturing improvements in quality and 
ensure that additional measures will result in meaningful quality 
improvements rather than merely increased administrative burden by 
hospitals without measurable improvement in patient care or results.
    Response: The current RHQDAPU process measures are based on strong 
evidence linking the process measure (for example, giving an aspirin at 
arrival) to improved patient outcomes. The individual process of care 
measures are based on studies that have shown, at the patient level, 
that providing the process improves patient outcomes. The 30-day 
mortality measures have been validated against medical record based 
estimates of 30-day patient mortality. The HCAHPS measures have been 
extensively tested in pilot studies. All of the process and mortality 
measures that are currently utilized have been reviewed through 
technical expert panels made up of representatives of topic-specific 
specialty societies and clinical experts in the field. The NQF has 
endorsed all the current RHQDAPU measures that are publicly reported. 
We agree that there is a need to focus on additional measures that 
evaluate overall quality of the entire system providing care to the 
patient (for example, readmission, care transitions).
    Comment: Two commenters strongly agreed with CMS' consideration of 
the ICU measures for FY 2009 and subsequent years, however, they 
strongly disagreed with the following measures:
    <bullet> Readmission Measures--this represents a burdensome data 
collection for hospitals. Data must be derived from medical records as 
there is not an effective mechanism for identifying readmissions using 
administrative data.

[[Page 47356]]

    <bullet> Nursing Sensitive Condition Set--these measures require 
chart abstraction to verify and are far from ready for implementation.
    <bullet> Inpatient Cancer Measures--inpatient cancer treatment is 
low volume and would result in small numbers of reported cases. This 
leads to low statistical value.
    <bullet> Leapfrog Measures--hospitals have been reporting these 
measures for some time, yet they have limited value in assessing 
quality.
    Response: The readmission measures will most likely be produced 
using Medicare administrative data. We are considering the other issues 
raised by the commenters as we evaluate these measures for subsequent 
years.
    Comment: One commenter believed that health care quality 
improvement programs should adopt standard quality measures that are 
developed with the involvement of pharmacists, are evidence-based, and 
promote the demonstrated role of pharmacists in improving patient 
outcomes.
    Response: We agree that pharmacists play an important role in the 
provision of high quality care to patients. Representatives of the 
American Society of Healthsystem Pharmacists have played an important 
role in the development of the Surgical Infection Prevention Project 
and the subsequent Surgical Care Improvement Project. Pharmacists play 
an important role on many of the guideline committees upon which many 
of the evidence-based performance measures for national implementation 
are developed.
    Comment: Three commenters urged CMS to carefully evaluate the value 
of the measures considered for future reporting and recommended that 
measures be evidence-based, contribute to the comprehensiveness of 
performance measurement, be under a hospital's control, and account for 
potential unintended consequences.
    Response: Whenever possible, we use only measures which have a 
strong evidence base and have been endorsed by a consensus building 
entity such as the NQF. We maintain the evidence base by conducting 
frequent literature reviews. If new literature shows the measure is no 
longer valid or is leading to unintended consequences, we will take 
appropriate action to modify or suppress the measure or to retire the 
measure through future rulemaking. We maintain a process for continued 
enhancements and updates as clinical evidence changes.
    Comment: One commenter commended CMS for considering whether to 
include breast cancer as one of the clinical conditions under the 
proposed new quality measures for FY 2009 and subsequent years and 
requested that CMS allow manufacturers of advanced therapies involved 
in the treatment of breast cancer to be involved in the development of 
the quality measures.
    Response: Any performance measures that are developed will be based 
on published evidence and guidelines for care, with the input of 
clinical experts.
    Comment: One commenter encouraged the development and application 
of measures of resource use, such as the 30-day readmission rates that 
are included in the proposed table of possible measures and measure 
sets for FY 2009 and subsequent years. The commenter believed that 
reducing potentially avoidable readmissions should be a part of the 
efforts to increase the value of health care because it reduces 
unnecessary spending for the Medicare program and enhances the quality 
of care for beneficiaries.
    Response: We agree that measures such as readmission rate provide 
additional information, in combination with the other quality measures, 
on the quality of care provided in hospitals.
    Comment: One commenter was concerned about the choice of length of 
stay as a resource use measure because it does not necessarily align 
with improving transitions from the inpatient setting to other care 
settings or to home. The commenter believed that, ideally, Medicare's 
payment systems should provide an incentive to use the most efficient 
mix of services possible during and after a hospital stay. The 
commenter added that rewarding below-average hospital lengths of stay 
through a quality incentive payment program would strengthen the 
incentive to transfer patients to a post-acute setting as quickly as 
possible, without regard for whether this is the most efficient course 
of treatment for the overall episode of care. The commenter believed 
that such a measurement may conflict with hospitals' efforts to avoid 
readmissions, if doing so would lengthen patients' initial stays.
    Response: We appreciate this comment, and will consider in future 
measures expansion decisions. We understand that a comprehensive 
estimate of hospital quality and efficiency would assess both length of 
stay and balancing measures that addressed hospital readmission and 
utilization of ambulatory care resources.
    Comment: One commenter recommended that HQA determine the measures 
or measure sets to be included in FY 2009, and develop an 
implementation schedule for subsequent years. One commenter believed 
that in order for it to provide comments and recommendations on measure 
sets of potential interest within the table, more information would be 
needed than was available in the proposed rule (for example, Nursing 
Sensitive Condition Set).
    Response: CMS ultimately decides on the measures for inclusion in 
the RHQDAPU program. However, CMS solicits input from the HQA before 
setting selected priorities for hospital performance measure 
implementation in the RHQDAPU program. The HQA has proposed to CMS 
potential measures on a timeline for implementation in the future.
    Comment: One commenter urged CMS to rapidly incorporate additional 
measures for FY 2009 to offer a more robust dashboard of publicly 
reported measures and strongly supported the infusion of efficiency, 
outcome, outpatient, care coordination, patient safety, and structural 
measures into the RHQDAPU program. The commenter also strongly 
supported the development of measures to assess equity in order to 
reduce health care disparities and encouraged the provision of quality 
care for at-risk populations.
    Response: We agree with the commenter. There are ongoing efforts to 
develop new measures to address efficiency of care, outpatient 
department performance, care coordination, and patient safety. Because 
there are few measures that have been developed and thoroughly tested 
for validity and reliability on a national scale, it will take some 
time to adequately test new measures and obtain the endorsement of 
these measures from a consensus building entity. We also have 
considerable interest in reducing disparities in care through 
performance measurements and incentives. There are ongoing evaluations 
to determine if some of the disparities on performance for the hospital 
quality measures represent disparities by group within a specific 
hospital, or disparities across all groups between hospitals.
    Comment: One commenter stated that composite measures increase the 
meaningfulness of health care performance information and are critical 
to help consumers integrate complex information into their decision 
making and that CMS should move rapidly to report composite measures on 
the Hospital Compare Web site while retaining the ``drill down'' 
function to permit a more granular assessment of performance.
    Response: We interpret the term composite measures to mean single 
combined measures calculated from

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multiple individual measures submitted by hospitals. Composite measures 
might include both measures listed in RHQDAPU requirements and non-
RHQDAPU measures voluntarily reported by hospitals. While it seems that 
composite measures may provide information that is more meaningful to 
consumers, there has not been extensive testing of this premise. CMS is 
soliciting input from the HQA on the issue of reporting composite 
measures of care on the Hospital Compare Web site. For the RHQDAPU 
program, CMS expects to continue to require hospitals to submit 
individual measures that would comprise any composite measure 
calculated from these individual measures. CMS and its partners expect 
to benefit from the work on composite measures that has been done in 
the Premier Hospital Quality Incentive Demonstration and elsewhere.
    Comment: Two commenters stated that the NQF Nursing Sensitive 
Measurement Set and measures that access the care provided to 
``transfer patients'' may be applicable to small and rural hospitals, 
and hoped that CMS will act favorably on such measures to broaden the 
ability of all hospitals to participate in public reporting and to 
increase the consumer appeal of the Web site. The commenter also 
believed that reporting measures for the outpatient setting-Emergency 
Room and ambulatory surgery on the Hospital Compare Web site would be 
responsive to consumer and purchaser needs.
    Response: We are engaged in efforts to broaden the hospital quality 
measure set to include measures appropriate to the outpatient hospital 
setting, including care provided to ``transfer patients'' currently 
excluded from RHQDAPU heart care measures. We believe that these 
measures are useful for all hospitals that treat and subsequently 
transfer, regardless of hospital size and urban/rural setting. CMS 
plans to begin reporting outpatient/ambulatory care measure results on 
the Hospital Compare Web site in the near future.
    Comment: One commenter believed that CMS needed to evaluate the 
resource impact on providers by requiring the collection and reporting 
of additional abstracted measures such as the Intensive Care and Cancer 
measures and that these specifications are old and were not implemented 
due to complexity of data extraction. The commenter believed that CMS 
should not require hospitals to collect additional measures on top the 
current requirements. The commenter stated that hospital spend all 
available resources to collect data on Heart Attack, Heart Failure, 
Pneumonia, and SCIP measures. The commenter wanted CMS to consider the 
retirement and/or rotation of measures to lessen future data collection 
burden on hospitals.
    Response: We are aware of the burden of data collection for all of 
the RHQDAPU measures. The burden of data collection is considered with 
the implementation of any new measure set. Few institutions have the 
ability to capture most quality data electronically and even those with 
fully integrated electronic medical records often have to resort to 
manual data collection to capture the information for the performance 
measures. There are ongoing efforts to work with vendors of electronic 
record systems to incorporate the data elements for the RHQDAPU 
measures into their tools. There are ongoing discussions about how to 
retire measures from reporting when high rates of improvement have been 
achieved.
    Comment: One commenter stated that CMS should consider prioritizing 
the implementation of administrative measures over measures requiring 
abstracted data from the medical record and that CMS needs to continue 
to test these administrative measures prior to the public reporting. 
The commenter believed that the process for introducing public 
reporting with a dry run hospital preview period for Heart Attack (AMI) 
and Heart Failure 30-day mortality measures should continue as standard 
practice.
    Response: We recognize that adopting measures for the RHQDAPU 
program that use administrative data, instead of abstracted data, has 
its advantages, including decreased data collection cost. However, 
there are also many challenges associated with using administrative 
data for quality measurement and reporting, including risk adjustment, 
differentiating performance between hospitals, and minimizing time lag 
between delivery of care and public reporting. We plan to develop 
additional administrative data-based measures.
    Comment: One commenter asks that CMS consider adding the stroke 
measure set developed by the Stroke Performance Measures Consensus 
Group to the RHQDAPU program for FY 2009 and to the new hospital value 
based purchasing program when it is approved and implemented by CMS.
    Response: We agree that the stroke measure set is a potentially 
useful addition to the RHQDAPU program. The quality measurement 
collaboration between the American Heart Association/American Stroke 
Association, along with CDC and the Joint Commission has agreed to a 
common set of 10 performance measures that were designed for 
certification of stroke centers. We are currently evaluating the list 
of 10 measures to determine if any are suitable for inclusion in the 
RHQDAPU program and the Hospital Compare Web site. We note, however, 
that the RHQDAPU program applies to all IPPS hospitals, not just 
certified stroke centers.
    Comment: One commenter urged CMS to develop a policy to harmonize 
measures which relate to payment, such as the NQF's move from a four 
hour timeframe for initial antibiotic administration for pneumonia 
patients to a six hour timeframe. The commenter believed that CMS is 
still requiring four hours. NQF made this change due to clinical 
concerns that patients whose pneumonia diagnoses were not yet confirmed 
were receiving unnecessary antibiotics, which is a national healthcare 
problem.
    Response: We appreciate this comment, and are aware of the current 
NQF endorsement status of the six hour pneumonia measure. This 
endorsement occurred after publication of the FY 2008 IPPS proposed 
rule. CMS will evaluate this change, and if we believe it is an 
appropriate one for the RHQDAPU program, will align this measure with 
the NQF's current endorsed measure.
    Comment: Several commenters expressed concerns with the abstraction 
instruction in the CMS/The Joint Commission National Hospital Quality 
Measure Specifications Manual that the medical charts be abstracted at 
``face-value.'' The medical chart is written for medical persons and 
should be taken in the context of medical care. The most troublesome 
aspect of the ``face value'' rule is that the commenter was alerted to 
it in April and told that it would apply back to October discharges. 
The rule change caused substantial rework for the chart abstractors. A 
commenter suggested that providers receive the specifications for 
abstraction before the time period for which they apply.
    Response: The ``face value'' instruction cited by the commenter was 
included in the specifications manual published in June 2006, 
approximately 120 days prior to the initial October 1, 2006 discharges. 
The later communication by CMS was intended to alert hospitals about 
the existing abstraction instructions already published on the 
QualityNet Web site. The RHQDAPU chart audit validation requirement 
uses independent reabstraction of medical charts by CMS contractor 
abstractors to assess abstraction accuracy. The CMS

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abstraction contractor is not associated with the hospital and is not 
intimately involved in providing the care to the patient referenced in 
the medical chart, and must abstract the data elements using only the 
documentation included in the medical record. CMS and The Joint 
Commission coauthor the specifications manual to provide the same set 
of explicit instructions to all parties, hospitals and CMS abstraction 
contractors. The ``face value'' provides explicit instruction that 
matches the instructions that CMS provides to its abstractors.
    Comment: One commenter suggested that CMS add the NQF-endorsed 
measure ``Anti-platelet medications at discharge for Cardiac Surgery'' 
to the hospital data reporting requirements for FY 2008. This measure 
is very different from the measures SCIP Cardiovascular-2: Surgery 
Patients on a Beta-Blocker Prior to Arrival, and the two AMI measures 
Aspirin at Arrival, and Aspirin Prescribed at Discharge. Aspirin and 
anti-platelet therapy are clinically very different. NQF has endorsed 
``Anti-platelet medications at discharge for Cardiac Surgery.''
    Response: We will consider this comment in our future decisions to 
expand the RHQDAPU program's list of measures. We understand that 
current SCIP initiatives related to cardiac surgery do not focus on 
discharge medications at this time, and must consider factors including 
the following: the number of surgeries affected by the measure; the 
relative strength of evidence related to improving outcomes, and 
relative data collection burden.
    Comment: One commenter recommended that CMS continue to expand to 
new disease states (cancer measures) as well as focus on efficiency 
measures (Average Length of Stay by Condition), surgical care, and 
patient safety measurement.
    Response: CMS is continuously working on developing new measures 
and is considering the pros and cons of expanding RHQDAPU measures to 
include measures related to disease processes such as ESRD, diabetes, 
asthma, and cancer.
    After careful consideration of the comments received regarding the 
18 measures and eight measure sets we set out in the FY 2008 IPPS 
proposed rule that could be included in the RHQDAPU program for FY 2009 
or subsequent years, we have decided not to adopt any of these measures 
or measure sets for FY 2009. As discussed above, we will continue to 
consider some of these measures and measure sets for future years.
b. Data Submission
    In order to be eligible for the full FY 2009 market basket update, 
we proposed that hospitals be required to submit data on 32 measures 
(the 27 existing measures plus the 5 proposed new measures). The 
technical specifications for this requirement are published in the CMS/
Joint Commission Specifications Manual for National Hospital Quality 
Measures. This manual can be found on the QualityNet.org Web site.
    For the additional SCIP measures that we proposed to add in the FY 
2008 IPPS proposed rule, (SCIP Infection 4, 6, and 7 and SCIP-
Cardiovascular-2), hospitals would be required to submit data to the 
QIO Clinical Warehouse starting with discharges that occur in CY 2008. 
We proposed that the deadline for hospitals to submit this data for 
first calendar quarter of 2008 would be August 15, 2008. Data must be 
submitted for each subsequent quarter by 4.5 months after the end of 
the quarter.
    We proposed this time period to allow hospitals sufficient time to 
prepare for the data collection. The three SCIP Infection measures that 
we proposed to include for FY 2009 were added to the Manual in version 
2.0, effective with third calendar quarter of 2006 (3Q06) and the 
proposed SCIP Cardiovascular measure was added in version 2.1d of the 
Manual, effective with fourth calendar quarter of 2006 (4Q06). 
Hospitals may report data on these measures for discharges prior to CY 
2008 discharges, if they so choose.
    For the proposed Pneumonia 30-day mortality measure, we proposed to 
use claims data that are already being collected for index 
hospitalizations to calculate the mortality rates. As is the case with 
the other 30-day mortality (outcome) measures already associated with 
the RHQDAPU program (AMI, HF), hospitals would not need to submit 
additional data. Claims data submitted to CMS for index 
hospitalizations occurring from July 2006 through June 2007 (3Q06 
through 2Q07) would be used to calculate the Pneumonia 30-day mortality 
rate that will be used for FY 2009 annual payment determination.
    As noted above, we are not adopting the SCIP infection or 
cardiovascular measures for the FY 2009 RHQDAPU program at this time, 
but intend to adopt SCIP Infection 4, SCIP Infection 6 and SCIP 
Cardiovascular 2 measures in the CY 2008 OPPS final rule, if these 
measures have been NQF endorsed. If the measures are endorsed, we 
intend to finalize our proposal to require their reporting under the 
RHQDAPU program effective with CY 2008 discharges and we anticipate 
that the submission deadlines for the first quarter of CY 2008 
discharges will be August 15, 2008. We are not adopting the proposed 
SCIP Infection 7 in this final rule with comment period. We intend to 
adopt this measure after the NQF endorses it. When we determine to 
adopt this measure, we will do so through the rulemaking process and we 
will include data submission timeframes. We are finalizing our proposal 
to use the claims data submitted to CMS for index hospitalizations 
occurring from July 2006 through June 2007 (3Q06 through 2Q07) to 
calculate the Pneumonia 30-day mortality rate that will be used for FY 
2009 annual payment determination.
    Comment: One commenter did not believe it was reasonable to assume 
billing, including the reprocessing and resubmission of any corrected 
bills, will be complete for 100 percent of cases to allow for data 
submission to begin within 60 days post-discharge.
    Response: We appreciate this comment. We interpret your comment to 
refer to the 60 day submission deadline as proposed in the Value Based 
Purchasing listening session held in April 2007. The current CMS 
RHQDAPU quarterly submission deadline is currently about 135 days after 
the last discharge date of the quarter. This submission deadline 
schedule is published on the QualityNet Web site.
    All measures that we have previously finalized, and that we 
finalize in the future through the rulemaking process, will be required 
for the RHQDAPU program annual payment determination each year until 
further notice. CMS, working in conjunction with the Joint Commission, 
maintains the specifications for the set of measures used both for the 
RHQDAPU program and for reporting under the HQA initiative. The 
specifications are updated semiannually and changes are made 
prospectively, except in exceptional circumstances. Revised 
specifications can be found at www.qualitynet.org.
4. Retiring or Replacing RHQDAPU Program Quality Measures
    Over time, CMS expects that the set of measures used for the 
RHQDAPU program will evolve and change. New measures will be added to 
reflect clinical and other program goals. Measures that are no longer 
supported by clinical evidence will be modified or dropped. Through its 
public reporting and RHQDAPU program activities, CMS seeks to balance 
the competing goals of assuring the development of a comprehensive yet 
parsimonious set of

[[Page 47359]]

quality measures while reducing the reporting burden on hospitals. 
Section 1886(b)(3)(B)(viii)(VI) of the Act gives the Secretary 
authority to replace any measures or indicators in appropriate cases, 
such as where all hospitals are effectively in compliance, or the 
measures or indicators have been subsequently shown not to represent 
the best clinical practice. CMS recognizes the need to develop a 
process related to the retirement and/or replacement of measures that 
comprise the RHQDAPU program measure set. In the FY 2008 IPPS proposed 
rule (72 FR 24807), we solicited public comment and suggestions 
concerning the criteria and mechanism for a process that would identify 
and, where appropriate, retire or replace measures that comprise the 
RHQDAPU program measure set.
    Comment: Two commenters recognized the need to retire or replace 
measures. However, in doing so, they stated that CMS should guard 
against a decrease in hospital measure rates once a theoretical or real 
maximum has been achieved, since the removal of public reporting might 
lessen hospital attention on these processes of care.
    Response: We also understand that there is a risk in retiring 
measures that have ``topped out'' and will attempt to mitigate that 
risk if any measures are retired, including possible monitoring of 
these measure rates to ensure continued high performance.
    Comment: One commenter stated that CMS should decide to drop a 
measure if it finds that hospitals have exhibited and maintained a high 
quality of care per that particular quality measure.
    Response: We appreciate this comment and will consider the comment 
when it makes future proposals regarding the RHQDAPU measure set. In 
the future, CMS and its contractors plan to periodically review 
measures and make recommendations regarding, among other possibilities, 
retirement of measures for future proposed RHQDAPU measure sets.
    Comment: Numerous commenters stated that CMS should develop a 
policy for suspending measure when there is a change in science or an 
implementation issue arises during a reporting period and needs to be 
addressed immediately.
    Response: We have a history of suspending measures for public 
reporting purposes only due to changes in science or implementation 
issues. Examples include suspending public reporting of the influenza 
vaccination measure at times of national shortage or national delays in 
vaccine delivery, and suspension of SCIP Infection 2 (prophylactic 
antibiotic selection for surgery) when there were shortages of 
recommended antimicrobials for colorectal surgery prophylaxis. 
Specifically, we review measures on a continuous basis and can react if 
there is a change in science or if an error in the technical 
specifications is identified. If immediate revision of the measure is 
not feasible, we would suspend the measure for public reporting 
purposes until it can be reintroduced into the measure set. CMS 
utilizes the Measure Management System to maintain and retire measures. 
There are currently no plans to retire any measures utilized for 
RHQDAPU.
    Comment: One commenter stated that some measures that may no longer 
differentiate top performers from low performance over time, continue 
to have value for public reporting. Sustainability for key quality 
measures is important from a patient and a hospital perspective. For 
this reason, the commenter recommended that measures that are closely 
linked to patient outcomes, such as measures related to drug treatment 
of acute myocardial infarction and congestive heart failure, be 
retained and not retired, despite improved performance on these 
measures.
    Response: We are aware of these issues, in particular, the idea 
that a measure may be suited for one purpose but not another. CMS will 
take into consideration the clinical importance of a measure when 
continued, across the board high performance occurs. CMS currently does 
not have any plans to retire any of the process measures.
    Comment: One commenter stated that the primary goal is to ensure 
that the measures are keeping pace with the science and that a process 
is developed that can respond to these changes in a timely manner. At 
the same time, there is also a need to balance the yearly requirements 
for the payment programs based on these exact measures. The commenter 
recommended that a multi-stakeholder group be convened to identify an 
appropriate and equitable process. This group should be tasked with 
developing a process for when a measure needs to be temporarily removed 
from public reporting as well as eliminated from any payment 
determination due to changes in clinical science.
    Response: CMS, with input from the Joint Commission and in 
cooperation with the HQA of which the NQF is a member, devotes a large 
amount of resources to measure maintenance.
    Currently, updating performance measure is a continuous process 
that is based on concurrent reviews of medical literature, input from 
topic-specific technical expert panels, and input from specialty 
societies and practice guideline committees. We evaluate all proposed 
changes, in part by vetting them through a joint committee made up of 
representatives of CMS, CMS contractors and the Joint Commission, with 
input from the HQA. There are a number of examples where we have 
temporarily removed from public reporting hospital quality measures 
because of circumstances outside of the control of hospitals (for 
example, delays in influenza vaccine delivery, shortages of antibiotics 
for surgical prophylaxis).
    Comment: One commenter suggested that CMS remove from the RHQDAPU 
program measures that have been topped out, that is, measures where the 
data shows that a large majority of the participating hospitals have 
achieved very high levels of performance. However, the commenter 
recommended that hospitals continue to report results on Hospital 
Compare. By taking the measures out of the RHQDAPU program, it allows 
hospitals and CMS to focus their respective resources on those areas 
where patient care can benefit most.
    Response: We appreciate this comment. While it is true that some 
measures appear to have ``topped out'' for some hospitals, we still see 
considerable variation in performance between top performers and low 
performers for most measures. It is also not clear how having a 
hospital continue to report results on Hospital Compare for topped out 
measures would reduce resource requirements for an individual hospital. 
For example, the three RHQDAPU SCIP infection measures on timing, 
appropriate administration, and discontinuation of antibiotic 
prophylaxis use many of the same data elements, such as a list of 
antibiotics and their administration times. More relative data 
collection burden is saved when measures with no duplicative data 
elements are removed, as opposed to measures using many of the same 
data elements as other RHQDAPU measures. We are also continuing to 
consider how we may be able to develop a process to decide when to 
retire a performance measure that has truly topped out.
5. Procedures for the RHQDAPU Program for FY 2008 and FY 2009
a. Procedures for Participating in the RHQDAPU Program
    The ``Reporting Hospital Quality Data for Annual Payment Update 
Reference Checklist'' section of the QualityNet Exchange Web site 
contains all of the forms to be completed by hospitals participating in 
the program. In order to

[[Page 47360]]

participate in the hospital reporting initiative for FY 2008, hospitals 
must follow these steps:
    <bullet> Identify a QualityNet Exchange Administrator who will 
follow the registration process and submit the information through the 
QIO Clinical Warehouse. This must be done regardless of whether the 
hospital uses a vendor for transmission of data.
    <bullet> Complete the revised ``Reporting Hospital Quality Data for 
Annual Payment Update Notice of Participation'' form. Hospitals must 
send this form to their QIO, no later than August 15, 2007. In an 
effort to alleviate the burden associated with submitting this form 
annually, we consider that a hospital that submits this form is an 
active RHQDAPU program participant until such time as the hospital 
submits a withdrawal form to CMS.
    In addition, before participating hospitals initially begin 
reporting data, they must register with the QualityNet Exchange, 
regardless of the method used for submitting data.
    <bullet> Collect and report data for each of the required measures 
except the Medicare mortality measures (Acute Myocardial Infarction, 
Heart Failure, and Pneumonia 30-day Mortality for Medicare Patients). A 
hospital must report these data for discharges occurring in or after 
first quarter CY 2007. Hospitals must submit the data to the QIO 
Clinical Warehouse using the CMS Abstraction & Reporting Tool (CART), 
the JCAHO ORYX[supreg] Core Measures Performance Measurement System, or 
another third party vendor tool that has met the measurement 
specification requirements for data transmission to QualityNet 
Exchange. All submissions will be executed through QualityNet Exchange. 
Because the information in the QIO Clinical Warehouse is considered QIO 
information, it is subject to the stringent QIO confidentiality 
regulations in 42 CFR Part 480. The QIO Clinical Warehouse will submit 
the data to CMS on behalf of the hospitals.
    <bullet> For each quality measure that requires hospitals to 
collect and report data, submit complete data regarding the quality 
measures in accordance with the joint CMS/Joint Commission sampling 
requirements located on the QualityNet Exchange Web site. These 
requirements specify that hospitals must submit a random sample or 
complete population of cases for each of the topics covered by the 
quality measures. Hospitals must meet the sampling requirements for 
these quality measures for discharges in each quarter.
    <bullet> Submit to CMS on a quarterly basis aggregate population 
and sample size counts for Medicare and non-Medicare discharges for the 
four topic areas (AMI, HF, PNE, and SCIP)).
    <bullet> Continuously collect HCAHPS data, beginning with July 2007 
discharges, in accordance with the HCAHPS Quality Assurance Guidelines, 
Version 2.0, located at www.hcahpsonline.org. The CY 2007 OPPS rule 
required HCAHPS-eligible hospitals to participate in the March 2007 dry 
run of the HCAHPS survey, if they had not already participated in a 
previous dry run. Hospitals must submit HCAHPS dry run data to the QIO 
Clinical Warehouse by July 13, 2007. As part of the March 2007 dry run, 
hospitals were required to survey HCAHPS-eligible discharges between 48 
hours and 6 weeks following hospital discharge. CMS has become aware 
that, because they treat very few patients, a very small percentage of 
hospitals might not have had any HCAHPS-eligible discharges in March 
2007. Similarly, such hospitals might not have any HCAHPS-eligible 
discharges in any month from July 2007 forward. The clinical data 
warehouse is being modified to accept zero HCAHPS-eligible discharges 
in the future but until this modification is complete, these hospitals 
should contact CMS by sending an email to <a href="/cdn-cgi/l/email-protection#0b63686a637b784b6a717a626425786f7b782564796c"><span class="__cf_email__" data-cfemail="95fdf6f4fde5e6d5f4efe4fcfabbe6f1e5e6bbfae7f2">[email protected]</span></a>.
    <bullet> For the AMI 30-day and HF 30-day mortality measures, CMS 
uses Part A and Part B claims for Medicare fee-for-service patients to 
calculate the mortality measures. For FY 2008, hospital inpatient 
claims (Part A) from July 1, 2005 to June 30, 2006, will be used to 
identify the relevant patients and the index hospitalizations. 
Inpatient claims for the index hospitalizations and Part A and Part B 
claims for all inpatient, outpatient, and physician services received 1 
year prior to the index hospitalizations are used to determine patient 
comorbidity, which is used in the risk adjustment calculation (see 
http://www.qualitynet.org/dcs/ContentServer?cid=1163010398556&pagename=QnetPublic%2FPage%2FQnetTier2&c=Page). No other hospital data submission is required to calculate the 
mortality rates.
    Comment: Several commenters stated that CMS needs to release new 
and revised measure and programming specifications in an expedited 
manner. Specifically, the data specifications need to be articulated 
well in advance of the start of data collection so that both the 
vendors that assist hospitals in collecting and formatting data for 
submission and the QIO Clinical Warehouse have an appropriate amount of 
time to adjust their software and test it to ensure it functions 
properly.
    Response: The current 120 day advance release of the specification 
manual is jointly implemented by CMS and the Joint Commission. We will 
consider adding more time to this advance release in the future. 
Additionally, we will strive to minimize the number of post-update 
clarifications that further reduce the lead time needed for vendor 
software programming. We believe that a continued coordination with the 
Joint Commission is the most efficient and feasible method to ensure 
that hospitals and data vendors receive measures specifications with 
sufficient advance notice.
    Comment: One commenter supported coordination among vendors, CMS, 
and the Joint Commission, including the need for clear and definitive 
alignment. Hospitals and vendors will require extremely detailed 
guidance on what should be included in each reporting period. The 
commenter urged CMS to recognize the time constraints in applying the 
validation requirement for the FY 2008 update for the three SCIP 
measures that are to be included in the RHQDAPU measure set.
    Response: We are continuing to work on coordinating measures 
updates and selection with the Joint Commission in an effort to 
minimize the reporting burden on hospitals. We understand the need to 
coordinate measure selection and corresponding abstraction and 
processing burden on vendors and hospitals. However, measures selection 
must also consider the requests by consumer groups, purchasers, and 
other stakeholders to increase the public reporting measure set. We 
also appreciate the comment on applying the validation requirement for 
the FY 2008 update.
    Comment: Two commenters stated that when amending measures, CMS 
should take into account the ability of hospitals, the QIO Clinical 
Warehouse, and data vendors to successfully and quickly implement 
changes in reporting measures and that CMS should seek input from 
hospital data collection personnel as a part of the measure review 
process to understand the effects that reporting changes have on 
hospitals.
    Response: We understand the need to consider the abstraction and 
processing burden on vendors and hospitals when selecting measures for 
the RHQDAPU program. We will consider greater vendor and hospital 
participation into our measure testing and development program in the 
future.

[[Page 47361]]

b. Procedures for Participating in the RHQDAPU Program for FY 2009
    In the FY 2008 IPPS proposed rule (72 FR 24807), we stated that for 
FY 2009, the requirements for FY 2008 discussed above would apply, 
except that hospitals would be required to collect and report data on 
any additional measures that we finalize through the rulemaking 
process, and for which we specify that data submission is required. We 
also stated that mortality measures will be expanded to include 
pneumonia when this measure received final NQF endorsement. This 
measure has received NQF endorsement and, as we discussed above, we are 
adopting as final in this FY 2008 IPPS final rule the proposed 
pneumonia 30-day mortality measure for Medicare patients for the FY 
2009 RHQDAPU program.
c. Chart Validation Requirements
    (1) FY 2008 Chart Validation Requirements
    In the FY 2008 IPPS proposed rule (72 FR 24808), we stated that for 
the FY 2008 update, and until further notice, we would continue to 
require that hospitals meet the chart validation requirements that we 
implemented in the FY 2006 IPPS final rule. There were no chart-audit 
validation criteria in place for FY 2005. Based upon our experience 
with the FY 2005 submissions, and our requirement for reliable and 
validated data, in the FY 2006 IPPS final rule we discussed additional 
requirements that we had established for the data that hospitals were 
required to submit in order to receive the full FY 2006 payment update 
(70 FR 47421 and 47422). These requirements, as well as additional 
information on validation requirements, continue and are being placed 
on the QualityNet Exchange Web site.
    We also stated that for the FY 2008 payment update, and until 
further notice, hospitals must pass our validation requirement that 
requires a minimum of 80-percent reliability, based upon our chart-
audit validation process, for the first three quarters of data from CY 
2006. These data were due to the QIO Clinical Warehouse by August 15, 
2006 (first quarter CY 2006 discharges), November 15, 2006 (second 
quarter CY 2006 discharges), and February 15, 2007 (third quarter CY 
2006 discharges).
    We use confidence intervals to determine if a hospital has achieved 
an 80-percent reliability aggregated over the three quarters. The use 
of confidence intervals allows us to establish an appropriate range 
below the 80-percent reliability threshold that demonstrates a 
sufficient level of reliability to allow the data to still be 
considered validated. We estimate the percent reliability based upon a 
review of five charts, and then calculate the upper 95-percent 
confidence limit for that estimate. If this upper limit is above the 
required 80-percent reliability, the hospital data are considered 
validated.
    We are using the design-specific estimate of the variance for the 
confidence interval calculation, which, in this case, is a stratified 
single stage cluster sample, with unequal cluster sizes. (For 
reference, see Cochran, William G.: Sampling Techniques, John Wiley & 
Sons, New York, chapter 3, section 3.12 (1977); and Kish, Leslie.: 
Survey Sampling, John Wiley & Sons, New York, chapter 3, section 3.3 
(1964).) Each quarter is treated as a stratum for variance estimation 
purposes.
    We will use a two-step process to determine if a hospital is 
submitting valid data. In the first step, we calculate the percent 
agreement for all of the variables submitted in all of the charts. If a 
hospital falls below the 80-percent cutoff, we proceed to the second 
step and restrict the comparison to those variables associated with 
payment. For first and second quarter CY 2006 discharges (1Q06, 2Q06), 
that means we limit the calculations to the 10-measure starter set. For 
third quarter CY 2006 discharges (3Q06), we include 21 measures. We 
recalculate the percent agreement and the estimated 95-percent 
confidence interval, and again compare the sum to the 80-percent cutoff 
point. If a hospital passes under this restricted set of variables, the 
hospital is considered to be submitting valid data for purposes of the 
RHQDAPU program.
    Due to time constraints, we will not apply the validation 
requirement for the FY 2008 update to 3 SCIP measures that are included 
in the RHQDAPU measure set: Infection 2, VTE 1 and VTE 2.
    Comment: Three commenters stated that improvements need to be made 
to the validation process. They indicated that many hospitals have been 
notified that there have been problems validating the data they 
submitted. The commenters stated that in several instances, these 
validation problems have been due to inconsistencies in the definitions 
of some variables used by CMS' contractors who are re-abstracting 
patient-level data and comparing it to the data submitted by the 
hospitals. They believed that while the re-abstraction of five charts 
per quarter for each hospital may have been a sufficient validation 
strategy when only 10 measures were being collected and reported, it is 
insufficient to ensure the reliability of the data as we continue to 
expand the number of measures and the number of patients on whom data 
are being collected. The commenters believed that a more resilient and 
less resource intensive method of validation is needed. The commenters 
indicated that they are working with a well known research and data 
enterprise to explore alternatives and will share their recommendations 
about more effective, less cumbersome validation processes with CMS in 
the next few weeks.
    Response: We appreciate this comment and are interested in 
receiving alternative proposals to improve the validation process in 
terms of burden and accuracy of abstracted data. The current validation 
process has been in place for several years, and we believe that 
improvements should be thoroughly tested and submitted to hospitals 
before we adopt them for the RHQDAPU program. We are currently 
considering these options and others for their burden of hospitals, 
resource implications for CMS, and impact on accuracy of the data.
    Comment: In the event hospitals are notified of problems with their 
data submissions, one commenter suggested that it should have the 
ability to appeal those notices. The commenter stated that often these 
problems are a result of inconsistencies in some of the variables used 
by CMS' contractors and abstractors. The commenter believed that the 
small number of charts being abstracted also is insufficient to ensure 
reliability. Consequently, the commenter suggested that hospitals 
should be permitted to file an appeal if there is a validation problem. 
Any appeals process should also be timely with a clearly defined 
process that is published in the final rule.
    Response: Hospitals falling below 80 percent agreement rate for 
quarterly validation are eligible to appeal their mismatched elements 
if they believed that the CMS CDAC contractor incorrectly abstracted 
the data element. This validation appeals process is outlined on the 
QualityNet Web site (www.qualitynet.org), and contains clearly defined 
timeframes for hospital appeals request and subsequent QIO appeals 
review.
    Comment: One commenter stated that the quarterly submission of data 
would be a hardship on small providers that only have one person 
collecting and reporting quality measures. Nonetheless, the commenter 
believed that quarterly submission makes sense.
    Response: We appreciate and understand the abstraction and 
submission burden of smaller hospitals. The quarterly submission 
deadline

[[Page 47362]]

weighs the need to frequently update the publicly reported data, data 
reliability, against the abstraction and submission burden placed on 
hospitals. We continue to coordinate these requirements with The Joint 
Commission for their accredited hospitals to attempt in minimizing the 
incremental burden placed on Joint Commission accredited hospitals, 
which comprise over 80 percent of all hospitals operating under the 
hospital IPPS payment system.
    Comment: With respect to validation of data being submitted by 
hospitals, one commenter understood that in FY 2008, CMS would not be 
applying the validation requirement to three SCIP anti-infection 
measures (Infection 2, VTE 1 and 2). The commenter stated that since 
these data come from the hospitals and it can impact their business, it 
is imperative to include validation for these measures to assure the 
public that the information is accurate.
    Response: We appreciate the comment. CMS proposed in the FY 2008 
IPPS proposed rule (72 FR 24808) to apply the validation requirements 
to these measures using 2nd quarter 2007 and 3rd quarter CY 2007 
discharges.
    Comment: One commenter stated that CMS should consider alternative 
methods of data validation such as using monthly data points of each 
clinical measure and not relying on chart abstraction. The commenter 
indicated that such a method of validation might employ a process 
similar to the quarterly Outlier validation that the Joint Commission 
requires of its core measure vendors. A monthly data point that exceeds 
three (3) standard deviations is considered an outlier. When an outlier 
is identified, the hospital is requested to verify that the data are 
accurate. This validation process relies on inter-hospital variability.
    Response: We appreciate this comment and are interested in 
incorporating the Joint Commission's outlier validation methodology 
into our current chart audit validation process of abstracted data. The 
two methodologies assess important and different aspects of data 
quality. CMS' validation methodology assesses abstraction accuracy at 
the element level, and The Joint Commission's methodology assesses 
aberrant aggregate data patterns. The current CMS validation process 
has been in place for several years, and we believe that improvements 
should be thoroughly tested and submitted to hospitals through advance 
notice in future proposed rules posted in the Federal Register.
    Comment: One commenter stated that validation frequently does not 
relate to the quality of care provided, especially for many of the 
validation failures that are keying errors. The commenter stated that 
these errors are classified as ``invalid record selections'' which are 
not abstracted by CMS and not subject to appeal.
    Response: The current validation methodology is designed to measure 
the abstraction accuracy of the hospital, not the quality of care 
provided. All elements that are part of the RHQDAPU measures are 
subject to validation. However, before validating the data elements, 
CMS must ensure that the chart submitted by the hospital represents the 
patient sampled for validation. CMS does not abstract charts in cases 
where the information used to identify the patient's stay contradicts 
the electronic submission data. CMS must definitively determine that 
the submitted medical record is the patient as identified in the 
submitted data. The patient name, admission or discharge date must 
match for CMS to definitively determine the medical record is the same 
episode of care as the submitted patient level data.
    Comment: One commenter stated that all hospitals should have the 
ability to appeal all validation cases regardless of whether scores are 
below 80 percent, whenever the validation scores could affect a 
potential loss of the APU. The commenter believed that hospitals must 
have the opportunity to appeal human errors in transcription, copying 
or mailing medical records to the CDAC for validation.
    Response: We appreciate this comment, but resources do not allow 
CMS to review requests from all 3,500 hospitals that participate in the 
RHQDAPU program for reconsideration regarding validation results if 
those results did not affect payment. We restrict our review to only 
hospitals not meeting the 80 percent threshold because payment is much 
more likely to be affected for these hospitals.
    Comment: One commenter agreed with including ``measure match'' 
accuracy as part of the validation process but also asked if the 
hospital can correctly identify which cases received the process of 
care (i.e., the numerator) and belong in the process of care (i.e., the 
denominator), which is how the data is displayed on Hospital Compare, 
what additional value does verification of individual data element 
match provide? The commenter recommended that CMS evaluate only the 
verification of the accuracy of the cases placed into the numerator and 
denominator. From a patient care perspective, the commenter was 
interested in knowing if a patient received antibiotics in a timely 
manner, not if the abstractor correctly entered a specific data 
element.
    Response: We appreciate this comment. We will consider this 
proposed approach in the future for the RHQDAPU program, and the 
lessened burden associated with this proposal. We must also consider 
the relative amount of information that CMS is able to provide the 
hospital under the proposed approach, because CMS would not be 
definitively able to provide the hospital with the exact data element 
that resulted in the validation failure for that measure. We must 
evaluate the need to provide this detailed information to the hospitals 
in our future RHQDAPU proposed validation methodology.
    After careful consideration of the comments received, we are 
adopting in this FY 2008 IPPS final rule the validation process we 
proposed in the FY 2008 IPPS proposed rule. However, we will further 
address the final list of process measures which will be validated for 
the FY 2009 RHQDAPU program in the CY 2008 OPPS final rule.
    For HCAHPS, hospitals and survey vendors must participate in a 
quality oversight process conducted by the HCAHPS project team. Prior 
to July 2007, the purpose of the oversight activities was to provide 
feedback to hospitals and survey vendors on data collection procedures. 
Starting in July 2007, we ask hospitals/survey vendors to correct any 
problems that are found and provide follow-up documentation of 
corrections for review within a defined time period. If the HCAHPS 
project team finds that the hospital has not made these corrections, 
CMS may determine that the hospital is not submitting HCAHPS data that 
meets the requirements for the RHQDAPU program. As part of these 
activities, HCAHPS project staff will review and discuss with survey 
vendors and hospitals self-administering the survey their specific 
Quality Assurance Plans, survey management procedures, sampling and 
data collection protocols, and data preparation and submission 
procedures. This review may take place in-person or through other means 
of communication.
(2) FY 2009 Chart Validation Requirements
    In the FY 2008 IPPS proposed rule (72 FR 24808), we indicated that 
for the FY 2009 update, all FY 2008 requirements would apply, except 
for the following

[[Page 47363]]

modifications. We would modify the validation requirement to pool the 
quarterly validation estimates for 4th quarter CY 2006 through 3rd 
quarter 2007 discharges. We would also expand the list of validated 
measures in the FY 2009 update to add SCIP Infection-2, SCIP VTE-1, and 
SCIP VTE-2 starting with 4th quarter CY 2006 discharges. We would also 
drop the current two-step process to determine if the hospital is 
submitting valid data. We proposed for the FY 2009 update to pool 
validation estimates covering the 4 quarters (4th quarter CY 2006 
discharges through 3rd quarter 2007 discharges) in a similar manner to 
the current 3 quarter pooled confidence interval.
    Comment: One commenter recommended that CMS go to a four (4) 
quarter validation instead of three (3) quarters. The commenter 
suggested that the approach needs to be consistent for all measures, 
otherwise it will be administratively very difficult for the vendors.
    Response: We appreciate this comment, and proposed in the FY 2008 
IPPS proposed rule that we would use four quarters of validation 
results starting with the FY 2009 update. We made this proposal a year 
in advance to give hospitals ample notice of this new requirement. We 
will consider the consistency of our validation approach as we make 
improvements to this process in future years.
(3) Validation and Submission Requirements
    In the FY 2008 IPPS proposed rule (72 FR 24808), we stated that we 
planned to apply the validation and submission requirements for the FY 
2008 and FY 2009 payment determination to the quality measures. For the 
validation and submission requirements for the FY 2008 payment year, we 
stated that we plan to use the following criteria:
    <bullet> The 10 measure starter set for both submission and 
validation for 1st through 3rd quarters CY 2006 discharges.
    <bullet> The additional 11 measures that make up the expanded 
measure set for both submission and validation for 3rd quarter CY 2006 
discharges.
    <bullet> SCIP VTE 1, 2, and SCIP Infection 2 submissions only for 
1Q 2007 discharges only.
    <bullet> HCAHPS measures, both submission of dry run data and 
continuous submissions beginning with July 2007 discharges.
    <bullet> AMI and HF 30-day mortality measures as described 
previously.
    For FY 2009 payment year, we plan to use the following criteria:
    <bullet> The 21 expanded measure set for submission and validation 
starting with 4th quarter CY 2006 (4Q06) through 3rd quarter CY 2007 
(3Q07) discharges.
    <bullet> SCIP VTE 1, 2, and SCIP Infection 2 submission and 
validation for 2nd quarter CY 2007 and 3rd Quarter CY 2007 discharges.
    <bullet> HCAHPS measures, continuous submission.
    <bullet> AMI, HF, and PN 30-day mortality measures as described 
previously.
    As we have previously stated, at this time we are not finalizing 
the SCIP Infection 4, SCIP Infection 6, SCIP Infection 7 and SCIP 
Cardiovascular-2 measures for the FY 2009 RHQDAPU program because they 
have not yet been endorsed by the NQF. We anticipate that three of 
these measures will be endorsed by the NQF in the next few months (SCIP 
Infection 4, SCIP Infection 6 and SCIP Cardiovascular-2) and, if they 
are, we intend to adopt these measures in the CY 2008 OPPS final rule. 
We will await NQF action on SCIP Infection 7, and if it is endorsed and 
we determine to adopt this measure, we will do so through the 
rulemaking process.
    As additional measures are finalized for inclusion in the FY 2009 
payment decision, we stated that we would anticipate making further 
changes to the above plan to incorporate those measures.
    Comment: Several commenters urged immediate adoption of an 
effective mechanism for allowing hospitals and their vendors to 
resubmit quality measure data if they discover an error.
    Response: Quality measure data can be resubmitted before the data 
submission deadline; however, measure data resubmissions after the 
deadline and the QIO Clinical Warehouse lockdown are currently 
rejected. We will, however, take into consideration the commenter's 
suggestion to allow quality measure resubmissions to occur after the 
data submission deadline for public reporting purposes. For payment 
purposes, we believe that the requirement of submission deadlines is 
necessary to ensure a proper audit trail to ensure that annual 
requirements were accurately calculated in a timely manner.
    Comment: One commenter continued to support expanding the number of 
measures to be included in the RHQDAPU program. However, the commenter 
was concerned that the program is constrained in how quickly it can 
expand given the capacity and capability of the current QIO Clinical 
Warehouse. The commenter suggested that CMS should give serious 
consideration to competitively bidding the QIO Clinical Warehouse to an 
entity with greater capacity. The commenter indicated that, ideally, 
the entity must be able to receive, aggregate, and calculate reliable 
and valid data on performance measures across all patient populations 
on a timely basis, supply such data to CMS, public and private payers, 
accreditation organizations, and entities representing providers, 
practitioners, and consumers, conduct ongoing assessments and make 
adjustments and changes to address any deficiencies. The commenter also 
recommended that this entity should provide effective technical 
assistance to entities submitting data to, and entities using data 
from, the QIO Clinical Warehouse.
    Response: We are continuing to evaluate the capacity of our data 
infrastructure and contractor resources and will continue to assess and 
make adjustments to the QIO Clinical Warehouse in order to provide an 
efficient system, in a timely manner, for the submission, storage, and 
calculation of quality measure data. CMS will consider the commenter's 
suggestion as we evaluate the warehouse.
    Comment: One commenter urged CMS to allow vendors access to the 
data during the CDAC validation process so that the vendors and 
hospitals together can analyze the data. The commenter indicated that 
shortened timeframe for reporting is acceptable so long as CMS 
communicates technical changes in programming in a timely manner and 
coordinates with the QIOs so that messages are consistent across all 
aspects of the agency.
    Response: We will investigate and study the issues related to the 
possibility of allowing vendors access to these data.
    Comment: Two commenters requested that CMS continue improving the 
ability of vendors to help their hospital clients to the fullest extent 
by permitting vendors to access the data of their client hospitals on 
Q-net with a single sign on. The commenters also believed that 
hospitals and vendors should be able to resubmit data in the event a 
problem is found during the validation process and assuming the 
resubmission can take place prior to the closing of the reporting 
period. Often the problems are technical in nature and are related to 
straight programming errors, not to errors or omissions by hospitals.
    Response: We agree that vendors should provide efficient data 
submission for their hospitals. Currently, there is a single sign on 
for a vendor to upload data for all those providers for which the 
vendor is authorized to submit data. There is also

[[Page 47364]]

a single sign on to access the submission reports for all those 
providers who have given their vendor authorization to view their 
reports.
    Regarding resubmission of data, if an error is found before the 
data submission deadline, hospitals and vendors can resubmit their 
data.
    Comment: One commenter noted that recently, many hospitals have had 
difficulties with their data submission. The commenter indicated that 
these problems commonly have been due to errors in the software at the 
QIO Clinical Warehouse, and have caused an undue administrative burden 
for hospitals. The commenter believed that these difficulties have 
focused staff attention on data collection and reporting and away from 
quality improvement initiatives to provide better care to patients.
    Response: The contractor responsible for the QIO Clinical Warehouse 
is continuing its efforts to improve warehouse processes and has added 
an independent verification and validation step to the testing phase in 
order to further ensure accuracy and reliability.
    Comment: One commenter stated that it is not clear from the 
proposed rule what data transmission mechanism hospitals should use if 
they do not use the CART application. The commenter encouraged 
consideration of ORYX performance measurement systems for data 
processing and abstraction software as an existing, well-established 
reporting infrastructure.
    Response: CART (CMS Abstraction & Reporting Tool) is a software 
application created by CMS, and is designed to allow hospitals, QIOs, 
and other organizations to abstract, edit, export, and report on the 
quality measures. CART and the QIO Clinical Warehouse infrastructure 
may be used across data collection programs and is available at no 
charge. Hospitals are allowed to use CART or to use ORYX vendor 
software to abstract data. ORYX vendor software and data processing 
must be purchased by hospitals.
d. Data Validation and Attestation
    In the FY 2008 IPPS proposed rule we stated that for the FY 2008 
update and in subsequent years, we would revise and post up to date 
confidence interval information on the QualityNet Exchange Web site 
explaining the application of the confidence interval to the overall 
validation results. The data are being validated at several levels. 
There are consistency and internal edit checks to ensure the integrity 
of the submitted data; there are external edit checks to verify 
expectations about the volume of the data received.
    We also stated that we would require for FY 2008 and subsequent 
years that hospitals attest each quarter to the completeness and 
accuracy of their data, including the volume of data, submitted to the 
QIO Clinical Warehouse in order to improve aspects of the validation 
checks. We proposed to provide additional information to explain this 
attestation requirement, as well as provide the relevant form to be 
completed on the QualityNet Exchange Web site at the same time as the 
publication of this final rule with comment period.
    Comment: One commenter supported the attestation process for the 
new SCIP measures. Another commenter stated that it is critical that 
CMS gives every provider the opportunity to attest each quarter to the 
completeness and accuracy of their data.
    Response: We appreciate the comments. We believe that the 
attestation requirement for all measures for which hospitals submit 
data under the RHQDAPU program will increase awareness among hospitals 
about the abstraction and submission of accurate data because it 
demands explicit acknowledgement from hospitals that its data is 
complete and accurate. At this time, we are not finalizing the SCIP 
Infection 4, SCIP Infection 6, SCIP Infection 7, and SCIP 
Cardiovascular 2 measures. We plan to address the status of these 
measures in the CY 2008 OPPS final rule.
    Comment: One commenter stated that without automated electronic 
records that interface with the billing system, the quarterly 
attestation of data completeness is difficult to ensure.
    Response: We appreciate this comment. We will consider this comment 
in our future efforts to improve the attestation component of the 
RHQDAPU program.
e. Public Display
    We proposed that we would continue to display quality information 
for public viewing as required by section 1886(b)(3)(B)(viii)(VII) of 
the Act. Before we display this information, hospitals will be 
permitted to review their information as recorded in the QIO Clinical 
Warehouse.
    Currently, hospitals that share the same Medicare Provider Number 
(MPN) must combine data collection and submission across their multiple 
campuses (for both clinical measures and for HCAHPS). These measures 
are then publicly reported as if they apply to a single hospital. We 
estimate that approximately 5 to 10 percent of the hospitals reported 
on the Hospital Compare Web site share MPNs. For FY 2008 and subsequent 
years, we proposed that we would require hospitals to begin to report 
the name and address of each hospital that shares the same MPN. This 
information would be gathered through the RHQDAPU program Notice of 
Participation form, which hospitals would submit to their QIOs by 
August 15, 2007. To increase transparency in public reporting and 
improve the usefulness of the Hospital Compare Web site, we would note 
on the Web site where publicly reported measures combine results from 
two or more hospitals.
    Comment: One commenter supported CMS' efforts to increase 
transparency in public reporting and the disclosure of hospitals that 
collectively report quality data under the same MPN and supported CMS' 
proposals regarding new hospital participation under the RHQDAPU 
program as well as the expanded quality measures for FY 2009.
    Response: We agree that, by collecting information about which MPNs 
are being shared by multiple hospitals and publicly reporting where the 
quality indicators combine the experience of two or more hospitals, it 
can create greater transparency and increase the utility and value of 
the Hospital Compare Web site.
    Comment: Two commenters stated that CMS should provide comparative 
performance at a hospital level on the Hospital Compare Web site. The 
commenters believed that the proposal to indicate which data reflect 
the performance of two or more hospitals is inadequate to aid in 
provider selection.
    Response: We agree that, to increase the utility and value of the 
hospital quality information on the Hospital Compare Web site, 
information should be collected and reported at the hospital campus 
level. Our first step in this direction is to determine which hospitals 
share the same MPN. This will allow us to indicate on the Web site 
where the quality indicators currently combine the experience of two or 
more hospitals. Eventually, we intend to collect and report hospital 
quality information at the campus level.
    Comment: One commenter believed that CMS' proposal to require 
hospitals to begin to report the name and address of each hospital 
campus that shares the same MPN would be extremely cumbersome in 
practice and strongly encouraged CMS to be consistent across all 
environments and data requirements within CMS. The commenter, 
therefore, recommended that only the main campus address be listed, for 
consistency. Although it recognized the constraints this places on 
Hospital Compare Web site and the ability to

[[Page 47365]]

compare specific hospital measures; the commenter believed that just 
including a note on the Web site where hospital scores have been 
combined will avoid much of the current confusion.
    Response: Currently, we do not have information about which 
hospitals share an MPN. Thus, we cannot note that hospitals share an 
MPN on Hospital Compare without gathering this information from 
hospitals.
    Comment: With respect to public reporting, one commenter stated 
that combining data across multiple campuses hides from consumers 
serious quality problems at a single facility. The commenter believed 
that as long as this grouping is in place, the public must be informed 
as to which facilities are falling into these groups. However, the 
commenter added, it is ultimately more important to address the 
underlying problem that is preventing CMS from reporting the 
performance of each individual hospital. The commenter urged CMS to 
report the quality measure for each specific hospital campus.
    Response: We agree that ultimately to make the information most 
useful it should be collected and reported at the campus level. Our 
first step in this direction is to determine which hospitals are 
combining data across hospitals on Hospital Compare. This will allow us 
to indicate on the Web site where the quality indicators currently 
combine the experience of two or more hospitals. Eventually, we intend 
to collect and report hospital quality information at the campus level.
f. Reconsideration and Appeal Procedures
    In the FY 2008 IPPS proposed rule, we stated that if we deny a 
hospital the full market basket update, the hospital may submit a 
request that we reconsider our decision that the hospital did not meet 
the RHQDAPU program requirements. For FY 2008, a hospital must submit 
such a request for reconsideration on or before November 1, 2007. We 
also are establishing additional procedural rules that will govern 
RHQDAPU program reconsiderations. We will post these rules on the 
QualityNet Exchange Web site at the same time as the publication of 
this final rule with comment period.
    In the FY 2008 IPPS proposed rule (72 FR 24809), we again solicited 
public comment and suggestions related to reconsideration decisions.
    Comment: Three commenters stated that CMS should use the experience 
in FY 2007 to construct a process (reconsideration) for adjudicating 
appeals in a timely fashion and should clearly lay out that process for 
all hospitals to see prior to publication of the final rule.
    Response: We will use the experience from the FY 07 reconsideration 
period to develop a process that will streamline and expedite this 
annual process that potentially affects hospital payment.
    We are concurrently posting more detailed procedural rules 
regarding the FY 2008 reconsideration process on the QualityNet 
Exchange Web site. We are also describing these rules below in this 
final rule with comment period.
    In order to receive a reconsideration, the hospital must:
    <bullet> Submit via QualityNet Exchange a Reconsideration Request 
form (available on the QualityNet Exchange Web site), containing the 
following information, to CMS:
    [cir] Hospital Medicare ID number
    [cir] Hospital Name
    [cir] CMS identified reason for failure (as provided in the CMS 
notification of failure letter to the hospital)
    [cir] Hospital basis for requesting reconsideration;
    [dec222] This must identify the hospital's specific reason(s) for 
believing it met the RHQDAPU requirements and should receive the full 
FY 2008 IPPS annual payment update.
    [cir] CEO contact information, including name, email address, 
telephone number, and mailing address (must include physical address, 
not just PO box)
    [cir] QualityNet System Administrator contact information, 
including name, email address, telephone number, and mailing address 
(must include physical address, not just PO box)
    [dec222] The request must be signed by the hospital's CEO.
    For FY 2008, a hospital must submit via QualityNet Exchange such a 
request for reconsideration on or before November 1, 2007.
    Following receipt of a request for reconsideration, CMS will:
    <bullet> Provide an email acknowledgement, using the contact 
information provided in the reconsideration request, to the CEO and the 
QualityNet Administrator that the letter has been received.
    <bullet> Provide a formal response to the hospital CEO, using the 
contact information provided in the reconsideration request, notifying 
the facility of the outcome of the reconsideration process. CMS expects 
the process to take 60-90 days from the due date of November 1, 2007.
    If a hospital is dissatisfied with the result of a RHQDAPU program 
reconsideration decision, the hospital may file a claim under 42 CFR 
part 405, Subpart R (a Provider Reimbursement Review Board (PRRB) 
appeal).
g. RHQDAPU Program Withdrawal Requirements
    For the FY 2008 update, hospitals may withdraw from the RHQDAPU 
program at any time up until August 15, 2007. If a hospital withdraws 
from the program, it will receive a 2.0 percentage point reduction in 
its annual payment update.
6. Electronic Medical Records
    In the FY 2006 IPPS final rule, we encouraged hospitals to take 
steps toward the adoption of electronic medical records (EMRs) that 
will allow for reporting of clinical quality data from the EMRs 
directly to a CMS data repository (70 FR 47420). We intend to begin 
working toward creating measures' specifications, and a system or 
mechanism, or both, that will accept the data directly without 
requiring the transfer of the raw data into an XML file as is currently 
done. The Department continues to work cooperatively with other Federal 
agencies in the development of Federal health architecture data 
standards. We encouraged hospitals that are developing systems to 
conform them to both industry standards, and when developed, the 
Federal Health Architecture Data standards; taking measures to ensure 
that the data necessary for quality measures is captured. Ideally, such 
systems will also provide point-of-care decision support that enables 
detection of high levels of performance on the measures. Hospitals 
using EMRs to produce data on quality measures will be held to the same 
performance expectations as hospitals not using EMRs.
    Due to the low volume of comments we received on this issue in 
response to the FY 2006 proposed IPPS rule, in the proposed IPPS rule 
for FY 2007 (71 FR 24095), we again invited public comment on these 
requirements and related options. In the FY 2007 IPPS final rule (71 FR 
48045), we summarized and addressed the additional comments we 
received. In the FY 2008 IPPS proposed rule (72 FR 24809), we noted 
that we would welcome additional comments on this issue.
    Comment: One commenter supported encouraging the use of electronic 
medical records (EMRs). The commenter indicated that the use of the EMR 
could assist in the initial collection of information. However, the 
commenter added, CMS must recognize the clear distinction between tools 
that are used at the point of care to record and improve medical 
interventions and those that are used to report and

[[Page 47366]]

validate quality measures. At this point, EMRs are best suited to only 
the former functions and not the latter of the functions. The reality 
is that the specifications for reporting measures change too quickly to 
enable EMRs to be the vehicle for quality data and reporting. Moreover, 
the appetite among EMR vendors to constantly update their products to 
incorporate new specifications is costly in terms of both time and 
dollars. The commenter was pleased to continue to work with CMS through 
the American Health Information Community (AHIC) and other agencies to 
develop processes through which an EMR could speed the collection and 
minimize the resources necessary for quality reporting.
    Response: We appreciate the feedback from the commenter. We note 
that the AHIC is a federal advisory body, chartered in 2005 to make 
recommendations to the Secretary of the HHS on how to accelerate the 
development and adoption of health information technology. CMS plans to 
continue working through the AHIC and other entities to develop 
processes through which an EMR could speed the collection and minimize 
the resources necessary for quality reporting.
    We acknowledge the current differentiation between tools used to 
record and medical intervention and the current tools used to report 
and validate quality measures. CMS will continue to participate in 
appropriate HHS studies and workgroups, as mentioned by the GAO report 
about hospital quality data and their use of information technology. As 
appropriate, CMS will inform interested parties regarding progress in 
the implementation of HIT for the collection and submission of hospital 
quality data as specific steps, including timeframes and milestones, 
are identified. Current mechanisms include publication in the Federal 
Register as well as ongoing collaboration with external stakeholders 
such as the Hospital Quality Alliance, the American Hospital 
Association, the Federation of American Hospitals, the Association of 
American Medical Colleges; and The Joint Commission. We further 
anticipate that as HIT is implemented, a formal plan, including 
training, will be developed to assist providers in understanding and 
utilizing HIT in reporting. In addition, we will assess the 
effectiveness of our communications with providers and stakeholders as 
it relates to all information dissemination pertinent to collecting 
hospital quality data as part of an independent and comprehensive 
external evaluation of the RHQDAPU program.
7. New Hospitals
    In the FY 2008 IPPS proposed rule (72 FR 24809), we also proposed a 
minor change to our policies regarding new hospitals. In the FY 2006 
IPPS final rule, we noted that a new hospital should begin collecting 
and reporting data immediately, and to complete the registration 
requirements for the RHQDAPU program quality measures (70 FR 47421 and 
47428). We also explained that a new hospital would be held to the same 
standards as other established facilities when determining the expected 
number of discharges for the calendar quarters covered for each fiscal 
year. We also stated that fiscal intermediaries would provide 
information on new hospitals to the QIO in the state in which the 
hospital opened for operations as a Medicare provider, as soon as 
possible, so that the QIO could enter the provider information into its 
Program Resource System (PRS), and follow through with ensuring 
provider participation as the requirements for quality data reporting 
under this rule stipulate.
    We believe that some new hospitals have found it difficult to start 
reporting RHQDAPU measures immediately after signing up to participate 
in the RHQDAPU program. Therefore, we proposed to modify our policy to 
reduce the burden on new hospitals. We proposed that fiscal 
intermediaries would continue to provide information on the new 
hospital to the QIO in the state in which the hospital is located, as 
soon as possible, so that the QIO can enter the provider information 
into its PRS, and follow through with ensuring provider compliance with 
the requirements for quality data reporting. For a new hospital that 
receives a provider number on or after October 1 of each year 
(beginning with October 1, 2007), we proposed that the hospital be 
required to report RHQDAPU data beginning with the first day of the 
quarter following the date the hospital registered to participate in 
the RHQDAPU program. For example, a hospital that receives its MPN on 
October 2, 2007, and signs up to participate in RHQDAPU on November 1, 
2007, will be expected to meet all of the data submission requirements 
for discharges on or after January 1, 2008.
    In addition, for HCAHPS we strongly recommend the hospital 
participants in a dry run, if feasible, prior to beginning to collect 
HCAHPS data on an on-going basis to meet the RHQDAPU requirements. We 
refer readers to the Web site at http//www.hcahpsonline.org for a 
schedule of upcoming dry runs.
    Comment: One commenter supported the plan for new hospitals joining 
the RHQDAPU program. It is reasonable to have the hospitals begin 
reporting the first full quarter after inclusion in the program. The 
commenter recommended, however, that a clear appeals process be 
established should a hospital be unable to meet this standard.
    Response: We appreciate the commenter's support. As we continue to 
assess the RHQDAPU program, we plan to consider the commenter's 
suggestion.
    In summary, for the validation and submission requirements for the 
FY 2008 payment year, we plan to use the following criteria:
    <bullet> The 10 measure starter set for both submission and 
validation for 1st through 3rd quarters CY 2006 discharges
    <bullet> The additional 11 measures that make up the expanded 
measure set for both submission and validation for 3rd quarter CY 2006 
discharges
    <bullet> SCIP VTE 1, 2, and SCIP Infection 2 submissions only for 
1Q 2007 discharges only
    <bullet> HCAHPS measures, both submission of dry run data and 
continuous submissions beginning with July 2007 discharges
    <bullet> AMI and HF 30-day mortality measures
    For FY 2009 payment year, we plan to use the following criteria:
    <bullet> The 21 expanded measure set for submission and validation 
starting with 4th quarter CY 2006 (4Q06) through 3rd quarter CY 2007 
(3Q07) discharges
    <bullet> SCIP VTE 1, 2, and SCIP Infection 2 submission and 
validation for 2nd quarter CY 2007 and 3rd Quarter CY 2007 discharges
    <bullet> HCAHPS measures, continuous submission
    <bullet> AMI, HF, and PN 30-day mortality measures
    As we previously stated, we are not finalizing at this time the 
following measures that we proposed in the proposed IPPS FY 2008 rule:
    <bullet> SCIP Infection 4: Cardiac Surgery Patients with Controlled 
6AM Postoperative Serum Glucose
    <bullet> SCIP Infection 6: Surgery Patients with Appropriate Hair 
Removal
    <bullet> SCIP Infection 7: Colorectal Patients with Immediate 
Postoperative Normothermia
    <bullet> SCIP Cardiovascular-2: Surgery Patients on a Beta-Blocker 
Prior to Arrival Who Received a Beta-Blocker During the Perioperative 
Period
    As previously stated, we are adopting the validation process we 
proposed in the FY 2008 IPPS proposed rule in this FY 2008 IPPS final 
rule. We are also finalizing the proposed chart validation

[[Page 47367]]

requirements covering FY 2009 discharges for all of the FY 2009 
measures that we are finalizing in this final rule with comment period. 
Specifically, we will drop the current two-step process to determine if 
the hospital is submitting valid data starting with 1st quarter 2007 
discharges. Starting with FY 2009, we will also begin to pool 
validation estimates covering the 4 quarters (4th quarter CY 2006 
discharges through 3rd quarter 2007 discharges) in a similar manner to 
the current 3 quarter pooled confidence interval.
    We will include the SCIP Infection 4, SCIP Infection 6, and SCIP 
Cardiovascular 2 measures in our chart validation requirements for FY 
2009 if we finalize those measures in the CY 2008 OPPS final rule to be 
published in the Federal Register later this year. As discussed above, 
we also intend to adopt proposed SCIP Infection 7 if it is endorsed by 
NQF. When we determine to adopt this measure, we will do so through the 
rulemaking process.
    For FY 2008 and subsequent years, we are finalizing our proposal to 
require hospitals to begin to report the name and address of each 
hospital that shares the same MPN. This information would be gathered 
through the RHQDAPU program Notice of Participation form, which 
hospitals would submit to their QIOs by August 15, 2007. To increase 
transparency in public reporting and improve the usefulness of the 
Hospital Compare Web site, we will note on the Web site where publicly 
reported measures combine results from two or more hospitals.
    For FY 2008, a hospital must submit such a request for 
reconsideration on or before November 1, 2007. We are also establishing 
additional procedural rules that will govern RHQDAPU program 
reconsiderations. In addition to including information in this final 
rule with comment period, we will also post these rules on the 
QualityNet Exchange Web site at the same time as the publication of 
this final rule with comment period.
    If a hospital is dissatisfied with the result of a RHQDAPU program 
reconsideration decision, the hospital may file a claim under 42 CFR 
part 405, Subpart R (a Provider Reimbursement Review Board (PRRB) 
appeal).
    We are also finalizing our proposal that fiscal intermediaries will 
continue to provide information on the new hospital to the QIO in the 
state in which the hospital is located, as soon as possible, so that 
the QIO can enter the provider information into its PRS, and follow 
through with ensuring provider compliance with the requirements for 
quality data reporting. For a new hospital that receives a provider 
number on or after October 1 of each year (beginning with October 1, 
2007), we are finalizing our proposal that the hospital will be 
required to report RHQDAPU data for clinical and outcome measures 
beginning with the first day of the quarter following the date the 
hospital registered to participate in the RHQDAPU program. For example, 
a hospital that receives its MPN on October 2, 2007, and signs up to 
participate in RHQDAPU on November 1, 2007, will be expected to meet 
all of the data submission requirements for discharges on or after 
January 1, 2008. In addition, for HCAHPS we strongly recommend the 
hospital participates in a dry run, if feasible, prior to beginning to 
collect HCAHPS data on an ongoing basis to meet RHQDAPU requirements. 
We refer readers to the Web site at http://www.hcahpsonline.org for a 
schedule of upcoming dry runs.

B. Development of the Medicare Hospital Value-Based Purchasing Plan

    Section 5001(b) of the Deficit Reduction Act of 2005 (DRA) requires 
the Secretary of Health and Human Services to ``develop a plan to 
implement a value-based purchasing program for payments under the 
Medicare program for subsection (d) hospitals beginning with fiscal 
year 2009.'' Congress specified that the plan include consideration of 
the following issues:
    <bullet> The ongoing development, selection, and modification 
process for measures of quality and efficiency in hospital inpatient 
settings.
    <bullet> The reporting, collection, and validation of quality data.
    <bullet> The structure of value-based payment adjustments, 
including the determination of thresholds or improvements in quality 
that would substantiate a payment adjustment, the size of such 
payments, and the sources of funding for the value-based payments.
    <bullet> The disclosure of information on hospital performance.
    In developing the plan, the Secretary must consult with relevant 
affected parties, and consider experience with demonstrations that are 
relevant to the value-based purchasing program.
    To develop the mandated plan on behalf of the Secretary, CMS 
created an internal Hospital Value-Based Purchasing (VBP) Workgroup. 
The Workgroup was organized into four subgroups to address each of the 
required planning issues: (1) measures; (2) data collection and 
validation; (3) incentive structure; and (4) public reporting.
    CMS hosted two public ``Listening Sessions'' in early 2007 to 
solicit comments from relevant affected parties on outstanding 
questions associated with the development of a plan. The first 
Listening Session was held on January 17, 2007, to consider design 
questions. The second Listening Session was held on April 12, 2007, to 
consider plan options. The perspectives expressed by stakeholders, 
including hospitals, consumers, and purchasers, during these sessions 
and in writing were used to assist the Workgroup in drafting the 
Medicare Hospital VBP Plan Report to Congress. Once the Report is 
submitted to Congress, CMS will post it on the CMS Web site.
    Comment: Numerous commenters were supportive of the basic concepts 
included in the plan options and many commended CMS on its efforts to 
obtain stakeholder input during the planning process. The commenters 
urged CMS to continue this active dialogue once the Medicare Hospital 
VBP Plan is publicly released.
    The commenters addressed five principal themes:
    <bullet> Proposed Measure Set. Several commenters stressed the 
importance of maintaining a stable measure set and measure 
specifications to provide a consistent basis for measuring improvement. 
A few commenters addressed the value of focusing on health outcomes and 
on evaluating resource consumption in achieving desired outcomes. A 
number of commenters made recommendations on specific measures and on 
establishing thresholds and benchmarks.
    <bullet> Data Submission and Validation Process. A few commenters 
expressed concern about the proposed accelerated timeframe for data 
submission, and several commenters had suggestions for further 
strengthening the proposed new approach to data validation.
    <bullet> Phased Approach to Transition from RHQDAPU to VBP. A 
number of commenters stressed the importance of a phased transition so 
that hospitals will have notice before the first ``measurement year'' 
begins.
    <bullet> Proposed Incentive Structure. Several commenters urged 
that the dollars at risk be limited, given the limited experience with 
VBP and encouraged CMS to distribute all unearned incentives to 
hospitals.
    <bullet> Possible Roles for Medicare Quality Improvement 
Organizations (QIOs) in VBP. A few commenters recommended that QIOs 
support performance improvement in lower-performing

[[Page 47368]]

hospitals to ensure that successful practices are shared.
    Response: These comments are similar to those that CMS received on 
the plan options during the April 12, 2007 Listening Session and in 
written comments. We appreciate the careful thought, and in one 
instance detailed analysis, devoted to providing these comments. The 
comments will be useful as we consider a Medicare Hospital VBP Plan. We 
welcome continued dialog with stakeholders regarding the challenges and 
opportunities in the development of a plan to implement a Medicare VBP 
program for hospitals.

C. Rural Referral Centers (RRCs) (Sec.  412.96)

    Under the authority of section 1886(d)(5)(C)(i) of the Act, the 
regulations at Sec.  412.96 set forth the criteria that a hospital must 
meet in order to qualify under the IPPS as an RRC. For discharges 
occurring before October 1, 1994, RRCs received the benefit of payment 
based on the other urban standardized amount rather than the rural 
standardized amount. Although the other urban and rural standardized 
amounts are the same for discharges occurring on or after October 1, 
1994, RRCs continue to receive special treatment under both the DSH 
payment adjustment and the criteria for geographic reclassification.
    Section 402 of Pub. L. 108-173 raised the DSH adjustment for other 
rural hospitals with less than 500 beds and RRCs. Other rural hospitals 
with less than 500 beds are subject to a 12-percent cap on DSH 
payments. RRCs are not subject to the 12 percent cap on DSH payments 
that is applicable to other rural hospitals (with the exception of 
rural hospitals with 500 or more beds). RRCs are not subject to the 
proximity criteria when applying for geographic reclassification, and 
they do not have to meet the requirement that a hospital's average 
hourly wage must exceed 106/108 percent of the average hourly wage of 
the labor market area where the hospital is located.
    Section 4202(b) of Pub. L. 105-33 states, in part, ``[a]ny hospital 
classified as an RRC by the Secretary * * * for fiscal year 1991 shall 
be classified as such an RRC for fiscal year 1998 and each subsequent 
year.'' In the August 29, 1997 final rule with comment period (62 FR 
45999), we reinstated RRC status for all hospitals that lost the status 
due to triennial review or MGCRB reclassification, but did not 
reinstate the status of hospitals that lost RRC status because they 
were now urban for all purposes because of the OMB designation of their 
geographic area as urban. However, subsequently, in the August 1, 2000 
final rule (65 FR 47089), we indicated that we were revisiting that 
decision. Specifically, we stated that we would permit hospitals that 
previously qualified as an RRC and lost their status due to OMB 
redesignation of the county in which they are located from rural to 
urban to be reinstated as an RRC. Otherwise, a hospital seeking RRC 
status must satisfy the applicable criteria. We used the definitions of 
``urban'' and ``rural'' specified in Subpart D of 42 CFR Part 412.
1. Annual Update of RRC Status Criteria
    One of the criteria under which a hospital may qualify as RRC is to 
have 275 or more beds available for use (Sec.  412.96(b)(1)(ii)). A 
rural hospital that does not meet the bed size requirement can qualify 
as an RRC if the hospital meets two mandatory prerequisites (a minimum 
CMI and a minimum number of discharges), and at least one of three 
optional criteria (relating to specialty composition of medical staff, 
source of inpatients, or referral volume) (Sec.  412.96(c)(1) through 
(c)(5) and the September 30, 1988 Federal Register (53 FR 38513)). With 
respect to the two mandatory prerequisites, a hospital may be 
classified as an RRC if--
    <bullet> The hospital's CMI is at least equal to the lower of the 
median CMI for urban hospitals in its census region, excluding 
hospitals with approved teaching programs, or the median CMI for all 
urban hospitals nationally; and
    <bullet> The hospital's number of discharges is at least 5,000 per 
year, or, if fewer, the median number of discharges for urban hospitals 
in the census region in which the hospital is located. (The number of 
discharges criterion for an osteopathic hospital is at least 3,000 
discharges per year, as specified in section 1886(d)(5)(C)(i) of the 
Act.)
a. Case-Mix Index
    Section 412.96(c)(1) provides that CMS establish updated national 
and regional CMI values in each year's annual notice of prospective 
payment rates for purposes of determining RRC status. The methodology 
we used to determine the national and regional CMI values is set forth 
in the regulations at Sec.  412.96(c)(1)(ii). The national median CMI 
value for FY 2008 includes all urban hospitals nationwide, and the 
regional values for FY 2008 are the median CMI values of urban 
hospitals within each census region, excluding those hospitals with 
approved teaching programs (that is, those hospitals receiving indirect 
medical education payments as provided in Sec.  412.105(f)). These 
values are based on discharges occurring during FY 2006 (October 1, 
2005 through September 30, 2006), and include bills posted to CMS' 
records through March 2007.
    In the FY 2008 IPPS proposed rule (72 FR 24811), we proposed that, 
in addition to meeting other criteria, if rural hospitals with fewer 
than 275 beds are to qualify for initial RRC status for cost reporting 
periods beginning on or after October 1, 2007, they must have a CMI 
value for FY 2006 that is at least--
    <bullet> 1.2258; or
    <bullet> The median CMI value (not transfer-adjusted) for urban 
hospitals (excluding hospitals with approved teaching programs as 
identified in Sec.  412.105(f)) calculated by CMS for the census region 
in which the hospital is located.
    Based on the latest available data (FY 2006 bills received through 
March 2007), in addition to meeting other criteria, if rural hospitals 
with fewer than 275 beds are to qualify for initial RRC status for cost 
reporting periods beginning on or after October 1, 2007, they must have 
a CMI value for FY 2006 that is at least--
    <bullet> 1.4049; or
    <bullet> The median CMI value (not transfer-adjusted) for urban 
hospitals (excluding hospitals with approved teaching programs as 
identified in Sec.  412.105(f)) calculated by CMS for the census region 
in which the hospital is located.
    The final median CMI values by region are set forth in the 
following table:

------------------------------------------------------------------------
                                                          Case-mix index
                         Region                                value
------------------------------------------------------------------------
1. New England (CT, ME, MA, NH, RI, VT).................          1.2348
2. Middle Atlantic (PA, NJ, NY).........................          1.2665
3. South Atlantic (DE, DC, FL, GA, MD, NC, SC, VA, WV)..          1.3515
4. East North Central (IL, IN, MI, OH, WI)..............          1.3393
5. East South Central (AL, KY, MS, TN)..................          1.2904
6. West North Central (IA, KS, MN, MO, NE, ND, SD)......          1.2869
7. West South Central (AR, LA, OK, TX)..................          1.4010
8. Mountain (AZ, CO, ID, MT, NV, NM, UT, WY)............          1.4260
9. Pacific (AK, CA, HI, OR, WA).........................          1.3772
------------------------------------------------------------------------

    Hospitals seeking to qualify as RRCs or those wishing to know how 
their CMI value compares to the criteria should obtain hospital-
specific CMI values (not transfer-adjusted) from their fiscal 
intermediaries. Data are available on the Provider Statistical and 
Reimbursement

[[Page 47369]]

(PS&R) System. In keeping with our policy on discharges, these CMI 
values are computed based on all Medicare patient discharges subject to 
the IPPS DRG-based payment.
b. Discharges
    Section 412.96(c)(2)(i) provides that CMS set forth the national 
and regional numbers of discharges in each year's annual notice of 
prospective payment rates for purposes of determining RRC status. As 
specified in section 1886(d)(5)(C)(ii) of the Act, the national 
standard is set at 5,000 discharges. In the FY 2008 IPPS proposed rule, 
we proposed to update the regional standards based on discharges for 
urban hospitals' cost reporting periods that began during FY 2004 (that 
is, October 1, 2003 through September 30, 2004), which was the latest 
available cost report data we had at that time.
    Therefore, in the FY 2008 IPPS proposed rule (72 FR 24811), we 
proposed that, in addition to meeting other criteria, a hospital, if it 
is to qualify for initial RRC status for cost reporting periods 
beginning on or after October 1, 2007, must have as the number of 
discharges for its cost reporting period that began during FY 2004 a 
figure that is at least --
    <bullet> 5,000 (3,000 for an osteopathic hospital); or
    <bullet> The median number of discharges for urban hospitals in the 
census region in which the hospital is located. (See the table set 
forth in the FY 2008 IPPS proposed rule at 72 FR 24811.)
    Based on the latest discharge data available at this time, that is, 
for cost reporting periods that began during FY 2004, the final median 
number of discharges for urban hospitals by census region are set forth 
in the following table:

------------------------------------------------------------------------
                                                             Number of
                         Region                             discharges
------------------------------------------------------------------------
1. New England (CT, ME, MA, NH, RI, VT).................           7,758
2. Middle Atlantic (PA, NJ, NY).........................          10,603
3. South Atlantic (DE, DC, FL, GA, MD, NC, SC, VA, WV)..          10,627
4. East North Central (IL, IN, MI, OH, WI)..............           9,325
5. East South Central (AL, KY, MS, TN)..................           7,966
6. West North Central (IA, KS, MN, MO, NE, ND, SD)......           7,986
7. West South Central (AR, LA, OK, TX)..................           7,225
8. Mountain (AZ, CO, ID, MT, NV, NM, UT, WY)............           9,082
9. Pacific (AK, CA, HI, OR, WA).........................           8,439
------------------------------------------------------------------------

    We note that the median number of discharges for hospitals in each 
census region is greater than the national standard of 5,000 
discharges. Therefore, 5,000 discharges is the minimum criterion for 
all hospitals.
    We reiterate that, if an osteopathic hospital is to qualify for RRC 
status for cost reporting periods beginning on or after October 1, 
2007, the hospital would be required to have at least 3,000 discharges 
for its cost reporting period that began during FY 2004.
    Comment: Two commenters asked about the CMI values, stating that 
the values seem to have risen inexplicably in recent years, and the 
proposed FY 2008 national value is higher than the regional values, 
which is counter-intuitive given the national value includes teaching 
hospitals and the regional values do not.
    Response: The method for calculating the CMI values for the RRC 
criteria has not changed. The rise in CMI values over the years may be 
due to an increase in the severity of inpatient cases and perhaps to 
improvements in the coding of such cases. Regarding the proposed FY 
2008 national CMI value being lower than the regional CMI values, the 
national CMI value in the proposed rule was erroneous. The proposed FY 
2008 national median CMI value should have read 1.4039. The final FY 
2008 national median CMI value (1.4049) is higher than each of the 
regional median CMI values, except the Mountain region median CMI 
value, set forth in the table above. With respect to the national 
median CMI value being slightly lower than the Mountain region CMI 
value, we note that these values are medians, not means. Therefore, the 
national and regional medians are affected by the distribution of each 
hospital's CMI within each region and nationally.
2. Acquired Rural Status and RRCs (Sec.  412.103(g))
    With the following exceptions, a hospital must be rural to qualify 
as an RRC:
    <bullet> Consistent with section 4202(b) of Pub. L. 105-33, any 
hospital designated as an RRC in FY 1991 retains that status for FY 
1998 and each subsequent year.
    <bullet> Hospitals located in a rural county that would have lost 
their RRC status as a result of an OMB redesignation of the area from 
rural to urban were permitted to remain as RRCs (69 FR 49056).
    <bullet> Hospitals located in urban areas that apply for 
reclassification as rural under Sec.  412.103 (that is, the hospital is 
located in an urban area but it ``acquires'' rural status under the 
regulations) also may qualify as an RRC.
    Under Sec.  412.103(g), a hospital may cancel its rural 
reclassification by submitting a written request to the CMS Regional 
Office no less than 120 days prior to the end of its current cost 
reporting period. A hospital may choose to cancel its acquired rural 
status if it determines that it may be more financially beneficial to 
return to urban status and the associated IPPS payments rather than 
remain rural and receive the special treatments of certain rural 
providers such as RRCs, SCHs and CAHs. The hospital's acquired rural 
status is canceled beginning with its next cost reporting period. We 
have received inquiries asking whether a hospital retains its RRC 
status once it voluntarily cancels its acquired rural status.
    As indicated above, a hospital generally must be rural to be 
classified as an RRC. However, a hospital may retain its RRC status in 
the special circumstances where it would have lost status due to OMB 
redesignation of its area from rural to urban, or where it was already 
designated as an RRC in 1991. In these situations, there were either 
special statutory provisions that require the hospital to retain its 
RRC status or the hospital's geographic status changed from rural to 
urban through no action of its own.
    We do not believe that an urban hospital that acquires rural status 
under Sec.  412.103 and subsequently is approved as an RRC should be 
able to retain the benefits of being an RRC when it voluntarily cancels 
that acquired rural status. In our view, it follows from the 
requirement that an RRC must be located in a rural area that 
cancellation of acquired rural status negates a hospital's RRC 
designation. Therefore, we believe that Medicare's policy should be 
that a hospital cannot continue to be classified as an RRC once it 
cancels acquired rural status under Sec.  412.103. For this reason in 
the FY 2008 IPPS proposed rule (72 FR 24812), we stated that a hospital 
that cancels its acquired rural status, received under Sec.  412.103, 
would also lose its RRC designation under Sec.  412.96. In this 
situation, the hospital would lose its RRC designation under Sec.  
412.96 as of the date the cancellation of its acquired rural status 
takes effect.
    As indicated above, RRCs are not subject to a maximum DSH 
adjustment of 12 percent that applies to other rural hospitals with 
less than 500 beds. Further, RRCs are not subject to the proximity 
criteria when applying for geographic reclassification (Sec.  
412.230(a)(3)), and they do not have to meet certain wage comparison 
tests for reclassification (Sec.  412.230(d)(1)(iii)).

[[Page 47370]]

A hospital located in an urban area that cancels its acquired rural 
status under Sec.  412.103 would lose its RRC status and become subject 
to a 12-percent cap on the DSH adjustment applicable to urban hospitals 
with less than 100 beds (if the hospital has 100 beds or more, it would 
not be subject to the cap on the DSH adjustment). Further, the hospital 
would also have to meet the proximity requirement for geographic 
reclassification at Sec.  412.230(a)(3). We note that the hospital 
would maintain the benefit of being exempt from the average hourly wage 
criterion for geographic reclassification requiring the comparison of 
the hospital's wages to the wages of the area in which it is located, 
as stated in section 1886(d)(10)(D)(iii) of the Act.
    Comment: One commenter stated that a hospital located in an urban 
area may also qualify as an RRC if it meets the criteria set forth in 
42 CFR 412.96(b)(2). These criteria specify referral patterns the 
hospital's patients must meet in order for an urban hospital to be a 
referral center. The commenter requested that the final rule confirm 
that an urban hospital may also qualify as an RRC under Sec.  
412.96(b)(2).
    Response: The regulations at Sec.  412.96(b)(2) do specify criteria 
for a hospital to qualify as a ``referral center,'' with no requirement 
to be rural. However, an urban hospital that qualifies as a referral 
center under Sec.  412.96(b)(2) is not a ``rural'' referral center 
(RRC). Section 1886(d)(5)(C)(i) of the Act states that a hospital that 
is classified as a ``rural hospital'' may apply to the Secretary to be 
classified as an RRC. Thus, an urban hospital that meets the criteria 
under Sec.  412.96(b)(2) qualifies as a referral center but does not 
qualify as an RRC because it is not rural (unless it first reclassifies 
as rural under Sec.  412.103).
    Comment: One commenter stated that this policy would prohibit urban 
hospitals that acquire rural status from maintaining their RRC 
designation if they are subsequently reclassified as urban by the 
MGCRB. The commenter indicated that the policy creates a significant 
disadvantage for urban hospitals that acquire rural status and to the 
Medicare beneficiaries they serve, relative to their RRC counterparts 
that retain the status of RRC even though physically located in an 
urban area.
    Response: We believe the commenter is generally concerned with the 
policy that an urban hospital that has acquired rural status cannot 
retain its RRC designation once it cancels its acquired rural status. 
As indicated above, a hospital generally must be rural to be classified 
as an RRC. For this reason, we believe that Medicare's policy should be 
that a hospital cannot continue to be classified as an RRC once it 
cancels acquired rural status under Sec.  412.103. In our view, it 
follows from the requirement that an RRC must be located in a rural 
area that cancellation of acquired rural status negates a hospital's 
RRC designation. As discussed above, a hospital may retain its RRC 
status in the special circumstances where it would have lost status due 
to OMB's designation of its area from rural to urban, or where it was 
already designated as an RRC in 1991. In these situations, there were 
either special statutory provisions that require the hospital to retain 
its RRC status or the hospital's geographic status changed from rural 
to urban through no action of its own. Again, we do not believe that an 
urban hospital that acquires rural status under Sec.  412.103 and 
subsequently is approved as an RRC should be able to retain the 
benefits of being an RRC when it voluntarily cancels that acquired 
rural status.
    Furthermore, in response to the commenter's statement that this 
policy prohibits urban hospitals that acquire rural status from 
maintaining their RRC designation if they are subsequently reclassified 
as urban by the MGCRB, we note that Sec.  412.230(a)(5)(iii) of the 
regulations prohibits an urban hospital that has been granted rural 
status under Sec.  412.103 from receiving an additional 
reclassification by the MGCRB based on this acquired rural status for a 
year in which such redesignation under Sec.  412.103 is in effect. 
Therefore, under our current regulations, an urban hospital that has 
acquired rural status cannot be reclassified by the MGCRB. As discussed 
above, if an RRC with acquired rural status cancels its acquired rural 
status so that it can be reclassified by the MGCRB, the hospital would 
lose its RRC status once it cancels its acquired rural status.
    Comment: Some commenters pointed to language in the Federal 
Register (August 1, 2000; 65 FR 47087) regarding section 401 of Pub. L. 
106-113, on which the regulations at 42 CFR 412.103 are based. The 
commenters stated that certain discussions in the preamble to that 
August 1, 2000 rule demonstrate that a hospital acquiring rural status 
should retain RRC status for all purposes, even if it subsequently 
cancels the acquired rural status. In addition, the commenters stated 
that our previous amendment of Sec.  412.96 to eliminate the triennial 
review requirement indicates an intent to allow all hospitals to retain 
RRC status indefinitely once obtained under Sec.  412.96.
    Response: The discussion in the August 1, 2000 Federal Register 
referenced by the commenters was targeted at hospitals that had lost 
their RRC status through an OMB change in geographic area definitions, 
through triennial review, or through an MGCRB reclassification for 
purposes of the standardized amount. Thus, in the August 1, 2000 
Federal Register, we discussed grandfathering into RRC status any 
hospital that lost RRC designation as a result of OMB's new geographic 
areas, due to an MGCRB standardized amount reclassification, or through 
triennial review. At the time, the discussion did not address hospitals 
that, in the future, would acquire rural status under Sec.  412.103, 
only to voluntarily cancel such acquired status at a later date.
    In addition, the discussion addressed the rule that hospitals 
acquiring rural status under Sec.  412.103 cannot receive an additional 
reclassification by the MGCRB based on this acquired rural status for a 
year in which such a redesignation is in effect. This rule prevents an 
urban to rural reclassification under Sec.  412.103 from becoming a 
vehicle by which a hospital navigates from one geographic location and 
special status as a rural provider for the purpose of a more 
advantageous reclassification via the MGCRB process. The prohibition 
against a hospital that acquires rural status from exploiting such 
status to further seek an MGCRB reclassification demonstrates our 
longstanding view that section 401 of Pub. L. 106-113 should not be 
used as a way of acquiring special status solely to benefit from MGCRB 
rules. Similarly, we do not believe that acquiring rural status and 
then subsequently canceling it should be used as a way to exploit MGCRB 
reclassification rules.
    Rather, in the August 1, 2000 rulemaking, we implemented section 
401 of Pub. L. 106-113 by specifying three categories of hospitals 
which would essentially be grandfathered in as RRCs: those that lost 
RRC status due to (a) triennial review, (b) MGCRB standardized amount 
reclassification, or (c) OMB redesignation of the county in which they 
were located from rural to urban. The first and second categories of 
hospitals no longer exist, as we do not conduct triennial review and 
there are no MGCRB reclassifications for purposes of the standardized 
amount. As for the third category of hospitals, we have retained the 
rule that hospitals redesignated as urban through no action of their 
own, and solely through an OMB redesignation of an area as urban would 
continue to be considered RRCs if they were RRCs prior to the change in

[[Page 47371]]

geographic areas. Our rulemaking from August 1, 2000 was intended to 
ensure that the hospitals for which Congress intended to preserve RRC 
status (that is, those that lost RRC designation through an OMB 
geographic area redefinition, triennial review, or MGCRB standardized 
amount reclassification) would continue their RRC status. However, it 
was not intended to allow hospitals to exploit acquired rural status in 
order to seek the most advantageous MGCRB reclassification. Indeed, the 
rule we added to Sec.  412.230 limiting hospitals that reclassify under 
Sec.  412.103 from further reclassifying (65 FR 47087 through 47089) 
demonstrates this policy. Therefore, we believe the policy we discussed 
in this year's proposed rule--that a hospital that voluntarily cancels 
acquired rural status can no longer be considered a ``rural'' referral 
center--is fully consistent with our August 1, 2000 rulemaking.
    Furthermore, our amendment to the regulations eliminating the 
triennial review requirement was not intended to allow hospitals to 
retain RRC status indefinitely once obtained under Sec.  412.96. We 
eliminated the triennial review requirement in the August 29, 1997 
final rule (62 FR 45998 through 46000). In that rule, we addressed 
section 4202(b)(1) of Pub. L. 105-33, which states in part, ``Any 
hospital classified as a rural referral center by the Secretary * * * 
for FY 1991 shall be classified as such a rural referral center for 
fiscal year 1998 and each subsequent fiscal year.'' In the August 29, 
1997 rule, we noted that section 4202(b)(1) of Pub. L. 105-33 provided 
reinstatement to only those hospitals that were classified as RRCs 
during FY 1991. As a result, those hospitals that were RRCs in FY 1991 
and lost RRC status due to triennial review would be reinstated to RRC 
status; whereas, those hospitals that were classified as RRCs after FY 
1991 and lost that status due to triennial review would not be 
protected. We stated that we did not believe that it was equitable or 
administratively practical to maintain two lists of referral centers; 
that is, (a) a list of those hospitals that lost RRC status due to 
triennial review but were then reinstated under section 4202(b)(1) of 
Pub. L. 105-33 because they were approved as RRCs in FY 1991; and (b) a 
list of those hospitals that lost RRC status due to triennial review, 
but were not protected by section 4202(b)(1) because they were approved 
as RRCs after FY 1991. Therefore, we terminated the triennial review 
requirement and reinstated all hospitals that lost RRC status due to 
triennial review. In addition, in the August 29, 1997 final rule, we 
stated that we could still reinstate some type of annual or periodic 
qualifying criteria and remove a hospital's RRC status if we discovered 
that some hospital or class of hospitals should not be allowed to 
retain referral center status because they fail to meet some basic 
requirement that we believe is essential to receiving this special 
designation. As indicated above, a hospital generally must be rural to 
be classified as an RRC. It follows from the requirement that an RRC 
must be located in a rural area that cancellation of acquired rural 
status negates a hospital's RRC designation.
    Comment: One commenter agreed with the policy discussed in the 
proposed rule that a hospital that cancels its acquired rural status 
should no longer qualify to be an RRC.
    Response: We appreciate the commenter's support.
    In this FY 2008 IPPS final rule, we are again announcing our policy 
that a hospital that cancels its acquired rural status under Sec.  
412.103 would also lose its RRC designation under Sec.  412.96. Under 
this final policy, any hospital that submits a written request on or 
after October 1, 2007, to cancel its acquired rural status under Sec.  
412.103(g) will lose RRC status (obtained based on rural status 
acquired under Sec.  412.103) as of the same date that the cancellation 
of acquired rural status under Sec.  412.103(g) takes effect. We are 
amending the regulations text at Sec.  412.96 by adding a paragraph 
(g)(4) that states: ``A hospital that submits a written request on or 
after October 1, 2007, to cancel its reclassification under Sec.  
412.103(g) is deemed to have cancelled its status as a rural referral 
center effective on the same date the cancellation under Sec.  
412.103(g) takes effect. This provision of this paragraph (g)(4) 
applies to hospitals that qualify as rural referral centers under Sec.  
412.96 based on rural status acquired under Sec.  412.103.''
    We note that the policy set forth in Sec.  412.96(g)(4) applies 
only to hospitals that obtain RRC status based on rural status acquired 
under Sec.  412.103. For example, in the FY 2001 IPPS final rule (65 FR 
47089) and the FY 2005 IPPS final rule (69 FR 49056), we permitted a 
hospital that previously qualified as an RRC and lost its status as an 
RRC due to OMB's redesignation of the county in which it is located 
from rural to urban to be reinstated as an RRC (even though the area in 
which it is geographically located is now urban). Section 412.96(g)(4) 
would not apply to a hospital that has RRC status based on this policy 
regarding OMB redesignations and that also has acquired rural status 
under Sec.  412.103 for other purposes (for example, to become an SCH). 
In this situation, the hospital did not obtain RRC status based on 
acquired rural status under Sec.  412.103, but instead based on the 
policies described in our FY 2001 and FY 2005 final rules regarding OMB 
redesignations.
    In the FY 2008 IPPS proposed rule (72 FR 24812), we also proposed 
to revise the regulations at Sec.  412.103(g) with respect to when 
cancellation of acquired rural status becomes effective. Currently, 
Sec.  412.103(g)(2) states, ``The hospital's cancellation of the 
classification is effective beginning with the hospital's next full 
cost reporting period following the date of its request for 
cancellation.'' To address concerns that some IPPS hospitals are 
acquiring rural status solely to benefit from reclassification rules 
applying to hospitals that were once RRCs, and then canceling that 
rural status within a short period of time, such as a few months, we 
proposed to require IPPS hospitals to retain acquired rural status for 
at least one 12-month cost reporting period. In the FY 2008 IPPS 
proposed rule, we stated that if the hospital chooses to cancel its 
rural reclassification, the effective date of that cancellation would 
occur both after at least one 12-month cost reporting period and at the 
start of the next Federal fiscal year. Thus, for example, if a hospital 
with a cost reporting period from July 1, 2008 to June 30, 2009, 
becomes rural on May 30, 2008, its acquired rural status under Sec.  
412.103 would remain in effect from May 30, 2008, through at least 
September 30, 2009 (that is, the date it acquired rural status through 
the end of the fiscal year containing a 12-month cost reporting 
period). We stated that we believed this policy was reasonable, given 
that acquired rural status for IPPS hospitals should be a considered 
decision for hospitals that truly wish to be considered as rural, and 
not purely as a mechanism for reclassifying. We did not propose a 
duration requirement for hospitals paid under cost reimbursement 
because we are not aware of similar manipulations of rural status in 
these cases.
    We proposed to change our current policy by revising Sec.  
412.103(g) to specify that a hospital's cancellation of its acquired 
rural status under Sec.  412.103 is effective for hospitals under 
reasonable cost reimbursement (such as CAHs) with the hospital's next 
cost reporting period and for hospitals under the IPPS after at least 
one 12-month cost reporting period as rural, and not until the 
beginning of a Federal fiscal year following both the request for 
cancellation and the 12-month cost

[[Page 47372]]

reporting period. Under the proposed revised regulations, an IPPS 
hospital (such as an RRC or SCH) that cancels its acquired rural status 
would continue to be paid as rural until the beginning of the next 
Federal fiscal year after at least one 12-month cost reporting period 
as rural. In addition, for these IPPS hospitals, the deadline for 
seeking cancellation of the acquired rural status would be no less than 
120 days before the end of the fiscal year.
    Comment: One commenter raised concerns regarding the proposed 
requirement that a hospital maintain rural status for at least a full 
12 months, stating that the rate as a rural SCH may be only slightly 
higher than the urban Federal rate. The commenter believes that changes 
that positively impact the hospital's urban payment rate or negatively 
impact the rural payment rate could cause a hospital the need to cancel 
its rural status, and that in these cases, it seems that the proposed 
time lag/expansion could cause a hospital to be harmed.
    Response: After considering the commenter's concerns regarding 
hospitals that acquire rural status to become SCHs, and considering 
that our primary purpose in revising the policy is to address concerns 
regarding hospitals that acquire rural status to become RRCs and then 
cancel RRC status after a brief period of time, such as a few months, 
in order to take advantage of favorable reclassification rules under 
Sec.  412.230 applicable to hospitals that were ever RRCs, we have 
decided to limit our final policy to IPPS hospitals that obtain RRC 
status based on rural status acquired under Sec.  412.103. Therefore, 
in this final rule, we are requiring an IPPS hospital that is 
classified as an RRC based on rural status acquired under Sec.  412.103 
to maintain its acquired rural status under Sec.  412.103 for at least 
one 12-month cost reporting period and until the next Federal fiscal 
year following both its request for cancellation of acquired rural 
status and at least one 12-month cost reporting period as rural.
    RRCs benefit only from special provisions in the statute relating 
to geographic reclassification and DSH. A hospital that is in acquired 
rural status cannot be geographically reclassified by the MGCRB (Sec.  
412.230). Therefore, the only benefit to an RRC in acquired rural 
status relates to DSH (and only if the hospital has less than 100 
beds). Thus, there is limited or no benefit to a hospital acquiring 
rural status in order to become an RRC, except when the acquired rural 
status is subsequently canceled. Thus, the issue is that hospitals 
should not be permitted to obtain rural status solely for the purpose 
of canceling such status as soon as possible in order to benefit from 
favorable MGCRB reclassification rules, but, rather, should be required 
to retain rural status for a reasonable period of time. Therefore, we 
believe that a policy requiring an IPPS hospital that acquires rural 
status under Sec.  412.103, in order to become an RRC, to maintain 
acquired rural status for at least one 12-month cost reporting period 
and until the next Federal fiscal year is reasonable.
    Comment: Two commenters questioned the CMS statement that this 
proposed change would be consistent with IPPS policy that makes changes 
prospectively based on the Federal fiscal year. They stated that many 
rural elections under IPPS are not based on the Federal fiscal year, 
such as acquiring SCH or MDH status, among others. They stated they do 
not see how this proposed revision serves the Medicare program, and do 
not believe CMS has adequately explained the need for such a revision. 
They requested CMS not adopt this provision in the final rule.
    Response: Section 1886(d)(8)(E) of the Act specifies that the 
effective date of acquired rural status is not later than 60 days after 
the receipt of the hospital's application. Therefore, under the 
statute, a hospital paid under the IPPS may acquire rural status in the 
middle of a Federal fiscal year, and then receive any payment 
advantages (or disadvantages) that accompany rural status. In most 
cases, a hospital will acquire rural status because of the long-term 
financial benefits it expects to reap. We recognize that for hospitals 
paid under the IPPS system, there may be a short-term cost if the 
hospital must accept a lower rural wage index from the time the 
hospital acquires rural status to the time the hospital is approved as 
an RRC, SCH or MDH. However, we note that acquiring rural status is a 
voluntary choice, and presumably hospitals balance the long-term 
financial benefits that accrue from RRC, SCH or MDH status against the 
costs arising from a lower rural wage index.
    As we discussed above, our primary concern is with IPPS hospitals 
that acquire rural status to become RRCs and then cancel acquired rural 
status after a brief period of time in order to take advantage of 
special MGCRB reclassification rules. Therefore, we have decided to 
apply our new policy only to IPPS hospitals that obtain RRC status 
based on acquired rural status under Sec.  412.103. As noted above, 
there is limited or no benefit to a hospital acquiring rural status in 
order to become an RRC, except when the acquired rural status is 
subsequently cancelled. Thus, the issue is that such hospitals should 
not be permitted to obtain rural status solely for the purpose of 
canceling such status as soon as possible in order to benefit from 
favorable MGCRB reclassification rules, but, rather, should be required 
to retain rural status for a reasonable period of time. We believe that 
a policy requiring an IPPS hospital that acquires rural status under 
Sec.  412.103 in order to become an RRC, to maintain acquired rural 
status for at least one 12-month cost reporting period and until the 
next Federal fiscal year is reasonable. As noted above, acquiring rural 
status is a voluntary choice. A hospital should make a decision on 
whether to acquire rural status to become an RRC based on its own 
assessment of the financial impact on the hospital in the long term. 
There is administrative burden to both the hospital and CMS from 
acquiring rural status, and we do not believe that such hospitals 
should be able to change their status after only a short period of 
time, such as a few months. Furthermore, we believe that requiring such 
hospitals to maintain acquired rural status, and the associated wage 
index change, until the beginning of the next Federal fiscal year 
(after at least one 12-month cost reporting period as rural), rather 
than the beginning of the next cost reporting period, is consistent 
with the IPPS that generally makes changes prospectively on a Federal 
fiscal year basis.
    Finally, we note that while section 1886(d)(8)(E) of the Act 
governs the start-date of acquiring rural status (that is, not later 
than 60 days after receipt of an application in a form and manner 
determined by the Secretary), it does not address the end-date of such 
acquired rural status. We believe we have the general rulemaking 
authority (including under section 1871 of the Act) to specify the 
required longevity of acquired rural status, especially when it has 
become apparent that hospitals may be acquiring rural status for a very 
short period of time solely in order to take advantage of special MGCRB 
reclassification rules that accrue to hospitals that were ever an RRC. 
Therefore, in light of the comments and after further consideration, we 
are finalizing the policy announced in the proposed rule with the 
revisions discussed above limiting the policy to IPPS hospitals that 
become RRCs based on rural status acquired under Sec.  412.103.
    We are finalizing a revision to Sec.  412.103(g) to specify that 
for a hospital that obtains RRC status based on acquired rural status 
under Sec.  412.103, the hospital's cancellation of its

[[Page 47373]]

acquired rural status under Sec.  412.103 is effective after at least 
one 12 month cost reporting period as rural, and not until the 
beginning of a Federal fiscal year following both the request for 
cancellation and the 12-month cost reporting period. Under the revised 
regulations, if an IPPS hospital that obtained its RRC status based on 
rural status acquired under Sec.  412.103 cancels its acquired rural 
status, it would continue to be paid as rural until the beginning of 
the next Federal fiscal year after at least one 12 month cost reporting 
period as rural. In addition, for these RRCs, the deadline for seeking 
cancellation of the acquired rural status would be no less than 120 
days before the end of the current Federal fiscal year.
    This rule applies to all such hospitals (that is, hospitals that 
became RRCs based on rural status acquired under Sec.  412.103) that 
submit a written request on or after October 1, 2007, to cancel their 
acquired rural status, whether they are in acquired rural status before 
October 1, 2007, or acquire rural status on or after October 1, 2007. 
Thus, if such a hospital submits a written request on or after October 
1, 2007, to cancel its acquired rural status, the effective date of 
cancellation would be after at least one 12 month cost reporting period 
as rural and at the beginning of the next Federal fiscal year. If such 
a hospital submits a written request before October 1, 2007, to cancel 
its acquired rural status, the hospital is subject to the pre-FY 2008 
rule, and the effective date of cancellation would be the beginning of 
its next cost reporting period (given it submits the written request 
not less than 120 days prior to the end of its current cost reporting 
period).
    For all other hospitals (that is, hospitals other than IPPS 
hospitals that became RRCs based on acquired rural status under Sec.  
412.103), the effective date of cancellation of acquired rural status 
under Sec.  412.103 will continue to be the beginning of the hospital's 
next full cost reporting period following the date of its request for 
cancellation (given it submits the written request not less than 120 
days prior to the end of its current cost reporting period).

D. Indirect Medical Education (IME) Adjustment (Sec.  412.105)

1. Background
    Section 1886(d)(5)(B) of the Act provides for an additional payment 
amount under the IPPS for hospitals that have residents in an approved 
graduate medical education (GME) program in order to reflect the higher 
indirect patient care costs of teaching hospitals relative to 
nonteaching hospitals. The regulations regarding the calculation of 
this additional payment, known as the indirect medical education (IME) 
adjustment, are located at Sec.  412.105.
    The Balanced Budget Act of 1997 (Pub. L. 105-33) established a 
limit on the number of allopathic and osteopathic residents that a 
hospital may include in its full-time equivalent (FTE) resident count 
for direct GME and IME payment purposes. Under section 1886(h)(4)(F) of 
the Act, for cost reporting periods beginning on or after October 1, 
1997, a hospital's unweighted FTE count of residents for purposes of 
direct GME may not exceed the hospital's unweighted FTE count for its 
most recent cost reporting period ending on or before December 31, 
1996. Under section 1886(d)(5)(B)(v) of the Act, a similar limit on the 
FTE resident count for IME purposes is effective for discharges 
occurring on or after October 1, 1997.
2. IME Adjustment Factor for FY 2008
    The IME adjustment to the DRG payment is based in part on the 
applicable IME adjustment factor. The IME adjustment factor is 
calculated by using a hospital's ratio of residents to beds, which is 
represented as r, and a formula multiplier, which is represented as c, 
in the following equation: c x [{1 + r{time}  \.405\ -1]. The formula 
is traditionally described in terms of a certain percentage increase in 
payment for every 10 percent increase in the resident to-bed ratio.
    Section 502(a) of Pub. L. 108-173 modified the formula multiplier 
(c) to be used in the calculation of the IME adjustment. Prior to the 
enactment of Pub. L. 108 173, the formula multiplier was fixed at 1.35 
for discharges occurring during FY 2003 and thereafter. Section 502(a) 
modified the formula multiplier beginning midway through FY 2004 and 
provided for a new schedule of formula multipliers for FY 2005 and 
thereafter. In the FY 2005 IPPS final rule, we announced the schedule 
of formula multipliers to be used in the calculation of the IME 
adjustment and incorporated the schedule in our regulations at Sec.  
412.105(d)(3)(viii) through (d)(3)(xii). In the FY 2008 IPPS proposed 
rule, we specified that, for any discharges occurring during FY 2008, 
the statutorily mandated formula multiplier is 1.35. Previously, for 
discharges occurring during FY 2007, the mandated formula multiplier 
was 1.32. We estimate that application of the mandated formula 
multiplier for FY 2008 will result in an increase of 5.5 percent in IME 
payment for every approximately 10 percent increase in the resident to 
bed ratio.
    Comment: One commenter expressed satisfaction that CMS is 
increasing the formula multiplier for FY 2008 and recommended that CMS 
maintain the formula multiplier at 1.35.
    Response: The provision for the IME formula multiplier for FY 2008 
specified in the proposed rule is mandated by section 1886(d)(5)(B) of 
the Act, which establishes that, for discharges occurring during FY 
2008 and thereafter, the formula multiplier is 1.35. As noted in the 
proposed rule and above, we have incorporated the statutorily mandated 
schedule of formula multipliers in our regulations.
3. Time Spent by Residents on Vacation or Sick Leave and in Orientation
a. Background
    In the FY 2007 IPPS final rule (71 FR 48080), we clarified our 
policy with respect to the time that residents spend in nonpatient care 
activities (such as conferences and seminars) as part of approved 
residency programs. We amended our regulations concerning the FTE 
resident count at 42 CFR Sec.  412.105(f)(1)(iii)(C) to state, ``In 
order to be counted, a resident must be spending time in patient care 
activities, as defined in Sec.  413.75(b) * * *'' The regulations at 
Sec.  413.75(b) define patient care activities as ``the care and 
treatment of particular patients, including services for which a 
physician or other practitioner may bill.'' In light of this 
clarification, during the past year, we have received questions from 
the teaching hospital community as to whether the time that residents 
spend on vacation or sick leave, and in orientation activities that 
typically occur at the beginning of a residency training program, is 
counted for IME payment purposes.
    Historically, time spent by residents on vacation or sick leave and 
in initial orientation activities has been included in the FTE resident 
count for IME and direct GME. (The sick leave we are referring to 
throughout this discussion is sick leave that does not require the 
resident to make up for his or her absence by adding additional 
training time at the end of the program.) The practice of allowing 
vacation and sick leave to be included in the IME count appears to be 
based on a provision in the Provider Reimbursement Manual, Part I, at 
section 2405.3.H.2. This manual provision discusses the treatment of 
residents who are on vacation or sick leave in the context of

[[Page 47374]]

our prior ``one day count'' policy for counting residents for IME 
payment. Generally, effective with cost reporting periods beginning on 
or after October 1, 1984, and before July 1, 1991, residents were 
counted for IME purposes on a uniform reporting date of September 1. A 
hospital's FTE residents were counted based on their assignment to that 
hospital's IPPS or outpatient areas on September 1 of an academic year. 
Because it was possible that a resident might not actually be present 
in the hospital on September 1 because he or she was on approved 
vacation or sick leave, to ensure that the hospital's IME FTE count 
would not be understated for the entire year, section 2405.3.H.2 of the 
PRM-I states that ``interns and residents using vacation and sick leave 
on the day of the count may be included in the count.'' Although the 
regulations were changed effective for cost reporting periods beginning 
on or after July 1, 1991 (55 FR 36059) to reflect the current resident-
counting methodology (that is, to count the number of FTE residents 
based on the amount of time required to fill a residency slot as 
specified at Sec.  412.105(f)(1)(iii)(A)), the fiscal intermediaries 
(or, if applicable, the MAC) have continued to include time spent by 
residents on vacation and sick leave in the FTE resident counts for 
purposes of both IME and direct GME payments.
    Orientation time is time spent by residents in activities that 
typically take place at the beginning of a resident's training program, 
and include orientation regarding hospital employment, the hospital's 
policies and procedures in general, as well as policies and procedures 
specific to the residency training program. As is the case for vacation 
and sick leave, time spent by residents in orientation has continued to 
be included by fiscal intermediaries/MAC in the FTE resident counts for 
purposes of both IME and direct GME.
    We understand why we have received numerous questions regarding 
whether FTE resident time spent on vacation or sick leave, or in 
orientation activities, should be counted for purposes of IME payment. 
The time a resident spends on vacation or sick leave is not addressed 
within the current definition of ``patient care activities'' at Sec.  
413.75(b). In fact, time spent on vacation or sick leave would not be 
spent at the hospital location at all, so no patient care activities 
would occur during this time. Time spent in orientation might be spent 
in the hospital complex (or at a nonhospital setting), but would not 
involve the care and treatment of particular patients. Thus, although 
time spent by residents on vacation or sick leave or in orientation has 
historically been included in the IME and direct GME FTE counts, it 
seems apparent that this time should be carefully considered in light 
of our clarified policy and current regulations. We believe these types 
of activities (vacation time, sick leave, and orientation) are 
inherently different from the types of ``patient care activities'' and 
``nonpatient care activities'' we have discussed in depth in previous 
rules, and most recently in the FY 2007 IPPS final rule. We believe the 
aforementioned activities should be distinguished from other 
activities, patient care or otherwise, in which the resident 
participates as part of the approved program.
b. Vacation and Sick Leave Time
    We believe that approved vacation time and sick leave are not 
appropriately categorized as patient care activities, or as didactic, 
research, or other nonpatient care activities. In addition, although 
the Accreditation Council for Graduate Medical Education (ACGME) has 
some rules regarding resident duty hours and work environment, the 
ACGME is not explicit regarding resident vacation and sick leave 
policies. Rather, vacation and sick leave policies are determined by 
the resident's employer and can vary by residency training program. 
Consequently, although vacation and sick leave are fringe benefits to 
which every employee, hospital or otherwise, is typically entitled, 
vacation and sick leave are not, in fact, part of the training time 
spent by residents in an approved program. Therefore, we believe 
vacation and sick leave are not properly considered as either patient 
care time or nonpatient care time, but are within a distinct third 
category of time. As we noted above, it has been our policy to include 
the time spent by residents on vacation or sick leave in the FTE 
resident count for IME and direct GME. However, we do not believe the 
continuation of this policy is appropriate in light of our current 
policy as clarified in the FY 2007 IPPS final rule, and expressed in 
revised regulations, that permit only time spent by residents in 
patient care activities to be counted for purposes of IME. We initially 
considered proposing a policy to no longer count the time spent by 
residents on vacation or sick leave for purposes of IME on the grounds 
that this time is not spent in patient care activities in accordance 
with our regulations. However, we do not believe such a policy would 
have recognized the unique character of vacation and sick time as time 
that is not spent in any aspect of residency training patient care or 
nonpatient care. Because we believe time spent by residents on vacation 
and sick leave is not properly considered patient care time or 
nonpatient care time, but fits within a distinct third category of time 
that is neither patient care nor nonpatient care, we believe it would 
be more appropriate to remove the time altogether from the FTE 
calculation for each resident for both IME and direct GME payment 
purposes. Accordingly, in the FY 2008 IPPS proposed rule (72 FR 24814), 
we proposed to remove vacation and sick leave from the total time 
considered to constitute an FTE resident for purposes of IME payments, 
effective for cost reporting periods beginning on or after October 1, 
2007. Further, in order to have a consistent conception of an FTE 
resident for purposes of IME and direct GME payment, we proposed to 
remove vacation and sick leave from the total FTE resident time for 
purposes of direct GME payment as well effective for cost reporting 
periods beginning on or after October 1, 2007. We acknowledged that 
removing vacation and sick leave time from the denominator of the FTE 
count for both IME and direct GME could have some impact on the FTE 
count, but noted that the impact is fact-specific. In some cases, it 
would result in a lower FTE count, and in some cases, it would result 
in a higher FTE count. In addition, we noted that under our current 
policy, residents who are on maternity leave or other approved sick 
leave of extended duration that prolongs the total time a resident is 
participating in the approved program beyond the normal duration of the 
program are not counted while they are out on extended sick or 
maternity leave. This is because the FTE time spent by such residents 
is counted in accordance with our FTE counting policies during the 
training time they spend to make up for their absence. For example, a 
resident in an internal medicine program who takes 3 months of approved 
maternity leave, and therefore, must stay an additional 3 months beyond 
the normal 3 years to complete her training, would not be counted while 
she is on maternity leave for IME and direct GME payment purposes. 
Rather, time spent during the additional 3 months of training in which 
she must participate to make up for her 3 month absence will be counted 
in accordance with our FTE-counting policies for IME and direct GME. We 
did not propose to change our policy with respect to time spent by 
residents on maternity leave or other approved sick leave of extended 
duration. We proposed to amend the regulations at

[[Page 47375]]

Sec. Sec.  412.105(f)(1)(iii)(A) and 413.78(b) to specify that 
``Vacation and sick leave are not included in the determination of 
full-time equivalency.''
c. Orientation Activities
    As discussed above, we believe that orientation activities in which 
residents participate, often prior to the start of their residency 
training program, are also distinct from the typical ``patient care'' 
and ``nonpatient care'' activities in which residents participate as 
part of their training program. For example, before residents begin 
training in an approved residency program, the hospital (or in many 
cases, the medical school as the employer of the residents) is required 
to provide orientation for their residents. Most of these orientation 
activities involve neither patient care nor the typical didactic or 
research activities that comprise the residency training program. 
Instead, such orientation activities consist of basic informational 
sessions in which all new employees, residents, and other staff must 
participate at the beginning of employment. There could also be other 
orientation activities designed specifically to prepare residents to 
furnish patient care in a particular setting, or to participate in a 
particular approved residency training program. We recognize that 
certain portions of orientation activities are specific to residents in 
particular approved programs and are required by the accrediting 
organizations. Other components of orientation activities relate to 
employment and are common to all employees. Still other components of 
orientation activities may involve training regarding particular 
hospital policies and procedures, some of which would relate to patient 
care and safety. In many ways, these orientation activities resemble 
``didactic'' activities. However, we believe there are important 
differences between the ``didactic'' activities that are part of 
orientation and the other conferences and seminars in which the 
residents engage throughout the course of their training. That is, we 
do not envision orientation activities as including scholarly didactic 
activities such as conferences or seminars that may occur throughout a 
residency training program. Rather, we believe orientation activities 
would occur either at the beginning of a particular specialty program, 
or when a resident goes to another facility for training. In 
orientation sessions, much of the information being imparted to the 
residents is essential knowledge for the residents in order to furnish 
patient care services in a particular hospital facility or approved 
program. Thus, the information furnished during orientation is not 
information that merely enhances the resident's patient care delivery 
knowledge and skills during the residency program, but it is a 
necessary prerequisite for the residents as they commence (or continue) 
their training program, and is often required as a term of employment. 
Because we recognize the distinct character of orientation activities 
as essential to the provision of patient care by residents, and the 
fundamental differences between orientation and the typical didactic 
activities in which a resident may participate throughout a residency 
training program, in the FY 2008 IPPS proposed rule (72 FR 24814), we 
proposed to continue to count the time spent by residents in 
orientation activities, whether they occur in the hospital or 
nonhospital setting, and proposed to amend our regulations accordingly. 
(We note that orientation activities in the hospital setting have 
historically been counted for direct GME payment purposes in accordance 
with the regulations at Sec.  413.78(a) which states ``Residents in an 
approved program working in all areas of the hospital complex may be 
counted.'') We also proposed to amend Sec.  413.75(b) to add a 
definition of the term ``orientation activities,'' to mean ``activities 
that are principally designed to prepare an individual for employment 
as a resident in a particular setting, or for participation in a 
particular specialty program and patient care activities associated 
with that particular specialty program.'' We understand that 
orientation activities typically occur at the beginning of a resident's 
first program year. However, in the FY 2008 IPPS proposed rule, we 
noted that we were interested in hearing from commenters on whether 
orientation activities typically occur during other times during an 
approved residency training program. We proposed to amend the 
definition of ``patient care activities'' at Sec.  413.75(b) as 
follows: ``the care and treatment of particular patients, including 
services for which a physician or other practitioner may bill, and 
orientation activities as defined at Sec.  413.75(b).''
    Comment: Many commenters expressed appreciation of CMS' efforts to 
clarify its policies concerning the time that residents spend in 
orientation activities in the determination of an FTE. Several 
commenters also stated their appreciation that CMS did not attempt to 
penalize hospitals for offering vacation and sick leave; that is, they 
were appreciative that CMS did not propose to remove vacation and sick 
leave from only the numerator of the FTE. One commenter stated ``We can 
agree with the proposed removal of vacation and sick time from both the 
numerator and denominator in the FTE calculation.'' The commenter 
stated that any benefit time such as holidays should also be removed. 
The commenter also stated that CMS should clarify its expectations in 
order to ``* * * eliminate an overzealous reading * * *'' of policy so 
that between the effective date of FY 2007 final rule and this year's 
final rule, days spent by residents on vacation or sick leave would not 
be viewed as days spent in nonpatient care and, therefore, removed from 
the numerator of the FTE count. The commenter further requested that 
the policy change be made retroactive to FY 2007 to coincide with CMS' 
clarification in the FY 2007 final rule concerning nonpatient care 
activities. The commenter also indicated that other benefit time should 
be removed from the numerator and denominator so as to avoid leaving a 
gap in policy that is open to interpretation for FY 2007 FTE resident 
counts.
    However, numerous commenters viewed the proposed policy as 
``operationally impractical'' and stated that it would impose 
significant documentation and administrative burdens. Many commenters 
requested that the regulations remain unchanged--that vacation and sick 
leave continue to be included in the determination of an FTE. 
Commenters also asserted that there are many issues and questions that 
CMS must consider and determine before finalizing such a policy; 
otherwise, the policy will be subject to interpretation and could be 
applied inconsistently by providers.
    Several commenters stated that the proposed rule would be 
administratively burdensome for the following reasons: each hospital 
would be required to track vacation and sick time for each resident and 
allocate that vacation and sick leave time for every hospital in which 
the resident is training; it is difficult for hospitals that share 
residents to discern whether the residents actually take their allotted 
vacation time; and residents may rollover their unused vacation from 
one year to another. One commenter expressed concerns regarding the 
``intellectual and administrative difficulty'' of trying to parse 
resident time and indicate whether it should be included in the FTE 
count with orientation or be removed from the FTE count with vacation 
and sick leave. Several commenters stated that hospitals do not have 
sick leave and vacation records for each resident for

[[Page 47376]]

the entire year, and hospitals would have to communicate up front and 
on a continual basis with all other hospitals in which an individual 
resident is training in order to determine the correct FTE count for 
that particular resident.
    One commenter stated that records of sick time and vacation are 
kept by the sponsoring institution and actual scheduling and tracking 
of time off is organized at the department level. Another commenter 
stated that up to this point, sick leave has not been recorded, while 
another commented that hospitals often require residents to make up 
sick days due to the educational demands of the residency program, and 
that residents may also swap days to cover for someone who is sick. One 
commenter stated that hospital record keeping requirements should be 
established prior to the implementation of the proposed policy so that 
both hospitals and fiscal intermediaries have a consistent 
understanding of what documentation is required to comply with the 
policy. Another commenter stated that the purpose of the rotation 
schedule is to identify and document residency training and not to 
duplicate the detail kept by the payroll system. Several commenters 
also stated that the proposed policy would prove to be burdensome 
because vacation time is usually decided between the resident and 
supervising physician and, therefore, the recordkeeping requirements 
would need to be modified. In addition, commenters noted that vacation 
days are allotted based on the residency program year which may be 
different than the cost reporting year. Commenters also noted that 
residents may rotate to different hospitals which have different fiscal 
year ends. Therefore, the other hospitals to which the residents 
rotate, may not know the residents' vacation and sick leave until each 
hospital's cost report has been filed. One commenter stated ``[t]he 
Graduate Medical Education Committee's (GMEC) responsibilities as 
stated in the Accreditation Council for Graduate Medical Education 
(ACGME) `Green' book indicate that monitoring of duty-hours and call 
schedules for excessive service demands and/or resident fatigue must be 
included. It also states that each program must ensure that adequate 
time for rest and personal activities must be provided.''
    Several commenters expressed concerns that the proposed rule will 
lead to other areas of time being reviewed, to the point where 
residents will be spending more time tracking their time for lunches 
and meetings than being involved with patient care. One commenter noted 
that CMS' proposed policy will be a significant challenge for the 
teaching hospital community because of the fluid nature of residency 
training. One commenter stated that CMS did not provide a policy 
justification for why vacation and sick time should be removed from the 
FTE count for direct GME. The commenter mentioned that although CMS may 
be trying to reduce the administrative burden, a simpler way of 
reducing the administrative burden would be to retain the current 
policy. The commenter noted that, in the last few years, the 
administrative burdens associated with receiving Medicare payments for 
GME ``have grown exponentially'' and that with the proposed rule on 
vacation, sick leave, and orientation, the teaching hospital community 
has reached a ``breaking point.'' Commenters also noted that the 
administrative cost of instituting the proposed policy would exceed the 
potential savings.
    One commenter requested that CMS confirm and clarify that the 
proposal is to remove vacation and sick time from both the numerator 
and denominator. Another commenter stated that CMS' proposed policy ``* 
* * suggests CMS is interested in supporting [the resident's] role on 
an hourly basis and if this is correct, hospitals should be able to 
count all after-hours, weekend and holiday time the residents spend 
with patients.'' The commenter maintained that if CMS supports GME on 
an hourly basis, the commenter would expect a net increase in its FTE 
count because of the long hours of resident-related patient care.
    One commenter stated that CMS correctly noted that the outcome of 
the proposed rule would depend on specific facts. However, the 
commenter noted that CMS failed to acknowledge that the effect of the 
proposed rule would be to decrease FTE counts in every instance in 
which the FTE resident is counted at less than one FTE; that is, in 
every instance where there is also disallowed time, such as didactic 
time. The commenter also noted that ``[e]liminating time spent in 
didactic teaching from the denominator of the fraction prior to 
removing vacation time from the equation would exacerbate even further 
this drop in hospital FTE counts.'' Commenters also provided examples 
of cases where a resident rotates to more than one hospital and takes 
vacation while assigned to one of the hospitals. The commenters noted 
that each hospital to which the resident rotates, as a result of the 
proposed policy, would experience a change in its FTE count even though 
no hospital has modified its rotation arrangement.
    Commenters were concerned that although the proposed policy would 
have minimal effects nationally, the policy has major implications at 
the local level. A number of commenters noted their facilities provided 
training for hundreds of interns and residents, and stated the cost of 
tracking the vacation and sick time of interns and residents at their 
facilities would be in the thousands of dollars, and, in some cases, 
would decrease a provider's reimbursement.
    Many commenters stated that if the proposed policy is finalized, it 
cannot be done until the IRIS system is modified to change the 
denominator of an FTE, since the commenter believes IRIS currently is 
based on a denominator of 365 days. One commenter stated that in order 
to document that no double counting is occurring, hospitals use up to 
60 lines on IRIS to document each resident's time. However, hospitals 
have noted that 60 lines is not enough to account for the residents' 
time and therefore hospitals must `` * * * consolidate training time 
frames which can create additional overlap potentials which must be 
investigated by the hospitals involved.'' The commenter stated if 
hospitals need to account for vacation and sick leave, IRIS will 
require significant modification. The commenter noted that CMS needs to 
further study the impact of its proposed policy on IRIS submissions and 
it would be unfair and wrong for CMS to ``prematurely implement'' the 
vacation and sick leave policy if IRIS cannot accommodate it. Another 
commenter stated that it had previously commented on the need to update 
IRIS and that teaching hospitals have needed to purchase ``workaround 
software,'' ``Compu-max,'' to meet the regulatory and audit 
requirements of Medicare. The commenter further stated that ``Compu-
max'' software generates FTE counts on the basis of a 365 day year and 
this process is how most of the teaching hospitals generate IRIS 
reports for Medicare purposes. Because vacation and sick leave varies 
among hospitals and among residents, IRIS would now require an 
additional field for each resident which would include a resident-
specific number of countable days. The commenter questioned where this 
information would be stored since IRIS currently has both a Master 
Record database and an Assignment Record database. The commenter 
believed that ``extensive updating and testing of a new version'' of 
IRIS will be required to make certain that providers and fiscal

[[Page 47377]]

intermediaries can use the program, and that provider payments will not 
be jeopardized. The Master Record includes demographic and other 
permanent information and remains unchanged during the residents' 
training years, while the Assignment Record database includes the 
residents' assignments (with beginning and end dates) at the hospital 
which is completing the IRIS report. The commenter stated that the 
denominator could not be locked in the databases because it would 
differ among hospitals depending on the cost reporting year and it 
would change when the resident changes programs. As previously noted, 
the commenter maintained that the administrative burden would be 
significant when the cost reporting year differs from the residency 
training year and the resident is training at more than one hospital. 
Another commenter stated that the commenter's facility, prior to 
instituting a costly resident tracking system, had to devote over 300 
personnel hours to entering over 1,000 residents into IRIS. The 
commenter urged CMS to review the IRIS program and make recommendations 
for updating the software. The commenter further noted that IRIS has 
not changed significantly since it was updated for Y2K in 1999, and 
that it currently uses MS-DOS which is no longer the industry standard 
and needs to be updated to reflect ``current operating environments.''
    Response: We believe our proposed policy on the exclusion of 
vacation and sick leave from both the numerator and denominator of the 
FTE calculation is consistent with the clarification of our policy 
regarding patient care activities expressed in the FY 2007 IPPS final 
rule, that permits only time spent by residents in patient care 
activities to be counted for purposes of IME for training that occurs 
in hospital settings and for purposes of both IME and direct GME for 
training that occurs in nonhospital settings (71 FR 48080). We believe 
that approved leave, including vacation time and sick leave, are not 
appropriately categorized as patient care activities, or as didactic, 
research, or other nonpatient care activities. Rather, these activities 
fall into a distinct third category that is neither patient care nor 
nonpatient care. Furthermore, vacation, sick leave, and other types of 
approved leave are discrete periods of time that are not spent as 
training time in the approved residency program and do not take place 
in either the hospital complex or a nonhospital site. Therefore, we 
believe vacation, sick leave, and other types of approved leave should 
be removed from the FTE calculation for direct GME purposes, and not 
just for IME purposes.
    Despite our continued belief that vacation, sick leave, and other 
approved leave is neither a patient care nor a non-patient care 
activity, we acknowledge the significant concerns raised by the 
commenters regarding the administrative burdens associated with the 
implementation of the proposed policy. Therefore, we will not be 
finalizing the proposed policy to remove vacation and sick leave from 
the FTE calculation at this time. However, we will continue to consider 
ways to finalize the proposed policy, or something similar to it, but 
in a more administratively feasible manner. For example, since 
commenters pointed out that one major difficulty with the proposed 
policy is that it would require hospitals that cross-train residents to 
obtain information regarding the amounts of time off taken by each 
resident from the other hospital(s), such that the same denominator 
would be used for the resident at each hospital in which he/she trains, 
we are considering a policy that would require a hospital to be aware 
of only the vacation, sick leave, and other types of approved leave a 
resident takes while training at that specific hospital. That is, under 
the approach we are considering, hospitals would not be required to 
account for vacation, sick leave, and other types of approved leave 
occurring at another hospital(s). Each hospital would only be 
responsible for excluding time off from the numerator and denominator 
that occurred while the particular resident was assigned to its 
hospital. Hospitals that train the same resident would not need to 
obtain information about the time off taken by the resident at the 
other hospital(s), nor would the same denominator need to be used by 
both hospital(s) for that FTE resident. However, in no case would a 
resident be counted as more than 1.0 FTE in total. Another option we 
are considering is, given that all residents take vacation and most 
take some sick leave, to establish a standard amount of ``approved 
leave'' which must be excluded from the FTE calculation of all 
residents. We are interested in receiving feedback on these alternative 
approaches to implementing this policy.
    With respect to time spent in orientation activities, the current 
policy on orientation activities occurring in the hospital complex will 
continue to be effective for IME and direct GME payment purposes, and a 
new policy with respect to orientation occurring in certain nonhospital 
settings (explained in greater detail in response to comments below) 
will be effective for cost reporting periods beginning on or after 
October 1, 2007. That is, time spent in orientation activities (as that 
term is defined in the revised regulation at Sec.  413.75(b)) occurring 
in the hospital complex is currently counted, and will continue to be 
counted on or after October 1, 2007. Time spent by residents in 
orientation activities occurring in nonhospital settings such as 
physicians offices or clinics where patient care is routinely provided 
and a hospital is permitted to count the time spent by residents in 
accordance with Sec. Sec.  412.105(f)(1)(ii)(C) and 413.78(f) may be 
counted only for cost reporting periods beginning on or after October 
1, 2007.
    We would also like to note that in response to the statement by a 
commenter that ``[e]liminating time spent in didactic teaching from the 
denominator of the fraction prior to removing vacation time from the 
equation would exacerbate even further this drop in hospital FTE 
counts,'' under CMS' policy as expressed in the August 18, 2006 Federal 
Register, entire workdays that are spent in didactic activities must be 
identified and removed only from the numerator of the FTE calculation, 
and not from the denominator.
    Comment: One commenter described a methodology using an example for 
counting residents which the commenter believes, from a mathematical 
standpoint, is the correct way to implement CMS' proposed policy. The 
applicable portion of the example is as follows:
    Dr. Z spends 334 days in total of the 365-day cost reporting period 
at Hospital A. This time at Hospital A includes 261 days of non-
vacation/non-sick time, 28 days of vacation time, and 45 days of 
Medicare time nonreimbursable for IME purposes. Under current rules, 
Hospital A's reporting of its resident FTE count for IME purposes for 
Dr. Z would usually be represented as 289 days/365 days = 0.792 FTE. 
However, this can be thought of as comprised of the following two 
components as noted in the formula:

(a/b) x (c/a)

    The first term represents the hospital's share of the resident's 
total time in the cost reporting period and the second term represents 
the resident's share of reimbursable days at that hospital. In the 
formula, a = <greek-i> of countable days at the hospital, b = <greek-i> 
of days in the cost reporting period, and c = number of Medicare-
reimbursable days. Applying this formula in the case of Dr. Z training 
at Hospital A,


[[Page 47378]]


(334/365) x (289/334) = 0.792 FTE.

    Applying this formula yields the same result as the usual formula 
(289 days/365 days). Now, if one were to implement the CMS proposed 
policy on a hospital-specific basis and remove the 28 vacation days 
from a, the ``<greek-i> of countable days at the hospital,'' which is 
represented in the numerator of the first term and the denominator of 
the second term above, it would yield the following calculation:

(306/365) x (289/306) = 0.792 FTE.

    One can see that the calculation yields exactly the same resident 
FTE count for Hospital A as performing the calculation while including 
the vacation time. So, by removing the vacation days from the numerator 
and denominator in this manner, which would be the correct way to do it 
mathematically, Hospital A's resident FTE count has been preserved from 
its previous level. While the financial impact of this methodology 
would be neutral, if CMS were to still require that vacation and sick 
time be tracked, we believe it should be rejected because of the 
significant administrative challenges that would be imposed on the 
teaching hospital community. Imposing such additional burdens to 
implement a policy that has zero effect on resident FTE counts at 
teaching hospitals makes no sense and should be rejected.
    Response: We appreciate the commenter sharing this proposed 
methodology with us. However, we do not agree with the commenter that 
the methodology presented in the example above would be the correct 
way, from a mathematical standpoint, to implement CMS' proposed policy. 
The commenter provided the following equation: (306/365) x (289/306) = 
0.792 FTE. We do not agree that 289 should be the numerator of the 
second part of the equation because, although it excludes the 45 days 
of nonreimbursable time, it still includes vacation time; the correct 
number to use for the numerator would be 261. Furthermore, the 
denominator that should be used is 337, which is calculated by 
subtracting the 28 days of vacation from the total of 365 days. We 
believe the mathematically correct interpretation of the proposed 
policy would be to calculate the FTE resident's time as 261/337, which 
results in .774 FTE.
    Comment: One commenter stated that, in regard to the vacation and 
sick leave policy, the commenter can only see examples where providers' 
FTE resident counts would be reduced, not increased. Another commenter 
stated that the proposed rule did not include examples of calculations 
which illustrate CMS' thinking. The commenter also provided examples 
where FTE resident counts changed for both hospitals at which a 
resident trains despite the fact that neither party modified the 
rotation arrangement in any way.
    Response: Since we are not finalizing the proposed policy on 
vacation and sick leave, we will not be providing any detailed examples 
to illustrate how the proposed policy would have been implemented. 
However, as previously mentioned, we are considering a policy 
alternative under which a hospital would only have to keep track of 
vacation, sick leave, and other types of approved leave that the 
residents take while training at that specific hospital (or while 
training at a nonhospital site for which that hospital is counting the 
FTE residents in accordance with Sec.  413.78(f)). For example, assume 
the total number of days in a certain residency program is 320 days and 
the resident is assigned for 200 days at Hospital A and 120 days at 
Hospital B. The resident takes 10 days of vacation while assigned to 
Hospital B. Under the alternative policy we are considering, the 
resident's time could be calculated as follows: Hospital A: 200/320 = 
0.625, Hospital B: (120-10)/(320-10) = 0.355. If the hospitals track 
time off in hourly increments, rather than days, another example of 
this alternative policy would be: Assume that the resident is now 
taking 36 hours of vacation while assigned to Hospital B and the 
specific residency program in which the resident is training considers 
each workday to be 12 hours. Again, as in the previous example, there 
are 320 days during the residency training year. The resident is 
assigned for 200 days at Hospital A and 120 days at Hospital B. The 
resident's time under the alternative policy could be calculated for 
each hospital as follows: Hospital A: 2400/3840 = 0.625, Hospital B: 
(1440-36)/(3840 - 36) = 0.369. We are interested in hearing feedback on 
this alternative policy approach.
    Comment: One commenter stated that an FTE is determined by ``* * * 
the amount of time it takes to fill one approved slot''; thus, the FTE 
resident denominator may differ for different specialty training 
programs. The commenter also asked how one day of sick leave would be 
removed from the FTE count when the FTE resident may be measured in 
terms of days, weeks, or months. The commenter noted that the resulting 
``FTE'' could be different based on how the denominator is determined.
    Response: The commenter is correct that an FTE is determined based 
on the total time necessary to fill a residency slot (see Sec.  
412.105(f)(1)(iii)(A) and also Sec.  413.78(b)), and therefore, an FTE 
resident's denominator could vary for different specialty programs. We 
refer the commenter to the examples in the previous response to see how 
time off in daily or hourly increments might be removed from the FTE 
count. For a program that uses 52 weeks as the program year, the time 
off would be identified in weekly increments and excluded from the 52 
weeks in the numerator and denominator. We note that it is possible to 
deduct fractions of days or weeks from the FTE calculation as well 
(i.e., if a resident takes 10.5 days off, or 2.5 weeks off, then these 
amounts would be removed from the numerator and denominator of the 
applicable FTE calculation).
    Comment: Several commenters stated that residents work more than 40 
hours a week, and CMS should take residents' actual work week hours 
into consideration when determining whether vacation and sick leave 
should be removed from the determination of an FTE. One commenter 
specifically stated that CMS has not yet defined a ``work week,'' and 
because a resident usually works more than 40 hours per week, that time 
should be taken into consideration in the proposal to remove vacation 
and sick leave. The commenter further noted that hospitals continue to 
compensate the residents when they are on vacation and therefore they 
should be able to count that time. Another commenter asked whether an 
FTE consists of 40 hours per week or 60 hours per week and stated that 
it is difficult to determine an FTE because there is no consistent 
regulatory definition of what amount of work/training is required to 
count a resident as 1.0 FTE or how the appropriate amount of time can 
be substantiated with a Medicare auditor. Several commenters asserted 
that vacation and sick leave provides time away from the stress and 
rigors of the residency program and allows residents to focus on 
patient care. One commenter contended that hospitals would be 
incentivized to offer minimal vacation and restrict maternity and 
paternity leave, and that the proposed policy would burden residents 
who are already overworked. The commenter noted further that the 
proposed policy would also negatively affect female residents because 
they are more likely to carry over vacation time from year to year to 
be used as a maternity benefit. One commenter stated that hospitals 
cannot attract quality employees if they do not offer vacation and sick 
leave, and that the same goes for residents. Another commenter stated 
that vacation leave

[[Page 47379]]

and sick leave are an essential element of hospital employment and 
therefore ``* * * an integral part of the patient care process.'' The 
commenter stated that CMS has interpreted the term ``patient care 
activities'' without considering any complementary activities that 
contribute to effective ``patient care activities.'' Commenters stated 
that teaching hospitals accept patients for medical treatment 
contingent on their ability to provide medical coverage with both staff 
physicians and residents, and that teaching hospitals will continue to 
have the additional financial burden of providing coverage when 
residents are on vacation and sick leave. The commenters stated that by 
including vacation and sick leave in the determination of an FTE, CMS 
would be ``* * * ensuring a `minimal' payment to help offset costs for 
care coverage that must be provided by another medical professional.'' 
Another commenter stated the context for CMS' proposal is flawed 
because the government should not be tampering with employee benefits, 
and the proposal may cause providers to consider changing their benefit 
rules because of potential loss of funds due to maintaining benefits.
    Response: As we have stated in response to comments above, there is 
a consistent regulatory definition of what constitutes 1.0 FTE, and 
this should be used by hospitals and fiscal intermediaries/MAC alike to 
determine the unit of an FTE for each specialty program. In terms of 
calculating a resident's ``work week,'' a hospital's allowable FTE 
count is ``based on the total time necessary to fill a residency slot'' 
(Sec.  412.105(f)(1)(iii)(A)). The regulations at Sec.  413.78(b) add 
that ``a part time resident counts as a partial FTE based on the 
proportion of allowable time worked compared to the total time 
necessary to fill a full-time internship or residency slot.'' As the 
regulations state, the concept of the total time necessary to fill a 
residency slot is used to determine the part-time or full-time status 
of the resident. If it is determined that, among all the hospitals and 
nonhospital sites in which the resident is training, the resident is 
not working the number of hours necessary to fill a residency slot, the 
resident would be considered part-time, and the proportion of total 
time the resident is working in all training sites would be adjusted 
accordingly. Therefore, we would consider a ``work week'' to be 
dependent on the specific residency program in which the resident is 
training and the resident's full- or part-time status. For example, if 
60 hours per week (including vacation time) is established as the total 
time necessary to fill the residency slot for a particular program, and 
a resident in this program works 60-hour weeks (full time) consisting 
of 30 hours per week at each of two hospitals, in allowable/countable 
activities or areas, then each hospital would count ``0.5'' of an FTE 
for this resident. Since in this example, the time necessary to fill a 
residency slot is 60 hours per week (including vacation time) rather 
than 40 hours per week, any leave taken would be excluded from the FTE 
unit based on a 60-hour work week (or a program year consisting of 
3,120 hours (that is, 52 weeks x 60 hours)).
    In response to the commenters' concerns regarding maternity leave 
and the provision of leave as essential to attracting quality employees 
and providing quality patient care, maternity leave is typically a 
leave of extended duration and we did not propose any changes to 
policies concerning leave of extended duration in the proposed rule. 
Furthermore, it is important to note that the intent of the proposed 
rule was not to suggest that hospitals should change their benefit 
policies. We see no reason that hospitals would not continue to offer 
the same benefits they offered prior to our proposed policy. 
Additionally, we note that the proposed rule would not have disallowed 
vacation, sick leave, and other types of approved leave, which would 
have required the time to be excluded only from the numerator of the 
FTE calculation; it proposed to exclude the time from both the 
numerator and denominator of the FTE calculation. In response to the 
comment that hospitals accept patients for treatment contingent on 
their ability to provide medical coverage, other commenters have stated 
that residents often cover for each other when a resident is sick or on 
vacation; therefore, we do not agree that the exclusion of vacation, 
sick leave, and other types of approved leave from the numerator and 
denominator of the FTE calculation would limit the hospital's ability 
to provide medical coverage. However, as we stated in response to 
previous comments, we are not finalizing the proposed policy to remove 
vacation and sick leave from the FTE calculation at this time.
    Comment: Several commenters stated that vacation and sick leave 
were included in the base year costs for determination of PRAs. 
Therefore, in order to maintain consistency between base year and 
current year FTE counts, the commenter suggested that vacation and sick 
leave should be included in the determination of an FTE.
    Response: We acknowledge that the costs and FTEs associated with 
vacation and sick leave were included in the determination of the base 
year PRAs. This is because prior to the implementation of the IPPS, 
under the reasonable cost system of reimbursement, vacation leave and 
sick leave were reimbursed as a Medicare allowable cost. Since 
implementation of the IPPS, however, we have only permitted hospitals 
to count for purposes of direct GME the time spent by residents 
training in GME activities within the hospital complex. Since the time 
spent by residents on approved leave is not spent in the hospital 
complex, we believe that, from a policy perspective, it would be 
appropriate to not include vacation and sick leave in the FTE count for 
direct GME purposes. However, as we noted above, we have decided not to 
finalize our proposal to remove vacation and sick leave from the FTE 
calculation at this time.
    Comment: Many commenters disagreed with removing vacation and sick 
leave from the determination of an FTE because these fringe benefits 
are included under other forms of hospital reimbursement. For example, 
several commenters stated that Medicare regulations allow fringe 
benefits for all employees as Medicare allowable costs and there should 
be no exception made for residents. Another commenter stated that when 
CMS requires hospitals to pay for the costs of residents in nonhospital 
settings, CMS requires that fringe benefits such as vacation and sick 
leave be included. The commenter requested ``* * * clarification on the 
justification for considering vacation and sick time non-patient care 
related given the apparent inconsistency this proposal would create 
with respect to both * * *'' the GME nonhospital site policy and non-
GME policies. Commenters also recommended that, because vacation and 
sick leave are included in wage index calculations, they should be 
included in the determination of an FTE. One commenter specifically 
stated the Provider Reimbursement Manual (CMS Pub. 15-2) Section 
3605.2, treats amounts paid for vacation and sick leave as included in 
wages and salaries. Therefore, to maintain consistency between wage 
index and GME, the commenter indicated that vacation and sick leave 
should be included. The commenter further noted that 42 CFR 
412.105(f)(1)(iii)(A) states FTE status ``* * * is based on the total 
time necessary to fill a residency slot,'' and therefore vacation and 
sick leave should continue to be included in the determination of an 
FTE. Another

[[Page 47380]]

commenter provided additional reasons as to why the commenter believed 
the determination of an FTE should include vacation and sick leave, 
including: CMS recognizes vacation and sick leave when paid to an 
outside supplier as stated in PRM-I, section 1402.2; the American 
Medical Group Association's (AMGA) 2006 Compensation Survey Data Report 
includes fringe benefits in compensation; and there are several 
instances ``* * * where CMS recognizes that fringe benefits (including 
vacation and sick leave) are an allowable cost when services being 
provided are related to patient care activities''--for example: CMS 
Pub. 15, Part I, Section 2144.4; CMS Pub. 15, Part I, Section 2182.6; 
CMS Pub. 15, Part I, Section 2144.9; CMS Pub. 15, Part I, Section 
1402.2; and CMS Pub. 15, Part II, Section 3605.2. The commenter also 
noted that in establishing reasonable compensation equivalents (RCEs), 
CMS recognized compensation for a full-time physician at 2,080 hours 
per year, ``* * * including a reasonable amount of time devoted to 
vacation and sick leave * * *'' as stated in PRM-I, Section 2182.6. The 
commenter further noted that the PRM ``* * * goes on to note that the 
intermediary considers the general practice of the hospitals it serves 
in determining the reasonableness of a hospital-compensated physician's 
time devoted to vacation and sick leave'' and includes CMS' response to 
a comment regarding the development of the RCE in the March 2, 1983 
Federal Register (48 FR 8902). The commenter stated that, based on the 
comment and response, it was evident that CMS believed vacation time 
should be included in compensation for hospital-based physicians.
    Response: We agree with the commenters that the costs of vacation 
and sick leave have always been considered allowable under Medicare, 
for both hospital employees in general, and for residents and teaching 
physicians. However, with respect to the treatment of vacation, sick 
leave, and other types of approved leave in the GME context, the issue 
is not the allowability of the cost, but rather whether this time 
should be included in the determination of an FTE, considering that 
such time is not spent in any aspect of residency training. From a 
policy perspective, we do not believe that vacation, sick leave, and 
other types of approved leave, where the residents are not engaged in 
activities that are part of the approved program, and are not even 
present in the hospital or any nonhospital site, should be included in 
the determination of an FTE, for both IME and direct GME purposes. 
However, as we stated previously, because of the concerns regarding the 
administrative burden surrounding implementation of this policy, we 
have decided not to finalize the proposed policy to remove vacation, 
sick leave, and other approved leave from the FTE calculation as 
proposed, and we are asking for feedback on a method of dealing with 
some of the ``burden.'' With respect to the inclusion of vacation and 
sick leave in the wage index calculations, we note that salaries and 
hours of residents and teaching physicians are carved out of the IPPS 
wage index. Also, as explained in the August 18, 2006 Federal Register 
(71 FR 48085), the salaries and hours of residents historically used in 
the wage index calculation are irrelevant for purposes of determining a 
GME FTE count. We also note that for purposes of counting FTE time for 
determining direct GME and IME payments, a resident that trains in a 
hospital is counted by that hospital regardless of whether that 
hospital makes any payments for the resident's salary and fringe 
benefits. Therefore, we do not find persuasive the commenter's argument 
that vacation and sick time should be counted by the hospital that pays 
for that time. Our policy is consistent in that FTE counts at each 
hospital are based on what the resident is doing and not on whether the 
hospital is paying for the resident's salary and fringe benefits.
    Comment: Several commenters expressed additional concerns regarding 
the removal of vacation and sick leave for purposes of the FTE resident 
count for IME. One commenter stated that academic centers are dependent 
on direct and indirect GME payments to cover the costs of the 
residents' education, salaries, and research, and they must also face 
the increased burden of indigent care and ``medically complex'' 
patients. The commenter further noted that IME covers fixed costs such 
as employee benefits which are in place even when the resident is on 
sick leave. A couple of commenters stated that residents' participation 
in research and other academic activities will be adversely affected by 
the proposed policy and more dialogue and stakeholder input is needed 
on such a rule. Another commenter asked whether Medicare may 
potentially disallow vacation and sick leave from cost reporting in 
totality. The commenter suggested that if CMS' intent is to reduce 
payments to hospitals, CMS should use mechanisms found on the cost 
report to achieve its goals--such as adjustments to the PRA for GME and 
the formula multiplier for IME.
    Response: We note, again, that we did not propose to disallow 
vacation, sick leave, and other types of approved leave from the IME 
count (or direct GME count) and that the intent of the proposed rule 
was not to reduce Medicare GME payments to teaching hospitals. A 
disallowance would mean excluding the vacation, sick leave, and other 
types of approved leave from the numerator of the FTE calculation, but 
not the denominator, as is done for IME for research and for time spent 
in distinct part units that are excluded from the IPPS. By excluding 
vacation, sick leave, and other types of approved leave from both the 
numerator and denominator of the FTE resident calculation, the effect 
on the FTE resident count for a hospital would be limited, if there 
would be any at all.
    Comment: Several commenters expressed their concerns regarding the 
effect of the proposed policy on hospitals that rotate residents and 
participate in Medicare GME affiliation agreements. One commenter 
stated that the proposed policy does not resolve the inequalities that 
result when residents rotate to different hospitals. The commenter 
further maintained that the proposed policy may unfairly increase FTE 
time at another hospital to which a resident rotates because time off 
is allocated to the hospital in which the resident was assigned. One 
commenter stated ``[s]ince the receiving institution usually is 
accepting the residents because of a desire to provide more medical 
staff coverage, they will not allow residents to take vacations when 
scheduled at their facility. Then, if the resident's vacation is 
excluded from the FTE calculation (as proposed), the receiving facility 
will be getting more of an FTE than they are paying for.'' The 
commenter suggested that the proposed policy is ``inherently flawed'' 
because it would produce a redistribution of FTE residents that is 
inconsistent with multiple base year policies. Other commenters 
provided an example where there is an affiliation agreement between 
Hospital A and Hospital B, Hospital A rotates a different resident to 
Hospital B each month, and each resident does not take vacation while 
training a Hospital B. In this case, Hospital B's total resident FTE 
count for the entire year would be greater than one, since the vacation 
time would be excluded from the denominator of Hospital B and not from 
the numerator. The commenter stated that this is a fundamental problem 
of CMS' proposal because a hospital that was at its hospital-specific 
cap may now find

[[Page 47381]]

itself training over its cap while another hospital may find itself 
training under its cap. The commenter noted that an additional burden 
would be created because a hospital would probably not know its 
resident FTE count until the very end of the training year and would 
have to wait until the last minute to amend its Medicare GME 
affiliation agreements. Another commenter stated that the rule is not 
clear on which hospital should claim the sick or vacation time when a 
resident rotates between hospitals. The commenter recommended that if 
vacation or sick leave occurs during an assigned rotation at a specific 
hospital, that hospital should claim the vacation and sick time. 
However, if the vacation and sick leave occurs between rotations, the 
hospital claiming the time associated with the rotation immediately 
prior to the vacation or sick leave should account for the sick or 
vacation leave. If the sick leave or vacation occurs during the 
residents' rotation to a nonhospital site, the hospital counting the 
resident's time at the nonhospital site should account for the vacation 
and sick time. Another commenter stated that a hospital that absorbs 
the vacation payment will be hurt by the proposed rule, ``* * * thereby 
not matching third party reimbursement to the cost incurred. The policy 
of matching costs to reimbursement is an inherent principle of third 
party reimbursement and should have been considered when CMS proposed 
this change.''
    Response: We are sympathetic to the points raised by the commenters 
concerning shifts in FTE counts among hospitals that cross-train 
resident, and we will explore options of mitigating this effect in the 
context of reducing the overall administrative burden of the proposed 
policy. In the interim, as we stated above, we are not finalizing the 
proposed policy.
    Comment: Several commenters stated that the proposed rule is not 
clear as to whether a change would relate to scheduled time off or 
actual time off. One commenter stated that it would be inappropriate to 
exclude all scheduled time off since residents usually do not take all 
of their vacation or sick time. The commenter further noted that, if 
the hospital were to exclude time from the denominator of the FTE 
calculation because that time was scheduled time off, but include that 
time in the numerator of the FTE calculation because other 
documentation shows that the resident actually worked during that time, 
the resulting FTE would be greater than 1.0 and disallowed by the 
fiscal intermediary on that basis. However, the commenter also asserted 
that if CMS were to require that actual time off be excluded, this 
would be a substantial administrative burden because the hospital would 
have to determine: whether the resident actually used scheduled 
vacation leave, or whether the resident worked at the hospital, even 
for a brief period of patient care, during the vacation period; and 
whether the resident switched days off with another resident so that 
the time was made up at a later point. We also received comments 
regarding the mathematical counting of FTEs, particularly when a 
resident takes a half day of vacation or sick leave. Another commenter 
stated that vacation time of one or more weeks is likely to be 
documented on the rotation schedule, while one or two days of vacation 
may not always be included. One commenter stated that the American 
Board for Internal Medicine requires that residents make up sick time 
but CMS does not allow this make-up time to be reflected in the cost 
report.
    Response: The commenters pointed out correctly that we did not 
specify in the proposed rule whether we intended that scheduled time 
off or actual time off should be removed from the calculations of an 
FTE. In considering this, we agree that had we finalized the proposed 
policy in this final rule, it would be more appropriate to instruct 
hospitals to only exclude actual vacation, sick leave, and other types 
of approved leave taken, since it is understandable that residents may 
not use all of their allotted approved leave. Accordingly, under the 
alternative approach on which we are considering and seeking feedback, 
a hospital would track actual time off taken by residents assigned to 
it (but not be responsible for deducting time off while the resident is 
assigned to another hospital). Concerning the comment about the 
requirements of the American Board of Internal Medicine, we are not 
sure if the commenter is referring to leave of short duration or 
extended leave. However, we note that the proposed rule did not include 
any proposals regarding extended leave.
    Comment: Several commenters disapproved of CMS' recent rules on 
GME, including the recent proposed rule on Medicaid GME. Commenters 
expressed their concern regarding how these rules have disallowed 
pieces of residents' training time and imposed significant 
administrative burdens. One commenter requested that CMS limit its 
application of policy regarding ``patient care activities'' to that of 
didactic activities ``* * * to prevent going down a policy `slippery 
slope' that ends up with parsing every aspect of residents' training 
time into a `patient care,' or `nonpatient care' bucket.'' The 
commenter noted that the proposed policy on vacation and sick leave 
illustrates ``* * * the downward spiral that starts to occur if CMS 
attempts to extend its `patient care' analysis beyond didactic 
activities.'' One commenter stated that with the exception of bench 
research, all other resident training time should be included in the 
determination of an FTE for Medicare direct GME and IME payment 
purposes. The commenter stated that CMS should discontinue its efforts 
to parse out residents' time; instead the goal should be for Medicare 
to pay its fair share of GME costs. Another commenter stated that CMS' 
policy that only permits residents to be counted for IME payment 
purposes if they are involved in patient care has no statutory basis, 
and CMS ``* * * apparently excludes time spent in didactic activities 
based on assumption that because IME is an adjustment to the DRG 
system, it is inherently related to patient care.''
    Response: We do not believe that the proposed rule, if finalized, 
would have contributed to an inappropriate ``parsing'' of a resident's 
training into patient care and nonpatient care time. Particularly for 
IME purposes, this is an important distinction to make, given that the 
IME adjustment is intended to account for the higher patient care costs 
experienced by teaching hospitals relative to nonteaching hospitals. We 
refer readers to the August 18, 2006 Federal Register (71 FR 48080) for 
a more detailed discussion on the distinction between patient care and 
nonpatient care activities. With respect to the proposed policy to 
exclude vacation and sick leave from the FTE resident calculation, as 
we stated above, we believe vacation, sick leave, and other types of 
approved leave are neither patient care nor nonpatient care, but fall 
into a third category of time that is not spent in any aspect of 
residency training.
    Comment: One commenter stated that ``[i]n University Medical Center 
v. Blue Cross/Blue Shield Association, 2005-D36, June 7, 2005, the CMS 
Administrator concurred with the findings of the Provider Reimbursement 
Review Board (PRRB Decision No. 2005-D36, dated April 12, 2005) that 
held that the critical factor related to vacation time was 
`consistency' in its treatment by the fiscal intermediary for each 
provider.'' The commenter stated that, currently, the provider includes 
vacation time when the resident's rotation is to a site owned by the 
provider and excludes vacation time when the resident's rotation is to 
a site

[[Page 47382]]

not related to the provider. The commenter stated that its fiscal 
intermediary has accepted this process and that this method is 
consistent with the Administrator's decision in the aforementioned 
case. Furthermore, the commenter asserted that treating vacation and 
sick leave differently from orientation, is inconsistent with the 
Administrator's decision in University Medical Center v. Blue Cross/
Blue Shield Association.
    Response: We believe the commenter has confused the Administrator's 
findings in the case of University Medical Center v. Blue Cross/Blue 
Shield Association with respect to the vacation time at issue. In that 
case, the Provider (plaintiff) believed that since it continued to pay 
the residents' salaries while the residents were assigned and took 
vacation time while at another hospital, the Provider should be allowed 
to include those FTEs in its direct GME and IME FTE count. The fiscal 
intermediary disagreed with the Provider, asserting that ``it is common 
practice to include vacation time in the resident count for the 
hospital where residents are assigned and working when the vacation 
time is taken.'' The Provider Reimbursement Review Board (the Board) 
concluded that the fiscal intermediary's methodology was proper, but 
that `` * * * the critical factor is consistency. As long as vacation 
time is accounted for in the same manner for each hospital, as 
presented by the Intermediary, each hospital will be properly 
reimbursed.'' We stated that we ``acknowledge and concur with the 
Board's conclusion that the Intermediary properly disallowed the FTE 
time spent on vacation * * *'' (emphasis added). In this case, we did 
not state that we agree with the Board that the most important factor 
is consistency. The fiscal intermediary was correct to disallow from 
the provider's FTE count the vacation time that occurred at another 
hospital because of the longstanding Medicare policy that ``a hospital 
cannot claim the time spent by residents training at another hospital'' 
(42 CFR 412.105(f)(1)(iii)(A) for IME and Sec.  413.78(b) for direct 
GME). A method for counting FTEs is not correct merely because 
hospitals, or fiscal intermediaries, for that matter, apply it 
consistently. As the Administrator concluded in the case, ``the 
Intermediary properly disallowed the vacation time from the Provider's 
FTE counts, since that FTE was not spent training at the Provider, nor 
were those FTEs assigned to the Provider during the vacation time in 
question.'' Thus, under our previous policy (and current policy, since 
we are not finalizing our proposal at this time), regardless of which 
hospital is paying the resident's salaries and fringe benefits, the 
hospital to which the resident is assigned during the time the vacation 
was taken is the hospital that counts that FTE time for direct GME and 
IME. If the rotation schedule does not clearly indicate where the 
resident is assigned during the time the vacation is taken, the 
hospitals to which the resident rotates over the course of the academic 
year would divide and count that vacation time proportionately based on 
the amount of time spent in actual training at the respective 
hospitals. For example, if during the course of the academic year, a 
resident spends 25 percent of his time at Hospital A, and 75 percent of 
his time at Hospital B, and there are two weeks of vacation in which 
the resident was not assigned to either Hospital A or Hospital B, then 
it is appropriate for Hospital A to count 25 percent of that vacation 
time and Hospital B to count 75 percent of the vacation time for that 
FTE resident.
    Comment: One commenter noted that, unlike the ACGME, the AOA has 
adopted a clear policy on resident vacations and other leaves of 
absence; osteopathic programs are required to give interns and 
residents a minimum of 10 business days of vacation time during each 
year of training. The commenter stated that the AOA's policy is in 
place to protect residents and ameliorate stress and fatigue and that 
CMS' proposal contradicts efforts aimed at establishing limits on time 
spent in the training environment which have been established to 
protect the health, safety, and well being of residents and their 
patients and disregards the need for residents to have personal time 
away from their program. Another commenter disagreed with the argument 
for removing vacation and sick leave because the ACGME and Residency 
Review Committees are not explicit regarding this time which causes the 
amount of vacation and sick leave to vary from program to program. The 
commenter stated that there are numerous cases where Residency Review 
committees ``* * * are open-ended or not explicit in number or content, 
leaving programs to interpret within a range of behavior or activities, 
what is acceptable for accreditation.''
    Response: Regardless of whether a clear policy on vacation, sick 
leave, and other types of approved leave has been adopted by any of the 
accrediting bodies, we believe that vacation, sick leave, and other 
types of approved leave for purposes of counting residents for Medicare 
direct GME and IME fit into a third category that is neither patient 
care nor nonpatient care. Furthermore, under the proposed rule, we were 
not ``disallowing'' vacation, sick leave, and other types of approved 
leave, but rather excluding the time spent by residents on vacation, 
sick leave, and other types of approved leave from the calculation of 
an FTE.
    Comment: One commenter requested that if CMS finalizes the proposed 
policy, it should be made date specific to October 1, 2007, instead of 
for cost reporting periods beginning on or after October 1, 2007, 
because hospitals with cost reporting periods beginning October 1, 
2007, would be disadvantaged for a longer period of time than hospitals 
with different cost reporting periods.
    Response: As previously stated, we are not finalizing our proposed 
policy with respect to vacation and sick leave at this time.
    Comment: One commenter asked CMS to comment on the statement that 
``[t]he hospital complex consists of the hospital and any hospital 
based providers * * * and subproviders * * * Therefore, if the 
orientation takes place in a related medical school, such time could 
not be counted for GME purposes.''
    Response: The commenter is correct that the hospital complex 
consists of the hospital, hospital-based providers, and subproviders; 
that is, facilities that meet the provider-based criteria at Sec.  
413.65. The commenter is also correct that orientation activities in a 
related medical school cannot be counted. As we stated on page 24814 of 
the May 3, 2007 proposed rule, ``Because we recognize the distinct 
character of orientation activities as essential to the provision of 
patient care by residents, and the fundamental differences between 
orientation and the typical didactic activities in which a resident may 
participate throughout a residency training program, we are proposing 
to continue to count the time spent by residents in orientation 
activities, whether they occur in the hospital or nonhospital setting, 
and are proposing to amend our regulations accordingly'' (emphasis 
added). However, the nonhospital settings we were referring to in which 
orientation may be counted are those nonprovider settings such as 
physicians' offices or clinics, where patient care is routinely 
provided and a hospital is permitted to count the time spent by 
residents in accordance with our regulations at Sec. Sec.  
412.105(f)(1)(ii)(C) and 413.78(f), not other nonhospital settings 
where time spent by residents is not permitted to be counted for 
purposes of direct GME and IME. We

[[Page 47383]]

note that the policy to allow time spent by residents in orientation 
activities to be counted if it occurs in nonhospital sites where 
patient care is routinely provided is new, and will be effective for 
cost reporting periods beginning on or after October 1, 2007. (In order 
to count resident training time in orientation activities for IME and 
direct GME purposes at the nonhospital site, hospitals must comply with 
the regulations at Sec. Sec.  413.78(f) and 412.105(f)(1)(ii)(C)). 
Prior to cost reporting periods beginning on or after October 1, 2007, 
the effective date of this policy, time spent by residents in 
orientation was permitted to be counted for direct GME and IME only if 
it occurred in the hospital complex.
    Comment: One comment addressed Medicare's rules regarding shared 
programs and residency training at nonhospital sites, when the shared 
programs are operated by a foundation. The commenter stated that 
because at least two hospitals may be involved with the foundation, the 
interns and residents keep time studies to document time spent in 
patient care in each location so that each hospital is aware of its 
financial commitment. The foundation bills the hospital monthly for the 
total costs of educating the interns and residents for training in the 
hospital and nonhospital site. The commenter stated that its fiscal 
intermediary considers this a shared program (neither hospital is 
paying for ``all or substantially all'' of the costs) and has 
disallowed the time spent in nonhospital settings. Another commenter 
urged CMS to `` * * * continue to fund, to the best of your ability, 
the ongoing education of newly graduated physicians and allow the 
dedicated medical education professionals the opportunity to continue 
to make a difference in the future of health care.'' We also received 
comments concerning the counting of didactic time.
    Response: We did not propose to make any changes to our regulations 
specifically regarding residency training at nonhospital sites or 
general GME funding mechanisms and counting of didactic time. 
Therefore, we believe the comments are outside the scope of this rule 
and we are not responding to them at this time.
d. Regulation Changes
    In the FY 2008 IPPS proposed rule (72 FR 24815), we proposed, for 
cost reporting periods beginning on or after October, 1, 2007, for 
direct GME and IME payments, that time spent by residents on vacation 
or sick leave would not be included in the determination of what 
constitutes an FTE resident (or would be removed from both the 
numerator and denominator of the FTE count) for both IME and direct GME 
payment purposes. In addition, we proposed to continue to count time 
spent by residents in orientation activities for both IME and direct 
GME payment purposes. We proposed to amend the regulations at 
Sec. Sec.  412.105(f)(1)(iii)(A) and 413.78(b). Lastly, we proposed to 
amend Sec.  413.75(b) to include the definition of the term 
``orientation activities'' and to amend the definition of ``patient 
care activities'' to add ``orientation activities.''
    After consideration of the public comments received, at this time 
we are not finalizing our proposed policy to remove vacation and sick 
leave from the determination of the FTE calculation. However, we are 
adopting as final our proposed policy to continue counting time spent 
by residents in orientation activities for IME and direct GME in the 
hospital complex; and, effective for cost reporting periods beginning 
on or after October 1, 2007, we are finalizing the policy that 
orientation activities occurring in a nonhospital site where patient 
care is routinely provided and the hospital complies with the 
regulations set for at Sec. Sec.  413.78(f), and 412.105(f)(1)(ii)(C)) 
may be counted. We are also finalizing our proposal to define 
``orientation activities'' the regulations text at Sec.  413.75(b) as 
``activities that are principally designed to prepare an individual for 
employment as a resident in a particular setting, or for participation 
in a particular specialty program and patient care activities 
associated with that particular specialty program.'' We are also 
finalizing our proposal to modify the definition of ``patient care 
activities'' to mean ``the care and treatment of particular patients, 
including services for which a physician or other practitioner may 
bill, and orientation activities as defined in this section.''

E. Payments to Disproportionate Share Hospitals (DSHs): Technical 
Correction

1. Background
    Section 1886(d)(5)(F) of the Act provides for additional payments 
to subsection (d) hospitals that serve a disproportionate share of low-
income patients. The Act specifies two methods for a hospital to 
qualify for the Medicare disproportionate share hospital (DSH) 
adjustment. Under the first method, hospitals that are located in an 
urban area and have 100 or more beds may receive a DSH payment 
adjustment if the hospital can demonstrate that, during its cost 
reporting period, more than 30 percent of its net inpatient care 
revenues are derived from State and local government payments for care 
furnished to indigent patients. These hospitals are commonly known as 
``Pickle hospitals.'' The second method, which is also the most 
commonly used method for a hospital to qualify, is based on a complex 
statutory formula under which payment adjustments are based on the 
level of the hospital's DSH patient percentage, which is the sum of two 
fractions: The ``Medicare fraction'' and the ``Medicaid fraction.'' The 
Medicare fraction is computed by dividing the number of patient days 
that are furnished to patients who were entitled to both Medicare Part 
A and Supplemental Security Income (SSI) benefits by the total number 
of patient days furnished to patients entitled to benefits under 
Medicare Part A. The Medicaid fraction is computed by dividing the 
number of patient days furnished to patients who, for those days, were 
eligible for Medicaid but were not entitled to benefits under Medicare 
Part A by the number of total hospital patient days in the same period.
[GRAPHIC] [TIFF OMITTED] TR22AU07.000


[[Page 47384]]


2. Technical Correction: Inclusion of Medicare Advantage Days in the 
Medicare Fraction of the Medicare DSH Calculation
    In the FY 2005 IPPS final rule (69 FR 49099), we discussed in the 
preamble our policy change to reflect the inclusion of the days 
associated with Medicare + Choice (now Medicare Advantage) 
beneficiaries under Medicare Part C in the Medicare fraction of the DSH 
calculation. In that rule, we indicated that we were revising the 
regulation text at Sec.  412.106(b)(2)(i) to incorporate this policy. 
However, we inadvertently did not make a change in the regulation text 
to conform to the preamble language. We also inadvertently did not 
propose to change Sec.  412.106(b)(2)(iii) in the FY 2005 final rule, 
although we intended to do so. Section 412.106(b)(2)(i) of the 
regulations discusses the numerator of the Medicare fraction of the 
Medicare disproportionate patient percentage (DPP) calculation while 
Sec.  412.106(b)(2)(iii) of the regulations discusses the denominator 
of the Medicare fraction of the Medicare DPP. We intended to amend the 
regulation text with respect to both the numerator and the denominator 
of the Medicare fraction of the Medicare DPP. Therefore, in this final 
rule with comment period, we are making this technical correction to 
Sec.  412.106(b)(2)(i) and to Sec.  412.106(b)(2)(iii) to make them 
consistent with the preamble language of the FY 2005 IPPS final rule 
and to effectuate the policy iterated in that rule.
    With respect to the technical correction that we are making to 
Sec.  412.106(b)(2)(iii), we note that we ordinarily publish a notice 
of proposed rulemaking in the Federal Register to provide for a period 
for public comment before a provision such as this would take effect. 
However, we can waive this procedure 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 notice issued. We find it unnecessary to 
undertake notice and comment rulemaking in this instance for the 
additional change to Sec.  412.106(b)(2)(iii) because this notice 
merely provides technical corrections to the regulations and does not 
make any substantive changes to the regulations or our existing policy. 
Therefore, under 5 U.S.C. 533(b)(B), for good cause, we waive notice 
and comment procedures.

F. Hospital Emergency Services Under EMTALA (Sec.  489.24)

1. Background
    Sections 1866(a)(1)(I), 1866(a)(1)(N), and 1867 of the Act impose 
specific obligations on certain Medicare-participating hospitals and 
CAHs. (Throughout this section of this final rule with comment period, 
when we reference the obligation of a ``hospital'' under these sections 
of the Act and in our regulations, we mean to include CAHs as well.) 
These obligations concern individuals who come to a hospital emergency 
department and request examination or treatment for medical conditions, 
and apply to all of these individuals, regardless of whether they are 
beneficiaries of any program under the Act.
    The statutory provisions cited above are frequently referred to as 
the Emergency Medical Treatment and Labor Act (EMTALA), also known as 
the patient antidumping statute. EMTALA was passed in 1986 as part of 
the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA), 
Pub. L. 99-272. Congress incorporated these antidumping provisions 
within the Social Security Act to ensure that individuals with 
emergency medical conditions are not denied essential lifesaving 
services because of a perceived inability to pay.
    Under section 1866(a)(1)(I)(i) of the Act, a hospital that fails to 
fulfill its EMTALA obligations under these provisions may be liable for 
termination of its Medicare provider agreement, which would result in 
loss of all Medicare and Medicaid payments.
    Section 1867 of the Act sets forth requirements for medical 
screening examinations for individuals who come to the hospital and 
request examination or treatment for a medical condition. The section 
further provides that if a hospital finds that such an individual has 
an emergency condition, it is obligated to provide that individual with 
either necessary stabilizing treatment or an appropriate transfer to 
another medical facility where stabilization can occur.
    The EMTALA statute also outlines the obligation of hospitals to 
receive appropriate transfers from other hospitals. Section 1867(g) of 
the Act states that a participating hospital that has specialized 
capabilities or facilities (such as burn units, shock-trauma units, 
neonatal intensive care units or (with respect to rural areas) regional 
referral centers as identified by the Secretary in regulation) shall 
not refuse to accept an appropriate transfer of an individual who 
requires these specialized capabilities or facilities if the hospital 
has the capacity to treat the individual.
    The regulations implementing section 1867 of the Act are found at 
42 CFR 489.24.
2. Recent Legislation Affecting EMTALA Implementation
a. Secretary's Authority To Waive Requirements During National 
Emergencies
    Section 1135 of the Act authorizes the Secretary to temporarily 
waive or modify the application of several requirements of titles 
XVIII, XIX, or XXI of the Act (the Medicare, Medicaid, and State 
Children's Health Insurance Program provisions), and their implementing 
regulations in an emergency area during an emergency period. Section 
1135(g)(1) of the Act defines an ``emergency area'' as the geographical 
area in which there exists an emergency or disaster declared by the 
President pursuant to the National Emergencies Act or the Robert T. 
Stafford Disaster Relief and Emergency Assistance Act (subsection A) 
and a public health emergency declared by the Secretary pursuant to 
section 247d of Title 42 of the United States Code. Section 1135(g)(1) 
of the Act also defines an ``emergency period'' as the period during 
which such a disaster exists. Section 1135(b) of the Act lists the 
actions for which the otherwise applicable statutory provisions and 
implementing regulations may be waived. Included among these actions 
are, in subparagraph (b)(3)(A), a transfer of an individual who has not 
been stabilized in violation of the EMTALA requirements restricting 
transfer until an individual has been stabilized (section 1867(c) of 
the Act) and, in subparagraph (b)(3)(B), the direction or relocation of 
an individual to receive medical screening in an alternate location, in 
accordance with an appropriate State emergency preparedness plan.
    Section 1135(b) of the Act further states that a waiver or 
modification provided for under section 1135(b)(3) of the Act shall be 
limited to a 72-hour period beginning upon implementation of a hospital 
disaster protocol. All other waivers arising out of section 1135(b) of 
the Act (except for section 1135(b)(7)) ordinarily may continue in 
effect for the duration of the declaration of emergency or disaster, or 
the declaration of a public health emergency, or for 60-day periods as 
described in section 1135(e)(1) of the Act.
    To take into account the effect of section 1135(b)(3)(A) waivers on 
the EMTALA requirements, Sec.  489.24(a)(2) of our regulations 
specifies that sanctions

[[Page 47385]]

under the EMTALA regulations for inappropriate transfer during a 
national emergency do not apply to a hospital with a dedicated 
emergency department located in an emergency area, as specified in 
section 1135(g)(1) of the Act. However, the current regulations do not 
address the Secretary's authority to waive sanctions associated with 
the direction or relocation of an individual to receive a medical 
screening examination.
    For further information about section 1135 of the Act and its 
applicability, we refer readers to the CMS Web site: http://www.cms.hhs.gov/Emergency/02_Hurricanes.asp.
b. Provisions of the Pandemic and All-Hazards Preparedness Act
    On December 19, 2006, Congress enacted the Pandemic and All-Hazards 
Preparedness Act, Pub. L. 109-417. Section 302(b) of Pub. L. 109-417 
makes two specific changes that affect EMTALA implementation in 
emergency areas during an emergency period.
    As noted above, section 1135(b)(3) of the Act authorized the 
Secretary to waive sanctions for either the transfer of an unstabilized 
individual in violation of the requirements of section 1867(c) of the 
Act where such transfer is necessitated by the circumstances of the 
declared emergency in the emergency area during the emergency period or 
the direction or relocation of an individual to receive medical 
screening in an alternate location in accordance with an appropriate 
State emergency preparedness plan. Section 302(b)(1)(A) of Pub. L. 109-
417 amended section 1135(b)(3)(B) of the Act to state that sanctions 
for the direction or relocation of an individual for screening may be 
waived where, in the case of a public health emergency that involves a 
pandemic infectious disease, that direction or relocation occurs 
pursuant to a State pandemic preparedness plan, or to an appropriate 
State emergency preparedness plan. In addition, sections 302(b)(1)(B) 
and (b)(1)(C) of Pub. L. 109-417 amended section 1135(b) of the Act to 
further state that ``if a public health emergency involves a pandemic 
infectious disease (such as pandemic influenza), the duration of a 
waiver or modification for such emergency shall be determined in 
accordance with section 1135(e) of the Act as such subsection applies 
to public health emergencies.'' The amendments to section 1135(b) of 
the Act made by section 302(b) of Pub. L. 109-417 are effective as of 
the date of enactment of that legislation (December 19, 2006) and apply 
to public health emergencies declared pursuant to section 247d of Title 
42 of the United States Code.
c. Revisions to the EMTALA Regulations
    Currently, the EMTALA regulation at 42 CFR 489.24(a)(2) specifies 
that sanctions under this section (Sec.  489.24) for inappropriate 
transfers during a national emergency do not apply to a hospital with a 
dedicated emergency department located in an emergency area, as 
specified in section 1135(g)(1) of the Act. To implement the changes 
made by section 302(b) of Pub. L. 109-417 and to ensure that our 
regulations accurately reflect section 1135 of the Act, in the FY 2008 
IPPS proposed rule (72 FR 24816), we proposed to make two changes to 
paragraph (a)(2) of Sec.  489.24. First, we proposed to specify that 
the sanctions that do not apply are those for either the inappropriate 
transfer of an individual who has not been stabilized, or those for the 
direction or relocation of an individual to receive medical screening 
at an alternate location. We also proposed to revise Sec.  489.24 by 
adding a second sentence to paragraph (a)(2) to state that a waiver of 
these sanctions for EMTALA violations is limited to a 72-hour period 
beginning upon the implementation of a hospital disaster protocol, 
except that if a public health emergency involves a pandemic infectious 
disease (such as pandemic influenza), the duration of the waiver will 
be determined in accordance with section 1135(e) of the Act as it 
applies to public health emergencies. This proposed change would 
clarify that, in the case of public health emergencies involving 
pandemic infectious diseases, the waiver of EMTALA sanctions is not 
limited to 72 hours, but will remain in effect until the termination of 
the applicable declaration of a public health emergency as described in 
section 1135(e)(1)(B) of the Act.
    We received several public comments that generally supported the 
updating of the regulations to reflect the new legislation. These 
comments did not include any specific recommendations for change. 
Therefore, we are adopting as final, without modification, the proposed 
revision to Sec.  489.24 to specify that the sanctions that do not 
apply are those for either the inappropriate transfer of an individual 
who has not been stabilized, or those for the direction or relocation 
of an individual to receive medical screening at an alternate location 
and to add a second sentence to paragraph (a)(2) to state that a waiver 
of these sanctions for EMTALA violations is limited to a 72-hour period 
beginning upon the implementation of a hospital disaster protocol, 
except that if a public health emergency involves a pandemic infectious 
disease (such as pandemic influenza), the duration of the waiver will 
be determined in accordance with section 1135(e) of the Act as it 
applies to public health emergencies.

G. Disclosure of Physician Ownership in Hospitals and Patient Safety 
Measures

1. Disclosure of Physician Ownership in Hospitals
    Section 1866 of the Act states that any provider of services 
(except a fund designated for purposes of section 1814(g) and section 
1835(e) of the Act) shall be qualified to participate in the Medicare 
program and shall be eligible for Medicare payments if it files a 
Medicare provider agreement and abides by the requirements applicable 
to Medicare provider agreements. These requirements are incorporated 
into our regulations in 42 CFR part 489, subparts A and B (Provider 
Agreements and Supplier Approval). Section 1861(e) of the Act defines 
the term ``hospital.'' Section 1861(e)(9) of the Act defines a hospital 
and authorizes the Secretary to establish requirements as he finds 
necessary in the interest of patient health and safety. Section 
1820(e)(3) of the Act authorizes the Secretary to establish criteria 
necessary for an institution to be certified as a CAH.
    Section 5006 of Pub. L. 109-171 (DRA) required the Secretary to 
develop a ``strategic and implementing plan'' to address certain issues 
related to physician investment in ``specialty hospitals.'' In the 
strategic and implementing plan included in our ``Final Report to the 
Congress and Strategic and Implementing Plan Required under Section 
5006 of the Deficit Reduction Act of 2005'' issued on August 8, 2006 
(page 69), available on our Web site at: http://www.cms.hhs.gov/PhysicianSelfReferral/06a_DRA_Reports.asp (hereinafter referred to as 
the ``DRA Report to Congress''), we stated that our plan for addressing 
issues related to physician investment in specialty hospitals involved 
promoting transparency of investment. Consistent with that approach, we 
stated that we would adopt a disclosure requirement that would require 
hospitals to disclose to patients whether they are physician-owned, and 
if so, disclose the names of the physician owners. Accordingly, in the 
FY 2008 IPPS proposed rule (72 FR 24816), we proposed changes to 
regulations governing Medicare provider agreements to effectuate this

[[Page 47386]]

change, under our authority at sections 1861(e)(9), 1820(e) and 1866 of 
the Act, and under our rulemaking authority at sections 1871 and 1102 
of the Act. We sought comment as to whether these changes would be best 
effectuated through changes to the Medicare provider agreement 
regulations or whether it would be more appropriate to include these 
changes in the conditions of participation (CoPs) applicable to 
hospitals and CAHs.
    Specifically, we proposed to amend Sec.  489.3 to define a 
``physician-owned hospital'' as any participating hospital (which, as 
defined in Sec.  489.24 includes any CAH) in which a physician or 
physicians have an ownership or investment interest. We solicited 
comments on whether, for purposes of the ownership disclosure 
requirements only, the definition of ``physician-owned hospital'' 
should exclude certain physician ownership or investment interests 
based on the nature of the interest, or the relative size of the 
interest, or the entity's assets (for example, whether the interest 
would satisfy the exceptions at Sec. Sec.  411.356(a) and (b) for 
physician ownership or investment interest in publicly-traded 
securities and mutual funds).
    We proposed to add a new provision at Sec.  489.20(u)(1) to require 
that patients be given written notice that a hospital is physician-
owned and that the list of physician owners is available upon request. 
We proposed to require that the notice, in a manner reasonably designed 
to be understood by all patients, disclose the fact that the hospital 
meets the Federal definition of a ``physician-owned hospital'' and that 
patients will be provided the list of the hospital's physician owners 
upon request. In addition, we proposed to add a new provision at Sec.  
489.20(u)(2) that would require hospitals to require that all physician 
owners who are also members of the hospital's medical staff to 
disclose, in writing, their ownership interest in the hospital to all 
patients they refer to the hospital, as a condition of continued 
medical staff membership. Patient disclosure would be required at the 
time a physician makes a referral. We stated that we believed that 
these provisions are in the interest of the health and safety of 
individuals who are furnished services in these institutions. The 
proposed notice requirement would permit individuals to make more 
informed decisions regarding their treatment, and to evaluate whether 
the existence of a financial relationship, in the form of an ownership 
interest, suggests a conflict of interest that is not in their best 
interest.
    In order to enforce these proposed requirements, we proposed to 
amend Sec.  489.12 to permit CMS to deny a provider agreement to a 
hospital that does not have procedures in place to notify patients of 
physician ownership in the hospital. In addition, we proposed to amend 
Sec.  489.53 to permit CMS to terminate a provider agreement with a 
physician owned hospital if the hospital fails to comply with the 
requirements of Sec.  489.20(u).
    We received a number of comments concerning our proposal. Most came 
from national and state hospital associations, and a few were received 
from individual hospitals, and two associations representing physician-
owned hospitals.
    Comment: Commenters representing hospital associations were 
generally supportive of the physician ownership disclosure proposal, 
but recommended that CMS except from the definition of a ``physician-
owned hospital'' those hospitals in which the physician ownership is 
limited to holding publicly traded securities or mutual funds that 
satisfy the requirements of the exceptions under Sec. Sec.  411.356(a) 
or (b).
    Response: We agree and are revising the regulatory text at Sec.  
489.3 accordingly.
    Comment: Several commenters requested that CMS revise the timing of 
the hospital's written notice of the disclosure of physician ownership 
to patients. The commenters requested that CMS clarify that the written 
notice be given to patients, not only with the provision of a package 
of information regarding preadmission testing and registration, but 
also at the time of scheduling.
    Response: We believe that the specific revisions suggested by the 
commenters would not be feasible. The scheduling of most inpatient or 
outpatient services is performed by a staff member in the physician's 
office, rather than the patient. Therefore, the first contact between 
the hospital and the patient usually will be when the hospital sends a 
package of information regarding scheduled preadmission testing and 
registration for a planned hospital admission for inpatient care or 
outpatient service. We do recognize the benefit to patients of 
receiving this information at the earliest opportunity, and in those 
instances where the patient and the hospital are scheduling the 
inpatient admission or outpatient services, we encourage hospitals to 
provide the notice at that time.
    Comment: Several commenters noted that the proposal requires 
physician-owned hospitals to provide patients with a list of the 
hospital's physician owners or investors upon request, but does not 
establish any timeframe for the hospital to furnish the list to the 
patient. The commenters suggested that the list be provided to the 
patient at the time the request is made.
    Response: While we expect a hospital to make this list available to 
a patient upon request, and that this should be done at the earliest 
possible opportunity, we believe that it is important to allow the 
hospital some degree of flexibility regarding the manner and form by 
which it meets this requirement. Therefore, we are not revising the 
provision to include any specific timeframe for making the list 
available.
    Comment: Many comments addressed the appropriateness of our 
decision to propose a physician ownership disclosure requirement for 
all hospitals. Although most commenters supported our proposal, two 
commenters recommended that the proposed ownership disclosure 
requirement be limited to those facilities that meet the specialty 
hospital definition under section 1877(h)(7) of the Act. The commenters 
contended that the research to date raises concerns about ownership and 
referrals related to specialty hospitals only, and that similar 
concerns have not been raised about other types of hospitals with 
physician ownership.
    Response: We are not adopting the commenters' suggested changes. We 
believe that it is in the best interests of patients to have available 
physician ownership information concerning all hospitals.
    Comment: Most commenters agreed with our proposal to effectuate a 
hospital physician ownership disclosure requirement through changes to 
the regulations governing Medicare provider agreements. However, one 
commenter recommended that the proposal be effectuated through changes 
to the CoPs applicable to hospitals and CAHs. The commenter believed 
that the use of the CoPs is more practical for enforcement purposes and 
states that the provider agreement rules are only referenced when a 
healthcare facility initially enrolls, with no subsequent review of 
compliance.
    Response: We are finalizing the hospital physician ownership 
disclosure requirements through the regulations governing Medicare 
provider agreements. We believe that this approach is better than using 
the Medicare CoPs, which are centered on quality of care. We also 
disagree with the commenters' assertion that there is no subsequent 
review of compliance with the provider agreement rules after

[[Page 47387]]

initial enrollment. CMS reviews compliance with the provider agreement 
rules after initial enrollment, and, if a provider is out of 
compliance, CMS may terminate its provider agreement.
    Comment: One commenter urged CMS to make the disclosure requirement 
applicable to all financial arrangements between physicians and all 
hospitals, not just ownership and investment interests by physicians in 
physician-owned hospitals. The commenter encouraged CMS to require 
disclosure of financial interests such as salaries, bonuses, medical 
directorships, and consulting arrangements, as well as any other 
arrangements conferring a material financial benefit upon a physician 
by a hospital.
    Response: We are not adopting the commenter's suggestions. We 
believe the physician ownership disclosure proposal focuses on those 
hospitals whose ownership or investment interests might be most 
relevant to patients in deciding whether and where to undergo medical 
treatment. The voluminous amount of information suggested by the 
commenter would be of little additional benefit to patients in making 
such decisions. In addition, we believe that our proposal strikes the 
appropriate balance between providing useful information to the patient 
and not unnecessarily burdening physicians and hospitals.
    Comment: One commenter strongly opposed physician ownership 
disclosure as a condition of continued medical staff membership and 
stated that hospitals have no effective means to police medical staff 
members in this manner. Another commenter believed that changes must be 
made to Sec.  482.22(c), which lists requirements for medical staff 
bylaws, to provide that bylaws of physician-owned hospitals must 
contain a provision requiring physician ownership disclosure as 
condition of continued medical staff membership.
    Response: We believe that the overall intent of this physician 
ownership disclosure requirement is to provide patients with the 
information that they need to decide whether the existence of a 
financial relationship, in the form of a physician ownership interest, 
is in their best interests as a potential patient of the hospital. 
Therefore, we are not finalizing the proposed provision at Sec.  
489.20(u)(2), which ties a physician's continued medical staff 
membership to this disclosure of ownership, because it would not 
provide any additional protections for patients that are not already 
contained under Sec.  489.20(u)(1). Furthermore, the provision at Sec.  
489.20(u)(1) allows hospitals much greater flexibility in meeting this 
disclosure requirement than would be provided by the inclusion of Sec.  
489.20(u)(2).
    For similar reasons, we disagree with the commenter who believed 
that changes must be made to the medical staff bylaws provision under 
the CoPs at Sec.  482.22(c). As previously stated, we believe that the 
appropriate area for the hospital physician ownership disclosure 
requirement is in the regulations governing Medicare provider 
agreements.
    Comment: One commenter asserted that the disclosure of physician 
ownership interests provides no useful information to the patient 
unless the notice is done in concert with an outreach and educational 
initiative for patients that provides other information about the 
hospital so the patient can make an informed decision.
    Response: We believe the disclosure of physician ownership 
interests does provide useful information. However, we will carefully 
consider the recommendation to conduct an outreach and educational 
initiative for patients.
    Comment: One commenter recommended that CMS establish a de minimis 
level of physician investment below which no notification would be 
necessary.
    Response: We are not establishing a de minimis level of physician 
investment. Rather than establishing an arbitrary threshold, we believe 
that patients should be informed about any level of physician 
investment. However, as discussed above, we have excluded ownership 
interests that satisfy the exceptions found in Sec. Sec.  411.356(a) 
and (b) from the definition of a physician-owned hospital found at 
Sec.  498.3.
    Comment: One commenter (a healthcare system) recommended that 
instead of revoking hospital privileges of physician investors or 
owners that fail to provide the required disclosure, CMS should deny 
payments to physicians who fail to disclose their ownership in a 
hospital at the time the referral is made.
    Response: We are not adopting the commenter's suggestion. We do not 
believe that we have the statutory authority to take such action.
    After consideration of the public comments we received, we are 
revising the proposed changes to Sec.  489.3 by adding a provision to 
except from the definition of a ``physician-owned hospital'' those 
hospitals in which the physician ownership is limited to holding 
publicly traded securities or mutual funds that satisfy the 
requirements of the exception underSec.  411.356(a) or (b). We are 
adopting as final, without modification, the proposed revisions to 
Sec. Sec.  489.12 and 489.53. We are redesignating proposed paragraph 
(u)(1) of Sec.  489.20 as paragraph (u) and revising it to specify that 
the hospital should furnish a list of physician owners to patients at 
the beginning of their hospital stay or outpatient visit. We are not 
adopting the proposed regulatory text under Sec.  489.20(u)(2).
2. Patient Safety Measures
    In the DRA Report to Congress (page 67), we stated that it was 
appropriate to issue further guidance on what we expect of all 
hospitals with respect to the appraisal, initial treatment, and 
referral, when appropriate, of patients with medical emergencies. The 
Medicare hospital CoP regulations at 42 CFR Part 482 impose 
requirements on hospitals that have emergency departments, as well as 
requirements on hospitals without emergency departments. We believe 
that hospitals should be required to disclose to patients at the time 
of inpatient admission or registration for an outpatient service 
information concerning whether a physician is available on the premises 
24 hours per day, 7 days per week. In the FY 2008 IPPS proposed rule 
(72 FR 24817), under the authority at sections 1861(e)(9), 1820(e)(3), 
1866, 1871, and 1102 of the Act (described previously), we proposed to 
add a new provision at Sec.  489.20(v) to require that hospitals 
furnish all patients notice at the beginning of their hospital stay or 
outpatient service if a doctor of medicine or a doctor of osteopathy is 
not present in the hospital 24 hours per day, 7 days per week, and to 
describe how the hospital will meet the medical needs of any patient 
who develops an emergency medical condition, at a time when no 
physician is present in the hospital. We sought comment as to whether 
this change would be best effectuated through changes to the Medicare 
provider agreement regulations or whether it would be more appropriate 
to include this change in the CoP requirements applicable to acute care 
hospitals and CAHs.
    It has also come to our attention that some hospitals have called 
9-1-1 when a patient has gone into respiratory arrest, a physician has 
not been on the premises, and the onsite clinical personnel have lacked 
the requisite equipment or training to provide the required assessment, 
initial treatment, and referrals that are required of all hospitals. In 
some cases, required interventions to initiate emergency treatment may 
be outside the scope of

[[Page 47388]]

practice of the clinical personnel onsite. This has occurred even in 
hospitals that operate emergency departments. Therefore, in the FY 2008 
IPPS proposed rule (72 FR 24817), we solicited comments on whether 
current requirements for emergency service capability in hospitals with 
or without emergency departments should be strengthened in certain 
areas. Specifically, we sought feedback on whether present regulatory 
provisions should be expanded with respect to the type of clinical 
personnel that must be present at all times in hospitals with and 
without emergency departments; the competencies that such personnel 
must demonstrate, such as training in Advanced Cardiac Life Support, or 
successful completion of specified professional training programs; the 
type of emergency response equipment that must be available and the 
manner in which it must be available, such as in each emergency 
department, or inpatient unit, among others; and whether emergency 
departments must be operated 24 hours per day, 7 days per week. We 
indicated that after evaluating the comments we received, we would 
consider whether we should amend the Medicare hospital CoPs related to 
the provision of emergency services in hospitals with and without 
emergency departments.
    We received a number of public comments on our proposal. Our 
response follows each comment summary below.
    Comment: Most of the commenters stated that only physician-owned 
specialty hospitals should be required to disclose to patients whether 
or not a physician is on site at all times and how emergencies are 
handled when a physician is not on-site. The commenters stated that 
physician-owned specialty hospitals are generally not part of a larger 
system of care, most often have no transfer agreements with other 
hospitals, and tend to specialize in one type of care delivery, and 
that these factors create challenges to their ability to treat the 
unexpected emergency. The commenters also stated that ``full-service 
community'' hospitals are part of a network of care in their community 
that involves referrals from local physician practices, reliance on 
local trauma support networks, participation in local emergency medical 
transport systems, and transfer agreements among facilities. The 
commenters stated that applying additional requirements to full-service 
community hospitals is unnecessary and costly. However, they stated 
that applying them to physician-owned specialty hospitals could be used 
to assure that such hospitals, in the absence of being part of the 
broader care network, meet minimum standards for patient safety.
    In contrast, several other commenters stated that they supported a 
requirement to disclose onsite physician coverage, so long at it 
applies to all hospitals, regardless of whether they are physician-
owned. Another commenter supported extending the physician onsite 
disclosure requirement to all hospitals and CAHs, stating that ideally 
all patients should be informed regarding the level of physician 
staffing present in the hospital. This commenter stated that patients 
should know, for example, whether a physician will remain in the 
hospital until all patients have recovered from anesthesia and are 
fully conscious. The commenter also stated that patients should be 
informed of the hospital's emergency response plan when a physician is 
not on the premises 24 hours per day, 7 days per week.
    Response: Fully informed consumers of hospital and CAH services 
play an essential role in assuring the quality of health care services. 
It is important to provide patients information about whether a 
hospital or CAH has a physician on site at all times, and the 
provisions for handling emergencies when a physician is not on site. 
Consumers may have an expectation that a hospital or CAH, as a health 
care facility that operates 24 hours per day, 7 days per week, always 
has a physician on site. Therefore, it is important to ensure that 
consumers are provided accurate information on the availability of 
physician services at the point when they are about to become patients 
of a hospital or CAH. All hospitals and CAHs are required to have the 
basic capabilities to address medical emergencies within their 
facilities, regardless of whether a physician is always on-site and, in 
the case of hospitals, regardless of whether or not the hospital offers 
an emergency department or service. (All CAHs are required to offer 
emergency services.)
    In order to be fully informed, consumers also should be made aware 
of the hospital's or CAH's process for addressing medical emergencies 
that may occur when a physician is not on-site. Therefore, we have not 
adopted the suggestion of those commenters who would condition 
consumers'' access to this information on the basis of the ownership 
structure of the hospital or CAH. Medicare hospital health and safety 
regulations are the same for all participating hospitals, regardless of 
their type of ownership. The same is true for the Medicare CAH health 
and safety regulations. For example, all hospitals are expected to have 
the capability to assess a medical emergency, provide initial 
treatment, and refer, or transfer, a patient to another hospital when 
appropriate. Given the uniform applicability of hospital and CAH 
requirements to all hospitals or CAHs, there is no basis for requiring 
only those hospitals or CAHs that are physician-owned to make the 
proposed physician availability-related disclosures. The disclosure 
requirement is appropriately triggered when a hospital or CAH does not 
have a physician on-site 24 hours per day, 7 days per week.
    As discussed in the regulatory impact statement, this final rule 
with comment period change will not have any significant economic 
impact on hospitals or CAHs. Therefore, we disagree with those 
commenters who stated that the physician-availability disclosure 
requirement would be costly for hospitals and CAHs.
    Comment: Several commenters addressed whether the physician-
availability disclosure requirement should apply to CAHs as well as 
hospitals. One commenter stated that the problem of hospitals ill-
prepared to handle patient emergencies seems confined to specialty 
hospitals. This commenter stated that the physician-availability 
disclosure requirement would affect numerous rural hospitals and CAHs, 
which often do not have physicians on site, and often utilize physician 
assistants or nurse practitioners, or both, with a supervising 
physician available by telephone. The commenter stated that, because 
these hospitals have established referral systems and often serve as 
staging areas where patients are stabilized for transport, additional 
requirements would be unnecessary and costly. The commenter also stated 
that limiting rural hospitals' and CAHs' ability to utilize physician 
assistants and nurse practitioners would create substantial access 
problems.
    Similarly, another commenter stated that the proposed change would 
be a particular problem for CAHs. This commenter stated that the CAH 
CoPs have been written expressly to provide flexibility for CAHs so 
they can meet the needs of patients in isolated, rural communities 
without having a physician in the building at all times.
    In contrast, another commenter stated that the physician-
availability disclosure requirement should include CAHs because there 
is no clear distinction between the services offered by physician-owned 
specialty hospitals and CAHs. This commenter stated that, while most 
CAHs are nonprofit

[[Page 47389]]

hospitals that provide a range of services to small rural communities, 
some CAHs are for-profit hospitals and some offer specialty services. 
The commenter stated he was aware of one CAH with a hand surgery focus 
and another with a cardiac catheterization laboratory. The commenter 
stated that, because CAHs are not restricted in the services they 
offer, they should have the same physician-availability disclosure 
requirements as other hospitals.
    Response: We agree that the physician-availability disclosure 
requirement should apply equally to hospitals and CAHs. Although we 
agree with those commenters who stated that many CAHs do not have 
physicians on-site at all times, and thus would be required to disclose 
this information to patients, we do not agree that this alone is 
sufficient reason to exempt CAHs from the physician-availability 
disclosure requirement. It would not be appropriate to condition 
patients' access to information on physician availability on whether or 
not the patients reside in a rural area. Because we do not require 
either hospitals or CAHs to have a physician on-site at all times, 
there is no basis to require only hospitals, but not CAHs, to disclose 
this information. As one commenter stated, the CAH CoPs provide greater 
flexibility in many areas when compared to the hospital CoPs. However, 
this is not the case in all areas. CAHs, for example, must provide 
emergency services to the public 24 hours per day, while hospitals have 
the option of operating an emergency department or not. Furthermore, as 
one commenter stated, there is no restriction on the types of services 
a CAH may offer. Thus, it may be difficult for consumers to distinguish 
whether a given provider is a hospital or a CAH. Consumers may not be 
aware that there are different requirements for CAHs than for 
facilities participating in Medicare as hospitals. Consumers may make 
assumptions about physician availability in any ``hospital,'' because 
the facility provides services 24 hours per day, 7 days per week, 
regardless of whether that facility is a CAH or hospital for Medicare 
purposes. Therefore, it is important for consumers to be informed 
whether a physician is always on site, and how emergencies will be 
handled when no physician is available. We do not agree that this 
requirement limits the ability of rural hospitals or CAHs to utilize 
physician assistants and nurse practitioners. There is no change to the 
current requirements in the CoPs for hospitals or CAHs regarding 
utilization of physician assistants and nurse practitioners.
    Comment: One commenter stated a physician-availability disclosure 
requirement should apply only to facilities that provide inpatient care 
24 hours per day, 7 days per week. The commenter stated that CMS should 
clarify in the FY 2008 IPPS final rule that the requirement does not 
apply to provider-based settings that are not open at all times and/or 
are not providing inpatient services. The commenter stated that 
disclosure of emergency services capabilities in the registration 
process will create greater confusion for patients.
    Response: Because the requirement in this final rule with comment 
period applies to hospitals and CAHs, and because both hospitals and 
CAHs are required to make inpatient care available on a 24 hours per 
day, 7 days per week basis, we do not agree that the requirement would 
be narrowed to fewer facilities by applying it only to facilities 
providing inpatient care. We do not agree that provider-based locations 
are subject to a separate standard because they do not participate 
separately in Medicare. The health and safety standards apply to 
provider-based locations of hospitals or CAHs. All provider-based 
locations of a hospital or CAH are considered part of the hospital or 
CAH, and the provider-based location's clinical services, including the 
provision of emergency services, must be integrated into those of the 
hospital or CAH.
    Comment: One commenter stated that the proposed requirement fails 
to provide timely or useful information to the patient, indicating that 
the physician-availability disclosure occurs post-admission. The 
commenter stated that CMS should undertake a comprehensive consumer 
education initiative prior to imposing this requirement, so that the 
patient could make an informed choice about any particular facility.
    Response: We do not agree that the patient would, in every 
instance, already have been admitted before the required physician-
availability disclosure would take place. We proposed that, for 
purposes of this disclosure requirement, the hospital stay or 
outpatient visit begins with the provision of a package of information 
regarding scheduled preadmission testing and registration for a planned 
hospital admission for inpatient care or the provision of a package of 
information regarding an outpatient service. It is our intent that this 
information be provided by the hospital to the consumer at the first 
point of contact related to a particular admission or episode of care, 
in order to enhance its usefulness.
    CMS strives, as part of its overall commitment to increasing the 
transparency of the health care system to consumers, to equip consumers 
with information that enables them to make informed choices about their 
care. Education and outreach about our efforts are ongoing. We do not 
agree that implementation of the physician-availability disclosure 
requirement should be delayed until a specific educational campaign is 
concluded.
    Comment: One commenter stated that hospitals are currently required 
to have a plan in place for how they will provide care, including 
emergency care. The commenter stated that the physician-availability 
disclosure requirement is therefore redundant and places an unnecessary 
burden on the facility.
    Response: We do not agree that having a plan in place for providing 
emergency care is the same as informing consumers about the 
availability of physician services and how emergency care will be 
provided to them when a physician is not on the premises. The 
physician-availability disclosure required by this final rule with 
comment period is intended to assure provision of important information 
to consumers making healthcare decisions. This requirement is separate 
and distinct from any requirements contained in the hospital and CAH 
CoPs regarding the provision of emergency services and the care 
planning for each patient, among others.
    Comment: One commenter stated that the required disclosure 
``arguably'' should be extended to cover the presence or absence of 
particular equipment, or the level of expertise of the facility's 
staff, so the patient can understand what to expect depending on the 
nature of the emergency and the capabilities of the facility, and the 
likelihood of transfer to another hospital for any particular medical 
emergency.
    Response: Ideally, an informed consumer would have a comprehensive 
understanding of the capabilities of any hospital and/or CAH, in terms 
of both specialized equipment and staff, that the consumer considers 
using. However, the commenter's suggestion would greatly expand the 
impact of the physician-availability disclosure requirement. Instead of 
affecting only those hospitals and CAHs that do not have a physician 
present 24 hours per day, 7 days per week, the commenter's suggested 
approach would affect all hospitals and CAHs. It would not only 
increase the number of hospitals and CAHs affected by the requirement, 
but would also

[[Page 47390]]

require them to provide a much more detailed and lengthy disclosure. 
Therefore, at this time, we will not be mandating an expanded 
disclosure requirement. Hospitals have the flexibility to provide such 
additional information to consumers, either as a general policy or in 
response to questions from consumers.
    Comment: One commenter did not object to informing patients when a 
physician is not always in the facility. However, the commenter hoped 
that the required notice of how emergency services would be provided 
would not imply that patients are receiving less than competent care. 
The commenter stated that a hospital could make an affirmative 
statement, such as the following: ``This facility provides competent, 
fully trained staff who are available 24 hours per day. At times when 
there is no physician present, patients with health care emergencies 
will be assessed and treated by qualified medical personnel, with 
physician support available via telephone or pager, and will be 
transferred to another hospital, when necessary.''
    Response: We are requiring hospitals and CAHs that do not have a 
physician on site at all times to state this in the notice, as well as 
how the hospital will meet the needs of any patient who develops an 
emergency medical condition at a time when there is no physician 
present. We are not prescribing specific wording for the notice, since 
the content must be tailored to the circumstances of the individual 
hospital or CAH, but we note that the commenter's suggested wording 
lacks explicit notice that the hospital does not provide on-site 
availability of a physician 24 hours per day, 7 days per week. Adoption 
of this disclosure requirement does not imply anything about the 
competency of care provided by other types of practitioners.
    Comment: One commenter stated that many long term care hospitals do 
not provide on-site, 24-hour physician coverage and asked whether such 
hospitals are expected to have such on-site physician services. The 
commenter stated that if this is CMS's interpretation, then this 
interpretation should be translated into the CoPs.
    Response: In this final rule with comment period, we are requiring 
hospitals and CAHs that do not have a physician on-site 24 hours per 
day, 7 days per week to disclose this information to patients, along 
with information about how they would handle an emergency when no 
physician is on-site. We are not making any changes to the hospital or 
CAH CoPs in this final rule with comment period. The current hospital 
and CAH CoPs do not include a requirement for a physician to be on site 
at all times.
    Comment: One commenter stated that CMS should clarify whether the 
disclosure would be required only on those days when a physician is not 
on-site, or at all times if there is a possibility that a physician 
might not be on-site. The commenter also stated that CMS should 
indicate whether it expects a separate, signed notice to be provided to 
patients or a general notice to be included with other registration/
admission documents outlining basic provisions for unexpected emergency 
care.
    Response: This final rule with comment period requires any hospital 
or CAH that does not provide for a physician to be on-site 24 hours per 
day, 7 days per week to disclose this to patients, regardless of 
whether or not it happens to have 24-hour on-site coverage at the 
beginning of the patient's hospital or CAH inpatient stay or outpatient 
visit. A hospital or CAH that is required under this final rule with 
comment period to make a physician-availability disclosure must do so 
via a written notice provided to each patient. The required notice must 
indicate that a physician is not on-site 24 hours per day, 7 days per 
week, and how the hospital or CAH handles medical emergencies that 
arise when a physician is not on-site. This final rule with comment 
period does not require that the hospital have the patient sign the 
notice.
    Comment: Most of the commenters stated that they supported 
strengthening requirements concerning emergency services capabilities 
only for physician-owned specialty hospitals. The commenters stated 
that applying additional requirements for ``full-service community 
hospitals'' is unnecessary and costly, but that applying them to 
physician-owned facilities could be used to assure that such hospitals, 
in the absence of being part of the broader care network, meet minimum 
standards for patient safety.
    Another commenter also stated that any additional measures should 
be applied only to physician-owned facilities and not to ``full-service 
community hospitals.'' This commenter also stated that State and 
Federal rules for CAHs already delineate in detail the emergency 
equipment that must be provided on site, mechanisms to contact on-call 
practitioners, timeframes within which these practitioners must be 
available, and written agreements and protocols for transferring 
patients for further treatment when indicated.
    In contrast, several other commenters stated that, in the interest 
of patient safety, they would support a requirement that standardized 
the type and training of clinical personnel available in any Medicare-
certified hospital. These commenters also stated that they endorse 
setting minimum requirements for equipment.
    Another commenter stated that the condition of participation for 
emergency services in both hospitals and CAHs should be strengthened, 
stating that a hospital should be capable of handling any situation 
that can reasonably be expected to occur. This commenter also stated 
that, to develop the precise regulatory provisions in the revised CoPs, 
CMS should convene an expert panel or, at a minimum, consult with the 
State agencies and recognized national accrediting bodies, as required 
by section 1863 of the Act.
    Finally, one commenter, while stating support for CMS setting 
minimum emergency service standards, also stated concern that such 
standards might conflict with, duplicate, or exceed current State 
requirements. The commenter stated CMS should coordinate development of 
minimum emergency medical response standards with interested 
professional organizations as well as State authorities overseeing 
medical emergency response.
    Response: We disagree with those commenters who supported expanded 
regulatory requirements for emergency services capabilities only for 
physician-owned facilities, because Medicare hospital health and safety 
standards apply to all participating hospitals, regardless of their 
type of ownership. The same is true for the Medicare CAH health and 
safety standards. We are not aware of any evidence to support the view 
that patient safety concerns arise only in physician-owned facilities, 
and that what the commenters call ``full-service community hospitals'' 
always assure that care is provided to patients in the right time and 
setting, due to these hospitals' participation in a community network 
of care. Our oversight experience suggests that patient safety problems 
can occur in hospitals with any type of ownership structure, or any 
type of service mix, whether general or specialized. For this reason, 
any changes to the hospital CoPs that we might propose would apply to 
all hospitals, and likewise any changes to the CAH CoPs that we might 
propose would apply to all CAHs.
    We also note the support of several commenters for a requirement 
that would standardize the type and training of clinical personnel, as 
well as minimum requirements for equipment

[[Page 47391]]

that must be available in any Medicare-certified hospital. With respect 
to whether strengthening the minimum Medicare requirements related to 
emergency services would raise issues of conflict with or exceeding 
State requirements, this potential situation is not unique to emergency 
services standards. Medicare health and safety standards, unless the 
regulations specifically state to the contrary, preempt conflicting 
State requirements. We will consider the commenters' views, including 
the suggestions about consultation, in undertaking any future 
rulemaking to strengthen emergency services minimum requirements.
    We agree with the commenter who pointed out that the existing 
emergency services requirements for CAHs are detailed. For example, our 
current regulations at 42 CFR 485.618(a) require CAHs to make emergency 
services available on a 24-hour per day basis. Section 485.618(b) 
establishes the standard regarding availability of equipment, supplies, 
and medication used in treating emergency cases. Our regulations at 
Sec.  485.618(d) are specific as to the required CAH emergency services 
clinical personnel, including the types of personnel, as well as the 
mode and timeframe for their availability. These regulatory standards 
are more detailed than those found in the comparable hospital emergency 
services CoP (42 CFR 482.55), or in the applicable hospital standard at 
42 CFR 482.12(f)(2) for hospitals that do not have emergency 
departments. Because hospitals tend to be larger health care facilities 
than CAHs, it might be reasonable to provide a comparable degree of 
specificity, appropriate to the hospital setting, in the hospital CoPs. 
We will consider the commenters' views in undertaking any future 
rulemaking on this issue.
    Comment: One commenter stated that, if CMS chooses to expand the 
existing regulatory provisions for clinical personnel that must be 
present at all times, CMS should use broad terminology. The commenter 
provided the following examples: ``qualified medical personnel,'' or 
``practitioners with appropriate privileges,'' or ``licensed 
practitioners,'' including the phrase ``with/and physician supervision 
to the extent required by state law.'' The commenter also stated CMS 
should drop its current usage of the term ``licensed independent 
practitioner'' in its regulations, stating that this causes ``endless 
headaches'' for hospitals that wish to utilize physician assistants.
    Response: We note that the terminology suggested by the commenter 
is very broad and would not significantly expand upon existing 
requirements. We will consider these comments in undertaking any future 
rulemaking on this issue.
    Comment: Two commenters specifically addressed our request for 
comments on whether we should require hospitals with emergency 
departments to provide these emergency services 24 hours per day, 7 
days per week. They stated that such a requirement would best come from 
the State or EMS district in which the hospital is located, because 
these authorities would be in the best position to judge the need for 
emergency care.
    Response: CAHs are currently required, under the provisions at 42 
CFR 485.618(a), to make emergency services available on a 24 hours per 
day basis. Because hospitals with emergency departments tend to be 
larger health care facilities than CAHs, it might be reasonable to 
require hospital emergency departments to also be available to the 
public on a 24 hour per day basis. We will consider these comments in 
any future rulemaking on this issue.
    Comment: Two commenters addressed the issue of locating the 
physician-availability disclosure requirement in the provider agreement 
rules rather than in the CoPs. One commenter stated it would be more 
appropriate to include the requirement in the provider agreement rules. 
The other commenter stated that it would be easier to ensure compliance 
if CMS implemented the physician-availability disclosure requirement 
through the CoPs rather than the provider agreement regulations. This 
commenter further stated that, unlike the CoPs referenced regularly, 
the provider agreement rules are only referenced when a health care 
facility initially enrolls [in Medicare], with no subsequent review of 
compliance. The commenter also stated that placement of the requirement 
in the CoPs would facilitate the commenter's consultation with Medicare 
requirements when developing its own practices and policies.
    Response: We agree that the physician-availability disclosure 
requirement should be included in the provider agreement regulations. 
We do not agree that the provider agreement regulations are referenced 
only when a facility initially enrolls in Medicare. Each participating 
provider must comply with all applicable provisions of the provider 
agreement regulations found in 42 CFR Part 489, and CMS may terminate 
its provider agreement if the provider is not in substantial compliance 
with these requirements. A provider's compliance with applicable 
provider agreement regulations is reviewed through a variety of means, 
including on-site investigation of complaints. An example of this mode 
of compliance review is our enforcement of the special responsibilities 
of Medicare hospitals in emergency cases, commonly known as EMTALA 
(EMTALA requirements are addressed in Sec.  489.24, with certain 
related provisions found in Sec.  489.20). Therefore, we do not agree 
that the regulatory language we proposed concerning disclosure of 
physician on-site availability should be moved to the CoPs in order to 
permit compliance reviews. We do not consider the ease of referencing 
the regulations containing the CoPs, versus that of referencing those 
containing the provider agreement regulations, a compelling reason to 
move the regulatory language from the provider agreement regulations to 
the CoPs.
    After consideration of the public comments we received, we are 
adopting as final, with one technical correction, the addition of a 
provision at Sec.  489.20(v) to require that hospitals and CAHs furnish 
all patients written notice at the beginning of their hospital stay or 
outpatient service if a doctor of medicine or a doctor of osteopathy is 
not present in the hospital 24 hours per day, 7 days per week, and to 
describe how the hospital or CAH will meet the medical needs of any 
patient who develops an emergency medical condition at a time when no 
physician is present in the hospital. We are correcting a typographical 
error that appeared in the proposed rule. The proposed regulatory text 
stated that the required notice must indicate ``* * *how the hospital 
will meet the medical needs of any inpatient who develops an emergency 
medical condition* * *'' We intended to say ``patient'' instead of 
``inpatient,'' as is clear from the references to outpatient visits in 
two other places within the regulatory text we originally proposed.

H. Rural Community Hospital Demonstration Program

    In accordance with the requirements of section 410A(a) of Pub. L. 
108-173, the Secretary has established a 5-year demonstration program 
(beginning with selected hospitals' first cost reporting period 
beginning on or after October 1, 2004) to test the feasibility and 
advisability of establishing ``rural community hospitals'' for Medicare 
payment purposes for covered inpatient hospital services furnished to 
Medicare beneficiaries. A rural community hospital, as defined in 
section 410A(f)(1), is a hospital that--

[[Page 47392]]

    <bullet> Is located in a rural area (as defined in section 
1886(d)(2)(D) of the Act) or is treated as being located in a rural 
area under section 1886(d)(8)(E) of the Act;
    <bullet> Has fewer than 51 beds (excluding beds in a distinct part 
psychiatric or rehabilitation unit) as reported in its most recent cost 
report;
    <bullet> Provides 24-hour emergency care services; and
    <bullet> Is not designated or eligible for designation as a CAH.
    As we indicated in the FY 2005 IPPS final rule (69 FR 49078), in 
accordance with sections 410A(a)(2) and (a)(4) of Pub. L. 108-173 and 
using 2002 data from the U.S. Census Bureau, we identified 10 States 
with the lowest population density from which to select hospitals: 
Alaska, Idaho, Montana, Nebraska, Nevada, New Mexico, North Dakota, 
South Dakota, Utah, and Wyoming (Source: U.S. Census Bureau Statistical 
Abstract of the United States: 2003). Nine rural community hospitals 
located within these States are currently participating in the 
demonstration program for FY 2008. (Of the 13 hospitals that 
participated in the first 2 years of the demonstration program, 4 
hospitals located in Nebraska have withdrawn from the program; they 
have become CAHs.)
    Under the demonstration program, participating hospitals are paid 
the reasonable costs of providing covered inpatient hospital services 
(other than services furnished by a psychiatric or rehabilitation unit 
of a hospital that is a distinct part), applicable for discharges 
occurring in the first cost reporting period beginning on or after the 
October 1, 2004 implementation date of the demonstration program. 
Payments to the participating hospitals will be the lesser amount of 
the reasonable cost or a target amount in subsequent cost reporting 
periods. The target amount in the second cost reporting period is 
defined as the reasonable costs of providing covered inpatient hospital 
services in the first cost reporting period, increased by the inpatient 
prospective payment update factor (as defined in section 1886(b)(3)(B) 
of the Act) for that particular cost reporting period. The target 
amount in subsequent cost reporting periods is defined as the preceding 
cost reporting period's target amount, increased by the inpatient 
prospective payment update factor (as defined in section 1886(b)(3)(B) 
of the Act) for that particular cost reporting period.
    Covered inpatient hospital services are inpatient hospital services 
(defined in section 1861(b) of the Act), and include extended care 
services furnished under an agreement under section 1883 of the Act.
    Section 410A of Pub. L. 108-173 requires that, ``in conducting the 
demonstration program under this section, the Secretary shall ensure 
that the aggregate payments made by the Secretary do not exceed the 
amount which the Secretary would have paid if the demonstration program 
under this section was not implemented.'' Generally, when CMS 
implements a demonstration program on a budget neutral basis, the 
demonstration program is budget neutral in its own terms; in other 
words, the aggregate payments to the participating providers do not 
exceed the amount that would be paid to those same providers in the 
absence of the demonstration program. This form of budget neutrality is 
viable when, by changing payments or aligning incentives to improve 
overall efficiency, or both, a demonstration program may reduce the use 
of some services or eliminate the need for others, resulting in reduced 
expenditures for the demonstration program's participants. These 
reduced expenditures offset increased payments elsewhere under the 
demonstration program, thus ensuring that the demonstration program as 
a whole is budget neutral or yields savings. However, the small scale 
of this demonstration program, in conjunction with the payment 
methodology, makes it extremely unlikely that this demonstration 
program could be viable under the usual form of budget neutrality. 
Specifically, cost-based payments to the nine participating small rural 
hospitals are likely to increase Medicare outlays without producing any 
offsetting reduction in Medicare expenditures elsewhere. Therefore, a 
rural community hospital's participation in this demonstration program 
is unlikely to yield benefits to the participant if budget neutrality 
were to be implemented by reducing other payments for these providers.
    In order to achieve budget neutrality for this demonstration 
program for FY 2008, we are adjusting the national inpatient PPS rates 
by an amount sufficient to account for the added costs of this 
demonstration program. We are applying budget neutrality across the 
payment system as a whole rather than merely across the participants in 
this demonstration program. As we discussed in the FY 2005, FY 2006, 
and FY 2007 IPPS final rules (69 FR 49183; 70 FR 47462; and 71 FR 
48100), we believe that the language of the statutory budget neutrality 
requirements permits the agency to implement the budget neutrality 
provision in this manner. For FY 2008, using cost report data for FY 
2003, adjusted to account for the increased estimated costs for the 
remaining nine participating hospitals, we estimate that the adjusted 
amount will be $9,681,893. This estimated adjusted amount reflects the 
estimated difference between the participating hospitals' costs and the 
IPPS payment based on data from the hospitals' cost reports. We discuss 
the payment rate adjustment that is required to ensure the budget 
neutrality of the demonstration program for FY 2008 in section II.A.4. 
of the Addendum to this final rule with comment period.
    We did not receive any public comments on the provisions of the 
demonstration project discussed in the proposed rule.

V. Changes to the IPPS for Capital-Related Costs

    (If you choose to comment on issues in this section, please include 
the caption ``Capital IPPS Payment Adjustments'' at the beginning of 
your comment.)

A. Background

    Section 1886(g) of the Act requires the Secretary to pay for the 
capital-related costs of inpatient acute hospital services ``in 
accordance with a prospective payment system established by the 
Secretary.'' Under the statute, the Secretary has broad authority in 
establishing and implementing the IPPS for acute care hospital 
inpatient capital-related costs. We initially implemented the IPPS for 
capital-related costs in the August 30, 1991 IPPS final rule (56 FR 
43358), in which we established a 10-year transition period to change 
the payment methodology for Medicare hospital inpatient capital-related 
costs from a reasonable cost-based methodology to a prospective 
methodology (based fully on the Federal rate).
    Federal fiscal year (FY) 2001 was the last year of the 10-year 
transition period established to phase in the IPPS for hospital 
inpatient capital-related costs. For cost reporting periods beginning 
in FY 2002, capital IPPS payments are based solely on the Federal rate 
for most acute care hospitals (other than certain new hospitals and 
hospitals receiving certain exception payments). The basic methodology 
for determining capital prospective payments using the Federal rate is 
set forth in Sec.  412.312. For the purpose of calculating payments for 
each discharge, the standard Federal rate is adjusted as follows:

(Standard Federal Rate) x (DRG Weight) x (Geographic Adjustment Factor 
(GAF)) x (Large Urban Add-on, if

[[Page 47393]]

applicable) x (COLA for hospitals located in Alaska and Hawaii) x (1 + 
Capital DSH Adjustment Factor + Capital IME Adjustment Factor, if 
applicable).

    Hospitals also may receive outlier payments for those cases that 
qualify under the threshold established for each fiscal year as 
specified in Sec.  412.312(c) of the regulations.
    The regulations at Sec.  412.348(f) provide that a hospital may 
request an additional payment if the hospital incurs unanticipated 
capital expenditures in excess of $5 million due to extraordinary 
circumstances beyond the hospital's control. This policy was originally 
established for hospitals during the 10-year transition period, but as 
we discussed in the August 1, 2002 IPPS final rule (67 FR 50102), we 
revised the regulations at Sec.  412.312 to specify that payments for 
extraordinary circumstances are also made for cost reporting periods 
after the transition period (that is, cost reporting periods beginning 
on or after October 1, 2001). Additional information on the exception 
payment for extraordinary circumstances in Sec.  412.348(f) can be 
found in the FY 2005 IPPS final rule (69 FR 49185 and 49186).
    During the transition period, under Sec. Sec.  412.348(b) through 
(e), eligible hospitals could receive regular exception payments. These 
exception payments guaranteed a hospital a minimum payment percentage 
of its Medicare allowable capital related costs depending on the class 
of the hospital (Sec.  412.348(c)), but were available only during the 
10-year transition period. After the end of the transition period, 
eligible hospitals can no longer receive this exception payment. 
However, even after the transition period, eligible hospitals receive 
additional payments under the special exceptions provisions at Sec.  
412.348(g), which guarantees all eligible hospitals a minimum payment 
of 70 percent of its Medicare allowable capital-related costs provided 
that special exceptions payments do not exceed 10 percent of total 
capital IPPS payments. Special exceptions payments may be made only for 
the 10 years from the cost reporting year in which the hospital 
completes its qualifying project, and the hospital must have completed 
the project no later than the hospital's cost reporting period 
beginning before October 1, 2001. Thus, an eligible hospital may 
receive special exceptions payments for up to 10 years beyond the end 
of the capital IPPS transition period. Hospitals eligible for special 
exceptions payments are required to submit documentation to the 
intermediary indicating the completion date of their project. (For more 
detailed information regarding the special exceptions policy under 
Sec.  412.348(g), refer to the August 1, 2001 IPPS final rule (66 FR 
39911 through 39914) and the August 1, 2002 IPPS final rule (67 FR 
50102).)
    Under the IPPS for capital-related costs, Sec.  412.300(b) of the 
regulations defines a new hospital as a hospital that has operated 
(under current or previous ownership) for less than 2 years. (For more 
detailed information, we refer readers to the August 30, 1991 final 
rule (56 FR 43418).) During the 10-year transition period, a new 
hospital was exempt from the capital IPPS for its first 2 years of 
operation and was paid 85 percent of its reasonable costs during that 
period. Originally, this provision was effective only through the 
transition period and, therefore, ended with cost reporting periods 
beginning in FY 2002. Because we believe that special protection to new 
hospitals is also appropriate even after the transition period, as 
discussed in the August 1, 2002 IPPS final rule (67 FR 50101), we 
revised the regulations at Sec.  412.304(c)(2) to provide that, for 
cost reporting periods beginning on or after October 1, 2002, a new 
hospital (defined under Sec.  412.300(b)) is paid 85 percent of its 
Medicare allowable capital related costs through its first 2 years of 
operation, unless the new hospital elects to receive fully prospective 
payment based on 100 percent of the Federal rate. (We refer readers to 
the August 1, 2001 IPPS final rule (66 FR 39910) for a detailed 
discussion of the statutory basis for the system, the development and 
evolution of the system, the methodology used to determine capital 
related payments to hospitals both during and after the transition 
period, and the policy for providing exception payments.)
    Section 412.374 provides for the use of a blended payment amount 
for prospective payments for capital-related costs to hospitals located 
in Puerto Rico. Accordingly, under the capital IPPS, we compute a 
separate payment rate specific to Puerto Rico hospitals using the same 
methodology used to compute the national Federal rate for capital-
related costs. In general, hospitals located in Puerto Rico are paid a 
blend of the applicable capital IPPS Puerto Rico rate and the 
applicable capital IPPS Federal rate.
    Prior to FY 1998, hospitals in Puerto Rico were paid a blended 
capital IPPS rate that consisted of 75 percent of the capital IPPS 
Puerto Rico specific rate and 25 percent of the capital IPPS Federal 
rate. However, effective October 1, 1997 (FY 1998), in conjunction with 
the change to the operating IPPS blend percentage for hospitals located 
in Puerto Rico required by section 4406 of Pub. L. 105-33, we revised 
the methodology for computing capital IPPS payments to hospitals in 
Puerto Rico to be based on a blend of 50 percent of the capital IPPS 
Puerto Rico rate and 50 percent of the capital IPPS Federal rate. 
Similarly, in conjunction with the change in operating IPPS payments to 
hospitals located in Puerto Rico for FY 2005 required by section 504 of 
Pub. L. 108-173, we again revised the methodology for computing capital 
IPPS payments to hospitals located in Puerto Rico to be based on a 
blend of 25 percent of the capital IPPS Puerto Rico rate and 75 percent 
of the capital IPPS Federal rate effective for discharges occurring on 
or after October 1, 2004.

B. Policy Change

    As we have noted above, the Secretary has broad authority under the 
statute in establishing and implementing the IPPS for hospital 
inpatient capital-related costs. We initially exercised that authority 
in the August 30, 1991 IPPS final rule (56 FR 43358). Among other 
provisions of that rule, we established the 10-year transition period 
to change the payment methodology for Medicare hospital inpatient 
capital-related costs from a reasonable cost-based methodology to a 
prospective methodology (based fully on the Federal rate). The purpose 
of that lengthy transition was to allow hospitals sufficient time to 
adjust to payment under a fully prospective system based on a uniform 
national rate. In that rule, we also established the initial standard 
Federal payment rate for capital related costs, as well as the 
mechanism for updating that rate in subsequent years. For FY 1992, we 
computed the standard Federal payment rate for capital-related costs 
under the IPPS by updating the FY 1989 Medicare inpatient capital cost 
per case by an actuarial estimate of the increase in Medicare inpatient 
capital costs per case. Each year after FY 1992, we update the capital 
standard Federal rate, as provided at Sec.  412.308(c)(1), to account 
for capital input price increases and other factors. The regulations at 
Sec.  412.308(c)(2) provide that the capital Federal rate is adjusted 
annually by a factor equal to the estimated proportion of outlier 
payments under the capital Federal rate to total capital payments under 
the capital Federal rate. In addition, Sec.  412.308(c)(3) requires 
that the capital Federal rate be reduced by an adjustment factor equal 
to the estimated proportion of payments for (regular and special) 
exceptions under Sec.  412.348. Section 412.308(c)(4)(ii) requires that

[[Page 47394]]

the capital standard Federal rate be adjusted so that the effects of 
the annual DRG reclassification and the recalibration of DRG weights, 
and changes in the geographic adjustment factor are budget neutral.
    In the FY 2008 IPPS proposed rule, we noted that since the 
implementation of the IPPS for hospital inpatient capital-related 
costs, we have carefully monitored the adequacy of the standard Federal 
payment rate for capital-related costs and the updates provided under 
the existing regulations. On several occasions, the standard Federal 
payment rate has been adjusted. Section 1886(g)(1)(A) of the Act 
required a 7.4 percent reduction to the capital rate for discharges 
occurring after September 30, 1993. (We implemented that reduction to 
the rate in Sec.  412.308(b)(2) of our regulations, effective in FY 
1994.) Section 412.308(b)(3) of the regulations describes the 0.28 
percent reduction to the capital rate made in FY 1996 as a result of 
the revised policy of paying for transfers. In FY 1998, we implemented 
section 4402 of Pub. L. 105-33, which required that, for discharges 
occurring on or after October 1, 1997, and before October 1, 2002, the 
unadjusted capital standard Federal rate be reduced by 17.78 percent 
(above the previous statutory reduction of 7.4 percent). (As a result 
of that reduction, the FY 1998 standard Federal payment rate for 
capital-related costs was $371.51, compared to $438.92 in FY 1997.) As 
we discussed in the FY 2003 IPPS final rule (67 FR 50102) and 
implemented in Sec.  412.308(b)(6), a small part of that reduction was 
restored effective October 1, 2002.
    We also noted that, in general, under a PPS, standard payment rates 
should reflect the costs that an average, efficient provider would bear 
to provide the services required for quality patient care. Payment rate 
updates should also account for the changes necessary to continue 
providing such services. Updates should reflect, for example, the 
increased costs that are necessary to provide for the introduction of 
new technology that improves patient care. Updates should also take 
into account the productivity gains that, over time, allow providers to 
realize the same, or even improved, quality outcomes with reduced 
inputs and lower costs. Hospital margins, the difference between the 
costs of actually providing services and the payments received under a 
particular system, thus provide some evidence concerning whether 
payment rates have been established and updated at an appropriate level 
over time for efficient providers to provide necessary services. All 
other factors being equal, sustained substantial positive margins may 
suggest that payment rates and updates have exceeded what is required 
to provide those services. It is to be expected, under a PPS, that 
highly efficient providers might regularly realize positive margins, 
while less efficient providers might regularly realize negative 
margins. However, a PPS that is correctly calibrated should not 
necessarily experience sustained periods in which providers generally 
realize substantial positive Medicare margins.
    Under the capital IPPS in particular, it seems especially 
appropriate that there should not be sustained significant positive 
margins across the system as a whole. Prior to the implementation of 
the capital IPPS, Congress mandated that the Medicare program pay only 
85 percent of hospitals' inpatient Medicare capital costs. During the 
first 5 years of the capital IPPS, Congress also mandated a budget 
neutrality adjustment, under which the standard Federal capital rate 
was set each year so that payments under the system as a whole equaled 
90 percent of estimated hospitals' inpatient Medicare capital costs for 
the year. Finally, as we discussed in the proposed rule, Congress has 
twice adjusted the standard Federal capital rate (a 7.4 percent 
reduction beginning in FY 1994, followed by a 17.78 percent reduction 
beginning in FY 1998). On the second occasion in particular, the 
specific congressional mandate was ``to apply the budget neutrality 
factor used to determine the Federal capital payment rate in effect on 
September 30, 1995* * * to the unadjusted standard Federal capital 
payment rate'' for FY 1998 and beyond. (The designated budget 
neutrality factor constituted a 17.78 percent reduction.) This 
statutory language indicates that Congress considered the payment 
levels in effect during FYs 1992 through 1995, established under the 
budget neutrality provision to pay 90 percent of hospitals' inpatient 
Medicare capital costs in the aggregate, appropriate for the capital 
IPPS. The statutory history of the capital IPPS thus suggests that the 
system in the aggregate should not provide for continuous, large 
positive margins.
    In preparation for the proposed rule, we analyzed the adequacy of 
the existing capital IPPS rates by conducting a comprehensive review of 
hospital experience under the IPPS for hospital inpatient capital-
related costs, with particular attention to the relationship between 
acute care hospital capital Medicare costs and payments under the 
capital IPPS. Specifically, we examined the relationship between the 
Medicare inpatient capital costs of hospitals that are paid under the 
IPPS for hospital inpatient capital-related costs and their payments 
under that system over a number of years. We derived both cost and 
Medicare payment data from the Medicare cost report. Specifically, cost 
data were derived from Worksheet D, Part I, columns 10 and 12 and Part 
II, columns 6 and 8, and Medicare payment data from Worksheet E, Part 
A, Lines 9 and 10. We began our analysis with FY 1996, the year in 
which the statutory budget neutrality provision expired. (As we have 
discussed, for FYs 1992 through 1995, section 1886(g)(1)(A) of the Act 
required that the capital Federal rate also be adjusted by a budget 
neutrality factor so that aggregate payments for inpatient hospital 
capital costs were projected to equal 90 percent of the payments that 
would have been made for capital-related costs on a reasonable cost 
basis during the fiscal year. As discussed in section III. of the 
Addendum to the proposed rule and this final rule with comment period, 
we employed an actuarial capital cost model (described in Appendix B of 
the FY 2002 IPPS final rule (66 FR 40099)) to estimate the aggregate 
payments that would have been made on the basis of reasonable cost in 
order to determine the required budget neutrality adjustment. As a 
result of the expiration of the budget neutrality provision, the 
standard Federal payment rate for capital-related costs increased to 
$461.96 in FY 1996 from $376.83 in FY 1995.) Our analysis in the 
proposed rule extended through FY 2004, the most recent year for which 
we had relatively complete cost report information. We examined data 
across all hospitals subject to the capital IPPS and across the 
categories of hospitals (for example, urban and rural, and teaching and 
nonteaching) that we normally employ in conducting impact analyses. 
Specifically, we looked at the difference between aggregate hospital 
payments from the capital IPPS and hospitals' aggregate Medicare 
inpatient capital costs. We determined the inpatient hospital Medicare 
capital margins for each year of the period from FY 1996 through FY 
2004. (A margin is calculated as the difference between payments and 
costs, divided by payments.) We similarly calculated the aggregate 
margins for the period FY 1996 through FY 2004 (the aggregate 
difference between payments and costs over the period, divided by total 
payments over the period). We also calculated aggregate margins for the

[[Page 47395]]

period FY 1998 through FY 2004 (excluding FY 1996 and 1997). As a 
result of the expiration of the statutory budget neutrality provision, 
the capital standard Federal rate increased to $461.96 in FY 1996 from 
$376.83 in FY 1995. The capital standard Federal rate was $438.92 in FY 
1997, before it was reduced to $371.51 in FY 1998 under section 4402 of 
Pub. L. 105-33, which required that the unadjusted capital standard 
Federal rate be reduced by 17.78 percent. The capital standard Federal 
rates for FYs 1996 and 1997 were thus substantially higher than the 
rates for the periods immediately preceding those years, and in the 
subsequent years (FY 1998 and beyond). The margins for those years are 
correspondingly higher than the margins for the other years in the 
period, and thus it could be argued that the margins for FYs 1996 and 
1997 are unrepresentative. The table below summarizes the findings of 
this analysis for the proposed rule.

                                                       Hospital Inpatient Medicare Capital Margins
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                              Aggregate
                                                                                                                                              1998-2004
                                                         1996    1997    1998    1999    2000    2001    2002    2003    2004    Aggregate    (excluding
                                                                                                                                 1996-2004     1996 and
                                                                                                                                                1997)
--------------------------------------------------------------------------------------------------------------------------------------------------------
U.S...................................................    17.5    13.4     7.0     6.8     7.3     7.9     8.7     7.7     5.1          9.0          7.2
    URBAN.............................................    17.6    13.8     7.8     7.4     8.3     8.9    10.3     9.1     6.3          9.9          8.3
    RURAL.............................................    17.2    11.1     2.0     2.7     1.3     1.5    -1.7    -1.2    -2.9          3.4          0.3
No DSH Payments.......................................    16.2    11.8     4.4     4.4     5.6     5.6     5.0     4.8    -0.9          6.9          4.2
Has DSH Payments......................................    18.3    14.4     8.5     8.1     8.2     8.7     9.9     8.6     6.7          9.9          8.4
    $1-$249,999.......................................    14.5    12.9    -0.4     3.1     1.6     4.2     2.5     0.6    -3.5          3.3          1.8
    $250,000-$999,999.................................    15.5     9.3     2.2     1.5     3.0     2.5    -1.2     0.2    -3.8          2.9          0.5
    $1,000,000-$2,999,999.............................    16.8    12.8     8.5     9.2     8.6     7.2     9.0     4.6     3.0          8.7          7.1
    $3,000,000 or more................................    20.1    16.6    10.4     9.1     9.7    11.6    13.4    12.5    10.1         12.4         11.1
TEACHING..............................................    19.4    15.7     9.8     9.7    11.1    11.7    13.9    13.2    11.3         12.9         11.6
NON-TEACHING..........................................    15.3    10.5     3.3     2.9     2.2     2.8     1.6     0.2    -3.2          3.9          1.3
Census Division:
    New England (1)...................................    26.9    25.8    17.0    15.1    18.2    20.5    21.3    21.2    20.5         20.9         19.3
    Middle Atlantic (2)...............................    19.1    15.5    11.0    11.5    13.8    16.3    18.4    17.9    15.0         15.5         15.0
    South Atlantic (3)................................    17.9    13.9     5.8     3.9     5.9     5.2     6.3     7.5     4.9          7.9          5.7
    East North Central (4)............................    18.2    12.7     6.2     7.2     8.8     8.6     6.3     8.1     7.1          9.2          7.5
    East South Central (5)............................    14.8    11.1     3.3     4.1     3.4     2.9     3.0    -1.8    -4.2          3.9          1.4
    West North Central (6)............................    14.2     6.9     0.0    -0.4    -1.6     1.9     2.6     3.3     1.1          3.2          1.1
    West South Central (7)............................    13.3     8.3     3.4     3.1     0.6     0.1     1.4    -1.2    -4.2          2.5          0.3
    Mountain (8)......................................    17.3    14.8     8.4     7.6     7.4     6.4     3.2     3.1     0.7          7.2          4.9
    Pacific (9).......................................    20.5    16.1    12.4    11.3    11.5    12.8    15.5    12.8     9.2         13.5         12.2
    Code 99...........................................    24.1    26.1    14.9    16.7    20.0    20.9    20.6    25.2    22.3         21.4         20.3
Bed Size:
    < 100 beds........................................    17.7    13.0     4.7     3.5     2.8     2.5    -1.7    -1.3    -5.6          3.5          0.5
    100-249 beds......................................    15.1    10.6     3.5     4.5     4.7     6.0     6.1     4.5     1.1          6.2          4.4
    250-499 beds......................................    18.9    14.0     8.7     8.3    10.4    10.5    11.7    11.6    10.6         11.7         10.4
    500-999 beds......................................    19.7    17.5    11.1    10.3    10.7    10.4    12.5    10.3     6.8         12.0         10.2
    >= 1000 beds......................................     8.2    13.8     2.1     0.2    -6.6    -3.5     8.7     6.3     1.4          3.1         1.8
--------------------------------------------------------------------------------------------------------------------------------------------------------
Notes:
Based on Medicare Cost Report hospital data updated as of the 4th quarter of 2006.
Medicare payment is from Worksheet E, Part A, Lines 9 and 10.
Expenses are from Worksheet D, Part I, columns 10 and 12 and Part II, columns 6 and 8.
We apply the outlier trimming methodology developed by MedPAC.
Code 99 applies when census division information was not specified in the Medicare Cost Report hospital data.

    As the table showed, hospital inpatient Medicare capital margins 
have been very high across all hospitals during the period from FY 1996 
through FY 2004. The margin for the entire period was 9.0 percent (7.2 
percent, excluding FYs 1996 and 1997). For particular years, margins 
across all hospitals ranged from a high of 17.5 percent in FY 1996 to a 
low of 5.1 percent in FY 2004. While the margins fell after a high in 
FY 1996 of 17.5 to 6.8 percent in FY 1999, they rose again to 8.7 
percent in FY 2002 before declining to 5.1 percent in FY 2004.
    There were similar results among most types of hospitals and 
groupings of hospitals by geographic region. For example, teaching 
hospitals have realized margins of 12.9 percent (11.6 percent, 
excluding FYs 1996 and 1997) during the period from FY 1996 through FY 
2004, with a high margin of 19.4 percent in FY 1996 and a low margin of 
9.7 percent in FY 1999. Urban hospitals realized margins of 9.9 percent 
during the period from FY 1996 through FY 2004 (8.3 percent, excluding 
FYs 1996 and 1997). DSH hospitals realized margins of 9.9 percent over 
the period (8.4 percent, excluding FYs 1996 and 1997), while non-DSH 
had aggregate margins of 6.9 percent (4.2 percent, excluding FYs 1996 
and 1997).
    During the period from FY 1996 through FY 2004, every type of 
hospital and geographic grouping of hospitals has realized a positive 
aggregate margin from their capital IPPS payments. Of course, the 
aggregate capital margins for some types of hospitals have been lower 
than the margins for others. In particular, inpatient hospital Medicare 
capital margins for rural hospitals have lagged considerably behind the 
margins for urban hospitals. The aggregate margin for rural hospitals 
during the period from FY 1996 through FY 2004 was 3.4 percent (0.3 
percent, excluding FYs 1996 and 1997), compared to 9.9 percent for 
urban hospitals and 9.0 percent for all hospitals. Rural hospitals have 
even experienced negative margins during several years of the period (-
1.7 percent in FY 2002, -1.2 percent in FY 2003, and -2.9 percent in FY 
2004). Similarly, nonteaching hospitals have

[[Page 47396]]

experienced lower margins than teaching hospitals. Teaching hospitals 
have experienced an aggregate margin of 12.9 percent during the period 
from FY 1996 through FY 2004 (11.6 percent, excluding FYs 1996 and 
1997). However, nonteaching hospitals have experienced an aggregate 
margin of 3.9 percent during that period (1.3 percent, excluding FYs 
1996 and 1997).
    As we discussed in the proposed rule, there may be various factors 
reflected in these margins. For example, one factor in the lower 
margins experienced by rural hospitals may be the transition of many 
rural hospitals to CAHs that are paid outside the IPPS. The number of 
rural hospitals in our analysis fell from 2,243 in FY 1996 to 1,211 in 
FY 2004, as the inpatient Medicare capital margins realized by rural 
hospitals fell from 17.2 percent to -2.9 percent. This suggests that 
more rural hospitals with relatively higher inpatient Medicare capital 
margins have made the transition to CAH status. However, it remains to 
be seen whether this trend in inpatient Medicare capital margins will 
continue as the relative numbers of CAHs and rural hospitals subject to 
the IPPS stabilize. We believe that the low aggregate margin for 
nonteaching hospitals is largely a function of the effect of the low, 
and for some years even negative, margin of the rural hospitals, as 
discussed earlier.
    As we also discussed in the proposed rule, there could be a number 
of reasons for the relatively high margins that most IPPS hospitals 
have realized under the capital IPPS. One possibility is that the 
updates to the capital IPPS rates have been higher than the actual 
increases in Medicare inpatient capital costs that hospitals have 
experienced in recent years. As we discuss in section III. of the 
Addendum to this final rule with comment period, we update the capital 
standard Federal rate on the basis of an analytical framework that 
takes into account changes in a capital input price index (CIPI) and 
several other policy adjustment factors. Specifically, we have adjusted 
the projected CIPI rate-of-increase as appropriate each year for case-
mix index-related changes, for intensity, and for errors in previous 
CIPI forecasts. Under the framework that we have been using, we had 
proposed an update factor of 0.8 percent for FY 2008.
    The final update factor for FY 2008 is 0.9 percent, based on the 
best data available at this time. That update factor is derived from a 
projected 1.3 percent increase in the CIPI, a 0.0 percent adjustment 
for intensity, a 0.0 percent adjustment for case-mix, a -0.4 percent 
adjustment for the FY 2005 DRG reclassification and recalibration, and 
a forecast error correction of 0.0 percent. We discuss this update 
framework, and the computation of the policy adjustment factors, in 
section III. of the Addendum to this final rule with comment period.
    We continue to believe that the CIPI is the most appropriate input 
price index for capital costs to measure capital price changes in a 
given year. We also believe that the update framework successfully 
captures several factors that should be taken into account in 
determining appropriate updates for hospitals subject to the capital 
IPPS. However, there may be factors affecting the rate-of-increase in 
capital costs that are not yet captured in our analytical framework. 
For example, hospitals may be experiencing productivity gains in their 
use of capital equipment. As productivity increases, hospitals would be 
able to reduce the number of inputs required to produce a unit of 
service. MedPAC has taken the position that the payment ``rate for 
health care providers should be set so that the Federal Government 
benefits from providers' productivity gains, just as private purchasers 
of goods in competitive markets benefit from the productivity gains of 
their suppliers.'' MedPAC has, therefore, included a productivity 
improvement target in its framework for updating Medicare hospital 
payments on the grounds that ``as a prudent purchaser, Medicare should 
also require some productivity gains each year from its providers.'' 
(MedPAC, Report to Congress, March 2006, p. 66) While we have not as 
yet included a specific productivity factor, such as MedPAC's 
productivity improvement target, in our analytical frameworks for 
updating the IPPS payment rates, we will continue to study the 
appropriateness of adopting such a measure.
    As we discussed in the proposed rule, another possible reason for 
the relatively high margins of most capital IPPS hospitals may be that 
the payment adjustments provided under the system are too high, or 
perhaps even unnecessary. Specifically, the adjustments for teaching 
hospitals, disproportionate share hospitals, and large urban hospitals 
appear to be contributing to excessive payment levels for these classes 
of hospitals. Since the inception of the capital IPPS in FY 1992, the 
system has provided adjustments for teaching hospitals (the IME 
adjustment factor, under Sec.  412.322 of the regulations), 
disproportionate share hospitals (the DSH adjustment factor, under 
Sec.  412.320), and large urban hospitals (the large urban location 
adjustment factor, under Sec.  412.316(b)). The classes of hospitals 
eligible for these adjustments have been realizing much higher margins 
than other hospitals under the system. Specifically, teaching hospitals 
(11.6 percent for FYs 1998 through 2004), urban hospitals (8.3 
percent), and disproportionate share hospitals (8.4 percent) have 
significant positive margins. Other classes of hospitals have 
experienced much lower margins, especially rural hospitals (0.3 percent 
for FYs 1998 through 2004) and nonteaching hospitals (1.3 percent). The 
three groups of hospitals that have been realizing especially high 
margins under the capital IPPS are, therefore, classes of hospitals 
that are eligible to receive one or more specific payment adjustments 
under the system. We believe that the evidence indicates that these 
adjustments have been contributing to the significantly large positive 
margins experienced by the classes of hospitals eligible for these 
adjustments.
    In the proposed rule, we therefore determined that the data on 
inpatient hospital Medicare capital margins, as discussed above, 
provided sufficient evidence that some adjustment of the updates under 
the capital IPPS was warranted at that time. In light of the 
significant disparities in the margin performances of different classes 
of hospitals, we did not believe at that time that an adjustment to the 
updates for FYs 2008 and 2009 should apply equally to all hospitals 
that are paid under the capital IPPS. In particular, we believed that 
an adjustment to the updates should take into account the much lower 
margins of rural hospitals (0.3 percent for the period from FY 1998 
through FY 2004) compared to urban hospitals (8.3 percent during that 
period). We also believed that any initial adjustment to the rate 
should be relatively modest. One reason was that any adjustment should 
avoid unwarranted disruption to hospital finances: Because of the 
nature of capital spending, long periods of time can be necessary for 
hospitals to adjust adequately to significant changes in payment. 
Therefore, in the FY 2008 IPPS proposed rule (72 FR 24822), for FYs 
2008 and 2009 we proposed that the update to the capital standard 
Federal rate for urban hospitals would be 0.0 percent, in place of the 
0.8 percent update that would have otherwise been provided in FY 2008 
under the update framework that we have been employing. (As discussed 
above, the final update to the capital standard Federal rate under the 
capital update framework is 0.9 percent.) However, in light of the 
margin analysis, we also proposed to give rural hospitals the full 0.8 
percent update determined

[[Page 47397]]

by the update framework in FY 2008. We anticipated that we would 
provide the full update only to rural hospitals in FY 2009 as well, 
once we had determined what the update would be under the update 
framework. We proposed to revise Sec.  412.308(c)(1) of the regulations 
accordingly. For purposes of the update in FYs 2008 and 2009, we 
proposed that an urban hospital is any hospital located in an area that 
meets the definitions under Sec.  412.64(b)(1)(ii)(A) or (b)(1)(ii)(B), 
or Sec.  412.64(b)(3). A rural hospital is any hospital that does not 
meet those definitions, or that is reclassified as rural under Sec.  
412.103. For subsequent years, we stated that we would continue to 
analyze the data concerning the adequacy of payments under the capital 
IPPS, and that we may propose additional adjustments, positive or 
negative, as they were warranted. We also stated that we would continue 
to study our update framework and to consider whether adoption of 
additional or revised adjustments to account for other factors 
affecting capital cost changes may be warranted.
    In addition, we also proposed to eliminate, for FYs 2008 and 
beyond, one of the payment adjustments that has been provided under the 
capital IPPS. Specifically, we proposed to discontinue the 3.0 percent 
additional payment that has been provided to hospitals located in large 
urban areas. In proposing to eliminate this adjustment, we cited the 
consistent and significant positive margin of hospitals located in 
urban areas as strong evidence that it was not necessary to continue 
this adjustment. Therefore, we proposed to amend Sec.  412.316(b) of 
the regulations to provide that, effective for discharges on or after 
October 1, 2007, there will no longer be any additional payment for 
hospitals located in large urban areas, as currently provided under 
that section. When the payment adjustments were instituted at the 
inception of the program, the initial standard Federal payment rate was 
adjusted in a budget-neutral fashion to account for the expenditures 
that would be required by these adjustments. However, in light of the 
strong overall positive margins across the system, we proposed not to 
increase the standard capital rate to account for expenditures 
otherwise payable due to this adjustment (approximately $147 million). 
Rather, in light of the excessive capital IPPS payments over the period 
of FYs 1996 through 2004, we believed that it was appropriate for the 
program to realize savings from this policy decision.
    While we formally proposed an update of 0.0 percent for urban 
hospitals, an update of 0.8 percent for rural hospitals in FY 2008, and 
elimination of the large urban add-on payments, we also solicited 
public comment on additional adjustments to the capital payment 
structure. As we noted in the proposed rule, the margin analysis 
indicated that several classes of hospitals have experienced 
continuous, significant positive margins. The analysis indicated that 
the existing payment adjustments for teaching hospitals and 
disproportionate share hospitals were contributing to excessive payment 
levels for these classes of hospitals. Therefore, we stated that it may 
be appropriate to reduce these adjustments significantly, or even to 
eliminate them altogether, within the capital IPPS. These payment 
adjustments, unlike the parallel adjustments under the operating IPPS, 
were not mandated by the Act. Rather, they were included within the 
original design of the capital IPPS under the Secretary's broad 
authority under sections 1886(g)(1)(A) and (g)(1)(B) of the Act to 
include appropriate adjustments and exceptions within a capital IPPS. 
We noted that it is difficult to justify indefinite continuation of 
these adjustments in the light of the continuous, substantial positive 
margins realized by the classes of hospitals that qualify for them. 
When the payment adjustments were instituted at the inception of the 
program, the initial standard Federal payment rate was adjusted in a 
budget-neutral fashion to account for the expenditures that would be 
required by these adjustments. Therefore, we indicated that we would 
also consider whether we should similarly adjust the Federal capital 
payment rate to account for all or a portion of these adjustments, 
effectively increasing the base payment rate for all hospitals 
(including rural, nonteaching, and non-DSH hospitals that do not 
benefit from these adjustments), while removing these special 
adjustments for the hospitals that have been eligible to receive them. 
We also indicated that we were considering whether, in light of the 
substantial positive margins experienced by these teaching and DSH 
hospitals, the discontinuation of these adjustments should not result 
in a change to the standard capital rate and should instead result in 
savings to the program. We invited comments on these proposals and on 
other means of appropriately adjusting and targeting payments under the 
capital IPPS, as well as on the proposals that we formally made in the 
FY 2008 IPPS proposed rule.
    Comment: Numerous commenters addressed our proposals to eliminate 
the large urban add-on and to provide a differential update to urban 
and rural hospitals for 2 years. Many commenters also addressed our 
discussion about the possibility of significantly reducing or 
eliminating the existing payment adjustments for teaching hospitals and 
DSH adjustments within the capital IPPS. Commenters included numerous 
individual hospitals, hospital associations, and MedPAC.
    Commenters from the hospital industry were strongly opposed to our 
proposals to eliminate the large urban add-on and to provide a 
differential update to urban and rural hospitals for 2 years. Many 
commenters contended that such reductions in capital payments should 
not be made without explicit authorization from Congress. Many 
commenters also objected that the proposals violated fundamental 
principles of the capital IPPS. Specifically, many commenters asserted 
that the positive margins reflected the operation of one such 
fundamental principle, that by responding to the incentives of 
prospective payment, providers should be able to gain from conducting 
their operations efficiently. Many of these commenters further 
contended that the proposals do not take sufficient account of the 
cyclical nature of capital spending. These commenters pointed out that, 
under the design of the capital IPPS, hospitals were expected to 
reserve capital funds in anticipation of future capital needs, similar 
to how funded depreciation reserves had been used under the prior cost 
reimbursement system. These funds would permit future capital 
investment to be funded in part with equity financing rather than 
borrowing. Thus, it is only to be expected that hospitals would run 
positive margins during one phase of the capital cycle. Some regional 
hospital associations provided evidence intended to demonstrate that 
their hospitals have been experiencing positive margins because they 
are in a low-spending phase of their capital cycles. For example, one 
association representing a major metropolitan area submitted an 
extensive analysis, including data on margins and changes in unit cost 
and price, suggesting that its member hospitals are in a lower-spending 
phase of their capital cycle than other hospitals may be. Other 
commenters contended that, in order to account adequately for the 
capital spending cycle, it would be necessary to conduct an analysis 
over a much longer period, such as 20 years.
    Some commenters contended that the capital IPPS is not a separate 
payment

[[Page 47398]]

system but should be considered only part of a broader IPPS embracing 
both capital and operating payments. These commenters further 
maintained that the proposed reductions in capital IPPS payments are 
unwarranted in the light of the negative operating IPPS margins for 
hospitals in recent years. Several commenters pointed out that the 
combined operating and capital margin for IPPS hospitals was zero in FY 
2004. Other commenters similarly noted that MedPAC estimates an overall 
hospital Medicare margin in 2007 of negative 5.4 percent. Other 
commenters pointed out that, even considering capital IPPS margins 
alone, the trend in recent years has been for the margins to decrease. 
Many commenters suggested that the proposed reductions could cause 
serious financial hardships for many hospitals and produce a very 
negative impact upon the addition and dissemination of newer 
technologies, health information systems, electronic health records and 
scanning devices that are a critical part of healthcare delivery 
systems and improvements to enhance patient safety and quality of care. 
A number of commenters objected that the cuts would make it much more 
difficult for hospitals to undertake the capital improvements required 
by various state mandates, as well as the adoption of the information 
technologies encouraged by various Federal initiatives.
    At the same time, many commenters from the hospital industry 
objected to employing margin analysis at all as the basis for the 
proposals, or for the possible revisions that we discussed to the other 
capital IPPS payment adjustments. These commenters contended that 
revisions to the payment adjustments should not be considered without 
updating the regression analyses that were employed originally to 
establish these adjustments. Furthermore, most of these commenters 
maintained that it would only be appropriate to employ total costs 
regressions, as opposed to capital cost-only regressions, in these 
analyses. Commenters advocated using total cost regressions on the 
grounds that doing so would follow precedent (the analysis that 
supported the original establishment of the adjustments employed total 
cost regressions), and would be consistent with treating the capital 
IPPS as intrinsically part of a broader IPPS embracing both capital and 
operating payments.
    Other commenters raised technical issues suggesting that the 
positive margins in our analysis were not representative of actual 
capital costs. Several commenters contended that the margins may be 
overstated because many cost reports, especially for the years 2003 and 
2004, have not yet been audited and/or settled. One commenter suggested 
that the margins could be overstated because of a large backlog of 
appeals at the PRRB. According to the commenter, the comparison of the 
hospitals' capital costs from the cost report could be grossly 
understated, yielding an inflated margin. Another commenter contended 
that the elimination of the loss on recapture amount by the BBA of 1997 
is skewing the calculation of the capital margins, which therefore 
should not be the basis for our proposals.
    MedPAC supported the proposal to eliminate the large urban add-on 
adjustment starting in FY 2008. MedPAC noted that Congress equalized 
the base rates of urban and rural hospitals under the operating IPPS in 
the MMA, and that eliminating the 3 percent add-on for large urban 
hospitals under the capital IPPS will similarly contribute to 
equalizing the capital base rates. MedPAC cited the fact that urban and 
rural hospitals' overall Medicare margins, reflecting both operating 
and capital inpatient payments along with payments for outpatient and 
hospital-based post-acute services, are roughly equal. However, MedPAC 
opposed the proposal for different updates for urban and rural 
hospitals on the grounds that such a differential update is 
inconsistent with the direction of policy for the acute care IPPS that 
we proposed to follow in eliminating the large urban add-on. MedPAC 
noted that, while eliminating the large urban adjustment would 
contribute to equalizing the base rates for urban and rural hospitals, 
differential updates would then reintroduce separate base rates. MedPAC 
recommended that we should use the update framework to determine the 
appropriate update for capital payments and then apply that update to 
all capital IPPS hospitals. MedPAC also recommended that we should 
seriously reexamine the appropriateness of the current capital IME 
adjustment. In its March 2007 Report to the Congress, MedPAC 
recommended (based on an analysis of operating and capital costs 
combined) that the operating IME adjustment be reduced from 5.5 percent 
to 4.5 percent per 10 percent increment of teaching intensity. MedPAC 
therefore indicated that some reduction in the capital IME adjustment 
would be consistent with its finding that the IME adjustment is set too 
high.
    Response: We do not agree with those commenters who argued that we 
lack the authority to adopt measures such as those we proposed without 
specific authorization from Congress. While the statute governs the 
operating IPPS in highly prescriptive detail (section 1886(d) of the 
Act), the statutory provision governing the capital IPPS (section 
1886(g) of the Act) prescribes only several broad governing principles 
and otherwise provides the Secretary with broad discretion to design 
and modify the system within those principles. The statute does not 
limit the Secretary's authority to update rates and gives the Secretary 
broad discretion to provide for exceptions. It is true that Congress 
has, on two occasions, adjusted the rate as originally established and 
updated by the Secretary. However, we do not believe that such action 
precludes the Secretary from exercising the discretionary authority 
otherwise conferred by the statute to make similar revisions to the 
rates and the adjustments that have been established to account for 
appropriate variations in costs among classes of hospitals.
    We do not agree with many of the criticisms of our analysis and the 
conclusions that we drew from that analysis. We agree that a basic 
principle of prospective payment systems is that efficient providers 
should be able to realize positive margins from the payment structure. 
However, prospective payment systems are generally designed to pay at 
rates reflecting the costs of hospitals at average levels of 
efficiency. Under such a system, hospitals of above average efficiency 
would be expected to realize positive margins, while hospitals of less 
than average efficiency would be expected to realize negative margins. 
Therefore, the continuation of significant positive margins across a 
prospective payment system as a whole (or across classes of hospitals 
that receive specific adjustments) is an indication that the payment 
rates (or the adjustments to the rates) may be set at a level higher 
than necessary to cover the costs of efficient operation. Under such 
circumstances, we believe that it is appropriate to revise basic 
payment rates or payment adjustments, or both, to account for such 
evidence.
    We also do not agree that, in this context, the capital IPPS should 
be treated as a component of a larger payment system, embracing both 
the capital and operating IPPSs. As we have just discussed, the statute 
governs the operating IPPS in highly prescriptive detail, while the 
statutory provision governing the capital IPPS provides the Secretary 
with very broad discretion (within certain governing principles) to 
design and modify the system. Most especially, the statute specifically

[[Page 47399]]

defines both the types of adjustments and the formulas for those 
adjustments under the operating IPPS. However, it gives the Secretary 
broad authority in providing for appropriate adjustments and exceptions 
under the capital IPPS. Furthermore, while we adopted approaches on 
several issues in the development of the capital IPPS that were based 
on the premise that the capital and operating IPPSs might eventually be 
merged into one system, the two systems have now operated separately 
for 15 years without any apparent prospect of integration in the near 
future. Therefore, we believe that it is appropriate under the current 
design of the capital and operating IPPSs to base proposals for payment 
policies under the capital IPPS on analysis that is confined to the 
data regarding the capital IPPS alone, and that total IPPS margins 
should not be the controlling factor in the analysis that we are now 
conducting. For this same reason, we do not agree with commenters who 
urged us to employ updated versions of the total cost regressions that 
were originally used to establish the payment adjustments under the 
capital IPPS. In the long run, we believe that it makes sense to base 
capital payment adjustments on total cost variations only if similar 
adjustments under the operating IPPS are also based on total cost 
regression analysis.
    We agree with commenters that the capital spending of hospitals 
tends to occur in cycles, with periods of higher capital investment 
followed by periods in which capital spending tends to be lower. As 
some of the commenters noted, we devoted considerable attention to the 
potential implications of this capital cycle in developing the original 
design of the capital IPPS. At that time, we decided not to build any 
specific feature into the system to account for capital cycles, on the 
grounds that hospitals ought to be able to manage their spending on the 
basis of the predetermined rates and adjustments under the capital 
IPPS, conserving funds during lower spending portions (and often high 
interest rate periods) of the cycle in order to prepare for necessary 
capital expenditures later. We do not agree with those commenters who 
suggested that the existence of a capital spending cycle accounts for 
the persistently high margins for some classes of hospitals that we 
have observed over the period 1996 through 2004 nationally. There is no 
reason to suppose that there would be uniformity or regularity among 
hospitals in the length of time between major capital expenditures or 
the overall pattern of capital spending. To the degree that a capital 
cycle exists, it reflects the pattern of spending in individual 
hospitals or, in some cases, groups of hospitals where the pattern of 
spending is determined by factors such as common ownership, local 
regulation, or other factors. There is no uniform or regular capital 
cycle across IPPS hospitals generally or large classes of hospitals 
(for example, teaching hospitals) nationally. In any given year, the 
margins of hospitals generally, and of large classes of hospitals 
defined nationally, would reflect the experience of many hospitals in 
the lower spending portions of their capital cycles, and many other 
hospitals in the higher spending portions of their capital cycles. 
Therefore, the existence of the persistent positive margins that we 
identified cannot be explained on the basis of a ``capital cycle.'' For 
the same reasons, we do not believe that it is necessary to conduct an 
analysis of a period of 20 or more years, as suggested by some 
commenters, in order to account fully for the existence of a capital 
cycle.
    We are also not persuaded by the technical objections that some 
commenters raise to the margin analysis. We have examined the 
settlement and audit status of cost reports over the period of our 
analysis and found a normal and expected pattern. Specifically, the 
data from more recent years (especially 2004 and 2005) reflect more 
cost reports that have been submitted but not yet settled, and fewer 
cost reports that have been settled with audit or subjected to 
reopening and amendment. Conversely, many more cost reports from the 
earlier part of the period we examined (especially those from 2002 and 
earlier) have been settled, settled with audit, or reopened and 
amended. While this analysis suggests that, as is to be expected, the 
margin data for the last 2 or 3 years of our analysis may be subject to 
some change as more cost reports are audited and settled, we do not 
believe that this normal pattern of activity has any significant 
implications for the validity of our analysis. The general pattern is 
for settlement and audit activity to reduce, not to increase, the 
levels of capital and other costs claimed by hospitals on their cost 
reports. Therefore, we believe that the comparatively lower positive 
margins of more recent years noted by some commenters are likely, if 
anything, to be understated compared to the margins that the data will 
indicate once more of those years' cost reports are audited and 
settled.
    We also do not agree with the commenter who suggested that the 
margins are skewed by the elimination of the provision to recognize 
losses or gains on sales. Prior to the BBA of 1997, the Medicare 
program recognized losses or gains on sales of capital assets in 
relation to the depreciation that the program for which the program 
paid under the cost based payment system. Depreciation payments for the 
years prior to a sale were accordingly adjusted in the cost report 
submitted for the year of the sale: an additional payment was made for 
Medicare's portion of the depreciation on the asset if the hospital 
experienced a loss on the sale (indicating that prior payments for 
depreciation had been too low). Conversely, a portion of Medicare's 
payments for the depreciation of the asset was recaptured (by means of 
reducing payments to the hospital) in case of a gain on the sale 
(indicating that prior payments for depreciation had been too high). 
The BBA of 1997 eliminated recognition of such gains and losses on 
sales under Medicare's cost accounting rules, effective December 1, 
1997. In the light of the congressional elimination of this provision, 
we do not believe that it would be appropriate (even if it were 
possible) to take any account of the possible effects of this provision 
on the margin data that we have analyzed. It is worth noting, however, 
that elimination of the provision to account for gains and losses on 
sales does not necessarily ``skew'' the margin data in the manner 
suggested by the commenter. Because the provision operated both to 
increase to account for losses on sales, and to decrease payments to 
account for gains on sales, the overall effect of the provision would 
not necessarily be (as implied by the commenter) to reduce the positive 
margins that are evident in the data.
    Furthermore, we do not believe that a backlog of cases at the PRRB 
would have a material effect on the level of the margins observed in 
our analysis. Cases such as those described by the commenter would be 
taken to the PRRB when reasonable cost determinations have an effect on 
actual payment amounts. Reasonable cost payments for capital have been 
a declining factor since the beginning of the capital IPPS transition 
in FY 1992. Cost payments declined steadily through the transition 
period, and since the end of the transition reasonable cost payments 
have been limited to a restricted number of exceptions (for example, 
new hospitals, extraordinary circumstances, and some large capital 
projects).

[[Page 47400]]

    We agree with MedPAC that eliminating the large urban add-on 
adjustment, starting in FY 2008, is warranted. We also agree with 
MedPAC that following the statutory precedent toward equalizing the 
base rates of urban and rural hospitals under the IPPS provides 
sufficient rationale for eliminating this adjustment. Therefore, we are 
finalizing our proposal to eliminate this adjustment in this final rule 
with comment period. In light of the strong overall positive margins 
across the system, we proposed not to increase the standard capital 
rate to account for expenditures otherwise payable due to this 
adjustment (approximately $147 million). Rather, in light of the 
excessive capital IPPS payments over the period of FYs 1996 through 
2004, we continue to believe that such an increase to the standard 
capital rate is not appropriate.
    We also agree with MedPAC that our proposal for a differential 
update for urban and rural hospitals during FYs 2008 and 2009 is not 
entirely consistent with this direction of policy for the capital and 
operating IPPSs. As MedPAC noted, eliminating the large urban add-on 
would complete the process of equalizing the base rates of urban and 
rural hospitals, but our proposal for differential updates would then 
reintroduce separate base rates. Therefore, we have decided not to 
finalize that proposal in this final rule with comment period.
    We also appreciate MedPAC's recommendation that we should seriously 
reexamine the appropriateness of the current capital IME adjustment. As 
we noted in the proposed rule, the margin analysis suggested that this 
adjustment may be too high. MedPAC's previous analysis had also 
suggested that the adjustment may be too high. In light of MedPAC's 
comment, we extended the analysis that we discussed in the proposed 
rule, especially to distinguish the experience of teaching hospitals 
from the experience of urban and rural hospitals generally. 
Specifically, in addition to the categories of hospitals that we 
examined in the proposed rule, we also examined the margins of urban, 
large urban, and rural teaching hospitals, as opposed to urban, large 
urban, and rural nonteaching hospitals. In conducting this analysis, we 
were able to employ updated cost report information, and this updated 
information allowed us to incorporate the margins for an additional 
year, FY 2005, into the analysis. The results, for the categories of 
hospitals that had already been considered in the proposed rule, were 
very consistent with the previous data. However, the data on the 
experience of urban, large urban, and rural teaching and nonteaching 
hospitals provided significant new information, especially in light of 
MedPAC's recommendation. We reproduce the table showing the new results 
below.

                                                       Hospital Inpatient Medicare Capital Margins
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                              Aggregate
                                                                                                                                              1998-2005
                                        1996     1997     1998     1999     2000     2001     2002     2003     2004     2005    Aggregate    (excluding
                                                                                                                                 1996-2005     1996 and
                                                                                                                                                1997)
--------------------------------------------------------------------------------------------------------------------------------------------------------
U.S.................................     17.6     13.4      7.0      6.8      7.3      8.1      8.7      7.6      5.3      3.7          8.5          6.8
    URBAN...........................     17.7     13.8      7.8      7.5      8.4      9.2     10.3      9.0      6.4      4.8          9.4          7.9
    RURAL...........................     16.8     11.0      2.1      2.4      1.0      1.5     -1.7     -1.4     -2.3     -4.2          2.6         -0.4
No DSH Payments.....................     16.2     11.7      4.2      4.3      5.6      5.5      4.7      4.4     -1.3     -4.7          5.9          3.2
Has DSH Payments....................     18.5     14.4      8.6      8.1      8.2      9.0     10.0      8.5      7.0      5.9          9.5          8.1
    $1-$249,999.....................     14.5     12.9     -0.4      3.1      1.6      4.1      3.2      1.4     -1.7     -4.8          3.2          1.9
    $250,000-$999,999...............     15.5      9.0      2.3      1.6      2.8      2.7     -2.4     -1.5     -4.3     -7.3          1.5         -0.9
    $1,000,000-$2,999,999...........     16.8     13.0      8.7      9.0      8.7      7.0     10.1      5.2      3.2      2.0          8.2          6.6
    $3,000,000 or more..............     20.3     16.6     10.4      9.3      9.7     12.1     13.2     12.5     10.6      9.5         12.2         11.0
TEACHING............................     19.5     15.7      9.8      9.7     11.2     12.1     13.8     13.2     11.7     10.6         12.7         11.6
    Urban...........................     19.7     15.9     10.2     10.0     11.4     12.5     14.0     13.6     11.9     10.9         13.0         11.9
        Large Urban.................     20.5     16.8     11.0     10.1     12.5     13.9     15.2     14.7     12.0     11.9         13.9         12.8
    Rural...........................     13.9      8.5      1.0      2.9      5.8      3.2      8.2      4.7      5.7      4.0          5.7          4.5
NON-TEACHING........................     15.3     10.5      3.4      2.8      2.2      2.6      1.7      0.0     -3.2     -5.1          2.8          0.3
    Urban...........................     14.4     10.1      3.8      3.0      3.0      3.1      3.6      0.9     -2.9     -4.9          3.1          0.9
        Large Urban.................     15.5     11.3      6.2      6.1      5.7      5.2      5.3      1.7     -0.9     -3.2          5.1          2.9
    Rural...........................     17.3     11.4      2.3      2.4      0.2      1.2     -3.7     -2.6     -3.9     -6.0          2.0         -1.3
 Census Division:
    New England (1).................     27.9     25.9     17.1     15.1     18.2     20.7     21.3     21.1     20.5     20.3         21.0         19.5
    Middle Atlantic (2).............     19.1     15.5     11.1     11.6     14.1     16.5     18.7     18.0     14.7     16.0         15.6         15.2
    South Atlantic (3)..............     18.1     13.9      5.9      4.0      6.0      5.0      6.6      6.9      5.8      2.8          7.4          5.4
    East North Central (4)..........     18.2     12.7      6.4      7.1      8.8      8.5      6.1      7.1      6.6      3.2          8.4          6.7
    East South Central (5)..........     14.9     11.1      3.3      4.1      3.8      3.8      3.8     -0.9     -3.4     -5.8          3.2          0.9
    West North Central (6)..........     14.3      7.0      0.1     -0.3     -1.5      2.0      1.9      3.4      1.6     -0.4          2.8          0.9
    West South Central (7)..........     13.2      8.3      3.3      2.6     -0.7      0.0      1.2     -2.0     -4.0     -6.5          1.2         -1.0
    Mountain (8)....................     17.2     14.7      8.5      7.7      7.2      6.4      2.9      3.3      0.8     -4.7          5.8          3.6
    Pacific (9).....................     20.4     16.1     12.3     11.3     11.9     13.3     14.7     12.1      9.8      8.8         13.0         11.7
    Code 99.........................     23.7     24.1     14.5     16.8     19.8     20.7     20.5     25.1     21.6     24.8         21.4         20.8
 Bed Size:
    < 100 beds......................     17.7     13.0      4.6      3.5      2.7      2.5     -1.8     -1.2     -6.1     -9.6          2.0         -0.9
    100-249 beds....................     15.1     10.5      3.7      4.5      4.3      6.1      6.0      4.2      1.5      0.8          5.6          3.8
    250-499 beds....................     18.9     14.1      8.9      8.3     10.6     10.7     12.1     11.6     10.3      7.7         11.4         10.1
    500-999 beds....................     19.9     17.1     10.7     10.4     11.3     10.8     12.6     10.1      7.3      7.8         11.6         10.1
    >= 1000 beds....................      8.2     14.0      2.2     -1.3     -6.6     -3.6      6.5      8.1      6.5      2.1          3.5          2.3
--------------------------------------------------------------------------------------------------------------------------------------------------------
Notes:
Based on Medicare Cost Report hospital data updated as of the 1st quarter of 2007.
Medicare payments are from Worksheet E, Part A, Lines 9 and 10.
Expenses are from Worksheet D, Part I, columns 10 and 12 and Part II, columns 6 and 8.
We apply the outlier trimming methodology developed with MedPAC.
Code 99 applies when census division information was not specified in the Medicare Cost Report hospital data.


[[Page 47401]]

    As the table indicates, teaching hospitals in each class have been 
performing significantly better than comparable nonteaching hospitals. 
For the period FYs 1998 through 2005, urban teaching hospitals have 
realized an aggregate positive margin of 11.6 percent, compared to a 
positive margin of 0.9 percent for urban nonteaching hospitals. 
Similarly, large urban teaching hospitals have realized an aggregate 
positive margin of 12.8 percent during that period, while large urban 
nonteaching hospitals have an aggregate positive margin of only 2.9 
percent. There is a similar pattern among rural teaching and 
nonteaching hospitals, although at lower margin levels. Rural teaching 
hospitals have experienced an aggregate positive margin over the period 
FYs 1998 through 2005 of 4.5 percent, while rural nonteaching hospitals 
have an aggregate negative margin of -1.3 percent. Significantly, the 
positive margins for teaching hospitals do not exhibit decline to the 
same degree that many commenters observed in the margins for all 
hospitals, as well the classes of urban hospitals and rural hospitals, 
under the capital IPPS. The positive margin among all IPPS hospitals 
declined from 8.7 percent in FY 2002 to 5.3 percent in FY 2004 and 3.7 
percent in FY 2005. Similarly, the aggregate margin for urban hospitals 
declined from 10.3 percent in FY 2002 to 6.4 percent in FY 2004 and 4.8 
percent in FY 2005. The aggregate margin for rural hospitals declined 
from a positive margin of 1.5 percent in FY 2001 to a negative margin, 
-4.2 percent, in FY 2005. However, the aggregate margin for teaching 
hospitals was 12.1 percent in FY 2001 and 10.6 percent in FY 2005. 
Urban teaching hospitals experienced margins of 12.5 percent in FY 
2001, 14.0 percent in FY 2002, 13.6 percent in FY 2003, 11.9 percent in 
FY 2004, and 10.9 percent in FY 2005. The margins for rural teaching 
hospitals have shown greater variation, but still do not exhibit a 
pattern of significant decline. Rural teaching hospitals had positive 
margins of 3.2 percent in FY 2001, 8.2 percent in FY 2002, 4.7 percent 
in FY 2003, 5.7 percent in FY 2004, and 4.0 percent in FY 2005.
    As we stated in the proposed rule, the statutory history of the 
capital IPPS suggests that the system in the aggregate should not 
provide for continuous, large positive margins. As we also indicated, a 
possible reason for the relatively high margins of many capital IPPS 
hospitals may be that the payment adjustments provided under the system 
are too high, or perhaps even unnecessary. As we stated above, we agree 
with MedPAC's recommendation that the appropriateness of the teaching 
adjustment should be seriously reexamined. We believe that the record 
of relatively high and persistent positive margins for teaching 
hospitals under the capital IPPS indicates that the current teaching 
adjustment is unnecessary, and that it is therefore appropriate to 
exercise our discretion under the capital IPPS to eliminate this 
adjustment. At the same time, we believe we should mitigate abrupt 
changes in payment policy and to provide time for hospitals to adjust 
to changes in the payments that they can expect under the program. 
Therefore, we are adopting the following policy in this final rule with 
comment period. We will phase out the adjustment over a 3 year period 
beginning in FY 2008. Specifically, we will maintain the current 
adjustment for FY 2008, in order to give teaching hospitals an 
opportunity to plan and make adjustments to the change. During the 
second year of the transition, FY 2009, the formula for determining the 
amount of the teaching adjustment will be revised so that adjustment 
amounts will be half of the amounts provided under the current formula. 
For FY 2010 and after, hospitals will no longer receive an adjustment 
for teaching activity under the capital IPPS. As discussed previously, 
in implementing the capital IPPS Congress has in fact mandated that 
payments in the aggregate not exceed 90 percent of Medicare inpatient 
capital costs. For this reason, and in light of the generally positive 
margins experienced by virtually all categories of hospitals under the 
capital IPPS, we believe that it is not necessary to increase the 
standard Federal capital rate to account for this change in payment 
policy.
    While we are formally adopting this final policy in this final rule 
with comment period, we believe that this change to the structure of 
payments under the capital IPPS is significant enough that it could be 
valuable to provide the public with an opportunity for further comment. 
Therefore, we will accept comments on the policy that we are adopting, 
to phase out the capital IPPS teaching adjustment over a 3-year period, 
with a 50-percent reduction beginning in FY 2009. We will accept public 
comments on this final policy for 90 days after the date of publication 
of this final rule with comment period. In addition, we will provide 
additional opportunity for public comment during the FY 2009 proposed 
rulemaking cycle for the IPPS. We intend to respond to all comments 
that we receive on this final policy during this period in the FY 2009 
final rule for the IPPS. We believe that this will provide a more than 
adequate opportunity for hospitals, associations, and other interested 
parties to raise issues and concerns related to this final policy.

VI. Changes for Hospitals and Hospital Units Excluded From the IPPS

A. Payments to Existing and New Excluded Hospitals and Hospital Units

    Historically, hospitals and hospital units excluded from the 
prospective payment system received payment for inpatient hospital 
services they furnished on the basis of reasonable costs, subject to a 
rate-of-increase ceiling. An annual per discharge limit (the target 
amount as defined in Sec.  413.40(a)) was set for each hospital or 
hospital unit based on the hospital's own cost experience in its base 
year. The target amount was multiplied by the Medicare discharges and 
applied as an aggregate upper limit (the ceiling as defined in Sec.  
413.40(a)) on total inpatient operating costs for a hospital's cost 
reporting period. Prior to October 1, 1997, these payment provisions 
applied consistently to all categories of excluded providers 
(rehabilitation hospitals and units (now referred to as IRFs), 
psychiatric hospitals and units (now referred to as IPFs), LTCHs, 
children's hospitals, and cancer hospitals).
    Payment for children's hospitals and cancer hospitals that are 
excluded from the IPPS continues to be subject to the rate-of-increase 
ceiling based on the hospital's own historical cost experience. (We 
note that, in accordance with Sec.  403.752(a) of the regulations, 
RNHCIs are also subject to the rate-of-increase limits established 
under Sec.  413.40 of the regulations.) In the FY 2008 IPPS proposed 
rule, we proposed that the percentage increase in the rate-of-increase 
limits for cancer and children's hospitals and RNHCIs would be the 
percentage increase in the FY 2008 IPPS operating market basket, then 
estimated to be 3.3 percent. Consistent with our historical approach, 
if more recent data are available for the final rule, we use it to 
calculate the IPPS operating market basket. For this final rule with 
comment period, we have calculated the IPPS operating market basket for 
FY 2008 using the most recent data available. For cancer and children's 
hospitals and RNHCIs, the FY 2008 rate-of-increase percentage that is 
applied to FY 2007 target amounts in order to calculate FY 2008 target 
amounts 3.3 percent, based on Global Insight, Inc.'s 2007 second 
quarter forecast of the IPPS operating market basket increase, in

[[Page 47402]]

accordance with the applicable regulations in 42 CFR 413.40.
    IRFs, IPFs, and LTCHs were paid previously under the reasonable 
cost methodology. However, the statute was amended to provide for the 
implementation of prospective payment systems for IRFs, IPFs, and 
LTCHs. In general, the prospective payment systems for IRFs, IPFs, and 
LTCHs provide transition periods of varying lengths during which time a 
portion of the prospective payment is based on cost-based reimbursement 
rules under Part 413 (certain providers do not receive a transition 
period or may elect to bypass the transition period as applicable under 
42 CFR part 412, Subparts N, O, and P). We note that the various 
transition periods provided for under the IRF PPS, IPF PPS, and LTCH 
PPS have ended or will soon end.
    For cost reporting periods beginning on or after October 1, 2002, 
all IRFs are paid 100 percent of the adjusted Federal rate under the 
IRF PPS. Therefore, for cost reporting periods beginning on or after 
October 1, 2002, no portion of an IRF PPS payment is subject to 42 CFR 
part 413. Similarly, for cost reporting periods beginning on or after 
October 1, 2006, all LTCHs are paid 100 percent of the adjusted Federal 
Rate under the LTCH PPS. Therefore, for cost reporting periods 
beginning on or after October 1, 2006, no portion of the LTCH PPS 
payment is subject to 42 CFR part 413. (We note that, to the extent a 
portion of a LTCH's PPS payment was subject to reasonable cost 
principles, the Secretary utilized his broad authority under section 
123 of the BBRA, as amended by section 307 of the BIPA, to make such 
portion subject to 42 CFR part 413 and various provisions in section 
1886(b) of the Act.) However, except as provided in Sec.  412.426(c), 
IPFs remain under a blended methodology for cost reporting periods 
beginning on or after January 1, 2005, and before January 1, 2008.
    Under the broad authority conferred upon the Secretary in section 
124(a)(1) of the BBRA, the Secretary provided that, for IPFs paid under 
the blended methodology, the portion of the IPF PPS payment that is 
based on reasonable cost principles is subject to the provisions of 42 
CFR part 413 and various provisions in section 1886(b) of the Act. In 
order to calculate the portion of the PPS payment that is based on 
reasonable cost principles, it is necessary to determine whether the 
IPF would be considered ``existing'' for purposes of section 
1886(b)(3)(H) of the Act or ``new'' for purposes of section 1886(b)(7) 
of the Act. We note that readers should not confuse an IPF that is 
considered ``new'' for purposes of section 1886(b)(7) of the Act and 
Sec.  413.40(f)(2)(ii) of the regulations with an IPF that is 
considered ``new'' under Sec.  412.426(c) of the regulations. Any IPF 
that, under present or previous ownership or both, has its first cost 
reporting period as an IPF beginning on or after January 1, 2005, is 
considered ``new'' for purposes of Sec.  412.426(c). An IPF that is 
considered ``new'' under Sec.  412.426(c) is paid based on 100 percent 
of the Federal per diem payment amount. Consequently, only those IPFs 
considered ``new'' under section 1886(b)(7) of the Act, but not ``new'' 
under Sec.  412.426(c) of the regulations will be paid under a PPS 
blended payment methodology. An IPF considered ``new'' for purposes of 
Sec.  413.40(f)(2)(ii) would have its ``reasonable-cost based'' portion 
of its prospective payment subject to the provisions of Sec. Sec.  
413.40(f)(2)(ii) and 413.40(c)(4)(v), as applicable. An IPF considered 
``new'' for purposes of section 1886(b)(7) of the Act has the target 
amount for its third cost reporting period determined in accordance 
with sections 1886(b)(7)(A)(ii) and 1886(b)(3)(A)(ii) of the Act. For 
the fourth and subsequent cost reporting periods, the target amount is 
calculated in accordance with section 1886(b)(3)(A)(ii) of the Act. An 
IPF that would be considered ``existing'' for purposes of section 
1886(b)(3)(H) of the Act has the target amount for the ``reasonable-
cost based'' portion of its prospective payment determined in 
accordance with section 1886(b)(3)(A)(ii) of the Act and the 
regulations at Sec.  413.40(c)(4)(ii).
    In the FY 2008 IPPS proposed rule (72 FR 24823), the applicable 
percentage increase to update the target amount for the reasonable 
cost-based portion of the PPS payment of an IPF that is considered 
``existing'' under section 1886(b)(3)(H) of the Act or ``new'' under 
section 1886(b)(7) of the Act, but not ``new'' under Sec.  412.426(c), 
was 3.4 percent. However, we noted that if more current data became 
available prior to publication of the final rule, we would use those 
data for updating the market basket. Based on more current data, the 
applicable percentage increase to update the target amount for the 
reasonable cost-based portion of the PPS payment of an IPF that is 
considered ``existing'' under section 1886(b)(3)(H) of the Act or 
``new'' under section 1886(b)(7) of the Act, but not ``new'' under 
Sec.  412.426(c), is 3.3 percent, based on Global Insight, Inc.'s 2007 
second quarter forecast of the excluded hospital market basket 
increase, in accordance with the applicable regulations at 42 CFR 
413.40.
    We did not receive any public comments on this section of the 
proposed rule.

B. Separate PPS for IRFs

    Section 1886(j) of the Act, as added by section 4421(a) of Pub. L. 
105-33, provided for a phase-in of a case-mix adjusted PPS for 
inpatient hospital services furnished by IRFs for cost reporting 
periods beginning on or after October 1, 2000, and before October 1, 
2002, with payments based entirely on the adjusted Federal prospective 
payment for cost reporting periods beginning on or after October 1, 
2002. Section 1886(j) of the Act was amended by section 125 of Pub. L. 
106-113 to require the Secretary to use a discharge as the payment unit 
under the PPS for inpatient hospital services furnished by IRFs, and to 
establish classes of patient discharges by functional-related groups. 
Section 305 of Pub. L. 106-554 further amended section 1886(j) of the 
Act to allow IRFs, subject to the blended methodology, to elect to be 
paid the full Federal prospective payment rather than the transitional 
period payments specified in the Act.
    On August 7, 2001, we issued a final rule in the Federal Register 
(66 FR 41316) establishing the PPS for IRFs, effective for cost 
reporting periods beginning on or after January 1, 2002. There was a 
transition period for cost reporting periods beginning on or after 
January 1, 2002, and ending before October 1, 2002. For cost reporting 
periods beginning on or after October 1, 2002, payments are based 
entirely on the adjusted Federal prospective payment rate determined 
under the IRF PPS.

C. Separate PPS for LTCHs

    On August 30, 2002, we issued a final rule in the Federal Register 
(67 FR 55954) establishing the PPS for LTCHs, effective for cost 
reporting periods beginning on or after October 1, 2002. Except for a 
LTCH that made an election under Sec.  412.533(c) or a LTCH that is 
defined as new under Sec.  412.23(e)(4), there was a transition period 
for cost reporting periods beginning on or after October 1, 2002, and 
ending before October 1, 2007. For cost reporting periods beginning on 
or after October 1, 2006, total LTCH PPS payments are based on 100 
percent of the Federal rate.

D. Separate PPS for IPFs

    In accordance with section 124 of Pub. L. 106-113 and section 
405(g)(2) of Pub. L. 108-173, we established a PPS for inpatient 
hospital services furnished in IPFs. On November 15, 2004, we issued in 
the Federal Register a final

[[Page 47403]]

rule (69 FR 66922) that established the IPF PPS, effective for IPF cost 
reporting periods beginning on or after January 1, 2005. Under the 
requirements of the final rule, we compute a Federal per diem base rate 
to be paid to all IPFs for inpatient psychiatric services based on the 
sum of the average routine operating, ancillary, and capital costs for 
each patient day of psychiatric care in an IPF, adjusted for budget 
neutrality. The Federal per diem base rate is adjusted to reflect 
certain patient characteristics, including age, specified DRGs, 
selected high-cost comorbidities, days of the stay, and certain 
facility characteristics, including a wage index adjustment, rural 
location, indirect teaching costs, the presence of a full-service 
emergency department, and COLAs for IPFs located in Alaska and Hawaii. 
We have established a 3 year transition period during which IPFs whose 
first cost reporting periods began before January 1, 2005, will be paid 
a PPS payment, a portion of which is based on reasonable cost 
principles and a portion of the Federal per diem payment amount. For 
cost reporting periods beginning on or after January 1, 2008, all IPFs 
will be paid 100 percent of the Federal per diem payment amount.

E. Determining LTCH Cost-to-Charge Ratios (CCRs) Under the LTCH PPS

    In determining both high-cost outlier and short-stay outlier 
payments under the LTCH PPS (at Sec. Sec.  412.525(a) and 412.529, 
respectively), we calculate the estimated cost of the case by 
multiplying the LTCH's overall CCR by the Medicare allowable charges 
for the case. (In general, we use the LTCH's overall CCR. In some 
instances we use an alternative CCR, such as the statewide average CCR 
in accordance with the regulations at Sec.  412.525(a)(4)(iv)(C) and 
Sec.  412.529(c)(3)(iv)(C), or a CCR that is specified by CMS or that 
is requested by the hospital under the provisions of the regulations at 
Sec.  412.525(a)(4)(iv)(A) and Sec.  412.529(c)(3)(iv)(A).) Under the 
LTCH PPS, a single prospective payment per discharge is made for both 
inpatient operating and capital-related costs. Therefore, we compute a 
single ``overall'' or ``total'' LTCH-specific CCR based on the sum of 
LTCH operating and capital costs (as described in Chapter 3, section 
150.24, of the Medicare Claims Processing Manual (CMS Pub. 100 4)) as 
compared to total charges. Specifically, a LTCH's CCR is calculated by 
dividing a LTCH's total Medicare costs (that is, the sum of its 
operating and capital inpatient routine and ancillary costs) by its 
total Medicare charges (that is, the sum of its operating and capital 
inpatient routine and ancillary charges) (72 FR 48117).
    In the June 9, 2003 IPPS high-cost outlier final rule (68 FR 
34498), we made revisions to our policies concerning the determination 
of LTCHs' CCRs and the reconciliation of high-cost outlier and short-
stay outlier payments under the LTCH PPS. As we stated in that final 
rule (68 FR 34507), because the LTCH PPS high-cost outlier and short-
stay outlier policies are modeled after the IPPS outlier policy, we 
believe they are susceptible to the same payment vulnerabilities.
    In the FY 2007 IPPS final rule (71 FR 48115 through 48122), we 
amended our regulations and, for discharges occurring on or after 
October 1, 2006, refined the methodology for determining the annual CCR 
ceiling and statewide average CCRs for LTCHs. We also codified, with 
modifications and editorial clarifications, our policy for the 
reconciliation of high-cost outlier and short-stay outlier payments 
under the LTCH PPS. We indicated that because, historically, updates to 
the LTCH PPS CCR ceiling and statewide average CCRs have been effective 
on October 1, we would make these updates (and include relevant impact 
data) as a part of the IPPS rulemaking cycle.
    Specifically, in the FY 2007 IPPS final rule (71 FR 48117 through 
48121), under the broad authority of section 123 of Pub. L. 106-113 and 
section 307(b)(1) of Pub. L. 106-554, we established under the LTCH PPS 
high-cost outlier policy at Sec.  412.525(a)(4)(iv)(C) and the LTCH PPS 
short-stay outlier policy at Sec.  412.529(c)(3)(iv)(C), for discharges 
occurring on or after October 1, 2006, that the fiscal intermediary 
(or, if applicable, the MAC) may use a statewide average CCR, which is 
established annually by CMS, if it is unable to determine an accurate 
CCR for a LTCH in one of the following three circumstances: (1) New 
LTCHs that have not yet submitted their first Medicare cost report (for 
this purpose, a new LTCH is defined as an entity that has not accepted 
assignment of an existing hospital's provider agreement in accordance 
with Sec.  489.18); (2) LTCHs whose CCR is in excess of the LTCH CCR 
ceiling; and (3) other LTCHs for whom data with which to calculate a 
CCR are not available (for example, missing or faulty data). (Other 
sources of data that the fiscal intermediary (or, if applicable, the 
MAC) may use to determine a LTCH's CCR instead of the statewide average 
include data from a different cost reporting period for the LTCH, data 
from the cost reporting period preceding the period in which the 
hospital began to be paid as a LTCH (that is, the period of at least 6 
months that it was paid as a short-term acute care hospital), or data 
from other comparable LTCHs, such as LTCHs in the same chain or in the 
same region.)
    As noted above, generally, a LTCH is assigned the applicable 
statewide average CCR if, among other things, a LTCH's CCR is found to 
be in excess of the applicable maximum CCR threshold (that is, the LTCH 
CCR ceiling). As we explained in the FY 2007 IPPS final rule (71 FR 
48117), CCRs above this threshold are most likely due to faulty data 
reporting or entry, and, therefore, these CCRs should not be used to 
identify and make payments for outlier cases. Such data are clearly 
errors and should not be relied upon. Thus, under our established 
policy, generally, if a LTCH's calculated CCR is above the applicable 
ceiling, the applicable LTCH PPS statewide average CCR is assigned to 
the LTCH instead of the CCR computed from its most recent (settled or 
tentatively settled) cost report data.
    Under the broad authority of section 123 of Pub. L. 106-113 and 
section 307(b)(1) of Pub. L. 106-554, we revised our methodology for 
determining the annual CCR ceiling and statewide average CCRs under the 
LTCH PPS effective October 1, 2006, as we explained in the FY 2007 IPPS 
final rule (71 FR 48117 through 48121), because we believed that those 
changes were consistent with the LTCH PPS single payment rate for 
inpatient operating and capital costs.
    For discharges occurring on or after October 1, 2006, we 
established that the LTCH CCR ceiling specified under Sec.  
412.525(a)(4)(iv)(C)(2) for high-cost outliers and under Sec.  
412.529(c)(3)(iv)(C)(2) for short-stay outliers is calculated as 3 
standard deviations above the corresponding national geometric mean 
total CCR (established and published annually by CMS). (The fiscal 
intermediary (or, if applicable, the MAC) may use a statewide average 
CCR if, among other things, a LTCH's CCR is in excess of the LTCH CCR 
ceiling.) The LTCH total CCR ceiling is determined based on IPPS CCR 
data, by first calculating the ``total'' (that is, operating and 
capital) IPPS CCR for each hospital and then determining the average 
``total'' IPPS CCR for all IPPS hospitals. (Our rationale for using 
IPPS hospital data is discussed in the FY 2007 IPPS final rule (71 FR 
48117).) The LTCH CCR ceiling is then established at 3 standard 
deviations from the corresponding national geometric mean total CCR. 
(For further detail on our methodology for annually

[[Page 47404]]

determining the LTCH CCR ceiling, we refer readers to the FY 2007 IPPS 
final rule (71 FR 48117 through 48119).)
    We also established that the LTCH ``total'' CCR ceiling used under 
the LTCH PPS would continue to be published annually in the IPPS 
proposed and final rules, and the public should continue to consult the 
annual IPPS proposed and final rules for changes to the LTCH total CCR 
ceiling that would be effective for discharges occurring on or after 
October 1 of each year. Accordingly, in the FY 2007 IPPS final rule (71 
FR 48119), we established a FY 2007 LTCH PPS total CCR ceiling of 
1.321, effective for discharges occurring on or after October 1, 2006, 
and before October 1, 2007.
    In the FY 2008 IPPS proposed rule, in accordance with Sec.  
412.525(a)(4)(iv)(C)(2) for high-cost outliers and Sec.  
412.529(c)(3)(iv)(C)(2) for short-stay outliers, using our established 
methodology for determining the LTCH total CCR ceiling (described 
above), based on IPPS total CCR data from the December 2006 update to 
the Provider-Specific File, we proposed a total CCR ceiling of 1.273 
under the LTCH PPS that would be effective October 1, 2007. 
Furthermore, in the FY 2008 IPPS proposed rule, we stated that, if more 
recent data became available, we would use such data to determine the 
final total CCR ceiling under the LTCH PPS for FY 2008 using our 
established methodology described above. Based on the latest available 
data (data from the March 2007 update to the Provider-Specific File), 
for this final rule with comment period the total CCR ceiling of 1.284 
under the LTCH PPS will be effective for discharges occurring on or 
after October 1, 2007, and before October 1, 2008.
    In addition, under the broad authority of section 123 of Pub. L. 
106-113 and section 307(b)(1) of Pub. L. 106-554, in the FY 2007 IPPS 
final rule (71 FR 48120), we revised our methodology to determine the 
statewide average CCRs under Sec.  412.525(a)(4)(iv)(C) for high-cost 
outliers and under Sec.  412.529(c)(3)(iv)(C) for short-stay outliers 
for use under the LTCH PPS in a manner similar to the way we computed 
the ``total'' CCR ceiling using IPPS CCR data. Specifically, we first 
calculated the total (that is, operating and capital) CCR for each IPPS 
hospital. We then calculated the weighted average ``total'' CCR for all 
IPPS hospitals in the rural areas of the State, and the weighted 
average ``total'' CCR for all IPPS hospitals in the urban areas of the 
State. (For further detail on our methodology for annually determining 
the LTCH urban and rural statewide average CCRs, we refer readers to 
the FY 2007 IPPS final rule (71 FR 48119 through 48121).) We also 
established that the applicable statewide average ``total'' (operating 
and capital) CCRs used under the LTCH PPS would continue to be 
published annually in the IPPS proposed and final rules, and the public 
should continue to consult the annual IPPS proposed and final rules for 
changes to the applicable statewide average total CCRs that would be 
effective for discharges occurring on or after October 1 each year. 
Accordingly, in the FY 2007 IPPS final rule (71 FR 48122), the FY 2007 
LTCH PPS statewide average total CCRs for urban and rural hospitals, 
effective for discharges occurring on or after October 1, 2006, and 
before October 1, 2007, were presented in Table 8C of the Addendum of 
that final rule (71 FR 48303).
    In the FY 2008 IPPS proposed rule, in accordance with Sec.  
412.525(a)(4)(iv)(C) for high-cost outliers and Sec.  
412.529(c)(3)(iv)(C) for short-stay outliers, using our established 
methodology for determining the LTCH statewide average CCRs (described 
above), based on the most recent complete IPPS total CCR data from the 
December 2006 update of the Provider-Specific File, we proposed LTCH 
PPS statewide average total CCRs for urban and rural hospitals that 
would be effective for discharges occurring on or after October 1, 
2007, and before October 1, 2008, presented in Table 8C of the Addendum 
to the proposed rule. Furthermore, in the FY 2008 IPPS proposed rule, 
we stated that, if more recent data became available, we would use such 
data to determine the final statewide average total CCRs for urban and 
rural hospitals under the LTCH PPS for FY 2008 using our established 
methodology described above.
    We did not receive any specific public comments on our proposal.
    Based on the latest available data (data from the March 2007 update 
to the Provider-Specific File), for this final rule with comment 
period, the LTCH PPS statewide average total CCRs for urban and rural 
hospitals that will be effective for discharges occurring on or after 
October 1, 2007, and before October 1, 2008, are presented in Table 8C 
of the Addendum to this final rule with comment period. We note that, 
for this final rule with comment period, consistent with the proposed 
rule, as we established when we revised our methodology for determining 
the applicable LTCH statewide average CCRs in the FY 2007 IPPS final 
rule (71 FR 48119 through 48121), and as is the case under the IPPS, 
all areas in the District of Columbia, New Jersey, Puerto Rico, and 
Rhode Island are classified as urban, and, therefore, there are no 
rural statewide average total CCRs listed for those jurisdictions in 
Table 8C of the Addendum to this final rule with comment period. In 
addition, as we established when we revised our methodology for 
determining the applicable LTCH statewide average CCRs in that same 
final rule, and as is the case under the IPPS, although Massachusetts 
has areas that are designated as rural, there were no short-term acute 
care IPPS hospitals or LTCHs located in those areas as of December 
2006. Therefore, consistent with the proposed rule, for this final rule 
with comment period there is no rural statewide average total CCR 
listed for rural Massachusetts in Table 8C of the Addendum of this 
final rule with comment period. As we also established when we revised 
our methodology for determining the applicable LTCH statewide average 
CCRs in the FY 2007 IPPS final rule (71 FR 48120 through 48121), in 
determining the urban and rural statewide average total CCRs for 
Maryland LTCHs paid under the LTCH PPS, we use, as a proxy, the 
national average total CCR for urban IPPS hospitals and the national 
average total CCR for rural IPPS hospitals, respectively. We use this 
proxy because we believe that the CCR data on the Provider-Specific 
File for Maryland hospitals may not be accurate (as discussed in 
greater detail in that same final rule (71 FR 48120)).

F. Report of Adjustment (Exceptions) Payments

    Section 4419(b) of Pub. L. 105-33 requires the Secretary to publish 
annually in the Federal Register a report describing the total amount 
of adjustment payments made to excluded hospitals and units, by reason 
of section 1886(b)(4) of the Act, during the previous fiscal year.
    The process of requesting, adjudicating, and awarding an adjustment 
payment is likely to occur over a 2-year period or longer. First, 
generally, an excluded hospital or excluded unit of a hospital must 
file its cost report for a fiscal year with its fiscal intermediary 
within 5 months after the close of its cost reporting period, in 
accordance with Sec.  413.24(f)(2). The fiscal intermediary then 
reviews the cost report and issues a Notice of Program Reimbursement 
(NPR). If the hospital's operating costs are in excess of the ceiling, 
the hospital may file a request for an adjustment payment. The 
hospital's request must be received by the hospital's fiscal 
intermediary no later than 180 days after the date on the

[[Page 47405]]

intermediary's initial NPR for the cost reporting period for which the 
hospital requests an adjustment. The fiscal intermediary (or, if 
applicable, the MAC), or CMS, depending on the type of adjustment 
requested, then reviews the request and determines if an adjustment 
payment is warranted. This determination is sometimes not made until 
more than 6 months after the date the request is filed because there 
are times when the applications are incomplete and additional 
information must be requested in order to have a completed application. 
However, in an attempt to provide interested parties with data on the 
most recent adjustments for which we do have data, we are publishing 
data on adjustment payments that were processed by the fiscal 
intermediary or CMS during FY 2006.
    The table below includes the most recent data available from the 
fiscal intermediaries and CMS on adjustment payments that were 
adjudicated during FY 2006. As indicated above, the adjustments made 
during FY 2006 only pertain to cost reporting periods ending in years 
prior to FY 2005. Total adjustment payments given to excluded hospitals 
and units during FY 2006 are $19,451,125. The table depicts for each 
class of hospitals, in the aggregate, the number of adjustment requests 
adjudicated, the excess operating cost over ceiling, and the amount of 
the adjustment payments.

------------------------------------------------------------------------
                                            Excess cost     Adjustment
      Class of hospital          Number    over ceiling      payments
------------------------------------------------------------------------
Rehabilitation...............          4      $2,525,385      $1,352,437
Psychiatric..................         27     $22,016,987     $12,648,694
Long-Term Care...............  .........  ..............  ..............
Children's...................          2        $787,708        $726,217
Cancer.......................          3     $13,813,000      $4,261,560
Religious Nonmedical Health..  .........  ..............  ..............
Care Institution.............          7      $2,484,149        $462,217
------------------------------------------------------------------------

VII. Services Furnished to Beneficiaries in Custody of Penal 
Authorities

    Section 1862(a)(2) of the Act prohibits payment under Medicare Part 
A or Part B for any items or services for which the beneficiary has no 
legal obligation to pay, and which no other person or organization 
(such as a prepayment plan of which the beneficiary is a member) has a 
legal obligation to provide or pay for the service. Our current 
regulations at Sec.  411.4(b) specify the special conditions when 
Medicare payment may be made for services furnished to individuals in 
custody of penal authorities. These regulatory conditions include: (1) 
State or local law requires those individuals or groups of individuals 
to repay the cost of medical services they receive while in custody; 
and (2) the State or local government entity enforces the requirement 
to pay by billing all such individuals, whether or not covered by 
Medicare or any other health insurance, and by pursuing collection of 
the amounts they owe in the same way and with the same vigor that it 
pursues the collection of other debts.
    However, Sec.  411.4(b) does not define ``custody'' and does not 
clearly state that CMS will not defer to a particular State or local 
government's definition (or interpretation) of what constitutes 
``custody.'' In the FY 2008 IPPS proposed rule (72 FR 24825), we 
proposed to specify that, for purposes of Medicare payment, individuals 
who are in ``custody'' include, but are not limited to, individuals who 
are under arrest, incarcerated, imprisoned, escaped from confinement, 
under supervised release, required to reside in mental health 
facilities, required to reside in halfway houses, required to live 
under home detention, or confined completely or partially in any way 
under a penal statute or rule. We believe that this definition of 
``custody'' is in accordance with how custody has been defined by 
Federal courts for purposes of the habeas corpus protections of the 
Constitution. For example, the term ``custody'' is not limited solely 
to physical confinement. (Sanders v. Freeman, 221 F.3d 846, 850-51 (6th 
Cir. 2000).) Individuals on parole, probation, bail, or supervised 
release may be ``in custody.''
    Comment: One commenter stated that the expansion of the definition 
of ``custody'' to include individuals who have escaped from 
confinement, on parole, on probation, or released on bail places an 
unreasonable burden on hospitals. The commenter stated that there is no 
incentive for patients with any of these status designations to come 
forward and honestly disclose their status. Moreover, the commenter 
pointed out, law enforcement is not in the collection business or 
overly concerned with billing for medical services. As a result, the 
commenter believed that the burden of seeking compensation for medical 
care furnished to patients under penal authority ultimately falls back 
on the healthcare provider regardless of the Medicare provisions under 
sections 1862(a)(2) and (a)(3) of the Act. Therefore, the commenter 
recommended that CMS not expand the definition of ``custody'' unless 
there is a means to verify the official status of the patient under 
penal authority.
    Response: We are not expanding the definition of ``custody.'' As we 
indicated in the FY 2008 IPPS proposed rule, we are specifying that, 
for Medicare payment purposes, ``custody'' is defined consistent with 
how the Federal courts have defined custody and that we will not defer 
to a particular State or local government's definition (or 
interpretation) of what constitutes ``custody.'' (We note that the 
commenter has not explained why it believes we are expanding the 
definition of ``custody.'') Therefore, if a State or local government 
believes that an individual is not under ``custody'' for Medicare 
payment purposes, the State or local government should be prepared to 
prove to CMS that the Federal courts have ruled (or would rule) that 
the class or type of individual at issue is not considered (or would 
not be considered) under ``custody.''
    Moreover, CMS contractors typically receive information from the 
Social Security Administration's (SSA) Prisoner Update Processing 
System (PUPS) in order to stop payment for services furnished to 
individuals in custody of penal authorities. The SSA is required by law 
to suspend payment of social security benefits when an individual is 
incarcerated and CMS contractors use that information in order to 
identify when they should stop Medicare payment. If Medicare denies 
payment for services on the basis that the individual is in ``custody'' 
of penal authorities, the health care provider or supplier will be 
directed to seek payment from the State or local government (which is 
similar to other general payment exclusion situations such as when 
Medicare directs a

[[Page 47406]]

civilian provider or supplier to bill the Department of Veterans 
Affairs instead of Medicare for a service). Therefore, there is already 
a means in place to verify the status of these individuals and health 
care providers and suppliers will not be financially burdened by our 
clarification of the definition of ``custody'' because, in the event 
that Medicare denies payment, providers and suppliers will be directed 
to the State or local government for payment.
    Comment: Two commenters were concerned that if the proposed 
definition of ``custody'' is adopted, it would present practical 
problems for hospitals. One of the commenters stated that ``custody'' 
should not include individuals who are not under physical confinement, 
as otherwise it would be extremely difficult to identify individuals in 
``custody,'' and therefore hospitals would be required to seek criminal 
history information and do background checks on all patients being 
registered. The commenter also expects that State regulations and law 
enforcement agencies may have conflicts with the definition as well. 
The second commenter asserted that, under the proposed definition, 
unless an individual is brought in by governmental authorities, the 
treating hospital will not be able to identify many persons in custody 
(for example, those under supervised release, or required to live under 
home detention). The commenter pointed out that such individuals are 
unlikely to identify themselves, and many prison records are protected 
under Federal, State or local privacy laws. Moreover, the commenter 
added, even if the treating hospital can identify an individual as 
being in ``custody'' under CMS' new definition, it will have no way of 
knowing whether the authority that has placed the person in custody has 
a legal obligation to pay for his or her care. The commenter urged CMS 
to include a safeguard to protect hospitals that act in good faith but 
mistakenly bill Medicare for services furnished to individuals in 
custody for whom payment is not reimbursable.
    Response: As we stated in response to the previous comment, we are 
not expanding the definition of ``custody.'' Nor are we requiring that 
hospitals seek criminal histories and do background checks on all 
patients being registered. If Medicare denies payment for services on 
the basis that the individual is in ``custody'' of penal authorities, 
the provider or supplier will be directed to seek payment from the 
State or local government (which is similar to other general payment 
exclusion situations such as when Medicare directs a civilian provider 
or supplier to bill the Department of Veterans Affairs instead of 
Medicare for a service). If a State or local government believes that 
an individual is not under ``custody'' for Medicare payment purposes, 
it should be prepared to prove to Medicare that the Federal courts have 
ruled (or would rule) that the class or type of individual at issue is 
not considered (or would not be considered) under ``custody.'' 
Likewise, if a State or local government believes that it has no legal 
obligation to pay for the care provided to the individual (see 42 CFR 
411.4(b)(1) and (b)(2)), it should be prepared to prove that to 
Medicare.
    We are finalizing our proposed changes to Sec.  411.4(b), with one 
modification. In the FY 2008 IPPS proposed rule, we specified that 
individuals who are ``under supervised release'' are in ``custody''; 
however, we did not specify that individuals who are on ``medical 
furlough'' are also in ``custody'' for Medicare payment purposes. Some 
State or local governments use the term ``medical furlough'' in order 
to describe individuals who are ``under supervised release.'' 
Therefore, we are adding ``medical furlough'' to the examples of types 
of ``custody'' in order to further clarify that an individual is in 
custody, for Medicare payment purposes, if he or she is released by the 
State or local government for the purpose of receiving medical services 
(or accompanied by a police officer, other penal authority, or other 
government representative to the location where the medical services 
are furnished) and required to return to the State or local government 
facility after the medical services are furnished.

VIII. MedPAC Recommendations

    We are required by section 1886(e)(4)(B) of the Act to respond to 
MedPAC's recommendations regarding hospital inpatient payments in our 
annual proposed and final IPPS rules. We have reviewed MedPAC's March 
2007 ``Report to the Congress: Medicare Payment Policy'' and have given 
it careful consideration in conjunction with the policies set forth in 
this document. MedPAC's Recommendation 2A-1 states that, ``The Congress 
should increase payment rates for the acute inpatient and outpatient 
prospective payment systems in 2008 by the projected rate of increase 
in the hospital market basket index, concurrent with implementation of 
a quality incentive payment program.'' This recommendation is discussed 
in Appendix B to this final rule with comment period.
    Recommendation 2A-2: MedPAC recommended that, ``Concurrent with 
implementation of severity adjustment to Medicare's diagnosis related 
group payments, the Congress should reduce the indirect medical 
education adjustment in fiscal year 2008 by 1 percentage point to 4.5 
percent per 10 percent increment in the resident-to-bed ratio. The 
funds obtained from reducing the indirect medical education adjustment 
should be used to fund a quality incentive payment system.'' MedPAC 
further states that the IME adjustment is ``set above the empirical 
level which contributes to the large differences between teaching and 
nonteaching hospitals in financial performance under Medicare.'' MedPAC 
asserts that since there is no accountability for how IME funds are 
used, and teaching hospitals will benefit from implementation of the 
severity adjusted DRGs, the IME adjustment should be reduced in FY 
2008.
    Response: We note that MedPAC stated in its March 2007 Report that 
Congress made a conscious decision to fund the IME adjustment above the 
empirical level due to the concern for how teaching hospitals would 
fare under the PPS. Because the IME adjustment is set by Congress, as 
cited in section 1886(d)(5)(B) of the Act, any change to the IME 
adjustment, whether it is a 1 percentage point reduction or reduction 
of the IME adjustment to its empirical level, would require a statutory 
change. Therefore, absent a change to the IME provision in the Medicare 
statute for FY 2008, the IME adjustment will remain at the current 
level required by the statute, as specified in section IV.D. of this 
preamble.
    We did not receive any public comments regarding Recommendation 2A-
2.
    Recommendation 2A-3: MedPAC recommended that, ``The Secretary 
should improve the form and accompanying instructions for collecting 
data on uncompensated care in the Medicare cost report and require 
hospitals to report using the revised form as soon as possible.'' 
MedPAC indicated that ``accurate data on hospitals' charity care and 
bad debts are crucial to any effort to help develop a federal payment 
mechanism to help hospitals with their uncompensated care.''
    Response: MedPAC convened an ``Expert Panel on Measuring 
Uncompensated Care'' on May 5, 2005, to address concerns raised by 
stakeholders on the usefulness of the S-10 Worksheet data. CMS' 
representatives participated in the

[[Page 47407]]

discussions on this expert panel, and listened carefully to the 
concerns of MedPAC and the stakeholders about the S-10 Worksheet. 
MedPAC is recommending that we adopt the list of recommended changes to 
the S-10 Worksheet that resulted from the panel's discussion. CMS is 
currently undertaking a major update of the hospital cost report and 
will be making changes to the S-10 Worksheet form and accompanying 
instructions based on the panel's discussions with MedPAC.
    Comment: One commenter supported CMS' proposal to revise the S-10 
Worksheet in response to MedPAC's expert panel recommendations. The 
commenter stated that its members provide 25 percent of the 
uncompensated care provided in hospitals nationwide and that it 
supported CMS' efforts to expand its collection of uncompensated care 
data.
    Response: We appreciate the commenter's support of our efforts to 
improve the S-10 Worksheet and accompanying instructions for collecting 
data on uncompensated care in the Medicare cost report.
    In sections II.C. through E. of the preamble of this final rule 
with comment period, we further address the recommendations included in 
Recommendation 1 and Recommendation 3 in the March 2005 Report to 
Congress on Physician-Owned Specialty Hospitals. Recommendation 1 
relates to refining the DRGs used under the IPPS to more fully capture 
differences in severity of illness among patients; basing the DRG 
relative weights on the estimated cost of providing care rather than on 
charges; and basing the weights on the national average of hospitals' 
relative values in each DRG. Recommendation 3 recommended that the 
Secretary implement MedPAC's recommended policies over a transition 
period.
    For further information relating specifically to the MedPAC reports 
or to obtain a copy of the reports, contact MedPAC at (202) 653-7220, 
or visit MedPAC's Web site at: http://www.medpac.gov.

IX. Other Required Information

A. Requests for Data From the Public

    In order to respond promptly to public requests for data related to 
the prospective payment system, in the proposed rule, we presented our 
established process under which commenters could gain access to raw 
data on an expedited basis. Generally, the data were made available in 
computer tape or cartridge format or on diskette through the Internet 
at: http://www.cms.hhs.gov/providers/hipps. We listed the data files 
and the cost for each file, if applicable, in the proposed rule.
    Commenters interested in discussing any data used in constructing 
the proposed rule or this final rule should contact Nisha Bhat at (410) 
786 5320.

B. 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 PRA requires that we 
solicit comment on the following issues:
    <bullet> The need for the information collection and its usefulness 
in carrying out the proper functions of our agency.
    <bullet> The accuracy of our estimate of the information collection 
burden.
    <bullet> The quality, utility, and clarity of the information to be 
collected.
    <bullet> Recommendations to minimize the information collection 
burden on the affected public, including automated collection 
techniques.
    In the FY 2008 IPPS proposed rule, we solicited public comment on 
each of these issues for the following sections of this document that 
contain information collection requirements. These provisions are 
discussed in various sections of this final rule with comment period.
Special Treatment: Hospitals Located in Urban Areas and That Apply for 
Reclassifications as Rural. (Sec.  412.103)
    Section 412.103(g) states that (1) for hospitals other than rural 
referral centers (RRCs) described in paragraph (g)(2) of this section, 
the hospital may cancel its rural reclassification by submitting a 
written request to the CMS Regional Office not less than 120 days prior 
to the end of its current cost reporting period, and (2) for hospitals 
classified as RRCs under Sec.  412.96 based on rural reclassification 
under this section, the hospital may cancel its rural reclassification 
by submitting a written request to the CMS Regional Office not less 
than 120 days prior to the end of a Federal fiscal year and after being 
paid as rural for at least one 12-month cost reporting period.
    The burden associated with these requirements is the time and 
effort required for a hospital to develop, draft, and submit its 
written request for the cancellation of its rural reclassification. 
While these requirements are subject to the PRA, we believe the burden 
is exempt under 5 CFR 1320.3(c)(4). We believe that the information 
collection requirements in Sec.  412.103(g)(1) and Sec.  412.103(g)(2), 
respectively, will impact less than 10 entities. The notices will be 
submitted by individual hospitals and will be reviewed on a case-by-
case basis.
Basic Commitments. (Sec.  489.20)
    Section 489.20(u)(1) requires physician-owned hospitals, as defined 
in Sec.  489.3, to furnish notice to all patients that the hospital is 
a physician-owned hospital. The notice must be furnished at the 
beginning of their hospital stay or outpatient visit. The burden 
associated with the aforementioned requirements is the time and effort 
associated with a physician-owned hospital developing a generic notice 
and providing notice to the patients. Approximately 175 physician-owned 
hospitals must comply with this requirement. We estimate that it will 
require a hospital's general counsel 4 hours to develop a standard 
notice to be furnished to all patients upon admission as an inpatient 
or an outpatient. The total annual burden for this requirement is 700 
hours.
    In addition, we estimate that it will take 30 seconds to provide 
the notice to a patient and it will take another 30 seconds to maintain 
a copy of the disclosure in the patient's medical record. On average, 
each hospital will be required to make 1,092 disclosures per year. The 
total burden associated with the inpatient reporting and recordkeeping 
requirements in Sec.  489.20(u)(1) is 3,185 annual burden hours.
    Based on public comments received during the 60-day comment period 
for the Federal Register notice (72 FR 21024) for this information 
collection request, we revised our burden estimates to include the 
burden associated with the physician-ownership disclosure and 
recordkeeping requirement for outpatient visits. We estimate that each 
hospital will conduct 17,472 disclosures per year. As with the 
inpatient disclosure requirement, we estimate that the burden 
associated with complying with the outpatient disclosure requirement to 
be 30 seconds to disclose the information and 30 seconds to maintain a 
copy of the disclosure in the patient's medical record. We estimate the 
annual burden for the reporting and recordkeeping requirements for 
outpatient visits to be 25,480 hours, respectively, for a total of 
50,960 hours.

[[Page 47408]]

    Section 489.20(v) requires all hospitals, as defined in Sec.  
489.24(b), to furnish all patients notice, in accordance with Sec.  
482.13(b)(2), at the beginning of their hospital stay or outpatient 
visit if a doctor of medicine or a doctor of osteopathy is not present 
in the hospital 24 hours per day, 7 days per week. The notice must 
indicate how the hospital will meet the medical needs of any inpatient 
who develops an emergency medical condition, as defined in Sec.  
489.24(b), at a time when there is no physician present in the 
hospital. The burden associated with this requirement is the time and 
effort necessary for each hospital to develop a standard notice to 
furnish to its patients. We believe 2,504 hospitals will be required to 
comply with this requirement. Complying with the requirement will 
require a hospital's general counsel 4 hours to develop a standard 
notice. The total annual burden associated with the legal review and 
development of the standard notice is 10,016 hours.
    We estimate that it will take 30 seconds to provide the notice to a 
patient, and it will take another 30 seconds to maintain a copy of the 
disclosure in the patient's medical record. On average, each hospital 
will be required to make 1,092 disclosures per year. The burden 
associated with the recordkeeping and reporting requirements for 
inpatient admissions as stated in Sec.  489.20(v) is 45,573 annual 
burden hours.
    Based on public comments received during the 60-day comment period 
for the Federal Register notice (72 FR 21024) for this information 
collection request, we revised our burden estimates for Sec.  489.20(v) 
to include the burden associated with outpatient visits as well. We 
estimate that each hospital will conduct 17,472 disclosures per year. 
As with the inpatient disclosure requirement, we estimate that the 
burden associated with complying with the outpatient disclosure 
requirement to be 30 seconds to disclose the information and 30 seconds 
to maintain a copy of the disclosure in the patient's medical record. 
We estimate the annual burden for the reporting and recordkeeping 
requirements for outpatient visits to be 364,583 hours, respectively, 
for a total of 729,165 hours.

                                                   Estimated Annual Reporting and Recordkeeping Burden
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                  Inpatient
                                                                                                   Burden per     admission    Outpatient   Total annual
           Regulation section                   OMB control No.        Respondents    Responses     response       burden     visit burden     burden
                                                                                                     (hours)       (hours)       (hours)       (hours)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Sec.   489.20(u)........................  0938-New..................           175           175             4  ............  ............           700
                                                                                       3,248,875       .016667         3,185        50,960        54,145
Sec.   489.20(v)........................  0938-New..................         2,504         2,504             4  ............  ............        10,016
                                                                                      49,735,635       .016667        45,573       729,165       774,738
--------------------------------------------------------------------------------------------------------------------------------------------------------
    Total Annual Burden (Inpatient+Outpatient)............................................................................................       839,599
--------------------------------------------------------------------------------------------------------------------------------------------------------

    This final rule imposes collection of information requirements as 
outlined in the regulation text and specified above. However, this 
final rule also makes reference to several associated information 
collections that are not discussed in the regulation text. The 
following is a discussion of these collections, which have already 
received the Office of Management and Budget's (OMB) approval.
Add-on Payments for New Services and Technologies
    Section II.J.1. of the preamble of this final rule with comment 
period discusses add-on payments for new services and technologies. 
Specifically, this section states that applicants for add-on payments 
for new medical services or technologies for FY 2009 must submit a 
formal request. A formal request includes a full description of the 
clinical applications of the medical service or technology and the 
results of any clinical evaluations demonstrating that the new medical 
service or technology represents a substantial clinical improvement. In 
addition, the request must contain a significant sample of the data to 
demonstrate that the medical service or technology meets the high cost 
threshold.
    We also detailed the burden associated with this requirement in a 
final rule published in the Federal Register on September 7, 2001 (66 
FR 46902). As stated in that final rule, we believe the associated 
burden is exempt from the PRA as stipulated under 5 CFR 1320.3(h)(6). 
Collection of the information for this requirement will be conducted on 
an individual case-by-case basis.
Occupational Mix Adjustment to the FY 2008 Index (Hospital Wage Index 
Occupational Mix Survey)
    Section III. of the preamble of this final rule with comment period 
details the changes to the hospital wage index for FY 2008. 
Specifically, section III.C. addresses the occupational mix adjustment 
to the FY 2008 index. While the preamble does not contain any new 
information collection requirements, it is important to note that there 
is an OMB approved collection associated with the hospital wage index.
    As stated in section III.C. of the preamble of this final rule with 
comment period, section 304(c) of Pub. L. 106-554 amended section 
1886(d) (3) (E) of the Act to require CMS to collect data at least once 
every 3 years on the occupational mix of employees for each short term, 
acute care hospital participating in the Medicare program, in order to 
construct an occupational mix adjustment to the wage index. We collect 
the data via the occupational mix survey.
    The burden associated with this information collection request is 
the time and effort required to collect and submit the data in the 
Hospital Wage Index Occupational Mix Survey to CMS. While this burden 
is subject to the PRA, it is already approved under OMB control number 
0938-0907, with an expiration date of May 31, 2009.
Revisions to the Wage Index Based on Hospital Redesignations (Medicare 
Geographic Classification Review Board)
    As noted in section III.I of the preamble of this final rule with 
comment period, section 1886(d)(10) of the Act established the MGCRB, 
an entity that has the authority to accept IPPS hospital applications 
requesting geographic reclassification for wage index or standardized 
payment amounts and to issue decisions on these requests. It is 
important for CMS to ensure the accuracy of the MGCRB decisions and 
remain apprised of potential payment impacts. Our regulations at Sec.  
412.256 require a hospital to submit a copy of its MGCRB application to 
CMS.

[[Page 47409]]

    The burden associated with this requirement is the time and effort 
associated with a hospital compiling and submitting a copy of its MGCRB 
application to CMS. While this requirement is subject to the PRA, the 
burden is approved under OMB control number 0938-0573, with an 
expiration date of November 30, 2008.
Reporting of Hospital Quality Data for Annual Hospital Payment Update
    As noted in section IV.A.1 of the preamble of this final rule with 
comment period, section 5001(a) of the DRA sets out new requirements 
for the RHQDAPU program. The RHQDAPU program was established to 
implement section 501(b) of Pub. L. 108-173, thereby expanding our 
Hospital Quality Initiative. The RHQDAPU program originally consisted 
of a ``starter set'' of 10 quality measures. Hospitals participating in 
the hospital quality initiative submit their quality data on the 10 
measures to receive an increase in their Medicare Annual Payment 
Update. The Office of Management and Budget approved the collection of 
data associated with the original starter set of quality measures under 
OMB control number 0938-0918, with an expiration date of January 31, 
2010.
    However, we recently submitted a new information collection request 
containing additional quality measures to OMB for approval. The new 
measures collect data for the Surgical Care Improvement Project (SCIP) 
and mortality measures. We announced and sought public comment on the 
information collection request in both 60-day and 30-day Federal 
Register notices published on October 13, 2006 (71 FR 60532), and 
December 22, 2006 (71 FR 77026), respectively. The revised information 
collection request is currently under review at OMB.
    Section IV.A.1 of the preamble of this final rule with comment 
period also discusses the use of the HCAHPS survey to capture quality 
data. The survey is designed to produce comparable data on the 
patient's perspective on care that allows objective and meaningful 
comparisons between hospitals on domains that are important to 
consumers. The HCAHPS survey is currently approved under OMB control 
number 0938-0981, with an expiration date of December 31, 2007.
    Section IV.A.2.h of the preamble of this final rule with comment 
period addresses the reconsideration and appeal procedures for a 
hospital that we believe did not meet the RHQDAPU program requirements. 
If a hospital disagrees with our determination, it may submit a written 
request to us requesting that we reconsider our decision. The 
hospital's letter must explain the reasons it believes it did meet the 
RHQDAPU program requirements. While this is a reporting requirement, 
the burden associated with it is not subject to the PRA under 5 CFR 
1320.4(a)(2). The burden associated with information collection 
requirements imposed subsequent to an administrative action is not 
subject to the PRA.
    If you comment on these information collection and recordkeeping 
requirements, please mail copies directly to the following:

Centers for Medicare & Medicaid Services, Office of Strategic 
Operations and Regulatory Affairs, Regulations Development Group, Attn: 
William N. Parham, III, CMS-1533-F Room C4-26-05, 7500 Security 
Boulevard, Baltimore, MD 21244-1850; and
Office of Information and Regulatory Affairs, Office of Management and 
Budget, Room 10235, New Executive Office Building, Washington, DC 
20503, Attn: Carolyn Lovett, CMS Desk Officer, CMS-1533-F, <a href="/cdn-cgi/l/email-protection#5e3d3f2c31322730013231283b2a2a1e31333c703b312e70393128"><span class="__cf_email__" data-cfemail="6b080a19040712053407041d0e1f1f2b040609450e041b450c041d">[email protected]</span></a>. Fax (202) 395 6974.

C. Waiver of Notice of Proposed Rulemaking

    We ordinarily publish a notice of proposed rulemaking in the 
Federal Register to provide a period for public comment before the 
provisions of a notice such as this take effect. However, we can waive 
this procedure 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 notice issued.
    We find it unnecessary to undertake notice and comment rulemaking 
for the additional change to 42 CFR 412.106(b)(2)(iii) discussed in 
section IV.E. of the preamble of this final rule with comment period, 
because this notice merely provides technical corrections to the 
regulations and does not make any substantive changes to the 
regulations or our existing policy. Therefore, under 5 U.S.C. 
553(b)(B), for good cause, we are waiving notice and comment 
procedures.
    In addition, as we discussed in section II.I. of the preamble of 
this final rule with comment period, we proposed in the FY 2008 IPPS 
proposed rule ((72 FR 24755 through 24771) to adopt the MS-LTC-DRGs as 
the patient classification system for the LTCH PPS beginning with 
discharges on or after October 1, 2007. However, in the proposed rule, 
we omitted proposed changes to the regulation text reflecting the 
proposed change from LTC-DRGs to MS-LTC-DRGs. Although we did not 
propose regulation text, as referenced above, our comprehensive 
descriptions of our proposed adoption of the MS-LTC-DRGs in the 
preamble of the proposed rule provided the public with detailed 
specifics of our proposed policy which was subject to notice and 
comment procedures. We are finalizing the proposed adoption of the MS-
LTC-DRGs for use in the LTCH PPS beginning with discharges on or after 
October 1, 2007, and we are amending the definitions in the regulations 
at Sec.  412.503. By adding this omitted regulation text, we are 
ensuring that the CFR accurately reflects the policies adopted in the 
FY 2008 IPPS final rule. We find that undertaking further notice and 
comment procedures for the purposes of adding conforming definitions in 
the LTCH PPS regulations on this policy is unnecessary as the 
regulation text merely implements and reflects our proposed policy and 
final policy which was subject previously to notice and comment 
procedures. Therefore, under 5 U.S.C. 553(b)(B), for good cause, we are 
waiving notice and comment procedures.

List of Subjects

42 CFR Part 411

    Kidney diseases, Medicare, Physician referral, Reporting and 
recordkeeping requirements.

42 CFR Part 412

    Administrative practice and procedure, Health facilities, Medicare, 
Puerto Rico, Reporting and recordkeeping requirements.

42 CFR Part 413

    Health facilities, Kidney diseases, Medicare, Puerto Rico, 
Reporting and recordkeeping requirements.

42 CFR Part 489

    Health facilities, Medicare, Reporting and recordkeeping 
requirements.

0
For the reasons stated in the preamble of this final rule, the Centers 
for Medicare & Medicaid Services is amending 42 CFR Chapter IV as 
follows:

PART 411--EXCLUSIONS FROM MEDICARE AND LIMITATIONS ON MEDICARE 
PAYMENT

0
1. The authority citation for Part 411 continues to read as follows:

    Authority: Secs. 1102, 1860D-4(e)(6), 1871, and 1877(b)(4) and 
(5) of the Social Security Act (42 U.S.C. 1302, 1395w-10(e)(6), 
1395hh, and 1395nn(b)(4) and (5)).


[[Page 47410]]



0
2. Section 411.4 is amended by revising the introductory text of 
paragraph (b) to read as follows:


Sec.  411.4  Services for which neither the beneficiary nor any other 
person is legally obligated to pay.

* * * * *
    (b) Special conditions for services furnished to individuals in 
custody of penal authorities. Individuals who are in custody include, 
but are not limited to, individuals who are under arrest, incarcerated, 
imprisoned, escaped from confinement, under supervised release, on 
medical furlough, required to reside in mental health facilities, 
required to reside in halfway houses, required to live under home 
detention, or confined completely or partially in any way under a penal 
statute or rule. Payment may be made for services furnished to 
individuals or groups of individuals who are in the custody of police 
or other penal authorities or in the custody of a government agency 
under a penal statute only if the following conditions are met:
* * * * *

PART 412--PROSPECTIVE PAYMENT SYSTEMS FOR INPATIENT HOSPITAL 
SERVICES

0
3. The authority citation for Part 412 is revised to read as follows:

    Authority: Secs. 1102 and 1871 of the Social Security Act (42 
U.S.C. 1302 and 1395hh), and sec. 124 of Pub. L. 106-113 (113 Stat. 
1501A-332).

0
4. Section 412.2 is amended by adding a new paragraph (g) to read as 
follows:


Sec.  412.2  Basis for payment.

* * * * *
    (g) Payment adjustment for certain replaced devices. CMS makes a 
payment adjustment for certain replaced devices, as provided under 
Sec.  412.89.

0
5. Section 412.4 is amended by--
0
a. Revising paragraphs (d)(3)(ii)(B) and (d)(3)(ii)(C).
0
b. Adding a new paragraph (d)(3)(ii)(D).
0
c. Revising paragraph (f)(3).
0
d. Revising the introductory text of paragraph (f)(5).
0
e. Revising paragraph (f)(5)(i).
0
f. Revising paragraph (f)(5)(iv).
0
g. Adding a new paragraph (f)(6).
    The revisions and additions read as follows:


Sec.  412.4  Discharges and transfers.

* * * * *
    (d) * * *
    (3) * * *
* * * * *
    (ii) * * *
    (B) The proportion of short-stay discharges to postacute care to 
total discharges in the DRG exceeds the 55th percentile for all DRGs;
    (C) The DRG is paired with a DRG based on the presence or absence 
of a comorbidity or a complication or major cardiovascular condition 
that meets the criteria specified under paragraphs (d)(3)(ii)(A) and 
(d)(3)(ii)(B) of this section; and
    (D) In the case of MS-DRGs that share the same base MS-DRG, if one 
MS-DRG meets the criteria specified under paragraph (d)(3)(ii)(B) of 
this section, every MS-DRG that shares the same base MS-DRG is a 
qualifying DRG.
* * * * *
    (f) * * *
    (3) Transfer assigned to DRG for newborns that die or are 
transferred to another hospital. If a transfer is classified into CMS 
DRG 385 (Neonates, Died or Transferred) prior to October 1, 2007, or 
into MS-DRG 789 (Neonates, Died or Transferred to Another Acute Care 
Facility) on or after October 1, 2007, the transferring hospital is 
paid in accordance with Sec.  412.2(b).
* * * * *
    (5) Special rule for DRGs meeting specific criteria. For discharges 
occurring on or after October 1, 2005, and prior to October 1, 2007, a 
hospital that transfers an inpatient under the circumstances described 
in paragraph (c) of this section is paid using the provisions of 
paragraphs (f)(2)(i) and (f)(2)(ii) of this section if the transfer 
case is assigned to one of the DRGs meeting the following criteria:
    (i) The DRG meets the criteria specified in paragraph (d)(3)(i) or 
(d)(3)(ii) of this section.
* * * * *
    (iv) If a DRG is paired with a DRG based on the presence or absence 
of a comorbidity or complication or a major cardiovascular complication 
that meets the criteria specified in paragraphs (f)(5)(i) through 
(f)(5)(iii) of this section, that DRG will also be paid under the 
provisions of paragraphs (f)(2)(i) and (f)(2)(ii) of this section.
    (6) Special rule for DRGs meeting specific criteria. For discharges 
occurring on or after October 1, 2007, a hospital that transfers an 
inpatient under the circumstances described in paragraph (c) of this 
section is paid using the provisions of paragraphs (f)(2)(i) and 
(f)(2)(ii) of this section if the transfer case is assigned to one of 
the DRGs meeting the following criteria:
    (i) The DRG meets the criteria specified in paragraph (d)(3)(i) or 
(d)(3)(ii) of this section;
    (ii) The average charges of the 1-day discharge cases in the DRG 
must be at least 50 percent of the average charges for all cases in the 
DRG; and
    (iii) The geometric mean length of stay for the DRG is greater than 
4 days.
    (iv) If a DRG is part of an MS-DRG group that meets the criteria 
specified in paragraphs (f)(6)(i) through (f)(6)(iii) of this section, 
that DRG will also be paid under the provisions of paragraphs (f)(2)(i) 
and (f)(2)(ii) of this section.

0
6. Section 412.64 is amended by--
0
a. Revising paragraph (b)(1)(ii)(B).
0
b. In paragraph (b)(3), designating the existing text as (b)(3)(i) and 
adding a new paragraph (b)(3)(ii).
0
c. Adding a new paragraph (e)(3).
0
d. Revising paragraph (i)(2).
0
e. In the introductory text of paragraph (h)(4), removing the date 
``September 30, 2007'' and adding in its place ``September 30, 2008''.
    The revisions read as follows:


Sec.  412.64  Federal rates for inpatient operating costs for Federal 
fiscal year 2005 and subsequent fiscal years.

* * * * *
    (b) * * *
    (1) * * *
    (ii) * * *
    (B) For discharges occurring on or after October 1, 1983, and 
before October 1, 2007, the following New England counties are deemed 
to be parts of urban areas under section 601(g) of the Social Security 
Amendments of 1983 (Pub. L. 98-21, 42 U.S.C. 1395ww (note); Litchfield 
County, Connecticut; York County, Maine; Sagadahoc County, Maine; 
Merrimack County, New Hampshire; and Newport County, Rhode Island.
* * * * *
    (3) (i) * * *
    (ii) For discharges occurring on or after October 1, 2007, 
hospitals in the following New England counties, if not already located 
in an urban area, are deemed to be located in urban areas under section 
601(g) of the Social Security Amendments of 1983 (Pub. L. 98-21, 42 
U.S.C. 1395ww (note): Litchfield County, Connecticut; York County, 
Maine; Sagadahoc County, Maine; Merrimack County, New Hampshire; and 
Newport County, Rhode Island.
* * * * *
    (e) * * *
    (3) To the extent CMS determines that changes to the DRG 
classification and recalibrations of the DRG relative weights for a 
previous year (or estimates that such adjustments for a future fiscal 
year) did (or are likely to) result in a change in aggregate payments 
under this subsection during the fiscal year that are a result of 
changes in coding or

[[Page 47411]]

classification of discharges that do not reflect real changes in case 
mix, CMS may adjust the standardized amount for subsequent fiscal years 
so as to eliminate the effect of such coding and classification 
changes.
* * * * *
    (i) * * *
    (2) Amount of adjustment. A hospital located in a county that meets 
the criteria under paragraphs (i)(1)(i) through (i)(1)(iii) of this 
section will receive an increase in its wage index that is equal to a 
weighted average of the difference between the postreclassified wage 
index of the MSA (or MSAs) with the higher wage index (or wage indices) 
and the postreclassified wage index of the MSA or rural statewide area 
in which the qualifying county is located, weighted by the overall 
percentage of the hospital employees residing in the qualifying county 
who are employed in any MSA with a higher wage index.
* * * * *

0
7. The heading of Subpart F is revised to read as follows:

Subpart F--Payments for Outlier Cases, Special Treatment Payment 
for New Technology, and Payment Adjustment for Certain Replaced 
Devices

0
8. Section 412.88 is amended by revising the introductory text of 
paragraph (a)(2) to read as follows:


Sec.  412.88  Additional payment for new medical service or technology.

    (a) * * *
    (2) If the costs of the discharge (determined by applying the 
operating cost to charge ratios as described in Sec.  412.84(h)) exceed 
the full DRG payment, an additional amount equal to the lesser of--
* * * * *

0
9. A new undesignated center heading and a new Sec.  412.89 are added 
under Subpart F following Sec.  412.88 to read as follows:

Payment Adjustment for Certain Replaced Devices


Sec.  412.89  Payment adjustment for certain replaced devices.

    (a) General rule. For discharges occurring on or after October 1, 
2007, the amount of payment for a discharge described in paragraph (b) 
of this section is reduced when--
    (1) A device is replaced without cost to the hospital;
    (2) The provider received full credit for the cost of a device; or
    (3) The provider receives a credit equal to 50 percent or more of 
the cost of the device.
    (b) Discharges subject to payment adjustment. (1) Payment is 
reduced in accordance with paragraph (a) of this section only if the 
implantation of the device determines the DRG assignment.
    (2) CMS lists the DRGs that qualify under paragraph (b)(1) of this 
section in the annual final rule for the hospital inpatient prospective 
payment system.
    (c) Amount of reduction. (1) For a device provided to the hospital 
without cost, the cost of the device is subtracted from the DRG 
payment.
    (2) For a device for which the hospital received a full or partial 
credit, the amount credited is subtracted from the DRG payment.

0
10. Section 412.96 is amended by adding a new paragraph (g)(4), to read 
as follows:


Sec.  412.96  Special treatment: Referral centers.

* * * * *
    (g) * * *
    (4) A hospital that submits a written request on or after October 
1, 2007, to cancel its reclassification under Sec.  412.103(g) is 
deemed to have cancelled its status as a rural referral center 
effective on the same date the cancellation under Sec.  412.103(g) 
takes effect. The provision of this paragraph (g)(4) applies to 
hospitals that qualify as rural referral centers under Sec.  412.96 
based on rural status acquired under Sec.  412.103.
* * * * *

0
11. Section 412.103 is amended by revising paragraph (g) to read as 
follows:


Sec.  412.103  Special treatment: Hospitals located in urban areas and 
that apply for reclassifications as rural.

* * * * *
    (g) Cancellation of classification--(1) Hospitals other than rural 
referral centers. Except as provided in paragraph (g)(2) of this 
section--
    (i) A hospital may cancel its rural reclassification by submitting 
a written request to the CMS Regional Office not less than 120 days 
prior to the end of its current cost reporting period.
    (ii) The hospital's cancellation of the classification is effective 
beginning with the next full cost reporting period.
    (2) Hospitals classified as rural referral centers. For a hospital 
that was classified as a rural referral center under Sec.  412.96 based 
on rural reclassification under this section--
    (i) A hospital may cancel its rural reclassification by submitting 
a written request to the CMS Regional Office not less than 120 days 
prior to the end of a Federal fiscal year and after being paid as rural 
for at least one 12-month cost reporting period.
    (ii) The hospital's cancellation of the classification is not 
effective until it has been paid as rural for at least one 12-month 
cost reporting period, and not until the beginning of the Federal 
fiscal year following such 12-month cost reporting period.
    (iii) The provisions of paragraphs (g)(2)(i) and (g)(2)(ii) of this 
section are effective for all written requests submitted by hospitals 
on or after October 1, 2007, to cancel rural reclassifications.

0
12. Section 412.106 is amended by--
0
a. Revising paragraph (b)(2)(i).
0
b. Revising paragraph (b)(2)(iii).
    The revisions read as follows:


Sec.  412.106  Special treatment: Hospitals that serve a 
disproportionate share of low-income patients.

* * * * *
    (b) * * *
    (2) * * *
    (i) Determines the number of patient days that--
    (A) Are associated with discharges occurring during each month; and
    (B) Are furnished to patients who during that month were entitled 
to both Medicare Part A (or Medicare Advantage (Part C)) and SSI, 
excluding those patients who received only State supplementation;
* * * * *
    (iii) Divides the number determined under paragraph (b)(2)(ii) of 
this section by the total number of days that--
    (A) Are associated with discharges that occur during that period; 
and
    (B) Are furnished to patients entitled to Medicare Part A (or 
Medicare Advantage (Part C)).
* * * * *

0
13. Section 412.230 is amended by adding a new paragraph (d)(2)(v) to 
read as follows:


Sec.  412.230  Criteria for an individual hospital seeking 
redesignation to another rural area or an urban area.

* * * * *
    (d) * * *
    (1) * * *
    (2) * * *
    (v) For applications submitted for reclassification effective in FY 
2009 and thereafter, a campus of a multicampus hospital that is located 
in a geographic area different from the area associated with the 
provider number of the entire multicampus hospital may seek 
reclassification to another CBSA using the composite wage data of the 
entire multicampus hospital as its hospital-specific data.
* * * * *

[[Page 47412]]


0
14. Section 412.232 is amended by adding a new paragraph (d)(2)(iii), 
to read as follows:


Sec.  412.232  Criteria for all hospitals in a rural county seeking 
urban redesignation.

* * * * *
    (d) * * *
    (1) * * *
    (2) * * *
    (iii) For redesignations effective beginning FY 2009, the wage data 
of an individual campus of a multicampus hospital will be determined by 
allocating, on the basis of full-time equivalent staff or discharges, 
the wage data of the entire multicampus hospital between or among the 
individual campuses of the multicampus hospital. The provision of this 
paragraph (d)(2)(iii) applies only in the case where an individual 
campus is located in a geographic area different from the area 
associated with the provider number of the entire multicampus hospital.

0
15. Section 412.234 is amended by revising paragraph (c) to read as 
follows:


Sec.  412.234  Criteria for all hospitals in an urban county seeking 
redesignation to another urban area.

* * * * *
    (c) Appropriate wage data. (1) The hospitals must submit 
appropriate wage data as provided for in Sec.  412.230(d)(2).
    (2) For redesignations effective beginning FY 2009, the appropriate 
wage data of an individual campus located in a geographic area 
different from the area associated with the provider number of the 
entire multicampus hospital are the wage data described in Sec.  
412.232(d)(2)(iii).

0
16. Section 412.316 is amended by--
0
a. Revising the introductory text of paragraph (b).
0
b. Revising paragraph (b)(2).
0
c. Revising paragraph (b)(3).
    The revisions read as follows:


Sec.  412.316  Geographic adjustment factor.

* * * * *
    (b) Large urban location. For discharges occurring on or before 
September 30, 2007, CMS provides an additional payment to a hospital 
located in a large urban area equal to 3.0 percent of what would 
otherwise be payable to the hospital based on the Federal rate.
* * * * *
    (2) For discharges occurring on or after October 1, 2004, and 
before October 1, 2007, the definition of large urban areas under Sec.  
412.63(c)(6) continues be in effect for purposes of the payment 
adjustment under this section, based on the geographic classification 
under Sec.  412.64, except as provided for in paragraph (b)(3) of this 
section.
    (3) For purposes of this section, the geographic classifications 
specified under Sec.  412.64 apply, except that, effective for 
discharges occurring on or after October 1, 2006, and before October 1, 
2007, for an urban hospital that is reclassified as rural as set forth 
in Sec.  412.103, the geographic classification is rural.
* * * * *

0
17. Section 412.322 is amended by adding new paragraphs (c) and (d) to 
read as follows:


Sec.  412.322  Indirect medical education adjustment factor.

* * * * *
    (c) Payment adjustment factor for FY 2009. For discharges occurring 
on or after October 1, 2008, and before October 1, 2009, the indirect 
teaching adjustment factor equals one-half the amount computed under 
paragraph (b) of this section.
    (d) Payment adjustment factor for FY 2010 and subsequent fiscal 
years. For discharges occurring on or after October 1, 2009, CMS makes 
no separate payment for indirect teaching medical education under the 
prospective payment system for inpatient capital costs.

0
18. Section 412.503 is amended by revising the definition of ``LTC-
DRG'' and adding a definition of ``MS-LTC-DRG'' in alphabetical order, 
to read as follows:


Sec.  412.503  Definitions.

* * * * *
    LTC-DRG stands for the diagnosis-related group used to classify 
patient discharges from a long-term care hospital based on clinical 
characteristics and average resource use, for prospective payment 
purposes. Effective October 1, 2007, long-term care hospital patient 
discharges occurring on or after October 1, 2007, are classified by a 
severity-adjusted patient classification system, the MS-LTC-DRGs. Any 
reference to the term ``LTC-DRG'' shall be considered a reference to 
the term ``MS-LTC-DRG'' when applying the provisions of this subpart 
for policy descriptions and payment calculations for discharges from a 
long-term care hospital occurring on or after October 1, 2007.
    MS-LTC-DRG stands for the severity-adjusted diagnosis-related group 
used to classify patient discharges from a long-term care hospital 
based on clinical characteristics and average resource use, for 
prospective payment purposes for discharges from a long-term care 
hospital occurring on or after October 1, 2007.
* * * * *

PART 413--PRINCIPLES OF REASONABLE COST REIMBURSEMENT; PAYMENT FOR 
END-STAGE RENAL DISEASE SERVICES; PROSPECTIVELY DETERMINED PAYMENT 
RATES FOR SKILLED NURSING FACILITIES

0
19. The authority citation for Part 413 is revised to read as follows:

    Authority: Secs. 1102, 1812(d), 1814(b), 1815, 1833(a), (i), and 
(n), 1861(v), 1871, 1881, 1883, and 1886 of the Social Security Act 
(42 U.S.C. 1302, 1395d(d), 1395f(b), 1395g, 1395l(a), (i), and (n), 
1395x(v), 1395hh, 1395rr, 1395tt, and 1395ww); and sec. 124 of Pub. 
L. 106-133 (113 Stat. 1501A-332).


0
20. Section 413.75(b) is amended by--
0
a. Adding in alphabetical order a definition of ``orientation 
activities''.
0
b. Revising the definition of ``patient care activities''.
    The addition and revision read as follows:


Sec.  413.75  Direct GME payments: General requirements.

* * * * *
    (b) * * *
    Orientation activities means activities that are principally 
designed to prepare an individual for employment as a resident in a 
particular setting, or for participation in a particular specialty 
program and patient care activities associated with that particular 
specialty program.
    Patient care activities means the care and treatment of particular 
patients, including services for which a physician or other 
practitioner may bill, and orientation activities as defined in this 
section.
* * * * *

PART 489--PROVIDER AGREEMENTS AND SUPPLIER APPROVAL

0
21. The authority citation for Part 489 is amended to read as follows:

    Authority: Secs. 1102, 1819, 1820(e), 1861, 1864(m), 1866, 1869, 
and 1871 of the Social Security Act (42 U.S.C. 1302, 1395i-3, 1395x, 
1395aa(m), 1395cc, 1395ff, and 1395hh).


0
22. Section 489.3 is amended by adding a definition of ``physician-
owned hospital'' in alphabetical order to read as follows:


Sec.  489.3  Definitions.

* * * * *
    Physician-owned hospital means any participating hospital (as 
defined in Sec.  489.24) in which a physician or physicians have an 
ownership or investment interest. The ownership or investment interest 
may be through equity, debt, or other means, and

[[Page 47413]]

includes an interest in an entity that holds an ownership or investment 
interest in the hospital. This definition does not include a hospital 
with physician ownership or investment interests that satisfies the 
requirements at Sec.  411.356(a) or (b) of this chapter.

0
23. Section 489.12 is amended by--
0
a. Revising paragraph (a)(2).
0
b. Redesignating paragraph (a)(3) as paragraph (a)(4).
0
c. Adding a new paragraph (a)(3).
    The revision and addition read as follows:


Sec.  489.12  Decision to deny an agreement.

    (a) * * *
    (2) The prospective provider has failed to disclose ownership and 
control interests in accordance with Sec.  420.206 of this chapter;
    (3) The prospective provider is a physician-owned hospital as 
defined in Sec.  489.3 and does not have procedures in place for making 
physician ownership disclosures to patients in accordance with Sec.  
489.20(u); or
* * * * *

0
24. Section 489.20 is amended by adding new paragraphs (u) and (v) to 
read as follows:


Sec.  489.20  Basic commitments.

* * * * *
    (u) In the case of a physician-owned hospital as defined in Sec.  
489.3 to furnish written notice to all patients at the beginning of 
their hospital stay or outpatient visit that the hospital is a 
physician-owned hospital in order to assist the patients in making 
informed decisions regarding their care, in accordance with Sec.  
482.13(b)(2) of this subchapter. The notice should disclose, in a 
manner reasonably designed to be understood by all patients, the fact 
that the hospital meets the Federal definition of a physician-owned 
hospital specified in Sec.  489.3 and that the list of the hospital's 
physician owners or investors is available upon request. For the 
purposes of this paragraph, the hospital stay or outpatient visit 
begins with the provision of a package of information regarding 
scheduled preadmission testing and registration for a planned hospital 
admission for inpatient care or outpatient service.
    (v) In the case of a hospital as defined in Sec.  489.24(b), to 
furnish written notice to all patients at the beginning of their 
hospital stay or outpatient visit if a doctor of medicine or a doctor 
of osteopathy is not present in the hospital 24 hours per day, 7 days 
per week, in order to assist the patients in making informed decisions 
regarding their care, in accordance with Sec.  482.13(b)(2) of this 
subchapter. The notice must indicate how the hospital will meet the 
medical needs of any patient who develops an emergency medical 
condition, as defined in Sec.  489.24(b), at a time when there is no 
physician present in the hospital. For purposes of this paragraph, the 
hospital stay or outpatient visit begins with the provision of a 
package of information regarding scheduled preadmission testing and 
registration for a planned hospital admission for inpatient care or 
outpatient service.

0
25. Section 489.24 is amended by revising paragraph (a)(2) to read as 
follows:


Sec.  489.24  Special responsibilities of Medicare hospitals in 
emergency cases.

    (a) * * *
    (2) Nonapplicability of provisions of this section. Sanctions under 
this section for an inappropriate transfer during a national emergency 
or for the direction or relocation of an individual to receive medical 
screening at an alternate location do not apply to a hospital with a 
dedicated emergency department located in an emergency area, as 
specified in section 1135(g)(1) of the Act. A waiver of these sanctions 
is limited to a 72 hour period beginning upon the implementation of a 
hospital disaster protocol, except that, if a public health emergency 
involves a pandemic infectious disease (such as pandemic influenza), 
the waiver will continue in effect until the termination of the 
applicable declaration of a public health emergency, as provided for by 
section 1135(e)(1)(B) of the Act.
* * * * *

0
26. Section 489.53 is amended by--
0
a. Redesignating paragraph (c) and (d) as paragraphs (d) and (e), 
respectively.
0
b. Adding a new paragraph (c).
0
c. In newly redesignated paragraph (d)(1), removing the cross reference 
``paragraph (c)(2) of this section'' and adding the reference 
``paragraph (d)(2) of this section'' in its place.
    The revisions and additions read as follows:


Sec.  489.53  Termination by CMS.

* * * * *
    (c) Termination of agreements with physician-owned hospitals. In 
the case of a physician-owned hospital, as defined at Sec.  489.3, CMS 
may terminate the provider agreement if the hospital failed to comply 
with the requirements of Sec.  489.20(u).
* * * * *

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

    Dated: July 26, 2007.
Herb B. Kuhn,
Acting Deputy Administrator, Centers for Medicare & Medicaid Services.
    Dated: July 27, 2007.
Michael O. Leavitt,
Secretary.

    [Editorial Note: The following Addendum and appendixes will not 
appear in the Code of Federal Regulations.]

Addendum--Schedule of Standardized Amounts, Update Factors, and Rate of 
Increase Percentages Effective With Cost Reporting Periods Beginning on 
or After October 1, 2007

I. Summary and Background

    In this Addendum, we are setting forth the methods and data we used 
to determine the prospective payment rates for Medicare hospital 
inpatient operating costs and Medicare hospital inpatient capital-
related costs. We are also setting forth the rate-of-increase 
percentages for updating the target amounts for certain hospitals and 
hospital units excluded from the IPPS. In general, except for SCHs, 
MDHs, and hospitals located in Puerto Rico, each hospital's payment per 
discharge under the IPPS is based on 100 percent of the Federal 
national rate, also known as the national adjusted standardized amount. 
This amount reflects the national average hospital cost per case from a 
base year, updated for inflation.
    SCHs are paid based on whichever of the following rates yields the 
greatest aggregate payment: the Federal national rate; the updated 
hospital-specific rate based on FY 1982 costs per discharge; the 
updated hospital-specific rate based on FY 1987 costs per discharge; or 
the updated hospital-specific rate based on FY 1996 costs per 
discharge.
    Under section 1886(d)(5)(G) of the Act, MDHs historically have been 
paid based on the Federal national rate or, if higher, the Federal 
national rate plus 50 percent of the difference between the Federal 
national rate and the updated hospital-specific rate based on FY 1982 
or FY 1987 costs per discharge, whichever was higher. (MDHs did not 
have the option to use their FY 1996 hospital-specific rate.) However, 
section 5003(a)(1) of Pub. L. 109-171 extended and modified the MDH 
special payment provision which was previously set to expire on October 
1, 2006, to include discharges occurring on or after October 1, 2006, 
but before October 1, 2011. Under section 5003(b) of Pub. L. 109-171, 
if the change results in an increase to an MDH's target amount, an MDH 
must rebase its hospital-specific rates to its FY 2002 cost report. 
Section 5003(c) of Pub. L. 109-171 further required that

[[Page 47414]]

MDHs would now be paid based on the Federal national rate or, if 
higher, the Federal national rate plus 75 percent of the difference 
between the Federal national rate and the updated hospital-specific 
rate. Further, based on the provisions of section 5003(d) of Pub. L. 
109-171, MDHs are no longer subject to the 12-percent cap on their DSH 
payment adjustment factor.
    For hospitals located in Puerto Rico, the payment per discharge is 
based on the sum of 25 percent of a Puerto Rico rate that reflects the 
base year average costs per case of Puerto Rico hospitals and 75 
percent of the Federal national rate. (See section II.D.3. of this 
Addendum of this final rule with comment period for a complete 
description.)
    As discussed below in section II. of the Addendum to this final 
rule with comment period, we are finalizing our decision to make 
changes in the determination of the prospective payment rates for 
Medicare inpatient operating costs for FY 2008. In section III. of the 
Addendum to this final rule with comment period, we discuss our policy 
changes for determining the prospective payment rates for Medicare 
inpatient capital-related costs for FY 2008. Section IV. of the 
Addendum to this final rule with comment period sets forth our changes 
for determining the rate-of-increase limits for certain hospitals 
excluded from the IPPS for FY 2008. The tables to which we refer in the 
preamble of this final rule with comment period are presented in 
section V. of the Addendum of this final rule with comment period.

II. Changes to Prospective Payment Rates for Hospital Inpatient 
Operating Costs for FY 2008

    The basic methodology for determining prospective payment rates for 
hospital inpatient operating costs for FY 2005 and subsequent fiscal 
years is set forth at Sec.  412.64. The basic methodology for 
determining the prospective payment rates for hospital inpatient 
operating costs for hospitals located in Puerto Rico for FY 2005 and 
subsequent fiscal years is set forth at Sec. Sec.  412.211 and 412.212. 
Below we discuss the factors used for determining the prospective 
payment rates.
    In summary, the standardized amounts set forth in Tables 1A, 1B, 
and 1C, of section VI. of the Addendum to this final rule with comment 
period reflect--
    <bullet> Equalization of the standardized amounts for urban and 
other areas at the level computed for large urban hospitals during FY 
2004 and onward, as provided for under section 1886(d)(3)(A)(iv) of the 
Act, updated by the applicable percentage increase required under 
sections 1886(b)(3)(B)(i)(XX) and 1886(b)(3)(B)(viii) of the Act.
    <bullet> The labor- related share that is applied to the 
standardized amounts and Puerto Rico-specific standardized amounts to 
give the hospital the highest payment, as provided for under sections 
1886(d)(3)(E), and 1886(d)(9)(C)(iv) of the Act.
    <bullet> Updates of 3.3 percent for all areas (that is, the 
estimated full market basket percentage increase of 3.3 percent), as 
required by section 1886(b)(3)(B)(i)(XX) of the Act, as amended by 
section 5001(a)(1) of Pub. L. 109-171, and reflecting the requirements 
of section 1886(b)(3)(B)(viii) of the Act, as added by section 
5001(a)(3) of Pub. L. 109-171, to reduce the applicable percentage 
increase by 2.0 percentage points for a hospital that fails to submit 
data, in a form and manner specified by the Secretary, relating to the 
quality of inpatient care furnished by the hospital.
    <bullet> An adjustment to the standardized amount to ensure budget 
neutrality for DRG recalibration and reclassification, as provided for 
under section 1886(d)(4)(C)(iii) of the Act.
    <bullet> An adjustment to ensure the wage index update and changes 
are budget neutral, as provided for under section 1886(d)(3)(E) of the 
Act.
    <bullet> An adjustment to ensure the effects of geographic 
reclassification are budget neutral, as provided for in section 
1886(d)(8)(D) of the Act, by removing the FY 2007 budget neutrality 
factor and applying a revised factor.
    <bullet> An adjustment to ensure that the imputed rural floor 
adopted under section 1886(d)(3)(E) of the Act is budget neutral.
    <bullet> An adjustment to remove the FY 2007 outlier offset and 
apply an offset for FY 2008.
    <bullet> An adjustment to ensure the effects of the rural community 
hospital demonstration required under section 410A of Pub. L. 108-173 
are budget neutral, as required under section 410A(c)(2) of Pub. L. 
108-173.
    <bullet> An adjustment to eliminate the effect of coding or 
classification changes that do not reflect real changes in case-mix 
using the Secretary's authority under section 1886(d)(3)(A)(vi) of the 
Act (as discussed in section II.D.6. of the preamble to this final rule 
with comment period).
    We note that two budget neutrality provisions will no longer be 
applied to the standardized amounts beginning with FY 2008. First, in 
the FY 2005 IPPS final rule (69 FR 49032 through 49034), we allowed 
urban hospitals that became rural under the new labor market area 
definitions to maintain their assignment to the MSA where they were 
previously located for a 3 year period extending from FY 2005 through 
FY 2007. In these years, we provided for a budget neutrality adjustment 
to the standardized amount to ensure that this policy did not increase 
Medicare expenditures for hospital inpatient services. For FY 2008, 
this budget neutrality adjustment to the IPPS standardized amounts will 
no longer be necessary because the provision has expired. Second, in 
this final rule with comment period, we are making a prospective change 
to how budget neutrality is applied to implement the rural floor for FY 
2008 and subsequent years. As discussed in section III.G.4. of the 
preamble of this final rule with comment period, we are applying the 
budget neutrality adjustment to hospital wage indices rather than the 
standardized amount. However, we are continuing to apply budget 
neutrality for the imputed rural floor adopted under section 
1886(d)(3)(E) of the Act to the standardized amounts.

A. Calculation of the Adjusted Standardized Amount

1. Standardization of Base Year Costs or Target Amounts
    In general, the national standardized amount is based on per 
discharge averages of adjusted hospital costs from a base period 
(section 1886(d)(2)(A) of the Act) or, for Puerto Rico, adjusted target 
amounts from a base period (section 1886(d)(9)(B)(i) of the Act), 
updated and otherwise adjusted in accordance with the provisions of 
section 1886(d) of the Act. The September 1, 1983 interim final rule 
(48 FR 39763) contained a detailed explanation of how base-year cost 
data (from cost reporting periods ending during FY 1981) were 
established in the initial development of standardized amounts for the 
IPPS. The September 1, 1987 final rule (52 FR 33043 and 33066) contains 
a detailed explanation of how the target amounts were determined, and 
how they are used in computing the Puerto Rico rates.
    Sections 1886(d)(2)(B) and (d)(2)(C) of the Act require us to 
update base year per discharge costs for FY 1984 and then standardize 
the cost data in order to remove the effects of certain sources of cost 
variations among hospitals. These effects include case mix, differences 
in area wage levels, cost-of-living adjustments for Alaska and Hawaii, 
indirect medical education costs, and costs to hospitals serving a

[[Page 47415]]

disproportionate share of low-income patients.
    In accordance with section 1886(d)(3)(E) of the Act, the Secretary 
estimates, from time to time, the proportion of hospitals' costs that 
are attributable to wages and wage-related costs. In general, the 
standardized amount is divided into labor-related and nonlabor-related 
amounts; only the proportion considered to be the labor-related amount 
is adjusted by the wage index. Section 1886(d)(3)(E) of the Act 
requires that 62 percent of the standardized amount be adjusted by the 
wage index, unless doing so would result in lower payments to a 
hospital than would otherwise be made. (Section 1886(d)(9)(C)(iv)(II) 
of the Act extends this provision to the labor-related share for 
hospitals located in Puerto Rico.)
    For FY 2008, we are not changing the national and Puerto Rico-
specific labor-related and nonlabor-related shares from the percentages 
established for FY 2007. Therefore, the labor-related share continues 
to be 69.7 percent for the national standardized amounts and 58.7 
percent for the Puerto Rico specific standardized amount. Consistent 
with section 1886(d)(3)(E) of the Act, we are applying the wage index 
to a labor-related share of 62 percent for all non-Puerto Rico 
hospitals whose wage indexes are less than or equal to 1.0000. For all 
non-Puerto Rico hospitals whose wage indices are greater than 1.0000, 
we are applying the wage index to a labor-related share of 69.7 percent 
of the national standardized amount. For hospitals located in Puerto 
Rico, we are applying a labor-related share of 58.7 percent if its 
Puerto Rico-specific wage index is less than or equal to 1.0000. For 
hospitals located in Puerto Rico whose Puerto Rico-specific wage index 
values are greater than 1.0000, we are applying a labor share of 62 
percent.
    The standardized amounts for operating costs appear in Table 1A, 
1B, and 1C of the Addendum to this final rule with comment period.
2. Computing the Average Standardized Amount
    Section 1886(d)(3)(A)(iv) of the Act requires that, beginning with 
FY 2004 and thereafter, an equal standardized amount be computed for 
all hospitals at the level computed for large urban hospitals during FY 
2003, updated by the applicable percentage update. Section 
1886(d)(9)(A) of the Act equalizes the Puerto Rico-specific urban and 
rural area rates. Accordingly, we calculated FY 2008 national and 
Puerto Rico standardized amounts irrespective of whether a hospital is 
located in an urban or rural location.
3. Updating the Average Standardized Amount
    In accordance with section 1886(d)(3)(A)(iv)(II) of the Act, we are 
updating the equalized standardized amount for FY 2008 by the full 
estimated market basket percentage increase for hospitals in all areas, 
as specified in section 1886(b)(3)(B)(i)(XX) of the Act, as amended by 
section 5001(a)(1) of Pub. L. 109-171. The percentage change in the 
market basket reflects the average change in the price of goods and 
services purchased by hospitals to furnish inpatient care. The most 
recent forecast of the hospital market basket increase for FY 2008 is 
3.3 percent. Thus, for FY 2008, the update to the average standardized 
amount is 3.3 percent for hospitals in all areas. The estimated market 
basket increase of 3.3 percent is based on the 2007 second quarter 
forecast of the hospital market basket increase (as discussed in 
Appendix B of this final rule with comment period).
    Section 1886(b)(3)(B) of the Act specifies the mechanism to be used 
to update the standardized amount for payment for inpatient hospital 
operating costs. Section 1886(b)(3)(B)(viii) of the Act, as added by 
section 5001(a)(3) of Pub. L. 109-171, provides for a reduction of 2.0 
percentage points from the update percentage increase (also known as 
the market basket update) for FY 2007 and each subsequent fiscal year 
for any ``subsection (d) hospital'' that does not submit quality data 
as discussed in section IV.A. of the preamble of this final rule with 
comment period. The standardized amounts in Tables 1A through 1C of 
section V. of the Addendum to this final rule with comment period 
reflect these differential amounts.
    Although the update factors for FY 2008 are set by law, we are 
required by section 1886(e)(4) of the Act to recommend, taking into 
account MedPAC's recommendations, appropriate update factors for FY 
2008 for both IPPS hospitals and hospitals and hospital units excluded 
from the IPPS. Our recommendation on the update factors (which is 
required by sections 1886(e)(4)(A) and (e)(5)(A) of the Act) is set 
forth in Appendix B of this final rule with comment period.
4. Other Adjustments to the Average Standardized Amount
    As in the past, we adjusted the FY 2008 standardized amount to 
remove the effects of the FY 2007 geographic reclassifications and 
outlier payments before applying the FY 2008 updates. We then applied 
budget neutrality offsets for outliers and geographic reclassifications 
to the standardized amount based on FY 2008 payment policies.
    We did not remove the prior year's budget neutrality adjustments 
for reclassification and recalibration of the DRG weights and for 
updated wage data because, in accordance with sections 
1886(d)(4)(C)(iii) and 1886(d)(3)(E) of the Act, estimated aggregate 
payments after updates in the DRG relative weights and wage index 
should equal estimated aggregate payments prior to the changes. If we 
removed the prior year's adjustment, we would not have satisfied these 
conditions.
    Budget neutrality is determined by comparing aggregate IPPS 
payments before and after making changes that are required to be budget 
neutral (for example, changes to DRG classifications, recalibration of 
the DRG relative weights, updates to the wage index, and different 
geographic reclassifications). We included outlier payments in the 
simulations because they may be affected by changes in these 
parameters.
    We also adjusted the standardized amount this year by an estimated 
amount to ensure that aggregate IPPS payments did not exceed the amount 
of payments that would have been made in the absence of the rural 
community hospital demonstration program, as required under section 
410A of Pub. L. 108-173. This demonstration is required to be budget 
neutral under section 410A(c)(2) of Pub. L. 108-173. For FY 2008, we 
are also applying budget neutrality to the standardized amount for the 
imputed rural floor adopted under section 1886(d)(3)(E) of the Act. For 
FY 2008 and FY 2009, we also made an adjustment to eliminate the effect 
of coding or classification changes that did not reflect real changes 
in case-mix using the Secretary's authority under section 
1886(d)(3)(A)(vi) of the Act.
a. Recalibration of DRG Weights and Updated Wage Index--Budget 
Neutrality Adjustment
    Section 1886(d)(4)(C)(iii) of the Act specifies that, beginning in 
FY 1991, the annual DRG reclassification and recalibration of the 
relative weights must be made in a manner that ensures that aggregate 
payments to hospitals are not affected. As discussed in section II. of 
the preamble of this final rule with comment period, we normalized the 
recalibrated DRG weights by an adjustment factor so that the average 
case weight after recalibration is equal to the average case weight 
prior to recalibration. However, equating the average case weight after 
recalibration to

[[Page 47416]]

the average case weight before recalibration does not necessarily 
achieve budget neutrality with respect to aggregate payments to 
hospitals because payments to hospitals are affected by factors other 
than average case weight. Therefore, as we have done in past years, we 
made a budget neutrality adjustment to ensure that the requirement of 
section 1886(d)(4)(C)(iii) of the Act is met.
    Section 1886(d)(3)(E) of the Act requires us to update the hospital 
wage index on an annual basis beginning October 1, 1993. This provision 
also requires us to make any updates or adjustments to the wage index 
in a manner that ensures that aggregate payments to hospitals are not 
affected by the change in the wage index. Consistent with current 
policy, for FY 2008, we adjusted 100 percent of the wage index factor 
for occupational mix. We describe the occupational mix adjustment in 
section III.C. of the preamble to this final rule with comment period.
    To comply with the requirement that DRG reclassification and 
recalibration of the relative weights and the updated wage index be 
budget neutral, we used FY 2006 discharge data to simulate payments and 
compared aggregate payments using the FY 2007 relative weights and wage 
indexes to aggregate payments using the proposed FY 2008 relative 
weights and wage indexes. The same methodology was used for the FY 2007 
budget neutrality adjustment. Based on this comparison, we computed a 
budget neutrality adjustment factor equal to 0.996563 to be applied to 
the national standardized amount. We also adjusted the Puerto Rico-
specific standardized amount for the effect of DRG reclassification and 
recalibration. We computed a budget neutrality adjustment factor of 
0.995913 to be applied to the Puerto Rico-specific standardized amount. 
These budget neutrality adjustment factors are applied to the 
standardized amounts for FY 2007 without removing the prior year's 
budget neutrality adjustments. In addition, as discussed in section IV. 
of the Addendum to this final rule with comment period, we applied the 
same DRG reclassification and recalibration budget neutrality factor of 
0.995913 to the hospital-specific rates that is effective for cost 
reporting periods beginning on or after October 1, 2007.
b. Reclassified Hospitals--Budget Neutrality Adjustment
    Section 1886(d)(8)(B) of the Act provides that, effective with 
discharges occurring on or after October 1, 1988, certain rural 
hospitals are deemed urban. In addition, section 1886(d)(10) of the Act 
provides for the reclassification of hospitals based on determinations 
by the MGCRB. Under section 1886(d)(10) of the Act, a hospital may be 
reclassified for purposes of the wage index.
    Under section 1886(d)(8)(D) of the Act, the Secretary is required 
to adjust the standardized amount to ensure that aggregate payments 
under the IPPS after implementation of the provisions of sections 
1886(d)(8)(B) and (C) and 1886(d)(10) of the Act are equal to the 
aggregate prospective payments that would have been made absent these 
provisions. We note that the wage index adjustments provided under 
section 1886(d)(13) of the Act are not budget neutral. Section 
1886(d)(13)(H) of the Act provides that any increase in a wage index 
under section 1886(d)(13) shall not be taken into account ``in applying 
any budget neutrality adjustment with respect to such index'' under 
section 1886(d)(8)(D) of the Act. To calculate the budget neutrality 
factor, we used FY 2006 discharge data to simulate payments, and 
compared total IPPS payments prior to any reclassifications under 
sections 1886(d)(8)(B) and (C) and 1886(d)(10) of the Act to total IPPS 
payments after such reclassifications. Based on these simulations, we 
calculated an adjustment factor of 0.991695 to ensure that the effects 
of these provisions are budget neutral, consistent with the statute.
    The adjustment factor was applied to the standardized amount after 
removing the effects of the FY 2007 budget neutrality adjustment 
factor. We note that the FY 2008 adjustment reflects FY 2008 wage index 
reclassifications approved by the MGCRB or the Administrator. (Section 
1886(d)(10)(D)(v) of the Act makes wage index reclassifications 
effective for 3 years. Therefore, the FY 2008 geographic 
reclassification could either be the continuation of a 3-year 
reclassification that began in FY 2006 or FY 2007, or a new one 
beginning in FY 2008.)
c. Imputed Rural Floor--Budget Neutrality Adjustment
    For FY 2005 through FY 2008, we have adopted an imputed rural floor 
under the authority of section 1886(d)(3)(E) of the Act. This provision 
also requires us to make any updates or adjustments to the wage index 
in a manner that ensures that aggregate payments to hospitals are not 
affected by the change in the wage index. To calculate the budget 
neutrality factor, we used FY 2006 discharge data to simulate payments. 
We compared total IPPS payments before and after the application of the 
imputed rural floor. Based on these simulations, we calculated an 
adjustment factor of 0.999318 to ensure that the effect of the imputed 
rural floor is budget neutral.
d. Case-Mix Budget Neutrality Adjustment
    The MS-DRGs will increase the total number of DRGs from 538 to 745. 
We believe that such a significant expansion in the number of DRGs will 
lead hospitals to improve coding and documentation in order to have a 
case assigned to a DRG with a higher payment. As explained above, we 
made an adjustment to ensure that the DRG relative weights remain 
budget neutral assuming constant utilization. However, without an 
adjustment to the IPPS rates to account for expected case-mix growth 
due to improved coding rather than to underlying changes in patient 
severity, the change to MS-DRGs would not be budget neutral. Section 
1886(d)(3)(A)(vi) of the Act provides the Secretary with explicit 
authority to adjust the standardized amounts to account for case-mix 
growth due to improved documentation and coding. Further, the Secretary 
may subsequently revisit this adjustment if actual data is different 
than the projection.
    Based on the Office of Actuary's analysis (as discussed in more 
detail in section II.D.6. of the preamble of this final rule with 
comment period), using the Secretary's authority under section 
1886(d)(3)(A)(vi) of the Act to adjust the standardized amount to 
eliminate the effect of changes in coding or classification of 
discharges that do not reflect real changes in case-mix, we reduced the 
IPPS standardized amounts by -1.2 percent for FY 2008. Section 
1886(d)(3)(A)(vi) further gives the Secretary authority to revisit 
adjustments to the standardized amounts for changes in coding or 
classification of discharges that were based on estimates in a future 
year. Consistent with the statute, we will compare the actual increase 
in case-mix due to documentation and coding to our projection once we 
have actual data for FY 2008. At that time, if necessary, we may make a 
further adjustment to the standardized amounts to account for the 
difference between our projection and actual data.
e. Outliers
    Section 1886(d)(5)(A) of the Act provides for payments in addition 
to the basic prospective payments for ``outlier'' cases involving 
extraordinarily high costs. To qualify for outlier payments, a case 
must have costs greater than the

[[Page 47417]]

sum of the prospective payment rate for the DRG, any IME and DSH 
payments, any new technology add-on payments, and the ``outlier 
threshold'' or ``fixed-loss'' amount (a dollar amount by which the 
costs of a case must exceed payments in order to qualify for an outlier 
payment). We refer to the sum of the prospective payment rate for the 
DRG, any IME and DSH payments, any new technology add-on payments, and 
the outlier threshold as the outlier ``fixed-loss cost threshold.'' To 
determine whether the costs of a case exceed the fixed-loss cost 
threshold, a hospital's CCR is applied to the total covered charges for 
the case to convert the charges to estimated costs. Payments for 
eligible cases are then made based on a marginal cost factor, which is 
a percentage of the estimated costs above the fixed-loss cost 
threshold. The marginal cost factor for FY 2008 is 80 percent, the same 
marginal cost factor we have used since FY 1995 (59 FR 45367).
    In accordance with section 1886(d)(5)(A)(iv) of the Act, outlier 
payments for any year are projected to be not less than 5 percent nor 
more than 6 percent of total operating DRG payments plus outlier 
payments. Section 1886(d)(3)(B) of the Act requires the Secretary to 
reduce the average standardized amount by a factor to account for the 
estimated proportion of total DRG payments made to outlier cases. 
Similarly, section 1886(d)(9)(B)(iv) of the Act requires the Secretary 
to reduce the average standardized amount applicable to hospitals 
located in Puerto Rico to account for the estimated proportion of total 
DRG payments made to outlier cases. More information on outlier 
payments may be found on the CMS Web site at http://www.cms.hhs.gov/AcuteInpatientPPS/04_outlier.asp#TopOfPage.
(1) FY 2008 Outlier Fixed-Loss Cost Threshold
    For FY 2008, we proposed to use the same methodology used for FY 
2007 (71 FR 48148 through 484151) to calculate the outlier threshold. 
Similar to the methodology used in the FY 2007 final rule, for FY 2008, 
we applied an adjustment factor to the CCRs to account for cost and 
charge inflation (as explained below). As we have done in the past, to 
calculate the proposed FY 2008 outlier threshold, we simulated payments 
by applying FY 2008 rates and policies using cases from the FY 2006 
MedPAR files. Therefore, in order to determine the FY 2008 outlier 
threshold, we inflated the charges on the MedPAR claims by 2 years, 
from FY 2006 to FY 2008.
    We proposed to continue to use the refined methodology that takes 
into account the lower inflation in hospital charges that are occurring 
as a result of the outlier final rule (68 FR 34494), which changed our 
methodology for determining outlier payments by implementing the use of 
more current CCRs. Our refined methodology uses more recent data that 
reflect the rate-of-change in hospital charges under the new outlier 
policy.
    Using the most recent data available, we calculated the 1 year 
average annualized rate-of-change in charges-per-case from the last 
quarter of FY 2005 in combination with the first quarter of FY 2006 
(July 1, 2005 through December 31, 2005) to the last quarter of FY 2006 
in combination with the first quarter of FY 2007 (July 1, 2006 through 
December 31, 2006). This rate of change was 7.26 percent (1.0726) or 
15.04 percent (1.1504) over 2 years.
    As we have done in the past, we established the proposed FY 2008 
outlier threshold using hospital CCRs from the December 2006 update to 
the Provider Specific File (PSF)--the most recent available data at the 
time of the proposed rule. This file includes CCRs that reflected 
implementation of the changes to the policy for determining the 
applicable CCRs that became effective August 8, 2003 (68 FR 34494).
    As discussed in the FY 2007 final rule (71 FR 48150), we worked 
with the Office of Actuary to derive the methodology described below to 
develop the CCR adjustment factor. For FY 2008, we proposed to use the 
same methodology to calculate the CCR adjustment by using the FY 2006 
operating cost per discharge increase in combination with the actual FY 
2006 market basket increase determined by Global Insight, Inc. (we note 
that the FY 2006 actual (otherwise referred to as ``final'') market 
basket increase reflects historical data whereas the published FY 2006 
market basket update factor was based on Global Insight, Inc.'s 2005 
second quarter forecast with historical data through the first quarter 
of 2005), as well as the charge inflation factor described above to 
estimate the adjustment to the CCRs. By using the market basket rate-
of-increase and the increase in the average cost per discharge from 
hospital cost reports, we are using two different measures of cost 
inflation. For FY 2008, we determined the adjustment by taking the 
percentage increase in the operating costs per discharge from FY 2004 
to FY 2005 (1.0529) from the cost report and dividing it by the final 
market basket increase from FY 2005 (1.043) We repeated this 
calculation for 2 prior years to determine the 3 year average of the 
rate of adjusted change in costs between the market basket rate of 
increase and the increase in cost per case from the cost report (FY 
2002 to FY 2003 percentage increase of operating costs per discharge of 
1.0721 divided by FY 2003 final market basket increase of 1.041, FY 
2003 to FY 2004 percentage increase of operating costs per discharge of 
1.0624 divided by FY 2004 final market basket increase of 1.04). For FY 
2008, we averaged the differentials calculated for FY 2003, FY 2004, 
and FY 2005 which resulted in a mean ratio of 1.0203. We multiplied the 
3 year average of 1.0203 by the 2006 market basket percentage increase 
of 1.0420, which resulted in an operating cost inflation factor of 6.32 
percent or 1.0632. We then divided the operating cost inflation factor 
by the 1 year average change in charges (1.0726) and applied an 
adjustment factor of 0.9912 to the operating CCRs from the PSF.
    As stated in the FY 2007 final rule, we continue to believe it is 
appropriate to apply only a 1-year adjustment factor to the CCRs. On 
average, it takes approximately 9 months for fiscal intermediaries (or, 
if applicable, the MAC) to tentatively settle a cost report from the 
fiscal year end of a hospital's cost reporting period. The average 
``age'' of hospitals' CCRs from the time the fiscal intermediary or the 
MAC inserts the CCR in the PSF until the beginning of FY 2007 is 
approximately 1 year. Therefore, as stated above, we believe a 1-year 
adjustment factor to the CCRs is appropriate.
    We used the same methodology for the capital CCRs and applied an 
adjustment factor of 0.964 (cost inflation factor of 1.0340 divided by 
a charge inflation factor of 1.0726) to the capital CCRs. We are using 
the same charge inflation factor for the capital CCRs that was used for 
the operating CCRs. The charge inflation factor is based on the overall 
billed charges. Therefore, we believe it is appropriate to apply the 
charge factor to both the operating and capital CCRs.
    Using this methodology, we calculated a proposed outlier fixed-loss 
cost threshold for FY 2008 equal to the prospective payment rate for 
the DRG, plus any IME and DSH payments, and any add-on payments for new 
technology, plus $23,015.
    Comment: One commenter believed that the estimate of FY 2007 
outlier payments was overstated. The commenter performed its own 
analysis and determined that outlier payments were 4.63 percent of 
overall payments

[[Page 47418]]

for FY 2007. The commenter noted that CMS did not use the most recent 
CCR data to determine the FY 2007 outlier payment estimate. 
Specifically, the commenter stated, CMS used CCR data from October 1, 
2006, while the commenter used CCRs from January 1, 2007. Based on its 
analysis, the commenter noted that the outlier projection methodology 
can be improved because a 0.5 percent shortfall in outlier payments for 
FY 2007 represents $420 million lost by hospitals.
    As a result, the commenter suggested the following improvements to 
the outlier projection methodology. First, the commenter suggested that 
the methodology to develop the adjustment factor to the CCRs is 
unnecessarily complicated and does not lead to a more accurate result. 
The commenter urged CMS to adopt a methodology that uses recent 
historical industry wide average rate of change, similar to the 
methodology used to develop the charge inflation factor. Another 
commenter stated that it is not clear if the historical record supports 
the assumption that costs and the market basket maintain a relatively 
constant relationship over time. Second, the commenter suggested that 
the CCRs should be projected over different periods of time, some less 
or more than one year, based on variations in hospital fiscal year 
ends. The commenter believed this methodology would more accurately 
project the decline in CCRs. The commenter also noted that, if CMS does 
not adopt the MS-DRGs for FY 2008, the threshold will need to be 
recalculated using the CMS-DRGs. Third, the commenter noted that CMS 
used the December 2006 CCR update for the proposed rule and has 
historically used the March update for the final rule. The commenter 
urged CMS to use the June 2007 update instead of the March 2007 update 
for the final rule. Other commenters recommended that CMS lower the 
outlier threshold in addition to what CMS proposed because cases that 
were outliers under the CMS DRGs will now end up as cases without 
outlier payments under the MS-DRGs.
    Response: We used the October 2006 PSF to compute the FY 2007 
outlier estimate, as these are the CCRs on file at the beginning of the 
fiscal year. As we have stated in the past, CCRs in the PSF are updated 
throughout the year and once a CCR is inputed into the PSF, the CCR may 
be used for payment for a year or more until the next tentative or 
final cost report is settled (whichever is from the most recent 
period). Therefore, we do not agree that the January 2007 PSF will 
necessarily provide more accurate CCRs to compute FY 2007 outlier 
payments than the October 2006 PSF update.
    In response to the comment that CCRs should be projected over 
different periods of time, as we have mentioned in the past, it is 
possible that some of the CCRs in the March PSF will be used in FY 2008 
for actual outlier payments, while other CCRs may be 1 year old. 
Therefore, we apply a 1-year adjustment to the CCRs. However, we will 
study and consider this proposal for the future.
    With respect to the comment on our methodology used to adjust the 
CCRs, as we stated in the FY 2007 IPPS final rule (71 FR 48151), we 
believe this calculation of an adjustment to the CCRs is more accurate 
and stable than the commenter's methodology because it takes into 
account the costs per discharge and the market basket percentage 
increase when determining a cost adjustment factor. There are times 
where the market basket and the cost per discharge will be constant, 
while other times these values will differ from each other, depending 
on the fiscal year. Therefore as mentioned above, using the market 
basket in conjunction with the cost per discharge uses two sources that 
measure potential cost inflation and ensures a more accurate and stable 
cost adjustment factor. Additionally, we are continuing to use the 
March update of the PSF for the final rule as the June PSF update will 
not be ready for use until the end of July, which is beyond the 
timetable necessary for us to compute the outlier threshold and publish 
this final rule with comment period by August 1st. Finally, as noted in 
sections II.E. and H. in the preamble of this final rule with comment 
period, we adopted and implemented a blend of CMS and MS-DRG weights 
for FY 2008. Therefore, the current threshold is based on cases that 
are grouped and paid using blended MS-DRG weights. Additionally, we 
address the impact of the MS-DRGs on the outlier threshold below.
    Because we are not making any changes to our methodology for this 
final rule with comment period, for FY 2008, we are using the same 
methodology we proposed to calculate the outlier threshold. Using the 
most recent data available, we calculated the 1 year average annualized 
rate of change in charges per case from the first quarter of FY 2006 in 
combination with the second quarter of FY 2006 (October 1, 2005 through 
March 31, 2006) to the first quarter of FY 2007 in combination with the 
second quarter of FY 2007 (October 1, 2006 through March 31, 2007). 
This rate of change was 6.2 percent (1.062) or 12.78 percent (1.1278) 
over 2 years.
    As we have done in the past, we established the FY 2008 outlier 
threshold using hospital CCRs from the March 2007 update to the PSF--
the most recent available data at the time of this final rule with 
comment period. This file includes CCRs that reflected implementation 
of the changes to the policy for determining the applicable CCRs that 
became effective August 8, 2003 (68 FR 34494).
    For FY 2008, we calculated the CCR adjustment by using the 
operating cost per discharge increase in combination with the final 
market basket increase determined by Global Insight, Inc., as well as 
the charge inflation factor described above to estimate the adjustment 
to the CCRs. We determined the operating CCR adjustment by taking the 
percentage increase in the operating costs per discharge from FY 2004 
to FY 2005 (1.0564) from the cost report and dividing it by the final 
market basket increase from FY 2005 (1.043) We repeated this 
calculation for 2 prior years to determine the 3 year average of the 
rate of adjusted change in costs between the market basket rate of 
increase and the increase in cost per case from the cost report (FY 
2002 to FY 2003 percentage increase of operating costs per discharge of 
1.0715 divided by FY 2003 final market basket increase of 1.041, FY 
2003 to FY 2004 percentage increase of operating costs per discharge of 
1.0617 divided by FY 2004 final market basket increase of 1.04). For FY 
2008, we averaged the differentials calculated for FY 2003, FY 2004, 
and FY 2005 which resulted in a mean ratio of 1.0210. We multiplied the 
3 year average of 1.0210 by the 2006 market basket percentage increase 
of 1.0430, which resulted in an operating cost inflation factor of 6.49 
percent or 1.0649. We then divided the operating cost inflation factor 
by the 1 year average change in charges (1.062) and applied an 
adjustment factor of 1.0027 to the operating CCRs from the PSF.
    We used the same methodology for the capital CCRs and applied an 
adjustment factor of 0.9744 (cost inflation factor of 1.0348 divided by 
a charge inflation factor of 1.062) to the capital CCRs. We are using 
the same charge inflation factor for the capital CCRs that was used for 
the operating CCRs. The charge inflation factor is based on the overall 
billed charges. Therefore, we believe it is appropriate to apply the 
charge factor to both the operating and capital CCRs.
    Using this methodology, we calculated an outlier fixed-loss cost 
threshold for FY 2008 equal to the

[[Page 47419]]

prospective payment rate for the DRG, plus any IME and DSH payments, 
and any add-on payments for new technology, plus $22,635. With this 
threshold, we project that outlier payments will equal 5.1 percent of 
total IPPS payments.
    As we did in establishing the FY 2007 outlier threshold (71 FR 
48149), in our projection of FY 2008 outlier payments, we are not 
making any adjustments for the possibility that hospitals' CCRs and 
outlier payments may be reconciled upon cost report settlement. We 
continue to believe that, due to the policy implemented in the outlier 
final rule (68 FR 34494, June 9, 2003), CCRs will no longer fluctuate 
significantly and, therefore, few hospitals will actually have these 
ratios reconciled upon cost report settlement. In addition, it is 
difficult to predict the specific hospitals that will have CCRs and 
outlier payments reconciled in any given year. We also noted that 
reconciliation occurs because hospitals' actual CCRs for the cost 
reporting period are different than the interim CCRs used to calculate 
outlier payments when a bill is processed. Our simulations assume that 
CCRs accurately measure hospital costs based on information available 
to us at the time we set the outlier threshold. For these reasons, we 
are not making any assumptions about the effects of reconciliation on 
the outlier threshold calculation.
    We note that there are some factors that contributed to a lower 
fixed loss outlier threshold for FY 2008 compared to FY 2007. First, 
the case weighted national average operating CCR declined by 
approximately an additional 1.5 percentage points from the March 2006 
update (used to calculate the FY 2007 outlier threshold) to the March 
2007 update of the PSF. Additionally, as discussed in section II.D. of 
the preamble of this final rule with comment period, we are adopting 
the use of MS-DRGs under the IPPS for FY 2008. The MS-DRG system will 
increase the number of DRGs from 538 to 745, and better recognize 
severity of illness than the CMS-DRGs. Better recognition of severity 
of illness with the MS-DRGs means that nonoutlier payments will 
compensate hospitals for the higher costs of some cases that previously 
received outlier payments. As cases are paid more accurately, in order 
to meet the 5.1 percent target, we need to decrease the fixed-loss 
outlier threshold so that more cases qualify for outlier payments. 
Therefore, we believe that the above factors cumulatively contributed 
to a lower fixed-loss outlier threshold in FY 2008 compared to FY 2007.
    Comment: Similar to its statement in the March 2005 Report to 
Congress, MedPAC commented there is a need to reform the financing of 
outlier payments. MedPAC explained that variation in the prevalence of 
outlier cases contributes to disparities in relative probability across 
and within DRGs. MedPAC explained that these disparities can penalize 
hospitals that treat patients in DRGs with a low prevalence of 
outliers. Therefore, MedPAC recommended that Congress give the 
Secretary authority to adjust the DRG relative weights to account for 
differences by DRG in the prevalence of outlier cases.
    Response: As noted in the FY 2007 final rule (71 FR 47921), we do 
not have the statutory authority to implement MedPAC's recommendation. 
Therefore, we placed most of our attention and resources on the 
recommendations related to refinement of the current DRGs. However, we 
intend to examine MedPAC's recommendation regarding outliers in more 
detail in the future.
    Comment: One commenter recommended that CMS make a midyear change 
to the outlier threshold if it appears that the 5.1 percent target will 
not be met. The commenter suggested that CMS use more recent CCR data 
for a midyear correction to the outlier threshold and use thresholds 
such as if outlier payments less than 95 percent or greater than 105 
percent of the 5.1 percent target to trigger a midyear adjustment. 
Other commenters recommended that CMS further lower the threshold 
because CMS did not spend the total allocated pool of cost outlier 
funds allocated for outlier payments in FYs 2005, 2006, and 2007.
    Response: With respect to the comments above, we have responded to 
similar comments in the FY 2006 IPPS final rule (70 FR 47495). We refer 
readers to that final rule.
    Comment: One commenter recommended that CMS keep the proposed 
threshold for FY 2008 or use the FY 2007 outlier threshold for FY 2008 
because CMS has underpaid the outlier pool for a number of years and 
has underestimated the outlier threshold as well.
    Response: With respect to the comment above, we have responded to a 
similar comment in the FY 2007 IPPS final rule (71 FR 48151). We refer 
readers to that final rule. We further note that the threshold we are 
finalizing for FY 2008 is lower than the FY 2007 outlier threshold and 
the FY 2008 proposed outlier threshold. If outlier payments are lower 
than the 5.1 percent removed from IPPS rates, one would expect that the 
commenter would be suggesting reducing the outlier threshold so a 
higher percentage of total payments are made as outliers.
(2) Other Changes Concerning Outliers
    As stated in the FY 1994 IPPS final rule (58 FR 46348), we 
establish outlier thresholds that are applicable to both hospital 
inpatient operating costs and hospital inpatient capital-related costs. 
When we modeled the combined operating and capital outlier payments, we 
found that using a common set of thresholds resulted in a lower 
percentage of outlier payments for capital-related costs than for 
operating costs. We project that the thresholds for FY 2008 will result 
in outlier payments that will equal 5.1 percent of operating DRG 
payments and 4.83 percent of capital payments based on the Federal 
rate.
    In accordance with section 1886(d)(3)(B) of the Act, we are 
reducing the FY 2008 standardized amount by the same percentage to 
account for the projected proportion of payments paid as outliers.
    The outlier adjustment factors that are applied to the standardized 
amount for the FY 2008 outlier threshold are as follows:

------------------------------------------------------------------------
                                                 Operating     Capital
                                               standardized    federal
                                                  amounts        rate
------------------------------------------------------------------------
National.....................................      0.948980     0.951665
Puerto Rico..................................      0.964470     0.956231
------------------------------------------------------------------------

    Consistent with current policy, we applied the outlier adjustment 
factors to FY 2008 rates after removing the effects of the FY 2007 
outlier adjustment factors on the standardized amount.
    To determine whether a case qualifies for outlier payments, we 
apply hospital-specific CCRs to the total covered charges for the case. 
Estimated operating and capital costs for the case are calculated 
separately by applying separate operating and capital CCRs. These costs 
are then combined and compared with the outlier fixed-loss cost 
threshold.
    The outlier final rule (68 FR 34494) eliminated the application of 
the statewide average CCRs for hospitals with CCRs that fell below 3 
standard deviations from the national mean CCR. However, for those 
hospitals for which the fiscal intermediary or MAC computes operating 
CCRs greater than 1.238 or capital CCRs greater than 0.152, or 
hospitals for whom the fiscal intermediary or MAC is unable to 
calculate a CCR (as described at Sec.  412.84(i)(3) of our 
regulations), we still use statewide average CCRs to

[[Page 47420]]

determine whether a hospital qualifies for outlier payments.\29\ Table 
8A in section V. of the Addendum of this final rule with comment period 
contains the statewide average operating CCRs for urban hospitals and 
for rural hospitals for which the fiscal intermediary or MAC is unable 
to compute a hospital-specific CCR within the above range. Effective 
for discharges occurring on or after October 1, 2007, these statewide 
average ratios replace the ratios published in the IPPS final rule for 
FY 2007 (71 FR 48303). Table 8B in section V. of the Addendum to this 
final rule with comment period contains the comparable statewide 
average capital CCRs. Again, the CCRs in Tables 8A and 8B will be used 
during FY 2008 when hospital-specific CCRs based on the latest settled 
cost report are either not available or are outside the range noted 
above. For an explanation of Table 8C, please see section V. of the 
Addendum to this final rule with comment period.
---------------------------------------------------------------------------

    \29\ These figures represent 3.0 standard deviations from the 
mean of the log distribution of CCRs for all hospitals.
---------------------------------------------------------------------------

    We finally note that we published a manual update (Change Request 
3966) to our outlier policy on October 12, 2005, which updated Chapter 
3, Section 20.1.2 of the Medicare Claims Processing Manual. The manual 
update covered an array of topics, including CCRs, reconciliation, and 
the time value of money. We encourage hospitals that are assigned the 
statewide average operating and/or capital CCRs to work with their 
fiscal intermediaries (or MAC if applicable) on a possible alternative 
operating and/or capital CCR as explained in Change Request 3966. Use 
of an alternative CCR developed by the hospital in conjunction with the 
fiscal intermediary or MAC can avoid possible overpayments or 
underpayments at cost report settlement, thus ensuring better accuracy 
when making outlier payments and negating the need for outlier 
reconciliation. We also note that a hospital may request an alternative 
operating or capital CCR ratio at any time as long as the guidelines of 
Change Request 3966 are followed. To download and view the manual 
instructions on outlier and cost-to-charge ratios, please visit the Web 
site: http://www.cms.hhs.gov/manuals/downloads/clm104c03.pdf.
(3) FY 2006 and FY 2007 Outlier Payments
    In the FY 2007 IPPS final rule (70 FR 47496), we stated that, based 
on available data, we estimated that actual FY 2006 outlier payments 
would be approximately 4.62 percent of actual total DRG payments. This 
estimate was computed based on simulations using the FY 2005 MedPAR 
file (discharge data for FY 2005 bills). That is, the estimate of 
actual outlier payments did not reflect actual FY 2006 bills, but 
instead reflected the application of FY 2006 rates and policies to 
available FY 2005 bills.
    Our current estimate, using available FY 2006 bills, is that actual 
outlier payments for FY 2006 were approximately 4.65 percent of actual 
total DRG payments. Thus, the data indicate that, for FY 2006, the 
percentage of actual outlier payments relative to actual total payments 
is lower than we projected before FY 2006. Consistent with the policy 
and statutory interpretation we have maintained since the inception of 
the IPPS, we do not plan to make retroactive adjustments to outlier 
payments to ensure that total outlier payments for FY 2006 are equal to 
5.1 percent of total DRG payments.
    We currently estimate that actual outlier payments for FY 2007 will 
be approximately 4.6 percent of actual total DRG payments, 0.5 
percentage points lower than the 5.1 percent we projected in setting 
the outlier policies for FY 2007. This estimate is based on simulations 
using the FY 2006 MedPAR file (discharge data for FY 2006 bills). We 
used these data to calculate an estimate of the actual outlier 
percentage for FY 2007 by applying FY 2007 rates and policies, 
including an outlier threshold of $24,485 to available FY 2006 bills. 
We note that our estimate of FY 2007 outlier payments is 0.3 percentage 
points less than our estimate from the proposed rule. We believe the 
1.06 percentage point change in the charge inflation factor from the 
proposed rule to this final rule with comment period contributed to a 
lower FY 2007 outlier payment estimate in this final rule with comment 
period. Additionally, we used a more recent update of the FY 2006 
MedPAR claims database and the PSF for this final rule with comment 
period, which also affects the FY 2007 outlier payment estimate, and 
could contribute to a lower FY 2007 outlier payment estimate for this 
final rule with comment period.
f. Rural Community Hospital Demonstration Program Adjustment (Section 
410A of Pub. L. 108-173)
    Section 410A of Pub. L. 108-173 requires the Secretary to establish 
a demonstration that will modify reimbursement for inpatient services 
for up to 15 small rural hospitals. Section 410A(c)(2) of Pub. L. 108-
173 requires that ``in conducting the demonstration program under this 
section, the Secretary shall ensure that the aggregate payments made by 
the Secretary do not exceed the amount which the Secretary would have 
paid if the demonstration program under this section was not 
implemented.'' As discussed in section IV.H. of the preamble to this 
final rule with comment period, we have satisfied this requirement by 
adjusting national IPPS rates by a factor that is sufficient to account 
for the added costs of this demonstration. We estimate that the average 
additional annual payment that will be made to each participating 
hospital under the demonstration will be approximately $1,075,765. We 
based this estimate on the recent historical experience of the 
difference between inpatient cost and payment for hospitals that are 
participating in the demonstration program. For 9 participating 
hospitals, the total annual impact of the demonstration program for FY 
2008 is $9,681,893. The required adjustment to the Federal rate used in 
calculating Medicare inpatient prospective payments as a result of the 
demonstration is 0.999903.
    In order to achieve budget neutrality, we adjust the national IPPS 
rates by an amount sufficient to account for the added costs of this 
demonstration. In other words, we apply budget neutrality across the 
payment system as a whole rather than merely across the participants of 
this demonstration, consistent with past practice. We believe that the 
language of the statutory budget neutrality requirement permits the 
agency to implement the budget neutrality provision in this manner. The 
statutory language requires that ``aggregate payments made by the 
Secretary do not exceed the amount which the Secretary would have paid 
if the demonstration * * * was not implemented,'' but does not identify 
the range across which aggregate payments must be held equal.
5. FY 2008 Standardized Amount
    The adjusted standardized amount is divided into labor-related and 
nonlabor-related portions. Tables 1A and 1B in section V. of the 
Addendum to this final rule with comment period contain the national 
standardized amounts that we apply to all hospitals, except hospitals 
located in Puerto Rico, for FY 2008. The Puerto Rico-specific amounts 
are shown in Table 1C. The amounts shown in Tables 1A and 1B differ 
only in that the labor-related share applied to the standardized 
amounts in Table 1A is 69.7 percent, and Table 1B is 62 percent. In 
accordance with sections 1886(d)(3)(E) and 1886(d)(9)(C)(iv) of the 
Act, we apply a labor-related share of 62 percent, unless application 
of that

[[Page 47421]]

percentage would result in lower payments to a hospital than would 
otherwise be made. In effect, the statutory provision means that we 
apply a labor-related share of 62 percent for all hospitals (other than 
those in Puerto Rico) whose wage indexes are less than or equal to 
1.0000.
    In addition, Tables 1A and 1B include standardized amounts 
reflecting the full 3.3 percent update for FY 2008, and standardized 
amounts reflecting the 2.0 percentage point reduction to the update (a 
1.3 percent update) applicable for hospitals that fail to submit 
quality data consistent with section 1886(b)(3)(B)(viii) of the Act.
    Under section 1886(d)(9)(A)(ii) of the Act, the Federal portion of 
the Puerto Rico payment rate is based on the discharge-weighted average 
of the national large urban standardized amount (this amount is set 
forth in Table 1A). The labor-related and nonlabor-related portions of 
the national average standardized amounts for Puerto Rico hospitals for 
FY 2008 are set forth in Table 1C of section V. of the Addendum to this 
final rule with comment period. This table also includes the Puerto 
Rico standardized amounts. The labor-related share applied to the 
Puerto Rico specific standardized amount is 58.7 percent, or 62 
percent, depending on which provides higher payments to the hospital. 
(Section 1886(d)(9)(C)(iv) of the Act, as amended by section 403(b) of 
Pub. L. 108-173, provides that the labor-related share for hospitals 
located in Puerto Rico be 62 percent, unless the application of that 
percentage would result in lower payments to the hospital.) The 
following table illustrates the changes from the FY 2007 national 
average standardized amount. The second and third columns show the 
changes from the FY 2007 standardized amounts for hospitals that 
satisfy the quality data submission requirement for receiving the full 
update (3.3 percent) with the different labor-related shares that apply 
to hospitals. The fourth and fifth columns show the changes for 
hospitals receiving the reduced update (1.3 percent) with the different 
labor-related shares that apply to hospitals. The first row of the 
table shows the updated (through FY 2007) average standardized amount 
after restoring the FY 2007 offsets for outlier payments, demonstration 
budget neutrality, the wage index transition budget neutrality, and the 
geographic reclassification budget neutrality. The DRG reclassification 
and recalibration and wage index budget neutrality factor is 
cumulative. Therefore, the FY 2007 factor is not removed from this 
table. We have added two additional rows: one for the documentation and 
coding adjustment and the other for the rural floor adjustment. The 
rural floor adjustment removes the effect of the budget neutrality 
adjustment applied in FY 2007 to the standardized amount for 
application of the rural floor. It is meant to address a single year 
transition from a cumulative budget neutrality adjustment applied to 
the standardized amount to a noncumulative adjustment applied to the 
wage index. (For a complete discussion on the documentation and coding 
adjustment and the rural floor adjustment, we refer readers to section 
III.G.4. of the preamble to this final rule with comment period and 
section II.D. of the Addendum to this final rule with comment period.)

    Comparison of FY 2007 Standardized Amounts to the FY 2008 Single Standardized Amount With Full Update and
                                                 Reduced Update
----------------------------------------------------------------------------------------------------------------
                                                                               Reduced update
                                          Full update (3.3  Full update (3.3   (1.3 percent);    Reduced update
                                           percent); Wage    percent); Wage     Wage index is    (1.3 percent);
                                          index is greater    index is less     greater than      Wage index is
                                             than 1.0000       than 1.0000         1.0000       less than 1.0000
----------------------------------------------------------------------------------------------------------------
FY 2007 Base Rate, after removing
 reclassification budget neutrality,
 demonstration budget neutrality, wage
 index transition budget neutrality
 factors and outlier offset (based on
 the labor and market share percentage
 for FY 2008):
    Labor...............................         $3,609.23         $3,609.23         $3,609.23         $3,609.23
    Nonlabor............................         $1,569.01         $1,569.01         $1,569.01         $1,569.01
FY 2008 Update Factor...................             1.033             1.033             1.013             1.013
FY 2008 DRG Recalibrations and Wage               0.996563          0.996563          0.996563          0.996563
 Index Budget Neutrality Factor.........
FY 2008 Reclassification Budget                   0.991695          0.991695          0.991695          0.991695
 Neutrality Factor......................
Adjusted for Blend of FY 2007 DRG
 Recalibration and Wage Index Budget
 Neutrality Factors:
    Labor...............................         $3,684.66         $3,277.61         $3,613.33         $3,214.15
    Nonlabor............................         $1,601.80         $1,570.99         $1,570.79         $1,969.96
Imputed Rural Floor Budget Neutrality             0.999318          0.999318          0.999318          0.999318
 Factor.................................
FY 2008 Outlier Factor..................          0.948980          0.948980          0.948980          0.948980
Rural Demonstration Budget Neutrality             0.999903          0.999903          0.999903          0.999903
 Factor.................................
FY 2008 Documentation and Coding                     0.988             0.988             0.988             0.988
 Adjustment.............................
Rural Floor Adjustment..................          1.002214          1.002214          1.002214          1.002214
Rate for FY 2008:
    Labor...............................         $3,459.66         $3,077.46         $3,392.68         $3,017.87
    Nonlabor............................         $1,503.98         $1,886.18         $1,474.86         $1,849.67
----------------------------------------------------------------------------------------------------------------

    Under section 1886(d)(9)(A)(ii) of the Act, the Federal portion of 
the Puerto Rico payment rate is based on the discharge-weighted average 
of the national large urban standardized amount (as set forth in Table 
1A). The labor-related and nonlabor-related portions of the national 
average standardized amounts for hospitals located in Puerto Rico are 
set forth in Table 1C of section V. of the Addendum of this final rule 
with comment period. This table also includes the Puerto Rico 
standardized amounts. The labor-related share applied to the Puerto 
Rico standardized amount is 58.7 percent, or 62 percent, depending on 
which results in higher payments to the hospital. (Section 
1886(d)(9)(C)(iv) of the Act, as amended by section 403(b) of Pub. L. 
108-173, provides that the labor-related

[[Page 47422]]

share for hospitals located in Puerto Rico be 62 percent, unless the 
application of that percentage would result in lower payments to the 
hospital.)

B. Adjustments for Area Wage Levels and Cost-of-Living

    Tables 1A through 1C, as set forth in section V. of the Addendum to 
this final rule with comment period, contain the labor-related and 
nonlabor-related shares that we used to calculate the prospective 
payment rates for hospitals located in the 50 States, the District of 
Columbia, and Puerto Rico for FY 2008. This section addresses two types 
of adjustments to the standardized amounts that were made in 
determining the prospective payment rates as described in this 
Addendum.
1. Adjustment for Area Wage Levels
    Sections 1886(d)(3)(E) and 1886(d)(9)(C)(iv) of the Act require 
that we make an adjustment to the labor-related portion of the national 
and Puerto Rico prospective payment rates, respectively, to account for 
area differences in hospital wage levels. This adjustment is made by 
multiplying the labor-related portion of the adjusted standardized 
amounts by the appropriate wage index for the area in which the 
hospital is located. In section III. of the preamble to this final rule 
with comment period, we discuss the data and methodology for the FY 
2008 wage index.
2. Adjustment for Cost-of-Living in Alaska and Hawaii
    Section 1886(d)(5)(H) of the Act authorizes the Secretary to make 
an adjustment to take into account the unique circumstances of 
hospitals in Alaska and Hawaii. Higher labor-related costs for these 
two States are taken into account in the adjustment for area wages 
described above. For FY 2008, we adjusted the payments for hospitals in 
Alaska and Hawaii by multiplying the nonlabor-related portion of the 
standardized amount by the applicable adjustment factor contained in 
the table below.

 Table of Cost of Living Adjustment Factors: Alaska and Hawaii Hospitals
------------------------------------------------------------------------
                                                               Cost of
                                                                living
                            Area                              adjustment
                                                                factor
------------------------------------------------------------------------
Alaska:
    City of Anchorage and 80-kilometer (50-mile) radius by          1.24
     road..................................................
    City of Fairbanks and 80-kilometer (50-mile) radius by          1.24
     road..................................................
    City of Juneau and 80-kilometer (50-mile) radius by             1.24
     road..................................................
    Rest of Alaska.........................................         1.25
Hawaii:
    City and County of Honolulu............................         1.25
    County of Hawaii.......................................         1.17
    County of Kauai........................................         1.25
    County of Maui and County of Kalawao...................        1.25
------------------------------------------------------------------------
(The above factors are based on data obtained from the U.S. Office of
  Personnel Management.)

C. DRG Relative Weights

    As discussed in section II. of the preamble of this final rule with 
comment period, we are adopting a revised classification system for all 
hospital discharges, assigning them into MS-DRGs, and have developed 
relative weights for each MS-DRG that reflect the resource utilization 
of cases in each MS-DRG relative to Medicare cases in other MS-DRGs. 
Table 5 of section V. of the Addendum to this final rule with comment 
period contains the relative weights that we will apply to discharges 
occurring in FY 2008. These factors have been recalibrated as explained 
in section II. of the preamble of this final rule with comment period.

D. Calculation of the Prospective Payment Rates

    General Formula for Calculation of the Prospective Payment Rates 
for FY 2008. In general, the operating prospective payment rate for all 
hospitals paid under the IPPS located outside of Puerto Rico, except 
SCHs and MDHs, for FY 2008 equals the Federal rate.
    The prospective payment rate for SCHs for FY 2008 equals the higher 
of the applicable Federal rate, or the hospital-specific rate as 
described below. The prospective payment rate for MDHs for FY 2008 
equals the higher of the Federal rate, or the Federal rate plus 75 
percent of the difference between the Federal rate and the hospital-
specific rate as described below. The prospective payment rate for 
hospitals located in Puerto Rico for FY 2008 equals 25 percent of the 
Puerto Rico rate plus 75 percent of the applicable national rate.
1. Federal Rate
    The Federal rate is determined as follows:
    Step 1--Select the applicable average standardized amount depending 
on whether the hospital submitted qualifying quality data (full update 
for qualifying hospitals, update minus 2.0 percentage points for 
nonqualifying hospitals).
    Step 2--Multiply the labor-related portion of the standardized 
amount by the applicable wage index for the geographic area in which 
the hospital is located or the area to which the hospital is 
reclassified.
    Step 3--For hospitals in Alaska and Hawaii, multiply the non-labor-
related portion of the standardized amount by the applicable cost-of-
living adjustment factor.
    Step 4--Add the amount from Step 2 and the non-labor-related 
portion of the standardized amount (adjusted, if applicable, under Step 
3).
    Step 5--Multiply the final amount from Step 4 by the relative 
weight corresponding to the applicable MS-DRG (see Table 5 of section 
V. of the Addendum to this final rule with comment period).
    The Federal rate as determined in Step 5 is then further adjusted 
if the hospital qualifies for either the IME or DSH adjustment. In 
addition, for hospitals that qualify for a low-volume payment 
adjustment under section 1886(d)(12) of the Act, the payment in Step 5 
is increased by 25 percent.
2. Hospital-Specific Rate (Applicable Only to SCHs and MDHs)
a. Calculation of Hospital-Specific Rate
    Section 1886(b)(3)(C) of the Act provides that SCHs are paid based 
on whichever of the following rates yields the greatest aggregate 
payment: the Federal rate; the updated hospital-specific rate based on 
FY 1982 costs per discharge; the updated hospital-specific rate based 
on FY 1987 costs per discharge; or the updated hospital-specific rate 
based on FY 1996 costs per discharge.
    As discussed previously, MDHs are required to rebase their 
hospital-specific rates to their FY 2002 cost reports if doing so 
results in higher payments. In addition, effective for discharges 
occurring on or after October 1, 2006, MDHs are to be paid based on the 
Federal national rate or, if higher, the Federal national rate plus 75 
percent (changed from 50 percent) of the difference between the Federal 
national rate and the greater of the updated hospital-specific rates 
based on either FY 1982, FY 1987 or FY 2002 costs per

[[Page 47423]]

discharge. Further, MDHs are no longer subject to the 12-percent cap on 
their DSH payment adjustment factor.
    Hospital-specific rates have been determined for each of these 
hospitals based on the FY 1982 costs per discharge, the FY 1987 costs 
per discharge, or, for SCHs, the FY 1996 costs per discharge and for 
MDHs, the FY 2002 cost per discharge. For a more detailed discussion of 
the calculation of the hospital-specific rates, we refer the reader to 
the FY 1984 IPPS interim final rule (48 FR 39772); the April 20, 1990 
final rule with comment (55 FR 15150); the FY 1991 IPPS final rule (55 
FR 35994); and the FY 2001 IPPS final rule (65 FR 47082). In addition, 
for both SCHs and MDHs, the hospital-specific rate is adjusted by the 
budget neutrality adjustment factor as discussed in section IV.C. of 
the preamble to this final rule with comment period. The resulting rate 
is used in determining the payment rate an SCH or MDH will receive for 
its discharges beginning on or after October 1, 2007.
    Comment: One commenter stated that CMS did not formally state a 
budget neutrality factor for the hospital-specific rate in the proposed 
rule and omitted it from the final notice of IPPS rates for FY 2007 
published in Federal Register on October 11, 2006. The commenter asked 
that the CMS formally state the budget neutrality factor that will 
apply to the hospital-specific rates for SCHs and MDHs. Further, the 
commenter requested that the documentation and coding adjustment not 
apply to the hospital-specific rate for MDHs and SCHs.
    Response: We regret not publishing the DRG recalibration budget 
neutrality factor that is applicable to the hospital-specific rate for 
MDHs and SCHs in the final notice of IPPS rates for FY 2007 published 
in the Federal Register on October 11, 2007. We will make the annual 
DRG recalibration budget neutrality factor available in this section of 
each year's IPPS proposed and final rules. The FY 2008 DRG 
recalibration factor that will apply to the hospital-specific rate of 
MDHs and SCHs is 0.983962. This factor includes the -1.2 percent 
documentation and coding adjustment.
    Hospitals that are paid under section 1886(d) of the Act based on a 
hospital-specific rate are subject to the DRG reclassification and 
recalibration factor component of the budget neutrality adjustment 
because, as IPPS, hospitals, they are paid based on DRGs. Changes in 
DRG relative weights from one year to the next affect aggregate SCH and 
MDH payments, which, in turn, affect total payments to hospitals under 
section 1886(d) of the Act. Because SCHs and MDHs are paid under 
section 1886(d) of the Act, we believe their DRG payments should be 
factored into the DRG reclassification and recalibration factor 
component of the budget neutrality adjustment to ensure that 
recalibration does not affect total payments to hospitals under section 
1886(d) of the Act. Similarly, we believe the hospital-specific rates 
for MDHs and SCHs should be subject to the documentation and coding 
adjustment we are applying under section 1886(d)(3)(A)(vi) of the Act 
to maintain budget neutrality for the adoption of the MS DRGs. That is, 
as these hospitals use the same DRG system as all other hospitals, we 
believe they should be equally subject to the budget neutrality 
adjustment that we are applying for adoption of the MS-DRGs to all 
other hospitals.
b. Updating the FY 1982, FY 1987, FY 1996, and FY 2002 Hospital 
Specific Rates for FY 2008
    We are increasing the hospital-specific rates by 3.3 percent (the 
estimated hospital market basket percentage increase) for SCHs and MDHs 
for FY 2008. Section 1886(b)(3)(C)(iv) of the Act provides that the 
update factor applicable to the hospital-specific rates for SCHs is 
equal to the update factor provided under section 1886(b)(3)(B)(iv) of 
the Act, which, for SCHs in FY 2008, is the market basket rate-of-
increase. Section 1886(b)(3)(D) of the Act provides that the update 
factor applicable to the hospital-specific rates for MDHs also equals 
the update factor provided under section 1886(b)(3)(B)(iv) of the Act, 
which, for FY 2008, is the market basket rate-of-increase. For those 
SCHs and MDHs that fail to submit quality data, the update to the 
hospital-specific rates is 1.3 percent.
3. General Formula for Calculation of Prospective Payment Rates for 
Hospitals Located in Puerto Rico Beginning On or After October 1, 2007, 
and Before October 1, 2008
    Section 1886(d)(9)(E)(iv) of the Act provides that, effective for 
discharges occurring on or after October 1, 2004, hospitals located in 
Puerto Rico are paid based on a blend of 75 percent of the national 
prospective payment rate and 25 percent of the Puerto Rico-specific 
rate.
a. Puerto Rico Rate
    The Puerto Rico prospective payment rate is determined as follows:
    Step 1--Select the applicable average standardized amount 
considering the applicable wage index (see Table 1C).
    Step 2--Multiply the labor-related portion of the standardized 
amount by the applicable Puerto Rico-specific wage index.
    Step 3--Add the amount from Step 2 and the nonlabor-related portion 
of the standardized amount.
    Step 4--Multiply the amount from Step 3 by the applicable MS-DRG 
relative weight (see Table 5 of section V. of the Addendum to this 
final rule with comment period).
    Step 5--Multiply the result in Step 4 by 25 percent.
b. National Rate
    The national prospective payment rate is determined as follows:
    Step 1--Select the applicable average standardized amount.
    Step 2--Multiply the labor-related portion of the standardized 
amount by the applicable wage index for the geographic area in which 
the hospital is located or the area to which the hospital is 
reclassified.
    Step 3--Add the amount from Step 2 and the nonlabor-related portion 
of the national average standardized amount.
    Step 4--Multiply the amount from Step 3 by the applicable MS-DRG 
relative weight (see Table 5 of section V. of the Addendum to this 
final rule with comment period).
    Step 5--Multiply the result in Step 4 by 75 percent.
    The sum of the Puerto Rico rate and the national rate computed 
above equals the prospective payment for a given discharge for a 
hospital located in Puerto Rico. This rate is then further adjusted if 
the hospital qualifies for either the IME or DSH adjustment.

III. Changes to Payment Rates for Acute Care Hospital Inpatient 
Capital-Related Costs for FY 2008

    The PPS for acute care hospital inpatient capital-related costs was 
implemented for cost reporting periods beginning on or after October 1, 
1991. Effective with that cost reporting period, hospitals were paid 
during a 10-year transition period (which extended through FY 2001) to 
change the payment methodology for Medicare acute care hospital 
inpatient capital-related costs from a reasonable cost-based 
methodology to a prospective methodology based fully on the Federal 
rate.
    The basic methodology for determining Federal capital prospective 
rates is set forth in the regulations at 42 CFR 412.308 through 
412.352. Below we discuss the factors that we used to

[[Page 47424]]

determine the capital Federal rate for FY 2008, which is effective for 
discharges occurring on or after October 1, 2007.
    The 10-year transition period ended with hospital cost reporting 
periods beginning on or after October 1, 2001 (FY 2002). Therefore, for 
cost reporting periods beginning in FY 2002, all hospitals (except 
``new'' hospitals under Sec.  412.304(c)(2)) are paid based on 100 
percent of the capital Federal rate. For FY 1992, we computed the 
standard Federal payment rate for capital-related costs under the IPPS 
by updating the FY 1989 Medicare inpatient capital cost per case by an 
actuarial estimate of the increase in Medicare inpatient capital costs 
per case. Each year after FY 1992, we update the capital standard 
Federal rate, as provided at Sec.  412.308(c)(1), to account for 
capital input price increases and other factors. The regulations at 
Sec.  412.308(c)(2) provide that the capital Federal rate be adjusted 
annually by a factor equal to the estimated proportion of outlier 
payments under the capital Federal rate to total capital payments under 
the capital Federal rate. In addition, Sec.  412.308(c)(3) requires 
that the capital Federal rate be reduced by an adjustment factor equal 
to the estimated proportion of payments for (regular and special) 
exceptions under Sec.  412.348. Section 412.308(c)(4)(ii) requires that 
the capital standard Federal rate be adjusted so that the effects of 
the annual DRG reclassification and the recalibration of DRG weights 
and changes in the geographic adjustment factor are budget neutral.
    For FYs 1992 through 1995, Sec.  412.352 required that the capital 
Federal rate also be adjusted by a budget neutrality factor so that 
aggregate payments for inpatient hospital capital costs were projected 
to equal 90 percent of the payments that would have been made for 
capital-related costs on a reasonable cost basis during the fiscal 
year. That provision expired in FY 1996. Section 412.308(b)(2) 
describes the 7.4 percent reduction to the capital rate that was made 
in FY 1994, and Sec.  412.308(b)(3) describes the 0.28 percent 
reduction to the capital rate made in FY 1996 as a result of the 
revised policy for paying for transfers. In FY 1998, we implemented 
section 4402 of Pub. L. 105-33, which required that, for discharges 
occurring on or after October 1, 1997, the budget neutrality adjustment 
factor in effect as of September 30, 1995, be applied to the unadjusted 
capital standard Federal rate and the unadjusted hospital-specific 
rate. That factor was 0.8432, which was equivalent to a 15.68 percent 
reduction to the unadjusted capital payment rates. An additional 2.1 
percent reduction to the rates was effective from October 1, 1997 
through September 30, 2002, making the total reduction 17.78 percent. 
As we discussed in the FY 2003 IPPS final rule (67 FR 50102) and 
implemented in Sec.  412.308(b)(6) of the regulations, the 2.1 percent 
reduction was restored effective October 1, 2002.
    To determine the appropriate budget neutrality adjustment factor 
and the regular exceptions payment adjustment during the 10-year 
transition period, we developed a dynamic model of Medicare inpatient 
capital-related costs; that is, a model that projected changes in 
Medicare inpatient capital-related costs over time. With the expiration 
of the budget neutrality provision, the capital cost model was only 
used to estimate the regular exceptions payment adjustment and other 
factors during the transition period. As we explained in the FY 2002 
IPPS final rule (66 FR 39911), beginning in FY 2002, an adjustment for 
regular exception payments is no longer necessary because regular 
exception payments were only made for cost reporting periods beginning 
on or after October 1, 1991, and before October 1, 2001 (see Sec.  
412.348(b)). Because payments are no longer made under the regular 
exception policy effective with cost reporting periods beginning in FY 
2002, we discontinued use of the capital cost model. The capital cost 
model and its application during the transition period are described in 
Appendix B of the FY 2002 IPPS final rule (66 FR 40099).
    Section 412.374 provides for the use of a blended payment system 
for payments to hospitals located in Puerto Rico under the IPPS for 
acute care hospital inpatient capital-related costs. Accordingly, under 
the capital PPS, we compute a separate payment rate specific to 
hospitals located in Puerto Rico using the same methodology used to 
compute the national Federal rate for capital-related costs. In 
accordance with section 1886(d)(9)(A) of the Act, under the IPPS for 
acute care hospital operating costs, hospitals located in Puerto Rico 
are paid for operating costs under a special payment formula. Prior to 
FY 1998, hospitals located in Puerto Rico were paid a blended operating 
rate that consisted of 75 percent of the applicable standardized amount 
specific to Puerto Rico hospitals and 25 percent of the applicable 
national average standardized amount. Similarly, prior to FY 1998, 
hospitals located in Puerto Rico were paid a blended capital rate that 
consisted of 75 percent of the applicable capital Puerto Rico-specific 
rate and 25 percent of the applicable capital Federal rate. However, 
effective October 1, 1997, in accordance with section 4406 of Pub. L. 
105-33, the methodology for operating payments made to hospitals 
located in Puerto Rico under the IPPS was revised to make payments 
based on a blend of 50 percent of the applicable standardized amount 
specific to Puerto Rico hospitals and 50 percent of the applicable 
national average standardized amount. In conjunction with this change 
to the operating blend percentage, effective with discharges occurring 
on or after October 1, 1997, we also revised the methodology for 
computing capital payments to hospitals located in Puerto Rico to be 
based on a blend of 50 percent of the Puerto Rico capital rate and 50 
percent of the capital Federal rate.
    As we discussed in the FY 2005 IPPS final rule (69 FR 49185), 
section 504 of Pub. L. 108-173 increased the national portion of the 
operating IPPS payments for hospitals located in Puerto Rico from 50 
percent to 62.5 percent and decreased the Puerto Rico portion of the 
operating IPPS payments from 50 percent to 37.5 percent for discharges 
occurring on or after April 1, 2004 through September 30, 2004 (see the 
March 26, 2004 One-Time Notification (Change Request 3158)). In 
addition, section 504 of Pub. L. 108-173 provided that the national 
portion of operating IPPS payments for hospitals located in Puerto Rico 
be equal to 75 percent and the Puerto Rico portion of operating IPPS 
payments be equal to 25 percent for discharges occurring on or after 
October 1, 2004. Consistent with that change in operating IPPS payments 
to hospitals located in Puerto Rico, for FY 2005 (as we discussed in 
the FY 2005 IPPS final rule), we revised the methodology for computing 
capital payments to hospitals located in Puerto Rico to be based on a 
blend of 25 percent of the Puerto Rico capital rate and 75 percent of 
the capital Federal rate for discharges occurring on or after October 
1, 2004.

A. Determination of Federal Hospital Inpatient Capital Related 
Prospective Payment Rate Update

    In the FY 2007 IPPS final rule (71 FR 48161), we established a 
tentative capital Federal rate of $427.38 for FY 2007. In the Federal 
Register notice establishing the occupational mix adjusted payment 
rates for FY 2007 (71 FR 59891), we established the final FY 2007 
Federal rate of $427.03 for FY 2007. In the discussion that follows, we 
explain the factors that we used to determine the FY 2008 capital 
Federal rate. In particular, we explain why the FY 2008 capital Federal 
rate will decrease approximately 0.86 percent,

[[Page 47425]]

compared to the FY 2007 capital Federal rate. (As discussed in section 
V. of the preamble of this final rule with comment period, we did not 
finalize the proposed zero percent update for urban hospitals, which 
would have resulted in separate capital Federal rates for FY 2008 for 
rural hospitals and for urban hospitals. Thus, a single capital Federal 
rate for FY 2008 was determined for all hospitals.) However, taking 
into account an estimated increase in Medicare fee-for-service 
discharges in FY 2008 as compared to FY 2007, we estimated aggregate 
capital payments will increase by approximately 2.9 percent during this 
same period. Total payments to hospitals under the IPPS are relatively 
unaffected by changes in the capital prospective payments. Because 
capital payments constitute about 10 percent of hospital payments, a 1 
percent change in the capital Federal rate yields only about a 0.1 
percent change in actual payments to hospitals. As noted above, 
aggregate payments under the capital IPPS are projected to increase in 
FY 2008 compared to FY 2007.
1. Projected Capital Standard Federal Rate Update
a. Description of the Update Framework
    Under Sec.  412.308(c)(1), the capital standard Federal rate is 
updated on the basis of an analytical framework that takes into account 
changes in a capital input price index (CIPI) and several other policy 
adjustment factors. Specifically, we have adjusted the projected CIPI 
rate-of-increase as appropriate each year for case-mix index-related 
changes, for intensity, and for errors in previous CIPI forecasts. The 
update factor for FY 2008 under that framework is 0.9 percent based on 
the best data available at this time. The update factor under that 
framework is based on a projected 1.3 percent increase in the CIPI, a 
0.0 percent adjustment for intensity, a 0.0 percent adjustment for 
case-mix, a -0.4 percent adjustment for the FY 2006 DRG 
reclassification and recalibration, and a forecast error correction of 
0.0 percent. As discussed below in section III.C. of the Addendum to 
this final rule with comment period, we continue to believe that the 
CIPI is the most appropriate input price index for capital costs to 
measure capital price changes in a given year. We also explain the 
basis for the FY 2008 CIPI projection in that same section of this 
Addendum. As noted above, and as discussed in greater detail in section 
V. of the preamble of this final rule with comment period, we are not 
finalizing the proposed zero percent update for urban hospitals, which 
would have resulted in separate capital Federal rates for FY 2008 for 
rural hospitals and for urban hospitals. Therefore, we applied the 0.9 
percent FY 2008 update factor to all hospitals. In addition, as also 
noted below, the capital rates have been further adjusted to account 
for documentation and coding improvements under the MS-DRGs discussed 
in section II.D. of the preamble of this final rule with comment 
period. Below we describe the policy adjustments that have been applied 
in the update framework for FY 2008.
    The case-mix index is the measure of the average DRG weight for 
cases paid under the IPPS. Because the DRG weight determines the 
prospective payment for each case, any percentage increase in the case-
mix index corresponds to an equal percentage increase in hospital 
payments.
    The case-mix index can change for any of several reasons:
    <bullet> The average resource use of Medicare patients changes 
(``real'' case-mix change);
    <bullet> Changes in hospital coding of patient records result in 
higher weight DRG assignments (``coding effects''); and
    <bullet> The annual DRG reclassification and recalibration changes 
may not be budget neutral (``reclassification effect'').
    We define real case-mix change as actual changes in the mix (and 
resource requirements) of Medicare patients as opposed to changes in 
coding behavior that result in assignment of cases to higher weighted 
DRGs but do not reflect higher resource requirements. The capital 
update framework includes the same case-mix index adjustment used in 
the former operating IPPS update framework (as discussed in the May 18, 
2004 IPPS proposed rule for FY 2005 (69 FR 28816)). (We no longer use 
an update framework to make a recommendation for updating the operating 
IPPS standardized amounts as discussed in section II. of Appendix B in 
the FY 2006 IPPS final rule (70 FR 47707).)
    Absent the change to the MS-DRGs, for FY 2008, we project a 1.0 
percent total increase in the case-mix index. We estimate that the real 
case-mix increase will also equal 1.0 percent for FY 2008. The net 
adjustment for change in case-mix is the difference between the 
projected real increase in case-mix and the projected total increase in 
case-mix. Therefore, the net adjustment for case-mix change in FY 2008 
is 0.0 percentage points.
    The capital update framework also contains an adjustment for the 
effects of DRG reclassification and recalibration. This adjustment is 
intended to remove the effect on total payments of prior year's changes 
to the DRG classifications and relative weights, in order to retain 
budget neutrality for all case-mix index-related changes other than 
those due to patient severity. Due to the lag time in the availability 
of data, there is a 2-year lag in data used to determine the adjustment 
for the effects of DRG reclassification and recalibration. For example, 
we adjusted for the effects of the FY 2006 DRG reclassification and 
recalibration as part of our update for FY 2008. We estimate that FY 
2006 DRG reclassification and recalibration resulted in a 0.4 percent 
change in the case-mix when compared with the case-mix index that would 
have resulted if we had not made the reclassification and recalibration 
changes to the DRGs. Therefore, we are making a -0.4 percent adjustment 
for DRG reclassification in the update for FY 2008 to maintain budget 
neutrality.
    The capital update framework also contains an adjustment for 
forecast error. The input price index forecast is based on historical 
trends and relationships ascertainable at the time the update factor is 
established for the upcoming year. In any given year, there may be 
unanticipated price fluctuations that may result in differences between 
the actual increase in prices and the forecast used in calculating the 
update factors. In setting a prospective payment rate under the 
framework, we make an adjustment for forecast error only if our 
estimate of the change in the capital input price index for any year is 
off by 0.25 percentage points or more. There is a 2-year lag between 
the forecast and the availability of data to develop a measurement of 
the forecast error. A forecast error of 0.10 percentage point was 
calculated for the FY 2006 update. That is, current historical data 
indicate that the forecasted FY 2006 CIPI (0.80 percent) used in 
calculating the FY 2006 update factor slightly understated the actual 
realized price increases (0.90 percent) by 0.10 percentage point. This 
slight underprediction was mostly due to the incorporation of newly 
available source data for fixed asset prices into the market basket. 
However, because this estimation of the change in the CIPI is less than 
0.25 percentage points, it is not reflected in the update recommended 
under this framework. Therefore, we are making a 0.0 percent adjustment 
for forecast error in the update for FY 2008.
    Under the capital IPPS update framework, we also make an adjustment 
for changes in intensity. We calculate this adjustment using the same 
methodology and data that were used in

[[Page 47426]]

the past under the framework for operating IPPS. The intensity factor 
for the operating update framework reflects how hospital services are 
utilized to produce the final product, that is, the discharge. This 
component accounts for changes in the use of quality-enhancing 
services, for changes within DRG severity, and for expected 
modification of practice patterns to remove noncost-effective services.
    We calculate case-mix constant intensity as the change in total 
charges per admission, adjusted for price level changes (the CPI for 
hospital and related services) and changes in real case-mix. The use of 
total charges in the calculation of the intensity factor makes it a 
total intensity factor; that is, charges for capital services are 
already built into the calculation of the factor. Therefore, we have 
incorporated the intensity adjustment from the operating update 
framework into the capital update framework. Without reliable estimates 
of the proportions of the overall annual intensity increases that are 
due, respectively, to ineffective practice patterns and the combination 
of quality-enhancing new technologies and complexity within the DRG 
system, we assume that one-half of the annual increase is due to each 
of these factors. The capital update framework thus provides an add-on 
to the input price index rate of increase of one-half of the estimated 
annual increase in intensity, to allow for increases within DRG 
severity and the adoption of quality-enhancing technology.
    We have developed a Medicare-specific intensity measure based on a 
5-year average. Past studies of case-mix change by the RAND Corporation 
(Has DRG Creep Crept Up? Decomposing the Case Mix Index Change Between 
1987 and 1988 by G.M. Carter, J.P. Newhouse, and D.A. Relles, R-4098-
HCFA/ProPAC (1991)) suggest that real case-mix change was not dependent 
on total change, but was usually a fairly steady increase of 1.0 to 1.5 
percent per year. However, we used 1.4 percent as the upper bound 
because the RAND study did not take into account that hospitals may 
have induced doctors to document medical records more completely in 
order to improve payment.
    We calculate case-mix constant intensity as the change in total 
charges per admission, adjusted for price level changes (the CPI for 
hospital and related services), and changes in real case-mix. As we 
noted above, in accordance with Sec.  412.308(c)(1)(ii), we began 
updating the capital standard Federal rate in FY 1996 using an update 
framework that takes into account, among other things, allowable 
changes in the intensity of hospital services. For FYs 1996 through 
2001, we found that case-mix constant intensity was declining, and we 
established a 0.0 percent adjustment for intensity in each of those 
years. For FYs 2002 and 2003, we found that case-mix constant intensity 
was increasing, and we established a 0.3 percent adjustment and 1.0 
percent adjustment for intensity, respectively. For FYs 2004 and 2005, 
we found that the charge data appeared to be skewed (as discussed in 
greater detail below), and we established a 0.0 percent adjustment in 
each of those years. Furthermore, we stated that we would continue to 
apply a 0.0 percent adjustment for intensity until any increase in 
charges can be tied to intensity rather than attempts to maximize 
outlier payments.
    As noted above, our intensity measure is based on a 5-year average, 
and therefore, the intensity adjustment for FY 2008 is based on data 
from the 5-year period beginning with FY 2002 and extending through FY 
2006. We found a dramatic increase in hospital charges for each of 
those 5 years without a corresponding increase in the hospital case-mix 
index. These findings are similar to the considerable increase in 
hospitals' charges, which we found when we were determining the 
intensity factor in the FY 2004, FY 2005 and FY 2006 update 
recommendations as discussed in the FY 2004 IPPS final rule (68 FR 
45482), the FY 2005 IPPS final rule (69 FR 49285), the FY 2006 IPPS 
final rule (70 FR 47500), and the FY 2007 IPPS final rule (72 FR 
47500), respectively. If hospitals were treating new or different types 
of cases, which would result in an appropriate increase in charges per 
discharge, then we would expect hospitals' case-mix to increase 
proportionally.
    As we discussed in the FY 2006 IPPS final rule (70 FR 47500) and 
the FY 2007 IPPS final rule (71 FR 48157), because our intensity 
calculation relies heavily upon charge data and we believe that these 
charge data may be inappropriately skewed, we established a 0.0 percent 
adjustment for intensity for FY 2006 and FY 2007, respectively.
    On June 9, 2003, we published in the Federal Register revisions to 
our outlier policy for determining the additional payment for 
extraordinarily high-cost cases (68 FR 34494 through 34515). These 
revised policies were effective on August 8, 2003, and October 1, 2003. 
While it does appear that a response to these policy changes is 
beginning to occur, that is, the change in charges for FYs 2004 and 
2005 are somewhat less than the previous 4 years, and the change in 
charges for FY 2006 is slightly less than FY 2005, they still show a 
significant annual increase in charges without a corresponding increase 
in hospital case-mix. The increase in charges in FY 2004, for example, 
is approximately 12 percent, which, while less than the increase in the 
previous 3 years, is still much higher than increases in years prior to 
FY 2001. In addition, this approximate 12 percent increase in charges 
for FY 2004 significantly exceeds the case mix increase for the same 
period. Based on the approximate 12 percent increase in charges for FY 
2004, we believe residual effects of hospitals' charge practices prior 
to the implementation of the outlier policy revisions established in 
the June 9, 2003 final rule continue to appear in the data because 
hospitals may not have had enough time to adopt changes in their 
behavior in response to the new outlier policy. Thus, we believe that 
the FY 2004, FY 2005, and FY 2006 charge data may still be skewed. 
Because the intensity adjustment is based on a 5-year average, and 
although the new outlier policy was generally effective in FY 2004, we 
believe the effects of hospitals attempting to maximize outlier 
payments, while lessening costs, continue to skew the charge data.
    Therefore, we are making a 0.0 percent adjustment for intensity for 
FY 2008. In the past (FYs 1996 through 2001) when we found intensity to 
be declining, we believed a zero (rather than negative) intensity 
adjustment was appropriate. Similarly, we believe that it is 
appropriate to apply a zero intensity adjustment for FY 2008 until any 
increase in charges can be tied to intensity rather than to attempts to 
maximize outlier payments.
    Above, we described the basis of the components used to develop the 
0.9 percent capital update factor under the capital update framework 
for FY 2008 as shown in the table below. (As noted above and as 
discussed in section V. of the preamble of this final rule with comment 
period, we are not finalizing the proposed zero percent update for 
urban hospitals. Thus, the 0.9 percent capital update factor discussed 
above was applied in determining the capital Federal rate for FY 2008 
for all hospitals.)

 CMS FY 2008 Update Factor to the Capital Federal Rate for All Hospitals
------------------------------------------------------------------------
 
------------------------------------------------------------------------
Capital Input Price Index....................................        1.3
Intensity:...................................................        0.0
Case-Mix Adjustment Factors:
    Real Across DRG Change...................................        1.0
    Projected Case-Mix Change................................       -1.0
                                                              ----------

[[Page 47427]]

 
        Subtotal.............................................        0.0
Effect of FY 2005 Reclassification and Recalibration.........       -0.4
Forecast Error Correction....................................        0.0
                                                              ----------
    Total Update for Hospitals...............................        0.9
------------------------------------------------------------------------

b. MedPAC Update Recommendation
    In the past, MedPAC has included update recommendations for capital 
PPS in a Report to Congress. In its March 2007 Report to Congress, 
MedPAC did not make an update recommendation for capital IPPS payments 
for FY 2008. However, in that same report, MedPAC made an update 
recommendation for hospital inpatient and outpatient services (page 
67). MedPAC reviews inpatient and outpatient services together because 
they are so closely interrelated. For FY 2008, MedPAC recommended an 
increase in the payment rate for the operating IPPS by the projected 
increase in the hospital market basket index concurrent with 
implementation of a quality incentive payment policy. (MedPAC's Report 
to the Congress: Medicare Payment Policy, March 2007, Section 2A.)
2. Outlier Payment Adjustment Factor
    Section 412.312(c) establishes a unified outlier payment 
methodology for inpatient operating and inpatient capital related 
costs. A single set of thresholds is used to identify outlier cases for 
both inpatient operating and inpatient capital related payments. 
Section 412.308(c)(2) provides that the standard Federal rate for 
inpatient capital related costs be reduced by an adjustment factor 
equal to the estimated proportion of capital related outlier payments 
to total inpatient capital related PPS payments. The outlier thresholds 
are set so that operating outlier payments are projected to be 5.1 
percent of total operating DRG payments.
    Comment: One commenter expressed concern regarding the 
``significant change'' to the proposed outlier adjustment factor that 
has been applied in determining the proposed FY 2008 capital Federal 
Rate, which would have the effect of decreasing the FY 2008 capital 
Federal Rate by 0.88 percent (72 FR 24847). The commenter stated that 
there seems to be a ``large change'' in the capital outlier adjustment 
factor, given the fact that both the FY 2008 IPPS proposed rule (72 FR 
24837) and the FY 2007 IPPS final rule (71 FR 48151) indicate that 
estimated capital outlier payments would equal 4.87 percent of capital 
IPPS payments. The commenter pointed out that, in both the FY 2008 IPPS 
proposed rule and the FY 2007 IPPS final rule, there appears to be 
inconsistencies regarding the estimated percentage of capital outlier 
payments. Specifically, in the FY 2007 IPPS final rule (71 FR 48151), 
in section II.A.4.c.ii. of the Addendum, it states that capital outlier 
payments are estimated to be 4.87 percent in FY 2007, while in section 
III.A.2. of the Addendum of that same final rule (71 FR 48158), it 
states that we estimate that capital outlier payments would equal 4.32 
percent in FY 2007. Similarly, in the FY 2008 IPPS proposed rule (72 FR 
24837), in section II.A.4.d.(2). of the Addendum, it states that 
capital outlier payments are estimated to be 4.87 percent in FY 2008, 
while in section III.A.1.b. of the Addendum of that same proposed rule 
(72 FR 24843), it states that we estimate that proposed capital outlier 
payments would equal 5.16 percent in FY 2008. The commenter requested 
that CMS explain the inconsistencies in estimated capital outlier 
payments noted above and that CMS review the calculations to ensure 
that the correct outlier adjustment is applied in determining the 
capital Federal rate for FY 2008.
    Response: We appreciate the commenter bringing the inconsistencies 
in estimated capital outlier payments in the FY 2007 IPPS final rule 
and the FY 2008 IPPS proposed rule to our attention. After careful 
review of the calculation of the outlier adjustment factors used in 
determining the FY 2007 and proposed FY 2008 capital Federal rates, 
respectively, we have determined that the estimated 4.87 percent of 
capital outlier payments for both FY 2007 and FY 2008 as stated in 
section II.A.4.c.ii. of the Addendum of the FY 2007 IPPS final rule (71 
FR 48151) and in section II.A.4.d.(2). of the Addendum of the FY 2008 
IPPS proposed rule (72 FR 24837), respectively, were typographical 
errors. The correct estimate of capital outlier payment for FY 2007 was 
4.32 percent, and therefore, we applied an outlier adjustment of 0.9568 
(1 - 0.0432 = 0.9568) in determining the FY 2007 capital Federal rate, 
as discussed in section III.A.2. of the Addendum of the FY 2007 IPPS 
final rule (71 FR 48158). The correct estimate of proposed capital 
outlier payment for FY 2008 is 5.16 percent, and therefore, we proposed 
to apply an outlier offset of 0.9484 (1 - 0.0516 = 0.9484) in 
determining the proposed FY 2008 capital Federal rate, as stated in 
section III.A.1.b. of the Addendum of the FY 2008 IPPS proposed rule 
(72 FR 24843). We also note that we estimate that the percentage of 
capital outlier payments to total capital standard payments for FY 2008 
will be slightly higher than the percentages for FY 2007, and that the 
outlier reduction factors are not applied cumulatively in determining 
the capital Federal rate. Therefore, the net change in the proposed 
outlier adjustment to the proposed capital Federal rate for FY 2008 is 
0.9912 (0.9484/0.9568) or -0.88 percent. Thus, the proposed outlier 
adjustment decreases the proposed FY 2008 capital Federal rate by -0.88 
percent compared with the FY 2007 outlier adjustment (72 FR 24843).
    While it may appear that there is a ``large change'' in the 
estimate of capital outlier payments (and capital outlier offset) from 
FY 2007 to FY 2008, we wish to point out that the estimated 5.16 
percent proposed for FY 2008 does not appear to be considerably 
different from our estimate of capital outlier payments for the past 
several years of 4.87 percent proposed for FY 2007 (71 FR 24196), 4.85 
percent established for FY 2006 (70 FR 47501), 5.03 percent proposed 
for FY 2006 (70 FR 23477) and for FY 2005 (69 FR 28383), 4.94 percent 
established for FY 2005 (69 FR 49286), 4.77 percent established for the 
first half of FY 2004 (68 FR 57734), 4.92 percent established for the 
second half of FY 2004 (Change Request 3158; March 26, 2004), 5.45 
percent proposed for FY 2004 (68 FR 27240), 5.31 percent established 
for FY 2003 (67 FR 50129), and 5.40 percent proposed for FY 2003 (67 FR 
31514). We also note, as discussed in the FY 2008 IPPS proposed rule 
(72 FR 24837), we proposed a lower fixed-loss outlier threshold in FY 
2008 compared to FY 2007. We explained that as we are better able to 
estimate the costs using CCRs and charges, and cases are paid more 
accurately with better recognition of severity of illness using the 
proposed MS-DRGS, in order to meet the 5.1 percent target for operating 
IPPS outlier payments, we proposed to decrease the fixed-loss outlier 
threshold so that more cases qualify for outlier payments. As explained 
below, Sec.  412.312(c) provides for a single set of thresholds to 
identify outlier cases for both operating and inpatient capital IPPS 
payments. Therefore, we believe it is appropriate that the estimate of 
capital outlier payments would increase for FY 2008 as compared to FY 
2007. As requested by the commenter and as stated above, we have 
carefully reviewed the calculations to ensure that the correct outlier 
adjustment, as discussed in greater detail below, is applied in 
determining the capital Federal rate for FY 2008. (We

[[Page 47428]]

note that there is usually a change in the outlier adjustment between 
the proposed and final rules for a given year due to the use of more 
updated data and any changes between proposed and finalized policies 
that affect payments. For example, in the FY 2007 proposed rule (71 FR 
24196), the proposed FY 2007 outlier offset was 0.9513, while we 
established an outlier offset for FY 2007 of 0.9568, as discussed 
below.)
    In the Federal Register notice establishing the final occupational 
mix adjusted payment rates for FY 2007 (71 FR 59890), we estimated that 
outlier payments for capital would equal 4.32 percent of inpatient 
capital related payments based on the capital Federal rate in FY 2007. 
Based on the thresholds as set forth in section II.A. of the Addendum 
to this final rule with comment period, we estimate that outlier 
payments for capital-related costs will equal 4.83 percent for 
inpatient capital-related payments based on the Federal rate in FY 
2008. Therefore, we are applying an outlier adjustment factor of 0.9517 
to the capital Federal rate. Thus, we estimate that the percentage of 
capital outlier payments to total capital standard payments for FY 2008 
will be slightly higher than the percentages for FY 2007.
    The outlier reduction factors are not built permanently into the 
capital rates; that is, they are not applied cumulatively in 
determining the capital Federal rate. The FY 2008 outlier adjustment of 
0.9517 is a -0.53 percent change from the FY 2007 outlier adjustment of 
0.9568. Therefore, the net change in the outlier adjustment to the 
capital Federal rate for FY 2008 is 0.9947 (0.9517/0.9568). Thus, the 
outlier adjustment decreases the FY 2008 capital Federal rate by 0.53 
percent compared with the FY 2007 outlier adjustment.
3. Budget Neutrality Adjustment Factor for Changes in DRG 
Classifications and Weights and the GAF
    Section 412.308(c)(4)(ii) requires that the capital Federal rate be 
adjusted so that aggregate payments for the fiscal year based on the 
capital Federal rate after any changes resulting from the annual DRG 
reclassification and recalibration and changes in the GAF are projected 
to equal aggregate payments that would have been made on the basis of 
the capital Federal rate without such changes. Because we implemented a 
separate GAF for Puerto Rico, we apply separate budget neutrality 
adjustments for the national GAF and the Puerto Rico GAF. We apply the 
same budget neutrality factor for DRG reclassifications and 
recalibration nationally and for Puerto Rico. Separate adjustments were 
unnecessary for FY 1998 and earlier because the GAF for Puerto Rico was 
implemented in FY 1998.
    In the past, we used the actuarial capital cost model (described in 
Appendix B of the FY 2002 IPPS final rule (66 FR 40099)) to estimate 
the aggregate payments that would have been made on the basis of the 
capital Federal rate with and without changes in the DRG 
classifications and weights and in the GAF to compute the adjustment 
required to maintain budget neutrality for changes in DRG weights and 
in the GAF. During the transition period, the capital cost model was 
also used to estimate the regular exception payment adjustment factor. 
As we explain in section III.A. of the Addendum to this final rule with 
comment period, beginning in FY 2002, an adjustment for regular 
exception payments is no longer necessary. Therefore, we will no longer 
use the capital cost model. Instead, we are using historical data based 
on hospitals' actual cost experiences to determine the exceptions 
payment adjustment factor for special exceptions payments.
    To determine the factors for FY 2008, we compared (separately for 
the national capital rate and the Puerto Rico capital rate) estimated 
aggregate capital Federal rate payments based on the FY 2007 DRG 
relative weights and the FY 2007 GAF to estimated aggregate capital 
Federal rate payments based on the FY 2008 relative weights and the FY 
2008 GAF. As we established in the final FY 2007 occupational mix 
adjusted payment rates' notice (71 FR 59890), the budget neutrality 
factors were 0.9906 for the national capital rate and 0.9968 for the 
Puerto Rico capital rate. In making the comparison, we set the 
exceptions reduction factor to 1.00. To achieve budget neutrality for 
the changes in the national GAF, based on calculations using updated 
data, we applied an incremental budget neutrality adjustment of 1.0018 
for FY 2008 to the previous cumulative FY 2007 adjustments of 0.9906, 
yielding an adjustment of 0.9924, through FY 2008. For the Puerto Rico 
GAF, we applied an incremental budget neutrality adjustment of 1.0008 
for FY 2008 to the previous cumulative FY 2007 adjustment of 0.9968, 
yielding a cumulative adjustment of 0.9976 through FY 2008.
    We then compared estimated aggregate capital Federal rate payments 
based on the FY 2007 DRG relative weights and the FY 2007 GAF to 
estimated aggregate capital Federal rate payments based on the FY 2008 
DRG relative weights and the FY 2008 GAF. The incremental adjustment 
for DRG classifications and changes in relative weights is 0.9979 both 
nationally and for Puerto Rico. The cumulative adjustments for DRG 
classifications and changes in relative weights and for changes in the 
GAF through FY 2008 are 0.9903 nationally and 0.9955 for Puerto Rico. 
The following table summarizes the adjustment factors for each fiscal 
year:

[[Page 47429]]



                                         Budget Neutrality Adjustment for DRG Reclassifications and Recalibration and the Geographic Adjustment Factors
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                    National                                                             Puerto Rico
                                                     -------------------------------------------------------------------------------------------------------------------------------------------
                                                                     Incremental adjustment                                                Incremental adjustment
                     Fiscal Year                     -----------------------------------------------------                 -----------------------------------------------------
                                                         Geographic           DRG                             Cumulative       Geographic           DRG                             Cumulative
                                                         adjustment    reclassifications      Combined                         adjustment    reclassifications      Combined
                                                           factor      and recalibration                                         factor      and recalibration
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
1992................................................  ...............  .................  ...............          1.00000  ...............  .................  ...............  ...............
1993................................................  ...............  .................          0.99800          0.99800  ...............  .................  ...............  ...............
1994................................................  ...............  .................          1.00531          1.00330  ...............  .................  ...............  ...............
1995................................................  ...............  .................          0.99980          1.00310  ...............  .................  ...............  ...............
1996................................................  ...............  .................          0.99940          1.00250  ...............  .................  ...............  ...............
1997................................................  ...............  .................          0.99873          1.00123  ...............  .................  ...............  ...............
1998................................................  ...............  .................          0.99892          1.00015  ...............  .................  ...............          1.00000
1999................................................          0.99944           1.00335           1.00279          1.00294          0.99898           1.00335           1.00233          1.00233
2000................................................          0.99857           0.99991           0.99848          1.00142          0.99910           0.99991           0.99901          1.00134
\1\2001.............................................          0.99782           1.00009           0.99791          0.99933          1.00365           1.00009           1.00374          1.00508
\2\2001.............................................       \3\0.99771        \3\1.00009        \3\0.99780          0.99922       \3\1.00365        \3\1.00009        \3\1.00374          1.00508
2002................................................       \4\0.99666        \4\0.99668        \4\0.99335          0.99268       \4\0.98991        \4\0.99668        \4\0.99662          0.99164
\5\2003.............................................          0.99915           0.99662           0.99577          0.98848          1.00809           0.99662           1.00468          0.99628
\6\2003.............................................       \7\0.99896        \7\0.99662        \7\0.99558          0.98830          1.00809           0.99662           1.00468          0.99628
\8\2004.............................................       \9\1.00175        \9\1.00081        \9\1.00256          0.99083          1.00028           1.00081           1.00109          0.99736
\10\2004............................................       \9\1.00164        \9\1.00081        \9\1.00245          0.99072          1.00028           1.00081           1.00109          0.99736
\11\2005............................................      \12\0.99967           1.00094       \12\1.00061          0.99137          0.99115           1.00094           0.99208          0.98946
\13\2005............................................      \12\0.99946           1.00094       \12\1.00040          0.99117          0.99115           1.00094           0.99208          0.98946
2006................................................      \14\1.00185           0.99892       \14\1.00076          0.99198          1.00762           0.99892           1.00653          0.99592
2007................................................          1.00000           0.99858           0.99858          0.99057          1.00234           0.99858           1.00092          0.99683
2008................................................          1.00178           0.99792           0.99970          0.99027      \15\1.00079           0.99792           0.99870         0.99554
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Factors effective for the first half of FY 2001 (October 2000 through March 2001).
\2\ Factors effective for the second half of FY 2001 (April 2001 through September 2001).
\3\ Incremental factors are applied to FY 2000 cumulative factors.
\4\ Incremental factors are applied to the cumulative factors for the first half of FY 2001.
\5\ Factors effective for the first half of FY 2003 (October 2002 through March 2003).
\6\ Factors effective for the second half of FY 2003 (April 2003 through September 2003).
\7\ Incremental factors are applied to FY 2002 cumulative factors.
\8\ Factors effective for the first half of FY 2004 (October 2003 through March 2004).
\9\ Incremental factors are applied to the cumulative factors for the second half of FY 2003.
\10\ Factors effective for the second half of FY 2004 (April 2004 through September 2004).
\11\ Factors effective for the first quarter of FY 2005 (September 2004 through December 2004).
\12\ Incremental factors are applied to average of the cumulative factors for the first half (October 1, 2003 through March 31, 2004) and second half (April 1, 2004 through September 30, 2004)
  of FY 2004.
\13\ Factors effective for the last three quarters of FY 2005 (January 2005 through September 2005).
\14\ Incremental factors are applied to average of the cumulative factors for 2005.


[[Page 47430]]

    The methodology used to determine the recalibration and geographic 
(DRG/GAF) budget neutrality adjustment factor is similar to the 
methodology used in establishing budget neutrality adjustments under 
the PPS for operating costs. One difference is that, under the 
operating PPS, the budget neutrality adjustments for the effect of 
geographic reclassifications are determined separately from the effects 
of other changes in the hospital wage index and the DRG relative 
weights. Under the capital PPS, there is a single DRG/GAF budget 
neutrality adjustment factor (the national capital rate and the Puerto 
Rico capital rate are determined separately) for changes in the GAF 
(including geographic reclassification) and the DRG relative weights. 
In addition, there is no adjustment for the effects that geographic 
reclassification has on the other payment parameters, such as the 
payments for serving low-income patients, indirect medical education 
payments, or the large urban add-on payments.
    In the Federal Register notice establishing the final FY 2007 
occupational mix adjusted payment rates (71 FR 59890), we calculated a 
GAF/DRG budget neutrality factor of 0.9986 for FY 2007. For FY 2008, we 
are establishing a GAF/DRG budget neutrality factor of 0.9997. The GAF/
DRG budget neutrality factors are built permanently into the capital 
rates; that is, they are applied cumulatively in determining the 
capital Federal rate. This follows the requirement that estimated 
aggregate payments each year be no more or less than they would have 
been in the absence of the annual DRG reclassification and 
recalibration and changes in the GAF. The incremental change in the 
adjustment from FY 2007 to FY 2008 is 0.9997. The cumulative change in 
the capital Federal rate due to the adjustment is 0.9903 (the product 
of the incremental factors for FYs 1994 though 2007 and the incremental 
factor of 0.9997 for FY 2008). (We note that averages of the 
incremental factors that were in effect during FYs 2004 and 2005, 
respectively, were used in the calculation of the cumulative adjustment 
of 0.9903 for FY 2008.)
    The factor accounts for DRG reclassifications and recalibration and 
for changes in the GAF. It also incorporates the effects on the GAF of 
FY 2008 geographic reclassification decisions made by the MGCRB 
compared to FY 2007 decisions. However, it does not account for changes 
in payments due to changes in the DSH and IME adjustment factors, or in 
the large urban add on.
4. Exceptions Payment Adjustment Factor
    Section 412.308(c)(3) requires that the capital standard Federal 
rate be reduced by an adjustment factor equal to the estimated 
proportion of additional payments for both regular exceptions and 
special exceptions under Sec.  412.348 relative to total capital PPS 
payments. In estimating the proportion of regular exception payments to 
total capital PPS payments during the transition period, we used the 
actuarial capital cost model originally developed for determining 
budget neutrality (described in Appendix B of the FY 2002 IPPS final 
rule (66 FR 40099)) to determine the exceptions payment adjustment 
factor, which was applied to both the Federal and hospital-specific 
capital rates.
    An adjustment for regular exception payments is no longer necessary 
in determining the FY 2008 capital Federal rate because, in accordance 
with Sec.  412.348(b), regular exception payments were only made for 
cost reporting periods beginning on or after October 1, 1991 and before 
October 1, 2001. Accordingly, as we explained in the FY 2002 IPPS final 
rule (66 FR 39949), in FY 2002 and subsequent fiscal years, no payments 
are made under the regular exceptions provision. However, in accordance 
with Sec.  412.308(c), we still need to compute a budget neutrality 
adjustment for special exception payments under Sec.  412.348(g). We 
describe our methodology for determining the exceptions adjustment used 
in calculating the FY 2007 capital Federal rate below.
    Under the special exceptions provision specified at Sec.  
412.348(g)(1), eligible hospitals include SCHs, urban hospitals with at 
least 100 beds that have a disproportionate share percentage of at 
least 20.2 percent or qualify for DSH payments under Sec.  
412.106(c)(2), and hospitals with a combined Medicare and Medicaid 
inpatient utilization of at least 70 percent. An eligible hospital may 
receive special exceptions payments if it meets the following criteria: 
(1) a project need requirement as described at Sec.  412.348(g)(2), 
which, in the case of certain urban hospitals, includes an excess 
capacity test as described at Sec.  412.348(g)(4); (2) an age of assets 
test as described at Sec.  412.348(g)(3); and (3) a project size 
requirement as described at Sec.  412.348(g)(5).
    Based on information compiled from our fiscal intermediaries, six 
hospitals have qualified for special exceptions payments under Sec.  
412.348(g). Because we have cost reports ending in FY 2006 for all of 
these hospitals, we calculated the adjustment based on actual cost 
experience. Using data from cost reports ending in FY 2006 from the 
December 2006 update of the HCRIS data, we divided the capital special 
exceptions payment amounts for the six hospitals that qualified for 
special exceptions by the total capital PPS payment amounts (including 
special exception payments) for all hospitals. Based on the data from 
cost reports ending in FY 2006, this ratio is rounded to 0.0003. 
Because we have not received all cost reports ending in FY 2006, we 
also divided the FY 2005 special exceptions payments by the total 
capital PPS payment amounts for all hospitals with cost reports ending 
in FY 2005. This ratio also rounded to 0.0003. Because special 
exceptions are budget neutral, we are offsetting the capital Federal 
rate by 0.03 percent for special exceptions payments for FY 2008. 
Therefore, the exceptions adjustment factor is equal to 0.9997 (1--
0.0003) to account for special exceptions payments in FY 2008.
    In the FY 2007 IPPS final rule (71 FR 48161), we estimated that 
total (special) exceptions payments for FY 2007 would equal 0.03 
percent of aggregate payments based on the capital Federal rate. 
Therefore, we applied an exceptions adjustment factor of 0.9997 (1--
0.0003) to determine the FY 2007 capital Federal rate. As we stated 
above, we estimate that exceptions payments in FY 2008 will equal 0.03 
percent of aggregate payments based on the FY 2008 capital Federal 
rate. Therefore, we are applying an exceptions payment adjustment 
factor of 0.9997 to the capital Federal rate for FY 2008. The 
exceptions adjustment factor for FY 2008 is the same as the factor used 
in determining the FY 2007 capital Federal rate in the FY 2007 IPPS 
final rule (71 FR 48161), and is the same factor used for the 
occupational mix adjusted payment rates since the adjustments made to 
the wage index had no effect on capital exceptions payments (71 FR 
59890). The exceptions reduction factors are not built permanently into 
the capital rates; that is, the factors are not applied cumulatively in 
determining the capital Federal rate. Therefore, the net change in the 
exceptions adjustment factor used in determining the FY 2008 capital 
Federal rate is 1.0000 (0.9997/0.9997).
5. Capital Standard Federal Rate for FY 2008
    In the Federal Register notice that established the occupational 
mix adjusted payment rates for FY 2007 (71 FR 59891), we established a 
capital Federal rate of $427.03 for FY 2007. As discussed above and in 
section V. of the

[[Page 47431]]

preamble of this final rule with comment period, we are not finalizing 
the proposed zero percent update for urban hospitals, which would have 
resulted in separate capital Federal rates for FY 2008 rural and urban 
hospitals. Therefore, we are establishing an update of 0.9 percent in 
determining the FY 2008 capital Federal rate for all hospitals. 
However, under the statutory authority at section 1886(d)(3)(A)(vi) of 
the Act, we are applying an additional 1.2 percent reduction to the 
standardized amounts for both capital and operating Federal payment 
rates in FY 2008. The 1.2 percent reduction is based on our Actuary's 
analysis of the effect of changes in coding or classification of 
discharges that do not reflect real changes in case-mix in light of the 
adoption of the MS-DRGs. Although the 1.2 percent reduction is outside 
the established process for developing the capital Federal payment 
rate, it nevertheless is a factor in the final prospective payment rate 
to hospitals for capital-related costs. For that reason, the capital 
Federal payment rates established in this final rule with comment 
period were determined by applying the 1.2 percent reduction. As a 
result of the 0.9 percent update, the 1.2 percent reduction to account 
for improvements in documentation and coding, and the other factors as 
discussed above, we are establishing a capital Federal rate of $423.34 
for all hospitals for FY 2008. The capital Federal rate for FY 2008 was 
calculated as follows:
    <bullet> The FY 2008 update factor is 1.0090, that is, the update 
is 0.9 percent.
    <bullet> The FY 2008 budget neutrality adjustment factor that is 
applied to the capital standard Federal payment rate for changes in the 
DRG relative weights and in the GAF (for all hospitals) is 0.9997.
    <bullet> The FY 2008 outlier adjustment factor is 0.9517.
    <bullet> The FY 2008 (special) exceptions payment adjustment factor 
is 0.9997.
    <bullet> The FY 2008 reduction for improvements in documentation 
and coding under the MS-DRGs is 1.2 percent.
    Because the capital Federal rate has already been adjusted for 
differences in case-mix, wages, cost-of-living, indirect medical 
education costs, and payments to hospitals serving a disproportionate 
share of low income patients, we are not making additional adjustments 
in the capital standard Federal rate for these factors, other than the 
budget neutrality factor for changes in the DRG relative weights and 
the GAF.
    We are providing the following charts that show how each of the 
factors and adjustments for FY 2008 affected the computation of the FY 
2008 capital Federal rate in comparison to the FY 2007 capital Federal 
rate. The FY 2008 update factor has the effect of increasing the 
capital Federal rate by 0.90 percent compared to the FY 2007 capital 
Federal rate. The GAF/DRG budget neutrality factor has the effect of 
decreasing the capital Federal rate by 0.03 percent. The FY 2008 
outlier adjustment factor has the effect of decreasing the capital 
Federal rate by 0.53 percent compared to the FY 2007 capital Federal 
rate. The FY 2008 exceptions payment adjustment factor remains 
unchanged from the FY 2007 exceptions payment adjustment factor, and 
therefore, has a 0.0 percent net effect on the FY 2008 capital Federal 
rate. In addition to the factors historically used to determine the 
capital Federal rate, for FY 2008, we are establishing an adjustment 
factor to account for improvements in documentation and coding expected 
to result from the MS-DRGs we are adopting, as discussed above in 
section III. of the Addendum to this final rule with comment period, in 
determining the capital Federal rate for FY 2008. The combined effect 
of all the changes decreases the capital Federal rate by 0.86 percent 
compared to the FY 2007 capital Federal rate.

      Comparison of Factors and Adjustments: FY 2007 Capital Federal Rate and FY 2008 Capital Federal Rate
----------------------------------------------------------------------------------------------------------------
                                                                                                       Percent
                                                                FY 2007     FY 2008\4\     Change     change\5\
----------------------------------------------------------------------------------------------------------------
Update Factor\1\............................................       1.0110       1.0090       1.0090         0.00
GAF/DRG Adjustment Factor\1\................................       0.9986       0.9997       0.9997        -0.03
Outlier Adjustment Factor\2\................................       0.9568       0.9517       0.9947        -0.53
Exceptions Adjustment Factor\2\.............................       0.9997       0.9997       1.0000         0.00
MS-DRG Upcoding Adjustment Factor\3\........................  ...........       0.9880       0.9880        -1.20
Capital Federal Rate........................................      $427.03      $423.34       0.9914       -0.86
----------------------------------------------------------------------------------------------------------------
\1\ The update factor and the GAF/DRG budget neutrality factors are built permanently into the capital rates.
  Thus, for example, the incremental change from FY 2007 to FY 2008 resulting from the application of the 0.9997
  GAF/DRG budget neutrality factor for FY 2008 is 0.9997.
\2\ The outlier reduction factor and the exceptions adjustment factor are not built permanently into the capital
  rates; that is, these factors are not applied cumulatively in determining the capital rates. Thus, for
  example, the net change resulting from the application of the FY 2008 outlier adjustment factor is 0.9517/
  0.9568, or 0.9947.
\3\ Adjustment to FY 2008 IPPS rates to account for upcoding expected to result from the adoption of the MS-
  DRGs, as discussed above in section III. of the Addendum to this final rule with comment period.
\4\ Factors for FY 2008, as discussed above in section III. of the Addendum to this final rule with comment
  period.
\5\ Percent change of individual factors may not sum due to rounding.

    We are also providing the following chart that shows how the final 
FY 2008 capital Federal rate (for all hospitals) differs from the 
proposed FY 2008 capital Federal rates for rural hospitals and for 
urban hospitals as presented in the FY 2008 IPPS proposed rule (72 FR 
24847). As noted above, we are not finalizing the proposal that would 
have resulted in separate capital Federal rates for FY 2008 for rural 
hospitals and for urban hospitals. Therefore, we applied the 0.9 
percent FY 2008 update factor to all hospitals.

[[Page 47432]]



 Comparison of Factors and Adjustments: Proposed FY 2008 Capital Federal Rate and Final FY 2008 Capital Federal
                                                      Rate
----------------------------------------------------------------------------------------------------------------
                                                 Proposed FY  Proposed FY    Final FY     Percent      Percent
                                                   2008 for     2008 for     2008 for    change for   change for
                                                    rural        urban         all         rural        urban
                                                  hospitals    hospitals    hospitals*  hospitals**  hospitals**
----------------------------------------------------------------------------------------------------------------
Update Factor..................................       1.0080       1.0000       1.0090         0.01         0.90
GAF/DRG Adjustment Factor......................       1.0018       1.0018       0.9997        -0.21        -0.21
Outlier Adjustment Factor......................       0.9484       0.9484       0.9517         0.35         0.35
Exceptions Adjustment Factor...................       0.9997       0.9997       0.9997         0.00         0.00
MS-DRG Upcoding Adjustment Factor..............       0.9760       0.9760       0.9880         1.23         1.23
Capital Federal Rate...........................      $417.26      $413.87      $423.34         1.46        2.29
----------------------------------------------------------------------------------------------------------------
* As discussed in section V. of the preamble of this final rule with comment period, we did not finalize the
  proposed zero percent update for urban hospitals, which would have resulted in different capital Federal rates
  for FY 2008 for rural hospitals and for urban hospitals. Consequently, in this final rule with comment period,
  the same update was applied for all hospitals (both urban and rural), and one capital Federal rate was
  established for FY 2008 for both urban and rural hospitals.
** Percent change of individual factors may not sum due to rounding.

6. Special Capital Rate for Puerto Rico Hospitals
    Section 412.374 provides for the use of a blended payment system 
for payments to hospitals located in Puerto Rico under the PPS for 
acute care hospital inpatient capital-related costs. Accordingly, under 
the capital PPS, we computed a separate payment rate specific to 
hospitals located in Puerto Rico using the same methodology used to 
compute the national Federal rate for capital-related costs. Under the 
broad authority of section 1886(g) of the Act, as discussed in section 
V. of the preamble of this final rule with comment period, beginning 
with discharges occurring on or after October 1, 2004, capital payments 
to hospitals located in Puerto Rico are based on a blend of 25 percent 
of the Puerto Rico capital rate and 75 percent of the capital Federal 
rate. The Puerto Rico capital rate is derived from the costs of Puerto 
Rico hospitals only, while the capital Federal rate is derived from the 
costs of all acute care hospitals participating in the IPPS (including 
Puerto Rico).
    To adjust hospitals' capital payments for geographic variations in 
capital costs, we applied a GAF to both portions of the blended capital 
rate. The GAF is calculated using the operating IPPS wage index, and 
varies depending on the labor market area or rural area in which the 
hospital is located. We used the Puerto Rico wage index to determine 
the GAF for the Puerto Rico part of the capital-blended rate and the 
national wage index to determine the GAF for the national part of the 
blended capital rate.
    Because we implemented a separate GAF for Puerto Rico in FY 1998, 
we also applied separate budget neutrality adjustments for the national 
GAF and for the Puerto Rico GAF. However, we applied the same budget 
neutrality factor for DRG reclassifications and recalibration 
nationally and for Puerto Rico. As we stated above in section III.A.4. 
of the Addendum to this final rule with comment period, for Puerto 
Rico, the GAF budget neutrality factor is 1.0008, while the DRG 
adjustment is 0.9979, for a combined cumulative adjustment of 0.9987.
    In computing the payment for a particular Puerto Rico hospital, the 
Puerto Rico portion of the capital rate (25 percent) is multiplied by 
the Puerto Rico-specific GAF for the labor market area in which the 
hospital is located, and the national portion of the capital rate (75 
percent) is multiplied by the national GAF for the labor market area in 
which the hospital is located (which is computed from national data for 
all hospitals in the United States and Puerto Rico). In FY 1998, we 
implemented a 17.78 percent reduction to the Puerto Rico capital rate 
as a result of Pub. L. 105-33. In FY 2003, a small part of that 
reduction was restored.
    For FY 2007, before application of the GAF, the special capital 
rate for hospitals located in Puerto Rico was $203.06 for discharges 
occurring on or after October 1, 2006, through September 30, 2007. With 
the changes we are making to the factors used to determine the capital 
rate, the FY 2008 special capital rate for hospitals in Puerto Rico is 
$199.80.

B. Calculation of the Inpatient Capital-Related Prospective Payments 
for FY 2008

    Because the 10-year capital PPS transition period ended in FY 2001, 
all hospitals (except ``new'' hospitals under Sec.  412.324(b) and 
under Sec.  412.304(c)(2)) are paid based on 100 percent of the capital 
Federal rate in FY 2007. The applicable capital Federal rate was 
determined by making the following adjustments:
    <bullet> For outliers, by dividing the capital standard Federal 
rate by the outlier reduction factor for that fiscal year; and
    <bullet> For the payment adjustments applicable to the hospital, by 
multiplying the hospital's GAF, disproportionate share adjustment 
factor, and IME adjustment factor, when appropriate.
    For purposes of calculating payments for each discharge during FY 
2008, the capital standard Federal rate is adjusted as follows: 
(Standard Federal Rate) x (DRG weight) x (GAF) x (COLA for hospitals 
located in Alaska and Hawaii) x (1 + Disproportionate Share Adjustment 
Factor + IME Adjustment Factor, if applicable). The result is the 
adjusted capital Federal rate. (As discussed above and in section V. of 
the preamble of this final rule with comment period, we are eliminating 
the large urban add-on adjustment in existing regulations at Sec.  
412.316, beginning in FY 2008.)
    Hospitals also may receive outlier payments for those cases that 
qualify under the thresholds established for each fiscal year. Section 
412.312(c) provides for a single set of thresholds to identify outlier 
cases for both inpatient operating and inpatient capital-related 
payments. The outlier thresholds for FY 2008 are in section II.A. of 
the Addendum to this final rule with comment period. For FY 2008, a 
case qualifies as a cost outlier if the cost for the case plus the IME 
and DSH payments is greater than the prospective payment rate for the 
DRG plus the fixed-loss amount of $22,635.
    An eligible hospital may also qualify for a special exceptions 
payment under Sec.  412.348(g) up through the 10th year beyond the end 
of the capital transition period if it meets the following criteria: 
(1) A project need requirement described at Sec.  412.348(g)(2), which 
in the case of certain urban hospitals

[[Page 47433]]

includes an excess capacity test as described at Sec.  412.348(g)(4); 
and (2) a project size requirement as described at Sec.  412.348(g)(5). 
Eligible hospitals include SCHs, urban hospitals with at least 100 beds 
that have a DSH patient percentage of at least 20.2 percent or qualify 
for DSH payments under Sec.  412.106(c)(2), and hospitals that have a 
combined Medicare and Medicaid inpatient utilization of at least 70 
percent. Under Sec.  412.348(g)(8), the amount of a special exceptions 
payment is determined by comparing the cumulative payments made to the 
hospital under the capital PPS to the cumulative minimum payment level. 
This amount is offset by: (1) Any amount by which a hospital's 
cumulative capital payments exceed its cumulative minimum payment 
levels applicable under the regular exceptions process for cost 
reporting periods beginning during which the hospital has been subject 
to the capital PPS; and (2) any amount by which a hospital's current 
year operating and capital payments (excluding 75 percent of operating 
DSH payments) exceed its operating and capital costs. Under Sec.  
412.348(g)(6), the minimum payment level is 70 percent for all eligible 
hospitals.
    During the transition period, new hospitals (as defined under Sec.  
412.300) were exempt from the capital IPPS for their first 2 years of 
operation and were paid 85 percent of their reasonable costs during 
that period. Effective with the third year of operation through the 
remainder of the transition period, under Sec.  412.324(b) we paid the 
hospitals under the appropriate transition methodology (if the hold-
harmless methodology were applicable, the hold-harmless payment for 
assets in use during the base period would extend for 8 years, even if 
the hold-harmless payments extend beyond the normal transition period).
    Under Sec.  412.304(c)(2), for cost reporting periods beginning on 
or after October 1, 2002, we pay a new hospital 85 percent of its 
reasonable costs during the first 2 years of operation unless it elects 
to receive payment based on 100 percent of the capital Federal rate. 
Effective with the third year of operation, we pay the hospital based 
on 100 percent of the capital Federal rate (that is, the same 
methodology used to pay all other hospitals subject to the capital 
PPS).

C. Capital Input Price Index

1. Background
    Like the operating input price index, the capital input price index 
(CIPI) is a fixed-weight price index that measures the price changes 
associated with capital costs during a given year. The CIPI differs 
from the operating input price index in one important aspect--the CIPI 
reflects the vintage nature of capital, which is the acquisition and 
use of capital over time. Capital expenses in any given year are 
determined by the stock of capital in that year (that is, capital that 
remains on hand from all current and prior capital acquisitions). An 
index measuring capital price changes needs to reflect this vintage 
nature of capital. Therefore, the CIPI was developed to capture the 
vintage nature of capital by using a weighted-average of past capital 
purchase prices up to and including the current year.
    We periodically update the base year for the operating and capital 
input prices to reflect the changing composition of inputs for 
operating and capital expenses. The CIPI was last rebased to FY 2002 in 
the FY 2006 IPPS final rule (70 FR 47387).
2. Forecast of the CIPI for FY 2008
    Based on the latest forecast by Global Insight, Inc. (second 
quarter of 2007), we forecast that the CIPI will increase to 1.3 
percent in FY 2008. This reflects a projected 1.9 percent increase in 
vintage-weighted depreciation prices (building and fixed equipment, and 
movable equipment), and a 3.1 percent increase in other capital expense 
prices in FY 2008, partially offset by a 2.6 percent decline in 
vintage-weighted interest expenses in FY 2008. The weighted average of 
these three factors produces the 1.3 percent increase for the CIPI as a 
whole in FY 2008.

IV. Changes to Payment Rates for Excluded Hospitals and Hospital Units: 
Rate-of-Increase Percentages

    Historically, hospitals and hospital units excluded from the 
prospective payment system received payment for inpatient hospital 
services they furnished on the basis of reasonable costs, subject to a 
rate-of-increase ceiling. An annual per discharge limit (the target 
amount as defined in Sec.  413.40(a)) was set for each hospital or 
hospital unit based on the hospital's own cost experience in its base 
year. The target amount was multiplied by the Medicare discharges and 
applied as an aggregate upper limit (the ceiling as defined in Sec.  
413.40(a)) on total inpatient operating costs for a hospital's cost 
reporting period. Prior to October 1, 1997, these payment provisions 
applied consistently to all categories of excluded providers 
(rehabilitation hospitals and units (now referred to as IRFs), 
psychiatric hospitals and units (now referred to as IPFs), LTCHs, 
children's hospitals, and cancer hospitals).
    Payment for services furnished in children's hospitals and cancer 
hospitals that are excluded from the IPPS continues to be subject to 
the rate-of-increase ceiling based on the hospital's own historical 
cost experience. (We note that, in accordance with Sec.  403.752(a), 
RNHCIs are also subject to the rate-of-increase limits established 
under Sec.  413.40 of the regulations.) We had previously proposed that 
the FY 2008 rate-of-increase percentage for cancer and children's 
hospitals and RNHCIs would be the percentage increase in the FY 2008 
IPPS operating market basket, estimated to be 3.3 percent. Consistent 
with our historical approach, if more recent data are available for the 
final rule, we use it to calculate the IPPS operating market basket. 
For this final rule with comment period, we have calculated the IPPS 
operating market basket for FY 2008 using the most recent data 
available. For cancer and children's hospitals and RNHCIs, the FY 2008 
rate-of-increase percentage which is applied to FY 2007 target amounts 
in order to calculate FY 2008 target amounts is 3.3 percent, based on 
Global Insight, Inc.'s 2007 second quarter forecast of the IPPS 
operating market basket increase, in accordance with the applicable 
regulations at 42 CFR 413.40.
    IRFs, IPFs, and LTCHs were previously paid under the reasonable 
cost methodology. However, the statute was amended to provide for the 
implementation of prospective payment systems for IRFs, IPFs, and 
LTCHs. In general, the prospective payment systems for IRFs, IPFs, and 
LTCHs provide transitioning periods of varying lengths of time during 
which a portion of the prospective payment is based on cost-based 
reimbursement rules under Part 413 (certain providers do not receive a 
transitioning period or may elect to bypass the transition as 
applicable under 42 CFR Part 412, Subparts N, O, and P.) We note that 
the various transitioning periods provided for under the IRF PPS, IPF 
PPS, and the LTCH PPS have ended or will soon end.
    For cost reporting periods beginning on or after October 1, 2002, 
all IRFs are paid 100 percent of the adjusted Federal rate under the 
IRF PPS. Therefore, for cost reporting periods beginning on or after 
October 1, 2002, no portion of an IRF PPS payment is subject to Part 
413. Similarly, for cost reporting periods beginning on or after 
October 1, 2006, all LTCHs are paid 100 percent of the adjusted Federal 
rate under the LTCH PPS. Therefore, for cost reporting periods 
beginning on or after October 1,

[[Page 47434]]

2006, no portion of the LTCH PPS payment is subject to 42 CFR Part 413. 
(We note that to the extent a portion of a LTCH's PPS payment was 
subject to reasonable cost principles, the Secretary utilized his broad 
authority under section 123 of the BBRA, amended by section 307 of 
BIPA, to make such portion subject to 42 CFR Part 413 and various 
provisions in 1886(b) of the Act.)
    Except as provided in Sec.  412.426(c), IPFs remain under a blend 
methodology for cost reporting periods beginning on or after January 1, 
2005, and before January 1, 2008. Under the broad authority conferred 
upon the Secretary in section 124(a)(1) of the BBRA of 1999, the 
Secretary provided that, for IPFs paid under the blend methodology, the 
portion of the IPF PPS payment that is based on reasonable cost 
principles is subject to the rules of 42 CFR Part 413 and various 
provisions in section 1886(b) of the Act. In order to calculate the 
portion of the PPS payment that is based on reasonable cost principles, 
it is necessary to determine whether the IPF would be considered 
``existing'' for purposes of section 1886(b)(3)(H) of the Act or 
``new'' for purposes of section 1886(b)(7) of the Act. We note that 
readers should not confuse an IPF that is considered ``new'' for 
purposes of section 1886(b)(7) of the Act and Sec.  413.40(f)(2)(ii) of 
the regulations with an IPF that is considered ``new'' under Sec.  
412.426(c) of the regulations. Any IPF that, under present or previous 
ownership or both, has its first cost reporting period as an IPF 
beginning on or after January 1, 2005, is considered ``new'' for 
purposes of Sec.  412.426(c). An IPF that is considered ``new'' under 
Sec.  412.426(c) is paid based on 100 percent of the Federal per diem 
payment amount. Consequently, only those IPFs considered ``new'' under 
section 1886(b)(7) of the Act, but not ``new'' under Sec.  412.426(c) 
will be paid under a PPS blended payment methodology. An IPF considered 
``new'' for purposes of Sec.  413.40(f)(2)(ii) would have its 
``reasonable-cost based'' portion of its prospective payment subject to 
the provisions of Sec.  413.40(f)(2)(ii) and Sec.  413.40(c)(4)(v), as 
applicable. An IPF considered ``new'' for purposes of section 
1886(b)(7) of the Act has the target amount for its third cost 
reporting period determined in accordance with sections 
1886(b)(7)(A)(ii) and 1886(b)(3)(A)(ii) of the Act. For the fourth and 
subsequent cost reporting periods, the target amount is calculated in 
accordance with section 1886(b)(3)(A)(ii) of the Act. An IPF that would 
be considered ``existing'' for purposes of section 1886(b)(3)(H) of the 
Act would have its target amount for the ``reasonable-cost based'' 
portion of its prospective payment determined in accordance with 
section 1886(b)(3)(A)(ii) of the Act and the provisions of Sec.  
413.40(c)(4)(ii) of the regulations.
    In the FY 2008 IPPS proposed rule (72 FR 24823), the applicable 
percentage increase to update the target amount for the reasonable 
cost-based portion of the PPS payment of an IPF that is considered 
``existing'' under section 1886(b)(3)(H) of the Act or ``new'' under 
section 1886(b)(7) of the Act, but not ``new'' under the provisions of 
Sec.  412.426(c), was 3.4 percent. However, we noted that if more 
current data became available prior to publication of the final rule, 
we would use those data for updating the market basket. Based on more 
recent data, the applicable percentage increase to update the target 
amount for the reasonable cost-based portion of the PPS payment of an 
IPF that is considered ``existing'' under section 1886(b)(3)(H) of the 
Act or ``new'' under section 1886(b)(7) of the Act, but not ``new'' 
under Sec.  412.426(c), is 3.3 percent, based on Global Insight, Inc.'s 
2007 second quarter forecast of the excluded hospital market basket 
increase, in accordance with the applicable regulations at 42 CFR 
413.40.
    We did not receive any public comments on this section of the 
proposed rule.

V. Tables

    This section contains the tables referred to throughout the 
preamble to this final rule with comment period and in this Addendum. 
Tables 1A, 1B, 1C, 1D, 2, 3A, 3B, 4A, 4B, 4C, 4D, 4F, 4G, 4H, 4J, 5, 
6A, 6B, 6C, 6D, 6E, 6F, 6J, 6K, 7A, 7B, 8A, 8B, 8C, 9A, 9C, 10, and 11 
are presented below. As explained in sections II.D.2. and II.G.8. of 
the preamble of this final rule with comment period, Table 6I--Complete 
List of Complication and Comorbidity (CC) Exclusions, is available only 
through the Internet on the CMS Web site at: http://www.cms.hhs.gov/AcuteInpatientPPS/. The tables presented below are as follows:

Table 1A--National Adjusted Operating Standardized Amounts, Labor/
Nonlabor (69.7 Percent Labor Share/30.3 Percent Nonlabor Share If Wage 
Index Is Greater Than 1)
Table 1B--National Adjusted Operating Standardized Amounts, Labor/
Nonlabor (62 Percent Labor Share/38 Percent Nonlabor Share If Wage 
Index Is Less Than or Equal To 1)
Table 1C--Adjusted Operating Standardized Amounts for Puerto Rico, 
Labor/Nonlabor
Table 1D--Capital Standard Federal Payment Rate
Table 2--Hospital Case-Mix Indexes for Discharges Occurring in Federal 
Fiscal Year 2006; Hospital Wage Indexes for Federal Fiscal Year 2008; 
Hospital Average Hourly Wages for Federal Fiscal Years 2006 (2002 Wage 
Data), 2007 (2003 Wage Data), and 2008 (2004 Wage Data); and 3-Year 
Average of Hospital Average Hourly Wages
Table 3A--FY 2008 and 3-Year Average Hourly Wage for Urban Areas by 
CBSA
Table 3B--FY 2008 and 3-Year Average Hourly Wage for Rural Areas by 
CBSA
Table 4A--Wage Index and Capital Geographic Adjustment Factor (GAF) for 
Urban Areas by CBSA--FY 2008
Table 4B--Wage Index and Capital Geographic Adjustment Factor (GAF) for 
Rural Areas by CBSA--FY 2008
Table 4C--Wage Index and Capital Geographic Adjustment Factor (GAF) for 
Hospitals That Are Reclassified by CBSA--FY 2008
Table 4F--Puerto Rico Wage Index and Capital Geographic Adjustment 
Factor (GAF) by CBSA--FY 2008
Table 4J--Out-Migration Adjustment--FY 2008
Table 5--List of Medicare Severity Diagnosis-Related Groups (MS-DRGs), 
Relative Weighting Factors, and Geometric and Arithmetic Mean Length of 
Stay
Table 6A--New Diagnosis Codes
Table 6B--New Procedure Codes
Table 6C--Invalid Diagnosis Codes
Table 6D--Invalid Procedure Codes
Table 6E--Revised Diagnosis Code Titles
Table 6F--Revised Procedure Code Titles
Table 6G--Additions to the CC Exclusions List
Table 6H--Deletions from the CC Exclusions List
Table 7A--Medicare Prospective Payment System Selected Percentile 
Lengths of Stay: FY 2006 MedPAR Update--March 2007 GROUPER V24.0 CMS 
DRGs
Table 7B--Medicare Prospective Payment System Selected Percentile 
Lengths of Stay: FY 2006 MedPAR Update--March 2007 GROUPER V25.0 MS 
DRGs
Table 8A--Statewide Average Operating Cost-to-Charge Ratios--July 2007
Table 8B--Statewide Average Capital Cost-to-Charge Ratios--July 2007

[[Page 47435]]

Table 8C--Statewide Average Total Cost to Charge Ratios for LTCHs July 
2007
Table 9A--Hospital Reclassifications and Redesignations--FY 2008
Table 9C--Hospitals Redesignated as Rural under Section 1886(d)(8)(E) 
of the Act--FY 2008
Table 10--Geometric Mean Plus the Lesser of .75 of the National 
Adjusted Operating Standardized Payment Amount (Increased to Reflect 
the Difference Between Costs and Charges) or .75 of One Standard 
Deviation of Mean Charges by Medicare Severity Diagnosis-Related Group 
(MS-DRG)--July 2007
Table 11--FY 2008 MS-LTC-DRGs, Relative Weights, Geometric Average 
Length of Stay, Short-Stay Outlier Threshold, and IPPS Comparable 
Threshold

   Table 1A.--National Adjusted Operating Standardized Amounts; Labor/
                                Nonlabor
   [69.7 Percent Labor Share/30.3 Percent Nonlabor Share if Wage Index
                             Greater Than 1]
------------------------------------------------------------------------
      Full update (3.3 percent)          Reduced update (1.3 percent)
------------------------------------------------------------------------
  Labor-related     Nonlabor-related    Labor-related   Nonlabor-related
------------------------------------------------------------------------
     $3,459.66          $1,503.98         $3,392.68         $1,474.86
------------------------------------------------------------------------


   Table 1B.--National Adjusted Operating Standardized Amounts, Labor/
                                Nonlabor
  [62 Percent Labor Share/38 Percent Nonlabor Share if Wage Index Less
                           Than or Equal to 1]
 
------------------------------------------------------------------------
      Full update (3.3 percent)          Reduced update (1.3 percent)
------------------------------------------------------------------------
  Labor-related     Nonlabor-related    Labor-related   Nonlabor-related
------------------------------------------------------------------------
     $3,077.46          $1,886.18         $3,017.87         $1,849.67
------------------------------------------------------------------------


               Table 1C.--Adjusted Operating Standardized Amounts for Puerto Rico, Labor/Nonlabor
----------------------------------------------------------------------------------------------------------------
                                                                 Rates if wage index    Rates if wage index less
                                                                   greater than 1          than or equal to 1
                                                             ---------------------------------------------------
                                                                 Labor       Nonlabor      Labor       Nonlabor
----------------------------------------------------------------------------------------------------------------
National....................................................    $3,459.66    $1,503.98    $3,077.46    $1,886.18
Puerto Rico.................................................    $1,454.91      $891.72    $1,377.47      $969.16
----------------------------------------------------------------------------------------------------------------


            Table 1D.--Capital Standard Federal Payment Rate
------------------------------------------------------------------------
                                                                  Rate
------------------------------------------------------------------------
National.....................................................    $423.34
Puerto Rico..................................................    $199.80
------------------------------------------------------------------------


 Table 2.--Hospital Case-Mix Indexes for Discharges Occurring in Federal Fiscal Year 2006; Hospital Wage Indexes for Federal Fiscal Year 2008; Hospital
  Average Hourly Wages for Federal Fiscal Years 2006 (2002 Wage Data), 2007 (2003 Wage Data), and 2008 (2004 Wage Data); and 3-Year Average of Hospital
                                                                  Average Hourly Wages
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                              Average         Average         Average         Average
                      Provider No.                        Case-mix Index   FY 2008 Wage     Hourly Wage     Hourly Wage     Hourly Wage     Hourly Wage
                                                                               Index          FY 2006         FY 2007         FY 2008      ** (3 years)
--------------------------------------------------------------------------------------------------------------------------------------------------------
010001..................................................          1.5191          0.7567         21.6546         22.1989         23.2195         22.3615
010005..................................................          1.1378          0.8629         22.4906         23.6022         23.0203         23.0415
010006..................................................          1.5126          0.7692         23.4823         23.4975         23.7502         23.5724
010007..................................................          1.0207          0.7567         18.2429         19.9329         21.3492         19.8699
010008..................................................          1.0417          0.7741         20.4591         17.9533         22.0793         19.9268
010009..................................................          0.9702          0.8629         23.2228         23.5626         25.9011         24.2272
010010..................................................          1.1043          0.8724         21.4974         27.0385         22.8602         23.5943
010011..................................................          1.6748          0.8855         27.4850         27.6658         27.4668         27.5393
010012..................................................          1.2356          0.9388         22.7020         24.4059         25.5767         24.1956
010015..................................................          1.0427          0.7613         21.5111         22.3383         27.0806         23.3440
010016..................................................          1.5770          0.8855         25.1502         24.6488         26.8611         25.5444
010018..................................................          1.7123          0.8855         22.2990         23.7048         24.8974         23.6077
010019..................................................          1.2722          0.7692         22.0906         22.8766         23.3460         22.7785
010021..................................................          1.1851          0.7567         18.6785         19.7367         21.0624         19.7975
010022..................................................          0.9498          0.9812         24.5671         25.8404         27.4318         25.9300
010023..................................................          1.8506          0.8111         27.6174         25.4272         26.1739         26.4108
010024..................................................          1.6018          0.8111         20.7265         22.0819         25.0715         22.5306

[[Page 47436]]

 
010025..................................................          1.3028          0.8587         21.2674         22.7635         23.6186         22.5541
010027..................................................          0.7634          0.7567         15.3705         16.4682         17.0513         16.2718
010029..................................................          1.5710          0.8587         22.6976         23.9007         25.0468         23.9133
010032..................................................          0.9313          0.7892         19.1555         19.3311         18.5545         19.0122
010033..................................................          2.0854          0.8855         26.3784         27.4181         29.1471         27.6506
010034..................................................          1.0453          0.8111         16.9686         17.7457         19.1549         17.9513
010035..................................................          1.3134          0.8724         22.2870         24.2425         24.2746         23.6062
010036..................................................          1.1619          0.7567         22.9747         21.5796         24.2887         22.9479
010038..................................................          1.2689          0.8022         21.4509         23.7039         27.0752         24.1209
010039..................................................          1.6606          0.9017         25.8820         26.9919         28.6462         27.1994
010040..................................................          1.6563          0.8144         22.8851         24.3207         24.7657         23.9967
010043..................................................          1.0807          0.8855         22.5944         21.9774         23.9121         22.8205
010044..................................................          1.0847          0.8724         21.4036         22.5009         24.4276         22.7205
010045..................................................          1.2233          0.8724         19.8803         20.4927         23.1695         21.0755
010046..................................................          1.5335          0.8144         21.6965         23.4219         25.9105         23.5410
010047..................................................          0.8960          0.7694         21.0605         26.4851         19.7542         21.9502
010049..................................................          1.1433          0.7567         20.2413         21.7888         22.4248         21.5072
010050..................................................          1.0408          0.8855         22.1584         22.9620         24.4060         23.1658
010051..................................................          0.8299          0.8530         15.2207         18.7701         18.0305         17.3881
010052..................................................          0.8767          0.7670         16.4958         25.9233         36.3638         26.9159
010053..................................................             ***               *         19.0108               *               *         19.0108
010054..................................................          1.0736          0.8629         22.5554         23.3624         24.4810         23.4780
010055..................................................          1.6124          0.7567         22.3800         22.5396         22.4145         22.4451
010056..................................................          1.6378          0.8855         23.7144         23.7398         24.5754         24.0311
010058..................................................          1.0119          0.8855         18.5538         19.5092         17.0150         18.2415
010059..................................................          1.0245          0.8629         21.3237         23.0012         24.8199         23.0577
010061..................................................          0.9828          0.8108         21.9370         24.1185         25.2454         23.7791
010062..................................................          1.0225          0.7567         18.3435         21.4805         21.7112         20.4976
010064..................................................          1.6963          0.8855         26.1110         24.8155         27.6149         26.1441
010065..................................................          1.5265          0.8724         21.3785         23.0477         24.3346         22.9447
010066..................................................          0.8369          0.7567         17.6152         19.8692         25.4612         20.9377
010068..................................................             ***               *         19.0789         22.7156         24.4145         22.0070
010069..................................................          1.0252          0.7567         21.3609         23.1243         23.6272         22.6667
010072..................................................             ***               *         21.8169         24.4989               *         23.1419
010073..................................................          0.9793          0.7567         16.4168         18.3963         19.0046         17.9415
010078..................................................          1.6180          0.8022         21.6857         23.5279         24.3828         23.2230
010079..................................................          1.2228          0.9017         21.8199         22.7337         22.3034         22.2840
010083..................................................          1.1887          0.8123         22.3040         22.4279         24.0036         22.9553
010084..................................................          1.3254          0.8855         24.7127         26.3238         26.5079         25.8383
010085..................................................          1.3335          0.8629         24.4710         24.2609         23.6280         24.1072
010086..................................................          1.0994          0.7567         18.6081         22.2096         21.5584         20.7409
010087..................................................          1.9947          0.7947         22.5225         22.4318         24.8320         23.2268
010089..................................................          1.2932          0.8855         22.8448         25.0811         26.2628         24.6788
010090..................................................          1.7444          0.8539         23.6948         26.0494         26.3957         25.3396
010091..................................................          0.9568          0.7613         18.6912         23.1310         22.5272         21.3026
010092..................................................          1.5529          0.8530         24.4592         26.6796         26.9959         26.0279
010095..................................................          0.8468          0.8530         13.9326         16.5250         17.0024         15.8689
010097..................................................          0.7113          0.8111         16.7549         19.4511         19.2481         18.5000
010098..................................................          0.9805               *         14.3076               *               *         14.3076
010099..................................................          0.9660          0.7567         18.7910         20.8383         20.6736         20.0891
010100..................................................          1.6851          0.8123         21.2915         23.8919         25.1460         23.5431
010101..................................................          1.1060          0.8724         21.6593         24.2575         25.0974         23.6323
010102..................................................          0.9334          0.7567         21.0902         25.6158         26.9859         24.5977
010103..................................................          1.8910          0.8855         26.1163         27.8272         28.9636         27.5991
010104..................................................          1.8838          0.8855         24.7394         27.6471         28.3126         26.8465
010108..................................................          1.0938          0.8111         28.4624         24.6740         25.4325         26.1487
010109..................................................          0.9828          0.8018         21.6194         17.6733         21.0449         20.0231
010110..................................................          0.7586          0.7781         17.5957         26.0038         19.8738         20.8832
010112..................................................          0.9652          0.7567         16.8902         17.1833         20.4027         18.1182
010113..................................................          1.6646          0.7947         21.4121         22.3282         24.7170         22.7864
010114..................................................          1.3662          0.8855         22.3752         25.6152         25.7090         24.6272
010115..................................................          0.6881               *         21.7477               *               *         21.7477
010118..................................................          1.2151          0.8162         19.7673         21.4630         22.7191         21.2742
010120..................................................          0.9625          0.7567         20.9450         20.9019         22.1868         21.3553
010121..................................................             ***               *         24.0867               *               *         24.0867
010125..................................................          1.0635          0.8043         18.4113         21.5123         22.8911         20.8639
010126..................................................          1.1765          0.8111         23.1381         23.9327         24.4957         23.8552

[[Page 47437]]

 
010128..................................................          0.8778          0.7613         21.4200         23.6647         24.9881         23.3836
010129..................................................          1.0394          0.7701         21.3555         22.1574         21.8502         21.7888
010130..................................................          1.0252          0.8855         23.2488         23.7528         24.5644         23.8767
010131..................................................          1.3963          0.9017         25.7837         26.4297         27.2707         26.5327
010137..................................................          1.2204          0.8855         24.7366         27.5782         28.5843         26.9190
010138..................................................          0.6023          0.7633         13.8476         16.7602         14.5551         15.1032
010139..................................................          1.5875          0.8855         25.3014         26.8726         28.1473         26.8270
010143..................................................          1.2118          0.8724         22.0215         26.2762         24.0674         24.0861
010144..................................................          1.6376          0.7947         20.8209         22.5133         22.3916         21.9338
010145..................................................          1.4727          0.8530         24.9531         24.5092         25.8293         25.1083
010146..................................................          1.0794          0.8022         20.8917         22.6586         22.6879         22.1063
010148..................................................          0.8692          0.7567         20.5589         23.9246         23.5714         22.6800
010149..................................................          1.2877          0.8111         26.5854         24.4805         25.4354         25.4861
010150..................................................          1.0284          0.8111         21.6377         23.6080         24.4098         23.2040
010152..................................................          1.2978          0.7947         22.6202         22.4075         23.7803         22.9411
010157..................................................          1.1357          0.7692         24.3559         23.3828         24.2206         23.9837
010158..................................................          1.1916          0.7832         24.3531         23.5533         25.5905         24.4669
010162..................................................             ***               *               *         33.8777               *         33.8777
010163..................................................             ***               *               *               *         34.0325         34.0325
010164..................................................          1.1737          0.7975               *               *         23.2447         23.2447
010165..................................................             ***               *               *               *         28.8040         28.8040
010166..................................................             ***               *               *               *         29.7256         29.7256
010167..................................................          1.4919          0.8855               *               *               *               *
010168..................................................          1.1249          0.9019               *               *               *               *
020001..................................................          1.7991          1.2083         32.8120         35.4232         36.5298         34.9510
020004..................................................          1.1287               *         32.0966         31.8004               *         31.9467
020006..................................................          1.3160          1.2083         36.0540         34.3752         37.0211         35.7758
020008..................................................          1.2411          1.2083         35.9236         36.1250         39.3432         37.1503
020012..................................................          1.3780          1.2083         31.8995         32.5975         33.9375         32.8391
020014..................................................          1.1294          1.2083         32.0894         29.4472         30.9722         30.8221
020017..................................................          1.9188          1.2083         33.5852         35.4119         35.8804         34.9149
020018..................................................          0.9273          1.9278               *               *               *               *
020019..................................................          0.8687          1.9278               *               *               *               *
020024..................................................          1.1780          1.2083         33.0644         29.5195         38.6934         33.4500
020026..................................................          1.4935          1.9278               *               *               *               *
020027..................................................          0.9341          1.9278               *               *               *               *
030001..................................................          1.5488          1.0110         29.9840         32.4791         33.4178         31.9042
030002..................................................          2.0931          1.0110         29.0519         30.2200         31.0818         30.0874
030006..................................................          1.6975          0.9416         25.8872         27.0599         27.7421         26.9373
030007..................................................          1.4495          1.1187         29.6174         31.1928         33.7213         31.5818
030009..................................................             ***               *         22.3993         26.5408               *         23.8204
030010..................................................          1.4087          0.9416         24.8275         28.5684         30.6261         28.0431
030011..................................................          1.4962          0.9416         25.1361         28.1423         28.8203         27.4688
030012..................................................          1.3876          0.9961         26.3859         27.3895         29.1042         27.6846
030013..................................................          1.4744          1.0085         25.7050         27.0111         31.2815         28.0280
030014..................................................          1.5918          1.0110         25.6259         29.6582         29.8296         28.4308
030016..................................................          1.2374          1.0110         26.7003         29.1980         30.7896         28.9890
030017..................................................          2.0652          1.0110         26.2452         30.6007         34.4852         30.7776
030018..................................................          1.3205          1.0110         28.9476         29.4566         31.8056         30.0512
030019..................................................          1.3316          1.0110         27.3156         29.5921         30.1934         29.0814
030022..................................................          1.5703          1.0110         26.4404         30.5710         30.3746         29.2068
030023..................................................          1.7873          1.1551         33.8333         34.2142         35.8287         34.6826
030024..................................................          2.0639          1.0110         31.6658         31.9247         33.1797         32.2883
030027..................................................          0.9709               *         20.4032               *               *         20.4032
030030..................................................          1.5768          1.0110         30.2712         32.0994         34.4166         32.2546
030033..................................................          1.2960          1.1187         26.6531         28.7508         29.9383         28.4685
030036..................................................          1.4588          1.0110         30.3521         30.9834         33.0523         31.6117
030037..................................................          2.1478          1.0110         28.6453         31.2877         34.1079         31.4098
030038..................................................          1.6801          1.0110         29.5509         29.9314         31.7238         30.2225
030040..................................................          0.9098               *         24.8145         27.5322               *         26.1823
030043..................................................          1.2683          0.8854         24.7932         26.5834         27.3856         26.2806
030055..................................................          1.4591          0.9576         24.5202         27.1473         27.1621         26.3554
030060..................................................          1.0894               *         24.3523         24.8373               *         24.5964
030061..................................................          1.6799          1.0110         25.5529         28.0696         28.1337         27.3140
030062..................................................          1.2025          0.8854         23.8068         26.6880         28.9587         26.5838
030064..................................................          1.9657          0.9416         25.4922         28.3853         29.8226         28.0126
030065..................................................          1.5912          1.0110         27.1646         29.5883         31.0817         29.3880

[[Page 47438]]

 
030067..................................................          1.0582          0.9152         20.4376         20.7591         27.4497         22.9601
030068..................................................          1.1135          0.8854         20.8846         23.1394         23.8792         22.6625
030069..................................................          1.4256          0.9333         26.3518         30.2224         29.7802         28.7293
030071..................................................          0.8920          1.4400               *               *               *               *
030073..................................................          1.0393          1.4400               *               *               *               *
030074..................................................          0.8727          1.4400               *               *               *               *
030077..................................................          0.7686          1.4400               *               *               *               *
030078..................................................          0.9911          1.4400               *               *               *               *
030080..................................................          1.5497          0.9416         25.2077         27.1360         28.6568         27.0149
030083..................................................          1.4230          1.0110         27.5353         27.4983         33.5302         29.3979
030084..................................................          0.9008          1.4400               *               *               *               *
030085..................................................          1.5896          0.9416         24.5792         26.8364         28.1388         26.6166
030087..................................................          1.6937          1.0110         26.6594         29.5962         31.2331         29.4038
030088..................................................          1.3707          1.0110         26.6796         27.8604         29.9758         28.2309
030089..................................................          1.6397          1.0110         27.1835         28.9068         30.1591         28.8100
030092..................................................          1.4993          1.0110         27.3203         31.7512         30.6343         30.0167
030093..................................................          1.2962          1.0110         25.8955         26.4430         27.8821         26.8453
030094..................................................          1.4039          1.0110         29.5948         31.5422         33.4050         31.6120
030099..................................................          0.8736          0.8854         26.3236         27.1402         26.9227         26.8026
030100..................................................          2.0564          0.9416         29.0691         31.5628         34.7532         31.7816
030101..................................................          1.4424          1.1222         26.1927         27.8302         30.6764         28.3394
030102..................................................          2.3653          1.0110         29.0942         31.6285         33.6247         31.5058
030103..................................................          1.7635          1.0110         30.1994         31.7322         32.2833         31.3997
030105..................................................          2.2401          1.0110         31.3094         31.2970         32.7449         31.8780
030106..................................................          1.7527          1.0110         34.7221         32.9840         36.4667         34.9449
030107..................................................          1.9168          1.0110               *         35.6197         35.5386         35.5721
030108..................................................          2.0446          1.0110               *               *         29.9395         29.9395
030109..................................................             ***               *               *         16.5906               *         16.5906
030110..................................................          1.6188          1.0110               *         31.4852         29.7949         30.5015
030111..................................................          1.0309          0.9416               *               *         33.3711         33.3711
030112..................................................          1.9762          1.0110               *               *         36.6601         36.6601
030113..................................................          0.8959          1.4400               *               *               *               *
030114..................................................          1.3883          0.9416               *               *               *               *
030115..................................................          1.3514          1.0110               *               *               *               *
030117..................................................          1.1079          0.9333               *               *               *               *
030118..................................................          1.0969          0.9961               *               *               *               *
030119..................................................          1.1665          1.0110               *               *               *               *
040001..................................................          1.0776          0.8871         23.7718         22.9327         22.9948         23.2132
040002..................................................          1.2042          0.7516         20.1384         21.2020         25.0000         22.0327
040004..................................................          1.7265          0.8871         25.0286         27.1741         28.1117         26.7791
040007..................................................          1.7562          0.8960         25.7142         40.1291         29.1941         31.6856
040010..................................................          1.4682          0.8871         23.0274         24.2315         26.5287         24.6226
040011..................................................          1.0455          0.7516         20.3970         21.0967         22.2431         21.2830
040014..................................................          1.3571          0.8725         25.3451         26.4777         28.9855         26.8514
040015..................................................          0.9961          0.7516         19.2831         20.4279         20.1061         19.9379
040016..................................................          1.7616          0.8960         22.1228         25.8056         26.5911         24.8386
040017..................................................          1.0969          0.8714         21.9875         21.9147         23.8768         22.5741
040018..................................................          1.0812          0.8052         23.6044         24.0026         25.6751         24.3852
040019..................................................          1.1088          0.8963         23.7328         23.8706         24.9113         24.1695
040020..................................................          1.5861          0.8963         21.6603         22.6497         23.9470         22.7542
040021..................................................          1.5370          0.8960         25.6917         25.4046         26.1853         25.7538
040022..................................................          1.5695          0.8871         25.4052         29.5000         27.9902         27.5948
040026..................................................          1.5090          0.9105         25.4072         27.7931         29.5299         27.6091
040027..................................................          1.4827          0.8619         21.1412         21.4252         23.8220         22.1274
040029..................................................          1.4947          0.8960         24.0704         24.8409         25.1479         24.6992
040036..................................................          1.6105          0.8960         26.3226         27.6234         29.7150         27.9675
040039..................................................          1.2755          0.8153         19.5998         21.2712         21.4819         20.7976
040041..................................................          1.1732          0.8725         22.1531         23.7787         26.4964         24.1438
040042..................................................          1.3805          0.9313         19.9627         21.1716         19.8709         20.3344
040045..................................................          1.0416               *         17.2281               *               *         17.2281
040047..................................................          1.1288          0.7633         21.9163         22.4249         23.0358         22.4531
040050..................................................          1.2290          0.7516         16.3930         17.6906         18.5119         17.5660
040051..................................................          0.9632          0.7516         19.1400         21.3342         22.0394         20.8386
040053..................................................             ***               *         20.7823               *               *         20.7823
040054..................................................             ***               *         18.2685         18.0509         19.5353         18.6008
040055..................................................          1.5244          0.8052         23.3156         23.0448         24.9164         23.7097
040062..................................................          1.6625          0.8052         23.3082         23.8994         25.2303         24.1355

[[Page 47439]]

 
040067..................................................          1.1373          0.7523         16.8800         19.0471         18.9872         18.2681
040069..................................................          1.0183          0.8963         24.4662         24.8060         24.9996         24.7603
040071..................................................          1.4578          0.8725         24.3824         25.4680         25.2840         25.0575
040072..................................................          1.1153          0.7516         19.9009         22.4741         22.1058         21.4220
040074..................................................          1.1975          0.8960         25.2423         25.2699         26.2661         25.5884
040075..................................................             ***               *         18.3253               *               *         18.3253
040076..................................................          1.0000          0.8725         20.6272         23.5742         23.0954         22.4197
040077..................................................          0.9991               *         18.2082               *               *         18.2082
040078..................................................          1.5994          0.9105         24.5377         23.5915         26.1937         24.6735
040080..................................................          1.0440          0.8503         22.3392         24.1921         24.8760         23.8555
040081..................................................          0.8581          0.7873         15.1081         16.8437         17.2536         16.4124
040084..................................................          1.1949          0.8960         24.7225         27.7626         26.6449         26.4201
040085..................................................          0.9758          0.8963         29.8444         22.9916         25.7215         25.8637
040088..................................................          1.4610          0.7764         22.6183         22.4860         23.6276         22.9191
040091..................................................          1.1764          0.7781         23.1320         24.2398         23.1913         23.5100
040100..................................................          1.3403          0.8725         20.0460         21.3051         22.6131         21.3769
040105..................................................          1.0556               *         18.2182               *               *         18.2182
040109..................................................          1.1066               *         22.8801               *               *         22.8801
040114..................................................          1.8129          0.8960         24.8992         26.7581         27.7928         26.5383
040118..................................................          1.4728          0.8503         24.7363         26.0388         26.8908         25.8812
040119..................................................          1.4205          0.8725         21.0103         24.3680         24.2419         23.2187
040126..................................................             ***               *         14.0700         15.6985         17.3715         15.6137
040132..................................................             ***               *         28.1393               *         22.0054         24.3534
040134..................................................          2.3671          0.8960         27.3412         31.9325         32.2832         30.5661
040137..................................................          1.3102          0.8960         25.2907         25.9979         27.7360         26.2750
040138..................................................          1.4215          0.8871         25.7513         27.8584         28.3342         27.5137
040141..................................................          0.8436          0.8871         24.0901         26.1041         30.3475         26.8847
040142..................................................          1.4672          0.9105         27.9696         21.4222         23.8620         24.1239
040143..................................................             ***               *               *         37.1976               *         37.1976
040144..................................................             ***               *               *         21.4008               *         21.4008
040145..................................................          1.7860          0.8503               *               *         24.4367         24.4367
040146..................................................             ***               *               *               *         33.7876         33.7876
040147..................................................          1.7139          0.8960               *               *               *               *
050002..................................................          1.3854          1.5353         34.1948         35.5184         41.7336         37.3207
050006..................................................          1.6408          1.2651         30.5373         33.5751         37.1639         33.5391
050007..................................................          1.4971          1.4946         38.7033         43.4440         45.8773         42.7095
050008..................................................          1.2726          1.4826         39.1539         49.3167         46.8706         45.1816
050009..................................................          1.8133          1.4267         39.6393         43.0584         46.2186         43.0443
050013..................................................          1.9732          1.4267         31.9837         35.7591         43.5623         36.9784
050014..................................................          1.2471          1.2918         33.0373         36.0305         37.4135         35.5238
050015..................................................          1.3247               *         30.7940         32.2188               *         31.5274
050016..................................................          1.3297          1.2054         26.2161         24.5768         31.0653         27.2795
050017..................................................          1.9740          1.3067         36.6593         39.6653         42.2200         39.5192
050018..................................................          1.1994          1.1735         22.3472         23.3204         31.8310         25.3549
050022..................................................          1.5661          1.1735         29.8632         31.6467         33.0592         31.4883
050024..................................................          1.1366          1.1735         27.5587         29.4062         33.4334         30.2003
050025..................................................          1.8859          1.1735         36.1622         33.5466         32.7476         34.1071
050026..................................................          1.5103          1.1735         28.3027         31.5250         33.1277         31.0373
050028..................................................          1.2341          1.1735         26.6160         27.3826         28.5736         27.5339
050030..................................................          1.2224          1.1735         24.9707         27.2945         30.9014         27.6434
050036..................................................          1.5133          1.1735         32.7929         33.8000         36.0905         34.2482
050038..................................................          1.6423          1.5439         38.7527         44.2265         48.7483         44.0206
050039..................................................          1.6082          1.1735         31.6734         35.2630         36.6943         34.5173
050040..................................................          1.2674          1.1735         34.3279         35.8322         35.7054         35.3257
050042..................................................          1.5020          1.2651         33.9415         37.3760         40.3326         37.2065
050043..................................................          1.6341          1.5353         43.1589         45.4887         48.2283         45.6945
050045..................................................          1.3077          1.1735         23.8408         25.0150         27.0676         25.4080
050046..................................................          1.1412          1.1735         25.6875         26.1926         29.1125         26.9715
050047..................................................          1.7685          1.4826         40.9874         55.9367         45.1675         47.4627
050054..................................................          1.1914          1.1735         24.1262         21.3650         24.0338         23.1316
050055..................................................          1.3290          1.4826         37.5879         42.9516         44.2926         41.4282
050056..................................................          1.3794          1.1735         27.9330         30.6126         32.7693         30.4552
050057..................................................          1.6643          1.1735         29.4351         30.0236         31.7467         30.4506
050058..................................................          1.6021          1.1735         33.8215         33.1409         37.2538         34.6985
050060..................................................          1.4479          1.1735         27.3282         29.9762         32.0196         29.7255
050061..................................................             ***               *         32.2172               *               *         32.2172
050063..................................................          1.3845          1.1735         33.3039         34.0906         36.3085         34.5048

[[Page 47440]]

 
050065..................................................             ***               *         34.0280         34.9110         38.2421         35.7006
050067..................................................          1.1973          1.2019         31.9597         38.8070         40.1393         37.4080
050069..................................................          1.7482          1.1735         31.2172         34.6353         35.3850         33.8185
050070..................................................          1.2780          1.4946         45.3382         47.4099         46.4009         46.4522
050071..................................................          1.2898          1.5343         44.9464         50.7602         49.6495         48.7326
050072..................................................          1.3417          1.5343         44.2651         49.4344         50.0343         48.1855
050073..................................................          1.3036          1.5343         45.9765         49.9730         49.0069         48.5026
050075..................................................          1.3055          1.5353         47.2356         54.4089         49.8290         50.5649
050076..................................................          1.8910          1.5343         46.4991         52.3788         50.2039         49.9372
050077..................................................          1.6158          1.1735         32.0245         34.8660         36.5384         34.5331
050078..................................................          1.2608          1.1735         31.1425         32.0133         30.4274         31.1478
050079..................................................          1.5056          1.5343         47.8597         47.3449         48.8994         47.9784
050082..................................................          1.6846          1.1735         37.7783         38.2878         37.8905         37.9882
050084..................................................          1.5633          1.1941         33.0179         35.5196         39.5748         36.0222
050088..................................................             ***               *         25.7385               *               *         25.7385
050089..................................................          1.3519          1.1735         33.5324         33.9593         36.4018         34.5988
050090..................................................          1.2783          1.4800         32.9584         33.8953         37.7421         34.8400
050091..................................................          1.0225          1.1735         30.8560         32.1301         37.1223         33.3203
050093..................................................          1.5015          1.1735         33.4118         36.9481         36.8486         35.7397
050096..................................................          1.2246          1.1735         24.6679         34.9237         33.1322         30.9608
050099..................................................          1.4850          1.1735         31.0437         33.4174         32.0650         32.2103
050100..................................................          1.8315          1.1735         29.6949         31.4404         33.3959         31.5609
050101..................................................          1.2932          1.5343         40.3195         42.4589         47.9327         43.6371
050102..................................................          1.2847          1.1735         29.1364         32.0617         32.8434         31.6405
050103..................................................          1.5381          1.1735         34.2529         34.0935         35.6773         34.7050
050104..................................................          1.4331          1.1735         29.7326         32.3043         33.6204         31.9100
050107..................................................          1.5168          1.1735         33.1358         32.5846         33.5687         33.0959
050108..................................................          1.9263          1.3067         35.5711         38.8672         42.0131         38.9520
050110..................................................          1.2783          1.1735         26.1453         26.8408         28.0670         27.0290
050111..................................................          1.2625          1.1735         28.1588         28.7875         31.8766         29.6686
050112..................................................          1.5360          1.1735         36.8026         37.7281         38.9483         37.8620
050113..................................................          1.2266          1.4946         33.8064         39.4882         42.8884         38.6364
050114..................................................          1.4296          1.1735         31.1295         34.0309         35.7274         33.6746
050115..................................................          1.4671          1.1735         30.9288         28.8051         32.5257         30.7642
050116..................................................          1.7151          1.1735         34.5109         36.8825         37.6018         36.4210
050117..................................................             ***               *         32.4413         34.2020         35.0531         33.2964
050118..................................................          1.2250          1.2019         35.4044         39.9683         41.6701         39.0065
050121..................................................          1.2978          1.1735         27.9537         30.6105         34.6244         31.1240
050122..................................................          1.5193          1.1941         34.2416         33.9812         34.0259         34.0785
050124..................................................          1.2869          1.1735         28.0288         30.2522         29.9944         29.4697
050125..................................................          1.5000          1.5439         41.7020         44.9523         47.7578         44.7946
050126..................................................          1.4916          1.1735         29.3360         31.7619         32.6686         31.2868
050127..................................................          1.3314          1.3067         26.1222         32.0355         40.7610         31.7807
050128..................................................          1.4725          1.1735         31.0662         31.1308         33.4233         31.8929
050129..................................................          1.8417          1.1735         32.2680         34.7359         36.9887         34.5850
050131..................................................          1.3370          1.4800         40.5321         45.3152         47.5257         44.5040
050132..................................................          1.4264          1.1735         35.1544         35.9199         39.6807         36.9017
050133..................................................          1.5413          1.2918         31.3530         31.9527         33.1814         32.2802
050135..................................................          1.0333          1.1735         24.3927         25.1813         25.3209         25.0624
050136..................................................          1.3553          1.4800         37.4560         43.3747         46.6619         42.5341
050137..................................................          1.4485          1.1735         38.4827         39.1496         40.2457         39.4250
050138..................................................          1.7510          1.1735         46.9557         45.3727         40.6343         43.8129
050139..................................................          1.3026          1.1735         37.6217         37.8986         38.7385         38.1892
050140..................................................          1.3857          1.1735         39.6269         40.9725         39.4954         39.9747
050144..................................................             ***               *         33.5109         33.6662         38.2424         35.1804
050145..................................................          1.4357          1.4593         42.3134         42.2921         48.0796         44.3363
050146..................................................          1.7450               *               *               *               *               *
050148..................................................          1.0844               *         27.3005         28.2305               *         27.7734
050149..................................................          1.4992          1.1735         33.2270         35.8821         37.3616         35.7587
050150..................................................          1.2109          1.2918         31.7560         33.6583         37.9946         34.4499
050152..................................................          1.4661          1.4826         43.6487         46.1553         51.6567         47.1769
050153..................................................          1.4470          1.5439         43.3190         42.8955         47.6374         44.7563
050155..................................................             ***               *         21.8550         16.9516         16.7756         18.0652
050158..................................................          1.3557          1.1735         35.1326         35.7805         39.9160         36.9712
050159..................................................          1.4329          1.1735         31.3199         32.5704         34.6915         32.9769
050167..................................................          1.3248          1.1941         28.5179         31.4798         34.0418         31.2303
050168..................................................          1.6239          1.1735         33.2506         37.9784         40.5973         37.3823

[[Page 47441]]

 
050169..................................................          1.4402          1.1735         27.4644         29.4693         31.4115         29.5647
050172..................................................             ***               *         28.5604               *               *         28.5604
050173..................................................          1.3511          1.1735         30.3582         29.0576         31.6717         30.3454
050174..................................................          1.5310          1.4800         40.1747         44.4199         48.1740         44.3520
050175..................................................             ***               *         30.5733         33.3061         35.0152         32.9392
050177..................................................             ***               *         25.1442         24.0717               *         24.6196
050179..................................................          1.2416          1.2019         27.1155         30.4973         31.6651         30.0130
050180..................................................          1.5481          1.5343         40.2504         42.0358         45.7099         42.7961
050188..................................................          1.4245          1.5439         39.5110         41.0943         43.7381         41.3973
050189..................................................          1.0027          1.4593         29.1279         30.1155         28.7580         29.3259
050191..................................................          1.5039          1.1735         34.2091         37.7805         37.8756         36.5700
050192..................................................          0.9795          1.1735         27.0424         27.1400         27.8386         27.3401
050193..................................................          1.2009          1.1735         29.6421         33.9520         29.0623         30.7523
050194..................................................          1.3918          1.5719         40.9096         44.7107         49.0030         44.8987
050195..................................................          1.5358          1.5353         48.4358         48.8595         53.5583         50.3395
050196..................................................          1.0252          1.1735         32.1933         34.0956         32.8293         33.0383
050197..................................................          2.1090          1.5343         48.9053         50.0728         52.9998         50.6892
050204..................................................          1.4292          1.1735         28.6423         32.0121         35.3954         32.0139
050205..................................................          1.4338          1.1735         27.8611         29.3334         30.6322         29.3026
050207..................................................             ***               *         29.5214         30.0062         31.3431         30.2629
050211..................................................          1.2807          1.5353         41.2166         35.0515         35.0289         36.9047
050214..................................................             ***               *         23.9972         25.4647               *         24.7211
050215..................................................             ***               *         43.7985         48.8112         50.7578         47.7260
050219..................................................          1.2434          1.1735         22.4065         26.4143         25.8378         24.8927
050222..................................................          1.7011          1.1735         29.1094         32.3882         33.7510         31.8388
050224..................................................          1.7135          1.1735         29.3143         32.5010         35.7280         32.5355
050225..................................................          1.4565          1.1735         29.9656         34.0836         35.1227         33.2224
050226..................................................          1.6587          1.1735         30.5867         32.4411         35.4597         32.8050
050228..................................................          1.2780          1.4826         42.4226         43.7939         47.1430         44.4650
050230..................................................          1.5630          1.1735         32.9555         34.0600         35.8490         34.3219
050231..................................................          1.6220          1.1735         30.9607         32.1813         33.7139         32.3034
050232..................................................          1.7586          1.2054         27.4099         26.3004         34.3242         29.3642
050234..................................................          1.1638          1.1735         29.6561         32.3726         34.8308         32.2031
050235..................................................          1.5172          1.1735         29.2979         30.5405         37.0858         32.3689
050236..................................................          1.4069          1.1735         32.1647         33.0686         32.6462         32.6402
050238..................................................          1.5198          1.1735         31.1764         33.3346         34.0823         32.9745
050239..................................................          1.6081          1.1735         31.0963         33.1148         35.9041         33.4240
050240..................................................             ***               *         35.5735         36.1154         40.7427         37.4962
050242..................................................          1.3910          1.5719         44.3130         46.4844         50.9882         47.3502
050243..................................................          1.6367          1.1735         31.4883         32.9385         36.1209         33.6114
050245..................................................          1.3986          1.1735         28.6527         27.3866         33.2556         29.8371
050248..................................................          1.0733          1.4593         35.3864               *         40.4941         37.6896
050251..................................................             ***               *         27.2675         27.8452               *         27.5819
050253..................................................             ***               *         24.0044         23.5381               *         23.7879
050254..................................................          1.2483          1.3067         27.0041         31.2386         33.0865         30.5679
050256..................................................             ***               *         29.8194         29.6793         32.7159         30.6561
050257..................................................          0.9657          1.1735         21.3216         20.1829         24.0737         21.8495
050261..................................................          1.3143          1.1735         27.3234         29.2150         30.8704         29.2688
050262..................................................          2.1509          1.1735         44.0256         39.9946         41.4835         41.8533
050264..................................................          1.3224          1.5353         41.1211         47.7024         43.4181         44.0806
050270..................................................             ***               *         32.4812         33.6855         36.0111         34.0811
050272..................................................          1.3840          1.1735         27.1989         29.4671         30.9290         29.2682
050276..................................................          1.1508          1.5343         39.3778         41.1406         43.7943         41.5076
050277..................................................          1.0162          1.1735         32.5213         35.4443         35.0079         34.2968
050278..................................................          1.5556          1.1735         29.9244         31.8712         34.3798         32.1741
050279..................................................          1.1670          1.1735         27.6573         29.7118         31.6738         29.7052
050280..................................................          1.6965          1.2809         35.2030         38.8341         41.3912         38.4324
050281..................................................          1.3944          1.1735         27.3824         29.4882         31.6639         29.5782
050283..................................................          1.4818          1.5353         43.0638         44.3122         43.6855         43.6928
050289..................................................          1.6753          1.4946         41.1774         44.2814         50.1762         45.4611
050290..................................................          1.7010          1.1735         34.5482         37.3563         40.6192         37.4597
050291..................................................          1.9433          1.4800         35.3653         38.4365         41.2100         38.2986
050292..................................................          1.0703          1.1735         26.8879         26.9786         27.3365         27.0752
050295..................................................          1.4721          1.1735         36.1950         34.7382         38.4256         36.5470
050296..................................................          1.1731          1.5439         39.0060         39.9842         42.5405         40.5415
050298..................................................          1.1699          1.1735         27.7416         30.2022         33.7864         30.5471
050299..................................................             ***               *         31.5435         35.1249         32.3707         32.9747

[[Page 47442]]

 
050300..................................................          1.4383          1.1735         30.7148         30.2874         33.6821         31.6610
050301..................................................          1.2929          1.4146         31.9995         35.9491         37.1103         35.1041
050305..................................................          1.4781          1.5353         44.8630         44.9681         48.5339         46.1773
050308..................................................          1.5103          1.5439         43.0691         43.7413         46.4180         44.3895
050309..................................................          1.4582          1.3067         34.4145         38.2659         40.1499         37.7086
050312..................................................             ***               *         33.9022         36.8498               *         35.1423
050313..................................................          1.2035          1.1941         31.8003         35.0478         37.5024         34.9828
050315..................................................          1.2649          1.1735         28.5933         33.2038         32.5538         31.5496
050320..................................................          1.3051          1.5353         40.2352         45.7686         46.2071         44.0268
050324..................................................          1.7775          1.1735         32.9792         34.5503         36.3474         34.6949
050325..................................................          1.2706          1.1768         30.6116         31.3730         37.0441         33.1665
050327..................................................          1.7326          1.1735         33.0087         33.9507         35.9349         34.3185
050329..................................................          1.2912          1.1735         26.2121         23.2927         33.0390         27.5539
050331..................................................          1.1678               *         20.2692               *               *         20.2692
050333..................................................          1.0046          1.1735         23.4009         19.6352         18.6534         20.3803
050334..................................................          1.6297          1.4593         40.7467         43.9656         47.2968         44.0650
050335..................................................          1.3979          1.1768         28.9403         30.9928         34.7192         31.6181
050336..................................................          1.2364          1.1941         28.5659         30.4664         31.5480         30.2596
050342..................................................          1.2383          1.1735         26.8507         29.2244         30.4226         28.9062
050348..................................................          1.7681          1.1735         37.7898         31.5156         32.7107         33.8510
050349..................................................          0.9573          1.1735         17.4791         24.4863         25.4266         22.6536
050350..................................................          1.3644          1.1735         31.1833         31.0136         31.7908         31.3398
050351..................................................          1.5102          1.1735         30.8661         30.6599         33.3064         31.6205
050352..................................................          1.3903          1.3067         33.9362         36.7673         37.0807         35.9210
050353..................................................          1.4804          1.1735         31.8291         29.4215         30.4206         30.5535
050357..................................................          1.4436          1.1735         32.3095         32.6763         36.2089         33.9116
050359..................................................          1.1695          1.1735         25.7739         29.8345         31.3391         29.0490
050360..................................................          1.4971          1.4800         37.0769         47.4497         52.3811         45.4210
050366..................................................          1.1802          1.1750         31.1854         33.6714         37.1527         33.8230
050367..................................................          1.4016          1.5343         38.7727         38.6330         40.1904         39.2572
050369..................................................          1.4153          1.1735         29.5697         30.6439         32.2467         30.8346
050373..................................................          1.5107          1.1735         31.9271         35.1380         34.3737         33.8407
050376..................................................          1.5472          1.1735         32.9393         34.3539         35.2837         34.2241
050378..................................................          0.9463          1.1735         34.2417         37.9904         40.1923         37.5531
050379..................................................             ***               *         32.9576               *               *         32.9576
050380..................................................          1.6789          1.5439         42.0781         46.0276         49.4258         45.7911
050382..................................................          1.3885          1.1735         29.4323         30.4014         32.6683         30.8167
050385..................................................          1.3083          1.4800         34.5183         36.8107         36.4188         35.9492
050390..................................................          1.1270          1.1735         26.0066         27.3183         27.9359         27.0767
050391..................................................             ***               *         18.1005         17.2141               *         17.6460
050393..................................................          1.4101          1.1735         30.0661         34.1743         35.6356         33.2874
050394..................................................          1.6049          1.1735         27.5061         27.4861         32.1894         29.1045
050396..................................................          1.6109          1.1735         33.5699         32.4918         37.3972         34.4575
050397..................................................          0.7608          1.1735         28.1639         28.3671         29.6825         28.7688
050407..................................................          1.1110          1.4826         37.9066         42.2748         44.6839         41.6954
050410..................................................             ***               *         21.3814               *               *         21.3814
050411..................................................          1.3617          1.1735         37.8064         38.8294         38.6328         38.4664
050414..................................................          1.3219          1.3067         34.6672         38.7585         41.8688         38.5190
050417..................................................          1.2763          1.1735         29.5031         32.9341         36.1222         32.8901
050419..................................................          0.8450               *         33.3124               *               *         33.3124
050420..................................................             ***               *         24.9401         35.2869         39.9237         32.7481
050423..................................................          1.0733          1.1735         30.6416         28.3768         31.9751         30.4055
050424..................................................          1.9946          1.1735         31.0730         34.5680         36.6091         34.1652
050425..................................................          1.3231          1.3067         42.4177         49.2245         46.6628         46.3213
050426..................................................          1.4953          1.1735         30.6899         33.2031         34.9855         32.9985
050430..................................................          0.9678          1.1735         25.0604         23.9045         24.5327         24.4191
050432..................................................             ***               *         30.8030         33.1876         35.2416         33.0686
050433..................................................          1.6238          1.1735         23.0807         21.3573         21.1287         21.8785
050434..................................................          1.0477          1.1735         26.1622         32.6255         33.7794         31.2611
050435..................................................          1.2745          1.1735         28.0305         30.6530         33.0372         30.6068
050438..................................................          1.5345          1.1735         27.2662         36.3026         36.2044         33.3758
050441..................................................          1.9501          1.5439         42.9765         44.5694         46.6160         44.7589
050444..................................................          1.3280          1.2213         30.5504         34.6313         37.6821         34.7268
050447..................................................          0.9382          1.1735         25.2573         26.7960         29.0780         27.0889
050448..................................................          1.3449          1.1735         27.9759         30.6201         32.7748         30.3937
050454..................................................          1.9048          1.4826         43.5311         38.5833         40.2811         40.7579
050455..................................................          1.6157          1.1735         22.7235         30.4606         34.5445         29.0773

[[Page 47443]]

 
050456..................................................          1.2382          1.1735         22.5630         21.6261         27.7659         24.0209
050457..................................................          1.6411          1.4826         45.5828         47.8947         50.0282         47.8438
050464..................................................          1.6927          1.2019         37.3692         38.3058         41.6235         39.0262
050468..................................................          1.5316          1.1735         29.5448         31.1111         35.7409         32.2602
050469..................................................          1.0345               *         28.9080         30.6502               *         29.7684
050470..................................................          1.1011          1.1735         24.6755         27.8678         31.0466         28.1052
050471..................................................          1.7531          1.1735         34.5211         35.4768         36.8680         35.6234
050476..................................................          1.4502          1.4146         34.6585         38.7856         41.1042         38.1894
050477..................................................             ***               *         34.6995         37.7668         40.1566         37.8028
050478..................................................          0.9888          1.1735         33.3999         40.2558         41.1668         38.4344
050481..................................................          1.4426          1.1735         33.7445         36.1394         38.8650         36.2140
050485..................................................          1.6524          1.1735         31.4233         36.1488         34.6219         34.0204
050488..................................................          1.3381          1.5353         42.9904         42.6854         45.0630         43.6228
050491..................................................             ***               *         32.1379         34.3598               *         33.1420
050492..................................................          1.2500          1.1735         27.1540         28.0826         30.7718         28.6561
050494..................................................          1.3595          1.2918         35.9910         38.1177         40.6384         38.1894
050496..................................................          1.7137          1.5343         42.2672         48.2468         51.6363         47.5810
050498..................................................          1.3353          1.3067         33.0298         37.1667         41.0350         37.0348
050502..................................................          1.7120          1.1735         29.5616         28.7046         31.8872         30.0325
050503..................................................          1.5059          1.1735         31.6418         34.0994         37.3605         34.4052
050506..................................................          1.6121          1.2054         36.0164         37.7420         39.8586         37.9166
050510..................................................          1.1736          1.5343         47.5510         52.5376         49.4533         49.9483
050512..................................................          1.4090          1.5353         46.9233         50.9264         48.8057         49.0411
050515..................................................          1.4085          1.1735         38.9978         38.9542         40.2957         39.4965
050516..................................................          1.4990          1.3067         36.2772         39.8161         43.0249         39.7478
050517..................................................          1.2487          1.1735         23.9007         20.0213         22.4096         21.9265
050523..................................................          1.2609          1.5343         35.5452         40.6535         43.4579         39.9385
050526..................................................          1.3236          1.1735         31.3744         28.1997         33.3964         30.8791
050528..................................................          1.1384          1.1735         29.6838         31.4941         36.2908         32.6332
050531..................................................          1.0427          1.1735         26.9420         27.1974         28.3348         27.4859
050534..................................................          1.4830          1.1735         29.8603         33.1666         36.6447         33.1978
050535..................................................             ***               *         32.3723         34.6143         37.8174         35.0680
050537..................................................          1.4153          1.3067         31.3844         34.9931         38.2145         35.0179
050539..................................................             ***               *         29.8242               *               *         29.8242
050541..................................................          1.5793          1.5343         46.1121         52.5908         48.0867         48.9365
050543..................................................          0.7499          1.1735         26.1103         29.4443         24.4913         26.5587
050545..................................................          0.8097          1.1735         30.5554         31.3080         35.3209         32.3832
050546..................................................          0.6608          1.1735         30.2329         33.2245         36.5099         33.2376
050547..................................................          0.9370          1.4800         33.2204         34.8401         33.8036         33.9243
050548..................................................          0.8110          1.1735         30.3775         39.2234         41.1075         36.6565
050549..................................................          1.5409          1.1735         34.9818         35.2792         38.3927         36.2153
050550..................................................             ***               *         30.2301         30.9612         34.9476         31.9494
050551..................................................          1.3354          1.1735         31.6165         34.0467         37.2506         34.3701
050552..................................................          1.0600          1.1735         27.1744         33.0711         33.9810         31.2584
050557..................................................          1.6021          1.2019         31.8048         33.3654         35.7023         33.6767
050561..................................................          1.5394          1.1735         38.8652         38.0196         38.2543         38.3445
050567..................................................          1.6001          1.1735         32.9829         35.7063         37.6384         35.4790
050568..................................................          1.1557          1.1735         24.4061         25.2337         26.0908         25.2915
050569..................................................          1.3188               *         33.0259         31.6785               *         32.3431
050570..................................................          1.5431          1.1735         34.0171         34.5161         38.4373         35.7023
050571..................................................             ***               *         33.6156         34.7627         39.0649         35.8458
050573..................................................          1.6281          1.1735         34.1991         34.7279         35.2842         34.7594
050575..................................................          1.2413          1.1735         25.2513         25.1457         23.7990         24.6725
050577..................................................             ***               *         30.8841         32.3744               *         31.6437
050578..................................................          1.5073          1.1735         33.8825         35.2390         31.3639         33.5051
050579..................................................             ***               *         39.4976         42.5081               *         40.8657
050580..................................................          1.2333          1.1735         31.6256         31.5806         34.1531         32.4721
050581..................................................          1.4916          1.1735         32.1801         34.0136         37.7567         34.6700
050583..................................................          1.6463          1.1735         33.3697         34.5747         37.4450         35.0070
050584..................................................          1.3197          1.1735         24.8180         30.3434         30.7839         28.6031
050585..................................................             ***               *         22.7121         22.2521               *         22.4798
050586..................................................          1.2833          1.1735         27.4173         26.4782         31.3513         28.3870
050588..................................................          1.3520          1.1735         32.8212         32.7556         37.7387         34.4140
050589..................................................          1.1529          1.1735         30.9546         34.5100         37.6886         34.3942
050590..................................................          1.2947          1.3067         32.2142         38.4971         41.7519         37.3616
050591..................................................             ***               *         28.8549         30.6106         34.7133         31.3307
050592..................................................             ***               *         24.4542         27.3606         31.8053         27.4568

[[Page 47444]]

 
050594..................................................             ***               *         34.7946         36.5256         42.0788         37.6355
050597..................................................          1.2585          1.1735         27.5691         28.8294         31.5625         29.3959
050599..................................................          1.8926          1.3067         38.1975         32.7835         34.7187         35.1751
050601..................................................          1.5530          1.1735         34.7409         36.0572         39.7717         36.8588
050603..................................................          1.4447          1.1735         30.2464         34.0275         35.0279         33.2305
050604..................................................          1.3981          1.5439         49.9428         55.0821         49.4446         51.2951
050608..................................................          1.2664          1.1735         23.3630         30.4169         31.2909         28.2962
050609..................................................          1.2820          1.1735         41.1797         41.7208         39.7397         40.7273
050613..................................................             ***               *               *         42.8108         42.9930         42.8892
050615..................................................             ***               *         33.2909         35.9547         39.1299         36.0890
050616..................................................          1.5105          1.1735         36.9017         37.7284         37.1200         37.2515
050618..................................................          0.9805          1.1735         27.4539         31.3182         33.1472         30.7682
050623..................................................             ***               *         32.0627               *               *         32.0627
050624..................................................          1.2787          1.1735         32.2907         33.9594         35.9346          4.1566
050625..................................................          1.7417          1.1735         36.3631         38.6591         41.0439         38.7106
050630..................................................             ***               *         30.9410               *               *         30.9410
050633..................................................          1.2282          1.2054         35.3734         36.8302         38.4916         36.8992
050636..................................................          1.2917          1.1735         30.5156         32.5576         33.0718         32.0958
050641..................................................          1.2925          1.1735         21.4612         39.6921         32.3586         29.3383
050644..................................................          0.9879          1.1735         27.6547         28.8237         30.7981         29.0878
050660..................................................          1.7387               *               *               *               *               *
050662..................................................          0.8701          1.5439         32.6362         33.2446         38.3017         34.3633
050663..................................................          1.2787          1.1735         25.7747         27.7334         17.7035         22.5204
050667..................................................          0.8474          1.4267         26.3937         24.2771         25.9161         25.5327
050668..................................................          1.2080          1.4826         31.8065         56.6555         51.6049         44.4447
050674..................................................          1.1462          1.3067         42.6866         48.0893         47.0720         46.1691
050677..................................................          1.4838          1.1735         38.7984         38.5770         39.2161         38.8994
050678..................................................          1.3184          1.1735         30.7219         32.4473         33.7633         32.3842
050680..................................................          1.2329          1.5343         38.3946         38.2871         37.9856         38.2008
050682..................................................          0.8469          1.1735         21.7792         17.9077         22.2193         20.5433
050684..................................................          1.1133          1.1735         26.4234         27.5256         28.8378         27.6192
050686..................................................          1.2184          1.1735         40.9486         41.0188         39.7757         40.4752
050688..................................................          1.2024          1.5439         41.9325         44.1510         49.4062         45.3230
050689..................................................          1.5246          1.5343         42.2018         45.0951         48.8533         45.3625
050690..................................................          1.1505          1.4800         47.2769         50.9094         49.0226         49.1863
050693..................................................          1.3838          1.1735         35.0621         34.5797         39.6838         36.3980
050694..................................................          1.0491          1.1735         28.9544         30.7858         32.1065         30.6719
050695..................................................             ***               *         35.6548         39.6004         49.0340         41.9291
050696..................................................          2.2803          1.1735         35.9220         37.3837         39.8963         37.7297
050697..................................................          1.1042          1.2809         25.1984         16.6605         22.1441         20.8111
050699..................................................             ***               *         26.8211         28.9083         21.5725         25.9115
050701..................................................          1.3268          1.1735         29.6253         31.9529         34.9876         32.5132
050704..................................................          1.0048          1.1735         25.3488         29.7740         31.6097         29.0145
050707..................................................          1.2478          1.4946         34.0550         35.7311         43.5555         37.4838
050708..................................................          1.5880          1.1735         22.5034         30.5860         31.8442         27.9326
050709..................................................          1.4145          1.1735         25.6119         26.8549         24.5621         25.5804
050710..................................................          1.4535          1.1735         39.9858         45.8022         44.2482         43.5809
050713..................................................             ***               *         20.2803         21.1273         21.4825         20.8079
050714..................................................          1.3819          1.5719         33.6676         31.9527         34.1542         33.3149
050717..................................................          1.4472          1.1735         38.0796         39.3227         38.8773         38.7316
050718..................................................             ***               *         21.4996         25.5140         31.9622         26.0529
050720..................................................          0.9087          1.1735         30.0811         29.4726         30.3595         29.9462
050722..................................................          0.9937          1.1735               *         31.4867         33.7991         32.6970
050723..................................................          1.3661          1.1735         35.0119         38.5446         38.7140         37.6299
050724..................................................          1.9875          1.1735         34.4267         31.6910         35.2344         33.8380
050725..................................................          0.8900          1.1735         21.7816         24.3100         30.0580         25.0169
050726..................................................          1.4849          1.2019         27.8433         30.6479         28.6361         29.1183
050727..................................................          1.2033          1.1735         24.3026         33.9118         32.7783         30.6217
050728..................................................             ***               *         36.0820         39.3581         41.8263         38.7034
050729..................................................             ***               *         34.2580         36.5432         38.1882         36.3976
050730..................................................             ***               *         51.5425         37.0629         39.2046         42.2691
050732..................................................          2.3947          1.1735               *               *         33.6831         33.6831
050733..................................................          1.6531          1.2809               *               *         40.1517         40.1517
050734..................................................             ***               *               *               *         31.2883         31.2883
050735..................................................          1.3414          1.1735               *               *               *               *
050736..................................................          1.2215          1.1735               *               *               *               *
050737..................................................          1.4935          1.1735               *               *               *               *

[[Page 47445]]

 
050738..................................................          1.3812          1.1735               *               *               *               *
050739..................................................          1.6758          1.1735               *               *               *               *
050740..................................................          1.3840          1.1735               *               *               *               *
050741..................................................          1.4977          1.1735               *               *               *               *
050742..................................................          1.3973          1.1735               *               *               *               *
050744..................................................          1.9639          1.1735               *               *               *               *
050745..................................................          1.3614          1.1735               *               *               *               *
050746..................................................          1.7868          1.1735               *               *               *               *
050747..................................................          1.4029          1.1735               *               *               *               *
050748..................................................          1.0605          1.1941               *               *               *               *
050749..................................................          1.2549          1.1735               *               *               *               *
050750..................................................          1.4161          1.2019               *               *               *               *
050751..................................................          3.3418          1.1735               *               *               *               *
050752..................................................          1.4159          1.1735               *               *               *               *
050753..................................................          1.7076          1.1735               *               *               *               *
050754..................................................          1.2457          1.4946               *               *               *               *
050755..................................................          1.4141          1.1735               *               *               *               *
050756..................................................          1.9522          1.1735               *               *               *               *
050758..................................................          3.6091          1.1735               *               *               *               *
060001..................................................          1.5654          1.0454         26.8470         29.6191         31.0018         29.1634
060003..................................................          1.3970          1.0454         24.2224         29.4809         31.3616         28.3333
060004..................................................          1.2505          1.0454         29.9649         32.4609         32.0095         31.4837
060006..................................................          1.3300          0.9447         24.5704         25.2139         27.2057         25.6628
060008..................................................          1.2032          0.9447         23.3859         23.0947         26.5175         24.3270
060009..................................................          1.4945          1.0454         28.7645         31.5210         32.4208         30.9678
060010..................................................          1.6912          0.9732         28.9850         27.1916         29.5304         28.5344
060011..................................................          1.6330          1.0454         27.2833         35.1573         32.1001         31.3632
060012..................................................          1.4825          0.9466         26.2469         27.3885         28.7724         27.4500
060013..................................................          1.5046          0.9447         24.5994         26.8675         27.9145         26.4238
060014..................................................          1.8610          1.0454         31.2588         31.0542         31.9389         31.4097
060015..................................................          1.7851          1.0454         30.4533         32.5285         32.2927         31.6808
060016..................................................          1.2417          0.9447         25.6527         26.5427         27.1430         26.4586
060018..................................................          1.2836          0.9447         25.7628         24.1086         25.3897         25.0879
060020..................................................          1.6165          0.9447         22.6748         24.5992         25.9147         24.3734
060022..................................................          1.6516          0.9466         26.5238         28.2944         29.3379         28.0339
060023..................................................          1.6699          1.0454         27.7644         29.5760         31.1556         29.4769
060024..................................................          1.8432          1.0454         29.0130         30.0279         31.5411         30.2384
060027..................................................          1.6691          1.0454         28.0909         29.6121         30.9212         29.6273
060028..................................................          1.5125          1.0454         30.0448         31.6900         32.1656         31.3047
060030..................................................          1.4488          0.9732         26.6251         27.8642         29.9513         28.1546
060031..................................................          1.5591          0.9466         26.3650         27.8345         29.3907         27.8462
060032..................................................          1.4850          1.0454         30.4247         31.0686         32.7383         31.4187
060034..................................................          1.6640          1.0454         29.8445         30.9359         32.1252         30.9377
060036..................................................          1.1018          0.9447         20.7131         20.3226         22.8256         21.2502
060041..................................................          0.8785          0.9447         23.4978         24.6142         25.9710         24.7303
060043..................................................          1.1879          0.9447         18.7897         18.2143         21.9955         19.6596
060044..................................................          1.2127          0.9447         25.0360         26.5611         24.8352         25.4581
060049..................................................          1.2787          0.9579         29.0598         29.3724         30.2192         29.5665
060054..................................................          1.4508          1.0135         22.3490         24.3389         25.0980         23.9188
060064..................................................          1.7308          1.0454         31.3105         32.3681         33.2428         32.1357
060065..................................................          1.3983          1.0454         31.1987         32.4735         33.8538         32.5473
060071..................................................          1.1697          0.9447         25.7248         27.6657         28.1762         27.2779
060075..................................................          1.3389          1.0135         32.7563         32.2545         37.6023         34.1968
060076..................................................          1.2662          0.9447         26.8236         26.5631         30.7808         28.0383
060096..................................................          1.5564          1.0454         30.0602         32.1310         37.8243         33.2697
060100..................................................          1.6916          1.0454         32.1537         32.6104         33.2145         32.6673
060103..................................................          1.3607          1.0454         30.3003         31.6314         32.9690         31.6638
060104..................................................          1.3818          1.0454         32.0889         32.4232         35.4409         33.2464
060107..................................................          1.4409          1.0454         26.1883         26.8388         28.0660         27.0405
060112..................................................          1.6549          1.0454               *         34.9272         34.7116         34.8116
060113..................................................          1.4257          1.0454               *               *         32.6073         32.6073
060114..................................................          1.3815          1.0454               *               *         34.8536         34.8536
060115..................................................          0.8094          0.9447               *               *               *               *
060116..................................................          1.4020          1.0454               *               *               *               *
060117..................................................          1.5297          0.9447               *               *               *               *
060118..................................................          1.2063          0.9447               *               *               *               *
070001..................................................          1.6191          1.2625         34.0302         35.8958         37.0403         35.6798

[[Page 47446]]

 
070002..................................................          1.7625          1.2432         31.1530         33.4398         34.7636         33.1056
070003..................................................          1.1124          1.2432         32.4197         34.1352         35.6320         34.0741
070004..................................................          1.1690          1.2432         29.2544         29.4448         29.9557         29.5654
070005..................................................          1.3939          1.2625         32.1668         33.7813         34.9404         33.6347
070006..................................................          1.3734          1.3001         36.8469         37.9148         39.3935         38.0396
070007..................................................          1.3262          1.2432         31.7125         35.9617         36.2914         34.6709
070008..................................................          1.1977          1.2432         26.4806         28.5506         30.7305         28.5900
070009..................................................          1.1826          1.2432         30.2706         32.9299         35.5670         32.9116
070010..................................................          1.7655          1.3001         32.5798         35.3730         36.7227         34.9766
070011..................................................          1.4443          1.2432         29.9105         31.8987         31.6843         31.1785
070012..................................................          1.2719          1.2432         44.1424         29.4216         31.9345         33.9309
070015..................................................          1.3965          1.3001         33.4595         35.3385         37.3454         35.4457
070016..................................................          1.5006          1.2625         31.0904         31.4930         33.2391         31.9056
070017..................................................          1.3588          1.2625         31.7223         34.0490         35.6456         33.8516
070018..................................................          1.4240          1.3001         37.6081         39.7515         41.8460         39.8228
070019..................................................          1.3281          1.2625         31.8148         34.5125         33.7246         33.3670
070020..................................................          1.3289          1.2432         31.0935         33.6453         32.9714         32.5833
070021..................................................          1.1631          1.2432         33.2357         36.9241         38.5623         36.2063
070022..................................................          1.6736          1.2625         35.4120         39.0462         40.2283         38.2889
070024..................................................          1.3628          1.2432         32.0430         35.2323         34.7419         34.0490
070025..................................................          1.8086          1.2432         30.9938         32.4085         34.5887         32.6669
070027..................................................          1.4467          1.2432         31.8018         29.8513         30.4433         30.7112
070028..................................................          1.5979          1.3001         31.5035         35.1966         38.0855         34.9184
070029..................................................          1.3082          1.2432         27.7213         30.9299         31.0662         29.9131
070031..................................................          1.2692          1.2625         28.9189         30.1915         30.4054         29.8553
070033..................................................          1.4708          1.3001         37.1929         40.1594         41.7955         39.7822
070034..................................................          1.3978          1.3001         36.3899         38.3965         40.1685         38.3201
070035..................................................          1.2876          1.2432         27.5585         30.7440         32.2766         30.1626
070036..................................................          1.6060          1.2432         36.1610         38.3413         42.3391         39.0110
070038..................................................          1.3936          1.2625         25.7516         25.7914         35.8053         27.8684
070039..................................................          0.9371          1.2625         31.2269         36.1369         34.7219         33.8193
070040..................................................          0.9999          1.2432               *               *               *               *
080001..................................................          1.6247          1.0765         30.0242         32.0105         33.5310         31.8696
080002..................................................             ***               *         27.7932         29.6800         31.3391         29.5960
080003..................................................          1.5716          1.0765         29.2266         30.7697         34.3048         31.5058
080004..................................................          1.5142          1.0666         27.4921         30.1094         32.2443         30.0060
080006..................................................          1.3077          1.0104         25.6160         27.4749         28.8862         27.4041
080007..................................................          1.3915          1.0498         27.0074         30.1100         31.1645         29.4885
090001..................................................          1.7715          1.0675         35.0413         36.6577         38.3043         36.6494
090003..................................................          1.2497          1.0675         29.2660         31.0419         32.1960         30.9276
090004..................................................          1.9608          1.0675         32.2021         35.6964         37.3798         35.0400
090005..................................................          1.3882          1.0675         30.7728         33.0178         33.7448         32.5073
090006..................................................          1.4079          1.0675         29.5590         29.4912         31.3562         30.1264
090008..................................................          1.3376          1.0675         29.1059         32.0745         33.7471         31.3884
090011..................................................          2.0575          1.1016         34.0693         36.7579         38.0654         36.2932
100001..................................................          1.5331          0.9089         24.4060         26.4631         27.2809         26.0728
100002..................................................          1.4368          1.0247         25.3389         27.2350         28.7068         27.1087
100004..................................................          0.9210               *         16.5974               *               *         16.5974
100006..................................................          1.6452          0.9284         26.3789         29.1505         28.3673         27.9603
100007..................................................          1.6373          0.9284         26.5378         28.5702         29.0472         28.0969
100008..................................................          1.7213          1.0008         27.4314         29.1705         30.3392         29.0493
100009..................................................          1.4490          1.0008         25.9381         27.4424         27.8618         27.0421
100012..................................................          1.6154          0.9485         26.3788         28.4600         29.8353         28.2813
100014..................................................          1.4083          0.9170         24.5862         25.1524         27.4019         25.7601
100015..................................................          1.3028          0.9170         24.6038         26.0916         27.2483         25.9359
100017..................................................          1.6275          0.9170         26.1580         27.9654         28.2402         27.5020
100018..................................................          1.6508          0.9618         28.1481         30.2423         30.6545         29.7108
100019..................................................          1.6608          0.9380         27.6179         28.6630         30.3008         28.8670
100020..................................................             ***               *         23.9414         27.1257               *         25.5458
100022..................................................          1.7420          1.0247         29.9345         32.8088         36.7912         33.2233
100023..................................................          1.5160          0.9170         23.0074         25.2652         25.4270         24.5739
100024..................................................          1.1780          1.0008         30.2395         29.1894         29.5423         29.6470
100025..................................................          1.6816          0.8733         22.1580         23.3843         26.7013         24.0625
100026..................................................          1.5788          0.8733         21.4703         23.4730         26.0147         23.7184
100027..................................................             ***               *         16.1223         18.9432               *         17.4007
100028..................................................          1.3580          0.9380         26.8661         27.7497         27.5664         27.4076
100029..................................................          1.2822          1.0008         27.5844         28.8842         30.5382         29.0530

[[Page 47447]]

 
100030..................................................          1.2839          0.9284         24.0943         24.6314         25.3513         24.7170
100032..................................................          1.8022          0.9170         25.2450         26.8162         26.9275         26.3598
100034..................................................          1.8268          1.0008         25.9415         28.1280         27.2915         27.0674
100035..................................................          1.5677          0.9770         26.9407         29.4803         30.2382         28.8750
100038..................................................          1.8213          1.0247         29.8583         31.3403         31.6657         30.9770
100039..................................................          1.5152          1.0247         28.4627         28.2531         29.3699         28.6922
100040..................................................          1.7005          0.9089         23.6443         26.2429         27.2835         25.7456
100043..................................................          1.3766          0.9170         25.2273         26.4221         27.0054         26.2287
100044..................................................          1.4158          1.0035         28.3596         30.3659         33.1141         30.6154
100045..................................................          1.3353          0.9170         26.9641         29.7375         26.5413         27.7587
100046..................................................          1.3025          0.9170         26.3673         26.9469         26.7702         26.6963
100047..................................................          1.8643          0.9770         25.0404         26.7674         29.9729         27.2658
100048..................................................          0.9265          0.8733         18.8770         19.3226         20.2657         19.5008
100049..................................................          1.1601          0.8834         22.9809         24.0385         24.5571         23.8789
100050..................................................          1.1287          1.0008         19.8713         21.5101         25.3354         22.2763
100051..................................................          1.3531          0.9284         23.1940         28.0946         28.6225         26.7140
100052..................................................          1.4482          0.8834         22.3920         23.6796         23.4036         23.1677
100053..................................................          1.2917          1.0008         27.3224         28.5118         31.7415         29.1121
100054..................................................          1.3029          0.8733         28.0512         28.7646         30.5515         29.0987
100055..................................................          1.4149          0.9170         23.5332         25.6243         27.3826         25.3801
100057..................................................          1.4545          0.9284         25.3897         24.8010         26.3134         25.5307
100061..................................................          1.5462          1.0008         29.2565         31.4413         30.4528         30.3973
100062..................................................          1.6808          0.8733         25.2340         25.1280         25.9597         25.4599
100063..................................................          1.3031          0.9170         24.7026         25.5097         26.4139         25.5745
100067..................................................          1.4065          0.9170         26.1213         26.8628         27.4762         26.8565
100068..................................................          1.6610          0.9170         25.9202         26.1341         27.6576         26.5514
100069..................................................          1.4494          0.9170         24.7442         25.7450         27.2108         25.8887
100070..................................................          1.7132          0.9770         24.8883         26.8461         29.2005         26.9667
100071..................................................          1.2744          0.9170         24.9682         26.3768         25.3667         25.5850
100072..................................................          1.3878          0.9170         26.0459         25.7962         27.1889         26.3540
100073..................................................          1.7724          1.0247         30.3358         30.5845         29.4165         30.1139
100075..................................................          1.4514          0.9170         25.1691         25.7612         27.6534         26.2376
100076..................................................          1.1671          1.0008         21.9483         23.4551         24.0412         23.1092
100077..................................................          1.3562          0.9770         26.0347         30.6925         30.7564         29.1495
100079..................................................          1.5014               *               *               *               *               *
100080..................................................          1.7114          1.0247         27.0126         28.2188         29.5346         28.2767
100081..................................................          0.9416          0.8733         15.6661         16.9756         19.5711         17.4305
100084..................................................          1.7873          0.9284         26.3393         27.4947         32.7503         28.7737
100086..................................................          1.2965          1.0247         28.2641         28.5971         29.9072         28.9234
100087..................................................          1.8981          0.9770         27.1531         29.5823         30.5938         29.1299
100088..................................................          1.5782          0.9089         25.9182         26.7574         28.2825         27.0232
100090..................................................          1.4904          0.9089         24.2422         26.5703         27.6175         26.1889
100092..................................................          1.5158          0.9380         28.4789         27.8341         26.6315         27.6313
100093..................................................          1.7127          0.8733         21.3524         21.6438         22.5555         21.8792
100099..................................................          1.0873          0.8834         21.3035         25.8454         26.2395         24.4525
100102..................................................          1.0996          0.8858         23.8596         26.1015         27.8551         25.9619
100105..................................................          1.4480          0.9851         26.8091         29.9745         30.9915         29.2009
100106..................................................          1.0560          0.8733         24.0389         24.7650         24.8098         24.5435
100107..................................................          1.2347          0.9485         26.1337         27.4760         30.5764         28.1079
100108..................................................          0.8046          0.8733         22.0750         21.3540         22.6270         21.9880
100109..................................................          1.2508          0.9170         24.9951         25.5669         26.2446         25.6303
100110..................................................          1.6550          0.9284         29.1494         29.4788         29.5985         29.4188
100113..................................................          2.0264          0.9301         26.3806         28.0440         29.2429         27.9271
100114..................................................          1.3817          1.0008         29.2195         29.2862         30.2544         29.5959
100117..................................................          1.2145          0.9089         26.4536         27.7198         28.4928         27.6036
100118..................................................          1.3596          0.9089         28.0569         27.6438         27.0981         27.5188
100121..................................................          1.1043          0.8834         24.8579         26.2990         27.9353         26.4264
100122..................................................          1.2268          0.8733         23.4751         24.6285         26.7175         24.9538
100124..................................................          1.1542          0.8733         22.7023         24.0333         24.8880         23.9087
100125..................................................          1.1875          1.0008         26.7452         29.7750         31.7749         29.5544
100126..................................................          1.3314          0.9170         24.4515         29.6247         28.3213         27.4142
100127..................................................          1.5666          0.9170         24.4485         26.0923         27.4632         26.0315
100128..................................................          2.2084          0.9170         29.4979         29.2566         30.0324         29.6033
100130..................................................          1.1786          1.0247         24.2046         26.0268         28.3651         26.1504
100131..................................................          1.4165          1.0008         29.2462         27.8164         29.7647         28.9653
100132..................................................          1.2457          0.9170         24.3293         26.0526         27.8180         26.1461
100134..................................................          0.8565          0.8733         20.9243         20.7367         21.6544         21.1186

[[Page 47448]]

 
100135..................................................          1.6113          0.9027         24.0024         26.7030         29.1856         26.5350
100137..................................................          1.2884          0.8834         25.1974         24.8519         26.8391         25.6704
100139..................................................          0.8316          0.9301         17.5489         18.2197         21.1310         18.9563
100140..................................................          1.0862          0.9089         26.4720         26.1352         27.8352         26.8143
100142..................................................          1.2095          0.8733         22.9577         24.8853         25.6999         24.5446
100150..................................................          1.2689          1.0008         26.1990         26.8492         27.7740         26.9185
100151..................................................          1.7476          0.9089         28.1322         30.6447         29.7267         29.4931
100154..................................................          1.5849          1.0008         27.6127         28.2506         29.7332         28.5816
100156..................................................          1.1335          0.9301         26.7092         27.5706         28.3927         27.6111
100157..................................................          1.5749          0.9170         27.3851         29.7455         30.3086         29.2306
100160..................................................          1.1427          0.8733         26.9851         30.7454         30.6902         29.5445
100161..................................................          1.5163          0.9284         28.8077         28.0545         29.5673         28.8155
100166..................................................          1.4671          0.9770         27.9618         28.8685         30.1811         28.9924
100167..................................................          1.3044          1.0247         30.3694         30.2166         31.7813         30.8188
100168..................................................          1.4077          1.0247         27.1292         27.6739         27.0938         27.2997
100172..................................................          1.2812          1.0008         18.2735         20.7857         22.2183         20.2634
100173..................................................          1.6816          0.9170         24.8721         26.5436         28.6402         26.6632
100175..................................................          0.9376          0.8733         23.5455         23.9665         25.0913         24.2153
100176..................................................          1.9322          1.0247         31.2694         30.7087         33.3181         31.7301
100177..................................................          1.3034          0.9380         26.6781         28.0089         29.6284         28.1072
100179..................................................          1.8025          0.9089         29.5619         29.1111         29.2795         29.3153
100180..................................................          1.3656          0.9170         27.1804         29.9238         31.0099         29.4514
100181..................................................          1.0916          1.0008         21.8540         24.3708         23.9656         23.5712
100183..................................................          1.2331          1.0008         27.4951         29.0270         30.5042         28.9860
100187..................................................          1.2405          1.0008         27.3653         27.8144         30.7705         28.5922
100189..................................................          1.3212          1.0247         28.4136         28.8320         29.9376         29.0848
100191..................................................          1.3251          0.9170         26.6341         28.3710         29.4533         28.2035
100200..................................................          1.3568          1.0247         29.8963         28.7694         29.6400         29.4296
100204..................................................          1.5564          0.9301         25.7537         27.4763         27.2819         26.8493
100206..................................................          1.3044          0.9170         25.2196         27.0295         27.7551         26.6843
100209..................................................          1.4511          1.0008         26.6245         26.8473         28.5336         27.3567
100210..................................................          1.6418          1.0247         28.9486         29.8515         32.0830         30.2959
100211..................................................          1.1980          0.9170         24.7095         24.7533         26.2859         25.2466
100212..................................................          1.5281          0.8733         24.7566         26.1846         27.7960         26.2590
100213..................................................          1.5667          0.9770         27.1936         27.9283         29.5218         28.1998
100217..................................................          1.2128          0.9851         25.2907         27.3989         27.7683         26.8879
100220..................................................          1.7272          0.9485         26.0905         28.3868         29.3601         28.0186
100223..................................................          1.5830          0.8733         24.7015         25.0332         26.1115         25.3049
100224..................................................          1.2841          1.0247         24.8077         26.6446         28.0455         26.4947
100225..................................................          1.2966          1.0247         28.4316         28.5259         30.8782         29.2134
100226..................................................          1.2741          0.9089         29.3317         28.8165         28.8791         28.9967
100228..................................................          1.3720          1.0247         29.8952         28.1396         30.1635         29.3741
100230..................................................          1.3872          1.0247         28.1703         29.8493         31.9448         29.9638
100231..................................................          1.7057          0.8733         25.5175         25.7037         26.6773         25.9676
100232..................................................          1.2525          0.9301         24.9322         28.5537         28.3892         27.3025
100234..................................................          1.2967          1.0247         26.3601         27.4456         28.8835         27.5798
100236..................................................          1.4833          0.9770         26.6585         28.9955         28.3017         27.9879
100237..................................................          1.9061          1.0247         31.3543         31.7848         33.1536         32.0709
100238..................................................          1.6524          0.9170         28.4302         30.1094         31.4198         30.0500
100239..................................................          1.2450          0.9770         27.7592         28.6893         29.0650         28.5164
100240..................................................          1.0067          1.0008         25.3265         27.3523         29.7000         27.5097
100242..................................................          1.4462          0.8733         24.0990         25.6083         26.1988         25.3024
100243..................................................          1.5930          0.9170         26.1131         27.4534         28.3894         27.3449
100244..................................................          1.4214          0.9485         25.2584         26.6876         28.2881         26.8124
100246..................................................          1.5767          1.0035         28.9894         29.3310         30.1061         29.4946
100248..................................................          1.5245          0.9170         27.7798         28.8082         30.2133         28.9513
100249..................................................          1.2736          0.9170         23.2084         24.9876         26.4676         24.9134
100252..................................................          1.1775          0.9851         25.8540         27.8256         27.1639         26.9484
100253..................................................          1.3700          1.0247         25.7121         27.4927         28.7770         27.3747
100254..................................................          1.5053          0.9027         25.7338         26.1406         27.4900         26.4898
100255..................................................          1.2926          0.9170         24.4808         26.5571         27.3866         26.1585
100256..................................................          1.8509          0.9170         28.8856         30.3081         30.2093         29.8134
100258..................................................          1.5137          1.0247         31.2482         31.2203         33.8630         32.1172
100259..................................................          1.2826          0.9170         26.0175         27.4809         29.0612         27.5355
100260..................................................          1.3247          1.0035         27.5188         26.7129         28.2301         27.4901
100264..................................................          1.3409          0.9170         25.5489         26.8216         28.0370         26.7874
100265..................................................          1.2691          0.9170         24.1454         25.7432         26.3326         25.4676

[[Page 47449]]

 
100266..................................................          1.4175          0.8733         23.2340         23.0208         24.2517         23.5318
100267..................................................          1.3146          0.9770         27.3769         28.7259         28.9674         28.3539
100268..................................................          1.1557          1.0247         29.2898         29.0668         30.5750         29.6378
100269..................................................          1.3557          1.0247         26.7450         26.6047         27.8407         27.0869
100271..................................................          2.3567               *               *               *               *               *
100275..................................................          1.2876          1.0247         26.0361         26.8943         28.7797         27.3049
100276..................................................          1.2417          1.0247         30.0576         29.7606         30.5720         30.1327
100277..................................................          1.4051          1.0008         16.5427         20.4791         24.1122         20.4492
100279..................................................          1.3366          0.9485         26.8606         28.6383         29.2257         28.2861
100281..................................................          1.3703          1.0247         28.6660         29.6698         30.9131         29.8017
100284..................................................          1.0113          1.0008         23.8170         22.3134         25.2637         23.6827
100285..................................................          1.2689          1.0247               *               *         41.9481         41.9481
100286..................................................          1.6191          0.9618         29.4284         28.3645         25.8085         27.6610
100287..................................................          1.3868          1.0247         28.3427         28.1051         29.7536         28.7018
100288..................................................          1.5156          1.0247         33.8141         28.7902         31.0506         31.0802
100289..................................................          1.6865          1.0247         29.2915         29.6376         31.9011         30.3063
100290..................................................          1.1899          0.9315         23.5080         27.1011         28.7111         26.4179
100291..................................................          1.2458          0.9380               *         28.4722         28.1515         28.2974
100292..................................................          1.3544          0.8733               *         26.7063         27.7644         27.2418
100293..................................................             ***               *               *         32.7963               *         32.7963
100294..................................................             ***               *               *         30.7557               *         30.7557
100295..................................................             ***               *               *         26.1983               *         26.1983
100296..................................................          1.3408          1.0008               *               *         29.3870         29.3870
100297..................................................             ***               *               *               *         32.1536         32.1536
100298..................................................          0.8217          0.9027               *               *         19.0297         19.0297
100299..................................................          1.2623          0.9770               *               *         34.3697         34.3697
100300..................................................          1.5491          0.9770               *               *               *               *
100301..................................................          2.4311          0.8733               *               *               *               *
100302..................................................          1.1232          0.9284               *               *               *               *
110001..................................................          1.3413          0.8582         25.3102         26.4338         26.5640         26.1063
110002..................................................          1.3627          0.9812         25.3897         26.4715         26.2228         26.0377
110003..................................................          1.2925          0.7861         21.4002         22.7066         24.2097         22.7660
110004..................................................          1.3576          0.8962         23.9911         24.9978         25.1846         24.7384
110005..................................................          1.2344          0.9812         22.8999         28.1209         27.2826         26.2185
110006..................................................          1.5283          0.9996         28.6090         28.3839               *         28.4953
110007..................................................          1.5851          0.8666         23.8729         26.6396         26.3133         25.6316
110008..................................................          1.3081          0.9812         27.1711         29.2947         30.9757         29.1807
110010..................................................          2.2316          0.9812         29.7142         31.7185         33.2396         31.5599
110011..................................................          1.2246          0.9812         26.0899         28.0598         28.5892         27.5869
110015..................................................          1.0599          0.9812         26.6610         28.1274         28.8796         27.9810
110016..................................................          1.2630          0.8587         21.7610         22.7263         24.3563         22.9378
110018..................................................          1.1608          0.9812         28.2431         26.8016         30.1849         28.3512
110020..................................................          1.3212          0.9812         26.8501         28.3822         27.5559         27.6146
110023..................................................          1.2983          0.9812         27.3029         29.8061         29.3282         28.8606
110024..................................................          1.4918          0.8890         25.7205         27.0225         27.3357         26.6955
110025..................................................          1.4750          0.9764         26.1311         31.0703         30.2845         29.1378
110026..................................................          1.1088          0.7861         21.2827         21.8018         22.8820         21.9825
110027..................................................          1.0967          0.7861         20.2175         22.6058         25.5291         22.6326
110028..................................................          1.7895          0.9598         28.1619         30.4641         31.4568         30.0489
110029..................................................          1.8257          0.9812         24.8893         27.3618         29.2134         27.2823
110030..................................................          1.3179          0.9812         26.4770         29.6841         29.9531         28.7936
110031..................................................          1.2864          0.9812         24.7874         27.1989         29.5533         27.2214
110032..................................................          1.1823          0.7861         21.9407         23.2586         25.1896         23.4280
110033..................................................          1.4755          0.9812         28.3210         30.3415         32.4178         30.4701
110034..................................................          1.7240          0.9598         26.9986         27.2338         28.7915         27.6795
110035..................................................          1.7468          0.9812         27.4583         28.9408         30.1852         28.9129
110036..................................................          1.8443          0.8890         26.8789         26.6664         27.2280         26.9397
110038..................................................          1.5056          0.8454         21.2138         22.2720         22.9685         22.1533
110039..................................................          1.3676          0.9598         24.7248         26.3503         26.2485         25.8081
110040..................................................          1.0900          0.9812         19.7509         20.9487         23.9526         21.5987
110041..................................................          1.2685          0.9812         23.4073         24.8864         26.1948         24.8276
110042..................................................          1.0546          0.9812         28.6873         34.9954         33.4391         32.3610
110043..................................................          1.7588          0.8890         26.6323         27.8477         28.8551         27.7751
110044..................................................          1.1550          0.7861         20.9654         23.3039         24.3772         22.8675
110045..................................................          1.0604          0.9812         24.9821         24.4275         27.7619         25.7235
110046..................................................          1.1564          0.9812         23.8292         26.7464               *         25.2689
110050..................................................          1.0878          0.8582         26.1319         27.5985         27.0651         26.9506

[[Page 47450]]

 
110051..................................................          1.1325          0.7861         19.4276         20.1756         21.4898         20.4314
110054..................................................          1.3879          0.9812         25.7085         28.9254         29.4691         28.1296
110059..................................................          1.1614          0.7861         20.5565         23.2137         24.7838         22.7781
110064..................................................          1.5600          0.9019         24.2739         24.1219         26.9363         25.1484
110069..................................................          1.3210          0.9567         24.1669         26.2085         29.9098         26.8651
110071..................................................          1.1303          0.7861         18.0224         21.3963         21.2041         20.2222
110073..................................................          1.0732          0.7861         18.6336         18.5753         23.3571         20.1191
110074..................................................          1.5633          0.9996         27.1207         27.9190         31.0062         28.6224
110075..................................................          1.2368          0.8890         22.0935         23.7585         24.8244         23.5723
110076..................................................          1.4789          0.9812         26.3506         28.7871         29.4344         28.2028
110078..................................................          2.0203          0.9812         29.5779         29.9625         30.5196         30.0318
110079..................................................          1.4371          0.9812         23.1024         26.8412         27.3274         25.6718
110080..................................................             ***               *         22.3213         18.4714               *         20.3904
110082..................................................          1.9484          0.9812         29.8366         30.8320         30.1072         30.2642
110083..................................................          1.9004          0.9812         27.8245         30.4287         34.0610         30.7539
110086..................................................          1.2918          0.7861         21.1508         21.6898         22.9959         21.9535
110087..................................................          1.4785          0.9812         28.0471         28.1633         31.0403         29.1240
110089..................................................          1.1256          0.7861         21.9509         23.9026         24.3327         23.4318
110091..................................................          1.2985          0.9812         26.5523         29.5337         27.0994         27.7306
110092..................................................          1.0708          0.7861         18.5527         20.8911         21.4168         20.2706
110095..................................................          1.4671          0.8666         23.4846         26.3075         28.0526         25.9759
110100..................................................          0.9760          0.8651         16.5600         16.2575         20.8201         17.8670
110101..................................................          1.0211          0.7928         16.4269         19.4257         21.0983         18.9322
110104..................................................          1.0922          0.7861         18.7951         20.3777         21.8966         20.4323
110105..................................................          1.3384          0.7861         21.1077         23.1405         23.4010         22.5530
110107..................................................          1.9638          0.9748         26.2526         28.9352         30.1027         28.5426
110109..................................................          1.0216          0.7861         21.4279         23.0376         21.6023         22.0301
110111..................................................          1.1565          0.9598         29.2189         25.1270         25.7084         26.4563
110112..................................................          0.9102          0.7861         24.2464         22.7672         26.4089         24.5417
110113..................................................          0.9646          0.9598         19.1752         21.3417         22.0793         20.8903
110115..................................................          1.6861          0.9812         32.0198         31.5074         32.7927         32.1145
110121..................................................          1.0425          0.8454         21.6637         26.2336         23.4571         23.8303
110122..................................................          1.5379          0.8454         23.7589         25.1934         25.4439         24.7899
110124..................................................          1.0500          0.7861         22.7058         22.9212         22.9571         22.8637
110125..................................................          1.2981          0.9567         22.4238         23.7834         24.7347         23.6390
110128..................................................          1.2619          0.8890         24.4596         25.7839         25.4190         25.2198
110129..................................................          1.5740          0.9019         23.3631         25.9625         30.0444         26.3986
110130..................................................          0.9401          0.7861         18.7549         19.1284         20.4349         19.4669
110132..................................................          0.9900          0.7861         19.2307         20.2502         21.2642         20.2556
110135..................................................          1.2746          0.7861         20.4412         22.5346         24.0945         22.4857
110136..................................................             ***               *         15.8573         18.8212               *         17.2827
110142..................................................          0.9496          0.8046         18.1980         21.3935         21.6286         20.4908
110143..................................................          1.4032          0.9812         27.7055         28.6583         29.9139         28.7963
110146..................................................          1.0451          0.9089         23.9067         27.0987         29.0193         26.6351
110149..................................................             ***               *         27.1477         28.4040               *         27.8380
110150..................................................          1.3058          0.9812         22.6624         25.3742         26.9884         24.9555
110153..................................................          1.1347          0.9567         24.5368         25.7467         29.3305         26.5481
110161..................................................          1.5077          0.9812         29.3201         30.4885         31.5001         30.4389
110163..................................................          1.4442          0.8666         26.0764         28.2169         27.7679         27.3543
110164..................................................          1.6466          0.9748         27.0600         28.8946         30.0145         28.6658
110165..................................................          1.3804          0.9812         26.8378         27.0977         28.7902         27.5702
110166..................................................             ***               *         26.8070               *               *         26.8070
110168..................................................          1.8202          0.9812         27.0022         28.5700         29.7774         28.4702
110172..................................................          1.3257          0.9812         29.1703         31.1234         31.3999         30.6003
110177..................................................          1.7868          0.9598         26.7504         28.8356         29.7079         28.4491
110179..................................................             ***               *         26.0759               *               *         26.0759
110183..................................................          1.2715          0.9812         29.6132         28.6208         28.3505         28.8254
110184..................................................          1.2398          0.9812         26.5240         28.3545         29.4071         28.1771
110186..................................................          1.3729          0.9019         25.0298         27.4925         28.2880         26.9617
110187..................................................          1.2163          0.9812         24.2933         25.2139         26.9638         25.5788
110189..................................................          1.1273          0.9812         26.7654         26.1418         26.2799         26.3816
110190..................................................          1.0370          0.8102         14.2518         23.3204         24.5224         20.0525
110191..................................................          1.3276          0.9812         26.8277         27.7760         30.9481         28.4955
110192..................................................          1.3990          0.9812         26.7852         28.8267         30.0843         28.6181
110193..................................................             ***               *         27.3341         27.9161               *         27.6234
110194..................................................          0.9359          0.7861         18.4776         19.1920         21.0826         19.6210
110198..................................................          1.3957          0.9812         31.7748         31.0557         32.8171         31.8629

[[Page 47451]]

 
110200..................................................          1.9226          0.9019         22.3249         24.9236         27.2974         24.7904
110201..................................................          1.4598          0.9748         28.2232         31.0841         32.0967         30.4769
110203..................................................          0.9675          0.9812         26.8768         29.7888         32.3441         29.6046
110205..................................................          1.1514          0.8368         19.7408         22.0207         23.9738         21.9564
110209..................................................          0.5324          0.7861         19.0450         21.1534         21.2428         20.5456
110212..................................................          1.2000          0.8204         40.5120               *               *         40.5120
110214..................................................             ***               *               *         37.1450               *         37.1450
110215..................................................          1.2911          0.9812         25.7886         27.5566         29.5238         27.7250
110219..................................................          1.4241          0.9812         27.0362         28.8814         32.2603         29.4317
110220..................................................             ***               *               *         37.5741               *         37.5741
110221..................................................             ***               *               *         28.0500               *         28.0500
110222..................................................             ***               *               *         35.6189               *         35.6189
110223..................................................             ***               *               *               *         25.3071         25.3071
110224..................................................             ***               *               *               *         33.6464         33.6464
110225..................................................          1.1627          0.9812               *               *         29.5373         29.5373
110226..................................................          1.1705          0.9812               *               *               *               *
110228..................................................          0.6858          0.9812               *               *               *               *
120001..................................................          1.7954          1.1305         34.7715         34.1385         39.6348         36.0753
120002..................................................          1.2128          1.0740         29.9913         32.3784         34.1709         32.1936
120004..................................................          1.3302          1.1305         28.6527         30.0668         31.3555         30.0081
120005..................................................          1.3171          1.0740         29.3405         31.1985         33.6942         31.4363
120006..................................................          1.2693          1.1305         31.2285         31.6785         34.2231         32.3972
120007..................................................          1.7199          1.1305         30.4247         30.2473         30.8773         30.5122
120010..................................................          1.8852          1.1305         30.1659         29.5714         30.8526         30.1903
120011..................................................          1.5612          1.1305         34.1643         37.1792         39.1941         36.8951
120014..................................................          1.2810          1.0740         28.6416         30.3463         30.9839         30.0257
120016..................................................             ***               *         19.6039               *               *         19.6039
120019..................................................          1.1328          1.0740         30.3809         30.4257         33.0114         31.2831
120022..................................................          1.9275          1.1305         26.6100         29.9527         32.5326         29.5914
120025..................................................             ***               *         30.2367               *               *         30.2367
120026..................................................          1.4060          1.1305         30.3293         32.4566         34.2244         32.4725
120027..................................................          1.3547          1.1305         28.6717         28.7905         29.5825         29.0488
120028..................................................          1.3018          1.1305         30.3794         32.4847         34.0451         32.3420
120029..................................................             ***               *               *               *         44.6382         44.6382
130002..................................................          1.4431          0.8706         23.6078         24.7871         24.7266         24.4032
130003..................................................          1.3970          0.9614         27.6345         28.6158         28.6136         28.2894
130005..................................................             ***               *         25.7523               *               *         25.7523
130006..................................................          1.7752          0.9496         25.3221         27.2158         28.0048         26.8675
130007..................................................          1.8212          0.9496         24.9562         28.7246         30.4958         27.9567
130013..................................................          1.3847          0.9496         27.9209         30.9609         36.1570         31.7470
130014..................................................          1.2226          0.9496         24.3885         27.2543         27.5936         26.3567
130018..................................................          1.7059          0.9272         26.4125         27.3439         28.4041         27.3783
130021..................................................             ***               *         16.1658               *               *         16.1658
130024..................................................          1.1822          0.8493         23.3347         23.6212         24.8035         23.9293
130025..................................................          1.2426          0.7818         20.1452         21.1998         22.7962         21.4285
130028..................................................          1.4835          0.9186         26.3443         27.2195         28.4934         27.4962
130049..................................................          1.6067          1.0226         26.9749         27.3597         29.0185         27.8229
130062..................................................             ***               *         20.6642         25.6467         29.1925         24.9270
130063..................................................          1.3933          0.9496         22.5904         26.0955         27.7607         25.3662
130065..................................................          1.9742          0.9272               *         21.9792         30.4547         26.6750
130066..................................................          2.0724          0.9674               *               *         28.9883         28.9883
130067..................................................          0.5728          0.9272               *               *         21.3867         21.3867
130068..................................................          2.6786          0.9674               *               *               *               *
140001..................................................          1.1034          0.8714         22.3170         22.3001         22.2003         22.2726
140002..................................................          1.3394          0.8982         24.6954         27.0165         27.4779         26.4101
140007..................................................          1.3523          1.0588         28.3482         30.7378         31.4024         30.1866
140008..................................................          1.4485          1.0588         28.5297         29.1767         31.8008         29.7872
140010..................................................          1.5341          1.0588         35.1024         31.8806         40.1360         35.1264
140B10 \3\..............................................  ..............          1.0471         35.1024         31.8806         40.1360         35.1264
140011..................................................          1.1265          0.8345         22.4091         23.8575         25.8864         24.1284
140012..................................................          1.1597          1.0471         28.6564         29.0336         31.8213         29.7772
140013..................................................          1.4752          0.9385         23.3065         23.9269         25.0951         24.0826
140015..................................................          1.4276          0.8982         23.0600         24.4687         24.6409         24.0661
140016..................................................          1.0141               *         18.1242               *               *         18.1242
140018..................................................          1.4713          1.0588         27.7548         26.3533         30.7398         28.2267
140019..................................................          0.9076          0.8345         18.9228         21.3438         22.3179         20.8686
140024..................................................             ***               *         17.5249               *               *         17.5249

[[Page 47452]]

 
140026..................................................          1.1369          0.8660         23.0470         25.9669         26.0493         25.0156
140029..................................................          1.5629          1.0588         28.6565         30.2688         36.7722         31.7994
140030..................................................          1.5605          1.0588         29.7771         30.2776         31.6822         30.5819
140032..................................................          1.2251          0.8982         24.0573         26.7310         27.5367         26.1095
140033..................................................          0.7592          1.0471         25.6068         27.9993         29.5256         27.5611
140034..................................................          1.1489          0.8982         23.0033         24.0470         24.4653         23.8461
140040..................................................          1.2143          0.9225         22.2969         23.2293         24.5589         23.3454
140043..................................................          1.2831          0.8893         26.7996         27.3469         29.8633         28.0422
140045..................................................             ***               *         20.6548               *               *         20.6548
140046..................................................          1.5047          0.8982         23.2127         24.7334         25.6230         24.5835
140048..................................................          1.2906          1.0588         28.2222         29.3877         30.6686         29.4175
140049..................................................          1.4765          1.0588         27.4009         29.0976         30.8617         29.2268
140051..................................................          1.5046          1.0588         27.7901         30.9696         32.1730         30.2784
140052..................................................          1.2926          0.8982         23.5662         25.9617         26.9907         25.5002
140053..................................................          1.8975          0.8942         24.8455         27.4518         28.4513         26.9029
140054..................................................          1.4482          1.0588         31.8564         33.1406         34.2378         33.0651
140058..................................................          1.2520          0.8982         22.8423         24.6058         25.2568         24.2526
140059..................................................          1.0745          0.8982         22.4652         22.6743         21.6230         22.2390
140061..................................................             ***               *         20.8063               *               *         20.8063
140062..................................................          1.3499          1.0588         34.7704         34.1230         36.8271         35.2283
140063..................................................          1.4161          1.0588         27.8306         28.6559         30.5465         28.9957
140064..................................................          1.1956          0.9225         22.0407         23.8639         25.7551         23.9579
140065..................................................          1.4090          1.0588         29.4678         30.1856         31.5510         30.3798
140066..................................................          1.0931          0.8982         21.9771         22.1524         22.0225         22.0498
140067..................................................          1.8440          0.9385         25.3986         28.3506         29.8982         27.9265
140068..................................................          1.2030          1.0588         27.3956         28.3938         26.7166         27.5195
140075..................................................          1.3290          1.0588         27.9325         26.2626         35.9507         29.4588
140077..................................................          1.0118          0.8982         19.1363         20.3999         21.6468         20.4044
140080..................................................          1.4044          1.0588         23.2575         28.8791         29.9067         27.0464
140082..................................................          1.5865          1.0588         25.6645         28.3429         31.0516         28.3204
140083..................................................          0.9167          1.0588         26.2972         26.8919         27.2189         26.8114
140084..................................................          1.3044          1.0471         29.2515         30.5036         30.7251         30.1522
140088..................................................          1.9227          1.0588         32.4978         30.5450         32.6866         31.9069
140089..................................................          1.2571          0.8345         23.3401         24.1066         24.9120         24.1080
140091..................................................          1.7600          0.9315         26.8518         27.8536         28.2095         27.6630
140093..................................................          1.2233          0.9244         25.3127         28.3298         28.6709         27.3188
140094..................................................          1.0741          1.0588         27.9273         27.3841         28.7647         28.0321
140095..................................................          1.1840          1.0588         27.6799         28.7617         29.7385         28.6923
140100..................................................          1.4114          1.0471         37.0820         41.3374         37.2961         38.7112
140101..................................................          1.2087          1.0588         28.5365         29.4081         28.9723         28.9915
140103..................................................          1.1471          1.0588         23.3258         23.6406         24.0926         23.6947
140105..................................................          2.4503          1.0588         27.4531         29.5274         29.6590         28.8385
140109..................................................          1.2813               *         19.5675               *               *         19.5675
140110..................................................          1.1010          1.0471         27.9844         28.6364         30.3432         29.0082
140113..................................................          1.6263          0.9315         26.7969         29.5452         30.2542         28.8718
140114..................................................          1.4998          1.0588         28.3014         28.2151         29.8316         28.7971
140115..................................................          1.1211          1.0588         25.1498         26.0383         25.4576         25.5430
140116..................................................          1.2804          1.0588         31.9902         34.5537         34.3876         33.6671
140117..................................................          1.5489          1.0588         26.8802         27.7201         30.9679         28.4756
140118..................................................          1.5337          1.0588         29.7570         32.5518         33.1987         31.8004
140119..................................................          1.8437          1.0588         36.1419         34.2118         32.2185         34.0199
140120..................................................          1.2654          0.9385         22.7375         23.9724         25.9275         24.2583
140122..................................................          1.4644          1.0588         28.4188         30.5653         30.2888         29.7419
140124..................................................          1.2540          1.0588         36.1327         35.7563         38.2191         36.7032
140125..................................................          1.1728          0.8982         20.4014         22.7571         26.5801         23.2037
140127..................................................          1.5916          0.9483         24.1658         25.6668         27.8363         25.8841
140130..................................................          1.2387          1.0471         29.5247         32.6209         32.5425         31.6158
140133..................................................          1.2958          1.0588         28.0339         31.0269         30.3259         29.7606
140135..................................................          1.4316          0.8345         22.3264         23.3196         24.6645         23.4680
140137..................................................          1.0331          0.8982         21.4699         23.4174         31.4349         24.5880
140141..................................................             ***               *         21.7872               *               *         21.7872
140143..................................................          1.1598          1.0471         26.2954         27.4499         26.1126         26.6046
140145..................................................          1.0894          0.8982         23.4608         26.0875         25.2040         24.9380
140147..................................................          1.1114          0.8345         19.8541         21.0686         21.1817         20.6906
140148..................................................          1.7334          0.8942         24.7031         25.5677         27.0038         25.7606
140150..................................................          1.7108          1.0588         35.2711         52.0970         35.5951         40.9580
140151..................................................          0.8038          1.0588         23.4879         27.0312         26.0825         25.5372

[[Page 47453]]

 
140152..................................................          1.1775          1.0588         27.6086         30.2209         29.8647         29.2051
140155..................................................          1.3616          1.0471         28.9724         29.5734         32.7960         30.4671
140158..................................................          1.3843          1.0588         27.0986         27.3721         30.4445         28.3050
140160..................................................          1.2234          0.9703         24.5373         25.8684         27.6905         26.0399
140161..................................................          1.0989          1.0471         23.1647         25.2898         28.8266         25.7893
140162..................................................          1.5902          0.9483         27.4471         29.4121         32.1810         29.6162
140164..................................................          1.8223          0.8982         23.7457         24.6009         25.9726         24.8076
140165..................................................             ***               *         16.6304               *               *         16.6304
140166..................................................          1.1619          0.8345         23.1005         26.4800         26.2875         25.2809
140167..................................................          1.1608          0.8345         22.8911         22.8703         24.9904         23.5836
140172..................................................          1.3652          1.0588         29.8568         32.1220         33.0926         31.7168
140174..................................................          1.5704          1.0588         27.8131         30.5905         31.2231         29.9167
140176..................................................          1.2291          1.0588         31.3490         32.9794         32.6145         32.3408
140177..................................................          0.9037          1.0588         22.5610         26.4340         25.5725         24.9321
140179..................................................          1.2694          1.0588         27.6376         29.3657         30.2944         29.1090
140180..................................................          1.1722          1.0588         28.3629         27.8887         29.1352         28.4623
140181..................................................          1.1314          1.0588         25.0101         25.0226         27.6835         25.9072
140182..................................................          1.5031          1.0588         28.2211         30.1755         32.8972         30.2922
140184..................................................          1.2951          0.8345         21.1802         25.2327         26.6104         24.4280
140185..................................................          1.4648          0.8982         23.8531         25.2423         26.5398         25.2116
140186..................................................          1.5398          1.0471         30.6951         29.8022         30.7212         30.4067
140187..................................................          1.5456          0.8982         23.2892         24.8332         25.5873         24.5668
140189..................................................          1.1669          0.8345         23.7198         22.5965         24.7013         23.6837
140190..................................................             ***               *         19.8296               *               *         19.8296
140191..................................................          1.3318          1.0588         25.8678         28.5836         31.9943         28.7069
140197..................................................          1.2406          1.0588         23.0684         24.0463         24.9103         23.9565
140199..................................................          1.0545               *         22.0315               *               *         22.0315
140200..................................................          1.4401          1.0588         26.3379         28.8435         30.6641         28.5880
140202..................................................          1.5516          1.0471         29.7870         32.7915         32.9433         31.9581
140206..................................................          1.2638          1.0588         30.6561         29.7953         29.6275         30.0202
140207..................................................          1.2121          1.0588         24.1048         26.0535         28.2262         26.0084
140208..................................................          1.6599          1.0588         29.4708         29.5380         31.4035         30.1416
140209..................................................          1.5570          0.9385         24.5376         26.3230         29.7965         26.7808
140210..................................................          1.0667          0.8345         19.2640         20.6954         19.2053         19.6895
140211..................................................          1.3090          1.0588         29.7054         30.3286         31.4539         30.5683
140213..................................................          1.2470          1.0588         30.2945         31.6926         32.1031         31.3688
140217..................................................          1.5498          1.0588         31.5324         32.1277         32.9404         32.2271
140223..................................................          1.4787          1.0588         30.4923         31.7267         33.5083         31.9322
140224..................................................          1.3760          1.0588         28.2177         29.6181         31.2237         29.6765
140228..................................................          1.5681          0.9804         25.6419         27.9456         28.2855         27.2863
140231..................................................          1.4308          1.0588         30.6410         30.0236         34.8291         31.8587
140233..................................................          1.6653          1.0471         28.6305         29.7093         31.5168         29.9830
140234..................................................          1.0454          0.8660         23.6928         24.5476         25.7353         24.6552
140239..................................................          1.5950          0.9804         29.0092         31.1879         31.0918         30.4218
140240..................................................          1.4146          1.0588         28.7310         31.5637         32.7986         30.9712
140242..................................................          1.5032          1.0588         32.0522         34.6120         35.2351         33.9225
140250..................................................          1.2378          1.0588         28.5971         29.6305         31.2533         29.8441
140251..................................................          1.3940          1.0588         27.1687         28.0622         28.3598         27.8740
140252..................................................          1.4020          1.0588         33.3351         34.4268         35.8762         34.5480
140258..................................................          1.5174          1.0588         30.2639         34.2333         33.0093         32.5353
140275..................................................          1.3123          0.8893         26.1473         27.8186         28.5064         27.4339
140276..................................................          1.8647          1.0588         29.8325         31.6359         32.1048         31.2217
140280..................................................          1.4651          0.8893         23.4447         24.9401         26.6536         24.9140
140281..................................................          1.7584          1.0588         30.4838         33.3903         35.6589         33.1771
140285..................................................             ***               *         20.7576               *               *         20.7576
140286..................................................          1.1539          1.0588         29.1543         30.3237         32.0048         30.4851
140288..................................................          1.5228          1.0588         29.3988         31.5197         31.5944         30.8910
140289..................................................          1.3067          0.8982         22.6211         23.8452         25.6847         24.0649
140290..................................................          1.3576          1.0588         31.7341         31.8135         32.5247         32.0531
140291..................................................          1.6115          1.0471         29.8958         31.9052         33.8706         31.9796
140292..................................................          1.1022          1.0588         27.6285         28.5094         30.6917         28.8381
140294..................................................          1.1266          0.8345         23.4503         24.0750         26.1595         24.6196
140300..................................................          1.1884          1.0588         34.8568         35.1494         42.5240         37.4107
140301..................................................          1.1568          1.0588         31.7073         49.9507         39.4295         38.1755
140303..................................................          2.2073          1.0588               *         29.6470               *         29.6470
150001..................................................          1.1331          0.9717         29.6844         28.9075         31.8089         30.1191
150002..................................................          1.4417          1.0471         25.0063         26.6222         27.6481         26.6696

[[Page 47454]]

 
150003..................................................          1.7490          0.8676         25.3458         26.7585         26.9771         26.3734
150004..................................................          1.4753          1.0471         26.8458         28.7336         30.9626         28.8237
150005..................................................          1.2795          0.9717         27.2369         29.5371         30.5367         29.1856
150006..................................................          1.3979          0.9503         26.4062         25.6265         27.1364         26.4180
150007..................................................          1.3720          0.9463         26.6073         29.4971         30.0500         28.8176
150008..................................................          1.3865          1.0471         26.6928         27.5703         27.0525         27.1187
150009..................................................          1.4332          0.9029         22.2147         25.4496         25.7616         24.5212
150010..................................................          1.4963          0.9463         26.8523         27.2272         28.4118         27.4601
150011..................................................          1.2451          0.9589         24.3490         25.3178         26.7686         25.4614
150012..................................................          1.5620          0.9643         27.3029         30.0348         31.2282         29.5432
150013..................................................             ***               *         21.8465               *               *         21.8465
150015..................................................          1.3250          0.8899         26.2434         28.0931         27.3811         27.2243
150017..................................................          1.8561          0.9041         25.2342         26.3973         26.3379         26.0051
150018..................................................          1.7221          0.9540         26.3289         27.3689         29.1137         27.6515
150021..................................................          1.8096          0.9041         29.6967         28.9196         30.0030         29.5366
150022..................................................          1.0788          0.8726         22.6773         23.1041         23.8971         23.1999
150023..................................................          1.5637          0.9589         23.7159         26.9095         27.7520         25.8891
150024..................................................          1.4818          0.9717         27.1589         28.1655         28.4170         27.8897
150026..................................................          1.3161          0.9540         28.1127         28.6517         30.4967         29.1723
150027..................................................          1.0482               *         17.4862               *               *         17.4862
150029..................................................          1.4657          0.9643         26.9680         28.7187         29.9307         28.4271
150030..................................................          1.1967          0.9589         26.9534         29.1493         29.3588         28.5143
150033..................................................          1.5576          0.9717         27.9995         28.6838         29.7744         28.8059
150034..................................................          1.4561          1.0471         26.0465         28.6429         28.0434         27.6127
150035..................................................          1.5977          0.9241         26.6620         26.9700         27.8904         27.1979
150037..................................................          1.3217          0.9717         28.5451         31.0935         29.0161         29.5237
150038..................................................          1.1328          0.9717         28.8054         29.3156         33.0112         30.3936
150042..................................................          1.3921          0.8823         23.0102         22.8786         25.1403         23.6714
150044..................................................          1.3927          0.9029         23.7066         25.2137         25.2685         24.7693
150045..................................................          1.0745          0.9041         25.2225         26.9818         27.5340         26.5867
150046..................................................          1.4882          0.8823         21.9369         24.5593         26.5876         24.4158
150047..................................................          1.7159          0.9041         25.8348         25.5194         25.8497         25.7351
150048..................................................          1.3899          0.9661         27.1817         27.1233         28.1525         27.5023
150049..................................................          1.3604               *         22.3370               *               *         22.3370
150051..................................................          1.6346          0.9589         23.7061         26.5655         28.9157         26.4848
150052..................................................          1.0751               *         20.6339               *               *         20.6339
150056..................................................          1.9446          0.9717         28.2842         28.8727         29.3500         28.8453
150057..................................................          2.0988          0.9717         24.8605         28.9529         30.3287         27.8807
150058..................................................          1.5711          0.9643         27.5341         29.1444         29.1255         28.6425
150059..................................................          1.5551          0.9717         28.5715         31.4987         31.3362         30.4971
150060..................................................             ***               *         24.8544               *               *         24.8544
150061..................................................          1.1275          0.8568         22.2822         21.3711         22.6746         22.1018
150062..................................................          1.1339               *         24.6088               *               *         24.6088
150064..................................................          1.2000          0.8568         23.7707         25.4987         28.7978         26.0980
150065..................................................          1.2625          0.9589         25.9461         27.9283         30.2053         27.9985
150069..................................................          1.1757          0.9661         25.2656         26.2028         26.0909         25.8564
150072..................................................          1.1657          0.8673         20.5111         21.2120         21.7644         21.1633
150074..................................................          1.4427          0.9717         25.2586         25.9321         28.5655         26.5901
150075..................................................          1.0975          0.9041         24.0745         25.1568         25.7245         24.9787
150076..................................................          1.2881          0.9503         28.1874         29.3249         30.1120         29.2167
150079..................................................          1.1099               *         21.4067               *               *         21.4067
150082..................................................          1.6825          0.8568         25.5860         28.3494         26.4544         26.8048
150084..................................................          1.8395          0.9717         29.3905         31.1720         33.1784         31.1870
150086..................................................          1.1722          0.9661         23.9404         25.1992         26.6745         25.3042
150088..................................................          1.2748          0.9589         23.6253         27.2103         29.1509         26.6306
150089..................................................          1.6023          0.8568         25.0449         24.7233         24.8045         24.8596
150090..................................................          1.6407          1.0471         26.2899         30.4835         30.6412         29.1401
150091..................................................          1.1638          0.9041         30.6209         30.4234         32.1627         31.1005
150097..................................................          1.1290          0.9717         25.0367         27.7468         29.1359         27.3220
150100..................................................          1.6877          0.8568         24.3530         25.7997         26.9724         25.6239
150101..................................................          1.0665          0.9041         29.1657         29.0301         30.5475         29.5654
150102..................................................          1.0330          0.9241         24.5923         25.7424         25.8742         25.4603
150104..................................................          1.0856          0.9717         25.5872         28.2552         28.7788         27.5177
150106..................................................          1.0158               *         20.9387               *               *         20.9387
150109..................................................          1.4641          0.8676         23.5865         25.3367         26.8464         25.2376
150112..................................................          1.4978          0.9589         26.5643         28.0068         29.8540         28.1787
150113..................................................          1.2888          0.9589         24.8760         24.7960         25.9814         25.2159

[[Page 47455]]

 
150115..................................................          1.4230          0.8568         19.3411         22.0747         22.5793         21.2670
150122..................................................          1.3185               *         26.0173               *               *         26.0173
150124..................................................             ***               *         21.3933               *               *         21.3933
150125..................................................          1.5103          1.0471         26.7666         27.6535         29.3596         27.9342
150126..................................................          1.4164          1.0471         26.9887         28.9454         29.4300         28.4467
150128..................................................          1.4409          0.9717         26.4976         28.7810         29.5008         28.2807
150129..................................................          1.1548          0.9717         29.9099         29.7398         31.4317         30.3985
150130..................................................          1.6136               *         21.7400               *               *         21.7400
150132..................................................             ***               *         25.6257         27.6560               *         26.6249
150133..................................................          1.2457          0.9041         22.7292         25.1322         24.2538         24.0313
150134..................................................          1.0198          0.9029         23.8525         26.3249         21.6740         23.7590
150136..................................................             ***               *         26.2704               *               *         26.2704
150146..................................................          1.1370          0.9041         29.3383         29.5256         30.3343         29.7676
150147..................................................          1.5120          1.0471         22.8456         27.2339         26.1646         25.6998
150149..................................................          1.0014          0.8568         23.6360         23.7026         24.9629         24.1402
150150..................................................          1.3167          0.9041         25.5331         27.0542         26.7700         26.4920
150151..................................................             ***               *         38.1445               *               *         38.1445
150152..................................................             ***               *         44.7145               *               *         44.7145
150153..................................................          2.4172          0.9717               *         32.1022         35.0617         33.7428
150154..................................................          2.5712          0.9717               *         29.8514         29.8894         29.8711
150155..................................................             ***               *               *         45.0121               *         45.0121
150156..................................................             ***               *               *         25.9681               *         25.9681
150157..................................................          1.6761          0.9717               *               *         32.3106         32.3106
150158..................................................          1.2402          0.9717               *               *               *               *
150160..................................................          2.0073          0.9717               *               *               *               *
150161..................................................          1.4755          0.9717               *               *               *               *
150162..................................................          1.7836          0.9717               *               *               *               *
150163..................................................          1.1054          0.9029               *               *               *               *
160001..................................................          1.2039          0.9222         25.1220         24.5108         25.7255         25.1337
160005..................................................          1.2097          0.8476         21.8949         23.1034         24.7755         23.2878
160008..................................................          1.0516          0.8476         20.7200         22.1402         22.4758         21.7846
160013..................................................          1.2974          0.8655         23.7163         24.0956         24.4099         24.0734
160014..................................................             ***               *         20.5882               *               *         20.5882
160016..................................................          1.5636          0.9222         23.3619         24.5338         27.1460         24.9575
160020..................................................          1.1531               *         19.5554               *               *         19.5554
160024..................................................          1.5654          0.9157         26.2392         27.4158         29.3756         27.6168
160026..................................................             ***               *         24.7424               *               *         24.7424
160028..................................................          1.3092          0.9473         26.2948         27.8535         30.0576         28.1943
160029..................................................          1.6382          0.9423         27.9277         28.7324         30.6687         29.0931
160030..................................................          1.3868          1.0016         26.7068         28.7786         30.9415         28.8521
160031..................................................          0.7988               *         19.7368               *               *         19.7368
160032..................................................          1.0669          0.8711         23.4727         25.4662         26.2935         25.1093
160033..................................................          1.7485          0.8893         24.6768         26.5315         27.2060         26.1337
160034..................................................          1.0217               *         19.3503               *               *         19.3503
160039..................................................          0.9129               *         22.1180               *               *         22.1180
160040..................................................          1.2906          0.8719         23.9053         25.9032         26.8110         25.5671
160045..................................................          1.6881          0.8684         25.4153         26.6463         27.5289         26.5339
160047..................................................          1.3936          0.9473         25.2072         26.0227         28.1280         26.4469
160048..................................................             ***               *         19.5831               *               *         19.5831
160050..................................................          1.0566               *         24.5402               *               *         24.5402
160057..................................................          1.2590          0.9137         23.0937         25.1272         25.6274         24.6663
160058..................................................          1.9710          0.9423         27.1646         28.4167         28.9924         28.2025
160064..................................................          1.6011          0.9113         28.6139         28.7668         28.4209         28.5968
160066..................................................          0.9354               *         22.7709               *               *         22.7709
160067..................................................          1.3637          0.8719         23.4060         24.8137         26.0243         24.7721
160069..................................................          1.5286          0.8875         25.3402         27.4473         27.6157         26.8150
160079..................................................          1.4774          0.8684         23.7234         24.7372         26.1618         24.8787
160080..................................................          1.2832          0.8893         23.1837         25.8252         27.2370         25.4033
160081..................................................             ***               *         23.1930               *               *         23.1930
160082..................................................          1.7698          0.9157         26.4398         27.4718         28.7831         27.5581
160083..................................................          1.6593          0.9157         28.2193         27.3004         28.3921         27.9725
160089..................................................          1.2887          0.9137         22.6551         23.2149         23.2888         23.0562
160091..................................................             ***               *         17.9862               *               *         17.9862
160101..................................................          1.0750          0.9157         25.1000         25.0503         25.4740         25.2122
160104..................................................          1.6546          0.8893         24.9134         28.1891         29.8126         27.8799
160110..................................................          1.5341          0.8719         24.9434         26.6633         28.8134         26.8749
160112..................................................          1.2895          0.8476         23.0672         24.7957         25.2886         24.4326

[[Page 47456]]

 
160117..................................................          1.3823          0.8875         25.0278         25.4659         27.3927         25.9740
160118..................................................             ***               *         19.7764               *               *         19.7764
160122..................................................          1.0947          0.8476         22.5872         23.9177         24.4996         23.6844
160124..................................................          1.1525          0.8476         23.1690         22.5482         24.3063         23.3383
160126..................................................          1.0265               *         19.8323               *               *         19.8323
160146..................................................          1.3905          0.9083         22.9897         22.6949         24.8485         23.4694
160147..................................................          1.2941          0.9222         26.6438         28.6303         29.8992         28.4676
160153..................................................          1.7364          0.9083         28.9881         29.9378         30.6173         29.8520
160154..................................................          1.1302               *               *               *               *               *
160155..................................................          1.7147          0.8893               *               *               *               *
170001..................................................          1.1457          0.7979         21.9131         23.1260         23.8863         22.9705
170006..................................................          1.3231          0.8966         21.9019         24.2068         27.1033         24.4549
170009..................................................          1.0518          0.9318         29.2588         30.9025         29.6386         29.9250
170010..................................................          1.2444          0.7979         24.0008         23.9707         25.5573         24.5518
170012..................................................          1.6127          0.8717         24.7392         26.1367         27.1195         25.9606
170013..................................................          1.6234          0.8717         25.0419         25.2476         26.7124         25.6577
170014..................................................          1.0200          0.9318         23.5960         23.8135         24.2322         23.8856
170015..................................................             ***               *         20.2368               *               *         20.2368
170016..................................................          1.6402          0.8556         25.9482         25.8061         26.7536         26.1671
170017..................................................          1.0743          0.8938         24.7771         26.9657         27.2925         26.3737
170019..................................................          1.1990               *         22.0251               *               *         22.0251
170020..................................................          1.5974          0.8717         23.1800         23.2757         24.1149         23.5243
170022..................................................          1.1485               *         22.2878               *               *         22.2878
170023..................................................          1.4198          0.8717         23.9808         24.0561         23.9812         24.0054
170027..................................................          1.3961          0.7979         22.5103         23.1766         23.4037         23.0169
170033..................................................          1.3489          0.8717         20.7864         21.9709         24.1882         22.2852
170039..................................................          0.9451          0.8938         21.5203         26.9852         26.0952         24.6299
170040..................................................          1.9800          0.9318         28.2856         28.4458         30.2468         29.0256
170049..................................................          1.5227          0.9318         24.7895         25.2070         26.4086         25.4876
170052..................................................             ***               *         18.5291               *               *         18.5291
170058..................................................          1.0973          0.9318         23.3398         22.9210         26.5949         24.2599
170068..................................................          1.2243          0.9151         22.6087         23.0635         23.8812         23.1883
170070..................................................             ***               *         16.0162               *               *         16.0162
170074..................................................          1.2229          0.7979         21.0565         23.7829         23.0567         22.6765
170075..................................................          0.8299          0.7979         16.5444         19.7760         19.9351         18.7474
170085..................................................          0.6104               *               *               *               *               *
170086..................................................          1.5806          0.8556         24.0812         26.1362         26.3615         25.5525
170093..................................................             ***               *         16.5553               *               *         16.5553
170094..................................................          0.9369          0.7979         21.3887         21.5295         16.5136         19.6903
170098..................................................             ***               *         20.1242               *               *         20.1242
170103..................................................          1.2869          0.8938         22.8707         23.8042         24.2003         23.6452
170104..................................................          1.4622          0.9318         26.9671         26.2990         27.6211         26.9584
170105..................................................          1.0944          0.7979         21.4422         21.9606         22.7412         22.0343
170109..................................................          1.0365          0.9318         23.2626         23.1088         23.8515         23.4041
170110..................................................          0.8838          0.7979         22.9195         23.3260         23.9572         23.4236
170114..................................................          0.9064               *         18.9158               *               *         18.9158
170120..................................................          1.3860          0.8966         21.0499         22.0253         22.2805         21.7560
170122..................................................          1.6825          0.8938         25.3982         26.6605         28.7175         26.8262
170123..................................................          1.6951          0.8938         27.2239         27.6653         27.0843         27.3131
170133..................................................          1.0455          0.9318         22.9309         23.1226         25.2301         23.8079
170137..................................................          1.2778          0.7979         23.8862         24.7096         25.3395         24.6697
170142..................................................          1.4000          0.8452         22.5778         23.9527         24.6019         23.7457
170143..................................................             ***               *         20.4459               *               *         20.4459
170144..................................................             ***               *         24.6259               *               *         24.6259
170145..................................................          1.0844          0.7979         21.5756         23.2162         23.3967         22.7065
170146..................................................          1.5046          0.9318         29.1358         29.8858         29.0720         29.3567
170147..................................................             ***               *         21.4753         22.4973         24.3268         22.5630
170150..................................................          1.1567          0.8145         18.5744         20.9448         19.6160         19.7250
170166..................................................          0.9972          0.7979         19.2842         21.0762         22.6968         21.0440
170175..................................................          1.4183          0.8717         23.9304         25.6281         26.7229         25.4235
170176..................................................          1.5941          0.9318         26.2366         27.2332         29.0735         27.5811
170180..................................................             ***               *         25.1368         32.5010               *         27.5335
170182..................................................          1.4404          0.9318         25.7443         27.3503         28.9710         27.3812
170183..................................................          1.9426          0.8938         24.5539         25.8340         26.1890         25.5209
170185..................................................          1.2377          0.9318         26.7797         27.8139         28.1780         27.6778
170186..................................................          2.6627          0.8938         31.7896         32.8392         30.2613         31.6196
170187..................................................          1.4872          0.7979         23.3702         22.8493         24.1461         23.4565

[[Page 47457]]

 
170188..................................................          1.9667          0.9318         29.9751         30.6844         32.2573         31.0137
170190..................................................          1.0160          0.8452         22.8729         22.9540         26.2625         24.0473
170191..................................................          1.7207          0.7979         21.3069         22.1197         24.3813         22.6600
170192..................................................          1.9119          0.8938         27.9704         26.2724         27.7421         27.3099
170193..................................................          1.4210          0.8717         24.7429         20.6821         24.8531         23.2189
170194..................................................          1.0835          0.9318         27.9903         29.9014         27.6989         28.5239
170195..................................................          2.2763          0.9318               *         30.1001         29.5947         29.8108
170196..................................................          2.3666          0.8938               *               *         32.1832         32.1832
180001..................................................          1.2557          0.9661         25.4217         27.6917         29.7423         27.6443
180002..................................................          1.0602          0.8073         22.9727         25.7862         26.5488         25.1142
180004..................................................          1.0972          0.7810         19.5437         22.0797         20.8805         20.8284
180005..................................................          1.1194          0.8724         24.5561         24.9779         25.6159         25.0807
180006..................................................             ***               *         14.8011               *               *         14.8011
180007..................................................          1.5249          0.9002         22.7606         25.7042         27.1924         25.2359
180009..................................................          1.7050          0.8878         25.3837         26.4101         27.3228         26.4316
180010..................................................          1.8883          0.9002         24.7256         25.6153         27.7600         26.0458
180011..................................................          1.5427          0.8797         22.7364         25.5463         24.9909         24.4168
180012..................................................          1.4909          0.9029         24.6642         25.6000         26.7279         25.6690
180013..................................................          1.5074          0.9364         22.9512         23.7075         24.8125         23.8157
180016..................................................          1.3302          0.9029         23.1832         24.8408         24.7091         24.2487
180017..................................................          1.3231          0.7978         20.8630         21.8885         21.9715         21.5934
180018..................................................          1.3148          0.7810         19.0992         20.9857         23.3035         21.1384
180019..................................................          1.0932          0.9661         24.1342         24.0283         24.6279         24.2639
180020..................................................          1.0481          0.7810         21.9494         24.6953         25.9975         24.2711
180021..................................................          0.9698          0.7810         18.5966         20.7950         22.0740         20.5368
180024..................................................          1.1161          0.9029         32.1824         31.1159         26.3532         29.7120
180025..................................................          1.1421          0.9029         19.1543         22.6897         28.5935         23.5037
180026..................................................          1.0693               *         18.2120               *               *         18.2120
180027..................................................          1.2468          0.8095         23.8763         20.8303         21.7639         22.0496
180028..................................................          0.9153               *         24.7967               *               *         24.7967
180029..................................................          1.3898          0.8797         23.0536         25.6479         26.1528         24.9999
180035..................................................          1.6203          0.9661         29.8438         31.0794         32.8461         31.2815
180036..................................................          1.2418          0.8878         25.1154         25.2972         25.6959         25.3664
180037..................................................          1.3241          0.9029         25.7361         26.3132         27.8506         26.6118
180038..................................................          1.5448          0.8697         24.6348         26.0440         26.9752         25.9113
180040..................................................          1.9692          0.9029         26.2125         27.9979         28.5162         27.6103
180043..................................................          1.1554          0.7810         19.0617         20.9326         20.6439         20.2180
180044..................................................          1.7146          0.8724         23.0971         24.4569         25.8060         24.4869
180045..................................................          1.3291          0.9661         25.8349         27.4732         29.4127         27.6339
180046..................................................          0.9468          0.9002         27.2244         27.1034         27.0962         27.1405
180047..................................................             ***               *         21.8036               *               *         21.8036
180048..................................................          1.2971          0.9029         21.6571         23.9230         24.3696         23.3120
180049..................................................          1.4467          0.8797         23.3407         22.4769         24.3699         23.3961
180050..................................................          1.1550          0.7810         22.6473         26.3604         25.9557         24.9976
180051..................................................          1.2878          0.8218         21.3312         23.5299         24.3916         23.1293
180053..................................................          0.9914          0.7810         19.1578         21.3044         22.1921         20.9808
180055..................................................          1.1922               *         20.7237               *               *         20.7237
180056..................................................          1.1773          0.8465         22.8910         24.3074         24.5326         23.9077
180063..................................................          1.1034               *         17.9741               *               *         17.9741
180064..................................................          1.1693          0.8124         16.2638         17.1009         20.1799         17.8239
180066..................................................          1.0839          0.9364         24.9543         22.2713         23.7860         23.6485
180067..................................................          2.0260          0.9002         25.4080         26.0238         27.9852         26.5262
180069..................................................          1.0876          0.8724         22.3673         26.3701         26.6714         25.1966
180070..................................................          1.1689          0.8049         20.1308         20.6741         20.2189         20.3433
180078..................................................          1.1526          0.8724         26.2636         27.6806         28.2762         27.4283
180079..................................................          1.1914          0.8069         19.7791         20.2100         23.6005         21.2540
180080..................................................          1.2789          0.8012         21.7380         21.5818         23.7788         22.3758
180087..................................................          1.2564          0.7810         18.4331         20.8841         22.0302         20.4642
180088..................................................          1.6692          0.9029         27.5767         28.0916         28.6107         28.1051
180092..................................................          1.1840          0.9002         22.5679         23.7909         23.7866         23.3989
180093..................................................          1.6493          0.8123         20.5422         20.5807         21.4392         20.8528
180095..................................................          1.0472          0.7810         17.9677         17.9146         21.5639         18.9610
180101..................................................          1.1640          0.9002         25.4796         27.4506         28.1621         27.0742
180102..................................................          1.5933          0.8095         18.4388         21.0896         25.2343         21.3176
180103..................................................          2.1748          0.9002         26.9407         28.4583         28.1734         27.8598
180104..................................................          1.5693          0.8095         24.9441         25.6157         25.9689         25.5126
180105..................................................          0.8863          0.7810         19.7615         21.6002         23.1917         21.5276

[[Page 47458]]

 
180106..................................................          0.8981          0.7810         17.8020         20.2884         20.7220         19.6713
180115..................................................          0.9198          0.7810         20.9831         20.5539         20.3089         20.6170
180116..................................................          1.2129          0.8345         22.7353         23.5354         25.8927         24.0625
180117..................................................          0.9573          0.7810         21.1854         22.8469         24.7378         22.8812
180124..................................................          1.3102          0.9364         23.1917         24.8292         25.4664         24.5483
180127..................................................          1.3502          0.9029         23.4765         24.6774         26.3947         24.8368
180128..................................................          0.9285          0.7810         20.8406         22.6056         23.8144         22.4361
180130..................................................          1.6785          0.9029         26.0278         27.8900         29.1712         27.7427
180132..................................................          1.4705          0.8797         23.7652         24.5105         25.3789         24.5776
180134..................................................          0.9988               *         18.6779               *               *         18.6779
180138..................................................          1.2338          0.9029         27.3400         28.1901         28.6871         28.0932
180139..................................................          0.9711          0.7810         23.5363         23.3569         24.7575         23.8896
180141..................................................          1.8039          0.9029         25.3042         25.3357         27.5912         26.1155
180143..................................................          1.6427          0.9002         25.1613         28.1924         30.8734         28.2381
180144..................................................             ***               *               *         29.5052               *         29.5052
180147..................................................             ***               *               *               *         31.1615         31.1615
180148..................................................             ***               *               *               *         30.1250         30.1250
180149..................................................          0.9785          0.7810               *               *               *               *
190001..................................................          1.1366          0.7586         19.7516         22.1394         22.1569         21.3062
190002..................................................          1.6414          0.8322         22.0056         23.3368         24.6984         23.3292
190003..................................................          1.4785          0.8322         23.4977         25.8294         26.7844         25.3504
190004..................................................          1.5564          0.7975         23.3290         25.3473         25.0803         24.6173
190005..................................................          4.8105          0.8711         22.3208         22.6029         24.2899         23.0169
190006..................................................          1.4684          0.8322         22.2467         22.7979         24.8836         23.2631
190007..................................................          1.1753          0.7586         19.7528         21.8205         23.1426         21.5670
190008..................................................          1.7624          0.7975         24.0111         24.6074         26.3638         24.9678
190009..................................................          1.2890          0.7977         19.8404         21.1005         24.0696         21.5285
190010..................................................             ***               *         21.6889               *               *         21.6889
190011..................................................          0.9912          0.7869         19.7319         21.4052         21.6991         20.9430
190013..................................................          1.4546          0.7783         20.8626         21.4573         23.7333         22.0204
190014..................................................          1.1832          0.7586         22.4596         22.7151         22.6405         22.6128
190015..................................................          1.3272          0.8711         22.8875         23.7789         25.1767         23.9766
190017..................................................          1.3890          0.7773         21.5033         24.5390         24.7537         23.6080
190019..................................................          1.7987          0.7977         23.7168         24.0468         25.4624         24.4141
190020..................................................          1.2331          0.8009         21.6136         22.1967         23.4602         22.4018
190025..................................................          1.3046          0.7586         20.8950         23.5007         24.5024         22.9204
190026..................................................          1.6225          0.7977         22.5087         23.7702         24.1556         23.4858
190027..................................................          1.6702          0.7783         21.2526         24.3006         26.7132         24.0310
190034..................................................          1.2388          0.7775         19.6943         20.7334         21.2130         20.5411
190036..................................................          1.6983          0.8711         24.8152         25.4164         25.6551         25.3044
190037..................................................          0.6483          0.7783         18.6393         19.4071         20.7271         19.5622
190039..................................................          1.6426          0.8711         25.6665         24.4386         25.4003         25.1722
190040..................................................          1.3451          0.8711         26.7428         28.6297         28.0169         27.7947
190041..................................................          1.4801          0.8551         24.6734         28.5376         28.0050         27.0392
190043..................................................             ***               *         17.3477               *               *         17.3477
190044..................................................          1.3206          0.7846         19.5567         20.9993         21.2604         20.6016
190045..................................................          1.6104          0.8711         25.3854         25.8238         27.1996         26.1757
190046..................................................          1.4983          0.8711         24.2128         23.8552         24.7370         24.2698
190048..................................................          1.0173               *         19.6288               *               *         19.6288
190050..................................................          1.0996          0.7630         19.1076         21.0259         20.9142         20.3649
190053..................................................          1.1445          0.7686         16.4968         17.9788         18.5819         17.7257
190054..................................................          1.3646          0.7671         20.1108         23.1471         22.7011         22.0095
190060..................................................          1.4954          0.7783         23.6278         23.7393         22.6291         23.3259
190064..................................................          1.6406          0.8009         23.3617         23.1358         23.7298         23.4086
190065..................................................          1.6036          0.8009         23.7450         22.1880         23.1202         23.0047
190077..................................................          0.9332               *         18.8409               *               *         18.8409
190078..................................................          1.0556          0.7773         21.3786         22.2431         22.2346         21.9592
190079..................................................          1.2228          0.8711         21.2546         24.0985         23.8192         23.0910
190081..................................................          0.8766          0.7586         15.6146         20.0121         21.4510         18.9734
190086..................................................          1.2998          0.7764         19.8823         22.0610         22.2895         21.4355
190088..................................................          1.0983          0.8551         22.3480         23.8562         23.1638         23.1096
190090..................................................          1.0644          0.7586         20.2045         23.1241         24.3303         22.5642
190095..................................................             ***               *         18.0174               *               *         18.0174
190098..................................................          1.7671          0.8551         24.6353         25.6854         25.7449         25.3598
190099..................................................          1.0514          0.8009         20.4597         22.0610         23.2343         21.9199
190102..................................................          1.5319          0.8322         25.2267         27.3126         26.9700         26.4749
190106..................................................          1.1179          0.7977         21.7228         23.5376         26.6227         23.8316

[[Page 47459]]

 
190109..................................................          1.2697               *         18.6524               *               *         18.6524
190111..................................................          1.6595          0.8551         24.4998         25.5729         26.5722         25.5481
190114..................................................          1.0528          0.7586         15.8031         17.2678         19.1586         17.4128
190115..................................................          1.2579          0.8551         26.6295         28.2066         26.0797         26.9667
190116..................................................          1.1795          0.7671         20.3845         22.3710         23.4013         22.0638
190118..................................................          0.9119          0.8551         19.7024         22.8809         21.2580         21.3081
190122..................................................          1.3165          0.8009         23.7082         22.0072         22.2371         22.6302
190124..................................................             ***               *         24.6675         26.0032         27.9484         26.2122
190125..................................................          1.5999          0.7869         23.9649         25.5463         24.8256         24.7616
190128..................................................          1.1274          0.8009         27.9136         28.3257         29.6682         28.6616
190131..................................................          1.2853          0.8009         25.1917         27.8465         28.6795         27.2765
190133..................................................          0.8990          0.7687         13.6266         18.2045         22.4311         19.4522
190135..................................................             ***               *         26.8238         27.7540         30.5646         28.1639
190140..................................................          0.9706          0.7621         17.6936         18.9652         23.0485         19.9125
190144..................................................          1.1642          0.8551         21.7547         22.9181         23.7875         22.8280
190145..................................................          0.9239          0.7676         18.9678         19.9265         20.8579         19.9365
190146..................................................          1.5689          0.8711         26.1792         27.4824         28.7200         27.4158
190149..................................................          1.0427               *         18.8819               *               *         18.8819
190151..................................................          0.9473          0.7586         18.6293         18.7467         18.8391         18.7428
190152..................................................          1.5619          0.8711         27.6099         28.1334         30.8512         28.8848
190158..................................................             ***               *         26.3042         26.4787         30.6450         27.6757
190160..................................................          1.6083          0.7869         21.6740         22.9325         24.7822         22.9872
190161..................................................          1.2550          0.7783         19.1022         22.6187         22.9035         21.4144
190162..................................................             ***               *         25.0328         25.2953               *         25.1543
190164..................................................          1.1717          0.8198         22.8599         25.2560         26.6207         24.9939
190167..................................................          1.2689          0.8322         24.3185         26.4669         25.3283         25.3447
190175..................................................          1.3803          0.8711         27.1531         26.0547         27.4256         26.8730
190176..................................................          1.7567          0.8711         25.6997         25.8826         26.2596         25.9476
190177..................................................          1.7190          0.8711         27.4621         27.7792         28.2751         27.8348
190182..................................................             ***               *         28.4799         27.1682         29.8656         28.5188
190183..................................................          1.1703          0.7975         19.8084         22.6928         22.0119         21.4403
190184..................................................          1.0091          0.7764         23.9608         24.9476         24.1626         24.3753
190185..................................................             ***               *         24.7912         25.6394         28.9759         26.4364
190190..................................................          0.9347          0.7747         16.1195         24.3327         26.7043         22.8841
190191..................................................          1.3288          0.8322         23.5734         24.1923         26.1628         24.6319
190196..................................................          0.9294          0.8322         24.7135         24.0385         25.8472         24.8787
190197..................................................          1.3883          0.7869         24.3735         25.8071         26.4825         25.5498
190199..................................................          1.0219          0.8009         14.1409         27.3304         32.0194         23.0028
190200..................................................             ***               *         27.5681         28.8173         27.4781         27.9971
190201..................................................          1.2441          0.7783         24.5877         25.1010         24.4563         24.7120
190202..................................................          1.3990          0.8009         24.7944         27.6084         29.6612         27.4877
190203..................................................             ***               *         26.8795         28.1832         29.9753         28.2129
190204..................................................          1.5165          0.8711         28.3684         28.1033         30.5140         28.9472
190205..................................................          1.6775          0.8322         24.4540         26.6832         28.2484         26.4802
190206..................................................          1.5731          0.8711         26.0139         26.7401         29.2371         27.2862
190208..................................................          0.8612          0.7586         24.2588         28.7308         27.9908         27.1395
190218..................................................          1.1033          0.8551         25.0356         26.7262         28.1039         26.6017
190236..................................................          1.4943          0.8551         23.6824         24.7142         26.4614         24.9863
190241..................................................          1.2264          0.7975         23.9700         25.2123         25.7906         25.0883
190242..................................................          1.1676          0.8009         23.0072         24.8461         25.0035         24.3294
190245..................................................          1.7027          0.7869         27.1786         25.5751         26.7642         26.5210
190246..................................................          1.6612          0.7747               *               *         22.7833         22.7833
190247..................................................             ***               *               *         32.7499               *         32.7499
190248..................................................             ***               *               *         23.2220               *         23.2220
190249..................................................          1.8972          0.8009               *         20.0468         25.2523         22.1292
190250..................................................          2.1185          0.8711               *         31.5101         33.3302         32.3430
190251..................................................          1.2888          0.8009               *         21.4464         23.8389         22.5823
190252..................................................             ***               *               *         23.6924               *         23.6924
190253..................................................             ***               *               *         22.8060         23.8037         23.3049
190254..................................................             ***               *               *         32.9290               *         32.9290
190255..................................................          0.7428          0.8322               *         22.2412         16.1593         18.2998
190256..................................................          0.8040          0.8711               *               *         25.9577         25.9577
190257..................................................          1.6107          0.7647               *               *         26.5505         26.5505
190258..................................................          1.0203          0.8551               *         31.3715         26.1141         28.3735
190259..................................................          1.8072          0.8322               *               *         26.5084         26.5084
190260..................................................             ***               *               *               *         29.3947         29.3947
190261..................................................          1.6813          0.7869               *               *         27.0441         27.0441

[[Page 47460]]

 
190262..................................................             ***               *               *               *         30.3719         30.3719
190263..................................................          2.4748          0.8322               *               *         26.4202         26.4202
190264..................................................             ***               *               *               *         26.5842         26.5842
190265..................................................          0.7095          0.7869               *               *         22.6231         22.6231
190266..................................................          1.9424          0.8009               *               *               *               *
190267..................................................          1.2028          0.8711               *               *               *               *
190268..................................................          1.3593          0.8322               *               *               *               *
190270..................................................          1.7939          0.8711               *               *               *               *
190272..................................................          1.5530          0.8322               *               *               *               *
190273..................................................          1.6476          0.8009               *               *               *               *
200001..................................................          1.3864          0.9881         25.1144         25.2542         26.3045         25.5700
200002..................................................          1.0776          0.8408         25.7478         25.7212         27.1151         26.1903
200008..................................................          1.3373          0.9991         27.4412         27.7137         29.1836         28.1476
200009..................................................          1.9781          0.9991         31.1056         30.7510         32.5812         31.4774
200012..................................................          1.3475               *         25.7623               *               *         25.7623
200013..................................................             ***               *         24.4131               *               *         24.4131
200018..................................................          1.2583          0.8408         23.6337         23.5632         22.5027         23.1555
200019..................................................          1.2478          0.9991         25.1367         25.6649         27.7896         26.2304
200020..................................................          1.2349          1.0173         31.7083         32.6436         34.0916         32.8279
200021..................................................          1.2526          0.9991         24.5519         27.1381         29.2054         27.0896
200024..................................................          1.5917          0.9589         26.0080         27.5410         29.7817         27.8465
200025..................................................          1.1475          0.9991         26.0573         26.3124         28.5750         27.0015
200027..................................................             ***               *         26.3118               *               *         26.3118
200028..................................................             ***               *         24.3271               *               *         24.3271
200031..................................................          1.2583          0.8408         21.9489         21.2370         22.2151         21.8012
200032..................................................          1.1121          0.8874         25.5227         26.3322         26.8993         26.2493
200033..................................................          1.8746          0.9881         28.6479         29.3108         31.7007         29.9421
200034..................................................          1.3358          0.9589         26.2926         27.0582         27.0103         26.8004
200037..................................................          1.2367          0.8408         23.2333         24.1732         24.9418         24.1299
200039..................................................          1.3017          0.9589         25.1196         25.1179         26.6409         25.6399
200040..................................................          1.2319          0.9991         25.5405         25.9893         27.8053         26.5224
200041..................................................          1.1511          0.8408         24.5532         24.9670         26.6777         25.4297
200050..................................................          1.2555          0.9881         26.4992         27.6825         29.5033         27.9408
200052..................................................          1.0971          0.8408         21.8726         22.5159         24.4204         22.9910
200063..................................................          1.1426          0.9589         25.0167         25.8623         27.9748         26.3221
210001..................................................          1.3534          0.9442         27.7561         28.2858         29.3471         28.4871
210002..................................................          1.9675          1.0030         26.4992         32.3005         33.7388         30.7141
210003..................................................          1.6589          1.0675         29.8684         34.1109         30.7334         31.5417
210004..................................................          1.4229          1.1016         34.2392         33.6056         31.7132         33.1035
210005..................................................          1.2759          1.1016         28.7557         28.9554         29.5835         29.1066
210006..................................................          1.0873          1.0030         25.4081         25.9005         27.3620         26.2242
210007..................................................          1.8886          1.0030         30.2548         31.8767         30.7124         30.9328
210008..................................................          1.3842          1.0030         25.2833         24.3341         28.8850         26.1403
210009..................................................          1.6931          1.0030         26.2360         27.7900         30.2661         28.0855
210010..................................................             ***               *         25.7775               *               *         25.7775
210011..................................................          1.3772          1.0030         27.5031         30.8575         31.0966         29.8770
210012..................................................          1.6040          1.0030         27.4103         30.3078         31.1778         29.7278
210013..................................................          1.2771          1.0030         25.1348         28.5328         28.9917         27.5062
210015..................................................          1.2770          1.0030         28.2029         29.9261         32.2774         30.1836
210016..................................................          1.7522          1.1016         32.2081         32.3506         33.5493         32.6964
210017..................................................          1.1905          0.8911         23.2167         25.1890         26.8592         25.1002
210018..................................................          1.1898          1.1016         29.1870         29.5533         29.6521         29.4662
210019..................................................          1.7927          0.8911         26.1824         27.3731         28.7844         27.4744
210022..................................................          1.3934          1.1016         33.8015         35.4727         37.3092         35.4772
210023..................................................          1.4341          1.0109         30.4656         32.1812         33.0212         31.9645
210024..................................................          1.7296          1.0030         29.5579         30.6359         32.9434         31.0668
210025..................................................          1.2742          0.8911         26.0771         23.8552         24.8570         24.7700
210027..................................................          1.5326          0.8911         26.0111         24.6343         24.4821         25.0058
210028..................................................          1.0538          0.9423         25.9221         26.3469         26.7462         26.3461
210029..................................................          1.2601          1.0030         27.9741         31.0266         31.8539         30.2810
210030..................................................          1.2157          0.8911         29.5635         26.9763         32.2033         29.6024
210032..................................................          1.1523          1.0666         26.1829         27.0727         27.9359         27.1028
210033..................................................          1.1658          1.0030         29.0420         28.5534         29.2504         28.9511
210034..................................................          1.2970          1.0030         28.4308         30.2908         32.3827         30.4309
210035..................................................          1.2764          1.0675         26.1083         28.6484         27.3901         27.4000
210037..................................................          1.1898          0.8911         27.0973         27.3287         27.8394         27.4525
210038..................................................          1.2307          1.0030         29.5980         29.8121         32.3206         30.5517

[[Page 47461]]

 
210039..................................................          1.1414          1.0675         27.6940         30.4991         32.4139         30.2667
210040..................................................          1.2133          1.0030         29.3514         28.3559         29.2390         28.9752
210043..................................................          1.2979          1.0109         27.5657         26.6524         32.6961         28.8477
210044..................................................          1.3213          1.0030         28.8700         29.7339         30.3349         29.6367
210045..................................................          0.9662          0.8911         15.6380         14.2223         16.3724         15.4690
210048..................................................          1.2751          1.0030         28.4638         27.5043         26.0650         27.2655
210049..................................................          1.2023          1.0030         26.9656         26.0900         27.0161         26.6997
210051..................................................          1.3644          1.0675         29.2998         29.8892         29.5219         29.5723
210054..................................................          1.2933          1.0675         26.2295         27.4328         27.7607         27.1406
210055..................................................          1.1642          1.0675         29.9708         30.6941         31.4905         30.7118
210056..................................................          1.2997          1.0030         28.6091         30.0810         32.3518         30.4754
210057..................................................          1.3572          1.1016         32.2883         31.6787         32.8299         32.2617
210058..................................................          1.0863          1.0030         29.7841         31.0873         31.1988         30.7830
210060..................................................          1.1804          1.0675         28.5087         27.1764         29.9626         28.5557
210061..................................................          1.2433          0.8911         23.6662         23.1645         25.0253         23.9970
220001..................................................          1.1993          1.1354         29.0014         30.6070         31.2316         30.2898
220002..................................................          1.3836          1.1487         30.3598         32.4356         33.6649         32.2137
220003..................................................          1.1827               *         22.0549               *               *         22.0549
220006..................................................             ***               *         30.8599         30.7673         33.6438         31.7232
220008..................................................          1.2814          1.1303         30.1043         31.3385         34.7924         32.1143
220010..................................................          1.2471          1.1303         29.7998         30.7804         32.0925         30.8934
220011..................................................          1.1289          1.1487         34.4064         34.7655         36.5640         35.2410
220012..................................................          1.5403          1.2611         35.7872         37.8763         39.7564         37.8806
220015..................................................          1.1909          1.0450         28.3397         29.6315         32.4903         30.2089
220016..................................................          1.1221          1.0450         28.0608         30.4813         32.5863         30.3587
220017..................................................          1.2751          1.1843         29.7108         31.6170         33.3020         31.5466
220019..................................................          1.0840          1.1354         23.2544         24.4009         25.7855         24.4947
220020..................................................          1.2035          1.1303         26.5305         28.5288         30.8458         28.6772
220024..................................................          1.2983          1.0450         27.3488         28.7342         31.9491         29.2912
220025..................................................          1.0403          1.1354         23.0637         25.6478         30.4369         26.1069
220028..................................................             ***               *         32.0980         31.7122         39.3089         34.1922
220029..................................................          1.1319          1.1303         28.6970         30.6935         31.6363         30.3492
220030..................................................          1.1315          1.0450         24.4289         26.8849         28.1347         26.5400
220031..................................................          1.6670          1.1843         34.8183         36.8477         38.9433         36.9174
220033..................................................          1.2129          1.1303         28.2539         31.8249         32.3495         30.8022
220035..................................................          1.4179          1.1303         28.6238         31.4470         34.8739         32.8577
220036..................................................          1.5119          1.1843         31.5184         33.1436         35.9124         33.5798
220046..................................................          1.4766          1.0052         28.1396         30.4460         31.4510         30.0573
220049..................................................          1.2148          1.1487         27.7518         30.4740         32.4652         30.2584
220050..................................................          1.0817          1.0450         26.3768         28.3434         29.5194         28.1065
220051..................................................          1.3058          0.9705         29.8380         30.2552         30.1022         30.0683
220052..................................................          1.1342          1.1843         29.8577         32.4130         32.3532         31.5202
220058..................................................          0.9584          1.1354         24.9642         25.7247         27.8893         26.1881
220060..................................................          1.1735          1.1843         32.3362         32.5477         34.7336         33.2260
220062..................................................          0.5718          1.1354         24.2779         25.0766         25.4224         24.9426
220063..................................................          1.2551          1.1487         27.3968         30.2866         32.9283         30.2274
220065..................................................          1.2422          1.0450         26.5513         27.6009         30.1103         28.0583
220066..................................................          1.3440          1.0450         27.1317         27.8073         29.9736         28.3106
220067..................................................          1.1846          1.1843         29.8911         30.2222         32.4019         30.8648
220070..................................................          1.1331          1.1487         31.9283         33.1299         34.2598         33.1439
220071..................................................          1.8639          1.1843         32.2936         36.5065         37.4087         35.4748
220073..................................................          1.1778          1.1303         31.3566         34.2989         36.0289         33.8953
220074..................................................          1.3058          1.1303         28.4930         30.5607         31.4730         30.1564
220B74 \4\..............................................  ..............          1.1843         28.4930         30.5607         31.4730         30.1564
220075..................................................          1.5116          1.1843         29.1588         30.9175         32.2957         30.7771
220076..................................................             ***               *         29.7507         27.5148               *         28.6235
220077..................................................          1.6762          1.1025         30.2684         31.7325         34.0168         32.0323
220080..................................................          1.2068          1.1303         28.9835         29.9595         31.1268         30.0450
220082..................................................          1.2840          1.1487         26.9841         30.0611         30.8230         29.3142
220083..................................................          1.0834          1.1843         32.9143         34.5118         34.5969         33.9912
220084..................................................          1.2052          1.1487         32.5711         30.9527         31.6955         31.7158
220086..................................................          1.8146          1.1843         34.3667         34.2388         35.3451         34.6686
220088..................................................          1.8790          1.1843         28.5462         35.8255         34.7637         32.6700
220089..................................................             ***               *         31.1708         32.6305         34.8205         32.8410
220090..................................................          1.1951          1.1354         30.8685         32.9011         34.1963         32.7325
220095..................................................          1.1073          1.1354         27.4273         28.0673         30.8626         28.8006
220098..................................................          1.1432          1.1487         28.8314         30.5869         31.5403         30.3885

[[Page 47462]]

 
220100..................................................          1.3485          1.1843         29.6912         31.9859         34.6599         32.1947
220101..................................................          1.2863          1.1487         33.1690         35.3464         37.7809         35.5307
220105..................................................          1.2082          1.1487         31.9421         33.2625         34.4029         33.2435
220108..................................................          1.1284          1.1843         30.6252         32.6131         33.8854         32.3646
220110..................................................          2.0146          1.1843         36.6084         39.2167         40.7382         38.9261
220111..................................................          1.2052          1.1843         31.1850         33.6167         34.2498         33.0681
220116..................................................          1.9487          1.1843         32.9988         36.4149         38.8799         36.0050
220119..................................................          1.0940          1.1843         30.1056         30.9965         32.0863         31.1230
220126..................................................          1.1444          1.1843         28.7805         31.4882         32.6938         30.9694
220133..................................................             ***               *         33.6003         29.4855         34.9182         32.6345
220135..................................................          1.3229          1.2611         33.9866         36.0203         37.5189         35.8946
220153..................................................             ***               *               *               *         19.8085         19.8085
220154..................................................          0.9781          1.1843         28.6461               *         28.7898         28.7112
220162..................................................          1.6210               *               *               *               *               *
220163..................................................          1.5708          1.1354         33.6484         34.4874         37.4968         35.2942
220171..................................................          1.7187          1.1487         30.4036         32.7414         35.9948         33.0860
220174..................................................          1.2041          1.1303         31.7572         30.0406         30.9503         30.8602
220175..................................................          1.2664               *               *               *               *               *
220176..................................................          1.6820          1.1354               *               *               *               *
230002..................................................          1.2938          1.0143         29.1410         32.9010         32.7578         31.6084
230003..................................................          1.2256          0.9474         26.1278         27.5824         28.4716         27.4080
230004..................................................          1.7418          0.9968         26.7206         29.3934         31.5136         29.3059
230005..................................................          1.2619          0.9381         24.1902         25.8768         27.7463         25.8963
230006..................................................          1.0740               *         23.8835               *               *         23.8835
230013..................................................          1.3243          1.0243         23.7822         24.6511         27.2075         25.1219
230015..................................................          1.1456          0.9203         24.6571         26.2782         27.2541         26.0748
230017..................................................          1.6997          1.0500         29.5178         31.8821         32.5396         31.3897
230019..................................................          1.6525          1.0243         28.4575         32.3401         34.3213         31.6365
230020..................................................          1.7510          1.0143         29.2869         28.5646         29.5324         29.1347
230021..................................................          1.5938          1.0146         24.9551         26.5659         28.6169         26.7256
230022..................................................          1.3116          0.9906         23.3000         25.6683         30.1195         26.2393
230024..................................................          1.6711          1.0143         30.0813         32.1483         32.5892         31.6103
230027..................................................          1.0649               *         23.5511               *               *         23.5511
230029..................................................          1.6033          1.0243         29.0935         32.3538         32.3845         31.2338
230030..................................................          1.2720          0.8974         22.3174         23.8082         25.1100         23.7840
230031..................................................          1.3712          1.0033         25.4679         29.7232         30.0120         28.2715
230034..................................................          1.3767          0.8908         26.7967         24.4845         24.4141         25.2370
230035..................................................          1.2614          0.9374         21.2317         24.8822         25.6715         24.0699
230036..................................................          1.4568          0.9394         28.3622         29.3754         29.9642         29.2271
230037..................................................          1.3478          1.0143         26.2000         28.9244         28.5311         27.9038
230038..................................................          1.7887          0.9474         26.3480         28.2012         29.1263         27.9600
230040..................................................          1.2065          0.9374         24.2349         25.5154         26.3190         25.3856
230041..................................................          1.6028          0.9394         26.1760         27.8853         27.9569         27.3833
230042..................................................             ***               *         26.2037               *               *         26.2037
230046..................................................          1.9067          1.0498         30.3591         31.6235         32.2924         31.4692
230047..................................................          1.4044          1.0095         28.1351         31.1771         31.7075         30.3611
230053..................................................          1.6335          1.0143         29.8703         32.5711         32.1566         31.5479
230054..................................................          1.8867          0.9357         24.9905         25.7591         26.3251         25.7015
230055..................................................          1.2660          0.8908         25.4143         27.4349         28.4787         27.1074
230058..................................................          1.1260          0.8908         24.0657         25.9291         27.3156         25.7990
230059..................................................          1.5526          0.9474         25.5350         27.9091         28.5875         27.3993
230060..................................................          1.2205          0.8908         25.5015         28.2874         27.0288         26.9333
230065..................................................             ***               *         28.4631         32.6255               *         29.9929
230066..................................................          1.3080          0.9968         27.4928         30.6184         30.2104         29.5137
230069..................................................          1.1594          1.0243         29.5556         30.2663         31.3406         30.4158
230070..................................................          1.6379          0.9122         24.2342         25.6778         26.8315         25.5687
230071..................................................          0.8679          1.0243         26.3907         28.3064         29.6728         28.1431
230072..................................................          1.3908          0.9474         24.4933         26.2838         27.4742         26.0946
230075..................................................          1.3788          1.0099         27.6193         28.2540         30.9525         28.9620
230077..................................................          1.9004          1.0243         27.6157         29.8538         30.5567         29.3470
230078..................................................          1.0892          0.8908         23.9902         25.6809         25.7232         25.1289
230080..................................................          1.3052          0.9394         21.2314         24.1573         24.5432         23.3438
230081..................................................          1.1911          0.8908         23.0788         24.7374         26.4337         24.7718
230082..................................................          1.6774               *         22.2165               *               *         22.2165
230085..................................................          1.1931          1.0500         22.7313         23.4959         25.4289         23.9146
230087..................................................             ***               *         16.9168               *               *         16.9168
230089..................................................          1.3368          1.0143         28.7015         31.0522         32.8450         30.6488

[[Page 47463]]

 
230092..................................................          1.3633          1.0143         26.3584         28.6829         29.3442         28.2036
230093..................................................          1.2101          0.8966         26.4967         25.5804         27.4463         26.5309
230095..................................................          1.3084          0.8908         21.3916         22.8681         25.1854         23.1780
230096..................................................          1.1209          1.0146         28.7681         30.6024         31.7399         30.4267
230097..................................................          1.7979          0.9374         26.5773         28.2526         29.8962         28.2268
230099..................................................          1.2073          1.0143         26.4882         29.0221         29.3720         28.3183
230100..................................................          1.1880          0.8908         21.8895         24.1881         25.2118         23.7862
230101..................................................          1.2029          0.8908         24.3772         25.4839         28.4372         26.1557
230103..................................................             ***               *         21.6609               *               *         21.6609
230104..................................................          1.5968          1.0143         30.5570         32.4634         32.4125         31.7994
230105..................................................          1.8559          0.9394         27.2705         32.4583         30.5515         30.1274
230106..................................................          1.1782          0.9474         24.3980         25.3243         27.8584         25.9492
230108..................................................          1.1225          0.8908         18.4064         20.2539         24.4337         20.8956
230110..................................................          1.2978          0.8908         28.7704         27.0040         25.7196         27.1027
230117..................................................          1.8739          1.0500         29.4775         32.7994         33.0602         31.7183
230118..................................................          1.0425          0.8908         22.3636         23.6110         24.8890         23.5923
230119..................................................          1.3965          1.0143         30.2441         30.7488         31.9696         31.0539
230120..................................................          1.1884               *         24.1485               *               *         24.1485
230121..................................................          1.2817          0.9906         24.5220         26.4940         26.8361         25.9746
230130..................................................          1.7325          1.0243         26.6076         30.1608         31.2744         29.4079
230132..................................................          1.4181          1.1012         30.5318         32.3939         35.5304         32.7891
230133..................................................          1.3876          0.8908         24.3174         23.9442         25.0647         24.4539
230135..................................................          1.4429          1.0143         25.8407         25.9583         23.6005         25.1118
230141..................................................          1.6587          1.1012         28.6326         31.6152         33.2553         31.1646
230142..................................................          1.2476          1.0143         26.9433         27.8377         29.7417         28.1870
230143..................................................             ***               *         21.4083               *               *         21.4083
230144..................................................          2.3494          1.0498               *               *               *               *
230146..................................................          1.3924          1.0143         26.3432         26.8156         27.2621         26.8179
230151..................................................          1.3157          1.0243         28.2243         27.4546         29.8366         28.4831
230153..................................................             ***               *         22.8644               *               *         22.8644
230156..................................................          1.6271          1.0498         31.1909         32.3755         33.9034         32.4969
230165..................................................          1.6925          1.0143         28.9636         29.6376         31.4242         30.0168
230167..................................................          1.6197          1.0047         27.4562         29.8071         31.0657         29.4630
230169..................................................             ***               *         31.8442               *               *         31.8442
230172..................................................          1.1867               *         25.7402               *               *         25.7402
230174..................................................          1.2752          0.9474         27.6920         30.0563         29.7488         29.1588
230176..................................................          1.2853          1.0143         27.3605         28.1498         28.9798         28.2393
230180..................................................          1.1328          0.8908         24.7358         26.0707         24.9696         25.2514
230184..................................................             ***               *         23.6706         34.6295               *         25.2502
230186..................................................             ***               *         26.2282               *               *         26.2282
230189..................................................             ***               *         23.0100               *               *         23.0100
230190..................................................          0.8738          1.0500         29.9603         30.7875         33.8229         31.5779
230193..................................................          1.2839          1.0033         23.3565         25.1626         26.4728         25.0025
230195..................................................          1.4446          1.0095         28.2892         29.5656         30.9702         29.6539
230197..................................................          1.5799          1.1012         30.0367         32.0063         33.7128         31.9307
230204..................................................          1.3299          1.0095         29.1466         31.5615         32.2882         31.0169
230207..................................................          1.3461          1.0243         24.5201         25.4268         25.1983         25.0567
230208..................................................          1.1990          0.9374         21.9651         23.7523         24.3476         23.3648
230212..................................................          0.9926          1.0498         29.7981         31.9818         32.8567         31.5065
230216..................................................          1.5505          1.0033         27.5230         29.0147         29.2061         28.5839
230217..................................................          1.3820          1.0099         28.6074         30.1136         31.9732         30.2664
230222..................................................          1.3803          0.9394         26.9724         29.9341         30.6482         29.2060
230223..................................................          1.2980          1.0243         29.2854         28.6745         29.8430         29.2661
230227..................................................          1.5005          1.0095         29.5798         30.8218         33.6716         31.2208
230230..................................................          1.5223          1.0047         27.9607         29.8763         31.1712         29.6595
230235..................................................          1.0691               *         21.8777               *               *         21.8777
230236..................................................          1.5042          0.9474         28.4754         31.3110         30.8556         30.2130
230239..................................................          1.2714          0.8908         22.1040         21.0814         22.1579         21.7759
230241..................................................          1.2149          1.0033         27.4890         27.6106         28.5516         27.9012
230244..................................................          1.4375          1.0143         26.4326         29.6283         30.0405         28.6466
230254..................................................          1.5090          1.0243         28.1216         29.2653         29.5874         28.9733
230257..................................................          0.9484          1.0095         27.8198         29.6712         30.6372         29.3897
230259..................................................          1.2662          1.0498         26.8677         27.4217         27.5982         27.2972
230264..................................................          1.8524          1.0095         19.2398         22.7768         28.5416         23.0410
230269..................................................          1.5020          1.0243         28.8187         31.3226         31.3800         30.6060
230270..................................................          1.2636          1.0143         27.8488         28.5372         28.8173         28.4111
230273..................................................          1.5130          1.0143         29.9307         31.9862         31.5396         31.1383

[[Page 47464]]

 
230275..................................................          0.4718          0.9122         23.1095         23.8104         25.2133         24.0702
230277..................................................          1.4057          1.0243         29.1973         29.8372         31.4023         30.1462
230279..................................................          0.4951          1.0243         24.7673         27.2816         27.9726         26.6926
230283..................................................             ***               *         26.2622         33.5531               *         27.8105
230289..................................................             ***               *         29.7721               *               *         29.7721
230291..................................................             ***               *         30.9656               *               *         30.9656
230292..................................................             ***               *         31.8943               *               *         31.8943
230294..................................................             ***               *               *         31.6195               *         31.6195
230295..................................................             ***               *               *         27.1298               *         27.1298
230296..................................................             ***               *               *               *         34.2107         34.2107
230297..................................................          1.6768          1.0095               *               *               *               *
230299..................................................          0.7569          1.0095               *               *               *               *
230300..................................................          2.9905          1.0095               *               *               *               *
240001..................................................          1.5368          1.0896         31.5753         33.1499         34.7673         33.1702
240002..................................................          1.8838          1.0081         28.9860         31.6000         33.1051         31.2232
240004..................................................          1.5928          1.0896         30.8072         32.7010         32.5777         32.0088
240006..................................................          1.0956          1.0490         30.1949         31.0777         33.4777         31.6176
240010..................................................          2.0512          1.0490         31.3733         33.4668         32.7261         32.5154
240013..................................................             ***               *         28.3860               *               *         28.3860
240014..................................................          1.0234          1.0896         29.8623         29.8905         30.7519         30.1868
240016..................................................          1.2729               *         26.7814               *               *         26.7814
240017..................................................          1.1862               *         24.4417         24.3596               *         24.4015
240018..................................................          1.2793          0.9918         25.6236         28.1432         29.4995         27.7723
240019..................................................          1.0504          1.0081         28.6723         33.7546         32.7052         31.5906
240020..................................................          1.0690          1.0896         31.2443         31.3874         33.2449         31.9653
240021..................................................          1.0320               *         27.1236               *               *         27.1236
240022..................................................          1.0313          0.9113         25.2066         26.1920         27.3137         26.2644
240027..................................................          0.9334               *         18.2482               *               *         18.2482
240029..................................................          0.9036               *         25.3568               *               *         25.3568
240030..................................................          1.3356          1.0322         24.7154         26.5508         27.1312         26.1217
240031..................................................             ***               *         26.7778               *               *         26.7778
240036..................................................          1.6944          1.1058         28.0812         32.7028         34.2980         31.6464
240038..................................................          1.5433          1.0896         31.0779         31.9891         33.0554         32.0416
240040..................................................          1.0727          1.0081         27.4895         27.5074         28.9009         27.9569
240043..................................................          1.2167          0.9113         21.8684         23.3489         24.0708         23.1186
240044..................................................          1.0578          0.9738         22.0973         25.0988         26.8681         24.6231
240047..................................................          1.5014          1.0081         28.8289         28.6406         29.7835         29.0980
240050..................................................          1.1121          1.0896         26.4854         27.5553         30.9805         28.4152
240052..................................................          1.2203          0.9113         26.4256         28.7206         29.4617         28.2289
240053..................................................          1.4790          1.0896         29.5315         31.4324         33.1148         31.4053
240056..................................................          1.2476          1.0896         31.6623         33.1728         34.0845         32.9884
240057..................................................          1.8390          1.0896         30.6258         30.7703         33.4713         31.6052
240059..................................................          1.1410          1.0896         29.7916         31.0911         32.4803         31.1825
240061..................................................          1.8232          1.0490         30.6383         33.1799         32.0828         31.9873
240063..................................................          1.6425          1.0896         32.3487         33.7895         35.2877         33.8358
240064..................................................          1.1840          0.9956         29.9662         34.3757         27.2407         30.4845
240066..................................................          1.5079          1.0896         33.4532         35.3441         36.0705         35.0117
240069..................................................          1.2056          1.0490         28.9496         29.3718         30.9719         29.7863
240071..................................................          1.1303          1.0490         28.0586         28.6950         31.7754         29.4920
240075..................................................          1.1560          1.0322         26.1956         27.5039         29.1171         27.5983
240076..................................................          1.0339          1.0896         29.8561         30.6936         33.1439         31.3353
240078..................................................          1.7528          1.0896         32.3235         32.5785         34.6118         33.2014
240080..................................................          1.9192          1.0896         31.6828         32.5725         34.8064         32.9942
240083..................................................          1.2282               *         26.6582               *               *         26.6582
240084..................................................          1.1711          1.0081         26.8141         26.5975         27.0995         26.8366
240088..................................................          1.2869          1.0322         28.0825         28.0603         29.1387         28.4292
240093..................................................          1.4134          1.0896         25.5805         27.2928         29.1717         27.3783
240100..................................................          1.3073          0.9113         27.6299         30.8391         31.5774         30.0103
240101..................................................          1.1570          0.9113         25.5355         25.6963         26.8849         26.0843
240103..................................................             ***               *         22.7077               *               *         22.7077
240104..................................................          1.1350          1.0896         31.4306         31.6511         35.0736         32.8285
240106..................................................          1.6075          1.0896         29.3455         30.5927         32.8156         30.9392
240109..................................................          0.8676               *         16.5051               *               *         16.5051
240115..................................................          1.5330          1.0896         31.3869         32.0107         33.5288         32.3224
240117..................................................          1.1821          0.9640         23.6230         24.5750         27.6950         25.3203
240123..................................................             ***               *         21.7500               *               *         21.7500
240128..................................................             ***               *         21.5791         23.3334               *         22.4504

[[Page 47465]]

 
240132..................................................          1.2808          1.0896         31.7139         32.1233         34.6191         32.7811
240141..................................................          1.1219          1.0896         26.4016         31.4468         32.8689         30.5116
240143..................................................          0.8966               *         21.7416               *               *         21.7416
240152..................................................             ***               *         29.6196               *               *         29.6196
240162..................................................             ***               *         22.2722               *               *         22.2722
240166..................................................          1.1560          0.9113         25.7509         27.6987         26.5328         26.6686
240187..................................................          1.3285          1.0896         27.8811         27.8844         29.1582         28.3455
240196..................................................          0.8200          1.0896         30.7720         31.5965         34.3743         32.2603
240206..................................................          0.8831          1.4400               *               *               *               *
240207..................................................          1.1964          1.0896         31.7665         32.5589         34.6792         33.0557
240210..................................................          1.2901          1.0896         32.1564         32.7123         34.4184         33.1005
240211..................................................          0.9769          0.9925         18.8503         22.5430         17.4044         19.3517
240213..................................................          1.3936          1.0896         32.7532         33.8680         35.7818         34.1758
250001..................................................          1.9108          0.7950         22.7827         23.5222         23.7773         23.3786
250002..................................................          0.9543          0.7752         23.3844         23.4063         25.4201         24.0840
250004..................................................          1.9118          0.8963         24.1065         24.7907         25.8722         24.9584
250006..................................................          1.1133          0.8963         24.0191         24.4282         25.9199         24.8140
250007..................................................          1.2414          0.8607         25.8710         24.8929         27.7665         26.1862
250009..................................................          1.2438          0.8435         22.2323         23.0352         23.4866         22.9223
250010..................................................          0.9922          0.7752         19.4402         21.4322         21.8665         20.9164
250012..................................................          0.9498          0.9313         20.2922         21.5540         23.4837         21.7607
250015..................................................          1.1227          0.7752         20.7555         22.0067         22.2803         21.6585
250017..................................................          1.0264          0.7752         21.3950         22.7660         33.6840         25.4569
250018..................................................          0.8983          0.7752         16.6292         17.1276         17.9025         17.2152
250019..................................................          1.5215          0.8607         23.9741         25.7376         26.2199         25.3039
250020..................................................          0.9941          0.7752         21.4019         22.1851         23.7245         22.4970
250021..................................................             ***               *         20.3564               *               *         20.3564
250023..................................................          0.8728          0.8216         16.2418         18.0108         18.5067         17.6056
250025..................................................          1.0996          0.7752         20.5258         22.5621         23.1738         22.1091
250027..................................................          0.9597          0.7752         17.3481         24.4937         26.9922         22.7357
250031..................................................          1.3166          0.7950         21.4326         24.8139         25.9189         23.7971
250034..................................................          1.5394          0.8963         24.3189         26.1887         26.7996         25.7643
250035..................................................          0.8596          0.7752         17.2046         20.1622         19.1038         18.8948
250036..................................................          1.0403          0.8539         19.1975         20.3625         19.7951         19.8104
250037..................................................          0.9020               *         17.4012               *               *         17.4012
250038..................................................          0.9406          0.7950         18.9050         22.2571         26.9621         22.1505
250039..................................................          0.9692               *         17.3155               *               *         17.3155
250040..................................................          1.4843          0.8216         23.2285         24.5962         27.3366         25.0602
250042..................................................          1.2097          0.8963         23.4135         25.6807         26.1190         25.0569
250043..................................................          1.0165          0.7752         19.8097         18.8979         20.8841         19.8723
250044..................................................          1.0512          0.7752         23.3862         24.0508         24.9199         24.1132
250045..................................................          0.8706               *         26.3831               *               *         26.3831
250048..................................................          1.6242          0.7950         22.9765         25.2092         24.7659         24.3112
250049..................................................          0.8734          0.7752         17.7005         19.1044         20.4775         19.2031
250050..................................................          1.1882          0.7752         19.1467         20.8084         21.1657         20.4032
250051..................................................          0.8083          0.7752         10.6095         14.3741         13.9532         12.9323
250057..................................................          1.1237          0.7752         20.1900         22.7601         24.3654         22.3993
250058..................................................          1.2419          0.7752         18.1704         19.2502         18.9970         18.8129
250059..................................................          0.9234          0.7752         19.2976         23.8997         26.7491         23.0906
250060..................................................          0.8007          0.7752         16.8247         28.1431         25.4779         22.9648
250061..................................................          0.9008          0.7752         12.8174         17.8267         18.7413         16.2215
250067..................................................          1.0773          0.7752         21.6911         23.1193         25.2189         23.3711
250069..................................................          1.4798          0.8162         22.8162         22.6353         22.4194         22.6160
250072..................................................          1.6974          0.7950         24.6587         25.8399         25.5337         25.3438
250077..................................................          0.9375          0.7752         14.7632         18.3735         19.0416         17.4307
250078..................................................          1.6957          0.8216         20.9354         22.1243         22.8430         21.9367
250079..................................................          0.8566          0.7950         38.0032         45.5166         43.0845         42.6371
250081..................................................          1.3341          0.8162         24.7031         23.9995         25.6808         24.7915
250082..................................................          1.4638          0.7955         19.6966         23.0287         23.5399         22.0713
250084..................................................          1.2087          0.7752         18.5775         19.6492         19.1604         19.1217
250085..................................................          0.9997          0.7752         19.7008         22.5513         24.2915         22.2573
250093..................................................          1.1868          0.7752         21.3237         23.0984         23.9128         22.7658
250094..................................................          1.7390          0.8216         22.7312         24.1422         24.7718         23.8835
250095..................................................          1.0356          0.7752         21.3511         21.7488         23.6140         22.2444
250096..................................................          1.1760          0.7950         22.6298         24.9187         26.3743         24.6259
250097..................................................          1.6155          0.8009         20.1687         21.8139         22.0211         21.3430
250099..................................................          1.2795          0.7950         19.5797         21.1269         21.5656         20.7220

[[Page 47466]]

 
250100..................................................          1.4728          0.8162         24.2209         25.6846         27.0286         25.6566
250101..................................................             ***               *         19.3543               *               *         19.3543
250102..................................................          1.5957          0.7950         24.2868         24.6652         25.4050         24.7885
250104..................................................          1.4888          0.8162         22.6591         23.4303         24.4311         23.5422
250105..................................................          0.9250               *         18.1195               *               *         18.1195
250107..................................................          0.5882               *         17.8999               *               *         17.8999
250112..................................................          0.9893          0.7752         21.2824         24.3069         26.3357         23.9697
250117..................................................          1.1062          0.8216         23.3673         22.2450         23.7337         23.1049
250120..................................................             ***               *         23.4277         24.6370         26.6522         24.9400
250122..................................................          1.1115          0.7752         24.5854         27.2795         27.4424         26.3827
250123..................................................          1.3323          0.8607         24.5115         26.6221         27.9058         26.3779
250124..................................................          0.8198          0.7950         17.2181         20.4394         20.5667         19.3927
250125..................................................          1.2242          0.8607         27.7077         27.5158         26.7687         27.3398
250126..................................................          0.9523          0.7752         21.7112         24.4126         25.0019         23.6618
250127..................................................          0.8846          1.4400               *               *               *               *
250128..................................................          0.9268          0.8198         17.6269         17.7624         21.7882         19.2637
250134..................................................          0.8858          0.7950         25.8369         22.2167         21.0211         22.9411
250136..................................................          1.0311          0.7950         23.0637         22.9468         25.2241         23.7171
250138..................................................          1.3296          0.7950         23.8861         24.3018         25.2642         24.4955
250141..................................................          1.5435          0.9313         27.6158         28.5922         30.5112         28.9880
250146..................................................          0.7934               *         18.6486               *               *         18.6486
250149..................................................          0.8337          0.7752         15.0641         16.8796         17.2268         16.4094
250151..................................................          0.4710          0.7752         17.2205         18.8846         22.8238         18.4860
250152..................................................          0.8555          0.7950         25.7837         26.9334         26.4559         26.3576
250153..................................................             ***               *         29.0461               *               *         29.0461
250155..................................................             ***               *               *         22.5728               *         22.5728
250156..................................................             ***               *               *               *         16.8659         16.8659
250157..................................................             ***               *               *               *         29.6398         29.6398
250160..................................................          2.3735          0.8198               *               *               *               *
250161..................................................          2.1565          0.7950               *               *               *               *
260001..................................................          1.6505          0.9211         25.9250         27.9230         29.5271         27.7489
260002..................................................             ***               *         26.4879               *               *         26.4879
260004..................................................          0.9691          0.8153         16.9422         20.3217         21.3629         19.5753
260005..................................................          1.5536          0.8982         26.5773         27.7855         27.9477         27.4315
260006..................................................          1.4872          0.8153         26.7587         30.3440         27.3754         28.2413
260008..................................................             ***               *         18.9522               *               *         18.9522
260009..................................................          1.1605          0.9318         22.1816         24.2360         25.7546         24.0697
260011..................................................          1.5003          0.8702         22.7062         25.6387         27.5762         25.2813
260012..................................................             ***               *         20.3061               *               *         20.3061
260013..................................................             ***               *         20.5007               *               *         20.5007
260015..................................................          1.0079          0.8503         22.5409         24.6139         25.0640         24.0564
260017..................................................          1.3285          0.8702         22.7022         23.5713         25.0461         23.8093
260018..................................................          1.0396               *         17.0434               *               *         17.0434
260020..................................................          1.7374          0.8982         26.0407         27.4730         29.3080         27.6649
260021..................................................          1.3986          0.8982         27.6329         29.3646         32.6735         29.7171
260022..................................................          1.4082          0.8476         22.8085         23.3393         24.8713         23.6527
260023..................................................          1.3554          0.8982         21.2077         24.3192         25.4314         23.5901
260024..................................................          1.1334          0.8153         18.4829         19.4952         19.2199         19.0583
260025..................................................          1.3603          0.8982         22.4645         22.2451         24.0358         22.9418
260027..................................................          1.6405          0.9318         25.3348         26.3590         29.3811         27.0039
260032..................................................          1.8518          0.8982         23.9478         25.6763         27.4857         25.6996
260034..................................................          0.9779          0.9318         24.1143         25.0573         27.1685         25.5196
260035..................................................             ***               *         17.8741               *               *         17.8741
260036..................................................             ***               *         22.1913               *               *         22.1913
260040..................................................          1.6616          0.8791         23.3566         24.3938         25.9074         24.5552
260047..................................................          1.4495          0.8702         24.4185         25.4978         26.6343         25.5319
260048..................................................          1.1748          0.9318         24.3906         27.6117         28.1515         26.7038
260050..................................................          1.1594          0.8826         23.6849         25.0506         26.2346         25.0319
260052..................................................          1.3105          0.8982         24.5165         26.0052         27.6360         26.0330
260053..................................................          1.0761               *         21.6607               *               *         21.6607
260057..................................................          1.0689          0.9318         19.3335         20.9639         21.5925         20.6154
260059..................................................          1.1569          0.8230         19.7243         22.6922         22.3885         21.6448
260061..................................................          1.1348          0.8153         21.5264         22.4766         22.8589         22.2793
260062..................................................          1.2554          0.9318         26.4539         28.1661         28.4975         27.7053
260064..................................................          1.3816          0.8537         19.0543         22.2395         23.3498         21.5194
260065..................................................          1.7758          0.8791         23.0015         27.1014         29.3564         26.5324
260067..................................................          0.9311               *         17.6256               *               *         17.6256

[[Page 47467]]

 
260068..................................................          1.7942          0.8537         24.9504         26.0295         27.3475         26.1217
260070..................................................          0.9560          0.8153         18.4779         24.6331         21.9701         21.9657
260073..................................................             ***               *         21.6214               *               *         21.6214
260074..................................................          1.2370          0.8537         24.8655         25.6218         28.0468         26.1521
260077..................................................          1.6220          0.8982         25.5782         26.7466         27.6624         26.6607
260078..................................................          1.2824          0.8153         19.0802         20.1983         21.1539         20.1477
260080..................................................          0.9199          0.8153         14.7774         17.9107         18.6070         17.0074
260081..................................................          1.5693          0.8982         26.3969         28.1182         29.1890         27.9120
260085..................................................          1.5678          0.9318         25.6302         26.6718         28.0306         26.7545
260086..................................................          0.9570               *         19.1702               *               *         19.1702
260091..................................................          1.5284          0.8982         27.2407         28.0537         28.5473         27.9539
260094..................................................          1.7033          0.8619         23.2544         24.1473         23.8654         23.7602
260095..................................................          1.3886          0.9318         25.5668         24.2698         27.6196         25.7194
260096..................................................          1.5016          0.9318         27.5592         29.7312         30.7267         29.3752
260097..................................................          1.2010          0.8453         21.3957         25.0624         25.5634         24.1104
260102..................................................          0.9492          0.9318         24.2368         27.2145         26.7624         26.1065
260104..................................................          1.5666          0.8982         26.2867         28.6247         28.0235         27.6814
260105..................................................          1.8547          0.8982         28.8849         29.8848         29.4766         29.4216
260107..................................................          1.2949          0.9318         26.7781         25.8177         27.9710         26.8276
260108..................................................          1.8354          0.8982         24.9880         26.6374         27.0758         26.2658
260110..................................................          1.6385          0.8982         23.7978         24.7656         26.6030         25.1086
260113..................................................          1.1068          0.8345         20.9644         21.2072         21.8884         21.3627
260115..................................................          1.1422          0.8982         21.9858         23.1396         24.6389         23.3012
260116..................................................          1.0970          0.8240         18.5076         21.3503         20.7479         20.1811
260119..................................................          1.3301          0.8503         24.9937         27.9769         31.5490         28.0677
260122..................................................             ***               *         20.8015               *               *         20.8015
260127..................................................          0.9486               *         21.8533               *               *         21.8533
260137..................................................          1.7241          0.9211         22.7431         24.3273         27.6592         24.9488
260138..................................................          1.9932          0.9318         28.5610         30.4410         30.6284         29.8958
260141..................................................          1.8464          0.8537         22.4886         24.1555         25.5663         24.0283
260142..................................................          1.0863          0.8153         20.3993         21.5923         21.7609         21.2699
260147..................................................          0.9227          0.8153         18.5153         21.4235         22.1928         20.7819
260159..................................................             ***               *         23.7427         22.6276         23.9515         23.4460
260160..................................................          1.0727          0.8153         21.0544         23.8257         25.5096         23.4627
260162..................................................          1.3822          0.8982         25.1423         27.0236         28.4660         26.9323
260163..................................................          1.1447          0.8240         20.1949         21.6408         21.5566         21.0997
260164..................................................          1.3771               *         19.7068               *               *         19.7068
260166..................................................          1.2270          0.9318         27.0237         29.1225         28.5858         28.2382
260175..................................................          1.0781          0.9318         22.6171         25.1817         24.6064         24.1908
260176..................................................          1.7021          0.8982         27.4244         29.3034         31.1056         29.3206
260177..................................................          1.2063          0.9318         26.1178         27.0185         28.7942         27.3136
260178..................................................          1.8398          0.8537         22.2251         25.4782         27.1201         25.2036
260179..................................................          1.5496          0.8982         26.1419         26.6069         28.3234         27.0262
260180..................................................          1.5401          0.8982         26.7461         28.2931         29.3820         28.1562
260183..................................................          1.6674          0.8982         26.0418         27.5577         29.2684         27.6352
260186..................................................          1.5439          0.8702         25.3148         26.9797         28.8610         27.0998
260190..................................................          1.1950          0.9318         26.4505         27.9137         30.5343         28.3451
260191..................................................          1.3649          0.8982         23.3856         24.6973         26.3244         24.8437
260193..................................................          1.1902          0.9318         26.2979         26.8922         28.1060         27.0944
260195..................................................          1.2138          0.8153         22.3959         22.6870         24.0411         23.0824
260198..................................................          0.9613          0.8982         27.5996         28.0021         27.2555         27.6065
260200..................................................          1.2664          0.8982         24.8624         28.2453         27.4784         26.8903
260207..................................................          1.1544          0.8791         19.7294         22.6109         22.9579         22.0292
260209..................................................          1.1052          0.8702         23.2430         25.0098         25.0749         24.4649
260210..................................................          1.2687          0.8982         25.3781         26.8745         30.5975         27.6599
260211..................................................          1.5777          0.9318         33.9109         40.9821         35.9113         37.0332
260213..................................................             ***               *               *               *         34.8953         34.8953
260214..................................................          1.2383          0.9318               *               *               *               *
260215..................................................          0.8925               *               *               *               *               *
260216..................................................          1.1892          0.9318               *               *               *               *
260217..................................................          1.9096          0.8153               *               *               *               *
270002..................................................          1.1596          0.8335         22.7322         24.0534         25.2907         24.0317
270003..................................................          1.3075          0.8761         26.4843         28.8700         29.1938         28.2090
270004..................................................          1.6785          0.8870         23.5454         26.1319         26.6779         25.4900
270011..................................................          1.0334          0.8335         22.1394         22.7061         24.4696         23.0853
270012..................................................          1.5540          0.8761         25.2873         25.2914         26.5854         25.7202
270014..................................................          1.9641          0.8738         26.2025         25.8231         27.4811         26.5073

[[Page 47468]]

 
270017..................................................          1.3197          0.8738         27.5483         26.5404         27.4150         27.1724
270021..................................................             ***               *         21.7056               *               *         21.7056
270023..................................................          1.5487          0.8738         26.7576         25.5682         26.3076         26.1917
270032..................................................          1.0283          0.8335         19.6212         20.3469         20.4330         20.1359
270036..................................................             ***               *         20.4241               *               *         20.4241
270049..................................................          1.7517          0.8870         26.3996         27.1634         28.6880         27.4297
270051..................................................          1.5580          0.8335         26.6619         26.5621         24.9371         25.9492
270057..................................................          1.2534          0.8335         24.2980         25.5811         27.1838         25.7301
270060..................................................             ***               *         17.7564               *               *         17.7564
270074..................................................          0.9156          1.4400               *               *               *               *
270081..................................................          0.9750          0.8569         17.4862         19.5612         20.0438         18.9885
270086..................................................          1.0637          0.8761               *         21.0808         20.7976         20.9433
270087..................................................          1.2167          0.8335               *         25.9772         24.8022         25.3663
280003..................................................          1.7479          0.9872         29.3921         30.6124         30.1057         30.0354
280009..................................................          1.8630          0.9626         26.7678         27.0705         29.3634         27.7395
280013..................................................          1.7335          0.9473         26.1908         27.0250         27.9523         27.0727
280020..................................................          1.7374          0.9872         26.5068         27.3284         32.3896         28.7656
280021..................................................          1.1678               *         22.0489               *               *         22.0489
280023..................................................          1.3669          0.9626         22.3230         26.7980         29.5132         26.0305
280030..................................................          1.8904          0.9473         30.7481         29.5102         30.6991         30.3314
280032..................................................          1.2987          0.9626         23.6462         24.3995         24.7539         24.2697
280040..................................................          1.6380          0.9473         26.9827         28.7207         29.5276         28.4319
280054..................................................          1.1439               *         23.5665               *               *         23.5665
280057..................................................          0.8606               *         20.4830               *               *         20.4830
280060..................................................          1.6779          0.9473         26.2139         27.7496         30.3049         28.0748
280061..................................................          1.3957          0.9009         24.9482         26.0208         26.4824         25.8457
280065..................................................          1.2385          0.9744         26.0135         28.0581         28.0132         27.3416
280077..................................................          1.3374          0.8926         25.5624         27.0860         28.2206         26.9878
280081..................................................          1.7068          0.9473         26.0541         28.7464         31.1212         28.6426
280105..................................................          1.2617          0.9473         26.7555         27.8599         29.8488         28.1889
280108..................................................          1.0740               *         23.2503               *               *         23.2503
280111..................................................          1.1900          0.8846         23.4770         24.5617         27.4853         25.3180
280117..................................................          1.1038               *         24.1521               *               *         24.1521
280119..................................................          0.8357          1.4400               *               *               *               *
280123..................................................          0.9968          0.8969               *         15.4047         22.2185         17.7515
280125..................................................          1.5929          0.8846         21.7657         22.1345         23.2900         22.4202
280127..................................................          1.7915          0.9872               *         29.3684         25.6806         27.2615
280128..................................................          2.9055          0.9872               *         28.5422         28.8734         28.7213
280129..................................................          1.9024          0.9473               *               *         27.8793         27.8793
280130..................................................          1.3731          0.9473               *               *         29.8588         29.8588
290001..................................................          1.8514          1.1062         31.1981         36.3129         35.5113         34.2992
290002..................................................          0.9058          0.9701         18.3469         17.3876         23.9348         19.4284
290003..................................................          1.8286          1.1452         28.1625         30.3373         32.8182         30.4051
290005..................................................          1.4267          1.1452         27.6697         28.3366         31.7107         29.0818
290006..................................................          1.1835          1.0851         27.9501         31.7301         31.9838         30.5940
290007..................................................          1.6319          1.1452         37.5559         38.1938         39.7323         38.5049
290008..................................................          1.2061          0.9701         27.9714         27.3019         31.1116         28.8004
290009..................................................          1.7155          1.1062         29.8019         36.2724         32.3348         32.7010
290010..................................................             ***               *         23.9655               *               *         23.9655
290012..................................................          1.3595          1.1452         31.0843         32.3966         35.7988         33.1284
290016..................................................             ***               *         26.1925               *               *         26.1925
290019..................................................          1.4106          1.0851         28.6158         29.3650         30.5964         29.5670
290020..................................................          0.9879          0.9701         21.6993         23.2103         27.6277         23.8492
290021..................................................          1.7447          1.1452         33.2116         32.7894         36.7310         34.3050
290022..................................................          1.6617          1.1452         29.4422         29.9717         33.5330         30.9653
290027..................................................          0.8977          0.9701         15.1448         23.9959         23.9818         21.2171
290032..................................................          1.4261          1.1062         31.7105         31.6711         34.6589         32.6749
290039..................................................          1.5622          1.1452         31.2941         32.1423         34.9622         32.8643
290041..................................................          1.3799          1.1452         33.9877         34.2436         37.6077         35.4456
290042..................................................             ***               *               *               *         22.4859         22.4859
290044..................................................             ***               *               *         37.1662               *         37.1662
290045..................................................          1.5944          1.1452         30.9612         33.1512         34.4584         33.0001
290046..................................................          1.3262          1.1452               *               *         38.7966         38.7966
290047..................................................          1.4997          1.1452               *               *         33.4695         33.4695
290049..................................................          1.3649          0.9701               *               *         26.0725         26.0725
290051..................................................          1.6073          0.9701               *               *               *               *
290052..................................................          0.9497          0.9701               *               *               *               *

[[Page 47469]]

 
300001..................................................          1.5464          1.1259         27.5032         29.2260         29.8145         28.8796
300003..................................................          2.1048          1.1259         33.3560         34.7900         37.0886         35.1221
300005..................................................          1.4049          1.1259         25.6699         27.8000         27.8431         27.1342
300006..................................................             ***               *         23.3200               *               *         23.3200
300010..................................................             ***               *         27.5028               *               *         27.5028
300011..................................................          1.2835          1.1328         28.4044         30.9403         31.8928         30.4453
300012..................................................          1.3798          1.1328         30.5198         30.4972         31.2655         30.7729
300014..................................................          1.1573          1.1259         27.5151         29.7667         29.1847         28.8592
300017..................................................          1.3085          1.1259         29.6957         29.9560         31.6699         30.4413
300018..................................................          1.4139          1.1259         29.7209         29.4270         31.7891         30.3785
300019..................................................          1.2712          1.1259         25.9656         27.5672         28.2287         27.2950
300020..................................................          1.1611          1.1328         28.6723         30.8491         30.9783         30.1937
300023..................................................          1.3397          1.1259         28.6309         31.0040         31.2726         30.3861
300029..................................................          1.7558          1.1259         29.0806         29.8117         31.4429         30.1534
300034..................................................          1.9005          1.1328         29.7484         30.7676         31.6880         30.7463
310001..................................................          1.7835          1.3229         35.3612         41.7460         39.3391         38.8076
310002..................................................          1.8123          1.3001         37.3461         37.9183         37.8652         37.7010
310003..................................................          1.1430          1.3229         32.8935         36.2346         39.0785         36.1404
310005..................................................          1.3200          1.1673         29.0084         32.1319         33.6311         31.6195
310006..................................................          1.2207          1.3229         27.4545         28.4771         28.7321         28.2234
310008..................................................          1.3040          1.3229         31.2579         32.6788         33.3172         32.4236
310009..................................................          1.3170          1.3001         32.7384         33.6940         33.6165         33.3550
310010..................................................          1.2809          1.1616         28.5852         33.9552         33.7009         32.1235
310011..................................................          1.2513          1.1616         30.8612         31.2907         34.3497         32.1653
310012..................................................          1.6576          1.3229         34.6882         38.3590         39.8568         37.6617
310013..................................................          1.3567          1.3001         30.6248         31.0447         35.6260         32.2970
310014..................................................          1.9393          1.1616         29.7204         30.0793         32.9016         30.9529
310015..................................................          1.9968          1.3001         36.4776         36.8818         39.2928         37.5859
310016..................................................          1.3504          1.3229         33.9862         35.6155         38.2740         36.0399
310017..................................................          1.3322          1.3001         30.9233         32.2434         35.7308         32.9489
310018..................................................          1.1974          1.3001         30.3381         30.3234         32.9704         31.1743
310019..................................................          1.5532          1.3229         29.6592         30.3518         30.6369         30.2334
310020..................................................          1.5417          1.3229         30.6722         33.5516         37.3372         35.3958
310021..................................................          1.6673          1.1616         31.3410         32.1929         31.6562         31.7278
310022..................................................          1.2929          1.1616         28.2024         30.4043         31.1951         29.9534
310024..................................................          1.2735          1.1673         30.9171         33.3415         33.8622         32.7353
310025..................................................          1.3583          1.3229         31.1274         34.3687         32.2630         32.6293
310026..................................................          1.1811          1.3229         27.5171         29.1588         30.1392         28.9609
310027..................................................          1.3916          1.1673         28.8314         29.7793         31.5967         30.0516
310028..................................................          1.1683          1.1673         31.3849         32.2977         33.9911         32.5804
310029..................................................          1.9359          1.1616         30.7707         32.9246         33.6695         32.4534
310031..................................................          3.0047          1.1616         33.9685         37.0668         39.3783         36.7939
310032..................................................          1.3402          1.1616         27.5232         30.7865         33.0258         30.4634
310034..................................................          1.3881          1.1616         29.9162         31.7012         32.7523         31.4431
310037..................................................          1.3845          1.3229         35.0329         38.5415         38.2865         37.2934
310038..................................................          1.9967          1.3001         33.4822         35.9190         36.3344         35.3017
310039..................................................          1.2652          1.3001         28.8292         31.4278         33.2100         31.1031
310040..................................................          1.3306          1.3229         34.1113         33.8535         37.7945         35.2738
310041..................................................          1.3033          1.1616         32.8085         32.8390         33.9799         33.1814
310042..................................................             ***               *         30.7357         34.4986               *         32.5359
310044..................................................          1.3437          1.1616         31.3205         31.9678         33.7614         32.3239
310045..................................................          1.6620          1.3229         34.1060         36.7862         38.4424         36.4052
310047..................................................          1.3103          1.2063         32.7880         34.1520         37.3695         34.8319
310048..................................................          1.3604          1.1616         30.2025         32.9681         33.9506         32.4220
310049..................................................             ***               *         27.8565               *               *         27.8565
310050..................................................          1.2632          1.3001         27.3033         29.1732         32.3686         29.5226
310051..................................................          1.4210          1.1673         33.7168         35.0121         38.1174         35.6230
310052..................................................          1.3148          1.1616         30.8036         32.5778         33.5849         32.3047
310054..................................................          1.3491          1.3001         34.1860         34.4431         36.9095         35.1806
310057..................................................          1.3580          1.1616         29.5221         31.1268         31.8933         30.8472
310058..................................................          1.0998          1.3229         28.0815         27.1555         30.4080         28.5500
310060..................................................          1.2257          1.1616         25.1575         27.3415         27.8242         26.8643
310061..................................................          1.2040          1.1616         28.2129         31.6648         39.0538         32.6390
310063..................................................          1.3566          1.1673         31.4884         31.9247         33.8519         32.4001
310064..................................................          1.5564          1.2063         33.4440         35.7607         38.6310         36.0389
310069..................................................          1.2283          1.1616         28.1681         31.7642         34.4669         31.6153
310070..................................................          1.4393          1.3001         33.2310         34.3225         36.3279         34.6577

[[Page 47470]]

 
310073..................................................          1.9384          1.1616         32.0328         32.6733         34.2858         33.0132
310074..................................................          1.4076          1.3229         29.4834         40.3494         39.6196         36.4297
310075..................................................          1.3486          1.1616         31.6869         31.5226         32.5338         31.9060
310076..................................................          1.6948          1.3001         36.4280         38.0643         37.5163         37.3327
310077..................................................             ***               *         32.6644         34.6085               *         33.6290
310078..................................................             ***               *         29.8014         30.5761               *         30.1919
310081..................................................          1.2435          1.1616         26.6136         30.1561         31.0699         29.3013
310083..................................................          1.2967          1.3001         28.2392         30.3580         31.9151         30.1908
310084..................................................          1.2495          1.1616         32.9001         33.5941         32.6051         33.0233
310086..................................................          1.2196          1.1616         29.3058         29.5566         29.8794         29.5860
310088..................................................          1.1944          1.2063         26.4966         29.9929         30.3552         28.9197
310090..................................................          1.2491          1.1673         30.8941         32.8191         33.4615         32.3298
310091..................................................          1.1872          1.1616         27.7204         29.3969         31.9762         29.6739
310092..................................................          1.4211          1.1616         29.4998         29.7958         32.7054         30.6412
310093..................................................          1.2376          1.3001         28.0401         29.1288         30.2860         29.1452
310096..................................................          2.0682          1.3001         34.4275         34.1524         35.0707         34.5571
310105..................................................          1.2642          1.3229         31.9769         30.1069         32.5672         31.5194
310108..................................................          1.3920          1.3001         30.1002         33.0172         34.5866         32.5569
310110..................................................          1.3054          1.1616         31.2164         33.2246         33.4809         32.6996
310111..................................................          1.2374          1.1616         30.7475         31.8393         34.8284         32.5303
310112..................................................          1.3369          1.1616         30.4192         31.2372         32.2676         31.3091
310113..................................................          1.2469          1.1616         29.6079         31.0436         33.6771         31.5140
310115..................................................          1.3257          1.1616         29.6020         29.5320         31.9208         30.3993
310116..................................................          1.2613          1.3229         25.6976         29.2748         29.8144         28.1684
310118..................................................          1.2995          1.3229         28.8797         31.1803         31.2296         30.4800
310119..................................................          1.9452          1.3001         37.7876         43.1238         41.5702         40.9091
310120..................................................          1.1067          1.1673         31.4111         29.2535         33.3861         31.2922
310122..................................................             ***               *               *               *         41.9029         41.9029
310123..................................................             ***               *               *               *         37.1022         37.1022
310124..................................................             ***               *               *               *         41.8827         41.8827
310125..................................................             ***               *               *               *         36.2186         36.2186
310126..................................................          1.5770          1.1673               *               *               *               *
310127..................................................          2.1663          1.1616               *               *               *               *
320001..................................................          1.6904          0.9725         26.9434         29.6182         30.0077         28.9126
320002..................................................          1.4655          1.0682         30.5158         32.0477         33.1342         31.9538
320003..................................................          1.1309          1.0379         28.1402         27.6222         31.4473         29.2088
320004..................................................          1.3372          0.8965         24.9481         24.7803         26.2073         25.3027
320005..................................................          1.3986          0.9725         23.8264         24.7543         28.7893         25.7109
320006..................................................          1.3191          0.9725         24.2812         26.9080         28.0964         26.5135
320009..................................................          1.5653          0.9725         22.8293         32.0116         27.8084         27.0081
320011..................................................          1.1591          0.9407         24.2279         25.6693         27.9522         25.9810
320013..................................................          1.1095          1.0379         28.9276         22.8283         30.5865         26.9423
320014..................................................          1.0798          0.8965         24.5310         27.2806         28.7089         26.9267
320016..................................................          1.1809          0.8965         23.5040         25.0835         27.1492         25.3050
320017..................................................          1.1952          0.9725         25.0286         31.6357         33.3496         30.1544
320018..................................................          1.4708          0.8989         23.2360         26.5109         25.9248         25.0333
320019..................................................          1.5804          0.9725         31.5192         27.8067         35.0217         30.9860
320021..................................................          1.6072          0.9725         27.2357         26.9918         28.8504         27.7586
320022..................................................          1.1616          0.8965         23.7160         23.9595         25.3707         24.3634
320030..................................................          1.0991          0.8965         22.1971         21.0378         24.4497         22.6078
320033..................................................          1.1954          1.0379         27.6393         31.7114         30.1471         29.8084
320037..................................................          1.2522          0.9725         23.3999         24.9657         25.2876         24.5736
320038..................................................          1.2776          0.8965         20.1533         21.7022         32.7192         25.2889
320046..................................................             ***               *         24.3534               *               *         24.3534
320057..................................................          0.8729          1.4400               *               *               *               *
320058..................................................          0.7716          1.4400               *               *               *               *
320059..................................................          0.8739          1.4400               *               *               *               *
320060..................................................          0.9509          1.4400               *               *               *               *
320061..................................................          0.8807          1.4400               *               *               *               *
320062..................................................          0.8932          1.4400               *               *               *               *
320063..................................................          1.3138          0.9522         24.4696         25.0031         26.0104         25.1846
320065..................................................          1.3090          0.9522         26.6603         27.3163         25.7945         26.5978
320067..................................................          0.8771          0.8965         23.7745         24.9865         24.7025         24.5152
320069..................................................          1.1009          0.8965         20.9167         22.4128         23.9863         22.4807
320070..................................................          0.9497          1.4400               *               *               *               *
320074..................................................          1.1777          0.9725         22.2175         31.1333         28.4396         27.5523
320079..................................................          1.0746          0.9725         25.2105         26.1188         27.6877         26.3861

[[Page 47471]]

 
320083..................................................          2.5829          0.9725         28.2114         26.6921         29.5483         28.1910
320084..................................................          0.9585          0.8965         17.2511         17.5788         22.7706         19.1172
320085..................................................          1.6988          0.8989         24.8752         27.9944         27.4100         26.8654
330001..................................................             ***               *         33.4718               *               *         33.4718
330002..................................................          1.4701          1.3229         31.1924         30.9600         32.1956         31.4367
330003..................................................          1.3898          0.8667         22.9945         24.4326         25.2223         24.2261
330004..................................................          1.2772          1.0762         26.0445         28.0594         30.2236         28.0555
330005..................................................          1.5846          0.9588         29.0124         30.3200         31.5030         30.2924
330006..................................................          1.2549          1.3229         31.5370         33.6284         34.2001         33.1191
330008..................................................          1.1962          0.9588         21.8198         23.4429         25.2005         23.4731
330009..................................................          1.2209          1.3229         35.4986         36.2820         38.9166         36.8498
330010..................................................          0.9609          0.8470         19.6920         20.7476         19.7098         20.0039
330011..................................................          1.3861          0.9068         21.8008         25.1308         27.4747         24.7766
330013..................................................          1.8871          0.8667         24.5162         26.4578         26.8382         25.9719
330014..................................................          1.3021          1.3229         38.8123         42.1759         45.7619         42.1087
330016..................................................             ***               *         28.4391         22.0493         23.0769         24.0047
330019..................................................          1.2350          1.3229         34.8266         38.5368         39.7429         37.6992
330023..................................................          1.5532          1.2341         31.6208         35.9428         36.4736         34.8790
330024..................................................          1.8568          1.3229         37.8398         42.7691         43.2342         41.1289
330025..................................................          1.0759          0.9588         20.2776         21.2565         23.2424         21.5975
330027..................................................          1.3410          1.3001         39.0717         42.8000         45.1920         42.3263
330028..................................................          1.4248          1.3229         34.2709         36.6498         36.2901         35.6915
330029..................................................          0.4658          0.9588         19.1589         23.2039         24.0679         21.4788
330030..................................................          1.2420          0.8918         22.9937         24.6175         25.3454         24.2688
330033..................................................          1.1925          0.8630         22.5680         24.5510         24.8022         23.9493
330036..................................................          1.1741          1.3229         28.9409         29.1884         30.3757         29.5029
330037..................................................          1.1940          0.8918         20.6904         22.3689         21.9246         21.6480
330041..................................................          1.3233          1.3229         36.0286         37.4883         36.9934         36.8228
330043..................................................          1.3835          1.2877         34.7480         39.1643         38.8060         37.6024
330044..................................................          1.3073          0.8416         24.1907         26.5669         28.2293         26.3415
330045..................................................          1.3333          1.2877         36.1893         38.1269         40.0326         38.1677
330046..................................................          1.3813          1.3229         44.8494         50.3152         47.4975         47.5047
330047..................................................          1.1878          0.8470         24.0678         24.3932         24.9934         24.5012
330049..................................................          1.5198          1.2341         29.2904         29.8350         34.8585         31.4556
330053..................................................          1.0489          0.8918         18.5289         20.6272         21.8383         20.3286
330055..................................................          1.5717          1.3229         38.4839         41.5934         42.2007         40.8306
330056..................................................          1.4406          1.3229         37.8444         36.0136         38.8910         37.5789
330057..................................................          1.7329          0.8667         24.4680         26.4989         27.7121         26.2563
330058..................................................          1.2624          0.8918         21.3727         22.2524         22.6852         22.1185
330059..................................................          1.5241          1.3229         39.7387         41.7343         44.9162         42.1521
330061..................................................          1.1882          1.3229         33.2848         36.0587         37.8828         35.7862
330062..................................................          2.5188               *         21.0464               *               *         21.0464
330064..................................................          1.1797          1.3229         36.4276         38.0437         38.2332         37.5276
330065..................................................          1.0343          0.9588         23.9128         25.3043         24.4004         24.5186
330066..................................................          1.2786          0.8667         24.7941         29.1780         25.8174         26.6320
330067..................................................          1.4312          1.2341         26.4243         27.8900         29.2571         27.8298
330072..................................................          1.3677          1.3229         36.4336         37.8505         39.6996         37.9172
330073..................................................          1.0856          0.8918         20.1490         22.5592         23.4020         22.0432
330074..................................................          1.2120          0.8918         21.4274         22.6629         23.4576         22.5315
330075..................................................          1.1282          0.9950         22.4188         23.1592         24.2552         23.2899
330078..................................................          1.4627          0.9588         23.3981         25.8073         27.2870         25.5271
330079..................................................          1.3912          0.9427         22.5237         24.6054         24.9941         24.0665
330080..................................................          1.1613          1.3229         39.1724         39.1417         38.9405         39.0850
330084..................................................          1.0884          0.8416         21.5455         22.5573         25.6880         23.2872
330085..................................................          1.1341          0.9602         23.9568         25.3285         26.6235         25.3048
330086..................................................          1.3276          1.3229         29.1784         32.7675         35.5269         32.6267
330088..................................................          1.0140          1.2877         31.3973         34.0789         35.3871         33.6067
330090..................................................          1.4711          0.8416         23.6174         25.5351         26.8730         25.3567
330091..................................................          1.3626          0.9588         23.8063         25.9378         27.0040         25.6221
330094..................................................          1.2531          0.9270         23.0001         25.7116         26.9148         25.1933
330095..................................................             ***               *         31.9873               *               *         31.9873
330096..................................................          1.2247          0.8416         22.0337         22.7189         24.2422         22.9958
330097..................................................          1.0476               *         20.3189               *               *         20.3189
330100..................................................          1.0885          1.3229         34.4621         38.3333         39.6244         37.5351
330101..................................................          1.9277          1.3229         38.7503         40.1929         43.7944         40.9964
330102..................................................          1.3807          0.9588         24.8184         25.3879         26.6887         25.6620
330103..................................................          1.1464          0.8416         21.1452         22.8242         24.5585         22.8019

[[Page 47472]]

 
330104..................................................          1.3459          1.3229         32.8818         33.7537         35.1076         33.9518
330106..................................................          1.7219          1.3001         41.4561         43.8210         46.3657         43.9257
330107..................................................          1.2616          1.2877         31.3888         34.9047         35.7384         34.0853
330108..................................................          1.1667          0.8416         22.2607         23.2919         23.9368         23.1807
330111..................................................          1.0707          0.9588         20.9387         20.3473         40.4349         24.2740
330115..................................................          1.1806          0.9950         23.3043         25.2373         23.8235         24.1488
330119..................................................          1.7980          1.3229         39.1114         39.0528         42.2901         40.1403
330125..................................................          1.7884          0.8918         26.7119         27.2920         28.0584         27.3748
330126..................................................          1.3165          1.3001         31.6370         35.2257         36.5689         35.2864
330127..................................................          1.3535          1.3229         44.6103         45.3680         45.2993         45.0871
330128..................................................          1.2254          1.3229         37.7166         39.5197         41.7790         39.6524
330132..................................................          1.1447          0.8540         17.4946         21.0479         21.7648         20.0521
330133..................................................          1.3564          1.3229         36.6962         39.3837         38.5228         38.1376
330135..................................................          1.1403          1.1624         29.0837         27.9132         32.0525         29.6962
330136..................................................          1.5167          0.9602         24.2010         25.8531         26.6680         25.5995
330140..................................................          1.8311          0.9950         25.7573         27.6183         29.3461         27.5931
330141..................................................          1.3221          1.2877         34.8902         39.4701         39.3741         38.0047
330144..................................................          1.0380          0.8416         20.9935         22.9561         23.3874         22.4515
330151..................................................          1.1204          0.8416         19.1841         21.7665         19.7959         20.1957
330152..................................................          1.2991          1.3229         36.5136         37.6721         38.2079         37.4707
330153..................................................          1.7292          0.8667         24.5219         26.4386         28.4446         26.4931
330154..................................................          1.7046               *               *               *               *               *
330157..................................................          1.3499          0.9602         25.2312         26.5686         27.1432         26.3138
330158..................................................          1.5286          1.3229         32.2990         38.2033         41.7010         37.3746
330159..................................................          1.3642          0.9950         28.9094         28.2774         31.7835         29.5880
330160..................................................          1.5280          1.3229         34.1960         36.6208         37.1915         36.0563
330162..................................................          1.2882          1.3229         32.1783         34.9460         37.6226         34.8806
330163..................................................          1.1295          0.9588         24.0200         27.1933         28.3910         26.5660
330164..................................................          1.4564          0.8918         28.8481         27.7217         27.8746         28.1414
330166..................................................          1.0847          0.8416         19.4360         20.4680         20.7121         20.1917
330167..................................................          1.7096          1.3001         34.4748         36.7653         39.1251         36.7245
330169..................................................          1.3878          1.3229         39.3361         45.3774         46.4939         43.5632
330171..................................................             ***               *         30.0122         30.4005         35.1577         31.6504
330175..................................................          1.1111          0.8665         22.2067         23.8509         24.1005         23.3987
330177..................................................          0.9871          0.8416         19.6100         20.6338         22.9834         21.0962
330180..................................................          1.2276          0.8667         22.1920         24.3761         25.4170         23.9998
330181..................................................          1.2695          1.3001         38.5351         41.4104         43.0977         41.0544
330182..................................................          2.3153          1.3001         39.6038         40.9014         41.3033         40.6150
330184..................................................          1.4028          1.3229         34.4044         35.8102         39.0437         36.4620
330185..................................................          1.2774          1.2877         32.3466         36.3155         38.4002         35.8311
330188..................................................          1.2399          0.9588         23.9210         25.1153         27.5988         25.5243
330189..................................................          1.3891          0.8667         21.6229         22.3484         22.4383         22.1391
330191..................................................          1.2688          0.8667         24.0232         25.5656         26.4328         25.3769
330193..................................................          1.3142          1.3229         37.1807         39.9327         39.8910         39.0190
330194..................................................          1.7350          1.3229         43.9910         45.5639         46.8880         45.5320
330195..................................................          1.7167          1.3229         40.0206         39.7802         41.7885         40.5432
330196..................................................          1.2488          1.3229         33.2171         36.7178         38.2525         36.0781
330197..................................................          1.0612          0.8416         23.4290         26.8921         25.9872         25.4383
330198..................................................          1.3652          1.3001         30.5485         33.4930         34.8985         33.0524
330199..................................................          1.1995          1.3229         35.0059         38.6407         40.3948         37.9488
330201..................................................          1.5865          1.3229         39.3682         37.2064         42.6707         39.7180
330202..................................................          1.2534          1.3229         38.0129         37.4150         37.4158         37.6076
330203..................................................          1.4666          0.9950         26.5882         32.1207         34.0499         30.8856
330204..................................................          1.3463          1.3229         37.6849         39.6393         41.9953         39.7978
330205..................................................          1.1752          1.1624         32.1618         31.9510         33.9418         32.7294
330208..................................................          1.1543          1.3229         29.6282         32.1256         33.5287         31.7776
330209..................................................             ***               *         29.7988         30.2038               *         30.0002
330211..................................................          1.1591          0.8416         22.9966         24.4470         25.8752         24.4788
330212..................................................             ***               *         27.2232               *               *         27.2232
330213..................................................          1.1103          0.8416         22.5191         24.4049         27.4890         24.8466
330214..................................................          1.9072          1.3229         37.8500         41.8719         42.1339         40.5132
330215..................................................          1.3051          0.8774         22.6744         23.7361         23.9583         23.4620
330218..................................................          1.0747          0.9950         24.1106         26.9638         26.9982         26.0474
330219..................................................          1.7282          0.9588         29.3644         29.8889         32.5658         30.5817
330221..................................................          1.3569          1.3229         36.5539         39.2080         40.0514         38.6296
330222..................................................          1.2879          0.8667         23.9746         25.8507         27.7198         25.9137
330223..................................................          1.0006          0.8416         19.4229         23.3669         26.1264         22.8482

[[Page 47473]]

 
330224..................................................          1.3195          1.0762         25.7850         27.9231         29.1738         27.6678
330225..................................................          1.2331          1.3001         29.2719         32.3585         35.7651         32.4734
330226..................................................          1.3402          0.8918         21.8977         24.5646         24.8471         23.8237
330229..................................................          1.1912          0.8416         20.6095         21.9356         23.0577         21.8545
330230..................................................          1.0056          1.3229         33.3175         37.1298         38.6569         36.3376
330231..................................................          1.0910          1.3229         36.9619         40.6697         44.9422         40.8973
330232..................................................          1.1619          0.8667         24.4531         26.3313         27.4639         26.1069
330233..................................................          1.4122          1.3229         45.5132         47.3497         52.7070         48.3785
330234..................................................          2.3951          1.3229         40.6314         48.2306         49.3219         45.8241
330235..................................................          1.1932          0.9602         23.3866         27.7031         29.4346         26.7570
330236..................................................          1.5608          1.3229         35.6347         40.2386         42.8981         39.6841
330238..................................................          1.2617          0.8918         20.8639         21.7435         21.8386         21.4871
330239..................................................          1.2553          0.8416         21.5397         22.3854         23.1885         22.3782
330240..................................................          1.2125          1.3229         39.9450         43.5753         40.5001         41.3038
330241..................................................          1.8062          0.9950         29.0882         30.2304         32.7683         30.7645
330242..................................................          1.3309          1.3229         33.6926         37.4870         36.9015         35.9785
330245..................................................          1.8746          0.8774         22.8003         26.1811         27.4326         25.5154
330246..................................................          1.3355          1.2877         34.6329         37.1611         35.7416         35.8265
330247..................................................          0.8998          1.3229         32.2300         35.4980         39.0219         35.4575
330249..................................................          1.3506          0.9950         22.9834         25.3246         24.6091         24.2993
330250..................................................          1.3317          0.9584         25.1664         27.1606         29.0080         27.1471
330259..................................................          1.4233          1.3001         31.9152         35.1514         36.4788         34.5426
330261..................................................          1.2665          1.3229         30.7942         33.7834         40.2579         34.7049
330263..................................................          1.0274          0.8416         22.4675         23.8738         24.1333         23.5408
330264..................................................          1.2911          1.1624         30.0139         30.4701         31.0557         30.7362
330265..................................................          1.1847          0.8918         20.4635         21.6477         23.9081         21.9775
330267..................................................          1.3602          1.3229         31.5478         32.8541         34.9885         33.1377
330268..................................................          0.9185          0.8416         20.9720         25.3567         23.8793         23.3606
330270..................................................          2.0320          1.3229         42.2111         57.3596         55.2136         51.3968
330273..................................................          1.4013          1.3229         30.4720         37.0157         35.9298         34.5428
330276..................................................          1.1000          0.8445         22.2353         24.3300         26.0935         24.2204
330277..................................................          1.1770          0.9709         25.3582         26.4535         30.9053         27.3708
330279..................................................          1.5223          0.9588         25.2130         27.4539         29.6385         27.5185
330285..................................................          2.0056          0.8918         27.9018         30.1928         31.1235         29.7578
330286..................................................          1.3671          1.2877         33.3552         35.5895         37.6040         35.5541
330290..................................................          1.7307          1.3229         36.9981         39.4690         40.6933         39.0180
330304..................................................          1.3100          1.3229         34.5761         36.2845         37.3537         36.1514
330306..................................................          1.4163          1.3229         35.6640         36.3552         38.7713         36.9913
330307..................................................          1.3298          0.9709         27.5699         29.2529         29.5885         28.8558
330314..................................................             ***               *         25.5597         26.2719         28.1788         26.6141
330316..................................................          1.2422          1.3229         34.8623         34.8567         37.1766         35.6163
330331..................................................          1.2558          1.3001         36.1630         39.8402         41.2694         39.1625
330332..................................................          1.2696          1.3001         33.3050         35.1646         37.0111         35.2121
330333..................................................             ***               *         26.1917               *               *         26.1917
330338..................................................             ***               *         31.3761         37.7497               *         34.6182
330339..................................................          0.7538          0.8667         22.6569         23.5786         24.3066         23.5064
330340..................................................          1.2556          1.2877         33.9358         37.9000         37.4161         36.3862
330350..................................................          1.4785          1.3229         36.6250         41.1339         44.4617         40.7608
330353..................................................          1.2406          1.3229         37.6549         45.9692         45.0977         43.0087
330354..................................................          2.1152               *               *               *               *               *
330357..................................................          1.2623          1.3229         35.5975         38.2286         40.3850         37.9060
330372..................................................          1.2748          1.3001         32.6721         36.1840         35.1297         34.7443
330385..................................................          1.1071          1.3229         46.3221         48.6175         49.0859         47.9732
330386..................................................          1.2175          1.1570         27.9943         29.9366         33.3216         30.4750
330389..................................................          1.7369          1.3229         34.7669         37.1862         39.6871         37.2049
330390..................................................          1.2347          1.3229         36.0573         36.3842         35.5562         35.9780
330393..................................................          1.7487          1.2877         34.8095         38.0619         39.2186         37.4063
330394..................................................          1.6374          0.9068         25.2229         27.3388         28.4597         27.0157
330395..................................................          1.4395          1.3229         37.3096         36.3921         37.5791         37.0864
330396..................................................          1.5369          1.3229         35.0297         37.4998         39.4904         37.3259
330397..................................................          1.4390          1.3229         38.4741         37.5682         41.4448         39.1440
330399..................................................          1.0823          1.3229         32.3688         34.7394         36.7626         34.6081
330401..................................................          1.3638          1.2877         40.6249         37.8559         40.4485         39.6496
330403..................................................          0.9812          0.8918         23.1886         25.5163         25.2937         24.6332
330404..................................................          0.8616          1.3229               *               *               *               *
330405..................................................          0.8688          1.3229               *               *               *               *
330406..................................................          0.8696          0.8667               *               *               *               *

[[Page 47474]]

 
340001..................................................          1.5135          0.9505         25.0041         28.3988         29.5709         27.7170
340002..................................................          1.8226          0.9201         27.3349         28.4860         29.6622         28.5097
340003..................................................          1.1864          0.8603         23.3066         24.1602         26.0888         24.5124
340004..................................................          1.4204          0.9078         25.4474         26.6404         27.5283         26.5365
340005..................................................          0.9877               *         22.3814               *               *         22.3814
340008..................................................          1.1890          0.9342         26.6314         26.7443         27.7206         27.0545
340010..................................................          1.3717          0.9474         24.5666         27.2105         28.7544         26.8571
340011..................................................          1.1392          0.8603         19.9484         19.7441         22.0047         20.5590
340012..................................................          1.2501          0.8603         22.7189         23.2288         24.7576         23.5973
340013..................................................          1.2482          0.9342         23.0261         23.9492         26.3607         24.4161
340014..................................................          1.5499          0.9078         25.1872         27.4888         27.8384         26.8919
340015..................................................          1.3635          0.9342         26.2276         28.0585         28.3928         27.5641
340016..................................................          1.2882          0.8603         23.0359         25.6454         27.2365         25.3118
340017..................................................          1.3185          0.9201         23.8229         25.7780         27.5672         25.7234
340018..................................................             ***               *         23.7243               *               *         23.7243
340020..................................................          1.2026          0.8759         23.7995         26.4465         27.5473         25.9059
340021..................................................          1.3011          0.9342         26.0995         29.4864         29.3835         28.3680
340023..................................................          1.3623          0.9403         24.4896         26.4225         26.2716         25.7465
340024..................................................          1.1034          0.8780         22.2522         23.6638         26.4001         24.1341
340025..................................................          1.3306          0.9201         21.2276         23.5881         24.0101         22.9999
340027..................................................          1.1603          0.9267         23.6326         25.5973         26.3840         25.2711
340028..................................................          1.5229          0.9917         26.3298         28.0323         30.7591         28.3770
340030..................................................          2.0915          0.9738         29.0122         29.6630         30.4591         29.7351
340032..................................................          1.4483          0.9505         26.7475         26.5958         28.7636         27.4150
340035..................................................          1.0908          0.8603         23.5476         23.9669         24.6262         24.0395
340036..................................................          1.3746          0.9663         25.2077         27.2691         27.3860         26.6516
340037..................................................          1.1084          0.8765         21.6411         25.6262         29.0618         25.6372
340038..................................................          1.2390          0.8856         14.0713         22.4829         24.2111         19.1097
340039..................................................          1.2793          0.9342         27.1275         27.4457         27.8228         27.4762
340040..................................................          1.9853          0.9267         26.3325         27.6626         28.7434         27.6121
340041..................................................          1.1974          0.8972         23.6600         24.3595         26.8314         25.0117
340042..................................................          1.2701          0.8603         23.0236         25.0110         25.6349         24.5586
340045..................................................             ***               *         23.1918               *               *         23.1918
340047..................................................          1.8409          0.9078         25.0605         27.4022         28.4968         27.0295
340049..................................................          1.8539          0.9738         30.4827         30.6791         29.6826         30.2360
340050..................................................          1.1118          0.9593         24.2533         26.0365         27.5274         25.9407
340051..................................................          1.2249          0.8814         23.4091         23.9612         24.4561         23.9489
340053..................................................          1.4951          0.9505         27.7261         27.8577         28.9355         28.1746
340055..................................................          1.2468          0.8972         24.1057         26.0647         26.5752         25.5723
340060..................................................          1.1417          0.9106         22.8657         22.9097         25.1791         23.6619
340061..................................................          1.8143          0.9738         27.5594         27.0089         29.8574         28.1792
340064..................................................          1.0718          0.8603         22.9143         23.4233         23.9701         23.4394
340068..................................................          1.2500          0.9156         21.8830         22.6814         23.6757         22.7411
340069..................................................          1.8788          0.9738         27.4473         29.3439         31.4951         29.4988
340070..................................................          1.2881          0.9106         24.9033         25.3226         26.6546         25.6458
340071..................................................          1.0900          0.9474         25.4537         26.3921         27.9748         26.6157
340072..................................................          1.2076          0.8603         23.1163         25.2493         24.1350         24.1644
340073..................................................          1.5996          0.9738         30.2061         30.9849         31.6803         30.9681
340075..................................................          1.2344          0.8972         26.0226         25.1551         25.1438         25.4402
340084..................................................          1.1981          0.9505         21.2580         21.1363         23.1300         21.8526
340085..................................................          1.1465          0.9106         23.9793         26.5164         27.9572         26.0805
340087..................................................          1.2855          0.8603         22.0070         22.4287         25.4730         23.2835
340090..................................................          1.3673          0.9663         23.4541         26.4031         26.7428         25.6227
340091..................................................          1.5783          0.9078         25.8266         27.1285         28.8044         27.3003
340096..................................................          1.2025          0.9106         25.2169         24.9036         26.5438         25.5729
340097..................................................          1.2782          0.8603         24.2127         26.2228         29.8005         26.6208
340098..................................................          1.4555          0.9505         27.3308         28.2493         29.7180         28.4477
340099..................................................          1.3045          0.8603         20.3683         21.8564         23.9702         22.0907
340104..................................................          0.9032          0.8765         15.7521         16.1204         17.0165         16.3439
340106..................................................          1.1098          0.8603         22.4894         26.0892         26.1340         24.8429
340107..................................................          1.2251          0.9007         22.9698         24.1762         26.5626         24.5944
340109..................................................          1.2621          0.8777         23.4419         25.4464         26.6383         25.1802
340113..................................................          1.9376          0.9505         28.2568         28.5587         30.3841         29.0850
340114..................................................          1.5717          0.9738         26.6813         28.3222         28.1311         27.7304
340115..................................................          1.6237          0.9738         25.0212         26.7592         27.2781         26.3719
340116..................................................          1.7673          0.8972         25.3213         27.5881         29.3698         27.4192
340119..................................................          1.3174          0.9505         24.2287         25.6226         29.4470         26.4336

[[Page 47475]]

 
340120..................................................          1.0111          0.8603         23.0915         25.9134         25.5399         24.8578
340121..................................................          1.1158          0.9325         21.7576         23.1343         23.8854         22.9469
340123..................................................          1.3425          0.9106         26.1083         26.0637         28.5669         26.9166
340124..................................................          1.0382          0.9474         20.8018         22.2988         23.5480         22.2128
340126..................................................          1.2869          0.9474         25.0189         26.9866         28.2247         26.7666
340127..................................................          1.1535          0.9738         25.7831         26.4746         28.2161         26.8349
340129..................................................          1.2620          0.9342         25.4902         25.7976         26.7606         26.0415
340130..................................................          1.3501          0.9505         25.2941         26.1717         28.1594         26.5940
340131..................................................          1.5008          0.9267         27.9358         27.4750         28.8542         28.1014
340132..................................................          1.1997          0.8603         21.3521         23.5856         24.6162         23.2107
340133..................................................          1.0172          0.8911         22.5558         23.4678         24.8579         23.5985
340137..................................................             ***               *         21.0642         22.1741         28.9672         23.0834
340138..................................................          0.8513          0.9738         21.3670               *               *         21.3670
340141..................................................          1.6608          0.9325         27.3355         29.3878         29.3171         28.6965
340142..................................................          1.1641          0.8603         22.9907         26.6886         27.7555         25.9008
340143..................................................          1.5125          0.8972         25.3633         28.0082         27.9777         27.1349
340144..................................................          1.2444          0.9342         27.2686         26.1865         27.0150         26.8087
340145..................................................          1.1836          0.9342         23.7131         25.8459         26.7482         25.4578
340147..................................................          1.2997          0.9474         25.4534         26.9162         28.2626         26.9073
340148..................................................          1.4008          0.9078         23.5880         25.3660         25.8325         24.9278
340151..................................................          1.1655          0.8655         22.0052         22.7736         23.2158         22.6707
340153..................................................          1.8783          0.9505         26.4896         27.6509         28.5979         27.6012
340155..................................................          1.4288          0.9738         30.4940         30.3443         30.9501         30.6075
340156..................................................          0.8520          1.4400               *               *               *               *
340158..................................................          1.1142          0.9325         26.4849         27.7816         27.6526         27.2851
340159..................................................          1.2295          0.9738         23.2991         24.2588         25.3108         24.3176
340160..................................................          1.3379          0.8603         20.7525         21.7923         23.4631         22.0123
340166..................................................          1.2893          0.9505         26.0558         27.1132         28.5395         27.2674
340168..................................................          0.3793          0.9325         17.3249               *               *         17.3249
340171..................................................          1.1727          0.9505         28.2734         27.8539         27.4701         27.8495
340173..................................................          1.2942          0.9738         27.5072         28.3502         30.2815         28.7937
340177..................................................          1.0970               *         24.7471         26.7155               *         25.7127
340178..................................................             ***               *         28.7218               *               *         28.7218
340179..................................................             ***               *               *         34.1895               *         34.1895
340182..................................................             ***               *               *         27.8071               *         27.8071
340183..................................................          1.0758          0.9505               *               *               *               *
350002..................................................          1.8100          0.7311         22.0283         22.4307         23.5869         22.7218
350003..................................................          1.1839          0.7311         21.8061         23.9639         24.9975         23.6038
350006..................................................          1.5595          0.7311         19.4985         21.2726         22.4626         21.0496
350009..................................................          1.1330          0.7943         23.0873         23.8681         24.5737         23.8529
350010..................................................          0.9689          0.7309         19.1964         20.1290         20.4198         19.9342
350011..................................................          1.9811          0.7943         23.1947         23.8400         24.1135         23.7260
350014..................................................          0.9073          0.7309         17.7565         19.1684         17.5837         18.1607
350015..................................................          1.6836          0.7311         20.1161         20.9046         21.3342         20.8695
350017..................................................          1.2734          0.7309         21.0243         22.4359         21.6187         21.6699
350019..................................................          1.6836          0.8048         22.1960         23.2018         24.9615         23.5379
350030..................................................          0.9632          0.7309         18.9978         20.2722         22.5976         20.6218
350061..................................................          1.4521               *         22.0515               *               *         22.0515
350063..................................................          0.8917          1.4400               *               *               *               *
350070..................................................          1.8140          0.7943         25.2836         25.2365         26.2454         25.5903
360001..................................................          1.4384          0.9661         23.9101         25.8669         28.8623         26.1633
360002..................................................          1.2621          0.8838         24.5789         24.5155         25.4859         24.8654
360003..................................................          1.7764          0.9661         27.5029         28.9672         30.7812         29.0939
360006..................................................          1.8868          1.0024         28.1698         30.1363         30.9806         29.7940
360008..................................................          1.3246          0.8724         24.5714         26.2632         27.5683         26.1309
360009..................................................          1.6060          0.9307         23.1012         25.0007         27.0618         25.0993
360010..................................................          1.2245          0.8806         23.1178         23.7825         24.7352         23.9121
360011..................................................          1.2621          0.9820         25.5340         27.6036         31.5587         28.1839
360012..................................................          1.3982          1.0024         27.5470         30.1416         31.0526         29.6656
360013..................................................          1.0958          0.9307         26.8130         27.0893         29.8412         27.9268
360014..................................................          1.1327          0.9820         25.3861         27.1017         27.0743         26.5482
360016..................................................          1.4372          0.9661         26.1283         27.8031         29.6298         27.8544
360017..................................................          1.7047          1.0024         27.2910         29.8525         31.7081         29.6406
360019..................................................          1.3006          0.9215         25.5926         26.9178         27.2997         26.6163
360020..................................................          1.6208          0.9215         24.4343         23.6400         25.6328         24.5734
360024..................................................             ***               *         23.5793               *               *         23.5793
360025..................................................          1.4534          0.9268         25.5633         27.4533         27.1546         26.7668

[[Page 47476]]

 
360026..................................................          1.3232          0.9278         23.5898         25.5379         25.2945         24.8038
360027..................................................          1.6134          0.9215         25.4894         27.4454         28.2923         27.0621
360029..................................................          1.0868          0.9268         22.7785         24.3216         26.4208         24.5306
360032..................................................          1.2095          0.8696         23.2638         25.0034         25.9916         24.7563
360035..................................................          1.7331          1.0024         27.5220         30.0172         31.3181         29.6743
360036..................................................          1.2087          0.9215         27.6094         27.8343         29.3514         28.2918
360037..................................................          1.4271          0.9345         24.3982         29.0046         30.0446         27.6736
360038..................................................          1.5417          0.9661         22.8009         25.4274         31.0611         26.3008
360039..................................................          1.4955          0.9820         24.0218         23.9783         24.7873         24.2790
360040..................................................          1.1430          0.9083         24.0942         24.8569         25.5337         24.8329
360041..................................................          1.4959          0.9345         24.1080         26.1522         26.6755         25.6870
360044..................................................          1.1369          0.8823         21.8411         21.5619         24.3840         22.5769
360046..................................................          1.2023          0.9661         25.0775         25.4673         26.2417         25.5994
360047..................................................          1.0860               *         21.7248               *               *         21.7248
360048..................................................          1.7561          0.9268         28.8107         29.3415         29.4378         29.2064
360049..................................................             ***               *         25.8367         26.2222               *         26.0185
360051..................................................          1.7003          0.9278         25.7556         26.8501         28.1167         26.9164
360052..................................................          1.6091          0.9278         24.5405         26.2066         26.8806         25.8864
360054..................................................          1.3924          0.8724         23.0376         22.9359         24.8248         23.5845
360055..................................................          1.4142          0.8991         26.3112         27.3941         30.0143         27.8971
360056..................................................          1.6185          0.9661         23.1024         26.5318         30.3677         26.6371
360058..................................................          1.0590          0.8696         23.4429         23.8119         24.5003         23.9275
360059..................................................          1.5014          0.9345         25.3516         29.3624         30.6173         28.4902
360062..................................................          1.4838          1.0024         28.6518         31.7422         32.8893         31.2563
360064..................................................          1.5933          0.8991         22.2393         25.2336         27.7795         24.9763
360065..................................................          1.2190          0.9268         26.3036         28.0405         29.7155         28.0324
360066..................................................          1.5166          0.9307         27.3362         27.1436         29.7605         28.0751
360068..................................................          1.8866          0.9268         25.8414         26.2065         26.6933         26.2583
360069..................................................          1.2464               *         24.2444               *               *         24.2444
360070..................................................          1.6587          0.8917         24.8863         27.2389         27.8891         26.6577
360071..................................................          1.1157          0.8731         22.0786         23.4619         26.4081         23.9600
360072..................................................          1.5232          1.0024         24.4332         25.9589         27.2286         25.9259
360074..................................................          1.3002          0.9268         24.9055         25.8959         27.5328         26.1112
360075..................................................          1.1472          0.9345         26.8453         26.8925         26.1657         26.5905
360076..................................................          1.4890          0.9661         25.9369         28.1013         29.0148         27.7077
360077..................................................          1.5236          0.9345         25.6505         28.4449         28.0133         27.3825
360078..................................................          1.2784          0.9215         26.1313         25.7885         27.4689         26.4454
360079..................................................          1.7865          0.9661         26.0935         27.2437         30.1230         27.8340
360080..................................................          1.1302          0.8696         20.8309         21.4526         22.7020         21.7298
360081..................................................          1.3518          0.9268         27.5695         29.8366         29.5312         28.9628
360082..................................................          1.3503          0.9345         27.1197         29.2561         28.7925         28.4298
360084..................................................          1.6077          0.8917         25.8415         27.3917         28.5402         27.2566
360085..................................................          2.0267          1.0024         29.0081         31.5800         32.8502         31.2560
360086..................................................          1.6601          0.9278         22.1859         25.4218         27.3124         24.9575
360087..................................................          1.2859          0.9345         25.4040         29.6579         28.4185         27.8522
360089..................................................          1.1454          0.8696         22.7951         25.3465         25.5608         24.5874
360090..................................................          1.5834          0.9268         26.7717         29.0199         30.7530         28.8616
360091..................................................          1.3288          0.9345         27.5067         25.8657         27.6809         27.0164
360092..................................................          1.2652          1.0024         25.6618         25.4954         25.4055         25.5165
360094..................................................             ***               *         26.6348               *               *         26.6348
360095..................................................          1.4011          0.9268         26.1275         26.4635         29.3787         27.2944
360096..................................................          1.0887          0.8697         24.6317         25.9275         26.8653         25.8210
360098..................................................          1.3625          0.9345         24.8447         25.5973         26.6382         25.7210
360100..................................................          1.1996          0.8917         23.0561         25.4523         23.6167         24.0350
360101..................................................          1.3614          0.9345         26.6209         27.6030         29.7817         28.0282
360106..................................................             ***               *         24.1588               *               *         24.1588
360107..................................................          1.1208          0.9268         25.9697         24.6095         26.0534         25.5448
360109..................................................          1.0704          0.8696         25.4184         26.3131         30.1382         27.2363
360112..................................................          1.9950          0.9268         28.6784         30.5715         31.1356         30.1179
360113..................................................          1.3132          0.9661         25.6493         26.6556         30.2871         27.4975
360115..................................................          1.2830          0.9345         24.0052         25.9841         26.1821         25.4599
360116..................................................          1.1956          0.9661         18.0655         25.1717         26.4968         23.3911
360118..................................................          1.5295          0.9209         27.7289         27.3884         28.5643         27.8933
360121..................................................          1.3608          0.9268         24.5593         27.4442         28.3835         26.7824
360123..................................................          1.4120          0.9345         22.6523         27.1920         28.0334         25.8336
360125..................................................          1.1989          0.8696         22.1096         24.1388         25.9067         23.9904
360128..................................................             ***               *         21.0067               *               *         21.0067

[[Page 47477]]

 
360130..................................................          1.4726          0.9345         22.9762         25.6570         26.3986         25.2275
360131..................................................          1.3046          0.8917         24.0496         25.3719         26.6635         25.3529
360132..................................................          1.3628          0.9661         25.9453         27.7724         29.4070         27.6756
360133..................................................          1.6044          0.9278         24.6208         29.8684         31.7521         28.7271
360134..................................................          1.7956          0.9661         29.2974         27.7339         28.5141         28.4865
360137..................................................          1.7456          0.9345         26.9522         26.1250         27.6894         26.9256
360141..................................................          1.6591          0.8991         27.7085         29.7937         31.1778         29.5401
360142..................................................          1.0665               *         22.1610               *               *         22.1610
360143..................................................          1.2889          0.9345         24.6306         28.3057         26.9394         26.6732
360144..................................................          1.3635          0.9345         25.7079         28.2473         28.9177         27.6781
360145..................................................          1.6717          0.9345         25.8268         27.1908         28.1835         27.1041
360147..................................................          1.2487          0.8696         24.1953         25.5854         27.5548         25.7876
360148..................................................          1.0887          0.8696         26.1947         26.0837         26.3399         26.2104
360150..................................................          1.2305          0.9215         24.7667         25.1217         28.2561         26.0004
360151..................................................          1.6215          0.8917         24.8629         25.3780         26.5636         25.6137
360152..................................................          1.5002          1.0024         27.9147         29.9425         31.5377         29.7875
360153..................................................          0.9761          0.8696         19.0226         19.8499         20.2147         19.7391
360155..................................................          1.4482          0.9345         25.3909         26.9127         28.9521         27.1128
360156..................................................          1.1513          0.8815         24.0509         24.3281         25.0833         24.5012
360159..................................................          1.2600          0.9820         33.1613         29.1529         28.6174         30.0448
360161..................................................          1.3687          0.8991         24.3792         25.4433         27.0875         25.6058
360163..................................................          1.9109          0.9661         26.9728         28.9742         30.0724         28.6652
360170..................................................          1.3064          1.0024         24.3620         28.5474         29.5954         27.6590
360172..................................................          1.3789          0.9345         26.3501         27.5669         28.8283         27.5900
360174..................................................          1.2823          0.9278         24.9990         26.8586         28.3143         26.7384
360175..................................................          1.2416          0.9820         26.5949         28.1531         28.3054         27.6959
360177..................................................          1.1565               *         24.4712               *               *         24.4712
360179..................................................          1.5935          0.9661         28.8645         30.0311         29.8299         29.5974
360180..................................................          2.2518          0.9345         26.1514         29.6633         31.4342         29.1126
360185..................................................          1.1985          0.8697         23.7173         25.6800         26.1080         25.1949
360187..................................................          1.5390          0.9278         24.8173         24.9353         25.7600         25.1883
360189..................................................          1.1090          1.0024         24.2136         26.3756         27.5097         26.0254
360192..................................................          1.2911          0.9345         26.7577         26.4616         27.5991         26.9459
360195..................................................          1.0872          0.9345         26.1281         25.0922         27.6155         26.2467
360197..................................................          1.1402          0.9820         27.0896         28.7580         28.9207         28.2672
360203..................................................          1.2426          0.8696         22.1414         24.4433         25.3692         24.0014
360210..................................................          1.1670          1.0024         27.8415         28.2976         29.6476         28.6031
360211..................................................          1.5603          0.8696         22.5449         25.7053         26.5459         24.7616
360212..................................................          1.3242          0.9345         25.2756         25.6080         26.6976         25.8756
360218..................................................          1.1993          1.0024         27.4288         29.8662         30.0101         29.0792
360230..................................................          1.5553          0.9345         27.0223         28.8018         30.0661         28.6838
360234..................................................          1.3345          0.9661         24.3625         25.9360         31.0656         27.0903
360236..................................................          1.2595          0.9661         35.8143         25.6728         29.5321         29.3317
360239..................................................          1.3150          0.9278         25.2474         27.2939         30.7728         27.7368
360241..................................................             ***               *         24.7001         23.0662         25.7290         24.4912
360242..................................................          1.8984               *               *               *               *               *
360245..................................................          0.5514          0.9215         19.1884         20.6504         20.3426         20.0855
360247..................................................          0.3793          1.0024         19.8891         19.3677               *         19.6148
360253..................................................          2.4475          0.9661         30.4276         33.2371         34.3347         32.7151
360259..................................................          1.2997          0.9268         25.1338         25.9878         27.2902         26.1980
360260..................................................             ***               *         27.3903               *               *         27.3903
360261..................................................          1.3966          0.8878         22.5431         22.3614         25.6332         23.5172
360262..................................................          1.3198          0.9268         27.1680         28.6995         30.1559         28.7640
360263..................................................          1.8173          0.9307         20.8884         25.1652         25.4864         23.9919
360264..................................................             ***               *               *         36.0754               *         36.0754
360265..................................................             ***               *               *         36.6265               *         36.6265
360266..................................................          2.1283          1.0024               *               *         31.7565         31.7565
360267..................................................             ***               *               *               *         34.0936         34.0936
360268..................................................             ***               *               *               *         34.0526         34.0526
360269..................................................          1.7379          0.9661               *               *         24.8552         24.8552
360270..................................................          1.1031          0.8696               *               *               *               *
360271..................................................          1.4810          0.9661               *               *               *               *
360273..................................................          1.6114          0.8696               *               *               *               *
370001..................................................          1.6338          0.8498         27.7245         26.0194         26.8884         26.8557
370002..................................................          1.2199          0.7701         20.1479         22.0476         23.6886         21.9874
370004..................................................          1.1264          0.8966         25.3919         26.7434         26.8521         26.3099
370006..................................................          1.2636          0.8498         20.1063         22.4802         23.9935         22.1050

[[Page 47478]]

 
370007..................................................          1.0754          0.7701         17.6547         19.4036         20.3706         19.1471
370008..................................................          1.4650          0.8754         24.2978         25.3352         26.6563         25.4723
370011..................................................          0.9793          0.8754         19.7821         21.9649         22.3391         21.3305
370013..................................................          1.5642          0.8754         24.9294         26.5364         27.2667         26.2291
370014..................................................          1.0076          0.8530         25.3576         25.9393         26.4488         25.9310
370015..................................................          1.0126          0.8498         23.6694         24.7547         25.5815         24.6941
370016..................................................          1.6363          0.8754         25.4062         26.7938         29.8284         27.2551
370018..................................................          1.5056          0.8498         23.5336         25.3573         24.6868         24.5173
370019..................................................          1.2501          0.7701         21.4474         22.0221         25.2814         22.9584
370020..................................................          1.3498          0.7701         18.5046         20.8723         22.7566         20.7450
370022..................................................          1.2123          0.8070         19.6495         24.6099         22.2289         22.0698
370023..................................................          1.3515          0.7791         21.5762         23.5170         24.0376         23.0619
370025..................................................          1.2921          0.8498         23.5659         23.9873         24.5547         24.0384
370026..................................................          1.4287          0.8754         23.0848         25.8428         25.5172         24.8223
370028..................................................          1.8823          0.8754         26.6153         27.8621         28.5619         27.6912
370029..................................................          1.1357          0.7701         23.9956         26.8508         28.5309         26.4597
370030..................................................          1.0197          0.7701         23.3037         24.1483         25.8212         24.4359
370032..................................................          1.4561          0.8754         23.4843         24.8626         26.2642         24.8567
370034..................................................          1.2239          0.7701         18.2341         19.5099         20.4106         19.4059
370036..................................................          1.1140          0.7701         17.7575         19.2318         19.8162         18.9477
370037..................................................          1.6244          0.8754         23.9685         24.9553         25.2350         24.7549
370039..................................................          1.0453          0.8498         21.8220         23.0254         23.5745         22.8102
370040..................................................          0.9665          0.8052         22.4048         22.8356         26.7395         23.9163
370041..................................................          0.8802          0.8498         22.3496         22.6731         22.9834         22.6703
370047..................................................          1.3852          0.8754         20.4657         24.1991         24.4766         23.0667
370048..................................................          1.0400          0.7701         19.2464         21.4543         22.0627         20.9190
370049..................................................          1.3123          0.8754         23.2171         23.8844         22.8755         23.3164
370051..................................................          1.0605          0.7701         17.2618         19.8329         19.3222         18.8243
370054..................................................          1.2315          0.7701         21.5044         22.4652         25.2142         22.9829
370056..................................................          1.8623          0.8405         22.0312         24.3986         25.5453         23.9751
370057..................................................          0.9775          0.8498         19.7284         19.8683         22.1337         20.5343
370060..................................................          0.9969          0.8498         18.7592         19.9025         23.3858         20.5027
370064..................................................          0.8912               *         14.2053               *               *         14.2053
370065..................................................          1.0064          0.7797         20.0227         21.2343         23.5815         21.6452
370072..................................................          0.8046          0.7959          9.9615         11.7942         13.0963         11.6675
370078..................................................          1.5643          0.8498         25.4068         27.8611         26.6972         26.6522
370080..................................................          0.8711          0.7701         18.0665         19.9595         22.4113         20.0969
370083..................................................          0.8983          0.7752         16.8836         19.2568         20.9878         18.9428
370084..................................................          1.0004          0.7701         16.6513         19.6230         20.7326         19.1537
370089..................................................          1.3096          0.7701         20.4699         20.6153         22.1523         21.0638
370091..................................................          1.5772          0.8498         23.3357         24.1438         25.8697         24.4379
370093..................................................          1.6183          0.8754         26.9774         26.0459         27.5356         26.8504
370094..................................................          1.4254          0.8754         23.1191         24.5555         26.5265         24.7232
370097..................................................          1.3201          0.8405         22.3267         26.3168         26.8138         25.2293
370099..................................................          1.0702          0.7701         20.5075         24.9971         26.7206         23.9187
370100..................................................          0.9272          0.7801         14.7711         17.9732         19.4002         17.4574
370103..................................................          1.0057          0.7701         17.8018         18.8933         19.4273         18.7246
370105..................................................          1.9411          0.8754         23.8978         26.7973         26.6399         25.9002
370106..................................................          1.4001          0.8754         26.5867         27.8979         28.5957         27.7400
370112..................................................          0.9493          0.8052         15.4471         16.0592         16.7888         16.1378
370113..................................................          1.1439          0.8714         25.3565         26.9720         26.4608         26.2282
370114..................................................          1.5812          0.8498         21.7880         23.0006         25.9841         23.5722
370123..................................................             ***               *         25.4733               *               *         25.4733
370125..................................................             ***               *         17.1361               *               *         17.1361
370138..................................................          1.0409          0.7701         18.3113         20.2528         22.1675         20.1246
370139..................................................          0.9462          0.7701         18.5226         19.4287         20.5156         19.5063
370148..................................................          1.5466          0.8754         25.2348         27.0904         28.1933         26.9006
370149..................................................          1.2410          0.8754         22.3537         23.3493         23.3423         23.0330
370153..................................................          1.1460          0.7701         19.8349         23.2778         24.1667         22.4460
370156..................................................          1.0006          0.7822         19.4743         25.2562         23.0104         22.5304
370158..................................................          0.9453          0.8754         18.5578         20.7641         21.5228         20.2578
370166..................................................          0.8431          0.8498         23.1682         25.1107         24.7251         24.3434
370169..................................................          0.8651          0.7864         15.8002         16.8252         16.6752         16.4258
370170..................................................          0.9138          1.4400               *               *               *               *
370171..................................................          0.8794          1.4400               *               *               *               *
370172..................................................          0.8574          1.4658               *               *               *               *
370173..................................................          0.9221          1.4400               *               *               *               *

[[Page 47479]]

 
370174..................................................          0.7942          1.4400               *               *               *               *
370176..................................................          1.2163          0.8498         25.0509         24.7655         24.9650         24.9272
370177..................................................             ***               *         14.7193               *               *         14.7193
370178..................................................          0.8848          0.7701         14.6070         16.0179         16.0747         15.5714
370179..................................................          0.8038               *         23.5794               *               *         23.5794
370180..................................................          1.0048          1.4400               *               *               *               *
370183..................................................          0.9349          0.8498         21.8147         24.7103         23.8419         23.4256
370190..................................................          1.4244          0.8498         33.1137         29.1568         34.6942         32.5212
370192..................................................          1.9787          0.8754         31.4930         27.6367         19.0638         24.5971
370196..................................................             ***               *         22.6824         22.3498         20.8296         21.9384
370199..................................................          0.7713          0.8754         26.0450         23.3989         23.7412         24.3357
370200..................................................          1.0462          0.7701         17.6317         20.5175         21.7153         19.8071
370201..................................................          1.6809          0.8754         23.3550         23.8090         24.2364         23.7986
370202..................................................          1.4316          0.8498         25.1181         26.1132         25.7966         25.6803
370203..................................................          2.0618          0.8754         23.5190         22.8869         25.7770         24.0068
370206..................................................          1.5795          0.8754         26.0912         26.0353         27.5752         26.5860
370210..................................................          2.1527          0.8498         21.2682         23.3786         27.2111         23.9630
370211..................................................          1.0812          0.8754         26.5345         27.8737         28.6537         27.7381
370212..................................................          1.7251          0.8754         21.0758         19.1720         20.3495         20.1565
370213..................................................             ***               *         29.3777               *               *         29.3777
370214..................................................          0.9301          0.7822               *         20.6217         21.0732         20.8619
370215..................................................          2.4407          0.8754         32.3589         31.5652         32.4087         32.1115
370216..................................................          2.0115          0.8498               *         27.2429         25.8260         26.4854
370217..................................................             ***               *               *         26.8677               *         26.8677
370218..................................................          2.3278          0.8498               *               *         30.3445         30.3445
370220..................................................          1.9660          0.8754               *               *               *               *
370222..................................................          1.8271          0.8754               *               *               *               *
370223..................................................          0.8903          0.8754               *               *               *               *
370224..................................................          1.0183          0.8754               *               *               *               *
370225..................................................          1.6928          0.8754               *               *               *               *
380001..................................................          1.3077          1.1226         30.0103         29.5842         32.0770         30.5857
380002..................................................          1.2470          0.9957         27.1861         30.3385         31.5246         29.7051
380004..................................................          1.7238          1.1226         30.5172         32.6901         34.5432         32.6120
380005..................................................          1.4137          1.0297         30.2210         30.9087         33.2849         31.5054
380007..................................................          2.0505          1.1226         33.9969         33.9601         35.1697         34.3879
380008..................................................             ***               *         25.8356               *               *         25.8356
380009..................................................          2.0476          1.1226         31.7042         32.4016         34.5635         32.8913
380010..................................................             ***               *         30.2957         34.4208               *         32.1520
380014..................................................          1.9251          1.0701         29.9648         33.6078         33.1928         32.2201
380017..................................................          1.8286          1.1226         32.2447         34.2605         35.3734         33.9502
380018..................................................          1.9115          1.0297         28.0701         30.9923         31.8181         30.3581
380020..................................................          1.4164          1.1002         28.3563         29.6053         34.6183         30.5329
380021..................................................          1.4801          1.1226         29.3295         29.2164         32.6142         30.3295
380022..................................................          1.3408          1.0315         29.2642         30.1742         29.6224         29.6961
380023..................................................          1.1613               *         26.5439               *               *         26.5439
380025..................................................          1.2143          1.1226         33.2105         35.5084         36.4910         35.1206
380027..................................................          1.2897          1.0707         25.5161         26.4982         28.0247         26.6752
380029..................................................          1.2690          1.0472         26.9967         28.7994         29.4461         28.4964
380033..................................................          1.7458          1.1002         30.8767         33.4828         34.0094         32.8334
380037..................................................          1.3197          1.1226         30.5818         32.4033         32.7922         31.9693
380038..................................................          1.3171          1.1226         34.2303         34.5971         35.1105         34.6431
380039..................................................             ***               *         32.3959         38.0989               *         34.9720
380040..................................................          1.4156          0.9957         32.0103         31.2286         32.9081         32.0782
380047..................................................          1.8756          1.0586         29.8627         31.0584         32.8188         31.2891
380050..................................................          1.4599          1.0146         25.6190         27.1814         29.7329         27.5476
380051..................................................          1.6409          1.0472         29.7219         30.8891         32.8545         31.1841
380052..................................................          1.2947          0.9957         24.9476         25.6085         28.6119         26.2866
380056..................................................          1.1310          1.0472         25.1475         27.7253         29.1686         27.4847
380060..................................................          1.4620          1.1226         30.7041         32.0101         33.8863         32.2260
380061..................................................          1.6742          1.1226         29.8217         32.3699         34.5230         32.2744
380071..................................................          1.3152          1.1226         30.2304         31.7761         31.0901         31.0382
380075..................................................          1.3436          1.0297         29.0368         33.8962         31.6884         31.4882
380081..................................................          0.6765               *         21.8850         26.8149               *         24.3121
380082..................................................          1.2709          1.1226         32.3002         35.6708         35.7821         34.6175
380089..................................................          1.3136          1.1226         33.4214         34.6015         35.4850         34.5152
380090..................................................          1.3036          1.0707         34.4536         33.0990         35.5535         34.3715
380091..................................................          1.3645          1.1226         33.8950         39.9703         40.5066         38.1384

[[Page 47480]]

 
380100..................................................          1.6492          1.1226               *               *               *               *
390001..................................................          1.5887          0.8357         22.5309         23.6075         24.3251         23.4964
390002..................................................          1.2797          0.8390         22.4388         24.7867         25.0860         24.1310
390003..................................................          1.1981          0.8357         21.6477         23.3672         24.5099         23.1723
390004..................................................          1.5748          0.9230         24.3249         24.4068         25.2424         24.6844
390006..................................................          1.9216          0.9115         25.1216         26.8581         28.6926         26.9694
390008..................................................          1.1363          0.8413         22.2680         22.8042         22.6297         22.5689
390009..................................................          1.8142          0.8503         25.5482         26.7462         26.7234         26.3594
390010..................................................          1.1864          0.8390         23.5390         24.5785         24.8196         24.2873
390011..................................................             ***               *         21.9279         21.4856         20.2291         21.2244
390012..................................................          1.2256          1.0892         28.5076         30.7542         32.4856         30.5696
390013..................................................          1.3344          0.9115         24.0044         25.0037         26.2323         25.0976
390016..................................................          1.2396          0.8697         21.9549         23.2095         24.3488         23.2187
390019..................................................          1.1020          1.0003         23.4636         24.0538         25.7515         24.3571
390022..................................................             ***               *         29.0710         30.3565         29.6308         29.6956
390023..................................................          1.2512          1.0892         31.7149         35.4452         34.7787         34.0489
390024..................................................          1.0192          1.0892         35.3960         33.5186         38.8750         35.7342
390025..................................................          0.4708          1.0892         17.2977         19.1362         20.3878         18.9809
390026..................................................          1.2143          1.0892         29.5157         31.8512         31.8309         31.0660
390027..................................................          1.7300          1.0892         35.8381         35.5692         39.2158         36.9328
390028..................................................          1.6327          0.8390         25.7246         27.1869         27.1451         26.6794
390030..................................................          1.1561          1.0003         22.1581         23.6063         24.6343         23.4873
390031..................................................          1.2251          0.9413         22.6828         26.2654         27.2033         25.3410
390032..................................................          1.2846          0.8390         22.7205         23.9466         24.5243         23.7229
390035..................................................          1.1521          1.0892         26.2647         28.4564         29.5417         28.1290
390036..................................................          1.4349          0.8390         24.6032         21.6358         24.4917         23.5130
390037..................................................          1.4058          0.8390         24.7820         25.4290         25.2296         25.1464
390039..................................................          1.1400          0.8357         20.3787         22.0208         23.2300         21.8622
390041..................................................          1.2825          0.8390         21.5925         22.9814         24.2257         22.9573
390042..................................................          1.3541          0.8390         25.6328         28.3633         28.0996         27.3605
390043..................................................          1.2010          0.8357         22.2549         23.2378         24.2087         23.2256
390044..................................................          1.6735          1.0765         27.1505         28.7758         29.4057         28.4751
390045..................................................          1.5824          0.8357         23.0712         23.9343         24.6495         23.8980
390046..................................................          1.6539          0.9650         27.2630         29.6574         30.5115         29.1858
390048..................................................          1.0779          0.9115         24.9759         28.5342         28.3152         27.3378
390049..................................................          1.5927          1.0003         27.1366         29.6121         30.7431         29.2428
390050..................................................          2.0709          0.8390         26.6931         27.2599         27.3481         27.1028
390052..................................................          1.1795          0.8401         23.3474         24.9510         25.1462         24.4784
390054..................................................             ***               *         22.8087         24.4435         27.4805         24.7389
390055..................................................             ***               *         25.6945               *               *         25.6945
390056..................................................          1.0637          0.8357         19.5537         23.5077         23.5821         22.1218
390057..................................................          1.3198          1.0892         27.9583         29.7982         30.9198         29.6016
390058..................................................          1.3192          0.9230         27.4799         26.9546         27.7296         27.3846
390061..................................................          1.4184          0.9650         28.4538         29.1318         30.0597         29.1859
390062..................................................          1.1289          0.8357         21.4051         21.2999         21.0713         21.2584
390063..................................................          1.8024          0.8503         24.7614         26.4998         26.8381         26.0655
390065..................................................          1.2588          1.0030         25.2188         27.6249         29.5654         27.4345
390066..................................................          1.4275          0.9115         24.2087         25.9645         25.4407         25.2125
390067..................................................          1.8076          0.9230         26.3287         29.7234         30.6128         28.8546
390068..................................................          1.3348          0.9650         25.8291         26.7358         29.0962         27.1397
390070..................................................          1.4189          1.0892         30.9500         33.3185         34.4935         32.9335
390071..................................................          1.0314          0.8357         21.8367         24.6462         24.8467         23.7238
390072..................................................          1.0757          0.8357         24.9389         25.3029         26.2568         25.5026
390073..................................................          1.7402          0.8357         26.3698         25.7822         26.4083         26.2016
390074..................................................             ***               *         22.8545         23.6500         25.4098         23.9494
390075..................................................             ***               *         24.6359               *               *         24.6359
390076..................................................          1.3948          1.0892         27.9004         31.8500         32.7671         30.8676
390079..................................................          1.8369          0.8775         23.3053         22.5607         24.4452         23.4348
390080..................................................          1.3297          1.0892         27.2616         28.7063         29.2645         28.4490
390081..................................................          1.2608          1.0892         30.3840         31.7569         33.6247         31.9442
390084..................................................          1.0972          0.8357         19.8606         23.2039         24.3372         22.4576
390086..................................................          1.6555          0.8357         22.5317         23.5141         25.0992         23.7478
390090..................................................          1.9867          0.8390         25.2014         27.3528         27.0122         26.5229
390091..................................................          1.1445          0.8697         21.5586         21.7010         23.3562         22.1985
390093..................................................          1.1573          0.8390         21.4401         22.6082         22.6023         22.2276
390095..................................................          1.1958          0.8357         23.6240         22.6150         24.6290         23.6292
390096..................................................          1.5985          1.0765         27.0763         28.8258         28.6055         28.1718

[[Page 47481]]

 
390097..................................................          1.2460          1.0892         25.6660         26.1741         27.9858         26.5902
390100..................................................          1.7084          0.9650         27.7208         30.0132         30.0234         29.3208
390101..................................................          1.2968          0.9425         21.9418         23.1497         24.8377         23.3533
390102..................................................          1.4439          0.8390         24.8898         24.8369         24.4589         24.7141
390103..................................................          0.8439          0.8390         20.6775         20.5741         20.4446         20.5656
390104..................................................          1.0867          0.8357         19.6428         19.2326         19.6630         19.5084
390107..................................................          1.5235          0.8390         24.1386         24.1159         24.6565         24.3172
390108..................................................          1.2286          1.0892         27.2661         27.8171         28.5928         27.9029
390109..................................................          1.1558               *         19.9156               *               *         19.9156
390110..................................................          1.6017          0.8390         23.9808         27.7311         25.3407         25.6183
390111..................................................          2.1688          1.0892         32.6510         34.2990         34.8756         33.9665
390112..................................................          1.2270          0.8357         19.2126         20.2380         21.5439         20.3238
390113..................................................          1.2914          0.8697         22.2591         23.3686         24.2593         23.3085
390114..................................................          1.5658          0.8390         24.0473         26.9620         27.9184         26.3018
390115..................................................          1.4567          1.0892         27.7333         29.6905         30.8063         29.4311
390116..................................................          1.2415          1.0892         30.2722         32.2513         33.2562         31.9776
390117..................................................          1.1678          0.8357         20.3946         20.7821         21.5038         20.9016
390118..................................................          1.1721          0.8357         21.5001         20.5614         21.8917         21.3378
390119..................................................          1.3034          0.8357         22.2746         23.0928         24.3245         23.2322
390121..................................................             ***               *         23.1408         25.4826               *         24.2748
390122..................................................          1.0755          0.8407         22.5786         23.1866         23.3220         23.0325
390123..................................................          1.1927          1.0892         28.6269         32.4528         34.0062         31.6506
390125..................................................          1.2633          0.8357         20.9456         22.4033         22.8816         22.0906
390127..................................................          1.3311          1.0892         30.9374         31.9091         33.6557         32.1824
390128..................................................          1.2534          0.8390         23.1539         24.1628         24.1390         23.8230
390130..................................................          1.2885          0.8357         24.0685         23.0592         23.2504         23.4713
390131..................................................          1.3317          0.8390         22.6306         23.0577         23.5783         23.1078
390132..................................................          1.4484          1.0892         27.7250         29.6396         31.1168         29.5034
390133..................................................          1.7272          1.0765         28.7162         31.1083         32.9812         31.0147
390135..................................................             ***               *         24.4738               *               *         24.4738
390136..................................................             ***               *         22.1415         23.9813               *         23.0891
390137..................................................          1.4885          0.8357         23.4877         24.2878         26.1457         24.6489
390138..................................................          1.1933          0.9115         24.2769         25.3410         27.4231         25.7128
390139..................................................          1.3716          1.0892         30.4246         34.1447         34.0836         32.9187
390142..................................................          1.5243          1.0892         32.5786         33.8224         34.5773         33.7222
390145..................................................          1.5357          0.8390         23.8041         24.6672         25.6980         24.7299
390146..................................................          1.2173          0.8377         25.2460         22.6752         25.1805         24.3872
390147..................................................          1.3581          0.8390         25.0971         26.8522         28.6606         26.8148
390150..................................................          1.1275          0.8379         24.1855         22.8228         22.7668         23.2856
390151..................................................          1.3563          1.1016         27.1539         29.9254         31.4067         29.5927
390153..................................................          1.3460          1.0892         30.0585         32.8234         33.2427         32.1641
390154..................................................          1.2246          0.8357         20.6982         22.8391         23.3559         22.2880
390156..................................................          1.3798          1.0892         31.2571         32.2688         32.8999         32.1222
390157..................................................          1.2696          0.8390         22.7493         21.5923         22.1112         22.1491
390160..................................................          1.2522          0.8390         21.4877         24.0208         22.9696         22.8166
390162..................................................          1.4950          1.1570         30.0900         35.5057         34.5809         33.2587
390163..................................................          1.2334          0.8390         22.1741         23.2055         22.8341         22.7283
390164..................................................          2.1784          0.8390         26.4971         26.3087         27.1950         26.6937
390166..................................................          1.1701          0.8390         24.9810         20.9272         23.3255         23.1378
390168..................................................          1.5193          0.8390         24.5820         26.1365         26.9816         25.9249
390169..................................................          1.4279          0.8357         27.2242         26.5514         26.2643         26.6875
390173..................................................          1.1827          0.8357         22.8220         23.9927         25.6455         24.1670
390174..................................................          1.7008          1.0892         32.6265         34.2069         34.8999         33.9342
390176..................................................          1.0494          0.8390               *         23.9779         24.1247         24.0545
390178..................................................          1.3615          0.8991         20.7270         22.6006         23.1452         22.1438
390179..................................................          1.4427          1.0892         27.2222         28.0688         30.1219         28.5194
390180..................................................          1.4067          1.0892         32.4375         34.9832         35.5291         34.3065
390181..................................................          1.1036          0.8641         24.4573         25.9871         26.6021         25.6300
390183..................................................          1.1415          0.8357         25.6554         27.0122         27.8358         26.8139
390184..................................................          1.1037          0.8390         22.5519         22.7451         23.9736         23.0652
390185..................................................          1.2675          0.8357         23.0202         25.4256         27.1119         25.2267
390189..................................................          1.1565          0.8357         22.3722         22.6796         23.6215         22.9388
390191..................................................          1.1480               *         20.8761               *               *         20.8761
390192..................................................          0.9882          0.8357         21.2619         20.5459         23.6171         21.8230
390193..................................................             ***               *         20.1024               *               *         20.1024
390194..................................................          1.1194          1.0003         25.4235         27.5890         26.3152         26.4435
390195..................................................          1.6293          1.0892         31.0019         34.2980         34.5594         33.3475

[[Page 47482]]

 
390196..................................................          1.6590               *               *               *               *               *
390197..................................................          1.3808          1.0003         25.7739         26.8270         27.2455         26.6103
390198..................................................          1.0933          0.8503         18.7222         20.5979         20.4350         19.9087
390199..................................................          1.1701          0.8357         21.3157         22.3224         23.0046         22.2038
390200..................................................             ***               *         23.7471               *               *         23.7471
390201..................................................          1.3003          0.8357         26.3658         27.0054         27.3542         26.9245
390203..................................................          1.6204          1.0892         28.9054         29.4930         29.1370         29.1781
390204..................................................          1.3007          1.0892         28.6829         29.5251         30.7346         29.6944
390211..................................................          1.2565          0.8991         23.1450         25.1689         26.5052         24.9533
390215..................................................             ***               *         28.0403               *               *         28.0403
390217..................................................          1.2433          0.8390         24.3610         23.5879         24.1886         24.0513
390219..................................................          1.3175          0.8390         25.1705         25.4886         26.1196         25.5763
390220..................................................          1.1218          1.0892         41.6138         28.9128         30.7435         32.7176
390222..................................................          1.2954          1.0892         28.7488         30.9464         31.7361         30.5072
390223..................................................          2.0325          1.0892         27.6407         30.2523         34.3280         30.7325
390224..................................................             ***               *         18.7624               *               *         18.7624
390225..................................................          1.2242          0.9650         24.9391         27.5803         27.2555         26.6147
390226..................................................          1.7798          1.0892         28.5890         32.6658         32.6508         31.2960
390228..................................................          1.3965          0.8390         23.3078         23.9845         24.2242         23.8474
390231..................................................          1.4031          1.0892         29.2653         30.9339         32.8353         30.9985
390233..................................................          1.3802          0.9425         24.8690         25.6904         27.2597         25.9607
390236..................................................          0.9660          0.8364         21.9169         22.1144         23.1290         22.3771
390237..................................................          1.6164          0.8357         26.9533         27.4944         28.4337         27.5819
390246..................................................          1.1272          0.8357         20.1581         25.1956         26.0179         23.4882
390256..................................................          1.9087          0.9230         26.3619         28.0617         28.8970         27.8209
390258..................................................          1.5082          1.0892         29.4626         30.4142         31.7164         30.6076
390263..................................................          1.5401          1.0003         26.0170         28.5864         29.9850         28.3002
390265..................................................          1.5075          0.8390         23.4836         24.0675         25.0166         24.2007
390266..................................................          1.1586          0.8991         20.3918         20.8789         22.2228         21.1792
390267..................................................          1.2789          0.8390         23.1051         24.2428         24.8309         24.0577
390268..................................................          1.3894          0.8619         25.0021         25.6643         26.7342         25.8430
390270..................................................          1.6238          0.8357         24.1496         24.9510         26.5010         25.2638
390272..................................................          0.5343          1.0892               *               *               *               *
390278..................................................          0.5326          1.0892         23.6843         26.6664         28.6323         26.3012
390279..................................................             ***               *         17.0012               *               *         17.0012
390285..................................................          1.4953          1.0892         35.0426         36.7163         37.6669         36.3991
390286..................................................          1.1875          1.0892         28.1761         29.5281         31.3393         29.6278
390287..................................................             ***               *         37.6569         39.3176         42.2401         39.3146
390288..................................................             ***               *         29.7287         30.9701               *         30.3388
390289..................................................             ***               *         28.8826         30.7583               *         29.8023
390290..................................................          1.8423          1.0892         37.9040         38.3776         41.1426         39.1287
390301..................................................             ***               *         30.9836               *               *         30.9836
390302..................................................          2.0384          1.0892               *               *               *               *
390303..................................................             ***               *               *         27.5580               *         27.5580
390304..................................................          1.2278          1.0892               *         30.4832         32.1633         31.3748
390305..................................................             ***               *               *               *         29.3217         29.3217
390306..................................................             ***               *               *               *         40.3789         40.3789
390307..................................................          1.9734          0.8991               *               *         24.5393         24.5393
390308..................................................             ***               *               *               *         36.1737         36.1737
390309..................................................             ***               *               *               *         37.8924         37.8924
390310..................................................             ***               *               *               *         44.3991         44.3991
390311..................................................          2.0736          1.0892               *               *               *               *
390312..................................................          1.1657          1.0892               *               *               *               *
390313..................................................          1.1458          0.9413               *               *               *               *
400001..................................................          1.2874          0.4526         13.1847         13.9386         14.9151         14.0372
400002..................................................          1.8558          0.4262         16.7582         15.3833         12.9440         14.8789
400003..................................................          1.3831          0.4262         12.8329         13.9258         15.7906         14.1890
400004..................................................          1.2271          0.4526         14.3108         12.0923         12.5928         12.8941
400005..................................................          1.1236          0.4526         10.7207         10.3505         11.1152         10.7266
400006..................................................          1.1844          0.4526          9.2265          8.1841          8.1381          8.5089
400007..................................................          1.2015          0.4526          9.2463         11.8203         12.0743         11.0862
400009..................................................          1.0128          0.2944          9.3116          9.3834          9.5114          9.4053
400010..................................................          0.9325          0.3345         10.0962          9.8132         10.7993         10.2160
400011..................................................          1.0606          0.4526          8.5534          9.6641          8.5503          8.9391
400012..................................................          1.4705          0.4526          8.3802         12.3362         10.1156         10.1141
400013..................................................          1.2469          0.4526         10.3347         11.1414         11.4222         10.9912
400014..................................................          1.3700          0.3657         12.2169         10.5286          9.9395         10.8301

[[Page 47483]]

 
400015..................................................          1.3221          0.4526         15.6349         13.7043         22.2017         17.0466
400016..................................................          1.3958          0.4526         14.7607         16.6472         16.1931         15.8694
400017..................................................          0.9861          0.4526         10.2734         10.3123          9.9185         10.1744
400018..................................................          1.1688          0.4526         11.6165         11.9184         12.3942         11.9804
400019..................................................          1.4371          0.4526         12.8029         12.8380         14.7133         13.3474
400021..................................................          1.4337          0.4603         14.1534         14.4549         13.9217         14.1634
400022..................................................          1.4167          0.4262         15.9246         14.9089         15.3625         15.3797
400024..................................................          0.8912          0.3657         12.4648         10.8439         12.6226         11.9953
400026..................................................          1.0823          0.2944          5.8200          9.9262          7.1179          7.2042
400028..................................................          1.0970          0.4262         10.9808         11.3260         10.6711         10.9928
400032..................................................          1.1389          0.4526         10.2652         10.3736         10.7141         10.4546
400044..................................................          1.2868          0.4262         13.7509         14.6420         11.3551         13.0226
400048..................................................          1.1723          0.4526         10.4266          9.6416          9.6860          9.9022
400061..................................................          1.9960          0.4526         18.9123         18.1303         18.0093         18.3233
400079..................................................          1.2424          0.3345         12.7825          9.5296         10.4599         10.7211
400087..................................................          1.2021          0.4526         10.6849         11.0377         11.4162         11.0323
400098..................................................          1.3680          0.4526         12.8230         13.8034         13.7878         13.3737
400102..................................................          1.3126          0.4526         10.2677         10.5879         12.1761         10.9324
400103..................................................          1.7531          0.3657          9.3859         10.6971         11.7488         10.5156
400104..................................................          1.1987          0.4526          9.3854         11.4322         12.8404         11.2161
400105..................................................          1.1555          0.4526         14.0219         15.6626         16.9029         15.5351
400106..................................................          1.1103          0.4526         11.4507         13.4097         12.9272         12.5586
400109..................................................          1.4443          0.4526         14.2111         14.4386         14.8208         14.4938
400110..................................................          1.2255          0.3200         12.3449         11.1812          9.9278         11.1280
400111..................................................          1.1556          0.3345         14.5029         14.1718         10.2141         12.6681
400112..................................................          1.2246          0.4526         19.3945         10.1512         13.5177         13.3103
400113..................................................          1.2963          0.4262          9.6778         10.5305         10.9503         10.3752
400114..................................................          1.1415          0.4526         11.5478         10.1379         10.8913         10.8234
400115..................................................          1.0288          0.4526         13.7392         12.0713          9.6200         11.5296
400117..................................................          1.1103          0.4526         12.7600          9.5929         11.6258         11.1092
400118..................................................          1.2476          0.4526         12.5743         12.8692         12.7861         12.7465
400120..................................................          1.3549          0.4526         12.7955         13.4069         14.0817         13.4544
400121..................................................          1.0490          0.4526          8.2197          9.7427          9.1826          9.0004
400122..................................................          1.9051          0.4526         11.2324          8.9478          9.5814         10.3491
400123..................................................          1.2168          0.3657         12.3041         12.8317         12.5609         12.5625
400124..................................................          2.7715          0.4526         16.1812         17.2139         17.9140         17.1104
400125..................................................          1.2089          0.4365         11.6386         11.9787         13.5394         12.3736
400126..................................................          1.2018          0.4603          9.8008         14.1062         16.5726         12.5522
400127..................................................          1.7702          0.4526               *         17.8303         20.7775         19.5304
400128..................................................          1.0772          0.4526               *               *         12.3520         12.3520
410001..................................................          1.3001          1.1303         28.0816         29.0877         30.0315         29.0712
410004..................................................          1.2507          1.1303         27.4209         29.4953         31.3023         29.3085
410005..................................................          1.2514          1.1303         30.1606         28.1141         31.4387         29.8829
410006..................................................          1.3446          1.0532         29.4395         30.1855         32.8456         30.8320
410007..................................................          1.6590          1.1303         31.8548         33.2896         32.0730         32.4076
410008..................................................          1.2339          1.0532         29.6092         30.9505         32.5889         31.0411
410009..................................................          1.2457          1.0532         29.4094         31.7300         32.8422         31.3631
410010..................................................          1.1816          1.1303         32.8599         32.0704         32.7379         32.5467
410011..................................................          1.3898          1.1303         30.3787         33.8781         30.1941         31.4075
410012..................................................          1.6846          1.1303         32.6009         33.6072         37.0299         34.4554
410013..................................................          1.2109          1.1732         35.4624         35.8075         41.0010         37.4278
420002..................................................          1.5892          0.9505         28.2848         29.5592         30.5111         29.4596
420004..................................................          1.9968          0.9101         27.2620         28.1455         28.9250         28.1335
420005..................................................          1.1298          0.8707         23.1943         25.0420         24.6968         24.3261
420006..................................................          1.1030          0.9101         24.0811         26.3293         27.7764         26.0571
420007..................................................          1.6204          0.9403         25.2650         26.8165         29.0901         27.0758
420009..................................................          1.3844          0.9403         25.5079         27.0147         29.9378         27.4921
420010..................................................          1.1454          0.8707         23.4562         25.1452         25.5710         24.7565
420011..................................................          1.1700          0.9636         21.4029         22.1787         25.5130         23.0432
420015..................................................          1.3564          0.9636         26.2154         24.1685         26.3499         25.5708
420016..................................................          0.9729          0.8707         17.1229         21.6266         22.5681         20.3115
420018..................................................          1.8351          0.8829         24.8024         25.6687         27.5563         26.0448
420019..................................................          1.0975          0.8865         22.5312         22.5489         25.4954         23.3967
420020..................................................          1.2783          0.9101         25.8883         28.4344         27.5000         27.2263
420023..................................................          1.6931          0.9636         26.7263         27.4589         28.9321         27.7092
420026..................................................          1.8832          0.8829         27.4814         27.8986         28.0647         27.8209
420027..................................................          1.5863          0.9403         25.1692         26.4472         28.5621         26.7375

[[Page 47484]]

 
420030..................................................          1.2459          0.9101         26.0079         27.8435         28.4433         27.4518
420033..................................................          1.1206          0.9636         31.8759         30.4162         31.1608         31.1288
420036..................................................          1.2393          0.9342         22.8294         23.8742         24.6505         23.7918
420037..................................................          1.2991          0.9636         29.4156         29.8321         30.9556         30.0757
420038..................................................          1.2506          0.9636         24.2259         24.6642         26.6435         25.1658
420039..................................................          1.1502          0.9395         25.1148         28.2220         26.5582         26.6294
420043..................................................          1.1014          0.8864         23.0555         24.0971         25.7951         24.3487
420048..................................................          1.2704          0.8829         24.1923         25.9610         26.9625         25.7393
420049..................................................          1.2503          0.8707         23.9722         26.0953         25.7060         25.2650
420051..................................................          1.6618          0.8707         24.8026         25.9056         26.4710         25.7419
420053..................................................          1.1266          0.8742         22.2825         23.2246         24.4793         23.3671
420054..................................................          1.1343          0.8707         24.8931         25.6779         25.6444         25.3992
420055..................................................          1.0788          0.8707         21.9764         24.0965         25.1738         23.7710
420056..................................................          1.3331          0.8707         21.6963         27.7250         28.4512         26.0628
420057..................................................          1.1850          0.8707         23.4312         24.9313         26.2489         24.8975
420062..................................................          1.0478          0.9342         25.9526         26.7467         25.9569         26.2263
420064..................................................          1.1878          0.8707         23.3610         24.3540         24.6507         24.1129
420065..................................................          1.4423          0.9101         24.5715         25.5483         26.8118         25.6580
420066..................................................          1.0102          0.8707         23.9049         25.1062         25.0932         24.7340
420067..................................................          1.3642          0.8890         25.0345         25.8561         26.5658         25.8410
420068..................................................          1.3736          0.9598         23.4248         25.6857         27.7315         25.6542
420069..................................................          1.1727          0.8707         20.5546         22.3445         23.7494         22.2412
420070..................................................          1.3002          0.8898         23.4355         24.7899         27.5988         25.3447
420071..................................................          1.4324          0.9403         24.9418         25.2862         27.6371         25.9946
420072..................................................          1.0648          0.8707         18.6742         17.8019         21.6587         19.2819
420073..................................................          1.3853          0.8829         24.5813         25.5204         26.1120         25.4570
420078..................................................          1.9234          0.9636         28.9112         29.5135         30.9001         29.7803
420079..................................................          1.4833          0.9101         25.4935         27.5439         28.6374         27.2418
420080..................................................          1.4399          0.8890         28.4735         28.6060         31.5670         29.4700
420082..................................................          1.5176          0.9598         29.8528         31.2671         33.9874         31.6537
420083..................................................          1.4753          0.9403         27.1322         26.4932         28.9007         27.5465
420085..................................................          1.5552          0.9156         26.8692         27.8386         29.1127         27.9342
420086..................................................          1.4543          0.8829         25.8869         28.0485         27.9523         27.3375
420087..................................................          1.8316          0.9101         24.3609         25.4697         26.8409         25.5481
420089..................................................          1.3966          0.9101         26.0074         28.1855         29.5862         27.9480
420091..................................................          1.4220          0.8707         26.9214         26.0592         27.2520         26.7465
420093..................................................             ***               *         27.4767         28.0765         33.0474         29.2458
420098..................................................          1.1886          0.8707               *         30.7532         27.1939         28.6282
420099..................................................             ***               *               *               *         30.3089         30.3089
420101..................................................          1.1325          0.8707               *               *               *               *
430005..................................................          1.2980          0.8343         22.3272         22.4111         23.8694         22.8728
430008..................................................          1.1437          0.8878         23.3790         24.4277         26.0873         24.5250
430012..................................................          1.3084          0.9373         24.0850         24.0326         25.2030         24.4262
430013..................................................          1.1850          0.9373         25.1378         25.9828         27.0427         26.0549
430014..................................................          1.4182          0.8343         26.4964         26.8752         27.9288         27.1027
430015..................................................          1.2660          0.8343         22.7947         23.6296         26.5787         24.3442
430016..................................................          1.6461          0.9553         27.8453         28.9376         32.8765         29.8590
430027..................................................          1.7908          0.9553         26.2139         26.6044         27.5759         26.8179
430031..................................................             ***               *         16.0346               *               *         16.0346
430047..................................................          1.0090               *         18.8982               *               *         18.8982
430048..................................................          1.2826          0.8472         23.0782         24.1969         25.1715         24.1632
430060..................................................          0.8255          0.8343               *         13.2618               *         13.2618
430064..................................................          1.0352          0.8343         17.5376         18.3125         16.4916         17.3487
430077..................................................          1.8125          0.8685         25.1763         25.8572         27.2116         26.0778
430081..................................................          0.8813          1.4400               *               *               *               *
430082..................................................          0.8159          1.4400               *               *               *               *
430083..................................................          0.8773          1.4400               *               *               *               *
430084..................................................          0.9191          1.4400               *               *               *               *
430085..................................................          0.8887          1.4400               *               *               *               *
430089..................................................          1.8643          0.9083         22.5625         22.3335         23.2467         22.7178
430090..................................................          1.4823          0.9553         25.8460         26.4862         29.0197         27.2002
430091..................................................          2.1535          0.8685         24.3021         25.1105         24.7274         24.7230
430092..................................................          1.8619          0.8343         20.9486         21.6478         21.9197         21.5136
430093..................................................          0.8376          0.8685         29.5244         27.5326         26.0232         27.6512
430094..................................................          1.6473          0.8472         18.9099         22.9091         23.2894         21.6362
430095..................................................          2.4536          0.9553         28.1749         31.3409         32.2326         30.5986
430096..................................................          1.8925          0.8343         21.6997         21.6713         24.6041         22.6698

[[Page 47485]]

 
440001..................................................          1.1429          0.7917         19.3100         21.2398         21.5755         20.7297
440002..................................................          1.7517          0.8963         24.6664         25.7434         26.3802         25.6181
440003..................................................          1.3286          0.9618         25.9209         28.4862         28.3557         27.6397
440006..................................................          1.5104          0.9618         28.5951         29.7146         31.5533         29.9429
440007..................................................          1.0213          0.8136         25.8236         19.9754         18.8273         20.7872
440008..................................................          1.0650          0.8435         23.4301         23.2126         27.3732         24.8411
440009..................................................          1.2235          0.7917         21.5970         23.9279         23.8148         23.1556
440010..................................................          0.9454          0.7917         17.1803         19.3669         19.6231         18.7390
440011..................................................          1.3468          0.8012         22.5068         23.6154         23.6698         23.2734
440012..................................................          1.5824          0.7917         22.3029         24.0169         23.7871         23.3709
440015..................................................          1.8744          0.8012         23.7422         25.0430         26.0601         24.9723
440016..................................................          1.0058          0.8061         22.1645         23.0350         24.5812         23.2195
440017..................................................          1.8259          0.7917         22.9364         25.0588         24.6707         24.2298
440018..................................................          1.1293          0.7917         23.3445         23.2107         25.0780         23.9426
440019..................................................          1.7495          0.8012         25.2553         25.3592         25.2230         25.2804
440020..................................................          1.0946          0.8629         23.9475         24.0995         24.7785         24.2807
440024..................................................          1.2188          0.8962         23.2717         23.9745         24.7705         24.0299
440025..................................................          1.1297          0.8603         20.6798         22.5407         22.6571         21.9869
440026..................................................          0.6838          0.9618         26.8986         28.0349         26.8153         27.2470
440029..................................................          1.3911          0.9618         28.0779         30.1204         31.2310         29.8864
440030..................................................          1.3252          0.7973         22.1217         23.7670         22.2607         22.7230
440031..................................................          1.1881          0.7936         19.6684         20.8964         22.6790         21.0762
440032..................................................          1.2202          0.7917         18.5277         19.7150         21.0380         19.7424
440033..................................................          1.0340          0.7944         20.7917         21.1087         22.7991         21.5097
440034..................................................          1.6264          0.8012         23.5403         24.6994         25.5061         24.6085
440035..................................................          1.4163          0.9364         24.3752         25.9613         26.2451         25.5505
440039..................................................          2.1878          0.9618         28.4678         29.8611         30.1790         29.5489
440040..................................................          0.9037          0.7917         17.8509         20.8637         20.8817         19.8822
440041..................................................          0.9131               *         17.9409               *               *         17.9409
440046..................................................          1.2541          0.9618         26.1341         27.9539         29.7377         27.9640
440047..................................................          0.9019          0.8255         21.4280         21.7892         22.8323         22.0491
440048..................................................          1.8393          0.9313         27.7560         29.4789         29.3187         28.8706
440049..................................................          1.6394          0.9313         25.3043         26.4772         28.8742         26.9261
440050..................................................          1.3557          0.7917         23.1363         24.4616         24.9694         24.2238
440051..................................................          0.9547          0.7999         21.9108         23.9253         23.4866         23.1295
440052..................................................          0.9967          0.7917         21.1133         22.8016         22.6128         22.1807
440053..................................................          1.2686          0.9618         25.4345         27.1197         27.8180         26.7576
440054..................................................          1.1313          0.7917         21.4400         23.5137         23.7931         22.9260
440056..................................................          1.1627          0.8012         22.1067         22.7820         23.2313         22.7147
440057..................................................          1.0901          0.7938         16.4451         16.6346         17.2176         16.7762
440058..................................................          1.1779          0.7917         22.9263         24.3522         26.0706         24.4599
440059..................................................          1.4606          0.7917         26.3551         28.3565         27.9467         27.5547
440060..................................................          1.1376          0.8435         23.3014         24.1024         25.0795         24.2308
440061..................................................          1.1227          0.7917         21.8274         23.9678         23.7360         23.1109
440063..................................................          1.5877          0.7917         22.3256         24.2566         23.9644         23.5409
440064..................................................          1.0095          0.8962         22.0955         23.7176         26.1246         23.9669
440065..................................................          1.2649          0.9618         22.3247         24.6169         25.8536         24.2955
440067..................................................          1.1060          0.7973         23.1089         24.4772         24.6553         24.0987
440068..................................................          1.1561          0.8962         24.5972         24.8146         26.1071         25.1514
440070..................................................          0.9795          0.8026         19.4372         20.0938         21.9166         20.5440
440072..................................................          1.1052          0.8963         27.1442         23.9563         25.7089         25.4880
440073..................................................          1.4690          0.9364         23.9198         26.3570         27.6154         25.9562
440081..................................................          1.1988          0.7969         19.7878         20.7125         20.7688         20.4356
440082..................................................          2.1154          0.9618         27.9724         30.6115         32.2479         30.2297
440083..................................................          0.9665          0.7917         17.3329         25.6099         23.6356         22.2415
440084..................................................          1.1850          0.7942         16.3738         18.6043         18.8699         17.9500
440091..................................................          1.7521          0.8962         25.6797         26.5687         28.1989         26.8422
440102..................................................          1.1443          0.7917         17.5261         20.7363         21.6762         19.9759
440104..................................................          1.7681          0.8962         25.3739         26.5741         27.9756         26.6322
440105..................................................          0.8903          0.7917         22.3438         22.9372         22.7962         22.6994
440109..................................................          0.9688          0.7987         18.6720         20.8924         21.4629         20.4136
440110..................................................          1.1516          0.8012         21.3287         20.9179         22.5929         21.6231
440111..................................................          1.2941          0.9618         28.5705         29.0975         28.8453         28.8380
440114..................................................             ***               *         24.0146               *               *         24.0146
440115..................................................          1.0084          0.8255         21.7830         23.1409         23.7107         22.8901
440120..................................................          1.5807          0.8012         25.5961         25.7161         24.7572         25.3531
440125..................................................          1.6030          0.8012         22.4196         22.8097         23.6328         22.9331

[[Page 47486]]

 
440130..................................................          1.1080          0.7917         23.4517         23.9955         25.1262         24.1968
440131..................................................          1.2044          0.9313         24.9599         25.6666         26.9649         25.8560
440132..................................................          1.2396          0.7917         21.5085         23.9410         24.0708         23.2170
440133..................................................          1.7123          0.9618         26.2422         29.2829         29.6093         28.3398
440135..................................................          0.9966          0.7917         26.6615         28.1925         27.7037         27.5222
440137..................................................          1.0789          0.8655         20.6663         22.2538         22.9547         21.8990
440141..................................................          0.9681          0.7917         21.3314         24.2406         24.9917         23.5753
440144..................................................          1.3047          0.9364         23.3828         23.9241         25.2293         24.2131
440145..................................................          1.0761               *         20.7875               *               *         20.7875
440147..................................................             ***               *         31.4012         33.1756         34.8199         33.1562
440148..................................................          1.1125          0.9364         24.6412         23.9810         22.6188         23.6904
440149..................................................             ***               *         20.4563               *               *         20.4563
440150..................................................          1.3915          0.9618         26.8308         28.1012         29.4381         28.1244
440151..................................................          1.1731          0.9364         23.9808         27.1729         28.2203         26.4238
440152..................................................          1.9330          0.9313         26.5513         27.1877         28.4612         27.4397
440153..................................................          1.0815          0.7924         22.2846         23.6473         24.9388         23.5617
440156..................................................          1.6487          0.8962         26.9689         27.7309         28.5645         27.7809
440159..................................................          1.5112          0.9313         22.8645         26.9098         25.8289         25.2934
440161..................................................          1.8713          0.9618         28.6971         28.7074         29.9894         29.1537
440162..................................................             ***               *         21.1418         27.6837         24.8705         24.4635
440166..................................................             ***               *         31.0779         35.3064               *         32.7296
440168..................................................          0.9656          0.9313         22.8768         28.1215         29.4028         26.9618
440173..................................................          1.4384          0.8012         22.8846         23.1167         24.0621         23.3817
440174..................................................          0.8948          0.8229         22.0974         25.4829         26.2087         24.7287
440175..................................................          1.0346          0.9364         22.7299         24.4848         24.7869         23.9712
440176..................................................          1.2755          0.7917         23.6659         22.9631         23.7695         23.4768
440180..................................................          1.2910          0.7944         23.3808         24.9841         22.3070         23.4474
440181..................................................          0.9194          0.8282         22.7151         24.8857         25.9450         24.5707
440182..................................................          0.9950          0.8061         22.3612         24.3302         25.0111         23.9834
440183..................................................          1.5965          0.9313         27.1515         29.1982         30.6599         28.9846
440184..................................................          0.9643          0.7917         22.3475         24.5786         23.3970         23.4193
440185..................................................          1.1494          0.8962         23.9052         25.3817         26.7473         25.4020
440186..................................................          0.9670          0.9618         25.7445         27.3733         28.9124         27.3831
440187..................................................          1.0855          0.7917         21.3252         24.0723         25.8238         23.7554
440189..................................................          1.3573          0.8591         27.5435         28.2621         28.8974         28.1769
440192..................................................          1.0837          0.9364         25.7495         27.3917         29.6272         27.6374
440193..................................................          1.3504          0.9618         24.4299         24.3622         25.2124         24.6713
440194..................................................          1.3046          0.9618         26.6527         29.4706         30.8593         29.1025
440197..................................................          1.3634          0.9618         27.1534         29.4275         30.1184         28.8521
440200..................................................          0.9727          0.9618         17.7491         21.1860         23.8654         20.9536
440203..................................................             ***               *         19.3864         23.7451         17.9041         20.1684
440217..................................................          1.3218          0.9313         28.5968         28.8641         29.8888         29.1071
440218..................................................          2.2001          0.9618         24.6465         23.7257         18.7275         22.2604
440222..................................................          1.0526          0.9313         29.7292         28.4664         29.0062         29.0425
440224..................................................          0.8974          0.9618               *               *               *               *
440225..................................................          0.7954          0.8012               *         24.8328         27.8860         26.2410
440226..................................................          1.5468          0.8012               *         26.5831         27.1348         26.8601
440227..................................................          1.3258          0.9618               *               *         30.7785         30.7785
440228..................................................          1.4404          0.9313               *               *         28.3687         28.3687
450002..................................................          1.4187          0.9140         25.7171         28.0936         28.8521         27.4831
450005..................................................          1.0716          0.8615         23.5576         24.4933         24.5405         24.1601
450007..................................................          1.3075          0.8895         20.7321         23.0026         23.9490         22.5725
450008..................................................          1.2921          0.8303         22.9669         24.4701         24.5965         24.0253
450010..................................................          1.6531          0.8203         23.7529         25.5503         25.5582         24.9684
450011..................................................          1.6887          0.9171         24.8831         26.7418         28.5329         26.6975
450015..................................................          1.5297          0.9785         27.4012         29.9193         29.4919         28.9240
450018..................................................          1.5190          0.9996         26.7999         30.2383         30.7852         29.2611
450020..................................................          0.9712               *         18.3047               *               *         18.3047
450021..................................................          1.8798          0.9785         29.1350         29.5658         31.3107         29.9776
450023..................................................          1.4773          0.8198         22.0558         25.4450         25.5346         24.3069
450024..................................................          1.6700          0.9140         24.4195         26.9113         28.2047         26.6001
450028..................................................          1.6124          0.9192         26.8250         29.1438         29.5792         28.4741
450029..................................................          1.6184          0.8501         23.2995         25.0602         26.9361         25.0112
450031..................................................          1.4011          0.9785         27.9626         29.0824         30.3542         29.1129
450032..................................................          1.2887          0.8551         27.0748         21.5084         25.5785         24.5163
450033..................................................          1.6328          0.9192         28.4781         29.2468         27.8680         28.5092
450034..................................................          1.5781          0.8615         24.1589         26.5313         27.6929         26.1022

[[Page 47487]]

 
450035..................................................          1.4958          0.9996         26.2838         28.0668         28.8049         27.6978
450037..................................................          1.6448          0.8871         24.2684         26.6207         28.3403         26.4155
450039..................................................          1.4616          0.9681         24.7347         26.7503         28.2081         26.5799
450040..................................................          1.8081          0.8641         24.9590         25.4734         26.8412         25.7399
450042..................................................          1.7918          0.8593         24.1181         26.6382         26.5429         25.7899
450044..................................................          1.7622          0.9785         29.4308         31.0381         29.4293         29.9718
450046..................................................          1.6190          0.8456         23.4907         24.8947         25.5903         24.6759
450047..................................................          0.8457          0.9192         19.8221         21.8824         23.8457         21.9037
450050..................................................          0.8661               *         23.3044               *               *         23.3044
450051..................................................          1.9254          0.9785         28.0411         28.8829         29.9038         28.9708
450052..................................................          0.9462          0.8198         19.7774         22.6448         23.0007         21.3928
450053..................................................          0.9303               *         21.9082               *               *         21.9082
450054..................................................          1.7997          0.8303         24.2782         27.5399         26.5599         26.0525
450055..................................................          1.0493          0.8198         22.1979         22.9245         23.6382         22.9302
450056..................................................          1.7631          0.9501         27.0530         28.3092         31.4971         28.7483
450058..................................................          1.5935          0.8895         25.9653         26.6926         26.9918         26.5548
450059..................................................          1.3109          0.9501         26.6535         26.8325         27.3856         26.9630
450064..................................................          1.4732          0.9681         23.8748         26.8355         28.2786         26.2939
450068..................................................          2.1593          0.9996         27.9633         29.5876         30.5001         29.3709
450072..................................................          1.2067          0.9996         24.0166         25.8619         27.1081         25.6939
450073..................................................          0.8859          0.8198         21.7337         26.9446         26.1567         24.8300
450076..................................................          1.6741               *               *               *               *               *
450078..................................................          0.9153          0.8198         15.8968         21.4716         20.0758         18.9517
450079..................................................          1.6341          0.9785         28.1096         30.2420         30.5968         29.6101
450080..................................................          1.2456          0.8871         22.9836         27.9191         26.2439         25.6047
450082..................................................          1.1501          0.8198         22.0442         23.9025         24.2018         23.3904
450083..................................................          1.8310          0.9181         25.8214         27.4955         32.6462         28.5964
450085..................................................          1.0612          0.8198         22.0840         24.3637         25.6440         24.0616
450087..................................................          1.4142          0.9681         29.1587         30.0095         31.2668         30.1454
450090..................................................          1.2348          0.8847         19.4245         21.3837         21.8839         20.8851
450092..................................................          1.1900          0.8198         23.2071         24.9917         26.2781         24.8586
450094..................................................             ***               *         25.2434               *               *         25.2434
450096..................................................             ***               *         24.1618         26.5103         28.1902         26.1065
450097..................................................          1.4813          0.9996         26.4965         29.0142         29.8734         28.4576
450098..................................................          0.9764               *         22.6626               *               *         22.6626
450099..................................................          1.2849          0.9151         26.6796         31.3495         31.7829         29.8766
450101..................................................          1.6850          0.8593         23.6905         25.4409         26.7457         25.2723
450102..................................................          1.7581          0.9181         24.5503         25.6318         26.4161         25.5272
450104..................................................          1.1910          0.8895         23.8469         24.6169         28.8063         25.7441
450107..................................................          1.5650          0.9140         25.9326         27.6064         27.8177         27.1285
450108..................................................          1.2022          0.8895         19.4935         21.6557         19.3245         20.1295
450113..................................................             ***               *         54.6663               *               *         54.6663
450119..................................................          1.3059          0.9135         25.7008         27.8027         31.1026         28.0194
450121..................................................             ***               *         25.7051         29.1296         27.7472         27.5367
450123..................................................          1.2261          0.8615         21.2154         24.9674         26.2469         24.0865
450124..................................................          1.8807          0.9501         27.4198         28.2571         30.9140         28.8720
450126..................................................          1.3811          0.9996         28.3032         29.3768         30.5540         29.4686
450128..................................................          1.2606          0.9135         23.3633         25.1122         26.3296         24.9399
450130..................................................          1.1622          0.8895         21.5226         24.3295         24.3842         23.4132
450131..................................................             ***               *         23.7098         25.9494               *         24.6979
450132..................................................          1.5736          0.9954         28.6954         30.1620         31.9981         30.2616
450133..................................................          1.5644          0.9711         26.8344         28.4647         30.0648         28.4860
450135..................................................          1.7036          0.9681         26.0755         27.8983         30.1385         28.0791
450137..................................................          1.7309          0.9681         30.4254         31.4950         31.9644         31.3195
450143..................................................          0.9924          0.9501         21.8705         23.4592         23.6834         23.0250
450144..................................................          1.0795          0.8757         21.3289         26.2881         29.2987         25.2285
450147..................................................          1.5055          0.8198         23.9771         24.3562         24.7221         24.3818
450148..................................................          1.2593          0.9681         25.3498         27.0894         29.6777         27.2884
450151..................................................             ***               *         22.2915         23.9558         26.2011         24.2451
450152..................................................          1.2222          0.8303         22.7463         23.3428         23.1056         23.0676
450154..................................................          1.3964          0.8198         21.2021         21.7237         22.9357         21.9527
450155..................................................          1.1128          0.8198         18.0588         21.7604         24.8052         21.2762
450162..................................................          1.3166          0.8641         30.9903         33.3285         32.9317         32.4581
450163..................................................          1.0669          0.8252         23.1400         24.1267         24.7857         24.0374
450165..................................................          1.1663          0.8895         24.3242         28.6490         29.1839         27.3457
450176..................................................          1.3545          0.9135         20.9297         23.1284         24.4338         22.7670
450177..................................................          1.1706          0.8198         21.3322         23.7624         24.4064         23.1608

[[Page 47488]]

 
450178..................................................          0.9841          0.9522         24.7301         27.8405         27.1184         26.5678
450184..................................................          1.5607          0.9996         26.7821         28.5399         29.5940         28.3021
450187..................................................          1.1820          0.9996         25.6787         28.3243         27.7374         27.2569
450188..................................................          0.9375          0.8198         20.4070         23.0595         23.2280         22.2802
450191..................................................          1.1684          0.9501         26.0298         26.5863         28.3937         27.0037
450192..................................................          1.1362          0.8469         22.5880         24.1186         26.4722         24.4203
450193..................................................          2.0940          0.9996         32.2964         34.4545         36.4793         34.4413
450194..................................................          1.3690          0.8411         24.8972         22.9605         24.3531         24.0550
450196..................................................          1.4362          0.9681         24.7557         24.0161         23.4577         24.1010
450200..................................................          1.5854          0.8198         23.5344         23.5012         25.6413         24.1114
450201..................................................          0.9698          0.8198         20.9810         23.2510         23.2800         22.5466
450203..................................................          1.1783          0.9636         24.1675         26.5237         27.8795         26.2148
450209..................................................          1.9545          0.9151         26.0958         27.5668         30.6146         28.0394
450210..................................................          0.9541          0.8348         19.9832         21.8722         22.5736         21.5263
450211..................................................          1.3225          0.8871         23.8230         28.4581         28.3770         26.9047
450213..................................................          1.9145          0.8895         23.9676         25.9169         26.8566         25.6079
450214..................................................          1.2450          0.9996         25.9598         27.4357         27.9913         27.1357
450219..................................................          0.9693          0.8198         21.7934         21.9207         23.9636         22.5469
450221..................................................          1.1310          0.8198         20.3186         19.3793         21.3721         20.3738
450222..................................................          1.6699          0.9996         27.4426         30.0314         30.3801         29.2831
450224..................................................          1.3681          0.9181         24.1956         26.8302         28.4382         26.4258
450229..................................................          1.6509          0.8240         21.4459         24.4450         25.1370         23.6500
450231..................................................          1.6694          0.9151         25.2852         27.1674         26.9783         26.4822
450234..................................................          1.0257          0.8198         18.4451         20.6889         20.4659         19.9283
450235..................................................          1.0130          0.8198         21.5138         23.5212         21.8967         22.3104
450236..................................................          1.0587          0.8586         22.0788         23.5426         22.9622         22.8816
450237..................................................          1.6285          0.8895         24.8901         25.7939         30.5885         26.8889
450239..................................................          0.9810          0.8303         21.1945         21.2586         19.1359         20.4359
450241..................................................          1.0079          0.8198         18.7958         20.8732         21.3641         20.3133
450243..................................................          0.9797          0.8198         15.4636         15.4510         17.2966         16.0870
450253..................................................          0.9237          0.9996         20.6124         24.2435         24.1056         23.0166
450270..................................................          1.1787          0.8469         14.4325         15.2190         19.8180         16.4159
450271..................................................          1.2139          0.9636         21.7719         22.7035         24.1269         22.9111
450272..................................................          1.2109          0.9501         25.7392         26.2576         27.0521         26.3732
450276..................................................             ***               *         16.6319               *               *         16.6319
450280..................................................          1.4744          0.9785         28.7233         29.9730         31.6575         30.1311
450283..................................................          1.0394          0.9681         20.9679         22.7938         24.1754         22.6250
450289..................................................          1.4188          0.9996         28.5665         32.2645         32.6533         31.2446
450292..................................................          1.2700          0.9785         25.0411         26.3242         26.8110         26.0607
450293..................................................          0.8636          0.8198         21.3135         23.6413         24.0827         22.9699
450296..................................................          1.1003          0.9996         27.9690         30.4324         31.5596         30.0340
450299..................................................          1.6637          0.9171         26.4933         27.5797         28.4171         27.4989
450306..................................................          0.9541          0.8240         15.9855         21.4558         22.9486         19.7058
450315..................................................          1.8055          0.9785               *         37.1721               *         37.1721
450324..................................................          1.5710          0.9681         24.9128         25.1633         26.6093         25.5442
450330..................................................          1.2146          0.9996         25.5820         26.0771         27.1100         26.2641
450340..................................................          1.3762          0.8658         24.0637         25.0344         25.6791         24.9276
450346..................................................          1.4301          0.8615         22.2468         23.6072         23.8720         23.2813
450347..................................................          1.1980          0.9996         27.2203         28.7667         30.7825         28.9056
450348..................................................          1.0403          0.8198         18.7675         21.6787         21.0484         20.5437
450351..................................................          1.2634          0.9636         25.6859         26.5388         29.2560         27.1710
450352..................................................          1.1039          0.9785         24.8012         26.2281         27.2983         26.1099
450353..................................................             ***               *         24.4454         27.0248         27.9576         26.5065
450358..................................................          1.9690          0.9996         30.4280         31.4926         32.5922         31.5508
450362..................................................             ***               *         25.4372               *               *         25.4372
450369..................................................          1.0321          0.8198         18.4848         19.9148         22.8525         20.4182
450370..................................................          1.1955          0.8433         20.0832         25.5834         26.3235         23.8014
450372..................................................          1.3699          0.9785         28.3359         30.8886         29.5022         29.5636
450373..................................................          0.8644          0.8198         22.2213         24.8286         27.0726         24.8206
450374..................................................          0.9938               *         23.2283               *               *         23.2283
450378..................................................          1.4691          0.9996         30.7684         30.3883         32.2278         31.1287
450379..................................................          1.3331          0.9785         30.6071         33.7521         35.3807         33.1822
450381..................................................          0.9328               *         22.0482               *               *         22.0482
450388..................................................          1.6610          0.8895         25.8674         27.4328         27.8155         27.0481
450389..................................................          1.1531          0.9681         23.8764         25.6732         26.9638         25.5406
450393..................................................          0.5363          0.9681         18.4551         21.9347               *         19.7864
450395..................................................          1.0563          0.9996         24.8656         27.5189         26.7743         26.5003

[[Page 47489]]

 
450399..................................................          0.8946          0.8198         18.2074         20.3528         22.1731         20.1552
450400..................................................          1.0785          0.8198         23.1739         23.6358         26.2871         24.2928
450403..................................................          1.3135          0.9785         29.3063         29.0359         29.8643         29.4107
450411..................................................          1.0100          0.8198         19.6086         20.9372         21.5746         20.7294
450417..................................................          0.8612               *         20.0351               *               *         20.0351
450418..................................................             ***               *         26.8434         28.4362               *         27.5264
450419..................................................          1.2724          0.9681         31.0405         31.9966         34.2427         32.4903
450422..................................................          1.2225          0.9785         30.6659         34.4331         31.3454         32.1021
450424..................................................          1.3422          0.9996         28.3149         28.2463         30.7228         29.0903
450431..................................................          1.5882          0.9501         25.2477         26.3263         27.3926         26.3387
450438..................................................          1.1315          0.9996         21.9350         27.8659         26.5223         25.2196
450446..................................................          0.6348          0.9996         14.3132         17.0691         17.2871         16.0880
450447..................................................          1.2608          0.9681         23.5047         25.4200         26.5238         25.1015
450451..................................................          1.1286          0.8733         23.3043         24.6201         26.5477         24.8404
450460..................................................          0.9645          0.8251         20.5811         22.4227         24.9870         22.7352
450462..................................................          1.7180          0.9785         27.8923         29.6069         30.1466         29.2312
450465..................................................          1.1121          0.9996         22.4183         26.2759         27.0835         25.3182
450469..................................................          1.4937          0.9681         28.7890         26.3262         26.3445         27.1807
450475..................................................          1.0922          0.8871         23.5596         23.0942         24.5176         23.7054
450484..................................................          1.3677          0.8871         25.3527         26.7242         28.3913         26.8380
450488..................................................          1.1516          0.8871         23.9144         22.3981         23.7985         23.3820
450489..................................................          0.9930          0.8198         21.4771         23.4806         25.2680         23.4878
450497..................................................          1.0142          0.8573         18.8344         22.0918         23.1860         21.3700
450498..................................................          0.9453          0.8198         17.7822         18.6563         20.2475         18.8938
450508..................................................          1.5958          0.8871         23.9572         28.4471         27.2850         26.5800
450514..................................................             ***               *         22.6552         26.3704         27.3043         25.5172
450518..................................................          1.4357          0.8615         24.1194         28.1755         29.1322         27.1788
450530..................................................          1.2777          0.9996         28.7451         29.1349         29.9720         29.2964
450537..................................................          1.4003          0.9785         27.5856         27.7757         28.7448         28.0481
450539..................................................          1.1985          0.8265         21.0442         23.1829         24.2151         22.7465
450547..................................................          0.9648          0.8393         21.6542         23.7820         34.3349         25.8923
450558..................................................          1.8257          0.8240         26.1551         26.9407         28.0655         27.0633
450563..................................................          1.5242          0.9681         28.7289         30.8332         32.0507         30.6111
450565..................................................          1.2522          0.8684         23.8846         26.7942         28.1741         26.2662
450571..................................................          1.6028          0.8658         22.7703         25.2108         27.4605         25.0812
450573..................................................          1.1240          0.8323         20.1479         22.0797         22.1492         21.5110
450578..................................................          0.9614          0.8198         20.2696         22.5167         25.0498         22.6273
450580..................................................          1.0846          0.8198         21.1574         22.3886         23.9004         22.4744
450584..................................................          1.1124          0.8198         21.0808         20.5257         22.5204         21.3633
450586..................................................          0.9374          0.8198         16.1003         18.9107         20.6699         18.6573
450587..................................................          1.2013          0.8198         20.4512         23.1202         25.0174         22.8390
450591..................................................          1.2595          0.9996         23.9992         25.7031         27.1744         25.6141
450596..................................................          1.2190          0.9636         25.3317         27.4011         29.8462         27.4275
450597..................................................          0.9772          0.8198         23.1711         24.7853         24.2586         24.0731
450604..................................................          1.3501          0.8198         20.9514         24.4743         25.9133         23.8497
450605..................................................          0.9405          0.8456         22.2205         20.9276         23.9332         22.2910
450610..................................................          1.5912          0.9996         26.8710         27.7317         28.3713         27.6825
450615..................................................          0.9878          0.8198         20.3028         21.8442         24.1902         22.0858
450617..................................................          1.5092          0.9996         26.5026         28.0225         28.8323         27.8240
450620..................................................          1.0024          0.8198         17.7138         18.6183         20.3723         18.9192
450623..................................................          1.1755               *         28.3552               *               *         28.3552
450626..................................................             ***               *         26.8374               *               *         26.8374
450630..................................................          1.5459          0.9996         29.6796         29.1462         29.8431         29.5562
450634..................................................          1.7069          0.9785         28.1705         28.7312         30.3274         29.0806
450638..................................................          1.6735          0.9996         29.6184         30.6572         32.4911         30.8650
450639..................................................          1.4449          0.9681         29.2669         30.4019         32.6255         30.7775
450641..................................................          1.0336          0.8573         17.5845         19.4389         20.2483         19.0723
450643..................................................          1.3305          0.8501         21.1205         22.7355         24.4999         22.7584
450644..................................................          1.5887          0.9996         29.0186         29.7918         30.7815         29.8996
450646..................................................          1.4232          0.9140         23.8908         25.6313         26.8060         25.4375
450647..................................................          1.8334          0.9785         30.7334         30.6924         32.4236         31.2797
450651..................................................          1.4793          0.9785         32.4822         30.4484         31.9261         31.6022
450653..................................................          1.1659          0.8198         23.2603         25.2144         26.1756         24.8558
450654..................................................          0.9024          0.8198         19.9992         21.5002         22.5447         21.4234
450656..................................................          1.4165          0.8871         23.8280         25.5050         28.1493         25.7182
450658..................................................          0.9853          0.8198         20.5398         22.2293         24.7856         22.5185
450659..................................................          1.4621          0.9996         30.1727         31.5024         34.2380         31.8910

[[Page 47490]]

 
450661..................................................          1.1887          0.9954         23.2989         30.2610         30.0751         27.8684
450662..................................................          1.5730          0.9192         28.0913         29.0535         29.0532         28.7293
450665..................................................             ***               *         18.6054               *               *         18.6054
450668..................................................          1.5287          0.9140         26.2375         28.8635         30.6114         28.5378
450669..................................................          1.2128          0.9785         27.4507         27.9796         30.2374         28.6058
450670..................................................          1.4050          0.9996         25.1575         25.9638         26.4266         25.8773
450672..................................................          1.8204          0.9681         27.6359         30.1191         31.8420         29.9422
450674..................................................          1.0697          0.9996         28.4416         28.7101         29.8971         29.0121
450675..................................................          1.3861          0.9681         28.7765         28.9005         30.9562         29.5682
450677..................................................          1.2694          0.9681         27.3728         25.9555         27.2760         26.8379
450678..................................................          1.5046          0.9785         30.1500         31.1563         33.3386         31.5036
450683..................................................          1.1583          0.9785         24.6609         27.4925         21.1737         24.2967
450684..................................................          1.2913          0.9996         27.6789         29.3025         30.2139         29.1278
450686..................................................          1.5950          0.8641         23.2367         24.2331         25.8530         24.4614
450688..................................................          1.1957          0.9785         27.9057         26.8599         26.9897         27.2212
450690..................................................          1.3100          0.9181         28.2531         26.5528         26.1743         27.0377
450694..................................................          1.1609          0.8198         23.5789         23.9961         24.0031         23.8670
450697..................................................          1.4201          0.8895         23.7155         24.8667         26.4132         25.0106
450698..................................................          0.8999          0.8325         18.6494         20.0955         21.5742         20.0867
450702..................................................          1.7113          0.8871         25.6147         26.8384         26.3696         26.2787
450709..................................................          1.3573          0.9996         25.4855         26.8146         27.1077         26.4651
450711..................................................          1.4817          0.9135         28.0104         26.7472         27.5622         27.4437
450713..................................................          1.5782          0.9501         27.2801         28.8285         29.4980         28.5539
450715..................................................          1.2406          0.9785         28.0365         17.3991         17.0235         19.5811
450716..................................................          1.3502          0.9996         30.8440         32.3960         33.7096         32.3143
450718..................................................          1.3791          0.9501         27.3408         27.3215         28.1560         27.6253
450723..................................................          1.4671          0.9785         28.0812         28.5103         30.1704         28.9694
450730..................................................          1.3698          0.9785         29.9430         31.3324         32.7293         31.3334
450733..................................................             ***               *         26.4977               *               *         26.4977
450742..................................................          1.1911          0.9785         26.1189         27.2023         30.0583         27.8913
450743..................................................          1.4606          0.9785         27.3213         28.3362         28.4736         28.0743
450746..................................................          0.9233          0.8198         12.4748         20.6343         22.7873         18.2509
450747..................................................          1.2814          0.9181         22.2870         23.8314         25.8175         23.8627
450749..................................................          0.9915          0.8198         17.8227         20.0487         22.1562         19.9062
450751..................................................             ***               *         19.3267         18.7456         21.4223         19.9014
450754..................................................          0.9275          0.8198         20.8968         22.1819         24.7797         22.6402
450755..................................................          0.9393          0.8474         18.0092         19.8988         22.2006         20.0136
450758..................................................             ***               *         25.6547         28.7342         28.2803         27.5631
450760..................................................          1.0564          0.9140         24.6349         24.7489         25.1637         24.8390
450761..................................................          0.8818               *         15.7483               *               *         15.7483
450763..................................................          1.0706               *         22.4905               *               *         22.4905
450766..................................................          1.9348          0.9785         30.0441         30.8004         30.2341         30.3517
450770..................................................          1.2421          0.9501         20.3656         24.1647         24.3244         23.0091
450771..................................................          1.6716          0.9785         31.3924         30.7105         32.0500         31.3870
450774..................................................          1.6363          0.9996         24.9683         27.2080         25.7436         25.9776
450775..................................................          1.2932          0.9996         24.4006         28.1428         29.8230         27.3216
450779..................................................          1.2689          0.9681         26.9908         29.9674         31.8403         29.6444
450780..................................................          2.0442          0.8895         23.9516         26.7611         27.0084         25.8985
450788..................................................          1.5555          0.8456         25.4172         26.2840         28.3759         26.7019
450795..................................................          1.1878          0.9996         23.7510         25.2007         32.9803         27.3787
450796..................................................          1.7336          0.9151         27.9734         36.4073         37.6274         33.9632
450797..................................................          1.9643          0.9996         20.5379         24.8950         24.8598         23.1191
450801..................................................          1.5000          0.8198         23.0373         24.6328         23.6072         23.7609
450803..................................................          1.1830          0.9996         30.6093         28.9235         29.0106         29.5055
450804..................................................          1.9178          0.9996         26.0981         27.8775         29.1282         27.7201
450808..................................................          1.3367          0.9501         23.8067         21.9793         23.0312         22.9181
450809..................................................          1.5667          0.9501         26.3659         26.4223         27.3080         26.7166
450811..................................................          1.8166          0.9135         25.8491         27.2584         31.2208         27.9853
450813..................................................          1.1710          0.8895         25.5949         20.1710         22.9289         22.7727
450820..................................................          1.3250          0.9996         30.5288         31.4666         33.9030         32.1410
450822..................................................          1.2857          0.9785         31.1430         32.2968         32.2145         31.9067
450824..................................................          2.4889          0.9501         26.7803         31.2375         33.3653         30.5418
450825..................................................          1.3904          0.9135         20.2959         20.6457         25.1521         21.9878
450827..................................................          1.3878          0.8203         20.9704         23.7554         24.1984         23.0409
450828..................................................          1.3241          0.8198         22.3667         24.4740         24.8236         24.1300
450829..................................................             ***               *         19.5014         20.6016         19.5842         19.9030
450830..................................................          1.0196          0.9522         28.1617         28.5902         27.8005         28.1885

[[Page 47491]]

 
450831..................................................          1.4011          0.9996         22.7885         23.3880         23.9467         23.3309
450832..................................................          1.2704          0.9996         26.6628         26.5229         27.3290         26.8494
450833..................................................          1.3222          0.9785         26.0044         27.0133         27.9649         27.0364
450834..................................................          1.5971          0.9171         21.2204         20.9607         27.4844         22.7772
450838..................................................          1.1492          0.8323         15.8026         19.5754         18.9620         18.1919
450839..................................................          0.9901          0.8551         22.9711         25.8222         27.2199         25.2487
450840..................................................          1.2906          0.9785         31.1914         30.1743         32.2538         31.2218
450841..................................................          1.9165          0.9192         18.9468         20.9410         20.9424         20.3779
450844..................................................          1.3117          0.9996         28.7296         30.7887         33.7978         31.3327
450845..................................................          1.8432          0.9140         27.7461         29.4933         29.9265         29.0937
450847..................................................          1.2710          0.9996         27.6854         28.5548         29.7356         28.6780
450848..................................................          1.3004          0.9996         27.8100         29.5355         30.5546         29.3303
450850..................................................          1.1195          0.9711         22.1335         21.9266         31.9606         24.7549
450851..................................................          2.5542          0.9785         30.1213         32.6950         35.1102         32.6767
450852..................................................             ***               *         30.0191               *               *         30.0191
450853..................................................          1.9480          0.9785               *         36.1169         37.1043         36.6729
450854..................................................             ***               *               *         27.1868               *         27.1868
450855..................................................          1.5587          0.9192               *         30.8855         32.6916         31.8350
450856..................................................          1.9053          0.8895               *         39.0865         37.7362         38.3791
450857..................................................             ***               *               *         30.4632               *         30.4632
450860..................................................          1.9631          0.9996               *         24.0171         29.1075         26.9551
450861..................................................             ***               *               *         34.9290               *         34.9290
450862..................................................          1.4560          0.9996               *         31.2224         31.8095         31.4630
450863..................................................             ***               *               *         24.8825               *         24.8825
450864..................................................          2.0615          0.9181               *         23.3765         24.5049         24.0210
450865..................................................          1.0642          0.9501               *         29.1763         29.9559         29.5867
450866..................................................             ***               *               *         15.2959               *         15.2959
450867..................................................          1.1905          0.9501               *         28.2289         29.5879         28.9055
450868..................................................          1.8308          0.9954               *         27.9579         25.3486         26.8246
450869..................................................          2.0516          0.9135               *         22.6253         26.1616         24.9911
450870..................................................             ***               *               *         37.4364               *         37.4364
450871..................................................          1.8016          0.9501               *               *         28.9150         28.9150
450872..................................................          1.3873          0.9681               *               *         27.2833         27.2833
450873..................................................             ***               *               *               *         14.8821         14.8821
450874..................................................          1.5449          0.9785               *               *         34.6083         34.6083
450875..................................................          1.6419          0.9151               *               *         23.2763         23.2763
450876..................................................          2.0787          0.8641               *               *         28.4343         28.4343
450877..................................................          1.5503          0.9140               *               *         26.1867         26.1867
450878..................................................          2.5573          0.8895               *               *         31.6750         31.6750
450879..................................................          1.2943          0.8501               *               *         35.5672         35.5672
450880..................................................          1.6570          0.9681               *               *         35.9572         35.9572
450881..................................................             ***               *               *               *         24.5464         24.5464
450882..................................................             ***               *               *               *         26.6910         26.6910
450883..................................................          2.5235          0.9785               *               *         35.2646         35.2646
450884..................................................          0.9920          0.8920               *               *         27.8213         27.8213
450885..................................................          1.4958          0.9785               *               *         34.1148         34.1148
450886..................................................          1.9602          0.9660               *               *               *               *
450888..................................................          1.4699          0.9660               *               *               *               *
450889..................................................          1.5257          0.9785               *               *               *               *
450890..................................................          2.0976          0.9785               *               *               *               *
450891..................................................          1.3643          0.9785               *               *               *               *
450893..................................................          1.2413          0.9785               *               *               *               *
450894..................................................          1.6453          0.9785               *               *               *               *
450895..................................................             ***               *               *               *         18.4142         18.4142
460001..................................................          1.8844          0.9480         27.0757         28.7150         30.0040         28.5953
460003..................................................          1.5188          0.9473         26.1372         31.4135         32.3427         29.8772
460004..................................................          1.7340          0.9473         26.4498         28.2040         29.6342         28.1012
460005..................................................          1.4367          0.9473         23.5633         25.0239         26.0731         24.8800
460006..................................................          1.3712          0.9473         25.4787         27.1392         28.3678         27.0132
460007..................................................          1.3738          0.9535         25.6686         27.1308         28.0035         26.9931
460008..................................................          1.4051          0.9473         26.5672         29.5907         31.5485         29.1771
460009..................................................          1.9306          0.9473         26.2833         27.2885         28.3836         27.3958
460010..................................................          2.0966          0.9473         27.4648         29.0063         30.4606         29.0099
460011..................................................          1.3219          0.9380         23.4023         24.4402         24.9677         24.2736
460013..................................................          1.4123          0.9480         25.2448         27.7381         29.2731         27.3708
460014..................................................          1.1347          0.9473         24.1412         28.2647         29.5963         27.3277
460015..................................................          1.3642          0.9214         25.6576         27.2506         29.1318         27.3614

[[Page 47492]]

 
460017..................................................          1.3017          0.8598         23.0388         24.3030         26.1589         24.4636
460018..................................................          0.9383          0.8214         20.3756         22.0517         22.8028         21.8351
460019..................................................          1.1628          0.8214         19.9901         24.3756         23.2202         22.4677
460020..................................................          1.0138               *         19.5669         18.5159               *         19.0929
460021..................................................          1.6953          1.1222         26.3420         28.0291         29.5761         28.1943
460023..................................................          1.1931          0.9480         25.3094         26.9512         28.5884         26.9777
460026..................................................          1.0465          0.9380         24.1547         26.9295         27.9487         26.3213
460030..................................................          1.1801          0.8214         23.4679         23.5942         24.4218         23.8301
460033..................................................          0.9138          0.8214         22.0249         25.3422         26.6606         24.7048
460035..................................................          0.9489          0.8214         17.5723         20.6322         21.9115         20.1175
460036..................................................          1.4454               *         27.2866               *               *         27.2866
460037..................................................          0.8447               *         21.1035               *               *         21.1035
460039..................................................          1.0867          0.9214         28.5657         29.5651         30.4912         29.5982
460041..................................................          1.3585          0.9473         25.2744         26.4640         26.3807         26.0600
460042..................................................          1.3922          0.9473         22.9949         24.9454         26.8389         24.8871
460043..................................................          1.2796          0.9480         28.2089         28.2008         28.6668         28.3615
460044..................................................          1.3080          0.9473         26.6795         27.4928         28.7023         27.6434
460047..................................................          1.6733          0.9473         25.7920         28.2336         29.9990         27.9779
460049..................................................          1.9973          0.9473         24.5165         26.6702         28.4884         26.6038
460051..................................................          1.2366          0.9473         25.5881         27.0160         27.8841         26.8633
460052..................................................          1.6315          0.9480         25.3163         26.1629         27.1995         26.2810
460054..................................................          1.5951          0.9214         25.8668         24.9926         25.7870         25.5264
470001..................................................          1.2942          1.0532         27.7329         28.3017         29.7540         28.6009
470003..................................................          1.9037          1.0387         26.4919         28.1137         30.1973         28.2590
470005..................................................          1.3059          1.0387         29.8255         30.7872         33.1981         31.2960
470006..................................................          1.2524               *         26.9651               *               *         26.9651
470010..................................................             ***               *         26.1273               *               *         26.1273
470011..................................................          1.1763          1.0387         28.3911         28.1330         29.6269         28.7242
470012..................................................          1.1997          1.0387         24.3425         26.0225         27.0751         25.8314
470018..................................................          1.1137               *         28.3419               *               *         28.3419
470024..................................................          1.2029          1.0387         25.2427         27.0394         26.6351         26.3235
490001..................................................          1.0895          0.8073         21.9953         23.2174         24.0368         23.1150
490002..................................................          1.0523          0.8073         19.5613         20.8609         21.7092         20.6693
490003..................................................             ***               *         27.3456               *               *         27.3456
490004..................................................          1.3086          0.9160         25.4597         27.1676         27.5890         26.7640
490005..................................................          1.6441          1.0675         28.5744         29.8215         30.5349         29.6413
490007..................................................          2.1955          0.8777         26.2481         27.6572         29.3098         27.7576
490009..................................................          2.0115          0.9160         29.0740         30.4722         28.4642         29.2905
490011..................................................          1.5273          0.8777         24.5687         26.4766         27.4764         26.2051
490012..................................................          1.0133          0.8073         19.2276         21.0605         22.9922         21.0354
490013..................................................          1.3388          0.8605         22.4771         24.7521         25.5560         24.2699
490017..................................................          1.5006          0.8777         24.6845         25.8216         27.5902         26.0271
490018..................................................          1.3285          0.9160         24.5196         26.2510         27.2644         26.0551
490019..................................................          1.1901          1.0675         25.9761         25.9885         25.8264         25.9276
490020..................................................          1.2418          0.9232         24.8001         27.3142         29.3468         27.1254
490021..................................................          1.4767          0.8605         24.6440         25.7938         27.0641         25.8484
490022..................................................          1.4239          1.0675         28.0749         32.2676         30.1203         30.1142
490023..................................................          1.3029          1.0675         29.7774         30.3416         30.9920         30.3866
490024..................................................          1.7769          0.8888         23.0982         26.1125         27.9689         25.6684
490027..................................................          1.0539          0.8073         18.9409         24.0288         23.0017         21.9123
490031..................................................             ***               *         22.0579               *               *         22.0579
490032..................................................          1.9605          0.9232         25.1381         25.2654         28.5897         26.3877
490033..................................................          1.1087          1.0675         30.0909         31.2922         31.8282         31.1180
490037..................................................          1.2021          0.8073         21.3035         24.7711         25.2859         23.7337
490038..................................................          1.2579          0.8073         22.3976         21.8509         22.6504         22.2973
490040..................................................          1.4791          1.0675         32.8738         32.6564         34.1841         33.2338
490041..................................................          1.5154          0.8777         24.5738         26.0897         27.1613         25.9093
490042..................................................          1.2791          0.8746         21.8749         24.4650         25.7333         24.0571
490043..................................................          1.2495          1.0675         30.8871         33.7096         35.8872         33.5694
490044..................................................          1.4481          0.8777         20.8352         23.3527         23.3793         22.5144
490045..................................................          1.2631          1.0675         28.8279         32.0937         30.3772         30.3677
490046..................................................          1.5195          0.8777         25.6328         26.6517         27.9604         26.7676
490047..................................................          1.2301               *         22.5423               *               *         22.5423
490048..................................................          1.4179          0.8888         25.0097         26.2828         27.0620         26.1566
490050..................................................          1.4893          1.0675         30.5037         31.3885         32.2993         31.4066
490052..................................................          1.6975          0.8777         22.8889         23.5973         25.0046         23.8195
490053..................................................          1.2133          0.8073         21.8432         23.3315         23.8004         22.9792

[[Page 47493]]

 
490057..................................................          1.6174          0.8777         26.1128         26.6898         27.4918         26.7709
490059..................................................          1.6486          0.9232         28.7276         27.3611         30.8669         28.9526
490060..................................................          1.0549          0.8073         22.4201         23.6113         24.3192         23.4567
490063..................................................          1.8511          1.0675         30.3632         31.3619         31.6069         31.1276
490066..................................................          1.3599          0.8777         24.7146         27.8250         29.5917         27.4514
490067..................................................          1.2606          0.9232         22.9188         24.9021         25.9497         24.5486
490069..................................................          1.6019          0.9232         26.8791         27.3181         29.1527         27.7952
490071..................................................          1.3192          0.9232         28.4381         29.7186         31.7061         29.9452
490073..................................................          2.0908          1.0675         31.7743         33.1829         34.5774         33.0517
490075..................................................          1.4337          0.8296         23.8191         25.2022         25.7323         24.9373
490077..................................................          1.4152          0.9160         26.0800         26.6806         28.1506         26.9963
490079..................................................          1.2496          0.9078         23.4728         25.3103         25.2340         24.6377
490084..................................................          1.1764          0.8260         24.5965         24.9007         25.7657         25.0948
490088..................................................          1.0999          0.8605         22.4186         24.1471         25.0619         23.8698
490089..................................................          1.1022          0.8888         22.6461         24.9438         25.9902         24.5386
490090..................................................          1.1083          0.8073         22.2907         25.1157         25.5418         24.2403
490092..................................................          1.0916          0.9232         23.8655         23.3439         25.7405         24.2726
490093..................................................          1.4715          0.8777         25.0751         25.6531         26.7886         25.8819
490094..................................................          0.9845          0.9232         26.5726         28.2165         28.9155         27.8970
490097..................................................          1.0621          0.9232         23.8005         26.5322         27.1470         25.8282
490098..................................................          1.2546          0.8073         21.7231         23.2782         25.1625         23.3960
490101..................................................          1.4004          1.0675         30.4285         31.2377         32.3695         31.3631
490104..................................................          0.7733          0.9232         17.3295               *         17.0548         17.1728
490105..................................................          0.7209          0.8073         24.7922         25.5329         26.3827         25.5156
490106..................................................          0.9111          0.9160         23.0199         23.8334         25.7352         23.7423
490107..................................................          1.3334          1.0675         29.7000         32.2672         33.5430         31.8922
490108..................................................          1.0741          0.8605         22.4345         22.9076         23.3204         22.8878
490109..................................................          0.8787          0.9232         21.9877         22.7854         24.2296         22.9554
490110..................................................          1.3515          0.8313         22.5974         24.2887         24.9861         24.0085
490111..................................................          1.1948          0.8073         22.0199         22.1476         22.7336         22.3108
490112..................................................          1.7163          0.9232         26.6453         27.1932         29.0816         27.6672
490113..................................................          1.3106          1.0675         29.5698         31.8177         32.4547         31.3270
490114..................................................          1.1470          0.8073         20.9116         22.5255         22.1387         21.8658
490115..................................................          1.1538          0.8073         21.4666         22.4058         23.5718         22.4670
490116..................................................          1.1780          0.8129         22.9017         24.2258         24.3853         23.8567
490117..................................................          1.1514          0.8073         18.0277         19.6398         18.1138         18.6020
490118..................................................          1.6635          0.9232         27.4050         27.6749         29.0569         28.0591
490119..................................................          1.3033          0.8777         25.2549         26.5756         27.8866         26.6080
490120..................................................          1.3991          0.8777         24.4434         25.8795         25.9610         25.4137
490122..................................................          1.5535          1.0675         31.0449         32.0743         33.3719         32.1673
490123..................................................          1.1537          0.8073         23.9233         24.3490         24.2254         24.1638
490126..................................................          1.1649          0.8073         22.2859         23.6690         24.0908         23.3598
490127..................................................          1.1300          0.8073         20.4289         21.3735         23.5161         21.6359
490130..................................................          1.2701          0.8777         22.8512         23.9982         25.3352         24.0816
490133..................................................             ***               *         26.5684               *               *         26.5684
490134..................................................          0.7623          0.8073               *               *         33.2405         33.2405
490135..................................................          0.7016          0.8888               *               *         25.9998         25.9998
490136..................................................          1.4665          0.9232               *               *               *               *
490137..................................................          1.2895          0.8777               *               *               *               *
500001..................................................          1.6372          1.1362         29.3707         31.1605         33.0901         31.2057
500002..................................................          1.4288          1.0558         25.3347         27.6400         29.1448         27.3388
500003..................................................          1.3314          1.1208         29.6341         30.6939         32.1262         30.7330
500005..................................................          1.7738          1.1362         32.0972         33.5117         35.0997         33.5662
500007..................................................          1.3436          1.1208         28.0476         29.2869         30.5263         29.3452
500008..................................................          1.8910          1.1362         31.8837         32.6052         33.5666         32.7102
500011..................................................          1.3636          1.1362         30.6508         31.4514         32.6223         31.5869
500012..................................................          1.7458          1.0558         30.6856         30.0509         33.8101         31.3853
500014..................................................          1.6966          1.1362         33.7536         36.1380         36.5833         35.5228
500015..................................................          1.4680          1.1362         32.0592         34.5877         37.5724         34.7448
500016..................................................          1.6470          1.1208         31.4222         31.4905         32.9177         31.9513
500019..................................................          1.2785          1.0689         28.6669         30.5594         31.6242         30.2721
500021..................................................          1.2943          1.1208         30.1690         30.7927         32.4702         31.1942
500024..................................................          1.7699          1.1419         30.7917         32.6171         36.1647         33.1801
500025..................................................          1.8291          1.1362         34.7252         37.7952         40.6369         37.5370
500026..................................................          1.3958          1.1362         33.2937         32.8369         34.5881         33.5880
500027..................................................          1.5127          1.1362         34.2175         34.6164         39.2906         36.0226
500030..................................................          1.6952          1.1257         32.7446         32.4426         34.9174         33.4028

[[Page 47494]]

 
500031..................................................          1.2765          1.1287         31.2186         32.8833         33.2391         32.4932
500033..................................................          1.3169          1.0558         29.4627         30.6292         31.8891         30.6527
500036..................................................          1.3457          1.0558         27.0072         28.7096         30.5938         28.8242
500037..................................................          1.0254          1.0558         26.9969         28.1056         31.2654         28.7446
500039..................................................          1.4957          1.1208         29.8808         32.2245         33.5606         31.9348
500041..................................................          1.4361          1.1226         26.7829         30.3627         34.2017         30.2993
500044..................................................          1.9624          1.0558         30.3164         29.0214         31.0936         30.1182
500049..................................................          1.3501          1.0558         27.1819         27.7170         29.8189         28.3097
500050..................................................          1.4998          1.1226         29.9791         32.6751         33.7713         32.1383
500051..................................................          1.7960          1.1362         31.9406         32.5764         34.7610         33.0994
500052..................................................          1.4523          1.1362               *               *               *               *
500053..................................................          1.2886          1.0558         28.4130         28.2901         30.2811         28.9866
500054..................................................          1.9948          1.0558         30.8067         31.6595         32.5105         31.6694
500058..................................................          1.6540          1.0558         30.4699         30.7487         30.7034         30.6484
500060..................................................          1.3720          1.1362         34.1523         37.4869         38.7682         36.8223
500064..................................................          1.7342          1.1362         31.5371         31.6112         32.3581         31.8431
500072..................................................          1.2307          1.0820         33.4863         31.2000         32.5269         32.3949
500077..................................................          1.4558          1.0558         29.4199         31.6153         33.2223         31.3945
500079..................................................          1.3764          1.1208         29.6623         31.3280         32.5809         31.1946
500084..................................................          1.3889          1.1362         29.3484         30.2411         32.7883         30.8053
500088..................................................          1.3945          1.1362         33.4302         35.3770         36.7953         35.2133
500108..................................................          1.6416          1.1208         29.4244         31.8483         34.3872         31.9459
500119..................................................          1.3904          1.0558         30.9999         29.7028         31.2233         30.6358
500122..................................................          1.3566               *         30.1396               *               *         30.1396
500124..................................................          1.4292          1.1362         31.5438         32.3505         34.4790         32.8210
500129..................................................          1.5749          1.1208         30.7536         32.1102         34.4447         32.4986
500134..................................................          0.4899          1.1362         26.8607         27.2428         28.1374         27.5278
500138..................................................          0.8272               *               *               *               *               *
500139..................................................          1.5206          1.1419         31.6591         33.9739         34.6412         33.4188
500141..................................................          1.3171          1.1362         30.5456         31.3308         33.7532         31.9223
500143..................................................          0.4729          1.1419         22.1419         23.6766         25.3099         23.6848
500147..................................................          0.8772               *         24.5744               *               *         24.5744
500148..................................................          1.1803          1.0558         22.2161         26.4206         37.7830         30.2231
500150..................................................          1.2180          1.1226               *               *               *               *
510001..................................................          1.9238          0.8390         23.4477         25.2973         25.8693         24.9197
510002..................................................          1.2871          0.8746         25.9597         23.8921         23.7270         24.4604
510006..................................................          1.3370          0.8255         23.5727         24.9627         24.8777         24.4769
510007..................................................          1.7232          0.8878         25.2835         24.7264         27.1149         25.7084
510008..................................................          1.3059          0.9255         24.6959         26.3554         27.5241         26.2154
510012..................................................          0.9599          0.7692         18.2845         18.8984         20.8455         19.3188
510013..................................................          1.1244          0.7568         20.8782         22.7882         22.8779         22.1601
510018..................................................          1.0596          0.8393         20.5556         22.4597         23.1043         22.0364
510022..................................................          1.8444          0.8393         24.2125         26.9511         26.8328         25.9941
510023..................................................          1.2839          0.7889         20.4908         20.6435         21.0940         20.7445
510024..................................................          1.8414          0.8407         24.0444         25.5634         26.6621         25.4529
510026..................................................          0.9983          0.7568         16.6192         17.9908         19.2025         17.9223
510028..................................................             ***               *         21.7135               *               *         21.7135
510029..................................................          1.3235          0.8393         22.4556         22.7104         24.0872         23.0837
510030..................................................          1.0973          0.8255         21.5583         24.3936         24.2007         23.3949
510031..................................................          1.4315          0.8393         21.7637         23.2624         24.0237         22.9923
510033..................................................          1.7281          0.8258         23.0305         22.6189         24.0796         23.2701
510038..................................................          1.0543          0.7568         17.2832         20.6565         20.9180         19.6284
510039..................................................          1.2501          0.7568         19.5468         19.8751         20.4719         19.9555
510046..................................................          1.3467          0.7732         21.2540         22.1712         22.2935         21.8981
510047..................................................          1.1486          0.8390         24.0954         27.1214         27.6859         26.2421
510048..................................................          1.1751          0.7568         17.5096         18.8576         22.7930         19.5221
510050..................................................          1.6035          0.7568         19.9766         21.0772         21.9009         20.9839
510053..................................................          1.1071          0.7568         20.8608         22.3318         21.5338         21.5798
510055..................................................          1.5346          0.8878         30.7868         28.4615         29.4111         29.5182
510058..................................................          1.3452          0.8258         22.6976         23.9015         25.3248         23.9858
510059..................................................          0.7138          0.8393         21.9551         22.1435         20.8847         21.6752
510062..................................................          1.1628          0.8393         23.3216         26.2296         26.7066         25.4037
510067..................................................          1.1068          0.7568         21.2099         25.0437         25.2130         23.8479
510068..................................................          1.1378               *         23.1011               *               *         23.1011
510070..................................................          1.2272          0.8393         23.2382         23.5639         23.9742         23.5991
510071..................................................          1.3165          0.7732         23.1685         23.4508         23.2954         23.3056
510072..................................................          1.1600          0.7568         20.1997         20.5146         19.4370         20.0241

[[Page 47495]]

 
510077..................................................          1.0539          0.8724         23.6584         24.5010         25.9515         24.6973
510082..................................................          1.1084          0.7568         19.1878         19.9081         20.3279         19.7905
510085..................................................          1.2934          0.8393         23.7174         26.3877         26.2617         25.5462
510086..................................................          1.1745          0.7568         17.5933         19.8735         19.2606         18.9127
510089..................................................             ***               *         27.7061               *               *         27.7061
510090..................................................          1.8498          0.8878               *               *               *               *
520002..................................................          1.3394          1.0004         24.9950         27.7705         29.0501         27.3208
520004..................................................          1.3931          0.9698         25.4639         27.6530         28.9857         27.3816
520008..................................................          1.5349          1.0295         29.8353         30.7553         33.8057         31.4985
520009..................................................          1.7224          0.9684         26.1503         27.4044         28.8591         27.4837
520011..................................................          1.3035          0.9684         25.2747         26.6268         28.0224         26.6546
520013..................................................          1.4584          0.9684         26.6225         29.0018         30.1834         28.6561
520017..................................................          1.1205          0.9684         24.6677         28.4699         29.3278         27.4748
520019..................................................          1.3604          0.9684         26.7433         28.6971         29.8640         28.5157
520021..................................................          1.3020          1.0471         26.6935         28.4182         29.1129         28.1504
520027..................................................          1.3702          1.0295         27.6771         31.4284         32.4137         30.5716
520028..................................................          1.3503          1.0996         25.4164         26.7260         28.0813         26.7500
520030..................................................          1.7226          1.0004         27.0184         29.4678         30.5724         29.0613
520033..................................................          1.2658          0.9684         25.0853         28.0662         29.0236         27.5164
520034..................................................          1.2321          0.9684         23.9850         26.1094         26.8886         25.6368
520035..................................................          1.3581          0.9760         24.7767         27.3276         28.1048         26.7464
520037..................................................          1.8188          1.0004         29.7234         30.1799         32.2144         30.7303
520038..................................................          1.2391          1.0295         26.6470         29.3134         29.6339         28.5933
520040..................................................          1.2143          1.0295         27.2325         29.1262         31.2038         29.0319
520041..................................................          1.0701          1.1176         22.7595         23.5495         25.3764         23.9562
520044..................................................          1.3515          0.9760         26.0191         27.3685         28.2382         27.2573
520045..................................................          1.6629          0.9684         26.0030         27.3336         29.2556         27.5277
520048..................................................          1.5668          0.9684         25.1724         26.8080         29.1870         26.9823
520049..................................................          2.1335          0.9684         25.9256         26.9851         28.0936         26.9958
520051..................................................          1.5562          1.0295         28.4880         31.9949         31.5974         30.7556
520057..................................................          1.1727          0.9877         25.3745         27.7528         29.1158         27.4376
520059..................................................          1.3044          1.0583         28.0907         29.5801         30.4491         29.3858
520060..................................................          1.3697               *         23.8817         24.8638               *         24.3767
520062..................................................          1.2465          1.0295         28.2215         28.8510         32.8584         30.1184
520063..................................................          1.1373          1.0295         27.4100         29.0993         30.3391         28.9452
520064..................................................          1.5987          1.0295         28.6101         30.3225         31.5723         30.0470
520066..................................................          1.4379          0.9852         27.1657         29.2088         31.0644         29.1283
520068..................................................             ***               *         24.8184               *               *         24.8184
520070..................................................          1.7752          0.9684         24.8935         27.6771         28.2059         26.9824
520071..................................................          1.1683          1.0295         27.6202         30.0262         30.6930         29.4715
520075..................................................          1.5645          0.9684         27.1699         29.2920         30.1582         28.8342
520076..................................................          1.2406          1.0996         26.1697         27.3335         27.4423         26.9220
520078..................................................          1.5171          1.0295         27.5989         29.9837         31.6606         29.7283
520083..................................................          1.7370          1.1176         28.8407         30.8826         32.7728         30.8985
520087..................................................          1.7712          0.9698         27.3374         28.5810         30.5659         28.8732
520088..................................................          1.4096          0.9887         26.9936         30.7450         30.6657         29.5653
520089..................................................          1.5712          1.1176         30.0448         33.8793         33.4098         32.4835
520091..................................................          1.2971          0.9684         24.6320         25.4593         27.3442         25.8210
520094..................................................             ***               *         25.7567               *               *         25.7567
520095..................................................          1.2937          1.0996         26.7863         30.4216         32.0381         29.8120
520096..................................................          1.3783          0.9879         24.5758         27.8896         29.5985         27.4540
520097..................................................          1.3976          0.9684         26.3321         29.1479         29.9998         28.4877
520098..................................................          2.0355          1.1176         30.6150         32.5785         36.5776         33.3175
520100..................................................          1.2798          0.9852         26.2161         29.3243         29.9458         28.5050
520102..................................................          1.1728          1.0295         26.8234         29.1680         30.7990         28.9928
520103..................................................          1.5495          1.0295         27.9147         30.3165         32.6269         30.3612
520107..................................................          1.2792          0.9715         28.3431         28.9878         29.4178         28.9355
520109..................................................          1.0392          0.9684         23.3271         24.7228         25.0697         24.3762
520113..................................................          1.3272          0.9684         27.4135         31.4708         33.3475         30.7254
520116..................................................          1.2669          1.0295         26.9902         27.9688         30.2156         28.3945
520132..................................................             ***               *         23.1941         25.0006         27.3431         25.0308
520136..................................................          1.7249          1.0295         27.7703         30.6522         32.1479         30.1365
520138..................................................          1.8879          1.0295         28.4394         30.8016         31.6581         30.2963
520139..................................................          1.2893          1.0295         26.5110         28.8870         30.4903         28.6153
520140..................................................          0.3793               *         28.4433         31.0043         31.1315         30.2285
520152..................................................          1.0907               *         24.9392         29.7308               *         27.4042
520160..................................................          1.8662          0.9684         25.7588         27.9548         29.5582         27.7551

[[Page 47496]]

 
520170..................................................          1.4782          1.0295         27.2221         30.4309         31.4710         29.7190
520173..................................................          1.0829          0.9684         28.0995         29.2429         31.0599         29.4647
520177..................................................          1.6194          1.0295         30.7317         31.4555         32.5714         31.6050
520178..................................................          1.0240               *         20.2666               *               *         20.2666
520189..................................................          1.2042          1.0471         28.4720         28.0014         29.0295         28.4999
520193..................................................          1.7002          0.9684         26.0885         27.8113         29.2007         27.7865
520194..................................................          1.7148          1.0295         24.9408         30.1668         31.4379         28.8968
520195..................................................          0.3556          1.0295         36.6973         36.3116         36.2900         36.4369
520196..................................................          1.6798          0.9684         35.1043         36.9266         31.1175         34.0254
520197..................................................             ***               *               *               *         30.1917         30.1917
520198..................................................          1.4193          0.9684               *               *         28.5975         28.5975
520199..................................................          2.2776          1.0295               *               *         36.5699         36.5699
520200..................................................          0.9180               *               *               *               *               *
520201..................................................          0.6866               *               *               *               *               *
520202..................................................          1.4495          1.0004               *               *               *               *
530002..................................................          1.1272          0.9163         26.8356         28.3063         29.2069         28.1167
530006..................................................          1.1827          0.9163         24.9318         27.2421         29.2104         27.0638
530007..................................................             ***               *         20.4391               *               *         20.4391
530008..................................................          1.1673          0.9163         23.8589         24.0090         26.5180         24.7926
530009..................................................          0.9202          0.9163         26.8316         24.6719         26.0490         25.8222
530010..................................................          1.3058          0.9163         25.8482         25.9852         27.4121         26.4402
530011..................................................          1.1124          0.9163         24.8245         27.8772         27.8613         26.9109
530012..................................................          1.7060          0.9270         25.2526         26.9582         28.7524         26.9862
530014..................................................          1.5520          0.9204         24.5947         26.7156         28.5469         26.6902
530015..................................................          1.1541          0.9272         27.6876         29.8310         29.8306         29.0860
530017..................................................          1.1052          0.9163         25.3362         29.8503         31.1105         28.7232
530023..................................................             ***               *         21.3813               *               *         21.3813
530025..................................................          1.2402          0.9163         28.6938         24.4392         29.4346         27.4317
530032..................................................          1.0159          0.9163         25.7728         23.9004         24.6580         24.7334
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Based on salaries adjusted for occupational mix, according to the calculation in section II.D.6 to this final rule.
\2\ The case-mix index is based on the billed DRGs in the FY 2006 MedPAR file. It is not transfer adjusted.
\*\ Denotes wage data not available for the provider for that year.
\**\ Based on the sum of the salaries and hours computed for Federal FYs 2006, 2007, and 2008.
\***\Denotes MedPAR data not available for the provider for FY 2006.
\3\ This provider, 140B10, is part of a multi-campus provider, 140010, that is comprised of campuses that are located in two different CBSAs. For the FY
  2008 wage index, a new provider record was created, designated with a ``B'' in the 4th position of the provider number, to distinguish between the
  portion of the wages and hours of the multi-campus facility that is being allocated between the two different CBSAs. Please refer to the FY 2008 final
  rule, section III.H.I.7 ``Geographic Reclassification for Multi-campus Hospitals,'' for more details on this provision.
\4\ This provider, 220B74, is part of a multi-campus provider, 220074, that is comprised of campuses that are located in two different CBSAs. For the FY
  2008 wage index, a new provider record was created, designated with a ``B'' in the 4th position of the provider number, to distinguish between the
  portion of the wages and hours of the multi-campus facility that is being allocated between the two different CBSAs. Please refer to the FY 2008 final
  rule, section III.H.I.7 ``Geographic Reclassification for Multi-campus Hospitals,'' for more details on this provision.


  Table 3A.--Fy 2008 and 3-Year* Average Hourly Wage for Urban Areas by
                                  CBSA
 [*Based on the salaries and hours computed for Federal FYs 2006, 2007,
                               and 2008.]
------------------------------------------------------------------------
                                              FY 2008
    CBSA code           Urban area        average hourly  3-Year average
                                               wage         hourly wage
------------------------------------------------------------------------
10180...........  Abilene, TX...........         25.5587         24.1347
10380...........  Aguadilla-Isabela-San          10.3758         11.4939
                   Sebastian, PR.
10420...........  Akron, OH.............         26.9806         25.8600
10500...........  Albany, GA............         26.5094         25.8668
10580...........  Albany-Schenectady-            26.8819         25.7665
                   Troy, NY.
10740...........  Albuquerque, NM.......         30.1667         28.6303
10780...........  Alexandria, LA........         24.6476         23.5446
10900...........  Allentown-Bethlehem-           31.0279         29.5473
                   Easton, PA-NJ.
11020...........  Altoona, PA...........         25.8973         25.4013
11100...........  Amarillo, TX..........         28.3855         27.1503
11180...........  Ames, IA..............         30.9415         28.8521
11260...........  Anchorage, AK.........         36.4638         35.0346
11300...........  Anderson, IN..........         27.8045         26.0246
11340...........  Anderson, SC..........         28.5621         26.7375
11460...........  Ann Arbor, MI.........         32.5609         31.5918
11500...........  Anniston-Oxford, AL...         24.7360         23.2901
11540...........  Appleton, WI..........         29.2835         27.6497

[[Page 47497]]

 
11700...........  Asheville, NC.........         28.5382         27.3722
12020...........  Athens-Clarke County,          31.0062         28.5975
                   GA.
12060...........  Atlanta-Sandy Springs-         30.4332         28.9628
                   Marietta, GA.
12100...........  Atlantic City, NJ.....         37.4144         34.9286
12220...........  Auburn-Opelika, AL....         25.0468         23.9133
12260...........  Augusta-Richmond               29.7703         28.5720
                   County, GA-SC.
12420...........  Austin-Round Rock, TX.         29.4701         27.8668
12540...........  Bakersfield, CA.......         34.6222         32.1857
12580...........  Baltimore-Towson, MD..         31.1116         29.4296
12620...........  Bangor, ME............         30.6488         29.0740
12700...........  Barnstable Town, MA...         39.1145         37.3027
12940...........  Baton Rouge, LA.......         24.8413         24.3034
12980...........  Battle Creek, MI......         31.1795         28.7485
13020...........  Bay City, MI..........         27.9569         27.3833
13140...........  Beaumont-Port Arthur,          26.7226         25.3526
                   TX.
13380...........  Bellingham, WA........         34.9174         33.4028
13460...........  Bend, OR..............         32.8326         31.4061
13644...........  Bethesda-Gaithersburg-         32.4274         32.2308
                   Frederick, MD.
13740...........  Billings, MT..........         27.5114         26.3017
13780...........  Binghamton, NY........         28.1250         26.2437
13820...........  Birmingham-Hoover, AL.         27.4679         26.3101
13900...........  Bismarck, ND..........         22.4781         21.8382
13980...........  Blacksburg-                    25.2131         23.9984
                   Christiansburg-
                   Radford, VA.
14020...........  Bloomington, IN.......         28.9157         26.4848
14060...........  Bloomington-Normal, IL         29.4154         27.2850
14260...........  Boise City-Nampa, ID..         29.4544         27.5816
14484...........  Boston-Quincy, MA.....         36.7350         34.6366
14500...........  Boulder, CO...........         31.3555         29.5771
14540...........  Bowling Green, KY.....         25.0769         24.0241
14740...........  Bremerton-Silverdale,          33.5606         31.9348
                   WA.
14860...........  Bridgeport-Stamford-           39.6328         37.6098
                   Norwalk, CT.
15180...........  Brownsville-Harlingen,         28.5123         28.3113
                   TX.
15260...........  Brunswick, GA.........         30.2845         29.1378
15380...........  Buffalo-Niagara Falls,         29.7374         28.1521
                   NY.
15500...........  Burlington, NC........         26.6546         25.6458
15540...........  Burlington-South               29.7251         28.0158
                   Burlington, VT.
15764...........  Cambridge-Newton-              34.7914         32.9021
                   Framingham, MA.
15804...........  Camden, NJ............         32.6688         31.0922
15940...........  Canton-Massillon, OH..         27.6581         26.5075
15980...........  Cape Coral-Fort Myers,         29.4194         27.9207
                   FL.
16180...........  Carson City, NV.......         29.0454         29.0240
16220...........  Casper, WY............         28.7524         26.9862
16300...........  Cedar Rapids, IA......         26.9348         25.8164
16580...........  Champaign-Urbana, IL..         28.8930         28.0728
16620...........  Charleston, WV........         26.0325         25.1463
16700...........  Charleston-North               28.2298         27.1032
                   Charleston, SC.
16740...........  Charlotte-Gastonia-            29.4814         28.2160
                   Concord, NC-SC.
16820...........  Charlottesville, VA...         28.4122         28.8815
16860...........  Chattanooga, TN-GA....         27.7980         26.6068
16940...........  Cheyenne, WY..........         28.5469         26.6902
16974...........  Chicago-Naperville-            32.8395         31.5713
                   Joliet, IL.
17020...........  Chico, CA.............         34.8369         32.3535
17140...........  Cincinnati-Middletown,         29.9631         28.3817
                   OH-KY-IN.
17300...........  Clarksville, TN-KY....         25.4903         24.5654
17420...........  Cleveland, TN.........         25.3412         24.1819
17460...........  Cleveland-Elyria-              28.9854         27.5689
                   Mentor, OH.
17660...........  Coeur d'Alene, ID.....         29.0166         27.8500
17780...........  College Station-Bryan,         28.4470         26.5699
                   TX.
17820...........  Colorado Springs, CO..         29.3604         27.9538
17860...........  Columbia, MO..........         26.4800         24.9722
17900...........  Columbia, SC..........         27.3857         26.4658
17980...........  Columbus, GA-AL.......         27.9721         25.7758
18020...........  Columbus, IN..........         29.8540         28.2570
18140...........  Columbus, OH..........         31.0923         29.5809
18580...........  Corpus Christi, TX....         26.2254         25.0632
18700...........  Corvallis, OR.........         33.1928         32.2201
19060...........  Cumberland, MD-WV.....         24.6976         24.8725
19124...........  Dallas-Plano-Irving,           30.3505         29.5230
                   TX.
19140...........  Dalton, GA............         26.6185         26.1940

[[Page 47498]]

 
19180...........  Danville, IL..........         28.6709         27.3188
19260...........  Danville, VA..........         25.7323         24.9373
19340...........  Davenport-Moline-Rock          27.2974         25.9231
                   Island, IA-IL.
19380...........  Dayton, OH............         28.7765         27.1445
19460...........  Decatur, AL...........         24.0785         23.9057
19500...........  Decatur, IL...........         25.1658         24.0544
19660...........  Deltona-Daytona Beach-         27.7377         27.0495
                   Ormond Beach, FL.
19740...........  Denver-Aurora, CO.....         32.4261         31.4090
19780...........  Des Moines-West Des            28.4016         27.5535
                   Moines, IA.
19804...........  Detroit-Livonia-               31.1865         30.3895
                   Dearborn, MI.
20020...........  Dothan, AL............         22.9406         22.3216
20100...........  Dover, DE.............         32.2443         30.0060
20220...........  Dubuque, IA...........         27.5285         26.4860
20260...........  Duluth, MN-WI.........         31.2690         30.0353
20500...........  Durham, NC............         30.2065         29.1866
20740...........  Eau Claire, WI........         29.1817         27.8615
20764...........  Edison, NJ............         34.3515         32.9651
20940...........  El Centro, CA.........         28.4246         26.8343
21060...........  Elizabethtown, KY.....         26.7279         25.6690
21140...........  Elkhart-Goshen, IN....         29.5912         28.1606
21300...........  Elmira, NY............         25.8453         24.6049
21340...........  El Paso, TX...........         28.3494         26.9992
21500...........  Erie, PA..............         26.3723         25.6875
21660...........  Eugene-Springfield, OR         34.1240         32.3054
21780...........  Evansville, IN-KY.....         26.2546         25.6722
21820...........  Fairbanks, AK.........         33.9375         32.8391
21940...........  Fajardo, PR...........         13.5395         12.3736
22020...........  Fargo, ND-MN..........         24.6382         24.1984
22140...........  Farmington, NM........         28.7893         25.7109
22180...........  Fayetteville, NC......         30.7591         28.3790
22220...........  Fayetteville-                  27.5174         26.2042
                   Springdale-Rogers, AR-
                   MO.
22380...........  Flagstaff, AZ.........         35.8287         34.6826
22420...........  Flint, MI.............         34.1572         31.9911
22500...........  Florence, SC..........         26.5044         25.8220
22520...........  Florence-Muscle                23.6943         23.4052
                   Shoals, AL.
22540...........  Fond du Lac, WI.......         30.6657         29.5653
22660...........  Fort Collins-Loveland,         29.6511         28.4243
                   CO.
22744...........  Fort Lauderdale-               31.2029         30.0377
                   Pompano Beach-
                   Deerfield Beach, FL.
22900...........  Fort Smith, AR-OK.....         24.9751         23.7479
23020...........  Fort Walton Beach-             26.8731         25.7329
                   Crestview-Destin, FL.
23060...........  Fort Wayne, IN........         28.0404         27.6657
23104...........  Fort Worth-Arlington,          29.8878         28.3058
                   TX.
23420...........  Fresno, CA............         34.2409         32.2447
23460...........  Gadsden, AL...........         25.2583         23.7861
23540...........  Gainesville, FL.......         28.8468         27.7119
23580...........  Gainesville, GA.......         29.2134         27.2823
23844...........  Gary, IN..............         28.6630         27.6151
24020...........  Glens Falls, NY.......         26.4328         25.3769
24140...........  Goldsboro, NC.........         28.7544         26.8571
24220...........  Grand Forks, ND-MN....         24.9615         23.5379
24300...........  Grand Junction, CO....         30.0988         28.4999
24340...........  Grand Rapids-Wyoming,          29.0742         27.9446
                   MI.
24500...........  Great Falls, MT.......         26.4422         25.6386
24540...........  Greeley, CO...........         31.0018         29.1634
24580...........  Green Bay, WI.........         29.4031         28.1019
24660...........  Greensboro-High Point,         28.2442         26.8380
                   NC.
24780...........  Greenville, NC........         28.7434         27.6121
24860...........  Greenville-Mauldin-            29.8863         28.7666
                   Easley, SC.
25020...........  Guayama, PR...........         09.1328         09.2034
25060...........  Gulfport-Biloxi, MS...         26.6981         25.8275
25180...........  Hagerstown-                    28.7052         27.6861
                   Martinsburg, MD-WV.
25260...........  Hanford-Corcoran, CA..         33.0818         30.9616
25420...........  Harrisburg-Carlisle,           28.6281         27.5253
                   PA.
25500...........  Harrisonburg, VA......         27.5890         26.7640
25540...........  Hartford-West Hartford-        34.1958         32.5387
                   East Hartford, CT.
25620...........  Hattiesburg, MS.......         23.3688         22.3933
25860...........  Hickory-Lenoir-                27.8279         26.5091
                   Morganton, NC.
25980...........  \1\ Hinesville-Fort     ..............  ..............
                   Stewart, GA.
26100...........  Holland-Grand Haven,           28.1106         26.9710
                   MI.

[[Page 47499]]

 
26180...........  Honolulu, HI..........         35.0637         32.9282
26300...........  Hot Springs, AR.......         28.2416         26.5594
26380...........  Houma-Bayou Cane-              24.7360         23.6339
                   Thibodaux, LA.
26420...........  Houston-Sugar Land-            31.0073         29.6665
                   Baytown, TX.
26580...........  Huntington-Ashland, WV-        27.5367         26.7655
                   KY-OH.
26620...........  Huntsville, AL........         27.9664         26.7281
26820...........  Idaho Falls, ID.......         28.6730         27.2931
26900...........  Indianapolis-Carmel,           30.1393         28.9659
                   IN.
26980...........  Iowa City, IA.........         29.2283         28.3310
27060...........  Ithaca, NY............         29.5885         28.8558
27100...........  Jackson, MI...........         29.3442         28.0566
27140...........  Jackson, MS...........         24.6588         24.0939
27180...........  Jackson, TN...........         26.6460         25.9444
27260...........  Jacksonville, FL......         28.1891         27.2668
27340...........  Jacksonville, NC......         25.6349         24.5586
27500...........  Janesville, WI........         30.5583         28.8479
27620...........  Jefferson City, MO....         26.9896         25.3379
27740...........  Johnson City, TN......         23.8863         23.3983
27780...........  Johnstown, PA.........         23.6956         24.1225
27860...........  Jonesboro, AR.........         24.5432         23.3834
27900...........  Joplin, MO............         28.5715         26.1411
28020...........  Kalamazoo-Portage, MI.         32.5665         31.2119
28100...........  Kankakee-Bradley, IL..         31.4634         30.4290
28140...........  Kansas City, MO-KS....         28.9006         27.7100
28420...........  Kennewick-Richland-            30.5718         30.0867
                   Pasco, WA.
28660...........  Killeen-Temple-Fort            25.7531         25.4186
                   Hood, TX.
28700...........  Kingsport-Bristol-             24.0579         23.5616
                   Bristol, TN-VA.
28740...........  Kingston, NY..........         29.7092         27.8745
28940...........  Knoxville, TN.........         24.8497         24.3151
29020...........  Kokomo, IN............         29.3517         28.2551
29100...........  La Crosse, WI-MN......         30.0819         28.4074
29140...........  Lafayette, IN.........         26.9111         25.7888
29180...........  Lafayette, LA.........         25.7422         24.7411
29340...........  Lake Charles, LA......         24.1388         23.1811
29404...........  Lake County-Kenosha            32.8246         31.3422
                   County, IL-WI.
29420...........  \2\ Lake Havasu City-          28.9483         27.6199
                   Kingman, AZ.
29460...........  Lakeland, FL..........         27.4022         26.4654
29540...........  Lancaster, PA.........         29.5629         28.7355
29620...........  Lansing-East Lansing,          31.1650         29.4203
                   MI.
29700...........  Laredo, TX............         26.3647         24.4147
29740...........  Las Cruces, NM........         26.4515         25.6132
29820...........  Las Vegas-Paradise, NV         35.5188         33.5865
29940...........  Lawrence, KS..........         25.3394         24.6697
30020...........  Lawton, OK............         26.0678         24.4730
30140...........  Lebanon, PA...........         25.4407         25.2125
30300...........  Lewiston, ID-WA.......         28.6136         28.2894
30340...........  Lewiston-Auburn, ME...         28.8124         27.4899
30460...........  Lexington-Fayette, KY.         27.9203         26.6486
30620...........  Lima, OH..............         28.7203         26.9713
30700...........  Lincoln, NE...........         30.6210         29.5883
30780...........  Little Rock-North              27.7910         27.0607
                   Little Rock-Conway,
                   AR.
30860...........  Logan, UT-ID..........         28.4789         27.0287
30980...........  Longview, TX..........         27.2767         26.0021
31020...........  Longview, WA..........         34.2017         30.2993
31084...........  Los Angeles-Long Beach-        36.1216         34.6333
                   Glendale, CA.
31140...........  Louisville-Jefferson           28.0031         27.0434
                   County, KY-IN.
31180...........  Lubbock, TX...........         26.8019         25.5836
31340...........  Lynchburg, VA.........         26.6920         25.5281
31420...........  Macon, GA.............         30.2376         28.6721
31460...........  Madera, CA............         26.0908         25.2915
31540...........  Madison, WI...........         34.6626         32.2711
31700...........  Manchester-Nashua, NH.         31.4185         30.1339
31900...........  Mansfield, OH.........         28.5643         27.8933
32420...........  Mayagez, PR...........         11.3432         11.2956
32580...........  McAllen-Edinburg-              28.3352         26.4921
                   Mission, TX.
32780...........  Medford, OR...........         31.9397         30.8471
32820...........  Memphis, TN-MS-AR.....         28.8850         27.6299
32900...........  Merced, CA............         37.1577         33.9319
33124...........  Miami-Miami Beach-             31.0417         29.1773
                   Kendall, FL.

[[Page 47500]]

 
33140...........  Michigan City-La               27.2502         26.8087
                   Porte, IN.
33260...........  Midland, TX...........         30.1228         28.3740
33340...........  Milwaukee-Waukesha-            31.9336         30.3294
                   West Allis, WI.
33460...........  Minneapolis-St. Paul-          33.7989         32.2480
                   Bloomington, MN-WI.
33540...........  Missoula, MT..........         27.0081         26.3798
33660...........  Mobile, AL............         24.6508         23.3350
33700...........  Modesto, CA...........         36.9816         35.0810
33740...........  Monroe, LA............         24.4048         23.5973
33780...........  Monroe, MI............         29.3721         28.3183
33860...........  Montgomery, AL........         25.1560         24.3045
34060...........  Morgantown, WV........         26.0767         25.0610
34100...........  Morristown, TN........         22.9838         22.9921
34580...........  Mount Vernon-                  31.5882         30.3305
                   Anacortes, WA.
34620...........  Muncie, IN............         24.8045         24.8596
34740...........  Muskegon-Norton                30.9174         29.4013
                   Shores, MI.
34820...........  Myrtle Beach-Conway-           26.8308         26.0534
                   North Myrtle Beach,
                   SC.
34900...........  Napa, CA..............         43.2961         38.9739
34940...........  Naples-Marco Island,           29.8301         29.4006
                   FL.
34980...........  Nashville-Davidson-            29.8314         28.7944
                   Murfreesboro-
                   Franklin, TN.
35004...........  Nassau-Suffolk, NY....         39.9385         38.0505
35084...........  Newark-Union, NJ-PA...         36.2043         34.7660
35300...........  New Haven-Milford, CT.         37.0135         35.4050
35380...........  New Orleans-Metairie-          27.0196         25.9463
                   Kenner, LA.
35644...........  New York-White Plains-         41.0297         39.1741
                   Wayne, NY-NJ.
35660...........  Niles-Benton Harbor,           28.3275         26.5614
                   MI.
35980...........  Norwich-New London, CT         35.5892         34.4004
36084...........  Oakland-Fremont-               47.4312         45.4607
                   Hayward, CA.
36100...........  Ocala, FL.............         26.6198         25.7580
36140...........  Ocean City, NJ........         34.3497         32.1653
36220...........  Odessa, TX............         30.8727         29.4951
36260...........  Ogden-Clearfield, UT..         28.0771         26.7568
36420...........  Oklahoma City, OK.....         27.1496         26.2035
36500...........  Olympia, WA...........         35.4177         32.8236
36540...........  Omaha-Council Bluffs,          29.3831         28.0303
                   NE-IA.
36740...........  Orlando-Kissimmee, FL.         28.7946         27.9149
36780...........  Oshkosh-Neenah, WI....         29.0738         27.4065
36980...........  Owensboro, KY.........         26.9752         25.9113
37100...........  Oxnard-Thousand Oaks-          35.3324         33.6460
                   Ventura, CA.
37340...........  Palm Bay-Melbourne-            29.0918         28.3346
                   Titusville, FL.
37380...........  \2\ Palm Coast, FL....         27.0981         27.5188
37460...........  Panama City-Lynn               26.1809         24.3132
                   Haven, FL.
37620...........  Parkersburg-Marietta-          25.6137         24.3192
                   Vienna, WV-OH.
37700...........  Pascagoula, MS........         26.4851         24.5084
37764...........  Peabody, MA (Formerly,         32.8768         31.1949
                   Essex County, MA).
37860...........  Pensacola-Ferry Pass-          25.1928         23.7366
                   Brent, FL.
37900...........  Peoria, IL............         29.1064         26.9822
37964...........  Philadelphia, PA......         33.7819         32.4433
38060...........  Phoenix-Mesa-                  31.3577         29.9786
                   Scottsdale, AZ.
38220...........  Pine Bluff, AR........         25.2840         25.1920
38300...........  Pittsburgh, PA........         26.0226         25.3927
38340...........  Pittsfield, MA........         31.1782         30.0596
38540...........  Pocatello, ID.........         28.4934         27.3130
38660...........  Ponce, PR.............         13.2197         13.6539
38860...........  Portland-South                 30.9888         29.7785
                   Portland-Biddeford,
                   ME.
38900...........  Portland-Vancouver-            34.8215         33.1817
                   Beaverton, OR-WA.
38940...........  Port St. Lucie, FL....         31.1259         29.6067
39100...........  Poughkeepsie-Newburgh-         34.0640         32.4120
                   Middletown, NY.
39140...........  Prescott, AZ..........         30.8935         29.2139
39300...........  Providence-New Bedford-        32.6657         31.8184
                   Fall River, RI-MA.
39340...........  Provo-Orem, UT........         29.4032         28.0289
39380...........  Pueblo, CO............         27.0893         25.6378
39460...........  Punta Gorda, FL.......         29.6456         28.1432
39540...........  Racine, WI............         29.7224         27.6182
39580...........  Raleigh-Cary, NC......         29.9696         28.6624
39660...........  Rapid City, SD........         26.9365         25.9833
39740...........  Reading, PA...........         29.1988         28.3941
39820...........  Redding, CA...........         39.7306         36.7803
39900...........  Reno-Sparks, NV.......         34.3107         33.6223
40060...........  Richmond, VA..........         28.6339         27.1478

[[Page 47501]]

 
40140...........  Riverside-San                  33.8115         32.2089
                   Bernardino-Ontario,
                   CA.
40220...........  Roanoke, VA...........         27.5669         25.7396
40340...........  Rochester, MN.........         32.5362         32.3328
40380...........  Rochester, NY.........         27.6600         26.7521
40420...........  Rockford, IL..........         30.4079         29.3760
40484...........  Rockingham County-             31.1894         30.1246
                   Strafford County, NH.
40580...........  Rocky Mount, NC.......         27.9351         26.4593
40660...........  Rome, GA..............         29.6117         28.2895
40900...........  Sacramento--Arden-             40.5303         38.5061
                   Arcade--Roseville, CA.
40980...........  Saginaw-Saginaw                28.2960         27.0569
                   Township North, MI.
41060...........  St. Cloud, MN.........         34.2980         31.6169
41100...........  St. George, UT........         29.5761         28.1943
41140...........  St. Joseph, MO-KS.....         27.3754         28.2413
41180...........  St. Louis, MO-IL......         27.8586         26.5418
41420...........  Salem, OR.............         32.2491         30.6939
41500...........  Salinas, CA...........         45.2648         42.3717
41540...........  Salisbury, MD.........         27.6311         26.4523
41620...........  Salt Lake City, UT....         29.3832         28.0017
41660...........  San Angelo, TX........         26.8540         25.0310
41700...........  San Antonio, TX.......         27.5914         26.4240
41740...........  San Diego-Carlsbad-San         34.7234         33.2467
                   Marcos, CA.
41780...........  Sandusky, OH..........         27.1546         26.6090
41884...........  San Francisco-San              45.9063         44.5739
                   Mateo-Redwood City,
                   CA.
41900...........  San German-Cabo Rojo,          14.2744         13.8609
                   PR.
41940...........  San Jose-Sunnyvale-            47.8883         45.2793
                   Santa Clara, CA.
41980...........  San Juan-Caguas-               14.0384         13.4057
                   Guaynabo, PR.
42020...........  San Luis Obispo-Paso           37.0690         33.9137
                   Robles, CA.
42044...........  Santa Ana-Anaheim-             35.9446         34.0127
                   Irvine, CA.
42060...........  Santa Barbara-Santa            35.5323         33.4626
                   Maria-Goleta, CA.
42100...........  Santa Cruz-                    48.5956         45.3129
                   Watsonville, CA.
42140...........  Santa Fe, NM..........         33.1342         31.9538
42220...........  Santa Rosa-Petaluma,           44.8763         41.6974
                   CA.
42260...........  Sarasota-Bradenton-            30.3046         28.7388
                   Venice, FL.
42340...........  Savannah, GA..........         27.5761         27.0800
42540...........  Scranton--Wilkes-              25.8832         24.7503
                   Barre, PA.
42644...........  Seattle-Bellevue-              35.2419         33.6864
                   Everett, WA.
42680...........  Sebastian-Vero Beach,          30.0959         28.6117
                   FL.
43100...........  Sheboygan, WI.........         28.0852         26.7414
43300...........  Sherman-Denison, TX...         26.4590         26.2413
43340...........  Shreveport-Bossier             26.5251         25.7648
                   City, LA.
43580...........  Sioux City, IA-NE-SD..         28.1724         27.0701
43620...........  Sioux Falls, SD.......         29.6291         28.1071
43780...........  South Bend-Mishawaka,          29.9101         28.9205
                   IN-MI.
43900...........  Spartanburg, SC.......         29.1389         27.2257
44060...........  Spokane, WA...........         32.2318         31.1918
44100...........  Springfield, IL.......         27.7357         26.2616
44140...........  Springfield, MA.......         32.4121         30.4332
44180...........  Springfield, MO.......         27.2665         25.2881
44220...........  Springfield, OH.......         26.4842         25.0769
44300...........  State College, PA.....         26.7342         25.2071
44700...........  Stockton, CA..........         36.6289         34.1459
44940...........  Sumter, SC............         27.5988         25.3447
45060...........  Syracuse, NY..........         30.8602         28.9261
45104...........  Tacoma, WA............         33.9112         31.9624
45220...........  Tallahassee, FL.......         27.9986         26.3273
45300...........  Tampa-St. Petersburg-          28.2697         27.2080
                   Clearwater, FL.
45460...........  Terre Haute, IN.......         27.3687         25.3385
45500...........  Texarkana, TX-                 24.1336         23.7947
                   Texarkana, AR.
45780...........  Toledo, OH............         28.7454         27.8506
45820...........  Topeka, KS............         26.5404         25.8367
45940...........  Trenton-Ewing, NJ.....         33.2313         31.9690
46060...........  Tucson, AZ............         29.2073         27.5084
46140...........  Tulsa, OK.............         26.3577         25.0127
46220...........  Tuscaloosa, AL........         26.4577         25.5487
46340...........  Tyler, TX.............         28.4760         26.8685
46540...........  Utica-Rome, NY........         27.2131         25.5649
46660...........  Valdosta, GA..........         25.4439         25.1429
46700...........  Vallejo-Fairfield, CA.         44.7630         43.6070
47020...........  Victoria, TX..........         25.1713         24.3382

[[Page 47502]]

 
47220...........  Vineland-Millville-            33.0258         30.4634
                   Bridgeton, NJ.
47260...........  Virginia Beach-Norfolk-        27.2219         26.0009
                   Newport News, VA-NC.
47300...........  Visalia-Porterville,           31.6363         30.0714
                   CA.
47380...........  Waco, TX..............         26.6549         25.4931
47580...........  Warner Robins, GA.....         29.8158         26.8114
47644...........  Warren-Troy-Farmington         31.1197         29.5882
                   Hills, MI.
47894...........  Washington-Arlington-          33.1099         32.0932
                   Alexandria, DC-VA-MD-
                   WV.
47940...........  Waterloo-Cedar Falls,          27.0432         25.5301
                   IA.
48140...........  Wausau, WI............         30.5724         29.0613
48260...........  Weirton-Steubenville,          24.4665         23.3434
                   WV-OH.
48300...........  Wenatchee, WA.........         34.9713         31.3444
48424...........  West Palm Beach-Boca           29.7017         28.7143
                   Raton-Boynton Beach,
                   FL.
48540...........  Wheeling, WV-OH.......         21.7324         20.9335
48620...........  Wichita, KS...........         27.7241         26.6808
48660...........  Wichita Falls, TX.....         25.4414         24.7129
48700...........  Williamsport, PA......         24.6495         23.9559
48864...........  Wilmington, DE-MD-NJ..         33.0826         31.3165
48900...........  Wilmington, NC........         28.9236         28.2353
49020...........  Winchester, VA-WV.....         30.5349         29.6413
49180...........  Winston-Salem, NC.....         28.1570         26.9279
49340...........  Worcester, MA.........         35.2178         32.7401
49420...........  Yakima, WA............         31.6531         29.7148
49500...........  Yauco, PR.............         09.9278         11.1280
49620...........  York-Hanover, PA......         29.2356         27.8962
49660...........  Youngstown-Warren-             27.8874         25.9939
                   Boardman, OH-PA.
49700...........  Yuba City, CA.........         32.6363         31.5712
49740...........  Yuma, AZ..............         31.2815         28.0280
------------------------------------------------------------------------
\1\ This area has no average hourly wage because there are no short-
  term, acute care hospitals in the area.
\2\ This a new CBSA for fiscal year 2008. To calculate the 3-year
  average hourly wage for this new area, we included the hospitals data
  from their previous geographic location for fiscal year 2006 and
  fiscal year 2007.


  Table 3B.--FY 2008 and 3-Year* Average Hourly Wage for Rural Areas by
                                  CBSA
[*Based on the sum of the salaries and hours computed for federal fiscal
                       years 2006, 2007, and 2008]
------------------------------------------------------------------------
                                              FY 2008
    CBSA code          Nonurban area      average hourly  3-Year average
                                               wage         hourly wage
------------------------------------------------------------------------
01..............  Alabama...............         23.4686         22.3386
02..............  Alaska................         37.4766         33.9221
03..............  Arizona...............         27.4632         26.0832
04..............  Arkansas..............         23.2843         22.1169
05..............  California............         36.3980         33.2793
06..............  Colorado..............         29.3035         27.5010
07..............  Connecticut...........         34.8710         34.5456
08..............  Delaware..............         30.5175         28.9016
10..............  Florida...............         26.6208         25.5360
11..............  Georgia...............         24.3828         23.0350
12..............  Hawaii................         33.3125         31.5134
13..............  Idaho.................         24.2477         23.5535
14..............  Illinois..............         25.8829         24.5970
15..............  Indiana...............         26.5753         25.3117
16..............  Iowa..................         26.2900         25.1302
17..............  Kansas................         24.6910         23.6030
18..............  Kentucky..............         24.2238         23.0413
19..............  Louisiana.............         23.5288         22.3360
20..............  Maine.................         26.0794         25.2187
21..............  Maryland..............         27.6405         26.7369
22..............  Massachusetts.........  ..............  ..............
23..............  Michigan..............         27.6315         26.4190
24..............  Minnesota.............         28.2328         26.9455
25..............  Mississippi...........         23.9977         22.8764
26..............  Missouri..............         25.1550         23.7800
27..............  Montana...............         25.8521         25.3526
28..............  Nebraska..............         27.1868         25.6379
29..............  Nevada................         30.0915         27.4332
30..............  New Hampshire.........         32.6655         31.8760
31..............  New Jersey \1\........  ..............  ..............

[[Page 47503]]

 
32..............  New Mexico............         27.8053         25.6447
33..............  New York..............         25.9034         24.5021
34..............  North Carolina........         26.6853         25.3994
35..............  North Dakota..........         22.6685         21.5967
36..............  Ohio..................         26.9711         25.8029
37..............  Oklahoma..............         23.8499         22.8005
38..............  Oregon................         30.7608         28.9519
39..............  Pennsylvania..........         25.8624         24.5739
40..............  Puerto Rico \1\.......  ..............  ..............
41..............  Rhode Island \1\......  ..............  ..............
42..............  South Carolina........         27.0046         25.7091
43..............  South Dakota..........         25.8767         24.7974
44..............  Tennessee.............         24.3974         23.4911
45..............  Texas.................         25.4256         24.0797
46..............  Utah..................         25.4798         24.1789
47..............  Vermont...............         30.2117         28.6350
49..............  Virginia..............         24.9884         23.8157
50..............  Washington............         31.5042         30.3819
51..............  West Virginia.........         23.4724         22.6983
52..............  Wisconsin.............         30.0360         28.3535
53..............  Wyoming...............         28.4210         27.0268
------------------------------------------------------------------------
\1\ All counties within the State or territory are classified as urban.


      Table 4A.--Wage Index and Capital Geographic Adjustment Factor (GAF) for Urban Areas by CBSA--FY 2008
----------------------------------------------------------------------------------------------------------------
                CBSA code                       Urban area  (constituent counties)       Wage index      GAF
----------------------------------------------------------------------------------------------------------------
10180....................................  Abilene, TX................................       0.8240       0.8758
                                            Callahan County, TX.......................
                                            Jones County, TX..........................
                                            Taylor County, TX.........................
10380....................................  Aguadilla-Isabela-San Sebastian, PR........       0.3345       0.4724
                                            Aguada Municipio, PR......................
                                            Aguadilla Municipio, PR...................
                                            Anasco Municipio, PR......................
                                            Isabela Municipio, PR.....................
                                            Lares Municipio, PR.......................
                                            Moca Municipio, PR........................
                                            Rincon Municipio, PR......................
                                            San Sebastian Municipio, PR...............
10420....................................  Akron, OH..................................       0.8699       0.9090
                                            Portage County, OH........................
                                            Summit County, OH.........................
10500....................................  Albany, GA.................................       0.8666       0.9066
                                            Baker County, GA..........................
                                            Dougherty County, GA......................
                                            Lee County, GA............................
                                            Terrell County, GA........................
                                            Worth County, GA..........................
10580....................................  Albany-Schenectady-Troy, NY................       0.8667       0.9067
                                            Albany County, NY.........................
                                            Rensselaer County, NY.....................
                                            Saratoga County, NY.......................
                                            Schenectady County, NY....................
                                            Schoharie County, NY......................
                                           ...........................................
10740....................................  Albuquerque, NM............................       0.9725       0.9811
                                            Bernalillo County, NM.....................
                                            Sandoval County, NM.......................
                                            Torrance County, NM.......................
                                            Valencia County, NM.......................
10780....................................  Alexandria, LA.............................       0.7977       0.8566
                                            Grant Parish, LA..........................
                                            Rapides Parish, LA........................
10900....................................  Allentown-Bethlehem-Easton, PA-NJ (PA             1.0003       1.0002
                                            Hospitals).
                                            Warren County, NJ.........................

[[Page 47504]]

 
                                            Carbon County, PA.........................
                                            Lehigh County, PA.........................
                                            Northampton County, PA....................
10900....................................  \2\ Allentown-Bethlehem-Easton, PA-NJ (NJ         1.1616       1.1080
                                            Hospitals).
                                            Warren County, NJ.........................
                                            Carbon County, PA.........................
                                            Lehigh County, PA.........................
                                            Northampton County, PA....................
11020....................................   \2\ Altoona, PA...........................       0.8357       0.8843
                                            Blair County, PA..........................
 11100...................................  Amarillo, TX...............................       0.9151       0.9411
                                            Armstrong County, TX......................
                                            Carson County, TX.........................
                                            Potter County, TX.........................
                                            Randall County, TX........................
11180....................................  Ames, IA...................................       0.9976       0.9984
                                            Story County, IA..........................
11260....................................  \2\ Anchorage, AK..........................       1.2083       1.1383
                                            Anchorage Municipality, AK................
                                            Matanuska-Susitna Borough, AK.............
11300....................................  Anderson, IN...............................       0.8964       0.9278
                                            Madison County, IN........................
11340....................................  Anderson, SC...............................       0.9208       0.9451
                                            Anderson County, SC.......................
11460....................................  Ann Arbor, MI..............................       1.0498       1.0338
                                            Washtenaw County, MI......................
11500....................................  Anniston-Oxford, AL........................       0.7975       0.8565
                                            Calhoun County, AL........................
11540....................................  \2\ Appleton, WI...........................       0.9684       0.9783
                                            Calumet County, WI........................
                                            Outagamie County, WI......................
11700....................................  Asheville, NC..............................       0.9201       0.9446
                                            Buncombe County, NC.......................
                                            Haywood County, NC........................
                                            Henderson County, NC......................
                                            Madison County, NC........................
12020....................................  Athens-Clarke County, GA...................       0.9996       0.9997
                                            Clarke County, GA.........................
                                            Madison County, GA........................
                                            Oconee County, GA.........................
                                            Oglethorpe County, GA.....................
12060....................................  \1\ Atlanta-Sandy Springs-Marietta, GA.....       0.9812       0.9871
                                            Barrow County, GA.........................
                                            Bartow County, GA.........................
                                            Butts County, GA..........................
                                            Carroll County, GA........................
                                            Cherokee County, GA.......................
                                            Clayton County, GA........................
                                            Cobb County, GA...........................
                                            Coweta County, GA.........................
                                            Dawson County, GA.........................
                                            DeKalb County, GA.........................
                                            Douglas County, GA........................
                                            Fayette County, GA........................
                                            Forsyth County, GA........................
                                            Fulton County, GA.........................
                                            Gwinnett County, GA.......................
                                            Haralson County, GA.......................
                                            Heard County, GA..........................
                                            Henry County, GA..........................
                                            Jasper County, GA.........................
                                            Lamar County, GA..........................
                                            Meriwether County, GA.....................
                                            Newton County, GA.........................
                                            Paulding County, GA.......................
                                            Pickens County, GA........................
                                            Pike County, GA...........................
                                            Rockdale County, GA.......................
                                            Spalding County, GA.......................
                                            Walton County, GA.........................

[[Page 47505]]

 
12100....................................  Atlantic City, NJ..........................       1.2063       1.1371
                                            Atlantic County, NJ.......................
12220....................................  Auburn-Opelika, AL.........................       0.8075       0.8638
                                            Lee County, AL............................
12260....................................  Augusta-Richmond County, GA-SC.............       0.9598       0.9723
                                            Burke County, GA..........................
                                            Columbia County, GA.......................
                                            McDuffie County, GA.......................
                                            Richmond County, GA.......................
                                            Aiken County, SC..........................
                                            Edgefield County, SC......................
12420....................................  \1\ Austin-Round Rock, TX..................       0.9501       0.9656
                                            Bastrop County, TX........................
                                            Caldwell County, TX.......................
                                            Hays County, TX...........................
                                            Travis County, TX.........................
                                            Williamson County, TX.....................
12540....................................  \2\ Bakersfield, CA........................       1.1735       1.1158
                                            Kern County, CA...........................
12580....................................  \1\ Baltimore-Towson, MD...................       1.0030       1.0021
                                            Anne Arundel County, MD...................
                                            Baltimore County, MD......................
                                            Carroll County, MD........................
                                            Harford County, MD........................
                                            Howard County, MD.........................
                                            Queen Anne's County, MD...................
                                            Baltimore City, MD........................
12620....................................  Bangor, ME.................................       0.9881       0.9918
                                            Penobscot County, ME......................
12700....................................  Barnstable Town, MA........................       1.2611       1.1722
                                            Barnstable County, MA.....................
12940....................................  Baton Rouge, LA............................       0.8009       0.8590
                                            Ascension Parish, LA......................
                                            East Baton Rouge Parish, LA...............
                                            East Feliciana Parish, LA.................
                                            Iberville Parish, LA......................
                                            Livingston Parish, LA.....................
                                            Pointe Coupee Parish, LA..................
                                            St. Helena Parish, LA.....................
                                            West Baton Rouge Parish, LA...............
                                            West Feliciana Parish, LA.................
12980....................................  Battle Creek, MI...........................       1.0052       1.0036
                                            Calhoun County, MI........................
13020....................................  Bay City, MI...............................       0.9394       0.9581
                                            Bay County, MI............................
13140....................................  Beaumont-Port Arthur, TX...................       0.8615       0.9029
                                            Hardin County, TX.........................
                                            Jefferson County, TX......................
                                            Orange County, TX.........................
13380....................................  Bellingham, WA.............................       1.1257       1.0845
                                            Whatcom County, WA........................
13460....................................  Bend, OR...................................       1.0586       1.0398
                                            Deschutes County, OR......................
13644....................................  \1\ Bethesda-Gaithersburg-Frederick, MD....       1.1016       1.0685
                                            Frederick County, MD......................
                                            Montgomery County, MD.....................
13740....................................  Billings, MT...............................       0.8870       0.9212
                                            Carbon County, MT.........................
                                            Yellowstone County, MT....................
13780....................................  Binghamton, NY.............................       0.9068       0.9352
                                            Broome County, NY.........................
                                            Tioga County, NY..........................
13820....................................  \1\ Birmingham-Hoover, AL..................       0.8855       0.9201
                                            Bibb County, AL...........................
                                            Blount County, AL.........................
                                            Chilton County, AL........................
                                            Jefferson County, AL......................
                                            St. Clair County, AL......................
                                            Shelby County, AL.........................
                                            Walker County, AL.........................

[[Page 47506]]

 
13900....................................  Bismarck, ND...............................       0.7311       0.8070
                                            Burleigh County, ND.......................
                                            Morton County, ND.........................
13980....................................  Blacksburg-Christiansburg-Radford, VA......       0.8129       0.8677
                                            Giles County, VA..........................
                                            Montgomery County, VA.....................
                                            Pulaski County, VA........................
                                            Radford City, VA..........................
14020....................................  Bloomington, IN............................
                                            Greene County, IN.........................
                                            Monroe County, IN.........................
                                            Owen County, IN                                  0.9323       0.9531
14060....................................  Bloomington-Normal, IL.....................       0.9483       0.9643
                                            McLean County, IL.........................
14260....................................  Boise City-Nampa, ID.......................       0.9496       0.9652
                                            Ada County, ID............................
                                            Boise County, ID..........................
                                            Canyon County, ID.........................
                                            Gem County, ID............................
                                            Owyhee County, ID.........................
14484....................................  \1\ Boston-Quincy, MA......................       1.1843       1.1228
                                            Norfolk County, MA........................
                                            Plymouth County, MA.......................
                                            Suffolk County, MA........................
14500....................................  Boulder, CO................................       1.0109       1.0075
                                            Boulder County, CO........................
14540....................................  Bowling Green, KY..........................       0.8085       0.8645
                                            Edmonson County, KY.......................
                                            Warren County, KY.........................
14740....................................  Bremerton-Silverdale, WA...................       1.0820       1.0555
                                            Kitsap County, WA.........................
14860....................................  Bridgeport-Stamford-Norwalk, CT............       1.2778       1.1828
                                            Fairfield County, CT......................
15180....................................  Brownsville-Harlingen, TX..................       0.9192       0.9439
                                            Cameron County, TX........................
15260....................................  Brunswick, GA..............................       0.9764       0.9838
                                            Brantley County, GA.......................
                                            Glynn County, GA..........................
                                            McIntosh County, GA.......................
15380....................................  \1\ Buffalo-Niagara Falls, NY..............       0.9588       0.9716
                                            Erie County, NY...........................
                                            Niagara County, NY........................
15500....................................  \2\ Burlington, NC.........................       0.8603       0.9021
                                            Alamance County, NC.......................
15540....................................  \2\ Burlington-South Burlington, VT........       1.0387       1.0263
                                            Chittenden County, VT.....................
                                            Franklin County, VT.......................
                                            Grand Isle County, VT.....................
15764....................................  \1\ Cambridge-Newton-Framingham, MA........       1.1216       1.0818
                                            Middlesex County, MA......................
15804....................................  \1,2\ Camden, NJ...........................       1.1616       1.1080
                                            Burlington County, NJ.....................
                                            Camden County, NJ.........................
                                            Gloucester County, NJ.....................
15940....................................  Canton-Massillon, OH.......................       0.8917       0.9245
                                            Carroll County, OH........................
                                            Stark County, OH..........................
15980....................................  Cape Coral-Fort Myers, FL..................       0.9485       0.9644
                                            Lee County, FL............................
16180....................................  \2\ Carson City, NV........................       0.9701       0.9794
                                            Carson City, NV...........................
16220....................................  Casper, WY.................................       0.9270       0.9494
                                            Natrona County, WY........................
16300....................................  Cedar Rapids, IA...........................       0.8684       0.9079
                                            Benton County, IA.........................
                                            Jones County, IA..........................
                                            Linn County, IA...........................
16580....................................  Champaign-Urbana, IL.......................       0.9315       0.9526
                                            Champaign County, IL......................
                                            Ford County, IL...........................

[[Page 47507]]

 
                                            Piatt County, IL..........................
16620....................................  Charleston, WV.............................       0.8393       0.8869
                                            Boone County, WV..........................
                                            Clay County, WV...........................
                                            Kanawha County, WV........................
                                            Lincoln County, WV........................
                                            Putnam County, WV.........................
16700....................................  Charleston-North Charleston, SC............       0.9101       0.9375
                                            Berkeley County, SC.......................
                                            Charleston County, SC.....................
                                            Dorchester County, SC.....................
16740....................................  \1\ Charlotte-Gastonia-Concord, NC-SC......       0.9505       0.9658
                                            Anson County, NC..........................
                                            Cabarrus County, NC.......................
                                            Gaston County, NC.........................
                                            Mecklenburg County, NC....................
                                            Union County, NC..........................
                                            York County, SC...........................
16820....................................  Charlottesville, VA........................       0.9160       0.9417
                                            Albemarle County, VA......................
                                            Fluvanna County, VA.......................
                                            Greene County, VA.........................
                                            Nelson County, VA.........................
                                            Charlottesville City, VA..................
16860....................................  Chattanooga, TN-GA.........................       0.8962       0.9277
                                            Catoosa County, GA........................
                                            Dade County, GA...........................
                                            Walker County, GA.........................
                                            Hamilton County, TN.......................
                                            Marion County, TN.........................
                                            Sequatchie County, TN.....................
16940....................................  Cheyenne, WY...............................       0.9204       0.9448
                                            Laramie County, WY........................
16974....................................  \1\ Chicago-Naperville-Joliet, IL..........       1.0588       1.0399
                                            Cook County, IL...........................
                                            DeKalb County, IL.........................
                                            DuPage County, IL.........................
                                            Grundy County, IL.........................
                                            Kane County, IL...........................
                                            Kendall County, IL........................
                                            McHenry County, IL........................
                                            Will County, IL...........................
17020....................................  \2\ Chico, CA..............................       1.1735       1.1158
                                            Butte County, CA..........................
17140....................................  \1\ Cincinnati-Middletown, OH-KY-IN........       0.9661       0.9767
                                            Dearborn County, IN.......................
                                            Franklin County, IN.......................
                                            Ohio County, IN...........................
                                            Boone County, KY..........................
                                            Bracken County, KY........................
                                            Campbell County, KY.......................
                                            Gallatin County, KY.......................
                                            Grant County, KY..........................
                                            Kenton County, KY.........................
                                            Pendleton County, KY......................
                                            Brown County, OH..........................
                                            Butler County, OH.........................
                                            Clermont County, OH.......................
                                            Hamilton County, OH.......................
                                            Warren County, OH.........................
17300....................................  Clarksville, TN-KY.........................       0.8218       0.8742
                                            Christian County, KY......................
                                            Trigg County, KY..........................
                                            Montgomery County, TN.....................
                                            Stewart County, TN........................
17420....................................  Cleveland, TN..............................       0.8171       0.8708
                                            Bradley County, TN........................
                                            Polk County, TN...........................
17460....................................  \1\ Cleveland-Elyria-Mentor, OH............       0.9345       0.9547
                                            Cuyahoga County, OH.......................

[[Page 47508]]

 
                                            Geauga County, OH.........................
                                            Lake County, OH...........................
                                            Lorain County, OHMedina County, OH........
17660....................................  Coeur d'Alene, ID..........................       0.9355       0.9554
                                            Kootenai County, ID.......................
17780....................................  College Station-Bryan, TX..................       0.9171       0.9425
                                            Brazos County, TX.........................
                                            Burleson County, TX.......................
                                            Robertson County, TX......................
17820....................................  Colorado Springs, CO.......................       0.9466       0.9631
                                            El Paso County, CO........................
                                            Teller County, CO.........................
17860....................................  Columbia, MO...............................       0.8537       0.8973
                                            Boone County, MO..........................
                                            Howard County, MO.........................
17900....................................  Columbia, SC...............................       0.8829       0.9182
                                            Calhoun County, SC........................
                                            Fairfield County, SC......................
                                            Kershaw County, SC........................
                                            Lexington County, SC......................
                                            Richland County, SC.......................
                                            Saluda County, SC.........................
17980....................................  Columbus, GA-AL............................       0.9019       0.9317
                                            Russell County, AL........................
                                            Chattahoochee County, GA..................
                                            Harris County, GA.........................
                                            Marion County, GA.........................
                                            Muscogee County, GA.......................
18020....................................  Columbus, IN...............................       0.9625       0.9742
                                            Bartholomew County, IN....................
18140....................................  \1\ Columbus, OH...........................       1.0024       1.0016
                                            Delaware County, OH.......................
                                            Fairfield County, OH......................
                                            Franklin County, OH.......................
                                            Licking County, OH........................
                                            Madison County, OH........................
                                            Morrow County, OH.........................
                                            Pickaway County, OH.......................
                                            Union County, OH..........................
18580....................................  Corpus Christi, TX.........................       0.8456       0.8915
                                            Aransas County, TX........................
                                            Nueces County, TX.........................
                                            San Patricio County, TX...................
18700....................................  Corvallis, OR..............................       1.0701       1.0475
                                            Benton County, OR.........................
19060....................................  \2\ Cumberland, MD-WV (MD Hospitals).......       0.8911       0.9241
                                            Allegany County, MD.......................
                                            Mineral County, WV........................
19060....................................  Cumberland, MD-WV (WV Hospitals)...........       0.7962       0.8555
                                            Allegany County, MD.......................
                                            Mineral County, WV........................
19124....................................  \1\ Dallas-Plano-Irving, TX................       0.9785       0.9852
                                            Collin County, TX.........................
                                            Dallas County, TX.........................
                                            Delta County, TX..........................
                                            Denton County, TX.........................
                                            Ellis County, TX..........................
                                            Hunt County, TX...........................
                                            Kaufman County, TX........................
                                            Rockwall County, TX.......................
19140....................................  Dalton, GA.................................       0.8582       0.9006
                                            Murray County, GA.........................
                                            Whitfield County, GA......................
19180....................................  Danville, IL...............................       0.9244       0.9476
                                            Vermilion County, IL......................
19260....................................  Danville, VA...............................       0.8296       0.8799
                                            Pittsylvania County, VA...................
                                            Danville City, VA.........................
19340....................................  Davenport-Moline-Rock Island, IA-IL........       0.8893       0.9228
                                            Henry County, IL..........................

[[Page 47509]]

 
                                            Mercer County, IL.........................
                                            Rock Island County, IL....................
                                            Scott County, IA..........................
19380....................................  Dayton, OH.................................       0.9278       0.9500
                                            Greene County, OH.........................
                                            Miami County, OH..........................
                                            Montgomery County, OH.....................
                                            Preble County, OH.........................
19460....................................  Decatur, AL................................       0.7832       0.8459
                                            Lawrence County, AL.......................
                                            Morgan County, AL.........................
19500....................................  \2\ Decatur, IL............................
                                            Macon County, IL0.83450.8835..............
19660....................................  Deltona-Daytona Beach-Ormond Beach, FL.....       0.8943       0.9264
                                            Volusia County, FL........................
19740....................................  \1\ Denver-Aurora, CO......................       1.0454       1.0309
                                            Adams County, CO..........................
                                            Arapahoe County, CO.......................
                                            Broomfield County, CO.....................
                                            Clear Creek County, CO....................
                                            Denver County, CO.........................
                                            Douglas County, CO........................
                                            Elbert County, CO.........................
                                            Gilpin County, CO.........................
                                            Jefferson County, CO......................
                                            Park County, CO...........................
19780....................................  Des Moines-West Des Moines, IA.............       0.9157       0.9415
                                            Dallas County, IA.........................
                                            Guthrie County, IA........................
                                            Madison County, IA........................
                                            Polk County, IA...........................
                                            Warren County, IA.........................
19804....................................  \1\ Detroit-Livonia-Dearborn, MI...........       1.0095       1.0065
                                            Wayne County, MI..........................
20020....................................  \2\ Dothan, AL.............................       0.7567       0.8262
                                            Geneva County, AL.........................
                                            Henry County, AL..........................
                                            Houston County, AL........................
20100....................................  Dover, DE..................................       1.0396       1.0270
                                            Kent County, DE...........................
20220....................................  Dubuque, IA................................       0.8875       0.9215
                                            Dubuque County, IA........................
20260....................................  Duluth, MN-WI..............................       1.0081       1.0055
                                            Carlton County, MN........................
                                            St. Louis County, MN......................
                                            Douglas County, WI........................
20500....................................  Durham, NC.................................       0.9738       0.9820
                                            Chatham County, NC........................
                                            Durham County, NC.........................
                                            Orange County, NC.........................
                                            Person County, NC.........................
20740....................................  \2\ Eau Claire, WI.........................        0.968      40.9783
                                            Chippewa County, WI.......................
                                            Eau Claire County, WI.....................
20764....................................  \1,2\ Edison, NJ...........................       1.1616       1.1080
                                            Middlesex County, NJ......................
                                            Monmouth County, NJ.......................
                                            Ocean County, NJ..........................
                                            Somerset County, NJ.......................
20940....................................  \2\ El Centro, CA..........................       1.1735       1.1158
                                            Imperial County, CA.......................
21060....................................  Elizabethtown, KY..........................       0.8617       0.9031
                                            Hardin County, KY.........................
                                            Larue County, KY..........................
21140....................................  Elkhart-Goshen, IN.........................       0.9540       0.9683
                                            Elkhart County, IN........................
21300....................................  \2\ Elmira, NY.............................       0.8416       0.8886
                                            Chemung County, NY........................
21340....................................  El Paso, TX................................       0.9140       0.9403
                                            El Paso County, TX........................

[[Page 47510]]

 
21500....................................  Erie, PA...................................       0.8503       0.8949
                                            Erie County, PA...........................
21660....................................  Eugene-Springfield, OR.....................       1.1002       1.0676
                                            Lane County, OR...........................
21780....................................  \2\ Evansville, IN-KY (IN Hospitals).......       0.8568       0.8996
                                            Gibson County, IN.........................
                                            Posey County, IN..........................
                                            Vanderburgh County, IN....................
                                            Warrick County, IN........................
                                            Henderson County, KY......................
                                            Webster County, KY........................
21780....................................  Evansville, IN-KY (KY Hospitals)...........       0.8465       0.8922
                                            Gibson County, IN.........................
                                            Posey County, IN..........................
                                            Vanderburgh County, IN....................
                                            Warrick County, IN........................
                                            Henderson County, KY......................
                                            Webster County, KY........................
21820....................................  \2\ Fairbanks, AK..........................       1.2083       1.1383
                                            Fairbanks North Star Borough, AK..........
21940....................................  Fajardo, PR................................       0.4365       0.5668
                                            Ceiba Municipio, PR.......................
                                            Fajardo Municipio, PR.....................
                                            Luquillo Municipio, PR....................
22020....................................  \2\ Fargo, ND-MN (MN Hospitals)............       0.9113       0.9384
                                            Clay County, MN...........................
                                            Cass County, ND...........................
22020....................................  Fargo, ND-MN (ND Hospitals)................       0.7943       0.8541
                                            Clay County, MN...........................
                                            Cass County, ND...........................
22140....................................  Farmington, NM.............................       0.9282       0.9503
                                            San Juan County, NM.......................
22180....................................  Fayetteville, NC...........................       0.9917       0.9943
                                            Cumberland County, NC.....................
                                            Hoke County, NC...........................
22220....................................  Fayetteville-Springdale-Rogers, AR-MO......       0.8871       0.9212
                                            Benton County, AR.........................
                                            Madison County, AR........................
                                            Washington County, AR.....................
                                            McDonald County, MO.......................
22380....................................  Flagstaff, AZ..............................       1.1551       1.1038
                                            Coconino County, AZ.......................
22420....................................  Flint, MI..................................       1.1012       1.0682
                                            Genesee County, MI........................
22500....................................  \2\ Florence, SC...........................       0.8707       0.9095
                                            Darlington County, SC.....................
                                            Florence County, SC.......................
22520....................................  Florence-Muscle Shoals, AL.................       0.7692       0.8355
                                            Colbert County, AL........................
                                            Lauderdale County, AL.....................
22540....................................  Fond du Lac, WI............................       0.9887       0.9922
                                            Fond du Lac County, WI....................
22660....................................  Fort Collins-Loveland, CO..................       0.9579       0.9710
                                            Larimer County, CO........................
22744....................................  \1\ Fort Lauderdale-Pompano Beach-Deerfield       1.0247       1.0168
                                            Beach, FL.
                                            Broward County, FL........................
22900....................................  Fort Smith, AR-OK..........................       0.8052       0.8621
                                            Crawford County, AR.......................
                                            Franklin County, AR.......................
                                            Sebastian County, AR......................
                                            Le Flore County, OK.......................
                                            Sequoyah County, OK.......................
23020....................................  \2\ Fort Walton Beach-Crestview-Destin, FL.       0.8733       0.9114
                                            Okaloosa County, FL.......................
23060....................................  Fort Wayne, IN.............................       0.9041       0.9333
                                            Allen County, IN..........................
                                            Wells County, IN..........................
                                            Whitley County, IN........................
23104....................................  \1\ Fort Worth-Arlington, TX...............       0.9636       0.9749
                                            Johnson County, TX........................

[[Page 47511]]

 
                                            Parker County, TX.........................
                                            Tarrant County, TX........................
                                            Wise County, TX...........................
23420....................................  \2\ Fresno, CA.............................       1.1735       1.1158
                                            Fresno County, CA.........................
23460....................................  Gadsden, AL................................       0.8144       0.8688
                                            Etowah County, AL.........................
23540....................................  Gainesville, FL............................       0.9301       0.9516
                                            Alachua County, FL........................
                                            Gilchrist County, FL......................
23580....................................  Gainesville, GA............................       0.9418       0.9598
                                            Hall County, GA...........................
23844....................................  Gary, IN...................................       0.9241       0.9474
                                            Jasper County, IN.........................
                                            Lake County, IN...........................
                                            Newton County, IN.........................
                                            Porter County, IN.........................
24020....................................  Glens Falls, NY............................       0.8522       0.8963
                                            Warren County, NY.........................
                                            Washington County, NY.....................
24140....................................  Goldsboro, NC..............................       0.9271       0.9495
                                            Wayne County, NC..........................
24220....................................  \2\ Grand Forks, ND-MN (MN Hospitals)......       0.9113       0.9384
                                            Polk County, MN...........................
                                            Grand Forks County, ND....................
24220....................................  Grand Forks, ND-MN (ND Hospitals)..........       0.8048       0.8618
                                            Polk County, MN...........................
                                            Grand Forks County, ND....................
24300....................................  Grand Junction, CO.........................       1.0135       1.0092
                                            Mesa County, CO...........................
24340....................................  Grand Rapids-Wyoming, MI...................       0.9374       0.9567
                                            Barry County, MI..........................
                                            Ionia County, MI..........................
                                            Kent County, MI...........................
                                            Newaygo County, MI........................
24500....................................  Great Falls, MT............................       0.8761       0.9134
                                            Cascade County, MT........................
24540....................................  Greeley, CO................................       0.9996       0.9997
                                            Weld County, CO...........................
24580....................................  \2\ Green Bay, WI..........................       0.9684       0.9783
                                            Brown County, WI..........................
                                            Kewaunee County, WI.......................
                                            Oconto County, WI.........................
24660....................................  Greensboro-High Point, NC..................       0.9106       0.9379
                                            Guilford County, NC.......................
                                            Randolph County, NC.......................
                                            Rockingham County, NC.....................
24780....................................  Greenville, NC.............................       0.9267       0.9492
                                            Greene County, NC.........................
                                            Pitt County, NC...........................
24860....................................  Greenville-Mauldin-Easley, SC..............       0.9636       0.9749
                                            Greenville County, SC.....................
                                            Laurens County, SC........................
                                            Pickens County, SC........................
25020....................................  Guayama, PR................................       0.2944       0.4328
                                            Arroyo Municipio, PR......................
                                            Guayama Municipio, PR.....................
                                            Patillas Municipio, PR....................
25060....................................  Gulfport-Biloxi, MS........................       0.8607       0.9024
                                            Hancock County, MS........................
                                            Harrison County, MS.......................
                                            Stone County, MS..........................
25180....................................  Hagerstown-Martinsburg, MD-WV..............       0.9255       0.9484
                                            Washington County, MD.....................
                                            Berkeley County, WV.......................
                                            Morgan County, WV.........................
25260....................................  \2\ Hanford-Corcoran, CA...................       1.1735       1.1158
                                            Kings County, CA..........................
25420....................................  Harrisburg-Carlisle, PA....................       0.9230       0.9466
                                            Cumberland County, PA.....................

[[Page 47512]]

 
                                            Dauphin County, PA........................
                                            Perry County, PA..........................
25500....................................  Harrisonburg, VA...........................       0.8895       0.9229
                                            Rockingham County, VA.....................
                                            Harrisonburg City, VA.....................
25540....................................  \1,2\ Hartford-West Hartford-East Hartford,       1.2432       1.1608
                                            CT.
                                            Hartford County, CT.......................
                                            Middlesex County, CT......................
                                            Tolland County, CT........................
25620....................................  \2\ Hattiesburg, MS........................       0.7752       0.8400
                                            Forrest County, MS........................
                                            Lamar County, MS..........................
                                            Perry County, MS..........................
25860....................................  Hickory-Lenoir-Morganton, NC...............       0.8972       0.9284
                                            Alexander County, NC......................
                                            Burke County, NC..........................
                                            Caldwell County, NC.......................
                                            Catawba County, NC........................
25980....................................  Hinesville-Fort Stewart, GA................       0.7861       0.8481
                                            Liberty County, GALong County, GA.........
26100....................................  Holland-Grand Haven, MI....................       0.9063       0.9348
                                            Ottawa County, MI.........................
26180....................................  Honolulu, HI...............................       1.1305       1.0876
                                            Honolulu County, HI.......................
26300....................................  Hot Springs, AR............................       0.9105       0.9378
                                            Garland County, AR........................
26380....................................  Houma-Bayou Cane-Thibodaux, LA.............       0.7975       0.8565
                                            Lafourche Parish, LA......................
                                            Terrebonne Parish, LA.....................
26420....................................  \1\ Houston-Sugar Land-Baytown, TX.........       0.9996       0.9997
                                            Austin County, TX.........................
                                            Brazoria County, TX.......................
                                            Chambers County, TX.......................
                                            Fort Bend County, TX......................
                                            Galveston County, TX......................
                                            Harris County, TX.........................
                                            Liberty County, TX........................
                                            Montgomery County, TX.....................
                                            San Jacinto County, TX....................
                                            Waller County, TX.........................
26580....................................  Huntington-Ashland, WV-KY-OH...............       0.8878       0.9217
                                            Boyd County, KY...........................
                                            Greenup County, KY........................
                                            Lawrence County, OH.......................
                                            Cabell County, WV.........................
                                            Wayne County, WV..........................
26620....................................  Huntsville, AL.............................       0.9017       0.9316
                                            Limestone County, AL......................
                                            Madison County, AL........................
26820....................................  Idaho Falls, ID............................       0.9272       0.9496
                                            Bonneville County, ID.....................
                                            Jefferson County, ID......................
26900....................................  \1\ Indianapolis-Carmel, IN................       0.9717       0.9805
                                            Boone County, IN..........................
                                            Brown County, IN..........................
                                            Hamilton County, IN.......................
                                            Hancock County, IN........................
                                            Hendricks County, IN......................
                                            Johnson County, IN........................
                                            Marion County, IN.........................
                                            Morgan County, IN.........................
                                            Putnam County, IN.........................
                                            Shelby County, IN.........................
26980....................................  Iowa City, IA..............................       0.9423       0.9601
                                            Johnson County, IA........................
                                            Washington County, IA.....................
27060....................................  Ithaca, NY.................................       0.9709       0.9800
                                            Tompkins County, NY.......................
27100....................................  Jackson, MI................................       0.9460       0.9627
                                            Jackson County, MI........................

[[Page 47513]]

 
27140....................................  Jackson, MS................................       0.7950       0.8546
                                            Copiah County, MS.........................
                                            Hinds County, MS..........................
                                            Madison County, MS........................
                                            Rankin County, MS.........................
                                            Simpson County, MS........................
27180....................................  Jackson, TN................................       0.8591       0.9012
                                            Chester County, TN........................
                                            Madison County, TN........................
27260....................................  \1\ Jacksonville, FL.......................       0.9089       0.9367
                                            Baker County, FL..........................
                                            Clay County, FL...........................
                                            Duval County, FL..........................
                                            Nassau County, FL.........................
                                            St. Johns County, FL......................
27340....................................  \2\ Jacksonville, NC.......................       0.8603       0.9021
                                            Onslow County, NC.........................
27500....................................  Janesville, WI.............................       0.9852       0.9898
                                            Rock County, WI...........................
27620....................................  Jefferson City, MO.........................       0.8702       0.9092
                                            Callaway County, MO.......................
                                            Cole County, MO...........................
                                            Moniteau County, MO.......................
                                            Osage County, MO..........................
27740....................................  \2\ Johnson City, TN.......................       0.7917       0.8522
                                            Carter County, TN.........................
                                            Unicoi County, TN.........................
                                            Washington County, TN.....................
27780....................................  \2\ Johnstown, PA..........................       0.8357       0.8843
                                            Cambria County, PA........................
27860....................................  Jonesboro, AR..............................       0.8503       0.8949
                                            Craighead County, AR......................
                                            Poinsett County, AR.......................
27900....................................  Joplin, MO.................................       0.9211       0.9453
                                            Jasper County, MO.........................
                                            Newton County, MO.........................
28020....................................  Kalamazoo-Portage, MI......................       1.0500       1.0340
                                            Kalamazoo County, MI......................
                                            Van Buren County, MI......................
28100....................................  Kankakee-Bradley, IL V.....................       1.0144       1.0098
                                            Kankakee County, IL.......................
28140....................................  \1\ Kansas City, MO-KS.....................       0.9318       0.9528
                                            Franklin County, KS.......................
                                            Johnson County, KS........................
                                            Leavenworth County, KS....................
                                            Linn County, KS...........................
                                            Miami County, KS..........................
                                            Wyandotte County, KS......................
                                            Bates County, MO..........................
                                            Caldwell County, MO.......................
                                            Cass County, MO...........................
                                            Clay County, MO...........................
                                            Clinton County, MO........................
                                            Jackson County, MO........................
                                            Lafayette County, MO......................
                                            Platte County, MO.........................
                                            Ray County, MO............................
28420....................................  \2\ Kennewick-Richland-Pasco, WA...........       1.0558       1.0379
                                            Benton County, WA.........................
                                            Franklin County, WA.......................
28660....................................  Killeen-Temple-Fort Hood, TX...............       0.8303       0.8804
                                            Bell County, TX...........................
                                            Coryell County, TX........................
                                            Lampasas County, TX.......................
28700....................................  \2\ Kingsport-Bristol-Bristol, TN-VA (VA          0.8073       0.8636
                                            Hospitals).
                                            Hawkins County, TN........................
                                            Sullivan County, TN.......................
                                            Bristol City, VA..........................
                                            Scott County, VA..........................
                                            Washington County, VA.....................

[[Page 47514]]

 
28700....................................  \2\ Kingsport-Bristol-Bristol, TN-VA (TN
                                            Hospitals).
                                            Hawkins County, TN........................       0.7917       0.8522
                                            Sullivan County, TN.......................
                                            Bristol City, VA..........................
                                            Scott County, VA..........................
                                            Washington County, VA.....................
28740....................................  Kingston, NY...............................       0.9578       0.9709
                                            Ulster County, NY.........................
28940....................................  Knoxville, TN..............................       0.8012       0.8592
                                            Anderson County, TN.......................
                                            Blount County, TN.........................
                                            Knox County, TN...........................
                                            Loudon County, TN.........................
                                            Union County, TN..........................
29020....................................  Kokomo, IN.................................       0.9463       0.9629
                                            Howard County, IN.........................
                                            Tipton County, IN.........................
29100....................................  La Crosse, WI-MN...........................       0.9698       0.9792
                                            Houston County, MN........................
                                            La Crosse County, WI......................
29140....................................  Lafayette, IN..............................       0.8676       0.9073
                                            Benton County, IN.........................
                                            Carroll County, IN........................
                                            Tippecanoe County, IN.....................
29180....................................  Lafayette, LA..............................       0.8322       0.8818
                                            Lafayette Parish, LA......................
                                            St. Martin Parish, LA.....................
29340....................................  Lake Charles, LA...........................       0.7783       0.8423
                                            Calcasieu Parish, LA......................
                                            Cameron Parish, LA........................
29404....................................  Lake County-Kenosha County, IL-WI..........       1.0583       1.0396
                                            Lake County, IL...........................
                                            Kenosha County, WI........................
29420....................................  Lake Havasu City-Kingman, AZ...............       0.9333       0.9538
                                            Mohave County, AZ.........................
29460....................................  Lakeland, FL...............................       0.8834       0.9186
                                            Polk County, FL...........................
29540....................................  Lancaster, PA..............................       0.9650       0.9759
                                            Lancaster County, PA......................
29620....................................  Lansing-East Lansing, MI...................       1.0047       1.0032
                                            Clinton County, MI........................
                                            Eaton County, MI..........................
                                            Ingham County, MI.........................
29700....................................  Laredo, TX.................................       0.8501       0.8947
                                            Webb County, TX...........................
29740....................................  \2\ Las Cruces, NM.........................       0.8965       0.9279
                                            Dona Ana County, NM.......................
29820....................................  \1\ Las Vegas-Paradise, NV.................       1.1452       1.0973
                                            Clark County, NV..........................
29940....................................  Lawrence, KS...............................       0.8170       0.8707
                                            Douglas County, KS........................
30020....................................  Lawton, OK.................................       0.8405       0.8878
                                            Comanche County, OK.......................
30140....................................  \2\ Lebanon, PA............................       0.8357       0.8843
                                            Lebanon County, PA........................
30300....................................  \2\ Lewiston, ID-WA (WA Hospitals).........       1.0558       1.0379
                                            Nez Perce County, ID......................
                                            Asotin County, WA.........................
30300....................................  Lewiston, ID-WA (ID Hospitals).............       0.9225       0.9463
                                            Nez Perce County, ID......................
                                            Asotin County, WA.........................
30340....................................  Lewiston-Auburn, ME........................       0.9289       0.9507
                                            Androscoggin County, ME...................
30460....................................  Lexington-Fayette, KY......................       0.9002       0.9305
                                            Bourbon County, KY........................
                                            Clark County, KY..........................
                                            Fayette County, KY........................
                                            Jessamine County, KY......................
                                            Scott County, KY..........................
                                            Woodford County, KY.......................

[[Page 47515]]

 
30620....................................  Lima, OH...................................       0.9307       0.9520
                                            Allen County, OH..........................
30700....................................  Lincoln, NE................................       0.9872       0.9912
                                            Lancaster County, NE......................
                                            Seward County, NE.........................
30780....................................  Little Rock-North Little Rock-Conway, AR...       0.8960       0.9276
                                            Faulkner County, AR.......................
                                            Grant County, AR..........................
                                            Lonoke County, AR.........................
                                            Perry County, AR..........................
                                            Pulaski County, AR........................
                                            Saline County, AR.........................
30860....................................  Logan, UT-ID...............................       0.9214       0.9455
                                            Franklin County, ID.......................
                                            Cache County, UT..........................
30980....................................  Longview, TX...............................       0.8871       0.9212
                                            Gregg County, TX..........................
                                            Rusk County, TX...........................
                                            Upshur County, TX.........................
31020....................................  Longview, WA...............................       1.1027       1.0692
                                            Cowlitz County, WA........................
31084....................................  \1,2\ Los Angeles-Long Beach-Glendale, CA..       1.1735       1.1158
                                            Los Angeles County, CA....................
31140....................................  \1\ Louisville-Jefferson County, KY-IN.....       0.9029       0.9324
                                            Clark County, IN..........................
                                            Floyd County, IN..........................
                                            Harrison County, IN.......................
                                            Washington County, IN.....................
                                            Bullitt County, KY........................
                                            Henry County, KY..........................
                                            Jefferson County, KY......................
                                            Meade County, KY..........................
                                            Nelson County, KY.........................
                                            Oldham County, KY.........................
                                            Shelby County, KY.........................
                                            Spencer County, KY........................
                                            Trimble County, KY........................
31180....................................  Lubbock, TX................................       0.8641       0.9048
                                            Crosby County, TX.........................
                                            Lubbock County, TX........................
31340....................................  Lynchburg, VA..............................       0.8605       0.9022
                                            Amherst County, VA........................
                                            Appomattox County, VA.....................
                                            Bedford County, VA........................
                                            Campbell County, VA.......................
                                            Bedford City, VA..........................
                                            Lynchburg City, VA........................
31420....................................  Macon, GA..................................       0.9748       0.9827
                                            Bibb County, GA...........................
                                            Crawford County, GA.......................
                                            Jones County, GA..........................
                                            Monroe County, GA.........................
                                            Twiggs County, GA.........................
31460....................................  \2\ Madera, CA.............................       1.1735       1.1158
                                            Madera County, CA.........................
31540....................................  Madison, WI................................
                                            Columbia County, WI.......................       1.1176       1.0791
                                            Dane County, WI...........................
                                            Iowa County, WI...........................
31700....................................  \2\ Manchester-Nashua, NH..................       1.1259       1.0846
                                            Hillsborough County, NH...................
31900....................................  Mansfield, OH..............................       0.9209       0.9451
                                            Richland County, OH.......................
32420....................................  Mayagnez, PR...............................       0.3657       0.5021
                                            Hormigueros Municipio, PR.................
                                            Mayaguez Municipio, PR....................
32580....................................  McAllen-Edinburg-Mission, TX...............       0.9135       0.9399
                                            Hidalgo County, TX........................
32780....................................  Medford, OR................................       1.0297       1.0202
                                            Jackson County, OR........................

[[Page 47516]]

 
32820....................................  \1\ Memphis, TN-MS-AR......................       0.9313       0.9524
                                            Crittenden County, AR.....................
                                            DeSoto County, MS.........................
                                            Marshall County, MS.......................
                                            Tate County, MS...........................
                                            Tunica County, MS.........................
                                            Fayette County, TN........................
                                            Shelby County, TN.........................
                                            Tipton County, TN.........................
32900....................................  Merced, CA.................................       1.1980       1.1317
                                            Merced County, CA.........................
33124....................................  \1\ Miami-Miami Beach-Kendall, FL..........       1.0008       1.0005
                                            Miami-Dade County, FL.....................
33140....................................  Michigan City-La Porte, IN.................       0.8786       0.9152
                                            LaPorte County, IN........................
33260....................................  Midland, TX................................       0.9711       0.9801
                                            Midland County, TX........................
33340....................................  \1\ Milwaukee-Waukesha-West Allis, WI......       1.0295       1.0201
                                            Milwaukee County, WI......................
                                            Ozaukee County, WI........................
                                            Washington County, WI.....................
                                            Waukesha County, WI.......................
33460....................................  \1\ Minneapolis-St. Paul-Bloomington, MN-WI       1.0896       1.0605
                                            Anoka County, MN..........................
                                            Carver County, MN.........................
                                            Chisago County, MN........................
                                            Dakota County, MN.........................
                                            Hennepin County, MN.......................
                                            Isanti County, MN.........................
                                            Ramsey County, MN.........................
                                            Scott County, MN..........................
                                            Sherburne County, MN......................
                                            Washington County, MN.....................
                                            Wright County, MN.........................
                                            Pierce County, WI.........................
                                            St. Croix County, WI......................
33540....................................  Missoula, MT...............................       0.8738       0.9118
                                            Missoula County, MT.......................
33660....................................  Mobile, AL.................................       0.7947       0.8544
                                            Mobile County, AL.........................
33700....................................  Modesto, CA................................       1.2019       1.1342
                                            Stanislaus County, CA.....................
33740....................................  Monroe, LA.................................       0.7869       0.8486
                                            Ouachita Parish, LA.......................
                                            Union Parish, LA..........................
33780....................................  Monroe, MI.................................       0.9469       0.9633
                                            Monroe County, MI.........................
33860....................................  Montgomery, AL.............................       0.8111       0.8664
                                            Autauga County, AL........................
                                            Elmore County, AL.........................
                                            Lowndes County, AL........................
                                            Montgomery County, AL.....................
34060....................................  Morgantown, WV.............................       0.8407       0.8880
                                            Monongalia County, WV.....................
                                            Preston County, WV........................
34100....................................  \2\ Morristown, TN.........................       0.7917       0.8522
                                            Grainger County, TN.......................
                                            Hamblen County, TN........................
                                            Jefferson County, TN......................
34580....................................  \2\ Mount Vernon-Anacortes, WA.............       1.0558       1.0379
                                            Skagit County, WA.........................
34620....................................  \2\ Muncie, IN.............................        0.858       0.8996
                                            Delaware County, IN.......................
34740....................................  Muskegon-Norton Shores, MI.................       0.9968       0.9978
                                            Muskegon County, MI.......................
34820....................................  \2\ Myrtle Beach-Conway-North Myrtle Beach,       0.8707       0.9095
                                            SC.
                                            Horry County, SC..........................
34900....................................  Napa, CA...................................       1.3959       1.2566
                                            Napa County, CA...........................
34940....................................  Naples-Marco Island, FL....................       0.9618       0.9737

[[Page 47517]]

 
                                            Collier County, FL........................
34980....................................  \1\ Nashville-Davidson-Murfreesboro-              0.9618       0.9737
                                            Franklin, TN.
                                            Cannon County, TN.........................
                                            Cheatham County, TN.......................
                                            Davidson County, TN.......................
                                            Dickson County, TN........................
                                            Hickman County, TN........................
                                            Macon County, TN..........................
                                            Robertson County, TN......................
                                            Rutherford County, TN.....................
                                            Smith County, TN..........................
                                            Sumner County, TN.........................
                                            Trousdale County, TN......................
                                            Williamson County, TN.....................
                                            Wilson County, TN.........................
35004....................................  \1\ Nassau-Suffolk, NY.....................       1.2877       1.1891
                                            Nassau County, NY.........................
                                            Suffolk County, NY........................
35084....................................  \1\ Newark-Union, NJ-PA....................       1.1673       1.1117
                                            Essex County, NJ..........................
                                            Hunterdon County, NJ......................
                                            Morris County, NJ.........................
                                            Sussex County, NJ.........................
                                            Union County, NJ..........................
                                            Pike County, PA...........................
35300....................................  \2\ New Haven-Milford, CT..................       1.2432       1.1608
                                            New Haven County, CT......................
35380....................................  \1\ New Orleans-Metairie-Kenner, LA........       0.8711       0.9098
                                            Jefferson Parish, LA......................
                                            Orleans Parish, LA........................
                                            Plaquemines Parish, LA....................
                                            St. Bernard Parish, LA....................
                                            St. Charles Parish, LA....................
                                            St. John the Baptist Parish, LA...........
                                            St. Tammany Parish, LA....................
35644....................................  \1\ New York-White Plains-Wayne, NY-NJ.....       1.3229       1.2112
                                            Bergen County, NJ.........................
                                            Hudson County, NJ.........................
                                            Passaic County, NJ........................
                                            Bronx County, NY..........................
                                            Kings County, NY..........................
                                            New York County, NY.......................
                                            Putnam County, NY.........................
                                            Queens County, NY.........................
                                            Richmond County, NY.......................
                                            Rockland County, NY.......................
                                            Westchester County, NY....................
35660....................................  Niles-Benton Harbor, MI....................       0.9133       0.9398
                                            Berrien County, MI........................
35980....................................  \2\ Norwich-New London, CT.................       1.2432       1.1608
                                            New London County, CT.....................
36084....................................  \1\ Oakland-Fremont-Hayward, CA............       1.5343       1.3406
                                            Alameda County, CA........................
                                            Contra Costa County, CA...................
36100....................................  \2\ Ocala, FL..............................       0.8733       0.9114
                                            Marion County, FL.........................
36140....................................  \2\ Ocean City, NJ.........................       1.1616       1.1080
                                            Cape May County, NJ.......................
36220....................................  Odessa, TX.................................       0.9954       0.9968
                                            Ector County, TX..........................
36260....................................  Ogden-Clearfield, UT.......................       0.9053       0.9341
                                            Davis County, UT..........................
                                            Morgan County, UT.........................
                                            Weber County, UT..........................
36420....................................  \1\ Oklahoma City, OK......................       0.8754       0.9129
                                            Canadian County, OK.......................
                                            Cleveland County, OK......................
                                            Grady County, OK..........................
                                            Lincoln County, OK........................
                                            Logan County, OK..........................

[[Page 47518]]

 
                                            McClain County, OK........................
                                            Oklahoma County, OK.......................
36500....................................  Olympia, WA................................       1.1419       1.0951
                                            Thurston County, WA.......................
36540....................................  Omaha-Council Bluffs, NE-IA................       0.9473       0.9636
                                            Harrison County, IA.......................
                                            Mills County, IA..........................
                                            Pottawattamie County, IA..................
                                            Cass County, NE...........................
                                            Douglas County, NE........................
                                            Sarpy County, NE..........................
                                            Saunders County, NE.......................
                                            Washington County, NE.....................
36740....................................  \1\ Orlando-Kissimmee, FL..................       0.9284       0.9504
                                            Lake County, FL...........................
                                            Orange County, FL.........................
                                            Osceola County, FL........................
                                            Seminole County, FL.......................
36780....................................  \2\ Oshkosh-Neenah, WI.....................       0.9684       0.9783
                                            Winnebago County, WI......................
36980....................................  Owensboro, KY..............................       0.8697       0.9088
                                            Daviess County, KY........................
                                            Hancock County, KY........................
                                            McLean County, KY.........................
37100....................................  \2\ Oxnard-Thousand Oaks-Ventura, CA.......       1.1735       1.1158
                                            Ventura County, CA........................
37340....................................  Palm Bay-Melbourne-Titusville, FL..........       0.9380       0.9571
                                            Brevard County, FL........................
37380....................................  Palm Coast, FL.............................       0.8737       0.9117
                                            Flager County, FL.........................
37460....................................  \2\ Panama City-Lynn Haven, FL.............       0.8733       0.9114
                                            Bay County, FL............................
37620....................................  \2\ Parkersburg-Marietta-Vienna, WV-OH (OH
                                            Hospitals).
                                            Washington County, OH.....................       0.8696       0.9088
                                            Pleasants County, WV......................
                                            Wirt County, WV...........................
                                            Wood County, WV...........................
37620....................................  Parkersburg-Marietta-Vienna, WV-OH (WV            0.8258       0.8772
                                            Hospitals).
                                            Washington County, OH.....................
                                            Pleasants County, WV......................
                                            Wirt County, WV...........................
                                            Wood County, WV...........................
37700....................................  Pascagoula, MS.............................       0.8539       0.8975
                                            George County, MS.........................
                                            Jackson County, MS........................
37764....................................  Peabody, MA................................       1.0599       1.0406
                                            Essex County, MA..........................
37860....................................  \2\ Pensacola-Ferry Pass-Brent, FL.........       0.8733       0.9114
                                            Escambia County, FL.......................
                                            Santa Rosa County, FL.....................
37900....................................  Peoria, IL.................................       0.9385       0.9575
                                            Marshall County, IL.......................
                                            Peoria County, IL.........................
                                            Stark County, IL..........................
                                            Tazewell County, IL.......................
                                            Woodford County, IL.......................
37964....................................  \1\ Philadelphia, PA.......................       1.0892       1.0603
                                            Bucks County, PA..........................
                                            Chester County, PA........................
                                            Delaware County, PA.......................
                                            Montgomery County, PA.....................
                                            Philadelphia County, PA...................
38060....................................  \1\ Phoenix-Mesa-Scottsdale, AZ............       1.0110       1.0075
                                            Maricopa County, AZ.......................
                                            Pinal County, AZ..........................
38220....................................  Pine Bluff, AR.............................       0.8152  ...........
                                            Cleveland County, AR......................
                                            Jefferson County, AR......................
                                            Lincoln County, AR 0.8694.................
38300....................................  \1\ Pittsburgh, PA.........................       0.8390  ...........

[[Page 47519]]

 
                                            Allegheny County, PA......................
                                            Armstrong County, PA......................
                                            Beaver County, PA.........................
                                            Butler County, PA.........................
                                            Fayette County, PA........................
                                            Washington County, PA.....................
                                            Westmoreland County, PA 0.8867............
38340....................................  Pittsfield, MA.............................       1.0052       1.0036
                                            Berkshire County, MA......................
38540....................................  Pocatello, ID..............................       0.9186       0.9435
                                            Bannock County, ID........................
                                            Power County, ID..........................
38660....................................  Ponce, PR..................................       0.4262       0.5576
                                            Juana Dfaz Municipio, PR..................
                                            Ponce Municipio, PR.......................
                                            Villalba Municipio, PR....................
38860....................................  Portland-South Portland-Biddeford, ME......       0.9991       0.9994
                                            Cumberland County, ME.....................
                                            Sagadahoc County, ME......................
                                            York County, ME...........................
38900....................................  \1\ Portland-Vancouver-Beaverton, OR-WA....       1.1226       1.0824
                                            Clackamas County, OR......................
                                            Columbia County, OR.......................
                                            Multnomah County, OR......................
                                            Washington County, OR.....................
                                            Yamhill County, OR........................
                                            Clark County, WA..........................
                                            Skamania County, WA.......................
38940....................................  Port St. Lucie, FL.........................       1.0035       1.0024
                                            Martin County, FL.........................
                                            St. Lucie County, FL......................
39100....................................  Poughkeepsie-Newburgh-Middletown, NY.......       1.0982       1.0662
                                            Dutchess County, NY.......................
                                            Orange County, NY.........................
39140....................................  Prescott, AZ...............................      l0.9961       0.9973
                                            Yavapai County, AZ........................
39300....................................  \1\ Providence-New Bedford-Fall River, RI-        1.0532       1.0361
                                            MA.
                                            Bristol County, MA........................
                                            Bristol County, RI........................
                                            Kent County, RI...........................
                                            Newport County, RI........................
                                            Providence County, RI.....................
                                            Washington County, RI.....................
39340....................................  Provo-Orem, UT.............................       0.9480       0.9641
                                            Juab County, UT...........................
                                            Utah County, UT...........................
39380....................................  \2\ Pueblo, CO.............................       0.9447       0.9618
                                            Pueblo County, CO.........................
39460....................................  Punta Gorda, FL............................       0.9558       0.9695
                                            Charlotte County, FL......................
39540....................................  \2\ Racine, WI.............................       0.9684       0.9783
                                            Racine County, WI.........................
39580....................................  Raleigh-Cary, NC...........................       0.9663       0.9768
                                            Franklin County, NC.......................
                                            Johnston County, NC.......................
                                            Wake County, NC...........................
39660....................................  Rapid City, SD.............................       0.8685       0.9080
                                            Meade County, SD..........................
                                            Pennington County, SD.....................
39740....................................  Reading, PA................................       0.9413       0.9594
                                            Berks County, PA..........................
39820....................................  Redding, CA................................       1.2809       1.1847
                                            Shasta County, CA.........................
39900....................................  Reno-Sparks, NV............................       1.1062       1.0716
                                            Storey County, NV.........................
                                            Washoe County, NV.........................
40060....................................  \1\ Richmond, VA...........................       0.9232       0.9467
                                            Amelia County, VA.........................
                                            Caroline County, VA.......................
                                            Charles City County, VA...................

[[Page 47520]]

 
                                            Chesterfield County, VA...................
                                            Cumberland County, VA.....................
                                            Dinwiddie County, VA......................
                                            Goochland County, VA......................
                                            Hanover County, VA........................
                                            Henrico County, VA........................
                                            King and Queen County, VA.................
                                            King William County, VA...................
                                            Louisa County, VA.........................
                                            New Kent County, VA.......................
                                            Powhatan County, VA.......................
                                            Prince George County, VA..................
                                            Sussex County, VA.........................
                                            Colonial Heights City, VA.................
                                            Hopewell City, VA.........................
                                            Petersburg City, VA.......................
                                            Richmond City, VA.........................
40140....................................  \1,2\ Riverside-San Bernardino-Ontario, CA.       1.1735       1.1158
                                            Riverside County, CA......................
                                            San Bernardino County, CA.................
40220....................................  Roanoke, VA................................       0.8888       0.9224
                                            Botetourt County, VA......................
                                            Craig County, VA..........................
                                            Franklin County, VA.......................
                                            Roanoke County, VA........................
                                            Roanoke City, VA..........................
                                            Salem City, VA............................
40340....................................  Rochester, MN..............................       1.0490       1.0333
                                            Dodge County, MN..........................
                                            Olmsted County, MN........................
                                            Wabasha County, MN........................
40380....................................  \1\ Rochester, NY..........................       0.8918       0.9246
                                            Livingston County, NY.....................
                                            Monroe County, NY.........................
                                            Ontario County, NY........................
                                            Orleans County, NY........................
                                            Wayne County, NY..........................
40420....................................  Rockford, IL...............................       0.9804       0.9865
                                            Boone County, IL..........................
                                            Winnebago County, IL......................
40484....................................  \2\ Rockingham County-Strafford County, NH.       1.1259       1.0846
                                            Rockingham County, NH.....................
                                            Strafford County, NH......................
40580....................................  Rocky Mount, NC............................       0.9007       0.9309
                                            Edgecombe County, NC......................
                                            Nash County, NC...........................
40660....................................  Rome, GA...................................       0.9547       0.9688
                                            Floyd County, GA..........................
40900....................................  \1\ Sacramento--Arden-Arcade--Roseville, CA
                                            El Dorado County, CA......................       1.3067       1.2010
                                            Placer County, CA.........................
                                            Sacramento County, CA.....................
                                            Yolo County, CA...........................
40980....................................  Saginaw-Saginaw Township North, MI.........       0.9122       0.9390
                                            Saginaw County, MI........................
41060....................................  St. Cloud, MN..............................       1.1058       1.0713
                                            Benton County, MN.........................
                                            Stearns County, MN........................
41100....................................  St. George, UT.............................       0.9535       0.9679
                                            Washington County, UT.....................
41140....................................  St. Joseph, MO-KS..........................       0.8826       0.9180
                                            Doniphan County, KS.......................
                                            Andrew County, MO.........................
                                            Buchanan County, MO.......................
                                            DeKalb County, MO.........................
41180....................................  \1\ St. Louis, MO-IL.......................       0.8982       0.9291
                                            Bond County, IL...........................
                                            Calhoun County, IL........................
                                            Clinton County, IL........................
                                            Jersey County, IL.........................

[[Page 47521]]

 
                                            Macoupin County, IL.......................
                                            Madison County, IL........................
                                            Monroe County, IL.........................
                                            St. Clair County, IL......................
                                            Crawford County, MO.......................
                                            Franklin County, MO.......................
                                            Jefferson County, MO......................
                                            Lincoln County, MO........................
                                            St. Charles County, MO....................
                                            St. Louis County, MO......................
                                            Warren County, MO.........................
                                            Washington County, MO.....................
                                            St. Louis City, MO........................
41420....................................  Salem, OR..................................       1.0397       1.0270
                                            Marion County, OR.........................
                                            Polk County, OR...........................
41500....................................  Salinas, CA................................       1.4593       1.2954
                                            Monterey County, CA.......................
41540....................................  \2\ Salisbury, MD..........................       0.8911       0.9241
                                            Somerset County, MD.......................
                                            Wicomico County, MD.......................
41620....................................  Salt Lake City, UT.........................       0.9473       0.9636
                                            Salt Lake County, UT......................
                                            Summit County, UT.........................
                                            Tooele County, UT.........................
41660....................................  San Angelo, TX.............................       0.8658       0.9060
                                            Irion County, TX..........................
                                            Tom Green County, TX......................
41700....................................  \1\ San Antonio, TX........................       0.8895       0.9229
                                            Atascosa County, TX.......................
                                            Bandera County, TX........................
                                            Bexar County, TX..........................
                                            Comal County, TX..........................
                                            Guadalupe County, TX......................
                                            Kendall County, TX........................
                                            Medina County, TX.........................
                                            Wilson County, TX.........................
41740....................................  \1,2\ San Diego-Carlsbad-San Marcos, CA....       1.1735       1.1158
                                            San Diego County, CA......................
41780....................................  Sandusky, OH...............................       0.8755       0.9130
                                            Erie County, OH...........................
41884....................................  \1\ San Francisco-San Mateo-Redwood City,         1.4800       1.3080
                                            CA.
                                            Marin County, CA..........................
                                            San Francisco County, CA..................
                                            San Mateo County, CA......................
41900....................................  San German-Cabo Rojo, PR...................       0.4603       0.5878
                                            Cabo Rojo Municipio, PR...................
                                            Lajas Municipio, PRSabana Grande
                                            Municipio, PR.
                                            San German Municipio, PR..................
41940....................................  \1\ San Jose-Sunnyvale-Santa Clara, CA.....       1.5439       1.3464
                                            San Benito County, CA.....................
                                            Santa Clara County, CA....................
41980....................................  \1\ San Juan-Caguas-Guaynabo, PR...........       0.4526       0.5811
                                            Aguas Buenas Municipio, PR................
                                            Aibonito Municipio, PR....................
                                            Arecibo Municipio, PR.....................
                                            Barceloneta Municipio, PR.................
                                            Barranquitas Municipio, PR................
                                            Bayamon Municipio, PR.....................
                                            Caguas Municipio, PR......................
                                            Camuy Municipio, PR.......................
                                            Canovanas Municipio, PR...................
                                            Carolina Municipio, PR....................
                                            Catano Municipio, PR......................
                                            Cayey Municipio, PR.......................
                                            Ciales Municipio, PR......................
                                            Cidra Municipio, PR.......................
                                            Comerio Municipio, PR.....................
                                            Corozal Municipio, PR.....................
                                            Dorado Municipio, PR......................

[[Page 47522]]

 
                                            Florida Municipio, PR.....................
                                            Guaynabo Municipio, PR....................
                                            Gurabo Municipio, PR......................
                                            Hatillo Municipio, PR.....................
                                            Humacao Municipio, PR.....................
                                            Juncos Municipio, PR......................
                                            Las Piedras Municipio, PR.................
                                            Lofza Municipio, PR.......................
                                            Manati Municipio, PR......................
                                            Maunabo Municipio, PR.....................
                                            Morovis Municipio, PR.....................
                                            Naguabo Municipio, PR.....................
                                            Naranjito Municipio, PR...................
                                            Orocovis Municipio, PR....................
                                            Quebradillas Municipio, PR................
                                            Rio Grande Municipio, PR..................
                                            San Juan Municipio, PR....................
                                            San Lorenzo Municipio, PR.................
                                            Toa Alta Municipio, PR....................
                                            Toa Baja Municipio, PR....................
                                            Trujillo Alto Municipio, PR...............
                                            Vega Alta Municipio, PR...................
                                            Vega Baja Municipio, PRYabucoa Municipio,
                                            PR.
42020....................................  San Luis Obispo-Paso Robles, CA............       1.1951       1.1298
                                            San Luis Obispo County, CA................
42044....................................  \1,2\ Santa Ana-Anaheim-Irvine, CA.........       1.1735       1.1158
                                            Orange County, CA.........................
42060....................................  \2\ Santa Barbara-Santa Maria-Goleta, CA...       1.1735       1.1158
                                            Santa Barbara County, CA..................
42100....................................  Santa Cruz-Watsonville, CA.................       1.5667       1.3600
                                            Santa Cruz County, CA.....................
42140....................................  Santa Fe, NM...............................       1.0682       1.0462
                                            Santa Fe County, NM.......................
42220....................................  Santa Rosa-Petaluma, CA....................       1.4469       1.2879
                                            Sonoma County, CA.........................
42260....................................  Sarasota-Bradenton-Venice, FL..............       0.9770       0.9842
                                            Manatee County, FL........................
                                            Sarasota County, FL.......................
42340....................................  Savannah, GA...............................       0.8890       0.9226
                                            Bryan County, GA..........................
                                            Chatham County, GA........................
                                            Effingham County, GA......................
42540....................................  \2\ Scranton--Wilkes-Barre, PA.............       0.8357       0.8843
                                            Lackawanna County, PA.....................
                                            Luzerne County, PA........................
                                            Wyoming County, PA........................
42644....................................  \1\ Seattle-Bellevue-Everett, WA...........       1.1362       1.0914
                                            King County, WA...........................
                                            Snohomish County, WA......................
42680....................................  Sebastian-Vero Beach, FL...................       0.9703       0.9796
                                            Indian River County, FL...................
43100....................................  \2\ Sheboygan, WI..........................       0.9684       0.9783
                                            Sheboygan County, WI......................
43300....................................  Sherman-Denison, TX........................       0.8530       0.8968
                                            Grayson County, TX........................
43340....................................  Shreveport-Bossier City, LA................       0.8551       0.8983
                                            Bossier Parish, LA........................
                                            Caddo Parish, LA..........................
                                            De Soto Parish, LA........................
43580....................................  Sioux City, IA-NE-SD.......................       0.9083       0.9363
                                            Woodbury County, IA.......................
                                            Dakota County, NE.........................
                                            Dixon County, NE..........................
                                            Union County, SD..........................
43620....................................  Sioux Falls, SD............................       0.9553       0.9692
                                            Lincoln County, SD........................
                                            McCook County, SD.........................
                                            Minnehaha County, SD......................
                                            Turner County, SD.........................
43780....................................  South Bend-Mishawaka, IN-MI................       0.9643       0.9754

[[Page 47523]]

 
                                            St. Joseph County, IN.....................
                                            Cass County, MI...........................
43900....................................  Spartanburg, SC............................       0.9395       0.9582
                                            Spartanburg County, SC....................
44060....................................  \2\ Spokane, WA............................       1.0558       1.0379
                                            Spokane County, WA........................
44100....................................  Springfield, IL............................       0.8942       0.9263
                                            Menard County, IL.........................
                                            Sangamon County, IL.......................
44140....................................  Springfield, MA............................       1.0450       1.0306
                                            Franklin County, MA.......................
                                            Hampden County, MA........................
                                            Hampshire County, MA......................
44180....................................  Springfield, MO............................       0.8791       0.9155
                                            Christian County, MO......................
                                            Dallas County, MO.........................
                                            Greene County, MO.........................
                                            Polk County, MO...........................
                                            Webster County, MO........................
44220....................................  \2\ Springfield, OH........................       0.8696       0.9088
                                            Clark County, OH..........................
44300....................................  State College, PA..........................       0.8619       0.9032
                                            Centre County, PA.........................
44700....................................  Stockton, CA...............................       1.1809       1.1206
                                            San Joaquin County, CA....................
44940....................................  Sumter, SC.................................       0.8898       0.9232
                                            Sumter County, SC.........................
45060....................................  Syracuse, NY...............................       0.9950       0.9966
                                            Madison County, NY........................
                                            Onondaga County, NY.......................
                                            Oswego County, NY.........................
45104....................................  Tacoma, WA.................................       1.0933       1.0630
                                            Pierce County, WA.........................
45220....................................  Tallahassee, FL............................       0.9027       0.9323
                                            Gadsden County, FL........................
                                            Jefferson County, FL......................
                                            Leon County, FL...........................
                                            Wakulla County, FL........................
45300....................................  \1\ Tampa-St. Petersburg-Clearwater, FL....       0.9170       0.9424
                                            Hernando County, FL.......................
                                            Hillsborough County, FL...................
                                            Pasco County, FL..........................
                                            Pinellas County, FL.......................
45460....................................  Terre Haute, IN............................       0.8823       0.9178
                                            Clay County, IN...........................
                                            Sullivan County, IN.......................
                                            Vermillion County, IN.....................
                                            Vigo County, IN...........................
45500....................................  \2\ Texarkana, TX-Texarkana, AR (TX               0.8198       0.8728
                                            Hospitals).
                                            Miller County, AR.........................
                                            Bowie County, TX..........................
45500....................................  Texarkana, TX-Texarkana, AR (AR Hospitals).       0.7781       0.8421
                                            Miller County, AR.........................
                                            Bowie County, TX..........................
45780....................................  Toledo, OH.................................       0.9268       0.9493
                                            Fulton County, OH.........................
                                            Lucas County, OH..........................
                                            Ottawa County, OH.........................
                                            Wood County, OH...........................
45820....................................  Topeka, KS.................................       0.8556       0.8987
                                            Jackson County, KS........................
                                            Jefferson County, KS......................
                                            Osage County, KS..........................
                                            Shawnee County, KS........................
                                            Wabaunsee County, KS......................
45940....................................  \2\ Trenton-Ewing, NJ......................       1.1616       1.1080
                                            Mercer County, NJ.........................
46060....................................  Tucson, AZ.................................       0.9416       0.9596
                                            Pima County, AZ...........................
46140....................................  Tulsa, OK..................................       0.8498       0.8945

[[Page 47524]]

 
                                            Creek County, OK..........................
                                            Okmulgee County, OK.......................
                                            Osage County, OK..........................
                                            Pawnee County, OK.........................
                                            Rogers County, OK.........................
                                            Tulsa County, OK..........................
                                            Wagoner County, OK........................
46220....................................  Tuscaloosa, AL.............................       0.8530       0.8968
                                            Greene County, AL.........................
                                            Hale County, AL...........................
                                            Tuscaloosa County, AL.....................
46340....................................  Tyler, TX..................................       0.9181       0.9432
                                            Smith County, TX..........................
46540....................................  Utica-Rome, NY.............................       0.8774       0.9143
                                            Herkimer County, NY.......................
                                            Oneida County, NY.........................
46660....................................  Valdosta, GA...............................
                                            Brooks County, GA.........................
                                            Echols County, GA.........................
                                            Lanier County, GA.........................
                                            Lowndes County, GA........................       0.8204       0.8732
46700....................................  Vallejo-Fairfield, CA......................
                                            Solano County, CA.........................       1.4432       1.2856
47020....................................  \2\ Victoria, TX...........................
                                            Calhoun County, TX........................
                                            Goliad County, TX.........................
                                            Victoria County, TX.......................       0.8198       0.8728
47220....................................  Vineland-Millville-Bridgeton, NJ...........       1.0647       1.0439
                                            Cumberland County, NJ.....................
47260....................................  \1\ Virginia Beach-Norfolk-Newport News, VA-      0.8777       0.9145
                                            NC.
                                            Currituck County, NC......................
                                            Gloucester County, VA.....................
                                            Isle of Wight County, VA..................
                                            James City County, VA.....................
                                            Mathews County, VA........................
                                            Surry County, VA..........................
                                            York County, VA...........................
                                            Chesapeake City, VA.......................
                                            Hampton City, VA..........................
                                            Newport News City, VA.....................
                                            Norfolk City, VA..........................
                                            Poquoson City, VA.........................
                                            Portsmouth City, VA.......................
                                            Suffolk City, VA..........................
                                            Virginia Beach City, VA...................
                                            Williamsburg City, VA.....................
47300....................................  \2\ Visalia-Porterville, CA................       1.1735       1.1158
                                            Tulare County, CA.........................
47380....................................  Waco, TX...................................       0.8593       0.9014
                                            McLennan County, TX.......................
47580....................................  Warner Robins, GA..........................       0.9613       0.9733
                                            Houston County, GA........................
47644....................................  \1\ Warren-Troy-Farmington Hills, MI.......       1.0033       1.0023
                                            Lapeer County, MI.........................
                                            Livingston County, MI.....................
                                            Macomb County, MI.........................
                                            Oakland County, MI........................
                                            St. Clair County, MI......................
47894....................................  \1\ Washington-Arlington-Alexandria, DC-VA-       1.0675       1.0457
                                            MD-WV.
                                            District of Columbia, DC..................
                                            Calvert County, MD........................
                                            Charles County, MD........................
                                            Prince George's County, MD................
                                            Arlington County, VA......................
                                            Clarke County, VA.........................
                                            Fairfax County, VA........................
                                            Fauquier County, VA.......................
                                            Loudoun County, VA........................
                                            Prince William County, VA.................
                                            Spotsylvania County, VA...................

[[Page 47525]]

 
                                            Stafford County, VA.......................
                                            Warren County, VA.........................
                                            Alexandria City, VA.......................
                                            Fairfax City, VA..........................
                                            Falls Church City, VA.....................
                                            Fredericksburg City, VA...................
                                            Manassas City, VA.........................
                                            Manassas Park City, VA....................
                                            Jefferson County, WV......................
47940....................................  Waterloo-Cedar Falls, IA...................       0.8719       0.9104
                                            Black Hawk County, IA.....................
                                            Bremer County, IA.........................
                                            Grundy County, IA.........................
48140....................................  Wausau, WI.................................       1.0004       1.0003
                                            Marathon County, WI.......................
48260....................................  \2\ Weirton-Steubenville, WV-OH (OH               0.8696       0.9088
                                            Hospitals).
                                            Jefferson County, OH......................
                                            Brooke County, WV.........................
                                            Hancock County, WV........................
48260....................................  Weirton-Steubenville, WV-OH (WV Hospitals).       0.7889       0.8501
                                            Jefferson County, OH......................
                                            Brooke County, WV.........................
                                            Hancock County, WV........................
48300....................................  Wenatchee, WA..............................       1.1275       1.0856
                                            Chelan County, WA.........................
                                            Douglas County, WA........................
48424....................................  \1\ West Palm Beach-Boca Raton-Boynton            0.9576       0.9708
                                            Beach, FL.
                                            Palm Beach County, FL.....................
48540....................................  \2\ Wheeling, WV-OH (OH Hospitals).........       0.8696       0.9088
                                            Belmont County, OH........................
                                            Marshall County, WV.......................
                                            Ohio County, WV...........................
48540....................................  \2\ Wheeling, WV-OH (WV Hospitals).........       0.7568       0.8263
                                            Belmont County, OH........................
                                            Marshall County, WV.......................
                                            Ohio County, WV...........................
48620....................................  Wichita, KS................................       0.8938       0.9260
                                            Butler County, KS.........................
                                            Harvey County, KS.........................
                                            Sedgwick County, KS.......................
                                            Sumner County, KS.........................
48660....................................  Wichita Falls, TX..........................       0.8203       0.8731
                                            Archer County, TX.........................
                                            Clay County, TX...........................
                                            Wichita County, TX........................
48700....................................  \2\ Williamsport, PA.......................       0.8357       0.8843
                                            Lycoming County, PA.......................
48864....................................  Wilmington, DE-MD-NJ (DE, MD Hospitals)....       1.0666       1.0451
                                            New Castle County, DE.....................
                                            Cecil County, MD..........................
                                            Salem County, NJ..........................
48864....................................  \2\ Wilmington, DE-MD-NJ (NJ Hospitals)....       1.1616       1.1080
                                            New Castle County, DE.....................
                                            Cecil County, MD..........................
                                            Salem County, NJ..........................
48900....................................  Wilmington, NC.............................       0.9325       0.9533
                                            Brunswick County, NC......................
                                            New Hanover County, NC....................
                                            Pender County, NC.........................
49020....................................  Winchester, VA-WV..........................       0.9845       0.9894
                                            Frederick County, VA......................
                                            Winchester City, VA.......................
                                            Hampshire County, WV......................
49180....................................  Winston-Salem, NC..........................       0.9078       0.9359
                                            Davie County, NC..........................
                                            Forsyth County, NC........................
                                            Stokes County, NC.........................
                                            Yadkin County, NC.........................
49340....................................  Worcester, MA..............................       1.1354       1.0909
                                            Worcester County, MA......................

[[Page 47526]]

 
49420....................................  \2\ Yakima, WA.............................       1.0558       1.0379
                                            Yakima County, WA.........................
49500....................................  Yauco, PR..................................       0.3200       0.4583
                                            Guanica Municipio, PR.....................
                                            Guayanilla Municipio, PR..................
                                            Penuelas Municipio, PR....................
                                            Yauco Municipio, PR.......................
49620....................................  York-Hanover, PA...........................       0.9425       0.9603
                                            York County, PA...........................
49660....................................  Youngstown-Warren-Boardman, OH-PA..........       0.8991       0.9298
                                            Mahoning County, OH.......................
                                            Trumbull County, OH.......................
                                            Mercer County, PA.........................
49700....................................  \2\ Yuba City, CA..........................       1.1735       1.1158
                                            Sutter County, CA.........................
                                            Yuba County, CA...........................
40740....................................  Yuma, AZ...................................       1.0085       1.0058
                                            Yuma County, AZ ..........................
----------------------------------------------------------------------------------------------------------------
\1\ Large urban area.
\2\ Hospitals geographically located in the area are assigned the statewide rural wage index for FY 2008. New
  Jersey floor is imputed as discussed in the FY 2005 IPPS final rule (69 FR 49109) and in section III.G.2 of
  the preamble in this final rule.


 Table 4B.--Wage Index and Capital Geographic Adjustment (GAF) for Rural
                         Areas by CBSA--FY 2008
------------------------------------------------------------------------
     CBSA code             Nonurban area         Wage index      GAF
------------------------------------------------------------------------
01.................  Alabama..................       0.7567       0.8262
02.................  Alaska...................       1.2083       1.1383
03.................  Arizona..................       0.8854       0.9200
04.................  Arkansas.................       0.7516       0.8224
05.................  California...............       1.1735       1.1158
06.................  Colorado.................       0.9447       0.9618
07.................  Connecticut..............       1.2432       1.1608
08.................  Delaware.................       1.0104       1.0071
10.................  Florida..................       0.8733       0.9114
11.................  Georgia..................       0.7861       0.8481
12.................  Hawaii...................       1.0740       1.0501
13.................  Idaho....................       0.7818       0.8449
14.................  Illinois.................       0.8345       0.8835
15.................  Indiana..................       0.8568       0.8996
16.................  Iowa.....................       0.8476       0.8929
17.................  Kansas...................       0.7979       0.8568
18.................  Kentucky.................       0.7810       0.8443
19.................  Louisiana................       0.7586       0.8276
20.................  Maine....................       0.8408       0.8880
21.................  Maryland.................       0.8911       0.9241
22.................  Massachusetts............       0.9705       0.9797
23.................  Michigan.................       0.8908       0.9239
24.................  Minnesota................       0.9113       0.9384
25.................  Mississippi..............       0.7752       0.8400
26.................  Missouri.................       0.8153       0.8695
27.................  Montana..................       0.8335       0.8827
28.................  Nebraska.................       0.8846       0.9195
29.................  Nevada...................       0.9701       0.9794
30.................  New Hampshire............       1.1259       1.0846
31.................  New Jersey1..............       1.1616       1.1080
32.................  New Mexico...............       0.8965       0.9279
33.................  New York.................       0.8416       0.8886
34.................  North Carolina...........       0.8603       0.9021
35.................  North Dakota.............       0.7309       0.8068
36.................  Ohio.....................       0.8696       0.9088
37.................  Oklahoma.................       0.7701       0.8362
38.................  Oregon...................       0.9957       0.9971
39.................  Pennsylvania.............       0.8357       0.8843
40.................  Puerto Rico \1\..........  ...........  ...........
41.................  Rhode Island \1\.........  ...........  ...........
42.................  South Carolina...........       0.8707       0.9095
43.................  South Dakota.............       0.8343       0.8833
44.................  Tennessee................       0.7917       0.8522

[[Page 47527]]

 
45.................  Texas....................       0.8198       0.8728
46.................  Utah.....................       0.8214       0.8740
47.................  Vermont..................       1.0387       1.0263
49.................  Virginia.................       0.8073       0.8636
50.................  Washington...............       1.0558       1.0379
51.................  West Virginia............       0.7568       0.8263
52.................  Wisconsin................       0.9684       0.9783
53.................  Wyoming..................       0.9163       0.9419
------------------------------------------------------------------------
\1\ All counties in the State or Territory are classified as urban. New
  Jersey floor is imputed as discussed in the FY 2005 final rule (69 FR
  49109) and in section III.G.2 of the preamble in this final rule.


Table 4C.--Wage Index and Capital Geographic Adjustment Factor (GAF) for
            Hospitals That Are Reclassified bY CBSA--FY 2008
------------------------------------------------------------------------
     CBSA code                  Area             Wage index      GAF
------------------------------------------------------------------------
10500..............  Albany, GA...............       0.8666       0.9066
10580..............  Albany-Schenectady-Troy,        0.8667       0.9067
                      NY.
10740..............  Albuquerque, NM..........       0.9725       0.9811
10780..............  Alexandria, LA...........       0.7977       0.8566
10900..............  Allentown-Bethlehem-            1.0003       1.0002
                      Easton, PA-NJ.
11100..............  Amarillo, TX.............       0.9151       0.9411
11180..............  Ames, IA.................       0.9222       0.9460
11260..............  Anchorage, AK............       1.2083       1.1383
11460..............  Ann Arbor, MI............       1.0143       1.0098
11500..............  Anniston-Oxford, AL......       0.7975       0.8565
12060..............  Atlanta-Sandy Springs-          0.9812       0.9871
                      Marietta, GA.
12260..............  Augusta-Richmond County,        0.9598       0.9723
                      GA-SC.
12420..............  Austin-Round Rock, TX....       0.9501       0.9656
12580..............  Baltimore-Towson, MD.....       1.0030       1.0021
12620..............  Bangor, ME...............       0.9881       0.9918
12940..............  Baton Rouge, LA..........       0.8009       0.8590
13020..............  Bay City, MI.............       0.9394       0.9581
13644..............  Bethesda-Gaithersburg-          1.1016       1.0685
                      Frederick, MD.
13780..............  Binghamton, NY...........       0.8775       0.9144
13820..............  Birmingham-Hoover, AL....       0.8724       0.9108
13900..............  Bismarck, ND.............       0.7311       0.8070
13980..............  Blacksburg-Christiansburg-      0.7732       0.8385
                      Radford, VA.
14020..............  Bloomington, IN..........       0.8823       0.9178
14484..............  Boston-Quincy, MA........       1.1303       1.0875
14740..............  Bremerton-Silverdale, WA.       1.0820       1.0555
14860..............  Bridgeport-Stamford-            1.2341       1.1549
                      Norwalk, CT.
15380..............  Buffalo-Niagara Falls, NY       0.9588       0.9716
15540..............  Burlington-South                0.9584       0.9713
                      Burlington, VT.
15940..............  Canton-Massillon, OH.....       0.8806       0.9166
16180..............  Carson City, NV..........       0.9701       0.9794
16620..............  Charleston, WV...........       0.8393       0.8869
16700..............  Charleston-North                0.9101       0.9375
                      Charleston, SC.
16740..............  Charlotte-Gastonia-             0.9342       0.9545
                      Concord, NC-SC.
16820..............  Charlottesville, VA......       0.9160       0.9417
16860..............  Chattanooga, TN-GA.......       0.8962       0.9277
16974..............  Chicago-Naperville-             1.0471       1.0320
                      Joliet, IL.
17140..............  Cincinnati-Middletown, OH-      0.9661       0.9767
                      KY-IN.
17300..............  Clarksville, TN-KY.......       0.8095       0.8653
17460..............  Cleveland-Elyria-Mentor,        0.9215       0.9456
                      OH.
17820..............  Colorado Springs, CO.....       0.9466       0.9631
17860..............  Columbia, MO.............       0.8537       0.8973
17980..............  Columbus, GA-AL..........       0.8587       0.9009
18140..............  Columbus, OH.............       0.9820       0.9876
18700..............  Corvallis, OR............       1.0315       1.0215
19124..............  Dallas-Plano-Irving, TX..       0.9681       0.9780
19340..............  Davenport-Moline-Rock           0.8893       0.9228
                      Island, IA-IL.
19380..............  Dayton, OH...............       0.9278       0.9500
19460..............  Decatur, AL..............       0.7832       0.8459
19740..............  Denver-Aurora, CO........       1.0454       1.0309
19804..............  Detroit-Livonia-Dearborn,       1.0095       1.0065
                      MI.
20100..............  Dover, DE................       1.0104       1.0071
20260..............  Duluth, MN-WI............       0.9956       0.9970
20500..............  Durham, NC...............       0.9738       0.9820
20764..............  Edison, NJ...............       1.1616       1.1080

[[Page 47528]]

 
21060..............  Elizabethtown, KY........       0.7978       0.8567
21500..............  Erie, PA.................       0.8416       0.8886
21660..............  Eugene-Springfield, OR...       1.0707       1.0479
21780..............  Evansville, IN-KY (KY           0.8123       0.8673
                      Hospitals).
21780..............  Evansville, IN-KY (IN           0.8568       0.8996
                      Hospitals).
22020..............  Fargo, ND-MN.............       0.7943       0.8541
22180..............  Fayetteville, NC.........       0.9593       0.9719
22220..............  Fayetteville-Springdale-        0.8714       0.9100
                      Rogers, AR-MO.
22380..............  Flagstaff, AZ............       1.1187       1.0798
22420..............  Flint, MI................       1.0243       1.0166
22520..............  Florence-Muscle Shoals,         0.7752       0.8400
                      AL.
22540..............  Fond du Lac, WI..........       0.9715       0.9804
22660..............  Fort Collins-Loveland, CO       0.9579       0.9710
22744..............  Fort Lauderdale-Pompano         1.0247       1.0168
                      Beach-Deerfield Beach,
                      FL.
23020..............  Fort Walton Beach-              0.8733       0.9114
                      Crestview-Destin, FL.
23060..............  Fort Wayne, IN...........       0.9041       0.9333
23104..............  Fort Worth-Arlington, TX.       0.9636       0.9749
23540..............  Gainesville, FL..........       0.9301       0.9516
23844..............  Gary, IN.................       0.9241       0.9474
24300..............  Grand Junction, CO.......       1.0135       1.0092
24340..............  Grand Rapids-Wyoming, MI.       0.9374       0.9567
24500..............  Great Falls, MT..........       0.8761       0.9134
24540..............  Greeley, CO..............       0.9744       0.9824
24580..............  Green Bay, WI (MI               0.9357       0.9555
                      Hospitals).
24580..............  Green Bay, WI (WI               0.9684       0.9783
                      Hospitals).
24660..............  Greensboro-High Point, NC       0.9106       0.9379
24780..............  Greenville, NC...........       0.9267       0.9492
24860..............  Greenville-Mauldin-             0.9403       0.9587
                      Easley, SC.
25060..............  Gulfport-Biloxi, MS......       0.8216       0.8741
25420..............  Harrisburg-Carlisle, PA..       0.9115       0.9385
25540..............  Hartford-West Hartford-         1.2432       1.1608
                      East Hartford, CT (CT
                      Hospitals).
25540..............  Hartford-West Hartford-         1.1025       1.0691
                      East Hartford, CT (MA
                      Hospitals).
25860..............  Hickory-Lenoir-Morganton,       0.8814       0.9172
                      NC.
26180..............  Honolulu, HI.............       1.1305       1.0876
26420..............  Houston-Sugar Land-             0.9996       0.9997
                      Baytown, TX.
26580..............  Huntington-Ashland, WV-KY-      0.8724       0.9108
                      OH.
26620..............  Huntsville, AL...........       0.8629       0.9040
26820..............  Idaho Falls, ID..........       0.9272       0.9496
26900..............  Indianapolis-Carmel, IN..       0.9589       0.9717
26980..............  Iowa City, IA............       0.9137       0.9401
27060..............  Ithaca, NY...............       0.9709       0.9800
27140..............  Jackson, MS..............       0.7950       0.8546
27180..............  Jackson, TN..............       0.8435       0.8900
27260..............  Jacksonville, FL.........       0.9089       0.9367
27620..............  Jefferson City, MO.......       0.8702       0.9092
27780..............  Johnstown, PA............       0.8357       0.8843
27860..............  Jonesboro, AR............       0.8503       0.8949
27900..............  Joplin, MO...............       0.8966       0.9280
28020..............  Kalamazoo-Portage, MI....       1.0146       1.0100
28140..............  Kansas City, MO-KS.......       0.9318       0.9528
28420..............  Kennewick-Richland-Pasco,       0.9614       0.9734
                      WA (ID Hospitals).
28420..............  Kennewick-Richland-Pasco,       1.0558       1.0379
                      WA (WA Hospitals).
28700..............  Kingsport-Bristol-              0.7810       0.8443
                      Bristol, TN-VA.
28740..............  Kingston, NY.............       0.9270       0.9494
28940..............  Knoxville, TN............       0.8012       0.8592
29180..............  Lafayette, LA............       0.8322       0.8818
29404..............  Lake County-Kenosha             1.0583       1.0396
                      County, IL-WI.
29460..............  Lakeland, FL.............       0.8834       0.9186
29540..............  Lancaster, PA............       0.9650       0.9759
29620..............  Lansing-East Lansing, MI.       0.9906       0.9936
29740..............  Las Cruces, NM...........       0.8965       0.9279
29820..............  Las Vegas-Paradise, NV...       1.1222       1.0822
30020..............  Lawton, OK...............       0.8070       0.8634
30460..............  Lexington-Fayette, KY....       0.8797       0.9160
30620..............  Lima, OH.................       0.9307       0.9520
30700..............  Lincoln, NE..............       0.9626       0.9742
30780..............  Little Rock-North Little        0.8725       0.9108
                      Rock-Conway, AR.
30860..............  Logan, UT-ID.............       0.9214       0.9455
30980..............  Longview, TX.............       0.8871       0.9212
31084..............  Los Angeles-Long Beach-         1.1735       1.1158
                      Santa Ana, CA.
31140..............  Louisville-Jefferson            0.9029       0.9324
                      County, KY-IN.

[[Page 47529]]

 
31340..............  Lynchburg, VA............       0.8605       0.9022
31420..............  Macon, GA................       0.9567       0.9701
31540..............  Madison, WI..............       1.0996       1.0672
31700..............  Manchester-Nashua, NH....       1.1259       1.0846
32780..............  Medford, OR..............       1.0146       1.0100
32820..............  Memphis, TN-MS-AR........       0.8963       0.9278
33124..............  Miami-Miami Beach-              1.0008       1.0005
                      Kendall, FL.
33340..............  Milwaukee-Waukesha-West         1.0295       1.0201
                      Allis, WI.
33460..............  Minneapolis-St. Paul-           1.0896       1.0605
                      Bloomington, MN-WI.
33540..............  Missoula, MT.............       0.8738       0.9118
33700..............  Modesto, CA..............       1.2019       1.1342
33740..............  Monroe, LA...............       0.7764       0.8409
33860..............  Montgomery, AL...........       0.8111       0.8664
34060..............  Morgantown, WV...........       0.8255       0.8769
34740..............  Muskegon-Norton Shores,         0.9474       0.9637
                      MI.
34820..............  Myrtle Beach-Conway-North       0.8707       0.9095
                      Myrtle Beach, SC.
34980..............  Nashville-Davidson-             0.9364       0.9560
                      Murfreesboro-Franklin,
                      TN.
35004..............  Nassau-Suffolk, NY.......       1.2625       1.1731
35084..............  Newark-Union, NJ-PA (NJ         1.1616       1.1080
                      Hospitals).
35084..............  Newark-Union, NJ-PA (PA,        1.1570       1.1050
                      NY Hospitals).
35300..............  New Haven-Milford, CT....       1.2432       1.1608
35380..............  New Orleans-Metairie-           0.8711       0.9098
                      Kenner, LA.
35644..............  New York-White Plains-          1.3001       1.1969
                      Wayne, NY-NJ.
35980..............  Norwich-New London, CT...       1.1732       1.1156
36084..............  Oakland-Fremont-Hayward,        1.5343       1.3406
                      CA.
36140..............  Ocean City, NJ...........       1.0498       1.0338
36220..............  Odessa, TX...............       0.9522       0.9670
36420..............  Oklahoma City, OK........       0.8754       0.9129
36500..............  Olympia, WA..............       1.1287       1.0864
36740..............  Orlando-Kissimmee, FL....       0.9170       0.9424
37700..............  Pascagoula, MS...........       0.8539       0.8975
37860..............  Pensacola-Ferry Pass-           0.8123       0.8673
                      Brent, FL.
37900..............  Peoria, IL...............       0.9225       0.9463
37964..............  Philadelphia, PA (DE, PA        1.0765       1.0518
                      Hospitals).
37964..............  Philadelphia, PA (NJ            1.1616       1.1080
                      Hospitals).
38220..............  Pine Bluff, AR...........       0.7955       0.8550
38300..............  Pittsburgh, PA (PA, WV          0.8390       0.8867
                      Hospitals).
38300..............  Pittsburgh, PA (OH              0.8696       0.9088
                      Hospitals).
38340..............  Pittsfield, MA...........       1.0387       1.0263
38860..............  Portland-South Portland-        0.9589       0.9717
                      Biddeford, ME.
38900..............  Portland-Vancouver-             1.1226       1.0824
                      Beaverton, OR-WA.
38940..............  Port St. Lucie, FL.......       0.9851       0.9898
39100..............  Poughkeepsie-Newburgh-          1.0762       1.0516
                      Middletown, NY.
39140..............  Prescott, AZ.............       0.9576       0.9708
39340..............  Provo-Orem, UT...........       0.9380       0.9571
39580..............  Raleigh-Cary, NC.........       0.9474       0.9637
39740..............  Reading, PA..............       0.9413       0.9594
39820..............  Redding, CA..............       1.2651       1.1747
39900..............  Reno-Sparks, NV..........       1.0851       1.0575
40060..............  Richmond, VA.............       0.9232       0.9467
40220..............  Roanoke, VA..............       0.8746       0.9123
40340..............  Rochester, MN............       1.0490       1.0333
40380..............  Rochester, NY............       0.8918       0.9246
40420..............  Rockford, IL.............       0.9703       0.9796
40484..............  Rockingham County, NH....       1.0173       1.0118
40660..............  Rome, GA.................       0.9388       0.9577
40900..............  Sacramento--Arden-Arcade--      1.2918       1.1916
                      Roseville, CA.
40980..............  Saginaw-Saginaw Township        0.8974       0.9285
                      North, MI.
41060..............  St. Cloud, MN............       1.0322       1.0219
41100..............  St. George, UT...........       0.9535       0.9679
41140..............  St. Joseph, MO-KS........       0.8826       0.9180
41180..............  St. Louis, MO-IL.........       0.8982       0.9291
41620..............  Salt Lake City, UT.......       0.9473       0.9636
41700..............  San Antonio, TX..........       0.8895       0.9229
41884..............  San Francisco-San Mateo-        1.4800       1.3080
                      Redwood City, CA.
41980..............  San Juan-Caguas-Guaynabo,       0.4526       0.5811
                      PR.
42044..............  Santa Ana-Anaheim-Irvine,       1.1735       1.1158
                      CA.
42140..............  Santa Fe, NM.............       1.0379       1.0258
42220..............  Santa Rosa-Petaluma, CA..       1.4146       1.2681
42260..............  Sarasota-Bradenton-             0.9770       0.9842
                      Venice, FL.
42340..............  Savannah, GA.............       0.8890       0.9226

[[Page 47530]]

 
42644..............  Seattle-Bellevue-Everett,       1.1208       1.0812
                      WA.
43300..............  Sherman-Denison, TX......       0.8530       0.8968
43340..............  Shreveport-Bossier City,        0.8551       0.8983
                      LA.
43580..............  Sioux City, IA-NE-SD.....       0.8846       0.9195
43620..............  Sioux Falls, SD..........       0.9373       0.9566
43780..............  South Bend-Mishawaka, IN-       0.9503       0.9657
                      MI.
43900..............  Spartanburg, SC..........       0.9395       0.9582
44060..............  Spokane, WA..............       1.0226       1.0154
44180..............  Springfield, MO..........       0.8619       0.9032
44940..............  Sumter, SC...............       0.8707       0.9095
45060..............  Syracuse, NY.............       0.9602       0.9726
45220..............  Tallahassee, FL..........       0.8454       0.8914
45300..............  Tampa-St. Petersburg-           0.9170       0.9424
                      Clearwater, FL.
45500..............  Texarkana, TX-Texarkana,        0.7781       0.8421
                      AR.
45780..............  Toledo, OH...............       0.9268       0.9493
45820..............  Topeka, KS...............       0.8452       0.8912
46140..............  Tulsa, OK................       0.8498       0.8945
46220..............  Tuscaloosa, AL...........       0.8162       0.8702
46340..............  Tyler, TX................       0.9181       0.9432
46700..............  Vallejo-Fairfield, CA....       1.4267       1.2755
47260..............  Virginia Beach-Norfolk-         0.8777       0.9145
                      Newport News, VA.
47894..............  Washington-Arlington-           1.0675       1.0457
                      Alexandria, DC-VA.
48140..............  Wausau, WI...............       1.0004       1.0003
48620..............  Wichita, KS..............       0.8717       0.9103
48700..............  Williamsport, PA.........       0.8357       0.8843
48864..............  Wilmington, DE-MD-NJ (NJ        1.1616       1.1080
                      Hospitals).
48864..............  Wilmington, DE-MD-NJ (DE        1.0666       1.0451
                      Hospitals).
48900..............  Wilmington, NC...........       0.9156       0.9414
49180..............  Winston-Salem, NC........       0.9078       0.9359
49340..............  Worcester, MA............       1.1259       1.0846
49660..............  Youngstown-Warren-              0.8697       0.9088
                      Boardman, OH-PA.
04.................  Rural Arkansas...........       0.7586       0.8276
05.................  Rural California.........       1.1735       1.1158
10.................  Rural Florida............       0.8733       0.9114
14.................  Rural Illinois...........       0.8345       0.8835
16.................  Rural Iowa...............       0.8476       0.8929
17.................  Rural Kansas.............       0.7979       0.8568
22.................  Rural Massachusetts......       0.9705       0.9797
23.................  Rural Michigan...........       0.8908       0.9239
24.................  Rural Minnesota..........       0.9113       0.9384
25.................  Rural Mississippi........       0.7752       0.8400
26.................  Rural Missouri...........       0.8153       0.8695
29.................  Rural Nevada.............       0.8706       0.9095
30.................  Rural New Hampshire......       1.0532       1.0361
33.................  Rural New York...........       0.8416       0.8886
34.................  Rural North Carolina.....       0.8603       0.9021
36.................  Rural Ohio...............       0.8696       0.9088
37.................  Rural Oklahoma...........       0.7701       0.8362
38.................  Rural Oregon.............       0.9957       0.9971
39.................  Rural Pennsylvania (PA          0.8357       0.8843
                      Hospitals).
39.................  Rural Pennsylvania (NY          0.8416       0.8886
                      Hospitals).
44.................  Rural Tennessee..........       0.7917       0.8522
45.................  Rural Texas..............       0.8198       0.8728
47.................  Rural Vermont............       0.9427       0.9604
49.................  Rural Virginia...........       0.8073       0.8636
50.................  Rural Washington.........       1.0558       1.0379
53.................  Rural Wyoming............       0.9009       0.9310
------------------------------------------------------------------------


        Table 4F.--Puerto Rico Wage Index and Capital Geographic Adjustment Factor (GAF) by CBSA FY 2008
----------------------------------------------------------------------------------------------------------------
                                                                              Wage index--
     CBSA code                  Area             Wage index      GAF          reclassified     GAF--reclassified
                                                                               hospitals           hospitals
----------------------------------------------------------------------------------------------------------------
10380..............  Aguadilla-Isabela-San           0.7754       0.8401  ...................  .................
                      Sebasti[aacute]n, PR.
21940..............  Fajardo, PR..............       1.0049       1.0034  ...................  .................
25020..............  Guayama, PR..............       0.6861       0.7726  ...................  .................
32420..............  Mayag[uuml]ez, PR........       0.8478       0.8931  ...................  .................
38660..............  Ponce, PR................       0.9869       0.9910  ...................  .................

[[Page 47531]]

 
41900..............  San Germ[aacute]n-Cabo          1.0548       1.0372  ...................  .................
                      Rojo, PR.
41980..............  San Juan-Caguas-Guaynabo,       1.0401       1.0273           1.0401              1.0273
                      PR.
49500..............  Yauco, PR................       0.7432       0.8161  ...................  .................
----------------------------------------------------------------------------------------------------------------

    The following list represents all hospitals that are eligible to 
have their wage index increased by the out-migration adjustment listed 
in this table. Hospitals cannot receive the out-migration adjustment if 
they are reclassified under section 1886(d)(10) of the Act or 
redesignated under section 1886(d)(8) of the Act. Hospitals that have 
already been reclassified under section 1886(d)(10) of the Act or 
redesignated under section 1886(d)(8(B)) of the Act are designated with 
an asterisk. We automatically assume that hospitals that have already 
been reclassified under section 1886(d)(10) of the Act or redesignated 
under section 1886(d)(8) of the Act wish to retain their 
reclassification/redesignation status and waive the application of the 
out-migration adjustment. Section 1886(d)(10) hospitals that wished to 
receive the out-migration adjustment, rather than their 
reclassification, had to follow the termination/withdrawal procedures 
specified in 42 CFR 412.273 and section III.I.3. of the preamble of the 
FY 2008 IPPS proposed rule. Otherwise, they were deemed to have waived 
the out-migration adjustment. Hospitals redesignated under section 
1886(d)(8) of the Act were deemed to have waived the out-migration 
adjustment, unless they explicitly notified CMS that they elected to 
receive the out migration adjustment instead within 45 days from the 
publication of the proposed rule.

                                  Table 4J.--Out-Migration Adjustment--FY 2008
----------------------------------------------------------------------------------------------------------------
                                         Reclassified    Out-migration
             Provider No.                 for FY 2008     adjustment     Qualifying county name     County code
----------------------------------------------------------------------------------------------------------------
010005................................               *          0.0296  MARSHALL................           01470
010008................................  ..............          0.0174  CRENSHAW................           01200
010009................................               *          0.0092  MORGAN..................           01510
010010................................               *          0.0296  MARSHALL................           01470
010012................................               *          0.0186  DE KALB.................           01240
010015................................  ..............          0.0046  CLARKE..................           01120
010022................................               *          0.1127  CHEROKEE................           01090
010025................................               *          0.0235  CHAMBERS................           01080
010029................................               *          0.0289  LEE.....................           01400
010032................................  ..............          0.0325  RANDOLPH................           01550
010035................................               *          0.0254  CULLMAN.................           01210
010038................................  ..............          0.0047  CALHOUN.................           01070
010045................................               *          0.0222  FAYETTE.................           01280
010047................................  ..............          0.0127  BUTLER..................           01060
010052................................  ..............          0.0103  TALLAPOOSA..............           01610
010054................................               *          0.0092  MORGAN..................           01510
010061................................  ..............          0.0541  JACKSON.................           01350
010065................................               *          0.0103  TALLAPOOSA..............           01610
010078................................  ..............          0.0047  CALHOUN.................           01070
010083................................               *          0.0134  BALDWIN.................           01010
010085................................               *          0.0092  MORGAN..................           01510
010091................................  ..............          0.0046  CLARKE..................           01120
010100................................               *          0.0134  BALDWIN.................           01010
010101................................               *          0.0211  TALLADEGA...............           01600
010109................................  ..............          0.0451  PICKENS.................           01530
010110................................  ..............          0.0214  BULLOCK.................           01050
010125................................  ..............          0.0476  WINSTON.................           01660
010128................................  ..............          0.0046  CLARKE..................           01120
010129................................  ..............          0.0134  BALDWIN.................           01010
010138................................  ..............          0.0066  SUMTER..................           01590
010143................................               *          0.0254  CULLMAN.................           01210
010146................................  ..............          0.0047  CALHOUN.................           01070
010150................................               *          0.0127  BUTLER..................           01060
010158................................               *          0.0022  FRANKLIN................           01290
010164................................               *          0.0211  TALLADEGA...............           01600
030067................................  ..............          0.0298  LAPAZ...................           03055
040014................................               *          0.0198  WHITE...................           04720
040019................................               *          0.0258  ST. FRANCIS.............           04610
040039................................               *          0.0172  GREENE..................           04270
040047................................  ..............          0.0117  RANDOLPH................           04600
040067................................  ..............          0.0007  COLUMBIA................           04130
040071................................               *          0.0148  JEFFERSON...............           04340

[[Page 47532]]

 
040076................................               *          0.1000  HOT SPRING..............           04290
040081................................  ..............          0.0357  PIKE....................           04540
040100................................               *          0.0198  WHITE...................           04720
050002................................  ..............          0.0010  ALAMEDA.................           05000
050007................................  ..............          0.0146  SAN MATEO...............           05510
050008................................  ..............          0.0026  SAN FRANCISCO...........           05480
050009................................               *          0.0180  NAPA....................           05380
050013................................               *          0.0180  NAPA....................           05380
050014................................               *          0.0139  AMADOR..................           05020
050016................................  ..............          0.0103  SAN LUIS OBISPO.........           05500
050042................................               *          0.0162  TEHAMA..................           05620
050043................................  ..............          0.0010  ALAMEDA.................           05000
050047................................  ..............          0.0026  SAN FRANCISCO...........           05480
050055................................  ..............          0.0026  SAN FRANCISCO...........           05480
050070................................  ..............          0.0146  SAN MATEO...............           05510
050073................................               *          0.0171  SOLANO..................           05580
050075................................  ..............          0.0010  ALAMEDA.................           05000
050076................................               *          0.0026  SAN FRANCISCO...........           05480
050084................................  ..............          0.0132  SAN JOAQUIN.............           05490
050090................................               *          0.0058  SONOMA..................           05590
050101................................               *          0.0171  SOLANO..................           05580
050113................................  ..............          0.0146  SAN MATEO...............           05510
050118................................               *          0.0132  SAN JOAQUIN.............           05490
050122................................  ..............          0.0132  SAN JOAQUIN.............           05490
050133................................               *          0.0178  YUBA....................           05680
050136................................               *          0.0058  SONOMA..................           05590
050150................................               *          0.0342  NEVADA..................           05390
050152................................  ..............          0.0026  SAN FRANCISCO...........           05480
050167................................  ..............          0.0132  SAN JOAQUIN.............           05490
050174................................               *          0.0058  SONOMA..................           05590
050194................................  ..............          0.0052  SANTA CRUZ..............           05540
050195................................  ..............          0.0010  ALAMEDA.................           05000
050197................................               *          0.0146  SAN MATEO...............           05510
050211................................  ..............          0.0010  ALAMEDA.................           05000
050228................................  ..............          0.0026  SAN FRANCISCO...........           05480
050232................................  ..............          0.0103  SAN LUIS OBISPO.........           05500
050242................................  ..............          0.0052  SANTA CRUZ..............           05540
050264................................  ..............          0.0010  ALAMEDA.................           05000
050283................................  ..............          0.0010  ALAMEDA.................           05000
050289................................  ..............          0.0146  SAN MATEO...............           05510
050291................................               *          0.0058  SONOMA..................           05590
050305................................  ..............          0.0010  ALAMEDA.................           05000
050313................................  ..............          0.0132  SAN JOAQUIN.............           05490
050320................................  ..............          0.0010  ALAMEDA.................           05000
050325................................  ..............          0.0033  TUOLUMNE................           05650
050335................................  ..............          0.0033  TUOLUMNE................           05650
050336................................  ..............          0.0132  SAN JOAQUIN.............           05490
050366................................  ..............          0.0015  CALAVERAS...............           05040
050367................................               *          0.0171  SOLANO..................           05580
050385................................               *          0.0058  SONOMA..................           05590
050407................................  ..............          0.0026  SAN FRANCISCO...........           05480
050444................................  ..............          0.0233  MERCED..................           05340
050454................................  ..............          0.0026  SAN FRANCISCO...........           05480
050457................................  ..............          0.0026  SAN FRANCISCO...........           05480
050476................................               *          0.0278  LAKE....................           05160
050488................................  ..............          0.0010  ALAMEDA.................           05000
050494................................               *          0.0342  NEVADA..................           05390
050506................................  ..............          0.0103  SAN LUIS OBISPO.........           05500
050512................................  ..............          0.0010  ALAMEDA.................           05000
050528................................               *          0.0233  MERCED..................           05340
050541................................               *          0.0146  SAN MATEO...............           05510
050547................................               *          0.0058  SONOMA..................           05590
050633................................  ..............          0.0103  SAN LUIS OBISPO.........           05500
050667................................               *          0.0180  NAPA....................           05380
050668................................  ..............          0.0026  SAN FRANCISCO...........           05480
050680................................               *          0.0171  SOLANO..................           05580
050690................................               *          0.0058  SONOMA..................           05590
050707................................  ..............          0.0146  SAN MATEO...............           05510
050714................................  ..............          0.0052  SANTA CRUZ..............           05540
050748................................  ..............          0.0132  SAN JOAQUIN.............           05490
050754................................  ..............          0.0146  SAN MATEO...............           05510

[[Page 47533]]

 
060001................................               *          0.0042  WELD....................           06610
060003................................               *          0.0069  BOULDER.................           06060
060010................................  ..............          0.0153  LARIMER.................           06340
060027................................               *          0.0069  BOULDER.................           06060
060030................................  ..............          0.0153  LARIMER.................           06340
060103................................               *          0.0069  BOULDER.................           06060
060116................................               *          0.0069  BOULDER.................           06060
070006................................               *          0.0045  FAIRFIELD...............           07000
070010................................               *          0.0045  FAIRFIELD...............           07000
070018................................               *          0.0045  FAIRFIELD...............           07000
070028................................               *          0.0045  FAIRFIELD...............           07000
070033................................               *          0.0045  FAIRFIELD...............           07000
070034................................               *          0.0045  FAIRFIELD...............           07000
080001................................               *          0.0063  NEW CASTLE..............           08010
080003................................               *          0.0063  NEW CASTLE..............           08010
100014................................               *          0.0047  VOLUSIA.................           10630
100017................................               *          0.0047  VOLUSIA.................           10630
100045................................               *          0.0047  VOLUSIA.................           10630
100047................................               *          0.0028  CHARLOTTE...............           10070
100068................................               *          0.0047  VOLUSIA.................           10630
100072................................               *          0.0047  VOLUSIA.................           10630
100077................................               *          0.0028  CHARLOTTE...............           10070
100102................................  ..............          0.0125  COLUMBIA................           10110
100118................................               *          0.0177  FLAGLER.................           10170
100156................................               *          0.0125  COLUMBIA................           10110
100232................................               *          0.0054  PUTNAM..................           10530
100236................................               *          0.0028  CHARLOTTE...............           10070
100252................................               *          0.0151  OKEECHOBEE..............           10460
100290................................  ..............          0.0582  SUMTER..................           10590
110023................................               *          0.0416  GORDON..................           11500
110029................................               *          0.0052  HALL....................           11550
110040................................               *          0.1455  JACKSON.................           11610
110041................................               *          0.0623  HABERSHAM...............           11540
110100................................  ..............          0.0790  JEFFERSON...............           11620
110101................................  ..............          0.0067  COOK....................           11311
110142................................  ..............          0.0185  EVANS...................           11441
110146................................               *          0.0805  CAMDEN..................           11170
110150................................               *          0.0227  BALDWIN.................           11030
110187................................               *          0.0643  LUMPKIN.................           11701
110189................................               *          0.0066  FANNIN..................           11450
110190................................  ..............          0.0241  MACON...................           11710
110205................................  ..............          0.0507  GILMER..................           11471
130003................................               *          0.0235  NEZ PERCE...............           13340
130024................................  ..............          0.0675  BONNER..................           13080
130049................................               *          0.0319  KOOTENAI................           13270
130066................................  ..............          0.0319  KOOTENAI................           13270
130067................................               *          0.0725  BINGHAM.................           13050
130068................................  ..............          0.0319  KOOTENAI................           13270
140001................................  ..............          0.0369  FULTON..................           14370
140026................................  ..............          0.0315  LA SALLE................           14580
140043................................               *          0.0056  WHITESIDE...............           14988
140058................................               *          0.0126  MORGAN..................           14770
140110................................               *          0.0315  LA SALLE................           14580
140160................................               *          0.0332  STEPHENSON..............           14970
140161................................               *          0.0168  LIVINGSTON..............           14610
140167................................               *          0.0632  IROQUOIS................           14460
140234................................  ..............          0.0315  LA SALLE................           14580
150006................................               *          0.0113  LA PORTE................           15450
150015................................  ..............          0.0113  LA PORTE................           15450
150022................................  ..............          0.0158  MONTGOMERY..............           15530
150030................................               *          0.0192  HENRY...................           15320
150072................................  ..............          0.0105  CASS....................           15080
150076................................               *          0.0215  MARSHALL................           15490
150088................................               *          0.0111  MADISON.................           15470
150091................................               *          0.0050  HUNTINGTON..............           15340
150102................................               *          0.0108  STARKE..................           15740
150113................................               *          0.0111  MADISON.................           15470
150133................................               *          0.0193  KOSCIUSKO...............           15420
150146................................               *          0.0319  NOBLE...................           15560
160013................................  ..............          0.0179  MUSCATINE...............           16690
160030................................  ..............          0.0040  STORY...................           16840

[[Page 47534]]

 
160032................................  ..............          0.0235  JASPER..................           16490
160080................................               *          0.0066  CLINTON.................           16220
170137................................               *          0.0336  DOUGLAS.................           17220
170150................................  ..............          0.0166  COWLEY..................           17170
180012................................               *          0.0080  HARDIN..................           18460
180017................................               *          0.0035  BARREN..................           18040
180049................................               *          0.0488  MADISON.................           18750
180064................................  ..............          0.0314  MONTGOMERY..............           18860
180066................................               *          0.0439  LOGAN...................           18700
180070................................  ..............          0.0239  GRAYSON.................           18420
180079................................  ..............          0.0259  HARRISON................           18480
190003................................               *          0.0085  IBERIA..................           19220
190015................................               *          0.0243  TANGIPAHOA..............           19520
190017................................  ..............          0.0187  ST. LANDRY..............           19480
190034................................  ..............          0.0189  VERMILION...............           19560
190044................................  ..............          0.0260  ACADIA..................           19000
190050................................  ..............          0.0044  BEAUREGARD..............           19050
190053................................  ..............          0.0100  JEFFRSON DAVIS..........           19260
190054................................  ..............          0.0085  IBERIA..................           19220
190078................................  ..............          0.0187  ST. LANDRY..............           19480
190086................................               *          0.0061  LINCOLN.................           19300
190088................................               *          0.0387  WEBSTER.................           19590
190099................................               *          0.0189  AVOYELLES...............           19040
190106................................               *          0.0101  ALLEN...................           19010
190116................................  ..............          0.0085  MOREHOUSE...............           19330
190133................................  ..............          0.0101  ALLEN...................           19010
190140................................  ..............          0.0035  FRANKLIN................           19200
190144................................               *          0.0387  WEBSTER.................           19590
190145................................  ..............          0.0090  LA SALLE................           19290
190184................................               *          0.0161  CALDWELL................           19100
190190................................  ..............          0.0161  CALDWELL................           19100
190191................................               *          0.0187  ST. LANDRY..............           19480
190246................................  ..............          0.0161  CALDWELL................           19100
190257................................  ..............          0.0061  LINCOLN.................           19300
200024................................               *          0.0094  ANDROSCOGGIN............           20000
200032................................  ..............          0.0466  OXFORD..................           20080
200034................................               *          0.0094  ANDROSCOGGIN............           20000
200050................................               *          0.0227  HANCOCK.................           20040
210001................................  ..............          0.0187  WASHINGTON..............           21210
210023................................  ..............          0.0079  ANNE ARUNDEL............           21010
210028................................  ..............          0.0512  ST. MARYS...............           21180
210043................................  ..............          0.0079  ANNE ARUNDEL............           21010
220002................................  ..............          0.0271  MIDDLESEX...............           22090
220010................................               *          0.0355  ESSEX...................           22040
220011................................  ..............          0.0271  MIDDLESEX...............           22090
220029................................               *          0.0355  ESSEX...................           22040
220033................................               *          0.0355  ESSEX...................           22040
220035................................               *          0.0355  ESSEX...................           22040
220049................................  ..............          0.0271  MIDDLESEX...............           22090
220063................................  ..............          0.0271  MIDDLESEX...............           22090
220070................................  ..............          0.0271  MIDDLESEX...............           22090
220080................................               *          0.0355  ESSEX...................           22040
220082................................  ..............          0.0271  MIDDLESEX...............           22090
220084................................  ..............          0.0271  MIDDLESEX...............           22090
220098................................  ..............          0.0271  MIDDLESEX...............           22090
220101................................  ..............          0.0271  MIDDLESEX...............           22090
220105................................  ..............          0.0271  MIDDLESEX...............           22090
220171................................  ..............          0.0271  MIDDLESEX...............           22090
220174................................               *          0.0355  ESSEX...................           22040
230003................................               *          0.0220  OTTAWA..................           23690
230005................................  ..............          0.0473  LENAWEE.................           23450
230013................................               *          0.0025  OAKLAND.................           23620
230015................................  ..............          0.0295  ST. JOSEPH..............           23740
230019................................               *          0.0025  OAKLAND.................           23620
230021................................               *          0.0102  BERRIEN.................           23100
230022................................               *          0.0212  BRANCH..................           23110
230029................................               *          0.0025  OAKLAND.................           23620
230035................................               *          0.0095  MONTCALM................           23580
230037................................               *          0.0210  HILLSDALE...............           23290
230047................................               *          0.0021  MACOMB..................           23490
230069................................               *          0.0210  LIVINGSTON..............           23460

[[Page 47535]]

 
230071................................               *          0.0025  OAKLAND.................           23620
230072................................               *          0.0220  OTTAWA..................           23690
230075................................  ..............          0.0047  CALHOUN.................           23120
230078................................               *          0.0102  BERRIEN.................           23100
230092................................               *          0.0223  JACKSON.................           23370
230093................................  ..............          0.0058  MECOSTA.................           23530
230096................................               *          0.0295  ST. JOSEPH..............           23740
230099................................               *          0.0231  MONROE..................           23570
230121................................               *          0.0678  SHIAWASSEE..............           23770
230130................................               *          0.0025  OAKLAND.................           23620
230151................................               *          0.0025  OAKLAND.................           23620
230174................................               *          0.0220  OTTAWA..................           23690
230195................................               *          0.0021  MACOMB..................           23490
230204................................               *          0.0021  MACOMB..................           23490
230207................................               *          0.0025  OAKLAND.................           23620
230208................................               *          0.0095  MONTCALM................           23580
230217................................  ..............          0.0047  CALHOUN.................           23120
230222................................               *          0.0035  MIDLAND.................           23550
230223................................               *          0.0025  OAKLAND.................           23620
230227................................               *          0.0021  MACOMB..................           23490
230254................................               *          0.0025  OAKLAND.................           23620
230257................................               *          0.0021  MACOMB..................           23490
230264................................               *          0.0021  MACOMB..................           23490
230269................................               *          0.0025  OAKLAND.................           23620
230277................................               *          0.0025  OAKLAND.................           23620
230279................................               *          0.0210  LIVINGSTON..............           23460
240018................................  ..............          0.0805  GOODHUE.................           24240
240044................................  ..............          0.0625  WINONA..................           24840
240064................................               *          0.0134  ITASCA..................           24300
240069................................               *          0.0267  STEELE..................           24730
240071................................               *          0.0385  RICE....................           24650
240117................................  ..............          0.0527  MOWER...................           24490
240211................................  ..............          0.0812  PINE....................           24570
250023................................               *          0.0541  PEARL RIVER.............           25540
250040................................               *          0.0021  JACKSON.................           25290
250117................................               *          0.0541  PEARL RIVER.............           25540
250128................................  ..............          0.0446  PANOLA..................           25530
250160................................  ..............          0.0446  PANOLA..................           25530
260059................................  ..............          0.0077  LACLEDE.................           26520
260064................................               *          0.0089  AUDRAIN.................           26030
260097................................  ..............          0.0300  JOHNSON.................           26500
260116................................  ..............          0.0087  ST. FRANCOIS............           26930
260163................................  ..............          0.0087  ST. FRANCOIS............           26930
270081................................  ..............          0.0234  MUSSELSHELL.............           27320
280077................................  ..............          0.0080  DODGE...................           28260
280123................................  ..............          0.0123  GAGE....................           28330
290002................................               *          0.0277  LYON....................           29090
300011................................  ..............          0.0069  HILLSBOROUGH............           30050
300012................................  ..............          0.0069  HILLSBOROUGH............           30050
300020................................  ..............          0.0069  HILLSBOROUGH............           30050
300034................................  ..............          0.0069  HILLSBOROUGH............           30050
310002................................               *          0.0268  ESSEX...................           31200
310009................................               *          0.0268  ESSEX...................           31200
310010................................  ..............          0.0092  MERCER..................           31260
310011................................  ..............          0.0115  CAPE MAY................           31180
310013................................               *          0.0268  ESSEX...................           31200
310018................................               *          0.0268  ESSEX...................           31200
310021................................               *          0.0092  MERCER..................           31260
310038................................               *          0.0209  MIDDLESEX...............           31270
310039................................               *          0.0209  MIDDLESEX...............           31270
310044................................  ..............          0.0092  MERCER..................           31260
310054................................               *          0.0268  ESSEX...................           31200
310070................................               *          0.0209  MIDDLESEX...............           31270
310076................................               *          0.0268  ESSEX...................           31200
310083................................               *          0.0268  ESSEX...................           31200
310092................................  ..............          0.0092  MERCER..................           31260
310093................................               *          0.0268  ESSEX...................           31200
310096................................               *          0.0268  ESSEX...................           31200
310108................................               *          0.0209  MIDDLESEX...............           31270
310110................................  ..............          0.0092  MERCER..................           31260
310119................................               *          0.0268  ESSEX...................           31200

[[Page 47536]]

 
320003................................               *          0.0629  SAN MIGUEL..............           32230
320011................................  ..............          0.0442  RIO ARRIBA..............           32190
320018................................  ..............          0.0024  DONA ANA................           32060
320085................................  ..............          0.0024  DONA ANA................           32060
330004................................               *          0.0633  ULSTER..................           33740
330008................................               *          0.0112  WYOMING.................           33900
330010................................  ..............          0.0054  MONTGOMERY..............           33380
330027................................               *          0.0123  NASSAU..................           33400
330033................................  ..............          0.0214  CHENANGO................           33080
330047................................  ..............          0.0054  MONTGOMERY..............           33380
330073................................               *          0.0134  GENESEE.................           33290
330094................................               *          0.0478  COLUMBIA................           33200
330103................................               *          0.0124  CATTARAUGUS.............           33040
330106................................               *          0.0123  NASSAU..................           33400
330126................................               *          0.0642  ORANGE..................           33540
330132................................  ..............          0.0124  CATTARAUGUS.............           33040
330135................................  ..............          0.0642  ORANGE..................           33540
330167................................               *          0.0123  NASSAU..................           33400
330175................................  ..............          0.0249  CORTLAND................           33210
330181................................               *          0.0123  NASSAU..................           33400
330182................................               *          0.0123  NASSAU..................           33400
330191................................               *          0.0017  WARREN..................           33750
330198................................               *          0.0123  NASSAU..................           33400
330205................................  ..............          0.0642  ORANGE..................           33540
330224................................               *          0.0633  ULSTER..................           33740
330225................................               *          0.0123  NASSAU..................           33400
330235................................               *          0.0293  CAYUGA..................           33050
330259................................               *          0.0123  NASSAU..................           33400
330264................................  ..............          0.0642  ORANGE..................           33540
330276................................  ..............          0.0029  FULTON..................           33280
330331................................               *          0.0123  NASSAU..................           33400
330332................................               *          0.0123  NASSAU..................           33400
330372................................               *          0.0123  NASSAU..................           33400
330386................................               *          0.0727  SULLIVAN................           33710
340020................................  ..............          0.0156  LEE.....................           34520
340021................................               *          0.0162  CLEVELAND...............           34220
340024................................  ..............          0.0177  SAMPSON.................           34810
340027................................               *          0.0128  LENOIR..................           34530
340037................................  ..............          0.0162  CLEVELAND...............           34220
340038................................  ..............          0.0253  BEAUFORT................           34060
340039................................               *          0.0101  IREDELL.................           34480
340068................................               *          0.0087  COLUMBUS................           34230
340069................................               *          0.0015  WAKE....................           34910
340070................................               *          0.0395  ALAMANCE................           34000
340071................................               *          0.0226  HARNETT.................           34420
340073................................               *          0.0015  WAKE....................           34910
340085................................  ..............          0.0250  DAVIDSON................           34280
340096................................  ..............          0.0250  DAVIDSON................           34280
340104................................  ..............          0.0162  CLEVELAND...............           34220
340114................................               *          0.0015  WAKE....................           34910
340124................................               *          0.0226  HARNETT.................           34420
340126................................               *          0.0100  WILSON..................           34970
340129................................               *          0.0101  IREDELL.................           34480
340133................................  ..............          0.0308  MARTIN..................           34580
340138................................               *          0.0015  WAKE....................           34910
340144................................               *          0.0101  IREDELL.................           34480
340145................................               *          0.0336  LINCOLN.................           34540
340151................................  ..............          0.0052  HALIFAX.................           34410
340173................................               *          0.0015  WAKE....................           34910
360002................................  ..............          0.0142  ASHLAND.................           36020
360010................................               *          0.0074  TUSCARAWAS..............           36800
360013................................               *          0.0135  SHELBY..................           36760
360025................................               *          0.0077  ERIE....................           36220
360036................................               *          0.0126  WAYNE...................           36860
360040................................  ..............          0.0387  KNOX....................           36430
360044................................  ..............          0.0127  DARKE...................           36190
360065................................               *          0.0075  HURON...................           36400
360071................................  ..............          0.0035  VAN WERT................           36820
360086................................               *          0.0186  CLARK...................           36110
360096................................               *          0.0071  COLUMBIANA..............           36140
360107................................               *          0.0119  SANDUSKY................           36730

[[Page 47537]]

 
360125................................               *          0.0134  ASHTABULA...............           36030
360156................................  ..............          0.0119  SANDUSKY................           36730
360175................................               *          0.0183  CLINTON.................           36130
360185................................               *          0.0071  COLUMBIANA..............           36140
360187................................               *          0.0186  CLARK...................           36110
360245................................               *          0.0134  ASHTABULA...............           36030
370014................................               *          0.0361  BRYAN...................           37060
370015................................               *          0.0367  MAYES...................           37480
370023................................  ..............          0.0090  STEPHENS................           37680
370065................................  ..............          0.0096  CRAIG...................           37170
370072................................  ..............          0.0258  LATIMER.................           37380
370083................................  ..............          0.0051  PUSHMATAHA..............           37630
370100................................  ..............          0.0100  CHOCTAW.................           37110
370149................................               *          0.0302  POTTAWATOMIE............           37620
370156................................  ..............          0.0121  GARVIN..................           37240
370169................................  ..............          0.0163  MCINTOSH................           37450
370172................................  ..............          0.0258  LATIMER.................           37380
370214................................  ..............          0.0121  GARVIN..................           37240
380022................................               *          0.0067  LINN....................           38210
380029................................  ..............          0.0075  MARION..................           38230
380051................................  ..............          0.0075  MARION..................           38230
380056................................  ..............          0.0075  MARION..................           38230
390008................................  ..............          0.0056  LAWRENCE................           39450
390016................................               *          0.0056  LAWRENCE................           39450
390030................................               *          0.0284  SCHUYLKILL..............           39650
390031................................               *          0.0284  SCHUYLKILL..............           39650
390044................................               *          0.0191  BERKS...................           39110
390052................................  ..............          0.0044  CLEARFIELD..............           39230
390065................................               *          0.0523  ADAMS...................           39000
390066................................               *          0.0364  LEBANON.................           39460
390079................................               *          0.0007  BRADFORD................           39130
390086................................               *          0.0044  CLEARFIELD..............           39230
390096................................               *          0.0191  BERKS...................           39110
390113................................               *          0.0050  CRAWFORD................           39260
390122................................  ..............          0.0050  CRAWFORD................           39260
390138................................               *          0.0214  FRANKLIN................           39350
390146................................  ..............          0.0020  WARREN..................           39740
390150................................  ..............          0.0022  GREENE..................           39370
390151................................               *          0.0214  FRANKLIN................           39350
390162................................               *          0.0200  NORTHAMPTON.............           39590
390181................................  ..............          0.0284  SCHUYLKILL..............           39650
390183................................               *          0.0284  SCHUYLKILL..............           39650
390201................................               *          0.1163  MONROE..................           39550
390236................................  ..............          0.0007  BRADFORD................           39130
390313................................               *          0.0284  SCHUYLKILL..............           39650
420007................................               *          0.0027  SPARTANBURG.............           42410
420009................................               *          0.0113  OCONEE..................           42360
420019................................  ..............          0.0158  CHESTER.................           42110
420027................................               *          0.0108  ANDERSON................           42030
420030................................               *          0.0069  COLLETON................           42140
420036................................               *          0.0064  LANCASTER...............           42280
420039................................               *          0.0153  UNION...................           42430
420043................................  ..............          0.0157  CHEROKEE................           42100
420053................................  ..............          0.0035  NEWBERRY................           42350
420062................................               *          0.0109  CHESTERFIELD............           42120
420068................................               *          0.0027  ORANGEBURG..............           42370
420069................................               *          0.0052  CLARENDON...............           42130
420083................................               *          0.0027  SPARTANBURG.............           42410
430008................................  ..............          0.0535  BROOKINGS...............           43050
430048................................  ..............          0.0129  LAWRENCE................           43400
430094................................  ..............          0.0129  LAWRENCE................           43400
440007................................  ..............          0.0219  COFFEE..................           44150
440008................................               *          0.0449  HENDERSON...............           44380
440016................................  ..............          0.0144  CARROLL.................           44080
440024................................               *          0.0230  BRADLEY.................           44050
440030................................  ..............          0.0056  HAMBLEN.................           44310
440031................................  ..............          0.0019  ROANE...................           44720
440033................................  ..............          0.0027  CAMPBELL................           44060
440035................................               *          0.0301  MONTGOMERY..............           44620
440047................................  ..............          0.0338  GIBSON..................           44260
440051................................  ..............          0.0082  MC NAIRY................           44540

[[Page 47538]]

 
440057................................  ..............          0.0021  CLAIBORNE...............           44120
440060................................               *          0.0338  GIBSON..................           44260
440067................................  ..............          0.0056  HAMBLEN.................           44310
440070................................  ..............          0.0109  DECATUR.................           44190
440081................................  ..............          0.0052  SEVIER..................           44770
440084................................  ..............          0.0025  MONROE..................           44610
440109................................  ..............          0.0070  HARDIN..................           44350
440115................................  ..............          0.0338  GIBSON..................           44260
440137................................  ..............          0.0738  BEDFORD.................           44010
440144................................               *          0.0219  COFFEE..................           44150
440148................................               *          0.0296  DE KALB.................           44200
440153................................  ..............          0.0007  COCKE...................           44140
440174................................  ..............          0.0312  HAYWOOD.................           44370
440180................................  ..............          0.0027  CAMPBELL................           44060
440181................................  ..............          0.0365  HARDEMAN................           44340
440182................................  ..............          0.0144  CARROLL.................           44080
440185................................               *          0.0230  BRADLEY.................           44050
450032................................               *          0.0254  HARRISON................           45620
450039................................               *          0.0024  TARRANT.................           45910
450052................................               *          0.0276  BOSQUE..................           45160
450059................................               *          0.0075  COMAL...................           45320
450064................................               *          0.0024  TARRANT.................           45910
450087................................               *          0.0024  TARRANT.................           45910
450090................................  ..............          0.0649  COOKE...................           45340
450099................................               *          0.0145  GRAY....................           45563
450135................................               *          0.0024  TARRANT.................           45910
450137................................               *          0.0024  TARRANT.................           45910
450144................................  ..............          0.0559  ANDREWS.................           45010
450163................................  ..............          0.0054  KLEBERG.................           45743
450192................................  ..............          0.0271  HILL....................           45651
450194................................  ..............          0.0213  CHEROKEE................           45281
450210................................  ..............          0.0150  PANOLA..................           45842
450224................................               *          0.0195  WOOD....................           45974
450236................................  ..............          0.0388  HOPKINS.................           45654
450270................................  ..............          0.0271  HILL....................           45651
450283................................               *          0.0653  VAN ZANDT...............           45947
450324................................               *          0.0132  GRAYSON.................           45564
450347................................               *          0.0370  WALKER..................           45949
450348................................               *          0.0059  FALLS...................           45500
450370................................  ..............          0.0235  COLORADO................           45312
450389................................               *          0.0618  HENDERSON...............           45640
450393................................               *          0.0132  GRAYSON.................           45564
450395................................               *          0.0440  POLK....................           45850
450419................................               *          0.0024  TARRANT.................           45910
450438................................               *          0.0235  COLORADO................           45312
450451................................  ..............          0.0535  SOMERVELL...............           45893
450460................................  ..............          0.0053  TYLER...................           45942
450469................................               *          0.0132  GRAYSON.................           45564
450497................................  ..............          0.0375  MONTAGUE................           45800
450539................................  ..............          0.0067  HALE....................           45582
450547................................  ..............          0.0195  WOOD....................           45974
450563................................               *          0.0024  TARRANT.................           45910
450565................................  ..............          0.0486  PALO PINTO..............           45841
450573................................  ..............          0.0125  JASPER..................           45690
450596................................               *          0.0742  HOOD....................           45653
450639................................               *          0.0024  TARRANT.................           45910
450641................................  ..............          0.0375  MONTAGUE................           45800
450672................................               *          0.0024  TARRANT.................           45910
450675................................               *          0.0024  TARRANT.................           45910
450677................................               *          0.0024  TARRANT.................           45910
450698................................  ..............          0.0127  LAMB....................           45751
450747................................               *          0.0126  ANDERSON................           45000
450755................................  ..............          0.0276  HOCKLEY.................           45652
450770................................               *          0.0181  MILAM...................           45795
450779................................               *          0.0024  TARRANT.................           45910
450813................................               *          0.0126  ANDERSON................           45000
450838................................  ..............          0.0125  JASPER..................           45690
450872................................               *          0.0024  TARRANT.................           45910
450880................................               *          0.0024  TARRANT.................           45910
450884................................  ..............          0.0049  UPSHUR..................           45943
450886................................  ..............          0.0024  TARRANT.................           45910

[[Page 47539]]

 
450888................................  ..............          0.0024  TARRANT.................           45910
460017................................  ..............          0.0384  BOX ELDER...............           46010
460039................................               *          0.0384  BOX ELDER...............           46010
490019................................               *          0.1088  CULPEPER................           49230
490084................................  ..............          0.0187  ESSEX...................           49280
490110................................  ..............          0.0184  MONTGOMERY..............           49600
500003................................               *          0.0166  SKAGIT..................           50280
500007................................               *          0.0166  SKAGIT..................           50280
500019................................  ..............          0.0131  LEWIS...................           50200
500039................................               *          0.0094  KITSAP..................           50170
500041................................               *          0.0020  COWLITZ.................           50070
510012................................  ..............          0.0124  MASON...................           51260
510018................................               *          0.0187  JACKSON.................           51170
510047................................               *          0.0269  MARION..................           51240
510077................................               *          0.0021  MINGO...................           51290
520028................................               *          0.0286  GREEN...................           52220
520035................................  ..............          0.0076  SHEBOYGAN...............           52580
520044................................  ..............          0.0076  SHEBOYGAN...............           52580
520057................................  ..............          0.0193  SAUK....................           52550
520059................................               *          0.0195  RACINE..................           52500
520071................................               *          0.0161  JEFFERSON...............           52270
520076................................               *          0.0146  DODGE...................           52130
520095................................               *          0.0193  SAUK....................           52550
520096................................  ..............          0.0195  RACINE..................           52500
520102................................               *          0.0242  WALWORTH................           52630
520116................................               *          0.0161  JEFFERSON...............           52270
----------------------------------------------------------------------------------------------------------------


  Table 5.--List of Medicare Severity-Diagnosis Related Groups (MS-DRGs), Relative Weighting Factors, and Geometric and Arithmetic Mean Length of Stay
--------------------------------------------------------------------------------------------------------------------------------------------------------
                     FY 2008 final rule  FY 2008 final rule                                                                      Geometric    Arithmetic
       MS-DRG          post-acute DRG      special pay DRG    MDC          TYPE                MS-DRG title          Weights      mean LOS     mean LOS
--------------------------------------------------------------------------------------------------------------------------------------------------------
001................  No................  No................    PRE  SURG..............  Heart transplant or            23.1117         30.8         45.6
                                                                                         implant of heart assist
                                                                                         system w MCC.
002................  No................  No................    PRE  SURG..............  Heart transplant or            16.2735         16.1         22.8
                                                                                         implant of heart assist
                                                                                         system w/o MCC.
003................  Yes...............  No................    PRE  SURG..............  ECMO or trach w MV 96+         18.7707         33.4         40.6
                                                                                         hrs or PDX exc face,
                                                                                         mouth & neck w maj O.R..
004................  Yes...............  No................    PRE  SURG..............  Trach w MV 96+ hrs or PDX      11.4219         23.8         29.3
                                                                                         exc face, mouth & neck w/
                                                                                         o maj O.R..
005................  No................  No................    PRE  SURG..............  Liver transplant w MCC or      10.6120         17.6         23.5
                                                                                         intestinal transplant.
006................  No................  No................    PRE  SURG..............  Liver transplant w/o MCC.       7.2562          9.1         10.5
007................  No................  No................    PRE  SURG..............  Lung transplant..........       8.4002         14.6         17.3
008................  No................  No................    PRE  SURG..............  Simultaneous pancreas/          5.1726         10.1         11.8
                                                                                         kidney transplant.
009................  No................  No................    PRE  SURG..............  Bone marrow transplant...       6.4842         18.1         21.7
010................  No................  No................    PRE  SURG..............  Pancreas transplant......       3.8902          9.2         10.5
011................  No................  No................    PRE  SURG..............  Tracheostomy for                4.1482         12.8         16.2
                                                                                         face,mouth & neck
                                                                                         diagnoses w MCC.
012................  No................  No................    PRE  SURG..............  Tracheostomy for                3.2472          8.9         10.9
                                                                                         face,mouth & neck
                                                                                         diagnoses w CC.
013................  No................  No................    PRE  SURG..............  Tracheostomy for                2.6760          6.1          7.2
                                                                                         face,mouth & neck
                                                                                         diagnoses w/o CC/MCC.
020................  No................  No................     01  SURG..............  Intracranial vascular           7.7073         15.2         19.1
                                                                                         procedures w PDX
                                                                                         hemorrhage w MCC.
021................  No................  No................     01  SURG..............  Intracranial vascular           6.7021         13.4         15.5
                                                                                         procedures w PDX
                                                                                         hemorrhage w CC.
022................  No................  No................     01  SURG..............  Intracranial vascular           5.6085          7.8          9.6
                                                                                         procedures w PDX
                                                                                         hemorrhage w/o CC/MCC.
023................  No................  No................     01  SURG..............  Cranio w major dev impl/        4.7036          9.0         12.8
                                                                                         acute complex CNS PDX w
                                                                                         MCC or chemo implant.
024................  No................  No................     01  SURG..............  Cranio w major dev impl/        3.8978          6.1          8.9
                                                                                         acute complex CNS PDX w/
                                                                                         o MCC.
025................  Yes...............  No................     01  SURG..............  Craniotomy & endovascular       4.2362         10.3         13.3
                                                                                         intracranial procedures
                                                                                         w MCC.

[[Page 47540]]

 
026................  Yes...............  No................     01  SURG..............  Craniotomy & endovascular       3.1582          6.5          8.2
                                                                                         intracranial procedures
                                                                                         w CC.
027................  Yes...............  No................     01  SURG..............  Craniotomy & endovascular       2.3259          3.5          4.6
                                                                                         intracranial procedures
                                                                                         w/o CC/MCC.
028................  Yes...............  Yes...............     01  SURG..............  Spinal procedures w MCC..       4.2339         10.8         14.7
029................  Yes...............  Yes...............     01  SURG..............  Spinal procedures w CC or       2.8356          5.3          7.3
                                                                                         spinal neurostimulators.
030................  Yes...............  Yes...............     01  SURG..............  Spinal procedures w/o CC/       1.7617          2.8          3.7
                                                                                         MCC.
031................  Yes...............  No................     01  SURG..............  Ventricular shunt               3.2226          9.2         13.2
                                                                                         procedures w MCC.
032................  Yes...............  No................     01  SURG..............  Ventricular shunt               1.9342          3.8          5.8
                                                                                         procedures w CC.
033................  Yes...............  No................     01  SURG..............  Ventricular shunt               1.4281          2.3          3.1
                                                                                         procedures w/o CC/MCC.
034................  No................  No................     01  SURG..............  Carotid artery stent            2.5438          4.8          7.3
                                                                                         procedure w MCC.
035................  No................  No................     01  SURG..............  Carotid artery stent            1.8996          2.0          2.9
                                                                                         procedure w CC.
036................  No................  No................     01  SURG..............  Carotid artery stent            1.6977          1.3          1.6
                                                                                         procedure w/o CC/MCC.
037................  No................  No................     01  SURG..............  Extracranial procedures w       2.2630          6.0          8.7
                                                                                         MCC.
038................  No................  No................     01  SURG..............  Extracranial procedures w       1.4686          2.5          3.7
                                                                                         CC.
039................  No................  No................     01  SURG..............  Extracranial procedures w/      1.0909          1.5          1.8
                                                                                         o CC/MCC.
040................  Yes...............  Yes...............     01  SURG..............  Periph/cranial nerve &          3.2550         10.0         13.6
                                                                                         other nerv syst proc w
                                                                                         MCC.
041................  Yes...............  Yes...............     01  SURG..............  Periph/cranial nerve &          2.3595          5.4          7.3
                                                                                         other nerv syst proc w
                                                                                         CC or periph neurostim.
042................  Yes...............  Yes...............     01  SURG..............  Periph/cranial nerve &          1.8710          2.5          3.6
                                                                                         other nerv syst proc w/o
                                                                                         CC/MCC.
052................  No................  No................     01  MED...............  Spinal disorders &              1.4329          4.7          7.0
                                                                                         injuries w CC/MCC.
053................  No................  No................     01  MED...............  Spinal disorders &              1.1172          3.1          4.0
                                                                                         injuries w/o CC/MCC.
054................  Yes...............  No................     01  MED...............  Nervous system neoplasms        1.4228          5.3          7.2
                                                                                         w MCC.
055................  Yes...............  No................     01  MED...............  Nervous system neoplasms        1.1213          3.8          5.0
                                                                                         w/o MCC.
056................  Yes...............  No................     01  MED...............  Degenerative nervous            1.2820          5.8          7.8
                                                                                         system disorders w MCC.
057................  Yes...............  No................     01  MED...............  Degenerative nervous            0.8951          3.9          4.9
                                                                                         system disorders w/o MCC.
058................  No................  No................     01  MED...............  Multiple sclerosis &            1.2669          5.8          8.0
                                                                                         cerebellar ataxia w MCC.
059................  No................  No................     01  MED...............  Multiple sclerosis &            0.9226          4.3          5.2
                                                                                         cerebellar ataxia w CC.
060................  No................  No................     01  MED...............  Multiple sclerosis &            0.8160          3.4          4.1
                                                                                         cerebellar ataxia w/o CC/
                                                                                         MCC.
061................  No................  No................     01  MED...............  Acute ischemic stroke w         2.5541          7.3          9.6
                                                                                         use of thrombolytic
                                                                                         agent w MCC.
062................  No................  No................     01  MED...............  Acute ischemic stroke w         2.0886          5.3          6.3
                                                                                         use of thrombolytic
                                                                                         agent w CC.
063................  No................  No................     01  MED...............  Acute ischemic stroke w         1.8642          3.9          4.5
                                                                                         use of thrombolytic
                                                                                         agent w/o CC/MCC.
064................  Yes...............  No................     01  MED...............  Intracranial hemorrhage         1.5470          5.6          7.6
                                                                                         or cerebral infarction w
                                                                                         MCC.
065................  Yes...............  No................     01  MED...............  Intracranial hemorrhage         1.1901          4.3          5.3
                                                                                         or cerebral infarction w
                                                                                         CC.
066................  Yes...............  No................     01  MED...............  Intracranial hemorrhage         1.0303          3.1          3.8
                                                                                         or cerebral infarction w/
                                                                                         o CC/MCC.
067................  No................  No................     01  MED...............  Nonspecific cva &               1.2194          4.7          6.2
                                                                                         precerebral occlusion w/
                                                                                         o infarct w MCC.
068................  No................  No................     01  MED...............  Nonspecific cva &               0.9131          2.8          3.6
                                                                                         precerebral occlusion w/
                                                                                         o infarct w/o MCC.
069................  No................  No................     01  MED...............  Transient ischemia.......       0.7339          2.5          3.1
070................  Yes...............  No................     01  MED...............  Nonspecific                     1.6212          6.0          7.9
                                                                                         cerebrovascular
                                                                                         disorders w MCC.
071................  Yes...............  No................     01  MED...............  Nonspecific                     1.2522          4.5          5.6
                                                                                         cerebrovascular
                                                                                         disorders w CC.
072................  Yes...............  No................     01  MED...............  Nonspecific                     0.9586          2.9          3.7
                                                                                         cerebrovascular
                                                                                         disorders w/o CC/MCC.
073................  No................  No................     01  MED...............  Cranial & peripheral            1.1717          4.8          6.4
                                                                                         nerve disorders w MCC.
074................  No................  No................     01  MED...............  Cranial & peripheral            0.8954          3.4          4.4
                                                                                         nerve disorders w/o MCC.

[[Page 47541]]

 
075................  No................  No................     01  MED...............  Viral meningitis w CC/MCC       1.5369          6.0          7.6
076................  No................  No................     01  MED...............  Viral meningitis w/o CC/        1.1439          3.4          4.2
                                                                                         MCC.
077................  No................  No................     01  MED...............  Hypertensive                    1.4611          5.6          7.2
                                                                                         encephalopathy w MCC.
078................  No................  No................     01  MED...............  Hypertensive                    1.0996          3.7          4.6
                                                                                         encephalopathy w CC.
079................  No................  No................     01  MED...............  Hypertensive                    0.9839          2.8          3.4
                                                                                         encephalopathy w/o CC/
                                                                                         MCC.
080................  No................  No................     01  MED...............  Nontraumatic stupor &           0.9014          3.6          4.9
                                                                                         coma w MCC.
081................  No................  No................     01  MED...............  Nontraumatic stupor &           0.7161          2.7          3.4
                                                                                         coma w/o MCC.
082................  No................  No................     01  MED...............  Traumatic stupor & coma,        1.6724          3.9          6.4
                                                                                         coma >=1 hr w MCC.
083................  No................  No................     01  MED...............  Traumatic stupor & coma,        1.3328          3.7          5.2
                                                                                         coma >=1 hr w CC.
084................  No................  No................     01  MED...............  Traumatic stupor & coma,        1.1106          2.3          3.1
                                                                                         coma >=1 hr w/o CC/MCC.
085................  Yes...............  No................     01  MED...............  Traumatic stupor & coma,        1.6946          5.7          7.9
                                                                                         coma <1 hr w MCC.
086................  Yes...............  No................     01  MED...............  Traumatic stupor & coma,        1.2337          4.0          5.1
                                                                                         coma <1 hr w CC.
087................  Yes...............  No................     01  MED...............  Traumatic stupor & coma,        0.9235          2.6          3.4
                                                                                         coma <1 hr w/o CC/MCC.
088................  No................  No................     01  MED...............  Concussion w MCC.........       1.2968          4.3          6.1
089................  No................  No................     01  MED...............  Concussion w CC..........       0.9479          3.0          3.8
090................  No................  No................     01  MED...............  Concussion w/o CC/MCC....       0.7405          2.0          2.5
091................  Yes...............  No................     01  MED...............  Other disorders of              1.3242          4.7          6.6
                                                                                         nervous system w MCC.
092................  Yes...............  No................     01  MED...............  Other disorders of              0.9529          3.5          4.4
                                                                                         nervous system w CC.
093................  Yes...............  No................     01  MED...............  Other disorders of              0.7710          2.6          3.2
                                                                                         nervous system w/o CC/
                                                                                         MCC.
094................  No................  No................     01  MED...............  Bacterial & tuberculous         3.1499          9.7         12.5
                                                                                         infections of nervous
                                                                                         system w MCC.
095................  No................  No................     01  MED...............  Bacterial & tuberculous         2.5679          7.2          9.1
                                                                                         infections of nervous
                                                                                         system w CC.
096................  No................  No................     01  MED...............  Bacterial & tuberculous         2.3482          4.9          6.2
                                                                                         infections of nervous
                                                                                         system w/o CC/MCC.
097................  No................  No................     01  MED...............  Non-bacterial infect of         2.6665          9.3         11.8
                                                                                         nervous sys exc viral
                                                                                         meningitis w MCC.
098................  No................  No................     01  MED...............  Non-bacterial infect of         2.0568          6.8          8.5
                                                                                         nervous sys exc viral
                                                                                         meningitis w CC.
099................  No................  No................     01  MED...............  Non-bacterial infect of         1.8177          5.1          6.3
                                                                                         nervous sys exc viral
                                                                                         meningitis w/o CC/MCC.
100................  Yes...............  No................     01  MED...............  Seizures w MCC...........       1.2500          4.7          6.3
101................  Yes...............  No................     01  MED...............  Seizures w/o MCC.........       0.8258          2.9          3.7
102................  No................  No................     01  MED...............  Headaches w MCC..........       0.8710          3.6          5.1
103................  No................  No................     01  MED...............  Headaches w/o MCC........       0.6677          2.5          3.2
113................  No................  No................     02  SURG..............  Orbital procedures w CC/        1.4141          3.8          5.5
                                                                                         MCC.
114................  No................  No................     02  SURG..............  Orbital procedures w/o CC/      1.0292          2.0          2.7
                                                                                         MCC.
115................  No................  No................     02  SURG..............  Extraocular procedures          1.1185          3.3          4.5
                                                                                         except orbit.
116................  No................  No................     02  SURG..............  Intraocular procedures w        0.8891          2.2          3.4
                                                                                         CC/MCC.
117................  No................  No................     02  SURG..............  Intraocular procedures w/       0.7094          1.5          1.9
                                                                                         o CC/MCC.
121................  No................  No................     02  MED...............  Acute major eye                 0.8800          4.6          5.8
                                                                                         infections w CC/MCC.
122................  No................  No................     02  MED...............  Acute major eye                 0.6608          3.3          4.1
                                                                                         infections w/o CC/MCC.
123................  No................  No................     02  MED...............  Neurological eye                0.7224          2.4          2.9
                                                                                         disorders.
124................  No................  No................     02  MED...............  Other disorders of the          0.9308          3.9          5.3
                                                                                         eye w MCC.
125................  No................  No................     02  MED...............  Other disorders of the          0.6792          2.7          3.5
                                                                                         eye w/o MCC.
129................  No................  No................     03  SURG..............  Major head & neck               1.7992          3.7          5.1
                                                                                         procedures w CC/MCC or
                                                                                         major device.
130................  No................  No................     03  SURG..............  Major head & neck               1.3987          2.4          3.2
                                                                                         procedures w/o CC/MCC.
131................  No................  No................     03  SURG..............  Cranial/facial procedures       1.6300          4.0          5.8
                                                                                         w CC/MCC.
132................  No................  No................     03  SURG..............  Cranial/facial procedures       1.2054          2.1          2.6
                                                                                         w/o CC/MCC.
133................  No................  No................     03  SURG..............  Other ear, nose, mouth &        1.4331          3.7          5.8
                                                                                         throat O.R. procedures w
                                                                                         CC/MCC.
134................  No................  No................     03  SURG..............  Other ear, nose, mouth &        0.9474          1.7          2.1
                                                                                         throat O.R. procedures w/
                                                                                         o CC/MCC.

[[Page 47542]]

 
135................  No................  No................     03  SURG..............  Sinus & mastoid                 1.5318          4.3          6.4
                                                                                         procedures w CC/MCC.
136................  No................  No................     03  SURG..............  Sinus & mastoid                 1.1094          1.8          2.6
                                                                                         procedures w/o CC/MCC.
137................  No................  No................     03  SURG..............  Mouth procedures w CC/MCC       1.2677          3.7          5.4
138................  No................  No................     03  SURG..............  Mouth procedures w/o CC/        0.8474          1.9          2.4
                                                                                         MCC.
139................  No................  No................     03  SURG..............  Salivary gland procedures       0.8470          1.4          1.8
146................  No................  No................     03  MED...............  Ear, nose, mouth & throat       1.7734          7.1         10.3
                                                                                         malignancy w MCC.
147................  No................  No................     03  MED...............  Ear, nose, mouth & throat       1.2182          4.2          5.8
                                                                                         malignancy w CC.
148................  No................  No................     03  MED...............  Ear, nose, mouth & throat       1.0070          2.5          3.5
                                                                                         malignancy w/o CC/MCC.
149................  No................  No................     03  MED...............  Dysequilibrium...........       0.6154          2.2          2.7
150................  No................  No................     03  MED...............  Epistaxis w MCC..........       0.9916          4.0          5.5
151................  No................  No................     03  MED...............  Epistaxis w/o MCC........       0.6227          2.3          2.9
152................  No................  No................     03  MED...............  Otitis media & URI w MCC.       0.8160          3.7          4.7
153................  No................  No................     03  MED...............  Otitis media & URI w/o          0.6207          2.8          3.4
                                                                                         MCC.
154................  No................  No................     03  MED...............  Nasal trauma & deformity        1.1294          4.8          6.5
                                                                                         w MCC.
155................  No................  No................     03  MED...............  Nasal trauma & deformity        0.8630          3.5          4.5
                                                                                         w CC.
156................  No................  No................     03  MED...............  Nasal trauma & deformity        0.7412          2.5          3.2
                                                                                         w/o CC/MCC.
157................  No................  No................     03  MED...............  Dental & Oral Diseases w        1.1909          5.0          6.9
                                                                                         MCC.
158................  No................  No................     03  MED...............  Dental & Oral Diseases w        0.8653          3.4          4.4
                                                                                         CC.
159................  No................  No................     03  MED...............  Dental & Oral Diseases w/       0.7361          2.4          3.1
                                                                                         o CC/MCC.
163................  Yes...............  No................     04  SURG..............  Major chest procedures w        4.0452         12.2         15.0
                                                                                         MCC.
164................  Yes...............  No................     04  SURG..............  Major chest procedures w        2.8081          6.9          8.3
                                                                                         CC.
165................  Yes...............  No................     04  SURG..............  Major chest procedures w/       2.4106          4.5          5.4
                                                                                         o CC/MCC.
166................  Yes...............  No................     04  SURG..............  Other resp system O.R.          3.2677         10.1         13.0
                                                                                         procedures w MCC.
167................  Yes...............  No................     04  SURG..............  Other resp system O.R.          2.4151          6.5          8.1
                                                                                         procedures w CC.
168................  Yes...............  No................     04  SURG..............  Other resp system O.R.          1.8181          4.0          5.4
                                                                                         procedures w/o CC/MCC.
175................  Yes...............  No................     04  MED...............  Pulmonary embolism w MCC.       1.4152          6.1          7.4
176................  Yes...............  No................     04  MED...............  Pulmonary embolism w/o          1.1580          4.7          5.5
                                                                                         MCC.
177................  Yes...............  No................     04  MED...............  Respiratory infections &        1.8444          7.2          9.2
                                                                                         inflammations w MCC.
178................  Yes...............  No................     04  MED...............  Respiratory infections &        1.5636          6.0          7.4
                                                                                         inflammations w CC.
179................  Yes...............  No................     04  MED...............  Respiratory infections &        1.2754          4.6          5.6
                                                                                         inflammations w/o CC/MCC.
180................  No................  No................     04  MED...............  Respiratory neoplasms w         1.5550          6.1          8.0
                                                                                         MCC.
181................  No................  No................     04  MED...............  Respiratory neoplasms w         1.3126          4.5          6.0
                                                                                         CC.
182................  No................  No................     04  MED...............  Respiratory neoplasms w/o       1.1455          3.3          4.3
                                                                                         CC/MCC.
183................  No................  No................     04  MED...............  Major chest trauma w MCC.       1.2664          5.7          7.2
184................  No................  No................     04  MED...............  Major chest trauma w CC..       0.9611          3.8          4.6
185................  No................  No................     04  MED...............  Major chest trauma w/o CC/      0.7298          2.7          3.3
                                                                                         MCC.
186................  Yes...............  No................     04  MED...............  Pleural effusion w MCC...       1.4542          5.8          7.5
187................  Yes...............  No................     04  MED...............  Pleural effusion w CC....       1.1947          4.2          5.5
188................  Yes...............  No................     04  MED...............  Pleural effusion w/o CC/        0.9745          3.2          4.1
                                                                                         MCC.
189................  No................  No................     04  MED...............  Pulmonary edema &               1.3660          4.8          6.2
                                                                                         respiratory failure.
190................  Yes...............  No................     04  MED...............  Chronic obstructive             1.1138          5.1          6.5
                                                                                         pulmonary disease w MCC.
191................  Yes...............  No................     04  MED...............  Chronic obstructive             0.9405          4.2          5.1
                                                                                         pulmonary disease w CC.
192................  Yes...............  No................     04  MED...............  Chronic obstructive             0.8145          3.4          4.0
                                                                                         pulmonary disease w/o CC/
                                                                                         MCC.
193................  Yes...............  No................     04  MED...............  Simple pneumonia &              1.2505          5.5          6.9
                                                                                         pleurisy w MCC.
194................  Yes...............  No................     04  MED...............  Simple pneumonia &              1.0235          4.5          5.3
                                                                                         pleurisy w CC.
195................  Yes...............  No................     04  MED...............  Simple pneumonia &              0.8398          3.5          4.1
                                                                                         pleurisy w/o CC/MCC.
196................  Yes...............  No................     04  MED...............  Interstitial lung disease       1.3781          5.8          7.3
                                                                                         w MCC.
197................  Yes...............  No................     04  MED...............  Interstitial lung disease       1.1458          4.4          5.4
                                                                                         w CC.
198................  Yes...............  No................     04  MED...............  Interstitial lung disease       0.9654          3.5          4.3
                                                                                         w/o CC/MCC.
199................  No................  No................     04  MED...............  Pneumothorax w MCC.......       1.4699          6.6          8.5
200................  No................  No................     04  MED...............  Pneumothorax w CC........       1.0753          3.9          5.1
201................  No................  No................     04  MED...............  Pneumothorax w/o CC/MCC..       0.8588          3.2          4.1

[[Page 47543]]

 
202................  No................  No................     04  MED...............  Bronchitis & asthma w CC/       0.7841          3.6          4.5
                                                                                         MCC.
203................  No................  No................     04  MED...............  Bronchitis & asthma w/o         0.6252          2.9          3.5
                                                                                         CC/MCC.
204................  No................  No................     04  MED...............  Respiratory signs &             0.6658          2.2          2.9
                                                                                         symptoms.
205................  Yes...............  No................     04  MED...............  Other respiratory system        1.0636          4.2          5.6
                                                                                         diagnoses w MCC.
206................  Yes...............  No................     04  MED...............  Other respiratory system        0.7848          2.7          3.5
                                                                                         diagnoses w/o MCC.
207................  Yes...............  No................     04  MED...............  Respiratory system              5.1231         12.6         15.0
                                                                                         diagnosis w ventilator
                                                                                         support 96+ hours.
208................  No................  No................     04  MED...............  Respiratory system              2.2463          5.2          7.3
                                                                                         diagnosis w ventilator
                                                                                         support 96 hours.
215................  No................  No................     05  SURG..............  Other heart assist system      12.0016          6.3         12.0
                                                                                         implant.
216................  Yes...............  No................     05  SURG..............  Cardiac valve & oth maj         9.3040         15.9         18.7
                                                                                         cardiothoracic proc w
                                                                                         card cath w MCC.
217................  Yes...............  No................     05  SURG..............  Cardiac valve & oth maj         7.5813         10.9         12.2
                                                                                         cardiothoracic proc w
                                                                                         card cath w CC.
218................  Yes...............  No................     05  SURG..............  Cardiac valve & oth maj         6.8595          8.3          9.1
                                                                                         cardiothoracic proc w
                                                                                         card cath w/o CC/MCC.
219................  Yes...............  Yes...............     05  SURG..............  Cardiac valve & oth maj         7.2072         11.7         14.5
                                                                                         cardiothoracic proc w/o
                                                                                         card cath w MCC.
220................  Yes...............  Yes...............     05  SURG..............  Cardiac valve & oth maj         5.7278          7.6          8.6
                                                                                         cardiothoracic proc w/o
                                                                                         card cath w CC.
221................  Yes...............  Yes...............     05  SURG..............  Cardiac valve & oth maj         5.2463          6.0          6.4
                                                                                         cardiothoracic proc w/o
                                                                                         card cath w/o CC/MCC.
222................  No................  No................     05  SURG..............  Cardiac defib implant w         8.0234         10.8         13.3
                                                                                         cardiac cath w AMI/HF/
                                                                                         shock w MCC.
223................  No................  No................     05  SURG..............  Cardiac defib implant w         6.8809          5.0          6.6
                                                                                         cardiac cath w AMI/HF/
                                                                                         shock w/o MCC.
224................  No................  No................     05  SURG..............  Cardiac defib implant w         7.3178          9.2         11.5
                                                                                         cardiac cath w/o AMI/HF/
                                                                                         shock w MCC.
225................  No................  No................     05  SURG..............  Cardiac defib implant w         6.2956          4.5          5.7
                                                                                         cardiac cath w/o AMI/HF/
                                                                                         shock w/o MCC.
226................  No................  No................     05  SURG..............  Cardiac defibrillator           5.9123          6.2          9.4
                                                                                         implant w/o cardiac cath
                                                                                         w MCC.
227................  No................  No................     05  SURG..............  Cardiac defibrillator           5.0411          1.8          2.8
                                                                                         implant w/o cardiac cath
                                                                                         w/o MCC.
228................  Yes...............  No................     05  SURG..............  Other cardiothoracic            6.7400         12.0         14.6
                                                                                         procedures w MCC.
229................  Yes...............  No................     05  SURG..............  Other cardiothoracic            5.3191          7.9          9.0
                                                                                         procedures w CC.
230................  Yes...............  No................     05  SURG..............  Other cardiothoracic            4.7847          5.6          6.6
                                                                                         procedures w/o CC/MCC.
231................  No................  No................     05  SURG..............  Coronary bypass w PTCA w        7.2993         10.8         13.2
                                                                                         MCC.
232................  No................  No................     05  SURG..............  Coronary bypass w PTCA w/       6.1947          8.0          9.0
                                                                                         o MCC.
233................  Yes...............  No................     05  SURG..............  Coronary bypass w cardiac       6.4496         12.4         14.3
                                                                                         cath w MCC.
234................  Yes...............  No................     05  SURG..............  Coronary bypass w cardiac       4.9216          8.2          8.9
                                                                                         cath w/o MCC.
235................  Yes...............  No................     05  SURG..............  Coronary bypass w/o             5.1381          9.7         11.5
                                                                                         cardiac cath w MCC.
236................  Yes...............  No................     05  SURG..............  Coronary bypass w/o             3.7307          6.1          6.6
                                                                                         cardiac cath w/o MCC.
237................  No................  No................     05  SURG..............  Major cardiovasc                4.4954          7.8         11.2
                                                                                         procedures w MCC or
                                                                                         thoracic aortic anuerysm
                                                                                         repair.
238................  No................  No................     05  SURG..............  Major cardiovasc                3.1891          3.4          4.9
                                                                                         procedures w/o MCC.
239................  Yes...............  No................     05  SURG..............  Amputation for circ sys         3.9454         12.1         15.6
                                                                                         disorders exc upper limb
                                                                                         & toe w MCC.
240................  Yes...............  No................     05  SURG..............  Amputation for circ sys         2.9983          8.4         10.5
                                                                                         disorders exc upper limb
                                                                                         & toe w CC.
241................  Yes...............  No................     05  SURG..............  Amputation for circ sys         2.4709          5.7          6.9
                                                                                         disorders exc upper limb
                                                                                         & toe w/o CC/MCC.

[[Page 47544]]

 
242................  Yes...............  No................     05  SURG..............  Permanent cardiac               3.2586          6.9          8.9
                                                                                         pacemaker implant w MCC.
243................  Yes...............  No................     05  SURG..............  Permanent cardiac               2.5483          3.8          5.1
                                                                                         pacemaker implant w CC.
244................  Yes...............  No................     05  SURG..............  Permanent cardiac               2.1367          2.2          2.9
                                                                                         pacemaker implant w/o CC/
                                                                                         MCC.
245................  No................  No................     05  SURG..............  AICD lead & generator           3.1073          2.1          3.3
                                                                                         procedures.
246................  No................  No................     05  SURG..............  Perc cardiovasc proc w          2.9046          3.7          5.5
                                                                                         drug-eluting stent w MCC
                                                                                         or 4+ vessels/stents.
247................  No................  No................     05  SURG..............  Perc cardiovasc proc w          2.1255          1.7          2.2
                                                                                         drug-eluting stent w/o
                                                                                         MCC.
248................  No................  No................     05  SURG..............  Perc cardiovasc proc w          2.5180          4.3          6.2
                                                                                         non-drug-eluting stent w
                                                                                         MCC or 4+ ves/stents.
249................  No................  No................     05  SURG..............  Perc cardiovasc proc w          1.8124          1.9          2.5
                                                                                         non-drug-eluting stent w/
                                                                                         o MCC.
250................  No................  No................     05  SURG..............  Perc cardiovasc proc w/o        2.4870          5.3          7.5
                                                                                         coronary artery stent or
                                                                                         AMI w MCC.
251................  No................  No................     05  SURG..............  Perc cardiovasc proc w/o        1.7480          2.1          3.0
                                                                                         coronary artery stent or
                                                                                         AMI w/o MCC.
252................  No................  No................     05  SURG..............  Other vascular procedures       2.7564          5.6          8.8
                                                                                         w MCC.
253................  No................  No................     05  SURG..............  Other vascular procedures       2.2536          4.1          6.0
                                                                                         w CC.
254................  No................  No................     05  SURG..............  Other vascular procedures       1.6786          2.0          2.8
                                                                                         w/o CC/MCC.
255................  Yes...............  No................     05  SURG..............  Upper limb & toe                2.1486          7.3          9.9
                                                                                         amputation for circ
                                                                                         system disorders w MCC.
256................  Yes...............  No................     05  SURG..............  Upper limb & toe                1.6847          5.8          7.5
                                                                                         amputation for circ
                                                                                         system disorders w CC.
257................  Yes...............  No................     05  SURG..............  Upper limb & toe                1.3990          3.7          4.9
                                                                                         amputation for circ
                                                                                         system disorders w/o CC/
                                                                                         MCC.
258................  No................  No................     05  SURG..............  Cardiac pacemaker device        2.2926          5.5          7.6
                                                                                         replacement w MCC.
259................  No................  No................     05  SURG..............  Cardiac pacemaker device        1.6553          1.9          2.6
                                                                                         replacement w/o MCC.
260................  No................  No................     05  SURG..............  Cardiac pacemaker               2.1625          7.2         10.2
                                                                                         revision except device
                                                                                         replacement w MCC.
261................  No................  No................     05  SURG..............  Cardiac pacemaker               1.3212          2.8          3.9
                                                                                         revision except device
                                                                                         replacement w CC.
262................  No................  No................     05  SURG..............  Cardiac pacemaker               1.1245          1.9          2.5
                                                                                         revision except device
                                                                                         replacement w/o CC/MCC.
263................  No................  No................     05  SURG..............  Vein ligation & stripping       1.4977          3.5          5.5
264................  Yes...............  No................     05  SURG..............  Other circulatory system        2.4840          5.9          9.0
                                                                                         O.R. procedures.
280................  Yes...............  No................     05  MED...............  Acute myocardial                1.7391          5.9          7.5
                                                                                         infarction, discharged
                                                                                         alive w MCC.
281................  Yes...............  No................     05  MED...............  Acute myocardial                1.3126          4.0          4.9
                                                                                         infarction, discharged
                                                                                         alive w CC.
282................  Yes...............  No................     05  MED...............  Acute myocardia                 1.0617          2.6          3.2
                                                                                         infarction, discharged
                                                                                         alive w/o CC/MCC.
283................  No................  No................     05  MED...............  Acute myocardial                1.5787          3.4          5.5
                                                                                         infarction, expired w
                                                                                         MCC.
284................  No................  No................     05  MED...............  Acute myocardial                1.2074          2.3          3.5
                                                                                         infarction, expired w CC.
285................  No................  No................     05  MED...............  Acute myocardial                1.0421          1.6          2.2
                                                                                         infarction, expired w/o
                                                                                         CC/MCC.
286................  No................  No................     05  MED...............  Circulatory disorders           1.6667          5.2          7.1
                                                                                         except AMI, w card cath
                                                                                         w MCC.
287................  No................  No................     05  MED...............  Circulatory disorders           1.1412          2.5          3.2
                                                                                         except AMI, w card cath
                                                                                         w/o MCC.
288................  Yes...............  No................     05  MED...............  Acute & subacute                2.9143          9.6         12.2
                                                                                         endocarditis w MCC.
289................  Yes...............  No................     05  MED...............  Acute & subacute                2.3075          7.1          8.7
                                                                                         endocarditis w CC.
290................  Yes...............  No................     05  MED...............  Acute & subacute                1.9733          5.2          6.6
                                                                                         endocarditis w/o CC/MCC.
291................  Yes...............  No................     05  MED...............  Heart failure & shock w         1.2585          5.1          6.6
                                                                                         MCC.
292................  Yes...............  No................     05  MED...............  Heart failure & shock w         1.0134          4.1          5.0
                                                                                         CC.
293................  Yes...............  No................     05  MED...............  Heart failure & shock w/o       0.8765          3.1          3.7
                                                                                         CC/MCC.

[[Page 47545]]

 
294................  No................  No................     05  MED...............  Deep vein                       0.8665          4.6          5.5
                                                                                         thrombophlebitis w CC/
                                                                                         MCC.
295................  No................  No................     05  MED...............  Deep vein                       0.6950          3.8          4.4
                                                                                         thrombophlebitis w/o CC/
                                                                                         MCC.
296................  No................  No................     05  MED...............  Cardiac arrest,                 1.1144          2.0          3.3
                                                                                         unexplained w MCC.
297................  No................  No................     05  MED...............  Cardiac arrest,                 0.8490          1.5          1.9
                                                                                         unexplained w CC.
298................  No................  No................     05  MED...............  Cardiac arrest,                 0.7207          1.2          1.4
                                                                                         unexplained w/o CC/MCC.
299................  Yes...............  No................     05  MED...............  Peripheral vascular             1.2220          5.2          6.9
                                                                                         disorders w MCC.
300................  Yes...............  No................     05  MED...............  Peripheral vascular             0.9451          4.1          5.1
                                                                                         disorders w CC.
301................  Yes...............  No................     05  MED...............  Peripheral vascular             0.7183          3.1          3.8
                                                                                         disorders w/o CC/MCC.
302................  No................  No................     05  MED...............  Atherosclerosis w MCC....       0.8236          3.3          4.4
303................  No................  No................     05  MED...............  Atherosclerosis w/o MCC..       0.6055          2.1          2.6
304................  No................  No................     05  MED...............  Hypertension w MCC.......       0.8312          3.9          5.2
305................  No................  No................     05  MED...............  Hypertension w/o MCC.....       0.5942          2.3          2.9
306................  No................  No................     05  MED...............  Cardiac congenital &            1.2007          4.5          6.5
                                                                                         valvular disorders w MCC.
307................  No................  No................     05  MED...............  Cardiac congenital &            0.8224          2.7          3.5
                                                                                         valvular disorders w/o
                                                                                         MCC.
308................  No................  No................     05  MED...............  Cardiac arrhythmia &            1.0841          4.3          5.8
                                                                                         conduction disorders w
                                                                                         MCC.
309................  No................  No................     05  MED...............  Cardiac arrhythmia &            0.8233          3.1          3.9
                                                                                         conduction disorders w
                                                                                         CC.
310................  No................  No................     05  MED...............  Cardiac arrhythmia &            0.6439          2.3          2.8
                                                                                         conduction disorders w/o
                                                                                         CC/MCC.
311................  No................  No................     05  MED...............  Angina pectoris..........       0.5118          1.9          2.3
312................  No................  No................     05  MED...............  Syncope & collapse.......       0.7197          2.5          3.2
313................  No................  No................     05  MED...............  Chest pain...............       0.5489          1.7          2.1
314................  Yes...............  No................     05  MED...............  Other circulatory system        1.5606          5.1          7.1
                                                                                         diagnoses w MCC.
315................  Yes...............  No................     05  MED...............  Other circulatory system        1.1720          3.5          4.6
                                                                                         diagnoses w CC.
316................  Yes...............  No................     05  MED...............  Other circulatory system        0.9075          2.4          3.0
                                                                                         diagnoses w/o CC/MCC.
326................  Yes...............  No................     06  SURG..............  Stomach, esophageal &           5.1660         13.4         17.2
                                                                                         duodenal proc w MCC.
327................  Yes...............  No................     06  SURG..............  Stomach, esophageal &           3.2941          8.1         10.3
                                                                                         duodenal proc w CC.
328................  Yes...............  No................     06  SURG..............  Stomach, esophageal &           1.8017          3.3          4.4
                                                                                         duodenal proc w/o CC/MCC.
329................  Yes...............  No................     06  SURG..............  Major small & large bowel       4.5059         12.8         15.9
                                                                                         procedures w MCC.
330................  Yes...............  No................     06  SURG..............  Major small & large bowel       2.8935          8.4          9.8
                                                                                         procedures w CC.
331................  Yes...............  No................     06  SURG..............  Major small & large bowel       1.8415          5.4          6.0
                                                                                         procedures w/o CC/MCC.
332................  Yes...............  No................     06  SURG..............  Rectal resection w MCC...       3.7139         12.2         14.7
333................  Yes...............  No................     06  SURG..............  Rectal resection w CC....       2.5787          7.8          8.9
334................  Yes...............  No................     06  SURG..............  Rectal resection w/o CC/        1.7856          4.9          5.6
                                                                                         MCC.
335................  Yes...............  No................     06  SURG..............  Peritoneal adhesiolysis w       3.4785         11.8         14.4
                                                                                         MCC.
336................  Yes...............  No................     06  SURG..............  Peritoneal adhesiolysis w       2.4776          7.7          9.3
                                                                                         CC.
337................  Yes...............  No................     06  SURG..............  Peritoneal adhesiolysis w/      1.6984          4.4          5.7
                                                                                         o CC/MCC.
338................  No................  No................     06  SURG..............  Appendectomy w                  2.7254          9.1         10.9
                                                                                         complicated principal
                                                                                         diag w MCC.
339................  No................  No................     06  SURG..............  Appendectomy w                  1.9805          6.1          7.1
                                                                                         complicated principal
                                                                                         diag w CC.
340................  No................  No................     06  SURG..............  Appendectomy w                  1.3849          3.6          4.3
                                                                                         complicated principal
                                                                                         diag w/o CC/MCC.
341................  No................  No................     06  SURG..............  Appendectomy w/o                1.8824          5.3          7.3
                                                                                         complicated principal
                                                                                         diag w MCC.
342................  No................  No................     06  SURG..............  Appendectomy w/o                1.3562          3.4          4.3
                                                                                         complicated principal
                                                                                         diag w CC.
343................  No................  No................     06  SURG..............  Appendectomy w/o                0.9887          1.9          2.3
                                                                                         complicated principal
                                                                                         diag w/o CC/MCC.
344................  No................  No................     06  SURG..............  Minor small & large bowel       2.5156          9.4         12.0
                                                                                         procedures w MCC.

[[Page 47546]]

 
345................  No................  No................     06  SURG..............  Minor small & large bowel       1.7028          6.2          7.2
                                                                                         procedures w CC.
346................  No................  No................     06  SURG..............  Minor small & large bowel       1.2617          4.4          5.0
                                                                                         procedures w/o CC/MCC.
347................  No................  No................     06  SURG..............  Anal & stomal procedures        1.7658          6.2          8.4
                                                                                         w MCC.
348................  No................  No................     06  SURG..............  Anal & stomal procedures        1.2781          4.1          5.5
                                                                                         w CC.
349................  No................  No................     06  SURG..............  Anal & stomal procedures        0.8629          2.4          3.0
                                                                                         w/o CC/MCC.
350................  No................  No................     06  SURG..............  Inguinal & femoral hernia       1.8330          5.9          8.1
                                                                                         procedures w MCC.
351................  No................  No................     06  SURG..............  Inguinal & femoral hernia       1.2449          3.4          4.5
                                                                                         procedures w CC.
352................  No................  No................     06  SURG..............  Inguinal & femoral hernia       0.8967          1.9          2.4
                                                                                         procedures w/o CC/MCC.
353................  No................  No................     06  SURG..............  Hernia procedures except        2.0241          6.6          8.8
                                                                                         inguinal & femoral w MCC.
354................  No................  No................     06  SURG..............  Hernia procedures except        1.4092          4.0          5.1
                                                                                         inguinal & femoral w CC.
355................  No................  No................     06  SURG..............  Hernia procedures except        1.0147          2.3          2.9
                                                                                         inguinal & femoral w/o
                                                                                         CC/MCC.
356................  Yes...............  No................     06  SURG..............  Other digestive system          3.3790          9.6         13.3
                                                                                         O.R. procedures w MCC.
357................  Yes...............  No................     06  SURG..............  Other digestive system          2.4946          6.1          8.0
                                                                                         O.R. procedures w CC.
358................  Yes...............  No................     06  SURG..............  Other digestive system          1.7333          3.4          4.6
                                                                                         O.R. procedures w/o CC/
                                                                                         MCC.
368................  No................  No................     06  MED...............  Major esophageal                1.3788          5.1          6.6
                                                                                         disorders w MCC.
369................  No................  No................     06  MED...............  Major esophageal                1.0839          3.7          4.6
                                                                                         disorders w CC.
370................  No................  No................     06  MED...............  Major esophageal                0.9558          2.8          3.4
                                                                                         disorders w/o CC/MCC.
371................  Yes...............  No................     06  MED...............  Major gastrointestinal          1.6263          6.6          8.8
                                                                                         disorders & peritoneal
                                                                                         infections w MCC.
372................  Yes...............  No................     06  MED...............  Major gastrointestinal          1.3059          5.5          6.8
                                                                                         disorders & peritoneal
                                                                                         infections w CC.
373................  Yes...............  No................     06  MED...............  Major gastrointestinal          1.1109          4.2          5.0
                                                                                         disorders & peritoneal
                                                                                         infections w/o CC/MCC.
374................  Yes...............  No................     06  MED...............  Digestive malignancy w          1.7229          6.5          8.8
                                                                                         MCC.
375................  Yes...............  No................     06  MED...............  Digestive malignancy w CC       1.3337          4.6          6.0
376................  Yes...............  No................     06  MED...............  Digestive malignancy w/o        1.0268          3.1          4.1
                                                                                         CC/MCC.
377................  Yes...............  No................     06  MED...............  G.I. hemorrhage w MCC....       1.3367          5.0          6.5
378................  Yes...............  No................     06  MED...............  G.I. hemorrhage w CC.....       1.0195          3.7          4.5
379................  Yes...............  No................     06  MED...............  G.I. hemorrhage w/o CC/         0.8476          2.9          3.4
                                                                                         MCC.
380................  Yes...............  No................     06  MED...............  Complicated peptic ulcer        1.4334          5.5          7.2
                                                                                         w MCC.
381................  Yes...............  No................     06  MED...............  Complicated peptic ulcer        1.1302          4.2          5.1
                                                                                         w CC.
382................  Yes...............  No................     06  MED...............  Complicated peptic ulcer        0.9662          3.0          3.6
                                                                                         w/o CC/MCC.
383................  No................  No................     06  MED...............  Uncomplicated peptic            1.1024          4.6          5.9
                                                                                         ulcer w MCC.
384................  No................  No................     06  MED...............  Uncomplicated peptic            0.8399          3.2          3.8
                                                                                         ulcer w/o MCC.
385................  No................  No................     06  MED...............  Inflammatory bowel              1.4936          6.7          9.0
                                                                                         disease w MCC.
386................  No................  No................     06  MED...............  Inflammatory bowel              1.0766          4.6          5.7
                                                                                         disease w CC.
387................  No................  No................     06  MED...............  Inflammatory bowel              0.9488          3.6          4.4
                                                                                         disease w/o CC/MCC.
388................  Yes...............  No................     06  MED...............  G.I. obstruction w MCC...       1.2860          5.5          7.4
389................  Yes...............  No................     06  MED...............  G.I. obstruction w CC....       0.9533          4.0          5.0
390................  Yes...............  No................     06  MED...............  G.I. obstruction w/o CC/        0.7260          3.0          3.6
                                                                                         MCC.
391................  No................  No................     06  MED...............  Esophagitis, gastroent &        0.9565          4.1          5.5
                                                                                         misc digest disorders w
                                                                                         MCC.
392................  No................  No................     06  MED...............  Esophagitis, gastroent &        0.7121          2.8          3.5
                                                                                         misc digest disorders w/
                                                                                         o MCC.
393................  No................  No................     06  MED...............  Other digestive system          1.3237          5.0          7.0
                                                                                         diagnoses w MCC.
394................  No................  No................     06  MED...............  Other digestive system          1.0257          3.8          4.9
                                                                                         diagnoses w CC.
395................  No................  No................     06  MED...............  Other digestive system          0.7874          2.7          3.4
                                                                                         diagnoses w/o CC/MCC.
405................  Yes...............  No................     07  SURG..............  Pancreas, liver & shunt         4.8273         12.8         17.3
                                                                                         procedures w MCC.
406................  Yes...............  No................     07  SURG..............  Pancreas, liver & shunt         3.3149          7.1          9.5
                                                                                         procedures w CC.

[[Page 47547]]

 
407................  Yes...............  No................     07  SURG..............  Pancreas, liver & shunt         2.2443          4.2          5.5
                                                                                         procedures w/o CC/MCC.
408................  No................  No................     07  SURG..............  Biliary tract proc except       3.8540         12.2         15.1
                                                                                         only cholecyst w or w/o
                                                                                         c.d.e. w MCC.
409................  No................  No................     07  SURG..............  Biliary tract proc except       2.9126          8.2          9.9
                                                                                         only cholecyst w or w/o
                                                                                         c.d.e. w CC.
410................  No................  No................     07  SURG..............  Biliary tract proc except       2.0794          5.7          6.8
                                                                                         only cholecyst w or w/o
                                                                                         c.d.e. w/o CC/MCC.
411................  No................  No................     07  SURG..............  Cholecystectomy w c.d.e.        3.4128         10.9         13.1
                                                                                         w MCC.
412................  No................  No................     07  SURG..............  Cholecystectomy w c.d.e.        2.6382          7.6          8.8
                                                                                         w CC.
413................  No................  No................     07  SURG..............  Cholecystectomy w c.d.e.        1.9412          5.2          6.0
                                                                                         w/o CC/MCC.
414................  Yes...............  No................     07  SURG..............  Cholecystectomy except by       3.0942          9.7         11.9
                                                                                         laparoscope w/o c.d.e. w
                                                                                         MCC.
415................  Yes...............  No................     07  SURG..............  Cholecystectomy except by       2.2749          6.6          7.7
                                                                                         laparoscope w/o c.d.e. w
                                                                                         CC.
416................  Yes...............  No................     07  SURG..............  Cholecystectomy except by       1.5398          4.1          4.9
                                                                                         laparoscope w/o c.d.e. w/
                                                                                         o CC/MCC.
417................  No................  No................     07  SURG..............  Laparoscopic                    2.1361          6.6          8.4
                                                                                         cholecystectomy w/o
                                                                                         c.d.e. w MCC.
418................  No................  No................     07  SURG..............  Laparoscopic                    1.7104          4.5          5.6
                                                                                         cholecystectomy w/o
                                                                                         c.d.e. w CC.
419................  No................  No................     07  SURG..............  Laparoscopic                    1.2400          2.5          3.2
                                                                                         cholecystectomy w/o
                                                                                         c.d.e. w/o CC/MCC.
420................  No................  No................     07  SURG..............  Hepatobiliary diagnostic        3.4851         10.1         14.2
                                                                                         procedures w MCC.
421................  No................  No................     07  SURG..............  Hepatobiliary diagnostic        2.2557          5.6          7.8
                                                                                         procedures w CC.
422................  No................  No................     07  SURG..............  Hepatobiliary diagnostic        1.9432          3.4          4.5
                                                                                         procedures w/o CC/MCC.
423................  No................  No................     07  SURG..............  Other hepatobiliary or          3.9593         11.4         15.5
                                                                                         pancreas O.R. procedures
                                                                                         w MCC.
424................  No................  No................     07  SURG..............  Other hepatobiliary or          3.0104          7.8         10.2
                                                                                         pancreas O.R. procedures
                                                                                         w CC.
425................  No................  No................     07  SURG..............  Other hepatobiliary or          2.5812          4.5          5.6
                                                                                         pancreas O.R. procedures
                                                                                         w/o CC/MCC.
432................  No................  No................     07  MED...............  Cirrhosis & alcoholic           1.5033          5.1          6.9
                                                                                         hepatitis w MCC.
433................  No................  No................     07  MED...............  Cirrhosis & alcoholic           1.1431          3.8          4.9
                                                                                         hepatitis w CC.
434................  No................  No................     07  MED...............  Cirrhosis & alcoholic           1.0125          2.8          3.6
                                                                                         hepatitis w/o CC/MCC.
435................  No................  No................     07  MED...............  Malignancy of                   1.5661          5.8          7.7
                                                                                         hepatobiliary system or
                                                                                         pancreas w MCC.
436................  No................  No................     07  MED...............  Malignancy of                   1.2906          4.5          5.9
                                                                                         hepatobiliary system or
                                                                                         pancreas w CC.
437................  No................  No................     07  MED...............  Malignancy of                   1.1709          3.3          4.4
                                                                                         hepatobiliary system or
                                                                                         pancreas w/o CC/MCC.
438................  No................  No................     07  MED...............  Disorders of pancreas           1.4201          5.6          7.7
                                                                                         except malignancy w MCC.
439................  No................  No................     07  MED...............  Disorders of pancreas           1.0609          4.3          5.4
                                                                                         except malignancy w CC.
440................  No................  No................     07  MED...............  Disorders of pancreas           0.8912          3.2          3.9
                                                                                         except malignancy w/o CC/
                                                                                         MCC.
441................  Yes...............  No................     07  MED...............  Disorders of liver except       1.3973          5.1          7.0
                                                                                         malig,cirr,alc hepa w
                                                                                         MCC.
442................  Yes...............  No................     07  MED...............  Disorders of liver except       1.0935          4.0          5.1
                                                                                         malig,cirr,alc hepa w CC.
443................  Yes...............  No................     07  MED...............  Disorders of liver except       0.9079          3.1          3.8
                                                                                         malig,cirr,alc hepa w/o
                                                                                         CC/MCC.
444................  No................  No................     07  MED...............  Disorders of the biliary        1.3744          5.0          6.6
                                                                                         tract w MCC.
445................  No................  No................     07  MED...............  Disorders of the biliary        1.1030          3.8          4.8
                                                                                         tract w CC.
446................  No................  No................     07  MED...............  Disorders of the biliary        0.8521          2.6          3.3
                                                                                         tract w/o CC/MCC.
453................  No................  No................     08  SURG..............  Combined anterior/              8.4313         12.7         15.9
                                                                                         posterior spinal fusion
                                                                                         w MCC.
454................  No................  No................     08  SURG..............  Combined anterior/              6.5810          6.8          8.4
                                                                                         posterior spinal fusion
                                                                                         w CC.

[[Page 47548]]

 
455................  No................  No................     08  SURG..............  Combined anterior/              5.7023          4.1          4.7
                                                                                         posterior spinal fusion
                                                                                         w/o CC/MCC.
456................  No................  No................     08  SURG..............  Spinal fus exc cerv w           6.7669         12.1         15.9
                                                                                         spinal curv/malig/infec
                                                                                         or 9+ fus w MCC.
457................  No................  No................     08  SURG..............  Spinal fus exc cerv w           5.4650          6.4          7.8
                                                                                         spinal curv/malig/infec
                                                                                         or 9+ fus w CC.
458................  No................  No................     08  SURG..............  Spinal fus exc cerv w           4.9437          4.1          4.6
                                                                                         spinal curv/malig/infec
                                                                                         or 9+ fus w/o CC/MCC.
459................  Yes...............  No................     08  SURG..............  Spinal fusion except            4.8679          7.8          9.6
                                                                                         cervical w MCC.
460................  Yes...............  No................     08  SURG..............  Spinal fusion except            3.4870          3.8          4.3
                                                                                         cervical w/o MCC.
461................  No................  No................     08  SURG..............  Bilateral or multiple           3.8345          6.9          8.5
                                                                                         major joint procs of
                                                                                         lower extremity w MCC.
462................  No................  No................     08  SURG..............  Bilateral or multiple           3.0993          3.9          4.3
                                                                                         major joint procs of
                                                                                         lower extremity w/o MCC.
463................  Yes...............  No................     08  SURG..............  Wnd debrid & skn grft exc       3.9615         12.3         16.9
                                                                                         hand, for musculo-conn
                                                                                         tiss dis w MCC.
464................  Yes...............  No................     08  SURG..............  Wnd debrid & skn grft exc       2.8821          7.8         10.4
                                                                                         hand, for musculo-conn
                                                                                         tiss dis w CC.
465................  Yes...............  No................     08  SURG..............  Wnd debrid & skn grft exc       2.3417          4.6          6.2
                                                                                         hand, for musculo-conn
                                                                                         tiss dis w/o CC/MCC.
466................  Yes...............  No................     08  SURG..............  Revision of hip or knee         3.5408          7.6          9.5
                                                                                         replacement w MCC.
467................  Yes...............  No................     08  SURG..............  Revision of hip or knee         2.7523          4.8          5.6
                                                                                         replacement w CC.
468................  Yes...............  No................     08  SURG..............  Revision of hip or knee         2.4545          3.7          4.0
                                                                                         replacement w/o CC/MCC.
469................  Yes...............  No................     08  SURG..............  Major joint replacement         2.6664          7.1          8.4
                                                                                         or reattachment of lower
                                                                                         extremity w MCC.
470................  Yes...............  No................     08  SURG..............  Major joint replacement         1.9871          3.7          4.0
                                                                                         or reattachment of lower
                                                                                         extremity w/o MCC.
471................  No................  No................     08  SURG..............  Cervical spinal fusion w        3.4723          7.0         10.1
                                                                                         MCC.
472................  No................  No................     08  SURG..............  Cervical spinal fusion w        2.4819          2.9          4.3
                                                                                         CC.
473................  No................  No................     08  SURG..............  Cervical spinal fusion w/       1.9446          1.6          2.0
                                                                                         o CC/MCC.
474................  Yes...............  No................     08  SURG..............  Amputation for                  2.8432          9.5         12.5
                                                                                         musculoskeletal sys &
                                                                                         conn tissue dis w MCC.
475................  Yes...............  No................     08  SURG..............  Amputation for                  2.1308          6.6          8.6
                                                                                         musculoskeletal sys &
                                                                                         conn tissue dis w CC.
476................  Yes...............  No................     08  SURG..............  Amputation for                  1.6799          3.8          5.0
                                                                                         musculoskeletal sys &
                                                                                         conn tissue dis w/o CC/
                                                                                         MCC.
477................  Yes...............  Yes...............     08  SURG..............  Biopsies of                     2.6555          9.6         12.5
                                                                                         musculoskeletal system &
                                                                                         connective tissue w MCC.
478................  Yes...............  Yes...............     08  SURG..............  Biopsies of                     1.9836          4.8          6.8
                                                                                         musculoskeletal system &
                                                                                         connective tissue w CC.
479................  Yes...............  Yes...............     08  SURG..............  Biopsies of                     1.6784          1.9          2.8
                                                                                         musculoskeletal system &
                                                                                         connective tissue w/o CC/
                                                                                         MCC.
480................  Yes...............  Yes...............     08  SURG..............  Hip & femur procedures          2.4027          8.0          9.5
                                                                                         except major joint w MCC.
481................  Yes...............  Yes...............     08  SURG..............  Hip & femur procedures          1.8485          5.4          6.0
                                                                                         except major joint w CC.
482................  Yes...............  Yes...............     08  SURG..............  Hip & femur procedures          1.5644          4.5          4.9
                                                                                         except major joint w/o
                                                                                         CC/MCC.
483................  Yes...............  No................     08  SURG..............  Major joint & limb              1.9905          3.5          4.4
                                                                                         reattachment proc of
                                                                                         upper extremity w CC/MCC.
484................  Yes...............  No................     08  SURG..............  Major joint & limb              1.7376          2.2          2.5
                                                                                         reattachment proc of
                                                                                         upper extremity w/o CC/
                                                                                         MCC.
485................  No................  No................     08  SURG..............  Knee procedures w pdx of        2.9362         10.2         12.4
                                                                                         infection w MCC.
486................  No................  No................     08  SURG..............  Knee procedures w pdx of        2.3382          6.8          8.1
                                                                                         infection w CC.
487................  No................  No................     08  SURG..............  Knee procedures w pdx of        1.7771          5.0          5.8
                                                                                         infection w/o CC/MCC.
488................  Yes...............  No................     08  SURG..............  Knee procedures w/o pdx         1.6584          4.1          5.1
                                                                                         of infection w CC/MCC.
489................  Yes...............  No................     08  SURG..............  Knee procedures w/o pdx         1.4512          2.7          3.1
                                                                                         of infection w/o CC/MCC.
490................  No................  No................     08  SURG..............  Back & neck proc exc            1.4912          3.3          4.7
                                                                                         spinal fusion w CC/MCC
                                                                                         or disc device/neurostim.

[[Page 47549]]

 
491................  No................  No................     08  SURG..............  Back & neck proc exc            1.0066          1.8          2.3
                                                                                         spinal fusion w/o CC/MCC.
492................  Yes...............  Yes...............     08  SURG..............  Lower extrem & humer proc       2.2413          6.9          8.7
                                                                                         except hip,foot,femur w
                                                                                         MCC.
493................  Yes...............  Yes...............     08  SURG..............  Lower extrem & humer proc       1.7186          4.4          5.3
                                                                                         except hip,foot,femur w
                                                                                         CC.
494................  Yes...............  Yes...............     08  SURG..............  Lower extrem & humer proc       1.2752          2.8          3.4
                                                                                         except hip,foot,femur w/
                                                                                         o CC/MCC.
495................  Yes...............  No................     08  SURG..............  Local excision & removal        2.5765          8.3         11.1
                                                                                         int fix devices exc hip
                                                                                         & femur w MCC.
496................  Yes...............  No................     08  SURG..............  Local excision & removal        1.7792          4.6          6.0
                                                                                         int fix devices exc hip
                                                                                         & femur w CC.
497................  Yes...............  No................     08  SURG..............  Local excision & removal        1.2301          2.3          3.1
                                                                                         int fix devices exc hip
                                                                                         & femur w/o CC/MCC.
498................  No................  No................     08  SURG..............  Local excision & removal        1.7563          5.8          8.2
                                                                                         int fix devices of hip &
                                                                                         femur w CC/MCC.
499................  No................  No................     08  SURG..............  Local excision & removal        1.1887          2.3          3.1
                                                                                         int fix devices of hip &
                                                                                         femur w/o CC/MCC.
500................  Yes...............  Yes...............     08  SURG..............  Soft tissue procedures w        2.4096          8.1         11.3
                                                                                         MCC.
501................  Yes...............  Yes...............     08  SURG..............  Soft tissue procedures w        1.5598          4.4          5.9
                                                                                         CC.
502................  Yes...............  Yes...............     08  SURG..............  Soft tissue procedures w/       1.0342          2.3          2.9
                                                                                         o CC/MCC.
503................  No................  No................     08  SURG..............  Foot procedures w MCC....       1.7538          6.9          8.9
504................  No................  No................     08  SURG..............  Foot procedures w CC.....       1.4058          5.0          6.4
505................  No................  No................     08  SURG..............  Foot procedures w/o CC/         1.1584          2.6          3.4
                                                                                         MCC.
506................  No................  No................     08  SURG..............  Major thumb or joint            1.0877          2.3          3.2
                                                                                         procedures.
507................  No................  No................     08  SURG..............  Major shoulder or elbow         1.4296          3.6          5.2
                                                                                         joint procedures w CC/
                                                                                         MCC.
508................  No................  No................     08  SURG..............  Major shoulder or elbow         1.1330          1.7          2.0
                                                                                         joint procedures w/o CC/
                                                                                         MCC.
509................  No................  No................     08  SURG..............  Arthroscopy..............       1.0769          1.9          2.8
510................  Yes...............  No................     08  SURG..............  Shoulder,elbow or forearm       1.6616          5.0          6.6
                                                                                         proc,exc major joint
                                                                                         proc w MCC.
511................  Yes...............  No................     08  SURG..............  Shoulder,elbow or forearm       1.2512          3.1          3.9
                                                                                         proc,exc major joint
                                                                                         proc w CC.
512................  Yes...............  No................     08  SURG..............  Shoulder,elbow or forearm       0.9602          1.7          2.1
                                                                                         proc,exc major joint
                                                                                         proc w/o CC/MCC.
513................  No................  No................     08  SURG..............  Hand or wrist proc,             1.1748          3.7          5.1
                                                                                         except major thumb or
                                                                                         joint proc w CC/MCC.
514................  No................  No................     08  SURG..............  Hand or wrist proc,             0.8313          2.0          2.6
                                                                                         except major thumb or
                                                                                         joint proc w/o CC/MCC.
515................  Yes...............  Yes...............     08  SURG..............  Other musculoskelet sys &       2.4858          8.1         10.9
                                                                                         conn tiss O.R. proc w
                                                                                         MCC.
516................  Yes...............  Yes...............     08  SURG..............  Other musculoskelet sys &       1.8307          4.4          6.0
                                                                                         conn tiss O.R. proc w CC.
517................  Yes...............  Yes...............     08  SURG..............  Other musculoskelet sys &       1.4192          2.0          2.9
                                                                                         conn tiss O.R. proc w/o
                                                                                         CC/MCC.
533................  Yes...............  No................     08  MED...............  Fractures of femur w MCC.       1.1294          5.1          6.9
534................  Yes...............  No................     08  MED...............  Fractures of femur w/o          0.7560          3.2          4.0
                                                                                         MCC.
535................  Yes...............  No................     08  MED...............  Fractures of hip & pelvis       1.0836          4.8          6.4
                                                                                         w MCC.
536................  Yes...............  No................     08  MED...............  Fractures of hip & pelvis       0.7340          3.4          4.0
                                                                                         w/o MCC.
537................  No................  No................     08  MED...............  Sprains, strains, &             0.7528          3.8          4.7
                                                                                         dislocations of hip,
                                                                                         pelvis & thigh w CC/MCC.
538................  No................  No................     08  MED...............  Sprains, strains, &             0.5986          2.6          3.1
                                                                                         dislocations of hip,
                                                                                         pelvis & thigh w/o CC/
                                                                                         MCC.
539................  Yes...............  No................     08  MED...............  Osteomyelitis w MCC......       1.7648          7.7         10.2
540................  Yes...............  No................     08  MED...............  Osteomyelitis w CC.......       1.4026          5.8          7.2
541................  Yes...............  No................     08  MED...............  Osteomyelitis w/o CC/MCC.       1.2101          4.4          5.7
542................  Yes...............  No................     08  MED...............  Pathological fractures &        1.4877          6.8          8.7
                                                                                         musculoskelet & conn
                                                                                         tiss malig w MCC.
543................  Yes...............  No................     08  MED...............  Pathological fractures &        1.1151          4.8          6.0
                                                                                         musculoskelet & conn
                                                                                         tiss malig w CC.
544................  Yes...............  No................     08  MED...............  Pathological fractures &        0.9395          3.7          4.5
                                                                                         musculoskelet & conn
                                                                                         tiss malig w/o CC/MCC.
545................  Yes...............  No................     08  MED...............  Connective tissue               1.8330          6.5          9.0
                                                                                         disorders w MCC.
546................  Yes...............  No................     08  MED...............  Connective tissue               1.2092          4.3          5.5
                                                                                         disorders w CC.

[[Page 47550]]

 
547................  Yes...............  No................     08  MED...............  Connective tissue               0.9054          3.2          3.9
                                                                                         disorders w/o CC/MCC.
548................  No................  No................     08  MED...............  Septic arthritis w MCC...       1.5372          7.0          9.3
549................  No................  No................     08  MED...............  Septic arthritis w CC....       1.1522          5.0          6.2
550................  No................  No................     08  MED...............  Septic arthritis w/o CC/        0.9567          3.6          4.5
                                                                                         MCC.
551................  Yes...............  No................     08  MED...............  Medical back problems w         1.1632          5.5          7.2
                                                                                         MCC.
552................  Yes...............  No................     08  MED...............  Medical back problems w/o       0.7839          3.4          4.2
                                                                                         MCC.
553................  No................  No................     08  MED...............  Bone diseases &                 0.9199          4.8          6.1
                                                                                         arthropathies w MCC.
554................  No................  No................     08  MED...............  Bone diseases &                 0.6475          3.0          3.7
                                                                                         arthropathies w/o MCC.
555................  No................  No................     08  MED...............  Signs & symptoms of             0.7886          3.6          4.9
                                                                                         musculoskeletal system &
                                                                                         conn tissue w MCC.
556................  No................  No................     08  MED...............  Signs & symptoms of             0.5958          2.5          3.2
                                                                                         musculoskeletal system &
                                                                                         conn tissue w/o MCC.
557................  Yes...............  No................     08  MED...............  Tendonitis, myositis &          1.2171          5.4          6.9
                                                                                         bursitis w MCC.
558................  Yes...............  No................     08  MED...............  Tendonitis, myositis &          0.8480          3.5          4.3
                                                                                         bursitis w/o MCC.
559................  Yes...............  No................     08  MED...............  Aftercare,                      1.2104          5.1          7.3
                                                                                         musculoskeletal system &
                                                                                         connective tissue w MCC.
560................  Yes...............  No................     08  MED...............  Aftercare,                      0.8521          3.6          4.7
                                                                                         musculoskeletal system &
                                                                                         connective tissue w CC.
561................  Yes...............  No................     08  MED...............  Aftercare,                      0.6753          2.1          2.7
                                                                                         musculoskeletal system &
                                                                                         connective tissue w/o CC/
                                                                                         MCC.
562................  Yes...............  No................     08  MED...............  Fx, sprn, strn & disl           1.1163          5.0          6.5
                                                                                         except femur, hip,
                                                                                         pelvis & thigh w MCC.
563................  Yes...............  No................     08  MED...............  Fx, sprn, strn & disl           0.6981          3.1          3.7
                                                                                         except femur, hip,
                                                                                         pelvis & thigh w/o MCC.
564................  No................  No................     08  MED...............  Other musculoskeletal sys       1.1606          5.3          7.1
                                                                                         & connective tissue
                                                                                         diagnoses w MCC.
565................  No................  No................     08  MED...............  Other musculoskeletal sys       0.9003          4.0          5.1
                                                                                         & connective tissue
                                                                                         diagnoses w CC.
566................  No................  No................     08  MED...............  Other musculoskeletal sys       0.7790          2.9          3.7
                                                                                         & connective tissue
                                                                                         diagnoses w/o CC/MCC.
573................  Yes...............  No................     09  SURG..............  Skin graft &/or debrid          2.7483         10.1         13.8
                                                                                         for skn ulcer or
                                                                                         cellulitis w MCC.
574................  Yes...............  No................     09  SURG..............  Skin graft &/or debrid          2.0177          7.2          9.5
                                                                                         for skn ulcer or
                                                                                         cellulitis w CC.
575................  Yes...............  No................     09  SURG..............  Skin graft &/or debrid          1.4216          4.7          5.9
                                                                                         for skn ulcer or
                                                                                         cellulitis w/o CC/MCC.
576................  No................  No................     09  SURG..............  Skin graft &/or debrid          2.4766          7.8         12.1
                                                                                         exc for skin ulcer or
                                                                                         cellulitis w MCC.
577................  No................  No................     09  SURG..............  Skin graft &/or debrid          1.6262          4.1          6.0
                                                                                         exc for skin ulcer or
                                                                                         cellulitis w CC.
578................  No................  No................     09  SURG..............  Skin graft &/or debrid          1.0742          2.5          3.4
                                                                                         exc for skin ulcer or
                                                                                         cellulitis w/o CC/MCC.
579................  Yes...............  No................     09  SURG..............  Other skin, subcut tiss &       2.3093          8.1         11.1
                                                                                         breast proc w MCC.
580................  Yes...............  No................     09  SURG..............  Other skin, subcut tiss &       1.4256          3.6          5.5
                                                                                         breast proc w CC.
581................  Yes...............  No................     09  SURG..............  Other skin, subcut tiss &       0.9124          1.9          2.6
                                                                                         breast proc w/o CC/MCC.
582................  No................  No................     09  SURG..............  Mastectomy for malignancy       0.9432          2.1          2.9
                                                                                         w CC/MCC.
583................  No................  No................     09  SURG..............  Mastectomy for malignancy       0.7523          1.6          1.8
                                                                                         w/o CC/MCC.
584................  No................  No................     09  SURG..............  Breast biopsy, local            1.2484          3.7          5.7
                                                                                         excision & other breast
                                                                                         procedures w CC/MCC.
585................  No................  No................     09  SURG..............  Breast biopsy, local            0.9066          1.7          2.2
                                                                                         excision & other breast
                                                                                         procedures w/o CC/MCC.
592................  Yes...............  No................     09  MED...............  Skin ulcers w MCC........       1.4555          6.6          8.9
593................  Yes...............  No................     09  MED...............  Skin ulcers w CC.........       1.1060          5.2          6.5
594................  Yes...............  No................     09  MED...............  Skin ulcers w/o CC/MCC...       0.9335          3.9          4.9
595................  No................  No................     09  MED...............  Major skin disorders w          1.3997          6.0          8.2
                                                                                         MCC.
596................  No................  No................     09  MED...............  Major skin disorders w/o        0.8766          3.8          4.8
                                                                                         MCC.
597................  No................  No................     09  MED...............  Malignant breast                1.4034          5.9          8.2
                                                                                         disorders w MCC.
598................  No................  No................     09  MED...............  Malignant breast                1.0695          4.2          5.6
                                                                                         disorders w CC.

[[Page 47551]]

 
599................  No................  No................     09  MED...............  Malignant breast                0.7232          2.6          3.6
                                                                                         disorders w/o CC/MCC.
600................  No................  No................     09  MED...............  Non-malignant breast            0.8471          4.1          5.4
                                                                                         disorders w CC/MCC.
601................  No................  No................     09  MED...............  Non-malignant breast            0.6715          3.1          3.8
                                                                                         disorders w/o CC/MCC.
602................  Yes...............  No................     09  MED...............  Cellulitis w MCC.........       1.1522          5.5          7.0
603................  Yes...............  No................     09  MED...............  Cellulitis w/o MCC.......       0.8087          3.9          4.7
604................  No................  No................     09  MED...............  Trauma to the skin,             0.9681          4.1          5.4
                                                                                         subcut tiss & breast w
                                                                                         MCC.
605................  No................  No................     09  MED...............  Trauma to the skin,             0.6863          2.8          3.5
                                                                                         subcut tiss & breast w/o
                                                                                         MCC.
606................  No................  No................     09  MED...............  Minor skin disorders w          0.9223          4.2          5.9
                                                                                         MCC.
607................  No................  No................     09  MED...............  Minor skin disorders w/o        0.6505          2.9          3.8
                                                                                         MCC.
614................  No................  No................     10  SURG..............  Adrenal & pituitary             2.1978          5.2          7.3
                                                                                         procedures w CC/MCC.
615................  No................  No................     10  SURG..............  Adrenal & pituitary             1.6502          2.8          3.4
                                                                                         procedures w/o CC/MCC.
616................  Yes...............  No................     10  SURG..............  Amputat of lower limb for       3.1449         12.6         15.6
                                                                                         endocrine,nutrit,&
                                                                                         metabol dis w MCC.
617................  Yes...............  No................     10  SURG..............  Amputat of lower limb for       2.2071          7.2          9.0
                                                                                         endocrine,nutrit,&
                                                                                         metabol dis w CC.
618................  Yes...............  No................     10  SURG..............  Amputat of lower limb for       1.7554          4.9          6.1
                                                                                         endocrine,nutrit,&
                                                                                         metabol dis w/o CC/MCC.
619................  No................  No................     10  SURG..............  O.R. procedures for             2.7625          6.4          9.3
                                                                                         obesity w MCC.
620................  No................  No................     10  SURG..............  O.R. procedures for             1.9294          3.4          4.2
                                                                                         obesity w CC.
621................  No................  No................     10  SURG..............  O.R. procedures for             1.6876          2.1          2.4
                                                                                         obesity w/o CC/MCC.
622................  Yes...............  No................     10  SURG..............  Skin grafts & wound             2.7257          9.7         13.2
                                                                                         debrid for endoc, nutrit
                                                                                         & metab dis w MCC.
623................  Yes...............  No................     10  SURG..............  Skin grafts & wound             2.0065          6.8          8.7
                                                                                         debrid for endoc, nutrit
                                                                                         & metab dis w CC.
624................  Yes...............  No................     10  SURG..............  Skin grafts & wound             1.6056          4.6          5.9
                                                                                         debrid for endoc, nutrit
                                                                                         & metab dis w/o CC/MCC.
625................  No................  No................     10  SURG..............  Thyroid, parathyroid &          1.5928          5.0          7.5
                                                                                         thyroglossal procedures
                                                                                         w MCC.
626................  No................  No................     10  SURG..............  Thyroid, parathyroid &          1.0183          2.2          3.3
                                                                                         thyroglossal procedures
                                                                                         w CC.
627................  No................  No................     10  SURG..............  Thyroid, parathyroid &          0.8169          1.3          1.5
                                                                                         thyroglossal procedures
                                                                                         w/o CC/MCC.
628................  Yes...............  No................     10  SURG..............  Other endocrine, nutrit &       3.0602          7.8         11.8
                                                                                         metab O.R. proc w MCC.
629................  Yes...............  No................     10  SURG..............  Other endocrine, nutrit &       2.4730          7.0          8.8
                                                                                         metab O.R. proc w CC.
630................  Yes...............  No................     10  SURG..............  Other endocrine, nutrit &       1.7767          3.7          5.1
                                                                                         metab O.R. proc w/o CC/
                                                                                         MCC.
637................  Yes...............  No................     10  MED...............  Diabetes w MCC...........       1.0891          4.6          6.2
638................  Yes...............  No................     10  MED...............  Diabetes w CC............       0.8021          3.4          4.3
639................  Yes...............  No................     10  MED...............  Diabetes w/o CC/MCC......       0.6742          2.5          3.1
640................  Yes...............  No................     10  MED...............  Nutritional & misc              0.9793          4.1          5.6
                                                                                         metabolic disorders w
                                                                                         MCC.
641................  Yes...............  No................     10  MED...............  Nutritional & misc              0.7248          3.1          3.9
                                                                                         metabolic disorders w/o
                                                                                         MCC.
642................  No................  No................     10  MED...............  Inborn errors of                1.0616          3.8          5.3
                                                                                         metabolism.
643................  Yes...............  No................     10  MED...............  Endocrine disorders w MCC       1.3926          6.0          7.8
644................  Yes...............  No................     10  MED...............  Endocrine disorders w CC.       1.0638          4.3          5.4
645................  Yes...............  No................     10  MED...............  Endocrine disorders w/o         0.8310          3.2          3.9
                                                                                         CC/MCC.
652................  No................  No................     11  SURG..............  Kidney transplant........       3.0654          6.6          7.9
653................  Yes...............  No................     11  SURG..............  Major bladder procedures        4.5710         13.3         16.8
                                                                                         w MCC.
654................  Yes...............  No................     11  SURG..............  Major bladder procedures        3.1860          8.8         10.1
                                                                                         w CC.
655................  Yes...............  No................     11  SURG..............  Major bladder procedures        2.7075          5.8          6.6
                                                                                         w/o CC/MCC.
656................  No................  No................     11  SURG..............  Kidney & ureter                 2.6603          8.4         10.8
                                                                                         procedures for neoplasm
                                                                                         w MCC.
657................  No................  No................     11  SURG..............  Kidney & ureter                 1.8997          5.1          6.1
                                                                                         procedures for neoplasm
                                                                                         w CC.

[[Page 47552]]

 
658................  No................  No................     11  SURG..............  Kidney & ureter                 1.6556          3.3          3.8
                                                                                         procedures for neoplasm
                                                                                         w/o CC/MCC.
659................  Yes...............  No................     11  SURG..............  Kidney & ureter                 2.8119          8.2         11.3
                                                                                         procedures for non-
                                                                                         neoplasm w MCC.
660................  Yes...............  No................     11  SURG..............  Kidney & ureter                 2.0605          4.8          6.5
                                                                                         procedures for non-
                                                                                         neoplasm w CC.
661................  Yes...............  No................     11  SURG..............  Kidney & ureter                 1.4004          2.6          3.3
                                                                                         procedures for non-
                                                                                         neoplasm w/o CC/MCC.
662................  No................  No................     11  SURG..............  Minor bladder procedures        2.0375          7.3         10.5
                                                                                         w MCC.
663................  No................  No................     11  SURG..............  Minor bladder procedures        1.4254          3.6          5.3
                                                                                         w CC.
664................  No................  No................     11  SURG..............  Minor bladder procedures        1.0388          1.6          2.1
                                                                                         w/o CC/MCC.
665................  No................  No................     11  SURG..............  Prostatectomy w MCC......       2.1393          9.3         12.2
666................  No................  No................     11  SURG..............  Prostatectomy w CC.......       1.4691          4.3          6.3
667................  No................  No................     11  SURG..............  Prostatectomy w/o CC/MCC.       0.9335          2.0          2.7
668................  No................  No................     11  SURG..............  Transurethral procedures        1.7208          6.3          8.6
                                                                                         w MCC.
669................  No................  No................     11  SURG..............  Transurethral procedures        1.2079          3.1          4.4
                                                                                         w CC.
670................  No................  No................     11  SURG..............  Transurethral procedures        0.8838          1.9          2.5
                                                                                         w/o CC/MCC.
671................  No................  No................     11  SURG..............  Urethral procedures w CC/       1.2808          3.9          5.8
                                                                                         MCC.
672................  No................  No................     11  SURG..............  Urethral procedures w/o         0.8422          1.9          2.5
                                                                                         CC/MCC.
673................  No................  No................     11  SURG..............  Other kidney & urinary          2.5235          6.0         10.2
                                                                                         tract procedures w MCC.
674................  No................  No................     11  SURG..............  Other kidney & urinary          2.1024          4.0          6.6
                                                                                         tract procedures w CC.
675................  No................  No................     11  SURG..............  Other kidney & urinary          1.7196          1.4          1.9
                                                                                         tract procedures w/o CC/
                                                                                         MCC.
682................  Yes...............  No................     11  MED...............  Renal failure w MCC......       1.4664          5.3          7.3
683................  Yes...............  No................     11  MED...............  Renal failure w CC.......       1.1942          4.5          5.7
684................  Yes...............  No................     11  MED...............  Renal failure w/o CC/MCC.       0.9835          3.1          3.8
685................  No................  No................     11  MED...............  Admit for renal dialysis.       0.8599          2.4          3.5
686................  No................  No................     11  MED...............  Kidney & urinary tract          1.4513          6.0          8.1
                                                                                         neoplasms w MCC.
687................  No................  No................     11  MED...............  Kidney & urinary tract          1.1147          4.0          5.3
                                                                                         neoplasms w CC.
688................  No................  No................     11  MED...............  Kidney & urinary tract          0.8577          2.5          3.2
                                                                                         neoplasms w/o CC/MCC.
689................  Yes...............  No................     11  MED...............  Kidney & urinary tract          1.0587          5.0          6.4
                                                                                         infections w MCC.
690................  Yes...............  No................     11  MED...............  Kidney & urinary tract          0.8000          3.6          4.3
                                                                                         infections w/o MCC.
691................  No................  No................     11  MED...............  Urinary stones w esw            1.1508          3.0          4.2
                                                                                         lithotripsy w CC/MCC.
692................  No................  No................     11  MED...............  Urinary stones w esw            0.9457          1.8          2.3
                                                                                         lithotripsy w/o CC/MCC.
693................  No................  No................     11  MED...............  Urinary stones w/o esw          1.0459          3.9          5.2
                                                                                         lithotripsy w MCC.
694................  No................  No................     11  MED...............  Urinary stones w/o esw          0.7110          2.0          2.6
                                                                                         lithotripsy w/o MCC.
695................  No................  No................     11  MED...............  Kidney & urinary tract          0.9422          4.3          5.7
                                                                                         signs & symptoms w MCC.
696................  No................  No................     11  MED...............  Kidney & urinary tract          0.6276          2.6          3.2
                                                                                         signs & symptoms w/o MCC.
697................  No................  No................     11  MED...............  Urethral stricture.......       0.7223          2.4          3.3
698................  Yes...............  No................     11  MED...............  Other kidney & urinary          1.3017          5.1          6.8
                                                                                         tract diagnoses w MCC.
699................  Yes...............  No................     11  MED...............  Other kidney & urinary          1.0352          3.8          4.9
                                                                                         tract diagnoses w CC.
700................  Yes...............  No................     11  MED...............  Other kidney & urinary          0.8232          2.7          3.5
                                                                                         tract diagnoses w/o CC/
                                                                                         MCC.
707................  No................  No................     12  SURG..............  Major male pelvic               1.5521          3.5          4.5
                                                                                         procedures w CC/MCC.
708................  No................  No................     12  SURG..............  Major male pelvic               1.1858          2.0          2.4
                                                                                         procedures w/o CC/MCC.
709................  No................  No................     12  SURG..............  Penis procedures w CC/MCC       1.6134          3.6          6.5
710................  No................  No................     12  SURG..............  Penis procedures w/o CC/        1.2986          1.5          1.9
                                                                                         MCC.
711................  No................  No................     12  SURG..............  Testes procedures w CC/         1.6051          5.3          7.8
                                                                                         MCC.
712................  No................  No................     12  SURG..............  Testes procedures w/o CC/       1.0842          2.1          3.0
                                                                                         MCC.

[[Page 47553]]

 
713................  No................  No................     12  SURG..............  Transurethral                   0.9850          2.9          4.2
                                                                                         prostatectomy w CC/MCC.
714................  No................  No................     12  SURG..............  Transurethral                   0.6710          1.7          2.0
                                                                                         prostatectomy w/o CC/MCC.
715................  No................  No................     12  SURG..............  Other male reproductive         1.5300          3.8          6.1
                                                                                         system O.R. proc for
                                                                                         malignancy w CC/MCC.
716................  No................  No................     12  SURG..............  Other male reproductive         1.1310          1.3          1.5
                                                                                         system O.R. proc for
                                                                                         malignancy w/o CC/MCC.
717................  No................  No................     12  SURG..............  Other male reproductive         1.5653          5.0          7.5
                                                                                         system O.R. proc exc
                                                                                         malignancy w CC/MCC.
718................  No................  No................     12  SURG..............  Other male reproductive         1.0329          2.1          2.7
                                                                                         system O.R. proc exc
                                                                                         malignancy w/o CC/MCC.
722................  No................  No................     12  MED...............  Malignancy, male                1.2827          5.6          7.4
                                                                                         reproductive system w
                                                                                         MCC.
723................  No................  No................     12  MED...............  Malignancy, male                1.0603          4.2          5.4
                                                                                         reproductive system w CC.
724................  No................  No................     12  MED...............  Malignancy, male                0.7677          2.5          3.3
                                                                                         reproductive system w/o
                                                                                         CC/MCC.
725................  No................  No................     12  MED...............  Benign prostatic                0.9071          4.4          5.7
                                                                                         hypertrophy w MCC.
726................  No................  No................     12  MED...............  Benign prostatic                0.6886          2.8          3.5
                                                                                         hypertrophy w/o MCC.
727................  No................  No................     12  MED...............  Inflammation of the male        1.0083          5.1          6.5
                                                                                         reproductive system w
                                                                                         MCC.
728................  No................  No................     12  MED...............  Inflammation of the male        0.7241          3.3          4.0
                                                                                         reproductive system w/o
                                                                                         MCC.
729................  No................  No................     12  MED...............  Other male reproductive         0.9542          3.7          5.1
                                                                                         system diagnoses w CC/
                                                                                         MCC.
730................  No................  No................     12  MED...............  Other male reproductive         0.7058          2.4          3.2
                                                                                         system diagnoses w/o CC/
                                                                                         MCC.
734................  No................  No................     13  SURG..............  Pelvic evisceration, rad        2.0185          5.8          7.6
                                                                                         hysterectomy & rad
                                                                                         vulvectomy w CC/MCC.
735................  No................  No................     13  SURG..............  Pelvic evisceration, rad        1.3798          3.0          3.5
                                                                                         hysterectomy & rad
                                                                                         vulvectomy w/o CC/MCC.
736................  No................  No................     13  SURG..............  Uterine & adnexa proc for       3.2108         11.5         13.9
                                                                                         ovarian or adnexal
                                                                                         malignancy w MCC.
737................  No................  No................     13  SURG..............  Uterine & adnexa proc for       2.1022          6.2          7.4
                                                                                         ovarian or adnexal
                                                                                         malignancy w CC.
738................  No................  No................     13  SURG..............  Uterine & adnexa proc for       1.6754          3.5          3.9
                                                                                         ovarian or adnexal
                                                                                         malignancy w/o CC/MCC.
739................  No................  No................     13  SURG..............  Uterine,adnexa proc for         2.2081          7.9         10.2
                                                                                         non-ovarian/adnexal
                                                                                         malig w MCC.
740................  No................  No................     13  SURG..............  Uterine,adnexa proc for         1.4577          4.4          5.2
                                                                                         non-ovarian/adnexal
                                                                                         malig w CC.
741................  No................  No................     13  SURG..............  Uterine,adnexa proc for         1.0308          2.8          3.1
                                                                                         non-ovarian/adnexal
                                                                                         malig w/o CC/MCC.
742................  No................  No................     13  SURG..............  Uterine & adnexa proc for       1.2422          3.5          4.6
                                                                                         non-malignancy w CC/MCC.
743................  No................  No................     13  SURG..............  Uterine & adnexa proc for       0.8672          2.1          2.3
                                                                                         non-malignancy w/o CC/
                                                                                         MCC.
744................  No................  No................     13  SURG..............  D&C, conization,                1.1896          4.0          5.8
                                                                                         laparascopy & tubal
                                                                                         interruption w CC/MCC.
745................  No................  No................     13  SURG..............  D&C, conization,                0.8660          2.1          2.5
                                                                                         laparascopy & tubal
                                                                                         interruption w/o CC/MCC.
746................  No................  No................     13  SURG..............  Vagina, cervix & vulva          1.0488          3.0          4.1
                                                                                         procedures w CC/MCC.
747................  No................  No................     13  SURG..............  Vagina, cervix & vulva          0.8499          1.7          1.9
                                                                                         procedures w/o CC/MCC.
748................  No................  No................     13  SURG..............  Female reproductive             0.7916          1.5          1.8
                                                                                         system reconstructive
                                                                                         procedures.
749................  No................  No................     13  SURG..............  Other female reproductive       2.2813          7.1          9.8
                                                                                         system O.R. procedures w
                                                                                         CC/MCC.
750................  No................  No................     13  SURG..............  Other female reproductive       1.4993          2.6          3.3
                                                                                         system O.R. procedures w/
                                                                                         o CC/MCC.
754................  No................  No................     13  MED...............  Malignancy, female              1.5596          6.4          8.9
                                                                                         reproductive system w
                                                                                         MCC.
755................  No................  No................     13  MED...............  Malignancy, female              1.1608          4.2          5.6
                                                                                         reproductive system w CC.

[[Page 47554]]

 
756................  No................  No................     13  MED...............  Malignancy, female              0.7702          2.5          3.3
                                                                                         reproductive system w/o
                                                                                         CC/MCC.
757................  No................  No................     13  MED...............  Infections, female              1.4328          6.8          8.9
                                                                                         reproductive system w
                                                                                         MCC.
758................  No................  No................     13  MED...............  Infections, female              1.1147          4.9          6.1
                                                                                         reproductive system w CC.
759................  No................  No................     13  MED...............  Infections, female              0.9609          3.7          4.6
                                                                                         reproductive system w/o
                                                                                         CC/MCC.
760................  No................  No................     13  MED...............  Menstrual & other female        0.6910          2.9          3.8
                                                                                         reproductive system
                                                                                         disorders w CC/MCC.
761................  No................  No................     13  MED...............  Menstrual & other female        0.5569          2.0          2.5
                                                                                         reproductive system
                                                                                         disorders w/o CC/MCC.
765................  No................  No................     14  SURG..............  Cesarean section w CC/MCC       0.9943          4.1          5.3
766................  No................  No................     14  SURG..............  Cesarean section w/o CC/        0.7664          3.0          3.2
                                                                                         MCC.
767................  No................  No................     14  SURG..............  Vaginal delivery w              0.7246          2.5          2.9
                                                                                         sterilization &/or D&C.
768................  No................  No................     14  SURG..............  Vaginal delivery w O.R.         1.7348          4.7          5.8
                                                                                         proc except steril &/or
                                                                                         D&C.
769................  No................  No................     14  SURG..............  Postpartum & post               1.9114          3.2          5.7
                                                                                         abortion diagnoses w
                                                                                         O.R. procedure.
770................  No................  No................     14  SURG..............  Abortion w D&C,                 0.7336          1.6          2.6
                                                                                         aspiration curettage or
                                                                                         hysterotomy.
774................  No................  No................     14  MED...............  Vaginal delivery w              0.5914          2.6          3.2
                                                                                         complicating diagnoses.
775................  No................  No................     14  MED...............  Vaginal delivery w/o            0.4461          2.1          2.3
                                                                                         complicating diagnoses.
776................  No................  No................     14  MED...............  Postpartum & post               0.6460          2.6          3.5
                                                                                         abortion diagnoses w/o
                                                                                         O.R. procedure.
777................  No................  No................     14  MED...............  Ectopic pregnancy........       0.7087          1.8          2.1
778................  No................  No................     14  MED...............  Threatened abortion......       0.3744          2.0          2.8
779................  No................  No................     14  MED...............  Abortion w/o D&C.........       0.6013          1.7          2.6
780................  No................  No................     14  MED...............  False labor..............       0.2845          1.3          2.7
781................  No................  No................     14  MED...............  Other antepartum                0.5689          2.7          3.9
                                                                                         diagnoses w medical
                                                                                         complications.
782................  No................  No................     14  MED...............  Other antepartum                0.4297          1.7          2.8
                                                                                         diagnoses w/o medical
                                                                                         complications.
789................  No................  No................     15  MED...............  Neonates, died or               1.4250            *            *
                                                                                         transferred to another
                                                                                         acute care facility.
790................  No................  No................     15  MED...............  Extreme immaturity or           4.6990            *            *
                                                                                         respiratory distress
                                                                                         syndrome, neonate.
791................  No................  No................     15  MED...............  Prematurity w major             3.2093            *            *
                                                                                         problems.
792................  No................  No................     15  MED...............  Prematurity w/o major           1.9364            *            *
                                                                                         problems.
793................  No................  No................     15  MED...............  Full term neonate w major       3.2966            *            *
                                                                                         problems.
794................  No................  No................     15  MED...............  Neonate w other                 1.1668            *            *
                                                                                         significant problems.
795................  No................  No................     15  MED...............  Normal newborn...........       0.1580            *            *
799................  No................  No................     16  SURG..............  Splenectomy w MCC........       3.9513         10.7         14.3
800................  No................  No................     16  SURG..............  Splenectomy w CC.........       2.7617          6.4          8.2
801................  No................  No................     16  SURG..............  Splenectomy w/o CC/MCC...       2.3252          3.7          4.8
802................  No................  No................     16  SURG..............  Other O.R. proc of the          2.7940          9.1         12.8
                                                                                         blood & blood forming
                                                                                         organs w MCC.
803................  No................  No................     16  SURG..............  Other O.R. proc of the          1.8259          4.7          6.5
                                                                                         blood & blood forming
                                                                                         organs w CC.
804................  No................  No................     16  SURG..............  Other O.R. proc of the          1.4754          2.4          3.2
                                                                                         blood & blood forming
                                                                                         organs w/o CC/MCC.
808................  No................  No................     16  MED...............  Major hematol/immun diag        1.6171          6.0          8.0
                                                                                         exc sickle cell crisis &
                                                                                         coagul w MCC.
809................  No................  No................     16  MED...............  Major hematol/immun diag        1.2031          3.9          5.0
                                                                                         exc sickle cell crisis &
                                                                                         coagul w CC.
810................  No................  No................     16  MED...............  Major hematol/immun diag        1.0741          3.1          3.9
                                                                                         exc sickle cell crisis &
                                                                                         coagul w/o CC/MCC.
811................  No................  No................     16  MED...............  Red blood cell disorders        1.0006          4.0          5.5
                                                                                         w MCC.
812................  No................  No................     16  MED...............  Red blood cell disorders        0.7780          2.8          3.7
                                                                                         w/o MCC.
813................  No................  No................     16  MED...............  Coagulation disorders....       1.3426          3.8          5.2
814................  No................  No................     16  MED...............  Reticuloendothelial &           1.3226          5.3          7.2
                                                                                         immunity disorders w MCC.
815................  No................  No................     16  MED...............  Reticuloendothelial &           1.0233          3.9          4.9
                                                                                         immunity disorders w CC.

[[Page 47555]]

 
816................  No................  No................     16  MED...............  Reticuloendothelial &           0.7990          2.7          3.4
                                                                                         immunity disorders w/o
                                                                                         CC/MCC.
820................  No................  No................     17  SURG..............  Lymphoma & leukemia w           4.4970         13.8         18.4
                                                                                         major O.R. procedure w
                                                                                         MCC.
821................  No................  No................     17  SURG..............  Lymphoma & leukemia w           2.6847          5.4          7.8
                                                                                         major O.R. procedure w
                                                                                         CC.
822................  No................  No................     17  SURG..............  Lymphoma & leukemia w           1.5989          2.7          3.7
                                                                                         major O.R. procedure w/o
                                                                                         CC/MCC.
823................  No................  No................     17  SURG..............  Lymphoma & non-acute            3.5188         12.0         15.4
                                                                                         leukemia w other O.R.
                                                                                         proc w MCC.
824................  No................  No................     17  SURG..............  Lymphoma & non-acute            2.5164          6.6          8.8
                                                                                         leukemia w other O.R.
                                                                                         proc w CC.
825................  No................  No................     17  SURG..............  Lymphoma & non-acute            1.6201          3.3          4.7
                                                                                         leukemia w other O.R.
                                                                                         proc w/o CC/MCC.
826................  No................  No................     17  SURG..............  Myeloprolif disord or           3.9780         13.0         17.4
                                                                                         poorly diff neopl w maj
                                                                                         O.R. proc w MCC.
827................  No................  No................     17  SURG..............  Myeloprolif disord or           2.4230          5.7          7.5
                                                                                         poorly diff neopl w maj
                                                                                         O.R. proc w CC.
828................  No................  No................     17  SURG..............  Myeloprolif disord or           1.5109          2.9          3.7
                                                                                         poorly diff neopl w maj
                                                                                         O.R. proc w/o CC/MCC.
829................  No................  No................     17  SURG..............  Myeloprolif disord or           2.4894          6.9         10.5
                                                                                         poorly diff neopl w
                                                                                         other O.R. proc w CC/MCC.
830................  No................  No................     17  SURG..............  Myeloprolif disord or           1.6396          2.5          3.5
                                                                                         poorly diff neopl w
                                                                                         other O.R. proc w/o CC/
                                                                                         MCC.
834................  No................  No................     17  MED...............  Acute leukemia w/o major        3.6361          8.9         14.7
                                                                                         O.R. procedure w MCC.
835................  No................  No................     17  MED...............  Acute leukemia w/o major        2.5626          5.3          8.2
                                                                                         O.R. procedure w CC.
836................  No................  No................     17  MED...............  Acute leukemia w/o major        2.1785          3.4          5.1
                                                                                         O.R. procedure w/o CC/
                                                                                         MCC.
837................  No................  No................     17  MED...............  Chemo w acute leukemia as       4.7788         17.2         22.7
                                                                                         sdx or w high dose chemo
                                                                                         agent w MCC.
838................  No................  No................     17  MED...............  Chemo w acute leukemia as       2.9919          6.2          9.0
                                                                                         sdx w CC or high dose
                                                                                         chemo agent.
839................  No................  No................     17  MED...............  Chemo w acute leukemia as       2.3980          4.9          6.1
                                                                                         sdx w/o CC/MCC.
840................  Yes...............  No................     17  MED...............  Lymphoma & non-acute            2.1454          6.8          9.6
                                                                                         leukemia w MCC.
841................  Yes...............  No................     17  MED...............  Lymphoma & non-acute            1.6444          5.0          6.6
                                                                                         leukemia w CC.
842................  Yes...............  No................     17  MED...............  Lymphoma & non-acute            1.2188          3.2          4.3
                                                                                         leukemia w/o CC/MCC.
843................  No................  No................     17  MED...............  Other myeloprolif dis or        1.6341          6.3          8.7
                                                                                         poorly diff neopl diag w
                                                                                         MCC.
844................  No................  No................     17  MED...............  Other myeloprolif dis or        1.2403          4.5          6.0
                                                                                         poorly diff neopl diag w
                                                                                         CC.
845................  No................  No................     17  MED...............  Other myeloprolif dis or        0.9664          3.3          4.3
                                                                                         poorly diff neopl diag w/
                                                                                         o CC/MCC.
846................  No................  No................     17  MED...............  Chemotherapy w/o acute          1.6523          5.8          8.5
                                                                                         leukemia as secondary
                                                                                         diagnosis w MCC.
847................  No................  No................     17  MED...............  Chemotherapy w/o acute          1.0296          2.7          3.3
                                                                                         leukemia as secondary
                                                                                         diagnosis w CC.
848................  No................  No................     17  MED...............  Chemotherapy w/o acute          0.9116          2.3          2.9
                                                                                         leukemia as secondary
                                                                                         diagnosis w/o CC/MCC.
849................  No................  No................     17  MED...............  Radiotherapy.............       1.2663          4.3          6.0
853................  Yes...............  No................     18  SURG..............  Infectious & parasitic          5.1840         12.8         16.8
                                                                                         diseases w O.R.
                                                                                         procedure w MCC.
854................  Yes...............  No................     18  SURG..............  Infectious & parasitic          3.9291          9.1         11.2
                                                                                         diseases w O.R.
                                                                                         procedure w CC.
855................  Yes...............  No................     18  SURG..............  Infectious & parasitic          3.3662          5.6          7.3
                                                                                         diseases w O.R.
                                                                                         procedure w/o CC/MCC.
856................  Yes...............  No................     18  SURG..............  Postoperative or post-          3.9257         12.1         16.2
                                                                                         traumatic infections w
                                                                                         O.R. proc w MCC.
857................  Yes...............  No................     18  SURG..............  Postoperative or post-          2.4919          6.8          8.9
                                                                                         traumatic infections w
                                                                                         O.R. proc w CC.
858................  Yes...............  No................     18  SURG..............  Postoperative or post-          2.0996          4.7          6.0
                                                                                         traumatic infections w
                                                                                         O.R. proc w/o CC/MCC.

[[Page 47556]]

 
862................  Yes...............  No................     18  MED...............  Postoperative & post-           1.5454          6.2          8.3
                                                                                         traumatic infections w
                                                                                         MCC.
863................  Yes...............  No................     18  MED...............  Postoperative & post-           1.0560          4.2          5.2
                                                                                         traumatic infections w/o
                                                                                         MCC.
864................  No................  No................     18  MED...............  Fever of unknown origin..       0.8240          3.2          4.1
865................  No................  No................     18  MED...............  Viral illness w MCC......       1.2074          4.9          6.8
866................  No................  No................     18  MED...............  Viral illness w/o MCC....       0.7527          2.8          3.5
867................  Yes...............  No................     18  MED...............  Other infectious &              2.1971          7.2          9.9
                                                                                         parasitic diseases
                                                                                         diagnoses w MCC.
868................  Yes...............  No................     18  MED...............  Other infectious &              1.5258          4.6          5.9
                                                                                         parasitic diseases
                                                                                         diagnoses w CC.
869................  Yes...............  No................     18  MED...............  Other infectious &              1.3611          3.5          4.4
                                                                                         parasitic diseases
                                                                                         diagnoses w/o CC/MCC.
870................  Yes...............  No................     18  MED...............  Septicemia w MV 96+ hours       5.7579         12.6         15.3
871................  Yes...............  No................     18  MED...............  Septicemia w/o MV 96+           1.7484          5.6          7.7
                                                                                         hours w MCC.
872................  Yes...............  No................     18  MED...............  Septicemia w/o MV 96+           1.3783          4.7          5.8
                                                                                         hours w/o MCC.
876................  No................  No................     19  SURG..............  O.R. procedure w                2.4632          6.9         11.4
                                                                                         principal diagnoses of
                                                                                         mental illness.
880................  No................  No................     19  MED...............  Acute adjustment reaction       0.6085          2.4          3.2
                                                                                         & psychosocial
                                                                                         dysfunction.
881................  No................  No................     19  MED...............  Depressive neuroses......       0.5198          3.1          4.2
882................  No................  No................     19  MED...............  Neuroses except                 0.5685          3.1          4.4
                                                                                         depressive.
883................  No................  No................     19  MED...............  Disorders of personality        0.8999          4.6          7.4
                                                                                         & impulse control.
884................  Yes...............  No................     19  MED...............  Organic disturbances &          0.8431          4.0          5.4
                                                                                         mental retardation.
885................  No................  No................     19  MED...............  Psychoses................       0.7783          5.5          7.6
886................  No................  No................     19  MED...............  Behavioral &                    0.6983          4.0          5.9
                                                                                         developmental disorders.
887................  No................  No................     19  MED...............  Other mental disorder           0.8341          3.1          4.6
                                                                                         diagnoses.
894................  No................  No................     20  MED...............  Alcohol/drug abuse or           0.3571          2.1          3.0
                                                                                         dependence, left ama.
895................  No................  No................     20  MED...............  Alcohol/drug abuse or           0.7557          8.2         10.5
                                                                                         dependence w
                                                                                         rehabilitation therapy.
896................  Yes...............  No................     20  MED...............  Alcohol/drug abuse or           1.0419          4.8          6.6
                                                                                         dependence w/o
                                                                                         rehabilitation therapy w
                                                                                         MCC.
897................  Yes...............  No................     20  MED...............  Alcohol/drug abuse or           0.6145          3.3          4.1
                                                                                         dependence w/o
                                                                                         rehabilitation therapy w/
                                                                                         o MCC.
901................  No................  No................     21  SURG..............  Wound debridements for          2.8534          9.3         14.4
                                                                                         injuries w MCC.
902................  No................  No................     21  SURG..............  Wound debridements for          1.8611          5.7          7.9
                                                                                         injuries w CC.
903................  No................  No................     21  SURG..............  Wound debridements for          1.4966          3.5          4.9
                                                                                         injuries w/o CC/MCC.
904................  No................  No................     21  SURG..............  Skin grafts for injuries        2.5246          7.2         12.2
                                                                                         w CC/MCC.
905................  No................  No................     21  SURG..............  Skin grafts for injuries        1.5926          3.5          4.7
                                                                                         w/o CC/MCC.
906................  No................  No................     21  SURG..............  Hand procedures for             0.9803          2.2          3.3
                                                                                         injuries.
907................  Yes...............  No................     21  SURG..............  Other O.R. procedures for       3.1030          8.1         11.7
                                                                                         injuries w MCC.
908................  Yes...............  No................     21  SURG..............  Other O.R. procedures for       2.1865          5.0          6.9
                                                                                         injuries w CC.
909................  Yes...............  No................     21  SURG..............  Other O.R. procedures for       1.4112          2.7          3.6
                                                                                         injuries w/o CC/MCC.
913................  No................  No................     21  MED...............  Traumatic injury w MCC...       1.0631          4.6          6.2
914................  No................  No................     21  MED...............  Traumatic injury w/o MCC.       0.6890          2.7          3.4
915................  No................  No................     21  MED...............  Allergic reactions w MCC.       0.8660          3.3          4.7
916................  No................  No................     21  MED...............  Allergic reactions w/o          0.4986          1.7          2.1
                                                                                         MCC.
917................  Yes...............  No................     21  MED...............  Poisoning & toxic effects       1.1717          3.7          5.2
                                                                                         of drugs w MCC.
918................  Yes...............  No................     21  MED...............  Poisoning & toxic effects       0.6886          2.1          2.7
                                                                                         of drugs w/o MCC.
919................  No................  No................     21  MED...............  Complications of                1.2830          4.4          6.2
                                                                                         treatment w MCC.
920................  No................  No................     21  MED...............  Complications of                0.9797          3.2          4.3
                                                                                         treatment w CC.
921................  No................  No................     21  MED...............  Complications of                0.7101          2.3          2.9
                                                                                         treatment w/o CC/MCC.
922................  No................  No................     21  MED...............  Other injury, poisoning &       1.1338          4.1          6.0
                                                                                         toxic effect diag w MCC.

[[Page 47557]]

 
923................  No................  No................     21  MED...............  Other injury, poisoning &       0.7071          2.4          3.3
                                                                                         toxic effect diag w/o
                                                                                         MCC.
927................  No................  No................     22  SURG..............  Extensive burns or full        12.3042         23.0         28.8
                                                                                         thickness burns w MV 96+
                                                                                         hrs w skin graft.
928................  No................  No................     22  SURG..............  Full thickness burn w           4.3956         12.1         16.2
                                                                                         skin graft or inhal inj
                                                                                         w CC/MCC.
929................  No................  No................     22  SURG..............  Full thickness burn w           2.3533          5.6          7.7
                                                                                         skin graft or inhal inj
                                                                                         w/o CC/MCC.
933................  No................  No................     22  MED...............  Extensive burns or full         2.6626          2.7          5.9
                                                                                         thickness burns w MV 96+
                                                                                         hrs w/o skin graft.
934................  No................  No................     22  MED...............  Full thickness burn w/o         1.3745          4.7          6.8
                                                                                         skin grft or inhal inj.
935................  No................  No................     22  MED...............  Non-extensive burns......       1.1605          3.7          5.5
939................  No................  No................     23  SURG..............  O.R. proc w diagnoses of        2.1672          7.5         10.9
                                                                                         other contact w health
                                                                                         services w MCC.
940................  No................  No................     23  SURG..............  O.R. proc w diagnoses of        1.6823          4.4          6.4
                                                                                         other contact w health
                                                                                         services w CC.
941................  No................  No................     23  SURG..............  O.R. proc w diagnoses of        1.3531          2.3          3.0
                                                                                         other contact w health
                                                                                         services w/o CC/MCC.
945................  Yes...............  No................     23  MED...............  Rehabilitation w CC/MCC..       1.1005          8.4         10.3
946................  Yes...............  No................     23  MED...............  Rehabilitation w/o CC/MCC       1.0143          7.0          7.9
947................  Yes...............  No................     23  MED...............  Signs & symptoms w MCC...       0.8767          3.8          5.0
948................  Yes...............  No................     23  MED...............  Signs & symptoms w/o MCC.       0.6542          2.7          3.4
949................  No................  No................     23  MED...............  Aftercare w CC/MCC.......       0.7323          2.5          4.1
950................  No................  No................     23  MED...............  Aftercare w/o CC/MCC.....       0.5948          2.4          3.4
951................  No................  No................     23  MED...............  Other factors influencing       0.6109          2.1          3.8
                                                                                         health status.
955................  No................  No................     24  SURG..............  Craniotomy for multiple         5.1028          8.5         12.2
                                                                                         significant trauma.
956................  Yes...............  Yes...............     24  SURG..............  Limb reattachment, hip &        3.4854          7.6          9.5
                                                                                         femur proc for multiple
                                                                                         significant trauma.
957................  No................  No................     24  SURG..............  Other O.R. procedures for       5.7960         10.5         16.0
                                                                                         multiple significant
                                                                                         trauma w MCC.
958................  No................  No................     24  SURG..............  Other O.R. procedures for       4.4786          7.9         10.5
                                                                                         multiple significant
                                                                                         trauma w CC.
959................  No................  No................     24  SURG..............  Other O.R. procedures for       3.6988          4.9          6.1
                                                                                         multiple significant
                                                                                         trauma w/o CC/MCC.
963................  No................  No................     24  MED...............  Other multiple                  2.2985          6.3          9.3
                                                                                         significant trauma w MCC.
964................  No................  No................     24  MED...............  Other multiple                  1.7015          5.0          6.3
                                                                                         significant trauma w CC.
965................  No................  No................     24  MED...............  Other multiple                  1.4108          3.3          4.1
                                                                                         significant trauma w/o
                                                                                         CC/MCC.
969................  No................  No................     25  SURG..............  HIV w extensive O.R.            5.1395         13.5         18.7
                                                                                         procedure w MCC.
970................  No................  No................     25  SURG..............  HIV w extensive O.R.            3.6849          6.6          9.5
                                                                                         procedure w/o MCC.
974................  No................  No................     25  MED...............  HIV w major related             2.1382          7.4         10.4
                                                                                         condition w MCC.
975................  No................  No................     25  MED...............  HIV w major related             1.5918          5.3          7.3
                                                                                         condition w CC.
976................  No................  No................     25  MED...............  HIV w major related             1.3357          3.8          4.9
                                                                                         condition w/o CC/MCC.
977................  No................  No................     25  MED...............  HIV w or w/o other              1.0387          3.8          5.3
                                                                                         related condition.
981................  Yes...............  No................  .....  SURG..............  Extensive O.R. procedure        4.5168         11.9         15.3
                                                                                         unrelated to principal
                                                                                         diagnosis w MCC.
982................  Yes...............  No................  .....  SURG..............  Extensive O.R. procedure        3.5417          7.8         10.0
                                                                                         unrelated to principal
                                                                                         diagnosis w CC.
983................  Yes...............  No................  .....  SURG..............  Extensive O.R. procedure        2.9737          3.9          5.4
                                                                                         unrelated to principal
                                                                                         diagnosis w/o CC/MCC.
984................  No................  No................  .....  SURG..............  Prostatic O.R. procedure        2.7217         11.7         14.6
                                                                                         unrelated to principal
                                                                                         diagnosis w MCC.
985................  No................  No................  .....  SURG..............  Prostatic O.R. procedure        2.0865          7.4          9.7
                                                                                         unrelated to principal
                                                                                         diagnosis w CC.
986................  No................  No................  .....  SURG..............  Prostatic O.R. procedure        1.6706          3.5          5.1
                                                                                         unrelated to principal
                                                                                         diagnosis w/o CC/MCC.
987................  Yes...............  No................  .....  SURG..............  Non-extensive O.R. proc         2.8500          9.9         13.2
                                                                                         unrelated to principal
                                                                                         diagnosis w MCC.
988................  Yes...............  No................  .....  SURG..............  Non-extensive O.R. proc         2.0134          5.9          8.0
                                                                                         unrelated to principal
                                                                                         diagnosis w CC.

[[Page 47558]]

 
989................  Yes...............  No................  .....  SURG..............  Non-extensive O.R. proc         1.6310          2.9          4.1
                                                                                         unrelated to principal
                                                                                         diagnosis w/o CC/MCC.
998................  No................  No................  .....  **................  Principal diagnosis                N/A            *            *
                                                                                         invalid as discharge
                                                                                         diagnosis.
999................  No................  No................  .....  **................  Ungroupable..............          N/A            *            *
--------------------------------------------------------------------------------------------------------------------------------------------------------
MS-DRGs 998 and 999 contain cases that could not be assigned to valid DRGs.
Note: If there is no value or asterisk in either the geometric mean length of stay or the arithmetic mean length of stay columns, the volume of cases is
  insufficient to obtain a meaningful computation of these statistics.


                                         Table 6A.--New Diagnosis Codes
----------------------------------------------------------------------------------------------------------------
    Diagnosis code               Description                   CC           MDC                MS-DRG
----------------------------------------------------------------------------------------------------------------
040.41................  Infant botulism..............  Y................       15  791 \1\, 793 \1\
                                                       CC...............       18  867, 868, 869
040.42................  Wound botulism...............  Y................       18  867, 868, 869
                                                       CC...............
058.10................  Roseola infantum, unspecified  N................       15  791 \1\, 793 \1\
                                                                               18  865, 866
058.11................  Roseola infantum due to human  N................       15  791 \1\, 793 \1\
                         herpesvirus 6.
                                                                               18  865, 866
058.12................  Roseola infantum due to human  N................       15  791 \1\, 793 \1\
                         herpesvirus 7.
                                                                               18  865, 866
058.21................  Human herpesvirus 6            Y................        1  23,24,97, 98, 99
                         encephalitis.                 MCC..............
                                                                               15  791 \1\, 793 \1\
                                                                               25  974, 975, 976
058.29................  Other human herpesvirus        Y................        1  23, 24, 97, 98, 99
                         encephalitis.                 MCC..............
                                                                               15  791 \1\, 793 \1\
                                                                               25  974, 975, 976
058.81................  Human herpesvirus 6 infection  N................        9  606, 607
058.82................  Human herpesvirus 7 infection  N................        9  606, 607
058.89................  Other human herpesvirus        N................        9  606, 607
                         infection.
079.83................  Parvovirus B19...............  Y................       18  865, 866
                                                       CC...............
200.30................  Marginal zone lymphoma,        Y................       17  820, 821, 822, 823, 824, 825,
                         unspecified site, extranodal  CC...............            840, 841, 842
                         and solid organ sites.
                                                                               25  974, 975, 976
200.31................  Marginal zone lymphoma, lymph  Y................       17  820, 821, 822, 823, 824, 825,
                         nodes of head, face, and      CC...............            840, 841, 842
                         neck.
                                                                               25  974, 975, 976
200.32................  Marginal zone lymphoma,        Y................       17  820, 821, 822, 823, 824,
                         intrathoracic lymph nodes.    CC...............            825,840, 841, 842
                                                                               25  974, 975, 976
200.33................  Marginal zone lymphoma,        Y................       17  820, 821, 822, 823, 824, 825,
                         intraabdominal lymph nodes.   CC...............            840, 841, 842
                                                                               25  974, 975, 976
200.34................  Marginal zone lymphoma, lymph  Y................       17  820, 821, 822, 823, 824, 825,
                         nodes of axilla and upper     CC...............            840, 841, 842
                         limb.
                                                                               25  974, 975, 976
200.35................  Marginal zone lymphoma, lymph  Y................       17  820, 821, 822, 823, 824, 825,
                         nodes of inguinal region and  CC...............            840, 841, 842
                         lower limb.
                                                                               25  974, 975, 976
200.36................  Marginal zone lymphoma,        Y................       17  820, 821, 822, 823, 824, 825,
                         intrapelvic lymph nodes.      CC...............            840, 841, 842
                                                                               25  974, 975, 976

[[Page 47559]]

 
200.37................  Marginal zone lymphoma,        Y................       17  820, 821, 822, 823, 824, 825,
                         spleen.                       CC...............            840, 841, 842
                                                                               25  974, 975, 976
200.38................  Marginal zone lymphoma, lymph  Y................       17  820, 821, 822, 823, 824,
                         nodes of multiple sites.      CC...............            825,840, 841, 842
                                                                               25  974, 975, 976
200.40................  Mantle cell lymphoma,          Y................       17  820, 821, 822, 823, 824, 825,
                         unspecified site, extranodal  CC...............            840, 841, 842
                         and solid organ sites.
                                                                               25  974, 975, 976
200.41................  Mantle cell lymphoma, lymph    Y................       17  820, 821, 822, 823, 824, 825,
                         nodes of head, face, and      CC...............            840, 841, 842
                         neck.
                                                                               25  974, 975, 976
200.42................  Mantle cell lymphoma,          Y................       17  820, 821, 822, 823, 824, 825,
                         intrathoracic lymph nodes.    CC...............            840, 841, 842
                                                                               25  974, 975, 976
200.43................  Mantle cell lymphoma, intra-   Y................       17  820, 821, 822, 823, 824, 825,
                         abdominal lymph nodes.        CC...............            840, 841, 842
                                                                               25  974, 975, 976
200.44................  Mantle cell lymphoma, lymph    Y................       17  820, 821, 822, 823, 824, 825,
                         nodes of axilla and upper     CC...............            840, 841, 842
                         limb.
                                                                               25  974, 975, 976
200.45................  Mantle cell lymphoma, lymph    Y................       17  820, 821, 822, 823, 824, 825,
                         nodes of inguinal region and  CC...............            840, 841, 842
                         lower limb.
                                                                               25  974, 975, 976
200.46................  Mantle cell lymphoma,          Y................       17  820, 821, 822, 823, 824, 825,
                         intrapelvic lymph nodes.      CC...............            840, 841,842
                                                                               25  974, 975, 976
200.47................  Mantle cell lymphoma, spleen.  Y................       17  820, 821, 822, 823, 824, 825,
                                                       CC...............            840, 841, 842
                                                                               25  974, 975, 976
200.48................  Mantle cell lymphoma, lymph    Y................       17  820, 821, 822, 823, 824, 825,
                         nodes of multiple sites.      CC...............            840, 841, 842
                                                                               25  974, 975, 976
200.50................  Primary central nervous        Y................       17  820, 821, 822, 823, 824, 825,
                         system lymphoma, unspecified  CC...............            840, 841, 842
                         site, extranodal and solid
                         organ sites.
                                                                               25  974, 975, 976
200.51................  Primary central nervous        Y................       17  820, 821, 822, 823, 824, 825,
                         system lymphoma, lymph nodes  CC...............            840, 841, 842
                         of head, face, and neck.
                                                                               25  974, 975, 976
200.52................  Primary central nervous        Y................       17  820, 821, 822, 823, 824, 825,
                         system lymphoma,              CC...............            840, 841, 842
                         intrathoracic lymph nodes.
                                                                               25  974, 975, 976
200.53................  Primary central nervous        Y................       17  820, 821, 822, 823, 824, 825,
                         system lymphoma, intra-       CC...............            840, 841, 842
                         abdominal lymph nodes.
                                                                               25  974, 975, 976
200.54................  Primary central nervous        Y................       17  820, 821, 822, 823, 824, 825,
                         system lymphoma, lymph nodes  CC...............            840, 841, 842
                         of axilla and upper limb.
                                                                               25  974, 975, 976
200.55................  Primary central nervous        Y................       17  820, 821, 822, 823, 824, 825,
                         system lymphoma, lymph nodes  CC...............            840, 841, 842
                         of inguinal region and lower
                         limb.
                                                                               25  974, 975, 976

[[Page 47560]]

 
200.56................  Primary central nervous        Y................       17  820, 821, 822, 823, 824, 825,
                         system lymphoma, intrapelvic  CC...............            840, 841, 842
                         lymph nodes.
                                                                               25  974, 975, 976
200.57................  Primary central nervous        Y................       17  820, 821, 822, 823, 824, 825,
                         system lymphoma, spleen.      CC...............            840, 841, 842
                                                                               25  974, 975, 976
200.58................  Primary central nervous        Y................       17  820, 821, 822, 823, 824, 825,
                         system lymphoma, lymph nodes  CC...............            840, 841, 842
                         of multiple sites.
                                                                               25  974, 975, 976
200.60................  Anaplastic large cell          Y................       17  820, 821, 822, 823, 824, 825,
                         lymphoma, unspecified site,   CC...............            840, 841, 842
                         extranodal and solid organ
                         sites.
                                                                               25  974, 975, 976
200.61................  Anaplastic large cell          Y................       17  820, 821, 822, 823, 824, 825,
                         lymphoma, lymph nodes of      CC...............            840, 841, 842
                         head, face, and neck.
                                                                               25  974, 975, 976
200.62................  Anaplastic large cell          Y................       17  820, 821, 822, 823, 824, 825,
                         lymphoma, intrathoracic       CC...............            840, 841, 842
                         lymph nodes.
                                                                               25  974, 975, 976
200.63................  Anaplastic large cell          Y................       17  820, 821, 822, 823, 824, 825,
                         lymphoma, intra-abdominal     CC...............            840, 841, 842
                         lymph nodes.
                                                                               25  974, 975, 976
200.64................  Anaplastic large cell          Y................       17  820, 821, 822, 823, 824, 825,
                         lymphoma, lymph nodes of      CC...............            840, 841, 842
                         axilla and upper limb.
                                                                               25  974, 975, 976
200.65................  Anaplastic large cell          Y................       17  820, 821, 822, 823, 824, 825,
                         lymphoma, lymph nodes of      CC...............            840, 841, 842
                         inguinal region and lower
                         limb.
                                                                               25  974, 975, 976
200.66................  Anaplastic large cell          Y................       17  820, 821, 822, 823, 824, 825,
                         lymphoma, intrapelvic lymph   CC...............            840, 841, 842
                         nodes.
                                                                               25  974, 975, 976
200.67................  Anaplastic large cell          Y................       17  820, 821, 822, 823, 824, 825,
                         lymphoma, spleen.             CC...............            840, 841, 842
                                                                               25  974, 975, 976
200.68................  Anaplastic large cell          Y................       17  820, 821, 822, 823, 824, 825,
                         lymphoma, lymph nodes of      CC...............            840, 841, 842
                         multiple sites.
                                                                               25  974, 975, 976
200.70................  Large cell lymphoma,           Y................       17  820, 821, 822, 823, 824, 825,
                         unspecified site, extranodal  CC...............            840, 841, 842
                         and solid organ sites.
                                                                               25  974, 975, 976
200.71................  Large cell lymphoma, lymph     Y................       17  820, 821, 822, 823, 824, 825,
                         nodes of head, face, and      CC...............            840, 841,842
                         neck.
                                                                               25  974, 975, 976
200.72................  Large cell lymphoma,           Y................       17  820, 821, 822, 823, 824, 825,
                         intrathoracic lymph nodes.    CC...............            840, 841, 842
                                                                               25  974, 975, 976
200.73................  Large cell lymphoma, intra-    Y................       17  820, 821, 822, 823, 824, 825,
                         abdominal lymph nodes.        CC...............            840, 841,842
                                                                               25  974, 975, 976
200.74................  Large cell lymphoma, lymph     Y................       17  820, 821, 822, 823, 824, 825,
                         nodes of axilla and upper     CC...............            840, 841,842
                         limb.
                                                                               25  974, 975, 976
200.75................  Large cell lymphoma, lymph     Y................       17  820, 821, 822, 823, 824, 825,
                         nodes of inguinal region and  CC...............            840, 841, 842
                         lower limb.

[[Page 47561]]

 
                                                                               25  974, 975, 976
200.76................  Large cell lymphoma,           Y................       17  820, 821, 822, 823, 824, 825,
                         intrapelvic lymph nodes.      CC...............            840, 841, 842
                                                                               25  974, 975, 976
200.77................  Large cell lymphoma, spleen..  Y................       17  820,821, 822, 823, 824, 825,
                                                       CC...............            840, 841, 842
                                                                               25  974, 975, 976
200.78................  Large cell lymphoma, lymph     Y................       17  820,821, 822, 823, 824, 825,
                         nodes of multiple sites.      CC...............            840, 841, 842
                                                                               25  974, 975, 976
202.70................  Peripheral T cell lymphoma,    Y................       17  820, 821, 822, 823, 824, 825,
                         unspecified site, extranodal  CC...............            840, 841, 842
                         and solid organ sites.
                                                                               25  974, 975, 976
202.71................  Peripheral T cell lymphoma,    Y................       17  820, 821, 822, 823, 824, 825,
                         lymph nodes of head, face,    CC...............            840, 841, 842
                         and neck.
                                                                               25  974, 975, 976
202.72................  Peripheral T cell lymphoma,    Y................       17  820, 821, 822, 823, 824, 825,
                         intrathoracic lymph nodes.    CC...............            840, 841, 842
                                                                               25  974, 975, 976
202.73................  Peripheral T cell lymphoma,    Y................       17  820, 821, 822, 823, 824, 825,
                         intra-abdominal lymph nodes.  CC...............            840, 841, 842
                                                                               25  974, 975, 976
202.74................  Peripheral T cell lymphoma,    Y................       17  820, 821, 822, 823, 824, 825,
                         lymph nodes of axilla and     CC...............            840, 841, 842
                         upper limb.
                                                                               25  974, 975, 976
202.75................  Peripheral T cell lymphoma,    Y................       17  820, 821, 822, 823, 824, 825,
                         lymph nodes of inguinal       CC...............            840, 841, 842
                         region and lower limb.
                                                                               25  974, 975, 976
202.76................  Peripheral T cell lymphoma,    Y................       17  820, 821, 822, 823, 824, 825,
                         intrapelvic lymph nodes.      CC...............            840, 841, 842
                                                                               25  974, 975, 976
202.77................  Peripheral T cell lymphoma,    Y................       17  820, 821, 822, 823, 824, 825,
                         spleen.                       CC...............            840, 841, 842
                                                                               25  974, 975, 976
202.78................  Peripheral T cell lymphoma,    Y................       17  820, 821, 822, 823, 824, 825,
                         lymph nodes of multiple       CC...............            840, 841, 842
                         sites.
                                                                               25  974, 975, 976
233.30................  Carcinoma in situ,             N................       13  739, 740, 741, 744, 745, 754,
                         unspecified female genital                                 755, 756
                         organ.
233.31................  Carcinoma in situ, vagina....  N................       13  739, 740, 741, 744, 745, 754,
                                                                                    755, 756
233.32................  Carcinoma in situ, vulva.....  N................       13  739, 740, 741, 744, 745, 754,
                                                                                    755, 756
233.39................  Carcinoma in situ, other       N................       13  739, 740, 741, 744, 745, 754,
                         female genital organ.                                      755, 756
255.41................  Glucocorticoid deficiency....  Y................       10  643, 644, 645
                                                       CC...............
255.42................  Mineralocorticoid deficiency.  Y................       10  643, 644, 645
                                                       CC...............
258.01................  Multiple endocrine neoplasia   N................       10  643, 644, 645
                         [MEN] type I.
258.02................  Multiple endocrine neoplasia   N................       10  643, 644, 645
                         [MEN] type IIA.
258.03................  Multiple endocrine neoplasia   N................       10  643, 644, 645
                         [MEN] type IIB.
284.81................  Red cell aplasia (acquired)    Y................       16  808, 809, 810
                         (adult) (with thymoma).
                                                       MCC..............       25  977
284.89................  Other specified aplastic       Y................       16  808, 809, 810
                         anemias.

[[Page 47562]]

 
                                                       MCC..............       25  977
288.66................  Bandemia.....................  N................       16  814, 815, 816
315.34................  Speech and language            N................       19  886
                         developmental delay due to
                         hearing loss.
331.5.................  Idiopathic normal pressure     Y................        1  56, 57
                         hydrocephalus (INPH).         CC...............
359.21................  Myotonic muscular dystrophy..  N................        1  91, 92, 93
359.22................  Myotonia congenita...........  N................        1  91, 92, 93
359.23................  Myotonic chondrodystrophy....  N................        1  91, 92, 93
359.24................  Drug induced myotonia........  N................        1  91, 92, 93
359.29................  Other specified myotonic       N................        1  91, 92, 93
                         disorder.
364.81................  Floppy iris syndrome.........  N................        2  124, 125
364.89................  Other disorders of iris and    N................        2  124, 125
                         ciliary body.
388.45................  Acquired auditory processing   N................       19  886
                         disorder.
389.05................  Conductive hearing loss,       N................        3  154, 155, 156
                         unilateral.
389.06................  Conductive hearing loss,       N................        3  154, 155, 156
                         bilateral.
389.13................  Neural hearing loss,           N................        3  154, 155, 156
                         unilateral.
389.17................  Sensory hearing loss,          N................        3  154, 155, 156
                         unilateral.
389.20................  Mixed hearing loss,            N................        3  154, 155, 156
                         unspecified.
389.21................  Mixed hearing loss,            N................        3  154, 155, 156
                         unilateral.
389.22................  Mixed hearing loss, bilateral  N................        3  154, 155, 156
414.2.................  Chronic total occlusion of     N................        5  302, 303
                         coronary artery.
415.12................  Septic pulmonary embolism....  Y................        4  175,176
                                                       MCC..............       15  791 \1\, 793 \1\
423.3.................  Cardiac tamponade............  Y................        5  314, 315, 316
                                                       CC...............
440.4.................  Chronic total occlusion of     N................        5  299, 300, 301
                         artery of the extremities.
449...................  Septic arterial embolism.....  Y................        5  299, 300, 301
                                                       CC...............       15  791 \1\, 793 \1\
488...................  Influenza due to identified    N................        3  152, 153
                         avian influenza virus.
525.71................  Osseointegration failure of    N................      PRE  11, 12, 13
                         dental implant.
                                                                                3  157, 158, 159
525.72................  Post-osseointegration          N................      PRE  11, 12, 13
                         biological failure of dental
                         implant.
                                                                                3  157, 158, 159
525.73................  Post-osseointegration          N................      PRE  11, 12, 13
                         mechanical failure of dental
                         implant.
                                                                                3  157, 158, 159
525.79................  Other endosseous dental        N................      PRE  11, 12, 13
                         implant failure.
                                                                                3  157, 158, 159
569.43................  Anal sphincter tear (healed)   N................        6  393, 394, 395
                         (old).
624.01................  Vulvar intraepithelial         N................       13  742, 743, 760, 761
                         neoplasiaI [VIN I].
624.02................  Vulvar intraepithelial         N................       13  742, 743, 760, 761
                         neoplasia II [VIN II].
624.09................  Other dystrophy of vulva.....  N................       13  742, 743, 760, 761
664.60................  Anal sphincter tear            N................       14  765, 766, 767, 768, 774, 775
                         complicating delivery, not
                         associated with third-degree
                         perineal laceration,
                         unspecified as to episode of
                         care or not applicable.
664.61................  Anal sphincter tear            Y................       14  765, 766, 767, 768, 774,775
                         complicating delivery, not    CC...............
                         associated with third-degree
                         perineal laceration,
                         delivered, with or without
                         mention of antepartum
                         condition.
664.64................  Anal sphincter tear            Y................       14  769, 776
                         complicating delivery, not    CC...............
                         associated with third-degree
                         perineal laceration,
                         postpartum condition or
                         complication.
733.45................  Aseptic necrosis of bone, jaw  Y................        8  553, 554
                                                       CC...............
787.20................  Dysphagia, unspecified.......  N................        6  391, 392
787.21................  Dysphagia, oral phase........  N................        6  391, 392
787.22................  Dysphagia, oropharyngeal       N................        6  391, 392
                         phase.
787.23................  Dysphagia, pharyngeal phase..  N................        6  391, 392
787.24................  Dysphagia, pharyngoesophageal  N................        6  391, 392
                         phase.
787.29................  Other dysphagia..............  N................        6  391, 392
789.51................  Malignant ascites............  Y................       23  947, 948
                                                       CC...............
789.59................  Other ascites................  Y................       23  947, 948
                                                       CC...............
999.31 *..............  Infection due to central       Y................        5  314, 315, 316
                         venous catheter.              CC...............
999.39 *..............  Infection following other      Y................       15  791 \1\, 793 \1\
                         infusion, injection,
                         transfusion, or vaccination.
                                                       CC...............       18  856, 857, 858, 867, 868, 869
V12.53................  Personal history of sudden     N................       23  951
                         cardiac arrest.
V12.54................  Personal history of transient  N................       23  951
                         ischemic attack (TIA), and
                         cerebral infarction without
                         residual deficits.
V13.22................  Personal history of cervical   N................       17  843, 844, 845
                         dysplasia.

[[Page 47563]]

 
V16.52................  Family history of malignant    N................       23  951
                         neoplasm,bladder.
V17.41................  Family history of sudden       N................       23  951
                         cardiac death (SCD).
V17.49................  Family history of other        N................       23  951
                         cardiovascular diseases.
V18.11................  Family history of multiple     N................       23  951
                         endocrine neoplasia [MEN]
                         syndrome.
V18.19................  Family history of other        N................       23  951
                         endocrine and metabolic
                         diseases.
V25.04................  Counseling and instruction in  N................       23  951
                         natural family planning to
                         avoid pregnancy.
V26.41................  Procreative counseling and     N................       23  951
                         advice using natural family
                         planning.
V26.49................  Other procreative management,  N................       23  951
                         counseling and advice.
V26.81................  Encounter for assisted         N................       23  951
                         reproductive fertility
                         procedure cycle.
V26.89................  Other specified procreative    N................       23  951
                         management.
V49.85................  Dual sensory impairment......  N................       23  951
V68.01................  Disability examination.......  N................       23  951
V68.09................  Other issue of medical         N................       23  951
                         certificates.
V72.12................  Encounter for hearing          N................       15  795 \2\
                         conservation and treatment.
                                                                               23  951
V73.81................  Special screening              N................       23  951
                         examination, Human
                         papillomavirus (HPV).
V84.81................  Genetic susceptibility to      N................       23  951
                         multiple endocrine neoplasia
                         [MEN].
V84.89................  Genetic susceptibility to      N................       23  951
                         other disease.
----------------------------------------------------------------------------------------------------------------
MCC--Major Complication or Comorbidity in MS-DRGs.
New codes 629.82, 629.83, 629.84 and V17.40 that were listed in the proposed rule have been deleted. They will
  not be implemented on October 1, 2007.
\1\ Secondary diagnosis of major problem.
\2\ On ``Only secondary diagnosis'' list.
* These diagnosis codes were discussed at the March 22-23, 2007 ICD-9-CM Coordination and Maintenance Committee
  meeting and were not finalized in time to include in the proposed rule. They will be implemented on October 1,
  2007.


                                         Table 6B.--New Procedure Codes
----------------------------------------------------------------------------------------------------------------
    Procedure code               Description                  O.R.          MDC                MS-DRG
----------------------------------------------------------------------------------------------------------------
00.19.................  Disruption of blood brain      N................
                         barrier via infusion [BBBD].
00.94 *...............  Intra-operative                N................
                         neurophysiologic monitoring.
01.10.................  Intracranial pressure          N................
                         monitoring.
01.16.................  Intracranial oxygen            N................
                         monitoring.
01.17.................  Brain temperature monitoring.  N................
07.83 *...............  Thoracoscopic partial          Y................        1  40, 41, 42
                         excision of thymus.
                                                                                4  163, 164, 165
                                                                               10  628, 629, 630
                                                                               16  802, 803, 804
                                                                               17  820, 821, 822, 826, 827, 828
                                                                               21  907, 908, 909
                                                                               24  957, 958, 959
07.84 *...............  Thoracoscopic total excision   Y................        1  40, 41, 42
                         of thymus.
                                                                                4  163, 164, 165
                                                                               10  628, 629, 630
                                                                               16  802, 803, 804
                                                                               17  820, 821, 822, 826, 827, 828
                                                                               21  907, 908, 909
                                                                               24  957, 958, 959
07.95 *...............  Thoracoscopic incision of      Y................        1  40, 41, 42
                         thymus.
                                                                                4  163, 164, 165
                                                                               10  628, 629, 630
                                                                               16  802, 803, 804
                                                                               17  820, 821, 822, 826, 827, 828
                                                                               21  907, 908, 909
                                                                               24  957, 958, 959
07.98 *...............  Other and unspecified          Y................        1  40, 41, 42
                         thoracoscopic operations on
                         thymus.
                                                                                4  163, 164, 165
                                                                               10  628, 629, 630
                                                                               16  802, 803, 804
                                                                               17  820, 821, 822, 826, 827, 828
                                                                               21  907, 908, 909
                                                                               24  957, 958, 959
32.20 *...............  Thoracoscopic excision of      Y................        4  163, 164, 165
                         lesion or tissue of lung.
                                                                               17  820, 821, 822, 826, 827, 828

[[Page 47564]]

 
                                                                               21  907, 908, 909
                                                                               24  957, 958, 959
32.30 *...............  Thoracoscopic segmental        Y................        4  163, 164, 165
                         resection of lung.
                                                                               17  820, 821, 822, 826, 827, 828
                                                                               21  907, 908, 909
                                                                               24  957, 958, 959
32.39 *...............  Other and unspecified          Y................        4  163, 164, 165
                         segmental resection of lung.
                                                                               17  820, 821, 822, 826, 827, 828
                                                                               21  907, 908, 909
                                                                               24  957, 958, 959
32.41.................  Thoracoscopic lobectomy of     Y................        4  163, 164, 165
                         lung.
                                                                               21  907, 908, 909
                                                                               24  957, 958, 959
32.49.................  Other lobectomy of lung......  Y................        4  163, 164, 165
                                                                               21  907, 908, 909
                                                                               24  957, 958, 959
32.50 *...............  Thoracoscopic pneumonectomy..  Y................        4  163, 164, 165
                                                                               21  907, 908, 909
                                                                               24  957, 958, 959
32.59 *...............  Other and unspecified          Y................        4  163, 164, 165
                         pneumonectomy.
                                                                               21  907, 908, 909
                                                                               24  957, 958, 959
33.20.................  Thoracoscopic lung biopsy....  Y................        4  166, 167, 168
                                                                                5  264
                                                                                8  515, 516, 517
                                                                               11  673, 674, 675
                                                                               17  823, 824, 825, 829, 830
34.06.................  Thoracoscopic drainage of      Y................        4  166, 167, 168
                         pleural cavity.
34.20.................  Thoracoscopic pleural biopsy.  Y................        4  166, 167, 168
34.52.................  Thoracoscopic decortication    Y................        4  163, 164, 165
                         of lung.
                                                                               17  820, 821, 822, 826, 827, 828
                                                                               21  907, 908, 909
                                                                               24  957, 958, 959
50.13 *...............  Transjugular liver biopsy....  N................
50.14 *...............  Laparoscopic liver biopsy....  Y................        6  356, 357, 358
                                                                                7  420, 421, 422
                                                                                9  579, 580, 581
                                                                               11  673, 674, 675
                                                                               16  802, 803, 804
                                                                               17  820, 821, 822, 826, 827, 828
                                                                               21  907, 908, 909
                                                                               24  957, 958, 959
70.53.................  Repair of cystocele and        Y................        6  329, 330, 331
                         rectocelewith graft or
                         prosthesis.
                                                                               11  653, 654, 655
                                                                               13  748
70.54.................  Repair of cystocele with       Y................       11  662, 663, 664
                         graft or prosthesis.
                                                                               13  748
70.55.................  Repair of rectocele with       Y................        6  329, 330, 331
                         graft or prosthesis.
                                                                               13  748
70.63.................  Vaginal construction with      Y................       13  748
                         graft or prosthesis.
70.64.................  Vaginal reconstruction with    Y................       13  748
                         graft or prosthesis.
                                                                               21  907, 908, 909
                                                                               24  957, 958, 959
70.78.................  Vaginal suspension and         Y................       11  662, 663, 664
                         fixation with graft or
                         prosthesis.
                                                                               13  748
70.93.................  Other operations on cul-de-    Y................       13  746, 747
                         sac with graft or prosthesis.
70.94.................  Insertion of biological graft  N................  .......  .............................
70.95.................  Insertion of synthetic graft   N................  .......  .............................
                         or prosthesis.
84.80 *...............  Insertion or replacement of    Y................        1  28, 29, 30
                         interspinous process
                         device(s).
                                                                                8  490
                                                                               21  907, 908, 909
                                                                               24  957, 958, 959
84.81 *...............  Revision of interspinous       Y................        8  515, 516, 517
                         process device(s).
                                                                               21  907, 908, 909
                                                                               24  957, 958, 959
84.82 *...............  Insertion or replacement of    Y................        1  28, 29, 30
                         pedicle-based dynamic
                         stabilization device(s).

[[Page 47565]]

 
                                                                                8  490
                                                                               21  907, 908, 909
                                                                               24  957, 958, 959
84.83 *...............  Revision of pedicle-based      Y................        8  515, 516, 517
                         dynamic stabilization
                         device(s).
                                                                               21  907, 908, 909
                                                                               24  957, 958, 959
84.84 *...............  Insertion or replacement of    Y................        1  28, 29, 30
                         facet replacement device(s).
                                                                                8  490
                                                                               21  907, 908, 909
                                                                               24  957, 958, 959
84.85 *...............  Revision of facet replacement  Y................        8  515, 516, 517
                         device(s).
                                                                               21  907, 908, 909
                                                                               24  957, 958, 959
88.59.................  Intra-operative fluorescence   N................
                         vascular angiography.
92.41 *...............  Intra-operative electron       N................
                         radiation therapy.
----------------------------------------------------------------------------------------------------------------
* These procedure codes were discussed at the March 22-23, 2007 ICD-9-CM Coordination and Maintenance Committee
  meeting and were not finalized in time to include in the proposed rule. They will be implemented on October 1,
  2007.


                                       Table 6C.--Invalid Diagnosis Codes
----------------------------------------------------------------------------------------------------------------
    Diagnosis code               Description                   CC           MDC               CMS DRG
----------------------------------------------------------------------------------------------------------------
233.3.................  Carcinoma in situ, other and   N................       13  354, 355, 363, 366, 367
                         unspecified female genital
                         organs.
255.4.................  Corticoadrenal insufficiency.  Y................       10  300, 301
258.0.................  Polyglandular activity in      N................       10  300, 301
                         multiple endocrine
                         adenomatosis.
284.8.................  Other specified aplastic       Y................       16  574
                         anemias.
                                                                               25  490
359.2.................  Myotonic disorders...........  N................        1  34, 35
364.8.................  Other disorders of iris and    N................        2  46, 47, 48
                         ciliary body.
389.2.................  Mixed conductive and           N................        3  73, 74
                         sensorineural hearing loss.
624.0.................  Dystrophy of vulva...........  N................       13  358, 359, 369
787.2.................  Dysphagia....................  N................        6  182, 183, 184
789.5.................  Ascites......................  Y................       23  463, 464
999.3 *...............  Complications of medical       Y................       15  387 \1\, 389 \1\
                         care, not elsewhere
                         classified, Other infection.
                                                                               18  423, 579
V17.4.................  Family history of other        N................       23  467
                         cardiovascular diseases.
V18.1.................  Family history of other        N................       23  467
                         endocrine and metabolic
                         diseases.
V26.4.................  Procreative                    N................       23  467
                         management,general
                         counseling and advice.
V26.8.................  Other specified procreative    N................       23  467
                         management.
V68.0.................  Issue of medical certificates  N................       23  467
V84.8.................  Genetic susceptibility to      N................       23  467
                         other disease.
----------------------------------------------------------------------------------------------------------------
The DRG assignments listed are based on the current code assignment in the CMS DRGs.
\1\ Secondary diagnosis of major problem.
* This diagnosis code was discussed at the March 22-23, 2007 ICD-9-CM Coordination and Maintenance Committee
  meeting and was not finalized in time to include in the proposed rule. It will be deleted on October 1, 2007.


                                       Table 6D.--Invalid Procedure Codes
----------------------------------------------------------------------------------------------------------------
    Procedure code               Description                  O.R.          MDC               CMS-DRG
----------------------------------------------------------------------------------------------------------------
32.3 *................  Segmental resection of lung..  Y................        4  75
                                                                               21  442, 443
                                                                               24  486
32.4..................  Lobectomy of lung............  Y................        4  75
                                                                               21  442, 443
                                                                               24  486
32.5 *................  Complete pneumonectomy.......  Y................        4  75
                                                                               21  442, 443
                                                                               24  486
84.58 *...............  Implantation of interspinous   Y................        1  531, 532
                         process decompression device.
                                                                                8  499, 500
                                                                               21  442, 443
                                                                               24  486
----------------------------------------------------------------------------------------------------------------
The DRG assignments listed are based on the current code assignment in the CMS DRGs.
* These procedure codes were discussed at the March 22-23, 2007 ICD-9-CM Coordination and Maintenance Committee
  meeting and were not finalized in time to include in the proposed rule. They will be deleted on October 1,
  2007.


[[Page 47566]]


                                    Table 6E.--Revised Diagnosis Code Titles
----------------------------------------------------------------------------------------------------------------
    Diagnosis code               Description                   CC           MDC                MS-DRG
----------------------------------------------------------------------------------------------------------------
005.1.................  Botulism food poisoning......  Y................       18  867, 868, 869
359.3.................  Periodic paralysis...........  N................        1  91, 92, 93
389.14................  Central hearing loss.........  N................        3  154, 155, 156
389.18................  Sensorineural hearing loss,    N................        3  154, 155, 156
                         bilateral.
389.7.................  Deaf, nonspeaking, not         N................        3  154, 155, 156
                         elsewhere classifiable.
----------------------------------------------------------------------------------------------------------------


                                    Table 6F.--Revised Procedure Code Titles
----------------------------------------------------------------------------------------------------------------
    Procedure code               Description                  O.R.          MDC                MS-DRG
----------------------------------------------------------------------------------------------------------------
00.18 *...............  Infusion of immunosuppressive  N................  .......
                         antibody therapy.
00.74.................  Hip bearing surface, metal-on- N................  .......
                         polyethylene.
00.75.................  Hip bearing surface, metal-on- N................  .......
                         metal.
00.76.................  Hip bearing surface, ceramic-  N................  .......
                         on-ceramic.
00.77.................  Hip bearing surface, ceramic-  N................  .......
                         on-polyethylene.
07.81 *...............  Other partial excision of      Y................        1  40, 41, 42
                         thymus.
                                                                                4  163, 64, 165
                                                                               10  628, 629, 630
                                                                               16  802, 803, 804
                                                                               17  820, 821, 822, 826, 827, 828
                                                                               21  907, 908, 909
                                                                               24  957, 958, 959
07.82 *...............  Other total excision of        Y................        1  40, 41, 42
                         thymus.
                                                                                4  163, 164, 165
                                                                               10  628, 629, 630
                                                                               16  802, 803, 804
                                                                               17  820, 821, 822, 826, 827, 828
                                                                               21  907, 908, 909
                                                                               24  957, 958, 959
07.92 *...............  Other incision of thymus.....  Y................        4  163, 164, 165
                                                                               10  628, 629, 630
                                                                               16  802, 803, 804
                                                                               17  820, 821, 822, 826, 827, 828
                                                                               21  907, 908, 909
                                                                               24  957, 958, 959
07.99 *...............  Other and unspecified          Y................        4  163, 164,165
                         operations on thymus.
                                                                               10  628, 629, 630
                                                                               16  802, 803, 804
                                                                               17  820, 821, 822, 826, 827, 828
34.24.................  Other pleural biopsy.........  N................  .......
39.8..................  Operations on carotid body,    Y................        1  37, 38, 39
                         carotid sinus and other
                         vascular bodies.
                                                                                4  166, 167, 168
                                                                                5  252, 253, 254
53.41.................  Repair of umbilical hernia     Y................        6  353, 354, 355 987, 988, 989
                         with graft or prosthesis.
53.61.................  Incisional hernia repair with  Y................        6  353, 354, 355
                         graft or prosthesis.
                                                                               21  907, 908, 909
                                                                               24  957, 958, 959
                                                                                   987, 988, 989
53.69.................  Repair of other hernia of      Y................       06  353, 354, 355 987, 988, 989
                         anterior abdominal wall with
                         graft or prosthesis.
99.14.................  Injection or infusion of       N................  .......
                         gamma globulin.
----------------------------------------------------------------------------------------------------------------
* These procedure codes were discussed at the March 22-23, 2007 ICD-9-CM Coordination and Maintenance Committee
  meeting and were not finalized in time to include in the proposed rule. They will be implemented on October 1,
  2007.

BILLING CODE 4120-01-P

[[Page 47567]]

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Part II--Continued

Book 2 of 2 Books

Pages 47567-48218





Department of Health and Human Services





-----------------------------------------------------------------------



Centers for Medicare & Medicaid Services



-----------------------------------------------------------------------



42 CFR Parts 411, 412, 413, and 489



Medicare Program; Changes to the Hospital Inpatient Prospective Payment 
Systems and Fiscal Year 2008 Rates; Final Rule

Federal Register / Vol. 72, No. 162 / Wednesday, August 22, 2007 / 
Rules and Regulations

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BILLING CODE 4120-01-C

[[Page 48108]]



       Table 7A.--Medicare Prospective Payment System Selected Percentile Lengths of Stay FY 2006 MedPar Update March 2007 Grouper V24.0 CMS DRGs
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                Number of    Arithmetic      10th         25th         50th         75th         90th
                             DRG                                discharges    mean LOS    percentile   percentile   percentile   percentile   percentile
--------------------------------------------------------------------------------------------------------------------------------------------------------
1............................................................       25,131       9.4313            2            4            7           12           19
2............................................................        9,628       4.2481            1            2            3            6            8
3............................................................            3      31.6667            2            2           42           51           51
6............................................................          256       2.9608            1            1            2            4            6
7............................................................       14,480       9.0468            2            4            7           11           18
8............................................................        3,103       2.7051            1            1            2            3            6
9............................................................        1,792       6.0107            1            2            4            7           11
10...........................................................       18,959       5.7670            2            3            4            7           11
11...........................................................        2,790       3.6250            1            1            3            5            7
12...........................................................       59,298       5.3199            2            3            4            6            9
13...........................................................        7,739       4.8765            2            3            4            6            8
14...........................................................      264,219       5.2662            2            3            4            6           10
15...........................................................       13,996       3.8492            1            2            3            5            7
16...........................................................       20,216       6.2530            2            3            5            8           12
17...........................................................        3,152       3.2056            1            1            2            4            6
18...........................................................       34,068       5.1279            2            3            4            6           10
19...........................................................        7,541       3.3149            1            2            3            4            6
21...........................................................        2,094       6.1833            2            3            5            8           12
22...........................................................        3,399       5.1278            2            2            4            6           10
23...........................................................       10,464       3.7091            1            2            3            5            7
26...........................................................           33       2.8750            1            1            2            3            5
27...........................................................        6,296       4.6766            1            1            3            6           10
28...........................................................       21,433       5.4849            1            2            4            7           11
29...........................................................        6,780       3.0806            1            1            2            4            6
31...........................................................        5,116       3.7875            1            2            3            5            7
32...........................................................        1,745       2.2458            1            1            2            3            4
34...........................................................       29,554       4.6998            1            2            4            6            9
35...........................................................        7,840       2.9365            1            1            2            4            5
36...........................................................          302       1.9455            1            1            1            1            2
37...........................................................        1,199       4.0918            1            1            3            5            9
38...........................................................           56       2.3846            1            1            2            3            4
39...........................................................          306       2.2586            1            1            1            2            4
40...........................................................        1,124       4.4811            1            2            4            5            8
42...........................................................        1,642       2.5714            1            1            1            2            4
43...........................................................          130       3.0156            1            1            2            4            5
44...........................................................        1,283       4.8950            2            3            4            6            9
45...........................................................        2,879       2.9292            1            2            2            4            5
46...........................................................        4,048       3.9677            1            2            3            5            8
47...........................................................        1,288       2.9741            1            1            2            4            6
49...........................................................        2,479       4.2539            1            2            3            5            8
50...........................................................        2,000       1.7953            1            1            1            2            3
51...........................................................          178       2.7910            1            1            1            3            6
52...........................................................          185       1.5301            1            1            1            2            2
53...........................................................        1,919       3.8786            1            1            2            5            9
55...........................................................        1,254       2.7630            1            1            1            3            6
56...........................................................          375       2.5627            1            1            2            3            5
57...........................................................          740       3.4384            1            1            2            4            7
58...........................................................            1       1.0000            1            1            1            1            1
59...........................................................          113       2.5221            1            1            1            3            5
60...........................................................            5       3.4000            1            1            1            6            8
61...........................................................          213       5.8774            1            1            4            7           13
62...........................................................            1       4.0000            4            4            4            4            4
63...........................................................        2,607       4.5492            1            2            3            6            9
64...........................................................        3,108       6.1176            1            2            4            7           12
65...........................................................       39,649       2.7318            1            1            2            3            5
66...........................................................        7,805       3.2004            1            1            2            4            6
67...........................................................          349       3.5948            1            2            3            4            7
68...........................................................       14,613       3.7088            1            2            3            5            7
69...........................................................        3,579       2.7922            1            2            2            3            5
70...........................................................           22       2.4545            1            1            2            3            4
71...........................................................           65       3.8125            1            2            3            5            7
72...........................................................        1,398       3.3912            1            2            3            4            6
73...........................................................        9,912       4.3625            1            2            3            6            8
75...........................................................       46,315       9.3605            3            4            7           12           19
76...........................................................       45,317      10.1339            3            5            8           13           19
77...........................................................        1,784       4.4012            1            2            4            6            9
78...........................................................       52,438       5.9444            2            4            5            7           10
79...........................................................      151,130       7.8794            3            4            6           10           14
80...........................................................        5,970       5.2160            2            3            4            6            9
81...........................................................            8       3.1250            1            2            3            3            4

[[Page 48109]]

 
82...........................................................       61,331       6.5291            2            3            5            8           13
83...........................................................        7,240       5.0375            2            3            4            6            9
84...........................................................        1,346       3.0015            1            2            3            4            5
85...........................................................       22,437       6.0961            2            3            5            8           12
86...........................................................        1,440       3.3698            1            2            3            4            6
87...........................................................      105,232       6.2370            2            3            5            8           11
88...........................................................      378,958       4.7587            2            3            4            6            9
89...........................................................      472,756       5.3886            2            3            4            7           10
90...........................................................       34,464       3.5882            1            2            3            4            6
91...........................................................           43       5.0930            1            2            3            6            8
92...........................................................       16,046       5.8190            2            3            5            7           11
93...........................................................        1,120       3.5820            1            2            3            5            6
94...........................................................       13,688       5.8577            2            3            5            7           11
95...........................................................        1,410       3.4328            1            2            3            4            7
96...........................................................       52,901       4.1779            1            2            3            5            7
97...........................................................       21,402       3.2642            1            2            3            4            6
98...........................................................           11       4.6364            1            2            4            6            7
99...........................................................       20,929       3.0894            1            1            2            4            6
100..........................................................        5,463       2.0814            1            1            2            3            4
101..........................................................       24,319       4.1850            1            2            3            5            8
102..........................................................        4,235       2.4307            1            1            2            3            5
103..........................................................          988      37.8279            9           13           25           47           83
104..........................................................       19,397      14.5499            6            8           12           18           25
105..........................................................       32,104       9.9315            4            6            8           11           18
106..........................................................        3,285      10.8958            5            7            9           13           19
108..........................................................        9,268      10.4271            4            6            8           13           19
110..........................................................       56,637       7.8089            1            3            6           10           16
111..........................................................       10,448       2.7745            1            1            2            4            6
113..........................................................       30,753      12.4596            4            6           10           15           24
114..........................................................        7,290       8.1490            2            4            7           10           15
117..........................................................        7,097       4.0233            1            1            2            5            9
118..........................................................        7,994       3.0067            1            1            2            4            7
119..........................................................          793       5.4823            1            1            4            8           12
120..........................................................       30,375       9.0225            1            3            6           12           19
121..........................................................      132,870       5.9605            2            3            5            8           11
122..........................................................       47,937       3.2303            1            1            3            4            6
123..........................................................       24,196       4.6425            1            1            3            6           11
124..........................................................      111,282       4.4078            1            2            3            6            9
125..........................................................       85,682       2.6793            1            1            2            3            5
126..........................................................        5,197      10.7631            3            6            8           13           20
127..........................................................      632,794       5.0454            2            3            4            6            9
128..........................................................        3,390       4.9852            2            3            4            6            8
129..........................................................        3,268       2.6096            1            1            1            3            6
130..........................................................       84,710       5.2355            1            3            4            7           10
131..........................................................       20,557       3.6402            1            2            3            5            6
132..........................................................       85,172       2.7460            1            1            2            3            5
133..........................................................        5,023       2.0883            1            1            2            3            4
134..........................................................       38,372       3.0023            1            1            2            4            6
135..........................................................        7,010       4.2221            1            2            3            5            8
136..........................................................          900       2.4872            1            1            2            3            5
138..........................................................      207,864       3.8413            1            2            3            5            7
139..........................................................       68,246       2.3922            1            1            2            3            4
140..........................................................       25,370       2.3401            1            1            2            3            4
141..........................................................      126,247       3.3956            1            2            3            4            6
142..........................................................       44,621       2.4528            1            1            2            3            4
143..........................................................      223,237       2.1145            1            1            2            3            4
144..........................................................      107,318       5.8453            1            2            4            7           12
145..........................................................        5,085       2.5058            1            1            2            3            5
146..........................................................        9,743       9.6593            4            6            8           11           17
147..........................................................        2,423       5.3166            2            4            5            7            8
149..........................................................       18,595       5.4424            3            4            5            7            8
150..........................................................       23,520      10.4472            3            6            9           13           19
151..........................................................        5,168       4.9323            1            2            4            7            9
152..........................................................        4,910       7.7955            3            4            6            9           13
153..........................................................        1,853       4.7348            2            3            4            6            7
155..........................................................        5,811       3.7807            1            2            3            5            8
156..........................................................            3      19.0000            2            2           16           39           39
157..........................................................        8,167       5.5270            1            2            4            7           11
158..........................................................        3,274       2.6225            1            1            2            3            5
159..........................................................       19,093       5.0841            1            2            4            6           10

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160..........................................................       10,896       2.5844            1            1            2            3            5
161..........................................................        9,755       4.5095            1            2            3            6            9
162..........................................................        4,431       2.0711            1            1            1            3            4
163..........................................................            7       4.7143            2            3            4            5            7
164..........................................................        6,034       7.6391            3            4            6            9           14
165..........................................................        2,336       3.8898            1            2            4            5            7
166..........................................................        5,502       4.2153            1            2            3            5            8
167..........................................................        4,870       2.0816            1            1            2            3            4
168..........................................................        1,653       4.5972            1            2            3            6            9
169..........................................................          862       2.1583            1            1            2            3            4
170..........................................................       17,875      10.3572            2            4            8           13           21
171..........................................................        1,388       3.8916            1            2            3            5            8
172..........................................................       32,418       6.7337            2            3            5            8           13
173..........................................................        1,955       3.4441            1            1            3            4            6
174..........................................................      240,894       4.6420            2            2            4            6            8
175..........................................................       25,028       2.8115            1            2            2            3            5
176..........................................................       13,344       5.0520            2            3            4            6            9
177..........................................................        7,771       4.4075            2            2            4            5            8
178..........................................................        2,294       3.1007            1            2            3            4            5
179..........................................................       14,696       5.7497            2            3            4            7           11
180..........................................................       90,205       5.2286            2            3            4            6           10
181..........................................................       23,385       3.2729            1            2            3            4            6
182..........................................................      284,288       4.0583            1            2            3            5            8
183..........................................................       73,204       2.8163            1            1            2            4            5
184..........................................................           81       3.5556            1            2            2            4            7
185..........................................................        6,071       4.4178            1            2            3            5            9
186..........................................................            4       4.7500            3            3            3            6            7
187..........................................................          655       3.9908            1            2            3            5            8
188..........................................................       85,371       5.3017            1            2            4            6           10
189..........................................................       11,855       2.9775            1            1            2            4            6
190..........................................................            9       5.1111            1            2            4            5            9
191..........................................................       10,286      12.1607            3            6            9           15           25
192..........................................................        1,303       5.2928            1            3            5            7            9
193..........................................................        3,726      12.0478            4            6           10           15           22
194..........................................................          431       6.6136            3            4            6            8           11
195..........................................................        2,436      10.2609            4            6            9           13           18
196..........................................................          505       5.5549            2            3            5            7            9
197..........................................................       15,282       8.9193            3            5            7           11           16
198..........................................................        3,595       4.2656            2            3            4            5            7
199..........................................................        1,330       8.7641            2            3            6           11           19
200..........................................................          891      10.4065            2            4            7           13           21
201..........................................................        2,625      13.0693            3            6           10           16           26
202..........................................................       26,642       6.0702            2            3            5            7           12
203..........................................................       30,604       6.3715            2            3            5            8           12
204..........................................................       67,196       5.3052            2            3            4            6           10
205..........................................................       32,076       5.7548            2            3            4            7           11
206..........................................................        1,771       3.8392            1            2            3            5            7
207..........................................................       37,953       5.1883            1            2            4            6           10
208..........................................................        8,748       2.8981            1            1            2            4            5
210..........................................................      127,328       6.5376            3            4            5            7           11
211..........................................................       23,386       4.5191            3            3            4            5            7
212..........................................................            6       4.6667            1            1            2            8            8
213..........................................................        8,148       9.2665            2            4            7           12           18
216..........................................................       19,791       5.4380            1            1            3            8           12
217..........................................................       14,674      11.9337            3            5            8           15           24
218..........................................................       31,163       5.4241            2            3            4            7           10
219..........................................................       20,018       3.1029            1            2            3            4            5
220..........................................................            5       6.5000            1            1            2            4            4
223..........................................................       11,983       3.3894            1            1            2            4            7
224..........................................................        8,755       1.9509            1            1            1            2            3
225..........................................................        6,196       5.1605            1            2            4            7           10
226..........................................................        7,243       6.3625            1            3            4            8           13
227..........................................................        4,761       2.5699            1            1            2            3            5
228..........................................................        2,624       4.2102            1            1            3            5            9
229..........................................................          979       2.3154            1            1            2            3            4
230..........................................................        2,438       5.7623            1            2            4            7           12
232..........................................................          480       2.9430            1            1            1            3            7
233..........................................................       22,424       5.9435            1            2            5            8           12
234..........................................................       10,689       2.4816            1            1            1            3            6
235..........................................................        4,507       4.5416            1            2            4            6            8

[[Page 48111]]

 
236..........................................................       41,531       4.3734            2            3            4            5            7
237..........................................................        1,836       3.7021            1            2            3            5            7
238..........................................................        9,574       8.0098            2            4            6            9           15
239..........................................................       37,495       5.9298            2            3            5            7           11
240..........................................................       12,594       6.4175            2            3            5            8           12
241..........................................................        2,415       3.5871            1            2            3            4            6
242..........................................................        2,616       6.3669            2            3            5            8           12
243..........................................................       98,427       4.4708            1            2            4            6            8
244..........................................................       16,911       4.3383            1            2            3            5            8
245..........................................................        5,216       3.0312            1            1            3            4            5
246..........................................................        1,297       3.5771            1            2            3            4            6
247..........................................................       21,405       3.3455            1            2            3            4            6
248..........................................................       17,580       4.7555            2            3            4            6            8
249..........................................................       13,366       3.9374            1            1            3            5            8
250..........................................................        4,475       3.8692            1            2            3            5            7
251..........................................................        1,923       2.7432            1            1            3            3            5
253..........................................................       25,870       4.5355            2            3            4            5            8
254..........................................................        9,313       3.0799            1            2            3            4            5
255..........................................................            1       3.0000            3            3            3            3            3
256..........................................................        7,739       5.0466            1            2            4            6            9
257..........................................................       12,277       2.5477            1            1            2            3            5
258..........................................................       10,259       1.6863            1            1            1            2            3
259..........................................................        2,463       2.9923            1            1            1            3            7
260..........................................................        2,003       1.3551            1            1            1            1            2
261..........................................................        1,523       2.1103            1            1            1            2            4
262..........................................................          569       4.8768            1            2            4            6           10
263..........................................................       20,967      10.2150            3            5            7           12           20
264..........................................................        3,496       5.9813            2            3            5            7           11
265..........................................................        3,986       6.3149            1            2            4            8           14
266..........................................................        2,126       3.0918            1            1            2            4            6
267..........................................................          215       4.9346            1            2            3            5            9
268..........................................................        1,018       3.3734            1            1            2            4            7
269..........................................................       11,532       8.0441            2            4            6           10           16
270..........................................................        2,567       3.7101            1            1            3            5            7
271..........................................................       20,085       6.7420            2            3            5            8           12
272..........................................................        5,806       5.6625            2            3            4            7           10
273..........................................................        1,106       3.7945            1            2            3            5            7
274..........................................................        2,256       6.1463            2            3            5            8           11
275..........................................................          191       2.9050            1            1            2            3            5
276..........................................................        1,455       4.4663            1            2            4            6            8
277..........................................................      122,645       5.3563            2            3            4            7            9
278..........................................................       31,770       3.8934            2            2            3            5            7
279..........................................................            9       2.5556            1            1            3            4            4
280..........................................................       19,679       3.9461            1            2            3            5            7
281..........................................................        6,054       2.8113            1            1            2            3            5
283..........................................................        6,894       4.3785            1            2            3            5            8
284..........................................................        1,776       2.9858            1            1            2            4            5
285..........................................................        8,387       9.8055            3            5            8           13           18
286..........................................................        3,030       5.2288            1            2            4            6           10
287..........................................................        5,038       9.5913            3            5            7           11           18
288..........................................................        9,255       3.3157            1            2            2            4            6
289..........................................................        5,844       2.5231            1            1            1            2            5
290..........................................................       12,189       2.0053            1            1            1            2            3
291..........................................................           51       1.5200            1            1            1            2            2
292..........................................................        7,680      10.0354            2            4            8           12           19
293..........................................................          325       4.6852            1            2            3            6            9
294..........................................................       95,358       4.1796            1            2            3            5            8
295..........................................................        4,608       3.6299            1            2            3            4            7
296..........................................................      209,892       4.4834            1            2            3            5            8
297..........................................................       36,469       2.9933            1            2            3            4            5
298..........................................................           82       3.3537            1            2            2            4            7
299..........................................................        1,589       5.2780            1            2            4            6           10
300..........................................................       21,925       5.7484            2            3            5            7           11
301..........................................................        3,625       3.3959            1            2            3            4            6
302..........................................................       10,721       7.8878            4            5            6            9           13
303..........................................................       19,684       6.0530            2            3            5            7           11
304..........................................................       13,865       7.8471            2            3            6           10           16
305..........................................................        2,903       2.9119            1            2            2            4            5
306..........................................................        5,219       5.8804            1            2            3            8           14
307..........................................................        1,657       1.9212            1            1            2            2            3

[[Page 48112]]

 
308..........................................................        5,083       5.4260            1            2            3            7           12
309..........................................................        2,789       1.6113            1            1            1            2            3
310..........................................................       24,767       4.5591            1            2            3            6           10
311..........................................................        5,064       1.8171            1            1            1            2            3
312..........................................................        1,378       4.8198            1            1            3            6           10
313..........................................................          483       2.1206            1            1            2            3            4
315..........................................................       35,069       6.7590            1            1            4            9           16
316..........................................................      233,845       5.9901            2            3            5            7           11
317..........................................................        2,526       3.4968            1            1            2            4            7
318..........................................................        5,851       5.7865            1            3            4            7           11
319..........................................................          337       2.8234            1            1            2            4            5
320..........................................................      228,348       4.9126            2            3            4            6            9
321..........................................................       29,956       3.4930            1            2            3            4            6
322..........................................................           80       3.2875            1            2            3            4            6
323..........................................................       19,348       3.0716            1            1            2            4            6
324..........................................................        3,880       1.9113            1            1            1            2            3
325..........................................................        9,350       3.6738            1            2            3            5            7
326..........................................................        2,325       2.4998            1            1            2            3            4
327..........................................................            5       2.6000            1            1            2            2            6
328..........................................................          531       3.4356            1            1            2            4            6
329..........................................................           49       1.6531            1            1            1            2            2
330..........................................................            1       1.0000            1            1            1            1            1
331..........................................................       56,142       5.4154            1            2            4            7           10
332..........................................................        3,224       3.0420            1            1            2            4            6
333..........................................................          306       5.5065            1            2            3            7           13
334..........................................................        9,289       3.9511            1            2            3            5            7
335..........................................................       12,822       2.2583            1            1            2            3            4
336..........................................................       25,296       3.1764            1            1            2            3            6
337..........................................................       19,205       1.7798            1            1            2            2            3
338..........................................................          615       5.5668            1            2            4            8           12
339..........................................................        1,138       5.6484            1            1            3            7           12
340..........................................................            1       1.0000            1            1            1            1            1
341..........................................................        2,815       3.1900            1            1            1            3            7
342..........................................................          455       3.3890            1            1            2            4            7
344..........................................................        2,043       2.9843            1            1            1            3            7
345..........................................................        1,260       5.1809            1            2            3            6           11
346..........................................................        3,420       5.6788            2            3            4            7           11
347..........................................................          217       2.9299            1            1            1            4            6
348..........................................................        4,289       4.0382            1            2            3            5            7
349..........................................................          504       2.5668            1            1            2            3            5
350..........................................................        7,262       4.4271            2            2            4            5            8
352..........................................................        1,138       4.2251            1            2            3            5            9
353..........................................................        2,814       5.7246            2            3            4            6           11
354..........................................................        7,329       5.4921            2            3            4            6           10
355..........................................................        4,668       2.9265            2            2            3            3            4
356..........................................................       21,423       1.8025            1            1            1            2            3
357..........................................................        5,260       7.8391            3            4            6            9           15
358..........................................................       19,769       3.8000            1            2            3            4            7
359..........................................................       26,817       2.2435            1            2            2            3            3
360..........................................................       13,806       2.3374            1            1            2            3            4
361..........................................................          268       3.0784            1            1            2            3            6
362..........................................................            2       1.5000            1            1            2            2            2
363..........................................................        1,809       4.1390            1            2            3            4            9
364..........................................................        1,660       3.9054            1            1            3            5            8
365..........................................................        1,529       7.8041            2            3            5           10           18
366..........................................................        4,716       6.2386            1            3            4            8           12
367..........................................................          440       3.0308            1            1            2            3            5
368..........................................................        4,146       6.5766            2            3            5            8           12
369..........................................................        3,707       3.1123            1            1            2            4            6
370..........................................................        2,429       5.2575            2            3            4            5            8
371..........................................................        2,869       3.3973            2            3            3            4            4
372..........................................................        1,493       3.2390            2            2            2            3            4
373..........................................................        5,378       2.3207            1            2            2            3            3
374..........................................................          123       2.8537            1            2            2            3            5
375..........................................................           10       5.8000            2            3            4            8            9
376..........................................................          499       3.5524            1            2            2            4            7
377..........................................................           88       5.6782            1            2            3            6           11
378..........................................................          181       2.0608            1            1            2            3            3
379..........................................................          497       2.7591            1            1            2            3            5
380..........................................................          107       2.6449            1            1            1            2            4

[[Page 48113]]

 
381..........................................................          188       2.6330            1            1            1            2            6
382..........................................................           50       2.6600            1            1            1            1            3
383..........................................................        3,082       3.8501            1            1            3            4            7
384..........................................................          129       2.7752            1            1            1            2            5
386..........................................................            1      65.0000           65           65           65           65           65
389..........................................................            1       7.0000            7            7            7            7            7
392..........................................................        1,943       9.1889            2            4            6           11           20
394..........................................................        2,707       6.9819            1            2            5            9           15
395..........................................................      102,692       4.0561            1            2            3            5            8
396..........................................................           15       3.0667            1            2            2            3            6
397..........................................................       15,199       5.1973            1            2            4            6           10
398..........................................................        6,435       5.2248            1            2            4            7           10
399..........................................................        1,003       3.1210            1            1            2            4            6
401..........................................................        6,358      10.9924            2            5            9           14           22
402..........................................................        1,191       3.9840            1            1            3            5            8
403..........................................................       30,729       7.8057            2            3            6           10           16
404..........................................................        3,414       3.9800            1            2            3            5            8
406..........................................................        2,211       9.6383            2            4            7           12           20
407..........................................................          558       3.3986            1            2            3            4            6
408..........................................................        1,918       8.5727            1            2            5           10           19
409..........................................................        1,515       5.9874            1            3            4            6           12
410..........................................................       28,076       3.7196            1            2            3            4            6
411..........................................................            3       5.0000            1            1            2           12           12
412..........................................................            8       3.0000            1            1            2            5            5
413..........................................................        4,931       6.7113            2            3            5            8           13
414..........................................................          456       3.6674            1            2            3            4            7
417..........................................................           35       6.2000            1            2            4            7           14
418..........................................................       29,523       6.0100            2            3            5            7           11
419..........................................................       17,335       4.2610            1            2            3            5            8
420..........................................................        2,722       3.0898            1            2            3            4            5
421..........................................................       11,518       4.1047            1            2            3            5            8
422..........................................................           55       3.4815            1            2            3            4            6
423..........................................................        9,086       8.0894            2            3            6           10           16
424..........................................................          985      11.3610            1            4            8           14           23
425..........................................................       10,770       3.2202            1            1            2            4            6
426..........................................................        5,083       4.1506            1            2            3            5            7
427..........................................................        1,825       4.4489            1            2            3            5            7
428..........................................................          841       7.4118            1            2            4            8           13
429..........................................................       23,577       5.4058            2            3            4            6            9
430..........................................................       83,653       7.6171            2            3            6            9           13
431..........................................................          414       5.9390            1            2            4            6            9
432..........................................................          446       4.5925            1            2            3            5            8
433..........................................................        5,079       2.9767            1            1            2            3            4
439..........................................................        1,771       8.8932            1            3            5            9           17
440..........................................................        4,836       8.1083            2            3            5            9           17
441..........................................................          754       3.2943            1            1            2            4            6
442..........................................................       18,906       8.6115            2            3            6           10           17
443..........................................................        3,296       3.3745            1            1            3            4            7
444..........................................................        5,837       4.0427            1            2            3            5            8
445..........................................................        2,126       2.6778            1            1            2            3            5
446..........................................................            1       1.0000            1            1            1            1            1
447..........................................................        6,374       2.5062            1            1            2            3            5
449..........................................................       42,610       3.6921            1            1            3            4            7
450..........................................................        7,159       1.9949            1            1            1            2            4
451..........................................................            2       4.0000            2            2            6            6            6
452..........................................................       29,623       4.8122            1            2            3            6            9
453..........................................................        5,106       2.8213            1            1            2            3            5
454..........................................................        4,544       4.0475            1            2            3            5            8
455..........................................................          803       2.4770            1            1            2            3            4
461..........................................................        2,236       5.6670            1            2            4            7           12
462..........................................................       10,305       9.4779            4            5            7            9           11
463..........................................................       33,817       3.8352            1            2            3            5            7
464..........................................................        7,616       2.9074            1            1            2            4            5
465..........................................................          193       3.1746            1            1            2            3            6
466..........................................................        1,183       3.9942            1            1            2            4            6
467..........................................................        1,019       3.7708            1            1            2            3            6
468..........................................................       52,003      12.1213            3            6            9           15           23
470..........................................................           19       3.3684            2            2            3            4            6
471..........................................................       15,412       4.5818            3            3            4            5            7
473..........................................................        8,326      11.7260            2            3            6           15           31

[[Page 48114]]

 
476..........................................................        2,617       9.4923            2            4            8           13           19
477..........................................................       26,701       8.6649            1            3            7           11           17
479..........................................................       28,698       2.2900            1            1            1            3            5
480..........................................................          930      19.3817            6            9           13           23           42
481..........................................................        1,389      21.8301           10           15           20           24           33
482..........................................................        4,742      11.2108            4            6            8           13           21
484..........................................................          457      12.2105            2            6           10           16           23
485..........................................................        3,773       9.4954            4            5            7           11           18
486..........................................................        2,851      12.6014            2            6           10           16           25
487..........................................................        5,168       6.6943            1            3            5            8           13
488..........................................................          839      16.9509            4            7           13           21           34
489..........................................................       13,781       8.2563            2            3            6           10           16
490..........................................................        5,119       5.2595            1            2            4            6           10
491..........................................................       23,975       2.9996            1            2            2            3            5
492..........................................................        3,954      13.6789            3            5            6           23           32
493..........................................................       60,423       5.9498            2            3            5            8           11
494..........................................................       22,581       2.7089            1            1            2            4            5
495..........................................................          378      17.2566            8           10           14           20           29
496..........................................................        4,285       8.4126            3            4            6           10           17
497..........................................................       32,795       5.5022            3            3            4            6            9
498..........................................................       22,332       3.5496            2            2            3            4            5
499..........................................................       34,590       4.0072            1            2            3            5            8
500..........................................................       44,952       2.0954            1            1            2            3            4
501..........................................................        3,051       9.3862            4            5            7           11           17
502..........................................................          694       5.4046            2            3            5            7            9
503..........................................................        5,501       3.8369            1            2            3            5            7
504..........................................................          188      28.7861            9           15           25           38           52
505..........................................................          160       5.9114            1            1            2            6           12
506..........................................................        1,000      14.8004            3            7           12           19           29
507..........................................................          280       7.3718            2            3            6           11           15
508..........................................................          563       7.3826            2            3            5            9           14
509..........................................................          146       4.6763            1            2            3            5            8
510..........................................................        1,721       6.0481            1            2            4            7           12
511..........................................................          510       3.8270            1            1            3            5            8
512..........................................................          583      11.8045            6            7            9           13           20
513..........................................................          182      10.4890            6            7            9           12           16
515..........................................................       57,972       3.5777            1            1            1            4            9
518..........................................................       25,043       2.4104            1            1            1            3            5
519..........................................................       14,023       4.5367            1            1            2            6           11
520..........................................................       17,615       1.8731            1            1            1            2            3
521..........................................................       33,931       5.3752            1            2            4            6            8
522..........................................................        5,512      10.5479            3            4            5            7            9
523..........................................................       15,764       3.7672            1            2            3            4            5
524..........................................................      104,648       3.0672            1            2            3            4            6
525..........................................................          154      12.0260            1            2            7           16           34
528..........................................................        1,731      16.5380            5            9           15           21           29
529..........................................................        5,136       6.8812            1            2            4            8           16
530..........................................................        3,247       2.8688            1            1            2            3            5
531..........................................................        5,321       9.2281            2            3            7           12           19
532..........................................................        3,018       3.6205            1            1            3            5            7
533..........................................................       40,612       3.5337            1            1            2            4            8
534..........................................................       34,525       1.6712            1            1            1            2            3
535..........................................................        8,653       8.7874            2            4            7           11           17
536..........................................................        7,826       7.1736            2            3            6            9           14
537..........................................................        9,526       6.5102            1            3            5            8           13
538..........................................................        5,106       2.8812            1            1            2            4            6
539..........................................................        4,776      10.5928            2            3            7           14           23
540..........................................................        1,424       3.4040            1            1            2            4            7
541..........................................................       24,418      40.6333           16           23           34           49           71
542..........................................................       22,162      29.3309           11           17           24           35           50
543..........................................................        5,726      11.3068            2            4            9           15           23
544..........................................................      444,140       4.3213            3            3            4            5            7
545..........................................................       44,068       5.0758            3            3            4            6            8
546..........................................................        3,637       7.8084            3            4            6            9           14
547..........................................................       29,849      12.1407            6            8           10           14           20
548..........................................................       26,598       8.6902            5            6            8           10           13
549..........................................................       12,969      10.1156            5            6            8           12           18
550..........................................................       29,780       6.6674            4            5            6            8           10
551..........................................................       51,330       6.0799            1            2            5            8           12
552..........................................................       78,735       3.3420            1            1            2            4            7

[[Page 48115]]

 
553..........................................................       44,667       8.8671            1            3            7           12           18
554..........................................................       78,338       5.1191            1            2            3            7           11
555..........................................................       37,904       4.6521            1            2            3            6            9
556..........................................................       17,924       1.9017            1            1            1            2            4
557..........................................................      129,504       3.9574            1            2            3            5            8
558..........................................................      185,260       1.7497            1            1            1            2            3
559..........................................................        4,850       6.8469            2            4            5            8           13
560..........................................................        3,401      10.0047            3            5            8           13           19
561..........................................................        2,983       9.4530            3            5            8           12           18
562..........................................................       53,381       4.7061            1            2            4            6            9
563..........................................................       20,263       3.1483            1            2            3            4            6
564..........................................................       16,650       3.3843            1            2            3            4            6
565..........................................................       46,695      14.9666            6            9           13           18           25
566..........................................................       80,036       7.2764            1            3            6           10           14
567..........................................................       10,028      15.6091            6            8           12           19           29
568..........................................................       16,182      11.0602            2            5            8           14           22
569..........................................................       59,084      14.2085            5            8           12           18           26
570..........................................................       69,076       9.8967            4            6            8           12           18
571..........................................................       11,056       4.8116            2            2            4            6            9
572..........................................................       55,040       6.9411            2            3            5            8           13
573..........................................................        6,500      10.8933            4            6            8           12           19
574..........................................................       27,832       5.7540            2            3            4            7           11
575..........................................................       13,964      15.2777            6            8           13           19           26
576..........................................................      297,949       7.1004            2            3            6            9           14
577..........................................................       11,261       2.3454            1            1            1            2            5
578..........................................................       39,116      15.6778            5            8           12           19           29
579..........................................................       19,915      10.6805            3            5            8           13           21
                                                                11,792,587  ...........  ...........  ...........  ...........  ...........  ...........
--------------------------------------------------------------------------------------------------------------------------------------------------------


        Table 7B.--Medicare Prospective Payment System Selected Pecentile Lengths of Stay FY 2006 MedPar Update March 2007 Grouper V25.0 MS-DRGs
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                Number of    Arithmetic      10th         25th         50th         75th         90th
                             DRG                                discharges    mean LOS    percentile   percentile   percentile   percentile   percentile
--------------------------------------------------------------------------------------------------------------------------------------------------------
1............................................................          652      45.5567           10           18           32           57           96
2............................................................          336      22.8304            8           10           15           27           46
3............................................................       24,550      40.6297           16           23           34           49           71
4............................................................       22,030      29.2666           11           17           24           35           50
5............................................................          634      23.5221            7           10           17           29           51
6............................................................          296      10.5135            6            7            9           12           17
7............................................................          378      17.2566            8           10           14           20           29
8............................................................          583      11.8045            6            7            9           13           20
9............................................................        1,389      21.8301           10           15           20           24           33
10...........................................................          182      10.4890            6            7            9           12           16
11...........................................................        1,301      16.1742            6            8           13           20           28
12...........................................................        1,961      10.9218            4            6            9           13           19
13...........................................................        1,480       7.2324            3            4            7            9           12
20...........................................................          910      19.0868            6           11           18           25           34
21...........................................................          571      15.4823            7           10           14           20           25
22...........................................................          250       9.6225            3            5            9           13           16
23...........................................................        3,571      12.7811            3            5           10           17           26
24...........................................................        2,177       8.8745            1            3            7           12           18
25...........................................................        8,513      13.3366            4            7           11           17           25
26...........................................................       12,081       8.1992            3            4            7           10           15
27...........................................................       14,221       4.6096            1            2            4            6            9
28...........................................................        1,633      14.6554            4            7           11           18           27
29...........................................................        3,097       7.3448            2            3            6           10           14
30...........................................................        3,609       3.7074            1            1            3            5            7
31...........................................................        1,062      13.1723            3            5           10           18           26
32...........................................................        3,069       5.7546            1            2            4            7           13
33...........................................................        4,254       3.0634            1            1            2            4            6
34...........................................................          825       7.2676            1            2            6           10           14
35...........................................................        2,918       2.9170            1            1            2            3            7
36...........................................................        7,515       1.5828            1            1            1            1            3
37...........................................................        4,807       8.6796            2            3            7           11           18
38...........................................................       16,551       3.6657            1            1            2            5            8
39...........................................................       53,705       1.8335            1            1            1            2            3
40...........................................................        4,593      13.6251            4            6           10           17           26

[[Page 48116]]

 
41...........................................................        8,017       7.3476            2            3            6            9           14
42...........................................................        5,229       3.5723            1            1            2            5            8
52...........................................................        1,200       7.0253            2            3            5            8           12
53...........................................................          593       3.9746            1            2            3            5            7
54...........................................................        4,763       7.2143            2            3            5            9           14
55...........................................................       16,986       5.0092            1            2            4            6           10
56...........................................................        8,007       7.7908            2            4            6            9           14
57...........................................................       51,293       4.9238            2            3            4            6            8
58...........................................................          798       8.0163            2            4            6            9           16
59...........................................................        2,687       5.2069            2            3            4            6            9
60...........................................................        4,254       4.0790            2            2            4            5            7
61...........................................................        1,374       9.6435            2            5            8           12           18
62...........................................................        2,325       6.3388            3            4            5            8           11
63...........................................................        1,151       4.5426            2            3            4            6            8
64...........................................................       56,608       7.6480            2            3            6           10           15
65...........................................................      115,679       5.2835            2            3            4            7            9
66...........................................................       91,935       3.7778            1            2            3            5            7
67...........................................................        1,409       6.2038            2            3            5            8           12
68...........................................................       12,587       3.5853            1            2            3            5            7
69...........................................................      104,648       3.0672            1            2            3            4            6
0............................................................        7,180       7.9051            2            4            6           10           15
71...........................................................       10,352       5.5978            2            3            4            7           10
72...........................................................        5,837       3.7341            1            2            3            5            7
73...........................................................        8,739       6.4320            2            3            5            8           13
74...........................................................       32,871       4.3650            1            2            3            5            8
75...........................................................        1,233       7.5899            3            4            6           10           14
76...........................................................          861       4.1754            2            2            3            5            8
77...........................................................        1,112       7.1772            2            3            6            9           14
78...........................................................        1,388       4.5779            2            2            4            6            8
79...........................................................          899       3.4370            1            2            3            4            6
80...........................................................        2,109       4.8807            1            2            4            6            9
81...........................................................        8,355       3.4116            1            2            3            4            6
82...........................................................        1,675       6.4225            1            1            4            9           15
83...........................................................        2,083       5.2018            1            2            4            7           10
84...........................................................        2,538       3.0977            1            1            2            4            6
85...........................................................        5,392       7.9164            2            3            6           10           16
86...........................................................       10,952       5.0955            1            3            4            6            9
87...........................................................       11,869       3.3660            1            2            3            4            6
88...........................................................          732       6.1274            1            3            4            7           12
89...........................................................        2,839       3.7800            1            2            3            5            7
90...........................................................        3,290       2.4551            1            1            2            3            5
91...........................................................        6,782       6.5786            2            3            5            8           13
92...........................................................       15,510       4.4400            1            2            4            5            8
93...........................................................       15,104       3.2086            1            2            3            4            6
94...........................................................        1,543      12.5251            4            7           11           16           23
95...........................................................        1,104       9.1098            3            5            8           12           16
96...........................................................          754       6.1680            2            3            5            8           11
97...........................................................        1,274      11.8508            4            6           10           16           22
98...........................................................        1,068       8.5052            3            5            7           11           15
99...........................................................          641       6.2684            2            3            5            8           11
100..........................................................       16,087       6.2910            2            3            5            8           12
101..........................................................       57,584       3.7147            1            2            3            5            7
102..........................................................        1,379       5.0736            1            2            3            6           10
103..........................................................       15,278       3.2312            1            2            3            4            6
113..........................................................          598       5.5321            1            2            4            7           11
114..........................................................          601       2.6588            1            1            2            3            5
115..........................................................        1,124       4.4811            1            2            4            5            8
116..........................................................          748       3.4154            1            1            2            4            6
117..........................................................        1,558       1.9488            1            1            1            1            2
121..........................................................          612       5.8164            2            3            5            7           11
122..........................................................          671       4.0511            1            2            3            5            7
123..........................................................        2,879       2.9292            1            2            2            4            5
124..........................................................          687       5.2617            1            2            4            6           10
125..........................................................        4,779       3.4889            1            2            3            4            7
129..........................................................        1,407       5.0928            1            2            4            6           10
130..........................................................        1,072       3.1502            1            1            2            4            6
131..........................................................          904       5.7709            1            2            4            7           11
132..........................................................          918       2.6312            1            1            2            3            5
133..........................................................        2,062       5.8060            1            2            4            7           12
134..........................................................        3,797       2.1470            1            1            1            2            4

[[Page 48117]]

 
135..........................................................          431       6.4419            1            2            5            8           13
136..........................................................          504       2.5516            1            1            1            3            6
137..........................................................          848       5.3554            1            2            4            7           11
138..........................................................          931       2.4391            1            1            2            3            5
139..........................................................        1,721       1.7952            1            1            1            2            3
146..........................................................          702      10.3233            2            4            7           13           19
147..........................................................        1,467       5.7570            1            2            4            7           11
148..........................................................          939       3.5184            1            1            2            4            7
149..........................................................       39,649       2.7318            1            1            2            3            5
150..........................................................          946       5.4508            1            2            4            7           11
151..........................................................        6,859       2.8897            1            1            2            4            5
152..........................................................        2,377       4.7012            1            2            4            6            9
153..........................................................       16,251       3.3586            1            2            3            4            6
154..........................................................        1,865       6.4604            2            3            5            8           12
155..........................................................        4,447       4.5269            1            2            4            6            8
156..........................................................        4,998       3.1613            1            2            3            4            6
157..........................................................        1,169       6.8720            2            3            5            9           14
158..........................................................        3,177       4.4338            1            2            3            6            8
159..........................................................        2,384       3.0715            1            1            2            4            6
163..........................................................       13,518      14.9887            5            8           13           19           27
164..........................................................       18,509       8.3443            3            5            7           10           15
165..........................................................       14,288       5.3509            2            3            5            7            9
166..........................................................       20,428      13.0045            4            7           10           16           24
167..........................................................       21,107       8.1304            3            4            7           10           15
168..........................................................        5,566       5.3600            1            2            4            7           10
175..........................................................       12,045       7.4063            3            4            6            9           13
176..........................................................       40,393       5.5083            2            4            5            7            9
177..........................................................       57,709       9.1913            3            5            8           12           17
178..........................................................       72,756       7.4385            3            4            6            9           13
179..........................................................       26,648       5.6435            2            3            5            7           10
180..........................................................       22,681       7.9583            2            4            6           10           15
181..........................................................       32,515       5.9571            2            3            5            8           12
182..........................................................        6,137       4.2633            1            2            3            6            8
183..........................................................        1,683       7.1768            2            4            6            9           14
184..........................................................        4,287       4.6476            2            3            4            6            8
185..........................................................        2,616       3.2524            1            2            3            4            6
186..........................................................        8,607       7.5299            2            4            6           10           14
187..........................................................       10,397       5.4614            2            3            4            7           11
188..........................................................        4,873       4.1095            1            2            3            5            8
189..........................................................      105,233       6.2370            2            3            5            8           11
190..........................................................       57,533       6.4769            2            3            5            8           12
191..........................................................      126,916       5.0839            2            3            4            6            9
192..........................................................      194,511       4.0376            2            2            3            5            7
193..........................................................       88,975       6.8748            2            4            6            9           13
194..........................................................      274,931       5.3303            2            3            5            7            9
195..........................................................      143,367       4.1461            2            2            4            5            7
196..........................................................        5,190       7.3424            2            4            6            9           14
197..........................................................        7,120       5.4098            2            3            5            7           10
198..........................................................        4,857       4.2758            1            2            4            5            8
199..........................................................        3,289       8.5018            3            4            7           11           16
200..........................................................        8,332       5.1418            1            2            4            7           10
201..........................................................        3,477       4.0916            1            2            3            5            8
202..........................................................       33,053       4.4693            2            2            4            6            8
203..........................................................       41,262       3.4712            1            2            3            4            6
204..........................................................       26,393       2.8814            1            1            2            4            5
205..........................................................        5,841       5.6256            1            3            4            7           11
206..........................................................       22,713       3.4881            1            2            3            4            7
207..........................................................       46,696      14.9666            6            9           13           18           25
208..........................................................       80,038       7.2763            1            3            6           10           14
215..........................................................          154      12.0260            1            2            7           16           34
216..........................................................        8,460      18.6820            8           11           16           23           32
217..........................................................        7,967      12.2103            6            8           11           15           20
218..........................................................        2,970       9.0567            5            6            8           11           14
219..........................................................       10,122      14.4709            6            8           11           18           27
220..........................................................       14,319       8.5997            5            6            7           10           14
221..........................................................        7,663       6.4206            4            5            6            7            9
222..........................................................        2,869      13.2588            5            7           11           17           24
223..........................................................        5,784       6.5683            1            3            6            9           12
224..........................................................        1,931      11.5132            4            6            9           14           22
225..........................................................        5,895       5.7509            2            3            5            7           11

[[Page 48118]]

 
226..........................................................        7,086       9.4049            1            3            8           13           19
227..........................................................       50,886       2.7659            1            1            1            3            7
228..........................................................        3,103      14.6322            6            8           12           18           26
229..........................................................        4,361       9.0317            4            6            8           11           15
230..........................................................        1,804       6.5506            3            4            6            8           11
231..........................................................        1,485      13.2042            5            7           11           16           24
232..........................................................        1,800       8.9917            5            6            8           11           14
233..........................................................       17,013      14.2907            7            9           12           17           24
234..........................................................       39,434       8.8844            5            6            8           10           13
235..........................................................        9,687      11.4952            5            7            9           14           21
236..........................................................       33,062       6.6047            4            5            6            8           10
237..........................................................       23,038      11.1783            2            5            9           14           22
238..........................................................       44,047       4.8558            1            2            4            7           10
239..........................................................       13,928      15.5736            5            8           12           19           29
240..........................................................       13,892      10.5067            3            6            8           13           19
241..........................................................        2,933       6.9207            3            4            6            8           13
242..........................................................       17,269       8.9297            3            4            7           11           17
243..........................................................       40,665       5.1161            1            2            4            7           10
244..........................................................       66,031       2.9236            1            1            2            4            6
245..........................................................        6,100       3.2570            1            1            2            4            7
246..........................................................       41,369       5.4900            1            2            4            7           12
247..........................................................      273,395       2.2293            1            1            1            3            5
248..........................................................        5,567       6.1648            1            2            5            8           13
249..........................................................       29,411       2.5265            1            1            2            3            5
250..........................................................        5,786       7.5358            1            3            6           10           15
251..........................................................       40,107       2.9564            1            1            2            4            6
252..........................................................       44,977       8.7562            1            3            6           12           19
253..........................................................       52,589       6.0291            1            2            4            8           13
254..........................................................       54,137       2.8061            1            1            2            4            6
255..........................................................        2,631       9.9444            2            4            8           13           19
256..........................................................        3,964       7.5188            2            4            6           10           14
257..........................................................          695       4.9395            1            2            4            7           10
258..........................................................          604       7.5710            2            3            6           10           15
259..........................................................        7,390       2.6352            1            1            2            3            6
260..........................................................          873      10.2099            2            4            8           13           21
261..........................................................        2,926       3.9415            1            1            3            5            8
262..........................................................        3,298       2.4562            1            1            2            3            5
263..........................................................          793       5.4823            1            1            4            8           12
264..........................................................       30,375       9.0225            1            3            6           12           19
280..........................................................       61,214       7.4518            2            4            6            9           14
281..........................................................       62,199       4.8944            2            3            4            6            9
282..........................................................       57,400       3.2473            1            1            3            4            6
283..........................................................       16,074       5.4700            1            1            3            7           12
284..........................................................        5,105       3.4644            1            1            2            4            7
285..........................................................        3,017       2.2286            1            1            1            3            5
286..........................................................       23,416       7.0662            2            3            6            9           14
287..........................................................      173,552       3.1960            1            1            2            4            6
288..........................................................        3,271      12.2393            4            7           10           15           22
289..........................................................        1,477       8.7390            3            5            7           11           15
290..........................................................          449       6.6540            2            3            5            8           12
291..........................................................      185,221       6.6250            2            3            5            8           13
292..........................................................      245,842       4.9694            2            3            4            6            9
293..........................................................      201,752       3.6863            1            2            3            5            6
294..........................................................        1,757       5.5435            2            3            5            7            9
295..........................................................        1,633       4.3838            2            3            4            6            7
296..........................................................        1,849       3.2595            1            1            1            4            8
297..........................................................          897       1.9406            1            1            1            2            4
298..........................................................          522       1.4489            1            1            1            1            2
299..........................................................       17,629       6.8540            2            3            6            9           13
300..........................................................       49,709       5.1087            2            3            4            7            9
301..........................................................       37,931       3.7859            1            2            3            5            7
302..........................................................        7,954       4.3585            1            2            3            5            8
303..........................................................       82,241       2.5502            1            1            2            3            5
304..........................................................        2,137       5.2303            1            2            4            7           10
305..........................................................       36,235       2.8712            1            1            2            4            5
306..........................................................        1,393       6.4830            2            3            5            8           12
307..........................................................        6,517       3.4997            1            2            3            4            7
308..........................................................       33,848       5.7543            1            3            4            7           11
309..........................................................       85,559       3.9165            1            2            3            5            7
310..........................................................      156,708       2.7567            1            1            2            4            5

[[Page 48119]]

 
311..........................................................       25,370       2.3401            1            1            2            3            4
312..........................................................      170,871       3.1499            1            2            3            4            6
313..........................................................      223,238       2.1145            1            1            2            3            4
314..........................................................       60,733       7.1134            2            3            5            9           14
315..........................................................       33,454       4.5725            1            2            4            6            9
316..........................................................       18,221       3.0111            1            1            2            4            6
326..........................................................       11,638      17.2269            6            9           14           22           32
327..........................................................       11,374      10.2860            3            6            9           13           19
328..........................................................        9,012       4.4444            1            2            3            6            9
329..........................................................       48,463      15.9021            6            9           13           20           29
330..........................................................       68,609       9.8383            4            6            8           12           17
331..........................................................       29,683       6.0198            3            4            5            7           10
332..........................................................        1,899      14.7387            6            8           12           18           26
333..........................................................        6,507       8.9062            4            6            8           10           15
334..........................................................        3,760       5.5993            2            4            5            7            9
335..........................................................        7,204      14.3612            6            8           12           18           25
336..........................................................       12,829       9.2615            3            5            8           12           16
337..........................................................        8,655       5.6547            1            3            5            8           11
338..........................................................        1,517      10.8864            4            6            9           14           19
339..........................................................        3,296       7.1173            3            4            6            9           12
340..........................................................        3,557       4.2751            2            2            4            6            7
341..........................................................          879       7.2608            2            3            5           10           15
342..........................................................        2,668       4.2975            1            2            3            6            8
343..........................................................        6,825       2.2682            1            1            2            3            4
344..........................................................          899      12.0022            4            6            9           15           23
345..........................................................        3,098       7.2494            3            4            6            9           12
346..........................................................        2,766       4.9869            2            3            5            6            8
347..........................................................        1,577       8.3621            2            4            7           11           16
348..........................................................        4,310       5.4832            1            2            4            7           11
349..........................................................        5,554       3.0422            1            1            2            4            6
350..........................................................        1,802       8.0522            2            4            6           11           16
351..........................................................        4,671       4.5384            1            2            4            6            9
352..........................................................        8,873       2.4406            1            1            2            3            5
353..........................................................        3,082       8.7554            2            4            7           11           17
354..........................................................        9,068       5.0871            1            3            4            7            9
355..........................................................       16,686       2.8741            1            1            2            4            5
356..........................................................        8,432      13.2866            3            6           10           17           26
357..........................................................        8,349       8.0433            2            4            6           10           16
358..........................................................        2,482       4.5864            1            2            4            6            9
368..........................................................        3,078       6.6334            2            3            5            8           13
369..........................................................        4,865       4.5727            2            3            4            6            8
370..........................................................        3,113       3.3837            1            2            3            4            6
371..........................................................       16,988       8.7626            3            4            7           11           17
372..........................................................       23,793       6.8007            2            4            6            8           13
373..........................................................       14,261       5.0064            2            3            4            6            9
374..........................................................        9,560       8.8091            2            4            7           11           17
375..........................................................       20,262       6.0325            2            3            5            8           11
376..........................................................        4,554       4.0862            1            2            3            5            8
377..........................................................       50,940       6.4763            2            3            5            8           12
378..........................................................      119,194       4.4546            2            3            4            6            8
379..........................................................       95,794       3.4227            1            2            3            4            6
380..........................................................        2,940       7.2202            2            4            5            9           14
381..........................................................        5,711       5.1154            2            3            4            6            9
382..........................................................        4,694       3.6166            1            2            3            5            6
383..........................................................        1,311       5.8562            2            3            5            7           11
384..........................................................        8,755       3.8483            1            2            3            5            7
385..........................................................        2,119       9.0047            3            4            7           11           18
386..........................................................        7,460       5.7384            2            3            5            7           11
387..........................................................        5,117       4.4158            2            2            4            6            8
388..........................................................       18,446       7.4271            2            3            6            9           14
389..........................................................       47,969       5.0467            2            3            4            6            9
390..........................................................       47,176       3.5860            1            2            3            4            6
391..........................................................       47,998       5.4705            2            2            4            7           11
392..........................................................      309,576       3.5460            1            2            3            4            7
393..........................................................       24,127       6.9736            2            3            5            9           14
394..........................................................       48,220       4.8901            1            2            4            6            9
395..........................................................       24,889       3.3693            1            2            3            4            6
405..........................................................        3,961      17.3051            5            8           13           22           34
406..........................................................        5,427       9.4785            2            5            8           12           18
407..........................................................        2,201       5.4683            1            3            5            7           10

[[Page 48120]]

 
408..........................................................        1,686      15.0856            6            8           12           19           28
409..........................................................        1,775       9.9041            4            6            8           12           17
410..........................................................          696       6.8038            3            4            6            8           11
411..........................................................          986      13.1239            5            7           11           16           23
412..........................................................        1,100       8.8135            4            5            8           11           15
413..........................................................          855       6.0458            2            4            5            8           10
414..........................................................        5,653      11.8583            5            7           10           15           21
415..........................................................        7,175       7.6965            3            5            7            9           13
416..........................................................        6,049       4.8541            2            3            4            6            8
417..........................................................       16,760       8.4056            3            4            7           10           16
418..........................................................       28,699       5.6203            2            3            5            7           10
419..........................................................       37,545       3.1565            1            1            3            4            6
420..........................................................          739      14.2182            3            6           11           18           27
421..........................................................        1,120       7.8479            2            3            6           10           16
422..........................................................          362       4.4680            1            2            4            6            8
423..........................................................        1,536      15.5134            4            7           12           20           29
424..........................................................          939      10.2495            3            5            8           13           19
425..........................................................          150       5.6149            1            3            5            7           10
432..........................................................       16,502       6.8906            2            3            5            8           13
433..........................................................        9,190       4.8530            1            2            4            6            9
434..........................................................          951       3.5768            1            2            3            5            6
435..........................................................       12,049       7.6790            2            3            6           10           15
436..........................................................       14,223       5.8718            2            3            5            8           11
437..........................................................        4,332       4.3679            1            2            3            6            9
438..........................................................       14,544       7.7403            2            3            6           10           16
439..........................................................       26,026       5.4173            2            3            4            7           10
440..........................................................       26,628       3.8636            1            2            3            5            7
441..........................................................       14,101       7.0004            2            3            5            9           14
442..........................................................       13,238       5.1119            2            3            4            6           10
443..........................................................        6,508       3.8369            1            2            3            5            7
444..........................................................       12,603       6.6379            2            3            5            8           13
445..........................................................       17,466       4.7804            2            2            4            6            9
446..........................................................       16,635       3.3170            1            2            3            4            6
453..........................................................          854      15.9027            6            8           13           20           28
454..........................................................        1,710       8.3647            3            4            6           10           15
455..........................................................        1,721       4.7391            2            3            4            6            8
456..........................................................          772      15.8846            5            7           12           19           30
457..........................................................        2,089       7.8140            3            4            6            9           14
458..........................................................        1,289       4.6337            2            3            4            6            7
459..........................................................        3,217       9.6149            4            5            7           11           18
460..........................................................       51,397       4.3318            2            3            4            5            7
461..........................................................        1,073       8.4762            4            5            7            9           15
462..........................................................       14,339       4.2905            3            3            4            5            7
463..........................................................        5,325      16.8522            5            7           12           21           33
464..........................................................        6,596      10.3724            3            5            8           13           20
465..........................................................        2,753       6.1608            1            3            5            8           12
466..........................................................        3,917       9.4940            3            5            7           11           18
467..........................................................       14,368       5.6062            3            3            4            6            9
468..........................................................       21,516       4.0483            3            3            4            5            6
469..........................................................       29,924       8.4449            3            5            7           10           15
470..........................................................      414,313       4.0233            3            3            4            4            6
471..........................................................        2,244      10.1173            2            4            8           13           20
472..........................................................        6,654       4.3227            1            1            3            6           10
473..........................................................       22,740       1.9847            1            1            1            2            4
474..........................................................        2,864      12.5383            4            6           10           16           24
475..........................................................        3,719       8.5570            3            4            7           11           16
476..........................................................        1,566       4.9635            1            2            4            6           10
477..........................................................        2,264      12.5080            4            6           10           15           23
478..........................................................        7,389       6.8456            1            3            6            9           14
479..........................................................       10,143       2.8312            1            1            1            4            7
480..........................................................       26,057       9.4641            4            5            8           11           17
481..........................................................       74,787       5.9956            3            4            5            7            9
482..........................................................       49,933       4.8792            3            4            4            6            7
483..........................................................        6,585       4.3756            2            2            3            5            8
484..........................................................       17,391       2.4770            1            2            2            3            4
485..........................................................        1,157      12.4541            5            7           10           15           23
486..........................................................        2,070       8.1209            3            5            7           10           14
487..........................................................        1,350       5.7587            3            4            5            7           10
488..........................................................        2,548       5.0916            2            3            4            6            9
489..........................................................        6,227       3.0966            1            2            3            4            5

[[Page 48121]]

 
490..........................................................       21,725       4.7077            1            2            3            6           10
491..........................................................       57,817       2.2583            1            1            2            3            4
492..........................................................        4,772       8.7485            3            5            7           11           16
493..........................................................       16,865       5.3415            2            3            4            7            9
494..........................................................       29,549       3.3618            1            2            3            4            6
495..........................................................        1,895      11.0768            3            5            8           14           21
496..........................................................        5,514       5.9973            2            3            5            8           11
497..........................................................        7,223       3.1410            1            1            2            4            6
498..........................................................        1,262       8.2075            2            3            6           10           15
499..........................................................        1,176       3.1422            1            1            2            4            6
500..........................................................        1,364      11.2693            3            5            8           14           21
501..........................................................        3,962       5.9171            2            3            5            7           12
502..........................................................        6,678       2.9232            1            1            2            3            6
503..........................................................          745       8.8694            2            4            7           11           17
504..........................................................        2,281       6.4435            2            3            5            8           12
505..........................................................        3,170       3.3561            1            1            3            4            7
506..........................................................          932       3.2432            1            1            2            4            7
507..........................................................          841       5.1726            1            2            4            6           10
508..........................................................        2,736       2.0217            1            1            2            2            4
509..........................................................          681       2.8383            1            1            2            3            6
510..........................................................          996       6.6087            2            3            5            8           12
511..........................................................        4,189       3.9410            1            2            3            5            7
512..........................................................       12,149       2.1159            1            1            2            3            4
513..........................................................        1,110       5.1250            1            2            4            7           10
514..........................................................        1,187       2.5940            1            1            2            3            5
515..........................................................        3,603      10.8592            3            5            9           14           20
516..........................................................       11,526       5.9497            1            3            5            8           11
517..........................................................       17,984       2.8981            1            1            2            4            7
533..........................................................          840       6.8864            2            3            5            9           13
534..........................................................        3,667       4.0041            1            2            3            5            7
535..........................................................        6,910       6.3778            2            3            5            8           12
536..........................................................       34,621       3.9732            1            3            3            5            7
537..........................................................          696       4.6657            2            3            4            6            8
538..........................................................        1,140       3.1150            1            2            3            4            5
539..........................................................        3,422      10.2180            3            5            8           12           19
540..........................................................        4,343       7.2446            3            4            6            9           13
541..........................................................        1,809       5.6586            2            3            5            7           10
542..........................................................        6,210       8.7037            3            4            7           11           17
543..........................................................       18,875       5.9810            2            3            5            7           11
544..........................................................       12,411       4.4645            2            3            4            6            8
545..........................................................        4,078       9.0047            2            4            7           11           18
546..........................................................        6,186       5.5263            2            3            4            7           10
547..........................................................        4,746       3.9204            1            2            3            5            7
548..........................................................          597       9.3137            3            4            7           11           17
549..........................................................        1,151       6.2279            2            3            5            8           11
550..........................................................          868       4.5088            1            3            4            6            8
551..........................................................        9,600       7.2310            2            3            6            9           14
552..........................................................       88,827       4.1724            1            2            3            5            7
553..........................................................        2,835       6.0790            2            3            5            7           11
554..........................................................       20,589       3.7203            1            2            3            5            7
555..........................................................        2,011       4.9083            1            2            4            6           10
556..........................................................       19,394       3.1832            1            2            3            4            6
557..........................................................        3,207       6.9418            2            4            6            8           13
558..........................................................       14,373       4.2654            2            2            4            5            7
559..........................................................        1,658       7.3092            2            3            5            9           14
560..........................................................        4,230       4.7453            1            2            4            6            9
561..........................................................        7,478       2.7344            1            1            2            3            5
562..........................................................        5,065       6.5166            2            3            5            8           12
563..........................................................       36,518       3.7146            1            2            3            4            6
564..........................................................        1,633       7.1141            2            3            5            9           14
565..........................................................        3,411       5.1043            2            3            4            6            9
566..........................................................        2,695       3.7195            1            2            3            5            7
573..........................................................        5,730      13.8472            4            6           10           16           28
574..........................................................       12,495       9.5050            3            5            7           11           18
575..........................................................        6,238       5.9317            2            3            5            7           10
576..........................................................          563      12.1226            2            4            8           15           26
577..........................................................        2,311       6.0022            1            2            4            8           12
578..........................................................        3,238       3.4145            1            1            2            4            7
579..........................................................        3,366      11.0955            3            5            8           14           22
580..........................................................       11,047       5.4644            1            2            4            7           12

[[Page 48122]]

 
581..........................................................       12,294       2.5715            1            1            2            3            6
582..........................................................        5,804       2.8655            1            1            2            3            6
583..........................................................        9,404       1.8207            1            1            1            2            3
584..........................................................          802       5.7129            1            2            4            8           12
585..........................................................        1,709       2.1908            1            1            1            2            4
592..........................................................        4,054       8.8697            3            4            7           11           16
593..........................................................       13,169       6.4859            2            4            5            8           11
594..........................................................        2,863       4.8992            2            3            4            6            9
595..........................................................        1,096       8.1848            2            4            6           10           16
596..........................................................        5,816       4.8319            2            2            4            6            9
597..........................................................          565       8.1924            2            3            6           10           14
598..........................................................        1,523       5.5806            2            3            4            7           10
599..........................................................          359       3.6082            1            1            3            4            6
600..........................................................          612       5.3781            2            3            4            7           10
601..........................................................          843       3.8038            1            2            3            5            7
602..........................................................       21,567       7.0322            2            4            6            9           13
603..........................................................      132,865       4.7352            2            3            4            6            8
604..........................................................        2,664       5.4212            1            3            4            7           10
605..........................................................       23,070       3.4788            1            2            3            4            6
606..........................................................        1,380       5.8848            1            2            4            7           11
607..........................................................        7,290       3.7550            1            2            3            5            7
614..........................................................        1,434       7.2972            2            3            5            8           14
615..........................................................        1,596       3.3733            1            2            3            4            6
616..........................................................        1,151      15.5480            6            8           13           19           27
617..........................................................        6,965       9.0012            3            5            8           11           16
618..........................................................          271       6.0970            2            3            5            8           11
619..........................................................          675       9.2815            3            4            6           10           21
620..........................................................        2,010       4.2210            2            2            3            5            7
621..........................................................        6,570       2.4256            1            1            2            3            4
622..........................................................        1,242      13.2047            4            6            9           16           27
623..........................................................        3,403       8.6979            3            5            7           10           15
624..........................................................          393       5.8852            2            3            5            7           10
625..........................................................        1,110       7.5343            2            2            5            9           17
626..........................................................        2,754       3.2536            1            1            2            4            7
627..........................................................       14,220       1.5421            1            1            1            2            2
628..........................................................        3,305      11.8138            2            4            9           15           24
629..........................................................        4,148       8.8483            3            5            7           11           16
630..........................................................          552       5.1379            1            2            4            7           10
637..........................................................       16,527       6.1871            2            3            5            7           12
638..........................................................       46,959       4.2747            1            2            3            5            8
639..........................................................       36,496       3.0760            1            2            3            4            6
640..........................................................       56,340       5.6229            1            2            4            7           11
641..........................................................      190,108       3.8600            1            2            3            5            7
642..........................................................        1,589       5.2780            1            2            4            6           10
643..........................................................        5,101       7.7768            2            4            6           10           15
644..........................................................       12,255       5.4336            2            3            4            7           10
645..........................................................        8,194       3.9185            1            2            3            5            7
652..........................................................       10,721       7.8878            4            5            6            9           13
653..........................................................        1,591      16.7536            6            9           13           20           31
654..........................................................        3,392      10.0608            5            7            8           12           17
655..........................................................        1,517       6.5971            3            4            7            8           10
656..........................................................        3,746      10.7713            4            5            8           13           21
657..........................................................        7,960       6.0560            3            4            5            7           10
658..........................................................        7,978       3.8343            2            3            4            5            6
659..........................................................        4,490      11.3196            3            5            8           14           22
660..........................................................        8,000       6.5269            2            3            5            8           13
661..........................................................        4,278       3.3237            1            2            3            4            6
662..........................................................        1,007      10.5180            2            4            8           13           21
663..........................................................        2,297       5.2587            1            2            4            7           11
664..........................................................        4,568       2.0629            1            1            1            2            4
665..........................................................          693      12.1688            3            6           10           15           22
666..........................................................        2,406       6.3360            1            2            4            9           14
667..........................................................        3,777       2.6993            1            1            2            3            6
668..........................................................        3,775       8.6210            2            4            7           11           17
669..........................................................       13,328       4.3579            1            2            3            6            9
670..........................................................       12,728       2.4749            1            1            2            3            5
671..........................................................          918       5.7961            1            2            4            8           12
672..........................................................          943       2.4862            1            1            2            3            5
673..........................................................       12,702      10.1687            1            3            7           13           22
674..........................................................       13,867       6.5518            1            2            4            9           14

[[Page 48123]]

 
675..........................................................        8,401       1.9467            1            1            1            2            4
682..........................................................       76,732       7.3062            2            3            6            9           14
683..........................................................      128,569       5.6890            2            3            5            7           10
684..........................................................       28,562       3.8061            1            2            3            5            7
685..........................................................        2,527       3.4998            1            1            2            4            7
686..........................................................        1,602       8.0589            2            4            6           10           15
687..........................................................        3,478       5.2671            1            2            4            7           10
688..........................................................        1,109       3.2229            1            1            2            4            6
689..........................................................       56,092       6.3682            2            3            5            8           12
690..........................................................      202,328       4.2998            2            2            4            5            8
691..........................................................          910       4.1474            1            2            3            5            9
692..........................................................          655       2.2508            1            1            2            3            4
693..........................................................        2,262       5.1834            1            2            4            7           10
694..........................................................       19,406       2.5707            1            1            2            3            5
695..........................................................          992       5.7202            2            3            4            7           11
696..........................................................       10,693       3.2297            1            2            3            4            6
697..........................................................          588       3.3111            1            1            2            4            6
698..........................................................       21,307       6.7858            2            3            5            8           13
699..........................................................       27,179       4.8652            1            2            4            6            9
700..........................................................       11,199       3.4601            1            2            3            4            7
707..........................................................        6,060       4.5306            2            2            3            5            8
708..........................................................       16,051       2.3801            1            1            2            3            4
709..........................................................          796       6.4598            1            1            3            8           15
710..........................................................        2,019       1.8983            1            1            1            2            3
711..........................................................          956       7.8312            1            3            6           10           16
712..........................................................          798       2.9533            1            1            2            3            7
713..........................................................       12,037       4.1562            1            2            3            5            9
714..........................................................       32,775       1.9941            1            1            2            2            3
715..........................................................          665       6.0695            1            2            4            8           14
716..........................................................        1,378       1.4989            1            1            1            1            2
717..........................................................          671       7.5195            1            3            5            9           15
718..........................................................          604       2.6794            1            1            2            3            5
722..........................................................          887       7.4415            2            3            6            9           14
723..........................................................        2,096       5.3802            2            3            4            7           10
724..........................................................          657       3.3380            1            1            3            4            6
725..........................................................          814       5.6609            2            3            4            7           11
726..........................................................        3,986       3.5251            1            2            3            4            6
727..........................................................        1,111       6.5452            2            3            5            8           12
728..........................................................        6,264       4.0490            1            2            3            5            7
729..........................................................          604       5.1327            1            2            4            7           10
730..........................................................          537       3.1857            1            1            2            4            6
734..........................................................        1,530       7.5975            3            4            5            9           15
735..........................................................        1,284       3.4875            1            2            3            4            6
736..........................................................          847      13.9062            5            8           12           17           25
737..........................................................        3,495       7.3976            3            4            6            9           13
738..........................................................          918       3.9344            2            3            4            5            6
739..........................................................          981      10.2071            4            5            7           13           20
740..........................................................        4,653       5.1719            2            3            4            6            9
741..........................................................        6,363       3.1178            2            2            3            4            5
742..........................................................       11,722       4.5771            2            2            3            5            8
743..........................................................       34,864       2.3419            1            2            2            3            3
744..........................................................        1,639       5.7572            1            2            4            7           12
745..........................................................        2,100       2.5449            1            1            2            3            5
746..........................................................        2,675       4.0979            1            2            3            5            8
747..........................................................       11,131       1.9143            1            1            2            2            3
748..........................................................       21,423       1.8025            1            1            1            2            3
749..........................................................        1,050       9.8475            2            4            7           13           21
750..........................................................          479       3.3103            1            2            3            4            6
754..........................................................        1,102       8.8578            2            4            6           11           18
755..........................................................        3,248       5.6431            1            2            4            7           11
756..........................................................          806       3.2886            1            1            2            4            6
757..........................................................        1,329       8.9057            3            4            7           11           17
758..........................................................        1,666       6.0838            2            3            5            7           11
759..........................................................        1,151       4.5863            2            2            4            6            8
760..........................................................        1,825       3.7577            1            2            3            5            7
761..........................................................        1,882       2.4767            1            1            2            3            5
765..........................................................        2,623       5.2840            2            3            4            5            8
766..........................................................        2,675       3.2388            2            2            3            4            4
767..........................................................          123       2.8537            1            2            2            3            5
768..........................................................           10       5.8000            2            3            4            8            9

[[Page 48124]]

 
769..........................................................           88       5.6782            1            2            3            6           11
770..........................................................          188       2.6330            1            1            1            2            6
774..........................................................        1,493       3.2390            2            2            2            3            4
775..........................................................        5,378       2.3207            1            2            2            3            3
776..........................................................          499       3.5524            1            2            2            4            7
777..........................................................          181       2.0608            1            1            2            3            3
778..........................................................          497       2.7591            1            1            2            3            5
779..........................................................          107       2.6449            1            1            1            2            4
780..........................................................           50       2.6600            1            1            1            1            3
781..........................................................        3,082       3.8501            1            1            3            4            7
782..........................................................          129       2.7752            1            1            1            2            5
790..........................................................            1      65.0000           65           65           65           65           65
793..........................................................            1       7.0000            7            7            7            7            7
799..........................................................          631      14.2979            4            7           11           19           28
800..........................................................          731       8.2312            3            4            6           10           17
801..........................................................          581       4.8451            2            2            4            6            9
802..........................................................          696      12.9164            3            6           10           16           26
803..........................................................        1,032       6.5325            1            3            5            8           13
804..........................................................          979       3.2444            1            1            2            4            7
808..........................................................        8,292       7.9993            2            4            6           10           15
809..........................................................       15,830       5.0060            2            2            4            6            9
810..........................................................        3,710       3.9202            1            2            3            5            7
811..........................................................       18,558       5.5472            1            2            4            7           11
812..........................................................       84,150       3.7268            1            2            3            5            7
813..........................................................       15,199       5.1973            1            2            4            6           10
814..........................................................        1,655       7.1680            2            3            5            9           15
815..........................................................        3,494       4.9013            1            2            4            6            9
816..........................................................        2,289       3.3961            1            2            3            4            6
820..........................................................        1,492      18.4047            5            8           14           24           36
821..........................................................        2,598       7.7857            1            3            6           10           16
822..........................................................        2,119       3.6957            1            1            3            5            8
823..........................................................        2,456      15.3824            5            8           13           19           28
824..........................................................        3,136       8.7831            2            4            7           12           17
825..........................................................        1,946       4.7330            1            2            3            6           10
826..........................................................          566      17.3852            5            8           13           22           34
827..........................................................        1,355       7.5495            2            4            6            9           15
828..........................................................          853       3.7051            1            2            3            5            7
829..........................................................        1,389      10.4658            2            4            7           14           22
830..........................................................          524       3.5462            1            1            2            4            7
834..........................................................        5,306      14.6560            2            4            9           23           35
835..........................................................        1,459       8.1996            1            3            5            9           20
836..........................................................        1,561       5.0528            1            2            3            6           10
837..........................................................        1,641      22.6943            5            9           23           30           39
838..........................................................          942       9.0446            3            4            5            7           25
839..........................................................        1,371       6.0687            3            4            5            6            8
840..........................................................       15,295       9.5887            2            4            7           12           20
841..........................................................       11,381       6.5776            2            3            5            8           13
842..........................................................        7,469       4.2783            1            2            3            6            8
843..........................................................        1,501       8.7016            2            4            7           11           17
844..........................................................        2,900       6.0297            2            3            5            8           12
845..........................................................          997       4.2753            1            2            3            5            8
846..........................................................        2,504       8.4896            2            3            5           10           19
847..........................................................       23,868       3.2756            1            2            3            4            6
848..........................................................        1,704       2.9316            1            1            2            4            5
849..........................................................        1,515       5.9874            1            3            4            6           12
853..........................................................       31,699      16.7841            5            8           13           21           31
854..........................................................        6,958      11.1833            4            6            9           14           20
855..........................................................          429       7.3077            2            4            6           10           14
856..........................................................        6,230      16.1966            5            7           12           20           32
857..........................................................       10,308       8.8878            3            4            7           11           17
858..........................................................        3,375       5.9762            2            3            5            7           11
862..........................................................        7,498       8.3120            2            4            6           10           16
863..........................................................       22,027       5.2255            2            3            4            7            9
864..........................................................       20,089       4.1010            1            2            3            5            7
865..........................................................        2,035       6.8455            2            3            5            8           14
866..........................................................        9,506       3.5183            1            2            3            4            6
867..........................................................        5,408       9.8846            3            4            7           13           19
868..........................................................        2,523       5.9071            2            3            5            7           10
869..........................................................        1,155       4.3735            2            2            3            5            8
870..........................................................       13,968      15.2784            6            8           13           19           26

[[Page 48125]]

 
871..........................................................      205,298       7.6922            2            4            6           10           15
872..........................................................       92,712       5.7913            2            3            5            7           10
876..........................................................          981      11.3738            1            4            8           14           23
880..........................................................       10,771       3.2201            1            1            2            4            6
881..........................................................        5,083       4.1506            1            2            3            5            7
882..........................................................        1,825       4.4489            1            2            3            5            7
883..........................................................          841       7.4118            1            2            4            8           13
884..........................................................       23,580       5.4065            2            3            4            6            9
885..........................................................       83,653       7.6171            2            3            6            9           13
886..........................................................          414       5.9390            1            2            4            6            9
887..........................................................          446       4.5925            1            2            3            5            8
894..........................................................        5,079       2.9767            1            1            2            3            4
895..........................................................       10,306      10.5223            3            4            6            8            9
896..........................................................        5,570       6.6093            2            3            5            8           12
897..........................................................       39,332       4.1198            1            2            3            5            6
901..........................................................          925      14.4242            3            5            9           17           30
902..........................................................        2,220       7.9436            2            3            6            9           16
903..........................................................        1,691       4.8673            1            2            4            6           10
904..........................................................          984      12.2029            2            4            7           13           22
905..........................................................          787       4.7253            1            2            4            6            8
906..........................................................          754       3.2943            1            1            2            4            6
907..........................................................        8,177      11.6843            3            5            8           14           24
908..........................................................        8,576       6.8610            2            3            5            8           13
909..........................................................        5,449       3.5868            1            1            3            5            7
913..........................................................          836       6.1739            2            3            5            8           12
914..........................................................        7,129       3.3884            1            2            3            4            6
915..........................................................          932       4.6541            1            2            3            6           10
916..........................................................        5,442       2.1384            1            1            2            3            4
917..........................................................       14,534       5.1977            1            2            4            6           11
918..........................................................       35,238       2.7248            1            1            2            3            5
919..........................................................       10,709       6.2394            1            3            4            8           13
920..........................................................       14,309       4.3065            1            2            3            5            8
921..........................................................        9,716       2.9383            1            1            2            4            5
922..........................................................        1,034       6.0448            1            2            4            8           13
923..........................................................        4,313       3.2778            1            1            2            4            6
927..........................................................          188      28.7861            9           15           25           38           52
928..........................................................          826      16.1693            4            8           13           20           31
929..........................................................          454       7.6987            2            3            6           11           15
933..........................................................          160       5.9114            1            1            2            6           12
934..........................................................          709       6.8459            1            3            5            8           13
935..........................................................        2,231       5.5423            1            2            4            7           11
939..........................................................          435      10.9206            2            4            8           14           22
940..........................................................          735       6.4044            1            3            5            8           14
941..........................................................        1,065       3.0321            1            1            2            4            6
945..........................................................        6,307      10.2789            4            6            8           11           14
946..........................................................        3,998       7.8844            3            5            6            7            8
947..........................................................        6,629       4.9880            1            2            4            6           10
948..........................................................       34,805       3.4130            1            2            3            4            6
949..........................................................          857       4.1317            1            1            2            4            7
950..........................................................          519       3.4320            1            1            2            4            5
951..........................................................        1,019       3.7708            1            1            2            3            6
955..........................................................          457      12.2105            2            6           10           16           23
956..........................................................        3,773       9.4954            4            5            7           11           18
957..........................................................        1,326      16.0023            2            7           13           20           30
958..........................................................        1,227      10.4857            3            6            9           13           19
959..........................................................          298       6.0949            2            3            5            8           10
963..........................................................        1,516       9.2677            1            4            7           13           19
964..........................................................        2,543       6.2813            2            3            5            8           11
965..........................................................        1,109       4.1285            1            2            3            5            8
969..........................................................          679      18.7115            5            8           14           23           37
970..........................................................          160       9.4654            2            4            7           12           20
974..........................................................        6,395      10.4471            2            4            7           13           21
975..........................................................        4,561       7.2542            2            3            5            9           14
976..........................................................        2,825       4.8614            1            2            4            6            8
977..........................................................        5,119       5.2595            1            2            4            6           10
981..........................................................       26,495      15.2659            5            8           12           19           28
982..........................................................       19,350       9.9611            3            5            8           13           19
983..........................................................        6,154       5.3856            1            2            4            7           11
984..........................................................          671      14.5768            5            8           13           18           27
985..........................................................        1,110       9.7085            2            5            9           13           18

[[Page 48126]]

 
986..........................................................          836       5.1092            1            2            3            7           11
987..........................................................        8,060      13.1893            4            6           11           17           25
988..........................................................       12,328       7.9772            2            4            7           10           15
989..........................................................        6,176       4.1332            1            1            3            6            9
999..........................................................           17       2.7333            1            2            8           18           24
                                                                11,795,587  ...........  ...........  ...........  ...........  ...........  ...........
--------------------------------------------------------------------------------------------------------------------------------------------------------


 Table 8A.--Statewide Average Operating Cost-to-Charge Ratios--July 2007
------------------------------------------------------------------------
                       State                          Urban      Rural
------------------------------------------------------------------------
Alabama...........................................      0.257      0.337
Alaska............................................      0.421      0.751
Arizona...........................................      0.282      0.404
Arkansas..........................................      0.333      0.356
California........................................      0.227      0.328
Colorado..........................................      0.289      0.443
Connecticut.......................................      0.411      0.526
Delaware..........................................      0.494      0.514
District of Columbia *............................      0.352  .........
Florida...........................................      0.244      0.287
Georgia...........................................      0.337      0.391
Hawaii............................................      0.376       0.45
Idaho.............................................      0.473      0.541
Illinois..........................................      0.312        0.4
Indiana...........................................      0.401      0.455
Iowa..............................................      0.369      0.448
Kansas............................................      0.292      0.438
Kentucky..........................................      0.376      0.375
Louisiana.........................................      0.301      0.355
Maine.............................................      0.492      0.466
Maryland..........................................      0.732      0.794
Massachusetts *...................................      0.475  .........
Michigan..........................................      0.369      0.457
Minnesota.........................................      0.384      0.524
Mississippi.......................................      0.308       0.37
Missouri..........................................      0.328       0.37
Montana...........................................      0.423       0.49
Nebraska..........................................      0.342      0.455
Nevada............................................      0.221      0.475
New Hampshire.....................................      0.453      0.465
New Jersey *......................................      0.183  .........
New Mexico........................................      0.383      0.376
New York..........................................      0.356      0.523
North Carolina....................................       0.43      0.414
North Dakota......................................       0.43      0.473
Ohio..............................................      0.354      0.531
Oklahoma..........................................      0.304      0.391
Oregon............................................      0.462      0.418
Pennsylvania......................................      0.271      0.428
Puerto Rico *.....................................      0.455  .........
Rhode Island *....................................      0.391  .........
South Carolina....................................      0.283      0.314
South Dakota......................................      0.346      0.441
Tennessee.........................................      0.306      0.379
Texas.............................................       0.26      0.344
Utah..............................................       0.42      0.566
Vermont...........................................       0.54      0.637
Virginia..........................................      0.361      0.364
Washington........................................      0.397      0.448
West Virginia.....................................      0.476      0.471
Wisconsin.........................................      0.425      0.475
Wyoming...........................................      0.431      0.571
------------------------------------------------------------------------
* All counties in the State or Territory are classified as urban, with
  the exception of Massachusetts, which has areas designated as rural.
  However, no short-term acute care IPPS hospitals are located in those
  areas as of July 2007.


  Table 8B.--Statewide Average Capital Cost-to-Charge Ratios--July 2007
------------------------------------------------------------------------
                            State                                Ratio
------------------------------------------------------------------------
Alabama......................................................      0.024
Alaska.......................................................      0.037
Arizona......................................................      0.024
Arkansas.....................................................      0.026
California...................................................      0.015
Colorado.....................................................      0.029
Connecticut..................................................      0.029
Delaware.....................................................      0.035
District of Columbia.........................................      0.023
Florida......................................................      0.023
Georgia......................................................      0.029
Hawaii.......................................................       0.03
Idaho........................................................      0.039
Illinois.....................................................      0.025
Indiana......................................................      0.037
Iowa.........................................................      0.029
Kansas.......................................................       0.03
Kentucky.....................................................      0.029
Louisiana....................................................      0.027
Maine........................................................      0.033
Maryland.....................................................      0.055
Massachusetts................................................      0.032
Michigan.....................................................      0.029
Minnesota....................................................      0.029
Mississippi..................................................      0.027
Missouri.....................................................      0.027
Montana......................................................      0.036
Nebraska.....................................................      0.039
Nevada.......................................................      0.022
New Hampshire................................................      0.035
New Jersey...................................................      0.013
New Mexico...................................................      0.032
New York.....................................................      0.028
North Carolina...............................................      0.036
North Dakota.................................................      0.039
Ohio.........................................................      0.029
Oklahoma.....................................................      0.029
Oregon.......................................................      0.033
Pennsylvania.................................................      0.022
Puerto Rico..................................................      0.034
Rhode Island.................................................       0.02
South Carolina...............................................      0.025
South Dakota.................................................      0.032
Tennessee....................................................       0.03
Texas........................................................      0.026
Utah.........................................................      0.035
Vermont......................................................      0.042
Virginia.....................................................      0.036
Washington...................................................      0.031
West Virginia................................................      0.033
Wisconsin....................................................      0.037
Wyoming......................................................      0.045
------------------------------------------------------------------------


Table 8C.--Statewide Average Total Cost-to-Charge Ratios for LTCHS--July
                                  2007
------------------------------------------------------------------------
                       State                          Urban      Rural
------------------------------------------------------------------------
Alabama...........................................      0.279      0.368
Alaska............................................      0.454      0.811
Arizona...........................................      0.306      0.435
Arkansas..........................................      0.356      0.388
California........................................      0.241      0.349
Colorado..........................................      0.316       0.49
Connecticut.......................................      0.439      0.574
Delaware..........................................      0.528      0.553
District of Columbia *............................      0.374  .........
Florida...........................................      0.266      0.318
Georgia...........................................      0.364      0.426
Hawaii............................................      0.404      0.487
Idaho.............................................      0.512      0.585
Illinois..........................................      0.337      0.432
Indiana...........................................      0.438      0.499
Iowa..............................................      0.393      0.488
Kansas............................................      0.318      0.479
Kentucky..........................................      0.405      0.405
Louisiana.........................................      0.328      0.383
Maine.............................................      0.526      0.495
Maryland **.......................................      0.444      0.347
Massachusetts *...................................      0.506
Michigan..........................................      0.398      0.491
Minnesota.........................................      0.411      0.564
Mississippi.......................................      0.334      0.399
Missouri..........................................      0.353      0.403
Montana...........................................      0.454      0.533
Nebraska..........................................      0.378      0.502
Nevada............................................      0.242      0.535
New Hampshire.....................................      0.487      0.502
New Jersey *......................................      0.197  .........
New Mexico........................................      0.415       0.41
New York..........................................      0.383      0.559
North Carolina....................................      0.466       0.45
North Dakota......................................      0.465       0.52
Ohio..............................................      0.381      0.572

[[Page 48127]]

 
Oklahoma..........................................      0.332      0.424
Oregon............................................      0.496      0.448
Pennsylvania......................................      0.292       0.46
Puerto Rico *.....................................      0.489  .........
Rhode Island *....................................      0.411  .........
South Carolina....................................      0.307      0.341
South Dakota......................................      0.375      0.479
Tennessee.........................................      0.336      0.412
Texas.............................................      0.285      0.375
Utah..............................................      0.453       0.62
Vermont...........................................      0.584      0.676
Virginia..........................................        0.4      0.401
Washington........................................      0.428       0.48
West Virginia.....................................      0.509      0.504
Wisconsin.........................................      0.462      0.516
Wyoming...........................................      0.467      0.626
------------------------------------------------------------------------
* All counties in the State or Territory are classified as urban, with
  the exception of Massachusetts, which has areas designated as rural.
  However, no short-term acute care IPPS hospitals or LTCHs are located
  in those areas as of July 2007.
** National average IPPS total cost-to-charge ratios, as discussed in
  section VI.E. of this final rule.


                        Table 9A.--Hospital Reclassifications and Redesignations--FY 2008
----------------------------------------------------------------------------------------------------------------
                                                                Reclassified
               Provider No.                  Geographic CBSA        CBSA                      LUGAR
----------------------------------------------------------------------------------------------------------------
010005....................................                01             26620
010009....................................             19460             26620
010010....................................                01             13820
010012....................................                01             40660
010022....................................                01             12060  LUGAR
010025....................................                01             17980
010029....................................             12220             17980
010035....................................                01             13820
010044....................................                01             13820
010045....................................                01             13820
010054....................................             19460             26620
010059....................................             19460             26620
010065....................................                01             13820
010083....................................                01             33660
010085....................................             19460             26620
010090....................................             33660             37700
010100....................................                01             37860
010101....................................                01             13820  LUGAR
010118....................................                01             46220
010126....................................                01             33860
010143....................................                01             13820
010150....................................                01             33860
010158....................................                01             19460
010164....................................                01             11500  LUGAR
020008....................................                02             11260
030007....................................             39140             22380  LUGAR
030033....................................                03             22380
030055....................................             29420             39140
030101....................................             29420             29820
040014....................................                04             30780
040017....................................                04             22220
040019....................................                04             32820
040020....................................             27860             32820
040027....................................                04             44180
040039....................................                04                26
040041....................................                04             30780
040069....................................                04             32820
040071....................................             38220             30780
040076....................................                04             30780  LUGAR
040080....................................                04             27860
040085....................................                04             32820
040088....................................                04             33740
040091....................................                04             45500
040100....................................                04             30780
040119....................................                04             30780
050006....................................                05             39820
050009....................................             34900             46700
050013....................................             34900             46700
050014....................................                05             40900
050022....................................             40140             42044
050042....................................                05             39820
050046....................................             37100             31084
050054....................................             40140             42044

[[Page 48128]]

 
050069....................................             42044             31084
050071....................................             41940             36084
050073....................................             46700             36084
050076....................................             41884             36084
050082....................................             37100             31084
050089....................................             40140             31084
050090....................................             42220             41884
050099....................................             40140             31084
050101....................................             46700             36084
050102....................................             40140             42044
050118....................................             44700             33700
050129....................................             40140             31084
050133....................................             49700             40900
050136....................................             42220             41884
050140....................................             40140             31084
050150....................................                05             40900
050159....................................             37100             31084
050168....................................             42044             31084
050173....................................             42044             31084
050174....................................             42220             41884
050193....................................             42044             31084
050197....................................             41884             36084
050224....................................             42044             31084
050226....................................             42044             31084
050230....................................             42044             31084
050236....................................             37100             31084
050243....................................             40140             42044
050245....................................             40140             31084
050272....................................             40140             31084
050279....................................             40140             31084
050291....................................             42220             41884
050292....................................             40140             42044
050298....................................             40140             31084
050300....................................             40140             31084
050301....................................                05             42220
050327....................................             40140             31084
050329....................................             40140             42044
050348....................................             42044             31084
050367....................................             46700             36084
050385....................................             42220             41884
050390....................................             40140             42044
050394....................................             37100             31084
050423....................................             40140             42044
050426....................................             42044             31084
050476....................................                05             42220
050494....................................                05             40900
050510....................................             41884             36084
050517....................................             40140             31084
050526....................................             42044             31084
050534....................................             40140             42044
050541....................................             41884             36084
050543....................................             42044             31084
050547....................................             42220             41884
050548....................................             42044             31084
050549....................................             37100             31084
050551....................................             42044             31084
050567....................................             42044             31084
050570....................................             42044             31084
050573....................................             40140             42044
050580....................................             42044             31084
050584....................................             40140             31084
050586....................................             40140             31084
050589....................................             42044             31084
050603....................................             42044             31084
050609....................................             42044             31084
050616....................................             37100             31084
050667....................................             34900             46700
050678....................................             42044             31084
050680....................................             46700             36084
050684....................................             40140             42044
050686....................................             40140             42044

[[Page 48129]]

 
050690....................................             42220             41884
050693....................................             42044             31084
050694....................................             40140             42044
050701....................................             40140             42044
050709....................................             40140             31084
050720....................................             42044             31084
050749....................................             37100             31084
060001....................................             24540             19740
060003....................................             14500             19740
060012....................................             39380             17820  ................................
060023....................................             24300             19740
060027....................................             14500             19740
060049....................................                06             22660
060075....................................                06             24300
060096....................................                06             19740
060103....................................             14500             19740
060116....................................             14500             19740
070001....................................             35300             35004
070003....................................                07             25540  LUGAR
070004....................................                07             25540  ................................
070005....................................             35300             35004
070006....................................             14860             35644
070010....................................             14860             35644
070011....................................                07             25540  ................................
070015....................................             25540             35644
070016....................................             35300             35004
070017....................................             35300             35004
070018....................................             14860             35644
070019....................................             35300             35004
070022....................................             35300             35004
070028....................................             14860             35644
070031....................................             35300             35004
070033....................................             14860             35644
070034....................................             14860             35644
070036....................................             25540             35300
070038....................................             35300             35004
070039....................................             35300             35004
080001....................................             48864             37964
080003....................................             48864             37964
080004....................................             20100             48864
080006....................................                08             20100
080007....................................                08             36140
090011....................................             47894             13644
100002....................................             48424             22744
100014....................................             19660             36740
100017....................................             19660             36740
100022....................................             33124             22744
100023....................................                10             36740
100024....................................                10             33124
100045....................................             19660             36740
100047....................................             39460             42260
100049....................................                10             29460
100068....................................             19660             36740
100072....................................             19660             36740
100077....................................             39460             42260
100080....................................             48424             22744
100081....................................                10             23020  LUGAR
100105....................................             42680             38940
100109....................................                10             36740
100118....................................             37380             27260
100130....................................             48424             22744
100139....................................                10             23540  LUGAR
100150....................................                10             33124
100156....................................                10             23540
100157....................................             29460             45300
100168....................................             48424             22744
100176....................................             48424             22744
100217....................................             42680             38940
100232....................................                10             23540
100234....................................             48424             22744
100236....................................             39460             42260

[[Page 48130]]

 
100239....................................             45300             42260
100249....................................                10             45300
100252....................................                10             42680
100253....................................             48424             22744
100258....................................             48424             22744
100268....................................             48424             22744
100269....................................             48424             22744
100275....................................             48424             22744
100287....................................             48424             22744
100288....................................             48424             22744
100292....................................                10             23020  LUGAR
110002....................................                11             12060
110016....................................                11             17980
110023....................................                11             12060
110029....................................             23580             12060
110038....................................                11             45220
110040....................................                11             12060  LUGAR
110041....................................                11             12060
110054....................................             40660             12060
110069....................................             47580             31420
110075....................................                11             42340
110095....................................                11             10500
110121....................................                11             45220
110122....................................             46660             45220
110125....................................                11             31420
110128....................................                11             42340
110146....................................                11             27260
110150....................................                11             12060
110153....................................             47580             31420
110168....................................             40660             12060
110187....................................                11             12060  LUGAR
110189....................................                11             12060
120028....................................                12             26180
130002....................................                13                29
130003....................................             30300             28420
130049....................................             17660             44060
130067....................................                13             26820  LUGAR
140B10....................................             29404             16974
140012....................................                14             16974
140015....................................                14             41180
140032....................................                14             41180
140033....................................             29404             16974
140034....................................                14             41180
140040....................................                14             37900
140043....................................                14             19340
140046....................................                14             41180
140058....................................                14             41180
140064....................................                14             37900
140084....................................             29404             16974
140100....................................             29404             16974
140110....................................                14             16974
140130....................................             29404             16974
140143....................................                14             16974
140155....................................             28100             16974
140160....................................                14             40420
140161....................................                14             16974
140164....................................                14             41180
140186....................................             28100             16974
140202....................................             29404             16974
140233....................................             40420             16974
140291....................................             29404             16974
150002....................................             23844             16974
150004....................................             23844             16974
150006....................................             33140             43780
150008....................................             23844             16974
150011....................................                15             26900
150023....................................             45460             26900  ................................
150030....................................                15             26900  LUGAR
150034....................................             23844             16974
150042....................................                15             14020
150045....................................                15             23060

[[Page 48131]]

 
150048....................................                15             17140
150051....................................             14020             26900
150065....................................                15             26900
150069....................................                15             17140
150076....................................                15             43780
150088....................................             11300             26900
150090....................................             23844             16974
150091....................................                15             23060
150102....................................                15             23844  LUGAR
150112....................................             18020             26900
150113....................................             11300             26900
150115....................................                15             21780
150125....................................             23844             16974
150126....................................             23844             16974
150133....................................                15             23060
150146....................................                15             23060
150147....................................             23844             16974
160001....................................                16             11180
160016....................................                16             11180
160057....................................                16             26980
160064....................................                16             47940
160080....................................                16             19340
160089....................................                16             26980
160147....................................                16             11180
170006....................................                17             27900
170012....................................                17             48620
170013....................................                17             48620
170020....................................                17             48620
170023....................................                17             48620
170033....................................                17             48620
170058....................................                17             28140
170068....................................                17             11100
170120....................................                17             27900
170142....................................                17             45820
170175....................................                17             48620
170190....................................                17             45820
170193....................................                17             48620
180002....................................                18                49
180005....................................                18             26580
180011....................................                18             30460
180012....................................             21060             31140
180013....................................             14540             34980
180017....................................                18             21060
180019....................................                18             17140
180024....................................                18             31140
180027....................................                18             17300
180029....................................                18             30460
180044....................................                18             26580
180048....................................                18             31140
180049....................................                18             30460
180050....................................                18             28700
180066....................................                18             34980
180069....................................                18             26580
180078....................................                18             26580
180080....................................                18             28940
180093....................................                18             21780
180102....................................                18             17300
180104....................................                18             17300
180116....................................                18             17300
180124....................................             14540             34980
180127....................................                18             31140
180132....................................                18             30460
190003....................................                19             29180
190015....................................                19             35380
190086....................................                19             33740
190088....................................                19             43340
190099....................................                19             12940
190106....................................                19             10780
190144....................................                19             43340
190164....................................                19                45
190167....................................                19             29180

[[Page 48132]]

 
190184....................................                19             33740
190191....................................                19             29180
190208....................................                19                04
190218....................................                19             43340
200020....................................             38860             40484
200024....................................             30340             38860
200034....................................             30340             38860
200039....................................                20             38860
200050....................................                20             12620
200063....................................                20             38860
220008....................................             39300             14484
220010....................................             37764             14484
220020....................................             39300             14484
220029....................................             37764             14484
220033....................................             37764             14484
220035....................................             37764             14484
220073....................................             39300             14484
220074....................................             39300             14484  ................................
220077....................................             44140             25540
220080....................................             37764             14484
220174....................................             37764             14484
230002....................................             19804             11460
230003....................................             26100             34740
230013....................................             47644             22420
230019....................................             47644             22420
230020....................................             19804             11460
230021....................................             35660             28020
230022....................................                23             29620
230024....................................             19804             11460
230029....................................             47644             22420
230030....................................                23             40980
230035....................................                23             24340  LUGAR
230036....................................                23             13020
230037....................................                23             11460
230038....................................             24340             34740
230047....................................             47644             19804
230053....................................             19804             11460
230054....................................                23             24580
230059....................................             24340             34740
230069....................................             47644             11460
230071....................................             47644             22420
230072....................................             26100             34740
230077....................................             40980             22420
230080....................................                23             13020
230089....................................             19804             11460
230092....................................             27100             11460
230096....................................                23             28020
230097....................................                23             24340
230099....................................             33780             11460
230104....................................             19804             11460
230105....................................                23             13020
230106....................................             24340             34740
230119....................................             19804             11460
230121....................................                23             29620  LUGAR
230130....................................             47644             22420
230135....................................             19804             11460
230142....................................             19804             11460
230146....................................             19804             11460
230151....................................             47644             22420
230165....................................             19804             11460
230174....................................             26100             34740
230176....................................             19804             11460
230195....................................             47644             19804
230204....................................             47644             19804
230207....................................             47644             22420
230208....................................                23             24340  LUGAR
230222....................................                23             13020
230223....................................             47644             22420
230227....................................             47644             19804
230236....................................             24340             34740
230244....................................             19804             11460

[[Page 48133]]

 
230254....................................             47644             22420
230257....................................             47644             19804
230264....................................             47644             19804
230269....................................             47644             22420
230270....................................             19804             11460
230273....................................             19804             11460
230277....................................             47644             22420
230279....................................             47644             11460
240030....................................                24             41060
240064....................................                24             20260
240069....................................                24             40340
240071....................................                24             40340
240075....................................                24             41060
240088....................................                24             41060
240093....................................                24             33460
240187....................................                24             33460
250002....................................                25             22520
250004....................................                25             32820
250006....................................                25             32820
250009....................................                25             27180
250023....................................                25             25060  LUGAR
250031....................................                25             27140
250034....................................                25             32820
250040....................................             37700             25060
250042....................................                25             32820
250044....................................                25             22520
250069....................................                25             46220
250078....................................             25620             25060
250079....................................                25             27140
250081....................................                25             46220
250082....................................                25             38220
250094....................................             25620             25060
250097....................................                25             12940
250099....................................                25             27140
250100....................................                25             46220
250104....................................                25             46220
250117....................................                25             25060  LUGAR
260009....................................                26             28140
260015....................................                26             27860
260017....................................                26             27620
260022....................................                26                16
260025....................................                26             41180
260050....................................                26             41140
260064....................................                26             17860
260074....................................                26             17860
260094....................................                26             44180
260110....................................                26             41180
260113....................................                26                14
260119....................................                26             27860
260175....................................                26             28140
260183....................................                26             41180
260186....................................                26             27620
270003....................................                27             24500
270017....................................                27             33540
280009....................................                28             30700
280023....................................                28             30700
280032....................................                28             30700
280061....................................                28                53
280065....................................                28             24540
280125....................................                28             43580
290002....................................                29             16180  LUGAR
290006....................................                29             39900
290019....................................             16180             39900
300001....................................                30             31700
300014....................................             40484             31700
300018....................................             40484             31700
300019....................................                30             15764
310002....................................             35084             35644
310009....................................             35084             35644
310013....................................             35084             35644
310014....................................             15804             37964

[[Page 48134]]

 
310015....................................             35084             35644
310017....................................             35084             35644
310018....................................             35084             35644
310021....................................             45940             35084
310031....................................             15804             20764
310032....................................             47220             48864
310038....................................             20764             35644
310039....................................             20764             35644
310048....................................             20764             35084
310050....................................             35084             35644
310054....................................             35084             35644
310070....................................             20764             35644
310076....................................             35084             35644
310081....................................             15804             37964
310083....................................             35084             35644
310093....................................             35084             35644
310096....................................             35084             35644
310108....................................             20764             35644
310119....................................             35084             35644
320003....................................                32             42140
320005....................................             22140             10740
320006....................................                32             10740
320013....................................                32             42140
320014....................................                32             29740
320033....................................                32             42140  LUGAR
320063....................................                32             36220
320065....................................                32             36220
330004....................................             28740             39100
330008....................................                33             15380  LUGAR
330023....................................             39100             14860
330027....................................             35004             35644
330049....................................             39100             14860
330067....................................             39100             14860
330073....................................                33             40380  LUGAR
330079....................................                33                47
330085....................................                33             45060
330094....................................                33             28740
330103....................................                33                39
330106....................................             35004             35644
330126....................................             39100             35644
330136....................................                33             45060
330157....................................                33             45060
330167....................................             35004             35644
330181....................................             35004             35644
330182....................................             35004             35644
330191....................................             24020             10580
330198....................................             35004             35644
330224....................................             28740             39100
330225....................................             35004             35644
330229....................................                33             21500
330235....................................                33             45060  LUGAR
330239....................................                33             21500
330250....................................                33             15540
330259....................................             35004             35644
330277....................................                33             27060
330331....................................             35004             35644
330332....................................             35004             35644
330372....................................             35004             35644
330386....................................                33             35084
340004....................................             24660             49180
340008....................................                34             16740
340010....................................             24140             39580
340013....................................                34             16740
340015....................................                34             16740
340021....................................                34             16740
340023....................................             11700             24860
340027....................................                34             24780
340039....................................                34             16740
340050....................................                34             22180
340051....................................                34             25860
340068....................................                34             48900

[[Page 48135]]

 
340069....................................             39580             20500
340070....................................             15500             24660
340071....................................                34             39580  LUGAR
340073....................................             39580             20500
340091....................................             24660             49180
340109....................................                34             47260
340114....................................             39580             20500
340115....................................                34             20500
340124....................................                34             39580  LUGAR
340126....................................                34             39580
340127....................................                34             20500  LUGAR
340129....................................                34             16740
340131....................................                34             24780
340138....................................             39580             20500
340144....................................                34             16740
340145....................................                34             16740  LUGAR
340147....................................             40580             39580
340173....................................             39580             20500
350003....................................                35             13900
350006....................................                35             13900
350009....................................                35             22020
360008....................................                36             26580
360010....................................                36             15940
360011....................................                36             18140
360013....................................                36             30620
360014....................................                36             18140
360019....................................             10420             17460
360020....................................             10420             17460
360025....................................             41780             45780
360027....................................             10420             17460
360036....................................                36             17460
360039....................................                36             18140
360054....................................                36             26580
360065....................................                36             45780
360078....................................             10420             17460
360079....................................             19380             17140
360086....................................             44220             19380
360095....................................                36             45780
360096....................................                36             49660  LUGAR
360107....................................                36             45780
360121....................................                36             45780
360150....................................             10420             17460
360159....................................                36             18140
360175....................................                36             18140
360185....................................                36             49660  LUGAR
360187....................................             44220             19380
360197....................................                36             18140
360211....................................             48260             38300
360245....................................                36             17460  LUGAR
360253....................................             19380             17140
370004....................................                37             27900
370006....................................                37             46140
370014....................................                37             43300
370015....................................                37             46140
370016....................................                37             36420
370018....................................                37             46140
370022....................................                37             30020
370025....................................                37             46140
370026....................................                37             36420
370047....................................                37             36420
370049....................................                37             36420
370113....................................                37             22220
370149....................................                37             36420
380001....................................                38             38900
380022....................................                38             18700  LUGAR
380027....................................                38             21660
380050....................................                38             32780
380090....................................                38             21660
390006....................................                39             25420
390013....................................                39             25420
390016....................................                39                36

[[Page 48136]]

 
390030....................................                39             10900
390031....................................                39             39740  LUGAR
390044....................................             39740             37964
390046....................................             49620             29540
390048....................................                39             25420
390065....................................                39             12580
390066....................................             30140             25420
390071....................................                39             48700  LUGAR
390079....................................                39             13780
390086....................................                39             27780
390091....................................                39             49660
390093....................................                39             38300
390096....................................             39740             37964
390110....................................             27780             38300
390113....................................                39             49660
390133....................................             10900             37964
390138....................................                39             25420
390151....................................                39             13644
390162....................................             10900             35084
390246....................................                39             48700
390313....................................                39             39740  LUGAR
400048....................................             25020             41980
410001....................................             39300             14484
410004....................................             39300             14484
410005....................................             39300             14484
410007....................................             39300             14484
410010....................................             39300             14484
410011....................................             39300             14484
410012....................................             39300             14484
410013....................................             39300             35980
420007....................................             43900             24860
420009....................................                42             24860  LUGAR
420020....................................                42             16770
420027....................................             11340             24860
420030....................................                42             16700
420036....................................                42             16740
420039....................................                42             43900  LUGAR
420062....................................                42             16740
420067....................................                42             42340
420068....................................                42             16700
420069....................................                42             44940  LUGAR
420071....................................                42             24860
420080....................................                42             42340
420083....................................             43900             24860
420085....................................             34820             48900
420098....................................                42             34820
430012....................................                43             43620
430013....................................                43             43620
440002....................................             27180             32820
440008....................................                44             27180
440020....................................                44             26620
440024....................................             17420             16860
440025....................................                44                34
440035....................................             17300             34980
440056....................................             34100             28940
440060....................................                44             27180
440068....................................                44             16860
440072....................................                44             32820
440073....................................                44             34980
440144....................................                44             34980  ................................
440148....................................                44             34980
440151....................................                44             34980
440175....................................                44             34980
440185....................................             17420             16860
440192....................................                44             34980
450007....................................                45             41700
450032....................................                45             43340
450039....................................             23104             19124
450059....................................             41700             12420
450064....................................             23104             19124
450080....................................                45             30980

[[Page 48137]]

 
450087....................................             23104             19124
450099....................................                45             11100
450135....................................             23104             19124
450137....................................             23104             19124
450148....................................             23104             19124
450178....................................                45             36220
450187....................................                45             26420
450196....................................                45             19124
450211....................................                45             30980
450214....................................                45             26420
450224....................................                45             46340
450283....................................                45             19124  LUGAR
450324....................................             43300             19124
450347....................................                45             26420
450351....................................                45             23104
450389....................................                45             19124  LUGAR
450393....................................             43300             19124
450395....................................                45             26420
450419....................................             23104             19124
450438....................................                45             26420
450447....................................                45             19124
450465....................................                45             26420
450469....................................             43300             19124
450484....................................                45             30980
450508....................................                45             30980
450563....................................             23104             19124
450596....................................                45             23104
450639....................................             23104             19124
450656....................................                45             30980
450672....................................             23104             19124
450675....................................             23104             19124
450677....................................             23104             19124
450747....................................                45             46340
450770....................................                45             12420  LUGAR
450779....................................             23104             19124
450813....................................                45             41700
450830....................................                45             36220
450839....................................                45             43340
450872....................................             23104             19124
450880....................................             23104             19124
460004....................................             36260             41620
460005....................................             36260             41620
460007....................................                46             41100
460011....................................                46             39340
460021....................................             41100             29820
460026....................................                46             39340
460039....................................                46             30860
460041....................................             36260             41620
460042....................................             36260             41620
470001....................................                47                30
470012....................................                47             38340
490004....................................             25500             16820
490005....................................             49020             47894
490013....................................                49             31340
490018....................................                49             16820
490019....................................                49             47894
490042....................................             13980             40220
490079....................................                49             49180
490092....................................                49             40060
490097....................................                49             40060
490106....................................                49             16820
490109....................................             47260             40060
500002....................................                50             28420
500003....................................             34580             42644
500007....................................             34580             42644
500016....................................             48300             42644
500021....................................             45104             42644
500031....................................                50             36500
500039....................................             14740             42644
500041....................................             31020             38900
500072....................................                50             14740

[[Page 48138]]

 
500079....................................             45104             42644
500108....................................             45104             42644
500129....................................             45104             42644
510001....................................             34060             38300
510002....................................                51             40220
510006....................................                51             34060
510018....................................                51             16620  LUGAR
510030....................................                51             34060
510046....................................                51             13980
510047....................................                51             38300
510062....................................                51             16620
510070....................................                51             16620
510071....................................                51             13980
510077....................................                51             26580
520002....................................                52             48140
520021....................................             29404             16974
520028....................................                52             31540  LUGAR
520037....................................                52             48140
520059....................................             39540             29404
520071....................................                52             33340  LUGAR
520076....................................                52             31540
520095....................................                52             31540
520102....................................                52             33340  LUGAR
520107....................................                52             22540
520113....................................                52             24580
520116....................................                52             33340  LUGAR
520189....................................             29404             16974
530015....................................                53             26820
----------------------------------------------------------------------------------------------------------------


 Table 9C.--Hospitals Redesignated as Rural Under Section 1886(d)(8)(E)
                           of the Act--FY 2008
------------------------------------------------------------------------
                                            Geographic     Redesignated
              Provider No.                     CBSA         rural area
------------------------------------------------------------------------
050192..................................           23420              05
050528..................................           32900              05
050618..................................           40140              05
100048..................................           37860              10
100134..................................           27260              10
140167..................................              14              14
170137..................................           29940              17
220051..................................           38340              22
230078..................................           35660              23
250017..................................              25              25
250126..................................           32820              25
260006..................................           41140              26
260195..................................           44180              26
330044..................................           46540              33
330268..................................           10580              33
360125..................................              36              36
370054..................................           36420              37
380040..................................           13460              38
390130..................................           27780              39
390183..................................              39              39
390185..................................           42540              39
390201..................................              39              39
440135..................................           34980              44
450052..................................              45              45
450078..................................           10180              45
450243..................................           10180              45
450348..................................              45              45
500148..................................           48300              50
------------------------------------------------------------------------


[[Page 48139]]


    Table 10.--Geometric Mean Plus the Lesser of .75 of the National
Adjusted Operating Standardized Payment Amount (Increased to Reflect the
 Difference Between Costs and Charges) or .75 of One Standard Deviation
 of Mean Charges by Medicare Severity--Diagnosis-Related Group (MS-DRG)
                              July 2007 \1\
------------------------------------------------------------------------
                                                 Number of
                    MS-DRG                         cases      Threshold
------------------------------------------------------------------------
 
1.............................................          652     $344,972
2.............................................          335     $178,084
3.............................................       24,400     $248,259
4.............................................       21,825     $149,229
5.............................................          634     $167,704
6.............................................          296      $92,307
7.............................................          378     $134,547
8.............................................          583      $92,298
9.............................................        1,388      $97,039
10............................................          182      $73,445
11............................................        1,297      $71,635
12............................................        1,956      $51,554
13............................................        1,476      $36,941
20............................................          910     $138,402
21............................................          566     $108,066
22............................................          249      $74,805
23............................................        3,564      $81,024
24............................................        2,168      $57,356
25............................................        8,493      $77,715
26............................................       12,059      $52,351
27............................................       14,191      $41,285
28............................................        1,623      $74,169
29............................................        3,089      $45,899
30............................................        3,592      $30,000
31............................................        1,061      $60,326
32............................................        3,064      $35,479
33............................................        4,237      $28,788
34............................................          821      $58,372
35............................................        2,911      $41,566
36............................................        7,454      $36,543
37............................................        4,803      $51,766
38............................................       16,531      $32,789
39............................................       53,619      $23,940
40............................................        4,585      $57,541
41............................................        8,005      $39,482
42............................................        5,216      $34,232
52............................................        1,188      $29,320
53............................................          590      $21,941
54............................................        4,750      $30,214
55............................................       16,945      $24,920
56............................................        7,800      $28,299
57............................................       48,665      $18,154
58............................................          796      $28,691
59............................................        2,676      $21,475
60............................................        4,240      $16,415
61............................................        1,368      $53,028
62............................................        2,320      $42,000
63............................................        1,150      $36,285
64............................................       56,448      $33,845
65............................................      115,423      $26,274
66............................................       91,644      $19,975
67............................................        1,403      $30,791
68............................................       12,512      $21,801
69............................................      104,325      $17,613
70............................................        7,165      $33,370
71............................................       10,283      $26,043
72............................................        5,811      $19,097
73............................................        8,728      $27,013
74............................................       32,760      $19,857
75............................................        1,229      $33,946
76............................................          861      $22,530
77............................................        1,112      $33,096
78............................................        1,386      $23,660
79............................................          896      $18,688
80............................................        2,095      $24,178
81............................................        8,250      $15,979
82............................................        1,664      $34,229
83............................................        2,070      $28,417
84............................................        2,527      $21,042
85............................................        5,383      $34,777
86............................................       10,921      $26,138
87............................................       11,827      $18,483
88............................................          730      $30,531
89............................................        2,836      $22,350
90............................................        3,285      $16,402
91............................................        6,763      $29,354
92............................................       15,467      $20,636
93............................................       15,043      $15,988
94............................................        1,533      $55,255
95............................................        1,101      $41,891
96............................................          749      $35,515
97............................................        1,266      $50,373
98............................................        1,065      $35,777
99............................................          637      $30,000
100...........................................       16,012      $28,458
101...........................................       57,312      $17,754
102...........................................        1,373      $24,469
103...........................................       15,199      $15,977
113...........................................          592      $31,359
114...........................................          593      $19,667
115...........................................        1,110      $25,665
116...........................................          715      $23,533
117...........................................        1,406      $15,540
121...........................................          609      $21,777
122...........................................          666      $12,422
123...........................................        2,865      $17,881
124...........................................          684      $24,203
125...........................................        4,742      $15,308
129...........................................        1,401      $38,054
130...........................................        1,063      $27,826
131...........................................          895      $36,608
132...........................................          910      $26,200
133...........................................        2,057      $31,616
134...........................................        3,781      $19,478
135...........................................          430      $34,413
136...........................................          503      $21,916
137...........................................          847      $26,995
138...........................................          926      $17,071
139...........................................        1,710      $19,625
146...........................................          696      $35,195
147...........................................        1,457      $25,206
148...........................................          924      $17,390
149...........................................       39,487      $14,828
150...........................................          945      $25,227
151...........................................        6,840      $12,717
152...........................................        2,363      $22,142
153...........................................       16,167      $14,126
154...........................................        1,857      $28,012
155...........................................        4,431      $20,298
156...........................................        4,969      $14,819
157...........................................        1,164      $28,373
158...........................................        3,158      $19,955
159...........................................        2,365      $14,144
163...........................................       13,502      $78,302
164...........................................       18,484      $47,957
165...........................................       14,267      $37,903
166...........................................       20,398      $57,270
167...........................................       21,074      $39,819
168...........................................        5,555      $30,197
175...........................................       12,032      $33,122
176...........................................       40,330      $25,127
177...........................................       57,526      $35,859
178...........................................       72,497      $29,849
179...........................................       26,495      $23,293
180...........................................       22,628      $33,012
181...........................................       32,425      $26,937
182...........................................        6,085      $21,762
183...........................................        1,679      $29,889
184...........................................        4,279      $21,041
185...........................................        2,607      $14,730
186...........................................        8,586      $31,513
187...........................................       10,362      $25,629
188...........................................        4,840      $19,425
189...........................................      105,009      $28,877
190...........................................       57,361      $27,675
191...........................................      126,608      $22,656
192...........................................      193,798      $17,011
193...........................................       88,637      $29,447
194...........................................      274,002      $23,196
195...........................................      142,476      $16,909
196...........................................        5,173      $30,810
197...........................................        7,087      $25,433
198...........................................        4,822      $19,617
199...........................................        3,279      $33,342
200...........................................        8,321      $23,384
201...........................................        3,470      $16,338
202...........................................       32,849      $19,060
203...........................................       40,990      $13,891
204...........................................       26,244      $16,200
205...........................................        5,816      $26,189
206...........................................       22,615      $17,512
207...........................................       46,394      $81,122
208...........................................       79,797      $41,204
215...........................................          154     $151,766
216...........................................        8,437     $161,671
217...........................................        7,940     $116,693
218...........................................        2,963      $97,867
219...........................................       10,112     $131,302
220...........................................       14,302      $93,773
221...........................................        7,644      $81,213
222...........................................        2,862     $150,236
223...........................................        5,774     $116,596
224...........................................        1,930     $138,303
225...........................................        5,882     $109,289
226...........................................        7,078     $112,853
227...........................................       50,687      $88,692

[[Page 48140]]

 
228...........................................        3,099     $124,484
229...........................................        4,351      $88,309
230...........................................        1,797      $72,663
231...........................................        1,484     $138,738
232...........................................        1,799     $107,841
233...........................................       16,996     $118,266
234...........................................       39,349      $86,707
235...........................................        9,680      $95,709
236...........................................       33,005      $68,284
237...........................................       22,981      $84,128
238...........................................       43,967      $53,458
239...........................................       13,900      $59,235
240...........................................       13,862      $40,599
241...........................................        2,927      $30,264
242...........................................       17,243      $63,738
243...........................................       40,609      $50,008
244...........................................       65,831      $42,222
245...........................................        6,081      $54,185
246...........................................       41,300      $65,056
247...........................................      272,543      $46,585
248...........................................        5,558      $58,102
249...........................................       29,332      $41,932
250...........................................        5,768      $53,604
251...........................................       39,992      $38,463
252...........................................       44,846      $48,386
253...........................................       52,457      $42,805
254...........................................       53,894      $34,650
255...........................................        2,624      $38,481
256...........................................        3,944      $29,789
257...........................................          694      $21,430
258...........................................          599      $49,941
259...........................................        7,342      $35,275
260...........................................          872      $47,350
261...........................................        2,921      $28,440
262...........................................        3,284      $21,635
263...........................................          792      $29,057
264...........................................       30,336      $39,273
280...........................................       61,020      $35,562
281...........................................       62,050      $27,923
282...........................................       57,249      $21,202
283...........................................       16,022      $31,166
284...........................................        5,089      $23,429
285...........................................        3,008      $16,066
286...........................................       23,379      $40,316
287...........................................      173,151      $27,701
288...........................................        3,262      $48,403
289...........................................        1,471      $35,164
290...........................................          447      $27,561
291...........................................      184,689      $28,984
292...........................................      245,075      $22,187
293...........................................      200,858      $16,283
294...........................................        1,756      $20,506
295...........................................        1,631      $12,987
296...........................................        1,844      $26,653
297...........................................          893      $18,216
298...........................................          518      $11,608
299...........................................       17,570      $27,658
300...........................................       49,533      $20,057
301...........................................       37,733      $14,452
302...........................................        7,919      $23,176
303...........................................       81,896      $14,065
304...........................................        2,116      $24,255
305...........................................       36,019      $13,919
306...........................................        1,385      $27,627
307...........................................        6,479      $17,568
308...........................................       33,741      $27,332
309...........................................       85,320      $19,164
310...........................................      156,223      $13,820
311...........................................       25,143      $12,408
312...........................................      170,267      $16,986
313...........................................      222,163      $13,782
314...........................................       60,587      $30,470
315...........................................       33,354      $22,371
316...........................................       18,077      $15,239
326...........................................       11,616      $86,242
327...........................................       11,348      $49,564
328...........................................        8,994      $31,783
329...........................................       48,381      $78,387
330...........................................       68,497      $46,866
331...........................................       29,611      $34,881
332...........................................        1,897      $72,507
333...........................................        6,490      $45,775
334...........................................        3,751      $33,992
335...........................................        7,194      $67,336
336...........................................       12,815      $43,034
337...........................................        8,636      $32,651
338...........................................        1,513      $58,118
339...........................................        3,289      $39,790
340...........................................        3,551      $29,763
341...........................................          878      $43,015
342...........................................        2,662      $32,037
343...........................................        6,796      $22,560
344...........................................          897      $51,699
345...........................................        3,090      $33,750
346...........................................        2,758      $25,650
347...........................................        1,577      $36,665
348...........................................        4,295      $27,844
349...........................................        5,539      $17,498
350...........................................        1,802      $41,248
351...........................................        4,663      $28,402
352...........................................        8,835      $18,578
353...........................................        3,076      $44,781
354...........................................        9,041      $30,877
355...........................................       16,621      $21,562
356...........................................        8,411      $57,529
357...........................................        8,336      $39,734
358...........................................        2,477      $30,907
368...........................................        3,069      $31,649
369...........................................        4,850      $24,300
370...........................................        3,104      $18,383
371...........................................       16,940      $31,947
372...........................................       23,722      $26,571
373...........................................       14,227      $19,299
374...........................................        9,505      $34,336
375...........................................       20,165      $26,493
376...........................................        4,486      $20,960
377...........................................       50,797      $30,746
378...........................................      118,928      $22,456
379...........................................       95,521      $17,322
380...........................................        2,934      $32,401
381...........................................        5,702      $25,732
382...........................................        4,681      $18,936
383...........................................        1,307      $28,326
384...........................................        8,723      $19,941
385...........................................        2,119      $33,554
386...........................................        7,449      $24,853
387...........................................        5,105      $19,162
388...........................................       18,375      $29,409
389...........................................       47,827      $21,609
390...........................................       47,010      $15,176
391...........................................       47,836      $24,951
392...........................................      308,502      $16,603
393...........................................       24,053      $29,057
394...........................................       48,058      $22,377
395...........................................       24,695      $16,159
405...........................................        3,949      $82,207
406...........................................        5,420      $49,157
407...........................................        2,195      $36,266
408...........................................        1,682      $68,553
409...........................................        1,771      $46,888
410...........................................          693      $35,868
411...........................................          985      $65,611
412...........................................        1,098      $47,835
413...........................................          850      $37,471
414...........................................        5,643      $59,255
415...........................................        7,154      $40,657
416...........................................        6,018      $30,408
417...........................................       16,735      $46,510
418...........................................       28,654      $36,535
419...........................................       37,427      $27,109
420...........................................          738      $62,577
421...........................................        1,118      $37,072
422...........................................          359      $28,797
423...........................................        1,528      $64,735
424...........................................          934      $44,742
425...........................................          148      $35,273
432...........................................       16,397      $30,669
433...........................................        9,146      $21,794
434...........................................          931      $15,756
435...........................................       12,004      $32,775
436...........................................       14,157      $26,550
437...........................................        4,304      $23,750
438...........................................       14,497      $31,776
439...........................................       25,932      $25,153
440...........................................       26,506      $17,450
441...........................................       14,036      $29,001
442...........................................       13,192      $22,508
443...........................................        6,445      $16,775
444...........................................       12,529      $31,104
445...........................................       17,390      $25,361
446...........................................       16,434      $18,758
453...........................................          852     $162,887
454...........................................        1,700     $108,936
455...........................................        1,715      $83,977
456...........................................          770     $132,661
457...........................................        2,084      $93,332
458...........................................        1,282      $76,740

[[Page 48141]]

 
459...........................................        3,212      $91,544
460...........................................       51,227      $61,564
461...........................................        1,071      $78,546
462...........................................       14,292      $59,077
463...........................................        5,317      $58,659
464...........................................        6,589      $40,817
465...........................................        2,748      $30,426
466...........................................        3,914      $70,273
467...........................................       14,340      $53,217
468...........................................       21,479      $45,760
469...........................................       29,879      $56,067
470...........................................      412,628      $41,647
471...........................................        2,241      $71,684
472...........................................        6,629      $48,438
473...........................................       22,659      $39,710
474...........................................        2,857      $47,799
475...........................................        3,709      $34,430
476...........................................        1,560      $23,529
477...........................................        2,262      $56,473
478...........................................        7,379      $41,535
479...........................................       10,118      $33,437
480...........................................       25,993      $50,045
481...........................................       74,669      $37,407
482...........................................       49,780      $31,682
483...........................................        6,572      $44,230
484...........................................       17,287      $37,116
485...........................................        1,152      $55,605
486...........................................        2,066      $41,452
487...........................................        1,345      $33,445
488...........................................        2,541      $33,298
489...........................................        6,198      $25,879
490...........................................       21,668      $34,194
491...........................................       57,424      $22,157
492...........................................        4,761      $47,695
493...........................................       16,833      $36,100
494...........................................       29,419      $27,047
495...........................................        1,888      $49,247
496...........................................        5,499      $34,237
497...........................................        7,196      $26,140
498...........................................        1,258      $36,490
499...........................................        1,173      $20,709
500...........................................        1,359      $47,252
501...........................................        3,956      $30,666
502...........................................        6,635      $21,338
503...........................................          743      $38,514
504...........................................        2,274      $30,843
505...........................................        3,142      $22,627
506...........................................          921      $23,455
507...........................................          840      $33,141
508...........................................        2,717      $24,377
509...........................................          674      $24,413
510...........................................          994      $38,909
511...........................................        4,183      $30,425
512...........................................       12,088      $21,576
513...........................................        1,104      $28,452
514...........................................        1,175      $18,054
515...........................................        3,601      $50,791
516...........................................       11,512      $37,225
517...........................................       17,926      $30,519
533...........................................          835      $26,648
534...........................................        3,647      $14,482
535...........................................        6,888      $26,452
536...........................................       34,492      $14,330
537...........................................          694      $19,017
538...........................................        1,139      $12,077
539...........................................        3,397      $33,217
540...........................................        4,317      $26,851
541...........................................        1,787      $20,216
542...........................................        6,196      $32,544
543...........................................       18,834      $24,660
544...........................................       12,389      $16,758
545...........................................        4,061      $33,836
546...........................................        6,159      $23,684
547...........................................        4,717      $16,961
548...........................................          592      $32,771
549...........................................        1,139      $25,057
550...........................................          855      $16,440
551...........................................        9,580      $29,107
552...........................................       88,568      $17,262
553...........................................        2,820      $24,400
554...........................................       20,429      $13,865
555...........................................        2,006      $21,701
556...........................................       19,316      $13,456
557...........................................        3,196      $28,869
558...........................................       14,252      $17,984
559...........................................        1,646      $27,886
560...........................................        4,208      $19,203
561...........................................        7,439      $12,631
562...........................................        5,051      $26,441
563...........................................       36,361      $14,373
564...........................................        1,622      $27,213
565...........................................        3,385      $19,726
566...........................................        2,673      $14,394
573...........................................        5,721      $44,181
574...........................................       12,468      $32,298
575...........................................        6,221      $24,293
576...........................................          563      $44,962
577...........................................        2,305      $31,201
578...........................................        3,228      $21,726
579...........................................        3,359      $42,784
580...........................................       11,019      $28,964
581...........................................       12,249      $19,890
582...........................................        5,787      $22,538
583...........................................        9,356      $17,024
584...........................................          801      $29,768
585...........................................        1,687      $19,824
592...........................................        4,026      $29,343
593...........................................       13,080      $21,992
594...........................................        2,828      $15,050
595...........................................        1,092      $29,676
596...........................................        5,792      $18,108
597...........................................          555      $29,885
598...........................................        1,502      $23,607
599...........................................          342      $14,643
600...........................................          611      $21,165
601...........................................          841      $13,706
602...........................................       21,456      $26,696
603...........................................      132,037      $16,799
604...........................................        2,652      $25,279
605...........................................       22,943      $15,043
606...........................................        1,371      $23,075
607...........................................        7,242      $13,623
614...........................................        1,429      $44,375
615...........................................        1,594      $32,682
616...........................................        1,145      $57,766
617...........................................        6,944      $36,252
618...........................................          268      $26,622
619...........................................          675      $60,360
620...........................................        2,007      $41,188
621...........................................        6,560      $35,408
622...........................................        1,241      $43,105
623...........................................        3,392      $32,380
624...........................................          392      $23,639
625...........................................        1,107      $40,323
626...........................................        2,751      $27,124
627...........................................       14,146      $17,672
628...........................................        3,297      $50,940
629...........................................        4,125      $39,861
630...........................................          551      $30,359
637...........................................       16,431      $26,711
638...........................................       46,657      $17,852
639...........................................       36,178      $12,405
640...........................................       56,149      $23,948
641...........................................      189,293      $15,306
642...........................................        1,570      $23,220
643...........................................        5,072      $30,688
644...........................................       12,220      $23,221
645...........................................        8,140      $17,134
652...........................................       10,695      $57,598
653...........................................        1,591      $83,573
654...........................................        3,387      $53,557
655...........................................        1,514      $40,260
656...........................................        3,739      $56,731
657...........................................        7,946      $38,721
658...........................................        7,957      $31,512
659...........................................        4,484      $50,345
660...........................................        7,985      $36,157
661...........................................        4,264      $28,963
662...........................................          998      $41,819
663...........................................        2,288      $29,509
664...........................................        4,543      $21,878
665...........................................          693      $47,203
666...........................................        2,405      $30,729
667...........................................        3,765      $17,825
668...........................................        3,768      $39,717
669...........................................       13,307      $27,864
670...........................................       12,685      $17,652
671...........................................          917      $28,730
672...........................................          940      $17,260
673...........................................       12,678      $43,306
674...........................................       13,848      $38,503
675...........................................        8,371      $31,046
682...........................................       76,428      $30,010
683...........................................      128,229      $25,096
684...........................................       28,358      $16,191
685...........................................        2,520      $18,480
686...........................................        1,596      $31,207

[[Page 48142]]

 
687...........................................        3,467      $24,323
688...........................................        1,098      $16,621
689...........................................       55,794      $25,635
690...........................................      201,347      $16,948
691...........................................          908      $32,082
692...........................................          653      $23,510
693...........................................        2,256      $27,732
694...........................................       19,345      $16,454
695...........................................          982      $24,045
696...........................................       10,646      $13,740
697...........................................          585      $16,016
698...........................................       21,255      $27,675
699...........................................       27,064      $21,858
700...........................................       11,141      $15,265
707...........................................        6,053      $34,725
708...........................................       15,996      $27,483
709...........................................          796      $33,770
710...........................................        2,015      $28,020
711...........................................          953      $34,001
712...........................................          793      $18,806
713...........................................       12,009      $24,773
714...........................................       32,647      $14,452
715...........................................          662      $34,063
716...........................................        1,367      $26,199
717...........................................          666      $31,483
718...........................................          601      $17,543
722...........................................          881      $29,143
723...........................................        2,078      $23,828
724...........................................          648      $14,696
725...........................................          808      $23,676
726...........................................        3,956      $15,110
727...........................................        1,106      $26,379
728...........................................        6,224      $15,600
729...........................................          603      $22,516
730...........................................          533      $13,176
734...........................................        1,528      $39,515
735...........................................        1,278      $24,152
736...........................................          842      $68,890
737...........................................        3,487      $39,497
738...........................................          912      $26,791
739...........................................          980      $48,238
740...........................................        4,638      $31,707
741...........................................        6,330      $22,182
742...........................................       11,685      $29,883
743...........................................       34,686      $19,452
744...........................................        1,634      $28,628
745...........................................        2,080      $18,005
746...........................................        2,664      $27,839
747...........................................       11,073      $19,176
748...........................................       21,289      $18,499
749...........................................        1,048      $42,919
750...........................................          477      $22,403
754...........................................        1,097      $31,826
755...........................................        3,219      $24,291
756...........................................          783      $15,311
757...........................................        1,326      $31,148
758...........................................        1,659      $24,086
759...........................................        1,141      $17,474
760...........................................        1,815      $17,766
761...........................................        1,844      $12,285
765...........................................        2,606      $19,738
766...........................................        2,664      $13,500
767...........................................          123      $14,158
768...........................................           10      $28,485
769...........................................           87      $30,005
770...........................................          188      $15,884
774...........................................        1,476      $11,268
775...........................................        5,343       $8,224
776...........................................          495      $14,028
777...........................................          180      $17,674
778...........................................          494       $7,925
779...........................................          107      $12,859
780...........................................           50       $5,097
781...........................................        3,062      $11,922
782...........................................          129       $7,495
790...........................................            1      $10,833
793...........................................            1       $7,090
799...........................................          631      $76,349
800...........................................          730      $45,475
801...........................................          581      $35,346
802...........................................          693      $51,863
803...........................................        1,030      $33,789
804...........................................          978      $23,443
808...........................................        8,276      $33,959
809...........................................       15,783      $24,984
810...........................................        3,694      $19,852
811...........................................       18,481      $24,763
812...........................................       83,743      $16,735
813...........................................       15,112      $25,353
814...........................................        1,649      $29,809
815...........................................        3,483      $23,384
816...........................................        2,274      $16,506
820...........................................        1,490      $83,865
821...........................................        2,593      $40,857
822...........................................        2,108      $28,934
823...........................................        2,452      $64,905
824...........................................        3,130      $40,661
825...........................................        1,940      $29,667
826...........................................          566      $77,477
827...........................................        1,354      $40,261
828...........................................          851      $29,066
829...........................................        1,386      $44,427
830...........................................          520      $24,753
834...........................................        5,293      $50,478
835...........................................        1,458      $30,789
836...........................................        1,554      $23,578
837...........................................        1,638      $85,982
838...........................................          942      $41,591
839...........................................        1,368      $27,115
840...........................................       15,248      $37,650
841...........................................       11,355      $28,759
842...........................................        7,431      $22,903
843...........................................        1,498      $32,667
844...........................................        2,893      $25,181
845...........................................          988      $19,989
846...........................................        2,498      $37,579
847...........................................       23,816      $25,378
848...........................................        1,695      $18,894
849...........................................        1,507      $26,993
853...........................................       31,591      $74,761
854...........................................        6,945      $48,947
855...........................................          429      $35,398
856...........................................        6,215      $64,096
857...........................................       10,284      $35,984
858...........................................        3,362      $28,311
862...........................................        7,481      $32,142
863...........................................       21,957      $20,215
864...........................................       19,959      $19,205
865...........................................        2,032      $28,094
866...........................................        9,474      $15,750
867...........................................        5,387      $37,568
868...........................................        2,507      $24,368
869...........................................        1,129      $18,549
870...........................................       13,815      $88,048
871...........................................      204,810      $33,442
872...........................................       92,533      $25,285
876...........................................          971      $40,650
880...........................................       10,578      $14,303
881...........................................        4,636      $10,640
882...........................................        1,673      $11,353
883...........................................          799      $16,323
884...........................................       21,747      $17,521
885...........................................       78,937      $14,233
886...........................................          377      $13,044
887...........................................          427      $17,908
894...........................................        4,627       $7,335
895...........................................        6,777      $14,018
896...........................................        5,447      $25,167
897...........................................       36,860      $12,339
901...........................................          924      $48,924
902...........................................        2,217      $31,735
903...........................................        1,687      $22,773
904...........................................          980      $39,732
905...........................................          779      $24,032
906...........................................          751      $22,406
907...........................................        8,164      $52,970
908...........................................        8,553      $34,755
909...........................................        5,427      $25,547
913...........................................          828      $26,522
914...........................................        7,082      $15,123
915...........................................          928      $24,230
916...........................................        5,418       $9,886
917...........................................       14,498      $28,130
918...........................................       35,052      $13,329
919...........................................       10,672      $27,995
920...........................................       14,259      $20,512
921...........................................        9,672      $13,742
922...........................................        1,027      $26,635
923...........................................        4,264      $14,600
927...........................................          187     $176,300
928...........................................          819      $59,748
929...........................................          448      $32,846
933...........................................          158      $31,761
934...........................................          701      $23,844
935...........................................        2,209      $21,589
939...........................................          428      $42,833
940...........................................          732      $32,886

[[Page 48143]]

 
941...........................................        1,058      $25,659
945...........................................        5,485      $19,140
946...........................................        2,759      $16,452
947...........................................        6,597      $22,649
948...........................................       34,624      $14,331
949...........................................          767      $17,139
950...........................................          463      $11,233
951...........................................        1,008      $13,228
955...........................................          456      $82,510
956...........................................        3,769      $54,265
957...........................................        1,324      $98,340
958...........................................        1,221      $65,671
959...........................................          295      $44,675
963...........................................        1,509      $46,368
964...........................................        2,538      $32,378
965...........................................        1,105      $23,186
969...........................................          676      $74,013
970...........................................          159      $41,737
974...........................................        6,358      $38,805
975...........................................        4,516      $27,839
976...........................................        2,770      $20,952
977...........................................        5,016      $23,318
981...........................................       26,444      $75,138
982...........................................       19,320      $52,350
983...........................................        6,143      $37,859
984...........................................          671      $56,002
985...........................................        1,108      $38,757
986...........................................          833      $27,923
987...........................................        8,040      $53,132
988...........................................       12,302      $35,639
989...........................................        6,162      $25,762
999...........................................           30      $11,270
------------------------------------------------------------------------
\1\ Cases taken from the FY 2006 MedPAR file; MS-DRGs are from GROUPER
  Version 25.0.


     Table 11.--FY 2008 MS-LTC-DRGs, Relative Weights, Geometric Average Length of Stay, Short-Stay Outlier
                                    Threshold, and IPPS Comparable Threshold
----------------------------------------------------------------------------------------------------------------
                                                                            Geometric    Short stay      IPPS
                                                   FY 2006      Relative     average      outlier     Comparable
      MS-LTC-DRG              MS-DRG title        LTCH cases   weight \1\   length of    Threshold    Threshold
                                                                               stay         \2\          \3\
----------------------------------------------------------------------------------------------------------------
001...................  Heart transplant or                0       0.0000          0.0          0.0          0.0
                         implant of heart
                         assist system w MCC.
002...................  Heart transplant or                0       0.0000          0.0          0.0          0.0
                         implant of heart
                         assist system w/o MCC.
003...................  ECMO or trach w MV 96+           280       4.2380         64.3         53.6         53.6
                         hrs or PDX exc face,
                         mouth & neck w maj O.R.
004...................  Trach w MV 96+ hrs or          1,067       3.0249         46.7         38.9         38.9
                         PDX exc face, mouth &
                         neck w/o maj O.R.
005...................  Liver transplant w MCC             0       0.0000          0.0          0.0          0.0
                         or intestinal
                         transplant.
006...................  Liver transplant w/o               0       0.0000          0.0          0.0          0.0
                         MCC.
007...................  Lung transplant........            0       0.0000          0.0          0.0          0.0
008...................  Simultaneous pancreas/             0       0.0000          0.0          0.0          0.0
                         kidney transplant.
009...................  Bone marrow transplant.            0       1.1417         29.0         24.2         24.2
010...................  Pancreas transplant....            0       1.1417         29.0         24.2          0.0
011...................  Tracheostomy for face,             0       1.5545         35.2         29.3         25.2
                         mouth & neck diagnoses
                         w MCC.
012...................  Tracheostomy for face,             1       1.5545         35.2         29.3         16.7
                         mouth & neck diagnoses
                         w CC.
013...................  Tracheostomy for face,             0       1.5545         35.2         29.3         11.2
                         mouth & neck diagnoses
                         w/o CC/MCC.
020...................  Intracranial vascular              0       1.5545         35.2         29.3         29.3
                         procedures w PDX
                         hemorrhage w MCC.
021...................  Intracranial vascular              0       0.5472         20.3         16.9         16.9
                         procedures w PDX
                         hemorrhage w CC.
022...................  Intracranial vascular              0       0.5472         20.3         16.9         16.1
                         procedures w PDX
                         hemorrhage w/o CC/MCC.
023...................  Cranio w major dev impl/           0       1.5545         35.2         29.3         22.2
                         acute complex CNS PDX
                         w MCC or chemo implant.
024...................  Cranio w major dev impl/           0       0.5472         20.3         16.9         15.8
                         acute complex CNS PDX
                         w/o MCC.
025...................  Craniotomy &                       0       1.5545         35.2         29.3         22.1
                         endovascular
                         intracranial
                         procedures w MCC.
026...................  Craniotomy &                       2       1.5545         35.2         29.3         13.2
                         endovascular
                         intracranial
                         procedures w CC.
027...................  Craniotomy &                       0       1.5545         35.2         29.3          7.5
                         endovascular
                         intracranial
                         procedures w/o CC/MCC.
028...................  Spinal procedures w MCC            6       1.1417         29.0         24.2         24.2
029...................  Spinal procedures w CC             4       1.1417         29.0         24.2         12.4
                         or spinal
                         neurostimulators.
030...................  Spinal procedures w/o              2       0.5472         20.3         16.9          5.9
                         CC/MCC.
031...................  Ventricular shunt                  2       1.5545         35.2         29.3         22.9
                         procedures w MCC.
032...................  Ventricular shunt                  1       0.5472         20.3         16.9          9.4
                         procedures w CC.
033...................  Ventricular shunt                  1       0.5472         20.3         16.9          4.7
                         procedures w/o CC/MCC.

[[Page 48144]]

 
034...................  Carotid artery stent               0       1.5545         35.2         29.3         12.5
                         procedure w MCC.
035...................  Carotid artery stent               0       1.1417         29.0         24.2          4.4
                         procedure w CC.
036...................  Carotid artery stent               0       1.1417         29.0         24.2          2.2
                         procedure w/o CC/MCC.
037...................  Extracranial procedures           12       1.5545         35.2         29.3         14.9
                         w MCC.
038...................  Extracranial procedures            8       1.1417         29.0         24.2          5.8
                         w CC.
039...................  Extracranial procedures            0       1.1417         29.0         24.2          2.6
                         w/o CC/MCC.
040...................  Periph/cranial nerve &           153       1.2704         36.2         30.2         22.7
                         other nerv syst proc w
                         MCC.
041...................  Periph/cranial nerve &           100       1.0810         34.3         28.6         12.3
                         other nerv syst proc w
                         CC or periph neurostim.
042...................  Periph/cranial nerve &             9       0.7305         22.9         19.1          5.7
                         other nerv syst proc w/
                         o CC/MCC.
052...................  Spinal disorders &                78       1.0629         32.3         26.9         10.7
                         injuries w CC/MCC.
053...................  Spinal disorders &                18       1.0629         32.3         26.9          6.4
                         injuries w/o CC/MCC.
054...................  Nervous system                    50       0.7205         23.6         19.7         11.7
                         neoplasms w MCC.
055...................  Nervous system                    67       0.6779         22.0         18.3          8.1
                         neoplasms w/o MCC.
056...................  Degenerative nervous           1,335       0.7407         26.4         22.0         12.3
                         system disorders w MCC.
057...................  Degenerative nervous           2,607       0.6309         24.4         20.3          7.6
                         system disorders w/o
                         MCC.
058...................  Multiple sclerosis &              23       0.7305         22.9         19.1         12.5
                         cerebellar ataxia w
                         MCC.
059...................  Multiple sclerosis &              44       0.5595         22.6         18.8          8.0
                         cerebellar ataxia w CC.
060...................  Multiple sclerosis &              22       0.5472         20.3         16.9          6.2
                         cerebellar ataxia w/o
                         CC/MCC.
061...................  Acute ischemic stroke w            0       0.7897         24.2         20.2         16.0
                         use of thrombolytic
                         agent w MCC.
062...................  Acute ischemic stroke w            0       0.6563         22.7         18.9          9.6
                         use of thrombolytic
                         agent w CC.
063...................  Acute ischemic stroke w            0       0.5472         20.3         16.9          6.8
                         use of thrombolytic
                         agent w/o CC/MCC.
064...................  Intracranial hemorrhage          126       0.7746         25.1         20.9         12.7
                         or cerebral infarction
                         w MCC.
065...................  Intracranial hemorrhage          119       0.6691         23.3         19.4          8.2
                         or cerebral infarction
                         w CC.
066...................  Intracranial hemorrhage           22       0.5472         20.3         16.9          5.8
                         or cerebral infarction
                         w/o CC/MCC.
067...................  Nonspecific cva &                  5       0.5472         20.3         16.9         10.1
                         precerebral occlusion
                         w/o infarct w MCC.
068...................  Nonspecific cva &                  8       0.5472         20.3         16.9          5.6
                         precerebral occlusion
                         w/o infarct w/o MCC.
069...................  Transient ischemia.....           17       0.5472         20.3         16.9          4.7
070...................  Nonspecific                      104       0.7897         24.2         20.2         12.7
                         cerebrovascular
                         disorders w MCC.
071...................  Nonspecific                       86       0.6563         22.7         18.9          8.8
                         cerebrovascular
                         disorders w CC.
072...................  Nonspecific                        9       0.5472         20.3         16.9          5.8
                         cerebrovascular
                         disorders w/o CC/MCC.
073...................  Cranial & peripheral              86       0.7849         25.6         21.3         10.2
                         nerve disorders w MCC.
074...................  Cranial & peripheral             175       0.6260         23.4         19.5          6.9
                         nerve disorders w/o
                         MCC.
075...................  Viral meningitis w CC/            21       0.7305         22.9         19.1         12.1
                         MCC.
076...................  Viral meningitis w/o CC/           1       0.5472         20.3         16.9          6.5
                         MCC.
077...................  Hypertensive                       4       0.7305         22.9         19.1         11.4
                         encephalopathy w MCC.
078...................  Hypertensive                       9       0.7305         22.9         19.1          7.2
                         encephalopathy w CC.
079...................  Hypertensive                       1       0.5472         20.3         16.9          5.3
                         encephalopathy w/o CC/
                         MCC.
080...................  Nontraumatic stupor &             40       0.6312         24.6         20.5          7.8
                         coma w MCC.
081...................  Nontraumatic stupor &             71       0.5618         23.1         19.3          5.3
                         coma w/o MCC.
082...................  Traumatic stupor &                27       0.8864         29.5         24.6         10.9
                         coma, coma >1 hr w MCC.
083...................  Traumatic stupor &                12       0.7305         22.9         19.1          8.6
                         coma, coma >1 hr w CC.
084...................  Traumatic stupor &                 4       0.7305         22.9         19.1          4.9
                         coma, coma >1 hr w/o
                         CC/MCC.
085...................  Traumatic stupor &               105       0.9044         28.3         23.6         13.2
                         coma, coma <1 hr w MCC.
086...................  Traumatic stupor &                89       0.7437         25.1         20.9          8.2
                         coma, coma <1 hr w CC.
087...................  Traumatic stupor &                28       0.6361         20.4         17.0          5.3
                         coma, coma <1 hr w/o
                         CC/MCC.
088...................  Concussion w MCC.......            1       1.1417         29.0         24.2          9.9
089...................  Concussion w CC........            2       1.1417         29.0         24.2          6.0
090...................  Concussion w/o CC/MCC..            0       1.1417         29.0         24.2          3.7
091...................  Other disorders of               242       0.8019         25.6         21.3         10.7
                         nervous system w MCC.
092...................  Other disorders of               191       0.6704         22.0         18.3          6.9
                         nervous system w CC.
093...................  Other disorders of                53       0.5811         20.1         16.8          4.9
                         nervous system w/o CC/
                         MCC.
094...................  Bacterial & tuberculous          210       1.0328         27.9         23.3         20.8
                         infections of nervous
                         system w MCC.
095...................  Bacterial & tuberculous          110       0.9306         27.0         22.5         14.9
                         infections of nervous
                         system w CC.
096...................  Bacterial & tuberculous           26       0.9306         27.0         22.5         10.1
                         infections of nervous
                         system w/o CC/MCC.
097...................  Non-bacterial infect of           58       0.9289         26.8         22.3         19.6
                         nervous sys exc viral
                         meningitis w MCC.
098...................  Non-bacterial infect of           33       0.8629         22.7         18.9         13.7
                         nervous sys exc viral
                         meningitis w CC.

[[Page 48145]]

 
099...................  Non-bacterial infect of           10       0.7305         22.9         19.1         10.1
                         nervous sys exc viral
                         meningitis w/o CC/MCC.
100...................  Seizures w MCC.........           39       0.7904         26.5         22.1         10.1
101...................  Seizures w/o MCC.......           35       0.6177         21.4         17.8          5.8
102...................  Headaches w MCC........            6       0.8249         25.0         20.8          8.1
103...................  Headaches w/o MCC......           12       0.8249         25.0         20.8          5.0
113...................  Orbital procedures w CC/           1       0.7305         22.9         19.1          9.2
                         MCC.
114...................  Orbital procedures w/o             0       0.7305         22.9         19.1          4.1
                         CC/MCC.
115...................  Extraocular procedures             0       0.8249         25.0         20.8          7.2
                         except orbit.
116...................  Intraocular procedures             0       0.8249         25.0         20.8          5.2
                         w CC/MCC.
117...................  Intraocular procedures             0       0.8249         25.0         20.8          2.8
                         w/o CC/MCC.
121...................  Acute major eye                    8       0.7305         22.9         19.1          9.1
                         infections w CC/MCC.
122...................  Acute major eye                    2       0.5472         20.3         16.9          6.3
                         infections w/o CC/MCC.
123...................  Neurological eye                   3       0.5472         20.3         16.9          4.5
                         disorders.
124...................  Other disorders of the             2       1.1417         29.0         24.2          8.4
                         eye w MCC.
125...................  Other disorders of the             9       0.8249         25.0         20.8          5.5
                         eye w/o MCC.
129...................  Major head & neck                  0       1.1977         26.4         22.0          8.1
                         procedures w CC/MCC or
                         major device.
130...................  Major head & neck                  0       0.7305         22.9         19.1          4.8
                         procedures w/o CC/MCC.
131...................  Cranial/facial                     2       1.5545         35.2         29.3          9.5
                         procedures w CC/MCC.
132...................  Cranial/facial                     0       1.5545         35.2         29.3          4.0
                         procedures w/o CC/MCC.
133...................  Other ear, nose, mouth             3       0.7305         22.9         19.1          9.4
                         & throat O.R.
                         procedures w CC/MCC.
134...................  Other ear, nose, mouth             1       0.7305         22.9         19.1          3.2
                         & throat O.R.
                         procedures w/o CC/MCC.
135...................  Sinus & mastoid                    0       0.7305         22.9         19.1         10.8
                         procedures w CC/MCC.
136...................  Sinus & mastoid                    0       0.7305         22.9         19.1          3.9
                         procedures w/o CC/MCC.
137...................  Mouth procedures w CC/             1       1.5545         35.2         29.3          8.7
                         MCC.
138...................  Mouth procedures w/o CC/           0       1.5545         35.2         29.3          3.7
                         MCC.
139...................  Salivary gland                     1       1.5545         35.2         29.3          2.5
                         procedures.
146...................  Ear, nose, mouth &                43       1.1977         26.4         22.0         16.9
                         throat malignancy w
                         MCC.
147...................  Ear, nose, mouth &                36       1.0416         24.9         20.8          9.3
                         throat malignancy w CC.
148...................  Ear, nose, mouth &                 4       0.7305         22.9         19.1          5.6
                         throat malignancy w/o
                         CC/MCC.
149...................  Dysequilibrium.........            9       0.5472         20.3         16.9          4.2
150...................  Epistaxis w MCC........            0       0.7305         22.9         19.1          8.8
151...................  Epistaxis w/o MCC......            0       0.7305         22.9         19.1          4.5
152...................  Otitis media & URI w              10       0.7305         22.9         19.1          7.4
                         MCC.
153...................  Otitis media & URI w/o            23       0.7305         22.9         19.1          5.2
                         MCC.
154...................  Nasal trauma &                    55       0.7703         21.0         17.5         10.5
                         deformity w MCC.
155...................  Nasal trauma &                    45       0.7703         21.0         17.5          7.2
                         deformity w CC.
156...................  Nasal trauma &                    10       0.7305         22.9         19.1          4.9
                         deformity w/o CC/MCC.
157...................  Dental & Oral Diseases             9       0.8249         25.0         20.8         11.3
                         w MCC.
158...................  Dental & Oral Diseases            19       0.8249         25.0         20.8          7.1
                         w CC.
159...................  Dental & Oral Diseases             1       0.5472         20.3         16.9          4.8
                         w/o CC/MCC.
163...................  Major chest procedures            27       2.2157         39.7         33.1         23.6
                         w MCC.
164...................  Major chest procedures            10       1.5545         35.2         29.3         13.0
                         w CC.
165...................  Major chest procedures             0       1.5545         35.2         29.3          8.3
                         w/o CC/MCC.
166...................  Other resp system O.R.         1,572       2.4392         42.3         35.3         20.6
                         procedures w MCC.
167...................  Other resp system O.R.           233       2.1594         38.0         31.7         13.1
                         procedures w CC.
168...................  Other resp system O.R.            11       1.1417         29.0         24.2          8.9
                         procedures w/o CC/MCC.
175...................  Pulmonary embolism w             103       0.7160         22.0         18.3         11.6
                         MCC.
176...................  Pulmonary embolism w/o           139       0.5989         20.1         16.8          8.4
                         MCC.
177...................  Respiratory infections         2,953       0.8393         23.5         19.6         14.9
                         & inflammations w MCC.
178...................  Respiratory infections         2,265       0.7671         22.2         18.5         11.7
                         & inflammations w CC.
179...................  Respiratory infections           370       0.6885         19.0         15.8          8.9
                         & inflammations w/o CC/
                         MCC.
180...................  Respiratory neoplasms w          162       0.8140         20.2         16.8         13.1
                         MCC.
181...................  Respiratory neoplasms w          109       0.7103         19.3         16.1          9.7
                         CC.
182...................  Respiratory neoplasms w/          19       0.5472         20.3         16.9          6.9
                         o CC/MCC.
183...................  Major chest trauma w               1       0.5472         20.3         16.9         11.5
                         MCC.
184...................  Major chest trauma w CC            1       0.5472         20.3         16.9          7.3
185...................  Major chest trauma w/o             0       0.5472         20.3         16.9          5.0
                         CC/MCC.
186...................  Pleural effusion w MCC.          137       0.8259         23.6         19.7         12.2
187...................  Pleural effusion w CC..           63       0.7042         21.1         17.6          8.8
188...................  Pleural effusion w/o CC/          14       0.7042         21.1         17.6          6.5
                         MCC.
189...................  Pulmonary edema &              5,707       0.9743         24.0         20.0         10.1
                         respiratory failure.
190...................  Chronic obstructive            1,657       0.6858         20.9         17.4         10.2
                         pulmonary disease w
                         MCC.
191...................  Chronic obstructive            1,558       0.6256         19.5         16.3          7.9
                         pulmonary disease w CC.
192...................  Chronic obstructive              871       0.5832         17.2         14.3          6.2
                         pulmonary disease w/o
                         CC/MCC.

[[Page 48146]]

 
193...................  Simple pneumonia &             1,689       0.7088         21.6         18.0         10.9
                         pleurisy w MCC.
194...................  Simple pneumonia &             2,110       0.6429         19.8         16.5          8.2
                         pleurisy w CC.
195...................  Simple pneumonia &               455       0.5962         18.2         15.2          6.3
                         pleurisy w/o CC/MCC.
196...................  Interstitial lung                114       0.6529         20.0         16.7         11.6
                         disease w MCC.
197...................  Interstitial lung                 95       0.6133         19.6         16.3          8.5
                         disease w CC.
198...................  Interstitial lung                 44       0.5956         19.7         16.4          6.7
                         disease w/o CC/MCC.
199...................  Pneumothorax w MCC.....           24       0.8249         25.0         20.8         13.8
200...................  Pneumothorax w CC......           17       0.7305         22.9         19.1          8.3
201...................  Pneumothorax w/o CC/MCC           10       0.5472         20.3         16.9          6.5
202...................  Bronchitis & asthma w             96       0.6903         21.1         17.6          6.9
                         CC/MCC.
203...................  Bronchitis & asthma w/o           34       0.5650         17.1         14.3          5.3
                         CC/MCC.
204...................  Respiratory signs &              309       0.8187         22.0         18.3          4.4
                         symptoms.
205...................  Other respiratory                261       0.8207         22.4         18.7          9.0
                         system diagnoses w MCC.
206...................  Other respiratory                167       0.7667         21.5         17.9          5.5
                         system diagnoses w/o
                         MCC.
207...................  Respiratory system            12,448       2.0266         34.3         28.6         22.6
                         diagnosis w ventilator
                         support 96+ hours.
208...................  Respiratory system             1,890       1.5514         27.8         23.2         12.5
                         diagnosis w ventilator
                         support <96 hours.
215...................  Other heart assist                 0       0.8249         25.0         20.8         20.5
                         system implant.
216...................  Cardiac valve & oth maj            0       1.5545         35.2         29.3         28.7
                         cardiothoracic proc w
                         card cath w MCC.
217...................  Cardiac valve & oth maj            0       0.8249         25.0         20.8         17.7
                         cardiothoracic proc w
                         card cath w CC.
218...................  Cardiac valve & oth maj            0       0.8249         25.0         20.8         12.7
                         cardiothoracic proc w
                         card cath w/o CC/MCC.
219...................  Cardiac valve & oth maj            0       1.5545         35.2         29.3         22.6
                         cardiothoracic proc w/
                         o card cath w MCC.
220...................  Cardiac valve & oth maj            0       0.8249         25.0         20.8         12.5
                         cardiothoracic proc w/
                         o card cath w CC.
221...................  Cardiac valve & oth maj            0       0.8249         25.0         20.8          8.7
                         cardiothoracic proc w/
                         o card cath w/o CC/MCC.
222...................  Cardiac defib implant w            0       1.5545         35.2         29.3         20.9
                         cardiac cath w AMI/HF/
                         shock w MCC.
223...................  Cardiac defib implant w            0       1.5545         35.2         29.3         11.0
                         cardiac cath w AMI/HF/
                         shock w/o MCC.
224...................  Cardiac defib implant w            0       1.5545         35.2         29.3         18.2
                         cardiac cath w/o AMI/
                         HF/shock w MCC.
225...................  Cardiac defib implant w            0       1.5545         35.2         29.3          9.2
                         cardiac cath w/o AMI/
                         HF/shock w/o MCC.
226...................  Cardiac defibrillator             11       1.5545         35.2         29.3         16.8
                         implant w/o cardiac
                         cath w MCC.
227...................  Cardiac defibrillator              4       1.5545         35.2         29.3          4.1
                         implant w/o cardiac
                         cath w/o MCC.
228...................  Other cardiothoracic               0       1.5410         35.0         29.2         23.2
                         procedures w MCC.
229...................  Other cardiothoracic               0       1.2681         30.8         25.7         13.5
                         procedures w CC.
230...................  Other cardiothoracic               0       0.8249         25.0         20.8         10.2
                         procedures w/o CC/MCC.
231...................  Coronary bypass w PTCA             0       1.5545         35.2         29.3         20.9
                         w MCC.
232...................  Coronary bypass w PTCA             0       0.8249         25.0         20.8         13.1
                         w/o MCC.
233...................  Coronary bypass w                  0       1.5545         35.2         29.3         21.0
                         cardiac cath w MCC.
234...................  Coronary bypass w                  0       0.8249         25.0         20.8         12.2
                         cardiac cath w/o MCC.
235...................  Coronary bypass w/o                0       1.5545         35.2         29.3         17.0
                         cardiac cath w MCC.
236...................  Coronary bypass w/o                0       0.8249         25.0         20.8          9.0
                         cardiac cath w/o MCC.
237...................  Major cardiovasc                   3       1.5545         35.2         29.3         19.6
                         procedures w MCC or
                         thoracic aortic
                         anuerysm repair.
238...................  Major cardiovasc                   3       0.8249         25.0         20.8          8.1
                         procedures w/o MCC.
239...................  Amputation for circ sys          171       1.3794         37.4         31.2         24.7
                         disorders exc upper
                         limb & toe w MCC.
240...................  Amputation for circ sys           94       1.2872         36.1         30.1         16.6
                         disorders exc upper
                         limb & toe w CC.
241...................  Amputation for circ sys            5       1.1417         29.0         24.2         10.7
                         disorders exc upper
                         limb & toe w/o CC/MCC.
242...................  Permanent cardiac                 14       1.5545         35.2         29.3         14.5
                         pacemaker implant w
                         MCC.
243...................  Permanent cardiac                  9       1.5545         35.2         29.3          8.5
                         pacemaker implant w CC.
244...................  Permanent cardiac                  3       1.1417         29.0         24.2          4.6
                         pacemaker implant w/o
                         CC/MCC.
245...................  AICD lead & generator              2       0.7305         22.9         19.1          4.9
                         procedures.
246...................  Perc cardiovasc proc w             1       0.8249         25.0         20.8          9.1
                         drug-eluting stent w
                         MCC or 4+ vessels/
                         stents.
247...................  Perc cardiovasc proc w             0       0.8249         25.0         20.8          3.3
                         drug-eluting stent w/o
                         MCC.
248...................  Perc cardiovasc proc w             1       1.5545         35.2         29.3         10.3
                         non-drug-eluting stent
                         w MCC or 4+ ves/stents.

[[Page 48147]]

 
249...................  Perc cardiovasc proc w             0       1.5545         35.2         29.3          3.9
                         non-drug-eluting stent
                         w/o MCC.
250...................  Perc cardiovasc proc w/            1       0.8249         25.0         20.8         12.7
                         o coronary artery
                         stent or AMI w MCC.
251...................  Perc cardiovasc proc w/            0       0.8249         25.0         20.8          4.6
                         o coronary artery
                         stent or AMI w/o MCC.
252...................  Other vascular                   108       1.5410         35.0         29.2         15.1
                         procedures w MCC.
253...................  Other vascular                    56       1.2681         30.8         25.7         10.2
                         procedures w CC.
254...................  Other vascular                     5       0.8249         25.0         20.8          4.3
                         procedures w/o CC/MCC.
255...................  Upper limb & toe                  45       1.1713         33.7         28.1         16.7
                         amputation for circ
                         system disorders w MCC.
256...................  Upper limb & toe                  37       0.9516         29.4         24.5         12.3
                         amputation for circ
                         system disorders w CC.
257...................  Upper limb & toe                   1       0.9516         29.4         24.5          8.2
                         amputation for circ
                         system disorders w/o
                         CC/MCC.
258...................  Cardiac pacemaker                  1       1.5545         35.2         29.3         12.6
                         device replacement w
                         MCC.
259...................  Cardiac pacemaker                  0       1.5545         35.2         29.3          4.0
                         device replacement w/o
                         MCC.
260...................  Cardiac pacemaker                  1       1.5545         35.2         29.3         17.4
                         revision except device
                         replacement w MCC.
261...................  Cardiac pacemaker                  2       0.5472         20.3         16.9          6.4
                         revision except device
                         replacement w CC.
262...................  Cardiac pacemaker                  0       0.5472         20.3         16.9          3.7
                         revision except device
                         replacement w/o CC/MCC.
263...................  Vein ligation &                    1       0.8249         25.0         20.8          9.2
                         stripping.
264...................  Other circulatory                595       1.0667         31.6         26.3         15.4
                         system O.R. procedures.
280...................  Acute myocardial                 107       0.7263         21.4         17.8         12.0
                         infarction, discharged
                         alive w MCC.
281...................  Acute myocardial                  60       0.6931         22.8         19.0          7.8
                         infarction, discharged
                         alive w CC.
282...................  Acute myocardia                    7       0.6931         22.8         19.0          5.1
                         infarction, discharged
                         alive w/o CC/MCC.
283...................  Acute myocardial                  26       0.6609         17.0         14.2          9.0
                         infarction, expired w
                         MCC.
284...................  Acute myocardial                   5       0.6609         17.0         14.2          5.4
                         infarction, expired w
                         CC.
285...................  Acute myocardial                   1       0.6609         17.0         14.2          3.3
                         infarction, expired w/
                         o CC/MCC.
286...................  Circulatory disorders             15       1.1417         29.0         24.2         11.6
                         except AMI, w card
                         cath w MCC.
287...................  Circulatory disorders              7       0.8249         25.0         20.8          5.0
                         except AMI, w card
                         cath w/o MCC.
288...................  Acute & subacute                 453       0.9082         26.4         22.0         19.7
                         endocarditis w MCC.
289...................  Acute & subacute                 225       0.8580         26.4         22.0         13.7
                         endocarditis w CC.
290...................  Acute & subacute                  53       0.7664         25.5         21.3         10.6
                         endocarditis w/o CC/
                         MCC.
291...................  Heart failure & shock w        1,601       0.6968         21.4         17.8         10.7
                         MCC.
292...................  Heart failure & shock w        1,183       0.6252         20.4         17.0          7.7
                         CC.
293...................  Heart failure & shock w/         387       0.5775         18.5         15.4          5.6
                         o CC/MCC.
294...................  Deep vein                          7       0.8249         25.0         20.8          8.6
                         thrombophlebitis w CC/
                         MCC.
295...................  Deep vein                          0       0.8249         25.0         20.8          6.7
                         thrombophlebitis w/o
                         CC/MCC.
296...................  Cardiac arrest,                    0       0.6609         17.0         14.2          4.8
                         unexplained w MCC.
297...................  Cardiac arrest,                    0       0.6609         17.0         14.2          2.7
                         unexplained w CC.
298...................  Cardiac arrest,                    0       0.6609         17.0         14.2          1.9
                         unexplained w/o CC/MCC.
299...................  Peripheral vascular              551       0.7152         24.8         20.7         11.2
                         disorders w MCC.
300...................  Peripheral vascular              800       0.6150         22.2         18.5          8.2
                         disorders w CC.
301...................  Peripheral vascular               93       0.5557         19.4         16.2          6.0
                         disorders w/o CC/MCC.
302...................  Atherosclerosis w MCC..           69       0.6170         21.9         18.3          6.9
303...................  Atherosclerosis w/o MCC           93       0.5673         20.5         17.1          3.9
304...................  Hypertension w MCC.....           12       0.8249         25.0         20.8          8.3
305...................  Hypertension w/o MCC...           39       0.5856         22.6         18.8          4.4
306...................  Cardiac congenital &              54       0.8786         24.2         20.2         10.2
                         valvular disorders w
                         MCC.
307...................  Cardiac congenital &              39       0.7767         23.1         19.3          5.5
                         valvular disorders w/o
                         MCC.
308...................  Cardiac arrhythmia &              88       0.7431         24.7         20.6          9.3
                         conduction disorders w
                         MCC.
309...................  Cardiac arrhythmia &              76       0.5940         20.4         17.0          6.2
                         conduction disorders w
                         CC.
310...................  Cardiac arrhythmia &              39       0.5184         17.0         14.2          4.2
                         conduction disorders w/
                         o CC/MCC.
311...................  Angina pectoris........            4       0.7305         22.9         19.1          3.5
312...................  Syncope & collapse.....           44       0.5336         19.7         16.4          4.9
313...................  Chest pain.............            5       0.5472         20.3         16.9          3.1
314...................  Other circulatory              1,399       0.8123         23.1         19.3         11.8
                         system diagnoses w MCC.
315...................  Other circulatory                451       0.7114         21.6         18.0          7.3
                         system diagnoses w CC.
316...................  Other circulatory                 98       0.6243         18.9         15.8          4.7
                         system diagnoses w/o
                         CC/MCC.
326...................  Stomach, esophageal &             34       1.8646         36.2         30.2         28.1
                         duodenal proc w MCC.
327...................  Stomach, esophageal &              9       1.5545         35.2         29.3         16.8
                         duodenal proc w CC.
328...................  Stomach, esophageal &              1       0.5472         20.3         16.9          7.2
                         duodenal proc w/o CC/
                         MCC.
329...................  Major small & large               24       1.5545         35.2         29.3         25.3
                         bowel procedures w MCC.
330...................  Major small & large               20       1.5545         35.2         29.3         14.6
                         bowel procedures w CC.
331...................  Major small & large                1       0.5472         20.3         16.9          8.7
                         bowel procedures w/o
                         CC/MCC.

[[Page 48148]]

 
332...................  Rectal resection w MCC.            0       1.5057         36.1         30.1         22.6
333...................  Rectal resection w CC..            0       1.3309         30.7         25.6         13.0
334...................  Rectal resection w/o CC/           0       0.8249         25.0         20.8          8.6
                         MCC.
335...................  Peritoneal adhesiolysis            4       1.5545         35.2         29.3         22.9
                         w MCC.
336...................  Peritoneal adhesiolysis            2       0.7305         22.9         19.1         14.6
                         w CC.
337...................  Peritoneal adhesiolysis            0       0.7305         22.9         19.1          9.3
                         w/o CC/MCC.
338...................  Appendectomy w                     0       0.8884         24.1         20.1         16.7
                         complicated principal
                         diag w MCC.
339...................  Appendectomy w                     0       0.7667         22.2         18.5         10.8
                         complicated principal
                         diag w CC.
340...................  Appendectomy w                     0       0.6856         19.9         16.6          6.6
                         complicated principal
                         diag w/o CC/MCC.
341...................  Appendectomy w/o                   0       0.8884         24.1         20.1         12.0
                         complicated principal
                         diag w MCC.
342...................  Appendectomy w/o                   0       0.7667         22.2         18.5          6.8
                         complicated principal
                         diag w CC.
343...................  Appendectomy w/o                   0       0.6856         19.9         16.6          3.4
                         complicated principal
                         diag w/o CC/MCC.
344...................  Minor small & large                0       0.8884         24.1         20.1         19.1
                         bowel procedures w MCC.
345...................  Minor small & large                0       0.7667         22.2         18.5         10.9
                         bowel procedures w CC.
346...................  Minor small & large                0       0.6856         19.9         16.6          7.4
                         bowel procedures w/o
                         CC/MCC.
347...................  Anal & stomal                      5       1.1417         29.0         24.2         13.8
                         procedures w MCC.
348...................  Anal & stomal                      3       0.8249         25.0         20.8          8.9
                         procedures w CC.
349...................  Anal & stomal                      1       0.5472         20.3         16.9          4.7
                         procedures w/o CC/MCC.
350...................  Inguinal & femoral                 1       1.5545         35.2         29.3         13.6
                         hernia procedures w
                         MCC.
351...................  Inguinal & femoral                 1       1.1417         29.0         24.2          7.4
                         hernia procedures w CC.
352...................  Inguinal & femoral                 1       0.8249         25.0         20.8          3.7
                         hernia procedures w/o
                         CC/MCC.
353...................  Hernia procedures                  0       0.8249         25.0         20.8         14.5
                         except inguinal &
                         femoral w MCC.
354...................  Hernia procedures                  1       0.8249         25.0         20.8          8.2
                         except inguinal &
                         femoral w CC.
355...................  Hernia procedures                  0       0.8249         25.0         20.8          4.4
                         except inguinal &
                         femoral w/o CC/MCC.
356...................  Other digestive system           109       1.5057         36.1         30.1         22.5
                         O.R. procedures w MCC.
357...................  Other digestive system            46       1.3309         30.7         25.6         13.3
                         O.R. procedures w CC.
358...................  Other digestive system             3       0.8249         25.0         20.8          7.6
                         O.R. procedures w/o CC/
                         MCC.
368...................  Major esophageal                  22       1.1417         29.0         24.2         10.5
                         disorders w MCC.
369...................  Major esophageal                   8       1.1417         29.0         24.2          7.1
                         disorders w CC.
370...................  Major esophageal                   1       1.1417         29.0         24.2          5.2
                         disorders w/o CC/MCC.
371...................  Major gastrointestinal           666       0.8884         24.1         20.1         14.1
                         disorders & peritoneal
                         infections w MCC.
372...................  Major gastrointestinal           426       0.7667         22.2         18.5         10.6
                         disorders & peritoneal
                         infections w CC.
373...................  Major gastrointestinal            52       0.6856         19.9         16.6          7.7
                         disorders & peritoneal
                         infections w/o CC/MCC.
374...................  Digestive malignancy w           122       0.8340         22.9         19.1         14.4
                         MCC.
375...................  Digestive malignancy w            81       0.7563         19.7         16.4          9.7
                         CC.
376...................  Digestive malignancy w/            9       0.5472         20.3         16.9          6.5
                         o CC/MCC.
377...................  G.I. hemorrhage w MCC..           94       0.7032         22.5         18.8         10.3
378...................  G.I. hemorrhage w CC...           60       0.6334         21.5         17.9          6.8
379...................  G.I. hemorrhage w/o CC/           20       0.5472         20.3         16.9          5.2
                         MCC.
380...................  Complicated peptic                14       0.8249         25.0         20.8         11.4
                         ulcer w MCC.
381...................  Complicated peptic                16       0.8249         25.0         20.8          7.9
                         ulcer w CC.
382...................  Complicated peptic                 6       0.7305         22.9         19.1          5.5
                         ulcer w/o CC/MCC.
383...................  Uncomplicated peptic               6       0.8249         25.0         20.8          9.1
                         ulcer w MCC.
384...................  Uncomplicated peptic               6       0.7305         22.9         19.1          5.9
                         ulcer w/o MCC.
385...................  Inflammatory bowel                32       0.8874         24.6         20.5         14.4
                         disease w MCC.
386...................  Inflammatory bowel                26       0.7655         22.9         19.1          9.0
                         disease w CC.
387...................  Inflammatory bowel                 5       0.7655         22.9         19.1          6.9
                         disease w/o CC/MCC.
388...................  G.I. obstruction w MCC.          191       0.8967         22.8         19.0         12.0
389...................  G.I. obstruction w CC..           91       0.7893         21.9         18.3          8.0
390...................  G.I. obstruction w/o CC/          12       0.7893         21.9         18.3          5.5
                         MCC.
391...................  Esophagitis, gastroent           246       0.8509         24.4         20.3          8.7
                         & misc digest
                         disorders w MCC.
392...................  Esophagitis, gastroent           266       0.6943         20.4         17.0          5.5
                         & misc digest
                         disorders w/o MCC.
393...................  Other digestive system           678       0.9915         25.5         21.3         11.4
                         diagnoses w MCC.
394...................  Other digestive system           388       0.8523         22.0         18.3          7.7
                         diagnoses w CC.
395...................  Other digestive system            31       0.7214         20.9         17.4          5.3
                         diagnoses w/o CC/MCC.
405...................  Pancreas, liver & shunt            9       1.5545         35.2         29.3         29.0
                         procedures w MCC.
406...................  Pancreas, liver & shunt            2       1.5545         35.2         29.3         16.0
                         procedures w CC.
407...................  Pancreas, liver & shunt            1       1.1417         29.0         24.2          9.2
                         procedures w/o CC/MCC.
408...................  Biliary tract proc                 1       1.5545         35.2         29.3         23.7
                         except only cholecyst
                         w or w/o c.d.e. w MCC.
409...................  Biliary tract proc                 1       1.5545         35.2         29.3         15.4
                         except only cholecyst
                         w or w/o c.d.e. w CC.

[[Page 48149]]

 
410...................  Biliary tract proc                 0       1.5545         35.2         29.3         10.6
                         except only cholecyst
                         w or w/o c.d.e. w/o CC/
                         MCC.
411...................  Cholecystectomy w                  0       1.1417         29.0         24.2         20.3
                         c.d.e. w MCC.
412...................  Cholecystectomy w                  1       1.1417         29.0         24.2         13.5
                         c.d.e. w CC.
413...................  Cholecystectomy w                  0       1.1417         29.0         24.2          9.3
                         c.d.e. w/o CC/MCC.
414...................  Cholecystectomy except             2       1.1417         29.0         24.2         18.4
                         by laparoscope w/o
                         c.d.e. w MCC.
415...................  Cholecystectomy except             3       1.1417         29.0         24.2         11.6
                         by laparoscope w/o
                         c.d.e. w CC.
416...................  Cholecystectomy except             0       1.1417         29.0         24.2          7.5
                         by laparoscope w/o
                         c.d.e. w/o CC/MCC.
417...................  Laparoscopic                       7       1.5545         35.2         29.3         13.5
                         cholecystectomy w/o
                         c.d.e. w MCC.
418...................  Laparoscopic                       5       1.1417         29.0         24.2          9.0
                         cholecystectomy w/o
                         c.d.e. w CC.
419...................  Laparoscopic                       0       1.1417         29.0         24.2          5.0
                         cholecystectomy w/o
                         c.d.e. w/o CC/MCC.
420...................  Hepatobiliary                      2       1.1417         29.0         24.2         24.2
                         diagnostic procedures
                         w MCC.
421...................  Hepatobiliary                      1       0.8249         25.0         20.8         12.9
                         diagnostic procedures
                         w CC.
422...................  Hepatobiliary                      0       0.8249         25.0         20.8          7.3
                         diagnostic procedures
                         w/o CC/MCC.
423...................  Other hepatobiliary or            23       1.1417         29.0         24.2         24.2
                         pancreas O.R.
                         procedures w MCC.
424...................  Other hepatobiliary or             5       0.8249         25.0         20.8         17.1
                         pancreas O.R.
                         procedures w CC.
425...................  Other hepatobiliary or             0       0.8249         25.0         20.8          9.2
                         pancreas O.R.
                         procedures w/o CC/MCC.
432...................  Cirrhosis & alcoholic             98       0.6223         19.0         15.8         11.1
                         hepatitis w MCC.
433...................  Cirrhosis & alcoholic             21       0.6223         19.0         15.8          7.7
                         hepatitis w CC.
434...................  Cirrhosis & alcoholic              1       0.5472         20.3         16.9          5.7
                         hepatitis w/o CC/MCC.
435...................  Malignancy of                     47       0.7422         20.2         16.8         12.6
                         hepatobiliary system
                         or pancreas w MCC.
436...................  Malignancy of                     34       0.7086         19.6         16.3          9.5
                         hepatobiliary system
                         or pancreas w CC.
437...................  Malignancy of                      4       0.7086         19.6         16.3          7.1
                         hepatobiliary system
                         or pancreas w/o CC/MCC.
438...................  Disorders of pancreas            251       1.0057         24.3         20.3         12.5
                         except malignancy w
                         MCC.
439...................  Disorders of pancreas            166       0.8437         21.9         18.3          8.5
                         except malignancy w CC.
440...................  Disorders of pancreas             28       0.7204         18.8         15.7          5.9
                         except malignancy w/o
                         CC/MCC.
441...................  Disorders of liver               116       0.7588         21.8         18.2         11.3
                         except malig, cirr,
                         alc hepa w MCC.
442...................  Disorders of liver                67       0.6925         21.2         17.7          8.1
                         except malig, cirr,
                         alc hepa w CC.
443...................  Disorders of liver                12       0.6925         21.2         17.7          6.0
                         except malig, cirr,
                         alc hepa w/o CC/MCC.
444...................  Disorders of the                  71       0.8181         24.0         20.0         10.7
                         biliary tract w MCC.
445...................  Disorders of the                  41       0.6977         21.7         18.1          7.6
                         biliary tract w CC.
446...................  Disorders of the                   7       0.5472         20.3         16.9          5.2
                         biliary tract w/o CC/
                         MCC.
453...................  Combined anterior/                 0       1.5545         35.2         29.3         24.9
                         posterior spinal
                         fusion w MCC.
454...................  Combined anterior/                 1       1.5545         35.2         29.3         12.7
                         posterior spinal
                         fusion w CC.
455...................  Combined anterior/                 0       1.5545         35.2         29.3          7.1
                         posterior spinal
                         fusion w/o CC/MCC.
456...................  Spinal fus exc cerv w              1       1.5545         35.2         29.3         24.9
                         spinal curv/malig/
                         infec or 9+ fus w MCC.
457...................  Spinal fus exc cerv w              0       1.5545         35.2         29.3         11.6
                         spinal curv/malig/
                         infec or 9+ fus w CC.
458...................  Spinal fus exc cerv w              0       1.5545         35.2         29.3          6.8
                         spinal curv/malig/
                         infec or 9+ fus w/o CC/
                         MCC.
459...................  Spinal fusion except               2       1.5545         35.2         29.3         14.7
                         cervical w MCC.
460...................  Spinal fusion except               3       1.5545         35.2         29.3          6.4
                         cervical w/o MCC.
461...................  Bilateral or multiple              0       1.5545         35.2         29.3         12.6
                         major joint procs of
                         lower extremity w MCC.
462...................  Bilateral or multiple              0       1.1417         29.0         24.2          5.8
                         major joint procs of
                         lower extremity w/o
                         MCC.
463...................  Wnd debrid & skn grft            507       1.3514         38.8         32.3         27.4
                         exc hand, for musculo-
                         conn tiss dis w MCC.
464...................  Wnd debrid & skn grft            311       1.1906         36.3         30.3         16.8
                         exc hand, for musculo-
                         conn tiss dis w CC.
465...................  Wnd debrid & skn grft             60       1.0747         29.6         24.7         10.0
                         exc hand, for musculo-
                         conn tiss dis w/o CC/
                         MCC.
466...................  Revision of hip or knee            3       1.5545         35.2         29.3         14.5
                         replacement w MCC.
467...................  Revision of hip or knee            4       1.5545         35.2         29.3          8.0
                         replacement w CC.
468...................  Revision of hip or knee            0       1.5545         35.2         29.3          5.5
                         replacement w/o CC/MCC.
469...................  Major joint replacement            2       1.5545         35.2         29.3         12.6
                         or reattachment of
                         lower extremity w MCC.
470...................  Major joint replacement            2       1.5545         35.2         29.3          5.4
                         or reattachment of
                         lower extremity w/o
                         MCC.
471...................  Cervical spinal fusion             5       1.5545         35.2         29.3         17.3
                         w MCC.
472...................  Cervical spinal fusion             2       1.5545         35.2         29.3          7.0
                         w CC.
473...................  Cervical spinal fusion             0       1.5545         35.2         29.3          2.9
                         w/o CC/MCC.

[[Page 48150]]

 
474...................  Amputation for                    91       1.3338         36.6         30.5         20.4
                         musculoskeletal sys &
                         conn tissue dis w MCC.
475...................  Amputation for                    53       1.1390         32.7         27.3         13.9
                         musculoskeletal sys &
                         conn tissue dis w CC.
476...................  Amputation for                     8       1.1390         32.7         27.3          8.0
                         musculoskeletal sys &
                         conn tissue dis w/o CC/
                         MCC.
477...................  Biopsies of                       13       1.5545         35.2         29.3         20.7
                         musculoskeletal system
                         & connective tissue w
                         MCC.
478...................  Biopsies of                       14       1.1417         29.0         24.2         11.9
                         musculoskeletal system
                         & connective tissue w
                         CC.
479...................  Biopsies of                        5       1.1417         29.0         24.2          4.3
                         musculoskeletal system
                         & connective tissue w/
                         o CC/MCC.
480...................  Hip & femur procedures            11       1.5545         35.2         29.3         14.1
                         except major joint w
                         MCC.
481...................  Hip & femur procedures            19       1.5545         35.2         29.3          8.4
                         except major joint w
                         CC.
482...................  Hip & femur procedures             1       1.1417         29.0         24.2          6.8
                         except major joint w/o
                         CC/MCC.
483...................  Major joint & limb                 0       1.5545         35.2         29.3          6.6
                         reattachment proc of
                         upper extremity w CC/
                         MCC.
484...................  Major joint & limb                 0       1.1417         29.0         24.2          3.6
                         reattachment proc of
                         upper extremity w/o CC/
                         MCC.
485...................  Knee procedures w pdx             10       1.5545         35.2         29.3         18.9
                         of infection w MCC.
486...................  Knee procedures w pdx              9       1.1417         29.0         24.2         12.3
                         of infection w CC.
487...................  Knee procedures w pdx              1       1.1417         29.0         24.2          8.5
                         of infection w/o CC/
                         MCC.
488...................  Knee procedures w/o pdx            2       1.5545         35.2         29.3          7.8
                         of infection w CC/MCC.
489...................  Knee procedures w/o pdx            0       1.5545         35.2         29.3          4.7
                         of infection w/o CC/
                         MCC.
490...................  Back & neck proc exc               7       1.1417         29.0         24.2          7.6
                         spinal fusion w CC/MCC
                         or disc device/
                         neurostim.
491...................  Back & neck proc exc               0       1.1417         29.0         24.2          3.4
                         spinal fusion w/o CC/
                         MCC.
492...................  Lower extrem & humer               5       1.5545         35.2         29.3         13.6
                         proc except hip, foot,
                         femur w MCC.
493...................  Lower extrem & humer              19       1.1417         29.0         24.2          8.2
                         proc except hip, foot,
                         femur w CC.
494...................  Lower extrem & humer               1       0.8249         25.0         20.8          5.1
                         proc except hip, foot,
                         femur w/o CC/MCC.
495...................  Local excision &                  32       1.3650         38.1         31.8         18.2
                         removal int fix
                         devices exc hip &
                         femur w MCC.
496...................  Local excision &                  25       1.1981         36.8         30.7          9.8
                         removal int fix
                         devices exc hip &
                         femur w CC.
497...................  Local excision &                   3       1.1417         29.0         24.2          4.9
                         removal int fix
                         devices exc hip &
                         femur w/o CC/MCC.
498...................  Local excision &                   8       1.5545         35.2         29.3         13.4
                         removal int fix
                         devices of hip & femur
                         w CC/MCC.
499...................  Local excision &                   2       0.7305         22.9         19.1          4.9
                         removal int fix
                         devices of hip & femur
                         w/o CC/MCC.
500...................  Soft tissue procedures            46       1.3212         35.2         29.3         18.8
                         w MCC.
501...................  Soft tissue procedures            28       1.2903         30.7         25.6          9.6
                         w CC.
502...................  Soft tissue procedures             3       0.8249         25.0         20.8          4.5
                         w/o CC/MCC.
503...................  Foot procedures w MCC..           18       1.1417         29.0         24.2         14.6
504...................  Foot procedures w CC...           13       0.8249         25.0         20.8         10.5
505...................  Foot procedures w/o CC/            1       0.5472         20.3         16.9          5.3
                         MCC.
506...................  Major thumb or joint               0       0.7305         22.9         19.1          5.0
                         procedures.
507...................  Major shoulder or elbow            3       0.8249         25.0         20.8          8.4
                         joint procedures w CC/
                         MCC.
508...................  Major shoulder or elbow            0       0.8249         25.0         20.8          3.0
                         joint procedures w/o
                         CC/MCC.
509...................  Arthroscopy............            0       0.5472         20.3         16.9          4.2
510...................  Shoulder, elbow or                 0       1.1417         29.0         24.2         10.7
                         forearm proc, exc
                         major joint proc w MCC.
511...................  Shoulder, elbow or                 4       1.1417         29.0         24.2          6.2
                         forearm proc, exc
                         major joint proc w CC.
512...................  Shoulder, elbow or                 1       0.5472         20.3         16.9          3.1
                         forearm proc, exc
                         major joint proc w/o
                         CC/MCC.
513...................  Hand or wrist proc,                4       1.5545         35.2         29.3          8.4
                         except major thumb or
                         joint proc w CC/MCC.
514...................  Hand or wrist proc,                4       0.7305         22.9         19.1          4.0
                         except major thumb or
                         joint proc w/o CC/MCC.
515...................  Other musculoskelet sys           49       1.3230         34.8         29.0         18.1
                         & conn tiss O.R. proc
                         w MCC.
516...................  Other musculoskelet sys           21       1.1417         29.0         24.2         10.1
                         & conn tiss O.R. proc
                         w CC.
517...................  Other musculoskelet sys            6       0.8249         25.0         20.8          4.5
                         & conn tiss O.R. proc
                         w/o CC/MCC.
533...................  Fractures of femur w               3       0.8249         25.0         20.8         11.2
                         MCC.
534...................  Fractures of femur w/o             7       0.7305         22.9         19.1          6.3
                         MCC.

[[Page 48151]]

 
535...................  Fractures of hip &                19       0.7305         22.9         19.1         10.1
                         pelvis w MCC.
536...................  Fractures of hip &                33       0.5998         23.7         19.8          6.0
                         pelvis w/o MCC.
537...................  Sprains, strains, &                0       0.5472         20.3         16.9          7.3
                         dislocations of hip,
                         pelvis & thigh w CC/
                         MCC.
538...................  Sprains, strains, &                0       0.5472         20.3         16.9          4.8
                         dislocations of hip,
                         pelvis & thigh w/o CC/
                         MCC.
539...................  Osteomyelitis w MCC....          936       0.9013         29.7         24.8         16.2
540...................  Osteomyelitis w CC.....          767       0.8107         28.7         23.9         11.3
541...................  Osteomyelitis w/o CC/            252       0.7787         26.9         22.4          8.9
                         MCC.
542...................  Pathological fractures            56       0.7359         21.7         18.1         14.0
                         & musculoskelet & conn
                         tiss malig w MCC.
543...................  Pathological fractures            61       0.6347         21.3         17.8          9.4
                         & musculoskelet & conn
                         tiss malig w CC.
544...................  Pathological fractures            17       0.5472         20.3         16.9          6.8
                         & musculoskelet & conn
                         tiss malig w/o CC/MCC.
545...................  Connective tissue                 57       0.8501         23.9         19.9         14.7
                         disorders w MCC.
546...................  Connective tissue                 38       0.6492         20.7         17.3          8.7
                         disorders w CC.
547...................  Connective tissue                 14       0.5472         20.3         16.9          6.1
                         disorders w/o CC/MCC.
548...................  Septic arthritis w MCC.          167       0.8584         28.2         23.5         15.0
549...................  Septic arthritis w CC..          199       0.7347         26.4         22.0          9.8
550...................  Septic arthritis w/o CC/          66       0.6704         23.5         19.6          7.2
                         MCC.
551...................  Medical back problems w          107       0.7305         26.6         22.2         11.6
                         MCC.
552...................  Medical back problems w/         241       0.6022         22.8         19.0          6.5
                         o MCC.
553...................  Bone diseases &                   24       0.8249         25.0         20.8          9.6
                         arthropathies w MCC.
554...................  Bone diseases &                   66       0.4822         20.5         17.1          5.8
                         arthropathies w/o MCC.
555...................  Signs & symptoms of               13       0.7305         22.9         19.1          7.8
                         musculoskeletal system
                         & conn tissue w MCC.
556...................  Signs & symptoms of               16       0.7305         22.9         19.1          5.0
                         musculoskeletal system
                         & conn tissue w/o MCC.
557...................  Tendonitis, myositis &            86       0.8177         25.9         21.6         11.0
                         bursitis w MCC.
558...................  Tendonitis, myositis &           113       0.6919         21.4         17.8          6.6
                         bursitis w/o MCC.
559...................  Aftercare,                     1,370       0.7157         26.2         21.8         11.9
                         musculoskeletal system
                         & connective tissue w
                         MCC.
560...................  Aftercare,                     2,078       0.6393         24.6         20.5          7.5
                         musculoskeletal system
                         & connective tissue w
                         CC.
561...................  Aftercare,                       970       0.5889         21.7         18.1          4.2
                         musculoskeletal system
                         & connective tissue w/
                         o CC/MCC.
562...................  Fx, sprn, strn & disl              6       1.1417         29.0         24.2         10.4
                         except femur, hip,
                         pelvis & thigh w MCC.
563...................  Fx, sprn, strn & disl             22       0.5472         20.3         16.9          5.7
                         except femur, hip,
                         pelvis & thigh w/o MCC.
564...................  Other musculoskeletal            241       0.8134         24.9         20.8         11.6
                         sys & connective
                         tissue diagnoses w MCC.
565...................  Other musculoskeletal            239       0.7382         24.8         20.7          8.1
                         sys & connective
                         tissue diagnoses w CC.
566...................  Other musculoskeletal             62       0.6862         22.1         18.4          5.9
                         sys & connective
                         tissue diagnoses w/o
                         CC/MCC.
573...................  Skin graft &/or debrid         1,864       1.3068         38.0         31.7         22.2
                         for skn ulcer or
                         cellulitis w MCC.
574...................  Skin graft &/or debrid         1,911       1.1567         37.1         30.9         14.9
                         for skn ulcer or
                         cellulitis w CC.
575...................  Skin graft &/or debrid           193       0.9938         31.7         26.4          9.4
                         for skn ulcer or
                         cellulitis w/o CC/MCC.
576...................  Skin graft &/or debrid            22       1.5545         35.2         29.3         20.3
                         exc for skin ulcer or
                         cellulitis w MCC.
577...................  Skin graft &/or debrid            24       1.1417         29.0         24.2          9.9
                         exc for skin ulcer or
                         cellulitis w CC.
578...................  Skin graft &/or debrid             5       0.7305         22.9         19.1          5.4
                         exc for skin ulcer or
                         cellulitis w/o CC/MCC.
579...................  Other skin, subcut tiss          493       1.2793         36.8         30.7         18.5
                         & breast proc w MCC.
580...................  Other skin, subcut tiss          418       1.1001         34.8         29.0          9.0
                         & breast proc w CC.
581...................  Other skin, subcut tiss           29       0.9100         29.9         24.9          3.9
                         & breast proc w/o CC/
                         MCC.
582...................  Mastectomy for                     2       1.5545         35.2         29.3          4.3
                         malignancy w CC/MCC.
583...................  Mastectomy for                     0       1.5545         35.2         29.3          2.6
                         malignancy w/o CC/MCC.
584...................  Breast biopsy, local               2       1.1417         29.0         24.2          9.5
                         excision & other
                         breast procedures w CC/
                         MCC.
585...................  Breast biopsy, local               0       1.1417         29.0         24.2          3.2
                         excision & other
                         breast procedures w/o
                         CC/MCC.
592...................  Skin ulcers w MCC......        2,994       0.8875         27.1         22.6         14.2
593...................  Skin ulcers w CC.......        3,139       0.7877         26.8         22.3         10.0
594...................  Skin ulcers w/o CC/MCC.          405       0.7342         24.3         20.3          7.7

[[Page 48152]]

 
595...................  Major skin disorders w            30       0.7525         24.5         20.4         13.2
                         MCC.
596...................  Major skin disorders w/           53       0.6155         23.8         19.8          7.6
                         o MCC.
597...................  Malignant breast                  13       0.8249         25.0         20.8         13.7
                         disorders w MCC.
598...................  Malignant breast                  17       0.7305         22.9         19.1          9.0
                         disorders w CC.
599...................  Malignant breast                   4       0.7305         22.9         19.1          5.7
                         disorders w/o CC/MCC.
600...................  Non-malignant breast              12       0.7305         22.9         19.1          8.5
                         disorders w CC/MCC.
601...................  Non-malignant breast               9       0.7305         22.9         19.1          6.0
                         disorders w/o CC/MCC.
602...................  Cellulitis w MCC.......          758       0.6643         22.5         18.8         11.1
603...................  Cellulitis w/o MCC.....        1,487       0.5528         19.4         16.2          7.3
604...................  Trauma to the skin,               23       0.8249         25.0         20.8          8.8
                         subcut tiss & breast w
                         MCC.
605...................  Trauma to the skin,               59       0.5685         21.2         17.7          5.4
                         subcut tiss & breast w/
                         o MCC.
606...................  Minor skin disorders w            60       0.8324         23.2         19.3          9.5
                         MCC.
607...................  Minor skin disorders w/           84       0.6776         22.6         18.8          5.9
                         o MCC.
614...................  Adrenal & pituitary                0       1.2008         33.1         27.6         11.6
                         procedures w CC/MCC.
615...................  Adrenal & pituitary                0       0.7305         22.9         19.1          5.1
                         procedures w/o CC/MCC.
616...................  Amputat of lower limb             62       1.4505         41.0         34.2         24.2
                         for endocrine, nutrit,
                         & metabol dis w MCC.
617...................  Amputat of lower limb            117       1.2414         33.3         27.8         14.5
                         for endocrine, nutrit,
                         & metabol dis w CC.
618...................  Amputat of lower limb              2       0.8249         25.0         20.8          9.9
                         for endocrine, nutrit,
                         & metabol dis w/o CC/
                         MCC.
619...................  O.R. procedures for                2       0.8249         25.0         20.8         14.6
                         obesity w MCC.
620...................  O.R. procedures for                3       0.8249         25.0         20.8          6.3
                         obesity w CC.
621...................  O.R. procedures for                0       0.8249         25.0         20.8          3.6
                         obesity w/o CC/MCC.
622...................  Skin grafts & wound              165       1.1462         35.6         29.7         21.1
                         debrid for endoc,
                         nutrit & metab dis w
                         MCC.
623...................  Skin grafts & wound              341       1.0197         32.2         26.8         13.5
                         debrid for endoc,
                         nutrit & metab dis w
                         CC.
624...................  Skin grafts & wound               13       0.8249         25.0         20.8          9.4
                         debrid for endoc,
                         nutrit & metab dis w/o
                         CC/MCC.
625...................  Thyroid, parathyroid &             0       1.3385         36.6         30.5         12.4
                         thyroglossal
                         procedures w MCC.
626...................  Thyroid, parathyroid &             0       1.2008         33.1         27.6          5.0
                         thyroglossal
                         procedures w CC.
627...................  Thyroid, parathyroid &             0       0.7305         22.9         19.1          2.1
                         thyroglossal
                         procedures w/o CC/MCC.
628...................  Other endocrine, nutrit           54       1.3385         36.6         30.5         20.1
                         & metab O.R. proc w
                         MCC.
629...................  Other endocrine, nutrit           90       1.2008         33.1         27.6         14.3
                         & metab O.R. proc w CC.
630...................  Other endocrine, nutrit            4       0.7305         22.9         19.1          8.4
                         & metab O.R. proc w/o
                         CC/MCC.
637...................  Diabetes w MCC.........          363       0.7726         25.8         21.5          9.8
638...................  Diabetes w CC..........        1,062       0.6757         24.0         20.0          6.7
639...................  Diabetes w/o CC/MCC....           92       0.6064         20.6         17.2          4.7
640...................  Nutritional & misc               607       0.7879         23.2         19.3          9.1
                         metabolic disorders w
                         MCC.
641...................  Nutritional & misc               615       0.6889         22.0         18.3          6.0
                         metabolic disorders w/
                         o MCC.
642...................  Inborn errors of                   4       0.7305         22.9         19.1          8.3
                         metabolism.
643...................  Endocrine disorders w             29       0.7358         24.9         20.8         12.4
                         MCC.
644...................  Endocrine disorders w             18       0.7358         24.9         20.8          8.6
                         CC.
645...................  Endocrine disorders w/o            6       0.5472         20.3         16.9          6.1
                         CC/MCC.
652...................  Kidney transplant......            0       0.0000          0.0          0.0          0.0
653...................  Major bladder                      0       1.1417         29.0         24.2         24.2
                         procedures w MCC.
654...................  Major bladder                      0       0.7305         22.9         19.1         14.7
                         procedures w CC.
655...................  Major bladder                      0       0.5472         20.3         16.9         10.0
                         procedures w/o CC/MCC.
656...................  Kidney & ureter                    0       0.8249         25.0         20.8         16.8
                         procedures for
                         neoplasm w MCC.
657...................  Kidney & ureter                    1       0.8249         25.0         20.8          9.2
                         procedures forneoplasm
                         w CC.
658...................  Kidney & ureter                    0       0.8249         25.0         20.8          5.7
                         procedures for
                         neoplasm w/o CC/MCC.
659...................  Kidney & ureter                    9       1.1417         29.0         24.2         18.5
                         procedures for non-
                         neoplasm w MCC.
660...................  Kidney & ureter                    4       0.7305         22.9         19.1         10.6
                         procedures for non-
                         neoplasm w CC.
661...................  Kidney & ureter                    1       0.5472         20.3         16.9          5.1
                         procedures for non-
                         neoplasm w/o CC/MCC.
662...................  Minor bladder                      2       0.8249         25.0         20.8         17.7
                         procedures w MCC.
663...................  Minor bladder                      0       0.8249         25.0         20.8          8.5
                         procedures w CC.
664...................  Minor bladder                      1       1.5545         35.2         29.3          3.0
                         procedures w/o CC/MCC.
665...................  Prostatectomy w MCC....            2       0.8249         25.0         20.8         20.2
666...................  Prostatectomy w CC.....            0       0.8249         25.0         20.8         10.7
667...................  Prostatectomy w/o CC/              1       1.1417         29.0         24.2          4.0
                         MCC.
668...................  Transurethral                      8       1.5545         35.2         29.3         14.4
                         procedures w MCC.
669...................  Transurethral                      5       1.5545         35.2         29.3          7.0
                         procedures w CC.
670...................  Transurethral                      0       0.8249         25.0         20.8          3.7
                         procedures w/o CC/MCC.
671...................  Urethral procedures w              0       0.7305         22.9         19.1          9.6
                         CC/MCC.
672...................  Urethral procedures w/o            0       0.5472         20.3         16.9          3.8
                         CC/MCC.

[[Page 48153]]

 
673...................  Other kidney & urinary           226       1.3255         33.6         28.0         17.6
                         tract procedures w MCC.
674...................  Other kidney & urinary            95       1.2557         30.6         25.5         11.1
                         tract procedures w CC.
675...................  Other kidney & urinary             6       1.1417         29.0         24.2          2.7
                         tract procedures w/o
                         CC/MCC.
682...................  Renal failure w MCC....        1,328       0.8553         23.6         19.7         12.1
683...................  Renal failure w CC.....          785       0.7752         21.8         18.2          9.0
684...................  Renal failure w/o CC/            124       0.7121         20.5         17.1          5.9
                         MCC.
685...................  Admit for renal                   51       0.7726         26.0         21.7          5.4
                         dialysis.
686...................  Kidney & urinary tract            31       0.8933         23.6         19.7         13.2
                         neoplasms w MCC.
687...................  Kidney & urinary tract            17       0.7305         22.9         19.1          8.5
                         neoplasms w CC.
688...................  Kidney & urinary tract             3       0.5472         20.3         16.9          5.1
                         neoplasms w/o CC/MCC.
689...................  Kidney & urinary tract           763       0.6624         22.9         19.1          9.9
                         infections w MCC.
690...................  Kidney & urinary tract           724       0.5655         20.2         16.8          6.6
                         infections w/o MCC.
691...................  Urinary stones w esw               4       1.5545         35.2         29.3          6.6
                         lithotripsy w CC/MCC.
692...................  Urinary stones w esw               0       1.5545         35.2         29.3          3.4
                         lithotripsy w/o CC/MCC.
693...................  Urinary stones w/o esw            16       0.7305         22.9         19.1          8.4
                         lithotripsy w MCC.
694...................  Urinary stones w/o esw            12       0.7305         22.9         19.1          3.9
                         lithotripsy w/o MCC.
695...................  Kidney & urinary tract             4       0.8249         25.0         20.8          9.1
                         signs & symptoms w MCC.
696...................  Kidney & urinary tract             1       0.5472         20.3         16.9          5.0
                         signs & symptoms w/o
                         MCC.
697...................  Urethral stricture.....            0       0.5472         20.3         16.9          5.1
698...................  Other kidney & urinary           269       0.7919         22.6         18.8         10.9
                         tract diagnoses w MCC.
699...................  Other kidney & urinary           179       0.7293         22.1         18.4          7.7
                         tract diagnoses w CC.
700...................  Other kidney & urinary            27       0.6052         19.6         16.3          5.4
                         tract diagnoses w/o CC/
                         MCC.
707...................  Major male pelvic                  0       0.7305         22.9         19.1          6.9
                         procedures w CC/MCC.
708...................  Major male pelvic                  0       0.5472         20.3         16.9          3.5
                         procedures w/o CC/MCC.
709...................  Penis procedures w CC/             6       1.1417         29.0         24.2         10.3
                         MCC.
710...................  Penis procedures w/o CC/           0       1.1417         29.0         24.2          2.7
                         MCC.
711...................  Testes procedures w CC/            8       1.1417         29.0         24.2         13.2
                         MCC.
712...................  Testes procedures w/o              0       1.1417         29.0         24.2          4.6
                         CC/MCC.
713...................  Transurethral                      1       1.5545         35.2         29.3          6.5
                         prostatectomy w CC/MCC.
714...................  Transurethral                      1       0.5472         20.3         16.9          2.9
                         prostatectomy w/o CC/
                         MCC.
715...................  Other male reproductive            1       1.5545         35.2         29.3         10.1
                         system O.R. proc for
                         malignancy w CC/MCC.
716...................  Other male reproductive            0       1.5545         35.2         29.3          2.0
                         system O.R. proc for
                         malignancy w/o CC/MCC.
717...................  Other male reproductive           17       1.1417         29.0         24.2         12.4
                         system O.R. proc exc
                         malignancy w CC/MCC.
718...................  Other male reproductive            2       0.5472         20.3         16.9          4.1
                         system O.R. proc exc
                         malignancy w/o CC/MCC.
722...................  Malignancy, male                  12       0.8249         25.0         20.8         12.1
                         reproductive system w
                         MCC.
723...................  Malignancy, male                   9       0.7305         22.9         19.1          8.6
                         reproductive system w
                         CC.
724...................  Malignancy, male                   1       0.5472         20.3         16.9          5.3
                         reproductive system w/
                         o CC/MCC.
725...................  Benign prostatic                   2       1.1417         29.0         24.2          9.0
                         hypertrophy w MCC.
726...................  Benign prostatic                   3       0.5472         20.3         16.9          5.5
                         hypertrophy w/o MCC.
727...................  Inflammation of the               37       0.7754         25.9         21.6         10.4
                         male reproductive
                         system w MCC.
728...................  Inflammation of the               56       0.6172         20.8         17.3          6.2
                         male reproductive
                         system w/o MCC.
729...................  Other male reproductive           34       1.0319         26.6         22.2          8.4
                         system diagnoses w CC/
                         MCC.
730...................  Other male reproductive            2       0.7305         22.9         19.1          4.9
                         system diagnoses w/o
                         CC/MCC.
734...................  Pelvic evisceration,               0       1.1417         29.0         24.2         11.8
                         rad hysterectomy & rad
                         vulvectomy w CC/MCC.
735...................  Pelvic evisceration,               0       0.5472         20.3         16.9          5.3
                         rad hysterectomy & rad
                         vulvectomy w/o CC/MCC.
736...................  Uterine & adnexa proc              0       1.1417         29.0         24.2         21.5
                         for ovarian or adnexal
                         malignancy w MCC.
737...................  Uterine & adnexa proc              0       0.8249         25.0         20.8         11.0
                         for ovarian or adnexal
                         malignancy w CC.
738...................  Uterine & adnexa proc              0       0.5472         20.3         16.9          5.6
                         for ovarian or adnexal
                         malignancy w/o CC/MCC.
739...................  Uterine, adnexa proc               0       1.1417         29.0         24.2         15.9
                         for non-ovarian/
                         adnexal malig w MCC.
740...................  Uterine, adnexa proc               0       0.8249         25.0         20.8          7.7
                         for non-ovarian/
                         adnexal malig w CC.
741...................  Uterine, adnexa proc               0       0.5472         20.3         16.9          4.5
                         for non-ovarian/
                         adnexal malig w/o CC/
                         MCC.
742...................  Uterine & adnexa proc              0       0.8249         25.0         20.8          6.9
                         for non-malignancy w
                         CC/MCC.
743...................  Uterine & adnexa proc              0       0.5472         20.3         16.9          3.3
                         for non-malignancy w/o
                         CC/MCC.
744...................  D&C, conization,                   1       0.8249         25.0         20.8          9.3
                         laparascopy & tubal
                         interruption w CC/MCC.

[[Page 48154]]

 
745...................  D&C, conization,                   0       0.8249         25.0         20.8          3.8
                         laparascopy & tubal
                         interruption w/o CC/
                         MCC.
746...................  Vagina, cervix & vulva             3       0.8249         25.0         20.8          6.4
                         procedures w CC/MCC.
747...................  Vagina, cervix & vulva             0       0.8249         25.0         20.8          2.8
                         procedures w/o CC/MCC.
748...................  Female reproductive                0       0.8249         25.0         20.8          2.6
                         system reconstructive
                         procedures.
749...................  Other female                       3       0.8249         25.0         20.8         16.3
                         reproductive system
                         O.R. procedures w CC/
                         MCC.
750...................  Other female                       0       0.8249         25.0         20.8          5.1
                         reproductive system
                         O.R. procedures w/o CC/
                         MCC.
754...................  Malignancy, female                14       1.1417         29.0         24.2         14.7
                         reproductive system w
                         MCC.
755...................  Malignancy, female                15       0.8249         25.0         20.8          9.1
                         reproductive system w
                         CC.
756...................  Malignancy, female                 1       0.5472         20.3         16.9          5.1
                         reproductive system w/
                         o CC/MCC.
757...................  Infections, female                29       0.8375         22.6         18.8         13.9
                         reproductive system w
                         MCC.
758...................  Infections, female                25       0.8317         27.2         22.7          9.5
                         reproductive system w
                         CC.
759...................  Infections, female                 4       0.5472         20.3         16.9          7.2
                         reproductive system w/
                         o CC/MCC.
760...................  Menstrual & other                  3       1.1417         29.0         24.2          6.0
                         female reproductive
                         system disorders w CC/
                         MCC.
761...................  Menstrual & other                  1       0.5472         20.3         16.9          3.8
                         female reproductive
                         system disorders w/o
                         CC/MCC.
765...................  Cesarean section w CC/             0       0.8249         25.0         20.8          7.4
                         MCC.
766...................  Cesarean section w/o CC/           0       0.7305         22.9         19.1          4.3
                         MCC.
767...................  Vaginal delivery w                 0       0.7305         22.9         19.1          4.1
                         sterilization &/or D&C.
768...................  Vaginal delivery w O.R.            0       0.7305         22.9         19.1          8.9
                         proc except steril &/
                         or D&C.
769...................  Postpartum & post                  1       0.7305         22.9         19.1          8.6
                         abortion diagnoses w
                         O.R. procedure.
770...................  Abortion w D&C,                    0       0.7305         22.9         19.1          3.5
                         aspiration curettage
                         or hysterotomy.
774...................  Vaginal delivery w                 0       0.7305         22.9         19.1          4.5
                         complicating diagnoses.
775...................  Vaginal delivery w/o               0       0.7305         22.9         19.1          3.1
                         complicating diagnoses.
776...................  Postpartum & post                  3       1.1417         29.0         24.2          5.4
                         abortion diagnoses w/o
                         O.R. procedure.
777...................  Ectopic pregnancy......            0       0.7305         22.9         19.1          3.0
778...................  Threatened abortion....            0       0.5472         20.3         16.9          4.2
779...................  Abortion w/o D&C.......            0       0.5472         20.3         16.9          3.6
780...................  False labor............            0       0.5472         20.3         16.9          2.7
781...................  Other antepartum                   1       1.1417         29.0         24.2          5.9
                         diagnoses w medical
                         complications.
782...................  Other antepartum                   0       0.5472         20.3         16.9          3.6
                         diagnoses w/o medical
                         complications.
789...................  Neonates, died or                  0       0.5472         20.3         16.9          1.5
                         transferred to another
                         acute care facility.
790...................  Extreme immaturity or              0       0.5472         20.3         16.9         16.9
                         respiratory distress
                         syndrome, neonate.
791...................  Prematurity w major                0       1.1417         29.0         24.2         13.3
                         problems.
792...................  Prematurity w/o major              0       0.5472         20.3         16.9          8.6
                         problems.
793...................  Full term neonate w                0       1.1417         29.0         24.2         17.6
                         major problems.
794...................  Neonate w other                    0       1.1417         29.0         24.2          1.7
                         significant problems.
795...................  Normal newborn.........            0       0.5472         20.3         16.9          3.1
799...................  Splenectomy w MCC......            0       1.1417         29.0         24.2         23.5
800...................  Splenectomy w CC.......            0       0.8249         25.0         20.8         13.0
801...................  Splenectomy w/o CC/MCC.            0       0.8249         25.0         20.8          7.5
802...................  Other O.R. proc of the             7       1.5545         35.2         29.3         21.4
                         blood & blood forming
                         organs w MCC.
803...................  Other O.R. proc of the             3       0.7305         22.9         19.1         10.8
                         blood & blood forming
                         organs w CC.
804...................  Other O.R. proc of the             0       0.7305         22.9         19.1          5.2
                         blood & blood forming
                         organs w/o CC/MCC.
808...................  Major hematol/immun               26       0.8009         20.7         17.3         12.8
                         diag exc sickle cell
                         crisis & coagul w MCC.
809...................  Major hematol/immun               23       0.8009         20.7         17.3          7.9
                         diag exc sickle cell
                         crisis & coagul w CC.
810...................  Major hematol/immun                3       0.8009         20.7         17.3          6.2
                         diag exc sickle cell
                         crisis & coagul w/o CC/
                         MCC.
811...................  Red blood cell                    36       0.6655         23.2         19.3          9.0
                         disorders w MCC.
812...................  Red blood cell                    45       0.5699         19.5         16.3          5.9
                         disorders w/o MCC.
813...................  Coagulation disorders..           48       0.8015         21.5         17.9          8.3
814...................  Reticuloendothelial &             40       0.7474         22.6         18.8         11.7
                         immunity disorders w
                         MCC.
815...................  Reticuloendothelial &             18       0.7305         22.9         19.1          7.8
                         immunity disorders w
                         CC.
816...................  Reticuloendothelial &              5       0.7305         22.9         19.1          5.3
                         immunity disorders w/o
                         CC/MCC.
820...................  Lymphoma & leukemia w              0       0.8249         25.0         20.8         20.8
                         major O.R. procedure w
                         MCC.
821...................  Lymphoma & leukemia w              2       0.8249         25.0         20.8         13.3
                         major O.R. procedure w
                         CC.

[[Page 48155]]

 
822...................  Lymphoma & leukemia w              0       0.8249         25.0         20.8          5.9
                         major O.R. procedure w/
                         o CC/MCC.
823...................  Lymphoma & non-acute              12       1.1417         29.0         24.2         24.2
                         leukemia w other O.R.
                         proc w MCC.
824...................  Lymphoma & non-acute               3       1.1417         29.0         24.2         14.8
                         leukemia w other O.R.
                         proc w CC.
825...................  Lymphoma & non-acute               1       0.5472         20.3         16.9          7.8
                         leukemia w other O.R.
                         proc w/o CC/MCC.
826...................  Myeloprolif disord or              1       0.8249         25.0         20.8         20.8
                         poorly diff neopl w
                         maj O.R. proc w MCC.
827...................  Myeloprolif disord or              0       0.8249         25.0         20.8         12.4
                         poorly diff neopl w
                         maj O.R. proc w CC.
828...................  Myeloprolif disord or              0       0.8249         25.0         20.8          5.9
                         poorly diff neopl w
                         maj O.R. proc w/o CC/
                         MCC.
829...................  Myeloprolif disord or              9       1.5545         35.2         29.3         17.8
                         poorly diff neopl w
                         other O.R. proc w CC/
                         MCC.
830...................  Myeloprolif disord or              0       1.5545         35.2         29.3          5.5
                         poorly diff neopl w
                         other O.R. proc w/o CC/
                         MCC.
834...................  Acute leukemia w/o                20       1.1417         29.0         24.2         24.2
                         major O.R. procedure w
                         MCC.
835...................  Acute leukemia w/o                 3       0.8249         25.0         20.8         13.5
                         major O.R. procedure w
                         CC.
836...................  Acute leukemia w/o                 1       0.5472         20.3         16.9          8.0
                         major O.R. procedure w/
                         o CC/MCC.
837...................  Chemo w acute leukemia             1       1.5545         35.2         29.3         29.3
                         as sdx or w high dose
                         chemo agent w MCC.
838...................  Chemo w acute leukemia             2       0.8249         25.0         20.8         13.7
                         as sdx w CC or high
                         dose chemo agent.
839...................  Chemo w acute leukemia             0       1.5545         35.2         29.3          9.1
                         as sdx w/o CC/MCC.
840...................  Lymphoma & non-acute             175       0.8718         20.8         17.3         16.1
                         leukemia w MCC.
841...................  Lymphoma & non-acute              64       0.8026         20.1         16.8         10.7
                         leukemia w CC.
842...................  Lymphoma & non-acute              10       0.7305         22.9         19.1          6.9
                         leukemia w/o CC/MCC.
843...................  Other myeloprolif dis             19       1.1417         29.0         24.2         14.5
                         or poorly diff neopl
                         diag w MCC.
844...................  Other myeloprolif dis             13       1.1417         29.0         24.2          9.7
                         or poorly diff neopl
                         diag w CC.
845...................  Other myeloprolif dis              3       1.1417         29.0         24.2          6.8
                         or poorly diff neopl
                         diag w/o CC/MCC.
846...................  Chemotherapy w/o acute            32       1.6788         37.4         31.2         13.8
                         leukemia as secondary
                         diagnosis w MCC.
847...................  Chemotherapy w/o acute            61       1.4350         27.6         23.0          5.0
                         leukemia as secondary
                         diagnosis w CC.
848...................  Chemotherapy w/o acute             1       0.7305         22.9         19.1          4.6
                         leukemia as secondary
                         diagnosis w/o CC/MCC.
849...................  Radiotherapy...........          141       0.8994         23.5         19.6          9.5
853...................  Infectious & parasitic           703       1.7687         38.1         31.8         27.6
                         diseases w O.R.
                         procedure w MCC.
854...................  Infectious & parasitic            95       1.4381         30.8         25.7         17.4
                         diseases w O.R.
                         procedure w CC.
855...................  Infectious & parasitic             1       0.7305         22.9         19.1         12.2
                         diseases w O.R.
                         procedure w/o CC/MCC.
856...................  Postoperative or post-           335       1.4470         36.1         30.1         26.5
                         traumatic infections w
                         O.R. proc w MCC.
857...................  Postoperative or post-           232       1.1886         31.5         26.3         14.1
                         traumatic infections w
                         O.R. proc w CC.
858...................  Postoperative or post-            28       1.1109         28.4         23.7          9.5
                         traumatic infections w
                         O.R. proc w/o CC/MCC.
862...................  Postoperative & post-          1,178       0.8670         25.2         21.0         13.4
                         traumatic infections w
                         MCC.
863...................  Postoperative & post-          1,304       0.7478         23.4         19.5          8.2
                         traumatic infections w/
                         o MCC.
864...................  Fever of unknown origin           16       0.7305         22.9         19.1          6.4
865...................  Viral illness w MCC....           56       0.7823         21.8         18.2         11.0
866...................  Viral illness w/o MCC..           33       0.6431         21.2         17.7          5.4
867...................  Other infectious &               292       1.0954         23.6         19.7         16.2
                         parasitic diseases
                         diagnoses w MCC.
868...................  Other infectious &                79       0.8869         22.0         18.3          9.3
                         parasitic diseases
                         diagnoses w CC.
869...................  Other infectious &                11       0.5472         20.3         16.9          6.8
                         parasitic diseases
                         diagnoses w/o CC/MCC.
870...................  Septicemia w MV 96+              588       1.9505         30.5         25.4         23.6
                         hours.
871...................  Septicemia w/o MV 96+          3,883       0.8299         23.5         19.6         13.0
                         hours w MCC.
872...................  Septicemia w/o MV 96+          1,543       0.7340         21.9         18.3          9.1
                         hours w/o MCC.
876...................  O.R. procedure w                   5       0.7305         22.9         19.1         19.1
                         principal diagnoses of
                         mental illness.
880...................  Acute adjustment                  19       0.5472         20.3         16.9          5.0
                         reaction &
                         psychosocial
                         dysfunction.
881...................  Depressive neuroses....           15       0.5472         20.3         16.9          6.6
882...................  Neuroses except                   16       0.5472         20.3         16.9          6.9
                         depressive.
883...................  Disorders of                      15       0.5472         20.3         16.9         11.8
                         personality & impulse
                         control.
884...................  Organic disturbances &           200       0.4883         23.3         19.4          8.3
                         mental retardation.

[[Page 48156]]

 
885...................  Psychoses..............        1,390       0.4140         23.8         19.8         12.3
886...................  Behavioral &                      18       0.5472         20.3         16.9          9.4
                         developmental
                         disorders.
887...................  Other mental disorder              0       0.5472         20.3         16.9          7.1
                         diagnoses.
894...................  Alcohol/drug abuse or              1       0.5472         20.3         16.9          4.5
                         dependence, left ama.
895...................  Alcohol/drug abuse or              1       0.5472         20.3         16.9         16.8
                         dependence w
                         rehabilitation therapy.
896...................  Alcohol/drug abuse or             10       0.8249         25.0         20.8         10.6
                         dependence w/o
                         rehabilitation therapy
                         w MCC.
897...................  Alcohol/drug abuse or             23       0.5472         20.3         16.9          6.4
                         dependence w/o
                         rehabilitation therapy
                         w/o MCC.
901...................  Wound debridements for           222       1.3395         35.2         29.3         23.7
                         injuries w MCC.
902...................  Wound debridements for           160       1.1605         33.5         27.9         12.9
                         injuries w CC.
903...................  Wound debridements for            23       0.7305         22.9         19.1          7.9
                         injuries w/o CC/MCC.
904...................  Skin grafts for                   90       1.3351         40.8         34.0         18.8
                         injuries w CC/MCC.
905...................  Skin grafts for                    6       0.7305         22.9         19.1          7.7
                         injuries w/o CC/MCC.
906...................  Hand procedures for                1       0.5472         20.3         16.9          4.9
                         injuries.
907...................  Other O.R. procedures             85       1.6622         36.8         30.7         19.4
                         for injuries w MCC.
908...................  Other O.R. procedures             45       1.3966         34.1         28.4         11.3
                         for injuries w CC.
909...................  Other O.R. procedures              5       0.8249         25.0         20.8          5.7
                         for injuries w/o CC/
                         MCC.
913...................  Traumatic injury w MCC.           51       0.8462         26.9         22.4         10.0
914...................  Traumatic injury w/o              72       0.6448         21.9         18.3          5.3
                         MCC.
915...................  Allergic reactions w               0       0.5472         20.3         16.9          7.5
                         MCC.
916...................  Allergic reactions w/o             1       0.5472         20.3         16.9          3.2
                         MCC.
917...................  Poisoning & toxic                  7       0.7305         22.9         19.1          8.3
                         effects of drugs w MCC.
918...................  Poisoning & toxic                  6       0.7305         22.9         19.1          4.2
                         effects of drugs w/o
                         MCC.
919...................  Complications of               1,072       0.9858         26.3         21.9         10.1
                         treatment w MCC.
920...................  Complications of                 826       0.8518         24.6         20.5          6.8
                         treatment w CC.
921...................  Complications of                  95       0.7511         23.0         19.2          4.5
                         treatment w/o CC/MCC.
922...................  Other injury, poisoning            5       0.5472         20.3         16.9         10.0
                         & toxic effect diag w
                         MCC.
923...................  Other injury, poisoning            9       0.5472         20.3         16.9          5.0
                         & toxic effect diag w/
                         o MCC.
927...................  Extensive burns or full            0       1.5545         35.2         29.3         29.3
                         thickness burns w MV
                         96+ hrs w skin graft.
928...................  Full thickness burn w             10       1.1417         29.0         24.2         24.2
                         skin graft or inhal
                         inj w CC/MCC.
929...................  Full thickness burn w              1       0.7305         22.9         19.1         13.1
                         skin graft or inhal
                         inj w/o CC/MCC.
933...................  Extensive burns or full            7       1.5545         35.2         29.3          8.5
                         thickness burns w MV
                         96+ hrs w/o skin graft.
934...................  Full thickness burn w/o           48       0.6998         24.2         20.2         11.1
                         skin grft or inhal inj.
935...................  Non-extensive burns....           40       0.7525         24.9         20.8          8.8
939...................  O.R. proc w diagnoses            381       1.2500         33.8         28.2         18.9
                         of other contact w
                         health services w MCC.
940...................  O.R. proc w diagnoses            212       1.1066         33.8         28.2         10.5
                         of other contact w
                         health services w CC.
941...................  O.R. proc w diagnoses             36       0.9719         28.8         24.0          4.8
                         of other contact w
                         health services w/o CC/
                         MCC.
945...................  Rehabilitation w CC/MCC        2,241       0.5867         22.2         18.5         16.3
946...................  Rehabilitation w/o CC/           472       0.4935         18.9         15.8         11.7
                         MCC.
947...................  Signs & symptoms w MCC.           80       0.6340         22.7         18.9          7.9
948...................  Signs & symptoms w/o             137       0.5642         23.4         19.5          5.3
                         MCC.
949...................  Aftercare w CC/MCC.....        4,564       0.6693         22.1         18.4          6.1
950...................  Aftercare w/o CC/MCC...          759       0.5735         18.5         15.4          5.1
951...................  Other factors                     38       1.5837         26.2         21.8          5.0
                         influencing health
                         status.
955...................  Craniotomy for multiple            0       1.5545         35.2         29.3         21.9
                         significant trauma.
956...................  Limb reattachment, hip             1       0.7305         22.9         19.1         14.4
                         & femur proc for
                         multiple significant
                         trauma.
957...................  Other O.R. procedures              3       1.5545         35.2         29.3         29.1
                         for multiple
                         significant trauma w
                         MCC.
958...................  Other O.R. procedures              1       1.1417         29.0         24.2         17.9
                         for multiple
                         significant trauma w
                         CC.
959...................  Other O.R. procedures              0       1.1417         29.0         24.2          9.9
                         for multiple
                         significant trauma w/o
                         CC/MCC.
963...................  Other multiple                    14       1.5545         35.2         29.3         16.5
                         significant trauma w
                         MCC.
964...................  Other multiple                    10       0.7305         22.9         19.1         10.2
                         significant trauma w
                         CC.
965...................  Other multiple                     1       0.5472         20.3         16.9          6.5
                         significant trauma w/o
                         CC/MCC.
969...................  HIV w extensive O.R.              10       1.5545         35.2         29.3         29.3
                         procedure w MCC.
970...................  HIV w extensive O.R.               0       1.5545         35.2         29.3         15.8
                         procedure w/o MCC.
974...................  HIV w major related              162       0.8908         21.9         18.3         17.5
                         condition w MCC.
975...................  HIV w major related               74       0.7492         21.3         17.8         11.5
                         condition w CC.
976...................  HIV w major related               35       0.7382         18.0         15.0          7.7
                         condition w/o CC/MCC.

[[Page 48157]]

 
977...................  HIV w or w/o other                22       0.7305         22.9         19.1          8.3
                         related condition.
981...................  Extensive O.R.                 1,073       2.2339         42.0         35.0         24.6
                         procedure unrelated to
                         principal diagnosis w
                         MCC.
982...................  Extensive O.R.                   282       1.8277         37.6         31.3         16.3
                         procedure unrelated to
                         principal diagnosis w
                         CC.
983...................  Extensive O.R.                    19       1.1417         29.0         24.2          9.0
                         procedure unrelated to
                         principal diagnosis w/
                         o CC/MCC.
984...................  Prostatic O.R.                    14       1.5545         35.2         29.3         23.7
                         procedure unrelated to
                         principal diagnosis w
                         MCC.
985...................  Prostatic O.R.                    13       1.1417         29.0         24.2         16.6
                         procedure unrelated to
                         principal diagnosis w
                         CC.
986...................  Prostatic O.R.                     1       1.1417         29.0         24.2          8.5
                         procedure unrelated to
                         principal diagnosis w/
                         o CC/MCC.
987...................  Non-extensive O.R. proc          389       1.6972         37.9         31.6         21.9
                         unrelated to principal
                         diagnosis w MCC.
988...................  Non-extensive O.R. proc          184       1.3386         33.2         27.7         13.2
                         unrelated to principal
                         diagnosis w CC.
989...................  Non-extensive O.R. proc           19       0.8249         25.0         20.8          6.7
                         unrelated to principal
                         diagnosis w/o CC/MCC.
998...................  Principal diagnosis                0       0.0000          0.0          0.0          0.0
                         invalid as discharge
                         diagnosis.
999...................  Ungroupable............            0       0.0000          0.0          0.0          0.0
----------------------------------------------------------------------------------------------------------------
\1\ Transition blended relative weights for FY 2008 determined as described in Step 7 in section II.I.4. of the
  preamble of this final rule.
\2\ The ``short-stay outlier threshold'' is calculated as \5/6\ths of the geometric average length of stay of
  the LTC-DRG (as specified at Sec.   412.529(a), in conjunction with new Sec.   412.503).
\3\ The ``IPPS-comparable threshold'' is calculated as one standard deviation from the geometric average length
  of stay of the same DRG under the IPPS as specified at Sec.   412.529(c)(3)(i). Note, as discussed in the RY
  2008 LTCH PPS final rule (72 FR 26907), for some MS-LTC-DRGs, it was sometimes necessary to supplement IPPS
  hospital statistical data due to a low volume of IPPS cases, and for some MS-LTC-DRGs although IPPS hospital
  data may be available, a value of zero was assigned. In addition, we note that the ``IPPS comparable
  threshold'' is only applicable in the context of the payment adjustment for short-stay outliers (SSOs) at Sec.
    412.529. A LTCH case that has a covered length of stay that exceeds the ``SSO threshold'' (and therefore is
  not an SSO case) but is within the value of the ``IPPS comparable threshold'' computed from IPPS statistical
  data would not be subject to the SSO adjustments at Sec.   412.529. So that it is clear that the ``IPPS
  comparable threshold'' only applies to LTCH cases that are SSOs, in instances where the value of the ``IPPS
  comparable threshold'' computed from IPPS statistical data for an MS-LTC-DRG is greater than the ``SSO
  threshold'' for the same MS-LTC-DRG, in this table we have substituted the computed value of the ``IPPS
  comparable threshold'' for the MS-LTC-DRG with the value of the ``SSO threshold'' (in column 6) for the same
  MS-LTC-DRG.

Appendix A--Regulatory Impact Analysis

I. Overall Impact

    We have examined the impacts of this final rule with comment 
period as required by Executive Order 12866 (September 1993, 
Regulatory Planning and Review) and 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 (Pub. 
L. 104-4), and Executive Order 13132.
    Executive Order 12866 (as amended by Executive Order 13258, 
which merely reassigns responsibility of duties, and Executive Order 
13422) 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).
    We have determined that this rule is a major rule as defined in 
5 U.S.C. 804(2). We estimate that the changes for FY 2008 operating 
and capital payments will redistribute in excess of $100 million 
among different types of inpatient cases. The market basket update 
to the IPPS rates required by the statute, in conjunction with other 
payment changes in this final rule with comment period, will result 
in an approximate $3.8 billion increase in FY 2008 operating and 
capital payments. This amount does not reflect changes in hospital 
admissions or case-mix intensity in operating PPS payments, which 
will also affect overall payment changes. It does assume that the -
1.2 percent adjustment to the IPPS standardized amounts for adoption 
of the MS-DRGs will be completely offset by increases in case-mix 
that are the result of documentation and coding changes and not real 
increases in patient severity of illness.
    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 government 
agencies. Most hospitals and most other providers and suppliers are 
considered to be small entities, either by nonprofit status or by 
having revenues of $31.5 million or less in any 1 year. (For details 
on the latest standards for heath care providers, we refer readers 
to page 33 of the Table of Small Business Size Standards at the 
Small Business Administration Web site at: http://www.sba.gov/services/contractingopportunities/sizestandardstopics/tableofsize/index.html.) For purposes of the RFA, all hospitals and other 
providers and suppliers are considered to be small entities. 
Individuals and States are not included in the definition of a small 
entity. We believe that this final rule with comment period will 
have a significant impact on small entities as explained in this 
Appendix. Because we acknowledge that many of the affected entities 
are small entities, the analysis discussed throughout the preamble 
of this final rule with comment period constitutes our final 
regulatory flexibility analysis. In the proposed rule, we solicited 
comments on our estimates and analysis of the impact of the proposed 
rule on those small entities. We address any public comments that we 
received on the impact of the changes we are finalizing in the 
applicable sections of this appendix.
    In addition, section 1102(b) of the Act requires us to prepare a 
regulatory impact analysis for any proposed or final rule that 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 now define a small rural hospital as 
a hospital that is located outside of an urban area and has fewer 
than 100 beds. Section 601(g) of the

[[Page 48158]]

Social Security Amendments of 1983 (Pub. L. 98-21) designated 
hospitals in certain New England counties as belonging to the 
adjacent urban area. Thus, for purposes of the IPPS, we continue to 
classify these hospitals as urban hospitals.
    Section 202 of the Unfunded Mandates Reform Act of 1995 (Pub. L. 
104-4) also requires that agencies assess anticipated costs and 
benefits before issuing any 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 with comment period will not mandate any 
requirements for State, local, or tribal governments, nor will it 
affect private sector costs.
    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. As stated above, this final rule with 
comment period would not have a substantial effect on State and 
local governments.
    The following analysis, in conjunction with the remainder of 
this document, demonstrates that this rule is consistent with the 
regulatory philosophy and principles identified in Executive Order 
12866, the RFA, and section 1102(b) of the Act. The rule will affect 
payments to a substantial number of small rural hospitals, as well 
as other classes of hospitals, and the effects on some hospitals may 
be significant.

II. Objectives

    The primary objective of the IPPS is to create incentives for 
hospitals to operate efficiently and minimize unnecessary costs 
while at the same time ensuring that payments are sufficient to 
adequately compensate hospitals for their legitimate costs. In 
addition, we share national goals of preserving the Medicare 
Hospital Insurance Trust Fund.
    We believe the changes in this final rule with comment period 
will further each of these goals while maintaining the financial 
viability of the hospital industry and ensuring access to high 
quality health care for Medicare beneficiaries. We expect that these 
changes will ensure that the outcomes of this payment system are 
reasonable and equitable while avoiding or minimizing unintended 
adverse consequences.

III. Limitations of Our Analysis

    The following quantitative analysis presents the projected 
effects of our policy changes, as well as statutory changes 
effective for FY 2008, on various hospital groups. We estimate the 
effects of individual policy changes by estimating payments per case 
while holding all other payment policies constant. We use the best 
data available, but, generally, we do not attempt to make 
adjustments for future changes in such variables as admissions, 
lengths of stay, or case-mix. However, we believe that adoption of 
the MS-DRGs in this final rule with comment period will create a 
risk of increased aggregate levels of payment as a result of more 
comprehensive documentation and coding. As explained earlier in this 
final rule with comment period, the Secretary has broad discretion 
under section 1886(d)(3)(A)(vi) of the Act to adjust the 
standardized amount so as to eliminate the effect of changes in 
coding or classification of discharges that do not reflect real 
changes in case-mix. Using this authority, the Medicare Actuary 
estimates that a negative adjustment of 4.8 percent will be 
necessary to maintain budget neutrality for the transition to the 
MS-DRGs. However, with the 2-year implementation of the MS-DRG 
system, the 4.8 percent adjustment will be made over 3 years. 
Therefore, we are reducing the IPPS standardized amount by 1.2 
percent for FY 2008. We will revisit the adjustment in 2 years if 
projected and actual data are different. The payment impacts shown 
below illustrate the impact of changes in hospital payment, 
including the -1.2 percent adjustment to the IPPS standardized 
amounts both prior to and following the estimated growth in case-
mix. As we had done in the previous rules, we solicited comments and 
information about the anticipated effects of the proposed changes on 
hospitals and our methodology for estimating them.

IV. Hospitals Included In and Excluded From the IPPS

    The prospective payment systems for hospital inpatient operating 
and capital related costs encompass most general short-term, acute 
care hospitals that participate in the Medicare program. There were 
35 Indian Health Service hospitals in our database, which we 
excluded from the analysis due to the special characteristics of the 
prospective payment methodology for these hospitals. Among other 
short term, acute care hospitals, only the 46 such hospitals in 
Maryland remain excluded from the IPPS under the waiver at section 
1814(b)(3) of the Act.
    As of July 2007, there are 3,534 IPPS hospitals to be included 
in our analysis. This represents about 59 percent of all Medicare-
participating hospitals. The majority of this impact analysis 
focuses on this set of hospitals. There are also approximately 1,286 
CAHs. These small, limited service hospitals are paid on the basis 
of reasonable costs rather than under the IPPS. There are also 1,198 
specialty hospitals and 2,262 specialty units that are excluded from 
the IPPS. These specialty hospitals include IPFs, IRFs, LTCHs, 
RNHCIs, children's hospitals, and cancer hospitals. Changes in 
payments for IPFs and IRFs are made through other separate 
rulemaking. Payment impacts for these specialty hospitals and units, 
other than the reasonable cost-based updates for IPFs paid under a 
blend, are not included in this final rule with comment period. 
There is also a separate rule to update and make changes to the LTCH 
PPS for its July 1 to June 30 rate year. However, we have 
traditionally used the IPPS rule to update the LTCH relative weights 
because the LTCH PPS uses the same DRGs as the IPPS, resulting in 
the LTCH relative weights being recalibrated according to the same 
schedule as the IPPS (that is, for each Federal fiscal year). The 
impacts of our policy changes on LTCHs, where applicable, are 
discussed below.

V. Effects on Excluded Hospitals and Hospital Units

    As of July 2007, there were 1,198 hospitals excluded from the 
IPPS. Of these 1,187 hospitals, 485 IPFs, 4 LTCHs, 82 children's 
hospitals, 11 cancer hospitals, and 15 RNHCIs are either being paid, 
on a reasonable cost basis or have a portion of the PPS payment 
based on reasonable cost principles subject to the rate-of-increase 
ceiling under Sec.  413.40. The remaining providers, 215 IRFs and 
386 LTCHs, are paid 100 percent of the Federal prospective rate 
under the IRF PPS and the LTCH PPS, respectively. As stated above, 
IRFs and IPFs that are not under a transition period are not 
affected by this final rule with comment period. (IPFs under a 
transition period do have a portion of their PPS payment based on 
reasonable cost principles and thus are affected by this final rule 
with comment period.) The impacts of the changes to LTCHs are 
discussed separately below. In addition, there are 1,276 IPFs co-
located in hospitals otherwise subject to the IPPS, paid on a blend 
of the IPF PPS per diem payment and the reasonable cost-based 
payment and 986 IRFs (paid under the IRF PPS) co-located in 
hospitals otherwise subject to the IPPS. Under Sec.  
413.40(a)(2)(i)(A), the rate-of-increase ceiling is not applicable 
to the 93 IPPS excluded hospitals and units in Maryland that are 
paid in accordance with the waiver at section 1814(b)(3) of the Act.
    In the past, hospitals and units excluded from the IPPS have 
been paid based on their reasonable costs subject to limits as 
established by the Tax Equity and Fiscal Responsibility Act of 1982 
(TEFRA). Hospitals that continue to be paid fully on a reasonable 
cost basis are subject to TEFRA limits for FY 2008. For these 
hospitals (cancer and children's hospitals), consistent with section 
1886(b)(3)(B)(ii) of the Act, the update is the percentage increase 
in the FY 2008 IPPS operating market basket, which is 3.3 percent, 
based on Global Insights, Inc.'s 2007 second quarter forecast of the 
IPPS operating market basket increase. In addition, in accordance 
with Sec.  403.752(a) of the regulations, RNHCIs are paid under 
Sec.  413.40, which also uses section 1886(b)(3)(B)(ii) of the Act 
to update target amounts by the rate-of-increase percentage. For 
RNHCIs, the update is the percentage increase in the FY 2008 IPPS 
operating market basket increase, which is 3.3 percent, based on 
Global Insight, Inc.'s 2007 second quarter forecast of the IPPS 
operating market basket increase.
    Effective for cost reporting periods beginning on or after 
October 1, 2002, LTCHs that elected to be paid based on 100 percent 
of the LTCH PPS are paid, based on a Federal prospective payment 
amount that is updated annually. Existing LTCHs received a PPS 
blended payment that consisted of the Federal prospective payment 
rate and a reasonable cost-based payment rate over a 5-year 
transition period, unless the LTCH elected to be paid at 100 percent 
of the Federal prospective rate at the beginning of any of its cost 
reporting periods during the 5-year transition period. In accordance 
with Sec.  412.533, for cost reporting periods beginning on or after 
October 1, 2006, the LTCH PPS transition blend percentages are

[[Page 48159]]

100 percent of the Federal prospective payment amount and zero 
percent of the PPS amount calculated under reasonable cost 
principles. FY 2007 was the fifth year of the 5-year transition 
period established under Sec.  412.533. Because the reasonable cost-
based amount is zero percent for cost reporting periods beginning 
during FY 2008, no LTCH will have a portion of its PPS payment that 
is based in part on reasonable cost subject to the rate-of-increase 
ceiling during FY 2008 or thereafter. Thus, there is no longer a 
need for an update factor for LTCHs' TEFRA target amount for FY 
2008.
    The final rule implementing the IPF PPS (69 FR 66922) 
established a 3-year transition to the IPF PPS during which some 
providers will received a blend of the IPF PPS per diem payment and 
the TEFRA reasonable cost-based payment. Under this final rule with 
comment period, the FY 2008 rate-of-increase percentage that is 
applied to FY 2007 target amounts in order to calculate FY 2008 
target amounts is 3.3 percent, based on Global Insight, Inc.'s 2007 
second quarter forecast of the excluded hospital market basket 
increase.
    The impact on excluded hospitals and hospital units of the 
update in the rate-of-increase limit depends on the cumulative cost 
increases experienced by each excluded hospital or unit since its 
applicable base period. For excluded hospitals and units that have 
maintained their cost increases at a level below the rate-of-
increase limits since their base period, the major effect is on the 
level of incentive payments these hospitals and hospital units 
receive. Conversely, for excluded hospitals and hospital units with 
per case cost increases above the cumulative update in their rate-
of-increase limits, the major effect is the amount of excess costs 
that will not be reimbursed.
    We note that, under Sec.  413.40(d)(3), an excluded hospital or 
unit whose costs exceed 110 percent of its rate-of-increase limit 
receives its rate-of-increase limit plus 50 percent of the 
difference between its reasonable costs and 110 percent of the 
limit, not to exceed 110 percent of its limit. In addition, under 
the various provisions set forth in Sec.  413.40, certain excluded 
hospitals and hospital units can obtain payment adjustments for 
justifiable increases in operating costs that exceed the limit.

VI. Quantitative Effects of the Policy Changes Under the IPPS for 
Operating Costs

A. Basis and Methodology of Estimates

    In this final rule with comment period, we are announcing policy 
changes and payment rate updates for the IPPS for operating costs. 
Changes to the capital payments are discussed in section VIII. of 
this Appendix.
    Based on the overall percentage change in payments per case 
estimated using our payment simulation model, we estimate that total 
FY 2008 operating payments will increase 3.5 percent compared to FY 
2007, largely due to the statutorily mandated update to the IPPS 
rates. This amount reflects an adjustment of -1.2 percent to the 
IPPS standardized amounts to offset an anticipated increase in 
payments resulting from improved documentation and coding that does 
not represent real increases in underlying resource demands and 
patient acuity due to the adoption of MS-DRGs. The impacts do not 
illustrate changes in hospital admissions or real case-mix 
intensity, which will also affect overall payment changes.
    We have prepared separate impact analyses of the changes to each 
system. This section deals with changes to the operating prospective 
payment system. Our payment simulation model relies on the most 
recent available data to enable us to estimate the impacts on 
payments per case of certain changes in this final rule with comment 
period. However, there are other changes for which we do not have 
data available that would allow us to estimate the payment impacts 
using this model. For those changes, we have attempted to predict 
the payment impacts based upon our experience and other more limited 
data.
    The data used in developing the quantitative analyses of changes 
in payments per case presented below are taken from the FY 2006 
MedPAR file and the most current Provider-Specific File that is used 
for payment purposes. Although the analyses of the changes to the 
operating PPS do not incorporate cost data, data from the most 
recently available hospital cost report were used to categorize 
hospitals. Our analysis has several qualifications. First, in this 
analysis, we do not make adjustments for future changes in such 
variables as admissions, lengths of stay, or underlying growth in 
real case-mix. Second, due to the interdependent nature of the IPPS 
payment components, it is very difficult to precisely quantify the 
impact associated with each change. Third, we use various sources 
for the data used to categorize hospitals in the tables. In some 
cases, particularly the number of beds, there is a fair degree of 
variation in the data from different sources. We have attempted to 
construct these variables with the best available source overall. 
However, for individual hospitals, some miscategorizations are 
possible.
    Using cases from the FY 2006 MedPAR file, we simulated payments 
under the operating IPPS given various combinations of payment 
parameters. Any short-term, acute care hospitals not paid under the 
IPPS (Indian Health Service hospitals and hospitals in Maryland) 
were excluded from the simulations. The impact of payments under the 
capital IPPS, or the impact of payments for costs other than 
inpatient operating costs, are not analyzed in this section. 
Estimated payment impacts of FY 2008 changes to the capital IPPS are 
discussed in section VIII. of this Appendix.
    The changes discussed separately below are the following:
    <bullet> The effects of the annual reclassification of diagnoses 
and procedures, transition to the MS-DRG system, the recalibration 
of the DRG relative weights (including the expansion to 15 charge to 
cost ratios) as required by section 1886(d)(4)(C) of the Act.
    <bullet> The effects of the changes in hospitals' wage index 
values reflecting wage data from hospitals' cost reporting periods 
beginning during FY 2004, compared to the FY 2003 wage data.
    <bullet> The effects of the wage and recalibration budget 
neutrality factors.
    <bullet> The effects of the expiration of the labor market area 
transition for those hospitals that were urban under the old labor 
market area designations and are now considered rural hospitals.
    <bullet> The effects of geographic reclassifications by the 
MGCRB that will be effective in FY 2008.
    <bullet> The effects of the adjustment to the application of the 
rural floor budget neutrality provision on the wage index instead of 
on the standardized amount.
    <bullet> The effects of application of an imputed rural floor to 
States that have no rural areas and to States that have rural areas 
but no IPPS hospitals are located in those areas (69 FR 49109).
    <bullet> The effects of the September 30, 2007 expiration of 
section 508 of Pub. L. 108-173, which allowed qualifying hospitals 
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 is located (or, at the discretion of the 
Secretary, to an area within a contiguous State).
    <bullet> The effects of section 505 of Pub. L. 108-173, which 
provides for an increase in a hospital's wage index if the hospital 
qualifies by meeting a threshold percentage of residents of the 
county where the hospital is located who commute to work at 
hospitals in counties with higher wage indexes.
    <bullet> The effect of the budget neutrality adjustment being 
made for the adoption of the MS-DRGs under section 1886(d)(3)(A)(iv) 
of the Act for the change in aggregate payments that is a result of 
changes in the coding or classification of discharges that do not 
reflect real changes in case-mix.
    <bullet> The total estimated change in payments based on FY 2008 
policies relative to payments based on FY 2007 policies.
    To illustrate the impacts of the FY 2008 changes, our analysis 
begins with a FY 2007 baseline simulation model using: the FY 2008 
update of 3.3 percent; the FY 2007 DRG GROUPER (Version 24.0); the 
most current CBSA designations for hospitals based on OMB's MSA 
definitions; the FY 2007 wage index; and no MGCRB reclassifications. 
Outlier payments are set at 5.1 percent of total operating DRG and 
outlier payments.
    Section 1886(b)(3)(B)(viii) of the Act, as added by section 
5001(a) of Pub. L. 109-171, provides that for FY 2007 and subsequent 
years, the update factor will be reduced by 2.0 percentage points 
for any hospital that does not submit quality data in a form and 
manner and at a time specified by the Secretary. At the time this 
impact was prepared, 146 providers did not receive the full market 
basket rate-of-increase for FY 2007 because they failed the quality 
data submission process. For purposes of the simulations shown 
below, we modeled the payment changes for FY 2008 using a reduced 
update for these 146 hospitals. However, we do not have enough 
information to determine which hospitals will not receive the full 
market basket rate-of-increase for FY 2008 at this time.
    Each policy change, statutorily or otherwise, is then added 
incrementally to this baseline, finally arriving at an FY 2008 model 
incorporating all of the changes. This simulation allows us to 
isolate the effects of each change.

[[Page 48160]]

    Our final comparison illustrates the percent change in payments 
per case from FY 2007 to FY 2008. Three factors not discussed 
separately have significant impacts here. The first is the update to 
the standardized amount. In accordance with section 1886(b)(3)(B)(i) 
of the Act, we are updating the standardized amounts for FY 2008 
using the most recently forecasted hospital market basket increase 
for FY 2008 of 3.3 percent. (Hospitals that fail to comply with the 
quality data submission requirements to receive the full update will 
receive an update reduced by 2.0 percentage points to 1.3 percent.) 
Under section 1886(b)(3)(B)(iv) of the Act, the updates to the 
hospital-specific amounts for SCHs and for MDHs are also equal to 
the market basket increase, or 3.3 percent.
    A second significant factor that affects the changes in 
hospitals' payments per case from FY 2007 to FY 2008 is the change 
in a hospital's geographic reclassification status from one year to 
the next. That is, payments may be reduced for hospitals 
reclassified in FY 2007 that are no longer reclassified in FY 2008. 
Conversely, payments may increase for hospitals not reclassified in 
FY 2007 that are reclassified in FY 2008. Particularly with the 
expiration of section 508 of Pub. L. 108-173, the reclassification 
provision, these impacts can be quite substantial, so if a 
relatively small number of hospitals in a particular category lose 
their reclassification status, the percentage change in payments for 
the category may be below the national mean.
    A third significant factor is that we currently estimate that 
actual outlier payments during FY 2007 will be 4.6 percent of total 
DRG payments. When the FY 2007 final rule was published, we 
projected FY 2007 outlier payments would be 5.1 percent of total DRG 
plus outlier payments; the average standardized amounts were offset 
correspondingly. The effects of the lower than expected outlier 
payments during FY 2008 (as discussed in the Addendum to this final 
rule with comment period) are reflected in the analyses below 
comparing our current estimates of FY 2007 payments per case to 
estimated FY 2008 payments per case (with outlier payments projected 
to equal 5.1 percent of total DRG payments).

B. Analysis of Table I

    Table I displays the results of our analysis of the changes for 
FY 2008. The table categorizes hospitals by various geographic and 
special payment consideration groups to illustrate the varying 
impacts on different types of hospitals. The top row of the table 
shows the overall impact on the 3,534 hospitals included in the 
analysis.
    The next four rows of Table I contain hospitals categorized 
according to their geographic location: All urban, which is further 
divided into large urban and other urban; and rural. There are 2,539 
hospitals located in urban areas included in our analysis. Among 
these, there are 1,406 hospitals located in large urban areas 
(populations over 1 million), and 1,133 hospitals in other urban 
areas (populations of 1 million or fewer). In addition, there are 
995 hospitals in rural areas. The next two groupings are by bed-size 
categories, shown separately for urban and rural hospitals. The 
final groupings by geographic location are by census divisions, also 
shown separately for urban and rural hospitals.
    The second part of Table I shows hospital groups based on 
hospitals' FY 2008 payment classifications, including any 
reclassifications under section 1886(d)(10) of the Act. For example, 
the rows labeled urban, large urban, other urban, and rural show 
that the number of hospitals paid based on these categorizations 
after consideration of geographic reclassifications (including 
reclassifications under section 1886(d)(8)(B) and section 
1886(d)(8)(E) of the Act that have implications for capital 
payments) are 2,578, 1,425, 1,153 and 956, respectively.
    The next three groupings examine the impacts of the changes on 
hospitals grouped by whether or not they have GME residency programs 
(teaching hospitals that receive an IME adjustment) or receive DSH 
payments, or some combination of these two adjustments. There are 
2,480 nonteaching hospitals in our analysis, 815 teaching hospitals 
with fewer than 100 residents, and 239 teaching hospitals with 100 
or more residents.
    In the DSH categories, hospitals are grouped according to their 
DSH payment status, and whether they are considered urban or rural 
for DSH purposes. The next category groups together hospitals 
considered urban after geographic reclassification, in terms of 
whether they receive the IME adjustment, the DSH adjustment, both, 
or neither.
    The next five rows examine the impacts of the changes on rural 
hospitals by special payment groups (SCHs, RRCs, and MDHs), as well 
as rural hospitals not receiving a special payment designation. 
There were 194 RRCs, 367 SCHs, 150 MDHs, 99 hospitals that are both 
SCHs and RRCs, and 8 hospitals that are both an MDH and an RRC.
    The next series of groupings concern the geographic 
reclassification status of hospitals. The first grouping displays 
all urban hospitals that were reclassified by the MGCRB for FY 2008. 
The second grouping shows the MGCRB rural reclassifications.
    The final two groupings are based on the type of ownership and 
the hospital's Medicare utilization expressed as a percent of total 
patient days. These data were taken from the FY 2004 Medicare cost 
reports.

[[Page 48161]]



                                                                        Table I.--Impact Analysis of Changes for FY 2008
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                            FY 2008
                                                                                          Wage Index                                                                        All FY      All FY
                                                         FY 2008                FY 2008   Expiration                                                                         2008        2008
                                                      Transitional             DRG, Rel.    for the     FY 2008                               Expiration of     FY 2008   Changes w/  Changes w/
                                           Number of   \2/3\ Cost    FY 2008    Wts. and  Transition     MGCRB    Application  Application     Section 508       Out-         CMI         CMI
                                           Hospitals  \1/3\ Charge  Wage Data     Wage        for      Reclass-      of the     of Imputed      Provider       Migration  Adjustment  Adjustment
                                              \1\       Weights &      \3\       Index     Hospitals  ifications  Rural Floor  Rural Floor  Reclassification  Adjustment   Prior to       and
                                                       DRG Changes              Changes     Moving        \6\         \7\          \8\             \9\           \10\      Estimated   Estimated
                                                           \2\                    \4\     from Urban                                                                        Growth      Growth
                                                                                           to Rural                                                                          \11\        \12\
                                                                                              \5\
                                                 (1)          (2)         (3)        (4)         (5)         (6)         (7)          (8)             (9)           (10)        (11)        (12)
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
All Hospitals............................       3534          0.4        -0.1          0           0           0           0            0            -0.1              0         2.3         3.5
By Geographic Location:
    Urban hospitals......................       2539          0.5        -0.1        0.1           0        -0.2           0            0            -0.1              0         2.6         3.9
    Large urban areas....................       1406          0.9        -0.1        0.4           0        -0.3           0            0            -0.1              0         3.1         4.3
    Other urban areas....................       1133          0.1           0       -0.2           0        -0.1         0.1            0            -0.2              0           2         3.2
    Rural hospitals......................        995         -0.9        -0.1       -1.2        -0.2         1.8        -0.1            0               0            0.1           0         1.2
Bed Size (Urban):
    0-99 beds............................        630         -0.4           0       -0.6        -0.1        -0.4         0.1            0            -0.2              0         0.8         2.1
    100-199 beds.........................        851          0.6           0        0.3           0        -0.2         0.1            0            -0.2              0         2.3         3.6
    200-299 beds.........................        480          0.5           0        0.1           0        -0.2           0            0            -0.1              0         2.4         3.7
    300-499 beds.........................        411          0.6           0        0.2           0        -0.2           0            0            -0.1              0           3         4.2
    500 or more beds.....................        167          0.7        -0.3        0.1           0        -0.3        -0.1         -0.1            -0.1              0         2.9         4.1
Bed Size (Rural):
    0-49 beds............................        337         -1.8        -0.1       -1.9        -0.1         0.5        -0.1            0            -0.1            0.2        -1.6        -0.4
    50-99 beds...........................        372         -1.2        -0.1       -1.4        -0.1           1        -0.1            0               0            0.1        -0.3         0.9
    100-149 beds.........................        173         -0.8           0       -1.1        -0.4         2.3        -0.1            0               0            0.1         0.4         1.6
    150-199 beds.........................         68         -0.5           0       -0.8           0         2.5        -0.1            0               0              0         0.3         1.5
    200 or more beds.....................         45         -0.5        -0.1       -0.8           0         2.7        -0.1            0               0              0         0.9         2.1
Urban by Region:
    New England..........................        122          0.1         0.5        0.3           0         0.5         0.9         -0.1            -0.2            0.1         2.4         3.6
    Middle Atlantic......................        350          0.6        -0.3       -0.1           0         0.2        -0.2          0.3            -0.5              0         2.3         3.5
    South Atlantic.......................        390          0.6        -0.1        0.1           0        -0.4        -0.1         -0.1               0              0         2.7           4
    East North Central...................        395          0.6        -0.2        0.1           0        -0.3        -0.1         -0.1            -0.1              0         2.4         3.7
    East South Central...................        166          0.1        -0.4       -0.6           0        -0.3        -0.1         -0.1               0              0         2.1         3.3
    West North Central...................        157            0         0.1       -0.2           0        -0.7        -0.2         -0.1               0              0         2.2         3.5
    West South Central...................        355          0.7        -0.3        0.1           0        -0.6        -0.1         -0.1               0              0         2.6         3.8
    Mountain.............................        153          0.6           0        0.3        -0.1        -0.2        -0.1         -0.1               0              0         2.3         3.6
    Pacific..............................        398          0.9         0.5        1.1           0        -0.3         0.6         -0.1            -0.1              0         3.9         5.2
    Puerto Rico..........................         53          1.1        -0.3        0.4           0        -0.6        -0.1            0               0              0         2.9         4.2
Rural by Region:
    New England..........................         23         -0.8        -1.2       -2.2           0         2.6        -0.1            0               0              0           0         1.2
    Middle Atlantic......................         72           -1         0.2         -1         0.2         1.9        -0.1            0            -0.1              0        -0.2           1
    South Atlantic.......................        173         -0.4        -0.1       -0.8        -0.2         2.1        -0.1            0               0            0.1         0.8           2
    East North Central...................        122           -1         0.1       -1.1        -0.1         1.3        -0.1            0               0            0.1        -0.1         1.1
    East South Central...................        177         -0.9        -0.3       -1.4        -0.2         2.3        -0.2         -0.1               0            0.1         0.5         1.7
    West North Central...................        115         -1.1           0       -1.2           0         1.2        -0.1            0               0              0        -0.2           1
    West South Central...................        199         -1.4        -0.2       -1.8        -0.5         2.2        -0.1            0               0            0.1        -1.3        -0.1
    Mountain.............................         77         -0.8         0.2       -0.6           0         0.5        -0.1            0               0              0        -0.3         0.9
    Pacific..............................         37         -0.7         0.8       -0.1           0         1.7        -0.1            0            -0.2              0         1.3         2.5
By Payment Classification:
    Urban hospitals......................       2578          0.5        -0.1        0.1           0        -0.2           0            0            -0.1              0         2.6         3.8
    Large urban areas....................       1425          0.8        -0.1        0.4           0        -0.3           0            0            -0.1              0         3.1         4.3
    Other urban areas....................       1153          0.1           0       -0.2           0           0         0.1            0            -0.2              0           2         3.2
    Rural areas..........................        956         -0.9        -0.1       -1.2        -0.2         1.7        -0.1            0            -0.1            0.1           0         1.2
Teaching Status:
    Nonteaching..........................       2480          0.1           0       -0.2           0         0.2         0.1            0            -0.1              0         1.8           3
    Fewer than 100 residents.............        815          0.4        -0.1          0           0        -0.1           0            0            -0.1              0         2.4         3.7
    100 or more residents................        239          0.9        -0.2        0.3           0        -0.2        -0.1            0            -0.2              0         3.2         4.4
Urban DSH:
    Non-DSH..............................        859            0        -0.2       -0.5           0        -0.1           0          0.1            -0.2              0         1.6         2.8

[[Page 48162]]

 
    100 or more beds.....................       1512          0.7           0        0.3           0        -0.2           0            0            -0.1              0         2.9         4.1
    Less than 100 beds...................        355         -0.2         0.2       -0.3        -0.1        -0.1         0.1         -0.1            -0.1              0         1.7           3
Rural DSH:
    SCH..................................        384         -1.4           0       -1.5           0         0.2           0            0               0            0.1        -0.8         0.4
    RRC..................................        203         -0.5           0       -0.8        -0.2         2.9        -0.1            0            -0.1              0         0.6         1.8
    100 or more beds.....................         46         -0.3        -0.1       -0.8        -0.8         1.5        -0.2         -0.1            -0.1            0.3         1.3         2.5
    Less than 100 beds...................        175         -1.1        -0.1       -1.4        -0.4         1.2        -0.2         -0.1            -0.1            0.3         0.2         1.5
Urban teaching and DSH:
    Both teaching and DSH................        807          0.7        -0.1        0.3           0        -0.3           0            0            -0.1              0           3         4.2
    Teaching and no DSH..................        186          0.1        -0.3       -0.5           0           0        -0.1          0.1            -0.4            0.1         1.9         3.1
    No teaching and DSH..................       1060          0.5         0.1        0.3           0          -0         0.1            0               0              0         2.5         3.8
    No teaching and no DSH...............        525          0.1        -0.1       -0.3           0        -0.3           0            0            -0.1              0         1.6         2.9
Special Hospital Types:
    RRC..................................        194         -0.3        -0.1       -0.7        -0.2         3.2        -0.1         -0.1               0              0         1.5         2.7
    SCH..................................        367         -1.4           0       -1.4        -0.1         0.1           0            0               0              0          -1         0.2
    MDH..................................        150         -1.6        -0.1       -1.8           0         0.3        -0.1            0               0            0.1        -0.6         0.6
     SCH and RRC.........................         99         -0.8           0       -0.9           0         0.7        -0.1            0               0              0        -0.4         0.8
     MDH and RRC.........................          8         -1.5           0       -1.5           0         0.8          -0            0               0              0        -1.1         0.1
Type of Ownership:
    Voluntary............................       2064          0.4        -0.1       -0.1           0           0           0            0            -0.1              0         2.2         3.5
    Proprietary..........................        823          0.5         0.1        0.3           0           0           0            0            -0.1              0         2.6         3.9
    Government...........................        597          0.4         0.1        0.2           0          -0         0.1         -0.1               0              0         2.4         3.6
Medicare Utilization as a Percent of
 Inpatient Days:
    0-25.................................        230          1.5           0        1.2           0        -0.3        -0.1         -0.1               0              0         4.2         5.5
    25-50................................       1289          0.7           0        0.3           0        -0.3           0            0            -0.1              0           3         4.3
    50-65................................       1451            0        -0.1       -0.4           0         0.4           0            0            -0.1              0         1.6         2.9
    Over 65..............................        440         -0.7        -0.2       -1.2           0         0.4        -0.1            0            -0.3              0         0.5         1.8
FY 2008 Reclassifications by the Medicare
 Geographic Classification Review Board:
    All Reclassified Hospitals...........        757          0.1           0       -0.2        -0.1         2.2        -0.1            0            -0.2              0         1.8         3.1
    Non-Reclassified Hospitals...........       2777          0.5        -0.1        0.1           0        -0.6           0            0            -0.1              0         2.5         3.7
    Urban Hospitals Reclassified.........        393          0.5           0        0.1           0           2        -0.1            0            -0.3              0         2.4         3.6
    Urban Nonreclassified, FY 2008:......       2145          0.6        -0.1        0.1           0        -0.7           0            0            -0.1              0         2.7         3.9
    All Rural Hospitals Reclassified Full        364         -0.7           0         -1        -0.2         2.9        -0.1            0               0              0         0.6         1.8
     Year FY 2008:.......................

[[Page 48163]]

 
    Rural Nonreclassified Hospitals Full         569         -1.2        -0.2       -1.5        -0.1        -0.2        -0.1            0            -0.1            0.2          -1         0.2
     Year FY 2008:.......................
    All Section 401 Reclassified                  29         -0.8         0.1       -0.8           0        -0.8          -0            0            -0.6              0        -0.9         0.3
     Hospitals:..........................
    Other Reclassified Hospitals (Section         63         -0.7        -0.3       -1.3           0         3.3        -0.1            0               0              0         0.7         1.9
     1886(d)(8)(B))......................
    Former 508 Hospitals.................        107          0.5        -0.5       -0.3           0         0.4        -0.1            0            -2.5            0.1        -0.7         0.5
    Specialty Hospitals..................
    Cardiac specialty Hospitals..........         22         -2.5        -0.3       -2.9           0        -0.7         0.1         -0.1               0              0        -0.3         0.9
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Because data necessary to classify some hospitals by category were missing, the total number of hospitals in each category may not equal the national total. Discharge data are from FY
  2006, and hospital cost report data are from reporting periods beginning in FY 2005 and FY 2004.
\2\ This column displays the payment impact of the changes to the V25 GROUPER and the recalibration of the DRG weights based on FY 2006 MedPAR data in accordance with section
  1886(d)(4)(C)(iii) of the Act.
\3\ This column displays the payment impact of updating the wage index data to the FY 2004 cost report data.
\4\ This column displays the payment impact of the budget neutrality factor for DRG and wage index changes in accordance with section 1886(d)(4)(C)(iii) of the Act and section 1886(d)(3)(E) of
  the Act.
\5\ Shown here are the effects of the end of the three-year provision where rural hospitals that were formerly located in urban areas will now receive the wage index of the MSA that they are
  currently located in for FY 2008.
\6\ Shown here are the effects of geographic reclassifications by the Medicare Geographic Classification Review Board (MGCRB). The effects demonstrate the FY 2008 payment impact of going from
  no reclassifications to the reclassifications scheduled to be in effect for FY 2008. Reclassification for prior years has no bearing on the payment impacts shown here. This column reflects
  the geographic budget neutrality factor of 0.991695.
\7\ This column displays the effects of the changes in the rural floor budget neutrality adjustment applied on the wage index instead of on the standardized amount. The column reflects a rural
  floor budget neutrality factor of 0.996660.
\8\ This column displays the payment impact of the application of the imputed rural floor applied to the wage index for providers located in states without rural areas.
\9\ This column displays the payment impact of the expiration of section 508 of Pub. L. 108-17, which had allowed qualifying hospitals to reclassify to receive the wage index of another area
  in their state.
\10\ This column displays the impact of section 505 of Pub. L. 108-173, which provides for an increase in a hospitals wage index if the hospital qualifies by meeting a threshold percentage of
  residents of the county where the hospital is located who commute to work at hospitals in counties with higher wage indexes.
\11\ This column shows changes in payments from FY 2007 to FY 2008 including a 0.988 case mix index adjustment for coding and documentation improvements that are anticipated with the adoption
  of the MS-DRGs prior to the estimated growth occurring. It incorporates all of the changes displayed in Columns 4,5 ,6 ,7 ,8, 9,10 and (the changes displayed in Columns 2 and 3 are included
  in Column 4).
\12\ This column shows changes in payments from FY 2007 to FY 2008 with a case-mix index adjustment and the estimated growth for improvements in documentation and coding. It incorporates all
  of the changes displayed in Columns 4,5 ,6 ,7 ,8, 9,10 and (the changes displayed in Columns 2 and 3 are included in Column 4). It also reflects the impact of the FY 2008 update, and changes
  in hospitals' reclassification status in FY 2008 compared to FY 2007. The sum of these impacts may be different from the percentage changes shown here due to rounding and interactive
  effects.


[[Page 48164]]

C. Effects of the Changes to the DRG Reclassifications and Relative 
Cost-Based Weights (Column 2)

    In Column 2 of Table I, we present the combined effects of the 
DRG reclassifications and recalibration, as discussed in section II. 
of the preamble to this final rule with comment period. Section 
1886(d)(4)(C)(i) of the Act requires us annually to make appropriate 
classification changes in order to reflect changes in treatment 
patterns, technology, and any other factors that may change the 
relative use of hospital resources.
    As discussed in the preamble of this final rule with comment 
period, we are continuing the 3-year transition from charge-based to 
cost-based relative weights. In addition, we are implementing the 
MS-DRGs in a two year transition that will increase the number of 
DRGs from 538 to 745. For FY 2008, the first year of the transition, 
50 percent of the relative weight for a DRG is based on the two-
thirds cost weight/one-third charge weight calculated using FY 2006 
MedPAR data grouped to the Version 24.0 (FY 2007) DRGs. The 
remaining 50 percent of the FY 2008 relative weight for a DRG is 
based on the two-thirds cost weight/one-third charge weight 
calculated using FY 2006 MedPAR grouped to the Version 25.0 MS-DRGs. 
Furthermore, the relative weights have been calculated using 15 cost 
centers as described in Section H of the preamble whereas the 
relative weights in FY 2007 were calculated using 13 cost centers. 
In column 2, we compare aggregate payments using the blended FY 2008 
relative weights (\2/3\ cost, \1/3\ charge, 50 percent MS-DRGs and 
50 percent CMS DRGs) for the MS-DRGs to the FY 2007 blended relative 
weights (\1/3\ cost, \2/3\ charge) for the CMS DRGs. The methods of 
calculating the relative weights and the reclassification changes to 
the GROUPER are described in more detail in section II.H. of the 
preamble to this final rule with comment period. We note that, 
consistent with section 1886(d)(4)(C)(iii) of the Act, we are 
applying a budget neutrality factor to ensure that the overall 
payment impact of the DRG changes (combined with the wage index 
changes) is budget neutral. This budget neutrality factor of 
0.996563 is applied to payments in Column 4 and not Column 2 because 
it is a combined DRG reclassification and recalibration and wage 
index budget neutrality factor.
    The changes to the relative weights and DRGs shown in column 2 
are prior to any offset for budget neutrality. The ``All Hospitals'' 
line indicates that changes in this column will increase payments by 
0.4 percent. However, as stated earlier, the changes shown in this 
column are combined with revisions to the wage index and a single 
budget neutrality adjustment is made for these changes and shown in 
column 4. Thus, the impact after accounting only for budget 
neutrality for changes to the DRG relative weights and 
classification is somewhat lower than the figures shown in this 
column (approximately 0.4 percent). We estimate that changes to the 
relative weights and DRGs will increase payments to hospitals 
located in large urban areas (populations over 1 million) by 
approximately 0.9 percent before applying an adjustment for budget 
neutrality. These changes generally increase payments to hospitals 
in all urban areas (0.5 percent) and large teaching hospitals (0.9 
percent) before applying an adjustment for budget neutrality. Rural 
hospitals will generally experience a decrease in payments from 
these changes (-0.9 percent) before applying an adjustment for 
budget neutrality. Cardiac specialty hospitals would experience the 
greatest decline in payments (-2.5 percent) before applying an 
adjustment for budget neutrality from the changes to blended MS-DRGs 
and the blended relative cost weights.

D. Effects of Wage Index Changes (Column 3)

    Section 1886(d)(3)(E) of the Act requires that, beginning 
October 1, 1993, we annually update the wage data used to calculate 
the wage index. In accordance with this requirement, the wage index 
for FY 2008 is based on data submitted for hospital cost reporting 
periods beginning on or after October 1, 2003 and before October 1, 
2004.
    The estimated impact of the wage data on hospital payments is 
isolated in Column 3 by holding the other payment parameters 
constant in this simulation. That is, Column 3 shows the percentage 
changes in payments when going from a model using the FY 2007 wage 
index, based on FY 2003 wage data and having a 100-percent 
occupational mix adjustment applied, to a model using the FY 2008 
pre-reclassification wage index, also having a 100-percent 
occupational mix adjustment applied, based on FY 2004 wage data. The 
wage data collected on the FY 2004 cost report include overhead 
costs for contract labor that were not collected on FY 2003 and 
earlier cost reports. The impacts below incorporate the effects of 
the FY 2004 wage data collected on hospital cost reports, including 
additional overhead costs for contract labor compared to the wage 
data from FY 2003 cost reports that were used to calculate the FY 
2007 wage index.
    Column 3 shows the impacts of updating the wage data using FY 
2004 cost reports. Overall, the new wage data will lead to a -0.1 
percent change for all hospitals before application of the wage and 
DRG recalibration budget neutrality adjustment shown in column 4. 
Thus, the figures in this column are approximately 0.1 below what 
they otherwise would be if they also illustrated a budget neutrality 
adjustment solely for changes to the wage index. Among the regions, 
the largest increase is in the rural Pacific region, which 
experiences a 0.8 percent increase before applying an adjustment for 
budget neutrality. The largest decline from updating the wage data 
is seen in rural New England region (a 1.2 percent decrease) before 
applying an adjustment for budget neutrality. The decrease in the 
pre-reclassified wage index for rural New England is due to a change 
in our policy regarding how the wage data for New England deemed 
county hospitals are treated in the wage index calculation, as 
discussed in section III.I.10. of the preamble of this final rule 
with comment period. Also discussed in that section, the policy 
change does not affect the post-reclassified wage data that are used 
in setting the IPPS rates and reflected in Tables 4A, 4B, and 4C of 
the Addendum to this final rule with comment period. Thus, even 
though the pre-reclassified wage index will decline because of the 
change we made to our policy with respect to New England deemed 
counties, it will have no effect under the IPPS because we use the 
post-reclassified wage indices for payment. However, non-PPS payment 
systems (SNF, IRF, and HHA, among others) that use the pre-
reclassified wage index may be affected by this policy change. 
However, we are limiting this policy change for New England deemed 
counties only to IPPS hospitals because it was only addressed in the 
FY 2008 IPPS proposed rule. Any change to non-PPS provider wage 
indices will be addressed in the respective payment rules for these 
payment systems.
    In looking at the wage data itself, the national average hourly 
wage increased 4.3 percent compared to FY 2007. Therefore, the only 
manner in which to maintain or exceed the previous year's wage index 
was to match or exceed the national 4.3 percent increase in average 
hourly wage. Of the 3,475 hospitals with wage data for both FYs 2007 
and 2008, 1,712, or 49.3 percent, experienced an average hourly wage 
increase of 4.3 percent or more.
    The following chart compares the shifts in wage index values for 
hospitals for FY 2008 relative to FY 2007. Among urban hospitals, 40 
will experience an increase of more than 5 percent and less than 10 
percent and 4 will experience an increase of more than 10 percent. 
Among rural hospitals, 37 will experience an increase of more than 5 
percent and less than 10 percent, and 3 will experience an increase 
of more than 10 percent. However, 940 rural hospitals will 
experience increases or decreases of less than 5 percent, while 
2,384 urban hospitals will experience increases or decreases of less 
than 5 percent. Fifty urban hospitals will experience decreases in 
their wage index values of more than 5 percent and less than 10 
percent. Fifteen urban hospitals will experience decreases in their 
wage index values of greater than 10 percent. Two rural hospitals 
will experience decreases of more than 5 percent, but less than 10 
percent. No rural hospitals will experience decreases of more than 
10 percent. These figures are changes in the wage index only which 
adjusts only 69.7 or 62 percent of a hospital's total payment 
depending upon whether the wage index is greater or less than 1.0. 
Therefore, these figures are illustrating a somewhat larger change 
in the wage index than would occur to the hospital's total payment.
    The following chart shows the projected impact for urban and 
rural hospitals.

[[Page 48165]]



------------------------------------------------------------------------
                                                   Number of hospitals
  Percentage change in area wage index values  -------------------------
                                                   Urban        Rural
------------------------------------------------------------------------
Increase more than 10 percent.................            4            3
Increase more than 5 percent and less than 10            40           37
 percent......................................
Increase or decrease less than 5 percent......        2,384          940
Decrease more than 5 percent and less than 10            50            2
 percent......................................
Decrease more than 10 percent.................           15            0
------------------------------------------------------------------------

E. Combined Effects of DRG and Wage Index Changes (Column 4)

    Section 1886(d)(4)(C)(iii) of the Act requires that changes to 
DRG reclassifications and the relative weights cannot increase or 
decrease aggregate payments. In addition, section 1886(d)(3)(E) of 
the Act specifies that any updates or adjustments to the wage index 
are to be budget neutral. As noted in the Addendum to this final 
rule with comment period, in determining the budget neutrality 
factor, we equated simulated aggregate payments for FY 2007 and FY 
2008 using the FY 2006 Medicare utilization data after applying the 
changes to the DRG relative weights and the wage index.
    We computed a wage and DRG recalibration budget neutrality 
factor of 0.996563. The 0.0 percent impact for all hospitals 
demonstrates that these changes, in combination with the budget 
neutrality factor, are budget neutral. In Table I, the combined 
overall impacts of the effects of both the DRG reclassifications and 
the updated wage index are shown in Column 4. The estimated changes 
shown in this column reflect the combined effects of the changes in 
Columns 2 and 3 and the budget neutrality factor for the revised FY 
2008 wage index. Due to the changes to the application of the rural 
floor budget neutrality, this column does not include the wage index 
floor for urban areas as required by section 4410 of Pub. L. 105-33. 
The effects of that provision are included in Column 7. There also 
may be some variation of plus or minus 0.1 percentage point due to 
rounding.

F. Effects of the Expiration of the 3-Year Provision Allowing Urban 
Hospitals That Were Converted to Rural as a Result of the FY 2005 
Labor Market Area Changes to Maintain the Wage Index of the Urban 
Labor Market Area in Which They Were Formerly Located (Column 5)

    The policy adopted in FY 2005 for urban hospitals that became 
rural under the new labor market area definitions is to expire in FY 
2008. In FY 2005, we adopted a policy that allowed urban hospitals 
that became rural under the new labor market area regions to 
maintain the wage index assignment of the MSA where they were 
located for the 3-year period FY 2005, FY 2006, and FY 2007. 
Beginning in FY 2008, these hospitals will receive their statewide 
rural wage index or their FY 2008 MGCRB reclassified wage index. 
Column 5 shows the impact of the expiration of the labor market area 
transition for those hospitals that were urban under the old labor 
market area designations and are now considered rural hospitals. The 
rural hospital row shows a 0.2 percent decrease from the end of the 
provision as these hold harmless hospitals are now considered 
geographically rural and are now receiving the wage index of the MSA 
where they are currently located.

G. Effects of MGCRB Reclassifications (Column 6)

    Our impact analysis to this point has assumed hospitals are paid 
on the basis of their actual geographic location (with the exception 
of ongoing policies that provide that certain hospitals receive 
payments on other bases than where they are geographically located). 
The changes in Column 6 reflect the per case payment impact of 
moving from this baseline to a simulation incorporating the MGCRB 
decisions for FY 2008 which affect hospitals' wage index area 
assignments.
    By February 28 of each year, the MGCRB makes reclassification 
determinations that will be effective for the next fiscal year, 
which begins on October 1. The MGCRB may approve a hospital's 
reclassification request for the purpose of using another area's 
wage index value. Hospitals may appeal denials of MGCRB decisions to 
the CMS Administrator. Further, hospitals have 45 days from 
publication of the IPPS rule in the Federal Register to decide 
whether to withdraw or terminate an approved geographic 
reclassification for the following year. This column reflects all 
MGCRB decisions, Administrator appeals and decisions of hospitals 
for FY 2008 geographic reclassifications.
    The overall effect of geographic reclassification is required by 
section 1886(d)(8)(D) of the Act to be budget neutral. Therefore, we 
are applying an adjustment of 0.991695 to ensure that the effects of 
the section 1886(d)(10) reclassifications are budget neutral. (See 
section II.A. of the Addendum to this final rule with comment 
period.) Geographic reclassification generally benefits hospitals in 
rural areas. We estimate that geographic reclassification will 
increase payments to rural hospitals by an average of 1.8 percent.

H. Effects of the Adjustment to the Application of the Rural Floor 
(Column 7)

    As discussed in section III.G. of the preamble of this final 
rule with comment period, section 4410 of Pub. L. 105-33 established 
the rural floor by requiring that the wage index for a hospital in 
any urban area cannot be less than the area wage index determined 
for the state's rural area. Since FY 1998, we have implemented this 
provision by adjusting the standardized amounts. In this final rule 
with comment period, we are changing how we apply budget neutrality 
to the rural floor beginning in FY 2008. Rather than applying a 
budget neutrality adjustment to the standardized amount, a uniform 
budget neutrality adjustment is applied to the wage index. 
Therefore, we are applying an adjustment to the wage index of 
0.996660 (-0.33 percent) to ensure that the rural floor adjustments 
are budget neutral as indicated by the zero effect on payments to 
hospitals overall.
    Column 7 shows the projected impact of change in the application 
of the rural floor. The column compares the post-reclassification FY 
2008 wage index of providers before the rural floor adjustment and 
the post-reclassification FY 2008 wage index of providers with the 
rural floor adjustment. Only urban hospitals can benefit from the 
rural floor provision. Because the provision is budget neutral, all 
other hospitals (that is, all rural hospitals and those urban 
hospitals to which the adjustment is not made) will experience a 
decrease in payments due to the budget neutrality adjustment. We 
project rural hospitals will experience a 0.1 percent decrease in 
payments. We project hospitals located in other urban areas 
(populations of 1 million or fewer) will experience a 0.1 percent 
increase in payments. The rural floor will benefit 69 percent of the 
hospitals in New Hampshire (9) and 39 percent of the hospitals in 
Connecticut (13), explaining the average increase of 0.9 percent 
shown in the table for hospitals located in New England. The average 
increase among hospitals in the Pacific region is estimated at 0.6 
percent and is explained by application of the rural floor to 62 
percent of the hospitals in California (207) and 18 percent of the 
hospitals in Washington (9).

I. Effects of Application of the Imputed Rural Floor (Column 8)

    The FY 2005 IPPS final rule (69 FR 49109) established a 
temporary imputed rural floor for all urban States from FY 2005 to 
FY 2007. The rural floor requires that an urban wage index cannot be 
lower than the wage index for any rural hospital in that State. 
Therefore, an imputed rural floor was established for States that do 
not have rural areas or rural IPPS hospitals. In this final rule, we 
are extending the imputed rural floor for one additional year 
through FY 2008.
    Column 8 shows the effects of application the imputed rural 
floor. Only hospitals located in New Jersey had been affected by the 
provision. Therefore only urban providers in the Mid-Atlantic region 
(NJ) will experience an increase by 0.3 percent, from the imputed 
rural floor being applied in that State.

[[Page 48166]]

J. Effects of the Expiration of Section 508 of Pub. L. 108-173 
(Column 9)

    Section 508 of Pub. L. 108-173 will expire on September 30, 
2007. As stated in the FY 2007 IPPS final rule (71 FR 48333), we 
established procedural rules under section 1886(d)(10)(D)(v) of the 
Act to address specific circumstances where individual and group 
reclassifications involve a section 508 hospital. In the final rule, 
the rules were designed to recognize the special circumstances of 
section 508 hospital reclassifications ending mid-year during FY 
2007 and were intended to allow previously approved 
reclassifications to continue through March 31, 2007, and new 
section 1886(d)(10) reclassifications to begin April 1, 2007, upon 
the conclusion of the section 508 reclassifications. Under these 
procedural rules, some section 1886(d)(10) hospital 
reclassifications are only in effect for the second half of the 
fiscal year. However, Division B, Title I, section 106(a) of the 
MIEA-TRHCA (Pub. L. 109-432) extended any geographic 
reclassifications of hospitals that would expire on March 31, 2007, 
by 6 months until September 30, 2007. For FY 2008, the providers 
that had been reclassified under section 508 in FY 2007 will receive 
payment using the wage index for the area where they are currently 
located. The impact of the expiration of the policy is modeled in 
Column 8 of Table I. Section 508 of Pub. L. 108-173 was not a budget 
neutral provision of the statute. Its enactment increased total 
payments for Medicare inpatient hospital services. Therefore, 
relative to FY 2007, the expiration of section 508 of Pub. L. 108-
173 will reduce Medicare inpatient hospital payments by an estimated 
0.1 percent.

K. Effects of the Wage Index Adjustment for Out-Migration (Column 
10)

    Section 1886(d)(13) of the Act, as added by section 505 of Pub. 
L. 108-173, provides for an increase in the wage index for hospitals 
located in certain counties that have a relatively high percentage 
of hospital employees who reside in the county, but work in a 
different area with a higher wage index. Hospitals located in 
counties that qualify for the payment adjustment are to receive an 
increase in the wage index that is equal to a weighted average of 
the difference between the wage index of the resident county, post-
reclassification and the higher wage index work area(s), weighted by 
the overall percentage of workers who are employed in an area with a 
higher wage index. With the out-migration adjustment, rural 
providers will experience a 0.1 percent increase in payments in FY 
2008 relative to no adjustment at all. We included these additional 
payments to providers in the impact table shown above, and we 
estimate the impact of these providers receiving the out-migration 
increase to be approximately $26 million.

L. Effects of All Changes With CMI Adjustment Prior to Estimated 
Growth (Column 11)

    Column 11 compares our estimate of payments per case between FY 
2007 and FY 2008 with all changes reflected in this final rule with 
comment period for FY 2008, including a 0.988 adjustment to the 
payment rates to account for anticipated improvements in 
documentation and coding that is expected to increase case-mix. We 
generally apply an adjustment to the DRGs to ensure budget 
neutrality assuming constant utilization. However, with the 2-year 
transition to the MS-DRGs, the number of DRGs expands from 538 to 
745. Therefore, the Office of the Actuary estimates an increase in 
the CMI due to improved coding and we have applied an additional 
adjustment to achieve budget neutrality. However, because we modeled 
the impact, including the adjustment for anticipated case-mix 
increase but not the actual case-mix increase itself in column 11, 
this column illustrates a total payment change that is less than 
what is anticipated to occur.

M. Effects of All Changes With CMI Adjustment and Estimated Growth 
(Column 12)

    Column 12 compares our estimate of payments per case between FY 
2007 and FY 2008, incorporating all changes reflected in this final 
rule with comment period for FY 2008 (including statutory changes). 
This column includes all of the policy changes and assumes the 1.2 
percent increase in case-mix from improved documentation and coding 
will occur equally across all hospitals.
    Column 12 reflects the impact of all FY 2008 changes relative to 
FY 2007, including those shown in Columns 2 through 10. The average 
increase for all hospitals is approximately 3.5 percent. This 
increase includes the effects of the 3.3 percent market basket 
update. It also reflects the 0.5 percentage point difference between 
the projected outlier payments in FY 2008 (5.1 percent of total DRG 
payments) and the current estimate of the percentage of actual 
outlier payments in FY 2007 (4.6 percent), as described in the 
introduction to this Appendix and the Addendum to this final rule 
with comment period. As a result, payments are projected to be 0.5 
percentage points lower in FY 2007 than originally estimated, 
resulting in a 0.5 percentage point greater increase for FY 2008 
than would otherwise occur. In addition, the impact of expiration of 
section 508 of Pub. L. 108-173 reclassification accounts for a 0.1 
percent decrease in estimated payments. As stated earlier, section 
1886(d)(13) of the Act provides for an increase in the wage index 
for hospitals located in certain counties that have a relatively 
high percentage of hospital employees who reside in the county, but 
work in a different area with a higher wage index. This provision of 
the statute is not budget neutral. Although the out-migration 
adjustment will increase payments to some hospitals in FY 2008 
relative to not having an adjustment at all, the total number of 
hospitals receiving the adjustment will be less in FY 2008 than FY 
2007, resulting in a 0.1 percent reduction in total IPPS payments. 
There might also be interactive effects among the various factors 
comprising the payment system that we are not able to isolate. For 
these reasons, the values in Column 12 may not equal the product of 
the percentage changes described above.
    The overall change in payments per case for hospitals in FY 2008 
is estimated to increase by 3.5 percent. Hospitals in urban areas 
will experience an estimated 3.8 percent increase in payments per 
case compared to FY 2007. Hospitals in large urban areas will 
experience an estimated 4.3 percent increase and hospitals in other 
urban areas will experience an estimated 3.2 percent increase in 
payments per case in FY 2008. Hospital payments per case in rural 
areas are estimated to increase 1.2 percent. The increases that are 
larger than the national average for larger urban areas and smaller 
than the national average for other urban and rural areas are 
largely attributed to the differential impact of adopting MS-DRGs.
    Among urban census divisions, the largest estimated payment 
increases will be 5.2 percent in the Pacific region (generally 
attributed to MS-DRGs, wage data and application of the rural floor) 
and 4.2 percent in Puerto Rico (mostly due to MS-DRGs). The smallest 
urban increase is estimated at 3.3 percent in the East South Central 
region (because of MS-DRGs, new wage data, MGCRB reclassification 
and application of the rural floor).
    Among rural regions in Column 12, the providers in the West 
South Central region experience an estimated decrease in payments by 
0.1 percent (mostly due to MS-DRGs). The Pacific and South Atlantic 
regions will have the highest increases among rural regions with 2.5 
and 2.0 percent estimated increases, respectively. Again, increases 
in rural areas are generally less than the national average due to 
the adoption of MS-DRGs.
    Among special categories of rural hospitals in Column 12, the 
SCH providers will receive an estimated increase in payments of 0.2 
percent, and the RRCs will experience an estimated increase in 
payments by 2.7 percent.
    Urban hospitals reclassified for FY 2008 are anticipated to 
receive an increase of 3.6 percent, while urban hospitals that are 
not reclassified for FY 2008 are expected to receive an increase of 
3.9 percent. Rural hospitals reclassifying for FY 2008 are 
anticipated to receive a 1.8 percent payment increase.

N. Effects of Policy on Payment Adjustments for Low-Volume 
Hospitals

    For FY 2008, we are continuing to apply the volume adjustment 
criteria we specified in the FY 2005 IPPS final rule (69 FR 49099). 
We expect that two providers will receive the low-volume adjustment 
for FY 2008. We estimate the impact of these providers receiving the 
additional 25-percent payment increase to be approximately $36,000.

O. Impact Analysis of Table II

    Table II presents the projected impact of the changes for FY 
2008 for urban and rural hospitals and for the different categories 
of hospitals shown in Table I. It compares the estimated payments 
per case for FY 2007 with the average estimated payments per case 
for FY 2008, as calculated under our models. Thus, this table 
presents, in terms of the average dollar amounts paid per discharge, 
the combined effects of the changes presented in Table I. The 
percentage changes shown in the last column of Table II equal

[[Page 48167]]

the percentage changes in average payments from Column 12 of Table 
I.

             Table II.--Impact Analysis of Changes for FY 2008 Operating Prospective Payment System
                                               [Payments per case]
----------------------------------------------------------------------------------------------------------------
                                                                            Average FY   Average FY
                                                               Number of   200 Payment      2008     All FY 2008
                                                               Hospitals     Per Case   Payment Per    Changes
                                                                               \1\        Case \1\
                                                                      (1)          (2)          (3)          (4)
----------------------------------------------------------------------------------------------------------------
All hospitals...............................................         3534       $8,960       $9,278          3.5
By Geographic Location:
    Urban hospitals.........................................         2539       $9,304       $9,663          3.9
    Large urban areas (populations over 1 million)..........         1406       $9,702      $10,122          4.3
    Other urban areas (populations of 1 million or fewer)...         1133       $8,826       $9,110          3.2
    Rural hospitals.........................................          995       $6,993       $7,081          1.2
Bed Size (Urban):
    0-99 beds...............................................          630       $7,148       $7,297          2.1
    100-199 beds............................................          851       $7,882       $8,162          3.6
    200-299 beds............................................          480       $8,777       $9,100          3.7
    300-499 beds............................................          411       $9,722      $10,132          4.2
    500 or more beds........................................          167      $11,695      $12,179          4.1
Bed Size (Rural):
    0-49 beds...............................................          337       $6,049       $6,026         -0.4
    50-99 beds..............................................          372       $6,480       $6,539          0.9
    100-149 beds............................................          173       $6,816       $6,925          1.6
    150-199 beds............................................           68       $7,598       $7,715          1.5
    200 or more beds........................................           45       $8,686       $8,869          2.1
Urban by Region:
    New England.............................................          122       $9,748      $10,098          3.6
    Middle Atlantic.........................................          350      $10,177      $10,533          3.5
    South Atlantic..........................................          390       $8,796       $9,144            4
    East North Central......................................          395       $8,868       $9,193          3.7
    East South Central......................................          166       $8,428       $8,706          3.3
    West North Central......................................          157       $9,016       $9,329          3.5
    West South Central......................................          355       $8,791       $9,128          3.8
    Mountain................................................          153       $9,393       $9,728          3.6
    Pacific.................................................          398      $11,082      $11,657          5.2
    Puerto Rico.............................................           53       $4,364       $4,546          4.2
Rural by Region:
    New England.............................................           23       $9,613       $9,727          1.2
    Middle Atlantic.........................................           72       $7,367       $7,437            1
    South Atlantic..........................................          173       $6,557       $6,688            2
    East North Central......................................          122       $7,418       $7,499          1.1
    East South Central......................................          177       $6,355       $6,463          1.7
    West North Central......................................          115       $7,578       $7,652            1
    West South Central......................................          199       $6,318       $6,313         -0.1
    Mountain................................................           77       $7,536       $7,605          0.9
    Pacific.................................................           37       $8,552       $8,764          2.5
By Payment Classification:
    Urban hospitals.........................................         2578       $9,284       $9,641          3.8
    Large urban areas (populations over 1 million)..........         1425       $9,688      $10,107          4.3
    Other urban areas (populations of 1 million or fewer)...         1153       $8,798       $9,081          3.2
    Rural areas.............................................          956       $7,053       $7,141          1.2
Teaching Status:
    Non-teaching............................................         2480       $7,607       $7,835            3
    Fewer than 100 Residents................................          815       $9,036       $9,369          3.7
    100 or more Residents...................................          239      $12,934      $13,499          4.4
Urban DSH:
    Non-DSH.................................................          859       $8,109       $8,335          2.8
    100 or more beds........................................         1512       $9,778      $10,179          4.1
    Less than 100 beds......................................          355       $6,616       $6,813            3
Rural DSH:
    SCH.....................................................          384       $6,906       $6,932          0.4
    RRC.....................................................          203       $7,574       $7,712          1.8
    100 or more beds........................................           46       $6,013       $6,164          2.5
    Less than 100 beds......................................          175       $5,344       $5,423          1.5
Urban teaching and DSH:
    Both teaching and DSH...................................          807      $10,700      $11,150          4.2
    Teaching and no DSH.....................................          186       $8,821       $9,097          3.1
    No teaching and DSH.....................................         1060       $8,006       $8,309          3.8
    No teaching and no DSH..................................          525       $7,646       $7,867          2.9
Rural Hospital Types:

[[Page 48168]]

 
    RRC.....................................................          194       $7,606       $7,813          2.7
    SCH.....................................................          367       $7,437       $7,455          0.2
    MDH.....................................................          150       $6,489       $6,529          0.6
    SCH and RRC.............................................           99       $8,713       $8,780          0.8
    MDH and RRC.............................................            8       $8,373       $8,383          0.1
Type of Ownership:
    Voluntary...............................................         2064       $9,094       $9,409          3.5
    Proprietary.............................................          823       $8,144       $8,458          3.9
    Government..............................................          597       $9,211       $9,542          3.6
Medicare Utilization as a Percent of Inpatient Days:
    0-25....................................................          230      $12,615      $13,304          5.5
    25-50...................................................         1289      $10,114      $10,545          4.3
    50-65...................................................         1451       $7,880       $8,105          2.9
    Over 65.................................................          440       $7,186       $7,312          1.8
Hospitals Reclassified by the Medicare Geographic
 Classification Reviewboard:
    FY 2008 Reclassifications:
        All Reclassified Hospitals FY 2008..................          757       $8,650       $8,915          3.1
        All Non-Reclassified Hospitals FY 2008..............         2777       $9,055       $9,389          3.7
        Urban Reclassified Hospitals FY 2008:...............          393       $9,286       $9,623          3.6
        Urban Non-reclassified Hospitals FY 2008:...........         2145       $9,308       $9,671          3.9
        Rural Reclassified Hospitals FY 2008:...............          364       $7,491       $7,624          1.8
        Rural Nonreclassified Hospitals FY 2008:............          569       $6,327       $6,340          0.2
        All Section 401 Reclassified Hospitals:.............           29       $8,245       $8,270          0.3
        Other Reclassified Hospitals (Section 1886(d)(8)(B))           63       $6,683       $6,809          1.9
        Former Section 508 Hospitals........................          107       $9,745       $9,795          0.5
    Specialty Hospitals:
        Cardiac Specialty Hospitals.........................           22      $10,707      $10,799          0.9
----------------------------------------------------------------------------------------------------------------
\1\ These payment amounts per case do not reflect any estimates of annual case-mix increase.

VII. Effects of Other Policy Changes

    In addition to those policy changes discussed above that we are 
able to model using our IPPS payment simulation model, we are making 
various other changes in this final rule with comment period. 
Generally, we have limited or no specific data available with which 
to estimate the impacts of these changes. Our estimates of the 
likely impacts associated with these other changes are discussed 
below.

A. Effects of Policy on Hospital-Acquired Conditions, Including 
Infections

    In section II.F. of the preamble of this final rule with comment 
period, we discuss our implementation of section 5001(c) of Pub. L. 
109-171, which requires the Secretary to identify, by October 1, 
2007, at least two conditions that are (a) high cost or high volume 
or both, (2) result in the assignment of a case to a DRG that has a 
higher payment when present as a secondary diagnosis, and (c) could 
reasonably have been prevented through application of evidence-based 
guidelines. For discharges occurring on or after October 1, 2008, 
hospitals will not receive additional payment for cases in which one 
of the selected conditions was not present on admission. That is, 
the case will be paid as though the secondary diagnosis was not 
present. However, the statute also requires the Secretary to 
continue counting the condition as a secondary diagnosis that 
results in a higher IPPS payment when doing the budget neutrality 
calculations for DRG reclassifications and recalibration. Therefore, 
we do our budget neutrality calculations as though the payment 
provision did not apply but Medicare will make a lower payment to 
the hospital for the specific case that includes the secondary 
diagnosis. Thus, the provision will result in cost savings to the 
Medicare program.
    We note that the provision will only apply when the selected 
conditions are the only secondary diagnosis present on the claim 
that will lead to higher payment. Therefore, if a nonselected 
secondary diagnosis that leads to the same higher payment is on the 
claim, the case will continue to be assigned to the higher paying 
DRG and there will be no savings to Medicare from the case. Patients 
will generally have multiple secondary diagnoses during a hospital 
stay. Patients having one MCC or CC will frequently have additional 
conditions that also lead to higher payment. Therefore, in only a 
small percentage of the cases will the patient have only one 
secondary diagnosis that would lead to higher payment. The statute 
does not allow the payment provision to go into effect until October 
1, 2008. For this reason, there will be no saving for FY 2008. Any 
savings associated with this provision will not be realized until FY 
2009. We estimate this provision will save $20 million per year 
beginning October 1, 2008. Our savings estimates for the next 5 
fiscal years are shown below:

------------------------------------------------------------------------
                            Year                               Savings
------------------------------------------------------------------------
FY 2008....................................................           $0
FY 2009....................................................           20
FY 2010....................................................           20
FY 2011....................................................           20
FY 2012....................................................           20
------------------------------------------------------------------------

B. Effects of MS-LTC-DRG Reclassifications and Relative Weights for 
LTCHs

    In section II.I. of the preamble to this final rule with comment 
period, we discuss the adoption of the MS-LTC--DRGs (Version 25. of 
the CMS GROUPER). We also discuss that we are implementing a 2-year 
transition to MS-LTC-DRGs, in which we determined transition blended 
MS-LTC-DRG relative weights for FY 2008. We established in the RY 
2008 LTCH PPS final rule (72 FR 26880 through 26884), beginning with 
the update for FY 2008, that the annual update to the classification 
and relative weights under the LTCH PPS will be done in a budget 
neutral manner, such that estimated aggregate LTCH PPS payments will 
be unaffected; that is, they will be neither greater than nor less 
than the estimated aggregate LTCH PPS payments that would have been 
made without the MS-LTC-DRG classification and relative weight 
changes. However, if the budget neutrality policy had not been 
adopted, we would not have multiplied each MS-LTC-DRG transition 
blended relative weight by 1.020905 in the first step of the budget

[[Page 48169]]

neutrality process (normalization), and we would not have applied a 
budget neutrality factor of 0.996467 to the transition blended 
relative weights after normalization based on the most recent 
available claims data (FY 2006 MedPAR files) for the 376 LTCHs in 
our database. With the adoption of this budget neutrality policy, we 
estimate that with the changes to the MS-LTC-DRG classifications and 
relative weights for FY 2008, there will be no change in aggregate 
LTCH PPS payments. In applying the budget neutrality adjustment 
described above, we assumed constant utilization.

C. Effects of New Technology Add-On Payments

    In section II.J. of the preamble to this final rule, we discuss 
add-on payments for new medical services and technologies. As 
explained in that section, add-on payments for new technology under 
section 1886(d)(5)(K) of the Act are not required to be budget 
neutral. As discussed earlier in this final rule with comment 
period, we are not approving Wingspan[supreg] for new technology 
add-on payments for FY 2008. Thus, we will not make any IPPS add-on 
payments for this technology in FY 2008. In addition, for FY 2008, 
we have discontinued new technology add-on payments for GORE TAG, 
Restore[supreg], and X STOP. In the FY 2007 IPPS final rule (71 FR 
48344), we estimated that FY 2007 IPPS new technology add-on 
payments would be $16.61 million, $6.01 million, and $9.35 million, 
respectively, for these technologies. We have no additional 
information to further refine these estimates. Therefore, we 
estimate that Medicare's new technology add-on payments will decline 
by approximately $32 million (the sum of our estimates for FY 2007) 
in FY 2008 compared to FY 2007.

D. Effects of Requirements for Hospital Reporting of Quality Data 
for Annual Hospital Payment Update

    In section IV.A. of the preamble of this final rule with comment 
period, we discuss the requirements for hospitals to report quality 
data in order for hospitals to receive the full annual hospital 
payment update for FY 2008 and FY 2009. We also note that, for the 
FY 2008 payment update, hospitals must pass our validation 
requirement of a minimum of 80 percent reliability, based upon our 
chart-audit validation process, for the first three quarters of data 
from CY 2006. These data were due to the QIO Clinical Warehouse by 
August 15, 2006 (first quarter CY 2006 discharges), November 15, 
2006 (second quarter CY 2006 discharges), and February 15, 2007 
(third quarter CY 2006 discharges). We have continued our efforts to 
ensure that QIOs provide assistance to all hospitals that wish to 
submit data. In the preamble of this final rule with comment period, 
we are finalizing additional validation criteria to ensure that the 
quality data being sent to CMS are accurate. The requirement of 5 
charts per hospital will result in approximately 21,500 charts per 
quarter total submitted to the agency. We reimburse hospitals for 
the cost of sending charts to the Clinical Data Abstraction Center 
(CDAC) at the rate of 12 cents per page for copying and 
approximately $4.00 per chart for postage. Our experience shows that 
the average chart received at the CDAC is approximately 150 pages. 
Thus, the agency will have expenditures of approximately $473,200 
per quarter to collect the charts. Given that we reimburse for the 
data collection effort, we believe that a requirement for five 
charts per hospital per quarter represents a minimal burden to the 
participating hospital.

E. Effects of Policy on Cancellation of Classification of Acquired 
Rural Status and Rural Referral Centers

    In section IV.C.2. of the preamble of this final rule with 
comment period, we are revising our regulations to change the 
effective date of cancellation of acquired rural status for 
hospitals classified as rural referral centers based on acquired 
rural status. The current effective date is the hospital's next full 
cost reporting period following the date of its request for 
cancellation. The new effective date will be the beginning of the 
Federal fiscal year following both the date of the hospital's 
request for cancellation and at least one 12-month cost reporting 
period in which it has been in acquired rural status. Currently, 
there are about 100 IPPS hospitals that have acquired rural status 
and about 7 hospitals that became rural referral centers based on 
acquired rural status. During this fiscal year (FY 2007), we have 
only received requests for cancellations from about five hospitals, 
all of which became rural referral centers after acquiring rural 
status. However, this number may increase if the current policy is 
not changed. We anticipate that the policy change will not have a 
significant impact on IPPS hospitals.

F. Effects of Policy on Payment for IME and Direct GME

    In section IV.D.3. of the preamble of this final rule with 
comment period, we discuss our policy related to whether vacation 
and sick leave as well as orientation should be included in the FTE 
count for IME and direct GME payment purposes. We had proposed that, 
for cost reporting periods beginning on or after October, 1, 2007, 
for direct GME and IME, time spent by residents on vacation or sick 
leave be removed from the total time considered to constitute an FTE 
resident. In addition, we proposed to continue our existing policy 
to count time spent by residents in orientation activities for both 
IME and direct GME payment purposes and proposed to change our 
policy to begin counting time spent by residents in orientation 
activities in nonhospital settings for purposes of both IME and 
direct GME payments (where the hospital otherwise met the regulatory 
requirements to count time spent by residents in the nonhospital 
setting). However, as explained in section IV.D.3. of the preamble 
of this final rule with comment period, because of concerns related 
to implementation issues raised by the commenters, at this time we 
are not finalizing our proposal to remove vacation and sick leave 
from the total time considered to constitute an FTE resident. 
Therefore, there is no impact for this provision. In addition, there 
is no impact from the clarification of the policy for orientation 
time because it is not a change in policy. We anticipate the 
additional time counted by hospitals for orientation activities in 
nonhospital settings under the revised policy will be negligible and 
will have minimal impact.

G. Effects of Policy Changes Relating to Emergency Services Under 
EMTALA During an Emergency Period

    In section IV.F. of the preamble of this final rule with comment 
period, we are amending the EMTALA regulations regarding EMTALA 
implementation in emergency areas during an emergency period. 
Section 1135 of the Act authorizes the Secretary to temporarily 
waive or modify the application of several requirements and their 
implementing regulations as they relate to actions taken in an 
emergency area during an emergency period. The EMTALA regulations 
(Sec.  489.24(a)(2)) now specify that sanctions for inappropriate 
transfer during a national emergency do not apply to a hospital with 
a dedicated emergency department located in an emergency area.
    To make our regulations better reflect the scope of the 
authority under section 1135 of the Act, we are revising them to 
clarify that such waivers also may apply to sanctions for the 
redirection or relocation of an individual to an alternate location 
to receive a medical screening examination where that direction or 
relocation occurs pursuant to a State emergency preparedness plan. 
We also are revising the regulations to incorporate changes made by 
the Pandemic and All-Hazards Preparedness Act. That legislation 
amended section 1135 of the Act to state that, in the case of a 
public health emergency that involves a pandemic infectious disease, 
sanctions for the direction or relocation of an individual to an 
alternative location for screening may be waived based on either a 
State emergency preparedness plan or a State pandemic preparedness 
plan, whichever applies in the State. In addition, section 1135 of 
the Act was amended to create an exception to the otherwise 
applicable 72-hour limitation on the duration of waivers or 
modifications of sanctions for EMTALA violations in cases where a 
public health emergency involves a pandemic infectious disease (such 
as pandemic influenza).
    As described more fully earlier in this preamble, these changes 
are not discretionary and do not impose any substantive new 
requirements. On the contrary, they merely update our regulations to 
make them consistent with current statutory requirements. Because of 
this, we are estimating no impact on Medicare expenditures and no 
significant impact on hospitals with emergency departments.

H. Effects of Policy on Disclosure of Physician Ownership in 
Hospitals and Patient Safety Measures

    In section IV.G. of the preamble of this final rule with comment 
period, we discuss our adoption of a requirement relating to 
disclosure of physician ownership in hospitals and to increase 
patient safety measures. In the strategic and implementing

[[Page 48170]]

plan included in our ``Final Report to the Congress and Strategic 
and Implementing Plan'' required under section 5006 of the Deficit 
Reduction Act of 2005, we stated that we would adopt a disclosure 
requirement that would require hospitals to disclose to patients 
whether they are physician-owned and, if so, the names of the 
physician-owners. In addition, we recognize that patients should be 
made aware of whether or not a physician is present in the hospital 
at all times, and the hospital's plans to address patients' 
emergency medical conditions when a physician is not present.
    In section IX.B. of the preamble of this final rule with comment 
period, we have revised our proposed estimate of the cost to 
affected hospitals of these disclosures to more accurately reflect 
the volume of disclosures anticipated. Despite these changes, we 
continue to believe this final rule with comment period change will 
impose only minimal additional costs on hospitals. We believe the 
cost of implementing these provisions borne by hospitals will be 
limited to the ongoing cost of providing written notices to 
patients. In addition, the changes concerning disclosure of 
physician ownership in hospitals are consistent with current 
practices of members of the physician-owned specialty hospital 
associations. Therefore, we do not believe that these changes will 
have any significant economic impact on hospitals.

I. Effects of Implementation of Rural Community Hospital 
Demonstration Program

    In section IV.H. of the preamble to this final rule with comment 
period, we discuss our implementation of section 410A of Pub. L. 
108-173 that required the Secretary to establish a demonstration 
that will modify reimbursement for inpatient services for up to 15 
small rural hospitals. Section 410A(c)(2) requires that ``in 
conducting the demonstration program under this section, the 
Secretary shall ensure that the aggregate payments made by the 
Secretary do not exceed the amount which the Secretary would have 
paid if the demonstration program under this section was not 
implemented.'' As discussed in section IV.H. of the preamble to this 
final rule with comment period, we are satisfying this requirement 
by adjusting national IPPS rates by a factor that is sufficient to 
account for the added costs of this demonstration. We estimate that 
the average additional annual payment for FY 2008 that will be made 
to each participating hospital under the demonstration will be 
approximately $1,075,765. We based this estimate on the recent 
historical experience of the difference between inpatient cost and 
payment for hospitals that are participating in the demonstration. 
For the 9 participating hospitals, the total annual impact of the 
demonstration program is estimated to be $9,681,893. The adjustment 
factor to the Federal rate used in calculating Medicare inpatient 
prospective payments as a result of the demonstration is 0.999903.

J. Effects of Policy on Services Furnished to Beneficiaries in 
Custody of Penal Authorities

    In section VII. of the preamble of this final rule with comment 
period, we discuss our revision of our regulations relating to the 
special conditions under which Medicare payment may be made for 
services furnished to individuals in custody of penal authorities. 
We are indicating that, for purposes of Medicare payment, 
individuals who are in custody include, but are not limited to, 
individuals who are under arrest, incarcerated, imprisoned, escaped 
from confinement, under supervised release, on medical furlough, 
required to reside in mental health facilities, required to reside 
in halfway houses, required to live under home detention, or 
confined completely or partially in any way under a penal statute or 
rule. This definition is in accordance with how custody has been 
defined by Federal courts for purposes of the habeas corpus 
protections of the Constitution and is consistent with current CMS 
policy. We anticipate that this change will have no measurable 
impact on Medicare expenditures.

VIII. Impact of Changes in the Capital IPPS

A. General Considerations

    Fiscal year (FY) 2001 was the last year of the 10-year 
transition period established to phase in the PPS for hospital 
capital-related costs. During the transition period, hospitals were 
paid under one of two payment methodologies: fully prospective or 
hold harmless. Under the fully prospective methodology, hospitals 
were paid a blend of the capital Federal rate and their hospital-
specific rate (see Sec.  412.340). Under the hold-harmless 
methodology, unless a hospital elected payment based on 100 percent 
of the capital Federal rate, hospitals were paid 85 percent of 
reasonable costs for old capital costs (100 percent for SCHs) plus 
an amount for new capital costs based on a proportion of the capital 
Federal rate (see Sec.  412.344). As we state in section V. of the 
preamble of this final rule with comment period, with the 10-year 
transition period ending with hospital cost reporting periods 
beginning on or after October 1, 2001 (FY 2002), beginning in FY 
2002 capital prospective payment system payments for most hospitals 
are based solely on the capital Federal rate. Therefore, we no 
longer include information on obligated capital costs or projections 
of old capital costs and new capital costs, which were factors 
needed to calculate payments during the transition period, for our 
impact analysis.
    In accordance with Sec.  412.312, the basic methodology for 
determining a capital PPS payment includes a large urban add-on 
adjustment. However, as discussed above and in section V. of the 
preamble of this final rule with comment period, we are eliminating 
the large urban add-on adjustment to capital IPPS payments in FY 
2008. The basic methodology for calculating capital IPPS payments in 
FY 2008 is as follows: (Standard Federal Rate) x (DRG weight) x 
(GAF) x (COLA for hospitals located in Alaska and Hawaii) x (1 + 
Disproportionate Share Adjustment Factor + IME Adjustment Factor, if 
applicable).
    In addition, hospitals may also receive outlier payments for 
those cases that qualify under the threshold established for each 
fiscal year.
    The data used in developing the impact analysis presented below 
are taken from the March 2007 update of the FY 2006 MedPAR file and 
the March 2007 update of the Provider-Specific File that is used for 
payment purposes. Although the analyses of the changes to the 
capital prospective payment system do not incorporate cost data, we 
used the March 2007 update of the most recently available hospital 
cost report data (FYs 2004 and 2005) to categorize hospitals. Our 
analysis has several qualifications. We use the best data available 
and make assumptions about case-mix and beneficiary enrollment as 
described below. In addition, as discussed in section III. of the 
Addendum to this final rule with comment period, we are adjusting 
the capital rates to account for improvements in documentation and 
coding under the MS-DRGs in FY 2008. Furthermore, due to the 
interdependent nature of the IPPS, it is very difficult to precisely 
quantify the impact associated with each change. In addition, we 
draw upon various sources for the data used to categorize hospitals 
in the tables. In some cases (for instance, the number of beds), 
there is a fair degree of variation in the data from different 
sources. We have attempted to construct these variables with the 
best available sources overall. However, for individual hospitals, 
some miscategorizations are possible.
    Using cases from the March 2007 update of the FY 2006 MedPAR 
file, we simulated payments under the capital PPS for FY 2007 and FY 
2008 for a comparison of total payments per case. Any short-term, 
acute care hospitals not paid under the general IPPS (Indian Health 
Service hospitals and hospitals in Maryland) are excluded from the 
simulations.
    As we explain in section III.A. of the Addendum to this final 
rule with comment period, payments are no longer made under the 
regular exceptions provision under Sec. Sec.  412.348(b) through 
(e). Therefore, we no longer use the actuarial capital cost model 
(described in Appendix B of the August 1, 2001 proposed rule (66 FR 
40099)). We modeled payments for each hospital by multiplying the 
capital Federal rate by the GAF and the hospital's case mix. We then 
added estimated payments for indirect medical education, 
disproportionate share, large urban add-on, and outliers, if 
applicable. (We note that, consistent with the elimination of the 
large urban add-on beginning in FY 2008, discussed in section V.B. 
of the preamble of this final rule with comment period, such 
estimated payments under this policy are only reflected in the 
payments we modeled for FY 2007 and were not included in the 
payments we modeled for FY 2008.) For purposes of this impact 
analysis, the model includes the following assumptions:
    <bullet> We estimate that the Medicare case mix index will 
increase by 1.0 percent in both FYs 2007 and 2008. (We note that 
this does not reflect the adjustment to the capital rates to account 
for assumed growth in case mix due to improvement in documentation 
and coding under the MS-DRGs, as discussed in section III. of the 
Addendum of this final rule with comment period.)
    <bullet> We estimate that the Medicare discharges will be 13.1 
million in FY 2007

[[Page 48171]]

and 13.4 million in FY 2008 for an estimated 2.3 percent increase 
from FY 2007 to FY 2008.
    <bullet> The capital Federal rate was updated beginning in FY 
1996 by an analytical framework that considers changes in the prices 
associated with capital-related costs and adjustments to account for 
forecast error, changes in the case-mix index, allowable changes in 
intensity, and other factors. As discussed in section V. of the 
preamble and section III.A. of the Addendum to this final rule with 
comment period, the FY 2008 update for all hospitals is 0.9 percent.
    <bullet> In addition to the FY 2008 update factors, the FY 2008 
capital Federal rate for both urban and rural hospitals was 
calculated based on a GAF/DRG budget neutrality factor of 0.9997, an 
outlier adjustment factor of 0.9517, and an exceptions adjustment 
factor of 0.9997.
    <bullet> For FY 2008, as discussed in section V. of the preamble 
and section III.A. of the Addendum to this final rule with comment 
period, the FY 2008 capital rates for all hospitals was further 
adjusted by a factor of 0.988 (or 1.2 percent) to maintain budget 
neutrality for the implementation of the MS-DRGs by eliminating the 
effect of changes in coding or classification of discharges that do 
not reflect real case-mix changes.

B. Results

    We used the actuarial model described above to estimate the 
potential impact of our changes for FY 2008 on total capital 
payments per case, using a universe of 3,534 hospitals. As described 
above, the individual hospital payment parameters are taken from the 
best available data, including the March 2007 update of the FY 2006 
MedPAR file, the March 2007 update to the PSF, and the most recent 
cost report data from the March 2007 update of HCRIS. In Table III, 
we present a comparison of total payments per case for FY 2007 
compared to FY 2008 based on the FY 2008 payment policies. Column 2 
shows estimates of payments per case under our model for FY 2007. 
Column 3 shows estimates of payments per case under our model for FY 
2008. Column 4 shows the total percentage change in payments from FY 
2007 to FY 2008. The change represented in Column 4 includes the 0.9 
percent update to the capital Federal rate for all hospitals, a 1.0 
percent increase in case mix, changes in the adjustments to the 
capital Federal rate (for example, the effect of the hospital wage 
index on the GAF), reclassifications by the MGCRB, and the 
additional 1.2 percent reduction to all of the rates to account for 
improvements in documentation and coding or other changes in coding 
that do not reflect real changes in case mix for implementation of 
the MS-DRGs. The comparisons are provided by: (1) Geographic 
location; (2) region; and (3) payment classification.
    The simulation results show that, on average, capital payments 
per case can be expected to increase 0.6 percent in FY 2008. In 
addition to the 0.9 percent update to the capital Federal rate, this 
projected increase in capital payments per case can be attributed to 
the implementation of the MS-DRGs, including the transition relative 
weights, as discussed in sections II.B. through E. of the preamble 
of this final rule with comment period.
    The results of our comparisons by geographic location and by 
region are consistent with the results we expected after eliminating 
the large urban add-on adjustment. The geographic comparison shows 
that all urban hospitals are expected to experience a 0.6 percent 
increase in capital IPPS payments per case, while large urban areas 
are expected to experience no change in capital IPPS payments per 
case. Capital IPPS payments per case for rural hospitals are 
expected to increase 0.3 percent. The difference is mostly due to 
the MS-DRGs. Specifically, based on existing hospital claims data, 
under the MS-DRGs, the better recognition of severity of illness is 
expected to increase payments to urban hospitals that treat a more 
acutely ill mix of patients. Similarly, however, the improved 
recognition of severity of illness will decrease payments to rural 
hospitals because they are treating less severely ill patients. 
Therefore, we project a lower increase in estimated payments for 
rural hospitals due to the DRG changes as compared to urban 
hospitals. In addition to the effect of the DRG changes, the capital 
impact is also somewhat affected by the wage-index changes because 
the GAF values are derived from the wage index. Furthermore, the 
outlier threshold also affects payments. Because the FY 2008 outlier 
threshold is lower than the FY 2007 outlier threshold, payments will 
increase, further explaining why, after eliminating the large urban 
add-on adjustment of 3.0 percent, we estimate no change in payments 
from FY 2007 to FY 2008 for large urban hospitals. For rural 
hospitals, another factor contributing to the smaller increase in 
payments for rural hospitals is the expiration of the 3-year hold 
harmless provision for urban hospitals that were converted to rural 
under the CBSAs in FY 2005. The policy allowed urban hospitals under 
the old labor market area designations that became rural under the 
CBSAs to receive payment using the wage index of the MSA where they 
were previously classified as urban for 3 years: FY 2005 through FY 
2007. Beginning in FY 2008, these rural hospitals will receive the 
wage index for the area that they are currently located in. As a 
result, rural hospitals will experience a smaller increase in 
payments than urban hospitals because of the addition of these 
formerly urban hospitals.
    More than half of all regions are estimated to experience an 
increase in total capital payments per case from FY 2007 to FY 2008. 
These increases vary by region and range from a 2.4 percent increase 
in the Pacific rural region to a 0.3 percent increase in the East 
North Central urban region, the Middle Atlantic rural region, and 
Puerto Rico. Two urban regions are projected to experience a 
decrease in capital payments with the difference mostly due to 
changes in the GAF and the elimination of the large urban add on 
adjustment: -0.6 percent in the Middle Atlantic urban region and -
0.2 percent in the New England urban region. In the rural regions 
experiencing a decrease in total capital payments per case, the 
range is from a 0.8 percent decrease in the West South Central rural 
region to a 0.1 percent decrease in the East North Central rural 
region. For most of the rural regions projected to experience a 
decrease in capital payments, it is mostly due to changes in the 
GAF, as well as changes due to the adoption of the MS-DRGs. The 
change in payments per case for all hospitals is 0.6 percent.
    By type of ownership, voluntary hospitals are estimated to 
experience an increase of 0.3 percent in capital payments per case, 
while both proprietary and government hospitals are estimated to 
experience a 1.2 percent increases in payments. Voluntary hospitals 
are projected to have a slightly smaller increase in capital 
payments than government and proprietary hospitals, mostly due to 
the elimination of the large urban add-on adjustment and changes in 
the GAF.
    Section 1886(d)(10) of the Act established the MGCRB. Before FY 
2005, hospitals could apply to the MGCRB for reclassification for 
purposes of the standardized amount, wage index, or both. Section 
401(c) of Pub. L. 108-173 equalized the standardized amounts under 
the operating IPPS. Therefore, beginning in FY 2005, there is no 
longer reclassification for the purposes of the standardized 
amounts; however, hospitals still may apply for reclassification for 
purposes of the wage index for FY 2008. Reclassification for wage 
index purposes also affects the GAF because that factor is 
constructed from the hospital wage index.
    To present the effects of the hospitals being reclassified for 
FY 2008, we show the average payments per case for reclassified 
hospitals for FY 2007. Rural nonreclassified hospitals are expected 
to have the largest decrease in payments of 0.4 percent, as compared 
to the 0.1 percent decrease for the other reclassified hospitals for 
FY 2008. This difference is mostly due to changes in the GAF. All 
urban nonreclassified hospitals and all rural reclassified hospitals 
are expected to experience an increase in payments of 0.7 percent, 
while all urban reclassified hospitals are expected to experience a 
0.5 percent increase in capital payments per case. This difference 
is mostly due to the elimination of the large urban add-on as well 
as changes in the GAF.

[[Page 48172]]



                                Table III.--Comparison of Total Payments per Case
                                 [FY 2007 Payments Compared To FY 2008 Payments]
----------------------------------------------------------------------------------------------------------------
                                                                            Average FY   Average FY
                                                               Number of       2007         2008
                                                               hospitals    payments/    payments/      Change
                                                                               case         case
----------------------------------------------------------------------------------------------------------------
By Geographic Location:
    All hospitals...........................................        3,534          748          752          0.6
    Large urban areas (populations over 1 million)..........        1,406          830          829          0.0
    Other urban areas (populations of 1 million of fewer)...        1,133          737          748          1.5
    Rural areas.............................................          995          520          521          0.3
    Urban hospitals.........................................        2,539          788          793          0.6
        0-99 beds...........................................          630          619          621          0.4
        100-199 beds........................................          851          674          678          0.6
        200-299 beds........................................          480          744          748          0.5
        300-499 beds........................................          411          818          824          0.8
        500 or more beds....................................          167          983          990          0.6
    Rural hospitals.........................................          995          520          521          0.3
        0-49 beds...........................................          337          425          423         -0.5
        50-99 beds..........................................          372          477          478          0.1
        100-149 beds........................................          173          517          519          0.5
        150-199 beds........................................           68          575          575          0.1
        200 or more beds....................................           45          649          654          0.7
By Region:
    Urban by Region.........................................        2,539          788          793          0.6
        New England.........................................          122          838          837         -0.2
        Middle Atlantic.....................................          350          862          857         -0.6
        South Atlantic......................................          390          747          755          1.1
        East North Central..................................          395          773          775          0.3
        East South Central..................................          166          711          714          0.4
        West North Central..................................          157          771          774          0.5
        West South Central..................................          355          737          744          1.0
        Mountain............................................          153          788          800          1.5
        Pacific.............................................          398          899          916          1.9
        Puerto Rico.........................................           53          345          346          0.3
    Rural by Region.........................................          995          520          521          0.3
        New England.........................................           23          711          709         -0.3
        Middle Atlantic.....................................           72          529          531          0.3
        South Atlantic......................................          173          502          507          0.9
        East North Central..................................          122          550          549         -0.1
        East South Central..................................          177          481          480         -0.2
        West North Central..................................          115          549          552          0.5
        West South Central..................................          199          473          469         -0.8
        Mountain............................................           77          520          528          1.6
        Pacific.............................................           37          627          642          2.4
By Payment Classification:
    All hospitals...........................................        3,534          748          752          0.6
    Large urban areas (populations over 1 million)..........        1,425          828          828          0.0
    Other urban areas (populations of 1 million of fewer)...        1,153          736          747          1.5
    Rural areas.............................................          956          520          522          0.2
    Teaching Status:
        Non-teaching........................................        2,480          632          636          0.7
        Fewer than 100 Residents............................          815          761          764          0.4
        100 or more Residents...............................          239        1,076        1,083          0.6
        Urban DSH:
            100 or more beds................................        1,512          812          820          0.9
            Less than 100 beds..............................          355          552          554          0.4
        Rural DSH:
            Sole Community (SCH/EACH).......................          384          465          467          0.3
            Referral Center (RRC/EACH)......................          203          573          576          0.5
            Other Rural:
                100 or more beds............................           46          485          487          0.4
                Less than 100 beds..........................          175          431          430         -0.4
    Urban teaching and DSH:
        Both teaching and DSH...............................          807          888          895          0.7
        Teaching and no DSH.................................          186          798          792         -0.7
        No teaching and DSH.................................        1,060          667          675          1.1
        No teaching and no DSH..............................          525          697          699          0.3
    Rural Hospital Types:
        Non special status hospitals........................        2,452          791          796          0.6
        RRC/EACH............................................           53          698          707          1.3
        SCH/EACH............................................           42          641          643          0.3
        Medicare-dependent hospitals (MDH)..................           16          446          440         -1.3
        SCH, RRC and EACH...................................           15          746          764          2.3
Hospitals Reclassified by the Medicare Geographic
 Classification Review Board:

[[Page 48173]]

 
    FY 2008 Reclassifications:
        All Urban Reclassified..............................          393          786          790          0.5
        All Urban Non-Reclassified..........................        2,145          788          793          0.7
        All Rural Reclassified..............................          364          564          568          0.7
        All Rural Non-Reclassified..........................          569          455          453         -0.4
        Other Reclassified Hospitals (Section 1886(d)(8)(B))           63          516          515         -0.1
    Type of Ownership:
        Voluntary...........................................        2,064          765          768          0.3
        Proprietary.........................................          823          681          689          1.2
        Government..........................................          597          732          741          1.2
    Medicare Utilization as a Percent of Inpatient Days:
        0-25................................................          230          979          991          1.3
        25-50...............................................        1,289          845          851          0.8
        50-65...............................................        1,451          664          667          0.4
        Over 65.............................................          440          597          595         -0.3
----------------------------------------------------------------------------------------------------------------

IX. Alternatives Considered

    This final rule with comment period contains a range of 
policies. The preamble of this final rule with comment period 
provides descriptions of the statutory provisions that are 
addressed, identifies those policies when discretion has been 
exercised, presents rationale for our decisions and, where relevant, 
alternatives that were considered.

X. Overall Conclusion

    The changes we are making in this final rule with comment period 
will affect all classes of hospitals. Some hospitals are expected to 
experience significant gains and others less significant gains, but 
overall hospitals are projected to experience positive updates in 
IPPS payments in FY 2008. Table I of section VI. of this Appendix 
demonstrates the estimated distributional impact of the IPPS budget 
neutrality requirements for DRG and wage index changes, and for the 
wage index reclassifications under the MGCRB. Table I also shows an 
overall increase of 3.5 percent in operating payments, an estimated 
increase of $3.56 billion, which includes hospital reporting of 
quality data program costs ($1.89 million) and all operating payment 
policies as described in section VI. of this Appendix. Capital 
payments are estimated to increase by 0.6 percent per case, as shown 
in Table III of section VIII. of this Appendix. Therefore, we 
project that capital payments will increase by $282 million in FY 
2008 compared to FY 2007. The operating and capital payments should 
result in a net increase of $3.837 billion to IPPS providers. The 
discussions presented in the previous pages, in combination with the 
rest of this final rule with comment period, constitute a regulatory 
impact analysis.

XI. Accounting Statement

    As required by OMB Circular A-4 (available at http://www.whitehousegov/omb/circulars/a004/a-4.pdf), in Table IV below, we 
have prepared an accounting statement showing the classification of 
the expenditures associated with the provisions of this final rule 
with comment period. This table provides our best estimate of the 
increase in Medicare payments to providers as a result of the 
changes to the IPPS presented in this final rule with comment 
period. All expenditures are classified as transfers to Medicare 
providers.

      Table IV.--Accounting Statement: Classification of Estimated
                  Expenditures from FY 2007 to FY 2008
------------------------------------------------------------------------
                 Category                             Transfers
------------------------------------------------------------------------
Annualized Monetized Transfers............  $3.837 Billion.
From Whom to Whom.........................  Federal Government to IPPS
                                             Medicare Providers.
Total.....................................  $3.837 Billion.
------------------------------------------------------------------------

XII. Executive Order 12866

    In accordance with the provisions of Executive Order 12866, the 
Office of Management and Budget reviewed this final rule with 
comment period.

Appendix B: Recommendation of Update Factors for Operating Cost Rates 
of Payment for Inpatient Hospital Services

I. Background

    Section 1886(e)(4)(A) of the Act requires that the Secretary, 
taking into consideration the recommendations of the MedPAC, 
recommend update factors for inpatient hospital services for each 
fiscal year that take into account the amounts necessary for the 
efficient and effective delivery of medically appropriate and 
necessary care of high quality. Under section 1886(e)(5)(B) of the 
Act, we are required to publish update factors recommended by the 
Secretary in the proposed and final IPPS rules, respectively. 
Accordingly, we are publishing our final recommendations for the 
update factors for the IPPS standardized amount, the hospital-
specific rates for SCHs and MDHs, and the rate-of-increase limits 
for hospitals and hospital units excluded from the IPPS, as well as 
LTCHS, IPFs, and IRFs. We also discuss our response to MedPAC's 
recommended update factors for inpatient hospital services.

II. Inpatient Hospital Update for FY 2008

    Section 1886(b)(3)(B)(i)(XX) of the Act, as amended by section 
5001(a) of Pub. L. 109-171, sets the FY 2008 percentage increase in 
the operating cost standardized amount equal to the rate-of-increase 
in the hospital market basket for IPPS hospitals in all areas, 
subject to the hospital submitting quality information under rules 
established by the Secretary in accordance with 1886(b)(3)(B)(viii) 
of the Act. For hospitals that do not provide these data, the update 
is equal to the market basket percentage increase less 2.0 
percentage points. Consistent with current law, based on Global 
Insight, Inc.'s second quarter 2007 forecast of the FY 2008 market 
basket increase, the FY 2008 update to the standardized amount will 
be 3.3 percent (that is, the current estimate of the market basket 
rate-of-increase) for hospitals in all areas, provided the hospital 
submits quality data in accordance with our rules. For hospitals 
that do not submit quality data, the update to the standardized 
amount will be 1.3 percent (that is, the current estimate of the 
market basket rate-of-increase minus 2.0 percentage points).
    Section 1886(b)(3)(B)(iv) of the Act sets the FY 2008 percentage 
increase in the hospital-specific rates applicable to SCHs and MDHs 
equal to the rate set forth in section 1886(b)(3)(B)(i) of the Act 
(that is, the same update factor as for all other hospitals subject 
to the IPPS). Therefore, the update to the hospital-specific rates 
applicable to SCHs and MDHs will be 3.3 or 1.3 percent depending 
upon whether the hospital submits quality data.
    Section 1886(b)(3)(B)(ii) of the Act is used for purposes of 
determining the percentage increase in the rate-of-increase limits 
for children's and cancer hospitals. Section 1886(b)(3)(B)(ii) of 
the Act sets the percentage increase in the rate-of-increase limits 
equal to the market basket percentage

[[Page 48174]]

increase. In accordance with Sec.  403.752(a) of the regulations, 
RNHCIs are paid under Sec.  413.40, which also uses section 
1886(b)(3)(B)(ii) of the Act to update the percentage increase in 
the rate-of-increase limits. Section 1886(j)(3)(C) of the Act 
addresses the increase factor for the Federal prospective payment 
rate of IRFs. Section 123 of Pub. L. 106-113, as amended by section 
307(b) of Pub. L. 106-554, provides the statutory authority for 
updating payment rates under the LTCH PPS. As discussed below, for 
cost reporting periods beginning on or after October 1, 2006, LTCHs 
that are not defined as new under Sec.  412.23(e)(4), and that had 
not elected to be paid under 100 percent of the Federal rate are 
paid 100 percent of the adjusted Federal PPS rate. Therefore, 
because no portion of LTCHs' prospective payments will be based on 
reasonable cost concepts for cost reporting periods beginning on or 
after October 1, 2006, we are not establishing a rate-of-increase 
percentage for FY 2008 for LTCHs to be used under Sec.  413.40. In 
addition, section 124 of Pub. L. 106-113 provides the statutory 
authority for updating all aspects of the payment rates for IPFs. 
Under this broad authority, IPFs that are not defined as new under 
Sec.  412.426(c) will be paid under a blend methodology for cost 
reporting periods beginning on or after January 1, 2005, and before 
January 1, 2008. The methodology blends the estimated Federal per 
diem payment amount and a facility-specific payment amount. The 
portion of the IPF PPS payment that is based on reasonable cost 
principles is updated in accordance with 42 CFR Part 413, which uses 
section 1886(b)(3)(B)(ii) of the Act to determine the percentage 
increase in the rate-of-increase limits. For the reasonable cost-
based portion of an IPF's PPS blended payments, we are providing our 
current estimate of the excluded hospital market basket increase 
(3.3 percent) to update the target amounts. New IPFs are paid based 
on 100 percent of the Federal per diem payment amount.
    Currently, children's hospitals, cancer hospitals, and RNHCIs 
are the remaining three types of hospitals still reimbursed under 
the reasonable cost methodology. We are providing our current 
estimate of the FY 2008 IPPS operating market basket percentage 
increase (3.3 percent) to update the target limits for children's 
hospitals, cancer hospitals, and RNHCIs.
    Effective for cost reporting periods beginning on or after 
October 1, 2002, LTCHs have been paid under the LTCH PPS, which was 
implemented with a 5-year transition period for LTCHs not defined as 
new under Sec.  412.23(e)(4) (hereafter referred to as 
``existing''). (See 67 FR 55954.) An existing LTCH could have 
elected to be paid at 100 percent of the adjusted Federal 
prospective rate at the start of any of its cost reporting periods 
during the transition period. During this transition period, if an 
existing LTCH did not elect to be paid at 100 percent of the 
adjusted Federal prospective payment rate, it received a PPS payment 
that consisted of a blend of its reasonable cost-based payment and 
the Federal prospective payment rate. For cost reporting periods 
beginning on or after October 1, 2006, no portion of a LTCH's PPS 
payments can be based on reasonable cost concepts. Consequently, 
there is no need to update the target limit under Sec.  413.40 
effective October 1, 2007, for LTCHs.
    In the RY 2008 LTCH PPS final rule (72 FR 26887 through 26890), 
we finalized an update of 0.71 percent (that is, the latest estimate 
of the market basket rate-of-increase of 3.2 percent minus an 
adjustment factor of 2.49 percentage points for case-mix growth due 
to improved coding) to the LTCH PPS Federal rate for RY 2008.
    Effective for cost reporting periods beginning on or after 
January 1, 2005, IPFs are paid under the IPF PPS. IPF PPS payments 
are based on a Federal per diem rate that is derived from the sum of 
the average routine operating, ancillary, and capital costs for each 
patient day of psychiatric care in an IPF, adjusted for budget 
neutrality. For cost reporting periods beginning on or after January 
1, 2005, and before January 1, 2008, existing IPFs (those not 
defined as ``new'' under Sec.  412.426(c)) are paid based on a blend 
of the reasonable cost based PPS payments and the Federal per diem 
base rate. For cost reporting periods beginning on or after January 
1, 2008, existing IPFs will be paid based on 100 percent of the 
Federal per diem rate. For purposes of the update factor for FY 
2008, the portion of the IPF PPS transitional blend payment based on 
reasonable costs will be determined by updating the IPF's TEFRA 
limit by the current estimate of the excluded hospital market 
basket, which is estimated to be 3.3 percent. The update factor of 
3.2 percent to the Federal per diem rate for July 1, 2007 through 
June 30, 2008, based on Global Insight, Inc.'s first quarter 2007 
forecast of the RPL market basket increase, was provided in the rate 
year (RY) 2008 IPF PPS update notice (72 FR 25608).
    IRFs are paid under the IRF PPS for cost reporting periods 
beginning on or after January 1, 2002. For cost reporting periods 
beginning on or after October 1, 2002 (FY 2003), and thereafter, the 
Federal prospective payments to IRFs are based on 100 percent of the 
adjusted Federal IRF prospective payment amount, updated annually 
(69 FR 45721). Under section 1886(j)(3)(C) of the Act, the FY 2008 
IRF PPS update will equal 3.2 percent based on Global Insight, 
Inc.'s second quarter 2007 forecast of the RPL market basket 
increase with historical data through the first quarter of 2007.

III. Secretary's Final Recommendation

    MedPAC is recommending an inpatient hospital update equal to the 
market basket rate of increase for FY 2008. MedPAC's rationale for 
this update recommendation is described in more detail below. Using 
the 2007 second quarter forecast from Global Insight, Inc. of the FY 
2008 market basket increase and an adjustment factor based on the FY 
2008 President's Budget, we are recommending an update to the 
standardized amount of 2.65 percent (that is, the market basket 
rate-of-increase of 3.3 percent minus an adjustment factor of 0.65 
percentage points). We are recommending that this same update factor 
apply to SCHs and MDHs.Our rationale for this recommended update is 
described below.
    In addition to making a recommendation for IPPS hospitals, in 
accordance with section 1886(e)(4)(A) of the Act, we are also 
recommending update factors for all other types of hospitals. 
Consistent with the President's Budget, we are recommending an 
update based on the IPPS market basket increase for children's 
hospitals, cancer hospitals, and RNHCIs of 3.3 percent, based on 
Global Insight, Inc.'s 2007 second quarter forecast of the IPPS 
operating market basket increase. For IPFs that are currently paid 
on a PPS blended payment basis, a portion of which is based on 
reasonable cost-principles and Federal prospective payment amounts, 
we are recommending an update factor of 3.3 percent for the portion 
of the payment that is based on reasonable costs. Consistent with 
the President's Budget, based on Global Insight, Inc.'s first 
quarter 2007 forecast of the RPL market basket increase, we are 
recommending an update equal to the market basket increase of 3.2 
percent for the Federal per diem payment amount.
    In the RY 2008 LTCH PPS final rule (72 FR 26887 through 26890), 
we implemented, and in this final rule with comment period 
recommend, an update of 0.71 percent (that is, the most recent 
estimate of the market basket rate-of-increase of 3.2 percent minus 
an adjustment factor of 2.49 percentage points for case-mix growth 
due to improved coding) to the Federal rate for RY 2008. Finally, 
consistent with the President's FY 2008 Budget, we are recommending 
that the Federal rate to the IRF PPS remain unchanged for FY 2008.
    For fiscal years prior to FY 2008, section 1886(e)(3) of the Act 
directed the Secretary to report to the Congress an initial estimate 
of his recommendation of an appropriate payment inflation update for 
inpatient hospital services for the upcoming fiscal year not later 
than March 1. Section 1886(d)(4)(C) of the Act further required the 
Secretary to include recommendations with respect to adjustments to 
the DRG weighting factors in the March 1 Report to Congress. In 
addition, sections 1886(e)(4)(A) and (e)(5)(B) of the Act require 
that the Secretary recommend update factors in each of the IPPS 
proposed and final rules, taking into account MedPAC's 
recommendation. Thus, the statute required the Secretary to make 
update recommendations in both a March 1 Report to Congress, and 
later in the IPPS proposed and final rules. Historically, the only 
difference between the recommendation we provided in the March 1 
Report to Congress and the IPPS proposed rule was the use of a later 
estimate of the market basket increase for the proposed rule. 
Section 106(c) of MIEA-TRHCA eliminated the requirement to make the 
Report to Congress recommending an update and adjustments to DRG 
weighting factors by March 1. In accordance with section 106(c) of 
MIEA-TRHCA, we are making the Secretary's only recommendation for an 
update factor in the IPPS rules.

IV. MedPAC Recommendation for Assessing Payment Adequacy and Updating 
Payments in Traditional Medicare

    In its March 2007 Report to Congress, MedPAC assessed the 
adequacy of current payments and costs, and the relationship

[[Page 48175]]

between payments and an appropriate cost base, utilizing an 
established methodology used by MedPAC in the past several years.
    MedPAC recommended an update to the hospital inpatient rates 
equal to the increase in the hospital market basket in FY 2008, 
concurrent with implementation of a quality incentive payment 
program. MedPAC also recommended that CMS put pressure on hospitals 
to control their costs rather than accommodate the current rate of 
cost growth.
    MedPAC noted that, notwithstanding negative overall Medicare 
margins, most of the indicators of Medicare payment adequacy to 
hospitals are positive, including beneficiaries' access to care, 
increased access to capital, and service volume increases. MedPAC 
also noted that this recommendation ``should have no impact on 
beneficiary access to care and is not expected to affect providers' 
willingness and ability to provide care to Medicare beneficiaries.''
    Response: We agree with MedPAC that hospitals should control 
costs rather than accommodate the current rate of growth. An update 
equal to less than the market basket will pressure hospitals to 
control their costs, consistent with MedPAC's recommendation. As 
MedPAC noted, rising hospital costs are resulting in margins for 
some hospitals that are below zero. As discussed in section II. of 
the preamble of this final rule with comment period, CMS is refining 
the DRGs to better account for severity illness and is basing the 
DRG weights on cost rather than charges. We believe that these 
refinements will better match Medicare payments to the cost of care 
and provide incentives for hospitals to be more efficient in 
controlling costs. For these reasons, we are recommending an 
inpatient hospital update equal to the market basket increase minus 
an adjustment factor of 0.65 percentage points for hospitals paid 
under the IPPS for FY 2008.
    We note that, because the operating and capital prospective 
payment systems remain separate, we are continuing to use separate 
updates for operating and capital payments. The update to the 
capital payment rate is discussed in section III. of the Addendum to 
this final rule with comment period.

[FR Doc. 07-3820 Filed 8-1-07; 4:00 pm]
BILLING CODE 4120-01-P


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