26604 Federal Register / Vol. 83, No. 111 / Friday, June 8, 2018 / Rules and Regulations 

EPA-APPROVED IOWA REGULATIONS—Continued 

Iowa citation Title State effective 

date EPA approval date Explanation 

567–33.3 ............. Special Construction Permit Requirements for 

Major Stationary 

Sources in Areas Designated Attainment or 

Unclassified (PSD).

3/22/17 6/8/2018, [Insert Federal 

Register citation].

Provisions of the 2010 PM2.5 PSD—Increments, 

SILs and SMCs rule (published October 20, 

2010) relating to SILs and SMCs that were affected by the January 22, 2013, U.S. Court of 

Appeals decision are not SIP approved. Iowa’s 

rule incorporating EPA’s 2007 revision of the 

definition of ‘‘chemical processing plants’’ (the 

‘‘Ethanol Rule,’’ (published May 1, 2007) or 

EPA’s 2008 ‘‘fugitive emissions rule,’’ (published 

December 19, 2008) are not SIP-approved. 

* * * * * * * 

* * * * * 

PART 62—APPROVAL AND 

PROMULGATION OF STATE PLANS 

FOR DESIGNATED FACILITIES AND 

POLLUTANTS 

■ 3. The authority citation for part 62 

continues to read as follows: 

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

Subpart Q—Iowa 

■ 4. Amend § 62.3913 by revising 

paragraph (d) and adding paragraph (e) 

to read as follows: 

§ 62.3913 Identification of plan. 

* * * * * 

(d) Amended plan, submitted 

September 19, 2001. Clarifying revisions 

to the plan with regard to design 

capacity reports for control of air 

emissions from municipal solid waste 

landfills submitted by the Iowa 

Department of Natural Resources on 

September 19, 2001. The amended plan 

was effective February 11, 2002. 

(e) Amended plan, submitted April 

13, 2017. Grammatical revision to the 

plan for the control of air emissions 

from municipal solid waste landfills 

submitted by the Iowa Department of 

Natural Resources, on April 13, 2017. 

The state effective date of the revision 

was March 22, 2017. The effective date 

of the amended plan is August 7, 2018. 

PART 70—STATE OPERATING PERMIT 

PROGRAMS 

■ 5. The authority citation for part 70 

continues to read as follows: 

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

■ 6. Amend appendix A to part 70 by 

adding paragraph (r) under the heading 

‘‘Iowa’’ to read as follows: 

Appendix A to Part 70—Approval 

Status of State and Local Operating 

Permits Programs 

* * * * * 

Iowa 

* * * * * 

(r) The Iowa Department of Natural 

Resources submitted for program approval 

revisions to rules 567–22.100, 567–22.103, 

567–22.105, and 567–22.108. The state 

effective date was March 22, 2017. This 

revision is effective August 7, 2018. 

* * * * * 

[FR Doc. 2018–12166 Filed 6–7–18; 8:45 am] 

BILLING CODE 6560–50–P 

DEPARTMENT OF HEALTH AND 

HUMAN SERVICES 

Centers for Medicare & Medicaid 

Services 

42 CFR Part 510 

[CMS–5524–F2] 

RIN 0938–AT16 

Medicare Program; Changes to the 

Comprehensive Care for Joint 

Replacement Payment Model (CJR): 

Extreme and Uncontrollable 

Circumstances Policy for the CJR 

Model 

AGENCY: Centers for Medicare & 

Medicaid Services (CMS), HHS. 

ACTION: Final rule. 

SUMMARY: This final rule finalizes a 

policy that provides flexibility in the 

determination of episode spending for 

Comprehensive Care for Joint 

Replacement Payment Model (CJR) 

participant hospitals located in areas 

impacted by extreme and uncontrollable 

circumstances for performance years 3 

through 5. 

DATES: Effective July 9, 2018. 

FOR FURTHER INFORMATION CONTACT: 

Heather Holsey, (410) 786–0028. For 

questions related to the CJR model: 

CJR@cms.hhs.gov. 

SUPPLEMENTARY INFORMATION: 

I. Background 

In the Medicare Program; Cancellation 

of Advancing Care Coordination 

Through Episode Payment and Cardiac 

Rehabilitation Incentive Payment 

Models; Changes to Comprehensive 

Care for Joint Replacement Payment 

Model: Extreme and Uncontrollable 

Circumstances Policy for the 

Comprehensive Care for Joint 

Replacement Payment Model final rule 

and interim final rule with comment 

period published on December 1, 2017 

(82 FR 57066 through 57104), we issued 

an interim final rule with comment 

period in conjunction with the final rule 

in order to address the need for a policy 

to provide some flexibility in the 

determination of episode costs for 

providers located in areas impacted by 

extreme and uncontrollable 

circumstances. Specifically, we 

finalized an extreme and uncontrollable 

events policy for the performance years 

2 through 5 reconciliation and sought 

comment on potential refinements we 

might make to this policy for future 

performance year reconciliations after 

performance year 2. The 30-day 

comment period for that rule closed on 

January 30, 2018. We received 3 

comments on our comment solicitation 

on potential refinements we might make 

to the extreme and uncontrollable 

circumstances policy for future 

performance year reconciliations after 

performance year 2. Those 3 comments 

and our responses are discussed in the 

following paragraphs. We also received 

4 comments that did not relate to the 

extreme and uncontrollable 

circumstances policy comment 

solicitation. 


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1 Irma forces at least 35 hospitals to evacuate 

patients. Here’s a rundown. September 9, 2017. 

https://www.statnews.com/2017/09/09/irmahospital-evacuations-rundown/. Accessed 

November 21, 2017. 2After Harvey Hit, a Texas Hospital Decided to 

Evacuate. Here’s How Patients Got Out. September 

6, 2017. https://www.nytimes.com/2017/09/06/us/ 

texas-hospital-evacuation.html. Accessed 

November 21, 2017. 

3Hurricane Irma causes 36 Florida hospitals to 

close. September 12, 2017. https://

www.healthdatamanagement.com/news/hurricaneirma-causes-36-florida-hospitals-to-close. Accessed 

November 22, 2017. 

4At Tampa Hospital in Evacuation Zone, 800 

Patients and Staff Ride Out Hurricane Irma. 

September 10, 2017. https://weather.com/storms/ 

hurricane/news/hurricane-irma-tampa-hospitalevacuation-zone. Accessed November 22, 2017. 

5Tampa Community Hospital has suspended all 

services and has evacuated patients. September 9, 

2017. https://tampacommunityhospital.com/about/ 

newsroom/tampa-community-hospital-hassuspended-all-services-and-has-evacuated-patients. 

Accessed November 22, 2017. 

6http://www.al.com/news/mobile/index.ssf/2017/ 

11/trump_declares_major_disaster.html. 

7Tia Powell, Dan Hanfling, and Lawrence O. 

Gostin. Emergency Preparedness and Public Health: 

The Lessons of Hurricane Sandy. JAMA. 

2012;308(24):2569–2570. doi:10.1001/ 

jama.2012.108940; and Christine S. Cocanour, 

Steven J. Allen, Janine Mazabob, John W. Sparks, 

Craig P. Fischer, Juanita Romans, Kevin P. Lally. 

Lessons Learned From the Evacuation of an Urban 

Teaching Hospital. Arch Surg. 2002; 137(10):1141– 

1145. doi:10.1001/archsurg.137.10.1141. 

II. Provisions of the Interim Final Rule 

With Comment Period and Analysis of 

and Response to Public Comments 

A. Overview and Background 

In the interim final rule with 

comment period published on 

December 1, 2017, we established an 

extreme and uncontrollable 

circumstances policy for CJR 

performance years 2 through 5 

reconciliation to provide some 

flexibility in determining episode 

spending for CJR participant hospitals 

located in areas impacted by extreme 

and uncontrollable circumstances. 

While this policy most notably 

addressed Hurricane Harvey, Hurricane 

Irma, Hurricane Nate, and the California 

wildfires of August, September, and 

October 2017, we noted that this policy 

could also include other similar events 

that occur within a given performance 

year, including performance year 2, if 

those events meet the requirements we 

set forth in this policy. While Hurricane 

Maria, which also occurred in the same 

timeframe, had and, as of the writing of 

this final rule, continues to have a 

significant and crippling effect on 

Puerto Rico and the U.S. Virgin Islands, 

Hurricane Maria was not part of the 

interim final rule with comment period 

as the CJR model is not in operation in 

the areas impacted by Hurricane Maria, 

and, therefore there are no CJR 

participant hospitals that have been 

impacted by Hurricane Maria. Hurricane 

Harvey, Hurricane Irma, Hurricane Nate, 

and the California wildfires of August, 

September, and October of 2017 affected 

large regions of the United States where 

the CJR model operates, leading to 

widespread destruction of infrastructure 

that impacted residents’ ability to 

continue normal functions afterwards. 

As we stated in the interim final rule 

with comment period, at least 101 CJR 

participant hospitals are located in the 

areas affected by Hurricane Irma and 

Hurricane Harvey, at least 22 CJR 

participant hospitals are located in areas 

impacted by the California wildfires and 

approximately 12 are in the areas 

affected by Hurricane Nate. Based on a 

review of news articles focusing on the 

hurricanes, at least 35 hospitals 

evacuated for Hurricane Irma 1 and 

several hospitals evacuated at least 

partially for Hurricane Harvey.2 In 

Florida, at least two CJR participant 

hospitals in Miami, (Anne Bates Leach 

Eye Hospital and University of Miami 

Hospital) and one CJR participant 

hospital in Miami Beach—Mount Sinai 

Medical Center—had to close because of 

Hurricane Irma.3 Tampa General 

Hospital, a CJR participant hospital in 

Tampa, evacuated all patients except for 

those too ill to move.4 In response to 

Hurricane Irma, on September 9, 2017, 

Tampa Community Hospital, a CJR 

participant hospital, suspended all 

services and evacuated all patients to 

two other CJR participant hospitals, 

Brandon Regional Hospital and Medical 

Center of Trinity.5 In Texas, Baptist 

Beaumont Hospital, a CJR participant 

hospital in Beaumont, Texas, had to 

shut down and evacuate on August 31, 

2017.6 On the same day, Christus 

Southeast Texas St. Elizabeth, another 

CJR participant hospital in Beaumont, 

Texas, left only the emergency and 

trauma center of the hospital open in 

order to ensure it had enough water for 

the patients still at the hospital.6

Patients seeking care at the Medical 

Center of Southeast Texas, a CJR 

participant hospital in Port Arthur, 

Texas, had to be taken by dump truck 

through the submerged hospital parking 

lot to the perimeter of the property, 

where a boat would take them to the 

hospital.6 An additional review of news 

related to California wildfires also 

shows that the fires caused various 

hospitals to evacuate patients.7 On 

November 16, 2017, five counties in 

Alabama were declared as major 

disaster areas due to the destruction of 

structures, piers, roads and bridges 

caused by Hurricane Nate.6 Although 

we did not yet have enough data to 

evaluate these event-specific effects on 

CJR episodes at the time of the 

publication of the interim final rule 

with comment period, we stated that we 

anticipated that at least some CJR 

participant hospitals might have 

experienced episode cost escalation as a 

result of hurricane or fire damage and 

subsequent emergency evacuations. 

Under § 510.305(e), as of performance 

year 2, CJR participant hospitals who 

have episode costs as calculated under 

§ 510.305(e)(1)(iii) (for example, episode 

costs that exceed the target price for the 

performance year) will owe CMS 5 

percent of the loss. While the intent of 

this loss repayment policy is to 

incentivize providers to manage costs 

while improving the quality of CJR 

patient care, we noted in the interim 

final rule with comment period that in 

extreme and uncontrollable 

circumstances, prudent patient care 

management might involve potentially 

expensive air ambulance transport or 

prolonged inpatient stays when other 

alternatives are not practical due, for 

example, to state and local mandatory 

evacuation orders or compromised 

infrastructure. In addition to the news 

reports of disaster conditions that 

impacted several CJR participant 

hospitals, a number of research studies 

on natural disasters and rushed 

evacuations for hospitals supported our 

assumption that costs can rise during 

disaster situations.7

Prior to January 1, 2018, the effective 

date of the interim final rule with 

comment period, CJR regulations at 

§ 510.210 did not allow cancellation of 

episodes for extreme and uncontrollable 

circumstances. The CJR regulations at 

§ 510.305 also did not permit an 

adjustment to account for episode 

spending that may have escalated 

significantly due to events driven by 

extreme and uncontrollable 

circumstances. 

B. Identifying Participant Hospitals 

Affected by Extreme and Uncontrollable 

Circumstances 

As discussed in the interim final rule 

with comment period, for purposes of 

developing a policy to identify hospitals 

affected by extreme and uncontrollable 

circumstances, we consulted section 

1135 of the Social Security Act (the 

Act). That section allows the Secretary 

to temporarily waive or modify certain 

Medicare requirements to ensure that 

sufficient health care items and services 

are available to meet the needs of 

individuals enrolled in Social Security 

Act programs in the emergency area and 

emergency period. It also allows the 

Secretary to temporarily waive or 

modify certain Medicare requirements 

to ensure that providers who provide 


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26606 Federal Register / Vol. 83, No. 111 / Friday, June 8, 2018 / Rules and Regulations 

8See section 1135(g) of the Act for the definition 

of ‘‘emergency area; emergency period’’. 

9The Secretary issued Mississippi a waiver under 

section 1135 for Hurricane Nate. However the 

President did not issue a major disaster declaration 

(An emergency disaster declaration was issued.), so 

under this policy Mississippi is not included on 

this list. 

10https://www.fema.gov/disaster/4349/ 

designated-areas. 

11https://www.fema.gov/disaster/4344/ 

designated-areas. 

12https://www.fema.gov/disaster/4337/ 

designated-areas. 

such services in good faith can be 

reimbursed and exempted from 

sanctions (absent any determination of 

fraud or abuse). The Secretary has 

invoked this authority in response to 

significant natural disasters such as 

Hurricane Katrina in 2005 and 

Superstorm Sandy in 2012. Though the 

section 1135 waiver authority enables 

us to take actions that give healthcare 

providers and suppliers greater 

flexibility, it does not allow for payment 

adjustment for participant hospitals in 

the CJR model. However, as we noted in 

the interim final rule with comment 

period, the extreme and uncontrollable 

circumstance policy should only apply 

when a disaster is widespread and 

extreme. A section 1135 waiver 

identifies the ‘‘emergency area’’ and 

‘‘emergency period,’’ as defined in 

section 1135(g) of Act, for which 

waivers are available. As we stated in 

the interim final rule with comment 

period, we believe it is appropriate to 

establish an extreme and uncontrollable 

circumstance policy that applies only 

when and where the magnitude of the 

event calls for the use of special waiver 

authority to help providers respond to 

the emergency and continue providing 

care. 

In the interim final rule with 

comment period, we noted that the 

extreme and uncontrollable 

circumstance policy also should be 

tailored to the specific areas 

experiencing the extreme and 

uncontrollable circumstance. Section 

1135 waivers typically are authorized 

for a geographic area that may 

encompass a greater region (that is, an 

entire state) than is directly and 

immediately affected by the relevant 

emergency. In addition, section 1135(g) 

of the Act defines the emergency area as 

that area covered by both a Secretarial 

and a Presidential declaration; 

consequently, the scope of the 

emergency area is not entirely in the 

Secretary’s control.8 For purposes of 

this policy, we stated that a narrower 

geographic scope, rather than the full 

emergency area, would ensure that the 

payment policy adjustment is focused 

on the specific areas that experienced 

the greatest adverse effects from the 

extreme and uncontrollable 

circumstance and is not applied to areas 

sustaining little or no adverse effects. 

Therefore, to narrow the scope of this 

policy to ensure it is applied to those 

providers most likely to have 

experienced the greatest adverse effects, 

we also required that the area be 

declared as a major disaster area under 

the Stafford Act. Once an area is 

declared as a major disaster area under 

the Stafford Act, the specific counties, 

municipalities, parishes, territories, and 

tribunals that are part of the major 

disaster area are identified and can be 

located on the Federal Emergency 

Management Agency (FEMA) website at 

www.FEMA.gov/disasters. 

For this policy, only major disaster 

declarations under the Stafford Act in 

combination with issued section 1135 

waivers are used to identify the specific 

counties, municipalities, parishes, 

territories, and tribunals where the 

extreme and uncontrollable 

circumstance took place. Using the 

major disaster declaration as a 

requirement for the extreme and 

uncontrollable event policy also ensures 

that the policy will apply only when the 

event is extreme, meriting the use of 

special authority, and targeting the 

specific area affected by the extreme and 

uncontrollable circumstance. As we 

noted in the interim final rule with 

comment period, we are not including 

emergency declarations under the 

Stafford Act or national emergency 

declarations under the National 

Emergencies Act in this policy, even if 

such a declaration serves as a basis for 

the Secretary’s invoking the section 

1135 waiver authority. This is because 

we believe it is appropriate for our 

extreme and uncontrollable 

circumstance policy to apply only in the 

narrow circumstance where the 

circumstance constitutes a major 

disaster, which are more catastrophic in 

nature and tend to have significant 

impacts to infrastructure, rather than the 

broader grounds for which an 

emergency could be declared. 

In the policy we established to define 

extreme and uncontrollable 

circumstances for the CJR model, an 

area is identified as having experienced 

’extreme and uncontrollable 

circumstances,’ if it is within an 

‘‘emergency area’’ and ‘‘emergency 

period’’ as defined in section 1135(g) of 

the Act, and also is within a county, 

parish, U.S. territory or tribal 

government designated in a major 

disaster declaration under the Stafford 

Act. 

As we stated in the interim final rule 

with comment period, we believe 

Hurricanes Harvey, Irma, and Nate and 

the California wildfires in August, 

September, and October of 2017 

triggered the automatic extreme and 

uncontrollable circumstance policy we 

adopted in the interim final rule with 

comment period. For the performance 

year 2 reconciliation conducted in 

March 2018, this extreme and 

uncontrollable circumstance policy 

applies to those CJR participant 

hospitals whose CMS Certification 

Number (CCN) has a primary address 

located in a state, U.S. territory, or tribal 

government that is within an 

‘‘emergency area’’ and ‘‘emergency 

period,’’ as those terms are defined in 

section 1135(g) of the Act, for which the 

Secretary has issued a waiver under 

section 1135 of the Act and that is 

designated in a major disaster 

declaration under the Stafford Act. The 

states and territories for which section 

1135 waivers were issued in response to 

Hurricanes Harvey, Irma, Nate, and the 

California wildfires (during the fall of 

2017) are Alabama, California, Florida, 

Georgia, South Carolina, Texas, 

Louisiana, and Mississippi. Section 

1135 waivers also were issued for 

Puerto Rico and the Virgin Islands as a 

result of Hurricane Maria, but, as we 

noted in the interim final rule with 

comment period, there are no CJR 

participant hospitals with CCNs with a 

primary address in either of these areas. 

To view the 1135 waiver documents and 

for additional information on section 

1135 waivers see: https://www.cms.gov/ 

About-CMS/Agency-Information/ 

Emergency/. The major disaster 

declarations are located on FEMA 

website at https://www.fema.gov/ 

disasters. When locating the counties, 

municipalities, parishes, tribunals, and 

territories for the major disaster 

declaration, FEMA designates these 

locations as ’designated areas’ for that 

specific state, or tribunal. All counties, 

municipalities, parishes, tribunals, and 

territories identified as designated areas 

on the disaster declaration are included. 

The counties, parishes, and tribal 

governments that met the criteria for the 

CJR policy on extreme and 

uncontrollable circumstances in 

performance year 2 are as follows: 9

• The following counties in Alabama: 

Autauga, Baldwin, Choctaw, Clarke, 

Dallas, Macon, Mobile, and 

Washington.10

• The following counties in 

California: Butte, Lake, Mendocino, 

Napa, Nevada, Orange, Sonoma, and 

Yuba.11

• All 67 counties 12 and Big Cypress 

Indian Reservation, Brighton Indian 

Reservation, Fort Pierce Indian 


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13https://www.fema.gov/disaster/4341/ 

designated-areas. 

14https://www.fema.gov/disaster/4338/ 

designated-areas. 

15https://www.fema.gov/disaster/4346/ 

designated-areas. 

16https://www.fema.gov/disaster/4332/ 

designated-areas. 

17https://www.fema.gov/disaster/4345/ 

designated-areas. 

Reservation, Hollywood Indian 

Reservation, Immokalee Indian 

Reservation, and Tampa Reservation in 

Florida.13

• All 159 counties in Georgia.14

• All 46 counties, and the Catawba 

Indian Reservation in South Carolina.15

• The following counties in Texas: 

Aransas, Austin, Bastrop, Bee, Bexar, 

Brazoria, Calhoun, Chambers, Colorado, 

Dallas, Dewitt, Fayette, Fort Bend, 

Galveston, Goliad, Gonzales, Hardin, 

Harris, Jackson, Jasper, Jefferson, 

Karnes, Kleberg, Lavaca, Lee, Liberty, 

Matagorda, Montgomery, Newton, 

Nueces, Orange, Polk, Refugio, Sabine, 

San Jacinto, San Patricio, Tarrant, 

Travis, Tyler, Victoria, Walker, Waller, 

and Wharton.16

• The following parishes in 

Louisiana: Acadia, Allen, Assumption, 

Beauregard, Calcasieu, Cameron, De 

Soto, Iberia, Jefferson Davis, Lafayette, 

Lafourche, Natchitoches, Plaquemines, 

Rapides, Red River, Sabine, St. Charles, 

St. Mary, Vermilion, and Vernon.17

Using these criteria, in the interim 

final rule with comment period, we 

stated that we were able to identify at 

least 101 CJR participant hospitals 

located in the areas affected by 

Hurricanes Harvey and Hurricane Irma, 

approximately 12 CJR participant 

hospitals in the areas affected by 

Hurricane Nate, and at least 22 CJR 

participant hospitals in areas impacted 

by the California wildfires. As there are 

no CJR model areas in Puerto Rico or the 

U.S. Virgin Islands, we again noted that 

no CJR participant hospitals were 

impacted by Hurricane Maria. CJR 

participant hospitals for whom this 

extreme and uncontrollable 

circumstances policy applies for 

performance year 2 (and subsequent 

performance years if and when the 

policy is invoked) receive notification 

via the initial reconciliation reports 

CMS delivers to providers upon 

completion of the reconciliation 

calculations, which under § 510.305(d) 

are initiated beginning 2 months after 

the close of the performance year. 

Though the Hurricanes and California 

wildfires were the driving force for 

developing the extreme and 

uncontrollable circumstance policy, in 

the interim final rule with comment 

period, we stated that this policy is 

being implemented for the duration of 

the CJR model, and that we are 

amending the CJR regulations 

accordingly, as further outlined later in 

this final rule. 

C. Provisions for Adjusting Episode 

Spending Due to Extreme and 

Uncontrollable Circumstances 

In the interim final rule with 

comment period, we noted that without 

a policy to provide CJR participant 

hospitals some flexibility in extreme 

and uncontrollable circumstances, we 

might inadvertently create an incentive 

to place cost considerations above 

patient safety, especially in the later 

years of the CJR model when the 

downside risk percentage increases. In 

considering policy alternatives to help 

ensure beneficiary protections by 

mitigating participant hospitals’ 

financial liability for costs resulting 

from extreme and uncontrollable 

circumstances, we considered and 

rejected a blanket cancellation of all 

episodes occurring during the relevant 

period. As we stated in the interim final 

rule with comment period, we do not 

believe that a blanket cancellation 

would be in either beneficiaries’ or CJR 

participant hospitals’ best interests, as it 

is possible that hospitals can manage 

costs and earn a reconciliation payment 

despite these extreme and 

uncontrollable circumstances. 

Furthermore, we would not want CJR 

participant hospitals to limit case 

management services for beneficiaries in 

CJR episodes during extreme and 

uncontrollable circumstances, when 

prudent care management could 

potentially involve using significantly 

more expensive transport or care 

settings. Therefore, we determined that 

capping the actual episode spending at 

the target amounts for those episodes 

would be the best way to protect 

beneficiaries from potential care stinting 

and hospitals from escalating costs. As 

we stated in the interim final rule with 

comment period, this will also ensure 

that those hospitals are still able to earn 

reconciliation payments on those 

eligible episodes where the disaster did 

not have a noticeable impact on cost. 

In determining the start date of 

episodes to which this extreme and 

uncontrollable circumstances policy 

will apply, we determined that a 

window of 30 days prior to and 

including the date that the emergency 

period (as defined in section 1135(g) of 

the Act) begins should reasonably 

capture those beneficiaries whose high 

CJR episode costs could be attributed to 

extreme and uncontrollable 

circumstances. As we stated in the 

interim final rule with comment period, 

we believe this 30-day window is 

particularly appropriate due to the 90- 

day CJR model episode length. 

Including all episodes that begin within 

30 days before the date the emergency 

period begins should enable us to 

include the majority of beneficiaries still 

in institutional settings and who are still 

within the first third of their episodes 

when the extreme and uncontrollable 

circumstance arises. We note that the 

average length of stay for DRG 469 is 

between 5 and 6 days and the average 

length of stay for DRG 470 is between 

2 and 3 days (see https://www.cms.gov/ 

Medicare/Medicare-Fee-for-ServicePayment/AcuteInpatientPPS/ 

Downloads/FY2018-CMS-1677-FRTable-5.zip). 

Under § 510.300(a)(1), we 

differentiated fracture and non-fracture 

CJR episodes and pricing, noting that 

lower extremity joint replacement 

procedures performed as a result of a 

hip fracture are typically emergent 

procedures. Fracture episodes typically 

occur for beneficiaries with more 

complex health issues and can involve 

higher episode spending. As we stated 

in the interim final rule with comment 

period, we do not expect a high volume 

of CJR non-fracture episodes to be 

initiated once extreme and 

uncontrollable circumstances arise, 

given that it is not prudent to conduct 

non-fracture major joint replacement 

surgeries, which generally are elective 

and non-emergent, until conditions 

stabilize and infrastructure is reasonably 

restored. Therefore, for non-fracture 

episodes, the extreme and 

uncontrollable circumstances policy we 

established in the interim final rule with 

comment period only applies to dates of 

admission to anchor hospitalization that 

occur between 30 days before and up to 

the date on which the emergency period 

(as defined in section 1135(g) of the Act) 

begins. We believe this policy 

empowers hospitals to decide whether 

they can safely and appropriately 

perform non-fracture THA and TKA 

procedures after the commencement of 

the emergency period and whether or 

not performing these procedures will 

subject their organization to undue 

financial risk resulting from increased 

costs that are beyond the organization’s 

control. 

However, for CJR fracture episodes, 

the extreme and uncontrollable 

circumstances policy we established in 

the interim final rule with comment 

period applies to dates of admission to 

the anchor hospitalization that occur 

within 30 days before, on, or up to 30 

days after the date the emergency period 

(as defined in section 1135(g) of the Act) 

begins. As we stated in the interim final 


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26608 Federal Register / Vol. 83, No. 111 / Friday, June 8, 2018 / Rules and Regulations 

rule with comment period, we recognize 

that fracture cases in CJR are often 

emergent and unplanned, and it may 

not be prudent to postpone major joint 

surgical procedures in many of those 

CJR fracture cases. Therefore, fracture 

episodes with a date of admission to the 

anchor hospitalization that is on or 

within 30 days before or after the date 

that the emergency period (as defined in 

section 1135(g) of the Act) begins are 

subject to this extreme and 

uncontrollable circumstances policy. As 

we stated in the interim final rule with 

comment period, we believe that this 

30-day window before and after the 

emergency period should ensure that 

hospitals caring for CJR fracture patients 

during extreme and uncontrollable 

circumstances are adequately protected 

from episode costs beyond their control. 

In the interim final rule with 

comment period, we established that, 

for performance years 2 through 5, for 

participant hospitals that are located in 

an emergency area during an emergency 

period, as those terms are defined in 

section 1135(g) of the Act, for which the 

Secretary has issued a waiver under 

section 1135 of the Act, and in a county, 

parish, U.S. territory or tribal 

government designated in a major 

disaster declaration under the Stafford 

Act, the following conditions apply. For 

a non-fracture episode with a date of 

admission to the anchor hospitalization 

that is on or within 30 days before the 

date that the emergency period (as 

defined in section 1135(g) of the Act) 

begins, actual episode payments are 

capped at the target price determined 

for that episode under § 510.300. For a 

fracture episode with a date of 

admission to the anchor hospitalization 

that is on or within 30 days before or 

after the date that the emergency period 

(as defined in section 1135(g) of the Act) 

begins, actual episode payments are 

capped at the target price determined 

for that episode under § 510.300. 

We codified this new extreme and 

uncontrollable circumstance policy at 

§ 510.305(k). We sought comment on 

potential refinements to this policy for 

future performance year reconciliations 

after performance year 2. 

Comment: All of the comments we 

received in response to our comment 

solicitation expressed support for an 

extreme and uncontrollable 

circumstances policy for the CJR model. 

All commenters supported the 

application of the policy to episodes 

with anchor stays beginning on or 

within 30 days before the date of the 

emergency period. A commenter 

supported the policy as established in 

the interim final rule with comment 

period and stated that it should apply to 

future performance years beyond 

performance year 2. Another 

commenter, who also supported the 

policy, noted that due to the substantial 

disruptions in the post-acute care 

market from significant infrastructure 

damage, the policy could be 

significantly improved if CMS capped 

payments for both fracture and nonfracture episodes with an anchor 

hospitalization within 30 days before or 

after the date that the emergency period 

begins. A different commenter, who also 

supported the policy, urged CMS to 

expand it to include more episodes by 

developing specific, recovery-focused 

criteria, such as the number of patients 

remaining displaced from their homes, 

the proportion of health care services 

remaining unavailable and distance to 

comparable services for rural areas to 

determine the end date for episodes. 

This commenter, who noted that 

extensive damage to infrastructure, 

housing and post-acute care services in 

Texas due to Hurricane Harvey continue 

to be substantial in certain counties, 

stated that delaying services to Medicare 

beneficiaries who meet the criteria for 

LEJR is detrimental to the health and 

well-being of the beneficiaries. This 

commenter recommended that the 

extreme and uncontrollable 

circumstances policy for all CJR 

episodes should apply to dates of 

admission to anchor hospitalization that 

occur 30 days before the emergency 

period (as defined in section 1135(g) of 

the Act) begins and up to 90 days after 

the date the emergency period ends or 

when health care services has reached 

90 percent of the pre-emergency period 

level and beneficiary displacement 

issues have been resolved to ensure CJR 

participants are protected from episode 

costs beyond their control. 

Response: We appreciate the support 

expressed by commenters for our 

extreme and uncontrollable 

circumstances policy and agree with 

commenters that it is appropriate for the 

policy to cover both fracture and nonfracture episodes with anchor stays 

occurring on or within 30 days before 

the date of the emergency period. In 

response to the commenter who stated 

that our extreme and uncontrollable 

circumstances policy should apply to 

future performance years, we can 

confirm that it does. While we note that 

recovery efforts from major disasters can 

take extensive time and resources, as we 

stated in the interim final rule with 

comment period, we continue to believe 

that it is not prudent to conduct nonfracture major joint replacement 

surgeries, which generally are elective 

and non-emergent, until conditions 

stabilize and infrastructure is reasonably 

restored. Although we acknowledge that 

joint replacements can have a 

substantial impact on quality of life for 

beneficiaries, we are not persuaded by 

commenters that it is appropriate to 

extend the extreme and uncontrollable 

events policy to non-fracture CJR 

episodes beginning on or within the 30 

days after the onset of an emergency 

period. If lasting infrastructure damage 

has severely crippled post-acute care 

access and limited offerings in a 

community, we are not convinced that 

elective surgeries should resume, 

especially for beneficiaries likely to 

need institutional post-acute care, until 

there is some assurance that that care 

will be available. 

When we originally finalized the CJR 

target amounts in the November 24, 

2015 final rule (80 FR 73273), we 

distinguished between hip fracture and 

non-fracture CJR episodes and pricing in 

response to comments. Commenters on 

that rule noted that lower extremity 

joint replacement procedures performed 

as a result of a hip fracture are typically 

emergent procedures (80 FR 73301) 

which can be more clinically complex 

in nature and more costly to treat due 

to their emergent nature. Therefore, as 

we stated in the interim final rule with 

comment period, given the frequent 

emergent nature of fractures, we 

acknowledge that it may not be prudent 

to postpone major joint surgical 

procedures in many of those CJR cases. 

Consequently, we believe it is 

appropriate, as was established in the 

interim final rule with comment period, 

to extend coverage under the extreme 

and uncontrollable circumstances 

policy to fracture cases occurring on or 

within 30 days after the date of the 

disaster, and we thank the commenters 

for their support of this policy that 

covers fracture cases on or within 30 

days of the emergency period in the 

extreme and uncontrollable events 

policy. 

In considering the commenter’s 

suggestion that we develop on-going 

specific, recovery-focused criteria, such 

as the number of patients remaining 

displaced from their homes, the 

proportion of health care services 

remaining unavailable and distance to 

comparable services for rural areas to 

determine the end date for episodes we 

note that it would be extremely difficult 

to establish general criteria that would 

apply broadly to all emergency periods 

that might trigger the extreme and 

uncontrollable circumstances policy; 

this type of criteria would likely need to 

be specific to each individual 

emergency period and would therefore 

be more subjective and less predictable 


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Federal Register / Vol. 83, No. 111 / Friday, June 8, 2018 / Rules and Regulations 26609 

for providers in the CJR model. We 

believe the time-based criteria we 

established for this policy are more 

straightforward and create clear 

guidelines for CJR participant hospitals 

that may need an advanced, predictable 

understanding of which episodes will 

be subject to the extreme and 

uncontrollable circumstances policy. 

We established this policy to limit 

financial liability under the CJR model 

for participant hospitals caring for CJR 

fracture patients during extreme and 

uncontrollable circumstances where 

costs can escalate beyond their control. 

While we acknowledge that disaster 

recovery efforts can be prolonged 

beyond 30-day periods, we believe that 

care management planning is even more 

essential when communities are 

recovering from major disasters. 

However, we do not believe that altering 

the post emergency window from 30 to 

90 days, as suggested by a commenter, 

would be appropriate, as a longer post 

emergency window might incentivize 

providers to disengage from the care 

management the CJR model is focused 

on improving. 

We note a technical correction to the 

preamble of the interim final rule with 

comment period. In several places we 

described our extreme and 

uncontrollable circumstances policy as 

applying when a major disaster 

declaration served as the condition 

precedent to an section 1135 waiver. 

However, this was incorrect, as in 

several of the events to which our policy 

applies, an emergency declaration under 

the Stafford Act was the condition 

precedent for the Secretary’s exercise of 

the section 1135 waiver authority. For 

example, the section 1135 waiver for 

Hurricane Nate was based on an 

emergency declaration under the 

Stafford Act, but a major disaster 

declaration under the Stafford Act 

subsequently was made. The regulation 

text at 42 CFR 510.305(k), which we are 

finalizing without modification, 

accurately reflects the policy. 

III. Provisions of the Final Regulations 

This final rule incorporates the 

provisions of the interim final rule with 

comment period without changes. 

Therefore, this extreme and 

uncontrollable circumstances policy, as 

codified at 42 CFR 510.305(k) will apply 

to CJR participant hospitals that are both 

located in an emergency area during an 

emergency period (as those terms are 

defined in section 1135(g) of the Act) for 

which the Secretary has issued a waiver 

under section 1135; and that are also 

located in a county, parish, or tribal 

government designated in a major 

disaster declaration under the Stafford 

Act. 

IV. Collection of Information 

Requirements 

As stated in section 1115A(d)(3) of the 

Act, Chapter 35 of title 44, United States 

Code, shall not apply to the testing and 

evaluation of models under section 

1115A of the Act. As a result, the 

information collection requirements 

contained in this final rule need not be 

reviewed by the Office of Management 

and Budget. However, we have 

summarized the anticipated cost burden 

associated with the information 

collection requirements in section V. 

(Regulatory Impact Statement) of this 

final rule. 

V. Regulatory Impact Statement 

We have examined the impact of this 

rule as required by Executive Order 

12866 on Regulatory Planning and 

Review (September 30, 1993), Executive 

Order 13563 on Improving Regulation 

and Regulatory Review (January 18, 

2011), the Regulatory Flexibility Act 

(RFA) (September 19, 1980, Pub. L. 96– 

354), section 1102(b) of the Act, section 

202 of the Unfunded Mandates Reform 

Act of 1995 (March 22, 1995; Pub. L. 

104–4), Executive Order 13132 on 

Federalism (August 4, 1999), the 

Congressional Review Act (5 U.S.C. 

804(2)), and Executive Order 13771 on 

Reducing Regulation and Controlling 

Regulatory Costs (January 30, 2017). 

Executive Orders 12866 and 13563 

direct 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 rule does not reach the economic 

threshold and thus is not considered a 

major rule. 

The RFA requires agencies to analyze 

options for regulatory relief of small 

entities. 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 less than $7.5 million to $38.5 

million in any 1 year. Individuals and 

states are not included in the definition 

of a small entity. We are not preparing 

an analysis for the RFA because we have 

determined, and the Secretary certifies, 

that this final rule will not have a 

significant economic impact on a 

substantial number of small entities. 

In addition, section 1102(b) of the Act 

requires us to prepare an RIA 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 604 

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 for Medicare payment 

regulations and has fewer than 100 

beds. We are not preparing an analysis 

for section 1102(b) of the Act because 

we have determined, and the Secretary 

certifies, that this final rule will not 

have a significant impact on the 

operations of a substantial number of 

small rural hospitals. 

Section 202 of the Unfunded 

Mandates Reform Act of 1995 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. 

In 2018, that threshold is approximately 

$150 million. This rule will have no 

consequential effect on state, local, or 

tribal governments or on the private 

sector. 

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. 

Since this regulation does not impose 

any costs on state or local governments, 

the requirements of Executive Order 

13132 are not applicable. 

Executive Order 13771, titled 

Reducing Regulation and Controlling 

Regulatory Costs, was issued on January 

30, 2017. It has been determined that 

this final rule is not a ‘‘significant 

regulatory action’’ and thus does not 

trigger the aforementioned requirements 

of Executive Order 13771. 

In the December 1, 2017 interim final 

rule with comment period, we utilized 

2016 CJR episode level data to 

approximate the impact to projected CJR 

model savings resulting from the 

extreme and uncontrollable 

circumstances policy for performance 

year 2 (82 FR 57096). Specifically, we 

first identified the CJR participant 

hospitals located in Alabama, 

California, Florida, Georgia, South 

Carolina, Mississippi, Texas, and 

Louisiana (those states for which 1135 

waivers were issued) that were also 

located in the counties listed in section 


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26610 Federal Register / Vol. 83, No. 111 / Friday, June 8, 2018 / Rules and Regulations 

II.B. of this final rule and listed on 

www.FEMA.gov/disasters as having a 

major disaster declaration. To 

approximate the date of the emergency, 

we used the date of the disasters as 

listed on the FEMA website from 2017 

(resetting the year to 2016 to align with 

the claim dates of service) and selected 

all CJR episodes for these providers that 

initiated in the month preceding (that is, 

30 days prior) the date of the disaster. 

Date of disaster declaration dates were 

matched to the CJR participant hospitals 

based on the hospitals’ state addresses. 

For non-fracture episodes, we capped 

the actual episode payment at the target 

price determined for that episode if the 

date of admission to the anchor 

hospitalization was on or within 30 

days before the date that the emergency 

period (as defined in section 1135(g) of 

the Act) begins. For fracture episodes, 

we capped the actual episode payment 

at the target price determined for that 

episode if the date of admission to the 

anchor hospitalization was on or within 

30 days before or after the date that the 

emergency period (as defined in section 

1135(g) of the Act) begins. Our analyses 

indicated that the impact of capping the 

actual episode payments at the episode 

target prices based on the 2017 extreme 

and uncontrollable circumstances 

policy could result in a decrease to the 

CJR model estimated savings ranging 

between $1.5 to $5.0 million for 

performance year 2, quantifying the 

dollar impact for that year based on a 

point estimate of $2 million. We also 

noted that this performance year 2 

projected impact was mitigated by the 5 

percent stop-loss/stop-gain levels 

applicable to performance year 2 and 

added that if these disasters had 

occurred in a future performance year 

with higher stop-loss/stop-gain levels 

then we would expect the projected 

impact to increase. The performance 

year 2 savings estimates did not assume 

any change in spending or volume due 

to these extreme and uncontrollable 

circumstances, neither before nor after 

the date of the disaster as listed on the 

FEMA website. 

For purposes of assessing the impact 

of finalizing this policy for performance 

years 3 through 5, we note that we are 

unable to accurately or reasonably 

model an impact due to our inability to 

predict future disaster events. It is 

entirely possible future years could be 

completely free of major disasters and 

emergencies that might qualify as 

triggering events under the extreme and 

uncontrollable circumstances policy. 

Likewise, it is entirely possible that 

future years could have many more 

significant disaster events that might 

qualify as triggering events for the 

extreme and uncontrollable 

circumstances policy. In the absence of 

any future knowledge of potential 

disasters that might qualify as events 

that would invoke the extreme and 

uncontrollable circumstances policy, we 

are assuming that the performance year 

2 extreme and uncontrollable 

circumstances $1.5 to $5 million range 

estimate, quantified using a 2 million 

dollar point estimate, can be 

extrapolated across the remaining 3 

performance years of the CJR model 

since we modeled this using knowledge 

of actual 2017 events. Extrapolating the 

$2 million per year across performance 

years 3 through 5 results in an estimated 

cost of $6 million which could 

potentially net against savings predicted 

for the CJR model. We note that 

extrapolating the range estimate could 

make the impact of this policy for the 

remaining 3 years of the model as low 

as $4.5 million or as high as $15 

million. However, we again reiterate 

that this assumption may be inaccurate 

as this $2 million per year figure was 

based on an estimate of known events 

in 2017 on modeled payments for 

performance year 2. Specifically, future 

years could be disaster free or could 

experience more frequent and 

destructive disasters, either of which 

could render this impact estimate 

incorrect. However, in absence of future 

knowledge we believe this extrapolation 

estimate can be used to approximate an 

impact for this extreme and 

uncontrollable circumstances policy for 

performance years 3 through 5 of the 

CJR model. 

In accordance with the provisions of 

Executive Order 12866, this final rule 

was reviewed by the Office of 

Management and Budget. 

List of Subjects in 42 CFR Part 510 

Administrative practice and 

procedure, Health facilities, Health 

professions, Medicare, Reporting and 

recordkeeping requirements. 

For the reasons set forth in the 

preamble, the interim final rule 

published in the December 1, 2017 

Federal Register (82 FR 57066), is 

adopted as final without change. 

Dated: May 14, 2018. 

Seema Verma, 

Administrator, Centers for Medicare & 

Medicaid Services. 

Dated: May 16, 2018. 

Alex M. Azar II, 

Secretary, Department of Health and Human 

Services. 

[FR Doc. 2018–12379 Filed 6–7–18; 8:45 am] 

BILLING CODE 4120–01–P 


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