28644 Federal Register / Vol. 71, No. 95 / Wednesday, May 17, 2006 / Proposed Rules 

supply, distribution, or use of energy. 

Further, we have concluded that the 

proposed amendments are not likely to 

have any adverse energy effects. 

I. National Technology Transfer and 

Advancement Act 

Section 12(d) of the National 

Technology Transfer and Advancement 

Act (NTTAA) of 1995 (Pub. L. 104–113), 

12(d) (15 U.S.C. 272 note) directs EPA 

to use voluntary consensus standards 

(VCS) in its regulatory activities unless 

to do so would be inconsistent with 

applicable law or otherwise impractical. 

VCS are technical standards (e.g., 

materials specifications, test methods, 

sampling procedures, and business 

practices) that are developed or adopted 

by VCS bodies. The NTTAA directs EPA 

to provide Congress, through OMB, 

explanations when the Agency decides 

not to use available and applicable VCS. 

During the rulemaking, EPA 

conducted searches to identify VCS in 

addition to EPA test methods referenced 

by the final rule. The search and review 

results have been documented and 

placed in the docket for the NESHAP 

(Docket ID No. EPA–HQ–OAR–2003–

0178). The proposed amendments do 

not propose the use of any additional 

technical standards beyond those cited 

in the final rule. Therefore, EPA is not 

considering the use of any additional 

VCS for the proposed amendments. 

List of Subjects in 40 CFR Part 63 

Environmental protection, 

Administrative practice and procedure, 

Air pollution control, Hazardous 

substances, Intergovernmental relations, 

Reporting and recordkeeping 

requirements. 

Dated: May 11, 2006. 

Stephen L. Johnson, 

Administrator. 

For the reasons stated in the 

preamble, title 40, chapter I, part 63 of 

the Code of the Federal Regulations is 

proposed to be amended as follows: 

PART 63—[AMENDED] 

1. The authority citation for part 63 

continues to read as follows: 

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

Subpart HHHHH—[Amended] 

2. Section 63.7885 is amended by 

revising paragraph (d) introductory text 

and by adding paragraph (d)(5) to read 

as follows: 

§ 63.7985 Am I subject to the requirements 

in this subpart? 

* * * * * 

(d) The requirements for 

miscellaneous coating manufacturing 

sources in this subpart do not apply to 

operations described in paragraphs 

(d)(1) through (5) of this section. 

* * * * * 

(5) Modifying a purchased coating in 

preparation for application at the 

purchasing facility. 

* * * * * 

3. Section 63.7995 is amended by 

adding introductory text to read as 

follows: 

§ 63.7995 When do I have to comply with 

this subpart? 

Except as specified in § 63.8090, you 

must comply with this subpart 

according to the requirements of this 

section. 

* * * * * 

4. Section 63.8090 is amended by 

adding paragraph (c) to read as follows: 

§ 63.8090 What compliance options do I 

have if part of my plant is subject to both 

this subpart and another subpart? 

* * * * * 

(c) Compliance with 40 CFR part 63, 

subpart FFFF. 

After the compliance dates specified 

in § 63.7995, an affected source under 

this subpart HHHHH that includes 

equipment that is also part of an 

affected source under 40 CFR part 63, 

subpart FFFF is deemed in compliance 

with this subpart HHHHH if all of the 

conditions specified in paragraphs (c)(1) 

through (5) of this section are met. 

(1) Equipment used for both 

miscellaneous coating manufacturing 

operations and as part of a 

miscellaneous organic chemical 

manufacturing process unit (MCPU), as 

defined in 40 CFR 63.2435, must be part 

of a process unit group developed in 

accordance with the provisions in 40 

CFR 63.2535(l). 

(2) For the purposes of complying 

with § 63.2535(l), a miscellaneous 

coating manufacturing ‘‘process unit’’

consists of all coating manufacturing 

equipment that is also part of an MCPU 

in the process unit group. All 

miscellaneous coating manufacturing 

operations that are not part of a process 

unit group must comply with the 

requirements of this subpart HHHHH. 

(3) The primary product for a process 

unit group that includes miscellaneous 

coating manufacturing equipment must 

be organic chemicals as described in 

§ 63.2435(b)(1). 

(4) The process unit group must be in 

compliance with the requirements in 40 

CFR part 63, subpart FFFF as specified 

in § 63.2535(l)(3)(i) no later than the 

applicable compliance dates specified 

in § 63.2445. 

(5) You must include in the 

notification of compliance status report 

required in § 63.8070(d) the records as 

specified in § 63.2535(l)(1) through (3). 

5. Section 63.8105 is amended by 

revising the definition for a ‘‘Coating’’ in 

paragraph (g) introductory text to read 

as follows: 

§ 63.8105 What definitions apply to this 

subpart? 

* * * * * 

(g) * * * 

Coating means a material such as 

paint, ink, or adhesive that is intended 

to be applied to a substrate and consists 

of a mixture of resins, pigments, 

solvents, and/or other additives, where 

the material is produced by a 

manufacturing operation where 

materials are blended, mixed, diluted, 

or otherwise formulated. Coating does 

not include materials made in processes 

where a formulation component is 

synthesized by chemical reaction or 

separation activity and then transferred 

to another vessel where it is formulated 

to produce a material used as a coating, 

where the synthesized or separated 

component is not stored prior to 

formulation. Typically, coatings include 

products described by the following 

North American Industry Classification 

System (NAICS) codes, code 325510, 

Paint and Coating Manufacturing, code 

325520, Adhesive and Sealant 

Manufacturing, and code 325910, Ink 

Manufacturing. 

* * * * * 

[FR Doc. E6–7495 Filed 5–16–06; 8:45 am] 

BILLING CODE 6560–50–P 

DEPARTMENT OF HEALTH AND 

HUMAN SERVICES 

Centers for Medicare & Medicaid 

Services 

42 CFR Part 412 

[CMS–1488–P2] 

RIN 0938–AO12 

Medicare Program; Hospital Inpatient 

Prospective Payment Systems 

Implementation of the Fiscal Year 2007 

Occupational Mix Adjustment to the 

Wage Index 

AGENCY: Centers for Medicare & 

Medicaid Services (CMS), HHS. 

ACTION: Proposed rule. 

SUMMARY: This proposed rule would 

revise the methodology for calculating 

the occupational mix adjustment 

announced in the Fiscal Year (FY) 2007 

Hospital Inpatient Prospective Payment 

System (IPPS) proposed rule by 

applying the occupational mix 

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Federal Register / Vol. 71, No. 95 / Wednesday, May 17, 2006 / Proposed Rules 28645 

adjustment to 100 percent of the wage 

index using the new occupational mix 

data collected from hospitals. This 

proposed rule also proposes to modify 

hospitals’ procedures for withdrawing 

requests to reclassify for the FY 2007 

wage index and for supplementing the 

FY 2008 reclassification application 

with official data used to develop the 

FY 2007 wage index. In addition, we are 

proposing to replace in full the 

descriptions of the data and 

methodology that would be used in 

calculating the occupational mix 

adjustment discussed in the FY 2007 

IPPS proposed rule. 

DATES: To be assured consideration, 

comments must be received at one of 

the addresses provided below, no later 

than 5 p.m. on June 12, 2006. 

ADDRESSES: In commenting, please refer 

to file code CMS–1488–P2. Because of 

staff and resource limitations, we cannot 

accept comments by facsimile (FAX) 

transmission. 

You may submit comments in one of 

four 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–1488–

P2, P.O. Box 8012, Baltimore, MD 

21244–8012. 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–1488–PN2, Mail Stop C4–26–05, 

7500 Security Boulevard, Baltimore, MD 

21244–8012. 

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–

4492 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 HHH 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 a proof of 

filing by stamping in and retaining an 

extra copy of the comments being filed.) 

Comments mailed to the addresses 

indicated as appropriate for hand or 

courier delivery may be delayed and 

received after the comment period. 

Submission of comments on 

paperwork requirements. You may 

submit comments on this document’s 

paperwork requirements by mailing 

your comments to the addresses 

provided at the end of the ‘‘Collection 

of Information Requirements’’ section in 

this document. 

For information on viewing public 

comments, see the beginning of the 

SUPPLEMENTARY INFORMATION section. 

FOR FURTHER INFORMATION CONTACT: 

Valerie Miller, (410) 786–4535. 

SUPPLEMENTARY INFORMATION: 

Submitting Comments: We welcome 

comments from the public on all issues 

set forth in this rule to assist us in fully 

considering issues and developing 

CMS–1488–P2 and the specific ‘‘issue 

identifier’’ that precedes the section on 

which you choose to comment. 

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 as 

they are received, 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 p.m. To schedule an 

appointment to view public comments, 

phone 1–800–743–3951. 

I. Background 

[If you choose to comment on issues 

in this section, please include the 

caption ‘‘BACKGROUND’’ at the 

beginning of your comments.] 

A. General Background 

On April 25, 2006, we published in 

the Federal Register the FY 2007 IPPS 

proposed rule (71 FR 23996) that set 

forth the proposed changes to the 

Medicare IPPS for operating costs and 

for capital-related costs. In the FY 2007 

IPPS proposed rule, we discussed our 

proposals for calculating the FY 2007 

occupational mix adjustment. We 

proposed to use the same CMS Wage 

Index Occupational Mix Survey and 

Bureau of Labor Statistics (BLS) data 

that we used for the FY 2005 and FY 

2006 wage indices, with a few 

exceptions. We also proposed to use a 

blend of the occupational mix adjusted 

wage index and the unadjusted wage 

index. Specifically, we proposed to 

adjust 10 percent of the FY 2007 wage 

index by a factor reflecting occupational 

mix. We stated that a 10 percent 

adjustment for occupational mix was a 

prudent policy because we were 

proposing to rely on the same survey 

data used in FY 2005 and FY 2006 wage 

indices. 

On April 3, 2006, in Bellevue Hosp. 

Ctr v. Leavitt, the Court of Appeals for 

the Second Circuit (the Court) ordered 

the Centers for Medicare & Medicaid 

Services (CMS) to apply the 

occupational mix adjustment to 100 

percent of the wage index effective for 

FY 2007. The Court ordered CMS to 

‘‘immediately * * * collect data that are 

sufficiently robust to permit full 

application of the occupational mix 

adjustment.’’ The Court also ordered 

that all ‘‘data collection and 

measurement and any other 

preparations necessary for full 

application be completed by September 

30, 2006, at which time the agency is to 

immediately apply the adjustment in 

full.’’ For more information see 

WestLaw 2006 WL 851934 at *13. 

To comply with the Court’s order, on 

April 21, 2006, we issued a JointSignature Memorandum (see JSM–

06412) to all Medicare Fiscal 

Intermediaries (FIs) announcing our 

plans to collect new occupational mix 

data from hospitals. 

B. Legislative History 

Section 1886(d)(3)(E) of the Social 

Security Act (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 

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28646 Federal Register / Vol. 71, No. 95 / Wednesday, May 17, 2006 / Proposed Rules 

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). (See (71 FR 24074) 

for a discussion of the proposed FY 

2007 hospital wage index based on the 

statistical areas, including OMB’s 

revised definitions of Metropolitan 

Areas). 

Beginning October 1, 1993, section 

1886(d)(3)(E) of the Act requires that we 

update the wage index annually. 

Furthermore, the 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 should measure the earnings and 

paid hours of employment by 

occupational category, and must 

exclude the wages and wage-related 

costs incurred in furnishing skilled 

nursing services. The 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. See the 

FY 2007 IPPS proposed rule (71 FR 

24148 through 24149) for a discussion 

of the original proposed adjustment for 

FY 2007. 

As discussed in the FY 2007 IPPS 

proposed rule (71 FR 24082), we also 

take into account the geographic 

reclassification of hospitals in 

accordance with sections 1886(d)(8)(B) 

and section 1886(d)(10) of the Act when 

calculating the wage index. Under 

section 1886(d)(8)(D) of the Act, the 

Secretary is required to adjust the 

standardized amounts to ensure that 

aggregate payments under the IPPS after 

implementation of the provisions of 

sections 1886(d)(8)(B) and section 

1886(d)(8)(C) of the Act and section 

1886(d)(10) of the Act are equal to the 

aggregate prospective payments that 

would have been made absent these 

provisions. See the FY 2007 IPPS 

proposed rule (71 FR 24149) for a 

discussion of the original proposed 

budget neutrality adjustment for FY 

2007. 

C. Revised Proposed Changes to the 

Occupational Mix Adjustment for the 

Proposed FY 2007 Wage Index 

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 (RNs), licensed practical nurses 

(LPNs), 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 Proposed 

Occupational Mix Adjustment 

[If you choose to comment on issues 

in this section, please include the 

caption ‘‘DEVELOPMENT OF DATA 

FOR THE PROPOSED OCCUPATIONAL 

MIX ADJUSTMENT’’ at the beginning of 

your comments.] 

Section 1886(d)(3)(E) of the Act 

requires us to conduct a new survey at 

least once every 3 years. 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 RNs. 

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 RNs 

would result in a more accurate 

occupational mix adjustment. MedPAC 

believed that including all RNs in a 

single category may obscure significant 

wage differences among the 

subcategories of RNs, for example, the 

wages of surgical RNs and floor RNs 

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, since most 

of the occupational mix adjustment is 

correlated with the nursing general 

service category. 

Also, 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)). 

The revised 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 RN category to include functional 

subcategories, and the exclusion of 

average hourly rate data associated with 

advance practice nurses. 

The 2006 survey includes only 2 

general occupational categories: Nursing 

and ‘‘all other occupations.’’ The 

Nursing category has 4 subcategories: 

RNs, LPNs, Aides, Orderlies, 

Attendants, and Medical Assistants. The 

RN subcategory includes 2 functional 

subcategories: Management Personnel 

and Staff Nurses or Clinicians. As 

indicated above, the 2006 survey 

provides for a 6-month data collection 

period, from January 1, 2006 through 

June 30, 2006. However, we are 

allowing 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 must 

begin on or after December 25, 2005, 

and must end before July 9, 2006. 

To comply with the Bellevue Court’s 

order, as discussed above, we propose to 

collect new survey data, instead of using 

the 2003 survey data proposed in the FY 

2007 IPPS proposed rule, to calculate 

the occupational mix adjustment for the 

FY 2007 wage index. Since hospitals are 

currently collecting data for the revised 

2006 survey, we are proposing to use 

the first 3 months of that data (that is, 

from January 1, 2006 through March 31, 

2006) to calculate the FY 2007 

occupational mix adjustment. In order 

to allow sufficient time for hospitals, 

FIs, and CMS to collect, review, and 

correct the new data, and for us to 

perform required analyses and apply the 

new data in calculating the FY 2007 

occupational mix adjustment, it would 

be impossible for us to apply the full 6- 

months of data by October 1, 2006. (See 

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Federal Register / Vol. 71, No. 95 / Wednesday, May 17, 2006 / Proposed Rules 28647 

section II.C.2 below for proposed 

detailed data collection, review, and 

correction process.) 

2. Timeline for the Collection, Review, 

and Correction of the Occupational Mix 

Data 

[If you choose to comment on issues 

in this section, please include the 

caption ‘‘TIMELINE’’ at the beginning of 

your comments.] 

On April 21, 2006, we issued a JointSignature Memorandum (JSM–06412) 

instructing all FIs to immediately alert 

the hospitals they service to the changes 

in the schedule for submitting the 

occupational mix data files. The JointSignature Memorandum is available on 

the CMS Web site at: http:// 

www.cms.hhs.gov/AcuteInpatientPPS. 

Click on ‘‘Wage Index Files’’ and the 

link is titled: 2006 Occupational Mix 

Survey—Interim Data Collection—CMS 

Memo to Fiscal Intermediaries. 

The Joint-Signature Memorandum 

provides hospitals and FIs with the 

revised schedule for the occupational 

mix survey data that would be used in 

the FY 2007 wage index. The schedule 

includes deadlines for—

• Hospitals to submit occupational 

mix data. The deadline is June 1, 2006. 

• FI review of the submitted data. The 

deadline is June 22, 2006. 

• Availability of the submitted data 

on the CMS Web site. The deadline is 

June 29, 2006. 

• Hospitals to submit requests to their 

FIs for corrections to their interim 

occupational mix data. The deadline is 

July 13, 2006. 

• FIs to submit corrected interim 

occupational mix survey data for the 

January 1, 2006 through March 31, 2006 

period. The deadline is July 27, 2006. 

We note that it is critical that 

hospitals provide information according 

to the dates provided in this schedule in 

order to be able to appeal any disputed 

calculations at a later point to the 

Provider Review Reimbursement Board 

(PRRB). The final deadline for the FIs to 

make occupational mix data available to 

CMS is July 27, 2006. These data would 

reflect FI review and the resolution of 

any errors or adjustments between the 

hospitals and FI. Once these data are 

available on the CMS Web site, changes 

to a hospital’s occupational mix data 

would be allowed only in those very 

limited situations involving an error by 

the FI or CMS that the hospital could 

not have known about before its review 

of the final occupational mix data file. 

Specifically, neither the FI nor CMS 

would approve the following types of 

requests: 

• Requests for occupational mix data 

corrections that were submitted too late 

to be included in the data transmitted to 

CMS by FIs on or before July 27, 2006. 

• Requests for correction of errors 

that were not, but could have been, 

identified during the hospital’s review 

of the June 29, 2006 occupational mix 

file. 

Verified corrections to the 

occupational mix received by the FIs 

and CMS (that is, by July 13, 2006) 

would be incorporated into the final 

wage index for FY 2007, to be effective 

October 1, 2006. 

We created the process described 

above to resolve all substantive 

occupational mix correction disputes 

before we finalize the wage and 

occupational mix data for the FY 2007 

payment rates. Accordingly, hospitals 

that do not meet the procedural 

deadlines set forth above would not be 

afforded a later opportunity to submit 

occupational mix data corrections or to 

dispute the FI’s decision with respect to 

requested changes. Specifically, our 

policy is that hospitals that do not meet 

the procedural deadlines set forth above 

would not be permitted to challenge 

later, before the PRRB, 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 also refer the reader 

to the FY 2000 IPPS final rule (64 FR 

41513) for a discussion of the 

parameters for appealing to the PRRB 

for wage index data corrections. 

We believe the occupational mix data 

correction process described above 

provides hospitals with the opportunity 

to bring errors in their occupational mix 

data to the FI’s attention. 

Since hospitals would have access to 

the final occupational mix data by June 

29, 2006, they would have the 

opportunity to detect any data entry or 

tabulation errors made by the FI or CMS 

before the development and publication 

of the final FY 2007 wage index and the 

implementation of the FY 2007 wage 

index on October 1, 2006. We believe 

that if hospitals avail themselves of the 

opportunities afforded to provide and 

make corrections to the occupational 

mix data, the wage index implemented 

on October 1, 2006 should be accurate. 

In the event that errors are identified by 

hospitals and brought to our attention 

after July 13, 2006, we would only make 

mid-year changes to the wage index in 

accordance with § 412.64(k). For a 

detailed discussion see the FY 2007 

IPPS proposed rule (71 FR 24089). 

However, note that a hospital’s deadline 

for making corrections to the proposed 

occupational mix data is July 13, 2006. 

3. Calculation of the Proposed FY 2007 

Occupational Mix Adjustment Factor 

and the Proposed FY 2007 Occupational 

Mix Adjusted Wage Index 

[If you choose to comment on issues 

in this section, please include the 

caption ‘‘CALCULATION OF THE 

PROPOSED FY 2007 OCCUPATIONAL 

MIX ADJUSTMENT’’ at the beginning of 

your comments.] 

We are proposing to use the following 

steps for calculating the proposed FY 

2007 occupational mix adjustment 

factor for the proposed FY 2007 wage 

index: 

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 (RN Management 

Personnel and RN Staff Nurses or 

Clinicians are treated as separate 

nursing subcategories). Repeat this 

computation for each of the 5 nursing 

subcategories: RN Management 

Personnel, RN Staff Nurses or 

Clinicians, LPNs; 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 5 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 

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28648 Federal Register / Vol. 71, No. 95 / Wednesday, May 17, 2006 / Proposed Rules 

average hourly rate (indicating the 

hospital employs a less costly mix of 

nursing employees), the occupational 

mix adjustment factor would be 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 would be 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 the FY 2007 IPPS 

proposed rule (71 FR 24081), 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 hours by the 

hospital’s total hours 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 the FY 2007 IPPS proposed 

rule (71 FR 24080). 

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. 

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. 

Table 1 below is an illustrative 

example of the occupational mix 

adjustment. 

TABLE 1.—EXAMPLE OF OCCUPATIONAL MIX ADJUSTMENT

Step 1 Step 2 Step 3 Step 5 Step 6 In Step 7 

Provider 

percentage 

by subcategory 

National 

average 

hourly 

wages by 

subcategory 

Provideradjusted 

average 

hourly 

wage 

Nationaladjusted 

nursing average 

hourly 

wage 

Nursing 

occupational mix 

adjustment 

factor 

Provider 

percentage 

by total 

Hospital A 

Provider Occupational Mix 

Hours 

Nursing Hours: 

RN Management ........... 202,387.00 .................. 9.84 $50.00 $4.92 

RN Staff ........................ 1,439,742.00 .................. 70.00 30.00 21.00 

LPNs ............................. 67,860.00 .................. 3.30 20.00 0.66 

Nurse Aides .................. 259,177.00 .................. 12.60 13.00 1.64 

Medical Assistants ........ 87,622.00 .................. 4.26 12.00 0.51 

Total Nursing Hours ............. 2,056,788.00 .................. .................. .................. 28.73 $27.00 0.9398 29.15 

All Other Employees Hours 5,000,000.00 .................. .................. .................. step 4 .................. .................. 70.85 

Total Hours ................... 7,056,788.00 

Wage Data from Cost Report: 

Wages (From S–3, 

Parts II and III) .......... $83,312,942.55 

Hours (From S–3, Parts 

II and III) .................... 3,836,299.60 

Hospital A Unadjusted Average Hourly Wage ............. $21.72 

Nursing Occupational Mix 

Wages .............................. $22,821,141 step 7 

All Other Employees 

Unadjusted Occupational 

Mix Wages ........................ $59,030,357 step 7 

Total Occupational Mix 

Wages .............................. $81,851,498 step 8 

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TABLE 1.—EXAMPLE OF OCCUPATIONAL MIX ADJUSTMENT—Continued 

Step 1 Step 2 Step 3 Step 5 Step 6 In Step 7 

Provider 

percentage 

by subcategory 

National 

average 

hourly 

wages by 

subcategory 

Provideradjusted 

average 

hourly 

wage 

Nationaladjusted 

nursing average 

hourly 

wage 

Nursing 

occupational mix 

adjustment 

factor 

Provider 

percentage 

by total 

Hospital A Final Occupational Mix Adj. Avg. Hourly 

Wage ................................ $21.34 step 8 

Hospital B 

Provider Occupational Mix 

Hours: 

Nursing Hours: 

RN Management ........... 70,333.00 .................. 3.01 50.00 1.51 

RN Staff ........................ 1,430,114.00 .................. 61.27 30.00 18.38 

LPNs ............................. 159,795.00 .................. 6.85 20.00 1.37 

Nurse Aides .................. 391,201.00 .................. 16.76 13.00 2.18 

Medical Assistants ........ 282,728.00 .................. 12.11 12.00 1.45 

Total Nursing Hours ............. 2,334,171.00 .................. .................. .................. 24.89 27.00 1.0848 31.83 

All Other Employees Hours 5,000,000.00 .................. .................. .................. step 4 .................. .................. 70.85 

Total Hours ................... 7,334,171.00 

Wage Data from Cost Report 

Wages (From S–3, 

Parts II and III) .......... $25,979,714 

Hours (From S–3, Parts 

II and III) .................... 1,097,585 

Hospital B Unadjusted Average Hourly Wage ............. $23.67 

Nursing Occupational Mix 

Wages .............................. $8,969,717 step 7 

All Other Employees 

Unadjusted Occupational 

Mix Wages ........................ $17,711,418 step 7 

Total Occupational Mix 

Wages .............................. $26,681,135 step 8 

Hospital B Final Occupational Mix Adj. Avg. Hourly 

Wage ................................ $24.31 step 8 

Note: The numbers used in this example are hypothetical. 

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 

2007 wage index. 

For the FY 2005 and FY 2006 final 

wage indices, we used the unadjusted 

wage data for hospitals that did not 

submit occupational mix survey data. 

For calculation purposes, this equates to 

applying the national nursing mix to the 

wage data for these hospitals, because 

hospitals having the same mix as the 

Nation would have an occupational mix 

adjustment factor equaling 1.0000. 

However, an adjustment may not be 

equitable in situations where the 

hospital has a higher or lower than 

average occupational mix than the 

Nation as a whole. If the hospital’s 

occupational mix is higher than the 

average for the nation as a whole, 

hospitals in other areas are 

disadvantaged by the hospital not 

providing occupational mix 

information. If the hospital’s 

occupational mix is lower than the 

average for the Nation as a whole, other 

hospitals in the same geographic area 

would be disadvantaged by the hospital 

not providing the information. 

In the FY 2005 and FY 2006 IPPS 

final rules (69 FR 49035 and 70 FR 

47368), we noted that we would revisit 

this matter with subsequent collections 

of the occupational mix data. For the FY 

2007 wage index, we are proposing to 

use 1 of 4 options for treating the 

occupational mix data for nonresponsive hospitals: (1) Assign the 

hospital an occupational mix 

adjustment factor of 1.0000 as we did 

for FY 2005 and FY 2006; (2) assign the 

hospital the average occupational mix 

adjustment factor for its labor market 

area; (3) assign the hospital the lowest 

occupational mix adjustment factor for 

its labor market area; or (4) assign the 

hospital the average occupational mix 

factor for similar hospitals, based on 

factors such as, geographic location, bed 

size, teaching versus non-teaching status 

and case mix. We are requesting 

comments on these or other alternatives 

for equitably addressing the situation of 

hospitals that are not responsive to the 

occupational mix survey. 

D. Implementation of the Proposed FY 

2007 Occupational Mix Adjusted Wage 

Index 

[If you choose to comment on issues 

in this section, please include the 

caption ‘‘IMPLEMENTATION OF 

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28650 Federal Register / Vol. 71, No. 95 / Wednesday, May 17, 2006 / Proposed Rules 

PROPOSED FY 2007 OCCUPATIONAL 

MIX ADJUSTMENT’’ at the beginning of 

your comments.] 

In the FY 2007 IPPS proposed rule, 

we proposed to adjust 10 percent of the 

FY 2007 wage index by the occupational 

mix adjustment factor. However, to 

comply with the Court’s order, we 

would apply the occupational mix 

adjustment to 100 percent of the FY 

2007 wage index. Therefore, we are 

proposing to calculate the FY 2007 

occupational mix adjustment using the 

first 3 months of the 2006 survey data 

and apply that adjustment to 100 

percent of the FY 2007 wage index. We 

also believe that, with the modifications 

we included in the 2006 survey, 

hospitals’ experience with collecting 

occupational mix survey data, and the 

review and correction process described 

in section C.2 of this preamble, a 100 

percent adjustment is reasonable. 

Since the 2006 survey data is 

currently being collected by hospitals, 

we are unable to estimate how the new 

data would affect the FY 2007 wage 

index. Due to the short time frame for 

implementing the Court’s order, we do 

not expect to be able to provide the 

occupational mix adjusted wage index 

tables, rates, and impacts with the FY 

2007 IPPS final rule. We are proposing 

to post the FY 2007 occupational mix 

adjusted wage index tables and related 

impacts on the CMS Web site shortly 

after we publish the FY 2007 IPPS final 

rule, and in advance of October 1, 2006. 

We believe these procedures would 

comply with section 1886(d)(6) of the 

Act because, by August 1, we would 

describe our data and methods for 

calculating the wage index and IPPS 

rates in the FY 2007 IPPS final rule, but 

the actual rates and wage tables would 

not be issued until a later date. Further, 

we expect to discuss in the IPPS final 

rule that the new occupational mix data 

should have a redistributive effect on 

hospital payments and should not 

increase or decrease total payments, as 

the wage index is budget neutral. Also, 

due to the unusual circumstances 

imposed by the Court’s order, we 

therefore would depart from our normal 

practice of providing the weights and 

factors that would be used in calculating 

the IPPS rates along with the final rule. 

Given the short timeframe for collecting 

and properly allowing for corrections of 

occupational mix data, for FY 2007, 

these weights and factors would be 

published on the CMS Web site after the 

final rule, but in advance of October 1, 

2006. 

E. Impact of the Proposed FY 2007 

Occupational Mix Adjusted Wage Index 

on the Out-migration Adjustment and 

Hospital Reclassifications 

[If you choose to comment on issues 

in this section, please include the 

caption ‘‘OUT-MIGRATION’’ at the 

beginning of your comments.] 

1. FY 2007 Wage Index Adjustment 

Based on Commuting Patterns of 

Hospital Employees 

In accordance with section 505 of 

Public Law 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. The adjustments to 

the wage index are effective for 3 years, 

unless a hospital requests to waive the 

application of the adjustment. A county 

would not lose its status as a qualifying 

county due to wage index changes 

during the 3-year period, and counties 

would receive the same wage index 

increase for those 3 years. Hospitals that 

receive the adjustment to their wage 

index are not eligible for reclassification 

under section 1886(d)(8) of the Act or 

section 1886(d)(10) 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. We employ the 

pre-reclassified wage indices in making 

these calculations. 

In the FY 2007 IPPS proposed rule (71 

FR 24264 through 24272), in the OutMigration Adjustment table, Table 4J, 

we identified hospitals located in 

qualifying counties. Table 4J also lists 

the proposed adjustments calculated for 

qualifying hospitals. Hospitals that 

newly qualified for the adjustment in 

FY 2005 or FY 2006 are eligible to 

receive the same adjustment in FY 2007. 

In the FY 2007 IPPS proposed rule, we 

determined county eligibility based on a 

10 percent occupational mix adjustment 

to the wage index. However, under this 

proposed rule, we would apply the 

occupational mix adjustment to 100 

percent of the FY 2007 wage index. 

Therefore, we must re-evaluate which 

counties are newly eligible for the outmigration adjustment in FY 2007 using 

the 100 percent occupational mix 

adjusted wage index data. We are 

proposing to publish an updated version 

of Table 4J showing eligible hospitals 

and their corresponding wage index 

adjustments on the CMS Web site 

shortly after we publish the IPPS final 

rule, and in advance of October 1, 2006. 

2. Proposed Procedures for Withdrawing 

Reclassifications in FY 2007 

[If you choose to comment on issues 

in this section, please include the 

caption ‘‘WITHDRAWING 

RECLASSIFICATIONS’’ at the beginning 

of your comments.] 

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. The specific procedures 

and rules that apply to the geographic 

reclassification process are outlined in 

§ 412.230 through § 412.280. 

In the FY 2007 IPPS proposed rule (71 

FR 24377), we identified hospitals that 

have reclassifications effective in FY 

2007. As specified in § 412.273, 

hospitals that have been reclassified by 

the MGCRB are permitted to withdraw 

an application for reclassification or 

terminate an existing 3-year 

reclassification for FY 2007. The request 

must be received by the MGCRB within 

45 days of publication of the IPPS 

proposed rule. 

However, as a result of the Court 

order that we collect new occupational 

mix data and calculate a 100 percent 

occupational mix adjustment, 

information in the IPPS proposed rule 

that hospitals use to make these 

decisions regarding reclassification 

withdrawals is now obsolete. In 

addition, the necessary data (including 

wage indices and out-migration 

adjustments) hospitals utilize in 

evaluating whether to accept or 

terminate a previously approved 

reclassification would not be available 

until after the IPPS final rule has been 

published. Therefore, in this limited 

circumstance, we are proposing to 

suspend the 45-day deadline and are 

proposing to establish the new 

procedure described below to withdraw 

from reclassifications for FY 2007. Some 

hospitals may have adhered to the 

established process and notified the 

MGCRB of their decision to withdraw or 

terminate a reclassification in 

accordance with § 412.273 before 

publication of this proposed rule. 

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Since hospitals made these decisions 

based on information in the FY 2007 

IPPS proposed rule that is now obsolete, 

we are proposing that the MGCRB not 

act on these withdrawal requests. 

Instead, we are proposing to apply the 

following procedures for withdrawal 

determinations for all hospital 

reclassifications for FY 2007. 

Specifically, the FY 2007 IPPS rates 

must go into effect on October 1, 2006. 

Based on our current schedule, we do 

not expect to calculate the final 

occupational mix adjusted wage indices 

until sometime after August 1, 2006 and 

before October 1, 2006. For this reason, 

we do not believe there is sufficient 

time for CMS to make the final 

occupational mix adjusted wage indices 

available and allow hospitals a 45-day 

period to make a final decision 

regarding whether to withdraw a 

reclassification for FY 2007. In the 

interim, we propose to make 

reclassification withdrawal 

determinations based on what we 

perceive would be most advantageous to 

the hospital based on the 100 percent 

occupational adjusted wage index data 

and the out-migration adjustment, if 

applicable. 

We also propose to make the final 

occupational mix adjusted wage indices 

and out-migration adjustments and our 

interim decisions on hospital 

reclassifications available to the public 

on the CMS Web site sometime after 

August 1, 2006, but before October 1, 

2006. We would allow hospitals a 30- 

day period from the date the 100 

percent occupational mix adjusted wage 

index data is made available where they 

can make final, informed 

determinations regarding whether to 

maintain or revise the decision made by 

CMS regarding its reclassification status. 

Hospitals would have 30 days after 

the data is made available on the CMS 

Web site to submit, in writing, whether 

they wish to reverse the reclassification 

decision made by CMS. We will make 

every effort to provide the final data 

before September 1, 2006 so that the 30 

day period to make these 

determinations would end before 

October 1, 2006 and no retroactive 

adjustments would be necessary. The 

request for a withdrawal of a 

reclassification or termination of an 

existing 3-year reclassification that 

would be effective in FY 2007 must be 

received by the MGCRB, in writing with 

a copy to CMS, no later 30 days after the 

data is made available on the CMS Web 

site. The mailing address is: 2520 Lord 

Baltimore Drive, Suite L, Baltimore, MD 

21244–2670. 

3. Procedures for Hospitals Applying for 

Reclassification Effective in FY 2008 

and Reinstating Reclassifications in FY 

2008. 

[If you choose to comment on issues 

in this section, please include the 

caption ‘‘RECLASSIFICATION FOR FY 

2008’’ at the beginning of your 

comments.] 

Applications for FY 2008 

reclassifications are due to the MGCRB 

by September 1, 2006. We note that this 

deadline also applies for canceling a 

previous wage index reclassification 

withdrawal or termination under 

§ 412.273(d). As we noted in the FY 

2007 IPPS proposed rule (71 FR 24083), 

applications and other information 

about MGCRB reclassifications may be 

obtained, beginning in mid-July, on the 

CMS Web site at: http:// 

www.cms.hhs.gov/mgcrb/, or by calling 

the MGCRB at (410) 786–1174. 

The MGCRB, in evaluating a 

hospital’s request for reclassification for 

FY 2008 for the wage index, must utilize 

the official data used to develop the FY 

2007 wage index. The wage data used to 

support the hospital’s wage 

comparisons must be from the CMS 

hospital wage survey. Generally, the 

source for this data would be the IPPS 

final rule that is expected to be 

published on or about August 1, 2006. 

However, under this rule, the wage 

tables identifying the 3-year average 

hourly wage of hospitals would not be 

available for the FY 2007 IPPS final 

rule. Therefore, we are proposing to 

make the data available subsequent to 

August 1, 2006 but before October 1, 

2006. 

Section 1886(d)(10)(C)(ii) of the Act 

indicates that a hospital requesting a 

change in geographic classification for a 

FY 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 FY. 

Thus, the statute requires that FY 2008 

reclassification applications be 

submitted to the MGCRB by no later 

than September 1, 2006. For this reason, 

hospitals must 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 may not yet be available. We 

note that, under § 412.256(c), the 

MGCRB must review applications and 

notify the hospital if it determines that 

the application is incomplete. 

As outlined in § 412.256(c)(2), 

hospitals with incomplete applications 

have the opportunity to request that the 

MGCRB grant a hospital that has 

submitted an application by September 

1, 2006 an extension beyond September 

1, 2006 to complete its application. 

Thus, while hospitals must file an 

application for reclassification to the 

MGCRB by September 1, 2006, they 

would be able to supplement the 

reclassification application with official 

data used to develop the FY 2007 wage 

index after filing their initial 

application. We are proposing that 

hospitals file a supplement to the 

reclassification application with official 

data used to develop the FY 2007 wage 

index no later than 30 days after the 

data is made available on the CMS 

website. 

II. Provisions of the Proposed Rule 

This proposed rule replaces in full the 

descriptions of the data and 

methodology that would be used in 

calculating the occupational mix 

adjustment discussed in the FY 2007 

IPPS proposed rule (71 FR 23996). 

Readers should refer to this proposed 

rule on the occupational mix adjustment 

and reclassification deadlines and 

procedures. 

Consistent with the Court’s order to 

collect new occupational mix data and 

apply the ‘‘adjustment in full,’’ we are 

proposing to apply the occupational mix 

adjustment to 100 percent, rather than 

10 percent, of the wage index using the 

new occupational mix data we are 

collecting from hospitals. 

We are proposing to modify 

procedures for withdrawing requests to 

reclassify for the FY 2007 wage index so 

that hospitals would be able to make 

these decisions after we publish the new 

occupational mix adjusted average 

hourly wages and wage index values. In 

addition, we are proposing that 

hospitals applying for reclassification in 

FY 2008 file a supplement that includes 

the official data used to develop the FY 

2007 wage index no later than 30 days 

after the data is made available on the 

CMS website. 

We are proposing to calculate the FY 

2007 occupational mix adjustment using 

the first 3 months of the 2006 survey 

data. 

We are proposing 4 options for 

treating the occupational mix data for 

non-responsive hospitals: (1) Assign the 

hospital an occupational mix 

adjustment factor of 1.0000 as we did 

for FYs 2005 and 2006; (2) assign the 

hospital the average occupational mix 

adjustment factor for its labor market 

area; (3) assign the hospital the lowest 

occupational mix adjustment factor for 

its labor market area; or (4) assign the 

hospital the average occupational mix 

factor for similar hospitals, based on 

factors such as, geographic location, bed 

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28652 Federal Register / Vol. 71, No. 95 / Wednesday, May 17, 2006 / Proposed Rules 

size, teaching versus nonteaching status 

and case mix. 

We are proposing to respond to public 

comments in the FY 2007 IPPS final 

rule. 

We are proposing to post the FY 2007 

occupational mix adjusted wage index 

tables and related impacts on the CMS 

Web site shortly after we publish the FY 

2007 IPPS final rule, and in advance of 

October 1, 2006. 

III. Collection of Information 

Requirements 

[If you choose to comment on issues 

in this section, please include the 

caption ‘‘COLLECTION OF 

INFORMATION REQUIREMENTS’’ at 

the beginning of your comments.] 

This document does not impose 

information collection and 

recordkeeping requirements. 

Consequently, it need not be reviewed 

by the Office of Management and 

Budget under the authority of the 

Paperwork Reduction Act of 1995 (44 

U.S.C. 35).’’

IV. Response to Comments 

Because of the large number of public 

comments we normally receive on 

Federal Register documents, we are not 

able to acknowledge or respond to them 

individually. We will consider all 

comments we receive by the date and 

time specified in the DATES section of 

this preamble, and, when we proceed 

with a subsequent document, we will 

respond to the comments in the 

preamble to that document. 

V. Waiver of 60-Day Comment Period 

[If you choose to comment on issues 

in this section, please include the 

caption ‘‘WAIVER OF 60-DAY 

COMMENT PERIOD’’ at the beginning 

of your comments.] 

We ordinarily publish a notice of 

proposed rulemaking in the Federal 

Register and permit a 60-day comment 

period. This period, however, may be 

shortened when the agency finds good 

cause that a 60-day comment period 

would be impracticable, unnecessary, or 

contrary to the public interest and 

incorporates a statement of the finding 

and its reasons in the rule issued. For 

this proposed rule, we are waiving the 

60-day comment period for good cause 

and allowing a 30-day comment period 

that coincides with the comment period 

on the FY 2007 IPPS proposed rule. 

Ordinarily, we begin our preparations 

for issuing an IPPS proposed rule early 

in a calendar year so that our proposals 

may be on public display in early spring 

of that year. This schedule allows for a 

60-day comment period closing in either 

late spring or early summer, as well as 

a one-to-two-month period to consider 

all comments and appropriately respond 

to them. 

In this case, we received the Court’s 

order after almost all of the IPPS 

proposed rule had already been 

prepared and finalized. The Court’s 

order requiring that we collect new 

occupational mix data by September 30, 

2006 with immediate application 

necessitated this modification to the 

original FY 2007 IPPS proposed rule. A 

60-day comment period on this proposal 

for how we plan to implement the 

Court’s order would be both 

impracticable and contrary to the public 

interest, because the comment period 

would end on July 11, 2006 and would 

not allow the agency sufficient time to 

process the comments and respond to 

them by the August 1, 2006 date for the 

final rule. In addition, we do not believe 

it would be appropriate to review 

comments relating to the occupational 

mix in isolation from comments 

received on the remainder of the FY 

2007 IPPS proposed rule. 

Because the FY 2007 IPPS proposed 

rule is an inter-dependent system (for 

example, occupational mix adjustments 

affect wage indices, which affect 

reclassifications and budget neutrality) 

extending the comment period to take 

account of this occupational mix 

proposal would necessarily entail not 

being able to consider the comments on 

the remainder of the proposed rule until 

July 11, 2006. We believe it would be 

contrary to the public interest to delay 

consideration of comments that were 

received timely on the original FY 2007 

IPPS proposed rule, solely due to an 

intervening Court order. If we did delay 

consideration, timely filed comments 

would receive a shorter period of time 

for consideration by the agency. It also 

would be impracticable to consider all 

FY 2007 IPPS comments by July 11, 

2006, as doing so would leave 

insufficient time for the agency to 

properly respond to comments and 

appropriately consider and resolve 

whether any of the proposed policies 

would be modified in light of comments 

received. Therefore, we find good cause 

to waive the 60-day comment period for 

this rule of proposed rulemaking. 

VI. Regulatory Impact Statement 

[If you choose to comment on issues 

in this section, please include the 

caption ‘‘IMPACT’’ at the beginning of 

your comments.] 

We have examined the impacts of this 

rule as required by Executive Order 

12866 (September 1993, Regulatory 

Planning and Review), 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) directs agencies to assess all 

costs and benefits of available regulatory 

alternatives and, if regulation is 

necessary, to select regulatory 

approaches that maximize net benefits 

(including potential economic, 

environmental, public health and safety 

effects, distributive impacts, and 

equity). A regulatory impact analysis 

(RIA) must be prepared for major rules 

with economically significant effects 

($100 million or more in any 1 year). 

This proposed rule is not a major rule, 

rather it modifies the occupational mix 

adjustment to the wage index, which is 

budget neutral, as published in the FY 

2007 IPPS proposed rule (71 FR 23996). 

While there may be a redistributive 

effect on payments to hospitals, total 

program payments would neither 

increase nor decrease as a result of this 

proposed rule. 

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 small 

governmental jurisdictions. Most 

hospitals and most other providers and 

suppliers are small entities, either by 

nonprofit status or by having revenues 

of $6 million to $29 million in any 1 

year. (For details, see the Small 

Business Administration’s regulation 

that set forth size standards for health 

care industries at 65 FR 69432). 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. This 

proposed rule may result in a 

redistributive effect on payments to 

hospitals, therefore, it could result in a 

significant impact on small entities. 

In addition, section 1102(b) of the Act 

requires us to prepare a regulatory 

impact analysis if a rule 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 603 of the 

RFA. For purposes of section 1102(b) of 

the Act, we define a small rural hospital 

as a hospital that is located outside of 

a Metropolitan Statistical Area and has 

fewer than 100 beds. This proposed rule 

may result in a redistributive effect on 

payments to hospitals, therefore, it 

could result in a significant impact on 

small rural hospitals. 

Section 202 of the Unfunded 

Mandates Reform Act of 1995 also 

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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 

proposed rule will not have an effect on 

State, local, or tribal governments in the 

aggregate nor will private sector costs be 

greater than the $120 million threshold, 

since this rule is purely budget neutral. 

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. 

This proposed rule would not have a 

substantial effect on State or local 

governments. 

This proposed rule does not include 

analyses for either the RFA or section 

1102(b) of the Act because the data are 

currently being collected for the 2006 

occupational mix survey. Therefore, in 

this proposed rule, we are unable to 

estimate how the new occupational mix 

data would affect the FY 2007 wage 

index. 

In accordance with the provisions of 

Executive Order 12866, this regulation 

was reviewed by the Office of 

Management and Budget. 

(Catalog of Federal Domestic Assistance 

Program No. 93.778, Medical Assistance 

Program) 

(Catalog of Federal Domestic Assistance 

Program No. 93.773, Medicare—Hospital 

Insurance; and Program No. 93.774, 

Medicare—Supplementary Medical 

Insurance Program) 

Dated: May 9, 2006. 

Mark B. McClellan, 

Administrator, Centers for Medicare & 

Medicaid Services. 

Approved: May 11, 2006. 

Michael O. Leavitt, 

Secretary. 

[FR Doc. 06–4608 Filed 5–12–06; 4:00 pm] 

BILLING CODE 4120–01–P 

DEPARTMENT OF THE INTERIOR 

Fish and Wildlife Service 

50 CFR Part 17 

Endangered and Threatened Wildlife 

and Plants; Petition To List the Polar 

Bear as Threatened 

AGENCY: Fish and Wildlife Service, 

Interior. 

ACTION: Status review; reopening of 

public comment period. 

SUMMARY: We, the U.S. Fish and 

Wildlife Service (Service), announce the 

reopening of the public comment period 

on the status review of polar bears 

(Ursus maritimus) to determine if listing 

this species as threatened under the 

Endangered Species Act of 1973, as 

amended (Act), is warranted. This 

action will provide all interested parties 

with an additional opportunity to 

submit written comments for our status 

review of this species. Comments 

previously submitted need not be 

resubmitted as they have already been 

incorporated into the public record and 

will be fully considered in any final 

decision. 

DATES: We will accept comments and 

information until 5 p.m. on June 16, 

2006. Any comments received after the 

closing date may not be considered in 

the final decision on the status review 

of this species. 

ADDRESSES: If you wish to comment, 

you may submit your comments and/or 

information concerning this species and 

the status review by any one of the 

following methods: 

1. You may submit written comments 

and information to the Supervisor, U.S. 

Fish and Wildlife Service, Marine 

Mammals Management Office, 1011 East 

Tudor Road, Anchorage, Alaska 99503. 

2. You may hand-deliver written 

comments to our Marine Mammals 

Management Office at the address given 

above. 

3. You may send your comments by 

electronic mail (e-mail) directly to the 

Service at AK_Polarbear@fws.gov, or to 

the Federal eRulemaking Portal at 

http://www.regulations.gov. For more 

information on submitting e-mail 

comments, see the Public Comments 

Solicited section below. 

FOR FURTHER INFORMATION CONTACT: 

Scott Schliebe (see ADDRESSES), 

telephone, 907–786–3800; facsimile, 

907–786–3816. 

SUPPLEMENTARY INFORMATION: 

Public Comments Solicited 

We intend that any final action 

resulting from this status review will be 

as accurate and as effective as possible. 

Therefore, we solicit comments or 

suggestions from the public, concerned 

governmental agencies, the scientific 

community, industry, or any other 

interested party. We specifically seek 

information on the status of the polar 

bear throughout its range, including: 

(1) Information on taxonomy, 

distribution, habitat selection 

(especially denning habitat), food 

habits, population density and trends, 

habitat trends, and effects of 

management on polar bears; 

(2) Information on the effects of 

climate change and sea ice change on 

the distribution and abundance of polar 

bears and their principal prey over the 

short and long term; 

(3) Information on the effects of other 

potential threat factors, including oil 

and gas development, contaminants, 

hunting, poaching, and changes of the 

distribution and abundance of polar 

bears and their principal prey over the 

short and long term; 

(4) Information on management 

programs for polar bear conservation, 

including mitigation measures related to 

oil and gas exploration and 

development, hunting conservation 

programs, anti-poaching programs, and 

any other private, tribal, or 

governmental conservation programs 

that benefit polar bears; and 

(5) Information relevant to whether 

any populations of the species may 

qualify as distinct population segments. 

We will base our finding on a review 

of the best scientific and commercial 

information available, including all 

information received during the public 

comment period. 

When e-mailing your comments, your 

submission must include ‘‘Attn: Polar 

Bear’’ in the subject line of your 

message, and you must not use special 

characters or any form of encryption. 

Electronic attachments in standard 

formats (such as .pdf or .doc) are 

acceptable, but please name the 

software necessary to open any 

attachments in formats other than those 

given above. Also, please include your 

name and return address in your e-mail 

message. If you do not receive a 

confirmation from the system that we 

have received your e-mail message, 

please submit your comments in writing 

using one of the alternate methods 

described in the ADDRESSES section. In 

the event that our internet connection is 

not functional, please submit your 

comments by one of the alternate 

methods mentioned in the ADDRESSES

section. 

Our practice is to make comments, 

including names and home addresses of 

respondents, available for public review 

during regular business hours. 

Individual respondents may request that 

we withhold their home addresses from 

the rulemaking record, which we will 

honor to the extent allowable by law. 

There also may be circumstances in 

which we would withhold from the 

rulemaking record a respondent’s 

identity, as allowable by law. If you 

wish us to withhold your name and/or 

address, you must state this 

mstockstill on PROD1PC61 with PROPOSALS