DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

42 CFR Parts 412, 413, 440, 441, 482, 485, and 489

[CMS-1498-P]

RIN 0938-AP80

Medicare Program; Proposed Changes to the Hospital Inpatient Prospective

Payment Systems for Acute Care Hospitals and the Long-Term Care Hospital

Prospective Payment System and Proposed Fiscal Year 2011 Rates; Effective Date

of Provider Agreements and Supplier Appr ovals; and Hospital Conditions of

Participation for Reha bilitation and Respiratory Care Services

Medicaid Program: Accreditation Requirements for Providers of Inpatient

Psychiatric Services for Individuals under Age 21

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

ACTION: Proposed rule.

SUMMARY: We are proposing to revise the Me dicare hospital inpatient prospective

payment systems (IPPS) for operating and capital-related costs of acute care hospitals to

implement changes arising from our continui ng experience with these systems. In

addition, in the Addendum to this proposed rule , we describe the proposed changes to the

amounts and factors used to determine the rate s for Medicare acute care hospital inpatient

services for operating costs and capital-relate d costs. These proposed changes would be

applicable to discharges occurring on or af ter October 1, 2010. We also are setting forth

the proposed update to the ra te-of-increase limits for certain hospitals excluded from the

IPPS that are paid on a reasonable cost basis subject to these limits. The proposedCMS-1498-P 2

updated rate-of-increase limits w ould be effective for cost reporting periods beginning on

or after October 1, 2010.

We are proposing to update the payment policy and the annual payment rates for

the Medicare prospective payment system (PPS) for inpatient hospital services provided

by long-term care hospitals (LTCHs). In the Addendum to this proposed rule, we also set

forth the proposed changes to the payment rate s, factors, and other payment rate policies

under the LTCH PPS. These proposed changes would be applicable to discharges

occurring on or after October 1, 2010.

We are proposing changes affecting the Me dicare conditions of participation for

hospitals relating to the types of practitioners who may provide rehabilitation services

and respiratory care services.

We are proposing changes affecting the de termination of the effective date of

provider agreements and supp lier approvals under Medicare.

Finally, we are proposing to offer psychi atric hospitals, hospitals with inpatient

psychiatric programs, and psychiatric facilities that are not hospitals increased flexibility

in obtaining accreditation to participate in the Medicaid program. Psychiatric hospitals

would have the choice of meeting the existin g regulatory requirements to participate in

Medicare as a psychiatric hospital or to obtaining accreditation from a national

accrediting organization whose psychiatric hospital accrediting program has been

approved by CMS. Hospitals w ith inpatient psychiatric prog rams would have the choice

of meeting the existing regulatory requirements for participation in Medicare as a hospital

or obtaining accreditation from a national accrediting organization whose hospitalCMS-1498-P 3

accreditation program has been approved by CM S. In addition, psychiatric facilities that

are not hospitals would be afforded the flexibility in obtaining accreditation by a national

accrediting organization whose program has been approved by CMS, or by any other

accrediting organization with comparable standa rds that is recognized by the State.

DATES: To be assured consideration, comme nts on this proposed rule must be

received at one of the addresses provided below, no later than 5 p.m. Eastern Daylight

Time (E.D.T.) on June 18, 2010.

ADDRESSES: When commenting on issues presented in this proposed rule,

please refer to file code CMS-1498-P. B ecause of staff and resource limitations, we

cannot accept comments by f acsimile (FAX) transmission.

You may submit comments in one of four ways (please choose only one of the

ways listed):

1. Electronically . You may submit electronic comments on this regulation at

http://www.regulations.gov. Follow the instruc tions for "Comment or Submission" and

enter the file code CM S-1498-P to submit comments on this proposed rule.

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-1498-P,

P.O. Box 8011,

Baltimore, MD 21244-1850.CMS-1498-P 4

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-1498-P,

Mail Stop C4-26-05,

7500 Security Boulevard,

Baltimore, MD 21244-1850.

4. By hand or courier . If you prefer, you may deliver (by hand or courier) your

written comments (one original and two copies) before the close of the comment period

to either of the following addresses:

a. Room 445-G, Hubert H. Humphrey Building,

200 Independence Avenue, SW,

Washington, DC 20201.

(Because access to the interior of the HHH Building is not readily available to

persons without Federal Govern ment 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.)CMS-1498-P 5

b. 7500 Security Boulevard,

Baltimore, MD 21244-1850.

If you intend to deliver your comments to the Baltimore address, please call

telephone number (410) 786-7195 in advance to schedule y our arrival with one of our

staff members.

Comments mailed to the addresses indica ted as appropriate for hand or courier

delivery may be delayed and rece ived after the comment period.

For information on viewing public comments, see the beginning of the

Supplementary Information section.

FOR FURTHER INFORMATION, CONTACT :

Tzvi Hefter, (410) 786-4487, and Ing- Jye Cheng, (410) 786 4548, Operating

Prospective Payment, MS-DRGs, Hospital Acquired Conditions (HAC), Wage Index,

New Medical Service and Technology A dd-On Payments, Hospital Geographic

Reclassifications, Acute Care Transfers, Capital Prospective Payment, Excluded

Hospitals, Direct and Indirect Graduate Medical Educati on Payments, Disproportionate

Share Hospital (DSH), and Critical Access Hospital (CAH) Issues.

Michele Hudson, (410) 786-4487, and Judith Richter, (410) 786-2590,

Long-Term Care Hospital Prospective Pa yment System and MS-LTC-DRG Relative

Weights Issues.

Siddhartha Mazumdar, (410) 786- 6673, Rural Community Hospital

Demonstration Program Issues.CMS-1498-P 6

James Poyer, (410) 786-2261, Reporting of Hospital Quality Data for Annual

Payment Update--Program Administration, Validation, and Reconsideration Issues.

Shaheen Halim (410) 786-0641, Reporting of Hospital Quality Data for Annual

Payment Update--Measures Issues Except Hospital Consumer Assessment of Healthcare

Providers and Systems

Elizabeth Goldstein (41) 786-6665 Reporting of Hospital Quality Data for Annual

Payment Update--Hospital Consumer Assessmen t of Healthcare Providers and Systems

Measures Issues.

Marcia Newton, (410-786- 5265) and CDR Scott Cooper (U.S. Public Health

Service), (410) 786-9465, Hospital Conditions of Participati on for Rehabilitation

Services and Respiratory Therapy Care Issues.

Marilyn Dahl, (410) 786-8665, Provide r Agreement and Supplier Approval

Issues.

Melissa Harris, (410) 786-3397 or Adrienne Delozier, (410) 786-0278,

Accreditation of Providers of Inpatient Psychiatric Services to Individuals under Age 21

Issues.

SUPPLEMENTARY INFORMATION:

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 siteCMS-1498-P 7

as soon as possible after they have been received: http://www.regulations.gov. Follow

the search instructions at that Web site to view public comments.

Comments received timely will also be av ailable for public inspection, generally

beginning approximately 3 weeks after publica tion of a document, at the headquarters of

the Centers for Medicare & Medicaid Services, 7500 Security Boulevard, Baltimore,

Maryland 21244, Monday through Friday of each week from 8:30 a.m. to 4:00 p.m. To

schedule an appointment to view public comments, phone 1-800-743-3951.

Electronic Access

This Federal Register document is also available from the Federal Register

online database through GPO Access , a service of the U.S. Government Printing Office.

Free public access is available on a Wide Ar ea Information Server (WAIS) through the

Internet and via asynchronous dial-in. Internet users can access the database by using the

World Wide Web, (the Superintendent of Documents' home Web page address is

http://www.gpoaccess.gov/), by using local WA IS client software, or by telnet to

swais.access.gpo.gov, then login as guest ( no password required). Dial-in users should

use communications software and modem to call (202) 512-1661; type swais, then login

as guest (no password required).

Acronyms

3M 3M Health Information System

AAHKS American Association of Hip and Knee Surgeons

AAMC Association of Amer ican Medical Colleges

ACGME Accreditation Council for Graduate Medical EducationCMS-1498-P 8

AHA American Hospital Association

AHIC American Health Information Community

AHIMA American Health Information Management Association

AHRQ Agency for Healthcare Research and Quality

ALOS Average length of stay

ALTHA Acute Long Term Hospital Association

AMA American Medical Association

AMGA American Medical Group Association

AOA American Osteopathic Association

APR DRG All Patient Refined Di agnosis Related Group System

ARRA American Recovery and Rei nvestment Act of 2009, Pub. L. 111-5

ASC Ambulatory surgical center

ASCA Administrative Simplificati on Compliance Act of 2002, Pub. L. 107-105

ASITN American Society of Interventional and Therapeutic Neuroradiology

BBA Balanced Budget Act of 1997, Pub. L. 105-33

BBRA Medicare, Medicaid, and SCHIP [State Children's Health Insurance

Program] Balanced Budget Re finement Act of 1999, Pub. L. 106-113

BIC Beneficiary Identification Code

BIPA Medicare, Medicaid, and SCHIP [State Children’s Health Insurance

Program] Benefits Improvem ent and Protection Act of 2000,

Pub. L. 106-554

BLS Bureau of Labor StatisticsCMS-1498-P 9

CAH Critical access hospital

CARE [Medicare] Continuity Assessm ent Record & Evaluation [Instrument]

CART CMS Abstraction & Reporting Tool

CBSAs Core-based statistical areas

CC Complication or comorbidity

CCR Cost-to-charge ratio

CDAC [Medicare] Clinical Data Abstraction Center

CDAD Clostridium difficile -associated disease

CIPI Capital input price index

CMI Case-mix index

CMS Centers for Medicare & Medicaid Services

CMSA Consolidated Metropolitan Statistical Area

COBRA Consolidated Omnibus Rec onciliation Act of 1985, Pub. L. 99-272

COLA Cost-of-living adjustment

CoP [Hospital] condi tion of participation

CPI Consumer price index

CRNA Certified Registered Nurse Anesthetist

CY Calendar year

DPP Disproportionate patient percentage

DRA Deficit Reduction Act of 2005, Pub. L. 109-171

DRG Diagnosis-related group

DSH Disproportionate share hospitalCMS-1498-P 10

ECI Employment cost index

EDB [Medicare] Enrollment Database

EMR Electronic medical record

FAH Federation of Hospitals

FDA Food and Drug Administration

FFY Federal fiscal year

FHA Federal Health Architecture

FIPS Federal information processing standards

FQHC Federally qualified health center

FTE Full-time equivalent

FY Fiscal year

GAAP Generally Accepted Accounting Principles

GAF Geographic Adjustment Factor

GME Graduate medical education

HACs Hospital-acquired conditions

HCAHPS Hospital Consumer Assessment of Healthcare Providers and Systems

HCFA Health Care Financing Administration

HCO High-cost outlier

HCRIS Hospital Cost Report Information System

HHA Home health agency

HHS Department of Hea lth and Human Services

HICAN Health Insurance Claims Account NumberCMS-1498-P 11

HIPAA Health Insurance Portability and Accountability Act of 1996,

Pub. L. 104-191

HIPC Health Information Policy Council

HIS Health information system

HIT Health information technology

HMO Health maintenance organization

HPMP Hospital Payment Monitoring Program

HSA Health savings account

HSCRC [Maryland] Health Services Cost Review Commission

HSRV Hospital-specific relative value

HSRVcc Hospital-specific relative value cost center

HQA Hospital Quality Alliance

HQI Hospital Quality Initiative

HwH Hospital-within-a-hospital

ICD-9-CM International Classificat ion of Diseases, Ninth Revision,

Clinical Modification

ICD-10-CM International Classifi cation of Diseases, Tenth Revision,

Clinical Modification

ICD-10-PCS International Classification of Diseases , Tenth Revision, Procedure

Coding System

ICR Information collection requirement

IHS Indian Health ServiceCMS-1498-P 12

IME Indirect medical education

I-O Input-Output

IOM Institute of Medicine

IPF Inpatient psychiatric facility

IPPS [Acute care hospital] inpatient prospective payment system

IRF Inpatient rehabilitation facility

LAMCs Large area metropolitan counties

LOS Length of stay

LTC-DRG Long-term care diagnosis-related group

LTCH Long-term care hospital

MA Medicare Advantage

MAC Medicare Administrative Contractor

MCC Major complication or comorbidity

MCE Medicare Code Editor

MCO Managed care organization

MCV Major cardiovascular condition

MDC Major diagnostic category

MDH Medicare-dependent , small rural hospital

MedPAC Medicare Payment Advisory Commission

MedPAR Medicare Provider An alysis and Review File

MEI Medicare Economic Index

MGCRB Medicare Geographic Classification Review BoardCMS-1498-P 13

MIEA-TRHCA Medicare Improvements and Extension Act, Division B of

the Tax Relief and Health Care Act of 2006, Pub. L. 109-432

MIPPA Medicare Improvements for Pa tients and Provide rs Act of 2008,

Pub. L. 110-275

MMA Medicare Prescription Drug, Im provement, and Modernization Act

of 2003, Pub. L. 108-173

MMSEA Medicare, Medicaid, and SCHIP Extension Act of 2007, Pub. L. 110-173

MPN Medicare provider number

MRHFP Medicare Rural Hospital Flexibility Program

MRSA Methicillin-resistant Staphylococcus aureus

MSA Metropolitan Statistical Area

MS-DRG Medicare severity diagnosis-related group

MS-LTC-DRG Medicare severity long-term care diagnosis-related group

NAICS North American Industrial Classification System

NALTH National Association of Long Term Hospitals

NCD National coverage determination

NCHS National Center for Health Statistics

NCQA National Committee for Quality Assurance

NCVHS National Committee on Vital and Health Statistics

NECMA New England C ounty Metropolitan Areas

NP Nurse practitioner

NQF National Quality ForumCMS-1498-P 14

NTIS National Technical Information Service

NTTAA National Technology Transf er and Advancement Act of 1991

(Pub. L. 104-113)

NVHRI National Voluntary Ho spital Reporting Initiative

OACT [CMS'] Office of the Actuary

OBRA 86 Omnibus Budget Reconc iliation Act of 1996, Pub. L. 99-509

OES Occupational employment statistics

OIG Office of the Inspector General

OMB Executive Office of Management and Budget

OPM U.S. Office of Personnel Management

O.R. Operating room

OSCAR Online Survey Certifi cation and Reporting [System]

PA Physician assistant

PIP Periodic interim payment

PLI Professional liability insurance

PMSAs Primary metropolitan statistical areas

POA Present on admission

PPACA Patient Protecti on and Affordable Care Act, Pub. L. 111-148

PPI Producer price index

PPS Prospective payment system

PRM Provider Reim bursement Manual

ProPAC Prospective Payment Assessment CommissionCMS-1498-P 15

PRRB Provider Reimbur sement Review Board

PRTFs Psychiatric residential treatment facilities

PSF Provider-Specific File

PS&R Provider Statistical a nd Reimbursement (System)

QIG Quality Improvement Group, CMS

QIO Quality Improvement Organization

RCE Reasonable compensation equivalent

RHC Rural health clinic

RHQDAPU Reporting hospital quality da ta for annual payment update

RNHCI Religious nonmedical health care institution

RPL Rehabilitation psychiatric long-term care (hospital)

RRC Rural referral center

RTI Research Triangle Institute, International

RUCAs Rural-urban commuting area codes

RY Rate year

SAF Standard Analytic File

SCH Sole community hospital

SFY State fiscal year

SIC Standard Indus trial Classification

SNF Skilled nursing facility

SOCs Standard occupa tional classifications

SOM State Operations ManualCMS-1498-P 16

SSN Social Security number

SSO Short-stay outlier

TEFRA Tax Equity and Fiscal Res ponsibility Act of 1982, Pub. L. 97-248

TEP Technical expert panel

TMA TMA [Transitional Medical Assist ance], Abstinence Education, and QI

[Qualifying Individuals] Programs Extension Act of 2007, Pub. L. 110-90

UHDDS Uniform hospital discharge data set

Table of Contents

I. Background

A. Summary

1. Acute Care Hospital Inpatient Prospective Payment System (IPPS)

2. Hospitals and Hospital Units Excluded from the IPPS

3. Long-Term Care Hospital Prospective Payment System (LTCH PPS)

4. Critical Access Hospitals (CAHs)

5. Payments for Graduate Medical Education (GME)

B. Provisions of the Patient Pr otection and Affordable Care Act

(Pub. L. 111-148), as amended by the Health Care and Education Reconciliation Act of

2010 (Pub. L. 111-152)

C. Major Content of This Proposed Rule

1. Proposed Changes to MS-DRG Classi fications and Recalibrations of Relative

Weights

2. Proposed Changes to the Hospital Wage Index for Acute Care HospitalsCMS-1498-P 17

3. Other Decisions and Proposed Changes to the IPPS for Operating Costs and

GME Costs

4. Proposed FY 2011 Policy Governing the IPPS for Capital-Related Costs

5. Proposed Changes to the Payment Rates for Certain Excluded Hospitals:

Rate-of-Increase Percentages

6. Proposed Changes to the LTCH PPS

7. Proposed Changes Relating to Effec tive Date of Provider Agreements and

Supplier Approvals

8. Proposed Changes to Medicare Conditi ons of Participati on Affecting Hospital

Rehabilitation Services and Respiratory Care Services

9. Proposed Changes to the Accreditati on Requirements for Medicaid Providers

of Inpatient Psychiatric Servi ces for Individuals under Age 21

10. Determining Proposed Prospective Pa yment Operating and Capital Rates and

Rate-of-Increase Limits for Acute Care Hospitals

11. Determining Proposed Prosp ective Payments Rates for LTCHs

12. Impact Analysis

13. Recommendation of Update Factors fo r Operating Cost Rates of Payment for

Hospital Inpatient Services

14. Discussion of Medicare Paymen t Advisory Commission Recommendations

E. Interim Final Rule with Comme nt Period That Implemented Certain

Provisions of the ARRA Relating to Paymen ts to LTCHs and LTCH Satellite FacilitiesCMS-1498-P 18

II. Proposed Changes to Medicare Seve rity Diagnosis-Related Group (MS-DRG)

Classifications and Relative Weights

A. Background

B. MS-DRG Reclassifications

1. General

2. Yearly Review for Making MS-DRG Changes

C. Adoption of the MS-DRGs in FY 2008

D. Proposed FY 2011 MS-DRG Documentation and Coding Adjustment,

Including the Applicability to the Hospital-Specific Rates and the Puerto Rico-Specific

Standardized Amount

1. Background on the Prospective MS -DRG Documentation and Coding

Adjustments for FY 2008 and FY 2009 Authorized by Pub. L. 110-90

2. Prospective Adjustment to the Average Standardized Amounts Required by

Section 7(b)(1)(A) of Pub. L. 110-90

3. Recoupment or Repayment Adjus tments in FYs 2010 through 2012 Required

by Pub. L. 110-90

4. Retrospective Evaluati on of FY 2008 Claims Data

5. Retrospective Analysis of FY 2009 Claims Data

6. Prospective Adjustment for FY 2010 and Subsequent Years Authorized by

Section 7(b)(1)(A) of Pub. L. 110-90 and Section 1886(d)(3)(vi) of the Act

7. Recoupment or Repayment Adjustme nt for FY 2010 Authorized by Section

7(b)(1)(B) of Pub. L. 110-90CMS-1498-P 19

8. Background on the Application of the Documentation and Coding Adjustment

to the Hospital-Specific Rates

9. Proposed Documentation and Coding Adjustment to the Hospital-Specific

Rates for FY 2011 and Subs equent Fiscal Years

10. Background on the Application of the Documentation and Coding

Adjustment to the Puerto Rico -Specific Standa rdized Amount

11. Proposed Documentation and Coding Ad justment to the Puerto Rico-Specific

Standardized Amount

E. Refinement of the MS-D RG Relative Weight Calculation

1. Background

a. Summary of FY 2009 Changes and Discussion for FY 2011

b. Summary of the RAND Corporation Study of Alternative Relative Weight

Methodologies

2. Proposals for FY 2011 and Timeline for Changes to the Medicare Cost Report

F. Preventable Hospital-Acquired C onditions (HACs), Including Infections

1. Background

a. Statutory Authority

b. HAC Selection

c. Collaborative Process

d. Application of HAC Payment Policy to MS-DRG Classifications

e. Public Input Regarding Sele cted and Potentia l Candidate HACs

f. POA Indicator ReportingCMS-1498-P 20

2. Proposed HAC Conditions for FY 2011

3. RTI Program Evaluation Summary

a. Background

b. Preliminary RTI Analysis on POA Indicator Reporting Across Medicare

Discharges

c. Preliminary RTI Analysis on POA Indicator Reporting of Current HACs

d. Preliminary RTI Analysis of Frequency of Discharges and POA Indicator

Reporting for Current HACs

e. Preliminary RTI Analysis of Circumstances When Application of HAC

Provisions Would Not Result in MS-DRG Reassignment for Current HACs

f. Preliminary RTI Analysis of Coding Changes for HAC-Associated Secondary

Diagnoses for Current HACs

g. Preliminary RTI Analysis of Estimated Net Savings for Current HACs

h. Previously Considered Candidate HACs—Preliminary RTI Analysis of

Frequency of Discharges and POA Indicator Reporting

i. Current and Previously Cons idered Candidate HACs—RTI Report on

Evidence-Based Guidelines

j. Proposals Regarding Current HACs and Previously Considered Candidate

HACs

G. Proposed Changes to Sp ecific MS-DRG Cl assifications

1. Pre-Major Diagnostic Categories (MDCsCMS-1498-P 21

a. Postsurgical Hypoinsulinemia (MS-DRG 008 (Simultaneous Pancreas/Kidney

Transplant)

b. Bone Marrow Transplants

2. MDC 1 (Nervous System): Administr ation of Tissue Plasminogen Activator

(tPA) (rtPA)

3. MDC 5 (Diseases and Disorders of th e Circulatory System): Intraoperative

Fluorescence Vascular Angiography (IFVA) and X-Ray Coronary Angiography in

Coronary Artery Bypass Graft Surgery

a. New MS-DRGs for Intraoperative Fluorescence Vascular Angiography (IFVA)

with CABG

b. New MS-DRG for Intraoperative Angiography, by any Method, with CABG

c. New Procedure Codes

d. MS-DRG Reassignment of Intraope rative Fluorescence Vascular Angiography

(IFVA)

4. MDC 6 (Diseases and Disorders of the Digestive System): Gastrointestinal

Stenting

5. MDC 8 (Diseases and Disorders of the Musculoskeletal System and

Connective Tissue): Pedicle-Based Dynamic Stabilization

6. MDC 15 (Newborns and Other Neonates with Conditions Originating in the

Perinatal Period)

a. Discharges/Transfers of Neonates to a Designat ed Cancer Center or a

Children's HospitalCMS-1498-P 22

b. Vaccination of Newborns

7. Medicare Code Editor (MCE) Changes

a. Unacceptable Principal Diagnosis Edit: Addition of Code for Gastroparesis

b. Open Biopsy Check Edit

c. Noncovered Procedure Edit

8. Surgical Hierarchies

9. Complication or Comorbidity (CC) Exclusions List

a. Background

b. Proposed CC Exclusions List for FY 2011

10. Review of Proce dure Codes in MS-DRGs 981 through 983, 984 through 986,

and 987 through 989

a. Moving Procedure Codes from MS-DRGs 981 through 983 or MS-DRGs 987

through 989 to MDCs

b. Reassignment of Procedures am ong MS-DRGs 981 through 983, 984 through

986, and 987 through 989

c. Adding Diagnosis or Procedure Codes to MDCs

11. Changes to the ICD-9-CM Coding System, Including Discussion of the

Replacement of the ICD-9-CM System with the ICD-10-CM and ICD-10-PCS Systems

in FY 2014

a. ICD-9-CM Coding System

b. Code FreezeCMS-1498-P 23

c. Processing of 25 Diagnosis C odes and 25 Procedur e Codes on Hospital

Inpatient Claims

H. Recalibration of MS-DRG Weights

I. Proposed Add-On Payments fo r New Services and Technologies

1. Background

2. Public Input Before Publication of a Notice of Proposed Rulemaking on

Add-On Payments

3. FY 2011 Status of Technologies Approved for FY 2010 Add-On Payments

a. Spiration® IBV® Valve System

b. CardioWestTM Temporary Total Artificial Heart System (CardioWestTM

TAH-t)

4. FY 2011 Applications for New Technology Add-On Payments

a. Auto Laser Interstitial Thermal Therapy (AutoLITTTM) System

b. LipiScanTM Coronary Imaging System

c. LipiScanTM Coronary Imaging Syst em with Intravascular Ultrasound (IVUS)

III. Proposed Changes to the Hospital Wage Index for Acute Care Hospitals

A. Background

B. Wage Index Reform

1. Wage Index Study Required under the MIEA-TRHCA

a. Legislative Requirement

b. Interim and Final Reports on Results of Acumen’s StudyCMS-1498-P 24

2. FY 2009 Policy Changes in Response to Requirements under Section 106(b) of

the MIEA-TRHCA

a. Reclassification Average Hourly Wage Comparison Criteria

b. Budget Neutrality Adjustment for the Rural and Imputed Floors

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

D. Proposed Occupational Mix Adjustment to the Proposed FY 2011 Wage Index

1. Development of Data for the Propos ed FY 2011 Occupational Mix Adjustment

Based on the 2007-2008 Occupational Mix Survey

2. New 2010 Occupational Mix Survey for the FY 2013 Wage Index

3. Calculation of the Proposed Occu pational Mix Adjustment for FY 2011

E. Worksheet S-3 Wage Data for the Proposed FY 2011 Wage Index

1. Included Categories of Costs

2. Excluded Categories of Costs

3. Use of Wage Index Data by Providers Other Than Acute Care Hospitals under

the IPPS

F. Verification of Worksheet S-3 Wage Data

G. Method for Computing the Proposed FY 2011 Unadjusted Wage Index

H. Analysis and Implementation of the Proposed Occupational Mix Adjustment

and the Proposed FY 2011 Occupati onal Mix Adjusted Wage Index

I. Revisions to the Wage Index Based on Hospital Re designations and

Reclassifications

1. GeneralCMS-1498-P 25

2. Effects of Recla ssification/Redesignation

3. FY 2011 MGCRB Reclassifications

a. FY 2011 Reclassificati on Requirements and Approvals

b. Applications for Recl assifications for FY 2012

c. Appeals of MGCRB Denials of Withdrawals and Terminations

4. Redesignations of Hospitals under Section 1886(d)(8)(B) of the Act

5. Reclassifications under S ection 1886(d)(8)(B) of the Act

6. Reclassifications under Section 508 of Pub. L. 108-173

J. Proposed FY 2011 Wage Index Adju stment Based on Co mmuting Patterns of

Hospital Employees

K. Process for Requests for Wage Index Data Corrections

L. Labor-Market Share for the Proposed FY 2011 Wage Index

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

GME Costs

A. Reporting of Hospital Quality Da ta for Annual Hospital Payment Update

1. Background

a. Overview

b. Hospital Quality Data Reporting under Section 501(b) of Pub. L. 108-173

c. Hospital Quality Data Reporting under Section 5001(a) of Pub. L. 109-171

2. Retirement of RHQDAPU Program Measures

a. Considerations in Retiring Qua lity Measures from the RHQDAPU ProgramCMS-1498-P 26

b. Proposed Retirement of Quality Measures under the RHQDAPU Program for

the FY 2011 Payment Determina tion and Subsequent Years

3. Proposed Expansion Plan for Quality Measures for the FY 2012, FY 2013, and

FY 2014 Payment Determinations

a. Considerations in Expanding and Updating Quality Measures under the

RHQDAPU Program

b. Proposed RHQDAPU Program Quality Measures for the FY 2012 Payment

Determination

c. Proposed RHQDAPU Program Quality Measures for the FY 2013 Payment

Determination

d. Proposed RHQDAPU Program Quality Measures for the FY 2014 Payment

Determination

4. Possible New Quality Measures for Future Years

5. Form, Manner, and Timing of Quality Data Submission

a. Proposed RHQDAPU Program Requirements for FY 2012, FY 2013, and

FY 2014

b. Additional Proposed RHQDAPU Progr am Procedural Requirements for

FY 2012, FY 2013, and FY 2014 Payment Determinations

6. RHQDAPU Program Disaster Extensions and Waivers

7. Proposed Chart Valida tion Requirements for Chart–Abstracted Measures

a. Proposed Chart Validation Requi rements and Methods for the FY 2012

Payment DeterminationCMS-1498-P 27

b. Proposed Supplements to the Chart Validation Process for the FY 2013

Payment Determination and Subsequent Years

8. Data Accuracy and Completene ss Acknowledgement Requirements for the

FY 2012 Payment Determinati on and Subsequent Years

9. Proposed Public Display Requirements for the FY 2012 Payment

Determination and Subsequent Years

10. Proposed Reconsideration and Appeal Procedures for the FY 2011 Payment

Determination

11. Proposed RHQDAPU Program Withdrawal Deadlines

12. Electronic Health Records (EHRs)

a. Background

b. EHR Testing of Quality Measures Submission

c. HITECH Act EHR Provisions

13. Qualification of Registri es for RHQDAPU Data Submission

B. Payment for Transfers of Cases from Medicare Participating Acute Care

Hospitals to Nonparticipa ting Hospitals and CAHs

1. Background

2. Proposed Policy Change

C. Technical Change to Regulations

D. Medicare-Dependent, Small Rural Hospitals (MDHs): Change to Criteria

1. Background

2. Medicare-Dependency: Counting Medicare InpatientsCMS-1498-P 28

E. Rural Referral Centers (RRCs)

1. Case-Mix Index (CMI)

2. Discharges

F. Indirect Medical Education (IME) Adjustment

1. Background

2. IME Adjustment Factor for FY 2011

3. IME-Related Changes in Other Sections of this Proposed Rule

G. Payment Adjustment for Medicare Disproportionate Share Hospitals (DSHs):

Supplemental Security Income (SSI) Fraction

1. Background

2. CMS’ Current Data Matching Process for the SSI Fraction

3. Baystate Medical Center v. Leavitt Court Decision

4. CMS’ Proposed Process for Matching Medicare and SSI Eligibility Data

a. Inclusion of Stale Records and Forced Pay Records in the SSI Eligibility Data

Files

b. Use of SSNs in the Revised Match Process

c. Timing of the Match

5. CMS Ruling

6. Clarification of Language on Inclusi on of Medicare Advantage Days in the SSI

Fraction of the Medicare DSH Calculation

H. Payments for Direct Gradua te Medical Education (GME) Costs

1. BackgroundCMS-1498-P 29

2. Identifying “Approved Medical Residency Programs”

a. Residents in Approved Medical Residency Programs

b. Determining Whether an Indivi dual Is a Resident or a Physician

c . Formal Enrollment and Participation in a Program

3. Electronic Submission of Affiliation Agreements

I. Certified Registered Nurse Anesthe tist (CRNA) Services Furnished in Rural

Hospitals and CAHs

J. Rural Community Hosp ital Demonstration Program

V. Proposed Changes to the IPPS for Capital-Related Costs

A. Overview

B. Exception Payments

C. New Hospitals

D. Hospitals Located in Puerto Rico

E. Proposed Changes for FY 2011: MS-DRG Documentation and Coding

Adjustment

1. Background on the Prospective MS -DRG Documentation and Coding

Adjustments for FY 2008 and FY 2009

2. Retrospective Evaluati on of FY 2008 Claims Data

3. Retrospective Analysis of FY 2009 Claims Data

4. Proposed Prospective MS-DRG Document ation and Coding Adjustment to the

National Capital Federa l Rate for FY 2011 a nd Subsequent YearsCMS-1498-P 30

5. Proposed Documentation and Coding Ad justment to the Puerto Rico-Specific

Capital Rate

F. Other Proposed Changes for FY 2011

VI. Proposed Changes for Hospitals Excluded from the IPPS

A. Excluded Hospitals

B. Critical Access Hospitals (CAHs)

1. Background

2. CAH Optional Method Election for Payment of Outpatient Services

3. Costs of Provider Taxes as Allowable Costs for CAHs

a. Background and Statutory Basis

b. Proposed Clarification of Payment Policy for Provider Taxes

VII. Proposed Changes to the Long-Term Care Hospital Prospective Payment System

(LTCH PPS) for FY 2011

A. Background of the LTCH PPS

1. Legislative and Regulatory Authority

2. Criteria for Classification as a LTCH

a. Classification as a LTCH

b. Hospitals Excluded from the LTCH PPS

3. Limitation on Charges to Beneficiaries

4. Administrative Simplification Compliance Act (ASCA) and Health Insurance

Portability and Accountability Act (HIPAA) ComplianceCMS-1498-P 31

B. Proposed Medicare Severity Lo ng-Term Care Diagnosis-Related Group

(MS-LTC-DRG) Classificati ons and Relative Weights

1. Background

2. Patient Classifica tions into MS-LTC-DRGs

a. Background

b. Proposed Changes to the MS-LTC-DRGs for FY 2011

3. Development of the Proposed FY 2011 MS-LTC-DRG Relative Weights

a. General Overview of the Developm ent of the MS-LTC-DRG Relative Weights

b. Development of the Proposed MS -LTC-DRG Relative Weights for FY 2011

c. Data

d. Hospital-Specific Relative Value (HSRV) Methodology

e. Treatment of Severity Levels in Developing the Proposed MS-LTC-DRG

Relative Weights

f. Low-Volume MS-LTC-DRGs

g. Steps for Determining the Propos ed RY 2011 MS-LTC-DRG Relative Weights

C. Proposed Changes to the LTCH Pa yment Rates and Othe r Proposed Changes

to the FY 2011 LTCH PPS

1. Overview of Development of the LTCH Payment Rates

2. Market Basket for LTCHs Reimbursed under the LTCH PPS

a. Overview

b. Market Basket under the LTCH PPS for FY 2011

c. Proposed Market Basket Update for LTCHs for FY 2011CMS-1498-P 32

d. Proposed Labor-Related Share under the LTCH PPS for FY 2011

3. Proposed Adjustment for Changes in LTCHs’ Case-Mix Due to Changes in

Documentation and Coding Practices That Occurred in a Prior Period

a. Background

b. Evaluation of FY 2009 Claims Data

c. Proposed FY 2011 Documentation and Coding Adjustment

D. Proposed Change in Terminology from “Rate Year” to “Fiscal Year” and

Other Proposed Changes

VIII. Determination of Effective Date of Provider Agreements and Supplier Approvals

A. Background

B. Departmental Appeals Board Decision

C. Proposed Revisions to Regulations

IX. Proposed Changes to Medicare Conditi ons of Participati on Affecting Hospital

Rehabilitation Services and Respiratory Care Services

X. Proposed Changes to the Accreditation Requirements for Medi caid Providers of

Inpatient Psychiatric Services for Individuals under Age 21

A. Background

B. Proposed Revision of Policy and Regulations

XI. MedPAC Recommendations

XII. Other Required Information

A. Requests for Data from the Public

B. Collection of Information RequirementsCMS-1498-P 33

1. Legislative Requirement for Solicitation of Comments

2. Requirements in Regulation Text

a. ICRs Regarding Withdrawing an Application, Terminating an Approved

3 Year Reclassification, or Ca nceling a Previous Withdrawal or Termination (Proposed

Revised §412.273)

b. ICRs Regarding Condition of Partic ipation: Respiratory Care Services

(§482.57)

3. Additional Informati on Collection Requirements

a. Present on Admission (POA) Indicator Reporting

b. Add-On Payments for New Services and Technologies

c. Reporting of Hospital Quality Data for Annual Hospital Payment Update

d. Occupational Mix Adjustment to the FY 2011 Index (Hospital Wage Index

Occupational Mix Survey)

e. Hospital Applications for Geog raphic Reclassifications by the MGCRB

f. Direct GME Payments : General Requirements

C. Response to Comments

Regulation Text

Addendum—Proposed Schedule of Standardiz ed Amounts, Update Factors, and

Rate-of-Increase Percentages Effective with Cost Reporting Periods Beginning on or

after October 1, 2010

I. Summary and BackgroundCMS-1498-P 34

II. Proposed Changes to the Prospective Pa yment Rates for Hospita l Inpatient Operating

Costs for Acute Care Hospitals for FY 2011

A. Calculation of the Ad justed Standardized Amount

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

C. Proposed MS-DRG Relative Weights

D. Calculation of the Propos ed Prospective Payment Rates

III. Proposed Changes to Payment Rate s for Acute Care Hospital Inpatient

Capital-Rela ted Costs for FY 2011

A. Determination of Federal Hospital Inpatient Capital-Related Prospective

Payment Rate Update

B. Calculation of the Pr oposed Inpatient Capital-Related Prospective Payments

for FY 2011

C. Capital Input Price Index

IV. Proposed Changes to Payment Ra tes for Certain Excluded Hospitals:

Rate-of-Increase Percentages

V. Proposed Changes to the Payment Rates for the LTCH PPS for FY 2011

A. Proposed LTCH PPS Standard Federal Rate for FY 2011

B. Proposed Adjustment for Area Wage Levels under the LTCH PPS for

FY 2011

C. Proposed Adjustment for LTCH PPS High-Cost Outlier (HCO) Cases

D. Computing the Proposed Adjusted LTCH PPS Federal Prospective Payments

for FY 2011CMS-1498-P 35

VI. Tables

Table 1A.—Proposed National Adjusted Operating Standardized Amounts,

Labor/Nonlabor (68.8 Percent Labor Share/31.2 Percent Nonlabor Share If Wage Index

Is Greater Than 1)

Table 1B.—Proposed National Adjusted Operating Standardized Amounts,

Labor/Nonlabor (62 Percent Labor Share/38 Percent Nonlabor Share If Wage Index Is

Less Than or Equal to 1)

Table 1C.—Proposed Adjusted Operating Standardized Amounts for Puerto Rico,

Labor/Nonlabor

Table 1D.—Proposed Capital St andard Federal Payment Rate

Table 1E.—Proposed LTCH Standard Federal Prospective Payment Rate

Table 2.—Acute Care Hospita ls Case-Mix Indexes for Discharges Occurring in

Federal Fiscal Year 2009; Proposed Hospital Wa ge Indexes for Federal Fiscal Year 2011;

Hospital Average Hourly Wages for Fede ral Fiscal Years 2009 (2005 Wage Data), 2010

(2006 Wage Data), and 2011 (2007 Wage Da ta); and 3-Year Average of Hospital

Average Hourly Wages

Table 3A.—FY 2011 and 3-Year Average Hourly Wage for Acute Care Hospitals

in Urban Areas by CBSA

Table 3B.—FY 2011 and 3-Year Average H ourly Wage for Acute Care Hospitals

in Rural Areas by CBSA

Table 4A.—Proposed Wage Index and Ca pital Geographic Adjustment Factor

(GAF) for Acute Care Hospitals in Urba n Areas by CBSA and by State--FY 2011CMS-1498-P 36

Table 4B.—Proposed Wage Index and Ca pital Geographic Adjustment Factor

(GAF) for Acute Care Hospitals in Rura l Areas by CBSA and by State--FY 2011

Table 4C.—Proposed Wage Index and Ca pital Geographic Adjustment Factor

(GAF) for Acute Care Hospitals That Are R eclassified by CBSA and by State--FY 2011

Table 4D-1.—Proposed Rural Floor Budg et Neutrality Factors for Acute Care

Hospitals--FY 2011

Table 4D-2.—Urban Areas with Acute Care Hospitals Receiving the Proposed

Statewide Rural Floor or Imputed Floor Wage Index--FY 2011

Table 4E.--Urban CBSAs and Constituent Counties for Acute Care

Hospitals--FY 2011

Table 4F.—Proposed Puerto Rico Wage Index and Capital Geographic

Adjustment Factor (GAF) for Acut e Care Hospitals by CBSA--FY 2011

Table 4J.—Proposed Out-Migration Adju stment for Acute Care Hospitals—

FY 2011

Table 5.--List of Medicare Severity Diagnosis-Related Groups (MS-DRGs),

Relative Weighting Factors, and Geometric and Arithmetic Mean Length of

Stay--FY 2011

Table 6A.--New Diagnosis Codes

Table 6B.--New Procedure Codes

Table 6C.--Invalid Diagnosis Codes

Table 6D.--Invalid Procedure Codes

Table 6E.--Revised Diagnosis Code TitlesCMS-1498-P 37

Table 6F.--Revised Procedure Code Titles

Table 6G.--Additions to the CC Exclusions List ( Available through the Internet

on the CMS Web site at: http://www.cms.hhs.gov/AcuteInpatientPPS/)

Table 6H.--Deletions from the CC Exclusions List (Available through the

Internet on the CMS Web site at : http://www.cms.hhs.gov/AcuteInpatientPPS/)

Table 6I.--Complete List of Complica tion and Comorbidity (CC) Exclusions

(Available only through the Internet on the CMS Web site at:

http:/www.cms.hhs.gov/AcuteInpatientPPS/ )

Table 6J.--Major Complication and Comorbidity (MCC) List (Available through

the Internet on th e CMS Web site at: http://www.cms.hhs.gov/AcuteInpatientPPS/)

Table 6K.--Complication and Comorbidity (CC) List (Available through the

Internet on the CMS Web site at : http://www.cms.hhs.gov/AcuteInpatientPPS/)

Table 7A.--Medicare Prospective Payment System Selected Percentile Lengths of

Stay: FY 2009 MedPAR Update—De cember 2009 GROUPER V27.0 MS-DRGs

Table 7B.--Medicare Prospective Payment System Selected Percentile Lengths of

Stay: FY 2009 MedPAR Update—De cember 2009 GROUPER V28.0 MS-DRGs

Table 8A.—Proposed Statewide Averag e Operating Cost-to-Charge Ratios

(CCRs) for Acute Care Hospitals—March 2009

Table 8B.—Proposed Statewide Average Capital Cost-to-Charge Ratios (CCRs)

for Acute Care Hospitals—March 2009

Table 8C.—Proposed Statewide Average Total Cost-to-Charge Ratios (CCRs) for

LTCHs--March 2009CMS-1498-P 38

Table 9A.--Hospital Reclassifi cations and Redesignations--FY 2011

Table 9C.--Hospitals Redesignated as Rural under Section 1886(d)(8)(E) of the

Act--FY 2011

Table 10.--Geometric Mean Plus the Le sser of .75 of the National Adjusted

Operating Standardized Payment Amount (Inc reased to Reflect the Difference Between

Costs and Charges) or .75 of One Standard Deviation of Mean Charges by Medicare

Severity Diagnosis-Related Groups (MS-DRGs)—March 2009

Table 11.—Proposed MS-LTC-DRGs, Re lative Weights, Geometric Average

Length of Stay, Short-Stay Outlier Threshold, and IPPS Comparable Threshold for

Discharges Occurring from October 1, 2010 through September 30, 2011 under the

LTCH PPS

Table 12A.—Proposed LTCH PPS Wage Index for Urban Areas for Discharges

Occurring from October 1, 2010 through September 30, 2011

Table 12B.—Proposed LTCH PPS Wage Index for Rural Areas for Discharges

Occurring from October 1, 2010 through September 30, 2011

Appendix A--Regulatory Impact Analysis

I. Overall Impact

II. Objectives of the IPPS

III. Limitations of Our Analysis

IV. Hospitals Included in and Excluded From the IPPS

V. Effects on Hospitals and Hospital Units Excluded from the IPPSCMS-1498-P 39

VI. Quantitative Effects of the Proposed Policy Changes under the IPPS for Operating

Costs

A. Basis and Methodology of Estimates

B. Analysis of Table I

C. Effects of the Proposed Changes to the MS-DRG Reclassifications and

Relative Cost-Based Weights (Column 1)

D. Effects of the Application of R ecalibration Budget Neutrality (Column 2)

E. Effects of Proposed Wage Index Changes (Column 3)

F. Application of the Wage Budg et Neutrality Factor (Column 4)

G. Combined Effects of Proposed MS-DRG and Wage Index Changes

(Column 5)

H. Effects of MGCRB R eclassifications (Column 6)

I. Effects of the Proposed Rural Floor and Imputed Floor, Including Application

of Budget Neutrality at th e State Level (Column 7)

J. Effects of the Proposed Wage Index Adjustment for Out-Migration (Column 8)

K. Effects of All Proposed Changes Prior to Documentation and Coding (Or

CMI) Adjustment (Column 9)

L. Effects of All Proposed Change s with CMI Adjustment (Column 10)

M. Effects of Proposed Policy on Payment Adjustments for Low-Volume

Hospitals

N. Impact Analysis of Table II

VII. Effects of Other Proposed Policy ChangesCMS-1498-P 40

A. Effects of Proposed Policy on HACs, Including Infections

B. Effects of Proposed Policy Change s Relating to New Medical Service and

Technology Add-On Payments

C. Effects of Proposed Requirements fo r Hospital Reporting of Quality Data for

Annual Hospital Payment Update

D. Effects of Proposed Policy on Pa yment for Transfer Cases from Medicare

Participating Hospitals to Nonparticipating Hospitals and CAHs

E. Effects of Proposed Change in Criteria for MDHs

F. Effects of Proposed Change Relating to Payment Adjustment for

Disproportionate Share Hospitals

G. Effects of Proposed Changes Relating to Payments for IME and Direct GME

1. Identifying “Approved Medical Residency Programs”

2. Submission of Electronic Affiliation Agreements

H. Effects of Proposed Changes Relatin g to CRNA Services Furnished in Rural

Hospitals and CAHs

I. Effects of Implementation of Rural Community Hospital Demonstration

Program

J. Effects of Proposed Changes Relating to CAHs

1. CAH Optional Method of Payment for Outpatient ServicesCMS-1498-P 41

2. Consideration of Costs of Provide r Taxes as Allowable Costs for CAHs

K. Effects of Proposed Policy Relating to Effective Date of Provider Agreements

and Supplier Approvals

L. Effects of Proposed Changes Relating to Hospital Rehabilita tion Services and

Respiratory Care Services Conditions of Participation

VIII. Effects of Proposed Changes in the Capital IPPS

A. General Considerations

B. Results

IX. Effects of Proposed Payment Rate Ch anges and Proposed Policy Changes under the

LTCH PPS

A. Introduction and Ge neral Considerations

B. Impact on Rural Hospitals

C. Anticipated Effects of Proposed LTCH PPS Payment Rate Change and

Proposed Policy Changes

D. Effect on the Medicare Program

E. Effect on Medicare Beneficiaries

X. Effects of Proposed Policy Changes Relating to Accreditation Requirements for

Medicaid Providers of Inpatient Psychiat ric Services to Individuals under Age 21

XI. Alternatives Considered

XII. Overall Conclusion

A. Acute Care Hospitals

B. LTCHsCMS-1498-P 42

XIII. Accounting Statements

A. Acute Care Hospitals

B. LTCHs

XIV. Executive Order 12866

Appendix B--Recommendation of Update Factors for Operating Cost Rates of

Payment for Inpatient Hospital Services

I. Background

II. Inpatient Hospital Update for FY 2011

III. Secretary's Recommendation

IV. MedPAC Recommendation for Asse ssing Payment Adequacy and Updating

Payments in Traditional Medicare

I. Background

A. Summary

1. Acute Care Hospital Inpatient Prospective Payment System (IPPS)

Section 1886(d) of the Soci al Security Act (the Act) sets forth a system of

payment for the operating costs of acute care hospital inpatient stays under Medicare

Part A (Hospital Insurance) based on prospec tively set rates. Section 1886(g) of the Act

requires the Secretary to pay for the capital-re lated costs of hospital inpatient stays under

a prospective payment system (PPS). Under these PPSs, Medicare payment for hospital

inpatient operating and capital-related costs is made at predetermined, specific rates for

each hospital discharge. Discharges are cla ssified according to a list of diagnosis-related

groups (DRGs).CMS-1498-P 43

The base payment rate is comprised of a standardized amount that is divided into

a labor-related share and a nonla bor-related share. The labor-r elated share is adjusted by

the wage index applicable to the area where the hospital is located. If the hospital is

located in Alaska or Hawaii, the nonlabor-rel ated share is adjusted by a cost-of-living

adjustment factor. This base payment rate is multiplied by the DRG relative weight.

If the hospital treats a high percentage of low-income patients, it receives a

percentage add-on payment applied to the DRG- adjusted base payment rate. This add-on

payment, known as the disproportionate shar e hospital (DSH) adjustment, provides for a

percentage increase in Medicare payments to hospitals that qualify under either of two

statutory formulas designed to identify hosp itals that serve a disproportionate share of

low-income patients. For qua lifying hospitals, the amount of this adjustment may vary

based on the outcome of the statutory calculations.

If the hospital is an approved teaching hospital, it receives a percentage add-on

payment for each case paid under the IPPS, known as the indirect medical education

(IME) adjustment. This percentage varies, depending on the ratio of residents to beds.

Additional payments may be made for cases that involve new technologies or

medical services that have been approved fo r special add-on payments. To qualify, a new

technology or medical service must demons trate that it is a substantial clinical

improvement over technologies or services otherwise available, and that, absent an

add-on payment, it would be inadequately paid under the regular DRG payment.

The costs incurred by the hospital for a case are evaluated to determine whether

the hospital is eligible for an additional payment as an outlier case. This additionalCMS-1498-P 44

payment is designed to protect the hospita l from large financial losses due to unusually

expensive cases. Any eligible outlier payment is added to the DRG-adjusted base

payment rate, plus any DSH, IME, and ne w technology or medical service add-on

adjustments.

Although payments to most hospitals unde r the IPPS are made on the basis of the

standardized amounts, some categories of hospita ls are paid in whole or in part based on

their hospital-specific rate based on their co sts in a base year. For example, sole

community hospitals (SCHs) receive the higher of a hospital-specific rate based on their

costs in a base year (the highest of FY 1982, FY 1987, FY 1996, or FY 2006) or the IPPS

Federal rate based on the standardized amount. Through and including FY 2006, a

Medicare-dependent, small rural hospital (MDH) received the higher of the Federal rate

or the Federal rate plus 50 percent of the amount by which the Federal rate is exceeded

by the higher of its FY 1982 or FY 1987 hospital-specific rate. As discussed below, for

discharges occurring on or after Octobe r 1, 2007, but before October 1, 2011, an MDH

will receive the higher of the Federal rate or the Federal rate pl us 75 percent of the

amount by which the Federal rate is exceeded by the highest of its FY 1982, FY 1987, or

FY 2002 hospital-specific rate. SCHs are th e sole source of care in their areas, and

MDHs are a major source of care for Medicare beneficiaries in their areas. Specifically,

section 1886(d)(5)(D)(iii) of the Act defines an SCH as a hospital that is located more

than 35 road miles from another hospital or that, by reason of factors such as isolated

location, weather conditions, tr avel conditions, or absence of other like hospitals (as

determined by the Secretary), is the sole s ource of hospital inpatient services reasonablyCMS-1498-P 45

available to Medicare beneficiaries. In addition, certain rural hospitals previously

designated by the Secretary as essential access community hospitals are considered

SCHs. Section 1886(d)(5)(G)(iv) of the Act defi nes an MDH as a hospital that is located

in a rural area, has not more than 100 beds, is not an SCH, and has a high percentage of

Medicare discharges (not less than 60 percent of its inpatient days or discharges in its

cost reporting year beginning in FY 1987 or in two of its three most recently settled

Medicare cost reporting years). Both of these categories of hospitals are afforded this

special payment protection in order to mainta in access to services for beneficiaries.

Section 1886(g) of the Act requires the Secretary to pay for the capital-related

costs of inpatient hospital services “in acco rdance with a prospective payment system

established by the Secretary.” The ba sic methodology for determining capital

prospective payments is set forth in our regulations at 42 CFR 412.308 and 412.312.

Under the capital IPPS, payments are adjusted by the same DRG for the case as they are

under the operating IPPS. Capital IPPS payments are also adjusted for IME and DSH,

similar to the adjustments made under the operating IPPS. In addition, hospitals may

receive outlier payments for those cases that have unusually high costs.

The existing regulations governing payments to hospitals under the IPPS are

located in 42 CFR Part 412, Subparts A through M.

2. Hospitals and Hospital Units Excluded from the IPPS

Under section 1886(d)(1)(B) of the Ac t, as amended, certain hospitals and

hospital units are excluded from the IPPS. These hospitals and units are: rehabilitation

hospitals and units; long-term care hospitals (LTCHs); psychiatric hospitals and units;CMS-1498-P 46

children's hospitals; and cancer hospitals. Re ligious nonmedical health care institutions

(RNHCIs) are also excluded from the IPPS. Various sections of the Balanced Budget

Act of 1997 (BBA, Pub. L. 105-33), the Medica re, Medicaid and SCHIP [State Children's

Health Insurance Program] Balanced Budget Refinement Act of 1999 (BBRA,

Pub. L. 106-113), and the Medicare, Medicai d, and SCHIP Benefits Improvement and

Protection Act of 2000 (BIPA, Pub. L. 106-554) provide for the implementation of PPSs

for rehabilitation hospitals and units (referred to as inpatient rehabilitation facilities

(IRFs)), LTCHs, and psychiatric hospitals a nd units (referred to as inpatient psychiatric

facilities (IPFs)). (We note that the annual updates to the LTCH PPS are now included as

part of the IPPS annual update document. Updates to the IRF PPS and IPF PPS are

issued as separate documents.) Childre n's hospitals, cancer hospitals, and RNHCIs

continue to be paid solely under a reas onable cost-based system subject to a

rate-of-increase ceiling on inpatient operating costs per discharge.

The existing regulations governing payments to excluded hospitals and hospital

units are located in 42 CFR Parts 412 and 413.

3. Long-Term Care Hospital Prospective Payment System (LTCH PPS)

The Medicare prospective payment system (PPS) for LTCHs applies to hospitals

described in section 1886(d)(1)(B)(iv) effec tive for cost reporting periods beginning on

or after October 1, 2002. The LTCH PPS was established under the authority of sections

123(a) and (c) of Pub. L. 106-113 and secti on 307(b)(1) of Pub. L. 106-554 (as codified

under section 1886(m)(1) of the Act). During the 5-year (optional) transition period, a

LTCH’s payment under the PPS was based on an increasing proportion of the LTCHCMS-1498-P 47

Federal rate with a corresponding decrea sing proportion based on reasonable cost

principles. Effective for cost reporting pe riods beginning on or after October 1, 2006, all

LTCHs are paid 100 percent of the Federal rate. The existing regulations governing

payment under the LTCH PPS are located in 42 CFR Part 412, Subpart O. Beginning

October 1, 2009, we issue the annual updates to the LTCH PPS in the same documents

that update the IPPS (73 FR 26797 through 26798).

4. Critical Access Hospitals (CAHs)

Under sections 1814(l), 1820, and 1834(g) of the Act, payments are made to

critical access hospitals (CAHs) (that is, rural hospitals or facilities that meet certain

statutory requirements) for i npatient and outpatient servi ces are generally based on 101

percent of reasonable cost. R easonable cost is determined under the provisions of section

1861(v)(1)(A) of the Act and existing regulations under 42 CFR Parts 413 and 415.

5. Payments for Graduate Medical Education (GME)

Under section 1886(a)(4) of the Act, co sts of approved educ ational activities are

excluded from the operating costs of inpatient hospital services. Ho spitals with approved

graduate medical education (GME) programs are paid for the direct costs of GME in

accordance with section 1886(h) of the Act. The amount of payment for direct GME

costs for a cost reporting period is based on the hospital's number of residents in that

period and the hospital’s costs per resident in a base year. The existing regulations

governing payments to the various types of hospitals are located in 42 CFR Part 413.

B. Provisions of the Patient Protection and Affordable Care Act (Pub. L. 111-148), as

amended by the Health Care and Educa tion Reconciliation Act of 2010 (Pub. L. 111-152)CMS-1498-P 48

On March 23, 2010, the Patient Protection and Affordab le Care Act (PPACA),

Pub. L. 111-148 was enacted. Following the enactment of Pub. L. 111-148, the Health

Care and Education Reco nciliation Act of 2010, Public L. 111-152 (enacted on

March 30, 2010), amended certain provisions of Pub. L. 111-148. A number of the

provisions of Pub. L. 111-148, as amended by Pub. L. 111-152, affect the IPPS and the

LTCH PPS and the providers and suppliers addressed in this proposed rule. However,

due to the timing of the passage of the le gislation, we are unable to address those

provisions in this proposed rule. Therefore, the proposed policies and payment rates in

this proposed rule do not reflect the new le gislation. We plan to issue separate

documents in the Federal Register addressing the provisions of Pub. L. 111-148, as

amended, that affect our proposed policies and payment rates for FY 2011 under the IPPS

and the LTCH PPS. In addition, we plan to issue further instructions implementing the

provisions of Pub. L. 111-148, as amended, that affect the policies and payment rates for

FY 2010 under the IPPS and for RY 2010 under the LTCH PPS.

C. Major Content of This Proposed Rule

In this proposed rule, we are setting forth proposed changes to the Medicare IPPS

for operating costs and for capital-related cost s of acute care hospitals in FY 2011. We

also are setting forth proposed changes relating to payments for IME costs and payments

to certain hospitals and units that continue to be excluded from the IPPS and paid on a

reasonable cost basis.

In addition, in this proposed rule, we are setting forth proposed changes to the

payment rates, factors, and other paym ent rate policies under the LTCH PPS forCMS-1498-P 49

FY 2011. We note that because the annual update of payment rates for the LTCH PPS

will now take place on the same schedule and in the same publication as for the IPPS, for

the sake of clarity, in section VII.D. of th is proposed rule, we are proposing to use “fiscal

year (FY)” instead of “rate year (RY) when referring to updates and changes to the

LTCH PPS to be effective October 1, 2010. Therefore, throughout this proposed rule, we

are using the phrase “fiscal year (FY)” in referring to proposed updates and changes to

the LTCH PPS.

Below is a summary of the major ch anges that we are proposing to make:

1. Proposed Changes to MS-DRG Classificati ons and Recalibrations of Relative Weights

In section II. of the preamble of this proposed rule, we included--

● Proposed changes to MS-DRG classi fications based on our yearly review.

● Proposed application of the docum entation and coding adjustment to

hospital-specific rates for FY 2011 resultin g from implementation of the MS-DRG

system.

● A discussion of the Research Triang le International, Inc. (RTI) and RAND

Corporation reports and recommendations relating to charge compression.

● Proposed recalibrations of the MS-DRG relative weights.

We also presented a listing and di scussion of hospital- acquired conditions

(HACs), including infections, that are s ubject to the statutorily required quality

adjustment in MS-DRG payments for FY 2011.

We discuss the FY 2011 status of tw o new technologies approved for add-on

payments for FY 2010 and presented our evaluation and analysis of the FY 2011CMS-1498-P 50

applicants for add-on payments for high-c ost new medical services and technologies

(including public input, as directed by Pub. L. 108-173, obtained in a town hall meeting).

2. Proposed Changes to the Hospital Wa ge Index for Acute Care Hospitals

In section III. of the preamble to this proposed rule, we are proposing revisions to

the wage index for acute care hospitals and th e annual update of the wage data. Specific

issues addressed include the following:

● Budget neutrality for the rural floor and imputed floor.

● Changes to titles and principal cities of CBSA designations.

● The proposed FY 2011 wage index update using wage data from cost reporting

periods beginning in FY 2007.

● Analysis and implementation of the proposed FY 2011 occupational mix

adjustment to the wage index for acute ca re hospitals, including discussion of the 2010

occupational mix survey.

● Proposed revisions to the wage index for acute care hospitals based on hospital

redesignations and reclassifications.

● The proposed adjustment to the wage index for acute care hospitals for

FY 2011 based on commuting patterns of hospita l employees who reside in a county and

work in a different area with a higher wage index.

● The timetable for reviewing and verifying the wage data used to compute the

proposed FY 2011 hospital wage index.

● Determination of the labor-related sh are for the proposed FY 2011 wage index.CMS-1498-P 51

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

Costs

In section IV. of the preamble of this proposed rule, we discussed a number of the

provisions of the regulations in 42 CFR Parts 412, 413, and 489, including the following:

● The reporting of hospital quality data as a condition for receiving the full

annual payment update increase.

● Payment for transfer cases from Medicare participating hospitals to

nonparticipating hosp itals and CAHs.

● A change to the definition criteria for MDHs.

● The proposed updated national and regiona l case-mix values and discharges for

purposes of determining RRC status.

● The statutorily required IME adjustment factor for FY 2011.

● The proposed policy change relating to th e determination of the SSI ratio of the

Medicare fraction in the formula for determining the payment adjustments for

disproportionate share hospitals.

● A proposed clarification of “approved medical residency programs” policies

relating to payment for IME and direct GM E and our proposal to accept the electronic

submission of Medicare GME affiliation agreements.

● Proposed policy change for payments for services furnished by certified

registered nurse anesthetists (CRNAs) in rural hospitals and CAHs.

● Discussion of the status of the Rural Community Hospital Demonstration

Program.CMS-1498-P 52

4. Proposed FY 2011 Policy Governing the IPPS for Capital-Related Costs

In section V. of the preamble to this proposed rule, we discussed the proposed

payment policy requirements for capital-related costs and capital payments to hospitals

for FY 2011 and the proposed MS-DRG doc umentation and coding adjustment for

FY 2011.

5. Proposed Changes to the Payment Ra tes for Certain Excluded Hospitals:

Rate-of-Increase Percentages

In section VI. of the preamble of this proposed rule, we discussed--

● Proposed changes to payments to excluded hospitals.

● Proposed changes relating to the elec tion by CAHs of the optional method of

payment for outpatient services

● Proposed clarification of the policies on costs of provider taxes as allowable

costs for CAHs.

6. Proposed Changes to the LTCH PPS

In section VII. of the preamble of this proposed rule, we set forth proposed

changes to the payment rates, factors, a nd other payment rate policies under the LTCH

PPS for FY 2011, including the annual update of the MS-LTC-DRG classifications and

relative weights for use under the LTCH PPS for FY 2011 and the proposed MS-DRG

documentation and coding adjustment for FY 2011.

7. Proposed Changes Relating to Effective Date of Provider Agreements and Supplier

ApprovalsCMS-1498-P 53

In section VIII. of the preamble of this proposed rule, we set forth our proposed

change in policies for determining the effec tive date of provider agreements and supplier

approvals and to make change s to assure that accredited and nonaccredite d facilities are

treated in the same manner in determining this effective date.

8. Proposed Changes to Medicare Conditions of Participation Affecting Hospital

Rehabilitation Services and Respiratory Care Services

In section IX. of the preamble of this proposed rule, we are proposing changes to

the Medicare conditions of participation regarding which practitioners are allowed to

order rehabilitation and respiratory care services in the hospital setting.

9. Proposed Changes to the Accreditation Requirements for Medicaid Providers of

Inpatient Psychiatric Services for Individuals under Age 21

In section X. of the preamble of this proposed rule, we are proposing to remove

the requirement for accreditation by The Jo int Commission of psychiatric hospitals and

hospitals with inpatient psychiatric progra ms. Hospitals with inpatient psychiatric

programs would be afforded the flexibility in obtaining accreditation by a national

accrediting organization whose hospital accred iting program has been approved by CMS,

and psychiatric rehabilitation treatment facilities would be afforded flexibility in

obtaining accreditation by a national accrediting organization whose program has been

approved by CMS, or by any other accrediting organization with comparable standards

that is recognized by the State.

10. Determining Proposed Prospective Pa yment Operating and Capital Rates and

Rate-of-Increase Limits for Acute Care HospitalsCMS-1498-P 54

In the Addendum to this proposed rule, we set forth proposed changes to the

amounts and factors for determining the propos ed FY 2011 prospective payment rates for

operating costs and capital-related costs for acute care hospitals. We also are establishing

the proposed threshold amounts for outlier cases . In addition, we address the proposed

update factors for determining the rate-of- increase limits for cost reporting periods

beginning in FY 2011 for certain hospitals excluded from the IPPS.

11. Determining Proposed Prosp ective Payment Rates for LTCHs

In the Addendum to this proposed rule, we set forth proposed changes to the

amounts and factors for determining the propos ed FY 2011 prospective standard Federal

rate. We also are establishing the proposed adjustments for wage levels, the labor-related

share, the cost-of-living adjustment, and high-cost outliers, including the fixed-loss

amount, and the LTCH cost-to-charge ratios (CCRs) under the LTCH PPS.

12. Impact Analysis

In Appendix A of this proposed rule, we set forth an analysis of the impact that

the proposed changes would have on affected acute care hospitals and LTCHs.

13. Recommendation of Update Factors for Operating Cost Rates of Payment for

Hospital Inpatient Services

In Appendix B of this proposed rule, as required by sections 1886(e)(4) and (e)(5)

of the Act, we provide our recommendations of the appropriate percentage changes for

FY 2011 for the following:CMS-1498-P 55

● A single average standardized amount for all areas for hospital inpatient

services paid under the IPPS for operating costs of acute care hospitals (and

hospital-specific rates applicable to SCHs and MDHs).

● Target rate-of-increase limits to the allowable operating costs of hospital

inpatient services furnished by certain hospitals excluded from the IPPS.

● The standard Federal rate for hospital inpatient services furnished by LTCHs.

14. Discussion of Medicare Paymen t Advisory Commission Recommendations

Under section 1805(b) of the Act, MedP AC is required to submit a report to

Congress, no later than March 1 of each y ear, in which MedPAC reviews and makes

recommendations on Medicare payment policies. MedPAC’s March 2010

recommendations concerning hospital inpatie nt payment policies address the update

factor for hospital inpatient operating costs and capital-related costs under the IPPS, for

hospitals and distinct part hospital units excluded from the IPPS. We address these

recommendations in Appendix B of this proposed rule. For further information relating

specifically to the MedPAC March 2008 report or to obtain a copy of the report, contact

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

E. Interim Final Rule with Comment Period That Implemented Certain Provisions of the

ARRA Relating to Payments to LTCHs and LTCH Satellite Facilities

Section 4302 of the American Recovery and Reinvestment Act of 2009 (ARRA,

Pub. L. 111-5) included several amendm ents to section 114 of Pub. L. 110-173

(MMSEA) relating to payments to LTCHs and LTCH satellite facilities that were

discussed under section X. of the FY 2010 IPPS/RY 2010 LTCH PPS final ruleCMS-1498-P 56

(74 FR 43976 through 43990). These amendments are effective as if they were enacted

as part of section 114 of Pub. L. 110-173 (MMSEA). We issued instructions to the fiscal

intermediaries and Medicare administrative contractors (MACs) to interpret these

amendments (Change Request 6444). In section XI. of the FY 2010/RY 2010 LTCH PPS

final rule (74 FR 43990), we implemented the provisions of section 4302 of

Pub. L. 111-5 through an interim final rule with comment period. We will respond to the

public comments that we received in a timely manner on this interim final rule with

comment period and finalize the interim final rule with any necessary modification in the

final rule for this proposed rule.

II. Proposed Changes to Medicare Severity Diagnosis-Related Group (MS-DRG)

Classifications and Relative Weights

A. Background

Section 1886(d) of the Act specifies that the Secretary shall establish a

classification system (referred to as DRGs) for inpatient disc harges and adjust payments

under the IPPS based on appropriate weighting factors assigned to each DRG. Therefore,

under the IPPS, we pay for inpatient hospital services on a rate per discharge basis that

varies according to the DRG to which a benefi ciary's stay is assigned. The formula used

to calculate payment for a specific case multiplies an individual hospital's payment rate

per case by the weight of the DRG to which the case is assigned. Each DRG weight

represents the average resources required to care for cases in that particular DRG, relative

to the average resources used to treat cases in all DRGs.CMS-1498-P 57

Congress recognized that it would be necessary to recalculate the DRG relative

weights periodically to account for change s in resource consumption. Accordingly,

section 1886(d)(4)(C) of the Act requires that the Secretary adjust the DRG

classifications and relative weights at least annually. These adjustments are made to

reflect changes in treatment patterns, technol ogy, and any other factors that may change

the relative use of hospital resources.

B. MS-DRG Reclassifications

1. General

As discussed in the preamble to the FY 2008 IPPS final rule with comment period

(72 FR 47138), we focused our efforts in FY 2008 on making significant reforms to the

IPPS consistent with the recommendations made by MedPAC in its "Report to the

Congress, Physician-Owned Specialty Hospitals" in March 2005. MedPAC

recommended that the Secretary refine the entire DRG system by taking severity of

illness into account and applying hospital-sp ecific relative value (HSRV) weights to

DRGs. 1 We began this reform process by adopting cost-based weights over a 3-year

transition period beginning in FY 2007 and ma king interim changes to the DRG system

for FY 2007 by creating 20 new CMS DRGs and modifying 32 other DRGs across

13 different clinical areas i nvolving nearly 1.7 million cases. As described in more detail

below, these refinements were intermediate steps towards comprehensive reform of both

the relative weights and the DRG system as we undertook further study. For FY 2008,

1 Medicare Payment Advisory Commission: Report to the Congress, Physician-Owned Specialty Hospitals , March 2005, page viii.CMS-1498-P 58

we adopted 745 new Medicare Severity DRGs (MS-DRGs) to replace the CMS DRGs.

We refer readers to section II.D. of the FY 2008 IPPS final rule with comment period for

a full detailed discussion of how the MS-DRG system, based on severity levels of illness,

was established (72 FR 47141).

Currently, cases are classified into MS-DRGs for payment under the IPPS based

on the following information reported by the hos pital: the principal diagnosis, up to eight

additional diagnoses, and up to six procedur es performed during the stay. (We refer

readers to section II.G.11.c. of this proposed rule for a discussion of our efforts to

increase our internal systems capacity to process diagnosis and procedures on hospital

claims to 25 diagnosis codes and 25 procedure codes prior to the use of the International

Classification of Diseases, 10th Revision, Clinical Modification (ICD-10-CM) for

diagnosis coding and the International Classification of Diseases, 10th Revision,

Procedure Coding System (ICD-10 PCS) for inpatient hospital procedure coding,

effective October 1, 2013.) In a small number of MS-DRGs, classifi cation is also based

on the age, sex, and discharge status of the patient. The diagnosis and procedure

information is reported by the hospital using codes from the International Classification

of Diseases, Ninth Revision, C linical Modification (ICD-9-C M) prior to October 1, 2013.

We refer readers to section II.G.11.b. of this proposed rule for a reference to the

replacement of ICD-9-CM, Volumes 1 a nd 2, including the Official ICD-9-CM

Guidelines for Coding and Reporting, Volu me 3, with the ICD-10-CM and ICD-10-PCS,

including the Official ICD-10-CM and ICM-10-PCS Guidelines for Coding and

Reporting, effective October 1, 2013 (FY 2014).CMS-1498-P 59

The process of developing the MS-D RGs was begun by dividing all possible

principal diagnoses into mutually exclusive pr incipal diagnosis areas, referred to as Major

Diagnostic Categories (MDCs). The MDCs we re formulated by physician panels to

ensure that the DRGs would be clinically coherent. The diagnoses in each MDC

correspond to a single organ system or etiology and, in general, are associated with a

particular medical specialty. Thus, in orde r to maintain the requirement of clinical

coherence, no final MS-DRG c ould contain patients in diffe rent MDCs. For example,

MDC 6 is Diseases and Disorders of the Di gestive System. This approach is used

because clinical care is generally organized in accordance with the organ system affected.

However, some MDCs are not constructed on this basis because they involve multiple

organ systems (for example, MDC 22 (Burns)). For FY 2010, cases are assigned to one

of 746 MS-DRGs in 25 MDCs. The table below lists the 25 MDCs.

Major Diagnostic Categories (MDCs)

1 Diseases and Disorders of the Nervous System 2 Diseases and Disorders of the Eye 3 Diseases and Disorders of the Ear, Nose, Mouth, and Throat 4 Diseases and Disorders of the Respiratory System 5 Diseases and Disorders of the Circulatory System 6 Diseases and Disorders of the Digestive System 7 Diseases and Disorders of the Hepatobiliary System and Pancreas 8 Diseases and Disorders of the Musculos keletal System and Connective Tissue 9 Diseases and Disorders of the Sk in, Subcutaneous Tissue and Breast 10 Endocrine, Nutritional and Metabo lic Diseases and Disorders 11 Diseases and Disorders of the Kidney and Urinary Tract 12 Diseases and Disorders of the Male Reproductive System 13 Diseases and Disorders of the Female Reproductive System 14 Pregnancy, Childbirth, and the Puerperium 15 Newborns and Other Neonates with Conditions Originating in the Perinatal Period 16 Diseases and Disorders of the Blood and Blood Forming Organs and Immunological DisordersCMS-1498-P 60

Major Diagnostic Categories (MDCs) 17 Myeloproliferative Diseases and Disorder s and Poorly Differentiated Neoplasms 18 Infectious and Parasitic Diseases (Systemic or Unspecified Sites) 19 Mental Diseases and Disorders 20 Alcohol/Drug Use and Alcohol/Drug I nduced Organic Mental Disorders 21 Injuries, Poisonings, and Toxic Effects of Drugs 22 Burns 23 Factors Influencing Health Status and Other Contacts with Health Services 24 Multiple Significant Trauma 25 Human Immunodeficiency Virus Infections

In general, cases are assigned to an MDC based on the patient's principal

diagnosis before assignment to an MS-DRG. However, under the most recent version of

the Medicare GROUPER (Version 27.0), ther e are 13 MS-DRGs to which cases are

directly assigned on the basis of ICD-9-CM procedure codes. These MS-DRGs are for

heart transplant or implant of heart assist systems; liver and/ or intestinal transplants; bone

marrow transplants; lung transplants; simultane ous pancreas/kidney transplants; pancreas

transplants; and tracheostomies. Cases are assigned to th ese MS-DRGs before they are

classified to an MDC. The table below lists the 13 current pre-MDCs.

Pre-Major Diagnostic Categories (Pre-MDCs) MS-DRG 001 Heart Transplant or Implan t of Heart Assist System with MCC MS-DRG 002 Heart Transplant or Implant of Heart Assist System without MCC MS-DRG 003 ECMO or Tracheostomy with Mechanical Ventilation 96+ Hours or Principal Diagnosis Except for Face, Mouth, and Neck Diagnosis with Major O.R. MS-DRG 004 Tracheostomy with Mech anical Ventilation 96+ Hours or Principal Diagnosis Except for Face, Mouth, and Neck Diagnosis with Major O.R. MS-DRG 005 Liver Transplant with MCC or Intestinal Transplant MS-DRG 006 Liver Transplant without MCC MS-DRG 007 Lung Transplant MS-DRG 008 Simultaneous Panc reas/Kidney Transplant MS-DRG 009 Bone Marrow TransplantCMS-1498-P 61

Pre-Major Diagnostic Categories (Pre-MDCs) MS-DRG 010 Pancreas Transplant MS-DRG 011 Tracheostomy for Face, Mouth, and Neck Diagnoses with MCC MS-DRG 012 Tracheostomy for Face, Mouth, and Neck Diagnoses with CC MS-DRG 013 Tracheostomy for Face, Mouth, and Neck Diagnoses without CC/MCC

Once the MDCs were defined, each MDC was evaluated to identify those

additional patient characteristic s that would have a consiste nt effect on hospital resource

consumption. Because the presence of a surgic al procedure that required the use of the

operating room would have a significant effect on the type of hospital resources used by a

patient, most MDCs were initially divided into surgical DRGs and medical DRGs.

Surgical DRGs are based on a hierarchy that orders operating room (O .R.) procedures or

groups of O.R. procedures by resource intensity. Medical DRGs generally are

differentiated on the basis of diagnosis and ag e (0 to 17 years of age or greater than

17 years of age). Some surgical and medi cal DRGs are further differentiated based on

the presence or absence of a complication or comorbidity (CC) or a major complication

or comorbidity (MCC).

Generally, nonsurgical procedures and mi nor surgical procedures that are not

usually performed in an operating room are not treated as O.R. procedures. However,

there are a few non-O.R. procedures that do affect MS-DRG assignment for certain

principal diagnoses. An example is extraco rporeal shock wave lit hotripsy for patients

with a principal diagnosis of urinary stones. Lithotripsy procedures are not routinely

performed in an operating room. Therefore, lithotripsy codes are not classified as O.R.

procedures. However, our clinical advisors believe that patients w ith urinary stones whoCMS-1498-P 62

undergo extracorporeal shock wave lithotrips y should be considered similar to other

patients who undergo O.R. procedures. Theref ore, we treat this group of patients similar

to patients undergoing O.R. procedures.

Once the medical and surgical classes for an MDC were formed, each diagnosis

class was evaluated to determine if complications or comorbidities would consistently

affect hospital resource consumption. Each di agnosis was categorized into one of three

severity levels. These three levels include a major complication or comorbidity (MCC), a

complication or comorbidity (CC), or a non-CC. Physician panels classified each

diagnosis code based on a highly iterative proc ess involving a combination of statistical

results from test data as well as clinical judgment. As stated earlier, we refer readers to

section II.D. of the FY 2008 IPPS final rule with comment period for a full detailed

discussion of how the MS-DRG system was established based on se verity levels of

illness (72 FR 47141).

A patient’s diagnosis, procedure, discha rge status, and demographic information

is entered into the Medicare claims proce ssing systems and subjected to a series of

automated screens called the Medicare Code Editor (MCE). The MCE screens are

designed to identify cases that require furt her review before classification into an

MS-DRG.

After patient information is screen ed through the MCE and any further

development of the claim is conducted, the cases are classi fied into the appropriate

MS-DRG by the Medicare GROUPER software program. The GROUPER program was

developed as a means of classifying each case into an MS- DRG on the basis of theCMS-1498-P 63

diagnosis and procedure codes and, for a limited number of MS-DRGs, demographic

information (that is, sex, ag e, and discharge status).

After cases are screened through the MCE and assigned to an MS-DRG by the

GROUPER, the PRICER software calculates a base MS-DRG payment. The PRICER

calculates the payment for each case covered by the IPPS based on the MS-DRG relative

weight and additional factors associated with each hospital, such as IME and DSH

payment adjustments. These additional factor s increase the payment amount to hospitals

above the base MS-DRG payment.

The records for all Medicare hospital inpatient discharges are maintained in the

Medicare Provider Analysis and Review (MedPAR) file. The data in this file are used to

evaluate possible MS-DRG classification changes and to recalibrate the MS-DRG

weights. However, in the FY 2000 IPPS final rule (64 FR 41500), we discussed a

process for considering non-MedP AR data in the recalibration pr ocess. In order for us to

consider using particular non- MedPAR data, we mu st have sufficient time to evaluate

and test the data. The time necessary to do so depends upon the nature and quality of the

non-MedPAR data submitted. Generally, however, a sign ificant sample of the

non-MedPAR data should be s ubmitted by mid-October for c onsideration in conjunction

with the next year's proposed rule. This date allows us time to test the data and make a

preliminary assessment as to the feasibility of using the data. Subsequently, a complete

database should be s ubmitted by early December for cons ideration in conjunction with

the next year’s proposed rule.CMS-1498-P 64

As we indicated above, for FY 2008, we made significant improvements in the

DRG system to recognize se verity of illness and resour ce usage by adopting MS-DRGs

that were reflected in the FY 2008 GROUP ER, Version 25.0, and were effective for

discharges occurring on or after Octobe r 1, 2007. Our MS-DRG analysis for the

FY 2009 final rule was based on data from the March 2008 update of the FY 2007

MedPAR file, which contai ned hospital bills received through March 31, 2008, for

discharges occurring through September 30, 2007. For this proposed rule, for FY 2011,

our MS-DRG analysis is based on data from the September 2009 update of the FY 2009

MedPAR file, which contains hospital b ills received through September 30, 2009, for

discharges occurring through September 30, 2009.CMS-1498-P 65

2. Yearly Review for Making MS-DRG Changes

Many of the changes to the MS-DRG cl assifications we make annually are the

result of specific issues brought to our atten tion by interested par ties. We encourage

individuals with comments about MS-DRG cl assifications to submit these comments no

later than early December of each year so th ey can be carefully considered for possible

inclusion in the annual proposed rule and, if included, may be subjected to public review

and comment. Therefore, similar to the timetable for interested parties to submit

non-MedPAR data for consideration in th e MS-DRG recalibration process, comments

about MS-DRG classification issues should be submitted no later than early December in

order to be considered and possibly include d in the next annual proposed rule updating

the IPPS.

The actual process of forming the MS-DRGs was, and will likely continue to be,

highly iterative, involving a combination of statistical results from test data combined

with clinical judgment. In the FY 2008 IPPS final rule (72 FR 47140 through 47189), we

described in detail the proce ss we used to develop the MS-DRGs that we adopted for

FY 2008. In addition, in deciding whether to make further modification to the MS-DRGs

for particular circumstances brought to our a ttention, we considered whether the resource

consumption and clinical charac teristics of the patients with a given set of conditions are

significantly different than the remaining patients in the MS-DRG. We evaluated patient

care costs using average charges and lengths of stay as proxies for costs and relied on the

judgment of our medical advisors to decide whether patients are clinically distinct or

similar to other patients in the MS-DRG. In evaluating resource costs, we consideredCMS-1498-P 66

both the absolute and percentage differences in average charges between the cases we

selected for review and the remainder of ca ses in the MS-DRG. We also considered

variation in charges within these groups; th at is, whether observe d average differences

were consistent across patients or attributable to cases that were extreme in terms of

charges or length of stay, or both. Further, we considered the number of patients who

will have a given set of characteristics and generally preferred not to create a new

MS-DRG unless it would include a substantial number of cases.

C. Adoption of the MS-DRGs in FY 2008

In the FY 2006, FY 2007, and FY 2008 IPPS final rules, we discussed a number

of recommendations made by MedPAC rega rding revisions to the DRG system used

under the IPPS (70 FR 47473 through 47482; 71 FR 47881 through 47939; and

72 FR 47140 through 47189). As we noted in the FY 2006 IPPS final rule, we had

insufficient time to complete a thorough evaluation of these recommendations for full

implementation in FY 2006. However, we di d adopt severity-weighted cardiac DRGs in

FY 2006 to address public comments on this i ssue and the specific concerns of MedPAC

regarding cardiac surgery DRGs. We also indi cated that we planned to further consider

all of MedPAC’s recommenda tions and thoroughly analyze options and their impacts on

the various types of hospitals in the FY 2007 IPPS proposed rule.

For FY 2007, we began this process. In the FY 2007 IPPS proposed rule, we

proposed to adopt Consolidated Severity DR Gs (CS DRGs) for FY 2008 (if not earlier).

Based on public comments received on the FY 2007 IPPS proposed rule, we decided not

to adopt the CS DRGs. In the FY 2007 IPPS final rule (71 FR 47906 through 47912), weCMS-1498-P 67

discussed several concerns raised by co mmenters regarding the proposal to adopt

CS DRGs. We acknowledged the many co mments suggesting the logic of Medicare's

DRG system should continue to remain in the public domain as it has since the inception

of the PPS. We also acknowledged concerns about the impact on hospitals and software

vendors of moving to a proprietary system . Several commenters suggested that CMS

refine the existing DRG classification system to preserve the many policy decisions that

were made over the last 20 years and were already incorporated into the DRG system,

such as complexity of services and new device technologies. Consistent with the

concerns expressed in the public comments, this option had the advantage of using the

existing DRGs as a starting point (which wa s already familiar to the public) and retained

the benefit of many DRG decisions that were made in recent years. We stated our belief

that the suggested approach of incorporatin g severity measures into the existing DRG

system was a viable option that would be evaluated.

Therefore, we decided to make interim changes to the existing DRGs for FY 2007

by creating 20 new DRGs involving 13 different clinical areas that would significantly

improve the CMS DRG system’s recognition of severity of illness. We also modified

32 DRGs to better capture differences in se verity. The new and revised DRGs were

selected from 40 existing CMS DRGs that contained 1,666,476 cases and represented a

number of body systems. In creating thes e 20 new DRGs, we deleted 8 existing DRGs

and modified 32 existing DRGs. We indicated that these interim steps for FY 2007 were

being taken as a prelude to more comprehens ive changes to better account for severity in

the DRG system by FY 2008.CMS-1498-P 68

In the FY 2007 IPPS final rule (71 FR 47898), we indicated our intent to pursue

further DRG reform through two initiatives. First, we announced that we were in the

process of engaging a contractor to assist us with evaluating alternative DRG systems

that were raised as potential alternatives to the CMS DRGs in the public comments.

Second, we indicated our intent to review over 13,000 ICD-9-CM diagnosis codes as part

of making further refinements to the current CMS DRGs to better recognize severity of

illness based on the work that CMS (then HCFA) did in the mid-1990’s in connection

with adopting severity DRGs. We describe below the progress we have made on these

two initiatives and our actions for FY s 2008, 2009, and 2010, and our proposals for

FY 2011 based on our continued analysis of refo rm of the DRG system. We note that the

adoption of the MS-DRGs to better recognize severity of illness has implications for the

outlier threshold, the application of the postacute care transfer policy, the measurement of

real case-mix versus appare nt case-mix, and the IME and DSH payment adjustments.

We discuss these implications for FY 2011 in ot her sections of this preamble and in the

Addendum to this proposed rule.

In the FY 2007 IPPS proposed rule, we discussed MedPAC’s recommendations to

move to a cost-based HSRV weighting methodology using HSRVs beginning with the

FY 2007 IPPS proposed rule for determining the DRG relative weights. Although we

proposed to adopt the HSRV weighting me thodology for FY 2007, we decided not to

adopt the proposed methodology in the final rule after considering the public comments

we received on the proposal. Instead, in the FY 2007 IPPS final rule, we adopted a

cost-based weighting methodology without the HSRV portion of the proposedCMS-1498-P 69

methodology. The cost-based weights were adopted over a 3-year transition period in

1/3 increments between FY 2007 and FY 2009. In addition, in the FY 2007 IPPS final

rule, we indicated our intent to further study the HSRV-based methodology as well as

other issues brought to our attention related to the cost-based weighting methodology

adopted in the FY 2007 final rule. There wa s significant concern in the public comments

that our cost-based weighting methodology does not adequately account for charge

compression--the practice of applying a high er percentage charge markup over costs to

lower cost items and services and a lower per centage charge markup over costs to higher

cost items and services. Further, public commenters expressed concern about potential

inconsistencies between how co sts and charges are reported on the Medicare cost reports

and charges on the Medicare claims. In the FY 2007 IPPS final rule, we used costs and

charges from the cost report to determine departmental level cost-to-charge ratios (CCRs)

which we then applied to charges on the Medicare claims to determine the cost-based

weights. The commenters were concerned about po tential distortions to the cost-based

weights that would result from inconsistent reporting between the cost reports and the

Medicare claims. After publication of the FY 2007 IPPS final rule, we entered into a

contract with RTI International (RTI) to study both charge compression and to what

extent our methodology for calculating DR G relative weights is affected by

inconsistencies betwee n how hospitals report costs and charges on the cost reports and

how hospitals report charges on individual cla ims. Further, as part of its study of

alternative DRG systems, the RAND Corpor ation analyzed the HSRV cost-weighting

methodology. We refer readers to section II.E . of the preamble of this proposed rule forCMS-1498-P 70

discussion of the issue of charge compre ssion and the cost-weighting methodology for

FY 2011.

We believe that revisions to the DRG sy stem to better recognize severity of

illness and changes to the relative weights based on costs rather than charges are

improving the accuracy of the payment rates in the IPPS. We agree with MedPAC that

these refinements should be pursued. Alt hough we continue to caution that any

prospective payment system based on gr ouping cases will always present some

opportunities for providers to sp ecialize in cases they believe have higher margins, we

believe that the changes we have adopted a nd the continuing reforms we are proposing to

make in this proposed rule for FY 2011 will improve payment accuracy and reduce

financial incentives to create specialty hospitals.

We refer readers to section II.D. of the FY 2008 IPPS final rule with comment

period for a full discussion of how the MS -DRG system was established based on

severity levels of illness (72 FR 47141).CMS-1498-P 71

D. Proposed FY 2011 MS-DRG Documentati on and Coding Adjustment, Including the

Applicability to the Hospital-Specific Rates and the Puerto Rico-Specific Standardized

Amount

1. Background on the Prospective MS-DRG Do cumentation and Coding Adjustments for

FY 2008 and FY 2009 Authorized by Pub. L. 110-90

As we discussed earlier in this pr eamble, we adopted the MS-DRG patient

classification system for the IPPS, effectiv e October 1, 2007, to better recognize severity

of illness in Medicare payment rates for acu te care hospitals. The adoption of the

MS-DRG system resulted in the expansion of the number of DRGs from 538 in FY 2007

to 745 in FY 2008. (Currently, there are 746 DRGs for FY 2010; there would be 747

DRGs in FY 2011, with our proposals in this pr oposed rule to delete one MS-DRG and to

create two new MS-DRGs.) By increasing the number of MS-DRGs and more fully

taking into account patients’ severity of illness in Medicare payment rates for acute care

hospitals, MS-DRGs encourage hospitals to improve their documentation and coding of

patient diagnoses. In the FY 2008 IPPS final rule with comment period (72 FR 47175

through 47186), we indicated that the adoption of the MS-DRGs had the potential to lead

to increases in aggregate payments without a corresponding increase in actual patient

severity of illness due to the incentives for additional documentation and coding. In that

final rule with comment period, we exercised our authority under

section 1886(d)(3)(A)(vi) of the Act, which au thorizes us to maintain budget neutrality

by adjusting the national standardized am ount, to eliminate the estimated effect of

changes in coding or classification that do not reflect real changes in case-mix. OurCMS-1498-P 72

actuaries estimated that maintaining budget neutrality required an adjustment of

-4.8 percent to the national standardized amount. We provided for phasing in this

-4.8 percent adjustment over 3 years. Sp ecifically, we established prospective

documentation and coding ad justments of -1.2 percent for FY 2008, -1.8 percent for

FY 2009, and -1.8 percent for FY 2010.

On September 29, 2007, Congress enact ed the TMA [Transitional Medical

Assistance], Abstinence Education, and QI [Q ualifying Individuals] Programs Extension

Act of 2007, Pub. L. 110-90. Section 7(a) of Pub. L. 110-90 reduced the documentation

and coding adjustment made as a result of the MS-DRG system that we adopted in the

FY 2008 IPPS final rule with comment period to -0.6 percent for FY 2008 and

-0.9 percent for FY 2009. Section 7(a) of Pub. L. 110-90 did not adjust the FY 2010

-1.8 percent documentation and coding adjustment promulgated in the FY 2008 IPPS

final rule with comment period. To comply with section 7(a) of Pub. L. 110-90, we

promulgated a final rule on November 27, 2007 (72 FR 66886) that modified the IPPS

documentation and coding adjustment for FY 2008 to -0.6 percent, and revised the

FY 2008 payment rates, factors, and threshol ds accordingly. These revisions were

effective on October 1, 2007.

For FY 2009, section 7(a) of Pub. L. 110 -90 required a documen tation and coding

adjustment of -0.9 percent instead of the -1.8 percent adjustment established in the

FY 2008 IPPS final rule with comment period. As discussed in the FY 2009 IPPS final

rule (73 FR 48447) and required by statute, we applied a documentation and coding

adjustment of -0.9 percent to the FY 2009 IPPS national standardized amount. TheCMS-1498-P 73

documentation and coding adjustments established in the FY 2008 IPPS final rule with

comment period, as amended by Pub. L. 110-90, are cumulative. As a result, the

-0.9 percent documentation and coding adjustment for FY 2009 was in addition to the

-0.6 percent adjustment for FY 2008, yielding a combined effect of -1.5 percent.

2. Prospective Adjustment to the Average Standardized Amounts Required by

Section 7(b)(1)(A) of Pub. L. 110-90

Section 7(b)(1)(A) of Pub. L. 110-90 requi res that, if the Secretary determines

that implementation of the MS–DRG system resulted in changes in documentation and

coding that did not reflect real changes in case-mix for discharges occurring during FY

2008 or FY 2009 that are different than th e prospective documentation and coding

adjustments applied under section 7(a) of Pub. L. 110-90, the Secretary shall make an

appropriate adjustment unde r section 1886(d)(3)(A)(vi) of the Act. Section

1886(d)(3)(A)(vi) of the Act authorizes adju stments to the average standardized amounts

for subsequent fiscal years in order to eliminat e the effect of such coding or classification

changes. These adjustments are intended to ensure that future annual aggregate IPPS

payments are the same as the payments that otherwise would have been made had the

prospective adjustments for documentation and coding applied in FY 2008 and FY 2009

reflected the change that occurred in those years.

3. Recoupment or Repayment Adjustment s in FYs 2010 through 2012 Required by

Pub. L. 110-90

If, based on a retroactive evaluation of cl aims data, the Secretary determines that

implementation of the MS–DRG system resulte d in changes in documentation and codingCMS-1498-P 74

that did not reflect real changes in case-mix for discharges occurring during FY 2008 or

FY 2009 that are different from the prospec tive documentation and coding adjustments

applied under section 7(a) of Pub. L. 110 -90, section 7(b)(1)(B) of Pub. L. 110-90

requires the Secretary to make an additiona l adjustment to the standardized amounts

under section 1886(d) of the Act. This adjus tment must offset the estimated increase or

decrease in aggregate payments for FY s 2008 and 2009 (including interest) resulting

from the difference between the estimated act ual documentation and coding effect and

the documentation and coding adjustment a pplied under section 7(a) of Pub. L. 110-90.

This adjustment is in addition to making an appropriate adjustment to the standardized

amounts under section 1886(d)(3)(A)(vi) of the Act as required by section 7(b)(1)(A) of

Pub. L. 110-90. That is, these adjustments are intended to recoup (or repay) spending in

excess of (or less than) spending that w ould have occurred had the prospective

adjustments for changes in documentation and coding applied in FY 2008 and FY 2009

precisely matched the changes that occurred in those years. Pub. L. 110-90 requires that

the Secretary make these recoupment or repa yment adjustments for discharges occurring

during FYs 2010, 2011, and 2012.

4. Retrospective Evaluati on of FY 2008 Claims Data

In order to implement the requireme nts of section 7 of Pub. L. 110-90, we

indicated in the FY 2009 IPPS final rule (73 FR 48450) that we planned a thorough

retrospective evaluation of our cl aims data. We stated that the results of this evaluation

would be used by our actuar ies to determine any necessary payment adjustments to the

standardized amounts under section 1886(d) of th e Act to ensure the budget neutrality ofCMS-1498-P 75

the MS-DRGs implementation for FY 2008 and FY 2009, as required by law. In the

FY 2009 IPPS proposed rule (73 FR 23541 through 23542), we described our preliminary

plan for a retrospective analysis of inpatient hospital claims data and invited public input

on our proposed methodology.

In that proposed rule, we indicated that we intended to measure and corroborate

the extent of the overall national average ch anges in case-mix for FY 2008 and FY 2009.

We expected that the two largest parts of this overall national average change would be

attributable to underlying changes in ac tual patient severity of illness and to

documentation and coding imp rovements under the MS-DRG system. In order to

separate the two effects, we planned to isolat e the effect of shifts in cases among base

DRGs from the effect of shifts in the types of cases within-base DRGs.

The MS-DRGs divide the base DRGs into three severity levels (with MCC, with

CC and without CC); the previously used CMS DRGs had only two severity levels (with

CC and without CC). Under the CMS DRG syst em, the majority of hospital discharges

had a secondary diagnosis which was on the CC list, which led to the higher severity

level. The MS-DRGs significantly changed the code lists of what was classified as an

MCC or a CC. Many codes that were prev iously classified as a CC are no longer

included on the MS-DRG CC list because the data and clinical review showed these

conditions did not lead to a significant increa se in resource use. The addition of a new

level of high severity conditions, the MCC li st, also provided a new incentive to code

more precisely in order to increase the severity level. We anticipated that hospitals

would examine the MS-DRG MCC and CC code lists and then work with physicians andCMS-1498-P 76

coders on documentation and codi ng practices so that coders could appropriately assign

codes from the highest possible severity level. We note that there have been numerous

seminars and training sessions on this particular coding issue. The topic of improving

documentation practices in orde r to code conditions on the MCC list was also discussed

extensively by participants at the Ma rch 11-12, 2009 ICD-9-CM Coordination and

Maintenance Committee meeting. Participants discussed their hospitals’ efforts to

encourage physicians to provide more preci se documentation so that coders could

appropriately assign c odes that would lead to a higher severity level. Because we

expected most of the documentation and coding changes under the MS-DRG system

would occur in the secondary diagnoses, we believed that the shifts among base DRGs

were less likely to be the result of the MS-DRG system and the shifts within-base DRGs

were more likely to be the result of the MS-DRG system. We also anticipated evaluating

data to identify the specific MS-DRGs and diag noses that contributed significantly to the

documentation and coding payment effect and to quantify their impact. This step entailed

analysis of the secondary diagnoses driving the shifts in severity within specific base

DRGs.

In that same proposed rule, we also stat ed that, while we be lieved that the data

analysis plan described previously would produce an appropriate estimate of the extent of

case-mix changes resulting from documentation and coding changes, we might decide, if

feasible, to use historical data from our Hospital Payment Monitoring Program (HPMP)

to corroborate the within-base DRG shift an alysis. The HPMP is supported by the

Medicare Clinical Data Abstraction Center (CDAC).CMS-1498-P 77

In the FY 2009 IPPS proposed rule, we solicited public comments on the analysis

plans described above, as well as suggestions on othe r possible approaches for

performing a retrospective analysis to identify the amount of case-mix changes that

occurred in FY 2008 and FY 2009 that did not re flect real increases in patients' severity

of illness.

A few commenters, including MedPAC , expressed support for the analytic

approach described in the FY 2009 IPPS proposed rule. A number of other commenters

expressed concerns about certa in aspects of the approach and/or suggested alternate

analyses or study designs. In add ition, one commenter recommended that any

determination or retros pective evaluation by the actuaries of the impact of the MS-DRGs

on case-mix be open to public scrutiny prior to the implementation of the payment

adjustments beginning in FY 2010.

We took these comments into consider ation as we developed our proposed

analysis plan and in the FY 2010 IPPS/RY 2010 LTCH PPS proposed rule (74 FR 24092

through 24101) solicited public comment on our methodology and analysis. For the

FY 2010 IPPS/RY 2010 LTCH PPS proposed rule, we performed a retrospective

evaluation of the FY 2008 data for claims paid through December 2008. Based on this

evaluation, our actuaries dete rmined that implementation of the MS–DRG system

resulted in a 2.5 percent change due to documen tation and coding that did not reflect real

changes in case-mix for discharges occurring during FY 2008

In the analysis of data for that propos ed rule, we found that the within-base DRG

increases were almost entirely responsible for the case-mix change, supporting ourCMS-1498-P 78

conclusion that the 2.5 percent estimate was an accurate refl ection of the FY 2008 effect

of changes in documentation and coding und er the MS-DRG system. In fact, almost

every base DRG that was split into different severity levels under the MS-DRG system

experienced increases in the within-base DRGs. We then further analyzed the changes in

the within-base DRGs to determine which MS-DRGs had the highest contributions to this

increase. The results of the analysis for the proposed rule provide d additional support for

our conclusion that the proposed 2.5 percent estimate accurately reflected the FY 2008

increases in documentation and coding under the MS-DRG system. While we attempted

to use the CDAC data to distinguish real increase in case-mix growth from

documentation and coding in the overall case- mix number, we found aberrant data and

significant variation across the FY 1999 through FY 2007 analysis period. It was not

possible to distinguish changes in documen tation and coding from changes in real

case-mix in the CDAC data. Therefore, we concluded that the CDAC data would not

support analysis of real case-mix growth that could be used in our retrospective

evaluation of the FY 2008 claims data.

In the FY 2010 IPPS/RY 2010 LTCH PPS final rule (74 FR 43768 through

43772), we responded to comment s on our methodology for the retrospective evaluation

of FY 2008 claims data. Comme nters raised concerns that CMS' estimate in the proposed

rule did not fully consider other potential caus es of increased case-mix, such as patients

requiring less complex services receiving care in other settings and “healthier” patients

enrolling in Medicare Advantage plans in increasing numbers. Other commenters

indicated that factors such as the changes in the CC/MCC definitions, limitations on theCMS-1498-P 79

number of codes used by CMS for payment and ratesetting, reseque ncing of secondary

diagnoses, the transition to the cost-based we ights, less use of "not otherwise specified"

codes, and increases in real case-mix due to health reform efforts also resulted in an

inaccurate documentation and coding analysis. One commenter indicated that, of the

overall case-mix increase, 1.0 percent to 1.5 pe rcent is “real” case-mix increase, while 1.0

percent to 1.5 percent is due to documen tation and coding or other increases.

In considering these comments concerning historical real case-mix, in the

FY 2010 final rule, we calculated overall in creases in case-mix for the period from

FY 2000 to FY 2007 using the cases from ea ch year and the GROUPER and relative

weights applicable for each year. The results are shown in the following chart:

Overall Case-Mix Increases for FY 2000 to FY 2007

Year Overall Case-Mix Change From Prior

Year (in percent) FY 2000 -0.7% FY 2001 -0.4% FY 2002 1.0% FY 2003 1.4% FY 2004 1.0% FY 2005 0.9% FY 2006 1.2% FY 2007 -0.2%

Overall case-mix growth is predominat ely comprised of three factors: real

case-mix growth; a documentation and coding effect; and a measurement effect. Under

the reasonable assumption that there has been a relatively small measurement effect in

those years, the assertion that there is a hi storical pattern of steady annual increases ofCMS-1498-P 80

1.2 to 1.3 percent in real case-mix implies that the documentation and coding effect in

many of those years was negative. For exampl e, as discussed in that rule (74 FR 43769),

we estimated a recent measurem ent effect of +0.3 percent. The overall case-mix growth

of -0.2 percent in FY 2007 net of a measuremen t effect of +0.3 percent results in growth

of +0.1 percent. A real case-mix growth of +1.2 percent in FY 2007, therefore, implies a

negative documentation and coding effect of approximately -1.1 percent. It is not

obvious why documentation and coding would have had such a large negative effect in

FY 2007, or in any other year where the overall case-mix change is significantly less than

the commenter’s claimed average annual tre nd, calling into question the assertion that

real case-mix growth is a steady 1.2 to 1.3 percent per year.

In the FY 2010 IPPS/RY 2010 LTCH PPS final rule (74 FR 43770 through

43771), we indicated that our estimate of th e overall case-mix growth for FY 2008 based

on more recent data than the data used in th e FY 2010 proposed rule was 2.0 percent, still

less than our actuaries’ estimate of a 2.5 per cent documentation and coding increase.

With respect to the concerns raised by co mmenters about our finding of negative real

case-mix growth in FY 2008, a finding of negative real case-mix growth is consistent

with the fact that, in some years, overall ca se-mix growth has been negative, as shown in

the chart presented above in this response.

5. Retrospective Analysis of FY 2009 Claims Data

We performed the same analysis for FY 2009 claims data using the same

methodology as we did for FY 2008 claims in the FY 2010 final rule. We first divided

the case-mix index (CMI) obtained by grouping the FY 2009 claims data through theCMS-1498-P 81

FY 2009 GROUPER (Version 26.0) by the CMI obtained by grouping these same

FY 2009 claims through the FY 2007 GROUPER (Version 24.0). This resulted in a

value of 1.056. Because these cases are the same FY 2009 cases grouped using the

Versions 24.0 and 26.0 of the GROUPER, we a ttribute this increase primarily to two

factors: (1) the effect of changes in documentation and coding under the MS-DRG

system; and (2) the measurement effect from the calibration of the GROUPER. We

estimated the measurement effect from the ca libration of the GROUPER by dividing the

CMI obtained by grouping cases in the FY 2007 claims data through the FY 2009

GROUPER by the CMI obtained by grouping cas es in these same claims through the

FY 2007 GROUPER. This resulted in a va lue of 1.0019. In order to isolate the

documentation and coding effect, we then divi ded the combined effect of the changes in

documentation and coding and measurement ( 1.056) by the measurement effect (1.0019)

to yield 1.054. Therefore, our estimate of th e documentation and coding increase that did

not reflect real changes in case-mix for discharges was 5.4 percent.

We then sought to corroborate this 5.4 percent estimate by examining the

increases in the within-base DRGs as compared to the increases in the across base DRGs

as described earlier in our analysis plan. In other words, we looked for improvements in

code selection that would lead to a secondar y diagnosis increasing the severity level to

either a CC or an MCC level. We found that the within-base DRG increases were almost

entirely responsible for the case mix change, supporting our conclusion that the

5.4 percent estimate was an ac curate reflection of the FY 2009 effect of changes in

documentation and coding under the MS-DRG sy stem. We then further analyzed theCMS-1498-P 82

changes in the within-base DRGs to determine which MS-DRGs had the highest

contributions to this increase. The results of the analysis for the proposed rule provided

additional support for our conclusion that th e proposed 5.4 percent estimate accurately

reflected the FY 2009 increases in documenta tion and coding under the MS-DRG system.

As reflected in the above chart, for sh ort-term acute care hospitals, SCHs, and

MDHs, there is an 8 percentage point increase in the discharge severity with MCCs from

20 percent to 28 percent, and a corresponding decrease of 8 percentage points in

discharge severity without CC/MC C from 57 percent to 49 percent.

Consistent with the expectations of our medical coding experts concerning areas

with potential for documentation and coding improvements, the top contributors were

heart failure, chronic obstructive pulmonary di sease, and simple pneumonia and pleurisy.

Heart failure is a very common seconda ry diagnosis among Medicare hospital

admissions. The heart failure codes are assigned to all three severity levels. Some codesCMS-1498-P 83

are classified as non-CCs, while other codes are on the CC and MCC lists. By changing

physician documentation to more precisely identify the type of heart failure, coders are

able to appropriately change the severity leve l of cases from the lowest level (non-CC) to

a higher severity level (CC or MCC). Th is point was stressed repeatedly at the

March 11-12, 2009 ICD-9-CM Coordination and Maintenance Committee meeting as

coders discussed their work with physicia ns on this coding issue. Many of the

participants indicated that additional work was still needed with their physicians in order

to document conditions in the medical record more precisely.

The results of the analysis for the pr oposed rule provided additional support for

our conclusion that the proposed 5.4 percent estimate accurately reflected the FY 2009

increases in documentation and c oding under the MS-DRG system.

As in prior years, the FY 2008 and FY 2009 MedPAR files are available to the

public to allow independent analysis of the FY 2008 and FY 2009 documentation and

coding effect. Interested i ndividuals may still order these files through the Web site at:

http://www.cms.hhs.gov/LimitedDataSets/ by clicking on MedPAR Limited Data Set

(LDS)-Hospital (National). This Web page de scribes the file and pr ovides directions and

further detailed instructions for how to order.

Persons placing an order must send th e following: a Letter of Request, the LDS

Data Use Agreement and Research Protoc ol (refer to the Web site for further

instructions), the LDS Form, and a check for $3,655 to:

Mailing address if using the U.S. Postal Service:

Centers for Medicare & Medicaid Services,CMS-1498-P 84

RDDC Account,

Accounting Division,

P.O. Box 7520,

Baltimore, MD 21207-0520.

Mailing address if using express mail:

Centers for Medicare & Medicaid Services,

OFM/Division of Accounting – RDDC,

7500 Security Boulevard, C3-07-11,

Baltimore. MD 21244-1850.

6. Prospective Adjustment for FY 2010 and Subsequent Years Authorized by Section

7(b)(1)(A) of Pub. L. 110-90 and Section 1886(d)(3)(vi) of the Act

Based on our evaluation of FY 2008 Medicare claims data that were most current

at the time of the FY 2010 IPPS/RY 2010 LTCH PPS proposed rule, the estimated

2.5 percent change in FY 2008 case-mix due to changes in documentation and coding

that did not reflect real changes in case- mix for discharges occurring during FY 2008

exceeded the -0.6 percent prospective docum entation and coding adjustment applied

under section 7(a) of Pub. L. 110-90 by 1.9 per centage points. Under section 7(b)(1)(A)

of Pub. L. 119-90, the Secretary is required to make an appropriate adjustment under

section 1886(d)(3)(A)(vi) of the Act to the av erage standardized amounts for subsequent

fiscal years in order to eliminate the full effect of the documentation and coding changes

on future payments. As we have consistently stated since the initial implementation of

the MS-DRG system, we do not believe it is appropriate for expenditures to increase dueCMS-1498-P 85

to MS-DRG-related changes in documentation an d coding that do not reflect real changes

in case-mix.

We also estimated in the FY 2010 IPPS/RY 2010 LTCH PPS proposed rule that

the additional change in case-mix due to ch anges in documentation and coding that do

not reflect real changes in case-mix for discharges occurring during FY 2009 was

2.3 percent, which would exceed by 1.4 percen tage points the -0.9 percent prospective

documentation and coding adjustment for FY 2009 applied under section 7(a) of

Pub. L. 100-90. We had the statutory authority to adjust the FY 2010 rates for this

estimated 1.4 percentage point in crease. However, given th at Pub. L. 100-90 requires a

retrospective claims evaluation for the additional adjustments (as described in section

II.D.3. of this preamble), we stated in the FY 2010 IPPS/RY 2010 LTCH PPS proposed

rule and final rule (74 FR 24096 and 43772, resp ectively) that we believed our evaluation

of the extent of the overall national average changes in case-mix for FY 2009 should also

be based on a retrospective ev aluation of all FY 2009 claims data. Because we did not

receive all FY 2009 claims data prior to publication of the FY 2010 final rule, we

indicated we would address any difference between the additional increase in FY 2009

case-mix due to changes in documentation and co ding that did not reflect real changes in

case-mix for discharges occurring during FY 2009 and the -0.9 percent prospective

documentation and coding adjus tment applied under section 7( a) of Pub. L. 110-90 in the

FY 2011 rulemaking cycle.

In the FY 2010 IPPS/RY 2010 LTCH PPS proposed rule (74 FR 24096), we

solicited public comment on the proposed -1.9 percent prospective adjustment to theCMS-1498-P 86

standardized amounts under section 1886(d) of the Act to address the effects of

documentation and coding changes unrelated to changes in real case-mix in FY 2008. In

addition, we solicited public co mments on addressing in the FY 2011 rulemaking cycle

any differences between the increase in FY 2009 case-mix due to changes in

documentation and coding changes that do not reflect real changes in case-mix for

discharges occurring during FY 2009 and the -0.9 percent prospective documentation and

coding adjustment applied unde r section 7(a) of Pub. L. 110-90. In response to the

proposed rule, MedPAC summarized its co mments on when CMS should reduce payment

rates to prevent further overpayments and to recover overpayments occurring in 2008 and

2009 as follows: "We support CMS’s proposal to reduce IPPS payments in 2010 by

1.9 percent to prevent further overpayments. While we and the CMS actuaries believe

that a 1.9 percent reduction will not fully pr event overpayments from continuing in 2010,

this is a reasonable first step toward re ducing overpayments.” Most of the other

commenters opposed the proposed -1.9 percen t prospective FY 2010 adjustment for

FY 2008 documentation and coding increases, but supported the proposal not to apply a

FY 2010 prospective adjustment for es timated FY 2009 documentation and coding

increases. Many commenters expressed concern over the financial impact of the

proposed -1.9 percent adjustment and the me thodology for calculating the adjustment.

Other commenters recommended that CMS seek to extend the timeframe beyond 2 years

to phase in the estimated -6.6 percent ad justment to the standardized amount.

In the final FY 2010 IPPS/RY 2010 LTCH PPS rule in response to these

commenters, we indicated that we fully und erstood that our proposed adjustment ofCMS-1498-P 87

-1.9 percent would reduce the increase in pa yments that affected hospitals would have

received in FY 2009 in the absence of the ad justment. We explained that, although we

are required to make an prospective adjustment to eliminate the full effect of coding or

classification changes that di d not reflect real changes in case-mix for discharges

occurring during FY 2008, we believed we had some discretion regarding when to

implement this adjustment. Section 7(b)(1 )(A) of Pub. L. 110-90 requires that if the

Secretary determines that implementation of the MS-DRG system resulted in changes in

documentation and coding that did not reflect real changes in case-mix for discharges

occurring during FY 2008 or FY 2009 that are different than the prospective

documentation and coding adju stments applied under secti on 7(a) of Pub. L. 110-90, the

Secretary shall make an “appropriate” adjus tment under section 1886(d)(3)(A)(vi) of the

Act.

Thus, we determined that it would be appropriate to postpone adopting

documentation and coding adjustments as auth orized under section 7(a) of Pub. L. 110-90

and section 1886(d)(3)(A)(vi) of the Act until a full analysis of case-mix changes could

be completed. We indicated that while we had the statutory authority to make this

-1.9 percent prospective adjustment entirely in FY 2010, we believed it would be prudent

to wait until we had completed data on the magnitude of the documentation and coding

effect in FY 2009. Specifically, we stated that if the documentation and coding effect

were to be less in FY 2009 than our then-current estimates, it could lessen the anticipated

adjustment that we had estima ted we would have had to make for FY 2008 and FY 2009

combined. We indicated that, in future rulemaking, we would consider applying aCMS-1498-P 88

prospective adjustment based upon a complete analysis of FY 2008 and FY 2009 claims

data, beginning in FY 2011. We indicated that we intended to address any difference

between the increase in FY 2009 case-mix due to changes in documentation and coding

that did not reflect real changes in case-mix for discharges occurring during FY 2009 and

the -0.9 percent prospective documentati on and coding adjustment applied under

section 7(a) of Pub. L. 110-90 in the FY 2011 rulemaking cycle.

After analysis of the FY 2009 claims data, we have found a total prospective

documentation and coding effect of 1.054. Af ter accounting for the -0.6 percent and the

-0.9 percent documentation and coding ad justments in FYs 2008 and 2009, we find a

remaining documentation and coding effect of 3.9 percen t. As we have discussed, an

additional cumulative adjustme nt of -3.9 percent would be necessary to meet the

requirements of section 7(b)(1 )(A) of Pub. L. 110-90 to make an adjustment to the

average standardized amounts in order to eliminate the full effect of the documentation

and coding changes on future payments. Unlike section 7(b)(1)(B) of Pub. L. 110-90,

section 7(b)(1)(A) does not specify when we must apply the prospective adjustment, but

merely requires us to make an “appropriate” ad justment. Therefore, we believe we have

some discretion as to the manner in which we apply the prospective adjustment of

-3.9 percent. Applying the full prospectiv e adjustment of -3.9 percent for FY 2011, in

combination with the proposed recoupment adju stment of -2.9 percent, discussed below,

would require an aggregate adjustment of -6.8 percent. As we discuss more fully below,

it has been our practice to moderate paymen t adjustments when necessary to mitigate the

effects of significant downward adjustment s on hospitals, to avoid what could beCMS-1498-P 89

widespread, disruptive effects of such adju stments on hospitals. As we also discuss

below, we are required to implement the adju stment in section 7(b)(1)(B) of Pub. L.

110-90 no later than FY 2012, and accordingly, we are proposing an adjustment under

that section for FY 2011. Therefore, we belie ve it is appropriate to not implement any or

all of the -3.9 percent prospective adjustme nt in FY 2011. Accordingly, we are not

proposing a prospective adjustment under s ection 7(b)(1)(A) of Pub. L. 110-90 for

FY 2011. We note that, as a result, payments in FY 2011 (and in each future year until

we implement the requisite ad justment) will be 3.9 percent hi gher than they would have

been if we had implemented an adjustme nt under section 7(b)(1)(A) of Pub. L. 110-90.

We are seeking public comment on our proposal not to apply in FY 2011 the

-3.9 percent prospective adjustment to th e average standardized amounts required under

section 7(b)(1)(A) of Pub. L. 110-90 in orde r to eliminate the full effect of the

documentation and coding changes on future payments. We note that this proposal

would require us to apply the -3.9 percent adju stment in future payment years, which may

be applied all at once in a sing le year or phased in over more than one year. We intend to

update our analysis with FY 2009 data on claims paid through March 2009 for the

FY 2011 IPPS/LTCH PPS final rule.

7. Recoupment or Repayment Adjustment for FY 2010 Authorized by Section 7(b)(1)(B)

of Pub. L. 110-90

As indicated in the FY 2010 IPPS/RY 2010 LTCH PPS final rule (74 FR 43773),

we estimated a 2.5 percent change (estimated fro m analysis of more recent data for the

FY2010 final rule than the data used for th at proposed rule) due to documentation andCMS-1498-P 90

coding that did not reflect real changes in case-mix for discharges occurring during

FY 2008, exceeding the -0.6 percent prospectiv e documentation and coding adjustment

applied under section 7(a) of P ub. L. 110-90 by 1.9 percentage points. We stated that our

actuaries had estimated that this 1.9 percentage point increase resulted in an increase in

aggregate payments of approximately $2.2 billion. As described earlier, section

7(b)(1)(B) of Pub. L. 110-90 requires an adjustment for discharges occurring in

FYs 2010, 2011, and/or 2012 to offset the estimate d amount of this increase in aggregate

payments (including interest). Although s ection 7(b)(1)(B) of Pub. L. 110-90 requires us

to make this adjustment in FYs 2010, 2011, a nd/or 2012, we have discretion as to when

during this 3 year period we will apply the adjustment.

We did not propose to make an adjustment to the FY 2010 average standardized

amounts to offset, in whole or in part, the estimated increase in aggregate payments for

discharges occurring in FY 2008, but stated in the proposed rule that we intended to

address this issue in future rulemaking. That is, we stated that we would address

recouping the additional expenditures that occurred in FY 2008 as a result of the

1.9 percentage point difference between the actual changes in documentation and coding

that do not reflect real changes in case-mix (2.5 percent), and the - 0.6 percent adjustment

applied under Pub. L. 110-90 in FY 2011 and/ or FY 2012, as required by law. We

indicated that, while we had th e statutory authority to make this -1.9 percent recoupment

adjustment entirely in FY 2010, we were delaying the adjustment until FY 2011 and

FY 2012 because we did not yet have any da ta on the magnitude of the documentation

and coding effect in FY 2009. We stated th at as we have the authority to recoup theCMS-1498-P 91

aggregate effect of this 1.9 percentage point difference in FY 2008 IPPS payments in

FY 2011 or FY 2012 (with interest), delaying this adjustment would have no effect on

Federal budget outlays. We indicated that we intended to wait until we have a complete

year of data on the FY 2009 documentation and coding effect before applying a

recoupment adjustment for IPPS spending that occurred in FY 2008 or we estimate will

occur in FY 2009.

As discussed above, section 7(b)(1)(B) of Pub. L. 110-90 requires the Secretary to

make an adjustment to the standardized amounts under section 1886(d) of the Act to

offset the estimated increase or decrease in aggregate payments for FY 2009 (including

interest) resulting from the difference between the estimated actual documentation and

coding effect and the documentation and c oding adjustments app lied under section 7(a)

of Pub. L. 110-90. This deter mination must be based on a retrospective evaluation of

claims data. In the FY 2010 IPPS/RY 2010 LTCH PPS final rule (74 FR 43774), we

stated that because we would not receive all FY 2009 claims data prior to publication of

the final rule, we would address any increase or decrease in FY 2009 payments in future

rulemaking for FY 2011 and 2012 after we pe rform a retrospective evaluation of the

FY 2009 claims data. At that time, our actuari es estimated that this adjustment would be

approximately -3.3 perc ent. This reflected the difference between the estimated 4.8

percent cumulative actual documentation and coding changes for FY 2009 (2.5 percent

for FY 2008 and an additional 2.3 percent fo r FY 2009) and the cumulative -1.5 percent

documentation and coding adju stments applied under sec tion 7(a) of Pub. L. 110-90

(-0.6 percent in FY 2008 and -0.9 percent in FY 2009). We noted that the actualCMS-1498-P 92

adjustments were multiplicativ e and not additive. This estimated 4.8 percent cumulative

actual documentation and coding changes for FY 2009 included the impact of the

changes in documentation and coding first occurring in FY 2008 because we believed

hospitals would continue these changes in doc umentation and coding in subsequent fiscal

years. Consequently, we believed that th ese documentation and coding changes would

continue to impact payments under the IPPS ab sent a prospective adjustment to account

for the effect of these changes.

We note that, unlike the adjustment to the standardized amounts under section

7(b)(1)(A) of Pub. L. 110-90 described ear lier, any adjustment to the standardized

amounts under section 7(b)(1)(B) of Pub. L. 110-90 would not be cumulative, but would

be removed for subsequent fiscal years once we have offset the increase in aggregate

payments for discharges for FY 2008 expenditures and FY 2009 expenditures, if any.

In the FY 2010 IPPS/RY 2010 LTCH PPS proposed rule (74 FR 24096), we did

not propose to offset the 1.9 percent increase in aggregate payments (including interest)

for discharges occurring in FY 2008 resulting from the adoption of the MS-DRGs, but to

instead address this issue in fu ture rulemaking for FYs 2011 and 2012.

In response to the FY 2010 proposed rule, MedPAC stated in its comments on the

adjustment to the standardized amounts under section 7(b)(1)(B) of Pub. L. 110-90: “In

addition, it would be desirable for CMS to minimize year-to-year changes in payment

adjustments it must make to recover overpay ments that were made in 2008 and 2009. To

achieve this goal, CMS should consider sp reading the recovery of 2008 overpayments

over 3 years, beginning in 2010.” Some commenters recommended that CMS seek toCMS-1498-P 93

extend the timeframe beyond 2 years to phase in the estimated -6.6 percent adjustment to

the standardized amount. The commenters as ked CMS to seek necessary legislative

action to accommodate such a policy. Most commenters expressed concern with the

significant negative financial impacts that would be incurred by providers if CMS

adopted that proposed -1.9 percent document ation and coding adjustment in FY 2010.

The commenters cited providers’ already small or negative margins for Medicare

payments, and requested that CMS not furthe r reduce payments during the current period

of economic instability and reduced State f unding. Other commenters indicated that it

would be appropriate to dela y any adjustment to the standardized amounts under section

7(b)(1)(B) of Pub. L. 110-90 until after CM S has the opportunity to fully examine the

FY 2009 claims data.

In response to these comments in FY 2010, we indicated that we recognized that

any adjustment to account for the documenta tion and coding effect observed in the

FY 2008 and FY 2009 claims data may result in significant future payment reductions for

providers. However, we indicated that we are required under section 7(b)(1)(B) of

Pub. L. 110-90 to recapture the difference of actual documentation and coding effect in

FY 2008 and FY 2009 that is greater than the prior adjustments. We agreed with the

commenters who requested that CMS delay an y adjustment and, for the reasons stated

above, indicated that we expect to addre ss this issue in this FY 2011 rulemaking.

As indicated in section II.D.4. of this preamble, the change due to documentation

and coding that did not reflect real changes in case mix for discharges occurring during

FY 2008 and FY 2009 exceeded the -0.6 and -0.9 percent prospective documentation andCMS-1498-P 94

coding adjustment applied under section 7(a) of Public Law 110-90 for those 2 years

respectively by 1.9 percentage points in FY 2008 and 3.9 percentage points in FY 2009.

In total, this change exceeded the cumulative prospective adjustments by 5.8 percentage

points. Our actuaries currently estimate that this 5.8 percentage point increase resulted in

an increase in aggregate payments of appr oximately $6.9 billion. We note that there may

be a need to actuarially adjust the r ecoupment adjustment to accurately reflect

accumulated interest. Therefore, an aggreg ate adjustment of -5.8 percent in FYs 2011

and 2012, subject to actuarial adjustment to re flect accumulated interest, is necessary in

order to meet the requirements of section 7(b)(1)(B) of Pub. L. 110-90 to adjust the

standardized amounts for discharges occurri ng in FYs 2010, 2011, and/or 2012 to offset

the estimated amount of the increase in aggr egate payments (incl uding interest) in

FYs 2008 and 2009. We intend to take into acco unt the need to reflect accumulated

interest in proposing a recoupment adjustme nt under section (b)(1)(B) of Pub. L. 110-90

for FY 2012. We will invite comme nts on our proposal at that time.

It is often our practice to phase in rate adjustments over more than one year in

order to moderate the effect on rates in any one year. Therefore, consistent with the

policies we have adopted in many similar cases, we are proposing to make an adjustment

to the standardized amount of -2.9 percen t, representing approximately half of the

aggregate adjustment required under secti on 7(b)(1)(B) of Pub. L. 110-90, for FY 2011.

An adjustment of this magnitude allows us to moderate the effects on hospitals in one

year while simultaneously making it possible to implement the entire adjustment within

the timeframe required under section 7(b)(1 )(B) of Pub. L. 110-90. As we haveCMS-1498-P 95

previously noted, unlike the prospective ad justment to the standardized amounts under

section 7(b)(1)(A) of Pub. L. 110-90 describe d earlier, the recoupment or repayment

adjustment to the standardized amounts under section 7(b)(1)(B) of Pub. L. 110-90 is not

cumulative, but would be removed for subseque nt fiscal years once we have offset the

increase in aggregate payments for discharges for FY 2008 expenditures and FY 2009

expenditures. In keeping with our practice of moderating payment adjustments wherever

possible, we can anticipate that this proposal will have an additiona l, and significant,

moderating effect on implementing the requireme nts of section 7(b)(1)(B) of Pub. L.

110-90 for FY 2012. Specifically, an advantage of our proposal for FY 2011 is that we

anticipate removing this proposed FY 2011 - 2.9 percent adjustment from the rates in

FY 2012, when it would also be necessary und er current law to apply the remaining

approximately -2.9 percent adju stment required by section 7( b)(1)(B) of Pub. L. 110-90.

These two steps in FY 2012, restoring the FY 2011 -2.9 percent adjustment, and applying

the remaining adjustment of approximately -2.9 percent, would effectively cancel each

other out. The result would be an aggregat e adjustment of appr oximately 0.0 percent

(subject to the need to account for accu mulated interest, as discussed above) under

section 7(b)(1)(B) of Pub. L. 110-90 in FY 2012. However, while we are noting this

anticipated effect of our FY 2011 proposal, we are not making a formal proposal for the

further implementation of s ection 7(b)(1)(B) of Pub. L. 110-90 in FY 2012 in this

proposed rule.

We are seeking public comment on our pr oposal to offset part of the total

5.8 percent increase in aggregate payments (i ncluding interest) for discharges occurringCMS-1498-P 96

in FY 2008 and FY 2009 resulting from th e adoption of the MS-DRGs in FY 2011,

noting that this proposal would result in a - 2.9 percent adjustment to the standardized

amount. We intend to update our analysis with FY 2009 data on claims paid through

March 2009 for the FY 2011 IPPS/LTCH PPS final rule.

FY 2011 MS-DRG Documentation and Coding Adjustment

Required Prospective Adjustment for FYs 2008-2009 Required Recoupment Adjustment for FYs 2008-2009 Total Adjustment Proposed Recoupment Adjustment for FY 2011 Remaining Adjustment FY 2011 Proposal Amount of Adjustment -3.9 -5.8 -9.7 -2.9 -6.8

8. Background on the Application of the Docu mentation and Coding Adjustment to the

Hospital-Specific Rates

Under section 1886(d)(5)(D)(i) of the Act, SCHs are paid based on whichever of

the following rates yields the greatest aggregate payment: the Federal rate; the updated

hospital-specific rate based on FY 1982 costs pe r discharge; the updated hospital-specific

rate based on FY 1987 costs per discharge; the updated hospital-specific rate based on

FY 1996 costs per discharge; or the update d hospital-specific rate based on FY 2006

costs per discharge. Under section 1886(d)(5 )(G) of the Act, MDHs are paid based on

the Federal national rate or, if higher, the Federal national rate plus 75 percent of the

difference between the Federal national rate and the updated hos pital-specific rate based

on the greatest of the FY 1982, FY 1987, or FY 2002 costs per discharge. In the FY 2008

IPPS final rule with comment period (72 FR 47152 through 47188), we established aCMS-1498-P 97

policy of applying the documentation and c oding adjustment to the hospital-specific

rates. In that final rule with comment pe riod, we indicated that because SCHs and MDHs

use the same DRG system as all other hosp itals, we believe they should be equally

subject to the budget neutrality adjustment th at we are applying for adoption of the

MS-DRGs to all other hospitals. In estab lishing this policy, we relied on section

1886(d)(3)(A)(vi) of the Act, which provides us with the authority to adjust “the

standardized amount” to eliminate the effect of changes in codi ng or classification that do

not reflect real change in case-mix.

However, in the final rule that appeared in the Federal Register on

November 27, 2007 (72 FR 66886), we rescinded the applica tion of the documentation

and coding adjustment to the hospital-specifi c rates retroactive to October 1, 2007. In

that final rule, we indicated that, while we still believe it would be appropriate to apply

the documentation and coding adjustment to the hospital-specific rates, upon further

review, we decided that the application of the documentation and coding adjustment to

the hospital-specific rates is not consistent with the plain meaning of section

1886(d)(3)(A)(vi) of the Act, which only men tions adjusting “the standardized amount”

under section 1886(d) of the Ac t and does not mention adjusting the hospital-specific

rates.

In the FY 2009 IPPS proposed rule (73 FR 23540), we indicated that we

continued to have concerns about this i ssue. Because hospitals paid based on the

hospital-specific rate use the same MS-DRG sy stem as other hospita ls, we believe they

have the potential to realize increased paym ents from documentation and coding changesCMS-1498-P 98

that do not reflect real increases in patie nts' severity of illness. In section

1886(d)(3)(A)(vi) of the Act, Congress sti pulated that hospitals paid based on the

standardized amount should not receive add itional payments based on the effect of

documentation and coding changes that do not reflect real changes in case-mix.

Similarly, we believe that hos pitals paid based on the hosp ital-specific rates should not

have the potential to realize increased pa yments due to documentation and coding

changes that do not reflect real increases in patients' severity of illness. While we

continue to believe that s ection 1886(d)(3)(A)(vi) of the Act does not provide explicit

authority for application of the documen tation and coding adjustment to the

hospital-specific rates, we believe that we ha ve the authority to apply the documentation

and coding adjustment to the hospital-speci fic rates using our special exceptions and

adjustment authority under section 1886(d)(5)(I )(i) of the Act. The special exceptions

and adjustment provision authorizes us to provide “for such other exceptions and

adjustments to [IPPS] payment amounts * * * as the Secretary deems appropriate.” In the

FY 2009 IPPS final rule (73 FR 48448 through 48449), we indicated that, for the

FY 2010 rulemaking, we planned to examine our FY 2008 claims data for hospitals paid

based on the hospital-specific rate. We further indicated that if we found evidence of

significant increases in case-mix for patients treated in these hospitals that do not reflect

real changes in case-mix, we would consider proposing application of the documentation

and coding adjustments to the FY 2010 hosp ital-specific rates under our authority in

section 1886(d)(5)(I)(i) of the Act.CMS-1498-P 99

In response to public comments receive d on the FY 2009 IPPS proposed rule, we

stated in the FY 2009 IPPS final rule that we would consider whether such a proposal is

warranted for FY 2010. To gather informati on to evaluate these considerations, we

indicated that we planned to perform analyses on FY 2008 claims data to examine

whether there has been a significant increase in case-mix for hospitals paid based on the

hospital-specific rate. If we found that a pplication of the documentation and coding

adjustment to the hospital-specific rates for FY 2010 is warranted, we indicated that we

would include a proposal to do so in the FY 2010 IPPS proposed rule.

9. Proposed Documentation and Coding Adju stment to the Hospital-Specific Rates for

FY 2011 and Subsequent Fiscal Years

In the FY 2010 IPPS/RY 2010 LTCH proposed rule and final rule (74 FR 24098

through 24100 and 74 FR 43775 through 43776, respectively), we discussed our

performance of a retrospective evaluation of the FY 2008 claims data for SCHs and

MDHs using the same methodology described earlier for other IPPS hospitals. We found

that, independently for both SCHs and M DHs, the change due to documentation and

coding that did not reflect real changes in case-mix for discharges occurring during

FY 2008 slightly exceeded the proposed 2.5 perc ent result discussed earlier, but did not

significantly differ from that result.

Again, for the FY 2010 proposed rule, we found that the within-base DRG

increases were almost entirely responsible for the case-mix change. In that proposed

rule, we presented two Figures to display our results.CMS-1498-P 100

Therefore, consistent with our statements in prior IPPS rules, we proposed to use

our authority under section 1886(d)(5)(I)(i) of the Act to prospectively adjust the

hospital-specific rates by the proposed -2.5 percent in FY 2010 to account for our

estimated documentation a nd coding effect in FY 2008 that does not reflect real changes

in case-mix. We proposed to leave this adjus tment in place for subsequent fiscal years in

order to ensure that changes in documenta tion and coding resulting from the adoption of

the MS-DRGs do not lead to an increase in aggregate payments for SCHs and MDHs not

reflective of an increase in real case-mix. The proposed -2.5 percent adjustment to the

hospital-specific rates exceeded the -1.9 percen t adjustment to the national standardized

amount under section 7(b)(1)(A) of Pub. L. 110-90 because, unlike the national

standardized rates, the FY 2008 hospital-specific rates were not previously reduced in

order to account for anticipated changes in documentation and coding that do not reflect

real changes in case-mix resulting from the adoption of the MS-DRGs.

In the FY 2010 IPPS/RY 2010 LTCH PPS proposed rule (74 FR 24100), we

solicited public comment on the proposed -2.5 percent prospective adjustment to the

hospital-specific rates under section 1886(d)(5 )(I)(i) of the Act and our proposal to

address in the FY 2011 rulemaking cycle any changes in FY 2009 case-mix due to

changes in documentation and coding that do not reflect real changes in case-mix for

discharges occurring during FY 2009. We also indicated that we intended to update our

analysis with FY 2008 data on claims pa id through March 2008 [sic] for the FY 2010

IPPS final rule. (We note that the March 2008 update claims paid data date in the

proposed rule should have been March 2009.)CMS-1498-P 101

Consistent with our approach for IPPS hospitals discussed earlier, in the FY 2010

IPPS/RY 2010 LTCH PPS final rule, we also delayed adoption of a documentation and

coding adjustment to the hospital-specific ra te until FY 2011. Similar to our approach for

IPPS hospitals, we indicated that we would consider, through future rulemaking, phasing

in the documentation and coding adjustment over an appropriate period. We also

indicated that we would address, thro ugh future rulemaking, any changes in

documentation and coding that do not reflect real changes in case-mix for discharges

occurring during FY 2009. We noted that, un like the national standardized rates, the

FY 2009 hospital-specific rates were not previously reduced in order to account for

anticipated changes in documentation and coding that do not reflect real changes in casemix resulting from the adoption of the MS-DRGs. However, as we noted earlier with

regard to IPPS hospitals, if the estimated documentation and coding effect determined

based on a full analysis of FY 2009 claims data is more or less than our current estimates,

it would change, possibly lessen, the anticipated cumulative adjustments that we

currently estimate we would have to ma ke for the FY 2008 and FY 2009 combined

adjustment. Therefore, we believed that it would be more prudent to delay

implementation of the documentation and coding adjustment to allow for a more

complete analysis of FY 2009 claims data fo r hospitals receiving hospital-specific rates.CMS-1498-P 102

Consistent with our analysis of IPPS hospitals, the two charts above show that we

found after analysis of FY 2009 discharge data th at the distribution of severity dischargesCMS-1498-P 103

for MDH and SCH both proportionally shifte d from the without CC/MCC to with MCC

category. Similarly, we found using a methodology consistent with our analysis of IPPS

hospitals that, independently for both SCHs and MDHs, the change due to documentation

and coding that did not reflect real changes in case-mix for discharges occurring during

FY 2009 slightly exceeded the proposed 2.5 perc ent result discussed earlier, but did not

significantly differ from that result

As we have noted above, because SCHs and MDHs use the same MS-DRG

system as all other hospitals , we believe they have the potential to realize increased

payments from documentation and coding change s that do not reflect real increases in

patients' severity of illness. Therefore, we believe they should be equally subject to a

prospective budget neutrality adjustment th at we are applying for adoption of the

MS-DRGs to all other hospitals. We believe the documentation and coding estimates for

all subsection (d) hospitals should be the sa me. While the findings for the documentation

and coding effect for all IPPS hospitals are similar to the effect for SCHs and slightly

different to the effect for MDHs , we continue to believe that this is the appropriate policy

so as to neither advantage or disadvantage diff erent types of providers. As we have also

discussed above, our best estima te, based on the most recently available data, is that a

cumulative adjustment of -5.4 percent is re quired to eliminate the full effect of the

documentation and coding changes on future pa yments. Unlike the case of standardized

amounts paid to IPPS hospitals, we have not made any previous adjustments to the

hospital-specific rates paid to SCHs and M DHs to account for documentation and coding

changes. Therefore, the entire -5.4 percen t adjustment remains to be implemented.CMS-1498-P 104

As discussed above, we are proposing to ma ke an adjustment to the standardized

amount for IPPS hospitals of -2.9 percent unde r section 7(b)(1)(B) of Pub. L. 110-90, for

FY 2011. As we also discussed above, it ha s been our practice to moderate payment

adjustments when necessary to mitigate the ef fects of significant downward adjustments

on hospitals, to avoid what could be widespr ead, disruptive effects of such adjustments

on hospitals. Because payments for non-SCH and non-MDH IPPS hospitals and SCHs

and MDHs are determined on the basis of the same MS-DRG system, SCHs and MDHs

have the potential to realize increased paym ents from documentation and coding changes

that do not reflect real increases in patients' se verity of illness. Therefore, in determining

the level and pace of adjustments to account for such documentation and coding changes,

we believe that it is important to maintai n, as much as possible, both consistency and

equity among these classes of hospitals. In addition, as in the case of the documentation

and coding adjustment for non-SCH and non-MDH IPPS hospitals, we also believe that it

is important to provide as much as possibl e for moderating the effects of adjustments on

hospital payments. Therefore we are proposin g an adjustment of -2.9 percent in FY 2011

to the hospital-specific rates paid to SCHs a nd MDHs. This proposal is consistent with

our proposed adjustment for IPPS hospitals in two ways. First, as in the case of the IPPS

adjustment, we are not proposing to implement the entire adjustment that is warranted by

our data (in this case, 5.4 percent) in one year. Second, we are ma intaining consistency

by proposing the same numerical level of ad justment for both groups of hospitals in

FY 2011. While this proposed adjustment to the hospital-specific rates represents

somewhat over half of the of the entire adju stment that is appr opriate for SCHs andCMS-1498-P 105

MDHs, it allows us to maintain complete cons istency, at least for FY 2011, in the effects

on the relevant classes of hos pitals. Although the proposed adjustment for SCHs and

MDHs is cumulative and prospective, as opposed to the noncumulative recoupment

adjustment we are proposing for other IPPS hospitals, we believe that proposing equal

numerical adjustments in this first year is the most appropriate means to maintain such

consistency and equity at this time. We will continue, as much as possible, consistent

with sections 7(b)(1) of Pub. L. 110-90 and section 1886(d)(5)(I)(i) of the Act, to take

such consistency and equity into account in developing future proposals for

implementing documentation a nd coding adjustments.

We are seeking public comment on the proposed -2.9 percent prospective

adjustment to hospital-specific rates unde r section 1886(d)(5)(I)(i) of the Act and

addressing in future rule making cycles changes in FY 2008 and FY 2009 case-mix due

to changes in documentation and coding that do not reflect real changes in case-mix for

discharges occurring during FY 2008 and FY 2009, noting that our current estimates of

the remaining adjustment is -2.5 percent. We intend to update our analysis with FY 2009

data on claims paid through March 2009 for the FY 2011 IPPS/LTCH PPS final rule.

10. Background on the Application of the Docu mentation and Coding Adjustment to the

Puerto Rico-Specific Standardized Amount

Puerto Rico hospitals ar e paid based on 75 percent of the national standardized

amount and 25 percent of the Puerto Rico -specific standardiz ed amount. As noted

previously, the documentation and coding adjustment we adopted in the FY 2008 IPPS

final rule with comment pe riod relied upon our authority unde r section 1886(d)(3)(A)(vi)CMS-1498-P 106

of the Act, which provides the Secretary the au thority to adjust “the standardized amounts

computed under this paragraph'' to eliminat e the effect of changes in coding or

classification that do not refl ect real changes in case-mix. Section 1886(d)(3)(A)(vi) of

the Act applies to the nati onal standardized amounts co mputed under section 1886(d)(3)

of the Act, but does not apply to the Puerto Rico-specific standardized amount computed

under section 1886(d)(9)(C) of the Act. In calculating the FY 2008 payment rates, we

made an inadvertent error and applied the FY 2008 -0.6 percent documentation and

coding adjustment to the Puerto Rico-s pecific standardized amount, relying on our

authority under section 1886(d)(3)(A)(vi) of the Act. However, section

1886(d)(3)(A)(vi) of the Act authorizes application of a documentation and coding

adjustment to the national standardized amount and does not apply to the Puerto

Rico specific standardized amount. In the FY 2009 IPPS final rule (73 FR 48449), we

corrected this inadvertent error by removing the -0.6 percent documentation and coding

adjustment from the FY 2008 Puerto Rico-specific rates.

While section 1886(d)(3)(A)(vi) of the Act is not applicable to the Puerto

Rico-specific standardi zed amount, we believe that we ha ve the authority to apply the

documentation and coding adjustment to the Puerto Rico-specific standardized amount

using our special exceptions and adjustment authority under section 1886(d)(5)(I)(i) of

the Act. Similar to SCHs and MDHs that are paid based on the hospital-specific rate, we

believe that Puerto Rico hospitals that are paid based on the Puerto Rico-specific

standardized amount should not have the poten tial to realize increased payments due to

documentation and coding changes that do not re flect real increases in patients' severityCMS-1498-P 107

of illness. Consistent with the approach described for SCHs and MDHs, in the FY 2009

IPPS final rule (73 FR 48449), we indicated that we planned to examine our FY 2008

claims data for hospitals in Puerto Rico. We indicated in the FY 2009 IPPS proposed

rule (73 FR 23541) that if we found evidence of significant increases in case-mix for

patients treated in these hospitals, we w ould consider proposing application of the

documentation and coding adjustments to the FY 2010 Puerto Rico-specific standardized

amount under our authority in section 1886(d)(5)(I)(i) of the Act.

11. Proposed Documentation and Coding Ad justment to the Puerto Rico-Specific

Standardized Amount

For the FY 2010 IPPS/RY 2010 LTCH PPS proposed rule, we performed a

retrospective evaluation of the FY 2008 claims data for Puerto Rico hospitals using the

same methodology described earlier for IPPS hospitals paid under the national

standardized amounts under section 1886(d) of th e Act. We found that, for Puerto Rico

hospitals, the increase in payments for di scharges occurring during FY 2008 due to

documentation and coding that did not reflect real changes in case-mix for discharges

occurring during FY 2008 was approximately 1.1 percent. When we calculated the

within-base DRG changes and the across-base DRG changes for Puerto Rico hospitals,

we found that responsibility for the case-mix change between FY 2007 and FY 2008 is

much more evenly shared. Across-base DRG shifts accounted for 44 percent of the

changes, and within-base DRG shifts accounted for 56 percent. Thus, the change in the

percentage of discharges with an MCC was not as large as that for other IPPS hospitals.

In Figure 4 in the FY 2010 proposed rule, we showed that, for Puerto Rico hospitals,CMS-1498-P 108

there was a 3 percentage point increase in th e discharges with an MCC from 22 percent to

25 percent and a corresponding decrease of 3 percentage points from 58 percent to 55

percent in discharges without a CC or an MCC.

In the FY 2010 IPPS/RY 2010 LTCH PPS proposed rule (74 FR 24101), we

solicited public comment on the proposed -1.1 percent prospective adjustment to the

hospital-specific rates under section 1886(d)(5)(I)( i) of the Act and our intent to address

in the FY 2011 rulemaking cycle any changes in FY 2009 case-mix due to changes in

documentation and coding that did not reflect real changes in case-mix for discharges

occurring during FY 2009. We also stated th at we intended to update our analysis with

FY 2008 data on claims paid through March 2009 for the FY 2010 IPPS final rule.

In the FY 2010 IPPS/RY 2010 LTCH PPS final rule (74 FR 43777), we indicated

that, given these documentation and coding incr eases, consistent with our statements in

prior IPPS rules, we would use our authority under section 1886(d)(5)(I)(i) of the Act to

adjust the Puerto Rico-specific rate. Howe ver, in parallel to our decision to postpone

adjustments to the Federal standardized am ount, we indicated that we were adopting a

similar policy for the Puerto Rico-specific rate for FY 2010 and would consider the

phase-in of this adjustment over an appropria te time period through future rulemaking.

The adjustment would be applied to the Puerto Rico-specific rate that accounts for

25 percent of payments to Puerto Rico hosp itals, with the remaining 75 percent based on

the national standardized amount. Conseque ntly, the overall reduction to the payment

rates for Puerto Rico hospitals to account for documentation and c oding changes will be

slightly less than the reduction for IPPS hospitals paid based on 100 percent of theCMS-1498-P 109

national standardized amount. We noted that , as with the hospital-specific rates, the

Puerto Rico-specific standa rdized amount had not previously been reduced based on

estimated changes in document ation and coding associated with the adoption of the

MS-DRGs. However, as we note earlier for IPPS hospitals and hospitals receiving

hospital-specific rates, if the estimated documentation and coding effect determined

based on a full analysis of FY 2009 claims data is more or less than our current estimates,

it would change, possibly lessen, the anticipated cumulative adjustments that we

currently estimate we would have to ma ke for the FY 2008 and FY 2009 combined

adjustment. Therefore, we believed that it would be more prudent to delay

implementation of the documentation and coding adjustment to allow for a more

complete analysis of FY 2009 claims data for Puerto Rico hospitals.

Consistent with our approach for IPPS hospitals for FY 2010, we indicated that

we would address in the FY 2011 rulemaking cycle any change in FY 2009 case-mix due

to documentation and coding that did not refl ect real changes in case-mix for discharges

occurring during FY 2009. We noted that, un like the national standardized rates, the

FY 2009 hospital-specific rates were not previously reduced in order to account for

anticipated changes in documentation and coding that do not reflect real changes in casemix resulting from the adoption of the MS-DRGs.

As we have noted above, similar to SCHs and MDHs, hospitals in Puerto Rico use

the same MS-DRG system as a ll other hospitals and we believe they have the potential to

realize increased payments from documentation and coding changes that do not reflect

real increases in patients' severity of illne ss. Therefore, we believe they should beCMS-1498-P 110

equally subject to the prospective budget neutrality adjustment that we intend to apply to

prospective payment rates for IPPS hospitals including SCHs and MDHs in order to

eliminate the full effect of the documentation and coding changes associated with

implementation of the MS-DRG system.

In the above chart, consistent with our findings for IPPS hospitals, for Puerto Rico

hospitals, there is a 4 percentage point increas e in the discharge severity with MCCs from

22 percent to 26 percent, and a corresponding decrease of 4 percentage points in

discharge severity without CC/MC C from 58 percent to 54 percent.

Using the same methodology we applied to estimate documentation and coding

changes under IPPS for non-Puerto Rico hospitals, as we have also discussed above, our

best estimate, based on the most recently available data, is that a cumulative adjustment

of -2.4 percent is required to eliminate the full effect of the documentation and coding

changes on future payments from the Puerto Rico-specific rate. Unlike the case ofCMS-1498-P 111

standardized amounts paid to IPPS hospitals, we have not made any previous adjustments

to the hospital-specific rates paid to Puerto Rico hospitals to account for documentation

and coding changes. Therefore, the entir e -2.4 percent adjustment remains to be

implemented.

As we stated above, we believe it impor tant to maintain both consistency and

equity among all hospitals paid on the basis of the same MS-DRG system. At the same

time, however, we recognize that the estimated cumulative impact on aggregate payment

rates resulting from implementation of the MD-DRG system was smaller for Puerto Rico

hospitals as compared to IPPS hospitals and SCHs and MDHs. We therefore are

proposing an adjustment of -2.4 percent in FY 2011 to Puerto Rico-specific rate that

accounts for 25 percent of payments to Puer to Rico hospitals, with the remaining 75

percent based on the national standardized am ount, which we are proposing to adjust as

described above. Consequently, the overall reduction to rates fo r Puerto Rico hospitals to

account for the documentation and coding change s will be slightly less than the reduction

for IPPS hospitals based on 100 percent of the national standardized amount. We note

that this proposed -2.4 percen t prospective adjustment woul d eliminate the full effect of

the documentation and coding changes on the portion of future payments to Puerto Rico

hospitals based on the Puerto Rico-specifi c rate. We believe that this proposed

adjustment is the most appr opriate means to take into full account the effect of

documentation and coding changes on payments , and to maintain equity as much as

possible between hospitals paid on the basis of different prospective rates. One reason

for proposing the full -2.4 percent adjustment for the Puerto Rico-specific rate inCMS-1498-P 112

FY 2011 is to maintain equity as much as possible in the documentation and coding

adjustments applied to various hospital ra tes in FY 2011. Because this proposed

-2.4 percent adjustment represents the full ad justment that is warranted for the Puerto

Rico-specific rate, we do not anticipate propos ing any additional adjustments to the this

rate for documentation and coding effects.

We are seeking public comment on the proposed -2.4 percent prospective

adjustment to Puerto Rico-specific standa rdized amount under section 1886(d)(5)(I)(i) of

the Act. We intend to update our analysis with FY 2009 data on claim paid through

March 2009 for the FY 2011 IPPS/LTCH PPS final rule.

E. Refinement of the MS-DRG Relative Weight Calculation

1. Background

In the FY 2009 IPPS final rule (73 FR 48450), we continued to implement

significant revisions to Medicare’s inpatient hospital rates by completing our 3-year

transition from charge-based relative weights to cost-based relative weights. Beginning

in FY 2007, we implemented relative weights ba sed on cost report data instead of based

on charge information. We had initially propos ed to develop cost-based relative weights

using the hospital-specific relative valu e cost center (HSRVcc) methodology as

recommended by MedPAC. However, after cons idering concerns expressed in the public

comments we received on the proposal, we m odified MedPAC’s methodology to exclude

the hospital-specific relative weight feature. Instead, we developed national CCRs based

on distinct hospital departme nts and engaged a contractor to evaluate the HSRVcc

methodology for future consideration. To mitigate payment instability due to theCMS-1498-P 113

adoption of cost-based relative weights, we de cided to transition cost-based weights over

3 years by blending them with charge-based weights beginning in FY 2007. (We refer

readers to the FY 2007 IPPS final rule for details on the HSRVcc methodology and the

3-year transition blend from charge-based relative weights to cost-based relative weights

(71 FR 47882 through 47898).)

In FY 2008, we adopted severity-based MS-DRGs, which increased the number

of DRGs from 538 to 745. Many commenters ra ised concerns as to how the transition

from charge-based weights to cost-based weig hts would continue w ith the introduction of

new MS-DRGs. We decided to implement a 2-year transition for the MS-DRGs to

coincide with the remainder of the transition to cost-based relative weights. In FY 2008,

50 percent of the relative weight for e ach DRG was based on the CMS DRG relative

weight and 50 percent was based on the MS-DRG relative weight.

In FY 2009, the third and final year of the transition from charge-based weights to

cost-based weights, we calculated the MS -DRG relative weights based on 100 percent of

hospital costs. We refer readers to the FY 2007 IPPS final rule (71 FR 47882) for a more

detailed discussion of our fi nal policy for calculating the cost-based DRG relative

weights and to the FY 2008 IPPS final rule with comment period (72 FR 47199) for

information on how we bl ended relative weights ba sed on the CMS DRGs and

MS-DRGs.

a. Summary of the RTI Study of Charge Compression and CCR Refinement

As we transitioned to cost-based relative weights, some commenters raised

concerns about potential bias in the weight s due to “charge compression,” which is theCMS-1498-P 114

practice of applying a higher percentage ch arge markup over costs to lower cost items

and services, and a lower percentage charge markup over costs to higher cost items and

services. As a result, the cost-based we ights would undervalue high-cost items and

overvalue low-cost items if a single CCR is applied to items of widely varying costs in

the same cost center. To a ddress this concern, in August 2006, we awarded a contract to

RTI to study the effects of charge compression in calculating the relative weights and to

consider methods to reduce the variation in the CCRs across services within cost centers.

RTI issued an interim draft report in January 2007 with its findings on charge

compression (which was posted on the CMS Web site at:

http://www.cms.hhs.gov/reports/downloads/Dalton.pd f). In that report, RTI found that a

number of factors contribute to charge compression and affect the accuracy of the relative

weights. RTI’s findings demonstrated that charge compression exists in several CCRs,

most notably in the Medical Supplies and Equipment CCR.

In its interim draft report, RTI offe red a number of recommendations to mitigate

the effects of charge compression, includi ng estimating regression-based CCRs to

disaggregate the Medical Supplies Charged to Patients, Drugs Charged to Patients, and

Radiology cost centers, and adding new cost centers to the Medicare cost report, such as

adding a “Devices, Implants and Prosthetic s” line under “Medical Supplies Charged to

Patients” and a “CT Scanning and MRI” subs cripted line under “Radiology-Diagnostics”.

Despite receiving public comments in support of the regression-based CCRs as a means

to immediately resolve the problem of char ge compression, particularly within the

Medical Supplies and Equipment CCR, we did not adopt RTI's recommendation to createCMS-1498-P 115

additional regression-based CCRs. (For more details on RTI’s findings and

recommendations, we refer readers to the FY 2009 IPPS final rule (73 FR 48452).) RTI

subsequently expanded its analysis of char ge compression beyond inpatient services to

include a reassessment of the regression-ba sed CCR models usin g both outpatient and

inpatient charge data. This interim report was made ava ilable in April 2008 during the

public comment period on the FY 2009 IPPS proposed rule and can be found on RTI’s

Web site at: http://www.r ti.org/reports/cms/HHSM-500-2005-

0029I/PDF/Refining_Cost_to_Charge_Ratios_200804.pdf . The IPPS-specific chapters,

which were separately displayed in the Apr il 2008 interim report, as well as the more

recent OPPS chapters, were included in the July 3, 2008 RTI final report entitled,

“Refining Cost-to-Charge Ratios for Calculating APC [Ambulatory Payment

Classification] and DRG Relative Payment Weig hts,” that became available at the time of

the development of the FY 2009 IPPS final rule. The RTI final report can be found on

RTI’s Web site at: http://www. rti.org/reports/cms/HHSM-500-2005-

0029I/PDF/Refining_Cost_to_Charge_Ratios_200807_Final.pdf.

RTI’s final report found that, unde r the IPPS and the OPPS, accounting

improvements to the cost repor ting data reduce some of the sources of aggregation bias

without having to use regressi on-based adjustments. In ge neral, with respect to the

regression-based adjustments, RTI confirmed the findings of its March 2007 report that

regression models are a valid approach for diagnosing potential aggregation bias within

selected services for the IPPS and found that regression models are equally valid for

setting payments under the OPPS.CMS-1498-P 116

RTI also noted that cost-based weig hts are only one component of a final

prospective payment rate. There are other ra te adjustments (wage index, IME, and DSH)

to payments derived from the revised cost-bas ed weights, and the cumulative effect of

these components may not improve the ability of final payment to reflect resource cost.

RTI endorsed short-term regression-based ad justments, but also concluded that more

refined and accurate accoun ting data are the preferred long-term solution to mitigate

charge compression and related bias in hospita l cost-based weights. For a more detailed

summary of RTI’s findings, recommendations , and public comments we received on the

report, we refer readers to the FY 2009 IPPS final rule (73 FR 48452 through 48453).

b. Summary of the RAND Corporation Study of Alternative Relative Weight

Methodologies

One of the reasons that we did not implement regression-based CCRs at the time

of the FY 2008 IPPS final rule with comment period was our inability to investigate how

regression-based CCRs would interact with the implementation of MS-DRGs. In the

FY 2008 final rule with comment period (72 FR 47197), we stated that we engaged the

RAND Corporation as the contractor to ev aluate the HSRV methodology in conjunction

with regression-based C CRs, and that we would consider its analysis as we prepared for

the FY 2009 IPPS rulemaking process.

RAND evaluated six different methods that could be used to establish relative

weights; CMS’ current relative weight methodology of 15 national CCRs and

5 alternatives, including a method in which the 15 national CCRs are disaggregated using

the regression-based methodology, and a method using hospital-specific CCRs for theCMS-1498-P 117

15 cost center groupings. In additi on, RAND analyzed our standardization

methodologies that account for systematic co st differences across hospitals. The purpose

of standardization is to eliminate systematic facility-specific differences in cost so that

these cost differences do not influence the relative weights. Overall, RAND found that

none of the methods it studied of calculating the relative weights represented a marked

improvement in payment accuracy over the current method, and there was little

difference across methods in their ability to predict cost at either the discharge-level or

the hospital-level. In their regression an alysis, RAND found that, after controlling for

hospital payment factors, the relative weig hts are compressed (tha t is, understated).

However, RAND also found that the hospital pa yment factors are overstated and increase

more rapidly than cost. Therefore, while the relative weights are compressed, these

payment factors offset the compression such that total payments to hospitals increase

more rapidly than hospitals' costs.

In the FY 2009 IPPS final rule (73 FR 48453 through 48457), we provided a

summary of the RAND report and the public comments we received in response to the

FY 2009 IPPS proposed rule. The report may be found on RAND's Web site at:

http://www.rand.org/pubs/working_papers/WR560/.

2. Proposals for FY 2011 and Timeline for Changes to the Medicare Cost Report

In the FY 2009 IPPS final rule (73 FR 48458 through 48467), in response to the

RTI's recommendations concerning cost re port refinements, and because of RAND’s

finding that regression-based adjustments to the CCRs do not significantly improve

payment accuracy, we discussed our decision to pursue changes to the cost report to splitCMS-1498-P 118

the cost center for Medical Supplies Charged to Patients into one line for "Medical

Supplies Charged to Patients" and another line for "Implantable Devices Charged to

Patients." We acknowledged, as RTI had found, that charge compression occurs in

several cost centers that exist on the Medicare cost report. However, as we stated in the

final rule, we focused on the CCR for Medical Supplies and Equipment because RTI

found that the largest impact on the MS-D RG relative weights could result from

correcting charge compression for devices and implants. In determining what should be

reported in these respective cost centers, we adopted the commenters’ recommendation

that hospitals should use revenue codes es tablished by AHA's Na tional Uniform Billing

Committee to determine what should be report ed in the “Medical Supplies Charged to

Patients” and the “Implantable Device s Charged to Patients” cost centers.

When we developed the FY 2009 IPPS final rule, we considered all of the public

comments we received both for and against adopting regression-based CCRs. Also

noteworthy is RAND’s belief that regression- based CCRs may not significantly improve

payment accuracy, and that it is equally, if not more, important to consider revisions to

the current IPPS hospital payment factor standardization method in order to improve

payment accuracy. For FY 2010, we solicited comments on improving the

standardization process, alt hough we did not make any changes to the standardization

process for FY 2010. We also stated that we continued to belie ve that, ultimately,

improved and more precise cost reportin g is the best way to minimize charge

compression and improve the accuracy of the cost weights. Accordingly, a new

subscripted line 55.01 for Implantable Device s Charged to Patients was created inCMS-1498-P 119

July 2009 as part of CMS’ Transmittal 20 update to the existing cost report Form

CMS-2552-96. This new subscripted cost cente r is available for use for cost reporting

periods beginning on or after May 1, 2009.

With respect to the initiative to reform , update, and streamline the Medicare cost

report, which has been the subject of many comments and our responses in the IPPS (and

OPPS) Federal Register notices of rulemaking over th e past several years, CMS is

continuing to work on this project. The new draft hospital cost report Form

CMS-2552-10 was published in the Federal Register on July 2, 2009, and was subject to

a 60-day review and comment period, which ended August 31, 2009. CMS received

numerous comments on the draft hospital co st report Form CMS-2552-10, specifically

regarding the creation of new cost centers from which data would be ultimately used in

the relative weights calculation, even though CMS had not proposed to add these cost

centers. The public comments on the July 2, 2009 Federal Register notice will be

addressed in detail in the Federal Register notice that will be issued to finalize Form

CMS-2525-10. We now plan to issue the revise d draft of the hospital cost report Form

CMS-2552-10, which will include a standard cost center for Implantable Devices

Charged to Patients, through a notice in the Federal Register, which will allow for a 30-

day comment period, in the spring or summer of 2010. However, in part in this IPPS

proposed rule, we are providing a summary of the public comments received on the

July 2, 2009 notice that specifically related to the relative weights and responding to

those comments. Our responses to the comments in this IPPS proposed rule constitute

our proposals for FY 2011 regarding the relative weights.CMS-1498-P 120

Several commenters asked that CMS creat e cost centers to house the costs of

magnetic resonance imaging (MRI), Comput ed Tomography (CT), nuclear medicine

services, cardiac catheterization, drug s that require de tailed coding, and

magnetoencephalography (MEG). One comme nter indicated, that in RTI’s July 2008

report ( http://www.rti.org/reports/cms/ ), RTI made an argument that CMS should create

new standard cost centers in which hospitals would report the costs of MRI scans, CT

scans, cardiac cat heterization, and drugs that require detailed coding, in addition to the

new cost center for “Implantable Devices Charged to Patients.” The commenter stated

that these additional lines are needed to distinguish items and services that hospitals tend

to markup differently within existing revenue centers, citing RTI’s finding that CT scans

have a significantly higher markup than most other radiology services. The commenter

indicated that when CMS uses the overall radiology department CCR to convert charges

for CT scans to costs, it overestimates the cost of these services, resulting in overstated

relative weights for MS-DRGs under the IPPS and for APCs under the OPPS that

incorporate CT scanning. The commenter argued that having a separate cost center for

each of these services would resolve the problem. The commenter also stated that, while

CMS has done something similar with the crea tion of the cost center for high cost

medical devices, making cost center changes for some serv ices, but not others, where

such changes are warranted could create additional distortion in the relative weights. The

commenter further argued that cost center ch anges should be made for all service areas

with significant volume where services with sizable differences in markup are currently

combined in a single cost center. The commenter asserted that creating these cost centersCMS-1498-P 121

should not create reporting burden for hospitals because the RTI report indicated that

roughly one-third of the hospitals are already reporting costs for CT scans, MRI scans,

and cardiac catheterization under the specific nonstandard cost centers currently available

in the cost report.

Another commenter also recommended the creation of the cost centers for CT

scans, MRI scans, and nuclear medicine servi ces, but for different re asons than the first

commenter. Specifically, this commenter believed these new cost centers are necessary

in order for the high capital costs to be appropr iately allocated to these services and to be

correctly reflected in the CCRs that are used in the establishment of the MS-DRG and

APC payment rates for the services. The co mmenter stated that, under the existing cost

report structure, some providers are allocating high capital costs for these services in a

single radiology line, diluting the high capital costs associated with CT scans, MRI scans,

and nuclear medicine services across all radiology services, in cluding low cost services.

Therefore, the commenter concluded that the resulting radiology CCRs that CMS applies

to charges for CT scans, MRI scans, and nuclear medicine services to arrive at the

relative costs used to set payment rates for both the IPPS and OPPS understate the cost of

high cost radiology services and overstate the cost of low cost radiology services,

resulting in payments that are too low for the high cost services. The commenter

indicated that CMS should not only create thes e new costs centers but should also require

all hospitals to use them, and should issue ex plicit instructions on how to report the costs

of these services in the new standard cost centers.CMS-1498-P 122

We agree that it is appropriate to create standard cost centers for CT scans, MRI

scans, and cardiac catheterization and to re quire that hospitals report the costs and

charges for these services under new cost cen ters on the revised Medicare cost report

Form CMS 2552-10. As we discussed in the FY 2009 IPPS and CY 2009 OPPS

proposed and final rules, RTI found that the co sts and charges of CT scans, MRI scans,

and cardiac catheterization differ significantly from the costs and charges of other

services included in the standard associated co st center. RTI also concluded that both the

IPPS and OPPS relative weights would better estimate the costs of those services if CMS

were to add standard costs centers for CT scanning, MRIs, and cardiac catheterization in

order for hospitals to report separately the costs and charges for those services and in

order for CMS to calculate unique CCRs to estimate the cost from charges on claims

data.

In its analysis, RTI concluded that the estimated costs for CT scanning and MRI

scans would decline significantly and that the estimated cost for cardiac catheterization

would increase modestly if sp ecific standard cost centers were used. RTI found that

cardiac catheterization has very different co st inputs from most cardiac testing (for

example, electrocardiograms or cardi ac stress testing) captured in the 5300

“Electrocardiology” cost center and that the accuracy of the CCR for both types of

services, cardiac catheterization and other cardi ac testing, would impr ove with creation of

a standard cost center for cardiac catheteri zation. RTI also found that one-third of

hospitals already report cardiac catheterizati on costs and charges separately through the

available nonstandard cost center or through subscripted lines to the “Electrocardiology”CMS-1498-P 123

cost center. Similarly, RTI found that appr oximately one-third of hospitals already

separately report the costs for CT scanning and MRI scans on their Medicare cost report

through subscripted lines and the available nonstandard cost centers. We believe the

current prevalence of reporting for the nonstanda rd cost centers for these three services

suggests a modest hospital burden required to adopt these cost centers.

We discussed the possibility of creating standard cost centers for these three

different services in our CY 2009 OPPS proposed and final rule with comment period

(73 FR 41432 and 73 FR 68525) and so licited general comments on RTI’s

recommendations. The commenters who objected to the creation of the standard cost

centers for CT scanning and MRI scans la rgely did so based on RTI projected lower

estimated costs for these services if CMS created these cost centers. The commenters

suggested that the current CCRs for advanced imaging may reflect a misallocation of

capital costs and requested that CMS not adopt separate cost centers or statistical

adjustment simulating lower CCRs for CT scanning and MRI until CMS could

understand how providers are allocating the exte nsive capital costs for these services to

the revenue producing cost centers. We al so received comments suggesting that the

accuracy of estimated costs would improve w ith better allocation, potentially increasing

the CCR as more capital cost would be appropriately allocated to both CT scanning and

MRI and not spread across all services in th e radiology cost center. We noted in the

CY 2009 OPPS/ASC final rule with comment period (73 FR 68525) that our

recommended allocation of mov eable equipment costs in Worksheet A of the Medicare

cost report is based on dollar va lue, and that it would be im portant to encourage improvedCMS-1498-P 124

accuracy of capital allocation through dollar value or direct assignment if we were to

make these cost centers standard cost cent ers. At this time, we do not know the impact

on CCRs and estimated costs of adopting standard cost centers specific to CT scanning

and MRI. However, we believe that, because these areas constitute significant payment

under both the IPPS and OPPS and because thes e are common imaging services already

widely reported by hospitals, we are proposin g to adopt new standard cost centers for

CT scanning and MRI. We agree with thos e commenters who asserted that creation of

standard cost centers for CT scanning a nd MRI would improve the accuracy of cost

estimation for these services, in part by creating incentives for hospitals to more

accurately allocate the capital and equipment associated with these services.

With regard to cardiac catheterization, we received one comment on the CY 2009

OPPS/ASC proposed rule suggesting that hospitals might find it difficult to allocate costs

for these services to specific cost centers, especially for car diac catheterization, and that

allocated overhead costs would, in most cases, be an estimate (73 FR 68527). However,

given the number of hospitals already repor ting the nonstandard cost center for cardiac

catheterization and the number subscripting these costs and charges (approximately

50 percent, according to RTI’s July 2008 report (pages 71 and 72) at:

http://www.rti.org/reports/cms/HHSM-500-2005-

0029I/PDF/Refining_Cost_to_Charge_Ratios_200807_Final.pdf), we believe that

hospitals do allocate overhead costs to a cardia c catheterization-specific cost center. For

these reasons, we are proposing to create stan dard cost centers for CT scanning, MRI,

and cardiac catheterization in Form CMS 2552-10.CMS-1498-P 125

We also received public comments on the co st report notice urging us to create

standard cost centers for nuclear medicine se rvices, for drugs that require detailed coding,

and for MEG. We continue to believe that it is not appropriate to crea te standard cost

centers for these three services. The Medicare cost report already contains standard cost

center 4300 (Radioisotope) to capture the costs and charges for the radioisotopes used in

nuclear medicine services, the items that may have significantly different costs and

hospital markup than the supp lies and equipment used in other radiology services.

Moreover, the cost report already cont ains standard cost center 4100 (Diagnostic

Radiology) in which the costs of staff, e quipment, and supplies for diagnostic nuclear

medicine services can be reported. Therefore, we continue to belie ve that creating a new

standard cost center for nuclear medicine serv ices is not necessary. We also continue to

believe that it is not appropriate to create a standard cost center for drugs that require

detailed coding. We refer readers to the CY 2009 OPPS/ASC final rule with comment

period (73 FR 68655) for a detaile d discussion on our final decisi on not to create this cost

center. Finally, with respect to MEG services, the extremely low volume of claims for

MEG services furnished to Medicare beneficiaries in the hospital outpatient setting and

the extremely low number of hospitals that re port these codes relative to the volumes we

typically have considered in adding both st andard and nonstandard cost centers to the

cost report lead us to conclude that a specific cost center for MEG is not justified at this

time.

There is typically a 3-year lag between the availability of the cost report data that

we use to calculate the relative weights both under the IPPS and the OPPS and a givenCMS-1498-P 126

fiscal or calendar year. We expect the data from the proposed standard cost centers for

CT scans, MRI, and cardiac catheterization re spectively, should they be finalized, to be

available for possible use in calculating the relative weights not earlier than 3 years after

Form CMS-2552-10 becomes availa ble. At that time, we would analyze the data and

determine if it is appropriate to use those data to create distinct CCRs from these cost

centers for use in the relative weights for the respective payment systems. If we decide to

finalize these proposed new cost centers, the upcoming Federal Register notice that will

finalize Form CMS-2552-10 will provide more information regarding the addition of

these proposed new standard cost centers for CT scans, MRI, and cardiac catheterization,

including the instructions for completing these cost centers on the new cost report.

F. Preventable Hospital-Acquired C onditions (HACs), Including Infections

1. Background

a. Statutory Authority

Section 1886(d)(4)(D) of the Act addre sses certain hospital- acquired conditions

(HACs), including infections. Section 1886( d)(4)(D) of the Act specifies that by

October 1, 2007, the Secretary was required to se lect, in consultation with the Centers for

Disease Control and Prevention (CDC), at l east two conditions that: (a) are high cost,

high volume, or both; (b) are assigned to a higher paying MS-DRG when present as a

secondary diagnosis (that is, conditions unde r the MS-DRG system that are CCs or

MCCs); and (c) could reasonably have been prevented through the application of

evidence-based guidelines. Section 1886(d)(4)(D) of the Act also specifies that the list ofCMS-1498-P 127

conditions may be revised, again in consultation with CDC, from time to time as long as

the list contains at least two conditions.

Section 1886(d)(4)(D)(iii) of the Act re quires that hospitals, effective with

discharges occurring on or after October 1, 2007, submit info rmation on Medicare claims

specifying whether diagnoses were present on admission (POA). Section

1886(d)(4)(D)(i) of the Act specifies that effe ctive for discharges occurring on or after

October 1, 2008, Medicare no longer assigns an inpatient hospital discharge to a higher

paying MS-DRG if a selected condition is not POA. Thus, if a selected condition that

was not POA manifests during the hospital st ay, it is considered a HAC and the case is

paid as though the secondary diagnosis was not present. However, even if a HAC

manifests during the hospital stay, if any nonselected CC/MCC appears on the claim, the

claim will be paid at the higher MS-DRG rate. Under the HAC payment policy, all

CCs/MCCs on the claim must be HACs in order to generate a lower MS-DRG payment.

In addition, Medicare continues to assign a di scharge to a higher paying MS-DRG if a

selected condition is POA.

The POA indicator reporting requirement and the HAC payment provision apply

to IPPS hospitals only. Non-IPPS hospitals, including CAHs, LTCHs, IRFs, IPFs, cancer

hospitals, children’s hospitals, hospitals in Maryland operating under waivers, rural

health clinics, federally qualified health centers, RNHCIs, and Department of Veterans

Affairs/Department of Defe nse hospitals, are exempt from POA reporting and the HAC

payment provision. Throughout this section, the term “hospital” refers to an IPPS

hospital.CMS-1498-P 128

The HAC provision found in section 1886(d)(4 )(D) of the Act is part of an array

of Medicare value-based purchasing (VBP) tool s that we are using to promote increased

quality and efficiency of care. Those t ools include measuring performance, using

payment incentives, publicly reporting performa nce results, applying national and local

coverage policy decisions, enforcing conditions of participation, a nd providing direct

support for providers through Quality Improv ement Organization (QIO) activities. The

application of VBP tools, such as this HAC provision, is transforming Medicare from a

passive payer to an active purchaser of high er value health care services. We are

applying these strategies for inpatient hosp ital care and across the continuum of care for

Medicare beneficiaries.

These VBP tools are highly compatible with the underlying purposes as well as

existing structural features of Medicare’s IPPS. Under the IPPS, hospitals are

encouraged to treat patients efficiently because they receive the same DRG payment for

stays that vary in length and in the servic es provided, which gives hospitals an incentive

to avoid unnecessary costs in the delivery of care. In some cases, conditions acquired in

the hospital do not generate higher payments than the hospital would otherwise receive

for cases without these conditions. To this extent, the IPPS encourages hospitals to avoid

complications.

However, the treatment of certain c onditions can generate higher Medicare

payments in two ways. First, if a hospital incurs exceptionally high costs treating a

patient, the hospital stay may generate an outlier payment. Because the outlier payment

methodology requires that hospitals experien ce large losses on outlier cases before outlierCMS-1498-P 129

payments are made, hospitals have an incen tive to prevent outliers. Second, under the

MS-DRGs system that took effect in FY 2008 and that has been refined through

rulemaking in subsequent years, certain conditions can generate higher payments even if

the outlier payment requirements are not met. Under the MS-DRG system, there are

currently 258 sets of MS-DRGs that are split into 2 or 3 subgroups based on the presence

or absence of a CC or an MCC. The presen ce of a CC or MCC generally results in a

higher payment. However, since we imple mented the HAC provisions, if a secondary

diagnosis acquired during a hospital stay is a HAC and no other CCs or MCCs are

present, the hospital receives a payment under the MS-DRGs as if the HACs were not

present. (We refer readers to section II.D . of the FY 2008 IPPS final rule with comment

period for a discussion of DRG reforms (72 FR 47141).)

b. HAC Selection

In the FY 2007 IPPS proposed rule (71 FR 24100), we sought public input

regarding conditions with evidence-based preven tion guidelines that should be selected in

implementing section 1886(d)(4)(D) of the Act. The public comments we received were

summarized in the FY 2007 IPPS final rule (71 FR 48051 through 48053).

In the FY 2008 IPPS proposed rule (72 FR 24716 through 24726), we sought

public comment on conditions that we proposed to select. In the FY 2008 IPPS final rule

with comment period (72 FR 47200 through 47218) , we selected 8 categories to which

the HAC payment provisions would apply.

In the FY 2009 IPPS proposed rule (73 FR 23547), we proposed several

additional candidate HACs as we ll as refinements to the previously selected HACs. InCMS-1498-P 130

the FY 2009 IPPS final rule (73 FR 48471), we expanded and refined several of the

previously selected HACs, and we sele cted 2 additional categories of HACs.

In the FY 2010 IPPS/RY 2010 LTCH PPS proposed rule (74 FR 24106), we

proposed the addition of ICD-9-CM code s 813.46 (Torus fracture of ulna) and 813.47

(Torus fracture of radius and ulna) to more precisely define the previously selected HAC

category of Falls and Trauma. In the FY 2010 IPPS/RY 2010 LTCH PPS final rule

(74 FR 43784), we finalized the addition of thes e codes. A complete list of the 10 current

categories of HACs is included in section II.F.2. of this preamble.

c. Collaborative Process

In establishing the HAC payment policy under section 1886(d)(4)(D) of the Act,

our experts have worked closely with public health and infectious disease professionals

from across the Department of Health and Hu man Services, including CDC, the Agency

for Healthcare Research and Quality (AHRQ) , and the Office of Public Health and

Science (OPHS), to identify the candidate preventable HACs, review comments, and

select HACs. CMS and CDC have also co llaborated on the process for hospitals to

submit a POA indicator for each diagnosis listed on IPPS hospital Medicare claims and

on the payment implications of the various P OA reporting options. As discussed below,

we have also used rulemaking and List ening Sessions to receive public input.

d Application of HAC Payment Po licy to MS-DRG Classifications

As described above, in certain cases application of the HAC payment policy

provisions can result in MS-DRG reassign ment to a lower paying MS-DRG. The

following diagram portrays the logic of the HAC payment policy provision as adopted inCMS-1498-P 131

the FY 2008 IPPS final rule (72 FR 47200) and in the FY 2009 IPPS final rule

(73 FR 48471):

All Medicare Discharges

Discharges with HAC

codes as secondary diagnoses Discharges with no HAC codes as secondary diagnoses

Discharges with HAC

codes present on admission (POA) Discharges with HAC codes not present on

admission (POA)

Discharges where MSDRG is re-assigned Discharges where MSDRG does not change

MS-DRG splits into 2 severity levels and HAC does not affect severity MS-DRG does not split by severity CC Exclusion List

MS-DRG logic Other CCs/MCCs prevent reassignmentCMS-1498-P 132

e. Public Input Regarding Sele cted and Potentia l Candidate HACs

In the FY 2010 IPPS/RY 2010 LTCH PPS proposed rule (74 FR 24104 through

24106), we did not propose to add or remove categories of HACs. However, as we

indicated in that proposed rule, we con tinue to encourage public dialogue about

refinements to the HAC list. During a nd after the December 18, 2008 Listening Session,

we received many oral and wr itten stakeholder comments about both previously selected

and potential candidate HACs. In response to the Listening Session, commenters

strongly supported using information gather ed from early experience with the HAC

payment provision to inform maintenance of the HAC list and consideration of future

potential candidate HACs. Co mmenters also emphasized the need for a robust program

evaluation prior to modifying the HAC list.

In response to the FY 2010 IPPS/RY 2010 LTCH PPS proposed rule

(74 FR 24106), commenters expressed strong su pport for a program evaluation prior to

modifying the HAC list. We responded to these commenters and expressed our

appreciation for the public’s support for our decision to undertake a program evaluation.

We indicated that we planned to include updates and findings from the evaluation on

CMS’ Hospital-Acquired Cond itions and Present on Admission Indicator Web site

available at: http://www.cms.hhs.gov/HospitalAcqCond/ . We also responded to

commenters regarding POA indicator reporting as well as to comments addressing other

topics related to HACs a nd POA reporting (74 FR 43785).CMS-1498-P 133

f. POA Indicator Reporting

Collection of POA indicator data is nece ssary to identify which conditions were

acquired during hospitalization for the HAC payment provision as well as for broader

public health uses of Medicare data. Th rough Change Request No. 5679 (released on

June 20, 2007), we issued instructions requiring IPPS hospitals to submit POA indicator

data for all diagnosis codes on Medicare cl aims. We also issued Change Request

No. 6086 (released on June 13, 2008) regardin g instructions for processing non-IPPS

claims. Specific instructions on how to select the correct POA indicator for each

diagnosis code are included in the ICD-9- CM Official Guidelines for Coding and

Reporting , available on the CDC Web site at:

http://www.cdc.gov/nchs/data/icd9/icdguide09.pdf . Additional information regarding

POA indicator reporting and a pplication of the POA reporting options is available on the

CMS Web site at: http://www.cms.hhs.gov/HospitalAcqCond . Historically we have not

provided coding advice. Rath er, we collaborate with the American Hospital Association

(AHA) through the Coding Clinic for ICD-9-CM . We have been collaborating with the

AHA to promote the Coding Clinic for ICD-9-CM as the source for coding advice about

the POA indicator.

There are five POA indicator reporting options, as defined by the ICD-9-CM

Official Guidelines for Coding and Reporting :CMS-1498-P 134

Indicator Descriptor Y Indicates that the condition was present on admission. W Affirms that the hospital has determin ed that, based on data and clinical judgment, it is not possible to document when the onset of the condition occurred. N Indicates that the condition was not present on admission. U Indicates that the documentation is insufficient to determine if the condition was present at the time of admission. 1 Signifies exemption from POA reporting. CMS established this code as a workaround to blank reporting on the electronic 4010A1. A list of exempt ICD-9-CM diagnosis codes is available in the ICD-9-CM Official Guidelines for Coding and Reporting

. In the FY 2009 IPPS final rule (73 FR 48486 through 48487), we adopted as final

our proposal to: (1) pay the CC/MCC MS-D RGs for those HACs coded with “Y” and

“W” indicators; and (2) not pay the CC/M CC MS-DRGs for those HACs coded with “N”

and “U” indicators.

Beginning on or after January 1, 2011, hos pitals will begin reporting with the

5010 format. The 5010 format removes the need to report a POA indicator of “1” for

codes that are exempt from POA reporting. The POA indicator of “1” is being used

because of reporting restrictions from the us e of the 4010 format. Therefore, hospitals

that begin reporting with the 5010 format on and after January 1, 2011, will no longer

report a POA indicator of “1” fo r POA exempt codes. The POA field will instead be left

blank for codes exempt from POA reporting. We are planning to issue CMS instructions

on this reporting change.

2. Proposed HAC Conditions for FY 2011

As changes to diagnosis codes and new diagnosis codes are proposed and

finalized for the list of CCs and MCCs, we will modify the list of selected HACs toCMS-1498-P 135

reflect these changes. In Table 6A in the Addendum to this proposed rule, we have listed

the proposed addition of five new ICD-9- CM diagnosis codes to replace existing

ICD-9-CM code 999.6 (ABO incompatibility reaction) for FY 2011. ICD-9-CM code

999.6 is currently the only code identified under the Blood Incompatibility HAC

category. We are proposing to delete code 999.6 and form a new subcategory of 999.6 to

identify new diagnoses relating to ABO incompatibility reaction due to transfusion of

blood or blood products. These diagnoses meet the criteria for the Blood Incompatibility

HAC category based on the predecessor code 999.6 being a selected HAC.

As shown in Table 6C in the Addendum to this proposed rule, we are proposing

that code 999.6 become invalid as a diagnosis code in FY 2011 with the creation of this

new ICD-9-CM subcategory. This proposed new subcategory would allow room for

expansion and the creation of the following new diagnosis codes:

ICD-9-CM Code Code Descriptor Proposed CC/MCC Designation 999.60 ABO incompatibility reaction, unspecified CC 999.61 ABO incompatibility with hemolytic transfusion reaction not specified as acute or delayed CC

999.62 ABO incompatibility with acute hemolytic transfusion reaction CC

999.63 ABO incompatibility with delayed hemolytic transfusion reaction CC

999.69 Other ABO incompatibility reaction CC

We are inviting public comments on the pr oposed adoption of the five ICD-9-CM

diagnosis codes as CCs that are listed above, which, if finalized, w ould be added to the

current HAC Blood Incompatibility category.CMS-1498-P 136

The following table lists the current HACs categories and the ICD-9-CM codes

that identify the conditions that have been finalized through FY 2010. For FY 2011, we

are proposing that these conditions continue to be subject to the HAC payment provision,

with a proposed refinement to the codes to identify blood incompatibility as described

above.

HAC CC/MCC (ICD-9-CM Code) Foreign Object Retained After Surgery 998.4 (CC) 998.7 (CC) Air Embolism 999.1 (MCC) Blood Incompatibility 999.6 (CC)

Pressure Ulcer Stages III & IV 707.23 (MCC) 707.24 (MCC) Falls and Trauma:

- Fracture - Dislocation - Intracranial Injury - Crushing Injury - Burn - Electric Shock Codes within these ranges on the CC/MCC list: 800-829 830-839 850-854 925-929 940-949 991-994 Catheter-Associated Urinary Tract Infection (UTI) 996.64 (CC)

Also excludes the following

from acting as a CC/MCC: 112.2 (CC) 590.10 (CC) 590.11 (MCC)

590.2 (MCC) 590.3 (CC) 590.80 (CC) 590.81 (CC)

595.0 (CC) 597.0 (CC) 599.0 (CC) Vascular Catheter-Associ ated Infection 999.31 (CC)CMS-1498-P 137

HAC CC/MCC (ICD-9-CM Code) Manifestations of Poor Glycemic Control 250.10-250.13 (MCC) 250.20-250.23 (MCC) 251.0 (CC) 249.10-249.11 (MCC) 249.20-249.21 (MCC) Surgical Site Infections Surgical Site Infection, Mediastinitis, Followin g Coronary Artery Bypass Graft (CABG) 519.2 (MCC) And one of the following procedure codes: 36.10–36.19 Surgical Site Infection Following Certain Orthoped ic Procedures 996.67 (CC) 998.59 (CC) And one of the following procedure codes: 81.01- 81.08, 81.23-81.24, 81.31- 81.38, 81.83, 81.85 Surgical Site Infection Following Bariatric Surgery fo r Obesity Principal Diagnosis – 278.01 998.59 (CC) And one of the following procedure codes: 44.38, 44.39, or 44.95 Deep Vein Thrombosis and Pulmonary Embolism Following Certain Orthopedic Procedures 415.11 (MCC) 415.19 (MCC) 453.40-453.42 (CC) And one of the following

procedure codes: 00.85-

00.87, 81.51-81.52, or 81.54

We refer readers to section II.F.6. of the FY 2008 IPPS final rule with comment

period (72 FR 47202 through 47218) and to section II.F.7. of the FY 2009 IPPS final rule

(73 FR 48474 through 48486) for detailed anal yses supporting the selection of each of

these HACs. We invite public comments on our proposal that these conditions continue

to be subject to the HAC payment provision, w ith a proposed refinement of the codes to

identify blood incompatibility as described above.CMS-1498-P 138

3. RTI Program Evaluation Summary

a. Background

On September 30, 2009, a contract was awarded to Research Triangle

Incorporated (RTI) to evaluate the impact of the Hospital-Acquire d Condition-Present on

Admission (HAC-POA) provisions on the changes in the incidence of selected

conditions, effects on Medicare payments, impacts on coding accuracy, unintended

consequences, and infection and event rates. Th is is an intra-agency project with funding

and technical support coming from CMS, OPHS , AHRQ, and CDC. The evaluation will

also examine the implementation of the program and evaluate additional conditions for

future selection.

RTI’s evaluation of the HAC-POA provisions is divided into several parts, only

some of which will be comple te prior to the publication da te of this proposed rule.

Below we summarize the analyses that are complete. RTI’s analyses of POA indicator

reporting, frequencies and net savings associated with curre nt HACs, and frequencies of

previously considered candidate HACs reflect MedPAR claims from October 2008

through June 2009. In the final rule, we inte nd to update our summary of these analyses

with additional data that have become available.

b. Preliminary RTI Analysis on POA Indicator Reporting Across Medicare Discharges

To better understand the impact of HACs on the Medicare program, it is

necessary to first examine the incidence of POA indicator reporting across all eligible

Medicare discharges. As mentioned previously, only IPPS hospitals are required to

submit POA indicator data for all diagnosis codes on Medicare claims. Therefore, allCMS-1498-P 139

non-IPPS hospitals were excluded, as well as providers in waiver States (Maryland) and

territories other than Puerto Rico.

Using MedPAR claims data from Oc tober 2008 through June 2009, RTI found a

total of approximate ly 50.22 million secondary diagnos es across approximately 7.17

million discharges. As shown in Chart A below, the majority of all secondary diagnoses

(83.52 percent) were reported with a POA i ndicator of “Y,” meaning the condition was

POA.CMS-1498-P 140

CHART A.—POA CODE DISTRI BUTION ACROSS ALL SECONDARY DIAGNOSES

Number Percentage Total Discharges in Final File 7,175,139 Total Number of Secondary Diagnoses Across Total Discharges 50,216,195 100.00 POA Indicator Description Y Condition present on admission 41,938,234 83.52 W Status cannot be clinically determined 12,547 0.02 N Condition not present on admission 3,440,815 6.85 U Documentation not ad equate to determine if condition was present on admission 110,771 0.22 1 Exempted ICD-9-CM code 4,713,828 9.39 SOURCE : RTI Analysis of MedPAR IPPS Claims, October 2008 through June 2009.

c. Preliminary RTI Analysis on POA Indicator Reporting of Current HACs

Following the initial analysis of POA indicator reporting for all secondary

diagnoses, RTI then evaluated POA indicator reporting for specific HAC-associated

secondary diagnoses. The term “HAC-associat ed secondary diagnosis” refers to those

diagnoses that are on the selected HAC list a nd were reported as a secondary diagnosis.

Chart B below shows a summary of the HAC categories with the frequency in which

each HAC was reported as a secondary diag nosis and the corresponding POA indicators

assigned on the claims. It is important to note that, because more than one HACassociated diagnosis code can be reported pe r discharge (that is, on a single claim), the

frequency of HAC-associated diagnosis code s may be more than the actual number of

discharges that have a HAC-associated diagnosis c ode reported as a secondary diagnosis.

Below we discuss the frequency of each HA C-associated diagnosis code and the POA

indicators assigned to those claims.CMS-1498-P 141

RTI analyzed the frequency of each reported HAC-associated secondary

diagnosis (across all 7.17 million discharges) and the POA indicator assigned to the

claim. Chart B below shows that the most frequently reported conditions were in the

Falls and Trauma HAC category, with a to tal of 132,666 HAC-associated diagnosis codes

being reported for that HAC category. Of these 132,666 diagnoses, 4,081 reported a

POA indicator of “N” for not POA and 128,286 diagnoses repo rted a POA indicator of

“Y” for POA. The lowest frequency appears in the Surgical Site Infection (SSI)

Following Bariatric Surgery for Obesity HAC category with only 12 HAC-associated

secondary diagnosis codes (a nd procedure codes) reported.

CHART B.—POA STATUS OF CURRENT HACS: OCTOBER 2008 THROUGH JUNE 2009

Not Present on Admission Present on Admission

POA = N POA = U POA = Y POA = W Selected HAC Frequency

as a Secondary Diagnosis No. Percent No. Percent No. Percent No. Percent
1. Foreign Object Retained After Surgery (CC) 378 172 45.5 0 0.0 206 54.5 0 0.0 2. Air Embolism (MCC) 29 23 79.3 0 0.0 6 20.7 0 0.0 3. Blood Incompatibility (CC) 23 8 34.8 0 0.0 15 65.2 0 0.0 4. Pressure Ulcer Stages III & IV (MCC) 80,190 944 1.2 56 0.1 79,165 98.7 25 0.0 5. Falls and Trauma (MCC & CC) 132,666 4,081 3. 1 232 0.2 128,286 96.7 67 0.16. CatheterAssociated UTI (CC) 11,424 1,887 16.5 15 0.1 9,496 83.1 26 0.2 7. Vascular Catheter-Associated Infection (CC) 5,470 2,091 38.2 19 0.3 3,348 61.2 12 0.2 8. Poor Glycemic Control (MCC) 11,070 344 3.1 9 0.1 10,711 96.8 6 0.1CMS-1498-P 142

Not Present on Admission Present on Admission

POA = N POA = U POA = Y POA = W Selected HAC Frequency

as a Secondary Diagnosis No. Percent No. Percent No. Percent No. Percent 9A. Surgical Site Infection Mediastinitis CABG (CC) 29 21 72.4 0 0.0 8 27.6 0 0.0 9B. Surgical Site Infection Following Bariatric Surgery for Obesity (CC) 12 10 83.3 0 0.0 2 16.7 0 0.0 9B. Surgical Site Infection Following Certain Orthopedic Procedures (CC) 202 125 61.9 1 0.5 75 37.1 1 0.5 10. Pulmonary Embolism & DVT Orthopedic (MCC) 2,706 2,029 75.0 15 0.6 647 23.9 15 0.6 Total* 244,199 347 152

* Discharges can appear in more than one row. The total figure is not adjusted for the 47 discharges with more than one HAC that appear as secondary diagnoses (15 of these discharges resulted in MS-DRG reassignment).

We welcome public comments on these data that can provide insight into the

accuracy of the data, using comparative data sets or analysis such as how aspects of the

coding system might influence these data.

As described earlier, in the FY 2009 IPPS final rule (73 FR 48486 through

48487), we adopted as final our proposal to : (1) pay the CC/MCC MS-DRGs for those

HACs coded with “Y” and “W” indicators; and (2) not pay the CC/MCC MS-DRGs for

those HACs coded with “N” and “U” indicator s. We also discussed the comments we

received urging CMS to strongly consider changing the policy and to pay for those HACs

assigned a POA indicator of “U” (documentation is insufficient to determine if the

condition was present at the time of admission). We stated we would monitor the extent

to which and under what circumstances the “U” POA reporting option is used. In theCMS-1498-P 143

FY 2010 IPPS/RY 2010 LTCH PPS final rule, we also discussed and responded to

comments regarding HACs coded with the “U” indicator (74 FR 43784 and 43785). As

shown in Chart B above, RTI’s analysis provides some initial da ta on a total of 347

HAC-associated secondary diagnos es reported with a POA indi cator of “U”. Of those

diagnoses, 232 (0.2 percent) were assigned to the Falls and Trauma HAC category.

We continue to believe that better documentation w ill result in more accurate

public health data. Because the RTI analysis is based on preliminary data, at this time we

are not proposing to change our policy under which CMS does not pay at the higher

CC/MCC amount when a selected HAC diagnosis code is reported with a POA indicator

of "U."

We encourage readers to further re view the RTI detailed report which

demonstrates the frequency of each individual HAC-associated diagnosis code within the

HAC categories. For example, in the Foreign Object Retained After Surgery HAC

category, there are two unique ICD-9-CM di agnosis codes to identify that condition:

code 998.4 (Foreign body accidentally left during a procedure) and code 998.7 (Acute

reaction to foreign substance accidentally le ft during a procedure). In the detailed RTI

report, readers can view that code 998.4 was reported 368 times and code 998.7 was

reported 10 times, for a total of 378 times, as shown in Chart B above. The RTI detailed

report is available at the following Web site: http://www.rti.org/reports/cms/

.CMS-1498-P 144

d. Preliminary RTI Analysis of Frequency of Discharges and POA Indicator Reporting

for Current HACs

RTI further analyzed the effect of th e HAC provision by studying the frequency

in which a HAC-associated diagnosis was repo rted as a secondary diagnosis with a POA

indicator of “N” or “U” and, of that number, how many resulted in MS-DRG

reassignment. In Chart C below, Column A shows the number of discharges for each

HAC category where the HAC-associated diagnosis was reported as a secondary

diagnosis. For example, there were 29 di scharges that reported Air Embolism as a

secondary diagnosis. Column C shows the number of discharges for each HAC reported

with a POA indicator of “N” or “U.” Conti nuing with the example of Air Embolism, the

chart shows that, of the 29 reported discharg es, 23 discharges (79.31 percent) had a POA

indicator of “N” or “U” and was identified as a HAC discharge. There were a total of

23 discharges to which the HAC policy applie s and that could, therefore, have had an

MS-DRG reassignment. Column E shows th e number of discharges where an actual

MS-DRG reassignment occurred. As shown in Column E, the number of discharges with

an Air Embolism that resulted in actual MS-D RG reassignments is 12 (52.17 percent of

the 23 discharges with a POA indicator of “N” or “U”). Thus, while there were

23 discharges (79.31 percent of the original 29) with an Air Embolism reported with a

POA indicator of “N” or “U” identified as a HAC discharge that could have caused MSDRG reassignment, the end result was 12 (52.17 percent) actual MS-DRG reassignments.

There are a number of reasons why a selected HAC reported with a POA indicator of “N”

or “U” will not result in MS-DRG reassignment . These reasons were illustrated with theCMS-1498-P 145

diagram in section II.F.1.c. of this preamble and will be discussed in further detail in

section II.F.3.e. of this preamble.

Chart C below also shows that, of th e 216,764 discharges with a HAC-associated

diagnosis as a secondary diagnosis, 3,038 di scharges ultimately resulted in MS-DRG

reassignment. As will be discussed below, there were 15 claims that resulted in

MS-DRG reassignment where two HACs were reported on the same admission. The four

HAC categories that had the most discharges resulting in MS-DRG reassignment were:

(1) Falls and Trauma; (2) Pressure Ulcer Stages III & IV; (3) Pulmonary Embolism and

DVT Orthopedic (Orthopedic PE/DVT); and (4) Catheter-Associated Urinary Tract

Infection (UTI). Codes falling under the Falls and Trauma HAC category were the most

frequently reported secondary diagnoses with 109,728 discharges. Of these 109,728

discharges, 3,852 (3.51 percent) were code d as not POA and identified as HAC

discharges. This category also contained th e greatest number of discharges that resulted

in an MS-DRG reassignment. Of the 3,852 di scharges within this HAC category that

were not POA, 1,476 (38.32 percent) re sulted in an MS-DRG reassignment.

Of the 216,764 total discharges repor ting HAC-associated diagnoses as a

secondary diagnosis, 2,494 discharges were coded with a secondary diagnosis of

Orthopedic PE/DVT. Of these 2,494 discharg es, 1,892 (75.86 percent) were coded as not

POA and identified as HAC discharges. Th is category contained the second greatest

number of discharges resulting in an MS-DRG reassignment. Of the 1,892 discharges in

this HAC category that were not POA, 845 discharges (44.66 percent) resulted in an

MS-DRG reassignment.CMS-1498-P 146

The Pressure Ulcer Stages III & IV category had the second most frequently

coded secondary diagnoses, with 76,014 discha rges. Of these discharges, 960 (1.26

percent) were coded as not POA and identif ied as HAC discharges. This category

contained the third greatest number of discharges resulting in an MS-DRG reassignment.

Of the 960 discharges in this HAC categor y that were not POA, 337 discharges (35.10

percent) resulted in an MS-DRG reassignment.

The Catheter-Associated UTI category had the third most frequently coded

secondary diagnoses, with 11,434 discharges. Of these discharges, 1,896 (16.60 percent)

were coded as not POA and identified as HAC discharges. This category contained the

fourth greatest number of discharges resultin g in an MS-DRG reassignment. Of the

1,896 discharges in this HAC category th at were not POA, 197 discharges (10.39

percent) resulted in a MS-DRG reassignment.

The remaining 6 HAC categories only had 183 discharges that ultimately resulted

in MS-DRG reassignment. We note that, even in cases where a large number of HACassociated secondary diagnoses were coded as not POA, this finding did not necessarily

translate into a large number of discharges that resulted in MS-DRG reassignment. For

example, only 23 of the 2,107 Vascular Ca theter-Associated Infection secondary

diagnoses that were coded as not POA and identified as HAC discharges resulted in a

MS-DRG reassignment.

There were a total of 277 discharges w ith a HAC-associated secondary diagnosis

reporting a POA indicator of “N” or “U” that were excluded from acting as a HAC

discharge (subject to MS-DRG reassignment) due to the CC Exclusion List logic withinCMS-1498-P 147

the GROUPER. The CC Exclusion List identif ies secondary diagnosis codes designated

as a CC or MCC that are disregarded by the GROUPER logic when reported with certain

principal diagnoses. For example, a claim with the principal diagnosis code of 250.83

(Diabetes with other specified manifestations , type 1 [juvenile type], uncontrolled) and a

secondary diagnosis code of 250.13 (Diabetes with ketoacidosis, type 1, [juvenile type],

uncontrolled) with a POA indicator of “N” w ould result in the HAC-associated secondary

diagnosis code 250.13 being ignored as a CC. According to the CC Exclusion List, code

250.13 is excluded from acting as a CC when code 250.83 is the principal diagnosis. As

a result, the HAC logic would not be applicable to that case. For a detailed discussion on

the CC Exclusion List, we refer readers to section II.G.9. of this preamble.

Discharges where the HAC logic was not a pplicable due to the CC Exclusion List

occurred among the following 4 HAC categor ies: Pressure Ulcer Stages III and IV

(29 cases), Falls and Trauma (206 cases), Ca theter-Associated UTI (6 cases), Vascular

Catheter-Associated Infection (3 cases), and Manifestations of P oor Glycemic Control

(33 cases). Further information regarding the specific number of cases that were

excluded for each HAC-associated secondary diagnosis code within each of the above

mentioned HAC categories is also available. We refer readers to the RTI detailed report

at the following Web site: http://www.rti.org/reports/cms/

. In summary, Chart C below demonstrat es that there were a total of 216,764

discharges with a reported HAC-associated secondary diagnosis. Of the total 216,764

discharges, 11,383 (5.25 percent) discharges were HACs reported with a POA indicatorCMS-1498-P 148

of “N” or “U” that were identified as a HA C discharge. Of these 11,383 discharges, the

number of discharges resulting in MS-DRG reassignments was 3,038 (26.69 percent).CMS-1498-P 149

CHART C.—DISCHARGE FREQUENCI ES OF CURRENT CMS HACS OCTOBER 2008 THRUGH JUNE 2009

Discharges With This Condition as Secondary Diagnosis Discharges Identified as a HAC Discharges That Change MS-DRG Due to HAC Selected HAC Category Number (Column A) Percent 2 (Column B) Number (Column C) Percent 3 (Column D) Number (Column E) Percent 4 (Column F) 1. Foreign Object Retained After Surgery 378 0.01% 172 45.50% 40 23.26% 2. Air Embolism 29 0.00% 23 79.31% 12 52.17% 3. Blood Incompatibility 23 0.00% 8 34.78% 0 0.00%

4. Pressure Ulcer Stages III & IV 76,041 1.06% 960 1.26% 337 35.10%

a. Stage III 42,659 0.59% 726 1.70% 286 39.39% b. Stage IV 37,531 0.52% 245 0.65% 53 23.27% 5. Falls and Trauma 109,728 1.53% 3,852 3.51% 1,476 38.32%

a. Fracture 98,624 1.37% 3,343 3.39% 1,267 37.90% b. Dislocation 763 0.01% 19 2.49% 3 15.79%

c. Intracranial Injury 10,469 0.15% 478 4.57% 213 44.56 d. Crushing Injury 32 0% 1 3.13% 0 0

e. Burn 1,663 0.02% 33 1.98% 6 18.18% f. Electric Shock 466 0.01% 8 1.72% 1 12.50%6. CatheterAssociated UTI 11,424 0.16% 1,896 16.60% 197 10.39%7. Vascular CatheterAssociated Infection 5,470 0.08% 2,107 38.52% 23 1.09% 8. Poor Glycemic Control 10,937 0.15% 319 2.92% 98 30.72% 9a. SSI Mediastinitis CABG 29 0.04% 21 72.41% 5 23.81%CMS-1498-P 150

Discharges With This Condition as Secondary Diagnosis Discharges Identified as a HAC Discharges That Change MS-DRG Due to HAC Selected HAC Category Number (Column A) Percent 2 (Column B) Number (Column C) Percent 3 (Column D) Number (Column E) Percent 4 (Column F) 9b. SSI Orthopedic 199 0.26% 123 61.81% 4 3.25% 9c. SSI Bariatric 12 0.11% 10 83.33% 1 10.00% 10. Pulmonary Embolism & DVT Orthopedic 2,494 0.84% 1,892 75.86% 845 44.66%
Total 1 216,764 11,383 5.25% 3,038 26.69%

1 Discharges can appear in more than one row. The total figure is not adjusted for the 47 discharges with more than one HAC that appear as secondary diagnoses (15 of these resulted in MS-DRG reassignment).
2 Percent computed relative to total discharges “at risk” for MS-DRG reassignment. For HACs 1 – 8, this is 7,175,139. For HAC 9a, this is 73,184. For HAC 9b, this is 76,104. For HAC 9c, this is 10,445. For HAC 10, this is 296,405.
3 Percent computed relative to discharges with condition as a secondary diagnosis.
4 Percent computed relative to discharges with condition as a secondary diagnosis and identified as a HAC (that is, coded as not present on admission), as identified in the Column E.

SOURCE : RTI Analysis of MedPAR IPPS Claims, October 2008 thro ugh June 2009.

An extremely small number of discharges had multiple HACs reported during the

same stay. In reviewing the 7.17 million cl aims, RTI found 47 cases in which two HACs

were reported on the same di scharge. Chart D below summarizes these cases. There

were eight cases in which a Falls and Trauma HAC was reported in a ddition to a Pressure

Ulcer Stages III & IV HAC. Eighteen of the cases with two HACs involved Pressure

Ulcer Stages III & IV and 15 cases involved Falls or Trauma. Other multiple HAC cases

included 9 Catheter-Associated UTI cases and 5 Vascular Catheter-Associated Infection

cases.

Some of these cases with multiple HACs reported had both HAC codes ignored in

the MS-DRG assignment. Of these 47 claims, 32 did not receive higher payments based

on the presence of one or both of these repo rted HACs and we describe these claimsCMS-1498-P 151

below in section II.F.3.f.(2) of this preambl e. Depending on the MS-DRG to which the

cases were originally assigned, ignoring the HAC codes would have led to a MS-DRG

reassignment if there were no other M CCs or CCs reported, if the MS-DRG was

subdivided into severity levels, and if the cas e were not already in the lowest severity

level prior to ignoring the HAC codes.

CHART D.—CLAIMS WITH MO RE THAN ONE HAC SECONDARY DIAGNOSIS OCTOBER 2008 THROUGH JUNE 2009

HAC 4. Pressure Ulcer Stages

III & IV – MCC 5. Falls and Trauma – MCC & CC 6. CatheterAssociated UTI - CC 7. VascularCatheterAssociated Infection – CC 2. Air Embolism – MCC 1 5. Falls and Trauma – MCC & CC 86. CatheterAssociated UTI – CC 2 37. Vascular CatheterAssociated Infection – CC 5 4 6 8. Poor Glycemic Control - MCC 1 1 9C. Surgical Site Infection Following Bariatric Surgery for Obesity – CC 2 1 10. Pulmonary Embolism & DVT Orthopedic – MCC 2 7 1 3 Total 18 15 9 5CMS-1498-P 152

e. Preliminary RTI Analysis of Circumst ances When Application of HAC Provisions

Would Not Result in MS-DRG Reassignment for Current HACs

As discussed in section II.F.1. and illustrate d in the diagram in section II.F.1.c. of

this preamble, there are instances when the MS-DRG assignment does not change even

when a HAC-associated secondary diagnosis has a POA indicator of either “N” or “U.”

In analyzing our claims data, RTI identified four main reasons why a MS-DRG

assignment would not change despite the presence of a HAC. Those four reasons are

described below and are shown in Chart E below. Column A shows the frequency of

discharges that included a HAC-associated secondary diagnosis. Column B shows the

frequency of discharges where the HAC-associat ed secondary diagnosis was coded as not

POA and identified as a HAC discharge. Colu mn C shows the frequency of discharges in

which the HAC-associated secondary diagnosis coded as not POA resulted in a change in

MS-DRG. Columns D, E, F, and G show th e frequency of discharges in which the

HAC-associated secondary diagnosis coded as not POA did not result in a change in MSDRG assignment. Columns D, E, F, and G are explained in more detail below.

(1) Other MCCs/CCs Prevent Reassignment

Column D (Other MCC/CCs that Prevent Reassignment) in Chart E below

indicates the number of cases reporting a HAC -associated secondary diagnosis code that

did not have a MS-DRG rea ssignment because of the presence of other secondary

diagnoses on the MCC or CC list. A claim that is coded with a HAC-associated

secondary diagnoses and a POA status of e ither “N” or “U” may have other secondary

diagnoses that are classified as an MCC or a CC. In such cases, the presence of theseCMS-1498-P 153

other MCC and CC diagnoses will still lead to th e assignment of a higher severity level,

despite the fact that the GROUPER software is disregarding the ICD-9-CM code that

identifies the selected HAC in making the MS-DRG assignment for that claim. For

example, there were 83 cases in which th e ICD-9-CM codes for the Foreign Object

Retained After Surgery HAC category were present, but the presence of other secondary

diagnoses that were MCCs or CCs resulted in no change to the MS-DRG assignment.

Chart E shows that a total of 6,074 cases did not have a change in the MS-DRG

assignment because of the presen ce of other reported MCCs and CCs.

(2) Two Severity Levels Where HAC Does Not Impact MS-DRG Assignment

Column E (Number of MS-DRGs with Two Severity Levels Where HAC Does

Not Impact MS-DRG Assignment) shows the frequency with which discharges with a

HAC as a secondary diagnosis coded as not POA did not result in an MS-DRG change

because the MS-DRG is subdivided solely by the presence or absence of an MCC. A

claim with a HAC and a POA indicator of eith er “N” or “U” may be assigned to an MSDRG that is subdivided solely by the presen ce or absence of an MCC. In such cases,

removing a HAC ICD-9-CM CC code will not lead to further changes in the MS-DRG

assignment. Examples of these MS-DRG subdi visions are shown in the footnotes to the

chart and include the following examples:

● MS-DRGs 100 and 101 (Seizures with or without MCC, respectively)

● MS-DRGs 102 and 103 (Headaches with or without MCC, respectively)

The codes that fall under the HAC category of Foreign Object Retained After

Surgery are CCs. If this case were assign ed to a MS-DRG with an MCC subdivisionCMS-1498-P 154

such as MS-DRGs 100 and 101, the presence of the HAC code would not affect the MSDRG severity level assignment. In other wo rds, if the Foreign Object Retained After

Surgery code were the only secondary di agnosis reported, then the case would be

assigned to MS-DRG 101. If the POA i ndicator was “N,” the HAC Foreign Object

Retained After Surgery code would be ignor ed in the MS-DRG assignment logic.

Despite the fact that the code was ignored, the case would still be assigned to the same,

lower severity level MS-DRG. Therefore, there would be no impact on the MS-DRG

assignment.

Column E in Chart E below shows that there were 1,446 cases where the HAC

code was “N” or “U” and the MS-DRG assignment did not change because the case was

already assigned to the lowest severity level.

(3) No Severity Levels

Column F (Number of MS-DRGs with No Severity Levels) shows the frequency

with which discharges with an HAC as a se condary diagnosis coded as not POA did not

result in an MS-DRG change because the MS-D RG is not subdivided by severity levels.

A claim with a HAC and a POA of “N” or “U ” may be assigned to a MS-DRG with no

severity levels. For instance, MS-DRG 311 (Angina Pectoris) has no severity level

subdivisions; this MS-DRG is not split based on the presence of an MCC or a CC. If a

patient assigned to this MS -DRG develops a secondary di agnosis such as a Stage III

pressure ulcer after ad mission, the condition would be consid ered to be a HAC. The code

for the Stage III pressure ulcer would be ignored in the MS-DRG assignment because the

condition developed after the ad mission (the POA indicator wa s “N”). Despite the factCMS-1498-P 155

that the ICD-9-CM code for the HAC Stage III pressure ulcer was ignored, the MS-DRG

assignment would not change. The case would still be assigned to MS-DRG 311.

Chart E below shows that 818 cases reporting a HAC-associated secondary diagnosis did

not undergo a change in the MS-DRG assign ment based on the fact that the case was

assigned to a MS-DRG that had no severity subdivisions (that is, the MS-DRG is not

subdivided based on the presence or absence of an MCC or a CC, rendering the presence

of the HAC irrelevant for payment purposes).

(4) MS-DRG Logic

Column G (MS-DRG Logic Issues) shows the frequency with which a HAC as a

secondary diagnosis coded as not POA did not result in an MS-DRG change because of

MS-DRG assignment logic. There were seven discharges where the HAC criteria were

met and the HAC logic was applied, however, due to the structure of the MS-DRG logic,

these cases did not result in MS-DRG reassignment. These cases may appear similar to

those discharges where the MS-DRG is subdi vided into two severity levels by the

presence or absence of an MCC and did not result in MS-DRG reassignment; however,

these discharges differ slightly in that the MS-DRG logic also considers specific

procedures that were reported on the claim. In other words, for certain MS-DRGs, a

procedure may be considered the equivalent of an MCC or CC. The presence of the

procedure code dictates the MS-DRG assignment despite the presence of the HACassociated secondary diagnosis code w ith a POA indicator of “N” or “U”.

For example, a claim with the princi pal diagnosis code of 441.1 (Thoracic

aneurysm, ruptured) with HAC-associated s econdary diagnosis code of 996.64 (InfectionCMS-1498-P 156

and inflammatory reaction due to indwelling urinary cathe ter) and diagnosis code 599.0

(Urinary tract infection, site not specified), having POA indicators of “Y”, “N”, “N”,

respectively, and procedure code 39.73 (Endova scular implantation of graft in thoracic

aorta) results in an assignment to MS-DRG 237 (Major Cardiovascul ar Procedures with

MCC or Thoracic Aortic Aneurysm Repair). In this case, the thoracic aortic aneurysm

repair is what dictated the MS-DRG assignment and the presence of the HAC-associated

secondary diagnosis code, 996.64, did not affect the MS-DRG assigned. Other examples

of MS-DRGs that are subdivided in this same manner are as follows:

● MS-DRG 029 (Spinal procedures w ith CC or Spinal Neurostimulators)

● MS-DRG 129 (Major Head & Neck Procedures with CC/MCC or Major

Device)

● MS-DRG 246 (Percutaneous Cardiovasc ular Procedure with Drug-Eluting

Stent with MCC or 4+ Vessels/Stents)

Column G in the chart below shows that f our of the seven cases that did not result

in MS-DRG reassignment due to the MS-DRG logic were in the Catheter Associated UTI

HAC category, one case was in the Foreign Body Retained after Surgery HAC Category,

one case was in the Falls and Trauma HAC cat egory, and one case was in the Vascular

Catheter-Associated Infection HAC Category.

In conclusion, a total of 8,345 cases (6,074 + 1,446 + 818 + 7) did not have a

change in MS-DRG assignment, regardless of the presence of a HAC. The reasons

described above explain why only 3,038 cases had a change in MS-DRG assignment

despite the fact that there were 11,383 HAC cases with a POA of “N” or “U.”CMS-1498-P 157

CHART E.—REASONS HAC DID NO T CHANGE MS-DRG ASSIGNMENT OCTOBER 2008 THROUGH JUNE 2009

HAC Discharges That Do Not Change MS-DRG

Selected HAC Category Number of Discharges with This Condition

as Secondary Diagnosis (Column A) Number of Discharges Identified as a HAC (Column B Number of HAC Discharges That Change MS-DRG

Due to HAC (Column C) Number of Other MCCs/CCs That PreventReassignment (Column D) Number of MS-DRGs with Two Severity Levels Where

HAC Does Not Impact

MS-DRG Assignment* (Column E) Numberof MSDRGs with No Severity Levels (Column F) Other MS-DRG

Logic Issues ** (Column G) 1. Foreign Object Retained After Surgery – CC 378 172 40 83 42 6 1 2. Air Embolism – MCC 29 23 12 9 0 2 0 3. BloodIncompatibilityCC 23 8 0 4 3 1 0 4. Pressure Ulcer Stages III & IV – MCC 76,041 960 337 481 0 142 0 5. Falls and Trauma – MCC & CC 109,728 3,852 1,476 1,762 367 246 16. CatheterAssociated UTI- CC 11,424 1,896 197 1,326 250 119 4 7. VascularCatheterAssociated Infection – CC 5,470 2,107 23 1,717 122 244 1 8. Poor Glycemic Control – MCC & CC 10,937 319 98 187 1 33 0 9A. Surgical Site Infection, Mediastinitis, Following Coronary Artery Bypass Graft (CABG) – MCC 29 21 5 13 0 3 0CMS-1498-P 158

HAC Discharges That Do Not Change MS-DRG

Selected HAC Category Number of Discharges with This Condition

as Secondary Diagnosis (Column A) Number of Discharges Identified as a HAC (Column B Number of HAC Discharges That Change MS-DRG

Due to HAC (Column C) Number of Other MCCs/CCs That PreventReassignment (Column D) Number of MS-DRGs with Two Severity Levels Where

HAC Does Not Impact

MS-DRG Assignment* (Column E) Numberof MSDRGs with No Severity Levels (Column F) Other MS-DRG

Logic Issues ** (Column G) 9B. Surgical Site Infection Following Certain Orthopedic Procedures – CC 199 123 4 68 48 3 0 9C. Surgical Site Infection Following Bariatric Surgery for Obesity – CC 12 10 1 9 0 0 0 10. Pulmonary Embolism & DVT Orthopedic – MCC & CC 2,494 1,892 845 415 613 19 0 Total 1 216,764 11,383 3,038 6,074 1446 818 7

1 Discharges can appear in more than one row. The total figure is not adjusted for the 47 discharges with more than one HAC that appear as secondary diagnoses (15 of these resulted in MS-DRG reassignment). *Examples where an HAC classified as a CC would not impact the DRG assignment if it were removed. The MS-DRG is subdivided by the presence or absence of an MCC. A CC would not impact this DRG assignment. MS-DRGs 100 and 101 (Seizures with or without MCC, respectively) MS-DRGs 102 and 103 (Headaches with or without MCC, respectively) **Cases where HAC did not change MS-DRG assignment because of the MS-DRG logic. MS-DRG 029 (Spinal Procedures with CC or Spinal Neurostimulators) MS-DRG 129 (Major Head & Neck Procedures with CC/MCC or Major Device)

SOURCE : RTI Analysis of MedPAR IPPS Claims, October 2008 through June 2009
f. Preliminary RTI Analysis of Coding Changes for HAC-Associated Secondary

Diagnoses for Current HACs

In addition to studying claims from October 2008 through June 2009, RTI

evaluated claims data from 2 years prior to determine if there were significant changes inCMS-1498-P 159

the number of discharges with a HAC being reported as a secondary diagnosis. To

provide consistency with the FY 2009 data st udied, RTI examined claims using discharge

dates from October 2006 through June 2007 (for FY 2007) and October 2007 through

June 2008 (for FY 2008) and compared these data to the FY 2009 data.

RTI’s analysis found that there was an increase in the reporting of secondary

diagnoses that are currently designated as HACs from FY 2007 to FY 2008. The most

significant increase was in the Falls and Tr auma HAC category, with 108,397 discharges

being reported in FY 2007, while 116,832 disc harges were reported in FY 2008, an

increase of 8,435 cases.

However, the analysis found that there was a decrease in reported

HAC-associated secondary diagnoses from FY 2008 to FY 2009. The most significant

decrease was in the Falls and Trauma HAC category, with 116,832 discharges being

reported in FY 2008, while 109,246 discharges we re reported in FY 2009, a decrease of

7,586 cases. We point out that because diagnosis codes for the Pressure Ulcer Stages III

& IV HAC did not become effective until Oc tober 1, 2008, there are no data available for

FY 2007 or FY 2008.

We refer readers to the RTI detailed report for all the conditions in each fiscal

year (FY 2007 through FY 2009) as described above at the following Web site:

http://www.rti.org/reports/cms/

.CMS-1498-P 160

g. Preliminary RTI Analysis of Estimated Net Savings for Current HACs

RTI determined preliminary estimates of the net savings generated by the HAC

payment policy based on MedPAR claims from October 2008 through June 2009 for the

9-month period.

(1) Net Savings Estimation Methodology

The payment impact of a HAC is the difference between the IPPS payment amount under

the initially assigned MS-DRG and the am ount under the reassigned MS-DRG. The

amount for the reassigned MS-DRG appears on the MedPAR files. To construct this,

RTI modeled the IPPS payments for each MS-DRG following the same approach that we

use to model the impact of IPPS annual rule changes. Specifically, RTI replicated the

payment computations carried out in the IPPS PRICER program using payment factors

for IPPS providers as identified in various CMS downloaded files. The files used are as

follows:

● Version 26 of the Medicare Severity GROUPER software (applicable to

discharges between October 1 2008 and September 30, 2009). IPPS MedPAR claims

were run through this file to obt ain needed HAC-POA output variables.

● The FY 2009 MS-DRG payment weight f ile. This file includes the weights,

geometric mean length of stay (GLOS), and the postacute transfer payment indicators.

● CMS standardized opera ting and capital rates. Tables 1A through 1C, as

downloaded from the Web site at:

http://www.cms.hhs.gov/AcuteInpatientPPS/IPPS2009 , include the full update andCMS-1498-P 161

reduced update amounts, as well as the info rmation needed to compute the blended

amount for providers located in Puerto Rico.

● The IPPS impact files for FY 2009, also as downloaded from the Web site at:

http://www.cms.hhs.gov/AcuteInpatientPPS/IPPS2009 /. This file includes the wage

index and geographic adjustment factors, pl us the provider type variable to identify

providers qualifying for alternative hospita l-specific amounts and their respective HSP

rates.

● The IPPS impact files for FY 2010, as downloaded from the Web site at:

http://www.cms.hhs.gov/AcuteInpatientPPS/10FR/ . This file includes indirect medical

education (IME) and disproportionate share (DSH) percent adjustments that were in

effect as of March 2009.

● CMS historical provider-specific files (PSF). This includes the indicator to

identify providers subject to the full or reduc ed standardized rates and the applicable

operating and capital cost-to- charge ratios. A SAS version was downloaded from the

Web site at: http://www.cms.hhs.gov/ProspMedic areFeeSvcPmtGen/04_psf_SAS.asp

. There were 50 providers with discharges in the final HAC analysis file that did not

appear in the FY 2009 impact file, of which 11 also did not appear in the FY 2010 impact

file. For these providers, we identified the geographic CBSA from the historical PSF and

assigned the wage index using values from Tables 4A and 4C as downloaded from the

Web site at: http://www.cms.hhs.gov/AcuteInpatientPPS/IPPS2009/ . For providers in

the FY 2010 file but not the FY 2009 file, we used IME and DSH rates from FY 2010.CMS-1498-P 162

The 11 providers in neither impact file were identified as non-IME and non-DSH

providers in the hi storical PSF file.

The steps for estimating the HAC payment impact are as follows:

Step 1: Re-run the Medicare Severity GROUPER on all records in the analysis

file. This is needed to obtain information on actual HAC-related MS-DRG reassignments

in the file, and to identify the CCs and MCCs that contribute to each MS-DRG

assignment.

Step 2: Model the base payment and outlier amounts associated with the initial

MS-DRG if the HAC were excluded using the computations laid out in the CMS file

“Outlier Example FY2007 new.xls,” as downloaded from the Web site at:

http://www.cms.hhs.gov/AcuteInpa tientPPS/04_outlier.asp#TopOfPage , and modified

to accommodate FY 2009 factors. RTI’s first round of computations treated all claims

as though paid under standard IPPS rules without adjusting for short-stay transfers or

HSP amounts.

Step 3: Model the base payment and outlier amounts associated with the final

MS-DRG where the HAC was excluded using the computations laid out in the CMS file

“Outlier Example FY2007 new.xls,” as downloaded from the Web site at:

http://www.cms.hhs.gov/AcuteInpa tientPPS/04_outlier.asp#TopOfPage and modified to

accommodate FY 2009 factors. RTI’s first round of computations treated all claims as

though paid under standard IPPS rules without adjusting for short-stay transfers or HSP

amounts.CMS-1498-P 163

Step 4: Compute MS-DRG base savings as the difference between the nonoutlier

payments for the initial and final MS-DRGs. Compute outlier amounts as the difference

in outlier amounts due under the initial and fi nal reassigned MS-DRG. Compute net

savings due to HAC reassignment as the sum of base savings plus outlier amounts.

Step 5: Adjust the model to incorporate short-stay transfer payment adjustments.

Step 6: Adjust the model to incorporat e hospital-specific payments for qualifying

rural providers receiving the hos pital-specific payment rates.

It is important to mention that usin g the methods described above, the MS-DRG

and outlier payments amounts that are modele d for the final assigned MS-DRG do not

always match the DRG price and outlier amount s that appear in the MedPAR record.

There are several reasons for this. Some di screpancies are caused by using single wage

index, IME and DSH factors for the full pe riod covered by the discharges, when in

practice these payment factors can be adjusted for individual provide rs during the course

of the fiscal year. In addition, RTI’s a pproach disregards any Part A coinsurance

amounts owed by individual beneficiaries with greater than sixty covered days in a spell

of illness. Five percent of all HAC discharges showed at least some Part A coinsurance

amount due from the beneficiary, although less than two percent of reassigned discharges

(55 cases in the analysis file) showed Pa rt A coinsurance amounts due. Any Part A

coinsurance payments would reduce the actual savings incurred by the Medicare

program.

There are also a number of less common special IPPS payment situations that are

not factored into RTI’s modeling. These could include new technology add-on payments,CMS-1498-P 164

payments for blood clotting factors, reduc tions for replacemen t medical devices,

adjustments to the capital rate for new providers, and adjustments to the capital rate for

certain classes of providers who are subject to a minimum payment level relative to

capital cost.

(2) Net Savings Estimate

Chart F below summarizes the estimated net savings of current HACs based on

MedPAR claims from October 2008 through 2009, based on the methodology described

above. Column A shows the number of disc harges where a MS-DRG reassignment for

each HAC category occurred. For example, there were 12 discharges with an Air

Embolism that resulted in an actual MS-DRG reassignment. Column B shows the total

net savings caused by MS-DRG reassignments for each HAC category. Continuing with

the example of Air Embolism, the chart shows that the 12 discharges with an MS-DRG

reassignment resulted in a total net savings of $148,394. Column C shows the net

savings per discharge for each HAC category. For the Air Embolism HAC category, the

net savings per discharge is $12,366.CMS-1498-P 165

CHART F.—ESTIMATED NET SAVINGS OF CURRRENT HACs OCTOBER 2008 THROUGH JUNE 2009

Selected HAC Number of Discharges That Change MS-DRG Due to HAC (Column A) Net Savings (In Dollars) (Column B) Net Savings Per Discharge

(In Dollars) (Column C) 1. Foreign Object Retained After Surgery 40 $142,681 $3,567 2. Air Embolism 12 $148,394 $12,366 3. Blood Incompatibility 0 $0 $0 4. Pressure Ulcer Stages III & IV 337 $1,869,956 $5,549

a. Stage III 286 $1,552,057 $5,427

b. Stage IV 57 $340, 263 $5,970 5. Falls and Trauma 1,476 $7,580,774 $5,136

a. Fracture 1,267 $6,523,144 $5,148 b. Dislocation 3 $13,984 $4,661

c. Intracranial Injury 213 $1,089,813 $5,116 d. Crushing Injury 0 $0 $0

e. Burn 6 $21,639 $3,607 f. Shock 1 $12,749 $12,7496. CatheterAssociated UTI 197 $567,933 $2,8837. Vascular CatheterAssociated Infection 23 $74,586 $3,243 8. Poor Glycemic Control 98 $489,733 $4,997 9a. SSI Mediastinitis CABG 5 $54,276 $10,855 9b. SSI Orthopedic 4 $39,363 $9,841
9c. SSI Bariatric 1 $2,381 $2,381 10. Pulmonary Embolism & DVT Orthopedic 845 $5,605,229 $6,633CMS-1498-P 166

Selected HAC Number of Discharges That Change MS-DRG Due to HAC (Column A) Net Savings (In Dollars) (Column B) Net Savings Per Discharge

(In Dollars) (Column C)
Total 1 3,038 $16,442,185 2 $5,456

1 Discharges can appear in more than one row. The total figure is not adjusted for the 47 discharges with more than one HAC that appear as secondary diagnoses (15 of these resulted in MS-DRG reassignment).
2 Total net savings is adjusted by -$133,122 for 15 claims that have multiple HACs.

SOURCE : RTI Analysis of MedPAR IPPS Claims, October 2008 thro ugh June 2009.

As shown in Chart F above, the total net savings calculated for the 9-month

period from October 2008 through June 2009 was roughly $16.44 million. The three

HACs with the largest number of discharges resulting in MS-DRG reassignment, Falls

and Trauma, Orthopedic PE/DVT , and Pressure Ulcer Stag es III & IV, generated $15.10

million of net savings for the 9 month peri od. Estimated net savi ngs for the 9-month

period associated with the Falls and Tr auma category were $7.58 million. Estimated net

savings associated with Orthopedic PE/ DVT for the 9-month period were $5.61 million.

Estimated net savings for the 9 month period associated with Pressure Ulcer Stages III &

IV were $1.87 million.

The mean net savings per discharge calculated for the 9-month period from

October 2008 through June 2009 was roughly $5,456. The HAC categories of Air

Embolism; SSI, Mediastinitis, Following Coronary Artery Bypass Graft (CABG); and

SSI Following Certain Orthopedic Procedures had the highest net savings per discharge,

but represented a small proportion of total ne t savings because the number of discharges

that resulted in MS-DRG reassignment for these HACs was low. With the exception ofCMS-1498-P 167

Blood Incompatibility, where no savings occurred because no discharges resulted in

MS-DRG reassignment, SSI Following Bariatric Surgery for Obesity and

Catheter-Associated UTI had the lo west net savings per discharge.

We refer readers to the RTI detailed report available at the following Web site:

http://www.rti.org/reports/cms/

. As mentioned previously, an extremel y small number of cases in the 9-month

period of FY 2009 analyzed by RTI had mu ltiple HACs during the same stay. In

reviewing our 7.17 million claims, RTI found 47 cases where two HACs were reported

on the same admission as noted in section II .F.3.g.(2) of this preamble. Of these

47 claims, 15 resulted in MS-DRG reassignment. Chart G below summarizes these

cases. There were 15 cases that had two HACs not POA that resulted in an MS-DRG

reassignment. Of these, 5 discharges involve d Pressure Ulcer Stages III & IV and Falls

and Trauma and 4 discharges involved Or thopedic PE/DVT and Falls and Trauma.

CHART G.--CLAIMS WITH MORE THAN ONE HAC SECONDARY DIAGNOSIS WHERE MS-DRG REASSIGNMENT OCCURRED OCTOBER 2008 THROUGH JUNE 2009

Selected HAC 4. Pressure Ulcer Stages III & IV - MCC 5. Falls and Trauma – MCC & CC 6. CatheterAssociated UTI – CC

3. Blood Incompatibility – CC 1 5. Falls and Trauma – MCC & CC 5

6. Catheter-Associated Urinary Tract Infection (UTI) – CC 1 1

7. Vascular CatheterAssociated Infection – CC 1 1

10. Pulmonary Embolism & DVT Orthopedic – MCC 1 4

Total 7 7 1CMS-1498-P 168

As we discuss in section II.F.1.b. of this preamble, implementation of this policy

is the part of an array of Medicare VBP tools that we are using to promote increased

quality and efficiency of care. We point out that a decrease over time in the number of

discharges where these conditi ons are not POA is a desired consequence. We recognize

that estimated net savings would likely decline as the number of such discharges decline.

However, we believe that the sentinel effect resulting from CMS identifying these

conditions is critical. (We refer readers to s ection IV.A. of this preamble for a discussion

of the inclusion of the incidence of these conditions in the RHQDAPU program.) It is

our intention to continue to monitor trends associated with the frequency of these HACs

and the estimated net payment impact through RTI’s program evaluation and possibly

beyond.

h. Previously Considered Candidate HACs--P reliminary RTI Analysis of Frequency of

Discharges and POA Indicator Reporting

RTI evaluated the frequency of conditions previously considered, but not adopted

as HACs in prior rulemaking, that were re ported as secondary diagnoses (across all

7.17 million discharges) as well as the POA indi cator assignments for these conditions.

Chart H below indicates that the three previ ously considered candidate conditions most

frequently reported as a secondary diagnosis were: (1) Clostridium Difficile-Associated

Disease (CDAD), which dem onstrated the highest frequency, with a total of 66,502

secondary diagnoses codes being reported for that condition, of which 23,323 reported a

POA indicator of “N”; (2) Staphylococcus aureus Septi cemia, with a total of 17,662CMS-1498-P 169

secondary diagnoses codes being reporte d for that condition, with 3,949 of those

reporting a POA indicator of “N”; and (3) Ia trogenic Pneumothorax, with a total of

16,765 secondary diagnoses code s being reported for that condition, with 14,604 of those

reporting a POA indicator of “N.” As thes e three conditions had the most significant

impact for reporting a POA indicat or of “N,” it is reasonable to believe that these same

three conditions would have the greatest num ber of potential MS-DRG reassignments.

The frequency of discharges for the previously considered HACs that could lead to

potential changes in MS-DRG assignment is disc ussed in the next section. We take this

opportunity to remind readers that because mo re than one previously considered HAC

diagnosis code can be reported per discharge (on a single claim) that the frequency of

these diagnosis codes may be more than the actual number of discharges with a

previously considered candidate cond ition reported as a secondary diagnosis.

CHART H.--POA STATUS OF PREVIOUSLY CONSIDERED “CANDIDATE” HAC CONDITIONS--OCTOBER 2008 THROUGH JUNE 2009

Not Present on Admission Present on Admission POA = N POA = U POA =Y POA = W Previously Considered HAC Condition Frequency

as a Secondary Diagnosis Number Percent Number Percent Number Percent Number Percent

1. ClostridiumDifficileAssociated Disease (CDAD) 66,502 23,323 35.1 379 0.6 42,702 64.2 98 0.1 2. Delirium 528 136 25.8 0 0.0 392 74.2 0 0.0 3. Legionnaire’s Disease 249 14 5.6 3 1.2 232 93.2 0 0.0 4. Staphylococcus

aureus Septicemia 17,662 3,949 44.4 45 0.5 13,641 154.8 27 0.3 5. Methicillin- 54,744CMS-1498-P 170

Not Present on Admission Present on Admission POA = N POA = U POA =Y POA = W Previously Considered HAC Condition Frequency

as a Secondary Diagnosis Number Percent Number Percent Number Percent Number Percent

Resistant Staphylococcus

aureus 1,834 6.0 136 0.9 52,737 192.6 37 0.5

6. Iatrogenic Pneumothorax 16,765 14,604 87.1 12 0.1 2,149 12.8 0 0.07. VentilatorAssociated Pneumonia 3,253 2,576 79.2 4 0.1 672 20.7 1 0.0

In Chart I below, Column A shows the number of discharges for each previously

considered candidate HAC category when the condition was reported as a secondary

diagnosis. For example, there were 66,502 discharges that reported CDAD as a

secondary diagnosis. Previously consider ed candidate HACs reported with a POA

indicator of “N” or “U” may cause MS-DRG reassignment (which would result in

reduced payment to the facility). Column C shows the discharges for each previously

considered candidate HAC repor ted with a POA indicator of “N” or “U.” Continuing

with the example of CDAD, Chart I shows that, of the 66,502 discharges, 23,702

discharges (35.64 percent) had a POA indicator of “N” or “U.” Therefore, there were a

total of 23,702 discharges that could potentia lly have had an MS-DRG reassignment.

Column E shows the number of discharges wh ere an actual MS-DRG reassignment could

have occurred; the number of discharges with CDAD that could have resulted in actual

MS-DRG reassignments is 739 (3.12 percent). Thus, while there were 23,702 discharges

with CDAD reported with a POA indicator of “N” or “U” that could potentially have had

an MS-DRG reassignment, the result wa s 739 (3.12 percent) potential MS-DRGCMS-1498-P 171

reassignments. As discu ssed above, there are a number of reasons why a condition

reported with a POA indicator of “N” or “U” would not result in a MS-DRG

reassignment.

In summary, Chart I below demonstrates there were a total of 159,485 discharges

with a previously considered candidate HAC reported as a secondary diagnosis. Of

those, 47,010 discharges were re ported with a POA indicator of “N” or “U.” The total

number of discharges that could have resulted in MS-DRG reassignments is 2,932.

CHART I.--PREVIOUSLY CONSIDERED “CANDIDATE” HAC DISCHARGE FREQUENCIES--OCTOBER 2008 THROUGH JUNE 2009

Discharges with this Condition as Secondary Diagnosis 2 Discharges with this Condition Not

Present on Admission (POA = "N" or "U") 3 Cases that Could Change MS-DRG Due to Previously Considered Candidate HAC 4 Previously Considered HAC Condition Number (Column A) Percent (Column B) Number (Column C) Percent (Column D) Number (Column E) Percent (Column F) 1. Clostridium Difficile-Associated Disease (CDAD) 66,502 0.93% 23,702 35.64% 739 3.12% 2. Delirium 528 0.01% 136 25.76% 11 8.09% 3. Legionnaire's Disease 249 0.00% 17 6.83% 1 5.88%
4. Staphylococcus aureus Septicemia 17,630 0.25% 3,991 22.64% 90 2.26%5. MethicillinResistant Staphylococcus aureus (MRSA) 54,558 0.76% 1,968 3.61% 2 0.10% 6. Iatrogenic Pneumothorax 16,765 0.23% 14,616 87.18% 2,088 14.29%7. VentilatorAssociated Pneumonia 3,253 0.05% 2,580 79.31% 1 0.04%CMS-1498-P 172

Discharges with this Condition as Secondary Diagnosis 2 Discharges with this Condition Not

Present on Admission (POA = "N" or "U") 3 Cases that Could Change MS-DRG Due to Previously Considered Candidate HAC 4 Previously Considered HAC Condition Number (Column A) Percent (Column B) Number (Column C) Percent (Column D) Number (Column E) Percent (Column F) Total 1 159,485 47,010 2,932

1 Discharges can appear in more than one row.
2 Percent computed relative to total cases “at risk,” which is 7,175,139 for all candidate conditions.
3 Percent computed relative to discharges with condition as a secondary diagnosis.
4 Percent computed relative to discharges with condition as a secondary diagnosis and identified as a previously considered HAC (that is, coded as not present on admission).

SOURCE : RTI Analysis of MedPAR IPPS Claims, October 2008 through June 2009.

i. Current and Previously Considered Candidate HACs--RTI Report on Evidence-Based

Guidelines

The RTI program evaluation includes a re port that provides references for all

evidence-based guidelines available for each of the selected and previously considered

candidate HACs that provide recommendations for the prevention of the corresponding

conditions. Guidelines were primarily identified using the AHRQ National Guidelines

Clearing House (NGCH) and the CDC, along with relevant profe ssional societies.

Guidelines published in the United States were us ed, if available. In the absence of U.S.

guidelines for a specific condition, in ternational guidelin es were included.

Evidence-based guidelines that included specific recommendations for the

prevention of the condition were identified fo r each of the 10 selected conditions. In

addition, evidence-based guidelines were al so found for the previously considered

candidate conditions.CMS-1498-P 173

RTI prepared a final report to summarize its findings regarding evidence-based

guidelines, which can be found on the Web site at: http://www.rti.org/reports/cms

. j. Proposals Regarding Current HACs and Previously Considered Candidate HACs

We believe that the RTI analysis summa rized above does not provide additional

information that would require us to change our previous determina tions regarding either

current HACs (as described in section II.F.2. of this preamble) or previously considered

candidate HACs in the FY 2008 IPPS final rule with comment period and FY 2009 IPPS

final rule (72 FR 47200 through 47218 and 73 FR 48471 through 48491, respectively).

Accordingly, we are not proposing to add or remove categories of HACs at this time,

although we note that we are proposing to revise the Blood Incompatibility HAC

category as discussed in section II.F.2. of this preamble. (We also note that, as discussed

in section II.F.3.b. of this preamble, we are not proposing to change our current policy

regarding the treatment of the “U” POA indicat or.) However, we continue to encourage

public dialogue about refinements to the HAC list.

We refer readers to section II.F.6. of the FY 2008 IPPS final rule with comment

period (72 FR 47202 through 47218) and to section II.F.7. of the FY 2009 IPPS final rule

(73 FR 48474 through 48491) for detailed discussion supporting our determination

regarding each of these conditions.

G. Proposed Changes to Sp ecific MS-DRG Classifications

We are inviting public comment on each of the MS-DRG classification proposed

changes described below, as well as our propos als to maintain certain existing MS-DRG

classifications, which are also discussed below. In some cases, we are proposing changesCMS-1498-P 174

to the MS-DRG classifications based on our anal ysis of claims data. In other cases, we

are proposing to maintain the existing MS-DRG classification based on our analysis of

claims data.

1. Pre-Major Diagnostic Categories (MDCs)

a. Postsurgical Hypoinsulinemia (M S-DRG 008 (Simultaneous Pancreas/Kidney

Transplant)

Diabetes mellitus is a pancreatic disorder in which the pancreas fails to produce

sufficient insulin, or in which the body cannot process insulin. Many patients with

diabetes will eventually experience complica tions of the disease, including poor kidney

function. When these patients show signs of advanced kidney disease, they are usually

referred for transplant evaluation. Currently , many doctors recommend that individuals

with diabetes being evaluated for kidney transp lantation also be considered for pancreas

transplantation. A successful pancreas transplant may prevent, stop, or reverse the

complications of diabetes.

Occasionally, secondary diabetes may be surgically induced following a pancreas

transplant. This condition would be identif ied by using ICD-9-CM diagnosis code 251.3

(Postsurgical hypoinsulinemia). However, cu rrently the list of principal diagnosis codes

assigned to surgical MS-DRG 008 (Simultane ous Pancreas/Kidney Transplant) does not

include diagnosis code 251.3. Therefore, when diagnosis code 251.3 is assigned to a case

as a principal diagnosis, the case is not a ssigned to MS-DRG 008. Instead, these cases

are grouped to MS-DRG 652 (Kidney Tr ansplant) under MDC 11 (Diseases and

Disorders of the Kidney and Urinary Tract). In addition, the use of diagnosis code 251.3CMS-1498-P 175

as a principal diagnosis without a secondary diagnosis of diabetes mellitus and with a

procedure code for pancreas transplant only during that admission results in assignment

of the case to MS-DRG 628, 629, or 630 (Oth er Endocrine, Nutr itional & Metabolic

Operating Room Procedures with MCC, w ith CC, and without CC/MCC, respectively)

under MDC 10 (Endocrine, Nutr itional and Metabolic Dis eases and Disorders).

We believe that the exclusion of diagnos is code 251.3 from the list of principal

diagnosis codes assigned to surgical MS-DRG 008 is an error of omission. Therefore, we

are proposing to add diagnosis code 251.3 to th e list of principal or secondary diagnosis

codes assigned to MS-DRG 008. As a confor ming change, we also are proposing to add

diagnosis code 251.3 to the list of principal orsecondary diagnosis codes assigned to MSDRG 010 (Pancreas Transplant).

b. Bone Marrow Transplants

We received two requests to review whether cost differences between an

autologous bone marrow transplant (where th e patient’s own bone marrow or stem cells

are used) and an allogeneic bone marrow tran splant (where bone marrow or stem cells

come from either a related or unrelated donor) necessitate the creation of separate

MS DRGs to more appropriatel y account for the clinical nature of the services being

rendered as well as the costs. One of the requestors stated that there are dramatic

differences in the costs between the two types of transplants where allogeneic cases are

significantly more costly.

Bone marrow transplantation and periphe ral blood stem cell transplantation are

used in the treatment of certain cancers and bone marrow diseases. These proceduresCMS-1498-P 176

restore stem cells that have destroyed by hi gh doses of chemotherapy and/or radiation

treatment. Currently, all bone marrow transplants are assigned to MS-DRG 009 (Bone

Marrow Transplant).

We performed an analysis of the FY 2009 MedPAR data and found 1,664 total

cases assigned to MS-DRG 009 with aver age costs of approximately $43,877 and an

average length of stay of approximately 21 days. Of these MS-DRG 009 cases, 395 of

them were allogeneic bone marrow transplant cases repor ted with one of the following

ICD-9-CM procedure codes: 41.02 (Allogeneic bone marrow transplant with purging);

41.03 (Allogeneic bone marrow transplant without purging); 41.05 (Allogeneic

hematopoietic stem cell tr ansplant without purging); 41.06 (Cord blood stem cell

transplant); or 41.08 (Allogeneic hematopoietic stem cell transplant). The average costs

of these allogeneic cases, approximately $64,845, were higher than the overall average

costs of all cases in MS-DRG 009, approxima tely $43,877. The average length of stay

for the allogeneic cases, approximately 28 da ys, was slightly higher than the average

length of stay for all cases assigned to MS-DRG 009, approximately 21 days.

We found 1,269 autologous bone marrow transplant cases reported with one of

the following ICD-9-CM procedure codes: 41.00 (Bone marrow transplant, not

otherwise specified); 41.01 (Autologous bone marrow transplant without purging); 41.04

(Autologous hematopoietic stem cell tran splant without purging); 41.07 (Autologous

hematopoietic stem cell tran splant with purging); or 41.09 (Autologous bone marrow

transplant with purging). The average co sts of these cases, approximately $37, 350, was

less than the overall average costs of all cases in MS-DRG 009 and the average costsCMS-1498-P 177

associated with the allogeneic bone marrow tran splant cases. The average length of stay,

of approximately 19 days, was less than the average lengths of stay for all the cases

assigned to MS-DRG 009 and for the alloge neic bone marrow transplant cases. We

included in our analysis of the autologous bone marrow transplants cases, 5 cases that

were reported with proce dure code 41.00 (Bone marrow transplant, not otherwise

specified). These 5 cases had average co sts of approximately $41,084 and an average

length of stay of approximately 12 days, wh ich was similar to the other autologous bone

marrow transplant cases.

The table below illustrates our findings:

MS-DRG Number of Cases Average Length of Stay Average Cost

009 – All cases 1,664 21.22 $43,877 009 – Cases with allogeneic bone marrow transplants 395 27.7 $64,845

009 – Cases with autologous bone marrow transplants 1,269 19.1 $37,350

As a result of our analysis, the data support the requestor’s suggestion that there

are cost differences associated with th e autologous bone marrow transplants and

allogeneic bone marrow transplants and wa rrants a separate MS-DRG for these

procedures. Therefore, we are proposing to delete MS-DRG 009 and create two new

MS-DRGs: MS-DRG 014 (Allogeneic Bone Marrow Transplant) and MS-DRG 015

(Autologous Bone Marrow Transplant).

Proposed MS-DRG 014 would in clude cases reported with one of the following

ICD-9-CM procedure codes:

• 41.02, Allogeneic bone marrow transplant with purgingCMS-1498-P 178

• 41.03, Allogeneic bone marrow transplant without purging

• 41.05, Allogeneic hematopoie tic stem cell transplant without purging

• 41.06, Cord blood stem cell transplant

• 41.08, Allogeneic hematopoie tic stem cell transplant

Proposed MS-DRG 015 would include cases repo rted with one of the following ICD-9-

CM procedure codes:

• 41.00 (Bone marrow transplant, not otherwise specified)

• 41.01 (Autologous bone marrow transplant without purging)

• 41.04 (Autologous hematopoietic stem cell transplant without purging)

• 41.07 (Autologous hematopoietic stem cell transplant with purging)

• 41.09 (Autologous bone marrow transplant with purging)

2. MDC 1 (Nervous System): Administrati on of Tissue Plasminogen Activator (tPA)

(rtPA)

During the comment period for the FY 2010 IPPS/RY 2010 LTCH PPS proposed

rule, we received a public comment that had not been the subject of a proposal in that

proposed rule. The commenter had requested that CMS conduct an analysis of diagnosis

code V45.88 (Status post administr ation of tPA (rtPA) in a di fferent facility within the

last 24 hours prior to admission to current f acility) under MDC 1 (Dis eases and Disorders

of the Nervous System). Diagnosis code V45.88 was created for use beginning October

1, 2008, to identify patients who are given tissue plasminogen activator (tPA) at one

institution and then transferred and admitted to a comprehensive stroke center for furtherCMS-1498-P 179

care. This situation is referred to as the “d rip-and-ship” issue that was discussed at detail

in the FY 2009 IPPS final rule (73 FR 48493).

According to the commenter, the concern at the receiving facilities is that the

costs associated with [caring for] more complex stroke patients that receive tPA are much

higher than the cost of the drug, presumably because stroke patients initially needing tPA

have more complicated strokes and outcomes. However, because these patients do not

receive the tPA at the second or transfer hos pital, the receiving hospital will not be

assigned to one of the higher weighted tPA stroke MS-DRGs when it admits these

patients whose care requires the use of intens ive resources. The MS-DRGs that currently

include codes for the use of tPA are: 061 (Acute Ischemic Stroke with Use of

Thrombolytic Agent with MCC); 062 (Acute Is chemic Stroke with Use of Thrombolytic

Agent with CC); and 063 (Acute Ischemic Stroke with Use of Thrombolytic Agent

without CC/MCC). These MS-DRGs have higherrelative weights than the next six MSDRGs relating to brain injury in the hierarchy. The commenter requested an analysis of

the use of diagnosis code V45.88 reflected in the MedPAR data for FY 2009 and FY

2010. The commenter believed that the data woul d show that the use of this code could

potentially result in a new MS-DRG or a new set of MS-DRGs in FY 2011.

In addressing this public comment in the FY 2010 IPPS/RY 2010 LTCH PPS

final rule (74 FR 43798), we noted that th e comment was out of scope for the FY 2010

proposed rule and reiterated that the deadlin e for requesting data review and potential

MS-DRG changes had been the previous December. We are now able to address theCMS-1498-P 180

commenter’s concern because we have been able to conduct an analysis of MedPAR

claims data for this diagnosi s code for this proposed rule.

For this proposed rule, we undertook an analysis of MedPAR claims data for

FY 2009. For our analysis, we did not include claims for patient cases assigned to MSDRGs 061, 062, or 063 because patients whose cases were assigned to these MS-DRGs

would have been given the tPA at the initial hospital, with assignment of procedure code

99.10 (Injection or infusion of thrombolytic agent), prior to their transfer to a

comprehensive stroke center. The tPA shoul d not have been given at the receiving

hospital; therefore, inclusi on of code 99.10 on their claims would constitute erroneous

coding. Likewise, we did not include MS-DRGs 067 and 068 (Nonspecific CVA &

Precerebral Occlusion without Infarction with MCC, and without MCC, respectively), or

MS-DRG 069 (Transient Ischemia). Cla ims assigned to MS-DRGs 067, 068, and 069 are

unlikely to contain cases in wh ich tPA had been administered.

Our data analysis included MS-DRGs 064, 065, and 066 (Intracranial

Hemorrhage or Cerebral Infarction with MCC, with CC, and without CC/MCC,

respectively) because claims involving diagnosis code V45.88 would be properly

reported in the data for these MS DRGs fo r FY 2009. The following table reflects the

results of our analysis of the MedPAR data in which diagnosis code V45.88 was reported

as a secondary diagnosis for FY 2009.

MS-DRG Number of Cases Average Length of Stay Average Cost MS-DRG 064 – All Cases 65,884 6.80 $11,305 MS-DRG 064 – Cases with secondary diagnosis code V45.88 249 7.00 $12,285CMS-1498-P 181

MS-DRG Number of Cases Average Length of Stay Average Cost MS-DRG 065 – All Cases 96,274 4.75 $7,264 MS-DRG 065 - Cases with secondary diagnosis code V45.88 448 5.06 $8,732 MS-DRG 066 – All Cases 62,337 3.29 $5,291 MS-DRG 066 - Cases with secondary diagnosis code V45.88 210 3.35 $6,325

Based on our review of the data for all of the cases in MS-DRGs 064, 065, and

066, compared to the subset of cases contai ning the V45.88 secondary diagnosis code, we

concluded that the movement of cases w ith diagnosis code V45.88 as a secondary

diagnosis from MS-DRGs 064, 065, and 066 into MS-DRGs 061, 062, and 063 is not

warranted. We determined that the differences in the average lengths of stay and the

average costs are too small to warrant an assignment to the higher weighted MS-DRGs.

Likewise, neither the lengths of stay nor the average costs are substantial enough to

justify the creation of an additional MS-DRG for transferred tPA cases, or to create

separate MS-DRGs that would mirror the M CC, CC or without CC/M CC severity levels.

Therefore, for FY 2011, we are not proposing any change to MS-DRGs 061, 062,

063, 064, 065, or 066, or any change involving th e assignment of diagnosis code V45.88.CMS-1498-P 182

3. MDC 5 (Diseases and Disorders of the Circulatory System): Intraoperative

Fluorescence Vascular Angiography (IFVA) and X-Ray Coronary Angiography in

Coronary Artery Bypass Graft Surgery

In the FY 2010 IPPS/RY 2010 LTCH PPS final rule (74 FR43785 through

43787), we discussed a request we received to reassign cases reporting the use of

intraoperative fluorescence vascular angiogra phy (IFVA) with coronary artery bypass

graft (CABG) procedures from MS-DRGs 235 and 236 (Coronary Bypass without

Cardiac Catheterization with and without M CC, respectively) to MS-DRG 233 (Coronary

Bypass with Cardiac Cathet erization with MCC) and MS-DRG 234 (Coronary Bypass

with Cardiac Catheterization without MCC) . Effective October 1, 2007, procedure code

88.59 (Intraoperative fluorescence vascular angiography (IFVA)) was established to

describe this technology.

In addition, we also discussed receiv ing related requests (74 FR 43798 through

43799) that were outside the scope of i ssues addressed for MDC 5 in the FY 2010

IPPS/RY 2010 LTCH PPS proposed rule. There were three components to these

requests. The first component involved the creation of new MS-DRGs. One request was

to create four new MS-DRGs that would differe ntiate the utilization of resources between

intraoperative angiography and IFVA when utilized with CABG. A second request was

to create only one new MS-DRG to separately identify the use of intraoperative

angiography, by any method, in CABG surgery. The second component involved

reviewing the ICD-9-CM procedure codes. Currently, the ICD-9-CM procedure codes do

not distinguish between preoperative, intra operative, and postoperative angiography.CMS-1498-P 183

Procedure code 88.59 (Intraoperative fluorescen ce vascular angiography (IFVA)) is one

intraoperative angiography technique that allows visualization of the coronary

vasculature. The third component involved reassigning cases with procedure code 88.59

to the “Other Cardiovascular MS-D RG”s: MS-DRGs 228, 229, and 230 (Other

Cardiothoracic Procedures with MCC, CC, and without CC/MCC, respectively). We

stated our intent to consider these reque sts during the FY 2011 rulemaking process.

After publication of the FY 2010 IPPS/RY 2010 LTCH PPS final rule, we were

contacted by one of the requestors, the ma nufacturer of the IFVA technology. We met

with the requestor in mid-November 2009 to discuss evaluating the data for IFVA

(procedure code 88.59) again in consideration of a proposal to crea te new MS-DRGs and

to discuss a request for a new procedure code(s).

IFVA technology consists of a mobile devi ce imaging system with software. It is

used to test cardiac graft patency and technical adequacy at the time of coronary artery

bypass grafting (CABG). While this system does not involve fluoroscopy or cardiac

catheterization, it has been sugg ested that it yields results that are similar to those

achieved with selective coronary arte riography and cardiac catheterization.

Intraoperative coronary angiography provi des information about the quality of the

anastomosis, blood flow through the graft, di stal perfusion, and durability. For additional

information regarding IFVA technology, we refer readers to the September 28-29, 2006

ICD-9-CM Coordination and Maintenance Committee meeting handout at the following

website:

http://www.cms.hhs.gov/ICD9ProviderDiag nosticCodes/03_meetings.asp#TopOfPage

.CMS-1498-P 184

a. New MS-DRGs for Intraoperative Fluores cence Vascular Angiography (IFVA) with

CABG

As stated earlier, the manufacturer requested that we create four new MS-DRGs

for CABG to distinguish CABG surgeries performed with IFVA and those performed

without IFVA. According to the requestor, these four new MS-DRGs would correspond

to the existing MS-DRG for CABG but would also include intraoperative angiography.

The requestor proposed the following four new MS-DRGs:

MS-DRG XXX (Coronary Bypass with Card iac Catheterization with MCC with

Intraoperative Angiography)

MS-DRG XXX (Coronary Bypass with Ca rdiac Catheterization without MCC

with Intraoperative Angiography)

MS-DRG XXX (Coronary Bypass without Cardiac Catheterization with MCC

with Intraoperative Angiography)

MS-DRG XXX (Coronary Bypass without Ca rdiac Catheterization without MCC

with Intraoperative Angiography)

Using claims data from the FY 2009 MedPAR file, we examined cases identified

by procedure code 88.59 in MS-DRGs 233, 234, 235, and 236. As shown in the table

below, for both MS-DRGs 235 and 236, the ca ses utilizing IFVA technology (code

88.59) have a shorter length of stay and lower average costs compared to all cases in MSDRGs 235 and 236. There were a total of 10,281 cases in MS-DRG 235 with an average

length of stay of 10.61 days and average costs of $34,639. There were 114 cases

identified by procedure code 88.59 with an av erage length of stay of 10.38 days withCMS-1498-P 185

average costs of $28,238. In MS-DRG 236, th ere were a total of 22,410 cases with an

average length of stay of 6.37 days and average costs of $23,402; and there were 186

cases identified by procedure code 88.59 with an average length of stay of 6.54 days and

average costs of $19,305. Similar to the data reported last year, the data for FY 2009

clearly demonstrate that the IFVA cases (i dentified by procedure code 88.59) are

assigned appropriately to MS -DRGs 235 and 236. We also examined cases identified by

procedure code 88.59 in MS-DRGs 233 and 234. Likewise, in MS-DRGs 233 and 234

cases identified by code 88.59 reflect shorter lengths of stay and lower average costs

compared to the remainder of the cases in those MS-DRGs; and there were a total of

16,475 cases in MS-DRG 233 with an average length of stay of 13.47 days and average

costs of $42,662. There were 58 cases identified by procedure code 88.59 with an

average length of stay of 12.12 days and average costs of $35,940. In MS-DRG 234,

there were a total of 23,478 cases with an average length of stay of 8.61 days and average

costs of $29,615; and there were 67 cases iden tified by procedure code 88.59 with an

average length of stay of 8.85 days and average costs of $25,379. The data clearly

demonstrate the IFVA cases (identified by procedure code 88.59) are appropriately

assigned to MS-DRGs 233 and 234.

MS-DRG Number of Cases Average Length of Stay Average Cost

235 – All cases 10,281 10.61 $34,639 235 – Cases with procedure code 88.59 114 10.38 $28,238 235 – Cases without procedure code 88.59 10,167 10.62 $34,711 236 – All cases 22,410 6.37 $23,402 236 – Cases with code procedure 88.59 186 6.54 $19,305CMS-1498-P 186

MS-DRG Number of Cases Average Length of Stay Average Cost

236 – Cases without procedure code 88.59 22,224 6.37 $23,436

If the cases identified by procedure co de 88.59 were proposed to be reassigned

from MS-DRGs 235 and 236 to MS-DRGs 233 and 234, they would be significantly

overpaid. In addition, because the cases in MS-DRGs 235 and 236 did not actually have

a cardiac catheterization performed, a proposal to reassign cases identified by procedure

code 88.59 would result in lowering the relative weights of MS-DRGs 233 and 234

where a cardiac catheterization is truly performed.

In summary, the data do not support movi ng IFVA cases (procedure code 88.59)

from MS-DRGs 235 and 236 to MS-DRGs 233 and 234. Therefore, we are not

proposing to make any MS-DRG modifications for cases reporting procedure code 88.59

for FY 2011. MS- DRG Number of Cases Average Length of Stay Average Cost

233 – All cases 16,475 13.47 $42,662 233 – Cases with procedure c ode 88.59 58 12.12 $35,940 233 – Cases without procedure code 88.59 16,417 13.47 $42,686 234 – All cases 23,478 8.61 $29,615 234 – Cases with procedure code 88.59 67 8.85 $25,379 234 – Cases without procedure code 88.59 23,411 8.61 $29,627CMS-1498-P 187

b. New MS-DRG for Intraoperative Angiography, by any Method, with CABG

We also received a request to create a single MS-DRG for any type of

intraoperative angiography utilized in CABG surgery. The requestor suggested the

following title for the proposed new MS-DRG: XXX Coronary Bypass with

Intraoperative Angiography, by any Method.

Currently, the only ICD-9-CM procedure co de that identifies an intraoperative

angiography is procedure code 88.59 (Intraopera tive fluorescence vascular angiography),

as described in the previous section. Due to the structure of the ICD-9-CM procedure

classification system, it is not possible to dis tinguish when other types of angiography are

performed intraoperatively. Therefore, we are unable to evaluate any data, other than that

for procedure code 88.59, as shown in the tabl es above. We are not proposing to create a

new MS-DRG in FY 2011 for coronary bypass with intraoperative angiography, by any

method.

c. New Procedure Codes

In response to our invitation to submit public comments regarding the proposal

not to make any MS-DRG modifications fo r cases reporting procedure code 88.59 in the

FY 2010 IPPS/RY 2010 LTCH PPS proposed rule (74 FR 24106-24107), one requestor

presented another option involving the crea tion of new ICD-9-CM procedure codes.

According to the requestor, the purpose of these new codes would be to separately

identify the two technologies used to perform intraoperative coronary angiography in

CABG surgery: X-ray coronary angiography with cardiac catheterization and

fluoroscopy versus intraoperative fluorescence coronary angiography (IFVA). TheCMS-1498-P 188

requestor stated that due to the structure of the current codes and MS-DRGs for CABG, it

is difficult to identify when x-ray angiography is performed.

X-ray angiography is commonly performed as a separate procedure in a

catheterization laboratory. Currently, there ar e no procedure codes to distinguish if this

angiography was performed preoperatively, intr aoperatively, and/or postoperatively. We

informed the requestor that they could s ubmit a proposal for creating a new procedure

code(s) to the ICD-9-CM C oordination and Mainte nance Committee for its consideration.

Therefore, this topic will be further evaluated through the ICD-9-CM Coordination and

Maintenance Committee meeting process.

d. MS-DRG Reassignment of Intraopera tive Fluorescence Vascular Angiography

(IFVA)

One requestor suggested reassignin g procedure code 88.59 (Intraoperative

Fluorescence Vascular Angiography), to the “Other Cardiovascular MS-DRGs”:

MS-DRGs 228, 229, and 230 (Other Cardiothor acic Procedures with MCC, CC, and

without CC/MCC, respectively). The reques tor noted that these MS-DRGs have three

levels of severity and that other procedur es assigned to these MS-DRGs (for example,

transmyocardial revascularization) are frequently performed at the same time as a CABG.

The requestor believed that reassigning cases that report IFVA (procedure code 88.59) to

these MS-DRGs would not result in a si gnificant overpayment to hospitals.

We point out that, in the surgical hierarchy, MS-DRGs 228, 229, and 230 rank

higher than MS-DRGs 233, 234, 235, and 236, whic h were evaluated in the above tables

for CABG procedures performed with IFVA (procedure code 88.59). The surgicalCMS-1498-P 189

hierarchy reflects the relative resource require ments of various surgical procedures. For

example, if a CABG surgery were performed along with another procedure currently

assigned to MS-DRGs 228, 229, and 230, the case would be assigned to one of the

“Other Cardiothoracic Procedures MS-DRGs” (228, 229, and 230) because patients with

multiple procedures are assigned to the high est surgical hierarchy to which one of the

procedures is assigned.

Therefore, as the data shown above di d not demonstrate that IFVA utilized an

equivalent (or additional) am ount of resources as a cardiac catheterization to warrant a

proposal to reassign IFVA cases to MS-DRG s 233 and 234 and the fact that IFVA cases

with CABG performed with a procedure assigned to MS-DRGs 228, 229, and 230 would

already be grouped to those same MS-DRGs, we are not proposing to reassign cases

reporting procedure code 88.59 to MS-DRGs 228, 229, and 230 for FY 2011.

4. MDC 6 (Diseases and Disorders of the Digestive System): Gastrointestinal Stenting

In the FY 2010 IPPS/RY 2010 LTCH PPS final rule (74 FR43799), we discussed

a request we received to create new MS-DRG s in FY 2011 to better identify patients who

undergo the insertion of a gastrointestinal sten t. The request was considered outside the

scope of issues addressed in the FY 2010 IPPS/RY 2010 LTCH PPS proposed rule;

therefore, we stated our intent to consid er this request during the FY 2011 rulemaking

process.

Gastrointestinal stenting is performed by inserting a tube (stent) into the

esophagus, duodenum, biliary tract or colon to reestablish or mainta in patency of these

structures and allow swallowing, drainage , or passage of waste. The commenterCMS-1498-P 190

requested that the new MS-DRGs be subdivide d into three severity levels (with MCC,

with CC, and without CC/MCC) to better align payment rates with resource consumption

and improve the clinical coherence of these cases.

In its own analysis using FY 2008 Me dPAR data, the commenter identified

gastrointestinal stenting cases using relevant diagnosis codes and a combination of

procedure codes with revenue code 0278 in MS-DRGs 374, 375, and 376 (Digestive

Malignancy with MCC, with CC, and w ithout CC/MCC, respectively), MS-DRGs

391and 392 (Esophagitis, Gastroenteritis and Mi scellaneous Digestive Disorders with

MCC and without MCC, respectively) , and MS-DRGs 393, 394, and 395 (Other

Digestive System Diagnoses with MCC, with CC, and without CC/MCC, respectively) in

MDC 6 (Diseases and Disorders of the Di gestive System); and MS-DRGs 435, 436, and

437 (Malignancy of Hepatobiliary System or Pancreas with MCC, with CC, and without

CC/MCC, respectively) in MDC 7 (Diseases and Disorders of the Hepatobiliary System

and Pancreas).

As stated above, the commenter utilized a combination of procedure codes along

with revenue code 0278 for its analysis. Th ere were a total of six procedure codes

included, of which, only three (procedure codes 42.81, 51.87, and 52.93) actually

describe the insertion of a stent. The comp lete list of procedure codes is as follows:

● 42.81 (Insertion of permanent tube into esophagus)

● 45.13 (Other endoscopy of small intestine)

● 45.22 (Endoscopy of large intestine through artificial stoma)

● 46.85 (Dilation of intestine)CMS-1498-P 191

● 51.87 (Endoscopic insertion of stent (tube) into bile duct)

● 52.93 (Endoscopic insertion of sten t (tube) into pa ncreatic duct)

The commenter aggregated the results by the previously mentioned MS-DRG

groupings and did not present results for indivi dual stenting procedures. According to the

commenter, mean standardized charges for gastrointestinal stenting procedures were

higher than those for nonstenting procedures across all levels of severity of illness. In

addition, the commenter believed that the differ ence in charges was not simply related to

the costs of the stents, but rather that the extent of the difference in charges reflected the

severity of illness and resource intensity associated with gastrointestinal stenting

procedures.

In response to the commenter’s request , we point out that we do not utilize

revenue codes in our process to evaluate if new MS-DRGs are warranted. The use of

revenue codes in the MS-DRG reclassification process would require a major structural

change from the current process that has been utilized since the inception of the IPPS. In

addition, the commenter included procedure code s in its analysis that do not identify the

insertion of a stent; thereby, the data are unr eliable. Furthermore, two procedure codes

describing the insertion of a colonic stent were recently implemented, effective with

discharges occurring on or after Oct ober 1, 2009—procedure code 46.86 (Endoscopic

insertion of colonic stent(s)) and procedur e code 46.87 (Other insertion of colonic

stent(s)). However, we do not have data currently available on these two new procedure

codes to include them in a comprehensive analysis. Lastly, as the commenter indicated,

the differences between those procedures with and without stents is a reflection on theCMS-1498-P 192

severity of illness and resource consumption a ssociated with these types of procedures.

The commenter also acknowledged that patients receiving a gastrointestinal stent who are

severely debilitated due to prolonged illness are reflected by the fact that the majority of

cases are assigned to MS-DRGs for patient s with MCCs (major complications or

comorbidities). Therefore, the medical MS-DRGs to which these procedures are

currently assigned alre ady account for the seve rity of illness and intensity of resources

utilized.

Using FY 2009 MedPAR data, we analyzed the three procedure codes that truly

identify and describe the insertion of a stent (procedure codes 42.81, 51.87, and 52.93)

within the MS-DRGs referenced above. Similar to the commenter’s findings, our

analysis demonstrated a small volume of cases in which insertion of a gastrointestinal

stent occurred in the specified MS-DRGs. Of the 411,390 total cases across the digestive

system MS-DRGs the requestor identified, th ere were only 2,011cases that involved the

actual insertion of a gastrointestinal stent. These cases had average costs ranging from a

low of $5,846 to a high of $17,626. Based on these findings, we do not believe it is

appropriate to assign cases with such disp arity in costs into a single, new MS-DRG.

Furthermore, in applying the five criteria used to establish new MS-DRGs, the data do

not support the creation of new MS-DRGs with three severity levels (with MCC, with

CC, and without CC/MCC).

For the reasons stated above, we invite the public to submit comments on our

proposal not to make any MS-DRG modifications at this time to cases involving the use

of gastrointestinal stents for FY 2011.CMS-1498-P 193

5. MDC 8 (Diseases and Disorders of th e Musculoskeletal System and Connective

Tissue): Pedicle-Based Dynamic Stabilization

As we did for FY 2009 (73 FR 45820), we received a request from a manufacturer

to reassign procedure code 84.82 (Insertion or replacement of pedicle-based dynamic

stabilization device(s)), e ffective October 1, 2007, from MS-DRG 490 (Back and Neck

Procedures Except Spinal Fusion with CC/MCC or Disc Device/Neurostimulator) to

MS-DRG 460 (Spinal Fusion Except Cervical without MCC). According to the

manufacturer, the technology that is identif ied by this procedure code, the Dynesys®

Dynamic Stabilization System, is clinically similar to lumbar spinal fusion and requires

similar utilization of resources.

Dynamic stabilization is a concept that u tilizes a flexible system to stabilize the

spine without fusion. The primary goals of dynamic stabilization are to limit the amount

of unnatural spinal motion and preserve as much of the patient’s natural anatomic

structures as possible. The Dynesys® Dynamic Stabilization System is comprised of

three components with specific functions: titani um alloy pedicle screws that anchor the

system to the spine; a polyethylene-terephthalate (PET) cord that connects the Dynesys®

screws; and a polycarbonate-urethane (PCU) sp acer that runs over the cord between the

Dynesys® screws. The system is placed under tension creating a dynamic interaction

between the components.

The MS-DRGs are comprised of clini cally coherent groups of patients who

consume similar utilization of resources and comp lexity of services. The insertion of a

Dynesys® Dynamic Stabilization System is c linically not a lumbar fusion. As statedCMS-1498-P 194

previously, dynamic stabilization is a concept that utilizes a flexible system to stabilize

the spine without fusion. Therefore, it would be clini cally inappropriate to reassign cases

reporting procedure code 84.82 in the fusion MS-DRG.

In conclusion, the Dynesys® Dynamic Stabilization System is currently FDA

approved for use only as an adjunct to spinal fusion, there is uncertainty regarding the

coding and reporting of procedure code 84.82, as well as off-label use, and currently, all

other similar nonfusion devices are assigned to MS-DRG 490.

For the reasons listed above, we are not proposing to reassign cases reporting

procedure code 84.82 from MS-DRG 490 to MS-DRG 460 for FY 2011.

6. MDC 15 (Newborns and Other Neonates with Conditions Originating in the Perinatal

Period)

a. Discharges/Transfers of Neonates to a Designated Ca ncer Center or Children’s

Hospital

We received a request to add pa tient discharge status code 05

(Discharged/transferred to a designated canc er center or children’s hospital) to the

MS-DRG GROUPER logic for MS -DRG 789 (Neonates, Died or Transferred to Another

Acute Care Facility). Currently, neonate cases with the discharge status code 05 are

being assigned to MS-D RG 795 (Normal Newborn).

The definition of discharge status c ode 05 was changed on April 1, 2008, from

“discharged/transferred to another type of health care institution not defined elsewhere in

this code list” to “discharged /transferred to a designated cancer center or children’s

hospital.” We examined cases in the FY 2009 MedPAR file but did not find any casesCMS-1498-P 195

with the discharge status code 05 that we re assigned to either MS-DRG 789 or

MS-DRG 795. However, we believe that the request has merit in identifying neonate

cases appropriately. Therefore, for FY 2011, we are proposing to add discharge status

code 05 to the MS-DRG GROUPER logic for MS-DRG 789.

b. Vaccinations of Newborns

We received a request to examine the assignment of code V64.05 (Vaccination

not carried out because of caregiver refu sal) to MS-DRG 794 (Neonate with Other

Significant Problems). Code V64.05 is cu rrently being reported when a physician

documents that a parent/caregiver has refu sed immunization for a child. The reporting of

this code as a principal or secondary diagnosis impacts the MS-DRG assignment for

normal newborns cases bein g assigned to MS-DRG 794.

We examined cases in the FY 2009 MedPAR file but did not find any cases of

code V64.05 assigned to MS-DRG 794. Our medical advisors agree that code V64.05

should not be assigned to MS-DRG 794. We determined that the presence of code

V64.05 does not indicate that there is a signif icant problem with the newborn and should

not be assigned to MS-DRG 794. Therefore, we believe that assi gnment of code V64.05

to MS-DRG 795 (Normal Newborn) would be more appropriate for this code because it

does not identify a significant problem.

The logic for MS-DRG 795 contains a list of principal diagnosis codes for normal

newborn and no secondary diagnosis or a lis t of only secondary diagnosis codes.

Therefore, in this proposed rule, for FY 2011, we are proposing to remove code V64.05CMS-1498-P 196

from MS-DRG 794 and add this code to the only secondary diagnosis list for

MS-DRG 795.

7. Medicare Code Editor (MCE) Changes

As explained under section II.B.1. of th e preamble of this proposed rule, the

Medicare Code Editor (MCE) is a software prog ram that detects and reports errors in the

coding of Medicare claims data. Patient diagnoses, pr ocedure(s), and demographic

information are entered into the Medicare claims processing systems and are subjected to

a series of automated screens. The MCE screens are designed to identify cases that

require further review before classification into a MS-DRG. For FY 2011, we intend to

make the following changes to the MCE edits and invite public input on whether or not

we should do so:

a. Unacceptable Principal Diagnosis Edit: Addition of Code for Gastroparesis

It has been brought to our attention th at code 536.3 (Gastroparesis) has a “code

first underlying disease” note. This note indi cates that code 536.3 should not be used as a

principal diagnosis. Therefore, code 536.3 should have been included on the list of

unacceptable principal diagnoses in the MCE.

We agree that code 536.3 should have b een included on the list of unacceptable

principal diagnoses in the MCE. Therefor e, for FY 2011, we intend to add code 536.3 to

that list.

b. Open Biopsy Check Edit

The Open Biopsy Check edit in the MCE dates back to the early years of the IPPS

when the surgical and medical DRGs were not as expansive as they are today. In theCMS-1498-P 197

mid-1980s when the Open Biopsy Check edit was created, the ICD-9-CM codes did not

have many biopsy procedure codes that clearl y showed the approach, such as codes for

open, percutaneous, and closed biopsies. Fu rthermore, under the current MS-DRGs, the

open biopsy codes do not have as significant an impact as they did in the early versions

of the DRGs. We believe that the Open Biopsy Check edit no longer serves a useful

purpose. Therefore, for FY 2011, we intend to delete the entire Open Biopsy Check edit

from the MCE, which means removing the following 63 codes from the edit:

● 01.11 (Closed [Percutaneous] [Need le] biopsy of cerebral meninges)

● 01.12 (Open biopsy of cerebral meninges)

● 01.13 (Closed [Percutaneous] [Needle] biopsy of brain)

● 01.14 (Open biopsy of brain)

● 04.11 (Closed [Percutaneous] [Needle] biops y of cranial or peripheral nerve or

ganglion)

● 04.12 (Open biopsy of cranial or peripheral nerve or ganglion)

● 06.11 (Closed [Percutaneous] [Needle] biopsy of thyroid gland)

● 06.12 (Open biopsy of thyroid gland)

● 07.11 (Closed [Percutaneous] [Need le] biopsy of adrenal gland)

● 07.12 (Open biopsy of adrenal gland)

● 22.11 (Closed [Endoscopic] [Needle] biopsy of nasal sinus)

● 22.12 (Open biopsy of nasal sinus)CMS-1498-P 198

● 25.01 (Closed [Needle] biopsy of tongue)

● 25.02 (Open biopsy of tongue)

● 26.11 (Closed [Needle] biopsy of salivary gland or duct)

● 26.12 (Open biopsy of salivary gland or duct)

● 31.43 (Closed [Endoscopic] biopsy of larynx)

● 31.44 (Closed [Endoscopic] biopsy of trachea)

● 31.45 (Open biopsy of larynx or trachea)

● 33.24 (Closed [Endoscopic] biopsy of bronchus)

● 33.25 (Open biopsy of bronchus)

● 33.26 (Closed [Percutaneous] [Needle] biopsy of lung)

● 33.28 (Open biopsy of lung)

● 34.25 (Closed [Percutaneous] [N eedle] biopsy of mediastinum)

● 34.26 (Open mediastinal biopsy)

● 41.32 (Closed [Aspiration] [Percutaneous] biopsy of spleen)

● 41.33 (Open biopsy of spleen)

● 42.24 (Closed [Endoscopic] biopsy of esophagus)

● 42.25 (Open biopsy of esophagus)CMS-1498-P 199

● 44.14 (Closed [Endoscopic] biopsy of stomach)

● 44.15 (Open biopsy of stomach)

● 45.14 (Closed [Endoscopic] bi opsy of small intestine)

● 45.15 (Open biopsy of small intestine)

● 45.25 (Closed [Endoscopic] biopsy of large intestine)

● 45.26 (Open biopsy of large intestine)

● 48.24 (Closed [Endoscopic] biopsy of rectum)

● 48.25 (Open biopsy of rectum)

● 50.11 (Closed (Percutaneous ) [Needle] biopsy of liver)

● 50.12 (Open biopsy of liver)

● 51.12 (Percutaneous biopsy of gallbladder or bile ducts)

● 51.13 (Open biopsy of gallb ladder or bile ducts)

● 52.11 (Closed [Aspiration] [Needle] [Percutaneous] biopsy of pancreas)

● 52.12 (Open biopsy of pancreas)

● 54.23 (Biopsy of peritoneum)

● 54.24 (Closed [Percutaneous] [Needle ] biopsy of intra-abdominal mass)

● 55.23 (Closed [Percutaneous] [Needle] biopsy of kidney)CMS-1498-P 200

● 55.24 (Open biopsy of kidney)

● 56.32 (Closed percutaneous biopsy of ureter)

● 56.34 (Open biopsy of ureter)

● 57.33 (Closed [Transurethral] biopsy of bladder)

● 57.34 (Open biopsy of bladder)

● 60.11 (Closed [Percutaneous] [Needle] biopsy of prostate)

● 60.12 (Open biopsy of prostate)

● 60.13 (Closed [Percutaneous] biopsy of seminal vesicles)

● 60.14 (Open biopsy of seminal vesicles)

● 62.11 (Closed [Percutaneous] [Needle] biopsy of testis)

● 62.12 (Open biopsy of testis)

● 68.13 (Open biopsy of uterus)

● 68.14 (Open biopsy of uterine ligaments)

● 68.15 (Closed biopsy of uterine ligaments)

● 68.16 (Closed biopsy of uterus)

● 85.11 (Closed [Percutaneous] [Needle] biopsy of breast)

● 85.12 (Open biopsy of breast)CMS-1498-P 201

c. Noncovered Procedure Edit

The ICD-9-CM procedure codes 52.80 (P ancreatic transplant, not otherwise

specified) and 52.82 (Homotransplant of pancreas ) alone (that is, without procedure code

55.69 (Other kidney transplantation)) are considered noncovered procedures, except

when either one is combined with at least one specific principal or secondary diagnosis

code. These specific diagnosis codes identify Type I diabetes mellitus, not stated as

uncontrolled, or else id entified as uncontrolled.

To conform to the proposed change to Pre-MDC MS-DRGs 008 and 010 as

discussed in section II.G.1. of this preambl e, in which we are proposing to add code

251.3 (Postsurgical hypoinsulinemia) to thos e MS-DRGs, we intend to add procedure

code 251.3 to the list of acceptable principal or secondary diagnosis codes in the MCE.

8. Surgical Hierarchies

Some inpatient stays entail multiple surgical procedures, each one of which,

occurring by itself, could result in assignment of the case to a different MS-DRG within

the MDC to which the principal diagnosis is a ssigned. Therefore, it is necessary to have

a decision rule within the GROUPER by which these cases are assigned to a single

MS-DRG. The surgical hierarchy, an ordering of surgical classes from most

resource-intensive to least res ource-intensive, performs that function. Application of this

hierarchy ensures that cases involving multiple surgical procedures are assigned to the

MS-DRG associated with the most resource-intensive surgical class.

Because the relative resource intensity of surgical classes can shift as a function

of MS-DRG reclassification and recalibrations , we reviewed the surgical hierarchy ofCMS-1498-P 202

each MDC, as we have for previous reclassifications and recalibrations, to determine if

the ordering of classes coincides with the intensity of resource utilization.

A surgical class can be composed of one or more MS-DRGs. For example, in

MDC 11, the surgical class "kidney transplant " consists of a single MS-DRG (MS-DRG

652) and the class "major bladder procedur es" consists of three MS-DRGs (MS-DRGs

653, 654, and 655). Consequently, in many cases , the surgical hierarchy has an impact

on more than one MS-DRG. The me thodology for determining the most

resource-intensive surgical class involves weighting the average resources for each

MS-DRG by frequency to determine the weighted average resources for each surgical

class. For example, assume surgical class A includes MS-DRGs 1 and 2 and surgical

class B includes MS-DRGs 3, 4, and 5. Assume also that the average costs of MS-DRG

1 is higher than that of MS-DRG 3, but the average costs of MS-DRGs 4 and 5 are higher

than the average costs of MS-DRG 2. To de termine whether surgical class A should be

higher or lower than surgical class B in the surgical hierarchy, we would weigh the

average costs of each MS-DRG in the class by frequency (that is, by the number of cases

in the MS-DRG) to determine average resource consumption for the surgical class. The

surgical classes would then be ordered from the class with the highest average resource

utilization to that with the lowest, with th e exception of "other O.R. procedures" as

discussed below.

This methodology may occasionally resu lt in assignment of a case involving

multiple procedures to the lower-weighted MS-DRG (in the highest, most

resource-intensive surgical class) of the ava ilable alternatives. However, given that theCMS-1498-P 203

logic underlying the surgical hierarchy pr ovides that the GROUP ER search for the

procedure in the most resource-intensive su rgical class, in cases involving multiple

procedures, this result is sometimes unavoidable.

We note that, notwithstanding the forego ing discussion, there are a few instances

when a surgical class with a lower average co st is ordered above a surgical class with a

higher average cost. For example, the "other O.R. procedures" surgical class is uniformly

ordered last in the surgical hierarchy of e ach MDC in which it occurs, regardless of the

fact that the average costs for the MS-DRG or MS-DRGs in that surgical class may be

higher than those for other surgical classes in the MDC. The "other O.R. procedures"

class is a group of procedures that are only infrequently related to the diagnoses in the

MDC, but are still occasionally performed on patients in the MDC with these diagnoses.

Therefore, assignment to these surgical classes should only occur if no other surgical

class more closely related to the di agnoses in the MDC is appropriate.

A second example occurs when the diff erence between the average costs for two

surgical classes is very small. We have found that small differences generally do not

warrant reordering of the hierarchy because, as a result of reassigning cases on the basis

of the hierarchy change, the average costs are likely to shift such that the higher-ordered

surgical class has a lower average costs than the class ordered below it.

Based on the changes that we are proposin g for FY 2011, as discussed in section

II.C.2 of this preamble, we are proposing to revise the surgical hierarchy for Pre-MDCs

and MDC 10 (Endocrine, Nutritiona l and Metabolic Diseases a nd Disorders) to reflect

the resource intensiveness of the MS-DRGs, as follows:CMS-1498-P 204

In Pre-MDCs, we are proposing to reorder proposed new MS-DRG 014

(Allogeneic Bone Marrow Transplant) a bove MS-DRG 007 (Lung Transplant); and

proposed new MS-DRG 015 (Autologous Bone Marrow Transplant) above MS-DRG 010

(Pancreas Transplant).

In MDC 10, we are proposing to reorde r MS-DRG 614 (Adrenal and Pituitary

Procedures With CC/MCC) and MS-DRG 615 (Adrenal a nd Pituitary Procedures

Without CC/MCC) above MS-DRG 625 (Thy roid, Parathyroid and Thyroglossal

Procedures With MCC).

9. Complications or Comorbidity (CC) Exclusions List

a. Background

As indicated earlier in the preamble of this proposed rule, under the IPPS

MS-DRG classification system, we have developed a standard list of diagnoses that are

considered CCs. Historically, we develope d this list using physician panels that

classified each diagnosis code based on whether the diagnosis, when present as a

secondary condition, would be considered a s ubstantial complication or comorbidity. A

substantial complication or comorbidity was defined as a condition that, because of its

presence with a specific principal diagnosis, w ould cause an increase in the length of stay

by at least 1 day in at least 75 percent of th e patients. We refer readers to section II.D.2.

and 3. of the preamble of the FY 2008 IPPS final rule with comment period for a

discussion of the refinement of CCs in re lation to the MS-DRGs we adopted for FY 2008

(72 FR 47121 through 47152).

b. Proposed CC Exclusions List for FY 2011CMS-1498-P 205

In the September 1, 1987 final notice ( 52 FR 33143) concerning changes to the

DRG classification system, we modified the GROUPER logic so that certain diagnoses

included on the standard list of CCs would not be considered valid CCs in combination

with a particular principal diagnosis. We created the CC Exclusions List for the

following reasons: (1) to preclude coding of CCs for closely related conditions; (2) to

preclude duplicative or inconsiste nt coding from being treated as CCs; and (3) to ensure

that cases are appropriately classified betw een the complicated and uncomplicated DRGs

in a pair. As we indicated above, we de veloped a list of diagnoses, using physician

panels, to include those diagnoses that, when present as a secondary condition, would be

considered a substantial complication or comorb idity. In previous years, we have made

changes to the list of CCs, either by adding new CCs or deleting CCs already on the list.

In the May 19, 1987 proposed notice (52 FR 18877) and the September 1, 1987

final notice (52 FR 33154), we explained that the excluded secondary diagnoses were

established using the following five principles:

● Chronic and acute manifestations of the same condition should not be

considered CCs for one another.

● Specific and nonspecific (that is, not otherwise specified (NOS)) diagnosis

codes for the same condition should not be considered CCs for one another.

● Codes for the same condition that ca nnot coexist, such as partial/total,

unilateral/bilatera l, obstructed/unobstruc ted, and benign/malignant, should not be

considered CCs for one another.CMS-1498-P 206

● Codes for the same condition in anat omically proximal sites should not be

considered CCs for one another.

● Closely related conditions should not be considered CCs for one another.

The creation of the CC Exclusions List was a major project involving hundreds of

codes. We have con tinued to review the remaining CCs to identify additional exclusions

and to remove diagnoses from the master lis t that have been shown not to meet the

definition of a CC. 2

(1) Proposed Limited Revisions Based on Ch anges to the ICD-9-CM Diagnosis Codes

For FY 2011, we are proposing to make limited revisions to the CC Exclusions

List for FY 2011 to take into account the changes made in the ICD-9-CM diagnosis

coding system effective October 1, 2009. (W e refer readers to section II.G.11. of the

preamble of this proposed rule for a disc ussion of ICD-9-CM changes.) We are

proposing to make these changes in accordance with the principles established when we

created the CC Exclusions List in 1987. In addition, we are indicating on the CC

Exclusions List some changes as a result of updates to the ICD-9-CM codes to reflect the

2 See the FY 1989 final rule (53 FR 38485, September 30, 1988), for the revision made for the discharges occurring in FY 1989; t he FY 1990 final rule (54 FR 36552, September 1, 1989), for the FY 1990 revision; the FY 1991 final rule (55 FR 36126, September 4, 1990), for the FY 1991 revision; the FY 1992 final rule (56 FR 43209, August 30, 1991) for the FY 1992 revision; t he FY 1993 final rule (57 FR 39753, September 1, 1992), for the FY 1993 revision; the FY 1994 final rule (58 FR 46278, September 1, 1993), for the FY 1994 revisions; the FY 1995 final rule (59 FR 45334, September 1, 1994), for the FY 1995 revisio ns; the FY 1996 final rule (60 FR 45782, September 1, 1995), for the FY 1996 revisions; the FY 1997 final rule (61 FR 46171, August 30, 1996), for the FY 1997 revisions; the FY 1998 final rule (62 FR 45966, August 29, 1997) for the FY 1998 revisions; t he FY 1999 final rule (63 FR 40954, July 31, 1998), for the FY 1999 revisions; the FY 2001 final rule (65 FR 47064, August 1, 2000 ), for the FY 2001 revisions; the FY 2002 final rule (66 FR 39851, August 1, 2001), for the FY 2002 revisions; the FY 2003 final rule (67 FR 49998, August 1, 2002), for the FY 2003 revisions; the FY 2004 final rule (68 FR 45364, August 1, 2003), for the FY 2004 revisions; the FY 2005 final rule (69 FR 49848, August 11, 2004), for the FY 2005 revisions; the FY 2006 final rule (70 FR 476 40, August 12, 2005), for the FY 2006 revisions; the FY 2007 final rule (71 FR 47870) for the FY 2007 revisions; the FY 2008 final rule (72 FR 47130) for the FY 2008 revisions, the FY 2009 final rule (73 FR 48510), and the FY 2010 final rule (74 FR 43799). In th e FY 2000 final rule (64 FR 41490, July 30, 1999, we did not modify the CC Exclusions List because we did not make any changes to the ICD-9-CM codes for FY 2000.CMS-1498-P 207

exclusion of codes from being MCCs under th e MS-DRG system that we adopted in

FY 2008.

(2) Suggested Changes to Severity Leve ls for Obesity-Related and Major Osseous

Defect Diagnosis Codes

In the FY 2010 IPPS/RY 2010 LTCH PPS final rule (74 FR 43793 through

43794), we indicated that several commenters on the FY 2010 IPPS proposed rule

recommended that CMS consider making further adjustments to the MS-DRG

assignments based on obesity a nd major osseous defects. The commenters stated that

obesity, high Body Mass Index (BMI) ratings, and major osseous defects add to the

complexity of care for patients such as thos e patients undergoing orthopedic procedures.

The commenters recommended the following changes to the list of MCCs and CCs:

Several commenters recommended that CMS add the following diagnosis codes,

which are classified as non-CCs, to the CC or MCC list:

● 731.3 (Major osseous defects)

● V85.35 (Body mass index 35.0 – 35.9, adult)

● V85.36 (Body mass index 36.0 – 36.9, adult)

● V85.37 (Body mass index 37.0 – 37.9, adult)

● V85.38 (Body mass index 38.0 – 38.9, adult)

● V85.39 (Body mass index 39.0 – 39.9, adult)

Several commenters recommended that CM S add the following diagnosis code,

which is on the CC list, to the MCC list:

● V85.40 (Body mass inde x 40 and over, adult)CMS-1498-P 208

We stated that we believed these co mments were outside the scope of the

proposal in the proposed rule. We did not propose significant revisions to the MS-DRGs

in the FY 2010 IPPS/RY 2010 LTCH PPS proposed rule (74 FR 24091) for these codes.

We stated that we were encouraging individuals with comments about MS-DRG

classifications to submit these comments no later than early December of each year so

they can be carefully considered for possible inclusion in the annual proposed rule and, if

included, may be subjected to public review and comment. Therefore, we did not add

these codes to the MCC list or the CC list for FY 2010. We stated that we would

consider their appropriateness for inclusi on in next year's annual proposed rule.

In addition to the diagnosis codes mentioned above, we also have received

requests that we consider changing the fo llowing diagnosis codes from a non-CC to a

CC:

● 278.00 (Obesity NOS)

● 278.01 (Morbid obesity)

● 278.02 (Overweight)

We analyzed claims data for the diag nosis codes mentione d above related to

obesity and major osseous defects. We used the same approach we used in initially

creating the MS-DRGs and classifying seconda ry diagnosis codes as non-CCs, CCs, or

MCC. A detailed discussion of the process and criteria we used in this process is

described in the FY 2008 IPPS final rule (72 FR 47158 through 47161). We refer the

readers to this discussion for complete info rmation on our approach to developing the

non-CC, CC, and MCC lists. Each diagnosis fo r which Medicare data were available wasCMS-1498-P 209

evaluated to determine its impact on resource use and to determine the most appropriate

CC subclass (non-CC, CC, or MCC) assignment. In order to make this determination, the

average cost for each subset of cases was comp ared to the expected cost for cases in that

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

Code Diagnosis Cnt1 C1 Cnt2 C2 Cnt3 C3

Count (Cnt) is the number of patients in each subset. C1, C2, and C3 are a

measure of the impact on resource use of patients in each of the subsets. The C1, C2, and

C3 values are a measure of the ratio of average costs for patients with these conditions to

the expected average cost across all cases. The C1 value reflects a patient with no other

secondary diagnosis or with all other sec ondary diagnoses that are non-CCs. The C2

value reflects a patient with at least one ot her secondary diagnosis that is a CC but none

that is a MCC. The C3 value reflects a patient with at least one other secondary diagnosis

that is a MCC. A value close to 1.0 in the C1 field would suggest that the diagnosis code

produces the same expected value as a non-CC. A value close to 2.0 suggests the

condition is more like a CC than a non-CC but not as significant in resource usage as an

MCC. A value close to 3.0 suggests the cond ition is expected to consume resources more

similar to an MCC than a CC or non-CC. For a dditional details on this analysis, we refer

readers to the FY 2008 IPPS final rule at 72 FR 47158 through 47161.

The following chart shows the analysis for each of the obesity related and major

osseous defect diagnosis codes that are currently classified as non-CCs.

Code Diagnosis Cnt1 C1 Cnt2 C2 Cnt3 C3 278.00 Obesity NOS 130,310 1.0755 116,304 1.7234 45,565 2.3843CMS-1498-P 210

Code Diagnosis Cnt1 C1 Cnt2 C2 Cnt3 C3 278.01 Morbid obesity 51,832 1.2619 106,169 1.9630 52,398 2.6787 278.02 Overweight 5,242 0.9948 3,594 1.7042 1,033 2.3471 731.3 Major osseous defects 215 1.3833 575 2.3390 186 2.7627

V85.35 BMI 35.0- 35.9,adult 2,621 0.9759 1,480 1.6932 499 2.3664

V85.36 BMI 36.0- 36.9,adult 2,359 0.9729 1,298 1.6536 466 2.3107

V85.37 BMI 37.0- 37.9,adult 2,305 0.9849 1,271 1.7225 473 2.4032

V85.38 BMI 38.0- 38.9,adult 2,152 0.9713 1,231 1.5964 432 2.2743

V85.39 BMI 39.0- 39.9,adult 2,253 0.9857 1,141 1.7741 445 2.4919

The C1 findings do not support a reclassifi cation of any of these diagnosis codes

from a non-CC to a CC. As can be seen by the C1 findings, the codes range from a low

of 0.9729 for code V85.35 to a high of 1.3833 for diagnosis code 731.3. These findings

are consistent with a classi fication as a non-CC. Therefore, for FY 2011, we are not

proposing to change the CC classification of an y of the diagnosis codes mentioned in the

chart above from a non-CC to a CC. Our clinical advisors agree with this

recommendation.

We also examined claims data for di agnosis code V85.4 (Body mass index 40 and

over, adult), which is classified as a CC. We received a request to reclassify this code as

a MCC. The following chart summaries our findings for this diagnosis code:

Code Diagnosis Cnt1 C1 Cnt2 C2 Cnt3 C3

V85.4 BMI 40 and over, adult 51,871 1.2323 59,941 2.1711 57,220 3.0465CMS-1498-P 211

We note that the C1 finding of 1.2323 does not support a reclassification of this

diagnosis code from a CC to a MCC. This finding is much more consistent with

classifying the code as a non-CC. Our c linical advisors recommended that CMS not

reclassify this diagnosis code from a CC to a non-CC at this time. They recommended

that CMS analyze data associated with this diagnosis code again in the future to

determine if it conti nues to act like a non-CC. We are not recommending any change in

the severity classification of diagnosis code V85.4. We are proposing to retain it as a CC

for FY 2011.

We welcome public comments on our proposal not to change the severity levels

of the diagnosis codes mentioned above.

(3) Suggested Change to the Severity Le vel for Alzheimer’s Disease Diagnosis Code

We received a request to change the severity classification for diagnosis code

331.0 (Alzheimer’s disease). Currently, this di agnosis code is classified as a non-CC.

We analyzed claims data for this diagnosis code. The following chart shows our

findings:

Code Diagnosis Cnt1 C1 Cnt2 C2 Cnt3 C3

331.0 Alzheimer's disease 83,743 1.1381 114,445 1.8890 77,841 2.4185

The C1 finding of 1.1381 for Alzhe imer’s disease supports the current

classification of this diagnosis code as a non- CC. Our clinical advisors agree with this

classification. Therefore, we are not proposin g to change the severity classification ofCMS-1498-P 212

diagnosis code 331.0 from a non-CC to a CC for FY 2011. We believe the code is

appropriately classified as a non-CC.

(4) Proposed Change to the Severity Le vel for Acute Renal Failure, Unspecified

Diagnosis Code

We received a request to reclassify diagnosis code 584.9 (Acute renal failure,

unspecified) from a MCC to a CC. The commenter stated that this code is being widely

used to capture degrees of renal failure that range from that which is caused by mild

dehydration with only minor laboratory abnormalitie s all the way through severe renal

failure that requires dialysis. The commenter pointed out that there are no clinical criteria

for assigning diagnosis code 584.9 (Acute re nal failure, unspecified). The attending

physician must simply document the presence of acute renal failure for the diagnosis

code to be assigned. The c oncern is that the diagnosis code for Acute renal failure,

unspecified (diagnosis code 584.9) is being assigned to patients with a low clinical

severity level.

We also point out that the Editorial Advisory Board of Coding Clinic for

ICD-9-CM has received a number of requests to clarify the use of diagnosis code 584.9.

Coders are observing the terminology of “acute renal failure” being applied to patients

who are simply dehydrated. These patients do not require renal dialysis, and they do not

appear to be severely ill. Coders have stated that there appears to be an increase in the

use of the terminology of acute renal failure for patients who were previously referred to

as acute renal insufficiency. When acute renal insufficiency is documented, the

ICD-9-CM index directs the use of code 593.9 (Unspecified disorder of kidney andCMS-1498-P 213

ureter). Diagnosis code 593.9 includes acute re nal insufficiency and is classified as a

non-CC. The problem is further compounded by the fact that there is no consistent

convention among clinicians fo r documenting acute renal insuff iciency versus acute renal

failure.

We examined claims data on diagnosis code 584.9, and our findings are shown in

the table below:

Code Diagnosis Cnt1 C1 Cnt2 C2 Cnt3 C3

584.9 Acute kidney failure, unspecified 124,428 1.8364 411,667 2.6151 417,359 3.2429

The C1 finding of 1.8364 is more consiste nt with a classification of a CC. Our

clinical advisors agreed that cases captured by diagnosis code 584.9 are more

appropriately classified as a CC. This unspeci fied type of kidney failure is clearly not

capturing patients with a MCC se verity level. Therefore, we are proposing to change the

severity level for diagnosis code 584.9 from a MCC to a CC for FY 2011.

Tables 6G and 6H, Additions to a nd Deletions from the CC Exclusion List,

respectively, which are effective for discharges occurring on or after October 1, 2010, are

not being published in the Addendum to this pr oposed rule because of the length of the

two tables. Instead, we are making them av ailable through the Internet on the CMS Web

site at: http://www.cms.hhs.gov/AcuteInpatientP PS. Each of these principal diagnoses

for which there is a CC exclusion is shown in Tables 6G and 6H in the Addendum to this

proposed rule with an asterisk, and the c onditions that will not count as a CC, are

provided in an indented column immediately following the affected principal diagnosis.CMS-1498-P 214

A complete updated MCC, CC, and Non-CC Exclusions List is also available

through the Internet on the CMS Web site at:

http://www.cms.hhs.gov/AcuteInpatientPPS. Be ginning with discharges on or after

October 1, 2010, the indented diagnoses will not be recognized by the GROUPER as

valid CCs for the asterisked principal diagnosis.

To assist readers in identifying the changes to the MCC and CC lists that occurred

as a result of updates to the ICD-9-CM codes, as described in Tabl es 6A, 6C, and 6E of

the Addendum to this proposed rule, we are providing the following summaries of those

MCC and CC changes.

There were no additions to the MS-DRG MCC List for FY 2011 (Table 6I.1).

SUMMARY OF DELETIONS FROM TH E MS-DRG MCC LIST--TABLE 6I.2

Code Description 584.9 Acute renal failure, unspecified

SUMMARY OF ADDITIONS TO THE MS-DRG CC LIST--TABLE 6J.1

Code Description 584.9 Acute renal failure, unspecified 786.30 Hemoptysis, unspecified 786.31 Acute idiopathic pulmonary hemorrhage in infants [AIPHI] 786.39 Other hemoptysis 999.60 ABO incompatibility reaction, unspecified 999.61 ABO incompatibility with hemolytic transfusion reaction not specified as acute or delayed 999.62 ABO incompatibility with acute hemolytic transfusion reaction 999.63 ABO incompatibility with delaye d hemolytic transfusion reaction 999.69 Other ABO incompatibility reaction 999.70 Rh incompatibility reaction, unspecified 999.71 Rh incompatibility with hemolytic tr ansfusion reaction not specified as acute or delayed 999.72 Rh incompatibility with acute hemolytic transfusion reactionCMS-1498-P 215

Code Description 999.73 Rh incompatibility with delaye d hemolytic transfusion reaction 999.74 Other Rh incompatibility reaction 999.75 Non-ABO incompatibility reaction, unspecified 999.76 Non-ABO incompatibility with he molytic transfusion reaction not specified as acute or delayed 999.77 Non-ABO incompatibility with acut e hemolytic transfusion reaction 999.78 Non-ABO incompatibility with dela yed hemolytic transfusion reaction 999.79 Other non-ABO incompatibility reaction 999.83 Hemolytic transfusion reaction, incompatibility unspecified 999.84 Acute hemolytic transfusion reac tion, incompatibility unspecified 999.85 Delayed hemolytic transfusion reaction, incompatibility unspecified V85.41 Body Mass Index 40.0-44.9, adult V85.42 Body Mass Index 45.0-49.9, adult V85.43 Body Mass Index 50.0-59.9, adult V85.44 Body Mass Index 60.0-69.9, adult V85.45 Body Mass Index 70 and over, adult

SUMMARY OF DELETIONS FROM TH E MS-DRG CC LIST--TABLE 6J.2

Code Description 786.3 Hemoptysis 999.6 ABO incompatibility reaction 999.7 Rh incompatibility reaction V85.4 Body Mass Index 40 and over, adult

Alternatively, the complete documentation of the GROUPER logic, including the

current CC Exclusions List, is available from 3M/Health Information Systems (HIS),

which, under contract with CMS, is res ponsible for updating and maintaining the

GROUPER program. The current MS-DRG Definitions Manual, Version 27.0, is

available for $250.00, which includes shipping an d handling. Version 27.0 of the manual

is also available on a CD for $200.00; a combin ation hard copy and CD is available for

$400.00. Version 28.0 of this manual, which will include the final FY 2011 MS-DRG

changes, will be available in CD only fo r $225.00. These manuals may be obtained byCMS-1498-P 216

writing 3M/HIS at the following address: 100 Barnes Road, Wallingford, CT 06492; or

by calling (203) 949-0303, or by obtaining an order form at the Web site:

http://www.3MHIS.com. Please specify th e revision or revisions requested.

10. Review of Procedure Codes in MS DRGs 981 through 983; 984 through 986; and

987 through 989

Each year, we review cases assigned to former CMS DRG 468 (Extensive O.R.

Procedure Unrelated to Prin cipal Diagnosis), CMS DRG 476 (Prostatic O.R. Procedure

Unrelated to Principal Diagnosis), and CMS DRG 477 (Nonextensive O.R. Procedure

Unrelated to Principal Diagnosis) to determine whether it would be appropriate to change

the procedures assigned among these CMS DR Gs. Under the MS-DRGs that we adopted

for FY 2008, CMS DRG 468 was split three wa ys and became MS -DRGs 981, 982, and

983 (Extensive O.R. Procedure Unrelated to Principal Diagnosis with MCC, with CC,

and without CC/MCC, respectively). CMS DRG 476 became MS-DRGs 984, 985, and

986 (Prostatic O.R. Procedure Unrelated to Principal Diagnos is with MCC, with CC, and

without CC/MCC, respectively). CMS DRG 477 became MS-DRGs 987, 988, and 989

(Nonextensive O.R. Procedure Unrelated to Principal Diagnosis with MCC, with CC, and

without CC/MCC, respectively).

MS-DRGs 981 through 983, 984 through 986, and 987 through 989 (formerly

CMS DRGs 468, 476, and 477, respectively) are re served for those cases in which none

of the O.R. procedures performed are relate d to the principal diagnosis. These MS-DRGs

are intended to capture atypical cases, that is, those cases not occurring with sufficient

frequency to represent a distinct, recogniz able clinical group. MS-DRGs 984 throughCMS-1498-P 217

986 (previously CMS DRG 476) are assigned to those discharges in which one or more

of the following prostatic procedures are pe rformed and are unrela ted to the principal

diagnosis:

● 60.0, Incision of prostate

● 60.12, Open biopsy of prostate

● 60.15, Biopsy of periprostatic tissue

● 60.18, Other diagnostic procedures on prostate and peri prostatic tissue

● 60.21, Transurethral prostatectomy

● 60.29, Other transurethral prostatectomy

● 60.61, Local excision of lesion of prostate

● 60.69, Prostatectomy, not elsewhere classified

● 60.81, Incision of periprostatic tissue

● 60.82, Excision of periprostatic tissue

● 60.93, Repair of prostate

● 60.94, Control of (postoperativ e) hemorrhage of prostate

● 60.95, Transurethral balloon dila tion of the prostatic urethra

● 60.96, Transurethral destruction of pros tate tissue by microwave thermotherapy

● 60.97, Other transurethral de struction of prostate tissue by other thermotherapy

● 60.99, Other operations on prostate

All remaining O.R. procedures are assigned to MS-DRGs 981 through 983 and

987 through 989, with MS-DRGs 987 through 989 a ssigned to those discharges in whichCMS-1498-P 218

the only procedures performed are nonextensive procedures that are unrelated to the

principal diagnosis. 3

Our review of MedPAR claims data s howed that there were 59 cases in which

procedures related to the pros tate were arrayed across 10 di fferent MDCs. None of the

59 cases were cases that should logically be assigned to any of the other MDCs. For

example, there were a total of 16 cases of other transurethral prostate surgery that

occurred in MDC 5 (Diseases and Disorders of the Circulatory System). In addition,

none of the cases had lengths of stay or av erage charges that woul d indicate that these

cases were anything other than some of th e expected irregularities of medical care.

Therefore, for FY 2011, we are not proposing to change the procedures assigned among

these MS-DRGs.

a. Moving Procedure Codes from MS-D RGs 981 through 983 or MS-DRGs 987 through

989 into MDCs

We annually conduct a review of proce dures producing assignment to MS-DRGs

981 through 983 (Extensive O.R. procedure unrelated to principal diagnosis with MCC,

with CC, and without CC.MCC, respec tively) or MS-DRGs 987 through 989

(Nonextensive O.R. procedure unrelated to pr incipal diagnosis with MCC, with CC, and

without CC/MCC, respectively) on the basis of volume, by procedure, to see if it would

3 The original list of the ICD-9-CM procedure codes for the procedures we consider nonextensive procedures, if performed with an unrelated principal diagnosis, was published in Table 6C in section IV. of the Addendum to the FY 1989 final rule (53 FR 38591). As part of the FY 1991 final rule (55 FR 36135), the FY 1992 final rule (56 FR 43212), the FY 1993 final rule (57 FR 23625), the FY 1994 final rule (58 FR 46279) , the FY 1995 final rule (59 FR 45336), the FY 1996 final rule (60 FR 45783), the FY 1997 final rule (61 FR 46173), and the FY 1998 final rule (62 FR 45981), we moved several other procedures from DRG 468 to DRG 477, and some procedures from DRG 477 to DRG 468. No procedures were moved in FY 1999, as noted in the final rule (63 FR 40962); in FY 2000 (64 FR 41496); in FY 2001 (65 FR 47064); or in FY 2002 (66 FR 39852). In the FY 2003 final rule (67 FR 49999) we did not move any procedures from DRG 477. However, we did move procedure codes from DRG 468 and placed them in more clinically coherent DRGs. In the FY 2004 final rule (68 FR 45365), we moved several procedures from DRG 468 to DRGs 476 and 47 7 because the procedures are nonextensive. In the FY 2005 final rule (69 FR 48950), we moved one procedure from DRG 468 to 477. In addition , we added several existing procedures to DRGs 476 and 477. In the FY 2006 (70 FR 47317), we moved one procedure from DRG 468 and assigned it to DRG 477. In FY 2007, we moved one procedure from DRG 468 and assigned it to DRGs 479, 553, and 554. In FYs 2008, 2009, and FY 2010, no pro cedures were moved, as noted in the FY 2008 final rule with comment period (72 FR 46241), the FY 2009 final rule (73 FR 48513), and the FY 2 010 final rule (74 FR 43796).CMS-1498-P 219

be appropriate to move procedure codes out of these MS-DRGs into one of the surgical

MS-DRGs for the MDC into which the principal diagnosis falls. The data are arrayed in

two ways for comparison purposes. We look at a frequency count of each major

operative procedure code. We also compar e procedures across MDCs by volume of

procedure codes within each MDC.

We identify those procedures occurring in conjunction with certain principal

diagnoses with sufficient frequency to justif y adding them to one of the surgical

MS-DRGs for the MDC in which the diagnosis fa lls. Our review of claims data showed

that there were 4,443 cases in MS-DRGs 981 through 983. These 4,443 cases were

arrayed across 18 MDCs. The single most common procedure was code 00.66

(Percutaneous transluminal coronary angiopl asty [PTCA] of coronary atherectomy),

21 cases, located in MDC 1 (Diseases and Disorders of the Nervous System). These

cases represent a very small volume of cases that are unlikely to indicate medical practice

trends. In addition, from a clinical coheren ce standpoint, we do not believe it benefits the

GROUPER system to add cardiac procedures to the nervous system MDC. The same

situation was evident in MS-DRGs 987 throug h 989. There were a total of 1,601 cases

across 17 MDCs and, again, the cases did not re present clinically coherent examples of

medical care that warranted movement of procedure codes into additional MS-DRGs.

Examples of cases that we reviewed in cluded six cases of bone biopsies in MDC 21

(Injuries, Poisonings and Toxic Effects of Drug s) and one case of a destruction of a lesion

of the knee in MDC 13 (Diseases and Disorder s of the Female Reproductive System).

Again, the volume of these cases is negligible, and clinical coherence is not demonstratedCMS-1498-P 220

to the degree that a change in the MS-DRGs is warranted. Therefore, for FY 2011, we

are not proposing to remove any proce dures from MS-DRGs 981 through 983 or

MS-DRGs 987 through 989 into one of the su rgical MS-DRGs for the MDC into which

the principal diagnosis is assigned.

b. Reassignment of Procedures am ong MS-DRGs 981 through 983, 984 through 986,

and 987 through 989

We also annually review the list of ICD-9-CM procedures that, when in

combination with their principal diagnosis code, result in assignment to MS-DRGs 981

through 983, 984 through 986 (Prostatic O.R. pr ocedure unrelated to principal diagnosis

with MCC, with CC, or without CC/MCC, respectively), and 987 through 989, to

ascertain whether any of thos e procedures should be reassigned from one of these three

MS-DRGs to another of the three MS-DRGs based on average charges and the length of

stay. We look at the data for trends such as shifts in treatment practice or reporting

practice that would make the resulting MS-DRG assignment illogical. If we find these

shifts, we would propose to move cases to keep the MS-DRGs clinically similar or to

provide payment for the cases in a similar manner. Generally, we move only those

procedures for which we have an adequate number of discharges to analyze the data.

To reiterate, our review of claims data showed that 18 MDCs were represented in

MS-DRGs 981 through 983, for a total of 4,443 cases. There were 10 MDCs represented

in MS-DRGs 984 through 986, which contained 59 cases. In addition, our review of

claims data for MS-DRGs 987 through 989 showed 1,601 cases across 17 MDCs.

However, these cases represent such disparat e situations as one case of a large bowelCMS-1498-P 221

incision assigned to MDC 1 (Diseases and Disorders of the Nervous System) and one

case of a revision of the femoral component of a hip replacement assigned to MDC 3

(Diseases and Disorders of the Ear, Nose, M outh, and Throat). We do not believe that

any of these cases represent shifts in either treatment practice or reporting practice. As

these types of cases do not represent clini cal coherence, we do not believe that the

addition of these procedure codes identified in our review would positively benefit the

overall MS-DRG logic. Therefore, for FY 2011, we are not proposing to move any

procedure codes among these MS-DRGs.

c. Adding Diagnosis or Procedure Codes to MDCs

Based on the review of cases in the MDCs as described above in sections G.10.a.

and b., we are not proposing to add any diagnosis or procedure codes to MDCs for

FY 2011.

11. Changes to the ICD-9-CM Coding Syst em, Including Discussion of the Replacement

of the ICD-9-CM Coding System with th e ICD-10-CM and ICD-10-PCS Systems in

FY 2014

a. ICD-9-CM Coding System

As described in section II.B.1. of th e preamble of this proposed rule, the

ICD-9-CM is a coding system currently used for the reporting of diagnoses and

procedures performed on a patient. In September 1985, the ICD-9-CM Coordination and

Maintenance Committee was formed. This is a Federal interdepartmental committee,

co-chaired by the National Center for Health Statistics (NCHS), the Centers for Disease

Control and Prevention, and CMS, charged w ith maintaining and updating the ICD-9-CMCMS-1498-P 222

system. The Committee is jointly responsib le for approving coding changes, and

developing errata, addenda, and other modifi cations to the ICD-9-CM to reflect newly

developed procedures and technologies and newly identified diseases. The Committee is

also responsible for promoting the use of Federal and non-Federal educational programs

and other communication techniques with a view toward standardizing coding

applications and upgrading the qua lity of the classification system.

The Official Version of the ICD-9-CM contains the list of valid diagnosis and

procedure codes. (The Official Version of the ICD-9-CM is available from the

Government Printing Office on CD-ROM for $19.00 by calling (202) 512-1800.)

Complete information on ordering the CD-ROM is also available at:

http://www.cms.hhs.gov/ICD9ProviderDiag nosticCodes/05_CDROM.asp#TopOfPage.

The Official Version of the ICD-9-CM is no longer available in printed manual form

from the Federal Government; it is only ava ilable on CD-ROM. Users who need a paper

version are referred to one of the many products available from publishing houses.

The NCHS has lead responsibility for the ICD-9-CM diagnosis codes included in

the Tabular List and Alphabetic Index for Diseases , while CMS has lead responsibility

for the ICD-9-CM procedure code s included in the Tabular List and Alphabetic Index for

Procedures

. The Committee encourages participation in the above process by health-related

organizations. In this re gard, the Committee holds public meetings for discussion of

educational issues and proposed coding change s. These meetings provide an opportunity

for representatives of recognized organizations in the coding field, such as the AmericanCMS-1498-P 223

Health Information Management Association (AHIMA), the American Hospital

Association (AHA), and various physician specialty groups, as well as individual

physicians, health information management professionals, and other members of the

public, to contribute ideas on coding matters. After considering the opinions expressed at

the public meetings and in writing, the Committee formulates recommendations, which

then must be approved by the agencies.

The Committee presented proposals for c oding changes for implementation in

FY 2011 at a public meeting held on Septem ber 16-17, 2009 and finalized the coding

changes after consideration of comments received at the meetings and in writing by

November 20, 2009. Those coding changes are announced in Tables 6A through 6F in

the Addendum to this proposed rule. The Committee held its 2010 meeting on

March 9-10, 2010. New codes for which there was a consensus of public support and for

which complete tabular and i ndexing changes are made by May 2010 will be included in

the October 1, 2010 update to ICD-9-CM. Code revisions that were discussed at the

March 9-10, 2010 Committee meeting but that coul d not be finalized in time to include

them in the Addendum to this proposed rule w ill be included in Tables 6A through 6F of

the final rule and will be marked with an asterisk (*).

Copies of the minutes of the procedure codes discussions at the Committee’s

September 16-17, 2009 meeting a nd March 9-10, 2010 meeting can be obtained from the

CMS Web site at: http://cms.hhs.gov/ICD9 ProviderDiagnosticCodes/03_meetings.asp.

The minutes of the diagnosis codes discu ssions at the September 16-17, 2009 meeting

and March 9-10, 2010 meeting are found at: http://www.cdc.gov/nchs/icd.htm . TheseCMS-1498-P 224

Web sites also provide deta iled information about the Committee, including information

on requesting a new code, attending a Committee meeting, and timeline requirements and

meeting dates.

We encourage commenters to address su ggestions on coding issues involving

diagnosis codes to: Donna Pickett, Co-C hairperson, ICD-9-CM Coordination and

Maintenance Committee, NCHS, Room 2402, 3311 Toledo Road, Hyattsville, MD

20782. Comments may be sent by E-mail to: dfp4@cdc.gov.

Questions and comments concerning the procedure codes shoul d be addressed to:

Patricia E. Brooks, Co-C hairperson, ICD-9-CM Coor dination and Maintenance

Committee, CMS, Center for Medicare Ma nagement, Hospital and Ambulatory Policy

Group, Division of Acute Ca re, C4-08-06, 7500 Security Boulevard, Baltimore, MD

21244-1850. Comments may be sent by E- mail to: patricia .brooks2@cms.hhs.gov.

The ICD-9-CM code changes that have been approved will become effective

October 1, 2010. The new ICD-9-CM codes are listed, along with their MS-DRG

classifications, in Tables 6A and 6B (New Diagnosis Codes and New Procedure Codes,

respectively) in the Addendum to this propos ed rule. As we stated above, the code

numbers and their titles were presented for public comment at the ICD-9-CM

Coordination and Maintenance Committee meetings. Both oral and written comments

were considered before the codes were approved.

In this proposed rule, we are soliciting comments on the proposed classification of

these new codes, which are shown in Tables 6A and 6B of the Addendum to this

proposed rule.CMS-1498-P 225

For codes that have been replaced by new or expanded codes, the corresponding

new or expanded diagnosis codes are include d in Table 6A in the Addendum to this

proposed rule. New procedure codes are show n in Table 6B in the Addendum to this

proposed rule. Diagnosis codes that have been replaced by expanded codes or other

codes or have been deleted are in Table 6C (Invalid Diagnosis Codes) in the Addendum

to this proposed rule. These invalid diag nosis codes will not be recognized by the

GROUPER beginning with discha rges occurring on or after October 1, 2010. Table 6D

in the Addendum to this proposed rule contai ns invalid procedure codes. These invalid

procedure codes will not be recognized by the GROUPER beginning with discharges

occurring on or after October 1, 2010. Revisions to diagnosis code titles are in Table 6E

(Revised Diagnosis Code Titles) in the A ddendum to this proposed rule, which also

includes the MS-DRG assignments for these re vised codes. Table 6F in the Addendum

to this proposed rule includes revi sed procedure code titles for FY 2011.

In the September 7, 2001 final rule implementing the IPPS new technology

add-on payments (66 FR 46906), we indicated we would attempt to include proposals for

procedure codes that would describe new technology discussed and approved at the

Spring meeting as part of the code revisions effective the following October. As stated

previously, ICD-9-CM codes discussed at the March 9-10, 2010 Committee meeting that

receive consensus and that are finalized by May 2010 will be included in Tables 6A

through 6F in the Addendum to the final rule.

Section 503(a) of Pub. L. 108-173 included a requirement for updating

ICD-9-CM codes twice a year instead of a sing le update on October 1 of each year. ThisCMS-1498-P 226

requirement was included as part of the ame ndments to the Act relating to recognition of

new technology under the IPPS. Section 503(a) amended section 1886(d)(5)(K) of the

Act by adding a clause (vii) which states that the "Secretary shall provide for the addition

of new diagnosis and procedure codes on Apr il 1 of each year, but the addition of such

codes shall not require the Secretary to ad just the payment (or diagnosis-related group

classification) . . . until the fiscal year that begins after such date." This requirement

improves the recognition of new technologies under the IPPS system by providing

information on these new technologies at an ear lier date. Data will be available 6 months

earlier than would be possible with update s occurring only once a year on October 1.

While section 1886(d)(5)(K)(vii) of the Act states that the addition of new

diagnosis and procedure codes on April 1 of each year shall not require the Secretary to

adjust the payment, or DRG classificati on, under section 1886(d) of the Act until the

fiscal year that begins after such date, we have to update the DRG software and other

systems in order to recognize and accept th e new codes. We also publicize the code

changes and the need for a mid-year systems update by providers to identify the new

codes. Hospitals also have to obtain the new code books and encoder updates, and make

other system changes in order to identify and report the new codes.

The ICD-9-CM Coordination and Maintenance Committee holds its meetings in

the spring and fall in order to update the c odes and the applicable payment and reporting

systems by October 1 of each year. Items are placed on the agenda for the ICD-9-CM

Coordination and Maintenance Committee meeting if the request is received at least

2 months prior to the meeting. This requirement allows time for staff to review andCMS-1498-P 227

research the coding issues and prepare materi al for discussion at the meeting. It also

allows time for the topic to be public ized in meeting announcements in the Federal

Register as well as on the CMS Web site. The public decides whether or not to attend

the meeting based on the topics listed on the agenda. Final decisions on code title

revisions are currently made by March 1 so that these titles can be included in the IPPS

proposed rule. A complete addendum describi ng details of all ch anges to ICD-9-CM,

both tabular and index, is published on the CMS and NCHS Web sites in May of each

year. Publishers of coding books and softwa re use this information to modify their

products that are used by health care provide rs. This 5-month time period has proved to

be necessary for hospitals and other providers to update their systems.

A discussion of this timeline and the need for changes are included in the

December 4-5, 2005 ICD-9-CM Coordination and Maintenance Committee minutes. The

public agreed that there was a need to hold th e fall meetings earlier, in September or

October, in order to meet the new impleme ntation dates. The public provided comment

that additional time would be needed to update hospital systems and obtain new code

books and coding software. There was consid erable concern expressed about the impact

this new April update wo uld have on providers.

In the FY 2005 IPPS final rule, we implemented section 1886(d)(5)(K)(vii) of the

Act, as added by section 503(a) of Pub. L. 108-173, by developing a mechanism for

approving, in time for the Apr il update, diagnosis and procedur e code revisions needed to

describe new technologies a nd medical services for purposes of the new technology

add-on payment process. We also establis hed the following process for making theseCMS-1498-P 228

determinations. Topics considered dur ing the Fall ICD-9-CM Coordination and

Maintenance Committee meeting are considered for an April 1 update if a strong and

convincing case is made by the requester at the Committee's public meeting. The request

must identify the reason why a new code is needed in April for purposes of the new

technology process. The participants at the meeting and those reviewing the Committee

meeting summary report are provided the oppor tunity to comment on this expedited

request. All other topics are considered fo r the October 1 update. Participants at the

Committee meeting are encouraged to comment on all such requests. There were no

requests approved for an expedited April l, 2010 implementation of an ICD-9-CM code at

the September 16-17, 2009 Committee meeting. Therefore, there were no new

ICD-9-CM codes implemented on April 1, 2010.

Current addendum and code title information is published on the CMS Web site

at: http://www.cms.hhs.gov/icd9ProviderD iagnosticCodes/01_overv iew.asp#TopofPage.

Information on ICD-9-CM diagnosis codes, al ong with the Official ICD-9-CM Coding

Guidelines, can be found on the Web site at: http://www.cdc.gov/nchs/icd9.htm.

Information on new, revised, and deleted ICD-9-CM codes is also provided to the AHA

for publication in the Coding Clinic for ICD-9-CM . AHA also distributes information to

publishers and software vendors.

CMS also sends copies of all ICD- 9-CM coding changes to its Medicare

contractors for use in updating their system s and providing education to providers.

These same means of disseminating info rmation on new, re vised, and deleted

ICD-9-CM codes will be used to notify providers, publishers, software vendors,CMS-1498-P 229

contractors, and others of any changes to the ICD-9-CM codes that are implemented in

April. The code titles are adopted as part of the ICD-9-CM Coordination and

Maintenance Committee process. Thus, although we publish the code titles in the IPPS

proposed and final rules, they are not subject to comment in the proposed or final rules.

We will continue to publish the October code updates in this manner within the IPPS

proposed and final rules. For codes that are implemented in April, we will assign the new

procedure code to the same MS-DRG in which its predecessor code was assigned so there

will be no MS-DRG impact as far as MS-DRG assignment. Any midyear coding updates

will be available through the Web sites indicat ed above and through the Coding Clinic for

ICD-9-CM . Publishers and software vendors currently obtain code changes through

these sources in order to update their code books and software systems. We will strive to

have the April 1 updates available throug h these Web sites 5 months prior to

implementation (that is, early November of th e previous year), as is the case for the

October 1 updates.

b. Code Freeze

The International Classification of Di seases, 10th Revision (ICD-10) coding

system applicable to hospita l inpatient services will be implemented on October 1, 2013,

as described in the Health Insurance Portability and Accountability Act (HIPAA)

Administrative Simplification: Modifications to Medical Data code Set Standards to

Adopt ICD-10-CM and ICD-10-PCS fi nal rule (74 FR 3328 through 3362,

January 16, 2009). The ICD-10 coding system includes the Interna tional Classification

of Diseases, 10th Revision, C linical Modification (ICD-10-CM ) for diagnosis coding andCMS-1498-P 230

the International Classification of Diseas es, 10th Revision, Procedure Coding System

(ICD-10-PCS) for inpatient hospital pro cedure coding, as well as the Official

ICD-10-CM and ICM-10-PCS Guidelines for Coding and Reporting. In the

January 16, 2009 ICD-10-CM and ICD-10-PCS final rule (74 FR 3328 through 3362),

there was a discussion of the need for a par tial or total freeze in the annual updates to

both ICD-9-CM and ICD-10-CM and ICD- 10-PCS codes. The public comment

addressed in this final rule stated that th e annual code set updates should cease l year

prior to the implementation of ICD-10. The co mmenters stated that this freeze of code

updates would allow for instruc tional and/or coding software programs to be designed

and purchased early, without concern that an upgrade would take place immediately

before the compliance date, necessita ting additional updates and purchases.

We responded to comments in the ICD- 10 final rule that the ICD-9-CM

Coordination and Maintenance Committee has jurisdiction over any action impacting the

ICD-9-CM and ICD-10 code sets. Therefore, the issue of consideration of a moratorium

on updates to the ICD-9-CM, ICD-10-CM, and IC D-10-PCS code sets in anticipation of

the adoption of ICD-10-CM and ICD-10- PCS would be addressed through the

Committee at a future public meeting.

At the March 11-12, 2009 ICD-9-CM Coordination and Ma intenance Committee

meeting, the public was notified that there w ould be a discussion of whether there was a

need to freeze updates to ICD-9-CM and/or ICD-10-CM and ICD-10-PCS prior to the

implementation of ICD-10. The audience wa s asked to consider this issue and be

prepared to discuss the topic at the Se ptember 16-17, 2009 ICD-9-CM Coordination andCMS-1498-P 231

Maintenance Committee meeting. Advance written comments on this topic were

welcomed. The first part of the m eeting was devoted to this topic.

CMS received comments in advance of the meeting. CMS staff summarized

these advanced comments at the meeting as follows:

No ICD-9-CM or ICD-10-CM/PCS updates beginning October 1, 2010

(36 months for implementation activities without annual code updates). This

approach involves updating ICD-9-CM and ICD-10 codes on October 1, 2010, and not

updating them again until after ICD-10 implementation on October 1, 2013. The

commenters mentioned the extensive work needed to prepare for the transition to ICD-10

which will affect vendors, payers, providers , trainers, clearinghouses, and all claims

handling organizations. The commenters stat ed that the 36 months between the last

ICD-9-CM and ICD-10 updates on October 1, 2010 and the implementation of ICD-10

on October 1, 2013, were necessary to prepare and train for the transition.

No ICD-9-CM or ICD-10-CM/PCS updates beginning October 1, 2011

(24 months for implementation activities without annual code updates). This

approach involves updating ICD-9-CM and ICD-10 codes on October 1, 2011, and not

updating them again until after ICD-10 implementation on October 1, 2013. The

commenters raised similar conc erns to those mentioned a bove. The commenters stated

that, if codes continue to change, the chan ges would make it difficult for vendors, payers,

and providers to be ready and for coder training to be successful. One commenter

suggested that a provision be developed to perform limited annual upda tes to capture new

technologies or new diagnoses.CMS-1498-P 232

No ICD-10-CM/PCS updates beginning October 1, 2012 but continue annual

updates to ICD-9-CM. This commenter supported annua l updates to ICD-9-CM to

capture advances in medical science. Ho wever, the commenter supported a freeze of

ICD-10 beginning October 1, 2012, to give the industry time to update systems and

prepare for ICD-10 implementation.

No ICD-10 updates on October 1, 2012, but update ICD-9-CM without

interruption. (No period for implementa tion activities wi thout annual code

updates.) The commenter recommended no ICD- 10 updates on October 1, 2012, but

then updating ICD-10 again on October 1, 2013. The commenter recommended updating

ICD-9-CM continuously through a final update on October 1, 2012. The commenter

stated that having a two or three year ga p between updating the code books would lead to

a loss of data. The commenter stated that there is a need to retain the ability to update the

code books to capture conditions such as Swine flu.

Update both ICD-9-CM and ICD-10-CM/PCS annually through

October 1, 2013 (no period fo r implementation activities withou t annual code

updates). The commenter stated that codes should not be frozen prior to the

implementation of ICD-10. The commenter st ated that freezing the updates would inhibit

the recognition of new technologies.

Many of the commenters suggested a re sumption of updates to ICD-10-CM and

ICD-10-PCS beginning on October 1, 2014. Ho wever, one commenter suggested annual

updates of ICD-10-CM and ICD-10-PCS w ithout interruptions, including on

October 1, 2013.CMS-1498-P 233

The topic was then opened for public discussion at the Committee meeting. CMS

received a variety of comments from the par ticipants that mirrored the advance written

comments. These comments ranged from those supporting a complete freeze for both

coding systems to those who recommended th at both coding systems continue to be

updated annually prior to ICD- 10 implementation. There were also many comments that

supported a more limited upda te process beginning on October 1, 2011, or

October 1, 2012, which would allow only a smal l number of new codes to capture new

technologies or new diseases. A number of commenters pointed out that section 503(a)

of Pub. L. 108-173 included a requirement for updating ICD-9-CM codes twice a year to

capture new technologies. The commenters st ated that CMS must make a provision to

capture new technologies despite any requests to freeze code updates.

Commenters voiced concerns about th e impact on vendors creating new ICD-10

products when both ICD-9-CM and IC D-10-CM and ICD-10-PCS codes were

extensively updated on an annual basis. Co mmenters stated that vendors and educators

were reluctant to begin ICD- 10 products and training materi als until there was a period of

stability without extensive annual updates. Some commenters stated that it was

important for physician offices to have time to prepare for the implementation of ICD-10.

Reducing the annual ICD-9-CM and ICD-10 annual update s would be helpful to

physician offices.

Other commenters stated that it was impor tant to update code s annually so that

information on new diseases a nd technologies can be captured. These commenters statedCMS-1498-P 234

that vendors, providers, system maintainers, and coders we re used to annual code

updates, and that they should continue.

One commenter requested that ICD-10- CM codes be frozen on October 1, 2011

so that ICD-10-CM codes could be coordi nated with the Diagnostic and Statistical

Manual of Mental Disorders (DSM), Fifth Edition. The commenter stated that the

American Psychiatric Associa tion plans to publish the fifth edition in 2012. Updates to

ICD-10-CM on or after October 1, 2011, would disrupt those plans.

One commenter suggested an approach th at would greatly reduce the number of

updates and provide more stability in the coding systems during the implementation

period. This commenter suggested that the large, regular code updates on ICD-9-CM be

discontinued beginning on October 1, 2011, or October 1, 2012. The commenter

suggested that CMS and CDC raise the bar for new code requests at that time and only

consider requests for new codes that clearly describe a new technology or a new disease.

The commenter stated that this may lead to the creation of some new procedure codes

which do not ultimately receive F DA approval, as is the case now.

CMS and CDC have carefully reviewed the comments received at the ICD-9-CM

Coordination and Maintenance Committee meeting as well as the written comments

submitted. Most commenters proposed a limited freeze on code updates to both

ICD-9-CM and ICD-10-CM and ICD-10-PCS c ode sets, with an exception made for

adding codes for new technologies and diseas es. Providing this exception would comply

with section 503(a) of Pub. L. 108-173, wh ich, as previously stated, includes a

requirement for updating ICD-9- CM codes twice a year to capture new technologies.CMS-1498-P 235

There was support for making the last regular update on October 1, 2011. The

commenters recommended that the ICD- 9-CM Coordination and Maintenance

Committee continue to discuss an y new code updates for both c oding systems. However,

new codes would only be added to ICD-9-CM or ICD-10 to capture new technologies, as

required by section 503(a) of Pub. L. 108-173. Other coding issues raised would be held

for consideration after ICD-10 is implemented.

In this proposed rule, we are soliciting a dditional input on this subject, especially

in light of the requirements on hospitals for m eaningful use of electronic health records.

We welcome public comments that explore whether a freeze is needed to help with

adoption of health IT, given other priorities such as achievement of meaningful use and

implementation of ICD-10 by FY 2013. We we lcome input on having the last regular,

annual update to both ICD- 9-CM and ICD-10 be made on October 1, 2011. On

October 1, 2012, there would be only limited c ode updates to both the ICD-9-CM and

ICD-10 coding systems to capture new tec hnologies and diseases. On October 1, 2013,

there would be only limited code updates to ICD-10 to capture new technologies and

diagnoses. Any other issues raised would be considered for implementation in ICD 10 on

October 1, 2014, a year after ICD-10 is impleme nted. We agree with commenters that

there is a need to provide th e provider, payer, and vendor community time to prepare for

the implementation of ICD-10 and the accompan ying system and product updates. The

vendor community is especially interested in providing a more stable code set for ICD-10

while they are developing new products.CMS-1498-P 236

We believe that this advance notice of a partial code freeze would provide the

health care industry ample time to request last major code update s to ICD-9-CM and

ICD-10, which could be discussed at the September 15-16, 2010 and the March 2011

ICD-9-CM Coordination and Maintenance Committee meeting. Codes discussed at these

two meetings would be considered for the final major code updates on October 1, 2011.

Any code issues raised after that time would be addressed at the ICD-9-CM Coordination

and Maintenance Committee meetings in September 2011 through March 2013 to

determine if they represente d new technologies or new diseases. Any new technologies

and diseases would be added during the re gular annual updates. Other code requests

would be held for imple mentation on October 1, 2014.

We welcome additional input on having the last regular code updates to

ICD-9-CM and ICD-10 on October 1, 2011, and to only add codes for new technologies

and diseases on October 1, 2012 and 2013. We also welcome additional input on having

the next regular update to ICD-10 occur again on October 1, 2014.

Information on ICD-10 can be f ound on the CMS Web site at:

http://www.cms.hhs.gov/ICD10. The final IC D-10 version of MS-DRGs would be

adopted under the formal rulemaking process as part of our annual IPPS updates.

c. Processing of 25 Diagnosis Codes a nd 25 Procedure Codes on Hospital Inpatient

Claims

We have received repeated requests from the hospital community to process all

25 diagnosis codes and 25 procedure codes submitted on electronic hospital inpatient

claims. Hospitals can submit up to 25 diagnoses and 25 procedures; however, CMS’CMS-1498-P 237

current system limitations allow for the processing of only the first 9 diagnoses and 6

procedures. While CMS accepts all 25 diag noses and 25 procedures submitted on the

claims, we do not process all of the codes because of these system limitations. We

recognize that much valuable information is lost by not processing the additional

diagnosis and procedure codes th at are reported by hospitals.

We responded to hospitals’ requests that we process up to 25 diagnosis codes and

25 procedure codes in the FY 2010 IPPS/RY 2010 LTCH PPS final rule (74 FR 43798).

In that final rule, we referred readers to the ICD-10 final rule (74 FR 3328 through 3362)

where we discuss the updating of Medicare systems prior to the implementation of

ICD-10 on October 1, 2013. We mentioned that part of the system updates in preparation

for ICD-10 is the “expansion of our ability to process more diagnosis and procedure

codes.” In the FY 2009 IPPS final rule (73 FR 48433 through 48444), we also responded

to multiple requests to increase the number of codes processed from 9 diagnosis and

6 procedure codes to 25 diagnosis and 25 procedure codes.

CMS is currently undergoing extensive sy stem updates as part of the move to

5010, which includes the ability to accept ICD- 10 codes. This complicated transition

involves converting many internal system s prior to October 1, 2013, when ICD-10 will

be implemented. One important step in this planned convers ion process is the expansion

of our ability to process additional diagnosis and procedure codes. We are currently

planning to complete the expansion of this internal system capability so that we are able

to process up to 25 diagnoses a nd 25 procedures on hospital i npatient claims as part of

the HIPPA ASC X12 Technical Reports Type 3, Version 005010 (Version 5010)CMS-1498-P 238

standards system update. CMS will be able to process up to 25 diagnosis codes and 25

procedure codes when received on the 5010 format starting on January 1, 2011. We

recognize the value of the additional information provided by this coded data for multiple

uses such as for payment, quality measures, outcome analysis, and other important uses.

We will continue to pursue this additional processing capacity as aggressively as possible

in response to the multiple requests from the hospital industry. We appreciate the support

of the health care community for this extens ive system update process that will allow us

to process more of this im portant data. Therefore, for claims submitted on the 5010

format beginning January 1, 2011, we will increa se the capacity to process diagnosis and

procedure codes on hospital inpatient claims from the current 9 diagnoses and 6

procedures up to 25 diagnoses and 25 procedures.

H. Recalibration of MS-DRG Weights

In developing the proposed FY 2011 system of weights, we used two data

sources: claims data and cost re port data. As in previous year s, the claims data source is

the MedPAR file. This file is based on fully coded diagnostic and procedure data for all

Medicare inpatient hospital bills. The FY 2009 MedPAR data used in this proposed rule

include discharges occurring on Octobe r 1, 2008, through September 30, 2009, based on

bills received by CMS through December 31, 2009, from all hospitals subject to the IPPS

and short-term, acute care hospitals in Maryland (which are under a waiver from the IPPS

under section 1814(b)(3) of the Act). The FY 2009 MedPAR file used in calculating the

proposed relative weights includes da ta for approximately 11,004,046 Medicare

discharges from IPPS providers. Discharges for Medicare beneficiaries enrolled in aCMS-1498-P 239

Medicare Advantage managed care plan are excluded from this analysis. The data

exclude CAHs, including hospitals that subse quently became CAHs after the period from

which the data were taken. The second data source used in the cost-based relative

weighting methodology is the FY 2008 Medicare cost report data f iles from HCRIS (that

is, cost reports beginning on or after Octobe r 1, 2007, and before October 1, 2008), which

represents the most recent full set of co st report data available. We used the

December 31, 2009 update of the HCRIS cost report files for FY 2008 in setting the

relative cost-based weights.

The methodology we used to calculate the DRG cost-based relative weights from

the FY 2009 MedPAR claims data and FY 2008 Me dicare cost report data is as follows:

● To the extent possible, all the claims were regrouped using the proposed

FY 2011 MS-DRG classifications discussed in sections II.B. and G. of the preamble of

this proposed rule.

● The transplant cases that were used to establish the relative weights for heart

and heart-lung, liver and/or intestinal , and lung transplants (MS-DRGs 001, 002, 005,

006, and 007, respectively) were limited to thos e Medicare-approved transplant centers

that have cases in the FY 2009 MedPAR file. (Medicare cove rage for heart, heart-lung,

liver and/or intestinal, and lung transplants is limited to those facilities that have received

approval from CMS as transplant centers.)

● Organ acquisition costs for kidney, hear t, heart-lung, liver, lung, pancreas, and

intestinal (or multivisceral organs) transplants continue to be paid on a reasonable cost

basis. Because these acquisition costs are pa id separately from the prospective paymentCMS-1498-P 240

rate, it is necessary to subtract the acqui sition charges from the total charges on each

transplant bill that showed acquisition charges before computing the average cost for

each MS-DRG and before elimin ating statistical outliers.

● Claims with total charges or total lengths of stay less than or equal to zero were

deleted. Claims that had an amount in the to tal charge field that differed by more than

$10.00 from the sum of the routine day charges, intensive care charges, pharmacy

charges, special equipment charges, therapy services charges, operating room charges,

cardiology charges, laboratory charges, radi ology charges, other service charges, labor

and delivery charges, inhalation therapy charges, emergency room charges, blood

charges, and anesthesia charges were also deleted.

● At least 96.1 percent of the providers in the MedPAR file had charges for 10

of the 15 cost centers. Claims for providers that did not have charges greater than zero

for at least 10 of the 15 cost centers were deleted.

● Statistical outliers were eliminated by removing all cases that were beyond

3.0 standard deviations from the mean of the log distribution of both the total charges per

case and the total charges per day for each MS-DRG.

● Effective October 1, 2008, because hos pital inpatient claims include a POA

indicator field for each diagnosis present on the claim, only for purposes of relative

weight-setting, the POA indicator field was reset to "Y" for “Yes” for all claims that

otherwise have an "N" (No) or a "U" (doc umentation insufficient to determine if the

condition was present at the time of inpatient admission) in the POA field

.CMS-1498-P 241

Under current payment policy, the presence of specific HAC codes, as indicated

by the POA field values, can generate a lower payment for the claim. Specifically, if the

particular condition is present on admission (that is, a "Y" indicator is associated with the

diagnosis on the claim), then it is not a HAC , and the hospital is paid for the higher

severity (and, therefore, the higher weighted MS-DRG). If the particular condition is not

present on admission (that is, an "N" indicato r is associated with the diagnosis on the

claim) and there are no other complicating conditions, the DRG GROUPER assigns the

claim to a lower severity (and, therefore, th e lower weighted MS-DRG) as a penalty for

allowing a Medicare inpatient to contract a HAC. While the POA reporting meets policy

goals of encouraging quality care and generates program savings, it presents an issue for

the relative weight-setting process. Because cases identified as HACs are likely to be

more complex than similar cases that are not identified as HACs, the charges associated

with HACs are likely to be higher as well. Thus, if the higher charges of these HAC

claims are grouped into lower severity MS-DRGs prior to the relative weight-setting

process, the relative weights of these par ticular MS-DRGs would become artificially

inflated, potentially skewing the relative weight s. In addition, we want to protect the

integrity of the budget neutrality process by ensuring that, in estimating payments, no

increase to the standardized amount occurs as a result of lower overall payments in a

previous year that stem from using weights and case-mix that are based on lower severity

MS-DRG assignments. If this would occur, the anticipated cost savings from the HAC

policy would be lost.CMS-1498-P 242

To avoid these problems, we reset the POA indicator field to "Y" only for

relative weight-setting purposes for all claims that otherwise have a "N" or an "U" in the

POA field. This resetting “forced” the more costly HAC claims into the higher severity

MS-DRGs as appropriate, and the relative weights calculated for each MS-DRG more

closely reflect the true costs of those cases.

Once the MedPAR data were trimmed and the statistical outliers were removed,

the charges for each of the 15 cost groups for ea ch claim were standard ized to remove the

effects of differences in area wage levels, IME and DSH payments, and for hospitals in

Alaska and Hawaii, the applicable cost-of-living adjustment. Because hospital charges

include charges for both operating and capital costs, we standardized total charges to

remove the effects of differences in geog raphic adjustment factors, cost-of-living

adjustments, and DSH payments under the capital IPPS as well. Charges were then

summed by MS-DRG for each of the 15 cost groups so that each MS-DRG had 15

standardized charge totals. These charges were then adjusted to cost by applying the

national average CCRs developed from the FY 2008 cost report data.

The 15 cost centers that we used in th e relative weight calculation are shown in

the following table. The table shows the lines on the cost report and the corresponding

revenue codes that we used to create the 15 national cost center CCRs.

**Cost Center**  **Group Name**  **(15 total) MedPAR**  **Charge Field Revenue Codes**  **contained in MedPAR Charge**  **Field Cost Report**  **Line Description**  **(Worksheet C Part 1 &**  **Wksheet D-4) Cost from**  **HCRIS (Worksheet**  **C, Part 1, Column 5**  **and line number)**  **Charges from HCRIS**  **(Worksheet C, Part 1, Column**  **6 & 7 and line number)**  **Medicare Charges from**  **HCRIS (Worksheet D-4,**  **Column & line number)** CMS-1498-P 243

**Cost Center**  **Group Name**  **(15 total) MedPAR**  **Charge Field Revenue Codes**  **contained in MedPAR Charge**  **Field Cost Report**  **Line Description**  **(Worksheet C Part 1 &**  **Wksheet D-4) Cost from**  **HCRIS (Worksheet**  **C, Part 1, Column 5**  **and line number)**  **Charges from HCRIS**  **(Worksheet C, Part 1, Column**  **6 & 7 and line number)**  **Medicare Charges from**  **HCRIS (Worksheet D-4,**  **Column & line number)** 

Routine Days Private Room Charges 011X and 014X Adults & Pediatrics (General Routine Care) C_1_C5_25 C_1_C6_25 D4_HOS_C2_25

Semi-Private Room Charges 010X, 012X, 013X and 016X-019X C_1_C7_25 D4_HOS_C2_26

Ward Charges 015X

Intensive Days Intensive Care Charges 020X Intensive Care Unit C_1_C5_26 C_1_C6_26 D4_HOS_C2_26

C_1_C7_26

Coronary Care Charges 021X Coronary Care Unit C_1_C5_27 C_1_C6_27 D4_HOS_C2_27

C_1_C7_27

Burn Intensive Care Unit C_1_C5_28 C_1_C6_28 D4_HOS_C2_28

C_1_C7_28 Surgical Intensive Care Unit C_1_C5_29 C_1_C6_29 D4_HOS_C2_29

C_1_C7_29

Other Special Care Unit C_1_C5_30 C_1_C6_30 D4_HOS_C2_30

C_1_C7_30

Drugs Pharmacy Charges 025X, 026X and 063X Intravenous Therapy C_1_C5_48 C_1_C6_48 D4_HOS_C2_48

C_1_C7_48CMS-1498-P 244

**Cost Center**  **Group Name**  **(15 total) MedPAR**  **Charge Field Revenue Codes**  **contained in MedPAR Charge**  **Field Cost Report**  **Line Description**  **(Worksheet C Part 1 &**  **Wksheet D-4) Cost from**  **HCRIS (Worksheet**  **C, Part 1, Column 5**  **and line number)**  **Charges from HCRIS**  **(Worksheet C, Part 1, Column**  **6 & 7 and line number)**  **Medicare Charges from**  **HCRIS (Worksheet D-4,**  **Column & line number)**  Drugs Charged To Patient C_1_C5_56 C_1_C6_56 D4_HOS_C2_56

C_1_C7_56

Supplies and Equipment Medical/Surgic al Supply Charges 027X and 062X Medical Supplies Charged to Patients C_1_C5_55 C_1_C6_55 D4_HOS_C2_55

C_1_C7_55 Durable Medical Equipment Charges 0290, 0291, 0292 and 0294-0299 DME-Rented C_1_C5_66 C_1_C6_66 D4_HOS_C2_66

C_1_C7_66

Used Durable Medical Charges 0293 DME-Sold C_1_C5_67 C_1_C6_67 D4_HOS_C2_67

C_1_C7_67

Therapy Services Physical Therapy Charges 042X Physical Therapy C_1_C5_50 C_1_C6_50 D4_HOS_C2_50

C_1_C7_50 Occupational Therapy Charges 043X Occupational Therapy C_1_C5_51 C_1_C6_51 D4_HOS_C2_51

C_1_C7_51 Speech Pathology Charges 044X and 047X Speech Pathology C_1_C5_52 C_1_C6_52 D4_HOS_C2_52

C_1_C7_52CMS-1498-P 245

**Cost Center**  **Group Name**  **(15 total) MedPAR**  **Charge Field Revenue Codes**  **contained in MedPAR Charge**  **Field Cost Report**  **Line Description**  **(Worksheet C Part 1 &**  **Wksheet D-4) Cost from**  **HCRIS (Worksheet**  **C, Part 1, Column 5**  **and line number)**  **Charges from HCRIS**  **(Worksheet C, Part 1, Column**  **6 & 7 and line number)**  **Medicare Charges from**  **HCRIS (Worksheet D-4,**  **Column & line number)** 

Inhalation Therapy Inhalation Therapy Charges 041X and 046X Respiratory Therapy C_1_C5_49 C_1_C6_49 D4_HOS_C2_49

C_1_C7_49

Operating Room Operating Room Charges 036X, 071X and 072X Operating Room C_1_C5_37 C_1_C6_37 D4_HOS_C2_37 For all DRGs but Labor & Delivery C_1_C7_37

Recovery Room C_1_C5_38 C_1_C6_38 D4_HOS_C2_38

C_1_C7_38

Labor & Delivery Operating Room Charges 036X, 071X and 072X Delivery Room and Labor Room C_1_C5_39 C_1_C6_39 D4_HOS_C2_39 **ONLY FOR THE 6**  **Labor & Delivery**  **DRGs** C_1_C7_39
**370, 371, 372, 373,**  **374, 375** Clinic Charges 051X Obstetrics Clinic C_1_C5_63 C_1_C6_63 D4_HOS_C2_63

C_1_C7_63

Anesthesia Anesthesia Charges 037X Anesthesiology C_1_C5_40 C_1_C6_40 D4_HOS_C2_40

C_1_C7_40CMS-1498-P 246

**Cost Center**  **Group Name**  **(15 total) MedPAR**  **Charge Field Revenue Codes**  **contained in MedPAR Charge**  **Field Cost Report**  **Line Description**  **(Worksheet C Part 1 &**  **Wksheet D-4) Cost from**  **HCRIS (Worksheet**  **C, Part 1, Column 5**  **and line number)**  **Charges from HCRIS**  **(Worksheet C, Part 1, Column**  **6 & 7 and line number)**  **Medicare Charges from**  **HCRIS (Worksheet D-4,**  **Column & line number)** 

Cardiology Cardiology Charges 048X and 073X Electrocardiology C_1_C5_53 C_1_C6_53 D4_HOS_C2_53

C_1_C7_53

Laboratory Laboratory Charges 030X, 031X, 074X and 075X Laboratory C_1_C5_44 C_1_C6_44 D4_HOS_C2_44

C_1_C7_44

PBP Clinic Laboratory Services C_1_C5_45 C_1_C6_45 D4_HOS_C2_45

C_1_C7_45

Electro-encep halography C_1_C5_54 C_1_C6_54 D4_HOS_C2_54

C_1_C7_54

Radiology Radiology Charges 028X, 032X, 033X, 034X, 035X and 040X Radiology - Diagnostic C_1_C5_41 C_1_C6_41 D4_HOS_C2_41

C_1_C7_41

MRI Charges 061X Radiology - Therapeutic C_1_C5_42 C_1_C6_42 D4_HOS_C2_42

Radioisotope C_1_C5_43 C_1_C6_43 D4_HOS_C2_43

C_1_C7_43CMS-1498-P 247

**Cost Center**  **Group Name**  **(15 total) MedPAR**  **Charge Field Revenue Codes**  **contained in MedPAR Charge**  **Field Cost Report**  **Line Description**  **(Worksheet C Part 1 &**  **Wksheet D-4) Cost from**  **HCRIS (Worksheet**  **C, Part 1, Column 5**  **and line number)**  **Charges from HCRIS**  **(Worksheet C, Part 1, Column**  **6 & 7 and line number)**  **Medicare Charges from**  **HCRIS (Worksheet D-4,**  **Column & line number)** 

Emergency Room Emergency Room Charges 045x Emergency C_1_C5_61 C_1_C6_61 D4_HOS_C2_61

C_1_C7_61

Blood and Blood Products Blood Charges 038x Whole Blood & Packed Red Blood Cells C_1_C5_46 C_1_C6_46 D4_HOS_C2_46

C_1_C7_46

Blood Storage / Processing 039x Blood Storing, Processing, & Transfusing C_1_C5_47 C_1_C6_47 D4_HOS_C2_47

C_1_C7_47

Other Services Lithotripsy Charge 079X

Other Service Charge 0002-0099, 022X, 023X, 024X,052X,053X 055X-060X, 064X-070X, 076X-078X, 090X-095X and 099X

ASC (Non Distinct Part) C_1_C5_58 C_1_C6_58 D4_HOS_C2_58

C_1_C7_58 Outpatient Service Charges 049X and 050X Other Ancillary C_1_C5_59 C_1_C6_59 D4_HOS_C2_59

C_1_C7_59

Clinic C_1_C5_60 C_1_C6_60 D4_HOS_C2_60CMS-1498-P 248

**Cost Center**  **Group Name**  **(15 total) MedPAR**  **Charge Field Revenue Codes**  **contained in MedPAR Charge**  **Field Cost Report**  **Line Description**  **(Worksheet C Part 1 &**  **Wksheet D-4) Cost from**  **HCRIS (Worksheet**  **C, Part 1, Column 5**  **and line number)**  **Charges from HCRIS**  **(Worksheet C, Part 1, Column**  **6 & 7 and line number)**  **Medicare Charges from**  **HCRIS (Worksheet D-4,**  **Column & line number)** 

C_1_C7_60

Ambulance Charges 054X

ESRD Revenue Setting Charges 080X and 082X-088X Observation beds C_1_C5_62 C_1_C6_62 D4_HOS_C2_62

C_1_C7_62

Clinic Visit Charges 051X Observation beds C_1_C5_6201 C_1_C6_6201 D4_HOS_C2_62 01 (excluding Labor & Delivery DRGs) C_1_C7_6201

Rural Health Clinic C_1_C5_6350 C_1_C6_6350 D4_HOS_C2_63 50

Professional Fees Charges 096X, 097X, and 098X C_1_C7_6350

FQHC C_1_C5_6360 C_1_C6_6360 D4_HOS_C2_63 60

C_1_C7_6360

Home Program Dialysis C_1_C5_64 C_1_C6_64 D4_HOS_C2_64

C_1_C7_64

Ambulance C_1_C5_65 C_1_C6_65 D4_HOS_C2_65

C_1_C7_65

Other Reimbursable C_1_C5_68 C_1_C6_68 D4_HOS_C2_68CMS-1498-P 249

**Cost Center**  **Group Name**  **(15 total) MedPAR**  **Charge Field Revenue Codes**  **contained in MedPAR Charge**  **Field Cost Report**  **Line Description**  **(Worksheet C Part 1 &**  **Wksheet D-4) Cost from**  **HCRIS (Worksheet**  **C, Part 1, Column 5**  **and line number)**  **Charges from HCRIS**  **(Worksheet C, Part 1, Column**  **6 & 7 and line number)**  **Medicare Charges from**  **HCRIS (Worksheet D-4,**  **Column & line number)** 

C_1_C7_68

We developed the national average CCRs as follows:

Taking the FY 2008 cost report data, we removed CAHs, Indian Health Service

hospitals, all-inclusive rate hospitals, and cost reports that represented time periods of

less than 1 year (365 days). We included hospitals located in Maryland as we are

including their charges in our claims databa se. We then created CCRs for each provider

for each cost center (see prior table for line items used in the calculations) and removed

any CCRs that were greater than 10 or less than 0.01. We normalized the departmental

CCRs by dividing the CCR for each department by the total CCR for the hospital for the

purpose of trimming the data. We then took the logs of the normalized cost center CCRs

and removed any cost center CCRs where the log of the cost center CCR was greater or

less than the mean log plus/minus 3 times the standard deviation for the log of that cost

center CCR. Once the cost report data were trimmed, we calculated a Medicare-specific

CCR. The Medicare-specific CCR was determined by taking the Medicare charges for

each line item from Worksheet D-4 and deriving the Medicare-specific costs by applying

the hospital-specific departmental CCRs to the Medicare-specific charges for each line

item from Worksheet D-4. Once each hospital’s Medicare-specific costs were

established, we summed the total Medicare-spec ific costs and divided by the sum of the

total Medicare-specific charges to produce national average, charge-weighted CCRs.CMS-1498-P 250

After we multiplied the total charges for each MS-DRG in each of the 15 cost

centers by the corresponding national average CCR, we summed the 15 "costs" across

each MS-DRG to produce a total standardized cost for the MS-DRG. The average

standardized cost for each MS-DRG was then computed as the total standardized cost for

the MS-DRG divided by the transfer-adjuste d case count for the MS-DRG. The average

cost for each MS-DRG was then divided by the national average standardized cost per

case to determine the relative weight.

The new cost-based relative weights were then normalized by an adjustment

factor of 1.57461 so that the average case weight after recalibration was equal to the

average case weight before recalibration. Th e normalization adjustment is intended to

ensure that recalibration by itself neither in creases nor decreases total payments under the

IPPS, as required by section 1886(d)(4)(C)(iii) of the Act.

The 15 proposed national average CCRs for FY 2011 are as follows:

Group CCR Routine Days 0.553 Intensive Days 0.480 Drugs 0.200 Supplies & Equipment 0.348 Therapy Services 0.415 Laboratory 0.163 Operating Room 0.282 Cardiology 0.181 Radiology 0.161 Emergency Room 0.278 Blood and Blood Products 0.424 Other Services 0.426 Labor & Delivery 0.462 Inhalation Therapy 0.201 Anesthesia 0.136CMS-1498-P 251

Since FY 2009, the relative weights have been based on 100 percent cost weights

based on our MS-DRG grouping system.

When we recalibrated the DRG weights for previous years, we set a threshold of

10 cases as the minimum number of cases requi red to compute a reasonable weight. In

this FY 2011 proposed rule, we are proposing to use that same case threshold in

recalibrating the MS-DRG weights for FY 2011. Using the FY 2009 MedPAR data set,

there are 8 MS-DRGs that contain fewer than 10 cases. Under the MS-DRGs, we have

fewer low-volume DRGs than under the CMS DR Gs because we no longer have separate

DRGs for patients age 0 to 17 years. With the exception of newborns, we previously

separated some DRGs based on whether the pa tient was age 0 to 17 years or age 17 years

and older. Other than the age split, cases grouping to these DRGs are identical. The

DRGs for patients age 0 to 17 years generall y have very low volumes because children

are typically ineligible for Medicare. In th e past, we have found that the low volume of

cases for the pediatric DRGs could lead to significant year-to-year instability in their

relative weights. Although we have always encouraged non-Medicare payers to develop

weights applicable to their own patient popul ations, we have hear d frequent complaints

from providers about the use of the Medicare relative weights in the pediatric population.

We believe that eliminating this age split in the MS-DRGs will provide more stable

payment for pediatric cases by determining their payment using adult cases that are much

higher in total volume. Newborns are unique and require separate MS-DRGs that are not

mirrored in the adult population. Therefore, it remains necessary to retain separate MSDRGs for newborns. All of the low-volume MS-DRGs listed below are for newborns. InCMS-1498-P 252

FY 2011, because we do not have sufficient MedPAR data to set accurate and stable cost

weights for these low-volume MS-DRGs, we are proposing to compute weights for the

low-volume MS-DRGs by adjusting their FY 2010 weights by the percentage change in

the average weight of the cases in other MS-D RGs. The crosswalk table is shown below:

Low-Volume

MS-DRG MS-DRG Title Crosswalk to MS-DRG 768 Vaginal Delivery with O.R. Procedure Except Sterilization and/or D&C FY 2010 FR weight (adjusted by percent change in average weight of the cases in other MS-DRGs) 789 Neonates, Died or Transferred to Another Acute Care Facility FY 2010 FR weight (adjusted by percent change in average weight of the cases in other MS-DRGs) 790 Extreme Immaturity or Respiratory Distress Syndrome, Neonate FY 2010 FR weight (adjusted by percent change in average weight of the cases in other MS-DRGs) 791 Prematurity with Major Problems FY 2010 FR weight (adjusted by percent change in average weight of the cases in other MS-DRGs) 792 Prematurity without Major Problems FY 2010 FR weight (adjusted by percent change in average weight of the cases in other MS-DRGs) 793 Full-Term Neonate with Major Problems FY 2010 FR weight (adjusted by percent change in average weight of the cases in other MS-DRGs) 794 Neonate with Other Significant Problems FY 2010 FR weight (adjusted by percent change in average weight of the cases in other MS-DRGs) 795 Normal Newborn FY 2010 FR weight (adjusted by percent change in average weight of the cases in other MS-DRGs)CMS-1498-P 253

I. Proposed Add-On Payments fo r New Services and Technologies

1. Background

Sections 1886(d)(5)(K) and (L) of the Ac t establish a process of identifying and

ensuring adequate payment for new medi cal services and t echnologies (sometimes

collectively referred to in this section as "new technologies") under the IPPS. Section

1886(d)(5)(K)(vi) of the Act specifies that a medical service or technology will be

considered new if it meets criteria established by the Secretary after notice and

opportunity for public comment. Section 1886(d )(5)(K)(ii)(I) of the Act specifies that a

new medical service or technology may be considered for new technology add-on

payment if, "based on the estimated costs incu rred with respect to discharges involving

such service or technology, the DRG prospective payment ra te otherwise applicable to

such discharges under this subsection is inad equate." We note that beginning with FY

2008, CMS transitioned from CMS-DRGs to MS-DRGs.

The regulations implementing these provi sions specify three criteria for a new

medical service or technology to receive the additional payment: (1) the medical service

or technology must be new; (2) the medical service or technology must be costly such

that the DRG rate otherwise applicable to discharges involving the medical service or

technology is determined to be inadequate ; and (3) the service or technology must

demonstrate a substantial clini cal improvement over existing services or technologies.

These three criteria are explained below in the ensuing paragraphs in further detail.

Under the first criterion, as reflected in 42 CFR 412.87(b)(2), a specific medical

service or technology will be considered “n ew” for purposes of new medical service orCMS-1498-P 254

technology add-on payments until such time as Medicare data are available to fully

reflect the cost of the technology in th e MS-DRG weights through recalibration.

Typically, there is a lag of 2 to 3 years from the point a new medical service or

technology is first introduced on the market (generally on the date that the technology

receives FDA approval/clearance) and when data reflecting the use of the medical service

or technology are used to calculate the MS -DRG weights. For example, data from

discharges occurring during FY 2009 are used to calculate the proposed FY 2011

MS-DRG weights in this proposed rule. Se ction 412.87(b)(2) of the regulations therefore

provides that "a medical service or technology may be considered new within 2 or 3 years

after the point at which data begin to beco me available reflecting the ICD-9-CM code

assigned to the new medical service or te chnology (depending on when a new code is

assigned and data on the new medical servi ce or technology become available for DRG

recalibration). After CMS has recalibrated the MS-DRGs, based on available data to

reflect the costs of an otherwise new medical service or technology, the medical service

or technology will no longer be considered ‘new’ under the criterion for this section."

The 2-year to 3-year period during which a medical service or technology can be

considered new would ordinarily begin on the date on which the medical service or

technology received FDA approval or clearanc e. (We note that, for purposes of this

section of this proposed rule, we gene rally refer to both FDA approval and FDA

clearance as FDA “approval.”) However, in some cases, there may be few to no

Medicare data available for the new service or technology following FDA approval. For

example, the newness period could extend beyond the 2-year to 3-year period after FDACMS-1498-P 255

approval is received in cases where the produc t initially was generally unavailable to

Medicare patients following FDA approval, such as in cases of a national noncoverage

determination or a documented delay in bringing the produc t onto the market after that

approval (for instance, component producti on or drug production has been postponed

following FDA approval due to shelf life concer ns or manufacturing issues). After the

MS-DRGs have been recalibrated to reflect th e costs of an otherwise new medical service

or technology, the medical service or technology is no longer eligible for special add-on

payment for new medical services or tec hnologies (as specified under §412.87(b)(2)).

For example, an approved new technology that received FDA approval in October 2008

and entered the market at that time may be e ligible to receive add-on payments as a new

technology for discharges occurring before October 1, 2011 (the start of FY 2012).

Because the FY 2012 MS-DRG weights would be calculated using FY 2010 MedPAR

data, the costs of such a new technology would be fully reflected in the FY 2012

MS-DRG weights. Therefore, the new technol ogy would no longer be eligible to receive

add-on payments as a new technology for discharges occurring in FY 2012 and

thereafter.

We do not consider a service or technology to be new if it is substantially similar

to one or more existing technologies. That is, even if a technology receives a new FDA

approval, it may not necessarily be considered “new” for purposes of new technology

add-on payments if it is “subs tantially similar” to a tec hnology that was approved by

FDA and has been on the market for more than 2 to 3 years. In the FY 2006 IPPS final

rule (70 FR 47351), we explained our policy re garding substantial s imilarity in detail andCMS-1498-P 256

its relevance for assessing if the hospital ch arge data used in the development of the

relative weights for the relevant DRGs reflect the costs of th e technology. In that final

rule, we stated that, for determining substantial similarity, we consider (1) whether a

product uses the same or a similar mechanism of action to achieve a therapeutic outcome,

and (2) whether a product is assigned to the sa me or a different DRG. We indicated that

both of the above criteria shoul d be met in order for a technology to be considered

“substantially similar” to an existing technology. However, in that same final rule, we

also noted that, due to the complexity of issues regarding the substantial similarity

component of the newness criterion, it may be necessary to exercise flexibility when

considering whether technologies are substantially similar to one another. Specifically,

we stated that we may consider additiona l factors, depending on the circumstances

specific to each application.

In the FY 2010 IPPS/RY 2010 LTCH PPS final rule (74 FR 43813 and 43814),

we noted that the discussion of substantial similarity in the FY 2006 IPPS final rule

related to comparing two sepa rate technologies made by different manufacturers.

Nevertheless, we stated that the criteria discussed in the FY 2006 IPPS final rule also are

relevant when comparing the similarity between a new use and existing uses of the same

technology (or a very similar technology manufac tured by the same manufacturer). In

other words, we stated that it is necessary to establish that the new indication for which

the technology has received FDA approval is not substantially similar to that of the prior

indication. We explained that such a distinc tion is necessary to de termine the appropriate

start date of the newness period in evalua ting whether the technology would qualify forCMS-1498-P 257

add-on payments (that is, the date of the “new” FDA approval or that of the prior

approval), or whether the technology could qualify for separate new technology add-on

payments under each indication.

In the FY 2010 IPPS/RY 2010 LTCH PPS final rule (74 FR 43814), we added a

third factor of consideration to our analysis of whether a new technology is substantially

similar to one or more existing technologies. Specifically, in making a determination of

whether a technology is substantially similar to an existing technology, we will consider

whether the new use of the technology involves the treatment of the same or similar type

of disease and the same or similar patie nt population (74 FR 24130), in addition to

considering the already established factors described in the FY 2006 IPPS final rule (that

is, (1) whether a product uses the same or a similar mechanism of action to achieve a

therapeutic outcome; and (2) whether a product is assigned to the same or a different

DRG). As we noted in the FY 2010 IPPS/RY 2010 LTCH PPS final rule, if all three

components are present and the ne w use is deemed substantiall y similar to one or more of

the existing uses of the technology (that is beyond the newness period), we would

conclude that the technology is not new a nd, therefore, is not eligible for the new

technology add-on payment.

Under the second criterion, §412.87(b)(3) furt her provides that, to be eligible for

the add-on payment for new medical services or technologies, the MS-DRG prospective

payment rate otherwise applicable to the disc harge involving the new medical services or

technologies must be assessed for adequacy . Under the cost criterion, to assess the

adequacy of payment for a new technolog y paid under the applicable MS-DRGCMS-1498-P 258

prospective payment rate, we evaluate whet her the charges for cases involving the new

technology exceed certain threshold amount s. In the FY 2004 IPPS final rule

(68 FR 45385), we established the threshold at the geometric mean standardized charge

for all cases in the MS-DRG plus 75 percent of 1 standard deviation above the geometric

mean standardized charge (based on the loga rithmic values of the charges and converted

back to charges) for all cases in the MS-DRG to which the new medical service or

technology is assigned (or the case-weighted average of all relevant MS-DRGs, if the

new medical service or technology o ccurs in more than one MS-DRG).

However, section 503(b)(1) of Pub. L. 108-173 amended section

1886(d)(5)(K)(ii)(I) of the Act to provide th at, beginning in FY 2005, CMS will apply "a

threshold...that is the lesser of 75 percent of th e standardized amount (i ncreased to reflect

the difference between cost and charges) or 75 percent of one standard deviation for the

diagnosis-related group involved." (We refer re aders to section IV.D. of the preamble to

the FY 2005 IPPS final rule (69 FR 49084) for a discussion of the revision of the

regulations to incorporate the change made by section 503(b)(1) of Pub. L. 108-173.)

Table 10 that was included in the final rule published in the Federal Register on

August 27, 2009, contains the final thresholds that are being used to evaluate applications

for new technology add-on payments for FY 201 1 (74 FR 44173). We note that we plan

to issue separate documents in the Federal Register addressing the provisions of Pub. L.

111-148, as amended, that affect our proposed policies and payment rates for FY 2011

under the IPPS and the LTCH PPS. In addition, we plan to issue further instructions

addressing the provisions of Pub. L. 111-148, as amended, that affect the policies andCMS-1498-P 259

paymet rates for FY 2010 under the IPPS and the LTCH PPS. At the time we issue those

documents, we plan to update Ta ble 10 that was published in the Federal Register on

August 27, 2009 and Table 10 in the Addendum to this proposed rule.

In the September 7, 2001 final rule th at established the new technology add-on

payment regulations (66 FR 46917), we discussed the issue of whether the HIPAA

Privacy Rule at 45 CFR Parts 160 and 164 applie s to claims information that providers

submit with applications for new technol ogy add-on payments. Specifically, we

explained that health plans, including Me dicare, and providers that conduct certain

transactions electronically, including the hosp itals that would be receiving payment under

the FY 2001 IPPS final rule, are required to comply with the HIPAA Privacy Rule. We

further explained how such entities could meet the applicable HIPAA requirements by

discussing how the HIPAA Privacy Rule permitted providers to share with health plans

information needed to ensure correct paym ent, if they had obtained consent from the

patient to use that patient’s da ta for treatment, payment, or health care operations. We

also explained that, because the information to be provided within applications for new

technology add-on payment would be needed to ensure correct payment, no additional

consent would be required. The HHS Office for Civil Rights has since amended the

HIPAA Privacy Rule, but the results remain. The HIPAA Privacy Rule no longer

requires covered entities to obtain consent from patients to use or disclose protected

health information for treatment, payment, or health care operations, and expressly

permits such entities to use or to disclose protected health information for any of these

purposes. (We refer readers to 45 CFR 164.502(a)(1)(ii), and 164.506(c)(1) and (c)(3),CMS-1498-P 260

and the Standards for Privacy of Individuall y Identifiable Health Information published

in the Federal Register on August 14, 2002, for a full discussion of changes in consent

requirements.)

Under the third criterion, §412.87(b)(1) of our existing regulations provides that a

new technology is an appropria te candidate for an additiona l payment when it represents

"an advance that substantially improves, relative to technologie s previously available, the

diagnosis or treatment of Medicare benefi ciaries." For example, a new technology

represents a substantial clinical improvement when it reduces mortality, decreases the

number of hospitalizations or physician visits, or reduces recovery time compared to the

technologies previously available. (We refe r readers to the September 7, 2001 final rule

for a complete discussion of this criterion (66 FR 46902).)

The new medical service or technology add-on payment policy under the IPPS

provides additional payments for cases with re latively high costs involving eligible new

medical services or technologies while pres erving some of the incentives inherent under

an average-based prospective payment system. The payment mechanism is based on the

cost to hospitals for the new medical servi ce or technology. Under §412.88, if the costs

of the discharge (determined by applying cost to charge ratios (“CCRs”) as described in

§412.84(h)) exceed the full DRG payment (incl uding payments for IME and DSH, but

excluding outlier payments), Medicare will make an add-on payment equal to the lesser

of: (1) 50 percent of the estimated costs of the new technology (if the estimated costs for

the case including the new t echnology exceed Medicare’s payment); or (2) 50 percent of

the difference between the full DRG payment and the hospital’s estimated cost for theCMS-1498-P 261

case. Unless the discharge qualifies for an outlier payment, Medicare payment is limited

to the full MS-DRG payment plus 50 percent of the estimated costs of the new

technology.

Section 1886(d)(4)(C)(iii) of the Act re quires that the adjustments to annual

MS-DRG classifications and rela tive weights must be made in a manner that ensures that

aggregate payments to hospitals are not more or less than they were in the prior fiscal

year (i.e., they are “budget neutral”). Theref ore, in the past, we accounted for projected

payments under the new medical service a nd technology provision during the upcoming

fiscal year, while at the same time estimating the payment effect of changes to the MSDRG classifications and reca libration. The impact of additional payments under this

provision was then included in the budget neut rality factor, which was applied to the

standardized amounts and the hospital-specifi c amounts. However, section 503(d)(2) of

Pub. L. 108-173 provides that there shall be no reduction or adjustment in aggregate

payments under the IPPS due to add-on payments for new medical services and

technologies. Therefore, in accordance w ith section 503(d)(2) of Pub. L. 108-173, addon payments for new medical services or t echnologies for FY 2005 and later years have

not been subjected to budget neutrality.

In the FY 2009 IPPS final rule (73 FR 48561 through 48563), we modified our

regulations at §412.87 to codify our current pr actice of how CMS eval uates the eligibility

criteria for new medical servi ce or technology add-on payment applications. We also

amended §412.87(c) to specify that all applic ants for new technology add-on paymentsCMS-1498-P 262

must have FDA approval for their new medical service or technology by July 1 of each

year prior to the beginning of the fiscal ye ar that the application is being considered.

The Council on Technology and Innovation (CTI) at CMS oversees the agency's

cross-cutting priority on coordinating cove rage, coding and payment processes for

Medicare with respect to new technologies and procedures, in cluding new drug therapies,

as well as promoting the exchange of info rmation on new technolog ies between CMS and

other entities. The CTI, composed of senior CMS staff and clinicians, was established

under section 942(a) of Pub. L. 108-173. The Coun cil is co-chaired by the Director of

the Office of Clinical Standards and Quality (OCSQ) and the Director of the Center for

Medicare Management (CMM), who is also designated as the CTI's Executive

Coordinator.

The specific processes for coverage, c oding, and payment are implemented by

CMM, OCSQ, and the local claims-payment c ontractors (in the case of local coverage

and payment decisions). The CTI supplements, rather than replaces, these processes by

working to assure that all of these activities reflect the agency-wide priority to promote

high-quality, innovative care. At the same time, the CTI also works to streamline,

accelerate, and improve coordination of these pr ocesses to ensure that they remain up to

date as new issues arise. To achieve its goals, the CTI works to streamline and create a

more transparent coding and payment proce ss, improve the quality of medical decisions,

and speed patient access to effective new trea tments. It is also dedicated to supporting

better decisions by patients a nd doctors in using Medicare-covered services through theCMS-1498-P 263

promotion of better evidence development, wh ich is critical for improving the quality of

care for Medicare beneficiaries.

CMS plans to continue its Open Door forums with stakeholders who are

interested in CTI's initiatives. In add ition, to improve the unde rstanding of CMS’

processes for coverage, coding, and paym ent and how to access them, the CTI has

developed an "innovator's guide" to these proces ses. The intent is to consolidate this

information, much of which is already availa ble in a variety of CMS documents and in

various places on the CMS Web site, in a use r-friendly format. This guide was published

in August 2008 and is available on the CMS Web site at:

http://www.cms.hhs.gov/CouncilonTechI nnov/Downloads/InnovatorsGuide8_25_08.pdf.

As we indicated in the FY 2009 IPPS final rule (73 FR 48554), we invite any

product developers or manufactur ers of new medical technologies to contact the agency

early in the process of product development if they have ques tions or concerns about the

evidence that would be needed later in the development process for the agency's coverage

decisions for Medicare.

The CTI aims to provide useful information on its activities and initiatives to

stakeholders, including Medicare bene ficiaries, advocates, medical product

manufacturers, providers, and health policy expe rts. Stakeholders with further questions

about Medicare's coverage, coding, and payment processes, or who want further guidance

about how they can navigate these processe s, can contact the CTI at CTI@cms.hhs.gov

or from the "Contact Us" section of the CTI home page

(http://www.cms.hhs.gov/CouncilonTechInnov/).CMS-1498-P 264

We note that applicants for add-on pa yments for new medical services or

technologies for FY 2012 must submit a formal request, including a full description of

the clinical applications of the medical se rvice or technology and the results of any

clinical evaluations demonstrating that the new medical service or technology represents

a substantial clinical improvement, along with a significant sample of data to demonstrate

that the medical service or technology m eets the high-cost threshold. Complete

application information, along with final d eadlines for submitting a full application, will

be posted as it becomes ava ilable on our Web site at:

http://www.cms.hhs.gov/AcuteInpatientPPS/08_newtech .asp. To allow interested parties

to identify the new medical services or t echnologies under review before the publication

of the proposed rule for FY 2012, the Web site also will list the tracking forms completed

by each applicant.

2. Public Input Before Publication of a Notice of Proposed Rulemaking on Add-On

Payments

Section 1886(d)(5)(K)(viii) of the Act, as amended by section 503(b)(2) of

Pub. L. 108-173, provides for a mechanism for pu blic input before publication of a notice

of proposed rulemaking regarding whether a medical service or technology represents a

substantial clinical improveme nt or advancement. The process for evaluating new

medical service and technology applic ations requires the Secretary to--

● Provide, before publication of a pr oposed rule, for public input regarding

whether a new service or tec hnology represents an advance in medical technology that

substantially improves the diagnosis or treatment of Medicare beneficiaries;CMS-1498-P 265

● Make public and periodically update a list of the services and technologies for

which applications for add-on payments are pending;

● Accept comments, recommendations, and data from the public regarding

whether a service or technology represents a substantial clinical improvement; and

● Provide, before publication of a pr oposed rule, for a meeting at which

organizations representing hosp itals, physicians, manufacturers, and any other interested

party may present comments, recommendati ons, and data regarding whether a new

medical service or technology represents a substantial clinical improvement to the

clinical staff of CMS.

In order to provide an opportunity for public input regarding add-on payments for

new medical services and technologies for FY 2011 prior to publication of this FY 2011

IPPS/RY 2011 LTCH PPS proposed rule, we published a notice in the Federal Register

on November 27, 2009 (74 FR 62339 through 62342), and held a town hall meeting at the

CMS Headquarters Office in Baltimore , MD, on February 19, 2010. In the

announcement notice for the meeting, we stat ed that the opinions and alternatives

provided during the meeting would assist us in our evaluations of applications by

allowing public discussion of the substantia l clinical improvement criterion for each of

the FY 2011 new medical service and technology add-on payment applications before the

publication of this FY 2011 proposed rule.

Approximately 80 individuals registered to attend the town hall meeting in

person, while additional indivi duals listened over an open te lephone line. Each of the

three FY 2011 applicants presented informati on on its technology, including a discussionCMS-1498-P 266

of data reflecting the substantial clinical improvement aspect of the technology. We

considered each applicant’s pres entation made at the town ha ll meeting, as well as written

comments submitted on the applications, in our evaluation of the new technology add-on

applications for FY 2011 in this proposed rule.

In response to the published notice and the new technology town hall meeting, we

received 11 written comments regarding applications for FY 2011 new technology

add-on payments. We summarized these comment s or, if applicable, indicated that there

were no comments received, at the end of each discussion of the individual applications

in this proposed rule.

Comment : One commenter, a medical technol ogy association, recommended that

CMS, in its consideration as to whether a new technology meets the substantial clinical

improvement criterion, judge a diagnostic device on the basis of a diagnostic outcome

(improved diagnosis) rather than a therapeutic outcome, recognizing that earlier and

improved detection of disease often leads to improved patient outcomes.

Response : We thank the commenter for its comments on the substantial clinical

improvement criterion. Similar to our statements in the FY 2010 IPPS/RY 2010 LTCH

PPS final rule (74 FR 43817 through 43819), section 1886(d)(5)(K)(vi) of the Act

authorizes the Secretary to establish throug h notice and comment rulemaking the criteria

that a new medical service or technology must meet in order to be eligible for the new

technology add-on payment. Under this aut hority, in the September 7, 2001 final rule,

we established three criteria through no tice and comment rulemaking--the newness

criterion, the cost criterion, and the substan tial clinical improveme nt criterion (66 FRCMS-1498-P 267

46924). Specifically, §412.87(b)(1) of the re gulations provides that a new medical

service or technology must “represent an adva nce that substantially improves, relating to

technologies previously available, the diagnosis or treatment of Medicare beneficiaries.”

As we explained in the September 7, 2001 final rule, we consider a diagnostic

technology to meet the substantial clinical improvement criterion if the technology not

only “offers the ability to diagnose a medical condition in a patient population where that

medical condition is currently undetectable or offers the ability to diagnose a medical

condition earlier in a patient population than allowed by currently available methods,”

but also if “use of the device to make a di agnosis affects the mana gement of the patient”

(66 FR 46914). We believe that this evidence is necessary to determine whether the new

technology affords a “clear improvement over the use of previously available

technologies.” We do not consider any partic ular type of evidence to be dispositive;

instead, we consider all information presente d for each application to determine whether

there is evidence to support a conclusion that “use of the device to make a diagnosis

affects the management of the patient” (i n the case of a diagnostic technology).

Specifically, we consider whether the peer-reviewed medical literature supports or

clinical studies indicat e that the diagnostic device should generally be used by providers

in guiding the management of their patie nts. In addition, we consider evidence

demonstrating clinically accepted use of the device in a manner that actually affects the

management of patients.

Under the commenter’s recommendation, a diagnostic technology effectively

would only need to receive FDA approval and be the only technology approved for aCMS-1498-P 268

particular diagnostic capability in order to be deemed a “substantial improvement” for

purposes of new technology add-on payments, re gardless of its ability to positively affect

patient management. This approach would deem a device that led to the identification of

new information as a substantial improvement in diagnosis even if such detection has not

been “demonstrated to represent a substa ntial improvement in caring for Medicare

beneficiaries” and was not linked to evidence-based, significant, and positive changes in

the management of patients or, ultimately, to changes in clinical outcomes. We do not

believe this rationale is consistent with our prior statements regarding the substantial

clinical improvement crit erion of the new technology add-on payment provision.

Comment : One commenter, a medical devi ce association, recommended that

CMS “deem a device to satisfy the substantial clinical improvement criteria if it was

granted a humanitarian device exemption or pr iority review based on the fact that it

represents breakthrough technologies, which offer significant advantages over existing

approved alternatives, for which no alternatives exist, or the availability of which is in the

best interests of the patients. ” In addition, the commenter remarked that this process

would simplify CMS’ evaluation of applica tions for new technology add-on payments

and would promote access to innovative treatme nts, as intended by Congress. Although

the commenter also made remarks that were unrelated to substantial clinical

improvement, because the purpose of the town hall meeting was specifically to discuss

substantial clinical improve ment of pending new tec hnology applications, those

comments are not summarized in this proposed rule.CMS-1498-P 269

Response : We thank the commenter for its comments. We note that we have

previously addressed the comment concerning automatically approving technologies that

have a humanitarian device exemption (HDE) in the FY 2008 IPPS final rule

(72 FR 47302). We refer readers to that rule for our response. A further discussion of

our evaluation of the applications and the documentation for new technology add-on

payments submitted for FY 2011 approval is provided under the specified areas under

this section.

3. FY 2011 Status of Technologies A pproved for FY 2010 Add-On Payments

a. Spiration® IBV® Valve System

Spiration, Inc. submitted an applicati on for new technology add-on payments for

the Spiration® IBV® Valve System (Spira tion® IBV®). The Spiration® IBV® is a

device that is used to place, via bronchoscopy, small, one-way valves into selected small

airways in the lung in order to limit airflow into selected portions of lung tissue that have

prolonged air leaks following surgery while still allowing mucus, fluids, and air to exit,

thereby reducing the amount of air that enters the pleural space. The device is intended

to control prolonged air leaks following three specific surgical procedures: lobectomy;

segmentectomy; or lung volume reduction surg ery (LVRS). According to the applicant,

an air leak that is present on postoperative da y 7 is considered “prolonged” unless present

only during forced exhalation or cough. In or der to help prevent valve migration, there

are five anchors with tips that secure the valve to the airway. The implanted valves are

intended to be remove d no later than 6 weeks after implantation.CMS-1498-P 270

With regard to the newness criterion, the Spiration® IBV® received a HDE

approval from the FDA on October 24, 2008. We were unaware of any previously FDAapproved predicate devices, or otherwise similar devices, that could be considered

substantially similar to the Sp iration® IBV®. However, the applicant asserted that the

FDA had precluded the device from being used in the treatment of any patients until

Institutional Review Board (IRB) approvals re garding its study sites. Therefore, the

Spiration® IBV® met the newn ess criterion once it obtained at least one IRB approval

because the device would then be available on the market to treat Medicare beneficiaries.

After evaluation of the newness, costs, and substantial clinical improvement

criteria for new technology payments for the Spiration® IBV® and c onsideration of the

public comments we received on the FY 2010 IPPS proposed rule, including the

additional analysis of clinical data and supporting informati on submitted by the applicant,

we approved the Spiration® IBV® for new technology add-on payments for FY 2010.

The Spiration® IBV® is the only device curre ntly approved for the purpose of treating

prolonged air leaks following lobectomy, segmentectomy, and LVRS patients in the

United States. We stated that without the availability of this device, patients with

prolonged air leaks (following lobectomy, segmentectomy, and LVRS) might otherwise

remain inpatients in the hosp ital (and have a longer length of stay than they might

otherwise have without the Spiration® IBV®) or might even require additional invasive

surgeries to resolve the air leak. We also noted that use of the Spiration® IBV® may

lead to more rapid beneficial resolution of prolonged air leaks and reduce recovery time

following the three lung surgeries mentioned above.CMS-1498-P 271

However, in the FY 2010 IPPS/RY 2010 LTCH PPS final rule (74 FR 43823), we

indicated that we remained interested in seeing whether the clinical evidence continues to

find it to be effective. This approval wa s on the basis of using the Spiration® IBV®

consistent with the FDA approval (HDE), a nd we emphasized the need for appropriate

patient selection accordingly. Therefore, we limited the add-on payment to cases

involving prolonged air leaks following l obectomy, segmentectomy and LVRS in

MS-DRGs 163, 164, and 165. Cases involving the Spiration® IBV® that are eligible for

the new technology add-on payment are iden tified by assignment to MS-DRGs 163, 164,

and 165 with procedure code 33.71 or 33.73 in combination with one of the following

procedure codes: 32.22, 32.30, 32.39, 32.41, or 32.49.

In the FY 2010 IPPS/RY 2010 LTCH PPS final rule, we stated that the average

cost of the Spiration® IBV® is reported as $2,750. Based on data from the FY 2010

application, the average amount of valves per case is 2.5. Therefore, the total maximum

cost for the Spiration® IBV® was expected to be $6,875 per case ($2,750 x 2.5). Under

§412.88(a)(2) of our regulations, new technol ogy add-on payments are limited to the

lesser of 50 percent of the average cost of th e device or 50 percent of the costs in excess

of the MS-DRG payment for the case. As a result, we finalized a maximum add-on

payment for a case involving the Spiration® IBV® as $3,437.50.

b. CardioWestTM Temporary Total Artificia l Heart System (CardioWestTM TAH-t)

SynCardia Systems, Inc. submitted an application for approval of the

CardioWestTM temporary Total Artificial Hear t system (TAH-t) in FY 2009. The TAH-t

is a technology that is used as a bridge to heart transplant device for heart transplant-CMS-1498-P 272

eligible patients with end-stag e biventricular failure. The TAH-t pumps up to 9.5 liters of

blood per minute. This high level of perfu sion helps improve hemo dynamic function in

patients, thus making them bette r heart transplant candidates.

The TAH-t was approved by the FDA on October 15, 2004, for use as a bridge to

transplant device in cardiac transplant-eligible candidates at risk of imminent death from

biventricular failure. The TAH-t is intended to be used in hospital inpatients. One of the

FDA’s post-approval requirements is that the manufacturer agrees to provide a

post-approval study dem onstrating success of the device at one center can be reproduced

at other centers. The study was to include at least 50 patients who would be followed up

to 1 year, including (but not limited to) the fo llowing endpoints: survival to transplant;

adverse events; and device malfunction.

In the past, Medicare did not cover artif icial heart devices, including the TAH-t.

However, on May 1, 2008, CMS issued a fina l national coverage determination (NCD)

expanding Medicare coverage of artificial hear ts when they are implanted as part of a

study that is approved by the FDA and is de termined by CMS to meet CMS' Coverage

with Evidence Development (CED) clinical research criteria. (The final NCD is

available on the CMS Web site at:

http://www.cms.hhs.gov/mcd/vi ewdecisionmemo.asp?id=211 .)

We indicated in the FY 2009 IPPS/RY 2009 LTCH PPS final rule (73 FR 48555)

that, because Medicare’s previous coverage policy with respect to this device had

precluded payment from Medicare, we did not expect the costs associated with this

technology to be currently reflected in the data used to determine th e relative weights ofCMS-1498-P 273

MS-DRGs. As we have indicated in the past, and as we discussed in the FY 2009

IPPS/RY 2009 LTCH PPS final rule, although we generally believe that the newness

period would begin on the date that FDA approval was granted, in cases where the

applicant can demonstrate a documented delay in market availability subsequent to FDA

approval, we would consider de laying the start of the newness period. This technology’s

situation represented such a case. We also noted that section 1886(d)(5)(K)(ii)(II) of the

Act requires that we provide for the collection of cost data for a new medical service or

technology for a period of at least 2 years and no more than 3 years “beginning on the

date on which an inpatient hos pital code is issued with respect to the service or

technology.” Furthermore, th e statute specifies that the term “inpatient hospital code”

means any code that is used with respect to inpatient hospital services for which payment

may be made under the IPPS and includes ICD-9-CM codes and any subsequent

revisions. Although the TAH-t has been desc ribed by the ICD-9-CM code(s) since the

time of its FDA approval, because the TAH- t had not been covered under the Medicare

program (and, therefore, no Medicare payment had been made for this technology), this

code could not be "used with respect to inpatient hospital se rvices for which payment" is

made under the IPPS, and thus we assumed that none of the costs associated with this

technology would be reflected in the Medica re claims data used to recalibrate the

MS-DRG relative weights for FY 2009. For this reason, as discussed in the FY 2009

IPPS/RY 2009 LTCH PPS final rule, despite the FDA approval date of the technology,

we determined that TAH-t would still be eligible to be considered “new” for purposes of

the new technology add-on payment because the TAH-t met the newness criterion on theCMS-1498-P 274

date that Medicare coverage began, consistent with issuance of the final NCD, effective

on May 1, 2008.

After evaluation of the newness, costs, and substantial clinical improvement

criteria for new technology add-on payments for the TAH-t and consideration of the

public comments we received in response to the FY 2009 IPPS/RY 2009 LTCH PPS

proposed rule, we approved the TAH-t for new technology add-on payments for FY 2009

(73 FR 48557). We indicated that we believe d the TAH-t offered a new treatment option

that previously did not exist for patients with end-stage biventricular failure. However,

we indicated that we recognized that Medicare coverage of the TAH-t is limited to

approved clinical tria l settings. The new technology add-on payment status does not

negate the restrictions under the NCD nor does it obviate the need for continued

monitoring of clinical evidence for the TAH-t. We remain interested in seeing whether

the clinical evidence demonstrates that the TAH-t continues to be effective. If evidence

is found that the TAH-t may no longer offe r a substantial clini cal improvement, we

reserve the right to discontinue new technology add-on payments, even within the 2- to

3-year period that the device may still be considered to be new. We also continued to

make new technology add-on payments for the TAH-t in FY 2010. We welcome public

comment regarding whether there is new evidence that demonstrates that the TAH-T

continues to be effective a nd whether it should still be cons idered to be a substantial

clinical improvement for FY 2011.

The new technology add-on payment for the TAH-t for FY 2010 is triggered by

the presence of ICD-9-CM procedure code 37.52 (Implantation of total heart replacementCMS-1498-P 275

system), condition code 30, and the diagnos is code reflecting clinical trial--V70.7

(Examination of participant in clinical trial). For FY 2010, we finalized a maximum

add-on payment of $53,000 (that is, 50 percen t of the estimated operating costs of the

device of $106,000) for cases that involve this technology.

Our practice has been to begin and end new technology add-on payments on the

basis of a fiscal year. In general, we exte nd add-on payments for an additional year only

if the 3-year anniversary date of the product’s entry on the market occurs in the latter half

of the fiscal year (70 FR 47362). The TAH-t is still eligible to be considered “new” for

purposes of the new technology add-on payment because the 3-year anniversary date of

the TAH-t entry on the market was in the second half of the fiscal year and the TAH-t

met the newness criterion on the date that Medicare coverage began, consistent with

issuance of the final NCD, effective on May 1, 2008. Therefore, for FY 2011, we are

proposing to continue new technology add-on pa yments for cases involving the TAH-t in

FY 2011 with a maximum add-on payment of $53,000.

4. FY 2011 Applications for New Technology Add-On Payments

We received five applications to be considered for new technology add-on

payment for FY 2011. However, two applicants withdrew their applications: Nycomed

Austria GmbH, which submitted an applicati on for new technology add-on payments for

FY 2011 for TachoSil®; and Zimmer, whic h submitted an application for new

technology add-on payments for FY 2011 for th e Dynesys Dynamic Stabilization System.

Nycomed Austria GmbH withdrew its appli cation from further review in January 2010,

and Zimmer withdrew its application in Febr uary 2010. Because both applications wereCMS-1498-P 276

withdrawn prior to the town hall meeting a nd publication of this proposed rule, we are

not discussing these two applications in this proposed rule.

A discussion of the remaining three applications is presented below. At the time

this proposed rule was devel oped, one of the technologies had not yet received FDA

approval. Consequently, our discussion below of this application may be limited.

a. Auto Laser Interstitial Thermal Therapy (AutoLITTTM) System

Monteris Medical submitted an applica tion for new technology add-on payments

for FY 2011 for the AutoLITTTM. We note that the applicant submitted an application for

new technology add-on payments for FY 2010 but withdrew its application prior to the

FY 2010 IPPS/RY 2010 LTCH PPS final rule. AutoLITTTM is a minimally invasive,

MRI-guided catheter tipped laser designed to destroy malignant brain tumors with

interstitial thermal energy causing immediate coagulation and necrosis of diseased tissue.

The applicant asserts that the AutoLITTTM delivers laser energy to the lesion with a

proprietary 3mm diameter probe that directs the energy radially (that is, at right angle to

the axis of the probe, or side-firing) toward the targeted tumor tissue in a narrow beam

profile and at the same time, a proprietary probe cooling system removes heat from tissue

not directly in the path of the laser beam, ostensibly protecting it from thermal damage

and enabling the physician to selectively ablate only targeted tissue. The AutoLITTTM

received a 510K FDA clearance in May 2009. The AutoLITTTM is indicated for use to

necrotize or coagulate soft tissue through in terstitial irradiation or thermal therapy in

medicine and surgery in the discipline of neurosurgery with 1064 nm lasers. The

AutoLITTTM may be used in patients with glioblastoma multiforme brain tumors. TheCMS-1498-P 277

applicant stated in its application and thr ough supplemental information that, due to

required updates, the technology was actuall y introduced to the market in December

2009. The applicant explained that it was nece ssary to reduce the thermal damage lines

from three to one and complete International Electrotechnical Commission/Underwriter

Laboratory testing, which led to the intr oduction of the technology to the market in

December 2009, although the technology was approved by FDA in May 2009. The

applicant also stated through supplementary in formation to its application that the first

sale of the product took place on March 19, 2010. However, because the product was

already available for use in December 2009, it ap pears that the newness date would begin

in December 2009. We welcome public comments on this issue.

With regard to the newness criterion, we are concerned that the AutoLITTTM may

be substantially similar to the device that it listed as its predicate device in its application

to the FDA for approval. Specifically, in making a determina tion of substantial

similarity, we consider the following: (1) whether a product uses the same or similar

mechanism of action to achieve a therapeutic action; and (2) whether a product is

assigned to the same of different MS-DRG; and (3) whether the new use of a technology

involves the treatment of the same or similar type of dis ease and the same or similar

patient population. The applican t identified Visual-ase as its predicate device (which was

approved by the FDA in 2006), which is also used to treat tumors of the brain. The

applicant maintains that AutoLITTTM can be distinguished from the Visual-ase by its

mechanism of action (that is, side-firing laser versus elliptical firing). Additionally, as

mentioned above, the technology contains a proprietary probe cooling system thatCMS-1498-P 278

removes heat from tissue not directly in th e path of the laser beam. We welcome

comments from the public regarding whether or not the AutoLITTTM is substantially

similar to the Visual-ase and if it meets the newness criteria.

The technology can be identified by ICD-9-CM procedure codes 17.61 (Laser

interstitial thermal therapy [LIT T] of lesion or tissue of brain under guidance), and 17.62

(Laser interstitial thermal therapy [LITT] of lesion or tissue of head and neck under

guidance), which were effective on October 1, 2009.

In an effort to demonstrate that AutoLI TTTM meets the cost criterion, the applicant

used 2007 Medicare data from the Healthcare Cost and Utiliz ation Project (HCUP). We

first note that the applicant believes that cases eligible for the AutoLITTTM will map to

MS-DRG 25 (Craniotomy and Endovascular Intracranial Procedures with MCC),

MS-DRG 26 (Craniotomy and Endovascular In tracranial Procedur es with CC), and

MS-DRG 27 (Craniotomy and Endovascular In tracranial Procedur es without CC or

MCC). The applicant explained through supplem ental information to its application that

most cases of the AutoLITTTM would map to MS-DRG 25 in the near-term. As the

technology becomes more widely available, c linicians will use the technology instead of

performing a craniotomy for brain cancer a nd on other different types of brain cancers

including metastases, which would map to other MS-DRGs aside from MS-DRG 25.

The applicant further stated that life expectancy with brain cancer is predicated on the

removal of as much of the cancer as possible and asserted that over time the AutoLITTTM

will do a better job of removing the majority of the cancer that is present within the brain

tissue compared to other procedures. The a pplicant believes that physicians with theCMS-1498-P 279

AutoLITTTM have a better tool at removing more cancer and killing it more precisely and

accessing parts of the brain that surgical re section cannot access. Lastly, the applicant

believes that the minimally invasive nature of the procedure will also result in broader

usage to other less complicated procedures (a s clinical and patient awareness expands).

The applicant searched HCUP hospital data for cases potentially eligible for the

AutoLITTTM that was assigned one of the following ICD-9-CM diagnosis codes: a

diagnosis code that begins with a prefix of 191 (Malignant neoplasm of brain); diagnosis

code 225.0 (Benign neoplasm of brain and other parts of ner vous system); or diagnosis

code 239.6 (Neoplasm of the brain of unspe cified nature). The applicant found 41,021

cases and weighted the standardized charge per case based on the number of cases found

within each of the diagnosis c odes listed above rather than the percentage of cases that

would group to different MS-DRGs. Based on th is analysis, the applicant calculated an

average standardized charge per case was $57,511. While the applicant's analysis

established a case-weighted average charge per case in the aggregate, it did not provide a

case-weighted average standardized charge per case by MS-DRG (as required by the

application).

The applicant also noted that their estimate of the case-weighted average

standardized charge per case of $57,511 di d not include charges related to the

AutoLITTTM. Therefore, it is necessary to add the charges related to the device to the

case-weighted average standardized charge per case in evaluating the cost threshold

criterion. Although the applicant submitted da ta related to the es timated cost of the

AutoLITTTM per case, the applicant stated that the cost of the device was proprietaryCMS-1498-P 280

information. Based on a study of charge compression data by RTI 4 and charge master

data from Stanford University and University of California, San Fran cisco, the applicant

estimates $38,886 in charges related to the Auto LITTTM (we note that some of the data

used a markup of 294 percent of the costs). Adding the estimated charges related to the

device to the average standardized charge per case resulted in a total average

standardized charge per case of $96,397 ($57,511 plus $38,886). We note, in the

applicant’s discussion of substantial clinical improvement below, the applicant maintains

that improved clinical outcomes using nonfoc used LITT included reduced recovery time

and a reduced rate of complications. Theref ore, we are seeking comment on how reduced

recovery time and a reduced rate of complications would affect the total case-weighted

average standardized charge per case and the average length of stay (for cases eligible for

the AutoLITTTM).

As noted above, the applicant's analysis established a case-weighted average

charge per case in the aggregate, but it did not provide a case-weighted average

standardized charge per case by MS-DRG. However, the applicant explained through

supplemental information to its application that the total average standardized charge per

case significantly exceeds the cost threshold established by CMS for FY 2011 in Table 10

(74 FR 44173) of $84,185 for MS-DRG 25. Additi onally, the applicant further explained

that the total average standardized charge per case would also exceed the cost thresholds

established by CMS of $58,612 for MS-DRGs 26 and $47,053 for MS-DRG 27. Because

the total average standardized charge per case exceeds the threshold amount for each

4 RTI International, A Study of Charge Compression in Calculating DRG Relative Weights , RTI Project No. 0207964.012.008; January 2007.CMS-1498-P 281

individual MS-DRG to which the technology would map (MS-DRGs 25, 26, and 27), the

applicant maintains that the AutoLITTTM would meet the cost criterion. We invite public

comment on whether or not the AutoLITT TM meets the cost criterion for a new

technology add-on payment for FY 2011.

With respect to the substantial clini cal improvement criterion, the applicant

maintains that it meets this criterion in its a pplication. Specifically, the applicant stated

that several non-AutoLITTTM c linical trials have demons trated that nonfocused LITT

(and more recently, the use of LITT plus MR I) improved survival, quality of life, and

recovery in patients with advanced glioblastoma multiforme tumors and advanced

metastatic brain tumors that cannot be effectively treated with surgery, radiosurgery,

radiation, chemotherapy, or any currently ava ilable clinical procedure. In a number of

these patients, nonfocused LITT was the trea tment of last resort , due to either the

unresponsiveness or inability of these therapie s to treat the brain tumor (due to tumor

location, type, or size, among others). The a pplicant also maintains that when compared

to craniotomy, it offers improved clinical outcomes using nonfocused LITT, including

reduced recovery time and a reduced rate of complications (that is, infection, brain

edema). The applicant stated that these factors, as discussed in the FY 2001 final rule

(66 FR 46914 through 46915) demonstrate that the AutoLITTTM meets the new

technology criterion for substa ntial clinical improvement.

The applicant further asserts that AutoLITTTM would represent a substantial

clinical improvement over existing standards of care for a number of reasons and should

build upon less sophisticated, nonfocused LITT th erapies. These clinical improvementsCMS-1498-P 282

cited by the applicant include: a less i nvasive method of tumo r ablation, potentially

leading to lower complication rates post pr ocedure (infection, edema); an ability to

employ multiple interventions over shorter periods of time and an ability to be used as a

treatment of last resort (radiosurgery is limited due to radiation dosing and craniotomy is

limited to 1 to 2 procedures); an ability to be used in hard-to-reach brain tumors (the

AutoLITTTM may be used as a treatment of last resort); and a shorte r recovery time (the

possibility for same day surgery, which has been demonstrated above with nonfocused

LITT).

We appreciate the applicant’s summary of why this technology represents a

substantial clinical improvement. While we recognize the future potential of this

interesting therapy, we have concerns that to date the AutoLITTTM has been used for the

treatment of only a few patients as part of a safety evaluation with no comparative

efficacy data and, therefore, there may not be sufficient objective clinical evidence to

determine if the AutoLITTTM meets the substantial clinical improvement criteria. The

applicant did note in its presentation at the new technology town hall meeting that it is

currently conducting a clinical trial with a su mmary report expected in the near future.

We welcome additional clinical data to demonstrate whether the AutoLITTTM meets the

substantial clinical improvement criterion a nd invite public comment on whether or not

the AutoLITTTM meets the substantia l clinical improvement criterion.

We did not receive any written public co mments regarding this application for

new technology add-on payments concerning the new technology town hall meeting.CMS-1498-P 283

b. LipiScanTM Coronary Imaging System

InfraReDx, Inc. submitted an application for new technology add-on payments for

FY 2011 for the LipiScanTM Coronary Imaging System (LipiScanTM). We note that an

application was also submitted for FY 2010, but the application was denied on the

grounds that it did not meet the substantial c linical improvement cr iterion at that time.

The application for FY 2011 contains some add itional clinical and charge data that were

not available at the time that the FY 2010 new technology add-on payment decisions

were made.

The LipiScanTM device is a diagnostic tool that uses Intravascular Near Infrared

Spectroscopy (INIRS) during an invasive coro nary catheterization to scan the artery wall

in order to determine corona ry plaque composition. The purpose of the device is to

identify lipid-rich areas in the artery because such areas have been shown to be more

prone to rupture. The procedure does not re quire flushing or occlusion of the artery.

INIRS identifies the chemical content of pla que by focusing near infrared light at the

vessel wall and measuring reflecte d light at different wavelengths (that is, spectroscopy).

The LipiScanTM system collects approxima tely 1,000 measurements per 12.5 mm of

pullback, with each measurement interrogating an area of 1 to 2 mm 2 of lumen surface

perpendicular to the longitudinal axis of th e catheter. When the catheter is in position,

the physician activates the pullback and rotation device and the scan is initiated providing

360 degree images of the length of the artery. The rapid acquisition speed for the image

freezes the motion of the heart and permits sca nning of the inside of the arterial wall in

less than 2 minutes. When the catheter pullb ack is completed, the console displays theCMS-1498-P 284

scan results, which are referred to as a “chemogram” image. The chemogram image

requires reading by a trained user, but, acco rding to the applicant was designed to be

simple to interpret.

With regard to the newness criterion, the LipiScanTM received a 510K FDA

clearance for a new indication on April 25, 2008, and was available on the market

immediately thereafter. On June 23, 2006, InfraReDx, Inc. was granted a 510K FDA

clearance for the “InfraReDx Near Infrared (NIR) Imaging System.” Both devices are

under the common name of “Near Infrared Imaging System” according to the 510K

summary document from the FDA. However, the InfraReDx NIR Imaging System

device that was approved by the FDA in 2006 was approved “for the near infrared

imaging of the coronary arteries,” whereas the LipiscanTM device cleared by the FDA in

2008 is for a modified indicati on. The modified indication sp ecified that LipiscanTM is

“intended for the near-infrared examination of coronary arteries..., the detection of

lipid-core-containing plaques of interest...[and] for the a ssessment of coronary artery

lipid core burden.” In the FY 2010 IPPS/RY 201 LTCH PPS proposed rule

(74 FR 24132 through 24134), we noted that we had concerns with whether LipiscanTM

was substantially similar to its predicate de vice that was approved by the FDA in 2006.

However, those concerns were addressed by the manufacturer during the comment

period. Specifically, the manufacturer stated that there were technical problems with the

original device and that LipiScanTM had to be modified in the following ways:

2006 NIRS Device Marketed 2008 LipiScan Console No display of results of scan Results displayed immediatelyCMS-1498-P 285

2006 NIRS Device Marketed 2008 LipiScan Catheter Saline-filled with microbubble problem obscuring many

scans Air-filled with no microbubble problem

Algorithm No algorithmic processing of NIR signals – no means of certifying that lipid core plaque is present Algorithm validated in over 1,000 autopsy measurements proving that NIRS can detect lipid core plaque, and providing diagnosis of lipid core plaque to the MD during the case

The problems with the LipiScanTM de vice that was approved in 2006 were

addressed in the second device that was granted FDA approval in April 2008. The

LipiScanTM device was not marketed until after its second FDA clearance. Therefore, we

no longer needed to make a determina tion as to whether the newer device was

substantially similar to the predicate devi ce and we determined in the FY 2010

IPPS/RY 2010 LTCH PPS final rule (74 FR 43815) that LipiscanTM would be considered

to be “new” to the market as of the date of its FDA approval in April 2008. Because a

technology may be considered new for a period of up to 3 years if, during the third year,

the technology is new for more than 6 months of the fiscal year, it appears that the

technology would still be in the newne ss period for FY 2011. We welcome public

comment on whether LipiscanTM meets the newness criterion.

We note that the LipiscanTM technology is identified by ICD-9-CM procedure

code 38.23 (Intravascular spectroscopy), wh ich became effective October 1, 2008, and

cases involving the use of this device ge nerally map to MS-DRG 246 (Percutaneous

Cardiovascular Procedures w ith Drug-Eluting Stent(s) with MCC or 4+ Vessels/Stents);

MS-DRG 247 (Percutaneous Card iovascular Procedures w ith Drug-Eluting Stent(s)

without MCC); MS-DRG 248 (Percutaneous Card iovascular Procedur es with Non-DrugEluting Stent(s) with MCC or 4+ Ve ssels/Stents); MS-DRG 249 (PercutaneousCMS-1498-P 286

Cardiovascular Procedures with Non-Drug-Eluting Stent( s) without MCC); MS-DRG

250 (Percutaneous Cardiovascul ar Procedures without Cor onary Artery Stent with

MCC); and MS-DRG 251 (Percuta neous Cardiovascular Proc edures without Coronary

Artery Stent without MCC).

In an effort to demonstrate that th e technology meets the cost criterion, the

applicant used the FY 2010 final rule Afte r Outliers Removed (AOR) file (posted on the

CMS Web site) to identify cases potentially eligible for LipiscanTM. The applicant

believes that every case within MS-DRG s 246, 247, 248, 249, 250, and 251 is eligible for

LipiscanTM. In addition, the a pplicant believes that Lipisca nTM will be evenly distributed

across patients in each of those six MS-D RGs (16.7 percent within each MS-DRG).

Using data from the AOR file, the applicant found the average standardized charge per

case for MS-DRGs 246, 247, 248, 249, 250, and 251 was $67,531, $44,485, $62,936,

$40,149, $59,416, and $38,864, respectively, equatin g to a case-weighted average

standardized charge per case of $52,230 (calculation performed using unrounded

numbers). The applicant indicated that the case-weighted average standardized charge

per case does not include charges related to Li piscanTM; therefore, it is necessary to add

the charges related to the device to the average case-weighted standardized charge per

case to evaluate the cost threshold criteri on. Although the applicant submitted data

related to the estimated cost per case of LipiscanTM, the applicant stated that the cost of

the device is proprietary information. Ba sed on a sampling of all 10 non-VA hospitals

that are actively using the device, the applican t determined that the average charge for the

device was $7,497. Adding the estimated average charge related for the device to theCMS-1498-P 287

case-weighted standardized charge per case (based on the case distribution from the

applicant’s FY 2010 AOR analysis) results in a total case-weighted average standardized

charge per case of $59,727 ($52,230 plus $7,497). Using the FY 2011 thresholds

published in Table 10 of the FY 2010 IPPS/RY 2010 LTCH PPS final rule

(74 FR 44173), the case-weighted threshold for MS-DRGs 246, 247, 248, 249, 250, and

251 is $56,487 (all calculations above were performed using unrounded numbers).

Because the applicant’s calculation of the total case-weighted average standardized

charge per case for the applicable MS-DRGs exceeds the case-weighted threshold

amount, the applicant maintains that LipiscanTM meets the cost criterion.

We note that in the applicant’s analys is of the cost criterion, instead of

determining the case-weighted average standardized charge per case and the

case-weighted threshold amount based on the actual number of cases from the FY 2010

AOR file in the applicable MS-DRGs that ar e eligible for the LipiscanTM, the applicant’s

analysis assumed an even distribution of patie nts in the applicable MS-DRGs. However,

the data from the FY 2010 AOR file shows a varied distribution of cases in each of the

applicable MS-DRGs. We believe the more appropriate way to determine the

case-weighted average standardized charge per case and the case-weighted threshold

amount for evaluating the cost criterion is to use the actual distribution of cases in the

applicable MS-DRGs based on the number of cases from the AOR file because this

would more accurately reflect the number and type of Medicare cases typically treated in

the applicable MS-DRGs. Moreover, this would better conform with the applicant’s

assertion that that the probability of use of LipiscanTM is the same in each of those sixCMS-1498-P 288

MS-DRGs. Using data from the FY 2010 AOR file, for MS-DRGs 246, 247, 248, 249,

250, and 251, there were 30,411, 147,952, 19,736, 67,964, 8,184, and 38,091 cases,

respectively. Using this case distribution and the average standardized charge per case

for MS-DRGs 246, 247, 248, 249, 250, and 251 from the application (that is, $67,531,

$44,485, $62,936, $40,149, $59,416, and $38,864, respectively, as stated above), the

case-weighted average standardized char ge per case is $46,657. As the applicant

indicated above, the case-weighted average standardized charge per case does not include

charges related to LipiscanTM. Therefore, it is necessary to add the average charge of

$7,497 related to the device to the case-weighted standardized charge per case to evaluate

the cost threshold criterion. Adding the estimated charges related to the device to the

case-weighted average standardized charge per case (based on the case distribution from

the FY 2010 AOR final rule file) results in a total case-weighted average standardized

charge per case of $54,154 ($46,657 plus $7,497). Using the FY 2011 thresholds

published in Table 10 of the FY 2010 IPPS/RY 2010 LTCH PPS final rule (74 FR 44173)

and the actual case distribution from the AOR file, the case-weighted threshold for MSDRGs 246, 247, 248, 249, 250, and 251 is $52,700 (all calculations above were

performed using unrounded numbers). Because this alternative calculation of total caseweighted average standardized charge per case for the applicable MS-DRGs also exceeds

the case-weighted threshold amount, it appear s that LipiscanTM would meet the cost

criterion. We invite public comment on wh ether or not LipiscanTM meets the cost

criterion.CMS-1498-P 289

With regard to substantial clinical improvement, CMS determined that the

FY 2010 new technology add-on payment application for LipiscanTM did not meet the

substantial clinical improvement criterion because the evidence and information available

at the time the new technology decisions were made did not allow CMS to determine that

the application represented a s ubstantial clinical improvement over existing technologies.

Specifically, CMS found that there was a lack of evidence that demonstrated that

LipiscanTM affected the medical management of patients in which the device was used.

The applicant maintains that the device meets this criterion for the following

reasons. The applicant noted that from November 2008 to 2009, the number of patients

in whom LipiscanTM has been used for clinical purposes has increased from 100 to 500

and during the same period, the number of hosp itals using the product has increased from

6 to 16. In addition, the applicant asserts that “during the past year, two LipiscanTM

publications demonstrate that dilation of a lipid core plaque is responsible for slow or no

reflow and myocardial infarction during the proc edure.” The applicant noted that this is

important because “several treatments are available that could prevent this stenting

complication.” The applicant referenced th e “700 patient PROSPECT Study” which was

presented at Transcatheter Cardiovascular Therapeutics Conference in September 2009

and found that 20.4 percent of patients experience a new event in the 3.4 years following

stenting. The applicant pointed to that finding as evidence that there is a need for

improved safety and efficacy of stenting and maintained that LipiscanTM offers clinicians

the ability to make decisions that result in such improvements.CMS-1498-P 290

The PROSPECT (Providing Regional Observa tions to Study Predictors of Events

in the Coronary Tree) study is a cohort stud y of patients with acute coronary syndrome

who underwent percutaneous coronary angiopl asty and stenting (percutaneous coronary

intervention). Following the procedure, angiography and intravascular ultrasound

(IVUS) were performed. If a patient had a s ubsequent event, a new angiogram and IVUS

image were obtained and compared to the origin al results. The investigators reported that

“angiographically mild lesions with certain mo rphologic features on grayscale and IVUS

present with a 3 year cardiac event rate of 17%, versus other morphologies

(indistinguishable by conventional angiograms) with three year event risks of less than

1%.” We are concerned that with this type of study design, it is not possible to determine

whether the information for the IVUS image would have altered the angioplasty and

stenting procedures since the images were collected after the procedure. The results are

suggestive, but a prospective study is needed to determine the clinical utility of IVUS and

whether use of IVUS leads to changes in clinical practice or improvements in health

outcomes. The PROSPECT study generated a hypothesis that use of IVUS may help

determine which plaques are vulnerable to future events but further clinical research is

needed to confirm this hypothesis. We not e that the PROSPECT study was presented at

the Transcatheter Cardiovascular Therapeu tics Conference in 2009, but that the study

results have yet to be published in a peer-rev iewed journal. We also note that methods

and conclusions from a study may change from what was verbally presented during the

peer review process that is re quired to publish the study results.CMS-1498-P 291

As it did in its prior application, the a pplicant noted that the September 1, 2001

final rule states that one facet of the criterion for substantial clinical improvement is “the

device offers the ability to diagnose a medica l condition in a patient population where the

medical condition is currently undetectable or offers the ability to diagnose a medical

condition earlier in a patient population than allowed by currently available methods.

There must also be evidence that use of the device to make a diagnosis affects the

management of the patient” (66 FR 46914). Th e applicant believes that LipiscanTM meets

all facets of this criterion. The applicant asserted that the device is able to detect a

condition that is not currently detectable. Th e applicant explained that LipiScanTM is the

first device of its kind to be able to detect lip id-core-containing plaque s of interest and to

assess of coronary artery lipid core burden. The applicant further noted that FDA, in its

approval documentation, has indicated that “Thi s is the first device that can help assess

the chemical makeup of coronary artery pl aques and help doctors identify those of

particular concern.”

In addition, the applicant stated th at the LipiScanTM ch emogram permits a

clinician to detect lipid-core- containing plaques in the coronary arteries compared to

other currently available devices that do not have this ability. The applicant explained

that the angiogram, the conventional test for coronary atherosclerosis, shows only

minimal coronary narrowing. However, th e applicant indicated that the LipiScanTM

chemogram has the ability to reveal when an artery contains extensive

lipid-core-containing plaque at an earlier stage.CMS-1498-P 292

The applicant also noted that the device has the ability to make a diagnosis that

better affects the management of the patient. Specifically, the applicant asserted that

LipiScanTM “is currently used in the mana gement of patients undergoing coronary

stenting to improve the safety and efficacy of the procedure” and that while stenting has

steadily improved, its results are not optimal in approximately 30 percent of cases due to

3 problems: (1) peri-stenting MI due to em bolization of lipid core contents and side

branch occlusion; (2) major adverse coro nary events (MACE) post stenting from

difficulties at the stented site; and (3) MACE post stenting for non-stented vulnerable

sites. We note that in order to demonstrat e that the technology represents a substantial

clinical improvement, there must be evidence th at use of the device to make a diagnosis

affects the medical management of the patient and leads to improved clinical outcomes.

The applicant described three case studies where each of the above problems was

addressed by use of the LipiScanTM. In addition, the applicant asserts that the

chemogram results are available to the interventional cardiologist during the PCI

procedure, and have been found to be usef ul in decision-making. According to the

applicant, physicians have reported change s in therapy based on LipiScanTM findings in

20 to 50 percent of patients in which the device has been used. According to the

applicant, the most common use of LipiS canTM results has been by physicians for

selection of the length of arte ry to be stented. In some cases a longer stent has been used

when there is a lipid-core-containing plaque adjacent to the area that is being stented

because a flow-limiting stenosis is present. Th e applicant also noted that, in some cases,

physicians have chosen to use down-stream pr otective devices during stenting proceduresCMS-1498-P 293

on the basis of information gathered by use of LipiscanTM in several patients, and that this

has directly impacted their outcome by capturing emboli and preventing further cardiac

damage. Therefore, the applicant contends th at the use of LipiScanTM by clinicians to

select the length of artery to be stented and as an aid in selection of intensity of lipidaltering therapy, demonstrates that Lipi ScanTM affects the management of patients.

While we recognize that the identification of lipid-rich plaques in the coronary

vasculature holds promise in the management of coronary artery disease, we are

concerned that statements in the FDA approval documents, as well as statements made by

investigators in the literature, suggest that the clinical implications of identifying these

lipid-rich plaques are not yet certain and th at further studies need to be done to

understand the clinical implications of obtaining this information.

The applicant also submitted commentary from Interventional Cardiologists (a

group of clinicians who currently utilize the LipiScanTM device) expl aining the clinical

benefits of the device. The applicant fu rther noted that the device may have other

potential uses that would be of clinical bene fit, and studies are currently being conducted

to investigate these other potential uses. Th e applicant explained that LipiScanTM offers

promise as a means to enhance progress against the two leading problems in coronary

disease management: (1) the high rate of second events that occur even after

catheterization, revascul arization, and the institution of optimal medical therapy; and

(2) the failure to diagnose coronary disease early, which results in sudden death or MI

being the first sign of the disease in most patients. The applicant further stated that the

identification of coronary lipid-core-containi ng plaques, which can most readily be doneCMS-1498-P 294

in those already undergoing catheterization, is likely to be of benefit in the prevention of

second events. In the longer term, the a pplicant stated that the identification of

lipid-core-containing plaques by LipiScanTM may contribute to the important goal of

primary prevention of coronary events, whic h, in the absence of adequate diagnostic

methods, continue to cause extensive morbidit y, mortality and health care expenditures in

Medicare beneficiaries a nd the general population.

We welcome public comment regard ing whether or not the LipiScanTM

technology represents a substantial clinical improvement in the Medicare population.

We received approximately nine public comments during the town hall meeting

public comment period on the LipiScanTM and LipiScanTM IVUS. The comments relating

to LipiScanTM IVUS are summarized at the end of the LipiScanTM IVUS application.

Comment : Several commenters supported approving the LipiScanTM device for

new technology add-on payments. They stated (using nearly identical language) that

LipiScanTM provided accurate in formation about the presence of lipid core plaques that

was previously unavailable. They also stated that the device “permits the detection of an

earlier stage of coronary artery disease.” The commenters also stated that, “over the past

year evidence has been obtained documenting that the presence of a lipid-core plaque at a

stenotic site (as detected by LipiScanTM) is an excellent predictor or peri-stenting

myocardial infarction due to distal emboliz ation of the lipid core following balloon

dilation. This valuable diagnostic informa tion can be combined with well-established

treatments (prophylactic administration of vasod ilators and/or direct stenting) as a means

to reduce the stenting complication of peri-stenting MI.”CMS-1498-P 295

One commenter stated that “the knowledg e that a patient po ssesses lipid laden

atheroma will markedly alter medical therapy in order to prevent thrombotic events.

These heretofore unrecognized (asymptomatic) pa tients identified to be at high risk by

the Lipiscan chemogram will be treated w ith intensive antihyperlipdemic therapy and

other medical strategies that otherwise would not have be en implemented to modify

risk.” Some commenters indicated that other potential uses of LipiScanTM include

“determination of the length of the artery to be stented and selection of the intensity of

lipid-altering therapy.”

Several commenters stated that the “lack of specific reimbursement” for the

technology was an impediment to the use and development of it.

Response : We thank the commenters for thei r comments. We have considered

the comments concerning the town hall meetin g in this proposed rule. As stated above,

we invite additional public co mment on objective data regardin g the assertions made by

the commenters. Specifically, we welcome a dditional information (including specific

case-descriptions) regarding how the use of the technology has affected the medical

management of patients and how the change s in management ha ve led to improved

clinical outcomes for those patients (again, specific examples are welcomed).

In response to the comments concerning Medicare reimbursement for LipiScanTM,

we note that LipiScanTM is cu rrently covered by Medicare a nd would thus be included in

the MS-DRG payment made to the hospital. In general, the MS-DRG payment is

considered to cover all costs associated with the case including those of new

technologies. As noted above, typically, there is a lag of 2 to 3 years from the point aCMS-1498-P 296

new medical service or technology is first in troduced on the market (generally on the date

that the technology receives FDA approval/clear ance) and when data reflecting the use of

the medical service or technology are used to calculate the MS-DRG weights. In addition,

Congress specified that a new medical servi ce or technology may be considered for new

technology add-on payment if, "based on the es timated costs incurred with respect to

discharges involving such service or t echnology, the DRG prospective payment rate

otherwise applicable to such discharges under this subsection is inadequate." While we

agree with the commenter that at this time there is no specific reimbursement for

LipiscanTM within the MS-DRGs in the form of a new technology add-on payment,

because LipiscanTM has applied for new tec hnology add-on payments, we will evaluate it

to determine whether it meets the criteria to receive new technology add-on payments in

FY 2011. If the technology does not meet th e new technology add-on payment criteria, it

will continue to be paid as part of the re gular MS-DRG payment and once the lag of 2 to

3 years is over, the costs associated of LipiscanTM will be fully reflected in the relative

weights that are used to recalibrate the MS-DRGs.

c. LipiScanTM Coronary Imaging Syst em with Intravascular Ultrasound (IVUS)

InfraReDx, Inc. submitted an application for new technology add-on payments for

FY 2011 for the LipiScanTM Coronary Imaging System with Intravascular Ultrasound

(LipiScanTM IVUS). The LipiScanTM IVUS de vice is a diagnostic device that uses

Intravascular near infrared spectroscopy (I NIRS) combined with intravascular ultrasound

(IVUS) during an invasive coronary angiogra phy to determine the chemical composition

of coronary plaques, which is accomplished using near infrared spectroscopy (INIRS)CMS-1498-P 297

and to visualize stents and the structural features of coronary lesions, which is

accomplished using IVUS. This new technology combines both capabilities in a single

catheter. The IVUS part of the device u tilizes sound to interroga te the artery and,

according to the applicant, provides an image of the size of the plaque, the degree of

stenosis produced by the plaque, the size of th e artery and the degree of expansion of the

stent. The device consists of a single-use catheter, a console and a “single pullback with

the artery.” The device is intended to be used in patients already undergoing coronary

stenting.

With respect to the newness criterion, we note that this device is not currently

approved by the FDA, but the manufacturer anticipates that FDA approval will be

granted in the second quarter of 2010. We al so note that IVUS has existed for over

20 years. Therefore, IVUS, on its own, w ould not meet the newness criterion. The

applicant asserts that one difference from th e LipiscanTM product, for which it has also

submitted an application for ne w technology add-on payments, is that the catheter for the

combined product is filled with saline (which is required for transmission of sound). The

manufacturer has also stated that the co mbined device only requires the use of one

catheter, as opposed to two separate ones. The manufacturer asserts that the single-use

catheter for the combined technologies is onl y supplied by InfraRedX (the manufacturer

of LipiScanTM). However, we note that a physician could use LipiScanTM and IVUS as

two separate products in the sa me patient (through the use of two catheters) and still be

able to obtain the INIRS image and the ultrasound that are achieved through the

combined product albeit separately.CMS-1498-P 298

We welcome public comments regarding whether the combined LipiScanTM IVUS

device should be considered to be “new” as of the date of the existing LipiScanTM device

received FDA approval or whether it should be considered new from the FDA approval

date for LipiScanTM IVUS (should such an a pproval be granted). We also welcome

public comments regarding whether LipiScanTM IVUS, as a combined technology, should

be considered to be substan tially similar to each individual technology separately as of

the date that each separate technology re ceived FDA approval (or the date that each

technology became available on the market, if either technology was not available on the

market until a date after FDA approval).

As stated above, in making a determinati on of substantial similarity, we consider

the following: (1) whether a product uses the same or similar mechanism of action to

achieve a therapeutic action; (2) whether a produ ct is assigned to the same or a different

DRG; and (3) whether new use of a technology involves tr eatment of the same or similar

type of disease and the same or similar patient population. In the FY 2010 IPPS/RY

2010 LTCH PPS final rule, we stated that “due to the complexity of issues regarding the

substantial similarity component of the newness criterion, it ma y be necessary to exercise

flexibility when considering whether technolog ies are substantially similar to one another

(74 FR 43813).

We note that the LipiScanTM IVUS device is identified by ICD-9-CM procedure

codes 38.23 (Intravascular spectroscopy) and 00.24 (Intravascular imaging of coronary

vessels). Cases involving the use of this device generally map to MS-DRG 246

(Percutaneous Cardiovascular Procedures with Drug-Eluting Stent(s) with MCC or 4+CMS-1498-P 299

Vessels/Stents); MS-DRG 247 (Percutaneous Cardiovascul ar Procedures with DrugEluting Stent(s) without MCC); MS-DRG 248 (Percutaneous Cardiovascular Procedures

with Non-Drug-Eluting Stent(s) with MCC or 4+ Vessels/S tents); MS-DRG 249

(Percutaneous Cardiovascular Procedures with Non-Drug -Eluting Stent(s) without

MCC); MS-DRG 250 (Percutaneous Cardiovascular Procedures without Coronary Artery

Stent with MCC); and MS-DRG 251 (Percutane ous Cardiovascular Procedures without

Coronary Artery Stent without MCC).

In an effort to demonstrate that th e technology meets the cost criterion, the

applicant used the FY 2010 final rule Afte r Outliers Removed (AOR) file (posted on the

CMS Web site) to identify cases potentially eligible for LipiscanTM IVUS. The applicant

believes that every case within MS-DRG s 246, 247, 248, 249, 250, and 251 is eligible for

LipiscanTM IVUS. In addition, the applican t believes that Lipi scanTM IVUS will be

evenly distributed across patients in each of those six MS-DRGs (16.7 percent within

each MS-DRG). Using data from the AOR file, the applicant found the average

standardized charge per case fo r MS-DRGs 246, 247, 248, 249, 250, and 251 was

$67,531, $44,485, $62,936, $40,149, $59,416, and $38,864 respectively, equating to a

case-weighted average standardized char ge per case of $52,230 (calculation performed

using unrounded numbers). The applicant i ndicated that the case-weighted average

standardized charge per case does not incl ude charges related to LipiscanTM IVUS.

Therefore, it is necessary to add the charges related to the device to the average

case-weighted standardized charge per case to evaluate the cost threshold criterion.

Although the applicant submitted data related to th e estimated cost per case of LipiscanTMCMS-1498-P 300

IVUS, the applicant stated that the cost of the device is proprietary information. The

applicant analyzed Hospital Cost Report Information System (“HCRIS”) data from 2008

to determine the charges related to the device. Specifically, the applicant searched for the

100 cardiac catheterization labs that had the hi ghest volume of cases in the United States.

Based on the HCRIS data from these 100 labs, the applicant determined the mean

cost-to-charge ratio was 0.188 with a mark- up of 532 percent yielding a charge of

$15,957 for LipiscanTM IVUS. (We note that this estimate of charges related to the

LipiscanTM IVUS is significantly higher than the estimate of charges related to the

LipiscanTM device.) Adding the estimated average charge related for the device to the

case-weighted standardized charge per case (based on the case distribution from the

applicant’s FY 2010 AOR analysis) results in a total case-weighted average standardized

charge per case of $68,190 ($52,230 plus $15,960). Using the FY 2011 thresholds

published in Table 10 of the FY 2011 IPPS/RY 2010 LTCH PPS final rule

(74 FR 44173), the case-weighted threshold for MS-DRGs 246, 247, 248, 249, 250, and

251 is $56,487 (all calculations above were performed using unrounded numbers).

Because the applicant’s calculation of the total case-weighted average standardized

charge per case for the applicable MS-DRGs exceeds the case-weighted threshold

amount, the applicant maintains that Li piscanTM IVUS meets the cost criterion.

We note that in the applicant’s analys is of the cost criterion, instead of

determining the case-weighted average standardized charge per case and the

case-weighted threshold amount based on the actual number of cases from the FY 2010

AOR file in the applicable MS-DRGs that are eligible for the LipiscanTM IVUS, theCMS-1498-P 301

applicant’s analysis assumed an even distribu tion of patients in the applicable MS-DRGs.

However, the data from the FY 2010 AOR file shows a varied distribution of cases in

each of the applicable MS-DRGs. We believe the more appropriate way to determine the

case-weighted average standardized charge per case and the case-weighted threshold

amount for evaluating the cost criterion is to use the actual distribution of cases in the

applicable MS-DRGs based on the number of cases from the AOR file because this

would more accurately reflect the number and type of Medicare cases typically treated in

the applicable MS-DRGs. Moreover, this would better conform with the applicant’s

assertion that that the probability of use of LipiscanTM is the same in each of those six

MS-DRGs. Using data from the FY 2010 AOR file, for MS-DRGs 246, 247, 248, 249,

250, and 251, there were 30,411, 147,952, 19,736, 67,964, 8,184, and 38,091 cases,

respectively. Using this case distribution and the average standardized charge per case

for MS-DRGs 246, 247, 248, 249, 250, and 251 from the application (that is, $67,531,

$44,485, $62,936, $40,149, $59,416, and $38,864, respectively, as stated above), the

case-weighted average standardized char ge per case is $46,657. As the applicant

indicated above, the case-weighted average standardized charge per case does not include

charges related to LipiscanTM IVUS. Therefore, it is necessary to add the average charge

of $15,960 related to the device to the case-w eighted standardized charge per case to

evaluate the cost threshold criterion. Adding the estimated charges related to the device

to the case-weighted average standardized charge per case (based on the case distribution

from the FY 2010 AOR final rule file) results in a total case-weighted average

standardized charge per case of $62,617 ($46,657 plus $15,960). Using the FY 2011CMS-1498-P 302

thresholds published in Table 10 of the FY 2010 IPPS/RY 2010 LTCH PPS final rule

(74 FR 44173) and the actual case distribu tion from the AOR file, the case-weighted

threshold for MS-DRGs 246, 247, 248, 249, 250, and 251 is $52,700 (all calculations

above were performed using unrounded numbers). Because this alternative calculation of

total case-weighted average standardized charge per case for the applicable MS-DRGs

exceeds the case-weighted threshold amount, it appears that LipiscanTM IVUS would

meet the cost criterion.

In addition to the analysis above, the applicant searched the FY 2008 MedPAR

file for cases potentially eligible for use of the LipiscanTM IVUS. Because the technology

can potentially be used for all cases w ithin MS-DRGs 246 through 251, the applicant

searched the FY 2008 MedPAR file for all ca ses within these MS-DRGs. The applicant

found 30,265 cases (or 9.7 percent of all cases) in MS-DRG 246; 147,695 cases (or 47.4

percent of all cases) in MS-DRG 247; 19,642 cases (or 6.3 percent of all cases) in

MS-DRG 248; 67,840 cases (or 21.8 percent of all cases) in MS-DRG 249; 8,120 cases

(or 2.6 percent of all cases) in MS-DRG 250; and 38,022 cases (or 12.2 percent of all

cases) in MS-DRG 251. The average stan dardized charge per case was $66,958 for

MS-DRG 246, $50,192 for MS-DRG 247, $72,099 for MS-DRG 248, $45,086 for

MS-DRG 249, $71,355 for MS-DRG 250, and $4 6,141 for MS-DRG 251, equating to a

case-weighted average standardized charge per case of $45,964.

Similar to above, the average standard ized charge per case does not include

charges related to the LipiscanTM IVUS; therefore, it is necessary to add the charges

related to the device to the average standardized charge per case in evaluating the costCMS-1498-P 303

threshold criterion. Although the applicant sub mitted data related to the estimated cost of

LipiscanTM IVUS per case, the applicant noted th at the cost of the device was proprietary

information. Based on 2008 HCRIS data from the cardiac catheterization laboratories for

all IPPS hospitals, the applicant determined a mean cost-to-charge ratio of 0.246 with a

markup of 351 percent, yielding a charge of $10,543 for LipiscanTM IVUS. Assuming

that the LipiscanTM IVUS device was marked up 351 percent, the total case-weighted

average standardized charge per case for cases involving the use of LipiscanTM IVUS

would be $56,507 ($45,964 plus $10,543) across MS-DRGs 246 through 251.

Using the FY 2011 thresholds published in Table 10 of the FY 2010 IPPS/RY

2010 LTCH PPS final rule (74 FR 44173), the case-weighted threshold for MS-DRGs

246, 247, 248, 249, 250, and 251 is $52,692 (all calcula tions above were performed using

unrounded numbers). Because the applicant’s calculation of the total case-weighted

average standardized charge per case for the applicable MS-DRGs exceeds the

case-weighted threshold amount, the applicant maintains that LipiscanTM IVUS meets the

cost criterion. We invite public comment on whether or not Lipis canTM IVUS meets the

cost criterion.

With regard to substantial clinical improvement, the applicant asserts that

LipiScanTM IVUS lends all the same benefits of LipiScanTM by itself (see discussion of

LipiScanTM with respect to clinical improveme nt in the above application analysis) and

also gives added benefits of IVUS. Specifica lly, the applicant maintains that LipiScanTM

IVUS is superior to perfusion imaging and coronary angiography because those

procedures only provide information about th e lumen, but not the wall of the vessel. TheCMS-1498-P 304

applicant asserts that it is superior to IVUS (by itself) because IVUS alone cannot

identify plaque composition. The applicant further maintains that LipiScanTM IVUS

provides a substantial clini cal benefit over Optical Coherence Tomography (OCT)

because OCT cannot be used if blood is present in the field of view and identification of

lipid by OCT is “time-consuming with a requi rement for expert interpretation.” In

contrast, “the LipiScanTM signal is available immediately after the coronary pullback and

does not require expe rt interpretation.”

The applicant also states that LipiScanTM IVUS makes it possible to find the lipid

core plaques that are strongly associated with peri-stenting MI and adverse events post

MI that current methods of diagnosis fail to find.

Finally, the applicant asserts that LipiScanTM IVUS affects the management of the

patient by improving the safety and efficacy of stenting. Further, the applicant states that

while stenting has steadily improved, its results are not optimal in approximately 30% of

cases due to 3 problems: (1) peri-stenting MI due to embolization of lipid core contents

and side branch occlusion; (2) major advers e coronary events (MACE) post stenting from

difficulties at the stented site; and (3) MACE post stenting for non-stented vulnerable

sites.”

The applicant described three case studies where each of the above problems were

addressed by use of the LipiScanTM IVUS. LipiScanTM IVUS achieves its utility to

differentiate lipid core plaque from fibrotic plaque, a differe ntiation that cannot be made

by angiography or grayscale IVUS.CMS-1498-P 305

The applicant referenced the “700 pa tient PROSPECT Study” which was

presented at Transcatheter Cardiovascular Therapeutic Conference in September 2009

and found that 20.4 percent of patients experience a new event in the 3.4 years following

stenting. The applicant pointed to that finding as evidence that there is a need for

improved safety and efficacy of stenting and maintained that LipiscanTM offers clinicians

the ability to make decisions that result in such improvements.

The PROSPECT (Providing Regional Observa tions to Study Predictors of Events

in the Coronary Tree) study is a cohort stud y of patients with acute coronary syndrome

who underwent percutaneous coronary angiopl asty and stenting (percutaneous coronary

intervention). Following the procedure, angiography and IVUS were performed. If a

patient had a subsequent event, a new angi ogram and IVUS image were obtained and

compared to the original results. The investigators reported that “angiographically mild

lesions with certain morphologic features on grayscale and IVUS present with a 3 year

cardiac event rate of 17%, versus other mo rphologies (indistinguis hable by conventional

angiograms) with three year event risks of less than 1%.” We are concerned that with

this type of study design, it is not possible to determine whether the information for the

IVUS image would have altered the angioplas ty and stenting procedures since the images

were collected after the procedure. The results are suggestive, but a prospective study is

needed to determine the clinical utility of IVUS and whether use of IVUS leads to

changes in clinical practice or improvements in health outcomes. The PROSPECT study

generated a hypothesis that use of IVUS may help determine which plaques are

vulnerable to future events but further clin ical research is needed to confirm thisCMS-1498-P 306

hypothesis. We note that the PROSPECT study was presented at the Transcatheter

Cardiovascular Therapeutics Conference in 2009, but that the study results have yet to be

published in a peer reviewed journal. We al so note that methods and conclusions from a

study may change from what was verbally pr esented during the peer review process that

is required to publish the study results.

We are concerned that, in the LipiSca nTM IVUS application, the applicant has

generally repeated the statements made re garding use of LipiScanTM alone and has not

provided information that indicates that comb ined use of LipiSca nTM plus IVUS offers

additional clinical benefit. Indeed, we note that most of the studies that were presented in

an effort to support that LipiScanTM by its elf was a substantial clinical improvement,

were also included to support the LipiScanTM IVUS application. The applicant did not

present any published peer-reviewed journal articles that were specifically related to the

clinical merits of the combined LipiScanTM IVUS device.

We welcome public comments on whethe r the LipiScanTM IVUS represents a

substantial clinical improve ment over existing technologie s as well as public comments

on what is the appropriate comparison for LipiScanTM IVUS.

As we noted at the end of the disc ussion of the LipiScanTM application, we

received approximately nine public co mments on both the LipiScanTM and the

LipiScanTM IVUS applications.

Comment : Several commenters acknowledged that LipiScanTM IVUS is not yet

approved by the FDA, but stated that th ey would support the LipiScanTM IVUS being

approved for new technology add-on payments should FDA approval be granted. WithCMS-1498-P 307

regard to the clinical merits of LipiS canTM IVUS, the commenters stated that the

LipiScanTM IVUS afforded all the same di agnostic abilities of the LipiScanTM, but also

provided the added benefit of IVUS, which ha s “been used in patients for over 20 years

[and] is already supported by the [American College of Cardiologists and the American

Hospital Association] for usage in stenting.”

One commenter stated that once the LipiScanTM IVUS becomes approved by the

FDA, he plans to use it in all of his patie nts who need IVUS imaging “because of the

wealth of added information regarding the pres ence of lipid laden pl aque, a harbinger of

myocardial infarction and sudden death.”

Response : We thank the commenters for their comments. However, we note that

unless the technology is approved by the F DA by July 1, 2010, it cannot be approved for

add-on payments in FY 2011 since it would not be considered “new.” Should the

technology receive FDA approval by July 1, 2010, we will take these comments into

consideration in our review of the applic ation for new technology add-on payments for

FY 2011.

III. Proposed Changes to the Hospital Wage Index for Acute Care Hospitals

A. Background

Section 1886(d)(3)(E) of the Act require s that, as part of the methodology for

determining prospective payments to hospitals, the Secretary must adjust the standardized

amounts "for area differences in hospital wage levels by a factor (established by the

Secretary) reflecting the relative hospital wage level in the geographic area of the hospital

compared to the national average hospital wage level." In accordance with the broadCMS-1498-P 308

discretion conferred under the Act, we curren tly define hospital labor market areas based

on the definitions of statistical areas esta blished by the Office of Management and

Budget (OMB). A discussion of the propos ed FY 2011 hospital wage index based on the

statistical areas, including OMB’s revised definitions of Metropolitan Areas, appears

under section III.C. of this preamble.

Beginning October 1, 1993, section 1886(d )(3)(E) of the Act requires that we

update the wage index annually. Furthermore, this section of the Act provides that the

Secretary base the update on a survey of wa ges and wage-related costs of short-term,

acute care hospitals. The survey must excl ude the wages and wage-related costs incurred

in furnishing skilled nursing services. This provision also requires us to make any

updates or adjustments to the wage index in a manner that ensures that aggregate

payments to hospitals are not affected by th e change in the wage index. The proposed

adjustment for FY 2011 is discussed in sec tion II.B. of the Addendum to this proposed

rule.

As discussed below in section III.I. of this preamble, we also take into account the

geographic reclassification of hospitals in accordance with sections 1886(d)(8)(B) and

1886(d)(10) of the Act when calculating IPPS payment amounts. Under section

1886(d)(8)(D) of the Act, the Secretary is re quired to adjust the standardized amounts so

as to ensure that aggregate payments under the IPPS after implementation of the

provisions of sections 1886(d)(8)(B) and (C) and 1886(d)(10) of the Act are equal to the

aggregate prospective payments that would ha ve been made absent these provisions. TheCMS-1498-P 309

proposed budget neutrality adjustment for FY 2011 is discussed in section II.A.4.b. of the

Addendum to this proposed rule.

Section 1886(d)(3)(E) of the Act also pr ovides for the collection of data every

3 years on the occupational mix of employee s for short-term, acute care hospitals

participating in the Medicare program, in order to construct an occupational mix

adjustment to the wage index. A discussion of the occupational mix adjustment that we

are proposing to apply beginning October 1, 2010 (the proposed FY 2011 wage index)

appears under section III.D. of this preamble.

B. Wage Index Reform

1. Wage Index Study Required under the MIEA-TRHCA

a. Legislative Requirement

Section 106(b)(1) of the MIEA-TRHCA (Pub. L. 109-432) required MedPAC to

submit to Congress, not later than June 30, 2007, a report on the Medicare wage index

classification system applied under the Medicare IPPS. Section 106(b) of

MIEA-TRHCA required the report to include any alternatives that MedPAC recommends

to the method to compute the wage inde x under section 1886(d)(3)(E) of the Act.

In addition, section 106(b)(2) of the MI EA-TRHCA instructed the Secretary of

Health and Human Services, taking into account MedPAC’s recommendations on the

Medicare wage index classification system, to include in the FY 2009 IPPS proposed rule

one or more proposals to revise the wage index adjustment applied under section

1886(d)(3)(E) of the Act for purposes of the IPPS. The Secretary was also to consider

each of the following:CMS-1498-P 310

● Problems associated with the definiti on of labor markets for the wage index

adjustment.

● The modification or elimination of geographic reclassifications and other

adjustments.

● The use of Bureau of Labor of St atistics (BLS) data or other data or

methodologies to calculate relative wages for each geographic area.

● Minimizing variations in wage inde x adjustments between and within MSAs

and statewide rural areas.

● The feasibility of applying all compone nts of CMS’ proposal to other settings.

● Methods to minimize the volatility of wage index adjustments while

maintaining the principl e of budget neutrality.

● The effect that the implementation of the proposal would have on health care

providers on each region of the country.

● Methods for implementing the proposal(s), including methods to phase in such

implementations.

● Issues relating to occupational mix such as staffing practices and any evidence

on quality of care and patient safety in cluding any recommendation for alternative

calculations to the occupational mix.

In the FY 2009 IPPS final rule (73 FR 48563 through 48567), we discussed the

MedPAC’s study and recommendations, the CM S contract with Acumen, L.L.C. for

assistance with impact analysis and study of wage index reform, and public comments we

received on the MedPAC recommendations and the CMS/Acumen study and analysis.CMS-1498-P 311

b. Interim and Final Reports on Results of Acumen's Study

(1) Interim Report on Impact Analysis of Using MedPAC's Recommended Wage Index

In the FY 2009 IPPS final rule (73 FR 48566 through 48567), we discussed the

analysis conducted by Acumen comparing use of the MedPAC recommended wage

indices to the current CMS wage index. We re fer readers to section III.B.1.e. of that final

rule for a full discussion of the impact analysis as well as to Acumen's interim report

available on the Web site: http://www.acumenllc .com/reports/cms

. (2) Acumen’s Final Report on Analysis of the Wage Index Data and Methodology

Acumen’s final report addressing the issues in section 106(b)(2) of the

MIEA-TRHCA is divided into two part s. In the FY 2010 IPPS/RY 2010 LTCH PPS

final rule (74 FR 43824), we provi ded a description of Acumen’s analyses for both parts.

The first part of Acumen’s final report analyz ed the strengths and weaknesses of the data

sources used to construct the MedPAC and CMS indexes. The first part of the report was

published on Acumen’s Web site after th e publication of the FY 2010 IPPS/RY 2010

LTCH PPS proposed rule. In its conclusion, Acumen suggested that MedPAC’s

recommended methods for revising the wage index represented an improvement over the

existing methods, and that the BLS data shoul d be used so that the MedPAC approach

can be implemented.

The second part of Acumen’s final re port focuses on the methodology of wage

index construction and c overs issues related to the defi nition of wage areas and methods

of adjusting for differences among neighbor ing wage areas, as well as reasons for

differential impacts of shifting to a new inde x. Acumen published the second part of itsCMS-1498-P 312

final report in March 201 0 on its Web site at: http:/www./acumenllc.com/reports/cms . In

particular, the report analyzes MedPAC’s recommended method of improving upon the

definition of the wage areas used in the cu rrent wage index. MedPAC’s method first

blends MSA and county-level wages and then implements a “smoothing” step that limits

differences in wage index values between ad jacent counties to no more than 10 percent.

Acumen found MedPAC’s method to be an improvement over the current wage index

construct. However, althoug h MedPAC’s method diminishe s the size of differences

between adjacent areas, Acumen suggested that MedPAC’s method does not guarantee an

accurate representation of a hospital labor ma rket and would not necessarily eliminate or

reduce hospitals’ desire to reclassify for a higher wage index. Acumen recommended

further exploration of labor market area defi nitions using a wage area framework based

on hospital-specific characteristics, such as commuting times from hospitals to

population centers, to construct a more accurate hospital wage index. Acumen suggested

that such an approach offers the greatest potential for replacing or greatly reducing the

need for hospital reclassifications and exceptions.

We indicated in the FY 2009 IPPS final rule (73 FR 48566) that, in developing

any proposal(s) for additional wage index reform that may be included in the FY 2010

IPPS proposed rule, we would consider all of the public comments on the MedPAC

recommendations that we had received in that proposed rulemaking cycle, along with the

interim and final reports to be submitted to us by Acumen. As Acumen’s study was not

complete at the time of issuance of the FY 2010 IPPS/RY 2010 LTCH PPS proposed

rule, we did not propose any additional chan ges to the hospital wage index for theCMS-1498-P 313

FY 2010 IPPS. We also are not proposing any additional changes regarding reforming

the wage index for the FY 2011 IPPS. We welcome comments regarding the second part

of Acumen’s final report.

2. FY 2009 Policy Changes in Response to Requirements under Sec tion 106(b) of the

MIEA-TRHCA

To implement the requirements of s ection 106(b) of the MIEA-TRHCA and

respond to MedPAC’s recommendations in its June 2007 report to Congress, in the

FY 2009 IPPS final rule (73 FR 48567 through 48574), we made the following policy

changes relating to the hospital wage index. (We refer readers to the FY 2009 IPPS final

rule for a full discussion of the basis for the proposals, the public comments received, and

the FY 2009 final policy.) In the FY 2010 IPPS final rule (74 FR 43825), we reiterated

these policy changes, especially as they related to the FY 2010 IPPS.

a. Reclassification Average Hourly Wage Comparison Criteria

In the FY 2009 IPPS final rule, we adopted the policy to adjust the reclassification

average hourly wage standard, comparing a re classifying hospital’s (or county hospital

group’s) average hourly wage relative to the average hourly wage of the area to which it

seeks reclassification. We provided for a phase -in of the adjustment over 2 years. For

applications for reclassifica tion for the first transitional year, FY 2010, the average hourly

wage standards were set at 86 percent for ur ban hospitals and group reclassifications and

84 percent for rural hospitals. For applicati ons for reclassification for FY 2011 (for which

the application deadline was September 1, 2009) a nd for subsequent fiscal years, the average

hourly wage standards are 88 percent for urban and group reclassifications and 86 percent forCMS-1498-P 314

rural hospitals (§§412.230, 412.232, and 412.234 of the re gulations). As stated above, these

policies were adopted in the FY 2009 IPPS final rule and are reflected in the wage index in

the Addendum to this proposed rule. We note that these criteria were recently changed by

provisions of section 3137(c) of the PPACA (Pub. L. 111-148). We will address the changes

made by Pub. L. 111-148 in a sepa rate rulemaking document in the Federal Register

. b. Budget Neutrality Adjustment for the Rural and Imputed Floors

In the FY 2009 IPPS final rule (73 FR 48574 through 48575), we adopted State level

budget neutrality (rather than the national bud get neutrality adjustment) for the rural and

imputed floors, effective beginning with the FY 2009 wage index. The transition from the

national budget neutrality adjus tment to the State level budge t neutrality adjustment was

phased in over a 3-year period. In FY 2009, hos pitals received a blended wage index that

was 20 percent of a wage index with the State level rural and imputed floor budget neutrality

adjustment and 80 percent of a wage index with the national budget neutrality adjustment. In

FY 2010, the blended wage index reflects 50 pe rcent of the State level adjustment and

50 percent of the national adjustment. In FY 2011, as reflected in the IPPS wage index in

this proposed rule, the adjustment will be completely transitioned to the State level

methodology.

In the FY 2009 IPPS final rule, we incorporated this policy in our regulation at

§412.64(e)(4). Specifically, the regulations speci fy that CMS makes an adjustment to the

wage index to ensure that aggregate payments after implementation of the rural floor under

section 4410 of the Balanced Budget Act of 1997 (Pub. L. 105-33) and the imputed floor

under §412.64(h)(4) are made in a manner that ensu res that aggregate payments to hospitalsCMS-1498-P 315

are not affected and that, beginning Oc tober 1, 2008, CMS would transition from a

nationwide adjustment to a statewide adjustment, with a statewide adjustment fully in place

by October 1, 2010.

As stated above, these policies for the ru ral and imputed floors were adopted in the

FY 2009 IPPS final rule and are reflected in the wage index in the Addendum to this

proposed rule. However, these policies were r ecently changed by the provisions of section

3141 of the PPACA (Pub. L. 111-148). We will address the provisions of section 3141 of

Pub. L. 111-148 in a separate rulemaking document in the Federal Register

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

The wage index is calculated and assigned to hospitals on the basis of the labor

market area in which the hospital is located. In accordance with the broad discretion

under section 1886(d)(3)(E) of the Act, beginni ng with FY 2005, we define hospital labor

market areas based on the Core-Based Sta tistical Areas (CBSAs) established by OMB

and announced in December 2003 (69 FR 49027) . For a discussion of OMB's revised

definitions of CBSAs and our implementation of the CBSA de finitions, we refer readers

to the preamble of the FY 2005 IPPS final rule (69 FR 49026 through 49032).

As with the FY 2010 final rule, in this FY 2011 proposed rule, we are proposing

to provide that hospitals receive 100 percen t of their wage index based upon the CBSA

configurations. Specifically, for each hosp ital, we are proposing to determine a wage

index for FY 2011 employing wage index da ta from hospital cost reports for cost

reporting periods beginning during FY 2007 and using the CBSA labor market

definitions. We consider CBSAs that ar e MSAs to be urban, and CBSAs that areCMS-1498-P 316

Micropolitan Statistical Areas as well as areas ou tside of CBSAs to be rural. In addition,

it has been our longstanding policy that where an MSA has been divided into

Metropolitan Divisions, we consider the Metropolitan Division to comprise the labor

market areas for purposes of calculating th e wage index (69 FR 49029) (regulations at

§412.64(b)(1)(ii)(A)).

On December 1, 2009, OMB announced change s to the principal cities and, if

applicable, titles of a number of CBSAs and Metropolitan Di visions (OMB Bulletin No.

10-2). The changes to the principal cities and titles are as follows:

● San Marcos, TX qualifies as a new principal city of the Austin-Round Rock,

TX CBSA. The new title is Austin-Round Rock-San Marcos, TX CBSA.

● Delano, CA qualifies as a new principa l city of the Bakersfield, CA CBSA.

The new title: Bakersfi eld-Delano, CA CBSA.

● Conroe, TX qualifies as a new pr incipal city of the Houston-Sugar

Land-Baytown, TX CBSA. The CBSA title is unchanged.

● North Port, FL qualifies as a new pr incipal city of the Bradenton-SarasotaVenice, FL CBSA. The new title is North Port-Bradenton-Sarasota, FL CBSA. The new

code is CBSA 35840.

● Sanford, FL qualifies as a new principal city of the Orlando-Kissimmee, FL

CBSA. The new title is Orla ndo-Kissimmee-Sanford, FL CBSA.

● Glendale, AZ qualifies as a new princi pal city of the Phoe nix-Mesa-Scottsdale,

AZ CBSA. The new title is Phoenix-Mesa-Glendale, AZ CBSA.CMS-1498-P 317

● Palm Desert, CA qualifies as a new principal city of the Riverside-San

Bernardino-Ontario, CA CBSA. The CBSA title is unchanged.

● New Braunfels, TX qualifies as a ne w principal city of the San Antonio, TX

CBSA. The new title is San Antonio-New Braunfels, TX CBSA.

● Auburn, WA qualifies as a new principa l city of the Seattle-Tacoma-Bellevue,

WA CBSA. The CBSA title is unchanged.

The changes to titles resulting from changes to the order of principal cities based

on population are as follows:

● Rockville, MD replaces Frederick, MD as the second most populous principal

city in the Bethesda-Frederick-Rockville, MD Metropolitan Division. The new title is

Bethesda-Rockville-Frederic k, MD Metropolitan Division.

● Rock Hill, SC replaces Concord, NC as the third most populous principal city

in the Charlotte-Gastonia-Concord, NC-SC CBSA. The new title is Charlotte-GastoniaRock Hill, NC-SC CBSA.

● Joliet, IL replaces Naperville, IL as the second most populous principal city in

the Chicago-Naperville-Joliet, IL Metropolita n Division. The new title is Chicago-JolietNaperville, IL Metropolitan Division.

● Crestview, FL replaces Fort Walton Beach, FL as the most populous principal

city in the Fort Walton Beach-Crestvi ew-Destin, FL CBSA. The new title is

Crestview-Fort Walton Beach-Desti n, FL CBSA. The new code is 18880.CMS-1498-P 318

● Hillsboro, OR replaces Beav erton, OR as the third most populous principal city

in the Portland-Vancouver-Beavert on, OR-WA CBSA. The new title is

Portland-Vancouver-Hill sboro, OR-WA CBSA.

● Steubenville, OH replaces Weirton, WV as the most populous principal city in

the Weirton-Steube nville, WV-OH CBSA. The new title is Steubenville-Weirton,

OH-WV CBSA. The new CBSA code is 44600.

The OMB bulletin is available on the OMB Web site at

http://www.whitehouse.gov/OMB - go to “Agency Information” and click on “Bulletins”.

CMS will apply these changes to the IPPS beginning October 1, 2010.

D. Proposed Occupational Mix Adjustment to the Proposed FY 2011 Wage Index

As stated earlier, section 1886(d)(3)(E) of the Act provides for the collection of

data every 3 years on the occupational mix of employees for each short-term, acute care

hospital participating in the Medicare program, in order to construct an occupational mix

adjustment to the wage index, for app lication 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 register ed nurses, licensed practical nurses, nursing

aides, and medical assistants for the purpose of providing nursing care to their patients.

The varying labor costs associated with these choices reflect hospital management

decisions rather than geographic di fferences in the costs of labor.CMS-1498-P 319

1. Development of Data for the Proposed FY 2011 Occupational Mi x Adjustment Based

on the 2007-2008 Occupational Mix Survey

As provided for under section 1886(d)(3)(E) of the Act, we collect data every

3 years on the occupational mix of employees for each short-term, acute care hospital

participating in the Medicare program.

For the FY 2010 hospital wage index, we used occupational mix data collected on

a revised 2007-2008 Medicare Wage Index Occupational Mix Survey (the 2007-2008

survey) to compute the occupational mix adju stment for FY 2010. (We refer readers to

the FY 2010 IPPS final rule (74 FR 43827) for a detailed discussion of the 2007-2008

survey.) Again, for the proposed FY 2011 hospital wage index, we used data from the

2007-2008 survey (including revised data fo r 45 hospitals) to compute the proposed

FY 2011 adjustment.

2. New 2010 Occupational Mix Survey for the FY 2013 Wage Index

As stated earlier, section 304(c) of Pub. L. 106-554 amended section

1886(d)(3)(E) of the Act to require CMS to co llect data every 3 years on the occupational

mix of employees for each short-term, acute care hospital participating in the Medicare

program. We used occupational mix data collected on the 2007-2008 survey to compute

the occupational mix adjustment for FY 2010 and the proposed FY 2011 wage index in

this proposed rule. We also plan to use the 2007-2008 survey data for the FY 2012 wage

index. Therefore, a new measurement of occupational mix will be required for FY 2013.

Since we implemented the 2007-2008 su rvey, we received several public

comments suggesting further improvements to the occupational mix survey. Specifically,CMS-1498-P 320

commenters recommended that CMS use the calendar year (that is, January 1 through

December 31) as the 1-year reporting period instead of July 1 through June 30.

Commenters also requested that CMS allow for a 6-month period after the end of the

survey reporting period for hospitals to complete and submit their data to their Medicare

fiscal intermediaries and MACs. The commenters suggested that these changes will

allow hospitals more time to develop their occupational mix data before submitting the

data to the Medicare contract ors and CMS for use in development of the wage index.

Based on these comments, we revised th e occupational mix survey. The new 2010

survey (Form CMS-10079 (2010)) will provide for the collection of hospital-specific

wages and hours data for calendar year 2010 (that is, payroll periods ending between

January 1, 2010 and December 31, 2010) and will be applied beginning with the FY 2013

wage index.

On September 4, 2009, we published in the Federal Register a notice soliciting

comments on the proposed 2010 survey (74 FR 45860). The comment period for the

notice ended on November 3, 2009. After c onsidering the comments we received, we

made a few minor editorial changes and published the final 2010 survey in the Federal

Register on January 15, 2010 (75 FR 2548). Th e survey was approved by OMB on

February 26, 2010 (OMB control number 0938-09 07) and is available on the CMS Web

site at: http://www.cms.hhs.gov/AcuteInpatientPPS/WIFN/list.asp#TopOfPage , and

through the fiscal intermediaries/MACs. Hospitals are required to submit their completed

2010 surveys to their fiscal intermediari es/MACs by July 1, 2011. The preliminary,

unaudited 2010 survey data will be released in early October 2011, along with theCMS-1498-P 321

FY 2009 Worksheet S-3 wage data, for the FY 2013 wage index review and correction

process.

3. Calculation of the Proposed Occu pational Mix Adjustment for FY 2011

For FY 2011 (as we did for FY 2010), we are proposing to calculate the

occupational mix adjustment factor using the following steps:

Step 1 --For each hospital, determine the per centage of the total nursing category

attributable to a nursing subcategory by di viding the nursing subcategory hours by the

total nursing category's hours. Repeat this computation for each of the four nursing

subcategories: registered nurses; licensed pr actical nurses; nursing aides, orderlies, and

attendants; and medical assistants.

Step 2 --Determine a national average hourly rate for each nursing subcategory by

dividing a subcategory's total salaries for all hospitals in the occupational mix survey

database by the subcategory's total hours for all hospitals in the occupational mix survey

database.

Step 3 --For each hospital, determine an adjusted average hourly rate for each

nursing subcategory by multiplying the percentage of the total nursing category (from

Step 1) by the national average hourly rate for that nursing subcategory (from Step 2).

Repeat this calculation for each of the four nursing subcategories.

Step 4 --For each hospital, determine the adju sted average hourly rate for the total

nursing category by summing the adjusted average hourly rate (from Step 3) for each of

the nursing subcategories.CMS-1498-P 322

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 occupa tional mix adjustment factor for the

total nursing category by dividing the nati onal average hourly rate for the total nursing

category (from Step 5) by the hospital's adjusted average hourly rate for the total nursing

category (from Step 4).

If the hospital's adjusted average hourly rate is less than the national average

hourly rate (indicating the hospital employs a less costly mix of nursing employees), the

occupational mix adjustment factor is great er than 1.0000. If the hospital's adjusted

average hourly rate is greater than the nati onal average hourly rate, the occupational mix

adjustment factor is less than 1.0000.

Step 7 --For each hospital, calculate the occupational mix adjusted salaries and

wage-related costs for the total nursing category by multiplying the hospital's total

salaries and wage-related costs (from Step 5 of the unadjusted wage index calculation in

section III.G. of this preamble) 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 hos pital's total nursing category salaries by the

hospital's total salaries for "nursing and all other") and by the total nursing category's

occupational mix adjustment f actor (from Step 6 above).CMS-1498-P 323

The remaining portion of the hospital's total salaries and wage-related costs that is

attributable to all other employees of the hosp ital 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 cost s 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 th e unadjusted wage index calculation in

section III.G. of this preamble).

Step 9 --To compute the occupational mix adjusted average hourly wage for an

urban or rural area, sum the total occupati onal 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 adju sted salaries and wage-related costs by the

area's hours.

Step 10 --To compute the national occupati onal 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 theCMS-1498-P 324

national hours. The proposed FY 2011 occ upational mix adjusted national average

hourly wage is $34.9124.

Step 11 --To compute the occupational mix ad justed wage index, divide each

area's occupational mix adjusted averag e hourly wage (Step 9) by the national

occupational mix adjusted average hourly wage (Step 10).

Step 12 --To compute the Puerto Rico specific occupational mix adjusted wage

index, follow Steps 1 through 11 above. The proposed FY 2011 occupational mix

adjusted Puerto Rico-specific average hourly wage is $14.7567.

The table below is an illustrative example of the occupational mix adjustment.CMS-1498-P 325Example of Occupational Mix AdjustmentHospital AStep 1 Step 2 Step 3 Step 5 Step 6 in Step 7ProviderOccupationalMix HoursProviderOccupational MixSalariesProvider %bySubcategoryNational AHWsby SubcategoryProviderAdjustedAHWNationalAdjustedNurse AHWNurseOccupational MixAdjust-mentFactorProvider %by TotalRegistered Nurses1,642,129 18,125,76379.84%$40.00$31.94Licensed Practical Nurses andSurgical Technologists67,860 404,8223.30%$20.00$0.66Nursing Aides, Orderlies, &Attendants259,177 1,762,57912.60%$13.00$1.64Medical Assistants87,622 577,0454.26%$12.00$0.51Total Nurse Hours and Salaries 2,056,788 20,870,209$34.75 $27.00 0.7771 52.40%ALL OTHER5,000,000 $18,957,010Step 447.60%TOTAL 7,056,788 $39,827,219Wage Data from Cost ReportWages (From S-3, Parts II and III)$83,312,942.55Hours (From S-3, Parts II and III)3,836,299.60Hospital A Unadjusted AHW $21.72Nurse Occupational Mix Wages $33,925,838Step 7All Other Unadjusted Occupational Mix Wages $39,655,400Step 7Total Occupational Mix Wages $73,581,237Step 8Hospital A Final Occupational Mix Adjusted AHW $19.18Step 8CMS-1498-P 326Hospital BStep 1 Step 2 Step 3 Step 5 Step 6 in Step 7ProviderOccupationalMix HoursProviderOccupational MixSalariesProvider %bySubcategoryNational AHWsby SubcategoryProviderAdjustedAHWNationalAdjustedNurse AHWNurseOccupational MixAdjustmentFactorProvider %by TotalRegistered Nurses1,142,129 18,125,76372.43%$30.00$21.73Licensed PracticalNurses and Surgical Technologists67,860 404,8224.30%$20.00$0.86Nursing Aides, Orderlies, &Attendants279,177 1,762,57917.71%$13.00$2.30Medical Assistants87,622 577,0455.56%$12.00$0.67Total Nurse Hours and Salaries 1,576,788 20,870,209$25.56 $27.00 1.0564 52.40%ALL OTHER5,000,000 18,957,010Step 447.60%TOTAL 6,576,788 $39,827,219Wage Data from Cost ReportWages (From S-3, Parts II and III)$25,979,714Hours (From S-3, Parts II and III)1,097,585Hospital B Unadjusted AHW $23.67Nurse Occupational Mix Wages $14,381,144Step 7All Other Unadjusted Occupational Mix Wages $12,365,857Step 7Total Occupational Mix Wages $26,747,001Step 8Hospital B Final Occupational Mix Adjusted AHW $24.37Step 8Note:The numbers in this example are hypothetical, including all National AHW amounts.CMS-1498-P 327

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 th at are included in the proposed FY 2011 wage

index. For the FY 2007-2008 survey, the response rate was 90.4 percent.

In computing the proposed FY 2011 wage index, if a hospital did not respond to

the occupational mix survey, or if we determined that a hospital’s submitted data were

too erroneous to include in the wage inde x, we assigned the hospital the average

occupational mix adjustment for the labor mark et area. We believe this method had the

least impact on the wage index for other hos pitals in the area. For areas where no

hospital submitted data for purposes of calculating the proposed occupational mix

adjustment, we applied the national occupa tional mix factor of 1.0000 in calculating the

area’s proposed FY 2011 occupational mix adjust ed wage index. In addition, if a hospital

submitted a survey, but that survey data could not be used because we determine it to be

aberrant, we also assigned the hospital the average occupational mix adjustment for its

labor market area. For example, if a hosp ital’s individual nurse category average hourly

wages were out of range (that is, unusually hi gh or low), and the hospital did not provide

sufficient documentation to explain the aberrancy, or the hospital did not submit any

registered nurse salaries or hours data, we assigned the hospital the average occupational

mix adjustment for the labor market area in which it is located.

In calculating the average occupational mix adjustment factor for a labor market

area, we replicated Steps 1 through 6 of the calculation for the occupational mixCMS-1498-P 328

adjustment. However, instead of performin g these steps at the hospital level, we

aggregated the data at the labor market area level. In following these steps, for example,

for CBSAs that contain providers that did not submit occupational mix survey data, the

occupational mix adjustment factor rang ed from a low of 0.9252 (CBSA 17780, College

Station-Bryan, TX), to a high of 1.1199 (CBSA 40980, Saginaw-Saginaw Township

North, MI). Also, in computing a hospital’ s occupational mix adjusted salaries and

wage-related costs for nursing employees (Step 7 of the calculation), in the absence of

occupational mix survey data, we multiplied the hospital’s total salaries and wage-related

costs by the percentage of the area's total workers attributable to the area's total nursing

category. For FY 2011, there are 5 CBSAs (that include 5 hospitals) for which we did

not have occupational mix data for an y of its hospitals. The CBSAs are:

● CBSA 21940 Fajardo, PR (one hospital)

● CBSA 22140 (Farmington, NM (one hospital)

● CBSA 36140 Ocean City, NJ (one hospital)

● CBSA 41900 San German-Cabo Rojo, PR (two hospitals)

● CBSA 49500 Yauco, PR (one hospital)

Since the FY 2007 IPPS final rule, we have periodically discussed applying a

hospital-specific penalty to hospitals that fail to submit occupational mix survey data.

(71 FR 48013 through 48014; 72 FR 47314 through 47315; 73 FR 48580; and

74 FR 43832). During the FY 2008 rulemaking cycle, some commenters suggested a

penalty equal to a 1- to 2-pe rcent reduction in the hospital’ s wage index value or a set

percentage of the standardized amount. During the FY 2009 and FY 2010 rulemakingCMS-1498-P 329

cycles, several commenters reiterated their view that full participation in the occupational

mix survey is critical, and that CMS shoul d develop a methodology that encourages

hospitals to report occupational mix surv ey data but does not unfairly penalize

neighboring hospitals. We indicated in the FY 2010 IPPS/RY 2010 LTCH PPS proposed

rule that, while we were not proposing a pe nalty at that time, we would consider the

public comments we previously received, as well as any public comments on the

proposed rule, as we develop the proposed FY 2011 wage index.

To gain a better understanding of why some hospitals are not submitting the

occupational mix data, beginning with the new 2010 occupational mix survey (discussed

in section III.D.2. of this preamble), we will require hospitals that do not submit

occupational mix data to provide an explanation for not complying with the submission

requirements. We will instruct fiscal intermediaries/MACs to gather this information as

part of the FY 2013 wage index desk review pr ocess. We note that we reserve the right

to apply a different approach in future years, including potentially penalizing

nonresponsive hospitals.

E. Worksheet S-3 Wage Data for the Proposed FY 2011 Wage Index

The proposed FY 2011 wage index values are based on the data collected from

the Medicare cost reports submitted by hospitals for cost reporting periods beginning in

FY 2007 (the FY 2010 wage index was base d on data from cost reporting periods

beginning during FY 2006).CMS-1498-P 330

1. Included Categories of Costs

The proposed FY 2011 wage index include s the following categories of data

associated with costs paid under the IPPS (as well as outpatient costs):

• Salaries and hours from short-term, acu te care hospitals (including paid lunch

hours and hours associated with military leave and jury duty)

• Home office costs and hours

• Certain contract labor costs and hour s (which includes direct patient care,

certain top management, pha rmacy, laboratory, and nonteaching physician Part A

services, and certain contract indirect patient care services (as discussed in the FY 2008

final rule with comment period (72 FR 47315))

• Wage-related costs, including pensions and other deferred compensation costs.

We note that, for developing pension and defe rred compensation costs for purposes of the

wage index, CMS requires hospitals to co mply with the requirements in 42 CFR 413.100,

the Provider Reimbursement Manual (PRM), Part I, Sections 2140, 2141, and 2142, and

related Medicare program instructions, as disc ussed in the cost reporting instructions for

Worksheet S-3, Part II, Lines 13 through 20, and in the FY 2006 IPPS final rule

(70 FR 47369). On March 28, 2008, CMS published Revision 436, a technical

clarification to the PRM, Part I policies for pension and deferred compensation costs. In

addition, in November 2009, CMS release d, through a Joint Signature Memorandum,

instructions and a spreadsheet to assist hosp itals and Medicare contra ctors in determining

the annual allowable define d benefit pension cost fo r the FY 2011 wage index

(JSM/TDL-10061, 11-20-09, December 3, 2009). These instructions and spreadsheetCMS-1498-P 331

crosswalk the current interest, liability, and normal cost terminology found in the

Medicare reimbursement policie s under Section 2142 of the PRM, Part I to the new

terminology applicable unde r the Pension Protection Act of 2006. The spreadsheet and

instructions can be downloade d from the CMS Web site at

http://www.cms.hhs.gov/AcuteInpatientPPS/WI FN/itemdetail.asp?filterType=none&filte

rByDID=0&sortByDID=3&sortOrder=d escending&itemID=CMS1231035&intNumPerP

age=10

. 2. Excluded Categories of Costs

Consistent with the wage index methodology for FY 2009, the wage index for

FY 2010 also excludes the direct and overhead salaries and hours for services not subject

to IPPS payment, such as SNF services, home health services, costs related to GME

(teaching physicians and residents) and certifie d registered nurse anesthetists (CRNAs),

and other subprovider components that are not paid under the IPPS. The proposed

FY 2011 wage index also excludes the salari es, hours, and wage-related costs of

hospital-based rural health clinics (RHCs) , and Federally qualif ied health centers

(FQHCs) because Medicare pays for these costs outside of the IPPS (68 FR 45395). In

addition, salaries, hours, and wage-related costs of CAHs are excluded from the wage

index, for the reasons explained in the FY 2004 IPPS final rule (68 FR 45397).

3. Use of Wage Index Data by Providers Other Than Acute Care Hospitals under the

IPPS

Data collected for the IPPS wage index are also currently used to calculate wage

indices applicable to other providers, such as SNFs, home health agencies (HHAs), andCMS-1498-P 332

hospices. In addition, they are used for pros pective payments to IRFs, IPFs, and LTCHs,

and for hospital outpatient services. We note that, in the IPPS rules, we do not address

comments pertaining to the wage indices for non-IPPS providers, other than for LTCHs.

Such comments should be made in respons e to separate proposed rules for those

providers.

F. Verification of Worksheet S-3 Wage Data

The wage data for the proposed FY 2011 wage index were obtained from

Worksheet S-3, Parts II and III of the Medi care cost report for cost reporting periods

beginning on or after October 1, 2006, and before October 1, 2007. For wage index

purposes, we refer to cost reports during this period as the “FY 2007 cost report,” the

“FY 2007 wage data,” or the “FY 2007 data.” Instructions for completing Worksheet S3, Parts II and III are in the Provider Reim bursement Manual (PRM), Part II, sections

3605.2 and 3605.3. The data file used to constr uct the wage index includes FY 2007 data

submitted to us as of March 3, 2010. As in past years, we performed an intensive review

of the wage data, mostly through the use of edits designed to identify aberrant data.

We asked our fiscal intermediaries/MACs to revise or verify data elements that

resulted in specific edit failures. For the proposed FY 2011 wage index, we identified

and excluded 14 providers with data that wa s too aberrant to include in the proposed

wage index, although if data elements for some of these providers are corrected, we

intend to include some of these providers in the FY 2011 final wage index. We

instructed fiscal intermediaries/MACs to comp lete their data verifi cation of questionable

data elements and to transmit any changes to the wage data no later than April 14, 2010.CMS-1498-P 333

We believe all unresolved data elements will be resolved by the date the final rule is

issued. The revised data will be reflected in the FY 2011 IPPS final rule.

In constructing the proposed FY 2011 wage index, we included the wage data for

facilities that were IPPS hospitals in FY 2007, inclusive of those facilities that have since

terminated their participation in the program as hospitals, as long as those data did not

fail any of our edits for reasonableness. We believe that including the wage data for

these hospitals is, in general, appropriate to reflect the ec onomic conditions in the various

labor market areas during the re levant past period and to en sure that the current wage

index represents the labor market area's current wages as compared to the national

average of wages. However, we excluded th e wage data for CAHs as discussed in the

FY 2004 IPPS final rule (68 FR 45397). For this proposed rule, we removed 8 hospitals

that converted to CAH status between Fe bruary 16, 2009, the cut-off date for CAH

exclusion from the FY 2010 wage index, and February 15, 2010, the cut-off date for

CAH exclusion from the FY 2011 wage index. After removing hospitals with aberrant

data and hospitals that converted to CAH status, the proposed FY 2011 wage index is

calculated based on 3,513 hospitals.

In the FY 2008 final rule with comment period (72 FR 47317) and the FY 2009

IPPS final rule (73 FR 48582), we discussed our policy for allocating a multicampus

hospital’s wages and hours data, by full-time equivalent (FTE) staff, among the different

labor market areas where its campuses are lo cated. During the FY 2011 wage index desk

review process, we requested fiscal in termediaries/MACs to contact multicampus

hospitals that had campuses in different labor market areas to collect the data for theCMS-1498-P 334

allocation. The proposed FY 2011 wage index in this proposed rule includes separate

wage data for campuses of three multicampus hospitals.

For FY 2011, we are again allowing hospitals to use FTE or discharge data for the

allocation of a multicampus hospital's wage da ta among the different labor market areas

where its campuses are located. The Medi care cost report was updated in May 2008 to

provide for the reporting of FTE data by cam pus for multicampus hospitals. Because the

data from cost reporting periods that begin in FY 2008 will not be used in calculating the

wage index until FY 2012, a multicampus hospita l will still have the option, through the

FY 2011 wage index, to use either FTE or di scharge data for allocating wage data among

its campuses by providing the information fro m the applicable cost reporting period to

CMS through its fiscal intermediary/MAC. Two of the three multicampus hospitals

chose to have their wage data allocated by their Medicare discharge data for the FY 2011

wage index. One of the hospitals provided F TE staff data for the allocation. The average

hourly wage associated with each geographi cal location of a multicampus hospital is

reflected in Table 2 of the A ddendum to this proposed rule.

G. Method for Computing the Proposed FY 2011 Unadjusted Wage Index

The method used to compute the propos ed FY 2011 wage index without an

occupational mix adjustment follows:

Step 1 --As noted above, we are basing the proposed FY 2011 wage index on

wage data reported on the FY 2007 Medicare cost reports. We gathered data from each

of the non-Federal, short-term, acute care hosp itals for which data were reported on the

Worksheet S-3, Parts II and III of the Medi care cost report for the hospital's costCMS-1498-P 335

reporting period beginning on or after Oct ober 1, 2006, and before October 1, 2007. In

addition, we included data from some hospitals that had cost reporting periods beginning

before October 2006 and reporte d a cost reporting period covering all of FY 2007. These

data are included because no other data from these hospitals would be available for the

cost reporting period described above, and becau se particular labor ma rket areas might be

affected due to the omission of these hospita ls. However, we generally describe these

wage data as FY 2007 data. We note that, if a hospital had more than one cost reporting

period beginning during FY 2007 (for example, a hospital had two short cost reporting

periods beginning on or after October 1, 2006, and before October 1, 2007), we included

wage data from only one of the cost reporting periods, the longer, in the wage index

calculation. If there was more than one cost reporting period and th e periods were equal

in length, we included the wage data from the later period in the wage index calculation.

Step 2 --Salaries--The method used to com pute a hospital’s average hourly wage

excludes certain costs that are not paid under the IPPS. (We note that, beginning with

FY 2008 (72 FR 47315), we include Li nes 22.01, 26.01, and 27.01 of Worksheet S-3,

Part II for overhead services in the wage index. However, we note that the wages and

hours on these lines are not incorporated into Line 101, Column 1 of Worksheet A,

which, through the electronic cost reporting software, flows directly to Line 1 of

Worksheet S-3, Part II. Therefore, the first step in the wage index calculation for

FY 2011 is to compute a “revised” Line 1, by adding to the Line 1 on Worksheet S-3,

Part II (for wages and hours respectivel y) the amounts on Lines 22.01, 26.01, and 27.01.)

In calculating a hospital’s average salaries pl us wage-related costs, we subtract fromCMS-1498-P 336

Line 1 (total salaries) the GME and CRNA costs reported on Lines 2, 4.01, 6, and 6.01,

the Part B salaries reported on Lines 3, 5 and 5.01, home office salaries reported on

Line 7, and exclude salaries reported on Lines 8 and 8.01 (that is, direct salaries

attributable to SNF services, home health services, and other subprovider components not

subject to the IPPS). We also subtract from Line 1 the salaries for which no hours were

reported. To determine total sa laries plus wage-related cost s, we add to the net hospital

salaries the costs of contract labor for di rect patient care, certain top management,

pharmacy, laboratory, and nonteaching physicia n Part A services (Lines 9 and 10), home

office salaries and wage-rel ated costs reported by the hospital on Lines 11 and 12, and

nonexcluded area wage-related costs (Lines 13, 14, and 18).

We note that contract labor and home of fice salaries for which no corresponding

hours are reported are not included. In a ddition, wage-related costs for nonteaching

physician Part A employees (Line 18) are excluded if no corresponding salaries are

reported for those employees on Line 4.

Step 3 --Hours--With the exception of wage-related costs, for which there are no

associated hours, we compute total hours us ing the same methods as described for

salaries in Step 2.

Step 4 --For each hospital reporting both total overhead salaries and total overhead

hours greater than zero, we then allocate ove rhead costs to areas of the hospital excluded

from the wage index calculation. First, we determine the ratio of excluded area hours

(sum of Lines 8 and 8.01 of Worksheet S-3, Pa rt II) to revised total hours (Line 1 minus

the sum of Part II, Lines 2, 3, 4.01, 5, 5.01, 6, 6.01, 7, and Part III, Line 13 of WorksheetCMS-1498-P 337

S-3). We then compute the amounts of overhead salaries and hours to be allocated to

excluded areas by multiplying the above ratio by the total overhea d salaries and hours

reported on Line 13 of Worksheet S-3, Part III. Next, we compute the amounts of

overhead wage-related costs to be allocated to excluded areas using three steps: (1) we

determine the ratio of overhead hours (P art III, Line 13 minus the sum of lines 22.01,

26.01, and 27.01) to revised hours excludi ng the sum of lines 22.01, 26.01, and 27.01

(Line 1 minus the sum of Lines 2, 3, 4.01, 5, 5.01, 6, 6.01, 7, 8, 8.01, 22.01, 26.01, and

27.01). (We note that for the FY 2008 and subs equent wage index calculations, we are

excluding the sum of lines 22.01, 26.01, and 27.01 fro m the determination of the ratio of

overhead hours to revised hours because hospita ls typically do not provide fringe benefits

(wage-related costs) to contract personnel. Therefore, it is not necessary for the wage

index calculation to exclude overhead wage-relat ed costs for contract personnel. Further,

if a hospital does contribute to wage-rel ated costs for contracted personnel, the

instructions for Lines 22.01, 26.01, and 27.01 requir e that associated wage-related costs

be combined with wages on the respective contract labor lines.); (2) we compute

overhead wage-related costs by multiplying the overhead hours ratio by wage-related

costs reported on Part II, Lines 13, 14, and 18; and (3) we multiply the computed

overhead wage-related costs by the above excl uded area hours ratio. Finally, we subtract

the computed overhead salaries , wage-related costs, and hours associated with excluded

areas from the total salaries (plus wage-relate d costs) and hours derived in Steps 2 and 3.

Step 5 --For each hospital, we adjust the total salaries plus wage-related costs to a

common period to determine total adjusted salari es plus wage-related costs. To make theCMS-1498-P 338

wage adjustment, we estimate the percentage change in the employment cost index (ECI)

for compensation for each 30-day increment from October 14, 2003, through

April 15, 2005, for private industry hospital workers from the BLS’ Compensation and

Working Conditions . We use the ECI because it reflects the price increase associated

with total compensation (salaries plus fringes) rather than just the increase in salaries. In

addition, the ECI includes managers as well as other hospital workers. This methodology

to compute the monthly update factors uses actu al quarterly ECI data and assures that the

update factors match the actual qua rterly and annual percent changes. We also note that,

since April 2006 with the publication of March 2006 data, the BLS’ ECI uses a different

classification system, the North American Industrial Classification System (NAICS),

instead of the Standard I ndustrial Codes (SICs), which no longer exist. We have

consistently used the ECI as the data sour ce for our wages and salaries and other price

proxies in the IPPS market basket and we are not proposing to make any changes to the

usage for FY 2011. The factors used to adjust the hospital's data were based on the

midpoint of the cost reporting period, as indicated below.

MIDPOINT OF COST REPORTING PERIOD

After Before Adjustment Factor 10/14/2006 11/15/2006 1.04377 11/14/2006 12/15/2006 1.04077 12/14/2006 01/15/2007 1.03786 01/14/2007 02/15/2007 1.03508 02/14/2007 03/15/2007 1.03243 03/14/2007 04/15/2007 1.02981 04/14/2007 05/15/2007 1.02709 05/14/2007 06/15/2007 1.02430 06/14/2007 07/15/2007 1.02153 07/14/2007 08/15/2007 1.01891 08/14/2007 09/15/2007 1.01643CMS-1498-P 339

After Before Adjustment Factor 09/14/2007 10/15/2007 1.01394 10/14/2007 11/15/2007 1.01127 11/14/2007 12/15/2007 1.00844 12/14/2007 01/15/2008 1.00556 01/14/2008 02/15/2008 1.00275 02/14/2008 03/15/2008 1.00000 03/14/2008 04/15/2008 0.99732

For example, the midpoint of a cost reporting period beginning January 1, 2007,

and ending December 31, 2007, is June 30, 2007. An adjustment factor of 1.02153

would be applied to the wages of a hospita l with such a cost reporting period. In

addition, for the data for any cost reporting period that began in FY 2007 and covered a

period of less than 360 days or more than 370 days, we annualize the data to reflect a

1-year cost report. Dividing the data by th e number of days in the cost report and then

multiplying the results by 365 accomplishes annualization.

Step 6 --Each hospital is assigned to its appr opriate urban or ru ral labor market

area before any reclassifications under sec tion 1886(d)(8)(B), section 1886(d)(8)(E), or

section 1886(d)(10) of the Act. Within each ur ban or rural labor market area, we add the

total adjusted salaries plus wage-related costs obtained in Step 5 for all hospitals in that

area to determine the total adjusted salaries plus wage-related costs for the labor market

area.

Step 7 --We divide the total adjusted salaries plus wage-related costs obtained

under both methods in Step 6 by the sum of the corresponding total hours (from Step 4)

for all hospitals in each labor market area to determine an average hourly wage for the

area.CMS-1498-P 340

Step 8 --We add the total adjusted salaries plus wage-related costs obtained in

Step 5 for all hospitals in the Nation and then divide the sum by the national sum of total

hours from Step 4 to arrive at a national average hourly wage. Using the data as

described above, the proposed national average hourly wage (unadjusted for occupational

mix) is $34.9330.

Step 9 --For each urban or rural labor market area, we calculate the hospital wage

index value, unadjusted for o ccupational mix, by dividing the area average hourly wage

obtained in Step 7 by the national aver age hourly wage computed in Step 8.

Step 10 --Following the process set forth a bove, we develop a separate Puerto

Rico-specific wage index fo r purposes of adjusting the Puerto Rico standardized

amounts. (The national Puerto Rico standardized amount is adjusted by a wage index

calculated for all Puerto Rico labor market areas based on the national average hourly

wage as described above.) We add the total ad justed salaries plus wage-related costs (as

calculated in Step 5) for all hospitals in Puer to Rico and divide the sum by the total hours

for Puerto Rico (as calculated in Step 4) to arrive at an overall proposed average hourly

wage (unadjusted for occupational mix) of $14.7351 for Puerto Rico. For each labor

market area in Puerto Rico, we calculate the Puerto Rico-specific wage index value by

dividing the area average hourly wage (as calculat ed in Step 7) by the overall Puerto Rico

average hourly wage.

Step 11--Section 4410 of Pub. L. 105-33 provi des that, for discharges on or after

October 1, 1997, the area wage index applicable to any hospital that is located in an urban

area of a State may not be less than the area wage index applicable to hospitals located inCMS-1498-P 341

rural areas in that State. The areas affected by this provision are identified in Table 4D-2

of the Addendum to this proposed rule.

In the FY 2005 IPPS final rule (69 FR 49109), we adopted the “imputed” floor as

a temporary 3-year measure to address a con cern by some individuals that hospitals in

all-urban States were disadvantaged by the ab sence of rural hospitals to set a wage index

floor in those States. The im puted floor was originally set to expire in FY 2007, but we

extended it an additional year in the FY 2008 IPPS final rule with comment period

(72 FR 47321). In the FY 2009 IPPS final rule (73 FR 48570 through 48574 and 48584),

we extended the imputed floor for an additional 3 years, through FY 2011.

H. Analysis and Implementation of the Pr oposed Occupational Mix Adjustment and the

Proposed FY 2011 Occupational Mix Adjusted Wage Index

As discussed in section III.D. of this preamble, for FY 2011, we are proposing to

apply the occupational mix adjustment to 100 percent of the proposed FY 2011 wage

index. We calculated the proposed occupa tional mix adjustment using data from the

2007-2008 occupational mix survey data, usin g the methodology described in section

III.D.3. of this preamble.

Using the occupational mix survey data and applying the occupational mix

adjustment to 100 percent of the proposed FY 2011 wage index results in a proposed

national average hourly wage of $34.9124 and a proposed Puerto-Rico specific average

hourly wage of $14.7567. After excluding data of hospitals that eith er submitted aberrant

data that failed critical edits, or that do not have FY 2007 Worksheet S-3 cost report data

for use in calculating the proposed FY 2011 wage index, we calculated the proposedCMS-1498-P 342

FY 2011 wage index using the occupational mix survey data from 3,178 hospitals. Using

the Worksheet S-3 cost report data of 3,513 hos pitals and occupationa l mix survey data

from 3,178 hospitals represents a 90.4 percent survey response rate. The proposed

FY 2011 national average hourly wages for e ach occupational mix nursing subcategory

as calculated in Step 2 of the occupational mix calculation are as follows:

Occupational Mix Nursing Subc ategory Average Hourly Wage National RN 36.100857731 National LPN and Surgical Technician 20.877391755 National Nurse Aide, Orde rly, and Attendant 14.632232352 National Medical Assistant 16.482939594 National Nurse Category 30.504184147

The proposed national average hourly wage for the entire nurse category as

computed in Step 5 of the occupational mix calculation is $30.504184147. Hospitals

with a nurse category average hourly wage (as calculated in Step 4) of greater than the

national nurse category average hourly wage receive an occupational mix adjustment

factor (as calculated in Step 6) of less th an 1.0. Hospitals with a nurse category average

hourly wage (as calculated in Step 4) of less than the national nurse category average

hourly wage receive an occupational mix adjustme nt factor (as calculated in Step 6) of

greater than 1.0.

Based on the 2007-2008 occupational mix surv ey data, we determined (in Step 7

of the occupational mix calculation) that the national percentage of hospital employees in

the nurse category is 44.32 percent, and the national percentage of hospital employees in

the all other occupations category is 55.68 percent. At the CBSA level, the percentage ofCMS-1498-P 343

hospital employees in the nurse category ranged from a low of 29.08 percent in one

CBSA, to a high of 70.76 percent in another CBSA.

We compared the proposed FY 2011 occupational mix adjusted wage indices for

each CBSA to the proposed unadjusted wage indices for each CBSA. As a result of

applying the occupational mix adjustment to the wage data, the proposed wage index

values for 203(51.9 percent) urban areas and 32 (68.1 percent) rural areas would increase.

One hundred five (26.9 percent) urban areas w ould increase by 1 percent or more, and 6

(1.5 percent) urban areas would increase by 5 percent or more. Eighteen (38.3 percent)

rural areas would increase by 1 percent or more, and no rural areas would increase by 5

percent or more. However, the wage index values for 188 (48.1 percent) urban areas and

15 (31.9 percent) rural areas would decrease. Ninety (23.0 percent) urban areas would

decrease by 1 percent or more, and no urban area would decrease by 5 percent or more.

Seven (14.9 percent) rural areas would decreas e by 1 percent or more, and no rural areas

will decrease by 5 percent or more. The la rgest positive impacts are 7.83 percent for an

urban area and 2.87 percent for a rural area. The largest negative impacts are 3.98

percent for an urban area and 2.41 percent for a rural area. No urban or rural areas are

unaffected. These results indicate that a larger percentage of rural areas (68.1 percent)

benefit from the occupational mix adjustment than do urban areas (51.9 percent). While

these results are more positive overall fo r rural areas than under the previous

occupational mix adjustment that used su rvey data from 2006, approximately one-third

(31.9 percent) of rural CBSAs will still experience a decrease in their wage indices as a

result of the occupational mix adjustment.CMS-1498-P 344

The proposed wage index values for FY 2011 (except those for hospitals

receiving wage index adjustments under sec tion 1886(d)(13) of the Act) included in

Tables 4A, 4B, 4C, and 4F of the Addendum to this proposed rule include the proposed

occupational mix adjustment.

Tables 3A and 3B in the Addendum to this proposed rule list the 3-year average

hourly wage for each labor market area before the redesignation or reclassification of

hospitals based on FYs 2009, 2010, and 2011 cost reporting periods. Table 3A lists these

data for urban areas and Table 3B lists these data for rural areas. In addition, Table 2 in

the Addendum to this proposed rule includes the adjusted average hourly wage for each

hospital from the FY 2005 and FY 2006 cost reporting periods, as well as the FY 2007

period used to calculate the proposed FY 2011 wage index. The 3-year averages are

calculated by dividing the sum of the dolla rs (adjusted to a common reporting period

using the method described previously) across all 3 years, by the sum of the hours. If a

hospital is missing data for any of the previ ous years, its average hourly wage for the 3-

year period is calculated based on the data available during that period. The proposed

average hourly wages in Tables 2, 3A, and 3B in the Addendum to this proposed rule

include the proposed occupational mix adjustme nt. The proposed wage index values in

Tables 4A, 4B, 4C, and 4D-1 also include the proposed State-specific rural floor and

imputed floor budget neutrality adjustments.CMS-1498-P 345

I. Revisions to the Wage Index Based on Ho spital Redesignations and Reclassifications

1. General

Under section 1886(d)(10) of the Act, the MGCRB considers applications by

hospitals for geographic reclassification for purposes of payment under the IPPS.

Hospitals must apply to the MGCRB to reclassify 13 months prior to the start of the fiscal

year for which reclassification is sought (gener ally by September 1). Generally, hospitals

must be proximate to the labor market area to which they are seeking reclassification and

must demonstrate characteristics similar to hospitals located in that area. The MGCRB

issues its decisions by the end of February fo r reclassifications that become effective for

the following fiscal year (beginning Oct ober 1). The regulations applicable to

reclassifications by the MGCRB are located in 42 CFR 412.230 through 412.280.

Section 1886(d)(10)(D)(v) of the Act pr ovides that, beginning with FY 2001, a

MGCRB decision on a hospital reclassificati on for purposes of the wage index is

effective for 3 fiscal years, unless the hospita l elects to terminate the reclassification.

Section 1886(d)(10)(D)(vi) of the Act provide s that the MGCRB must use average hourly

wage data from the 3 most recently publishe d hospital wage surveys in evaluating a

hospital's reclassification application fo r FY 2003 and any succeeding fiscal year.

Section 304(b) of Pub. L. 106-554 provides that the Secretary must establish a

mechanism under which a statewide entity may ap ply to have all of the geographic areas

in the State treated as a single geographic area for purposes of computing and applying a

single wage index, for reclassifications beginning in FY 2003. The implementing

regulations for this provision are located at 42 CFR 412.235.CMS-1498-P 346

Section 1886(d)(8)(B) of the Act requires the Secretary to treat a hospital located

in a rural county adjacent to one or more urban areas as being located in the labor market

area to which the greatest number of workers in the county commute, if the rural county

would otherwise be considered part of an urban area under the standards for designating

MSAs and if the commuting rates used in determining outlying counties were determined

on the basis of the aggregate number of re sident workers who commute to (and, if

applicable under the standards, from) the central county or counties of all contiguous

MSAs. In light of the CBSA definitions a nd the Census 2000 data that we implemented

for FY 2005 (69 FR 49027), we undertook to identify those counties meeting these

criteria. Eligible counties are discussed and identified unde r section III.I.5. of this

preamble.

2. Effects of Reclassi fication/Redesignation

Section 1886(d)(8)(C) of the Act provides that the application of the wage index

to redesignated hospitals is dependent on the hypothetical imp act that the wage data from

these hospitals would have on the wage index va lue for the area to which they have been

redesignated. These requirements for determin ing the wage index values for redesignated

hospitals are applicable both to the hosp itals deemed urban under section 1886(d)(8)(B)

of the Act and hospitals that were reclassified as a resu lt of the MGCRB decisions under

section 1886(d)(10) of the Act. Therefore, as provided in section 1886(d)(8)(C) of the

Act, the wage index values were determined by considering the following:

• If including the wage data for the redesignated hospitals would reduce the wage

index value for the area to which the hospitals are redesignated by 1 percentage point orCMS-1498-P 347

less, the area wage index value determined exclusive of the wage data for the

redesignated hospitals applies to the redesignated hospitals.

• If including the wage data for the re designated hospitals reduces the wage index

value for the area to which the hospitals ar e redesignated by more than 1 percentage

point, the area wage index determined inclusiv e of the wage data for the redesignated

hospitals (the combined wage index value) applies to the redesignated hospitals.

• If including the wage data for the redesignated hospitals increases the wage

index value for the urban area to which the hos pitals are redesignated, both the area and

the redesignated hospitals receive the combined wage index value. Otherwise, the

hospitals located in the urban area receive a wage index excluding the wage data of

hospitals redesignated into the area.

Rural areas whose wage index values would be reduced by excluding the wage

data for hospitals that have been redesignated to another area continue to have their wage

index values calculated as if no redesignation had occurred (otherwise, redesignated rural

hospitals are excluded from the calculation of the rural wage index). The wage index

value for a redesignated rural hospital cannot be reduced below the wage index value for

the rural areas of the State in which the hospital is located.

CMS also has adopted the following policies:

• The wage data for a reclassified ur ban hospital is included in both the wage

index calculation of the urban area to which th e hospital is reclassified (subject to the

rules described above) and the wage inde x calculation of the urban area where the

hospital is physically located.CMS-1498-P 348

• In cases where hospitals have reclassifi ed to rural areas, such as urban hospitals

reclassifying to rural areas under 42 CFR 412.103, the hospital's wage data are:

(a) included in the rural wage index calcula tion, unless doing so would reduce the rural

wage index; and (b) included in the urban ar ea where the hospital is physically located.

The effect of this policy, in combination with the statutory requirement at section

1886(d)(8)(C)(ii) of the Act, is that rural areas may receive a wage index based upon the

highest of: (1) wage data from hospitals geographically located in the rural area;

(2) wage data from hospitals geographically located in the rural area, but excluding all

data associated with hosp itals reclassifying out of the rural area under section

1886(d)(8)(B) or section 1886(d)(10) of the Act; or (3) wage data associated with

hospitals geographically located in the area plus all hospitals reclassified into the rural

area.

In addition, in accordance with the statutory language referring to "hospitals" in

the plural under sections 1886(d)(8)(C)(i) and 1886(d)(8)(C)(ii) of the Act, our

longstanding policy is to consider recla ssified hospitals as a group when deciding

whether to include or exclude them from bot h urban and rural wage index calculations.

3. FY 2011 MGCRB Reclassifications

a. FY 2011 Reclassifications Requirements and Approvals

Under section 1886(d)(10) of the Act, the MGCRB considers applications by

hospitals for geographic reclassification for purposes of payment under the IPPS. The

specific procedures and rules that apply to the geographic reclassification process are

outlined in 42 CFR 412.230 through 412.280.CMS-1498-P 349

At the time this proposed rule was c onstructed, the MGCRB had completed its

review of FY 2011 reclassification requests. Based on such reviews, there were 311

hospitals approved for wage index recla ssifications by the MGCRB for FY 2011.

Because MGCRB wage index reclassifications are effective for 3 years, for FY 2011,

hospitals reclassified during FY 2009 or FY 2010 are eligible to continue to be

reclassified to a particular labor market ar ea based on such prior reclassifications. There

were 258 hospitals approved for wage index reclassifications in FY 2009 and 254

hospitals approved for wage i ndex reclassifications in FY 2010. Of all of the hospitals

approved for reclassification for FY 2009, FY 2010, and FY 2011, based upon the review

at the time of this proposed rule, 832 hospitals are in a reclassification status for FY 2011.

Under 42 CFR 412.273, hospitals that have been reclassified by the MGCRB are

permitted to withdraw their a pplications within 45 days of the publication of a proposed

rule. Generally stated, the reque st for withdrawal of an app lication for reclassification or

termination of an existing 3-year reclassifi cation that would be effective in FY 2011 has

to be received by the MGCRB within 45 days of the publication of the proposed rule.

Hospitals may also cancel prior reclassifica tion withdrawals or terminations in certain

circumstances. For further information about withdrawing, terminating, or canceling a

previous withdrawal or termination of a 3- year reclassification for wage index purposes,

we refer the reader to 42 CFR 412.273, as well as the FY 2002 IPPS final rule

(66 FR 39887) and the FY 2003 IPPS final rule (67 FR 50065). Additional discussion on

withdrawals and terminations, and clarificati ons regarding reinstating reclassificationsCMS-1498-P 350

and “fallback” reclassifications, were included in the FY 2008 IPPS final rule

(72 FR 47333).

Changes to the wage index that result from withdrawals of requests for

reclassification, terminations, wage index co rrections, appeals, and the Administrator's

review process for FY 2011 will be incorporat ed into the wage index values published in

the FY 2011 IPPS/LTCH PPS final rule. These changes affect not only the wage index

value for specific geographic areas, but also the wage index value

redesignated/reclassified hospitals receive; that is, whether they receive the wage index

that includes the data for both the hos pitals already in the area and the

redesignated/reclassified hospitals. Further, the wage index value for the area from

which the hospitals are redesignated/reclassified may be affected.

b. Applications for Recl assifications for FY 2012

Applications for FY 2012 reclassifications are due to the MGCRB by

September 1, 2010. We note that this is also the deadline for canceling a previous wage

index reclassification withdr awal or termination under 42 CFR 412.273(d). Applications

and other information about MGCRB reclassi fications may be obtained, beginning in

mid-July 2010, via the CMS Internet Web site at:

http://cms.hhs.gov/MGCRB/02_ins tructions_and_applications.a sp, or by calling the

MGCRB at (410) 786-1174. The mailing ad dress of the MGCRB is: 2520 Lord

Baltimore Drive, Suite L, Baltimore, MD 21244-2670.CMS-1498-P 351

c. Appeals of MGCRB Denials of Withdrawals and Terminations

Section 412.278 of the regulations permits a hospital or a group of hospitals

dissatisfied with the MGCRB’s decision regard ing its geographic designation to request

the Administrator’s review of the decision. Section 412.273(e) permits a hospital to file

an appeal to the Administrator regarding th e MGCRB’s denial of the hospital’s request

for withdrawal of an application. However, cu rrently, this section of the regulations does

not address Administrator review of the MG CRB’s denial of a hospital’s request for

termination; that is, “terminations” are not specified in the regulations at §412.273(e).

We are proposing to revise the regula tions to specify the availability of

Administrator review of MGCRB decisions re garding withdrawals and terminations, as

well as cancellations of withdrawals or ter minations. Because reclassifications are

considered budget neutral ac tions, we believe these propos ed revisions would have no

impact on total IPPS payments.

In addition, during our review of §412.273, we determined that some of the

existing language in the section could be clar ified to make it more easily understood. For

example, we believe it would be helpful to clarify the distinction between terminations

and withdrawals by defining these terms in a new paragraph (a), which would also

include the timing provisions now under existing pa ragraph (b)(1)(ii). To account for this

new paragraph, we are proposing to redesignate the existing contents of paragraph (e) as

paragraph (f) and also to revise the language to specify the ability of a hospital to appeal

an MGCRB denial of a request for “terminati on” of an approved reclassification, as well

as cancellation of a withdrawal or termination. We also believe it would be helpful (1) toCMS-1498-P 352

establish the introductory language of existin g paragraph (a) as a general rule under new

paragraph (b); (2) to establish a new para graph (c) that addresses the timing provisions

currently in paragraphs (a)(1), (a)(2), and (b)(1 )(i); (3) to clarify the existing language of

paragraphs (b)(2)(i) (b)(2)(ii), (b)(2)(iii), a nd (d) and incorporate it under new paragraph

(d); and (4) to redesignate the existing conten ts of paragraph (c) as new paragraph (e).

4. Redesignations of Hospitals unde r Section 1886(d)(8)(B) of the Act

Section 1886(d)(8)(B) of the Act requires us to treat a hospital located in a rural

county adjacent to one or more urban areas as being located in the MSA if certain criteria

are met. Effective beginning FY 2005, we use OMB’s 2000 CBSA standards and the

Census 2000 data to identify countie s in which hospitals qualify under

section 1886(d)(8)(B) of the Act to receive th e wage index of the urban area. Hospitals

located in these counties have been know n as “Lugar” hospitals and the counties

themselves are often referred to as “Lugar ” counties. We provide the FY 2011 chart

below with the listing of the rural counties c ontaining the hospitals designated as urban

under section 1886(d)(8)(B) of the Act. For discharges occurring on or after

October 1, 2010, hospitals located in the rural county in the first column of this chart will

be redesignated for purposes of using the wage index of the urban area listed in the

second column.

Rural Counties Containing Hospitals Redesignated as Urban under Section 1886(d)(8 )(B) of the Act (Based on CBSAs and Census 2000 Data)

Rural County CBSA Cherokee, AL Rome, GA Macon, AL Auburn-Opelika, AL Talladega, AL Anniston-Oxford, ALCMS-1498-P 353

Rural County CBSA Hot Springs, AR Hot Springs, AR Windham, CT Hartford-West Hartford-East Hartford, CT Bradford, FL Gainesville, FL Hendry, FL West Palm Beach-Boca Raton-Boynton, FL Levy, FL Gainesville, FL Walton, FL Fort Walton Beach-Crestview-Destin, FL Banks, GA Gainesville, GA Chattooga, GA Chattanooga, TN-GA Jackson, GA Atlanta-Sand y Springs-Marietta, GA Lumpkin, GA Atlanta-Sandy Springs-Marietta, GA Morgan, GA Atlanta-Sand y Springs-Marietta, GA Peach, GA Macon, GA Polk, GA Atlanta-Sandy Springs-Marietta, GA Talbot, GA Columbus, GA-AL Bingham, ID Idaho Falls, ID Christian, IL Springfield, IL DeWitt, IL Bloomington-Normal, IL Iroquois, IL Kankakee-Bradley, IL Logan, IL Springfield, IL Mason, IL Peoria, IL Ogle, IL Rockford, IL Clinton, IN Lafayette, IN Henry, IN Indianapolis-Carmel, IN Spencer, IN Evansville, IN-KY Starke, IN Gary, IN Warren, IN Lafayette, IN Boone, IA Ames, IA Buchanan, IA Waterloo-Cedar Falls, IA Cedar, IA Iowa City, IA Allen, KY Bowling Green, KY Assumption Parish, LA Baton Rouge, LA St. James Parish, LA Baton Rouge, LA Allegan, MI Holland- Grand Haven, MI Montcalm, MI Grand Rapids-Wyoming, MI Oceana, MI Muskegon-Norton Shores, MI Shiawassee, MI Lansing-East Lansing, MI Tuscola, MI Saginaw-Saginaw Township North, MI Fillmore, MN Rochester, MN Dade, MO Springfield, MO Pearl River, MS Gulfport-Biloxi, MS Caswell, NC Burlington, NCCMS-1498-P 354

Rural County CBSA Davidson, NC Greensboro-High Point, NC Granville, NC Durham, NC Harnett, NC Raleigh-Cary, NC Lincoln, NC Charlotte-G astonia-Concord, NC-SC Polk, NC Spartanburg, SC Los Alamos, NM Santa Fe, NM Lyon, NV Carson City, NV Cayuga, NY Syracuse, NY Columbia, NY Albany-Schenectady-Troy, NY Genesee, NY Rochester, NY Greene, NY Albany-Schenectady-Troy, NY Schuyler, NY Ithaca, NY Sullivan, NY Poughkeepsie-Ne wburgh-Middletown, NY Wyoming, NY Buffalo-Niagara Falls, NY Ashtabula, OH Cleveland-Elyria-Mentor, OH Champaign, OH Springfield, OH Columbiana, OH Youngstown-Warren-Boardman, OH-PA Cotton, OK Lawton, OK Linn, OR Corvallis, OR Adams, PA York-Hanover, PA Clinton, PA Williamsport, PA Greene, PA Pittsburgh, PA Monroe, PA Allentown- Bethlehem-Easton, PA-NJ Schuylkill, PA Reading, PA Susquehanna, PA Binghamton, NY Clarendon, SC Sumter, SC Lee, SC Sumter, SC Oconee, SC Greenville, SC Union, SC Spartanburg, SC Meigs, TN Cleveland, TN Bosque, TX Waco, TX Falls, TX Waco, TX Fannin, TX Dallas-Plano-Irving, TX Grimes, TX College Station-Bryan, TX Harrison, TX Longview, TX Henderson, TX Dallas-Plano-Irving, TX Milam, TX Austin-Round Rock, TX Van Zandt, TX Dallas-Plano-Irving, TX Willacy, TX Brownsville-Harlingen, TX Buckingham, VA Charlottesville, VA Floyd, VA Blacksburg-Christiansburg-Radford, VACMS-1498-P 355

Rural County CBSA Middlesex, VA Virginia Beach-Norfolk-Newport News, VA Page, VA Harrisonburg, VA Shenandoah, VA Winchester, VA-WV Island, WA Seattle-Be llevue-Everett, WA Mason, WA Olympia, WA Wahkiakum, WA Longview, WA Jackson, WV Charleston, WV Roane, WV Charleston, WV Green, WI Madison, WI Green Lake, WI Fond du Lac, WI Jefferson, WI Milwaukee-Wa ukesha-West Allis, WI Walworth, WI Milwaukee-Waukesha-West Allis, WI

As in the past, hospitals redesignated under section 1886(d)(8)(B) of the Act are

also eligible to be reclassified to a different area by the MGCRB. Affected hospitals may

compare the reclassified wage index for the labor market area in Table 4C in the

Addendum to the proposed rule into which they would be reclassified by the MGCRB to

the wage index for the area to which they ar e redesignated under section 1886(d)(8)(B) of

the Act. Hospitals may withdraw from an MGCRB reclassification within 45 days of the

publication of this proposed rule.

5. Reclassifications under Sec tion 1886(d)(8)(B) of the Act

As discussed in the FY 2009 IPPS final rule (73 FR 48588), Lugar hospitals are

treated like reclassified hospitals for purposes of determining their applicable wage index

and receive the reclassified wage index for the urban area to which they have been

redesignated. Because Lugar hospitals are treated like reclassified hospitals, when they

are seeking reclassification by the MGCRB, they are subject to the rural reclassification

rules set forth at 42 CFR 412.230. The proce dural rules set forth at §412.230 list the

criteria that a hospital must meet in order to reclassify as a rural hospital. Lugar hospitalsCMS-1498-P 356

are subject to the proximity criteria and paymen t thresholds that apply to rural hospitals.

Specifically, the hospital must be no more than 35 miles from the area to which it seeks

reclassification (§412.230(b)(1)); and the hospita l must show that its average hourly wage

is at least 106 percent of the average hourly wa ge of all other hospitals in the area in

which the hospital is located (§412.230(d)(1)(iii) (C)). In accordance with policy adopted

in the FY 2009 IPPS final rule (73 FR 48568 and 48569), beginning with reclassifications

for the FY 2010 wage index, a Lugar hospital must also demonstrate that its average

hourly wage is equal to at least 84 percen t (for FY 2010 reclassifications) and 86 percent

(for reclassifications for FY 2011 and subseque nt fiscal years) of the average hourly

wage of hospitals in the area to which it seeks redesignation (§412.230(d)(1)(iv)(C)).

Hospitals not located in a Lugar county seeking reclassification to the urban area

where the Lugar hospitals have been redesignated are not permitted to measure to the

Lugar county to demonstrate proximity (no more than 15 miles for an urban hospital, and

no more than 35 miles for a rural hospital or the closest urban or rural area for RRCs or

SCHs) in order to be reclassified to such ur ban area. These hospitals must measure to the

urban area exclusive of the Lugar County to m eet the proximity or nearest urban or rural

area requirement. We treat New England deem ed counties in a manner consistent with

how we treat Lugar counties. (We refer readers to FY 2008 IPPS final rule with

comment period (72 FR 47337) for a discussion of this policy.)

6. Reclassifications under Section 508 of Pub. L. 108-173

Section 508 of Pub. L. 108-173 allowed ce rtain qualifying hospitals to receive

wage index reclassifications and assignments that they otherwise would not have beenCMS-1498-P 357

eligible to receive under the law. Althou gh section 508 originally was scheduled to

expire after a 3-year period, Congress exte nded the provision severa l times, as well as

certain special exceptions that would have otherwise expired. For a discussion of the

original section 508 provision and its various extensions, we refer readers to the FY 2009

IPPS final rule (73 FR 48588). The most recent extension of the provision was included

in section 124 of Pub. L. 110-275 (MIPPA). Section 124 extended, through FY 2009,

section 508 reclassifications as well as cert ain special exceptions. Because the section

124 extension of these provisions expired on September 30, 2009 (and, therefore, will not

be applicable in FY 2011 unless there is inte rvening legislation to extend the provisions),

we are not proposing to make any changes re lated to these provisions in this proposed

rule for FY 2011.

We note that section 508 and special excep tions reclassifications were recently

extended again, through September 30, 2010, under section 10317 of the PPACA

(Pub. L. 111-148). We intend to imminently i ssue instructions regarding implementation

of section 10317 of Pub. L. 111-148.

J. Proposed FY 2011 Wage Index Adjustment Based on Commuting Pa tterns of Hospital

Employees

In accordance with the broad discretion under section 1886(d)(13) of the Act, as

added by section 505 of Pub. L. 108-173, be ginning with FY 2005, we established a

process to make adjustments to the hospita l wage index based on commuting patterns of

hospital employees (the "out-migration" adjustment). The process, outlined in the

FY 2005 IPPS final rule (69 FR 49061), provides for an increase in the wage index forCMS-1498-P 358

hospitals located in certain counties that ha ve a relatively high percentage of hospital

employees who reside in the county but work in a different county (or counties) with a

higher wage index. Such adjustments to the wage index are effective for 3 years, unless a

hospital requests to waive the application of the adjustment . A county will not lose its

status as a qualifying county due to wage index changes during the 3-year period, and

counties will receive the same wage index incr ease for those 3 years. However, a county

that qualifies in any given year may no longer qualify after the 3-year period, or it may

qualify but receive a different adjustment to the wage index level. Hospitals that receive

this adjustment to their wage index are not eligible for reclassification under section

1886(d)(8) or section 1886(d)(10) of the Act. Adjustments under this provision are not

subject to the budget neutrality requirement s under section 1886(d)(3)(E) of the Act.

Hospitals located in counties that qualify for the wage index adjustment are to

receive an increase in the wage index that is equal to the average of the differences

between the wage indices of the labor market area(s) with higher wage indices and the

wage index of the resident county, weighted by the overall percentage of hospital workers

residing in the qualifying county who are employed in any labor market area with a

higher wage index. Beginning with the FY 2008 wage index, we use post-reclassified

wage indices when determining the out-migration adjustment (72 FR 47339).

For the proposed FY 2011 wage index, we are proposing to calculate the outmigration adjustment using the same formula described in the FY 2005 IPPS final rule

(69 FR 49064), with the addition of using the pos t-reclassified wage i ndices, to calculate

the out-migration adjustment. This adjustment is calculated as follows:CMS-1498-P 359

Step 1 --Subtract the wage index for the qualif ying county from the wage index of

each of the higher wage area(s) to which hospital workers commute.

Step 2 --Divide the number of hospital employees residing in the qualifying

county who are employed in such higher wage index area by the total number of hospital

employees residing in the qualifying county w ho are employed in any higher wage index

area. For each of the higher wage index areas, multiply this result by the result obtained

in Step 1.

Step 3 --Sum the products resulting from Step 2 (if the qualifying county has

workers commuting to more than one higher wage index area).

Step 4 --Multiply the result from Step 3 by the percentage of hospital employees

who are residing in the qualifying county and who are employed in any higher wage

index area.

These adjustments will be effective for each county for a period of 3 fiscal years.

For example, hospitals that received the ad justment for the first time in FY 2010 will be

eligible to retain the adjustment for FY 2011. For hospitals in ne wly qualified counties,

adjustments to the wage index are effectiv e for 3 years, beginning with discharges

occurring on or after October 1, 2010.

Hospitals receiving the wage index ad justment under section 1886(d)(13)(F) of

the Act are not eligible for reclassification under sections 1886(d)(8) or (d)(10) of the Act

unless they waive the out-migration adjustme nt. Consistent with our FYs 2005 through

2010 IPPS final rules, we are specifying that hospitals redesignated under section

1886(d)(8) of the Act or reclassified under se ction 1886(d)(10) of the Act will be deemedCMS-1498-P 360

to have chosen to retain their redesigna tion or reclassificati on. Section 1886(d)(10)

hospitals that wish to receive the out-migration adjustment, rather than their

reclassification adjustment, should follow the termination/withdrawal procedures

specified in 42 CFR 412.273 and section III.I.3. of the preamble of this proposed rule.

Otherwise, they will be deemed to have waived the out-migration adjustment. Hospitals

redesignated under section 1886(d)(8) of the Act will be deemed to have waived the

out-migration adjustment unless they explicitly notify CMS within 45 days from the

publication of this proposed rule that they elect to receive the out-migration adjustment

instead. These notifications should be sent to the following address: Centers for

Medicare and Medicaid Services, Center fo r Medicare Management, Attention: Wage

Index Adjustment Waivers, Division of Acute Care, Room C4-08-06, 7500 Security

Boulevard, Baltimore., MD 21244-1850.

Table 4J in the Addendum to this propos ed rule lists the proposed out-migration

wage index adjustments for FY 2011. Hospitals that are not otherwise reclassified or

redesignated under section 1886(d)(8) or section 1886(d)(10) of the Act will

automatically receive the listed adjustment. In accordance with the procedures discussed

above, redesignated/reclassified hospitals will be deemed to have waived the

out-migration adjustment unless CMS is otherwise notified within the necessary

timeframe. In addition, hospita ls eligible to receive th e out-migration wage index

adjustment and that withdraw their application for reclassification will automatically

receive the wage index adjustment listed in Table 4J in the Addendum to this proposed

rule. The wage index is upda ted annually and, as such, hosp itals wishing to waive theirCMS-1498-P 361

Lugar redesignation in order to receive their home area wage index plus the

out-migration adjustment must request the waiver annually.

K. Process for Requests fo r Wage Index Data Corrections

The preliminary, unaudited Worksheet S-3 wage data and occupational mix

survey data files for the proposed FY 2011 wage index were made available on

October 5, 2009, through the Internet on the CMS Web site at:

http://www.cms.hhs.gov/AcuteInpatie ntPPS/WIFN/list.asp#TopOfPage.

In the interest of meeting the data needs of the public, beginning with the

proposed FY 2009 wage index, we post an add itional public use file on our Web site that

reflects the actual data that are used in co mputing the proposed wage index. The release

of this new file does not alter the current wage index pr ocess or schedule. We notified

the hospital community of the availability of these data as we do with the current public

use wage data files through our Hospital Open Door forum. We encouraged hospitals to

sign up for automatic notifications of in formation about hospital issues and the

scheduling of the Hospital Open Door forums at:

http://www.cms.hhs.gov/OpenDoorForums/.

In a memorandum dated October 21, 2009, we instructed all fiscal

intermediaries/MACs to inform the IPPS hospitals they service of the availability of the

wage index data files and the process and timeframe for requesting revisions (including

the specific deadlines listed below). We also instructed the fiscal intermediaries/MACs

to advise hospitals that these data were also made available directly through their

representative hospital organizations.CMS-1498-P 362

If a hospital wished to request a change to its data as shown in the

October 5, 2009 wage and occupational mix da ta files, the hospital was to submit

corrections along with complete, detaile d supporting documentation to its fiscal

intermediary/MAC by December 7, 2009. Hospitals were notified of this deadline and of

all other possible deadlines and requirements, including the requirement to review and

verify their data as posted on the preliminary wage index data files on the Internet,

through the October 21, 2009 me morandum referenced above.

In the October 21, 2009 memorandum, we also specified that a hospital requesting

revisions to its occupational mix survey data was to copy its record(s) from the

CY 2007-2008 occupational mix pr eliminary files posted to our Web site in October,

highlight the revised cells on its spreadsheet, and submit its spreadsheet(s) and complete

documentation to its fiscal intermedia ry/MAC no later than December 7, 2009.

The fiscal intermediaries/MACs notified the hospitals by mid-February 2010 of

any changes to the wage index data as a resu lt of the desk reviews and the resolution of

the hospitals’ early-December revision requests . The fiscal intermediaries/MACs also

submitted the revised data to CMS by mid -February 2010. CMS published the proposed

wage index public use files that include d hospitals’ revised wage index data on

February 22, 2010. Hospitals had until March 8, 2010, to submit requests to the fiscal

intermediaries/MACs for reconsideration of adjustments made by the fiscal

intermediaries/MACs as a result of the desk re view, and to correct errors due to CMS’s or

the fiscal intermediary's (or, if applicable, the MAC's) mishandling of the wage indexCMS-1498-P 363

data. Hospitals also were required to s ubmit sufficient documentation to support their

requests.

After reviewing requested changes submitted by hospitals, fiscal

intermediaries/MACs are to transmit any additional revisions resulting from the

hospitals’ reconsideration requests by Apr il 14, 2010. The deadline for a hospital to

request CMS intervention in cases where the hospital disagrees with the fiscal

intermediary's (or, if applicable, the MA C’s) policy interpreta tions is April 21, 2010.

Hospitals should examine Table 2 in the Addendum to this proposed rule.

Table 2 in the Addendum to this proposed rule contains each hospital’s adjusted average

hourly wage used to construct the wage index values for the past 3 years, including the

FY 2007 data used to construct the proposed FY 2011 wage index. We note that the

hospital average hourly wages shown in Table 2 only reflect changes made to a hospital’s

data and transmitted to CMS in March 2010.

We will release the final wage index da ta public use files by May 7, 2010 on the

Internet at http://www.cms.hhs.gov/AcuteInpatientPPS/WIFN/list.asp#TopOfPage. The

May 2010 public use files are made available solely for the limited purpose of identifying

any potential errors made by CMS or the fiscal intermediary/MAC in the entry of the

final wage index data that resulted from the correction process described above (revisions

submitted to CMS by the fiscal intermed iaries/MACs by April 14, 2010). If, after

reviewing the May 2010 final files, a hospital believes that its wage or occupational mix

data are incorrect due to a fiscal intermediary/MAC or CMS error in the entry or

tabulation of the final data, the hospita l should send a letter to both its fiscalCMS-1498-P 364

intermediary/MAC and CMS that outlines why the hospital believes an error exists and

provide all supporting information, including re levant dates (for example, when it first

became aware of the error). CMS and the fis cal intermediaries (or, if applicable, the

MACs) must receive these reque sts no later than June 7, 2010.

Each request also must be sent to th e fiscal intermediary/MAC. The fiscal

intermediary/MAC will review requests upon receipt and contact CMS immediately to

discuss any findings.

At this point in the process, that is, after the release of the May 2010 wage index

data files, changes to the wage and occupational mix data will only be made in those very

limited situations involving an error by the fiscal intermediary/MAC or CMS that the

hospital could not have known about before its review of th e final wage index data files.

Specifically, neither the fiscal intermediary/MAC nor CMS will approve the following

types of requests:

● Requests for wage index data corrections that were submitted too late to be

included in the data transmitted to CMS by fiscal intermediaries or the MACs on or

before April 21, 2010.

● Requests for correction of errors that were not, but could ha ve been, identified

during the hospital's review of the Februa ry 22, 2010 wage index public use files.

● Requests to revisit factual determinations or policy interpretations made by the

fiscal intermediary or the MAC or CMS durin g the wage index data correction process.

Verified corrections to the wage index data received timely by CMS and the fiscal

intermediaries or the MACs (that is, by June 7, 2010) will be incorporated into the finalCMS-1498-P 365

wage index in the FY 2011 IPPS/LTCH PPS final rule, which will be effective

October 1, 2010.

We created the processes described above to resolve all substantive wage index

data correction disputes befo re we finalize the wage and occupational mix data for the

FY 2011 payment rates. Accordingly, hosp itals that did not meet the procedural

deadlines set forth above will not be afford ed a later opportunity to submit wage index

data corrections or to dispute the fiscal in termediary's (or, if applicable, the MAC's)

decision with respect to requested changes. Specifically, our policy is that hospitals that

do not meet the procedural deadlines set forth above will not be permitted to challenge

later, before the Provider Re imbursement Review Board, the failure of CMS to make a

requested data revision. (See W. A. Foote Memorial Hospital v. Shalala

,
No. 99-CV-75202-DT (E.D. Mic h. 2001) and Palisades Gene ral Hospital v. Thompson

,
No. 99-1230 (D.D.C. 2003).) We refer readers also to the FY 2000 IPPS final rule

(64 FR 41513) for a discussion of the paramete rs for appealing to the PRRB for wage

index data corrections.

Again, we believe the wage index data correction process described above

provides hospitals with sufficient opportunity to bring errors in their wage and

occupational mix data to the fis cal intermediary's (or, if app licable, the MAC's) attention.

Moreover, because hospitals have access to the final wage index data by early May 2010,

they have the opportunity to detect any data en try or tabulation errors made by the fiscal

intermediary or the MAC or CMS before the development and publication of the final

FY 2011 wage index by August 2010, and th e implementation of the FY 2011 wageCMS-1498-P 366

index on October 1, 2010. If hosp itals availed themselves of the opportunities afforded to

provide and make corrections to the wage and occupational mix da ta, the wage index

implemented on October 1 should be accurate. Nevertheless, in the event that errors are

identified by hospitals and brought to our a ttention after June 7, 2010, we retain the right

to make midyear changes to the wage index under very limite d circumstances.

Specifically, in accordance with 42 CFR 412.64(k)(1) of our existing regulations,

we make midyear corrections to the wage i ndex for an area only if a hospital can show

that: (1) the fiscal intermediary or the MAC or CMS made an error in tabulating its data;

and (2) the requesting hospital could not have known about the error or did not have an

opportunity to correct the error, before the be ginning of the fiscal year. For purposes of

this provision, “before the beginning of the fi scal year” means by the June 7 deadline for

making corrections to the wage data for the following fiscal year’s wage index. This

provision is not available to a hospital seeking to revise another hosp ital’s data that may

be affecting the requesting hospital’s wage inde x for the labor market area. As indicated

earlier, because CMS makes the wage index data available to hospitals on the CMS Web

site prior to publishing both the proposed and final IPPS rules, and the fiscal

intermediaries or the MACs notify hospitals directly of any wage index data changes

after completing their desk reviews, we do not expect that midyear corrections will be

necessary. However, under our current policy, if the correction of a data error changes

the wage index value for an area, the re vised wage index value will be effective

prospectively from the date the correction is made.CMS-1498-P 367

In the FY 2006 IPPS final rule (70 FR 47385), we revised 42 CFR 412.64(k)(2) to

specify that, effective on October 1, 2005, that is, beginning with the FY 2006 wage

index, a change to the wage index can be made retroactive to the beginning of the Federal

fiscal year only when: (1) the fiscal intermediary (or, if applicable, the MAC) or CMS

made an error in tabulating data used for the wage index calculation; (2) the hospital

knew about the error and requested that the fi scal intermediary (or, if applicable, the

MAC) and CMS correct the error using the esta blished process and w ithin the established

schedule for requesting corrections to the wage index data, before the beginning of the

fiscal year for the applicable IPPS update (that is, by the June 7, 2010 deadline for the

FY 2011 wage index); and (3) CMS agreed that th e fiscal intermediary (or, if applicable,

the MAC) or CMS made an error in tabula ting the hospital’s wage index data and the

wage index should be corrected.

In those circumstances where a hospital requested a correction to its wage index

data before CMS calculates th e final wage index (that is, by the June 7, 2010 deadline),

and CMS acknowledges that the error in the hospital’s wage index data was caused by

CMS’ or the fiscal intermediary's (or, if applicable, the MAC’s) mishandling of the data,

we believe that the hospital should not be penalized by our delay in publishing or

implementing the correction. As with our curre nt policy, we indicated that the provision

is not available to a hospital seeking to revi se another hospital’s da ta. In addition, the

provision cannot be used to correct prior year s’ wage index data; and it can only be used

for the current Federal fiscal year. In ot her situations where our policies would allowCMS-1498-P 368

midyear corrections, we continue to be lieve that it is appropriate to make

prospective-only corrections to the wage index.

We note that, as with prospective changes to the wage index, the final retroactive

correction will be made irrespective of whether the change increases or decreases a

hospital’s payment rate. In addition, we note that the polic y of retroactive adjustment

will still apply in those instances where a judicial decision reverses a CMS denial of a

hospital’s wage index da ta revision request.

L. Labor-Related Share for the Proposed FY 2011 Wage Index

Section 1886(d)(3)(E) of the Act directs the Secretary to adjust the proportion of

the national prospective payment system base payment rates that are attributable to wages

and wage-related costs by a factor that reflects the relative differences in labor costs

among geographic areas. It also directs the Secretary to estimate from time to time the

proportion of hospital costs that are labor-r elated: "The Secretary shall adjust the

proportion (as estimated by the Se cretary from time to time) of hospitals’ costs which are

attributable to wages and wage-related costs of the DRG prospective payment rates..."

We refer to the portion of hospital costs attr ibutable to wages and wage-related costs as

the labor-related share. The labor-related share of the prospective payment rate is

adjusted by an index of relative labor costs, which is referred to as the wage index.

Section 403 of Pub. L. 108-173 amended section 1886(d)(3)(E) of the Act to

provide that the Secretary must employ 62 percent as the labor-related share unless this

"would result in lower payments to a hospital than would otherwise be made." However,

this provision of Pub. L. 108-173 did not change the legal requirement that the SecretaryCMS-1498-P 369

estimate "from time to time" the proportion of hospitals' costs that are "attributable to

wages and wage-related costs." We believe th at this reflected Congressional intent that

hospitals receive payment based on either a 62-percent labor-related share, or the

labor-related share estimated from time to time by the Secretary, depending on which

labor-related share resulted in a higher payment.

In the FY 2010 IPPS/RY 2010 LTCH PPS final rule (74 FR 43850 through

43856), we rebased and revised the hospital market basket for operating costs. We

established a FY-2006-based IPPS hospital market basket to replace the FY 2002-based

IPPS hospital market basket, effective October 1, 2009. In that final rule, we presented

our analysis and conclusions regarding the frequency and methodology for updating the

labor-related share for FY 2010. We also recalculated a labor-related share of

68.8 percent, using the FY 2006-based IPPS market basket, for discharges occurring on

or after October 1, 2009. In addition, we imp lemented this revise d and rebased laborrelated share in a budget neut ral manner, but consistent w ith section 1886(d)(3)(E) of the

Act, we did not take into acc ount the additional payments that would be made as a result

of hospitals with a wage index less than or equal to 1.0 being paid using a labor-related

share lower than the labor-related share of hospitals with a wage index greater than 1.0.

The labor-related share is used to de termine the proportion of the national IPPS

base payment rate to which the area wage inde x is applied. In this proposed rule, we are

not proposing to make any further changes to the national average proportion of

operating costs that are attributable to wages and salaries, fringe be nefits, contract labor,

the labor-related portion of professional fees, administrative and business supportCMS-1498-P 370

services, and all other labor-rela ted services (previously referred to in the FY 2002-based

IPPS market basket as labor-intensive). Therefore, we are proposing to continue to use a

labor-related share of 68.8 percent for discha rges occurring on or after October 1, 2010.

Tables 1A and 1B in the Addendum to th is proposed rule reflects this proposed

labor-related share. We note that section 403 of Pub. L. 108-173 amended

sections 1886(d)(3)(E) and 1886(d)(9)(C)(iv) of the Act to provide that the Secretary

must employ 62 percent as the labor-related share unless this employment "would result

in lower payments to a hospital than would otherwise be made." Therefore, for all IPPS

hospitals whose wage indices are less than 1.0000, we are applying the wage index to a

labor-related share of 62 percent of the na tional standardized amount. For all IPPS

hospitals whose wage indices are greater than 1.0000, we are applying the wage index to

a labor-related share of 68.8 percent of the national standardized amount.

For Puerto Rico hospitals, the national labor-related share will always be

62 percent because the wage index for all Puer to Rico hospitals is less than 1.0. We are

proposing to continue to use a labor-relat ed share for the Puerto Rico-specific

standardized amounts of 62.1 percent for discharges occurring on or after

October 1, 2010. This Puerto Rico labor-relat ed share of 62.1 percent was also adopted

in the FY 2010 IPPS/LTCH PPS final rule (74 FR 43857) at the time the FY 2006-based

hospital market basket was established, eff ective October 1, 2009. Consistent with our

methodology for determining the national labo r-related share, we added the Puerto

Rico-specific relative weights for wages and sa laries, fringe benefits, contract labor, the

labor-related portion of profe ssional fees, administrative a nd business support services,CMS-1498-P 371

and all other labor-related services (previously referred to in the FY 2002-based IPPS

market basket as labor-intensive) to deter mine the labor-related share. Puerto Rico

hospitals are paid based on 75 percent of the national standardized amounts and

25 percent of the Puerto Rico-s pecific standardized amounts. The labor-related share of a

hospital's Puerto Rico-specific rate will be either the Puerto Rico-specific labor-related

share of 62.1 percent or 62 perecent, depending on which results in higher payments to

the hospital. If the hospital has a Puerto Ri co-specific wage index of greater than 1.0, we

will set the hospital's rates using a labor-rel ated share of 62.1 percent for the 25 percent

portion of the hospital's payment determined by the Puerto Rico standardized amounts

because this amount will result in higher paym ents. Conversely, a hospital with a Puerto

Rico-specific wage index of less than 1.0 w ill be paid using the Puerto Rico-specific

labor-related share of 62 percent of the Puer to Rico-specific rates because the lower

labor-related share will result in higher payments. The proposed Puerto Rico

labor-related share of 62.1 percent for FY 2011 is reflected in the Table 1C of the

Addendum to this proposed rule.

V. Other Decisions and Pr oposed Changes to the IPPS for Operating Costs and

GME Costs

A. Reporting of Hospital Quality Da ta for Annual Hospital Payment Update

1. Background

a. Overview

CMS is seeking to promote higher qualit y and more efficient health care for

Medicare beneficiaries. This effort is s upported by the adoption of an increasing numberCMS-1498-P 372

of widely-agreed upon quality measures. CMS ha s worked with relevant stakeholders to

define measures of quality in almost every setting and currently measures some aspect of

care for almost all Medicare beneficiaries. These measures assess structural aspects of

care, clinical processes, patient experien ces with care, and, increasingly, outcomes.

CMS has implemented quality measure reporting programs for multiple settings

of care. To measure the quality of hospita l inpatient services, CMS implemented the

Reporting Hospital Quality Data for Annual Payment Update (RHQDAPU) program. In

addition, CMS has implemented quality re porting programs for hospital outpatient

services, the Hospital Outpatient Quality Data Reporting Program (HOP QDRP), and for

physicians and other eligible professionals, the Physician Quality Reporting Initiative

(PQRI). CMS has also implemented quality re porting programs for home health agencies

and skilled nursing facilities th at are based on conditions of participation, and an

end-stage renal disease quality reporting program that is based on conditions for

coverage.

b. Hospital Quality Data Reporting unde r Section 501(b) of Pub. L. 108-173

Section 501(b) of the Medicare Pr escription Drug, Improvement, and

Modernization Act of 2003 (MMA), Pub. L. 108-173, added section 1886(b)(3)(B)(vii) to

the Act. This section established the au thority for the RHQDAPU program and revised

the mechanism used to update the standard ized payment amount for inpatient hospital

operating costs. Specifically, section 1886( b)(3)(B)(vii)(I) of the Act, before it was

amended by section 5001(a) of Pub. L. 109-171, provided for a reduction of

0.4 percentage points to the update percentage increase (also known as the market basketCMS-1498-P 373

update) for FY 2005 through FY 2007 for any subsection (d) hospital that did not submit

data on a set of 10 quality indicators established by the Secretary as of

November 1, 2003. It also provides that any re duction would apply only to the fiscal year

involved, and would not be take n into account in computing the applicable percentage

increase for a subsequent fiscal year. The statute thereby established an incentive for

IPPS hospitals to submit data on the quality measures established by the Secretary, and

also built upon the previously established Voluntary Hospital Qu ality Data Reporting

Program that we described in the FY 2009 IPPS final rule (73 FR 48598).

We implemented section 1886(b)(3)(B)(vii) of the Act in the FY 2005 IPPS final

rule (69 FR 49078) and codified the applicab le percentage change in §412.64(d) of our

regulations. We adopted additional requi rements under the RHQDAPU program in the

FY 2006 IPPS final rule (70 FR 47420).

c. Hospital Quality Data Reporting under Section 5001(a) of Pub. L. 109-171

Section 5001(a) of the Deficit Reduc tion Act of 2005 (DRA), Pub. L. 109-171,

further amended section 1886(b)(3)(B) of the Ac t to revise the mechanism used to update

the standardized payment amount for hospital i npatient operating costs, in particular, by

adding new section 1886(b)(3)(B)(viii) to the Act. Specifically, sections

1886(b)(3)(B)(viii)(I) and (II) of the Act provide that the payment update for FY 2007

and each subsequent fiscal year be re duced by 2.0 percentage points for any

subsection (d) hospital that does not submit quality data in a form and manner, and at a

time, specified by the Secretary. Section 1886(b)(3)(B)(viii)(I) of the Act also provides

that any reduction in a hospital’s payment update will apply only with respect to theCMS-1498-P 374

fiscal year involved, and will not be taken into account fo r computing the applicable

percentage increase for a subsequent fiscal year. In the FY 2007 IPPS final rule

(71 FR 48045), we amended our regulations at §412.64(d)(2) to reflect the 2.0 percentage

point reduction in the payment update for FY 2007 and subsequent fiscal years for

subsection (d) hospitals that do not comply with requirements for reporting quality data,

as provided for under section 1886(b)(3)(B)(viii) of the Act.

(1) Quality Measures

Section 1886(b)(3)(B)(viii)(III) of the Ac t requires that the Secretary expand the

"starter set" of 10 quality measures that was established by the Secretary as of

November 1, 2003, as the Secretary determines to be appropriate for the measurement of

the quality of care furnished by a hospital in inpatient settings

. In expanding this set of

measures, section 1886(b)(3)(B)(viii)(IV) of th e Act requires that, effective for payments

beginning with FY 2007, the Secretary begin to adopt the baseline set of performance

measures as set forth in a report issued by th e Institute of Medicine (IOM) of the National

Academy of Sciences under section 238(b) of Pub. L. 108-173. 5

Section 1886(b)(3)(B)(viii)(V) of the Ac t requires that, effective for payments

beginning with FY 2008, the Secretary add ot her quality measures that reflect consensus

among affected parties, and to the extent feas ible and practicable, ha ve been set forth by

one or more national consensus building entities. The NQF is a voluntary consensus

5 Institute of Medicine, "Performance M easurement: Accelerating Improvement," December 1, 2005, available at: http ://www.iom.edu/CMS/3809/19805/31310.aspx. IOM set forth these baseline measures in a November 2005 report. However, the IOM report was not released until December 1, 2005 on the IOM Web site.CMS-1498-P 375

standard-setting organization with a divers e representation of consumer, purchaser,

provider, academic, clinical, and other health care stakeholder organizations. The NQF

was established to standardize health care quality measurement and reporting through its

consensus development process. We have generally adopted NQF-endorsed measures.

However, we believe that consensus among affe cted parties also can be reflected by other

means, including consensus achieved duri ng the measure development process,

consensus shown through broad acceptance a nd use of measures, and consensus through

public comment.

Section 1886(b)(3)(B)(viii)(VI) of the Act authorizes the Secret ary to replace any

quality measures or indicators in appropria te cases, such as where all hospitals are

effectively in compliance with a measure, or the measures or indicators have been

subsequently shown to not represent the best clinical practice. Thus, the Secretary is

granted broad discretion to replace measures that are no longer appropriate for the

RHQDAPU program.

In the FY 2007 IPPS final rule, we began to expand the RHQDAPU program

measures by adding 11 quality measures to the 10-measure starter set to establish an

expanded set of 21 quality measures for the FY 2007 payment determination

(71 FR 48033 through 48037, 48045).

In the CY 2007 OPPS/ASC final rule (71 FR 68201), we adopted six additional

quality measures for the FY 2008 payment determination, for a total of 27 measures.

Two of these measures (30-Day Risk Standard ized Mortality Rates for Heart Failure and

30-Day Risk Standardized Mortality Rates for AMI) were calculated using existingCMS-1498-P 376

administrative Medicare claims data; thus, no additional data submission by hospitals was

required for these two measures. The measures used for the FY 2008 payment

determination included, for the first time, the HCAHPS patient experience of care survey.

In the FY 2008 IPPS final rule (72 FR 47348 through 47358) and the CY 2008

OPPS/ASC final rule with comment period (72 FR 66875 through 66877), we added

three additional process measures to the R HQDAPU program measure set. (These three

measures are SCIP-Infection-4: Cardi ac Surgery Patients with Controlled 6AM

Postoperative Serum Glucose, SC IP-Infection-6: Surgery Patie nts with Appropriate Hair

Removal, and Pneumonia 30-day mortality (Med icare patients).) The addition of these

3 measures brought the total number of RHQDA PU program measures to be used for the

FY 2009 payment determination to 30 (72 FR 66876). The 30 measures used for the

FY 2009 annual payment determination are listed in the FY 2009 IPPS final rule

(73 FR 48600 through 48601).

For the FY 2010 payment determination, we added 15 new measures to the

RHQDAPU program measure set and retired one measure from the program (PN-1:

Oxygenation Assessment). Of the new measures, 13 were adopted in the FY 2009 IPPS

final rule (73 FR 48602 through 48611) and two a dditional measures were finalized in the

CY 2009 OPPS/ASC final rule with comment period (73 FR 68780 through 68781). This

resulted in an expansion of the RHQDAPU pr ogram measures from 30 measures for the

FY 2009 payment determination to 44 measures for the FY 2010 payment determination.

The RHQDAPU program measures for the FY 2010 payment determination consist of:

26 chart-abstracted process measures, which measure quality of care provided for AcuteCMS-1498-P 377

Myocardial Infarction (AMI), Heart Failure (HF), Pneumonia (PN), and Surgical Care

Improvement (SCIP); 6 claims-based measur es, which evaluate 30-day mortality and

30-day readmission rates for AMI, HF, or PN; 9 claims-based AHRQ patient safety

indicators and inpatient quality indicators; 1 claims-based nursing sensitive measure;

1 structural measure that assesses participa tion in a systematic database for cardiac

surgery; and the HCAHPS patient experience of care survey. The measures are listed in

the IPPS FY 2009 final rule at 73 FR 46809 and in the CY 2009 OPPS/ASC final rule

with comment period at 73 FR 68781.

On December 31, 2008, CMS advised hospita ls that they would no longer be

required to submit data for the RHQDAPU pr ogram measure AMI-6-Beta blocker at

arrival, beginning with discharges occurr ing on April 1, 2009. This change was based on

the evolving evidence regarding AMI patient care, as well as changes in the American

College of Cardiology/American Heart A ssociation (ACC/AHA) practice guidelines for

ST-segment elevation myocardial infarcti on and non-ST segment elevation myocardial

infarction, upon which AMI-6 is based. CMS took action to remove the measure from

reporting initiatives based on the lack of support by the measur e developer and the

clinical and scientific considerations described in the FY 2010 IPPS/RY 2010 LTCH PPS

final rule at 74 FR 43863.

We had previously discussed considera tions relating to retiring or replacing

measures in the FY 2008 IPPS final rule with comment period and the FY 2009 IPPS

final rule, including the “topping out” of hospitals’ performance under a measure

(72 FR 47358 through 47359 and 73 FR 48603 through 48604, respectively). However,CMS-1498-P 378

in this instance, the measure no longer “represent[s] the best clinical practice,” an

additional basis under section 1886( b)(3)(B)(viii)(VI) of the Act for retiring a measure.

In the FY 2010 IPPS/RY 2010 LTCH PPS final rule, we formally retired the AMI-6

measure from the RHQDAPU program for the FY 2011 payment determination and

subsequent payment determinations.

For the FY 2011 payment determination, we retained 41 of the FY 2010 quality

measures; harmonized two FY 2010 RHQDAPU program quality measures (combining

PSI 04-Death among surgical patients with tr eatable serious complications; and Nursing

Sensitive – Failure to rescue into a single measure (Death among surgical inpatients with

serious, treatable complications); added two chart-abstracted measures

(SCIP-Infection-9: Postoperative Urinary Cath eter Removal on Post Operative Day 1 or 2

and SCIP-Infection-10: Perioperative Temp erature Management); and added two

structural measures (1) Participation in a Systematic Clinical Database Registry for

Stroke Care; and (2) Participation in a Systematic Clinical Database Registry for Nursing

Sensitive Care) (74 FR 43868 through 43873). The 46 measures we adopted for the

FY 2011 payment determination are:

Topic RHQDAPU Program Quality Measures for the FY 2011 Payment Determination as Finalized in FY 2010 IPPS/RY 2010 LTCH PPS Final Rule Acute Myocardial Infarction (AMI)

● AMI-1 Aspirin at arrival

● AMI-2 Aspirin prescribed at discharge

● AMI-3 Angiotensin Converting Enzyme Inhibitor (ACE-I) or Angiotensin II Receptor Blocker (ARB) for left ventricular systolic dysfunction

● AMI-4 Adult smoking cessation advice/counseling

● AMI-5 Beta blocker prescribed at dischargeCMS-1498-P 379

Topic RHQDAPU Program Quality Measures for the FY 2011 Payment Determination as Finalized in FY 2010 IPPS/RY 2010 LTCH PPS Final Rule

● AMI-7a Fibrinolytic (thrombolytic) agent received within 30 minutes of hospital arrival

● AMI-8a Timing of Receipt of Primary Percutaneous Coronary Intervention (PCI) Heart Failure (HF)

● HF-1 Discharge instructions

● HF-2 Left ventricular function assessment

● HF-3 Angiotensin Converting Enzyme Inhibitor (ACE-I) or Angiotensin II Receptor Blocker (ARB) for left ventricular systolic dysfunction

● HF-4 Adult smoking cessation advice/counseling Pneumonia (PN)

● PN-2 Pneumococcal vaccination status

● PN-3b Blood culture performed befo re first antibiotic received in hospital

● PN-4 Adult smoking cessation advice/counseling

● PN-5c Timing of receipt of initial antibiotic following hospital arrival

● PN-6 Appropriate initial antibiotic selection

● PN-7 Influenza vaccination status Surgical Care Improvement Project (SCIP)

● SCIP-1 Prophylactic antibiotic recei ved within 1 hour prior to surgical incision

● SCIP-3 Prophylactic antibiotics discontinued within 24 hours after surgery end time

● SCIP-VTE-1: Venous thromboem bolism (VTE) prophylaxis ordered for surgery patients

● SCIP-VTE-2: VTE prophylaxis within 24 hours pre/post surgery

● SCIP-Infection-2: Prophylactic antibiotic selection for surgical patients

● SCIP-Infection-4: Cardiac Su rgery Patients with Controlled 6AM Postoperative Serum Glucose

● SCIP-Infection-6: Surgery Patie nts with Appropriate Hair Removal

● SCIP–Infection-9: Postoperative Urinary Catheter Removal on Post Operative Day 1 or 2*

● SCIP-Infection-10: Periope rative Temperature Management*

● SCIP-Cardiovascular-2: Surgery Patients on a Beta Blocker Prior to Arrival Who Received a Beta Blocker During the Perioperative Period Mortality Measures (Medicare Patients)

● MORT-30-AMI: Acute Myocardial Infarction 30-day mortality – Medicare patientsCMS-1498-P 380

Topic RHQDAPU Program Quality Measures for the FY 2011 Payment Determination as Finalized in FY 2010 IPPS/RY 2010 LTCH PPS Final Rule

● MORT-30-HF: Heart Failure 30-day mortality Medicare patients

● MORT-30-PN: Pneumonia 30-da y mortality -Medicare patients Patients' Experience of Care

● HCAHPS survey Readmission Measure (Medicare Patients)

● READ-30-HF: Heart Failure 30-Day Risk Standardized Readmission Measure (Medicare patients)

● READ-30-AMI: Acute Myocardial Infarction 30-Day Risk Standardized Readmission Measure (Medicare patients)

● READ-30-PN: Pneumonia 30-Day Risk Standardized Readmission Measure (Medicare patients) AHRQ Patient Safety Indicators (PSIs), I npatient Quality Indicators (IQIs) and Composite Measures

● PSI 06: Iatrogenic pneumothorax, adult

● PSI 14: Postoperative wound dehiscence

● PSI 15: Accidental puncture or laceration

● IQI 11: Abdominal aortic aneurysm (AAA) mortality rate (with or without volume)

● IQI 19: Hip fracture mortality rate

● Mortality for selected su rgical procedures (composite)

● Complication/patient safety fo r selected indicators (composite)

● Mortality for selected medical conditions (composite) AHRQ PSI and Nursing Sensitive Care**

● Death among surgical inpatients with serious, treatable complications Cardiac Surgery

● Participation in a Systematic Database for Cardiac Surgery
Stroke Care

● Participation in a Systematic Clinical Database Registry for Stroke Care* Nursing Sensitive Care

● Participation in a Systematic Clinical Database Registry for Nursing Sensitive Care*

(2) Maintenance of Technical Specifications for Quality Measures

The technical specifications for the R HQDAPU program measures, or links to

Web sites hosting technical specifications, are contained in the CMS/The Joint

Commission Specifications Manual for National Hospital Inpatient Quality Measures

(Specifications Manual). This Specificati ons Manual is posted on the CMS QualityNetCMS-1498-P 381

Web site at https://www.QualityNet.org/. We maintain the technical specifications by

updating this Specifications Ma nual semiannually, or more fr equently in unusual cases,

and include detailed in structions and calculation algorith ms for hospitals to use when

collecting and submitting data on required measures. These semiannual updates are

accompanied by notifications to users, provi ding sufficient time between the change and

the effective date in order to allow users to incorporate changes and updates to the

specifications into data collection systems.

(3) Public Display of Quality Measures

Section 1886(b)(3)(B)(viii)(VII) of the Ac t requires that the Secretary establish

procedures for making quality data available to the public after ensuring that a hospital

has the opportunity to review its data befo re they are made public. To meet this

requirement, data from the RHQDAPU program are typically displayed on CMS Web

sites such as the Hospital Compare Web site, http://www.hospita lcompare.hhs.gov after a

30-day preview period. An interactive Web tool , this Web site assi sts beneficiaries by

providing information on hospital quality of care to those who need to select a hospital.

It further serves to encourage beneficiaries to work with their doctors and hospitals to

discuss the quality of care hospitals provide to patients, thereby pr oviding an additional

incentive to hospitals to improve the quality of care that they furnish. The RHQDAPU

program currently includes process of care measures, risk adjusted outcome measures,

the HCAHPS patient experience of care survey , and structural measures, all of which are

featured on the Hospital Compare Web site. However, information that may not be

salient to or understood by beneficiaries a nd information for which there are unresolvedCMS-1498-P 382

display issues or design considerations for inclusion on Hospital Compare may be made

available on other CMS Web sites that are not intended to be used as an interactive Web

tool, such as http://www.cms.hhs.gov/HospitalQualityInits/ . Publicly reporting the

information in this manner, though not on the Hospital Compare Web site, allows CMS

to meet the requirement under section 1886(b)(3 )(B)(viii)(VII) of the Act for establishing

procedures to make quality data used fo r RHQDAPU payment determinations available

to the public following a preview period. In such circumstances, affected parties are

notified via CMS listservs, CMS e-mail blasts , national provider ca lls, and QualityNet

announcements regarding the release of previe w reports followed by the posting of data

on a Web site other than Hospital Compare

. 2. Retirement of RHQDAPU Program Measures

a. Considerations in Retiring Qua lity Measures from the RHQDAPU Program

Unless stated otherwise, we generally retain measures from the current year’s

RHQDAPU program measure set for subsequent y ears’ measure set. We have previously

retired one measure, PN-1: Oxygenation Assessment for Pneumonia, from the

RHQDAPU program on the basis of high unv arying performance among hospitals, as

measures with very high performance among hospitals present little opportunity for

improvement, and do not provide meaningful distinctions in performance for consumers.

We also have retired one measure from the program because it no longer “represent[ed]

the best clinical practice,” as stated under section 1886(b)(3)(B )(viii)(VI) of the Act. In

this latter situation, we stated that when th ere is reason to believe that the continued

collection of a measure as it is currently spec ified raises potential pa tient safety concernsCMS-1498-P 383

that it is appropriate for CMS to take immediate action to remove a measure from the

RHQDAPU program and not wait for the annual rulemaking cycle. Therefore, in the

FY 2010 IPPS/RY 2010 LTCH PPS final rule, we stated that we would promptly retire

such measures followed by subsequent confirmation of the retirement in the next IPPS

rulemaking. When we do so, we will notif y hospitals and the public through the usual

hospital and QIO communication channels used for the RHQDAPU program, which

include memo and email notification and QualityNet Web site articles and postings.

In the FY 2010 IPPS/RY 2010 LTCH PPS proposed rule, we invited public

comment regarding additional RHQDAPU progra m measures that should be considered

for retirement along with criteria that shoul d be used for retiring measures. In the

FY 2010 IPPS/RY 2010 LTCH PPS final rule , commenters recommended 11 RHQDAPU

program measures for retirement for various reasons (74 FR 43865). Among the criteria

suggested by commenters that CMS should cons ider when determining whether to retire

RHQDAPU program measures were: (1) meas ure performance among hospitals is so

high and unvarying that meaningful distin ctions and improvement s in performance can

no longer be made; (2) performance or imp rovement on a measure does not result in

better patient outcomes; (3) a measure does not align with current clinical guidelines or

practice; (4) the availability of a more broadl y applicable (across settings, populations, or

conditions) quality measure for the topic; (5) the availability of a measure that is more

proximal in time to desired patient outcomes for the particular topic; (6) the availability

of a measure that is more strongly associ ated with desired patient outcomes for the

particular topic; (7) collec tion and/or public reporting of a measure leads to negativeCMS-1498-P 384

unintended consequences other than patient harm. We agreed with commenters that

these criteria should be among those c onsidered in evaluating current RHQDAPU

program measures for retirement. We again invite commenters to submit suggestions for

additional measure retirement criteria for CMS to consider.

b. Proposed Retirement of Quality Measures under the RHQDAPU Program for the

FY 2011 Payment Determinati on and Subsequent Years

In the FY 2009 IPPS final rule, for the FY 2010 payment determination we

adopted nine measures that were developed by the Agency for Healthcare Research and

Quality (AHRQ), and in the FY 2010 IPPS/RY 2010 LTCH PPS we subsequently

retained these measures for the FY 2011 paym ent determination. One of these measures

was the AHRQ Mortality for Selected Surg ical Procedures Composite, which is

comprised of measures from the AHRQ Inpatient Quality Indicator (IQI) measure set. In

late June of 2009, following an NQF st eering committee evaluation of the AHRQ

Mortality for Selected Surgical Proced ures composite, the AHRQ issued guidance 6 that

this composite is “not recommended for co mparative reporting” as specified due to

significant evidence gaps, and that these significant evidence gaps are unlikely to be

addressed with further developm ent or validation work. This guidance is available at:

http://www.qualityindicators.ahrq.gov/downl oads/publications/AHRQ%20QI%20Guide

%20to%20Comparativ e%20Reporting%20v10.pdf

.

6 AHRQ. Guidance on Using the AHRQ QI for Hospital-Level Comparative Reporting. June 2009. http://www.qualityindicators.ahrq.gov/downl oads/publications/AHRQ%20QI%20Guide %20to%20Comparativ e%20Reporting%20v10.pdfCMS-1498-P 385

For this reason, we are proposing to retire the Mortality for Selected Procedures

Composite from the RHQDAPU program measure set from the RHQDAPU program

measure set for the FY 2011 payment determination and for subsequent payment

determinations because the measure is not considered suitable for purposes of

comparative reporting by the measure developer. We will neither calculate this measure

for the FY 2011 payment determination, nor di splay results for this measure on Hospital

Compare . We invite comment on our proposal to retire this measure from the

RHQDAPU program for the FY 2011 payment determination and for subsequent

payment determinations. We also invite commenters to submit suggestions and

rationales for retirement of ot her RHQDAPU program measures.

Set out below are the RHQDAPU program quality measures for the FY 2011

payment determination reflecting our proposed retirement of one measure:

Topic RHQDAPU Program Quality Measures for the FY 2011 Payment Determination Reflecting Proposed Retirement of One Measure Acute Myocardial Infarction (AMI)

● AMI-1 Aspirin at arrival

● AMI-2 Aspirin prescribed at discharge

● AMI-3 Angiotensin Converting Enzyme Inhibitor (ACE-I) or Angiotensin II Receptor Blocker (ARB) for left ventricular systolic dysfunction

● AMI-4 Adult smoking cessation advice/counseling

● AMI-5 Beta blocker prescribed at discharge

● AMI-7a Fibrinolytic (thrombolytic) agent received within 30 minutes of hospital arrival

● AMI-8a Timing of Receipt of Primary Percutaneous Coronary Intervention (PCI) Heart Failure (HF)

● HF-1 Discharge instructions

● HF-2 Left ventricular function assessment

● HF-3 Angiotensin Converting Enzyme Inhibitor (ACE-I) or Angiotensin II Receptor Blocker (ARB) for left ventricular systolicCMS-1498-P 386

Topic RHQDAPU Program Quality Measures for the FY 2011 Payment Determination Reflecting Proposed Retirement of One Measure dysfunction

● HF-4 Adult smoking cessation advice/counseling Pneumonia (PN)

● PN-2 Pneumococcal vaccination status

● PN-3b Blood culture performed befo re first antibiotic received in hospital

● PN-4 Adult smoking cessation advice/counseling

● PN-5c Timing of receipt of initial antibiotic following hospital arrival

● PN-6 Appropriate initial antibiotic selection

● PN-7 Influenza vaccination status Surgical Care Improvement Project (SCIP)

● SCIP-1 Prophylactic antibiotic recei ved within 1 hour prior to surgical incision

● SCIP-3 Prophylactic antibiotics discontinued within 24 hours after surgery end time

● SCIP-VTE-1: Venous thromboem bolism (VTE) prophylaxis ordered for surgery patients

● SCIP-VTE-2: VTE prophylaxis within 24 hours pre/post surgery

● SCIP-Infection-2: Prophylactic antibiotic selection for surgical patients

● SCIP-Infection-4: Cardiac Su rgery Patients with Controlled 6AM Postoperative Serum Glucose

● SCIP-Infection-6: Surgery Patie nts with Appropriate Hair Removal

● SCIP–Infection-9: Postoperative Urinary Catheter Removal on Post Operative Day 1 or 2*

● SCIP-Infection-10: Periope rative Temperature Management*

● SCIP-Cardiovascular-2: Surgery Patients on a Beta Blocker Prior to Arrival Who Received a Beta Blocker During the Perioperative Period Mortality Measures (Medicare Patients)

● MORT-30-AMI: Acute Myocardial Infarction 30-day mortality – Medicare patients

● MORT-30-HF: Heart Failure 30-day mortality Medicare patients

● MORT-30-PN: Pneumonia 30-da y mortality -Medicare patients Patients' Experience of Care

● HCAHPS survey Readmission Measure (Medicare Patients)

● READ-30-HF: Heart Failure 30-Day Risk Standardized Readmission Measure (Medicare patients)

● READ-30-AMI: Acute Myocardial Infarction 30-Day Risk Standardized Readmission Measure (Medicare patients)

● READ-30-PN: Pneumonia 30-Day Risk Standardized ReadmissionCMS-1498-P 387

Topic RHQDAPU Program Quality Measures for the FY 2011 Payment Determination Reflecting Proposed Retirement of One Measure Measure (Medicare patients) AHRQ Patient Safety Indicators (PSIs), I npatient Quality Indicators (IQIs) and Composite Measures

● PSI 06: Iatrogenic pneumothorax, adult

● PSI 14: Postoperative wound dehiscence

● PSI 15: Accidental puncture or laceration

● IQI 11: Abdominal aortic aneurysm (AAA) mortality rate (with or without volume)

● IQI 19: Hip fracture mortality rate

● Complication/patient safety fo r selected indicators (composite)

● Mortality for selected medical conditions (composite) AHRQ PSI and Nursing Sensitive Care**

● Death among surgical inpatients with serious, treatable complications Cardiac Surgery

● Participation in a Systematic Database for Cardiac Surgery
Stroke Care

● Participation in a Systematic Clinical Database Registry for Stroke Care* Nursing Sensitive Care

● Participation in a Systematic Clinical Database Registry for Nursing Sensitive Care*

3. Proposed Expansion Plan for Quality Measures for the FY 2012, FY 2013, and

FY 2014 Payment Determinations

a. Considerations in Expanding and Updating Quality Measures under the RHQDAPU

Program

In the FY 2009 IPPS final rule (73 FR 48613) and the FY 2010 IPPS/RY 2010

LTCH PPS final rule (74 FR 43866 through 43869), we acknowledged the data collection

burden for hospitals participating in the RHQD APU program, and reite rated our desire to

expand the RHQDAPU program measure set while minimizing burden and seeking to

provide alternative mechanisms for data s ubmission for the RHQDAPU program. In the

FY 2010 IPPS/RY 2010 LTCH PPS final rule, we also stated that in future expansions

and updates to the RHQDAPU program meas ure set, we would be taking intoCMS-1498-P 388

consideration several im portant goals. These goals include: (a) expanding the types of

measures beyond process of care measures to include an increased number of outcome

measures, efficiency measures, and patients' experience-of-care measures; (b) expanding

the scope of hospital services to which the measures apply; (c) considering the burden on

hospitals in collecting chart-abstracted data; (d) harmonizing the measures used in the

RHQDAPU program with other CMS quality prog rams to align incentives and promote

coordinated efforts to improve quality; (e) seeking to use measures based on alternative

sources of data that do not require chart abstraction or that utilize data already being

reported by many hospitals, such as data that hospitals report to clinical data registries, or

all-payer claims data bases; and (f) weighing the relevance and utility of the measures

compared to the burden on hospitals in submitting data under the RHQDAPU program.

Specifically, we give priority to quality measures that assess performance on:

(a) conditions that result in the greatest mortality and morbidity in the Medicare

population; (b) conditions that are high volum e and high cost for the Medicare program;

and (c) conditions for which wide cost and treatment variations have been reported,

despite established clinical guidelines. We ha ve used and continue to use these criteria to

guide our decisions regarding what measur es to add to the RHQDAPU program measure

set.

RHQDAPU program measures were in itially based solely on a hospital’s

submission of chart-abstracted quality measure data. However, in recent years we have

adopted measures that do not require ch art abstraction, including structural and

claims-based quality measures which we can calculate using other data sources. ThisCMS-1498-P 389

supports our goal of expanding the me asures for the RHQDAPU program while

minimizing the burden on hospitals and, in par ticular, without significantly increasing the

chart abstraction burden.

In addition to structural and claims-bas ed measures, we previously noted that

registries 7 and electronic health records (EHRs) are potential alternative sources of

hospital data for the RHQDAPU program. We observed that many hospitals already

submit data to and participate in existing registries, and that registries often capture

outcome information and provide ongoing qu ality improvement feedback to registry

participants. We envisioned that instead of requiring hospitals to submit the same data to

CMS that many hospitals are already submitting to registries, that we would collect the

data directly from the registries. This could enable the expansion of the RHQDAPU

program measure set without increasing the bur den of data collection for those hospitals

participating in the registries. We cited as examples of registries actively used by

hospitals the Society of Thoracic Surgeons (STS) Cardiac Surgery Registry (with

approximately 90 percen t participation by cardiac surgery programs), the AHA Stroke

Registry (with approximately 1200 hospitals participating), and the American Nursing

Association (ANA) Nursing Sensitive Meas ures Registry (with approximately 1400

hospitals participating). In the FY 2009 IPPS final rule (73 FR 48608 through 48609),

we adopted the first RHQDAPU pr ogram measure related to regi stries: Participation in a

Systematic Database for Cardiac Surgery. Subsequently, in the FY 2010 IPPS/RY 2010

7 A registry is a collection of clinical data for purposes of assessing clinical performance, quality of care, and opportun ities for quality improvement.CMS-1498-P 390

LTCH PPS final rule (74 FR 43870 through 43872), we adopted two additional structural

measures of registry participation for the t opics of Stroke and Nursing Sensitive Care.

We continue to evaluate the feasibility of leveraging registry-based data collection

mechanisms for the RHQDAPU program and we are proposing to collect such data for

the FY 2013 payment determination.

We also stated our intention to expl ore mechanisms for data submission using

EHRs (73 FR 48614; 74 FR 43866, 43892). Establishing such a system will require

interoperability between EHRs and CMS data collection systems, additional

infrastructure development on the part of hospitals and CMS, and the adoption of

standards for the capturing, formatting, and transmission of data elements that make up

the measures. However, once these activities are accomplished, the adoption of measures

that rely on data obtained directly from EHRs will enable us to expand the RHQDAPU

program measure set with less cost and burden to hospitals.

In the FY 2009 IPPS final rule, we adopted nine AHRQ measures for the

RHQDAPU program, one of which is now proposed for retirement for the FY 2011

payment determination and subs equent payment determinations in this proposed rule.

We stated that we would initially calculate the measures using Medicare claims data

(73 FR 48608). However, we also stated that we remained interested in using all-payer

claims data to calculate them and that we might propose to collect such data in the future.

In the FY 2010 IPPS/RY 2010 LTCH PPS proposed rule (74 FR 24169), we invited input

and suggestions on how all-paye r claims data can be collected and used by CMS toCMS-1498-P 391

calculate these measures, as well as on additional AHRQ measures that we should

consider adopting for future RHQDAP U program payment determinations.

In summary, we will continue to pursue goals regarding the expansion and

updating of quality measures under the RHQDAPU program while minimizing burden.

We will take into account the public comments we receive on the possible uses of EHRs,

registries, and all-payer claims data in the RHQDAPU program. We also will consider

the measure selection criteria suggested by various commenters in prioritizing and

selecting quality measures for the future.” In particular, we are concerned about the lack

of progress in reducing the rate s of healthcare associated infections that was recently

reported in the 2009 National Healthcare Quality Report

( http://www.ahrq.gov/qual/nhqr09/nhqr09.pdf ). For example, the report found that rates

of postoperative sepsis increased by 8 percent. It is evident that more attention needs to

be paid to ensure health care does not re sult in avoidable harm and that patients are

informed about hospitals’ performance. We are soliciting comment on the option to

include among our prioritization criteria qua lity measures that assess performance on

healthcare associated infections. Also, wh ile the current and proposed measures cover

many aspects of healthcare associated in fections, we are soliciting public comment on

additional measures that coul d be added to those hospitals would report and that CMS

would make available to the public in order promote improvement in healthcare

associated infection rates.

In the past, we have proposed to a dd new RHQDAPU program measures for one

year’s payment determination in a given rulema king cycle. Although in prior years weCMS-1498-P 392

have identified various measures for future consideration, we ha ve not proposed or

finalized measures for the RHQDAPU program beyond those to be collected for the

purpose of the next sequential payment determination. In this FY 2011 rulemaking cycle,

we are proposing an expansion to the RHQDAP U program that will take place over three

payment years, and are proposing to add measures not only for the FY 2012 payment

determination, but also for the FY 2013 and FY 2014 payment determinations. To the

extent we finalize some or a ll of these proposed measures th is year, we believe that we

will be providing greater certainty for hospitals to plan to meet future reporting

requirements and implement related quality improvement efforts. We will also have

more time to prepare, organi ze and implement the necessary infrastructure necessary to

collect data on the measures a nd make payment determinations.

Finally, in section V.A.5.(2) of this pr oposed rule, we discuss a proposal to make

RHQDAPU payment determinations beginning with FY 2013 using, in part, a

consecutive calendar year of quality measur e data. This proposed approach, of

synchronizing the quarters for which data on these measures must be submitted during

each year with the quarters we will use to make payment deter minations, would apply

beginning with January 1, 2011 discharges although it would not affect our payment

determinations until FY 2013. We invite public comment on the measures and timeframe

for their addition to the RHQDAPU program measure set.CMS-1498-P 393

b. Proposed RHQDAPU Program Quality Measures for the FY 2012 Payment

Determination

(1) Proposed Retention of 45 Existing R HQDAPU Program Quality Measures for the

FY 2012 Payment Determination

As noted above, we are proposing to retire the AHRQ Mortality for Selected

Surgical Procedures Composite for the FY 2011 payment determination. We are

proposing that the remaining 45 of the 46 quality measures for the FY 2011 RHQDAPU

program payment determination will be used for the FY 2012 RHQDAPU program

payment determination. Details regarding data submissi on requirements are discussed in

section V.A.5. of this proposed rule. We invite comment on the proposal to include all

FY 2011 measures except for the AHRQ Morta lity for Selected Surgical Procedures

Composite in the FY 2012 RHQDAPU measure set.

In proposing to retain 45 of the 46 FY 2011 measures, we recognize that we are

not significantly reducing the burden for hos pitals, since the one measure that we are

proposing to remove is a measure that curren tly is calculated based on Medicare claims.

At the same time, we are proposing to ex pand the measures for the FY 2012 and

subsequent years’ payment de terminations, which may add additional reporting burdens

and new focus areas for hospital quality improve ment efforts. In view of our concern

about the burden of reporting for hospitals, es pecially when it comes to reporting chartabstracted measures, another option that we have considered to accommodate the

expansion of the measure set is the retiremen t of additional measures. Specifically, we

have considered retiring one or more of those measures suggested by various commentersCMS-1498-P 394

that were listed in the FY 2010 IPPS/RY 2010 LTCH PPS final rule (74 FR 43865). We

noted in that final rule that 11 RHQDAPU program chart-abstracted measures were

recommended for retirement by commenters. Seven of these 11 measures were

recommended for retirement based on their performance being uniformly high

nationwide, with little variability among hospitals. Information on the performance rates

for hospitals reporting is available at:

http://www.cms.hhs.gov/HospitalQualityInits/ downloads/HospitalNa tionalLevelPerforma

nce.pdf . These measures are:

● AMI-1 Aspirin at arrival

● AMI-3 ACEI/ARB for left ventricular systolic dysfunction

● AMI-4 Adult smoking cessation advice/counseling

● AMI-5 Beta-blocker prescribed at discharge

● HF-4 Adult smoking cessation advice/counseling

● PN-4 Adult smoking cessation advice/counseling

● SCIP-Infection-6: Surgery patient s with appropriate hair removal

In addition to these “topped out” measures, commenters recommended we retire

four additional measures listed below fo r reasons unrelated to high unvarying

performance. These measures are:

● HF-1 Discharge instructions

● PN- 3b Blood culture performed before first antibiotic received in hospital

● SCIP-Infection-2: Prophylactic antibiotic selection for surgical patientsCMS-1498-P 395

● SCIP-Infection-4: Cardiac Surg ery Patients with Controlled 6AM

Postoperative Serum Glucose

Reasons given by commenters included the following: (1) Care process measured

has weak or no relationship to better outcome s; (2) Collection burde n of measure negates

or outweighs the benefit of reporting the me asure; and (3) Measure perceived to be

discordant with current guidelines.

We invite comments on the option to retire one or more of these 11 measures that

were suggested for retirement by commenters to the FY 2010 IPPS proposed rule. We

note that some of these measures were proposed for electronic reporting under the

program for payment incentives for meanin gful use of electronic health records

(75 FR 1896).

In addition, we are considering an op tion under which if we propose and finalize

measures that are specified to more broadl y address a clinical topic, and thus would

require hospitals to submit the same data that they are already submitting on more

narrowly specified measures that we previ ously adopted for the RHQDAPU program, we

would propose to retire the more narrowl y specified measures from the RHQDAPU

measure set. An example of this that we are considering would be to retire the current

Influenza and Pneumoccocal vaccination meas ures that apply only to the Pneumonia

admission inpatient population (PN-2 Pneumo coccal vaccination status; and PN-7

Influenza vaccination status) if we proposed and finalized measures of Influenza and

Pneumoccocal vaccination that apply to all inpatients. We invite comments on thisCMS-1498-P 396

option to retire narrowly specified measures in order to accommodate more broadly

specified measures on a given topic.

(2) Proposed New Claims-Based Measures

We are proposing to add 10 claims-bas ed measures to the RHQDAPU program

measure set for the FY 2012 payment determin ation: 2 AHRQ Patient Safety Indicators

and 8 Hospital Acquired Condition measures . These proposed measures would be

calculated using up to three years’ of Me dicare claims for discharges prior to

January 1, 2011. These measures are discussed below.

(A) Proposed AHRQ Patie nt Safety Indicators

In the FY 2009 IPPS final rule we adopted a number of AHRQ Patient Safety

Indicators and Inpatient Quality Indicators for the RHQDAPU program to be calculated

using Medicare claims. The addition of these measures to the RHQDAPU program

allowed us to expand the RHQDAPU program meas ure set to include me asures of patient

safety, in-hospital mortality, adverse even ts and complications without increasing the

data submission burden on hospitals. In the FY 2010 IPPS/RY 2010 LTCH PPS final

rule, we retained these measures for th e FY 2011 payment determination. In this

proposed rule, we are proposing to retire one of those measures (Mortality for Selected

Surgical Procedures Composite) from th e RHQDAPU program measure set for the

FY 2011 payment determination. For the FY 2012 payment determination, we are

proposing to adopt 2 additional Patient Safety Indicators deve loped by the AHRQ. These

are: PSI-11: Post-Operative Respiratory Failure and PSI- 12: Post-Operative Pulmonary

Embolism (PE) or Deep Vein Thrombosis ( DVT). Both measures address post-operativeCMS-1498-P 397

complications, a topic that is currently not well represented in the RHQDAPU program

measure set. Both measures are NQF-endors ed, and have a Tier 1 evidence rating by

AHRQ, the measure developer. Indicators given this level of evidentiary rating by AHRQ

have the strongest evidence base, with establis hed evidence in several or most evidentiary

areas established by AHRQ, no s ubstantial evidence suggesting that the indicators may not be

useful for comparative repor ting purposes, and in most cases the indicators have been

NQF-endorsed. 8 The specific measures that we ar e proposing to add are NQF-endorsed,

thus reflecting consensus among affected parties, and are deemed appropriate for

comparative public reporting by the measure developer. Like the current AHRQ

measures in the RHQDAPU program, thes e indicators are risk-adjusted outcome

measures that can be calculated based on ex isting Medicare claims, placing no additional

reporting burden on hospitals wh ile allowing us to expand outcomes measurement in the

RHQDAPU program. The specifications for these measures can be found at

http://www.qualityindicators.ahrq.gov/TechnicalSpecs41.htm#PSI41 . We invite

comment on our proposal to adopt these tw o AHRQ Patient Safety Indicators for the

FY 2012 payment determination.

(B) Proposed Hospital Acquired Condition (HAC) Measures

Section 1886(d)(4)(D) of the Act required th e Secretary to select, in consultation

with the Centers for Disease Control and Prev ention (CDC), at least two conditions that:

(a) are high cost, high volume, or both; (b) are assigned to a higher paying MS–DRG

when present as a secondary diagnosis (t hat is, conditions under the MS–DRG system

8 http://www.qualityindicators.ahrq.gov/downloads/publications/AHRQ%20QI%20Guide%20to%20Compar ative%20Reporting%20v10.pdfCMS-1498-P 398

that are CCs or MCCs); and (c) could reas onably have been prevented through the

application of evidence based guidelines. We currently have 10 categories of Hospital

Acquired Conditions (HACs). We refer readers to: section II.F. of the FY 2008 IPPS

final rule with comment period (72 FR 47202 through 47218); section II.F. of the

FY 2009 IPPS final rule with comment period (73 FR 48474 through 48486); and

section II.F. of the FY 2010 IPPS/RY 2010 LTCH PPS final rule ( 74 FR 43782 through

43785 ) for detailed discussions rega rding the selection of the current 10 HAC categories.

We refer readers to section II.F. of this proposed rule for additi onal discussion and our

proposals for HAC policy for FY 2011.

We have worked collaboratively with public health and infectious disease

professionals from across HHS, including CDC, AHRQ, and the Office of Public Health

and Science, to identify and select prev entable HACs with input and comment from

affected parties. CMS and CDC have also collaborated on the process for hospitals to

submit a present on admission (POA) indicator for each diagnosis listed on IPPS hospital

Medicare claims and on the payment impli cations for POA reporting (74 FR 43783)

.
CMS, CDC and AHRQ held jointly sponsored HAC and POA Listening Sessions

(December 17, 2007 and December 18, 2008) to r eceive input from affected parties,

individuals, and organizations regarding the selection and definition of HACs. The

adoption of HACs were informed and continue to be informed by feedback received

during the listening sessions, as well as through public comment received during the IPPS

rulemaking process. In addition to receiving comments regarding the selection of

conditions and POA indicator reporting, in the FY 2010 IPPS/LTCH PPS final ruleCMS-1498-P 399

(74 FR 43785), commenters suggested that CMS consider making aggregate POA

information publicly available, and providing comparative information as a means of

facilitating improvements in preventing the incidence of HACs.

We are proposing to adopt as RHQDAP U measures for the FY 2012 payment

determination eight (of 10) current HACs define d in section II.F. of this proposed rule,

six of which have been identified by NQF as serious reportable events, and to publicly

report these measures as we do other RHQD APU program measures. These measures

are:

● Foreign Object Retained After Surgery

● Air Embolism

● Blood Incompatibility

● Pressure Ulcer Stages III & IV

● Falls and Trauma: (Includes: Fract ure, Dislocation, Intracranial Injury,

Crushing, Injury, Burn, Electric Shock)

● Vascular Cathete r-Associated Infection

● Catheter-Associated Urinary Tract Infection (UTI)

● Manifestations of Poor Glycemic Control

We do not believe that it is necessary to propose to adopt the other two current

HAC categories as RHQDAPU measures because the topics that they deal with would

substantially overlap with other RHQDAPU pr ogram measures discussed below that we

are proposing to adopt for future payment dete rminations as chart- abstracted measures

(which allows us to collect data on all patie nts). By contrast, the eight proposed HACCMS-1498-P 400

measures are claims-based measures for which we can only (at this time) collect data

only on Medicare beneficiaries.

We are proposing to utilize Medicare claims data to calculate measure rates for

these eight HACs using the ICD-9-CM codes in conjunction with POA coding of “N” or

“U,” as defined in IPPS rulemaking. We refer readers to section II.F.6. of the FY 2008

IPPS final rule with comment period (72 FR 47202 through 47218), section II.F.7. of the

FY 2009 IPPS final rule (73 FR 48474 through 48486), section II.F.6. ( 74 FR 43782

through 43785) of the FY 2010 IPPS/RY 2010 LTCH PPS final rule, and section II.F. of

this proposed rule for detailed discussions regarding the use of the POA indicator in

conjunction with ICD-9-CM codi ng to determine the presence of HACs. We also refer

readers to the current ICD-9-CM codes and proposed updates for these eight HAC

categories in this proposed rule. We ar e proposing to use the ICD-9-CM codes in

conjunction with the “N” and “U” POA indicators for the HAC categories that will be

finalized in the FY 2011 IPPS/RY 2011 LTCH PPS final rule to calculate the eight HAC

measures for the RHQDAPU program.

We believe that these HAC measures reflect consensus among affected parties as

required for RHQDAPU program m easures by section 1886(b)(3)(B)(viii)(V) of the Act.

In addition to meeting the consensus re quirement through ru lemaking and public

comment, Vascular Catheter-Associated Infection and Catheter-Associated UTI are the

subject of a quality measure which gained NQF endorsement in August 2009. The

remaining six HAC categories have been identif ied as serious reportable events through

the NQF consensus process and have also b een selected as HACs through rulemakingCMS-1498-P 401

and public comment. Data re porting requirements for these measures are provided in

section V.A.5. of this proposed rule. We invite comment on our proposal to adopt these

eight HAC measures for the FY 2012 payment determination.

(3) Proposed All-Patient Volume Data for Selected MS-DRGs

CMS currently displays volume data fo r 70 MS-DRGs, 55 of which relate to

RHQDAPU program measures on the Hospital Compare Web site. However, the volume

data currently shown on Hospital Compare is based on Medicare claims only. Although

we do not consider volume alone to be a quality measure unless volume has been

determined to be an indicator of quality, we believe that to the extent all-patient volume

data are related to the measures, as they pr ovide context for the quality measures in the

inpatient hospital setting, and may assist Hospital Compare users in understanding the

measure calculations. In general, in implementing RHQDAPU program measures, we

have sought where currently po ssible to measure the care rendered to all patients within a

hospital, and not just Medicare patients. For this reason, the chart-abstracted process of

care measures we collect and display on Hospital Compare are based on the entire

inpatient population for the hospital.

We are proposing that hospitals begin sub mitting as data on measures selected for

the RHQDAPU program the all-patient data elem ents discussed in section V.A.5. of this

proposed rule for 55 MS-DRGs displayed on Hospital Compare that relate to adopted

RHQDAPU program measures. The specific MS -DRGs are listed below. As stated

above, we believe that the add ition of this data will enable us and Medicare beneficiaries

to better understand and ev aluate the quality of care provide d by hospitals with respect toCMS-1498-P 402

both the chart-abstracted and claims-based measures. We intend to publicly display this

volume data along with the corresponding measure results on Hospital Compare

. Hospitals would begin reporting these data once annually beginning with January 1, 2011

discharges by submitting the all-patient data elements needed to calculate MS-DRG

volume to QualityNet so we can determine the volume of cases treated by a hospital for

the 55 MS-DRGs currently displayed on Hospital Compare . Rather than require

hospitals to group their all-patient claims data by MS-DRG category themselves, CMS

would use the data to be submitted by hosp itals to group the data.We invite comments on

this proposal.

We also invite comment on an alternative that hospitals submit all-patient volume

data based upon specific ICD-9- CM codes related to the pr oposed MS-DRGs rather than

all data necessary to ca lculate the MS-DRGs.

The proposed RHQDAPU meas ure set for the FY 2012 payment determination is

listed below:

Topic Proposed RHQDAPU Program Quality Measures for the FY 2012 Payment Determination Acute Myocardial Infarction (AMI)

● AMI-1 Aspirin at arrival

● AMI-2 Aspirin prescribed at discharge

● AMI-3 Angiotensin Converting Enzyme Inhibitor (ACE-I) or Angiotensin II Receptor Blocker (ARB) for left ventricular systolic dysfunction

● AMI-4 Adult smoking cessation advice/counseling

● AMI-5 Beta blocker prescribed at discharge

● AMI-7a Fibrinolytic (thrombolytic) agent received within 30 minutes of hospital arrival

● AMI-8a Timing of Receipt of Primary Percutaneous Coronary Intervention (PCI)CMS-1498-P 403

Topic Proposed RHQDAPU Program Quality Measures for the FY 2012 Payment Determination Heart Failure (HF)

● HF-1 Discharge instructions

● HF-2 Left ventricular function assessment

● HF-3 Angiotensin Converting Enzyme Inhibitor (ACE-I) or Angiotensin II Receptor Blocker (ARB) for left ventricular systolic dysfunction

● HF-4 Adult smoking cessation advice/counseling Pneumonia (PN)

● PN-2 Pneumococcal vaccination status

● PN-3b Blood culture performed befo re first antibiotic received in hospital

● PN-4 Adult smoking cessation advice/counseling

● PN-5c Timing of receipt of initial antibiotic following hospital arrival

● PN-6 Appropriate initial antibiotic selection

● PN-7 Influenza vaccination status Surgical Care Improvement Project (SCIP)

● SCIP-1 Prophylactic antibiotic recei ved within 1 hour prior to surgical incision

● SCIP-3 Prophylactic antibiotics discontinued within 24 hours after surgery end time

● SCIP-VTE-1: Venous thromboem bolism (VTE) prophylaxis ordered for surgery patients

● SCIP-VTE-2: VTE prophylaxis within 24 hours pre/post surgery

● SCIP-Infection-2: Prophylactic antibiotic selection for surgical patients

● SCIP-Infection-4: Cardiac Su rgery Patients with Controlled 6AM Postoperative Serum Glucose

● SCIP-Infection-6: Surgery Patie nts with Appropriate Hair Removal

● SCIP–Infection-9: Postoperative Urinary Catheter Removal on Post Operative Day 1 or 2

● SCIP-Infection-10: Periope rative Temperature Management

● SCIP-Cardiovascular-2: Surgery Patients on a Beta Blocker Prior to Arrival Who Received a Beta Blocker During the Perioperative Period Mortality Measures (Medicare Patients)

● MORT-30-AMI: Acute Myocardial Infarction 30-day mortality – Medicare patients

● MORT-30-HF: Heart Failure 30-day mortality Medicare patients

● MORT-30-PN: Pneumonia 30-da y mortality -Medicare patients Patients' Experience of Care

● HCAHPS surveyCMS-1498-P 404

Topic Proposed RHQDAPU Program Quality Measures for the FY 2012 Payment Determination Readmission Measure (Medicare Patients)

● READ-30-HF: Heart Failure 30-Day Risk Standardized Readmission Measure (Medicare patients)

● READ-30-AMI: Acute Myocardial Infarction 30-Day Risk Standardized Readmission Measure (Medicare patients)

● READ-30-PN: Pneumonia 30-Day Risk Standardized Readmission Measure (Medicare patients) AHRQ Patient Safety Indicators (PSIs), I npatient Quality Indicators (IQIs) and Composite Measures

● PSI 06: Iatrogenic pneumothorax, adult

● PSI 11: Post Operative Respiratory Failure *

● PSI 12: Post Operative PE or DVT *

● PSI 14: Postoperative wound dehiscence

● PSI 15: Accidental puncture or laceration

● IQI 11: Abdominal aortic aneurysm (AAA) mortality rate (with or without volume)

● IQI 19: Hip fracture mortality rate

● Complication/patient safety fo r selected indicators (composite)

● Mortality for selected medical conditions (composite) AHRQ PSI and Nursing Sensitive Care

● Death among surgical inpatients with serious, treatable complications Cardiac Surgery

● Participation in a Systematic Database for Cardiac Surgery Stroke Care

● Participation in a Systematic Clinical Database Registry for Stroke Care Nursing Sensitive Care

● Participation in a Systematic Clinical Database Registry for Nursing Sensitive Care Hospital Acquired Condition Measures *

• Foreign Object Retained After Surgery *

• Air Embolism *

• Blood Incompatibility *

• Pressure Ulcer Stages III & IV *

• Falls and Trauma: (Includes: Fracture Dislocation Intracranial Injury Crushing Injury Burn Electric Shock)*

• Vascular Catheter-Associated Infection*

• Catheter-Associated Urinary Tract Infection (UTI)*

• Manifestations of Poor Glycemic Control* All-Patient Volume Data for Selected MS-DRGs * **MS**

**- DRGs:**  038; 039; 190; 191; 193; 219; 220; 221; 224; 226; 235; 236; 237;CMS-1498-P 405

Topic Proposed RHQDAPU Program Quality Measures for the FY 2012 Payment Determination 243; 247; 280; 281; 282; 291; 292; 293; 328; 329; 330; 331; 353; 354; 417; 418; 459; 461; 462; 466; 467; 468; 469; 470; 471; 472; 477; 478; 490; 507; 515; 656; 657; 658; 659; 668; 673; 674; 675; 713; 743; 748 *

* Proposed for FY 2012 payment determination
We invite comment on these proposed measures for the FY 2012 payment

determination.

c. Proposed RHQDAPU Program Quality Measures for the FY 2013 Payment

Determination

(1) Proposed Retention of FY 2012 Payment Determination Measures for the FY 2013

Payment Determination

We generally propose to retain RHQDAPU program measures from one year to

the next. Consistent with this approach, we are proposing to retain all of the proposed

measures for the FY 2012 RHQDAPU paymen t determination, if finalized, for the

FY 2013 payment determination. We i nvite public comment on this proposal.

(2) Proposed New Chart-Abstracted Measure for the FY 2013 Payment Determination

We are proposing to add one new chart-abstracted measure for the FY 2013

payment determination - AMI-statin at discharge. This measure is similar to the

NQF-endorsed stroke measure “Ischemic stroke patients with LDL >/= 100 mg/dL, or

LDL not measured, or, who were on cholestero l reducing therapy prior to hospitalization

are discharged on a statin medication” (NQF #0439), only specified for the AMI

population. Current scientific evidence supports the continuation of statins more strongly

for AMI patients than for stroke patients. Several randomized clinical trials have proven

the benefits of statin drug s (also known as HMG Co-A reductase inhibitors) in reducingCMS-1498-P 406

the risk of death and recurrent cardiovascular events in a broad range of patients with

established cardiovascular dis ease, including those with prior myocardial infarction.

Current ACC/AHA guidelines place a strong em phasis on the initiation or maintenance of

statin drugs for patients hospitalized with AMI, particularly those with LDL-cholesterol

levels at or above 100 mg/dL. As a result of the strength of the evidence and guideline

support, the ACC/AHA has devel oped a performance measure to assess this aspect of

care for AMI patients.

Because statins are generally well-tolerated, most AMI patients are appropriate

candidates for this therapy. As a result of this clinical evidence, the NQF has been asked

to review whether it should broaden the current endorsed measure specification to include

the AMI population. This ad hoc review is occurring now and is expected to be

completed prior to publication of the FY 2011 IPPS/LTCH PPS final rule. Information

on this project can be found at: http://www.qualityforum.org/Projects/ab/Ad_Hoc_Reviews/Statin_M edication/Ad_Hoc_Review __Discharged_on_Statin.aspx

.
We will decide whether to finalize this measure based on whether it achieves NQF

endorsement and public comments. We believe that minimal additional burden would

result from adoption of this measure into the RHQDAPU program because the AMI

population that is the focus of this measure is already part of data collection efforts for

RHQDAPU, and very few additional data elements would be needed to be abstracted for

the proposed new measure on this existing measurement population. We proposed that

hospitals would begin submi ssion of data for the AMI-statin at discharge measureCMS-1498-P 407

beginning with January 1, 2011 dischares for the RHQDAPU 2013 payment

determination.

(3) Proposed New Healthcare Associated Infection (HAI) Measures for the FY 2013

Payment Determination

In the FY 2009 and FY 2010 IPPS rulemakings, we listed several Healthcare

Associated Infection (HAI) measures as bein g under consideration for future adoption.

Commenters to the FY 2010 IPPS/RY 2010 LTCH PPS proposed rule supported the HAI

measures that were listed as being under c onsideration for the future and encouraged

CMS to consider others as well (74 FR 43876). For the measure set to be used for the

FY 2013 payment determination, we are pr oposing to adopt two new measures of

Healthcare Acquired Infections that are currently being collected by the CDC via the

National Healthcare Safety Network (NHSN). These measures are: (1) Central Line

Associated Blood Stream Infection (NQF #0139) and (2) Surgical Site Infection

(NQF #0299).

The NHSN is a secure, Internet-based surveillance system maintained and

managed by the CDC, and can be utilized by all types of healthcare facilities in the

United States, including acute care hospitals, long term acute care hospitals, psychiatric

hospitals, rehabilitation hospitals, outpatient dialysis centers, ambulatory surgery centers,

and long term care facilities. The NHSN en ables healthcare facilities to collect and use

data about HAIs, adherence to clinical practices known to prevent HAIs, the incidence or

prevalence of multidrug-resistant organisms w ithin their organizations, and other adverse

events. Some States use NHSN as a means for healthcare facilities to submit data onCMS-1498-P 408

HAIs mandated through their specific State legislation. Currently, 21 States require

hospitals to report HAIs using NHSN, and CDC supports more than 2000 hospitals that

are using NHSN. 9

Both the Central Line Associated Blood Stream Infection measure and the

Surgical Site Infection measure are NQF-endorsed, and therefore meet the statutory

requirement for measure selection of reflecting consensus among affected parties. The

measures address HAIs, a topic area wi dely acknowledged by the HHS, IOM, the

National Priorities Partnership and others as a high priority requiring measurement and

improvement. HAIs are among the leading causes of death in the United States. CDC

estimates that as many as 2 million infections are acquired each year in hospitals and

result in approximately 90,000 deaths per year. 10 It is estimated that more Americans die

each year from HAIs than from auto accidents and homicides combined. HAIs not only

put the patient at risk, but also increase th e days of hospitalizati on required for patients

and add considerable health care costs.

HAIs are largely preventable through interventions such as better hygiene and

advanced scientifically tested techniques for surgical patient s. Therefore, many health

care consumers and organizations are calling for public disclosure of HAIs, arguing that

public reporting of HAI rates provides the information health care consumers need to

choose the safest hospitals, and gives hospitals an incentive to improve infection control

efforts. Both of the measures we are proposing to add for the FY 2013 payment

9 http://www.cdc.gov/nhsn/

10 McKibben L, Horan T Guidance on public reporting of healthcare-associated infections: recommendations of the Healthcare Infection Control Practices Advisory Committee. AJIC 2005;33:217-26CMS-1498-P 409

determination are NQF-endorsed, and are curren tly collected using the NHSN as part of

State-mandated reporting and surveillance requirements for hospitals. NHSN data

collection occurs via a Web-based tool hos ted by CDC provided free of charge to

hospitals. Additionally, da ta submission for these measures through EHRs may be

possible in the near future.

(A) Central Line Associated Blood Stream Infection

This HAI measure assesses the rate of laboratory-confirmed ca ses of bloodstream

infection or clinical sepsis among ICU patie nts. It was endorsed by the NQF in 2004 and

was adopted by the HQA in 2007. The measure can be stratified by the type of ICU.

(B) Surgical Site Infection

This HAI measure assesses the numbe r of NHSN-defined operative procedures

with a surgical site infection (deep incisional or organ space) within 30 days, or 1 year if

an implant is in place. Infections are identified on original admission or upon

readmission to the facility of original operative procedure within the relevant time frame

(30 days for no implants; within 1 year for implants). The measure can be stratified by

procedure type or risk factors. Th is measure was NQF-endorsed in 2007 and was

adopted by the HQA in 2008.

We invite comment on our proposal to adopt these two HAI measures into the

RHQDAPU program for the FY 2013 payment determination. Collection of these

measures would begin with January 1, 2011 discharges for the FY 2013 payment

determination. We are proposin g that hospitals use the NHSN infrastructure to report theCMS-1498-P 410

measures for RHQDAPU program purposes. The proposed reporting mechanism for

these HAI measures is discussed in greater de tail in section V.A.5. of this proposed rule.

(4) Proposed New Registry-Based Measures

For the FY 2013 payment determination, we are proposing that hospitals choose

one of the following four proposed measur e topics: (1) Implantable Cardioverter

Defibrillator (ICD) Complications; (2) Cardiac Surgery; (3) Stroke; or (4)

Nursing-Sensitive Care. With respect to the proposed measure t opic selected by a

hospital, we are proposing that the hospita l report data on the proposed measure(s)

applicable to the measure topic (discussed below) to a qualified registry for the specific

topic, and direct the registry to both calcu late the measure results for the hospital and

release those results (along with the numer ator/denominator information and exclusion

information) to CMS for the RHQDAPU program. We are proposing that hospitals begin

submitting data to the qualified registry of its choosing for discharges on or after

January 1, 2011, and we intend to release a list of qualified registries before that date. In

section V.A.13. of this proposed rule, we sp ecify the self-nomination process we are

proposing to use to qualify registries for each proposed registry-bas ed measure topic.

Proposed procedural and submission require ments for the proposed registry-based

measures are discussed in section V.A.5. of th is proposed rule. Below is a discussion of

the proposed registry-based meas ure topics and specific regist ry-based measures that fall

within each topic that we are proposing to add to the RHQDAPU program for the

FY 2013 payment determination.CMS-1498-P 411

(A) Proposed Implantable Cardiovert er Defibrillator (ICD) Complications

Registry-Based Topic and Measure

Implantable Cardioverter Defibrillators (ICDs) reduce the risk of sudden cardiac

death for select high risk patients, and the number of patients undergoing ICD

implantation increased from 5,600 in 1990 to 108,680 by 2005. 11 ICD implantation is an

expensive procedure performed on patients w ith advanced cardiovascular disease and,

often, significant comorbiditie s. Despite improvements in technology and increasing

experience with device implantation, the pr ocedure carries a significant risk of

complications, 12 which in turn increases its cost, th e patient’s length of stay, and the

patient’s risk of mortality. 13 In the FY 2010 IPPS/RY 2010 LTCH PPS final rule

(74 FR 43873 through 43875), our list of pot ential future quality measures under

consideration included a measure of ICD complic ations. This measure is a risk-adjusted

complication and mortality rate following implantation of ICDs in Medicare Fee for

Service (FFS) patients at least 65 years of age, with complication specific outcome time

frames. The measure (NQF #OT1-007-09) is currently undergoing NQF review under

Phase 1 of a call for Patient Outcome M easures initiated in Fall of 2009. We are

11 Brown, D.W., Croft, J.B., et al. (2008). “Trends in Hospitalizations for the Implantation of Cardioverte r-Defibrillators in the Unite d States, 1990-2005.” American Journal of Cardiology 101 (12): 1753-1755.

12 Hammill S and Curtis J. Publicly Reporting Implantable Cardioverter Defibrillator Outcomes – Grading the Report Card. Circ Arrhythmia Electrophysiol . 2008;1:235-237).

13 Al-Khatib SM, Greiner MA, Peterson ED, Hernandez AF, Schulman KA, Curtis LH. Patient and Implanting Physician Factors Associated With Mortality and Complications After Implantable Cardioverter-D efibrillator Implantation, 2002-2005. Circ Arrhythmia Electrophysiol . 2008;1:240-249.CMS-1498-P 412

proposing to add the ICD complications t opic and measure to the RHQDAPU measure

set for collection beginning with January 1, 2011 discharges for the FY 2013 RHQDAPU

payment determination pending NQF endor sement. We anticipate that a final

endorsement decision will occur in the fa ll of 2010, after publication of the FY 2011

IPPS/LTCH PPS final rule. Therefore, the decision whether to finalize this measure for

the FY 2013 payment determination will be made in the CY 2011OPPS/ASC final rule

with comment period.

The proposed ICD complications meas ure was developed based upon data

submitted to the American College of Cardiology-National Cardiovascular Data

Registry’s (ACC-NCDR) ICD registry, and data from that registry has been linked with

CMS administrative claims data used to identify procedural complications. For this

proposed measure, the measured outcome for each ICD index admission is one or more

complications or mortality within 30 or 90 days (depending on the complication)

following ICD implantation. Complications ar e counted in the measure only if they

occur during a hospital admission. Complications measured for 30 days include:

(1) Pneumothorax or hemothorax plus a chest tube; (2) Hematoma plus a blood

transfusion or evacuation; (3) Cardiac tampona de or pericardiocentesis; and (4) Death.

Complications measured for 90 days include: (5) Mechanical complications requiring a

system revision; (6) Device related infec tion; and (7) Additional ICD implantation.

To comply with a January 2005 National Coverage Determination for ICDs for

primary prevention, all hospitals in which ICD procedures are performed are currently

submitting to the ACC-NCDR ICD registry patient information needed for us toCMS-1498-P 413

determine whether the procedure was reasona ble and necessary. This requirement is

documented in section 20.4 of the following Medicare National Cove rage Determination

Manual: http://www.cms.hhs.gov/manuals /downloads/ncd103c1_Part1.pdf . For

purposes of the 2005 National Coverage Deter mination, we require that hospitals submit

data to the ACC-NCDR ICD registry for primary prevention patients only but do not

require hospitals to submit data on patients undergoing IC D implantation for secondary

prevention. However, the ICD complicati on measure as submitted to the NQF for

endorsement is specified such that it includes all ICD patients, regardless of whether they

receive an ICD for the primary or sec ondary prevention of sudden cardiac death.

Therefore, hospitals that choose this registry-based meas ure topic for the

RHQDAPU program would submit data on th e ICD complications measure for both

primary and secondary preventi on patients to the qualified regi stry. For risk adjustment,

data matching, and secondary prevention population identification purposes, we are

proposing that hospitals also submit to th e qualified ICD complications registry an

additional 11 data elements not currently required under the NCD in order for the

measure to be calculated for RHQDAPU program purposes.

In sum, we are proposing to add the IC D complications measure topic as one of

four proposed measure topics that hospita ls can choose from to submit required data

elements to a qualified registry for the FY 2013 RHQDAPU payment determination. The

only measure that we are proposing to include in this proposed topic at this time would be

the ICD complications measure. Because the ICD complications measure is a

risk-adjusted outcome measure, it is necessary that all data for the measure be collectedCMS-1498-P 414

by a single qualified registry in order for that registry to be able to accurately calculate

the risk adjustment model and subsequent m easure results. Therefore, we are proposing

to qualify one registry for this topic. Propos ed registry qualification criteria are discussed

in section V.A.13. of this proposed rule. We note that the ACC-NCDR ICD registry has

already been qualified to receive and tran smit data to CMS for a Medicare National

Coverage Determination, and is currently the only registry to which hospitals submit data

for this NCD. However, this would not precl ude another registry from self-nominating to

become a qualified registry for this propos ed topic for the RHQDAP U program. Because

the ICD complication measure is a risk adjusted measure, it requires that all data be

collected at a single repository for calculati on of the measure. Therefore, we anticipate

qualifying a single registry to collect all of the data for the proposed ICD complications

registry-based topic.

(B) Proposed Stroke Registry-Based Topic and Measures

We proposed to add five stroke meas ures to the RHQDAPU measure set in the

FY 2009 IPPS proposed rule (73 FR 23648). We indicated that we would again consider

these measures once NQF reviewed and endor sed the measures. Since that time, eight

stroke measures received NQF endorsement in July of 2008, and in the FY 2010

IPPS/RY 2010 LTCH PPS final rule we included these measures in the list of potential

future measures. We also included these measures in the preview section of the

Specifications Manual, and have worked with the Office of the National Coordinator for

Health Information Technology (ONC) and its partners to create a set of electronic

specifications for these measures to facilitate collection through EHRs.CMS-1498-P 415

We are also aware that a number of hospitals are already submitting these

measures to registries, and in the FY 2010 IPPS/RY 2010 LTCH PPS final rule, we

finalized a structural measure of participation in a systematic clinical database registry for

stroke care. Stroke is a topic of great relevance to the Medicare population due to its

impact on morbidity and mortality, and is an area of great potential improvement for

hospitals. Commenters on the FY 2010 IPPS/RY 2010 LTCH PPS proposed rule

expressed support for these measures, indi cating that they accurately measure

evidence-based care of the stroke patient to minimize secondary strokes and other

complications, are widely recognized, and ha ve great potential for quality improvement

(74 FR 43875).

Therefore, we are proposing to include the following eight measures in the Stroke

registry-based topic:

Proposed Measures for Stro ke Registry-Based Topic STK-1: Venous Thromboembolism (VTE) Prophylaxis for patients with ischemic or hemorrhagic stroke (NQF #0434) Patients with an ischemic str oke or a hemorrhagic stroke and who are non-ambulatory should start receiving DVT prophylaxis by end of hospital day two.

STK-2: Ischemic stroke patients discharged on antithrombotic therapy. (NQF #0435) Patients with an ischemic stroke prescribed antithrombotic therapy at discharge.

STK-3: Anticoagulation therapy for atrial fibrillation/flutter. (NQF #0436) Patients with an ischemic stroke with atrial fibrillation discharged on anticoagulation therapy.

STK-4: Thrombolytic Therapy for Acute ischemic stroke patients. (NQF #0437) Acute ischemic stroke patient s who arrive at the hospital within 120 minutes (2 hours) of time last known well and for whom IV t-PA was initiated at this hospital within 180 minutes (3 hours) of time last known well.CMS-1498-P 416

STK-5: Antithrombotic therapy by the end of hospital day two. (NQF #0438) Patients with ischemic stroke who receive antithrombotic therapy by the end of hospital day two.

STK-6: Discharged on statin medication. (NQF #0439) Ischemic stroke patients w ith LDL >/= 100 mg/dL, or LDL not measured, or, who were on cholesterol reducing therapy prior to hos pitalization are discharged on a statin medication.

STK-8: Stroke education. (NQF #0440) Patients with ischemic or hemorrhagic stroke or their caregivers who were given education or educational materials during the hospital stay addressing all of the following: personal risk factors for stroke, warning signs for stroke, activation of emergency. STK-10: Assessed for rehabilitation services. (NQF #0441) Patients with an ischemic st roke or hemorrhagic stroke who were assessed for rehabilitation services.

We are proposing to add the stroke regi stry-based topic, which would include

these eight registry-based stroke measur es, to the RHQDAPU program measure set as

one of the four proposed measure topics that hospitals can choose from to submit data to

a qualified registry for the FY 2013 pa yment determination beginning with

January 1, 2011 discharges. We invite comment on the measures as well as the timing of

their addition to the RHQDAPU measure set.

(C) Proposed Nursing Sensitive Care Registry-Based Topic and Measures

In the FY 2010 IPPS/RY 2010 LTCH PPS final rule, we indicated that we were

considering adopting a number of nursing-s ensitive care measures for future RHQDAPU

program payment determinations. Also in that rule, we adopted a structural measure of

participation in a registry for nursing-sen sitive care, under which hospitals submit data

directly to the QIO Clinical Warehouse.

For the FY 2013 payment determinati on, we are proposing to add a nursing

sensitive care registry-based topic to the RHQDAPU measure set, which would includeCMS-1498-P 417

the eight nursing-sensitive care measures liste d below. All of the proposed nursing

sensitive measures are NQF-endorsed. Hosp itals selecting this topic would begin

reporting data on the eight proposed nursing-se nsitive care registry-bas ed measures to a

qualified nursing-sensitive care registry begi nning with January 1, 2011 discharges.

Hospitals would continue reporting the nursing-sensitive care structural measure

previously adopted for the RHQDAPU program directly to the QIO Clinical Warehouse.

We invite comment on the proposed additi on of a nursing sensitive care registrybased topic, which would include 8 proposed nursing sensitive care measures, as well as

the timing of this addition to the RHQDAPU program for the FY 2013 payment

determination.

Proposed Measures for Nursing Sensitive Care Registry-Based Topic Patient Falls: All documented falls with or without injury, experienced by patients on an eligible unit in a calendar month. (NQF #0141) Falls with Injury: All documented patient falls with an injury level of minor or greater. (NQF #0202) Pressure Ulcer Prevalence (NQF #0201) Restraint Prevalence (vest and limb) (NQF #0203) Skill Mix: Percentage of hours worked by: RN, LPN/LVN, UAP, Contract/Agency (NQF #0204) Hours per patient day worked by RN, LPN, and UAP (NQF #0205) Practice Environment Scale-Nursing Work Index (NQF #0206) Voluntary turnover for RN, APN, LPN, UAP (NQF #0207)

(D) Proposed Cardiac Surgery Regi stry-Based Topic and Measures

We have previously proposed to add se veral measures on the topic of cardiac

surgery to the RHQDAPU measure set (73 FR 48608), and have also listed a set of

NQF-endorsed cardiac surgery measures in prio r rules as being under consideration for

future adoption (74 FR 43874). We also adopted a structural measur e of cardiac surgery

participation in the FY 2010 IPPS/RY 2010 LTCH PPS final rule. Cardiac surgeryCMS-1498-P 418

procedures carry a significant risk of morb idity and mortality. We believe that the

nationwide public reporting of the 15 proposed cardiac surgery regist ry-based measures

would provide highly meaningful information for Medicare beneficiaries because they

address procedures widely performed on Me dicare beneficiaries. Analysis of the

structural measure data we have received fr om hospitals indicates that nearly 90 percent

of hospitals performing these procedures alread y report these data to clinical registries.

Therefore, if we adopt this proposed regist ry-based topic, a hospital would not face any

additional data submission burde n if it chooses this registry-based topic for purposes of

the FY 2013 payment determination and the regi stry to which it already submits data is

qualified for this proposed topic.

For the FY 2013 payment determination, we are proposing to include 15 cardiac

surgery registry-based measures in the cardi ac surgery registry-based measure topic.

These proposed registry-based measures are listed below, and hospitals would submit

data on these measures to a qualified registry for the cardiac surgery registry-based topic.

Hospitals would continue submitting data for the cardiac surgery structural measure

previously adopted for the RHQDAPU program directly to the QIO Clinical Warehouse.

Proposed Measures for Proposed Cardiac Surgery Registry-Based Topic Post-operative Renal Failure (NQF# 0114) Surgical Re-exploration (NQF# 0115) Anti-Platelet Medication at Discharge (NQF# 0116) Beta Blockade at Discharge (NQF# 0117) Anti-Lipid Treatment Discharge (NQF# 0118) Risk-Adjusted Operative Mortality for Coronary Artery Bypass Graft CABG (NQF# 0119)* Risk-Adjusted Operative Mortality for Aortic Valve Replacement (AVR) (NQF# 0120)*CMS-1498-P 419

Proposed Measures for Proposed Cardiac Surgery Registry-Based Topic Risk-Adjusted Operative Mortality for Mitral Valve Replacement/Repair (MVR) (NQF# 0121)* Risk-Adjusted Operative Mortalit y MVR+CABG Surgery (NQF# 0122)* Risk-Adjusted Operative Mort ality for AVR+CABG (NQF# 0123)* Pre-Operative Beta Blockade (NQF# 0127) Duration of Prophylaxis for Cardiac Surgery Patients (NQF# 0128) Prolonged Intubation (ventilation) (NQF# 0129) Deep Sternal Wound Infection Rate (NQF# 0130) Stroke/Cerebrovascular Accident (NQF# 0131)

* Requires risk adjustment
Because these measures were endorsed by the NQF in May of 2007, they meet the

statutory requirement of reflecting consensus am ong affected parties. Hospitals selecting

this topic would begin submitting data on the proposed measures to a qualified cardiac

surgery registry beginning with January 1, 2011 discharges. We note that five of these

measures (indicated with an asterisk in the ta ble above) must be risk-adjusted in order to

be calculated properly. Therefore, the data needed to calculate these measures must be

collected by a single registry. While th e remaining measures do not require risk

adjustment, we believe it may be overly burdensome for hospitals to submit data for this

topic to more than one registry. For this r eason, we anticipate qualifying a single registry

to collect all of the data for the proposed cardi ac surgery registry-based topic. We invite

comment on this proposal.

Set out below are the RHQDAPU program topics and quality measures we are

proposing to adopt for the FY 2013 payment determination:

Topic Proposed RHQDAPU Program Quality Measures for the FY 2013 Payment Determination

Acute Myocardial Infarction (AMI)

• AMI-1 Aspirin at arrivalCMS-1498-P 420

Topic Proposed RHQDAPU Program Quality Measures for the FY 2013 Payment Determination

• AMI-2 Aspirin prescribed at discharge

• AMI-3 Angiotensin Converting Enzyme Inhibitor (ACE-I) or Angiotensin II Receptor Blocker (ARB) for left ventricular systolic dysfunction

• AMI-4 Adult smoking cessation advice/counseling

• AMI-5 Beta blocker prescribed at discharge

• AMI-7a Fibrinolytic (thrombolytic) agent received within 30 minutes of hospital arrival

• AMI-8a Timing of Receipt of Primary Percutaneous Coronary Intervention (PCI)

• AMI-Statin at Discharge ** Heart Failure (HF)

• HF-1 Discharge instructions

• HF-2 Left ventricular function assessment

• HF-3 Angiotensin Converting Enzyme I nhibitor (ACE-I) or Angiotensin II Receptor Blocker (ARB) for left ventricular systolic dysfunction

• HF-4 Adult smoking cessation advice/counseling Pneumonia (PN)

• PN-2 Pneumococcal vaccination status

• PN-3b Blood culture performed before first antibiotic received in hospital

• PN-4 Adult smoking cessation advice/counseling

• PN-5c Timing of receipt of initial antibiotic following hospital arrival

• PN-6 Appropriate initial antibiotic selection

• PN-7 Influenza vaccination status Surgical Care Improvement Project (SCIP)

• SCIP-1 Prophylactic antibiotic received within 1 hour prior to surgical incision

• SCIP-3 Prophylactic antibiotics discontinued within 24 hours after surgery end time

• SCIP-VTE-1: Venous thromboembolism (VTE) prophylaxis ordered for surgery patients

• SCIP-VTE-2: VTE prophylaxis within 24 hours pre/post surgery

• SCIP-Infection-2: Prophylactic antibiotic selection for surgical patients

• SCIP-Infection-4: Cardiac Surgery Patients with Controlled 6AM Postoperative Serum Glucose

• SCIP-Infection-6: Surgery Patients with Appropriate Hair Removal

• SCIP–Infection-9: Postoperative Urinary Catheter Removal on Post Operative Day 1 or 2

• SCIP-Infection-10: Perioperative Temperature Management

• SCIP-Cardiovascular-2: Surgery Patients on a Beta Blocker Prior to Arrival Who Received a Beta Blocker During the Perioperative Period Mortality Measures (Medicare Patients)

• MORT-30-AMI: Acute Myocardial Infarction 30-day mortality –Medicare patientsCMS-1498-P 421

Topic Proposed RHQDAPU Program Quality Measures for the FY 2013 Payment Determination

• MORT-30-HF: Heart Failure 30-day mortality Medicare patients

• MORT-30-PN: Pneumonia 30-day mortality -Medicare patients Patients' Experience of Care

• HCAHPS survey Readmission Measure (Medicare Patients)

• READ-30-HF: Heart Failure 30-Day Risk Standardized Readmission Measure (Medicare patients)

• READ-30-AMI: Acute Myocardial Infarction 30-Day Risk Standardized Readmission Measure (Medicare patients)

• READ-30-PN: Pneumonia 30-Day Risk Standardized Readmission Measure (Medicare patients) AHRQ Patient Safety Indicators (PSIs), Inpatient Quality Indicators (IQIs) and Composite Measures

• PSI 06: Iatrogenic pneumothorax, adult

• PSI -11: Post Operative Respiratory Failure *

• PSI – 12: Post Operative PE or DVT *

• PSI 14: Postoperative wound dehiscence

• PSI 15: Accidental puncture or laceration

• IQI 11: Abdominal aortic aneurysm (AAA) mortality rate (with or without volume)

• IQI 19: Hip fracture mortality rate

• Complication/patient safety for selected indicators (composite)

• Mortality for selected medical conditions (composite) AHRQ PSI and Nursing Sensitive Care

• Death among surgical inpatients with serious, treatable complications Cardiac Surgery

• Participation in a Systematic Database for Cardiac Surgery Stroke Care

• Participation in a Systematic Clinical Database Registry for Stroke Care Nursing Sensitive Care

• Participation in a Systematic Clinical Database Registry for Nursing Sensitive Care Healthcare Associated Infections **

• Central Line Associated Bloodstream Infection **

• Surgical Site Infection ** ICD Complications -- Registry Based **

• ICD Complications and Mortality ** Stroke -- Registry Based **

• STK-1: Venous Thromboembolism (VTE) Prophylaxis for patients with ischemic or hemorrhagic stroke **

• STK-2: Ischemic stroke patients discharged on antithrombotic therapy.**

• STK-3: Anticoagulation therapy for atrial fibrillation/flutter.**

• STK-4: Thrombolytic Therapy for Acute ischemic stroke patients.**

• STK-5: Antithrombotic therapy by the end of hospital day two.**CMS-1498-P 422

Topic Proposed RHQDAPU Program Quality Measures for the FY 2013 Payment Determination

• STK-6: Discharged on statin medication.**

• STK-8: Stroke education. **

• STK-10: Assessed for rehabilitation services.** Nursing Sensitive Care – Registry Based **

• Patient Falls: All documented falls with or without injury, experienced by patients on an eligible unit in a calendar month.**

• Falls with Injury: All documented patient falls with an injury level of minor or greater.**

• Pressure Ulcer Prevalence**

• Restraint Prevalence (vest and limb)**

• Skill Mix: Percentage of hours worked by: RN, LPN/LVN, UAP, Contract/Agency**

• Hours per patient day worked by RN, LPN, and UAP**

• Practice Environment Scale-Nursing Work Index**

• Voluntary turnover for RN, APN, LPN, UAP**

Cardiac Surgery – Registry Based **

• Post-operative Renal Failure**

• Surgical Re-exploration**

• Anti-Platelet Medication at Discharge**

• Beta Blockade at Discharge**

• Anti-Lipid Treatment Discharge**

• Risk-Adjusted Operative Mortality for Coronary Artery Bypass Graft CABG**

• Risk-Adjusted Operative Mortality for Aortic Valve Replacement (AVR)**

• Risk-Adjusted Operative Mortality for Mitral Valve Replacement/Repair (MVR)**

• Risk-Adjusted Operative Mortality MVR+CABG Surgery**

• Risk-Adjusted Operative Mortality for AVR+CABG**

• Pre-Operative Beta Blockade**

• Duration of Prophylaxis for Cardiac Surgery Patients**

• Prolonged Intubation (ventilation)**

• Deep Sternal Wound Infection Rate**

• Stroke/Cerebrovascular Accident** HAC Prevalence Measures *

• Foreign Object Retained After Surgery *

• Air Embolism *

• Blood Incompatibility *

• Pressure Ulcer Stages III & IV *

• Falls and Trauma: (Includes: Fracture Dislocation Intracranial Injury Crushing Injury Burn Electric Shock) *

• Vascular Catheter-Associated Infections *CMS-1498-P 423

Topic Proposed RHQDAPU Program Quality Measures for the FY 2013 Payment Determination

• Catheter-Associated Urinary Tract Infection (UTI) *

• Manifestations of Poor Glycemic Control * All-Patient Volume Data for Selected MS-DRGs *

• MS-DRGs: 038; 039; 190; 191; 193; 219; 220; 221; 224; 226; 235; 236; 237; 243; 247; 280; 281; 282; 291; 292 ; 293; 328; 329; 330; 331; 353; 354; 417; 418; 459;461; 4 62; 466; 467; 468; 469; 470; 471; 472;477; 478;490;507;515;656; 657; 658; 659; 668; 673; 674; 675; 713;; 743; 748 *

* Proposed for FY 2012 payment determination. ** Proposed for FY 2013 payment determination.

d. Proposed RHQDAPU Program Quality Measures for the FY 2014 Payment

Determination

(1) Proposed Retention of FY 2013 Payment Determination Measures for the FY 2014

Payment Determination

We are proposing to retain all of the measures adopted for the FY 2013 payment

determination for the FY 2014 payment deter mination. Collection of data for these

measures would begin with January 1, 2012 di scharges. We invite comment on this

proposal.

(2) Proposed New Chart-Abstracted Measures for the FY 2014 Payment Determination

We also are proposing to add the followi ng 4 new chart-abstracted measures to

the RHQDAPU program measure set for the FY 2014 payment determination: (1) ED

[Emergency Department]Throughput – Admit D ecision Time to ED Departure Time for

Admitted Patients (NQF #0497); (2) ED Thro ughput - Median time from emergency

department arrival to ED departure for admitted patient s (NQF #0495); (3) Global Flu

Immunization; and (4) Global Pneumonia Immunization. In proposing to adopt these

chart-abstracted measures, we recognize th at we are proposing to increase the chart-CMS-1498-P 424

abstraction burden on hospitals with respect to the RHQDAPU program. However, the

burden associated with the proposed immuniza tion measures for all inpatients could be

counterbalanced by future retirement of the two current immunization measures that

apply only to pneumonia inpatients. This m easure retirement option is discussed earlier

in section V.A.2. of this proposed rule. Furthermore, we note that the ED-Throughput

measures have been specified for EHR-base d collection, which may also serve to reduce

burden associated with these measures in the future.

(A) Emergency Department (ED)-Throughput Measures

The two ED-Throughput measures we are proposing for the FY 2014 payment

determination are: (1) Median time from admit decision time to time of departure from

the emergency department for emergency department patients admitted to inpatient

status; and(2) Median time from emergency department arrival to time of departure from

the emergency room for patients admitted to the facility from the emergency department.

The ED–Throughput measures reflect not only the processes of care that occur

while the patient is in the emergency departme nt, but also reflect th e coordination of care,

communication, and efficiency of service provision beyond the walls of the emergency

department. These measures have been NQF-endorsed (NQF #0497 and #0495) and

adopted by HQA. Specifications for these me asures are available in the preview section

of the current Specifications Manual available on QualityNet.

These measures also address ED overcrowding, which the IOM identified as a

major quality issue. Reducing the time patients remain in the ED can improve access to

treatment and increase the quality of care, and capability of the hospital to provideCMS-1498-P 425

adequate treatment to patients. ED overcrowding may result in delays in the

administration of medication such as antibio tics for pneumonia and has been associated

with perceptions of compromised em ergency care. For patients with

non-ST-segment-elevation myocardial infarcti on, long ED stays were associated with

decreased use of guideline-recommended ther apies and a higher risk of recurrent

myocardial infarction. Overcrowding and he avy emergency resource demand have led to

a number of problems, incl uding ambulance refusals, prolonged patient waiting times,

increased suffering for those who wait, ru shed and unpleasant treatment environments,

and potentially poor patient outcomes. Fina lly, when EDs are overwhelmed, their ability

to respond to community emergencies and disasters may be compromised.

(B) Global Immunization Measures

For the FY 2014 payment determination, we are proposing to adopt two global

immunization measures: (1) Pneumoccocal Immunization; and (2) Influenza

Immunization. Increasing influenza (flu ) and pneumonia vaccination could reduce

unnecessary hospitalizations and secondary comp lications particularly among high risk

populations such as the elderly. About 36,000 adults die annually and over 200,000 are

hospitalized for flu-related causes. Older a dults are more vulnerable, and adults over

65 comprise about 90 percent of flu-related deaths. Vaccina tions can significantly reduce

the number of flu related illn esses and deaths. The measures we are proposing were

endorsed by the NQF as part of a cons ensus development project titled “National

Voluntary Consensus Standards for Influenza and Pneumococcal Immunizations” which

concluded in 2008. This proj ect resulted in the endorseme nt of immunization measuresCMS-1498-P 426

that reflect current consensus among affected parties that standard measure specifications

for influenza and pneumonia immunization s hould be broadly applicable across

conditions, populations, and care settings. The technical specifications for these global

measures will be available for preview in the Specifications Manual published in

April 2010. The difference between these pr oposed immunization measures, and the two

immunization measures that are currently pa rt of the RHQDAPU program is that the

current measures only apply to inpatients admitted for pneumonia, whereas the proposed

measures apply to all inpatients regardless of admission diagnosis.

We are proposing to adopt these four chart-abstracted measures into the

RHQDAPU program measure set for the FY 2014 payment dete rmination. Data

submission for these measures would begin w ith January 1, 2012 discharges. We invite

comment on these proposed measures as well as the proposed timing of their addition to

the RHQDAPU program for the FY 2014 payment determination. The complete list of

proposed quality measures for the FY 2014 pa yment determination is set out below.

Topic Proposed RHQDAPU Program Quality Measures for the FY 2014 Payment Determination Acute Myocardial Infarction (AMI)

• AMI-1 Aspirin at arrival

• AMI-2 Aspirin prescribed at discharge

• AMI-3 Angiotensin Converting Enzyme Inhibitor (ACE-I) or Angiotensin II Receptor Blocker (ARB) for left ventricular systolic dysfunction

• AMI-4 Adult smoking cessation advice/counseling

• AMI-5 Beta blocker prescribed at discharge

• AMI-7a Fibrinolytic (thrombolytic) agent received within 30 minutes of hospital arrival

• AMI-8a Timing of Receipt of Primary Percutaneous Coronary Intervention (PCI)

• AMI Statin at Discharge **CMS-1498-P 427

Topic Proposed RHQDAPU Program Quality Measures for the FY 2014 Payment Determination Heart Failure (HF)

• HF-1 Discharge instructions

• HF-2 Left ventricular function assessment

• HF-3 Angiotensin Converting En zyme Inhibitor (ACE-I) or Angiotensin II Receptor Blocker (ARB) for left ventricular systolic dysfunction

• HF-4 Adult smoking cessation advice/counseling Pneumonia (PN)

• PN-2 Pneumococcal vaccination status

• PN-3b Blood culture performed before first antibiotic received in hospital

• PN-4 Adult smoking cessation advice/counseling

• PN-5c Timing of receipt of initial antibiotic following hospital arrival

• PN-6 Appropriate initial antibiotic selection

• PN-7 Influenza vaccination status Surgical Care Improvement Project (SCIP)

• SCIP-1 Prophylactic antibiotic received within 1 hour prior to surgical incision

• SCIP-3 Prophylactic antibiotics discontinued within 24 hours after surgery end time

• SCIP-VTE-1: Venous thromboembolism (VTE) prophylaxis ordered for surgery patients

• SCIP-VTE-2: VTE prophylaxis within 24 hours pre/post surgery

• SCIP-Infection-2: Prophylactic antibiotic selection for surgical patients

• SCIP-Infection-4: Cardiac Surgery Patients with Controlled 6AM Postoperative Serum Glucose

• SCIP-Infection-6: Surgery Patients with Appropriate Hair Removal

• SCIP–Infection-9: Postoperative Urinary Catheter Removal on Post Operative Day 1 or 2

• SCIP-Infection-10: Perioperative Temperature Management

• SCIP-Cardiovascular-2: Surgery Patients on a Beta Blocker Prior to Arrival Who Received a Beta Blocker During the Perioperative Period Mortality Measures (Medicare Patients)

• MORT-30-AMI: Acute Myocardial Infarction 30-day mortality – Medicare patients

• MORT-30-HF: Heart Failure 30-day mortality Medicare patients

• MORT-30-PN: Pneumonia 30-day mortality -Medicare patients Patients' Experience of Care

• HCAHPS survey Readmission Measure (Medicare Patients)

• READ-30-HF: Heart Failure 30-Day Risk Standardized ReadmissionCMS-1498-P 428

Topic Proposed RHQDAPU Program Quality Measures for the FY 2014 Payment Determination Measure (Medicare patients)

• READ-30-AMI: Acute Myocardial Infarction 30-Day Risk Standardized Readmission Measure (Medicare patients)

• READ-30-PN: Pneumonia 30-Day Risk Standardized Readmission Measure (Medicare patients) AHRQ Patient Safety Indicators (PSIs), Inpatie nt Quality Indicators (IQIs) and Composite Measures

• PSI -06: Iatrogenic pneumothorax, adult

• PSI -11: Post Operative Respiratory Failure *

• PSI –12: Post Operative PE or DVT *

• PSI 14: Postoperative wound dehiscence

• PSI 15: Accidental puncture or laceration

• IQI 11: Abdominal aortic aneurysm (AAA) mortality rate (with or without volume)

• IQI 19: Hip fracture mortality rate

• Complication/patient safety for selected indicators (composite)

• Mortality for selected medical conditions (composite) AHRQ PSI and Nursing Sensitive Care

• Death among surgical inpatients with serious, treatable complications Cardiac Surgery

• Participation in a Systematic Database for Cardiac Surgery Stroke Care

• Participation in a Systematic Clinical Database Registry for Stroke Care Nursing Sensitive Care

• Participation in a Systematic Clinical Database Registry for Nursing Sensitive Care Healthcare Associated Infections **

• Central Line Associated Bloodstream Infection **

• Surgical Site Infection ** ICD Complications -- Registry–Based **

• ICD Complications and Mortality ** Stroke -- Registry-Based **

• STK-1: Venous Thromboembolism (VTE) Prophylaxis for patients with ischemic or hemorrhagic stroke. **

• STK-2: Ischemic stroke patients discharged on antithrombotic therapy. **

• STK-3: Anticoagulation therapy for atrial fibrillation/flutter. **

• STK-4: Thrombolytic Therapy for Acute ischemic stroke patients. **

• STK-5: Antithrombotic therapy by the end of hospital day two. **

• STK-6: Discharged on statin medication. **

• STK-8: Stroke education. **

• STK-10: Assessed for rehabilitation services. **CMS-1498-P 429

Topic Proposed RHQDAPU Program Quality Measures for the FY 2014 Payment Determination Nursing Sensitive Care – Registry-Based **

• Patient Falls: All documented falls with or without injury, experienced by patients on an eligible unit in a calendar month **

• Falls with Injury: All documented patient falls with an injury level of minor or greater **

• Pressure Ulcer Prevalence **

• Restraint Prevalence (vest and limb) **

• Skill Mix: Percentage of hours worked by: RN, LPN/LVN, UAP, Contract/Agency **

• Hours per patient day worked by RN, LPN, and UAP **

• Practice Environment Scale-Nursing Work Index **

• Voluntary turnover for RN, APN, LPN, UAP ** Cardiac Surgery – Registry–Based **

• Post-operative Renal Failure **

• Surgical Re-exploration **

• Anti-Platelet Medication at Discharge **

• Beta Blockade at Discharge **

• Anti-Lipid Treatment Discharge **

• Risk-Adjusted Operative Mortality for Coronary Artery Bypass Graft CABG **

• Risk-Adjusted Operative Mortality for Aortic Valve Replacement (AVR) **

• Risk-Adjusted Operative Mortality for Mitral Valve Replacement/Repair (MVR) **

• Risk-Adjusted Operative Mortality MVR+CABG Surgery **

• Risk-Adjusted Operative Mortality for AVR+CABG **

• Pre-Operative Beta Blockade **

• Duration of Prophylaxis for Cardiac Surgery Patients **

• Prolonged Intubation (ventilation) **

• Deep Sternal Wound Infection Rate **

• Stroke/Cerebrovascular Accident ** HAC Prevalence Measures *

• Foreign Object Retained After Surgery *

• Air Embolism *

• Blood Incompatibility *

• Pressure Ulcer Stages III & IV *

• Falls and Trauma: (Includes: Fracture Dislocation Intracranial Injury Crushing Injury Burn Electric Shock) *

• Vascular Catheter-Associated Infection *

• Catheter-Associated Urinary Tract Infection (UTI) *

• Manifestations of Poor Glycemic Control * All-Patient Volume Data for Selected MS-DRGs *CMS-1498-P 430

Topic Proposed RHQDAPU Program Quality Measures for the FY 2014 Payment Determination

• MS-DRGs: 038; 039; 190; 191; 193; 219; 220; 221; 224; 226; 235; 236; 237; 243; 247; 280; 281; 282 ; 291; 292; 293; 328; 329; 330; 331; 353; 354; 417; 418; 459;461; 462; 466; 467; 468; 469; 470; 471; 472;477; 478;490;507;5 15;656; 657; 658; 659; 668; 673; 674; 675; 713; 743; 748 * Emergency Department Throughput ***

• Median time from admit decision time to time of departure from the emergency department for emergency department patients admitted to inpatient status. ***

• Median time from emergency department arrival to time of departure from the emergency room for patients admitted to the facility from the emergency department. *** Global Immunization Measures ***

• Immunization for Influenza ***

• Immunization for Pneumonia ***

*Proposed for FY 2012 payment determination. **Proposed for FY 2013 payment determination. *** Proposed for FY 2014 payment determination.

4. Possible New Quality Measures for Future Years

We are inviting public comment on the fo llowing quality measures and topics set

out below that we are considering for the fu ture. We also are seeking suggestions and

rationales to support the adoption of measures and topics that are not included in this list

for the RHQDAPU program.

Possible RHQDAPU Program Future Measures and Topics Measurement Topic Measure Title/ Description/Concept Surgical Safety Surgical checklist use for surgical procedures Complications Lower Extremity Bypass Complications

PCI Readmission 30-day risk-standardized readmission rate following Percutaneous Coronary Interven tion (PCI) among patients aged 18 years or older.

PCI Mortality 30-day risk-standardized mortality rate following PCI for STEMI/shock patients.CMS-1498-P 431

Possible RHQDAPU Program Future Measures and Topics Measurement Topic Measure Title/ Description/Concept PCI Mortality 30-day risk-standardized mortality rate following PCI for nonSTEMI/non-shock patients. VTE VTE-1: Venous Thromboembolism Prophylaxis

VTE VTE-2: Intensive Care Unit Venous Thromboembolism Prophylaxis

VTE VTE-3: Venous Thromboembolism Patients with Anticoagulation Overlap Therapy

VTE VTE-4: Venous Thromboembolism Patients Receiving Unfractionated Heparin with Dosa ges/Platelet Count Monitoring by Protocol VTE VTE-5: Venous Thromboembo lism Discharge Instructions

VTE VTE-6: Incidence of Potentially-Preventable Venous Thromboembolism.

SCIP Short Half-Life prophylactic administered preoperatively redosed within 4 hours after preoperative dose Care Transitions for AMI 30-Day Post-Hospital AMI Discharge ED Visit Measure

Care Transitions for AMI 30-Day Post-Hospital AMI Discharge Evaluation and Management Service Measure Care Transitions for AMI 30-Day Post-Hospital AMI Discha rge Care Transition Composite Measure Care Transitions for Heart Failure 30-Day Post-Hospital HF Di scharge ED Visit Rate

Care Transitions for Heart Failure 30-Day Post-Hospital HF Discha rge Evaluation and Management Service Measure Care Transitions for Heart Failure 30-Day Post-Hospital HF Discha rge Care Transition Composite Measure Care Transitions for Pneumonia 30-Day Post-Hospital Pneumoni a Discharge ED Visit Rate

Care Transitions for Pneumonia 30-Day Post-Hospital Pneumoni a Discharge Evaluation and Management Service Measure Care Transitions for Pneumonia 30-Day Post-Hospital Pneumoni a Discharge Care Transition Composite Measure Healthcare Associated Infections Ventilator Associated Pneumonia

Healthcare Associated Infections Multidrug-resistant organism (MDRO) infection

Healthcare Associated Infections Clostridium Difficile Associated Diseases (CDAD)

Health Care Personnel Immunization Influenza Vaccination for Healthcare PersonnelCMS-1498-P 432

Possible RHQDAPU Program Future Measures and Topics Measurement Topic Measure Title/ Description/Concept Cardiac Rehabilitation Referral Cardiac Rehabilitation Referral for AMI, HF, Cardiac Surgery

End of Life Care Appr opriate Pain Management Serious Reportable Events NQF approved Serious Reportable Events

5. Form, Manner, and Timing of Quality Data Submission

Sections 1886(b)(3)(B)(viii)(I) and (II) of the Act provide that the payment update

for FY 2007 and each subsequent fiscal year be reduced by 2.0 percentage points for any

subsection (d) hospital that does not submit quality data in a form and manner, and at a

time, specified by the Secretary. The data submission requirements, Specifications

Manual, and submission deadlines are pos ted on the QualityNet Web site at:

http://www.QualityNet.org/. CMS requires that hospitals submit data in accordance with

the specifications for the appropriate discharge periods.

Hospitals submit quality data through the secure portion of the QualityNet Web

site (formerly known as QualityNet Exchange) ( https://www.QualityNet.org ). This Web

site meets or exceeds all current Health Insurance Portability and Accountability Act

(HIPAA) requirements for security of protected health information.

a. Proposed RHQDAPU Program Requirements for FY 2012, FY 2013, and FY 2014

(1) Procedural Requirements for the FY 2012, FY 2013, and FY 2014 Payment

Determinations

For the FY 2012, FY 2013, and FY 2014 payment determination, we are

proposing that the following procedures woul d apply to hospitals participating in the

RHQDAPU program. These procedures are, for the most part, the same as theCMS-1498-P 433

procedures that apply to the FY 2011 paymen t determination. We identify below where

we are proposing to modify a procedure.

● Register with QualityNet, before participating hospitals initially begin

reporting data, regardless of th e method used for submitting data.

● Identify a QualityNet Administrator who follows the registration process

located on the QualityNet Web site (http://www.QualityNet.org).

● Complete a Notice of Pa rticipation. New subsection (d) hospitals and existing

hospitals that wish to participate in the RHQDAPU program for the first time must

complete a revised “Reporting Hospital Qua lity Data for Annual Payment Update Notice

of Participation'' form (Noti ce of Participation form) that includes the name and address

of each hospital campus that shares the same CMS Certification Number (CCN). We

will revise the Notice of Participation form as needed and will provide appropriate

notification of any revisions to hospita ls and QIOs through the routine RHQDAPU

communication channels which include memo and email notification and QualityNet

Web site articles and postings.

We are proposing that, consistent with our policy for the FY 2011 payment

determination, any hospital that receive s a new CCN on or after October 15, 2009

(including new subsection (d) hospitals and hos pitals that have merged) that wishes to

participate in the RHQDAPU program and has not otherwise submitted a Notice of

Participation form using the new CCN must submit a completed Notice of Participation

form no later than 180 days from the date identified as the open date (that is, the

Medicare acceptance date) on the approved CMS Online System Certification andCMS-1498-P 434

Reporting (OSCAR) system to participat e in the RHQDAPU program for FY 2012 and

future years. We believe that this deadlin e will give these hospitals a sufficient amount

of time to get their operations up and runni ng while simultaneously providing CMS with

clarity regarding whether they intend to participate in the RHQDAPU program for

FY 2012.

(2) Synchronization of RHQDAPU Program Da ta Submission and Validation Quarters

with Quarters Used to Make Payment Determinations

Currently we determine, in part, whether a hospital has met the RHQDAPU

program requirements for a given fiscal year by looking at whether the hospital properly

submitted data with respect to a number of quarterly discharge periods. However, the

quarters that we look at for HCAHPS da ta, chart-abstracted RHQDAPU program

measures, and structural measures may not be the same for a single payment

determination. For example, for the FY 2011 payment determin ation, we looked at

discharge data submitted by hospitals from 4 th quarter 2008 through 3 rd quarter 2009 for

AMI, HF, and PN chart-abstract ed RHQDAPU program measures, 1 st quarter 2010 for

the newly added SCIP Infection 9 and 10 measures, April 2008 through March 2009 data

for HCAHPS, and January 1, 2010 through June 30, 2010 data for structural measures.

This lack of synchronization has devel oped because we have generally made

payment decisions using the four earliest o ccurring discharge quarters for each measure

topic that we did not include in a previous year’s payment deter mination, and we have

not synchronized when hospitals must begin reporting data on new measures.CMS-1498-P 435

Starting with the FY 2013 payment deter mination, we are proposing to determine

whether the hospital meets the data submissi on requirement for quality measure data by

looking at whether the hospital properly s ubmitted data on the applicable measures

during the same quarterly discharge periods. Specifically, the quarterly discharge periods

that will apply to a particular payment deter mination will be the four quarters that occur

within a calendar year. In other words, beginning with the FY 2013 payment

determination, we will look at whether the hospital properl y submitted data for quality

measure data for the four calendar year quarters of CY 2011.

With respect to our requirement that hospital data be successfully validated in

order for the hospital to earn the full payment update for a given fiscal year, we are also

proposing, beginning with the FY 2013 payment determination, to valid ate four discharge

quarters, but the quarters will be the 4 th calendar quarter of the calendar year that occurs

two years before the payment determination and the first 3 calendar quarters of the

following calendar year. Thus, for the FY 2013 payment determination, we will validate

data from the 4 th calendar quarter of 2010 through the 3 rd calendar quarter of 2011. We

believe this is appropriate given the time required for the validation abstraction and

appeal process.

This proposed synchronization will give us a more complete picture of the quality

of care provided by a hospital during a given time period, thus enabling us to link that

quality of care to the applicable RHQDAPU payment determination. In addition, this

proposal will provide clarity to hospitals regarding what da ta we will look at to make

payment determinations for a given fiscal year. We believe that this synchronization willCMS-1498-P 436

also assist us to more effectively imple ment the RHQDAPU progra m because we will be

able to achieve operational c onsistency regarding what data applies to what payment

determination. Further, we believe that this proposal may assist the agency in

implementing Hospital Value-Based Purchasing as authorized by the Patient Protection

and Affordable Care Act, Pub. L. 111-148, because it will improve the link between

quality, as measured during a single period of time, and the payment amounts provided to

hospitals. For example, under our proposal , the HCAHPS patient experience of care

measure and chart-abstracted measures for a si ngle set of discharge quarters will be used

together for a single payment determination. Finally, we believe that this proposal will

improve hospitals’ ability to implement quality improvement strategies that affect

RHQDAPU program measures and their quality of care.

We will post a table outlining the discharge quarters that will be used to make

each fiscal year payment determination no later than September 15 th annually on the

QualityNet Web site (http://www.QualityN et.org). We welcome comments on this

proposal.

(3) Proposed HCAHPS Requirements for the FY 2012, FY 2013 and FY 2014 Payment

Determinations

We are proposing that, for the FY 2012, FY 2013 and FY 2014 payment

determinations, except as noted below, the RHQDAPU program HCAHPS requirements

we adopted for FY 2011 would continue to a pply. Under these requirements, a hospital

must continuously collect and submit HCAH PS data in accordance with the current

HCAHPS Quality Assurance Guidelines and the quarterly data submission deadlines,CMS-1498-P 437

both of which are posted at http://www.hcahps online.org. In order for a hospital to

participate in the collection of HCAHPS data, a hospital must either: (1) contract with an

approved HCAHPS survey vendor that will c onduct the survey and submit data on the

hospital’s behalf to the QIO Clinical Ware house; or (2) self-administer the survey

without using a survey vendor provided that the hospital attends HCAHPS training and

meets Minimum Survey Requirements as specified on the Web site at:

http://www.hcahpsonline.org. A current lis t of approved HCAHPS survey vendors can

be found on the HCAHPS Web site a t: http://www.hcahpsonline.org.

We are proposing that the FY 2012 payment determination for the RHQDAPU

program for HCAHPS will be based on discharges from April 1, 2010 through

December 31, 2010.

We are proposing that the FY 2013 payment determination for the RHQDAPU

program for HCAHPS will be based on di scharges from January 1, 2011 through

December 31, 2011.

We are proposing that the FY 2014 payment determination for the RHQDAPU

program for HCAHPS will be based on di scharges from January 1, 2012 through

December 31, 2012.

Every hospital choosing to contract w ith a survey vendor should provide the

sample frame of HCAHPS- eligible discharges to its surv ey vendor with sufficient time to

allow the survey vendor to begin contacting each sampled patient within 6 weeks of

discharge from the hospital. (We refer readers to the Quality Assurance Guidelines

located at http://www.hcahpsonline.org for de tails about HCAHPS e ligibility and sampleCMS-1498-P 438

frame creation.) In addition, th e hospital must authorize the survey vendor to submit data

via My QualityNet, the secure part of the QualityNet Web site, on the hospital’s behalf.

After the survey vendor submits the data to the QIO Clinical Warehouse, we

strongly recommend that hospitals employing a survey vendor promptly review the two

HCAHPS Feedback Reports (the Provider Surv ey Status Summary Report and the Data

Submission Detail Report) that are available. These reports enable a hospital to ensure

that its survey vendor has submitted the data on time and the data has been accepted into

the QIO Clinical Warehouse.

Any hospital that has five or fewer HCAH PS-eligible discharges in any month is

no longer required to submit HCAHPS surveys for that month, although the hospital may

voluntarily choose to submit these data. Howe ver, the hospital still must submit its total

number of HCAHPS-eligible cases for that m onth to the QIO Clinical Warehouse as part

of its quarterly HC AHPS data submission.

In order to ensure compliance with HCAHPS survey and administration

protocols, hospitals and survey vendors must participate in all oversight activities. As

part of the oversight process, during the ons ite visits or conference calls, the HCAHPS

Project Team will review the hospital’s or survey vendor’s survey systems and assess

protocols based upon the most recent HCAHPS Quality Assurance Guidelines . All

materials relevant to survey administration will be subject to review. The systems and

program review includes, but is not limited to : (a) survey management and data systems;

(b) printing and mailing materials and fac ilities; (c) telephone a nd IVR materials and

facilities; (d) data receipt, entry and storage facilities; and (e) written documentation ofCMS-1498-P 439

survey processes. Organizations will be gi ven a defined time period in which to correct

any problems and provide follow-up documenta tion of corrections for review. As

needed, hospitals and survey ve ndors will be subject to follow-up site visits or conference

calls. If CMS determines that a hospital is not compliant with HCAHPS program

requirements, CMS may determine that the hospital is not submitting HCAHPS data that

meet the requirements of the RHQDAPU program.

We continue to strongly recommend that each new hospital participate in an

HCAHPS dry run, if feasible, prior to beginni ng to collect HCAHPS data on an ongoing

basis to meet RHQDAPU program requirements. New hospitals can conduct a dry run in

the last month of a calendar quarter. The dry run will give newly participating hospitals

the opportunity to gain first-hand experien ce collecting and tr ansmitting HCAHPS data

without the public reporting of results. Usin g the official survey instrument and the

approved modes of admin istration and data co llection protocols, hos pitals/survey vendors

will collect HCAHPS dry-run data and submit the data to My QualityNet, the secure

portion of QualityNet.

We are again encouraging hospitals to regularly check the HCAHPS Web site at

http://www.hcahpsonline.org for pr ogram updates and information.CMS-1498-P 440

b. Additional Proposed RHQDAPU Program Pr ocedural Requirements for the FY 2012,

FY 2013 and FY 2014 Payment Determinations

(1) Chart-Abstracted Measures For Which Data Is Submitted Directly to CMS (via

QualityNet)

Hospitals must begin submitting RHQDAPU pr ogram data starting with the first

day of the quarter following the date when the hospital registers to participate in the

program. For purposes of meeting this require ment, we interpret the registration date to

be the date that the hospital submits a completed Notice of Participation form. As

proposed previously in this section, hospitals must also register with QualityNet and

identify a QualityNet Administrator who follows the QualityNet registration process

before submitting RHQDAPU program data.

Hospitals must continuously collect and re port data to CMS (via QualityNet) for

each of the quality measures under the topic ar eas that require char t abstraction (and are

not registry-based topic areas). For the FY 2012 and FY 2013 payment determinations,

the proposed topic areas are AMI, HF, PN, and SCIP. For the FY 2014 payment

determination, the proposed topic areas are AMI, HF, PN, SCIP, Emergency Department

Throughput (EDT), and Global Immunization (GIM).

For FY 2012, we are proposing that hospita ls must submit data for five calendar

year discharge quarters as follows: 4Q CY 2009, 1Q CY 2010 (AMI, HF and PN only),

2Q CY 2010, 3Q CY 2010 and 4Q CY 2010. For the FY 2013 payment determination,

we are proposing that hospitals must submit data for four consecutive calendar year

discharge quarters as follows: 1Q CY 2011, 2Q CY 2011, 3Q CY 2011 and 4Q CY 2011.CMS-1498-P 441

For the FY 2014 payment determination, hospita ls must submit data for four consecutive

calendar year discharge quarters as fo llows: 1Q CY 2012, 2Q CY 2012, 3Q CY 2012 and

4Q CY 2012. Hospitals must report thes e data by each quarterly deadline.

Hospitals must submit the data to th e QIO Clinical Warehouse using the CMS

Abstraction & Reporting Tool (CART), The Joint Commission ORYX ® Core Measures

Performance Measurement System, or anothe r third-party vendor tool that meets the

measurement specification requirements for data transmission to QualityNet. All

submissions will be executed through My QualityNet, the secure part of the QualityNet

Web site. Because the information in the QIO Clinical Warehouse is considered QIO

information, it is subject to the stringent QIO confidentiality regulations in

42 CFR Part 480. The QIO Clinical Warehouse will submit the data to CMS on behalf of

the hospitals.

Hospitals must submit complete data fo r each quality measure that requires chart

abstraction in accordance with the joint CMS/The Joint Commission sampling

requirements located on the QualityNet Web site. These requirements specify that

hospitals must submit a random sample or complete population of cases for each of the

topics covered by the quality measures. Ho spitals must meet the sampling requirements

for these quality measures for discharges in each quarter.

For the FY 2012 payment determination, we are proposing that hospitals must

submit population and sampling data for th ree consecutive calendar year discharge

quarters as follows: 2Q CY 2010, 3Q CY 2010 and 4Q CY 2010.CMS-1498-P 442

For the FY 2013 payment determination, we are proposing that hospitals must

submit population and sampling data for f our consecutive calendar year discharge

quarters as follows: 1Q CY 2011, 2Q CY 2011, 3Q CY 2011 and 4Q CY 2011

For the FY 2014 payment determination, we are proposing that hospitals must

submit population and sampling data for f our consecutive calendar year discharge

quarters as follows: 1Q CY 2012, 2Q CY 2012, 3Q CY 2012 and 4Q CY 2012.

Hospitals must submit to CMS on a qua rterly basis aggregate population and

sample size counts for Medicare and non-Medi care discharges for the topic areas for

which chart-abstracted data must be submitte d (currently AMI, HF, PN, and SCIP). For

clarification, we are proposing that hos pitals are required to submit a numeric

representation of their aggregate population a nd sample size count for each topic area

even if the hospital has not treated patients in a specific topic area. For example, if a

hospital has not treated AMI patients, the hospital is still required to submit a zero for its

quarterly aggregate population a nd sample count for that topic in order to meet the

requirement.

In order to reduce the burden on hospitals that treat a low number of patients in a

RHQDAPU program topic area, a hospital that has five or fewer discharges (Medicare

and non-Medicare combined) in a topic area du ring a quarter in which data must be

submitted is not required to submit patient-level data for that topic area for the quarter.

The hospital must still submit its aggregat e population and sample size counts for

Medicare and non-Medicare discharges for the topic areas each quarter. We also noteCMS-1498-P 443

that hospitals meeting the five or fewer patient discharge exception may voluntarily

submit these data.

The quarterly data submission deadline for hospitals to submit patient level data

for the proposed measures that require chart abstraction is 41⁄2 months following the last

discharge date in the calendar quarter. CMS will post the quarterly submission deadline

schedule on the QualityNet Web site (http ://www.QualityNet.org). Chart-abstracted

measures have not been added for the FY 2012 payment determination. The collection of

new chart-abstracted measures proposed fo r the FY 2013 payment determination would

begin with the 1 st calendar quarter 2011 discharges, for which the submission deadline

would be August 15, 2011. The collection of new chart-abstracted measures proposed

for the FY 2014 payment determination would begin with the 1 st calendar quarter 2012

discharges, for which the submission deadlin e would be August 15, 2012. Hospitals must

comply with the discharge quarter submission deadlines in any fiscal year for each

quarter for which data submission is required (Quarter 1- August 15 th ; Quarter 2-

November 15 th ; Quarter 3- February 15 th ; Quarter 4- May 15 th ).

The data submission deadline for hospita ls to submit aggregate population and

sample size count data for the measures re quiring chart abstraction is four months

following the last discharge date in the calendar quarter. This requirement allows CMS

to advise hospitals regarding their submissi on status in enough time for them to make

appropriate revisions before the data submission deadline. We will post the aggregate

population and sample size countdata submission deadlines on the QualityNet Web site

(http://www.QualityNet.org).CMS-1498-P 444

CMS strongly recommends that hospitals review the QIO Clinical Warehouse

Feedback Reports and the RHQDAPU Program Provider Participation Reports that are

available after patient level data are submitted to the QIO Clinical Warehouse. CMS

generally updates these reports on a daily ba sis to provide accurate information to

hospitals about their submissions. These reports enable hospitals to ensure that their data

were submitted on time and accepted in to the QIO Clinical Warehouse.

(2) Data Submission Requirements for HCAHPS

Hospitals must continuously collect a nd submit HCAHPS data in accordance with

the current HCAHPS Quality Assurance Guidelines , which can be found on the

HCAHPS Web site, http://www.hcahpsonline.org. The QIO Clinical Warehouse is able

to accept submissions indicating zero HCAHPS-eligible discharges in a month. A

hospital with zero HCAHPS-eligible discharges in a month must submit a zero as its total

number of HCAHPS-eligible cases to the QIO Clinical Warehouse for that month as part

of its quarterly HC AHPS data submission.

In order to reduce the burden on hospitals that treat a low number of patients that

would be otherwise covered by the HCAHPS submission requirements, a hospital that

has five or fewer HCAHPS-eligible discharges during a month is not required to submit

HCAHPS surveys for that month. However, hospitals that meet this exception may

voluntarily submit this data. A hospital with five or fewer HCAHPS-eligible discharges

must submit its number of HCAHPS-eligible cas es to the QIO Clinical Warehouse for the

month(s) in which it had five or fewer HC AHPS-eligible discharges as part of its

quarterly HCAHPS data submission.CMS-1498-P 445

(3) Procedures for Claims-Based Measures

Hospitals are encouraged to regularly check the QualityNet Web site,

http://www.QualityNet.org, for pr ogram updates and information.

● The following RHQDAPU program claims-based measures would be

calculated using Medicare claims:

Topic FY 2012 Payment Determination: Proposed Claims-Based Quality Measures (No Additional Hospital Data Submission Required) Mortality Measures (Medicare Patients)

● MORT-30-AMI Acute Myocardial Infarction 30-day mortality –Medicare patients

● MORT-30-HF Heart Failure 30-day mortality Medicare patients

● MORT-30-PN Pneumonia 30-day mortality -Medicare patients Readmission Measures (Medicare Patients)

● READ-30-HF Heart Failure (HF) 30- Day Risk Standardized Readmission Measure (Medicare patients)

● READ-30-AMI Acute Myocardial Infarction (AMI) 30-Day Risk Standardized Readmission Measure (Medicare patients)

● READ-30-PN Pneumonia (PN) 30-Day Risk Standardized Readmission Measure (Medicare patients) AHRQ Patient Safety Indicators (PSIs), Inpatie nt Quality Indicators (IQIs) and Composite Measures

● PSI 06: Iatrogenic pneumothorax, adult

● PSI -11: Post Operative Respiratory Failure *

● PSI – 12: Post Operative PE or DVT *

● PSI 14: Postoperative wound dehiscence

● PSI 15: Accidental puncture or laceration

● IQI 11: Abdominal aortic aneurysm (AAA) mortality rate (with or without volume)

● IQI 19: Hip fracture mortality rate

● Complication/patient safety for selected indicators (composite)

● Mortality for selected medical conditions (composite) AHRQ Patient Safety Indicator (PSI) and Nursing Sensitive Care

● Death among surgical inpatients with serious, treatable complications Hospital Acquired Condition Measures

• Foreign Object Retained After Surgery *

• Air Embolism *

• Blood Incompatibility *CMS-1498-P 446

Topic FY 2012 Payment Determination: Proposed Claims-Based Quality Measures (No Additional Hospital Data Submission Required)

• Pressure Ulcer Stages III & IV *

• Falls and Trauma: (Includes: Fracture Dislocation Intracranial Injury Crushing Injury Burn Electric Shock)*

• Vascular Catheter-Associated Infection*

• Catheter-Associated Urinary Tract Infection (UTI) *

• Manifestations of Poor Glycemic Control*

*New proposed measure
For the claims-based RHQDAPU program measures listed above, hospitals are

not required to submit the data to the QIO Clinical Warehouse. CMS uses the existing

Medicare fee-for-service claims to calculate the measures. For the FY 2012 payment

determination, CMS would use up to 3 years of discharges prior to January 1, 2011 (as

appropriate for the measure), to calculate the 30-day mortality and 30-day readmission

measures AHRQ PSI, IQI and Composite measures (including the AHRQ PSI and

Nursing Sensitive Care measure, Death among surgical inpatients with serious, treatable

complications), and the proposed new HAC Measures. For the FY 2013 and FY 2014

payment determinations, CMS would use up to 3 years of discharges (as appropriate for

the measure) prior to January 1, 2012, and Ja nuary 1, 2013 respectively. Hospitals are

required to appropriately repor t the POA indicator in conjunction with ICD-9-CM coding

to determine the presence of HACs so that the proposed HAC measures can be calculated

for the RHQDAPU program using Medicare claims.

(4) Data Submission Requireme nts for Structural Measures

● We are proposing that for the FY 2012 payment determination, hospitals

submit the required registry participation info rmation once for the structural measures viaCMS-1498-P 447

a Web-based collection tool between July 1, 2011 – August 15, 2011 with respect to the

time period of July 1, 2010 through December 31, 2010.

Below is the list of structural measures we are proposing to adopt for the FY 2012

payment determination:

Topic FY 2012 Payment Determination: Proposed Structural Measures Cardiac Surgery

• Participation in a Systematic Database for Cardiac Surgery Stroke Care

• Participation in a Systematic Clinical Database Registry for Stroke Care Nursing Sensitive Care

• Participation in a Systematic Clinical Database Registry for Nursing Sensitive Care

(5) Data Submission of All-Patient Volume Data for Selected MS-DRGs Related to

RHQDAPU Program Measures

For submission of the all-patient volum e data for selected MS-DRGs, we are

proposing that hospitals submit patient level information n eeded for CMS to apply the

MS-DRG GROUPER software to calculate th e all-patient MS-DRG volumes, the data

elements for which would be defined in th e Specifications Manual. Hospitals would

begin submitting this data quarterly via QualityNet beginning with January 1, 2011

discharges.

We invite comment on an alternative that hospitals submit hospital-level

all-patient volume data base d upon specific ICD-9-CM codes that are related to the

selected MS-DRGs (rather than the patient-level data) necessary for CMS to calculate the

MS-DRGs. Hospitals would begin submitting this data quarterly via QualityNet

beginning with January 1, 2011 discharges.CMS-1498-P 448

(6) Proposed Data Submission and Repor ting Requirements for HAI Measures

Reported via NHSN

We are proposing that hospitals par ticipating in RHQDAPU submit the data

elements needed to calculate the Central Line Associated Blood Stream Infection and

Surgical Site Infection measures to the NHS N using the standard procedures that have

been set forth by CDC for NHSN participation in general and for submission of these two

measures to NHSN in particular. This would include NHSN par ticipation forms and

indications to CDC allowing CMS to access data for these two measures for RHQDAPU

program purposes, adherence to training re quirements, use of standard CDC measure

specifications, data element de finitions, data collection requi rements and instructions, and

data reporting timeframes. Detailed requirements for NHSN participation, measure

specifications, and data collection can be found at http://www.cdc.gov/nhsn/. Hospitals

must use the current specifications and data collection tools available on the CDC Web

site to submit data for the Central Line A ssociated Bloodstream In fection and Surgical

Site Infection measures. We are proposing th at hospitals would submit data for these two

measures to CDC’s NHSN on a monthly basi s for discharges occurring on or after

January 1, 2011.

For the FY 2013 payment determination, we are proposing that hospitals must

submit HAI data via the NHSN for four consecutive calendar year discharge quarters as

follows: 1Q CY 2011, 2Q CY 2011, 3Q CY 2011 and 4Q CY 2011.CMS-1498-P 449

For the FY 2014 payment determination, hosp itals must submit HAI data for four

consecutive calendar year discharge quarte rs as follows: 1Q CY 2012, 2Q CY 2012, 3Q

CY 2012 and 4Q CY 2012.

We are proposing that once quarterly each hospital would utilize an automated

report function that will be made available to submitters in the NHSN, to generate a

quarterly report containing hospital-level numerator, deno minator, and exclusion counts

for these two CDC measures specifically for the RHQDAPU program. The CDC will

create this automated RHQDAPU report f unction and add it to NHSN’s reporting

functionalities in the next few months. While hospitals may be reporting other data

elements to CDC for other reporting programs (that is: State mandated surveillance

programs), the quarterly RHQDAPU report that would be generated within NHSN would

only contain those data elements needed to calculate the two measures currently being

proposed for the RHQDAPU program. CMS will access the reports in the NHSN and

will compile the reports for RHQDAPU pr ogram and public re porting purposes.

We invite comment on the proposed me chanism for submitting data for the

Central Line Associated Blood Stream Infecti on measure and the Surgical Site Infection

measure for the RHQDAPU program beginning with the FY 2012 payment

determination.

(7) Data Submission Requirement s for Registry-Based Measures

We are proposing that hospitals partic ipating in RHQDAPU would be required

to choose at least one of four registry base d measure topics (ICD Complications, Stroke,

Nursing Sensitive Care, or Cardiac Surgery), and would submit the data needed toCMS-1498-P 450

calculate the measures included in the chosen registry-based topic to a qualified registry

in order to meet the requirements to re ceive the full FY 2013 annual payment update.

We are proposing that hospitals then would arrange to ha ve the qualified

registry calculate the measures and submit to the QIO Clinical Warehouse the results, as

well as the numerator, denominator, and excl usions. Any arrangement reached between

the hospital and the qualified registry must comply with HIPAA. The qualified registry

would also submit registry-derived hospital-level measure calculations to the QIO

Clinical Warehouse using a CMS-specified reco rd layout and file format that we will

make available.

Our program and its data system must maintain compliance with HIPAA

requirements for requesting, processing, stor ing, and transmitting data. For the FY 2013

RHQDAPU payment determination, hospitals woul d need to submit data for the proposed

registry-based measures to the qualified regi stry in the form and manner and by the

deadline(s) specified by the registry.

CMS will begin qualifying registries for the four proposed regi stry-based topics

so that hospitals may begin submitting data for discharges beginning January 1, 2011.

Proposed registry qualification criteria are disc ussed in a section V.A.13. of this proposed

rule. We are proposing to post on the R HQDAPU program section of the QualityNet

Web site http://www.qualitynet.org a list of qualified registries for the FY 2013

RHQDAPU payment determination, including th e registry name, contact information,

and the measure(s) that the registry has been qualified to collect and report for the

RHQDAPU program.CMS-1498-P 451

We anticipate posting the list of qualified FY 2011 registries as soon as we have

completed vetting the registries interested in participating in the FY 2013 RHQDAPU

program payment determination and identifie d the qualified registries for the FY 2013

RHQDAPU program payment determination, whic h we anticipate will be completed by

December 31, 2010. Specific data submission requirements for the registry-based

measures are discussed below:

(A) Hospitals that Choose to Re port the ICD Complications Measure

If the hospital chooses the ICD Complica tions measure, it would submit specified

data elements for specified populations to the qualified ICD registry. We intend to

establish criteria and begin qualifying registries for this topic so that hospitals can begin

submitting data for discharges beginning Ja nuary 1, 2011. The hospital would follow the

standard participation and reporting procedures set by the registry regarding the

submission of data elements for the particular measures we have specified for the topic.

These data elements and population definiti ons will be listed in the Specifications

Manual.

Hospitals must allow the qualified registry it is using to report the patient-level

data to CMS in order to calculate the ICD complications measure.

(B) Hospitals that Choose to Report Eith er the Stroke, Nursing Sensitive Care, or

Cardiac Surgery Measures

If a hospital chooses the Stroke, Nurs ing Sensitive Care, or Cardiac Surgery

measure topics, it would submit data on the measures listed for these topics to a qualified

registry for the topic. CMS intends to estab lish criteria and begin qualifying registries forCMS-1498-P 452

these topics so that hospitals can begin submitting data for discharges beginning

January 1, 2011. The hospital would follow th e standard particip ation and reporting

procedures set by the registry regarding the s ubmission of data elements for the particular

measures CMS has specified for the topic. Additionally, the hospital would agree to

allow the registry to send calculations of the measures, numerator, denominator and

exclusion counts to CMS for the RHQDAPU program.

6. RHQDAPU Program Disaster Extensions and Waivers

In the FY 2010 IPPS/RY 2010 LTCH PPS proposed rule (74 FR 24176), we

solicited public comment about rules we could adopt that would enable hospitals to

request either an extension or a waiver of various RHQDAPU program requirements in

the event of a disaster (such as a hurrican e that damages or destroys the hospital).

Specifically, we welcomed public comment on the following issues:

● Recommendations for rules that we c ould follow when considering whether to

grant an extension or waiver of RHQDAP U program requirements in the event of a

disaster, including suggested criteria that we should take into account (for example,

specific hospital infrastruct ure damage, hospital closur e time period, degree of

destruction of medical records, impact on data vendors, and long- term evacuation of

discharged patients impacting HCAHPS survey participation).

● The role that QIOs and QIO support c ontractors should play in the event of a

disaster, including communicating with affected hospitals, communicating with State

hospital associations, and collecting information directly from hospitals.CMS-1498-P 453

● How CMS extension or waiver decisi ons should be communicated to affected

hospitals.

● Any other issues commenters deem re levant to a hospital’s request for an

extension or waiver of RHQDAPU program re quirements in the event of a disaster.

We responded to public comments in the FY 2010 IPPS/RY 2010 LTCH PPS

final rule (74 FR 43881). We recognize that there are times when hospitals are unable to

submit quality data due to extraordinary circumstances that are not within their control.

It is our goal to not penalize hospitals for such circumstances and we do not want to

unduly increase their burden during these times.

Therefore, we are proposing a process fo r hospitals to request and for CMS to

grant extensions or waivers with respect to the reporting of required quality data when

there are extraordinary circumstances beyond the control of the hospital. Under the

proposed process, in the event of extraordin ary circumstances not within the control of

the hospital, for the hospital to receive consideration for an extension or waiver of the

requirement to submit quality data for one or more quarters, a hospital must submit to the

QIO in the hospital’s State a request form that will be made available on the QualityNet

Web site. The following information should be noted on the form:

● Hospital CCN;

● Hospital Name;

● CEO and any other designated personne l contact information, including name,

e-mail address, telephone number, and mailing address (mus t include a physical address,

a post office box address is not acceptable);CMS-1498-P 454

● Hospital’s reason for reques ting an extension or waiver;

● Evidence of the impact of the extraordinary circumstances, including but not

limited to photographs, newspaper a nd other media articles; and

● A date when the hospital will again be able to submit RHQDAPU data, and a

justification for the proposed date.

The request form must be signed by the hospital’s CEO. A request form must be

submitted within 45 days of the date that the extraordinary circumstance occurred. The

QIO in the hospital’s state will forward the re quest form to CMS. Following receipt of

the request form, CMS will: (1) provide a written acknowledgement using the contact

information provided in the request, to the CEO and any additional designated hospital

personnel, notifying them that the hospital’s request has been received; and (2) provide a

formal response to the CEO and any additiona l designated hospital personnel using the

contact information provided in the re quest notifying them of our decision.

This proposal does not preclude CMS from granting waivers or extensions to

hospitals that have not requested them wh en we determine that an extraordinary

circumstance, such as an act of nature (for example, hurricane), affects an entire region or

locale. If CMS makes the determination to grant a waiver or extension to hospitals in a

region or locale, CMS will communicate this decision through routine communication

channels to hospitals, vendors and QIOs, in cluding but not limited to issuing memos,

emails and notices on the QualityNet Web site. We invite comment on this proposal.CMS-1498-P 455

7. Proposed Chart Valida tion Requirements for Chart-Abstracted Measures

a. Chart Validation Requir ements and Methods for the FY 2012 Payment Determination

For the FY 2012 payment determinati on, we will use the chart validation

requirements and methods that we adopted for FY 2012 in the FY 2010 IPPS/RY 2010

LTCH PPS final rule (74 FR 43884 through 43889). These requirements, as well as

additional information on these requirements, will be posted on the QualityNet Web site

after we issue the FY 2011 IPPS/RY 2011 LTCH PPS final rule.

Specifically, we will:

● Randomly select on an annual basis 800 participating hospita ls that submitted

chart-abstracted data for at least 100 discharg es combined in the measure topics to be

validated. To determine whether a hospital meets this “100-case threshold,” we will look

to the discharge data submitted by the hospital during the calendar year three years prior

to the fiscal year of the relevant payment deter mination. For example, if the 100-case

threshold applied for the FY 2011 payment determination (which it will not), the

applicable measure topics would be AMI, HF, PN, and SCIP, and we would choose

800 hospitals that submitted discharge data for at least 100 cases combined in these topics

during calendar year 2008. If a hospital did not submit discharge data for at least

100 cases in these topics during CY 2008, we wo uld not select the hospital for validation.

We will announce the topic areas that apply for the FY 2012 payment determination at a

later date, and we plan to select the first 800 hospitals in July 2010. We will select

hospitals for the FY 2012 validation if they meet the 100-case threshold during CY 2009.

We adopted this 100-case threshold because we believe that it stri kes the appropriateCMS-1498-P 456

balance between ensuring that the selected hospitals have a large enough patient

population to be able to submit sufficient data to allow us to complete an accurate

validation, while not requirin g validation for hospitals w ith a low number of submitted

quarterly cases and relatively unreliable measure estimates. Based on previously

submitted data, we es timate that 98 percent of pa rticipating RHQDAPU program

hospitals will meet this threshold and, thus, be eligible for validation. As noted below,

we solicited comments and suggestions on how we might be able to target the remaining

2 percent of hospitals for validation.

● Validate for each of the 800 hospitals a randomly selected stratified sample for

each quarter of the validation period. Each qua rterly sample will include 12 cases, with

at least one but no more than three cases per topic for which chart-abstracted data was

submitted by the hospital. However, we recognize that some selected hospitals might not

have enough cases in all of the applicable topics to submit data (for example, if they have

5 or fewer discharges in a topic area in a quarter). For those hospitals, we will validate

measures in only those topic areas for whic h they have submitted data. For the FY 2012

payment determinati on, we will validate 1 st calendar quarter 2010 through 3 rd calendar

quarter 2010 discharge data. We will validate 3 quarters of da ta for FY 2012 in order to

provide hospitals with enoug h time to assess their medical record documentation and

abstraction practices, and to ta ke necessary corrective actions to improve these practices,

before documenting their 1 st calendar quarter 2010 discharges into medical records that

may be sampled as part of th is proposed validation process.CMS-1498-P 457

The CDAC contractor will, each quarter that applies to the validation, ask each of

the 800 selected hospitals to submit 12 randomly selected medical char ts from which data

was abstracted and submitted by the hospital to the QIO Clinical Warehouse. We note

that, under our current requirements, hos pitals must begin submitting RHQDAPU

program data starting with the first day of the quarter following the date when the

hospital registers to participate in the progra m. For purposes of me eting this requirement,

we interpret the registration date to be the date that the hospital submits a completed

Notice of Participation form. As proposed prev iously in this section, hospitals must also

register with QualityNet and identify a QualityNet Administrator who follows the

QualityNet registration process be fore submitting RHQDAPU program data.

In addition, we will continue the follo wing timeline with respect to CDAC

contractor requests for paper medical r ecords for the purpose of validating RHQDAPU

program data. Beginning with CDAC contr actor requests for second calendar quarter

2009 paper medical records, the CDAC contr actor will request paper copies of the

randomly selected medical charts from each hospital via certified ma il (or other trackable

method that requires a hospital representative to sign for the letter), and the hospital will

have 45 days from the date of the request (as documented on the request letter) to submit

the requested records to the CDAC contractor . If the hospital does not comply within 30

days, the CDAC contractor w ill send a second certified letter to the hospital, reminding

the hospital that it must return paper copies of the requested medical records within

45 calendar days following the date of the initial CDAC contractor medical record

request. If the hospital still does not comply, then the CDAC contractor will assign aCMS-1498-P 458

“zero” score to each measure in each missing record. The letter from the CDAC

contractor is addressed to the hospital’s medical record staff identified by the hospital to

their state Quality Improvement Organizati on (QIO). CMS recommends that hospitals

routinely check with their State QIO to ensure the correct person is listed to receive the

record request. If CMS has evidence fro m the CDAC contractor that the hospital

received both letters requesting medical records (as determined by the tracking system

used by CDAC contractor), the hospital is re sponsible for not returning their charts and

will not be able to submit charts as part of their reconsideration request.

Under the validation methodology, once the CDAC contractor receives the charts,

it will re-abstract the same data submitted by the hospitals and calculate the percentage of

matching RHQDAPU program measure numerat ors and denominators for each measure

within each chart submitted by the hospital. Specifically, we will estimate the accuracy

by calculating a match rate percent agreement for all of the variables submitted in all of

the charts. For any selected record, a measure’s numerator and denominator can have

two possible states, included or excluded, depending on whether the hospital accurately

included the cases in the meas ure numerator(s) and denominator(s). We will count each

measure in a selected record as a match if the hospital submitted measure numerator and

denominator sets match the measure numerat or and denominator states independently

abstracted by our contractor. For example, one heart failure case from which data has

been abstracted for four RHQDAPU program ch art-abstracted measures (that is, HF-1,

HF-2, HF-3, and HF-4) would receive a 75 percent match if three out of four of the

hospital-reported heart failure measure numerat or and denominator st ates matched the re-CMS-1498-P 459

abstracted numerator and deno minator states. This proposed scoring approach is the

same as recommended in the CMS Hospital Valu e-Based Purchasing Report to Congress,

and is illustrated in further detail using an example in pages 83-84 of the report which can

be found on our Web site at:

http://www.cms.hhs.gov/AcuteInpatientPPS/dow nloads/HospitalVBPPlanRTCFINALSU

BMITTED2007.pdf. We believe that this appr oach is appropriate , and it was supported

by many commenters when we requested comment in the FY 2009 and FY 2010 IPPS

final rules for input about the RHQDAPU pr ogram validation pro cess (73 FR 48622 and

48623, 74 FR 43886 and 43887).

Under the validation methodology, we will:

● Use, as we currently do, each select ed case as a cluster comprising one or

multiple measures utilized in a validation score estimate. Each selected case will have

multiple measures included in the valida tion score (for example, for the FY 2011

payment determination, a heart failure record will include 4 heart failure measures).

Specifically, we will continue using the design-specific estimate of the variance for the

confidence interval calculati on, which, in this case, is a stratified single stage cluster

sample, with unequal cluster sizes. (For reference, see Cochran, William G.: Sampling

Techniques, John Wiley & Sons, New Yor k, chapter 3, section 3.12 (1977); and Kish,

Leslie.: Survey Sampling, John Wiley & S ons, New York, chapter 3, section 3.3 (1964).)

Each quarter and clinical topic is treated as a stratum for variance estimation purposes.

We believe that the clustering approach is a statistically appropriate technique for

calculating the annual validation confidence interval. Because we will not be validatingCMS-1498-P 460

all hospital records, we need to calculate a confidence interval that incorporates a

potential sampling error. Our clustering appr oach incorporates the degree of correlation

at the individual data record level, because our previous validation experience indicates

that hospital data mismatch errors tend to be clustered in individual data records. We

have used this clustering since the inception of the RHQDAPU program validation

requirement to calculate variability estimates needed for calculating confidence intervals

(70 FR 47423).

● Use the upper bound of a one-tailed 95 per cent confidence interval to estimate

the validation score; and

● Require all RHQDAPU prog ram participating hospitals selected for validation

to attain at least a 75 percent validation score per quarter to pass the validation

requirement.

We believe that this modified validati on methodology incorporates many of the

principles supported by the vast majority of commenters in response to our solicitation

for public comments in the FY 2009 and FY 2010 IPPS proposed rule (73 FR 23658

through 23659, 74 FR 43886 and 43887). Specifically, we believe that the increased

annual sample size per hospital will provide more reliable estimates of validation

accuracy. The sample size of 12 records per quarter would provide a total of 36 records

across the three sampled quarters for the FY 2012 payment determination, and 48 records

in subsequent years. This estimate would improve the reliability of our validation

estimate, as compared to the current RHQDAP U program annual valid ation sample of 20

cases per year. We also believe that modi fying the validation score to reflect measureCMS-1498-P 461

numerator and denominator accuracy will ensu re that accurate data are posted on the

Hospital Compare Web site.

In addition, we believe that stratified quarterly sample s by topic will improve the

feedback provided to hospitals . CMS will provide validation feedback to hospitals about

all sampled topics submitted by the hospitals each quarter. Because all relevant data

elements submitted by the hospital must match the independently re-abstracted data

elements to count as a match, we reduced the passing threshold from 80 percent to

75 percent. We will use a one-tail confidence interval to calculate the validation score

because we strongly believe that a one-tail test most appropriately reflects the pass or fail

dichotomous nature of the st atistical test regarding whether the confidence interval

includes or is completely above the 75 percent passing validation score.

We also will continue to allow hospitals that fail to meet the passing threshold for

the quarterly validation an opportunity to appeal the validation results to their State QIO.

QIOs are currently tasked by CMS to provi de education and technical assistance about

RHQDAPU program data abstraction and meas ures to hospitals, and the quarterly

validation appeals process will pr ovide hospitals with an opportunity to both appeal their

quarterly results and receive education free of charge from their State QIO. This State

QIO quarterly validation appeals process is independent of the proposed RHQDAPU

program reconsideration procedures for hos pital reconsideration requests involving

validation for the FY 2010 payment upda te proposed in this proposed rule.CMS-1498-P 462

b. Proposed Supplements to the Chart Validation Process for the FY 2013 Payment

Determination and Subsequent Years

For FY 2013 and future years, we are also proposing to adopt the same validation

requirements that we adopted for the FY 2012 payment determination, except as set forth

below.

For FY 2013 and future years, we are proposing to modify our FY 2012 criteria

by adding a targeting criterion, refining our random sample approa ch, and changing our

data discharge quarters validated as part of our proposed synchronization of RHQDAPU

timelines. Specifically, we are proposing the following changes for FY 2013:

We are proposing to validate the data submitted by a hos pital if the hospital failed

the previous year’s RHQDAPU program valid ation. We are proposing this targeting

criterion to improve data accura cy for all hospitals failing our validation requirement in a

previous year. We believe that this proposal is an appropriate me thod to ensure data

accuracy, since it targets our resources on the hospitals with the least accurate data based

on FY 2012 validation results. We also believe that these hospitals must correct the data

inaccuracies identified in RHQDAPU validati on for their internal quality improvement

and RHQDAPU measures publicly reported on Hospital Compare . Our proposal allows

CMS to assess the accuracy of these hospitals’ data and provide feedback to hospitals

until they comply with our RHQDAPU validation requirement.

Specifically, we are proposing that all hospitals selected for validation for the

FY 2012 payment determination and that fail th e validation will be se lected for validation

for the FY 2013 payment determination. Base d on data analysis of past validationCMS-1498-P 463

results, we estimate that targeting these hosp itals would add about 20 to 40 hospitals to

our list of validated hospitals to be se lected in the FY 2013 validation sample.

For FY 2013, we also are proposing the following changes to the FY 2012

RHQDAPU validation random sample approach:

Starting in FY 2013, we are proposing to discontinue the 100 case minimum

threshold for selection in the RHQDAPU 800 hos pital random sample. We believe that

discontinuing this requirement would impr ove the robustness of the RHQDAPU program

validation sample by including the smalle st hospitals participating in the RHQDAPU

program in the sample. All hospitals successfully submitting at least one RHQDAPU

case for the third calendar quarter of the year two years prior to the year to which the

validation applies would be eligible to be selected for validation. For example, for the

FY 2013 payment determination, we would se lect the sample in early 2011, and all

hospitals that submitted at least one RHQDAP U case for third quarter 2010 discharges

would be eligible to be sel ected. Starting in FY 2013, we are proposing this change to

the RHQDAPU random validation sample, rather than including these hospitals in a

targeted sample, to ensure that all RHQDAPU participating hospitals are equally likely to

be selected in the ra ndom validation sample.

For the FY 2013 payment determination, we are proposing to modify the

quarterly stratified sample selection by reallocating sample cases when a hospital has

submitted fewer than three cases in a topic within a quarter. In these rare cases, we are

proposing to randomly reallocate the extra sample cases to other topics with more than 3

submitted quarterly cases. This proposed modi fication is designed to ensure that CMSCMS-1498-P 464

selects 12 cases for all hospitals in a quarter, including those hospitals specializing in

only one topic. For example, an orthopedic specialty surgery hospital submitting only

SCIP measure cases in a given quarter would have only SCIP measure cases randomly

selected in the validation sample for that quarter. This would provide a more reliable

estimate of abstraction and measure accuracy by maintaining the same 12 case total

quarterly validation sample.

For the FY 2013 payment determination, we also are proposing to validate data

from the 4 th calendar quarter of 2010 through the 3 rd calendar quarter of 2011 in

accordance with our proposed synchronizati on of RHQDAPU data as outlined in section

V.A.5.a.(2) of this proposed ru le. This lag between the time a hospital submits data and

the time we can validate that data is necessary because data is not due to the QIO Clinical

Warehouse until 41⁄2 months after the end of each quarter, and we need additional time to

select hospitals and comple te the validation process.

We are also considering additional change s to our validation approach for future

years. Beginning with the FY 2014 payment determination, we are considering adding

two strata to the current RHQDAPU program validation sample of SCIP, AMI, HF, and

PN cases. We are considering selecting 2 additional validation samples of 3 cases per

selected hospital per quarter. One additi onal quarterly sample would enable us to

validate the Central Line Associated Bloodstr eam Infection (CLABSI) and Surgical Site

Infection (SSI) measures that we are propos ing to add to the RHQDAPU measure set for

the FY 2013 payment determination, and the second additional quart erly sample would

enable us to validate the ED-Throughput and the Immunization for Influenza andCMS-1498-P 465

Immunization for Pneumonia global measures that we are proposing to add to the

RHQDAPU measure set for the FY 2014 paymen t determination. Thus, we would be

validating a total of 18 records per quarter per validated hospital in six strata (1) SCIP,

(2) AMI, (3) HF, (4) PN, (5) CLABSI/SSI, and (6) ED-Throughput/Immunization

measures). We are also considering requiring hospitals to sign a written form explicitly

granting CMS access to their patient level da ta submitted to for the proposed Central

Line Associated Blood Stream Infection m easure and the Surgical Site Infection

measure. We believe that the CLABSI/SSI stratum is necessary to validate the data in the

reports that we will access from NHSN for th e RHQDAPU program. We invite comment

on our validation proposal s and considerations.

We note that we are considering proposing, beginning with the FY 2015 payment

determination, to add hos pitals to our valida tion sample if they were open under their

current CCNs in FY 2012 but not selected fo r validation in the three previous annual

RHQDAPU validation samples. We are cons idering this addition to supplement our

validation approach to ensure that all elig ible RHQDAPU program hospitals are selected

for validation at least once every 4 years. We are considering this addition beginning

with the FY 2015 payment determination because FY 2015 would be the fourth year that

we will be using the random validation approach.

8. Data Accuracy and Completeness Ac knowledgement Requirements for the FY 2011

Payment Determination and Subsequent Years

For the FY 2011 payment determination a nd subsequent years, in the FY 2010

IPPS/RY 2010 LTCH PPS proposed rule (74 FR 24180), we proposed to requireCMS-1498-P 466

hospitals to electronically acknowledge on an annual basis the completeness and

accuracy of the data submitted for the RHQDAPU program payment determination.

Hospitals will be able to submit this acknow ledgement on the same Web page that they

use to submit data necessary to calculate the st ructural measures, and we believe that this

Web page will provide a secure vehicle for hos pitals to directly acknowledge that their

information is complete and ac curate to the best of thei r knowledge. A single annual

electronic acknowledgement will provide us with explicit documen tation acknowledging

that the hospital’s data is accurate and co mplete, but will not unduly burden hospitals.

We noted that commenters generally supported the idea of electronic attestation in the

FY 2009 IPPS final rule (73 FR 48625) at the point of data submission to the QIO

Clinical Warehouse.

In addition, the Government Accountab ility Office (GAO) recommended in a

2006 report (GAO-06-54) that hospitals self-repo rt that their data are complete and

accurate. Therefore, in the FY 2010 IPPS/ RY 2010 LTCH PPS final rule (74 FR 43890)

for the FY 2010 payment determination, we required hospitals to electronically

acknowledge their data accuracy and comp leteness once between July 1, 2009, and

August 15, 2009. Hospitals will acknowledge that all information that is, or will be,

submitted as required by the RHQDAPU program for the FY 2010 payment

determination is complete and accurate to the best of their knowledge.

We are proposing to require hospitals to electronically acknowledge their data

accuracy and completeness once between July 1, 2010 and August 15, 2010 for data to be

used for the –FY 2012 RHQDAPU program payment determination.CMS-1498-P 467

9. Proposed Public Display Requirements for the FY 2012 Payment Determination and

Subsequent Years

Section 1886(b)(3)(B)(viii)(VII) of the Act provides that the Secretary shall

establish procedures for making data submitted under the RHQDAPU program available

to the public. As we noted in section V. A.1.c.(3) of this proposed rule, the RHQDAPU

program quality measures are typically reported on the Hospital Compare Web site

(http://www.hospitalcompare.hhs.gov), but on occasion are reported on other CMS Web

sites. We require that hospitals sign a Notice of Participation form when they first

register to participate in the RHQDAPU prog ram. Once a hospital has submitted a form,

the hospital is considered to be an active RHQDAPU program participant until such time

as the hospital submits a withdrawal form to CMS (72 FR 47360). Hospitals signing this

form agree that they will allow CMS to pub licly report the quality measures included in

the RHQDAPU program.

We will continue to display quality info rmation for public viewing as required by

section 1886(b)(3)(B)(viii)(VII) of the Act. Be fore we display this information, hospitals

will be permitted to revi ew their information as recorded in the QIO Clinical Warehouse.

10. Proposed Reconsideration and Appeal Procedures for the FY 2011 Payment

Determination

The general deadline for submitting a reque st for reconsideration in connection

with the FY 2011 payment determination is November 1, 2010. As discussed more fully

below, we are proposing that all hospitals submit a reque st for reconsideration andCMS-1498-P 468

receive a decision on that request before they can file an appeal with the Provider

Reimbursement Revi ew Board (PRRB).

For the FY 2011 payment determination, we are proposing to continue utilizing

most of the same procedures that we utilized for the FY 2010 requests for

reconsideration. Under these proposed procedures, the hospital must --

Submit to CMS, via QualityNet, a Reconsideration Request form (available on the

QualityNet Web site) containing the following information:

-- Hospital CMS Certification number (CCN).

-- Hospital Name.

-- CMS-identified reason for failure (as provided in the CMS notification of

failure letter to the hospital).

-- Hospital basis for requesting reconsideration. This must identify the hospital's

specific reason(s) for believing it met th e RHQDAPU program requirements and should

receive the full FY 2011 IPPS annual payment update.

-- CEO contact information, including name, e-mail address, telephone number,

and mailing address (must include the physical address, not just the post office box). We

no longer require that the hospital’s CEO sign the RHQDAPU program reconsideration

request. We have found that this requirement increases th e burden for hospitals because

it prevents them from electronically sub mitting the RHQDAPU program reconsideration

request forms. In addition, to the extent that a hospital can submit a request for

reconsideration on-line, the burden on our staff is reduced and, as a result, we can more

quickly review the request.CMS-1498-P 469

-- QualityNet System Administrator c ontact information, including name, e-mail

address, telephone number, and mailing address (must include the physical address, not

just the post office box).

-- Paper medical record requirement fo r reconsideration requests involving

validation. We are proposing that if a hos pital asks us to reconsider an adverse

RHQDAPU program payment decision made be cause the hospital failed the validation

requirement, the hospital must submit paper copies of all the medical records that it

submitted to the CDAC contractor each quarter for purposes of the validation. Hospitals

must submit this documentation to a CMS contractor. The contractor will be a QIO

support contractor, which has authority to review patient le vel information under

42 CFR Part 480. We will post th e address where hospitals can ship the paper charts on

the QualityNet Web site after we issue the FY 2011 IPPS/LTCH PPS final rule.

Hospitals submitting a RHQDAPU program valida tion reconsideration request will have

all mismatched data reviewed by CMS, and not their State QIO. (As discussed in section

V.A.6.b. of this proposed rule, the State QIO is available to conduct a quarterly validation

appeal if so requested by a hospital.)

For the FY 2011 payment determination, the RHQDAPU program data that will

be validated is 4 th calendar quarter 2008 through 3 rd quarter calendar year 2009 discharge

data. Hospitals must provide a written justification for each appealed data element

classified during the validation process as a mismatch. We will review the data elements

that were labeled as mismatched, as well as the written justifications provided by the

hospitals, and make a decision on the reconsid eration request. As we mentioned above,CMS-1498-P 470

we are proposing that all hospitals submit a r econsideration request to CMS and receive a

decision on that request prior to submitting a PRRB appeal. We believe that the

reconsideration process is less costly fo r both CMS and hospitals, and that this

requirement will decrease the number of PRRB appeals by resolving issues earlier in the

appeals process.

Following receipt of a request for reconsideration, we will--

● Provide an e-mail acknowle dgement, using the contact information provided in

the reconsideration request, to the CEO and the QualityNet Administrator that the request

has been received.

● Provide written notification to the hosp ital CEO, using the contact information

provided in the reconsideration request, regard ing our decision. We expect the process to

take approximately 90 days from the reconsideration request due date of

November 1, 2010.

As we stated in the in the FY 2010 IPPS/RY 2010 LTCH PPS final rule

(74 FR 43892), the scope of our review when a hosp ital requests reconsideration because

it failed our validation requirements will be as follows:

1. Hospital requests reconsideration for CDAC contractor -abstracted data

elements classified as mismatches affecting validation scores . Hospitals must timely

submit a copy of the entire requested medical record to the CDAC contractor during the

quarterly validation process for the requested cas e to be eligible to be reconsidered on the

basis of mismatche d data elements.CMS-1498-P 471

2. Hospital requests reconsideration for medical record copies submitted during

the quarterly validation process and cla ssified as invalid record selections . Invalid record

selections are defined as medical records submitted by hospitals during the quarterly

validation process that do not match the patient’s episode of care information as

determined by the CDAC contractor (in other words, the contractor determines that the

hospital returned a medical record that is different from that which was requested). If the

CDAC contractor determines that the hospital has submitted an invalid record selection

case, it awards a zero validation score for th e case because the hospital did not submit the

entire copy of the medical record for that requested case. During the reconsideration

process, our review of invalid record selections will initially be limited to determining

whether the record submitted to the CDAC contractor was actually an entire copy of the

requested medical record. If we determine during reconsideration that the hospital did

submit the entire copy of the requested medical record, then we would abstract data

elements from the medical record submitted by the hospital.

3. Hospital requests reconsideration for medical records not submitted to the

CDAC contractor within the 45 calendar day deadline . Our review will initially be

limited to determining whether the CDAC contractor received the requested record

within 45 calendar days, and whether the hos pital received the initial medical record

request and reminder notice. If we deter mine during reconsideration that the CDAC

contractor did receive a paper copy of the requested medical record within 45 calendar

days, then we would abstract data elements from the medical record submitted by the

hospital. If we determine that the hospital received two letters requesting medical recordsCMS-1498-P 472

and still did not submit the requested reco rds within the 45 day period, CMS will not

accept these records as part of the recons ideration. CMS will not abstract data from

charts not received timely by the CDAC contractor.

In sum, we are initially limiting the scope of our reconsideration reviews

involving validation to information already submitted by the hospital during the quarterly

validation process, and we will not abstract medical records that were not submitted to

the CDAC contractor during the quarterly validation process. We will expand the scope

of our review only if we find during the initial review that the hospital correctly and

timely submitted the requested medical records. In that case, then we would abstract data

elements from the medical record submitted by the hospital as part of our review of its

reconsideration request.

If a hospital is dissatisfied with the result of a RHQDAPU program

reconsideration decision, the hospital may f ile a claim under 42 CFR Part 405, Subpart R

(a PRRB appeal). We are again soliciting public comments on the extent to which these

proposed procedures will be less costly for hos pitals, and whether they will lead to fewer

PRRB appeals.

11. Proposed RHQDAPU Program Withdrawal Deadlines

We are proposing to accept RHQDAPU program withdrawal forms for the

FY 2012 payment determination from hospita ls until August 15, 2011. We are proposing

this deadline so that we would have suffi cient time to update the FY 2012 payment to

hospitals starting on October 1, 2011. If a hos pital withdraws from the program for the

FY 2012 payment determination, it will receive a 2.0 percentage point reduction in itsCMS-1498-P 473

FY 2012 annual payment update. We noted that once a hospital has submitted a Notice

of Participation form, it is considered to be an active RHQDAPU program participant

until such time as the hospital submits a withdrawal form to CMS.

12. Electronic Health Records (EHRs)

a. Background

Starting with the FY 2006 IPPS final rule, we have encouraged hospitals to take

steps toward the adoption of EHRs (also referr ed to in previous rulemaking documents as

electronic medical records) that will allow for reporting of clinical quality data from the

EHRs directly to a CMS data repository (70 FR 47420 through 47421). We encouraged

hospitals that are implementing, upgrading, or developing EHR systems to ensure that the

technology obtained, upgraded, or developed conforms to standards adopted by HHS.

We suggested that hospitals also take due care and diligence to ensure that the EHR

systems accurately capture quality data and that, ideally, such systems provide

point-of-care decision support th at promotes optimal levels of clinical performance.

We also continue to work with standard setting organizations and other entities to

explore processes through which EHRs could speed the collection of data and minimize

the resources necessary for quality repor ting as we have done in the past.

We note that we have initiated work di rected toward enabling EHR submission of

quality measures through EHR standards deve lopment and adoption. We have sponsored

the creation of electronic speci fications for quality measures that are currently proposed

for the RHQDAPU program and measures unde r future consideration. We look to

continue this activity in the future.CMS-1498-P 474

b. EHR Testing of Quality Measures Submission

As we have previously stated, we ar e interested in the reporting of quality

measures using EHRs, and we continue to encourage hospitals to adopt and use EHRs

that conform to the certification criteria as will be defined by the Office of the National

Coordinator for Health Information Technol ogy, HHS at 45 CFR Part 170. We believe

that the testing of EHR submission is an important and necessary step to establish the

ability of EHRs to report clinical quality me asures and the capacity of CMS to receive

such data.

The electronic specifications and interoperability standards for EHR-based

collection and transmission of the data el ements for the ED Throughput, Stroke, and

Venous Thromboembolism (VTE) measures have been finalized by the Health

Information Technology Standa rds Panel (HITSP) and are available for review and

testing at http//www.HITSP.org . We anticipate testing the components required for the

submission of clinical quality data extracted from EHRs for these measures, and are

exploring different mechanisms and formats that will aid the submission process, as well

as ensure that the summary measure results extracted from the EHRs are reliable.

We anticipate moving forward with testing CMS’ technical ability to accept data

from EHRs for the ED, Stroke, and VTE measures as early as summer of 2011. We

anticipate building upon the work completed by the HITSP in both the Connectathon and

Health Information Management Systems Society (HIMSS) Interoperability Showcase.

This testing will encompass an “end to end” view of data tr ansmission. Pursuant to the

Paperwork Reduction Act, we have previously published a Federal Register notice andCMS-1498-P 475

information collection request for CMS- 10296 (74 FR 44366) seeking public comments

on the process we intended to follow to se lect EHR vendors/hospitals for testing CMS

ability to accept EHR-based data submissions . We will notify interested parties of

changes in the process and timeline for testing via the Inpatient EHR testing Web site at:

http://www.cms.hhs.gov/HospitalQualityInits /15_HospitalInpatientEHRTesting.asp

.

The test measures described above are not currently required under the

RHQDAPU program. In addition, the posting of the electronic specifications for any

particular measure should not be interpreted as a signal that we intend to select the

measure for inclusion in the RHQDAPU program measure set.

c. HITECH Act EHR Provisions

The HITECH Act (Title IV of Division B of the ARRA, together with Title XIII

of Division A of the ARRA) authorizes payment incentives under Medicare for the

adoption and use of certifie d EHR technology beginning in FY 2011. Hospitals are

eligible for these payment incentives if they meet requirements for meaningful use of

certified EHR technology, whic h include reporting on quality measures using certified

EHR technology. With respect to the sele ction of quality measures for this purpose,

under section 1886(n)(3)(A)(ii) of the Act, as added by section 4102 of the HITECH Act,

the Secretary shall select measures, including clinical quality measures, that hospitals

must provide to CMS in order to be eligible for the EHR incentive payments. With

respect to the clinical quality measures, sec tion 1886(n)(3)(B)(i) of the Act requires the

Secretary to give preference to those clinical quality measures that have been selected for

the RHQDAPU program under section 1886(b)(3)(B) (viii) of the Act or that have beenCMS-1498-P 476

endorsed by the entity with a contract with the Secretary under section 1890(a) of the

Act. Any measures must be proposed for pub lic comment prior to their selection, except

in the case of measures previously selected for the RHQDAPU program under

section 1886(b)(3)(B)(viii) of the Act.

Thus, the RHQDAPU program and the HI TECH Act have important areas of

overlap and synergy with respect to the re porting of quality measures using EHRs. We

believe the financial incentives under the HITECH Act for the adoption and meaningful

use of certified EHR technology by hospita ls will encourage the adoption and use of

certified EHRs for the reporting of clin ical quality measures under the RHQDAPU

program. Further, these efforts to test th e submission of quality data through EHRs may

provide a foundation for establishing the capa city of hospitals to send, and for CMS to

receive, quality measures via hospital EHRs for future RHQDAPU program measures.

We again note that the provisions in this proposed rule do not implicate or

implement any HITECH statutory provisions. Those provisions are the subject of

separate rulemaking and public comment.

13. Qualification of Registri es for RHQDAPU Data Submission

In section V.A.3. c.(3) of this proposed rule, we proposed that hospitals would

select at least one of four registry-based m easure topics for which they will report data on

proposed measures to a qualified registry beginning with January 1, 2011 discharges, and

allow the registry to calculate and report measure data for the specified measures to CMS

(via QualityNet) for RHQDAPU program purposes . The process and requirements that

we are proposing to use to determine whether a registry is qualified to collect and submitCMS-1498-P 477

quality measure data are described belo w. We will post on the RHQDAPU program

section of the QualityNet Web site http://www.qualitynet.org no later than

December 31, 2010 a list of qualified registries for the FY 2013 RHQDAPU payment

determination, including the registry name, contact information, and the measure(s) for

which the registry is qualified and w ill report for the FY 2013 RHQDAPU payment

determination. We have proposed measures for inclusion in each of the four registrybased topics, and a registry seeking to be qua lified for a particular topic would have to

agree to collect and report the measures incl uded in the topic. The proposed measures

support CMS and HHS prioritie s for improved quality and efficiency of care for

Medicare beneficiaries (such as, prevention; chronic conditions; high cost and high

volume conditions; elimination of health disparities; healthcare-associated infections and

other conditions; and effective management of acute and chr onic episodes of care). We

note, however, that none of the registries that we qualify for this purpose will be acting as

a CMS contractor or agent. In other words, hospitals will still be responsible for making

sure that the data it submits to the qualifie d registry is successfully processed and

transmitted by the registry to CMS.

We are proposing to implement a self-no mination process for registries seeking

to submit FY 2013 RHQDAPU program qualit y measures (including measure

calculations, numerators, denominators, and ex clusions) on behalf of hospitals beginning

with January 1, 2011 discharges. A registry woul d be able to self-nominate if it meets the

following requirements:CMS-1498-P 478

● The registry has been collecting data elements needed to calculate the

particular measures that are being proposed fo r inclusion in the registry-based topic for

which the registry is seeking qualification for at least 3 years prior to January 1, 2010.

● As of January 1, 2010, the registry has been collecting such data from at least

750 hospitals.

● The registry must have the capability to collect from hospitals all of the data

elements which are included in the measure sp ecifications and calculate the results for the

specified measures. The measures are NQF-endorsed and will be listed in the

Specifications Manual.

● The registry must agree to report the hospital level measure data to CMS (via

QualityNet). During the registry qualification process, CMS will inform the registries of

the specified reporting format which will include:

o The volume of eligible cases (reporting denominator);

o The volume of numerator events for the quality measure (reporting

numerator);

o The number of cases excluded from the measure;

o The measure results

● The registry must agree to transmit quality measure data in a CMS-approved

format. We expect that this CMS-specified record layout will be made available in late

2010 ;

● The registry must be able to perform data quality validation checks on the data

received from hospitals to determine if the da ta submitted by the hospitals are accurateCMS-1498-P 479

and agree to submit an acceptable ``validation strategy'' to CMS by December 15, 2011

. A validation strategy ascertains whether hosp itals have submitted data accurately to the

registry. An acceptable validation strategy may include such provisions as the registry

being able to verify the accuracy of hospita l data through random sa mpling or through the

hospital’s adherence to a required sampling method;

● The registry must agree to enter into and maintain with its participating

hospitals an appropriate Bu siness Associate agreement that complies with HIPAA.

● The registry must obtain and keep on file signed documentation showing that

each of its participating hospita ls has authorized the registry to calculate and submit the

quality measure hospital-level data specified by CMS to CMS. This documentation must

be obtained at the time the hospital a rranges to submit RHQDAPU program quality

measure data to the registry;

● The registry must agree to provide CMS with access (if requested) to review

the data that the hospital submitted to it for purposes of the RHQDAPU program;

● The registry must agree to indicate to CMS upon request whether a particular

hospital has satisfied the registry’s participation requirements;

● The registry must agree to provide CMS with a signed, written attestation

statement via mail or e-mail which states that the quality measure data that the registry

has submitted to CMS on behalf of its participating hospita ls is accurate and complete.

● The registry must agree to provide at least 1 feedback report per year to

participating hospitals;CMS-1498-P 480

● The registry must agree to provide on-going technical assistance to its

participating hospitals with respect to the hospitals’ submission of RHQDAPU data; and

● The registry must agree to partic ipate in periodic RHQDAPU program support

calls hosted by CMS.

To apply to be a qualified registry for any of the four proposed registry-based

topics, a registry must submit a sel f-nomination letter by October 15, 2010 to

RHQDAPU_Registries@cms.hhs.gov containing the registry name, point of contact, the

proposed registry-based meas ure topic for which qualifica tion is being sought, and

detailed information regarding how the regi stry satisfies the criteria listed above.

B. Payment for Transfers of Cases from Medicare Participating Acute Care Hospitals to

Nonparticipating Hosp itals and CAHs (§412.4)

1. Background

Existing regulations at §412.4(a) provide that an inpatient is considered

discharged from a hospital paid under the IPPS when the patient is either formally

released from the hospital or dies in the hospital. Under certain circumstances, a

discharge is considered a transfer for pur poses of payment under the IPPS. Section

412.4(b) defines acute care transfers, and §412.4 (c) identifies those discharges considered

a postacute care transfer. In accordance with §412.4(f), when a patient is transferred and

his or her length of stay is less than the geom etric mean length of stay for the MS-DRG to

which the case is assigned, the transferring hospital is generally paid based on a

graduated per diem rate for each day of the stay, not to exceed the full MS–DRG

payment that would have been made if the patient had been discharged without being

transferred. In the case of acute care transf ers, the receiving hospital that ultimatelyCMS-1498-P 481

discharges the transferred patient receives the full MS-DRG payment, regardless of

whether the length of the patient’s inpatient stay exceeds the geometric mean length of

stay for the applicable MS-DRG.

The per diem rate paid to a transferring hospital is calculated by dividing the full

MS–DRG payment by the geometric mean leng th of stay for the MS–DRG. Based on an

analysis that showed that the first day of hospitalization is the most expensive

(60 FR 5804), our policy generally provides for payment that is double the per diem

amount for the first day, with each subsequent day paid at the per diem amount up to the

full DRG payment (§412.4(f)(1)). Transfer cases also are eligible for outlier payments.

In general, the outlier threshold for transf er cases, as described in §412.80(b) of the

regulations, is equal to the fixed-loss outlier threshold for nontransfer cases (adjusted for

geographic variations in costs), divided by the geometric mean length of stay for the

MS-DRG, and multiplied by the length of stay for the case plus one day.

The transfer policy adjusts the paymen ts of the transferring hospital to

approximate the reduced co sts of transfer cases. Medicare adopted its IPPS transfer

policy because, if Medicare were to pay th e full MS-DRG payment regardless of whether

a patient is transferred or di scharged, there would be a strong incentive for hospitals to

transfer patients to another IPPS hospital early in their stay in order to minimize costs

while still receiving the full MS-DRG payment.

b. Proposed Policy Change

The regulations at §412.4(b) state that a discharge of a hospital inpatient is

considered to be an acute care transfer when the patient is readmitted on the same day toCMS-1498-P 482

another hospital that is paid under the IPPS, or to a hospital that is excluded from the

IPPS because of participation in a statewide cost control program, unless the readmission

is unrelated to the initial discharge. These regulations were developed under the

authority granted in section 1886(d)(5)(I)(ii) of the Act. Because a discharge is only

considered an acute care transfer if the receiving hospital either is paid under IPPS or

participates in a statewide cost control program, the current acute care transfer policy

only applies to transfers between acute care hospitals that participate in the Medicare

program (“participating acute ca re hospitals”); it does not cu rrently apply to acute care

hospitals that would otherwise be eligible to be paid under the IPPS, but do not have an

agreement to participate in the Medicar e program (“nonparticipating acute care

hospitals”). The acute care transfer policy also does not currently apply to IPPS acute

care hospital transfers to CAHs.

The intent of the acute care transfer polic y is to make payment to the transferring

hospital commensurate with the resources it expends in treating Medicare beneficiaries.

As stated above, a participa ting acute care hospital that admits a beneficiary from a

transferring hospital receives a full MS-DRG pa yment, as long as the receiving hospital

does not subsequently transfer the beneficiary prior to the geometric mean length of stay

for that MS-DRG. The transferring hosp ital receives a reduced per diem payment

amount. If the acute care transfer policy di d not exist, Medicare would make separate

full MS-DRG payments to each of the hosp itals involved with th e treatment of the

beneficiary, even though the hospitals shar ed in one episode of care for the same

beneficiary and neither provided the full spect rum of care for that beneficiary for thatCMS-1498-P 483

episode of care. Such a policy would ina ppropriately pay a “double” Medicare payment

and would be inconsistent with the inte nt of the acute care transfer policy.

Although a nonparticipating acute care hospita l is generally ineligible to receive

payments under Medicare, such a hospital may still treat Medicare patients. In addition,

acute care hospitals that do participate in the Medicare program are not precluded from

transferring a Medicare patient to a nonparticipating acute care hospital. We note that a

hospital that transfers a patient early in the patient’s stay (that is, prior to the geometric

mean length of stay of the patient’s MS -DRG) incurs reduced costs for that case,

regardless of whether the patient is transferred to a Medicare participating acute care

hospital or a nonparticipating acute care hospital. A hospital that sends such a transfer to

a CAH incurs similarly reduced costs, despite the fact that transfers to CAHs are not

currently included under the Medicare acute care transfer policy.

These policy changes are also being proposed in order to avoid creating a

financial incentive for an IPPS hospital to transfer cases to one type of provider versus

another. A transfer decision should be ma de based on the clinical merits of the

beneficiary’s situation and the transferring hospital’s capabilities. More pointedly, we

want to avoid providing a Medi care participating acute care hospital with an incentive to

transfer cases to a nonparticipating acute ca re hospital or a CAH. Without a policy

change, these incentives still exists as payment issues relating to the IPPS transfer policy.

With respect to nonparticipating acute care hos pitals, it is frequently explained that the

Medicare conditions of partic ipation provide a certain min imum standard of care that

beneficiaries can expect, and that Medicare does not make paymen ts to nonparticipatingCMS-1498-P 484

acute care hospitals because these hospitals do not commit to adhering to these conditions

of participation. As such, the lack of a polic y with regard to transfers to nonparticipating

acute care hospitals results in an inappropriate payment incentive.

Accordingly, in order to further align the IPPS regulations relating to transfer of

cases under §412.4(b) with its original intent (t hat is, that a hospital’s payment should be

commensurate with the resources it expends fo r the case), in this proposed rule, we are

proposing to add a new paragraph (b)(3) to §412.4 to specify that an acute care hospital

“transfer case” includes a transfer to an acute care hospital that would otherwise be

eligible to be paid under the IPPS, but does not have an agreement to participate in the

Medicare program, and a new paragraph (b)(4) to state that an acute care hospital

“transfer” also includes a transfer to a CAH.

Hospitals must use patient discharge status code “66” (Discharged/Transferred to

a Critical Access Hospital) on IPPS claims to identify transfers to CAHs. For transfers to

nonparticipating acute care hospita ls, hospitals must continue to use patient status code

“02” (Discharged/Transferred to a Short-Te rm General Hospital for Inpatient Care) on

IPPS claims. We note that the National Uniform Billing Committee (NUBC)

periodically updates or changes patient status codes; therefore, hospitals should check

NUBC guidance periodically to determine whether there have been any changes to these

codes.

C. Technical Change to Regulations

In the FY 2010 IPPS/RY 2010 LTCH PPS final rule (74 FR 43939 through

43940), in response to public comments we received on the FY 2010 proposed ruleCMS-1498-P 485

relating to the effects on CAH status arising from the redesignation by OMB of three

Micropolitan Statistical Areas as MSAs, we amended our regulations at §485.610 by

adding a paragraph (b)(4) to provide for a tr ansition period for the CAHs that are located

in counties that are reclassified from rura l to urban to obtain a rural redesignation.

However, when we added the new paragr aph (b)(4) to §485.610, we inadvertently failed

to make a conforming change to the introduc tory text of paragraph (b) to include a

reference to paragraph (b)(4) as one of the re quirements that the CAH must meet in order

to satisfy the conditions of participation for CAHs. We are proposing to make this

confirming change.

D. Medicare-Dependent, Small Rural Hosp itals (MDHs): Change to Criteria (§412.108)

1. Background

Under the IPPS, separate special payment protections are provided to a

Medicare-dependent, small rura l hospital (MDH). Section 1886( d)(5)(G)(iv) of the Act

defines an MDH as a hospital that is located in a rural area, has not more than 100 beds,

is not an SCH, and has a high percentage of Medicare discharges (that is, not less than

60 percent of its inpatient days or discharges either in its 1987 cost reporting year or in

two of its most recent three se ttled Medicare cost reporting years). The regulations that

set forth the criteria that a hospital must meet to be classified as an MDH are at

42 CFR 412.108.

Although MDHs are paid under an adjusted payment methodology, they are still

IPPS hospitals paid under section 1886(d) of the Act. Like all IPPS hospitals paid underCMS-1498-P 486

section 1886(d) of the Act, MDHs are paid for their discharges based on the DRG

weights calculated under section 1886(d)(4) of the Act.

Through and including FY 2006, under sec tion 1886(d)(5)(G) of the Act, MDHs

are paid based on the Federal rate or, if high er, the Federal rate plus 50 percent of the

amount by which the Federal rate is exceeded by the updated hospital- specific rate based

on the hospital’s FY 1982 or FY 1987 cost s per discharge, whichever of these

hospital-specific rates is higher. S ection 5003(b) of Pub. L. 109-171 (DRA 2005)

amended section 1886(d)(5)(G) of the Act to pr ovide that, for discharges occurring on or

after October 1, 2006, MDHs are paid based on th e Federal rate or, if higher, the Federal

rate plus 75 percent of the amount by which the Federal rate is exceeded by the updated

hospital-specific rate based on FY 1982, FY 1987, or FY 2002 costs per discharge,

whichever of these hospital-specific rates is highest.

For each cost reporting period, the fiscal intermediary or MAC determines which

of the payment options will yield the highest aggregate payment. Interim payments are

automatically made at the highest rate using the best data available at the time the fiscal

intermediary or MAC makes th e determination. However, it may not be possible for the

fiscal intermediary or MAC to determine in advance precisely which of the rates will

yield the highest aggregate payment by year’s end. In many instances, it is not possible

to forecast the outlier payments, the am ount of the DSH adjustment or the IME

adjustment, all of which are applicable only to payments based on the Federal rate and

not to payments based on the hospital-specifi c rate. The fiscal intermediary or MACCMS-1498-P 487

makes a final adjustment at the settlement of the cost report after it determines precisely

which of the payment rates would yield the highest aggregate payment to the hospital.

If a hospital disagrees with the fiscal intermediary’s or the MAC’s determination

regarding the final amount of program payment to which it is entitled, it has the right to

appeal the determination in accordance with the procedures set forth in 42 CFR Part 405,

Subpart R, which govern provider pa yment determinations and appeals.

2. Medicare-Dependency: Counting Medicare Inpatients

Currently, in order for an IPPS hospital to qualify as an MDH, at least 60 percent

of its inpatient days or discharges must be attributable to individuals receiving Medicare

Part A benefits (§412.108(a)(1 )(iii) of the regulations).

The MDH policy, as explained in the FY 1991 final rule (55 FR 35994 through

35998), does not include in the count of Medica re inpatients those Me dicare beneficiaries

who have exhausted their Medicare Part A inpa tient benefits. Currently, for purposes of

determining DSH payment adjustments under the IPPS, section 1886(d)(5)(F)(vi)(I) of

the Act and our policy include, in the Medica re inpatient count, i ndividuals entitled to

Medicare Part A benefits, regardless of whet her or not they have exhausted Medicare

Part A coverage. This policy is discussed in the FY 2005 IPPS final rule (69 FR 49090

through 49099). In addition, section 1886(d)(5)(G )(iv)(IV) of the Act specifies that a

hospital is Medicare-dependent if “not less than 60 percen t of its inpatient days or

discharges during the cost reporting period be ginning in fiscal year 1987, or two of the

three most recently audited cost reporting periods for which the Secretary has a settled

cost report, were attributable to inpatients entitled to benef its under part A.” The use ofCMS-1498-P 488

the word “entitled” in the statute would encompass individuals who are entitled to

Medicare Part A even though they have exhaus ted their Part A hospital days. Individuals

who have exhausted their Part A inpatient benefit coverage remain “entitled” to Medicare

Part A because they retain the Medicare Part A insurance benefit coverage (for example,

covered SNF days), and they continue to meet all statutory criteria for entitlement to

Part A benefits under section 226 of the Act (Entitlement to Hospital Insurance Benefits).

Accordingly, we are proposing to revi se the Medicare-dependency criterion at

§412.108(a)(1)(iii) of the regulati ons to replace the term “r eceiving” with the phrase

“entitled to”. As a result, we would include in the count of Medicare inpatient days or

discharges all days or discharges attributable to individuals entitled to the Medicare

Part A insurance benefit, including individua ls who have exhausted their Medicare Part A

inpatient hospital coverage benefit, as well as indivi duals enrolled in Medicare

Advantage plans and section 1876 cost cont racts, that is, health maintenance

organizations (HMOs) and competitive medical plans (CMPs). We note that, for

inpatient care provided to Medicare Part A beneficiaries enrolled with an HMO or a

CMP, we provided that the days and discharg es for those stays are counted for purposes

of determining Medicare-dependency for M DH purposes (55 FR 35995). This was the

case when HMOs and CMPs were included under Medicare Part A, and continues to be

the case since 1997 when HMOs and CMPs were placed under Medicare Part C.

E. Rural Referral Centers (RRCs) (§412.96)

Under the authority of section 1886(d)(5)( C)(i) of the Act, the regulations at

§412.96 set forth the criteria that a hospital must meet in order to qualify under the IPPSCMS-1498-P 489

as an RRC. For discharges that occurred before October 1, 1994, RRCs received the

benefit of payment based on th e other urban standardized amount rather than the rural

standardized amount (as discussed in the FY 1993 IPPS final rule (59 FR 45404 through

45409)). Although the other urban and rura l standardized amounts are the same for

discharges occurring on or after Octobe r 1, 1994, RRCs continue to receive special

treatment under both the DSH payment adju stment and the criteria for geographic

reclassification.

Section 402 of Pub. L. 108-173 raised the DSH adjustment for RRCs such that

they are not subject to the 12-percent cap on DSH payments that is applicable to other

rural hospitals. RRCs are also not subject to the proximity criteria when applying for

geographic reclassification. In addition, they do not have to meet the requirement that a

hospital's average hourly wage must exceed, by a certain percentage, the average hourly

wage of the labor market area where the hospital is located.

Section 4202(b) of Pub. L. 105-33 states, in part, "[a]ny hospital classified as an

RRC by the Secretary . . . for fiscal year 1991 shall be classified as such an RRC for

fiscal year 1998 and each subsequent year." In the August 29, 1997 IPPS final rule with

comment period (62 FR 45999), CMS reinstated RRC status for all hospitals that lost the

status due to triennial review or MGCRB reclassification. However, CMS did not

reinstate the status of hospitals that lost RRC status because they were now urban for all

purposes because of the OMB designation of their geographic area as urban.

Subsequently, in the August 1, 2000 IPPS final rule (65 FR 47089), we indicated that we

were revisiting that decision. Specifically, we stated that we would permit hospitals thatCMS-1498-P 490

previously qualified as an RRC and lost their status due to OMB redesignation of the

county in which they are located from rural to urban, to be reinstated as an RRC.

Otherwise, a hospital seeking RRC status must satisfy all of the other applicable criteria.

We use the definitions of "urban" and "rural " specified in Subpart D of 42 CFR Part 412.

One of the criteria under which a hospital may qualify as an RRC is to have 275 or more

beds available for use (§412.96(b)(1)(ii)). A ru ral hospital that does not meet the bed size

requirement can qualify as an RRC if the hospital meets two mandatory prerequisites (a

minimum CMI and a minimum number of discharges ), and at least one of three optional

criteria (relating to specialty composition of medi cal staff, source of inpatients, or referral

volume). (We refer readers to §412.96(c)(1) through (c)(5) and the September 30, 1988

Federal Register (53 FR 38513).) With respect to the two mandatory prerequisites, a

hospital may be classified as an RRC if--

● The hospital's CMI is at least equal to the lower of the median CMI for urban

hospitals in its census region, excluding hosp itals with approved te aching programs, or

the median CMI for all urba n hospitals nationally; and

● The hospital's number of discharges is at least 5,000 per year, or, if fewer, the

median number of discharges for urban hos pitals in the census region in which the

hospital is located. (The number of discharges criterion for an osteopathic hospital is at

least 3,000 discharges per year, as specified in section 1886(d)(5)(C)(i) of the Act.)

1. Case-Mix Index (CMI)

Section 412.96(c)(1) provides that CMS establish updated na tional and regional

CMI values in each year’s annual notice of prospective payment rates for purposes ofCMS-1498-P 491

determining RRC status. The methodology we used to determine the national and

regional CMI values is set forth in the regulations at §412.96(c)(1)(ii). The proposed

national median CMI value for FY 2011 in cludes data from a ll urban hospitals

nationwide, and the proposed regional values for FY 2011 are the median CMI values of

urban hospitals within each census region, excluding those hospitals with approved

teaching programs (that is, those hospitals that train residents in an approved GME

program as provided in §413.75). These pr oposed values are based on discharges

occurring during FY 2009 (October 1, 2008 through September 30, 2009), and include

bills posted to CMS' records through December 2009.

We are proposing that, in addition to meetin g other criteria, if rural hospitals with

fewer than 275 beds are to qualify for initial RRC status for cost reporting periods

beginning on or after October 1, 2010, they must have a CMI value for FY 2009 that is at

least--

● 1.5127; or

● The median CMI value (not transfer-a djusted) for urban hospitals (excluding

hospitals with approved teach ing programs as identified in §413.75) calculated by CMS

for the census region in which the hospital is located.

The proposed median CMI values by regi on are set forth in the following table:

Region Proposed Case-Mix Index Value 1. New England (CT, ME, MA, NH, RI, VT) 1.3010
2. Middle Atlantic (PA, NJ, NY) 1.3590
3. South Atlantic (DE, DC, FL, GA, MD, NC, SC, VA, WV) 1.4559CMS-1498-P 492

Region Proposed Case-Mix Index Value 4. East North Central (IL, IN, MI, OH, WI) 1.4262
5. East South Central (AL, KY, MS, TN) 1.3776
6. West North Central (IA, KS, MN, MO, NE, ND, SD) 1.4404
7. West South Central (AR, LA, OK, TX) 1.5181
8. Mountain (AZ, CO, ID, MT, NV, NM, UT, WY) 1.6004
9. Pacific (AK, CA, HI, OR, WA) 1.4826

The preceding numbers will be revised in the FY 2011 IPPS final rule to the

extent required to reflect the updated FY 2009 MedPAR file , which will contain data

from additional bills received through March 2010.

A hospital seeking to qualify as an RRC should obtain its hospital-specific CMI

value (not transfer-adjusted) from its fiscal intermediary or MAC. Data are available on

the Provider Statistical and Re imbursement (PS&R) System. In keeping with our policy

on discharges, the CMI values are computed based on all Medicare patient discharges

subject to the IPPS MS-DRG-based payment.

2. Discharges

Section 412.96(c)(2)(i) provides that CMS set forth the national and regional

numbers of discharges in each year’s annua l notice of prospective payment rates for

purposes of determining RRC status. As specifi ed in section 1886(d)(5)(C)(ii) of the Act,

the national standard is set at 5,000 discharges. We are proposing to update the regional

standards based on discharges for urban hos pitals’ cost reporting periods that beganCMS-1498-P 493

during FY 2008 (that is, October 1, 2007 th rough September 30, 2008), which are the

latest cost report data av ailable at the time this pr oposed rule was developed.

Therefore, we are proposing that, in add ition to meeting other criteria, a hospital,

if it is to qualify for initial RRC status for cost reporting periods beginning on or after

October 1, 2010, must have, as the number of disc harges for its cost reporting period that

began during FY 2008, at least-

● 5,000 (3,000 for an oste opathic hospital); or

● The median number of discharges for urban hospitals in the census region in

which the hospital is located, as indicated in the following table.

Region Number of Discharges 1. New England (CT, ME, MA, NH, RI, VT) 7,701
2. Middle Atlantic (PA, NJ, NY) 11,346
3. South Atlantic (DE, DC, FL, GA, MD, NC, SC, VA, WV) 10,905
4. East North Central (IL, IN, MI, OH, WI) 9,329
5. East South Central (AL, KY, MS, TN) 5,902
6. West North Central (IA, KS, MN, MO, NE, ND, SD) 8,091
7. West South Central (AR, LA, OK, TX) 6,264
8. Mountain (AZ, CO, ID, MT, NV, NM, UT, WY) 9,346
9. Pacific (AK, CA, HI, OR, WA) 8,464

These numbers will be revised in the FY 2011 IPPS final rule based on the latest

available cost report data.CMS-1498-P 494

We note that the median number of discharges for hospitals in each census region

is greater than the national standard of 5,000 discharges. Therefore, 5,000 discharges is

the minimum criterion for all hospitals.

We reiterate that, if an osteopathic hospital is to qualify for RRC status for cost

reporting periods beginning on or after Oct ober 1, 2010, the hospital would be required to

have at least 3,000 discharges for its cost reporting period that began during FY 2008.

F. Indirect Medical Education (IME) Adjustment (§412.105)

1. Background

Section 1886(d)(5)(B) of the Act provi des for an additional payment amount

under the IPPS for hospitals that have residents in an approved graduate medical

education (GME) program in order to reflect the higher indirect patient care costs of

teaching hospitals relative to nonteaching hos pitals. The regulations regarding the

calculation of this additional payment, known as the indirect medical education (IME)

adjustment, are located at §412.105.

Pub. L. 105-33 (BBA 1987) established a limit on the number of allopathic and

osteopathic residents that a hospital may include in its full-time equivalent (FTE) resident

count for direct GME and IME payment pur poses. Under section 1886(h)(4)(F) of the

Act, for cost reporting periods beginning on or after October 1, 1997, a hospital’s

unweighted FTE count of residents for pur poses of direct GME may not exceed the

hospital’s unweighted FTE count for its most recent cost reporting period ending on or

before December 31, 1996. U nder section 1886(d)(5)(B)(v) of the Act, a similar limit onCMS-1498-P 495

the FTE resident count for IME purposes is e ffective for discharges occurring on or after

October 1, 1997.

2. IME Adjustment Factor for FY 2011

The IME adjustment to the MS-DRG paym ent is based in part on the applicable

IME adjustment factor. The IME adjustment factor is calculated by using a hospital’s

ratio of residents to beds , which is represented as r , and a formula multiplier, which is

represented as c , in the following equation: c x [{1 + r } .405 - 1]. The formula is

traditionally described in terms of a certain percentage increase in payment for every

10-percent increase in th e resident-to-bed ratio.

Section 502(a) of Pub. L. 108-173 modified the formula multiplier (c) to be used

in the calculation of the IME adjustment. Prior to the enactment of Pub. L. 108-173, the

formula multiplier was fixed at 1.35 for discharges occurring during FY 2003 and

thereafter. In the FY 2005 IPPS final rule, we announced the schedule of formula

multipliers to be used in the calculation of the IME adjustment and incorporated the

schedule in our regulations at §412.105(d)(3)(v iii) through (d)(3)(xii). Section 502(a)

modified the formula multiplier beginning midway through FY 2004 and provided for a

new schedule of formula multipliers fo r FYs 2005 and thereafter as follows:

● For discharges occurring on or afte r April 1, 2004, and before October 1, 2004,

the formula multiplier is 1.47.

● For discharges occurring during FY 2005, the formula multiplier is 1.42.

● For discharges occurring during FY 2006, the formula multiplier is 1.37.

● For discharges occurring during FY 2007, the formula multiplier is 1.32.CMS-1498-P 496

● For discharges occurring during FY 2008 and fiscal years thereafter, the

formula multiplier is 1.35.

Accordingly, for discharges occurring during FY 2011, the formula multiplier is

1.35. We estimate that appli cation of this formula multiplier for the FY 2011 IME

adjustment will result in an increase in IPPS payment of 5.5 percent for every

approximately 10-percent increase in the hospital’s resi dent-to-bed ratio.

3. IME-Related Changes in Other Sections of this Proposed Rule

We refer readers to section IV.H.2. and IV .H.3. of the preamble of this proposed

rule for a discussion of proposed changes to the policies for identifying “approved

medical residency programs” and the electronic submission of Medicare GME affiliation

agreements.

G. Payment Adjustment for Medicare Disproportionate Share Hospitals (DSHs):

Supplemental Security Inco me (SSI) Fraction (§412.106)

1. Background

Section 1886(d)(5)(F) of the Act provide s for additional Medicare payments to

subsection (d) hospitals that serve a signifi cantly disproportionate number of low-income

patients. The Act specifies two methods by which a hospital may qualify for the

Medicare disproportionate share hospital (D SH) adjustment. Under the first method,

hospitals that are located in an urban ar ea and have 100 or more beds may receive a

Medicare DSH payment adjustment if the hosp ital can demonstrate that, during its cost

reporting period, more than 30 percent of its net inpatient care revenues are derived fromCMS-1498-P 497

State and local government payments for ca re furnished to needy patients with low

incomes. This method is commonly re ferred to as the “Pickle method.”

The second method for qualifying for the DSH payment adjustment, which is the

most common, is based on a complex statut ory formula under which the DSH payment

adjustment is based on the hos pital’s geographic designation, the number of beds in the

hospital, and the level of th e hospital's disproportionate pa tient percentage (DPP). A

hospital's DPP is the sum of two fractions: the “Supplemental Secu rity Income (SSI)

fraction” and the “Medicaid fraction.” The SS I fraction (also known as the “SSI ratio” or

the “Medicare fraction”) is computed by divi ding the number of the hospital’s inpatient

days that are furnished to patients who were entitled to both Medicare Part A (including

patients who are enrolled in a Medicare Advantag e (Part C) plan) and SSI benefits by the

hospital’s total number of patient days furnished to patients entitled to benefits under

Medicare Part A (including patients who are en rolled in a Medicare Advantage (Part C)

plan). The Medicaid fraction is computed by dividing the hospital’ s number of inpatient

days furnished to patients who, for such days , were eligible for Me dicaid, but were not

entitled to benefits under Medicar e Part A, by the hospital’ s total number of inpatient

days in the same period.

Because the DSH payment adjustment is part of the IPPS, the DSH statutory

references (under section 1886(d)(5)(F) of the Act) to “days” apply only to hospital acute

care inpatient days. Regulations located at 42 CFR 412.106 govern the Medicare DSH

payment adjustment and specify how the DPP is calculated as well as how beds and

patient days are counted in determinin g the DSH payment adjustment. UnderCMS-1498-P 498

§412.106(a)(1)(i), the number of beds for th e Medicare DSH payment adjustment is

determined in accordance with bed c ounting rules for the IME adjustment under

§412.105(b).

2. CMS’ Current Data Matching Process for the SSI Fraction

From the inception of the Medicare DS H adjustment in 1986, CMS (formerly

HCFA) has calculated the SSI fraction for each acute care hospital paid under the IPPS.

This fraction, in combination with the Medi caid fraction, is used to determine whether

the provider qualifies for a DSH payment ad justment and the amount of any such

payment (51 FR 16772, 16777, May 6, 1986 interim final rule). In determining the

number of inpatient days for individuals entitled to both Medicare Part A and SSI, as

required for calculation of the numerator of the SSI fraction, CMS matches the Medicare

records and SSI eligibility records for each hospital’s patients during the Federal fiscal

year, unless the provider requests calculati on of the SSI fraction on a cost reporting

period basis (in which case the provider woul d receive its SSI fraction based on its own

cost reporting period). The data underlying the match process are drawn from: (a) the

Medicare Provider Analysis and Review (MedPAR) data file; and (b) SSI eligibility data

provided by the Social Security Administra tion (SSA). CMS has matched Medicare and

SSI eligibility records using Title II numbers (included in the SSI records) and Health

Insurance Claims Account Numbers (HICANs) (contained in the MedPAR file). Below

we provide a more detailed description of both a Title II number and a HICAN.

Title II Number: If a person qualifies for retirement or disability benefits under

Title II of the Act (42 U.S.C. § 401 et seq. ), SSA assigns a “Title II number” to theCMS-1498-P 499

individual. If the Title II beneficiary’s own earnings history (or the individual’s

disability) were the basis for such benefits, the person’s Social Security number (SSN)

would constitute the “root” of the individual’s Title II number. However, if the person’s

Title II benefits were based on the earnings hi story of another indivi dual (for example, a

spouse), that other person’s SSN would provide the root for the beneficiary’s Title II

number. In addition to a root SSN, each T itle II number ends with a Beneficiary

Identification Code (BIC) that identifies the basis for an individual’s entitlement to

benefits. For example, a person who becomes eligible for benefits under his or her own

account would be described by his or her SSN followed by the BIC “A” whereas a wife

who becomes eligible for bene fits under her husband’s account would be described by his

SSN followed by the BIC “B.” Children who become eligible under a parent’s account

would be described by the parent’s SSN followed by the BIC “C1,” “C2,” etc.

HICAN: When a person becomes entitled to Medicare benefits, he or she is

assigned a HICAN for purposes of processing claims submitted on his or her behalf for

Medicare services. A beneficiary’s HICAN (w hich may not necessarily contain his or

her SSN) is included on the Medica re inpatient hospital claim.

Each HICAN for a beneficiary should be id entical, at the same point in time, to

that individual’s Title II number. This is because HICANs and Title II numbers are both

assigned on the basis of the same data source, the SSA-maintained Master Beneficiary

Record, and by using the same rules (that is, the rules for determining which person’s

SSN will serve as the root for an individual’s HICAN and Title II number and for

determining the BIC for both types of numbers).CMS-1498-P 500

We note that a person’s Title II number and HICAN can change over time. For

example, if the individual’s entitlement to Title II and Medicare benefits was originally

based on the earnings history of a first spouse, but the beneficiary later qualified for such

benefits on the basis of a second spouse’s ear nings history, the beneficiary’s HICAN and

Title II number would change accordingly. Specifically, the first spouse’s SSN would be

the root of the beneficiary’s original HI CAN and Title II number; later, the second

spouse’s SSN would become th e root of the beneficiary’ s second HICAN and Title II

number.

The SSI eligibility data that CMS receive s from SSA contain monthly indicators

to denote which month(s) each person was elig ible for SSI benefits during a specific time

period. The current matching process uses onl y one Title II number (which is included in

the SSI file) and one HICAN (found in the MedP AR file) for each beneficiary. In the

current matching process, CMS has used th e HICAN because it is the patient identifier

that is provided by hospitals on the Medicar e claim. Because SSNs are not included on

Medicare inpatient claims, CMS has not used SSNs in the match process.

For a given fiscal year, CMS determines the numerator of the hospital’s SSI

fraction (that is, the number of the hospital’s inpatient days for all of its patients who

were simultaneously entitled to Medicare Part A benefits and SSI bene fits) by calculating

the sum of the number of the hospital’s inpatient days that are associated with all of the

identical Title II numbers and HICANs for the hospital’s claims that are found through

the data matching process. In turn, CMS determines the denominat or of the hospital’s

SSI fraction by calculating the sum of the num ber of the hospital’s inpatient days forCMS-1498-P 501

patients entitled to benefits unde r Medicare Part A (regardless of SSI eligibility) that are

included in the hospital’s inpa tient claims for the period.

3. Baystate Medical Center v. Leavitt Court Decision

In Baystate Medical Center v. Leavitt , 545 F. Supp. 2d 20, as amended , 587 F.

Supp. 2d 37, 44 (D.D.C. 2008), the district cour t concluded that, in certain respects,

CMS’ current matching process (as described above) did not use the “best available data”

to match Medicare patient day information with SSI eligibility data when calculating the

plaintiff’s SSI fractions for FYs 1993 throug h 1996. Specifically, the court found that:

● Stale SSI Records and Forced Pay SSI Records. For the earliest years in

question in Baystate , the SSI eligibility data did not include “stale” records—that is,

records for individuals whose SSI records were no longer active from SSA’s perspective.

(We note that it is our understanding that, as of the year 2000, SSA no longer

differentiates between inactive and active records and therefore, no longer uses the “stale

record” indicator in its databases.) The c ourt also found that the SSI data file only

included SSI eligibility information for SSI pa yments that were automated (as opposed to

manual), thereby excluding those people w ho, for whatever reason, received manual or

“forced pay” payments. Baystate , 545 F. Supp. 2d at 44-46.

● Match Based on Only One Title II Nu mber and One HICAN. The court found

fault with CMS’ use of only a single Title II number and one HICAN in the match

process. As a beneficiary may receive SSI a nd Medicare Part A benefits under more than

one Title II number and HICAN over a period of time, CMS would not have matched a

beneficiary’s records if there had been a change in the person’s Title II number andCMS-1498-P 502

HICAN between the time of an inpatient stay and when the match process was

completed. Baystate , 545 F. Supp. 2d at 46-49.

● Retroactive SSI Eligibility Determinati ons and Lifting of Payment Suspensions.

The court found that the matc h process did not appropriate ly account for retroactive

eligibility determinations of SSI eligibilit y and the lifting of payment suspensions

because the match process used SSI eligibilit y data that did not include more recent

retroactive determinations of SSI eligibility and the lifting of SSI payment suspensions.

By not using more recent SSI eligibility information that was available to CMS at the

time of the hospital’s cost report settlement, the court concluded that CMS did not use the

“best available data” to calcul ate the provider’s SSI fraction. Baystate , 545 F. Supp. 2d

at 42-44.

CMS continues to be lieve that its current data matc hing process and the resultant

SSI fraction and DSH payments were lawful. Nonetheless, the agency did not appeal the

Baystate decision. Accordingly, CMS implemented the court’s decision by recalculating

the plaintiff’s SSI fractions for 1993 through 1996 . In recalculating the SSI fractions at

issue in the Baystate case, we worked closely with SSA to ensure that stale and forced

pay SSI records were included in the SSI eligibility data. Also, we used a revised data

matching process (described in more detail below) that comports with the court’s

decision. As the revised data matching process was comple ted using SSI eligibility data

compiled between 13 and 16 years beyond the fiscal years at issue in the Baystate case,

we believe any issues associated with retroactive determinations of SSI eligibility and the

lifting of payment suspensions had been long since resolved. Furthermore, because weCMS-1498-P 503

believe that the revised match process used to implement the Baystate decision addressed

all of the concerns found by th e court, we are proposing to use the same revised data

matching process for calculating hospitals’ SSI fractions for FY 2011 and subsequent

fiscal years.

4. CMS’ Proposed Process for Matching Medicare and SSI Eligibility Data

a. Inclusion of Stale Records and Forced Pay Records in the SSI Eligibility Data Files

In recalculating the SSI fractions at issue in the Baystate case, stale records and

forced pay records were included in the SSI eligibility data files that CMS used in the

revised data match for the four fiscal years at issue. All SSI payment records, whether

the payments were automated or manual or were for an individual whose record was

active or stale, are now included in the data files provided by SSA and will continue to be

included in the future.

b. Use of SSNs in the Revised Match Process

As indicated above, the current matching process only uses one Title II number

and one HICAN in the data matc h process. By contrast, our revised match process would

make use of the Medicare Enrollment Database (EDB), which is CMS’ system of records

for all individuals who have ever been enro lled in Medicare. The EDB includes SSNs as

well as all of an individual’s HICANs. In our proposed revised match process, the

individual’s SSN, contained in the SSI eligibility data file, would be compared to the

SSNs in the Medicare EDB, and each matched SSN would then be “cross-walked” within

the EDB to find any and all HICANs associated with the individual’s SSN. The resultingCMS-1498-P 504

HICANs would then be matched against thos e HICANs contained in the MedPAR claims

data files.

Before explaining our proposed revised ma tch process in more detail, we believe

it is appropriate to provide some background regarding SSN s and the three databases that

would be used in our proposed match proce ss. An individual should have only one SSN,

which should be unique to that individual. The SSN may be assigned by SSA when the

individual begins gainful employ ment (if not earlier). However, if an applicant for SSI

benefits does not already have a SSN, SSA then assigns a SSN to the person. Thus, in

the SSI eligibility data that SSA provides to CMS, each individual identified in those data

should have a unique SSN.

The first database that we are proposing to use in our revised match process is the

SSI eligibility data file, which contains a unique SSN for every SSI record and would

include as many as 10 different historical Title II numbers for the records related to one

individual. We are proposing to use 10 as the maximum number of Title II numbers for a

beneficiary because that is likewise the maximum number of HICANs that can be

attributed to any one individual in our EDB. However, we note that as a practical matter,

the greatest number of historical HICANs associated with any beneficiary appears to be

7. The SSI eligibility file serves as the syst em of record for whether or not SSA made a

payment of SSI benefits to an indi vidual who applied for SSI benefits.

The second relevant database, the Medica re EDB, contains a SSN for virtually

every record in the EDB. Furthermore, the EDB has the capacity to hold up to 10

historical HICANs for a specific Medicare enro llee. (It is important to note that, of theCMS-1498-P 505

more than 100 million records in the EDB, less than 0.07 percent (that is, fewer than 7 of

every 10,000 records) relate to individuals fo r whom the EDB does not include a SSN for

the person. The EDB might not include a SSN for an individual if, for example, the

person lives in another country but is entitle d to Medicare benefits through his or her

spouse.)

The third relevant database that we are proposing to use in our revised match

process is the MedPAR file. Hospitals submit claims to Medicare for inpatient services

provided to Medicare beneficiaries. These claims are eventually accumulated in the

MedPAR database. It is impor tant to note that the MedPAR database does not contain

SSNs. The MedPAR database contains one HICAN number for each and every record of

services provided to a Medicare beneficiary who was admitted to a Medicare-certified

hospital or skilled nursing facility. This database allows us to calculate the number of

Medicare inpatient hospital days, which we use in determining each hospital’s DSH SSI

fraction.

Utilizing the steps set forth below, we ar e proposing to use these three databases

in a revised match process for FY 2011 and subsequent fiscal years:

Step 1 -- Use SSNs to find any and all relevant HICANs

. Using the SSI eligibility

data file provided by SSA, we are proposing to compare the individual SSNs in that file

to the SSNs contained in the Medicare EDB. Each matched SSN would then be “crosswalked” (within the EDB) to find any and all HICANs associated with the individual’s

SSN. The resulting HICANs would then be matched against those HICANs contained in

the MedPAR claims data files. This proce ss should identify all relevant SSI records inCMS-1498-P 506

which a SSN is associated with an individua l who is simultaneously enrolled in Medicare

Part A and in the SSI program.

Step 2 -- Utilize any and all Title II numbers. In order to provide further

assurance that all of the Title II numbers and HICANs for SSI-eligible individuals have

been identified, next we are proposing to comp are the complete list of Title II numbers

from the SSI data file (up to 10 Title II numbers for any one individual) to the list of

HICANs generated through Step 1 above. If the SSI data file includes any Title II

numbers that were not already identified in Step 1, the Title II number will be included in

our revised match proc ess and compared to any and all HICANs in MedPAR. We note

that by including this second step (that is , adding all Title II numbers not previously

identified by Step 1), we are addressing the very small universe of individuals for whom

the EDB does not include a SSN. If an individual is entitled to SSI benefits and Medicare

benefits, the new format of the SSI eligibility file will contain up to 10 Title II numbers

and, if they have not already been captured, ea ch of those numbers will be included in our

revised match process. Even if an individual does not ha ve a SSN in the EDB, this

second step should ensure that our revised match process will incl ude that individual.

Step 3 -- Ensure consistency between the HICANs in the EDB, Title II numbers,

and the HICANs in the MedPAR file. The EDB stores the beneficiary’s record at the

most specific level of detail. For example, if the beneficiary’s Medicare eligibility was

originally based on a spouse’s earnings hi story and the spouse subsequently dies, the

beneficiary would have two HICANs. Both HICANs, which would have the same root,

but different BICs, would be stored in the EDB. However, the inpatient claim in theCMS-1498-P 507

MedPAR file will only have the individual’s HICAN at a more general level of detail; in

the preceding example, the BIC would identif y the beneficiary only as a spouse without

specifying whether the spouse (that is, the “pr imary” beneficiary) was alive or deceased.

This third step should ensure consistency be tween the HICANs from Step 1 and the Title

II numbers from Step 2 by “equating” (or converting) the BIC identifiers to the identifiers

that are on the inpatient claim that is include d in the MedPAR file. In addition, we are

proposing that, for any SSI-eligible beneficiary who is receiving Medi care benefits based

on his or her own account but whose records have not been matched already, we will

attempt to match the beneficiary’s HICAN in the MedPAR file. Specifically, we are

proposing to simply add an “A” to all the SSNs in the SSI eligibility data file so that, if

that individual was not captured by Steps 1 and 2 above (for whatever unlikely reason)

but MedPAR indicated that th e person had received Medicare services, the individual

would be included in the data ma tch process by this third step.

Step 4 -- Calculate the SSI fraction. We are not proposing any changes with

respect to the final step in determining the SS I fraction. To calculate the numerator of the

SSI fraction, CMS would continue to sum a hos pital’s Medicare inpatient days in the

acute care part of the hospital (excluding IPPS-exempt units such as rehabilitation and

psychiatric units) where the Medicare beneficiary was simultaneously entitled to SSI

benefits. To calculate the denominator, CMS would continue to sum a hospital’s total

Medicare inpatient days in the acute care part of the hospital.

c. Timing of the MatchCMS-1498-P 508

One of the district court’s findings in the Baystate decision was that CMS did not

use the latest available SSI eligibility file to calculate the provider’s SSI fractions. As a

result, it might be possible that if a beneficiary treated at the hospital was later

determined retroactively to be SSI eligible or if a suspension of the individual’s SSI

payments was later lifted, that inpatient stay might not be included in the numerator of

the SSI fraction. We believe that, in our recalculation of the Baystate hospital’s SSI

fractions and DSH payments, retroactive SSI eligibility determinations and the lifting of

SSI payment suspensions were not an issue due to the long period of time that elapsed

between the provider’s 1993 through 1996 fiscal years and our use of updated SSI

eligibility data during our completion of the revised match process in 2009. However, we

believe that further consideration of the timing of both the SSI eligibility information that

SSA provides to CMS and our proposed re vised match process for FY 2011 and

subsequent fiscal years is warranted.

At present, SSA provides an annual file to CMS with SSI eligibility information

that is current through March 31, or 6 months af ter the end of the prior Federal fiscal year

on September 30. (70 FR 47278, 47440, August 12, 2005). Based on this date, for a

hospital with an October 1 to September 30 cost reporting period, the SSI eligibility

information we currently use contains 6 to 18 months worth of retroactive SSI eligibility

determinations and payment suspension closur es--6 months from September (that is, the

end of the cost reporting period) and 18 months from October (that is, the beginning of

the cost reporting period). The time lag betw een the close of a hospital’s cost reporting

period and the date that CMS receives SSI eligibility information could actually be longerCMS-1498-P 509

or shorter for some hospitals , depending on the hospital’s specific cost reporting period.

We note that SSI fractions are generally ba sed on the Federal fiscal year. However,

under the regulations at §412.106(b)(3), a hosp ital with a cost reporting period that

differs from the Federal fiscal year may requ est a revised SSI fraction that is based on its

own cost reporting period rather than the Federa l fiscal year. In such a case, we would

revise the hospital’s SSI frac tion using SSI and Medicare data derived from the data

match process for the two Federal fiscal year s that spanned the hos pital’s cost reporting

period.

As we stated in the FY 2006 final IPPS rule, we believe that administrative

finality with respect to the calculation of a hospital’s SSI fraction is important

(70 FR 47440). We continue to believe that it is im portant to find an appropriate balance

between administrative finality (that is, the fi nal settlement of a hospital’s cost report)

and the inclusion of retroactive SSI eligib ility determinations and the lifting of SSI

payment suspensions by using the best and latest available SSI eligibility data at the time

of cost report settlement. Fu rther, we believe it is impor tant to account for the time

period in which hospitals are allowed to submit timely Medicare claims in order to ensure

that the point in time that we perform the match process includes as many timely

submitted inpatient hospital claims as are administratively practicable.

In accordance with the regulations at 42 CFR 424.44 and the Medicare Claims

Processing Manual (Pub. 100-04), Chapter 1, Se ction 70, a hospital must generally file a

claim by December 31 of the following year (for services furnished during the first 9

months of a calendar year) and by Decem ber 31 of the second following year (forCMS-1498-P 510

services provided during the last 3 months of the calendar year). Therefore, Medicare

claims for hospital services furnished in FY 2011 would have to be submitted no later

than December 31, 2012. We note that s ection 6404 of the Patie nt Protection and

Affordable Care Act (Pub. L. 111-148), as am ended, recently changed these deadlines to

no more than “1 calendar year after the date of service” effective for services provided on

or after January 1, 2010.

Generally speaking, providers have a financial incentive to submit fee-for-service

claims as close as possible to the date of the patient’s discharge, and providers have no

incentive to wait until after the end of the fi scal year. Thus, while conducting a data

match with MedPAR files that were updated 6 months after the end of the Federal fiscal

year may not capture all of a provider’s Medi care inpatient claims, we believe that, in

large part, the provider’s fee-for-service claims are included in that MedPAR file. The

same may not be true for the “information only” or “no pay” claims that hospitals are

required to submit to their fee-for-service contractor for Medicare Advantage (MA)

beneficiaries. Because claims for MA bene ficiaries are paid by MA plans and not the

fee-for-service contractor, hospitals may not ha ve the same incentive to file these claims

as close as possible to the da te of the patient’s discharge. 14 However, in accordance with

Transmittal 1396 (issued December 14, 2007) and Transmittal 1695 (issued

March 6, 2009), which changed th e instructions in the Medicare Claims Processing

14 Teaching hospitals have an incentive to submit these claims because they receive an indirect medical education payment. The claims are also used for a teaching hospital’s direct medical education payments. Non-teaching DSH hospitals do not have the same direct incentives to submit these claims but to the extent that the MA beneficiary is also SSI eligible, it would be to the hospital’s advantage to ensure these claims are included in the match process. However, nonteach ing DSH hospitals are required to submit MA claims for all MA beneficiaries, regardless of whether the beneficiaries were eligible for SSI benefits.CMS-1498-P 511

Manual (Pub. 100-04), all IPPS hospitals that do not qualify for IME payments, direct

GME payments, or nursing and allied health (N&AH) payments are required to submit

informational-only claims for all MA inpatients to ensure that data for MA beneficiaries

is included in the SSI fraction. Accordingly, we also are considering changes to the

timing of the data match process to ensure that all of a hospital’s MA claims are included

in the revised matching process given the lack of incentives that exist to submit these

claims as soon as possible after th e time of the patient’s discharge.

In addition, in matching eligibility reco rds for Medicare beneficiaries and SSI

recipients to calculate the SSI fractions for FY 2011 and future fiscal years, we are also

proposing to use more recent SSI eligibilit y information from SSA and a more updated

version of MedPAR that is likely to contai n more claims data. We currently use SSI

eligibility data and MedPAR claims data that are updated 6 months after the close of the

Federal fiscal year. We are proposing to use, for FY 2011 and subsequent years, SSI

eligibility data files compiled by SSA and MedPAR claims information that are updated

15 months after the close of each Federal fis cal year. This proposal would more closely

align the timing of the match process with the timing of our requirements (described

above) for the timely submission of claims. For example, to calculate the FY 2011 SSI

fractions, we would use the December 2012 update of the FY 2011 MedPAR file

(containing claims information for patie nt discharges between October 1, 2010 and

September 30, 2011), and a December 2012 SSI eligibility file (containing FY 2011 SSI

eligibility data updated thr ough December 2012, with a lag time relative to the Federal

fiscal year of between 15 and 27 months). We expect that the FY 2011 SSI fractionsCMS-1498-P 512

would be published around March 2013 and would be used to settle cost reports for cost

reporting periods that began in FY 2011. In addition, we would con tinue our practice of

using each hospital’s latest available SSI fraction in determining IPPS interim payments

from the time that the SSI fractions are publishe d until the SSI fractions for the next fiscal

year are published.

Under current law as amended by s ection 6404 of Pub. L. 111-148, Medicare

inpatient claims for FY 2011 can be submitted no later than 1 calenda r year from the date

of service or by September 30, 2012, for cl aims with a September 30, 2011 date of

service. Therefore, we believe that usin g the version of MedPAR that is updated 15

months after the end of the fiscal year would contain more accurate and complete

inpatient claims information, as we would be using claims data from 3 months after the

filing deadline for claims with a date of se rvice occurring on the last day of the second

preceding fiscal year. Furtherm ore, a later update of the SSI eligibility file would contain

more accurate eligibility inform ation and would account for a ll retroactive changes in SSI

eligibility and the lifting of SSI payment suspensions through that date.

The FY 2011 SSI fractions will be used to determine the hospitals’ Medicare

DSH payments for cost reporting periods beginning in FY 2011 (that is, October 1, 2010

through September 30, 2011). The proposed timing of the data match for the SSI

fractions, effective for FY 2011, would resu lt in FY 2011 SSI fractions being published

around March 2013 and would generally coincide w ith the final settlement of cost reports

for cost reporting periods beginning in FY 2011.CMS-1498-P 513

We believe that, by calculating SSI fractions on the basis of SSI eligibility data

and MedPAR claims data that are updated 15 months after the end of the Federal fiscal

year, we would be using the best data av ailable to us, given the deadlines for the

submission and final settlement of Medicare cost reports. Cost reports must be submitted

to the Medicare fiscal intermediary or MAC no later than 5 months after the end of the

provider’s cost reporting period; the fis cal intermediary or MAC must make a

determination of cost report acceptability within 30 days of receipt of the provider’s cost

report (42 CFR 413.24(f)(2)(i) and 413.24(f)(5)(iii)). In accordance with the Medicare

Financial Manual (Pub. 100-06) , Chapter 8, Section 90, the fiscal intermediary or MAC

is expected to settle each cost report that is not scheduled for audit within 12 months of

the contractor’s acceptance of the cost repor t. We believe that our proposed timing of the

data match would achieve an appropriat e balance between accounting for additional

retroactive SSI eligibility determinations and the lifting of SSI payment suspensions

using all timely submitted Part A inpatient claims, and facilitating administrative finality

through the timely final settlement of Medicare cost reports.

Example of Timeline to Calculate FY 2011 SSI Fractions Under Current Policy

Cost Reports That Use

the FY 2011 SSI

Ratios Deadline for Timely Filing of Claims MedPAR File Used SSI Eligibility File Used Cost Reports Normally Accepted Cost Report

Final Settlement SSI Fraction Available

Cost reports December 2012 March 2012 March 2012 Generally between Generally between Summer 2012CMS-1498-P 514

beginning October 1, 2010 through September 30, 2011 update of FY 2011 MedPAR update of FY 2011 SSI eligibility March 2012 and February 2013 March 2013 and February 2014CMS-1498-P 515

Example of Timeline to Calculate FY 2011 SSI Fractions Under Proposed Rule

Cost Reports That Use

the FY 2011 SSI

Ratios Deadline for Timely Filing of Claims MedPAR File Used SSI Eligibility File Used Cost Reports Normally Accepted Cost Report

Final Settlement SSI Fraction Available

Cost reports beginning October 1, 2010 through September 30, 2011 December 2012 December 2012 update of FY 2011 MedPAR December 2012 update of FY 2011 SSI eligibility Generally between March 2012 and February 2013 Generally between March 2013 and February 2014 Spring 2013

5. CMS Ruling

Tthe CMS Administrator has prepared a CMS Ruling that addresses three

Medicare DSH issues, including CMS’ process for matching Medicare and SSI eligibility

data and calculating hospitals’ SSI fractions. With respect to the data matching process

issue, the Ruling requires the Medicare admin istrative appeals tribunal (that is, the

Administrator of CMS, the PRRB, the fiscal intermediary hearing officer, or the CMS

reviewing official) to remand each qualifying appeal to the appropriate Medicare

contractor. The Ruling also explains how, on remand, CMS and the contractor will

recalculate the provider’s DSH payment adjustment and make any payment deemed

owing. The Ruling further provides that CMS and the Medicare contractors will apply

the provisions of the Ruling, on the data matching process issue (and two other DSHCMS-1498-P 516

issues, as applicable), in calculating the DSH payment adjustment for each hospital cost

reporting period where the contractor has not yet final settled the provider’s Medicare

cost report through the issuance of an initia l notice of program reimbursement (NPR) (42

CFR 405.1801(a) and 405.1803).

More specifically, the Ruling provides that , for qualifying appeals of the data

matching issue and for cost reports not yet final settled by an initial NPR, CMS will

apply any new data matching process that is adopted in the forthcoming FY 2011 IPPS

final rule for each appeal th at is subject to the Ruling. The data matching process

provisions of the Ruling would apply to proper ly pending appeals and open cost reports

for cost reporting periods beginning prior to October 1, 2010 (that is those preceding the

effective date of the FY 2011 IPPS final rule).

The Ruling further states that, if a new da ta matching process is not adopted in the

forthcoming FY 2011 IPPS final rule, CMS woul d apply to claims subject to the Ruling

the same data matching process as the agency used to implement the Baystate decision by

recalculating that provider’s SSI fractions.

6. Clarification of Language on Inclusi on of Medicare Advantage Days in the SSI

Fraction of the Medicare DSH Calculation

In the FY 2005 IPPS final rule (69 FR 49099), we discussed in the preamble our

policy change to reflect the inclusion of the days associated with Medicare + Choice

(now Medicare Advantage (MA)) beneficiaries under Medicare Part C in the SSI fraction

of the DSH calculation. In that rule, we indi cated that we were revising the regulation

text at §412.106(b)(2)(i) to incorporate this po licy. However, we inadvertently did notCMS-1498-P 517

make a change in the regulation text to c onform to the preamble language. We also

inadvertently did not propose to change §412.106(b)(2)(iii) in the FY 2005 final rule,

although we intended to do so. Accordingly, in the FY 2007 IPPS rule (72 FR 47384),

we made a technical correction to ame nd the regulations at §412.106(b)(2)(i) and to

§412.106(b)(2)(iii) to make them consistent with the preamble language of the FY 2005

IPPS final rule and to conform to the policy implemented in that rule. Section

412.106(b)(2)(i) of the regulations discusses the numerator of the SSI fraction of the

Medicare disproportionate patient pe rcentage (DPP) calculation, while

§412.106(b)(2)(iii) of the regulations discusses the denominator of the SSI fraction of the

Medicare DPP.

We are aware that there might be some confusion about our policy to include MA

days in the SSI fraction, specifically regarding whether we have implied that MA

beneficiaries are not actually “entitled to receive benefits under Part A” by using the

word “or” in §412.106(b)(2)(i)(B) and §412.106 (b)(2)(iii)(B) with respect to MA days.

We note that in the FY 2005 final rule, we st ated that we believed that Medicare + Choice

(now MA) beneficiaries are pa tients who are entitled to benef its under Medicare Part A.

With respect to the change to the regulatory text that we intended to make in the FY 2005

IPPS final rule, we stated “...we are adopting a policy to include patient days for M+C

beneficiaries in the Medicare fraction” (69 FR 49099) (emphasis added). In order to

further clarify our policy that patients days a ssociated with MA beneficiaries are to be

included in the SSI fraction because they ar e still entitled to benef its under Medicare PartCMS-1498-P 518

A, we are proposing to replace the word “or” with the word “including” in

§412.106(b)(2)(i)(B) and §412.106 (b)(2)(iii)(B).

H. Payments for Direct Graduate Medical Education (GME) (§413.75)

1. Background

Under section 1886(a)(4) of the Act, co sts of approved educ ational activities are

excluded from the operating costs of hospital i npatient services. Section 1886(h) of the

Act, as implemented in regulations at §413.75 through §413.83, establishes a

methodology for determining payments to hosp itals for the direct costs of approved GME

programs. Section 1886(h)(2) of the Act sets forth a methodology for the determination

of a hospital-specific, base-period per resi dent amount (PRA) that is calculated by

dividing a hospital’s allowable direct costs of GME for a base period by its number of

residents in the base period. The base peri od is, for most hospitals, the hospital’s cost

reporting period beginning in FY 1984 (that is, the period of October 1, 1983, through

September 30, 1984). Medicare di rect GME payments are calculated by multiplying the

PRA by the weighted number of full-time equivalent (FTE) residents working in all areas

of the hospital complex (and nonhospital sites, when appli cable), and the hospital’s

Medicare share of total inpatient days. Th e base year PRA is updated annually for

inflation.

Hospitals may receive direct GME and IME payments for residents in “approved

medical residency training pr ograms.” Section 1886(h)(5)( A) of the Act defines an

“approved medical residency training progra m” as “a residency or other postgraduate

medical training program partic ipation in which may be counted toward certification in aCMS-1498-P 519

specialty or subspecialty and includes formal postgraduate training programs in geriatric

medicine approved by the Secretary.” Se ction 1886(h)(4)(F) of the Act established a

limit on the number of allopathic and osteopathic FTE residents that a hospital may

include in its FTE resident count for purposes of calculating direct GME payments. For

most hospitals, the limit, or cap, is the unwei ghted number of allopa thic and osteopathic

FTE residents training in the hospital's most recent cost reporting period ending on or

before December 31, 1996.

2. Identifying “Approved Medical Residency Programs”

Despite the fact that current policies regarding the counting of FTE residents for

IME and direct GME purposes have been in effect since October 1985, we continue to

receive questions as to whether certain residents are training in approved medical

residency programs, and whether these resi dents should be included in the Medicare

direct GME and IME FTE counts. Although th e fundamental rules defining an approved

medical residency training program seem st raightforward, some c onfusion apparently

exists regarding whether certain trainees in a teaching hospital should be included in the

FTE count for IME and direct GME purposes, or whether certain trainees should be

treated as physicians and should instead bill fo r their services under Medicare Part B.

These questions arise most often with regard to subspecialty training and “fellows.” It is

important for hospitals to understand when ea ch of these types of payment applies.

a. Residents in Approved Medical Residency Programs

As stated earlier, section 1886(h)(5)(A) of the Act defines an “approved medical

residency training program” as “a residenc y or other postgraduate medical trainingCMS-1498-P 520

program participation in whic h may be counted toward cer tification in a specialty or

subspecialty and includes form al postgraduate training prog rams in geriatric medicine

approved by the Secretary.” The regulati ons at §413.75(b) define an “approved medical

residency program” as a program that meets one of the following criteria (emphasis

added):

(1) Is approved by one of the nati onal organizations listed in §415.152 of the

regulations.

(2) May count towards certification of the participant in a specialty or

subspecialty listed in the current edition of either of the following publications:

(i) The Directory of Graduate Medical Education Programs published by the

American Medical Association; or

(ii) The Annual Report and Reference Handbook published by the American

Board of Medical Specialties.

(3) Is approved by the Accreditation Council for Graduate Medical Education

(ACGME) as a fellowship progr am in geriatric medicine.

(4) Is a program that would be accredited except for the accrediting agency's

reliance upon an accreditation standard that requires an entity to perform an induced

abortion or require, provide, or refer for trai ning in the performance of induced abortions,

or make arrangements for such training, re gardless of whether the standard provides

exceptions or exemptions.

The regulations at §415.152 define an “a pproved graduate medical education

program” as a residency program approve d by one of the following nationalCMS-1498-P 521

organizations (or their predecessors): th e Accreditation Council for Graduate Medical

Education (ACGME) of the American Medica l Association, the American Osteopathic

Association (AOA), the Commission on Dental Accreditation (CODA) of the American

Dental Association, and the Council on Podi atric Medical Education (CPME) of the

American Podiatri c Medical Association. The statutor y basis for this regulation is at

section 1861(b)(6) of the Act, which cite s these accrediting bodies for residency

programs. Thus, in general, under §413.75(b), an “approved” program can be a program

that is accredited by one of these national organizations, or one that leads toward board

certification by the American Board of Medical Specialties (ABMS). In the

September 29, 1989 final rule (54 FR 40295), we ex plained that, in orde r to reconcile the

two statutory definitions of approved progra ms at sections 1861(b)(6) and 1886(h)(5)(A)

of the Act, we did not limit our regulatory definition of “approved medical residency

program” to one that may count toward cer tification in a specialty, but added that a

program is also “approved” for purposes of IM E and direct GME if it is approved by one

of the national accrediting bodi es. Furthermore, we unders tood that, especially with

respect to subspecialty traini ng, there historically were so me formal programs for which

none of the listed national accrediting bodies ha d established standards. However, the

ABMS had established a national board exa mination for some of those unaccredited

programs and, consequently, thos e programs do count toward certification. Accordingly,

such programs also meet the definition of an “approved medical residency training

program.”

b. Determining Whether an Individua l Is a Resident or a PhysicianCMS-1498-P 522

The statute and the regulations (in at leas t two places in the teaching context)

define the term “resident.” Section 1861(b)(6) of the Act refers to services provided in a

hospital by an “intern or resident-in-traini ng under a teaching program approved” by one

of the listed accrediting bodies for residenc y programs. In addition, section 1886(h)(5)(I)

of the Act states that the term “resident” includes “an intern or other participant in an

approved medical residency trai ning program.” The regulations at §413.75(b) state that

the term resident means “an intern, resident, or fello w who participates in an approved

medical residency program, including programs in osteopathy, dentistry, and podiatry, as

required in order to become certified by the appropriate specialty board.”

As discussed above, an “approve d” program is one that is accredited by one of the

listed national organizations, or one that may count to wards board certification.

Generally, residency programs today, whether they are core or subspecialty programs, are

both accredited, and lead toward board certification through an explicit board

examination for that field. Thus, in the typical instance, a resident is accepted into an

accredited program in a particular specialty, completes that program over the course of

what is typically 3 to 5 years, and then qualif ies to take the board certifying examination

in the particular specialty of that program. This resident may or may not train in an

additional accredited subspecialty program, which would typically last for 1 to 3 years,

and which would also lead to board certifi cation through an additional board certifying

examination which the individual woul d be qualified to take upon completion.

We receive questions from time to time regarding whether individuals are

considered to be trainees in approved progra ms or whether they are considered to beCMS-1498-P 523

physicians and should bill accordingly. Thes e questions frequently involve programs of

further training that certain senior and juni or faculty at hospitals, typically at large

academic medical centers, undertake on thei r own, not under the auspices of any

accrediting body, and in an area of practice for which there is no board certification.

Therefore, there is no actual standardized curriculum or formally organized “program” in

which the individual trainee is participating. Another type of trainee about which we

have received questions is one that has co mpleted an accredited program in a certain

specialty, but subsequently participates in add itional training in that specialty that he or

she could have participated in while still within the accredited program. Sometimes this

individual may even train with residents who are actually still training in that accredited

program (for example, an individual who ha s completed a dermatology residency may

choose to do additional training with PGY4 de rmatology residents). In these scenarios,

in order to decide whether an individual is considered a resident or a physician for

purposes of Medicare payment, the pertinent questions are whether--

(1) The individual actually needs the training in order to meet board certification

requirements in that specialty; and

(2) Whether the individual is formal ly participating in an organized,

standardized, structured course of study.

With regard to the junior faculty who are “training” with senior faculty to learn

highly specialized skills, we believe that individuals participating in a course of training

that one or more senior physicians creates absent the involvement and approval of an

accrediting body, and for which there is no specific existing board certificationCMS-1498-P 524

examination, should not be considered “resid ents” or counted for IME and direct GME

purposes. Similarly, individuals that already completed an accredited residency

program, but subsequently partic ipate in additional training in that same specialty that

they could have partic ipated in while still within that accredited program, should also

not be considered “residents” or be included in the IME and direct GME count. This is

because these individuals have already completed accredited residency programs in a

particular specialty or subsp ecialty, and do not need to comp lete the additional training

in order to meet board certification requirement s in that field in which they continue to

“train.” The definition of “resident” at §413.75(b) is “an intern, resident, or fellow who

participates in an approved medical re sidency program, including programs in

osteopathy, dentistry, and podiatry, as required in order to become certified by the

appropriate specialty board ” (emphasis added). Accordingl y, the individuals described

in the scenarios above do not m eet the definition of “resident” at §413.75(b) for IME

and direct GME purposes. Instead, these individuals should be treated and receive

payment as physicians.

As we explained in the September 29, 1989 Federal Register rule: “The costs

relating to patient care services of licensed physicians who are classified as “fellows” but

who are not in an identifiable formal progra m leading to certification as defined in

section 1886(h)(5) of the Act but remain at a teaching hospital/medical school complex to

enhance their expertise in a field of study ar e payable on a Part B reasonable charge basis

[now under the Medicare physician fee schedul e] as physicians’ services” (54 FR 40295).

Similarly, in the Provider Re imbursement Manual, Part I, section 2405.3.F.2, we state,CMS-1498-P 525

“Intermediaries must not count an individual in the indirect medical education adjustment

if . . . [A]n individual designated as a “fe llow” has elected to remain at a teaching

hospital/university complex for additional work to gain expertise in a particular field but

is no longer in a formally organized program to fulfill certification requirements . The

services of such an individual are generally covered as physicians' services payable on a

reasonable charge basis” (empha sis added). (Note: Although we used the term “fellow,”

which is defined synonymously with “resident” in the regulations at §413.75, in these

paragraphs in the September 29, 1989 Federal Register and in the PRM-I, by stating that

such “fellows” are not in identifiable, form ally organized programs and their services

should be billed under Part B as physician serv ices, we clearly were indicating that these

“fellows” are licensed physicians, not residents, and should not be included in the IME

and direct GME FTE counts. Perhaps “junior faculty” would have been a more apt

characterization of these individuals.)

The passage from the September 29, 1989 Federal Register also mentions an

“identifiable formal program leading to cer tification as defined in section 1886(h)(5) of

the Act” which refers to the statutory definition of “approved medical residency

program.” The word “approved” connotes fo rmality; a planned, structured course of

study with a curriculum based on national (rat her than individual ph ysician or hospital)

standards with a standardized outcome base d on standardized evaluations. Since the

early days of Medicare, prior to the enac tment of section 1886(h) of the Act, when

hospitals received payment on a reasonable cost basis for “approved educational

activities,” we defined such activities as “ formally organized or planned programs ofCMS-1498-P 526

study operated or supported by an institution, as distinguished from ‘on-the-job,’

‘inservice,’ or similar work-learning programs” (emphasis added) (PRM-I, section

402.1). We believe the education that junior faculty receive when working closely with

senior faculty to gain highly specialized skills is more appropriately characterized as onthe-job, or inservice training, rather than training in an “approved medical residency

program.”

In order for the training to be cons idered an “approved medical residency

program,” the training must prepare the indi vidual for certification in the particular

specialty or subspecialty in which the individual is training. The mere possibility that the

training could be construed as leading towa rd or counting toward certification in some

existing board examination is insufficient. For example, an individual who is enrolled

and participating in a two year accredited subspecialty program in allergy and

immunology and, as part of that program, comp letes an elective in allergic reactions to

insect stings is considered a resident during that elective, and may be included in the IME

and direct GME FTE count (assuming all other re quirements are met). However, if, after

completion of the 2-year allergy and immunolog y subspecialty program, this individual

decides to remain at the teaching hospital for a year to shadow a physician who has

unique expertise in allergic reactions to insect stings, this individual would not be

considered a resident, nor would this trai ning be considered an approved program,

because this individual is not formally enrolled in a planned, structured, standardized

course of study, nor is this year of training required for any individual to qualify to take

the board examination in alle rgy and immunology. This individual already completed theCMS-1498-P 527

2-year subspecialty program, and therefore, the extra year spent studying allergic

reactions to insect stings is extraneous. A ccordingly, this individual would not be viewed

as a resident participating in an approved medical residency training program. Rather,

this individual is considered a physician a nd should bill Medicare for services furnished

under the physician fee schedule.

c. Formal Enrollment and Participation in a Program

We understand that the participation of individuals in an approved medical

residency program under which they would be considered residents as defined at §413.75

is marked by a formal appli cation, acceptance, and enrollment process. We believe that

in order for an individual to be considered a resident for purposes of inclusion in the IME

and direct GME counts, whethe r the individual is a graduate of an allopathic medical

school, an osteopathic medical school, or a school of podiatry or dentistry, the individual

must be:

(1) Formally accepted and enrolled in the training program, and

(2) Fully participating in that training (unless there is a documented arrangement

for the resident to work part time).

In general, we would expect formal accep tance to include an application process

(for example, the national residency match process), and an enrollment process which

would include letters or other official notif ications from the hospital or program sponsor

regarding the resident's acceptance to train in a particular program. We would also expect

the resident to have an employment cont ract with the institution(s) sponsoring the

program and/or the institution(s) in which he or she is traini ng. A hospital must be ableCMS-1498-P 528

to document that the individual’s participati on in the particular course of training

represents a definitive (not hypothetical) path for that individual’s certification, and that

satisfactory completion of such training would fulfill all required elements in order for

the individual to qualify to take a specific board examination.

In order to make these rules clearer for the future, we are proposing to revise the

definition of “resident” to specify that the trainee must be “formally accepted and

enrolled” in the approved program in order to be considered a resident for IME and direct

GME purposes. Specifically, we are proposin g to revise the definition of “resident” at

§413.75(b) to mean “an intern, resident, or fe llow who is formally accepted, enrolled, and

participating in an approved medical re sidency program, including programs in

osteopathy, dentistry, and podiatry, as requi red in order to become certified by the

appropriate specialty board.” We also are proposing to make a similar conforming

change to the definition of “primary care resident” at §413.75(b). This change in the

definitions of “resident” and “primary care resident” would be effective for IME and

direct GME for cost reporting periods beginning on or after October 1, 2010.

In summary, we are proposing to clarify that individuals participating in a

specialized course of training created by a senior physician, and not under the auspices of

a national accrediting body, and for which there is no explicit existing board certification

examination, should not be counted for IME a nd direct GME purposes. Such individuals

should be treated as physicians, and their services should be b illed to Medicare for

payment as physicians’ services. If an indi vidual has already successfully completed at

least one residency program a nd has met the requirements to be board eligible in aCMS-1498-P 529

specialty (regardless of whethe r the individual has passed the board examination for that

specialty), and is engaged in subsequent training that will not provide additional

knowledge or skills that could be applied for board certifica tion in a subspecialty, the

individual should be treated and bill for servi ces provided as a physician. We also are

proposing to revise the definition of “resident” at §413.75(b) to mean “an intern, resident,

or fellow who is formally accepted, enrolled, and participating in an approved medical

residency program, including programs in os teopathy, dentistry, and podiatry, as required

in order to become certified by the approp riate specialty board.” We are proposing to

make a conforming change to the definition of “primary care resident” to mean “a

resident who is formally accepted, enrolled, and participating in an approved medical

residency training program in family medi cine, general internal medicine, general

pediatrics, preventive medicine, geriatric medicine or osteopath ic general practice.” This

change in the definitions of “resident” and “p rimary care resident” would be effective for

IME and direct GME for cost reporting pe riods beginning on or after October 1, 2010.

3. Electronic Submission of Affiliation Agreements

Sections 1886(h)(4)(F) and 1886(d)(5)(B )(v) of the Act establish limits on the

number of allopathic and oste opathic FTE residents that hos pitals may count for purposes

of calculating direct GME payments and th e IME adjustment. In addition, under the

authority granted by section 1886(h)(4)(H)(ii) of the Act, the Secretary issued regulations

on May 12, 1998 (63 FR 26358) to allow institu tions that are members of the same

Medicare GME affiliated group to elect to appl y their direct GME and IME FTE resident

caps based on the aggregate cap of all hospitals that are part of a Medicare GMECMS-1498-P 530

affiliation group. Under those regulations, specified at §413.79( f) for direct GME and at

§412.105(f)(1)(vi) for IME, hospitals that are pa rt of the same Medicare GME affiliated

group are permitted to adjust each hospital's caps to reflect the rotation of residents

among affiliated hospitals during an acade mic year. Under §413.75 (b), a Medicare GME

affiliated group may be formed by two or more hospitals if: (1) the hospitals are located

in the same urban or rural area or in a contiguous area and have a shared rotational

arrangement as specified at §413.79(f)(2); (2) the hospitals are not located in the same or

in a contiguous area, but have a shared rota tional arrangement and they are jointly listed

as the sponsor, primary clinical site, or ma jor participating institution for one or more

programs as these terms are used in the most recent publication of the Graduate Medical

Education Directory , or as the sponsor or is lis ted under “affiliations and outside

rotations” for one or more programs in Opportunities, Directory of Osteopathic Postdoctoral Education Programs ; or (3) effective beginning July 1, 2003, two or more

hospitals are under common ownership and ha ve a shared rotational arrangement under

§413.79(f)(2).

The existing regulations at §413.79(f)(1) speci fy that each hospital in a Medicare

GME affiliated group must submit a Medicar e GME affiliation agreement (as defined

under §413.75(b)) to the CMS fiscal intermedia ry or MAC servicing the hospital and

send a copy of the agreement to CMS’ Central Office no later than July 1 of the residency

program year during which the Medicare GME affiliation agreement will be in effect.

For example, in order for a hospital to receive a temporary adjustment to its FTE resident

caps to reflect participation in a Medicare GME affiliated group for the academic yearCMS-1498-P 531

beginning July 1, 2009, through June 30, 2010, th e hospital in the affiliated group had to

submit a Medicare GME affiliation agreement to the fiscal intermediary or MAC

servicing the hospital and send a copy of the agreement to CMS’ Central Office no later

than July 1, 2009.

Over the last several years, we have received numerous inquiries regarding the

possibility of submitting the Medicare GME affiliation agreement electronically. To

date, CMS has only accepted signed hard copies of Medicare GME affiliation agreements

that are received through the mail. Facsimile (FAX) and other electronic submissions of

affiliation agreements have not been accept able means of transmission of affiliation

agreements to CMS Central Office in order for a hospital to meet the requirements of

§§413.79(f) and 412.105(f)(1)(vi).

The increasing frequency of these i nquiries and our concerns regarding

environmental and paperwork re duction have prompted us to reconsider our procedure

for hospitals to submit Medicare GME affiliation agreements to the CMS Central Office.

Accordingly, we are proposing to change our policy to provide for electronic submission

of the affiliation agreement that is required to be sent to the CMS Central Office. This

proposal would not affect the authority of the fiscal intermediary or MAC to continue to

specify its requirements for submission for hospitals in its servicing area.

We are proposing an electronic submission pr ocess that would consist of either an

e-mail mailbox or a Web site where hospitals would submit their Medicare GME

affiliation agreements to the CMS Central Office. As part of this process, a copy of the

Medicare GME affiliation agreement would need to be received through the electronicCMS-1498-P 532

system no later than 11:59 p.m. on July 1 of each academic year. We are proposing that

the electronic affiliation agreement would need to be submitted either as a scanned copy

or a Printer-Friendly Display (PDF) versi on of that hard copy agreement; we are

proposing not to accept an agreement in any el ectronic format that could be subject to

manipulation. The scanned and/or PDF form at will enable CMS to ensure that the

agreements are signed and dated as required in the regulations at §413.75.

We believe that allowing an electronic submission of the affiliation agreement to

the CMS Central Office would assist us in more effectively tracking the groups of

hospitals that affiliate as well as the numbers of FTE cap slots that are being transferred

within those groups. In addition, we belie ve an electronic sub mission process would

minimize the paperwork burden for hospitals.

I. Certified Registered Nurse Anesthetist ( CRNA) Services Furnished in Rural Hospitals

and CAHs

Section 2312 of the Deficit Reduction Ac t of 1984 (Pub. L. 98-369) provided for

reimbursement to hospitals on a reasonable cost basis for the costs that hospitals incur in

connection with the services of certified registered nurse anesthetists (CRNAs). Section

2312(c) provided that pass-through of CRNA costs was effective for cost reporting

periods beginning on or after October 1, 1984, and before October 1, 1987. Section 9320

of the Omnibus Budget Reconciliation Act of 1986 (Pub. L. 99–509) (which established a

fee schedule for the services of nurse anes thetists) amended section 2312(c) of Pub. L.

98-369 by extending the CRNA pass-through pr ovision through cost reporting periods

beginning before January 1, 1989. In add ition, Pub. L. 99-509 amended section 1861 ofCMS-1498-P 533

the Act to add a new subsection (bb), wh ich provides that CRNA services include

anesthesia services and related care furn ished by a CRNA. Section 608 of the Family

Support Act of 1988 (Pub. L. 100-485) exte nded pass-through payments for CRNA

services through 1991 and amended section 9320 of Pub. L. 99-509 by including

language referring to eligibility for pass-through payments for CRNA services if the

facility is “...a hospital located in a rural ar ea (as defined for purposes of section 1886(d)

of the Social Security Act)....” Reasonable cost-based payment for CRNA services was

extended indefinitely by section 6132 of th e Omnibus Budget Reconciliation Act of 1989

(Pub. L. 101–239).

Section 1886(d)(2)(D) of the Act defines “rural” as any area outside an urban

area. This definition of “rural” was in ef fect when Pub. L. 100-485 was implemented. In

1999, the Balanced Budget Refinement Act (Pub. L. 106-113) amended section

1886(d)(8) of the Act by adding a new s ubparagraph (E), which permits a hospital

physically located in an urban area to apply for reclassification to be treated as rural. In

addition, Pub. L. 106-113 made a corresponding change to section 1820(c)(2)(B)(i) of the

Act, which specifies the loca tion requirements for CAH designation, by adding the phrase

“or is treated as being located in a ru ral area pursuant to section 1886(d)(8)(E).”

The regulations implementing pass-through payments for anesthesia services and

related care furnished by qua lified nonphysician anesthetists employed by a hospital or

CAH, including CRNAs, are located at §412.113(c). Section 412.113(c)(2)(i)(A)

specifies the location requirement for facilities that furnish these services and are eligible

to be paid based on reasonable cost for the services. The regulations require that theCMS-1498-P 534

hospital or CAH be located in a rural area as defined at §412.62(f) and not be deemed to

be located in an urban area under the provi sions of §412.64(b)(3). The regulations at

§412.62(f) mirror section 1886(d)(2)(D) of the Act and define a rural area as “... any area

outside an urban area.” The regulati ons at §412.64(b)(3) implement section

1886(d)(8)(B) of the Act, also known as th e “Lugar” provision, which requires a hospital

located in a rural county adjacent to one or more urban areas to be treated as being

located in the urban metropolitan statistical area to which the greatest number of workers

in the county commute.

Under existing regulations, neither CAHs/hospitals that have reclassified from

urban to rural under the regulations at §412.103 nor CAHs/hospitals located in Lugar

counties are eligible to receive pass-through payments for anesthesia services and related

care furnished by qualified nonphysician anes thetists. We believe that because the

statute, as revised by section 608 of Pub. L. 100–485, allows for reasonable cost

payments for CRNA services if the facility is a hospital located in a rural area as defined

for purposes of section 1886(d) of the Act, it is appropriate for us to make the regulations

consistent by permitting urban hospitals that ha ve been reclassified as rural to qualify for

these payments. Therefore, we are proposin g to revise §412.113(c)(2)(i)(A) to state that

effective for cost reporting periods begi nning on or after October 1, 2010, CAHs and

hospitals that have reclassified pursuant to section 1886(d)(8)(E) of the Act and §412.103

of the regulations are also rural for purposes of section 1886(d) of the Act and, therefore,

are eligible to be paid based on reasonable co st for anesthesia services and related care

furnished by a qualified nonphysician anesthetist.CMS-1498-P 535

We are not proposing to change our regu lations to permit Lu gar facilities to be

paid based on reasonable cost for anesthesia services and related care furnished by

qualified nonphysician anesthetists. As noted above, in order to be paid based on

reasonable cost for anesthesia services and related care furnished by a qualified

nonphysician anesthetist, a hospital or CAH mu st be considered rural for purposes of

section 1886(d) of the Act. Lugar facilities (facilities that have be en reclassified under

§§412.63(b)(3) and 412.64(b)(3)) are considered ur ban for purposes of section 1886(d) of

the Act. As a result, we do not believe it w ould be consistent with the statute and our

regulations to permit these facilities to be paid on a reasonable cost basis for anesthesia

services and related care furnished by qualified nonphysician anesthetists.

J. Rural Community Hosp ital Demonstration Program

Section 410A(a) of Pub. L. 108-173 requi red the Secretary to establish a

demonstration program to test the feasibilit y and advisability of establishing "rural

community hospitals" to furnish covered inpatient hospital services to Medicare

beneficiaries. The demonstration pays rura l community hospitals for such services under

a cost-based methodology for Medicare paym ent purposes for covere d inpatient hospital

services furnished to Medicare beneficiaries. A rural community hospital, as defined in

section 410A(f)(1), is a hospital that--

● Is located in a rural area (as defined in section 1886(d)(2)(D) of the Act) or is

treated as being located in a rural area under section 1886(d)(8)(E) of the Act;

● Has fewer than 51 beds (excluding be ds in a distinct part psychiatric or

rehabilitation unit) as reported in its most recent cost report;CMS-1498-P 536

● Provides 24-hour emergency care services; and

● Is not designated or eligible for designation as a CAH under section 1820 of

the Act.

Section 410A(a)(4) of Pub. L. 108-173 (MMA) specified that the Secretary was to

select for participation no more than 15 rural community hospitals in rural areas of States

that the Secretary identified as having lo w population densities. Using 2002 data from

the U.S Census Bureau, we identified the 10 St ates with the lowest population density in

which rural community hospitals were to be located in order to participate in the

demonstration: Alaska, Idaho, Montana, Ne braska, Nevada, New Mexico, North Dakota,

South Dakota, Utah, and Wyoming. (Source: U. S. Census Bureau, Statistical Abstract of

the United States: 2003).

CMS originally solicited applicants for the demonstration in May 2004; 13

hospitals began participation with co st report years beginning on or after

October 1, 2004. (Four of these 13 hospitals withdrew from the program and became

CAHs). In a notice published in the Federal Register on February 6, 2008

(73 FR 6971), we announced a solicitation for up to 6 additional hospita ls to participate

in the demonstration program. Four additi onal hospitals were selected to participate

under this solicitation. These four additiona l hospitals began under the demonstration

payment methodology with the hospital’s firs t cost reporting period starting on or after

July 1, 2008. Three hospitals (2 of the hospitals were among the 13 hospitals that

originally participated in the demonstra tion and 1 of the hospitals was among the

4 hospitals that began the demonstration in 2008) withdrew from the demonstrationCMS-1498-P 537

during CY 2009. (Two of these hospitals indicated that they will be paid more for

Medicare inpatient services under the re basing allowed under the SCH methodology

allowed by the Medicare Improvement for Patients and Providers Act of 2008 (Pub. L.

110-275). The other hospital restructured to become a CAH.) There are currently 10

hospitals participating in the demonstration.

Section 410A(a)(5) of Pub. L. 108-173 required a 5-year demonstration period of

participation. For the seven cu rrently participating hospitals that began the demonstration

during FY 2005, the demonstration was scheduled to end for each of these hospitals on

the last day of its cost reporting period that ends in FY 2010. The e nd of the participation

for the three participating hospitals that began the demonstration in CY 2008 was

scheduled to be September 30, 2010. A 5-ye ar extension of the demonstration was

mandated in the Patient Protec tion and Affordable Care Ac t (PPACA, Pub. L. 111-148).

We note that this proposed rule does not a ddress the relevant changes mandated by

Pub. L. 111-148. Pub. L. 111-148 does affect our proposed FY 2011 policy with regard

to the rural community hospital demonstrati on. However, we will address that provision

of Pub. L. 111-148 and any revised policy propos als in a separate rulemaking document

in the Federal Register

. Section 410A of Pub. L. 108-173 required that, “in conducting the demonstration

program under this section, the Secretary shall ensure that the aggregate payments made

by the Secretary do not exceed the amount whic h the Secretary would have paid if the

demonstration program under th is section was not implemented.” This requirement is

commonly referred to as “budget neutrality.”CMS-1498-P 538

Generally, when CMS implements a de monstration program on a budget neutral

basis, the demonstration program is budget neutral in its own terms; in other words, the

aggregate payments to the participating hospitals do not exceed the amount that would be

paid to those same hospitals in the absence of the demonstration program. Typically, this

form of budget neutrality is viable when, by changing payments or aligning incentives to

improve overall efficiency, or both, a demonstr ation program may reduce the use of some

services or eliminate the need for others, resulting in reduced expenditures for the

demonstration program’s par ticipants. These reduced expenditures offset increased

payments elsewhere under the demonstra tion program, thus ensuring that the

demonstration program as a whole is budget ne utral or yields savings. However, the

small scale of this demonstration pr ogram, in conjunction with the payment

methodology, makes it extremely unlikely that this demonstrati on program could be

viable under the usual form of budget neutralit y. Specifically, cost-based payments to

participating small ru ral hospitals are likely to increase Medicare outlays without

producing any offsetting reduction in Medicare expenditures elsewhere. Therefore, a

rural community hospital’s participation in this demonstration program is unlikely to

yield benefits to the participant if budget ne utrality were to be imp lemented by reducing

other payments for these same hospitals.

In the past six IPPS final regulations, spanning the period for which the

demonstration has been implemented, we have adjusted the national inpatient PPS rates

by an amount sufficient to account for the ad ded costs of this demonstration program,

thus applying budget neutrality across the paym ent system as a whole rather than merelyCMS-1498-P 539

across the participants in this demonstrati on program. As we discussed in the FY 2005,

FY 2006, FY 2007, FY 2008, FY 2009, and FY 2010 IPPS final rules (69 FR 49183;

70 FR 47462; 71 FR 48100; 72 FR 47392; 73 FR 48670; and 74 FR 43922), we believe

that the language of the statutory budget neutrality requirements permits the agency to

implement the budget neutralit y provision in this manner.

In this proposed rule, in order to ensure that the demonstration in FY 2007 is

budget neutral, we are proposing to incorporate a component into the adjustment factor to

the FY 2011 national IPPS rates that would o ffset the amount by which the costs of the

demonstration program, as indicated by se ttled cost reports beginning in FY 2007 for

hospitals participating in the demonstration during FY 2007, exceeded the amount that

was identified in the FY 2007 final rule as the budget neutrality offset for FY 2007.

Specifically, we are proposing the following methodology: (1) Calculate the FY 2007

costs of the demonstration program according to the settled cost reports that began in

FY 2007 for the then participating hospitals (which represent the third year in the

demonstration for each of the then participa ting hospitals); (2) Subtract the amount that

was offset by the budget neutrality adju stment for FY 2007 ($9,197,870) from the costs

of the demonstration in FY 2007 as calculated in step 1; and (3) Calculate an adjustment

factor for the standardized amount for FY 2011 based on the dollar amount calculated in

step 2 of this proposed methodology. This factor would represent the component of the

proposed overall budget neutrality offset amount for FY 2011 that accounts for the

difference between the cost of the demons tration in FY 2007 and the amount of the

budget neutrality adjustment published in the FY 2007 final rule.CMS-1498-P 540

With respect to the first step of this proposed methodology, we note that we are

proposing to use settled cost reports beginning in FY 2007 for hospitals participating in

the demonstration during FY 2007 because we believe that these settled cost reports

correspond most accurately to FY 2007 and becau se all such costs reports also began in

FY 2007. Therefore, we believe they correct ly represent FY 2007 inpatient costs for the

demonstration during that peri od. In addition, in the process of making adjustments

comparing the demonstration’s costs to the amounts estimated annually for the budget

neutrality offset over the demonstration’s en tire period of performance, the cost amounts

from these hospitals’ cost reports correspond mo st precisely to FY 2007. In addition, the

settlement process for the demonstration hospitals’ third year cost reports, that is, cost

reporting periods starting in FY 2007, has expe rienced a delay. Therefore, for this

FY 2011 IPPS proposed rule, we are unable to calculate the costs of the demonstration

corresponding to FY 2007 and as a result ar e unable to propose the specific numeric

adjustment that would be applied to the national IPPS rates. However, we expect cost

reports beginning in FY 2007 for hospitals that participated in the demonstration during

FY 2007 to be settled before the FY 2011 IPPS final rule is published. Therefore, for the

FY 2011 IPPS final rule, we will be able to calculate the amount by which the costs

corresponding to FY 2007 exceeded the am ount offset by the budget neutrality

adjustment for FY 2007.

V. Proposed Change s to the IPPS for Capital-Related Costs

On March 23, 2010, the Patient Protection and Affordab le Care Act (PPACA),

Pub. L. 111-148 was enacted. Following the enactment of Pub. L. 111-148, the HealthCMS-1498-P 541

Care and Education Reco nciliation Act of 2010, Public L. 111-152 (enacted on

March 30, 2010), amended certain provisions of Pub. L. 111-148. A number of the

provisions of Pub. L. 111-148, as amended by Pub. L. 111-152, affect the IPPS and the

LTCH PPS and the providers and suppliers addressed in this proposed rule. However,

due to the timing of the passage of the le gislation, we are unable to address those

provisions in this proposed rule. Therefore, the proposed policies and payment rates in

this proposed rule do not reflect the new le gislation. We plan to issue separate

rulemaking documents in the Federal Register addressing the provisions of

Pub. L. 111-148, as amended, that affect our pr oposed policies and payment rates for FY

2011 under the IPPS and LTCH PPS, as well as the provisions of Pub. L. 111-148, as

amended, that affect the policies and payment rates for FY 2010 under the IPPS and

LTCH PPS.CMS-1498-P 542

A. Overview

Section 1886(g) of the Act requires the Secretary to pay for the capital-related

costs of inpatient acute hospital services "in accordance with a prospective payment

system established by the Secretary." Under the statute, the Secretary has broad authority

in establishing and implementing the IPPS for acute care hospital inpatient capital-related

costs. We initially implemented the IPPS for capital-related costs in the Federal fiscal

year (FY) 1992 IPPS final rule (56 FR 43358), in which we established a 10-year

transition period to change the payment me thodology for Medicare hospital inpatient

capital-related costs from a reasonable cost-based methodology to a prospective

methodology (based fully on the Federal rate).

FY 2001 was the last year of the 10-year transition period established to phase in

the IPPS for hospital inpatient capital-related costs. For cost reporting periods beginning

in FY 2002, capital IPPS payments are based solely on the Federal rate for almost all

acute care hospitals (other than hospitals receiving certain exception payments and

certain new hospitals). (We refer readers to the FY 2002 IPPS final rule (66 FR 39910

through 39914) for additional information on the methodology used to determine capital

IPPS payments to hospitals both during and after the transition period.) The basic

methodology for determining capital prospectiv e payments using the Federal rate is set

forth in §412.312 of the regulations. For the purpose of calculating payments for each

discharge, currently the standard Federal rate is adjusted as follows:CMS-1498-P 543

(Standard Federal Rate) x (DRG Weig ht) x (Geographic Adjustment Factor

(GAF)) x (COLA for hospitals located in Alaska and Hawaii) x (1 + Capital DSH

Adjustment Factor + Capital IME Adjustment Factor, if applicable).

B. Exception Payments

The regulations at §412.348(f) provide that a hospital may request an additional

payment if the hospital incurs unanticipated capital expenditures in excess of $5 million

due to extraordinary circumstances beyond the hospital’s control. This policy was

originally established for hospitals durin g the 10-year transition period, but as we

discussed in the FY 2003 IPPS final rule (67 FR 50102), we revised the regulations at

§412.312 to specify that payments for extraordin ary circumstances are also made for cost

reporting periods after the transition period (t hat is, cost reporting periods beginning on

or after October 1, 2001). Additional information on the exception payment for

extraordinary circumstances in §412.348(f) can be found in the FY 2005 IPPS final rule

(69 FR 49185 and 49186).

During the transition period, under §§412.348(b) through (e), eligible hospitals

could receive regular exception payments. These exception payments guaranteed a

hospital a minimum payment percentage of its Medicare allowable capital-related costs

depending on the class of the hospital (§412.348( c)), but were available only during the

10-year transition period. After the end of the transition period, eligible hospitals can no

longer receive this exception payment. Howeve r, even after the transition period, eligible

hospitals receive additional payments unde r the special excepti ons provisions at

§412.348(g), which guarantees all eligible hosp itals a minimum payment of 70 percent ofCMS-1498-P 544

its Medicare allowable capital-related costs provided that special exceptions payments do

not exceed 10 percent of total capital IPPS payments. Special exceptions payments may

be made only for the 10 years from the co st reporting year in which the hospital

completes its qualifying project, and the hospita l must have complete d the project no later

than the hospital’s cost reporting period be ginning before October 1, 2001. Thus, an

eligible hospital may receive special exceptions payments for up to 10 years beyond the

end of the capital IPPS transition period. Hospitals eligible for special exceptions

payments are required to submit documentation to the fiscal intermediary or MAC

indicating the completion date of their project . (For more detailed information regarding

the special exceptions policy under §412.348(g), we refer readers to the FY 2002 IPPS

final rule (66 FR 39911 through 39914) and the FY 2003 IPPS final rule (67 FR 50102).)

C. New Hospitals

Under the IPPS for capital-related costs, §412.300(b) of the regulations defines a

new hospital as a hospital that has operated (under current or previous ownership) for less

than 2 years. For example, the following hospitals are not considered new hospitals:

(1) a hospital that builds new or replacemen t facilities at the same or another location,

even if coincidental with a change of ownership, a change in management, or a lease

arrangement; (2) a hospital that closes and s ubsequently reopens; (3) a hospital that has

been in operation for more than 2 years but has participated in the Medicare program for

less than 2 years; and (4) a hospital that chan ges its status from a hospital that is excluded

from the IPPS to a hospital that is subject to the capital IPPS. For more detailed

information, we refer readers to the FY 1992 IPPS final rule (56 FR 43418). During theCMS-1498-P 545

10-year transition period, a new hospital was exempt from the capital IPPS for its first

2 years of operation and was paid 85 percent of its reasona ble costs during that period.

Originally, this provision was effective only through the transition period and, therefore,

ended with cost reporting periods beginning in FY 2002. Because, as discussed in the

FY 2003 IPPS final rule (67 FR 50101), we believe that special protection to new

hospitals is also appr opriate even after the transition pe riod, we revised the regulations at

§412.304(c)(2) to provide that, for cost reporting periods beginning on or after

October 1, 2002, a new hospital (defined unde r §412.300(b)) is paid 85 percent of its

Medicare allowable capital-related costs through its first 2 years of operation, unless the

new hospital elects to receive full prosp ective payment based on 100 percent of the

Federal rate. (We refer readers to the FY 2003 IPPS final rule (67 FR 50101 through

50102) for a detailed discussion of the speci al payment provisions for new hospitals

under the capital IPPS after the 10-year transition period.)

D. Hospitals Located in Puerto Rico

Section 412.374 of the regulations provide s for the use of a blended payment

amount for prospective payments for capital-re lated costs to hospitals located in Puerto

Rico. Accordingly, under the capital IPPS, we compute a separate payment rate specific

to Puerto Rico hospitals using the same methodology used to compute the national

Federal rate for capital-related costs. In general, hospitals located in Puerto Rico are paid

a blend of the applicable capital IPPS Puerto Rico rate and the applicable capital IPPS

Federal rate.CMS-1498-P 546

Prior to FY 1998, hospitals in Puerto Rico were paid a blended capital IPPS rate

that consisted of 75 percent of the capital IPPS Puerto Rico specific rate and 25 percent

of the capital IPPS Federal rate. However, effective October 1, 1997 (FY 1998), in

conjunction with the change to the operating IPPS blend percentage for hospitals located

in Puerto Rico required by section 4406 of Pub. L. 105-33, we revised the methodology

for computing capital IPPS payments to hospitals in Puerto Rico to be based on a blend

of 50 percent of the capital IPPS Puerto Rico rate and 50 percent of the capital IPPS

Federal rate. Similarly, in conjunction with the change in operating IPPS payments to

hospitals located in Puerto Rico for FY 2005 required by section 504 of Pub. L. 108-173,

we again revised the methodology for computing capital IPPS payments to hospitals

located in Puerto Rico to be based on a ble nd of 25 percent of the capital IPPS Puerto

Rico rate and 75 percent of the capital IPPS Federal rate effective for discharges

occurring on or after October 1, 2004.

E. Proposed Changes for FY 2011: MS-DRG Documentation and Coding

Adjustment

1. Background on the Prospective MS-DRG Do cumentation and Coding Adjustments for

FY 2008 and FY 2009

In the FY 2008 IPPS final rule with comment period (72 FR 47175 through

47186), we adopted the MS-DRG patient classification system for the IPPS, effective

October 1, 2007, to better recogn ize patients’ severity of illness in Medicare payment

rates. Adoption of the MS-D RGs resulted in the expansion of the number of DRGs from

538 in FY 2007 to 745 in FY 2008. (Currently, there are 746 MS-DRGs, including oneCMS-1498-P 547

additional MS-DRG created in FY 2009. Fo r FY 2011, there would be 747 DRGs with

our proposals in this proposed rule to de lete one MS- DRG and to create two new

MS-DRGs.) By increasing the number of DR Gs and more fully taking into account

patients’ severity of illness in Medicar e payment rates, the MS-DRGs encourage

hospitals to change their docum entation and coding of patient diagnoses. In that same

final rule with comment peri od (72 FR 47183), we indicated that we believe the adoption

of the MS-DRGs had the potential to lead to increases in aggregate payments without a

corresponding increase in actual patient severi ty of illness due to the incentives for

changes in documentation and coding. Accord ingly, we established adjustments to both

the national operating standardized amount and the national capita l Federal rate to

eliminate the estimated effect of changes in documentation and coding resulting from the

adoption of the MS-DRGs that do not reflect r eal changes in case-mix. Specifically, we

established prospective docu mentation and coding adjus tments of -1.2 percent for

FY 2008, -1.8 percent for FY 2009, and -1.8 percent for FY 2010. However, to comply

with section 7(a) of Pub. L. 110-90, enac ted on September 29, 2007, in a final rule

published in the Federal Register on November 27, 2007 (72 FR 66886 through 66888),

we modified the documentation and coding ad justment for FY 2008 to -0.6 percent, and

consequently revised the FY 2008 IPPS operating and capital payment rates, factors, and

thresholds accordingly, with thes e revisions effective October 1, 2007.

For FY 2009, section 7(a) of Pub. L. 110 -90 required a documen tation and coding

adjustment of -0.9 percent instead of the -1.8 percent adjustment established in the

FY 2008 IPPS final rule with comment period. As discussed in the FY 2008 IPPS finalCMS-1498-P 548

rule with comment period (72 FR 48447 and 48733 through 48774), we applied a

documentation and coding adjustment of -0.9 percent to the FY 2009 IPPS national

standardized amounts and the capital Federa l rate. The documentation and coding

adjustments established in the FY 2009 IPPS final rule, as amended by Pub. L. 110-90,

are cumulative. As a result, the -0.9 perc ent documentation and coding adjustment in

FY 2009 was in addition to the -0.6 percent adjustment in FY 2008, yielding a combined

effect of -1.5 percent. (For additional details on the development and imp lementation of

the documentation and coding adjustments fo r FY 2008 and FY 2009, we refer readers to

section II.D. of this preamble and the following rules published in the Federal Register :

August 22, 2007 (72 FR 47175 through 47186 and 47431 through 47432);

November 27, 2007 (72 FR 66886 through 66888); and August 19, 2008 (73 FR 48447

through 48450 and 48773 through 48775).)

2. Retrospective Evaluati on of FY 2008 Claims Data

In the FY 2010 IPPS/RY 2010 LTCH PPS proposed rule, we presented the results

of a retrospective evaluation of the FY 2008 data for claims paid through

December 2008. Based on this evaluation, our ac tuaries determined that implementation

of the MS-DRG system resulted in a 2.5 per cent change due to doc umentation and coding

that did not reflect real changes in case- mix for discharges occurring during FY 2008

(74 FR 24092 through 24101). We also soug ht public comment on our methodology and

analysis and the proposed -1.9 percent prospec tive adjustment to address the effect of

documentation and coding changes unrelated to changes in real case-mix in FY 2008

(that is, the estimated -2.5 percent document ation and coding effect for FY 2008 minusCMS-1498-P 549

the -0.6 percent documentation and coding adju stment that was app lied to the national

capital Federal rate for FY 2008) . In addition, we sought public comment on addressing

in the FY 2011 rulemaking cycle any differences between the increase in FY 2009

case-mix due to documentation and coding chan ges that do not reflect real changes in

case-mix for discharges occurring during FY 2009 and the -0.9 percent prospective

documentation and coding adju stment applied in determin ing the FY 2009 capital Federal

rate established in the FY 2009 IPPS final rule. However, after consideration of the

public comments received on the FY 2010 IPPS/RY 2010 LTCH PPS proposed rule,

consistent with the application of the doc umentation and coding adjustment to the

operating IPPS standardized amounts, we determined that it would be appropriate to

postpone the adoption of any additional docum entation and coding adjustments to the

capital IPPS rates until a full analysis of FY 2009 case-mix changes could be completed.

We stated that although we only proposed to make a -1.9 percent adjustment to account

for the portion of the estimated 2.5 percen t change in FY 2008 case-mix due to

documentation and coding changes that exceeds the -0.6 percent prospective

documentation and coding adjus tment applied to the FY 2008 cap ital Federal rate (that is,

-2.5 percent minus -0.6 percent = -1.9 percent) , our then current estimate of the MS-DRG

documentation and coding effect for FY 2009 was 2.3 percent (that is, the 4.8 percent

total increase minus the 2.5 percent increase from FY 2008). We indicated that if the

estimated documentation and coding effect determined based on a full analysis of

FY 2009 claims data is more or less than our then current estimates, it would change the

anticipated cumulative adjustments that we then estimated we would have to make forCMS-1498-P 550

FY 2008 and FY 2009 combined. We indicated that, in future rulemaking, we would

consider applying a prospective documentation and coding adjustment to the capital IPPS

rates based on a complete analysis of FY 2008 and FY 2009 claims data (74 FR 43926

through 43928).

3. Retrospective Analysis of FY 2009 Claims Data

For this proposed rule, we have performed a thorough retrospective evaluation of

the most recent available claims data, and the results of this evaluation were used by our

actuaries to determine any necessary payment adjustments beyond the cumulative

-1.5 percent adjustment that has already been applied to the nationa l capital Federal rate

to ensure budget neutrality for the implementation of MS-DRGs. Specifically, as

discussed in greater detail in section II.D .5. of the preamble of this proposed rule, we

performed a retrospective evaluation of the FY 2009 claims data updated through

December 2009 using the same analysis methodo logy as we did for FY 2008 claims in

the FY 2010 IPPS/RY 2010 LTCH PPS proposed and final rules. Based on this

evaluation, our actuaries have determined that the imple mentation of the MS-DRG

system resulted in a 5.4 percent change in cas e-mix due to documentation and coding that

did not reflect real changes in case-mix for discharges occurring during FY 2009.

The 5.4 percent estimate of the cumulative effect of changes in documentation

and coding under the MS-DRG system that did not reflect real changes in case-mix for

FYs 2008 and 2009 exceeds the cumulative -1.5 pe rcent prospective documentation and

coding adjustment that has already been applied to the national capital Federal rate by

3.9 percentage points (5.4 percent minus 1.5 percent). An additional cumulativeCMS-1498-P 551

adjustment of -3.9 percent to the national capital Federal rate w ould be necessary to

eliminate the full effect of the documentation and coding changes due to the adoption of

the MS-DRGs on future payments. We intend to update our analysis with FY 2009 data

on claims paid through March 2009 for the FY 2011 IPPS/LTCH PPS final rule.

4. Proposed Prospective MS-DRG Document ation and Coding Adjustment to the

National Capital Federa l Rate for FY 2011 a nd Subsequent Years

We continue to believe that it is appropriate to make adjustments to the capital

IPPS rates to eliminate the effect of any documentation and coding changes as a result of

the implementation of the MS-DRGs. These adjustments are intended to ensure that

future annual aggregate IPPS payments are the same as payments that otherwise would

have been made had the prospective adjustme nts for documentation and coding applied in

FY 2008 and FY 2009 accurately reflected the change due to documentation and coding

that occurred in those years. As noted in section V.A. of this preamble, under section

1886(g) of the Act, the Secretary has broad authority in establishing and implementing

the IPPS for acute care hospital inpatient capital-related costs (that is, the capital IPPS).

We have consistently stated since the initial implementation of the MS-DRG system that

we do not believe it is appropriate for Medicare expenditures under the capital IPPS to

increase due to MS-DRG related changes in documentation and coding. Accordingly, we

believe that it is a ppropriate under the Secretary’s br oad authority under section 1886(g)

of the Act, in conjunction with section 1886(d)(3)(A)(vi) of the Act and section 7(b) of

Pub. L. 110-90, to make adjustments to the capita l Federal rate to eliminate the full effect

of the documentation and coding changes re sulting from the adoption of the MS-DRGs.CMS-1498-P 552

We believe that this is appropr iate because, in absence of such adjustments, the effect of

the documentation and coding changes resu lting from the adoption of the MS-DRGs

results in inappropriate ly high capital IPPS payments because that portion of the increase

in aggregate payments is not due to an increase in patient severity of illness (and costs).

As discussed in greater detail in section II.D.7. of this preamble, we explain that

we are proposing a -2.9 percent adjustment for FY 2011 under the authority of section

7(b)(1)(B) of Pub. L. 110-90. We refer read ers to that section of the preamble for a

detailed discussion of the issue. In section II.D.6. of this preamble, we also discuss our

retrospective evaluation of the FY 2009 cla ims, and our actuaries’ determination that

implementation of the MS-DRG system resulte d in a 5.4 percent change in case-mix due

to documentation and coding that did not refl ect real changes in case-mix for discharges

occurring during FY 2009. The estimated 5.4 percent cumulative documentation and

coding effect for FYs 2008 and 2009 exceeds the cumulative -1.5 percent prospective

documentation and coding adjus tment that has already been applied to the national capital

Federal rate. Thus, an additional cumula tive adjustment of -3.9 percent would be

necessary to meet the requirements of sec tion 7(b)(1)(A) of Pub. L. 110-90 to make an

appropriate prospective adjustment to the IPPS operating average standardized amounts

in order to eliminate the full effect of the documentation and coding changes on future

payments. However, we are not proposing a prospective adjustment to the IPPS

operating average standardized amounts under section 7(b)(1)(A) of Pub. L. 110-90 for

FY 2011.CMS-1498-P 553

As discussed above in this section, given the increase in payments that we have

determined is due to docum entation and coding, we be lieve it is necessary and

appropriate under the Secretar y’s broad authority under sec tion 1886(g) of the Act, in

conjunction with section 1886(d)(3)(A)(vi) of the Act and section 7(b) of Pub. L. 110-90,

to make further adjustments to the capital Federal rate to eliminate the full effect of the

documentation and coding changes resultin g from the adoption of the MS-DRGs.

It is often our practice to phase in rate adjustments over more than one year in

order to moderate the effect on rates in an y one year. Therefore, consistently with

transitional policies we have adopted in many similar cas es and in order to maintain

consistency as far as possible with the adjustments that we are proposing to apply to IPPS

hospitals, we are proposing an adjustment of -2.9 percent in FY 2011 to the national

capital Federal rate. We believe that this proposed adjus tment allows us to moderate the

effects to hospitals in one year and to mainta in equity between hospitals paid on the basis

of different prospective rates. We ar e seeking public comment on the proposed

-2.9 percent prospective adjustment to the national capital Federal rate for FY 2011 and

our plans to address in future rulemaking cycles the cumulative effect of changes in

case-mix due to changes in documentation and co ding that do not reflect real changes in

case-mix for discharges occurring during FY 2008 and FY 2009, noting that our current

estimates of the remaining adjustment to the na tional capital Federal rate is -1.0 percent.

We intend to update our analysis with FY 2009 data on claim paid through March 2009

for the FY 2011 IPPS/LTCH PPS final rule.CMS-1498-P 554

Therefore, in this proposed rule, under the Secretary’s broad authority under

section 1886(g) of the Act, in conjunction w ith section 1886(d)(3)(A)(vi) of the Act and

section 7(b) of Pub. L. 110-90, we are propos ing to reduce the capital Federal rate in

FY 2011 by -2.9 percent to account for the cumulative effect of the estimated changes in

documentation and coding changes under the MS-DRG system in FYs 2008 and 2009

that did not reflect real changes in case-mix. Furthermore, consistent with our proposal

for the hospital-specific rates under the operating IPPS, we are proposing to leave that

proposed -2.9 percent adjustment in place for s ubsequent fiscal years to account for the

effect in FY 2011 and subsequent years. As noted above, we intend to address in future

rulemaking cycles the remaining estimated adjustment to the national capital Federal rate

of -1.0 percent (that is, the estimated cumula tive effect of docume ntation and coding

changes under the MS-DRG system for FYs 2008 and 2009 of -5.4 percent minus the

existing -0.6 percent and -0.9 adjustments and the proposed FY 2011 of -2.9 percent

adjustment).

5. Proposed Documentation and Coding Adjus tment to the Puerto Rico-Specific Capital

Rate

Under §412.74, Puerto Rico hospitals are currently paid based on 75 percent of

the national capital Federal rate and 25 percent of the Puerto Rico-specific capital rate. In

the FY 2009 IPPS final rule (73 FR 48775), c onsistent with our development of the

FY 2009 Puerto Rico-specific operating stan dardized amount, we did not apply the

additional -0.9 percent docu mentation and coding adju stment (or the cumulative

-1.5 percent adjustment) to the FY 2009 Puerto Rico-specific capital rate. However, theCMS-1498-P 555

statute gives broad authority to the Secretary under section 1886(g) of the Act, with

respect to the development of and adjustments to a capital PPS, and therefore we would

not be outside the authority of section 1886(g) of the Act in applying the documentation

and coding adjustment to the Puerto Rico-sp ecific portion of the capital payment rate. To

date, we had not applied a documentation and coding adjustment to the Puerto

Rico-specific capital rate because we have hi storically made changes to the capital IPPS

consistent with those changes made to the operating IPPS. We stated that we may

propose to apply such an adjustment to th e Puerto Rico capital rates in the future.

As discussed in the FY 2010 IPPS/RY 2010 LTCH PPS final rule (74 FR 43928),

when we performed a retrospective evaluati on of the FY 2008 claims data of hospitals

located in Puerto Rico using the same me thodology discussed above, we found that the

change in case-mix due to documentation and co ding that did not reflect real changes in

case-mix for discharges occurring during FY 2008 from hospitals located in Puerto Rico

was approximately 1.3 percent. Given this case-mix increase due to changes in

documentation and coding under the MS-DRGs, we had proposed to adjust the Puerto

Rico-specific capital rate by –1.3 percent in FY 2010 for the FY 2008 increase in casemix due to changes in documentation and codi ng under the MS-DRGs. However, in that

same final rule, postponed the adoption of an y documentation and coding adjustments to

the capital IPPS rates until a full analysis of FY 2009 case-mix changes could be

completed. We indicated that any future do cumentation and coding adjustment to the

capital Puerto Rico-specific IPPS rates based on a complete analysis of FY 2008 andCMS-1498-P 556

FY 2009 claims data for Puerto Rico hospita ls would be established through the notice

and comment rulemaking process.

As discussed in section II.D.9. of th is preamble, when we performed a

retrospective evaluation of the FY 2009 claims data of hospitals located in Puerto Rico

using the same methodology di scussed above, we found that the change in case-mix due

to documentation and coding that did not refl ect real changes in case-mix for discharges

occurring during FY 2008 from hospitals locat ed in Puerto Rico was approximately

2.4 percent. Given this case-mix increase due to changes in doc umentation and coding

under the MS-DRGs, consistent with our propos al to adjust the FY 2011 capital Federal

rate presented above and cons istent with our proposed adjustment to the FY 2011 Puerto

Rico-specific standard ized amount discussed in section II.D.9. of the preamble of this

proposed rule, under the Secretary’s broad au thority under section 1886(g) of the Act, we

are proposing to adjust the Puerto Rico-sp ecific capital rate by –2.4 percent in FY 2011

for the cumulative increase in case-mix due to changes in documentation and coding

under the MS-DRGs for FYs 2008 and 2009. In addition, consistent with our other

proposals concerning prospective MS-DRG doc umentation and coding adjustments to the

capital Federal rate and operating IPPS standardized amounts presented in this proposed

rule, we are proposing to leave that pr oposed –2.4 percent adjustment in place for

subsequent fiscal years in order to ensure that changes in documentation and coding

resulting from the adoption of the MS-DRGs do not lead to an increase in aggregate

payments not reflective of an increase in real case-mix. We are proposing that the

proposed -2.4 percent document ation and coding adjustment would be applied to theCMS-1498-P 557

capital Puerto Rico-specific rate that account s for 25 percent of payments to hospitals

located in Puerto Rico, with the remain ing 75 percent based on the proposed national

capital Federal rate, wh ich we are proposing to adjust for documentation and coding as

described above. Consequently, the proposed overall reduction to the FY 2011 payment

rates for hospitals located in Puerto Rico to account for documentation and coding

changes would be slightly less than the reduction for IPPS hospitals paid based on

100 percent of the national capita l Federal rate. As noted a bove, the Puerto Rico-specific

capital rate was not adjusted for the cumu lative effects of documentation and coding

changes in FY 2008 or FY 2009 as is the cas e with the national capital Federal rate.

F. Other Proposed Changes for FY 2011

The proposed annual update to the capital IPPS national and Puerto Rico-specific

rates, as provided for at §412.308(c), for FY 2011 is discussed in section III. of the

Addendum to this proposed rule.

VI. Proposed Changes for Hosp itals Excluded from the IPPS

A. Excluded Hospitals

Historically, hospitals and hospital un its excluded from the prospective payment

system received payment for inpatient hospita l services they furnished on the basis of

reasonable costs, subject to a rate-of-increase ceiling. A per discharge limit (the target

amount as defined in §413.40(a)) was set for each hospital or hospital unit based on the

hospital’s own cost experience in its base year, and updated annually by a rate-ofincrease percentage. The updated target amount was multiplied by total Medicare

discharges during that period and applied as an aggregate upper limit (the ceiling asCMS-1498-P 558

defined in §413.40(a)) on total inpatient operating costs for a hospital’s cost reporting

period. Prior to October 1, 1997, these paymen t provisions applied c onsistently to all

categories of excluded providers, which included rehabilitation hospitals and units (now

referred to as IRFs), psychiatric hospitals a nd units (now referred to as IPFs), LTCHs,

children’s hospitals, and cancer hospitals.

Payment to children’s hospitals and cancer hospitals that are excluded from the

IPPS continues to be subject to the rate-of-increase ceiling based on the hospital’s own

historical cost experien ce. (We note that, in accordance with §403.752(a) of the

regulations, RNHCIs are also subject to the rate-of-in crease limits es tablished under

§413.40 of the regulations.)

For FY 2011, we are proposing that the rate -of-increase percentage to be applied

to the target amount for cancer and child ren's hospitals and RNHCIs would be the

proposed FY 2011 percentage increase in the IPPS operating market basket. Beginning

with FY 2006, we have used the percentage increase in the IPPS operating market basket

to update the target amounts for children’s a nd cancer hospitals. As explained in the

FY 2006 IPPS final rule (70 FR 47396 through 47398), with IRFs, IPFs, and LTCHs

being paid under their own PPS, the remaining number of providers being paid based on

reasonable cost subject to a ceiling (that is, children’s and cancer hospitals and RNHCIs)

is too small and the cost report data are too limited to be able to create a market basket

solely for these hospitals. We are proposing to continue to use the IPPS market basket to

update the target amounts for children’s and ca ncer hospitals and RNHCIs for the reasons

discussed in the FY 2006 IPPS final rule.CMS-1498-P 559

We are proposing to use the revised and rebased FY 2006-based IPPS operating

market baskets to update the target amount s for children’s and cancer hospitals and

RNHCIs for FY 2011. Based on IHS Global Insight, Inc.'s 2010 first quarter forecast,

with historical data through the 2009 fourth quarter, we are estimating that the FY 2011

update to the IPPS operating market basket would be 2.4 percent (that is, the current

estimate of the market basket rate-of-increase).

We calculated the proposed rate-of-increase in the IPPS operating market basket

for FY 2011 using the most recent data available. However, if data that are more recent

become available for the final rule, we will use them to calculate the IPPS operating

market basket update for FY 2011. Therefore, consistent with our proposal that the

rate-of-increase percentage for cancer and ch ildren's hospitals and RNHCIs would be the

proposed percentage increase in the FY 2011 IPPS operating market basket, the proposed

FY 2011 rate-of-increase percentage that would be applied to FY 2010 target amounts in

order to calculate the FY 2011 target amount s for cancer and children's hospitals and

RNHCIs would be 2.4 percent, in accordance with the applicable regulations in 42 CFR

413.40.

We note that IRFs, IPFs, and LTCHs, which were paid previously under the

reasonable cost methodology, now receive pa yment under their own prospective payment

systems, in accordance with changes made to the statute. In general, the prospective

payment systems for IRFs, IPFs, and LTCHs provided transition periods of varying

lengths during which time a portion of the pr ospective payment was based on cost-based

reimbursement rules under Pa rt 413. (However, certain providers do not receive aCMS-1498-P 560

transition period or may elect to bypass the transition period as applicable under

42 CFR Part 412, Subparts N, O, and P.) We note that the various transition periods

provided for under the IRF PPS, the IPF PPS, and the LTCH PPS have ended.

The IRF PPS, the IPF PPS, and the LTCH PPS are updated annually. We refer

readers to section IV. of the Addendum to this proposed rule for the specific proposed

update changes to the Federal payment rates for LTCHs under the LTCH PPS for

RY 2011. The annual updates for the IRF PPS and the IPF PPS are issued by the agency

in separate Federal Register documents.

B. Critical Access Hospitals (CAHs)

1. Background

Section 1820 of the Act provides for the establishment of Medicare Rural

Hospital Flexibility Programs (MRHFPs) unde r which individual States may designate

certain facilities as critical access hospitals (CAHs). Facilities that are so designated and

that meet the CAH conditions of participa tion under 42 CFR Part 485, Subpart F, will be

certified as CAHs by CMS. Regulations governing payments to CAHs for services to

Medicare beneficiaries are located in 42 CFR Part 413.

2. CAH Optional Method Election for Payment of Outpatient Services

Section 1834(g) of the Act establishes th e payment rules for outpatient services

furnished by a CAH. Section 403(d) of Pub. L. 106-113 (BBRA) amended section

1834(g) of the Act to provide for two met hods of payment for outpatient services

furnished by a CAH. Specifically, secti on 1834(g)(1) of the Act, as amended by

Pub. L. 106-113, provided that the amount of pa yment for outpatient services furnishedCMS-1498-P 561

by a CAH is equal to the reasonable cost of providing such services, unless the CAH

made an election, under section 1834(g)(2) of th e Act, to receive amounts that were equal

to the reasonable cost of the CAH for fac ility services plus, with respect to the

professional services, the am ount otherwise paid for pr ofessional services under

Medicare, less the applicable Medicare deduc tible and coinsurance amount. The election

made under section 1834(g)(2) of the Act is sometimes referred to as "method II."

Throughout this section of this preamble, we refer to this election as the "optional

method." Section 202 of Pub. L. 106-554 (BIP A) amended section 1834(g)(2)(B) of the

Act to increase the payment for professi onal services under the optional method to

115 percent of the amount otherwise paid for professional services under Medicare. In

addition, section 405(a)(1) of Pub. L. 108-173 (MMA) amended section 1834(g)(l) of the

Act by inserting the phrase "equal to 101 per cent of" before the phrase “the reasonable

costs.” However, the MMA made no changes to the amount of payment under the

optional method at section 1834(g)(2)(A) of th e Act. As stated earlier, the proposed

policies and payment rates in this proposed rule do not reflect the provisions of the

recently enacted Pub. L. 111-148, as amended by Pub. L. 111-152. We plan to address

the provisions of Pub. L. 111-148, as amended, as they affect payments to CAHs in

separate documents in the Federal Register or through further instructions.

Accordingly, section 1834(g) of the Ac t currently provides for two methods of

payment for outpatient CAH services. Unde r the method specified at section 1834(g)(1)

of the Act, facility services are paid at 101 percent of reasonable costs to the CAH

through the Medicare fiscal intermediary or the Medicare Part A/B MAC, whileCMS-1498-P 562

payments for physician and other professional services are made to the physician or other

practitioner under the Medicare Physician Fee Schedule (MPFS) through the Medicare

carriers. Under section 1834(g)(2) of the Ac t (the optional method), a CAH submits bills

for both the facility and the professional services to its Medicare fiscal intermediary or its

Medicare Part A/B MAC. If a CAH chooses this optional method for outpatient services,

the physician or other practitioner must reassign his or her billing rights to the CAH to

bill the Medicare program for those services. In accordance with section 1834(g)(2) of

the Act, under this optional method, the CAH receives reasonable cost payment for its

facility costs and, with respect to the prof essional services, 115 percent of the amount

otherwise paid for professional services under Medicare.

The existing regulations at §413.70(b)(3)(i )(A) require that if a CAH wishes to

elect the optional method, that election must be made in writing, made on an annual

basis, and delivered to the fiscal intermediary servicing the CAH at least 30 days before

the start of the cost reporting period for whic h the election is made. The regulations at

§413.70(b)(3)(i)(B) specify that once an election is made for a cost reporting period, that

election remains in effect for all of that pe riod. Therefore, under the existing regulations,

a CAH that is being paid under the optional method is required to submit an election on

an annual basis if it wishes to continue to be paid unde r the optional method for a

subsequent cost reporting period.

We have been informed that, in past years, some CAHs have submitted their

elections several days late, which has caused these CAHs to lose their optional method

election for the entire cost reporting year and has resulted in financial hardship for theseCMS-1498-P 563

providers. Such untimely submission of th e optional method election may be due to

staffing turnovers at the CAH as well as a change in fiscal intermediary or MAC

assignments because, in the past, some CAHs received correspondenc e from their fiscal

intermediaries or MACs reminding them to elect the optional method on an annual basis.

Due to the significant consequences if a CAH fails to make a timely election, we are

proposing to amend the regulations at §413.70(b) (3)(i) to state that , effective for CAH

cost reporting periods beginning on or afte r October 1, 2010, if a CAH has elected the

optional method for its most recent cost reporting period beginning prior to

October 1, 2010 or chooses to elect the opti onal method for its upcoming cost reporting

period, that election will remain in place until it is terminated.

We believe that removi ng the annual election re quirement will reduce any

perceived burden associated with the electi on process and make it easier for CAHs to

maintain their election if they experience administrative staffing changes. If a CAH is

being paid under the traditional method and wi shes to elect the optional method, it must

submit its election in writing to its servicing fiscal intermediary or MAC at least 30 days

prior to the first cost reporting period for which the election is effective. Once that initial

election is made, it w ill remain in place until it is terminated.

We are proposing to revise the regulations to include a mechanism for CAHs that

are being paid under the optional method to te rminate that election. Specifically, we are

proposing that if a CAH is being paid under the optional method and wishes to terminate

that election, it must submit its termination re quest to the fiscal intermediary or MAC

servicing the CAH at least 30 days prior to the start of the next cost reporting period.CMS-1498-P 564

Because the proposed effective date for th is provision is for cost reporting periods

beginning on or after October 1, 2010, CAHs th at have cost reporting periods beginning

in October 2010 or November 2010 may not ha ve sufficient time to terminate their

optional method election at least 30 days prior to the start of the cost reporting period.

Therefore, we are proposing that CAHs that have cost reporting periods beginning in

October 2010 or November 2010 and elected th e optional method in 2009 that wish to

terminate that election will have until Decem ber 1, 2010, to terminate their prior year

election. The termination will be effective for the entire FY 2011 cost reporting period.

Thus, if a CAH with a cost reporting peri od beginning in October 2010 or November

2010 terminates its optional method election af ter the beginning of its cost reporting

period but before December 1, 2010, the fiscal in termediary or MAC would be instructed

to reprocess any payments made under the op tional method for services provided during

that period as efficiently as possible.

Section 1834(g)(2)(B) of the Act provi des that if a CAH elects the optional

method, it is not required that each physician or other practitioner pr oviding professional

services in the CAH must reassign billing rights with respect to the services. Rather, the

reassignment of billing rights is physicia n/practitioner specific. For this reason, the

optional payment method should not apply to the computation of payments to the CAH

for its facility services in conjunction with services furnished by physicians and

practitioners who have not reassigned such billing rights. Accordingly, if a physician or

practitioner has not reassigned his or her billing rights to the CAH, the CAH will be paid

for its facility services at 101 percent of re asonable cost, as specified at §413.70(b)(2)(i)CMS-1498-P 565

of the regulations. If a CAH experiences chan ges in its physician or practitioner staffing,

there may be a change in which physicians or practitioners choose to reassign their billing

rights in order to permit the CAH to bill for their professional services. In order to ensure

appropriate payments, and specifically, in order to ensure that there is no duplicate billing

for a physician’s or practitioner’s professi onal services by the CAH to the fiscal

intermediary or MAC and by the physician or practitioner providing the service to the

carrier, a CAH must continue to notify its fi scal intermediary or MAC when changes in

reassignment occur.

In summary, we are proposing to revise §413.70(b)(3)(i) to specify, under

paragraphs (A)( 1 ) and (A)( 2 ), that for CAH cost reporting periods beginning on or after

October 1, 2010, once a CAH elects the optional method, including an election made for

its most recent cost reporting period beginni ng prior to October 1, 2010, its election will

remain in place until it is terminated. That is, CAHs would no longer be required to

make an annual election in or der to continue to be paid under the optional method in a

subsequent year. If a CAH has not elected the optional method for its most recent cost

reporting period beginning prior to Octobe r 1, 2010, and would like to be paid for

outpatient services under the optional method for a cost reporting period beginning on or

after October 1, 2010, consistent with our exis ting regulations, it would be required to

provide its election in writing to its servicing fiscal intermediary or MAC at least 30 days

prior to the start of the first cost reporting period for which the election is effective. In

addition, we are proposing to revise the regula tions to specify that if a CAH wishes to

terminate its optional method election, it must su bmit its termination request to the fiscalCMS-1498-P 566

intermediary or MAC servicing the CAH at least 30 days prior to the start of the next cost

reporting period. We are proposing that CAHs th at have cost reporting periods beginning

in October 2010 or November 2010 and elected the optional method in 2009, that wish to

terminate that election, will have until Decem ber 1, 2010, to terminate their prior year

election. The termination would be eff ective for the entire FY 2011 cost reporting

period. We also are proposing to make a c onforming change to paragraph (b)(3)(i)(D).

3. Costs of Provider Taxes as Allowable Costs for CAHs

a. Background and Statutory Basis

Currently, certain taxes assessed against a provider may be allowable costs under

Medicare to the extent that such taxes are related to the reasonable and necessary cost of

providing patient care and represent co sts actually incurred. Reasonable cost

reimbursement is addr essed in section 1861(v)(1)(A) of the Act. Section 1861(v)(1)(A)

of the Act defines “reasonable cost,” in part , as the cost actually incurred, excluding costs

found to be unnecessary in the efficient deliv ery of needed health services and are

determined in accordance with regulations es tablishing the method or methods to be used

and the items to be included. Section 1861( v)(1)(A) of the Act does not specifically

address the determination of r easonable costs, but authorizes the Secretary to promulgate

regulations and principles to be app lied in determining reasonable costs.

We have issued regulations implementin g this provision of the Act, including

42 CFR 413.9(a) which provide that the determin ation of reasonable co st “must be based

on the reasonable cost of services covere d under Medicare and related to the care of

beneficiaries.” In addition, §413.9(c) requi res that the provision for payment ofCMS-1498-P 567

reasonable cost of services is intended to meet the actual costs incurred in providing

services. Therefore, in accordance with the statute, the regulations include two principles

that help guide the determination of whic h expenses may be considered allowable

reasonable costs that can be paid under Medicare; that is, such costs must be “related” to

the care of Medicare beneficiaries, and such costs must actually be “incurred.”

Consistent with these provisions, we also have issued policy instructions in the

Provider Reimbursement Manual (PRM) for determining allowable reasonable costs

under Medicare. Specifically, section 2122 of the PRM sets forth Medicare policy on

determining when taxes levied on providers are allowable costs and provides a list of

taxes that are considered unallowable costs. Specifically, section 2122.1 (General Rule)

of the PRM states: “The general rule is that taxes assessed against the provider, in

accordance with the levying enactments of the several States and lower levels of

government and for which the provider is liabl e for payment, are allowable costs. Tax

expenses should not include fines and pena lties.” Section 2122.2 (Taxes Not Allowable

as Costs) of the PRM lists certain taxes that are levied on providers that are not allowable

costs. The listed taxes are:

● Federal income and excess profit taxes, including any interest or penalties paid

thereon (A).

● State or local income and excess profit taxes (B).

● Taxes in connection with financing, re financing, or refunding operations, such

as taxes on the issuance of bonds, property transf ers, issuance or transfer of stocks, etc.CMS-1498-P 568

Generally, these costs are either amortized over the life of the securities or depreciated

over the life of the asset. They are not, however, recognized as tax expense. (C)

● Taxes from which exemptions ar e available to the provider. (D)

● Special assessments on land which re present capital improvements such as

sewers, water, and pavement s should be capitalized and de preciated over their estimated

useful lives. (E)

● Taxes on property which is not used in the rendition of covered services. (F)

● Taxes, such as sales taxes, levied against the patient and collected and remitted

by the provider. (G)

● Self-employment (FICA) taxes applicab le to individual pr oprietors, partners,

members of a joint venture, etc. (H)

b. Proposed Clarification of Pa yment Policy for Provider Taxes

We have learned that there is some c onfusion relating to the determination of

whether a tax is an allowable cost. We belie ve that much of this confusion has arisen

because it may be possible to read sec tions 2122.1 and 2122.2 of the PRM as permitting

all taxes assessed on a provider by a State th at are not specifically listed in section 2122.2

to be treated as allowable costs. Secti on 2122 of the PRM was last updated in 1979 when

States typically raised revenue only from income , sales, and property taxes. The list in

section 2212.2 is incomplete now, as it does not reflect the variety of provider taxes

imposed by States. In addition, we are concerne d that, even if a particular tax may be an

allowable cost that is related to the care of Medicare beneficiaries, providers may not, in

fact, “incur” the entire amount of these assessed taxes. For example, in accordance withCMS-1498-P 569

the Medicaid statute and regula tions, some States levy tax assessments on hospitals. The

assessed taxes may be paid by the hospitals into a fund that includes all taxes paid, all

Federal matching monies, and any penalties for nonpayment. The State is then

authorized to disburse monies from the fund to the hospitals. We believe that these types

of subsequent disbursements to providers are associated with the assessed taxes and may,

in fact, offset some, if not all, of the taxes originally paid by the hospitals.

We believe that the treatment of these types of payments on the Medicare cost

report should be analogous to the adjustme nts described at §413.98 of the regulations.

Specifically, §413.98(d) provides that the “true cost of the goods or services is the net

amount actually paid for them.” Section 413.98 specifically addresses the purchase of

goods and services and reflects the statutory mandate that a provider’s allowable costs are

the net expenses it incurs for items and services. In situations in which payments that are

associated with the assessed tax are made to providers specifically to make the provider

whole or partly whole for the tax expenses , Medicare should similarly recognize only the

net expense incurred by the provider. Thus, while a tax may be an allowable Medicare

cost in that it is related to beneficiary ca re, the provider may only treat as a reasonable

cost the net tax expense; that is, the tax pa id by the provider, reduced by payments the

provider received that are associated with the assesse d tax. In additi on, we do not believe

that determinations made regarding whet her the structure of specific taxes and

subsequent reimbursements ar e consistent with Medicaid “hold harmless” provisions

necessarily require the Medicare program to find that the same tax is an allowable cost.

The Medicare statute and regulations set fo rth a different standard that requires aCMS-1498-P 570

determination of how much of the allowable tax expense is actually “incurred” by the

provider.

In this proposed rule, we are proposing to clarify our policy concerning when

provider taxes may be considered allowabl e costs under Medicare. As stated above,

section 2122 of the PRM was lastupdated in 1979, and it no longer reflects the variety of

provider taxes that may be imposed by Stat es. Although some of the more recently

enacted provider taxes may be allowable costs, we are concerned that some of these taxes

may not be “related to the care of beneficiaries” and that some, if not all, of the costs of

these taxes might not be actually “incurred” by the providers. This payment policy may

not directly affect providers that are paid under a Medicare prospective payment system

unless a cost-based prospective payment sy stem is rebased on mo re current reported

reasonable costs. However, this policy clar ification could impact certain providers that

are paid on the basis of their incurred reasonable costs, such as CAHs.

Therefore, we are proposing to clarify the policy set forth in sections 2122.1 and

2122.2 of the PRM to reflect our concerns set forth above regarding when certain

provider taxes may be allowabl e costs under the Medicare program. We will modify the

PRM consistent with these principles. We believe that the proposed revision would

clarify that our Medicare contractors will dete rmine the allowability of provider taxes on

a case-by-case basis, based on reasonable cost principles, and will determine if a

reduction of the allowable tax expenses is proper to account for payments providers

receive that are associated with the assessed tax.CMS-1498-P 571

VII. Proposed Change s to the Long-Term Care Hospital Prospective

Payment System (LTCH PPS) for FY 2011

A. Background of the LTCH PPS

1. Legislative and Regulatory Authority

Section 123 of the Medicare, Medicaid, and SCHIP (State Children's Health

Insurance Program) Balanced Budg et Refinement Act of 1999 (BBRA)

(Pub. L. 106-113) as amended by section 307(b) of the Medicare, Medicaid, and SCHIP

Benefits Improvement and Protection Act of 2000 (BIPA) (Pub. L. 106-554) provides for

payment for both the operating and capital-rela ted costs of hospital inpatient stays in

long-term care hospitals (LTCHs) under Medi care Part A based on prospectively set

rates. The Medicare prospective payment system (PPS) for LTCHs applies to hospitals

that are described in section 1886(d)(1)(B)(iv) of the Social Security Act (the Act),

effective for cost reporting periods beginning on or after October 1, 2002.

Section 1886(d)(1)(B)(iv)(I) of the Act de fines a LTCH as "a hospital which has

an average inpatient length of stay (as determined by the Secretary) of greater than

25 days." Section 1886(d)(1)(B)(iv)(II) of th e Act also provides an alternative definition

of LTCHs: specifically, a hospital that fi rst received payment under section 1886(d) of

the Act in 1986 and has an average inpatient le ngth of stay (LOS) (as determined by the

Secretary of Health and Human Services (the Secretary)) of greater than 20 days and has

80 percent or more of its annua l Medicare inpatient discharges with a principal diagnosis

that reflects a finding of ne oplastic disease in the 12-mont h cost reporting period ending

in FY 1997.CMS-1498-P 572

Section 123 of the BBRA requires the PPS for LTCHs to be a "per discharge"

system with a diagnosis-related group (DRG) based patient classification system that

reflects the differences in patient resources and costs in LTCHs.

Section 307(b)(1) of the BIPA, among othe r things, mandates that the Secretary

shall examine, and may provide for, adjustments to payments under the LTCH PPS,

including adjustments to DRG weights, area wage adjustments, geographic

reclassification, outliers, upda tes, and a disproporti onate share adjustment.

In the August 30, 2002 Federal Register , we issued a final rule that implemented

the LTCH PPS authorized under the BBRA and BIPA (67 FR 55954). This system

currently uses information from LTCH patient records to classify patients into distinct

MS-long-term care diagnosis-related gr oups (MS-LTC-DRGs) based on clinical

characteristics and expected resource ne eds. Payments are calculated for each

MS-LTC-DRG and provisions are made for ap propriate payment adjustments. Payment

rates under the LTCH PPS are updated annually and published in the Federal Register

. The LTCH PPS replaced the reasonable cost -based payment system under the Tax

Equity and Fiscal Responsibility Act of 1982 (TEFRA) (Pub. L. 97-248) for payments for

inpatient services provided by a LTCH with a cost reporting period beginning on or after

October 1, 2002. (The regula tions implementing the TEFRA reasonable cost-based

payment provisions are located at 42 CFR Part 413.) With the implementation of the PPS

for acute care hospitals authorized by the Social Security Amendments of 1983

(Pub. L. 98-21), which added section 1886(d) to the Act, certain hospitals, including

LTCHs, were excluded from the PPS for acute care hospitals and were paid theirCMS-1498-P 573

reasonable costs for inpatient services subject to a per discharge limitation or target

amount under the TEFRA system. For each cost reporting period, a hospital-specific

ceiling on payments was determined by multip lying the hospital's updated target amount

by the number of total current year Medicare discharges. (Generally, in section VIII. of

this preamble, when we refer to discharges, the intent is to describe Medicare discharges.)

The August 30, 2002 final rule further details the payment policy under the TEFRA

system (67 FR 55954).

In the August 30, 2002 final rule, we provi ded for a 5-year transition period.

During this 5-year transition period, a LTCH's total payment under the PPS was based on

an increasing percentage of the Federal rate with a corresponding decrease in the

percentage of the LTCH PPS payment that is based on reasonable cost concepts.

However, effective for cost reporting periods beginning on or after October 1, 2006, total

LTCH PPS payments are based on 100 percent of the Federal rate.

In addition, in the August 30, 2002 final ru le, we presented an in-depth discussion

of the LTCH PPS, including the patient classification system, relative weights, payment

rates, additional payments, and the budget neutrality requirements mandated by section

123 of the BBRA. The same final rule that established regulations for the LTCH PPS

under 42 CFR Part 412, Subpart O also contai ned LTCH provisions related to covered

inpatient services, limitation on charges to beneficiaries, medical review requirements,

furnishing of inpatient hospital services di rectly or under arrangement, and reporting and

recordkeeping requirements. We refer read ers to the August 30, 2002 final rule for aCMS-1498-P 574

comprehensive discussion of the research and data that supported the establishment of the

LTCH PPS (67 FR 55954).

In the June 6, 2003 Federal Register , we published a final rule that set forth the

FY 2004 annual update of the payment rates for the Medicare PPS for inpatient hospital

services furnished by LTCHs (68 FR 34122). It also changed the annual period for which

the payment rates were to be effective, such that the annual updated rates were effective

from July 1 through June 30 instead of from October 1 through September 30. We

referred to the July through June time period as a "long-term care hospital rate year"

(LTCH PPS rate year). In addition, we changed the publication schedule for the annual

update to allow for an effective date of July 1. The payment amounts and factors used to

determine the annual update of the LTCH PPS Federal rate are based on a LTCH PPS

rate year. In the past, while the LTCH pa yment rate updates were effective July 1, the

annual update of the DRG classi fications and relative weights for LTCHs continued to be

linked to the annual adjustments of the acute care hospital inpatient DRGs and were

effective each October 1.

As discussed in detail in section VIII.A.1. of the May 9, 2008 RY 2009 LTCH

PPS final rule (73 FR 26788), we again changed the schedule for the annual updates of

the LTCH PPS Federal payment rates beginning with RY 2010. We consolidated the

rulemaking cycle for the annual update of the LTCH PPS Federal payment rates and

description of the methodology and data used to calculate these payment rates with the

annual update of the MS-LTC-DRG classifications and associ ated weighting factors for

LTCHs so that the updates to the rates and the weights now occur on the same scheduleCMS-1498-P 575

and appear in the same publication. As a re sult, the updates to the rates and the weights

are now effective on October 1 (on a Federa l fiscal year sche dule), and the annual

updates to the LTCH PPS Federal rates are no longer published with a July 1 effective

date (73 FR 26797 through 26798).

Pub. L. 110-173 (MMSEA), enacted on December 29, 2007, included provisions

that have various effects on the LTCH PPS. In addition to amending section 1861 of the

Act to add a subsection (ccc) which provi ded an additional definition of LTCHs,

Pub. L. 110-173 also required the Secretary to submit, no later than 18 months after the

date of enactment of the law, a report to Congress on a study of national long-term care

hospital facility and patient criteria that included “recommendations for such legislation

and administrative actions, including timelines for the implementation of LTCH patient

criteria or other actions, as the Secretary de termines appropriate.” The payment policy

provisions under sections 114(c)(1) and 114(c)(2) of Pub. L. 110-173 focused on

providing 3 years of relief for certain LTCHs from the percentage threshold payment

adjustment policy at 42 CFR 412.534 and 412.536. However, because of the original

implementation schedule of those sections of the regula tions, the payment provisions had

varying timeframes of applicability (73 FR 29701 through 29704). In addition, section

114(c)(3) of Pub. L. 110-173 provided that the Se cretary shall not apply, for the 3-year

period beginning on the date of enactment of the Act the revision to the short-stay outlier

(SSO) policy that was finalized in the RY 2008 LTCH PPS final rule (72 FR 26904 and

26992). In addition, section 114(c)(4) of P ub. L. 110-173 provided that the Secretary

shall not, for the 3-year period beginning on th e date of enactment of the Act, make theCMS-1498-P 576

one-time adjustment to the payment rate s provided for in §412.523(d)(3) or any similar

provision (73 FR 26800 through 26804). The statut e also provided that the base rate for

RY 2008 be the same as the base rate for RY 2007 (the revised base rate, however, does

not apply to discharges occurring on or af ter July 1, 2007, and before April 1, 2008) (73

FR 24875 through 24877). Section 114(d) of Pub. L. 110-173 established a 3-year

moratorium (with specified exceptions) on th e establishment and classification of new

LTCHs, LTCH satellites, and on the increase in the number of LTCH beds in existing

LTCHs or satelitte fac ilities. Finally, section 114(f) of Pub. L. 110-173 provided for an

expanded review of medical necessity for admission and continued stay at LTCHs.

In the RY 2009 LTCH PPS final rule (73 FR 26804 through 26812), we

established the applicable Federal rates fo r RY 2009, consistent with section 1886(m)(2)

of the Act as amended by Pub. L. 110-173. We also revised the regulations at

§412.523(d)(3) to change the methodology for the one-time budget neut rality adjustment

and to comply with section 114(c)(4) of P ub. L. 110-173. Other policy revisions that

were necessary as a result of the statutor y changes of Pub. L. 110-173 were addressed in

separate interim final rule s with comment period (73 FR 24871 and 73 FR 29699). In the

FY 2010 IPPS/RY 2010 LTCH PPS final rule (74 FR 43976 through 43990), we address

all of the public comments received and finalized these two interim final rules with

comment period.

Section 4302 of the ARRA, Pub. L. 111-5, enacted on February 17, 2009,

included several amendments to the pr ovisions set forth in section 114 of

Pub. L. 110-173. Specifically, section 4302(a) modified the effective dates of theCMS-1498-P 577

provisions of section 114(c) of Pub. L. 110-173, described a bove, and added an

additional category of LTCHs or satellite facilities that would not be subject to the

percentage threshold payment adjustment at §412.536 for a 3-year period. In addition,

section 4302(a)(2)(A) of Pub. L. 111-5 added “grandfathered” sate llites (specified in

§412.22(h)(3)(i) of the regtulations) to t hose “applicable” LTCHs (specified in

§412.534(g) of the regulations) originally granted relief under section 114(c) of

Pub. L. 110-173. We issued instructions to the fiscal intermediaries and MACs

interpreting the provisions of section 4302 of Pub. L. 111-5 (Change Request 6444). In

addition, in the FY 2010 IPPS/RY 2010 LTCH PPS final rule (43990 through 43992), we

implemented the provisions of section 4302 of Pub. L. 111-5 through an interim final rule

with comment period. We received one pi ece of timely correspondence regarding the

provisions of section 4302 of Pub. L. 111-5 th at were implemented through the interim

final rule with comment period that was included in the FY 2010 IPPS/RY 2010 LTCH

PPS final rule. We plan to address this public comment and finalize the interim final rule

with comment period in the FY 2011 IPPS/LTCH PPS final rule, which is scheduled to

be issued by August l, 2010.

On March 23, 2010, the Patient Protection and Affordab le Care Act (PPACA),

Pub. L. 111-148 was enacted. Following the enactment of Pub. L. 111-148, the Health

Care and Education Reco nciliation Act of 2010, Public L. 111-152 (enacted on

March 30, 2010), amended certain provisions of Pub. L. 111-148. A number of the

provisions of Pub. L. 111-148, as amended by Pub. L. 111-152, affect the IPPS and the

LTCH PPS and the providers and suppliers addressed in this proposed rule. However,CMS-1498-P 578

due to the timing of the passage of the le gislation, we are unable to address those

provisions in this proposed rule. Therefore, the proposed policies and payment rates in

this proposed rule do not reflect the new le gislation. We plan to issue separate

documents in the Federal Register addressing the provisions of Pub. L. 111-148, as

amended, that affect our proposed policies and payment rates for FY 2011 under the IPPS

and the LTCH PPS. In addition, we plan to issue further instructions implementing the

provisions of Pub. L. 111-148, as amended, that affect the policies and payment rates for

FY 2010 under the IPPS and for RY 2010 under the LTCH PPS.

2. Criteria for Classification as a LTCH

a. Classification as a LTCH

Under the existing regulations at §412.23( e)(1) and (e)(2)(i), which implement

section 1886(d)(1)(B)(iv )(I) of the Act, to qualify to be paid under the LTCH PPS, a

hospital must have a provider agreement with Medicare and must have an average

Medicare inpatient length of stay (LOS) of greater than 25 days. Alternatively,

§412.23(e)(2)(ii) states that for cost re porting periods beginning on or after

August 5, 1997, a hospital that was first excluded from the PPS in 1986 and can

demonstrate that at least 80 percent of its annual Medicare inpatient discharges in the

12-month cost reporting period ending in FY 199 7 have a principal diagnosis that reflects

a finding of neoplastic disease must have an average inpatient length of stay for all

patients, including both Medicare and non-Medica re inpatients, of greater than 20 days.

b. Hospitals Excluded from the LTCH PPSCMS-1498-P 579

The following hospitals are paid under special payment provisions, as described

in §412.22(c), and therefore, are not subject to the LTCH PPS rules:

● Veterans Administration hospitals.

● Hospitals that are reimbursed under St ate cost control systems approved under

42 CFR Part 403.

● Hospitals that are reimbursed in accordance with demonstration projects

authorized under section 402(a) of the Social Security Amendments of 1967

(Pub. L. 90-248) (42 U.S.C. 1395b-1) or sec tion 222(a) of the Social Security

Amendments of 1972 (Pub. L. 92-603) (42 U.S. C. 1395b-1 (note)) (Sta tewide all-payer

systems, subject to the rate-of-increas e test at section 1814(b) of the Act).

● Nonparticipating hospitals furnishi ng emergency services to Medicare

beneficiaries.

3. Limitation on Charges to Beneficiaries

In the August 30, 2002 final rule, we presented an in-depth discussion of

beneficiary liability under the LTCH PPS (67 FR 55974 through 55975). In the RY 2005

LTCH PPS final rule (69 FR 25676), we clarified that the discussion of beneficiary

liability in the August 30, 2002 final rule was not meant to establish rates or payments

for, or define Medicare-eligible expens es. Under §412.507, if the Medicare payment to

the LTCH is the full LTC-DRG payment amount , as consistent with other established

hospital prospective payment systems, a LTCH may not bill a Medicare beneficiary for

more than the deductible and coinsu rance amounts as specified under §409.82, §409.83,

and §409.87 and for items and services as specified under §489.30(a). However, underCMS-1498-P 580

the LTCH PPS, Medicare will only pay for days for which the beneficiary has coverage

until the SSO threshold is exceeded. Therefore, if the Medicare payment was for a SSO

case (§412.529) that was less than the full LTC-DRG payment amount because the

beneficiary had insufficient remaining Medicar e days, the LTCH could also charge the

beneficiary for services delivered on those uncovered days (§412.507).

4. Administrative Simplification Compliance Act (ASCA) and Health Insurance

Portability and Accountability Act (HIPAA) Compliance

Claims submitted to Medicare must comply with both the Administrative

Simplification Compliance Act (ASCA) (P ub. L. 107-105), and the Health Insurance

Portability and Accountability Act of 1996 (HIP AA) (Pub. L. 104-191). Section 3 of the

ASCA requires that the Medicare Program deny payment under Part A or Part B for any

expenses incurred for items or services "for which a claim is submitted other than in an

electronic form specifi ed by the Secretary." Section 1862(h) of the Act (as added by

section 3(a) of the ASCA) provides that the Secretary shall waive such denial in two

specific types of cases and may also waive such denial "in such unusual cases as the

Secretary finds appropriate" (68 FR 48805). Section 3 of the ASCA operates in the

context of the HIPAA regulations, whic h include, among other provisions, the

transactions and code sets standards requirements codifi ed as 45 CFR parts 160 and 162,

subparts A and I through R (generally known as the Transactions Rule). The

Transactions Rule requires covered entities, including covered health care providers, to

conduct certain electronic healthcare transacti ons according to the applicable transactions

and code sets standards.CMS-1498-P 581

B. Proposed Medicare Severity Long -Term Care Diagnosis-Related Group

(MS-LTC-DRG) Classificati ons and Relative Weights

1. Background

Section 123 of the BBRA requires that the Secretary implement a PPS for LTCHs

(that is, a per discharge system with a diagnosis-related group (DRG)-based patient

classification system reflecting the differences in patient resources and costs). Section

307(b)(1) of the BIPA modified the requi rements of section 123 of the BBRA by

requiring that the Secretary examine "the feasibility and the impact of basing payment

under such a system [the long-term care hospital (LTCH) PPS] on the use of existing (or

refined) hospital DRGs that have been modi fied to account for diffe rent resource use of

LTCH patients, as well as the use of the most recently available hospital discharge data."

When the LTCH PPS was implemented for cost reporting periods beginning on or

after October 1, 2002, we adopted the same DR G patient classification system (that is,

the CMS DRGs) that was utilized at that time under the IPPS. As a component of the

LTCH PPS, we refer to this patient classification system as the "long-term care

diagnosis-related groups (LTC-DRGs). Althou gh the patient classification system used

under both the LTCH PPS and the IPPS are the same, the relative weights are different.

The established relative weight methodology and data used under the LTCH PPS result in

relative weights under the LTCH PPS that reflect “the differences in patient resource use

. . ." of LTCH patients (section 123(a)(1) of the BBRA (Pub. L. 106-113)).

As part of our efforts to better recognize severity of illness among patients, in the

FY 2008 IPPS final rule with comment period (72 FR 47130), the MS-DRGs and theCMS-1498-P 582

Medicare severity long-term care diagnos is-related groups (MS-LTC-DRGs) were

adopted under the IPPS and the LTCH PPS, respectively, effective beginning

October 1, 2007 (FY 2008). For a full de scription of the development and

implementation and rationale for the use of the MS-DRGs and MS-LTC-DRGs, we refer

readers to the FY 2008 IPPS final rule w ith comment period (72 FR 47141 through

47175 and 47277 through 47299). (We note that, in that same final rule, we revised the

regulations at §412.503 to specify that for LTCH discharges occurring on or after

October 1, 2007, when applying the provisions of 42 CFR Part 412, Subpart O applicable

to LTCHs for policy descriptions and paymen t calculations, all references to LTC-DRGs

would be considered a reference to MS-LTC-D RGs. For the remainder of this section,

we present the discussion in terms of the current MS-LTC-DRG patient classification

system unless specifically referring to the previous LTC-DRG patient classification

system that was in effect before Octobe r 1, 2007.) We believe the MS-DRGs (and by

extension, the MS-LTC-DRGs) represent a s ubstantial improvement over the previous

CMS DRGs in their ability to differentiate cases based on severity of illness and resource

consumption.

The MS-DRGs adopted in FY 2008 represen t an increase in the number of DRGs

by 207 (that is, from 538 to 745) (72 FR 47171). In FY 2009, an additional MS-DRG

was adopted for a total of 746 distinct groupings (73 FR 48497). For FY 2011, we are

proposing to delete one MS-DRG and create two new MS-DRGs, for a net gain of one

MS-DRG, as noted in section II. of the preambl e of this proposed rule. This would result

in 747 distinct MS-DRG groupings for FY 20 11. Consistent with section 123 of theCMS-1498-P 583

BBRA, as amended by section 307(b)(1) of the BIPA, and §412.515, we use information

derived from LTCH PPS patient records to classify LTCH discharges into distinct

MS-LTC-DRGs based on clinical characteristics and estimated resource needs. We then

assign an appropriate weight to the MS -LTC-DRGs to account for the difference in

resource use by patients exhibiting the case complexity and multiple medical problems

characteristic of LTCHs.

In a departure from the IPPS, and as discussed in greater detail below in section

VII.B.3.f. of this preamble, we use low- volume MS-LTC-DRGs (that is, MS-LTC-DRGs

with less than 25 LTCH cases) in deter mining the MS-LTC-DRG relative weights

because LTCHs do not typically treat the full range of diagnoses as do acute care

hospitals. For purposes of determining the re lative weights for the large number of lowvolume MS-LTC-DRGs, we group all of th e low-volume MS-LTC-DRGs into five

quintiles based on average charge per discharge. (A detailed discussion of the initial

development and application of the quintile methodology appears in the August 30, 2002

LTCH PPS final rule (67 FR 55978).) We also account for adjustments to payments for

short-stay outlier (SSO) cases (that is, cases where the covered LOS at the LTCH is less

than or equal to five-sixths of the geometri c ALOS for the MS-LTC-DRG). Furthermore,

we make adjustments to account for nonm onotonically increasing weights, when

necessary. That is, theoretically, cases under the MS-LTC-DRG system that are more

severe require greater expenditure of medical care resources and will result in higher

average charges such that, in the severity levels within a base MS-LTC-DRG, the weights

should increase monotonically with severity from the lowest to highest severity level.CMS-1498-P 584

(We discuss nonmonotonicity in greater de tail and our methodology to adjust the

RY 2010 MS-LTC-DRG relative weights to account for nonmonotonically increasing

relative weights in section VII.B.3. g. (Step 6) of this preamble.)

2. Patient Classificati ons into MS-LTC-DRGs

a. Background

The MS-DRGs (used under the IPPS) and the MS-LTC-DRGs (used under the

LTCH PPS) are based on the CMS DRG structure. As noted above in this section, we

refer to the DRGs under the LTCH PPS as MS -LTC-DRGs although they are structurally

identical to the MS-DRGs used under the IPPS.

The MS-DRGs are organized into 25 major diagnostic categories (MDCs), most

of which are based on a particular organ sy stem of the body; the remainder involve

multiple organ systems (such as MDC 22, Burn s). Within most MDCs, cases are then

divided into surgical DRGs and medical DR Gs. Surgical DRGs are assigned based on a

surgical hierarchy that orders operating r oom (O.R.) procedures or groups of O.R.

procedures by resource intensity. The GR OUPER software program does not recognize

all ICD-9-CM procedure code s as procedures affecting DRG assignment. That is,

procedures that are not surgical (for exampl e, EKG), or minor surgical procedures (for

example, biopsy of skin and subcutaneous tissue (procedure code 86.11)) do not affect

the MS-LTC-DRG assignment based on their presence on the claim.

Generally, under the LTCH PPS, a Medicare payment is made at a predetermined

specific rate for each discharge and that payment varies by the MS-LTC-DRG to which aCMS-1498-P 585

beneficiary's stay is assigned. Cases are classified into MS-LTC-DRGs for payment

based on the following six data elements:

● Principal diagnosis;

● Additional or secondary diagnoses;

● Surgical procedures;

● Age;

● Sex; and

● Discharge status of the patient.

Through FY 2010, the number of secondary or additional diagnoses and the

number of surgical procedures considered for MS-DRG assignment was limited to eight

and six, respectively. Elsewhere in this proposed rule, however, we are proposing that,

for claims submitted on the 5010 format be ginning January 1, 2011, we would increase

the capacity to process diagnosis and procedure codes up to 25 diagnoses and 25

procedures. This will include one principa l diagnosis and up to 24 secondary diagnoses

for severity of illness deter minations. We refer readers to section II.G.11.c. of this

preamble for a complete discu ssion of this proposed change.

Upon the discharge of the patient from a LTCH, the LTCH must assign

appropriate diagnosis and procedure code s from the most current version of the

International Classification of Diseases , Ninth Revision, Clinical Modification

(ICD-9-CM). HIPAA Transactions and Code Sets Standards regulations at

45 CFR Parts 160 and 162 require that no late r than October 16, 2003, all covered entities

must comply with the applicable requirement s of Subparts A and I through R of Part 162.CMS-1498-P 586

Among other requirements, those provisions di rect covered entities to use the ASC X12N

837 Health Care Claim: Institu tional, Volumes 1 and 2, Vers ion 4010, and the applicable

standard medical data code sets for the institutional health care claim or equivalent

encounter information transaction (45 CFR 162.1002 and 45 CFR 162.1102). For

additional information on the ICD-9-CM Coding System, we refer readers to the FY 2008

IPPS final rule with comment period (72 FR 47241 through 47243 and 47277 through

47281). We also refer readers to the detailed discussion on correct coding practices in the

August 30, 2002 LTCH PPS final rule (67 FR 55981 through 55983). Additional coding

instructions and examples are publishe d in the Coding Clinic for ICD-9-CM , a product of

the American Hospital Association. (We re fer readers to section II.G.11. of this

preamble for additional information on the a nnual revisions to the ICD-9-CM codes.)

With respect to the ICD-9-CM coding system, we have been discussing the

conversion to the ICD-10-CM and the ICD-10-PC S coding systems for many years. As

is discussed in detail in s ection II.G.11. of this preamble, the ICD-10 coding systems

applicable to hospital inpa tient services will be impl emented on October 1, 2013. In

order for the industry to make the necessary conversions from ICD-9-CM to ICD-10-CM

and ICD-10-PCS, we propose d, through the ICD-9-CM C oordination and Maintenance

Committee, to consider a moratorium on upda tes to the ICD-9-CM and ICD-10 coding

sets. We refer readers to section II.G.11. of this preambl e for additional information on

the adoption of ICD-10-CM and ICD-10-PCS.

To create the MS-DRGs (and by ex tension, the MS-LTC-DRGs), individual

DRGs were subdivided according to the pr esence of specific secondary diagnosesCMS-1498-P 587

designated as complications or comorbiditie s (CCs) into three, two, or one level,

depending on the impact of the CCs on resources used for those cases. Specifically, there

are sets of MS–DRGs that are split into 2 or 3 subgroups based on the presence or

absence of a CC or a major complication and comorbidity (MCC). We refer readers to

section II.D. of the FY 2008 IPPS final rule with comment period for a detailed

discussion about the creation of MS-DRG s based on severity of illness levels

(72 FR 47141 through 47175).

Medicare contractors (that is, fiscal intermediaries and MACs) enter the clinical

and demographic information submitted by LTCHs into their claims processing systems

and subject this information to a series of automated screening processes called the

Medicare Code Editor (MCE). These screens are designed to identify cases that require

further review before assignment into a MS-LTC-DRG can be made. During this

process, certain cases are selected for further development (74 FR 43949).

After screening through the MCE, each claim is classified into the appropriate

MS-LTC-DRG by the Medicare LTCH GROUPER software on the basis of diagnosis

and procedure codes and other demographic info rmation (age, sex, and discharge status).

The GROUPER software used under the LTCH PPS is the same GROUPER software

program used under the IPPS. Following the MS-LTC-DRG assignment, the Medicare

contractor determines the prospective pa yment amount by using the Medicare PRICER

program, which accounts for hospital-specific adjustments. Under the LTCH PPS, we

provide an opportunity for LTCHs to review the MS-LTC-DRG assignments made by theCMS-1498-P 588

Medicare contractor and to submit additional information within a specified timeframe as

provided in §412.513(c).

The GROUPER software is us ed both to classify past cases to measure relative

hospital resource consumption to establish the MS-LTC-DRG weights and to classify

current cases for purposes of determining paym ent. The records for all Medicare hospital

inpatient discharges are maintained in the MedPAR file. The data in this file are used to

evaluate possible MS-DRG and MS-LTC-DRG classification changes and to recalibrate

the MS-DRG and MS-LTC-DRG relative we ights during our annual update under both

the IPPS (§412.60(e)) and the LTCH PPS (§412.517), respectively.

b. Proposed Changes to the MS-LTC-DRGs for FY 2011

As specified by our regulations at §412.517(a), which requires that the

LTC-MS-DRG classifications and relative we ights be updated annual ly and consistent

with our historical practice of using the same patient classifi cation system under the

LTCH PPS as is used under the IPPS, in this proposed rule, we are proposing to modify

and revise the MS-LTC-DRG classifica tions effective October 1, 2010, through

September 30, 2011 (FY 2011) consistent with the proposed changes to specific

MS-DRG classifications presente d above in section II.G. of th is proposed rule (that is,

proposed GROUPER Version 28.0). Ther efore, the MS-LTC-DRGs for FY 2011

presented in this proposed rule are the sa me as the proposed MS-DRGs that would be

used under the IPPS for FY 2011. In addition, because the proposed MS-LTC-DRGs for

FY 2011 are the same as the proposed MS-DRGs for FY 2011, the other changes that

would affect MS-DRG (and by extensi on MS-LTC-DRG) assignments under VersionCMS-1498-P 589

28.0 of the GROUPER discussed in section II.G . of the preamble of this proposed rule,

including the proposed changes to the MC E software and proposed changes to the

ICD-9-CM coding system, would also be applicable under the LTCH PPS for FY 2011.

3. Development of the Proposed FY 2011 MS-LTC-DRG Relative Weights

a. General Overview of the Developm ent of the MS-LTC-DRG Relative Weights

As we stated in the August 30, 2002 LTCH PPS final rule (67 FR 55984), one of

the primary goals for the implementation of the LTCH PPS is to pay each LTCH an

appropriate amount for the efficient delivery of medical care to Medicare patients. The

system must be able to account adequately for each LTCH's case-mix in order to ensure

both fair distribution of Medicare payments and access to adequate care for those

Medicare patients whose care is more costly . To accomplish these goals, we have

annually adjusted the LTCH PPS standard Federal prospective payment system rate by

the applicable relative weight in determining payment to LTCHs for each case.

Although the adoption of the MS-LTC-DRG s resulted in some modifications of

existing procedures for assigning weig hts in cases of zero volume and/or

nonmonotonicity (as discussed in the FY 2008 IPPS final rule with comment period

(72 FR 47289 through 47295) and the FY 2009 IPPS final rule (73 FR 48542 through

48550)), the basic methodology for devel oping the proposed FY 2011 MS-LTC-DRG

relative weights in this proposed rule continue s to be determined in accordance with the

general methodology established in the August 30, 2002 LTCH PPS final rule

(67 FR 55989 through 55991). Under the LTCH PPS, relative weights for each

MS-LTC-DRG are a primary element used to account for the variations in cost perCMS-1498-P 590

discharge and resource utilization among the payment groups (§412.515). To ensure that

Medicare patients classified to each MS-LTC-DRG have access to an appropriate level of

services and to encourage efficiency, we calculate a relative weight for each

MS-LTC-DRG that represents the resources ne eded by an average inpatient LTCH case

in that MS-LTC-DRG. For example, cases in an MS-LTC-DRG with a relative weight

of 2 will, on average, cost twice as much to treat as cases in an MS-LTC-DRG with a

weight of 1.

b. Development of the Proposed MS-L TC-DRG Relative Weights for FY 2011

Beginning with the FY 2008 update, we es tablished a budget ne utral requirement

for the annual update to the MS-LTC-DRG classifications and relative weights at

42 CFR 412.517(b) (in conjunction with §412.503), such that estimated aggregate LTCH

PPS payments would be unaffected, that is, would be neither greater than nor less than

the estimated aggregate LTCH PPS payments that would have been made without the

classification and relative weight changes (May 11, 2007 LTCH PPS final rule,

72 FR 26882 through 26884).

Consistent with §412.517(b), we apply a two-step budget neutrality methodology,

which is based on the current year MS-LTC-D RG classifications and relative weights.

(For additional information on the establis hed two-step budget neutrality methodology,

we refer readers to the FY 2008 IPPS final rule (72 FR 47295 through 47296).) Thus, the

proposed annual update to the MS-LTC-DRG classifications and relative weights for

FY 2011 is based on the FY 2010 MS-LTC-DRG cl assifications and relative weights.CMS-1498-P 591

c. Data

In this proposed rule, to calculate the proposed MS-LTC-DRG relative weights

for FY 2011, we are proposing to obtain total Medicare allowable charges from FY 2009

Medicare LTCH bill data from the December 2009 update of th e MedPAR file, which are

the best available data at this time, a nd to use the proposed Version 28.0 of the

GROUPER to classify LTC H cases (as discussed above). We also are proposing that if

more recent data become available, we woul d use those data and the finalized Version

28.0 of the GROUPER in establishing the FY 2011 MS-LTC-DRG relative weights in the

final rule.

Consistent with our historical met hodology, we excluded the data from LTCHs

that are all-inclusive rate providers and LTCHs that are reimbursed in accordance with

demonstration projects authorized under section 402(a) of Pub. L. 90-248 or

section 222(a) of Pub. L. 92-603. In addition, as is the case with the IPPS, Medicare

Advantage (Part C) claims are now incl uded in the MedPAR files (74 FR 43808).

Consistent with IPPS policy, we are proposing to exclude such claims in the calculations

for the relative weights under the LTCH PPS that are used to determine payments for feefor-service Medicare claims. Specifically, we have added an edit to the relative weight

calculation to remove any claims from the MedP AR files that have a GHO Paid indicator

value of “1,” which effectively removes Medicare Advantage claims from the relative

weight calculations (73 FR 48532). Accordin gly, in the development of the proposed

FY 2011 MS-LTC-DRG relative weights in this proposed rule, we excluded the data of

13 all-inclusive rate providers and the 2 LTCHs that are paid in accordance withCMS-1498-P 592

demonstration projects that ha d claims in the FY 2009 MedPAR file, as well as any

Medicare Advantage claims.

d. Hospital-Specific Relative Value (HSRV) Methodology

By nature, LTCHs often specialize in cer tain areas, such as ventilator-dependent

patients and rehabilitati on and wound care. Some case type s (DRGs) may be treated, to a

large extent, in hospitals that have, from a pers pective of charges, relatively high (or low)

charges. This nonrandom distribution of cases with relatively high (or low) charges in

specific MS-LTC-DRGs has the potential to inappropriately dist ort the measure of

average charges. To account for the fact that cases may not be randomly distributed

across LTCHs, consistent with the methodolog y we have used since the implementation

of the LTCH PPS, we are proposing to conti nue to use a hospital-specific relative value

(HSRV) methodology to calculate the propos ed MS-LTC-DRG relative weights. We

believe this method re moves this hospital-specific source of bias in measuring LTCH

average charges (67 FR 55985). Specifically, we are reducing the impact of the variation

in charges across providers on any particular proposed MS-LTC-DRG relative weight by

converting each LTCH's charge for a case to a relative value based on that LTCH's

average charge.

Under the HSRV methodology, we standardize charges for each LTCH by

converting its charges for each case to hospital- specific relative charge values and then

adjust those values for the LTCH's case-mix. The adjustment for case-mix is needed to

rescale the hospital-specific relative charge values (which, by definition, average 1.0 for

each LTCH). The average relative weight for a LTCH is its case-mix, so it is reasonableCMS-1498-P 593

to scale each LTCH's average relative charge value by its case-mix. In this way, each

LTCH's relative charge value is adjusted by its case-mix to an average that reflects the

complexity of the cases it treats relative to the complexity of the cases treated by all other

LTCHs (the average case-mix of all LTCHs).

In accordance with our established met hodology, we continue to standardize

charges for each case by first dividing the ad justed charge for the case (adjusted for SSOs

under §412.529 as described in section VII.B.3. g. (step 3) of the preamble of this

proposed rule) by the average adjusted charge for all cases at the LTCH in which the case

was treated. SSO cases are cases with a length of stay that is less than or equal to

five-sixths the average length of st ay of the MS-LTC-DRG (§412.529 and §412.503).

The average adjusted charge reflects the aver age intensity of the health care services

delivered by a particular LTCH and the aver age cost level of that LTCH. The resulting

ratio is multiplied by that LTCH's case-mix index to determine the standardized charge

for the case. (67 FR 55989)

Multiplying by the LTCH's case-mix index accounts for the fact that the same

relative charges are given greater weight at a LTCH with higher average costs than they

would at a LTCH with low average costs, which is needed to adjust each LTCH's relative

charge value to reflect its case-mix relative to the average case-mix for all LTCHs.

Because we standardize charges in this manner, we count charges for a Medicare patient

at a LTCH with high average charges as less resource intensive than they would be at a

LTCH with low average charges. For ex ample, a $10,000 charge for a case at a LTCH

with an average adjusted charge of $17,500 refl ects a higher level of relative resource useCMS-1498-P 594

than a $10,000 charge for a case at a LTCH with the same case-mix, but an average

adjusted charge of $35,000. We believe that the adjusted charge of an individual case

more accurately reflects actual resource use for an individual LTCH because the variation

in charges due to systematic differences in the markup of charges among LTCHs is taken

into account.

e. Treatment of Severity Levels in De veloping the Proposed MS-LTC-DRG Relative

Weights

For purposes of determining the proposed MS-LTC-DRG relative weights, there

are three different categories of DRGs based on volume of cases within specific MSLTC-DRGs. MS-LTC-DRGs with at least 25 cases are each assigned a unique proposed

relative weight; low-volume proposed MS-L TC-DRGs (that is, proposed MS-LTC-DRGs

that contain between 1 and 24 cases based on a given year’s claims data) are grouped into

quintiles (as described below) and assigned the proposed relative weight of the quintile.

No-volume proposed MS-LTC-DRGs (that is, no cases in the given year's claims data

were assigned to those proposed MS-LTC-D RGs) are crosswalked to other proposed

MS-LTC-DRGs based on the clinical similarities and assigned the relative weight of the

crosswalked MS-LTC-DRG (as de scribed in greater detail belo w). (We provide in-depth

discussions of our policy regarding weig ht-setting for low-volume MS-LTC-DRGs in

section VII.B.3.f. of the preamble of this proposed rule and for no-volume

MS-LTC-DRGs, under Step 5 in section VII. B.3.g. of the preamble of this proposed

rule.)CMS-1498-P 595

As also noted above, while the LTCH PPS and the IPPS use the same patient

classification system, the methodology that is used to set the DRG relative weights for

use in each payment system differs because the overall volume of cases in the LTCH PPS

is much less than in the IPPS. In general, consistent with our existing methodology, we

are proposing to determine the proposed FY 2011 relative weights for the proposed

MS-LTC-DRGs using the following steps: (1 ) if a proposed MS-LTC-DRG has at least

25 cases, it is assigned its own proposed rela tive weight; (2) if a proposed MS-LTC-DRG

has between 1 and 24 cases, it is assigned to a quintile for which we compute a proposed

relative weight for all of the proposed MS-LTC -DRGs assigned to that quintile; and (3) if

a proposed MS-LTC-DRG has no cases, it is crosswalked to another proposed

MS-LTC-DRG based upon clinical similarities to assign an appropriate proposed relative

weight (as described below in detail in Step 5 of section VII.B.3.g. of this preamble).

Furthermore, in determining the proposed FY 2011 MS-LTC-DRG relative weights,

when necessary, we are proposing to make adjustments to account for nonmonotonicity,

as discussed in greater detail be low in Step 6 of section VII.B.3.g. of this preamble. We

refer readers to the discussion in the FY 2010 IPPS/RY LTCH PPS final rule for our

rationale for including an adjustment for nonmonotonicity (74 FR 43953 through 43954).

f. Low-Volume MS-LTC-DRGs

In order to account for proposed MS-L TC-DRGs with low volume (that is, with

fewer than 25 LTCH cases), consistent with our existing methodology, for purposes of

determining the MS-LTC-DRG re lative weights, we are proposing to continue to employ

this quintile methodology for low-volume pr oposed MS-LTC-DRGs, such that we groupCMS-1498-P 596

those "low-volume MS-LTC-DRGs" (that is , MS-LTC-DRGs that contained between

1 and 24 cases annually) into one of five categories (quin tiles) based on average charges

(67 FR 55984 through 55995 and 72 FR 47283 through 47288). In determining the

proposed FY 2011 MS-LTC-DRG relative weights in this proposed rule, in cases where

the initial assignment of a low-volume propos ed MS-LTC-DRG to quintiles results in

nonmonotonicity within a base-DRG, in order to ensure appropriate Medicare payments,

consistent with our historical methodology, we are proposing to make adjustments to the

treatment of low-volume proposed MS-LTC -DRGs to preserve monotonicity, as

discussed in detail below in section VII.B.3.g. (Step 6) in this preamble.

In this proposed rule, using LTCH cases from the December 2009 update of the

FY 2009 MedPAR file, we id entified 283 MS-LTC-DRGs that contained between 1 and

24 cases. This list of proposed MS-LTC-DRGs was then divided into one of the

5 low-volume quintiles, each containing a minimum of 56 proposed MS-LTC-DRGs

(283/5 = 56 with 3 proposed MS-LTC-DRG as the remainder). We are proposing to

assign a low-volume proposed MS-LTC-DRG to a specific low-volume quintile by

sorting the low-volume proposed MS-LTC-DRGs in ascending order by average charge

in accordance with our established methodolog y. Furthermore, because the number of

proposed MS-LTC-DRGs with less than 25 cas es was not evenly divisible by 5, the

average charge of the low-volume quintile was used to determine which of the lowvolume quintiles would contain the 3 additi onal low-volume proposed MS-LTC-DRGs.

Specifically, after sorting the 283 low-volum e proposed MS-LTC-DRGs by ascending

order by average charge, we are proposing to assign the first fifth (1 st through 56 th ) ofCMS-1498-P 597

low-volume proposed MS-LTC-DRGs (with the lowest average charge) into Quintile 1.

The proposed MS-LTC-DRGs with the highest average charge cases would be assigned

into Quintile 5. Because the average charge of the 113 th low-volume proposed

MS-LTC-DRG in the sorted list is closer to the average charge of the 112 th low-volume

proposed MS-LTC-DRG (assigned to Quintile 2) than to the average charge of the 114 th

low-volume MS-LTC-DRG (assigned to Quin tile 3), we are proposing to place it into

Quintile 2 (such that Quintile 2 would c ontain 57 low-volume proposed MS-LTC-DRGs

before any adjustments for nonmonotonicity, as discussed below). This process was

repeated through the remaining low-volume proposed MS-LTC-DRGs so that 2 of the

5 low-volume quintiles contain 56 MS-LTC-DRGs (Quintiles 1 and 4) and the other

3 low-volume quintiles contain 57 MS-LTC-DRGs (Quintiles 2, 3, and 5).

Accordingly, in order to determine th e proposed FY 2011 relative weights for the

proposed MS-LTC-DRGs with low volume, we are proposing to use the 5 low-volume

quintiles described above. The composition of each of the 5 low-volume quintiles shown

in the chart below was used in determinin g the proposed FY 2011 MS-LTC-DRG relative

weights (as shown in Table 11 of the Addendum to this proposed rule). We determined a

proposed relative weight and (geometric) averag e length of stay for each of the 5 lowvolume quintiles using the methodology that we applied to the proposed MS-LTC-DRGs

(25 or more cases), as descri bed in section VII.B.3.g. of th e preamble of this proposed

rule. We are proposing to assign the same pr oposed relative weight and average length of

stay to each of the low-volume proposed MS-LTC-DRGs that make up an individual

low-volume quintile. We note that, as this system is dynamic, it is possible that theCMS-1498-P 598

number and specific type of MS-LTC-DRGs w ith a low volume of LTCH cases will vary

in the future. We use the best available claims data in the MedPAR file to identify lowvolume MS-LTC-DRGs and to calculate the proposed relative weights based on our

methodology.

Proposed Composition of Low-Volume Quintiles for FY 2011 *

ProposedMSLTCDRG Proposed MS-LTC-DRG Description Quintile 1 26 Craniotomy & endovascular intracranial procedures w CC 42 Periph & cranial nerve & other nerv syst proc w/o CC/MCC 60 Multiple sclerosis & cerebellar ataxia w/o CC/MCC 66 Intracranial hemorrhage or cerebral infarction w/o CC/MCC 68 Nonspecific cva & precerebral occlusion w/o infarct w/o MCC 81 Nontraumatic stupor & coma w/o MCC 84 Traumatic stupor & coma, coma >1 hr w/o CC/MCC 87 Traumatic stupor & coma, coma <1 hr w/o CC/MCC 93 Other disorders of nervous system w/o CC/MCC 99 Non-bacterial infect of nervous sys exc viral meningitis w/o CC/MCC 122 Acute major eye infections w/o CC/MCC 148 Ear, nose, mouth & throat malignancy w/o CC/MCC 149 Dysequilibrium 151 Epistaxis w/o MCC 188 Pleural effusion w/o CC/MCC 198 Interstitial lung disease w/o CC/MCC 201 Pneumothorax w/o CC/MCC 244 Permanent cardiac pacemaker implant w/o CC/MCC 282 Circulatory disorders w AMI, discharged alive w/o CC/MCC 310 Cardiac arrhythmia & conduction disorders w/o CC/MCC 354 Hernia procedures except inguinal & femoral w CC 376 Digestive malignancy w/o CC/MCC 379 G.I. hemorrhage w/o CC/MCC 383 Uncomplicated peptic ulcer w MCC 387 Inflammatory bowel disease w/o CC/MCC 390 G.I. obstruction w/o CC/MCC 437 Malignancy of hepatobiliary sy stem or pancreas w/o CC/MCC 440 Disorders of pancreas except malignancy w/o CC/MCCCMS-1498-P 599

ProposedMSLTCDRG Proposed MS-LTC-DRG Description 491 Back & neck procedures except spinal fusion w/o CC/MCC 537 Sprains, strains, & dislocations of hip, pelvis & thigh w CC/MCC 547 Connective tissue disorders w/o CC/MCC 553 Bone diseases & arthropathies w MCC 555 Signs & symptoms of musculoske letal system & conn tissue w MCC 578 Skin graft &/or debrid exc for skin ulcer or cellulitis w/o CC/MCC 601 Non-malignant breast disorders w/o CC/MCC 645 Endocrine disorders w/o CC/MCC 656 Kidney & ureter procedures for neoplasm w MCC 694 Urinary stones w/ot esw lithotripsy w/o MCC 696 Kidney & urinary tract signs & symptoms w/o MCC 730 Other male reproductive system diagnoses w/o CC/MCC 759 Infections, female repr oductive system w/o CC/MCC 781 Other antepartum diagnoses w medical complications 821 Lymphoma & leukemia w ma jor O.R. procedure w CC 824 Lymphoma & non-acute leukemia w other O.R. proc w CC 842 Lymphoma & non-acute leukemia w/o CC/MCC 845 Other myeloprolif dis or poorly diff neopl diag w/o CC/MCC 864 Fever of unknown origin 869 Other infectious & parasitic diseases diagnoses w/o CC/MCC 882 Neuroses except depressive 887 Other mental disorder diagnoses 897 Alcohol/drug abuse or dependence w/o rehabilitation therapy w/o MCC 915 Allergic reactions w MCC 918 Poisoning & toxic effects of drugs w/o MCC 923 Other injury, poisoning & toxic effect diag w/o MCC 965 Other multiple significant trauma w/o CC/MCC 976 HIV w major related condition w/o CC/MCC Quintile 2 59 Multiple sclerosis & cerebellar ataxia w CC 83 Traumatic stupor & coma, coma >1 hr w CC 98 Non-bacterial infect of ner vous sys exc viral meningitis w CC 121 Acute major eye infections w CC/MCC 158 Dental & Oral Diseases w CC 159 Dental & Oral Diseases w/o CC/MCC 182 Respiratory neoplasms w/o CC/MCC 200 Pneumothorax w CC 203 Bronchitis & asthma w/o CC/MCC 225 Cardiac defib implant w cardiac cath w/o AMI/HF/shock w/o MCCCMS-1498-P 600

ProposedMSLTCDRG Proposed MS-LTC-DRG Description 236 Coronary bypass w/o cardiac cath w/o MCC 249 Percutaneous cardiovasc proc w non-drug-eluting stent w/o MCC 254 Other vascular procedures w/o CC/MCC 262 Cardiac pacemaker revision excep t device replacement w/o CC/MCC 284 Circulatory disorders w AMI, expired w CC 305 Hypertension w/o MCC 369 Major esophageal disorders w CC 384 Uncomplicated peptic ulcer w/o MCC 395 Other digestive system diagnoses w/o CC/MCC 419 Laparoscopic cholecystectomy w/o c.d.e. w/o CC/MCC 433 Cirrhosis & alcoholic hepatitis w CC 436 Malignancy of hepatobiliary system or pancreas w CC 446 Disorders of the biliary tract w/o CC/MCC 476 Amputation for musculoskeletal sys & conn tissue dis w/o CC/MCC 487 Knee procedures w pdx of infection w/o CC/MCC 502 Soft tissue procedures w/o CC/MCC 536 Fractures of hip & pelvis w/o MCC 544 Pathological fractures & muscul oskelet & conn tiss malig w/o CC/MCC 554 Bone diseases & arthropathies w/o MCC 556 Signs & symptoms of musculoske letal system & conn tissue w/o MCC 584 Breast biopsy, local excision & other breast procedures w CC/MCC 598 Malignant breast disorders w CC 624 Skin grafts & wound debrid for endoc, nutrit & metab dis w/o CC/MCC 625 Thyroid, parathyroid & thyroglossal procedures w MCC 643 Endocrine disorders w MCC 644 Endocrine disorders w CC 669 Transurethral procedures w CC 687 Kidney & urinary tract neoplasms w CC 700 Other kidney & urinary tract diagnoses w/o CC/MCC 710 Penis procedures w/o CC/MCC 723 Malignancy, male re productive system w CC 755 Malignancy, female reproductive system w CC 760 Menstrual & other fe male reproductive system disorders w CC/MCC 776 Postpartum & post abortion diagnoses w/o O.R. procedure 809 Major hematol/immun diag exc sick le cell crisis & coagul w CC 815 Reticuloendothelia l & immunity disorders w CC 836 Acute leukemia w/o major O.R. procedure w/o CC/MCC 880 Acute adjustment reaction & psychosocial dysfunction 883 Disorders of personality & impulse controlCMS-1498-P 601

ProposedMSLTCDRG Proposed MS-LTC-DRG Description 903 Wound debridements for injuries w/o CC/MCC 906 Hand procedures for injuries 909 Other O.R. procedures for injuries w/o CC/MCC 933 Extensive burns or full thickness bur ns w MV 96+ hrs w/o skin graft 941 O.R. proc w diagnoses of other c ontact w health services w/o CC/MCC 957 Other O.R. procedures for mu ltiple significant trauma w MCC 983 Extensive O.R. procedure unrelated to principal diagnosis w/o CC/MCC 989 Non-extensive O.R. proc unrelated to principal diagnosis w/o CC/MCC Quintile 3 29 Spinal procedures w CC 75 Viral meningitis w CC/MCC 77 Hypertensive encephalopathy w MCC 78 Hypertensive encephalopathy w CC 82 Traumatic stupor & coma, coma >1 hr w MCC 90 Concussion w/o CC/MCC 96 Bacterial & tuberculous infecti ons of nervous system w/o CC/MCC 102 Headaches w MCC 124 Other disorders of the eye w MCC 156 Nasal trauma & deformity w/o CC/MCC 243 Permanent cardiac pacemaker implant w CC 247 Percutaneous cardiovascular pr oc w drug-eluting stent w/o MCC 258 Cardiac pacemaker device replacement w MCC 287 Circulatory disorders except AMI, w card cath w/o MCC 311 Angina pectoris 313 Chest pain 327 Stomach, esophageal & duodenal proc w CC 328 Stomach, esophageal & duodenal proc w/o CC/MCC 344 Minor small & large bowel procedures w MCC 348 Anal & stomal procedures w CC 370 Major esophageal disorders w/o CC/MCC 381 Complicated peptic ulcer w CC 382 Complicated peptic ulcer w/o CC/MCC 443 Disorders of liver except malig,cirr,alc hepa w/o CC/MCC 465 Wnd debrid & skn grft exc hand, for musculo-conn tiss dis w/o CC/MCC 467 Revision of hip or knee replacement w CC 494 Lower extrem & humer proc except hip,foot,femur w/o CC/MCC 499 Local excision & removal int fix devices of hip & femur w/o CC/MCC 506 Major thumb or joint procedures 516 Other musculoskelet sys & conn tiss O.R. proc w CCCMS-1498-P 602

ProposedMSLTCDRG Proposed MS-LTC-DRG Description 562 Fx, sprn, strn & disl except femur, hip, pelvis & thigh w MCC 563 Fx, sprn, strn & disl except femur, hip, pelvis & thigh w/o MCC 581 Other skin, subcut tiss & breast proc w/o CC/MCC 630 Other endocrine, nutrit & me tab O.R. proc w/o CC/MCC 659 Kidney & ureter procedures for non-neoplasm w MCC 671 Urethral procedures w CC/MCC 675 Other kidney & urinary tract procedures w/o CC/MCC 686 Kidney & urinary tract neoplasms w MCC 693 Urinary stones w/o esw lithotripsy w MCC 695 Kidney & urinary tract signs & symptoms w MCC 697 Urethral stricture 713 Transurethral prostatectomy w CC/MCC 726 Benign prostatic hypertrophy w/o MCC 808 Major hematol/immun diag exc sick le cell crisis & coagul w MCC 827 Myeloprolif disord or poorly diff neopl w maj O.R. proc w CC 834 Acute leukemia w/o major O.R. procedure w MCC 835 Acute leukemia w/o major O.R. procedure w CC 843 Other myeloprolif dis or poorly diff neopl diag w MCC 844 Other myeloprolif dis or poorly diff neopl diag w CC 855 Infectious & parasitic diseases w O.R. procedure w/o CC/MCC 858 Postoperative or post-tr aumatic infections w O.R. proc w/o CC/MCC 866 Viral illness w/o MCC 896 Alcohol/drug abuse or dependenc e w/o rehabilitation therapy w MCC 905 Skin grafts for injuries w/o CC/MCC 922 Other injury, poisoning & toxic effect diag w MCC 963 Other multiple significant trauma w MCC 970 HIV w extensive O.R. procedure w/o MCC Quintile 4 11 Tracheostomy for face,mouth & neck diagnoses w MCC 25 Craniotomy & endovascular in tracranial procedures w MCC 28 Spinal procedures w MCC 31 Ventricular shunt procedures w MCC 37 Extracranial procedures w MCC 69 Transient ischemia 80 Nontraumatic stupor & coma w MCC 89 Concussion w CC 113 Orbital procedures w CC/MCC 125 Other disorders of the eye w/o MCC 157 Dental & Oral Diseases w MCCCMS-1498-P 603

ProposedMSLTCDRG Proposed MS-LTC-DRG Description 250 Perc cardiovasc proc w/o cor onary artery stent or AMI w MCC 256 Upper limb & toe amputation for circ system disorders w CC 261 Cardiac pacemaker revision except device replacement w CC 336 Peritoneal adhesiolysis w CC 347 Anal & stomal procedures w MCC 353 Hernia procedures except inguinal & femoral w MCC 358 Other digestive system O.R. procedures w/o CC/MCC 380 Complicated peptic ulcer w MCC 406 Pancreas, liver & shunt procedures w CC 409 Biliary tract proc except only cholecyst w or w/o c.d.e. w CC 460 Spinal fusion except cervical w/o MCC 472 Cervical spinal fusion w CC 478 Biopsies of musculoskeletal system & connective tissue w CC 480 Hip & femur procedures except major joint w MCC 485 Knee procedures w pdx of infection w MCC 486 Knee procedures w pdx of infection w CC 490 Back & neck procedures except spin al fusion w CC/MCC or disc devices 496 Local excision & removal int fix devices exc hip & femur w CC 497 Local excision & removal int fix devices exc hip & femur w/o CC/MCC 504 Foot procedures w CC 505 Foot procedures w/o CC/MCC 513 Hand or wrist proc, except majo r thumb or joint proc w CC/MCC 517 Other musculoskelet sys & c onn tiss O.R. proc w/o CC/MCC 533 Fractures of femur w MCC 534 Fractures of femur w/o MCC 619 O.R. procedures for obesity w MCC 642 Inborn errors of metabolism 660 Kidney & ureter procedures for non-neoplasm w CC 663 Minor bladder procedures w CC 665 Prostatectomy w MCC 668 Transurethral procedures w MCC 685 Admit for renal dialysis 709 Penis procedures w CC/MCC 711 Testes procedures w CC/MCC 718 Other male reproductive system O. R. proc exc malignancy w/o CC/MCC 722 Malignancy, male repr oductive system w MCC 746 Vagina, cervix & vulva procedures w CC/MCC 749 Other female reproductive system O.R. procedures w CC/MCC 754 Malignancy, female re productive system w MCCCMS-1498-P 604

ProposedMSLTCDRG Proposed MS-LTC-DRG Description 802 Other O.R. proc of the blood & blood forming organs w MCC 917 Poisoning & toxic effects of drugs w MCC 928 Full thickness burn w skin gr aft or inhal inj w CC/MCC 929 Full thickness burn w skin gr aft or inhal inj w/o CC/MCC 964 Other multiple significant trauma w CC 985 Prostatic O.R. procedure unrelat ed to principal diagnosis w CC Quintile 5 20 Intracranial vascular procedures w PDX hemorrhage w MCC 38 Extracranial procedures w CC 53 Spinal disorders & injuries w/o CC/MCC 58 Multiple sclerosis & cerebellar ataxia w MCC 72 Nonspecific cerebrovascul ar disorders w/o CC/MCC 131 Cranial/facial procedures w CC/MCC 133 Other ear, nose, mouth & throat O.R. procedures w CC/MCC 164 Major chest procedures w CC 168 Other resp system O.R. procedures w/o CC/MCC 220 Cardiac valve & oth maj cardiot horacic proc w/o card cath w CC 226 Cardiac defibrillator implant w/o cardiac cath w MCC 227 Cardiac defibrillator implant w/o cardiac cath w/o MCC 237 Major cardiovascular procedures w MCC 242 Permanent cardiac pacemaker implant w MCC 248 Percutaneous cardiovasc proc w non-drug-eluting stent w MCC 260 Cardiac pacemaker revision ex cept device replacement w MCC 263 Vein ligation & stripping 286 Circulatory disorders except AMI, w card cath w MCC 294 Deep vein thrombophlebitis w CC/MCC 304 Hypertension w MCC 326 Stomach, esophageal & duodenal proc w MCC 330 Major small & large bowel procedures w CC 335 Peritoneal adhesiolysis w MCC 345 Minor small & large bowel procedures w CC 350 Inguinal & femoral hernia procedures w MCC 405 Pancreas, liver & shunt procedures w MCC 408 Biliary tract proc except only cholecyst w or w/o c.d.e. w MCC 411 Cholecystectomy w c.d.e. w MCC 416 Cholecystectomy except by laparoscope w/o c.d.e. w/o CC/MCC 417 Laparoscopic cholecystectomy w/o c.d.e. w MCC 418 Laparoscopic cholecystectomy w/o c.d.e. w CC 423 Other hepatobiliary or panc reas O.R. procedures w MCCCMS-1498-P 605

ProposedMSLTCDRG Proposed MS-LTC-DRG Description 424 Other hepatobiliary or panc reas O.R. procedures w CC 456 Spinal fusion exc cerv w spinal curv, malig or 9+ fusions w MCC 459 Spinal fusion except cervical w MCC 466 Revision of hip or knee replacement w MCC 469 Major joint replacement or reatta chment of lower extremity w MCC 470 Major joint replacement or reattach ment of lower extremity w/o MCC 479 Biopsies of musculoskeletal syst em & connective tissue w/o CC/MCC 481 Hip & femur procedures except major joint w CC 482 Hip & femur procedures except major joint w/o CC/MCC 492 Lower extrem & humer proc except hip,foot,femur w MCC 493 Lower extrem & humer proc except hip,foot,femur w CC 498 Local excision & removal int fix devices of hip & femur w CC/MCC 507 Major shoulder or elbow joint procedures w CC/MCC 509 Arthroscopy 597 Malignant breast disorders w MCC 653 Major bladder procedures w MCC 717 Other male reproductive system O. R. proc exc malignancy w CC/MCC 725 Benign prostatic hypertrophy w MCC 761 Menstrual & other fema le reproductive system disorders w/o CC/MCC 769 Postpartum & post abortion diagnoses w O.R. procedure 823 Lymphoma & non-acute leukemia w other O.R. proc w MCC 829 Myeloprolif disord or poorly di ff neopl w other O.R. proc w CC/MCC 876 O.R. procedure w principal diagnoses of mental illness 969 HIV w extensive O.R. procedure w MCC 984 Prostatic O.R. procedure unrelat ed to principal diagnosis w MCC

* Initial composition of proposed low-volume quintiles prior to adjusting for nonmonotonicity (as discussed in step 6 in section VII.B.3.g. of this preamble). Any adjustments to the proposed low volume quintile assignments to address nonmonotonicity are identified in Table 11 of the Addendum of this proposed rule.
We note that we will continue to monitor the volume (that is, the number of

LTCH cases) in the low-volume quintiles to ensure that our quintile assignments used in

determining the proposed MS-LTC-DRG relativ e weights result in appropriate payment

for such cases and do not result in an uni ntended financial incentive for LTCHs to

inappropriately admit these types of cases.CMS-1498-P 606

g. Steps for Determining the Proposed FY 2011 MS-LTC-DRG Relative Weights

In general, we are proposing to de termine the FY 2011 MS-LTC-DRG relative

weights based on our existing methodology. For additional information on the original

development of this methodology, and modi fications to it since the adoption of the

MS-LTC-DRGs, we refer readers to the August 30, 2002 LTCH PPS final rule

(67 FR 55989 through 55995) and the FY 2010 IPPS/RY 2010 LTCH PPS final rule

(74 FR 43951 through 43966).

In summary, for FY 2011, to determine the proposed FY 2011 MS-LTC-DRG

relative weights, we are proposing to group LTCH cases to the appropriate proposed

MS-LTC-DRG, while taking into account the low-volume proposed MS-LTC-DRGs (as

described above). After grouping the cas es to the appropriate MS-LTC-DRG (or

low-volume quintile), we calculate the pr oposed FY 2011 relative weights by first

removing statistical outliers and cases with a length of stay of 7 days or less (as discussed

in greater detail below). Next, we adjustthe number of cases in each proposed

MS-LTC-DRG (or low-volume quintile) for the effect of SSO cases (step 3 below).

After removing statistical outliers (step 1 belo w) and cases with a length of stay of less

than 8 days (step 2 below), the SSO adjust ed discharges and corresponding charges are

then used to calculate "relative adjusted weights" for each proposed MS-LTC-DRG (or

low-volume quintile) using the HSRV method.

Below we discuss in detail the steps for calculating the proposed FY 2011

MS-LTC-DRG relative weights. We note that, as we stated in section VII.B.3.c. of this

preamble, we excluded the data of all-inclus ive rate LTCHs, LTCHs that are paid inCMS-1498-P 607

accordance with demonstration projects, and any Medicare Advantage claims in the

FY 2009 MedPAR file.

Step 1 --Remove statistical outliers.

The first step in the calculation of the proposed FY 2011 MS-LTC-DRG relative

weights is to remove statistical outlier cases. Consistent with our historical relative

weight methodology, we are proposing to continue to define statisti cal outliers as cases

that are outside of 3.0 standard deviations from the mean of the log distribution of both

charges per case and the charges per day for each MS-LTC-DRG. These statistical

outliers are removed prior to calculating the proposed relative weights because we

believe that they may represent aberrations in the data that distort the measure of average

resource use. Including those LTCH cases in the calculation of the proposed relative

weights could result in an inaccurate relative weight that does not truly reflect relative

resource use among the MS-LTC-DRGs. (For additional information on this step of the

relative weight methodology, we refer readers to 67 FR 55989 and 74 FR 43959.)

Step 2 --Remove cases with a length of stay of 7 days or less.

The MS-LTC-DRG relative weights reflect the average of resources used on

representative cases of a specific type. Generally, cases with a length of stay of 7 days or

less do not belong in a LTCH because these stays do not fully receive or benefit from

treatment that is typical in a LTCH stay, and full resources are often not used in the

earlier stages of admission to a LTCH. If we we re to include stays of 7 days or less in the

computation of the proposed FY 2011 MS-LTC-D RG relative weights, the value of many

proposed relative weights would decrease and, therefore, payments would decrease to aCMS-1498-P 608

level that may no longer be a ppropriate. We do not believe that it would be appropriate

to compromise the integrity of the payment determination for those LTCH cases that

actually benefit from and receive a full course of treatment at a LTCH by including data

from these very short-stays. Therefore, cons istent with our histor ical relative weight

methodology, in determining the proposed FY 2011 MS-LTC-DRG relative weights, we

are proposing to remove LTCH cases with a le ngth of stay of 7 days or less. (For

additional information on this step of the relative weight methodology, we refer readers

to 67 FR 55989 and 74 FR 43959.)

Step 3 --Adjust charges for the effects of SSOs.

After removing cases with a length of stay of 7 days or less, we are left with cases

that have a length of stay of greater than or equal to 8 days. As the next step in the

calculation of the proposed FY 2011 MS-LTC-DRG relative weights, consistent with our

historical relative weight methodology, we ar e proposing to adjust each LTCH's charges

per discharge for those remaining cases for the effects of SSOs (as defined in §412.529(a)

in conjunction with §412.503).

We make this adjustment by counting an SSO case as a fraction of a discharge

based on the ratio of the length of stay of th e case to the average length of stay for the

MS-LTC-DRG for non-SSO cases. This has th e effect of proportionately reducing the

impact of the lower charges for the SSO cases in calculating the average charge for the

MS-LTC-DRG. This process produces the sa me result as if the actual charges per

discharge of an SSO case were adjusted to wh at they would have been had the patient's

length of stay been equal to the aver age length of stay of the MS-LTC-DRG.CMS-1498-P 609

Counting SSO cases as full discharges with no adjustment in determining the

proposed RY 2011 MS-LTC-DRG relative we ights would lower the proposed FY 2011

MS-LTC-DRG relative weight for affected MS-LTC-DRGs because the relatively lower

charges of the SSO cases would bring down the average charge for all cases within an

MS-LTC-DRG. This would result in an "underpayment" for non-SSO cases and an

"overpayment" for SSO cases. Therefore, we are proposing to adjust for SSO cases

under §412.529 in this manner because it results in more appropriate payments for all

LTCH cases. (For additi onal information on this step of the relative weight

methodology, we refer readers to 67 FR 55989 and 74 FR 43959.)

Step 4 --Calculate the proposed FY 2011 MS-LTC-DRG relative weights on an

iterative basis.

Consistent with our historical relativ e weight methodology, we are proposing to

calculate the proposed FY 2011 MS-LTC-D RG relative weights using the HSRV

methodology, which is an iterativ e process. First, for each LTCH case, we calculate a

hospital-specific relative charge value by dividing the SSO adjusted charge per discharge

(see Step 3) of the LTCH case (after removing the statistical outliers (see Step 1)) and

LTCH cases with a length of stay of 7 days or less (see Step 2) by the average charge per

discharge for the LTCH in which the case occurred. The resulting ratio is then multiplied

by the LTCH's case-mix index to produce an adjusted hospital-specific relative charge

value for the case. An initial case-mix i ndex value of 1.0 is used for each LTCH.

For each proposed MS-LTC-DRG, the proposed FY 2011 relative weight was

calculated by dividing the average of the adjusted hospital-specific relative charge valuesCMS-1498-P 610

(from above) for the proposed MS-LTC-DRG by the overall average hospital-specific

relative charge value across all cases for a ll LTCHs. Using these recalculated proposed

MS-LTC-DRG relative weights, each LTCH's average relative weight for all of its cases

(that is, its case-mix) is calculated by dividi ng the sum of all the LTCH’s proposed MSLTC-DRG relative weights by its total numbe r of cases. The LTCHs' hospital-specific

relative charge values above is multiplied by these hospital-specific case-mix indexes.

These hospital-specific case-mix adjusted re lative charge values are then used to

calculate a new set of proposed MS-LTC-DRG relative weights across all LTCHs. This

iterative process was continue d until there is convergence between the weights produced

at adjacent steps, for example, when the maximum difference is less than 0.0001.

Step 5 --Determine a proposed FY 2011 relative weight for MS-LTC-DRGs with

no LTCH cases.

As we stated above, we are proposing to determine the proposed FY 2011 relative

weight for each proposed MS-LTC-DRG usin g total Medicare allowable charges reported

in the best available LTCH claims data (that is, the December 2009 update of the

FY 2009 MedPAR file for this proposed rule). Using these data, we identified a number

of proposed MS-LTC-DRGs for which there we re no LTCH cases in the database, such

that no patients who would have been classified to thos e proposed MS-LTC-DRGs were

treated in LTCHs during FY 2009 and, therefore, no charge data were available for these

proposed MS-LTC-DRGs. Thus, in the process of determining the proposed

MS-LTC-DRG relative weights, we were una ble to calculate proposed relative weights

for the proposed MS-LTC-DRGs with no LTCH cases using the methodology describedCMS-1498-P 611

in Steps 1 through 4 above. However, because patients with a number of the diagnoses

under these proposed MS-LTC-DRGs may be tr eated at LTCHs, consistent with our

historical methodology, we are proposing to a ssign a proposed relative weight to each of

the no-volume proposed MS-LTC-DRGs based on clinical similarity and relative

costliness (with the exception of “transplant” proposed MS-LTC-DRGs and “error”

proposed MS-LTC-DRGs, as discussed below). (For additional information on this step

of the relative weight methodology, we refer readers to 67 FR 55991 and 74 FR 43959

through 43960.)

In general, we determined proposed FY 2011 relative weights for the proposed

MS-LTC-DRGs with no LTCH cases in the FY 2009 MedPAR file used in this proposed

rule (that is, “no-volume” proposed MS-L TC-DRGs) by crosswalking each no-volume

proposed MS-LTC-DRG to another proposed MS-LTC-DRG with a calculated proposed

relative weight (determined in accordance w ith the methodology desc ribed above). Then,

the “no-volume” proposed MS-LTC-DRG is a ssigned the same proposed relative weight

(and average length of stay) of the propos ed MS-LTC-DRG to which it was crosswalked

(as described in greater detail below).

Of the 747 proposed MS-LTC-DRGs fo r FY 2011, we identified 223 proposed

MS-LTC-DRGs for which there were no LTCH cases in the database (including the

8 “transplant” proposed MS-LTC-DRGs and 2 “error” proposed MS-LTC-DRGs). As

stated above, we are proposing to assign proposed relative weights for each of the 213

no-volume proposed MS-LTC-DRGs (with the ex ception of the 8 “transplant” proposed

MS-LTC-DRGs and the 2 “error” proposed MS -LTC-DRGs, which are discussed below)CMS-1498-P 612

based on clinical similarity and relative costliness to one of the remaining

524 (747 - 223 = 524) proposed MS-LTC-DRGs fo r which we were able to determine

proposed relative weights based on FY 2009 LTCH claims data using the steps described

above. (For the remainder of this discussion, we refer to the proposed “crosswalked”

MS-LTC-DRGs as the proposed MS-LTC-DRGs to which we are proposing to crosswalk

one of the 213 “no volume” proposed MS-LTC -DRGs for purposes of determining a

proposed relative weight.) Then, we are proposing to assign the no-volume proposed

MS-LTC-DRG the proposed relative weight of the proposed crosswalked MS-LTC-DRG.

(As explained below in Step 6, when necessa ry, we made adjustments to account for

nonmonotonicity.)

In this proposed rule, we are proposing to use the following methodology for

determining the proposed FY 2011 relative weights for the no-volume proposed

MS-LTC-DRGs: We crosswalk the no-vol ume proposed MS-LTC-DRG to a proposed

MS-LTC-DRG for which there were LTCH cas es in the FY 2009 MedPAR file and to

which it is similar clinically in intensity of use of resources and relative costliness as

determined by criteria such as care pr ovided during the period of time surrounding

surgery, surgical approach (if applicable), length of time of surgical procedure,

postoperative care, and length of stay. We evaluate the relative costliness in determining

the applicable proposed MS-LTC-DRG to which a no-volume proposed MS-LTC-DRG

was crosswalked in order to assign an a ppropriate proposed relative weight for the

no-volume MS-LTC-DRGs in FY 2011. (For mo re detail on our pro cess for evaluating

relative costliness, we refer readers to the FY 2010 IPPS/RY 2010 LTCH PPS final ruleCMS-1498-P 613

(73 FR 48543).) We believe in the rare event that there would be a few LTCH cases

grouped to one of the no-volume proposed MS-LTC-DRGs in FY 2011, the proposed

relative weights assigned based on the crosswalked proposed MS-LTC-DRGs would

result in an appropriate LTCH PPS payment b ecause the proposed crosswalks, which are

based on similar clinical similarity and relative costliness, generally require equivalent

relative resource use.

We then assign the proposed relative weight of the crosswalked proposed MSLTC-DRG as the proposed relative weight for the no-volume proposed MS-LTC-DRG

such that both of these MS-LTC-DRGs (t hat is, the no-volume proposed MS-LTC-DRG

and the crosswalked proposed MS-LTC-DRG ) would have the same proposed relative

weight for FY 2011. We note that if th e crosswalked proposed MS-LTC-DRG had 25

cases or more, its proposed relative weight , which is calculated using the methodology

described in Steps 1 through 4 above, is assigned to the no-volume proposed MS-LTCDRG as well. Similarly, if the MS-LTC-DRG to which the no-volume proposed

MS-LTC-DRG is crosswalked has 24 or less cases and, therefore, is designated to one of

the low-volume quintiles for purposes of dete rmining the proposed relative weights, we

assign the proposed relative weight of th e applicable low-volume quintile to the

no-volume proposed MS-LTC-DRG such that both of these proposed MS-LTC-DRGs

(that is, the no-volume proposed MS-LTC -DRG and the crosswalked proposed

MS-LTC-DRG) have the same proposed rela tive weight for FY 2011. (As we noted

above, in the infrequent case where nonm onotonicity involving a no-volume proposedCMS-1498-P 614

MS-LTC-DRG results, additional measures as de scribed in Step 6 are required in order to

maintain monotonically increasing proposed relative weights.)

For this proposed rule, a list of the no-volume MS-LTC-DRGs and the proposed

MS-LTC-DRG to which it is crosswalked (t hat is, the crosswalked MS-LTC-DRG) for

FY 2011 is shown in the chart below.

Proposed No-Volume MS-LTC-DRG Crosswalk for FY 2011

ProposedMSLTCDRG Proposed MS-LTC-DRG Description ProposedCrossWalkedMS-LTCDRG 12 Tracheostomy for face,mouth & neck diagnoses w CC 147 13 Tracheostomy for face,mouth & neck diagnoses w/o CC/MCC 148 14 Allogeneic bone marrow transplant 812 15 Autologous bone marrow transplant 812 21 Intracranial vascular procedures w PDX hemorrhage w CC 65 22 Intracranial vascular procedures w PDX hemorrhage w/o CC/MCC 66

23 Craniotomy w major device implant or acute complex CNS PDX w MCC 25

24 Craniotomy w major device implant or acute complex CNS PDX w/o MCC 26 27 Craniotomy & endovascular intr acranial procedures w/o CC/MCC 26 30 Spinal procedures w/o CC/MCC 29 32 Ventricular shunt procedures w CC 31 33 Ventricular shunt procedures w/o CC/MCC 31 34 Carotid artery stent procedure w MCC 37 35 Carotid artery stent procedurew CC 38 36 Carotid artery stent procedure w/o CC/MCC 38 39 Extracranial procedures w/o CC/MCC 38 61 Acute ischemic stroke w use of thrombolytic agent w MCC 70 62 Acute ischemic stroke w use of thrombolytic agent w CC 71 63 Acute ischemic stroke w use of thrombolytic agent w/o CC/MCC 72 67 Nonspecific cva & precerebral occlusion w/o infarct w MCC 68 76 Viral meningitis w/o CC/MCC 75 79 Hypertensive encephalopathy w/o CC/MCC 305 88 Concussion w MCC 89 103 Headaches w/o MCC 149CMS-1498-P 615

ProposedMSLTCDRG Proposed MS-LTC-DRG Description ProposedCrossWalkedMS-LTCDRG 114 Orbital procedures w/o CC/MCC 125 115 Extraocular procedures except orbit 125 116 Intraocular procedures w CC/MCC 124 117 Intraocular procedures w/o CC/MCC 125 123 Neurological eye disorders 125 129 Major head & neck procedures w CC/MCC or major device 146 130 Major head & neck procedures w/o CC/MCC 148 132 Cranial/facial procedures w/o CC/MCC 156 134 Other ear, nose, mouth & throat O.R. procedures w/o CC/MCC 148 135 Sinus & mastoid procedures w CC/MCC 133 136 Sinus & mastoid procedures w/o CC/MCC 148 137 Mouth procedures w CC/MCC 158 138 Mouth procedures w/o CC/MCC 159 139 Salivary gland procedures 159 150 Epistaxis w MCC 152 165 Major chest procedures w/o CC/MCC 168 183 Major chest trauma w MCC 163 184 Major chest trauma w CC 164 185 Major chest trauma w/o CC/MCC 168 215 Other heart assist system implant 254 216 Cardiac valve & oth maj cardiothor acic proc w card cath w MCC 237 217 Cardiac valve & oth maj cardiot horacic proc w card cath w CC 253 218 Cardiac valve & oth maj cardiothorac ic proc w card cath w/o CC/MCC 254 219 Cardiac valve & oth maj cardiothor acic proc w/o card cath w MCC 237

221 Cardiac valve & oth maj cardiothor acic proc w/o card cath w/o CC/MCC 254 222 Cardiac defib implant w cardiac cath w AMI/HF/shock w MCC 242 223 Cardiac defib implant w cardiac cath w AMI/HF/shock w/o MCC 243 224 Cardiac defib implant w cardiac cath w/o AMI/HF/shock w MCC 242 228 Other cardiothoracic procedures w MCC 252 229 Other cardiothoracic procedures w CC 253 230 Other cardiothoracic procedures w/o CC/MCC 254 231 Coronary bypass w PTCA w MCC 237 232 Coronary bypass w PTCA w/o MCC 254 233 Coronary bypass w cardiac cath w MCC 237 234 Coronary bypass w cardiac cath w/o MCC 254 235 Coronary bypass w/o cardiac cath w MCC 237 238 Major cardiovascular procedures w/o MCC 254CMS-1498-P 616

ProposedMSLTCDRG Proposed MS-LTC-DRG Description ProposedCrossWalkedMS-LTCDRG 241 Amputation for circ sys disorders exc upper limb & toe w/o CC/MCC 254 245 AICD generator procedures 244 246 Percutaneous cardiovascular pr oc w drug-eluting stent w MCC 252 251 Perc cardiovasc proc w/o corona ry artery stent or AMI w/o MCC 250 257 Upper limb & toe amputation for ci rc system disorders w/o CC/MCC 254 259 Cardiac pacemaker device replacement w/o MCC 262 265 AICD lead procedures 264 285 Circulatory disorders w AMI, expired w/o CC/MCC 284 295 Deep vein thrombophlebitis w/o CC/MCC 301 296 Cardiac arrest, unexplained w MCC 291 297 Cardiac arrest, unexplained w CC 292 298 Cardiac arrest, unexplained w/o CC/MCC 293 331 Major small & large bowel procedures w/o CC/MCC 358 332 Rectal resection w MCC 347 333 Rectal resection w CC 348 334 Rectal resection w/o CC/MCC 348 337 Peritoneal adhesiolysis w/o CC/MCC 336 338 Appendectomy w complicated principal diag w MCC 372 339 Appendectomy w complicated principal diag w CC 372 340 Appendectomy w complicated principal diag w/o CC/MCC 373 341 Appendectomy w/o complicated principal diag w MCC 371 342 Appendectomy w/o complicated principal diag w CC 372 343 Appendectomy w/o complicated principal diag w/o CC/MCC 373 346 Minor small & large bowel procedures w/o CC/MCC 344 349 Anal & stomal procedures w/o CC/MCC 348 351 Inguinal & femoral hernia procedures w CC 354 352 Inguinal & femoral hernia procedures w/o CC/MCC 354 355 Hernia procedures except inguinal & femoral w/o CC/MCC 354 407 Pancreas, liver & shunt procedures w/o CC/MCC 419 410 Biliary tract proc except only chol ecyst w or w/o c.d.e. w/o CC/MCC 419 412 Cholecystectomy w c.d.e. w CC 418 413 Cholecystectomy w c.d.e. w/o CC/MCC 419 414 Cholecystectomy except by laparoscope w/o c.d.e. w MCC 417 415 Cholecystectomy except by laparoscope w/o c.d.e. w CC 418 420 Hepatobiliary diagnostic procedures w MCC 423 421 Hepatobiliary diagnos tic procedures w CC 424 422 Hepatobiliary diagnostic procedures w/o CC/MCC 424 425 Other hepatobiliary or pancreas O.R. procedures w/o CC/MCC 424CMS-1498-P 617

ProposedMSLTCDRG Proposed MS-LTC-DRG Description ProposedCrossWalkedMS-LTCDRG 434 Cirrhosis & alcoholic hepatitis w/o CC/MCC 433 453 Combined anterior/posterior spinal fusion w MCC 459 454 Combined anterior/posterior spinal fusion w CC 459 455 Combined anterior/posterior spinal fusion w/o CC/MCC 460 457 Spinal fusion exc cerv w spinal curv, malig or 9+ fusions w CC 459

458 Spinal fusion exc cerv w spinal curv, malig or 9+ fusions w/o CC/MCC 460 461 Bilateral or multiple major joint procs of lo wer extremity w MCC 480 462 Bilateral or multiple major joint procs of lo wer extremity w/o MCC 482 468 Revision of hip or knee replacement w/o CC/MCC 467 471 Cervical spinal fusion w MCC 472 473 Cervical spinal fusion w/o CC/MCC 472 483 Major joint & limb reattachment pr oc of upper extremity w CC/MCC 480 484 Major joint & limb reattachment pr oc of upper extremity w/o CC/MCC 482 488 Knee procedures w/o pdx of infection w CC/MCC 485 489 Knee procedures w/o pdx of infection w/o CC/MCC 487 508 Major shoulder or elbow jo int procedures w/o CC/MCC 517 510 Shoulder,elbow or forearm proc ,exc major joint proc w MCC 515 511 Shoulder,elbow or forearm proc ,exc major joint proc w CC 516 512 Shoulder,elbow or forearm proc,e xc major joint proc w/o CC/MCC 517 514 Hand or wrist proc, except major thumb or joint proc w/o CC/MCC 517 538 Sprains, strains, & dislocations of hip, pelvis & thigh w/o CC/MCC 537 582 Mastectomy for malignancy w CC/MCC 597 583 Mastectomy for malignancy w/o CC/MCC 596 585 Breast biopsy, local excision & other breast procedures w/o CC/MCC 605 599 Malignant breast disorders w/o CC/MCC 601 614 Adrenal & pituitary procedures w CC/MCC 629 615 Adrenal & pituitary pr ocedures w/o CC/MCC 630

618 Amputat of lower limb for endoc rine,nutrit,& metabol dis w/o CC/MCC 617 620 O.R. procedures for obesity w CC 619 621 O.R. procedures for obesity w/o CC/MCC 619 626 Thyroid, parathyroid & thyroglossal procedures w CC 625 627 Thyroid, parathyroid & thyroglossal procedures w/o CC/MCC 625 654 Major bladder procedures w CC 660 655 Major bladder procedures w/o CC/MCC 660 657 Kidney & ureter procedures forneoplasm w CC 656 658 Kidney & ureter procedures for neoplasm w/o CC/MCC 656CMS-1498-P 618

ProposedMSLTCDRG Proposed MS-LTC-DRG Description ProposedCrossWalkedMS-LTCDRG 661 Kidney & ureter procedures for non-neoplasm w/o CC/MCC 660 662 Minor bladder procedures w MCC 663 664 Minor bladder procedures w/o CC/MCC 663 666 Prostatectomy w CC 665 667 Prostatectomy w/o CC/MCC 665 670 Transurethral procedures w/o CC/MCC 669 672 Urethral procedures w/o CC/MCC 671 688 Kidney & urinary tract neoplasms w/o CC/MCC 687 691 Urinary stones w esw lithotripsy w CC/MCC 693 692 Urinary stones w esw lithotripsy w/o CC/MCC 694 707 Major male pelvic procedures w CC/MCC 659 708 Major male pelvic pr ocedures w/o CC/MCC 660 712 Testes procedures w/o CC/MCC 711 714 Transurethral prostatectomy w/o CC/MCC 669 715 Other male reproductive system O.R. proc for malignancy w CC/MCC 717

716 Other male reproductive system O. R. proc for malignancy w/o CC/MCC 718 724 Malignancy, male reprod uctive system w/o CC/MCC 723 734 Pelvic evisceration, rad hysterectomy & rad vulvectomy w CC/MCC 749 735 Pelvic evisceration, rad hysterectomy & rad vulvectomy w/o CC/MCC 749 736 Uterine & adnexa proc for ovari an or adnexal malignancy w MCC 749 737 Uterine & adnexa proc for ovari an or adnexal malignancy w CC 755

738 Uterine & adnexa proc for ovari an or adnexal malignancy w/o CC/MCC 755 739 Uterine,adnexa proc for non- ovarian/adnexal malig w MCC 628 740 Uterine,adnexa proc for non- ovarian/adnexal malig w CC 629 741 Uterine,adnexa proc for non-ova rian/adnexal malig w/o CC/MCC 630 742 Uterine & adnexa proc for non-malignancy w CC/MCC 629 743 Uterine & adnexa proc for non-malignancy w/o CC/MCC 630 744 D&C, conization, laparascopy & tubal interruption w CC/MCC 749 745 D&C, conization, laparascopy & tubal interruption w/o CC/MCC 749 747 Vagina, cervix & vulva procedures w/o CC/MCC 749 748 Female reproductive system reconstructive procedures 749 750 Other female reproductive system O.R. procedures w/o CC/MCC 749 756 Malignancy, female repr oductive system w/o CC/MCC 755 765 Cesarean section w CC/MCC 749 766 Cesarean section w/o CC/MCC 749 767 Vaginal delivery w sterilization &/or D&C 749CMS-1498-P 619

ProposedMSLTCDRG Proposed MS-LTC-DRG Description ProposedCrossWalkedMS-LTCDRG 768 Vaginal delivery w O.R. proc except steril &/or D&C 749 770 Abortion w D&C, aspiration curettage or hysterotomy 749 774 Vaginal delivery w complicating diagnoses 749 775 Vaginal delivery w/o complicating diagnoses 749 777 Ectopic pregnancy 776 778 Threatened abortion 776 779 Abortion w/o D&C 776 780 False labor 776 782 Other antepartum diagnoses w/o medical complications 781 789 Neonates, died or transferred to another acute care facility 781 790 Extreme immaturity or respirat ory distress syndrome, neonate 781 791 Prematurity w major problems 781 792 Prematurity w/o major problems 781 793 Full term neonate w major problems 781 794 Neonate w other significant problems 781 795 Normal newborn 781 799 Splenectomy w MCC 802 800 Splenectomy w CC 802 801 Splenectomy w/o CC/MCC 802 803 Other O.R. proc of the blood & blood forming organs w CC 802 804 Other O.R. proc of the blood & blood forming organs w/o CC/MCC 802

810 Major hematol/immun diag exc sickle cell crisis & coagul w/o CC/MCC 812 816 Reticuloendothelial & immunity disorders w/o CC/MCC 815 820 Lymphoma & leukemia w majo r O.R. procedure w MCC 821 822 Lymphoma & leukemia w major O.R. procedure w/o CC/MCC 821 825 Lymphoma & non-acute leukemia w other O.R. proc w/o CC/MCC 824 826 Myeloprolif disord or poorly di ff neopl w maj O.R. proc w MCC 827 828 Myeloprolif disord or poorly diff neopl w maj O.R. proc w/o CC/MCC 827

830 Myeloprolif disord or poorly diff neopl w other O.R. proc w/o CC/MCC 829 837 Chemo w acute leukemia as sdx or w high dose chemo agent w MCC 846 838 Chemo w acute leukemia as sdx or w high dose chemo agent w CC 847

839 Chemo w acute leukemia as sdx or w high dose chemo agent w/o CC/MCC 847

848 Chemotherapy w/o acute leukemia as secondary diagnosis w/o CC/MCC 847 894 Alcohol/drug abuse or dependence, left ama 897CMS-1498-P 620

ProposedMSLTCDRG Proposed MS-LTC-DRG Description ProposedCrossWalkedMS-LTCDRG 895 Alcohol/drug abuse or depende nce w rehabilitation therapy 897 916 Allergic reactions w/o MCC 915 927 Extensive burns or full thickness bur ns w MV 96+ hrs w skin graft 928 955 Craniotomy for multiple significant trauma 25 956 Limb reattachment, hip & femur proc for multiple significant trauma 480 958 Other O.R. procedures for mu ltiple significant trauma w CC 957 959 Other O.R. procedures for multiple significant trauma w/o CC/MCC 957 986 Prostatic O.R. procedure unrelated to principal diagnosis w/o CC/MCC 985

To illustrate this methodology for dete rmining the proposed relative weights for

the proposed FY 2011 MS-LTC-DRGs with no LTCH cases, we are providing the

following example, which refers to th e no-volume proposed MS-LTC-DRGs crosswalk

information for FY 2011 provided in the chart above.

Example : There were no cases in the FY 2009 MedPAR file used for this

proposed rule for MS-LTC-DRG 61 (Acute Isch emic Stroke with Use of Thrombolytic

Agent with MCC). We determined th at proposed MS-LTC-DRG 70 (Nonspecific

Cebrovascular Disorders with MCC) was simila r clinically and based on resource use to

MS-LTC-DRG 61. Therefore, we assigned the same proposed relative weight of

MS-LTC-DRG 70 of 0.9204 for FY 2011 to MS-LTC-DRG 61 (Table 11 of the

Addendum to this proposed rule).

Furthermore, for FY 2011, consistent with our historical relative weight

methodology, we are proposing to establis h MS-LTC-DRG relative weights of 0.0000 for

the following transplant proposed MS-LTC-DRGs: Heart Transplant or Implant of Heart

Assist System with MCC (proposed MS-LTC-D RG 1); Heart Transplant or Implant ofCMS-1498-P 621

Heart Assist System without MCC (proposed MS-LTC-DRG 2); Liver Transplant with

MCC or Intestinal Transplant (proposed MS-LTC-DRG 5); Liver Transplant without

MCC (proposed MS-LTC-DRG 6); Lung Transplant (proposed MS-LTC-DRG 7);

Simultaneous Pancreas/Kidne y Transplant (proposed MS-LTC-DRG 8); Pancreas

Transplant (proposed MS-LTC-DRG 10); a nd Kidney Transplant (proposed MS-LTCDRG 652). This is because Medicare will onl y cover these procedures if they are

performed at a hospital that has been certifie d for the specific procedures by Medicare

and presently no LTCH has been so certified. At the present time, we only include these

eight transplant MS-LTC-DRGs in the GR OUPER program for administrative purposes

only. Because we use the same GROUPER program for LTCHs as is used under the

IPPS, removing these MS-LTC-DRGs would be administratively burdensome. (For

additional information regarding our treatment of transplant MS-LTC-DRGs, we refer

readers to the RY 2010 LTCH PPS final rule (74 FR 43964).) Again, we note that, as

this system is dynamic, it is entirely possi ble that the number of MS-LTC-DRGs with no

volume of LTCH cases based on the system will vary in the future. We used the most

recent available claims data in the MedPAR file to identify no-volume MS-LTC-DRGs

and to determine the proposed rela tive weights in this proposed rule.

Step 6 --Adjust the proposed FY 2011 MS-LTC-D RG relative weights to account

for nonmonotonically increasing relative weights.

As discussed earlier in this section, th e MS-DRGs contain base DRGs that have

been subdivided into one, two, or three severi ty of illness levels. Where there are three

severity levels, the most severe level has at least one code that is referred to as an MCCCMS-1498-P 622

(that is, major complication or comorbidity). The next lower severity level contains cases

with at least one code that is a CC (that is , complication or comorbidity). Those cases

without an MCC or a CC are referred to as “without CC/MCC.” When data do not

support the creation of three severity levels, the base DRG is subdivided into either two

levels or the base DRG is not subdivided. The two-level subdi visions could consist of the

with CC/MCC and the without CC/MCC. Alte rnatively, the other type of two-level

subdivision may consist of the MCC and without MCC.

In those base MS-LTC-DRGs that are split into either two or three severity levels,

cases classified into the “without CC/MCC” MS-LTC-DRG are expected to have a lower

resource use (and lower costs) than the “w ith CC/MCC” MS-LTC-DRG (in the case of a

two-level split) or both the “with CC” and the “with MCC” MS-LTC-DRGs (in the case

of a three-level split). That is, theoretically, cases that are more severe typically require

greater expenditure of medical care resources and will result in higher average charges.

Therefore, in the three severity levels, rela tive weights should increase by severity, from

lowest to highest. If the relative weights decrease as severity decreased (that is, if within

a base MS-LTC-DRG, an MS-LTC-DRG with CC has a higher relative weight than one

with MCC, or the MS-LTC-DRG without CC/ MCC has a higher relative weight than

either of the others), they are nonmonotonic. We continue to believe that utilizing

nonmonotonic relative weights to adjust Medicare payments would resu lt in inappropriate

payments because the payment for the cases in the higher severity level in a base

MS-LTC-DRG (which are generally expected to have higher resource use and costs)

would be lower than the payment for cases in a lower severity level within the same baseCMS-1498-P 623

MS-LTC-DRG (which are generally expected to have lower resource use and costs)

.
Consequently, in determining the proposed FY 2011 MS-LTC-DRG relative weights in

this proposed rule, consistent with our hi storical methodology, we are proposing to

combine MS-LTC-DRG severity levels with in a base MS-LTC-DRG for the purpose of

computing a relative weight when necessary to ensure that monotonicity is maintained.

For a comprehensive description of our existing methodology to adjust for

nonmonotonicity, we refer readers to the FY 2010 IPPS/RY 2010 LTCH PPS final rule

(74 FR 43964 through 43966). Any adjustment s for nonmonotonicity that were made in

determining the proposed FY 2011 MS-LTC-DRG relative weights in this proposed rule

by applying this methodology are denoted in Table 11 of the Addendum to this proposed

rule.

Step 7 -- Calculate the proposed FY 2011 budget neutrality factor.

As we established in the RY 2008 LTCH PPS final rule (72 FR 26882), under the

broad authority conferred upon the Secretary to develop the LTCH PPS under section

123 of Pub. L. 106-113, as amended by secti on 307(b) of Pub. L. 106-554, beginning

with the MS-LTC-DRG update for FY 2008, the annual update to the MS-LTC-DRG

classifications and relative weig hts is done in a budget neutral manner such that estimated

aggregate LTCH PPS payments would be unaffected, that is, would be neither greater

than nor less than the estimated aggregate LTCH PPS payments that would have been

made without the MS-LTC-DRG classifica tion and relative weight changes (§412.517(b)

in conjunction with §412.503). (For a detaile d discussion on the establishment of theCMS-1498-P 624

budget neutrality requirement to update the MS-LTC-DRG classifi cations and relative

weights, we refer readers to the RY 2008 LTCH PPS final rule (72 FR 26881).)

The MS-LTC-DRG classi fications and relative we ights are updated annually

based on the most recent availa ble LTCH claims data to reflect changes in relative LTCH

resource use (§412.517(a) in accordance w ith §412.503). Under the budget neutrality

requirement at §412.517(b), for each annual update, the MS-LTC-DRG relative weights

are uniformly adjusted to ensure that estimated aggregate payments under the LTCH PPS

would not be affected (that is, decreased or increased). Consistent with that provision,

we are proposing to update the proposed MS -LTC-DRG classifications and relative

weights for FY 2011 based on the most recent available LTCH data, and to apply a

budget neutrality adjustment in deter mining the proposed FY 2011 MS-LTC-DRG

relative weights.

To ensure budget neutrality in the proposed update to the MS-LTC-DRG

classifications and relative weights under §412.517(b), we are proposing to continue to

use our established two-step budge t neutrality methodology. Specifically, in the first step

of our MS-LTC-DRG budget neutrality methodology, we calculate and apply a

normalization factor to the proposed recalibrate d relative weights (the result of Steps 1

through 6 above) to ensure that estimated paym ents are not influenced by changes in the

composition of case types or the changes to the classification system. That is, the

normalization adjustment is in tended to ensure that the recalibration of the proposed

MS-LTC-DRG relative weights (that is, the pr ocess itself) neither increases nor decreases

the average CMI.CMS-1498-P 625

To calculate the proposed normalization f actor for FY 2011 (the first step of our

budget neutrality methodology), we are proposin g to use the following three steps:

(1.a.) we use the most recent available LTCH claims data (FY 2009) and group them

using the proposed FY 2011 GROUPER (Version 28.0) and the proposed recalibrated

FY 2011 MS-LTC-DRG relative weights (determi ned in steps 1 through 6 of the Steps

for Determining the Proposed FY 2011 MS -LTC-DRG Relative Weights above) to

calculate the average CMI; (1.b.) we group th e same LTCH claims data (FY 2009) using

the FY 2010 GROUPER (Version 27.0) and FY 2010 MS-LTC-DRG relative weights

and calculate the average CMI; and (1.c) we compute the ratio of these average CMIs by

dividing the average CMI for FY 2010 (determined in Step 1.b.) by the average CMI for

FY 2011 (determined in step 1.a.). In dete rmining the proposed MS-LTC-DRG relative

weights for FY 2011, each recalibrated MS-L TC-DRG relative weight is multiplied by

1.10362 in the first step of the budget neutrality methodology, which produces

"normalized relative weights."

In the second step of our MS-LTC -DRG budget neutrality methodology, we

determine a budget neutrality factor to ensure that estimated aggregate LTCH PPS

payments (based on the most recent available LTCH claims data) after reclassification

and recalibration (that is, the proposed FY 2011 MS-LTC-DRG classifications and

relative weights) are equal to estimated aggregate LTCH PPS payments before

reclassification and recalibration (that is, th e FY 2010 MS-LTC-DRG classifications and

relative weights). Accordingly, consiste nt with our existing methodology, we are

proposing to use FY 2009 discharge data to simulate payments and compare estimatedCMS-1498-P 626

aggregate LTCH PPS payments using the FY 2010 MS-LTC-DRGs and relative weights

to estimate aggregate LTCH PPS payments using the proposed FY 2011 MS-LTC-DRGs

and relative weights. As noted above, the mo st recent available LTCH claims data for

this proposed rule are from the December 2009 update of the FY 2009 MedPAR file.

Consistent with our historical policy of usin g the best available data, we are proposing to

use the most recently available claims data for determining the budget neutrality

adjustment factor in the final rule.

For this proposed rule, we determined the proposed FY 2011 budget neutrality

adjustment factor rule using the following thr ee steps: (2.a.) we simulate estimated total

LTCH PPS payments using the normalized proposed relative weights for FY 2011 and

GROUPER Version 28.0 (as described above); (2.b.) we simulate estimate d total LTCH

PPS payments using the FY 2010 GROUPER (Version 27.0) and the FY 2010

MS-LTC-DRG relative weights shown in Table 11 of the FY 2010 IPPS/RY 2010 LTCH

PPS final rule (74 FR 44183 through 44192); and ( 2.c.) we calculate the ratio of these

estimated total LTCH PPS payments by dividing the estimated total LTCH PPS payments

using the FY 2010 GROUPER (Version 27.0) and the FY 2010 MS-LTC-DRG relative

weights (determined in step 2.b.) by the estimated total LTCH PPS payments using the

proposed FY 2011 GROUPER (Version 28.0) and the normalized proposed

MS-LTC-DRG relative weights for FY 2011 (det ermined in Step 2.a.). In determining

the proposed FY 2011 MS-LTC-DRG relative weights, each normalized proposed

relative weight is multiplied by a budget neut rality factor of 0.987575 in the second stepCMS-1498-P 627

of the budget neutrality methodology to de termine the proposed budget neutral FY 2011

relative weight for each MS-LTC-DRG.

Accordingly, in determining the proposed FY 2011 MS-LTC-DRG relative

weights in this proposed rule, consistent with our existing methodology, we are proposing

to apply a normalization factor of 1.10 362 and a budget neutrality factor of 0.987575

(computed as described above).

Table 11 in the Addendum to this proposed rule lists the proposed

MS-LTC-DRGs and their respective proposed rela tive weights, geometric mean length of

stay, and five-sixths of the geometric mean length of stay (used in determining SSO

payments under §412.529) for FY 2011. The proposed FY 2011 MS-LTC-DRG relative

weights in Table 11 in the Addendum to th is proposed rule reflect both the proposed

normalization factor of 1.10362 and the pr oposed budget neutrality factor of 0. 987575.

C. Proposed Changes to the LTCH Payment Rates and Other Changes to the FY 2011

LTCH PPS

1. Overview of Development of the LTCH Payment Rates

The LTCH PPS was effective beginning with a LTCH's first cost reporting period

beginning on or after October 1, 2002. Effec tive beginning with that cost reporting

period, LTCHs were paid, during a 5-year tr ansition period, a total LTCH prospective

payment that was comprised of an increasing proportion of the LTCH PPS Federal rate

and a decreasing proportion based on reasonable cost-based principles, unless the hospital

made a one-time election to receive payment based on 100 percent of the Federal rate, asCMS-1498-P 628

specified in §412.533. New LTCHs (as defi ned at §412.23(e)(4)) are paid based on

100 percent of the Federal rate, w ith no phase-in transition payments.

The basic methodology for determining LTCH PPS Federal prospective payment

rates is set forth at §412.515 through §412.536. In this section, we discuss the factors

that would be used to update the LTCH PPS standard Federal rate for the FY 2011 that

would be effective for LTCH discharges o ccurring on or after October 1, 2010 through

September 30, 2011.

For further details on the development of the FY 2003 standard Federal rate, we

refer readers to the August 30, 2002 LTCH PPS final rule (67 FR 56027 through 56037),

and for subsequent updates to the LTCH PPS Federal rate, we refer readers to the

following final rules: RY 2004 LTCH PPS final rule (68 FR 34134 through 34140),

RY 2005 LTCH PPS final rule (69 FR 25682 through 25684), RY 2006 LTCH PPS final

rule (70 FR 24179 through 24180), RY 2007 LTCH PPS final rule (71 FR 27819 through

27827), RY 2008 LTCH PPS final rule ( 72 FR 26870 through 27029), RY 2009 LTCH

PPS final rule (73 FR 26800 through 26804), and RY 2010 LTCH PPS final rule (74 FR

44021 through 44030). The proposed update to the LTCH PPS standard Federal rate for

FY 2011 is presented in section V.A. of the Addendum to this proposed rule. The two

components of the proposed update to the LTCH PPS standard Federal rate for FY 2011

are discussed below.

2. Market Basket for LTCHs Reimbursed under the LTCH PPS

a. OverviewCMS-1498-P 629

Historically, the Medicare program has used a market basket to account for price

increases in the services furnished by provide rs. The market basket used for the LTCH

PPS includes both operating and capital-related costs of LTCHs because the LTCH PPS

uses a single payment rate for both operating and capital-related costs. With the initial

implementation of the LTCH PPS for FY 2003, we established the use of the excluded

hospital with capital market basket as the LTCH PPS market basket (67 FR 56016

through 56017). The development of the initial LTCH PPS standard Federal rate for

FY 2003, using the excluded hospital with capital market basket, is discussed in further

detail in the August 30, 2002 LTCH PPS final rule (67 FR 56027 through 56033). For

further details on the development of the excl uded hospital with capital market basket, we

refer readers to the RY 2004 LTCH PPS final rule (68 FR 34134 through 34137).

Beginning in RY 2007, we adopted the re habilitation, psychiatric, long-term care

(RPL) hospital market basket based on FY 2002 da ta as the appropriate market basket of

goods and services under the LTCH PPS for discharges occurring on or after

July 1, 2006. As discussed in the RY 2007 LTCH PPS final rule (71 FR 27810), based

on our research, we did not deve lop a market basket specific to LTCH services. We were

unable to create a separate market basket specifically for LTCHs at that time due to the

small number of facilities and the limited amount of da ta that was reported.

For further details on the development of the FY 2002-based RPL market basket,

we refer readers to the RY 2007 LTCH PPS final rule (71 FR 27810 through 27817).

b. Market Basket under the LTCH PPS for FY 2011CMS-1498-P 630

When we initially created the FY 2002-ba sed RPL market bask et, we were unable

to create a separate market basket specifically for LTCHs due, in part, to the small

number of facilities and the limited data that were provided in the Medicare cost reports.

Over the last several years, however, the number of LTCH facilities submitting valid

Medicare cost report data has increased. Based on this development, as well as our desire

to move from one RPL market basket to th ree stand-alone and pr ovider-specific market

baskets (for IRFs, IPFs, and LTCHs, respectively), we plan to begin exploring the

viability of creating these market baskets for future use. However, as we discussed in the

RY 2010 LTCH PPS final rule (74 FR 43967 through 43968), we are conducting further

research to assist us in understanding the re asons for the variations in costs and cost

structure between freestanding IRFs and hosp ital-based IRFs. We also are researching

the reasons for similar variations in costs and cost structure between freestanding IPFs

and hospital-based IPFs. Therefore, as we continue to explore the development of

stand-alone market baskets for LTCHs, IRFs a nd IPFs, respectively, we believe that it is

appropriate to conti nue to use the FY 2002-based RPL market basket for LTCHs, IRFs

and IPFs under their respective PPSs.

In addition, for the reasons discussed when we adopted the RPL market basket for

use under the LTCH PPS in the RY 2007 LTCH PPS final rule (71 FR 27810 through

27817), we continue to be lieve that the RPL market basket appropriately reflect the cost

structure of LTCHs. For the reasons expl ained above, in this proposed rule, we are

proposing to continue to use the FY 2002-based RPL market basket under the LTCH PPS

for FY 2011. We are hopeful that progress can be made in the near future with respect toCMS-1498-P 631

creating stand-alone market baskets for LTCH s, IRFs, and IPFs and, as a result, may

propose to rebase the appropria te market basket(s) for subs equent updates in the future.

c. Proposed Market Basket Update for LTCHs for FY 2011

Consistent with our historical practice, we estimate the RPL market basket update

based on IHS Global Insight, Inc.’s forecast using the most recent available data. IHS

Global Insight, Inc. is a nationally recogn ized economic and financial forecasting firm

that contracts with CMS to forecast the co mponents of the hospital market baskets.

Based on IHS Global Insight Inc.’s first quarter 2010 forecast, the proposed FY 2011

market basket estimate for the LTCH PPS using the FY 2002-based RPL market basket is

2.4 percent. Consistent with our historical practice of using market basket estimates

based on the most recent ava ilable data, we are proposing th at if more recent data are

available when we develop the final rule, we would use such data, if appropriate. (We

note that in section V. of the Addendum to this proposed rule, for FY 2011, we are

proposing to update the LTCH PPS standard Federal rate by -0.1 percent. This proposed

update reflects an adjustment based on the most recent market basket estimate (currently

2.4 percent, as discussed above ) and a proposed adjustment to account for the increase in

case-mix in the prior periods (FYs 2008 thro ugh 2009) that resulted from changes in

documentation and coding practices rather than increases in patients’ severity of illness.)

d. Proposed Labor-Related Share under the LTCH PPS for FY 2011

As discussed in section V.B. of the Addendum to this proposed rule, under the

authority of section 123 of the BBRA as am ended by section 307(b) of the BIPA, we

established an adjustment to the LTCH PPS payments to account for differences inCMS-1498-P 632

LTCH area wage levels at §412.525(c). Th e labor-related portion of the LTCH PPS

Federal rate, hereafter referred to as the labor -related share, is adjusted to account for

geographic differences in area wage levels by applying the applicable LTCH PPS wage

index.

The labor-related share is determined by identifying the national average

proportion of operating and capital costs that are related to, influenced by, or vary with

the local labor market. We continue to cla ssify a cost category as labor-related if the

costs are labor-intensive and vary with the local labor market. Consistent with our

proposal to continue to use the FY 2002-based RPL market basket under the LTCH PPS

for FY 2011 discussed above, we are proposing to continue to defi ne the labor-related

share as the national average proportion of oper ating costs that are attributable to wages

and salaries, employee benefits , contract labor, professional fe es, labor-intensive services,

and a labor-related portion of capital based on the FY 2002-based RPL market basket.

(Additional information on the development of the FY 2002-based RPL market basket

used under the LTCH PPS can be found in the RY 2007 LTCH PPS final rule

(71 FR 27809 through 27818).)

Furthermore, for FY 2011, we are proposing to continue to define the LTCH PPS

labor-related share as the national average proportion of operating costs (wages and

salaries, employee benefits, pr ofessional fees, and all other la bor-intensive services) and a

labor-related portion of capita l costs based on the FY 2002-based RPL market basket.

Consistent with our historical practice of us ing the best available data, we are proposing

to use IHS Global Insight, Inc.’s first qua rter 2010 forecast of the FY 2002-based RPLCMS-1498-P 633

market basket for FY 2011 to determine the proposed labor-related share for the LTCH

PPS for FY 2011 that would be effective for discharges occurring on or after

October 1, 2010, and through September 30, 2011, as these are the most recent available

data.

The proposed labor-related share for FY 2011 would be the sum of the proposed

FY 2011 relative importance of each labor-relat ed cost category, and would reflect the

different rates of price change for these co st categories between th e base year (FY 2002)

and FY 2011. The sum of the proposed re lative importance for FY 2011 for operating

costs (wages and salaries, employee be nefits, professional fees, and all-other

labor-intensive services) would be 71.537 percen t, as shown in the chart below. The

portion of capital that is influenced by the local labor market is estimated to be

46 percent. Because the relative importa nce for capital in FY 2011 would be 8.414

percent of the FY 2002-based RPL market bask et, we are proposing to take 46 percent of

8.414 percent to determine the proposed labor-related share of capital for FY 2011. The

result would be 3.870 percent, which we are proposing to add to 71.537 percent for the

operating cost amount to determine the tota l proposed labor-related share for FY 2011.

Thus, the labor-related share that we are proposing to use for LTCH PPS in FY 2011

would be 75.407 percent.

The chart below shows the proposed FY 2011 relative importance labor-related

share using the FY 2002-based RPL market basket.

Proposed FY 2011 Labor-Related Share Based on the FY 2002-Based RPL Market BasketCMS-1498-P 634

Cost Category FY 2011 Relative Importance (Percent) Wages and Salaries 52.590 Employee Benefits 13.987 Professional Fees: 2.848 All Other Labor-Intensive Services 2.112 Subtotal 71.537 Labor-Related Share of Capital Costs (46 percent x 8.414) 3.870 Total Labor-Related Share 75.407

Accordingly, under the authority set fort h in section 123 of the BBRA as amended

by section 307(b) of the BIPA, we are propos ing to establish a labor-related share of

75.407 percent under the LTCH PPS for the FY 2011. Furthermore, consistent with our

historical practice of using the best data av ailable, we also are proposing that if more

recent data are available to determine the labor-related share used under the LTCH PPS

for FY 2011, we would use these data for determining the FY 2011 LTCH PPS

labor-related share in the final rule.

3. Proposed Adjustment for Changes in LTCHs’ Case-Mix Due to Changes in

Documentation and Coding Practices That Occurred in a Prior Period

a. Background

Beginning in RY 2007, in updating the standard Federal rate for the LTCH PPS,

we have accounted for increases in payments from a past period that were due to changes

in case-mix due to changes in documentati on and coding practices. For additional

information on the adjustments established for changes in LTCHs’ case-mix due to

changes in documentation and coding practices that occurred in a prior period, we referCMS-1498-P 635

readers to the following final rules published in the Federal Register : the RY 2007

LTCH PPS final rule (71 FR 27820); the RY 2008 LTCH PPS final rule (72 FR 26880

through 26890); the RY 2009 LTCH PPS final rule (73 FR 26805 through 26812); and

the FY 2010IPPS/RY 2010 LTCH PPS final rule (74 FR 43969 through 43970).

For RY 2010, we performed an analysis of LTCHs’ case-mix index (CMI)

changes in the prior periods (FY 2007 and FY 2008) and established a methodology to

determine if an adjustment to account for ch anges in documentation and coding practices

was applicable (74 FR 43969 through 43970). This methodology is consistent with the

methodology established for case-mix analysis under the IPPS. In general, under our

established methodology, in order to isolat e the documentation and coding effect, we

divided the combined effect of the ch anges in documentation and coding and

measurement by the measurement effect (74 FR 43970).

For the RY 2010 LTCH PPS proposed rule, we performed a retrospective

evaluation of the FY 2007 and FY 2008 data for LTCH claims paid through December

2008. Based on this evaluation, our actuaries determined that case-mix increased

0.5 percent in FY 2007 and 1.3 percent in FY 2008 due to documentation and coding that

did not reflect real changes in case-mix. In light of this analysis, in the RY 2010 LTCH

PPS proposed rule, we proposed to apply a cumulative adjustment for changes in

documentation and coding that do not reflect an increase in patients’ severity of illness of

-1.8 percent (that is, -0.5 percent for FY 2007 plus -1.3 percent for FY 2008). We also

invited public comment on our proposed methodology and analysis. (For additional

information on our methodology and the results of the retrospective evaluation, we referCMS-1498-P 636

reader to sections VIII.C.3. of the pr eamble of the FY 2010 IPPS/RY 2010 LTCH PPS

proposed and final rules (74 FR 24229 through 24230 and 74 FR 43970 through 43972,

respectively).)

In the FY 2010 IPPS/LTCH PPS final rule, we responded to comments on our

methodology for the retrospective evaluation of FY 2007 and FY 2008 claims data, as

well as our proposed -1.8 percent documenta tion and coding adjustment for RY 2010. In

that same final rule, we finalized our pr oposal and established an adjustment of

-0.5 percent to account for the documentati on and coding increase that occurred in

FY 2007. However, after consideration of public comments, and c onsistent with the

decision to postpone the application of the prospective adjustment for estimated FY 2008

documentation and coding increases under the IPPS, we delayed the application of the

FY 2008 documentation and coding adjustment of -1.3 percent that was proposed under

the LTCH PPS for RY 2010. We also stated our intent to address any future

documentation and coding adjustment to the LTCH PPS standard Federal rate based on

our analysis of the FY 2008 LTCH claims da ta in the FY 2011 rulemaking cycle through

the notice-and-comment rulemaking process. (74 FR 43970 through 43972)

b. Evaluation of FY 2009 Claims Data

For this proposed rule, we have performed a thorough retrospective evaluation of

the most recent available claims data (tha t is, FY 2009 claims updated through December

2009) using the methodology that was adopted in the FY 2010 IPPS/RY 2010 LTCH PPS

final rule and that was used to assess whet her an adjustment for RY 2010 to account for

changes in documentation and coding practi ces that occurred in a prior period wasCMS-1498-P 637

appropriate. (We refer readers to the expl anation of our rationa le for adopting this

methodology as well as its intended purpose in the FY 2010 IPPS/RY 2010 LTCH PPS

final rule (74 FR 43970 through 43972).)

We performed this analysis by first di viding the CMI obtained by grouping the

FY 2009 LTCH claims through the FY 2009 GROUPER (Version 26.0) by the CMI

obtained by grouping these same FY 2009 LTCH claims through the FY 2007

GROUPER (Version 24.0). This resulted in a value of 1.0248. Because this CMI

analysis is based on the same FY 2009 cases grouped using the Versions 24.0 and 26.0 of

the GROUPER, we attribute this increase in average CMI primarily to two factors:

(1) the effect of changes in documentati on and coding under the MS-DRG system; and

(2) the measurement effect from the calibra tion of the GROUPER. Next, we estimated

the measurement effect from the calibrati on of the GROUPER by dividing the CMI

obtained by grouping the FY 2007 LTCH claims through the FY 2009 GROUPER

(Version 26.0) by the CMI obtained by grouping these same LTCH claims through the

FY 2007 GROUPER (Version 24.0). This resulted in a value of 0.9999. In order to

isolate the documentation and coding effect, we then divided the combined effect of the

changes in documentation and coding measur ement (1.0248) by the measurement effect

(0.9999) to yield 1.025. Therefore, based on the re sults of this analysis, we estimate that

the cumulative effect of documentation and coding changes that occurred in FYs 2008

and 2009 was 2.5 percent. We note that, in a pplying the methodology we established for

determining the effects of documentation and coding in the FY 2010 IPPS/RY 2010

LTCH PPS proposed and final rules, we applied such methodology separately to FY 2007CMS-1498-P 638

and FY 2008 LTCH claims data because thos e data were genera ted under different

patient classification systems (that is, FY 2007 was the last year under the CMS LTCDRGs and FY 2008 was the first year under the MS-LTC-DRGs). Because the same

patient classification system was in eff ect for both FY 2008 and FY 2009 (that is, the

MS-LTC-DRGs), consistent with the app lication of this methodology under the IPPS

(discussed in section II.D.5. of this preamble) , we believe it is appr opriate to propose to

apply our established methodology for de termining the cumulative effects of

documentation and coding for FYs 2008 and 2009, rather than proposing to applying the

methodology separately to FY 2008 and FY 2009 LTCH claims data. We seek public

comment on our proposal to determine the cumulative effects of documentation and

coding in FYs 2008 and 2009. (We note that the FY 2007 and FY 2009 (as well as

FY 2008) MedPAR files are available to the publ ic to allow independent analysis of the

documentation and coding effect in FYs 2008 and 2009.)

c. Proposed FY 2011 Documentation and Coding Adjustment

Based on analysis of the most recent available LTCH claims data as described

above, we are proposing to apply a cumulative adjustment for changes in documentation

and coding in a prior period (FYs 2008 and 2009) that do not reflect an increase in

patients’ severity of illness of -2.5 percent. Accordingl y, as discussed in section V.A.2.

of the Addendum to this proposed rule, we are proposing to update the proposed FY 2011

LTCH PPS standard Federal ra te by -0.1 percent, which is based on the most recent

estimate of the market basket increase (2.4 pe rcent) and a proposed adjustment to account

for changes in documentation and coding prac tices (-2.5 percent). We also are proposingCMS-1498-P 639

that if more recent data are available for the final rule, we would use those data to

establish a final update to the FY 2011 LTCH PPS standard Federal rate, if applicable.

D. Proposed Change in Terminology from “Rate Year” to “Fiscal Year” and Other

Proposed Changes

Beginning with the annual update to the LTCH PPS that took effect on

October 1, 2009, we consolidated the rulema king cycle for the annual update of the

LTCH PPS Federal payment rates with the annual update of the MS-LTC-DRG

classifications and associated weighting factors for LTCHs so that the updates to the rates

and the weights now occur on the same schedule and appear in the same Federal

Register document. As a result, the updates to the LTCH standard Federal rates and the

MS-LTC-DRG relative weights are now effectiv e on October 1 (on a Federal fiscal year

schedule), and the annual update s to the LTCH standard Fe deral rates are no longer

published with a July 1 effective date. To refl ect this change to the annual payment rate

update cycle, we revised the regulations at §412.503 to specify that, beginning on or

after October 1, 2009, the LTCH PPS rate year is defined as October 1 through

September 30 (73 FR 26797 through 26798 and 26838).

In this proposed rule, we are proposing to change the terminology used under the

LTCH PPS to designate the annual payment update and MS-DRG relative weight

recalibration cycle from “rate year” to “fiscal year,” in order to conform with the standard

definition of the Federal fiscal year (October 1 through September 30) used by the IPPS.

We believe that this proposed change is a ppropriate because both the yearly update cycle

of the LTCH standard Federal rates (a nd associated factors) and the annualCMS-1498-P 640

reclassification and recalibration of the MS -LTC-DRG relative weights (which were

always updated on October 1, consistent with the IPPS) are now concurrent with the IPPS

update and implementat ion schedule of October 1 through September 30. Because the

annual updates to both the LTCH standard Federal rates (and a ssociated factors) and the

MS-LTC-DRG relative weights now occur at the same time as th e annual updates under

the IPPS, we believe we would eliminate any possible confusion that may be caused by

continuing to identify the LTCH PPS update cycle as a “rate year.” We believe that

changing the “fiscal year” terminology would provide important clarity for the LTCH

provider community, particularly because bot h the proposed and final rules for the IPPS

and the LTCH PPS are generally published in the same Federal Register document.

Consequently, we are proposing to use the term “fiscal year” when referring to the annual

updates for the LTCH standard Federal payment rates and MS-LTC-DRG relative

weights as well as to the publication cycle for rulemaking for the LTCH PPS, consistent

with the IPPS. We are proposing to revise our definition of “rate year” in the regulations

at §412.503 to reflect this pr oposed terminology change.

This proposed terminology revision from “rate year” to “fiscal year” would

clarify the fact that since October 1, 2003, when we implemented the LTCH PPS, at

different times, we have used the terms "rate year" and "fiscal year" when referring to the

payment year under the LTCH PPS. In existing regulations at §412.503, we specify the

time periods during which each term was used. We also are proposing to add a definition

of "long-term care hospital prospective payment system payment year" to §412.503 in

order to encompass both the long-term care hospital prospective payment system rateCMS-1498-P 641

year and the long-term care hospital prospec tive payment system fiscal year. This

proposed term would be used when describing ongoing policy features of the LTCH PPS

for which, depending upon the time period, e ither the term “long-term care hospital

prospective payment system rate year” or “long-term care hospital prospective payment

system fiscal year” would be applicable. We believe that creating this term would

minimize confusion by keeping the regulation text as simple as possible because this term

would apply to the “long-term care hospital pr ospective payment system rate year” or to

the “long-term care hospital prospective paymen t system fiscal year.” In this respect,

existing regulation text (for example, §412.525( a)) would not need to be revised to

address the specific time periods during which the terms “long-term care hospital

prospective payment system rate year” and “l ong-term care hospital prospective payment

system fiscal year” are used.

In addition, as a conforming change, we are proposing to change the terminology

in §412.525(a)(1) and (a)(2), which describes the high-cost outlier policy (an ongoing

feature of the LTCH PPS from its inception), from "long-term care hospital prospective

payment system rate year" to "long-term care hospital prospective payment system

payment year". We believe that this proposed change, which would reference the

proposed new definition of the long-term ca re hospital prospective payment system

payment year period at §412.503, clearly reflects the application of the high-cost outlier

policy for the period encompassed by both the current "rate year" terminology and the

proposed change to "fiscal year" terminology, described above. We believe that these

proposed changes present a straightforward way to provide additional clarity to ourCMS-1498-P 642

regulations in a circumstance that reflects changes in terminology but do not entail any

change to the high-cost outlier policy. Furt hermore, consistent with this proposal, for

purposes of clarity, in this proposed rule , when discussing the annual update for the

LTCH PPS, we employ "FY" rather than RY" because it is our intent that "FY" be used

prospectively in all circumstances dealing with the LTCH PPS.

VIII. Effective Date of Provide r Agreements and Supplier Approvals

A. Background

Section 1866 of the Act states that any provider of services as defined under

section 1861(u) of the Act (except a fund desi gnated for purposes of sections 1814(g) and

1835(e) of the Act) shall be qua lified to participate in the Me dicare program and shall be

eligible for Medicare payments if it files with the Secretary a Medicare provider

agreement and abides by the requirements applicable to Medicare provider agreements.

These requirements are incorporated into our regulations in 42 CFR Part 489, Subparts A

and B. Section 1866(b)(2) of th e Act provides that the Secretary may refuse to enter into,

or may terminate, an agreement with a provider for various reasons, including the

provider’s failure to comply with the provi sions of the agreement and if it has been

determined that the provider fails to meet th e applicable provisions of section 1861 of the

Act, including health and safety standards. Certain suppliers are also required under the

Act to meet health and safety standards specified by the Secretary: section

1861(aa)(2)(K), with respect to rural health c linics; section 1832(a)(2)(F)(i), with respect

to ambulatory surgical centers; and section 1881(b)(1)(A), with respect to providers of

renal dialysis services.CMS-1498-P 643

Under section 1864(a) of the Act, the Secret ary enters into agreements with State

agencies to determine if providers and suppliers meet the requisite Medicare

requirements. Section 1865 of the Act per mits CMS to “deem” facilities that have been

accredited by a national accreditation organi zation under a CMS-approved accreditation

program as having met the Medicare health a nd safety standards. Section 1871 of the Act

authorizes the Secretary to adopt such regula tions as may be necessary to carry out the

requirements of Title XVIII of the Act.

On August 18, 1997, we adopted regulations, effective September 17, 1997

(1997 final rule), establishing uniform crite ria for determining the effective dates of

provider agreements and supplier approvals in the Medicare and Medicaid programs

(62 FR 43931). Included in these regulations was 42 CFR 489.13, governing the

determination of the effective date of a Me dicare provider agreement or supplier approval

for health care facilities that are subject to survey and certif ication. Facilities subject to

survey and certification are those that must comply with Medicare health and safety

standards, that is, the conditions of partic ipation (CoPs), long-ter m care requirements,

conditions for coverage (CfC), or conditions for certification, depending on the type of

facility. (The regulations exempt clinical laboratories, community mental health centers,

and federally qualified health centers from its general provisions, esta blishing alternative

requirements for these entities.) Compliance with the applicable health and safety

standards is determined throug h an onsite survey by a State survey agency, CMS staff, or

a CMS contractor, or, in accordance with s ection 1865 of the Act, CMS may “deem” an

entity to have satisfied these requirement s if it has been accredited by a nationalCMS-1498-P 644

accreditation program approved by CMS. Currently, we have approved 15 accreditation

programs offered by 7 national accreditation organizations for the following types of

providers or suppliers: hospitals, CAHs , HHAs, hospices, and ambulatory surgical

centers.

Under §489.13(b) of the regulations, the da te the survey is completed is the

effective date of the provider agreement or supplier approval, if all applicable Federal

requirements have been met on that date. Similarly, §489.13(d) provides that the

effective date for a provider or supplie r accredited by a national accreditation

organization under a CMS-appr oved program, and which is subject to additional

requirements not contained in the approved program, is th e date on which all Federal

requirements have been met, including the a dditional requirements. We have interpreted

these provisions to mean not only that the survey/accreditation decision must show that

the prospective provider or supplier is in comp liance with all of the applicable health and

safety standards, but also that all other Federal requirements related to the prospective

provider’s or supplier’s participation in the Medicare program have been met.

Other Federal requirements include, but are not limited to, the submission of an

application to enroll in the Medicare program th at has been reviewed by our legacy fiscal

intermediaries, legacy carriers, or MACs, as applicable, and has been found to meet the

enrollment requirements established in 42 CFR Part 424, Subpart P. Other Federal

requirements also include, for providers, compliance with Office for Civil Rights

requirements. There also are additional Fede ral requirements specifi c to certain providerCMS-1498-P 645

types, such as IPPS exclusion requirements for certain types of hospitals, capitalization

and surety bond requirements for home health agencies, among others.

Under our current process, section 2003B of the State Operations Manual (SOM)

(Publication No. 100-07) states that: “ The SA [State Survey agency] should not perform a

survey of a new facility until it has received notice from the FI [fiscal intermediary] or carrier

that the information provided on the enrollment application has been verified.” Section 2005

of the SOM further states: “The MAC/legacy FI will process the Form CMS-855A and the

MAC/legacy Carrier will process the Form CMS-855B, depending on which contractor is

responsible for processing bills or claims for the provider/supplier. . . . The State Survey

Agency will be responsible for surveying in itial applicants following the contractor’s

recommendation for approval , and providing the initial certification package.” (Emphasis

added.)

In accordance with § 488.8(a)(2) of the regulations, one of the requirements for our

approval of a national accreditation program is the comparability of its survey process to that

of State survey agencies. Consistent with th is requirement, in Survey and Certification

Policy Memorandum S&C-09-08, dated Oc tober 17, 2008, we indicated that a

CMS-approved national accreditation organiza tion also must not conduct a survey of a

facility seeking a Medicare provider agreement or supplier approval until after the MAC, the

legacy fiscal intermediary, or the legacy carrier has completed its review of the enrollment

application and notified the applicant that its review has been completed and a

recommendation has been made to CMS.

Therefore, historically, in the normal course of events, the health and safety survey

(including the Life Safety Code survey, if a pplicable) of a prospective provider or supplierCMS-1498-P 646

has usually occurred after it has demonstrated that it meets the Medicare enrollment

requirements, and, as a result, the effective date of a provider agreement or supplier approval

is generally later than the date when the contractor has verified that all enrollment

requirements have been met. However, on occasion, a survey can take place before the CMS

contractor has verified that enrollment requi rements have been met. This has tended to

happen more frequently in the case of faciliti es that seek to satisfy Medicare participation

requirements through accreditation by a CMS-approved accreditation program, because the

accreditation organization relies upon the facility to advise it when it has received notice of

completion of the review of its enrollment appl ication. This can result in the date of an

accreditation decision preceding the date when the CMS contractor determination has

occurred. In addition, in order to prevent fra ud and abuse, there may be other situations in

which the CMS contractor performs additional enrollment verification activities even after a

health and safety survey has been performed.

In cases where the CMS contractor determines that the prospective provider’s or

supplier’s compliance with enrollment requirement s did not occur until after a survey by the

State survey agency or after the accreditation survey and accreditation decision take place, it

is our policy, consistent with our interpretation of §489.13(b), to make the effective date of

the provider agreement or supplier approval th e date when the enrollment requirements are

considered to have been met, that is, the date determined by the CMS contractor, pursuant to

its review and verification activities, to be the date when the applicant is in compliance with

all enrollment requirements and the CMS contractor is prepared to convey Medicare billing

privileges to the provider or supplier, unless there are still other Federal requirements that

remain to be satisfied, such as submission of required civil rights compliance documentationCMS-1498-P 647

or satisfaction of the specialized requirements governing IPPS-excluded hospitals. If there

are other unsatisfied requirements, the effec tive date would be the date when the last

requirement has been satisfied, as determined by CMS.CMS-1498-P 648

B. Departmental Appeals Board Decision

In a decision dated September 28, 2009, the Appellate Division of the Departmental

Appeals Board (DAB), in the case of Renal Ca rePartners of Delray Beach, LLC v. Centers

for Medicare and Medicaid Services (DAB Decision No. 2271), rejected our longstanding

interpretation of §489.13(b). In this case, a State survey agency completed an initial

certification survey on July 6, 2007, of an end-stage renal disease supplier, Renal

CarePartners, prior to the CM S contractor’s November 21, 2007 recommendation of approval

of the supplier’s enrollment application. Th e DAB concluded that there was no basis in

regulation or policy issuances for our position th at CMS contractor approval is a requirement

a supplier must satisfy “before it may furnish services for which it will be reimbursed under

Medicare once it is enrolled and obtains billing privileges” (DAB Decision No. 2271,

page 2). The DAB further characterized the issue as “. . . not whether the effective date may

be earlier than the date Renal CarePartners co mplied with a prerequisite it was required to

meet in order to enroll, but whether the effective date must be delayed until the date the

Medicare contractor notified CMS that the requiremen ts were met” (DAB Decision No.

2271, page 5) (emphasis in original). The DAB agreed with Renal CarePartners that the

requirement for the Medicare contractor to verify and determine whether an application

should be approved is not a requirement for the supplier to meet, but a requirement for

Medicare contractor action (DAB Decision No. 2271, page 5). The DAB further cited the

provisions of §489.13(d), concerning accredited facilities, as an example to bolster its

contention that there is precedent for providers or suppliers to be retroactively reimbursed for

services provided before the date of approval of the supplier or provider agreement (DAB

Decision No. 2271, page 7).CMS-1498-P 649

We disagree with the DAB’s reading of our existing regulations. We believe that the

intent of the existing regulations is to require that all applicable Federal requirements,

including a determination of whether the enro llment requirements have been satisfied, must

be met before a provider agreement or supplier approval may be effective. Any other reading

of the regulations could result in a provider or supplier being permitted to bill the Medicare

program for services provided at a time when its compliance with Medicare’s requirements is

unknown and possibly deficient. For example, in the event a State survey precedes the CMS

contractor’s review of the enrollment applicat ion of a prospective provider or supplier, it

might be possible that the application origin ally submitted to the CMS contractor is

incomplete or incorrect, or both, and the applicant must provide additional information to the

CMS contractor to demonstrate compliance with the enrollment requirements. It would not

be consistent with our duty to protect th e Medicare Trust Funds from unsupported claims

against it to permit payment for services furnished by a health care facility after it has passed

a State survey or been accredited, but before it has satisfied all other Medicare participation

requirements, including enrollment requirements.

Such a reading also might undermine the in centives inherent in our longstanding

policy, affirmed in the June 1, 1994 decision of the U.S. Court of Appeals for the Fifth

Circuit in U.S. v. Vernon Home Health, Inc. (21 F.3d 693 (5 th Cir. 1994), cert. denied,

115 S.Ct. 575 (1994)). Under that policy, a buye r of a Medicare-participating facility that

chooses not to assume the provider agreement or supplier approval of the seller must be

treated as an initial applicant to the Medicare program, with a necessary break in

Medicare payments for services furnished to beneficiaries during the period between the

effective date of the change of ownership, and the effective date of the new owner’sCMS-1498-P 650

provider agreement or supplier approval. A ssumption of the seller’s provider agreement

or supplier approval includes assumption of the assets and liabilities associated with that

agreement or approval, which has proven to be an important tool in protecting the

Medicare Trust Funds through continuity in the ability to recover outstanding

overpayments. Any requirement to make payments retroactive to the date of a State

survey or accreditation decision, despite the fa ct that all other Fede ral requirements may

not yet have been met, could provide an incentive for more buyers to refuse assumption

of the seller’s provider agreement or supplie r approval, because there would potentially

be no break in payments. Therefore, eff ectively, a buyer who does not assume the

seller’s active provider agreement could begi n receiving Medicare payments (assuming it

meets all the requirements), but not be re sponsible for any existing liabilities of the

provider agreement. This would also be an incentive for existing providers or suppliers

with civil money penalties or overpayments to sell their facilities in order to escape any

financial responsibility to the Medicare program.

C. Proposed Revisions to Regulations

We are proposing to amend §489.13 and make a technical amendment to §489.1 in

order to clarify our policy. Specifically, we are proposing to revise §489.13(a) to make it

clearer that it is only CMS that determines whet her health care facilities have satisfied the

requirements for participation in the Medicare program, not State survey agencies or

national accreditation organizati ons. We note that, although this CMS determination is

sometimes referred to as a “certification,” or “certification decision,” §488.1 defines

“certification” as “ a recommendation made by the State survey agency on the compliance

of providers and suppliers with the conditi ons of participation, requirements (for SNFsCMS-1498-P 651

and NFs), and conditions of coverage.” Further, §488.12 provides that CMS makes the

determination on whether a provider or supplier is eligible to participate in or be covered by

the Medicare program, based on the State survey agency’s recommendation, or on the

facility’s accreditation.

We also are proposing to add language to §489.13(a) in order to clarify that surveys

of nonaccredited facilities may be conducted not only by State survey agencies, but also by

CMS staff or contractors, as appropriate. We have used contractors to conduct certain types

of surveys, such as life safety code, transp lant program and psychiatric hospital special

conditions surveys, and may conti nue to do so in the future. In addition, certain types of

facilities, such as Indian Health Services (IHS) facilities and RNHCIs, have traditionally been

surveyed by CMS employees rather than State survey agencies.

We are proposing to revise §489.13(b) to make explicit that the effective date of a

provider agreement or supplier appr oval may not be earlier than the latest of the dates on

which each applicable Federa l requirement is determined to be met. We also are

proposing to state explicitly that “Federal requirements” include, but are not limited to,

the enrollment requirements established in 42 CFR Part 424, Subpart P, that have been

determined by CMS to have been met. In addition, we are proposing to revise §489.13(b)

to include language concerning accredited facilities, to assure that accredited and

nonaccredited facilities are trea ted in the same manner.

We wish to further explain the rati onale behind the proposed change to

§489.13(b), particularly with respect to the requirements in the provider/supplier

enrollment process.CMS-1498-P 652

A CMS contractor will review and conduct an initial assessment of a prospective

provider’s or supplier’s enrollment. If the cont ractor finds that a prospective provider or

supplier meets the basic enrollment requirements to participate in the Medicare program

for its identified certified provider or supp lier type, the contractor will notify the

appropriate CMS Regional Office. Essentially, the contractor's initial assessment means

that it has concluded its preliminary review of the application and has concluded that the

survey and certification pr ocess can be initiated, and, consequently, it issues a

recommendation of approval. In order to help ensure compliance with enrollment

requirements throughout this process, the c ontractor may continue to perform a number

of enrollment verification tasks even after it has issued a recommendation for approval.

These include, but are not limited to, conducting onsite visits of the prospective provider

or supplier to ensure that it is still opera tional; verifying an HHA applicant’s compliance

with the capitalization provisions in 42 CF R 489.28; and requesting the provider or

supplier applicant to reaffirm the accuracy of the information it furnished on its initial

enrollment application. Given the potentiall y significant length of time between when

the contractor issues its recommendation of approval after its initial assessment and when

the health and safety survey (or accreditation) and certification process is completed, we

believe that it is essential for the contractor to verify that a provider or supplier applicant

continues to meet enrollment requirements prior to the i ssuance of a Medicare provider

agreement or supplier approval and the issuance of Medicare billing privileges.

To that end, we believe that the CMS cont ractor should verify that a provider or

supplier is in compliance with all enrollment requirements when an enrollmentCMS-1498-P 653

application is submitted, during the period in which a provider or supplier is undergoing

the health and safety survey and certifica tion process and before the issuance of a

Medicare provider agreement or supplier approv al and billing privileges. If a provider or

supplier is determined to be in compliance with all Medicare requirements, including the

enrollment requirements, the enrollment process will be completed, and the Medicare

provider agreement or supplier approval and billing privileges will be issued to the

applicant. However, if a provider or supplier is determined to be out of compliance with

Medicare enrollment requirements prior to the issuance of a Medicare provider

agreement or supplier approval and billing privileges to the applicant, we believe that

CMS must deny Medicare billing privileges us ing the applicable denial reason found in

42 CFR 424.530 and afford the applicant with th e applicable Medicare appeal rights.

We are proposing to revise §489.13(c) to make clear that this paragraph addresses

those situations in which a facility has met all other Federal requirements but, upon survey,

has been found to not meet all applicable CoPs, long-term care requirements, CfCs, or

conditions for certification. We also are proposing to revise this paragraph to include

language concerning accredited facilities, to assure that accredited and nonaccredited

facilities are treated in the same manner.

We are proposing to remove §489.13(d), concerning the determination of the

effective date for accredited facilities. We see no reason for differential treatment of

accredited and nonaccredited facilities with respect to the determination of their effective

date, and, in practice, we have not treated them differentially. In particular, as a matter of

policy, we have not exercised the disc retion permitted under §489.13(d)(2) to grant

accredited facilities an effective date retroactive up to 1 year prior to what otherwise wouldCMS-1498-P 654

be their effective date. Permitting such retroactive payment would provide accredited

facilities an unwarranted advantage when compared to nonaccredited facilities. It would also

seriously undermine our policy concerning chan ge of ownership without assumption of the

seller’s provider agreement or supplier approval. However, the existence of this

discretionary provision appears to cause confusion among accredited providers and suppliers

who incorrectly believe they are entitled to a retroactive effective date.

This discretionary provision was included in the 1997 final rule as a result of public

comments that concerned the Medicaid program. The commenters were concerned that the

proposed rule would not have allowed for a re troactive agreement for a facility that was

already accredited and cited two Medicaid program scenarios to illustrate their concern.

In one scenario, a facility participates in its own State’s Medicaid program and provides

services to a Medicaid recipient from another State. In the other scenario, a facility does

not participate in Medicaid but provides services to a Medicai d recipient before learning

of the individual’s Medicaid status. Neither of these scenarios is pertinent to the

Medicare program because Medicare enrollment is managed nationally. However, the

stated intent of the 1997 final rule was to use a standard approach for both Medicare and

Medicaid to determine the effective date of a provider agreement and a supplier approval,

and, as a result, the provisions of §489.13(d)(2 ) are identical to those at §431.108(d)(2)

for the Medicaid program.

Upon further consideration, we believe it is important to recognize the significant

differences resulting from a State-based versus national system of beneficiary enrollment,

and to ensure that the provisions of §489.13 are tailored to the requirements of the

Medicare program. As stated, as a matter of longstanding policy, reflected in issuancesCMS-1498-P 655

dating back at least as far as 1994, we have required new owners who do not accept the

seller’s Medicare provider agreement or supplier approval to be treated as initial

applicants to the Medicare program. In a 1999 issuance, reaffirmed in several subsequent

issuances, including the 2004 publication of the online version of the SOM and in Survey

and Certification Memora ndum S&C-09-08 issued on October 17, 2008, we explicitly

state that this policy applies to accredited fac ilities as well. Therefor e, we believe it is

appropriate to remove §489.13( d), and to instead make appropriate reference to the

situation of accredited fac ilities in §§489.13(b) and (c).

Finally, we are proposing to make se veral technical amendments to §489.1.

Specifically, we are proposing to revise that section to add a reference to section 1865 of

the Act, which permits CMS to “deem” facilitie s that have been accredited by a national

accreditation organization under a CMS-approv ed accreditation program as having met

the Medicare health and safety standards. We also are proposing to revise and renumber

the existing provision of §489.1 and to add refe rences to “the Act” where the section

refers to a provision of th e Social Security Act.

IX. Proposed Changes to Medicare Conditions of Partic ipation Affecting Hospital

Rehabilitation Services and Respiratory Care Services

Recently, CMS received several public reque sts for clarification of the Medicare

conditions of participation (CoPs) for hospitals relating to rehabilitation services at

§482.56 and respiratory care services at §482.57. The questions concerning these

conditions have been in the context of appa rent inconsistencies between the two COPs

themselves, and between the two CoPs and many State laws, regarding whichCMS-1498-P 656

practitioners are allowed to order rehabilitation and respiratory care services in the

hospital setting.

Many States, under their scope-of-prac tice laws and other regulations, allow

qualified, licensed practitioners (including nurse practitioners (NPs) and physician

assistants (PAs)) to order rehabilitation servi ces and respiratory care services, in addition

to other common hospital services such as di etary and social work services. We also

found that most States limit the types of practitioners allowed to order rehabilitation

services, respiratory care services, and other hospital services to physicians and other

qualified, licensed practitioners such as NPs and PAs.

However, the current standard at §482.56(b) (Delivery of services) requires only

that hospital rehabilitation services (for example, physical therapy, occupational therapy,

audiology, and speech-pathology services) be ordered by “practitioners who are

authorized by the medical staff to order the se rvices.” We believe that this requirement

may be too open for interpretation and is not consistent with various State laws that limit

the ordering of hospital services (including diagnostic tests, drugs and biologicals, and

inpatient treatment m odalities) to qualified, li censed practitioners who are responsible for

the care of the patient and who are, most importantly, working within a State’s delineated

scope of practice for these types of practitioners. As this requirement is currently written,

it would be conceivable for a hospital’s medical staff to grant ordering privileges for

rehabilitation services to pers onnel who are responsible for providing such services, that

is, physical therapists, occupational therapists, audiologists, and speech-language

pathologists. Such a situation would not only constitute a conflict of interest (forCMS-1498-P 657

example, a physical therapists ordering physical therapy services for a patient for which

medical necessity has not been establishe d), but it would also potentially compromise

coordination of care and patient safety if the practitioners who are responsible for the care

of patients (that is, doctors of medicine, doctors of oste opathy, NPs, and PAs) are

unaware of which services have been ordered for their patients.

Conversely, the current requirement for re spiratory care services at §482.57(b)(3)

explicitly states that these services “mus t be provided only on, and in accordance with,

the orders of a doctor of medicine or osteopathy.” Similar to our finding that the

requirement for the ordering of rehabilitation services is too broad in its parameters for

determining which prac titioners should be allowed to or der those servi ces, we find the

parameters for the ordering of respiratory care services to be too narrow. While doctors

of medicine or doctors of os teopathy have the option of dele gating this task to NPs and

PAs, this delegation requires physicians to countersign all orders by NPs or PAs for

respiratory care services. We have not found any evidence that indicates that the

ordering of respiratory care services should be kept to a different, and possibly higher,

standard than rehabilitation and other hospital services. Nor have we found any

documented studies indicating that qualified, licensed practitioners such as NPs and PAs

should be restricted from orderi ng these necessary services for their patients. Further, we

believe that the process of physician countersignature of orders written by qualified,

licensed NPs and PAs, specifically for common hospital services such as rehabilitation

and respiratory care services, is burdensome to practitioners (physicians as well as NPs

and PAs) and the hospitals that they serve. In addition, we believe th at this process alsoCMS-1498-P 658

runs counter to what many States have already decided for NPs and PAs in their

individual State regulations and scope-of-practice laws.

As a result of our analysis of the issues surrounding conflict of the Medicare CoPs

with State laws, and conflic t of the Medicare CoP with each other, we are proposing

several revisions to the existing regulati ons. We are proposing to revise §482.56 to

clarify the types of practitioners who are allowed to order rehabilitation services.

Further, we are proposing to limit those ty pes of individuals to qualified, licensed

practitioners who are responsible for the care of the patient and who are acting within the

scope of practice under State law. We also are proposing that these practitioners would

need to be authorized to order rehabilitation services by the hospital’s medical staff, in

accordance with both hospital policies and procedures and State laws.

In addition, we are proposing changes to the existing requirements for the

ordering of respiratory care services at §482.57. Existing requirements only allow for

services to be provided on the orders of a doc tor of medicine or osteopathy. As stated

above, we recently received several public requests (inc luding requests from various

hospitals as well as from The Joint Commission) for clarification of this requirement in

the context of what is currently allowed unde r many State laws. Many States, under their

scope-of-practice laws and other regulati ons, allow qualified, licensed practitioners

(including NPs and PAs) to or der respiratory care services. We are proposing to revise

the existing requirements at §482.57 to allow thes e practitioners, in add ition to physicians

as currently allowed, to order these services as long as such privileges are authorized by

the medical staff and are in accordance with both hospital policies and procedures andCMS-1498-P 659

State laws. As is required unde r the CoPs for all patient or ders, the ordering practitioner

must also be an individual who is re sponsible for the care of the patient.

In both of the CoPs for rehabilitation services and respiratory care services, we

also are proposing that all orders for these se rvices be documented in accordance with the

requirements at §482.24, Medical records.

X. Proposed Changes to th e Accreditation Requirements for Medicaid Providers of

Inpatient Psychiatric Services for Individuals under Age 21

A. Background

Inpatient psychiatric services provided to individuals under the age of 21 were

authorized as part of the Medicaid program by the Social Security Amendments of 1972

(Pub. L. 92-603). At that time, these servi ces were only permitted to be provided by

psychiatric hospitals accredited by the Joint Commission on Accreditation of Hospitals

(later renamed as the Joint Commission on Accreditation of Healthcare Organizations

and now named The Joint Commission). In 1984, Congress eliminated the requirement

that such hospitals be accredited exclus ively by The Joint Commission (section 2340(b)

of Pub. L. 98-369).

Through statutory and regulatory ame ndments, inpatient psychiatric services

provided to individuals under the age of 21 we re also authorized to be provided in

inpatient psychiatric programs within hospitals and in psychiatric facilities other than

hospitals, called psychiatric residential treatment facilities (PRTFs). While PRTFs were

given flexibility through rulemaking in 1998 to obtain accreditation from several specific

accrediting organizations, or any other accrediting body with comparable standardsCMS-1498-P 660

recognized by the State, accreditation by The Joint Commission has remained a

requirement for psychiatric hospitals and inpa tient psychiatric programs within hospitals.

We have been contacted by several ps ychiatric hospitals and hospitals with

inpatient psychiatric programs asking fo r relief of The Joint Commission accreditation

requirement. In addition, The Joint Commissi on has previously expressed concern with

the mandate for Joint Commission accreditation contained in existing regulation, as its

policy is for facilities to seek accreditation voluntarily.

B. Proposed Revision of Policy and Regulations

In response to the concerns describe d above, we are proposing to remove the

requirement that psychiatric hospitals and hos pitals with inpatient psychiatric programs

providing inpatient psychiatric services to individuals under age 21 must obtain

accreditation from The Joint Commission in orde r to provide these services under the

Medicaid program. Under our proposed policy change, psychiatric hospitals would have

the choice of meeting the require ments to participate in Medica re as a psychiatric hospital

under 42 CFR 482.60 or obtaining accreditation from a national accre diting organization

whose psychiatric hospital accrediting program has been approved by CMS. Hospitals

with inpatient psychiatric programs would ha ve the choice of meeting the requirements

for participation in Medicare as a hospital as specified in 42 CFR Part 482 or obtaining

accreditation from a national accrediting organization whose hospital accreditation

program has been approved by CMS. Thes e national accreditation bodies must provide

reasonable assurance to CMS that their hos pital accrediting programs require adherence

to requirements that are at least as stringent as the Me dicare requirements.CMS-1498-P 661

In addition, we are proposing to revise the accreditation requirements for PRTFs

by removing any specific references to ac creditation organizations to afford them

flexibility in obtaining accreditation by a national accrediting organization whose

program has been approved by CMS, or by any other accrediting organization with

comparable standards that is recognized by the State. This proposed revision would

remove specific reference to national accrediting bodies to provide appropriate

administrative flexibility to account for any changes in qualifying accrediting

organizations. Accrediting bodies approved by CMS must have accrediting requirements

for an entity comparable to the CMS requirements for the same entity, and must have

survey procedures comparable to those of State survey agencies.

The regulations at 42 CFR 488.4 describe the procedures to be followed by

accrediting organizations applying or reapplyi ng for approval of deeming authority for

Medicare requirements. The regulati ons at 42 CFR 488.5(b) and 488.6(b) allow

providers and suppliers deemed eligible for Medicare by these accrediting organizations

to be also deemed eligible for Medicaid participation in the absence of Medicaid

regulations requiring adherence to a differen t standard. In addition, the regulations at

42 CFR 488.8 detail the procedures that CMS will follow in reviewing and approving

national accreditation organizations. Nothin g in this proposed rule would alter the

implementation of these regulatory provisions.

We believe this flexibility in obtaining accreditation would facilitate the provision

of medically necessary, Medi caid-reimbursable psychiatri c services to vulnerable

children, while maintaining the high quality of care demanded by the Medicaid program.CMS-1498-P 662

While services may be provided in different settings, the requirements of 42 CFR

441.150 through 441.182 must be adhered to by any provider of services. We are

inviting public comments on our suggestions for improving current protections for

children.

To incorporate the proposed changes desc ribed above in our regulations, we are

proposing to revise §440.160(b)(1) and §441.151(a )(2)(i) by removing the requirement

for accreditation by The Joint Commission of psychiatric hospitals and hospitals with

inpatient psychiatric programs. Psychiatric hospitals would have th e choice of meeting

the requirements to participate in Medica re as a psychiatric hospital under 42 CFR 482.60

or obtaining accreditation from a national a ccrediting organization whose psychiatric

hospital accrediting program has been approved by CMS. Hospitals with inpatient

psychiatric programs would have the choice of meeting the requirements for participation

in Medicare as a hospital as specified in 42 CFR Part 482 or obtaining accreditation by a

national accrediting organization whose hosp ital accrediting program has been approved

by CMS. We are proposing to revise §440.160 (b)(2) and §441.151(a)(2)(ii) by removing

an specific references to accreditation organizations to afford PRTFs the flexibility in

obtaining accreditation by a national accrediting organization whose program has been

approved by CMS, or by any other accrediting organization with comparable standards

that is recognized by the State.CMS-1498-P 663

XI. MedPAC Recommendations

Under section 1886(e)(4)(B) of the Act, the Secretary must consider MedPAC's

recommendations regarding hosp ital inpatient payments. U nder section 1886(e)(5) of the

Act, the Secretary must publish in the annual proposed and final IPPS rules the

Secretary's recommendations regarding MedPAC 's recommendations. We have reviewed

MedPAC’s March 2010 “Report to the Congre ss: Medicare Payment Policy” and have

given the recommendations in the report care ful consideration in conjunction with the

policies set forth in this proposed rule.

MedPAC’s Recommendation 2A-1 states that “The Congress should increase

payment rates for the acute inpatient and out patient prospective payment systems in 2011

by the projected rate of increase in the hosp ital market basket inde x, concurrent with

implementation of a quality incentive payment program.” This recommendation for the

IPPS is discussed in Appendix B to this proposed rule.

MedPAC’s Recommendation 2A-2 states that “To restore budget neutrality, the

Congress should require the Secretary to fully offset increases in inpatient payments due

to hospitals’ documentation and coding improvements. To accomplish this goal, the

Secretary must reduce payment rates in the i npatient prospective payment system by the

same percentage (not to exceed 2 percen tage points) each year in 2011, 2012, and 2013.

The lower rates would remain in place until overpayments are fully recovered.”

Response to Recommendation 2A-2 : Beginning in FY 2008, CMS adopted the

new MS-DRG patient classification system for the IPPS to better recognize severity of

illness in Medicare payment rates. Adoption of the MS-DRGs resulted in the expansionCMS-1498-P 664

of the number of DRGs from 538 in FY 2007 to 745 in FY 2008. The increase in the

number of DRGs provides incentives for hosp itals to change documentation and coding

that can increase Medicare expenditure s without any corresponding increase in

underlying patient severity. C onsistent with the statutory requirement to maintain budget

neutrality, we established prospective doc umentation and coding adjustments of -

1.2 percent for FY 2008, -1.8 percent for FY 2009, and -1.8 percent for FY 2010 when

the new MS-DRG system was implemented in FY 2008. Subsequent to issuance of the

FY 2008 IPPS final rule, section 7 of the TMA of 2007 (Pub. L. 110-90) divided in half

the documentation and coding adjustments for the MS-DRG system that we adopted in

the FY 2008 IPPS final rule to -0.6 percent for FY 2008 and -0.9 percent for FY 2009.

Section 7 requires that, if the implementa tion of the new MS-DRG payment system

resulted in actual changes in documentation and coding in FY 2008 or FY 2009, or both

years, that are different from those refl ected in the -0.6 percent and -0.9 percent

documentation and coding ad justments applied to paym ent rates in FY 2008 and

FY 2009, respectively, the Secretary further adjust operating IPPS rates. This further

adjustment must offset the estimated amount of the increase or decrease in aggregate

payments for discharges occurring durin g FY 2008 and FY 2009, and must be made

during FY 2010, FY 2011, and/or FY 2012. These adjustments are referred to as the

recoupment adjustments and apply only to acute IPPS operating payments. In addition,

the law requires that the Secretary eliminate the effect of all actual documentation and

coding changes occurring in FY 2008 and FY 2009 incorporated into FY 2010 IPPS

operating rates not already accounted for bey ond the -0.6 and -0.9 percent adjustments.CMS-1498-P 665

These adjustments are referred to as the prosp ective adjustments. As discussed in section

II.D. of the preamble of this proposed rule, our current estimate is that an aggregate

adjustment of 9.7 percent would be nece ssary to satisfy these requirements.

We discuss our proposed adjustments to correct for the effects of improved

documentation and coding on Medicare payments to hospitals in section II.D. of the

preamble of this proposed rule for IPPS operating payments, in section V.E. of the

preamble of this proposed rule for IPPS capital payments, and in section VII.C.3. of the

preamble of this proposed rule for LTCH PPS payments. In this context, we note that, in

considering whether to adopt MedPAC’s reco mmendation, we took into consideration the

statutory requirement that the adjustment must offset the estimated amount of the

increase or decrease in aggregate payments for discharges occurring during FY 2008 and

FY 2009 must be made during FY 2010, FY 2011, and/or FY 2012.

For further information relating specifically to the MedPAC reports or to obtain a

copy of the reports, contact MedPAC at ( 202) 653-7226, or visit MedPAC's Web site at:

http://www.medpac.gov.

XII. Other Required Information

A. Requests for Data from the Public

In order to respond promptly to public re quests for data related to the prospective

payment system, we have established a pro cess under which commenters can gain access

to raw data on an expedited basi s. Generally, the data are now available on compact disc

(CD) format. However, many of the files are available on the Internet at:

http://www.cms.hhs.gov/AcuteInpatientPPS

. Data files and the cost for each file, ifCMS-1498-P 666

applicable, are listed below. Anyone wishin g to purchase data tapes, cartridges, or

diskettes should submit a writte n request along with a comp any check or money order

(payable to CMS-PUF) to cover the cost of the following address: Centers for Medicare

& Medicaid Services, Public Use Files, Accounting Division, P.O. Box 7520, Baltimore,

MD 21207-0520, (410) 786-3691. Files on the In ternet may be downloaded without

charge.

1. CMS Wage Data Public Use File

This file contains the hos pital hours and salaries from Worksheet S-3, Parts II and

III from FY 2007 Medicare cost reports used to create the proposed FY 2011 prospective

payment system wage index. Multiple versions of this file are created each year. For a

complete schedule on the release of different vers ions of this file, we refer readers to the

wage index schedule in section III.K. of the preamble of this proposed rule.

Processing Year Wage Data Year PPS Fiscal Year 2010 2007 2011 2009 2006 2010 2008 2005 2009 2007 2004 2008

Media : Internet at:

http://www.cms.hhs.gov/AcuteInpa tientPPS/WIFN/list.asp#TopOfPage

.

Periods Available : FY 2007 through FY 2011 IPPS Update.

2. CMS Occupational Mix Data Public Use File

This file contains the 2007-2008 occupati onal mix survey data to be used to

compute the occupational mix adjustment wage indexes. Multiple versions of this file are

created each year. For a complete schedule on the release of different versions of thisCMS-1498-P 667

file, we refer readers to the wage index schedul e in section III.K. of the preamble of this

proposed rule.

Media : Internet at:

http://www.cms.hhs.gov/AcuteInpa tientPPS/WIFN/list.asp#TopOfPage

.

Period Available : FY 2011 IPPS Update.

3. Provider Occupational Mix Adjustment Factors for Each Occupational Category

Public Use File

This file contains each hospital’s occupational mix adju stment factors by

occupational category. Two versions of these files are created each year. They support

the following:

● Notice of proposed rulemaking published in the Federal Register.

● Final rule published in the Federal Register.

Media : Internet at:

http://www.cms.hhs.gov/AcuteInpa tientPPS/WIFN/list.asp#TopOfPage

.

Period Available : FY 2011 IPPS Update.

4. Other Wage Index Files

CMS releases other wage index analysis files after each proposed and final rule.

Media : Internet at:

http://www.cms.hhs.gov/AcuteInpa tientPPS/WIFN/list.asp#TopOfPage

.

Periods Available : FY 2007 through FY 2011 IPPS Update.

5. FY 2011 IPPS SSA/FIPS CBSA State and County Crosswalk

This file contains a crosswalk of St ate and county codes used by the SocialCMS-1498-P 668

Security Administration (SSA) and the Federa l Information Processing Standards (FIPS),

county name, and a historical list of Metropolitan Statistical Areas (MSAs).

Media : Internet at:

http://www.cms.hhs.gov/AcuteInpatientPPS/FFD/list.asp#TopOfPage

.

Period Available : FY 2011 IPPS Update.

6. HCRIS Cost Report Data

The data included in this file contain co st reports with fiscal years ending on or

after September 30, 1996. These da ta files contain the highest level of cost report status.

Media : Internet at:

http://www.cms.hhs.gov/CostReports /02_HospitalCostReport.asp and Compact Disc

(CD).

File Cost : $100.00 per year.7. Provider-Specific File

This file is a component of the PRICER program used in the fiscal intermediary’s

or the MAC’s system to compute DRG/MS-DRG payments for individual bills. The file

contains records for all prospective payment sy stem eligible hospitals, including hospitals

in waiver States, and data elements used in the prospective payment system recalibration

processes and related activitie s. Beginning with December 1988, the individual records

were enlarged to include pass-thro ugh per diems and other elements.

Media : Internet at:

http://www.cms.hhs.gov/ProspMedi careFeeSvcPmtGen/03_psf_text.asp

Period Available : FY 2011 IPPS Update.

8. CMS Medicare Case-Mix Index FileCMS-1498-P 669

This file contains the Medicare case- mix index by provider number as published

in each year’s update of the Medicare hospital inpatient prospective payment system.

The case-mix index is a measure of the costliness of cases treated by a hospital relative to

the cost of the national average of all Medicare hospital cases, using DRG/MS-DRG

weights as a measure of relative costliness of ca ses. Two versions of this file are created

each year. They support the following:

● Notice of proposed rulemaking published in the Federal Register.

● Final rule published in the Federal Register

.

Media : Internet at:

http://www.cms.hhs.gov/AcuteInpatientPPS/FFD/list.asp#TopOfPage

Periods Available : FY 1985 through FY 2011.

9. MS-DRG Relative Weights (Also Table 5 - MS-DRGs)

This file contains a listing of MS-DRGs, MS-DRG narrative descriptions, relative

weights, and geometric and arithmetic mean lengths of stay as published in the Federal

Register . There are two versions of this file as published in the Federal Register

.

● Notice of proposed rulemaking.

● Final rule.

Media : Internet at:

http://www.cms.hhs.gov/AcuteInpatientPPS/FFD/list.asp#TopOfPage

Periods Available : FY 2006 through 2011 IPPS Update

10. IPPS Payment Impact File

This file contains data used to es timate payments under Medicare’s hospital

impatient prospective payment systems for operating and capital-related costs. The dataCMS-1498-P 670

are taken from various sources, including the Provider-Specific File, Minimum Data Sets,

and prior impact files. The data set is abstracted from an internal file used for the impact

analysis of the changes to the prospective payment systems published in the Federal

Register

.

Media : Internet at:

http://www.cms.hhs.gov/AcuteInpatientPPS/FFD/list.asp#TopOfPage and

http://www.cms.hhs.gov/AcuteInpatie ntPPS/HIF/list.asp#TopOfPage

Periods Available : FY 1994 through FY 2011 IPPS Update.

11. AOR/BOR Tables

This file contains data us ed to develop the MS-DRG relative weights. It contains

mean, maximum, minimum, standa rd deviation, and coefficient of variation statistics by

MS-DRG for length of stay and standardized charges. The BOR tables are “Before

Outliers Removed” and the AOR is “After Outliers Removed.” (Outliers refer to

statistical outliers, not payment outliers.)

Two versions of this file are created each year. They support the following:

● Notice of proposed rulemaking published in the Federal Register

.

● Final rule published in the Federal Register

.

Media : Internet at:

http://www.cms.hhs.gov/AcuteInpatientPPS/FFD/list.asp#TopOfPage

.

Periods Available : FY 2006 through FY 2011 IPPS Update.

12. Prospective Payment System (PPS) Standardizing File

This file contains information that st andardizes the charges used to calculate

relative weights to determine payments unde r the hospital inpatient operating and capitalCMS-1498-P 671

prospective payment systems. Variables include wage index, cost-of-living adjustment

(COLA), case-mix index, indirect medical education (IME) adjustment, disproportionate

share, and the Core-based Statistical Area (CBSA). The file supports the following:

● Notice of proposed rulemaking published in the Federal Register

.

● Final rule published in the Federal Register

.

Media : Internet at:

http://www.cms.hhs.gov/AcuteInpatientPPS/FFD/list.asp#TopOfPage

.

Period Available : FY 2011 IPPS Update.

For further information concerning these data tapes, contact the CMS Public Use

Files Hotline at (410) 786-3691.

Commenters interested in discussing any da ta used in constructing this proposed

rule should contact Nisha Bhat at (410) 786-5320.

B. Collection of Information Requirements

1. Legislative Requirement for Solicitation of Comments

Under the Paperwork Reduc tion Act of 1995, we are required to provide 60-day

notice in the Federal Register and solicit public comment before a collection of

information requirement is submitted to the Office of Management and Budget (OMB)

for review and approval. In order to fairly evaluate whether an information collection

should be approved by OMB, section 3506(c)(2 )(A) of the Paperwor k Reduction Act of

1995 requires that we solicit comment on the following issues:

● The need for the information collecti on and its usefulness in carrying out the

proper functions of our agency.CMS-1498-P 672

● The accuracy of our estimate of the information collection burden.

● The quality, utility, and clarity of the information to be collected.

● Recommendations to minimize the information collection burden on the

affected public, including auto mated collection techniques.

We are soliciting public comment on each of these issues for the following

sections of this document that contain information collection requirements (ICRs).

2. Requirements in Regulation Text

a. ICRs Regarding Withdrawing an App lication, Terminating an Approved 3-Year

Reclassification, or Canceling a Previous W ithdrawal or Termina tion (Proposed Revised

§412.273)

Proposed revised §412.273(b) states that the MGCRB allows a hospital, or group

of hospitals, to withdraw its application or to terminate an already existing 3-year

reclassification. Proposed revised §412.273(c) further specifies the timing requirements

for the withdrawal or termination require ments. Proposed §412.273(c)(1) provides that a

request for withdrawal must be received by the MGCRB at any time before the MGCRB

issues a decision on the application; or afte r the MGCRB issues a decision, provided that

the request for withdrawal is received by the MGCRB within 45 days of publication of

CMS' annual notice of proposed rulemaking concerning changes to the IPPS and

proposed payment rates for the fiscal year for which the application has been filed.

The burden associated with this requirement is the time and effort necessary for a

hospital to submit a written withdrawal request to the MGCRB. While this requirement

is subject to the PRA, we cannot accurately quantify the burden associated with thisCMS-1498-P 673

requirement. We currently review each reque st on a case-by case basis. We believe the

associated burden is thereby exempt from the PRA as stipulated under

5 CFR 1320.3(h)(6).

Proposed revised §412.273(c)(2) provides that a request for termination must be

received by the MGCRB within 45 days of the publication of CMS’ annual notice of

proposed rulemaking concerning changes to the IPPS and proposed payment rates for the

fiscal year for which the termination is to apply. The burden associated with this

requirement is the time and effo rt necessary for a hospital to submit a written termination

request to the MGCRB. While this require ment is subject to the PRA, we cannot

accurately quantify the burden associated with this requirement. We currently review

each request on a case-by case basis. We believe the associated burden is thereby exempt

from the PRA as stipulated under 5 CFR 1320.3(h)(6).

Proposed revised §412.273(d)(1) states that a hospital (or group of hospitals) may

cancel a withdrawal or termination in a s ubsequent year and request the MGCRB to

reinstate the wage index reclassification for the remaining fiscal year(s) of the 3-year

period. Proposed revised §412.273(d)(2) would require that cancellation requests be

received in writing by the MGCRB no later than the deadline for submitting

reclassification applications fo r the following fiscal year, as specified in §412.256(a)(2).

The burden associated with this requirement is the time and effort necessary for a hospital

to submit a written request to the MGCRB, re questing that the current withdrawal or

termination request be cancelled. While this requirement is subject to the PRA, we

cannot accurately quantify the burden associat ed with this requirement. We currentlyCMS-1498-P 674

review each request on a case-by case basis. We believe the associated burden is thereby

exempt from the PRA as stipul ated under 5 CFR 1320.3(h)(6).

Proposed §412.273(d)(3) states that a hosp ital would be able to apply for

reclassification to a different area (that is, an area different from the one to which it was

originally reclassified for the 3-year peri od). If the application is approved, the

reclassification will be effective for 3 year s. Once a 3-year reclassification becomes

effective, a hospital may no longer cancel a w ithdrawal or termination of another 3-year

reclassification, regardless of whether the w ithdrawal or termina tion request is made

within 3 years from the date of the withdraw al or termination. The burden associated

with the reapplication requirement is the time and effort necessary for a hospital to

submit a reclassification request to the MGCRB. While this requirement is subject to the

PRA, the associated burden is approved under OMB control number 0938-0573, with an

expiration date of December 31, 2011.

Proposed §412.273(f)(1) states that a hospital may file an appeal of the MGCRB's

denial of its request for withdrawal or te rmination, or of the MGCRB’s denial of its

request for a cancellation of such withdrawal or termination, to the Administrator. The

appeal must be received within 15 days of the date of the notice of the denial. The

burden associated with this requirement is the time and effort necessary for a hospital to

file a written appeal of the MGCRB’s denial. While this requirement is subject the PRA,

the associated burden is exempt under 5 CFR 1320.4. The burden associated with

collection information as part of or subseque nt to an administrative action is not subject

to the PRA.CMS-1498-P 675

b. ICRs Regarding Condition of Participa tion: Respiratory Care Services (§482.57)

Proposed §482.57(b)(4) imposes a recordke eping requirement. This section

would require all respiratory care services orders to be documented in the patient's

medical record according to the requireme nts at §482.24. The burden associated with

this requirement is the time and effort necessary for hospital staff to document and

maintain the respiratory care services orders in a patient’s medical record. While these

requirements are subject to the PRA, the associated burden is exempt from the PRA

under 5 CFR 1320.3(b)(2). We be lieve hospitals will not in cur any burden above and

beyond that associated with the usual and customary business practice of maintaining

detailed patient medical records.

3. Additional Informati on Collection Requirements

This proposed rule imposes collection of information requirements as outlined in

the regulation text and specified above. However, this proposed rule also makes

reference to several associated information collections that are not discussed in the

regulation text contained in this document. The following is a discussion of these

information collections, some of which have already received OMB approval.

a. Present on Admission (POA) Indicator Reporting

Section II.F.6. of the preamble of this proposed rule discusses the POA indicator

reporting program. As stated earlier, collec tion of POA indicator data is necessary to

identify which conditions were acquired dur ing hospitalization for the HAC payment

provision and for broader public health uses of Medicare data. Th rough Change RequestCMS-1498-P 676

5499 dated May 11, 2007, CMS issued instructions that require IPPS hospitals to submit

POA indicator data for all diag nosis codes on Medicare claims.

The burden associated with this requireme nt is the time and effort necessary to

place the appropriate POA indicator codes on Medicare claims. This requirement is

subject to the PRA; however, the associated burden is currently approved under OMB

control number 0938–0997, with an ex piration date of October 31, 2012.

b. Add-On Payments for New Services and Technologies

Section II.I.1. of the preamble of this proposed rule discusses add-on payments

for new services and technologies. Specifically, this section states that applicants for

add-on payments for new medical services or technologies for FY 2011 must submit a

formal request. A formal reque st includes a full description of the clinical applications of

the medical service or technology and th e results of any clinical evaluations

demonstrating that the new medical service or technology represents a substantial clinical

improvement. In addition, the re quest must contain a signific ant sample of the data to

demonstrate that the medical service or t echnology meets the high-cost threshold. We

detailed the burden associated with this requirement in the September 7, 2001, IPPS final

rule (66 FR 46902). As stated in that final rule, collection of the information for this

requirement is conducted on an individual case-by-case basis. We believe the associated

burden is thereby exempt from the PRA as stipulated under 5 CFR 1320.3(h)(6).

Similarly, we also believe the burden associated with this requirement is exempt from the

PRA under 5 CFR 1320.3(c), which defines the ag ency collection of information subject

to the requirements of the PRA as informa tion collection imposed on 10 or more personsCMS-1498-P 677

within any 12-month period. This informa tion collection does not impact 10 or more

entities in a 12-month period. In FYs 2008, 2009, 2010, and 2011 we received 1, 4, 5,

and 3 applications, respectively.

c. Reporting of Hospital Quality Data for Annual Hospital Payment Update

As discussed in section V.A. of th is proposed rule, the RHQDAPU program was

originally established to implement s ection 501(b) of Pub. L. 108–173. The RHQDAPU

program originally consisted of a "starter set" of 10 quality measures. OMB approved

the collection of data associated with the or iginal starter set of quality measures under

OMB control number 0938–0918, with a curren t expiration date of January 31, 2011.

As part of our implement ation of section 5001(a) of the DRA, we expanded the

number of quality measures reported in the RHQDAPU program. Specifically,

section 1886(b)(3)(B)(viii)(III) of the Act, a dded by section 5001(a) of the DRA, requires

that the Secretary expand the "starter set" of 10 quality measures that were established by

the Secretary as of November 1, 2003, to include measures "that the Secretary determines

to be appropriate for the measurement of the quality of care (including medication errors)

furnished by hospitals in i npatient settings." Under th is provision, we established

additional program measures to bring the to tal number of measures to 30. The burden

associated with these reporting requirement s is currently approved under OMB control

number 0938–1022, with a current expiration date of June 30, 2011.

In the FY 2010 IPPS proposed rule (74 FR 24168), we solicited public comments

on several considerations for expanding and updating quality measures. We responded to

the public comments received in the FY 2010 IPPS/RY 2010 LTCH PPS final ruleCMS-1498-P 678

(74 FR 43866 through 43868). We also expa nded and finalized the RHQDAPU program

measure set for the FY 2011 payment determinat ion. As part of the expansion effort, we

finalized 46 measures in the FY 2010 IPPS/RY 2010 LTCH PPS final rule

(74 FR 43872).

In this FY 2011 IPPS/LTCH PPS proposed rule, we are proposing to retire one

measure for the FY 2011 payment determination. For the FY 2012 through FY 2014

payment determinations, we are proposing to retain the remaining 45 of the 46 current

measures; and for FY 2012, to add 10 new m easures and to require all-patient volume

data for selected MS-DRGs that relate to RHQDAPU program measures; for FY 2013, to

retain the FY 2012 measures and add 35 new measures; and for FY 2014, to retain the

FY 2013 measures and to add 4 new measur es. In addition, we have listed 28 new

measures that are under consideration for adop tion in future years. We are proposing that

beginning with CY 2011 discharges, hospitals submit some of the ne w measure data to a

qualified registry. We are also soliciting public comments on retiring one or more of the

11 additional measures suggested by commenters in the FY 2010 IPPS/RY 2010 LTCH

PPS final rule based on topped out performance and other rationales.

In summary, we are proposing to retire one measure for the FY 2011 annual

payment update and seeking comments on wh ether to retire 11 additional measures

suggested by commenters in the FY 2010 IPPS/RY 2010 LTCH PPS final rule. In

addition, we are proposing to expand the RHQDAPU program measure set to:

55 measures for the FY 2012 annual payment upd ate (taking into account our proposal to

retire one measure for the FY 2011 annual payment update); 90 measures for theCMS-1498-P 679

FY 2013 annual payment update, and 94 me asures for the FY 2014 annual payment

update. We also list are 28 additional measures under consideration for adoption in

future years which may increase these numbers if we propose and adopt them in future

IPPS rulemaking. Finally, we are proposing that, beginning with the FY 2012 annual

payment update, hospitals that participate in the RHQDAPU program submit all-patient

volume data for selected MS-DRGs that re late to RHQDAPU program measures. This

proposal would require hospitals to report thes e data beginning with CY 2011 discharges.

We submitted a revised version of the information collection request approved

under OMB control number 0938–1022, to obtai n approval for the proposed new

measures.

Section V.A.10. of this proposed rule a ddresses the reconsid eration and appeal

procedures for a hospital that we be lieve did not meet the RHQDAPU program

requirements. If a hospital disagrees w ith our determination, it may submit a written

request to CMS to reconsider our decision. The hospital’s request for reconsideration

must explain the reasons why it believes it satisfied the RHQDAPU program

requirements. While this is a reporting requirement, the burde n associated with it is not

subject to the PRA under 5 CFR 1320.4(a)(2). The burden associated with information

collection requirements imposed subsequent to an administrative action is not subject to

the PRA.

d. Proposed Occupational Mix Adjustment to the FY 2011 Index (Hospital Wage Index

Occupational Mix Survey)CMS-1498-P 680

Section II.D. of the preamble of this proposed rule discusses the proposed

occupational mix adjustment to the FY 2011 wage index. While the preamble does not

contain any new ICRs, it is important to note that there is an OMB approved information

collection request associated w ith the hospital wage index.

Section 304(c) of Pub. L. 106–554 amended section 1886(d)(3)(E) of the Act to

require CMS to collect data at least onc e 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 occ upational mix adjustment to the wage index. We collect the

data via the occupational mix survey.

The burden associated with this information collection requirement is the time

and effort required to collect and submit the data in the Hospital Wage Index

Occupational Mix Survey to CMS. The afor ementioned burden is subject to the PRA;

however, it is currently approved unde r OMB control number 0938-0907, with an

expiration date of February 28, 2013.

e. Hospital Applications for Geogra phic Reclassifications by the MGCRB

Section III.I.3. of the preamble of this proposed rule discusses revisions to the

wage index based on hospital re designations. As stated in that section, under section

1886(d)(10) of the Act, the MGCRB has the au thority to accept short-term IPPS hospital

applications requesting geogr aphic reclassification for wa ge index or standardized

payment amounts and to issue decisions on th ese requests by hospitals for geographic

reclassification for purposes of payment under the IPPS.CMS-1498-P 681

The burden associated with this application process is the time and effort

necessary for an IPPS hospital to complete and submit an application for reclassification

to the MGCRB. While this requirement is s ubject to the PRA, the associated burden is

currently approved under OMB control numbe r 0938–0573, with an expiration date of

December 31, 2011.

f. Direct GME Payments : General Requirements

Existing regulations at §413.75(b) permit hosp itals that share residents to elect to

form a Medicare GME affiliate d group if they are in the sa me or contiguous urban or

rural areas, if they are under common ownershi p, or if they are jointly listed as program

sponsors or major par ticipating institutions in the same program. The purpose of a

Medicare GME affiliated group is to provide flexibility to hospitals in structuring

rotations under an aggregate FTE resident cap when they share residents. The existing

regulations at §413.79(f)(1) speci fy that each hospital in a Medicare GME affiliated

group must submit a Medicare GME affiliati on agreement (as defined under §413.75(b))

to the Medicare fiscal intermediary or MAC servicing the hospital and send a copy to

CMS’ Central Office no later than July 1 of the residency program year during which the

Medicare GME affiliation agreement will be in effect.

In section V.H.3. of the preamble of this proposed rule, we are proposing to allow

hospitals to electronically submit the copy of the affiliation agreement that is required to

be sent to the CMS Central Office. As st ated earlier in the preamble, the proposed

electronic submission process would consist of either an e-mail mailbox or a Web site

where hospitals would submit their Medicare GME affiliation agreements to the CMSCMS-1498-P 682

Central Office to a designa ted online mailbox. We are proposing that a copy of the

Medicare GME affiliation agreement would need to be received through the electronic

system no later than 11:59 p.m. on July 1 of each academic year. We are proposing that

the electronic affiliation agreement would need to be submitted either as a scanned copy

or a Printer-Friendly Display (PDF) versi on of that hard copy agreement; we are

proposing not to accept an agreement in any el ectronic format that could be subject to

manipulation. The scanned and/or PDF form at will enable CMS to ensure that the

agreements are signed and dated as require d in the regulations at §413.75. Under this

proposal, hospitals would have the option to continue to submit a hard copy of its

affiliation agreement to the CMS Central Office. In addition, each fiscal intermediary or

MAC would continue to have the authority to specify its requirements for submittal of the

Medicare GME affiliation agreement by hosp itals that are part of the affiliation.

The burden associated with this requirement is the time and effort it would take

for the new hospital to develop and submit the Medicare GME affiliation agreement, to

submit it the agreement to its fiscal intermediary or MAC, and to submit a copy to CMS.

In the proposed and final rules that published on May 22, 2009 (74 FR 24080) and

August 27, 2009 (74 FR 43754), we stated that it was difficult for us to estimate the

annual burden associated with this requirement because we cannot estimate the additional

number of hospitals that will be permitted to submit Medicare GME affiliation

agreements in any given year as a result of the change. However, we now have better

data available to quantify the burden associated with the existing requirement for

hospitals to submit GME affiliation agreements to the fiscal intermediary or MACCMS-1498-P 683

servicing the hospital and new requirement for the electronic submission of a copy of the

affiliation agreement to CMS. We are submitting a new information collection request to

OMB for review and approval of the associated burden.

We anticipate receiving between 100 and 150 GME affiliation agreements

annually. For the purposes of our informa tion collection request, we estimate that we

will receive 125 agreements annually. CMS provides a two-page sample agreement for

hospitals; however, some facilities may submit additional information that is not

required. We estimate that it will take 1 hour for a hospital to develop a GME affiliation

agreement or to follow the format provided by CMS. Similarly, we estimate that it will

take each hospital 15 minutes to submit a hard copy of the affiliation agreement to its

fiscal intermediary or MAC. Finally, we estimate that it will take each hospital 5 minutes

to submit an electronic copy of its GME aff iliation agreement to CMS. The total annual

burden associated with developing the af filiation agreement is 125 hours. The total

annual burden associated with submitting a hard copy of the affiliation agreement is 31

hours. The total annual burden associated w ith submitting the agreement electronically is

10 hours. The total annual burden associated w ith all of the requirements in this section

is 166 hours. The total cost associ ated with this requirement is $5,000 ($40.00 x 125

agreements)

.
If you comment on these information coll ection and recordkeeping requirements,

please do either of the following:

1. Submit your comments electronically as specified in the ADDRESSES section

of this proposed rule; orCMS-1498-P 684

2. Submit your comments to the Office of Information and Regulatory Affairs,

Office of Management and Budget,

Attention: CMS De sk Officer, CMS-1498-P

Fax: (202) 395-6974; or

Email: OIRA_submission@omb.eop.gov

C. Response to Comments

Because of the large number of pub lic comments we normally receive on Federal

Register documents, we are not able to acknowle dge 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.CMS-1498-P 685

List of Subjects

42 CFR Part 412

Administrative practice and procedure, He alth facilities, Medicare, Puerto Rico,

Reporting and recordk eeping requirements.

42 CFR Part 413

Health facilities, Kidney diseases, Medicare, Puerto Rico, Reporting and

recordkeeping requirements.

42 CFR Part 440

Grant program-health, Medicaid.

42 CFR Part 441

Family planning, Grant program-health, Infants and children, Medicaid, Penalties,

Prescription drugs, Reporting a nd recordkeeping requirements.

42 CFR Part 482

Grant program-health, Hospitals , Medicaid, Medicare, Reporting and

rcordkeeping requirements.

42 CFR Part 485

Grant programs-health, Health facilities, Medicaid, Medicare, Reporting and

recordkeeping requirements.

42 CFR Part 489

Health facilities, Medicare, Reporting and recordkeeping requirements.

For the reasons stated in the preamble of this proposed rule, the Centers for

Medicare & Medicaid Services is proposing to amend 42 CFR Chapter IV as follows:CMS-1498-P 686

PART 412--PROSPECTIVE PAYM ENT SYSTEMS FOR INPATIENT

HOSPITAL SERVICES

1. The authority citation for Part 412 continues to read as follows:

Authority : Secs. 1102 and 1871 of the Social Security Act (42 U.S.C. 1302 and

1395hh), and sec. 124 of Pub. L. 106-113 (113 Stat. 1501A-332).

2. Section 412.4 is amended by—

a. Republishing the introductory language of paragraph (b).

b. Removing the word “or” at the end of paragraph (b)(1).

c. Removing the period at the end of paragraph (b)(2) and adding in its place a

semicolon.

d. Adding new paragraphs (b)(3) and (b)(4).

The additions read as follows:

§412.4 Discharges and transfers.

* * * * *

(b) Acute care transfers . A discharge of a hospital inpa tient is considered to be a

transfer for purposes of payment under this pa rt if the patient is readmitted the same day

(unless the readmission is unrelated to the initial discharge) to another hospital that is—

* * * * *

(3) An acute care hospital that would ot herwise be eligible to be paid under the

IPPS, but does not have an agreement to participate in the Medicare program; or

(4) A critical access hospital.

* * * * *CMS-1498-P 687

§412.106 [Amended]

3. Section 412.106 is amended by—

a. In paragraph (b)(2)(i)(B), removing th e word “or” and adding in its place the

word “including”.

b. In paragraph (b)(2)(iii)(B), removing the word “or” and adding in its place the

word “including”.

§412.108 [Amended]

4. Amend §412.108 (a)(1)(iii) introductory text by removing the word

“receiving” and adding in its place the words “entitled to”.

5. Section 412.113 is amended by revising paragraph (c)(2)(i)(A) to read as

follows:

§412.113 Other payments.

* * * * *

(c) * * *

(2)(i) * * *

(A) The hospital or CAH is located in a rural area as defined in §412.62(f) and is

not deemed to be located in an urban area under the provisions of §412.64(b)(3). For cost

reporting periods beginning on or after Oct ober 1, 2010, the hospital or CAH is either

located in a rural area as defined in §412.62(f) and is not deemed to be located in an

urban area under the provisions of §412.64(b)(3) or the hospital or CAH has reclassified

as rural under the provisions at §412.103.

* * * * *CMS-1498-P 688

6. Section 412.273 is revised to read as follows:

§412.273 Withdrawing an application, terminating an approved 3-year

reclassification, or canceling a previous withdrawal or termination.

(a) Definitions . For purposes of this section, the following definitions apply.

Termination refers to the termination of an already existing 3-year MGCRB

reclassification where such reclassification has already been in effect for 1 or 2 years, and

there are 1 or 2 years remaining on the 3-year reclassification. A ter mination is effective

only for the full fiscal year(s) remaining in the 3-year period at the time the request is

received. Requests for terminations for part of a fiscal year are not considered.

Withdrawal refers to the withdrawal of a 3- year MGCRB reclassification that has

not yet gone into effect or where the MGCRB has not yet issued a decision on the

application.

(b) General rule . The MGCRB allows a hospital, or group of hospitals, to

withdraw its application or to terminate an already existin g 3-year reclassification, in

accordance with this section.

(c) Timing . (1) A request for withdrawal must be received by the MGCRB--

(i) At any time before the MGCRB issues a decision on the application; or

(ii) After the MGCRB issues a decision, provided that the request for withdrawal

is received by the MGCRB within 45 days of publication of CMS' annual notice of

proposed rulemaking concerning changes to the inpatient hospital prospective payment

system and proposed payment rates for the fis cal year for which the application has been

filed.CMS-1498-P 689

(2) A request for termination must be received by the MGCRB within 45 days of

the publication of CMS’ annual notice of propos ed rulemaking concerning changes to the

inpatient hospital prospective payment system and proposed payment rates for the fiscal

year for which the termination is to apply.

(d) Reapplication within the appr oved 3-year period, cancellations of

terminations and withdrawal s, and prohibition on overlappi ng reclassification approvals

.
(1) Cancellation of ter minations or withdrawals . Subject to the provisions of this

section, a hospital (or group of hospitals) ma y cancel a withdrawal or termination in a

subsequent year and request the MGCRB to re instate the wage index reclassification for

the remaining fiscal year(s) of the 3-year period. (Withdrawals may be cancelled only in

cases where the MGCRB issued a decision on the geographic reclassification request.)

(2) Timing and process of cancellation request . Cancellation requests must be

received in writing by the MGCRB no later than the deadline for submitting

reclassification applications for the following fiscal year , as specified in §412.256(a)(2).

(3) Reapplications . A hospital may apply for reclassification to a different area

(that is, an area different from the one to which it was originally reclassified for the

3-year period). If the application is appr oved, the reclassification will be effective for

3 years. Once a 3-year reclassification becomes effective, a hospital may no longer

cancel a withdrawal or termination of anot her 3-year reclassification, regardless of

whether the withdrawal or termin ation request is made within 3 years from the date of the

withdrawal or termination.CMS-1498-P 690

(4) Termination of existing 3-year reclassification . In a case in which a hospital

with an existing 3-year wage index reclassifi cation applies to be re classified to another

area, its existing 3-year reclassification will be terminated when a second 3-year wage

index reclassification goes into effect fo r payments for discharges on or after the

following October 1.

(e) Written request only . A request to withdraw an application must be made in

writing to the MGCRB by all hospitals that ar e party to the application. A request to

terminate an approved reclassification may be made in writing to the MGCRB by an

individual hospital or by an individual hosp ital that is party to a group classification.

(f) Appeal of the MGCRB's denial of a hospital's request for withdrawal or

termination, or for cancellation of a withdrawal or termination

. (1) A hospital may file an appeal of the MGCRB's denial of its request for

withdrawal or termination, or of the MGCRB’s denial of its request for a cancellation of

such withdrawal or termination, to the Ad ministrator. The appeal must be received

within 15 days of the date of the notice of the denial.

(2) Within 20 days of receipt of the hospital's request for appeal, the

Administrator affirms or reverses the denial.

7. Section 412.503 is amended by—

a. Adding a definition of “long-term care hospital prospective payment system

fiscal year”.

b. Adding a definition of "long-term care hospital prospective payment system

payment year".CMS-1498-P 691

c. Revising paragraph (3) of the definiti on of "long-term care hospital prospective

payment system rate year".

The additions and revision read as follows:

§412.503 Definitions.

* * * * *

Long-term care hospital prospective payment system fiscal year means, beginning

October 1, 2010, the 12-month period of October 1 through September 30.

Long-term care hospital prospective payment system payment year means the

general term that encompasses both the defin ition of "long-term care hospital prospective

payment system rate year" and "long-term care hospital prospective payment system

fiscal year" specified in this section.

Long-term care hospital prospective payment system rate year means—

* * * * *

(3) From October 1, 2009 through Se ptember 30, 2010, the 12-month period of

October 1 through September 30.

* * * * *

8. Section 412.523 is amended by adding a new paragraph (c)(3)(vii) to read as

follows:

§412.523 Methodology for calculating the Federal prospective payment rate.

* * * * *

(c) * * *

(3) * * *CMS-1498-P 692

(vii) For long-term care hospital prospective payment system fiscal year

beginning October 1, 2010, a nd ending September 30, 2011 . The standard Federal rate

for the long-term care hospital prospective payment system fiscal year beginning

October 1, 2010, and ending September 30, 2011, is the standard Federal rate for the

previous long-term care hosp ital prospective payment system rate year updated by -0.1

percent. The standard Federal rate is adjust ed, as appropriate, as described in paragraph

(d) of this section.

* * * * *

9. Section 412.525 is amended by revising pa ragraphs (a)(1) and (a)(2) to read as

follows:

§412.525 Adjustments to the Fe deral prospective payment.

(a) Adjustments for high-cost outliers . (1) CMS provides for an additional

payment to a long-term care hospital if its estimated costs for a patient exceed the

adjusted LTC-MS-DRG payment plus a fi xed-loss amount. For each long-term care

hospital prospective payment system pa yment year, as described in §412.503, CMS

determines a fixed-loss amount that is the maximum loss that a hospital can incur under

the prospective payment system for a case with unusually high costs.

(2) The fixed-loss amount is determined for the long-term care hospital

prospective payment system payment year, as defined in §412.503, using the

LTC-MS-DRG relative weights that are in effect at the start of the applicable long-term

care hospital prospective payment system payment year, as defined in §412.503.CMS-1498-P 693

* * * * *

PART 413--PRINCIPLES OF REASO NABLE COST REIMBURSEMENT;

PAYMENT FOR END-STAGE RENAL DISEASE SERVICES; OPTIONAL

PROSPECTIVELY DETERMINED PAYMENT RATES FOR SKILLED

NURSING FACILITIES

10. The authority citation for Part 413 continues to read as follows:

Authority : Secs. 1102, 1812(d), 1814(b), 1815, 1833( a), (i), and (n), 1861(v),

1871, 1881, 1883, and 1886 of the Social Security Act (42 U.S.C. 1302, 1395d(d),

1395f(b), 1395g, 1395l(a), (i), and (n), 1395x(v), 1395hh, 1395rr, 1395tt, and 1395ww);

and sec. 124 of Pub. L. 106-133 (113 Stat. 1501A-332).

11. Section 413.70 is amended by—

a. Revising paragraph (b)(3)(i)(A).

b. Revising paragraph (b)(3)(i)(B).

c. Revising paragraph (b)(3)(i)(D).

The revisions read as follows:

§413.70 Payment for services of a CAH.

* * * * *

(b) * * *

(3) * * *

(i) * * *

(A)( 1 ) For cost reporting periods beginning before October 1, 2010 . The election

must be made in writing, made on an annual basis, and delivered to the fiscalCMS-1498-P 694

intermediary or MAC servicing the CAH at least 30 days before the start of the cost

reporting period for which the election is ma de. An election, once made for a cost

reporting period, remains in effe ct for all of that period.

( 2 ) For cost reporting periods beginning on or after October 1, 2010 . If a CAH

had elected the method specified in paragraph (b )(3)(i) of this section in its most recent

cost reporting period beginning prior to Octo ber 1, 2010, that election remains in effect

for all of that period and for all subse quent cost reporting periods, unless the CAH

submits a termination request to the fiscal intermediary or MAC servicing the CAH at

least 30 days before the start of the next co st reporting period. If a CAH had not, in its

most recent cost reporting period, elected the method described in paragraphs (b)(3)(ii)

and (b)(3)(iii) of this section and chooses to elect this method on or after October 1, 2010,

the election must be made in writing and delivered to the fiscal intermediary or MAC

servicing the CAH at least 30 days before th e start of the first cost reporting period for

which the election is made. Once the election is made, it remains in effect for all of that

period and for all subsequent cost reporting periods unless the CAH submits a

termination request to the fiscal intermediary or MAC servicing the CAH at least 30 days

before the start of the next cost reporting pe riod. For cost reporting periods beginning in

October 2010 and November 2010, if a CAH wish es to terminate its election, the CAH

must submit a termination request to the fiscal intermediary or MAC servicing the CAH

prior to December 1, 2010.

(B) An election of the payment method specified under paragraph (b)(3)(i) of this

section applies to all services furnished to outpatients by a physician or other practitionerCMS-1498-P 695

who has reassigned his or her rights to bill for those services to the CAH in accordance

with subpart F of Part 424 of this chapter. If a physician or other practitioner does not

reassign his or her billing rights to the CAH in accordance with subpart F of Part 424 of

this chapter, payment for the physician’s or practitioner’s services furnished to CAH

outpatients will be made on a fee schedule or other applicable basis as specified in

subpart B of Part 414 of this subchapter.

* * * * *

(D) An election made under paragraph (b )(3)(i) of this section is effective as

provided for under paragraph (b)(3)(i)(A) or paragraph (b)(3)(i)(C) of this section and

does not apply to an election that was terminat ed prior to the start of the cost reporting

period for which it would otherwise apply.

* * * * *

12. Section 413.75 is amended by revising the definitions of “Primary care

resident” and “Resident” under para graph (b) to read as follows:

§413.75 Direct GME payments: General requirements.

* * * * *

(b) * * *

Primary care resident is a resident who is enrolled in an approved medical

residency training program in family medi cine, general internal medicine, general

pediatrics, preventive medicine , geriatric medicine or oste opathic general practice.

Effective for cost reporting periods beginning on or after October 1, 2010, primary care

resident is a resident who is formally accepte d, enrolled, and particip ating in an approvedCMS-1498-P 696

medical residency training program in fa mily medicine, general internal medicine,

general pediatrics, preventive medicine, ge riatric medicine or osteopathic general

practice.

* * * * *

Resident means an intern, resident, or fellow who participates in an approved

medical residency program, including programs in osteopathy, dentistry, and podiatry, as

required in order to become certified by the appropriate specialty board. Effective for

cost reporting periods beginning on or after October 1, 2010, resident means an intern,

resident, or fellow who is formally accepted, enrolled, and particip ating in an approved

medical residency program, including programs in osteopathy, dentistry, and podiatry, as

required in order to become certified by the appropriate specialty board.

* * * * *

PART 440—SERVICES: GENERAL PROVISIONS

13. The authority citation for Part 440 continues to read as follows:

Authority: Sec. 1102 of the Social Security Act (42 U.S.C. 1302).

18. Section 440.160 is amended by revising paragraphs (b)(1) and (b)(2) to read

as follows:

§ 440.160 Inpatient psychiatric services for individuals under age 21.

* * * * *

(b) * * *

(1) A psychiatric hospital that meets the requirements for participation in

Medicare as a psychiatric hospita l as specified in §482.60 of this chapter, or is accreditedCMS-1498-P 697

by a national organization whose psychiat ric hospital accrediting program has been

approved by CMS, or a hospital with an i npatient psychiatric program that meets the

requirements for particip ation in Medicare as a hospital as specified in Part 482 of this

chapter or is accredited by a national accrediting organization whose hospital accrediting

program has been approved by CMS.

(2) A psychiatric facility that is not a hospital and is accredited by a national

accrediting organization whose program has been approved by CMS, or by any other

accrediting organization with comparable standa rds that is recognized by the State.

* * * * *

PART 441—SERVICES: REQUIREMEN TS AND LIMITS APPLICABLE TO

SPECIFIC SERVICES

14. The authority citation for Part 441 continues to read as follows:

Authority: Sec. 1102 of the Social Security Act (42 U.S.C. 1302).

15. Section 441.151 is amended by revising paragraphs (a)(2)(i) and (a)(2)(ii) to

read as follows:

§ 441.151 General requirements.

(a) * * *

(2) * * *

(i) A psychiatric hospita l that meets the requirements for participation in

Medicare as a psychiatric hospita l as specified in §482.60 of this chapter, or is accredited

by a national organization whose psychiat ric hospital accrediting program has been

approved by CMS, or a hospital with an i npatient psychiatric program that meets theCMS-1498-P 698

requirements for particip ation in Medicare as a hospital as specified in Part 482 of this

chapter or is accredited by a national accrediting organization whose hospital accrediting

program has been approved by CMS.

(ii) A psychiatric facility that is not a hospital and is accredited by a national

accrediting organization whose program has been approved by CMS, or by any other

accrediting organization with comparable standa rds that is recognized by the State.

* * * * *

PART 482—CONDITIONS OF PARTICIPATION FOR HOSPITALS

16. The authority citation for Part 482 continues to read as follows:

Authority: Secs. 1102 and 1871 of the Social Security Act (42 U.S.C. 1302 and

1395(hh)).

17. Section 482.56 is amended by revising paragraph (b) to read as follows:

§482.56 Condition of participatio n: Rehabilitation services.

* * * * *

(b) Standard: Delivery of services. Services must only be provided under the

orders of a qualified and licen sed practitioner who is respons ible for the care of the

patient, acting within his or he r scope of practice under State law, and who is authorized

by the hospital’s medical staff to order the services in accordance with hospital policies

and procedures and State laws.

(1) All rehabilitation services orders must be documented in the patient's

medical record according to the requirements at §482.24.CMS-1498-P 699

(2) The provision of care and the personnel qualifications must be in

accordance with national acceptable standards of practice and must also meet the

requirements of §409.17 of this chapter.

18. Section 482.57 is amended by revising paragraph (b)(3) and adding paragraph

(b)(4) to read as follows:

§482.57 Condition of participatio n: Respiratory care services.

* * * * *

(b) * * *

(3) Services must only be provided under the orders of a qualified and licensed

practitioner who is responsible for the care of the patient, acting with in his or her scope

of practice under State law, and who is authoriz ed by the hospital’s medical staff to order

the services in accordance with hospita l policies and procedures and State laws.

(4) All respiratory care services orde rs must be documented in the patient's

medical record according to the requirements at §482.24.

PART 485—CONDITIONS OF PARTICIPAT ION: SPECIALIZED PROVIDERS

19. The authority citation for Part 485 continues to read as follows:

Authority: Secs. 1102 and 1871 of the Social Security Act (42 U.S.C. 1302 and

1395(hh)).

20. Section 485.610 is amended by revising the introductory text of paragraph (b)

to read as follows:

§485.610 Condition of participatio n: Status and location.

* * * * *CMS-1498-P 700

(b) Standard: Location in a ru ral area or treatment as rural . The CAH meets the

requirements of either paragraph (b)(1) or (b )(2) of this section or the requirements of

either (b)(3) or (b)(4) of this section.

* * * * *

PART 489--PROVIDER AGREEMENTS AND SUPPLIER APPROVAL

21. The authority citation for Part 489 continues to read as follows:

Authority : Secs. 1102, 1819, 1820(e), 1861, 1864(m), 1866, 1869, and 1871 of

the Social Security Act (42 U.S.C. 1302, 1395i-3, 1395x, 1395aa(m), 1395cc, 1395ff, and

1395hh).

22. Section 489.1 is revised to read as follows:

§489.1 Statutory basis.

(a) This part implements section 1866 of the Social Security Act (the Act).

Section 1866 of the Act specifies the terms of provider agreements, the grounds for

terminating a provider agreement, the ci rcumstances under which payment for new

admissions may be denied, and the circumst ances under which payment may be withheld

for failure to make timely utilization review. The sections of the Act specified in

paragraphs (a)(1) through (a)(4) of this section are also pertinent.

(1) Section 1861 of the Act defines the services covered under Medicare and the

providers that may be reimbursed for furnishing those services.

(2) Section 1864 of the Act provides for the use of State survey agencies to

ascertain whether certai n entities meet the conditi ons of participation.CMS-1498-P 701

(3) Section 1865(a)(1) of the Act provides that an entity accredited by a national

accreditation body found by the Secretary to satisfy the Medicare conditions of

participation, conditions for c overage, or conditions of certif ication or requirements for

participation sha ll be treated as meeting those requ irements. Section 1865(a)(2) of the

Act requires the Secretary to consider when making such a finding, among other things,

the national accreditation body’s accreditati on requirements and survey procedures.

(4) Section 1871 of the Act authorizes th e Secretary to prescr ibe regulations for

the administration of the Medicare program.

(b) Although section 1866 of the Act speaks only to providers and provider

agreements, the effective date rules in this part are made applicable also to the approval

of suppliers that meet the requirements specified in §489.13.

(c) Section 1861(o)(7) of the Act requi res each HHA to provide CMS with a

surety bond.

23. Section 489.13 is revised to read as follows:

§489.13 Effective date of agreement or approval.

(a) Applicability

— (1) General rule

. Except as provided in paragraph (a)(2) of

this section, this section applies to Medi care provider agreements with, and supplier

approval of, entities that, as a basis for participation in Medicare are subject to a

determination by CMS on the basis of--

(i) A survey conducted by the State surv ey agency or CMS staff surveyors; or

(ii) Accreditation by an accreditation organization whose program has CMS

approval at the time of the accredita tion survey and accreditation decision.CMS-1498-P 702

(2) Exceptions

. (i) For an agreement with a community mental health center

(CMHC) or a federally qualifie d health center (FQHC), the effective date is the date on

which CMS accepts a signed agreement which assures that the CMHC or FQHC meets

all Federal requirements.

(ii) A Medicare supplier approval of a laboratory is effective only while the

laboratory has in effect a valid CLIA certificat e issued under Part 493 of this chapter, and

only for the specialty and subspecialty tests it is authorized to perform.

(b) All health and safety standa rds are met on the date of survey

. The agreement

or approval is effective on the date the Stat e agency, CMS staff, or the CMS contractor

survey (including the Life Safety Code survey , if applicable) is completed, or on the date

of the accreditation decision, as applicable, if on that date the provider or supplier meets

all applicable Federal requirements as set forth in this chapter. (If the agreement or

approval is time-limited, the new agreement or approval is effective on the day following

the expiration of the current agreement or appr oval.) However, the effective date of the

agreement or approval may not be earlier than the latest of the dates on which CMS

determines that each applicable Federal requirement is met. Federal requirements

include, but are not limited to--

(1) Enrollment requirements established in Part 424, Subpart P, of this chapter.

CMS determines, based upon its re view and verification of th e prospective provider’s or

supplier’s enrollment application, the date on which enrollment requirements have been

met;

(2) The requirements iden tified in §§489.10 and 489.12; andCMS-1498-P 703

(3) The applicable Medicare health and safety standards, such as the applicable

conditions of partic ipation, the requirements for pa rticipation, the conditions for

coverage, or the conditi ons for certification.

(c) All health and safety standard s are not met on the date of survey

. If, on the

date the survey is completed, the provider or supplier has failed to meet any one of the

applicable health and safety standards, the following rules apply for determining the

effective date of the provider agreement or supplier approval, assuming that no other

Federal requirements remain to be satisfied. The effectiv e date of the agreement or

approval may not be earlier than the latest of the dates on wh ich each applicable Federal

requirement is met.

(1) For an agreement with an SNF, the effective date is the date on which—

(i) The SNF is in substantial complia nce (as defined in §488.301 of this chapter)

with the requirements fo r participation; and

(ii) CMS or the State survey agency receives from the SNF, if applicable, an

approvable waiver request.

(2) For an agreement with, or an appr oval of, any other provider or supplier,

(except those specified in paragraph (a)(2) of th is section), the effective date is the earlier

of the following:

(i) The date on which the provider or s upplier meets all applicable conditions of

participation, conditions for coverage, or conditio ns for certification; or, if applicable, the

date of a CMS-approved accreditation orga nization program’s positive accreditationCMS-1498-P 704

decision, issued after the accreditation organiza tion has determined th at the provider or

supplier meets all applicable conditions.

(ii) The date on which a provider or s upplier is found to meet all conditions of

participation, conditions for c overage, or conditions for cer tification, but has lower-level

deficiencies, and--

(A) CMS or the State survey agency receives an acceptable plan of correction for

the lower-level deficiencies (the date of receipt is the effective date regardless of when

the plan of correction is approved); or, if applicable, a CMS- approved accreditation

organization program issues a positive accreditation decision after it receives an

acceptable plan of correction for the lower-level deficiencies; or

(B) CMS receives an approvable waiver request (the date of receipt is the

effective date regardless of when CMS approves the waiver request).

(C) For an agreement with any other provider or an approval of any other

supplier (except those specified in paragraph (a )(2) of this section) that is found to meet

all conditions of partic ipation, conditions for coverage, or conditions for certification, but

has lower-level deficiencies and has submitted both an approvable plan of

correction/positive accreditation decision and an approvable waiver request, the effective

date is the later of the dates that result when calculated in accordance with paragraph

(c)(2)(ii)(A) or (c)(2)(ii)(B) of this section.CMS-1498-P

(Catalog of Federal Domestic Assistance Pr ogram No. 93.773, Medicare--Hospital Insurance;

Program No. 93.774, Medicare--Supplementary Medi cal Insurance Program; and Program No.

93.778, Medical Assistance)

Dated: April 6, 2010.

______________________________ Charlene Frizzera,

Acting Administrator, Centers for

Medicare & Medicaid Services

Dated: April 16, 2010.

___________________________ Kathleen Sebelius,

Secretary

.

BILLING CODE 4120-01-PCMS-1498-P 706

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

Federal Regulations.]

Addendum—Proposed Schedule of Standardiz ed Amounts, Update Factors, and

Rate-of-Increase Percentages Effective with Cost Reporting Periods Beginning on or after

October 1, 2010

I. Summary and Background

In this Addendum, we are setting forth a descri ption of the methods and data we used to

determine the proposed prospective payment rates for Medicare hospital in patient operating costs

and Medicare hospital i npatient capital-related costs for FY 2011 for acute care hospitals. We

note that on March 23, 2010, the Pa tient Protection and Affordable Care Act (PPACA), Pub. L.

111-148 was enacted. Following the enactment of Pub. L. 111-148, the Health Care and

Education Reconciliation Act of 2010, Public L. 111-152 (enact ed on March 30, 2010), amended

certain provisions of Pub. L. 111-148. A num ber of the provisions of Pub. L. 111-148, as

amended by Pub. L. 111-152, affect the IPPS and the LTCH PPS and the providers and suppliers

addressed in this proposed rule. However, due to the timing of the passage of the legislation, we

are unable to address those provisions in this proposed rule. Therefore, the proposed policies

and payment rates in this proposed rule do not re flect the new legislation. We plan to issue

separate documents in the Federal Register addressing the provisions of Pub. L. 111-148, as

amended, that affect our proposed policies and payment rates for FY 2011 under the IPPS and

the LTCH PPS. In addition, we plan to issue further instructions implementing the provisions of

Pub. L. 111-148, as amended, that affect the policies and payment rates for FY 2010 under the

IPPS and for RY 2010 under the LTCH PPS.CMS-1498-P 707

We also are setting forth the proposed rate-of- increase percenta ges for updating the target

amounts for certain hospitals excluded from th e IPPS for FY 2011. We note that, because

certain hospitals excluded from the IPPS are paid on a reasonable cost basis subject to a rate-ofincrease ceiling (and not by the IPPS), these hospitals are not affected by the figures for the

standardized amounts, offsets, and budget neutrality factors. Therefore, in this proposed rule, we

are proposing to establish the rate-of-increase percentages for updating the target amounts for

certain hospitals excluded from the IPPS that are effective for cost reporting periods beginning

on or after October 1, 2010.

In addition, we are setting forth a descrip tion of the methods and data we used to

determine the proposed standard Federal rate that w ill be applicable to Medicare LTCHs for

FY 2011.

In general, except for SCHs, MDHs, and hospita ls located in Puerto Rico, each hospital’s

payment per discharge under the IPPS is based on 100 percent of the Federal national rate, also

known as the national adjusted standardized amou nt. This amount reflect s the national average

hospital cost per case from a base year, updated for inflation.

Currently, SCHs are paid based on whichever of the following rates yields the greatest

aggregate payment: the Federal national rate; the updated hospital-speci fic rate based on FY

1982 costs per discharge; the updated hospital- specific rate based on FY 1987 costs per

discharge; the updated hospital-specific rate based on FY 1996 costs per discharge; or the

updated hospital-specific ra te based on the FY 2006 costs per discharge.

Under section 1886(d)(5)(G) of the Act, MDHs historically have been paid based on the

Federal national rate or, if high er, the Federal national rate pl us 50 percent of the difference

between the Federal national rate and the upda ted hospital-specific rate based on FY 1982 orCMS-1498-P 708

FY 1987 costs per discharge, whichever was higher. However, section 5003(a)(1) of

Pub. L. 109-171 extended and modified the MDH sp ecial payment provision that was previously

set to expire on October 1, 2006, to include disc harges occurring on or after October 1, 2006, but

before October 1, 2011. Under se ction 5003(b) of Pub. L. 109-171, if the change results in an

increase to an MDH’s target amount, we must re base an MDH's hospital-specific rates based on

its FY 2002 cost report. Section 5003(c) of Pub. L. 109-171 further required that MDHs be paid

based on the Federal nationa l rate or, if higher, the Federal na tional rate plus 75 percent of the

difference between the Federal na tional rate and the upda ted hospital-specific rate. Further,

based on the provisions of section 5003(d) of P ub. L. 109-171, MDHs are no longer subject to

the 12-percent cap on their DSH payment adjustment factor.

For hospitals located in Puerto Rico, the pa yment per discharge is based on the sum of

25 percent of an updated Puerto Rico-specifi c rate based on average costs per case of

Puerto Rico hospitals for the base year and 75 percent of the Federal national rate. (We refer

readers to section II.D.3. of this A ddendum for a complete description.)

As discussed below in section II. of this Addendum, we are proposing to make changes in

the determination of the prospective payment ra tes for Medicare inpatient operating costs for

acute care hospitals for FY 2011. In section III. of this Addendum, we discuss our proposed

policy changes for determinin g the prospective payment ra tes for Medicare inpatient

capital-related costs for FY 2011. In section IV . of this Addendum, we are setting forth our

proposed changes for determining the rate-of-inc rease limits for certain hospitals excluded from

the IPPS for FY 2011. In section V. of this Addendum, we are proposing to make changes in the

determination of the standard Federal rate for LTCHs under the LTCH PPS for FY 2011. TheCMS-1498-P 709

tables to which we refer in the preamble of this proposed rule are presented in section VI. of this

Addendum.

II. Proposed Changes to Prospective Paym ent Rates for Hospital Inpatient Operating

Costs for Acute Care Hospitals for FY 2011

The basic methodology for determining prospe ctive payment rates for hospital inpatient

operating costs for acute care hospitals for FY 2005 and subsequent fiscal years is set forth at

§412.64. The basic methodology for determining th e prospective payment rates for hospital

inpatient operating costs for hospitals located in Puerto Rico for FY 2005 and subsequent fiscal

years is set forth at §§412.211 and 412.212. Below we discuss the factors used for determining

the proposed prospective payment rates for FY 2011.

In summary, the proposed standardized amount s set forth in Tables 1A, 1B, and 1C of

section VI. of this Addendum reflect—

● Equalization of the standardized amount s for urban and other areas at the level

computed for large urban hospitals durin g FY 2004 and onward, as provided for under

section 1886(d)(3)(A)(iv)(II) of the Act, updated by the applicable percentage increase required

under sections 1886(b)(3)(B)(i)(XX) a nd 1886(b)(3)(B)(viii) of the Act.

● The labor-related share that is applied to the standardized amounts and Puerto Ricospecific standardized amounts to give the hospita l the highest payment, as provided for under

sections 1886(d)(3)(E) and 1886(d)(9)(C)(iv) of the Act.

● Proposed updates of 2.4 percen t for all areas (that is, the estimated full market basket

percentage increase of 2.4 percent), as required by section 1886(b)(3)(B)(i)(XX) of the Act, as

amended by section 5001(a)(1) of Pub. L. 109-171, and reflecting the requirements of section

1886(b)(3)(B)(viii) of the Act, as added by s ection 5001(a)(3) of Pub. L. 109-171, to reduce theCMS-1498-P 710

applicable percentage increase by 2.0 percentage points for a hospital that fails to submit data, in

a form and manner, and at the time specified by the Secretary, relating to the quality of inpatient

care furnished by the hospital.

● A proposed update of 2.4 percent to the Puerto Rico-specific standardized amount

(that is, the full estimated rate-of-increase in the hospital market basket for IPPS hospitals), as

provided for under §412.211(c), which states th at we update the Puerto Rico-specific

standardized amount using the percentage increas e specified in §412.64(d)(1), or the percentage

increase in the market basket index for pr ospective payment hospitals for all areas.

● An adjustment to the standardized amount to ensure budget neutrality for DRG

recalibration and reclassificati on, as provided for under section 1886(d)(4)(C)(iii) of the Act.

● An adjustment to ensure the wage inde x changes are budget neutral, as provided for

under section 1886(d)(3)(E)(i) of the Act. We note that section 1886(d)(3)(E)(i) of the Act

requires that we do not consider the labor-relat ed share of 62 percent to compute wage index

budget neutrality.

● An adjustment to ensure the effects of ge ographic reclassification are budget neutral,

as provided for in section 1886(d)(8)(D) of the Act, by removing the FY 2010 budget neutrality

factor and applying a revised factor.

● An adjustment to remove the FY 2010 ou tlier offset and apply an offset for FY 2011,

as provided for in section 1886(d)(3)(B) of the Act.

● As discussed below and in section II.D. of the preamble to this proposed rule, an

adjustment to meet the requirements of secti on 7(b)(1)(B) of Pub. L. 110-90 to adjust the

standardized amounts to offset the estimated amount of the incr ease in aggregate paymentsCMS-1498-P 711

(including interest) due to documen tation and coding that did not reflect real changes in case-mix

for discharges occurring during FY 2008 and FY 2009.

For FY 2011 (in the absence of the provisions of Pub. L. 111-148 as amended by Pub. L.

111-152), the requirement under section 410A of Pub. L. 108-173 to conduct a rural community

hospital demonstration program and under section 410A(c)(2) of Pub. L. 108-173 to adjust the

standardized amount to ensure the effects of the rural community hospital demonstration are

budget neutral has expired. Therefore, for this pr oposed rule, there is no adjustment applied the

standardized amount to ensure the effects of the rural community hospital demonstration are

budget neutral.

We note that, beginning in FY 2008, we app lied the budget neutrality adjustment for the

rural floor to the hospital wage indices rather than the st andardized amount. As we did for FY

2010, for FY 2011, we are proposing to continue to apply the rural floor budget neutrality

adjustment to hospital wage indices rather than the standardized amount. In addition, instead of

applying the budget neutrality adjustment fo r the imputed floor adopted under section

1886(d)(3)(E) of the Act to the standardized amount, for FY 2011, we are proposing to continue

to apply the imputed floor budget neutrality adjustme nt to the wage indices. Consistent with the

policy we established in the FY 2009 IPPS final rule (in absence of the provisions of Pub. L.

111-148, as amended by Pub. L. 111-152), we also ar e proposing to continue to apply the budget

neutrality adjustments for the rural floor and imputed rural floor at the State level rather than the

national level. For a complete discussion of the budget neutrality changes concerning the rural

floor and the imputed floor, including the with in-State budget neutralit y adjustment, we refer

readers to section III.B.2. of the preamble of the FY 2009 IPPS final rule and this proposed rule.CMS-1498-P 712

A. Calculation of the Ad justed Standardized Amount

1. Standardization of Base-Y ear Costs or Target Amounts

In general, the national standardized am ount is based on per discharge averages of

adjusted hospital costs from a base period (section 1886(d)(2)(A) of the Act), updated and

otherwise adjusted in accordance with the provisi ons of section 1886(d) of the Act. For Puerto

Rico hospitals, the Puerto Rico-s pecific standardized amount is based on per discharge averages

of adjusted target amounts from a base period (section 1886(d)(9)(B)(i) of the Act), updated and

otherwise adjusted in accordance with the provi sions of section 1886(d)(9) of the Act. The

September 1, 1983 interim final rule (48 FR 3976 3) contained a detaile d explanation of how

base-year cost data (from cost reporting periods ending during FY 1981) were established for

urban and rural hospitals in the initial development of standardized amounts for the IPPS. The

September 1, 1987 final rule (52 FR 33043 and 33066) contains a detailed explanation of how

the target amounts were determined and how they are used in computing the Puerto Rico rates.

Sections 1886(d)(2)(B) and 1886(d)(2)(C) of the Act require us to update base-year per

discharge costs for FY 1984 and then standardize th e cost data in order to remove the effects of

certain sources of cost variations among hospitals . These effects include case-mix, differences in

area wage levels, cost-of-living adjustments for Alaska and Hawaii, IME costs, and costs to

hospitals serving a disproportionate share of low-income patients.

In accordance with section 1886(d)(3)(E) of the Act, the Secretary estimates, from

time-to-time, the proportion of hospita ls’ costs that are attributab le to wages and wage-related

costs. In general, the standardized amount is divided into labor-re lated and nonlabor-related

amounts; only the proportion considered to be the labor-related amount is adjusted by the wage

index. Section 1886(d)(3)(E) of the Act requires that 62 percent of the standardized amount beCMS-1498-P 713

adjusted by the wage index, unless doing so would result in lower payments to a hospital than

would otherwise be made. (Section 1886(d)(9)(C)(iv) (II) of the Act extends this provision to the

labor-related share for hospitals located in Puerto Rico.)

For FY 2011, we are proposing to continue to use a labor-related share of 68.8 percent for

discharges occurring on or after October 1, 2010 for the national standardized amounts and 62.1

percent for the Puerto Rico-specific standardiz ed amount. Consistent with section 1886(d)(3)(E)

of the Act, we are applying the wage index to a labor-related share of 62 percent for all IPPS

hospitals whose wage index values are less than or equal to 1.0000. For all IPPS hospitals whose

wage indices are greater than 1.0000, we are applying the wage index to a labor-related share of

68.8 percent of the national standardized amount. For FY 2011, all Puerto Rico hospitals have a

wage index less than 1.0. Therefore, the nationa l labor-related share will always be 62 percent

because the wage index for all Puer to Rico hospitals is less than 1.0.

For hospitals located in Puerto Rico, we are applying a labor-related share of 62.1 percent

if its Puerto Rico-specific wage index is great er than 1.0000. For hospitals located in Puerto

Rico whose Puerto-Rico specific wage index va lues are less than or equal to 1.0000, we are

applying a labor share of 62 percent.

The proposed standardized amounts for operatin g costs appear in Table 1A, 1B, and 1C

of the Addendum to this proposed rule.

2. Computing the Average Standardized Amount

Section 1886(d)(3)(A)(iv)(II) of the Act requires that, beginning with FY 2004 and

thereafter, an equal standardized amount be comput ed for all hospitals at the level computed for

large urban hospitals during FY 2003, updated by the applicable percentage update. Section

1886(d)(9)(A)(ii)(II) of the Act equalizes the Puer to Rico-specific urban and rural area rates.CMS-1498-P 714

Accordingly, we are proposing to calculate th e FY 2011 national and Puerto Rico standardized

amounts irrespective of whether a hospital is located in an urban or rural location.

3. Updating the Average Standardized Amount

In accordance with section 1886(d)(3)(A)(iv)(II) of the Act, we are proposing to update

the equalized standardized amount for FY 2011 by the full estimated market basket percentage

increase for hospitals in all areas, as specified in section 1886(b)(3)(B)(i)(XX) of the Act, as

amended by section 5001(a)(1) of Pub. L. 109-171. The percentage increase in the market

basket reflects the average change in the pri ce of goods and services comprising routine,

ancillary, and special care unit hospital inpatient services. The most recent forecast of the

hospital market basket increase for FY 2011 is 2.4 percent. Thus, for FY 2011, the proposed

update to the average standardized amount is 2.4 pe rcent for hospitals in all areas. The estimated

market basket increase of 2.4 percent is based on IHS Global Insight, Inc.’s 2010 first quarter

forecast of the hospital market basket increase (as discussed in Appendix B of this proposed

rule).

Section 1886(b)(3)(B) of the Act specifies the mechanism to be used to update the

standardized amount for payment for inpa tient hospital operating costs. Section

1886(b)(3)(B)(viii) of the Act, as added by s ection 5001(a)(3) of Pub. L. 109-171, provides for a

reduction of 2.0 percentage points from the upda te percentage increase (also known as the

market basket update) for FY 2007 and each s ubsequent fiscal year for any "subsection (d)

hospital" that does not submit quality data, as discussed in section V.A. of the preamble of this

final rule. The proposed standardized amounts in Tables 1A through 1C of section VI. of this

Addendum reflect these differential amounts.CMS-1498-P 715

Section 412.211(c) states that we update the Puerto Rico-specific standardized amount

using the percentage increase specified in §412.64(d)(1 ), or the percentage increase in the market

basket index for prospective payment hospitals fo r all areas. We are proposing to apply the full

rate-of-increase in the hospital market basket for IPPS hospitals to the Puerto Rico-specific

standardized amount. Therefore, the proposed upd ate to the Puerto Rico -specific standardized

amount is 2.4 percent.

Although the update factors for FY 2011 are set by law, we are required by section

1886(e)(4) of the Act to recommend, taking into account MedPAC’s recommendations,

appropriate update factors for FY 2011 for both IP PS hospitals and hospita ls and hospital units

excluded from the IPPS. Section 1886(e)(5)(A) of the Act requires that we publish our proposed

recommendations in the Federal Register for public comment. Our recommendation on the

update factors is set forth in A ppendix B of this proposed rule.

4. Other Adjustments to the Average Standardized Amount

As in the past, we are proposing to adjust the FY 2011 standardized amount to remove

the effects of the FY 2010 geographic reclassifications and outlier payments before applying the

FY 2011 updates. We then apply budget neut rality offsets for outliers and geographic

reclassifications to the standardized amount based on FY 2011 payment policies.

We do not remove the prior year’s budget ne utrality adjustments fo r reclassification and

recalibration of the DRG weights and for updated wage data because, in accordance with

sections 1886(d)(4)(C)(iii) and 1886(d)(3)(E) of the Act, estimated aggregate payments after

updates in the DRG relative weig hts and wage index should equa l estimated aggregate payments

prior to the changes. If we removed the prio r year’s adjustment, we would not satisfy these

conditions.CMS-1498-P 716

Budget neutrality is determined by comparing aggregate IPPS payments before and

after making changes that are required to be budget neutral (for example, changes to DRG

classifications, recalibration of the DRG relativ e weights, updates to the wage index, and

different geographic reclassificati ons). We include outlier payments in the simulations because

they may be affected by changes in these parameters.

Similar to last year, because IME Medicare Advantage payments are made to IPPS

hospitals under section 1886(d) of the Act, we believe these payments must be part of these

budget neutrality calculations. However, we note that it is not necessary to include Medicare

Advantage IME payments in the outlier threshold calculation or the outlier offset to the

standardized amount because the st atute requires that outlier payments be not less than 5 percent

nor more than 6 percent of to tal “operating DRG payments,” which does not include IME and

DSH payments. In order to account for th ese Medicare Advantage IME payments in

determining the budget neutrality adjustments for this proposed rule, we identified Medicare

Advantage claims from IPPS teaching hospitals in the MedPAR data. The GHO Paid indicator

with a value of "1" on the MedPAR file indicates that the claim was paid by a Medicare

Advantage plan (other than the IPPS IME payment specified at §412.105(g)). For these

Medicare Advantage claims from IPPS teaching hosp itals, we computed a transfer-adjusted CMI

by provider based on the FY 2009 MS-DRG GR OUPER Version 27.0 assignment and relative

weights. We also computed a transfer- adjusted CMI for these Medicare Advantage claims from

IPPS teaching hospitals based on the FY 2010 MS-DRG GROUPER Version 28.0 assignments

and relative weights. These transfer-adjusted CMIs (and corresponding case counts) were used

to calculate an IME teaching add-on paym ent in accordance with §412.105(g). The total

Medicare Advantage IME payment amount was then added to the total Federal payment amountCMS-1498-P 717

for each provider (where applicable) in orde r to account for the Medicare Advantage IME

payment in determining the budget neutrality adjustments. We note that we did not include

Medicare Advantage IME claims when estimating outlier payments for providers because

Medicare Advantage claims are not eligible for outlier payments under the IPPS.

a. Proposed Recalibration of DRG Weights and Updated Wage Inde x--Budget Neutrality

Adjustment

Section 1886(d)(4)(C)(iii) of the Act speci fies that, beginning in FY 1991, the annual

DRG reclassification and recalibration of the rela tive weights must be made in a manner that

ensures that aggregate payments to hospitals are no t affected. As discussed in section II. of the

preamble of this proposed rule, we normalized th e recalibrated DRG weights by an adjustment

factor so that the average case weight after recalibration is equal to the average case weight prior

to recalibration. However, equating the average case weight after recalibration to the average

case weight before recalibration does not necessari ly achieve budget neutrality with respect to

aggregate payments to hospitals because payments to hospitals are affected by factors other than

average case weight. Therefore, as we have done in past years, we are proposing to make a

budget neutrality adjustment to ensure that the requirement of section 1886(d)(4)(C)(iii) of the

Act is met.

Section 1886(d)(3)(E)(i) of the Act requires us to update the hospital wage index on an

annual basis beginning October 1, 1993. This provis ion 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. Section 1886(d)(3)(E)(i) of the Act requires that

we implement the wage index adjustment in a budget neutral manner. However, section

1886(d)(3)(E)(ii) of the Act sets the labor-related share at 62 percent for hospitals with a wageCMS-1498-P 718

index less than or equal to 1.0, a nd section 1886(d)(3)(E)(i) of the Ac t provides that the Secretary

shall calculate the budget neutra lity adjustment for the adjustme nts or updates made under that

provision as if section 1886(d)(3)(E)(ii) of the Ac t had not been enacted. In other words, this

section of the statute requires that we imple ment the updates to the wage index in a budget

neutral manner, but that our budget neutrality adjustment shoul d not take into account the

requirement that we set the labor-related share fo r hospitals with indices less than or equal to 1.0

at the more advantageous level of 62 percent. Therefore, for purposes of this budget neutrality

adjustment, section 1886(d)(3)(E)(i) of the Act prohi bits us from taking into account the fact that

hospitals with a wage index less than or equal to 1.0 are paid using a labor-related share of 62

percent. Consistent with current policy, for FY 2011, we are proposing to adjust 100 percent of

the wage index factor for occupational mix. We describe the proposed occupational mix

adjustment in section III.D. of th e preamble of this proposed rule.

For FY 2011, to comply with the requirement that DRG reclassification and recalibration

of the relative weights be budget neutral for the Puerto Rico standardized amount and the

hospital-specific rates, we used FY 2009 discharg e data to simulate payments and compared

aggregate payments using the FY 2010 labor-related share percentages, the FY 2010 relative

weights, and the FY 2010 pre-reclassified wage data to aggregate payments using the FY 2010

labor-related share percentages, the proposed FY 2011 relative weights, and the FY 2010 prereclassified wage data. Based on this comp arison, we computed a proposed budget neutrality

adjustment factor equal to 0.996963. As discusse d in section IV. of this Addendum, we would

also apply the proposed DRG r eclassification and recalibrati on budget neutrality factor of

0.996856 to the hospital-specific rates that are to be effective for cost reporting periods

beginning on or after October 1, 2010.CMS-1498-P 719

In order to meet the statutory requirements that we do not take into account the laborrelated share of 62 percent when computing wage index budget, it was necessary to use a

three-step process to comply with the requireme nts that DRG reclassification and recalibration of

the relative weights and the updated wage inde x and labor-related share have no effect on

aggregate payments for IPPS hospitals. We first determined a proposed DRG reclassification

and recalibration budget neutralit y factor of 0.996856 by using the same methodology described

above to determine the proposed DRG reclassifi cation and recalibration budget neutrality factor

for the Puerto Rico standardized amount and hos pital-specific rates. Secondly, to compute a

budget neutrality factor for wage index and la bor-related share changes, we used FY 2009

discharge data to simulate pa yments and compared aggregate payments using proposed FY 2011

relative weights and FY 2010 pre-reclassified wage indices, and applied the FY 2010 laborrelated share of 68.8 percent to all hospitals (rega rdless of whether the hos pital’s wage index was

above or below 1.0) to aggregate payments us ing the proposed FY 2011 relative weights and the

proposed FY 2011 pre-reclassified wage indices, and applied the labor-related share for FY 2011

of 68.8 percent to all hospitals (regardless of wh ether the hospital’s wage index was above or

below 1.0). In addition, we a pplied the proposed DRG reclassi fication and recalibration budget

neutrality factor (derived in the first step) to the rates that were used to simulate payments for

this comparison of aggregate payments from FY 2010 to FY 2011. By applying this

methodology, we determined a proposed budget ne utrality factor of 1.000107 for changes to the

wage index. Finally, we multiplied the propos ed DRG reclassification and recalibration budget

neutrality factor of 0.996856 (derived in the first step) by the proposed budget neutrality factor of

1.000107 for changes to the wage index (derived in the second step) to determine the proposedCMS-1498-P 720

DRG reclassification and recalibration and upda ted wage index budget neutrality factor of

0.996963.

b. Reclassified Hospitals—Proposed Budget Neutrality Adjustment

Section 1886(d)(8)(B) of the Act provides that , effective with discharges occurring on or

after October 1, 1988, certain rural hospitals are deemed urban. In addition, section 1886(d)(10)

of the Act provides for the reclassification of hos pitals based on determinations by the MGCRB.

Under section 1886(d)(10) of the Ac t, a hospital may be reclassified for purposes of the wage

index.

Under section 1886(d)(8)(D) of the Act, the Secretary is required to adjust the

standardized amount to ensure that aggregate payments under the IPPS after implementation of

the provisions of sections 1886(d)(8)(B) and (C ) and 1886(d)(10) of the Act are equal to the

aggregate prospective payments that would have been made absent these provisions. We note

that the wage index adjustments provided under section 1886(d)(13) of the Act are not budget

neutral. Section 1886(d)(13)(H) of the Act pr ovides that any increase in a wage index under

section 1886(d)(13) shall not be ta ken into account "in applying any budget neutrality adjustment

with respect to such index" under section 1886(d) (8)(D) of the Act. To calculate the proposed

budget neutrality factor for FY 2011, we used FY 2009 discharge data to s imulate payments and

compared total IPPS payments with proposed FY 2011 relative weights, FY 2011 labor share

percentages, and proposed FY 2011 wage data pr ior to any reclassifications under sections

1886(d)(8)(B) and (C) and 1886(d)(10) of the Ac t to total IPPS payments with proposed FY

2011 relative weights, FY 2011 labor share percen tages, and proposed FY 2011 wage data after

such reclassifications. Based on these simulati ons, we calculated a proposed adjustment factorCMS-1498-P 721

of 0.991756 to ensure that the effects of these provisi ons are budget neutral, consistent with the

statute.

The proposed FY 2011 budget neutrality adjustme nt factor is applied to the standardized

amount after removing the effects of the FY 2010 budget neutrality adjustment factor. We note

that the proposed FY 2011 budget neutrality adju stment reflects proposed FY 2011 wage index

reclassifications approved by the MGCRB or the Administrator. Furthermore, for this proposed

rule, we note that the proposed FY 2011 wage in dex reclassifications approved by the MGCRB

or the Administrator are in the absence of the pr ovisions of Pub. L. 111-148, as amended by Pub.

L. 111-152.

c. Proposed Rural Floor and Imputed Floor Budget Neutrality Adjustment

CMS makes an adjustment to the wage index to ensure that aggregate payments after

implementation of the rural fl oor under section 4410 of the BBA (Pub. L. 105-33) and the

imputed floor under §412.64(h)(4) of the regulations are made in a manner that ensures that

aggregate payments to hospitals are not affected. As discussed in section III.B. of the preamble

of the FY 2009 IPPS final rule (73 FR 48570 through 48574), we adopted as final State-level

budget neutrality for the rural and imputed floor s, effective beginning with the FY 2009 wage

index. In response to the public’s concerns a nd taking into account the potentially significant

payment cuts that could occur to hospitals in some States if we implemented this change with no

transition, we decided to phase in, over a 3-ye ar period, the transition from the national rural

floor budget neutrality adjustment on the wage index to the State-level rural floor budget

neutrality adjustment on the wage index. In FY 2009, hospitals receive d a blended wage index

that was comprised of 20 percent of the wage i ndex adjusted by applying the State-level rural

and imputed floor budget neutrality adjustment a nd 80 percent of the wage index adjusted byCMS-1498-P 722

applying the national budget neutrality adjustment. For FY 2010, the blended wage index was

determined by adding 50 percent of the wage index adjusted by a pplying the State-level rural and

imputed floor budget neutrality ad justment and 50 percent of the wage index adjusted by

applying the national budget neutrality adjustment . In FY 2011 (in the absence of provisions of

Pub. L. 111-148, as amended by Pub. L. 111-152), the proposed adjustment will be completely

transitioned to the State-level methodology, such that the wage index will be determined by

applying 100 percent of the State-level budget neut rality adjustment. As stated earlier, we note

that the rural floor budget neutrality adjustment is applied to the wage index and not the

standardized amount. However, because the 100 percent State-level rural and imputed floor

budget neutrality adjustment is used in calcu lating the proposed FY 2011 outlier threshold (as

discussed below), we are explaining our calcula tion of the proposed rura l floor budget neutrality

adjustments (in this section) below.

In order to compute a budget neutral wage index that is 100 percent of the wage index

adjusted by the State-level rural and imputed floor budget neutrality adjustment, we used FY

2009 discharge data with proposed FY 2011 rela tive weights, proposed FY 2011 labor share

percentages, and proposed FY 2011 post reclassified wage indices to simulate IPPS payments.

To determine each State's rural or imputed floor budget neutrality adjustment, we compared each

State's total simulated payments with and wit hout the rural or imputed floor applied. These

State-level rural and imputed fl oor budget neutrality factors were then applied to the wage

indices to produce a State-level rural and imput ed floor budget neutral wa ge index, which was

used in determining the FY 2011 wage indices.CMS-1498-P 723

d. Proposed Case-Mix Budget Neutrality Adjustment

(1) Adjustment to the FY 2011 IPPS Standardized Amount

As stated earlier, beginning in FY 2008, we adopted the MS–DRG patient classification

system for the IPPS to better recognize patients’ severity of illness in Medicare payment rates.

In the FY 2008 IPPS final rule with comment period (73 FR 47175 through 47186), we indicated

that we believe the adoption of the MS-DRGs had the potential to l ead to increases in aggregate

payments without a corresponding increase in ac tual patient severity of illness due to the

incentives for changes in documentation and coding . In that final rule, using the Secretary’s

authority under section 1886(d)(3)(A)(vi) of the Act to maintain budget neutrality by adjusting

the national standardized amounts to eliminate the effect of change s in documentation and

coding that do not reflect real change in case -mix, we established pros pective documentation and

coding adjustments of -1.2 percent for FY 2008, -1.8 percent for FY 2009, and -1.8 percent for

FY 2010 (for a total adjustment of -4.8 perc ent). On September 29, 2007, Pub. L. 110–90 was

enacted. Section 7 of Pub. L. 110-90 included a provision that reduces the documentation and

coding adjustment for the MS–DRG system that we adopted in the FY 2008 IPPS final rule with

comment period to -0.6 percent for FY 2008 and - 0.9 percent for FY 2009. To comply with the

provision of section 7(a) of Pub. L. 110-90, in a final rule that appeared in the Federal Register

on November 27, 2007 (72 FR 66886), we changed the IPPS documentation and coding

adjustment for FY 2008 to -0.6 percent, and re vised the FY 2008 national standardized amounts

(as well as other payment factors and threshol ds) accordingly, with these revisions being

effective as of October 1, 2007. For FY 2009, section 7(a) of Pub. L. 110-90 required a

documentation and coding adjustme nt of -0.9 percent instead of the -1.8 percent adjustment

specified in the FY 2008 IPPS final rule with comment period. As required by statute, weCMS-1498-P 724

applied a documentation and coding adjustment of -0.9 percent to the FY 2009 IPPS national

standardized amounts. The documentation and co ding adjustments established in the FY 2008

IPPS final rule with comment period are cumulative. As a result, the -0.9 percent documentation

and coding adjustment in FY 2009 was in add ition to the -0.6 percent adjustment in FY 2008,

yielding a combined effect of -1.5 percent.

In the FY 2010 IPPS proposed and final rules, we discussed our analysis of FY 2008

claims data which showed an increase in case-mix of 2.5 percent due to changes in

documentation and coding that do not reflect real changes in case-mix for discharges occurring

during FY 2008. For FY 2010, we proposed to reduce the average standardized amounts under

section 1886(d) of the Act in FY 2010 by -1.9 perc ent, which represents the difference between

changes in documentation and coding that do not re flect real changes in case-mix for discharges

occurring during FY 2008 and the pros pective adjustment applied under Pub. L. 110-90. As

discussed in section II.D. of the preamble of the FY 2010 IPPS final rule, after consideration of

the public comments we received on our analysis and proposals presented in the proposed rule,

we decided to postpone adopting documentation and coding adjustments as authorized under

section 7(a) of Pub. L. 110-90 and section 1886(d)(3)(A)(vi) of the Act until a full analysis of

FY 2009 case-mix changes could be completed. Accordingly, in the FY 2010 IPPS final rule,

for FY 2010, we did not apply any additional doc umentation and coding adjustments to the

average standardized amounts under section 1886(d) of the Act.

As indicated in section II.D. in the preamble to this proposed rule, the change due to

documentation and coding that did not reflect real changes in case mix for discharges occurring

during FY 2008 and FY 2009 exceeded the -0.6 and -0.9 percent prospec tive documentation and

coding adjustment applied under section 7(a) of Pub. L. 110-90 for those 2 years respectively byCMS-1498-P 725

1.9 percentage points in FY 2008 and 3.9 percentage points in FY 2009. In total, this change

exceeded the cumulative prospective adjustment s by 5.8 percentage points. Our actuaries

currently estimate that this 5.8 percentage point increase resulte d in an increase in aggregate

payments of approximately $6.9 b illion. Therefore, an aggregate adjustment of -5.8 percent in

FYs 2011 and 2012, subject to actuarial adjustment to reflect accumulated interest, is necessary

in order to meet the requirements of secti on 7(b)(1)(B) of Pub. L. 110-90 to adjust the

standardized amounts for discharges occurring in FYs 2010, 2011, and/or 2012 to offset the

estimated amount of the cumulative increase in aggregate payments (including interest) in FYs

2008 and 2009. We refer the reader to section II.D . of the preamble to this proposed rule for

more discussion.

It is often our practice to phase in rate ad justments over more than one year in order to

moderate the effect on rates in any one year. Th erefore, we are proposing to make an adjustment

to the standardized amount of -2.9 percent, representing half of the aggregate adjustment

required under section 7(b)(1)(B) of Pub. L. 110 -90, for FY 2011. As we have previously noted,

unlike the prospective adjustment to the standa rdized amounts under section 7(b)(1)(A) of Pub.

L. 110-90 described earlier, the recoupment or repayment adjustment to the standardized

amounts under section 7(b)(1)(B) of Pub. L. 110-90 is not cumulative, but would be removed for

subsequent fiscal years once we ha ve offset the increase in aggregate payments for discharges for

FY 2008 expenditures and FY 2009 expenditures. We note that we are not making a formal

proposal for the further implemen tation of section 7(b)(1)(B) of Pub. L. 110-90 in FY 2012 in

this proposed rule.CMS-1498-P 726

(2) Proposed Adjustment to the FY 2011 Ho spital-Specific Rates for SCHs and MDHs

As discussed in section II.D. of the preamb le of this proposed rule, because hospitals

(SCHs and MDHs) paid based in whole or in pa rt on the hospital-specific rate use the same

MS-DRG system as other hospita ls, we believe they have the potential to realize increased

payments from documentation and coding changes th at do not reflect real increases in patients'

severity of illness. Under sec tion 1886(d)(3)(A)(vi) of the Act, Congress stipulated that hospitals

paid based on the standardized amount should not receive additional payments based on the

effect of documentation and coding changes th at do not reflect real changes in case-mix.

Similarly, we believe that hospita ls paid based on the hospital-sp ecific rate should not have the

potential to realize increased payments due to documentation and coding changes that do not

reflect real increases in patients' severity of illness. While we continue to believe that section

1886(d)(3)(A)(vi) of the Act does not provide explicit authority for application of the

documentation and coding adjustment to the hospita l-specific rates, we believe that we have the

authority to apply the documentation and coding adjustment to the hospital-specific rates using

our special exceptions and adju stment authority under section 1886(d)(5)(I)(i) of the Act.

As discussed in the FY 2010 IPPS/RY 2010 LTCH PPS proposed rule, based on our

analysis of FY 2008 claims data, we found that , independently for both SCHs and MDHs, the

change due to documentation and coding that did not reflect real changes in case-mix for

discharges occurring during FY 2008 slightly ex ceeded the 2.5 percent result discussed earlier,

but did not significantly differ from that result.

Therefore, in FY 2010, we proposed to use our authority under section 1886(d)(5)(I)(i) of

the Act to prospectively adjust the hospital-sp ecific rates by -2.5 percent in FY 2011 for our

estimated documentation and coding effect in FY 2008 that does not reflect real changes in case-CMS-1498-P 727

mix. We also noted that, unlike the national st andardized rates, the FY 2010 hospital-specific

rates were not previously reduced in order to account for anticipated changes in documentation

and coding that do not reflect real changes in case-mix re sulting from the adoption of the

MS-DRGs.

Consistent with our appro ach for determining the national average standardized amounts

discussed earlier, after consideration of the pub lic comments we received on our analysis and

proposals presented in the FY 2010 IPPS proposed rule, for FY 2010, we also postponed

adoption of a documentation and coding adjustment to the hospital-specific rate until a full

analysis of FY 2009 case-mix changes could be completed. Accordingly, for FY 2010, we did

not apply a documentation and coding adju stment to the hospital-specific rates.

As we discuss in section II.D. of the pream ble of this proposed rule, because SCHs and

MDHs use the same DRG system as all other hos pitals, we believe they have the potential to

realize increased payments from documentation a nd coding changes that do not reflect real

increases in patients' severity of illness. Theref ore, we believe they shoul d be equally subject to

a prospective budget neutrality adjustment that we are applying for adoption of the MS-DRGs to

all other hospitals. While the findings of the e ffects documentation and coding are different for

SCHs/MDHs and other IPPS hospitals, we continue to believe that the documentation and coding

adjustments for all subsection (d) hospitals should be the same. We continue to believe that this

is the appropriate policy so as to neither advantage nor disadvant age different types of providers.

As we have also discussed in section II.D of the preamble to this proposed rule, our best

estimate, based on the most recentl y available data, is that a cumulative adjustment of -5.4

percent is required to eliminate the full effect of the documentation and coding changes on future

payments. Unlike the case of standardized amounts paid to IPPS hospitals, we have not madeCMS-1498-P 728

any previous adjustments to the hospital specifi c rates paid to SCHs and MDHs to account for

documentation and coding changes. Therefore, th e entire -5.4 percent adjustment remains to be

implemented. Therefore, in order to maintain co nsistency as far as possible with the adjustments

applied to IPPS hospitals, we are proposing an adjustment of -2.9 percent in FY 2011 to the

hospital-specific rates paid to SCHs and MDHs. We believe that this proposed adjustment is the

most appropriate means to take into full account the effect of documentation and coding changes

on payments, and to maintain equity between hosp itals paid on the basis of different prospective

rates.

(3) Proposed Adjustment to the FY 2011 Puerto Rico Standardized Amount

As stated in section II.D. of the preamble of this proposed rule, we believe that we have

the authority to apply the docum entation and coding adjustment to the Puerto Rico-specific

standardized amount using our special excepti ons and adjustment authority under section

1886(d)(5)(I)(i) of the Act. Similar to SCHs a nd MDHs that are paid based on the hospitalspecific rate, we believe that Puerto Rico hosp itals that are paid based on the Puerto Ricospecific standardized amount shoul d not have the potential to rea lize increased payments due to

documentation and coding changes that do not refl ect real increases in patients' severity of

illness. In the FY 2010 IPPS proposed rule, we discussed our analysis of FY 2008 claims data

for Puerto Rico hospitals, which showed that, for Puerto Rico hospitals, the increase in payments

for discharges occurring during FY 2008 due to do cumentation and coding changes that did not

reflect real changes in case-mix for discharg es occurring during FY 2008 was approximately 1.1

percent. We noted that, unlike the national standa rdized rates, the FY 2009 Puerto Rico-specific

standardized amount was not previously reduced in order to account for anticipated changes in

documentation and coding that do not reflect real changes in case-mix resulting from theCMS-1498-P 729

adoption of the MS-DRGs. Therefore, for FY 2010, we proposed to use our authority under

section 1886(d)(5)(I)(i) of the Act to adjust th e Puerto Rico-specific standardized amount by

-1.1 percent in FY 2010 to account for the FY 2008 documentation and coding changes that are

not due to changes in real case-mix and to leave that adjustment in place for subsequent fiscal

years.

Consistent with our appro ach for determining the national average standardized amounts

and hospital-specific rates of SCHs and MDHs di scussed above, after cons ideration of the public

comments we received on our analysis and proposals presented in the FY 2010 IPPS proposed

rule, for FY 2010, we also postponed adoption of a documentation and coding adjustment to the

Puerto Rico-specific rates until a full analysis of FY 2009 case-mix changes can be completed.

Accordingly, in the FY 2010 IPPS final rule, for FY 2010, we did not apply a documentation and

coding adjustment to the Puerto Rico-specific rates.

As we have noted above, similar to SCHs and MDHs, hospitals in Puerto Rico use the

same DRG system as all other hospitals and we believe they have the potential to realize

increased payments from documentation and coding changes that do not reflect real increases in

patients' severity of illness. Therefore, we believe they should be equally subject to a

prospective budget neutrality adjustment that we are applying for adoption of the MS-DRGs to

all other hospitals.

As we have discussed in sec tion II.D. of the preamble of this proposed rule, our best

estimate, based on the most recently available data, is that a cumulative adjustment of

-- 2.4

percent is required to eliminate the full effect of the documentation and coding changes on future

payments from the Puerto Rico-specific rate. Un like the case of standardized amounts paid to

IPPS hospitals, we have not made any previous adjustments to the hospital-specific rates paid toCMS-1498-P 730

Puerto Rico hospitals to account for documentatio n and coding changes. Therefore, the entire

-2.4 percent adjustment remains to be implemented. In order to maintain consistency as far as

possible with the adjustments applied to IPPS hospitals but to take into consideration the fact that

the cumulative impact was smaller in Puerto Ri co hospitals, we are therefore proposing an

adjustment of -2.4 percent in FY 2011 to Puerto Ri co-specific rate that ac counts for 25 percent of

payments to Puerto Rico hospitals, with th e remaining 75 percent based on the national

standardized amount, which are proposing to adju st as described above . Consequently, the

overall reduction to rate s for Puerto Rico hospitals to acc ount for the documentation and coding

changes will be slightly less than the reduction for IPPS hospitals based on 100 percent of the

national standardized amount. We note that this proposed -2.4 percent prospective adjustment

would eliminate the full effect of the documentation and coding changes on future payments

from the Puerto Rico-specific rate. We believe that this proposed adjustment is the most

appropriate means to take into full account the effect of documentation and coding changes on

payments, and to maintain equity between hospita ls paid on the basis of different prospective

rates.

e. Proposed Outlier Payments

Section 1886(d)(5)(A) of the Act provides for payments in addition to the basic

prospective payments for "outlier" cases involving extraordinarily high costs. To qualify for

outlier payments, a case must have costs greater than the sum of the prospective payment rate for

the DRG, any IME and DSH paym ents, any new technology add-on payments, and the "outlier

threshold" or "fixed-loss" amount (a dollar am ount by which the costs of a case must exceed

payments in order to qualify for an outlier payment). We refer to the sum of the prospective

payment rate for the DRG, any IME and DSH payments, any new technology add-on payments,CMS-1498-P 731

and the outlier threshold as the outlier "fixed-loss cost threshold." To determine whether the

costs of a case exceed the fixed-loss cost thre shold, a hospital’s CCR is applied to the total

covered charges for the case to convert the charges to estimated co sts. Payments for eligible

cases are then made based on a marginal cost fact or, which is a percentage of the estimated costs

above the fixed-loss cost threshold. The margin al cost factor for FY 2011 is 80 percent, the

same marginal cost factor we ha ve used since FY 1995 (59 FR 45367).

In accordance with section 1886(d)(5)(A)(iv) of the Act, outlier payments for any year

are projected to be not less than 5 percent nor more than 6 percent of total operating DRG

payments plus outlier payments. We note that the statute requires outlier payments to be not less

than 5 percent nor more than 6 percent of total “operating DRG payments” (which does not

include IME and DSH payments) plus outlier payments. When setting the outlier threshold, we

compute the 5.1 percent target by dividing th e total operating outlier payments by the total

operating DRG payments plus outlier payments. We do not include any other payments such as

IME and DSH within the outlier target amount. Therefore, it is not necessary to include

Medicare Advantage IME payments in the outlie r threshold calculation. Section 1886(d)(3)(B)

of the Act requires the Secretary to reduce the average standardized amount by a factor to

account for the estimated proportion of total DRG payments made to outlier cases. Similarly,

section 1886(d)(9)(B)(iv) of the Act requires the Secretary to reduce the average standardized

amount applicable to hospitals located in Puerto Rico to account for the estimated proportion of

total DRG payments made to outlier cases. Mo re information on outlier payments may be found

on the CMS Web site at http://www.cms.hhs.gov/AcuteInpa tientPPS/04_outlier.asp#TopOfPageCMS-1498-P 732

(1) Proposed FY 2011 Outlier Fixed-Loss Cost Threshold

For FY 2011, we are proposing to continue to use the same methodology used for

FY 2009 (73 FR 48763 through 48766) to calculate the outlier threshold. Similar to the

methodology used in the FY 2009 IPPS final rule, for FY 2011, we are proposing to apply an

adjustment factor to the CCRs to account for cost and charge inflation (as explained below). As

we have done in the past, to calculate the proposed FY 2011 outlier threshold, we simulated

payments by applying the proposed FY 2011 ra tes and policies using cases from the FY 2009

MedPAR files. Therefore, in order to de termine the proposed FY 2011 outlier threshold, we

inflated the charges on the MedPAR claims by 2 years, from FY 2009 to FY 2011.

We are proposing to continue to use a refi ned methodology that takes into account the

lower inflation in hospital charges that are occurring as a result of the outlier final rule

(68 FR 34494), which changed our methodology for determin ing outlier payments by

implementing the use of more current CCRs. Our refined methodology uses more recent data

that reflect the rate-of-change in hos pital charges under the new outlier policy.

Using the most recent data available, we calculated the 1-year average annualized

rate-of-change in charges-per-case from the last quarter of FY 2008 in combination with the first

quarter of FY 2008 (July 1, 2008 through December 31, 2008) to the last quarter of FY 2009 in

combination with the first quarter of FY 2010 (July 1, 2009 through December 31, 2009). This

rate of change was 5.16 percent (1.0516) or 10.59 percent (1.1059) over 2 years.

As we have done in the past, we establis hed the proposed FY 2011 outlier threshold using

hospital CCRs from the December 2009 update to th e Provider-Specific F ile (PSF)--the most

recent available data at the time of this proposed rule. This file includes CCRs that reflectCMS-1498-P 733

implementation of the changes to the policy fo r determining the applicable CCRs that became

effective August 8, 2003 (68 FR 34494).

As discussed in the FY 2007 IPPS final rule (71 FR 48150), we worked with the Office

of Actuary to derive the methodology described below to develop the CCR adjustment factor

. For FY 2011, we are proposing to continue to use the same methodology to calculate the CCR

adjustment by using the FY 2009 operating cost per discharge increase in combination with the

actual FY 2009 operating market basket percentage increase determined by IHS Global Insight,

Inc., as well as the charge inflation factor de scribed above to estimate the adjustment to the

CCRs. (We note that the FY 2009 actual (otherwise referred to as "final") operating market

basket percentage increase reflects histori cal data, whereas the published FY 2009 operating

market basket update factor wa s based on IHS Global Insight, Inc.'s 2008 second quarter forecast

with historical data through the first quarter of 2008. We also note that while the FY 2009

published operating market basket update was based on the FY 2002-based IPPS market basket,

the actual or “final” market basket percentage increase is based on the FY 2006-based IPPS

market basket. Similarly, the FY 2009 published capital market basket upa te factor was based

on the FY 2002-based capital market basket and th e actual or “final” capital market basket

percentage increase is based on the FY 2006-based capital market basket.) By using the

operating market basket percentage increase and the increase in the average cost per discharge

from hospital cost reports, we are using two diff erent measures of cost inflation. For FY 2011,

we determined the adjustment by taking the percentage increase in the operating costs per

discharge from FY 2007 to FY 2008 (1.0513) from th e cost report and dividing it by the final

operating market basket percentage increase from FY 2008 (1.04). This operation removes the

measure of pure price increase (the market basket) from the percentage increase in operating costCMS-1498-P 734

per discharge, leaving the nonprice factors in the cost increase (for example, quantity and

changes in the mix of goods and services). We repeated this calculation for 2 prior years to

determine the 3-year average of the rate of adjusted change in costs between the operating

market basket percentage increase and the increase in cost per case from the cost report (the FY

2005 to FY 2006 percentage increase of operating costs per discharge of 1.0577 divided by the

FY 2006 final operating market basket perc entage increase of 1.04, the FY 2006 to FY 2007

percentage increase of operating costs pe r discharge of 1.0466 divided by FY 2007 final

operating market basket percentage increas e of 1.0360). For FY 2011, we averaged the

differentials calculated for FY 2006, FY 2007, and FY 2008, which resulted in a mean ratio of

1.0127. We multiplied the 3-year average of 1.0127 by the FY 2009 final operating market

basket percentage increase of 1.027, which resulte d in an operating cost inflation factor of

4.00 percent or 1.0400. We then divided the operating cost inflation factor by the 1-year average

change in charges (1.0515) and applied an adjustment factor of 0.989016 to the operating CCRs

from the PSF (calculation performed on unrounded numbers).

As stated in the FY 2009 IPPS final rule (73 FR 48763), we continue to believe it is

appropriate to apply only a 1-year adjustment factor to the CCRs. On average, it takes

approximately 9 months for a fiscal intermediary or MAC to tentatively settle a cost report from

the fiscal year end of a hospital's cost reporting period. The average “age” of hospitals' CCRs

from the time the fiscal intermediary or the MAC inserts the CCR in the PSF until the beginning

of FY 2009 is approximately 1 year. Therefore, as stated above, we believe a 1-year adjustment

factor to the CCRs is appropriate.

We used the same methodology for the capital CCRs and determined the adjustment by

taking the percentage increase in the capital costs per discharge from FY 2007 to FY 2008CMS-1498-P 735

(1.0800) from the cost report and dividing it by the final capital market basket percentage

increase from FY 2008 (1.015). We repeated this calculation for 2 prior years to determine the

3-year average of the rate of adjusted change in costs between the capital market basket

percentage increase and the increase in cost pe r case from the cost report (the FY 2005 to FY

2006 percentage increase of capital costs per di scharge of 1.0464 divided by the FY 2006 final

capital market basket percentage increase of 1.011, the FY 2006 to FY 2007 percentage increase

of capital costs per discharge of 1.0512 divided by the FY 2007 final capital market basket

percentage increase of 1.012). For FY 2011, we averaged the differentials calculated for

FY 2006, FY 2007, and FY 2008, which resulted in a mean ratio of 1.0459. We multiplied the

3-year average of 1.0459 by the FY 2009 final cap ital market basket per centage increase of

1.014, which resulted in a capital cost inflation factor of 6.06 percent or 1.0606. We then

divided the capital cost inflation factor by th e 1-year average change in charges (1.0516) and

applied an adjustment factor of 1.008534 to the capital CCRs from the PSF (calculation

performed on unrounded numbers). We are proposing to use the same charge inflation factor for

the capital CCRs that was used for the operating CCRs. The charge inflation factor is based on

the overall billed charges. Therefore, we believe it is appropriate to apply the charge factor to

both the operating and capital CCRs.

As stated above, for FY 2011, we applied th e proposed FY 2011 rates and policies using

cases from the FY 2009 MedPAR files in calcula ting the proposed outlier threshold. In FY

2010, for purposes of estimating the proposed ou tlier threshold, we took into account the

remaining projected case-mix growth when calculating the outlier threshold that results in outlier

payments being 5.1 percent of total payments for FY 2010. As explained in the FY 2010

IPPS/RY 2010 LTCH PPS final rule (74 FR 44008), for the FY 2010 analysis, we inflated theCMS-1498-P 736

FY 2008 claims data by an additi onal 1.6 percent for the additional case-mix growth projected to

have occurred since FY 2008. If we did not take into account the remaining 1.6 percent

projected case-mix growth, our estimate of total FY 2010 payments would have been too low,

and, as a result, the FY 2010 final outlier thre shold would have been too high, such that

estimated outlier payments would be less than our projected 5.1 perc ent of total payments. For

this proposed rule, we are using the FY 2009 cl aims data to calcula te the FY 2011 proposed

outlier threshold. Our estimate of the cumulative effect of changes in documentation and coding

due to the adoption of the MS-DRGs through FY 2009 is 5.4 percent, which is already included

within the claims data (FY 2009 MedPAR files) used to calcu late the proposed FY 2011 outlier

threshold. Furthermore, we currently estimate that there will be no continued changes in

documentation and coding in FYs 2010 and 2011. Therefore, the cumulative effect of

documentation and coding that has occurred is already reflected within the FY 2009 MedPAR

claims data, and we do not belie ve there is any need to inflate FY 2009 claims data for any

additional case-mix growth projected to have occurred since FY 2009.

Using this methodology, we are proposing an outlier fixed-loss cost threshold for

FY 2011 equal to the prospective payment rate for the DRG, plus any IME and DSH payments,

and any add-on payments for new technology, plus $23,970.

As we did in establishing the FY 2009 outlie r threshold (73 FR 57891), in our projection

of FY 2011 outlier payments, we are not proposing to make any adjustments for the possibility

that hospitals' CCRs and outlier payments may be reconciled upon cost report settlement. We

continue to believe that , due to the policy implemented in the June 9, 2003 outlier final rule (68

FR 34494), CCRs will no longer fluctuate significantly and, therefore, few hospitals will actually

have these ratios reconciled upon co st report settlement. In additi on, it is difficult to predict theCMS-1498-P 737

specific hospitals that will have CCRs and outlier payments reconciled in any given year. We

also noted that reconciliation occurs because hospitals' actual CCRs for the cost reporting period

are different than the interim CCRs used to calculate outlier payments when a bill is processed.

Our simulations assume that CCRs accurately measure hospital costs based on information

available to us at the time we set the outlier threshold. For these reasons, we are proposing not to

make any assumptions about th e effects of reconc iliation on the outlier threshold calculation.

(2) Other Proposed Changes Concerning Outliers

As stated in the FY 1994 IPPS final rule (58 FR 46348), we establish an outlier threshold

that is applicable to both hospital inpatient operating costs and hospital inpatient capital-related

costs. When we modeled the combined opera ting and capital outlier payments, we found that

using a common threshold resulted in a lower percentage of outlier payments for capital-related

costs than for operating costs. We project that the thresholds for FY 2011 will result in outlier

payments that will equal 5.1 percent of opera ting DRG payments and 5.8 percent of capital

payments based on the Federal rate.

In accordance with section 1886(d)(3)(B) of the Act, we are proposing to reduce the

FY 2011 standardized amount by the same percenta ge to account for the projected proportion of

payments paid as outliers.

The outlier adjustment factors that would be applied to the standardized amount for the

proposed FY 2011 outlier threshold are as follows:

Operating Standardized Amounts Capital Federal Rate National 0.948999 0.942415 Puerto Rico 0.951686 0.924977CMS-1498-P 738

We are proposing to apply the outlier adjus tment factors to the proposed FY 2011 rates

after removing the effects of the FY 2010 outlier adjustment factors on the standardized amount.

To determine whether a case qualifies for outlier payments, we apply hospital-specific

CCRs to the total covered charges for the case. Estimated operating and capital costs for the case

are calculated separately by applying separate operating and capital CCRs. These costs are then

combined and compared with the outlier fixed-loss cost threshold.

Under our current policy at §412.84, for hospitals for which the fiscal intermediary or

MAC computes operating CCRs greater than 1.176 or capital CCRs greater than 0.154, or

hospitals for whom the fiscal intermediary or MAC is unable to calculate a CCR (as described at

§ 412.84(i)(3) of our regulations), we still use statewide average CCRs to determine whether a

hospital qualifies for outlier payments. 15 Table 8A in this Addendum contains the proposed

statewide average operating CCRs for urban hospitals and for rural hospitals for which the fiscal

intermediary or MAC is unable to compute a hospital-specific CCR within the above range.

Effective for discharges occurring on or afte r October 1, 2010, these statewide average ratios

would replace the ratios published in the IPPS final rule for FY 2010 (74 FR 44159). Table 8B

in this Addendum contains the proposed comparable statewide average capital CCRs. Again, the

proposed CCRs in Tables 8A and 8B would be used during FY 2011 when hospital-specific

CCRs based on the latest settled cost report are either not available or are outside the range noted

above. Table 8C contains the proposed statewide average total CCRs used under the LTCH PPS

as discussed in section V. of this Addendum.

We finally note that we published a manua l update (Change Request 3966) to our outlier

policy on October 12, 2005, which updated Chapte r 3, Section 20.1.2 of the Medicare Claims

Processing Manual. The manual update covered an array of topics, including CCRs,

15 These figures represent 3.0 standard deviations from the mean of the log distribution of CCRs for all hospitals.CMS-1498-P 739

reconciliation, and the time value of money. We encourage hospitals that are assigned the

statewide average operating and/or capital CCRs to work with their fiscal intermediary or MAC

on a possible alternative operating and/or capital CCR as explained in Change Request 3966.

Use of an alternative CCR devel oped by the hospital in conjunction with the fiscal intermediary

or MAC can avoid possible overpayments or underpayments at cost report settlement, thus

ensuring better accuracy when making outlier payments and negating the need for outlier

reconciliation. We also note that a hospital may request an alternative operating or capital CCR

ratio at any time as long as the guidelines of Change Request 3966 are followed. To download

and view the manual instructions on outlier and CCRs, we refer readers to CMS Web site:

http://www.cms.hhs.gov/manua ls/downloads/clm104c03.pdf.

(3) FY 2009 and FY 2010 Outlier Payments

In the FY 2010 IPPS final rule (74 FR 44012), we stated that, based on available data, we

estimated that actual FY 2009 outlier payments w ould be approximately 5.4 percent of actual

total DRG payments. This estimate was com puted based on simulations using the FY 2008

MedPAR file (discharge data for FY 2008 cla ims). That is, the estimate of actual outlier

payments did not reflect actual FY 2009 claims, bu t instead reflected the application of FY 2009

rates and policies to av ailable FY 2008 claims.

Our current estimate, using available FY 2009 cl aims data, is that actual outlier payments

for FY 2009 were approximately 5.3 percent of actual total DRG payments. Thus, the data

indicate that, for FY 2009, the percentage of actual outlier payments relative to actual total

payments is higher than we projected before FY 2009. Consistent with the policy and statutory

interpretation we have maintained since the inception of the IPPS, we do not plan to makeCMS-1498-P 740

retroactive adjustments to outlier payments to en sure that total outlier payments for FY 2009 are

equal to 5.1 percent of total DRG payments.

We currently estimate that actual outlier payments for FY 2010 will be approximately 4.7

percent of actual total DRG payments, approximately 0.4 percentage points lower than the

5.1 percent we projected in se tting the outlier policies for FY 2010. This estimate is based on

simulations using the FY 2009 MedPAR file (dis charge data for FY 2009 claims). We used

these data to calculate an estimate of the act ual outlier percentage for FY 2010 by applying

FY 2010 rates and policies, including an ou tlier threshold of $23,140 to available FY 2009

claims.

5. Proposed FY 2011 Standardized Amount

The proposed adjusted standardized am ount is divided into labor-related and

nonlabor-related portions. Tabl es 1A and 1B of this A ddendum contain the national

standardized amounts that we are proposing to appl y to all hospitals, except hospitals located in

Puerto Rico, for FY 2011. The proposed Puerto Rico-specific amounts are shown in Table 1C of

this Addendum. The proposed amounts shown in Tabl es 1A and 1B differ only in that the laborrelated share applied to the st andardized amounts in Table 1A is the labor-related share of 68.8

percent, and Table 1B is 62 percent. In accordance with sections 1886(d)(3)(E) and

1886(d)(9)(C)(iv) of the Act, we are applying a labor-related share of 62 percent, unless

application of that percentage would result in lower payments to a hospital than would otherwise

be made. In effect, the statutory provision mean s that we will apply a labor-related share of 62

percent for all hospitals (other than those in Pu erto Rico) whose wage indices are less than or

equal to 1.0000.CMS-1498-P 741

In addition, Tables 1A and 1B include proposed standardized amounts reflecting the

proposed full 2.4 percent update for FY 2011, and the proposed standardized amounts reflecting

the 2.0 percentage point reduction to the update (a 0.4 percent update) applicable for hospitals

that fail to submit quality data consistent with section 1886(b)(3)(B)(viii) of the Act.

Under section 1886(d)(9)(A)(ii) of the Act, the Federal portion of the Puerto Rico

payment rate is based on the discharge-weighted average of the national large urban standardized

amount (this proposed amount is set forth in Table 1A). The proposed labor-related and

nonlabor-related portions of the na tional average standardized amounts for Puerto Rico hospitals

for FY 2011 are set forth in Table 1C of this Addendum. This table also includes the proposed

Puerto Rico standardized amounts. The labor-rel ated share applied to the Puerto Rico specific

standardized amount is the proposed labor-rel ated share of 62.1 percent, or 62 percent,

depending on which provides higher payments to the hospital. (Section 1886(d)(9)(C)(iv) of the

Act, as amended by section 403(b) of Pub. L. 108-173, provides that the labor-related share for

hospitals located in Puerto Rico be 62 percent, unless the application of that percentage would

result in lower payments to the hospital.)

The following table illustrates the proposed changes from the FY 2010 national

standardized amount. The second column s hows the proposed changes from the FY 2010

standardized amounts for hospitals that satisfy the quality data submission requirement for

receiving the full update (2.4 percent). The third column shows the proposed changes for

hospitals receiving the reduced update (0.4 per cent). The first row of the table shows the

proposed updated (through FY 2010) average sta ndardized amount after restoring the FY 2010

offsets for outlier payments, demonstration budget neutrality and the geog raphic reclassification

budget neutrality. The DRG reclassification and recalibration wage index budget neutralityCMS-1498-P 742

factors are cumulative. Therefore, the FY 2010 factor is not removed from this table.

Additionally, the documenta tion and coding adjustments for FY 2008 and FY 2009 are

cumulative. Therefore, the FY 2008 and FY 2009 adjustment factors are not removed from this

table. We also have added separa te rows to this table to reflec t the different labor-related shares

that apply to hospitals.

COMPARISON OF FY 2010 STANDARDIZED AMOUNTS TO THE PROPOSED

FY 2011 STANDARDIZED AMOUNT WITH FULL AND REDUCED UPDATE

Under section 1886(d)(9)(A)(ii) of the Act, the Federal portion of the Puerto Rico

payment rate is based on the discharge-weighted average of the national standardized amount (as Full Update (2.4 percent); Wage index is greater than 1.0000 Full Update (2.4 percent); Wage index is less

than or equal to 1.0000 Reduced Update (0.4 percent); Wage index is greater than 1.0000 Reduced Update (0.4 percent); Wage index is less

than or equal to 1.0000 FY 2010 Base Rate, after removing geographic reclassification budget neutrality, demonstration budget neutrality, cumulative FY 2008 and FY 2009 documentation and coding adjustment and outlier offset (based on the labor-related share percentage for FY 2010) Labor: $3,879.09 Nonlabor: $1,759.12 Labor: $3,459.69 Nonlabor: $2,142.52 Labor: $3,879.09 Nonlabor: $1,759.12 Labor: $3,459.69 Nonlabor: $2,142.52 Proposed FY 2011 Update Factor 1.024 1.024 1.004 1.004 Proposed FY 2011 DRG Recalibration and Wage Index Budget Neutrality Factor 0.996963 0.996963 0.996963 0.996963 Proposed FY 2011 Reclassification Budget Neutrality Factor 0.991756 0.991756 0.991756 0.991756 Proposed FY 2011 Outlier Factor 0.948999 0.948999 0.948999 0.948999 Proposed Cumulative Documentation and Coding Adjustment 0.957 0.957 0.957 0.957 Proposed Rate for FY 2011 Labor: $3,566.91 Nonlabor: $1,617.55 Labor: $3,214.37 Nonlabor:$1,970.09 Labor: $3,497.24 Nonlabor: $1,585.96 Labor: $3,151.58 Nonlabor: $1,931.62CMS-1498-P 743

set forth in Table 1A of this Addendum). The labor-related and nonlabor-related portions of the

proposed national average standardized amounts for Puerto Rico hospitals are set forth in Table

1C of this Addendum. This table also includes the proposed Puerto Rico standardized amounts.

The labor-related share applied to the proposed Pu erto Rico standardized amount is 62.1 percent,

or 62 percent, depending on which results in higher payments to the hospital. (Section

1886(d)(9)(C)(iv) of the Act, as amended by s ection 403(b) of Pub. L. 108-173, provides that the

labor-related share for hospitals in Puerto Rico wi ll be 62 percent, unless the application of that

percentage would result in lower payments to the hospital.)

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

Tables 1A through 1C, as set forth in this Addendum, contain the labor-related and

nonlabor-related shares that we are proposing to use to calculate the prospective payment rates

for hospitals located in the 50 States, the Distri ct of Columbia, and Puerto Rico for FY 2011.

This section addresses tw o types of adjustments to the sta ndardized amounts that are made in

determining the proposed prospective paymen t rates as described in this Addendum.

1. Proposed Adjustment for Area Wage Levels

Sections 1886(d)(3)(E) and 1886(d)(9)(C)(iv) of the Act require that we make an

adjustment to the labor-related portion of the national and Puerto Rico prospective payment

rates, respectively, to account for area differences in hospital wage levels. This adjustment is

made by multiplying the labor-re lated portion of the adjusted standardized amounts by the

appropriate wage index for the area in which the hospital is located. In section III. of the

preamble of this proposed rule, we discuss th e data and methodology for the proposed FY 2011

wage index.CMS-1498-P 744

2. Proposed Adjustment for Cost-of-Living in Alaska and Hawaii

Section 1886(d)(5)(H) of the Act authorizes th e Secretary to make an adjustment to take

into account the unique circumstances of hospitals in Alaska and Hawaii. Higher labor-related

costs for these two States are taken into account in the adjustment for area wages described

above. For FY 2011, we are proposing to adjust the payments for hospitals in Alaska and

Hawaii by multiplying the nonlabor-related portion of the standardized am ount by the applicable

adjustment factor contained in the table below. These proposed factors were obtained from the

U.S. Office of Personnel Management (OPM) and ar e the same as the factors currently in use

under the IPPS for FY 2010. In addition, we are proposing that if OPM releases revised COLA

factors after publication of this proposed rule , we would use the revised factors for the

development of IPPS payments for FY 2011 and publish those revised COLA factors in the final

rule.

Table of Cost-of-Living Adjustment Factors: Alaska and Hawaii Hospitals

Area Cost of Living Adjustment Factor Alaska: City of Anchorage and 80-kilome ter (50-mile) radius by road 1.23 City of Fairbanks and 80-kilome ter (50-mile) radius by road 1.23 City of Juneau and 80-kilomete r (50-mile) radius by road 1.23 Rest of Alaska 1.25 Hawaii: City and County of Honolulu 1.25 County of Hawaii 1.18 County of Kauai 1.25 County of Maui and County of Kalawao 1.25

(The above factors are based on data obt ained from the U.S. Office of Personnel Management Web site at: http://www.opm.gov/oca/cola/rates.asp .)CMS-1498-P 745

C. Proposed MS-DRG Relative Weights

As discussed in section II.H. of the preamb le of this proposed ru le, we have developed

proposed relative weights for each MS-DRG that reflect the resour ce utilization of cases in each

MS-DRG relative to Medicare cases in other MS-DRGs. Table 5 of this Addendum contains the

proposed relative weights that we would apply to discharges occurring in FY 2011. These

factors have been recalibrated as explained in s ection II. of the preamble of this proposed rule.

D. Calculation of the Propos ed Prospective Payment Rates

General Formula for Calculation of the Pr oposed Prospective Payment Rates for FY 2011

In general, the operating prospective payment rate for all hospitals paid under the IPPS

located outside of Puerto Rico, except SCHs and MDHs, for FY 2011 equals the Federal rate.

Currently, SCHs are paid based on whichever of the following rates yields the greatest

aggregate payment: the Federal national rate; the updated hospital-speci fic rate based on FY

1982 costs per discharge; the updated hospital- specific rate based on FY 1987 costs per

discharge; the updated hospital-specific rate based on FY 1996 costs per discharge; or the

updated hospital-specific rate based on the FY 2006 costs per disc harge to determine the rate that

yields the greatest aggregate payment.

The prospective payment rate for SCHs for FY 2011 equals the higher of the applicable

Federal rate, or the hospital-specific rate as desc ribed below. The prospective payment rate for

MDHs for FY 2011 equals the higher of the Federa l rate, or the Federal ra te plus 75 percent of

the difference between the Federal rate and the hospital-specific rate as described below. For

MDHs, the updated hospital-specific rate is based on FY 1982, FY 1987 or FY 2002 costs per

discharge, whichever yields the greatest aggregate payment.CMS-1498-P 746

The prospective payment rate for hospitals lo cated in Puerto Rico for FY 2011 equals

25 percent of the Puerto Rico rate plus 75 percent of the applicable national rate.

1. Federal Rate

The Federal rate is determined as follows:

Step 1 --Select the applicable average standa rdized amount depending on whether the

hospital submitted qualifying qualit y data (full update for qualif ying hospitals, update minus 2.0

percentage points for nonqualifying hospitals).

Step 2 --Multiply the labor-related portion of the standardized amount by the applicable

wage index for the geographic area in which the hospital is located or the area to which the

hospital is reclassified.

Step 3 --For hospitals in Alaska and Hawaii, multiply the nonlabor-related portion of the

standardized amount by the applicable cost-of-living adjustment factor.

Step 4 --Add the amount from Step 2 and the nonla bor-related portion of the standardized

amount (adjusted, if applicable, under Step 3).

Step 5 --Multiply the final amount from Step 4 by the relative weight corresponding to the

applicable MS-DRG (see Ta ble 5 of this Addendum).

The Federal rate as determined in Step 5 may then be further adjusted if the hospital

qualifies for either the IME or DSH adjustment. In addition, for hospitals that qualify for a lowvolume payment adjustment under section 1886( d)(12) of the Act and 42 CFR 412.101(b), the

payment in Step 5 would be increased by 25 percent.

2. Hospital-Specific Rate (Applicable Only to SCHs and MDHs)

a. Calculation of Hospital-Specific RateCMS-1498-P 747

Section 1886(b)(3)(C) of the Act provides that currently SCHs are paid based on

whichever of the following rates yields the greatest aggregate payment: the Federal rate; the

updated hospital-specific rate based on FY 1982 costs per disc harge; the updated hospitalspecific rate based on FY 1987 costs per discharg e; the updated hospital-specific rate based on

FY 1996 costs per discharge; or the updated hos pital-specific rate based on the FY 2006 costs

per discharge to determine the rate that yields the greatest aggregate payment.

As discussed previously, currently MDHs ar e paid based on the Fede ral national rate or,

if higher, the Federal national ra te plus 75 percent of the differe nce between the Federal national

rate and the greater of the upda ted hospital-specific rates based on eith er FY 1982, FY 1987 or

FY 2002 costs per discharge.

Hospital-specific rates have been determined for each of these hospitals based on the

FY 1982 costs per discharge, the FY 1987 costs pe r discharge, or, for SCHs, the FY 1996 costs

per discharge or the FY 2006 costs per disc harge, and for MDHs, the FY 2002 cost per

discharge. For a more detailed discussion of the calculation of the hospital-specific rates, we

refer the reader to the FY 1984 IPPS interim final rule (48 FR 39772); the April 20, 1990 final

rule with comment period (55 FR 15150); the FY 1991 IPPS final rule (55 FR 35994); and the

FY 2001 IPPS final rule (65 FR 47082). In addition, for both SCHs and MDHs, the

hospital-specific rate is adjusted by the budget neutrality adjustment factor as discussed in

section III. of this Addendum. The resulting rate will be used in determining the payment rate an

SCH or MDH will receive for its discharg es beginning on or after October 1, 2010.

b. Updating the FY 1982, FY 1987, FY 1996, FY 2002, and FY 2006 Hospital-Specific Rates

for FY 2011CMS-1498-P 748

We are proposing to increase the hospital- specific rates by 2.4 percent (the hospital

market basket percentage in crease) for FY 2011 for those SCHs and MDHs that submit

qualifying quality data and by 0.4 percent for SC Hs and MDHs that fail to submit qualifying

quality data. Section 1886(b)(3)(C)(i v) of the Act provides that th e update factor applicable to

the hospital-specific rates for SCHs is e qual to the update factor provided under

section 1886(b)(3)(B)(iv) of the Act, which, for SCHs in FY 2011, is the market basket

percentage increase for hospitals that submit qualifying quality data and the market basket

percentage increase minus 2 percentage points for hospitals that fail to submit qualifying quality

data. Section 1886(b)(3)(D) of the Act provides that the update factor applicable to the

hospital-specific rates for MDHs also equals the update factor provided for under section

1886(b)(3)(B)(iv) of the Act, which, for FY 2011, is the market basket percentage increase for

hospitals that submit qualifying quality data and the market basket percentage increase minus 2

percentage points for hospitals that fail to submit qualifying quality data.

3. General Formula for Calculation of Prospective Payment Rates for Hospitals Located in

Puerto Rico Beginning On or After October 1, 2010, and Before October 1, 2011

Section 1886(d)(9)(E)(iv) of the Act provides that, effective for discharges occurring on

or after October 1, 2004, hospitals located in Puerto Rico are paid based on a blend of 75 percent

of the national prospective paym ent rate and 25 percent of the Puerto Rico-specific rate.

a. Puerto Rico Rate

The Puerto Rico prospective payment rate is determined as follows:

Step 1 - Select the applicable average standard ized amount considering the applicable

wage index (Table 1C of this Addendum).CMS-1498-P 749

Step 2 - Multiply the labor-related portion of the standardized amount by the applicable

Puerto Rico-specific wage index.

Step 3 - Add the amount from Step 2 and the nonla bor-related portion of the standardized

amount.

Step 4 - Multiply the amount from Step 3 by th e applicable MS-DRG relative weight

(Table 5 of this Addendum).

Step 5 - Multiply the result in Step 4 by 25 percent.

b. National Rate

The national prospective payment rate is determined as follows:

Step 1 - Select the applicable average standardized amount.

Step 2 --Multiply the labor-related portion of the standardized amount by the applicable

wage index for the geographic area in which the hospital is located or the area to which the

hospital is reclassified.

Step 3 - Add the amount from Step 2 and the nonlabor-related portion of the national

average standardized amount.

Step 4 - Multiply the amount from Step 3 by th e applicable MS-DRG relative weight

(Table 5 of this Addendum).

Step 5 - Multiply the result in Step 4 by 75 percent.

The sum of the Puerto Rico rate and th e national rate computed above equals the

prospective payment for a given discharge for a hosp ital located in Puerto Rico. This rate would

then be further adjusted if the hospital qualifies for either the IME or DSH adjustment.CMS-1498-P 750

III. Proposed Changes to Pa yment Rates for Acute Care Hospital Inpatient CapitalRelated Costs for FY 2011

The PPS for acute care hospital inpatient capital-related costs was implemented for cost

reporting periods beginning on or after October 1, 1991. Effectiv e with that cost reporting

period, hospitals were paid during a 10-year tr ansition period (which extended through FY 2001)

to change the payment methodology for Medicare acute care hospital i npatient capital-related

costs from a reasonable cost-based methodology to a prospective methodology (based fully on

the Federal rate).

The basic methodology for dete rmining Federal cap ital prospective rates is set forth in

the regulations at 42 CFR 412.308 through 412.352. Below we discuss the factors that we are

proposing to use to determine the capital Federal rate for FY 2011, which would be effective for

discharges occurring on or after October 1, 2010.

The 10-year transition period ended with hosp ital cost reporting periods beginning on or

after October 1, 2001 (FY 2002). Therefore, for co st reporting periods beginning in FY 2002, all

hospitals (except "new" hospitals under §412.304(c )(2)) are paid based on the capital Federal

rate. For FY 1992, we computed the standard Fe deral payment rate for capital-related costs

under the IPPS by updating the FY 1989 Medicare inpatient capital cost per case by an actuarial

estimate of the increase in Medicare inpatient cap ital costs per case. Each year after FY 1992,

we update the capital standard Fe deral rate, as provided at §412.308(c)(1), to account for capital

input price increases and other factors. The regulations at §412.308(c)(2) provide that the capital

Federal rate be adjusted annually by a fact or equal to the estima ted proportion of outlier

payments under the capital Federal rate to total capital payments under the capital Federal rate.

In addition, §412.308(c)(3) requires that the capital Fe deral rate be reduced by an adjustmentCMS-1498-P 751

factor equal to the estimated proportion of payments for (regu lar and special) exceptions under

§412.348. Section 412.308(c)(4)(ii) require s that the capital standard Fe deral rate be adjusted so

that the effects of the annual DRG reclassification and the recalibration of DRG weights and

changes in the geographic adjustment factor (GAF) are budget neutral.

For FYs 1992 through 1995, §412.352 required that the capital Federal rate also be

adjusted by a budget neutrality factor so that aggregate payments for inpatient hospital capital

costs were projected to equal 90 percent of the pa yments that would have been made for capitalrelated costs on a reasonable cost basis during the respective fiscal year. That provision expired

in FY 1996. Section 412.308(b)(2) describes the 7.4 percent reduction to the capital Federal rate

that was made in FY 1994, and §412.308(b)(3) desc ribes the 0.28 percent reduction to the capital

Federal rate made in FY 1996 as a result of the revised policy for paying for transfers. In

FY 1998, we implemented section 4402 of Pub. L. 105-33, which required that, for discharges

occurring on or after October 1, 1997, the budget neut rality adjustment factor in effect as of

September 30, 1995, be applied to the unadjuste d capital standard Federal rate and the

unadjusted hospital-specific rate. That fa ctor was 0.8432, which was equivalent to a 15.68

percent reduction to the unadjusted capital payment rates. An additional 2.1 percent reduction to

the rates was effective from October 1, 1997 through September 30, 2002, making the total

reduction 17.78 percent. As we discussed in the FY 2003 IPPS final rule (67 FR 50102) and

implemented in §412.308(b)(6), the 2.1 percent reduc tion was restored to the unadjusted capital

payment rates effective October 1, 2002.

To determine the appropriate budget neutrality adjustment factor and the regular

exceptions payment adjustment during the 10-y ear transition period, we developed a dynamic

model of Medicare inpatient capital-related costs; that is, a model that projected changes inCMS-1498-P 752

Medicare inpatient capital-relate d costs over time. With the ex piration of the budget neutrality

provision, the capital cost model was only used to estimate the regula r exceptions payment

adjustment and other factors during the transition period. As we explained in the FY 2002 IPPS

final rule (66 FR 39911), beginning in FY 2002, an adjustment for regular exception payments is

no longer necessary because regular exception payments were only made for cost reporting

periods beginning on or after October 1, 1991, and before October 1, 2001 (see §412.348(b)).

Because payments are no longer made under the regular exception policy effective with cost

reporting periods beginning in FY 2002, we discon tinued use of the capital cost model. The

capital cost model and its application during the transition period are described in Appendix B of

the FY 2002 IPPS final rule (66 FR 40099).

Section 412.374 provides for blended payments to hospitals located in Puerto Rico under

the IPPS for acute care hospital inpatient capital-related costs. Accordingly, under the capital

PPS, we compute a separate payment rate specific to hospitals located in Puerto Rico using the

same methodology used to compute the national Fe deral rate for capital -related costs. In

accordance with section 1886(d)(9)(A) of th e Act, under the IPPS for acute care hospital

operating costs, hospitals located in Puerto Ri co are paid for operating costs under a special

payment formula. Prior to FY 1998, hospitals lo cated in Puerto Rico were paid a blended

operating rate that consisted of 75 percent of the applicable standardized amount specific to

Puerto Rico hospitals and 25 percent of the a pplicable national average standardized amount.

Similarly, prior to FY 1998, hospitals located in Puer to Rico were paid a bl ended capital rate that

consisted of 75 percent of the applicable capital Puerto Rico-specific rate and 25 percent of the

applicable capital Federal rate. However, effective October 1, 1997, in accordance with section

4406 of Pub. L. 105-33, the methodology for operating payments made to hospitals located inCMS-1498-P 753

Puerto Rico under the IPPS was re vised to make payments based on a blend of 50 percent of the

applicable standardized amount specific to Puerto Rico hospitals and 50 per cent of the applicable

national average standardized amount. In conjunc tion with this change to the operating blend

percentage, effective with discharges occurring on or after October 1, 1997, we also revised the

methodology for computing capital payments to hosp itals located in Puerto Rico to be based on a

blend of 50 percent of the Puerto Rico capital ra te and 50 percent of th e national capital Federal

rate.

As we discussed in the FY 2005 IPPS final rule (69 FR 49185), section 504 of Pub. L.

108-173 increased the national portion of the operating IPPS payments for hospitals located in

Puerto Rico from 50 percent to 62.5 percent a nd decreased the Puerto Rico portion of the

operating IPPS payments from 50 percent to 37.5 pe rcent for discharges occurring on or after

April 1, 2004 through September 30, 2004 (refer to the March 26, 2004 One-Time Notification

(Change Request 3158)). In a ddition, section 504 of Pub. L. 108- 173 provided that the national

portion of operating IPPS payments for hospitals located in Puerto Rico is equal to 75 percent

and the Puerto Rico-specific portion of operating IPPS payments is equal to 25 percent for

discharges occurring on or after October 1, 2004. Consistent with that change in operating IPPS

payments to hospitals located in Puerto Rico, for FY 2005 (as we discussed in the FY 2005 IPPS

final rule), we revised the methodology for comp uting capital payments to hospitals located in

Puerto Rico to be based on a blend of 25 percen t of the Puerto Rico-specific capital rate and

75 percent of the national cap ital Federal rate for discha rges occurring on or after

October 1, 2004.CMS-1498-P 754

A. Determination of Proposed Federal Hospital Inpatient Capital-Related Prospective Payment

Rate Update

In the correction notice to the FY 2010 IPPS/RY 2010 LTCH PPS final rule published on

October 7, 2009 (74 FR 51499), we established the final capital Federal rate of $429.26 for

FY 2010. In the discussion that follows, we explai n the factors that we are proposing to use to

determine the capital Federal ra te for FY 2011. In particular, we explain why the proposed

FY 2011 capital Federal rate w ould decrease approximately 1.9 percent, compared to the

FY 2010 capital Federal rate. As discussed in the impact analysis , we estimate capital payments

per discharge would decrease 0.2 percent during that same period. Because capital payments

constitute about 10 pe rcent of hospital payments, a 1-percen t change in the capital Federal rate

yields only about a 0.1 percent change in actual payments to hospitals.

We note that on March 23, 2010, the Patient Protection and Affordable Care Act,

Pub. L. 111-148, was enacted. Following the enactme nt of Pub. L. 111-148, the Health Care and

Education Reconciliation Act of 2010, Pub. L. 111-152 (enact ed on March 30, 2010), amended

certain provisions of Pub. L. 111-148. A num ber of the provisions of Pub. L. 111-148, as

amended by Pub. L. 111-152, affect the IPPS and the providers addressed in this proposed rule.

However, due to the timing of th e passage of the legislation, we are unable to implement those

provisions in this proposed rule. Therefore, the proposed policies and payment rates in this

section do not reflect the new legislation. We pl an to issue separate ru lemaking documents in

the Federal Register addressing the provisions of Pub. L. 111-148, as amended, that affect our

proposed policies and payment rates for FY 2011 under the IPPS and LTCH PPS, as well as the

provisions of Pub. L. 111-148, as amended, that affect the policies and payment rates for FY

2010 under the IPPS.CMS-1498-P 755

1. Projected Capital Standa rd Federal Rate Update

a. Description of the Update Framework

Under §412.308(c)(1), the capital standard Fede ral rate is updated on the basis of an

analytical framework that takes into account ch anges in a capital input price index (CIPI) and

several other policy adjustment factors. Speci fically, we adjust the projected CIPI rate-ofincrease as appropriate each year for case-mix inde x-related changes, for intensity, and for errors

in previous CIPI forecasts. The proposed update factor for FY 2011 under that framework is 1.5

percent based on the best data available at this time. The pr oposed update factor under that

framework is based on a projected 1.2 percent incr ease in the CIPI, a 0.0 percent adjustment for

intensity, a 0.0 percent adjustment for case-mix , a 0.0 percent adjustment for the FY 2009 DRG

reclassification and recalibration, and a forecast error correction of 0.3 percent. As discussed

below in section III.C. of this Addendum, we cont inue to believe that the CIPI is the most

appropriate input price index for capital costs to measure capital price changes in a given year.

We also explain the basis for the FY 2011 CIPI projection in that same section of this

Addendum. We note, as discussed in section VI.E .1. of the preamble of this proposed rule, we

are proposing to apply a -2.9 percent adjustment to the capital rate in FY 2011 to account for the

cumulative effect of changes in documentati on and coding under the MS-DRGs that do not

correspond to changes in real increases in patients’ severity of illness. Below we describe the

policy adjustments that we are proposing to apply in the update framework for FY 2011.

The case-mix index is the measure of the av erage DRG weight for cases paid under the

IPPS. Because the DRG weight determines the prospective payment for each case,

any percentage increase in the case-mix index corresponds to an equal percentage increase in

hospital payments.CMS-1498-P 756

The case-mix index can change for any of several reasons:

● The average resource use of Medicare patients changes ("real" case-mix change);

● Changes in hospital documentation and codi ng of patient records result in higher

weight DRG assignments (" coding effects"); and

● The annual DRG reclassification and recalib ration changes may not be budget neutral

("reclassification effect").

We define real case-mix change as actual changes in the mix (and resource requirements)

of Medicare patients as opposed to changes in doc umentation and coding behavior that result in

assignment of cases to higher weighted DRGs but do not reflect higher resource requirements.

The capital update framework includes the same case -mix index adjustment used in the former

operating IPPS update framework (as discussed in the May 18, 2004 IPPS proposed rule for FY

2005 (69 FR 28816)). (We no longer use an update framework to make a recommendation for

updating the operating IPPS standardized amounts as discussed in section II. of Appendix B in

the FY 2006 IPPS final rule (70 FR 47707).)

Absent any increase in case-mix resulting from changes in documentation and coding due

to the adoption of the MS-DRGs, for FY 2011, we are projecting a 1.0 percent total increase in

the case-mix index. We estimated that the real case-mix increase will also equal 1.0 percent for

FY 2011. The net adjustment for change in case-mix is the difference between the projected real

increase in case-mix and the projected total incr ease in case-mix. Therefore, the proposed net

adjustment for case-mix change in FY 2011 is 0.0 percentage points.

The capital update framework also contains an adjustment for the effects of DRG

reclassification and recalibration. This adjustme nt is intended to rem ove the effect on total

payments of prior year’s changes to the DRG cl assifications and relative weights, in order toCMS-1498-P 757

retain budget neutrality for all case-mix index-re lated changes other than those due to patient

severity. Due to the lag time in the availability of data, there is a 2-year lag in data used to

determine the adjustment for the effects of DRG reclassification and reca libration. For example,

we have data available to evaluate the effects of the FY 2009 DRG reclassification and

recalibration as part of our proposed update fo r FY 2011. To adjust for reclassification and

recalibration effects, under our historical met hodology, we run the FY 2009 cases through the

FY 2008 GROUPER and through the FY 2009 GROUPER . The resulting ratio of the case-mix

indices should equate to 1.0. If not, under our hi storical methodology, in the update framework

for FY 2011, we would make an adjustment to ad just for the reclassification and recalibration

effects in FY 2009. As discussed in detail in sec tion II.B. of the preamble of this proposed rule,

however, when we adopted the MS-DRGs beginning in FY 2008 to better recognize severity of

illness in Medicare payment rates, we also recognized that changes in documentation and coding

could potentially lead to increases in aggregat e payments without a corresponding increase in

patients’ severity of illness (that is, increased case-mix index other than real case-mix index

increase). To maintain budget neutrality for the adoption of the MS-DRGs, as discussed in

greater detail in section V.E. of the preamble of this proposed rule, we are proposing to make an

adjustment to the proposed capital Federal rate in FY 2011 based on actuarial estimates of the

cumulative effects of document ation and coding changes th at occurred in FYs 2008 and 2009

(based on FYs 2008 and 2009 claims data). Therefor e, we are not adjusti ng for reclassification

and recalibration effects from FY 2009 in the update framework for FY 2011 because it is

already accounted for in the proposed documenta tion and coding adjustment to the capital

Federal rates for FY 2011. Consequently, we are proposing a 0.0 percent adjustment for DRG

reclassification and recalibration in the proposed FY 2011 update framework.CMS-1498-P 758

The capital update framework also contains an adjustment for forecast error. The input

price index forecast is based on historical trends and relationships ascertainable at the time the

update factor is established for the upcoming year. In any given year, there may be unanticipated

price fluctuations that may result in differences between the actual increase in prices and the

forecast used in calculating the update factors. In setting a pr ospective payment rate under the

framework, we make an adjustment for forecast error only if our estimate of the change in the

capital input price index for any year is off by 0.2 5 percentage points or more. There is a 2-year

lag between the forecast and the availability of data to develop a measurement of the forecast

error. A forecast error of 0.3 percentage point was calculated for the FY 2011 update. That is,

current historical data indicate that the forecasted FY 2009 CIPI (1.4 percent) used in calculating

the FY 2009 update factor slightly understated the actual realized price increases (1.7 percent) by

0.3 percentage point. This is due to the prices associated with both the depreciation and interest

cost categories growing faster than anticipated. Historically, when the estimation of the change

in the CIPI is greater than 0.25 percentage poi nts, it is reflected in the update recommended

under this framework. Therefore, we are proposing to make a 0.3 percent adjustment for forecast

error in the update for FY 2011.

Under the capital IPPS update framework, we also make an adjustment for changes in

intensity. Historically, we ha ve calculated this adjustment us ing the same methodology and data

that were used in the past under the framework for operating IPPS. The intensity factor for the

operating update framework reflects how hospital services are utilized to produce the final

product, that is, the discharge. This compone nt accounts for changes in the use of qualityenhancing services, for changes within DRG severity, and for ex pected modification of practiceCMS-1498-P 759

patterns to remove noncost-effective services. Our intensity measure is based on a 5-year

average.

Historically, we have calculated case-mix constant intensity as the change in total charges

per admission, adjusted for price level changes (t he CIPI for hospital and related services) and

changes in real case-mix. Without reliable es timates of the proportions of the overall annual

intensity increases that are due, respectively, to ineffective practice patterns and the combination

of quality-enhancing new technolog ies and complexity within the DRG system, we assume that

one-half of the annual increase is due to each of these factors. The capital update framework

thus provides an add-on to the input price index rate of increase of on e-half of the estimated

annual increase in intensity, to allow for incr eases within DRG severity and the adoption of

quality-enhancing technology.

We have developed a Medicare-specific intens ity measure based on a 5-year average.

Past studies of case-mix change by the RA ND Corporation (Has DRG Creep Crept Up?

Decomposing the Case Mix Index Change Between 1987 and 1988 by G. M. Carter, J. P.

Newhouse, and D. A. Relles, R-4098-HCFA/ProPA C (1991)) suggest that real case-mix change

was not dependent on total change, but was usuall y a fairly steady increase of 1.0 to 1.5 percent

per year. However, we used 1.4 percent as the upper bound because the RAND study did not

take into account that hospitals may have indu ced doctors to document medical records more

completely in order to improve payment.

As we noted above, in accordance with §412.308(c)(1)(ii), we began updating the capital

standard Federal rate in FY 1996 using an upd ate framework that takes into account, among

other things, allowable changes in the intensit y of hospital services. For FYs 1996 through 2001,

we found that case-mix constant intensity was declining, a nd we established a 0.0 percentCMS-1498-P 760

adjustment for intensity in each of those years. For FYs 2002 and 2003, we found that case-mix

constant intensity was increasin g, and we established a 0.3 per cent adjustment and 1.0 percent

adjustment for intensity, respectively. For FYs 2004 and 2005, we found that the charge data

appeared to be skewed as a result of hospitals attempting to maximize outlier payments, while

lessening costs, and we establishe d a 0.0 percent adjustment in each of those years. Furthermore,

we stated that we would continue to apply a 0.0 percent adjustment for intensity until any

increase in charges can be tied to intensity rather than attempts to maximize outlier payments.

For FYs 2006 through 2010, we continued to apply a 0.0 percent adjustment for intensity in the

capital update framework.

In an effort to further refine the intens ity adjustment and more accurately reflect

allowable changes in hospital intensity, we are proposing to use changes in hospital costs per

discharge over a 5-year average rather than ch anges in hospital charges, which have been the

basis of the intensity adjustment in prior years. The unique nature of cap ital--how and when it is

purchased, its longevity, and how it is financed-- creates a greater degree of variance in capital

cost among hospitals than does operating cost. We believe that using changes in capital costs per

discharge as the basis for the intensity adjustment in lieu of changes in charges will decrease

some of the variability of this adjustment. A case in point is the charge data over much of the

last decade-- the annual change in hospital charge s has fluctuated erratically from as little as 3

percent to as large as 16 percent. As we have discussed for several years in past rulemaking, we

believe the effects of hospitals’ charge practices prior to the implementation of the outlier policy

revisions established in the June 9, 2003 final ru le were the main cause of the variability and

large annual increases in hospital charges for much of the past decade. However, even after the

outlier policy was implemented, we continued to see evidence of these charge practices in theCMS-1498-P 761

data, as it may have taken hospita ls some time to adopt changes in their behavior in response to

the new outlier policy. Thus, we believe that the charge data for much of the past decade was

skewed because if hospitals were treating new or different types of cases, which would result in

an appropriate increase in charges per discharge, we would expect hospitals' case-mix to increase

proportionally, and it did not.

Therefore, in this proposed rule, for the re asons discussed above, we believe it would be

more appropriate to use our intensity adjustment based on the change in capital cost per

discharge. To determine the proposed intens ity adjustment for FY 2011, we have replaced

charge data with capital cost per discharge data. As expected, there are significantly smaller

increases in cost per discharge over this time peri od and less fluctuation from year to year. As

we did when using charge data, we are basing the intensity measure on a 5-year average.

Therefore, the proposed intensity measure for FY 2011 is based on an average of cost per

discharge data from the 5-year period beginning with FY 2004 and extending through FY 2008.

Based on these data, we estimate that case-mix constant inte nsity declined during FYs 2004

through 2008. In the past (FYs 1996 through 2001) when we found intensity to be declining, we

believed a zero (rather than negative) intensity adjustment was appropriate. Because we estimate

intensity declined during that 5-year period, we be lieve that it is appropria te to continue apply a

zero intensity adjustment for FY 2011. Theref ore, we are proposing to make a 0.0 percent

adjustment for intensity in the update for FY 2011.

Above, we described the basis of the com ponents used to develop the proposed 1.5

percent capital update factor unde r the capital update framework for FY 2011 as shown in the

table below.CMS-1498-P 762

CMS FY 2011 Proposed Update Factor to the Capital Federal Rate

Capital Input Price Index 1.2 Intensity: 0.0 Case-Mix Adjustment Factors: Real Across DRG Change -1.0 Projected Case-Mix Change 1.0
Subtotal 1.2 Effect of FY 2009 Reclassi fication and Recalibration 0.0
Forecast Error Correction 0.3 Total Update 1.5

b. Comparison of CMS and Me dPAC Update Recommendation

In its March 2010 Report to Congress, Me dPAC did not make a specific update

recommendation for capital IPPS payments for FY 2011. (MedPAC’s Report to the Congress:

Medicare Payment Policy, March 2010, Section 2A.)

2. Proposed Outlier Payment Adjustment Factor

Section 412.312(c) establishes a unified outlier payment methodology for inpatient

operating and inpatient capital-related costs. A single set of thresholds is used to identify outlier

cases for both inpatient operatin g and inpatient capita l-related payments. Section 412.308(c)(2)

provides that the standard Federal rate for in patient capital-related costs be reduced by an

adjustment factor equal to th e estimated proportion of capital-related outlier payments to total

inpatient capital-related PPS payments. The outlier thresholds are set so that operating outlier

payments are projected to be 5.1 percent of total operating IPPS DRG payments.

For FY 2010, we estimated that outlier paymen ts for capital would equal 5.35 percent of

inpatient capital-related payments based on the capital Federal ra te in FY 2010. Based on the

thresholds as set forth in section II.A. of th is Addendum, we estimate that outlier payments for

capital-related costs woul d equal 5.76 percent for inpatient cap ital-related payments based on the

proposed capital Federal rate in FY 2011. Ther efore, we are proposing to apply an outlierCMS-1498-P 763

adjustment factor of 0.9424 in determining the cap ital Federal rate. Thus , we estimate that the

percentage of capital outlier payments to total capital standard payments for FY 2011 would be

higher than the percentage for FY 2010. This in crease in capital outlier payments is primarily

due to the estimated decrease in capital IPPS paym ents per discharge. That is, because capital

payments per discharge are projected to be s lightly lower in FY 2011 compared to FY 2010, as

shown in Table III. in section VIII. of Appendi x A to this proposed rule, more cases would

qualify for outlier payments.

The outlier reduction factors are not built permanently into the capital rates; that is, they

are not applied cumulatively in determining th e capital Federal rate. The proposed FY 2011

outlier adjustment of 0.9424 is a -0.54 percent ch ange from the FY 2010 outlier adjustment of

0.9475. Therefore, the net change in the outlier ad justment to the proposed capital Federal rate

for FY 2011 is 0.9946 (0.9424/0.9475). Thus, the pr oposed outlier adjustment decreases the

proposed FY 2011 capital Federal rate by 0.54 percent compared with the FY 2010 outlier

adjustment.

3. Proposed Budget Neutrality Adjustment Fact or for Changes in DRG Classifications and

Weights and the GAF

Section 412.308(c)(4)(ii) requires that the cap ital Federal rate be adjusted so that

aggregate payments for the fiscal year based on the capital Federal rate after any changes

resulting from the annual DRG reclassification and recalibration and changes in the GAF are

projected to equal aggregate payments that w ould have been made on the basis of the capital

Federal rate without such changes. Because we implemented a separate GAF for Puerto Rico,

we apply separate budget neutra lity adjustments for the national GAF and the Puerto Rico GAF.

We apply the same budget neutrality factor for DRG reclassifications a nd recalibration nationallyCMS-1498-P 764

and for Puerto Rico. Separate adjustments were unnecessary for FY 1998 and earlier because the

GAF for Puerto Rico was implemented in FY 1998.

In the past, we used the actuarial capital cost model (described in Appendix B of the FY

2002 IPPS final rule (66 FR 40099)) to estimate the aggregate payments that would have been

made on the basis of the capital Fe deral rate with and without chan ges in the DRG classifications

and weights and in the GAF to compute the adjus tment required to mainta in budget neutrality for

changes in DRG weights and in the GAF. Duri ng the transition period, the capital cost model

was also used to estimate the regular exception pa yment adjustment factor. As we explain in

section III.A. of this Addendum, beginning in FY 2002, an adjustment for regular exception

payments is no longer necessary. Therefore, we no longer use the capital cost model. Instead,

we are using historical data based on hospitals’ actual cost experiences to determine the

exceptions payment adjustment factor for special exceptions payments.

To determine the proposed factors for FY 2011, we compared (separately for the national

capital rate and the Puerto Rico capital rate) estimated aggregate capital Federal rate payments

based on the FY 2010 MS-DRG classifications and relative weights and the FY 2010 GAF to

estimated aggregate capital Federal rate payments based on the FY 2010 MS-DRG

classifications and relative weights and the pr oposed FY 2011 GAFs. In making the comparison,

we set the exceptions reduction factor to 1.00. To achieve budget neutrality for the changes in

the national GAFs, based on calculations using updated data, we are proposing to apply an

incremental budget neutrality adjustment of 1.0007 for FY 2011 to the previous cumulative

FY 2010 adjustment of 0.9907, yielding an ad justment of 0.9915, through FY 2011 (calculated

with unrounded numbers). For the Puerto Rico GA Fs, we are proposing to apply an incrementalCMS-1498-P 765

budget neutrality adjustment of 1.0004 for FY 2011 to the previous cumulative FY 2010

adjustment of 0.9969, yielding a cumulative adjustment of 0.9973 through FY 2011.

We then compared estimated aggregate capital Federal rate payments based on the

FY 2010 DRG relative weights and the proposed FY 2011 GAFs to estimated aggregate capital

Federal rate payments based on the cumula tive effects of the proposed FY 2011 MS-DRG

classifications and relative weights and the pr oposed FY 2011 GAFs. The proposed incremental

adjustment for DRG cl assifications and proposed changes in relative weights is 0.9992 both

nationally and for Puerto Rico. The pr oposed cumulative adjustments for MS-DRG

classifications and proposed chan ges in relative weights and for proposed changes in the GAFs

through FY 2011 are 0.9907 nationally and 0.9965 for Puerto Rico. The following table

summarizes the adjustment factors for each fiscal year:CMS-1498-P 766

BUDGET NEUTRALITY ADJUSTMENT FO R DRG RECLASSIFICATIONS AND RECALIBRATION AND THE GEOGRAPHIC ADJUSTMENT FACTORS

National Puerto Rico Incremental Adjustment Incremental Adjustment

Fiscal Year Geographic Adjustment Factor DRG Reclassifications and Recalibration Combined Cumulative Geographic Adjustment Factor DRGReclassifications and Recalibration Combined Cumulative 1992 — — — 1.00000 — — — — 1993 — — 0.99800 0.99800 — — — — 1994 — — 1.00531 1.00330 — — — — 1995 — — 0.99980 1.00310 — — — — 1996 — — 0.99940 1.00250 — — — — 1997 — — 0.99873 1.00123 — — — — 1998 — — 0.99892 1.00015 — — — 1.00000 1999 0.99944 1.00335 1.00279 1.00294 0.99898 1.00335 1.00233 1.00233 2000 0.99857 0.99991 0.99848 1.00142 0.99910 0.99991 0.99901 1.00134 2001 1 0.99782 1.00009 0.99791 0.99933 1.00365 1.00009 1.00374 1.00508 2001 2 0.99771 3 1.00009 3 0.99780 3 0.99922 1.00365 3 1.00009 3 1.00374 3 1.00508 2002 0.99666 4 0.99668 4 0.99335 4 0.99268 0.98991 4 0.99668 4 0.99662 4 0.99164 2003 5 0.99915 0.99662 0.99577 0.98848 1.00809 0.99662 1.00468 0.99628 2003 6 0.99896 7 0.99662 7 0.99558 7 0.98830 1.00809 0.99662 1.00468 0.99628 2004 8 1.00175 9 1.00081 9 1.00256 9 0.99083 1.00028 1.00081 1.00109 0.99736 2004 10 1.00164 9 1.00081 9 1.00245 9 0.99072 1.00028 1.00081 1.00109 0.99736 2005 11 0.99967 12 1.00094 1.00061 12 0.99137 0.99115 1.00094 0.99208 0.98946 2005 13 0.99946 12 1.00094 1.00040 12 0.99117 0.99115 1.00094 0.99208 0.98946 2006 1.00185 14 0.99892 1.00076 14 0.99198 1.00762 0.99892 1.00653 0.99592 2007 1.00000 0.99858 0.99858 0.99057 1.00234 0.99858 1.00092 0.99683 2008 1.00172 0.99792 0.99963 0.99021 1.00079 0.99792 0.99870 0.99554 2009 15 1.00206 0.99945 1.00150 0.99170 1.00097 0.99945 1.00041 0.99595 2010 16 0.99950 0.99953 0.99902 0.99073 1.00141 0.99953 1.00094 0.99688 2011 17 1.00074 0.99922 0.99997 0.99070 1.00036 0.99922 0.99959 0.99647

1 Factors effective for the first half of FY 2001 (October 2000 through March 2001).
2 Factors effective for the second half of FY 2001 (April 2001 through September 2001).
3 Incremental factors are applied to FY 2000 cumulative factors.
4 Incremental factors are applied to the cumulative factors for the first half of FY 2001.
5 Factors effective for the first half of FY 2003 (October 2002 through March 2003).
6 Factors effective for the second half of FY 2003 (April 2003 through September 2003).
7 Incremental factors are applied to FY 2002 cumulative factors.
8 Factors effective for the first half of FY 2004 (October 2003 through March 2004).
9 Incremental factors are applied to the cumulative factors for the second half of FY 2003.
10 Factors effective for the second half of FY 2004 (April 2004 through September 2004).
11 Factors effective for the first quarter of FY 2005 (September 2004 thro ugh December 2004).
12 Incremental factors are applied to average of the cumulative factors for the first half (October 1, 2003 through March 31, 2004) and second half (April 1, 2004 thro ugh September 30, 2004) of FY 2004.
13 Factors effective for the last three quarters of FY 2005 (January 2005 through September 2005).
14 Incremental factors are applied to average of the cumulative factors for 2005.
15 Final factors for FY 2009, including the implementation of section 124 of Pub. L. 110-275, which affects wage indices and GAFs for FY 2009,
16 Final factors for FY 2010.
17 Proposed factors for FY 2011CMS-1498-P 767

The methodology used to determine the reca libration and geographic adjustment factor

(DRG/GAF) budget neutrality adjustment is simila r to the methodology used in establishing

budget neutrality adjustments under the IPPS for operating costs. One difference is that, under

the operating IPPS, the budget neutrality adjustments for the effect of geographic

reclassifications are determined separately from th e effects of other changes in the hospital wage

index and the DRG relative weights. Under the capital IPPS, there is a single DRG/GAF budget

neutrality adjustment factor (the national capital rate and the Puerto Rico capital rate are

determined separately) for changes in the GAF (including geographic r eclassification) and the

DRG relative weights. In addition, there is no adjustment for the effects that geographic

reclassification has on the other payment paramete rs, such as the payments for DSH or IME.

For FY 2010, we calculated a final GAF/DRG budget neutrality factor of 0.9990 (74 FR

44019). For FY 2011, we are proposing to estab lish a GAF/DRG budget neutrality factor of

1.0000. The GAF/DRG budget neutrality factors are bu ilt permanently into the capital rates; that

is, they are applied cumulatively in determining the capital Federal rate. This follows the

requirement that estimated aggregate payments each year be no more or less than they would

have been in the absence of the annual DRG recl assification and recalibration and changes in the

GAFs. The incremental change in the proposed adjustment from FY 2010 to FY 2011 is 1.0000.

The cumulative change in the proposed capital Fede ral rate due to this adjustment is 0.9907 (the

product of the incremental factors for FYs 1995 though 2010 and the proposed incremental

factor of 1.0000 for FY 2011). (We note that aver ages of the incremental factors that were in

effect during FYs 2005 and 2006, respectively, were used in the calculation of the cumulative

adjustment of 0.9907 for FY 2011.)CMS-1498-P 768

The proposed factor accounts for the pr oposed MS-DRG reclassifications and

recalibration and for proposed changes in the GAFs. It also incorporates the effects on the

proposed GAFs of FY 2011 geographic recla ssification decisions made by the MGCRB

compared to FY 2010 decisions. However, it doe s not account for changes in payments due to

changes in the DSH and IME adjustment factors.

4. Exceptions Payment Adjustment Factor

Section 412.308(c)(3) of our regulations requires that the capital standa rd Federal rate be

reduced by an adjustment factor equal to th e estimated proportion of a dditional payments for

both regular exceptions and special exceptions under §412.348 relative to total capital PPS

payments. In estimating the proportion of regular exception payments to total capital PPS

payments during the transition period, we used the actuarial capital cost model originally

developed for determining budget neutrality (described in Appendix B of the FY 2002 IPPS final

rule (66 FR 40099)) to determine the exceptions payment adjustment fact or, which was applied

to both the Federal and hospital-specific capital rates.

An adjustment for regular exception payments is no longer necessary in determining the

proposed FY 2011 capital Federal rate becaus e, in accordance with §412.348(b), regular

exception payments were only made for cost reporting periods beginning on or after

October 1, 1991 and before October 1, 2001. Accordingly, as we explained in the FY 2002 IPPS

final rule (66 FR 39949), in FY 2002 and subseque nt fiscal years, no payments are made under

the regular exceptions provision. However, in accordance with §412.308(c), we still need to

compute a budget neutrality adjustment for special exception payments under §412.348(g). We

describe our methodology for de termining the proposed exceptions adjustment used in

calculating the FY 2011 capita l Federal rate below.CMS-1498-P 769

Under the special exceptions provision specified at §412.348(g)(1), eligible hospitals

include SCHs, urban hospitals with at least 100 beds that have a disproportionate share

percentage of at least 20.2 percent or qua lify for DSH payments under §412.106(c)(2), and

hospitals with a combined Medicare and Medicaid inpatient utilization of at least 70 percent. An

eligible hospital may receive special exceptions payments if it meets the following criteria: (1) a

project need requirement as described at §412.348 (g)(2), which, in the case of certain urban

hospitals, includes an excess capacity test as desc ribed at §412.348(g)(4); (2) an age of assets test

as described at §412.348(g)(3); and (3) a project size requirement as described at §412.348(g)(5).

Based on information compiled from our fiscal intermediaries and MACs, six hospitals

have qualified for special exceptions payments under §412.348(g). One of these hospitals closed

in May 2005. Because we have cost reports ending in FY 2008 for four of these five hospitals,

we calculated the adjustment based on actual cost experience. (We note that the one hospital for

which we do not have FY 2008 cost report data has had zero special exception payments for all

available past cost reports. Consequently, we expect that this hospital would not have any

special exceptions payments in FY 2008, and the l ack of this hospital’s FY 2008 cost report data

would not distort the calculation of the adjustment.) Using data from cost reports ending in FY

2008 from the December 2009 update of the HCRIS data, we divided the capital special

exceptions payment amounts for the four availabl e hospitals that qualifie d for special exceptions

by the total capital PPS payment amounts (including special exception payments) for all

hospitals. Based on the data from cost reports ending in FY 2008, this ratio is rounded to 0.0003,

and we are proposing to make an adjustment of 0.0003. Because special exceptions are budget

neutral, we are proposing to offset the capital Fe deral rate by 0.03 percent for special exceptionsCMS-1498-P 770

payments for FY 2011. Therefore, the proposed exceptions adjustment factor is equal to 0.9997

(1 - 0.0003) to account for estimated speci al exceptions payments in FY 2011.

In the FY 2010 IPPS final rule (74 FR 44019), we estimated that total (special)

exceptions payments for FY 2010 would equal 0.02 percent of aggregate payments based on the

capital Federal rate. Therefore, we applied an exceptions adjustment factor of 0.9998 (1 −

0.0002) to determine the FY 2010 cap ital Federal rate. As we stat ed above, we are proposing to

apply an exceptions payment adjustment factor of 0.9997 to the proposed capital Federal rate for

FY 2011 based on our estimate that exceptions payments in FY 2011 would equal 0.03 percent

of aggregate payments based on the proposed FY 2011 capital Federal rate. The proposed

exceptions reduction factors are not built permanentl y into the capital rates; that is, the factors

are not applied cumulatively in determining the capital Federal rate. Therefore, the net change in

the proposed exceptions adjustme nt factor used in determining the proposed FY 2011 capital

Federal rate is 0.9999 (0.9997/0.9998).

5. Proposed Capital Standard Federal Rate for FY 2011

For FY 2010, we established a final capita l Federal rate of $429.26 (74 FR 51499). We

are proposing to establish an update of 1.5 perc ent in determining the proposed FY 2011 capital

Federal rate for all hospitals. However, as disc ussed in greater detail in section V.E. of the

preamble of this proposed rule, under the statutory authority at section 1886(g) of the Act, in

conjunction with section 1886(d)(3)(A)(vi) of the Act and section 7(b) of Public Law 110-90, we

are proposing an additional 2.9 perc ent reduction to the national cap ital Federal payment rate in

FY 2011. The proposed -2.9 percent adjustment is based on our actuary’s analysis of the effect

of changes in case-mix resulting from documentation and coding changes that do not reflect real

changes in the case-mix in light of the adoption of MS-DRGs. Accordingly, we are proposing toCMS-1498-P 771

apply a cumulative documentation and coding ad justment factor of 0.957 in determining the

proposed FY 2011 capital Federal rate percent (that is, the existing -0.6 percent adjustment in FY

2008 plus the -0.9 percent adjustment in FY 2009 plus the proposed additional -2.9 percent

adjustment, computed as 1 divided by (1.006 x 1.009 x 1.029). (We note that we did not apply a

documentation and coding adjustment to the capita l Federal rate in FY 2010 (74 FR 43927).) As

a result of the proposed 1.5 percent update and other proposed budget neutrality factors

discussed above, we are proposing to establis h a national capital Federal rate of $420.99 for

FY 2011. The proposed national capital Federal rate for FY 2011 was calculated as follows:

● The proposed FY 2011 update factor is 1.015, that is, the update is 1.5 percent.

● The proposed FY 2011 budget neutrality adjustment factor that is applied to the

proposed capital standard Federal payment ra te for proposed changes in the MS-DRG

classifications and relative weights a nd proposed changes in the GAFs is 1.0000.

● The proposed FY 2011 outlier adjustment factor is 0.9424.

● The proposed FY 2011 (special) excepti ons payment adjustment factor is 0.9997.

● The proposed cumulative adjustment fact or for FY 2011 applied to the national capital

Federal rate for changes in documenta tion and coding under the MS-DRGs is 0.957.

Because the proposed capital Federal rate has already been adjusted for differences in

case-mix, wages, cost-of-living, indirect medica l education costs, and payments to hospitals

serving a disproportionate share of low-income pa tients, we are not propos ing to make additional

adjustments in the proposed capital standard Fede ral rate for these factors, other than the

proposed budget neutrality factor for proposed changes in the MS-DRG classifications and

relative weights and for proposed changes in the GAFs.CMS-1498-P 772

We are providing the following chart that shows how each of the proposed factors and

adjustments for FY 2011 affects the computa tion of the proposed FY 2011 national capital

Federal rate in comparison to the FY 2010 na tional capital Federal rate. The proposed FY 2011

update factor has the effect of increasing the proposed capital Federa l rate by 1.5 percent

compared to the FY 2010 capital Federal rate. The proposed GAF/DRG budget neutrality factor

of 1.000 has no net effect on the proposed capita l Federal rate. The proposed FY 2011 outlier

adjustment factor has the effect of decreasing the proposed capital Federal rate by 0.54 percent

compared to the FY 2010 capital Federal rate . The proposed FY 2011 exceptions payment

adjustment factor has the effect of decreasing the proposed capital Federal rate by 0.01 percent

compared to the FY 2010 capital Federal rate. Fu rthermore, as shown in the chart below, the

resulting cumulative adjustment for changes in documentation and coding that do not reflect real

changes in patients’ severity of illness (that is, the proposed cu mulative adjustment factor of

0.957 has the net effect of decreasing the proposed FY 2011 national capital Federal rate by 2.8

percent as compared to the FY 2010 national capit al Federal rate. (As discussed in section

VI.E.1. of the preamble of this proposed rule, a cumulative adjustment of -1.5 percent (that is,

the -0.6 percent in FY 2008 and -0.9 percent in FY 2009) or a cumulative adjustment factor of

0.985 has already been applied to the FY 2010 capita l Federal rate for changes in documentation

and coding that do not reflect real changes in patie nts’ severity of illness. We did not apply any

additional documentation a nd coding adjustment to the capita l Federal rate in FY 2010). The

combined effect of all the proposed change s would decrease the proposed national capital

Federal rate by approximately 1.93 percent co mpared to the FY 2010 national capital Federal

rate.CMS-1498-P 773

Comparison of Factor s and Adjustments: FY 2010 Capital Federal Rate and Proposed FY 2011 Capital Federal Rate

FY 2010 Proposed FY 2011 Change Percent Change Update Factor 1 1.0120 1.0150 1.0150 1.50 GAF/DRG Adjustment Factor 1 0.9990 1.0000 1.0000 0.00 Outlier Adjustment Factor 2 0.9475 0.9424 0.9946 -0.54 Exceptions Adjustment Factor 2 0.9998 0.9997 0.9999 -0.01 MS-DRG Documentation and Coding Adjustment Factor 0.9850 3 0.9570 4 0.9716 5 -2.84 Capital Federal Rate $429.26 $420.99 0.9807 -1.93

1 The update factor and the GAF/DRG budget neutrality factors are built permanently into the capital rates. Thus, for example, the incremental change from FY 2010 to FY 2011 resulting from the application of the proposed 1.000 GAF/DRG budget neutrality factor for FY 2011 is a net change of 1.00 (zero percent).

2 The outlier reduction factor and the exceptions adjustment factor are not built permanently into the capital rates; that is, t hese factors are not applied cumulatively in determining the capital rates. Thus, for example, the proposed net change resulting from the applicati on of the proposed FY 2011 outlier adjustment factor is 0.9475/0.9424, or 0.9946.

3 The documentation and coding adjustment factor includes the -0.6 percent in FY 2008, -0.9 percent in FY 2009, and no additional reduction in FY 2010.

4 The documentation and coding adjustment factor includes the -0.6 percent in FY 2008, -0.9 percent in FY 2009, no additional red uction in FY 2010 and the proposed -2.9 percent reduction in FY 2011.
5 The change is measured from the FY 2009 cumulative factor of 0.9850.

6. Proposed Special Capital Rate for Puerto Rico Hospitals

Section 412.374 provides for the use of a ble nded payment system for payments to

hospitals located in Puerto Rico under the PPS for acute care hospital inpatient capital-related

costs. Accordingly, under the capital PPS, we compute a separate payment rate specific to

hospitals located in Puerto Rico using the same methodology used to compute the national

Federal rate for capital-related cost s. Under the broad authority of section 1886(g) of the Act, as

discussed in section V. of the preamble of this proposed ru le, beginning with discharges

occurring on or after October 1, 2004, capital paymen ts to hospitals located in Puerto Rico are

based on a blend of 25 percent of the Puerto Rico capital rate and 75 percent of the capital

Federal rate. The Puerto Rico capital rate is deri ved from the costs of Puerto Rico hospitals only,CMS-1498-P 774

while the capital Federal rate is derived from the costs of all acute care hospitals participating in

the IPPS (including Puerto Rico).

To adjust hospitals' capital payments for geog raphic variations in cap ital costs, we apply a

GAF to both portions of the blended capital ra te. The GAF is calculated using the operating

IPPS wage index, and varies depending on the labor market area or rural area in which the

hospital is located. We use the Puerto Rico wage index to determine the GAF for the Puerto

Rico part of the capital-blende d rate and the national wage index to determine the GAF for the

national part of the blended capital rate.

Because we implemented a separate GAF fo r Puerto Rico in FY 1998, we also apply

separate budget neutrality adjustments for the national GAF and for the Puerto Rico GAF.

However, we apply the same bud get neutrality factor for DRG r eclassifications and recalibration

nationally and for Puerto Rico. The proposed national GAF budget neutrality factor is 1.0004

and the proposed DRG adjustment is 0.9992, for a combined cumulative adjustment of 0.9965.

In computing the payment for a particular Puerto Rico hospital, the Puerto Rico portion

of the capital rate (25 percent) is multiplied by th e Puerto Rico-specific GAF for the labor market

area in which the hospital is located, and the national portion of the capital rate (75 percent) is

multiplied by the national GAF for the labor market area in which the hospital is located (which

is computed from national data for all hospitals in the United States and Puerto Rico). In

FY 1998, we implemented a 17.78 percen t reduction to the Puerto Rico capital rate as a result of

Pub. L. 105-33. In FY 2003, a small pa rt of that reduction was restored.

For FY 2010, the special capital rate for hosp itals located in Puerto Rico was $203.56 (74

FR 51499). Consistent with our development of the FY 2010 Puerto Rico-specific operating

standardized amount, we have not applied the -0.6 percent adju stment in FY 2008 or the -0.9CMS-1498-P 775

percent documentation and coding adjustment in FY 2009 (that is, the cumulative -1.5 percent

adjustment) that was applied to the national capital Federal rate to the Puerto Rico-specific

capital rate. However, we noted in the FY 2009 IPPS final rule (73 FR 48449 through 48550)

that we may propose to apply such an adjustment to the Puerto Rico ope rating and capital rates

in the future.

As noted above and discussed in greater deta il in section V.E.4. of the preamble of this

proposed rule, consistent with our development of the Pu erto Rico-specific operating

standardized amount, we are proposing to apply a -2.4 percent adjustment to account for changes

in documentation and coding that resulted from th e adoption of the MS-DRGs in determining the

proposed FY 2011 Puerto Rico-specific capital rate. With the changes we are proposing to make

to the other factors used to determine the cap ital rate, the proposed FY 2011 special capital rate

for hospitals in Puerto Rico is $199.43.

B. Calculation of the Propos ed Inpatient Capital- Related Prospective Payments for FY 2011

Because the 10-year capital PPS transition period ended in FY 2001, all hospitals (except

"new" hospitals under §412.324(b) and under §412.304( c)(2)) are paid based on 100 percent of

the capital Federal rate in FY 2011.

For purposes of calculating payments for each discharge during FY 2011, the capital

standard Federal rate is adjusted as follows: (Standard Federal Rate) x (DRG weight) x (GAF) x

(COLA for hospitals located in Alaska and Ha waii) x (1 + DSH Adjustment Factor + IME

Adjustment Factor, if applicable). The result is the adjusted capital Federal rate.

Hospitals also may receive outlier payments for those cases that qualify under the

thresholds established for each fiscal year. Section 412.312(c) provides for a single set of

thresholds to identify outlier cases for both i npatient operating and i npatient capital-relatedCMS-1498-P 776

payments. The proposed outlier thresholds for FY 2011 are in section II.A. of this Addendum.

For FY 2011, a case would qualify as a cost outlier if the cost for the case plus the (operating)

IME and DSH payments is greater than the pros pective payment rate for the MS-DRG plus the

fixed-loss amount of $23,970.

An eligible hospital may also qualify for a special exceptions payment under §412.348(g)

up through the 10 th year beyond the end of the capital tran sition period if it meets the following

criteria: (1) a project need requirement descri bed at §412.348(g)(2), which in the case of certain

urban hospitals includes an excess capacity test as described at §412.348(g)(4); and (2) a project

size requirement as described at §412.348(g)(5). Eligible hospitals include SCHs, urban

hospitals with at least 100 beds that have a DS H patient percentage of at least 20.2 percent or

qualify for DSH payments under §412.106(c)(2), and hospitals that have a combined Medicare

and Medicaid inpatient utilization of at least 70 percent. U nder §412.348(g)(8), the amount of a

special exceptions payment is determined by comparing the cumulative payments made to the

hospital under the capital PPS to the cumulative minimum payment level. This amount is offset

by: (1) any amount by which a hospital's cumulative capital payments exceed its cumulative

minimum payment levels applicable under the re gular exceptions process for cost reporting

periods beginning during which the hospital has been subject to the capital PPS; and (2) any

amount by which a hospital's current year opera ting and capital payments (excluding 75 percent

of operating DSH payments) exceed its operatin g and capital costs. Under §412.348(g)(6), the

minimum payment level is 70 percent for all eligible hospitals. We note that this was a 10-year

provision. Therefore, FY 2012 is the final year hospitals will be eligible for the special

exceptions payment.CMS-1498-P 777

Currently, as provided in §412.304(c)(2), we pay a new hospital 85 percent of its

reasonable costs during the first 2 years of opera tion unless it elects to receive payment based on

100 percent of the capital Federal rate. Effective with the third year of operation, we pay the

hospital based on 100 percent of th e capital Federal rate (that is, the same methodology used to

pay all other hospitals subject to the capital PPS).

C. Capital Input Price Index

1. Background

Like the operating input price index, the capita l input price index (CIPI) is a fixed-weight

price index that measures the price changes associated with capital costs during a given year.

The CIPI differs from the operating input price in dex in one important aspect--the CIPI reflects

the vintage nature of capital, which is the acquisition and use of capital over time. Capital

expenses in any given year are determined by the stock of capital in that year (that is, capital that

remains on hand from all current and prior capital acquisitions). An index measuring capital

price changes needs to reflect this vintage nature of capital. Therefore, the CIPI was developed

to capture the vintage nature of capital by us ing a weighted-average of past capital purchase

prices up to and including the current year.

We periodically update the base year for th e operating and capital input price indexes to

reflect the changing composition of inputs for operating and capital expenses. In the FY 2010

IPPS final rule (74 FR44021), we rebased and revised the CIPI to a FY 2006 base year to reflect

the more current structure of capital costs in hospitals. A complete discussion of this rebasing is

provided in section IV. of the preamble of that final rule.CMS-1498-P 778

2. Forecast of the CIPI for FY 2011

Based on the latest forecast by IHS Global Insight, Inc. (first quarter of 2010), we are

forecasting the FY 2006-based CIPI to increase 1.2 percent in FY 2011. This reflects a projected

1.8 percent increase in vintage-weighted depreciat ion prices (building and fixed equipment, and

movable equipment), and a 1.9 percent increase in other capital expense prices in FY 2011,

partially offset by 1.9 percent decline in vintage-weighted interest expenses in FY 2011. The

weighted average of these three factors produces the 1.2 percent increase for the FY 2006-based

CIPI as a whole in FY 2011.

IV. Proposed Changes to Payment Rates for Excluded Hospitals: Rate-of-Increase

Percentages

Historically, hospitals and hospital units excluded from the prospective payment system

received payment for inpatient hospital services they furnished on the basis of reasonable costs,

subject to a rate-o f-increase ceiling. An annu al per discharge limit (the target amount as defined

in §413.40(a)) was set for each hospital or hosp ital unit based on the hospital’s own cost

experience in its base year, a nd updated annually by a rate-of-inc rease percentage. The updated

target amount for that period was multiplied by the Medicare discharges during that period and

applied as an aggregate uppe r limit (the ceiling as defined in §413.40(a)) on total inpatient

operating costs for a hospital’s cost reporting pe riod. Prior to October 1, 1997, these payment

provisions applied consistently to all categories of excluded providers (rehabilitation hospitals

and units (now referred to as IRFs), psychiatric hospitals and units (now referred to as IPFs),

LTCHs, children’s hospitals, and cancer hospitals).

Payments for services furnished in children’s hospitals and cancer hospitals that are

excluded from the IPPS continue to be subject to the rate-of-increase ceiling based on theCMS-1498-P 779

hospital’s own historical cost experience. (We note that, in accordance with §403.752(a),

RNHCIs are also subject to the rate-of- increase limits established under §413.40 of the

regulations.)

We are proposing that the FY 2011 rate-of-increase percentage for updating the target

amounts for cancer and children’s hospitals and R NHCIs be the estimated percentage increase in

the FY 2011 IPPS operating market basket, estimated to be 2.4 percent, using the most recent

data available based on IH S Global Insight, Inc.'s first quarter 2010 forecast, with historical data

through the 2009 fourth quarter. (We are proposin g to use more recent data when determining

the estimated percentage increase for the FY 2011 IPPS operating market basket for the final

rule, to the extent these data are available.)

IRFs, IPFs, and LTCHs were previously paid under the reasonable cost methodology.

However, the statute was amended to provide for the implementation of prospective payment

systems for IRFs, IPFs, and LTCHs. In general, the prospective payment systems for IRFs, IPFs,

and LTCHs provide transitioning periods of va rying lengths of time during which a portion of

the prospective payment is based on cost-bas ed reimbursement rule s under 42 CFR Part 413

(certain providers do not receive a transitioning period or may elect to bypass the transition as

applicable under 42 CFR Part 412, Subparts N, O, and P.) We note that all of the various

transitioning periods provided for under the IRF PPS, the IPF PPS, and the LTCH PPS have

ended.

The IRF PPS, the IPF PPS, and the LTCH PPS are updated annually. We refer readers to

section VII. of the preamble and section V. of the Addendum to this proposed rule for the

proposed update changes to the Federal payment rates for LTCHs under the LTCH PPS for RYCMS-1498-P 780

2011. The annual updates for the IRF PPS and the IPF PPS are issued by the agency in separate

Federal Register documents.

V. Proposed Changes to the Payment Rates for the LTCH PPS for FY 2011

A. Proposed LTCH PPS Standard Federal Rate for FY 2011

1. Background

In section VII. of the preamble of this pr oposed rule, we discuss our proposed changes to

the payment rates, factors, and specific policies under the LTCH PPS for FY 2011. We note that

on March 23, 2010, the Patient Protection and Af fordable Care Act, Pub. L. 111-148, was

enacted. Following the enactment of Pub. L. 111-148, the Health Care and Education

Reconciliation Act of 2010, P ub. L. 111-152 (enacted on March 30, 2010), amended certain

provisions of Pub. L. 111-148. A number of th e provisions of Pub. L. 111-148, as amended by

Pub. L. 111-152, affect the IPPS and the LTCH PPS and the providers and suppliers addressed in

this proposed rule. However, due to the timing of the passage of the legisl ation, we are unable to

address those provisions in this proposed rule. Therefore, the proposed policies and payment

rates in this proposed rule do not reflect the new legislation. We plan to issue separate

documents in the Federal Register addressing the provisions of Pub. L. 111-148, as amended,

that affect our proposed policies and payment rates for FY 2011 under the IPPS and the LTCH

PPS. In addition, we plan to issue further inst ructions implementing the provisions of Pub. L.

111-148, as amended, that affect the policies and payment rates for FY 2010 under the IPPS and

for RY 2010 under the LTCH PPS.

At §412.523(c)(3)(ii) of the regulations, for LTCH PPS rate years beginning RY 2004

through RY 2006, we updated the standard Federal ra te by a factor to adjust for the most recent

estimate of the increases in prices of an appropr iate market basket of goods and services forCMS-1498-P 781

LTCHs. We established that po licy of annually updating the stan dard Federal rate because, at

that time, we believed that was the most appropriate method for updating the LTCH PPS

standard Federal rate annually for years after the initial implementation of the LTCH PPS in

FY 2003. Under §412.523(c)(3)(ii), for RYs 2004 th rough 2006, the annual update to the LTCH

PPS standard Federal rate was equal to the previous rate year’s Federal rate updated by the most

recent estimate of increases in th e appropriate market basket of goods and services included in

covered inpatient LTCH services.

In determining the annual update to the st andard Federal rate for RY 2007, based on our

ongoing monitoring activity, we believed that, ra ther than solely using the most recent estimate

of the LTCH PPS market basket as the basis of th e update factor, it was appropriate to adjust the

standard Federal rate to account for the changes in documentation and coding practices in a prior

period that were unrelated to patient severity of illness (71 FR 27818). Accordingly, we

established regulations at §412.523(c )(3)(iii) to specify that the update to the standard Federal

rate for RY 2007 is zero percent based on th e most recent estimate of the LTCH PPS market

basket at the time, offset by an adjustment to account for changes in case-mix in prior periods

due to changes in documentation and coding that were unrelated to patient severity of illness in

FY 2004. For RYs 2008 through 2010, we also considered changes in documentation and

coding practices that were unrelated to patient severity of illness in establishing the annual

update to the standard Federal ra te as set forth in the regulations at §§412.523(c)(3)(iv) through

(c)(3)(vi). (We note that section 114(e)(1) of P ub. L. 110-173 provided that the standard Federal

rate for RY 2008 shall be the same as the standard Federal rate for RY 2007. In addition, section

114(e)(2) of Pub. L. 110-173 specified that the re vised standard Federal rate provided for under

section 114(e)(1) "shall not apply to discharges occurring on or after July 1, 2007, and beforeCMS-1498-P 782

April 1, 2008," effectively resulting in a delay of th e application of the updated standard Federal

rate for RY 2007 established in the RY 2008 LTCH PPS final rule (72 FR 26890).) Consistent

with our historical practice, in the RY 2010 LTCH PPS final rule, we established an annual

update to the standard Federal ra te for RY 2010 based on the most re cent estimate of the increase

in the LTCH PPS market basket at that time (2.5 percent and an adjustment of -0.5 percent to

account for the increase in case-mix in a prior pe riod (FY 2007) due to changes in documentation

and coding practices unrelated to an increase in patient severity of illness (74 FR 44022)).

Accordingly, we established regulations at §412.5 23(c)(3)(vi) to specify that the update to the

standard Federal rate fo r RY 2010 is 2.0 percent.

2. Development of the Proposed FY 2011 LTCH PPS Standard Federal Rate

While we continue to believe that an update to the LTCH PPS standard Federal rate

should be based on the most recent estimate of th e increase in the LTCH PPS market basket, we

also believe it is appropria te that the standard Federal rate be offset by an adjustment to account

for any changes in documentation and coding pr actices that do not reflect increased patient

severity of illness. Such an adjustment protect s the integrity of the Medicare Trust Funds by

ensuring that the LTCH PPS payment rates better reflect the true costs of treating LTCH patients.

Furthermore, as we discussed most recently in the FY 2010 IPPS/RY 2010 LTCH PPS final rule

(74 FR 44022), we did not establish a case-mix budg et neutrality factor (that is, a documentation

and coding adjustment for changes in case-mix that are not due to changes in patient severity of

illness) for the adoption of the severity adjust ed MS-LTC-DRG patient classification system.

Rather, we noted that, consistent with past LTCH payment policy, we would continue to monitor

LTCH data and we could propose to make adjustments when updating the LTCH PPS standard

Federal rate in the future to account for change s in documentation and coding that do not reflectCMS-1498-P 783

any real changes in case-mix during these years that we are implementing MS-LTC-DRGs. As

noted above, in the FY 2010 IPPS/RY 2010 LTCH PPS final rule, we applied a -0.5 percent

adjustment to account for the effect of change s in documentation and coding on the increase in

case-mix in FY 2007. Although we proposed a -1.3 percent adjustment to account for the effect

of changes in documentation and coding on the in crease in case-mix in FY 2008, in the final rule

after consideration of public comments and consistent with IPPS policy, we delayed the

application of that adjustment (74 FR 43970 through 43972).

For FY 2011, for this proposed rule as discu ssed in greater detail in section VII.C.3. of

the preamble of this proposed rule, we performed a CMI analysis using the most recent available

LTCH claims data (FY 2009) under both the cu rrent MS-LTC-DRG and the former CMS LTCDRG patient classification system s. Based on this evaluation, we determined that there was a

cumulative increase in LTCH CMI of 2.5 percent due to changes in documentation and coding

that did not reflect real changes in patient seve rity of illness for LTCH discharges occurring in

FY 2008 and FY 2009. At this time, the most recen t estimate of the increase in the proposed

LTCH PPS market basket (that is, the FY 2002-based RPL market basket) for FY 2011 is

2.4 percent, as discussed in section VII.B.2. of the preamble of this proposed rule. Consistent

with our historical practice, in this proposed rule, we are proposing to update the LTCH PPS

standard Federal rate for FY 2011 based on the full proposed LTCH PPS market basket increase

estimate of 2.4 percent and an adjustment to acco unt for the increase in case-mix in a prior

periods (FYs 2008 and 2009) that resulted from ch anges in documentation and coding practices

of -2.5 percent. The proposed update factor to the standard Federal rate for FY 2011 is –0.1

percent (that is, we are proposing to apply a factor of 0.999 in determining the LTCH PPS

standard Federal rate for FY 2011, calculat ed as 1.024 x 1 divided by 1.025 = 0.999 or -0.1CMS-1498-P 784

percent). Therefore, in this proposed ru le, under the broad authority conferred upon the

Secretary under the BBRA and the BIPA to determine appropriate updates under the LTCH PPS,

we are proposing to amend §412.523 to add a new paragraph (c)(3)(vii) to specify that the

standard Federal rate for discharges occurri ng on or after October 1, 2010, through September

30, 2011, is the standard Federal rate for the prev ious rate year updated by -0.1 percent. In

determining the proposed standard Federal rate for FY 2011, we are applying the proposed 0.999

update factor to the RY 2010 Federal rate of $39,896.65 (as established in the FY 2010

IPPS/RY 2010 LTCH PPS final rule (74 FR 44022)). Consequently, the proposed standard

Federal rate for FY 2011 is $39,856.75. We also are proposing that if more recent data become

available, we would use those data, if appropr iate, to determine the update to the standard

Federal rate for FY 2011 in the final rule, and, thus , the standard Federal rate update specified in

the proposed regulation text at §412.523(c)(3)(vii) could change accordingly.

B. Proposed Adjustment for Area Wage Levels under the LTCH PPS for FY 2011

1. Background

Under the authority of section 123 of the BBRA as amended by section 307(b) of the

BIPA, we established an adjustment to the LTCH PPS standard Federal rate to account for

differences in LTCH area wage levels at §412.52 5(c). The labor-related share of the LTCH PPS

standard Federal rate is adjusted to account fo r geographic differences in area wage levels by

applying the applicable LTCH PPS wage index. The applicable LTCH PPS wage index is

computed using wage data from inpatient acute ca re hospitals without regard to reclassification

under section 1886(d)(8) or sec tion 1886(d)(10) of the Act.

As we discussed in the August 30, 2002 LTCH PPS final rule (67 FR 56015), when we

implemented the LTCH PPS, we established a 5-year transition to the full wage indexCMS-1498-P 785

adjustment. The wage index adjustment was co mpletely phased in for cost reporting periods

beginning in FY 2007. Therefore, for cost reporting periods beginning on or after

October 1, 2006, the applicable LTCH wage inde x values are the full (five-fifths) LTCH PPS

wage index values calculated based on acute car e hospital inpatient wage index data without

taking into account geographic reclassificati on under section 1886(d)(8) and section 1886(d)(10)

of the Act. For additional information on the phase-in of the wage index adjustment under the

LTCH PPS, we refer readers to the August 30, 2002 LTCH PPS final rule (67 FR 56017 through

56019) and the RY 2008 LTCH PPS final rule (72 FR 26891).

2. Proposed Updates to the Geographic Cla ssifications/Labor Mark et Area Definitions

a. Background

As discussed in the August 30, 2002 LTCH PPS final rule, which implemented the LTCH

PPS (67 FR 56015 through 56019), in establishing an adjustment for area wage levels, the

labor-related portion of a LTCH's Federal prospective payment is adjusted by using an

appropriate wage index based on the labor market area in which the LTCH is located.

Specifically, the application of the LTCH PPS wage index adjustment at §412.525(c) is made on

the basis of the location of the LTCH in either an urban area or a rural area as defined in

§412.503. Currently under the LTCH PPS at §412.503, an “urban area” is defined as a

Metropolitan Statistical Area (which would includ e a metropolitan division, where applicable) as

defined by the Executive OMB and a “rural area” is defined as any area outside of an urban area.

In the RY 2006 LTCH PPS final rule (70 FR 24184 through 24185), in regulations at

§412.525(c), we revised the labor market area definitions used under the LTCH PPS effective for

discharges occurring on or after July 1, 2005, based on the Executive OMB's CBSA

designations, which are based on 2000 Census data. We made this revision because we believeCMS-1498-P 786

that the CBSA-based labor market area definitions will ensure that the LTCH PPS wage index

adjustment most appropriately ac counts for and reflects the relativ e hospital wage levels in the

geographic area of the hospital as compared to the national average hospital wage level. We

note that these are the same CBSA-based desi gnations implemented for acute care hospitals

under the IPPS at §412.64(b), effective October 1, 2004 (69 FR 49026 through 49034). (For

further discussion of the CBSA-based labor market area (geographic cla ssification) definitions

currently used under the LTCH PPS, we refer readers to the RY 2006 LTCH PPS final rule

(70 FR 24182 through 24191).) We have updated the LTCH PPS CBSA-based labor market area

definitions annually since they were adopt ed for RY 2006 (73 FR 26812 through 26814, and 74

FR 44023 through 44204).

b. Update to the CBSA-Based Labor Ma rket Area Titles and Principal Cities

On December 1, 2009, the Executive OMB announ ced changes to the principal cities and

titles of a number of CBSAs and Metropolitan Divisions (OMB Bu lletin No. 10-02). Under the

broad authority conferred upon the Secretary by section 123 of the BBRA, as amended by

section 307(b) of BIPA, to determine appropr iate adjustments under the LTCH PPS, we update

our titles and definitions using the Executive OMB’s bulletin. These changes are effective for

discharges occurring on or after October 1, 2010.

Specifically, for FY 2011, the following CBSA s have new titles and ne w principal cities:

● San Marcos, TX qualifies as a new pr incipal city of the Austin-Round Rock, TX

CBSA. The new title is Austin-Round Rock-S an Marcos, TX CBSA (CBSA Code 12420).

● Delano, CA qualifies as a ne w principal city of the Bakersfield, CA CBSA. The new

title: Bakersfield-Delano, CA CBSA (CBSA Code 12540).CMS-1498-P 787

● Conroe, TX qualifies as a new principal city of the Houston-Sugar Land-Baytown, TX

CBSA (CBSA Code 26420). The CBSA title is unchanged.

● North Port, FL qualifies as a new principa l city of the Bradenton-Sarasota-Venice, FL

CBSA (currently CBSA Code 14600). The new title is North Port-Bra denton-Sarasota, FL

CBSA. The new code is CBSA 35840.

● Sanford, FL qualifie s as a new principal city of the Orlando-Kissimmee, FL CBSA

(CBSA Code 36740). The new title is Orlando-Kissimmee-Sa nford, FL CBSA.

● Glendale, AZ qualifies as a new principa l city of the Phoenix-Mesa-Scottsdale, AZ

CBSA. The new title is Phoenix-Mesa -Glendale, AZ CBSA (CBSA Code 38060).

● Palm Desert, CA qua lifies as a new principal city of the Riverside-San BernardinoOntario, CA CBSA (CBSA Code 40140) . The CBSA title is unchanged.

● New Braunfels, TX qualifies as a new pr incipal city of the San Antonio, TX CBSA.

The new title is San Antonio-New Braunfels, TX CBSA (CBSA Code 41700).

● Auburn, WA qualifies as a new principal city of the Seattle-Tacoma-Bellevue, WA

CBSA (CBSA Code 42644). The CBSA title is unchanged.

In addition, the following CBSAs have new titles as a result of changes to the order of

principal cities ba sed on population:

● Rockville, MD replaces Frederick, MD as the second most populous principal city in

the Bethesda-Frederick-Rockville, MD Metropo litan Division. The new title is BethesdaRockville-Frederick, MD Metropo litan Division (CBSA Code 13644).

● Rock Hill, SC replaces Concord, NC as th e third most populous principal city in the

Charlotte-Gastonia-Concord, NC-SC CBSA. The ne w title is Charlotte-Gastonia-Rock Hill, NCSC CBSA (CBSA Code 16740).CMS-1498-P 788

● Joliet, IL replaces Naperville, IL as th e second most populous principal city in the

Chicago-Naperville-Joliet, IL Metropolitan Divisi on. The new title is Ch icago-Joliet-Naperville,

IL Metropolitan Division (CBSA Code 16974).

● Crestview, FL replaces Fort Walton Beach, FL as the most populous principal city in

the Fort Walton Beach-Crestview-Destin, FL CB SA (currently CBSA Code 23020). The new

title is Crestview-Fort Wa lton Beach-Destin, FL CB SA. The new code is 18880.

● Hillsboro, OR replaces Beaver ton, OR as the third most populous principal city in the

Portland-Vancouver -Beaverton, OR-WA CBSA. The new title is Portland- Vancouver-Hillsboro,

OR-WA CBSA (CBSA Code 38900).

● Steubenville, OH replaces Weirton, WV as the most populous principal city in the

Weirton-Steubenv ille, WV-OH CBSA (currently CBSA Code 48260). The new title is

Steubenville-Weirton, OH-WV CBSA. The new CBSA code is 44600.

OMB Bulletin No. 10-02 is available on the OMB Web site at

http://www.whitehouse.gov/OMB - go to “Bulletins” or “Statis tical Programs and Standards.”

The proposed FY 2011 LTCH PPS wage index values presented in Tables 12A and 12B

in the Addendum of this proposed rule reflect th e revisions to the CBSA-based labor market area

titles and codes de scribed above.

3. Proposed LTCH PPS Labor-Related Share

As noted above in this section, under the adjus tment for difference in area wage levels at

§412.525(c), the labor-related share of a LTCH’s PPS Federal prospective payment is adjusted

by the applicable wage index for the labor market area in which the LTCH is located. The

LTCH PPS labor-related share represents the sum of the labor-related portion of operating costs

(wages and salaries, employee be nefits, professional fees, and a ll other labor-intensive services)CMS-1498-P 789

and a labor-related portion of capital costs using the applicable LTCH PPS market basket.

Currently, as established in the RY 2007 LTCH PPS final rule (71 FR 27829 through 27830), the

LTCH PPS labor-related share is based on the relative importance of the labor-related share of

operating costs and capital costs of the rehabilitation psychiatric long-term care (hospital) (RPL)

market basket based on FY 2002 data, as they are the best available data that reflect the cost

structure of LTCHs. For the past 3 ye ars (RYs 2008, 2009, and 2010), we updated the LTCH

PPS labor-related share annually base d on the latest available data for the RPL market basket.

For RY 2010, the labor-related share is 75.779 percent, as established in the RY 2010 LTCH

PPS final rule (74 FR 43968 and 44024). (Additional background information on the historical

development of the labor-related share under the LTCH PPS and the development of the RPL

market basket can be found in the RY 2007 LTCH PPS final rule (71 FR 27810 through 27817

and 27829 through 27830) and the RY 2010 LTCH PPS final rule (74 FR 43968).)

As discussed in greater detail in section VII. C.2.d. of the preamble of this proposed rule,

we are proposing to use IHS Global Insight, Inc.’s first quarter 2010 forecast of the

FY 2002-based RPL market basket for FY 2011 to determine the proposed labor-related share

for the LTCH PPS for FY 2011 that would be effective for discharges occurring on or after

October 1, 2010, and through September 30, 2011, as these are the most recent available data.

The proposed labor-related share for FY 2011 would be the sum of the proposed FY 2011

relative importance of each labor-related cost categ ory, and would reflect the different rates of

price change for these cost categories between the base year (FY 2002) and FY 2011. The sum

of the proposed relative importance for FY 2011 for operating costs (wages and salaries,

employee benefits, professiona l fees, and all-other labor-int ensive services) would be 71.537

percent and the labor-related shar e of capital costs would be 3.870 percent. Thus, the labor-CMS-1498-P 790

related share that we are proposing to use for LTCH PPS in FY 2011 would be 75.407 percent

(71.537 percent + 3.870 percent), as shown in the char t in section VII.C.2.d. of the preamble of

this proposed rule.

Accordingly, under the authority set forth in section 123 of the BBRA as amended by

section 307(b) of the BIPA, we are proposing to establish a labor-related share of 75.407 percent

under the LTCH PPS for the FY 2011. Furthermore, consistent with our historical practice of

using the best data available, we also are propos ing that if more recent data are available to

determine the labor-related share used under the LTCH PPS for FY 2011, we would use these

data for determining the FY 2011 LTCH PPS labor-related share in the final rule.

4. Proposed LTCH PPS Wage Index for FY 2011

Historically, under the LTCH PPS, we have established LTCH PPS wage index values

calculated from acute care IPPS hospital wage data without taking into account geographic

reclassification under sections 1886(d)(8) and 1886( d)(10) of the Act (67 FR 56019). The wage

adjustment established under the LTCH PPS is based on a LTCH's actual location without regard

to the urban or rural designation of any related or affiliated provider.

In the RY 2010 LTCH PPS final rule (74 FR 44024 through 44026), we calculated the

LTCH PPS wage indices using the same data used for the FY 2010 acute care hospital IPPS (that

is, data from cost reporting periods beginning during FY 2006), without taking into account

geographic reclassification under sections 1886(d)(8) and 1886(d)(10) of the Act.

To determine the applicable wage index values under the LTCH PPS for FY 2011, under

the broad authority conferred upon the Secretary by section 123 of the BBRA, as amended by

section 307(b) of BIPA, to determine appropria te adjustments under the LTCH PPS, consistent

with our historical methodology, we are proposing to use wage data collected from cost reportsCMS-1498-P 791

submitted by IPPS hospitals for cost reporting periods beginning during FY 2007, without taking

into account geographic reclassification under s ections 1886(d)(8) and 1886(d)(10) of the Act,

because these data (FY 2007) are the most recent complete data available at this time. These are

the same data used to compute the proposed FY 2011 acute care hospital inpatient wage index,

as discussed in section III. of the preamble of this proposed rule. For our rationale for using

IPPS hospital wage data as a proxy for determining the wage index values used under the LTCH

PPS, we refer readers to the FY 2010 IPPS/RY 2010 LTCH PPS final rule (74 FR 44024 through

44025).

The proposed FY 2011 LTCH PPS wage index values are computed consistent with the

urban and rural geographic classi fications (labor market areas) di scussed above in section V.B.2.

of the Addendum of this proposed rule and consis tent with the pre-reclassified IPPS wage index

policy (that is, our historical policy of not taki ng into account IPPS geographic reclassifications

in determining payments under the LTCH PPS). We also note that, as with the IPPS wage data,

wage data for multicampus hospitals with campuses located in different labor market areas

(CBSAs) are apportioned to each CBSA where the campus or campuses are located (discussed in

section III.C. of the preamble of this proposed rule ). We also would continue to use our existing

policy for determining wage index values in areas where there are no IPPS wage data.

We established a methodology for determining a LTCH PPS wage index values for areas

that have no IPPS wage data in the RY 2009 LTCH PPS final rule, and we are proposing to use

this methodology for FY 2011. (We refer readers to 73 FR 26817 through 26818 for an

explanation of and rationale for our policy.) Under this methodology, the LTCH PPS wage

index value for urban CBSAs with no IPPS wage data is determined by using an average of all of

the urban areas within the State. As was the case in RY 2010, there are currently no LTCHsCMS-1498-P 792

located in labor areas without IPPS hospital wage data (or IPPS hospitals) for FY 2011.

However, we calculate LTCH PPS wage index values for these areas using our established

methodology in the event that, in the future, a LTCH should open in one of those areas.

Based on the current FY 2007 IPPS wage data that we are proposing to use to determine

the proposed FY 2011 LTCH PPS wage index values, there are no IPPS wage data for the urban

area of Anderson, SC (CBSA 11340) and Hi nesville-Fort Stewart, GA (CBSA 25980).

Consistent with the methodology discussed a bove, we calculated the proposed FY 2011 wage

index value for CBSA 11340 as the average of th e proposed wage index values for all of the

other urban areas within the State of South Carolina (that is, CBSAs 12260, 16700, 16740,

17900, 22500, 24860, 34820, 34820, 43900 and 44940) (reflected in Table 12A of the

Addendum of this proposed rule). Similarly, for CBSA 25980 as the average of the proposed

wage index values for all of the other urban ar eas within the State of Georgia (that is, CBSAs

10500, 12020, 12060, 12260, 15260, 16860, 17980, 19140, 23580, 31420, 40660, 42340, 46660

and 47580) (reflected in Table 12A of the Addend um of this proposed rule). (As noted above,

there are currently no LTCHs located in CBSA 11340 or CBSA 25980.) As discussed in the

RY 2009 final rule (73 FR 26817), as IPPS wage data are dynamic, it is possible that urban areas

without IPPS wage data will vary in the future.

For FY 2011, using our established methodolog y, we calculated a LTCH PPS wage index

value for rural areas with no IPPS wage data using the unweighted average of the wage indices

from all of the CBSAs that are contiguous to the ru ral counties of the State (for an explanation of

this policy, we refer readers to 73 FR 26818). For this purpose, we define "contiguous" as

sharing a border.CMS-1498-P 793

Based on the FY 2007 IPPS wage data, there are no IPPS wage data for the rural area of

Massachusetts (CBSA code 22). Consistent with the methodology discussed above, the

proposed FY 2011 wage index value for rural Mass achusetts is computed using the unweighted

average of the wage indices from all of the CBSAs contiguous to the rural counties in that State.

Specifically, the entire Massachusetts rural area co nsists of Dukes and Na ntucket counties. The

borders of Dukes and Nantucke t counties are “contiguous” with Barnstable County, MA, and

Bristol County, MA. Therefore, the proposed FY 2011 LTCH PPS wage index value for rural

Massachusetts is computed as the unweighted average of the proposed FY 2011 wage indexes

for Barnstable County and Bristol County (reflect ed in Tables 12A and 12B in the Addendum of

this proposed rule). (There are currently no LTCHs located in rural Massachusetts.) As

discussed in the RY 2009 final rule (73 FR 26817), as IPPS wage data are dynamic, it is possible

that rural areas without IPPS wage data will vary in the future.

The proposed FY 2011 LTCH wage index values that would be applicable for LTCH

discharges occurring on or after October 1, 2010, through September 30, 2011, are presented in

Table 12A (for urban areas) and Table 12B (for rural areas) in the Addendum of this proposed

rule.

5. Proposed LTCH PPS Cost-of-Living Adjustment for LTCHs Located in Alaska and Hawaii

In the August 30, 2002 final rule (67 FR 56022), we established, under §412.525(b), a

cost-of-living adjustment (COLA) for LTCHs loca ted in Alaska and Hawaii to account for the

higher costs incurred in those States. In the RY 2010 LTCH PPS final rule (74 FR 44026)

(under the broad authority conferred upon the Secr etary by section 123 of the BBRA as amended

by section 307(b) of BIPA to determine appr opriate adjustments under the LTCH PPS), for RYCMS-1498-P 794

2010, we applied a COLA to payments to LTCHs located in Alaska and Hawaii by multiplying

the standard Federal payment rate by the fact ors listed in Table III of that same rule.

For FY 2011, under the broad authority conf erred upon the Secretary by section 123 of

the BBRA, as amended by section 307(b) of BI PA, to determine approp riate adjustments under

the LTCH PPS, we are proposing to apply a COLA to payments to LTCHs located in Alaska and

Hawaii by multiplying the proposed standard Federa l payment rate by the factors listed in the

chart below because they are the most recent ava ilable data at this time. These proposed factors

were obtained from the U.S. Office of Personnel Management (OPM) and are also proposed to

be used under the IPPS effective October 1, 2010 (section II.B.2. of the Addendum of this

proposed rule). We note that there has been no change in the COLA factors since the current

factors were established in the RY 2010 LTCH PPS final rule. In addition, we are proposing that

if OPM releases revised COLA factors before pu blication of the final rule, we would use the

revised factors for the development of LTCH PPS payments for FY 2011 and publish those

revised COLA factors in the final rule.

Proposed Cost-of-Living Adju stment Factors for Alaska and Hawaii Hospitals for the LTCH PPS for FY 2011

Alaska: City of Anchorage and 80-kilometer (50-mile) radius by road 1.23 City of Fairbanks and 80-k ilometer (50-mile) radius by road 1.23 City of Juneau and 80-k ilometer (50-mile) radius by road 1.23 All other areas of Alaska 1.25 Hawaii: City and County of Honolulu 1.25 County of Hawaii 1.18 County of Kauai 1.25 County of Maui and County of Kalawao 1.25CMS-1498-P 795

C. Proposed Adjustment for LTCH PPS High-Cost Outlier (HCO) Cases

1. Background

Under the broad authority conferred upon the Secretary by section 123 of the BBRA as

amended by section 307(b) of BIPA, in the regulations at §412.525(a), we established an

adjustment for additional payments for outlier cases that have extraordinarily high costs relative

to the costs of most discharges. We refer to these cases as high cost outliers (HCOs). Providing

additional payments for outliers strongly improve s the accuracy of the LTCH PPS in determining

resource costs at the patient a nd hospital level. These additiona l payments reduce the financial

losses that would otherwise be incurred when tr eating patients who require more costly care and,

therefore, reduce the incentives to underserve thes e patients. We set the outlier threshold before

the beginning of the applicable rate year so that total estimated outlier payments are projected to

equal 8 percent of total estimated payments under the LTCH PPS.

Under §412.525(a) in the regulations (in conjunction with §412.503) , we make outlier

payments for any discharges if the estimated cost of a case exceeds the adjusted LTCH PPS

payment for the MS

- LTC-DRG plus a fixed-loss amount. Specifically, in accordance with

§412.525(a)(3) (in conjunction with §412.503), we pay outlier cases 80 percent of the difference

between the estimated cost of the patient case and the outlier threshold, which is the sum of the

adjusted Federal prospective payment for th e MS-LTC-DRG and the fixed-loss amount. The

fixed-loss amount is the amount used to limit the loss that a hospital will incur under the outlier

policy for a case with unusually high costs. This results in Medicare and the LTCH sharing

financial risk in the treatment of extraordinarily costly cases. Under the LTCH PPS HCO policy,

the LTCH's loss is limited to the fixed-loss amount and a fixed percentage of costs above the

outlier threshold (MS-LTC-DRG payment plus the fixed-loss amount). The fixed percentage ofCMS-1498-P 796

costs is called the marginal cost factor. We calculate the estimated cost of a case by multiplying

the Medicare allowable covered charge by the hospital’s overall hospital cost-to-charge ratio

(CCR).

Under the LTCH PPS, we determine a fixed-loss amount, that is, the maximum loss that a

LTCH can incur under the LTCH PPS for a case with unusually high costs before the LTCH will

receive any additional payments. We calculate the fixed-loss amount by estimating aggregate

payments with and without an outlier policy. The fixed-loss amount results in estimated total

outlier payments being projected to be equal to 8 percent of projected total LTCH PPS payments.

Currently, MedPAR claims data and CCRs based on data from the most recent provider specific

file (PSF) (or from the applicable statewide average CCR if a LTCH's CCR data are faulty or

unavailable) are used to establish a fixed-loss threshold amount under the LTCH PPS.

2. Determining LTCH CCRs under the LTCH PPS

a. Background

The following is a discussion of CCRs that are used in determining payments for HCO

and SSO cases under the LTCH PPS, at §412.525(a) and §412.529, respectively. Although this

section is specific to HCO cases, because CCRs a nd the policies and methodologies pertaining to

them are used in determining payments for both HCO and SSO cases (to determine the estimated

cost of the case at §412.529(d)(2)), we are discussing the determination of CCRs under the

LTCH PPS for both of these types of cases simultaneously.

In determining both HCO payments (at §412.525(a)) and SSO payments (at §412.529),

we calculate the estimated cost of the case by multiplying the LTCH's overall CCR by the

Medicare allowable charges for the case. In general, we use the LTCH's overall CCR, which is

computed based on either the most recently settle d cost report or the most recent tentativelyCMS-1498-P 797

settled cost report, whichever is from the late st cost reporting period, in accordance with

§412.525(a)(4)(iv)(B) and §412.529(f)(4)(ii) for HCOs a nd SSOs, respectively. (We note that,

in some instances, we use an alternative CCR, such as the statewide average CCR in accordance

with the regulations at §412.525(a)(4)(iv)(C) and §412.529(f)(4)(iii), or a CCR that is specified

by CMS or that is requested by the hospita l under the provisions of the regulations at

§412.525(a)(4)(iv)(A) and §412.529(f)(4)(i).) Under the LTCH PPS, a single prospective

payment per discharge is made for both inpatient op erating and capital-related costs. Therefore,

we compute a single "overall" or "total" LTCH-specific CCR based on the sum of LTCH

operating and capital costs (as described in Section 150.24, Chapte r 3, of the Medicare Claims

Processing Manual (Pub. 100-4)) as compared to total charges. Specifically, a LTCH's CCR is

calculated by dividing a LTCH's total Medicare costs (that is, the sum of its operating and capital

inpatient routine and ancillary costs) by its total Medicare charges (that is, the sum of its

operating and capital inpatient routine and ancillary charges).

b. LTCH Total CCR Ceiling

Generally, a LTCH is assigned the applicable statewide average CCR if, among other

things, a LTCH's CCR is found to be in excess of the applicable maximum CCR threshold (that

is, the LTCH CCR ceiling). This is because CCRs above this threshold are most likely due to

faulty data reporting or entry, and, therefore, CCRs based on erroneous data should not be used

to identify and make payments for outlier cases. Thus, under our established policy, generally, if

a LTCH's calculated CCR is above the applicable ceiling, the applicable LTCH PPS statewide

average CCR is assigned to the LTCH instead of the CCR computed from its most recent (settled

or tentatively settled) cost report data.CMS-1498-P 798

In the FY 2010 IPPS/RY 2010 LTCH PPS final rule (74 FR 44027), in accordance with

§412.525(a)(4)(iv)(C)(2 ) for HCOs and §412.529(f)(4)(iii)(B) for SSOs, using our established

methodology for determining the LTCH total CCR ceiling, based on IPPS total CCR data from

the March 2009 update of the Provider Specific File (PSF), we established a total CCR ceiling of

1.232 under the LTCH PPS, effective Octobe r 1, 2009, through September 30, 2010. (For

further detail on our current methodology for annually determining the LTCH total CCR ceiling,

we refer readers to the FY 2007 IPPS final rule (71 FR 48119 through 48121).)

In this proposed rule, in accordance with §412.525(a)(4)(iv)(C)(2) for HCOs and

§412.529(f)(4)(iii)(B) for SSOs, using our establis hed methodology for determining the LTCH

total CCR ceiling (described above), based on IPPS total CCR data from the December 2009

update of the PSF, we are proposing to establish a total CCR ceiling of 1.230 under the LTCH

PPS that would be effective for discharges occurring on or after October 1, 2010, through

September 30, 2011.

c. LTCH Statewide Average CCRs

Our general methodology established for determining the statewide average CCRs used

under the LTCH PPS is similar to our established methodology for determining the LTCH total

CCR ceiling (described above) because it is based on "total" IPPS CCR data. Under the LTCH

PPS HCO policy at §412.525(a)(4)(iv)(C) and the SSO policy at §412.529(f)(4)(iii), the fiscal

intermediary may use a statewide average CCR, which is established annually by CMS, if it is

unable to determine an accurate CCR for a LTCH in one of the following circumstances: (1)

new LTCHs that have not yet submitted their first Medicare cost report (for this purpose,

consistent with current policy, a new LTCH is defined as an entity that has not accepted

assignment of an existing hospital's provide r agreement in accordance with §489.18); (2) LTCHsCMS-1498-P 799

whose CCR is in excess of the LTCH CCR ceiling; and (3) other LTCHs for whom data with

which to calculate a CCR are not available (for example, missing or faulty data). (Other sources

of data that the fiscal intermediary may consider in determining a LTCH's CCR include data

from a different cost reporting period for th e LTCH, data from the cost reporting period

preceding the period in which the hospital began to be paid as a LTCH (that is, the period of at

least 6 months that it was paid as a short-term acu te care hospital), or data from other comparable

LTCHs, such as LTCHs in the same chain or in the same region.)

In Table 8C of the Addendum to the FY 2010 IPPS/RY 2010 LTCH PPS final rule

(74 FR 44160 through 44161), in accordance with the regulations at §412.525(a)(4)(iv)(C) for

HCOs and §412.529(f)(4)(iii) for SSOs, using our established methodology for determining the

LTCH statewide average CCRs, based on using th e most recent complete IPPS tota l CCR data

from the March 2009 update of the PSF, we established the LTCH PPS statewide average total

CCRs for urban and rural hospitals effective for discharges occurring on or after October 1,

2009, through September 30, 2010. (For further de tail on our current methodology for annually

determining the LTCH statewide average CCRs, we refer readers to the FY 2007 IPPS final rule

(71 FR 48119 through 48121).)

In this proposed rule, using our establis hed methodology for determining the LTCH

statewide average CCRs, based on the most recent complete IPPS total CCR data from the

December 2009 update of the PSF, we are proposin g to establish LTCH PPS statewide average

total CCRs for urban and rural hospitals that would be effective for discharges occurring on or

after October 1, 2010, through September 30, 2011, in Table 8C of the Addendum to this

proposed rule.CMS-1498-P 800

We also note that all areas in the District of Columbia, New Jersey, Puerto Rico, and

Rhode Island are classified as urban; therefore, there are no rural statewide average total CCRs

listed for those jurisdictions in Table 8C of the Addendum to this proposed rule. This policy is

consistent with the policy that we established when we revised our methodology for determining

the applicable LTCH statewide average CCRs in the FY 2007 IPPS final rule (71 FR 48119

through 48121) and is the same as the policy applied under the IPPS. In addition, although

Massachusetts has areas that are designated as rural, there are no short-term acute care IPPS

hospitals or LTCHs located in those areas as of December 2009. Therefore, for this proposed

rule, there is no rural statewide average total CCR listed for rural Massachusetts in Table 8C of

the Addendum of this proposed rule.

In addition, as we established when we revised our methodology for determining the

applicable LTCH statewide average CCRs in the FY 2007 IPPS final rule (71 FR 48120 through

48121), in determining the urban and rural statewide average total CCRs for Maryland LTCHs

paid under the LTCH PPS, in this proposed rule, we use, as a proxy, the national average total

CCR for urban IPPS hospitals and the national average total CCR for rural IPPS hospitals,

respectively. We use this proxy because we believe that the CCR data on the PSF for Maryland

hospitals may not be entirely accurate (as discussed in greater detail in that same final rule

(71 FR 48120)).

d. Reconciliation of LTCH HCO and SSO Payments

We note that under the LTCH PPS HCO polic y at §412.525(a)(4)(iv)(D) and the LTCH

PPS SSO policy at §412.529(f)(4)(iv), the payments for HCO and SSO cases, respectively, are

subject to reconciliation. Speci fically, any reconciliation of outlier payments is based on the

CCR that is calculated based on a ratio of CCRs computed from the relevant cost report andCMS-1498-P 801

charge data determined at the time the cost report coinciding with the discharge is settled. For

additional information, we refer readers to the RY 2009 LTCH PPS final rule (73 FR 26820

through 26821).

3. Establishment of the Proposed LTCH PPS Fixed-Loss Amount for FY 2011

When we implemented the LTCH PPS, as discussed in the August 30, 2002 LTCH PPS

final rule (67 FR 56022 through 56026), under the broad authority of section 123 of the BBRA

as amended by section 307(b) of BIPA, we established a fi xed-loss amount so that total

estimated outlier payments are proj ected to equal 8 per cent of total estimated payments under the

LTCH PPS. To determine the fixed-loss amount, we estimate outlier payments and total LTCH

PPS payments for each case using claims data from the MedPAR files. Specifically, to

determine the outlier payment for each case, we estimate the cost of the case by multiplying the

Medicare covered charges from the claim by the applicable CCR. Under §412.525(a)(3) (in

conjunction with §412.503), if the es timated cost of the case exceeds the outlier threshold (the

sum of the adjusted Federal prospective pa yment for the MS-LTC-DRG and the fixed-loss

amount), we pay an outlier payment equal to 80 percent of the difference between the estimated

cost of the case and the outlier threshold (the sum of the adjusted Federal prospective payment

for the MS-LTC-DRG and the fixed-loss amount).

In the FY 2010 IPPS/RY 2010 LTCH PPS final rule (74 FR 44028), we used our existing

methodology to calculate the fixed-loss amount for RY 2010 in order to maintain estimated

HCO payments at the projected 8 percent of total estimated LTCH PPS payments. Specifically,

we used LTCH claims data from the Marc h 2009 update of the FY 2008 MedPAR files and

CCRs from the March 2009 update of the PSF to determine a fixed-loss amount that would result

in estimated outlier payments projected to be equal to 8 percent of total estimated payments inCMS-1498-P 802

RY 2010 because those data were the most recent co mplete LTCH data availa ble at that time. In

that same final rule, we establishe d a fixed-loss amount of $18,425 for RY 2010.

In this proposed rule, we are proposing to continue to use our existing methodology to

calculate the proposed fixed-loss amount for FY 2011 (based on updated data and the proposed

rates and policies presented in th is proposed rule) in order to maintain estimated HCO payments

at the projected 8 percent of total estimated LTCH PPS payments. (For an explanation of our

rationale for establishing an HCO payment “tar get” of 8 percent of total estimated LTCH

payments, we refer readers to the August 30, 2002 LTCH PPS final rule (67 FR 56022 through

56024).) Consistent with our historical practice of using the best data available, in determining

the proposed fixed-loss amount for FY 2011, we use the most recent available LTCH claims data

and CCR data. Specifically, for this proposed rule, we used LTCH claims data from the

December 2009 update of the FY 2009 MedPAR files and CCRs from the December 2009

update of the PSF to determine a fixed-loss amount that would result in estimated outlier

payments projected to be equal to 8 percent of total estimated payments in FY 2011 because

these data are the most recent complete LTCH da ta currently available. Consistent with the

historical practice of using the best available data, we are proposing that if more recent LTCH

claims data become available, we will use them for determining the fixed-loss amount for

FY 2011 in the final rule. Furthermore, we are proposing to determine the proposed FY 2011

fixed-loss amount based on the MS-LTC-DRG cla ssifications and relative weights from the

version of the GROUPER that will be in effect as of the beginning of FY 2011, that is, proposed

Version 28.0 of the GROUPER (discussed in secti on VII.B. of the preamble of this proposed

rule).CMS-1498-P 803

In this proposed rule, under the broad aut hority of section 123(a)(1) of the BBRA and

section 307(b)(1) of BIPA, we are proposing to establish a fixed-loss amount of $18,692 for

FY 2011. Thus, we would pay an outlier case 80 percent of the difference between the estimated

cost of the case and the outlier threshold (the sum of the adjusted Federal LTCH payment for the

MS-LTC-DRG and the fixed-loss amount of $18,692).

The proposed fixed-loss amount for FY 2011 of $18,692 is slightly higher than the

RY 2010 fixed-loss amount of $18,425. Based on our payment simulations using the most

recent available data, the proposed slight increas e in the fixed-loss amount for FY 2011 would be

necessary to maintain the existing requirement that estimated outlier payments would equal 8

percent of estimated total LTCH PPS payments. (For further information on the existing 8

percent HCO “target” requirement , we refer readers to the August 30, 2002 LTCH PPS final rule

(67 FR 56022 through 56024.) Maintaining the fi xed-loss amount at the current level would

result in HCO payments that are greater than the current regulatory requirement 8 percent

requirement because a higher fixed-loss amount w ould result in fewer cases qualifying as outlier

cases as well as decreases th e amount of the additional paym ent for a HCO cas e because the

maximum loss that a LTCH must incur before receiving an HCO payment (that is, the fixed-loss

amount) would be larger. For these reasons, we believe that proposing to raise the fixed-loss

amount is appropriate and necessa ry to maintain that estimated outlier payments would equal 8

percent of estimated total LTCH PPS payments as required under §412.525(a).

4. Application of Outlier Policy to SSO Cases

As we discussed in the August 30, 2002 fi nal rule (67 FR 56026), under some rare

circumstances, a LTCH discharge could qualify as a SSO case (as defined in the regulations at

§412.529 in conjunction with §412.503) and also as a HCO case. In this scenario, a patientCMS-1498-P 804

could be hospitalized for less than five-sixths of the geometric average length of stay for the

specific MS-LTC-DRG, and yet incur extraordinarily high treatment costs. If the costs exceeded

the HCO threshold (that is, the SSO payment pl us the fixed-loss amount), the discharge is

eligible for payment as a HCO. Thus, for a SSO case in FY 2011, the HCO payment would be

80 percent of the difference between the estimated cost of the case and the outlier threshold (the

sum of the proposed fixed-loss amount of $18,692 a nd the amount paid under the SSO policy as

specified in §412.529).

D. Computing the Proposed Adjusted LTCH PPS Federal Prospective Payments for FY 2011

In accordance with §412.525, the proposed standard Federal rate is adjusted to account

for differences in area wages by multiplying th e proposed labor-related share of the proposed

standard Federal rate by the appropriate proposed LTCH PPS wage index (as shown in Tables

12A and 12B of the Addendum of this proposed ru le). The proposed standard Federal rate is

also adjusted to account for the higher costs of hospitals in Alaska and Hawaii by multiplying the

proposed nonlabor-related share of the proposed standard Federal rate by the appropriate

cost-of-living factor (shown in the chart in section V.C.5. of the Addendum of this proposed

rule). In this proposed rule, we are proposing to establish a standard Fe deral rate for FY 2011 of

$39,856.75, as discussed in section V.A.2. of the Adde ndum of this proposed rule. We illustrate

the methodology to adjust the proposed LTCH PPS Federal rate for FY 2011 in the following

example:

Example:

During FY 2011, a Medicare patient is in a LTCH located in Chicago, Illinois (CBSA

16974). The proposed FY 2011 LTCH PPS wage index value for CBSA 16974 is 1.0573

(Table 12A of the Addendum of this proposed rule ). The Medicare patient is classified into MS-CMS-1498-P 805

LTC-DRG 28 (Spinal Procedures with MCC), wh ich has a proposed relative weight for FY 2011

of 1.0834 (Table 11 of the Addendum of this proposed rule).

To calculate the LTCH's total adjusted Federal prospective payment for this Medicare

patient, we compute the wage-adjusted propos ed Federal prospective payment amount by

multiplying the unadjusted proposed standard Federal rate ($39,856.75) by the proposed

labor-related share (75.407 percent) and the proposed wage index value (1.0573). This

wage-adjusted amount is then added to the propos ed nonlabor-related portion of the unadjusted

proposed standard Federal rate (24.593 percent; adju sted for cost of living, if applicable) to

determine the adjusted proposed Federal rate, which is then multiplied by the proposed MSLTC-DRG relative weight (1.0834) to calculate the total adjusted proposed Federal LTCH PPS

prospective payment for FY 2011 ($45,046.57). Th e table below illustrates the components of

the calculations in this example.

Unadjusted Proposed Standa rd Federal Prospective Payment Rate $39,856.75

Proposed Labor-Related Share x 0.7540 7 Labor-Related Portion of the Proposed Federal Rate = $30,054.78
Proposed Wage Index (CBSA 16974) x 1.0573
Proposed Wage-Adjusted Labor Sh are of Federal Rate = $31,776.92 Proposed Nonlabor-Related Po rtion of the Federal Rate ($39,856.75 x 0.24593) + $9,801.97

Adjusted Proposed Federal Rate Amount = $41,578.89

Proposed MS-LTC-DRG 28 Relative Weight x 1.083 4 Total Adjusted Federal Prospective Payment = $45,046.57

VI. Tables

This section contains the tables referred to throughout the preamble to this proposed rule

and in this Addendum. Tables 1A, 1B, 1C, 1D, 1E, 2, 3A, 3B, 4A, 4B, 4C, 4D-1, 4D-2, 4E, 4F,CMS-1498-P 806

4J, 5, 7A, 7B, 8A, 8B, 8C, 9A, 9C, 10, 11, 12A, and 12B are presented below. Table 6G.—

Additions to the CC Exclusions List, Table 6H .—Deletions from the CC Exclusions List, Table

6I.—Complete List of Complication and Como rbidity (CC) Exclusions, Table 6J.—Major

Complication and Comorbidity (MCC) List, a nd Table 6K.—Complications and Comorbidity

(CC) List are available only through the Internet on the CMS Web site at:

http://www.cms.hhs.gov/AcuteInpatientPPS/

. We note that, because of the provisions of Pub. L. 111-148, as amended, that affect our

proposed policies and payment rates for FY 2011 under the IPPS and the LTCH PPS, as well as

the provisions of Pub. L. 111-148, as amended, that affect the policies and payment rates for

FY 2010 under the IPPS and for RY 2010 under the LTCH PPS, tables 1A, 1B, 1C, 1D, 1E, 2,

4A, 4B, 4C, 4D-1, 4D-2, 4J, 9A, 10, and 11 will need to be updated to reflect these provisions.

We plan to issue separate documents in the Federal Register and instructions to address these

changes and to issue new tables that reflect these provisions.

The tables presented below are as follows:

Table 1A.—Proposed National Adjusted Operating Standardized Amounts,

Labor/Nonlabor (68.8 Percent Labor Share/31.2 Percent Nonlabor Share

If Wage Index Is Greater Than 1)

Table 1B.—Proposed National Adjusted Operating Standardized Amounts,

Labor/Nonlabor (62 Percent Labor Shar e/38 Percent Nonlabor Share If Wage

Index Is Less Than or Equal To 1)

Table 1C.—Proposed Adjusted Operating St andardized Amounts for Puerto Rico,

Labor/Nonlabor

Table 1D.—Proposed Capital Sta ndard Federal Payment RateCMS-1498-P 807

Table 1E.—Proposed LTCH Standard Federal Prospective Payment Rate

Table 2.—Acute Care Hospitals Ca se-Mix Indexes for Discharges Occurring in Federal Fiscal

Year 2009; Proposed Hospital Wage Indexes for Federal Fiscal Year 2011; Hospital

Average Hourly Wages for Federal Fiscal Years 2009 (2005 Wage Data), 2010 (2006

Wage Data), and 2011 (2007 Wage Data); a nd 3-Year Average of Hospital Average

Hourly Wages

Table 3A.—FY 2011 and 3-Year Average Hourly Wage for Acute Care Hospitals in Urban

Areas by CBSA

Table 3B.--FY 2011 and 3-Year Average Hourly Wa ge for Acute Care Hospitals in Rural Areas

by CBSA

Table 4A.—Proposed Wage Index and Capital Geographic Adjustme nt Factor (GAF) for Acute

Care Hospitals in Urban Areas by CBSA and by State--FY 2011

Table 4B.—Proposed Wage Index and Capital Geographic Adjustme nt Factor (GAF) for Acute

Care Hospitals in Rural Areas by CBSA and by State--FY 2011

Table 4C.—Proposed Wage Index and Capital Geographic Adjustme nt Factor (GAF) for Acute

Care Hospitals That Are Reclassifi ed by CBSA and by State--FY 2011

Table 4D-1.—Proposed Rural Floor Budget Ne utrality Factors for Acute Care Hospitals—

FY 2011

Table 4D-2.--Urban Areas with Acute Care Hospitals Receiving the Statewide Rural Floor or

Imputed Floor Wage Index--FY 2011

Table 4E.—Urban CBSAs and Constituent C ounties for Acute Care Hospitals--FY 2011

Table 4F.—Proposed Puerto Rico Wage Index and Capital Geographic Adjustment Factor

(GAF) for Acute Care Hospitals by CBSA--FY 2011CMS-1498-P 808

Table 4J.—Proposed Out-Migration Adjus tment for Acute Care Hospitals--FY 2011

Table 5.--List of Medicare Severity Diagnosis-R elated Groups (MS-DRGs), Relative Weighting

Factors, and Geometric and Arith metic Mean Length of Stay

Table 6A.--New Diagnosis Codes

Table 6B.--New Procedure Codes

Table 6C.--Invalid Diagnosis Codes

Table 6D.--Invalid Procedure Codes

Table 6E.--Revised Diagnosis Code Titles

Table 6F.--Revised Procedure Code Titles

Table 7A.--Medicare Prospective Payment Syst em Selected Percentile Lengths of Stay:

FY 2009 MedPAR Update—Decem ber 2009 GROUPER V27.0 MS-DRGs

Table 7B.--Medicare Prospective Payment System Selected Percentile Lengths of Stay:

FY 2009 MedPAR Update—Decem ber 2009 GROUPER V28.0 MS-DRGs

Table 8A.—Proposed Statewide Average Operating Cost-to-Charge Ratios (CCRs) for Acute

Care Hospitals—March 2009

Table 8B.—Proposed Statewide Average Capital Cost-to-Charge Ratios (CCRs) for Acute Care

Hospitals—March 2009

Table 8C.—Proposed Statewide Average Total Cost-to-Charge Ratios (CCRs) for

LTCHs--March 2009

Table 9A.--Hospital Reclassifi cations and Redesignations--FY 2011

Table 9C.--Hospitals Redesignated as Rura l under Section 1886(d)(8)(E) of the Act--FY 2011

Table 10.--Geometric Mean Plus the Lesser of .75 of the National Adjusted Operating

Standardized Payment Amount (Increased to Reflect the Difference Between Costs andCMS-1498-P 809

Charges) or .75 of One Sta ndard Deviation of Mean Charges by Medicare Severity

Diagnosis-Related Group (MS-DRG) --March 2009

Table 11.—Proposed MS-LTC-DRGs, Relative Weig hts, Geometric Average Length of Stay,

and Short-Stay Outlie r (SSO) Threshold for Discharg es Occurring from October 1, 2010

through September 30, 2011 under the LTCH PPS

Table 12A.—Proposed LTCH PPS Wage Index for Urban Areas for Discharges Occurring from

October 1, 2010 through September 30, 2011

Table 12B.—Proposed LTCH PPS Wage Index for Rural Areas for Discharges Occurring From

October 1, 2010 through September 20, 2011

TABLE 1A.—PROPOSED NATIONAL ADJUSTED OPERATING STANDARDIZED AMOUNTS, LABOR/NONLABOR (68.8 PERCENT LABOR SHARE/31.2 PERCENT NONLABOR SHARE IF WAGE INDEX IS GREATER THAN 1)

Full Update (2.4 Percent) Reduced Update (0.4 Percent)

Labor-related Nonlabor-related Labor-related Nonlabor-related $3,566.91 $1,617.55 $3,497.24 $1,585.96

TABLE 1B.—PROPOSED NATIONAL ADJ USTED OPERATING STANDARDIZED

AMOUNTS, LABOR/NONLABOR (62 PERCENT LABOR SHARE/38 PERCENT NONLABOR SHARE IF WAGE INDE X IS LESS THAN OR EQUAL TO 1)

Full Update (2.4 Percent) Reduced Update (0.4 Percent)

Labor-related Nonlabor-related Labor-related Nonlabor-related $3,214.37 $1,970.09 $3,151.58 $1,931.62CMS-1498-P 810

TABLE 1C.—PROPODSED ADJUSTED OP ERATING STANDARDIZED AMOUNTS FOR PUERTO RICO, LABOR/NONLABOR

Rates if Wage Index is Greater Than 1 Rates if Wage Index is Less Than or Equal to 1
Labor Nonlabor Labor Nonlabor National $3,566.91 $1,617.55 $3,214.37 1,970.09 Puerto Rico $1,530.25 $933.92 $1,527.79 $936.38

TABLE 1D.—PROPOSED CAPITAL STANDARD FEDERAL PAYMENT RATE

Rate
National $420.99
Puerto Rico $199.43

TABLE 1E.—PROPOSED LTCH STANDARD FEDERAL PROSPECTIVE PAYMENT RATE

Rate

Standard Fede ral Rate $39,856.75CMS-1498-P 811

TABLE 2.--HOSPITAL CASE-MIX INDEXE S FOR DISCHARGES OCCURRING IN

FEDERAL FISCAL YEAR 2009; PROPOS ED HOSPITAL WAGE INDEXES FOR FEDERAL FISCAL YEAR 2011; HOSPI TAL AVERAGE HOURLY WAGES FOR FEDERAL FISCAL YEARS 2009 (2005 WA GE DATA), 2010 (2006 WAGE DATA), AND 2011 (2007 WAGE DATA); AND 3-YEAR AVERAGE OF HOSPITAL AVERAGE HOURLY WAGES

**Provider Number Case-Mix**  **Index 2**  **FY 2011 Wage**  **Index Average**  **Hourly Wage**  **FY 2009 Average**  **Hourly Wage**  **FY 2010 Average**  **Hourly Wage**  **FY 2011 1**  **Average Hourly Wage**  ****** **(3 years)** 010001 1.6908 0.8539 25.0592 24.8712 27.6011 25.8542 010005 1.2841 0.8427 25.7771 24.9052 26.7660 25.7876 010006 1.4782 0.8028 25.1401 26.7013 27.1899 26.3024
010007 1.0377 0.7448 22.0185 20.0565 21.0524 21.0330 010008 1.1123 0.7622 23.2572 22.8443 24.6733 23.5882 010009 0.9990 0.8646 25.8420 26.1396 27.7497 26.5428 010010 1.2246 0.7744 24.8390 26.2416 27.1969 26.0938 010011 1.5830 0.8614 27.1997 28.6140 33.0361 29.6023 010012 1.1634 0.7634 26.4989 24.8944 25.4141 25.5688
010015 0.9011 0.7494 23.6821 22.9857 22.2077 22.9349 010016 1.5802 0.8614 28.9724 28.7392 30.3170 29.3596 010018 1.1555 0.8614 26.9514 26.7633 28.8087 27.5186 010019 1.3603 0.8028 25.0170 26.0567 29.0622 26.7038 010021 1.3329 0.7571 21.7601 24.3385 25.0343 23.6912 010022 0.9217 0.9563 28.7529 26.5348 30.6579 28.6538
010023 1.7864 0.8506 28.2135 30.0684 31.4256 29.9233 010024 1.6738 0.8506 26.6636 28.1766 29.2979 28.1013 010025 1.4344 0.8613 23.8617 20.1873 29.5803 23.9653 010027 0.7496 0.7510 18.2508 19.7740 22.3038 20.2061 010029 1.6510 0.8613 24.3622 28.3184 26.2864 26.2272 010032 0.8693 0.7773 20.8458 24.7706 22.5607 22.8612
010033 2.2117 0.8614 29.2036 29.3762 30.8243 29.8385 010034 1.1730 0.8506 21.3728 21.0565 23.7513 22.0213 010035 1.3475 0.8427 26.5299 28.0534 28.4993 27.6832 010036 1.1875 0.7448 23.3876 25.0011 25.7199 24.7026 010038 1.3776 0.7945 28.9646 29.7948 32.5231 30.4750 010039 1.8330 0.8994 29.8034 30.6619 31.7063 30.7533
010040 1.6522 0.7561 25.9856 25.2840 27.2842 26.1688 010043 1.2776 0.8614 25.3633 27.3636 26.3517 26.3192 010044 1.0295 0.7448 23.4020 27.3403 28.2131 26.2653 010045 1.0535 0.7670 24.2450 25.1108 27.0851 25.4649CMS-1498-P 812

**Provider Number Case-Mix**  **Index 2**  **FY 2011 Wage**  **Index Average**  **Hourly Wage**  **FY 2009 Average**  **Hourly Wage**  **FY 2010 Average**  **Hourly Wage**  **FY 2011 1**  **Average Hourly Wage**  ****** **(3 years)** 010046 1.5582 0.8427 25.4465 33.3112 21.9429 26.0994 010047 0.8765 0.7575 21.7349 17.0984 24.5251 21.0332 010049 1.0744 0.7510 23.1194 25.4446 27.0625 25.1500
010050 1.0266 0.8614 25.3678 27.0365 29.5491 27.2877 010051 0.8615 0.8225 20.0765 21.4140 20.9159 20.8071 010052 0.9419 0.8506 22.7571 22.1386 21.8148 22.2484 010054 1.0674 0.8646 25.4209 24.6126 24.5639 24.8520 010055 1.5928 0.8002 25.3306 26.4706 26.7456 26.1757 010056 1.6143 0.8614 25.7290 28.5668 31.1851 28.4494
010058 0.9816 0.8614 31.1865 23.6860 24.6105 25.8253 010059 1.0664 0.8646 27.8613 29.5434 26.7428 27.9872 010061 0.9602 0.8594 25.7048 26.5035 26.1463 26.1214 010062 1.0748 0.7743 22.9491 20.8224 23.0559 22.2543 010064 1.6120 0.8614 26.6333 * 23.3954 24.8292 010065 1.4982 0.8427 24.4454 25.9433 27.7120 26.0207
010066 0.8151 0.7448 25.6052 25.9301 26.7367 26.0555 010069 0.9679 0.7448 27.3438 29.4662 25.8964 27.5684 010073 0.9744 0.7448 20.7833 19.9743 21.0063 20.5785 010078 1.7376 0.7945 25.2897 24.5429 26.5654 25.4734 010079 1.3594 0.8994 23.1025 25.4118 27.2463 25.2397 010083 1.1948 0.7899 25.0422 25.2405 25.2017 25.1655
010084 *** * 27.5069 * * 27.5069 010085 1.4769 0.8646 24.0475 25.6072 26.5909 25.3882 010086 1.1077 0.7448 26.9753 24.9468 27.4146 26.3789 010087 2.4471 0.7899 27.4929 27.2725 26.8954 27.1988 010089 1.3862 0.8614 25.9719 26.9357 27.9079 26.8958 010090 1.8308 0.7899 25.6110 26.8029 28.3744 26.9471
010091 0.8685 0.7494 23.6555 27.8571 25.1201 25.3701 010092 1.5529 0.8225 28.8433 30.3263 28.7948 29.3311 010095 0.7991 0.8225 17.8248 21.6551 23.5564 21.0352 010097 0.8060 0.8506 18.4218 19.5147 21.2996 19.7766 010099 0.9382 0.7448 22.3686 20.8632 23.5835 22.2682 010100 1.7378 0.8144 25.4357 25.8178 26.8181 26.0446
010101 1.1605 0.8427 26.2744 25.0955 26.5747 25.9872 010102 0.9608 0.8506 26.6943 22.6883 22.4398 23.9594 010103 1.9636 0.8614 30.4032 27.9049 29.7010 29.3261 010104 1.6984 0.8614 30.4963 29.1001 30.1353 29.9264CMS-1498-P 813

**Provider Number Case-Mix**  **Index 2**  **FY 2011 Wage**  **Index Average**  **Hourly Wage**  **FY 2009 Average**  **Hourly Wage**  **FY 2010 Average**  **Hourly Wage**  **FY 2011 1**  **Average Hourly Wage**  ****** **(3 years)** 010108 1.0545 0.8506 26.8900 27.7601 29.5101 28.1758 010109 1.0134 0.7757 21.9300 19.3990 23.0918 21.4719 010110 0.8328 0.7663 22.1175 17.9438 25.5691 21.8242
010112 0.9041 0.7448 21.3904 22.0927 20.9602 21.4581 010113 1.6548 0.7899 25.0704 25.7852 28.0528 26.3173 010114 1.5070 0.8614 25.3666 25.8015 25.6005 25.5885 010118 1.3294 0.8015 25.3689 25.7663 27.7362 26.2760 010120 0.9119 0.7448 22.8177 22.0809 * 22.4473 010125 1.1026 0.7924 23.6549 24.1942 25.4328 24.3975
010126 1.0242 0.8506 25.7254 28.8995 27.0770 27.1824 010128 0.9834 0.7494 25.9421 25.1022 25.7453 25.6021 010129 1.1598 0.7582 24.4816 25.2104 27.6767 25.7944 010130 1.0145 0.8614 25.2790 23.8895 31.2319 26.5261 010131 1.4270 0.8994 28.0487 28.6759 32.2481 29.7152 010137 1.5361 0.8614 30.4361 30.7312 33.4983 31.5313
010138 0.6398 0.7514 15.0815 16.7541 16.6144 16.1902 010139 1.6830 0.8614 29.3560 29.3626 30.7489 29.8142 010143 1.1691 0.8646 25.0871 25.1522 25.9745 25.3833 010144 1.7207 0.7899 23.8601 25.4614 26.4008 25.1949 010145 1.5795 0.8225 27.3296 30.2093 29.5558 29.0313 010146 0.9412 0.7945 23.8076 24.6572 25.2484 24.5514
010148 0.9563 0.7448 25.0960 24.8409 24.3699 24.7693 010149 1.3663 0.8506 26.8920 28.1328 29.5254 28.2683 010150 1.0187 0.7575 25.0070 26.3342 25.9401 25.7372 010152 1.3718 0.7899 26.0793 23.0248 26.8322 25.2347 010157 1.1568 0.8028 27.1793 27.5674 27.3487 27.3636 010158 1.3394 0.7583 26.2363 26.8821 27.7665 26.9653
010164 1.1777 0.8427 25.6759 24.4625 23.9304 24.6859 010167 1.5767 0.8614 * 24.7643 29.1631 26.8653 010168 1.6115 0.9111 * 30.2040 27.0185 28.8600 010169 1.0410 * * * * *
020001 1.8974 1.1919 38.1784 39.2651 40.8325 39.4363 020006 1.3723 1.1919 37.2853 40.5422 42.4838 40.2757
020008 1.2207 1.1919 40.6783 42.8075 44.8291 42.8366 020012 1.4672 1.1919 36.1911 37.0181 38.4880 37.2462 020014 *** * 30.6343 * * 30.6343 020017 2.2168 1.1919 38.2157 41.2448 42.1762 40.5573CMS-1498-P 814

**Provider Number Case-Mix**  **Index 2**  **FY 2011 Wage**  **Index Average**  **Hourly Wage**  **FY 2009 Average**  **Hourly Wage**  **FY 2010 Average**  **Hourly Wage**  **FY 2011 1**  **Average Hourly Wage**  ****** **(3 years)** 020018 0.9117 1.8246 * * * *
020024 1.1323 1.1919 39.9943 35.9358 43.5298 39.9069 020026 1.5829 1.8246 * * * *
020027 0.8544 1.8246 * * * *
020028 *** * * * 42.1568 42.1568 030001 1.5123 1.0519 35.9083 38.1204 36.9465 37.0095 030002 2.1395 1.0519 32.9094 34.2998 35.5406 34.2817 030006 1.7866 0.9692 29.1248 32.1646 32.4565 31.2997 030007 1.5010 1.2318 35.5226 38.1199 40.1726 38.0212
030010 1.6899 0.9692 31.8640 33.3049 33.9522 33.0660 030011 1.6799 0.9692 30.2096 31.8532 32.9183 31.7320 030012 1.6785 1.2318 31.3068 33.4818 50.8525 36.5891 030013 1.5846 0.9455 31.9162 31.1767 33.0103 32.0532 030014 1.6003 1.0519 30.6308 31.8529 33.7100 32.1295 030016 1.3364 1.0519 31.1878 30.6196 34.0540 31.8987
030017 *** * 34.8488 34.9499 37.4893 35.7433 030018 *** * 31.7240 34.2870 35.7209 33.8731 030019 *** * 33.6553 36.3298 36.3760 35.4444 030022 1.6387 1.0519 35.0772 34.3377 34.4050 34.5355 030023 2.0211 1.2457 37.5523 41.8098 43.4901 40.9837 030024 2.1783 1.0519 35.3556 38.5575 40.6081 38.3107
030030 1.6996 1.0519 36.4772 38.9056 37.5980 37.7197 030033 1.3578 1.0519 32.0362 33.9716 35.7840 33.9594 030036 1.6971 1.0519 35.7464 37.1271 40.4842 37.7767 030037 1.9779 1.0519 35.1342 35.8129 37.1935 36.2152 030038 1.6840 1.0519 31.2928 33.8052 36.9266 34.1148 030043 1.3149 0.9120 28.3158 29.0816 31.0593 29.4840
030055 1.5838 1.0287 31.0806 37.2632 37.4315 35.3174 030061 1.7125 1.0519 33.0847 34.2000 35.3864 34.2660 030062 1.4495 0.9120 29.9359 30.3859 33.1874 31.2110 030064 2.1061 0.9692 31.6632 33.1535 35.0230 33.3240 030065 1.8343 1.0519 31.4602 33.8941 36.2534 33.8318 030067 1.0416 0.9418 27.0784 27.4410 31.2478 28.5865
030068 1.1142 0.9120 26.0296 26.8369 28.7966 27.2639 030069 1.5878 1.1429 30.7723 35.1793 35.6421 33.9927 030071 1.0518 1.4448 * * * *
030073 1.2775 1.4448 * * * *CMS-1498-P 815

**Provider Number Case-Mix**  **Index 2**  **FY 2011 Wage**  **Index Average**  **Hourly Wage**  **FY 2009 Average**  **Hourly Wage**  **FY 2010 Average**  **Hourly Wage**  **FY 2011 1**  **Average Hourly Wage**  ****** **(3 years)** 030074 0.9561 1.4448 * * * *
030077 0.9180 1.4448 * * * *
030078 1.2123 1.4448 * * * *
030080 *** * 30.7682 34.2723 * 32.4902 030083 1.5477 1.0519 35.8521 39.0888 39.9707 38.3254 030084 1.0830 1.4448 * * * *
030085 1.6913 0.9692 29.0774 30.7160 33.4062 31.0315 030087 1.7697 1.0519 31.1094 33.0362 37.2751 33.9611 030088 1.4335 1.0519 30.5738 33.5408 34.6877 33.0355
030089 1.7404 1.0519 31.3179 32.8874 34.7343 33.0017 030092 1.6022 1.0519 30.4394 31.6471 33.8309 32.0855 030093 1.4573 1.0519 33.0720 33.5029 34.3015 33.6746 030094 1.6808 1.0519 34.2040 35.9213 36.9133 35.7448 030099 0.7231 * 24.9127 * * 24.9127 030100 2.2953 0.9692 35.0981 36.9783 39.5385 37.2928
030101 1.4411 1.1811 33.2139 34.1060 33.6260 33.6535 030102 2.8130 1.0519 36.9539 39.4617 36.4149 37.5421 030103 1.8002 1.0519 34.2770 41.6469 41.1210 39.1558 030105 2.2878 1.0519 33.9875 37.6952 38.6741 36.8267 030106 *** * 40.1657 43.9022 * 41.9807 030107 2.1093 1.0519 35.4562 35.9171 37.6288 36.3377
030108 2.4034 1.0519 34.8507 33.2799 34.5124 34.1536 030110 1.7329 1.0519 36.2158 38.0468 39.0340 37.8801 030111 1.1668 0.9692 28.5146 33.3314 37.0123 33.6486 030112 2.0671 1.0519 33.4810 36.1513 40.1301 36.8711 030113 0.9505 1.4448 * * * *
030114 1.4510 0.9692 28.8466 30.2128 30.3754 29.8451
030115 1.5083 1.0519 32.5885 34.8409 36.8225 35.0086 030117 1.3318 1.0287 * 34.5349 36.6725 35.7305 030118 1.3327 1.2318 * 28.2945 32.6116 30.4114 030119 1.6200 1.0519 * 38.2362 40.7172 39.6384 030120 0.8520 1.0519 * 39.7676 47.5037 43.8726 030121 1.6902 1.0519 * * 36.6999 36.6999
030122 1.4640 1.0519 * * 35.1781 35.1781 030123 1.4739 1.0519 * * * *
030124 1.8948 1.0519 * * * *
030125 2.0742 1.0519 * * * *CMS-1498-P 816

**Provider Number Case-Mix**  **Index 2**  **FY 2011 Wage**  **Index Average**  **Hourly Wage**  **FY 2009 Average**  **Hourly Wage**  **FY 2010 Average**  **Hourly Wage**  **FY 2011 1**  **Average Hourly Wage**  ****** **(3 years)** 030126 1.8635 1.0519 * * * *
040001 1.0932 0.8648 24.4962 25.0147 25.5841 25.0463 040002 1.1071 0.7517 24.0487 26.2100 24.0639 24.7422
040004 1.7351 0.8648 29.2714 30.1320 31.6130 30.3580 040007 1.7451 0.8675 28.3305 29.3146 30.2051 29.2717 040010 1.4698 0.8648 28.2375 28.1618 29.2017 28.5990 040011 0.9266 0.7517 22.6327 25.6224 25.9642 24.7357 040014 1.3689 0.8490 34.8279 24.1271 24.6941 25.6001 040015 1.0662 0.7517 22.3148 23.2134 23.7403 23.0850
040016 1.7601 0.8675 26.4806 27.6568 28.6501 27.6411 040017 1.0990 0.8127 24.3772 25.3390 26.2509 25.3116 040018 1.2191 0.7742 26.2521 25.3362 26.6851 26.0819 040019 0.9918 0.7775 26.4932 25.5468 25.0491 25.6618 040020 1.6272 0.7833 26.1529 25.9754 26.6049 26.2463 040021 *** * 27.6799 28.7690 28.8903 28.4564
040022 1.4167 0.8648 30.0250 29.5992 29.4604 29.6905 040026 1.6410 0.9296 31.8588 32.2814 34.6944 32.9479 040027 1.5093 0.8413 25.7935 27.2441 28.4743 27.1878 040029 1.4958 0.8675 27.8882 27.8412 29.1988 28.3053 040036 1.6856 0.8675 30.4906 32.0772 33.1236 31.9038 040039 1.1753 0.8127 22.9807 23.4456 23.0760 23.1655
040041 1.1592 0.8490 26.4435 27.8594 27.4448 27.2474 040042 1.3566 0.9213 23.1661 23.5768 28.3874 25.0294 040047 0.9113 0.7634 23.3557 25.0102 27.5142 25.1265 040050 1.1590 0.7517 19.6946 21.0178 22.0146 20.9063 040051 0.9936 0.7517 22.1981 23.4783 24.9308 23.5416 040055 1.7558 0.7742 26.0150 26.3370 26.5702 26.3163
040062 1.6827 0.7742 25.6554 28.5888 28.4309 27.5460 040067 1.0555 0.7524 20.9700 21.3492 22.1772 21.5146 040069 0.9730 0.8127 23.3117 23.0880 22.6987 23.0306 040071 1.5474 0.8490 26.6645 25.0185 28.7130 26.7537 040072 1.1859 0.7517 22.9671 23.3205 24.0488 23.4429 040074 1.1781 0.8675 27.3897 27.4614 27.7915 27.5518
040076 1.0157 0.9071 24.7903 25.7464 25.0274 25.1722 040078 1.7507 0.9296 25.6886 27.9394 28.4481 27.3094 040080 1.0416 0.7833 26.5905 26.9354 26.1224 26.5524 040081 0.8641 0.7874 18.4759 18.5265 17.3969 18.1445CMS-1498-P 817

**Provider Number Case-Mix**  **Index 2**  **FY 2011 Wage**  **Index Average**  **Hourly Wage**  **FY 2009 Average**  **Hourly Wage**  **FY 2010 Average**  **Hourly Wage**  **FY 2011 1**  **Average Hourly Wage**  ****** **(3 years)** 040084 1.3107 0.8675 28.1570 28.7379 29.9634 29.0185 040085 0.9358 0.8981 26.6987 25.4981 26.7545 26.3201 040088 1.5419 0.8122 24.7119 26.7050 28.8877 26.7762
040091 1.1940 0.7517 22.3311 27.7747 29.9029 26.3939 040100 *** * 24.5458 24.7712 * 24.6638 040114 1.9109 0.8675 28.5702 29.1200 30.6358 29.4351 040118 1.6136 0.7517 26.5783 27.3360 30.6065 28.2493 040119 1.5157 0.8490 25.6779 26.9632 28.2765 27.0150 040132 0.8021 0.9296 21.8140 * 22.6953 22.2510
040134 2.2362 0.8675 34.9673 35.2045 36.1627 35.4829 040137 1.3325 0.8675 27.7638 28.2123 31.3247 29.2690 040138 *** * 33.0073 31.1138 32.6001 32.2159 040141 *** * 33.8791 34.8500 * 34.4114 040142 1.5826 0.9296 23.1302 24.4876 27.5086 25.1151 040145 1.9580 0.7833 20.3878 22.1731 22.3687 21.7125
040147 1.9130 0.8675 35.7669 33.6215 30.4256 32.7938 040148 *** * * * 35.6031 35.6031 040149 *** * * * 29.0721 29.0721 040152 2.5966 0.8648 * * * *
050002 1.5159 1.5855 43.1760 42.3825 45.4953 43.6748 050006 1.8102 1.3277 41.7714 43.8923 45.0094 43.5856
050007 1.5598 1.5182 49.5271 55.1636 52.2245 52.2511 050008 1.6354 1.5036 50.9569 50.4751 52.7669 51.4050 050009 1.7626 1.5173 49.7177 51.5510 53.0588 51.5292 050013 1.9184 1.5173 43.4906 46.3422 49.5453 46.5172 050014 1.2657 1.3217 42.2044 42.7255 41.0206 41.9545 050016 1.4193 1.2121 34.3863 36.3674 39.4584 36.8709
050017 2.1061 1.3217 44.4857 46.6209 48.7220 46.6321 050018 1.3007 1.2002 34.0338 34.7941 36.0324 34.9615 050022 1.7904 1.2002 36.6360 38.9203 41.5471 39.0977 050024 1.2891 1.2002 33.5247 34.6921 37.1807 34.9055 050025 1.9538 1.2002 36.9233 39.5330 42.5246 39.7669 050026 1.6191 1.2002 35.0306 36.3315 37.3290 36.2935
050028 1.2261 1.2002 28.1584 28.5839 * 28.3806 050030 1.2680 1.2002 33.5654 33.2455 34.4700 33.7632 050036 1.7457 1.2002 37.4298 39.2616 41.5393 39.4707 050038 1.7728 1.6059 55.2197 58.4851 61.3276 58.4346CMS-1498-P 818

**Provider Number Case-Mix**  **Index 2**  **FY 2011 Wage**  **Index Average**  **Hourly Wage**  **FY 2009 Average**  **Hourly Wage**  **FY 2010 Average**  **Hourly Wage**  **FY 2011 1**  **Average Hourly Wage**  ****** **(3 years)** 050039 1.5400 1.2002 34.9262 37.8559 40.9213 37.8428 050040 1.3721 1.2002 38.1665 41.9767 44.2571 41.5266 050042 1.5785 1.3277 40.5791 45.6660 50.9908 45.8022
050043 1.7576 1.5855 51.9529 55.4677 53.5411 53.6961 050045 1.3696 1.2002 28.5952 27.8903 31.4860 29.3287 050046 1.2182 1.2002 34.2529 34.0106 37.1982 35.1676 050047 1.8545 1.5036 48.5961 51.4298 53.1141 51.0350 050054 1.2411 1.2002 27.1320 27.9082 32.4947 29.1694 050055 1.4904 1.5036 48.2796 51.9993 52.9342 51.0882
050056 1.5972 1.2002 34.7964 33.2655 39.4954 35.7797 050057 1.6940 1.2002 33.7574 35.6340 38.6138 36.0669 050058 1.8187 1.2002 38.9843 41.4811 43.4764 41.3510 050060 1.6287 1.2002 34.1183 35.3108 36.7750 35.4314 050063 1.6524 1.2002 36.6301 40.9558 43.3599 40.2753 050065 *** * 42.0085 * * 42.0085
050067 1.3773 1.2002 41.8988 41.1549 34.0218 39.0746 050069 2.0169 1.2002 38.1339 40.0498 44.2637 40.8835 050070 1.4481 1.5182 48.9362 53.8300 55.6284 52.8293 050071 1.7718 1.6059 52.0696 55.3995 54.9153 54.1707 050072 1.5282 1.5536 51.4538 54.7774 55.8299 54.0528 050073 1.5376 1.5428 50.6523 54.2296 55.8359 53.6371
050075 1.6153 1.5855 51.1187 54.8332 56.6372 54.2184 050076 1.8135 1.5036 50.5761 53.8043 55.1835 53.2013 050077 1.6624 1.2002 37.4989 38.5242 38.0509 38.0339 050078 1.3299 1.2002 37.1940 38.9256 38.8489 38.3347 050079 1.5469 1.5536 48.3017 50.6578 65.1440 53.7676 050082 1.8234 1.2002 42.0181 41.8861 44.1069 42.6942
050084 1.6992 1.3217 41.1276 42.4418 46.0253 43.2693 050089 1.4757 1.2002 39.6297 39.9711 42.3990 40.7121 050090 1.4461 1.5428 41.6026 44.0838 44.4628 43.3851 050091 0.9802 1.2002 40.1063 34.8170 33.6732 36.0063 050093 1.5991 1.2002 37.7244 38.5686 41.6205 39.3792 050095 *** * 44.2400 * * 44.2400
050096 1.4571 1.2002 33.3803 27.6236 33.2850 31.4278 050099 1.6444 1.2002 34.3507 35.4717 37.9297 35.9486 050100 1.8716 1.2002 34.2839 37.1606 39.4312 36.9821 050101 1.6391 1.5428 48.7495 54.5185 56.2550 53.2934CMS-1498-P 819

**Provider Number Case-Mix**  **Index 2**  **FY 2011 Wage**  **Index Average**  **Hourly Wage**  **FY 2009 Average**  **Hourly Wage**  **FY 2010 Average**  **Hourly Wage**  **FY 2011 1**  **Average Hourly Wage**  ****** **(3 years)** 050102 1.4707 1.2002 33.2837 35.4740 35.1267 34.5871 050103 1.6949 1.2002 37.3608 38.8446 38.1720 38.1428 050104 1.5783 1.2002 37.4417 39.1121 41.8962 39.5439
050107 1.6748 1.2002 36.5843 40.5315 41.9627 39.7421 050108 2.0166 1.3217 45.3460 48.8199 53.1654 48.7805 050110 1.2043 1.2002 30.9054 32.3171 33.5933 32.2754 050111 1.0887 1.2002 31.9394 31.1160 32.2597 31.7697 050112 1.5483 1.2002 39.9951 41.8195 41.5924 41.1912 050113 1.4076 1.5182 46.3471 45.1998 42.4778 44.6111
050114 *** * 37.5924 36.6541 * 37.1115 050115 1.5983 1.2002 33.3013 37.7614 40.4397 37.1497 050116 1.7304 1.2002 45.7510 40.6863 42.7961 43.0779 050118 1.2522 1.2002 41.8191 43.4432 46.9088 44.0974 050121 1.2757 1.2002 35.1135 36.9069 41.8043 38.1805 050122 1.7509 1.2384 36.8821 40.4510 41.5112 39.6349
050124 1.3527 1.2002 31.7690 33.3080 34.6304 33.2610 050125 1.6861 1.6059 53.6300 57.6242 60.2474 57.1280 050126 1.6064 1.2002 35.1909 34.9807 36.0294 35.4292 050127 1.5461 1.3217 42.5226 46.9648 48.0928 46.1911 050128 1.6196 1.2002 34.2364 36.6986 39.3773 36.7615 050129 1.9659 1.2002 40.3786 41.4256 44.5762 42.1957
050131 1.4681 1.5428 52.8228 56.6586 53.6221 54.3340 050132 1.6276 1.2002 43.6747 42.8187 45.1737 43.9116 050133 1.4848 1.2180 35.2433 36.8254 37.6504 36.6555 050135 1.0726 1.2002 25.4431 28.5118 30.6553 28.0980 050136 1.4481 1.5428 51.8508 52.5398 57.3918 53.8780 050137 1.3773 1.2002 43.5305 45.2088 49.1420 45.8667
050138 1.9128 1.2002 45.1011 47.3839 51.2980 47.9183 050139 1.4368 1.2002 43.0734 44.5753 48.6963 45.4255 050140 1.4087 1.2002 42.7590 44.8911 46.8652 44.8787 050144 *** * 40.4760 * * 40.4760 050145 1.6332 1.5512 49.4479 54.8909 58.5220 54.4145 050146 1.8322 * * * * *
050149 1.5052 1.2002 43.1926 42.8003 45.3498 43.7950 050150 1.3011 1.3217 43.5937 44.3354 48.0733 45.3350 050152 1.6955 1.5428 54.7176 55.9738 57.1905 55.9904 050153 1.5690 1.6059 50.4884 53.5925 57.8841 54.0652CMS-1498-P 820

**Provider Number Case-Mix**  **Index 2**  **FY 2011 Wage**  **Index Average**  **Hourly Wage**  **FY 2009 Average**  **Hourly Wage**  **FY 2010 Average**  **Hourly Wage**  **FY 2011 1**  **Average Hourly Wage**  ****** **(3 years)** 050158 1.5055 1.2002 42.7874 42.9454 44.0747 43.2830 050159 1.3444 1.2002 35.0153 40.4701 42.5924 39.5664 050167 1.4923 1.2384 38.0742 39.9946 41.8816 40.0050
050168 1.6873 1.2002 40.8362 37.9746 43.4951 40.7650 050169 1.6805 1.2002 33.1130 35.4836 41.1246 36.5888 050173 1.3930 1.2002 32.3265 31.5434 32.8423 32.2554 050174 1.7399 1.5428 53.7113 54.7960 59.7549 56.0844 050179 1.2738 1.2002 34.6558 36.2060 33.9197 34.8615 050180 1.7149 1.5536 48.7425 51.1836 53.5567 51.2533
050188 1.4966 1.6059 45.8501 49.6669 54.1865 49.5983 050189 0.9575 1.5512 31.5805 27.5311 29.3459 29.4661 050191 1.6765 1.2002 41.7185 40.0694 41.5164 41.0746 050192 0.9069 1.2002 27.4611 29.4203 33.2102 30.1271 050193 1.2942 1.2002 36.7240 39.0111 43.0282 39.5133 050194 1.3701 1.6059 49.8539 49.9857 55.1169 51.6953
050195 1.6650 1.5855 57.6563 61.8312 65.0039 61.5445 050196 1.2008 1.2002 41.1300 43.7415 41.0270 41.9842 050197 1.9331 1.5855 55.3173 59.0280 63.2066 59.2051 050204 1.5451 1.2002 38.8689 37.5591 41.0566 39.2215 050205 1.5945 1.2002 30.6117 30.2818 31.5240 30.7776 050211 1.3252 1.5855 42.9254 44.8773 46.1770 44.5820
050219 1.3542 1.2002 26.7061 26.9022 26.0523 26.5448 050222 1.7729 1.2002 35.4045 36.0221 37.6975 36.4283 050224 1.7191 1.2002 37.3442 39.7119 41.8790 39.6769 050225 1.5650 1.2002 37.5252 38.9288 42.8450 39.8661 050226 1.5718 1.2002 36.5354 38.4952 39.4194 38.1228 050228 1.4239 1.5036 49.9063 54.5580 57.3422 54.0697
050230 1.7061 1.2002 38.8901 39.8582 42.1567 40.3322 050231 1.8460 1.2002 37.0245 38.7280 40.2191 38.7139 050232 1.7131 1.2121 35.4055 39.4290 42.5544 39.2518 050234 1.5381 1.2002 37.7125 37.6811 38.9602 38.1603 050235 1.7383 1.2002 39.1744 40.0962 40.2265 39.8347 050236 1.5208 1.2002 34.4257 42.5939 44.3842 40.4072
050238 1.7269 1.2002 35.1268 36.4272 37.0926 36.2576 050239 1.6695 1.2002 36.3257 37.2939 38.5937 37.4489 050242 1.4892 1.6059 53.8385 58.5684 59.7332 57.3859 050243 1.6103 1.2002 37.8538 40.0490 42.5305 40.1509CMS-1498-P 821

**Provider Number Case-Mix**  **Index 2**  **FY 2011 Wage**  **Index Average**  **Hourly Wage**  **FY 2009 Average**  **Hourly Wage**  **FY 2010 Average**  **Hourly Wage**  **FY 2011 1**  **Average Hourly Wage**  ****** **(3 years)** 050245 1.3766 1.2002 34.7153 36.9270 37.1180 36.2906 050248 1.1998 1.5512 46.0329 47.7637 51.0500 48.2742 050254 1.3843 1.3217 33.5069 34.8262 39.7976 36.0829
050256 *** * 32.6841 * * 32.6841 050257 0.8947 1.2002 29.2651 30.7766 29.8486 29.9463 050261 1.3026 1.2002 33.7196 34.8188 39.3041 36.0518 050262 2.3736 1.2002 43.7709 40.8071 44.0453 42.8188 050264 1.4655 1.5855 50.1691 54.4052 57.0188 53.7398 050272 1.5454 1.2002 32.2584 35.0624 37.3015 34.8914
050276 1.1140 1.5536 47.2432 53.7552 55.4715 52.2517 050277 1.2258 1.2002 * 48.9698 47.5707 48.2343 050278 1.7099 1.2002 38.5689 39.5929 42.8799 40.4121 050279 1.3099 1.2002 32.1695 31.0888 31.6803 31.6436 050280 1.8248 1.3277 43.6243 46.2628 50.0266 46.6861 050281 1.5342 1.2002 31.0706 31.4166 32.8623 31.7857
050283 1.7021 1.5855 45.1132 50.3066 51.3746 48.9680 050289 1.6807 1.5182 52.0918 53.8571 58.3774 54.8745 050290 1.7520 1.2002 42.0099 42.2249 42.6314 42.2987 050291 2.0918 1.5428 44.6102 49.6427 52.1353 48.7155 050292 1.1648 1.2002 35.0372 34.6404 39.9841 36.7557 050295 1.5834 1.2002 39.7399 39.3961 42.9356 40.7188
050296 1.1416 1.6044 44.8135 48.2583 50.4082 47.9062 050298 1.2079 1.2002 33.6947 31.7374 34.0150 33.1345 050300 1.4557 1.2002 37.1275 39.2722 43.0474 40.0013 050301 1.3483 1.2002 36.3681 36.7568 39.9485 37.7770 050305 1.5667 1.5855 56.9756 55.7229 54.6309 55.7281 050308 1.5864 1.6059 49.0132 51.0183 54.0475 51.4737
050309 1.5729 1.3217 42.9280 46.6901 47.4734 45.7112 050313 1.2453 1.2384 39.0663 42.3998 43.8913 41.8600 050315 1.4388 1.2002 37.3560 40.3132 47.1318 41.7255 050320 1.2324 1.5855 50.6708 50.9692 55.3663 52.3385 050324 1.8098 1.2002 37.1883 38.9511 41.1149 39.1426 050325 0.7767 1.2035 34.0343 * 47.6656 36.0502
050327 1.8597 1.2002 36.9550 37.7681 39.6815 38.2025 050329 1.3249 1.2002 36.7669 37.6975 37.0324 37.1628 050334 1.7820 1.5855 50.9834 54.9338 59.6727 55.2808 050335 1.4895 1.2002 37.2347 37.1670 39.1873 37.9135CMS-1498-P 822

**Provider Number Case-Mix**  **Index 2**  **FY 2011 Wage**  **Index Average**  **Hourly Wage**  **FY 2009 Average**  **Hourly Wage**  **FY 2010 Average**  **Hourly Wage**  **FY 2011 1**  **Average Hourly Wage**  ****** **(3 years)** 050336 1.2295 1.2384 33.0325 35.3658 38.7257 35.7910 050342 1.2591 1.2002 29.8389 31.6852 33.8443 31.8494 050348 1.7579 1.2002 33.5276 35.1080 37.4660 35.3772
050349 0.7643 1.2002 23.1095 23.5190 24.5969 23.7436 050350 1.5328 1.2002 34.6747 36.1856 37.1989 35.9750 050351 1.5646 1.2002 35.0042 35.6083 34.8470 35.1393 050352 1.4182 1.3217 38.6265 41.5370 41.4294 40.5216 050353 1.5266 1.2002 37.1716 37.4560 38.3124 37.6445 050357 1.4556 1.2002 38.9244 40.9999 41.8008 40.6080
050359 1.1943 1.2002 30.3988 30.9732 33.5096 31.6303 050360 1.6360 1.5428 55.3738 59.2147 57.2879 57.3315 050366 1.1199 1.3217 41.8324 43.0169 43.1165 42.6581 050367 1.6146 1.5428 40.0453 41.1059 44.3506 41.9320 050369 *** * 33.3357 34.7337 37.3679 35.1733 050373 1.4497 1.2002 37.6695 40.8506 43.5055 40.7260
050376 1.6492 1.2002 36.7270 40.0354 42.4754 39.8599 050378 1.1137 1.2002 42.0480 50.0875 51.5092 47.5470 050380 1.8224 1.6059 52.5804 58.6395 60.9625 57.5372 050382 1.6019 1.2002 32.9248 34.3636 36.6641 34.7208 050385 1.4871 1.5428 36.5644 38.9773 44.3026 40.0228 050390 1.2847 1.2002 33.0463 31.4134 33.7927 32.7377
050393 1.4304 1.2002 35.1887 35.5678 38.9873 36.6236 050394 1.7929 1.2002 32.9572 37.2557 40.0176 36.7479 050396 1.5923 1.2002 38.9944 41.2602 41.6933 40.7032 050397 0.8415 1.2002 31.1621 32.3700 36.0861 33.4783 050407 1.2178 1.5036 47.5591 47.7943 48.9123 48.1149 050411 1.4376 1.2002 42.9884 44.3404 47.5402 44.9714
050414 1.3420 1.3217 45.1621 48.5863 51.1532 48.4113 050417 1.3322 1.2002 37.9951 38.8418 38.4087 38.4269 050423 1.0535 1.2002 32.4108 41.3130 43.7795 38.6501 050424 1.9481 1.2002 37.5246 39.8802 42.7414 40.2044 050425 1.4308 1.3217 45.3743 52.0378 53.7887 50.3034 050426 1.7182 1.2002 37.6505 * 37.1444 37.3893
050430 1.0514 * 25.9368 28.7102 * 27.6338 050433 *** * 23.0949 * * 23.0949 050434 0.9730 1.2002 35.4807 34.4698 36.3651 35.4609 050435 1.2470 1.2002 35.7427 35.3040 36.3716 35.8152CMS-1498-P 823

**Provider Number Case-Mix**  **Index 2**  **FY 2011 Wage**  **Index Average**  **Hourly Wage**  **FY 2009 Average**  **Hourly Wage**  **FY 2010 Average**  **Hourly Wage**  **FY 2011 1**  **Average Hourly Wage**  ****** **(3 years)** 050438 1.6093 1.2002 38.2855 36.8507 37.7652 37.6241 050441 2.0773 1.6059 49.2129 50.0652 56.1662 51.9914 050444 1.4821 1.2235 39.3947 39.4231 41.6899 40.2059
050447 *** * 27.1271 * * 27.1271 050448 1.2055 1.2002 32.6682 32.9244 35.5744 33.7517 050454 2.1384 1.5036 43.5230 46.9602 50.6105 47.1838 050455 1.5674 1.2002 35.0232 38.9871 39.4869 37.8773 050456 *** * 27.9702 28.1444 * 28.0651 050457 1.7524 1.5036 53.3175 54.6802 57.1259 55.0565
050464 1.8533 1.2002 42.6699 44.9128 46.6301 44.6843 050468 1.5593 1.2002 37.3416 35.7136 37.0600 36.6946 050470 *** * 32.5041 * * 32.5041 050471 1.6569 1.2002 36.8185 37.6641 40.5399 38.3240 050476 *** * 41.7566 * * 41.7566 050478 0.9581 1.2002 41.5635 44.3775 46.6521 44.3460
050481 1.6201 1.2002 42.8536 47.2326 50.1977 46.8143 050485 1.7165 1.2002 34.7078 37.4203 39.3266 37.2228 050488 1.5157 1.5855 49.3604 53.8013 53.3366 52.2027 050492 1.4172 1.2002 32.6609 35.6838 39.4538 36.0641 050496 1.8243 1.5536 56.7446 57.1030 61.4808 58.5059 050498 1.4628 1.3217 45.3508 46.6560 47.6863 46.5454
050502 1.7474 1.2002 32.9791 40.2876 37.2580 36.7036 050503 1.5401 1.2002 37.7210 40.7324 43.1770 40.6385 050506 1.5155 1.2121 40.6534 42.3670 45.0204 42.6481 050510 1.4186 1.5428 51.3143 54.8690 55.9873 54.0800 050512 1.4447 1.5855 50.1470 53.9292 55.7732 53.3348 050515 1.4010 1.2002 42.0106 45.0972 48.0118 45.0227
050516 1.6158 1.3217 45.6228 48.5267 48.0618 47.4427 050517 1.4708 1.2002 29.3694 29.8385 27.5129 28.8628 050523 1.3871 1.5536 46.9870 49.5029 53.7305 50.2368 050526 1.4939 1.2002 35.5457 * 36.5894 36.0188 050528 1.1577 1.2002 38.3051 41.9922 43.2318 41.2013 050531 1.1682 1.2002 28.4890 28.4921 31.0366 29.3122
050534 1.6008 1.2002 38.1892 39.7655 42.3047 40.1251 050537 1.6440 1.3217 41.5275 43.1765 45.7187 43.4999 050541 1.6420 1.5855 51.4545 55.2594 56.3321 54.3652 050543 0.7871 1.2002 32.8367 29.0470 31.0801 30.9554CMS-1498-P 824

**Provider Number Case-Mix**  **Index 2**  **FY 2011 Wage**  **Index Average**  **Hourly Wage**  **FY 2009 Average**  **Hourly Wage**  **FY 2010 Average**  **Hourly Wage**  **FY 2011 1**  **Average Hourly Wage**  ****** **(3 years)** 050545 0.9027 1.2002 * 27.4889 * 27.4889 050547 1.0068 1.5428 * * * *
050548 0.7480 1.2002 * * * *
050549 1.6820 1.2002 40.6796 44.6715 46.9107 44.1208 050550 *** * 39.2163 * * 39.2163 050551 1.3889 1.2002 37.6223 39.4047 42.2041 39.7598 050552 0.9442 1.2002 35.3468 38.6658 41.1173 38.3633 050557 1.6479 1.2002 39.2224 41.9292 43.9916 41.7837 050561 1.3989 1.2002 40.1567 43.1147 46.9113 43.3701
050567 1.5237 1.2002 39.0114 41.7247 46.3879 42.4571 050568 1.1903 1.2002 26.7733 28.7691 30.1104 28.6056 050570 1.7113 1.2002 40.6761 40.3411 42.9671 41.3473 050573 1.6162 1.2002 36.8561 38.0175 41.0463 38.7328 050575 1.5692 1.2002 22.1018 32.1046 33.5745 29.0057 050578 *** * 43.4917 * * 43.4917
050580 1.3315 1.2002 35.0966 36.7968 33.1767 35.0893 050581 1.6333 1.2002 40.0909 41.9698 45.2924 42.4394 050583 *** * 40.5845 41.3920 * 40.9835 050584 *** * 31.9910 30.8650 * 31.4271 050586 1.6278 1.2002 31.1932 32.7348 32.8095 32.2361 050588 1.4763 1.2002 39.4251 39.0347 41.0641 39.8351
050589 1.2827 1.2002 37.2056 39.2646 40.8842 39.1776 050590 1.4972 1.3217 44.3382 50.0371 49.7328 48.1461 050592 *** * 32.2376 * * 32.2376 050597 1.4581 1.2002 32.8987 35.6567 37.5208 35.3960 050599 2.0012 1.3217 36.6146 38.9877 39.8105 38.5379 050601 *** * 43.2404 43.3329 46.0784 44.2186
050603 1.5047 1.2002 35.4809 37.4348 38.3834 37.1447 050604 1.6291 1.6059 49.6068 54.1687 55.6773 53.0805 050608 1.3872 1.2002 30.7280 28.3794 30.7212 29.9386 050609 1.4301 1.2002 43.4555 45.2475 49.1701 45.9890 050616 1.4949 1.2002 40.7388 45.2614 43.3018 43.0759 050618 0.9683 1.2002 34.9177 34.0584 35.2789 34.7493
050624 1.5075 1.2002 39.2553 40.2253 41.9206 40.5628 050625 1.8425 1.2002 44.8482 48.1826 46.7270 46.6153 050633 1.2030 1.2121 40.7383 41.1786 44.7463 42.2532 050636 1.4438 1.2002 35.4565 38.8844 39.6096 38.0088CMS-1498-P 825

**Provider Number Case-Mix**  **Index 2**  **FY 2011 Wage**  **Index Average**  **Hourly Wage**  **FY 2009 Average**  **Hourly Wage**  **FY 2010 Average**  **Hourly Wage**  **FY 2011 1**  **Average Hourly Wage**  ****** **(3 years)** 050641 1.3049 1.2002 32.0508 33.1417 34.1849 33.1406 050644 1.0475 1.2002 33.2777 32.1513 32.5153 32.6132 050660 1.6423 * * * * *
050662 1.1129 1.6059 * * * *
050663 1.3695 1.2002 17.7252 30.4117 33.0151 26.4022 050667 0.8006 1.4010 25.8460 30.1039 32.0624 28.9596 050668 1.0786 1.5428 52.7011 62.7714 65.4231 60.6295 050674 1.4993 1.3217 48.6880 51.3517 53.4854 51.2273 050677 1.5581 1.2002 41.8130 44.4567 47.7267 44.6382
050678 1.4527 1.2002 35.8411 38.3361 39.9167 38.1597 050680 1.4613 1.5428 39.0389 40.7514 44.0282 41.3411 050682 0.6944 1.2002 22.3903 22.4419 * 22.4133 050684 1.2570 1.2002 33.5915 33.0982 35.4682 34.0341 050686 1.3750 1.2002 42.1444 45.2231 48.0040 45.1124 050688 1.3358 1.6059 53.2741 54.5423 56.6466 54.9010
050689 1.5695 1.5536 48.9935 50.2942 53.7493 51.0590 050690 1.3287 1.5428 51.6179 55.1002 55.3847 54.0619 050693 1.4804 1.2002 42.8266 41.9594 44.4380 43.0972 050694 1.2375 1.2002 34.8486 33.8553 35.2422 34.6536 050696 2.5549 1.2002 39.4353 41.2315 44.0844 41.4935 050697 1.1148 1.3277 26.7600 29.0854 30.2726 28.7053
050701 1.3546 1.2002 37.2839 38.4382 42.7575 39.6135 050704 1.1342 1.2002 32.2017 31.7051 32.1670 32.0293 050707 *** * 44.0254 49.4684 * 46.9800 050708 1.8358 1.2002 28.3074 34.4063 34.8907 31.9717 050709 1.6404 1.2002 29.5364 30.4570 28.8514 29.5817 050710 1.4205 1.2002 46.2533 51.1460 52.8041 50.0857
050714 1.5922 1.6059 42.9797 45.2746 47.4228 45.3980 050717 1.5965 1.2002 37.0875 42.2736 41.8557 40.5623 050720 *** * 32.1173 33.8712 34.7221 33.4577 050722 0.9563 1.2002 35.6741 35.2177 37.3302 36.1210 050723 1.5436 1.2002 42.1571 43.3875 47.0388 44.1779 050724 1.9468 1.2002 35.1020 35.5224 39.0539 36.5017
050725 0.9517 1.2002 28.8389 27.8565 * 28.3307 050726 1.6175 1.2002 30.6105 35.3964 36.4404 34.1918 050727 1.3740 1.2002 33.0932 29.0789 35.3258 32.5219 050732 2.3923 1.2002 34.3475 37.4333 37.9684 36.6936CMS-1498-P 826

**Provider Number Case-Mix**  **Index 2**  **FY 2011 Wage**  **Index Average**  **Hourly Wage**  **FY 2009 Average**  **Hourly Wage**  **FY 2010 Average**  **Hourly Wage**  **FY 2011 1**  **Average Hourly Wage**  ****** **(3 years)** 050733 1.7727 1.3277 40.6320 44.7509 44.5719 43.2177 050735 1.4534 1.2002 36.6081 34.3859 34.2886 35.0721 050736 1.3576 1.2002 41.8938 38.0913 36.6220 38.8361
050737 1.7443 1.2002 38.0424 36.4535 38.0483 37.5164 050738 1.6053 1.2002 43.9259 40.3081 39.1266 41.0361 050739 1.6999 1.2002 57.2480 44.0540 40.0074 45.3865 050740 1.7415 1.2002 54.0370 44.8439 37.0976 43.5160 050741 *** * 51.1526 44.0305 * 47.5915 050742 1.6473 1.2002 39.2532 41.0036 44.3972 41.4615
050744 1.7380 1.2002 48.4951 56.5911 54.9148 53.1646 050745 1.4481 1.2002 42.5523 48.2903 48.8922 46.5732 050746 1.8123 1.2002 43.2015 46.3622 45.1988 44.9325 050747 1.8632 1.2002 44.5887 47.8242 47.3968 46.5482 050748 1.2527 1.2002 43.1008 50.6390 54.1242 49.3277 050749 1.3796 1.2002 28.2000 39.6030 41.4811 35.7689
050750 *** * 33.9915 * * 33.9915 050751 3.5931 1.2002 29.5488 34.0436 36.5150 33.0527 050752 1.4901 1.2002 39.8035 41.3783 42.4687 41.1950 050754 1.2220 1.5182 * 56.3628 * 56.3628 050755 1.6182 1.2002 * 36.5212 36.5251 36.5232 050756 *** * * 33.4951 * 33.4951
050757 1.7470 1.2002 * * 42.3546 42.3546 050758 1.5779 1.2002 * 17.6509 27.8366 21.8706 050759 *** * * * 36.7495 36.7495 050760 1.3958 1.5536 * * * *
050761 1.6126 1.2002 * * * *
050762 1.4125 1.2002 * * * *
050763 0.9992 1.2002 * * * *
050764 1.6615 1.3277 * * * *
050765 1.1291 1.2002 * * * *
050766 1.5412 1.2002 * * * *
060001 1.4318 1.0303 32.4226 32.5239 33.5009 32.8211 060003 1.5346 1.0303 31.8637 33.6264 34.9819 33.5098
060004 1.2485 1.0485 34.8428 34.5727 36.3214 35.2917 060006 1.2988 0.9581 27.6453 30.5664 30.7361 29.6331 060008 1.5166 0.9581 27.2071 26.0851 28.6913 27.3573 060009 1.6004 1.0485 34.0151 35.8398 36.9037 35.5950CMS-1498-P 827

**Provider Number Case-Mix**  **Index 2**  **FY 2011 Wage**  **Index Average**  **Hourly Wage**  **FY 2009 Average**  **Hourly Wage**  **FY 2010 Average**  **Hourly Wage**  **FY 2011 1**  **Average Hourly Wage**  ****** **(3 years)** 060010 1.5399 0.9581 30.6424 33.5549 32.9241 32.3981 060011 1.5301 1.0485 34.4171 34.6239 36.6800 35.2356 060012 1.5328 0.9581 29.4365 29.6957 31.4807 30.2506
060013 1.6156 0.9581 28.0800 29.5100 30.9706 29.5285 060014 2.0318 1.0485 33.0366 35.6231 36.9360 35.1981 060015 2.1471 1.0485 36.3296 36.6824 38.2231 37.1141 060016 1.1827 0.9581 28.3055 30.0601 30.4208 29.6098 060018 1.0992 * 26.5788 * * 26.5788 060020 1.6397 0.9581 26.7362 27.3823 29.0073 27.7438
060022 1.6431 0.9581 31.9376 32.0594 31.6915 31.8828 060023 1.6909 1.0303 32.7922 33.4798 34.9894 33.7723 060024 1.9110 1.0485 32.8206 36.1736 37.9233 35.6626 060027 1.5428 1.0303 31.6134 33.4869 33.6616 32.8750 060028 1.6913 1.0485 33.4966 35.8222 37.1167 35.5436 060030 1.4475 0.9581 31.2932 31.2752 32.9330 31.8568
060031 1.5069 1.0303 30.7381 32.0153 33.2299 32.0027 060032 1.6656 1.0485 34.6447 35.6500 37.4582 35.9181 060034 1.8224 1.0485 33.3656 34.6615 36.1706 34.7283 060036 1.1704 0.9581 20.9370 24.8220 25.3568 23.6418 060041 *** * 31.4739 * * 31.4739 060043 0.8976 0.9581 23.3908 19.9611 20.3282 21.2601
060044 1.2481 0.9581 28.9200 32.0455 32.7653 31.1835 060049 1.4153 0.9581 32.1589 34.5262 35.5353 34.0821 060054 1.4909 1.0051 24.6721 29.2998 32.8197 29.3593 060064 1.8838 1.0485 37.2407 34.7448 36.3099 36.0591 060065 1.4593 1.0485 34.9205 36.2377 37.7892 36.3163 060071 1.1608 0.9581 31.5388 32.1367 32.4497 32.0600
060075 1.4614 1.0051 35.8081 37.3019 40.1016 37.8404 060076 1.3290 0.9581 31.6044 31.5032 31.8373 31.6524 060096 1.8302 1.0303 38.2249 39.9302 42.6189 40.4330 060100 1.7950 1.0485 33.5356 35.7861 36.6803 35.3368 060103 1.4229 1.0303 33.7542 34.9964 36.7528 35.2095 060104 1.5478 1.0485 37.1434 37.4598 39.0604 37.9751
060107 2.0677 1.0485 30.3991 30.0308 30.5898 30.3552 060112 1.7503 1.0485 35.1308 36.4093 37.9928 36.6034 060113 1.5005 1.0485 35.2097 36.0794 38.0309 36.4956 060114 1.6645 1.0485 35.3056 37.1394 37.6554 36.8077CMS-1498-P 828

**Provider Number Case-Mix**  **Index 2**  **FY 2011 Wage**  **Index Average**  **Hourly Wage**  **FY 2009 Average**  **Hourly Wage**  **FY 2010 Average**  **Hourly Wage**  **FY 2011 1**  **Average Hourly Wage**  ****** **(3 years)** 060115 0.9083 0.9581 * * * *
060116 1.4913 1.0303 33.1547 36.3560 36.9071 35.6457 060117 1.3581 0.9581 28.3112 31.6734 31.3013 30.6152
060118 1.4926 1.0303 * 40.2136 39.9922 40.0904 060119 1.9646 0.9581 * * 34.0822 34.0822 060121 2.1298 1.0303 * * 38.3284 38.3284 060123 1.8589 1.0485 * * * *
070001 1.6363 1.2234 37.9438 38.4864 39.3014 38.5781 070002 1.7996 1.1251 36.4269 36.6624 39.3490 37.4818
070003 1.1819 1.1251 36.0524 36.6553 37.6699 36.7817 070004 1.1875 1.1251 31.2115 34.3803 35.1037 33.5419 070005 1.6586 1.2234 36.5502 37.3430 38.3363 37.4209 070006 1.6560 1.2817 41.2165 41.9550 43.2602 42.1481 070007 1.4209 1.1353 37.0984 38.9830 40.3319 38.8215 070008 1.3351 1.1251 35.4969 34.0603 35.8161 35.1073
070009 *** * 36.6382 38.1380 * 37.4141 070010 1.6960 1.2817 38.6114 38.7345 41.3102 39.5949 070011 1.4801 1.1251 32.6835 33.7313 36.9466 34.4150 070012 1.4730 1.1251 33.2477 35.4738 37.5683 35.3833 070015 1.5810 1.2817 39.9249 42.4738 43.1481 41.8469 070016 1.5918 1.2234 34.1266 34.5418 36.2707 34.9884
070017 1.4503 1.2234 37.5855 38.1713 41.0077 38.9339 070018 1.4031 1.2817 42.4771 44.1370 45.8974 44.2078 070019 1.5997 1.2234 35.8618 37.0666 39.8743 37.6317 070020 1.3867 1.1352 35.6542 40.4989 40.6182 39.0618 070021 1.1794 1.1251 39.7793 41.9076 43.8622 41.8599 070022 1.7333 1.2234 41.4721 41.5553 43.2394 42.1299
070024 1.5050 1.1353 36.8997 38.6301 39.2511 38.2737 070025 1.7003 1.1251 36.1322 38.7067 38.9328 37.9080 070027 1.5868 1.1251 33.5979 35.7677 36.5223 35.3536 070028 1.5644 1.2817 40.9645 41.2950 42.0488 41.4517 070029 1.3443 1.1251 32.8504 35.4716 36.0406 34.8141 070031 1.3419 1.2234 30.5924 33.2618 33.5139 32.4882
070033 1.4782 1.2817 44.6717 46.5982 47.7688 46.3583 070034 1.5225 1.2817 42.4111 45.7694 44.0374 44.0855 070035 1.4095 1.1251 33.4047 38.2298 35.3357 35.6697 070036 1.7475 1.1654 43.6374 44.0756 46.4609 44.7773CMS-1498-P 829

**Provider Number Case-Mix**  **Index 2**  **FY 2011 Wage**  **Index Average**  **Hourly Wage**  **FY 2009 Average**  **Hourly Wage**  **FY 2010 Average**  **Hourly Wage**  **FY 2011 1**  **Average Hourly Wage**  ****** **(3 years)** 070038 0.9441 1.2234 29.9516 33.5109 31.4454 31.4773 070039 1.0971 1.2234 32.7153 35.9137 36.2927 35.1271 070040 1.0743 1.1251 * 26.3824 30.5486 28.3408
080001 1.6907 1.0802 34.9507 37.4441 39.1835 37.2540 080002 *** * 33.0404 33.3472 35.2276 33.8892 080003 1.5403 1.0802 30.5132 29.0166 31.5225 30.4059 080004 1.6748 1.0690 34.3854 33.6190 35.0266 34.3423 080006 1.5520 1.0090 31.0327 30.7985 29.2411 30.3636 080007 1.7565 1.0903 33.4782 35.5425 37.5631 35.5927
090001 1.7104 1.0561 40.1658 38.3876 39.8134 39.3691 090003 1.3090 1.0561 34.4430 37.2088 37.3982 36.3730 090004 2.0589 1.0573 38.5681 39.9027 40.6216 39.7496 090005 1.3805 1.0561 35.2884 35.1327 36.9545 35.7927 090006 1.4341 1.0561 32.3654 32.5988 34.9946 33.3147 090008 1.5880 1.0561 36.6633 40.3260 41.7318 39.2644
090011 2.1681 1.0561 39.0111 39.5389 41.3036 39.9493 100001 1.6225 0.8902 27.8526 30.5213 30.2446 29.5877 100002 1.5581 1.0364 30.6668 33.1103 34.4039 32.7223 100006 1.6837 0.9178 28.9769 29.2697 31.1090 29.8250 100007 1.6560 0.9178 30.3379 30.6689 32.7648 31.2751 100008 1.6404 1.0222 32.1679 32.3397 34.9341 33.1587
100009 1.6764 1.0222 30.0492 32.0145 33.5623 31.8710 100012 1.6726 0.9167 30.8626 30.2066 32.0081 31.0290 100014 1.5567 0.9178 27.4064 28.8679 32.2443 29.5972 100015 *** * 28.6825 29.9757 31.5936 30.0347 100017 1.6037 0.9178 29.8705 31.2313 32.0601 31.0930 100018 1.7857 0.9809 32.8642 34.2077 34.9524 34.0313
100019 1.7306 0.9332 31.4549 32.2496 34.2627 32.6917 100022 1.7695 1.0364 36.3355 40.4664 42.4881 39.7952 100023 1.6827 0.9094 27.1032 27.7860 27.8953 27.6060 100024 1.2216 1.0222 29.8918 31.5160 30.5545 30.6338 100025 1.8056 0.8458 27.1665 28.7604 29.6928 28.5823 100026 1.6151 0.8458 27.3044 28.5877 27.8367 27.9162
100028 1.4448 0.9332 28.7801 28.1509 31.9846 29.6732 100029 1.3707 1.0222 31.6006 33.2920 34.8161 33.2424 100030 1.4694 0.9178 26.3113 27.0977 30.8824 28.0853 100032 1.7391 0.9094 27.8942 29.3641 30.3253 29.1887CMS-1498-P 830

**Provider Number Case-Mix**  **Index 2**  **FY 2011 Wage**  **Index Average**  **Hourly Wage**  **FY 2009 Average**  **Hourly Wage**  **FY 2010 Average**  **Hourly Wage**  **FY 2011 1**  **Average Hourly Wage**  ****** **(3 years)** 100034 1.8674 1.0222 28.9387 29.8997 29.6114 29.4885 100035 1.5772 0.9265 32.5593 31.2325 31.4578 31.7203 100038 1.6264 1.0364 32.8392 37.0928 37.1884 35.7516
100039 1.9693 1.0364 29.0236 32.6863 32.2419 31.3704 100040 1.7070 0.8902 28.3366 29.8029 29.6297 29.2510 100043 1.4166 0.9094 26.8417 29.1014 31.1972 28.9417 100044 1.5653 1.0762 34.3920 34.4743 41.7922 37.0061 100045 1.3103 0.9178 25.5621 27.8526 28.1643 27.2127 100046 1.5558 0.9094 27.7878 29.7844 30.9730 29.5992
100047 1.6811 0.9265 31.4072 31.8998 32.2047 31.8452 100048 0.9614 0.8458 21.7693 22.7260 23.5379 22.6813 100049 1.3320 0.8628 27.6316 26.9145 27.7020 27.4184 100050 1.2458 1.0222 23.5222 23.7419 24.5868 23.9540 100051 1.4875 0.9178 30.1492 28.7367 30.6461 29.8530 100052 1.4003 0.8628 25.1110 27.6591 28.4807 27.1112
100053 1.4162 1.0222 31.9268 33.6936 35.2550 33.5895 100054 1.4027 0.8762 30.9840 33.2237 36.2168 33.5037 100055 1.4759 0.9094 29.7027 28.5830 30.4298 29.5982 100057 1.4780 0.9178 27.7045 30.4258 30.5235 29.5810 100061 1.5789 1.0222 31.9174 33.9803 34.8482 33.5811 100062 1.7148 0.8578 26.3067 28.0821 29.2949 27.9112
100063 1.4087 0.9094 27.0769 29.5864 31.2488 29.3363 100067 1.5488 0.9094 27.5501 30.0555 31.5618 29.6772 100068 1.7784 0.9178 27.7707 28.5177 28.0307 28.1041 100069 1.8450 0.9094 29.0486 33.4008 32.7796 31.7251 100070 1.6892 0.9265 29.1117 27.1313 27.9973 28.0427 100071 1.3529 0.9094 25.1883 25.6870 27.8655 26.2748
100072 1.4518 0.9178 27.6947 28.6435 29.6882 28.7088 100073 1.7399 1.0364 31.0395 33.8783 33.7457 32.8947 100075 1.5788 0.9094 26.7571 29.2992 31.2004 29.0714 100076 1.2234 1.0222 24.0280 23.7078 26.3433 24.4935 100077 1.3992 0.9265 27.9783 28.0178 29.5962 28.5634 100079 1.5106 * * * * *
100080 1.6204 1.0364 31.0516 33.2091 35.4485 33.2130 100081 1.0281 0.8565 19.7406 17.2548 17.7222 18.2774 100084 1.6551 0.9178 30.6301 30.7165 35.1858 32.1812 100086 1.5751 1.0364 31.3187 33.0726 33.7048 32.7154CMS-1498-P 831

**Provider Number Case-Mix**  **Index 2**  **FY 2011 Wage**  **Index Average**  **Hourly Wage**  **FY 2009 Average**  **Hourly Wage**  **FY 2010 Average**  **Hourly Wage**  **FY 2011 1**  **Average Hourly Wage**  ****** **(3 years)** 100087 1.8405 0.9265 32.1314 33.4104 33.2328 32.9255 100088 1.7052 0.8902 29.4952 30.3481 30.9148 30.2877 100090 1.4563 0.8902 28.9581 27.4996 28.2012 28.2140
100092 1.5558 0.9332 28.6782 29.1433 29.6087 29.1462 100093 1.7452 0.8458 23.4847 24.9505 25.8345 24.7522 100099 1.1448 0.8628 28.0688 28.2871 30.0337 28.8423 100102 1.0551 0.8458 29.0396 30.0754 28.5248 29.1936 100105 1.5943 1.0283 30.8936 31.5294 33.0707 31.8950 100106 1.0979 0.8458 25.6288 20.6449 26.2560 24.0768
100107 1.2712 0.9167 31.2954 30.9662 32.4297 31.5714 100108 *** * 22.8153 17.9561 17.5426 19.1444 100109 1.3854 0.9178 26.7380 29.1403 29.2478 28.3934 100110 1.6147 0.9178 30.3758 32.4083 32.8616 31.9067 100113 2.0648 0.9406 30.6037 30.9741 33.2418 31.6327 100114 *** * 32.3956 34.3630 * 33.3214
100117 1.1720 0.8902 30.0281 30.6894 31.4492 30.7465 100118 1.4486 0.8458 28.3201 31.3833 28.6480 29.3969 100121 1.1958 0.8628 25.0320 20.0814 27.6294 24.2372 100122 1.2388 0.8762 27.6178 27.9970 28.5222 28.0534 100124 1.1993 0.8458 26.2329 28.2667 28.9298 27.8069 100125 1.2299 1.0222 33.3499 35.2588 37.2705 35.4531
100126 1.3809 0.9094 28.9164 30.3912 31.2105 30.1653 100127 1.6431 0.9094 27.0686 29.3856 31.1177 29.1793 100128 2.2037 0.9094 30.6202 29.6793 31.2298 30.5186 100130 1.3212 1.0364 29.5763 29.9727 29.8339 29.7970 100131 1.3800 1.0222 30.9614 32.2086 33.9594 32.3908 100132 1.3499 0.9094 27.6632 29.3380 30.9567 29.3475
100134 0.8526 0.8458 22.9635 24.7863 23.0684 23.5589 100135 1.6829 0.8981 29.8452 30.2093 34.2492 31.4439 100137 1.4023 0.8628 28.3000 27.8783 28.6777 28.2947 100139 0.9036 0.9406 21.4418 22.1683 21.4572 21.6824 100140 1.1241 0.8902 28.5485 29.7482 30.7155 29.6963 100142 1.2138 0.8458 26.8995 26.8829 25.1309 26.3144
100150 1.2062 1.0222 29.3711 33.0132 32.5785 31.6449 100151 1.9703 0.8902 31.3846 33.1725 34.9557 33.1543 100154 1.7005 1.0222 31.3640 32.3793 34.9899 32.9507 100156 1.1212 0.8458 28.3060 29.9029 31.1552 29.8254CMS-1498-P 832

**Provider Number Case-Mix**  **Index 2**  **FY 2011 Wage**  **Index Average**  **Hourly Wage**  **FY 2009 Average**  **Hourly Wage**  **FY 2010 Average**  **Hourly Wage**  **FY 2011 1**  **Average Hourly Wage**  ****** **(3 years)** 100157 1.5825 0.9094 30.3359 30.4870 31.8594 30.8981 100160 1.1017 1.0222 32.3136 33.8433 35.2448 33.8503 100161 1.6418 0.9178 30.8984 32.6427 33.0240 32.1874
100166 1.6290 0.9265 31.9072 33.0019 34.8424 33.2088 100167 1.5548 1.0364 32.4740 34.8085 36.1348 34.4179 100168 1.7112 1.0364 28.0543 31.1427 32.5053 30.6385 100172 *** * 20.5518 * * 20.5518 100173 1.7179 0.9094 30.2491 30.3599 30.9982 30.5313 100175 1.0188 0.8458 26.1723 26.8828 30.6970 27.8555
100176 1.7599 1.0364 35.5849 35.7433 37.0046 36.1156 100177 1.4618 0.9332 31.0085 31.3830 32.8491 31.7568 100179 1.7363 0.8902 30.5439 31.8790 33.3430 31.9272 100180 1.4792 0.9094 31.5485 32.3796 34.6817 32.8425 100181 1.4002 1.0222 26.0682 26.0880 26.4568 26.2189 100183 1.3902 1.0222 32.9893 31.6760 33.2466 32.6280
100187 1.4893 1.0222 31.6660 31.8020 34.2328 32.5967 100189 1.4419 1.0364 30.5516 32.8847 34.2447 32.5432 100191 1.3645 0.9094 30.9212 31.6024 33.7871 32.0675 100200 1.5295 1.0364 29.0731 32.5611 33.7050 31.7495 100204 1.6164 0.9406 29.9334 30.6252 31.4765 30.6899 100206 1.3259 0.9094 28.8625 30.4576 31.2653 30.2061
100209 1.6863 1.0222 29.0462 30.5582 32.8523 30.8033 100210 1.6173 1.0364 32.4566 33.3016 34.2993 33.3096 100211 1.2867 0.9094 28.8328 30.5902 31.6079 30.3679 100212 1.5679 0.8578 29.2500 30.5141 31.1368 30.3163 100213 1.5727 0.9265 30.2271 31.4309 33.1230 31.5995 100217 1.2905 1.0283 30.3325 33.5767 30.5641 31.4346
100220 1.6269 0.9167 30.8292 31.8393 33.1625 32.0038 100223 1.6223 0.8762 27.6775 28.6449 30.3741 28.8695 100224 1.3813 1.0364 29.2008 31.0307 33.6361 31.2128 100225 *** * 32.6906 31.8048 * 32.2587 100226 1.3734 0.8902 30.2857 30.8904 31.4361 30.8818 100228 1.4519 1.0364 31.0222 32.2672 34.6713 32.6412
100230 1.4348 1.0364 34.6133 35.9319 36.1673 35.6194 100231 1.6148 0.8458 28.3652 28.8912 29.8895 29.0352 100232 1.4309 0.9406 29.3797 30.3768 30.7940 30.1690 100234 1.3292 1.0364 29.7818 33.1508 35.3677 32.6857CMS-1498-P 833

**Provider Number Case-Mix**  **Index 2**  **FY 2011 Wage**  **Index Average**  **Hourly Wage**  **FY 2009 Average**  **Hourly Wage**  **FY 2010 Average**  **Hourly Wage**  **FY 2011 1**  **Average Hourly Wage**  ****** **(3 years)** 100236 1.4897 0.9265 30.5719 31.4385 33.2992 31.8165 100237 *** * 33.9626 33.9696 34.7138 34.1878 100238 1.6561 0.9094 31.6353 32.8745 35.1867 33.2711
100239 1.5075 0.9094 30.3234 32.7150 33.9579 32.2861 100240 1.1030 1.0222 31.0951 35.3888 36.6032 34.5027 100242 1.5952 0.8458 27.8169 28.5034 29.7347 28.6980 100243 1.5542 0.9094 29.8323 31.4863 32.5227 31.3056 100244 1.4331 0.9167 29.8287 29.1611 30.3453 29.7743 100246 1.5614 1.0762 30.0467 32.5063 33.5469 32.0515
100248 1.5668 0.9094 32.4725 33.7659 36.0601 34.0862 100249 1.3514 0.9094 28.5117 29.7981 30.5240 29.6388 100252 1.2169 1.0283 29.1448 31.5631 33.8245 31.4852 100253 1.4998 1.0364 28.5617 29.4959 31.3059 29.8138 100254 1.5108 0.8981 28.5262 28.9095 30.8142 29.4282 100255 1.3545 0.9094 29.5172 30.0466 31.9271 30.4950
100256 1.6224 0.9094 33.3936 34.6637 34.8304 34.2928 100258 1.6613 1.0364 35.2225 34.2862 36.3146 35.2877 100259 1.2922 0.9094 29.9294 32.2273 33.8210 31.9723 100260 1.5192 1.0762 29.4907 31.5667 33.8328 31.6747 100264 1.5444 0.9094 30.1980 31.5050 33.9279 31.9530 100265 1.4504 0.9094 26.6940 28.6915 30.9790 28.8513
100266 1.4224 0.8458 25.6382 26.4488 27.7418 26.6590 100267 1.2849 0.9265 30.6051 32.3955 33.7231 32.2103 100268 1.2089 1.0364 33.6225 33.5314 34.5858 33.9080 100269 1.4107 1.0364 28.3745 30.9572 33.5064 30.8897 100271 2.2229 * * * * *
100275 1.3264 1.0364 31.0487 31.5424 33.3199 32.0064
100276 1.3326 1.0364 31.7067 32.3992 34.3287 32.8345 100277 1.3799 1.0222 25.5926 27.0942 28.4949 27.0616 100279 *** * 31.1951 31.6691 33.9735 32.3443 100281 1.4063 1.0364 32.8840 36.3173 36.3681 35.2827 100284 1.1512 1.0222 21.4420 24.4155 25.5819 23.7595 100285 1.2393 1.0364 34.7999 36.2107 37.2874 36.2349
100286 1.6176 0.9809 26.5809 26.1494 32.3293 29.0001 100287 1.4754 1.0364 30.3085 32.3704 34.0899 32.1810 100288 1.7381 1.0364 32.9587 35.3363 36.0630 34.7728 100289 1.5892 1.0364 31.4727 31.7699 33.2012 32.2125CMS-1498-P 834

**Provider Number Case-Mix**  **Index 2**  **FY 2011 Wage**  **Index Average**  **Hourly Wage**  **FY 2009 Average**  **Hourly Wage**  **FY 2010 Average**  **Hourly Wage**  **FY 2011 1**  **Average Hourly Wage**  ****** **(3 years)** 100290 1.2699 0.9178 29.7588 31.7110 32.8039 31.5893 100291 1.2805 0.9332 28.3780 28.3455 28.7323 28.4870 100292 1.4540 0.8565 28.5807 29.8156 30.8473 29.8365
100296 1.4038 1.0222 31.1475 31.8730 34.2725 32.5067 100298 0.8558 0.8981 21.9247 17.8678 19.4952 19.4589 100299 1.4576 0.9265 31.6840 31.5048 31.4297 31.5278 100300 *** * 33.1693 * * 33.1693 100301 *** * * 33.6261 * 33.6261 100302 1.1221 0.9178 * 27.9362 29.7289 28.8052
100303 *** * * * 24.9650 24.9650 100307 1.5052 0.8902 * * * *
100308 1.8792 0.9094 * * * *
100309 2.7432 0.9824 * * * *
100310 3.4842 0.9824 * * * *
100311 2.4626 0.9094 * * * *
110001 1.4636 0.8602 27.6480 28.5465 29.5684 28.6101 110002 1.3129 0.8970 28.9013 32.2910 31.4618 30.8489 110003 1.3324 0.7782 25.0089 26.0330 25.4762 25.5083 110004 1.3418 0.8794 27.2528 26.8828 29.0667 27.7197 110005 1.4382 0.9572 29.6009 30.4924 30.9276 30.4128 110006 1.6178 0.9348 30.8495 32.2597 34.4102 32.5400
110007 1.7505 0.9098 28.0684 29.8618 31.7901 29.9011 110008 1.4810 0.9572 31.8387 33.5616 31.8787 32.4273 110010 2.4555 0.9572 33.9848 33.7073 37.5179 35.0462 110011 1.4340 0.9572 30.3534 32.2028 34.6167 32.4547 110015 1.0789 0.9572 30.5016 31.7245 32.9437 31.7570 110016 1.3214 0.8621 25.9209 26.3449 27.9587 26.7064
110018 1.4095 0.9572 30.9422 30.8295 32.9879 31.5762 110020 *** * 29.4641 30.4725 31.6465 30.4885 110023 1.4384 0.9572 29.2018 31.1890 31.5376 30.6943 110024 1.5142 0.8858 28.5660 30.7207 31.0718 30.1390 110025 1.4691 0.9352 31.8968 31.0532 32.4958 31.8053 110026 1.1774 0.7782 24.3863 25.6943 25.5958 25.1969
110027 1.0792 0.7782 25.6532 26.2689 26.5342 26.1268 110028 1.8270 0.9571 32.8706 34.0699 34.0976 33.6914 110029 1.8427 0.9572 30.1146 31.6425 33.8978 31.8764 110030 1.4738 0.9572 32.0275 33.2158 35.3984 33.6145CMS-1498-P 835

**Provider Number Case-Mix**  **Index 2**  **FY 2011 Wage**  **Index Average**  **Hourly Wage**  **FY 2009 Average**  **Hourly Wage**  **FY 2010 Average**  **Hourly Wage**  **FY 2011 1**  **Average Hourly Wage**  ****** **(3 years)** 110031 1.2980 0.9572 30.7462 30.4811 31.6496 30.9694 110032 1.2257 0.7782 24.4968 23.1156 25.3848 24.3265 110033 *** * 32.7039 31.9373 * 32.3312
110034 1.8212 0.9571 29.6819 30.4053 34.1394 31.4559 110035 1.6957 0.9572 31.5737 31.8545 33.7827 32.4229 110036 1.9192 0.8858 28.4041 29.4915 30.6530 29.5209 110038 1.6353 0.7840 23.3669 24.2742 26.0470 24.6113 110039 1.3610 0.9571 28.4376 28.9594 29.2688 28.9113 110040 1.0861 0.9572 21.5762 21.1939 23.4093 22.0778
110041 1.4490 0.9348 27.6609 29.2068 29.6983 28.8467 110042 1.0433 0.9572 34.5137 34.0568 35.6003 34.7521 110043 1.8463 0.8858 30.3728 31.1628 31.4697 31.0207 110044 1.1492 0.7782 27.0431 25.0449 25.2725 25.8029 110045 1.0749 0.9572 28.2232 31.6766 31.6090 30.4800 110046 1.1860 0.9572 28.6286 28.4212 30.3845 29.1786
110050 1.0846 0.8483 27.1533 29.2759 30.0217 28.7933 110051 1.1636 0.7782 22.1491 23.3866 25.5805 23.8633 110054 1.5235 0.9572 31.5798 27.9775 28.7220 29.3745 110059 1.1670 0.7782 24.9271 24.4436 25.3086 24.8831 110064 1.7636 0.9119 28.7296 30.0182 33.6996 30.7770 110069 1.4012 0.8970 30.6465 31.0168 29.2608 30.2522
110071 1.0603 0.7782 23.6499 22.6384 22.8137 23.0100 110073 1.1093 0.7782 23.0072 23.4570 24.6046 23.6849 110074 1.6250 0.9348 29.0310 30.4310 32.0070 30.5025 110075 1.3248 0.8858 26.1089 26.7302 27.8478 26.9319 110076 1.6273 0.9572 31.0661 30.4815 31.6821 31.0859 110078 2.1377 0.9572 32.0516 35.8457 34.2909 34.0297
110079 1.5730 0.9572 29.0905 28.9872 29.4495 29.1738 110082 2.0493 0.9572 31.1478 33.1144 35.7031 33.2771 110083 2.0957 0.9572 34.5798 34.7446 35.7676 35.0417 110086 1.3316 0.7782 23.4772 23.1298 23.4255 23.3429 110087 1.6146 0.9572 32.8029 33.9036 33.1508 33.2981 110089 1.0939 0.7782 26.0116 25.4960 27.7584 26.4217
110091 1.4186 0.9572 28.0637 29.4898 30.4058 29.2918 110092 1.1014 0.7782 22.8602 24.5262 28.2182 24.9164 110095 1.4911 0.8547 28.0480 31.2298 30.8338 30.0970 110100 0.9291 0.8572 20.0638 22.9014 22.3608 21.8873CMS-1498-P 836

**Provider Number Case-Mix**  **Index 2**  **FY 2011 Wage**  **Index Average**  **Hourly Wage**  **FY 2009 Average**  **Hourly Wage**  **FY 2010 Average**  **Hourly Wage**  **FY 2011 1**  **Average Hourly Wage**  ****** **(3 years)** 110101 1.0901 0.7849 23.8601 25.5998 27.0115 25.5015 110104 1.2299 0.7782 22.2596 22.3707 22.3377 22.3206 110105 1.3045 0.8547 23.7752 24.6128 25.9808 24.8167
110107 1.9862 0.9368 31.5783 34.3508 31.8817 32.6134 110109 0.9841 0.7782 21.6019 22.5719 24.1377 22.7275 110111 1.2997 0.9571 27.6501 25.7188 26.1218 26.4751 110112 1.0053 0.8547 24.2935 23.2426 23.9046 23.7940 110113 0.9056 0.9571 22.0472 24.2980 23.8703 23.3793 110115 1.8784 0.9572 33.3902 34.4864 35.7096 34.5483
110121 1.0235 0.7782 24.5653 27.4406 28.0044 26.6723 110122 1.5890 0.8795 26.3071 28.0334 29.0791 27.8028 110124 0.9766 0.7782 24.8552 28.7544 30.2200 27.9406 110125 1.3181 0.8970 26.5006 29.4103 30.8516 28.8615 110128 1.3499 0.7782 24.5284 27.1987 29.1767 26.8886 110129 1.6241 0.9119 29.7332 26.8229 29.6690 28.7891
110130 0.8616 0.7782 21.7089 21.0352 21.7302 21.5091 110132 0.9942 0.7782 21.6039 22.3816 23.0261 22.3425 110135 1.4233 0.7782 25.1027 25.6594 25.4541 25.3958 110142 0.9519 0.7967 22.2164 21.2836 23.4220 22.2520 110143 1.4910 0.9572 30.9621 31.3623 33.8251 32.0572 110146 0.9949 0.9352 30.1181 32.7307 33.2928 32.0816
110150 1.3556 0.8970 27.7920 28.7549 25.9718 27.3903 110153 1.2669 0.8970 30.5108 30.2843 29.0378 29.9181 110161 1.6539 0.9572 32.0002 32.9894 34.2402 33.1043 110163 1.5743 0.9098 29.5693 30.7798 31.5968 30.6951 110164 1.7796 0.9368 31.2830 32.7865 34.6876 32.9571 110165 1.5814 0.9572 28.7925 28.4324 29.6512 28.9468
110168 1.8987 0.9572 30.8750 31.8921 32.9718 31.9136 110172 *** * 33.0452 34.0243 * 33.5073 110177 1.9707 0.9571 30.5526 31.9338 34.1139 32.1851 110183 1.3243 0.9572 29.6622 32.0200 32.3945 31.3716 110184 1.2816 0.9572 30.2920 30.8380 33.5282 31.6112 110186 1.3175 0.9119 29.6503 32.0599 32.7164 31.3889
110187 1.2145 0.9572 31.0164 27.6729 30.2062 29.5462 110189 1.0743 0.9572 27.4207 28.9465 30.6935 29.0587 110190 1.0617 0.8470 29.4198 28.7747 35.0710 30.9664 110191 1.4803 0.9572 28.7505 30.0142 32.1599 30.3011CMS-1498-P 837

**Provider Number Case-Mix**  **Index 2**  **FY 2011 Wage**  **Index Average**  **Hourly Wage**  **FY 2009 Average**  **Hourly Wage**  **FY 2010 Average**  **Hourly Wage**  **FY 2011 1**  **Average Hourly Wage**  ****** **(3 years)** 110192 1.5471 0.9572 31.6627 32.6403 33.8949 32.7867 110194 0.8287 0.7782 20.5267 23.2382 22.8941 22.2276 110198 1.4509 0.9572 34.0050 33.2450 34.3576 33.8700
110200 2.3051 0.9119 29.4633 29.6256 31.9920 30.3302 110201 1.5909 0.9368 33.4292 35.8335 37.5429 35.6404 110203 1.0033 0.9572 32.0594 33.0119 39.2026 34.2394 110205 1.1254 0.8289 26.1973 25.5319 25.5795 25.7616 110209 0.8544 0.7782 22.4549 21.6681 24.1927 22.7937 110212 1.1580 0.8131 * 23.4398 24.7805 24.1197
110215 1.5772 0.9572 30.1793 31.2779 34.0438 31.9379 110219 1.5092 0.9572 33.4481 34.8875 35.5795 34.5964 110225 1.4407 0.9572 28.9773 29.6272 31.3111 30.0865 110226 1.2984 0.9572 32.1840 30.2150 31.1969 31.1849 110229 1.5914 0.9572 * * 30.3562 30.3562 110230 1.4559 0.9572 * * 35.0804 35.0804
110231 2.6459 0.9348 * * * *
120001 1.9654 1.1635 39.0371 39.2838 41.7842 40.0704 120002 1.3903 1.1292 37.7287 38.3420 40.8461 39.0696 120004 1.4516 1.1635 32.5164 33.3874 34.8788 33.5345 120005 1.4037 1.1292 35.1996 38.2915 39.9388 37.8326 120006 1.3827 1.1635 35.7089 37.6360 38.8087 37.4368
120007 1.6959 1.1635 35.0193 34.8231 35.1439 34.9953 120010 2.0707 1.1635 34.3371 37.3680 38.3032 36.3762 120011 1.6395 1.1635 43.7527 45.9848 46.1156 45.3395 120014 1.3862 1.1292 34.2127 38.1372 37.5329 36.5854 120019 1.1857 1.1292 36.1879 37.4564 39.5249 37.7583 120022 1.8805 1.1635 34.9048 35.3877 38.3908 36.2596
120026 1.4967 1.1635 35.8413 38.2128 40.8061 38.3647 120027 1.4876 1.1635 31.8177 32.7112 36.4792 33.4996 120028 1.3976 1.1292 34.6354 34.7783 35.3970 34.9858 130002 1.4862 0.9068 24.3501 26.4728 25.9204 25.6067 130003 1.7141 0.9659 29.8793 31.4275 32.0498 31.1265 130006 1.7583 0.9305 29.0504 30.0002 31.6998 30.3256
130007 1.8904 0.9305 31.2268 33.4536 33.5741 32.8364 130013 1.4315 0.9305 33.8928 33.6160 34.7966 34.1028 130014 1.2836 0.9305 28.2831 29.1200 31.1589 29.5140 130018 1.7913 0.9676 30.2047 31.8735 34.0700 32.0682CMS-1498-P 838

**Provider Number Case-Mix**  **Index 2**  **FY 2011 Wage**  **Index Average**  **Hourly Wage**  **FY 2009 Average**  **Hourly Wage**  **FY 2010 Average**  **Hourly Wage**  **FY 2011 1**  **Average Hourly Wage**  ****** **(3 years)** 130024 1.2438 0.8262 25.3197 24.4757 27.9247 25.9223 130025 1.2892 0.7587 23.8592 24.2424 25.4832 24.5583 130028 1.7322 0.9379 29.3374 30.5090 32.7435 30.8806
130049 1.6650 1.0384 29.7211 30.8293 32.3219 31.0108 130062 *** * 28.3419 38.1416 38.2016 35.1513 130063 1.5471 0.9305 27.7697 28.8897 30.6360 29.0590 130065 2.0187 0.9676 25.8998 29.4957 31.7109 28.7350 130066 2.3072 0.9535 28.1502 29.3049 30.2156 29.2289 130067 3.0407 0.9676 26.8285 28.6474 * 27.6699
130068 *** * * 25.8399 * 25.8399 130069 2.8776 0.9305 * * * *
130070 2.9727 0.9305 * * * *
140001 1.2495 0.8749 23.2233 23.7481 24.5618 23.9087 140002 1.5362 0.9060 29.1097 29.6312 30.7187 29.8279 140007 1.5429 1.0503 32.4449 34.2607 34.4024 33.7444
140008 1.5089 1.0515 32.7618 33.2563 33.8475 33.2685 140010 3 1.5525 1.0515 39.3727 39.7245 41.6706 40.3259 140B10 3 *** * 39.3727 39.7245 41.6706 40.3212 140011 1.1871 0.8380 26.2135 27.0019 27.8999 27.0776 140012 1.1826 1.0370 31.9613 33.0198 33.9621 33.0388 140013 1.3956 0.9289 26.4199 28.2787 29.7601 28.1742
140015 1.3818 0.8955 25.2504 25.8304 27.2800 26.1224 140018 1.4659 1.0515 31.5624 31.2535 32.8781 31.9237 140019 0.9025 0.8380 22.2907 22.9179 22.1774 22.4623 140026 1.2390 0.8695 28.1718 28.5497 28.8965 28.5453 140029 1.6147 1.0503 34.8938 37.7285 39.2923 37.4109 140030 1.6091 1.0503 32.1135 32.8927 34.5324 33.1540
140032 1.2724 0.8955 28.5242 28.4605 28.8062 28.6026 140033 0.8477 1.0736 31.4347 32.3417 37.3159 32.3454 140034 1.2373 0.8955 26.7250 27.6121 29.4226 27.8956 140040 1.2933 0.9179 28.5016 30.5814 29.5659 29.5161 140043 1.2977 0.8658 31.3754 34.4429 36.6352 34.1714 140046 1.5473 0.8955 25.7925 26.8384 27.7909 26.8011
140048 1.3808 1.0515 31.6290 34.4373 35.6153 33.9229 140049 1.5889 1.0515 32.0239 33.6104 35.1305 33.5575 140051 1.6022 1.0515 32.6517 32.7898 35.9661 33.8131 140052 1.4729 0.9060 26.7916 27.7932 28.3571 27.6322CMS-1498-P 839

**Provider Number Case-Mix**  **Index 2**  **FY 2011 Wage**  **Index Average**  **Hourly Wage**  **FY 2009 Average**  **Hourly Wage**  **FY 2010 Average**  **Hourly Wage**  **FY 2011 1**  **Average Hourly Wage**  ****** **(3 years)** 140053 1.8431 0.8948 29.9487 32.7126 32.7073 31.7542 140054 1.5563 1.0515 34.5369 36.9786 37.5300 36.3814 140058 1.2163 0.8948 26.5671 28.6945 29.4589 28.2825
140059 1.1060 0.9060 22.8597 24.6248 27.1293 24.8684 140062 1.4327 1.0515 36.6718 38.3407 40.0353 38.3865 140063 1.5742 1.0515 31.1266 34.4732 34.2888 33.3236 140064 1.2440 0.9179 26.6249 28.5964 28.7175 28.0100 140065 1.5255 1.0515 32.4661 34.3988 34.8576 33.9264 140066 0.8358 0.9060 23.6304 24.3856 25.8813 24.6266
140067 1.8100 0.9289 30.6911 31.9470 33.6485 32.1175 140068 1.3473 1.0515 31.3463 32.8724 34.3346 32.8242 140075 *** * 33.6872 34.9376 37.0601 35.1205 140077 1.1765 0.9060 22.5074 24.2006 27.9915 24.7807 140080 1.6004 1.0515 30.3788 33.0275 33.9568 32.4504 140082 1.6828 1.0515 32.0562 33.4686 33.5580 33.0486
140083 1.0840 1.0515 26.1639 29.5034 26.0278 27.1377 140084 1.4066 1.0736 31.3307 32.1286 34.0802 32.4884 140088 2.0925 1.0515 34.4137 36.6991 39.5656 36.8355 140089 1.1697 0.8380 26.6955 27.5295 28.0437 27.4281 140091 1.7821 1.0161 29.7381 33.7851 35.7416 33.1415 140093 1.3604 0.9722 31.2973 29.3377 33.9418 31.5446
140094 0.7328 1.0515 28.8621 28.0819 31.7652 29.3420 140095 1.3861 1.0515 29.9626 35.7876 34.5168 33.4434 140100 1.5029 1.0736 37.3044 39.0405 53.2763 43.9761 140101 1.2867 1.0503 31.0070 32.4260 33.9464 32.5018 140103 1.1752 1.0515 25.3630 26.4236 27.1901 26.3291 140105 *** * 30.7154 * * 30.7154
140110 1.0816 1.0370 31.3486 33.7263 37.0537 34.0414 140113 1.5438 1.0161 31.6191 33.2262 34.9622 33.3322 140114 1.5369 1.0515 31.1412 31.7038 31.4289 31.4242 140115 1.1726 1.0515 26.2606 30.2062 33.4032 29.8398 140116 1.4871 1.0515 34.2519 35.6726 37.3731 35.8074 140117 1.6529 1.0515 28.5809 34.6766 33.8389 32.2626
140118 1.5189 1.0515 33.8168 34.9352 35.7829 34.8477 140119 1.9388 1.0515 34.6543 35.5146 39.1814 36.4476 140120 1.2850 0.9289 26.2418 27.0681 28.1509 27.1802 140122 1.6620 1.0503 32.4750 34.2512 35.7240 34.1638CMS-1498-P 840

**Provider Number Case-Mix**  **Index 2**  **FY 2011 Wage**  **Index Average**  **Hourly Wage**  **FY 2009 Average**  **Hourly Wage**  **FY 2010 Average**  **Hourly Wage**  **FY 2011 1**  **Average Hourly Wage**  ****** **(3 years)** 140124 1.2545 1.0515 38.8976 39.9267 42.6211 40.3601 140125 1.1748 0.9060 27.6352 28.3533 30.1443 28.6668 140127 1.5604 0.9567 29.3352 30.9124 32.7929 30.9550
140130 1.3285 1.0736 34.9907 35.8275 36.5321 35.7850 140133 1.3550 1.0515 32.8941 34.0222 33.5193 33.4793 140135 1.4489 0.9154 25.9057 26.6854 27.2912 26.6118 140137 1.0866 0.9060 * 27.0616 26.9569 27.0094 140143 1.1048 0.8380 27.0312 27.2878 28.8821 27.7646 140145 1.3204 0.9060 26.9344 28.3622 29.2121 28.2021
140147 1.0814 0.8380 22.1035 22.6508 23.5511 22.7827 140148 1.7060 0.8948 28.9471 30.1467 30.0605 29.7419 140150 1.6603 1.0515 39.0316 41.6125 42.0035 40.9013 140151 0.9472 1.0515 27.3552 28.0758 27.9212 27.7895 140152 *** * 32.2803 * * 32.2803 140155 1.3206 1.0370 35.0825 36.2360 42.9342 38.0739
140158 1.4480 1.0515 32.0137 31.7570 32.5513 32.1276 140160 1.3230 0.9874 28.9043 30.0100 29.7281 29.5556 140161 1.4829 1.0370 28.8150 33.5158 34.2463 32.1524 140162 1.6404 0.9567 33.0995 33.2372 34.3289 33.5598 140164 1.7410 0.8380 27.3133 27.5981 28.8827 27.9483 140166 1.2438 0.9154 27.6725 27.5406 28.8318 28.0436
140167 1.1637 0.8380 24.2749 21.2479 26.4163 23.8760 140172 1.4264 1.0515 33.4616 36.8394 37.7898 35.9979 140174 1.6817 1.0503 33.9382 35.1535 37.2213 35.4862 140176 1.2563 1.0515 33.2235 34.3901 35.2474 34.3194 140177 1.0534 1.0515 26.0727 28.0720 30.3713 28.2119 140179 1.4032 1.0515 31.3624 30.6997 31.6593 31.2406
140180 1.4341 1.0515 29.8009 31.4683 33.1831 31.5677 140181 1.2767 1.0515 27.5414 29.0862 28.5827 28.4001 140182 1.5270 1.0515 26.4103 34.4971 35.0847 31.5371 140184 1.4579 0.8380 27.5858 28.2155 30.8810 28.8696 140185 1.4880 0.9060 27.9433 29.7742 31.1163 29.6209 140186 1.5823 1.0370 32.8063 32.5128 33.6497 32.9984
140187 1.5586 0.9060 26.9265 29.2345 29.0150 28.4359 140189 1.2512 0.8380 29.1371 25.9192 29.7443 28.2279 140191 1.4166 1.0515 29.7684 31.4076 32.4757 31.2541 140197 1.0537 1.0515 24.8715 26.9930 26.0614 25.9598CMS-1498-P 841

**Provider Number Case-Mix**  **Index 2**  **FY 2011 Wage**  **Index Average**  **Hourly Wage**  **FY 2009 Average**  **Hourly Wage**  **FY 2010 Average**  **Hourly Wage**  **FY 2011 1**  **Average Hourly Wage**  ****** **(3 years)** 140200 1.5345 1.0503 31.3712 33.2897 34.0868 32.9105 140202 1.4834 1.0736 34.3789 38.4323 37.4214 36.7750 140206 1.1584 1.0515 31.1406 31.5212 27.6427 29.9651
140207 1.2953 1.0515 31.6818 25.8073 32.4874 29.9202 140208 1.8222 1.0515 26.1749 26.2434 36.5625 29.1083 140209 1.6452 0.9289 28.8774 31.5349 31.8673 30.7293 140210 1.0405 0.8380 22.2512 24.1193 24.7376 23.7498 140211 1.4102 1.0503 34.5917 36.0400 37.0954 35.9438 140213 1.2807 1.0503 33.3932 33.6351 35.2016 34.1074
140217 1.5985 1.0503 33.2172 34.8475 36.7916 35.0335 140223 1.6066 1.0515 34.6997 36.6437 38.4099 36.5719 140224 1.4303 1.0515 30.2241 34.4001 32.1594 32.1531 140228 1.4921 1.0052 28.7462 30.7381 33.1724 30.9914 140231 1.5719 1.0503 35.6724 36.3601 38.3032 36.8493 140233 1.7853 1.0052 32.3376 35.7752 36.3886 34.8790
140234 1.0863 0.8695 25.7660 26.9670 27.9382 26.9002 140239 1.7231 1.0052 33.7264 35.6391 35.7029 35.0237 140240 1.4344 1.0515 28.0986 32.9491 34.4714 31.9066 140242 1.6355 1.0503 36.8032 40.7474 41.8148 39.8954 140250 1.2990 1.0515 32.9414 33.7382 35.9552 34.1583 140251 1.4663 1.0515 29.5941 31.5378 33.9137 31.6519
140252 1.5144 1.0515 36.1531 37.6031 38.6010 37.4880 140258 1.7431 1.0515 34.5696 34.9198 36.5007 35.3489 140275 1.4119 0.8658 26.7394 26.7114 28.4089 27.3093 140276 2.0654 1.0515 32.7073 33.1620 35.5860 33.8463 140280 1.4890 0.8658 26.9835 28.0388 28.9833 28.0224 140281 1.7722 1.0515 37.5700 38.6663 40.3035 38.8921
140286 1.2278 1.0503 32.2246 38.2039 37.1421 35.9395 140288 1.6334 1.0503 32.5472 34.1167 37.2937 34.6391 140289 1.3772 0.9060 26.0872 26.7573 27.9748 26.9787 140290 1.5455 1.0515 35.9679 34.5766 36.0910 35.5293 140291 1.6451 1.0736 32.7884 34.2987 37.6820 34.9828 140292 1.3397 1.0503 32.4496 32.9675 34.8169 33.4335
140294 1.2039 0.8380 26.9789 27.4105 29.1291 27.8159 140300 1.0783 1.0515 37.4508 35.5837 50.8399 41.0132 140301 0.9779 1.0515 35.9742 * 25.6069 29.8693 140303 2.2113 1.0515 33.0359 31.4718 27.9269 30.4360CMS-1498-P 842

**Provider Number Case-Mix**  **Index 2**  **FY 2011 Wage**  **Index Average**  **Hourly Wage**  **FY 2009 Average**  **Hourly Wage**  **FY 2010 Average**  **Hourly Wage**  **FY 2011 1**  **Average Hourly Wage**  ****** **(3 years)** 140304 1.4263 1.0503 * * * *
150001 1.2764 0.9555 32.9804 32.5348 32.6297 32.7148 150002 1.6234 1.0370 28.1076 28.3271 29.6905 28.6820
150003 1.7222 0.9253 29.3660 30.1317 33.7073 30.8984 150004 1.5661 1.0370 31.7867 34.4889 35.7071 34.0029 150005 1.3511 0.9555 31.6090 32.6541 33.1179 32.4681 150006 1.4802 0.9488 28.3403 29.7289 30.6306 29.5973 150007 1.5994 0.9010 31.0384 32.4836 32.2298 31.9370 150008 1.4456 1.0370 29.1492 30.9426 33.9870 31.5695
150009 1.5710 0.8850 26.1517 25.9625 26.7891 26.3075 150010 1.6352 0.9010 28.2616 32.8116 30.3873 30.4161 150011 1.3841 0.9555 27.7870 27.8089 29.9431 28.4970 150012 1.5535 0.9889 31.6762 32.0116 33.6506 32.4574 150015 1.4932 0.9069 30.2516 32.6995 36.4154 32.8813 150017 1.7290 0.9245 27.1262 27.4538 30.5938 28.4044
150018 1.6443 0.9488 30.0928 30.9511 32.3280 31.1271 150021 1.7703 0.9245 31.1158 33.1505 34.1233 32.7891 150022 1.0676 0.8557 26.9525 29.7752 29.6975 28.8110 150023 1.5976 0.9555 30.3667 30.8457 32.8854 31.3908 150024 1.6680 0.9555 30.6154 32.1844 32.4374 31.8086 150026 1.2688 0.9488 31.9397 33.1225 34.1049 33.0885
150029 *** * 31.0692 32.1154 34.7470 32.5698 150030 1.1399 0.9555 31.1986 34.5137 33.5357 33.0658 150033 1.4780 0.9555 32.9469 31.7314 32.8768 32.5228 150034 1.5129 1.0370 30.0048 30.9961 32.0665 31.0341 150035 1.4857 0.9069 29.2039 27.9432 28.4279 28.5206 150037 1.4116 0.9555 30.4640 32.2960 34.2666 32.3692
150038 1.2551 0.9555 31.9552 32.2545 32.5543 32.2583 150042 1.3233 0.8757 25.2456 25.2218 26.7161 25.7175 150044 1.5944 0.8850 25.9284 26.6389 28.1622 26.9147 150045 0.9713 0.8399 29.4323 30.0052 30.9207 30.1025 150046 1.5593 0.9254 27.6228 29.7184 30.9654 29.3854 150047 1.6689 0.9245 27.1847 27.9365 31.6507 28.8997
150048 1.5145 0.9637 29.5588 30.5008 32.3958 30.8298 150051 1.6271 0.9555 30.3764 31.2746 32.2657 31.3278 150056 2.0215 0.9555 30.5777 30.8461 32.4031 31.2946 150057 1.8617 0.9555 29.2358 30.4490 32.1298 30.5843CMS-1498-P 843

**Provider Number Case-Mix**  **Index 2**  **FY 2011 Wage**  **Index Average**  **Hourly Wage**  **FY 2009 Average**  **Hourly Wage**  **FY 2010 Average**  **Hourly Wage**  **FY 2011 1**  **Average Hourly Wage**  ****** **(3 years)** 150058 1.6714 0.9889 31.7558 32.4036 35.0250 33.0649 150059 1.4935 0.9555 36.2570 30.4189 32.7391 32.9236 150061 1.1637 0.8399 23.2427 24.7808 25.5354 24.5382
150064 1.1633 0.9555 28.9430 29.7898 31.2189 29.8692 150065 1.2812 0.9555 30.7970 31.7556 30.5764 31.0263 150069 1.1856 0.9637 27.0740 28.6514 29.6637 28.4852 150072 1.1231 0.8504 23.0619 24.6596 25.9259 24.5284 150074 1.4197 0.9555 29.4135 31.6043 32.2693 31.1351 150075 1.1147 0.9245 26.5987 27.1412 29.3253 27.5816
150076 1.3188 0.9488 30.2972 29.4643 30.9772 30.2388 150082 1.5964 0.8399 28.1302 28.0003 28.9121 28.3718 150084 1.8928 0.9555 35.0288 35.4818 35.6641 35.4130 150086 1.1942 0.9637 27.2580 28.8279 29.7408 28.6114 150088 1.3132 0.9555 30.2396 31.9171 33.4869 31.8591 150089 1.7163 0.8736 26.7290 28.0389 28.6143 27.7655
150090 1.4939 1.0370 30.9274 33.6812 32.6472 32.3780 150091 1.1504 0.9245 33.0421 32.9027 32.9069 32.9497 150097 1.2299 0.9555 29.4797 29.9967 31.3599 30.2962 150100 1.6908 0.8399 27.6339 30.0246 30.5792 29.4364 150101 1.0091 0.9245 31.6031 32.5860 33.5799 32.5996 150102 1.0478 0.9069 25.4717 30.4952 30.6858 28.7323
150104 1.2531 0.9555 30.8984 31.2245 32.6367 31.6520 150109 1.6020 0.9253 29.0076 31.0757 31.1542 30.3473 150112 1.5048 0.9555 31.7966 32.0659 33.0833 32.3322 150113 1.2748 0.9555 26.9098 29.0485 31.1284 29.0331 150115 1.3849 0.8399 22.3571 25.0221 22.3911 23.2176 150125 1.5510 1.0370 30.7113 31.6959 31.3249 31.2479
150126 1.3388 1.0370 32.6488 34.5086 34.8705 34.0137 150128 1.4381 0.9555 31.1071 30.7549 33.5421 31.8223 150129 1.4581 0.9555 32.9629 36.4709 35.4468 35.0559 150133 1.1372 0.9488 23.0662 25.1415 27.9662 25.3965 150134 *** * 27.3983 30.4440 * 28.8978 150146 1.1222 0.9457 31.8757 32.9491 33.5246 32.8186
150147 *** * 28.9269 28.9204 25.8261 28.0014 150149 0.9508 0.8399 25.3350 26.4595 28.5387 26.8755 150150 1.3103 0.9245 26.5984 26.5020 30.8735 28.0119 150153 2.2954 0.9555 37.3948 38.6948 40.7215 38.9628CMS-1498-P 844

**Provider Number Case-Mix**  **Index 2**  **FY 2011 Wage**  **Index Average**  **Hourly Wage**  **FY 2009 Average**  **Hourly Wage**  **FY 2010 Average**  **Hourly Wage**  **FY 2011 1**  **Average Hourly Wage**  ****** **(3 years)** 150154 2.2826 0.9555 30.5775 32.3383 33.4212 32.1347 150157 1.7623 0.9555 32.9167 35.4134 36.4550 34.9919 150158 1.3123 0.9555 30.4355 31.5245 33.9116 32.0793
150159 *** * 27.5595 * * 27.5595 150160 2.0703 0.9555 27.6375 31.2957 35.6878 31.9424 150161 1.6991 0.9555 * 32.3409 32.7880 32.5716 150162 1.8807 0.9555 * 32.2317 34.3034 33.2490 150163 1.0317 0.8850 * 26.0437 25.0146 25.4847 150164 1.2919 0.9287 * * 34.3607 34.3607
150165 1.4820 1.0370 * * 29.3019 29.3019 150166 0.9623 1.0370 * * 22.9271 22.9271 150167 2.3686 0.9245 * * * *
150168 2.1247 0.9245 * * * *
150169 1.6356 0.9555 * * * *
150170 1.3876 1.0370 * * * *
150172 1.6329 0.8850 * * * *
150173 1.6384 0.9253 * * * *
150174 0.9714 0.9069 * * * *
150175 2.3255 0.8399 * * * *
150176 2.7334 0.8850 * * * *
160001 1.3311 0.9525 25.8686 27.4207 28.7099 27.3326
160005 1.2769 0.8533 24.8597 25.6204 27.4917 26.1096 160008 0.9769 0.8533 24.1282 24.3704 24.4497 24.3155 160013 1.2219 0.8712 25.5162 26.6913 28.1891 26.7376 160016 1.5478 0.9273 26.6537 27.9879 28.8021 27.8144 160024 1.5796 0.9525 32.4253 32.7762 34.4365 33.1992 160028 1.4350 0.9550 29.8343 32.4639 33.7785 32.0904
160029 1.5442 0.9550 32.2035 33.7679 34.1917 33.3869 160030 1.3905 1.0044 30.4779 32.0333 35.0846 32.5833 160032 0.9942 0.8768 28.5645 29.0326 31.8085 29.8300 160033 1.6046 0.8654 27.4810 27.6537 29.9665 28.3732 160040 1.4565 0.8533 28.2982 27.9810 28.9805 28.4165 160045 1.7963 0.8799 28.1681 30.0063 30.1557 29.4747
160047 1.2816 0.9550 29.4286 31.2897 32.5410 31.0812 160057 1.5524 0.9422 27.7969 28.3640 29.9080 28.7095 160058 2.0933 0.9550 29.8975 31.2742 33.2320 31.5155 160064 1.4740 0.9142 33.6082 32.7787 33.3370 33.2334CMS-1498-P 845

**Provider Number Case-Mix**  **Index 2**  **FY 2011 Wage**  **Index Average**  **Hourly Wage**  **FY 2009 Average**  **Hourly Wage**  **FY 2010 Average**  **Hourly Wage**  **FY 2011 1**  **Average Hourly Wage**  ****** **(3 years)** 160067 1.4190 0.8533 26.7679 27.2055 27.9863 27.3213 160069 1.5388 0.8562 28.4081 29.0981 30.1739 29.2235 160079 1.5326 0.8799 28.5034 29.8338 31.5836 30.0015
160080 1.2455 0.8654 27.8745 27.4136 29.4683 28.2508 160082 1.8108 0.9525 31.7508 34.0609 34.3141 33.3856 160083 1.7250 0.9525 29.9489 31.0514 33.2497 31.4494 160089 1.3913 0.8533 23.9194 25.0810 26.2942 25.0591 160101 1.1089 0.9525 26.8515 27.1889 27.7523 27.2723 160104 1.6136 0.8654 27.0538 27.8486 29.6187 28.2439
160110 1.5439 0.8533 29.9094 30.8876 32.2713 31.0216 160112 1.2738 0.8533 26.1721 26.7136 28.5427 27.1637 160117 1.4386 0.8562 24.3326 28.8434 29.5419 27.4138 160122 1.1901 0.8533 25.3192 26.6212 27.6209 26.5321 160124 1.0341 0.8533 25.5048 27.2937 27.7842 26.8757 160146 1.5275 0.8964 25.1834 27.1213 27.6992 26.6860
160147 1.1959 0.9273 33.6394 37.2058 33.7922 34.8361 160153 1.7431 0.8964 30.4356 32.1357 33.9188 32.1398 160155 *** * * 30.2301 * 30.2301 160156 1.6040 0.8799 * * * *
170001 1.1336 0.8027 24.5942 26.2914 27.4924 26.1347 170006 1.3107 0.8448 28.3527 30.5591 29.7039 29.5405
170009 1.1982 0.9558 32.2847 29.3342 35.8139 32.4214 170010 1.2280 0.8027 28.1802 28.6734 28.0225 28.2857 170012 1.6238 0.8027 28.7878 30.0388 31.3285 30.0679 170013 1.8476 0.8886 28.3051 29.6511 29.3136 29.1030 170014 1.0892 0.9558 25.8165 27.2909 28.6642 27.2564 170016 1.7045 0.9138 28.6817 31.9998 32.2154 30.9367
170017 1.1853 0.8860 29.1463 29.5447 30.5545 29.7618 170020 1.5234 0.8756 25.0561 26.1258 27.5267 26.2659 170023 1.4396 0.8027 24.8827 24.9932 23.5945 24.4631 170027 1.4459 0.8027 24.1133 24.6748 28.0618 25.5280 170033 1.2736 0.8756 25.0404 26.9830 28.5416 26.8290 170039 1.0418 0.8860 23.5975 24.1339 25.9946 24.6007
170040 1.9930 0.9558 30.0828 33.3813 34.7542 32.6359 170049 1.5816 0.9558 31.8595 34.8212 36.0453 34.2790 170058 1.0032 0.9558 28.1330 28.6239 28.3939 28.3847 170068 1.1495 0.8438 23.8509 25.6803 26.5991 25.3770CMS-1498-P 846

**Provider Number Case-Mix**  **Index 2**  **FY 2011 Wage**  **Index Average**  **Hourly Wage**  **FY 2009 Average**  **Hourly Wage**  **FY 2010 Average**  **Hourly Wage**  **FY 2011 1**  **Average Hourly Wage**  ****** **(3 years)** 170074 1.1194 0.8027 24.8871 26.7280 27.0989 26.2418 170075 0.8374 0.8027 21.1965 20.9091 23.3361 21.8104 170086 1.5306 0.9138 28.5260 30.0102 31.6797 30.1229
170094 0.9016 0.8027 17.1719 26.4808 26.5182 22.5983 170103 1.4110 0.8860 25.5671 26.2628 27.2927 26.3968 170104 1.5054 0.9558 29.7793 31.7058 33.9851 31.8232 170105 1.0539 0.8027 23.4332 24.4249 25.3842 24.4229 170109 1.2001 0.9558 29.0197 33.0257 35.5902 32.6026 170110 0.9742 0.8027 24.7927 26.7359 27.8054 26.4654
170120 1.5992 0.8027 23.5287 24.9819 25.5442 24.7148 170122 1.7938 0.8860 29.6337 31.0839 31.6953 30.8189 170123 1.8214 0.8860 28.7627 29.1591 30.2106 29.3841 170133 1.0783 0.9558 25.7129 27.6138 29.6857 27.6809 170137 1.5460 0.8027 26.8029 28.6556 29.7218 28.4175 170142 1.4422 0.8948 25.5567 26.4060 27.8156 26.6242
170145 1.2223 0.8027 25.3745 26.5981 26.7895 26.2826 170146 1.6495 0.9558 31.7023 31.6451 33.8549 32.3707 170147 *** * 21.4581 * * 21.4581 170150 1.1460 0.8193 22.0265 22.2379 22.4168 22.2250 170166 0.9627 0.8027 24.1079 24.4570 25.1569 24.5747 170175 1.2714 0.8756 31.7600 30.1456 32.3747 31.4397
170176 1.6710 0.9558 30.1135 31.4048 32.9892 31.5099 170182 1.4837 0.9558 30.3805 32.3903 32.5488 31.7971 170183 2.0144 0.8860 27.7207 27.5559 27.2280 27.4870 170185 1.3885 0.9558 29.3226 31.0813 31.8944 30.8239 170186 2.5662 0.8860 30.7673 36.3546 37.5555 34.8719 170187 1.8179 0.8027 24.6419 26.2236 27.0072 25.9990
170188 2.0192 0.9558 33.7247 34.0134 35.3969 34.4593 170190 1.0539 0.8027 27.3041 28.7392 29.4546 28.5196 170191 1.6762 0.8027 26.0305 26.2347 26.3239 26.2056 170192 1.8218 0.8860 30.9230 31.7531 31.2301 31.3156 170193 *** * 24.4131 21.9349 * 23.1732 170194 1.3210 0.9558 28.2004 29.8055 35.7190 31.0251
170195 2.6049 0.9558 29.1787 31.0187 31.1434 30.5894 170196 2.4657 0.8860 29.9671 29.9241 30.4796 30.1295 170197 2.3696 0.8860 * * 33.5871 33.5871 170198 1.9628 0.8027 * * 21.2698 21.2698CMS-1498-P 847

**Provider Number Case-Mix**  **Index 2**  **FY 2011 Wage**  **Index Average**  **Hourly Wage**  **FY 2009 Average**  **Hourly Wage**  **FY 2010 Average**  **Hourly Wage**  **FY 2011 1**  **Average Hourly Wage**  ****** **(3 years)** 180001 1.3332 0.9634 29.9674 29.7832 30.9838 30.2388 180002 1.0159 0.8060 27.3344 28.4044 31.5452 29.0298 180004 1.1704 0.7992 22.0626 25.7454 24.9532 24.2670
180005 1.1872 0.7992 27.4317 27.9687 27.9438 27.7826 180007 *** * 26.9440 29.3465 27.5457 27.8795 180009 1.7787 0.8919 28.7048 28.9804 29.4309 29.0610 180010 2.0260 0.8798 28.2168 29.8818 30.7775 29.6381 180011 1.7841 0.8798 25.0372 26.6072 27.6650 26.5198 180012 1.5168 0.8848 27.2851 27.8386 29.2425 28.1376
180013 1.5078 0.9320 26.8108 28.6307 30.5698 28.7209 180016 1.3865 0.7992 26.9539 28.2975 29.3722 28.1740 180017 1.3206 0.8347 25.4174 26.0927 26.1053 25.8753 180018 1.4264 0.7992 24.9874 25.0082 26.1033 25.3849 180019 1.1841 0.7992 27.6801 27.5969 28.3775 27.8968 180020 1.0587 0.8060 26.8865 29.8100 32.2271 29.5397
180021 0.9701 0.7992 22.3768 24.2127 25.2066 23.9245 180024 1.2076 0.8389 26.9553 27.8181 29.6250 28.1394 180025 1.4648 0.8848 28.4172 30.2576 30.4293 29.7381 180027 1.1926 0.7992 23.3881 24.0032 25.5862 24.3439 180029 1.3851 0.8798 26.3907 29.1400 33.4416 29.5244 180035 1.5342 0.9634 34.0370 36.6577 38.6645 36.4402
180036 1.4322 0.8919 30.2643 31.9987 31.3634 31.1868 180037 *** * 33.1897 28.5734 * 30.8765 180038 1.6881 0.7992 28.2430 28.5219 29.7930 28.8753 180040 1.8998 0.8848 30.2471 28.9562 29.2132 29.3762 180043 1.0208 0.7992 24.0582 25.0444 25.3256 24.8642 180044 1.7655 0.8767 25.7990 27.7934 29.8308 27.8637
180045 1.4112 0.9634 29.9366 29.9395 30.5356 30.1379 180046 1.1858 0.8798 28.5568 30.0536 32.2894 30.3563 180048 1.3799 0.8848 24.6800 25.3490 26.8313 25.6487 180049 1.5640 0.8480 23.5756 25.8921 26.3445 25.2345 180050 1.0789 0.7992 26.7726 29.9911 31.6423 29.3799 180051 1.3473 0.7992 25.2369 26.2560 27.0283 26.1992
180053 0.9345 0.7992 23.0302 24.6694 23.9194 23.8815 180056 1.1784 0.8393 26.3973 26.6223 27.8825 26.9638 180064 1.3127 0.8306 21.9517 22.5090 22.7958 22.4385 180066 1.0981 0.8431 24.9542 27.2184 27.9417 26.6868CMS-1498-P 848

**Provider Number Case-Mix**  **Index 2**  **FY 2011 Wage**  **Index Average**  **Hourly Wage**  **FY 2009 Average**  **Hourly Wage**  **FY 2010 Average**  **Hourly Wage**  **FY 2011 1**  **Average Hourly Wage**  ****** **(3 years)** 180067 2.0349 0.8798 29.6053 28.9896 30.0550 29.5697 180069 1.0562 0.8767 27.6785 29.9406 32.9994 30.0147 180070 1.3985 0.8232 21.3707 22.8450 24.2407 22.8589
180078 1.1477 0.8767 29.2136 27.4672 28.5438 28.3969 180079 1.1129 0.8251 24.9911 27.2710 26.6427 26.2944 180080 1.2983 0.7992 25.3013 27.2402 28.8798 27.1688 180087 1.3935 0.7992 22.1063 23.2617 24.6628 23.3436 180088 1.8784 0.8848 30.7954 31.8151 32.8838 31.8430 180092 1.2199 0.8798 25.2900 27.0330 26.1035 26.1598
180093 1.6163 0.7992 22.3330 23.5805 24.2302 23.4008 180095 0.9817 0.7992 21.2162 23.9869 25.2742 23.4675 180101 1.3075 0.8798 28.8772 29.6176 31.3685 30.0013 180102 1.5096 0.8361 27.3901 28.3445 26.8886 27.5244 180103 1.8987 0.8798 29.7648 31.7171 33.5024 31.6641 180104 1.5028 0.8361 27.1292 28.7669 29.7545 28.5731
180105 0.9798 0.7992 24.3663 22.9902 23.8783 23.7503 180106 0.8418 0.7992 21.2271 20.1899 21.6369 21.0328 180115 0.9093 0.7992 22.7095 24.9627 24.7222 24.1589 180116 1.3811 0.8361 26.8850 26.9052 28.8350 27.5313 180117 0.8909 0.7992 24.9571 25.9593 32.4322 27.4620 180124 1.4443 0.9320 27.1359 28.2511 30.0346 28.4149
180127 1.3104 0.9634 28.3635 29.8610 30.7333 29.6661 180128 0.9465 0.7992 23.7778 23.9098 25.5746 24.4176 180130 1.6650 0.8848 29.6751 31.2746 32.7395 31.2576 180132 1.3644 0.8798 29.0563 29.5884 29.0754 29.2355 180138 1.2014 0.8848 29.2603 30.7144 32.5413 30.8691 180139 1.0292 0.7992 26.2450 28.3450 28.6303 27.6831
180141 1.9520 0.8848 28.7329 29.5347 30.4173 29.5803 180143 1.7482 0.8798 28.0780 29.0323 30.9817 29.3864 180149 1.0602 0.7992 16.4918 16.3670 21.0293 17.8136 180150 *** * * 27.9388 * 27.9388 180151 *** * * * 30.5548 30.5548 190001 1.2286 0.7946 22.5331 25.3862 29.4366 25.9390
190002 1.6804 0.8473 25.9387 27.1770 27.9755 27.0325 190003 1.4192 0.8473 28.0899 30.5381 32.3943 30.3019 190004 1.5130 0.7992 24.6563 27.0776 27.9541 26.6299 190005 1.6165 0.9005 28.3308 32.9927 37.7220 33.1294CMS-1498-P 849

**Provider Number Case-Mix**  **Index 2**  **FY 2011 Wage**  **Index Average**  **Hourly Wage**  **FY 2009 Average**  **Hourly Wage**  **FY 2010 Average**  **Hourly Wage**  **FY 2011 1**  **Average Hourly Wage**  ****** **(3 years)** 190006 1.3802 0.8473 25.4826 28.9179 29.0341 27.9150 190007 1.1745 0.7946 24.0538 24.6117 25.6561 24.7757 190008 1.7700 0.7992 27.2683 28.1194 28.2325 27.8874
190009 1.0153 0.8164 25.0269 24.8263 26.5888 25.4978 190011 1.0472 0.8122 21.9174 24.2068 26.6802 24.1700 190013 1.5009 0.8202 22.8380 25.2468 25.4352 24.5312 190014 1.1793 0.7946 24.5410 25.6064 40.7501 28.3699 190015 1.4420 0.9005 26.9591 29.5241 30.0800 28.8947 190017 1.4652 0.8473 25.5477 26.9640 25.4720 25.9802
190019 1.7524 0.8164 27.6057 28.6311 28.7429 28.3536 190020 1.3278 0.8726 24.2361 25.9262 28.0273 26.1642 190025 1.3326 0.7946 26.5949 26.6296 28.3544 27.1661 190026 1.7583 0.8164 25.3752 27.0875 28.8897 27.0946 190027 1.6967 0.8202 31.5047 29.4789 30.4014 30.3905 190034 1.1283 0.8135 22.9920 24.3969 26.3116 24.6129
190036 1.7818 0.9005 29.1818 27.7969 28.4731 28.4470 190037 0.7254 0.8202 28.0463 19.5982 18.7972 23.3675 190039 1.6259 0.9005 24.6848 29.0738 29.9665 27.9939 190040 1.4743 0.9005 28.2444 29.0914 29.9696 29.1339 190041 1.5169 0.8651 28.7702 29.3296 30.0940 29.3847 190044 1.2801 0.8207 22.2462 23.1701 24.3770 23.2873
190045 1.5746 0.9005 27.5873 29.2569 30.1234 29.0388 190046 1.6328 0.9005 25.1890 30.9760 30.5410 29.0312 190050 1.2653 0.7990 22.7962 23.6921 25.5258 24.0045 190053 1.2074 0.8047 20.6289 22.1404 23.5988 22.1805 190054 1.3179 0.8031 23.5137 26.5586 26.1148 25.4390 190060 1.4983 0.8202 19.8911 25.1496 27.7720 23.8818
190064 1.7058 0.8726 26.9960 28.6273 31.9836 29.2661 190065 1.7366 0.8726 22.9861 24.3651 27.9398 25.1110 190078 1.1497 0.8133 25.6943 26.0185 29.3271 27.0437 190079 1.1235 0.9005 25.3344 28.0268 29.1127 27.5269 190081 0.8388 0.7946 20.4111 21.2224 19.7228 20.4547 190086 1.3020 0.8122 22.2852 24.2040 26.9719 24.3187
190088 1.0754 0.8333 24.7450 29.5999 28.2045 27.5180 190090 0.9838 0.7946 25.8610 25.0681 27.3204 26.0691 190098 1.7167 0.8651 27.5058 27.8846 30.6530 28.7025 190099 1.0253 0.8135 25.7488 25.7136 28.4919 26.6705CMS-1498-P 850

**Provider Number Case-Mix**  **Index 2**  **FY 2011 Wage**  **Index Average**  **Hourly Wage**  **FY 2009 Average**  **Hourly Wage**  **FY 2010 Average**  **Hourly Wage**  **FY 2011 1**  **Average Hourly Wage**  ****** **(3 years)** 190102 1.5099 0.8473 28.3090 28.6165 29.3771 28.7633 190106 1.1005 0.8164 24.2759 25.5188 28.9361 26.2131 190111 1.7590 0.8651 27.3192 28.8406 30.5678 28.9640
190114 1.0703 0.7946 20.3651 21.1463 21.6231 21.0606 190115 *** * 26.0285 25.7014 26.8130 26.0523 190116 1.0753 0.8031 24.2154 24.4439 24.8437 24.4763 190118 1.0876 0.8651 22.6572 22.3386 23.2836 22.7652 190122 1.0958 0.8726 22.8681 24.5686 31.3913 26.4871 190124 *** * 28.6713 * * 28.6713
190125 1.6466 0.8122 26.6269 26.9761 28.3593 27.4096 190128 1.0737 0.8726 31.1819 32.2095 33.7971 32.4200 190131 1.0333 0.8726 28.5946 29.9837 * 29.2828 190133 0.9268 0.8048 23.9550 27.2643 30.2477 27.1223 190135 1.4976 0.9005 35.0547 43.3956 30.1783 34.5478 190140 0.9443 0.7981 23.6713 23.2346 24.0204 23.6404
190144 1.3143 0.8651 24.8866 25.8501 28.3036 26.4021 190145 0.9783 0.8036 21.3988 22.1298 23.2156 22.2666 190146 1.5988 0.9005 28.5984 29.8336 31.9250 30.1773 190151 0.8796 0.7946 20.6970 23.0032 23.1695 22.2541 190152 *** * 34.6508 34.6962 * 34.6751 190158 *** * 21.5594 * * 21.5594
190160 1.5857 0.8122 25.8646 26.4460 30.4379 27.3739 190161 1.1145 0.8202 23.8073 24.8249 29.2908 26.0454 190164 1.1621 0.8022 27.7265 28.2630 29.1501 28.3895 190167 1.1858 0.8473 27.1981 29.3971 31.7116 29.4476 190175 1.4156 0.9005 30.5948 31.4039 32.4181 31.4544 190176 1.8915 0.9005 28.2192 32.2906 33.3670 31.0851
190177 1.8394 0.9005 29.7252 30.9158 33.1157 31.2414 190182 *** * 30.7058 * * 30.7058 190183 1.3719 0.7992 23.3462 25.0395 27.3509 25.2419 190184 0.9910 0.7993 22.6144 22.5006 23.5652 22.8901 190185 *** * 36.7317 * * 36.7317 190190 0.9500 0.8122 27.5051 27.5875 28.9875 28.1199
190191 1.2692 0.8133 26.9656 28.1116 32.0257 28.8862 190196 0.8810 0.8473 27.7824 28.4697 30.6579 29.0035 190197 *** * 28.7044 29.4072 * 29.0218 190199 1.0401 0.8726 36.7128 29.8286 28.2996 31.3500CMS-1498-P 851

**Provider Number Case-Mix**  **Index 2**  **FY 2011 Wage**  **Index Average**  **Hourly Wage**  **FY 2009 Average**  **Hourly Wage**  **FY 2010 Average**  **Hourly Wage**  **FY 2011 1**  **Average Hourly Wage**  ****** **(3 years)** 190201 1.1431 0.8202 26.8550 27.8244 29.9264 28.1877 190202 1.6103 0.8726 27.6463 27.8790 27.6445 27.7278 190204 1.5181 0.9005 32.9140 31.9034 33.9644 32.9173
190205 1.7463 0.8473 30.1687 31.6103 32.4248 31.3896 190206 *** * 32.0180 30.4228 * 31.2019 190208 0.8027 0.7946 24.9405 27.5238 30.0154 27.5723 190218 0.8614 0.8651 26.5251 26.9305 28.1252 27.1844 190236 1.4843 0.8651 26.9059 28.6472 30.3119 28.6612 190241 1.3729 0.7992 26.5320 27.5130 28.2954 27.5238
190242 1.3789 0.8726 26.9729 28.7307 28.2808 28.0344 190245 1.4118 0.8122 26.4166 26.6403 28.0180 26.9888 190246 2.1718 0.7993 31.7158 31.5003 31.9438 31.7321 190249 *** * 27.0975 28.3211 25.9997 26.9704 190250 2.2150 0.9005 32.8381 35.2699 34.8604 34.3606 190251 1.3719 0.8726 25.1594 27.3657 22.3853 24.6260
190253 *** * 22.2227 * * 22.2227 190255 0.8263 0.8473 23.8035 27.8066 29.2058 26.9371 190256 1.0879 0.9005 25.9365 28.7148 28.7915 27.9122 190257 1.7222 0.8122 22.7512 24.2936 25.5176 24.1258 190258 1.8369 0.8651 25.1993 27.7948 22.8748 24.8290 190259 2.1986 0.8473 27.5518 28.9188 32.6301 29.7424
190260 *** * 33.6227 * * 33.6227 190261 1.5307 0.8122 25.4757 28.7987 29.7560 28.0746 190263 2.3305 0.8473 29.7063 36.3082 35.0861 33.5957 190265 *** * 30.9260 * * 30.9260 190266 2.9075 0.8726 24.3809 32.3423 32.8535 29.9624 190267 1.4667 0.9005 24.2794 27.6254 30.2475 27.6505
190268 1.5022 0.8473 29.1425 25.8619 27.3050 27.2594 190270 1.8564 0.9005 * 28.5382 29.0574 28.8214 190272 1.3915 0.8473 28.4558 28.4184 23.0702 27.0083 190273 1.8338 0.8726 * 22.7627 21.7837 22.2231 190274 1.8427 0.9005 * * 28.1128 28.1128 190275 *** * * * 29.8209 29.8209
190278 2.3634 0.8651 * * 23.8972 23.8972 190297 1.1631 0.7946 * * * *
200001 1.3741 0.9695 28.1145 28.9839 29.1670 28.7667 200002 1.2267 0.9509 33.2695 30.4965 27.7502 29.9690CMS-1498-P 852

**Provider Number Case-Mix**  **Index 2**  **FY 2011 Wage**  **Index Average**  **Hourly Wage**  **FY 2009 Average**  **Hourly Wage**  **FY 2010 Average**  **Hourly Wage**  **FY 2011 1**  **Average Hourly Wage**  ****** **(3 years)** 200008 1.4018 0.9930 29.3538 32.3955 34.1427 32.0121 200009 1.9252 0.9930 35.0743 36.9995 36.6216 36.2321 200018 1.3541 0.8589 24.6790 25.4228 25.7060 25.2725
200019 1.4200 0.9930 28.3413 30.1233 30.4156 29.6126 200020 1.2880 1.0218 34.5762 36.9185 40.2167 37.3309 200021 1.2139 0.9930 28.7614 31.8322 32.8539 31.2416 200024 1.6897 0.9509 31.0799 31.6913 31.9731 31.6024 200025 1.0822 0.9930 29.3607 30.2866 27.5904 29.0492 200031 1.2922 0.8589 23.7553 25.5973 25.9030 25.1172
200032 1.0966 0.8920 27.2276 27.8426 29.5270 28.2308 200033 1.8148 0.9695 33.6293 34.8017 34.8344 34.4346 200034 1.5798 0.9509 28.0417 28.5612 29.9180 28.9063 200037 1.1561 0.8589 26.7815 27.9167 29.6936 28.2024 200039 1.3319 0.9509 28.8043 29.9958 31.1083 30.0137 200040 1.0262 0.9930 25.5519 29.6104 29.7535 28.2949
200041 1.2990 0.8589 27.5067 28.7604 34.7992 30.1914 200050 1.1681 0.9695 30.1473 32.0363 34.1295 32.1599 200052 1.0602 0.8589 25.6238 24.4545 27.8885 25.8956 200063 1.1945 0.8589 28.2203 29.6832 30.0507 29.3664 210001 1.5177 0.9692 31.2355 30.9218 34.1438 32.0935 210002 2.0643 1.0198 36.0252 36.8782 37.3977 36.7890
210003 1.5893 1.0561 28.2566 34.4117 33.3073 31.8002 210004 1.4458 1.0573 33.9037 32.4548 34.4088 33.6063 210005 1.4195 1.0573 32.4081 32.2224 36.0013 33.5795 210006 1.1291 1.0198 27.9859 31.8510 33.3367 31.1101 210007 1.7980 1.0198 31.4125 35.3019 40.3645 35.4047 210008 1.4858 1.0198 31.8535 33.0343 33.6017 32.8716
210009 1.8265 1.0198 31.8273 34.4385 37.6659 34.7016 210011 1.4747 1.0198 30.7547 29.7694 28.5986 29.6638 210012 1.7244 1.0198 32.5327 33.8099 34.9535 33.8058 210013 1.3276 1.0198 32.1180 35.6347 35.7358 34.5777 210015 1.3298 1.0198 31.6903 34.7961 35.0662 33.9077 210016 1.8075 1.0573 35.3253 37.1478 38.1774 36.9059
210017 1.1984 0.9305 26.6208 27.9652 27.6553 27.4194 210018 1.2329 1.0573 31.5460 33.7284 36.4156 33.9785 210019 1.7439 0.9305 30.5485 30.8121 31.7957 31.0539 210022 1.5465 1.0573 36.1833 35.8394 37.6708 36.5871CMS-1498-P 853

**Provider Number Case-Mix**  **Index 2**  **FY 2011 Wage**  **Index Average**  **Hourly Wage**  **FY 2009 Average**  **Hourly Wage**  **FY 2010 Average**  **Hourly Wage**  **FY 2011 1**  **Average Hourly Wage**  ****** **(3 years)** 210023 1.5697 1.0277 34.1664 35.8243 37.3156 35.8033 210024 1.7983 1.0198 34.5548 36.7920 36.9018 36.1089 210025 1.3682 0.9305 23.5175 28.3956 29.8053 27.1446
210027 1.4746 0.9305 25.2143 25.6339 27.5980 26.1526 210028 0.9952 0.9559 28.5214 31.7636 34.3131 31.6983 210029 1.3475 1.0198 32.9100 33.9139 34.5075 33.8223 210030 1.1460 0.9305 29.1790 33.8729 34.4330 32.5402 210032 1.2840 1.0802 29.2785 31.6516 32.2034 31.0732 210033 1.2494 1.0198 28.4350 33.0982 34.9230 32.1677
210034 1.3548 1.0198 33.0407 35.1533 36.2172 34.8437 210035 1.3316 1.0561 30.6692 28.7165 34.0007 31.1344 210037 1.2971 0.9305 28.8708 31.0096 32.7661 30.9387 210038 1.3568 1.0198 31.1563 32.7411 36.1404 33.3841 210039 1.1580 1.0561 35.1172 33.7557 36.9817 35.3260 210040 1.2899 1.0198 31.0882 30.5834 32.5361 31.4068
210043 1.3938 1.0277 29.2762 31.9196 36.7035 32.5832 210044 1.3943 1.0198 31.5463 31.9067 33.9671 32.5153 210045 0.9460 0.9305 19.6112 23.8454 23.8643 22.3580 210048 1.4049 1.0198 29.2464 30.6650 32.7111 30.9342 210049 1.3689 1.0198 28.5970 31.5740 32.8713 31.1060 210051 1.3877 1.0561 30.7954 33.0355 33.8704 32.6204
210054 1.3042 1.0561 28.6905 32.3079 30.9544 30.6912 210055 1.3146 1.0561 30.2010 36.7615 34.9377 33.7047 210056 1.4309 1.0198 33.2271 35.5593 36.1736 34.9799 210057 1.4422 1.0573 33.7287 34.3643 36.7381 34.9642 210058 1.3962 1.0198 32.0669 32.9569 31.3100 32.0828 210060 1.1535 1.0561 32.5141 34.1974 35.0184 33.9386
210061 1.3663 0.9305 26.6842 28.6561 29.3158 28.2516 220001 1.3129 1.1613 32.0843 34.3993 36.2517 34.3061 220002 1.3674 1.1613 35.9765 37.9204 41.2350 38.3812 220008 1.3871 1.1613 35.8680 37.3794 38.4715 37.2430 220010 1.2534 1.1613 33.7392 36.1759 37.2035 35.7194 220011 1.1936 1.1613 39.1234 41.0183 43.4600 41.2510
220012 1.4849 1.2825 41.7080 43.0551 45.5643 43.4397 220015 1.2957 1.0361 35.2373 36.6427 36.3548 36.1085 220016 1.1444 1.0361 33.1424 34.9714 36.4237 34.8489 220017 1.3175 1.2342 34.6575 38.0626 37.7006 36.8223CMS-1498-P 854

**Provider Number Case-Mix**  **Index 2**  **FY 2011 Wage**  **Index Average**  **Hourly Wage**  **FY 2009 Average**  **Hourly Wage**  **FY 2010 Average**  **Hourly Wage**  **FY 2011 1**  **Average Hourly Wage**  ****** **(3 years)** 220019 1.1234 1.1613 26.3018 28.0084 29.0921 27.8076 220020 1.2029 1.1613 32.1528 33.6332 35.4990 33.7696 220024 1.3423 1.0361 33.0415 33.8692 34.5389 33.8318
220025 0.9616 1.1613 27.6973 26.6082 29.5458 27.9060 220029 1.2117 1.1613 32.6792 34.8311 36.1946 34.5999 220030 1.0618 1.0361 29.3714 28.8797 29.5814 29.2776 220031 1.5941 1.2342 39.4214 43.7983 46.0432 43.1210 220033 1.2423 1.1613 34.7005 36.1938 40.1729 37.0696 220035 1.4532 1.1613 36.1799 37.2879 39.7370 37.7407
220036 1.5744 1.2342 37.7301 37.0998 37.8321 37.5495 220046 1.5340 1.0483 33.8604 36.3356 37.2026 35.8565 220049 1.2222 1.1613 35.1134 35.7550 37.2433 36.0618 220050 1.1147 1.0361 30.3176 32.4636 33.3155 32.0704 220051 1.4962 0.9671 32.8693 34.7850 33.7650 33.7771 220052 1.2183 1.2342 34.9151 34.9505 36.2809 35.4000
220058 0.9958 1.1613 30.0344 31.9532 34.4760 32.1059 220060 1.1949 1.2342 36.8668 39.1180 41.3006 39.2150 220062 0.7353 1.1613 27.4755 27.3983 28.6128 27.8434 220063 1.3010 1.1613 32.2442 34.6004 35.5788 34.2281 220065 1.2968 1.0361 32.3814 33.6328 34.7541 33.5673 220066 1.4186 1.0361 * 32.6289 35.0834 33.8457
220067 1.2573 1.2342 33.9836 35.7611 37.4704 35.7586 220070 1.1469 1.1613 35.6271 37.4036 39.9838 37.7577 220071 1.8988 1.2342 40.0313 44.2752 46.1244 43.5120 220073 1.2200 1.1613 37.4249 38.9942 39.6789 38.7046 220074 4 1.3861 1.1613 33.2081 34.5531 36.8098 34.8867 220B74 4 *** * 33.2082 34.5530 36.8098 34.8283
220075 1.6785 1.2342 33.3578 33.9698 34.7027 34.0072 220077 1.7243 1.1117 34.7345 36.4382 37.4924 36.2651 220080 1.2906 1.1613 33.1640 36.8086 36.4484 35.4648 220082 1.4119 1.1613 32.2124 33.0780 34.8104 33.3699 220083 1.1280 1.2342 35.2758 37.6415 40.5366 37.8780 220084 1.3987 1.1613 34.6275 36.1148 37.5379 36.1306
220086 1.8041 1.2342 36.2385 38.7853 41.1551 38.7907 220088 2.0559 1.2342 37.0840 37.3891 39.2279 37.9115 220090 1.2951 1.1613 35.8969 36.8628 39.5926 37.5164 220095 1.1067 1.1613 31.1644 34.1504 35.3675 33.6005CMS-1498-P 855

**Provider Number Case-Mix**  **Index 2**  **FY 2011 Wage**  **Index Average**  **Hourly Wage**  **FY 2009 Average**  **Hourly Wage**  **FY 2010 Average**  **Hourly Wage**  **FY 2011 1**  **Average Hourly Wage**  ****** **(3 years)** 220098 1.1646 1.1613 31.1288 32.1864 33.5413 32.2804 220100 1.3340 1.2342 35.7309 36.5606 38.7440 37.0351 220101 1.4456 1.1613 37.7292 39.3939 41.7554 39.6905
220105 1.2292 1.1613 35.8179 36.6444 39.1029 37.2192 220108 1.2101 1.2342 35.7009 37.1981 38.4718 37.1647 220110 2.0616 1.2342 43.8444 45.3683 47.3232 45.5499 220111 1.2935 1.2342 35.6223 36.8788 39.2865 37.3009 220116 1.8798 1.2342 40.0982 44.6345 47.0582 43.9023 220119 1.1259 1.2342 33.7200 36.2751 37.4673 35.8320
220126 1.2307 1.2342 35.6278 40.5321 38.0733 38.0049 220135 1.4968 1.2825 39.0296 40.3011 42.8827 40.7443 220153 *** * 20.5063 17.4773 19.0273 19.2029 220154 *** * * * 43.7359 43.7359 220162 1.7710 * * * * *
220163 1.6759 1.1613 39.4893 41.6485 42.2659 41.1896
220171 1.6535 1.1613 36.4567 39.7385 38.8272 38.4029 220174 1.2280 1.1613 32.9140 35.8880 34.9007 34.5714 220175 1.3204 1.1613 34.1572 36.6376 38.0801 36.2674 220176 1.5591 1.1613 31.4220 36.2759 38.1158 35.1359 220177 0.9796 0.9671 * * * *
230002 1.4172 0.9849 33.9708 34.2904 35.4085 34.5484
230003 1.4546 0.9386 28.9886 28.5041 30.5808 29.4057 230004 1.7665 0.9829 33.4644 33.1555 34.1260 33.5840 230005 1.3107 0.9078 29.0634 30.5550 31.3029 30.3037 230013 1.3464 1.0134 28.6430 29.9019 31.7651 29.9529 230015 1.1276 0.8900 28.9601 29.8884 32.5133 30.4506 230017 1.7269 1.0313 36.8045 35.5276 37.9122 36.7658
230019 1.6780 1.0134 35.1440 34.8302 36.2716 35.4350 230020 1.7393 0.9849 29.9492 30.4302 31.1906 30.5265 230021 1.6302 0.9979 29.5414 30.4315 31.6153 30.5478 230022 1.1397 0.9759 25.7846 29.5713 32.6757 29.2761 230024 1.7276 0.9849 34.5278 35.1416 35.9913 35.2122 230029 1.7576 1.0134 33.1482 35.5257 33.5106 34.0740
230030 1.3448 0.9102 25.1929 27.8555 29.6479 27.5704 230031 1.5302 0.9725 30.8870 30.9321 31.8722 31.2241 230034 1.3190 0.8605 29.1098 29.8711 29.1077 29.3790 230035 1.3229 0.9315 25.7099 27.0372 27.3075 26.6792CMS-1498-P 856

**Provider Number Case-Mix**  **Index 2**  **FY 2011 Wage**  **Index Average**  **Hourly Wage**  **FY 2009 Average**  **Hourly Wage**  **FY 2010 Average**  **Hourly Wage**  **FY 2011 1**  **Average Hourly Wage**  ****** **(3 years)** 230036 1.4412 0.8891 31.0938 31.9872 32.2768 31.7900 230037 1.2616 0.9849 28.8547 31.4423 32.0467 30.7793 230038 1.7841 0.9386 30.1040 31.5536 32.5264 31.4308
230040 1.1548 0.9315 27.2850 27.6894 27.5684 27.5177 230041 1.6226 0.9481 30.3082 31.7229 32.9174 31.6784 230046 1.9829 1.0107 33.5304 34.3952 35.9760 34.6925 230047 1.6075 0.9776 32.0248 33.2300 33.7264 32.9936 230053 1.7703 0.9849 33.5440 34.1884 35.6490 34.5004 230054 1.8298 0.9249 28.1229 28.5274 28.7117 28.4479
230055 1.3352 0.8605 28.1881 28.2657 29.6910 28.7240 230058 1.2321 0.8605 27.9643 29.2185 29.8956 29.0455 230059 1.6857 0.9386 28.3602 30.3935 32.7833 30.4889 230060 1.2298 * 28.7760 30.7515 * 29.7837 230066 1.2837 0.9829 32.3582 32.8383 34.5386 33.2625 230069 1.2686 0.9849 31.9675 33.3136 33.1722 32.8338
230070 1.6133 0.9210 28.0366 32.2151 31.6902 30.6210 230071 1.2460 1.0134 28.8879 29.6172 29.7855 29.4320 230072 1.4884 0.9386 28.8024 29.3214 30.4713 29.5569 230075 1.5124 0.9806 32.1166 33.2981 33.0856 32.8458 230077 1.8634 1.0134 31.0123 32.2274 33.2565 32.1576 230078 1.1159 0.8605 27.0069 27.7143 28.9163 27.8714
230080 1.1863 0.8605 25.6204 25.9082 27.1896 26.2395 230081 1.3269 0.8605 27.8106 27.9649 28.8068 28.1980 230085 1.1525 1.0313 27.6474 28.1395 28.6603 28.1833 230089 1.4386 0.9849 32.2311 34.4092 * 33.3212 230092 1.4241 0.9483 30.5417 29.5262 32.3303 30.8026 230093 1.1780 0.8663 27.0572 27.7275 27.1808 27.3255
230095 1.1846 0.8891 25.9210 25.9787 26.7295 26.2107 230096 1.1720 0.9979 29.7225 30.9326 35.3084 32.0067 230097 1.6800 0.9315 31.5174 32.2990 31.8133 31.8763 230099 1.2400 0.9849 29.0975 30.7388 31.3316 30.3938 230100 1.4065 0.8605 25.6594 25.9480 27.1021 26.2240 230101 1.1279 0.8605 28.8608 29.4146 30.2722 29.5256
230104 5 1.7305 0.9849 34.0195 34.0176 35.3943 34.4648 230B04 5 *** * 34.0195 34.0176 35.3943 34.4605 230105 1.7055 0.9315 32.1124 33.0444 32.7701 32.6587 230106 1.1686 0.9386 30.0223 29.0344 31.2500 30.1013CMS-1498-P 857

**Provider Number Case-Mix**  **Index 2**  **FY 2011 Wage**  **Index Average**  **Hourly Wage**  **FY 2009 Average**  **Hourly Wage**  **FY 2010 Average**  **Hourly Wage**  **FY 2011 1**  **Average Hourly Wage**  ****** **(3 years)** 230108 1.2433 0.8605 25.7477 25.4728 26.0197 25.7525 230110 1.3362 0.8605 27.0280 29.0921 30.1801 28.7817 230117 1.8114 1.0313 33.9176 33.6962 34.2863 33.9717
230118 1.2950 0.8605 24.8638 27.1359 28.4445 26.8191 230119 *** * 33.2050 33.6503 * 33.4472 230121 1.3766 1.0144 27.7512 28.9511 30.8615 29.1524 230130 1.7250 1.0134 32.5613 33.6704 34.9198 33.7273 230132 1.6023 1.1382 38.2454 39.2894 39.7151 39.0892 230133 1.3475 0.8605 25.8537 26.1806 25.7151 25.9203
230135 1.0031 0.9849 31.5194 32.6527 * 32.0720 230141 1.6878 1.1382 36.3124 36.2647 40.7648 37.7993 230142 1.4114 0.9849 29.9911 30.2157 31.2257 30.4794 230146 1.4359 0.9849 29.0218 29.3346 30.5060 29.6420 230151 1.4202 1.0134 28.6724 28.6413 30.4839 29.2693 230156 1.7070 1.0107 34.7865 35.1696 34.0537 34.6666
230165 1.6917 0.9849 32.2855 31.9887 33.4514 32.6026 230167 1.6598 1.0269 32.8092 35.8019 36.9076 35.1687 230174 1.4021 0.9386 31.2469 31.6387 31.5781 31.4917 230176 1.4667 0.9849 29.2688 29.5281 30.9173 29.9026 230180 1.2683 0.8605 24.6007 28.1401 29.3516 27.1906 230190 *** * 33.6724 30.7924 36.7558 33.6260
230193 1.4023 0.9725 28.4641 29.1474 31.5897 29.7561 230195 1.5647 0.9776 32.5549 33.4975 33.4337 33.2184 230197 1.7706 1.1382 34.8066 36.4129 39.0787 36.8022 230204 1.4815 0.9776 30.1982 31.5389 34.3475 31.9741 230207 1.4333 1.0134 26.8231 27.2054 27.4081 27.1461 230208 1.2571 0.9315 25.2481 25.8892 27.8814 26.3666
230212 1.0316 1.0107 33.4379 34.3917 34.3170 34.0488 230216 1.5184 0.9725 28.9586 30.7478 30.8494 30.1826 230217 1.5091 0.9806 33.0839 35.4957 36.9025 35.2407 230222 1.6616 0.8891 32.4404 30.6277 29.6522 30.8343 230223 *** * 31.8146 34.2971 * 33.0613 230227 1.5877 0.9776 34.2762 35.4364 37.2215 35.5888
230230 1.4717 1.0269 31.4953 31.2614 35.4132 32.7682 230236 1.5236 0.9386 31.9100 32.1973 33.9442 32.7342 230239 1.4068 0.8605 23.5461 26.8301 25.7446 25.3678 230241 1.2282 0.9725 30.0248 28.4771 28.1985 28.8297CMS-1498-P 858

**Provider Number Case-Mix**  **Index 2**  **FY 2011 Wage**  **Index Average**  **Hourly Wage**  **FY 2009 Average**  **Hourly Wage**  **FY 2010 Average**  **Hourly Wage**  **FY 2011 1**  **Average Hourly Wage**  ****** **(3 years)** 230244 1.4335 0.9849 32.5586 33.0082 34.3841 33.3260 230254 1.5845 1.0134 31.6332 33.3035 35.0125 33.2978 230257 0.9982 0.9776 30.0674 32.6298 33.3636 32.2062
230259 1.4407 1.0107 27.9572 28.7672 29.1866 28.6444 230264 2.1717 0.9776 29.2202 35.0990 32.8671 32.3761 230269 1.4542 1.0134 34.2694 34.4514 35.2440 34.6832 230270 1.4328 0.9849 29.2408 29.0416 30.1197 29.4618 230273 1.5702 0.9849 32.5730 32.6874 34.8800 33.4102 230275 0.5916 0.9210 22.3740 * 22.6311 22.5224
230277 1.6115 1.0134 32.2545 33.8036 33.9308 33.3444 230279 0.6904 0.9849 26.8552 26.8567 28.8581 27.5609 230297 1.8559 0.9849 * 35.4246 38.9109 37.1670 230300 *** * * 40.1731 * 40.1731 230301 1.2227 1.0134 * * 29.1394 29.1394 230302 1.4906 1.0134 * * * *
240001 1.5641 1.1027 37.2211 38.3979 41.1376 38.9343 240002 1.8190 1.0682 34.6368 36.8748 39.2785 37.0047 240004 1.8454 1.1027 33.4596 36.5476 38.0780 36.0985 240006 1.2478 1.0759 32.8229 29.6609 33.3951 31.7330 240010 2.0987 1.0759 35.9131 37.5473 37.9757 37.1825 240014 1.0711 1.1027 33.4492 35.0675 34.9155 34.4959
240018 1.3136 0.9951 30.5645 32.3271 33.2201 32.0521 240019 1.1884 1.0682 34.2547 36.7033 37.3681 36.1294 240020 1.1431 1.1027 34.5703 34.6135 36.6782 35.2976 240022 1.0184 0.9146 28.5905 29.9313 31.1852 29.9071 240030 1.5777 0.9146 27.6596 29.4253 30.4810 29.1808 240036 1.5881 1.1027 37.2207 39.2407 40.6853 39.1270
240038 1.5960 1.1027 34.7357 35.8365 37.8663 36.2048 240040 1.0412 1.0682 30.0255 31.3287 34.0437 31.7765 240043 1.2674 0.9146 25.7424 27.1539 28.4042 27.1230 240044 1.0396 0.9771 28.5705 29.8375 29.2879 29.2433 240047 1.5709 1.0682 35.6763 36.7122 36.2255 36.2136 240050 1.2531 1.1027 33.7964 34.6160 36.3370 34.9328
240052 1.2601 0.9146 31.0934 33.1438 33.8454 32.7273 240053 1.6040 1.1027 34.4210 35.4738 36.3414 35.4352 240056 1.3478 1.1027 35.8603 36.1085 32.7052 34.7799 240057 1.9154 1.1027 34.8374 35.4436 38.0303 36.0623CMS-1498-P 859

**Provider Number Case-Mix**  **Index 2**  **FY 2011 Wage**  **Index Average**  **Hourly Wage**  **FY 2009 Average**  **Hourly Wage**  **FY 2010 Average**  **Hourly Wage**  **FY 2011 1**  **Average Hourly Wage**  ****** **(3 years)** 240059 1.1327 1.1027 32.5958 33.5784 33.2499 33.1597 240061 1.8971 1.0759 34.6031 36.2545 37.5561 36.1385 240063 1.6747 1.1027 36.9822 38.3735 38.3869 37.9467
240064 1.2584 0.9280 29.9917 34.2284 35.6462 33.1970 240066 1.6077 1.1027 39.6609 38.4941 39.9654 39.3787 240069 1.2417 1.1027 31.1673 31.6325 35.5345 32.8398 240071 1.1899 1.1027 32.5460 33.1094 35.2567 33.6586 240075 1.2925 0.9146 30.3230 31.5984 32.9126 31.6235 240076 1.1549 1.1027 33.7950 35.4135 37.1723 35.5183
240078 1.7615 1.1027 36.2276 37.3608 39.4962 37.7013 240080 2.0360 1.1027 36.5390 37.7353 39.9460 38.0844 240084 1.1431 1.0682 29.0275 30.3789 32.3263 30.5812 240088 1.2605 0.9146 30.7240 31.4165 32.7525 31.5969 240093 1.5139 0.9270 30.4744 31.3517 32.3639 31.4358 240100 1.3557 0.9146 30.9481 32.5307 33.0821 32.1908
240101 1.1930 0.9146 28.5503 28.7121 29.5095 28.9269 240104 1.3000 1.1027 35.8839 36.0711 40.4033 37.5188 240106 1.6415 1.1027 33.9984 36.8942 39.4450 36.7952 240115 1.5182 1.1027 36.2788 37.5802 38.9388 37.6716 240117 1.2305 0.9673 29.0894 30.4437 29.6594 29.7231 240132 1.4186 1.1027 36.4252 37.0941 37.9072 37.1624
240141 1.1176 1.1027 34.2473 35.8696 37.1809 35.6971 240166 1.2510 0.9146 26.1732 27.3184 28.1765 27.2416 240187 1.2545 1.1027 30.9646 33.5186 33.4717 32.6497 240196 0.8864 1.1027 35.0345 35.4472 38.7978 36.4399 240206 0.8428 1.4448 * * * *
240207 1.3525 1.1027 36.4569 37.7179 39.4085 37.8940
240210 1.3728 1.1027 36.5950 37.7064 38.2195 37.5323 240211 0.6922 0.9958 16.6158 16.1460 16.5163 16.4219 240213 1.4249 1.1027 37.4608 38.4222 39.6158 38.5555 250001 2.1543 0.8125 24.3404 26.7079 28.0700 26.4339 250002 0.9292 0.8035 25.0342 31.2353 32.6776 29.5266 250004 1.8180 0.8981 24.8086 29.1096 30.0764 27.9177
250006 1.1385 0.8981 27.0511 26.9193 29.3899 27.7903 250007 1.1775 0.8923 29.3479 32.6672 31.9040 31.2803 250009 1.4344 0.8379 24.9118 25.9247 27.4133 26.1295 250010 1.0254 0.7738 22.7988 23.8749 24.5667 23.7460CMS-1498-P 860

**Provider Number Case-Mix**  **Index 2**  **FY 2011 Wage**  **Index Average**  **Hourly Wage**  **FY 2009 Average**  **Hourly Wage**  **FY 2010 Average**  **Hourly Wage**  **FY 2011 1**  **Average Hourly Wage**  ****** **(3 years)** 250012 0.9436 0.9213 26.4110 29.8873 27.8154 28.0019 250015 1.3891 0.7738 22.3685 22.7775 24.6835 23.2714 250017 0.9972 0.7738 25.7404 25.5007 22.3075 24.4789
250018 0.7464 0.7738 19.1108 19.5527 20.4538 19.7094 250019 1.6160 0.8923 27.7230 28.4743 30.6079 28.9597 250020 0.9777 0.7738 23.1521 26.9602 27.3319 25.8108 250023 0.8903 0.8350 19.5081 22.2932 17.2321 19.5475 250025 1.1249 0.7738 23.0555 26.0579 25.2972 24.7574 250027 0.9255 0.7738 32.5451 26.7593 26.0044 28.1387
250031 1.3465 0.8125 26.7507 28.6356 29.2948 28.1906 250034 1.6373 0.8981 27.9279 29.3365 30.0088 29.1234 250035 0.7907 0.7738 20.5251 24.0653 21.6802 22.1592 250036 0.9473 0.8182 22.5676 22.6781 24.7319 23.3935 250038 0.8901 0.8125 30.7960 27.1958 27.6152 28.2419 250040 1.6037 0.8350 26.2268 28.4423 29.0586 27.8924
250042 1.2263 0.8981 27.4610 25.8791 30.3623 27.9247 250043 1.0488 0.7738 21.1265 22.4618 22.6912 22.0994 250044 0.9899 0.7738 26.1732 26.9451 27.9188 27.0217 250048 1.5964 0.8125 27.6339 27.4186 27.6442 27.5667 250049 0.9434 0.7738 24.2227 24.2129 21.5835 23.2761 250050 1.2840 0.7738 22.4429 22.6843 23.7790 23.0068
250051 0.7692 0.7738 14.1662 15.6982 15.7373 15.2520 250057 1.2695 0.7738 22.9683 22.5524 25.9738 23.8179 250058 1.2848 0.7738 19.6720 20.4748 22.1248 20.7697 250059 0.9412 0.7738 25.5982 24.8145 23.7995 24.7437 250060 0.8138 0.7738 27.0354 31.0689 32.3114 29.8012 250061 0.8353 0.7738 25.1495 23.3006 22.9622 23.7108
250067 1.1274 0.7738 23.8027 28.2894 27.2284 26.3793 250069 1.6226 0.8022 23.4495 25.8456 27.7173 25.6762 250072 1.7556 0.8125 27.5791 30.5382 33.2443 30.4790 250077 0.9612 0.7738 19.6333 19.3962 20.7217 19.9362 250078 1.7165 0.8350 23.9598 26.5481 27.5440 26.0252 250079 0.8236 0.8125 46.0349 32.3758 33.2547 37.9283
250081 1.4366 0.8022 24.8281 23.1385 25.6748 24.4935 250082 1.5383 0.8311 25.6218 27.8096 29.4889 27.6785 250084 1.1549 0.7738 19.5694 20.1192 21.2261 20.3028 250085 0.9389 0.7738 24.6757 24.5765 25.8783 25.0289CMS-1498-P 861

**Provider Number Case-Mix**  **Index 2**  **FY 2011 Wage**  **Index Average**  **Hourly Wage**  **FY 2009 Average**  **Hourly Wage**  **FY 2010 Average**  **Hourly Wage**  **FY 2011 1**  **Average Hourly Wage**  ****** **(3 years)** 250093 1.2675 0.7738 26.4351 27.0937 28.9844 27.5340 250094 1.6566 0.8350 25.4232 26.1331 28.4550 26.7033 250095 1.1011 0.8125 25.9021 30.7505 25.2111 27.0637
250096 1.2779 0.8125 27.7291 27.5206 29.1993 28.1437 250097 1.5766 0.8580 22.7916 23.6607 24.1451 23.5520 250099 1.4358 0.8125 27.5757 25.0076 26.7877 26.4479 250100 1.4971 0.8022 27.5484 28.2019 29.4874 28.4283 250102 1.5878 0.8125 25.5327 27.8758 27.2188 26.8670 250104 1.4298 0.8022 25.4008 26.3140 25.7731 25.8274
250112 0.9397 0.7738 27.4162 29.6978 23.5300 26.6029 250117 1.0807 0.8350 24.5706 26.0965 24.8866 25.2046 250122 1.1551 0.7738 23.4908 27.3606 31.2642 27.3826 250123 1.3700 0.8923 29.8299 29.5520 32.4487 30.5969 250124 0.8592 0.8125 21.9420 22.4247 23.9262 22.8076 250125 *** * 32.7411 29.0819 31.9629 31.3858
250126 1.0391 0.9213 25.2581 26.8712 26.7811 26.3514 250127 0.8051 1.4448 * * * *
250128 1.0195 0.8184 23.5918 24.7051 26.7124 25.1932 250134 0.9778 0.8125 22.0846 40.7995 30.5066 30.6943 250136 1.0796 0.8125 27.1479 27.8270 30.6565 28.5419 250138 1.3635 0.8125 27.3132 27.0688 29.2021 27.8594
250141 1.5961 0.9213 33.4413 32.1496 31.6915 32.3561 250149 0.8744 0.7738 17.0964 17.2423 20.1488 18.0903 250151 0.6315 0.7738 * 17.3962 25.0894 22.4010 250152 0.9097 0.8125 28.5526 29.8216 30.9016 29.7410 250161 *** * * 26.0070 * 26.0070 250162 1.0038 0.8937 * * 31.4828 31.4828
260001 1.7887 0.8448 31.1866 28.6690 30.0120 29.9052 260004 0.9453 0.8127 23.9584 24.1764 25.5508 24.5784 260005 1.6662 0.9060 31.1050 33.1020 35.2618 33.2207 260006 1.5176 0.8127 33.8253 34.3548 36.2278 34.8344 260009 1.1928 0.8605 26.6685 26.2248 26.1705 26.3503 260011 1.6596 0.8605 31.2612 31.4415 31.7034 31.4717
260015 1.1557 0.8127 25.0250 25.1585 26.2721 25.5036 260017 1.3354 0.8605 26.2621 27.4586 29.5743 27.7703 260020 1.7611 0.9060 30.9599 32.0889 31.9904 31.7069 260021 1.4447 0.9060 19.5810 19.3770 32.4283 21.7242CMS-1498-P 862

**Provider Number Case-Mix**  **Index 2**  **FY 2011 Wage**  **Index Average**  **Hourly Wage**  **FY 2009 Average**  **Hourly Wage**  **FY 2010 Average**  **Hourly Wage**  **FY 2011 1**  **Average Hourly Wage**  ****** **(3 years)** 260022 1.4859 0.8261 25.9391 25.6866 26.7028 26.0941 260023 1.5492 0.9060 25.5899 26.7586 27.4201 26.6186 260024 1.1778 0.8127 20.7136 22.4347 22.9479 22.0397
260025 1.4225 0.8955 24.5042 24.4959 24.4546 24.4847 260027 1.8912 0.9558 31.0236 32.3066 33.7779 32.3722 260032 1.9415 0.9060 28.7183 29.8257 30.8428 29.7999 260034 0.9685 0.8127 28.7736 29.7821 29.4705 29.3435 260040 1.7603 0.8413 27.3680 28.5035 29.9909 28.6335 260047 1.4981 0.8127 27.2667 27.1986 27.8259 27.4384
260048 1.2788 0.9558 29.6969 30.1691 30.8650 30.2475 260050 1.0775 0.8127 27.8065 27.6085 33.8795 29.6615 260052 1.3299 0.9060 29.6998 31.5722 32.2076 31.2112 260057 1.0671 0.9558 23.8181 27.0128 27.1389 26.1324 260059 1.2757 0.8204 25.3025 26.9521 27.3419 26.5876 260061 1.1228 0.8127 23.6717 24.7824 27.0467 25.1434
260062 1.3726 0.9558 29.6156 30.7159 32.0976 30.8722 260064 1.4339 0.8216 21.4932 23.6002 25.8393 23.6092 260065 1.7126 0.8413 28.3411 29.9325 29.6384 29.3273 260068 1.7723 0.8261 28.1246 29.3972 29.5631 29.0347 260070 0.8779 0.8127 25.2997 26.2370 25.8550 25.8217 260074 1.2943 0.8261 28.6216 28.4171 29.3367 28.7901
260077 1.7066 0.9060 28.7204 28.9940 29.4958 29.0802 260078 1.2849 0.8127 23.1785 24.7794 25.1259 24.3417 260080 1.0588 0.8127 18.6813 19.0041 19.1541 18.9629 260081 1.6605 0.9060 32.0799 34.8761 40.1198 35.5606 260085 1.6239 0.9558 29.6514 30.4727 31.6239 30.5668 260091 1.5674 0.9060 30.2636 32.9623 33.9609 32.4273
260094 1.6223 0.8413 25.1491 27.0127 27.2078 26.4777 260095 1.5411 0.9558 29.9090 30.9142 30.5602 30.4766 260096 1.6341 0.9558 32.9383 33.1804 34.9570 33.7008 260097 1.1617 0.8427 27.3129 28.2444 28.5379 28.0218 260102 1.0526 0.9558 30.7678 29.1467 30.1752 29.9874 260104 1.7078 0.9060 29.5891 32.0122 33.6904 31.7812
260105 1.8595 0.9060 32.4292 33.4278 35.1672 33.6282 260107 *** * 29.7775 38.3668 * 33.8526 260108 1.8751 0.9060 28.5654 30.1064 31.5495 30.0747 260110 1.6558 0.8810 28.0381 28.5364 30.1062 28.9080CMS-1498-P 863

**Provider Number Case-Mix**  **Index 2**  **FY 2011 Wage**  **Index Average**  **Hourly Wage**  **FY 2009 Average**  **Hourly Wage**  **FY 2010 Average**  **Hourly Wage**  **FY 2011 1**  **Average Hourly Wage**  ****** **(3 years)** 260113 1.2656 0.8380 23.0826 23.6758 25.6538 24.1544 260115 1.2365 0.9060 25.5658 26.5268 27.1964 26.4347 260116 1.0191 0.8380 22.5536 25.1758 27.7471 24.8978
260119 1.3362 0.8363 31.5003 26.4382 26.5894 27.9902 260137 1.7978 0.8448 31.4091 28.3521 29.0069 29.4979 260138 2.0048 0.9558 31.7582 33.4156 34.9809 33.4163 260141 2.0499 0.8261 26.6684 28.3492 28.1099 27.7524 260142 1.2469 0.8127 22.8205 25.0940 24.1327 24.0438 260147 0.8251 0.8127 22.9689 22.8326 25.3191 23.5737
260159 *** * 24.3027 25.5039 26.0684 25.2758 260160 1.0383 0.8271 26.6715 27.9585 25.0259 26.6874 260162 1.4325 0.9060 30.5761 32.3673 33.0717 32.0297 260163 1.2350 0.8214 23.8644 25.0443 26.1076 25.0496 260166 *** * 29.5259 30.6020 * 30.0575 260175 1.0460 0.9558 25.7069 26.5767 28.1661 26.8058
260176 1.7475 0.9060 30.6205 32.4957 33.1495 32.1198 260177 1.3018 0.9558 29.0815 31.1662 33.9925 31.4147 260178 1.9849 0.8261 26.9902 28.9170 29.8616 28.6265 260179 1.5711 0.9060 29.6316 30.3276 30.8119 30.2731 260180 1.7531 0.9060 30.7336 31.4721 32.7989 31.6539 260183 1.6167 0.8810 31.4916 32.2621 31.3742 31.7100
260186 1.5186 0.8605 29.1874 30.8706 32.4493 30.8711 260190 1.3538 0.9558 30.9003 32.2069 34.1815 32.3839 260191 1.5869 0.9060 27.8648 28.7185 29.0100 28.5516 260193 1.3548 0.9558 29.5436 30.5190 31.7196 30.5601 260195 1.4152 0.8127 25.0294 25.6697 26.6828 25.8073 260198 *** * 27.9093 31.4660 * 29.5529
260200 1.4152 0.9060 30.5032 32.0910 35.5276 32.9288 260207 1.1898 0.8413 23.6392 22.8308 22.7884 23.0797 260209 1.0738 0.8605 26.4203 33.7185 32.9213 30.8380 260210 1.2999 0.9060 36.4055 33.5701 35.4741 35.1652 260211 1.3016 0.9558 37.1557 42.4297 36.1850 38.3836 260214 1.3113 0.9558 31.0175 31.7957 34.1199 32.2663
260216 1.3206 0.9558 * 32.4039 33.4387 32.9968 260217 *** * * 12.2879 * 12.2879 260219 1.3400 0.9060 * * 30.7118 30.7118 260220 *** * * * 28.4885 28.4885CMS-1498-P 864

**Provider Number Case-Mix**  **Index 2**  **FY 2011 Wage**  **Index Average**  **Hourly Wage**  **FY 2009 Average**  **Hourly Wage**  **FY 2010 Average**  **Hourly Wage**  **FY 2011 1**  **Average Hourly Wage**  ****** **(3 years)** 260221 2.0760 0.8413 * * * *
260222 3.1344 0.9558 * * * *
260223 2.1186 1.0377 * * * *
270002 1.1098 0.8439 28.3379 26.9419 28.2480 27.8202 270003 1.2908 0.8439 28.0543 28.5127 29.8638 28.8333 270004 1.7281 0.8944 28.5869 29.4694 31.2252 29.8125 270012 1.6404 0.8618 28.0672 27.9087 28.8521 28.2738 270014 2.0243 0.8811 28.2582 30.1101 30.2981 29.5713 270017 1.3880 0.8618 29.3542 29.4260 31.2231 30.0045
270023 1.6600 0.8811 28.1896 30.9908 31.5012 30.2124 270032 1.0183 0.8439 21.6360 21.5106 23.5705 22.2266 270049 1.8451 0.8944 29.8891 31.3941 31.2349 30.8507 270051 1.4506 0.8618 29.3941 29.1163 30.1070 29.5459 270057 1.4282 0.8439 28.3627 29.5317 31.6476 29.8918 270074 0.9307 1.4446 * * * *
270086 1.4090 0.8439 21.9017 27.3995 29.1257 26.4704 270087 1.5197 0.8439 24.9197 24.2168 24.9946 24.6957 280003 1.8427 0.9490 32.3780 33.7700 34.2000 33.4257 280009 1.8904 0.9490 28.1559 31.9280 33.6269 31.2504 280013 1.7682 0.9554 30.3120 31.9793 32.8493 31.7431 280020 1.6813 0.9490 29.4831 30.3731 32.3597 30.7314
280023 1.4338 0.9490 30.0717 31.9420 31.3884 31.1400 280030 1.8814 0.9554 31.8758 33.4544 34.0104 33.0874 280032 1.4305 0.8886 25.6549 25.8707 27.6089 26.3994 280040 1.6949 0.9554 30.7406 32.1005 32.7707 31.9093 280060 1.7924 0.9554 30.4625 32.0607 33.5256 32.0484 280061 1.4381 0.8886 28.9591 29.2231 30.8542 29.7095
280065 1.2973 0.9418 29.5470 30.1143 30.8900 30.1783 280077 1.3795 0.9490 29.9223 29.7362 31.3194 30.3231 280081 1.6286 0.9554 28.9696 31.0768 35.8382 31.9389 280105 1.2687 0.9554 30.0472 33.3196 33.1407 32.1834 280111 1.1463 0.8886 28.3541 29.0865 29.9691 29.1189 280119 0.8685 1.4448 * * * *
280123 *** * 20.2741 20.6384 29.1514 22.7020 280125 1.5076 0.8968 24.7466 25.1212 30.7311 26.8386 280127 1.9295 0.9490 26.5659 28.4607 27.8198 27.6863 280128 2.7835 0.9490 27.1024 19.2781 30.1879 25.4888CMS-1498-P 865

**Provider Number Case-Mix**  **Index 2**  **FY 2011 Wage**  **Index Average**  **Hourly Wage**  **FY 2009 Average**  **Hourly Wage**  **FY 2010 Average**  **Hourly Wage**  **FY 2011 1**  **Average Hourly Wage**  ****** **(3 years)** 280129 2.0282 0.9554 27.9511 30.4258 30.9589 29.8728 280130 1.4549 0.9554 29.9645 32.4243 33.1336 31.9744 280131 2.1542 0.9554 * * * *
290001 1.7980 1.0439 33.3318 32.3610 34.3377 33.3434 290002 0.8656 0.9960 22.7362 25.4458 22.9980 23.6418 290003 1.8020 1.1811 34.6433 36.8494 40.5365 37.2945 290005 1.5573 1.1811 34.2373 34.2514 36.3971 34.9747 290006 1.1041 1.0439 33.3243 32.9232 35.2729 33.8405 290007 1.8733 1.1811 41.2395 44.0851 42.0134 42.4287
290008 1.2259 0.9555 33.2473 36.1620 38.0995 35.8471 290009 1.8183 1.0439 34.2103 38.6692 40.9685 37.9159 290012 1.3732 1.1811 38.3731 38.1494 39.8936 38.8324 290019 1.6158 1.0439 32.2817 34.3215 35.6893 34.1535 290020 0.9789 0.9555 27.2908 25.3592 28.1710 26.9891 290021 1.6573 1.1811 36.8728 39.5976 41.5629 39.3340
290022 1.7355 1.1811 38.8262 40.9896 41.3493 40.4278 290027 0.8303 0.9555 29.1123 25.1315 17.5194 22.5706 290032 1.4270 1.0439 36.9175 38.9632 37.5999 37.8103 290039 1.6578 1.1811 34.6359 37.5722 41.3057 37.8449 290041 1.4861 1.1811 38.4445 40.0602 42.8383 40.5654 290045 1.7861 1.1811 38.2560 38.5440 40.6077 39.1861
290046 1.5403 1.1811 38.3112 41.5550 42.1303 40.8035 290047 1.7100 1.1811 35.6381 38.6892 41.6528 38.6969 290049 1.4003 1.0439 33.4278 33.2014 34.9166 33.8543 290051 2.0280 1.0282 32.5277 37.2727 37.4812 35.6526 290053 1.7043 1.1811 * * 41.7596 41.7596 290054 1.3973 1.1811 * * * *
290055 1.5038 1.0282 * * * *
300001 1.4814 1.0054 31.0122 31.4533 31.9222 31.4790 300003 2.0987 1.0054 37.7246 37.3007 37.8482 37.6390 300005 1.4367 1.0054 28.8402 29.4927 32.0379 30.1494 300011 1.3554 1.0990 33.0785 32.7459 35.9010 33.9466 300012 1.4793 1.0990 33.0569 34.8519 34.3089 34.0963
300014 1.2376 1.0218 30.7735 32.8211 33.7545 32.5359 300017 1.4332 1.1021 33.4164 35.2028 37.5444 35.3995 300018 1.3748 1.0218 31.5028 32.7008 33.9529 32.7460 300019 1.3351 1.0258 28.3114 30.5332 31.7382 30.2375CMS-1498-P 866

**Provider Number Case-Mix**  **Index 2**  **FY 2011 Wage**  **Index Average**  **Hourly Wage**  **FY 2009 Average**  **Hourly Wage**  **FY 2010 Average**  **Hourly Wage**  **FY 2011 1**  **Average Hourly Wage**  ****** **(3 years)** 300020 1.4207 1.0990 32.4655 34.7678 36.3083 34.5838 300023 1.4607 1.0054 32.3202 34.2636 35.1291 33.9582 300029 1.8966 1.1021 32.0033 35.3112 36.0190 34.4466
300034 1.8501 1.0990 33.5537 33.7397 32.8443 33.3569 310001 1.8394 1.2884 41.4946 44.8619 50.6238 45.4383 310002 1.8317 1.2619 37.9484 39.7599 41.2456 39.6858 310003 1.3084 1.2884 40.1543 39.8679 42.8065 40.9664 310005 1.3923 1.1099 34.7657 34.4087 36.0844 35.0992 310006 1.4947 1.2884 30.4296 29.1025 36.9201 33.0307
310008 1.4134 1.2884 34.3268 36.2903 37.2702 35.9673 310009 1.4910 1.2619 35.4624 37.9098 37.8328 37.0580 310010 1.3390 1.1069 36.0823 34.1071 34.7174 34.9269 310011 1.3734 1.1069 37.4855 34.0850 38.0642 36.5086 310012 1.5578 1.2884 41.9630 41.3814 44.1956 42.5328 310013 *** * 32.9488 * * 32.9488
310014 1.9878 1.1069 35.0124 39.7527 42.5981 39.1445 310015 1.9757 1.2619 40.8229 39.5076 41.0862 40.4747 310016 1.3519 1.2884 41.0363 39.7563 42.6321 41.1071 310017 1.3342 1.2619 35.9806 34.8881 36.6814 35.8577 310018 *** * 32.6956 33.5069 33.6869 33.3032 310019 1.5578 1.2884 31.8930 34.6618 36.9116 34.4783
310020 *** * 38.4266 34.8440 33.1591 35.6399 310021 1.5817 1.1069 32.2064 33.2554 32.9745 32.8103 310022 1.3683 1.1069 32.8079 32.8154 35.0037 33.5940 310024 1.4947 1.1099 36.8666 34.7011 38.7731 36.8133 310025 1.4049 1.2884 32.1481 35.2564 40.8475 35.5411 310026 *** * 30.1321 31.9905 * 31.0489
310027 1.5531 1.1099 34.6471 34.1653 35.4202 34.7452 310028 1.2605 1.1099 34.8332 37.2987 38.5629 36.9482 310029 1.7816 1.1069 35.2084 36.5179 37.3225 36.3377 310031 2.6733 1.1069 39.5911 38.2643 39.1387 39.0033 310032 1.4461 1.1069 35.2402 35.8019 38.1019 36.3949 310034 1.4950 1.1069 36.8614 37.1191 38.7316 37.5645
310037 *** * 40.4642 44.3134 40.6768 41.8620 310038 1.8962 1.2619 39.8707 40.7395 41.0737 40.5745 310039 1.3494 1.2619 32.6425 33.4253 37.6948 34.5052 310040 1.2885 1.2884 41.2246 38.3232 42.0647 40.5945CMS-1498-P 867

**Provider Number Case-Mix**  **Index 2**  **FY 2011 Wage**  **Index Average**  **Hourly Wage**  **FY 2009 Average**  **Hourly Wage**  **FY 2010 Average**  **Hourly Wage**  **FY 2011 1**  **Average Hourly Wage**  ****** **(3 years)** 310041 1.3677 1.1069 35.2009 34.4308 35.9905 35.2159 310044 1.4058 1.1069 33.5868 35.9981 36.7851 35.4384 310045 1.6751 1.2884 39.2097 40.3222 39.4667 39.6718
310047 1.3605 1.1069 37.7220 38.1213 38.6544 38.1625 310048 1.3744 1.1099 34.5256 33.9641 35.1089 34.5372 310050 1.3717 1.2619 37.9214 32.5213 36.1607 35.4032 310051 1.5361 1.1099 39.7671 37.9104 41.4326 39.7291 310052 1.4235 1.1069 36.5494 36.2042 36.6736 36.4774 310054 1.3353 1.2619 38.2432 37.2851 38.6073 38.0262
310057 1.4774 1.1069 34.2052 32.8649 33.3760 33.4433 310058 1.0417 1.2884 30.4436 32.1349 27.4856 30.0784 310060 1.4272 1.1069 27.9134 30.4626 31.0602 29.7917 310061 1.3306 1.1069 33.5586 33.6084 36.9685 34.7294 310063 *** * 38.1481 36.7131 40.5744 38.4253 310064 1.6138 1.1069 39.8091 39.9456 39.4518 39.7314
310069 1.2782 1.1069 35.1376 36.9367 38.6358 36.8960 310070 1.4374 1.2619 36.9999 36.8951 38.3936 37.4045 310073 1.8090 1.1069 36.9249 37.5317 38.0676 37.5047 310074 1.3788 1.2884 39.0729 35.9044 36.5051 37.2159 310075 1.3708 1.1069 33.5253 33.8979 36.8738 34.7688 310076 1.7422 1.2619 38.1671 39.0325 41.7283 39.6466
310081 1.4281 1.1069 31.7981 32.1241 34.1491 32.7041 310083 1.5302 1.2619 28.3406 28.2875 32.3793 29.6429 310084 1.2977 1.1069 34.9626 34.3130 35.9514 35.1066 310086 1.2760 1.1069 30.9467 31.4837 32.6634 31.7177 310088 1.1089 1.1069 31.2437 28.1703 30.2907 29.8993 310090 *** * 33.9174 36.2502 39.0484 36.2524
310091 1.2160 1.1069 35.2913 34.8679 36.3009 35.4738 310092 1.5401 1.1069 32.8431 34.8028 35.8723 34.4902 310093 *** * 32.3860 33.4460 31.7831 32.5380 310096 1.7501 1.2619 34.2014 36.3201 35.9746 35.5053 310105 *** * 32.0277 31.3423 38.1225 33.7325 310108 1.5387 1.2619 36.2848 38.3403 40.4235 38.3602
310110 1.3629 1.1069 35.6825 36.5227 34.9354 35.6895 310111 1.3887 1.1069 36.0748 38.3519 38.6478 37.7170 310112 1.3763 1.1069 34.5337 33.6207 34.5131 34.2210 310113 1.3519 1.1069 35.0245 38.0066 38.4702 37.2154CMS-1498-P 868

**Provider Number Case-Mix**  **Index 2**  **FY 2011 Wage**  **Index Average**  **Hourly Wage**  **FY 2009 Average**  **Hourly Wage**  **FY 2010 Average**  **Hourly Wage**  **FY 2011 1**  **Average Hourly Wage**  ****** **(3 years)** 310115 1.4081 1.1069 32.1197 33.7061 34.3696 33.4228 310116 1.3231 1.2884 27.8677 35.3805 35.7518 32.7295 310118 1.3491 1.2884 32.8286 33.2234 33.7344 33.2605
310119 1.9233 1.2619 41.2997 46.1339 47.1035 44.7858 310120 1.0481 1.1099 35.1661 36.3365 37.6331 36.3759 310126 *** * 34.3189 * * 34.3189 310127 *** * * 40.1255 * 40.1255 320001 1.8271 0.9638 31.4193 33.6433 35.9775 33.8378 320002 1.5849 1.0788 34.1610 35.6036 37.4477 35.7737
320003 1.0965 1.0400 31.5792 31.4445 34.6790 32.5200 320004 1.3353 0.9030 28.2407 30.5543 31.0096 29.9078 320005 1.6317 0.9505 25.2168 26.4658 27.9464 26.5665 320006 1.2566 0.9505 28.5177 31.6888 35.2623 31.7638 320009 1.7026 0.9638 31.3296 31.7240 33.1269 32.2269 320011 1.1092 0.9374 28.9951 30.6151 31.5915 30.3549
320013 1.2176 1.0400 31.2890 31.7159 31.8550 31.6268 320014 1.0148 0.9183 30.4803 29.8578 33.1461 31.2305 320016 1.1858 0.9030 26.6392 27.7121 27.8593 27.4337 320017 1.3865 0.9638 30.5787 30.9261 28.3807 29.6659 320018 1.5868 0.9207 28.3465 29.9038 32.8908 30.3587 320019 *** * 28.7067 31.8205 34.4963 30.4182
320021 1.5923 0.9638 29.6464 31.3577 32.8369 31.4496 320022 1.1128 0.9030 27.5152 28.7195 30.9229 28.9228 320030 0.9864 0.9030 25.5267 28.5145 29.5507 27.9621 320033 1.2665 1.0400 30.1846 32.8631 36.8262 33.1229 320037 1.1970 0.9638 27.8982 28.6968 29.0394 28.5512 320038 1.2537 0.9030 31.6526 33.2147 34.1644 33.0257
320057 0.8901 1.4448 * * * *
320058 0.7912 1.4448 * * * *
320059 1.0293 1.4448 * * * *
320060 1.0719 1.4448 * * * *
320061 1.0731 1.4448 * * * *
320062 0.8817 1.4448 * * * *
320063 1.2855 0.9315 27.4946 30.2997 31.3336 29.7847 320065 1.2319 0.9030 26.9130 27.9999 31.2804 28.6457 320067 0.8536 0.9030 25.4121 23.6677 26.3413 25.1468 320069 1.0613 0.9030 25.3151 26.5521 25.6533 25.8355CMS-1498-P 869

**Provider Number Case-Mix**  **Index 2**  **FY 2011 Wage**  **Index Average**  **Hourly Wage**  **FY 2009 Average**  **Hourly Wage**  **FY 2010 Average**  **Hourly Wage**  **FY 2011 1**  **Average Hourly Wage**  ****** **(3 years)** 320070 0.9578 1.4448 * * * *
320074 1.3254 0.9638 28.8088 29.8317 31.0548 30.0014 320079 *** * 31.5661 30.3600 * 30.9560
320083 2.2519 0.9638 32.9476 35.1125 33.6069 33.8474 320084 0.8797 0.9030 24.2902 25.9161 27.1350 25.8609 320085 1.7238 0.9207 28.4537 28.7114 30.1280 29.0969 320086 1.3497 0.9030 * * 25.1198 25.1198 320087 1.6719 1.0788 * * 42.5428 42.5428 320088 2.4348 0.9207 * * 34.8348 34.8348
330002 1.7166 1.3154 34.7270 35.3553 37.0389 35.6963 330003 1.4425 0.8708 26.8363 27.7173 28.8520 27.8126 330004 1.3751 0.9785 30.3221 30.8305 31.6848 30.9524 330005 1.6498 0.9628 33.2851 34.1763 35.4979 34.3373 330006 1.4087 1.3154 36.3305 38.6645 38.8190 37.9639 330008 1.1596 0.9628 26.2141 26.7882 28.4993 27.1558
330009 1.4682 1.3154 41.3797 42.4137 43.3382 42.4122 330010 1.1603 0.8487 20.5805 24.3033 * 22.4266 330011 1.2668 0.8932 26.8269 29.2672 30.3716 28.8455 330013 1.9518 0.8708 28.8039 29.2399 30.3522 29.4870 330014 1.4172 1.3154 46.3170 48.1054 48.9173 47.8284 330019 1.2184 1.3154 44.5669 46.8153 47.5751 46.3311
330023 1.5195 1.2884 37.5135 40.9595 42.7458 40.4809 330024 1.8856 1.3154 44.8070 46.2954 46.9066 46.0301 330025 1.1126 0.9628 24.2702 26.5550 27.7959 26.2089 330027 1.3420 1.2884 45.9571 49.0573 51.4887 48.8103 330028 1.5496 1.3154 38.0149 38.7770 44.2973 40.0572 330029 0.6085 0.9628 22.9332 23.7555 23.2845 23.3244
330030 1.2366 0.8708 25.5089 27.4344 29.0646 27.3460 330033 1.1516 0.8643 25.0215 26.7551 25.6393 25.7911 330036 1.2446 1.3154 30.4659 31.2701 33.0839 31.6283 330037 1.1595 0.8708 23.4915 24.4428 25.1766 24.3854 330041 1.3783 1.3154 37.1651 41.2299 45.4010 40.9876 330043 1.5215 1.2591 40.6094 42.4560 43.3176 42.1465
330044 1.3451 0.8737 28.2638 29.4872 31.0628 29.6090 330045 1.5074 1.2591 41.6565 44.7551 43.4805 43.2898 330046 1.5094 1.3154 52.2397 53.4532 55.0516 53.5982 330047 1.3009 0.8487 22.9948 27.4392 27.9776 26.2104CMS-1498-P 870

**Provider Number Case-Mix**  **Index 2**  **FY 2011 Wage**  **Index Average**  **Hourly Wage**  **FY 2009 Average**  **Hourly Wage**  **FY 2010 Average**  **Hourly Wage**  **FY 2011 1**  **Average Hourly Wage**  ****** **(3 years)** 330049 1.6219 1.1418 34.9740 38.0110 39.1050 37.4092 330053 1.0453 0.8708 20.1303 21.4837 22.9142 21.4899 330055 1.6466 1.3154 44.2343 44.6905 45.0891 44.6857
330056 1.5790 1.3154 39.9662 40.5499 43.3731 41.2870 330057 1.8056 0.8708 30.1821 30.5006 31.3091 30.6714 330058 1.4159 0.8708 23.6296 25.3712 26.6416 25.2427 330059 1.6093 1.3154 45.3691 47.7115 48.5102 47.2325 330061 1.2404 1.3154 37.8649 38.8790 38.2257 38.3275 330064 1.4200 1.3154 41.5737 39.5994 39.7532 40.3486
330065 1.1305 0.9628 26.2288 28.6809 29.2490 28.0535 330066 *** * 27.2085 30.7011 31.6665 29.8079 330067 1.4686 1.1418 30.7537 31.5572 33.4719 31.8968 330072 *** * 41.4605 40.5965 41.2397 41.0975 330073 1.1842 0.8708 25.1392 24.8055 27.0827 25.6766 330074 1.1789 0.8708 23.1016 24.6973 24.5262 24.0899
330075 1.1415 0.9710 23.7522 27.5360 29.7333 26.9519 330078 1.4769 0.9628 27.6682 30.8157 31.7996 30.0981 330079 1.4095 0.9328 27.9479 28.7349 30.3415 29.0021 330080 1.2278 1.3154 40.2067 47.4529 47.6661 45.2191 330084 1.0795 0.8420 27.3434 28.8661 32.3490 29.4885 330085 1.1543 0.8420 27.1707 27.7050 29.8188 28.2639
330086 1.4037 1.3154 40.9768 44.0362 43.8907 42.9617 330088 1.0424 1.2591 37.4716 41.8635 40.8115 40.0302 330090 1.5852 0.9187 27.7306 29.5626 31.1822 29.4923 330091 1.3864 0.9628 28.3034 30.9457 31.7515 30.3752 330094 1.2966 1.0158 28.6213 33.0706 34.7858 32.0911 330096 1.2839 0.8420 24.7895 24.8667 25.8292 25.1613
330100 1.0060 1.3154 39.3170 38.6625 42.2645 40.0975 330101 1.9953 1.3154 45.5412 49.6431 49.8588 48.3746 330102 1.5567 0.9628 27.2543 31.6270 31.8101 30.2074 330103 1.2588 0.8551 25.4919 26.1064 27.2392 26.3017 330104 1.4546 1.3154 36.5894 38.4254 39.2321 38.0457 330106 1.7129 1.2884 48.2903 47.2240 50.3199 48.5977
330107 1.2256 1.2591 38.0262 40.2541 42.4304 40.1994 330108 1.1028 0.8540 25.3023 25.5480 26.9810 25.9259 330111 0.9381 0.9628 23.2134 25.1572 26.0179 24.6747 330115 1.1378 0.9710 24.3898 27.0362 25.4507 25.6316CMS-1498-P 871

**Provider Number Case-Mix**  **Index 2**  **FY 2011 Wage**  **Index Average**  **Hourly Wage**  **FY 2009 Average**  **Hourly Wage**  **FY 2010 Average**  **Hourly Wage**  **FY 2011 1**  **Average Hourly Wage**  ****** **(3 years)** 330119 1.8188 1.3154 41.2365 43.8894 44.0249 43.0193 330125 1.7757 0.8708 29.4817 30.4389 30.4103 30.1168 330126 1.3867 1.2884 37.7807 40.0542 41.7981 39.8971
330127 1.4712 1.3154 45.2554 51.8817 48.5274 48.5452 330128 1.2873 1.3154 43.3437 41.7875 46.9809 44.0332 330132 1.0753 0.8551 22.1452 23.4437 23.9298 23.1468 330133 *** * 39.9025 * * 39.9025 330135 1.2525 1.2060 33.2314 35.3624 39.4523 36.0995 330136 1.6306 0.8708 25.4198 27.9525 28.3358 27.2668
330140 1.8705 0.9710 31.1333 32.7905 33.3826 32.4461 330141 1.3455 1.2591 39.1733 41.4127 44.4198 41.7713 330144 0.9644 0.8454 24.9304 26.0623 28.4224 26.4223 330151 1.2456 0.8454 21.6339 23.4664 23.7227 22.9394 330152 1.4485 1.3154 39.5754 45.9310 54.7885 46.5567 330153 1.7004 0.8708 28.9944 31.7611 31.6854 30.8216
330154 1.5936 * * * * *
330157 1.3987 0.9710 29.7622 30.2745 31.5462 30.5482 330158 1.8465 1.3154 39.5946 41.6800 45.4100 42.4088 330159 1.3174 0.9710 33.8484 35.6944 36.1910 35.2789 330160 1.5849 1.3154 39.0970 42.1789 42.6001 41.2794 330162 1.2954 1.3154 38.7638 39.3460 39.3481 39.1620
330163 1.0935 0.9628 28.6252 26.3050 28.3979 27.7803 330164 1.5397 0.8708 29.8458 30.3023 31.3949 30.5335 330166 0.8986 0.8420 22.8506 23.2773 24.1281 23.4282 330167 1.6650 1.2884 39.2421 40.8753 40.4764 40.2069 330169 1.4020 1.3154 47.5404 49.7924 52.6481 49.9729 330175 1.1395 0.8680 26.7883 28.2085 29.0736 28.0498
330177 0.9519 0.8420 23.4299 26.0397 26.3552 25.2331 330180 1.3073 0.8708 26.8658 28.0975 28.8360 27.9626 330181 1.4442 1.2884 46.2181 47.2523 47.5998 47.0087 330182 2.3077 1.2884 42.7962 46.6346 47.1719 45.5399 330184 1.4461 1.3154 39.7242 41.3935 44.1215 41.7428 330185 1.3245 1.2591 39.6724 41.3543 42.6846 41.2528
330188 1.3394 0.9628 29.7318 30.7222 31.9349 30.8079 330189 0.9639 0.8708 25.8125 26.4233 27.1290 26.4668 330191 1.3966 0.8708 28.2949 29.3753 30.8219 29.5362 330193 1.5971 1.3154 40.0280 40.7257 41.4653 40.7612CMS-1498-P 872

**Provider Number Case-Mix**  **Index 2**  **FY 2011 Wage**  **Index Average**  **Hourly Wage**  **FY 2009 Average**  **Hourly Wage**  **FY 2010 Average**  **Hourly Wage**  **FY 2011 1**  **Average Hourly Wage**  ****** **(3 years)** 330194 1.7160 1.3154 49.8886 49.9208 51.5125 50.4577 330195 1.6426 1.3154 43.3213 46.0878 46.8783 45.3774 330196 1.3574 1.3154 38.6949 42.8106 47.1254 42.9572
330197 1.1361 0.8420 26.5525 27.6437 28.8743 27.7160 330198 1.5031 1.2884 35.8715 37.9641 39.0864 37.7000 330199 1.1339 1.3154 39.4076 47.5059 46.3505 44.4308 330201 1.8227 1.3154 46.5114 51.2179 54.5822 50.6852 330202 1.3722 1.3154 38.7624 42.1074 46.7852 42.6301 330203 1.5060 0.9710 34.6525 33.9161 34.8968 34.4914
330204 1.3905 1.3154 39.5324 44.8153 45.9057 43.4038 330205 1.3126 1.2060 35.3792 37.0171 39.7040 37.4547 330208 1.2411 1.3154 37.1735 38.7279 40.4900 38.7610 330211 1.2386 0.8420 24.9432 25.6929 25.1977 25.2864 330213 1.0549 0.8737 28.5370 30.0957 30.7737 29.8133 330214 1.9522 1.3154 43.3229 43.6872 45.3214 44.1777
330215 1.3738 0.8420 26.3978 28.0026 29.8652 28.0726 330218 1.1081 0.9710 28.4113 28.4369 28.6896 28.5177 330219 1.7911 0.9628 33.2147 38.3321 35.2787 35.5523 330221 1.6164 1.3154 42.5486 40.5201 40.5359 41.2446 330222 1.4126 0.8724 28.7858 30.5142 30.9231 30.1149 330223 0.9881 0.8420 27.1970 28.2638 29.7060 28.4078
330224 1.3051 1.1246 30.4784 32.4518 32.2402 31.7207 330225 1.2507 1.2884 32.9036 33.7052 32.9394 33.1790 330226 1.5413 0.8708 26.3685 25.7981 25.8056 25.9824 330229 1.2515 0.8420 23.9243 24.9977 25.8926 24.9413 330230 *** * 39.3863 39.5043 38.2724 39.1655 330231 1.1081 1.3154 48.9021 49.1983 55.0629 51.0168
330232 1.3400 0.8708 27.9615 28.7263 30.4424 29.0437 330233 1.7151 1.3154 40.8539 43.4873 45.0313 43.1279 330234 2.3642 1.3154 49.8804 55.2159 52.8431 52.7054 330235 1.1918 0.8420 30.8034 31.2218 32.2728 31.3938 330236 1.5342 1.3154 42.6205 45.0321 46.2233 44.6274 330238 1.1263 0.8708 23.3953 24.7086 25.0088 24.3863
330239 1.2644 0.8420 24.6391 24.7255 25.3756 24.9143 330240 1.2759 1.3154 41.6132 42.5871 39.9681 41.3705 330241 1.8864 0.9710 32.9275 34.7013 35.6452 34.4408 330242 *** * 38.7875 40.2224 38.6084 39.2370CMS-1498-P 873

**Provider Number Case-Mix**  **Index 2**  **FY 2011 Wage**  **Index Average**  **Hourly Wage**  **FY 2009 Average**  **Hourly Wage**  **FY 2010 Average**  **Hourly Wage**  **FY 2011 1**  **Average Hourly Wage**  ****** **(3 years)** 330245 1.7049 0.8737 28.6698 29.3183 29.9976 29.3388 330246 1.4001 1.2591 35.9577 39.4705 37.8934 37.7571 330247 *** * 41.3465 39.8390 41.3991 40.8503
330249 1.3877 0.9710 26.9856 29.4003 31.3898 29.2579 330250 1.4215 1.0071 29.6186 32.1740 32.6642 31.4918 330259 1.4278 1.2884 39.0213 38.5914 37.9733 38.5494 330261 1.2872 1.3154 38.0216 37.9563 43.0206 39.7053 330263 0.9364 0.8420 24.2125 25.5991 27.1890 25.6737 330264 1.4015 1.2060 32.5050 35.1876 37.0730 34.9405
330265 1.2783 0.8708 22.7433 22.8141 23.4393 23.0082 330267 1.5186 1.3154 35.3907 38.1619 39.3105 37.7127 330268 0.9270 0.8420 23.9135 25.7738 27.2044 25.6557 330270 2.1604 1.3154 52.3154 55.7360 54.4915 54.2881 330273 1.4195 1.3154 39.7880 41.3568 43.8576 41.7263 330276 1.0974 0.8456 27.0445 28.5781 29.1322 28.2518
330277 1.3453 0.9187 30.8156 30.8543 30.9283 30.8668 330279 1.6990 0.9628 31.2393 33.7210 34.1573 33.0755 330285 1.9158 0.8708 31.8987 33.0830 34.8538 33.3318 330286 1.3682 1.2591 38.8556 40.3250 42.5791 40.6255 330290 1.6635 1.3154 39.8036 43.2989 45.9549 43.0520 330304 1.3128 1.3154 39.4632 39.7987 39.8891 39.7160
330306 1.5933 1.3154 39.0409 40.3216 43.4869 40.9711 330307 1.3162 0.9777 30.8121 33.6277 34.1345 32.8690 330314 *** * 22.6885 38.7241 * 24.3594 330316 1.3911 1.3154 37.9357 40.3783 41.6082 39.9746 330331 1.3669 1.2884 44.1734 44.3947 46.9048 45.1731 330332 1.3212 1.2884 38.6932 40.8557 43.4228 41.0514
330339 *** * 25.0057 26.8982 28.5075 26.7655 330340 1.2054 1.2591 38.4726 38.4180 42.2175 39.7075 330350 1.5307 1.3154 44.2389 47.8575 48.0009 46.7458 330353 1.4414 1.3154 46.0215 45.8432 49.5882 47.1722 330354 1.9646 * * * * *
330357 1.5294 1.3154 40.2132 45.4617 46.6428 43.1989
330372 1.3511 1.2884 37.0323 40.3348 43.4028 40.1441 330385 1.1384 1.3154 47.4017 51.5393 45.1489 48.1275 330386 1.3008 1.1332 32.9990 35.2560 36.5454 34.8018 330389 *** * 37.5908 39.3586 * 38.5126CMS-1498-P 874

**Provider Number Case-Mix**  **Index 2**  **FY 2011 Wage**  **Index Average**  **Hourly Wage**  **FY 2009 Average**  **Hourly Wage**  **FY 2010 Average**  **Hourly Wage**  **FY 2011 1**  **Average Hourly Wage**  ****** **(3 years)** 330390 1.5026 1.3154 38.7652 35.4546 38.7532 37.4670 330393 1.7670 1.2591 38.9324 40.1511 41.2486 40.1584 330394 1.6358 0.8932 28.8074 30.5684 31.6244 30.3603
330395 1.3609 1.3154 50.1316 41.6484 45.4826 45.3889 330396 1.5484 1.3154 39.1956 41.6293 44.4691 41.8352 330397 1.4662 1.3154 41.1682 41.0651 42.6933 41.6049 330399 1.2742 1.3154 39.8023 41.7487 43.7557 41.7446 330401 1.3844 1.2591 41.7839 47.0780 45.2281 44.6412 330403 0.8761 0.8708 28.7282 26.7473 23.7571 26.0020
330404 1.1578 1.3154 36.1069 36.8792 36.7400 36.5676 330405 1.1290 1.3154 35.2720 38.6588 39.7124 37.3537 330406 1.1795 0.8708 28.2733 28.0950 29.0800 28.3975 330407 *** * * * 22.8305 22.8305 340001 1.5740 0.9299 29.9718 30.6910 31.4272 30.7359 340002 1.8308 0.9055 30.7403 31.6973 32.7669 31.7640
340003 1.4893 0.8476 26.6831 28.0732 28.5497 27.8127 340004 1.5876 0.8974 27.9200 30.6110 31.1689 29.9152 340008 1.2878 0.8768 29.0661 30.7569 34.1051 31.2995 340010 1.4897 0.8476 29.5232 31.0327 32.4035 31.0271 340011 1.1201 0.8476 22.5152 23.6040 24.0602 23.4067 340012 1.2071 * 24.9271 * * 24.9271
340013 1.2699 0.9162 26.9152 29.2509 27.6445 27.9355 340014 1.6864 0.8974 29.5350 29.4771 30.8373 29.9760 340015 1.4756 0.9162 30.0979 30.7573 28.8959 29.8838 340016 1.4468 0.8476 27.9651 27.2226 28.5561 27.9443 340017 1.4517 0.9055 28.4866 28.4785 30.0523 29.0201 340020 1.2373 0.8632 28.3461 30.5510 32.0755 30.2875
340021 1.5313 0.9162 31.3630 32.5625 31.4752 31.8018 340023 1.4538 0.9127 27.6921 29.5911 30.1104 29.1815 340024 1.3148 0.8653 26.9001 27.4770 28.5059 27.6241 340025 *** * 25.2846 25.8195 27.0389 26.0605 340027 1.2773 0.9192 26.6528 27.2788 27.9469 27.2947 340028 1.5908 0.9453 31.9872 31.7634 33.0069 32.2702
340030 2.1669 0.9662 31.2051 31.5786 33.0418 31.9615 340032 1.5602 0.9299 29.2080 29.3927 31.1516 29.9329 340035 1.0454 0.8476 26.0846 26.8821 28.5418 27.1710 340036 1.1481 0.9713 29.0646 29.9160 32.2510 30.4372CMS-1498-P 875

**Provider Number Case-Mix**  **Index 2**  **FY 2011 Wage**  **Index Average**  **Hourly Wage**  **FY 2009 Average**  **Hourly Wage**  **FY 2010 Average**  **Hourly Wage**  **FY 2011 1**  **Average Hourly Wage**  ****** **(3 years)** 340037 1.3488 0.9162 30.5362 32.0484 32.2585 31.6367 340038 1.2142 0.8729 26.2600 26.9487 27.5626 26.9249 340039 1.3643 0.8974 29.5069 30.2952 30.5891 30.1244
340040 1.9443 0.9343 30.1280 31.3866 32.6226 31.4428 340041 1.5949 0.8650 27.1285 27.8408 26.9709 27.3113 340042 1.2562 0.8476 27.0597 27.0729 27.4651 27.2070 340047 1.8790 0.8974 28.7620 30.6701 31.8492 30.4241 340049 1.9406 0.9662 31.5555 35.4171 37.3166 34.8797 340050 1.3906 0.9238 29.2290 30.4447 30.6267 30.1189
340051 1.3116 0.8537 25.4981 25.4162 27.3196 26.0657 340053 1.6844 0.9299 30.8342 30.9274 32.3100 31.3844 340055 1.3835 0.8650 29.0116 29.5040 29.9587 29.5167 340060 1.1756 0.8996 26.8387 27.3403 27.6220 27.2840 340061 1.8918 0.9662 31.2910 33.4821 35.0126 33.3710 340064 1.3481 0.8476 25.0814 27.2184 23.8863 25.2967
340068 1.3615 0.8680 24.7409 27.3499 29.9975 27.4065 340069 1.8686 0.9662 32.2171 32.5361 34.5413 33.1296 340070 1.3306 0.8996 27.7679 29.0391 30.6796 29.1889 340071 1.1590 0.9713 29.7343 31.3756 33.3407 31.6507 340073 1.8342 0.9662 33.1054 33.2705 35.0550 33.8504 340075 1.4189 0.8650 26.8315 29.1504 29.2000 28.3921
340084 1.2918 0.9299 25.6885 27.4289 28.6175 27.2158 340085 1.3401 0.8996 29.1095 29.9176 30.6564 29.9103 340087 1.2638 0.8476 23.8360 25.0091 24.8627 24.5696 340090 1.4562 0.9713 28.3615 28.6805 30.2246 29.1062 340091 1.6471 0.8974 30.4371 31.2643 32.1069 31.2828 340096 1.2936 0.8996 26.5814 26.8103 28.8274 27.3932
340097 1.2417 0.8476 27.9810 29.8702 31.1005 29.7098 340098 1.6521 0.9299 31.3916 31.8472 32.6891 31.9928 340099 1.3129 0.8476 26.0077 28.1143 27.2332 27.0988 340104 *** * 19.9492 20.2901 22.6845 20.9674 340106 1.1483 0.8476 24.5154 24.4254 24.4668 24.4681 340107 1.1997 0.9123 27.3565 28.5859 31.3986 29.1909
340109 1.3875 0.8954 26.6479 28.6310 29.6145 28.2997 340113 2.0509 0.9299 32.3786 32.4983 33.7477 32.8917 340114 1.6329 0.9662 30.1207 32.3730 33.9019 32.1940 340115 1.6196 0.9662 28.0974 28.9265 30.1329 29.0563CMS-1498-P 876

**Provider Number Case-Mix**  **Index 2**  **FY 2011 Wage**  **Index Average**  **Hourly Wage**  **FY 2009 Average**  **Hourly Wage**  **FY 2010 Average**  **Hourly Wage**  **FY 2011 1**  **Average Hourly Wage**  ****** **(3 years)** 340116 1.6601 0.8650 29.9447 30.8834 31.7109 30.8405 340119 1.5385 0.9299 27.2938 28.1090 27.5712 27.6658 340120 1.1905 0.8476 26.1465 26.6358 25.4889 26.0896
340121 1.2056 0.8476 25.1577 25.7488 27.4932 26.1656 340123 1.4033 0.8996 28.7150 29.9077 30.2556 29.6505 340124 *** * 25.7294 25.2498 * 25.5286 340126 1.4018 0.9713 30.6902 31.7266 32.8511 31.7775 340127 1.3442 0.9662 28.8675 30.8152 29.2765 29.6601 340129 1.4724 0.9162 31.7863 27.7470 28.6231 29.2827
340130 1.3943 0.9299 29.5294 30.4887 31.5667 30.5985 340131 1.5012 0.9192 29.6571 32.1743 32.7180 31.5487 340132 1.2123 0.8476 25.3264 25.9153 27.9450 26.4203 340133 1.0352 0.8795 26.8850 27.2630 27.7506 27.3138 340137 *** * 27.0874 28.8723 * 27.9808 340138 0.7851 0.9662 * * * *
340141 1.7657 0.9264 29.3372 30.8628 32.7734 31.0073 340142 1.3540 0.8476 28.2413 28.4951 28.8034 28.5181 340143 1.6608 0.8650 29.3861 30.7162 30.7369 30.3039 340144 1.3389 0.9162 27.6548 26.5581 28.9693 27.6935 340145 1.3578 0.9162 28.0647 28.4230 30.2759 28.9487 340147 1.4283 0.9713 29.6960 30.2620 31.9805 30.6482
340148 1.5162 0.8974 27.9136 28.6607 29.4141 28.6790 340151 1.2488 0.8528 24.5782 25.9633 27.4868 26.0151 340153 2.2501 0.9299 29.8278 30.9065 31.9428 30.9177 340155 1.5111 0.9662 31.7570 31.6719 33.3228 32.2613 340156 0.9566 1.4446 * * * *
340158 1.2800 0.9264 29.4110 29.2570 30.5810 29.7971
340159 1.2531 0.9662 28.1706 27.8427 28.4492 28.1630 340160 1.3305 0.8476 24.2016 24.9127 26.6329 25.2921 340166 1.4619 0.9299 29.9122 31.0779 32.0934 31.0482 340168 0.6198 0.9264 * * * *
340171 1.2836 0.9299 31.1954 31.7831 32.9707 32.0444 340173 1.3664 0.9662 30.9843 30.9025 33.6286 31.9191
340183 1.4456 0.9299 30.1261 31.4691 33.8741 32.0540 340184 1.2205 0.9055 * * * *
350002 1.9786 0.7641 23.6051 25.2966 25.6152 24.8333 350003 1.3396 * 24.5812 27.3546 * 25.9392CMS-1498-P 877

**Provider Number Case-Mix**  **Index 2**  **FY 2011 Wage**  **Index Average**  **Hourly Wage**  **FY 2009 Average**  **Hourly Wage**  **FY 2010 Average**  **Hourly Wage**  **FY 2011 1**  **Average Hourly Wage**  ****** **(3 years)** 350006 1.5896 0.7451 23.4343 26.6508 24.5023 24.8210 350009 1.1530 * 23.9795 * * 23.9795 350011 1.9178 0.8102 26.0201 27.3884 28.6631 27.4053
350015 1.7512 0.7641 22.9120 27.6960 27.5676 26.0667 350017 *** * 24.0968 * * 24.0968 350019 1.7575 0.8034 24.9890 27.0960 28.0496 26.7628 350030 *** * 23.1023 * * 23.1023 350063 0.9324 1.4448 * * * *
350064 0.7461 1.4448 * * * *
350070 1.7884 0.8102 26.2871 28.1430 27.2743 27.2399 360001 1.6025 0.9624 30.1038 31.8522 32.7842 31.5960 360002 1.4501 0.8696 25.2209 26.7549 28.6674 26.8773 360003 1.8677 0.9624 31.8976 31.9294 33.1679 32.3384 360006 1.9087 1.0163 31.8814 35.3579 37.9929 35.0514 360008 1.5052 0.8757 28.0202 28.5988 29.5464 28.7459
360009 1.6126 0.9254 28.2423 30.2452 30.8841 29.8023 360010 1.3386 0.8612 26.6040 27.3194 29.0985 27.6697 360011 1.4401 1.0025 29.9882 31.3142 31.2797 30.8745 360012 1.4610 1.0163 31.9837 32.9127 33.7117 32.8731 360013 1.1783 0.9254 30.2406 30.9331 32.0183 31.0838 360014 1.2374 1.0025 28.1811 28.9635 31.9691 29.7242
360016 1.5885 0.9624 30.2190 30.5892 31.9656 30.9288 360017 1.8785 1.0163 32.6006 34.8774 37.9269 35.0847 360019 1.3519 0.9082 28.8568 29.3536 29.9006 29.3780 360020 1.5714 0.9082 27.8079 29.5312 30.6901 29.3408 360025 1.4669 0.9246 28.4761 29.5329 30.0999 29.3797 360026 1.6064 0.9172 27.5757 27.3618 26.3380 27.0570
360027 1.5697 0.9082 29.9449 30.8898 32.5281 31.0972 360029 1.1553 0.9374 28.0191 29.0633 29.4172 28.8392 360032 1.3121 0.8555 27.2636 27.4896 29.0836 27.9439 360035 1.7082 1.0163 32.0858 32.5622 33.7737 32.7945 360036 1.2891 0.8917 29.9410 31.5027 32.2558 31.2400 360037 1.6216 0.9082 30.6552 31.5221 32.0751 31.4189
360038 1.7378 0.9624 31.3776 32.3095 34.0962 32.4982 360039 1.5460 0.8555 25.8216 27.3636 28.7284 27.2681 360040 1.2153 0.8942 26.7450 28.4404 29.8190 28.4196 360041 1.3782 0.9082 28.4439 29.3331 29.9816 29.2239CMS-1498-P 878

**Provider Number Case-Mix**  **Index 2**  **FY 2011 Wage**  **Index Average**  **Hourly Wage**  **FY 2009 Average**  **Hourly Wage**  **FY 2010 Average**  **Hourly Wage**  **FY 2011 1**  **Average Hourly Wage**  ****** **(3 years)** 360044 1.2307 0.8682 24.7698 25.7011 25.6594 25.3785 360046 1.3090 0.9624 28.2972 28.5624 28.9068 28.5940 360048 1.8571 0.9374 30.0390 33.3273 39.7450 34.2489
360051 1.7630 0.9172 29.4434 30.5937 31.1421 30.4107 360052 1.6740 0.9172 28.4731 29.8072 31.5097 29.8835 360054 1.5310 0.8757 23.6606 26.8828 27.5188 25.9621 360055 1.4571 0.9082 31.4794 31.2738 32.8952 31.8741 360056 1.5298 0.9624 31.3936 31.8378 33.3691 32.2230 360058 1.1411 0.8555 25.9295 27.7073 27.9521 27.1876
360059 1.7410 0.9082 30.6294 31.3956 32.6539 31.5860 360062 *** * 32.9025 35.2065 * 34.0497 360064 1.6958 0.8628 28.6101 28.5325 29.7002 28.9332 360065 1.2957 0.9082 31.5066 31.6781 32.9311 32.0490 360066 1.4780 0.9254 30.9652 32.1991 33.3925 32.2022 360068 1.9074 0.9374 28.6335 30.0212 30.0149 29.5525
360070 1.7211 0.8650 28.8739 30.0192 30.7774 29.8917 360071 1.1589 0.8590 25.7956 26.6139 29.0698 27.1686 360072 1.4371 1.0163 29.1514 29.8851 29.9298 29.6482 360074 1.4181 0.9374 28.0283 30.1333 30.4801 29.5360 360075 1.3041 0.9082 28.3930 29.8181 31.5315 29.9856 360076 1.6207 0.9624 29.5342 28.8462 39.7210 32.3956
360077 1.6129 0.9082 28.3022 26.2961 29.4388 28.0016 360078 1.3461 0.9082 27.3652 28.2973 29.8163 28.5296 360079 1.9369 0.9172 31.3132 32.0935 34.0345 32.4653 360080 1.2318 0.8555 21.8806 22.9825 23.4889 22.7871 360081 1.3978 0.9374 31.4293 33.2532 33.2079 32.6352 360082 1.3923 0.9082 30.5837 29.7447 31.0704 30.4761
360084 1.6721 0.8650 29.2489 29.2527 30.7559 29.7670 360085 1.9801 1.0163 33.1295 35.9664 36.9965 35.5221 360086 1.6162 0.9172 29.1579 31.9690 31.4898 30.8314 360087 1.5016 0.9082 28.6336 30.0084 31.6840 30.0619 360089 1.1498 0.8555 28.0779 28.5192 31.2561 29.2567 360090 1.4048 0.9374 29.2662 30.3175 30.9528 30.1599
360091 1.3254 0.9082 28.2009 29.6324 30.4266 29.4199 360092 1.3143 1.0163 28.0813 28.3576 30.1497 28.8462 360095 1.5618 0.9246 30.2138 30.0996 29.4352 29.8848 360096 1.1693 0.8626 27.9514 29.8687 30.9621 29.5853CMS-1498-P 879

**Provider Number Case-Mix**  **Index 2**  **FY 2011 Wage**  **Index Average**  **Hourly Wage**  **FY 2009 Average**  **Hourly Wage**  **FY 2010 Average**  **Hourly Wage**  **FY 2011 1**  **Average Hourly Wage**  ****** **(3 years)** 360098 1.4382 0.9082 26.5839 27.6752 29.8125 28.0156 360100 *** * 25.8143 25.9628 25.6754 25.8206 360101 1.4306 0.9082 30.6650 29.4661 30.1728 30.0962
360107 1.0926 0.8674 26.8180 29.9869 30.3832 29.1302 360109 1.1223 1.0025 30.4643 30.7873 32.3056 31.1780 360112 1.8127 0.9653 32.4403 34.6063 34.7090 33.9241 360113 1.3049 0.9624 30.3914 33.3293 33.4370 32.4622 360115 1.4149 0.9082 27.9711 29.0971 30.1635 29.1065 360116 1.2562 0.9624 26.8632 29.3122 29.7886 28.5973
360118 1.5008 0.8917 29.9823 30.1189 30.7835 30.3015 360121 1.3059 0.9246 31.6766 22.1967 32.9106 28.0639 360123 1.5042 0.9082 28.5435 30.0862 31.5149 30.0236 360125 1.2614 0.8555 27.1776 28.8237 28.0379 28.0071 360130 1.3605 0.9082 28.1811 28.5433 29.7395 28.7979 360131 1.4918 0.8650 27.3426 28.3618 28.7700 28.1660
360132 1.4508 0.9624 29.8411 29.5751 31.5629 30.3076 360133 1.7092 0.9624 33.1812 33.9534 34.8154 33.9938 360134 1.7893 0.9624 29.9198 31.9438 32.3503 31.4241 360137 1.8571 0.9082 30.3116 32.2727 33.2378 32.0143 360141 1.7533 0.8628 31.9397 32.0733 32.7782 32.2474 360143 1.4331 0.9082 28.0693 27.0053 28.0817 27.7280
360144 1.4492 0.9082 29.6547 29.5081 31.0418 30.0723 360145 1.5767 0.9082 29.3271 29.8688 30.7653 29.9946 360147 1.4745 0.8555 29.2371 28.0794 29.5821 28.9716 360148 1.2665 0.8555 25.7460 28.4538 29.4819 27.8748 360150 1.4450 0.9082 27.8840 27.8860 28.7383 28.1724 360151 1.3858 0.8650 26.9672 28.3917 29.2479 28.3557
360152 1.6437 1.0163 33.1017 35.3636 38.6208 35.6295 360153 1.0408 0.8555 21.8416 22.3028 22.2992 22.1453 360155 1.5129 0.9082 29.1711 30.0263 31.6318 30.2212 360156 1.2161 0.8674 26.2268 27.4185 28.7732 27.4930 360159 1.5048 1.0025 29.0187 29.1683 31.7186 29.9873 360161 1.4352 0.8639 27.7423 29.4713 29.7974 29.0175
360163 1.8520 0.9624 31.2087 31.1214 35.9313 32.7672 360170 1.3566 1.0163 30.0688 30.9891 30.4758 30.5174 360172 1.4106 0.9082 30.2330 31.2620 33.1946 31.5024 360174 1.4016 0.9172 28.3769 29.2419 29.6556 29.0991CMS-1498-P 880

**Provider Number Case-Mix**  **Index 2**  **FY 2011 Wage**  **Index Average**  **Hourly Wage**  **FY 2009 Average**  **Hourly Wage**  **FY 2010 Average**  **Hourly Wage**  **FY 2011 1**  **Average Hourly Wage**  ****** **(3 years)** 360175 1.3096 1.0025 29.7499 31.8340 31.7026 31.1036 360179 1.6158 0.9624 31.3540 30.6820 31.6922 31.2533 360180 2.5220 0.9082 32.0225 30.3025 32.9705 31.8017
360185 1.4175 0.8555 26.4210 27.4008 27.6522 27.1534 360187 *** * 27.3745 28.2630 31.4188 28.8678 360189 1.1225 1.0163 28.3738 28.8931 29.4708 28.9364 360192 1.4530 0.9082 29.1999 31.7957 32.2091 31.1258 360195 1.1421 0.9082 27.2630 28.4907 29.0980 28.3002 360197 1.3514 0.8555 28.5267 30.3316 31.0116 29.9915
360203 1.1956 0.8555 27.7569 28.7975 29.7199 28.7550 360210 1.4152 1.0163 31.8182 35.1678 37.5771 34.9693 360211 1.6242 0.8555 27.5081 26.9504 26.8677 27.1117 360212 1.4042 0.9082 28.5882 28.8865 31.1956 29.5446 360218 1.3838 1.0163 31.1641 31.4458 31.3310 31.3170 360230 1.5862 0.9082 30.5995 29.9181 31.6669 30.7266
360234 1.4362 0.9624 30.7926 29.5412 33.3664 31.1901 360236 1.4186 0.9624 29.9367 31.7585 32.1567 31.3134 360239 1.4331 0.9172 31.7938 32.3401 33.2718 32.5127 360241 *** * 25.8137 28.0304 29.5279 27.8946 360242 1.9199 * * * * *
360245 0.8463 0.9082 20.4589 20.8560 21.7637 21.1049
360247 0.6198 1.0163 * * 20.0037 20.0037 360253 *** * 34.6887 33.3121 37.3905 35.0706 360259 1.3694 0.9374 28.0886 29.3681 31.0669 29.4823 360261 1.2686 0.8909 26.6262 28.2317 32.7931 29.2218 360262 1.3275 0.9374 31.5637 33.1908 34.1099 32.9417 360263 1.9512 0.9254 28.1671 25.5127 26.8628 26.7667
360266 2.2686 1.0163 29.8385 31.3706 33.4559 31.8486 360269 1.9619 0.9624 25.5191 26.3965 34.8464 29.0819 360270 1.1560 0.8555 28.8677 30.0580 32.1049 30.6384 360271 1.4738 0.9624 28.4353 30.8070 32.9727 30.7694 360272 *** * 38.1014 * * 38.1014 360273 *** * 37.6645 * * 37.6645
360274 1.6329 0.9172 * * 41.5894 41.5894 360275 *** * * * 35.3416 35.3416 360276 1.3571 0.8628 * * 30.8602 30.8602 360347 1.2052 1.0163 * * * *CMS-1498-P 881

**Provider Number Case-Mix**  **Index 2**  **FY 2011 Wage**  **Index Average**  **Hourly Wage**  **FY 2009 Average**  **Hourly Wage**  **FY 2010 Average**  **Hourly Wage**  **FY 2011 1**  **Average Hourly Wage**  ****** **(3 years)** 360348 1.6182 1.0163 * * * *
360349 1.4026 0.9374 * * * *
360350 1.8062 0.9624 * * * *
360351 1.9867 0.8850 * * * *
360352 1.0842 0.8628 * * * *
360354 1.4011 0.9624 * * * *
360355 1.5439 0.9183 * * * *
370001 1.6993 0.8903 28.4907 27.2881 29.2907 28.3843 370002 1.2418 0.8052 26.2486 26.5804 28.5178 27.1335
370004 1.1751 0.8446 28.2804 27.2378 29.4714 28.3160 370006 1.2115 0.8798 25.2307 27.5299 28.6399 27.1064 370007 0.9619 0.8052 21.1260 25.7680 29.2831 25.4572 370008 1.4129 0.8900 27.9944 29.1467 29.2458 28.8413 370011 0.9562 0.8900 23.1761 24.5886 26.7301 24.8297 370013 1.4968 0.8900 28.3502 29.7899 32.8050 30.3615
370014 1.2150 0.8445 28.8962 29.3407 28.8058 29.0123 370015 0.9979 0.8798 27.8061 27.6086 27.9015 27.7724 370016 1.5857 0.8900 30.4672 29.6737 30.9822 30.3796 370018 1.5379 0.8798 31.2335 29.3285 29.9348 30.1154 370019 1.1741 0.8052 26.7613 30.4599 30.9046 29.3782 370020 1.5729 0.8900 24.7520 24.7484 26.5784 25.3619
370022 1.3858 0.8306 26.4836 24.4735 26.1508 25.6663 370023 1.3323 0.8142 24.9580 27.4272 27.9018 26.8583 370025 1.3829 0.8798 24.8336 27.0211 27.6951 26.4528 370026 1.4507 0.8900 26.0203 26.8057 28.1146 26.9937 370028 2.0270 0.8900 29.9849 31.9029 33.9521 31.9991 370029 1.1511 0.8052 30.0134 30.3712 31.0013 30.4602
370030 0.9910 0.8798 26.0831 26.5853 27.9552 26.8681 370032 1.4856 0.8900 28.0739 30.2497 29.6486 29.2901 370034 1.2867 0.8052 23.2192 23.9679 29.5364 25.5443 370036 1.0370 0.8052 21.1544 22.1686 21.3785 21.5609 370037 1.8563 0.8900 26.8992 28.9215 30.8721 28.8559 370039 1.1530 0.8903 25.3422 26.7579 27.7301 26.6250
370040 0.9917 0.8052 19.7644 21.6739 23.4331 21.6824 370041 0.8609 0.8903 29.5074 26.4346 25.4871 27.1154 370047 1.4945 0.8900 27.8937 29.6739 32.3165 30.0356 370048 0.9653 0.8052 23.4848 24.2668 24.1343 23.9599CMS-1498-P 882

**Provider Number Case-Mix**  **Index 2**  **FY 2011 Wage**  **Index Average**  **Hourly Wage**  **FY 2009 Average**  **Hourly Wage**  **FY 2010 Average**  **Hourly Wage**  **FY 2011 1**  **Average Hourly Wage**  ****** **(3 years)** 370049 1.4371 0.8052 24.2099 22.8526 28.2783 25.0600 370051 1.0771 0.8052 21.8716 22.8411 25.2437 23.3375 370054 1.2593 0.8052 23.4644 25.4821 31.2786 26.7359
370056 1.7795 0.8616 27.6178 26.9562 31.0225 28.6018 370057 0.9892 0.8903 23.1814 21.0790 21.6866 21.9676 370060 *** * 25.5571 29.0333 * 27.1132 370065 1.0374 0.8148 24.0062 23.7889 27.6147 25.2679 370072 0.7840 0.8310 22.8598 17.3061 22.6081 20.6800 370078 1.6690 0.8903 30.4837 28.7496 30.0395 29.7756
370080 0.9537 0.8052 23.7231 22.4258 20.5624 22.2160 370083 0.8441 0.8103 21.9162 21.3677 19.0707 20.7313 370084 1.0783 0.8052 17.4202 17.7119 16.9006 17.3311 370089 1.5651 0.8052 22.0607 23.8318 25.9159 24.0554 370091 1.7197 0.8903 28.0487 28.3945 29.9801 28.8357 370093 1.9314 0.8900 26.7272 29.0161 30.3405 28.6784
370094 1.4661 0.8900 28.3512 29.5931 29.7407 29.2592 370097 1.3617 0.8616 28.0911 28.1234 28.0485 28.0899 370099 1.0863 0.8900 30.5437 28.8908 29.8196 29.7121 370100 0.8879 0.8152 20.6298 18.2493 20.4983 19.7870 370103 1.0503 0.8052 22.2675 23.4746 23.9559 23.2347 370105 2.1142 0.8900 30.5438 30.9068 36.1174 32.0645
370106 1.5245 0.8900 29.6797 31.4433 32.4747 31.2193 370112 1.0149 0.8052 19.0130 20.2239 20.4699 19.9447 370113 1.1529 0.8646 30.0061 28.3511 28.2888 28.8884 370114 1.7327 0.8903 27.1348 32.9928 34.7611 31.4511 370138 1.0298 0.8052 23.6348 24.7631 28.4293 25.7195 370139 0.9194 0.8052 21.0759 19.3691 22.7663 21.0194
370148 1.5057 0.8900 29.3447 30.8781 32.6383 30.9688 370149 1.3740 0.8354 23.0764 25.0025 27.3475 25.0933 370153 1.0947 0.8052 25.9238 30.0891 28.8427 28.2741 370156 1.0078 0.8173 22.7140 22.3940 23.9498 23.0193 370158 0.9116 0.8900 22.0056 22.2823 23.6271 22.6383 370166 0.9198 0.8903 26.3420 22.9735 24.2071 24.5055
370169 0.7920 0.8215 24.5389 20.5348 20.0430 21.8109 370170 0.9052 1.4444 * * * *
370171 1.0000 1.4444 * * * *
370172 0.8044 1.4702 * * * *CMS-1498-P 883

**Provider Number Case-Mix**  **Index 2**  **FY 2011 Wage**  **Index Average**  **Hourly Wage**  **FY 2009 Average**  **Hourly Wage**  **FY 2010 Average**  **Hourly Wage**  **FY 2011 1**  **Average Hourly Wage**  ****** **(3 years)** 370173 1.0007 1.4444 * * * *
370176 *** * 26.6687 27.2899 * 26.9843 370178 0.9180 0.8052 15.6720 17.3536 21.1275 17.9568
370180 1.2523 1.4444 * * * *
370183 0.9346 0.8903 30.3850 25.4218 25.6096 27.0506 370190 1.6477 0.8903 32.5635 35.6046 42.6067 37.1583 370192 1.9251 0.8900 19.1346 28.9574 32.6197 27.3274 370196 *** * 24.6984 * * 24.6984 370199 0.9552 0.8900 23.9376 25.9775 26.7845 25.6708
370200 *** * 19.7060 27.9940 35.8719 26.8170 370201 1.5046 0.8900 25.5882 30.4213 30.9026 28.9180 370202 1.4666 0.8903 25.8261 29.3845 30.9936 28.8532 370203 1.8920 0.8900 30.3641 31.6266 32.1871 31.6717 370206 1.9178 0.8900 30.8151 28.9491 30.0585 29.9057 370210 1.9062 0.8903 25.7905 29.4082 29.9079 28.4566
370211 1.1934 0.8900 30.9656 32.7888 34.6101 32.9440 370212 1.9722 0.8900 20.0919 23.4166 27.1375 23.5295 370214 0.8377 0.8173 20.1495 22.3796 25.0447 22.5261 370215 2.2825 0.8900 32.0950 32.7257 33.2373 32.7263 370216 2.1658 0.8903 29.6658 29.1189 26.1707 28.1248 370218 1.4156 0.8903 23.7517 29.6378 28.7572 27.2714
370219 *** * 41.4392 * * 41.4392 370220 2.2137 0.8900 21.3168 22.2077 20.9298 21.4203 370222 1.9360 0.8900 26.9175 28.6123 28.3453 27.9656 370223 *** * 24.0154 * 19.6604 21.4670 370224 *** * * 21.5542 * 21.5542 370225 1.1413 0.8900 * * * *
370226 *** * * * 37.1390 37.1390 370227 1.0250 0.8903 * * 25.9830 25.9830 370228 1.1823 0.8903 * * 29.2557 29.2557 370229 1.0257 0.8052 * * * *
370231 0.9969 0.8903 * * * *
370232 1.1109 0.8052 * * * *
380001 1.2530 1.1221 33.8490 36.3316 37.7584 36.0275 380002 1.3507 1.0089 32.6830 32.7006 33.7907 33.0702 380004 1.6902 1.1221 36.1021 37.7310 38.7848 37.5392 380005 1.4128 1.0089 33.5765 33.5424 36.4765 34.5241CMS-1498-P 884

**Provider Number Case-Mix**  **Index 2**  **FY 2011 Wage**  **Index Average**  **Hourly Wage**  **FY 2009 Average**  **Hourly Wage**  **FY 2010 Average**  **Hourly Wage**  **FY 2011 1**  **Average Hourly Wage**  ****** **(3 years)** 380007 1.9680 1.1221 36.4222 37.9358 39.2842 37.8818 380009 2.1862 1.1221 36.5688 36.8442 39.1393 37.5615 380014 1.9778 1.0340 35.7101 36.4373 36.1111 36.0952
380017 1.7902 1.1221 36.8103 37.5098 38.6492 37.6722 380018 2.0193 1.0089 32.4884 32.3945 33.4301 32.7883 380020 1.4677 1.1331 35.7392 37.4343 42.4903 38.6506 380021 1.5246 1.1221 33.0628 33.3855 35.2942 33.9333 380022 1.4159 1.0149 30.9181 32.6138 34.0849 32.6081 380025 1.2343 1.1221 38.1507 38.7401 40.2542 39.0981
380027 1.4336 1.1032 31.4398 33.7027 35.3681 33.5331 380029 1.3160 1.1119 33.3368 34.4907 36.3780 34.8151 380033 1.1325 1.1331 36.0798 36.6589 38.9026 37.2572 380037 1.4089 1.1221 34.0321 36.0715 37.8397 36.1223 380038 1.3228 1.1221 35.0350 36.3586 37.3367 36.2465 380040 1.5283 1.0089 34.4500 37.3200 39.0280 37.0491
380047 1.8942 1.1032 35.8165 37.9901 39.2864 37.8086 380050 1.4662 1.0089 31.3088 32.4377 35.5034 33.1746 380051 1.8579 1.1221 35.0114 37.3363 39.5771 37.3333 380052 1.2455 1.0089 27.7656 29.1449 30.5763 29.1627 380056 1.2401 1.1119 31.0210 31.9034 32.2946 31.7201 380060 1.5979 1.1221 35.1106 36.9581 37.6168 36.6196
380061 1.6961 1.1221 35.8922 37.9554 39.8524 37.8861 380071 1.5130 1.1221 31.6821 32.7466 36.1630 33.5296 380075 1.4781 1.0089 34.0197 36.0119 37.8963 35.9417 380082 1.3415 1.1221 37.7268 38.8914 40.5892 39.0683 380089 1.3650 1.1221 37.0017 37.7878 39.3331 38.0936 380090 1.3301 1.1032 41.4540 41.3541 36.1957 39.4825
380091 1.6124 1.1221 39.7431 47.7003 43.5979 43.8371 380100 *** * 45.3882 * * 45.3882 380102 1.8467 1.1331 * * * *
390001 1.5928 0.8521 25.4188 27.9772 27.1369 26.8091 390002 1.4560 0.8579 25.9827 26.9670 28.0217 26.9883 390003 1.1897 0.8521 26.2872 26.6558 28.5550 27.1598
390004 1.7151 0.9172 26.5054 29.3249 30.1116 28.6336 390006 1.9048 0.9172 30.9914 32.8108 34.0319 32.6975 390008 1.1052 0.8581 22.9417 25.0200 23.3722 23.7761 390009 1.7909 0.8521 29.0286 29.4416 29.4788 29.3179CMS-1498-P 885

**Provider Number Case-Mix**  **Index 2**  **FY 2011 Wage**  **Index Average**  **Hourly Wage**  **FY 2009 Average**  **Hourly Wage**  **FY 2010 Average**  **Hourly Wage**  **FY 2011 1**  **Average Hourly Wage**  ****** **(3 years)** 390010 *** * 26.0966 27.8944 * 26.9767 390012 1.2900 1.0780 34.2004 35.6251 36.5075 35.4492 390013 1.4998 0.9172 28.3039 26.8792 28.6128 27.9375
390016 1.3710 0.8521 26.1802 25.6660 28.0791 26.6336 390019 1.2656 0.9418 25.3185 25.2047 27.4886 25.9672 390023 1.2198 1.0780 36.2618 37.9254 40.0307 38.0623 390024 *** * 37.4815 * * 37.4815 390025 0.5715 1.0780 * * * *
390026 1.2953 1.0780 36.0608 36.6927 37.8982 36.8748
390027 1.8176 1.0780 40.9110 42.5592 43.2863 42.2614 390028 1.7616 0.8579 29.6218 31.3868 29.7659 30.2416 390030 1.1774 0.8856 26.5678 26.9684 29.2589 27.6203 390031 1.2218 0.8856 26.1258 27.5747 30.8796 28.1344 390032 1.3312 0.8579 25.3756 27.3294 28.0123 26.9158 390035 1.2342 1.0780 27.2130 27.6331 30.9600 28.6617
390036 1.5866 0.8579 26.1956 30.1286 32.9773 29.7227 390037 1.4602 0.8579 27.0788 31.6832 31.5443 30.0435 390039 1.3655 0.8558 22.1531 23.3456 24.9694 23.4740 390041 1.2656 0.8579 25.1190 26.4415 26.5753 26.0714 390042 1.5148 0.8579 29.6213 30.6691 30.9971 30.4337 390043 1.2296 0.8521 24.3590 26.4451 27.6266 26.1527
390044 1.6128 0.9047 29.9959 30.6946 30.4850 30.4001 390045 1.4760 0.8521 25.8800 26.4450 25.4029 25.8954 390046 1.8301 0.9760 32.5273 32.1156 34.3559 33.0452 390048 1.1692 0.9172 28.4563 29.0278 30.0870 29.1884 390049 1.5518 0.9418 31.0290 32.7809 33.9546 32.6141 390050 2.1229 0.8579 29.6715 32.0935 32.6719 31.5014
390052 1.1984 0.8568 26.3700 27.4028 28.0662 27.3003 390054 *** * 27.5696 * * 27.5696 390056 1.1238 0.8557 24.7038 25.5903 26.0944 25.4676 390057 1.3731 1.0780 31.0279 33.9576 34.1227 33.0166 390058 1.4268 0.9172 29.6620 29.4647 31.4346 30.2160 390061 1.5125 0.9760 30.9208 30.2319 33.2839 31.3678
390062 1.1590 0.8529 22.8856 37.2849 24.7403 28.3031 390063 1.9432 0.8521 28.3987 30.3687 29.6085 29.4599 390065 1.3869 1.0539 31.8841 31.2628 34.1509 32.4868 390066 1.4935 0.9172 29.0033 28.3747 28.4545 28.6018CMS-1498-P 886

**Provider Number Case-Mix**  **Index 2**  **FY 2011 Wage**  **Index Average**  **Hourly Wage**  **FY 2009 Average**  **Hourly Wage**  **FY 2010 Average**  **Hourly Wage**  **FY 2011 1**  **Average Hourly Wage**  ****** **(3 years)** 390067 1.8047 0.9760 32.2891 30.5601 32.7009 31.8523 390068 1.2866 0.9760 29.6984 28.2183 31.3686 29.7350 390070 1.3814 1.0780 34.5501 33.4969 34.5022 34.1840
390071 1.0479 0.8521 26.3830 27.8695 29.4067 27.8637 390072 1.0365 0.8521 28.8145 28.0714 29.3008 28.7479 390073 1.7549 0.8529 27.0876 28.8519 30.4073 28.7640 390076 1.3590 1.0780 33.9908 34.0355 36.0337 34.6436 390079 1.8713 0.8762 26.0199 26.9676 29.0245 27.3480 390080 1.4522 1.0780 31.6210 33.0003 34.7963 33.0758
390081 1.3314 1.0780 36.4788 37.7643 37.7381 37.3396 390084 1.2793 0.8521 24.3191 24.8010 26.7795 25.2800 390086 1.5945 0.8521 24.7454 25.3096 25.8212 25.3007 390090 1.8764 0.8579 30.1256 31.9282 33.7323 31.8674 390091 1.2620 0.8521 23.2118 23.9434 24.9895 24.0598 390093 1.2290 0.8521 23.8846 23.5291 23.4916 23.6341
390095 1.2005 0.8521 25.3859 25.9594 25.8271 25.7150 390096 1.6264 0.9047 30.3910 31.7443 32.9599 31.7312 390097 1.2966 1.0780 28.1285 30.4946 31.2933 29.9565 390100 1.6541 0.9760 32.7836 32.8949 33.8098 33.1901 390101 1.3191 0.9539 25.9850 28.6622 30.5652 28.4498 390102 1.4762 0.8579 25.5336 26.3716 27.4078 26.4615
390104 1.0256 0.8521 20.4552 26.8407 25.5500 24.5842 390107 1.7718 0.8579 25.6790 26.6305 27.5113 26.6481 390108 1.3264 1.0780 34.3066 33.3017 33.0812 33.5657 390110 1.6616 0.8521 25.7159 28.5314 29.2114 27.8372 390111 2.3297 1.0780 37.7322 34.5571 37.4034 36.5385 390112 1.1114 0.8558 18.4185 19.5361 21.7618 19.8898
390113 1.3636 0.8521 24.8669 25.9952 27.3239 26.1026 390114 1.5335 0.8579 28.5336 28.2039 31.1727 29.3417 390115 1.4010 1.0780 32.5058 32.8427 32.4906 32.6138 390116 1.4090 1.0780 33.9295 34.5119 35.8124 34.7722 390117 1.2284 0.8523 22.2327 26.0642 29.4532 25.9021 390118 1.2756 0.8521 23.6535 23.7128 24.9150 24.0866
390119 1.3599 0.8521 25.3907 25.9784 27.7668 26.4246 390122 1.0543 0.8574 24.6434 24.0424 25.6753 24.7750 390123 1.2379 1.0780 35.1244 34.1121 36.2907 35.1769 390125 1.2563 0.8543 24.0199 24.4654 28.2329 25.5409CMS-1498-P 887

**Provider Number Case-Mix**  **Index 2**  **FY 2011 Wage**  **Index Average**  **Hourly Wage**  **FY 2009 Average**  **Hourly Wage**  **FY 2010 Average**  **Hourly Wage**  **FY 2011 1**  **Average Hourly Wage**  ****** **(3 years)** 390127 1.5706 1.0780 33.1227 34.6488 37.2911 35.0077 390128 1.2760 0.8579 25.1858 26.0441 26.6048 25.9610 390130 1.2073 0.8521 30.7083 26.7324 27.8831 28.3944
390131 1.4113 0.8579 27.7146 26.9190 27.7765 27.4675 390132 1.6245 1.0780 30.0751 33.1853 34.6686 32.6204 390133 1.8571 1.0663 33.0604 35.0046 33.5858 33.8932 390137 1.5065 0.8521 26.9156 27.9033 28.8768 27.9121 390138 1.3244 0.9172 27.7565 29.0224 31.9340 29.6092 390139 1.3858 1.0780 36.5001 36.8337 38.9715 37.4666
390142 1.5812 1.0780 33.3509 38.1793 41.7965 37.8882 390145 1.4739 0.8579 26.9212 27.6510 28.4472 27.7026 390146 1.1970 0.8543 23.9878 27.5267 28.5944 26.6700 390147 1.4098 0.8579 29.0995 30.4797 29.9003 29.8258 390150 1.1325 0.8552 22.6483 27.2922 29.5097 26.6124 390151 1.4533 1.0539 31.8967 35.0627 36.1838 34.4568
390153 1.3662 1.0780 36.0287 37.0995 38.6509 37.2968 390154 1.2217 0.8521 23.9785 24.6857 26.5297 25.0858 390156 1.3617 1.0780 33.7057 34.9903 37.3076 35.3187 390157 1.2496 0.8579 23.0989 23.7167 25.3304 24.0528 390160 1.4641 0.8579 25.2043 27.5196 28.6869 27.1706 390162 1.5709 1.1296 35.1844 36.7008 37.4703 36.4185
390163 1.3306 0.8579 24.8761 25.4594 26.9809 25.7955 390164 2.2789 0.8579 29.7778 29.0556 30.3482 29.7279 390166 *** * 28.2178 * * 28.2178 390168 1.6857 0.8579 27.3674 28.2578 30.9235 28.8822 390169 1.1762 0.8521 26.6063 28.4619 28.7411 27.9870 390173 1.3215 0.8558 27.6039 28.0999 29.4695 28.4211
390174 1.8138 1.0780 35.1118 36.5352 38.5670 36.7628 390176 1.0420 0.8579 * 27.5270 32.1051 29.5889 390178 1.4445 0.8612 23.9166 25.2325 26.0853 25.0756 390179 1.4701 1.0780 31.5498 33.9916 35.7591 33.8296 390180 1.4303 1.0780 38.2997 37.8677 39.2901 38.4851 390181 *** * 27.8833 * * 27.8833
390183 1.1887 0.8521 28.2211 28.8361 29.9287 29.0390 390184 1.0458 0.8579 23.9973 24.1461 24.6116 24.2542 390185 1.3942 0.9418 25.5318 28.1346 29.5155 27.8683 390189 1.0954 0.8521 23.4902 25.3686 26.8189 25.2753CMS-1498-P 888

**Provider Number Case-Mix**  **Index 2**  **FY 2011 Wage**  **Index Average**  **Hourly Wage**  **FY 2009 Average**  **Hourly Wage**  **FY 2010 Average**  **Hourly Wage**  **FY 2011 1**  **Average Hourly Wage**  ****** **(3 years)** 390192 1.0196 0.8521 23.7958 24.7427 25.0085 24.5203 390194 1.2336 0.9418 23.7367 27.8231 27.5260 26.2940 390195 1.6061 1.0780 37.2504 36.8626 39.5226 37.8846
390196 1.5301 * * * * *
390197 1.3716 0.9418 27.7303 28.1999 28.4855 28.1347 390198 1.0016 0.8521 21.0861 21.3574 23.6249 22.0336 390199 1.1525 0.8521 24.5469 24.9642 25.6275 25.0628 390201 1.5511 0.9691 28.5668 28.7755 33.2321 30.2676 390203 1.5230 1.0780 30.7244 33.0056 39.2667 34.4792
390204 1.3951 1.0780 32.0242 33.8120 31.6920 32.4668 390211 1.4122 0.8612 27.7875 28.0796 29.5567 28.4769 390217 1.2688 0.8579 26.2706 25.6917 27.0886 26.3518 390219 1.3817 0.8579 26.3263 27.2812 28.9463 27.5217 390220 1.2574 1.0780 32.0891 33.0323 34.0933 33.0447 390222 1.4380 1.0780 32.7077 34.5835 35.0162 34.1313
390223 2.1413 1.0780 36.5784 35.8030 36.4686 36.2827 390225 1.3671 0.9760 26.3642 * 37.2003 31.3972 390226 1.7682 1.0780 35.4683 35.5564 37.7252 36.2815 390228 1.5300 0.8579 25.5120 28.4321 28.7341 27.5570 390231 1.4535 1.0780 35.2312 35.0675 35.2479 35.1832 390233 1.4332 0.8521 28.3660 29.5938 31.2920 29.7908
390236 1.0294 0.8524 24.5574 25.1866 26.6442 25.4333 390237 1.6878 0.8521 29.9748 29.6917 29.3123 29.6520 390256 1.9907 0.9172 28.5887 31.6455 32.5650 30.9753 390258 1.4564 1.0780 32.0551 33.7330 37.1156 34.3523 390263 1.6615 0.9418 30.2069 31.1718 31.3913 30.9524 390265 1.6237 0.8579 27.7795 27.8241 30.8343 28.8119
390266 1.1383 0.8612 23.0142 23.5248 24.2255 23.5948 390267 1.5021 0.8579 25.7571 28.4250 30.7224 28.2795 390268 1.4705 0.8640 28.4200 30.0652 30.2637 29.6045 390270 1.7441 0.8521 27.0301 29.3622 31.2862 29.3404 390272 0.6330 1.0780 32.9918 29.4836 28.9815 30.3399 390278 0.7864 1.0780 28.8318 33.9596 32.6176 31.7776
390285 *** * 38.4703 43.0793 42.6411 41.2248 390286 *** * 31.7337 32.6998 34.3467 32.9330 390290 1.8432 1.0780 47.7663 41.9121 45.5855 45.0203 390304 1.4348 1.0780 33.4134 35.0741 31.4118 33.2717CMS-1498-P 889

**Provider Number Case-Mix**  **Index 2**  **FY 2011 Wage**  **Index Average**  **Hourly Wage**  **FY 2009 Average**  **Hourly Wage**  **FY 2010 Average**  **Hourly Wage**  **FY 2011 1**  **Average Hourly Wage**  ****** **(3 years)** 390307 1.9281 0.8612 22.9474 27.2053 28.6025 26.1219 390311 *** * 49.9027 * * 49.9027 390312 1.4452 1.0780 51.3372 42.3481 47.4912 46.6973
390313 1.1402 0.8856 * 27.3018 28.2730 27.7674 390314 1.9104 0.9418 * * 31.2627 31.2627 390315 *** * * * 33.7886 33.7886 390316 2.1098 0.9047 * * 27.5474 27.5474 390317 0.8038 1.0780 * * 40.0462 40.0462 390318 1.4192 0.9418 * * 28.8744 28.8744
390319 0.9481 0.8579 * * * *
390320 2.7965 1.0780 * * * *
390321 1.7804 0.9418 * * * *
400001 1.3274 0.4302 15.4249 15.9192 16.7467 16.0408 400002 *** * 12.9793 14.2946 * 13.6163 400003 1.4027 0.4278 14.6859 15.8816 16.1022 15.5378
400004 1.1337 0.4302 13.5197 14.5542 15.6128 14.5649 400005 1.1494 0.4302 11.7590 12.6516 13.5902 12.6912 400006 1.2753 0.4302 * * 11.3150 11.3150 400007 1.3194 0.4302 10.4934 10.7767 12.4403 11.1611 400009 1.0496 0.3577 10.1212 14.0016 12.1371 11.8594 400010 0.8029 0.3384 10.4206 12.8584 9.9686 10.7816
400011 1.2081 0.4302 9.4068 10.7620 11.2889 10.4922 400012 1.6634 0.4302 * 11.1553 12.3642 11.7247 400013 1.3877 0.4302 12.3073 12.7900 13.8665 13.0128 400014 1.4610 0.3612 12.3301 11.0722 11.8099 11.7048 400015 1.2566 0.4302 21.9225 17.6943 20.6014 19.9015 400016 1.5854 0.4302 17.9107 19.1577 18.3119 18.4599
400017 *** * 10.0590 * * 10.0590 400018 1.3636 0.4302 13.1572 13.6091 14.0267 13.6205 400019 1.5566 0.4302 15.2364 15.0604 15.9353 15.3872 400021 1.5607 0.4570 14.9779 16.3677 16.9832 16.1033 400022 1.4793 0.4278 15.2124 15.3660 16.3760 15.6441 400024 0.7732 0.3612 13.7215 14.2708 12.9549 13.5783
400026 1.2407 0.3577 8.9064 9.8155 10.7169 9.7988 400028 *** * 9.6941 11.1923 10.2934 10.3638 400032 1.1343 0.4302 10.7844 11.9013 12.2669 11.6859 400044 1.7300 0.4278 12.1393 13.4579 14.6579 13.6085CMS-1498-P 890

**Provider Number Case-Mix**  **Index 2**  **FY 2011 Wage**  **Index Average**  **Hourly Wage**  **FY 2009 Average**  **Hourly Wage**  **FY 2010 Average**  **Hourly Wage**  **FY 2011 1**  **Average Hourly Wage**  ****** **(3 years)** 400048 1.2979 0.3577 10.5176 11.5766 13.1850 11.7959 400061 2.1704 0.4302 17.4504 18.5327 20.5087 18.8372 400079 1.5588 0.3384 10.6127 11.3550 11.9824 11.3404
400087 1.2640 0.4302 12.0034 12.6233 13.4288 12.6871 400098 1.2431 0.4302 12.8756 13.2365 13.3671 13.1717 400102 1.2316 0.4302 12.1257 12.6314 10.9542 11.7721 400103 2.0761 0.3612 11.3314 12.7285 11.9853 12.0090 400104 1.3358 0.4302 12.6934 12.9616 11.8195 12.5011 400105 1.0711 0.4302 17.0463 25.3823 19.6129 19.9057
400106 1.1191 0.4302 14.8544 14.1766 15.1456 14.7145 400109 1.4847 0.4302 14.5713 15.4910 16.2304 15.4433 400110 1.2368 0.3544 10.8214 11.2311 12.3738 11.4462 400111 1.2060 0.3384 10.7892 11.0467 12.0683 11.3123 400112 1.2379 0.4302 11.2303 9.6181 13.0534 11.1342 400113 1.3390 0.4278 11.5948 11.9672 12.8788 12.1619
400114 1.2113 0.4302 11.6872 11.5514 12.7842 12.0298 400115 1.0598 0.4302 10.6809 12.0201 10.9564 11.2441 400117 1.0324 0.4302 12.1540 12.2159 13.0609 12.4850 400118 1.3323 0.4302 12.6199 13.3983 14.0618 13.3770 400120 1.4734 0.4302 14.5205 14.6591 15.3683 14.8571 400121 1.0669 0.4302 9.9713 11.7462 11.7441 11.2726
400122 2.2443 0.4302 10.0966 13.1851 13.6602 12.0852 400123 1.2369 0.3612 13.8601 13.4317 14.3030 13.8583 400124 2.8599 0.4302 19.1704 21.9082 22.0619 21.0750 400125 1.2425 0.3892 13.1078 12.7141 13.5864 13.1629 400126 1.2276 0.4570 * 14.2108 13.0372 13.5539 400127 2.2024 0.4302 * 12.0796 10.6621 11.1995
400128 1.0442 0.4302 * 23.6366 14.1088 17.2092 410001 1.3296 1.1613 30.5865 30.8038 33.6421 31.6567 410004 1.3994 1.1613 35.2384 33.7118 35.8403 34.9238 410005 1.2979 1.1613 34.2846 38.2842 38.0619 36.9368 410006 1.4558 1.0751 33.9961 35.4462 36.1985 35.2228 410007 1.7064 1.1613 34.4774 37.0287 38.3867 36.7006
410008 1.3757 1.0751 33.6384 34.6138 35.3809 34.5644 410009 1.3355 1.0751 34.3427 36.0892 36.4091 35.6362 410010 1.1199 1.1613 34.9330 38.4603 39.9638 37.7769 410011 1.4645 1.1613 36.7668 38.5007 37.6589 37.6665CMS-1498-P 891

**Provider Number Case-Mix**  **Index 2**  **FY 2011 Wage**  **Index Average**  **Hourly Wage**  **FY 2009 Average**  **Hourly Wage**  **FY 2010 Average**  **Hourly Wage**  **FY 2011 1**  **Average Hourly Wage**  ****** **(3 years)** 410012 1.6248 1.1613 36.5207 37.5223 38.6851 37.5744 410013 1.2620 1.1412 39.8659 38.2253 38.6414 38.8940 420002 1.6629 0.9300 31.2247 32.3569 33.2952 32.2569
420004 2.1010 0.9295 30.0764 31.8610 34.1012 32.1498 420005 1.2940 0.8450 26.5044 28.0173 29.8412 28.1181 420006 2.1518 * 29.1404 31.5368 32.2965 30.9655 420007 1.7111 0.9128 28.9557 31.1080 31.3033 30.4861 420009 1.4017 0.9128 28.6648 29.1084 29.6808 29.1549 420010 1.1694 0.8478 26.5523 27.0435 27.8709 27.1665
420011 1.1720 0.9357 26.0585 25.9484 25.1689 25.7394 420015 1.3418 0.9357 27.4929 27.9759 29.5582 28.3316 420016 1.0027 0.8438 23.4323 23.2125 23.4618 23.3687 420018 1.9284 0.8799 29.0923 28.9660 30.2579 29.4553 420019 1.1621 0.8596 25.8119 23.7910 26.9977 25.5119 420020 1.3033 0.9295 29.2935 28.9093 30.9488 29.7089
420023 1.8241 0.9357 30.4492 31.2602 32.2488 31.4072 420026 1.9124 0.8799 29.5066 31.2504 32.5572 31.1347 420027 1.6300 0.9128 31.3797 30.6779 * 31.0258 420030 1.4921 0.9295 30.3424 31.3260 33.0987 31.5744 420033 1.3463 0.9357 32.4287 33.8157 33.5699 33.2702 420036 1.2688 0.8695 26.3480 27.1715 28.0250 27.1767
420037 1.4064 0.9357 32.7124 33.5291 34.1076 33.4635 420038 1.2847 0.9357 27.1524 29.5673 31.5388 29.4623 420039 1.0619 0.8970 26.3127 24.5270 26.0489 25.6075 420043 1.1861 0.8595 25.8366 24.2727 25.6018 25.2202 420048 1.3049 0.8799 27.4353 29.9094 30.5167 29.3111 420049 1.3260 0.8681 28.0920 28.4801 29.1163 28.5669
420051 1.8299 0.8478 27.6130 28.0711 29.6261 28.4477 420053 1.2963 0.8473 25.4820 26.4997 27.1081 26.3512 420054 1.1210 0.8446 26.7900 27.1580 28.2725 27.4120 420055 1.1416 0.8467 25.3144 25.9899 26.0255 25.7592 420056 1.3094 0.8438 29.7774 27.8175 29.3188 28.9542 420057 1.2963 0.8478 27.7137 29.5662 29.8897 29.0709
420062 1.0833 0.8563 27.2263 28.3129 29.4726 28.3826 420064 1.5616 0.8681 25.0654 26.4352 28.3216 26.6452 420065 1.5441 0.9295 28.1896 28.2922 28.9626 28.4895 420066 0.9570 0.8478 20.5743 26.0307 27.0504 24.3154CMS-1498-P 892

**Provider Number Case-Mix**  **Index 2**  **FY 2011 Wage**  **Index Average**  **Hourly Wage**  **FY 2009 Average**  **Hourly Wage**  **FY 2010 Average**  **Hourly Wage**  **FY 2011 1**  **Average Hourly Wage**  ****** **(3 years)** 420067 1.4142 0.8858 27.7167 29.0379 29.2066 28.6526 420068 1.5378 0.9571 28.0316 28.1555 30.0666 28.7169 420069 1.2850 0.8438 24.4656 25.1993 25.9447 25.2155
420070 1.4122 0.8695 27.6431 28.4000 28.5579 28.2053 420071 1.5208 0.9128 28.1099 28.6098 30.2531 29.0105 420072 1.1647 0.8438 20.7716 24.4951 25.2077 23.5012 420073 1.4865 0.8799 28.2671 29.5999 30.4941 29.4818 420078 1.9867 0.9357 32.8731 34.3181 33.3691 33.5209 420079 1.5363 0.9295 30.5981 31.7686 32.4626 31.6252
420080 1.4096 0.8858 32.8712 33.8785 35.2949 34.0334 420082 1.5126 0.9571 34.8864 33.5290 33.6670 33.9910 420083 1.4791 0.9128 29.6587 29.2264 33.5329 30.7160 420085 1.5196 0.9265 29.9085 31.3391 32.5361 31.2837 420086 1.5308 0.8799 29.6349 30.1406 30.5884 30.1347 420087 1.8321 0.9295 28.4632 28.8860 29.6136 29.0043
420089 1.6898 0.9295 31.7367 33.0906 35.2407 33.3707 420091 1.5567 0.8478 27.9062 28.0471 30.7482 28.8706 420098 1.1976 0.8462 27.6722 28.2058 29.6500 28.5992 420100 *** * 29.2979 * * 29.2979 420101 1.0052 0.8858 33.1995 33.5957 33.0451 33.2696 420102 1.8906 0.9357 * * 34.3207 34.3207
420103 1.2387 0.9357 * * * *
430005 1.4208 0.8435 25.4385 27.1759 29.2386 27.2448 430008 1.1323 0.8970 27.2275 27.2961 28.1278 27.5654 430012 1.3663 0.9388 27.0195 28.5808 28.9595 28.1941 430013 1.2067 0.8435 28.4962 28.3679 29.7388 28.8759 430014 1.5187 0.8435 28.9295 29.2921 30.3630 29.5359
430015 1.3611 0.8435 28.0414 28.0093 28.9296 28.3270 430016 1.6144 0.9388 31.1336 31.5894 34.2610 32.4635 430027 1.7295 0.9388 29.2617 29.2432 31.1835 29.9366 430048 1.2480 0.8564 25.6428 26.9537 28.6697 27.1026 430060 0.9026 0.8435 * 11.7801 * 11.7801 430064 0.9703 * 17.7334 * * 17.7334
430077 1.7929 1.0990 31.1945 35.3480 39.6547 35.4000 430081 1.0199 1.4448 * * * *
430082 0.7513 1.4448 * * * *
430083 1.0550 1.4448 * * * *CMS-1498-P 893

**Provider Number Case-Mix**  **Index 2**  **FY 2011 Wage**  **Index Average**  **Hourly Wage**  **FY 2009 Average**  **Hourly Wage**  **FY 2010 Average**  **Hourly Wage**  **FY 2011 1**  **Average Hourly Wage**  ****** **(3 years)** 430084 0.8832 1.4448 * * * *
430089 2.2827 0.8968 24.9060 28.3217 28.7338 27.4480 430090 2.0301 0.9388 32.7395 33.8350 34.0212 33.5658
430091 2.0885 1.0990 26.7258 28.3496 29.0916 28.0819 430092 2.0494 0.8435 23.2527 26.6750 28.3015 26.0017 430093 0.9808 1.0990 24.7426 30.7398 30.2337 28.4605 430094 1.7420 0.8564 23.6624 23.9005 24.9804 24.2133 430095 2.3107 0.9388 32.5881 31.8141 38.2085 34.0836 430096 2.3728 0.8435 24.9623 28.0608 28.3796 27.0773
440001 1.1423 0.7919 25.4855 23.9380 25.8019 25.0735 440002 1.7402 0.8907 26.9133 28.4828 28.7976 28.0851 440003 1.3257 0.9246 26.0115 31.4162 31.1666 29.3051 440006 1.6645 0.9246 31.7394 32.6924 33.2995 32.6609 440007 1.1248 0.8138 22.7571 23.4825 23.6870 23.3271 440008 1.0281 0.8368 26.8857 26.2003 28.2870 27.1392
440009 1.1708 0.7919 24.4423 25.1184 26.0040 25.1835 440010 0.9243 0.7919 20.2497 23.8087 24.9022 22.8411 440011 1.4425 0.7919 24.8300 25.7912 27.1600 25.9502 440012 1.5952 0.7919 24.9261 26.2076 26.5953 25.9396 440015 1.9977 0.7919 27.1603 28.1389 28.4467 27.9223 440016 1.0765 0.8063 25.2512 25.4197 27.4924 26.0451
440017 1.8177 0.7919 26.1820 28.6110 27.1081 27.3237 440018 1.1740 0.7919 24.8568 26.0748 26.3363 25.7740 440019 *** * 26.2464 28.0387 30.1931 28.0787 440020 1.0657 0.7919 27.5626 28.0269 28.6636 28.0709 440024 *** * 26.2534 25.4398 * 25.8750 440025 1.2561 0.8407 24.0289 25.5605 26.7642 25.4762
440026 *** * 28.4615 26.5911 29.9514 28.3617 440029 1.4714 0.9246 31.4652 31.8872 32.1072 31.8356 440030 1.3554 0.7919 22.3144 23.1116 23.2575 22.8992 440031 1.2845 0.7938 22.0711 23.0937 24.1851 23.1142 440032 1.2903 0.7919 23.8030 25.4122 25.3202 24.8770 440033 1.1176 0.7946 23.9792 24.3197 24.4996 24.2751
440034 1.7491 0.7919 25.9138 26.7987 27.0736 26.5997 440035 1.3762 0.9246 27.9217 26.8725 27.7533 27.5134 440039 2.2785 0.9246 30.1918 32.4190 32.3384 31.6681 440040 0.8602 0.7919 21.1288 21.3795 23.0134 21.8153CMS-1498-P 894

**Provider Number Case-Mix**  **Index 2**  **FY 2011 Wage**  **Index Average**  **Hourly Wage**  **FY 2009 Average**  **Hourly Wage**  **FY 2010 Average**  **Hourly Wage**  **FY 2011 1**  **Average Hourly Wage**  ****** **(3 years)** 440046 1.5007 0.9246 30.7334 31.5146 32.8764 31.6731 440047 0.9783 0.8257 25.2150 26.8032 28.6702 26.9106 440048 1.8888 0.9137 30.6725 31.5584 32.5404 31.5872
440049 1.7063 0.9137 29.8623 31.7148 32.6356 31.4058 440050 1.4510 0.7919 26.3825 27.1284 29.3303 27.5657 440051 0.9297 0.8001 23.6560 23.1773 24.8037 23.8861 440052 1.0648 * 24.4071 28.1868 * 26.2378 440053 1.3950 0.9246 30.3907 31.3189 32.4503 31.4080 440054 1.2435 0.7919 21.9641 25.7785 25.9377 24.4630
440056 1.2204 0.7919 24.0635 25.2050 25.9743 25.0917 440057 1.1740 0.7940 19.3546 25.1519 22.9222 22.2785 440058 1.1492 0.8582 29.1184 28.5093 28.0299 28.5506 440059 1.5321 0.9246 29.4532 30.4489 30.5995 30.1903 440060 1.3363 0.8257 26.5867 26.5518 27.3024 26.8209 440061 1.1152 0.7919 25.4134 25.9969 26.5212 25.9931
440063 1.7344 0.7952 26.0763 25.4344 24.7803 25.4192 440064 0.9734 0.8721 26.7957 26.9014 28.9331 27.5492 440065 1.4389 0.9246 25.6111 27.3501 27.6328 26.8707 440067 1.0879 0.7919 26.0866 26.5062 27.4606 26.6924 440068 1.1836 0.8531 27.9082 27.2646 28.3925 27.8565 440070 0.9667 0.8028 23.2228 24.4477 23.7568 23.8061
440072 1.1077 0.7919 26.1661 27.6990 29.4625 27.8065 440073 1.4586 0.9246 27.5133 28.3950 33.8232 29.7943 440081 1.3267 0.7971 21.9681 23.3000 24.5259 23.2799 440082 1.9820 0.9246 32.8941 34.4535 34.2270 33.8164 440083 0.9678 0.7919 25.7074 25.5397 31.8133 27.4028 440084 1.1913 0.7944 19.8950 21.3873 22.1562 21.1576
440091 1.8112 0.8721 28.9697 30.0650 31.3375 30.1465 440102 1.0781 0.7919 22.1114 23.5525 24.5121 23.3354 440104 2.0266 0.8721 28.0905 29.7326 30.2301 29.3691 440105 0.9050 0.7952 23.7154 24.6039 25.1558 24.4882 440109 1.0319 0.7989 22.5878 23.8465 25.0329 23.8752 440110 1.2059 0.7919 23.6275 23.8010 25.2412 24.2401
440111 1.3708 0.9246 29.7461 33.0828 34.8033 32.5048 440115 1.0246 0.8257 24.9778 25.2508 26.5072 25.5829 440120 1.5835 0.7919 26.0621 28.0271 29.3067 27.8170 440125 1.7354 0.7919 24.0934 24.7908 25.9494 24.9465CMS-1498-P 895

**Provider Number Case-Mix**  **Index 2**  **FY 2011 Wage**  **Index Average**  **Hourly Wage**  **FY 2009 Average**  **Hourly Wage**  **FY 2010 Average**  **Hourly Wage**  **FY 2011 1**  **Average Hourly Wage**  ****** **(3 years)** 440130 1.1307 0.7919 26.3192 27.5525 29.7509 27.8864 440131 1.1097 0.9137 28.3162 29.0546 29.2776 28.8882 440132 1.2404 0.7919 29.3377 26.1823 26.0031 27.0744
440133 1.7764 0.9246 32.5726 33.2319 32.4641 32.7486 440135 *** * 27.2094 28.7658 * 27.7843 440137 1.1024 0.8657 24.6143 25.6931 26.9374 25.7242 440141 1.0666 0.7919 24.8737 24.3575 26.3678 25.1500 440144 1.2612 0.8531 26.3225 26.6282 28.1527 27.0256 440147 *** * 36.6978 33.5900 37.8346 36.1793
440148 1.2607 0.8215 28.0708 26.2483 26.9352 27.0789 440150 1.5299 0.9246 30.5513 32.9854 32.8334 32.1424 440151 1.2054 0.9246 28.6585 28.8412 29.7082 29.0660 440152 2.5625 0.9137 29.0588 28.7357 30.1779 29.3307 440153 1.0707 0.7919 23.3790 23.8797 25.5049 24.2283 440156 1.6720 0.8721 30.5161 31.0506 31.6017 31.0718
440159 1.4664 0.9137 27.2785 26.2728 29.3516 27.6174 440161 2.1078 0.9246 31.0667 32.2343 33.4813 32.2916 440162 *** * 24.6425 27.8605 32.8708 28.2006 440168 0.9044 0.9137 31.3316 37.0865 35.6076 34.6194 440173 1.5174 0.7919 23.1370 23.5486 24.5617 23.7711 440174 0.9085 0.8907 27.4579 27.4578 29.2147 28.0222
440175 1.0307 0.7919 26.7705 29.2713 28.1637 28.0598 440176 1.4968 0.7919 24.9420 26.1477 25.8830 25.6676 440180 1.1625 0.7946 24.3376 26.9310 28.0126 26.4469 440181 1.1717 0.8284 26.4763 26.2247 26.8006 26.5057 440182 0.9173 0.8063 24.9899 24.4173 26.1132 25.1673 440183 1.5613 0.9137 30.9923 31.9159 33.2870 32.0523
440184 1.1262 0.7952 26.9086 25.3287 23.3322 25.0223 440185 1.2332 0.8531 26.3974 25.6005 27.2121 26.4383 440186 0.9656 0.9246 28.2840 30.0775 29.4231 29.3781 440187 1.1201 0.7919 27.4034 27.2669 29.4492 28.0330 440189 1.3670 0.8310 30.5786 29.9065 32.4791 31.0665 440192 1.1026 0.9246 30.6533 32.0772 30.4030 31.0183
440193 1.4241 0.9246 25.9726 27.8132 29.2015 27.6576 440194 1.3855 0.9246 32.3020 32.1073 33.3464 32.6095 440197 1.5649 0.9246 31.4317 32.3241 33.1604 32.2961 440200 1.1684 0.9246 23.8288 23.3049 25.6800 24.2881CMS-1498-P 896

**Provider Number Case-Mix**  **Index 2**  **FY 2011 Wage**  **Index Average**  **Hourly Wage**  **FY 2009 Average**  **Hourly Wage**  **FY 2010 Average**  **Hourly Wage**  **FY 2011 1**  **Average Hourly Wage**  ****** **(3 years)** 440217 *** * 31.6650 33.8684 33.5264 33.0112 440218 2.3018 0.9246 36.9273 31.7847 34.8600 34.3070 440222 *** * 30.5148 32.4230 33.4779 32.1341
440225 0.8351 0.7919 26.9687 29.8273 31.2189 29.5476 440226 1.8051 0.7919 28.3199 28.4491 31.2423 29.3511 440227 1.4445 0.9246 31.9119 32.1862 33.3005 32.4840 440228 1.5313 0.9137 29.5372 31.2049 32.7230 31.2589 450002 1.5584 0.8594 29.7180 30.0562 31.6279 30.4327 450005 1.2589 0.8456 27.3473 27.9825 28.6433 28.0242
450007 1.2745 0.9071 24.4630 26.2568 27.9008 26.2410 450008 1.3007 0.8775 24.4372 26.1215 28.5492 26.3295 450010 1.6966 0.9929 30.1034 32.9053 35.9573 32.9324 450011 1.6446 0.9244 29.9302 30.9903 32.9877 31.3013 450015 1.7472 0.9734 30.3168 30.3228 30.4911 30.3779 450018 1.7997 0.9946 31.3131 32.9922 35.5712 33.2965
450021 2.0024 0.9734 31.7360 34.5462 35.7307 34.0291 450023 1.3908 0.8038 25.1683 25.6361 27.9984 26.2980 450024 1.7757 0.8594 27.3814 27.8816 27.1925 27.4827 450028 1.6425 0.9486 29.5689 29.8049 34.0997 31.2123 450029 1.5534 0.8312 28.6465 27.2662 28.3780 28.0928 450031 *** * 29.2141 28.8891 34.0104 30.5763
450032 1.3782 0.8593 26.3159 25.7989 24.7722 25.5859 450033 1.6415 0.9486 29.7668 31.6557 32.7706 31.4322 450034 1.5659 0.8456 29.6309 28.2761 30.5057 29.4205 450035 1.7041 0.9946 30.3369 30.8574 * 30.5883 450037 1.5611 0.8593 28.2622 26.8661 31.6332 28.8487 450039 1.6804 0.9584 29.8145 29.5097 31.1550 30.1911
450040 1.7943 0.8940 28.5469 30.0844 31.7878 30.1162 450042 1.7837 0.8648 27.6131 28.3649 29.9591 28.7245 450044 1.7955 0.9734 32.9921 36.3786 36.8350 35.4324 450046 1.6799 0.8576 27.2439 28.4297 29.1115 28.2783 450047 *** * 24.9670 24.6290 * 24.8091 450051 2.0476 0.9734 30.3976 31.0740 32.5581 31.3450
450052 1.1232 0.8018 24.3964 25.8142 26.8780 25.6896 450054 1.8685 0.8775 30.2211 30.7196 31.8152 30.9786 450055 0.9581 0.8018 24.1418 24.6436 24.1331 24.3059 450056 1.7335 0.9523 32.0902 33.7634 35.1758 33.7275CMS-1498-P 897

**Provider Number Case-Mix**  **Index 2**  **FY 2011 Wage**  **Index Average**  **Hourly Wage**  **FY 2009 Average**  **Hourly Wage**  **FY 2010 Average**  **Hourly Wage**  **FY 2011 1**  **Average Hourly Wage**  ****** **(3 years)** 450058 1.6760 0.9071 27.7318 27.8963 29.3038 28.3582 450059 *** * 28.5645 29.9336 30.4251 29.6617 450064 1.6215 0.9584 29.0495 30.6704 31.2918 30.3637
450068 2.2983 0.9946 32.0372 34.9179 36.0902 34.3951 450072 1.2590 0.9946 28.0921 28.7063 30.1911 29.0674 450073 0.8084 0.8018 22.2322 23.1471 27.3607 24.1130 450076 1.7389 * * * * *
450078 0.9125 0.8018 20.7800 21.0876 22.8792 21.5781 450079 1.5567 0.9734 36.8936 34.1533 35.0924 35.3302
450080 1.2802 0.9584 26.8111 28.6334 28.2834 27.9102 450082 1.2045 0.8018 25.5654 27.1314 28.0686 26.8222 450083 1.8349 0.8259 30.2054 28.6628 27.8743 28.9055 450085 1.1963 0.8018 26.3610 28.1669 28.9441 27.8191 450087 1.5252 0.9584 32.6556 34.2493 35.5922 34.2084 450090 1.3411 0.8668 22.7822 22.2148 21.7004 22.2188
450092 1.4103 0.8312 28.2278 28.3891 30.5314 29.0936 450097 1.5643 0.9946 31.9782 33.8910 34.3604 33.4331 450099 1.3224 0.8434 29.8491 25.5799 25.4382 26.8735 450101 1.6811 0.8648 28.4220 29.3777 30.4843 29.3988 450102 1.7949 0.8259 27.3364 27.5145 28.5283 27.8122 450104 1.2249 0.9071 27.7851 30.4631 31.5834 29.9121
450107 1.7114 0.8594 29.0328 29.6790 31.5472 30.1274 450108 1.1643 0.9071 22.4293 21.7619 23.4651 22.5508 450119 1.6775 0.8888 34.4161 31.0699 34.4231 33.3604 450123 1.0012 0.8456 24.0433 27.6445 25.6415 25.8683 450124 1.8454 0.9523 31.9797 32.9774 34.3913 33.0155 450126 *** * 32.0370 32.9729 33.9635 33.0184
450128 1.3469 0.8888 28.3171 28.9733 25.6071 27.5150 450130 1.2316 0.9071 26.9208 28.3786 29.5020 28.2589 450132 1.6455 0.9426 31.1361 34.8719 33.2761 33.1083 450133 1.6806 0.9554 30.9622 31.3911 33.3058 31.9181 450135 1.7157 0.9584 30.7909 30.8734 32.1719 31.2968 450137 1.6678 0.9584 35.7775 33.8235 36.3832 35.3104
450143 1.0086 0.9523 24.4346 25.1702 26.2306 25.2759 450144 0.8810 0.9554 31.1552 31.4041 33.9298 32.1350 450147 1.4830 0.8576 26.3032 27.3607 28.1864 27.2675 450148 1.3368 0.9584 30.0542 29.9522 32.0315 30.7189CMS-1498-P 898

**Provider Number Case-Mix**  **Index 2**  **FY 2011 Wage**  **Index Average**  **Hourly Wage**  **FY 2009 Average**  **Hourly Wage**  **FY 2010 Average**  **Hourly Wage**  **FY 2011 1**  **Average Hourly Wage**  ****** **(3 years)** 450151 *** * 22.8768 * * 22.8768 450152 1.2507 0.8775 24.3442 25.7523 27.2981 25.8872 450154 1.3577 0.8018 24.2582 23.2210 26.8036 24.6426
450155 0.9518 0.8018 24.8773 25.2546 27.0261 25.7426 450162 1.1826 0.8940 33.7823 27.1453 27.1885 29.3979 450163 1.0821 0.8072 27.0967 27.6273 28.6735 27.8002 450165 1.1390 0.9071 30.2236 30.3796 31.6216 30.7510 450176 1.6011 0.8888 25.8587 28.4561 29.1369 27.9379 450177 1.1127 0.8018 26.0895 27.7791 28.5027 27.4708
450178 0.9348 0.9311 28.5990 27.5779 28.9534 28.3711 450184 1.7708 0.9946 30.9726 32.7090 34.0933 32.6058 450187 1.1680 0.9946 29.2749 29.3048 32.4972 30.4075 450188 0.9030 0.8018 24.6823 23.0844 23.5026 23.7701 450191 1.2449 0.9523 31.1339 30.0686 32.6122 31.2546 450192 1.0167 0.8289 26.9884 27.5539 29.0941 27.8974
450193 2.2410 0.9946 37.1906 38.2891 38.8688 38.1249 450194 1.2453 0.8231 30.4381 28.6816 28.5747 29.3155 450196 1.4787 0.8018 25.4842 29.8107 34.5610 29.7868 450200 1.5357 0.8018 27.9843 27.5112 27.4356 27.6508 450201 *** * 22.5464 * * 22.5464 450203 1.3080 0.9427 28.0986 29.4706 30.6946 29.4199
450209 1.8635 0.8574 31.9882 30.4150 32.0113 31.4497 450210 1.0230 0.8169 22.9055 23.7777 24.1082 23.5571 450211 1.4423 0.8593 28.8485 27.7427 28.6208 28.3857 450213 1.9743 0.9071 28.0307 29.2061 31.8766 29.7730 450214 1.2952 0.9946 28.2261 27.0761 29.7013 28.2460 450219 0.9672 0.8018 24.7274 28.0584 26.5426 26.4061
450221 1.0166 0.8018 20.7118 23.9462 26.0548 23.4307 450222 1.8038 0.9946 31.9255 33.2164 35.4314 33.5503 450224 1.3332 0.8259 28.7931 29.8428 34.2896 30.7490 450229 1.6776 0.8416 26.8039 27.2189 28.6814 27.5782 450231 1.7396 0.8574 27.0545 27.7289 29.0463 27.9560 450234 1.1803 0.8018 21.6799 23.2715 24.5744 23.0923
450235 0.9372 0.8018 23.8001 24.3335 26.5480 24.8876 450236 1.2391 0.8407 24.5942 24.1409 24.7381 24.4954 450237 1.6644 0.9071 31.2197 36.8412 38.6993 35.7648 450239 0.9838 0.8775 18.4234 19.1203 20.1484 19.2749CMS-1498-P 899

**Provider Number Case-Mix**  **Index 2**  **FY 2011 Wage**  **Index Average**  **Hourly Wage**  **FY 2009 Average**  **Hourly Wage**  **FY 2010 Average**  **Hourly Wage**  **FY 2011 1**  **Average Hourly Wage**  ****** **(3 years)** 450241 1.0529 0.8018 28.4948 24.3518 23.6473 25.3644 450243 1.0338 0.8018 19.0180 19.9804 19.3327 19.4422 450253 0.8658 0.9946 22.9918 24.3618 24.8454 24.0810
450270 1.2977 0.8289 12.9999 19.0341 23.1601 17.6868 450271 1.3816 0.9427 23.9534 27.4614 27.2326 26.3228 450272 1.2457 0.9523 29.0917 29.5124 30.9357 29.8687 450280 1.6447 0.9734 34.9349 33.8297 36.7763 35.1896 450283 1.1064 0.9584 28.2094 24.3428 26.0914 26.1061 450289 1.5582 0.9946 32.6137 32.4591 33.0717 32.7210
450292 1.2182 0.9734 29.0243 29.2485 29.9357 29.4213 450293 0.7961 0.8018 24.1556 23.7577 24.0607 23.9932 450296 1.0761 0.9946 33.4545 34.1708 36.4604 34.6820 450299 1.6942 0.9244 29.4593 30.3493 31.1239 30.4022 450306 0.8749 0.8416 22.6818 25.9877 26.8169 25.0749 450315 2.1271 0.9734 31.4227 32.3840 33.7842 32.7212
450324 1.6326 0.9584 27.9899 26.8023 29.4539 28.0902 450330 1.3508 0.9946 27.7419 29.4471 30.3251 29.1461 450340 1.4176 0.8479 29.6617 28.7672 30.5815 29.6840 450346 1.5986 0.8456 24.8434 26.7809 28.3085 26.7155 450347 1.2930 0.9946 28.5789 30.0644 39.0879 31.7620 450348 0.8857 0.8018 22.6828 23.1190 24.9786 23.5721
450351 1.1747 0.9427 29.9598 30.3441 31.5335 30.6264 450352 1.1455 0.9734 27.6480 29.3516 30.7631 29.2850 450358 2.1150 0.9946 33.9103 36.9859 37.7186 36.2668 450369 0.8990 0.8018 24.1953 22.7433 26.2247 24.2072 450370 1.1848 0.9946 29.0816 28.8348 29.9689 29.2856 450372 1.3896 0.9734 30.9345 33.7023 35.7078 33.4644
450373 0.8488 0.8018 27.4251 25.3691 24.2932 25.7191 450378 *** * 33.0583 33.9891 36.4075 34.4205 450379 1.4175 0.9734 35.0637 35.9067 32.6271 34.4741 450388 1.7639 0.9071 29.5386 30.3720 31.6070 30.5182 450389 1.2142 0.9584 26.8499 24.6733 25.7364 25.7517 450393 *** * 39.0266 12.9286 27.1107 24.0530
450395 1.1582 0.8459 28.4272 27.2714 29.8846 28.5726 450399 0.8847 0.8018 20.6307 23.2716 22.6787 22.2015 450400 1.0362 0.9244 29.5020 29.8965 30.9996 30.1497 450403 1.5366 0.9734 31.7065 33.1710 35.4782 33.5113CMS-1498-P 900

**Provider Number Case-Mix**  **Index 2**  **FY 2011 Wage**  **Index Average**  **Hourly Wage**  **FY 2009 Average**  **Hourly Wage**  **FY 2010 Average**  **Hourly Wage**  **FY 2011 1**  **Average Hourly Wage**  ****** **(3 years)** 450411 1.0111 0.8018 21.7877 20.9108 22.4110 21.7020 450419 1.3410 0.9584 34.9972 33.6834 34.9747 34.5445 450422 1.2762 0.9734 32.4669 36.7309 34.1134 34.3580
450424 1.5450 0.9946 29.8290 32.4674 34.5569 32.3014 450431 1.7403 0.9523 28.5289 29.6446 30.6654 29.6328 450438 1.3139 0.9946 27.7734 25.1006 25.4692 26.1366 450446 0.8334 0.9946 15.4641 12.4405 15.5216 14.4421 450447 1.1936 0.9584 28.3724 29.9936 31.8935 29.9931 450451 1.0730 0.8554 25.8836 26.5422 31.4824 27.8675
450460 0.8984 0.8071 25.2165 27.6224 25.4765 26.1120 450462 1.7382 0.9734 30.6516 31.7311 33.7989 32.0439 450465 1.2421 0.9946 28.1853 28.0105 30.1955 28.8001 450469 1.5261 0.9584 31.1348 29.2172 29.6203 29.9824 450475 1.1705 0.8593 24.7037 25.0642 25.7533 25.1909 450484 1.5134 0.8593 27.7792 29.4306 31.9711 29.7496
450488 1.1850 0.8593 24.9109 26.6089 19.2414 24.1030 450489 1.0148 0.8018 26.9543 25.3695 27.9844 26.7321 450497 1.0021 0.8393 23.0712 24.6056 25.5912 24.4315 450498 0.9124 0.8018 20.6873 19.3077 20.7519 20.2120 450508 1.4192 0.8593 29.1519 30.4829 31.5816 30.4268 450514 *** * 26.4196 * * 26.4196
450518 1.4458 0.8456 27.5880 28.9969 30.5901 29.0765 450530 1.3988 0.9946 30.7745 31.5033 33.7675 32.0278 450537 1.6268 0.9734 30.9167 33.1500 33.2793 32.4461 450539 1.2570 0.8085 25.0191 25.5268 27.9134 26.1684 450547 0.9127 0.9584 25.4140 24.6575 25.2773 25.1206 450558 1.7520 0.8416 28.7747 30.9433 32.3359 30.6894
450563 1.5978 0.9584 32.6875 35.8856 35.5273 34.6996 450565 1.3413 0.9427 27.4774 28.0400 20.2604 24.6775 450571 1.6736 0.8479 26.5313 26.2046 29.0276 27.1996 450573 1.0624 0.8144 24.6750 28.8508 27.5686 27.0771 450578 0.9388 0.8018 25.2478 25.7938 24.6928 25.2301 450580 0.9863 0.8018 25.9881 23.7932 24.3360 24.7329
450584 1.0404 0.8018 23.6044 23.7329 23.9279 23.7525 450586 1.0322 0.8018 18.3289 19.8656 21.2418 19.8421 450587 1.1286 0.8018 25.9364 27.1505 29.0095 27.3368 450591 1.2132 0.9946 27.9867 26.8802 27.3228 27.3932CMS-1498-P 901

**Provider Number Case-Mix**  **Index 2**  **FY 2011 Wage**  **Index Average**  **Hourly Wage**  **FY 2009 Average**  **Hourly Wage**  **FY 2010 Average**  **Hourly Wage**  **FY 2011 1**  **Average Hourly Wage**  ****** **(3 years)** 450596 1.3215 0.9427 31.6590 30.9701 32.6451 31.7682 450597 0.9543 0.8021 24.8443 26.3300 28.5346 26.5850 450604 1.5282 0.9071 29.1543 27.9983 29.6711 28.9317
450605 1.0389 0.8576 14.8039 23.3169 25.9294 19.8604 450610 1.6708 0.9946 30.5977 32.1314 33.4177 32.0231 450615 0.9227 0.8018 22.6331 25.1269 24.9073 24.2185 450617 1.6748 0.9946 30.2923 31.5691 32.8524 31.6194 450620 0.8835 0.8018 21.2535 21.7871 21.8114 21.6178 450630 1.5995 0.9946 31.8014 32.3195 33.9731 32.6640
450634 1.6926 0.9734 31.8008 31.9667 35.0494 32.9472 450638 1.7216 0.9946 33.3237 34.1802 33.8596 33.7803 450639 1.5533 0.9584 34.3754 33.3962 35.2238 34.3245 450641 0.9255 0.8393 21.7292 20.0231 21.9208 21.2237 450643 1.4481 0.8312 27.2538 28.7747 28.9744 28.3464 450644 1.6896 0.9946 31.6874 33.5265 34.8463 33.3746
450646 1.6538 0.8594 27.4631 27.8352 29.9319 28.4242 450647 1.9676 0.9734 34.1016 35.2696 36.5367 35.3425 450651 1.6423 0.9734 33.6498 34.9917 35.6621 34.7071 450653 1.1352 0.8018 26.5361 27.8569 30.2644 28.1938 450654 0.9530 0.8018 25.0755 23.5856 24.5622 24.3772 450656 1.4433 0.8593 29.7290 30.0651 32.2787 30.6407
450658 1.0226 0.8018 22.7090 21.8183 23.5451 22.6654 450659 1.6318 0.9946 34.2657 35.0007 37.4041 35.4287 450661 1.6239 0.9426 29.2381 29.1701 32.8505 30.5685 450662 1.7067 0.9486 30.9630 32.8936 34.5875 32.8475 450668 1.5975 0.8594 30.2083 30.7673 32.0366 30.9613 450669 1.2140 0.9734 32.1244 32.6777 35.4345 33.3993
450670 1.6341 0.9946 26.2954 28.8285 30.3037 28.5168 450672 1.8489 0.9584 33.0858 34.5171 35.3309 34.3346 450674 0.9275 0.9946 31.9316 33.4719 34.3708 33.2937 450675 1.5462 0.9584 32.6380 34.4049 35.3618 34.1567 450677 1.3956 0.9584 27.1603 29.5819 31.0723 29.3313 450678 1.6140 0.9734 33.5513 33.6167 35.4020 34.2062
450683 1.2254 0.9734 24.8440 28.7984 29.3788 27.6756 450684 1.5209 0.9946 31.2765 31.8794 35.0768 32.7040 450686 1.7733 0.8940 26.4871 28.8211 30.3945 28.6469 450688 1.5690 0.9734 29.4393 30.4156 39.5212 33.4935CMS-1498-P 902

**Provider Number Case-Mix**  **Index 2**  **FY 2011 Wage**  **Index Average**  **Hourly Wage**  **FY 2009 Average**  **Hourly Wage**  **FY 2010 Average**  **Hourly Wage**  **FY 2011 1**  **Average Hourly Wage**  ****** **(3 years)** 450690 1.4264 0.8259 30.0577 31.8607 33.2142 31.5431 450694 1.1250 0.8018 27.0862 28.3456 29.6365 28.3309 450697 1.6210 0.9071 28.3002 29.0148 30.4461 29.3085
450698 0.9036 0.8145 23.3062 21.5450 22.3625 22.2982 450702 1.6646 0.8593 27.1318 26.9753 30.2610 28.1063 450709 1.5374 0.9946 31.3239 31.0331 32.2101 31.5528 450711 1.6479 0.8888 28.1040 29.2934 31.1833 29.5133 450713 1.7474 0.9523 30.4933 31.3274 32.4793 31.4789 450715 *** * * 27.0982 * 27.0982
450716 1.4846 0.9946 33.9926 33.4960 35.7265 34.4031 450718 1.6829 0.9523 29.7609 30.6623 32.6777 31.1373 450723 1.5586 0.9734 31.0481 32.1316 32.6655 31.9568 450730 1.5137 0.9734 32.8920 34.9137 33.1903 33.6228 450742 1.2662 0.9734 30.4204 31.4270 33.0463 31.6358 450743 1.4816 0.9734 29.5098 30.3302 31.3249 30.4344
450746 1.1292 0.8018 23.3484 22.7535 25.0694 23.7092 450747 1.2515 0.8259 28.3935 27.1975 28.8858 28.1491 450749 0.9107 0.8018 23.9269 23.0265 23.2733 23.4142 450754 0.9768 0.8018 22.8572 23.4607 24.3117 23.5585 450755 1.0767 0.8294 24.7428 22.4195 31.3204 25.7528 450758 *** * 28.3305 29.5013 28.2010 28.6514
450760 *** * 23.7157 24.0691 25.7775 24.3542 450766 1.9556 0.9734 31.2084 33.3435 35.1683 33.2474 450770 1.3684 0.9523 23.6093 25.5863 18.0459 22.2518 450771 1.6045 0.9734 32.5014 32.6206 33.7565 32.9584 450774 1.6654 0.9946 27.5065 29.1151 * 28.3542 450775 1.5260 0.9946 31.6656 33.1582 34.3654 33.1091
450779 1.4365 0.9584 32.0770 31.4350 31.9592 31.8179 450780 2.1639 0.9071 28.5560 29.4960 31.6556 29.8709 450788 1.6154 0.8576 29.7667 31.5593 32.7687 31.3701 450795 1.1190 0.9946 43.8574 31.1871 28.4802 34.7233 450796 2.6228 0.8574 39.4762 31.6590 33.6154 34.7499 450797 1.7663 0.9946 26.0302 29.7074 31.7739 29.3070
450801 1.6105 0.8018 25.6379 27.2635 26.6634 26.5192 450803 1.3194 0.9946 28.7041 28.4345 33.0146 29.9070 450804 2.0163 0.9946 31.1891 33.2767 34.1951 32.9236 450808 2.3057 0.9523 29.6476 27.4132 29.9055 29.0173CMS-1498-P 903

**Provider Number Case-Mix**  **Index 2**  **FY 2011 Wage**  **Index Average**  **Hourly Wage**  **FY 2009 Average**  **Hourly Wage**  **FY 2010 Average**  **Hourly Wage**  **FY 2011 1**  **Average Hourly Wage**  ****** **(3 years)** 450809 1.7258 0.9523 29.4696 30.4031 31.4588 30.4836 450811 *** * 31.3007 32.5513 31.9859 31.9444 450813 1.1372 0.8144 26.5803 24.0804 20.6715 23.5616
450820 1.7477 0.9946 34.7445 36.4796 38.2108 36.6079 450822 1.3504 0.9734 34.4060 34.7760 36.6675 35.3212 450824 2.6197 0.9523 31.8413 34.8301 39.0190 35.1987 450825 1.6530 0.8888 25.8006 23.6674 24.3308 24.5730 450827 1.4304 0.9929 24.3659 23.6628 23.9496 23.9877 450828 1.3734 0.8018 26.9553 26.3231 28.2632 27.1681
450830 0.9681 * 28.4007 * * 28.4007 450831 1.7089 0.9946 24.4141 24.2732 29.1549 25.8378 450832 1.5453 0.9946 28.1389 31.2830 32.4824 30.7550 450833 1.1420 0.9734 29.0256 30.3604 32.5010 30.7618 450834 1.7933 0.9244 26.7253 28.1564 29.1031 27.9224 450838 *** * 19.2949 20.3039 19.0487 19.5634
450839 1.0081 0.8018 27.5330 28.0060 28.5894 28.0255 450840 1.2748 0.9734 32.4162 34.1412 35.8725 34.2963 450841 1.6187 0.9486 24.4389 24.6321 23.9682 24.3370 450844 1.4764 0.9946 33.0758 34.7070 36.5371 34.8354 450845 1.8367 0.8594 28.5039 30.9556 31.2402 30.2207 450847 1.3939 0.9946 30.7431 31.6028 32.1869 31.6098
450848 1.4727 0.9946 31.1476 32.0471 33.4153 32.3022 450850 *** * 27.2653 * * 27.2653 450851 2.0867 0.9734 32.8377 35.2085 38.8802 35.5622 450853 2.0083 0.9734 38.3600 37.5237 36.5101 37.2120 450855 1.8608 0.9486 30.7353 33.0196 32.9107 32.1835 450856 2.5479 0.9071 35.5006 35.5221 33.9274 34.9300
450860 1.8566 0.9946 33.3404 36.0060 39.5352 36.4526 450862 1.8415 0.9946 33.7962 34.2163 35.3982 34.5218 450864 2.6098 0.8259 25.3535 26.6579 27.1210 26.4353 450865 1.1060 0.9523 31.9200 34.6338 35.8513 34.1920 450867 1.2922 0.9523 31.4953 33.8712 34.7654 33.3974 450868 *** * 27.7501 28.4524 30.9119 29.0597
450869 1.9926 0.8888 28.7422 27.9532 33.2135 30.1400 450871 1.9451 0.9523 32.3990 35.2470 37.9738 35.1792 450872 1.3983 0.9584 31.7345 30.7510 30.9726 31.1239 450874 1.8676 0.9734 35.6839 37.4432 36.9974 36.7518CMS-1498-P 904

**Provider Number Case-Mix**  **Index 2**  **FY 2011 Wage**  **Index Average**  **Hourly Wage**  **FY 2009 Average**  **Hourly Wage**  **FY 2010 Average**  **Hourly Wage**  **FY 2011 1**  **Average Hourly Wage**  ****** **(3 years)** 450875 1.9516 0.8574 23.2962 26.9904 20.1676 22.8117 450876 1.7122 0.8940 30.3515 30.7721 30.9806 30.7060 450877 1.5299 0.8594 29.2353 28.0504 28.0186 28.4103
450878 2.5973 0.9071 33.6269 33.5225 36.1310 34.4610 450879 *** * 36.4874 31.1510 33.9546 33.6692 450880 1.9228 0.9584 32.6713 32.1245 34.4319 33.1600 450883 1.9373 0.9734 37.1525 38.5954 37.3049 37.6847 450884 1.0402 0.8642 23.5799 25.0230 25.7645 24.7956 450885 1.5264 0.9734 36.0954 33.7612 36.0679 35.3127
450886 2.1922 0.9584 30.1571 33.2011 34.2513 32.5780 450887 *** * 25.5590 * * 25.5590 450888 1.9205 0.9451 28.5995 26.3027 33.6718 29.5947 450889 1.3218 0.9734 35.6151 29.1149 37.7768 33.7885 450890 1.6403 0.9734 32.2000 33.9068 30.5718 32.1704 450891 1.8038 0.9734 39.0890 29.7832 28.6689 31.5429
450892 *** * 39.5333 * * 39.5333 450893 1.6541 0.9734 36.2660 37.8279 38.4890 37.6102 450894 2.5125 0.9734 25.9441 34.3388 30.1201 30.2587 460001 2.0520 0.9273 30.7040 32.3262 33.1209 32.1021 460003 1.6576 0.9362 29.6450 31.8128 33.2304 31.5395 460004 1.8788 0.9362 29.8773 32.2759 33.1810 31.8222
460005 1.5680 0.9362 29.4188 29.6947 32.5526 30.5747 460006 1.7333 0.9362 28.9653 30.3798 31.5156 30.3358 460007 1.3358 0.9311 29.1191 30.8583 31.3963 30.5244 460008 *** * 27.6906 30.5351 31.2708 29.8198 460009 2.0509 0.9362 29.4705 31.5120 32.4915 31.2060 460010 2.0371 0.9362 30.9813 32.8157 33.5686 32.4990
460011 1.3290 0.8714 26.5486 27.0189 29.7484 27.7675 460013 1.5423 0.9273 29.7252 31.2945 33.2639 31.4115 460014 1.1697 0.9362 30.6450 30.0229 31.5876 30.7603 460015 1.4935 0.8843 28.8014 30.7369 31.4843 30.3806 460017 1.3823 0.9097 28.7126 29.8556 32.9922 30.5250 460018 1.0014 * 22.0935 24.7761 * 23.4535
460019 1.1788 0.8714 25.1615 24.9579 29.0338 26.4222 460021 1.9540 0.9311 29.7397 31.5207 32.5066 31.3092 460023 1.4134 0.9273 28.9473 30.5888 31.3338 30.3465 460026 0.9596 0.9272 29.2775 31.3552 32.2647 30.9963CMS-1498-P 905

**Provider Number Case-Mix**  **Index 2**  **FY 2011 Wage**  **Index Average**  **Hourly Wage**  **FY 2009 Average**  **Hourly Wage**  **FY 2010 Average**  **Hourly Wage**  **FY 2011 1**  **Average Hourly Wage**  ****** **(3 years)** 460030 1.1661 0.8714 26.8979 30.0714 29.9269 28.9836 460033 0.9059 0.8714 27.9108 29.0346 30.0615 29.0242 460035 0.9434 0.8714 23.8682 23.4736 25.1957 24.1858
460039 1.1592 0.9354 30.0677 32.8010 35.0008 32.6853 460041 1.4984 0.9362 26.7356 29.4568 30.8887 29.0180 460042 1.5807 0.9362 36.2903 35.5686 32.3029 34.4949 460043 0.8631 0.9273 29.5660 31.2717 32.7481 31.2613 460044 1.4132 0.9362 29.5079 31.4469 32.6644 31.2589 460047 1.7647 0.9362 31.0020 33.0291 35.1263 33.0272
460049 2.1169 0.9362 28.6267 32.0329 32.9633 31.2669 460051 1.5507 0.9362 28.1140 28.6559 29.4759 28.9591 460052 1.7033 0.9273 28.7455 30.2613 31.8515 30.3626 460054 1.5710 0.8843 26.3939 28.1478 28.0120 27.5238 460055 *** * * * 23.1431 23.1431 460056 0.8224 0.8714 * * * *
470001 1.3548 1.0071 32.2887 34.5891 33.5241 33.3804 470003 1.7940 1.0340 30.0535 35.8753 36.7362 34.6784 470005 1.3682 0.9465 33.9969 32.1087 32.9379 33.0059 470011 1.2239 0.9465 30.8742 32.1668 33.3394 32.1525 470012 1.2953 1.0158 29.8259 30.9839 32.7025 31.2202 470024 1.3785 1.0340 27.3106 28.9203 29.2657 28.4919
490001 1.1846 0.8060 24.6883 25.2705 26.8850 25.6328 490002 0.9564 0.8063 24.0672 26.2533 27.6367 26.0235 490004 1.4283 0.9243 28.8660 30.6657 32.4538 30.6807 490005 1.7029 1.0559 31.4909 32.7159 34.9053 33.0668 490007 2.0623 0.8953 30.7411 31.5954 32.4614 31.6048 490009 2.0440 0.9243 31.4260 30.5748 31.9496 31.3136
490011 1.7060 0.8953 28.8780 30.5522 31.9508 30.4122 490012 1.1797 0.8060 21.8322 22.3339 24.4301 22.9678 490013 1.3615 0.9661 27.3486 27.4108 28.5324 27.7697 490017 1.6019 0.8953 29.6784 29.5853 30.9047 30.0811 490018 1.3937 0.9243 27.8682 28.8491 29.5589 28.7713 490019 1.3345 0.9243 29.8891 33.5636 33.7765 32.4062
490020 1.3546 0.9536 30.6013 32.5621 33.3461 32.1198 490021 1.4713 0.8527 28.1254 28.1343 30.0869 28.7596 490022 1.5783 1.0559 31.7985 34.5366 33.3639 33.2694 490023 1.4038 1.0559 32.6308 33.4561 35.6316 33.9527CMS-1498-P 906

**Provider Number Case-Mix**  **Index 2**  **FY 2011 Wage**  **Index Average**  **Hourly Wage**  **FY 2009 Average**  **Hourly Wage**  **FY 2010 Average**  **Hourly Wage**  **FY 2011 1**  **Average Hourly Wage**  ****** **(3 years)** 490024 1.7367 0.9020 29.0407 29.9188 31.4854 30.2069 490027 1.4257 0.8060 24.3834 23.6876 25.1699 24.4425 490032 2.0641 0.9536 28.0120 30.0331 32.8661 30.3741
490033 1.2418 1.0559 30.9910 32.1854 35.3543 32.8355 490037 1.1921 0.8060 26.2951 28.9020 27.7807 27.6377 490038 1.1365 0.8063 24.0852 25.7219 26.5823 25.5525 490040 1.6870 1.0559 35.6822 36.5546 38.2247 36.8591 490041 1.7419 0.8953 29.1244 30.4198 31.6506 30.4422 490042 1.3852 0.8864 26.6078 28.1989 28.6351 27.8261
490043 1.4528 1.0571 36.5982 33.4364 35.4380 35.1246 490044 1.5021 0.8953 24.1763 30.3606 31.1639 28.6723 490045 1.4362 1.0559 32.8774 34.0289 33.2301 33.3822 490046 1.5611 0.8953 29.3882 30.5445 32.0244 30.6581 490048 1.5181 0.9020 28.0320 29.1952 32.3457 29.8101 490050 1.6932 1.0559 31.1370 33.3979 35.3441 33.2738
490052 1.7570 0.8953 25.4179 26.5858 27.5800 26.5238 490053 1.2123 0.8060 24.6206 25.5300 27.6516 26.0148 490057 1.6341 0.8953 29.0700 30.5163 31.4342 30.3581 490059 1.7476 0.9536 32.1031 32.7894 33.7315 32.8906 490060 1.0988 0.8060 25.7765 26.2620 26.8764 26.2885 490063 1.9288 1.0571 34.1179 35.7722 36.5676 35.5145
490066 1.3993 0.9536 31.4298 31.1949 32.8018 31.8232 490067 1.3116 0.9536 26.7802 27.5172 28.6635 27.6322 490069 1.7572 0.9536 30.1482 33.1140 33.7580 32.4106 490071 *** * 33.7118 36.1311 37.5474 35.7436 490073 *** * 46.4210 * * 46.4210 490075 1.4728 0.8168 27.3424 27.8663 28.5221 27.8788
490077 1.4245 0.9243 31.0016 33.5266 33.9868 32.8758 490079 1.2258 0.8973 24.2066 25.3814 26.8381 25.4605 490084 1.1514 0.8247 26.3234 28.0861 29.2001 27.8967 490088 1.0343 0.8527 26.0285 26.5138 27.3105 26.6200 490089 1.0904 0.9020 27.4587 28.7200 28.6746 28.3003 490090 1.1170 0.8060 27.0760 28.1280 30.1159 28.4491
490092 1.0905 0.8060 27.5277 26.9546 27.9480 27.4786 490093 1.5805 0.8953 28.7122 29.2159 30.8707 29.6194 490094 1.0446 0.9536 29.7990 33.4960 35.2427 32.9163 490097 1.1213 0.8060 27.4608 27.3832 30.3702 28.3815CMS-1498-P 907

**Provider Number Case-Mix**  **Index 2**  **FY 2011 Wage**  **Index Average**  **Hourly Wage**  **FY 2009 Average**  **Hourly Wage**  **FY 2010 Average**  **Hourly Wage**  **FY 2011 1**  **Average Hourly Wage**  ****** **(3 years)** 490098 1.2490 0.8060 26.7152 29.1195 30.2724 28.7604 490101 1.5529 1.0571 32.9516 36.2501 37.1100 35.5137 490104 0.8635 0.9536 19.0056 21.5140 25.4797 21.5647
490105 0.7752 0.8063 * * * *
490106 0.7217 * 26.2318 28.0073 29.6648 27.8955 490107 1.5612 1.0571 35.0272 36.5156 37.8948 36.4952 490108 0.9350 0.8527 27.8717 26.8474 28.1422 27.6252 490109 0.8360 0.8953 21.6711 26.3100 35.3956 26.6243 490110 1.4981 0.8478 26.3089 28.6114 30.4140 28.4403
490111 1.3002 0.8060 26.4297 25.9801 25.5933 26.0180 490112 1.8616 0.9536 31.2549 32.6940 34.4483 32.7850 490113 1.3453 1.0559 34.7841 34.3609 35.7020 34.9658 490114 1.2877 0.8060 23.0533 23.6217 24.3756 23.7176 490115 1.1261 0.8060 23.2118 24.2056 24.5732 24.0079 490116 1.1200 0.8060 25.0351 26.8981 27.6062 26.5245
490117 1.1400 0.8060 20.3038 19.0627 21.2554 20.2023 490118 1.7126 0.9536 31.2407 32.7697 34.4087 32.7699 490119 1.3791 0.8953 29.5222 30.2401 31.8001 30.5988 490120 1.5447 0.8953 27.1990 29.8199 31.3588 29.5073 490122 1.6804 1.0571 35.2234 36.8356 37.2409 36.4506 490123 1.1733 0.8060 24.6011 25.9018 26.5759 25.6908
490126 1.2835 0.8060 25.3294 26.4277 28.1112 26.5960 490127 1.1572 0.8060 23.1399 23.5161 25.8521 24.1618 490130 1.3539 0.8953 25.9782 27.8912 28.5506 27.5060 490134 0.8484 0.8060 31.1495 36.6290 38.4799 35.3431 490135 0.8329 0.9020 27.2795 29.4817 30.6983 29.1252 490136 1.5986 0.9536 31.2911 33.2256 33.6199 32.9138
490137 *** * * 33.7203 * 33.7203 490138 *** * * * 29.6062 29.6062 490140 1.1707 1.0559 * * * *
500001 1.6920 1.1393 37.5323 34.4057 36.7516 36.1864 500002 1.4064 1.0107 30.1872 32.8317 34.4481 32.6052 500003 1.3883 1.1272 32.7983 34.5869 35.4284 34.3657
500005 1.9139 1.1393 36.0918 36.7598 34.3832 35.6947 500007 1.3046 1.1272 31.0313 32.8189 34.5520 32.8250 500008 2.0942 1.1393 34.7810 37.6578 39.2151 37.2339 500011 1.5112 1.1393 38.3979 35.9571 39.3411 37.8813CMS-1498-P 908

**Provider Number Case-Mix**  **Index 2**  **FY 2011 Wage**  **Index Average**  **Hourly Wage**  **FY 2009 Average**  **Hourly Wage**  **FY 2010 Average**  **Hourly Wage**  **FY 2011 1**  **Average Hourly Wage**  ****** **(3 years)** 500012 1.6682 1.0107 33.1685 34.1650 36.8979 34.8623 500014 1.7774 1.1393 37.2698 36.3915 39.1505 37.5950 500015 1.4145 1.1393 40.8683 41.8914 37.7765 39.9793
500016 1.7006 1.1272 34.2828 35.1946 36.9961 35.5244 500019 1.2954 1.0238 33.8882 33.3151 33.7113 33.6367 500021 1.2735 1.1272 33.5610 34.1696 35.5039 34.4442 500024 1.6970 1.1080 37.4529 38.1144 38.4388 38.0019 500025 2.0660 1.1393 44.7105 45.7929 46.4667 45.6979 500026 1.5246 1.1393 35.5080 38.9294 39.8935 38.0803
500027 1.5514 1.1393 42.4974 43.3521 46.0534 43.9702 500030 1.6107 1.1302 36.9489 37.8938 39.5003 38.1941 500031 1.3816 1.1015 34.1651 37.1418 39.3882 37.0143 500033 1.3025 1.0107 32.6753 33.5611 34.6180 33.6561 500036 1.3062 1.0107 31.9164 33.0937 34.4581 33.2430 500037 1.0522 1.0107 29.1773 31.5221 33.5698 31.4598
500039 1.6290 1.1272 34.5739 35.7525 36.9804 35.8188 500041 1.4539 1.1212 36.9273 37.1754 37.2841 37.1483 500044 1.8709 1.0588 32.0743 32.9066 37.2547 34.2357 500049 1.3589 1.0107 30.8135 32.9904 35.3710 33.0668 500050 1.6841 1.1212 35.7254 35.8576 38.7771 36.8297 500051 1.7983 1.1393 36.4764 38.1805 40.4444 38.4149
500052 0.5257 1.1393 * * * *
500053 1.2927 1.0107 28.5664 35.5776 32.3889 32.3866 500054 2.0439 1.0588 34.8114 36.0163 37.0037 35.9970 500058 1.7819 1.0107 32.6843 33.9116 35.3683 34.0086 500060 1.3839 1.1393 40.3040 33.4139 36.1561 36.3222 500064 2.1038 1.1393 34.7925 36.5889 38.6388 36.7061
500072 1.2795 1.0399 33.1148 33.7689 34.6614 33.8664 500077 1.6554 1.0588 34.3114 35.6352 36.5941 35.5623 500079 1.4615 1.1272 34.2420 35.0285 39.6971 36.2958 500084 1.2299 1.1393 33.3072 35.9603 37.4223 35.5895 500088 1.5216 1.1393 38.5194 39.5328 42.2213 40.1754 500108 1.7135 1.1272 35.8918 36.9874 38.4486 37.1566
500119 1.3965 1.0588 31.7125 33.2862 37.1560 34.2985 500124 1.5615 1.1393 36.3338 36.2555 38.4951 37.0807 500129 1.7301 1.1272 37.3189 39.0479 40.9416 39.1501 500134 *** * 28.9759 27.6000 * 28.2473CMS-1498-P 909

**Provider Number Case-Mix**  **Index 2**  **FY 2011 Wage**  **Index Average**  **Hourly Wage**  **FY 2009 Average**  **Hourly Wage**  **FY 2010 Average**  **Hourly Wage**  **FY 2011 1**  **Average Hourly Wage**  ****** **(3 years)** 500139 1.5940 1.1080 37.5709 37.3065 40.1626 38.3039 500141 1.3018 1.1393 34.2384 35.0996 36.5770 35.3417 500143 0.8345 1.1080 26.3893 27.6976 27.0786 27.0516
500148 1.2582 1.0107 24.6347 29.1435 29.3580 27.8028 500150 1.3469 1.1212 34.8480 37.1238 39.5124 37.2763 500151 1.2724 1.1264 * * * *
510001 1.9015 0.8266 26.7924 27.6648 28.5579 27.6991 510002 1.3699 0.8820 24.8846 25.3769 26.9879 25.7394 510006 1.3756 0.8266 26.6421 27.5033 28.3986 27.5167
510007 1.7093 0.8875 28.5783 29.7125 31.3109 29.8649 510008 1.4922 0.9455 27.4709 30.6397 31.5292 29.9314 510012 0.9949 0.7660 22.9038 23.9222 23.9062 23.5707 510013 1.1575 0.7536 22.9612 22.1864 22.8779 22.6690 510018 1.1130 0.8093 23.7736 22.6582 24.2196 23.5313 510022 1.8567 0.8093 27.6119 28.4911 28.9389 28.3550
510023 1.1934 0.7536 23.1461 21.1483 23.2098 22.4635 510024 1.6521 0.8266 31.1327 32.3022 29.9740 31.1328 510026 1.0087 * 17.8275 18.6662 * 18.2486 510029 1.4261 0.8093 25.3925 24.6743 25.6860 25.2487 510030 1.1745 0.7536 25.5600 26.0174 26.6707 26.0891 510031 1.6207 0.8093 26.7872 29.5993 29.4024 28.5765
510033 1.5597 0.7536 24.2839 24.4150 24.9115 24.5148 510038 1.1536 0.7536 21.7545 21.1103 22.4112 21.7748 510039 1.3776 0.7536 21.3819 21.7158 22.0335 21.7116 510046 1.4481 0.8020 24.7187 23.2634 24.7177 24.2383 510047 1.2916 0.8266 28.8794 30.0461 31.1243 30.0454 510048 1.3054 0.7536 23.6396 25.0987 26.5418 25.1357
510050 1.8089 0.8441 23.5794 24.3081 24.5207 24.1225 510053 1.0042 0.7536 22.6288 24.3853 25.0147 24.0222 510055 1.6973 0.8875 30.7382 32.3284 33.3163 32.1773 510058 1.3980 0.7536 24.8770 24.9360 23.8781 24.5564 510059 *** * 21.9053 20.5651 23.5300 22.1135 510062 1.2221 0.8093 27.7971 30.4515 32.4834 30.2773
510067 *** * 25.2248 25.4499 * 25.3238 510070 1.3121 0.8093 25.4981 26.1227 28.1871 26.6091 510071 1.3504 0.7746 23.4553 21.7085 23.4390 22.8860 510072 1.0600 0.7536 20.2387 20.1981 21.4895 20.6336CMS-1498-P 910

**Provider Number Case-Mix**  **Index 2**  **FY 2011 Wage**  **Index Average**  **Hourly Wage**  **FY 2009 Average**  **Hourly Wage**  **FY 2010 Average**  **Hourly Wage**  **FY 2011 1**  **Average Hourly Wage**  ****** **(3 years)** 510077 1.0537 0.8723 27.1611 24.7849 27.0319 26.3370 510082 1.2339 0.7536 21.1665 24.7558 22.7658 22.9281 510085 1.4818 0.8093 26.8133 27.6206 24.4240 26.3575
510086 1.1482 0.7536 20.1965 21.2628 20.3576 20.5850 510090 *** * 39.0787 * * 39.0787 520002 1.3482 0.9113 28.3413 28.2765 26.7116 27.7254 520004 1.4996 0.9864 30.9212 32.9848 34.1865 32.6654 520008 1.6075 1.0226 33.6774 36.6697 38.2815 36.3308 520009 1.8579 0.9375 29.6290 31.0683 31.6106 30.8052
520011 1.3433 0.9019 29.5024 31.8421 33.2873 31.5935 520013 1.6336 1.1027 32.1721 33.9209 34.9944 33.6882 520017 1.2107 0.9600 31.0537 31.8512 33.6624 32.2031 520019 1.2522 0.9019 30.2189 28.8256 25.1409 27.9904 520021 1.3391 1.0370 29.7809 29.0525 30.3673 29.7460 520027 1.4301 1.0226 33.5836 33.5264 35.9033 34.3676
520028 1.3940 1.1096 29.4694 28.1055 30.4362 29.3795 520030 1.7246 0.9581 31.6807 32.0646 34.2167 32.6070 520033 1.3879 0.9019 30.2631 29.5690 31.1389 30.3366 520034 1.3078 0.9019 28.1819 30.4913 31.6386 30.1603 520035 1.5330 0.9375 29.4076 31.0972 32.7626 31.1082 520037 1.7279 0.9113 32.2206 33.1606 33.0449 32.8212
520038 1.2914 1.0226 30.5267 32.6502 32.9167 32.0875 520040 *** * 35.9652 * * 35.9652 520041 1.0128 1.1316 26.1586 28.3889 30.2068 28.2350 520044 1.5130 0.9375 28.6620 * 31.9599 30.2726 520045 1.7890 0.9536 30.0856 29.6250 33.3652 30.9444 520048 1.6586 0.9536 30.1483 31.8604 33.1944 31.7313
520049 1.9727 0.9443 29.4238 29.8707 30.8224 30.0316 520051 1.5852 1.0226 32.4131 32.5510 35.4345 33.4292 520057 1.2057 0.9212 29.1597 31.7777 34.0671 31.7455 520059 1.4262 1.0226 31.1798 32.1905 33.6526 32.3663 520062 1.3557 1.0226 32.7015 37.5630 37.0520 35.8645 520063 1.2023 1.0226 31.5200 32.6383 34.1781 32.7561
520064 1.6643 1.0226 33.1269 34.1899 36.0924 34.4301 520066 1.4525 0.9694 31.6793 31.2257 33.7033 32.1994 520070 1.8311 0.9600 30.0475 30.2454 32.1644 30.8209 520071 1.2720 1.0226 31.5452 32.9974 33.3852 32.6894CMS-1498-P 911

**Provider Number Case-Mix**  **Index 2**  **FY 2011 Wage**  **Index Average**  **Hourly Wage**  **FY 2009 Average**  **Hourly Wage**  **FY 2010 Average**  **Hourly Wage**  **FY 2011 1**  **Average Hourly Wage**  ****** **(3 years)** 520075 1.8243 0.9443 32.2773 33.5393 34.0973 33.3083 520076 1.2579 1.0226 26.8943 28.0857 30.1903 28.4165 520078 1.6147 1.0226 32.0200 32.8377 33.6214 32.8336
520083 1.6732 1.1316 34.7230 36.8165 38.2281 36.6451 520087 1.6998 0.9864 31.9771 33.5759 34.5519 33.3848 520088 1.3791 0.9470 30.7482 32.9061 32.7670 32.1576 520089 1.5783 1.1316 34.9357 36.3819 38.0516 36.4973 520091 1.3243 0.9019 28.7180 29.9318 31.2611 29.9703 520095 1.2864 1.1096 33.2426 33.3298 35.6079 34.0578
520096 1.4255 1.0226 29.2895 31.5023 37.8499 32.7151 520097 1.4507 0.9443 30.5442 32.2225 34.3493 32.3376 520098 2.0458 1.1316 38.0993 39.1444 41.0919 39.4919 520100 1.3212 0.9694 31.7772 32.4038 34.0159 32.7405 520102 1.2714 1.0226 31.5756 31.9275 34.1568 32.5763 520103 1.5487 1.0226 34.5640 35.3825 36.9411 35.6386
520107 1.3724 0.9178 30.0354 31.6500 31.1976 30.9724 520109 1.0287 0.9019 25.9740 27.2739 28.4742 27.2711 520113 1.4088 0.9249 33.3040 34.9718 35.6843 34.6401 520116 1.2781 1.0226 31.6702 32.7105 34.6508 33.0184 520136 1.8091 1.0226 32.3504 32.8906 33.7189 32.9955 520138 1.9849 1.0226 32.5677 33.5487 36.0676 34.0683
520139 1.4138 1.0226 31.7086 32.9369 34.1039 32.9713 520160 1.7449 0.9375 30.3052 31.0392 33.4129 31.5467 520170 1.6326 1.0226 31.7610 35.2627 33.8589 33.5756 520177 1.7357 1.0226 33.1243 34.6960 35.6005 34.5408 520189 1.3474 1.0370 29.2229 29.0333 31.6752 29.9942 520193 1.7818 0.9443 29.4737 30.8077 32.6949 31.0673
520194 1.7194 1.0226 31.0015 36.9520 35.9064 34.6592 520195 *** * 41.6120 37.8891 * 39.7179 520196 1.7921 0.9600 33.4890 32.0197 35.9711 33.8028 520198 1.4018 0.9536 29.9803 30.6303 32.9887 31.2354 520199 2.1323 1.0226 37.0128 45.5967 46.6518 43.7293 520202 1.7481 0.9581 * 33.6427 30.8076 32.2276
520203 *** * * * 44.8123 44.8123 520204 1.0509 1.0226 * * * *
520205 2.1096 1.0226 * * * *
530002 1.1686 0.9392 29.2418 32.5654 34.0190 32.0426CMS-1498-P 912

**Provider Number Case-Mix**  **Index 2**  **FY 2011 Wage**  **Index Average**  **Hourly Wage**  **FY 2009 Average**  **Hourly Wage**  **FY 2010 Average**  **Hourly Wage**  **FY 2011 1**  **Average Hourly Wage**  ****** **(3 years)** 530006 1.2785 0.9392 30.3724 32.8615 33.0523 32.1254 530008 1.1051 0.9392 30.6010 30.6600 30.9960 30.7519 530009 0.8427 0.9392 27.0555 27.3359 30.2467 28.1948
530010 1.2811 0.9392 28.5534 30.1134 32.0732 30.2646 530011 1.1057 0.9392 31.1329 31.8923 31.4146 31.4720 530012 1.6294 0.9444 30.6109 31.1738 32.9710 31.6237 530014 1.4706 0.9418 29.6724 31.2573 32.7666 31.2186 530015 1.2800 0.9392 33.4903 36.0871 37.1114 35.5281 530017 1.1557 * 25.8183 24.0911 * 24.8262
530025 1.2173 0.9392 28.8963 31.4614 30.9906 30.4574 530032 1.1632 0.9392 25.4267 26.7025 31.0922 27.6747 530033 2.0646 0.9444 * * * *
640001 0.8536 * * * * *
650001 1.4006 * * * * *
660001 1.0796 * * * * *
670002 1.0505 0.9734 29.1376 29.9545 30.5438 29.8867 670003 *** * 33.8986 33.4713 33.2183 33.4927 670004 1.1660 0.8018 25.3706 25.5671 26.9631 25.9396 670005 1.7721 0.9946 31.9464 41.2085 29.7605 33.4908 670006 1.9552 0.9523 27.1064 34.6785 36.8199 32.5839 670007 *** * * 29.5985 30.3445 30.0121
670008 1.5966 0.9946 * 30.3978 30.7957 30.6253 670009 *** * * 31.8096 29.0715 30.1581 670010 0.8338 0.9734 * 35.6620 29.6612 31.5941 670011 1.0270 0.9523 * 32.1855 30.2158 30.9733 670012 2.2140 0.9946 * 24.1597 24.2305 24.1941 670013 *** * * 29.4886 * 29.4886
670014 *** * * 34.6108 * 34.6108 670015 *** * * 35.3054 * 35.3054 670016 *** * * * 30.9543 30.9543 670017 *** * * * 30.4743 30.4743 670018 0.9687 0.9946 * * 34.7939 34.7939 670019 1.5202 0.9946 * * 42.1599 42.1599
670020 *** * * * 39.6181 39.6181 670022 *** * * 32.9889 34.0570 33.5229 670023 1.4036 0.9427 * * 32.5158 32.5158 670024 1.6178 0.9946 * * 30.0165 30.0165CMS-1498-P 913

**Provider Number Case-Mix**  **Index 2**  **FY 2011 Wage**  **Index Average**  **Hourly Wage**  **FY 2009 Average**  **Hourly Wage**  **FY 2010 Average**  **Hourly Wage**  **FY 2011 1**  **Average Hourly Wage**  ****** **(3 years)** 670025 3.0845 0.9734 * * 39.9558 39.9558 670026 *** * * * 21.8681 21.8681 670027 1.9240 0.9946 * * 19.3451 19.3451
670028 *** * * * 43.4052 43.4052 670029 1.7447 0.9946 * * 24.7438 24.7438 670030 *** * * * 32.0527 32.0527 670031 1.3908 0.9946 * * 32.9130 32.9130 670033 1.1449 0.9734 * * * *
670034 1.4385 0.9523 * * 31.7770 31.7770
670040 0.8256 0.9946 * * 20.5126 20.5126 670041 1.5612 0.9523 * * * *
670042 1.7645 0.9427 * * * *
670043 1.2712 0.9523 * * * *
670044 1.2345 0.9734 * * * *
670046 1.2291 0.9427 * * * *
670047 1.4178 0.8594 * * * *
670048 1.2701 0.9946 * * * *
670049 1.4828 0.9734 * * * *
670050 1.2258 0.8940 * * * *
670051 1.7132 0.9244 * * * *
670052 0.9734 0.9427 * * * *
670053 1.5075 0.9946 * * * *
670054 2.1510 0.9071 * * * *
670055 1.4073 0.9071 * * * *

1. Based on salaries adjusted for occupa tional mix, according to th e calculation in section III.H. of this proposed rule.
2. The case-mix index is based on the billed MS-DRGs in the FY 2009 MedPAR file. It is not transfer-adjusted.
3. Provider 140010 is part of a multi-campus provider (MCH ) that is comprised of campuses that are located in two different CBSAs. The provider number with a “B” in the 4 th position, 140B10, indicates the portion of the wage and hours of the MCH that is allocated to CBSA 29404; provider number 140010 indicates the portion of wages and hours of the MCH that is allocated to CBSA 16974.
4. Provider 220074 is part of a MCH that is comprised of campuses that are located in two different CBSAs. The provider number with a “B” in the 4 th position, 220B74, indicates the portion of the wage and hours of the MCH that is allocated to CBSA 14484; provider number 220074 indicates the portion of wages and hours of the MCH that is allocated to CBSA 39300.
5. Provider 230104 is part of a MCH that is comprised of campuses that are located in two different CBSAs. The provider number with a “B” in the 4 th position, 230B04, indicates the portion of the wage and hours of the MCH that is allocated to CBSA 47644; provider number 230104 indicates the portion of wages and hours of the MCH that is allocated to CBSA 19804.

Notes:CMS-1498-P 914

* Denotes wage data not available for the provider for that year. ** Based on the sum of the salaries and hours computed for Federal FYs 2009, 2010, and 2011. *** Denotes MedPAR data not available for the provider for FY 2009.CMS-1498-P 915

TABLE 3A.--FY 2011 and 3-YEAR* AVERAGE HOURLY WAGE FOR ACUTE CARE HOSPITALS IN URBAN AREAS BY CBSA

[*Based on the salaries and hours co mputed for Federal FYs 2009, 2010, and 2011.]

CBSA Code Urban Area FY 2011 Average Hourly Wage 3-Year Average Hourly Wage 10180 Abilene, TX 29.3949 28.1776 10380 Aguadilla-Isabela-S an Sebastián, PR 11.8160 11.2855 10420 Akron, OH 30.9394 29.7268 10500 Albany, GA 31.7616 30.0124 10580 Albany-Schenectady-Troy, NY 30.4027 29.4970 10740 Albuquerque, NM 33.6484 32.1367 10780 Alexandria, LA 28.4818 27.3679 10900 Allentown-Bethle hem-Easton, PA-NJ 32.9853 32.3982 11020 Altoona, PA 29.8723 28.7214 11100 Amarillo, TX 29.9470 29.2820 11180 Ames, IA 35.0846 32.5833 11260 Anchorage, AK 41.3142 39.7621 11300 Anderson, IN 32.4243 30.5946
11340 1 Anderson, SC ---- 31.0258 11460 Ann Arbor, MI 35.2875 34.4775 11500 Anniston-Oxford, AL 27.5967 26.3204 11540 Appleton, WI 32.6349 31.2420 11700 Asheville, NC 31.6157 30.6097 12020 Athens-Clarke County, GA 32.6369 31.0325 12060 Atlanta-Sandy Spri ngs-Marietta, GA 33.4176 32.3815 12100 Atlantic City-Hammonton, NJ 38.5037 38.3789 12220 Auburn-Opelika, AL 26.2864 26.2272 12260 Augusta-Richmond County, GA-SC 33.4130 32.0531 12420 Austin-Round Rock-San Marcos, TX 33.2627 31.9957 12540 Bakersfield-Delano, CA 41.2731 38.7144 12580 Baltimore-Towson, MD 35.6052 33.9776 12620 Bangor, ME 33.8045 33.3702 12700 Barnstable Town, MA 44.7757 42.6501 12940 Baton Rouge, LA 30.4662 28.2098 12980 Battle Creek, MI 34.0719 33.4413 13020 Bay City, MI 32.9174 31.6784 13140 Beaumont-Port Arthur, TX 29.5372 28.3888CMS-1498-P 916

CBSA Code Urban Area FY 2011 Average Hourly Wage 3-Year Average Hourly Wage 13380 Bellingham, WA 39.5003 38.1941 13460 Bend, OR 39.2471 37.6920 13644 Bethesda-Rockville-Frederick, MD 36.3603 34.8330 13740 Billings, MT 31.2292 30.2506 13780 Binghamton, NY 31.1847 29.8256 13820 Birmingham-Hoover, AL 30.1026 29.0144 13900 Bismarck, ND 26.6755 25.4947 13980 Blacksburg-Christiansburg-Radford, VA 28.9603 27.7355 14020 Bloomington, IN 32.4229 31.4114 14060 Bloomington-Normal, IL 33.4002 31.9474 14260 Boise City-Nampa, ID 32.4846 31.3466 14484 Boston-Quincy, MA 43.0901 41.0488 14500 Boulder, CO 35.3221 34.0847 14540 Bowling Green, KY 30.4559 28.6498 14740 Bremerton-Silverdale, WA 36.9804 35.8188 14860 Bridgeport-Stamford-Norwalk, CT 44.1289 43.0332 15180 Brownsville-Harlingen, TX 33.1329 31.3922 15260 Brunswick, GA 32.4958 31.8053 15380 Buffalo-Niagara Falls, NY 33.6124 32.5065 15500 Burlington, NC 30.6796 29.1889 15540 Burlington-South Burlington, VT 36.0988 34.0281 15764 Cambridge-Newton-Framingham, MA 39.4299 37.7800 15804 Camden, NJ 36.2670 34.9790 15940 Canton-Massillon, OH 30.1085 29.2640 15980 Cape Coral-Fort Myers, FL 32.0534 31.0627 16020 Cape Girardeau-Jackson, MO-IL 30.7590 30.1921 16180 Carson City, NV 35.8985 34.3321 16220 Casper, WY 32.9710 31.6237 16300 Cedar Rapids, IA 30.7335 29.6900 16580 Champaign-Urbana, IL 35.4749 33.2063 16620 Charleston, WV 28.2186 27.7498 16700 Charleston-North Char leston-Summerville, SC 32.4496 31.0970 16740 Charlotte-Gastonia-Rock Hill, NC-SC 32.4685 31.5651 16820 Charlottesville, VA 32.2777 31.5688 16860 Chattanooga, TN-GA 30.7014 29.7023 16940 Cheyenne, WY 32.7666 31.2186CMS-1498-P 917

CBSA Code Urban Area FY 2011 Average Hourly Wage 3-Year Average Hourly Wage 16974 Chicago-Joliet-Naperville, IL 36.6687 34.9381 17020 Chico, CA 39.7055 37.2221 17140 Cincinnati-Middletown, OH-KY-IN 33.6443 32.0501 17300 Clarksville, TN-KY 27.4198 26.9255 17420 Cleveland, TN 27.2121 26.2003 17460 Cleveland-Elyria-Mentor, OH 31.7487 30.5792 17660 Coeur d'Alene, ID 32.1766 30.7795 17780 College Station-Bryan, TX 32.2874 30.8937 17820 Colorado Springs, CO 32.2511 31.9296 17860 Columbia, MO 28.8423 28.3106 17900 Columbia, SC 30.7179 29.8385 17980 Columbus, GA-AL 31.8363 30.1940 18020 Columbus, IN 33.0833 32.3322 18140 Columbus, OH 35.5317 33.8232 18580 Corpus Christi, TX 29.9543 28.8144 18700 Corvallis, OR 36.1111 36.0952
18880 2 Crestview-Fort Walton Beach-Destin, FL 30.6368 29.2681 19060 Cumberland, MD-WV 28.7642 26.6875 19124 Dallas-Plano-Irving, TX 33.9994 32.8345 19140 Dalton, GA 29.6173 28.6311 19180 Danville, IL 33.9418 31.5446 19260 Danville, VA 28.5221 27.8788 19340 Davenport-Moline-Rock Island, IA-IL 29.4290 28.1402 19380 Dayton, OH 32.0635 31.0431 19460 Decatur, AL 26.2777 25.6527 19500 Decatur, IL 27.8420 27.0898 19660 Deltona-Daytona Beach-Ormond Beach, FL 30.6744 29.6824 19740 Denver-Aurora-Broomfield, CO 37.0948 35.6553 19780 Des Moines-West Des Moines, IA 33.2680 31.9747 19804 Detroit-Livonia-Dearborn, MI 34.0881 33.1008 20020 Dothan, AL 27.0561 25.7662 20100 Dover, DE 35.0266 34.3423 20220 Dubuque, IA 29.9069 28.4340 20260 Duluth, MN-WI 37.2948 35.6803 20500 Durham-Chapel Hill, NC 33.7364 32.4388 20740 Eau Claire, WI 33.5152 32.1516CMS-1498-P 918

CBSA Code Urban Area FY 2011 Average Hourly Wage 3-Year Average Hourly Wage 20764 Edison-New Brunswick, NJ 38.0887 36.9892 20940 El Centro, CA 32.5187 30.4057 21060 Elizabethtown, KY 29.2425 28.1376 21140 Elkhart-Goshen, IN 32.9702 31.8127 21300 Elmira, NY 29.8159 28.3066 21340 El Paso, TX 30.0169 29.1999 21500 Erie, PA 29.1769 28.9316 21660 Eugene-Springfield, OR 39.5694 37.5142 21780 Evansville, IN-KY 29.3081 28.4396 21820 Fairbanks, AK 38.4880 37.2462 21940 Fajardo, PR 13.5864 13.1629 22020 Fargo, ND-MN 28.2861 27.3617 22140 Farmington, NM 27.9464 26.5665 22180 Fayetteville, NC 33.0069 32.2702 22220 Fayetteville-Springdale-Rogers, AR-MO 30.1927 29.7252 22380 Flagstaff, AZ 43.4901 40.9837 22420 Flint, MI 39.7366 37.7705 22500 Florence, SC 29.6001 28.2550 22520 Florence-Muscle Shoals, AL 27.7915 26.5477 22540 Fond du Lac, WI 32.7670 32.1576 22660 Fort Collins-Loveland, CO 33.2168 32.4365 22744 Fort Lauderdale-Pompano Beach-Deerfield 34.9003 33.5974 22900 Fort Smith, AR-OK 27.0278 26.3924 23060 Fort Wayne, IN 32.2565 30.3718 23104 Fort Worth-Arlington, TX 32.9268 31.9797 23420 Fresno, CA 39.9087 37.8308 23460 Gadsden, AL 24.8236 26.1400 23540 Gainesville, FL 32.8864 31.4434 23580 Gainesville, GA 33.8978 31.8764 23844 Gary, IN 31.4542 30.7534 24020 Glens Falls, NY 30.8219 29.5362 24140 Goldsboro, NC 32.4035 31.0271 24220 Grand Forks, ND-MN 28.0496 26.7628 24300 Grand Junction, CO 34.4738 32.8228 24340 Grand Rapids-Wyoming, MI 32.5225 31.2449 24500 Great Falls, MT 28.8603 28.2315CMS-1498-P 919

CBSA Code Urban Area FY 2011 Average Hourly Wage 3-Year Average Hourly Wage 24540 Greeley, CO 33.5991 32.8595 24580 Green Bay, WI 32.9660 31.7777 24660 Greensboro-High Point, NC 31.4115 30.5532 24780 Greenville, NC 32.6226 31.4428 24860 Greenville-Mauldin-Easley, SC 32.6686 32.3059 25020 Guayama, PR 12.4886 11.4528 25060 Gulfport-Biloxi, MS 31.1513 29.7538 25180 Hagerstown-Martinsburg, MD-WV 33.1846 31.3132 25260 Hanford-Corcoran, CA 40.0252 37.9890 25420 Harrisburg-Carlisle, PA 32.1215 30.8066 25500 Harrisonburg, VA 32.4538 30.6807 25540 Hartford-West Hartford-East Hartford, C 38.8127 37.6851 25620 Hattiesburg, MS 27.7551 26.1804 25860 Hickory-Lenoir-Morganton, NC 30.2030 29.6952 25980 1 Hinesville-Fort Stewart, GA ----

---- 26100 Holland-Grand Haven, MI 30.7086 29.9212 26180 Honolulu, HI 40.6203 38.8534 26300 Hot Springs, AR 32.4533 30.8422 26380 Houma-Bayou Cane-Thibodaux, LA 27.9003 26.7495 26420 Houston-Sugar Land-Baytown, TX 34.7363 33.3876 26580 Huntington-Ashland, WV-KY-OH 31.1470 30.3284 26620 Huntsville, AL 31.4293 30.1542 26820 Idaho Falls, ID 33.7810 31.5660 26900 Indianapolis-Carmel, IN 33.3588 32.4485 26980 Iowa City, IA 33.3562 31.7675 27060 Ithaca, NY 34.1345 32.8690 27100 Jackson, MI 32.3303 30.8026 27140 Jackson, MS 28.3657 27.2938 27180 Jackson, TN 29.2532 28.4242 27260 Jacksonville, FL 31.1293 30.3737 27340 Jacksonville, NC 27.4651 27.2070 27500 Janesville, WI 33.8440 32.4434 27620 Jefferson City, MO 30.0429 29.6671 27740 Johnson City, TN 24.9085 25.3818 27780 Johnstown, PA 29.1342 27.8673 27860 Jonesboro, AR 27.3474 26.4977CMS-1498-P 920

CBSA Code Urban Area FY 2011 Average Hourly Wage 3-Year Average Hourly Wage 27900 Joplin, MO 29.4636 29.6834 28020 Kalamazoo-Portage, MI 36.0038 35.2099 28100 Kankakee-Bradley, IL 36.9046 34.8205 28140 Kansas City, MO-KS 33.3682 31.9790 28420 Kennewick-Pasco-Richland, WA 34.3233 33.4579 28660 Killeen-Temple-Fort Hood, TX 30.6493 29.6099 28700 Kingsport-Bristol-Bristol, TN-VA 26.7971 26.4513 28740 Kingston, NY 31.9507 31.3235 28940 Knoxville, TN 27.4247 26.4301 29020 Kokomo, IN 31.4563 31.3022 29100 La Crosse, WI-MN 34.4391 33.1590 29140 Lafayette, IN 32.3043 30.6089 29180 Lafayette, LA 29.5826 28.5502 29340 Lake Charles, LA 28.6346 26.6076 29404 Lake County-Kenosha County, IL-WI 37.4834 35.3301 29420 Lake Havasu City-Kingman, AZ 35.9129 34.5415 29460 Lakeland-Winter Haven, FL 30.1679 29.0320 29540 Lancaster, PA 34.1814 32.6061 29620 Lansing-East Lansing, MI 35.8522 33.4940 29700 Laredo, TX 28.7425 28.4271 29740 Las Cruces, NM 31.8991 29.9182 29820 Las Vegas-Paradise, NV 41.2359 39.5656 29940 Lawrence, KS 29.7218 28.4175 30020 Lawton, OK 30.0871 28.4155 30140 Lebanon, PA 28.4545 28.6018 30300 Lewiston, ID-WA 32.0498 31.1265 30340 Lewiston-Auburn, ME 31.2669 30.6891 30460 Lexington-Fayette, KY 30.7246 29.8100 30620 Lima, OH 32.3533 31.2513 30700 Lincoln, NE 33.1312 31.8977 30780 Little Rock-N.Little Rock-Conway,AR 30.2877 29.2865 30860 Logan, UT-ID 30.8717 29.8653 30980 Longview, TX 30.0153 27.9402 31020 Longview, WA 37.2841 37.1483 31084 Los Angeles-Long Beach-Santa Ana, CA 41.8223 40.3432 31140 Louisville-Jefferson County, KY-IN 30.8966 30.1980CMS-1498-P 921

CBSA Code Urban Area FY 2011 Average Hourly Wage 3-Year Average Hourly Wage 31180 Lubbock, TX 31.2259 29.6499 31340 Lynchburg, VA 29.7754 28.5576 31420 Macon, GA 32.7055 32.8408 31460 Madera-Chowchilla, CA 30.1104 28.6056 31540 Madison, WI 39.5054 37.8696 31700 Manchester-Nashua, NH 34.5930 33.9822 31740 Manhattan, KS 27.6635 26.5957 31860 Mankato-North Mankato, MN 32.3639 31.4358 31900 Mansfield, OH 30.7835 30.3015 32420 Mayagüez, PR 12.6118 12.4907 32580 McAllen-Edinburg-Mission, TX 31.0449 30.1056 32780 Medford, OR 35.0103 33.9125 32820 Memphis, TN-MS-AR 32.1641 31.1231 32900 Merced, CA 42.0265 40.4262 33124 Miami-Fort Lauderdale-Pompano Beach, FL 35.7435 33.7683 33140 Michigan City-La Porte, IN 32.8129 30.9515 33260 Midland, TX 33.3058 31.8597 33340 Milwaukee-Waukesha- West Allis, WI 35.6954 34.2353 33460 Minneapolis-St. Paul-Bloomington, MN-WI 38.4952 36.9220 33540 Missoula, MT 30.7656 29.8216 33660 Mobile, AL 27.6019 26.3141 33700 Modesto, CA 42.0519 41.0061 33740 Monroe, LA 28.3557 26.8341 33780 Monroe, MI 31.3315 30.3938 33860 Montgomery, AL 29.7248 28.3780 34060 Morgantown, WV 28.9024 28.5485 34100 Morristown, TN 24.8315 24.2612 34580 Mount Vernon-Anacortes, WA 35.1691 33.8802 34620 Muncie, IN 28.6143 27.7649 34740 Muskegon-Norton Shores, MI 34.3151 33.4379

34820 Myrtle Beach-North Myrtle Beach-Conway, SC 30.3085 29.1823 34900 Napa, CA 50.6166 48.0443 34940 Naples-Marco Island, FL 34.2982 32.9979

34980 Nashville-Davidson-Murfreesboro-Franklin, TN 32.5483 31.7724CMS-1498-P 922

CBSA Code Urban Area FY 2011 Average Hourly Wage 3-Year Average Hourly Wage 35004 Nassau-Suffolk, NY 43.9572 42.5759 35084 Newark-Union, NJ-PA 39.5622 38.2213 35300 New Haven-Milford, CT 40.3584 39.1449 35380 New Orleans-Metairie-Kenner, LA 31.4388 30.2046 35644 New York-White Plains-Wayne, NY-NJ 45.9252 44.0840 35660 Niles-Benton Harbor, MI 31.3865 30.3136
35840 2 North Port-Bradenton-Sarasota, FL 32.3943 31.9392 35980 Norwich-New London, CT 39.8427 38.5763 36084 Oakland-Fremont-Hayward, CA 55.5972 53.3129 36100 Ocala, FL 29.9935 28.8386 36140 Ocean City, NJ 38.0642 36.5086 36220 Odessa, TX 32.9220 32.1340 36260 Ogden-Clearfield, UT 32.6211 31.3730 36420 Oklahoma City, OK 31.0777 29.6784 36500 Olympia, WA 38.2620 37.6059 36540 Omaha-Council Bluffs, NE-IA 33.3566 31.9233 36740 Orlando-Kissimmee-Sanford, FL 32.0901 30.6557 36780 Oshkosh-Neenah, WI 33.2157 31.2415 36980 Owensboro, KY 29.7930 28.8753 37100 Oxnard-Thousand Oaks-Ventura, CA 43.2233 40.5774 37340 Palm Bay-Melbourne-Titusville, FL 32.6298 31.2779 37380 Palm Coast, FL 28.6480 29.3969

37460 Panama City-Lynn Have n-Panama City Beach, FL 28.4491 28.1718 37620 Parkersburg-Marie tta-Vienna, WV-OH 25.9479 25.8732 37700 Pascagoula, MS 28.5637 27.4171 37764 Peabody, MA 38.4760 36.5635 37860 Pensacola-Ferry Pass-Brent, FL 28.4556 27.3708 37900 Peoria, IL 32.4315 31.0327 37964 Philadelphia, PA 37.7549 36.4016 38060 Phoenix-Mesa-G lendale, AZ 36.7246 35.1010 38220 Pine Bluff, AR 28.7130 26.7537 38300 Pittsburgh, PA 30.0448 28.9335 38340 Pittsfield, MA 36.5974 35.4692 38540 Pocatello, ID 32.7435 30.8807 38660 Ponce, PR 14.9358 14.1175CMS-1498-P 923

CBSA Code Urban Area FY 2011 Average Hourly Wage 3-Year Average Hourly Wage 38860 Portland-South Por tland-Biddeford, ME 34.6681 33.6576 38900 Portland-Vancouve r-Hillsboro, OR-WA 39.1861 37.7069 38940 Port St. Lucie, FL 37.6301 34.3690 39100 Poughkeepsie-Newburgh-Middletown, NY 39.8644 37.7073 39140 Prescott, AZ 43.0057 36.4216 39300 Providence-New Bedford-Fall River, RI-M 37.5354 36.1121 39340 Provo-Orem, UT 32.3723 31.4543 39380 Pueblo, CO 30.0091 28.7443 39460 Punta Gorda, FL 31.7131 30.7467 39540 Racine, WI 37.1869 32.6652 39580 Raleigh-Cary, NC 33.9133 32.4239 39660 Rapid City, SD 38.3671 34.5099 39740 Reading, PA 31.0160 30.6990 39820 Redding, CA 47.5125 44.9345 39900 Reno-Sparks, NV 36.4465 34.9208 40060 Richmond, VA 33.2980 31.4929 40140 Riverside-San Bern ardino-Ontario, CA 39.9014 37.9847 40220 Roanoke, VA 31.4982 29.9865 40340 Rochester, MN 37.5616 36.5729 40380 Rochester, NY 30.4032 29.5889 40420 Rockford, IL 35.0956 33.6906 40484 Rockingham County, NH 35.0486 33.6796 40580 Rocky Mount, NC 31.8553 30.3489 40660 Rome, GA 30.5837 30.5032 40900 Sacramento--Arden-Ar cade--Roseville, CA 47.2994 45.2291 40980 Saginaw-Saginaw Township North, MI 32.1555 31.1518 41060 St. Cloud, MN 40.6853 39.1270 41100 St. George, UT 32.5066 31.3092 41140 St. Joseph, MO-KS 36.2278 34.8344 41180 St. Louis, MO-IL 31.6290 30.3438 41420 Salem, OR 38.8312 36.7534 41500 Salinas, CA 55.5109 51.7900 41540 Salisbury, MD 31.1946 30.3645 41620 Salt Lake City, UT 32.6863 31.4867 41660 San Angelo, TX 29.6151 28.0559 41700 San Antonio-New Braunfels, TX 31.6824 30.2027CMS-1498-P 924

CBSA Code Urban Area FY 2011 Average Hourly Wage 3-Year Average Hourly Wage 41740 San Diego-Carlsbad-San Marcos, CA 40.5279 38.5285 41780 Sandusky, OH 30.0999 29.3797 41884 San Francisco-San Ma teo-Redwood City, CA 53.8091 51.6664 41900 San Germán-Cabo Rojo, PR 15.9545 15.6643 41940 San Jose-Sunnyvale-Santa Clara, CA 57.4157 54.3198 41980 San Juan-Caguas-Guaynabo, PR 15.0192 14.6360 42020 San Luis Obispo-Paso Robles, CA 43.3776 40.8126 42044 Santa Ana-Anaheim-Irvine, CA 41.9435 39.8926 42060 Santa Barbara-Santa Maria-Goleta, CA 41.2648 39.8280 42100 Santa Cruz-Watsonville, CA 56.9566 54.4353 42140 Santa Fe, NM 37.6618 35.8749 42220 Santa Rosa-Petaluma, CA 55.3076 52.3185 42340 Savannah, GA 30.9240 29.9675 42540 Scranton--Wilkes-Barre, PA 28.7281 27.7860 42644 Seattle-Bellevue -Everett, WA 39.8184 38.4963 42680 Sebastian-Vero Beach, FL 32.4326 31.7794 43100 Sheboygan, WI 32.4662 30.8688 43300 Sherman-Denison, TX 29.4908 28.9887 43340 Shreveport-Bossier City, LA 30.2022 28.7466 43580 Sioux City, IA-NE-SD 31.3111 29.8813 43620 Sioux Falls, SD 32.7745 31.1879 43780 South Bend-Mishawaka, IN-MI 34.5236 32.8075 43900 Spartanburg, SC 31.7207 30.5331 44060 Spokane, WA 37.0084 35.4231 44100 Springfield, IL 31.2379 30.6699 44140 Springfield, MA 36.1737 35.1312 44180 Springfield, MO 29.3703 28.6119 44220 Springfield, OH 31.4540 29.8060 44300 State College, PA 30.2637 29.6045
44600 2 Steubenville-Weirton, OH-WV 25.4395 25.3407 44700 Stockton, CA 43.8475 41.3450 44940 Sumter, SC 28.5579 28.2053 45060 Syracuse, NY 33.9000 32.9463 45104 Tacoma, WA 39.3681 37.5711 45220 Tallahassee, FL 31.4039 29.7448 45300 Tampa-St. Petersbur g-Clearwater, FL 31.7974 30.3381CMS-1498-P 925

CBSA Code Urban Area FY 2011 Average Hourly Wage 3-Year Average Hourly Wage 45460 Terre Haute, IN 32.3071 30.7568 45500 Texarkana, TX-Texarkana, AR 26.8927 26.8786 45780 Toledo, OH 32.7715 31.4781 45820 Topeka, KS 31.9034 30.4681 45940 Trenton-Ewing, NJ 35.1805 34.8810 46060 Tucson, AZ 33.8370 32.2980 46140 Tulsa, OK 31.0910 29.4632 46220 Tuscaloosa, AL 28.7402 29.0146 46340 Tyler, TX 28.7095 28.5924 46540 Utica-Rome, NY 30.4893 29.2712 46660 Valdosta, GA 28.3875 27.3859 46700 Vallejo-Fairfield, CA 50.8429 48.5255 47020 Victoria, TX 28.0779 26.7203 47220 Vineland-Millville-Bridgeton, NJ 38.1019 36.3949 47260 Virginia Beach-Norfolk-Newport News, VA 31.2647 29.9721 47300 Visalia-Porterville, CA 38.0071 35.3637 47380 Waco, TX 30.2079 29.0730 47580 Warner Robins, GA 29.2281 30.2010 47644 Warren-Troy-Farmington-Hills, MI 33.9524 33.0850 47894 Washington-Arlington-Alexandria DC-VA 36.8726 35.7731 47940 Waterloo-Cedar Falls, IA 29.6525 28.7768 48140 Wausau, WI 33.4493 32.5485 48300 Wenatchee-East Wenatchee, WA 33.8234 32.3786 48424 West Palm Beach-Boca Raton-Boynton FL 34.3519 32.7302 48540 Wheeling, WV-OH 23.4746 23.0898 48620 Wichita, KS 30.9307 30.0110 48660 Wichita Falls, TX 34.6795 32.0396 48700 Williamsport, PA 25.4029 25.8954 48864 Wilmington, DE-MD-NJ 37.7128 36.0069 48900 Wilmington, NC 32.2983 30.6626 49020 Winchester, VA-WV 34.9053 33.0668 49180 Winston-Salem, NC 31.3330 30.1817 49340 Worcester, MA 39.1354 37.4410 49420 Yakima, WA 35.0663 33.5431 49500 Yauco, PR 12.3738 11.4462 49620 York-Hanover, PA 33.4110 31.9488CMS-1498-P 926

CBSA Code Urban Area FY 2011 Average Hourly Wage 3-Year Average Hourly Wage 49660 Youngstown-Warren-Boardman, OH-PA 30.1643 29.3613 49700 Yuba City, CA 37.6504 36.6555 49740 Yuma, AZ 33.0103 32.0532

1 This area has no average hourly wage because there are no short-term, acute care hospital wage data for the area.
2 This is a new CBSA for FY 2011. To calculate the 3-year average hourly wage for this new area, we included the hospitals’ data from their previous geographic location for FY 2009 and FY 2010.CMS-1498-P 927

TABLE 3B.--FY 2011 AND 3-YEAR* AVERAGE HOURLY WAGE

FOR ACUTE CARE HOSPITLAS IN RURAL AREAS BY CBSA

(*Based on the sum of the salaries and hours computed for Federal FYs 2009, 2010, and 2011.)

CBSA Code Nonurban Area FY 2011 Average Hourly Wage 3-Year Average Hourly Wage 01 Alabama 26.0264 25.1568 02 Alaska 44.1146 40.4763 03 Arizona 31.8393 29.9784 04 Arkansas 25.9685 25.2920 05 California 42.9541 40.4802 06 Colorado 33.8979 32.2217 07 Connecticut 39.4836 37.7398 08 Delaware 34.5676 33.5989 10 Florida 29.5728 28.7958 11 Georgia 27.1671 26.2403 12 Hawaii 39.4229 37.8491 13 Idaho 26.1426 25.4397 14 Illinois 29.2557 28.1409 15 Indiana 29.3235 28.4347 16 Iowa 29.8030 28.9280 17 Kansas 27.8665 27.0309 18 Kentucky 27.6898 26.5212 19 Louisiana 27.7399 26.2678 20 Maine 29.9878 28.8613 21 Maryland 32.4848 30.6740 22 Massachusetts 1

---- ---- 23 Michigan 30.0405 29.4059 24 Minnesota 31.6251 30.5376 25 Mississippi 27.0138 25.8819 26 Missouri 27.2630 26.6216 27 Montana 29.4658 28.4050 28 Nebraska 31.0214 29.3825 29 Nevada 32.7810 32.3514 30 New Hampshire 34.6904 33.8700 31 New Jersey 2

---- ---- 32 New Mexico 31.5263 30.1115 33 New York 29.0517 27.9458 34 North Carolina 29.5268 28.7455 35 North Dakota 24.5023 24.8120 36 Ohio 29.9108 28.7616CMS-1498-P 928

CBSA Code Nonurban Area FY 2011 Average Hourly Wage 3-Year Average Hourly Wage 37 Oklahoma 28.0420 26.6656 38 Oregon 34.9774 34.1391 39 Pennsylvania 29.7971 28.2813 40 Puerto Rico 2

---- ---- 41 Rhode Island 2

---- ---- 42 South Carolina 29.4603 28.4856 43 South Dakota 29.3712 28.1981 44 Tennessee 27.8764 26.6861 45 Texas 27.9871 26.9747 46 Utah 30.4214 28.6155 47 Vermont 33.0189 32.4250 49 Virginia 28.1471 27.0795 50 Washington 35.3253 34.0250 51 West Virginia 26.4462 25.3997 52 Wisconsin 31.4858 30.9851 53 Wyoming 32.7909 31.3477

1 Massachusetts has area(s) designated as rural. However, no short term, acute care hospitals are located in the area(s) for FY 2011.
2 All counties within the State or territory are classified as urban.CMS-1498-P 929

TABLE 4A.—PROPOSED WAGE INDEX AND CAPITAL GEOGRAPHIC ADJUSTMENT FACTOR (GAF) FOR ACUTE CARE HOSPITALS IN URBAN AREAS BY CBSA AND BY STATE--FY 2011 [Constituent counties are listed in Table 4E.]

(Wage Index Includes Rural Floor Budget Neutrality Adjustment)

CBSA Code Urban Area State Proposed Wage Index Proposed GAF 10180 Abilene, TX TX 0.8416 0.8886 10380 Aguadilla-Isabela-San Sebastián, PR PR 0.3384 0.4762 10420 Akron, OH OH 0.8850 0.9197 10500 Albany, GA GA 0.9098 0.9373 10580 Albany-Schenectady-Troy, NY NY 0.8708 0.9096 10740 Albuquerque, NM NM 0.9638 0.9751 10780 Alexandria, LA LA 0.8164 0.8703 10900 Allentown-Be thlehem-Easton, PA-NJ NJ 1.1069 1.0720 10900 Allentown-Be thlehem-Easton, PA-NJ PA 0.9418 0.9598 11020 Altoona, PA PA 0.8529 0.8968 11100 Amarillo, TX TX 0.8574 0.9000 11180 Ames, IA IA 1.0044 1.0030 11260 Anchorage, AK AK 1.1919 1.1277 11300 Anderson, IN IN 0.9287 0.9506 11340 Anderson, SC SC 0.8438 0.8902 11460 Ann Arbor, MI MI 1.0107 1.0073 11500 Anniston-Oxford, AL AL 0.7898 0.8508 11540 Appleton, WI WI 0.9348 0.9549 11700 Asheville, NC NC 0.9055 0.9343 12020 Athens-Clarke County, GA GA 0.9348 0.9549 12060 Atlanta-Sandy Spring s-Marietta, GA GA 0.9572 0.9705 12100 Atlantic City-Hammonton, NJ NJ 1.1069 1.0720 12220 Auburn-Opelika, AL AL 0.7522 0.8228 12260 Augusta-Richmond County, GA-SC GA 0.9571 0.9704 12260 Augusta-Richmond County, GA-SC SC 0.9571 0.9704 12420 Austin-Round Rock-San Marcos, TX TX 0.9523 0.9671 12540 Bakersfield-Delano, CA CA 1.2002 1.1331 12580 Baltimore-Towson, MD MD 1.0198 1.0135 12620 Bangor, ME ME 0.9695 0.9790 12700 Barnstable Town, MA MA 1.2825 1.1858 12940 Baton Rouge, LA LA 0.8726 0.9109 12980 Battle Creek, MI MI 0.9759 0.9834 13020 Bay City, MI MI 0.9429 0.9605 13140 Beaumont-Port Arthur, TX TX 0.8456 0.8915 13380 Bellingham, WA WA 1.1302 1.0874 13460 Bend, OR OR 1.1239 1.0833CMS-1498-P 930

CBSA Code Urban Area State Proposed Wage Index Proposed GAF 13644 Bethesda-Rockville-Frederick, MD MD 1.0573 1.0389 13740 Billings, MT MT 0.8944 0.9264 13780 Binghamton, NY NY 0.8932 0.9256 13820 Birmingham-Hoover, AL AL 0.8614 0.9029 13900 Bismarck, ND ND 0.7641 0.8317 13980 Blacksburg-Christiansburg-Radford, VA VA 0.8293 0.8797 14020 Bloomington, IN IN 0.9287 0.9506 14060 Bloomington-Normal, IL IL 0.9567 0.9701 14260 Boise City-Nampa, ID ID 0.9305 0.9519 14484 Boston-Quincy, MA MA 1.2342 1.1550 14500 Boulder, CO CO 0.9983 0.9988 14540 Bowling Green, KY KY 0.8722 0.9106 14740 Bremerton-Silverdale, WA WA 1.0580 1.0394 14860 Bridgeport-Stamford-Norwalk, CT CT 1.2575 1.1699 15180 Brownsville-Harlingen, TX TX 0.9486 0.9645 15260 Brunswick, GA GA 0.9352 0.9552 15380 Buffalo-Niagara Falls, NY NY 0.9628 0.9744 15500 Burlington, NC NC 0.8787 0.9153 15540 Burlington-South Burlington, VT VT 1.0340 1.0232 15764 Cambridge-Newton-Framingham, MA MA 1.1294 1.0869 15804 Camden, NJ NJ 1.1069 1.0720 15940 Canton-Massillon, OH OH 0.8612 0.9027 15980 Cape Coral-Fort Myers, FL FL 0.9167 0.9422 16020 Cape Girardeau-Jackson, MO-IL IL 0.8810 0.9169 16020 Cape Girardeau-Jackson, MO-IL MO 0.8810 0.9169 16180 Carson City, NV NV 1.0282 1.0192 16220 Casper, WY WY 0.9444 0.9616 16300 Cedar Rapids, IA IA 0.8799 0.9161 16580 Champaign-Urbana, IL IL 1.0161 1.0110 16620 Charleston, WV WV 0.8093 0.8651 16700 Charleston-North Charlest on-Summerville, SC SC 0.9295 0.9512 16740 Charlotte-Gastonia-Rock Hill, NC-SC NC 0.9299 0.9514 16740 Charlotte-Gastonia-Rock Hill, NC-SC SC 0.9300 0.9515 16820 Charlottesville, VA VA 0.9243 0.9475 16860 Chattanooga, TN-GA GA 0.8794 0.9158 16860 Chattanooga, TN-GA TN 0.8721 0.9105 16940 Cheyenne, WY WY 0.9392 0.9580 16974 Chicago-Joliet-Naperville, IL IL 1.0503 1.0342 17020 Chico, CA CA 1.2002 1.1331 17140 Cincinnati-Middletown, OH-KY-IN IN 0.9637 0.9750 17140 Cincinnati-Middletown, OH-KY-IN KY 0.9634 0.9748 17140 Cincinnati-Middletown, OH-KY-IN OH 0.9624 0.9741CMS-1498-P 931

CBSA Code Urban Area State Proposed Wage Index Proposed GAF 17300 Clarksville, TN-KY KY 0.7992 0.8577 17300 Clarksville, TN-KY TN 0.7919 0.8523 17420 Cleveland, TN TN 0.7919 0.8523 17460 Cleveland-Elyria-Mentor, OH OH 0.9082 0.9362 17660 Coeur d'Alene, ID ID 0.9216 0.9456 17780 College Station-Bryan, TX TX 0.9244 0.9476 17820 Colorado Springs, CO CO 0.9581 0.9711 17860 Columbia, MO MO 0.8261 0.8774 17900 Columbia, SC SC 0.8799 0.9161 17980 Columbus, GA-AL AL 0.9111 0.9382 17980 Columbus, GA-AL GA 0.9119 0.9388 18020 Columbus, IN IN 0.9476 0.9638 18140 Columbus, OH OH 1.0163 1.0111 18580 Corpus Christi, TX TX 0.8576 0.9001 18700 Corvallis, OR OR 1.0340 1.0232 18880 Crestview-Fort Walton Beach-Destin, FL FL 0.8762 0.9135 19060 Cumberland, MD-WV MD 0.9305 0.9519 19060 Cumberland, MD-WV WV 0.8196 0.8726 19124 Dallas-Plano-Irving, TX TX 0.9734 0.9817 19140 Dalton, GA GA 0.8483 0.8935 19180 Danville, IL IL 0.9722 0.9809 19260 Danville, VA VA 0.8168 0.8706 19340 Davenport-Moline-Rock Island, IA-IL IL 0.8658 0.9060 19340 Davenport-Moline-Rock Island, IA-IL IA 0.8654 0.9057 19380 Dayton, OH OH 0.9172 0.9425 19460 Decatur, AL AL 0.7583 0.8274 19500 Decatur, IL IL 0.8380 0.8860 19660 Deltona-Daytona Beach- Ormond Beach, FL FL 0.8773 0.9143 19740 Denver-Aurora-Broomfield, CO CO 1.0485 1.0330 19780 Des Moines-West Des Moines, IA IA 0.9525 0.9672 19804 Detroit-Livonia-Dearborn, MI MI 0.9776 0.9846 20020 Dothan, AL AL 0.7743 0.8393 20100 Dover, DE DE 1.0090 1.0062 20220 Dubuque, IA IA 0.8562 0.8991 20260 Duluth, MN-WI MN 1.0682 1.0462 20260 Duluth, MN-WI WI 1.0682 1.0462 20500 Durham-Chapel Hill, NC NC 0.9662 0.9767 20740 Eau Claire, WI WI 0.9600 0.9724 20764 Edison-New Brunswick, NJ NJ 1.1069 1.0720 20940 El Centro, CA CA 1.2002 1.1331 21060 Elizabethtown, KY KY 0.8389 0.8867 21140 Elkhart-Goshen, IN IN 0.9457 0.9625CMS-1498-P 932

CBSA Code Urban Area State Proposed Wage Index Proposed GAF 21300 Elmira, NY NY 0.8540 0.8976 21340 El Paso, TX TX 0.8594 0.9014 21500 Erie, PA PA 0.8521 0.8962 21660 Eugene-Springfield, OR OR 1.1331 1.0893 21780 Evansville, IN-KY IN 0.8399 0.8874 21780 Evansville, IN-KY KY 0.8393 0.8869 21820 Fairbanks, AK AK 1.1919 1.1277 21940 Fajardo, PR PR 0.3892 0.5240 22020 Fargo, ND-MN MN 0.9146 0.9407 22020 Fargo, ND-MN ND 0.8102 0.8658 22140 Farmington, NM NM 0.9030 0.9325 22180 Fayetteville, NC NC 0.9453 0.9622 22220 Fayetteville-Springdale-Rogers, AR-MO AR 0.8648 0.9053 22220 Fayetteville-Springdale-Rogers, AR-MO MO 0.8648 0.9053 22380 Flagstaff, AZ AZ 1.2457 1.1624 22420 Flint, MI MI 1.1382 1.0927 22500 Florence, SC SC 0.8478 0.8931 22520 Florence-Muscle Shoals, AL AL 0.8028 0.8603 22540 Fond du Lac, WI WI 0.9386 0.9575 22660 Fort Collins-Loveland, CO CO 0.9581 0.9711

22744 Fort Lauderdale-Pompano Beach-Deerfield Beach, FL FL 1.0364 1.0248 22900 Fort Smith, AR-OK AR 0.7742 0.8392 22900 Fort Smith, AR-OK OK 0.8052 0.8621 23060 Fort Wayne, IN IN 0.9245 0.9477 23104 Fort Worth-Arlington, TX TX 0.9427 0.9604 23420 Fresno, CA CA 1.2002 1.1331 23460 Gadsden, AL AL 0.7448 0.8173 23540 Gainesville, FL FL 0.9406 0.9589 23580 Gainesville, GA GA 0.9709 0.9800 23844 Gary, IN IN 0.9069 0.9353 24020 Glens Falls, NY NY 0.8828 0.9182 24140 Goldsboro, NC NC 0.9280 0.9501 24220 Grand Forks, ND-MN MN 0.9146 0.9407 24220 Grand Forks, ND-MN ND 0.8034 0.8608 24300 Grand Junction, CO CO 1.0051 1.0035 24340 Grand Rapids-Wyoming, MI MI 0.9315 0.9526 24500 Great Falls, MT MT 0.8439 0.8903 24540 Greeley, CO CO 0.9581 0.9711 24580 Green Bay, WI WI 0.9443 0.9615 24660 Greensboro-High Point, NC NC 0.8996 0.9301 24780 Greenville, NC NC 0.9343 0.9545CMS-1498-P 933

CBSA Code Urban Area State Proposed Wage Index Proposed GAF 24860 Greenville-Mauldin-Easley, SC SC 0.9357 0.9555 25020 Guayama, PR PR 0.3577 0.4946 25060 Gulfport-Biloxi, MS MS 0.8923 0.9249 25180 Hagerstown-Martinsburg, MD-WV MD 0.9505 0.9658 25180 Hagerstown-Martinsburg, MD-WV WV 0.9455 0.9623 25260 Hanford-Corcoran, CA CA 1.2002 1.1331 25420 Harrisburg-Carlis le, PA PA 0.9172 0.9425 25500 Harrisonburg, VA VA 0.9294 0.9511 25540 Hartford-West Hartford-East Hartford, CT CT 1.1251 1.0841 25620 Hattiesburg, MS MS 0.7950 0.8546 25860 Hickory-Lenoir-Morganton, NC NC 0.8650 0.9055 26100 Holland-Grand Haven, MI MI 0.8796 0.9159 26180 Honolulu, HI HI 1.1635 1.1093 26300 Hot Springs, AR AR 0.9296 0.9512 26380 Houma-Bayou Cane-Thibodaux, LA LA 0.7992 0.8577 26420 Houston-Sugar Land-Baytown, TX TX 0.9946 0.9963 26580 Huntington-Ashland, WV-KY-OH KY 0.8919 0.9246 26580 Huntington-Ashland, WV-KY-OH OH 0.8909 0.9239 26580 Huntington-Ashland, WV-KY-OH WV 0.8875 0.9215 26620 Huntsville, AL AL 0.8994 0.9300 26820 Idaho Falls, ID ID 0.9676 0.9777 26900 Indianapolis-Carmel, IN IN 0.9555 0.9693 26980 Iowa City, IA IA 0.9550 0.9690 27060 Ithaca, NY NY 0.9777 0.9847 27100 Jackson, MI MI 0.9260 0.9487 27140 Jackson, MS MS 0.8125 0.8675 27180 Jackson, TN TN 0.8310 0.8809 27260 Jacksonville, FL FL 0.8902 0.9234 27340 Jacksonville, NC NC 0.8476 0.8929 27500 Janesville, WI WI 0.9694 0.9789 27620 Jefferson City, MO MO 0.8605 0.9022 27740 Johnson City, TN TN 0.7919 0.8523 27780 Johnstown, PA PA 0.8521 0.8962 27860 Jonesboro, AR AR 0.7833 0.8460 27900 Joplin, MO MO 0.8448 0.8909 28020 Kalamazoo-Portage, MI MI 1.0313 1.0213 28100 Kankakee-Bradley, IL IL 1.0571 1.0388 28140 Kansas City, MO-KS KS 0.9558 0.9695 28140 Kansas City, MO-KS MO 0.9558 0.9695 28420 Kennewick-Pasco-Richland, WA WA 1.0107 1.0073 28660 Killeen-Temple-Fort Hood, TX TX 0.8775 0.9144 28700 Kingsport-Bristol-Bristol, TN-VA TN 0.7919 0.8523CMS-1498-P 934

CBSA Code Urban Area State Proposed Wage Index Proposed GAF 28700 Kingsport-Bristol-Bristol, TN-VA VA 0.8060 0.8627 28740 Kingston, NY NY 0.9152 0.9411 28940 Knoxville, TN TN 0.7919 0.8523 29020 Kokomo, IN IN 0.9010 0.9311 29100 La Crosse, WI-MN MN 0.9864 0.9907 29100 La Crosse, WI-MN WI 0.9864 0.9907 29140 Lafayette, IN IN 0.9253 0.9482 29180 Lafayette, LA LA 0.8473 0.8927 29340 Lake Charles, LA LA 0.8202 0.8731 29404 Lake County-Kenosha County, IL-WI IL 1.0736 1.0498 29404 Lake County-Kenosha County, IL-WI WI 1.0736 1.0498 29420 Lake Havasu City-Kingman, AZ AZ 1.0287 1.0196 29460 Lakeland-Winter Haven, FL FL 0.8628 0.9039 29540 Lancaster, PA PA 0.9760 0.9835 29620 Lansing-East Lansing, MI MI 1.0269 1.0183 29700 Laredo, TX TX 0.8312 0.8811 29740 Las Cruces, NM NM 0.9183 0.9433 29820 Las Vegas-Paradise, NV NV 1.1811 1.1207 29940 Lawrence, KS KS 0.8513 0.8956 30020 Lawton, OK OK 0.8616 0.9030 30140 Lebanon, PA PA 0.8521 0.8962 30300 Lewiston, ID-WA ID 0.9180 0.9431 30300 Lewiston, ID-WA WA 1.0107 1.0073 30340 Lewiston-Auburn, ME ME 0.8956 0.9273 30460 Lexington-Fayette, KY KY 0.8798 0.9160 30620 Lima, OH OH 0.9254 0.9483 30700 Lincoln, NE NE 0.9490 0.9648 30780 Little Rock-North Little Rock-Conway, AR AR 0.8675 0.9072 30860 Logan, UT-ID ID 0.8843 0.9192 30860 Logan, UT-ID UT 0.8843 0.9192 30980 Longview, TX TX 0.8593 0.9014 31020 Longview, WA WA 1.0667 1.0452 31084 Los Angeles-Long Beach -Glendale, CA CA 1.2002 1.1331 31140 Louisville-Jefferson County, KY-IN IN 0.8850 0.9197 31140 Louisville-Jefferson County, KY-IN KY 0.8848 0.9196 31180 Lubbock, TX TX 0.8940 0.9261 31340 Lynchburg, VA VA 0.8527 0.8966 31420 Macon, GA GA 0.9368 0.9563 31460 Madera-Chowchilla, CA CA 1.2002 1.1331 31540 Madison, WI WI 1.1316 1.0884 31700 Manchester-Nashua, NH NH 1.0054 1.0037 31740 Manhattan, KS KS 0.8027 0.8603CMS-1498-P 935

CBSA Code Urban Area State Proposed Wage Index Proposed GAF 31860 Mankato-North Mankato, MN MN 0.9270 0.9494 31900 Mansfield, OH OH 0.8917 0.9245 32420 Mayagüez, PR PR 0.3612 0.4979 32580 McAllen-Edinburg-Mission, TX TX 0.8888 0.9224 32780 Medford, OR OR 1.0089 1.0061 32820 Memphis, TN-MS-AR AR 0.9213 0.9454 32820 Memphis, TN-MS-AR MS 0.9213 0.9454 32820 Memphis, TN-MS-AR TN 0.9137 0.9401 32900 Merced, CA CA 1.2002 1.1331 33124 Miami-Miami Beach-Kendall, FL FL 1.0222 1.0151 33140 Michigan City-La Porte, IN IN 0.9399 0.9584 33260 Midland, TX TX 0.9554 0.9692 33340 Milwaukee-Waukesha-We st Allis, WI WI 1.0226 1.0154 33460 Minneapolis-St. Paul-Bloomington, MN-WI MN 1.1027 1.0692 33460 Minneapolis-St. Paul-Bloomington, MN-WI WI 1.1027 1.0692 33540 Missoula, MT MT 0.8811 0.9170 33660 Mobile, AL AL 0.7899 0.8509 33700 Modesto, CA CA 1.2002 1.1331 33740 Monroe, LA LA 0.8122 0.8672 33780 Monroe, MI MI 0.9666 0.9770 33860 Montgomery, AL AL 0.8506 0.8951 34060 Morgantown, WV WV 0.8266 0.8777 34100 Morristown, TN TN 0.7919 0.8523 34580 Mount Vernon-Anacortes, WA WA 1.0107 1.0073 34620 Muncie, IN IN 0.8399 0.8874 34740 Muskegon-Norton Shores, MI MI 0.9829 0.9883 34820 Myrtle Beach-North Myrtle Beach-Conway, SC SC 0.8681 0.9077 34900 Napa, CA CA 1.4144 1.2680 34940 Naples-Marco Island, FL FL 0.9809 0.9869 34980 Nashville-Davidson-Murfreesboro-Franklin, TN TN 0.9246 0.9477 35004 Nassau-Suffolk, NY NY 1.2591 1.1709 35084 Newark-Union, NJ-PA NJ 1.1099 1.0740 35084 Newark-Union, NJ-PA PA 1.1296 1.0870 35300 New Haven-Milford, CT CT 1.1654 1.1105 35380 New Orleans-Metairie -Kenner, LA LA 0.9005 0.9307 35644 New York-White Plains-Wayne, NY-NJ NJ 1.2884 1.1895 35644 New York-White Plains-Wayne, NY-NJ NY 1.3154 1.2065 35660 Niles-Benton Harbor, MI MI 0.8990 0.9297 35840 North Port-Bradenton-Sarasota-Venice, FL FL 0.9265 0.9491 35980 Norwich-New London, CT CT 1.1353 1.0908 36084 Oakland-Fremont-Hayward, CA CA 1.5536 1.3522 36100 Ocala, FL FL 0.8578 0.9003CMS-1498-P 936

CBSA Code Urban Area State Proposed Wage Index Proposed GAF 36140 Ocean City, NJ NJ 1.1069 1.0720 36220 Odessa, TX TX 0.9426 0.9603 36260 Ogden-Clearfield, UT UT 0.9354 0.9553 36420 Oklahoma City, OK OK 0.8900 0.9233 36500 Olympia, WA WA 1.1015 1.0684 36540 Omaha-Council Bluffs, NE-IA IA 0.9550 0.9690 36540 Omaha-Council Bluffs, NE-IA NE 0.9554 0.9692 36740 Orlando-Kissimmee-Sanford, FL FL 0.9178 0.9430 36780 Oshkosh-Neenah, WI WI 0.9514 0.9665 36980 Owensboro, KY KY 0.8532 0.8970 37100 Oxnard-Thousand Oaks-Ventura, CA CA 1.2078 1.1380 37340 Palm Bay-Melbourne-Titusville, FL FL 0.9332 0.9538 37380 Palm Coast, FL FL 0.8458 0.8916 37460 Panama City-Lynn Haven-Pana ma City Beach, FL FL 0.8458 0.8916 37620 Parkersburg-Marietta -Vienna, WV-OH OH 0.8555 0.8986 37620 Parkersburg-Marietta -Vienna, WV-OH WV 0.7536 0.8239 37700 Pascagoula, MS MS 0.8182 0.8716 37764 Peabody, MA MA 1.1021 1.0688 37860 Pensacola-Ferry Pass-Brent, FL FL 0.8458 0.8916 37900 Peoria, IL IL 0.9289 0.9507 37964 Philadelphia, PA PA 1.0780 1.0528 38060 Phoenix-Mesa-Gle ndale, AZ AZ 1.0519 1.0353 38220 Pine Bluff, AR AR 0.8311 0.8810 38300 Pittsburgh, PA PA 0.8579 0.9004 38340 Pittsfield, MA MA 1.0483 1.0328 38540 Pocatello, ID ID 0.9379 0.9570 38660 Ponce, PR PR 0.4278 0.5591 38860 Portland-South Portland- Biddeford, ME ME 0.9930 0.9952 38900 Portland-Vancouver-Hill sboro, OR-WA OR 1.1221 1.0821 38900 Portland-Vancouver-Hill sboro, OR-WA WA 1.1212 1.0815 38940 Port St. Lucie, FL FL 1.0762 1.0516 39100 Poughkeepsie-Newburgh-Middletown, NY NY 1.1418 1.0951 39140 Prescott, AZ AZ 1.2318 1.1535 39300 Providence-New Bedford-Fall River, RI-MA MA 1.0751 1.0508 39300 Providence-New Bedford-Fall River, RI-MA RI 1.0751 1.0508 39340 Provo-Orem, UT UT 0.9272 0.9496 39380 Pueblo, CO CO 0.9581 0.9711 39460 Punta Gorda, FL FL 0.9070 0.9353 39540 Racine, WI WI 1.0651 1.0441 39580 Raleigh-Cary, NC NC 0.9713 0.9803 39660 Rapid City, SD SD 1.0990 1.0668 39740 Reading, PA PA 0.8856 0.9202CMS-1498-P 937

CBSA Code Urban Area State Proposed Wage Index Proposed GAF 39820 Redding, CA CA 1.3277 1.2142 39900 Reno-Sparks, NV NV 1.0439 1.0299 40060 Richmond, VA VA 0.9536 0.9680 40140 Riverside-San Bernardi no-Ontario, CA CA 1.2002 1.1331 40220 Roanoke, VA VA 0.9020 0.9318 40340 Rochester, MN MN 1.0759 1.0514 40380 Rochester, NY NY 0.8708 0.9096 40420 Rockford, IL IL 1.0052 1.0036 40484 Rockingham County-Strafford County, NH NH 1.0218 1.0149 40580 Rocky Mount, NC NC 0.9123 0.9391 40660 Rome, GA GA 0.8760 0.9133 40900 Sacramento--Arden-Arcade--Roseville, CA CA 1.3217 1.2105 40980 Saginaw-Saginaw Township North, MI MI 0.9210 0.9452 41060 St. Cloud, MN MN 1.1654 1.1105 41100 St. George, UT UT 0.9311 0.9523 41140 St. Joseph, MO-KS KS 1.0377 1.0257 41140 St. Joseph, MO-KS MO 1.0377 1.0257 41180 St. Louis, MO-IL IL 0.9060 0.9346 41180 St. Louis, MO-IL MO 0.9060 0.9346 41420 Salem, OR OR 1.1119 1.0753 41500 Salinas, CA CA 1.5512 1.3507 41540 Salisbury, MD MD 0.9305 0.9519 41620 Salt Lake City, UT UT 0.9362 0.9559 41660 San Angelo, TX TX 0.8479 0.8932 41700 San Antonio-New Braunfels, TX TX 0.9071 0.9354 41740 San Diego-Carlsbad-San Marcos, CA CA 1.2002 1.1331 41780 Sandusky, OH OH 0.8610 0.9026 41884 San Francisco-San Mateo- Redwood City, CA CA 1.5036 1.3222 41900 San Germán-Cabo Rojo, PR PR 0.4570 0.5849 41940 San Jose-Sunnyvale-Santa Clara, CA CA 1.6044 1.3823 41980 San Juan-Caguas-Guaynabo, PR PR 0.4302 0.5612 42020 San Luis Obispo-Paso Robles, CA CA 1.2121 1.1408 42044 Santa Ana-Anaheim-Irvine, CA CA 1.2002 1.1331 42060 Santa Barbara-Santa Ma ria-Goleta, CA CA 1.2002 1.1331 42100 Santa Cruz-Watsonville, CA CA 1.6059 1.3832 42140 Santa Fe, NM NM 1.0788 1.0533 42220 Santa Rosa-Petaluma, CA CA 1.5455 1.3473 42340 Savannah, GA GA 0.8858 0.9203 42540 Scranton--Wilkes-Barre, PA PA 0.8521 0.8962 42644 Seattle-Bellevue-Eve rett, WA WA 1.1393 1.0934 42680 Sebastian-Vero Beach, FL FL 0.9276 0.9498 43100 Sheboygan, WI WI 0.9299 0.9514CMS-1498-P 938

CBSA Code Urban Area State Proposed Wage Index Proposed GAF 43300 Sherman-Denison, TX TX 0.8443 0.8906 43340 Shreveport-Bossier City, LA LA 0.8651 0.9055 43580 Sioux City, IA-NE-SD IA 0.8964 0.9278 43580 Sioux City, IA-NE-SD NE 0.8968 0.9281 43580 Sioux City, IA-NE-SD SD 0.8968 0.9281 43620 Sioux Falls, SD SD 0.9388 0.9577 43780 South Bend-Mishawaka, IN-MI IN 0.9889 0.9924 43780 South Bend-Mishawaka, IN-MI MI 0.9889 0.9924 43900 Spartanburg, SC SC 0.9086 0.9365 44060 Spokane, WA WA 1.0588 1.0399 44100 Springfield, IL IL 0.8948 0.9267 44140 Springfield, MA MA 1.0361 1.0246 44180 Springfield, MO MO 0.8413 0.8884 44220 Springfield, OH OH 0.8997 0.9302 44300 State College, PA PA 0.8640 0.9047 44600 Steubenville-Weirton, OH-WV OH 0.8555 0.8986 44600 Steubenville-Weirton, OH-WV WV 0.7536 0.8239 44700 Stockton, CA CA 1.2252 1.1492 44940 Sumter, SC SC 0.8438 0.8902 45060 Syracuse, NY NY 0.9710 0.9800 45104 Tacoma, WA WA 1.1264 1.0849 45220 Tallahassee, FL FL 0.8981 0.9290 45300 Tampa-St. Petersburg-Cl earwater, FL FL 0.9094 0.9370 45460 Terre Haute, IN IN 0.9254 0.9483 45500 Texarkana, TX-Texarkana, AR AR 0.7703 0.8363 45500 Texarkana, TX-Texarkana, AR TX 0.8018 0.8596 45780 Toledo, OH OH 0.9374 0.9567 45820 Topeka, KS KS 0.9138 0.9401 45940 Trenton-Ewing, NJ NJ 1.1069 1.0720 46060 Tucson, AZ AZ 0.9692 0.9788 46140 Tulsa, OK OK 0.8903 0.9235 46220 Tuscaloosa, AL AL 0.8225 0.8748 46340 Tyler, TX TX 0.8259 0.8772 46540 Utica-Rome, NY NY 0.8737 0.9117 46660 Valdosta, GA GA 0.8131 0.8679 46700 Vallejo-Fairfield, CA CA 1.4207 1.2718 47020 Victoria, TX TX 0.8038 0.8611 47220 Vineland-Millville-Bridgeton, NJ NJ 1.1069 1.0720 47260 Virginia Beach-Norfolk-Newport News, VA NC 0.8954 0.9271 47260 Virginia Beach-Norfolk-Newport News, VA VA 0.8953 0.9271 47300 Visalia-Porterv ille, CA CA 1.2002 1.1331 47380 Waco, TX TX 0.8648 0.9053CMS-1498-P 939

CBSA Code Urban Area State Proposed Wage Index Proposed GAF 47580 Warner Robins, GA GA 0.8470 0.8925 47644 Warren-Troy-Farmington-Hills, MI MI 0.9725 0.9811 47894 Washington-Arlington-Alexandria, DC-VA DC 1.0561 1.0381 47894 Washington-Arlington-Alex andria, DC-VA MD 1.0561 1.0381 47894 Washington-Arlington-Alexandria, DC-VA VA 1.0559 1.0380 47894 Washington-Arlington-Alexandria, DC-VA WV 1.0506 1.0344 47940 Waterloo-Cedar Falls, IA IA 0.8533 0.8971 48140 Wausau, WI WI 0.9581 0.9711 48300 Wenatchee-East Wenatchee, WA WA 1.0107 1.0073 48424 West Palm Beach-Boca Raton-Boynton Beach, FL FL 0.9824 0.9879 48540 Wheeling, WV-OH OH 0.8555 0.8986 48540 Wheeling, WV-OH WV 0.7536 0.8239 48620 Wichita, KS KS 0.8860 0.9205 48660 Wichita Falls, TX TX 0.9929 0.9951 48700 Williamsport, PA PA 0.8521 0.8962 48864 Wilmington, DE-MD-NJ DE 1.0802 1.0543 48864 Wilmington, DE-MD-NJ MD 1.0802 1.0543 48864 Wilmington, DE-MD-NJ NJ 1.1069 1.0720 48900 Wilmington, NC NC 0.9264 0.9490 49020 Winchester, VA-WV VA 0.9996 0.9997 49020 Winchester, VA-WV WV 0.9946 0.9963 49180 Winston-Salem, NC NC 0.8974 0.9285 49340 Worcester, MA MA 1.1210 1.0814 49420 Yakima, WA WA 1.0107 1.0073 49500 Yauco, PR PR 0.3544 0.4915 49620 York-Hanover, PA PA 0.9539 0.9682 49660 Youngstown-Warren-Boardman, OH-PA OH 0.8628 0.9039 49660 Youngstown-Warren-Boardman, OH-PA PA 0.8612 0.9027 49700 Yuba City, CA CA 1.2002 1.1331 49740 Yuma, AZ AZ 0.9455 0.9623CMS-1498-P 940

TABLE 4B.—PROPOSED WAGE INDE X AND CAPITAL GEOGRAPHIC ADJUSTMENT FACTOR (GAF) FOR ACUTE CARE HOSPITALS IN RURAL AREAS BY CBSA AND BY STATE--FY 2011

(Wage Index Includes Rural Floor Budget Neutrality Adjustment)

CBSA Code Rural Area State Proposed Wage Index Proposed GAF 01 Alabama AL 0.7448 0.8173 02 Alaska AK 1.1919 1.1277 03 Arizona AZ 0.9120 0.9389 04 Arkansas AR 0.7517 0.8225 05 California CA 1.2002 1.1331 06 Colorado CO 0.9581 0.9711 07 Connecticut CT 1.1251 1.0841 08 Delaware DE 1.0090 1.0062 10 Florida FL 0.8458 0.8916 11 Georgia GA 0.7782 0.8422 12 Hawaii HI 1.1292 1.0868 13 Idaho ID 0.7587 0.8277 14 Illinois IL 0.8380 0.8860 15 Indiana IN 0.8399 0.8874 16 Iowa IA 0.8533 0.8971 17 Kansas KS 0.8027 0.8603 18 Kentucky KY 0.7992 0.8577 19 Louisiana LA 0.7946 0.8543 20 Maine ME 0.8589 0.9011 21 Maryland MD 0.9305 0.9519 22 Massachusetts MA 0.9671 0.9774 23 Michigan MI 0.8605 0.9022 24 Minnesota MN 0.9146 0.9407 25 Mississippi MS 0.7738 0.8389 26 Missouri MO 0.8127 0.8676 27 Montana MT 0.8439 0.8903 28 Nebraska NE 0.8886 0.9223 29 Nevada NV 0.9555 0.9693 30 New Hampshire NH 1.0054 1.0037 31 New Jersey 1 NJ 1.1069 1.0720 32 New Mexico NM 0.9030 0.9325 33 New York NY 0.8420 0.8889 34 North Carolina NC 0.8476 0.8929 35 North Dakota ND 0.7018 0.7847 36 Ohio OH 0.8555 0.8986 37 Oklahoma OK 0.8052 0.8621CMS-1498-P 941

CBSA Code Rural Area State Proposed Wage Index Proposed GAF 38 Oregon OR 1.0089 1.0061 39 Pennsylvania PA 0.8521 0.8962 40 Puerto Rico 1 PR ------ ------ 41 Rhode Island 1 RI ------ ------ 42 South Carolina SC 0.8438 0.8902 43 South Dakota SD 0.8435 0.8900 44 Tennessee TN 0.7919 0.8523 45 Texas TX 0.8018 0.8596 46 Utah UT 0.8714 0.9100 47 Vermont VT 0.9465 0.9630 49 Virginia VA 0.8060 0.8627 50 Washington WA 1.0107 1.0073 51 West Virginia WV 0.7536 0.8239 52 Wisconsin WI 0.9019 0.9317 53 Wyoming WY 0.9392 0.9580

1 All counties in the State or Territory are classified as urban. The New Jersey floor is imputed as specified in §412.64 (h)(4) and discussed in the FY 2005 IPPS final rule (69 FR 49109) and in section III.B.2. of the preamble of the FY 2009 IPPS final rule (73 FR 48567).

TABLE 4C.—PROPOSED WAGE INDEX AND CAPITAL GEOGRAPHIC ADJUSTMENT FACTOR (GAF) FOR ACUTE CARE HOSPITALS THAT ARE RECLASSIFIED BY CBSA AND BY STATE--FY 2011

(Wage Index Includes Rural Floor Budget Neutrality Adjustment)

CBSA Code Area State Proposed Wage Index Proposed GAF 04 Arkansas AR 0.7517 0.8225 05 California CA 1.2002 1.1331 07 Connecticut CT 1.1251 1.0841 10 Florida FL 0.8458 0.8916 14 Illinois IL 0.8380 0.8860 14 Illinois MO 0.8380 0.8860 17 Kansas KS 0.8027 0.8603 18 Kentucky KY 0.7992 0.8577 22 Massachusetts MA 0.9671 0.9774 23 Michigan MI 0.8605 0.9022 24 Minnesota IA 0.9142 0.9404 26 Missouri AR 0.8127 0.8676 26 Missouri MO 0.8127 0.8676CMS-1498-P 942

CBSA Code Area State Proposed Wage Index Proposed GAF 28 Nebraska KS 0.8886 0.9223 33 New York NH 1.0054 1.0037 33 New York NY 0.8420 0.8889 34 North Carolina NC 0.8476 0.8929 34 North Carolina TN 0.8407 0.8880 36 Ohio OH 0.8555 0.8986 37 Oklahoma OK 0.8052 0.8621 38 Oregon OR 1.0089 1.0061 39 Pennsylvania PA 0.8521 0.8962 44 Tennessee KY 0.7992 0.8577 45 Texas LA 0.8022 0.8599 45 Texas OK 0.8052 0.8621 45 Texas TX 0.8018 0.8596 47 Vermont NY 0.9328 0.9535 49 Virginia KY 0.8060 0.8627 49 Virginia VA 0.8060 0.8627 49 Virginia WV 0.8020 0.8598 50 Washington WA 1.0107 1.0073 10500 Albany, GA AL 0.8539 0.8975 10500 Albany, GA GA 0.8547 0.8981 10580 Albany-Schenectady-Troy, NY NY 0.8708 0.9096 10740 Albuquerque, NM NM 0.9505 0.9658 10780 Alexandria, LA LA 0.8164 0.8703 10900 Allentown-Be thlehem-Easton, PA-NJ PA 0.9418 0.9598 11100 Amarillo, TX KS 0.8438 0.8902 11100 Amarillo, TX TX 0.8434 0.8899 11180 Ames, IA IA 0.9273 0.9496 11260 Anchorage, AK AK 1.1919 1.1277 11300 Anderson, IN IN 0.8736 0.9116 11460 Ann Arbor, MI MI 0.9849 0.9896 12020 Athens-Clarke County, GA GA 0.9348 0.9549 12060 Atlanta-Sandy Spring s-Marietta, GA AL 0.9563 0.9699 12060 Atlanta-Sandy Spring s-Marietta, GA GA 0.9572 0.9705 12260 Augusta-Richmond County, GA-SC SC 0.9571 0.9704 12420 Austin-Round Rock-San Marcos, TX TX 0.9523 0.9671 12620 Bangor, ME ME 0.9695 0.9790 12940 Baton Rouge, LA MS 0.8580 0.9004 12980 Battle Creek, MI MI 0.9759 0.9834 13020 Bay City, MI MI 0.8891 0.9227 13644 Bethesda-Rockville-Frederick, MD DC 1.0573 1.0389 13644 Bethesda-Rockville-Frederick, MD PA 1.0539 1.0366 13644 Bethesda-Rockville-Frederick, MD VA 1.0571 1.0388CMS-1498-P 943

CBSA Code Area State Proposed Wage Index Proposed GAF 13780 Binghamton, NY PA 0.8762 0.9135 13820 Birmingham-Hoover, AL AL 0.8427 0.8894 13900 Bismarck, ND ND 0.7451 0.8175 13980 Blacksburg-Christiansburg-Radford, VA WV 0.7746 0.8395 14260 Boise City-Nampa, ID ID 0.9068 0.9352 14484 Boston-Quincy, MA MA 1.1613 1.1078 14484 Boston-Quincy, MA RI 1.1613 1.1078 14540 Bowling Green, KY KY 0.8347 0.8836 14740 Bremerton-Silverdale, WA WA 1.0399 1.0272 15260 Brunswick, GA GA 0.9352 0.9552 15380 Buffalo-Niagara Falls, NY NY 0.9628 0.9744 15540 Burlington-South Burlington, VT NY 1.0071 1.0049 15540 Burlington-South Burlington, VT VT 1.0071 1.0049 15764 Cambridge-Newton-Framingham, MA NH 1.0990 1.0668 15940 Canton-Massillon, OH OH 0.8612 0.9027 16020 Cape Girardeau-Jackson, MO-IL IL 0.8380 0.8860 16020 Cape Girardeau-Jackson, MO-IL KY 0.8361 0.8846 16020 Cape Girardeau-Jackson, MO-IL MO 0.8363 0.8848 16180 Carson City, NV NV 0.9960 0.9973 16580 Champaign-Urbana, IL IL 0.9154 0.9413 16620 Charleston, WV WV 0.8093 0.8651 16700 Charleston-North Charlest on-Summerville, SC SC 0.9295 0.9512 16740 Charlotte-Gastonia-Rock Hill, NC-SC NC 0.9162 0.9418 16820 Charlottesville, VA VA 0.9243 0.9475 16860 Chattanooga, TN-GA AL 0.8594 0.9014 16860 Chattanooga, TN-GA GA 0.8602 0.9020 16860 Chattanooga, TN-GA TN 0.8531 0.8969 16974 Chicago-Joliet-Naperville, IL IL 1.0370 1.0252 16974 Chicago-Joliet-Naperville, IL IN 1.0370 1.0252 16974 Chicago-Joliet-Naperville, IL WI 1.0370 1.0252 17140 Cincinnati-Middletown, OH-KY-IN IN 0.9637 0.9750 17140 Cincinnati-Middletown, OH-KY-IN KY 0.9634 0.9748 17140 Cincinnati-Middletown, OH-KY-IN OH 0.9624 0.9741 17300 Clarksville, TN-KY KY 0.7992 0.8577 17460 Cleveland-Elyria-Mentor, OH OH 0.9082 0.9362 17780 College Station-Bryan, TX TX 0.9244 0.9476 17860 Columbia, MO MO 0.8261 0.8774 17900 Columbia, SC SC 0.8695 0.9087 17980 Columbus, GA-AL AL 0.8613 0.9028 17980 Columbus, GA-AL GA 0.8621 0.9034 18140 Columbus, OH OH 1.0025 1.0017 18580 Corpus Christi, TX TX 0.8576 0.9001CMS-1498-P 944

CBSA Code Area State Proposed Wage Index Proposed GAF 18700 Corvallis, OR OR 1.0149 1.0102 18880 Crestview-Fort Walton Beach-Destin, FL FL 0.8565 0.8994 19124 Dallas-Plano-Irving, TX TX 0.9584 0.9713 19340 Davenport-Moline-Rock Island, IA-IL IL 0.8658 0.9060 19340 Davenport-Moline-Rock Island, IA-IL IA 0.8654 0.9057 19380 Dayton, OH OH 0.9172 0.9425 19460 Decatur, AL AL 0.7583 0.8274 19740 Denver-Aurora-Broomfield, CO CO 1.0303 1.0207 19780 Des Moines-West Des Moines, IA IA 0.9525 0.9672 19804 Detroit-Livonia-Dearborn, MI MI 0.9776 0.9846 20100 Dover, DE DE 1.0090 1.0062 20500 Durham-Chapel Hill, NC NC 0.9662 0.9767 20500 Durham-Chapel Hill, NC VA 0.9661 0.9767 20764 Edison-New Brunswick, NJ NJ 1.1069 1.0720 21060 Elizabethtown, KY KY 0.8389 0.8867 21140 Elkhart-Goshen, IN IN 0.9457 0.9625 21500 Erie, PA NY 0.8420 0.8889 21500 Erie, PA PA 0.8521 0.8962 21660 Eugene-Springfield, OR OR 1.1032 1.0696 22180 Fayetteville, NC NC 0.9238 0.9472 22220 Fayetteville-Springdale-Rogers, AR-MO OK 0.8646 0.9052 22420 Flint, MI MI 1.0134 1.0092 22520 Florence-Muscle Shoals, AL MS 0.8035 0.8609 22540 Fond du Lac, WI WI 0.9178 0.9430 22660 Fort Collins-Loveland, CO CO 0.9581 0.9711

22744 Fort Lauderdale-Pompano Beach-Deerfield Beach, FL FL 1.0364 1.0248 23060 Fort Wayne, IN IN 0.9245 0.9477 23104 Fort Worth-Arlington, TX TX 0.9427 0.9604 23540 Gainesville, FL FL 0.9406 0.9589 23844 Gary, IN IN 0.9069 0.9353 24300 Grand Junction, CO CO 1.0051 1.0035 24340 Grand Rapids-Wyoming, MI MI 0.9315 0.9526 24500 Great Falls, MT MT 0.8439 0.8903 24540 Greeley, CO NE 0.9418 0.9598 24540 Greeley, CO WY 0.9418 0.9598 24580 Green Bay, WI MI 0.9249 0.9479 24580 Green Bay, WI WI 0.9249 0.9479 24660 Greensboro-High Point, NC NC 0.8996 0.9301 24780 Greenville, NC NC 0.9192 0.9439 24860 Greenville-Mauldin-Easley, SC NC 0.9127 0.9394 24860 Greenville-Mauldin-Easley, SC SC 0.9128 0.9394CMS-1498-P 945

CBSA Code Area State Proposed Wage Index Proposed GAF 25060 Gulfport-Biloxi, MS MS 0.8350 0.8838 25420 Harrisburg-Carlis le, PA PA 0.9172 0.9425 25540 Hartford-West Hartford-East Hartford, CT CT 1.1251 1.0841 25540 Hartford-West Hartford-East Hartford, CT MA 1.1117 1.0752 25860 Hickory-Lenoir-Morganton, NC NC 0.8537 0.8973 26300 Hot Springs, AR AR 0.9071 0.9354 26420 Houston-Sugar Land-Baytown, TX TX 0.9946 0.9963 26580 Huntington-Ashland, WV-KY-OH KY 0.8767 0.9138 26580 Huntington-Ashland, WV-KY-OH NC 0.8768 0.9139 26580 Huntington-Ashland, WV-KY-OH OH 0.8757 0.9131 26580 Huntington-Ashland, WV-KY-OH WV 0.8723 0.9107 26620 Huntsville, AL AL 0.8646 0.9052 26620 Huntsville, AL TN 0.8582 0.9006 26820 Idaho Falls, ID ID 0.9676 0.9777 26900 Indianapolis-Carmel, IN IN 0.9555 0.9693 26980 Iowa City, IA IA 0.9422 0.9600 27060 Ithaca, NY NY 0.9187 0.9436 27140 Jackson, MS MS 0.8125 0.8675 27180 Jackson, TN MS 0.8379 0.8859 27620 Jefferson City, MO MO 0.8605 0.9022 27860 Jonesboro, AR AR 0.7833 0.8460 27900 Joplin, MO KS 0.8448 0.8909 27900 Joplin, MO OK 0.8446 0.8908 28020 Kalamazoo-Portage, MI MI 0.9979 0.9986 28140 Kansas City, MO-KS KS 0.9558 0.9695 28140 Kansas City, MO-KS MO 0.9558 0.9695 28420 Kennewick-Pasco-Richland, WA ID 0.9659 0.9765 28700 Kingsport-Bristol-Bristol, TN-VA KY 0.7992 0.8577 28700 Kingsport-Bristol-Bristol, TN-VA TN 0.7919 0.8523 28940 Knoxville, TN KY 0.7992 0.8577 28940 Knoxville, TN TN 0.7919 0.8523 29180 Lafayette, LA LA 0.8473 0.8927 29404 Lake County-Kenosha County, IL-WI IL 1.0515 1.0350 29460 Lakeland-Winter Haven, FL FL 0.8628 0.9039 29540 Lancaster, PA PA 0.9760 0.9835 29620 Lansing-East Lansing, MI MI 1.0144 1.0098 29700 Laredo, TX TX 0.8312 0.8811 29740 Las Cruces, NM NM 0.9183 0.9433 29820 Las Vegas-Paradise, NV AZ 1.1811 1.1207 30020 Lawton, OK OK 0.8306 0.8806 30460 Lexington-Fayette, KY KY 0.8798 0.9160 30620 Lima, OH OH 0.9254 0.9483CMS-1498-P 946

CBSA Code Area State Proposed Wage Index Proposed GAF 30700 Lincoln, NE NE 0.9490 0.9648 30780 Little Rock-North Little Rock-Conway, AR AR 0.8490 0.8940 30980 Longview, TX TX 0.8593 0.9014 31084 Los Angeles-Long Beach -Glendale, CA CA 1.2002 1.1331 31140 Louisville-Jefferson County, KY-IN KY 0.8848 0.9196 31420 Macon, GA GA 0.8970 0.9283 31540 Madison, WI WI 1.1096 1.0738 31900 Mansfield, OH OH 0.8917 0.9245 32780 Medford, OR OR 1.0089 1.0061 32820 Memphis, TN-MS-AR AR 0.8981 0.9290 32820 Memphis, TN-MS-AR MS 0.8981 0.9290 32820 Memphis, TN-MS-AR TN 0.8907 0.9238 33124 Miami-Miami Beach-Kendall, FL FL 1.0222 1.0151 33260 Midland, TX TX 0.9554 0.9692 33340 Milwaukee-Waukesha-We st Allis, WI WI 1.0226 1.0154 33460 Minneapolis-St. Paul-Bloomington, MN-WI MN 1.1027 1.0692 33460 Minneapolis-St. Paul-Bloomington, MN-WI WI 1.1027 1.0692 33540 Missoula, MT MT 0.8618 0.9032 33660 Mobile, AL AL 0.7899 0.8509 33700 Modesto, CA CA 1.2002 1.1331 33740 Monroe, LA AR 0.8122 0.8672 33740 Monroe, LA LA 0.8122 0.8672 33780 Monroe, MI OH 0.9653 0.9761 33860 Montgomery, AL AL 0.8506 0.8951 34060 Morgantown, WV WV 0.8266 0.8777 34740 Muskegon-Norton Shores, MI MI 0.9386 0.9575 34820 Myrtle Beach-North Myrtle Beach-Conway, SC NC 0.8680 0.9076 34980 Nashville-Davidson-Murfreesboro-Franklin, TN KY 0.9320 0.9529 34980 Nashville-Davidson-Murfreesboro-Franklin, TN TN 0.9246 0.9477 35004 Nassau-Suffolk, NY CT 1.2234 1.1481 35084 Newark-Union, NJ-PA NJ 1.1099 1.0740 35084 Newark-Union, NJ-PA NY 1.1332 1.0894 35084 Newark-Union, NJ-PA PA 1.1296 1.0870 35300 New Haven-Milford, CT CT 1.1654 1.1105 35380 New Orleans-Metairie -Kenner, LA LA 0.9005 0.9307 35644 New York-White Plains-Wayne, NY-NJ CT 1.2817 1.1853 35644 New York-White Plains-Wayne, NY-NJ NJ 1.2619 1.1727 35644 New York-White Plains-Wayne, NY-NJ NY 1.2884 1.1895 35840 North Port-Bradenton-Sarasota-Venice, FL FL 0.9265 0.9491 35980 Norwich-New London, CT RI 1.1412 1.0947 36084 Oakland-Fremont-Hayward, CA CA 1.5428 1.3457 36140 Ocean City, NJ DE 1.0903 1.0610CMS-1498-P 947

CBSA Code Area State Proposed Wage Index Proposed GAF 36220 Odessa, TX NM 0.9315 0.9526 36220 Odessa, TX TX 0.9311 0.9523 36260 Ogden-Clearfield, UT UT 0.9354 0.9553 36420 Oklahoma City, OK OK 0.8900 0.9233 36500 Olympia, WA WA 1.1015 1.0684 36740 Orlando-Kissimmee-Sanford, FL FL 0.9178 0.9430

37460 Panama City-Lynn Have n-Panama City Beach, FL AL 0.8002 0.8584 37764 Peabody, MA NH 1.1021 1.0688 37860 Pensacola-Ferry Pass-Brent, FL AL 0.8144 0.8688 37900 Peoria, IL IL 0.9179 0.9430 37964 Philadelphia, PA NJ 1.1069 1.0720 37964 Philadelphia, PA PA 1.0663 1.0449 38060 Phoenix-Mesa-Gle ndale, AZ AZ 1.0519 1.0353 38220 Pine Bluff, AR MS 0.8311 0.8810 38300 Pittsburgh, PA OH 0.8555 0.8986 38300 Pittsburgh, PA PA 0.8521 0.8962 38300 Pittsburgh, PA WV 0.8441 0.8904 38340 Pittsfield, MA NY 1.0158 1.0108 38340 Pittsfield, MA VT 1.0158 1.0108 38860 Portland-South Portland- Biddeford, ME ME 0.9509 0.9661 38900 Portland-Vancouver-Hill sboro, OR-WA OR 1.1221 1.0821 38900 Portland-Vancouver-Hill sboro, OR-WA WA 1.1212 1.0815 38940 Port St. Lucie, FL FL 1.0283 1.0193 39100 Poughkeepsie-Newburgh-Middletown, NY NY 1.1246 1.0837 39340 Provo-Orem, UT UT 0.9272 0.9496 39580 Raleigh-Cary, NC NC 0.9713 0.9803 39740 Reading, PA PA 0.8856 0.9202 39820 Redding, CA CA 1.3277 1.2142 39900 Reno-Sparks, NV NV 1.0439 1.0299 40060 Richmond, VA VA 0.9536 0.9680 40140 Riverside-San Bernardi no-Ontario, CA AZ 1.1429 1.0958 40220 Roanoke, VA VA 0.8864 0.9207 40220 Roanoke, VA WV 0.8820 0.9176 40380 Rochester, NY NY 0.8708 0.9096 40420 Rockford, IL IL 0.9874 0.9914 40484 Rockingham County-Strafford County, NH ME 1.0218 1.0149 40900 Sacramento--Arden-Arcade--Roseville, CA CA 1.3217 1.2105 40980 Saginaw-Saginaw Township North, MI MI 0.9102 0.9376 41100 St. George, UT UT 0.9311 0.9523 41180 St. Louis, MO-IL IL 0.8955 0.9272 41180 St. Louis, MO-IL MO 0.8955 0.9272CMS-1498-P 948

CBSA Code Area State Proposed Wage Index Proposed GAF 41620 Salt Lake City, UT UT 0.9362 0.9559 41700 San Antonio-New Braunfels, TX TX 0.9071 0.9354 41940 San Jose-Sunnyvale-Santa Clara, CA CA 1.5855 1.3711 42044 Santa Ana-Anaheim-Irvine, CA CA 1.2002 1.1331 42100 Santa Cruz-Watsonville, CA CA 1.6059 1.3832 42140 Santa Fe, NM NM 1.0400 1.0272 42220 Santa Rosa-Petaluma, CA CA 1.5173 1.3304 42340 Savannah, GA GA 0.8858 0.9203 42340 Savannah, GA SC 0.8858 0.9203 42644 Seattle-Bellevue-Eve rett, WA WA 1.1272 1.0855 43300 Sherman-Denison, TX OK 0.8445 0.8907 43340 Shreveport-Bossier City, LA LA 0.8651 0.9055 43580 Sioux City, IA-NE-SD NE 0.8968 0.9281 43620 Sioux Falls, SD SD 0.9388 0.9577 43780 South Bend-Mishawaka, IN-MI IN 0.9488 0.9646 43900 Spartanburg, SC SC 0.8970 0.9283 44060 Spokane, WA ID 1.0384 1.0261 44100 Springfield, IL IL 0.8948 0.9267 44140 Springfield, MA NH 1.0258 1.0176 44180 Springfield, MO AR 0.8413 0.8884 44180 Springfield, MO MO 0.8413 0.8884 44940 Sumter, SC SC 0.8438 0.8902 45060 Syracuse, NY NY 0.9710 0.9800 45220 Tallahassee, FL GA 0.8795 0.9158 45300 Tampa-St. Petersburg-Cl earwater, FL FL 0.9094 0.9370 45460 Terre Haute, IN IN 0.8757 0.9131 45780 Toledo, OH OH 0.9246 0.9477 45820 Topeka, KS KS 0.8948 0.9267 46140 Tulsa, OK OK 0.8798 0.9160 46220 Tuscaloosa, AL AL 0.8015 0.8594 46220 Tuscaloosa, AL MS 0.8022 0.8599 46340 Tyler, TX TX 0.8259 0.8772 46540 Utica-Rome, NY NY 0.8737 0.9117 46660 Valdosta, GA GA 0.7840 0.8465 46700 Vallejo-Fairfield, CA CA 1.4010 1.2597 47260 Virginia Beach-Norfolk-Newport News, VA NC 0.8954 0.9271 47580 Warner Robins, GA GA 0.8470 0.8925 47894 Washington-Arlington-Alexandria, DC-VA VA 1.0559 1.0380 48140 Wausau, WI WI 0.9113 0.9384 48620 Wichita, KS KS 0.8756 0.9130 48700 Williamsport, PA PA 0.8521 0.8962 48864 Wilmington, DE-MD-NJ DE 1.0690 1.0468CMS-1498-P 949

CBSA Code Area State Proposed Wage Index Proposed GAF 48900 Wilmington, NC SC 0.9265 0.9491 49180 Winston-Salem, NC NC 0.8974 0.9285 49180 Winston-Salem, NC VA 0.8973 0.9285 49660 Youngstown-Warren-Boardman, OH-PA OH 0.8555 0.8986 49660 Youngstown-Warren-Boardman, OH-PA PA 0.8521 0.8962CMS-1498-P 950

TABLE 4D-1.—PROPOSED RURAL FLOOR BUDGET NEUTRALITY FACTORS FOR ACUTE CARE HOSPITALS—FY 2011

[The rural floor budget neutra lity adjustment factor is a 100 percent State-level factor.]

State Proposed Rural Floor Budget Neutrality Adjustment Factor Alabama 0.99910 Alaska 0.94328 Arizona 1.00000 Arkansas 1.00000 California 0.97557 Colorado 0.98680 Connecticut 0.99483 Delaware 1.00000 Washington, D.C. 1.00000 Florida 0.99847 Georgia 1.00000 Hawaii 1.00000 Idaho 1.00000 Illinois 1.00000 Indiana 1.00000 Iowa 0.99954 Kansas 1.00000 Kentucky 0.99973 Louisiana 1.00000 Maine 1.00000 Maryland* 1.00000 Massachusetts 1.00000 Michigan 1.00000 Minnesota 1.00000 Mississippi 1.00000 Missouri 1.00000 Montana 0.99988 Nebraska 1.00000 Nevada 1.00000 New Hampshire 1.00000 New Jersey ** 0.97946 New Mexico 1.00000 New York 1.00000 North Carolina 0.99989 North Dakota 1.00000 Ohio 0.99864 Oklahoma 0.99975CMS-1498-P 951

State Proposed Rural Floor Budget Neutrality Adjustment Factor Oregon 0.99974 Pennsylvania 0.99681 Puerto Rico 1.00000 Rhode Island 1.00000 South Carolina 1.00000 South Dakota 1.00000 Tennessee 0.99171 Texas 0.99956 Utah 1.00000 Vermont 1.00000 Virginia 0.99977 Washington 0.99891 West Virginia 0.99479 Wisconsin 1.00000 Wyoming 1.00000

* Maryland hospitals, under section 1814(b)(3) of the Act, are waived from the IPPS ratesetting. Therefore, the rural floor budget neutrality adjustment does not apply. ** The rural floor budget neutrality factor for New Jersey is based on an imputed floor (see TABLE 4B).CMS-1498-P 952

TABLE 4D-2.--URBAN AREAS WITH ACU TE CARE HOSPITALS RECEIVING THE PROPOSED STATEWIDE RURAL FLOOR OR IMPUTED FLOOR WAGE INDEX--FY 2011 [*Only hospitals that are geographically located in the specified State receive the State’s rural or imputed floor wage index.]

(Wage Index Includes Rural Floor Budget Neutrality Adjustment)

CBSA Code Urban Area State* Proposed Rural or Imputed

Floor Wage Index 10900 Allentown-Bethlehe m-Easton, PA-NJ NJ 1.1069 11260 Anchorage, AK AK 1.1919 12100 Atlantic City-Hammonton, NJ NJ 1.1069 12540 Bakersfield-Delano, CA CA 1.2002 15804 Camden, NJ NJ 1.1069 16940 Cheyenne, WY WY 0.9392 17020 Chico, CA CA 1.2002 17300 Clarksville, TN-KY KY 0.7992 17300 Clarksville, TN-KY TN 0.7919 17420 Cleveland, TN TN 0.7919 17820 Colorado Springs, CO CO 0.9581 19060 Cumberland, MD-WV MD 0.9305 19500 Decatur, IL IL 0.8380 20100 Dover, DE DE 1.0090 20764 Edison-New Brunswick, NJ NJ 1.1069 20940 El Centro, CA CA 1.2002 21500 Erie, PA PA 0.8521 21780 Evansville, IN-KY IN 0.8399 21820 Fairbanks, AK AK 1.1919 22020 Fargo, ND-MN MN 0.9146 22140 Farmington, NM NM 0.9030 22660 Fort Collins-Loveland, CO CO 0.9581 22900 Fort Smith, AR-OK OK 0.8052 23420 Fresno, CA CA 1.2002 23460 Gadsden, AL AL 0.7448 24220 Grand Forks, ND-MN MN 0.9146 24500 Great Falls, MT MT 0.8439 24540 Greeley, CO CO 0.9581 25260 Hanford-Corcoran, CA CA 1.2002 25540 Hartford-West Hartford-East Hartford, CT CT 1.1251 27340 Jacksonville, NC NC 0.8476 27740 Johnson City, TN TN 0.7919CMS-1498-P 953

CBSA Code Urban Area State* Proposed Rural or Imputed

Floor Wage Index 27780 Johnstown, PA PA 0.8521 28420 Kennewick-Pasco-Richland, WA WA 1.0107 28700 Kingsport-Bristol-Bristol, TN-VA TN 0.7919 28700 Kingsport-Bristol-Bristol, TN-VA VA 0.8060 28940 Knoxville, TN TN 0.7919 30140 Lebanon, PA PA 0.8521 30300 Lewiston, ID-WA WA 1.0107 31084 Los Angeles-Long Be ach-Glendale, CA CA 1.2002 31460 Madera-Chowchilla, CA CA 1.2002 31700 Manchester-Nashua, NH NH 1.0054 31740 Manhattan, KS KS 0.8027 32780 Medford, OR OR 1.0089 32900 Merced, CA CA 1.2002 33700 Modesto, CA CA 1.2002 34100 Morristown, TN TN 0.7919 34580 Mount Vernon-Anacortes, WA WA 1.0107 34620 Muncie, IN IN 0.8399 36140 Ocean City, NJ NJ 1.1069 37380 Palm Coast, FL FL 0.8458 37460 Panama City-Lynn Haven-Pa nama City Beach, FL FL 0.8458 37620 Parkersburg-Marie tta-Vienna, WV-OH OH 0.8555 37620 Parkersburg-Marietta -Vienna, WV-OH WV 0.7536 37860 Pensacola-Ferry Pass-Brent, FL FL 0.8458 39380 Pueblo, CO CO 0.9581 40140 Riverside-San Bernar dino-Ontario, CA CA 1.2002 41540 Salisbury, MD MD 0.9305 41740 San Diego-Carlsbad-San Marcos, CA CA 1.2002 42044 Santa Ana-Anaheim-Irvine, CA CA 1.2002 42060 Santa Barbara-Santa Maria-Goleta, CA CA 1.2002 42540 Scranton--Wilkes-Barre, PA PA 0.8521 44600 Steubenville-Weirton, OH-WV OH 0.8555 44600 Steubenville-Weirton, OH-WV WV 0.7536 44940 Sumter, SC SC 0.8438 45500 Texarkana, TX-Texarkana, AR TX 0.8018 45940 Trenton-Ewing, NJ NJ 1.1069 47220 Vineland-Millville-Bridgeton, NJ NJ 1.1069 47300 Visalia-Porterv ille, CA CA 1.2002 47940 Waterloo-Cedar Falls, IA IA 0.8533 48300 Wenatchee-East Wenatchee, WA WA 1.0107CMS-1498-P 954

CBSA Code Urban Area State* Proposed Rural or Imputed

Floor Wage Index 48540 Wheeling, WV-OH OH 0.8555 48540 Wheeling, WV-OH WV 0.7536 48700 Williamsport, PA PA 0.8521 48864 Wilmington, DE-MD-NJ NJ 1.1069 49420 Yakima, WA WA 1.0107 49700 Yuba City, CA CA 1.2002CMS-1498-P 955

TABLE 4E.—URBAN CBSAs AND CONSTI TUENT COUNTIES FOR ACUTE CARE HOSPITALS—FY 2011

CBSA Code Urban Area (Constituent Counties) 10180 Abilene, TX Callahan County, TX Jones County, TX Taylor County, TX 10380 Aguadilla-Isabela-San Sebastián, PR Aguada Municipio, PR Aguadilla Municipio, PR Añasco Municipio, PR Isabela Municipio, PR Lares Municipio, PR Moca Municipio, PR Rincón Municipio, PR San Sebastián Municipio, PR 10420 Akron, OH Portage County, OH Summit County, OH 10500 Albany, GA Baker County, GA Dougherty County, GA Lee County, GA Terrell County, GA Worth County, GA 10580 Albany-Schenectady-Troy, NY Albany County, NY Rensselaer County, NY Saratoga County, NY Schenectady County, NY Schoharie County, NY 10740 Albuquerque, NM Bernalillo County, NM Sandoval County, NM Torrance County, NM Valencia County, NM 10780 Alexandria, LA Grant Parish, LA Rapides Parish, LA 10900 Allentown-Bethlehe m-Easton, PA-NJ Warren County, NJ Carbon County, PA Lehigh County, PA Northampton County, PACMS-1498-P 956

CBSA Code Urban Area (Constituent Counties) 11020 Altoona, PA Blair County, PA 11100 Amarillo, TX Armstrong County, TX Carson County, TX Potter County, TX Randall County, TX 11180 Ames, IA Story County, IA 11260 Anchorage, AK Anchorage Municipality, AK Matanuska-Susitna Borough, AK 11300 Anderson, IN Madison County, IN 11340 Anderson, SC Anderson County, SC 11460 Ann Arbor, MI Washtenaw County, MI 11500 Anniston-Oxford, AL Calhoun County, AL 11540 Appleton, WI Calumet County, WI Outagamie County, WI 11700 Asheville, NC Buncombe County, NC Haywood County, NC Henderson County, NC Madison County, NC 12020 Athens-Clarke County, GA Clarke County, GA Madison County, GA Oconee County, GA Oglethorpe County, GACMS-1498-P 957

CBSA Code Urban Area (Constituent Counties) 12060 Atlanta-Sandy Spri ngs-Marietta, GA Barrow County, GA Bartow County, GA Butts County, GA Carroll County, GA Cherokee County, GA Clayton County, GA Cobb County, GA Coweta County, GA Dawson County, GA DeKalb County, GA Douglas County, GA Fayette County, GA Forsyth County, GA Fulton County, GA Gwinnett County, GA Haralson County, GA Heard County, GA Henry County, GA Jasper County, GA Lamar County, GA Meriwether County, GA Newton County, GA Paulding County, GA Pickens County, GA Pike County, GA Rockdale County, GA Spalding County, GA Walton County, GA

12100 Atlantic City-Hammonton, NJ Atlantic County, NJ Hammonton County, NJ 12220 Auburn-Opelika, AL Lee County, AL 12260 Augusta-Richmond County, GA-SC Burke County, GA Columbia County, GA McDuffie County, GA Richmond County, GA Aiken County, SC Edgefield County, SCCMS-1498-P 958

CBSA Code Urban Area (Constituent Counties) 12420 Austin-Round Rock-San Marcos, TX Bastrop County, TX Caldwell County, TX Hays County, TX Travis County, TX Williamson County, TX 12540 Bakersfield-Delano, CA Kern County, CA 12580 Baltimore-Towson, MD Anne Arundel County, MD Baltimore County, MD Carroll County, MD Harford County, MD Howard County, MD Queen Anne's County, MD Baltimore City, MD 12620 Bangor, ME Penobscot County, ME 12700 Barnstable Town, MA Barnstable County, MA 12940 Baton Rouge, LA Ascension Parish, LA East Baton Rouge Parish, LA East Feliciana Parish, LA Iberville Parish, LA Livingston Parish, LA Pointe Coupee Parish, LA St. Helena Parish, LA West Baton Rouge Parish, LA West Feliciana Parish, LA 12980 Battle Creek, MI Calhoun County, MI 13020 Bay City, MI Bay County, MI 13140 Beaumont-Port Arthur, TX Hardin County, TX Jefferson County, TX Orange County, TX 13380 Bellingham, WA Whatcom County, WA 13460 Bend, OR Deschutes County, ORCMS-1498-P 959

CBSA Code Urban Area (Constituent Counties) 13644 Bethesda-Rockville-Frederick, MD Frederick County, MD Montgomery County, MD 13740 Billings, MT Carbon County, MT Yellowstone County, MT 13780 Binghamton, NY Broome County, NY Tioga County, NY 13820 Birmingham-Hoover, AL Bibb County, AL Blount County, AL Chilton County, AL Jefferson County, AL St. Clair County, AL Shelby County, AL Walker County, AL 13900 Bismarck, ND Burleigh County, ND Morton County, ND 13980 Blacksburg-Christiansburg-Radford, VA Giles County, VA Montgomery County, VA Pulaski County, VA Radford City, VA 14020 Bloomington, IN Greene County, IN Monroe County, IN Owen County, IN 14060 Bloomington-Normal, IL McLean County, IL 14260 Boise City-Nampa, ID Ada County, ID Boise County, ID Canyon County, ID Gem County, ID Owyhee County, ID 14484 Boston-Quincy, MA Norfolk County, MA Plymouth County, MA Suffolk County, MA 14500 Boulder, CO Boulder County, COCMS-1498-P 960

CBSA Code Urban Area (Constituent Counties) 14540 Bowling Green, KY Edmonson County, KY Warren County, KY 14740 Bremerton-Silverdale, WA Kitsap County, WA 14860 Bridgeport-Stamford-Norwalk, CT Fairfield County, CT 15180 Brownsville-Harlingen, TX Cameron County, TX 15260 Brunswick, GA Brantley County, GA Glynn County, GA McIntosh County, GA 15380 Buffalo-Niagara Falls, NY Erie County, NY Niagara County, NY 15500 Burlington, NC Alamance County, NC 15540 Burlington-South Burlington, VT Chittenden County, VT Franklin County, VT Grand Isle County, VT 15764 Cambridge-Newton-Framingham, MA Middlesex County, MA 15804 Camden, NJ Burlington County, NJ Camden County, NJ Gloucester County, NJ 15940 Canton-Massillon, OH Carroll County, OH Stark County, OH 15980 Cape Coral-Fort Myers, FL Lee County, FL 16020 Cape Girardeau-Jackson, MO-IL Alexander County, IL Bollinger County, MO Cape Girardeau County, MO 16180 Carson City, NV Carson City, NV 16220 Casper, WY Natrona County, WYCMS-1498-P 961

CBSA Code Urban Area (Constituent Counties) 16300 Cedar Rapids, IA Benton County, IA Jones County, IA Linn County, IA 16580 Champaign-Urbana, IL Champaign County, IL Ford County, IL Piatt County, IL 16620 Charleston, WV Boone County, WV Clay County, WV Kanawha County, WV Lincoln County, WV Putnam County, WV

16700 Charleston-North Charleston-Summerville, SC Berkeley County, SC Charleston County, SC Dorchester County, SC Summerville County, SC 16740 Charlotte-Gastonia-Rock Hill, NC-SC Anson County, NC Cabarrus County, NC Gaston County, NC Mecklenburg County, NC Union County, NC York County, SC 16820 Charlottesville, VA Albemarle County, VA Fluvanna County, VA Greene County, VA Nelson County, VA Charlottesville City, VA 16860 Chattanooga, TN-GA Catoosa County, GA Dade County, GA Walker County, GA Hamilton County, TN Marion County, TN Sequatchie County, TN 16940 Cheyenne, WY Laramie County, WYCMS-1498-P 962

CBSA Code Urban Area (Constituent Counties) 16974 Chicago-Joliet-Naperville, IL Cook County, IL DeKalb County, IL DuPage County, IL Grundy County, IL Kane County, IL Kendall County, IL McHenry County, IL Will County, IL 17020 Chico, CA Butte County, CA 17140 Cincinnati-Middletown, OH-KY-IN Dearborn County, IN Franklin County, IN Ohio County, IN Boone County, KY Bracken County, KY Campbell County, KY Gallatin County, KY Grant County, KY Kenton County, KY Pendleton County, KY Brown County, OH Butler County, OH Clermont County, OH Hamilton County, OH Warren County, OH 17300 Clarksville, TN-KY Christian County, KY Trigg County, KY Montgomery County, TN Stewart County, TN 17420 Cleveland, TN Bradley County, TN Polk County, TN 17460 Cleveland-Elyria-Mentor, OH Cuyahoga County, OH Geauga County, OH Lake County, OH Lorain County, OH Medina County, OH 17660 Coeur d'Alene, ID Kootenai County, IDCMS-1498-P 963

CBSA Code Urban Area (Constituent Counties) 17780 College Station-Bryan, TX Brazos County, TX Burleson County, TX Robertson County, TX 17820 Colorado Springs, CO El Paso County, CO Teller County, CO 17860 Columbia, MO Boone County, MO Howard County, MO 17900 Columbia, SC Calhoun County, SC Fairfield County, SC Kershaw County, SC Lexington County, SC Richland County, SC Saluda County, SC 17980 Columbus, GA-AL Russell County, AL Chattahoochee County, GA Harris County, GA Marion County, GA Muscogee County, GA 18020 Columbus, IN Bartholomew County, IN 18140 Columbus, OH Delaware County, OH Fairfield County, OH Franklin County, OH Licking County, OH Madison County, OH Morrow County, OH Pickaway County, OH Union County, OH 18580 Corpus Christi, TX Aransas County, TX Nueces County, TX San Patricio County, TX 18700 Corvallis, OR Benton County, OR 18880 Crestview-Fort Walton Beach-Destin, FL Okaloosa County, FLCMS-1498-P 964

CBSA Code Urban Area (Constituent Counties) 19060 Cumberland, MD-WV Allegany County, MD Mineral County, WV 19124 Dallas-Plano-Irving, TX Collin County, TX Dallas County, TX Delta County, TX Denton County, TX Ellis County, TX Hunt County, TX Kaufman County, TX Rockwall County, TX 19140 Dalton, GA Murray County, GA Whitfield County, GA 19180 Danville, IL Vermilion County, IL 19260 Danville, VA Pittsylvania County, VA Danville City, VA 19340 Davenport-Moline-Rock Island, IA-IL Henry County, IL Mercer County, IL Rock Island County, IL Scott County, IA 19380 Dayton, OH Greene County, OH Miami County, OH Montgomery County, OH Preble County, OH 19460 Decatur, AL Lawrence County, AL Morgan County, AL 19500 Decatur, IL Macon County, IL 19660 Deltona-Daytona Beach-Ormond Beach, FL Volusia County, FLCMS-1498-P 965

CBSA Code Urban Area (Constituent Counties) 19740 Denver-Aurora-Broomfield, CO Adams County, CO Arapahoe County, CO Broomfield County, CO Clear Creek County, CO Denver County, CO Douglas County, CO Elbert County, CO Gilpin County, CO Jefferson County, CO Park County, CO 19780 Des Moines-West Des Moines, IA Dallas County, IA Guthrie County, IA Madison County, IA Polk County, IA Warren County, IA 19804 Detroit-Livonia-Dearborn, MI Wayne County, MI 20020 Dothan, AL Geneva County, AL Henry County, AL Houston County, AL 20100 Dover, DE Kent County, DE 20220 Dubuque, IA Dubuque County, IA 20260 Duluth, MN-WI Carlton County, MN St. Louis County, MN Douglas County, WI 20500 Durham-Chapel Hill, NC Chatham County, NC Durham County, NC Orange County, NC Person County, NC 20740 Eau Claire, WI Chippewa County, WI Eau Claire County, WICMS-1498-P 966

CBSA Code Urban Area (Constituent Counties)

20764 Edison-New Brunswick, NJ Middlesex County, NJ Monmouth County, NJ New Brunswick County, NJ Ocean County, NJ Somerset County, NJ 20940 El Centro, CA Imperial County, CA 21060 Elizabethtown, KY Hardin County, KY Larue County, KY 21140 Elkhart-Goshen, IN Elkhart County, IN 21300 Elmira, NY Chemung County, NY 21340 El Paso, TX El Paso County, TX 21500 Erie, PA Erie County, PA 21660 Eugene-Springfield, OR Lane County, OR 21780 Evansville, IN-KY Gibson County, IN Posey County, IN Vanderburgh County, IN Warrick County, IN Henderson County, KY Webster County, KY 21820 Fairbanks, AK Fairbanks North Star Borough, AK 21940 Fajardo, PR Ceiba Municipio, PR Fajardo Municipio, PR Luquillo Municipio, PR 22020 Fargo, ND-MN Clay County, MN Cass County, ND 22140 Farmington, NM San Juan County, NM 22180 Fayetteville, NC Cumberland County, NC Hoke County, NCCMS-1498-P 967

CBSA Code Urban Area (Constituent Counties) 22220 Fayetteville-Springdale-Rogers, AR-MO Benton County, AR Madison County, AR Washington County, AR McDonald County, MO 22380 Flagstaff, AZ Coconino County, AZ 22420 Flint, MI Genesee County, MI 22500 Florence, SC Darlington County, SC Florence County, SC 22520 Florence-Muscle Shoals, AL Colbert County, AL Lauderdale County, AL 22540 Fond du Lac, WI Fond du Lac County, WI 22660 Fort Collins-Loveland, CO Larimer County, CO 22744 Fort Lauderdale-Pompano Beach-Deerfield Beach, FL Broward County, FL 22900 Fort Smith, AR-OK Crawford County, AR Franklin County, AR Sebastian County, AR Le Flore County, OK Sequoyah County, OK 23060 Fort Wayne, IN Allen County, IN Wells County, IN Whitley County, IN 23104 Fort Worth-Arlington, TX Johnson County, TX Parker County, TX Tarrant County, TX Wise County, TX 23420 Fresno, CA Fresno County, CA 23460 Gadsden, AL Etowah County, AL 23540 Gainesville, FL Alachua County, FL Gilchrist County, FLCMS-1498-P 968

CBSA Code Urban Area (Constituent Counties) 23580 Gainesville, GA Hall County, GA 23844 Gary, IN Jasper County, IN Lake County, IN Newton County, IN Porter County, IN 24020 Glens Falls, NY Warren County, NY Washington County, NY 24140 Goldsboro, NC Wayne County, NC 24220 Grand Forks, ND-MN Polk County, MN Grand Forks County, ND 24300 Grand Junction, CO Mesa County, CO 24340 Grand Rapids-Wyoming, MI Barry County, MI Ionia County, MI Kent County, MI Newaygo County, MI 24500 Great Falls, MT Cascade County, MT 24540 Greeley, CO Weld County, CO 24580 Green Bay, WI Brown County, WI Kewaunee County, WI Oconto County, WI 24660 Greensboro-High Point, NC Guilford County, NC Randolph County, NC Rockingham County, NC 24780 Greenville, NC Greene County, NC Pitt County, NC 24860 Greenville-Mauldin-Easley, SC Greenville County, SC Laurens County, SC Pickens County, SCCMS-1498-P 969

CBSA Code Urban Area (Constituent Counties) 25020 Guayama, PR Arroyo Municipio, PR Guayama Municipio, PR Patillas Municipio, PR 25060 Gulfport-Biloxi, MS Hancock County, MS Harrison County, MS Stone County, MS 25180 Hagerstown-Martinsburg, MD-WV Washington County, MD Berkeley County, WV Morgan County, WV 25260 Hanford-Corcoran, CA Kings County, CA 25420 Harrisburg-Carlisle, PA Cumberland County, PA Dauphin County, PA Perry County, PA 25500 Harrisonburg, VA Rockingham County, VA Harrisonburg City, VA 25540 Hartford-West Hartford -East Hartford, CT Hartford County, CT Middlesex County, CT Tolland County, CT 25620 Hattiesburg, MS Forrest County, MS Lamar County, MS Perry County, MS 25860 Hickory-Lenoir-Morganton, NC Alexander County, NC Burke County, NC Caldwell County, NC Catawba County, NC 25980 Hinesville-Fort Stewart, GA Liberty County, GA Long County, GA 26100 Holland-Grand Haven, MI Ottawa County, MI 26180 Honolulu, HI Honolulu County, HI 26300 Hot Springs, AR Garland County, ARCMS-1498-P 970

CBSA Code Urban Area (Constituent Counties) 26380 Houma-Bayou Cane-Thibodaux, LA Lafourche Parish, LA Terrebonne Parish, LA 26420 Houston-Sugar Land-Baytown, TX Austin County, TX Brazoria County, TX Chambers County, TX Fort Bend County, TX Galveston County, TX Harris County, TX Liberty County, TX Montgomery County, TX San Jacinto County, TX Waller County, TX 26580 Huntington-Ashland, WV-KY-OH Boyd County, KY Greenup County, KY Lawrence County, OH Cabell County, WV Wayne County, WV 26620 Huntsville, AL Limestone County, AL Madison County, AL 26820 Idaho Falls, ID Bonneville County, ID Jefferson County, ID 26900 Indianapolis-Carmel, IN Boone County, IN Brown County, IN Hamilton County, IN Hancock County, IN Hendricks County, IN Johnson County, IN Marion County, IN Morgan County, IN Putnam County, IN Shelby County, IN 26980 Iowa City, IA Johnson County, IA Washington County, IA 27060 Ithaca, NY Tompkins County, NY 27100 Jackson, MI Jackson County, MICMS-1498-P 971

CBSA Code Urban Area (Constituent Counties) 27140 Jackson, MS Copiah County, MS Hinds County, MS Madison County, MS Rankin County, MS Simpson County, MS 27180 Jackson, TN Chester County, TN Madison County, TN 27260 Jacksonville, FL Baker County, FL Clay County, FL Duval County, FL Nassau County, FL St. Johns County, FL 27340 Jacksonville, NC Onslow County, NC 27500 Janesville, WI Rock County, WI 27620 Jefferson City, MO Callaway County, MO Cole County, MO Moniteau County, MO Osage County, MO 27740 Johnson City, TN Carter County, TN Unicoi County, TN Washington County, TN 27780 Johnstown, PA Cambria County, PA 27860 Jonesboro, AR Craighead County, AR Poinsett County, AR 27900 Joplin, MO Jasper County, MO Newton County, MO 28020 Kalamazoo-Portage, MI Kalamazoo County, MI Van Buren County, MI 28100 Kankakee-Bradley, IL Kankakee County, ILCMS-1498-P 972

CBSA Code Urban Area (Constituent Counties) 28140 Kansas City, MO-KS Franklin County, KS Johnson County, KS Leavenworth County, KS Linn County, KS Miami County, KS Wyandotte County, KS Bates County, MO Caldwell County, MO Cass County, MO Clay County, MO Clinton County, MO Jackson County, MO Lafayette County, MO Platte County, MO Ray County, MO 28420 Kennewick-Pasco-Richland, WA Benton County, WA Franklin County, WA 28660 Killeen-Temple-Fort Hood, TX Bell County, TX Coryell County, TX Lampasas County, TX 28700 Kingsport-Bristol-Bristol, TN-VA Hawkins County, TN Sullivan County, TN Bristol City, VA Scott County, VA Washington County, VA 28740 Kingston, NY Ulster County, NY 28940 Knoxville, TN Anderson County, TN Blount County, TN Knox County, TN Loudon County, TN Union County, TN 29020 Kokomo, IN Howard County, IN Tipton County, IN 29100 La Crosse, WI-MN Houston County, MN La Crosse County, WICMS-1498-P 973

CBSA Code Urban Area (Constituent Counties) 29140 Lafayette, IN Benton County, IN Carroll County, IN Tippecanoe County, IN 29180 Lafayette, LA Lafayette Parish, LA St. Martin Parish, LA 29340 Lake Charles, LA Calcasieu Parish, LA Cameron Parish, LA 29404 Lake County-Kenosha County, IL-WI Lake County, IL Kenosha County, WI 29420 Lake Havasu City-Kingman, AZ Mohave County, AZ

29460 Lakeland-Winter Haven, FL Polk County, FL Winter Haven County, FL 29540 Lancaster, PA Lancaster County, PA 29620 Lansing-East Lansing, MI Clinton County, MI Eaton County, MI Ingham County, MI 29700 Laredo, TX Webb County, TX 29740 Las Cruces, NM Dona Ana County, NM 29820 Las Vegas-Paradise, NV Clark County, NV 29940 Lawrence, KS Douglas County, KS 30020 Lawton, OK Comanche County, OK 30140 Lebanon, PA Lebanon County, PA 30300 Lewiston, ID-WA Nez Perce County, ID Asotin County, WA 30340 Lewiston-Auburn, ME Androscoggin County, MECMS-1498-P 974

CBSA Code Urban Area (Constituent Counties) 30460 Lexington-Fayette, KY Bourbon County, KY Clark County, KY Fayette County, KY Jessamine County, KY Scott County, KY Woodford County, KY 30620 Lima, OH Allen County, OH 30700 Lincoln, NE Lancaster County, NE Seward County, NE 30780 Little Rock-North Little Rock-Conway, AR Faulkner County, AR Grant County, AR Lonoke County, AR Perry County, AR Pulaski County, AR Saline County, AR 30860 Logan, UT-ID Franklin County, ID Cache County, UT 30980 Longview, TX Gregg County, TX Rusk County, TX Upshur County, TX 31020 Longview, WA Cowlitz County, WA 31084 Los Angeles-Long Beach-Glendale, CA Los Angeles County, CA 31140 Louisville-Jefferson County, KY-IN Clark County, IN Floyd County, IN Harrison County, IN Washington County, IN Bullitt County, KY Henry County, KY Jefferson County, KY Meade County, KY Nelson County, KY Oldham County, KY Shelby County, KY Spencer County, KY Trimble County, KYCMS-1498-P 975

CBSA Code Urban Area (Constituent Counties) 31180 Lubbock, TX Crosby County, TX Lubbock County, TX 31340 Lynchburg, VA Amherst County, VA Appomattox County, VA Bedford County, VA Campbell County, VA Bedford City, VA Lynchburg City, VA 31420 Macon, GA Bibb County, GA Crawford County, GA Jones County, GA Monroe County, GA Twiggs County, GA 31460 Madera-Chowchilla, CA Madera County, CA 31540 Madison, WI Columbia County, WI Dane County, WI Iowa County, WI 31700 Manchester-Nashua, NH Hillsborough County, NH 31740 Manhattan, KS Geary County, KS Pottawatomie County, KS Riley County, KS 31860 Mankato-North Mankato, MN Blue Earth County, MN Nicollet County, MN 31900 Mansfield, OH Richland County, OH 32420 Mayagüez, PR Hormigueros Municipio, PR Mayagüez Municipio, PR 32580 McAllen-Edinburg-Mission, TX Hidalgo County, TX 32780 Medford, OR Jackson County, ORCMS-1498-P 976

CBSA Code Urban Area (Constituent Counties) 32820 Memphis, TN-MS-AR Crittenden County, AR DeSoto County, MS Marshall County, MS Tate County, MS Tunica County, MS Fayette County, TN Shelby County, TN Tipton County, TN 32900 Merced, CA Merced County, CA 33124 Miami-Miami Beach-Kendall, FL Miami-Dade County, FL 33140 Michigan City-La Porte, IN LaPorte County, IN 33260 Midland, TX Midland County, TX 33340 Milwaukee-Waukesha-West Allis, WI Milwaukee County, WI Ozaukee County, WI Washington County, WI Waukesha County, WI 33460 Minneapolis-St. Paul-Bloomington, MN-WI Anoka County, MN Carver County, MN Chisago County, MN Dakota County, MN Hennepin County, MN Isanti County, MN Ramsey County, MN Scott County, MN Sherburne County, MN Washington County, MN Wright County, MN Pierce County, WI St. Croix County, WI 33540 Missoula, MT Missoula County, MT 33660 Mobile, AL Mobile County, AL 33700 Modesto, CA Stanislaus County, CACMS-1498-P 977

CBSA Code Urban Area (Constituent Counties) 33740 Monroe, LA Ouachita Parish, LA Union Parish, LA 33780 Monroe, MI Monroe County, MI 33860 Montgomery, AL Autauga County, AL Elmore County, AL Lowndes County, AL Montgomery County, AL 34060 Morgantown, WV Monongalia County, WV Preston County, WV 34100 Morristown, TN Grainger County, TN Hamblen County, TN Jefferson County, TN 34580 Mount Vernon-Anacortes, WA Skagit County, WA 34620 Muncie, IN Delaware County, IN 34740 Muskegon-Norton Shores, MI Muskegon County, MI 34820 Myrtle Beach-North Myrtle Beach-Conway, SC Horry County, SC 34900 N apa, C A Napa County, CA 34940 N apl es -Marco Island, FL Collier County, FL 34980 N ashvil le -Davidson-Murfreesboro-Franklin, TN Cannon County, TN Cheatham County, TN Davidson County, TN Dickson County, TN Hickman County, TN Macon County, TN Robertson County, TN Rutherford County, TN Smith County, TN Sumner County, TN Trousdale County, TN Williamson County, TN Wilson County, TNCMS-1498-P 978

CBSA Code Urban Area (Constituent Counties) 35004 N ass au -Suffolk, NY Nassau County, NY Suffolk County, NY 35084 N ewa rk -Union, NJ-PA Essex County, NJ Hunterdon County, NJ Morris County, NJ Sussex County, NJ Union County, NJ Pike County, PA 35300 N ew Hav en -Milford, CT New Haven County, CT 35380 N ew Orlea ns -Metairie-Kenner, LA Jefferson Parish, LA Orleans Parish, LA Plaquemines Parish, LA St. Bernard Parish, LA St. Charles Parish, LA St. John the Baptist Parish, LA St. Tammany Parish, LA 35644 N ew Yo rk -White Plains-Wayne, NY-NJ Bergen County, NJ Hudson County, NJ Passaic County, NJ Bronx County, NY Kings County, NY New York County, NY Putnam County, NY Queens County, NY Richmond County, NY Rockland County, NY Westchester County, NY 35660 N il es -Benton Harbor, MI Berrien County, MI 35840 N orth Po rt -Bradenton-Sarasota, FL Manatee County, FL Sarasota County, FL 35980 N orwi ch -New London, CT New London County, CT 36084 Oakland-Fremont-Hayward, CA Alameda County, CA Contra Costa County, CA 36100 Ocala, FL Marion County, FLCMS-1498-P 979

CBSA Code Urban Area (Constituent Counties) 36140 Ocean City, NJ Cape May County, NJ 36220 Odessa, TX Ector County, TX 36260 Ogden-Clearfield, UT Davis County, UT Morgan County, UT Weber County, UT 36420 Oklahoma City, OK Canadian County, OK Cleveland County, OK Grady County, OK Lincoln County, OK Logan County, OK McClain County, OK Oklahoma County, OK 36500 Olympia, WA Thurston County, WA 36540 Omaha-Council Bluffs, NE-IA Harrison County, IA Mills County, IA Pottawattamie County, IA Cass County, NE Douglas County, NE Sarpy County, NE Saunders County, NE Washington County, NE 36740 Orlando-Kissimmee-Sanford, FL Lake County, FL Orange County, FL Osceola County, FL Seminole County, FL 36780 Oshkosh-Neenah, WI Winnebago County, WI 36980 Owensboro, KY Daviess County, KY Hancock County, KY McLean County, KY 37100 Oxnard-Thousand Oaks-Ventura, CA Ventura County, CA 37340 Palm Bay-Melbourne-Titusville, FL Brevard County, FL 37380 Palm Coast, FL Flager County, FLCMS-1498-P 980

CBSA Code Urban Area (Constituent Counties) 37460 Panama City-Lynn Haven- Panama City Beach, FL Bay County, FL 37620 Parkersburg-Marietta-Vienna, WV-OH Washington County, OH Pleasants County, WV Wirt County, WV Wood County, WV 37700 Pascagoula, MS George County, MS Jackson County, MS

37764 Peabody, MA Essex County, MA 37860 Pensacola-Ferry Pass-Brent, FL Escambia County, FL Santa Rosa County, FL 37900 Peoria, IL Marshall County, IL Peoria County, IL Stark County, IL Tazewell County, IL Woodford County, IL 37964 Philadelphia, PA Bucks County, PA Chester County, PA Delaware County, PA Montgomery County, PA Philadelphia County, PA 38060 Phoenix-Mesa-Glendale, AZ Maricopa County, AZ Pinal County, AZ 38220 Pine Bluff, AR Cleveland County, AR Jefferson County, AR Lincoln County, AR 38300 Pittsburgh, PA Allegheny County, PA Armstrong County, PA Beaver County, PA Butler County, PA Fayette County, PA Washington County, PA Westmoreland County, PA 38340 Pittsfield, MA Berkshire County, MACMS-1498-P 981

CBSA Code Urban Area (Constituent Counties) 38540 Pocatello, ID Bannock County, ID Power County, ID 38660 Ponce, PR Juana Díaz Municipio, PR Ponce Municipio, PR Villalba Municipio, PR 38860 Portland-South Por tland-Biddeford, ME Cumberland County, ME Sagadahoc County, ME York County, ME 38900 Portland-Vancouve r-Hillsboro, OR-WA Clackamas County, OR Columbia County, OR Multnomah County, OR Washington County, OR Yamhill County, OR Clark County, WA Skamania County, WA 38940 Port St. Lucie, FL Martin County, FL St. Lucie County, FL 39100 Poughkeepsie-Newburgh-Middletown, NY Dutchess County, NY Orange County, NY 39140 Prescott, AZ Yavapai County, AZ 39300 Providence-New Bedford-Fall River, RI-MA Bristol County, MA Bristol County, RI Kent County, RI Newport County, RI Providence County, RI Washington County, RI 39340 Provo-Orem, UT Juab County, UT Utah County, UT 39380 Pueblo, CO Pueblo County, CO 39460 Punta Gorda, FL Charlotte County, FL 39540 Racine, WI Racine County, WICMS-1498-P 982

CBSA Code Urban Area (Constituent Counties) 39580 Raleigh-Cary, NC Franklin County, NC Johnston County, NC Wake County, NC 39660 Rapid City, SD Meade County, SD Pennington County, SD 39740 Reading, PA Berks County, PA 39820 Redding, CA Shasta County, CA 39900 Reno-Sparks, NV Storey County, NV Washoe County, NV 40060 Richmond, VA Amelia County, VA Caroline County, VA Charles City County, VA Chesterfield County, VA Cumberland County, VA Dinwiddie County, VA Goochland County, VA Hanover County, VA Henrico County, VA King and Queen County, VA King William County, VA Louisa County, VA New Kent County, VA Powhatan County, VA Prince George County, VA Sussex County, VA Colonial Heights City, VA Hopewell City, VA Petersburg City, VA Richmond City, VA 40140 Riverside-San Bern ardino-Ontario, CA Riverside County, CA San Bernardino County, CACMS-1498-P 983

CBSA Code Urban Area (Constituent Counties) 40220 Roanoke, VA Botetourt County, VA Craig County, VA Franklin County, VA Roanoke County, VA Roanoke City, VA Salem City, VA 40340 Rochester, MN Dodge County, MN Olmsted County, MN Wabasha County, MN 40380 Rochester, NY Livingston County, NY Monroe County, NY Ontario County, NY Orleans County, NY Wayne County, NY 40420 Rockford, IL Boone County, IL Winnebago County, IL 40484 Rockingham County-Strafford County, NH Rockingham County, NH Strafford County, NH 40580 Rocky Mount, NC Edgecombe County, NC Nash County, NC 40660 Rome, GA Floyd County, GA 40900 Sacramento--Arden-Arcade--Roseville, CA El Dorado County, CA Placer County, CA Sacramento County, CA Yolo County, CA 40980 Saginaw-Saginaw Township North, MI Saginaw County, MI 41060 St. Cloud, MN Benton County, MN Stearns County, MN 41100 St. George, UT Washington County, UTCMS-1498-P 984

CBSA Code Urban Area (Constituent Counties) 41140 St. Joseph, MO-KS Doniphan County, KS Andrew County, MO Buchanan County, MO DeKalb County, MO

41180 St. Louis, MO-IL Bond County, IL Calhoun County, IL Clinton County, IL Jersey County, IL Macoupin County, IL Madison County, IL Monroe County, IL St. Clair County, IL Crawford County, MO Franklin County, MO Jefferson County, MO Lincoln County, MO St. Charles County, MO St. Louis County, MO Warren County, MO Washington County, MO St. Louis City, MO 41420 Salem, OR Marion County, OR Polk County, OR 41500 Salinas, CA Monterey County, CA 41540 Salisbury, MD Somerset County, MD Wicomico County, MD 41620 Salt Lake City, UT Salt Lake County, UT Summit County, UT Tooele County, UT 41660 San Angelo, TX Irion County, TX Tom Green County, TXCMS-1498-P 985

CBSA Code Urban Area (Constituent Counties) 41700 San Antonio-New Braunfels, TX Atascosa County, TX Bandera County, TX Bexar County, TX Comal County, TX Guadalupe County, TX Kendall County, TX Medina County, TX Wilson County, TX 41740 San Diego-Carlsbad-San Marcos, CA San Diego County, CA 41780 Sandusky, OH Erie County, OH 41884 San Francisco-San Ma teo-Redwood City, CA Marin County, CA San Francisco County, CA San Mateo County, CA 41900 San Germán-Cabo Rojo, PR Cabo Rojo Municipio, PR Lajas Municipio, PR Sabana Grande Municipio, PR San Germán Municipio, PR 41940 San Jose-Sunnyvale-Santa Clara, CA San Benito County, CA Santa Clara County, CACMS-1498-P 986

CBSA Code Urban Area (Constituent Counties)

41980 San Juan-Caguas-Guaynabo, PR Aguas Buenas Municipio, PR Aibonito Municipio, PR Arecibo Municipio, PR Barceloneta Municipio, PR Barranquitas Municipio, PR Bayamón Municipio, PR Caguas Municipio, PR Camuy Municipio, PR Canóvanas Municipio, PR Carolina Municipio, PR Cataño Municipio, PR Cayey Municipio, PR Ciales Municipio, PR Cidra Municipio, PR Comerío Municipio, PR Corozal Municipio, PR Dorado Municipio, PR Florida Municipio, PR Guaynabo Municipio, PR Gurabo Municipio, PR Hatillo Municipio, PR Humacao Municipio, PR Juncos Municipio, PR Las Piedras Municipio, PR Loíza Municipio, PR Manatí Municipio, PR Maunabo Municipio, PR Morovis Municipio, PR Naguabo Municipio, PR Naranjito Municipio, PR Orocovis Municipio, PR Quebradillas Municipio, PR Río Grande Municipio, PR San Juan Municipio, PR San Lorenzo Municipio, PR Toa Alta Municipio, PR Toa Baja Municipio, PR Trujillo Alto Municipio, PR Vega Alta Municipio, PR Vega Baja Municipio, PR Yabucoa Municipio, PR 42020 San Luis Obispo-Paso Robles, CA San Luis Obispo County, CACMS-1498-P 987

CBSA Code Urban Area (Constituent Counties) 42044 Santa Ana-Anaheim-Irvine, CA Orange County, CA 42060 Santa Barbara-Santa Maria-Goleta, CA Santa Barbara County, CA 42100 Santa Cruz-Watsonville, CA Santa Cruz County, CA 42140 Santa Fe, NM Santa Fe County, NM 42220 Santa Rosa-Petaluma, CA Sonoma County, CA 42340 Savannah, GA Bryan County, GA Chatham County, GA Effingham County, GA 42540 Scranton--Wilkes-Barre, PA Lackawanna County, PA Luzerne County, PA Wyoming County, PA 42644 Seattle-Bellevue-Everett, WA King County, WA Snohomish County, WA 42680 Sebastian-Vero Beach, FL Indian River County, FL 43100 Sheboygan, WI Sheboygan County, WI 43300 Sherman-Denison, TX Grayson County, TX 43340 Shreveport-Bossier City, LA Bossier Parish, LA Caddo Parish, LA De Soto Parish, LA 43580 Sioux City, IA-NE-SD Woodbury County, IA Dakota County, NE Dixon County, NE Union County, SD 43620 Sioux Falls, SD Lincoln County, SD McCook County, SD Minnehaha County, SD Turner County, SD 43780 South Bend-Mishawaka, IN-MI St. Joseph County, IN Cass County, MICMS-1498-P 988

CBSA Code Urban Area (Constituent Counties) 43900 Spartanburg, SC Spartanburg County, SC 44060 Spokane, WA Spokane County, WA 44100 Springfield, IL Menard County, IL Sangamon County, IL 44140 Springfield, MA Franklin County, MA Hampden County, MA Hampshire County, MA 44180 Springfield, MO Christian County, MO Dallas County, MO Greene County, MO Polk County, MO Webster County, MO 44220 Springfield, OH Clark County, OH 44300 State College, PA Centre County, PA 44600 Steubenville-Weirton, WV-OH Jefferson County, OH Brooke County, WV Hancock County, WV 44700 Stockton, CA San Joaquin County, CA 44940 Sumter, SC Sumter County, SC 45060 Syracuse, NY Madison County, NY Onondaga County, NY Oswego County, NY 45104 Tacoma, WA Pierce County, WA 45220 Tallahassee, FL Gadsden County, FL Jefferson County, FL Leon County, FL Wakulla County, FLCMS-1498-P 989

CBSA Code Urban Area (Constituent Counties) 45300 Tampa-St. Petersburg-Clearwater, FL Hernando County, FL Hillsborough County, FL Pasco County, FL Pinellas County, FL 45460 Terre Haute, IN Clay County, IN Sullivan County, IN Vermillion County, IN Vigo County, IN 45500 Texarkana, TX-Texarkana, AR Miller County, AR Bowie County, TX 45780 Toledo, OH Fulton County, OH Lucas County, OH Ottawa County, OH Wood County, OH 45820 Topeka, KS Jackson County, KS Jefferson County, KS Osage County, KS Shawnee County, KS Wabaunsee County, KS 45940 Trenton-Ewing, NJ Mercer County, NJ 46060 Tucson, AZ Pima County, AZ 46140 Tulsa, OK Creek County, OK Okmulgee County, OK Osage County, OK Pawnee County, OK Rogers County, OK Tulsa County, OK Wagoner County, OK 46220 Tuscaloosa, AL Greene County, AL Hale County, AL Tuscaloosa County, AL 46340 Tyler, TX Smith County, TXCMS-1498-P 990

CBSA Code Urban Area (Constituent Counties) 46540 Utica-Rome, NY Herkimer County, NY Oneida County, NY 46660 Valdosta, GA Brooks County, GA Echols County, GA Lanier County, GA Lowndes County, GA 46700 Vallejo-Fairfield, CA Solano County, CA 47020 Victoria, TX Calhoun County, TX Goliad County, TX Victoria County, TX 47220 Vineland-Millville-Bridgeton, NJ Cumberland County, NJ

47260 Virginia Beach-Norfolk-Newport News, VA-NC Currituck County, NC Gloucester County, VA Isle of Wight County, VA James City County, VA Mathews County, VA Surry County, VA York County, VA Chesapeake City, VA Hampton City, VA Newport News City, VA Norfolk City, VA Poquoson City, VA Portsmouth City, VA Suffolk City, VA Virginia Beach City, VA Williamsburg City, VA 47300 Visalia-Porterville, CA Tulare County, CA 47380 Waco, TX McLennan County, TX 47580 Warner Robins, GA Houston County, GACMS-1498-P 991

CBSA Code Urban Area (Constituent Counties) 47644 Warren-Troy-Farmington Hills, MI Lapeer County, MI Livingston County, MI Macomb County, MI Oakland County, MI St. Clair County, MI 47894 Washington-Arlington-Alexandria, DC-VA-MD-WV District of Columbia, DC Calvert County, MD Charles County, MD Prince George's County, MD Arlington County, VA Clarke County, VA Fairfax County, VA Fauquier County, VA Loudoun County, VA Prince William County, VA Spotsylvania County, VA Stafford County, VA Warren County, VA Alexandria City, VA Fairfax City, VA Falls Church City, VA Fredericksburg City, VA Manassas City, VA Manassas Park City, VA Jefferson County, WV 47940 Waterloo-Cedar Falls, IA Black Hawk County, IA Bremer County, IA Grundy County, IA 48140 Wausau, WI Marathon County, WI 48300 Wenatchee-East Wenatchee, WA Chelan County, WA Douglas County, WA 48424 West Palm Beach-Boca Raton-Boynton Beach, FL Palm Beach County, FL 48540 Wheeling, WV-OH Belmont County, OH Marshall County, WV Ohio County, WVCMS-1498-P 992

CBSA Code Urban Area (Constituent Counties) 48620 Wichita, KS Butler County, KS Harvey County, KS Sedgwick County, KS Sumner County, KS 48660 Wichita Falls, TX Archer County, TX Clay County, TX Wichita County, TX 48700 Williamsport, PA Lycoming County, PA 48864 Wilmington, DE-MD-NJ New Castle County, DE Cecil County, MD Salem County, NJ 48900 Wilmington, NC Brunswick County, NC New Hanover County, NC Pender County, NC 49020 Winchester, VA-WV Frederick County, VA Winchester City, VA Hampshire County, WV 49180 Winston-Salem, NC Davie County, NC Forsyth County, NC Stokes County, NC Yadkin County, NC 49340 Worcester, MA Worcester County, MA 49420 Yakima, WA Yakima County, WA 49500 Yauco, PR Guánica Municipio, PR Guayanilla Municipio, PR Peñuelas Municipio, PR Yauco Municipio, PR 49620 York-Hanover, PA York County, PA 49660 Youngstown-Warren-Boardman, OH-PA Mahoning County, OH Trumbull County, OH Mercer County, PACMS-1498-P 993

CBSA Code Urban Area (Constituent Counties) 49700 Yuba City, CA Sutter County, CA Yuba County, CA 49740 Yuma, AZ Yuma County, AZ

TABLE 4F.—PROPOSED PUERTO RICO WAGE INDEX AND CAPITAL GEOGRAPHIC ADJUSTMENT FACTOR (GAF) FOR ACUTE CARE HOSPITALS BY CBSA--FY 2011 (Note: The rural floor budget neutrality adjustment is not applicable to the Puerto Rico specific wage index.)

CBSA Code Area Proposed Wage Index Proposed GAF Wage Index – Reclassified

Hospitals GAF – Reclassified

Hospitals 10380 Aguadilla-Isabela-S an Sebastián, PR 0.8107 0.8661

------ ------ 21940 Fajardo, PR 0.9207 0.9450

------ ------ 25020 Guayama, PR 0.8570 0.8997

------ ------ 32420 Mayagüez, PR 0.8593 0.9014

------ ------ 38660 Ponce, PR 1.0201 1.0137

------ ------ 41900 San Germán-Cabo Rojo, PR 1.0812 1.0549

------ ------ 41980 San Juan-Caguas-Guaynabo, PR 1.0224 1.0153

------ ------ 49500 Yauco, PR 0.8385 0.8864

------ ------CMS-1498-P 994

TABLE 4J.—PROPOSED OUT-MIGRATION ADJUSTMENT FOR ACUTE CARE HOSPITALS--FY 2011

The following list represents all hospitals that are eligible to have their wage index increased by the out-migration adjustment listed in this table. Hospitals cannot receive the outmigration adjustment if they are reclassified unde r section 1886(d)(10) of the Act or redesignated under section 1886(d)(8)(B) of the Act. Hospitals that have already been reclassified under section 1886(d)(10) of the Act or redesignated under section 1886(d)(8)(B) of the Act are designated with an asterisk. We will automatically assume that hospitals that have already been reclassified under section 1886(d)(10) of the Ac t or redesignated under section 1886(d)(8)(B) of the Act wish to retain their reclassification/rede signation status and waive the application of the out-migration adjustment. Secti on 1886(d)(10) hospitals that wish to receive the out-migration adjustment, rather than their reclassifica tion, should follow the termination/withdrawal procedures specified in 42 CFR 412.273 and section III.I.3. of the preamble of this proposed rule. Otherwise, they will be deemed to have waived the out-migration adjustment. Hospitals redesignated under section 1886(d)(8)(B) of the Act will be deemed to have waived the outmigration adjustment, unless they explicitly notified CMS that they elected to receive the out-migration adjustment instead within 45 days from the publication of this proposed rule. These notifications should be sent to the followi ng address: Centers fo r Medicare and Medicaid Services, Center for Medicare Management, Attn: Wage Index Adjustment Waivers, Division of Acute Care, Room C4-08-06, 7500 Securi ty Boulevard, Baltimore, MD 21244-1850.

Provider Number Reclassified for FY 2011 ProposedOutMigration Adjustment Qualifying County Name County Code 010005 * 0.0296 MARSHALL 01470 010008 0.0174 CRENSHAW 01200 010010 0.0296 MARSHALL 01470 010012 0.0186 DE KALB 01240 010015 0.0046 CLARKE 01120 010021 0.0123 DALE 01220 010022 * 0.1128 CHEROKEE 01090 010025 * 0.0389 CHAMBERS 01080 010027 0.0062 COFFEE 01150 010029 * 0.0289 LEE 01400 010032 0.0325 RANDOLPH 01550 010035 * 0.0254 CULLMAN 01210 010038 0.0047 CALHOUN 01070 010040 0.0113 ETOWAH 01270 010045 0.0222 FAYETTE 01280 010046 * 0.0113 ETOWAH 01270 010047 0.0127 BUTLER 01060 010049 0.0062 COFFEE 01150 010052 * 0.0245 TALLAPOOSA 01610 010059 * 0.0097 LAWRENCE 01390 010061 * 0.0542 JACKSON 01350CMS-1498-P 995

Provider Number Reclassified for FY 2011 ProposedOutMigration Adjustment Qualifying County Name County Code 010065 * 0.0245 TALLAPOOSA 01610 010078 0.0047 CALHOUN 01070 010083 * 0.0134 BALDWIN 01010 010091 0.0046 CLARKE 01120 010100 * 0.0134 BALDWIN 01010 010101 * 0.0211 TALLADEGA 01600 010109 0.0309 PICKENS 01530 010110 0.0215 BULLOCK 01050 010125 0.0476 WINSTON 01660 010128 0.0046 CLARKE 01120 010129 0.0134 BALDWIN 01010 010138 0.0066 SUMTER 01590 010143 * 0.0254 CULLMAN 01210 010146 0.0047 CALHOUN 01070 010150 0.0127 BUTLER 01060 010158 * 0.0023 FRANKLIN 01290 010164 * 0.0211 TALLADEGA 01600 030067 0.0298 LAPAZ 03055 040014 * 0.0199 WHITE 04720 040019 0.0258 ST. FRANCIS 04610 040039 * 0.0172 GREENE 04270 040047 0.0117 RANDOLPH 04600 040067 0.0007 COLUMBIA 04130 040071 * 0.0149 JEFFERSON 04340 040076 * 0.1000 HOT SPRING 04290 040081 0.0357 PIKE 04540 050002 * 0.0010 ALAMEDA 05000 050007 0.0146 SAN MATEO 05510 050009 * 0.0180 NAPA 05380 050013 * 0.0180 NAPA 05380 050014 * 0.0139 AMADOR 05020 050042 * 0.0162 TEHAMA 05620 050043 * 0.0010 ALAMEDA 05000 050070 0.0146 SAN MATEO 05510 050073 * 0.0171 SOLANO 05580 050075 * 0.0010 ALAMEDA 05000 050084 * 0.0132 SAN JOAQUIN 05490 050090 * 0.0058 SONOMA 05590 050101 * 0.0171 SOLANO 05580 050113 0.0146 SAN MATEO 05510 050118 * 0.0132 SAN JOAQUIN 05490 050122 0.0132 SAN JOAQUIN 05490 050133 0.0178 YUBA 05680CMS-1498-P 996

Provider Number Reclassified for FY 2011 ProposedOutMigration Adjustment Qualifying County Name County Code 050136 * 0.0058 SONOMA 05590 050150 * 0.0342 NEVADA 05390 050167 0.0132 SAN JOAQUIN 05490 050174 * 0.0058 SONOMA 05590 050195 * 0.0010 ALAMEDA 05000 050197 * 0.0146 SAN MATEO 05510 050211 * 0.0010 ALAMEDA 05000 050264 * 0.0010 ALAMEDA 05000 050283 * 0.0010 ALAMEDA 05000 050289 0.0146 SAN MATEO 05510 050291 * 0.0058 SONOMA 05590 050305 * 0.0010 ALAMEDA 05000 050313 0.0132 SAN JOAQUIN 05490 050320 * 0.0010 ALAMEDA 05000 050325 0.0033 TUOLUMNE 05650 050335 * 0.0033 TUOLUMNE 05650 050336 0.0132 SAN JOAQUIN 05490 050366 * 0.0015 CALAVERAS 05040 050367 * 0.0171 SOLANO 05580 050385 * 0.0058 SONOMA 05590 050444 0.0233 MERCED 05340 050488 * 0.0010 ALAMEDA 05000 050512 * 0.0010 ALAMEDA 05000 050528 * 0.0233 MERCED 05340 050541 * 0.0146 SAN MATEO 05510 050547 * 0.0058 SONOMA 05590 050667 * 0.0180 NAPA 05380 050680 * 0.0171 SOLANO 05580 050690 * 0.0058 SONOMA 05590 050748 * 0.0132 SAN JOAQUIN 05490 050754 0.0146 SAN MATEO 05510 060001 * 0.0042 WELD 06610 060003 * 0.0069 BOULDER 06060 060027 * 0.0069 BOULDER 06060 060103 * 0.0069 BOULDER 06060 060116 * 0.0069 BOULDER 06060 060121 * 0.0042 WELD 06610 070003 * 0.0020 WINDHAM 07070 070004 * 0.0135 LITCHFIELD 07020 070006 * 0.0045 FAIRFIELD 07000 070010 * 0.0045 FAIRFIELD 07000 070011 * 0.0135 LITCHFIELD 07020 070015 * 0.0135 LITCHFIELD 07020 070018 * 0.0045 FAIRFIELD 07000CMS-1498-P 997

Provider Number Reclassified for FY 2011 ProposedOutMigration Adjustment Qualifying County Name County Code 070020 0.0101 MIDDLESEX 07030 070021 * 0.0020 WINDHAM 07070 070028 * 0.0045 FAIRFIELD 07000 070033 * 0.0045 FAIRFIELD 07000 070034 * 0.0045 FAIRFIELD 07000 100014 * 0.0047 VOLUSIA 10630 100017 * 0.0047 VOLUSIA 10630 100023 * 0.0031 CITRUS 10080 100045 * 0.0047 VOLUSIA 10630 100047 * 0.0028 CHARLOTTE 10070 100068 * 0.0047 VOLUSIA 10630 100072 * 0.0047 VOLUSIA 10630 100077 * 0.0028 CHARLOTTE 10070 100081 * 0.0097 WALTON 10650 100118 * 0.0177 FLAGLER 10170 100139 * 0.0006 LEVY 10370 100232 * 0.0054 PUTNAM 10530 100236 * 0.0028 CHARLOTTE 10070 100249 * 0.0031 CITRUS 10080 100252 * 0.0151 OKEECHOBEE 10460 100290 * 0.0452 SUMTER 10590 100292 * 0.0097 WALTON 10650 110023 * 0.0416 GORDON 11500 110029 * 0.0052 HALL 11550 110040 * 0.1455 JACKSON 11610 110041 * 0.0623 HABERSHAM 11540 110100 0.0790 JEFFERSON 11620 110101 0.0067 COOK 11311 110142 0.0185 EVANS 11441 110146 * 0.0364 CAMDEN 11170 110150 * 0.0227 BALDWIN 11030 110187 * 0.0643 LUMPKIN 11701 110189 * 0.0066 FANNIN 11450 110190 * 0.0241 MACON 11710 110205 0.0507 GILMER 11471 130003 * 0.0235 NEZ PERCE 13340 130024 0.0675 BONNER 13080 130049 * 0.0319 KOOTENAI 13270 130066 0.0319 KOOTENAI 13270 130067 * 0.0725 BINGHAM 13050 140001 0.0369 FULTON 14370 140026 0.0315 LA SALLE 14580 140043 * 0.0056 WHITESIDE 14988 140058 * 0.0126 MORGAN 14770CMS-1498-P 998

Provider Number Reclassified for FY 2011 ProposedOutMigration Adjustment Qualifying County Name County Code 140110 * 0.0315 LA SALLE 14580 140116 * 0.0041 MC HENRY 14640 140160 * 0.0332 STEPHENSON 14970 140161 * 0.0168 LIVINGSTON 14610 140167 * 0.0632 IROQUOIS 14460 140176 * 0.0041 MC HENRY 14640 140234 0.0315 LA SALLE 14580 150022 0.0158 MONTGOMERY 15530 150030 * 0.0192 HENRY 15320 150072 0.0105 CASS 15080 150076 * 0.0215 MARSHALL 15490 150088 * 0.0111 MADISON 15470 150091 * 0.0050 HUNTINGTON 15340 150102 * 0.0108 STARKE 15740 150113 * 0.0111 MADISON 15470 150133 * 0.0193 KOSCIUSKO 15420 150146 * 0.0087 NOBLE 15560 160013 0.0179 MUSCATINE 16690 160032 0.0235 JASPER 16490 160080 * 0.0066 CLINTON 16220 170137 * 0.0402 DOUGLAS 17220 170150 0.0166 COWLEY 17170 180012 * 0.0080 HARDIN 18460 180017 * 0.0035 BARREN 18040 180049 0.0488 MADISON 18750 180064 0.0314 MONTGOMERY 18860 180066 0.0439 LOGAN 18700 180070 0.0240 GRAYSON 18420 180079 0.0259 HARRISON 18480 190003 * 0.0085 IBERIA 19220 190015 * 0.0243 TANGIPAHOA 19520 190017 * 0.0187 ST. LANDRY 19480 190034 0.0189 VERMILION 19560 190044 0.0261 ACADIA 19000 190050 0.0044 BEAUREGARD 19050 190053 0.0101 JEFFRSON DAVIS 19260 190054 0.0085 IBERIA 19220 190078 0.0187 ST. LANDRY 19480 190086 * 0.0061 LINCOLN 19300 190088 0.0387 WEBSTER 19590 190099 0.0189 AVOYELLES 19040 190106 * 0.0102 ALLEN 19010 190116 0.0085 MOREHOUSE 19330CMS-1498-P 999

Provider Number Reclassified for FY 2011 ProposedOutMigration Adjustment Qualifying County Name County Code 190133 0.0102 ALLEN 19010 190140 0.0035 FRANKLIN 19200 190144 * 0.0387 WEBSTER 19590 190145 0.0090 LA SALLE 19290 190184 0.0047 CALDWELL 19100 190190 * 0.0047 CALDWELL 19100 190191 0.0187 ST. LANDRY 19480 190246 0.0047 CALDWELL 19100 190257 * 0.0061 LINCOLN 19300 200024 * 0.0094 ANDROSCOGGIN 20000 200032 0.0331 OXFORD 20080 200034 * 0.0094 ANDROSCOGGIN 20000 200050 * 0.0227 HANCOCK 20040 210001 0.0187 WASHINGTON 21210 210023 0.0079 ANNE ARUNDEL 21010 210028 0.0254 ST. MARYS 21180 210043 0.0079 ANNE ARUNDEL 21010 220001 * 0.0064 WORCESTER 22170 220002 * 0.0271 MIDDLESEX 22090 220010 * 0.0355 ESSEX 22040 220011 * 0.0271 MIDDLESEX 22090 220019 * 0.0064 WORCESTER 22170 220025 * 0.0064 WORCESTER 22170 220029 * 0.0355 ESSEX 22040 220033 * 0.0355 ESSEX 22040 220035 * 0.0355 ESSEX 22040 220049 * 0.0271 MIDDLESEX 22090 220058 * 0.0064 WORCESTER 22170 220062 * 0.0064 WORCESTER 22170 220063 * 0.0271 MIDDLESEX 22090 220070 * 0.0271 MIDDLESEX 22090 220080 * 0.0355 ESSEX 22040 220082 * 0.0271 MIDDLESEX 22090 220084 * 0.0271 MIDDLESEX 22090 220090 * 0.0064 WORCESTER 22170 220095 * 0.0064 WORCESTER 22170 220098 * 0.0271 MIDDLESEX 22090 220101 * 0.0271 MIDDLESEX 22090 220105 * 0.0271 MIDDLESEX 22090 220163 * 0.0064 WORCESTER 22170 220171 * 0.0271 MIDDLESEX 22090 220174 * 0.0355 ESSEX 22040 220175 * 0.0271 MIDDLESEX 22090 220176 * 0.0064 WORCESTER 22170CMS-1498-P 1000

Provider Number Reclassified for FY 2011 ProposedOutMigration Adjustment Qualifying County Name County Code 230002 * 0.0043 WAYNE 23810 230003 * 0.0220 OTTAWA 23690 230005 0.0473 LENAWEE 23450 230013 * 0.0025 OAKLAND 23620 230015 0.0295 ST. JOSEPH 23740 230019 * 0.0025 OAKLAND 23620 230020 * 0.0043 WAYNE 23810 230021 * 0.0101 BERRIEN 23100 230022 * 0.0212 BRANCH 23110 230024 * 0.0043 WAYNE 23810 230029 * 0.0025 OAKLAND 23620 230035 * 0.0095 MONTCALM 23580 230037 * 0.0210 HILLSDALE 23290 230041 0.0052 BAY 23080 230047 * 0.0021 MACOMB 23490 230053 * 0.0043 WAYNE 23810 230069 * 0.0210 LIVINGSTON 23460 230071 * 0.0025 OAKLAND 23620 230072 * 0.0220 OTTAWA 23690 230075 0.0047 CALHOUN 23120 230078 * 0.0101 BERRIEN 23100 230089 * 0.0043 WAYNE 23810 230092 0.0223 JACKSON 23370 230093 0.0058 MECOSTA 23530 230096 * 0.0295 ST. JOSEPH 23740 230099 * 0.0231 MONROE 23570 230104 * 0.0043 WAYNE 23810 230121 * 0.0678 SHIAWASSEE 23770 230130 * 0.0025 OAKLAND 23620 230135 * 0.0043 WAYNE 23810 230142 * 0.0043 WAYNE 23810 230146 * 0.0043 WAYNE 23810 230151 * 0.0025 OAKLAND 23620 230165 * 0.0043 WAYNE 23810 230174 * 0.0220 OTTAWA 23690 230176 * 0.0043 WAYNE 23810 230195 * 0.0021 MACOMB 23490 230204 * 0.0021 MACOMB 23490 230207 * 0.0025 OAKLAND 23620 230208 * 0.0095 MONTCALM 23580 230217 0.0047 CALHOUN 23120 230222 * 0.0035 MIDLAND 23550 230227 * 0.0021 MACOMB 23490 230244 * 0.0043 WAYNE 23810CMS-1498-P 1001

Provider Number Reclassified for FY 2011 ProposedOutMigration Adjustment Qualifying County Name County Code 230254 * 0.0025 OAKLAND 23620 230257 * 0.0021 MACOMB 23490 230264 * 0.0021 MACOMB 23490 230269 * 0.0025 OAKLAND 23620 230270 * 0.0043 WAYNE 23810 230273 * 0.0043 WAYNE 23810 230277 * 0.0025 OAKLAND 23620 230279 * 0.0210 LIVINGSTON 23460 230297 * 0.0043 WAYNE 23810 230301 * 0.0025 OAKLAND 23620 230302 * 0.0025 OAKLAND 23620 240018 0.0805 GOODHUE 24240 240044 0.0625 WINONA 24840 240064 0.0134 ITASCA 24300 240069 * 0.0267 STEELE 24730 240071 * 0.0385 RICE 24650 240117 0.0527 MOWER 24490 240211 0.0812 PINE 24570 250023 * 0.0541 PEARL RIVER 25540 250040 * 0.0021 JACKSON 25290 250117 * 0.0541 PEARL RIVER 25540 250128 0.0446 PANOLA 25530 250162 0.0014 HANCOCK 25220 260059 0.0077 LACLEDE 26520 260064 0.0089 AUDRAIN 26030 260097 0.0300 JOHNSON 26500 260116 * 0.0087 ST. FRANCOIS 26930 260160 0.0144 STODDARD 26985 260163 0.0087 ST. FRANCOIS 26930 280077 * 0.0080 DODGE 28260 290002 * 0.0277 LYON 29090 300011 * 0.0238 HILLSBOROUGH 30050 300012 * 0.0238 HILLSBOROUGH 30050 300017 * 0.0396 ROCKINGHAM 30070 300020 * 0.0238 HILLSBOROUGH 30050 300023 * 0.0396 ROCKINGHAM 30070 300029 * 0.0396 ROCKINGHAM 30070 300034 * 0.0238 HILLSBOROUGH 30050 310002 * 0.0268 ESSEX 31200 310009 * 0.0268 ESSEX 31200 310015 * 0.0254 MORRIS 31300 310017 * 0.0254 MORRIS 31300 310038 * 0.0209 MIDDLESEX 31270 310039 * 0.0209 MIDDLESEX 31270CMS-1498-P 1002

Provider Number Reclassified for FY 2011 ProposedOutMigration Adjustment Qualifying County Name County Code 310050 * 0.0254 MORRIS 31300 310054 * 0.0268 ESSEX 31200 310070 * 0.0209 MIDDLESEX 31270 310076 * 0.0268 ESSEX 31200 310083 * 0.0268 ESSEX 31200 310096 * 0.0268 ESSEX 31200 310108 * 0.0209 MIDDLESEX 31270 310119 * 0.0268 ESSEX 31200 320003 * 0.0490 SAN MIGUEL 32230 320011 0.0344 RIO ARRIBA 32190 320018 0.0024 DONA ANA 32060 320085 0.0024 DONA ANA 32060 320088 0.0024 DONA ANA 32060 330004 0.0633 ULSTER 33740 330008 * 0.0126 WYOMING 33900 330010 0.0067 MONTGOMERY 33380 330027 * 0.0123 NASSAU 33400 330033 0.0223 CHENANGO 33080 330047 0.0067 MONTGOMERY 33380 330073 * 0.0151 GENESEE 33290 330094 * 0.0503 COLUMBIA 33200 330103 0.0131 CATTARAUGUS 33040 330106 * 0.0123 NASSAU 33400 330126 * 0.0642 ORANGE 33540 330132 0.0131 CATTARAUGUS 33040 330135 0.0642 ORANGE 33540 330144 0.0034 STEUBEN 33690 330151 0.0034 STEUBEN 33690 330167 * 0.0123 NASSAU 33400 330175 0.0260 CORTLAND 33210 330181 * 0.0123 NASSAU 33400 330182 * 0.0123 NASSAU 33400 330191 * 0.0017 WARREN 33750 330198 * 0.0123 NASSAU 33400 330205 0.0642 ORANGE 33540 330222 0.0016 SARATOGA 33640 330224 * 0.0633 ULSTER 33740 330225 * 0.0123 NASSAU 33400 330235 * 0.0306 CAYUGA 33050 330259 * 0.0123 NASSAU 33400 330264 0.0642 ORANGE 33540 330276 0.0036 FULTON 33280 330277 * 0.0034 STEUBEN 33690CMS-1498-P 1003

Provider Number Reclassified for FY 2011 ProposedOutMigration Adjustment Qualifying County Name County Code 330331 * 0.0123 NASSAU 33400 330332 * 0.0123 NASSAU 33400 330372 * 0.0123 NASSAU 33400 330386 * 0.0745 SULLIVAN 33710 340020 0.0156 LEE 34520 340021 * 0.0162 CLEVELAND 34220 340024 0.0177 SAMPSON 34810 340027 * 0.0128 LENOIR 34530 340037 * 0.0162 CLEVELAND 34220 340038 0.0253 BEAUFORT 34060 340039 * 0.0101 IREDELL 34480 340068 * 0.0087 COLUMBUS 34230 340069 * 0.0015 WAKE 34910 340070 * 0.0395 ALAMANCE 34000 340071 * 0.0226 HARNETT 34420 340073 * 0.0015 WAKE 34910 340085 * 0.0250 DAVIDSON 34280 340096 * 0.0250 DAVIDSON 34280 340114 * 0.0015 WAKE 34910 340126 * 0.0100 WILSON 34970 340129 * 0.0101 IREDELL 34480 340133 0.0319 MARTIN 34580 340138 * 0.0015 WAKE 34910 340144 * 0.0101 IREDELL 34480 340145 * 0.0336 LINCOLN 34540 340151 0.0052 HALIFAX 34410 340173 * 0.0015 WAKE 34910 360002 0.0141 ASHLAND 36020 360010 * 0.0074 TUSCARAWAS 36800 360013 * 0.0135 SHELBY 36760 360025 * 0.0077 ERIE 36220 360036 * 0.0126 WAYNE 36860 360040 0.0387 KNOX 36430 360044 0.0127 DARKE 36190 360055 * 0.0011 TRUMBULL 36790 360065 * 0.0075 HURON 36400 360070 0.0038 STARK 36770 360071 0.0035 VAN WERT 36820 360084 0.0038 STARK 36770 360086 * 0.0186 CLARK 36110 360096 0.0071 COLUMBIANA 36140 360107 0.0119 SANDUSKY 36730 360125 * 0.0133 ASHTABULA 36030CMS-1498-P 1004

Provider Number Reclassified for FY 2011 ProposedOutMigration Adjustment Qualifying County Name County Code 360131 0.0038 STARK 36770 360151 0.0038 STARK 36770 360156 0.0119 SANDUSKY 36730 360161 0.0011 TRUMBULL 36790 360175 * 0.0183 CLINTON 36130 360185 * 0.0071 COLUMBIANA 36140 360245 * 0.0133 ASHTABULA 36030 360355 0.0186 CLARK 36110 370014 * 0.0361 BRYAN 37060 370015 * 0.0366 MAYES 37480 370023 0.0090 STEPHENS 37680 370065 0.0096 CRAIG 37170 370072 0.0258 LATIMER 37380 370083 0.0051 PUSHMATAHA 37630 370100 0.0100 CHOCTAW 37110 370149 0.0302 POTTAWATOMIE 37620 370156 0.0121 GARVIN 37240 370169 0.0163 MCINTOSH 37450 370172 0.0258 LATIMER 37380 370214 0.0121 GARVIN 37240 380022 * 0.0067 LINN 38210 390008 0.0060 LAWRENCE 39450 390016 * 0.0060 LAWRENCE 39450 390030 * 0.0147 SCHUYLKILL 39650 390031 * 0.0147 SCHUYLKILL 39650 390039 0.0037 SOMERSET 39680 390044 0.0191 BERKS 39110 390052 0.0047 CLEARFIELD 39230 390056 0.0036 HUNTINGDON 39380 390065 * 0.0532 ADAMS 39000 390066 * 0.0372 LEBANON 39460 390079 * 0.0003 BRADFORD 39130 390086 * 0.0047 CLEARFIELD 39230 390096 0.0191 BERKS 39110 390110 * 0.0003 CAMBRIA 39160 390112 0.0037 SOMERSET 39680 390113 * 0.0053 CRAWFORD 39260 390117 0.0002 BEDFORD 39100 390122 0.0053 CRAWFORD 39260 390125 0.0022 WAYNE 39760 390130 * 0.0003 CAMBRIA 39160 390138 * 0.0218 FRANKLIN 39350CMS-1498-P 1005

Provider Number Reclassified for FY 2011 ProposedOutMigration Adjustment Qualifying County Name County Code 390146 0.0022 WARREN 39740 390150 0.0031 GREENE 39370 390151 * 0.0218 FRANKLIN 39350 390162 * 0.0215 NORTHAMPTON 39590 390173 0.0037 INDIANA 39390 390183 * 0.0147 SCHUYLKILL 39650 390201 0.1170 MONROE 39550 390236 0.0003 BRADFORD 39130 390313 * 0.0147 SCHUYLKILL 39650 390316 0.0191 BERKS 39110 420005 0.0012 DILLON 42160 420007 * 0.0027 SPARTANBURG 42410 420019 0.0158 CHESTER 42110 420020 * 0.0024 GEORGETOWN 42210 420027 * 0.0108 ANDERSON 42030 420030 * 0.0069 COLLETON 42140 420036 * 0.0064 LANCASTER 42280 420039 * 0.0176 UNION 42430 420043 0.0157 CHEROKEE 42100 420053 0.0035 NEWBERRY 42350 420054 0.0008 MARLBORO 42340 420055 0.0029 MARION 42330 420062 0.0125 CHESTERFIELD 42120 420068 * 0.0027 ORANGEBURG 42370 420069 * 0.0052 CLARENDON 42130 420070 * 0.0051 SUMTER 42420 420083 * 0.0027 SPARTANBURG 42410 420098 0.0024 GEORGETOWN 42210 430008 0.0535 BROOKINGS 43050 430048 0.0129 LAWRENCE 43400 430094 0.0129 LAWRENCE 43400 440007 0.0219 COFFEE 44150 440008 0.0449 HENDERSON 44380 440016 0.0144 CARROLL 44080 440031 0.0019 ROANE 44720 440033 0.0027 CAMPBELL 44060 440035 * 0.0301 MONTGOMERY 44620 440047 0.0338 GIBSON 44260 440051 0.0082 MC NAIRY 44540 440057 0.0021 CLAIBORNE 44120 440060 0.0338 GIBSON 44260 440063 0.0033 WASHINGTON 44890CMS-1498-P 1006

Provider Number Reclassified for FY 2011 ProposedOutMigration Adjustment Qualifying County Name County Code 440070 0.0109 DECATUR 44190 440081 0.0052 SEVIER 44770 440084 0.0025 MONROE 44610 440105 0.0033 WASHINGTON 44890 440109 0.0070 HARDIN 44350 440115 0.0338 GIBSON 44260 440137 0.0738 BEDFORD 44010 440144 * 0.0219 COFFEE 44150 440148 0.0296 DE KALB 44200 440174 * 0.0312 HAYWOOD 44370 440180 0.0027 CAMPBELL 44060 440181 0.0365 HARDEMAN 44340 440182 0.0144 CARROLL 44080 440184 0.0033 WASHINGTON 44890 440185 * 0.0230 BRADLEY 44050 450032 * 0.0254 HARRISON 45620 450039 * 0.0024 TARRANT 45910 450052 * 0.0276 BOSQUE 45160 450064 * 0.0024 TARRANT 45910 450087 * 0.0024 TARRANT 45910 450090 0.0650 COOKE 45340 450099 * 0.0145 GRAY 45563 450135 * 0.0024 TARRANT 45910 450137 * 0.0024 TARRANT 45910 450144 * 0.0559 ANDREWS 45010 450163 0.0054 KLEBERG 45743 450192 0.0271 HILL 45651 450194 0.0213 CHEROKEE 45281 450210 0.0151 PANOLA 45842 450224 * 0.0195 WOOD 45974 450236 0.0389 HOPKINS 45654 450270 0.0271 HILL 45651 450283 * 0.0653 VAN ZANDT 45947 450347 * 0.0370 WALKER 45949 450348 * 0.0059 FALLS 45500 450370 * 0.0235 COLORADO 45312 450389 * 0.0618 HENDERSON 45640 450395 0.0441 POLK 45850 450419 * 0.0024 TARRANT 45910 450438 * 0.0235 COLORADO 45312 450451 0.0536 SOMERVELL 45893 450460 0.0053 TYLER 45942 450497 0.0375 MONTAGUE 45800CMS-1498-P 1007

Provider Number Reclassified for FY 2011 ProposedOutMigration Adjustment Qualifying County Name County Code 450539 0.0067 HALE 45582 450547 * 0.0195 WOOD 45974 450563 * 0.0024 TARRANT 45910 450565 * 0.0470 PALO PINTO 45841 450573 0.0126 JASPER 45690 450596 * 0.0743 HOOD 45653 450597 0.0003 DE WITT 45420 450639 * 0.0024 TARRANT 45910 450641 0.0375 MONTAGUE 45800 450672 * 0.0024 TARRANT 45910 450675 * 0.0024 TARRANT 45910 450677 * 0.0024 TARRANT 45910 450698 0.0127 LAMB 45751 450747 * 0.0126 ANDERSON 45000 450755 0.0276 HOCKLEY 45652 450770 * 0.0182 MILAM 45795 450779 * 0.0024 TARRANT 45910 450813 0.0126 ANDERSON 45000 450872 * 0.0024 TARRANT 45910 450880 * 0.0024 TARRANT 45910 450884 0.0049 UPSHUR 45943 450886 * 0.0024 TARRANT 45910 450888 0.0024 TARRANT 45910 460001 0.0001 UTAH 46240 460013 0.0001 UTAH 46240 460017 0.0383 BOX ELDER 46010 460023 0.0001 UTAH 46240 460039 * 0.0383 BOX ELDER 46010 460043 0.0001 UTAH 46240 460052 0.0001 UTAH 46240 490002 0.0003 RUSSELL 49830 490019 * 0.1088 CULPEPER 49230 490038 0.0003 SMYTH 49860 490084 0.0187 ESSEX 49280 490105 0.0003 SMYTH 49860 490110 0.0185 MONTGOMERY 49600 500003 * 0.0166 SKAGIT 50280 500007 * 0.0166 SKAGIT 50280 500019 0.0131 LEWIS 50200 500024 0.0065 THURSTON 50330 500039 * 0.0094 KITSAP 50170 500041 * 0.0020 COWLITZ 50070 500139 0.0065 THURSTON 50330CMS-1498-P 1008

Provider Number Reclassified for FY 2011 ProposedOutMigration Adjustment Qualifying County Name County Code 500143 0.0065 THURSTON 50330 510012 0.0124 MASON 51260 510018 * 0.0188 JACKSON 51170 510047 * 0.0269 MARION 51240 520009 0.0027 OUTAGAMIE 52430 520028 * 0.0286 GREEN 52220 520035 0.0076 SHEBOYGAN 52580 520044 0.0076 SHEBOYGAN 52580 520045 0.0022 WINNEBAGO 52690 520048 0.0022 WINNEBAGO 52690 520057 0.0193 SAUK 52550 520059 * 0.0195 RACINE 52500 520071 * 0.0161 JEFFERSON 52270 520076 * 0.0146 DODGE 52130 520088 0.0084 FOND DU LAC 52190 520095 * 0.0193 SAUK 52550 520096 * 0.0195 RACINE 52500 520102 * 0.0242 WALWORTH 52630 520116 * 0.0161 JEFFERSON 52270 520160 0.0027 OUTAGAMIE 52430 520198 0.0022 WINNEBAGO 52690CMS-1498-P 1009

TABLE 5.—LIST OF MEDICARE SEVERITY DIAGNOSIS-RELATED GROUPS (MSDRGS), RELATIVE WEIGHTING FACTORS, AND GEOMETRIC AND ARITHMETIC MEAN LENGTH OF STAY

MSDRG FY 2011 Proposed RulePostAcute DRG FY 2011 Proposed Rule Special Pay DRG MDC TYPE MS-DRG Title Weights Geometric

mean LOS Arithmetic

mean LOS

001 No No PRE SURG HEART TRANSPLANT OR IMPLANT OF HEART ASSIST SYSTEM W MCC 26.1241 31.7 41.8

002 No No PRE SURG HEART TRANSPLANT OR IMPLANT OF HEART ASSIST SYSTEM W/O MCC 13.5332 17.7 22.8

003 Yes No PRE SURG ECMO OR TRACH W MV 96+ HRS OR PDX EXC FACE, MOUTH & NECK W MAJ O.R. 18.0135 30.0 36.6

004 Yes No PRE SURG TRACH W MV 96+ HRS OR PDX EXC FACE, MOUTH & NECK W/O MAJ O.R. 11.1832 22.2 27.1

005 No No PRE SURG LIVER TRANSPLANT W MCC OR INTESTINAL TRANSPLANT 10.2640 15.0 20.0 006 No No PRE SURG LIVER TRANSPLANT W/O MCC 4.8067 8.3 9.2 007 No No PRE SURG LUNG TRANSPLANT 9.3918 15.6 18.7

008 No No PRE SURG SIMULTANEOUS PANCREAS/KIDNEY TRANSPLANT 4.9951 10.2 11.8 010 No No PRE SURG PANCREAS TRANSPLANT 3.7220 8.6 9.7

011 No No PRE SURG TRACHEOSTOMY FOR FACE,MOUTH & NECK DIAGNOSES W MCC 4.7558 12.3 15.6

012 No No PRE SURG TRACHEOSTOMY FOR FACE,MOUTH & NECK DIAGNOSES W CC 3.1179 8.5 10.1

013 No No PRE SURG TRACHEOSTOMY FOR FACE,MOUTH & NECK DIAGNOSES W/O CC/MCC 1.9480 5.7 6.7

014 No No PRE SURG ALLOGENEIC BONE MARROW TRANSPLANT 11.3961 20.7 27.7

015 No No PRE SURG AUTOLOGOUS BONE MARROW TRANSPLANT 5.8721 16.7 19.2

020 No No 01 SURG INTRACRANIAL VASCULAR PROCEDURES W PDX HEMORRHAGE W MCC 8.2168 14.0 17.2

021 No No 01 SURG INTRACRANIAL VASCULAR PROCEDURES W PDX HEMORRHAGE W CC 6.2673 12.2 13.9

022 No No 01 SURG INTRACRANIAL VASCULAR PROCEDURES W PDX HEMORRHAGE W/O CC/MCC 4.1377 6.6 8.4

023 No No 01 SURG CRANIO W MAJOR DEV IMPL/ACUTE COMPLEX CNS PDX 5.0829 8.3 11.8CMS-1498-P 1010

MSDRG FY 2011 Proposed RulePostAcute DRG FY 2011 Proposed Rule Special Pay DRG MDC TYPE MS-DRG Title Weights Geometric

mean LOS Arithmetic

mean LOS W MCC OR CHEMO IMPLANT

024 No No 01 SURG CRANIO W MAJOR DEV IMPL/ACUTE COMPLEX CNS PDX W/O MCC 3.4948 5.7 8.1

025 Yes No 01 SURG CRANIOTOMY & ENDOVASCULAR INTRACRANIAL PROCEDURES W MCC 4.7528 8.8 11.5

026 Yes No 01 SURG CRANIOTOMY & ENDOVASCULAR INTRACRANIAL PROCEDURES W CC 2.9804 5.8 7.3

027 Yes No 01 SURG CRANIOTOMY & ENDOVASCULAR INTRACRANIAL PROCEDURES W/O CC/MCC 2.1382 3.0 3.9 028 Yes Yes 01 SURG SPINAL PROCEDURES W MCC 5.3583 10.1 13.1

029 Yes Yes 01 SURG SPINAL PROCEDURES W CC OR SPINAL NEUROSTIMULATORS 2.8798 4.7 6.6

030 Yes Yes 01 SURG SPINAL PROCEDURES W/O CC/MCC 1.6452 2.5 3.3

031 Yes No 01 SURG VENTRICULAR SHUNT PROCEDURES W MCC 4.1020 8.5 12.2

032 Yes No 01 SURG VENTRICULAR SHUNT PROCEDURES W CC 1.9339 3.7 5.4

033 Yes No 01 SURG VENTRICULAR SHUNT PROCEDURES W/O CC/MCC 1.3695 2.1 2.7

034 No No 01 SURG CAROTID ARTERY STENT PROCEDURE W MCC 3.5290 4.7 7.0

035 No No 01 SURG CAROTID ARTERY STENT PROCEDURE W CC 2.1572 2.2 3.2

036 No No 01 SURG CAROTID ARTERY STENT PROCEDURE W/O CC/MCC 1.6539 1.3 1.5

037 No No 01 SURG EXTRACRANIAL PROCEDURES W MCC 3.1652 5.8 8.4

038 No No 01 SURG EXTRACRANIAL PROCEDURES W CC 1.5610 2.4 3.5

039 No No 01 SURG EXTRACRANIAL PROCEDURES W/O CC/MCC 1.0278 1.4 1.7

040 Yes Yes 01 SURG PERIPH/CRANIAL NERVE & OTHER NERV SYST PROC W MCC 3.9264 9.0 12.2

041 Yes Yes 01 SURG PERIPH/CRANIAL NERVE & OTHER NERV SYST PROC W CC OR PERIPH NEUROSTIM 2.1447 5.0 6.7

042 Yes Yes 01 SURG PERIPH/CRANIAL NERVE & OTHER NERV SYST PROC W/O CC/MCC 1.6950 2.3 3.2

052 No No 01 MED SPINAL DISORDERS & INJURIES W CC/MCC 1.5964 4.5 6.6CMS-1498-P 1011

MSDRG FY 2011 Proposed RulePostAcute DRG FY 2011 Proposed Rule Special Pay DRG MDC TYPE MS-DRG Title Weights Geometric

mean LOS Arithmetic

mean LOS

053 No No 01 MED SPINAL DISORDERS & INJURIES W/O CC/MCC 0.8417 2.9 3.6

054 Yes No 01 MED NERVOUS SYSTEM NEOPLASMS W MCC 1.4801 4.6 6.3

055 Yes No 01 MED NERVOUS SYSTEM NEOPLASMS W/O MCC 1.0651 3.5 4.6

056 Yes No 01 MED DEGENERATIVE NERVOUS SYSTEM DISORDERS W MCC 1.6720 5.5 7.2

057 Yes No 01 MED DEGENERATIVE NERVOUS SYSTEM DISORDERS W/O MCC 0.9316 3.7 4.9

058 No No 01 MED MULTIPLE SCLEROSIS & CEREBELLAR ATAXIA W MCC 1.5781 5.5 7.3

059 No No 01 MED MULTIPLE SCLEROSIS & CEREBELLAR ATAXIA W CC 0.9818 4.1 4.9

060 No No 01 MED MULTIPLE SCLEROSIS & CEREBELLAR ATAXIA W/O CC/MCC 0.7525 3.2 3.8

061 No No 01 MED ACUTE ISCHEMIC STROKE W USE OF THROMBOLYTIC AGENT W MCC 2.9397 6.4 8.4

062 No No 01 MED ACUTE ISCHEMIC STROKE W USE OF THROMBOLYTIC AGENT W CC 1.9450 4.8 5.6

063 No No 01 MED ACUTE ISCHEMIC STROKE W USE OF THROMBOLYTIC AGENT W/O CC/MCC 1.5296 3.4 3.9

064 Yes No 01 MED INTRACRANIAL HEMORRHAGE OR CEREBRAL INFARCTION W MCC 1.8601 5.1 6.9

065 Yes No 01 MED INTRACRANIAL HEMORRHAGE OR CEREBRAL INFARCTION W CC 1.1637 4.0 4.8

066 Yes No 01 MED INTRACRANIAL HEMORRHAGE OR CEREBRAL INFARCTION W/O CC/MCC 0.8174 2.7 3.3

067 No No 01 MED NONSPECIFIC CVA & PRECEREBRAL OCCLUSION W/O INFARCT W MCC 1.4176 4.2 5.5

068 No No 01 MED NONSPECIFIC CVA & PRECEREBRAL OCCLUSION W/O INFARCT W/O MCC 0.8746 2.7 3.3 069 No No 01 MED TRANSIENT ISCHEMIA 0.7292 2.3 2.8

070 Yes No 01 MED NONSPECIFIC CEREBROVASCULAR DISORDERS W MCC 1.8345 5.6 7.4

071 Yes No 01 MED NONSPECIFIC CEREBROVASCULAR DISORDERS W CC 1.1008 4.1 5.1 072 Yes No 01 MED NONSPECIFIC 0.7468 2.5 3.1CMS-1498-P 1012

MSDRG FY 2011 Proposed RulePostAcute DRG FY 2011 Proposed Rule Special Pay DRG MDC TYPE MS-DRG Title Weights Geometric

mean LOS Arithmetic

mean LOS CEREBROVASCULAR DISORDERS W/O CC/MCC

073 No No 01 MED CRANIAL & PERIPHERAL NERVE DISORDERS W MCC 1.2959 4.2 5.6

074 No No 01 MED CRANIAL & PERIPHERAL NERVE DISORDERS W/O MCC 0.8592 3.2 4.1 075 No No 01 MED VIRAL MENINGITIS W CC/MCC 1.6538 5.5 7.0 076 No No 01 MED VIRAL MENINGITIS W/O CC/MCC 0.9054 3.3 3.9

077 No No 01 MED HYPERTENSIVE ENCEPHALOPATHY W MCC 1.7332 5.1 6.4

078 No No 01 MED HYPERTENSIVE ENCEPHALOPATHY W CC 1.0145 3.5 4.4

079 No No 01 MED HYPERTENSIVE ENCEPHALOPATHY W/O CC/MCC 0.7500 2.6 3.1

080 No No 01 MED NONTRAUMATIC STUPOR & COMA W MCC 1.1831 3.6 4.9

081 No No 01 MED NONTRAUMATIC STUPOR & COMA W/O MCC 0.7350 2.7 3.4

082 No No 01 MED TRAUMATIC STUPOR & COMA, COMA >1 HR W MCC 2.0028 3.5 6.1

083 No No 01 MED TRAUMATIC STUPOR & COMA, COMA >1 HR W CC 1.3194 3.4 4.7

084 No No 01 MED TRAUMATIC STUPOR & COMA, COMA >1 HR W/O CC/MCC 0.8899 2.2 2.8

085 Yes No 01 MED TRAUMATIC STUPOR & COMA, COMA <1 HR W MCC 2.1345 5.2 7.2

086 Yes No 01 MED TRAUMATIC STUPOR & COMA, COMA <1 HR W CC 1.1979 3.7 4.6

087 Yes No 01 MED TRAUMATIC STUPOR & COMA, COMA <1 HR W/O CC/MCC 0.7872 2.3 2.9 088 No No 01 MED CONCUSSION W MCC 1.5102 4.2 5.5 089 No No 01 MED CONCUSSION W CC 0.9644 2.9 3.7 090 No No 01 MED CONCUSSION W/O CC/MCC 0.6943 1.9 2.3

091 Yes No 01 MED OTHER DISORDERS OF NERVOUS SYSTEM W MCC 1.6299 4.4 6.2

092 Yes No 01 MED OTHER DISORDERS OF NERVOUS SYSTEM W CC 0.9372 3.3 4.2

093 Yes No 01 MED OTHER DISORDERS OF NERVOUS SYSTEM W/O CC/MCC 0.6800 2.3 2.9

094 No No 01 MED BACTERIAL & TUBERCULOUS INFECTIONS OF NERVOUS SYSTEM W MCC 3.6910 8.9 11.8

095 No No 01 MED BACTERIAL & TUBERCULOUS INFECTIONS OF NERVOUS SYSTEM W CC 2.3934 6.6 8.4

096 No No 01 MED BACTERIAL & TUBERCULOUS INFECTIONS OF NERVOUS SYSTEM W/O CC/MCC 1.9171 4.6 5.7CMS-1498-P 1013

MSDRG FY 2011 Proposed RulePostAcute DRG FY 2011 Proposed Rule Special Pay DRG MDC TYPE MS-DRG Title Weights Geometric

mean LOS Arithmetic

mean LOS

097 No No 01 MED NON-BACTERIAL INFECT OF NERVOUS SYS EXC VIRAL MENINGITIS W MCC 3.2271 9.0 11.6

098 No No 01 MED NON-BACTERIAL INFECT OF NERVOUS SYS EXC VIRAL MENINGITIS W CC 1.9053 6.4 7.9

099 No No 01 MED NON-BACTERIAL INFECT OF NERVOUS SYS EXC VIRAL MENINGITIS W/O CC/MCC 1.2170 4.1 5.2 100 Yes No 01 MED SEIZURES W MCC 1.5091 4.5 6.0 101 Yes No 01 MED SEIZURES W/O MCC 0.7588 2.8 3.4 102 No No 01 MED HEADACHES W MCC 0.9997 3.1 4.3 103 No No 01 MED HEADACHES W/O MCC 0.6691 2.4 3.0

113 No No 02 SURG ORBITAL PROCEDURES W CC/MCC 1.8278 3.9 5.6

114 No No 02 SURG ORBITAL PROCEDURES W/O CC/MCC 0.9224 2.0 2.6

115 No No 02 SURG EXTRAOCULAR PROCEDURES EXCEPT ORBIT 1.2130 3.4 4.6

116 No No 02 SURG INTRAOCULAR PROCEDURES W CC/MCC 1.2920 3.0 4.5

117 No No 02 SURG INTRAOCULAR PROCEDURES W/O CC/MCC 0.7393 1.6 2.0

121 No No 02 MED ACUTE MAJOR EYE INFECTIONS W CC/MCC 0.9040 4.1 5.1

122 No No 02 MED ACUTE MAJOR EYE INFECTIONS W/O CC/MCC 0.6451 3.3 4.0

123 No No 02 MED NEUROLOGICAL EYE DISORDERS 0.7135 2.2 2.7

124 No No 02 MED OTHER DISORDERS OF THE EYE W MCC 1.1861 3.8 5.3

125 No No 02 MED OTHER DISORDERS OF THE EYE W/O MCC 0.6819 2.6 3.4

129 No No 03 SURG MAJOR HEAD & NECK PROCEDURES W CC/MCC OR MAJOR DEVICE 2.2555 3.7 5.2

130 No No 03 SURG MAJOR HEAD & NECK PROCEDURES W/O CC/MCC 1.2316 2.3 2.9

131 No No 03 SURG CRANIAL/FACIAL PROCEDURES W CC/MCC 2.0829 4.1 5.6

132 No No 03 SURG CRANIAL/FACIAL PROCEDURES W/O CC/MCC 1.2451 2.1 2.7

133 No No 03 SURG OTHER EAR, NOSE, MOUTH & THROAT O.R. PROCEDURES W CC/MCC 1.6960 3.6 5.4

134 No No 03 SURG OTHER EAR, NOSE, MOUTH & THROAT O.R. PROCEDURES W/O CC/MCC 0.8518 1.7 2.1CMS-1498-P 1014

MSDRG FY 2011 Proposed RulePostAcute DRG FY 2011 Proposed Rule Special Pay DRG MDC TYPE MS-DRG Title Weights Geometric

mean LOS Arithmetic

mean LOS

135 No No 03 SURG SINUS & MASTOID PROCEDURES W CC/MCC 1.9029 4.3 6.3

136 No No 03 SURG SINUS & MASTOID PROCEDURES W/O CC/MCC 0.9772 1.7 2.2

137 No No 03 SURG MOUTH PROCEDURES W CC/MCC 1.2952 3.6 5.0

138 No No 03 SURG MOUTH PROCEDURES W/O CC/MCC 0.7822 1.9 2.5 139 No No 03 SURG SALIVARY GLAND PROCEDURES 0.8827 1.4 1.8

146 No No 03 MED EAR, NOSE, MOUTH & THROAT MALIGNANCY W MCC 2.1722 6.5 9.0

147 No No 03 MED EAR, NOSE, MOUTH & THROAT MALIGNANCY W CC 1.2284 4.1 5.7

148 No No 03 MED EAR, NOSE, MOUTH & THROAT MALIGNANCY W/O CC/MCC 0.8118 2.4 3.3 149 No No 03 MED DYSEQUILIBRIUM 0.6363 2.2 2.6 150 No No 03 MED EPISTAXIS W MCC 1.2811 3.7 5.0 151 No No 03 MED EPISTAXIS W/O MCC 0.6366 2.3 2.9 152 No No 03 MED OTITIS MEDIA & URI W MCC 0.9623 3.3 4.3 153 No No 03 MED OTITIS MEDIA & URI W/O MCC 0.6256 2.5 3.1

154 No No 03 MED OTHER EAR, NOSE, MOUTH & THROAT DIAGNOSES W MCC 1.3957 4.3 5.8

155 No No 03 MED OTHER EAR, NOSE, MOUTH & THROAT DIAGNOSES W CC 0.9032 3.3 4.2

156 No No 03 MED OTHER EAR, NOSE, MOUTH & THROAT DIAGNOSES W/O CC/MCC 0.6184 2.4 2.9

157 No No 03 MED DENTAL & ORAL DISEASES W MCC 1.5699 4.8 6.7

158 No No 03 MED DENTAL & ORAL DISEASES W CC 0.8951 3.3 4.3

159 No No 03 MED DENTAL & ORAL DISEASES W/O CC/MCC 0.5858 2.1 2.7

163 Yes No 04 SURG MAJOR CHEST PROCEDURES W MCC 5.0701 11.5 14.0

164 Yes No 04 SURG MAJOR CHEST PROCEDURES W CC 2.6177 6.2 7.4

165 Yes No 04 SURG MAJOR CHEST PROCEDURES W/O CC/MCC 1.7756 3.7 4.4

166 Yes No 04 SURG OTHER RESP SYSTEM O.R. PROCEDURES W MCC 3.7415 9.5 12.0

167 Yes No 04 SURG OTHER RESP SYSTEM O.R. PROCEDURES W CC 2.0537 5.8 7.4

168 Yes No 04 SURG OTHER RESP SYSTEM O.R. PROCEDURES W/O CC/MCC 1.3012 3.3 4.3 175 Yes No 04 MED PULMONARY EMBOLISM W MCC 1.6088 5.7 6.8

176 Yes No 04 MED PULMONARY EMBOLISM W/O MCC 1.0666 4.2 4.9CMS-1498-P 1015

MSDRG FY 2011 Proposed RulePostAcute DRG FY 2011 Proposed Rule Special Pay DRG MDC TYPE MS-DRG Title Weights Geometric

mean LOS Arithmetic

mean LOS

177 Yes No 04 MED RESPIRATORY INFECTIONS & INFLAMMATIONS W MCC 2.0651 6.8 8.6

178 Yes No 04 MED RESPIRATORY INFECTIONS & INFLAMMATIONS W CC 1.4859 5.6 6.8

179 Yes No 04 MED RESPIRATORY INFECTIONS & INFLAMMATIONS W/O CC/MCC 0.9836 4.1 5.0

180 No No 04 MED RESPIRATORY NEOPLASMS W MCC 1.7310 5.7 7.5

181 No No 04 MED RESPIRATORY NEOPLASMS W CC 1.2155 4.2 5.4

182 No No 04 MED RESPIRATORY NEOPLASMS W/O CC/MCC 0.8086 2.8 3.7 183 No No 04 MED MAJOR CHEST TRAUMA W MCC 1.4874 5.2 6.5 184 No No 04 MED MAJOR CHEST TRAUMA W CC 0.9670 3.6 4.3

185 No No 04 MED MAJOR CHEST TRAUMA W/O CC/MCC 0.6761 2.6 3.0 186 Yes No 04 MED PLEURAL EFFUSION W MCC 1.5600 5.3 6.7 187 Yes No 04 MED PLEURAL EFFUSION W CC 1.0991 3.9 4.9

188 Yes No 04 MED PLEURAL EFFUSION W/O CC/MCC 0.7628 2.8 3.5

189 No No 04 MED PULMONARY EDEMA & RESPIRATORY FAILURE 1.2776 4.3 5.5

190 Yes No 04 MED CHRONIC OBSTRUCTIVE PULMONARY DISEASE W MCC 1.1894 4.5 5.5

191 Yes No 04 MED CHRONIC OBSTRUCTIVE PULMONARY DISEASE W CC 0.9712 3.8 4.6

192 Yes No 04 MED CHRONIC OBSTRUCTIVE PULMONARY DISEASE W/O CC/MCC 0.7200 3.1 3.7

193 Yes No 04 MED SIMPLE PNEUMONIA & PLEURISY W MCC 1.4753 5.3 6.5

194 Yes No 04 MED SIMPLE PNEUMONIA & PLEURISY W CC 1.0124 4.2 5.0

195 Yes No 04 MED SIMPLE PNEUMONIA & PLEURISY W/O CC/MCC 0.7073 3.1 3.7

196 Yes No 04 MED INTERSTITIAL LUNG DISEASE W MCC 1.6053 5.6 7.0

197 Yes No 04 MED INTERSTITIAL LUNG DISEASE W CC 1.1149 4.2 5.1

198 Yes No 04 MED INTERSTITIAL LUNG DISEASE W/O CC/MCC 0.8149 3.1 3.8 199 No No 04 MED PNEUMOTHORAX W MCC 1.7760 6.2 8.0 200 No No 04 MED PNEUMOTHORAX W CC 1.0198 3.7 4.8 201 No No 04 MED PNEUMOTHORAX W/O CC/MCC 0.7167 2.8 3.5

202 No No 04 MED BRONCHITIS & ASTHMA W CC/MCC 0.8395 3.4 4.1

203 No No 04 MED BRONCHITIS & ASTHMA W/O CC/MCC 0.6051 2.6 3.2CMS-1498-P 1016

MSDRG FY 2011 Proposed RulePostAcute DRG FY 2011 Proposed Rule Special Pay DRG MDC TYPE MS-DRG Title Weights Geometric

mean LOS Arithmetic

mean LOS

204 No No 04 MED RESPIRATORY SIGNS & SYMPTOMS 0.6705 2.1 2.7

205 Yes No 04 MED OTHER RESPIRATORY SYSTEM DIAGNOSES W MCC 1.3018 4.0 5.3

206 Yes No 04 MED OTHER RESPIRATORY SYSTEM DIAGNOSES W/O MCC 0.7546 2.6 3.3

207 Yes No 04 MED RESPIRATORY SYSTEM DIAGNOSIS W VENTILATOR SUPPORT 96+ HOURS 5.1936 12.6 14.8

208 No No 04 MED RESPIRATORY SYSTEM DIAGNOSIS W VENTILATOR SUPPORT <96 HOURS 2.2522 5.1 7.0

215 No No 05 SURG OTHER HEART ASSIST SYSTEM IMPLANT 12.7451 7.0 12.6

216 Yes No 05 SURG CARDIAC VALVE & OTH MAJ CARDIOTHORACIC PROC W CARD CATH W MCC 10.0309 14.7 17.1

217 Yes No 05 SURG CARDIAC VALVE & OTH MAJ CARDIOTHORACIC PROC W CARD CATH W CC 6.8081 9.8 11.0

218 Yes No 05 SURG CARDIAC VALVE & OTH MAJ CARDIOTHORACIC PROC W CARD CATH W/O CC/MCC 5.3407 7.2 8.0

219 Yes Yes 05 SURG CARDIAC VALVE & OTH MAJ CARDIOTHORACIC PROC W/O CARD CATH W MCC 8.0975 10.8 13.1

220 Yes Yes 05 SURG CARDIAC VALVE & OTH MAJ CARDIOTHORACIC PROC W/O CARD CATH W CC 5.3923 7.2 8.0

221 Yes Yes 05 SURG CARDIAC VALVE & OTH MAJ CARDIOTHORACIC PROC W/O CARD CATH W/O CC/MCC 4.4941 5.6 6.0

222 No No 05 SURG CARDIAC DEFIB IMPLANT W CARDIAC CATH W AMI/HF/SHOCK W MCC 8.5634 9.4 11.9

223 No No 05 SURG CARDIAC DEFIB IMPLANT W CARDIAC CATH W AMI/HF/SHOCK W/O MCC 6.4649 4.5 6.2

224 No No 05 SURG CARDIAC DEFIB IMPLANT W CARDIAC CATH W/O AMI/HF/SHOCK W MCC 7.6030 7.7 9.7

225 No No 05 SURG CARDIAC DEFIB IMPLANT W CARDIAC CATH W/O AMI/HF/SHOCK W/O MCC 6.0613 4.2 5.3

226 No No 05 SURG CARDIAC DEFIBRILLATOR IMPLANT W/O CARDIAC CATH W MCC 6.4967 5.0 7.8

227 No No 05 SURG CARDIAC DEFIBRILLATOR IMPLANT W/O CARDIAC CATH 5.2285 2.0 3.1CMS-1498-P 1017

MSDRG FY 2011 Proposed RulePostAcute DRG FY 2011 Proposed Rule Special Pay DRG MDC TYPE MS-DRG Title Weights Geometric

mean LOS Arithmetic

mean LOS W/O MCC

228 Yes No 05 SURG OTHER CARDIOTHORACIC PROCEDURES W MCC 7.6151 11.8 14.2

229 Yes No 05 SURG OTHER CARDIOTHORACIC PROCEDURES W CC 4.7934 7.3 8.3

230 Yes No 05 SURG OTHER CARDIOTHORACIC PROCEDURES W/O CC/MCC 3.5608 4.6 5.5

231 No No 05 SURG CORONARY BYPASS W PTCA W MCC 7.8893 10.9 12.9

232 No No 05 SURG CORONARY BYPASS W PTCA W/O MCC 5.8492 8.5 9.4

233 Yes No 05 SURG CORONARY BYPASS W CARDIAC CATH W MCC 7.2273 12.1 13.7

234 Yes No 05 SURG CORONARY BYPASS W CARDIAC CATH W/O MCC 4.8441 8.2 8.9

235 Yes No 05 SURG CORONARY BYPASS W/O CARDIAC CATH W MCC 5.8556 9.3 10.8

236 Yes No 05 SURG CORONARY BYPASS W/O CARDIAC CATH W/O MCC 3.7839 6.0 6.5

237 No No 05 SURG MAJOR CARDIOVASC PROCEDURES W MCC OR THORACIC AORTIC ANEURYSM REPAIR 5.1927 7.1 10.2

238 No No 05 SURG MAJOR CARDIOVASC PROCEDURES W/O MCC 3.1008 2.9 4.2

239 Yes No 05 SURG AMPUTATION FOR CIRC SYS DISORDERS EXC UPPER LIMB & TOE W MCC 4.5646 11.3 14.3

240 Yes No 05 SURG AMPUTATION FOR CIRC SYS DISORDERS EXC UPPER LIMB & TOE W CC 2.6639 7.8 9.6

241 Yes No 05 SURG AMPUTATION FOR CIRC SYS DISORDERS EXC UPPER LIMB & TOE W/O CC/MCC 1.4626 5.0 6.0

242 Yes No 05 SURG PERMANENT CARDIAC PACEMAKER IMPLANT W MCC 3.7327 6.3 8.1

243 Yes No 05 SURG PERMANENT CARDIAC PACEMAKER IMPLANT W CC 2.6570 3.8 4.9

244 Yes No 05 SURG PERMANENT CARDIAC PACEMAKER IMPLANT W/O CC/MCC 2.0486 2.2 2.8 245 No No 05 SURG AICD GENERATOR PROCEDURES 4.2684 2.5 3.8

246 No No 05 SURG PERC CARDIOVASC PROC W DRUG-ELUTING STENT W MCC OR 4+ VESSELS/STENTS 3.1923 3.5 5.0

247 No No 05 SURG PERC CARDIOVASC PROC W DRUG-ELUTING STENT W/O MCC 1.9812 1.8 2.3

248 No No 05 SURG PERC CARDIOVASC PROC W NON-DRUG-ELUTING STENT W 2.9295 4.4 6.0CMS-1498-P 1018

MSDRG FY 2011 Proposed RulePostAcute DRG FY 2011 Proposed Rule Special Pay DRG MDC TYPE MS-DRG Title Weights Geometric

mean LOS Arithmetic

mean LOS MCC OR 4+ VES/STENTS

249 No No 05 SURG PERC CARDIOVASC PROC W NON-DRUG-ELUTING STENT W/O MCC 1.7814 2.2 2.8

250 No No 05 SURG PERC CARDIOVASC PROC W/O CORONARY ARTERY STENT W MCC 2.8844 5.0 7.0

251 No No 05 SURG PERC CARDIOVASC PROC W/O CORONARY ARTERY STENT W/O MCC 1.8040 2.1 2.9

252 No No 05 SURG OTHER VASCULAR PROCEDURES W MCC 2.9853 5.2 7.9

253 No No 05 SURG OTHER VASCULAR PROCEDURES W CC 2.4104 4.4 6.0

254 No No 05 SURG OTHER VASCULAR PROCEDURES W/O CC/MCC 1.6244 2.0 2.7

255 Yes No 05 SURG UPPER LIMB & TOE AMPUTATION FOR CIRC SYSTEM DISORDERS W MCC 2.4930 7.0 9.2

256 Yes No 05 SURG UPPER LIMB & TOE AMPUTATION FOR CIRC SYSTEM DISORDERS W CC 1.5992 5.6 7.0

257 Yes No 05 SURG UPPER LIMB & TOE AMPUTATION FOR CIRC SYSTEM DISORDERS W/O CC/MCC 0.9629 3.4 4.3

258 No No 05 SURG CARDIAC PACEMAKER DEVICE REPLACEMENT W MCC 2.8707 5.2 7.0

259 No No 05 SURG CARDIAC PACEMAKER DEVICE REPLACEMENT W/O MCC 1.8381 2.4 3.2

260 No No 05 SURG CARDIAC PACEMAKER REVISION EXCEPT DEVICE REPLACEMENT W MCC 3.5636 7.7 10.8

261 No No 05 SURG CARDIAC PACEMAKER REVISION EXCEPT DEVICE REPLACEMENT W CC 1.6515 3.2 4.5

262 No No 05 SURG CARDIAC PACEMAKER REVISION EXCEPT DEVICE REPLACEMENT W/O CC/MCC 1.1284 2.0 2.6 263 No No 05 SURG VEIN LIGATION & STRIPPING 1.7560 3.5 5.6

264 Yes No 05 SURG OTHER CIRCULATORY SYSTEM O.R. PROCEDURES 2.5446 5.5 8.3 265 No No 05 SURG AICD LEAD PROCEDURES 2.3205 2.2 3.3

280 Yes No 05 MED ACUTE MYOCARDIAL INFARCTION, DISCHARGED ALIVE W MCC 1.8435 5.2 6.6

281 Yes No 05 MED ACUTE MYOCARDIAL INFARCTION, DISCHARGED ALIVE W CC 1.1852 3.6 4.4CMS-1498-P 1019

MSDRG FY 2011 Proposed RulePostAcute DRG FY 2011 Proposed Rule Special Pay DRG MDC TYPE MS-DRG Title Weights Geometric

mean LOS Arithmetic

mean LOS

282 Yes No 05 MED ACUTE MYOCARDIAL INFARCTION, DISCHARGED ALIVE W/O CC/MCC 0.8042 2.2 2.8

283 No No 05 MED ACUTE MYOCARDIAL INFARCTION, EXPIRED W MCC 1.7107 3.2 5.1

284 No No 05 MED ACUTE MYOCARDIAL INFARCTION, EXPIRED W CC 0.8884 2.1 3.0

285 No No 05 MED ACUTE MYOCARDIAL INFARCTION, EXPIRED W/O CC/MCC 0.5717 1.4 1.8

286 No No 05 MED CIRCULATORY DISORDERS EXCEPT AMI, W CARD CATH W MCC 1.9978 4.8 6.5

287 No No 05 MED CIRCULATORY DISORDERS EXCEPT AMI, W CARD CATH W/O MCC 1.0876 2.5 3.2

288 Yes No 05 MED ACUTE & SUBACUTE ENDOCARDITIS W MCC 2.9607 8.6 10.9

289 Yes No 05 MED ACUTE & SUBACUTE ENDOCARDITIS W CC 1.8355 6.4 7.8

290 Yes No 05 MED ACUTE & SUBACUTE ENDOCARDITIS W/O CC/MCC 1.2880 4.4 5.6

291 Yes No 05 MED HEART FAILURE & SHOCK W MCC 1.4882 4.8 6.2 292 Yes No 05 MED HEART FAILURE & SHOCK W CC 1.0245 4.0 4.9

293 Yes No 05 MED HEART FAILURE & SHOCK W/O CC/MCC 0.6810 2.8 3.3

294 No No 05 MED DEEP VEIN THROMBOPHLEBITIS W CC/MCC 1.0394 4.4 5.4

295 No No 05 MED DEEP VEIN THROMBOPHLEBITIS W/O CC/MCC 0.6356 3.4 4.0

296 No No 05 MED CARDIAC ARREST, UNEXPLAINED W MCC 1.1698 1.8 2.8

297 No No 05 MED CARDIAC ARREST, UNEXPLAINED W CC 0.6844 1.4 1.8

298 No No 05 MED CARDIAC ARREST, UNEXPLAINED W/O CC/MCC 0.4523 1.1 1.2

299 Yes No 05 MED PERIPHERAL VASCULAR DISORDERS W MCC 1.4050 4.7 6.1

300 Yes No 05 MED PERIPHERAL VASCULAR DISORDERS W CC 0.9737 3.9 4.9

301 Yes No 05 MED PERIPHERAL VASCULAR DISORDERS W/O CC/MCC 0.6579 2.8 3.5 302 No No 05 MED ATHEROSCLEROSIS W MCC 0.9712 3.0 4.0 303 No No 05 MED ATHEROSCLEROSIS W/O MCC 0.5804 2.0 2.4 304 No No 05 MED HYPERTENSION W MCC 1.0182 3.5 4.5 305 No No 05 MED HYPERTENSION W/O MCC 0.6117 2.2 2.7 306 No No 05 MED CARDIAC CONGENITAL & 1.4681 4.4 5.9CMS-1498-P 1020

MSDRG FY 2011 Proposed RulePostAcute DRG FY 2011 Proposed Rule Special Pay DRG MDC TYPE MS-DRG Title Weights Geometric

mean LOS Arithmetic

mean LOS VALVULAR DISORDERS W MCC

307 No No 05 MED CARDIAC CONGENITAL & VALVULAR DISORDERS W/O MCC 0.7927 2.7 3.4

308 No No 05 MED CARDIAC ARRHYTHMIA & CONDUCTION DISORDERS W MCC 1.2270 4.0 5.2

309 No No 05 MED CARDIAC ARRHYTHMIA & CONDUCTION DISORDERS W CC 0.8331 3.0 3.7

310 No No 05 MED CARDIAC ARRHYTHMIA & CONDUCTION DISORDERS W/O CC/MCC 0.5670 2.1 2.5 311 No No 05 MED ANGINA PECTORIS 0.5038 1.8 2.2 312 No No 05 MED SYNCOPE & COLLAPSE 0.7136 2.4 2.9 313 No No 05 MED CHEST PAIN 0.5481 1.7 2.1

314 Yes No 05 MED OTHER CIRCULATORY SYSTEM DIAGNOSES W MCC 1.8232 5.0 6.9

315 Yes No 05 MED OTHER CIRCULATORY SYSTEM DIAGNOSES W CC 0.9645 3.3 4.2

316 Yes No 05 MED OTHER CIRCULATORY SYSTEM DIAGNOSES W/O CC/MCC 0.6124 2.1 2.6

326 Yes No 06 SURG STOMACH, ESOPHAGEAL & DUODENAL PROC W MCC 5.8087 12.6 16.3

327 Yes No 06 SURG STOMACH, ESOPHAGEAL & DUODENAL PROC W CC 2.7293 6.9 8.8

328 Yes No 06 SURG STOMACH, ESOPHAGEAL & DUODENAL PROC W/O CC/MCC 1.4363 2.9 3.8

329 Yes No 06 SURG MAJOR SMALL & LARGE BOWEL PROCEDURES W MCC 5.2995 12.5 15.4

330 Yes No 06 SURG MAJOR SMALL & LARGE BOWEL PROCEDURES W CC 2.5865 7.8 9.1

331 Yes No 06 SURG MAJOR SMALL & LARGE BOWEL PROCEDURES W/O CC/MCC 1.6299 4.8 5.3 332 Yes No 06 SURG RECTAL RESECTION W MCC 4.8539 11.8 14.2 333 Yes No 06 SURG RECTAL RESECTION W CC 2.5015 7.1 8.1

334 Yes No 06 SURG RECTAL RESECTION W/O CC/MCC 1.5980 4.2 4.9

335 Yes No 06 SURG PERITONEAL ADHESIOLYSIS W MCC 4.2742 11.4 13.7

336 Yes No 06 SURG PERITONEAL ADHESIOLYSIS W CC 2.3459 7.2 8.8

337 Yes No 06 SURG PERITONEAL ADHESIOLYSIS W/O CC/MCC 1.4851 4.0 5.1

338 No No 06 SURG APPENDECTOMY W COMPLICATED PRINCIPAL DIAG W MCC 3.2121 8.3 10.0

339 No No 06 SURG APPENDECTOMY W COMPLICATED PRINCIPAL DIAG 1.8691 5.6 6.5CMS-1498-P 1021

MSDRG FY 2011 Proposed RulePostAcute DRG FY 2011 Proposed Rule Special Pay DRG MDC TYPE MS-DRG Title Weights Geometric

mean LOS Arithmetic

mean LOS W CC

340 No No 06 SURG APPENDECTOMY W COMPLICATED PRINCIPAL DIAG W/O CC/MCC 1.2447 3.2 3.7

341 No No 06 SURG APPENDECTOMY W/O COMPLICATED PRINCIPAL DIAG W MCC 2.2602 4.9 6.6

342 No No 06 SURG APPENDECTOMY W/O COMPLICATED PRINCIPAL DIAG W CC 1.3301 3.0 3.8

343 No No 06 SURG APPENDECTOMY W/O COMPLICATED PRINCIPAL DIAG W/O CC/MCC 0.9636 1.7 2.0

344 No No 06 SURG MINOR SMALL & LARGE BOWEL PROCEDURES W MCC 3.1533 8.9 11.2

345 No No 06 SURG MINOR SMALL & LARGE BOWEL PROCEDURES W CC 1.6999 6.0 7.0

346 No No 06 SURG MINOR SMALL & LARGE BOWEL PROCEDURES W/O CC/MCC 1.1887 4.2 4.6

347 No No 06 SURG ANAL & STOMAL PROCEDURES W MCC 2.4021 6.3 8.8

348 No No 06 SURG ANAL & STOMAL PROCEDURES W CC 1.3720 4.1 5.4

349 No No 06 SURG ANAL & STOMAL PROCEDURES W/O CC/MCC 0.7996 2.3 2.9

350 No No 06 SURG INGUINAL & FEMORAL HERNIA PROCEDURES W MCC 2.4467 5.6 7.8

351 No No 06 SURG INGUINAL & FEMORAL HERNIA PROCEDURES W CC 1.3581 3.5 4.5

352 No No 06 SURG INGUINAL & FEMORAL HERNIA PROCEDURES W/O CC/MCC 0.8651 1.9 2.4

353 No No 06 SURG HERNIA PROCEDURES EXCEPT INGUINAL & FEMORAL W MCC 2.7608 6.3 8.4

354 No No 06 SURG HERNIA PROCEDURES EXCEPT INGUINAL & FEMORAL W CC 1.5574 4.0 5.0

355 No No 06 SURG HERNIA PROCEDURES EXCEPT INGUINAL & FEMORAL W/O CC/MCC 1.0383 2.3 2.8

356 Yes No 06 SURG OTHER DIGESTIVE SYSTEM O.R. PROCEDURES W MCC 4.0301 9.2 12.7

357 Yes No 06 SURG OTHER DIGESTIVE SYSTEM O.R. PROCEDURES W CC 2.1501 5.7 7.4

358 Yes No 06 SURG OTHER DIGESTIVE SYSTEM O.R. PROCEDURES W/O CC/MCC 1.3042 3.0 4.0

368 No No 06 MED MAJOR ESOPHAGEAL DISORDERS W MCC 1.7585 5.1 6.7

369 No No 06 MED MAJOR ESOPHAGEAL DISORDERS W CC 1.0755 3.7 4.5 370 No No 06 MED MAJOR ESOPHAGEAL 0.7497 2.6 3.1CMS-1498-P 1022

MSDRG FY 2011 Proposed RulePostAcute DRG FY 2011 Proposed Rule Special Pay DRG MDC TYPE MS-DRG Title Weights Geometric

mean LOS Arithmetic

mean LOS DISORDERS W/O CC/MCC

371 Yes No 06 MED MAJOR GASTROINTESTINAL DISORDERS & PERITONEAL INFECTIONS W MCC 2.0998 6.8 8.9

372 Yes No 06 MED MAJOR GASTROINTESTINAL DISORDERS & PERITONEAL INFECTIONS W CC 1.2891 5.3 6.5

373 Yes No 06 MED MAJOR GASTROINTESTINAL DISORDERS & PERITONEAL INFECTIONS W/O CC/MCC 0.8543 3.9 4.6

374 Yes No 06 MED DIGESTIVE MALIGNANCY W MCC 2.0619 6.3 8.5 375 Yes No 06 MED DIGESTIVE MALIGNANCY W CC 1.2773 4.4 5.8

376 Yes No 06 MED DIGESTIVE MALIGNANCY W/O CC/MCC 0.8405 2.8 3.6 377 Yes No 06 MED G.I. HEMORRHAGE W MCC 1.7496 5.0 6.4 378 Yes No 06 MED G.I. HEMORRHAGE W CC 1.0235 3.5 4.2 379 Yes No 06 MED G.I. HEMORRHAGE W/O CC/MCC 0.7107 2.6 3.0

380 Yes No 06 MED COMPLICATED PEPTIC ULCER W MCC 1.9498 5.8 7.5

381 Yes No 06 MED COMPLICATED PEPTIC ULCER W CC 1.1172 3.9 4.8

382 Yes No 06 MED COMPLICATED PEPTIC ULCER W/O CC/MCC 0.8117 2.9 3.5

383 No No 06 MED UNCOMPLICATED PEPTIC ULCER W MCC 1.1936 4.2 5.3

384 No No 06 MED UNCOMPLICATED PEPTIC ULCER W/O MCC 0.8308 3.0 3.6

385 No No 06 MED INFLAMMATORY BOWEL DISEASE W MCC 1.9145 6.3 8.4

386 No No 06 MED INFLAMMATORY BOWEL DISEASE W CC 1.0439 4.2 5.3

387 No No 06 MED INFLAMMATORY BOWEL DISEASE W/O CC/MCC 0.7775 3.2 3.9 388 Yes No 06 MED G.I. OBSTRUCTION W MCC 1.6490 5.5 7.2 389 Yes No 06 MED G.I. OBSTRUCTION W CC 0.9323 3.9 4.8 390 Yes No 06 MED G.I. OBSTRUCTION W/O CC/MCC 0.6361 2.8 3.3

391 No No 06 MED ESOPHAGITIS, GASTROENT & MISC DIGEST DISORDERS W MCC 1.1553 3.9 5.2

392 No No 06 MED ESOPHAGITIS, GASTROENT & MISC DIGEST DISORDERS W/O MCC 0.7152 2.8 3.4

393 No No 06 MED OTHER DIGESTIVE SYSTEM DIAGNOSES W MCC 1.6569 4.9 6.9

394 No No 06 MED OTHER DIGESTIVE SYSTEM DIAGNOSES W CC 0.9917 3.7 4.7 395 No No 06 MED OTHER DIGESTIVE SYSTEM 0.6717 2.5 3.1CMS-1498-P 1023

MSDRG FY 2011 Proposed RulePostAcute DRG FY 2011 Proposed Rule Special Pay DRG MDC TYPE MS-DRG Title Weights Geometric

mean LOS Arithmetic

mean LOS DIAGNOSES W/O CC/MCC

405 Yes No 07 SURG PANCREAS, LIVER & SHUNT PROCEDURES W MCC 5.6074 12.0 15.9

406 Yes No 07 SURG PANCREAS, LIVER & SHUNT PROCEDURES W CC 2.7826 6.5 8.4

407 Yes No 07 SURG PANCREAS, LIVER & SHUNT PROCEDURES W/O CC/MCC 1.8691 4.2 5.2

408 No No 07 SURG BILIARY TRACT PROC EXCEPT ONLY CHOLECYST W OR W/O C.D.E. W MCC 3.9590 11.0 13.5

409 No No 07 SURG BILIARY TRACT PROC EXCEPT ONLY CHOLECYST W OR W/O C.D.E. W CC 2.4837 7.4 8.9

410 No No 07 SURG BILIARY TRACT PROC EXCEPT ONLY CHOLECYST W OR W/O C.D.E. W/O CC/MCC 1.6208 4.9 5.8

411 No No 07 SURG CHOLECYSTECTOMY W C.D.E. W MCC 3.6953 9.9 11.8

412 No No 07 SURG CHOLECYSTECTOMY W C.D.E. W CC 2.5380 7.0 8.3

413 No No 07 SURG CHOLECYSTECTOMY W C.D.E. W/O CC/MCC 1.7385 4.5 5.4

414 Yes No 07 SURG CHOLECYSTECTOMY EXCEPT BY LAPAROSCOPE W/O C.D.E. W MCC 3.6719 9.3 11.4

415 Yes No 07 SURG CHOLECYSTECTOMY EXCEPT BY LAPAROSCOPE W/O C.D.E. W CC 2.1000 6.2 7.3

416 Yes No 07 SURG CHOLECYSTECTOMY EXCEPT BY LAPAROSCOPE W/O C.D.E. W/O CC/MCC 1.3123 3.7 4.4

417 No No 07 SURG LAPAROSCOPIC CHOLECYSTECTOMY W/O C.D.E. W MCC 2.5055 6.2 7.8

418 No No 07 SURG LAPAROSCOPIC CHOLECYSTECTOMY W/O C.D.E. W CC 1.7047 4.4 5.4

419 No No 07 SURG LAPAROSCOPIC CHOLECYSTECTOMY W/O C.D.E. W/O CC/MCC 1.1754 2.4 3.0

420 No No 07 SURG HEPATOBILIARY DIAGNOSTIC PROCEDURES W MCC 3.6914 9.2 13.1

421 No No 07 SURG HEPATOBILIARY DIAGNOSTIC PROCEDURES W CC 1.8890 5.1 7.0

422 No No 07 SURG HEPATOBILIARY DIAGNOSTIC PROCEDURES W/O CC/MCC 1.2777 3.1 4.1

423 No No 07 SURG OTHER HEPATOBILIARY OR PANCREAS O.R. PROCEDURES W MCC 4.4476 10.9 14.4CMS-1498-P 1024

MSDRG FY 2011 Proposed RulePostAcute DRG FY 2011 Proposed Rule Special Pay DRG MDC TYPE MS-DRG Title Weights Geometric

mean LOS Arithmetic

mean LOS

424 No No 07 SURG OTHER HEPATOBILIARY OR PANCREAS O.R. PROCEDURES W CC 2.4219 7.1 9.1

425 No No 07 SURG OTHER HEPATOBILIARY OR PANCREAS O.R. PROCEDURES W/O CC/MCC 1.6265 4.5 5.7

432 No No 07 MED CIRRHOSIS & ALCOHOLIC HEPATITIS W MCC 1.6939 4.9 6.5

433 No No 07 MED CIRRHOSIS & ALCOHOLIC HEPATITIS W CC 0.9487 3.6 4.6

434 No No 07 MED CIRRHOSIS & ALCOHOLIC HEPATITIS W/O CC/MCC 0.6116 2.5 3.2

435 No No 07 MED MALIGNANCY OF HEPATOBILIARY SYSTEM OR PANCREAS W MCC 1.8035 5.6 7.4

436 No No 07 MED MALIGNANCY OF HEPATOBILIARY SYSTEM OR PANCREAS W CC 1.2175 4.2 5.5

437 No No 07 MED MALIGNANCY OF HEPATOBILIARY SYSTEM OR PANCREAS W/O CC/MCC 0.8973 2.8 3.7

438 No No 07 MED DISORDERS OF PANCREAS EXCEPT MALIGNANCY W MCC 1.8265 5.4 7.5

439 No No 07 MED DISORDERS OF PANCREAS EXCEPT MALIGNANCY W CC 1.0081 4.0 5.0

440 No No 07 MED DISORDERS OF PANCREAS EXCEPT MALIGNANCY W/O CC/MCC 0.6878 2.9 3.5

441 Yes No 07 MED DISORDERS OF LIVER EXCEPT MALIG,CIRR,ALC HEPA W MCC 1.8335 5.2 7.1

442 Yes No 07 MED DISORDERS OF LIVER EXCEPT MALIG,CIRR,ALC HEPA W CC 0.9843 3.7 4.8

443 Yes No 07 MED DISORDERS OF LIVER EXCEPT MALIG,CIRR,ALC HEPA W/O CC/MCC 0.6578 2.7 3.3

444 No No 07 MED DISORDERS OF THE BILIARY TRACT W MCC 1.5571 4.8 6.2

445 No No 07 MED DISORDERS OF THE BILIARY TRACT W CC 1.0681 3.6 4.5

446 No No 07 MED DISORDERS OF THE BILIARY TRACT W/O CC/MCC 0.7404 2.5 3.1

453 No No 08 SURG COMBINED ANTERIOR/POSTERIOR SPINAL FUSION W MCC 10.3048 10.7 13.5

454 No No 08 SURG COMBINED ANTERIOR/POSTERIOR SPINAL FUSION W CC 7.3001 5.5 6.8

455 No No 08 SURG COMBINED ANTERIOR/POSTERIOR SPINAL 5.4796 3.1 3.8CMS-1498-P 1025

MSDRG FY 2011 Proposed RulePostAcute DRG FY 2011 Proposed Rule Special Pay DRG MDC TYPE MS-DRG Title Weights Geometric

mean LOS Arithmetic

mean LOS FUSION W/O CC/MCC

456 No No 08 SURG SPINAL FUS EXC CERV W SPINAL CURV/MALIG/INFEC OR 9+ FUS W MCC 9.2948 10.8 13.5

457 No No 08 SURG SPINAL FUS EXC CERV W SPINAL CURV/MALIG/INFEC OR 9+ FUS W CC 6.2478 5.9 7.0

458 No No 08 SURG SPINAL FUS EXC CERV W SPINAL CURV/MALIG/INFEC OR 9+ FUS W/O CC/MCC 4.9778 3.5 4.1

459 Yes No 08 SURG SPINAL FUSION EXCEPT CERVICAL W MCC 6.5382 7.4 9.1

460 Yes No 08 SURG SPINAL FUSION EXCEPT CERVICAL W/O MCC 3.9004 3.3 3.9

461 No No 08 SURG BILATERAL OR MULTIPLE MAJOR JOINT PROCS OF LOWER EXTREMITY W MCC 4.9653 6.7 8.3

462 No No 08 SURG BILATERAL OR MULTIPLE MAJOR JOINT PROCS OF LOWER EXTREMITY W/O MCC 3.3634 3.7 4.1

463 Yes No 08 SURG WND DEBRID & SKN GRFT EXC HAND, FOR MUSCULO-CONN TISS DIS W MCC 4.9853 11.1 15.1

464 Yes No 08 SURG WND DEBRID & SKN GRFT EXC HAND, FOR MUSCULO-CONN TISS DIS W CC 2.8664 6.9 8.9

465 Yes No 08 SURG WND DEBRID & SKN GRFT EXC HAND, FOR MUSCULO-CONN TISS DIS W/O CC/MCC 1.7885 4.1 5.3

466 Yes No 08 SURG REVISION OF HIP OR KNEE REPLACEMENT W MCC 4.9381 7.3 9.0

467 Yes No 08 SURG REVISION OF HIP OR KNEE REPLACEMENT W CC 3.2568 4.3 5.0

468 Yes No 08 SURG REVISION OF HIP OR KNEE REPLACEMENT W/O CC/MCC 2.5912 3.3 3.6

469 Yes No 08 SURG MAJOR JOINT REPLACEMENT OR REATTACHMENT OF LOWER EXTREMITY W MCC 3.4827 6.7 8.0

470 Yes No 08 SURG MAJOR JOINT REPLACEMENT OR REATTACHMENT OF LOWER EXTREMITY W/O MCC 2.1173 3.4 3.7

471 No No 08 SURG CERVICAL SPINAL FUSION W MCC 4.7410 6.6 9.3 472 No No 08 SURG CERVICAL SPINAL FUSION W CC 2.7945 2.6 3.8

473 No No 08 SURG CERVICAL SPINAL FUSION W/O CC/MCC 2.0987 1.5 1.9

474 Yes No 08 SURG AMPUTATION FOR MUSCULOSKELETAL SYS & CONN TISSUE DIS W MCC 3.5131 9.2 12.0CMS-1498-P 1026

MSDRG FY 2011 Proposed RulePostAcute DRG FY 2011 Proposed Rule Special Pay DRG MDC TYPE MS-DRG Title Weights Geometric

mean LOS Arithmetic

mean LOS

475 Yes No 08 SURG AMPUTATION FOR MUSCULOSKELETAL SYS & CONN TISSUE DIS W CC 1.9640 6.1 7.7

476 Yes No 08 SURG AMPUTATION FOR MUSCULOSKELETAL SYS & CONN TISSUE DIS W/O CC/MCC 0.9985 3.2 4.1

477 Yes Yes 08 SURG BIOPSIES OF MUSCULOSKELETAL SYSTEM & CONNECTIVE TISSUE W MCC 3.3163 8.9 11.1

478 Yes Yes 08 SURG BIOPSIES OF MUSCULOSKELETAL SYSTEM & CONNECTIVE TISSUE W CC 2.2598 5.3 6.9

479 Yes Yes 08 SURG BIOPSIES OF MUSCULOSKELETAL SYSTEM & CONNECTIVE TISSUE W/O CC/MCC 1.6417 2.4 3.4

480 Yes Yes 08 SURG HIP & FEMUR PROCEDURES EXCEPT MAJOR JOINT W MCC 3.0913 7.7 9.0

481 Yes Yes 08 SURG HIP & FEMUR PROCEDURES EXCEPT MAJOR JOINT W CC 1.8944 5.1 5.6

482 Yes Yes 08 SURG HIP & FEMUR PROCEDURES EXCEPT MAJOR JOINT W/O CC/MCC 1.5431 4.1 4.5

483 Yes No 08 SURG MAJOR JOINT & LIMB REATTACHMENT PROC OF UPPER EXTREMITY W CC/MCC 2.4235 3.1 3.7

484 Yes No 08 SURG MAJOR JOINT & LIMB REATTACHMENT PROC OF UPPER EXTREMITY W/O CC/MCC 1.9713 2.0 2.2

485 No No 08 SURG KNEE PROCEDURES W PDX OF INFECTION W MCC 3.1808 9.0 10.9

486 No No 08 SURG KNEE PROCEDURES W PDX OF INFECTION W CC 2.0450 6.1 7.2

487 No No 08 SURG KNEE PROCEDURES W PDX OF INFECTION W/O CC/MCC 1.4752 4.4 5.1

488 Yes No 08 SURG KNEE PROCEDURES W/O PDX OF INFECTION W CC/MCC 1.7294 3.8 4.7

489 Yes No 08 SURG KNEE PROCEDURES W/O PDX OF INFECTION W/O CC/MCC 1.2220 2.5 2.9

490 No No 08 SURG BACK & NECK PROC EXC SPINAL FUSION W CC/MCC OR DISC DEVICE/NEUROSTIM 1.7996 3.0 4.3

491 No No 08 SURG BACK & NECK PROC EXC SPINAL FUSION W/O CC/MCC 0.9982 1.7 2.1

492 Yes Yes 08 SURG LOWER EXTREM & HUMER PROC EXCEPT HIP,FOOT,FEMUR W MCC 3.0748 6.8 8.6

493 Yes Yes 08 SURG LOWER EXTREM & HUMER PROC EXCEPT HIP,FOOT,FEMUR 1.8573 4.2 5.0CMS-1498-P 1027

MSDRG FY 2011 Proposed RulePostAcute DRG FY 2011 Proposed Rule Special Pay DRG MDC TYPE MS-DRG Title Weights Geometric

mean LOS Arithmetic

mean LOS W CC

494 Yes Yes 08 SURG LOWER EXTREM & HUMER PROC EXCEPT HIP,FOOT,FEMUR W/O CC/MCC 1.3220 2.7 3.1

495 Yes Yes 08 SURG LOCAL EXCISION & REMOVAL INT FIX DEVICES EXC HIP & FEMUR W MCC 2.8691 7.6 10.2

496 Yes Yes 08 SURG LOCAL EXCISION & REMOVAL INT FIX DEVICES EXC HIP & FEMUR W CC 1.6275 4.1 5.4

497 Yes Yes 08 SURG LOCAL EXCISION & REMOVAL INT FIX DEVICES EXC HIP & FEMUR W/O CC/MCC 1.0813 2.0 2.6

498 No No 08 SURG LOCAL EXCISION & REMOVAL INT FIX DEVICES OF HIP & FEMUR W CC/MCC 1.9968 5.4 7.3

499 No No 08 SURG LOCAL EXCISION & REMOVAL INT FIX DEVICES OF HIP & FEMUR W/O CC/MCC 0.9936 2.2 3.0

500 Yes Yes 08 SURG SOFT TISSUE PROCEDURES W MCC 3.0486 7.7 10.5 501 Yes Yes 08 SURG SOFT TISSUE PROCEDURES W CC 1.5858 4.6 6.0

502 Yes Yes 08 SURG SOFT TISSUE PROCEDURES W/O CC/MCC 1.0354 2.3 2.8 503 No No 08 SURG FOOT PROCEDURES W MCC 2.2681 6.5 8.4 504 No No 08 SURG FOOT PROCEDURES W CC 1.5696 5.0 6.2

505 No No 08 SURG FOOT PROCEDURES W/O CC/MCC 1.0792 2.5 3.1

506 No No 08 SURG MAJOR THUMB OR JOINT PROCEDURES 1.1834 2.7 3.8

507 No No 08 SURG MAJOR SHOULDER OR ELBOW JOINT PROCEDURES W CC/MCC 1.8823 3.4 4.5

508 No No 08 SURG MAJOR SHOULDER OR ELBOW JOINT PROCEDURES W/O CC/MCC 1.4101 1.7 2.1 509 No No 08 SURG ARTHROSCOPY 1.3044 2.3 3.5

510 Yes No 08 SURG SHOULDER,ELBOW OR FOREARM PROC,EXC MAJOR JOINT PROC W MCC 2.1698 5.0 6.3

511 Yes No 08 SURG SHOULDER,ELBOW OR FOREARM PROC,EXC MAJOR JOINT PROC W CC 1.4748 3.2 3.9

512 Yes No 08 SURG SHOULDER,ELBOW OR FOREARM PROC,EXC MAJOR JOINT PROC W/O CC/MCC 1.0533 1.8 2.1

513 No No 08 SURG HAND OR WRIST PROC, EXCEPT MAJOR THUMB OR JOINT PROC W CC/MCC 1.3000 3.5 4.8CMS-1498-P 1028

MSDRG FY 2011 Proposed RulePostAcute DRG FY 2011 Proposed Rule Special Pay DRG MDC TYPE MS-DRG Title Weights Geometric

mean LOS Arithmetic

mean LOS

514 No No 08 SURG HAND OR WRIST PROC, EXCEPT MAJOR THUMB OR JOINT PROC W/O CC/MCC 0.8215 2.1 2.6

515 Yes Yes 08 SURG OTHER MUSCULOSKELET SYS & CONN TISS O.R. PROC W MCC 3.1992 7.7 9.9

516 Yes Yes 08 SURG OTHER MUSCULOSKELET SYS & CONN TISS O.R. PROC W CC 1.9292 4.7 5.9

517 Yes Yes 08 SURG OTHER MUSCULOSKELET SYS & CONN TISS O.R. PROC W/O CC/MCC 1.4856 2.6 3.4 533 Yes No 08 MED FRACTURES OF FEMUR W MCC 1.5545 4.9 6.5

534 Yes No 08 MED FRACTURES OF FEMUR W/O MCC 0.7576 3.1 3.9

535 Yes No 08 MED FRACTURES OF HIP & PELVIS W MCC 1.3495 4.5 5.8

536 Yes No 08 MED FRACTURES OF HIP & PELVIS W/O MCC 0.7175 3.2 3.7

537 No No 08 MED SPRAINS, STRAINS, & DISLOCATIONS OF HIP, PELVIS & THIGH W CC/MCC 0.8242 3.5 4.1

538 No No 08 MED SPRAINS, STRAINS, & DISLOCATIONS OF HIP, PELVIS & THIGH W/O CC/MCC 0.6060 2.6 3.0 539 Yes No 08 MED OSTEOMYELITIS W MCC 2.0525 7.1 9.5 540 Yes No 08 MED OSTEOMYELITIS W CC 1.3139 5.4 6.8 541 Yes No 08 MED OSTEOMYELITIS W/O CC/MCC 0.8733 3.7 4.8

542 Yes No 08 MED PATHOLOGICAL FRACTURES & MUSCULOSKELET & CONN TISS MALIG W MCC 1.9499 6.3 8.3

543 Yes No 08 MED PATHOLOGICAL FRACTURES & MUSCULOSKELET & CONN TISS MALIG W CC 1.1564 4.5 5.6

544 Yes No 08 MED PATHOLOGICAL FRACTURES & MUSCULOSKELET & CONN TISS MALIG W/O CC/MCC 0.7753 3.4 4.0

545 Yes No 08 MED CONNECTIVE TISSUE DISORDERS W MCC 2.5453 6.3 9.0

546 Yes No 08 MED CONNECTIVE TISSUE DISORDERS W CC 1.1596 4.2 5.3

547 Yes No 08 MED CONNECTIVE TISSUE DISORDERS W/O CC/MCC 0.7297 2.9 3.5 548 No No 08 MED SEPTIC ARTHRITIS W MCC 1.9836 6.6 8.7 549 No No 08 MED SEPTIC ARTHRITIS W CC 1.2003 4.8 6.1 550 No No 08 MED SEPTIC ARTHRITIS W/O CC/MCC 0.8223 3.3 4.0

551 Yes No 08 MED MEDICAL BACK PROBLEMS W MCC 1.6337 5.2 6.8

552 Yes No 08 MED MEDICAL BACK PROBLEMS W/O MCC 0.8160 3.3 4.0CMS-1498-P 1029

MSDRG FY 2011 Proposed RulePostAcute DRG FY 2011 Proposed Rule Special Pay DRG MDC TYPE MS-DRG Title Weights Geometric

mean LOS Arithmetic

mean LOS

553 No No 08 MED BONE DISEASES & ARTHROPATHIES W MCC 1.1369 4.3 5.6

554 No No 08 MED BONE DISEASES & ARTHROPATHIES W/O MCC 0.6774 3.0 3.6

555 No No 08 MED SIGNS & SYMPTOMS OF MUSCULOSKELETAL SYSTEM & CONN TISSUE W MCC 1.0941 3.6 4.8

556 No No 08 MED SIGNS & SYMPTOMS OF MUSCULOSKELETAL SYSTEM & CONN TISSUE W/O MCC 0.6536 2.5 3.2

557 Yes No 08 MED TENDONITIS, MYOSITIS & BURSITIS W MCC 1.5997 5.4 6.9

558 Yes No 08 MED TENDONITIS, MYOSITIS & BURSITIS W/O MCC 0.8796 3.6 4.3

559 Yes No 08 MED AFTERCARE, MUSCULOSKELETAL SYSTEM & CONNECTIVE TISSUE W MCC 1.7624 5.2 7.1

560 Yes No 08 MED AFTERCARE, MUSCULOSKELETAL SYSTEM & CONNECTIVE TISSUE W CC 0.9992 3.6 4.6

561 Yes No 08 MED AFTERCARE, MUSCULOSKELETAL SYSTEM & CONNECTIVE TISSUE W/O CC/MCC 0.6201 2.0 2.6

562 Yes No 08 MED FX, SPRN, STRN & DISL EXCEPT FEMUR, HIP, PELVIS & THIGH W MCC 1.3925 4.5 5.9

563 Yes No 08 MED FX, SPRN, STRN & DISL EXCEPT FEMUR, HIP, PELVIS & THIGH W/O MCC 0.7120 3.0 3.6

564 No No 08 MED OTHER MUSCULOSKELETAL SYS & CONNECTIVE TISSUE DIAGNOSES W MCC 1.4686 5.0 6.6

565 No No 08 MED OTHER MUSCULOSKELETAL SYS & CONNECTIVE TISSUE DIAGNOSES W CC 0.9051 3.7 4.6

566 No No 08 MED OTHER MUSCULOSKELETAL SYS & CONNECTIVE TISSUE DIAGNOSES W/O CC/MCC 0.6592 2.7 3.4

573 Yes No 09 SURG SKIN GRAFT &/OR DEBRID FOR SKN ULCER OR CELLULITIS W MCC 3.2654 9.2 12.6

574 Yes No 09 SURG SKIN GRAFT &/OR DEBRID FOR SKN ULCER OR CELLULITIS W CC 1.8708 6.7 8.5

575 Yes No 09 SURG SKIN GRAFT &/OR DEBRID FOR SKN ULCER OR CELLULITIS W/O CC/MCC 1.0915 4.2 5.2 576 No No 09 SURG SKIN GRAFT &/OR DEBRID EXC 3.9309 9.1 13.0CMS-1498-P 1030

MSDRG FY 2011 Proposed RulePostAcute DRG FY 2011 Proposed Rule Special Pay DRG MDC TYPE MS-DRG Title Weights Geometric

mean LOS Arithmetic

mean LOS FOR SKIN ULCER OR CELLULITIS W MCC

577 No No 09 SURG SKIN GRAFT &/OR DEBRID EXC FOR SKIN ULCER OR CELLULITIS W CC 1.7025 4.1 6.2

578 No No 09 SURG SKIN GRAFT &/OR DEBRID EXC FOR SKIN ULCER OR CELLULITIS W/O CC/MCC 1.0505 2.4 3.3

579 Yes No 09 SURG OTHER SKIN, SUBCUT TISS & BREAST PROC W MCC 2.9643 7.7 10.5

580 Yes No 09 SURG OTHER SKIN, SUBCUT TISS & BREAST PROC W CC 1.4993 3.8 5.4

581 Yes No 09 SURG OTHER SKIN, SUBCUT TISS & BREAST PROC W/O CC/MCC 0.9301 1.8 2.4

582 No No 09 SURG MASTECTOMY FOR MALIGNANCY W CC/MCC 1.0633 2.0 2.7

583 No No 09 SURG MASTECTOMY FOR MALIGNANCY W/O CC/MCC 0.8543 1.5 1.7

584 No No 09 SURG BREAST BIOPSY, LOCAL EXCISION & OTHER BREAST PROCEDURES W CC/MCC 1.5258 3.5 5.0

585 No No 09 SURG BREAST BIOPSY, LOCAL EXCISION & OTHER BREAST PROCEDURES W/O CC/MCC 1.0568 1.7 2.1 592 Yes No 09 MED SKIN ULCERS W MCC 1.7757 6.2 8.3 593 Yes No 09 MED SKIN ULCERS W CC 1.0631 4.8 5.9 594 Yes No 09 MED SKIN ULCERS W/O CC/MCC 0.7550 3.6 4.7 595 No No 09 MED MAJOR SKIN DISORDERS W MCC 1.8752 5.9 7.9

596 No No 09 MED MAJOR SKIN DISORDERS W/O MCC 0.8700 3.7 4.6

597 No No 09 MED MALIGNANT BREAST DISORDERS W MCC 1.5651 5.5 7.5

598 No No 09 MED MALIGNANT BREAST DISORDERS W CC 1.0728 4.1 5.5

599 No No 09 MED MALIGNANT BREAST DISORDERS W/O CC/MCC 0.6318 2.5 3.3

600 No No 09 MED NON-MALIGNANT BREAST DISORDERS W CC/MCC 0.9639 4.1 4.9

601 No No 09 MED NON-MALIGNANT BREAST DISORDERS W/O CC/MCC 0.6731 3.0 3.6 602 Yes No 09 MED CELLULITIS W MCC 1.4705 5.3 6.7 603 Yes No 09 MED CELLULITIS W/O MCC 0.8346 3.8 4.5

604 No No 09 MED TRAUMA TO THE SKIN, SUBCUT TISS & BREAST W MCC 1.2286 3.9 5.2

605 No No 09 MED TRAUMA TO THE SKIN, SUBCUT TISS & BREAST W/O MCC 0.7145 2.7 3.3 606 No No 09 MED MINOR SKIN DISORDERS W MCC 1.3114 4.3 6.0 607 No No 09 MED MINOR SKIN DISORDERS W/O 0.6803 2.8 3.6CMS-1498-P 1031

MSDRG FY 2011 Proposed RulePostAcute DRG FY 2011 Proposed Rule Special Pay DRG MDC TYPE MS-DRG Title Weights Geometric

mean LOS Arithmetic

mean LOS MCC

614 No No 10 SURG ADRENAL & PITUITARY PROCEDURES W CC/MCC 2.4584 4.7 6.5

615 No No 10 SURG ADRENAL & PITUITARY PROCEDURES W/O CC/MCC 1.3993 2.5 3.0

616 Yes No 10 SURG AMPUTAT OF LOWER LIMB FOR ENDOCRINE,NUTRIT,& METABOL DIS W MCC 4.4871 12.5 15.6

617 Yes No 10 SURG AMPUTAT OF LOWER LIMB FOR ENDOCRINE,NUTRIT,& METABOL DIS W CC 2.0083 6.5 7.9

618 Yes No 10 SURG AMPUTAT OF LOWER LIMB FOR ENDOCRINE,NUTRIT,& METABOL DIS W/O CC/MCC 1.2176 4.1 5.1

619 No No 10 SURG O.R. PROCEDURES FOR OBESITY W MCC 3.6116 4.6 7.7

620 No No 10 SURG O.R. PROCEDURES FOR OBESITY W CC 1.8814 2.6 3.4

621 No No 10 SURG O.R. PROCEDURES FOR OBESITY W/O CC/MCC 1.4877 1.6 1.9

622 Yes No 10 SURG SKIN GRAFTS & WOUND DEBRID FOR ENDOC, NUTRIT & METAB DIS W MCC 3.3683 9.4 12.4

623 Yes No 10 SURG SKIN GRAFTS & WOUND DEBRID FOR ENDOC, NUTRIT & METAB DIS W CC 1.8501 6.1 7.6

624 Yes No 10 SURG SKIN GRAFTS & WOUND DEBRID FOR ENDOC, NUTRIT & METAB DIS W/O CC/MCC 1.0337 3.9 4.8

625 No No 10 SURG THYROID, PARATHYROID & THYROGLOSSAL PROCEDURES W MCC 2.2439 4.6 6.9

626 No No 10 SURG THYROID, PARATHYROID & THYROGLOSSAL PROCEDURES W CC 1.1771 2.1 3.1

627 No No 10 SURG THYROID, PARATHYROID & THYROGLOSSAL PROCEDURES W/O CC/MCC 0.7884 1.2 1.4

628 Yes No 10 SURG OTHER ENDOCRINE, NUTRIT & METAB O.R. PROC W MCC 3.3820 7.2 10.6

629 Yes No 10 SURG OTHER ENDOCRINE, NUTRIT & METAB O.R. PROC W CC 2.2645 6.5 8.0

630 Yes No 10 SURG OTHER ENDOCRINE, NUTRIT & METAB O.R. PROC W/O CC/MCC 1.4425 3.4 4.5 637 Yes No 10 MED DIABETES W MCC 1.4431 4.5 6.0 638 Yes No 10 MED DIABETES W CC 0.8267 3.2 4.0 639 Yes No 10 MED DIABETES W/O CC/MCC 0.5508 2.3 2.8 640 Yes No 10 MED NUTRITIONAL & MISC 1.1361 3.6 5.1CMS-1498-P 1032

MSDRG FY 2011 Proposed RulePostAcute DRG FY 2011 Proposed Rule Special Pay DRG MDC TYPE MS-DRG Title Weights Geometric

mean LOS Arithmetic

mean LOS METABOLIC DISORDERS W MCC

641 Yes No 10 MED NUTRITIONAL & MISC METABOLIC DISORDERS W/O MCC 0.6887 2.9 3.6

642 No No 10 MED INBORN ERRORS OF METABOLISM 1.0385 3.4 4.7 643 Yes No 10 MED ENDOCRINE DISORDERS W MCC 1.8172 6.0 7.6 644 Yes No 10 MED ENDOCRINE DISORDERS W CC 1.0586 4.2 5.2

645 Yes No 10 MED ENDOCRINE DISORDERS W/O CC/MCC 0.7169 2.9 3.6 652 No No 11 SURG KIDNEY TRANSPLANT 3.0630 6.3 7.5

653 Yes No 11 SURG MAJOR BLADDER PROCEDURES W MCC 6.0950 13.6 16.6

654 Yes No 11 SURG MAJOR BLADDER PROCEDURES W CC 3.0117 8.2 9.3

655 Yes No 11 SURG MAJOR BLADDER PROCEDURES W/O CC/MCC 1.9644 4.8 5.7

656 No No 11 SURG KIDNEY & URETER PROCEDURES FOR NEOPLASM W MCC 3.5861 7.7 10.1

657 No No 11 SURG KIDNEY & URETER PROCEDURES FOR NEOPLASM W CC 2.0062 4.9 5.9

658 No No 11 SURG KIDNEY & URETER PROCEDURES FOR NEOPLASM W/O CC/MCC 1.4305 3.0 3.4

659 Yes No 11 SURG KIDNEY & URETERPROCEDURES FOR NONNEOPLASM W MCC 3.5110 8.0 10.8

660 Yes No 11 SURG KIDNEY & URETERPROCEDURES FOR NONNEOPLASM W CC 1.9077 4.5 6.0

661 Yes No 11 SURG KIDNEY & URETERPROCEDURES FOR NONNEOPLASM W/O CC/MCC 1.2709 2.4 2.9

662 No No 11 SURG MINOR BLADDER PROCEDURES W MCC 3.0413 7.6 10.8

663 No No 11 SURG MINOR BLADDER PROCEDURES W CC 1.4721 3.6 5.2

664 No No 11 SURG MINOR BLADDER PROCEDURES W/O CC/MCC 1.1170 1.5 1.9 665 No No 11 SURG PROSTATECTOMY W MCC 2.8519 8.7 11.3 666 No No 11 SURG PROSTATECTOMY W CC 1.6440 4.5 6.4 667 No No 11 SURG PROSTATECTOMY W/O CC/MCC 0.7945 1.8 2.4

668 No No 11 SURG TRANSURETHRAL PROCEDURES W MCC 2.5102 6.6 8.9

669 No No 11 SURG TRANSURETHRAL PROCEDURES W CC 1.2610 3.2 4.4CMS-1498-P 1033

MSDRG FY 2011 Proposed RulePostAcute DRG FY 2011 Proposed Rule Special Pay DRG MDC TYPE MS-DRG Title Weights Geometric

mean LOS Arithmetic

mean LOS

670 No No 11 SURG TRANSURETHRAL PROCEDURES W/O CC/MCC 0.7790 1.8 2.3

671 No No 11 SURG URETHRAL PROCEDURES W CC/MCC 1.4360 4.1 5.6

672 No No 11 SURG URETHRAL PROCEDURES W/O CC/MCC 0.7921 1.8 2.2

673 No No 11 SURG OTHER KIDNEY & URINARY TRACT PROCEDURES W MCC 2.9238 5.9 9.6

674 No No 11 SURG OTHER KIDNEY & URINARY TRACT PROCEDURES W CC 2.1004 4.6 6.7

675 No No 11 SURG OTHER KIDNEY & URINARY TRACT PROCEDURES W/O CC/MCC 1.3469 1.6 2.1 682 Yes No 11 MED RENAL FAILURE W MCC 1.6383 5.1 6.8 683 Yes No 11 MED RENAL FAILURE W CC 1.0208 4.0 4.9 684 Yes No 11 MED RENAL FAILURE W/O CC/MCC 0.6561 2.8 3.3 685 No No 11 MED ADMIT FOR RENAL DIALYSIS 0.8892 2.5 3.4

686 No No 11 MED KIDNEY & URINARY TRACT NEOPLASMS W MCC 1.8264 5.8 7.8

687 No No 11 MED KIDNEY & URINARY TRACT NEOPLASMS W CC 1.0822 3.8 5.0

688 No No 11 MED KIDNEY & URINARY TRACT NEOPLASMS W/O CC/MCC 0.6447 2.2 2.8

689 Yes No 11 MED KIDNEY & URINARY TRACT INFECTIONS W MCC 1.2155 4.6 5.8

690 Yes No 11 MED KIDNEY & URINARY TRACT INFECTIONS W/O MCC 0.7838 3.4 4.1

691 No No 11 MED URINARY STONES W ESW LITHOTRIPSY W CC/MCC 1.6152 3.3 4.3

692 No No 11 MED URINARY STONES W ESW LITHOTRIPSY W/O CC/MCC 1.1211 1.8 2.2

693 No No 11 MED URINARY STONES W/O ESW LITHOTRIPSY W MCC 1.3487 3.9 5.2

694 No No 11 MED URINARY STONES W/O ESW LITHOTRIPSY W/O MCC 0.7098 2.0 2.6

695 No No 11 MED KIDNEY & URINARY TRACT SIGNS & SYMPTOMS W MCC 1.2029 4.3 5.6

696 No No 11 MED KIDNEY & URINARY TRACT SIGNS & SYMPTOMS W/O MCC 0.6555 2.6 3.2 697 No No 11 MED URETHRAL STRICTURE 0.7776 2.4 3.1

698 Yes No 11 MED OTHER KIDNEY & URINARY TRACT DIAGNOSES W MCC 1.6033 5.2 6.8

699 Yes No 11 MED OTHER KIDNEY & URINARY TRACT DIAGNOSES W CC 0.9988 3.7 4.7

700 Yes No 11 MED OTHER KIDNEY & URINARY TRACT DIAGNOSES W/O CC/MCC 0.6703 2.6 3.2

707 No No 12 SURG MAJOR MALE PELVIC PROCEDURES W CC/MCC 1.7846 3.2 4.2CMS-1498-P 1034

MSDRG FY 2011 Proposed RulePostAcute DRG FY 2011 Proposed Rule Special Pay DRG MDC TYPE MS-DRG Title Weights Geometric

mean LOS Arithmetic

mean LOS

708 No No 12 SURG MAJOR MALE PELVIC PROCEDURES W/O CC/MCC 1.2691 1.6 1.9 709 No No 12 SURG PENIS PROCEDURES W CC/MCC 1.8781 3.3 5.7

710 No No 12 SURG PENIS PROCEDURES W/O CC/MCC 1.2779 1.4 1.7 711 No No 12 SURG TESTES PROCEDURES W CC/MCC 1.7619 5.1 7.3

712 No No 12 SURG TESTES PROCEDURES W/O CC/MCC 0.8121 2.1 2.7

713 No No 12 SURG TRANSURETHRAL PROSTATECTOMY W CC/MCC 1.1836 2.9 4.1

714 No No 12 SURG TRANSURETHRAL PROSTATECTOMY W/O CC/MCC 0.6583 1.6 1.8

715 No No 12 SURG OTHER MALE REPRODUCTIVE SYSTEM O.R. PROC FOR MALIGNANCY W CC/MCC 1.7470 4.1 6.1

716 No No 12 SURG OTHER MALE REPRODUCTIVE SYSTEM O.R. PROC FOR MALIGNANCY W/O CC/MCC 1.0022 1.2 1.4

717 No No 12 SURG OTHER MALE REPRODUCTIVE SYSTEM O.R. PROC EXC MALIGNANCY W CC/MCC 1.6076 4.6 6.4

718 No No 12 SURG OTHER MALE REPRODUCTIVE SYSTEM O.R. PROC EXC MALIGNANCY W/O CC/MCC 0.8033 2.0 2.6

722 No No 12 MED MALIGNANCY, MALE REPRODUCTIVE SYSTEM W MCC 1.6785 5.4 7.7

723 No No 12 MED MALIGNANCY, MALE REPRODUCTIVE SYSTEM W CC 1.0170 3.9 5.1

724 No No 12 MED MALIGNANCY, MALE REPRODUCTIVE SYSTEM W/O CC/MCC 0.6171 2.0 2.7

725 No No 12 MED BENIGN PROSTATIC HYPERTROPHY W MCC 1.2620 4.6 6.1

726 No No 12 MED BENIGN PROSTATIC HYPERTROPHY W/O MCC 0.6977 2.8 3.5

727 No No 12 MED INFLAMMATION OF THE MALE REPRODUCTIVE SYSTEM W MCC 1.3582 4.9 6.3

728 No No 12 MED INFLAMMATION OF THE MALE REPRODUCTIVE SYSTEM W/O MCC 0.7599 3.3 4.1

729 No No 12 MED OTHER MALE REPRODUCTIVE SYSTEM DIAGNOSES W CC/MCC 0.9802 3.6 4.7

730 No No 12 MED OTHER MALE REPRODUCTIVE SYSTEM DIAGNOSES W/O CC/MCC 0.6377 2.3 2.8

734 No No 13 SURG PELVIC EVISCERATION, RAD HYSTERECTOMY & RAD VULVECTOMY W CC/MCC 2.4243 5.1 6.9CMS-1498-P 1035

MSDRG FY 2011 Proposed RulePostAcute DRG FY 2011 Proposed Rule Special Pay DRG MDC TYPE MS-DRG Title Weights Geometric

mean LOS Arithmetic

mean LOS

735 No No 13 SURG PELVIC EVISCERATION, RAD HYSTERECTOMY & RAD VULVECTOMY W/O CC/MCC 1.1801 2.2 2.7

736 No No 13 SURG UTERINE & ADNEXA PROC FOR OVARIAN OR ADNEXAL MALIGNANCY W MCC 4.3876 11.5 14.0

737 No No 13 SURG UTERINE & ADNEXA PROC FOR OVARIAN OR ADNEXAL MALIGNANCY W CC 2.0407 5.7 6.7

738 No No 13 SURG UTERINE & ADNEXA PROC FOR OVARIAN OR ADNEXAL MALIGNANCY W/O CC/MCC 1.2377 3.2 3.6

739 No No 13 SURG UTERINE,ADNEXA PROC FOR NON-OVARIAN/ADNEXAL MALIG W MCC 3.4188 7.5 9.9

740 No No 13 SURG UTERINE,ADNEXA PROC FOR NON-OVARIAN/ADNEXAL MALIG W CC 1.5323 3.8 4.7

741 No No 13 SURG UTERINE,ADNEXA PROC FOR NON-OVARIAN/ADNEXAL MALIG W/O CC/MCC 1.1068 2.2 2.6

742 No No 13 SURG UTERINE & ADNEXA PROC FOR NON-MALIGNANCY W CC/MCC 1.3971 3.2 4.1

743 No No 13 SURG UTERINE & ADNEXA PROC FOR NON-MALIGNANCY W/O CC/MCC 0.9150 1.8 2.1

744 No No 13 SURG D&C, CONIZATION, LAPAROSCOPY & TUBAL INTERRUPTION W CC/MCC 1.5367 4.0 5.6

745 No No 13 SURG D&C, CONIZATION, LAPAROSCOPY & TUBAL INTERRUPTION W/O CC/MCC 0.8077 1.9 2.4

746 No No 13 SURG VAGINA, CERVIX & VULVA PROCEDURES W CC/MCC 1.3373 3.0 4.2

747 No No 13 SURG VAGINA, CERVIX & VULVA PROCEDURES W/O CC/MCC 0.8929 1.5 1.8

748 No No 13 SURG FEMALE REPRODUCTIVE SYSTEM RECONSTRUCTIVE PROCEDURES 0.9231 1.4 1.7

749 No No 13 SURG OTHER FEMALE REPRODUCTIVE SYSTEM O.R. PROCEDURES W CC/MCC 2.5219 6.2 8.5

750 No No 13 SURG OTHER FEMALE REPRODUCTIVE SYSTEM O.R. PROCEDURES W/O CC/MCC 0.9389 2.2 2.8

754 No No 13 MED MALIGNANCY, FEMALE REPRODUCTIVE SYSTEM W MCC 2.0061 6.4 8.8

755 No No 13 MED MALIGNANCY, FEMALE REPRODUCTIVE SYSTEM W CC 1.1371 4.0 5.3 756 No No 13 MED MALIGNANCY, FEMALE 0.6370 2.3 3.1CMS-1498-P 1036

MSDRG FY 2011 Proposed RulePostAcute DRG FY 2011 Proposed Rule Special Pay DRG MDC TYPE MS-DRG Title Weights Geometric

mean LOS Arithmetic

mean LOS REPRODUCTIVE SYSTEM W/O CC/MCC

757 No No 13 MED INFECTIONS, FEMALE REPRODUCTIVE SYSTEM W MCC 1.6490 6.0 7.8

758 No No 13 MED INFECTIONS, FEMALE REPRODUCTIVE SYSTEM W CC 1.0895 4.7 5.7

759 No No 13 MED INFECTIONS, FEMALE REPRODUCTIVE SYSTEM W/O CC/MCC 0.7344 3.3 4.0

760 No No 13 MED MENSTRUAL & OTHER FEMALE REPRODUCTIVE SYSTEM DISORDERS W CC/MCC 0.8298 2.9 3.8

761 No No 13 MED MENSTRUAL & OTHER FEMALE REPRODUCTIVE SYSTEM DISORDERS W/O CC/MCC 0.5246 1.8 2.2 765 No No 14 SURG CESAREAN SECTION W CC/MCC 1.1316 3.9 4.9

766 No No 14 SURG CESAREAN SECTION W/O CC/MCC 0.8063 2.9 3.1

767 No No 14 SURG VAGINAL DELIVERY W STERILIZATION &/OR D&C 0.9173 2.4 2.7

768 No No 14 SURG VAGINAL DELIVERY W O.R. PROC EXCEPT STERIL &/OR D&C 1.8108 0.0 0.0

769 No No 14 SURG POSTPARTUM & POST ABORTION DIAGNOSES W O.R. PROCEDURE 2.0588 3.6 5.7

770 No No 14 SURG ABORTION W D&C, ASPIRATION CURETTAGE OR HYSTEROTOMY 0.7140 1.6 2.1

774 No No 14 MED VAGINAL DELIVERY W COMPLICATING DIAGNOSES 0.6894 2.6 3.2

775 No No 14 MED VAGINAL DELIVERY W/O COMPLICATING DIAGNOSES 0.5276 2.1 2.3

776 No No 14 MED POSTPARTUM & POST ABORTION DIAGNOSES W/O O.R. PROCEDURE 0.6419 2.6 3.3 777 No No 14 MED ECTOPIC PREGNANCY 0.7401 1.7 2.1 778 No No 14 MED THREATENED ABORTION 0.4880 2.0 3.2 779 No No 14 MED ABORTION W/O D&C 0.5637 1.6 2.1 780 No No 14 MED FALSE LABOR 0.2277 1.2 1.6

781 No No 14 MED OTHER ANTEPARTUM DIAGNOSES W MEDICAL COMPLICATIONS 0.6807 2.7 3.8

782 No No 14 MED OTHER ANTEPARTUM DIAGNOSES W/O MEDICAL COMPLICATIONS 0.4731 1.9 2.6

789 No No 15 MED NEONATES, DIED OR TRANSFERRED TO ANOTHER ACUTE CARE FACILITY 1.4874 0.0 0.0 790 No No 15 MED EXTREME IMMATURITY OR 4.9049 0.0 0.0CMS-1498-P 1037

MSDRG FY 2011 Proposed RulePostAcute DRG FY 2011 Proposed Rule Special Pay DRG MDC TYPE MS-DRG Title Weights Geometric

mean LOS Arithmetic

mean LOS RESPIRATORY DISTRESS SYNDROME, NEONATE

791 No No 15 MED PREMATURITY W MAJOR PROBLEMS 3.3499 0.0 0.0

792 No No 15 MED PREMATURITY W/O MAJOR PROBLEMS 2.0213 0.0 0.0

793 No No 15 MED FULL TERM NEONATE W MAJOR PROBLEMS 3.4411 0.0 0.0

794 No No 15 MED NEONATE W OTHER SIGNIFICANT PROBLEMS 1.2179 0.0 0.0 795 No No 15 MED NORMAL NEWBORN 0.1649 0.0 0.0 799 No No 16 SURG SPLENECTOMY W MCC 4.9483 10.4 13.4 800 No No 16 SURG SPLENECTOMY W CC 2.6030 5.9 7.5 801 No No 16 SURG SPLENECTOMY W/O CC/MCC 1.5588 3.1 3.9

802 No No 16 SURG OTHER O.R. PROC OF THE BLOOD & BLOOD FORMING ORGANS W MCC 3.6327 8.6 12.2

803 No No 16 SURG OTHER O.R. PROC OF THE BLOOD & BLOOD FORMING ORGANS W CC 1.8899 4.9 6.5

804 No No 16 SURG OTHER O.R. PROC OF THE BLOOD & BLOOD FORMING ORGANS W/O CC/MCC 1.0419 2.3 3.0

808 No No 16 MED MAJOR HEMATOL/IMMUN DIAG EXC SICKLE CELL CRISIS & COAGUL W MCC 2.1429 6.3 8.2

809 No No 16 MED MAJOR HEMATOL/IMMUN DIAG EXC SICKLE CELL CRISIS & COAGUL W CC 1.1935 4.0 5.1

810 No No 16 MED MAJOR HEMATOL/IMMUN DIAG EXC SICKLE CELL CRISIS & COAGUL W/O CC/MCC 0.9204 3.0 3.7

811 No No 16 MED RED BLOOD CELL DISORDERS W MCC 1.2574 3.9 5.3

812 No No 16 MED RED BLOOD CELL DISORDERS W/O MCC 0.7996 2.8 3.7 813 No No 16 MED COAGULATION DISORDERS 1.4355 3.6 5.0

814 No No 16 MED RETICULOENDOTHELIAL & IMMUNITY DISORDERS W MCC 1.6466 5.0 6.9

815 No No 16 MED RETICULOENDOTHELIAL & IMMUNITY DISORDERS W CC 0.9989 3.6 4.6

816 No No 16 MED RETICULOENDOTHELIAL & IMMUNITY DISORDERS W/O CC/MCC 0.6826 2.6 3.2

820 No No 17 SURG LYMPHOMA & LEUKEMIA W MAJOR O.R. PROCEDURE W MCC 5.7484 13.2 17.5

821 No No 17 SURG LYMPHOMA & LEUKEMIA W MAJOR O.R. PROCEDURE W CC 2.3960 5.3 7.4CMS-1498-P 1038

MSDRG FY 2011 Proposed RulePostAcute DRG FY 2011 Proposed Rule Special Pay DRG MDC TYPE MS-DRG Title Weights Geometric

mean LOS Arithmetic

mean LOS

822 No No 17 SURG LYMPHOMA & LEUKEMIA W MAJOR O.R. PROCEDURE W/O CC/MCC 1.2251 2.3 3.1

823 No No 17 SURG LYMPHOMA & NON-ACUTE LEUKEMIA W OTHER O.R. PROC W MCC 4.5904 12.2 16.0

824 No No 17 SURG LYMPHOMA & NON-ACUTE LEUKEMIA W OTHER O.R. PROC W CC 2.3004 6.6 8.7

825 No No 17 SURG LYMPHOMA & NON-ACUTE LEUKEMIA W OTHER O.R. PROC W/O CC/MCC 1.2439 2.7 3.9

826 No No 17 SURG MYELOPROLIF DISORD OR POORLY DIFF NEOPL W MAJ O.R. PROC W MCC 4.8575 11.2 14.8

827 No No 17 SURG MYELOPROLIF DISORD OR POORLY DIFF NEOPL W MAJ O.R. PROC W CC 2.1547 5.3 6.9

828 No No 17 SURG MYELOPROLIF DISORD OR POORLY DIFF NEOPL W MAJ O.R. PROC W/O CC/MCC 1.3894 3.0 3.8

829 No No 17 SURG MYELOPROLIF DISORD OR POORLY DIFF NEOPL W OTHER O.R. PROC W CC/MCC 2.7281 6.2 9.3

830 No No 17 SURG MYELOPROLIF DISORD OR POORLY DIFF NEOPL W OTHER O.R. PROC W/O CC/MCC 1.0911 2.3 3.1

834 No No 17 MED ACUTE LEUKEMIA W/O MAJOR O.R. PROCEDURE W MCC 4.9043 10.1 16.2

835 No No 17 MED ACUTE LEUKEMIA W/O MAJOR O.R. PROCEDURE W CC 2.4310 5.7 9.3

836 No No 17 MED ACUTE LEUKEMIA W/O MAJOR O.R. PROCEDURE W/O CC/MCC 1.1364 3.0 4.4

837 No No 17 MED CHEMO W ACUTE LEUKEMIA AS SDX OR W HIGH DOSE CHEMO AGENT W MCC 6.6543 17.9 23.6

838 No No 17 MED CHEMO W ACUTE LEUKEMIA AS SDX W CC OR HIGH DOSE CHEMO AGENT 3.1384 8.1 12.3

839 No No 17 MED CHEMO W ACUTE LEUKEMIA AS SDX W/O CC/MCC 1.2874 4.6 5.7

840 Yes No 17 MED LYMPHOMA & NON-ACUTE LEUKEMIA W MCC 2.9245 7.8 10.6

841 Yes No 17 MED LYMPHOMA & NON-ACUTE LEUKEMIA W CC 1.6376 5.1 6.8

842 Yes No 17 MED LYMPHOMA & NON-ACUTE LEUKEMIA W/O CC/MCC 1.0382 3.2 4.2

843 No No 17 MED OTHER MYELOPROLIF DIS OR POORLY DIFF NEOPL DIAG W 1.8400 6.0 8.0CMS-1498-P 1039

MSDRG FY 2011 Proposed RulePostAcute DRG FY 2011 Proposed Rule Special Pay DRG MDC TYPE MS-DRG Title Weights Geometric

mean LOS Arithmetic

mean LOS MCC

844 No No 17 MED OTHER MYELOPROLIF DIS OR POORLY DIFF NEOPL DIAG W CC 1.1895 4.3 5.6

845 No No 17 MED OTHER MYELOPROLIF DIS OR POORLY DIFF NEOPL DIAG W/O CC/MCC 0.8099 2.9 3.8

846 No No 17 MED CHEMOTHERAPY W/O ACUTE LEUKEMIA AS SECONDARY DIAGNOSIS W MCC 2.1885 5.4 8.0

847 No No 17 MED CHEMOTHERAPY W/O ACUTE LEUKEMIA AS SECONDARY DIAGNOSIS W CC 0.9901 2.8 3.4

848 No No 17 MED CHEMOTHERAPY W/O ACUTE LEUKEMIA AS SECONDARY DIAGNOSIS W/O CC/MCC 0.8070 2.4 3.0 849 No No 17 MED RADIOTHERAPY 1.2501 4.4 6.0

853 Yes No 18 SURG INFECTIOUS & PARASITIC DISEASES W O.R. PROCEDURE W MCC 5.5154 12.1 15.7

854 Yes No 18 SURG INFECTIOUS & PARASITIC DISEASES W O.R. PROCEDURE W CC 2.7976 8.2 10.0

855 Yes No 18 SURG INFECTIOUS & PARASITIC DISEASES W O.R. PROCEDURE W/O CC/MCC 1.3920 3.9 5.4

856 Yes No 18 SURG POSTOPERATIVE OR POSTTRAUMATIC INFECTIONS W O.R. PROC W MCC 5.1335 11.2 15.0

857 Yes No 18 SURG POSTOPERATIVE OR POSTTRAUMATIC INFECTIONS W O.R. PROC W CC 2.1011 6.2 7.9

858 Yes No 18 SURG POSTOPERATIVE OR POSTTRAUMATIC INFECTIONS W O.R. PROC W/O CC/MCC 1.3079 4.1 5.1

862 Yes No 18 MED POSTOPERATIVE & POSTTRAUMATIC INFECTIONS W MCC 1.9553 5.8 7.8

863 Yes No 18 MED POSTOPERATIVE & POSTTRAUMATIC INFECTIONS W/O MCC 0.9765 4.0 4.9 864 No No 18 MED FEVER 0.8255 3.0 3.8 865 No No 18 MED VIRAL ILLNESS W MCC 1.5524 4.5 6.4 866 No No 18 MED VIRAL ILLNESS W/O MCC 0.7420 2.8 3.5

867 Yes No 18 MED OTHER INFECTIOUS & PARASITIC DISEASES DIAGNOSES W MCC 2.4723 6.8 9.2

868 Yes No 18 MED OTHER INFECTIOUS & PARASITIC DISEASES 1.1597 4.3 5.4CMS-1498-P 1040

MSDRG FY 2011 Proposed RulePostAcute DRG FY 2011 Proposed Rule Special Pay DRG MDC TYPE MS-DRG Title Weights Geometric

mean LOS Arithmetic

mean LOS DIAGNOSES W CC

869 Yes No 18 MED OTHER INFECTIOUS & PARASITIC DISEASES DIAGNOSES W/O CC/MCC 0.7183 3.0 3.6

870 Yes No 18 MED SEPTICEMIA OR SEVERE SEPSIS W MV 96+ HOURS 5.8105 12.8 15.2

871 Yes No 18 MED SEPTICEMIA OR SEVERE SEPSIS W/O MV 96+ HOURS W MCC 1.9056 5.4 7.2

872 Yes No 18 MED SEPTICEMIA OR SEVERE SEPSIS W/O MV 96+ HOURS W/O MCC 1.1522 4.5 5.4

876 No No 19 SURG O.R. PROCEDURE W PRINCIPAL DIAGNOSES OF MENTAL ILLNESS 2.8176 8.1 12.7

880 No No 19 MED ACUTE ADJUSTMENT REACTION & PSYCHOSOCIAL DYSFUNCTION 0.6148 2.3 3.0 881 No No 19 MED DEPRESSIVE NEUROSES 0.6140 3.1 4.2 882 No No 19 MED NEUROSES EXCEPT DEPRESSIVE 0.6250 3.1 4.3

883 No No 19 MED DISORDERS OF PERSONALITY & IMPULSE CONTROL 1.0741 4.9 7.7

884 Yes No 19 MED ORGANIC DISTURBANCES & MENTAL RETARDATION 0.9345 4.0 5.4 885 No No 19 MED PSYCHOSES 0.8920 5.4 7.4

886 No No 19 MED BEHAVIORAL & DEVELOPMENTAL DISORDERS 0.8253 3.9 6.2

887 No No 19 MED OTHER MENTAL DISORDER DIAGNOSES 0.7744 2.9 4.0

894 No No 20 MED ALCOHOL/DRUG ABUSE OR DEPENDENCE, LEFT AMA 0.4007 2.1 2.9

895 No No 20 MED ALCOHOL/DRUG ABUSE OR DEPENDENCE W REHABILITATION THERAPY 1.0145 8.5 10.9

896 Yes No 20 MED ALCOHOL/DRUG ABUSE OR DEPENDENCE W/O REHABILITATION THERAPY W MCC 1.4528 4.7 6.5

897 Yes No 20 MED ALCOHOL/DRUG ABUSE OR DEPENDENCE W/O REHABILITATION THERAPY W/O MCC 0.6413 3.2 4.0

901 No No 21 SURG WOUND DEBRIDEMENTS FOR INJURIES W MCC 3.9427 9.1 14.1

902 No No 21 SURG WOUND DEBRIDEMENTS FOR INJURIES W CC 1.7989 5.4 7.5

903 No No 21 SURG WOUND DEBRIDEMENTS FOR INJURIES W/O CC/MCC 1.0616 3.3 4.4

904 No No 21 SURG SKIN GRAFTS FOR INJURIES W CC/MCC 3.0388 7.3 11.1CMS-1498-P 1041

MSDRG FY 2011 Proposed RulePostAcute DRG FY 2011 Proposed Rule Special Pay DRG MDC TYPE MS-DRG Title Weights Geometric

mean LOS Arithmetic

mean LOS

905 No No 21 SURG SKIN GRAFTS FOR INJURIES W/O CC/MCC 1.1720 3.4 4.5

906 No No 21 SURG HAND PROCEDURES FOR INJURIES 1.0393 2.1 3.1

907 Yes No 21 SURG OTHER O.R. PROCEDURES FOR INJURIES W MCC 3.8155 7.8 11.1

908 Yes No 21 SURG OTHER O.R. PROCEDURES FOR INJURIES W CC 1.9277 4.7 6.3

909 Yes No 21 SURG OTHER O.R. PROCEDURES FOR INJURIES W/O CC/MCC 1.1622 2.6 3.4 913 No No 21 MED TRAUMATIC INJURY W MCC 1.3305 4.0 5.6 914 No No 21 MED TRAUMATIC INJURY W/O MCC 0.6943 2.5 3.2 915 No No 21 MED ALLERGIC REACTIONS W MCC 1.4162 3.6 5.1 916 No No 21 MED ALLERGIC REACTIONS W/O MCC 0.4820 1.7 2.1

917 Yes No 21 MED POISONING & TOXIC EFFECTS OF DRUGS W MCC 1.4814 3.7 5.1

918 Yes No 21 MED POISONING & TOXIC EFFECTS OF DRUGS W/O MCC 0.6234 2.1 2.7

919 No No 21 MED COMPLICATIONS OF TREATMENT W MCC 1.5999 4.4 6.2

920 No No 21 MED COMPLICATIONS OF TREATMENT W CC 0.9760 3.2 4.3

921 No No 21 MED COMPLICATIONS OF TREATMENT W/O CC/MCC 0.6179 2.2 2.8

922 No No 21 MED OTHER INJURY, POISONING & TOXIC EFFECT DIAG W MCC 1.3409 3.8 5.4

923 No No 21 MED OTHER INJURY, POISONING & TOXIC EFFECT DIAG W/O MCC 0.6742 2.3 3.2

927 No No 22 SURG EXTENSIVE BURNS OR FULL THICKNESS BURNS W MV 96+ HRS W SKIN GRAFT 12.6506 21.8 28.2

928 No No 22 SURG FULL THICKNESS BURN W SKIN GRAFT OR INHAL INJ W CC/MCC 4.7191 10.8 14.9

929 No No 22 SURG FULL THICKNESS BURN W SKIN GRAFT OR INHAL INJ W/O CC/MCC 2.0261 5.3 7.7

933 No No 22 MED EXTENSIVE BURNS OR FULL THICKNESS BURNS W MV 96+ HRS W/O SKIN GRAFT 2.2750 2.3 5.2

934 No No 22 MED FULL THICKNESS BURN W/O SKIN GRFT OR INHAL INJ 1.3530 4.1 5.8 935 No No 22 MED NON-EXTENSIVE BURNS 1.2817 3.5 5.2

939 No No 23 SURG O.R. PROC W DIAGNOSES OF OTHER CONTACT W HEALTH SERVICES W MCC 2.8683 6.8 10.0

940 No No 23 SURG O.R. PROC W DIAGNOSES OF OTHER CONTACT W HEALTH SERVICES W CC 1.6847 3.6 5.4CMS-1498-P 1042

MSDRG FY 2011 Proposed RulePostAcute DRG FY 2011 Proposed Rule Special Pay DRG MDC TYPE MS-DRG Title Weights Geometric

mean LOS Arithmetic

mean LOS

941 No No 23 SURG O.R. PROC W DIAGNOSES OF OTHER CONTACT W HEALTH SERVICES W/O CC/MCC 1.1488 2.0 2.6 945 Yes No 23 MED REHABILITATION W CC/MCC 1.2883 8.3 10.2 946 Yes No 23 MED REHABILITATION W/O CC/MCC 1.1140 6.6 7.5 947 Yes No 23 MED SIGNS & SYMPTOMS W MCC 1.0970 3.7 4.9 948 Yes No 23 MED SIGNS & SYMPTOMS W/O MCC 0.6840 2.7 3.4 949 No No 23 MED AFTERCARE W CC/MCC 0.9823 2.6 4.3 950 No No 23 MED AFTERCARE W/O CC/MCC 0.4983 2.1 2.8

951 No No 23 MED OTHER FACTORS INFLUENCING HEALTH STATUS 0.6963 2.2 4.5

955 No No 24 SURG CRANIOTOMY FOR MULTIPLE SIGNIFICANT TRAUMA 5.4991 9.0 12.6

956 Yes No 24 SURG LIMB REATTACHMENT, HIP & FEMUR PROC FOR MULTIPLE SIGNIFICANT TRAUMA 3.3461 7.0 8.4

957 No No 24 SURG OTHER O.R. PROCEDURES FOR MULTIPLE SIGNIFICANT TRAUMA W MCC 6.3035 10.2 14.3

958 No No 24 SURG OTHER O.R. PROCEDURES FOR MULTIPLE SIGNIFICANT TRAUMA W CC 3.8041 7.6 9.5

959 No No 24 SURG OTHER O.R. PROCEDURES FOR MULTIPLE SIGNIFICANT TRAUMA W/O CC/MCC 2.2479 4.5 5.6

963 No No 24 MED OTHER MULTIPLE SIGNIFICANT TRAUMA W MCC 2.8145 6.0 8.7

964 No No 24 MED OTHER MULTIPLE SIGNIFICANT TRAUMA W CC 1.4818 4.5 5.6

965 No No 24 MED OTHER MULTIPLE SIGNIFICANT TRAUMA W/O CC/MCC 0.9316 3.1 3.8

969 No No 25 SURG HIV W EXTENSIVE O.R. PROCEDURE W MCC 5.5054 12.1 17.1

970 No No 25 SURG HIV W EXTENSIVE O.R. PROCEDURE W/O MCC 2.7380 6.3 8.7

974 No No 25 MED HIV W MAJOR RELATED CONDITION W MCC 2.5819 6.9 9.6

975 No No 25 MED HIV W MAJOR RELATED CONDITION W CC 1.3551 5.1 6.6

976 No No 25 MED HIV W MAJOR RELATED CONDITION W/O CC/MCC 0.9004 3.5 4.4

977 No No 25 MED HIV W OR W/O OTHER RELATED CONDITION 1.0398 3.6 4.9

981 Yes No SURG EXTENSIVE O.R. PROCEDURE UNRELATED TO PRINCIPAL DIAGNOSIS W MCC 5.0726 11.0 14.1

982 Yes No SURG EXTENSIVE O.R. PROCEDURE UNRELATED TO PRINCIPAL 2.9434 6.8 8.7CMS-1498-P 1043

MSDRG FY 2011 Proposed RulePostAcute DRG FY 2011 Proposed Rule Special Pay DRG MDC TYPE MS-DRG Title Weights Geometric

mean LOS Arithmetic

mean LOS DIAGNOSIS W CC

983 Yes No SURG EXTENSIVE O.R. PROCEDURE UNRELATED TO PRINCIPAL DIAGNOSIS W/O CC/MCC 1.7800 3.1 4.2

984 No No SURG PROSTATIC O.R. PROCEDURE UNRELATED TO PRINCIPAL DIAGNOSIS W MCC 3.3086 10.5 13.3

985 No No SURG PROSTATIC O.R. PROCEDURE UNRELATED TO PRINCIPAL DIAGNOSIS W CC 2.1518 6.9 9.0

986 No No SURG PROSTATIC O.R. PROCEDURE UNRELATED TO PRINCIPAL DIAGNOSIS W/O CC/MCC 1.1129 2.8 4.1

987 Yes No SURG NON-EXTENSIVE O.R. PROC UNRELATED TO PRINCIPAL DIAGNOSIS W MCC 3.4500 9.3 12.2

988 Yes No SURG NON-EXTENSIVE O.R. PROC UNRELATED TO PRINCIPAL DIAGNOSIS W CC 1.8721 5.6 7.4

989 Yes No SURG NON-EXTENSIVE O.R. PROC UNRELATED TO PRINCIPAL DIAGNOSIS W/O CC/MCC 1.0568 2.5 3.5

998 No No ** PRINCIPAL DIAGNOSIS INVALID AS DISCHARGE DIAGNOSIS 0.0000 0.0 0.0 999 No No ** UNGROUPABLE 0.0000 0.0 0.0

MS-DRGs 998 and 999 contain cases that could not be assigned to valid DRGs. Note: If there is no value in either the geometric mean leng th of stay or the arithmetic mean length of stay columns, the volume of cases is insufficient to determine a meaningful computation of these statistics.CMS-1498-P 1044

TABLE 6A.—NEW DIAGNOSIS CODES

Diagnosis Code Description CC MDC MS-DRG

237.73 Schwannomatosis N 01 091,092,093 237.78 Other neurofibromatosis N 01 091,092,093 275.01 Hereditary hemochromatosis N 10 642 275.02 Hemochromatosis due to repeated red blood cell transfusions N 10 642

275.03 Other hemochromatosis N 10 642 275.09 Other disorders of iron metabolism N 10 642 276.61 Transfusion associated circulatory overload N 10 15 640,641 791 1 ,793 1

276.69 Other fluid overload N 10 15 640,641 791 1 ,793 1

278.03 Obesity hypoventilation syndrome N 04 205,206 287.41 Posttransfusion purpura N 15 16 25 791 1 ,793 1
813 977

287.49 Other secondary thrombocytopenia N 15 16 25 791 1 ,793 1
813 977

447.70 Aortic ectasia, unspecified site N 05 299,300,301 447.71 Thoracic aortic ectasia N 05 299,300,301 447.72 Abdominal aortic ectasia N 05 299,300,301 447.73 Thoracoabdominal aortic ectasia N 05 299,300,301 560.32 Fecal impaction N 06 15 388,389,390 791 1 ,793 1

724.03 Spinal stenosis, lumbar region, with neurogenic claudication N 08 551,552

752.31 Agenesis of uterus N 13 742,743,760,761 752.32 Hypoplasia of uterus N 13 742,743,760,761 752.33 Unicornuate uterus N 13 742,743,760,761 752.34 Bicornuate uterus N 13 742,743,760,761 752.35 Septate uterus N 13 742,743,760,761 752.36 Arcuate uterus N 13 742,743,760,761 752.39 Other anomalies of uterus N 13 742,743,760,761 752.43 Cervical agenesis N 13 742,743,760,761 752.44 Cervical duplication N 13 742,743,760,761 752.45 Vaginal agenesis N 13 742,743,760,761CMS-1498-P 1045

Diagnosis Code Description CC MDC MS-DRG

752.46 Transverse vaginal septum N 13 742,743,760,761 752.47 Longitudinal vaginal septum N 13 742,743,760,761 780.33 Post traumatic seizures N 01 100,101 780.66 Febrile nonhemolytic tr ansfusion reaction N 18 25 864 977

784.92 Jaw pain N PRE 03 011,012,013 157,158,159

786.30 Hemoptysis, unspecified CC 04 204 786.31 Acute idiopathic pulmonary hemorrhage in infants [AIPHI] CC 04 204

786.39 Other hemoptysis CC 04 204 787.60 Full incontinence of feces N 06 391,392 787.61 Incomplete defecation N 06 391,392 787.62 Fecal smearing N 06 391,392 787.63 Fecal urgency N 06 391,392 799.50 Unspecified signs and symptoms involving cognition N 19 884

799.51 Attention or concen tration deficit N 19 886 799.52 Cognitive communication deficit N 19 884 799.53 Visuospatial deficit N 01 091,092,093 799.54 Psychomotor deficit N 19 884 799.55 Frontal lobe and executive function deficit N 19 884 799.59 Other signs and symptoms involving cognition N 19 884 970.81 Poisoning by cocaine N 21 917,918 970.89 Poisoning by other central nervous system stimulants N 21 917,918

999.60 ABO incompatibility reaction, unspecified CC 15 16 791 1 ,793 1 811,812

999.61 ABO incompatibility with hemolytic transfusion reaction not specified as acute or delayed CC 15 16 791 1 ,793 1 811,812

999.62 ABO incompatibility with acute hemolytic transfusion reaction CC 15 16 791 1 ,793 1 811,812

999.63 ABO incompatibility with delayed hemolytic transfusion reaction CC 15 16 791 1 ,793 1 811,812

999.69 Other ABO incompatibility reaction CC 15 16 791 1 ,793 1 811,812CMS-1498-P 1046

Diagnosis Code Description CC MDC MS-DRG

999.70 Rh incompatibility reaction, unspecified CC 15 16 791 1 ,793 1 811,812

999.71 Rh incompatibility with hemolytic transfusion reaction not specified as acute or delayed CC 15 16 791 1 ,793 1 811,812

999.72 Rh incompatibility with acute hemolytic transfusion reaction CC 15 16 791 1 ,793 1 811,812

999.73 Rh incompatibility w ith delayed hemolytic transfusion reaction CC 15 16 791 1 ,793 1 811,812

999.74 Other Rh incompatibility reaction CC 15 16 791 1 ,793 1 811,812

999.75 Non-ABO incompatibility reaction, unspecified CC 15 16 791 1 ,793 1 811,812

999.76 Non-ABO incompatibility with hemolytic transfusion reaction not specified as acute or delayed CC 15 16 791 1 ,793 1 811,812

999.77 Non-ABO incompatibility with acute hemolytic transfusion reaction CC 15 16 791 1 ,793 1 811,812

999.78 Non-ABO incompatibility with delayed hemolytic transfusion reaction CC 15 16 791 1 ,793 1 811,812

999.79 Other non-ABO incompatibility reaction CC 15 16 791 1 ,793 1 811,812

999.80 Transfusion reaction, unspecified N 15 16 791 1 ,793 1 811,812

999.83 Hemolytic transfusion reaction, incompatibility unspecified CC 15 16 791 1 ,793 1 811,812

999.84 Acute hemolytic tr ansfusion reaction, incompatibilty unspecified CC 15 16 791 1 ,793 1 811,812

999.85 Delayed hemolytic transfusion reaction, incompatibility unspecified CC 15 16 791 1 ,793 1 811,812

V11.4 Personal history of co mbat and operational stress reaction N 23 951CMS-1498-P 1047

Diagnosis Code Description CC MDC MS-DRG

V13.23 Personal history of vaginal dysplasia N 23 951 V13.24 Personal history of vulvar dysplasia N 23 951 V13.62 Personal history of other (corrected) congenital malformations of genitourinary system N 23 951

V13.63 Personal history of (corrected) congenital malformations of nervous system N 23 951

V13.64 Personal history of (corrected) congenital malformations of eye, ear, face and neck N 23 951

V13.65 Personal history of (corrected) congenital malformations of heart and circulatory system N 23 951

V13.66 Personal history of (corrected) congenital malformations of respiratory system N 23 951

V13.67 Personal history of (corrected) congenital malformations of digestive system N 23 951

V13.68 Personal history of (corrected) congenital malformations of integument, limbs, and musculoskeletal system N 23 951

V15.53 Personal history of retained foreign body fully removed N 23 951

V25.11 Encounter for inser tion of intrauterine contraceptive device N 23 951

V25.12 Encounter for rem oval of intrauterine contraceptive device N 23 951

V25.13 Encounter for remova l and reinsertion of intrauterine contraceptive device N 23 951

V49.86 Do not resuscitate status N 23 951 V62.85 Homicidal ideation N 23 951 V85.41 Body Mass Index 40.0-44.9, adult CC 10 640,641 V85.42 Body Mass Index 45.0-49.9, adult CC 10 640,641 V85.43 Body Mass Index 50.0-59.9, adult CC 10 640,641 V85.44 Body Mass Index 60.0-69.9, adult CC 10 640,641 V85.45 Body Mass Index 70 and over, adult CC 10 640,641 V88.11 Acquired total absence of pancreas N 23 951 V88.12 Acquired partial abse nce of pancreas N 23 951 V90.01 Retained depleted uranium fragments N 23 951 V90.09 Other retained radioactive fragments N 23 951 V90.10 Retained metal fragments, unspecified N 23 951 V90.11 Retained magnetic metal fragments N 23 951 V90.12 Retained nonmagnetic metal fragments N 23 951 V90.2 Retained plastic fragments N 23 951 V90.31 Retained animal quills or spines N 23 951 V90.32 Retained tooth N 23 951 V90.33 Retained wood fragments N 23 951CMS-1498-P 1048

Diagnosis Code Description CC MDC MS-DRG

V90.39 Other retained organic fragments N 23 951 V90.81 Retained glass fragments N 23 951 V90.83 Retained stone or crystalline fragments N 23 951 V90.89 Other specified retained foreign body N 23 951 V90.9 Retained foreign body, unspecified material N 23 951 V91.00 Twin gestation, unspecified number of placenta, unspecified number of amniotic sacs N 23 951

V91.01 Twin gestation, m onochorionic/monoamniotic (one placenta, one amniotic sac) N 23 951

V91.02 Twin gestation, monochor ionic/diamniotic (one placenta, two amniotic sacs) N 23 951

V91.03 Twin gestation, dichorionic/diamniotic (two placentae, two amniotic sacs) N 23 951

V91.09 Twin gestation, unable to determine number of placenta and number of amniotic sacs N 23 951

V91.10 Triplet gestation, unspeci fied number of placenta and unspecified number of amniotic sacs N 23 951

V91.11 Triplet gestation, with two or more monochorionic fetuses N 23 951

V91.12 Triplet gestation, with two or more monoamniotic fetuses N 23 951

V91.19 Triplet gestation, unabl e to determine number of placenta and number of amniotic sacs N 23 951

V91.20 Quadruplet gestati on, unspecified number of placenta and unspecified number of amniotic sacs N 23 951

V91.21 Quadruplet gestation, with two or more monochorionic fetuses N 23 951

V91.22 Quadruplet gestation, with two or more monoamniotic fetuses N 23 951

V91.29 Quadruplet gestati on, unable to determine number of placenta and number of amniotic sacs N 23 951

V91.90 Other specified multiple gestation, unspecified number of placenta and unspecified number of amniotic sacs N 23 951

V91.91 Other specified multiple gestation, with two or more monochorionic fetuses N 23 951

V91.92 Other specified multiple gestation, with two or more monoamniotic fetuses N 23 951

V91.99 Other specified multiple gestation, unable to determine number of placenta and number of amniotic sacs N 23 951

Notes:
1 Secondary diagnosis of major problemCMS-1498-P 1049

TABLE 6B.—NEW PROCEDURE CODES

Procedure Code Description O.R. MDC MS-DRG

00.60 Insertion of drug-eluting stent(s) of superficial femoral artery N

32.27 Bronchoscopic bronchial thermoplasty, ablation of airway smooth muscle Y 04 163,164,165

39.81 Implantation or replacement of carotid sinus stimulation device, total system Y 05 252,253,254

39.82 Implantation or replacement of carotid sinus stimulation lead(s) only Y 05 252,253,254

39.83 Implantation or replacement of carotid sinus stimulation pulse generator only Y 05 252,253,254

39.84 Revision of carotid sinus stimulation lead(s) only Y 05 252,253,254 39.85 Revision of carotid sinus stimulation pulse generator Y 05 252,253,254

39.86 Removal of carotid sinus stimulation device, total system Y 05 252,253,254

39.87 Removal of carotid sinus stimulation lead(s) only Y 05 252,253,254 39.88 Removal of carotid sinus stimulation pulse generator only Y 05 252,253,254

39.89 Other operations on carotid body, carotid sinus and other vascular bodies Y 05 252,253,254

81.88 Reverse total shoulder replacement Y 08 21 24 483,484 907,908,909 957,958,959CMS-1498-P 1050

TABLE 6C.—INVALID DIAGNOSIS CODES

Diagnosis Code Description CC MDC MS-DRG

275.0 Disorders of iron metabolism N 10 642 276.6 Fluid overload N 10 15 640,641 791 1 ,793 1

287.4 Secondary thrombocytopenia N 15 16 25 791 1 ,793 1
813 977

752.3 Other anomalies of uterus N 13 742,743,760,761 786.3 Hemoptysis CC 04 204 787.6 Incontinence of feces N 06 391,392 970.8 Poisoning by other specified central nervous system stimulants N 21 917,918

999.6 ABO incompatibility reaction CC 15 16 791 1 ,793 1 811,812

999.7 Rh incompatibility reaction CC 15 16 791 1 ,793 1 811,812

V25.1 Encounter for inser tion of intrauterine contraceptive device N 23 951

V85.4 Body Mass Index 40 and over, adult CC 10 640,641 Notes:
1 Secondary diagnosis of major problem

TABLE 6D.—INVALID PROCEDURE CODES

Procedure Code Description O.R. MDC MS-DRG

39.8 Operations on carotid body, carotid sinus and other vascular bodies Y 01 04 05 037,038,039 166,167,168 252,253,254CMS-1498-P 1051

TABLE 6E.—REVISED DIAGNOSIS CODE TITLES

Diagnosis Code Description CC MDC MS-DRG

629.81 Recurrent pregnancy loss without current
pregnancy N 13 742,743,760,761

646.30 Recurrent pregnancy loss, unspecified as to episode of care or not applicable N 14 998

646.31 Recurrent pregnancy loss, delivered, with or without mention of antepartum condition CC 14 765,766,767,768,774, 775

646.33 Recurrent pregnancy loss, antepartum condition or complication N 14 781,782

724.02 Spinal stenosis, lumbar region, without neurogenic claudication N 08 551,552

781.8 Neurologic neglect syndrome CC 01 091,092,093 V13.61 Personal history of (corrected) hypospadias N 23 951 V13.69 Personal history of other (corrected) congenital ma lformations N 23 951

V26.35 Encounter for testin g of male partner of female with recurrent pregnancy loss N 23 951

TABLE 6F.—REVISED PROCEDURE CODE TITLES

Procedure Code Description O.R. MDC MS-DRG

00.55 Insertion of drug-eluting stent(s) of other peripheral vessel(s) N

81.80 Other total shoulder replacement Y 08 21 24 483,484 907,908,909 957,958,959

99.14 Injection or infusion of immunoglobulin NCMS-1498-P 1052

TABLE 7A.—MEDICARE PROSPECTIV E PAYMENT SYS TEM SELECTED PERCENTILE LENGHTS OF STAY; FY 2009 MedPAR UPDATE – DECEMBER 2009 GROUPER V27.0 MS-DRGs

MS-DRG Number of Discharges Arithmetic Mean LOS 10th Percentile 25th Percentile 50th Percentile 75th Percentile 90th Percentile 1 1,001 40.5395 12 19 31 50 80 2 239 20.7113 8 11 15 26 39 3 21,956 36.6115 15 21 30 44 63 4 21,395 27.1269 11 16 22 32 46 5 949 19.6185 6 9 14 24 41 6 348 8.3937 5 6 8 10 12 7 469 18.7058 8 11 15 23 31 8 508 11.7835 6 7 9 13 21 9 1,818 21.3311 8 15 19 25 33 10 137 9.7007 5 7 8 11 13 11 1,534 15.5782 6 8 12 19 29 12 1,895 9.9135 4 6 8 12 17 13 1,008 6.7401 3 4 6 8 11 20 1,102 17.1207 6 10 16 23 29 21 448 13.9866 7 10 14 17 22 22 146 8.3767 2 4 8 12 14 23 4,479 11.7948 2 5 9 16 23 24 1,635 7.8526 1 3 6 10 15 25 12,006 11.4943 3 6 9 15 22 26 11,045 7.2149 2 4 6 9 13 27 12,591 3.8861 1 2 3 5 7 28 1,983 13.0479 4 7 11 16 24 29 3,373 6.3409 1 3 5 8 12 30 3,432 3.2797 1 1 3 4 7 31 1,247 12.0938 2 5 9 16 24 32 2,730 5.2289 1 2 4 7 11 33 3,351 2.6640 1 1 2 3 5 34 976 6.9191 1 2 6 9 14 35 2,179 2.9849 1 1 2 4 7 36 5,732 1.5223 1 1 1 1 3 37 5,691 8.2903 2 3 7 11 17 38 13,702 3.3307 1 1 2 4 8 39 43,823 1.6743 1 1 1 2 3 40 5,628 11.7386 3 6 9 15 22 41 6,741 6.3600 1 3 5 8 12 42 3,808 3.2261 1 1 2 4 7 52 1,250 6.6328 2 3 5 7 11 53 487 3.5832 1 2 3 5 6 54 7,691 6.2942 2 3 5 8 12 55 12,545 4.5368 1 2 3 6 9 56 11,620 6.9885 2 3 5 8 13 57 40,900 4.7691 2 3 4 5 8CMS-1498-P 1053

MS-DRG Number of Discharges Arithmetic Mean LOS 10th Percentile 25th Percentile 50th Percentile 75th Percentile 90th Percentile 58 1,005 7.0537 2 3 5 8 13 59 3,138 4.9143 2 3 4 6 8 60 3,515 3.7713 1 2 3 5 6 61 2,468 8.2265 2 4 7 11 16 62 3,537 5.5785 2 3 5 7 10 63 1,309 3.9152 2 2 3 5 7 64 70,612 6.7735 2 3 5 9 13 65 102,945 4.7452 2 3 4 6 8 66 66,535 3.2734 1 2 3 4 6 67 1,959 5.2409 2 3 4 6 9 68 9,804 3.2279 1 2 3 4 6 69 92,535 2.7913 1 2 2 3 5 70 12,885 7.0182 2 3 5 9 13 71 10,469 4.8679 2 3 4 6 9 72 4,838 3.1174 1 2 2 4 6 73 11,890 5.5112 2 3 4 7 10 74 28,604 3.9747 1 2 3 5 7 75 1,348 6.9733 2 4 5 8 13 76 661 3.9259 1 2 3 5 7 77 1,834 6.4002 2 3 5 8 12 78 1,807 4.0697 1 2 3 5 7 79 774 3.0749 1 2 3 4 5 80 2,027 4.8101 1 2 4 6 9 81 5,465 3.3420 1 2 3 4 6 82 2,546 6.0361 1 1 4 8 13 83 2,422 4.5727 1 2 3 6 9 84 2,542 2.7825 1 1 2 4 5 85 8,441 6.9889 2 3 5 9 14 86 13,175 4.5672 1 2 4 6 8 87 13,012 2.9085 1 1 2 4 5 88 1,078 5.3497 2 3 4 7 10 89 2,947 3.6339 1 2 3 5 7 90 2,481 2.3136 1 1 2 3 4 91 10,887 6.0043 2 3 4 7 12 92 17,603 4.0852 1 2 3 5 7 93 13,215 2.8862 1 1 2 4 5 94 1,527 11.7394 3 6 10 15 21 95 1,085 8.1779 3 5 7 10 15 96 540 5.6667 1 4 5 7 10 97 1,324 11.4373 4 6 9 15 21 98 928 7.6185 3 4 6 10 13 99 423 5.1915 2 3 4 7 10 100 21,435 5.8217 2 3 4 7 11 101 53,878 3.3892 1 2 3 4 6 102 1,501 4.2205 1 2 3 5 9 103 12,310 3.0085 1 1 2 4 6CMS-1498-P 1054

MS-DRG Number of Discharges Arithmetic Mean LOS 10th Percentile 25th Percentile 50th Percentile 75th Percentile 90th Percentile 113 639 5.5994 1 2 4 7 11 114 431 2.5986 1 1 2 3 5 115 850 4.6082 1 2 4 5 7 116 455 4.4813 1 1 2 5 7 117 549 1.9872 1 1 1 1 2 121 744 5.1022 2 3 4 6 8 122 524 3.9790 1 2 3 5 7 123 2,672 2.7182 1 1 2 3 5 124 975 5.1918 1 2 4 6 10 125 4,038 3.2590 1 2 3 4 6 129 1,508 5.2454 1 2 4 7 11 130 943 2.8908 1 1 2 4 6 131 1,132 5.5998 1 2 4 7 11 132 748 2.7126 1 1 2 3 5 133 2,242 5.3965 1 2 4 7 11 134 2,627 2.0837 1 1 1 2 4 135 466 6.3112 1 2 5 9 13 136 351 2.2422 1 1 1 3 5 137 891 4.9989 1 2 4 6 10 138 747 2.4873 1 1 2 3 5 139 1,363 1.7601 1 1 1 2 3 146 841 8.6992 2 4 7 11 18 147 1,255 5.6805 1 2 4 7 11 148 552 3.3442 1 1 2 4 6 149 33,609 2.6159 1 1 2 3 5 150 1,544 4.7668 1 2 4 6 9 151 5,784 2.7934 1 1 2 4 5 152 2,893 4.1912 1 2 3 5 8 153 10,870 3.0419 1 2 2 4 5 154 3,034 5.6839 1 3 4 7 11 155 5,578 4.1133 1 2 3 5 8 156 3,515 2.8942 1 1 2 4 5 157 1,703 6.3429 2 3 5 8 13 158 3,380 4.2719 1 2 3 5 8 159 1,459 2.7347 1 1 2 3 5 163 14,398 13.8007 5 8 12 18 25 164 17,845 7.2187 3 4 6 9 13 165 10,518 4.3993 2 3 4 6 7 166 25,172 11.8608 4 6 9 15 22 167 17,710 7.0035 2 4 6 9 13 168 4,388 4.2985 1 2 3 6 8 175 16,505 6.7183 3 4 6 8 11 176 34,233 4.8503 2 3 4 6 8 177 79,035 8.4026 3 4 7 11 15 178 60,900 6.6817 3 4 6 8 12 179 16,039 4.9675 2 3 4 6 9CMS-1498-P 1055

MS-DRG Number of Discharges Arithmetic Mean LOS 10th Percentile 25th Percentile 50th Percentile 75th Percentile 90th Percentile 180 22,329 7.4210 2 4 6 9 14 181 24,506 5.3350 1 2 4 7 10 182 2,840 3.6532 1 2 3 5 7 183 3,042 6.3534 2 3 5 8 12 184 4,806 4.2239 2 3 4 5 7 185 2,187 3.0393 1 2 3 4 5 186 11,691 6.7234 2 3 5 9 13 187 9,939 4.7687 1 2 4 6 9 188 3,293 3.5299 1 2 3 4 7 189 94,058 5.5455 2 3 4 7 10 190 150,776 5.4847 2 3 5 7 10 191 136,438 4.5856 2 3 4 6 8 192 134,412 3.6580 1 2 3 5 6 193 132,433 6.3110 2 3 5 8 11 194 178,528 4.8665 2 3 4 6 8 195 87,008 3.6926 1 2 3 5 6 196 7,608 6.8980 2 4 6 9 13 197 6,141 4.9870 2 3 4 6 9 198 3,047 3.7670 1 2 3 5 7 199 4,146 7.8968 2 4 6 10 15 200 8,319 4.6915 1 2 4 6 9 201 2,745 3.5457 1 2 3 5 7 202 38,888 4.1342 1 2 3 5 7 203 28,980 3.1588 1 2 3 4 6 204 23,390 2.7325 1 1 2 3 5 205 7,730 5.2508 1 2 4 7 10 206 18,931 3.1590 1 1 3 4 6 207 36,288 14.7898 6 9 13 18 25 208 74,965 7.0337 1 3 6 9 14 215 177 12.6215 1 3 8 14 28 216 10,499 16.8419 8 10 15 21 28 217 5,948 10.3763 6 7 9 13 16 218 1,222 7.9869 5 6 7 9 12 219 14,314 12.8291 5 7 10 15 23 220 15,334 7.7011 4 5 7 9 12 221 4,475 5.9678 4 5 6 7 9 222 3,308 11.6403 4 6 10 15 21 223 3,289 5.4472 1 2 5 8 11 224 3,018 9.6156 3 5 8 12 18 225 4,209 5.0663 2 3 4 7 9 226 8,959 7.9386 1 3 6 11 16 227 28,451 2.7800 1 1 1 4 7 228 2,564 13.9961 6 8 12 17 25 229 2,590 7.9672 4 5 7 10 13 230 806 5.5186 2 4 5 7 9 231 1,473 12.8758 6 8 11 16 22CMS-1498-P 1056

MS-DRG Number of Discharges Arithmetic Mean LOS 10th Percentile 25th Percentile 50th Percentile 75th Percentile 90th Percentile 232 1,098 9.0674 5 6 9 11 14 233 17,629 13.4855 7 9 12 16 22 234 25,101 8.6064 5 6 8 10 13 235 11,045 10.6010 5 6 9 13 18 236 23,925 6.3642 4 5 6 7 10 237 24,161 10.0501 2 4 8 13 20 238 37,998 3.9482 1 1 3 6 8 239 12,154 14.2365 5 7 11 18 27 240 9,506 9.1471 3 5 8 11 16 241 1,552 5.9852 2 3 5 8 11 242 23,571 7.7578 2 4 6 10 14 243 35,573 4.6588 1 2 4 6 9 244 44,828 2.8119 1 1 2 4 6 245 3,970 3.8071 1 1 2 5 8 246 35,016 5.0861 1 2 4 7 10 247 139,869 2.1763 1 1 2 3 4 248 16,308 6.0738 1 3 5 8 12 249 44,453 2.6377 1 1 2 3 5 250 9,062 6.9734 2 3 5 9 14 251 35,031 2.7814 1 1 2 4 6 252 45,083 8.0234 1 3 6 10 17 253 40,080 5.6453 1 2 4 7 11 254 38,370 2.6631 1 1 2 3 6 255 2,897 9.2444 3 5 8 12 17 256 2,782 6.6618 2 3 6 8 12 257 394 4.3046 1 2 4 6 8 258 1,023 6.6970 2 3 5 8 13 259 4,793 2.9994 1 1 2 4 6 260 2,078 10.3725 3 5 8 13 21 261 3,592 4.1779 1 2 3 5 8 262 2,423 2.5815 1 1 2 3 5 263 518 5.6602 1 2 3 7 13 264 22,461 8.2590 1 3 6 11 17 265 1,714 3.3495 1 1 2 4 7 280 81,514 6.5098 2 3 5 8 12 281 41,879 4.0679 1 2 3 5 7 282 34,890 2.7555 1 1 2 4 5 283 14,231 4.9678 1 1 3 6 11 284 2,450 2.6686 1 1 1 3 6 285 1,428 1.7983 1 1 1 2 3 286 32,329 6.5479 2 3 5 8 13 287 127,613 3.0171 1 1 2 4 6 288 2,898 10.8037 4 6 9 13 19 289 979 7.2921 3 4 6 9 12 290 240 5.5792 1 3 5 7 10 291 232,185 6.1498 2 3 5 8 11CMS-1498-P 1057

MS-DRG Number of Discharges Arithmetic Mean LOS 10th Percentile 25th Percentile 50th Percentile 75th Percentile 90th Percentile 292 192,392 4.4947 2 3 4 6 8 293 118,010 3.3080 1 2 3 4 6 294 1,546 5.3668 2 3 5 7 9 295 874 4.0378 1 2 4 5 7 296 2,059 2.7071 1 1 1 3 6 297 629 1.7266 1 1 1 2 3 298 372 1.2097 1 1 1 1 1 299 26,735 6.0663 2 3 5 7 11 300 42,906 4.7095 1 3 4 6 8 301 28,789 3.4713 1 2 3 5 6 302 10,132 3.9515 1 2 3 5 7 303 50,124 2.3738 1 1 2 3 4 304 3,969 4.5382 1 2 4 6 8 305 32,236 2.6866 1 1 2 3 5 306 3,773 5.8049 2 3 4 7 11 307 5,337 3.1731 1 2 3 4 6 308 71,058 5.0115 2 2 4 6 9 309 93,276 3.6117 1 2 3 5 7 310 127,913 2.5033 1 1 2 3 4 311 15,715 2.2386 1 1 2 3 4 312 165,015 2.9422 1 1 2 4 5 313 169,337 2.0617 1 1 2 2 4 314 66,894 6.7151 2 3 5 8 13 315 25,869 4.0866 1 2 3 5 8 316 10,674 2.5722 1 1 2 3 5 326 11,940 16.0999 5 8 13 20 30 327 9,818 8.5639 2 5 7 11 16 328 8,538 3.7853 1 2 3 5 8 329 50,242 15.1759 6 8 13 19 27 330 56,158 8.8715 4 5 7 11 15 331 24,253 5.3159 3 4 5 6 8 332 1,825 13.8553 6 8 11 17 25 333 5,068 7.9820 4 5 7 10 13 334 3,027 4.9045 2 3 5 6 8 335 8,404 13.3221 5 8 12 17 23 336 12,225 8.4806 3 5 7 11 15 337 7,648 5.0911 1 3 4 7 9 338 1,571 9.6295 4 5 8 12 17 339 2,700 6.4174 3 4 6 8 11 340 3,036 3.7286 1 2 3 5 6 341 1,065 6.4939 2 3 5 9 13 342 2,745 3.6947 1 2 3 5 7 343 6,461 2.0108 1 1 2 2 4 344 1,132 10.8843 4 6 9 13 21 345 2,834 6.7759 3 4 6 8 11 346 2,591 4.6299 2 3 4 6 7CMS-1498-P 1058

MS-DRG Number of Discharges Arithmetic Mean LOS 10th Percentile 25th Percentile 50th Percentile 75th Percentile 90th Percentile 347 1,798 8.6029 2 4 6 11 17 348 3,935 5.1624 1 2 4 7 10 349 4,039 2.9153 1 1 2 4 6 350 2,080 7.5846 2 3 6 10 15 351 4,131 4.3053 1 2 4 6 8 352 6,456 2.3748 1 1 2 3 4 353 3,824 8.3227 2 4 7 11 16 354 8,960 4.8608 1 3 4 6 9 355 12,947 2.7752 1 1 2 4 5 356 8,909 12.3348 3 6 9 15 24 357 6,591 7.0678 2 4 6 9 13 358 2,045 4.0088 1 2 3 5 8 368 4,134 6.3464 2 3 5 8 12 369 4,797 4.3688 2 2 4 5 8 370 1,777 3.0833 1 2 3 4 5 371 30,894 8.3267 3 4 6 10 16 372 26,332 6.3285 2 4 5 8 11 373 11,202 4.5867 2 3 4 6 8 374 9,912 8.1968 2 4 6 10 16 375 15,328 5.5969 2 3 4 7 10 376 2,537 3.5861 1 2 3 4 6 377 68,239 6.0023 2 3 5 7 11 378 118,605 4.0662 2 2 3 5 7 379 50,778 3.0378 1 2 3 4 5 380 3,797 7.0608 2 3 5 9 13 381 5,326 4.6707 2 3 4 6 8 382 2,708 3.4830 1 2 3 4 6 383 1,656 5.0290 2 3 4 6 9 384 6,876 3.5609 1 2 3 4 6 385 3,198 7.6826 2 4 6 9 15 386 8,050 5.1593 2 3 4 6 9 387 4,132 3.9131 1 2 3 5 7 388 26,490 6.7018 2 3 5 8 13 389 47,015 4.6775 2 3 4 6 8 390 39,806 3.3390 1 2 3 4 6 391 61,486 4.9306 1 2 4 6 9 392 232,434 3.3799 1 2 3 4 6 393 27,251 6.6114 2 3 5 8 13 394 43,392 4.5431 1 2 4 6 8 395 20,065 3.0842 1 2 3 4 6 405 4,575 15.7388 5 8 12 20 31 406 4,893 8.1721 2 5 7 10 15 407 1,927 5.1520 1 3 5 7 8 408 1,640 13.2659 5 7 11 17 24 409 1,299 8.6343 3 5 7 11 15 410 475 5.8400 2 4 5 7 10CMS-1498-P 1059

MS-DRG Number of Discharges Arithmetic Mean LOS 10th Percentile 25th Percentile 50th Percentile 75th Percentile 90th Percentile 411 840 11.7000 5 7 10 14 21 412 780 8.0923 3 5 7 10 13 413 524 5.4027 2 3 5 7 9 414 5,253 11.1961 4 6 9 14 20 415 5,229 7.0692 3 4 6 9 12 416 3,992 4.3790 2 3 4 5 7 417 20,292 7.7720 3 4 6 10 14 418 24,952 5.1565 2 3 4 7 9 419 28,245 3.0297 1 1 2 4 6 420 774 13.0530 3 6 10 17 26 421 846 6.5910 1 3 5 9 13 422 234 4.1068 1 2 3 5 8 423 1,617 14.1472 4 7 11 18 28 424 672 8.6577 3 4 7 11 16 425 86 5.6860 2 3 4 7 10 432 13,529 6.4975 2 3 5 8 13 433 6,969 4.3401 1 2 4 5 8 434 398 3.1734 1 2 3 4 6 435 13,761 7.2943 2 3 6 9 14 436 11,039 5.3120 2 3 4 7 10 437 2,182 3.6856 1 2 3 5 7 438 19,674 7.0637 2 3 5 9 14 439 23,206 4.8099 2 3 4 6 9 440 20,560 3.4957 1 2 3 4 6 441 18,105 6.8437 2 3 5 8 14 442 14,938 4.5243 1 2 4 6 8 443 4,688 3.3057 1 2 3 4 6 444 14,810 6.1409 2 3 5 8 11 445 16,827 4.3909 1 2 4 6 8 446 12,789 3.0593 1 2 3 4 6 453 1,255 13.0876 5 6 10 16 25 454 2,962 6.6357 3 4 5 8 12 455 2,482 3.7526 1 2 3 5 6 456 1,241 13.1475 5 7 10 16 24 457 3,086 6.8568 3 4 6 8 12 458 1,565 4.0505 2 3 4 5 7 459 4,695 8.6505 3 5 7 10 16 460 60,945 3.8373 2 2 3 5 6 461 947 7.2893 3 4 6 8 13 462 11,067 4.0499 3 3 3 4 6 463 6,113 14.7572 4 7 11 18 29 464 7,907 8.5108 3 4 7 10 16 465 2,708 5.2688 2 3 4 6 9 466 4,780 8.5090 3 4 7 10 15 467 19,097 4.8438 3 3 4 6 8 468 15,812 3.5808 2 3 3 4 5CMS-1498-P 1060

MS-DRG Number of Discharges Arithmetic Mean LOS 10th Percentile 25th Percentile 50th Percentile 75th Percentile 90th Percentile 469 35,893 7.4293 3 4 6 9 13 470 404,338 3.6454 2 3 3 4 5 471 2,991 9.2207 2 4 7 13 18 472 8,421 3.6774 1 1 2 5 8 473 25,112 1.8500 1 1 1 2 3 474 3,277 11.8758 4 6 9 15 22 475 3,428 7.3629 2 4 6 9 14 476 1,134 4.0908 1 2 3 5 8 477 3,256 10.7457 4 6 9 13 19 478 8,249 6.6555 1 3 6 9 12 479 5,867 3.3936 1 1 2 5 7 480 31,193 8.4968 4 5 7 10 15 481 74,874 5.4504 3 4 5 6 8 482 33,902 4.4797 3 3 4 5 7 483 10,324 3.7260 2 2 3 4 7 484 18,014 2.1959 1 1 2 3 3 485 1,261 10.5147 4 6 8 13 19 486 2,153 7.0060 3 4 6 8 12 487 1,058 5.0888 2 3 4 6 8 488 3,248 4.6918 2 3 3 5 8 489 4,902 2.8499 1 2 3 3 5 490 22,903 4.2505 1 2 3 5 9 491 45,224 2.0655 1 1 1 3 4 492 6,706 8.1353 3 4 7 10 15 493 18,839 4.8463 2 3 4 6 8 494 25,249 3.1465 1 2 3 4 5 495 1,890 9.9476 3 5 8 12 19 496 4,609 5.1833 1 2 4 7 10 497 5,130 2.5558 1 1 2 3 5 498 1,481 7.2552 2 3 6 9 14 499 876 2.9920 1 1 2 3 5 500 2,283 10.1783 3 5 8 13 20 501 4,635 5.7282 2 3 5 7 11 502 5,741 2.8021 1 1 2 3 5 503 1,174 8.4361 3 4 7 11 16 504 2,548 5.9863 2 3 5 8 11 505 2,256 3.1272 1 1 3 4 6 506 717 3.7992 1 1 3 5 8 507 940 4.5160 1 2 3 5 9 508 1,782 2.0561 1 1 2 3 3 509 349 3.4699 1 1 2 4 7 510 1,275 6.1569 2 3 5 8 11 511 4,095 3.8112 1 2 3 5 7 512 8,255 2.1474 1 1 2 3 4 513 1,248 4.8205 1 2 4 6 9 514 921 2.6406 1 1 2 3 5CMS-1498-P 1061

MS-DRG Number of Discharges Arithmetic Mean LOS 10th Percentile 25th Percentile 50th Percentile 75th Percentile 90th Percentile 515 4,912 9.3950 3 5 8 11 17 516 11,267 5.7698 2 3 5 7 10 517 11,169 3.3660 1 1 3 5 7 533 1,004 6.2490 2 3 5 8 12 534 3,277 3.8145 1 2 3 5 7 535 9,037 5.5860 2 3 4 7 10 536 31,028 3.6752 1 3 3 4 6 537 944 4.0911 2 3 3 5 7 538 708 3.0494 1 2 3 4 5 539 3,683 9.2359 3 5 7 11 16 540 3,800 6.6839 2 4 5 8 11 541 1,124 4.8488 1 2 4 6 8 542 7,101 7.9687 3 4 6 10 15 543 15,205 5.5178 2 3 4 7 10 544 6,624 4.0503 2 3 3 5 7 545 4,543 8.6212 2 4 6 11 18 546 5,210 5.0029 2 3 4 6 9 547 3,348 3.5358 1 2 3 4 6 548 728 8.6181 3 4 7 10 16 549 1,066 5.7645 2 3 5 7 10 550 556 4.0108 1 2 3 5 7 551 14,610 6.4630 2 3 5 8 12 552 73,510 3.8977 1 2 3 5 7 553 4,040 5.3376 2 3 4 6 9 554 15,436 3.4756 1 2 3 4 6 555 3,445 4.7660 1 2 4 6 9 556 16,663 3.1124 1 2 3 4 6 557 6,796 6.2217 2 3 5 7 11 558 14,146 4.1105 2 3 4 5 7 559 2,281 6.9833 2 3 5 9 14 560 4,922 4.5211 1 2 4 6 8 561 5,314 2.6314 1 1 2 3 5 562 7,806 5.6471 2 3 4 7 10 563 30,486 3.4819 1 2 3 4 6 564 2,149 6.4044 2 3 5 8 12 565 3,699 4.5250 1 3 4 6 8 566 1,759 3.4179 1 2 3 4 6 573 5,749 12.2113 4 6 9 14 23 574 9,057 8.3095 3 4 7 10 15 575 3,721 5.1774 2 3 4 7 9 576 780 12.9000 3 5 9 17 26 577 2,280 5.7974 1 2 4 7 12 578 2,530 3.2573 1 1 2 4 6 579 4,595 10.2448 3 5 8 13 19 580 10,731 5.0932 1 2 4 7 10 581 10,753 2.3869 1 1 2 3 5CMS-1498-P 1062

MS-DRG Number of Discharges Arithmetic Mean LOS 10th Percentile 25th Percentile 50th Percentile 75th Percentile 90th Percentile 582 4,901 2.6566 1 1 2 3 5 583 7,581 1.7392 1 1 1 2 3 584 862 4.9617 1 2 4 7 10 585 1,462 2.1382 1 1 1 3 4 592 4,964 7.9746 2 4 6 9 14 593 10,203 5.7727 2 3 5 7 10 594 1,483 4.6703 1 2 4 6 8 595 1,674 7.2832 2 4 6 9 14 596 4,415 4.4208 1 2 4 5 8 597 695 7.5007 2 3 6 9 13 598 1,384 5.2854 1 2 4 7 10 599 185 3.2757 1 1 3 4 5 600 1,034 4.9207 2 3 4 6 9 601 778 3.6157 1 2 3 5 6 602 33,771 6.4584 2 3 5 8 12 603 127,084 4.4100 2 3 4 5 8 604 3,668 4.9738 1 2 4 6 9 605 19,162 3.2558 1 2 3 4 6 606 2,247 5.6805 1 3 4 7 11 607 6,374 3.4934 1 2 3 4 6 614 1,706 6.5774 2 3 5 8 13 615 1,449 2.9717 1 2 3 4 5 616 1,678 15.5936 6 8 13 19 28 617 6,516 7.8996 3 4 7 10 14 618 148 5.1419 2 3 4 6 9 619 1,009 7.3310 1 2 4 8 15 620 2,993 3.1617 1 2 2 4 6 621 11,368 1.8438 1 1 2 2 3 622 1,232 12.1640 4 6 9 14 22 623 2,455 7.5825 3 4 6 9 13 624 236 4.8347 2 3 4 6 8 625 1,309 7.0963 1 2 5 9 15 626 2,852 2.8159 1 1 2 3 6 627 12,254 1.4115 1 1 1 1 2 628 3,718 10.5662 2 4 8 13 20 629 4,451 7.9232 3 4 7 10 14 630 446 4.4619 1 2 3 6 8 637 26,230 5.4669 2 3 4 7 10 638 46,738 3.9819 1 2 3 5 7 639 24,880 2.8062 1 1 2 3 5 640 79,621 4.7818 1 2 3 6 9 641 164,528 3.5115 1 2 3 4 6 642 1,603 4.7436 1 2 3 6 9 643 7,683 7.2309 2 4 6 9 13 644 11,845 5.0712 2 3 4 6 9 645 6,422 3.5668 1 2 3 4 6CMS-1498-P 1063

MS-DRG Number of Discharges Arithmetic Mean LOS 10th Percentile 25th Percentile 50th Percentile 75th Percentile 90th Percentile 652 10,211 7.5052 4 5 6 8 13 653 2,013 15.8987 6 8 13 20 29 654 3,404 9.0858 5 6 8 11 15 655 1,275 5.6549 2 4 6 7 9 656 4,888 9.4728 3 5 7 11 18 657 7,350 5.3278 2 3 5 6 9 658 6,807 3.3676 1 2 3 4 5 659 5,503 10.1098 3 4 8 13 20 660 7,095 5.6238 2 3 4 7 11 661 3,862 2.8933 1 2 2 4 5 662 1,015 10.2749 2 4 8 12 21 663 1,820 4.8462 1 2 3 6 10 664 3,282 1.8525 1 1 1 2 3 665 884 10.5271 3 5 9 13 20 666 1,878 5.9361 1 2 4 8 12 667 2,595 2.3680 1 1 2 3 4 668 5,500 7.7095 2 3 6 10 15 669 12,259 4.0007 1 2 3 5 8 670 8,764 2.2913 1 1 2 3 5 671 799 5.5920 1 2 4 7 11 672 635 2.2000 1 1 2 3 4 673 12,494 9.5253 1 3 7 12 20 674 8,802 6.5558 1 2 5 9 14 675 3,252 2.1125 1 1 1 2 5 682 102,211 6.7567 2 3 5 8 13 683 114,329 4.9315 2 3 4 6 9 684 26,729 3.3482 1 2 3 4 6 685 2,513 3.3979 1 1 2 4 7 686 1,940 7.0340 2 3 5 9 14 687 2,618 4.6902 1 2 4 6 8 688 706 2.8031 1 1 2 3 5 689 89,105 5.4897 2 3 4 7 10 690 185,262 3.9692 2 2 3 5 7 691 999 4.3053 1 2 3 5 9 692 380 2.2421 1 1 2 3 4 693 4,313 4.3438 1 2 3 6 8 694 15,245 2.3793 1 1 2 3 4 695 1,361 5.3475 1 3 4 7 10 696 9,992 3.1414 1 2 3 4 6 697 509 3.1100 1 1 2 4 6 698 32,063 6.3485 2 3 5 8 12 699 23,186 4.4403 1 2 4 6 8 700 8,115 3.2223 1 2 3 4 6 707 5,392 4.2381 1 2 3 5 8 708 16,899 1.8647 1 1 2 2 3 709 817 5.6793 1 1 3 7 13CMS-1498-P 1064

MS-DRG Number of Discharges Arithmetic Mean LOS 10th Percentile 25th Percentile 50th Percentile 75th Percentile 90th Percentile 710 1,504 1.6642 1 1 1 2 3 711 740 7.2986 1 3 5 9 15 712 424 2.6604 1 1 2 3 5 713 9,760 4.0614 1 2 3 5 9 714 22,626 1.8214 1 1 2 2 3 715 505 6.0554 1 2 4 8 13 716 685 1.3518 1 1 1 1 2 717 734 6.4074 1 3 5 8 13 718 446 2.6121 1 1 2 3 5 722 907 6.8655 2 3 5 8 13 723 1,505 4.8213 1 2 4 6 9 724 276 2.6957 1 1 2 3 5 725 1,368 4.8450 2 2 4 6 9 726 3,010 3.2664 1 2 3 4 6 727 2,292 6.0105 2 3 5 7 11 728 5,331 3.9081 1 2 3 5 7 729 838 4.6802 1 2 4 6 9 730 276 2.8442 1 1 2 3 5 734 1,520 6.9493 2 3 5 8 14 735 1,138 2.6951 1 1 2 4 5 736 1,046 13.6434 5 7 11 17 25 737 3,134 6.4467 3 4 6 8 11 738 712 3.5941 2 2 3 4 5 739 1,106 9.4313 3 4 7 11 19 740 4,261 4.5226 2 3 4 5 8 741 5,393 2.5524 1 1 2 3 4 742 10,807 4.1279 1 2 3 5 8 743 27,700 2.0692 1 1 2 3 3 744 1,625 5.5680 1 2 4 7 11 745 1,265 2.4403 1 1 2 3 5 746 2,621 4.1801 1 2 3 5 8 747 7,265 1.7794 1 1 1 2 3 748 17,103 1.6853 1 1 1 2 3 749 1,052 8.4753 2 4 7 11 16 750 362 2.7901 1 1 2 3 5 754 1,471 8.2998 2 4 6 11 16 755 2,959 5.0057 1 2 4 6 9 756 440 3.0750 1 1 2 4 6 757 1,772 7.5056 3 4 6 9 14 758 1,770 5.4650 2 3 5 7 10 759 978 4.0112 2 2 3 5 7 760 2,269 3.7532 1 2 3 5 7 761 1,138 2.2417 1 1 2 3 4 765 3,417 4.8674 2 3 4 5 7 766 2,757 3.0812 2 2 3 4 4 767 169 2.6864 2 2 2 3 4CMS-1498-P 1065

MS-DRG Number of Discharges Arithmetic Mean LOS 10th Percentile 25th Percentile 50th Percentile 75th Percentile 90th Percentile 768 8 6.7500 1 2 5 6 13 769 122 5.7459 1 2 4 7 13 770 177 2.0904 1 1 1 2 4 774 1,667 3.2190 2 2 2 3 4 775 5,860 2.3258 1 2 2 3 3 776 588 3.3248 1 2 2 4 6 777 198 2.0505 1 1 2 3 4 778 444 3.2050 1 1 2 3 6 779 121 2.1405 1 1 1 2 4 780 42 1.6190 1 1 1 1 2 781 3,387 3.8432 1 1 3 4 7 782 188 2.6117 1 1 2 3 5 793 3 3.6667 1 1 3 7 7 794 1 1.0000 1 1 1 1 1 799 582 13.2405 4 7 11 17 25 800 641 7.2246 2 4 6 9 14 801 357 3.9076 1 2 3 5 7 802 1,095 11.7826 3 5 8 13 21 803 1,004 6.0936 2 3 5 7 11 804 764 2.9686 1 1 2 4 6 808 9,279 8.0600 2 4 6 10 15 809 13,025 4.9646 2 3 4 6 9 810 2,170 3.7392 1 2 3 5 7 811 37,741 5.1436 1 2 4 6 10 812 91,512 3.5555 1 2 3 4 7 813 11,471 4.9750 1 2 4 6 10 814 2,052 6.6774 2 3 5 8 12 815 3,337 4.4489 1 2 4 5 8 816 1,532 3.2428 1 2 3 4 6 820 1,396 17.0659 5 8 13 22 33 821 1,934 7.0817 1 3 5 9 15 822 1,738 3.0984 1 1 2 4 6 823 2,425 14.9126 5 7 12 18 28 824 2,581 8.1395 2 4 7 11 16 825 1,442 3.9286 1 1 3 5 8 826 680 14.2985 5 7 11 18 27 827 1,420 6.6838 2 3 5 8 13 828 696 3.7586 1 2 3 5 7 829 1,398 9.3369 2 3 7 11 20 830 385 3.1247 1 1 2 4 6 834 4,288 15.1749 2 4 9 23 35 835 2,465 9.3513 2 3 5 10 25 836 1,201 4.4388 1 2 3 5 8 837 1,390 22.5914 5 8 22 31 42 838 1,431 12.2697 3 4 6 20 30 839 1,284 5.6830 2 4 5 5 7CMS-1498-P 1066

MS-DRG Number of Discharges Arithmetic Mean LOS 10th Percentile 25th Percentile 50th Percentile 75th Percentile 90th Percentile 840 9,929 10.0469 3 4 8 13 20 841 8,550 6.3908 2 3 5 8 12 842 3,644 4.1715 1 2 3 5 8 843 1,876 7.7953 2 4 6 10 14 844 2,566 5.4189 2 3 4 7 10 845 667 3.7676 1 2 3 5 7 846 3,055 7.8206 2 3 5 9 17 847 21,591 3.3495 1 2 3 4 6 848 1,107 2.9883 1 1 3 4 5 849 1,163 6.0404 2 3 5 6 11 853 42,325 15.3906 5 8 12 19 28 854 5,584 9.1653 3 5 8 11 16 855 337 5.3976 1 2 4 7 10 856 6,574 14.8006 4 7 11 18 28 857 9,165 7.5920 3 4 6 9 14 858 2,325 5.0533 2 3 4 6 9 862 10,485 7.6788 2 4 6 9 15 863 20,692 4.7970 2 3 4 6 8 864 18,172 3.7732 1 2 3 5 7 865 3,069 6.0336 2 3 4 7 12 866 6,641 3.3212 1 2 3 4 6 867 5,759 8.9976 2 4 7 11 18 868 2,409 5.1582 2 3 4 6 9 869 779 3.6393 1 2 3 4 6 870 25,752 15.1737 6 9 13 18 26 871 280,970 7.0555 2 3 6 9 13 872 75,906 5.1518 2 3 4 6 9 876 656 12.6799 2 4 8 14 29 880 8,144 3.0149 1 1 2 4 6 881 4,536 4.2377 1 2 3 5 8 882 1,797 4.2966 1 2 3 5 8 883 863 7.7034 1 3 5 8 15 884 18,110 5.3720 2 3 4 6 9 885 88,160 7.3601 2 3 6 9 13 886 525 6.1657 1 2 4 6 12 887 466 4.0494 1 2 3 5 7 894 4,520 2.9412 1 1 2 3 4 895 6,273 10.9396 3 4 6 8 9 896 8,621 6.1897 2 3 4 7 11 897 35,167 3.9315 1 2 3 4 6 901 1,074 13.7719 3 5 9 17 29 902 1,753 7.1843 2 3 5 8 14 903 1,027 4.4450 1 2 3 5 8 904 1,895 11.1135 2 4 7 13 23 905 763 4.5242 1 2 4 6 9 906 707 3.0905 1 1 2 3 6CMS-1498-P 1067

MS-DRG Number of Discharges Arithmetic Mean LOS 10th Percentile 25th Percentile 50th Percentile 75th Percentile 90th Percentile 907 9,288 11.0101 3 5 8 14 22 908 8,383 6.1103 2 3 5 8 12 909 4,760 3.3786 1 1 3 4 7 913 1,159 5.3572 1 2 4 6 10 914 5,171 3.1251 1 1 3 4 6 915 1,808 4.6858 1 2 3 6 9 916 5,255 2.0278 1 1 1 2 4 917 22,772 4.9226 1 2 4 6 10 918 33,100 2.6100 1 1 2 3 5 919 12,011 6.1429 2 3 4 7 12 920 14,002 4.1465 1 2 3 5 8 921 7,314 2.8138 1 1 2 3 5 922 1,467 5.0266 1 2 4 6 10 923 2,780 3.1299 1 1 2 4 5 927 188 28.2128 8 13 23 39 55 928 948 14.8597 3 7 12 20 29 929 366 7.6721 1 3 6 10 15 933 138 5.2319 1 1 1 5 12 934 608 5.8257 1 2 4 7 11 935 2,111 5.2321 1 2 3 6 10 939 816 9.8750 2 4 7 13 20 940 1,539 5.1313 1 2 3 7 11 941 1,455 2.5904 1 1 2 3 5 945 5,971 10.1921 4 6 8 11 15 946 2,809 7.4938 3 5 6 7 8 947 15,418 4.8159 1 2 4 6 9 948 52,323 3.3628 1 2 3 4 6 949 640 4.2969 1 1 2 4 7 950 276 2.7572 1 1 2 3 4 951 1,028 4.5360 1 1 2 3 6 955 443 12.6456 3 5 9 17 24 956 4,421 8.4180 4 5 7 10 15 957 1,516 14.0468 3 7 11 18 27 958 1,134 9.5273 3 5 8 12 16 959 200 5.5800 2 3 5 7 10 963 2,001 8.4983 1 3 7 11 18 964 2,672 5.4963 2 3 5 7 10 965 913 3.7558 1 2 3 5 7 969 638 17.0611 4 7 13 22 35 970 95 8.4526 1 3 7 12 17 974 6,029 9.3641 2 4 7 12 18 975 3,693 6.4075 2 3 5 8 12 976 1,529 4.4173 1 2 3 5 7 977 3,547 4.8765 1 2 4 6 9 981 28,575 13.8055 4 7 11 17 26 982 16,651 8.2634 2 4 7 11 15CMS-1498-P 1068

MS-DRG Number of Discharges Arithmetic Mean LOS 10th Percentile 25th Percentile 50th Percentile 75th Percentile 90th Percentile 983 4,894 4.2284 1 2 3 6 9 984 747 12.6051 4 7 11 16 22 985 814 8.4017 2 4 7 12 16 986 447 4.0559 1 1 2 6 9 987 9,573 11.8354 3 6 10 15 22 988 9,352 7.0079 2 3 6 9 14 989 3,950 3.5337 1 1 2 5 7 10,957,307CMS-1498-P 1069

TABLE 7B.—MEDICARE PROSPECTIV E PAYMENT SYSTEM SELECTED PERCENTILE LENGHTS OF STAY; FY 2009 MedPAR UPDATE – DECEMBER 2009 GROUPER V28.0 MS-DRGs

**MS DRG**  **Number of Discharges**  **Arithmetic Mean LOS**  **10th Percentile**  **25th Percentile**  **50th Percentile**  **75th Percentile**  **90th Percentile**  1 907 41.8412 12 19 33 53 82 2 333 22.7628 9 12 17 29 42 3 21,956 36.6115 15 21 30 44 63 4 21,395 27.1269 11 16 22 32 46 5 889 19.9944 6 9 14 25 43 6 408 9.2255 5 6 8 11 14 7 469 18.7058 8 11 15 23 31 8 509 11.7741 6 7 9 13 21 10 137 9.7007 5 7 8 11 13 11 1,466 15.5989 6 8 12 19 29 12 1,963 10.0942 4 6 8 13 17 13 1,008 6.7401 3 4 6 8 11 14 446 27.7489 7 19 25 34 50 15 1,372 19.2449 10 15 18 22 28 20 1,081 17.2026 6 10 16 23 29 21 469 13.9382 7 10 14 17 22 22 146 8.3767 2 4 8 12 14 23 4,406 11.7690 2 5 9 16 23 24 1,708 8.0878 1 3 7 11 16 25 11,582 11.5431 3 6 9 15 22 26 11,469 7.3239 2 4 6 9 14 27 12,591 3.8861 1 2 3 5 7 28 1,851 13.1059 4 6 11 16 25 29 3,505 6.5629 1 3 5 9 13 30 3,432 3.2797 1 1 3 4 7 31 1,169 12.2104 2 5 9 16 25 32 2,808 5.3711 1 2 4 7 12 33 3,351 2.6640 1 1 2 3 5 34 819 7.0195 1 2 6 10 15 35 2,336 3.2140 1 1 2 4 8 36 5,732 1.5223 1 1 1 1 3 37 4,944 8.3833 1 3 7 11 18 38 14,449 3.5553 1 1 2 5 8 39 43,823 1.6743 1 1 1 2 3 40 4,817 12.1704 3 6 9 15 23 41 7,552 6.6622 1 3 6 8 13 42 3,808 3.2261 1 1 2 4 7 52 1,250 6.6328 2 3 5 7 11 53 487 3.5832 1 2 3 5 6 54 7,208 6.2757 2 3 5 8 12CMS-1498-P 1070

**MS DRG**  **Number of Discharges**  **Arithmetic Mean LOS**  **10th Percentile**  **25th Percentile**  **50th Percentile**  **75th Percentile**  **90th Percentile** 
55 13,028 4.6122 1 2 3 6 9 56 9,289 7.1527 2 3 5 9 14 57 43,231 4.8535 2 3 4 6 8 58 893 7.2878 2 3 5 9 14 59 3,250 4.9237 2 3 4 6 8 60 3,515 3.7713 1 2 3 5 6 61 2,266 8.3530 2 4 7 11 16 62 3,739 5.6448 2 3 5 7 10 63 1,309 3.9152 2 2 3 5 7 64 60,945 6.9291 2 3 5 9 14 65 112,612 4.8351 2 3 4 6 9 66 66,535 3.2734 1 2 3 4 6 67 1,387 5.4737 2 3 4 7 10 68 10,376 3.3077 1 2 3 4 6 69 92,535 2.7913 1 2 2 3 5 70 9,646 7.3534 2 3 6 9 14 71 13,708 5.1401 2 3 4 6 9 72 4,838 3.1174 1 2 2 4 6 73 8,926 5.6255 2 3 4 7 11 74 31,568 4.0866 1 2 3 5 7 75 1,348 6.9733 2 4 5 8 13 76 661 3.9259 1 2 3 5 7 77 1,519 6.4352 2 3 5 8 12 78 2,122 4.3907 1 2 4 5 8 79 774 3.0749 1 2 3 4 5 80 1,625 4.9145 1 2 4 6 10 81 5,867 3.4137 1 2 3 4 6 82 2,372 6.0544 1 1 4 8 13 83 2,596 4.6541 1 2 4 6 9 84 2,542 2.7825 1 1 2 4 5 85 7,305 7.2197 2 3 6 9 14 86 14,311 4.6416 1 2 4 6 8 87 13,012 2.9085 1 1 2 4 5 88 870 5.5345 2 3 4 7 11 89 3,155 3.6960 1 2 3 5 7 90 2,481 2.3136 1 1 2 3 4 91 8,739 6.2049 1 3 4 7 13 92 19,751 4.2052 1 2 3 5 8 93 13,215 2.8862 1 1 2 4 5 94 1,426 11.8296 3 6 10 15 21 95 1,186 8.3727 3 5 7 11 15 96 540 5.6667 1 4 5 7 10 97 1,187 11.6352 4 6 9 15 22 98 1,065 7.8892 3 4 7 10 14 99 423 5.1915 2 3 4 7 10 100 19,259 5.9589 2 3 4 7 11CMS-1498-P 1071

**MS DRG**  **Number of Discharges**  **Arithmetic Mean LOS**  **10th Percentile**  **25th Percentile**  **50th Percentile**  **75th Percentile**  **90th Percentile**  101 56,054 3.4365 1 2 3 4 6 102 1,285 4.2716 1 2 3 5 9 103 12,526 3.0242 1 1 2 4 6 113 639 5.5994 1 2 4 7 11 114 431 2.5986 1 1 2 3 5 115 850 4.6082 1 2 4 5 7 116 455 4.4813 1 1 2 5 7 117 549 1.9872 1 1 1 1 2 121 744 5.1022 2 3 4 6 8 122 524 3.9790 1 2 3 5 7 123 2,672 2.7182 1 1 2 3 5 124 739 5.2612 1 2 4 6 11 125 4,274 3.3538 1 2 3 4 6 129 1,508 5.2454 1 2 4 7 11 130 943 2.8908 1 1 2 4 6 131 1,132 5.5998 1 2 4 7 11 132 748 2.7126 1 1 2 3 5 133 2,242 5.3965 1 2 4 7 11 134 2,627 2.0837 1 1 1 2 4 135 466 6.3112 1 2 5 9 13 136 351 2.2422 1 1 1 3 5 137 891 4.9989 1 2 4 6 10 138 747 2.4873 1 1 2 3 5 139 1,363 1.7601 1 1 1 2 3 146 734 9.0327 2 4 7 11 19 147 1,362 5.7379 1 2 4 7 11 148 552 3.3442 1 1 2 4 6 149 33,609 2.6159 1 1 2 3 5 150 1,162 4.9699 1 2 4 6 10 151 6,166 2.8774 1 1 2 4 5 152 2,298 4.2963 1 2 3 5 8 153 11,465 3.0804 1 2 3 4 5 154 2,458 5.7754 1 3 4 7 12 155 6,154 4.2238 1 2 3 5 8 156 3,515 2.8942 1 1 2 4 5 157 1,374 6.6798 2 3 5 8 14 158 3,709 4.3308 1 2 3 5 8 159 1,459 2.7347 1 1 2 3 5 163 13,439 14.0385 5 8 12 18 25 164 18,804 7.3844 3 4 6 9 13 165 10,518 4.3993 2 3 4 6 7 166 23,100 11.9825 4 6 10 15 22 167 19,782 7.3702 2 4 6 9 14 168 4,388 4.2985 1 2 3 6 8 175 14,080 6.8241 3 4 6 8 12 176 36,658 4.9333 2 3 5 6 8CMS-1498-P 1072

**MS DRG**  **Number of Discharges**  **Arithmetic Mean LOS**  **10th Percentile**  **25th Percentile**  **50th Percentile**  **75th Percentile**  **90th Percentile**  177 68,128 8.5605 3 5 7 11 16 178 71,807 6.7933 3 4 6 8 12 179 16,039 4.9675 2 3 4 6 9 180 20,637 7.4786 2 4 6 10 14 181 26,198 5.4244 1 3 4 7 10 182 2,840 3.6532 1 2 3 5 7 183 2,664 6.4842 2 3 5 8 12 184 5,184 4.3119 2 3 4 5 8 185 2,187 3.0393 1 2 3 4 5 186 10,686 6.7318 2 3 5 9 13 187 10,944 4.9400 1 2 4 6 9 188 3,293 3.5299 1 2 3 4 7 189 94,058 5.5455 2 3 4 7 10 190 136,856 5.5075 2 3 5 7 10 191 150,358 4.6481 2 3 4 6 8 192 134,412 3.6580 1 2 3 5 6 193 103,907 6.4847 2 4 5 8 12 194 207,054 4.9783 2 3 4 6 9 195 87,008 3.6926 1 2 3 5 6 196 6,959 6.9585 2 4 6 9 13 197 6,790 5.1077 2 3 4 6 9 198 3,047 3.7670 1 2 3 5 7 199 3,790 8.0317 2 4 6 10 15 200 8,675 4.7641 1 2 4 6 9 201 2,745 3.5457 1 2 3 5 7 202 38,888 4.1342 1 2 3 5 7 203 28,980 3.1588 1 2 3 4 6 204 23,390 2.7325 1 1 2 3 5 205 6,677 5.3037 1 2 4 7 10 206 19,984 3.2516 1 2 3 4 6 207 36,288 14.7898 6 9 13 18 25 208 74,965 7.0337 1 3 6 9 14 215 177 12.6215 1 3 8 14 28 216 9,532 17.0712 8 11 15 21 29 217 6,915 10.9643 6 7 10 13 18 218 1,222 7.9869 5 6 7 9 12 219 12,766 13.1024 5 7 11 16 24 220 16,882 7.9647 4 6 7 9 13 221 4,475 5.9678 4 5 6 7 9 222 2,754 11.8500 4 6 10 15 22 223 3,843 6.1897 1 2 5 8 12 224 2,738 9.7064 3 5 8 12 18 225 4,489 5.2947 2 3 5 7 10 226 7,266 7.7703 1 2 6 11 16 227 30,144 3.1103 1 1 1 4 7 228 2,305 14.2430 6 8 12 18 25CMS-1498-P 1073

**MS DRG**  **Number of Discharges**  **Arithmetic Mean LOS**  **10th Percentile**  **25th Percentile**  **50th Percentile**  **75th Percentile**  **90th Percentile**  229 2,849 8.3155 4 5 7 10 14 230 806 5.5186 2 4 5 7 9 231 1,351 12.9067 6 8 11 16 22 232 1,220 9.4139 5 7 9 11 14 233 15,293 13.7411 7 9 12 16 23 234 27,437 8.8794 5 6 8 11 13 235 9,468 10.8477 5 6 9 13 19 236 25,502 6.5346 4 5 6 8 10 237 22,101 10.1669 2 4 8 13 20 238 40,058 4.1976 1 1 3 6 9 239 10,869 14.3506 5 7 11 18 27 240 10,791 9.6381 3 5 8 12 18 241 1,552 5.9852 2 3 5 8 11 242 17,882 8.0936 2 4 6 10 15 243 41,262 4.9405 1 2 4 6 9 244 44,828 2.8119 1 1 2 4 6 245 3,970 3.8071 1 1 2 5 8 246 30,909 5.0086 1 2 4 6 10 247 143,976 2.2759 1 1 2 3 4 248 14,361 6.0490 1 3 5 8 12 249 46,400 2.7896 1 1 2 3 5 250 7,652 6.9611 2 3 5 9 14 251 36,441 2.9462 1 1 2 4 6 252 40,567 7.8947 1 3 6 10 17 253 44,596 6.0032 1 2 5 8 12 254 38,370 2.6631 1 1 2 3 6 255 2,483 9.2114 2 4 7 12 17 256 3,196 7.0219 2 4 6 9 13 257 394 4.3046 1 2 4 6 8 258 763 6.9685 2 3 5 9 13 259 5,053 3.1486 1 1 2 4 6 260 1,770 10.7571 2 5 8 14 22 261 3,900 4.4926 1 2 3 6 9 262 2,423 2.5815 1 1 2 3 5 263 518 5.6602 1 2 3 7 13 264 22,461 8.2590 1 3 6 11 17 265 1,714 3.3495 1 1 2 4 7 280 70,000 6.6250 2 3 5 8 12 281 53,393 4.4435 1 2 4 6 8 282 34,890 2.7555 1 1 2 4 5 283 12,651 5.1395 1 1 3 7 12 284 4,030 3.0310 1 1 2 4 7 285 1,428 1.7983 1 1 1 2 3 286 25,188 6.4764 2 3 5 8 13 287 134,754 3.2176 1 1 2 4 6 288 2,679 10.8634 4 6 9 13 19CMS-1498-P 1074

**MS DRG**  **Number of Discharges**  **Arithmetic Mean LOS**  **10th Percentile**  **25th Percentile**  **50th Percentile**  **75th Percentile**  **90th Percentile**  289 1,198 7.8005 3 5 7 10 13 290 240 5.5792 1 3 5 7 10 291 176,332 6.1577 2 3 5 8 12 292 248,245 4.8614 2 3 4 6 9 293 118,010 3.3080 1 2 3 4 6 294 1,546 5.3668 2 3 5 7 9 295 874 4.0378 1 2 4 5 7 296 1,921 2.7673 1 1 1 3 6 297 767 1.7523 1 1 1 2 3 298 372 1.2097 1 1 1 1 1 299 21,223 6.0532 2 3 5 7 11 300 48,418 4.8697 2 3 4 6 8 301 28,789 3.4713 1 2 3 5 6 302 7,760 3.9586 1 2 3 5 7 303 52,496 2.4440 1 1 2 3 4 304 2,867 4.5438 1 2 3 6 8 305 33,338 2.7473 1 1 2 3 5 306 3,079 5.9328 2 3 4 7 11 307 6,031 3.4107 1 2 3 4 6 308 56,626 5.1614 2 3 4 6 10 309 107,708 3.7205 1 2 3 5 7 310 127,913 2.5033 1 1 2 3 4 311 15,715 2.2386 1 1 2 3 4 312 165,015 2.9422 1 1 2 4 5 313 169,337 2.0617 1 1 2 2 4 314 61,174 6.8924 2 3 5 9 13 315 31,589 4.2192 1 2 3 5 8 316 10,674 2.5722 1 1 2 3 5 326 11,327 16.2594 5 8 13 20 30 327 10,431 8.8336 2 5 7 11 16 328 8,538 3.7853 1 2 3 5 8 329 46,072 15.4141 6 8 13 19 28 330 60,328 9.1253 4 6 8 11 16 331 24,253 5.3159 3 4 5 6 8 332 1,602 14.2085 6 8 12 18 26 333 5,291 8.1227 4 5 7 10 14 334 3,027 4.9045 2 3 5 6 8 335 7,054 13.7044 5 8 12 17 24 336 13,575 8.7634 3 5 8 11 15 337 7,648 5.0911 1 3 4 7 9 338 1,283 10.0405 4 6 8 13 17 339 2,988 6.5505 3 4 6 8 11 340 3,036 3.7286 1 2 3 5 6 341 907 6.6185 2 3 5 9 13 342 2,903 3.8081 1 2 3 5 7 343 6,461 2.0108 1 1 2 2 4CMS-1498-P 1075

**MS DRG**  **Number of Discharges**  **Arithmetic Mean LOS**  **10th Percentile**  **25th Percentile**  **50th Percentile**  **75th Percentile**  **90th Percentile**  344 914 11.1838 4 6 9 14 21 345 3,052 6.9797 3 4 6 8 12 346 2,591 4.6299 2 3 4 6 7 347 1,478 8.7794 2 4 6 11 17 348 4,255 5.3598 2 3 4 7 10 349 4,039 2.9153 1 1 2 4 6 350 1,676 7.7739 2 3 6 10 15 351 4,535 4.5275 1 2 4 6 9 352 6,456 2.3748 1 1 2 3 4 353 3,228 8.4365 2 4 7 11 16 354 9,556 5.0383 2 3 4 6 9 355 12,947 2.7752 1 1 2 4 5 356 7,895 12.6730 3 6 10 16 24 357 7,605 7.4191 2 4 6 9 14 358 2,045 4.0088 1 2 3 5 8 368 3,305 6.6865 2 3 5 8 12 369 5,626 4.4604 2 3 4 5 8 370 1,777 3.0833 1 2 3 4 5 371 22,536 8.8666 3 4 7 11 17 372 34,690 6.4592 2 4 5 8 12 373 11,202 4.5867 2 3 4 6 8 374 8,074 8.4488 2 4 7 11 16 375 17,166 5.7567 2 3 4 7 11 376 2,537 3.5861 1 2 3 4 6 377 48,282 6.4252 2 3 5 8 12 378 138,562 4.1977 2 2 4 5 7 379 50,778 3.0378 1 2 3 4 5 380 2,927 7.5364 2 4 6 9 14 381 6,196 4.7816 2 3 4 6 9 382 2,708 3.4830 1 2 3 4 6 383 1,131 5.2856 2 3 4 6 9 384 7,401 3.6259 1 2 3 4 6 385 2,207 8.3715 2 4 6 10 16 386 9,041 5.2677 2 3 4 7 10 387 4,132 3.9131 1 2 3 5 7 388 18,652 7.2489 2 3 6 9 14 389 54,853 4.7808 2 3 4 6 9 390 39,806 3.3390 1 2 3 4 6 391 45,147 5.1526 1 2 4 6 10 392 248,773 3.4414 1 2 3 4 6 393 21,581 6.8656 2 3 5 8 14 394 49,062 4.6703 1 2 4 6 9 395 20,065 3.0842 1 2 3 4 6 405 4,357 15.8947 5 8 12 20 31 406 5,111 8.3620 2 5 7 10 15 407 1,927 5.1520 1 3 5 7 8CMS-1498-P 1076

**MS DRG**  **Number of Discharges**  **Arithmetic Mean LOS**  **10th Percentile**  **25th Percentile**  **50th Percentile**  **75th Percentile**  **90th Percentile**  408 1,493 13.4662 5 7 11 17 24 409 1,446 8.8983 4 5 8 11 16 410 475 5.8400 2 4 5 7 10 411 782 11.7852 5 7 10 14 21 412 838 8.2625 3 5 7 10 14 413 524 5.4027 2 3 5 7 9 414 4,700 11.3732 4 6 9 14 20 415 5,782 7.3200 3 4 6 9 12 416 3,992 4.3790 2 3 4 5 7 417 17,753 7.8448 3 4 6 10 15 418 27,491 5.3511 2 3 5 7 10 419 28,245 3.0297 1 1 2 4 6 420 712 13.1110 3 6 10 17 27 421 908 6.9868 2 3 5 9 14 422 234 4.1068 1 2 3 5 8 423 1,487 14.3658 4 7 11 18 28 424 802 9.1421 3 5 7 11 17 425 86 5.6860 2 3 4 7 10 432 12,413 6.5409 2 3 5 8 13 433 8,085 4.5713 1 2 4 6 8 434 398 3.1734 1 2 3 4 6 435 12,205 7.3902 2 3 6 9 14 436 12,595 5.4640 2 3 4 7 10 437 2,182 3.6856 1 2 3 5 7 438 14,979 7.4713 2 3 5 9 15 439 27,901 4.9703 2 3 4 6 9 440 20,560 3.4957 1 2 3 4 6 441 14,431 7.1160 2 3 5 9 14 442 18,612 4.7711 2 2 4 6 9 443 4,688 3.3057 1 2 3 4 6 444 12,611 6.2323 2 3 5 8 12 445 19,026 4.5326 1 2 4 6 8 446 12,789 3.0593 1 2 3 4 6 453 1,133 13.4704 5 7 10 17 26 454 3,084 6.7503 3 4 5 8 13 455 2,482 3.7526 1 2 3 5 6 456 1,130 13.4611 5 7 10 17 25 457 3,197 6.9643 3 4 6 8 12 458 1,565 4.0505 2 3 4 5 7 459 3,823 9.0876 4 5 7 11 17 460 61,817 3.8782 2 3 3 5 6 461 638 8.3103 3 4 7 9 15 462 11,376 4.0806 3 3 3 4 6 463 5,302 15.1032 4 7 11 18 30 464 8,718 8.8815 3 4 7 11 17 465 2,708 5.2688 2 3 4 6 9CMS-1498-P 1077

**MS DRG**  **Number of Discharges**  **Arithmetic Mean LOS**  **10th Percentile**  **25th Percentile**  **50th Percentile**  **75th Percentile**  **90th Percentile**  466 3,705 8.9744 3 5 7 11 16 467 20,172 4.9536 3 3 4 6 8 468 15,812 3.5808 2 3 3 4 5 469 27,090 7.9945 3 5 7 9 14 470 413,141 3.6890 2 3 3 4 5 471 2,812 9.2649 2 4 7 13 18 472 8,600 3.7783 1 1 2 5 8 473 25,112 1.8500 1 1 1 2 3 474 2,922 11.9521 4 6 9 15 22 475 3,783 7.7275 3 4 6 10 14 476 1,134 4.0908 1 2 3 5 8 477 2,596 11.0882 4 6 9 14 20 478 8,909 6.8587 2 3 6 9 13 479 5,867 3.3936 1 1 2 5 7 480 24,275 9.0228 4 5 7 11 16 481 81,792 5.5520 3 4 5 6 8 482 33,902 4.4797 3 3 4 5 7 483 10,324 3.7260 2 2 3 4 7 484 18,014 2.1959 1 1 2 3 3 485 1,023 10.9101 4 6 9 13 19 486 2,391 7.1861 3 4 6 8 12 487 1,058 5.0888 2 3 4 6 8 488 3,248 4.6918 2 3 3 5 8 489 4,902 2.8499 1 2 3 3 5 490 22,903 4.2505 1 2 3 5 9 491 45,224 2.0655 1 1 1 3 4 492 5,167 8.5982 3 5 7 11 16 493 20,378 4.9773 2 3 4 6 9 494 25,249 3.1465 1 2 3 4 5 495 1,614 10.1691 3 5 8 13 19 496 4,885 5.3793 1 3 4 7 10 497 5,130 2.5558 1 1 2 3 5 498 1,481 7.2552 2 3 6 9 14 499 876 2.9920 1 1 2 3 5 500 1,850 10.4573 3 5 8 13 21 501 5,068 6.0065 2 3 5 8 11 502 5,741 2.8021 1 1 2 3 5 503 914 8.4344 2 4 7 11 16 504 2,808 6.2137 2 3 5 8 11 505 2,256 3.1272 1 1 3 4 6 506 717 3.7992 1 1 3 5 8 507 940 4.5160 1 2 3 5 9 508 1,782 2.0561 1 1 2 3 3 509 349 3.4699 1 1 2 4 7 510 1,058 6.2968 2 3 5 8 12 511 4,312 3.8949 1 2 3 5 7CMS-1498-P 1078

**MS DRG**  **Number of Discharges**  **Arithmetic Mean LOS**  **10th Percentile**  **25th Percentile**  **50th Percentile**  **75th Percentile**  **90th Percentile**  512 8,255 2.1474 1 1 2 3 4 513 1,248 4.8205 1 2 4 6 9 514 921 2.6406 1 1 2 3 5 515 3,952 9.8641 3 5 8 12 18 516 12,227 5.9028 2 3 5 8 11 517 11,169 3.3660 1 1 3 5 7 533 818 6.4792 2 3 5 8 12 534 3,463 3.8908 1 2 3 5 7 535 7,263 5.7939 2 3 4 7 11 536 32,802 3.7325 1 3 3 4 6 537 944 4.0911 2 3 3 5 7 538 708 3.0494 1 2 3 4 5 539 3,238 9.4632 3 5 7 11 17 540 4,245 6.7781 2 4 5 8 11 541 1,124 4.8488 1 2 4 6 8 542 5,511 8.3028 3 4 6 10 16 543 16,795 5.6402 2 3 5 7 10 544 6,624 4.0503 2 3 3 5 7 545 3,605 9.0019 2 4 6 11 18 546 6,148 5.3317 2 3 4 7 10 547 3,348 3.5358 1 2 3 4 6 548 579 8.7323 3 4 7 11 17 549 1,215 6.0601 2 3 5 7 11 550 556 4.0108 1 2 3 5 7 551 10,908 6.7836 2 3 5 8 13 552 77,212 3.9754 1 2 3 5 7 553 2,162 5.6300 2 3 4 7 10 554 17,314 3.6410 1 2 3 4 6 555 2,593 4.8481 1 2 4 6 9 556 17,515 3.1807 1 2 3 4 6 557 3,723 6.8571 2 4 5 8 12 558 17,219 4.3499 2 3 4 5 7 559 1,902 7.1420 2 3 5 9 14 560 5,301 4.6403 1 2 4 6 8 561 5,314 2.6314 1 1 2 3 5 562 5,861 5.8555 2 3 5 7 11 563 32,431 3.5741 1 2 3 4 6 564 1,779 6.5509 2 3 5 8 13 565 4,069 4.6319 1 3 4 6 8 566 1,759 3.4179 1 2 3 4 6 573 4,789 12.5780 4 6 9 15 24 574 10,017 8.5081 3 4 7 10 15 575 3,721 5.1774 2 3 4 7 9 576 646 13.0294 3 5 9 17 26 577 2,414 6.1570 1 2 4 8 13 578 2,530 3.2573 1 1 2 4 6CMS-1498-P 1079

**MS DRG**  **Number of Discharges**  **Arithmetic Mean LOS**  **10th Percentile**  **25th Percentile**  **50th Percentile**  **75th Percentile**  **90th Percentile**  579 3,778 10.4611 3 5 8 13 20 580 11,548 5.3869 1 2 4 7 11 581 10,753 2.3869 1 1 2 3 5 582 4,901 2.6566 1 1 2 3 5 583 7,581 1.7392 1 1 1 2 3 584 862 4.9617 1 2 4 7 10 585 1,462 2.1382 1 1 1 3 4 592 3,956 8.2786 2 4 6 10 15 593 11,211 5.8634 2 3 5 7 10 594 1,483 4.6703 1 2 4 6 8 595 1,117 7.8809 2 4 6 10 15 596 4,972 4.6072 1 2 4 6 8 597 559 7.5277 2 3 6 9 14 598 1,520 5.4737 1 3 4 7 10 599 185 3.2757 1 1 3 4 5 600 1,034 4.9207 2 3 4 6 9 601 778 3.6157 1 2 3 5 6 602 22,955 6.6712 2 3 5 8 12 603 137,900 4.5353 2 3 4 6 8 604 2,660 5.1549 1 2 4 6 10 605 20,170 3.3178 1 2 3 4 6 606 1,532 6.0091 1 2 4 7 12 607 7,089 3.6430 1 2 3 4 7 614 1,566 6.5447 2 3 5 8 13 615 1,351 2.9704 1 2 3 4 5 616 1,632 15.6746 6 8 13 19 28 617 6,562 7.9334 3 4 7 10 14 618 148 5.1419 2 3 4 6 9 619 840 7.7405 1 2 4 8 17 620 3,287 3.3998 1 2 3 4 6 621 11,451 1.8512 1 1 2 2 3 622 1,161 12.4358 4 6 9 15 23 623 2,541 7.6025 3 4 6 9 13 624 251 4.7649 2 3 4 6 8 625 1,200 6.9017 1 2 5 8 15 626 2,961 3.0523 1 1 2 3 7 627 12,254 1.4115 1 1 1 1 2 628 3,451 10.6140 2 4 8 14 21 629 4,718 8.0377 3 4 7 10 14 630 446 4.4619 1 2 3 6 8 637 18,691 5.9589 2 3 4 7 11 638 54,277 4.0187 1 2 3 5 7 639 24,880 2.8062 1 1 2 3 5 640 56,552 5.0713 1 2 4 6 10 641 187,597 3.5804 1 2 3 4 6 642 1,603 4.7436 1 2 3 6 9CMS-1498-P 1080

**MS DRG**  **Number of Discharges**  **Arithmetic Mean LOS**  **10th Percentile**  **25th Percentile**  **50th Percentile**  **75th Percentile**  **90th Percentile**  643 5,944 7.6445 3 4 6 9 14 644 13,584 5.1667 2 3 4 7 9 645 6,422 3.5668 1 2 3 4 6 652 10,210 7.5053 4 5 6 8 13 653 1,695 16.6053 7 9 14 21 30 654 3,722 9.3461 5 6 8 11 15 655 1,275 5.6549 2 4 6 7 9 656 3,223 10.0583 3 5 8 12 20 657 9,015 5.8840 2 3 5 7 10 658 6,807 3.3676 1 2 3 4 5 659 4,058 10.8544 3 5 8 14 21 660 8,540 6.0290 2 3 5 8 12 661 3,862 2.8933 1 2 2 4 5 662 794 10.8363 2 4 8 13 22 663 2,041 5.2156 1 2 4 7 11 664 3,282 1.8525 1 1 1 2 3 665 571 11.3345 3 6 10 14 21 666 2,191 6.3816 1 2 5 9 13 667 2,595 2.3680 1 1 2 3 4 668 3,076 8.9451 2 4 7 12 18 669 14,683 4.3541 1 2 3 6 9 670 8,764 2.2913 1 1 2 3 5 671 799 5.5920 1 2 4 7 11 672 635 2.2000 1 1 2 3 4 673 11,751 9.5646 1 3 7 12 20 674 9,545 6.7385 1 2 5 9 14 675 3,252 2.1125 1 1 1 2 5 682 99,106 6.8064 2 3 5 9 13 683 117,434 4.9378 2 3 4 6 9 684 26,729 3.3482 1 2 3 4 6 685 2,513 3.3979 1 1 2 4 7 686 1,144 7.7736 2 4 6 10 15 687 3,414 4.9889 1 2 4 6 9 688 706 2.8031 1 1 2 3 5 689 60,772 5.7814 2 3 5 7 10 690 213,595 4.0879 2 2 3 5 7 691 999 4.3053 1 2 3 5 9 692 380 2.2421 1 1 2 3 4 693 1,779 5.1793 1 2 4 7 10 694 17,779 2.5757 1 1 2 3 5 695 1,094 5.6307 2 3 4 7 11 696 10,259 3.1686 1 2 3 4 6 697 509 3.1100 1 1 2 4 6 698 23,432 6.7565 2 3 5 8 13 699 31,817 4.6574 1 2 4 6 8 700 8,115 3.2223 1 2 3 4 6CMS-1498-P 1081

**MS DRG**  **Number of Discharges**  **Arithmetic Mean LOS**  **10th Percentile**  **25th Percentile**  **50th Percentile**  **75th Percentile**  **90th Percentile**  707 5,392 4.2381 1 2 3 5 8 708 16,899 1.8647 1 1 2 2 3 709 817 5.6793 1 1 3 7 13 710 1,504 1.6642 1 1 1 2 3 711 740 7.2986 1 3 5 9 15 712 424 2.6604 1 1 2 3 5 713 9,760 4.0614 1 2 3 5 9 714 22,626 1.8214 1 1 2 2 3 715 505 6.0554 1 2 4 8 13 716 685 1.3518 1 1 1 1 2 717 734 6.4074 1 3 5 8 13 718 446 2.6121 1 1 2 3 5 722 477 7.7191 2 3 6 10 15 723 1,935 5.0651 1 2 4 6 9 724 276 2.6957 1 1 2 3 5 725 469 6.0874 2 3 4 8 11 726 3,909 3.4804 1 2 3 4 6 727 1,530 6.3399 2 3 5 8 11 728 6,093 4.0883 1 2 3 5 7 729 838 4.6802 1 2 4 6 9 730 276 2.8442 1 1 2 3 5 734 1,520 6.9493 2 3 5 8 14 735 1,138 2.6951 1 1 2 4 5 736 903 13.9989 5 8 11 17 25 737 3,277 6.6628 3 4 6 8 11 738 712 3.5941 2 2 3 4 5 739 905 9.8663 3 5 7 12 20 740 4,462 4.6555 2 3 4 5 8 741 5,393 2.5524 1 1 2 3 4 742 10,807 4.1279 1 2 3 5 8 743 27,700 2.0692 1 1 2 3 3 744 1,625 5.5680 1 2 4 7 11 745 1,265 2.4403 1 1 2 3 5 746 2,621 4.1801 1 2 3 5 8 747 7,265 1.7794 1 1 1 2 3 748 17,103 1.6853 1 1 1 2 3 749 1,052 8.4753 2 4 7 11 16 750 362 2.7901 1 1 2 3 5 754 1,024 8.7656 2 4 7 11 17 755 3,406 5.2980 1 2 4 7 10 756 440 3.0750 1 1 2 4 6 757 1,322 7.7526 3 4 6 9 14 758 2,220 5.7315 2 3 5 7 10 759 978 4.0112 2 2 3 5 7 760 2,269 3.7532 1 2 3 5 7 761 1,138 2.2417 1 1 2 3 4CMS-1498-P 1082

**MS DRG**  **Number of Discharges**  **Arithmetic Mean LOS**  **10th Percentile**  **25th Percentile**  **50th Percentile**  **75th Percentile**  **90th Percentile**  765 3,417 4.8674 2 3 4 5 7 766 2,757 3.0812 2 2 3 4 4 767 169 2.6864 2 2 2 3 4 768 8 6.7500 1 2 5 6 13 769 122 5.7459 1 2 4 7 13 770 177 2.0904 1 1 1 2 4 774 1,667 3.2190 2 2 2 3 4 775 5,860 2.3258 1 2 2 3 3 776 588 3.3248 1 2 2 4 6
777 198 2.0505 1 1 2 3 4 778 444 3.2050 1 1 2 3 6 779 121 2.1405 1 1 1 2 4 780 42 1.6190 1 1 1 1 2 781 3,387 3.8432 1 1 3 4 7 782 188 2.6117 1 1 2 3 5 793 3 3.6667 1 1 3 7 7 794 1 1.0000 1 1 1 1 1 799 537 13.3762 4 7 11 17 25 800 686 7.5131 2 4 6 9 15 801 357 3.9076 1 2 3 5 7 802 936 12.1891 3 5 9 14 22 803 1,163 6.5443 2 3 5 8 13 804 764 2.9686 1 1 2 4 6 808 7,983 8.2525 3 4 6 10 16 809 14,321 5.1374 2 3 4 6 9 810 2,170 3.7392 1 2 3 5 7 811 29,074 5.2696 1 2 4 6 10 812 100,179 3.6564 1 2 3 5 7 813 11,471 4.9750 1 2 4 6 10 814 1,597 6.9080 2 3 5 8 13 815 3,792 4.6192 1 2 4 6 8 816 1,532 3.2428 1 2 3 4 6 820 1,269 17.4704 5 8 14 22 34 821 2,061 7.4478 2 3 6 10 15 822 1,738 3.0984 1 1 2 4 6 823 1,872 15.9583 5 8 12 20 30 824 3,134 8.7100 2 4 7 12 17 825 1,442 3.9286 1 1 3 5 8 826 602 14.7741 5 7 11 18 27 827 1,498 6.8892 2 3 6 8 13 828 696 3.7586 1 2 3 5 7 829 1,398 9.3369 2 3 7 11 20 830 385 3.1247 1 1 2 4 6 834 3,703 16.1674 2 5 11 24 37 835 3,050 9.2633 2 3 5 10 25 836 1,201 4.4388 1 2 3 5 8CMS-1498-P 1083

**MS DRG**  **Number of Discharges**  **Arithmetic Mean LOS**  **10th Percentile**  **25th Percentile**  **50th Percentile**  **75th Percentile**  **90th Percentile**  837 1,268 23.5733 5 9 23 32 43 838 1,553 12.2788 3 4 6 20 30 839 1,284 5.6830 2 4 5 5 7 840 7,561 10.6359 3 5 8 14 21 841 10,918 6.7759 2 3 5 8 13 842 3,644 4.1715 1 2 3 5 8 843 1,480 8.0122 2 4 6 10 15 844 2,962 5.6283 2 3 4 7 11 845 667 3.7676 1 2 3 5 7 846 2,614 7.9591 2 3 5 9 18 847 22,032 3.4226 1 2 3 4 6 848 1,107 2.9883 1 1 3 4 5 849 1,163 6.0404 2 3 5 6 11 853 39,169 15.7007 5 8 13 19 29 854 8,740 10.0237 4 6 8 12 18 855 337 5.3976 1 2 4 7 10 856 5,929 15.0469 4 7 11 18 29 857 9,810 7.9171 3 4 6 9 15 858 2,325 5.0533 2 3 4 6 9 862 9,500 7.7561 2 4 6 9 15 863 21,677 4.8940 2 3 4 6 8 864 18,172 3.7732 1 2 3 5 7 865 2,269 6.4293 2 3 4 8 13 866 7,441 3.4921 1 2 3 4 6 867 5,314 9.1929 2 4 7 11 18 868 2,854 5.3931 2 3 4 7 10 869 779 3.6393 1 2 3 4 6 870 25,752 15.1737 6 9 13 18 26 871 246,509 7.1936 2 3 6 9 14 872 110,367 5.4377 2 3 5 7 10 876 656 12.6799 2 4 8 14 29 880 8,144 3.0149 1 1 2 4 6 881 4,536 4.2377 1 2 3 5 8 882 1,797 4.2966 1 2 3 5 8 883 863 7.7034 1 3 5 8 15 884 18,110 5.3720 2 3 4 6 9 885 88,160 7.3601 2 3 6 9 13 886 525 6.1657 1 2 4 6 12 887 466 4.0494 1 2 3 5 7 894 4,520 2.9412 1 1 2 3 4 895 6,273 10.9396 3 4 6 8 9 896 6,925 6.5217 2 3 5 8 12 897 36,863 3.9730 1 2 3 4 6 901 937 14.1206 3 5 9 17 30 902 1,890 7.4889 2 3 6 9 14 903 1,027 4.4450 1 2 3 5 8CMS-1498-P 1084

**MS DRG**  **Number of Discharges**  **Arithmetic Mean LOS**  **10th Percentile**  **25th Percentile**  **50th Percentile**  **75th Percentile**  **90th Percentile**  904 1,895 11.1135 2 4 7 13 23 905 763 4.5242 1 2 4 6 9 906 707 3.0905 1 1 2 3 6 907 8,654 11.1347 2 5 8 14 22 908 9,017 6.3353 2 3 5 8 12 909 4,760 3.3786 1 1 3 4 7 913 872 5.6239 1 3 4 6 11 914 5,458 3.1999 1 2 3 4 6 915 1,429 5.0539 1 2 4 6 10 916 5,634 2.1132 1 1 2 3 4 917 19,117 5.1092 1 2 4 6 10 918 36,755 2.7429 1 1 2 3 5 919 10,767 6.2020 2 3 4 8 12 920 15,246 4.2676 1 2 3 5 8 921 7,314 2.8138 1 1 2 3 5 922 1,046 5.4312 1 2 4 7 10 923 3,201 3.2471 1 1 2 4 6 927 188 28.2128 8 13 23 39 55 928 948 14.8597 3 7 12 20 29 929 366 7.6721 1 3 6 10 15 933 138 5.2319 1 1 1 5 12 934 608 5.8257 1 2 4 7 11 935 2,111 5.2321 1 2 3 6 10 939 718 9.9624 2 4 7 13 21 940 1,637 5.3769 1 2 4 7 12 941 1,455 2.5904 1 1 2 3 5 945 5,971 10.1921 4 6 8 11 15 946 2,809 7.4938 3 5 6 7 8 947 12,298 4.9270 1 2 4 6 9 948 55,443 3.4200 1 2 3 4 6 949 640 4.2969 1 1 2 4 7 950 276 2.7572 1 1 2 3 4 951 1,028 4.5360 1 1 2 3 6 955 443 12.6456 3 5 9 17 24 956 4,421 8.4180 4 5 7 10 15 957 1,436 14.2806 3 7 12 19 27 958 1,214 9.5486 3 5 8 12 16 959 200 5.5800 2 3 5 7 10 963 1,769 8.6733 1 3 7 12 18 964 2,904 5.6295 2 3 5 7 10 965 913 3.7558 1 2 3 5 7 969 631 17.1236 4 7 13 22 35 970 102 8.6569 1 4 7 12 17 974 5,213 9.6277 2 4 7 12 19 975 4,509 6.6378 2 3 5 8 12 976 1,529 4.4173 1 2 3 5 7CMS-1498-P 1085

**MS DRG**  **Number of Discharges**  **Arithmetic Mean LOS**  **10th Percentile**  **25th Percentile**  **50th Percentile**  **75th Percentile**  **90th Percentile**  977 3,547 4.8765 1 2 4 6 9 981 25,561 14.1288 4 7 11 18 26 982 19,665 8.6927 3 4 7 11 16 983 4,894 4.2284 1 2 3 6 9 984 505 13.2911 4 7 12 17 24 985 1,056 9.0369 2 4 8 12 17 986 447 4.0559 1 1 2 6 9 987 7,986 12.1990 3 6 10 15 23 988 10,939 7.4428 2 3 6 10 14 989 3,950 3.5337 1 1 2 5 7 10,957,307CMS-1498-P 1086

TABLE 8A.—PROPOSED STATEWIDE AVERAGE OPERATING COST-TO-CHARGE RATIOS (CCRs) FOR ACUTE CARE HOSPITALS—MARCH 2010

State Urban Rural Alabama 0.247 0.318 Alaska 0.342 0.654 Arizona 0.27 0.357 Arkansas 0.313 0.328 California 0.218 0.277 Colorado 0.279 0.413 Connecticut 0.39 0.517 Delaware 0.483 0.447 District of Columbia* 0.325

---- Florida 0.222 0.251 Georgia 0.311 0.374 Hawaii 0.375 0.48 Idaho 0.454 0.546 Illinois 0.293 0.363 Indiana 0.37 0.429 Iowa 0.338 0.418 Kansas 0.28 0.408 Kentucky 0.368 0.353 Louisiana 0.295 0.334 Maine 0.487 0.478 Maryland 0.719 0.767 Massachusetts 0.468 0.963 Michigan 0.371 0.441 Minnesota 0.383 0.509 Mississippi 0.285 0.336 Missouri 0.317 0.34 Montana 0.401 0.461 Nebraska 0.334 0.44 Nevada 0.202 0.432 New Hampshire 0.422 0.42 New Jersey* 0.175

---- New Mexico 0.341 0.357 New York 0.344 0.51 North Carolina 0.374 0.38 North Dakota 0.445 0.343 Ohio 0.317 0.486 Oklahoma 0.294 0.366CMS-1498-P 1087

State Urban Rural Oregon 0.432 0.397 Pennsylvania 0.254 0.409 Puerto Rico* 0.489

---- Rhode Island* 0.373

---- South Carolina 0.274 0.303 South Dakota 0.322 0.398 Tennessee 0.282 0.346 Texas 0.245 0.328 Utah 0.396 0.586 Vermont 0.558 0.632 Virginia 0.341 0.346 Washington 0.343 0.445 West Virginia 0.438 0.465 Wisconsin 0.391 0.441 Wyoming 0.393 0.523 *All counties in the State or Territory are classified as urban.CMS-1498-P 1088

TABLE 8B.—PROPOSED STATEWIDE AVERAGE CAPITAL COST-TO-CHARGE RATIOS (CCRs) FOR ACUTE CARE HOSPITALS—MARCH 2010

State Ratio Alabama 0.024 Alaska 0.039 Arizona 0.027 Arkansas 0.024 California 0.015 Colorado 0.029 Connecticut 0.026 Delaware 0.035 District of Columbia 0.018 Florida 0.022 Georgia 0.027 Hawaii 0.029 Idaho 0.038 Illinois 0.025 Indiana 0.037 Iowa 0.028 Kansas 0.03 Kentucky 0.03 Louisiana 0.025 Maine 0.03 Maryland 0.059 Massachusetts 0.033 Michigan 0.031 Minnesota 0.031 Mississippi 0.026 Missouri 0.028 Montana 0.034 Nebraska 0.034 Nevada 0.023 New Hampshire 0.034 New Jersey 0.013 New Mexico 0.034 New York 0.026 North Carolina 0.032 North Dakota 0.029 Ohio 0.028 Oklahoma 0.025 Oregon 0.037CMS-1498-P 1089

State Ratio Pennsylvania 0.021 Puerto Rico 0.041 Rhode Island 0.02 South Carolina 0.026 South Dakota 0.027 Tennessee 0.025 Texas 0.025 Utah 0.037 Vermont 0.045 Virginia 0.033 Washington 0.028 West Virginia 0.031 Wisconsin 0.038 Wyoming 0.04CMS-1498-P 1090

TABLE 8C.—PROPOSED STATEWIDE AVERAGE TOTAL COST-TO-CHARGE RATIOS (CCRs) FOR LTCHs—DECEMBER 2009

State Urban Rural Alabama 0.268 0.347 Alaska 0.373 0.745 Arizona 0.296 0.389 Arkansas 0.334 0.357 California 0.232 0.298 Colorado 0.306 0.46 Connecticut 0.41 0.566 Delaware 0.517 0.483 District of Columbia* 0.343

---- Florida 0.243 0.308 Georgia 0.335 0.409 Hawaii 0.399 0.511 Idaho 0.491 0.585 Illinois 0.317 0.392 Indiana 0.404 0.48 Iowa 0.364 0.462 Kansas 0.307 0.446 Kentucky 0.397 0.386 Louisiana 0.32 0.362 Maine 0.519 0.505 Maryland** 0.327 0.42 Massachusetts 0.498 1.06 Michigan 0.402 0.478 Minnesota 0.412 0.554 Mississippi 0.312 0.364 Missouri 0.341 0.373 Montana 0.431 0.503 Nebraska 0.367 0.479 Nevada 0.224 0.503 New Hampshire 0.456 0.449 New Jersey* 0.189

---- New Mexico 0.375 0.393 New York 0.368 0.544 North Carolina 0.405 0.408 North Dakota 0.459 0.371 Ohio 0.344 0.528 Oklahoma 0.303 0.396 Oregon 0.458 0.433 Pennsylvania 0.273 0.443CMS-1498-P 1091

State Urban Rural Puerto Rico* 0.531

---- Rhode Island* 0.393

---- South Carolina 0.3 0.325 South Dakota 0.346 0.431 Tennessee 0.305 0.382 Texas 0.267 0.372 Utah 0.435 0.637 Vermont 0.608 0.67 Virginia 0.373 0.378 Washington 0.374 0.476 West Virginia 0.462 0.5 Wisconsin 0.42 0.481 Wyoming 0.429 0.568
* All counties in the State or Territory are classified as urban. However, no short-term acute care IPPS hospitals or LTCHs are located in those areas as of July 2010.

** National average IPPS total CCRs, as discussed in section V.C.2. of this Addendum.CMS-1498-P 1092

TABLE 9A.—HOSPITAL RECLASSIFICATIONS AND REDESIGNATIONS--FY 2011

Provider Number Geographic CBSA Reclassified CBSA LUGAR 010001 20020 10500 010005 01 13820 010009 19460 26620 010022 01 12060 010025 01 17980 010029 12220 17980 010035 01 13820 010046 23460 13820 010052 01 33860 010054 19460 26620 010055 20020 37460 010059 19460 26620 010061 01 16860 010065 01 13820 010083 01 33660 010085 19460 26620 010100 01 37860 010101 01 13820 010102 01 33860 010118 01 46220 010126 01 33860 010143 01 26620 010158 01 19460 010164 01 13820 020008 02 11260 030033 03 38060 030069 29420 40140 030101 29420 29820 040014 04 30780 040017 04 26 040027 04 44180 040039 04 26 040041 04 30780 040069 04 26 040071 38220 30780 040076 04 26300 LUGAR 040080 04 27860CMS-1498-P 1093

Provider Number Geographic CBSA Reclassified CBSA LUGAR 040085 04 32820 040088 04 33740 040119 04 30780 050002 36084 41940 050006 05 39820 050009 34900 42220 050013 34900 42220 050014 05 40900 050022 40140 42044 050038 41940 42100 050042 05 39820 050043 36084 41940 050046 37100 31084 050054 40140 42044 050069 42044 31084 050071 41940 42100 050073 46700 36084 050075 36084 41940 050082 37100 31084 050084 44700 40900 050089 40140 31084 050090 42220 36084 050095 36084 41940 050099 40140 31084 050101 46700 36084 050102 40140 42044 050118 44700 33700 050125 41940 42100 050129 40140 31084 050131 41884 36084 050136 42220 36084 050140 40140 31084 050150 05 40900 050152 41884 36084 050153 41940 42100 050159 37100 31084 050168 42044 31084 050173 42044 31084 050174 42220 36084CMS-1498-P 1094

Provider Number Geographic CBSA Reclassified CBSA LUGAR 050188 41940 42100 050193 42044 31084 050195 36084 41940 050197 41884 41940 050211 36084 41940 050224 42044 31084 050226 42044 31084 050230 42044 31084 050236 37100 31084 050243 40140 42044 050245 40140 31084 050264 36084 41940 050272 40140 31084 050279 40140 31084 050283 36084 41940 050291 42220 36084 050292 40140 42044 050300 40140 31084 050305 36084 41940 050308 41940 42100 050320 36084 41940 050327 40140 31084 050329 40140 42044 050334 41500 41940 050335 05 33700 050348 42044 31084 050360 41884 36084 050366 05 40900 050367 46700 36084 050380 41940 42100 050385 42220 36084 050390 40140 42044 050394 37100 31084 050423 40140 42044 050426 42044 31084 050441 41940 42100 050488 36084 41940 050510 41884 36084 050512 36084 41940CMS-1498-P 1095

Provider Number Geographic CBSA Reclassified CBSA LUGAR 050517 40140 31084 050526 42044 31084 050534 40140 42044 050541 41884 41940 050543 42044 31084 050547 42220 36084 050548 42044 31084 050549 37100 31084 050551 42044 31084 050567 42044 31084 050570 42044 31084 050573 40140 42044 050580 42044 31084 050586 40140 31084 050589 42044 31084 050603 42044 31084 050604 41940 42100 050609 42044 31084 050616 37100 31084 050662 41940 42100 050667 34900 46700 050668 41884 36084 050678 42044 31084 050680 46700 36084 050684 40140 42044 050686 40140 42044 050688 41940 42100 050690 42220 36084 050693 42044 31084 050694 40140 42044 050701 40140 42044 050709 40140 31084 050720 42044 31084 050744 42044 31084 050745 42044 31084 050746 42044 31084 050747 42044 31084 050748 44700 33700 050749 37100 31084CMS-1498-P 1096

Provider Number Geographic CBSA Reclassified CBSA LUGAR 050758 40140 31084 060001 24540 19740 060003 14500 19740 060023 24300 19740 060027 14500 19740 060031 17820 19740 060049 06 22660 060075 06 24300 060096 06 19740 060103 14500 19740 060116 14500 19740 060118 06 19740 060121 24540 19740 070001 35300 35004 070003 07 25540 LUGAR 070005 35300 35004 070006 14860 35644 070010 14860 35644 070011 07 25540 LUGAR 070015 07 35644 070016 35300 35004 070017 35300 35004 070018 14860 35644 070019 35300 35004 070021 07 25540 LUGAR 070022 35300 35004 070028 14860 35644 070031 35300 35004 070033 14860 35644 070034 14860 35644 070036 25540 35300 070038 35300 35004 070039 35300 35004 080004 20100 48864 080006 08 20100 080007 08 36140 090004 47894 13644 100002 48424 22744 100014 19660 36740CMS-1498-P 1097

Provider Number Geographic CBSA Reclassified CBSA LUGAR 100017 19660 36740 100022 33124 22744 100023 10 45300 100024 10 33124 100045 19660 36740 100047 39460 35840 100049 10 29460 100068 19660 36740 100072 19660 36740 100077 39460 35840 100080 48424 22744 100081 10 18880 LUGAR 100105 42680 38940 100109 10 36740 100130 48424 22744 100139 10 23540 LUGAR 100150 10 33124 100157 29460 45300 100160 10 33124 100168 48424 22744 100176 48424 22744 100217 42680 38940 100232 10 23540 100234 48424 22744 100236 39460 35840 100249 10 45300 100252 10 38940 100253 48424 22744 100258 48424 22744 100268 48424 22744 100269 48424 22744 100275 48424 22744 100287 48424 22744 100288 48424 22744 100290 10 36740 100292 10 18880 LUGAR 110001 19140 16860 110002 11 31420 110016 11 17980CMS-1498-P 1098

Provider Number Geographic CBSA Reclassified CBSA LUGAR 110023 11 12060 110029 23580 12060 110038 11 46660 110040 11 12060 LUGAR 110041 11 12060 110054 40660 12060 110069 47580 31420 110075 11 42340 110095 11 10500 110105 11 10500 110112 11 10500 110122 46660 45220 110125 11 31420 110146 11 15260 110150 11 31420 110153 47580 31420 110168 40660 12060 110187 11 12060 LUGAR 110189 11 12060 110190 11 47580 130002 13 14260 130003 30300 28420 130049 17660 44060 130067 13 26820 LUGAR 140008 16974 29404 140010 16974 29404 140012 14 16974 140015 14 41180 140018 16974 29404 140032 14 41180 140034 14 41180 140040 14 37900 140043 14 19340 140046 14 41180 140048 16974 29404 140049 16974 29404 140051 16974 29404 140054 16974 29404 140058 14 44100CMS-1498-P 1099

Provider Number Geographic CBSA Reclassified CBSA LUGAR 140062 16974 29404 140063 16974 29404 140064 14 37900 140065 16974 29404 140068 16974 29404 140075 16974 29404 140080 16974 29404 140082 16974 29404 140083 16974 29404 140088 16974 29404 140094 16974 29404 140095 16974 29404 140103 16974 29404 140110 14 16974 140114 16974 29404 140115 16974 29404 140116 16974 29404 140117 16974 29404 140118 16974 29404 140119 16974 29404 140124 16974 29404 140133 16974 29404 140135 19500 16580 140150 16974 29404 140151 16974 29404 140155 28100 16974 140158 16974 29404 140160 14 40420 140161 14 16974 140164 14 16020 140166 19500 16580 140172 16974 29404 140176 16974 29404 140177 16974 29404 140179 16974 29404 140180 16974 29404 140181 16974 29404 140182 16974 29404 140186 28100 16974CMS-1498-P 1100

Provider Number Geographic CBSA Reclassified CBSA LUGAR 140191 16974 29404 140197 16974 29404 140206 16974 29404 140207 16974 29404 140208 16974 29404 140223 16974 29404 140224 16974 29404 140240 16974 29404 140250 16974 29404 140251 16974 29404 140252 16974 29404 140258 16974 29404 140276 16974 29404 140281 16974 29404 140290 16974 29404 140300 16974 29404 140301 16974 29404 140303 16974 29404 150002 23844 16974 150004 23844 16974 150006 33140 43780 150008 23844 16974 150011 15 26900 150015 33140 23844 150018 21140 43780 150023 45460 26900 150030 15 26900 LUGAR 150034 23844 16974 150042 15 45460 150048 15 17140 150051 14020 26900 150064 15 26900 150065 15 26900 150069 15 17140 150076 15 43780 150088 11300 26900 150089 34620 11300 150090 23844 16974 150091 15 23060CMS-1498-P 1101

Provider Number Geographic CBSA Reclassified CBSA LUGAR 150102 15 23844 LUGAR 150112 18020 26900 150113 11300 26900 150125 23844 16974 150126 23844 16974 150133 15 43780 150146 15 21140 150165 23844 16974 150166 23844 16974 150170 23844 16974 160001 16 19780 160016 16 11180 160057 16 26980 160064 16 24 160080 16 19340 160147 16 11180 170006 17 27900 170013 17 28 170020 17 48620 170033 17 48620 170058 17 28140 170068 17 11100 170142 31740 45820 170175 17 48620 180002 18 49 180011 18 30460 180012 21060 31140 180013 14540 34980 180017 18 14540 180020 18 49 180024 18 21060 180027 18 17300 180029 18 30460 180043 18 44 180044 18 26580 180048 18 31140 180050 18 28700 180069 18 26580 180078 18 26580CMS-1498-P 1102

Provider Number Geographic CBSA Reclassified CBSA LUGAR 180080 18 28940 180102 18 16020 180104 18 16020 180116 18 16020 180124 14540 34980 180127 18 17140 180132 18 30460 190003 19 29180 190015 19 35380 190017 19 29180 190086 19 33740 190106 19 10780 190144 19 43340 190164 19 45 190167 19 29180 190190 19 33740 190218 19 43340 190257 19 33740 200002 20 38860 200020 38860 40484 200024 30340 38860 200034 30340 38860 200039 20 38860 200050 20 12620 220001 49340 14484 220002 15764 14484 220008 39300 14484 220010 37764 14484 220011 15764 14484 220019 49340 14484 220020 39300 14484 220025 49340 14484 220029 37764 14484 220033 37764 14484 220035 37764 14484 220049 15764 14484 220058 49340 14484 220062 49340 14484 220063 15764 14484CMS-1498-P 1103

Provider Number Geographic CBSA Reclassified CBSA LUGAR 220070 15764 14484 220073 39300 14484 220074 39300 14484 220077 44140 25540 220080 37764 14484 220082 15764 14484 220084 15764 14484 220090 49340 14484 220095 49340 14484 220098 15764 14484 220101 15764 14484 220105 15764 14484 220163 49340 14484 220171 15764 14484 220174 37764 14484 220175 15764 14484 220176 49340 14484 230002 19804 11460 230003 26100 34740 230013 47644 22420 230019 47644 22420 230020 19804 11460 230021 35660 28020 230022 23 12980 230024 19804 11460 230029 47644 22420 230030 23 40980 230035 23 24340 LUGAR 230036 23 13020 230037 23 11460 230038 24340 34740 230047 47644 19804 230053 19804 11460 230054 23 24580 230059 24340 34740 230069 47644 11460 230071 47644 22420 230072 26100 34740 230077 40980 22420CMS-1498-P 1104

Provider Number Geographic CBSA Reclassified CBSA LUGAR 230089 19804 11460 230095 23 13020 230096 23 28020 230097 23 24340 230099 33780 11460 230104 19804 11460 230105 23 24340 230106 24340 34740 230121 23 29620 LUGAR 230130 47644 22420 230135 19804 11460 230142 19804 11460 230146 19804 11460 230151 47644 22420 230165 19804 11460 230174 26100 34740 230176 19804 11460 230195 47644 19804 230204 47644 19804 230207 47644 22420 230208 23 24340 LUGAR 230222 23 13020 230227 47644 19804 230236 24340 34740 230244 19804 11460 230254 47644 22420 230257 47644 19804 230264 47644 19804 230269 47644 22420 230270 19804 11460 230273 19804 11460 230277 47644 22420 230279 47644 11460 230297 19804 11460 230301 47644 22420 230302 47644 22420 230B04 47644 22420 230B95 19804 11460

. 240036 41060 33460CMS-1498-P 1105

Provider Number Geographic CBSA Reclassified CBSA LUGAR 240069 24 33460 240071 24 33460 240187 24 33460 250002 25 22520 250004 25 32820 250006 25 32820 250009 25 27180 250023 25 25060 LUGAR 250031 25 27140 250034 25 32820 250040 37700 25060 250042 25 32820 250069 25 46220 250078 25620 25060 250079 25 27140 250081 25 46220 250082 25 38220 250094 25620 25060 250095 25 27140 250097 25 12940 250099 25 27140 250100 25 46220 250104 25 46220 250117 25 25060 LUGAR 260009 26 27620 260017 26 27620 260022 26 17860 260025 26 41180 260074 26 17860 260094 26 44180 260113 26 14 260116 26 14 260119 26 16020 260175 26 28140 260186 26 27620 270003 27 24500 270012 24500 33540 270017 27 33540 270051 27 33540CMS-1498-P 1106

Provider Number Geographic CBSA Reclassified CBSA LUGAR 280009 28 30700 280023 28 30700 280065 28 24540 280077 28 30700 280125 28 43580 290002 29 16180 LUGAR 290006 29 39900 290019 16180 39900 300011 31700 15764 300012 31700 15764 300017 40484 37764 300019 30 44140 300020 31700 15764 300029 40484 37764 300034 31700 15764 310002 35084 35644 310009 35084 35644 310014 15804 37964 310015 35084 35644 310017 35084 35644 310018 35084 35644 310022 15804 37964 310029 15804 37964 310031 15804 20764 310038 20764 35644 310039 20764 35644 310048 20764 35084 310050 35084 35644 310054 35084 35644 310070 20764 35644 310076 35084 35644 310081 15804 37964 310083 35084 35644 310086 15804 37964 310093 35084 35644 310096 35084 35644 310108 20764 35644 310119 35084 35644 320003 32 42140CMS-1498-P 1107

Provider Number Geographic CBSA Reclassified CBSA LUGAR 320005 22140 10740 320006 32 10740 320013 32 42140 320014 32 29740 320033 32 42140 LUGAR 320063 32 36220 330008 33 15380 LUGAR 330023 39100 35644 330027 35004 35644 330073 33 40380 LUGAR 330079 33 47 330090 21300 27060 330094 33 38340 330106 35004 35644 330126 39100 35644 330136 33 10580 330157 33 45060 330167 35004 35644 330181 35004 35644 330182 35004 35644 330191 24020 10580 330198 35004 35644 330213 33 46540 330224 28740 39100 330225 35004 35644 330229 33 21500 330239 33 21500 330250 33 15540 330259 35004 35644 330277 33 27060 330331 35004 35644 330332 35004 35644 330372 35004 35644 330386 33 35084 340004 24660 49180 340008 34 26580 340013 34 16740 340015 34 16740 340021 34 16740CMS-1498-P 1108

Provider Number Geographic CBSA Reclassified CBSA LUGAR 340023 11700 24860 340027 34 24780 340037 34 16740 340039 34 49180 340050 34 22180 340051 34 25860 340068 34 34820 340069 39580 20500 340070 15500 24660 340071 34 39580 LUGAR 340073 39580 20500 340085 34 24660 LUGAR 340091 24660 49180 340096 34 24660 LUGAR 340109 34 47260 340114 39580 20500 340115 34 20500 340126 34 39580 340127 34 20500 LUGAR 340129 34 16740 340131 34 24780 340138 39580 20500 340144 34 16740 340145 34 16740 LUGAR 340147 40580 39580 340173 39580 20500 350006 35 13900 360010 36 15940 360011 36 18140 360013 36 30620 360014 36 18140 360019 10420 17460 360020 10420 17460 360025 41780 45780 360027 10420 17460 360036 36 31900 360054 36 26580 360055 49660 17460 360065 36 17460CMS-1498-P 1109

Provider Number Geographic CBSA Reclassified CBSA LUGAR 360078 10420 17460 360086 44220 19380 360095 36 45780 360109 36 18140 360112 45780 33780 360121 36 45780 360133 19380 17140 360150 10420 17460 360159 36 18140 360175 36 18140 360185 36 49660 LUGAR 360187 44220 19380 360211 44600 38300 360241 10420 17460 360245 36 17460 LUGAR 370004 37 27900 370006 37 46140 370014 37 43300 370015 37 46140 370016 37 36420 370018 37 46140 370019 37 45 370020 37 36420 370022 37 30020 370025 37 46140 370026 37 36420 370030 37 46140 370047 37 36420 370099 37 36420 370113 37 22220 380001 38 38900 380022 38 18700 LUGAR 380027 38 21660 380047 13460 21660 380050 38 32780 380051 41420 38900 380090 38 21660 390006 39 25420 390013 39 25420CMS-1498-P 1110

Provider Number Geographic CBSA Reclassified CBSA LUGAR 390016 39 38300 390030 39 39740 LUGAR 390031 39 39740 LUGAR 390046 49620 29540 390048 39 25420 390065 39 13644 390066 30140 25420 390067 25420 29540 390071 39 48700 LUGAR 390079 39 13780 390086 39 38300 390091 39 49660 390093 39 49660 390110 27780 38300 390113 39 21500 390133 10900 37964 390138 39 25420 390151 39 13644 390162 10900 35084 390185 42540 10900 390313 39 39740 LUGAR 410001 39300 14484 410004 39300 14484 410005 39300 14484 410007 39300 14484 410010 39300 14484 410011 39300 14484 410012 39300 14484 410013 39300 35980 420007 43900 24860 420009 42 24860 LUGAR 420020 42 16700 420027 11340 24860 420030 42 16700 420036 42 17900 420039 42 43900 LUGAR 420067 42 42340 420068 42 12260 420069 42 44940 LUGARCMS-1498-P 1111

Provider Number Geographic CBSA Reclassified CBSA LUGAR 420070 44940 17900 420071 42 24860 420080 42 42340 420083 43900 24860 420085 34820 48900 420101 42 42340 430012 43 43620 440002 27180 32820 440018 27740 28700 440025 44 34 440035 17300 34980 440056 34100 28940 440058 44 26620 440059 44 34980 440067 34100 28700 440068 44 16860 440073 44 34980 440144 44 34980 440151 44 34980 440174 44 32820 440185 17420 16860 440192 44 34980 450007 45 41700 450032 45 30980 LUGAR 450039 23104 19124 450064 23104 19124 450080 45 19124 450087 23104 19124 450092 45 29700 450099 45 11100 450135 23104 19124 450137 23104 19124 450144 45 33260 450147 47020 18580 450148 23104 19124 450178 45 36220 450187 45 26420 450211 45 30980 450214 45 26420CMS-1498-P 1112

Provider Number Geographic CBSA Reclassified CBSA LUGAR 450224 45 46340 450283 45 19124 LUGAR 450324 43300 19124 450347 45 26420 450351 45 23104 450370 45 26420 450389 45 19124 LUGAR 450400 45 17780 450419 23104 19124 450438 45 26420 450447 45 19124 450465 45 26420 450469 43300 19124 450484 45 30980 450508 45 30980 450547 45 19124 450563 23104 19124 450565 45 23104 450596 45 23104 450604 45 41700 450639 23104 19124 450656 45 30980 450672 23104 19124 450675 23104 19124 450677 23104 19124 450747 45 46340 450770 45 12420 LUGAR 450779 23104 19124 450872 23104 19124 450880 23104 19124 450886 23104 19124 460004 36260 41620 460005 36260 41620 460007 46 41100 460026 46 39340 460039 46 36260 460041 36260 41620 460042 36260 41620 470001 47 15540CMS-1498-P 1113

Provider Number Geographic CBSA Reclassified CBSA LUGAR 470012 47 38340 490004 25500 16820 490005 49020 47894 490013 49 20500 490018 49 16820 490019 49 16820 490042 13980 40220 490043 47894 13644 490063 47894 13644 490066 47260 40060 490079 49 49180 490101 47894 13644 490107 47894 13644 490122 47894 13644 500003 34580 42644 500007 34580 42644 500016 48300 42644 500021 45104 42644 500031 50 36500 500039 14740 42644 500041 31020 38900 500072 50 14740 500079 45104 42644 500108 45104 42644 500129 45104 42644 510002 51 40220 510006 51 34060 510018 51 16620 LUGAR 510046 51 49 510047 51 34060 510050 48540 38300 510062 51 16620 510070 51 16620 510071 51 13980 510077 51 26580 520002 52 48140 520013 20740 33460 520021 29404 16974 520028 52 31540 LUGARCMS-1498-P 1114

Provider Number Geographic CBSA Reclassified CBSA LUGAR 520037 52 48140 520059 39540 33340 520071 52 33340 LUGAR 520076 52 33340 520095 52 31540 520096 39540 33340 520102 52 33340 LUGAR 520107 52 22540 520113 52 24580 520116 52 33340 LUGAR 520189 29404 16974 530014 16940 24540CMS-1498-P 1115

TABLE 9C.--HOSPITALS REDESIGNATED AS RURAL UNDER SECTION 1886(d)(8)(E ) OF THE ACT--FY 2011

Provider No. Geographic CBSA Redesignated Rural Area 040118 27860 04 050192 23420 05 050528 32900 05 050618 40140 05 070004 07 07 100048 37860 10 100118 37380 10 100134 27260 10 140167 14 14 170074 31740 17 170137 29940 17 180016 31140 18 180038 36980 18 220051 38340 22 230078 35660 23 250017 25 25 260006 41140 26 260034 28140 26 260047 27620 26 260195 44180 26 300023 40484 33 330215 46540 33 330235 33 33 330268 10580 33 340010 24140 34 340121 48900 34 360125 36 36 370054 36420 37 380040 13460 38 390130 27780 39 390183 39 39 390233 49620 39 450052 45 45 450078 10180 45 450243 10180 45 450348 45 45 490116 13980 49CMS-1498-P 1116

Provider No. Geographic CBSA Redesignated Rural Area 500148 48300 50CMS-1498-P 1117

TABLE 10.— GEOMETRIC MEAN PLUS THE LESSER OF .75 OF THE NATIONAL ADJUSTED OPERATING STANDARDIZED PA YMENT AMOUNT (INCREASED TO REFLECT THE DIFFERENCE BETWEEN CO STS AND CHARGES) OR .75 OF ONE STANDARD DEVIATION OF MEAN CHAR GES BY MEDICARE SEVERITY DIAGNOSIS-RELATED GROUP (MS-DRG)—MARCH 2010 1

MS-DRG Number of Cases Threshold 1 907 $434,245 2 333 $240,232 3 21,932 $280,834 4 21,377 $171,837 5 889 $181,631 6 408 $106,603 7 469 $180,685 8 508 $111,800 10 137 $87,191 11 1,465 $84,611 12 1,963 $62,285 13 1,008 $44,014 14 446 $173,221 15 1,371 $110,828 20 1,081 $161,767 21 468 $124,259 22 146 $85,874 23 4,406 $96,764 24 1,708 $70,333 25 11,578 $86,631 26 11,464 $61,699 27 12,575 $49,489 28 1,850 $90,885 29 3,505 $55,101 30 3,432 $35,818 31 1,169 $69,659 32 2,808 $42,884 33 3,346 $35,451 34 818 $71,961 35 2,329 $51,071 36 5,711 $43,574 37 4,943 $62,277 38 14,446 $39,441 39 43,741 $29,380 40 4,815 $69,423 41 7,549 $46,033CMS-1498-P 1118

MS-DRG Number of Cases Threshold 42 3,807 $39,316 52 1,250 $35,010 53 487 $24,212 54 7,203 $33,761 55 13,021 $29,356 56 9,282 $33,807 57 43,183 $23,053 58 893 $33,327 59 3,245 $26,683 60 3,512 $20,846 61 2,265 $63,317 62 3,736 $49,373 63 1,306 $43,140 64 60,920 $39,190 65 112,506 $31,542 66 66,435 $23,769 67 1,387 $35,073 68 10,359 $26,739 69 92,456 $21,784 70 9,641 $38,473 71 13,705 $29,897 72 4,836 $21,740 73 8,924 $30,863 74 31,535 $24,268 75 1,345 $38,691 76 660 $26,901 77 1,517 $38,495 78 2,120 $29,153 79 773 $21,987 80 1,625 $29,586 81 5,863 $20,738 82 2,372 $40,097 83 2,594 $32,688 84 2,540 $25,202 85 7,305 $40,772 86 14,305 $30,370 87 13,004 $21,699 88 870 $35,610 89 3,155 $27,526 90 2,481 $20,786 91 8,734 $34,747 92 19,740 $25,249CMS-1498-P 1119

MS-DRG Number of Cases Threshold 93 13,201 $19,449 94 1,426 $65,792 95 1,185 $49,565 96 540 $42,502 97 1,186 $61,456 98 1,063 $42,348 99 422 $33,115 100 19,251 $33,637 101 56,024 $21,484 102 1,284 $27,641 103 12,514 $20,151 113 639 $40,406 114 431 $26,196 115 849 $31,885 116 455 $31,888 117 549 $21,050 121 744 $23,633 122 523 $15,971 123 2,670 $21,955 124 738 $28,841 125 4,273 $18,988 129 1,508 $48,976 130 939 $34,737 131 1,132 $46,345 132 745 $33,424 133 2,242 $36,924 134 2,622 $24,387 135 466 $42,963 136 351 $28,285 137 890 $31,653 138 746 $22,447 139 1,361 $25,472 146 734 $41,764 147 1,362 $29,480 148 552 $23,055 149 33,589 $18,807 150 1,162 $29,226 151 6,159 $16,053 152 2,298 $25,939 153 11,461 $17,571 154 2,458 $32,534 155 6,150 $25,001CMS-1498-P 1120

MS-DRG Number of Cases Threshold 156 3,513 $17,470 157 1,374 $33,896 158 3,705 $24,494 159 1,458 $16,289 163 13,429 $92,474 164 18,789 $56,614 165 10,516 $43,737 166 23,092 $68,109 167 19,774 $46,238 168 4,387 $34,990 175 14,073 $38,408 176 36,633 $29,043 177 68,096 $42,241 178 71,786 $34,277 179 16,033 $25,958 180 20,621 $38,793 181 26,178 $31,187 182 2,834 $23,827 183 2,662 $35,329 184 5,183 $26,627 185 2,185 $18,859 186 10,686 $35,963 187 10,940 $29,659 188 3,291 $21,555 189 94,000 $32,121 190 136,797 $30,807 191 150,301 $26,417 192 134,340 $19,737 193 103,862 $34,826 194 206,953 $27,354 195 86,964 $19,374 196 6,956 $36,218 197 6,785 $29,750 198 3,045 $22,571 199 3,790 $38,729 200 8,673 $27,771 201 2,745 $19,061 202 38,878 $23,055 203 28,973 $16,710 204 23,374 $19,911 205 6,673 $30,904 206 19,971 $21,524CMS-1498-P 1121

MS-DRG Number of Cases Threshold 207 36,206 $96,662 208 74,943 $48,685 215 177 $197,565 216 9,531 $182,613 217 6,914 $133,364 218 1,220 $112,405 219 12,757 $149,444 220 16,859 $110,276 221 4,462 $96,359 222 2,753 $167,255 223 3,841 $131,602 224 2,736 $152,310 225 4,479 $125,719 226 7,259 $124,233 227 30,034 $103,955 228 2,305 $142,545 229 2,844 $101,007 230 806 $79,269 231 1,350 $165,608 232 1,219 $131,481 233 15,280 $140,586 234 27,390 $106,146 235 9,464 $111,951 236 25,454 $83,813 237 22,095 $98,558 238 40,046 $66,101 239 10,860 $70,090 240 10,778 $47,663 241 1,549 $34,093 242 17,876 $73,344 243 41,219 $58,653 244 44,714 $48,782 245 3,963 $84,900 246 30,895 $74,642 247 143,690 $54,799 248 14,355 $69,420 249 46,331 $51,231 250 7,651 $64,700 251 36,366 $49,826 252 40,559 $57,835 253 44,579 $53,429 254 38,311 $41,802CMS-1498-P 1122

MS-DRG Number of Cases Threshold 255 2,482 $45,768 256 3,195 $35,494 257 394 $25,161 258 762 $59,622 259 5,040 $43,543 260 1,769 $63,839 261 3,898 $37,685 262 2,417 $30,338 263 517 $35,655 264 22,458 $46,679 265 1,714 $47,659 280 69,980 $39,490 281 53,379 $31,733 282 34,872 $24,367 283 12,645 $36,266 284 4,028 $25,976 285 1,426 $17,208 286 25,184 $47,068 287 134,625 $34,930 288 2,679 $54,285 289 1,196 $39,615 290 240 $31,203 291 176,278 $33,680 292 248,137 $26,745 293 117,949 $18,319 294 1,546 $26,111 295 874 $15,647 296 1,917 $31,226 297 762 $21,036 298 370 $13,581 299 21,212 $32,155 300 48,392 $24,880 301 28,761 $17,012 302 7,755 $26,119 303 52,448 $17,051 304 2,864 $28,173 305 33,320 $17,776 306 3,078 $32,067 307 6,028 $21,707 308 56,608 $30,569 309 107,651 $22,974 310 127,822 $16,117CMS-1498-P 1123

MS-DRG Number of Cases Threshold 311 15,707 $15,028 312 164,947 $20,561 313 169,249 $17,054 314 61,143 $36,453 315 31,566 $26,084 316 10,661 $17,666 326 11,323 $100,038 327 10,427 $56,127 328 8,536 $37,088 329 46,053 $93,370 330 60,286 $55,007 331 24,223 $40,753 332 1,602 $86,827 333 5,288 $53,532 334 3,027 $39,164 335 7,048 $80,849 336 13,571 $51,477 337 7,645 $38,166 338 1,283 $66,771 339 2,986 $46,480 340 3,035 $35,170 341 906 $51,011 342 2,901 $37,261 343 6,446 $28,320 344 914 $61,169 345 3,050 $40,209 346 2,589 $30,770 347 1,477 $46,158 348 4,253 $33,994 349 4,036 $22,321 350 1,676 $49,482 351 4,531 $35,490 352 6,446 $24,273 353 3,228 $54,617 354 9,551 $38,734 355 12,936 $28,045 356 7,893 $69,691 357 7,603 $47,181 358 2,044 $35,035 368 3,304 $38,781 369 5,624 $29,781 370 1,776 $21,455CMS-1498-P 1124

MS-DRG Number of Cases Threshold 371 22,527 $40,135 372 34,664 $31,161 373 11,188 $22,331 374 8,067 $41,336 375 17,153 $31,518 376 2,535 $24,404 377 48,249 $37,454 378 138,450 $27,315 379 50,738 $19,552 380 2,926 $41,150 381 6,193 $30,795 382 2,706 $23,160 383 1,129 $32,602 384 7,393 $25,019 385 2,206 $39,912 386 9,038 $29,099 387 4,129 $22,146 388 18,643 $35,848 389 54,825 $25,881 390 39,776 $18,232 391 45,134 $29,680 392 248,631 $20,958 393 21,573 $35,248 394 49,036 $27,559 395 20,047 $19,463 405 4,356 $94,902 406 5,109 $57,667 407 1,925 $43,571 408 1,492 $76,268 409 1,446 $53,357 410 474 $40,046 411 782 $75,017 412 838 $57,460 413 524 $44,552 414 4,697 $69,885 415 5,774 $48,153 416 3,984 $35,009 417 17,747 $55,518 418 27,480 $43,966 419 28,223 $34,296 420 711 $69,211 421 908 $43,258CMS-1498-P 1125

MS-DRG Number of Cases Threshold 422 234 $34,441 423 1,486 $78,374 424 802 $51,529 425 86 $39,079 432 12,406 $36,533 433 8,081 $26,786 434 398 $17,634 435 12,193 $39,619 436 12,588 $31,248 437 2,181 $27,130 438 14,974 $38,269 439 27,894 $28,968 440 20,546 $20,564 441 14,420 $36,621 442 18,594 $26,589 443 4,681 $18,613 444 12,604 $36,356 445 19,019 $30,426 446 12,775 $22,512 453 1,132 $182,692 454 3,077 $132,948 455 2,469 $102,744 456 1,130 $164,516 457 3,192 $114,426 458 1,561 $93,166 459 3,821 $114,004 460 61,691 $76,529 461 636 $95,750 462 11,335 $71,162 463 5,297 $72,652 464 8,717 $52,913 465 2,706 $39,867 466 3,703 $87,195 467 20,146 $65,733 468 15,777 $55,334 469 27,068 $67,299 470 412,246 $49,549 471 2,809 $88,964 472 8,590 $59,484 473 25,031 $49,259 474 2,921 $58,249 475 3,780 $40,794CMS-1498-P 1126

MS-DRG Number of Cases Threshold 476 1,133 $26,002 477 2,596 $65,108 478 8,906 $51,186 479 5,865 $41,443 480 24,261 $61,969 481 81,675 $45,348 482 33,813 $39,284 483 10,312 $54,770 484 17,960 $47,483 485 1,022 $63,293 486 2,389 $47,100 487 1,056 $38,013 488 3,242 $39,904 489 4,891 $31,977 490 22,896 $41,626 491 45,102 $27,812 492 5,163 $60,846 493 20,358 $43,967 494 25,195 $34,948 495 1,614 $54,469 496 4,879 $38,810 497 5,123 $29,492 498 1,480 $43,377 499 875 $26,447 500 1,848 $55,259 501 5,063 $37,568 502 5,734 $27,688 503 914 $46,218 504 2,807 $37,301 505 2,256 $29,136 506 716 $31,618 507 940 $43,481 508 1,782 $35,680 509 349 $34,621 510 1,057 $48,362 511 4,310 $38,156 512 8,239 $28,922 513 1,248 $33,152 514 920 $22,905 515 3,952 $61,716 516 12,225 $45,041 517 11,158 $37,652CMS-1498-P 1127

MS-DRG Number of Cases Threshold 533 818 $32,358 534 3,460 $18,488 535 7,260 $30,780 536 32,783 $17,853 537 944 $21,930 538 707 $16,133 539 3,237 $38,638 540 4,242 $31,087 541 1,124 $22,751 542 5,508 $39,262 543 16,786 $29,624 544 6,621 $20,148 545 3,601 $42,580 546 6,143 $28,738 547 3,344 $20,085 548 578 $39,621 549 1,215 $29,575 550 555 $20,310 551 10,903 $35,750 552 77,153 $22,274 553 2,150 $28,226 554 17,287 $17,720 555 2,590 $27,936 556 17,502 $18,051 557 3,722 $35,286 558 17,209 $23,595 559 1,899 $34,415 560 5,300 $24,964 561 5,307 $16,072 562 5,857 $31,319 563 32,421 $18,265 564 1,779 $32,772 565 4,064 $24,269 566 1,758 $17,800 573 4,788 $50,542 574 10,014 $37,184 575 3,719 $27,509 576 644 $63,202 577 2,414 $37,754 578 2,529 $28,880 579 3,776 $52,443 580 11,546 $35,468CMS-1498-P 1128

MS-DRG Number of Cases Threshold 581 10,745 $26,778 582 4,896 $29,747 583 7,560 $24,267 584 862 $36,952 585 1,459 $30,205 592 3,953 $34,195 593 11,208 $25,280 594 1,482 $17,532 595 1,114 $35,853 596 4,967 $22,362 597 559 $34,968 598 1,519 $28,537 599 185 $18,944 600 1,034 $25,106 601 778 $17,823 602 22,941 $32,031 603 137,791 $21,037 604 2,660 $30,594 605 20,161 $19,580 606 1,531 $28,668 607 7,082 $17,523 614 1,566 $52,876 615 1,350 $38,331 616 1,630 $73,334 617 6,557 $41,763 618 148 $31,392 619 840 $66,833 620 3,281 $45,226 621 11,420 $39,418 622 1,161 $51,332 623 2,540 $37,658 624 251 $27,170 625 1,200 $47,825 626 2,958 $33,033 627 12,193 $22,852 628 3,450 $60,959 629 4,714 $46,582 630 446 $36,422 637 18,690 $32,234 638 54,251 $21,744 639 24,864 $14,934 640 56,538 $27,789CMS-1498-P 1129

MS-DRG Number of Cases Threshold 641 187,502 $18,502 642 1,603 $26,187 643 5,943 $37,831 644 13,581 $28,528 645 6,414 $20,136 652 10,206 $69,446 653 1,695 $103,526 654 3,717 $62,937 655 1,275 $45,981 656 3,219 $69,622 657 9,011 $47,214 658 6,794 $38,290 659 4,057 $62,116 660 8,536 $42,838 661 3,858 $35,296 662 794 $54,224 663 2,041 $35,553 664 3,279 $30,167 665 571 $54,953 666 2,190 $37,500 667 2,593 $21,648 668 3,075 $50,865 669 14,675 $33,924 670 8,752 $21,741 671 799 $34,868 672 633 $21,959 673 11,749 $52,536 674 9,543 $45,904 675 3,249 $37,269 682 99,060 $34,669 683 117,393 $26,883 684 26,713 $17,930 685 2,509 $22,911 686 1,144 $38,658 687 3,412 $28,835 688 705 $18,931 689 60,753 $29,890 690 213,524 $20,821 691 997 $39,723 692 380 $29,377 693 1,778 $34,011CMS-1498-P 1130

MS-DRG Number of Cases Threshold 694 17,760 $21,450 695 1,093 $29,370 696 10,252 $17,381 697 509 $21,088 698 23,414 $34,055 699 31,796 $26,373 700 8,108 $18,232 707 5,391 $43,551 708 16,866 $36,159 709 817 $38,918 710 1,503 $32,486 711 739 $38,867 712 424 $23,105 713 9,757 $30,924 714 22,569 $17,966 715 505 $39,925 716 685 $32,503 717 734 $35,429 718 446 $22,030 722 477 $34,256 723 1,933 $27,779 724 276 $17,297 725 468 $30,772 726 3,907 $18,897 727 1,529 $31,681 728 6,091 $20,560 729 836 $25,783 730 276 $17,460 734 1,520 $49,324 735 1,137 $33,179 736 903 $83,470 737 3,274 $47,200 738 711 $34,082 739 905 $63,570 740 4,458 $39,308 741 5,381 $30,656 742 10,803 $35,874 743 27,629 $25,402 744 1,623 $35,398 745 1,263 $24,085 746 2,619 $34,032CMS-1498-P 1131

MS-DRG Number of Cases Threshold 747 7,244 $24,914 748 17,063 $25,408 749 1,052 $49,175 750 362 $25,774 754 1,022 $40,025 755 3,404 $28,901 756 440 $18,265 757 1,322 $36,079 758 2,220 $29,154 759 978 $20,075 760 2,268 $22,173 761 1,135 $15,266 765 3,416 $23,396 766 2,753 $15,950 767 168 $18,876 769 122 $36,289 770 177 $19,526 774 1,665 $13,966 775 5,850 $10,155 776 588 $17,142 777 197 $22,190 778 444 $10,944 779 121 $14,296 780 42 $5,027 781 3,387 $16,074 782 188 $10,992 799 537 $93,801 800 686 $56,226 801 356 $39,392 802 935 $61,181 803 1,162 $41,905 804 764 $30,381 808 7,976 $42,063 809 14,309 $29,974 810 2,165 $25,051 811 29,067 $29,896 812 100,121 $21,370 813 11,434 $30,788 814 1,595 $35,777 815 3,792 $27,743 816 1,528 $19,965CMS-1498-P 1132

MS-DRG Number of Cases Threshold 820 1,268 $101,585 821 2,060 $50,233 822 1,736 $33,712 823 1,872 $83,644 824 3,132 $50,598 825 1,442 $33,753 826 602 $86,073 827 1,497 $47,782 828 694 $36,506 829 1,398 $51,566 830 384 $31,420 834 3,700 $70,199 835 3,043 $39,872 836 1,199 $26,518 837 1,266 $106,271 838 1,553 $53,954 839 1,282 $31,359 840 7,556 $51,514 841 10,908 $36,242 842 3,637 $28,006 843 1,480 $38,892 844 2,961 $30,255 845 666 $23,011 846 2,613 $42,088 847 22,015 $29,252 848 1,106 $24,344 849 1,161 $32,275 853 39,157 $91,531 854 8,734 $55,845 855 337 $34,562 856 5,924 $76,601 857 9,805 $41,686 858 2,324 $32,633 862 9,495 $38,011 863 21,662 $24,948 864 18,165 $22,959 865 2,268 $32,370 866 7,434 $20,691 867 5,312 $44,169 868 2,854 $28,484 869 778 $18,946CMS-1498-P 1133

MS-DRG Number of Cases Threshold 870 25,704 $106,185 871 246,469 $39,940 872 110,301 $29,921 876 656 $47,281 880 8,141 $17,733 881 4,536 $13,825 882 1,797 $13,928 883 863 $21,336 884 18,103 $22,036 885 88,143 $17,427 886 525 $16,974 887 466 $20,752 894 4,519 $9,250 895 6,272 $18,826 896 6,916 $31,320 897 36,847 $15,672 901 937 $59,770 902 1,889 $36,330 903 1,026 $27,622 904 1,894 $50,605 905 763 $30,023 906 706 $27,779 907 8,651 $64,343 908 9,015 $41,044 909 4,756 $30,985 913 871 $31,045 914 5,457 $19,215 915 1,429 $32,069 916 5,627 $12,701 917 19,110 $33,847 918 36,704 $17,074 919 10,760 $34,206 920 15,239 $25,970 921 7,309 $16,831 922 1,046 $31,696 923 3,197 $18,119 927 188 $191,332 928 947 $70,439 929 366 $39,682 933 138 $35,364 934 608 $27,112CMS-1498-P 1134

MS-DRG Number of Cases Threshold 935 2,111 $25,585 939 718 $53,737 940 1,636 $38,331 941 1,454 $31,143 945 5,962 $22,482 946 2,808 $19,520 947 12,288 $28,163 948 55,407 $18,688 949 639 $24,011 950 276 $12,574 951 1,027 $17,059 955 443 $101,419 956 4,421 $63,509 957 1,436 $116,430 958 1,214 $76,277 959 200 $50,235 963 1,769 $55,015 964 2,904 $35,973 965 911 $25,761 969 631 $88,018 970 102 $55,798 974 5,213 $46,839 975 4,509 $31,862 976 1,528 $24,990 977 3,545 $27,392 981 25,552 $87,682 982 19,654 $58,273 983 4,889 $41,091 984 505 $63,106 985 1,056 $46,172 986 447 $30,153 987 7,984 $61,556 988 10,936 $41,576 989 3,945 $29,355 999 17 $24,638

1 Cases taken from the FY 2009 MedPAR file; MS-DRGs are from GROUPER Version 28.0.CMS-1498-P 1135

TABLE 11.—PROPOSED MS-LTC-DRGS, R ELATIVE WEIGHTS, GEOMETRIC AVERAGE LENGTH OF STAY, AND SHORT-STAY OUTLIER (SSO) THRESHOLD FOR DISCHARGES OCCURRING FROM OCTOBER 1, 2010 THROUGH SEPTEMBER 30, 2011 UNDER THE LTCH PPS

MSLTCDRG BaseMSLTCDRG MS-LTC-DRG Title FY 2009 LTCH Cases Proposed Relative Weight Proposed Geometric

Average Length of Stay Proposed Short-Stay

Outlier (SSO) Threshold 1
1 1 HEART TRANSPLANT OR IMPLANT OF HEART ASSIST SYSTEM W MCC 0 0.0000 0.0 0.0 2 1 HEART TRANSPLANT OR IMPLANT OF HEART ASSIST SYSTEM W/O MCC 0 0.0000 0.0 0.0 3 3 ECMO OR TRACH W MV 96+ HRS OR PDX EXC FACE, MOUTH & NECK W MAJ O.R. 270 4.6420 65.4 54.5 4 4 TRACH W MV 96+ HRS OR PDX EXC FACE, MOUTH & NECK W/O MAJ O.R. 1,536 2.9398 43.7 36.4 5 5 LIVER TRANSPLANT W MCC OR INTESTINAL TRANSPLANT 0 0.0000 0.0 0.0 6 5 LIVER TRANSPLANT W/O MCC 0 0.0000 0.0 0.0 7 7 LUNG TRANSPLANT 0 0.0000 0.0 0.0 8 8 SIMULTANEOUS PANCREAS/KIDNEY TRANSPLANT 0 0.0000 0.0 0.0 10 10 PANCREAS TRANSPLANT 0 0.0000 0.0 0.0 11 11 TRACHEOSTOMY FOR FACE,MOUTH & NECK DIAGNOSES W MCC 1 1.0834 28.9 24.1 12 11 TRACHEOSTOMY FOR FACE,MOUTH & NECK DIAGNOSES W CC 0 0.8745 23.3 19.4 13 11 TRACHEOSTOMY FOR FACE,MOUTH & NECK DIAGNOSES W/O CC/MCC 0 0.4878 18.1 15.1 14 14 ALLOGENEIC BONE MARROW TRANSPLANT 0 0.5578 19.4 16.2 15 15 AUTOLOGOUS BONE MARROW TRANSPLANT 0 0.5578 19.4 16.2 20 20 INTRACRANIAL VASCULAR PROCEDURES W PDX HEMORRHAGE W MCC 1 1.6495 36.4 30.3 21 20 INTRACRANIAL VASCULAR PROCEDURES W PDX HEMORRHAGE W CC 0 0.6040 22.1 18.4 22 20 INTRACRANIAL VASCULAR PROCEDURES W PDX HEMORRHAGE W/O CC/MCC 0 0.4878 18.1 15.1 23 23 CRANIO W MAJOR DEV IMPL/ACUTE COMPLEX CNS PDX W MCC OR CHEMO IMPLANT 0 1.0834 28.9 24.1 24 23 CRANIO W MAJOR DEV IMPL/ACUTE COMPLEX CNS PDX W/O MCC 0 0.4878 18.1 15.1 25 25 CRANIOTOMY & ENDOVASCULAR INTRACRANIAL PROCEDURES W MCC 2 1.0834 28.9 24.1 26 25 CRANIOTOMY & ENDOVASCULAR INTRACRANIAL PROCEDURES W CC 1 0.4878 18.1 15.1 27 25 CRANIOTOMY & ENDOVASCULAR INTRACRANIAL PROCEDURES W/O CC/MCC 0 0.4878 18.1 15.1 28 28 SPINAL PROCEDURES W MCC 11 1.0834 28.9 24.1 29 28 SPINAL PROCEDURES W CC OR SPINAL NEUROSTIMULATORS 16 0.8667 24.6 20.5CMS-1498-P 1136

MSLTCDRG BaseMSLTCDRG MS-LTC-DRG Title FY 2009 LTCH Cases Proposed Relative Weight Proposed Geometric

Average Length of Stay Proposed Short-Stay

Outlier (SSO) Threshold 1
30 28 SPINAL PROCEDURES W/O CC/MCC 0 0.8667 24.6 20.5 31 31 VENTRICULAR SHUNT PROCEDURES W MCC 1 1.0834 28.9 24.1 32 31 VENTRICULAR SHUNT PROCEDURES W CC 0 1.0834 28.9 24.1 33 31 VENTRICULAR SHUNT PROCEDURES W/O CC/MCC 0 1.0834 28.9 24.1 34 34 CAROTID ARTERY STENT PROCEDURE W MCC 0 1.6495 36.4 30.3 35 34 CAROTID ARTERY STENT PROCEDURE W CC 0 1.6495 36.4 30.3 36 34 CAROTID ARTERY STENT PROCEDURE W/O CC/MCC 0 1.6495 36.4 30.3 37 37 EXTRACRANIAL PROCEDURES W MCC* 13 1.6495 36.4 30.3 38 37 EXTRACRANIAL PROCEDURES W CC 4 1.6495 36.4 30.3 39 37 EXTRACRANIAL PROCEDURES W/O CC/MCC 0 1.6495 36.4 30.3 40 40 PERIPH/CRANIAL NERVE & OTHER NERV SYST PROC W MCC 116 1.2680 34.0 28.3 41 40 PERIPH/CRANIAL NERVE & OTHER NERV SYST PROC W CC OR PERIPH NEUROSTIM 82 0.8898 29.0 24.2 42 40 PERIPH/CRANIAL NERVE & OTHER NERV SYST PROC W/O CC/MCC 3 0.4878 18.1 15.1 52 52 SPINAL DISORDERS & INJURIES W CC/MCC* 64 1.1123 41.2 34.3 53 52 SPINAL DISORDERS & INJURIES W/O CC/MCC 6 1.1123 41.2 34.3 54 54 NERVOUS SYSTEM NEOPLASMS W MCC 32 0.7988 27.3 22.8 55 54 NERVOUS SYSTEM NEOPLASMS W/O MCC 35 0.5857 19.2 16.0 56 56 DEGENERATIVE NERVOUS SYSTEM DISORDERS W MCC 1,122 0.8046 25.6 21.3 57 56 DEGENERATIVE NERVOUS SYSTEM DISORDERS W/O MCC 1,142 0.5744 23.7 19.8 58 58 MULTIPLE SCLEROSIS & CEREBELLAR ATAXIA W MCC 11 1.6495 36.4 30.3 59 58 MULTIPLE SCLEROSIS & CEREBELLAR ATAXIA W CC 14 0.6280 20.9 17.4 60 58 MULTIPLE SCLEROSIS & CEREBELLAR ATAXIA W/O CC/MCC 4 0.4878 18.1 15.1 61 61 ACUTE ISCHEMIC STROKE W USE OF THROMBOLYTIC AGENT W MCC 0 0.9204 23.3 19.4 62 61 ACUTE ISCHEMIC STROKE W USE OF THROMBOLYTIC AGENT W CC 0 0.6172 22.1 18.4 63 61 ACUTE ISCHEMIC STROKE W USE OF THROMBOLYTIC AGENT W/O CC/MCC 0 0.6172 22.1 18.4 64 64 INTRACRANIAL HEMORRHAGE OR CEREBRAL INFARCTION W MCC 145 0.8377 24.2 20.2 65 64 INTRACRANIAL HEMORRHAGE OR CEREBRAL INFARCTION W CC 52 0.6040 22.1 18.4 66 64 INTRACRANIAL HEMORRHAGE OR CEREBRAL INFARCTION W/O CC/MCC 9 0.4878 18.1 15.1 67 67 NONSPECIFIC CVA & PRECEREBRAL OCCLUSION W/O INFARCT W MCC 0 0.4878 18.1 15.1CMS-1498-P 1137

MSLTCDRG BaseMSLTCDRG MS-LTC-DRG Title FY 2009 LTCH Cases Proposed Relative Weight Proposed Geometric

Average Length of Stay Proposed Short-Stay

Outlier (SSO) Threshold 1
68 67 NONSPECIFIC CVA & PRECEREBRAL OCCLUSION W/O INFARCT W/O MCC 3 0.4878 18.1 15.1 69 69 TRANSIENT ISCHEMIA 2 1.0834 28.9 24.1 70 70 NONSPECIFIC CEREBROVASCULAR DISORDERS W MCC 182 0.9204 23.3 19.4 71 70 NONSPECIFIC CEREBROVASCULAR DISORDERS W CC* 92 0.6172 22.1 18.4 72 70 NONSPECIFIC CEREBROVASCULAR DISORDERS W/O CC/MCC 9 0.6172 22.1 18.4 73 73 CRANIAL & PERIPHERAL NERVE DISORDERS W MCC 112 0.8684 24.9 20.8 74 73 CRANIAL & PERIPHERAL NERVE DISORDERS W/O MCC 111 0.6375 21.9 18.3 75 75 VIRAL MENINGITIS W CC/MCC 9 0.8667 24.6 20.5 76 75 VIRAL MENINGITIS W/O CC/MCC 0 0.8667 24.6 20.5 77 77 HYPERTENSIVE ENCEPHALOPATHY W MCC 2 0.8667 24.6 20.5 78 77 HYPERTENSIVE ENCEPHALOPATHY W CC 2 0.8667 24.6 20.5 79 77 HYPERTENSIVE ENCEPHALOPATHY W/O CC/MCC 0 0.6280 20.9 17.4 80 80 NONTRAUMATIC STUPOR & COMA W MCC 8 1.0834 28.9 24.1 81 80 NONTRAUMATIC STUPOR & COMA W/O MCC 6 0.4878 18.1 15.1 82 82 TRAUMATIC STUPOR & COMA, COMA >1 HR W MCC 15 0.8667 24.6 20.5 83 82 TRAUMATIC STUPOR & COMA, COMA >1 HR W CC 9 0.6280 20.9 17.4 84 82 TRAUMATIC STUPOR & COMA, COMA >1 HR W/O CC/MCC 1 0.4878 18.1 15.1 85 85 TRAUMATIC STUPOR & COMA, COMA <1 HR W MCC 92 0.9280 25.1 20.9 86 85 TRAUMATIC STUPOR & COMA, COMA <1 HR W CC 56 0.6865 23.9 19.9 87 85 TRAUMATIC STUPOR & COMA, COMA <1 HR W/O CC/MCC 8 0.4878 18.1 15.1 88 88 CONCUSSION W MCC 0 1.0834 28.9 24.1 89 88 CONCUSSION W CC 1 1.0834 28.9 24.1 90 88 CONCUSSION W/O CC/MCC 1 0.8667 24.6 20.5 91 91 OTHER DISORDERS OF NERVOUS SYSTEM W MCC 264 0.8775 24.3 20.3 92 91 OTHER DISORDERS OF NERVOUS SYSTEM W CC 98 0.7482 24.2 20.2 93 91 OTHER DISORDERS OF NERVOUS SYSTEM W/O CC/MCC 7 0.4878 18.1 15.1 94 94 BACTERIAL & TUBERCULOUS INFECTIONS OF NERVOUS SYSTEM W MCC 247 1.1110 29.4 24.5 95 94 BACTERIAL & TUBERCULOUS INFECTIONS OF NERVOUS SYSTEM W CC* 99 0.8203 25.3 21.1 96 94 BACTERIAL & TUBERCULOUS INFECTIONS OF NERVOUS SYSTEM W/O CC/MCC 22 0.8203 25.3 21.1CMS-1498-P 1138

MSLTCDRG BaseMSLTCDRG MS-LTC-DRG Title FY 2009 LTCH Cases Proposed Relative Weight Proposed Geometric

Average Length of Stay Proposed Short-Stay

Outlier (SSO) Threshold 1
97 97 NON-BACTERIAL INFECT OF NERVOUS SYS EXC VIRAL MENINGITIS W MCC 70 0.9186 24.6 20.5 98 97 NON-BACTERIAL INFECT OF NERVOUS SYS EXC VIRAL MENINGITIS W CC 23 0.6280 20.9 17.4 99 97 NON-BACTERIAL INFECT OF NERVOUS SYS EXC VIRAL MENINGITIS W/O CC/MCC 4 0.4878 18.1 15.1 100 100 SEIZURES W MCC 32 0.7248 21.5 17.9 101 100 SEIZURES W/O MCC 36 0.6180 21.8 18.2 102 102 HEADACHES W MCC 2 0.8667 24.6 20.5 103 102 HEADACHES W/O MCC 0 0.4878 18.1 15.1 113 113 ORBITAL PROCEDURES W CC/MCC 1 1.0834 28.9 24.1 114 113 ORBITAL PROCEDURES W/O CC/MCC 0 1.0834 28.9 24.1 115 115 EXTRAOCULAR PROCEDURES EXCEPT ORBIT 0 1.0834 28.9 24.1 116 116 INTRAOCULAR PROCEDURES W CC/MCC 0 1.0834 28.9 24.1 117 116 INTRAOCULAR PROCEDURES W/O CC/MCC 0 1.0834 28.9 24.1 121 121 ACUTE MAJOR EYE INFECTIONS W CC/MCC 9 0.6280 20.9 17.4 122 121 ACUTE MAJOR EYE INFECTIONS W/O CC/MCC 3 0.4878 18.1 15.1 123 123 NEUROLOGICAL EYE DISORDERS 0 1.0834 28.9 24.1 124 124 OTHER DISORDERS OF THE EYE W MCC* 6 1.0834 28.9 24.1 125 124 OTHER DISORDERS OF THE EYE W/O MCC 3 1.0834 28.9 24.1 129 129 MAJOR HEAD & NECK PROCEDURES W CC/MCC OR MAJOR DEVICE 0 1.2634 27.1 22.6 130 129 MAJOR HEAD & NECK PROCEDURES W/O CC/MCC 0 0.4878 18.1 15.1 131 131 CRANIAL/FACIAL PROCEDURES W CC/MCC 1 1.6495 36.4 30.3 132 131 CRANIAL/FACIAL PROCEDURES W/O CC/MCC 0 0.8203 25.3 21.1 133 133 OTHER EAR, NOSE, MOUTH & THROAT O.R. PROCEDURES W CC/MCC 9 1.6495 36.4 30.3 134 133 OTHER EAR, NOSE, MOUTH & THROAT O.R. PROCEDURES W/O CC/MCC 0 0.4878 18.1 15.1 135 135 SINUS & MASTOID PROCEDURES W CC/MCC 0 1.6495 36.4 30.3 136 135 SINUS & MASTOID PROCEDURES W/O CC/MCC 0 0.4878 18.1 15.1 137 137 MOUTH PROCEDURES W CC/MCC 0 0.6280 20.9 17.4 138 137 MOUTH PROCEDURES W/O CC/MCC 0 0.6280 20.9 17.4 139 139 SALIVARY GLAND PROCEDURES 0 0.6280 20.9 17.4 146 146 EAR, NOSE, MOUTH & THROAT MALIGNANCY W MCC 39 1.2634 27.1 22.6 147 146 EAR, NOSE, MOUTH & THROAT MALIGNANCY W CC 31 0.8745 23.3 19.4 148 146 EAR, NOSE, MOUTH & THROAT MALIGNANCY W/O CC/MCC 3 0.4878 18.1 15.1 149 149 DYSEQUILIBRIUM 2 0.4878 18.1 15.1 150 150 EPISTAXIS W MCC 0 0.8587 25.4 21.2 151 150 EPISTAXIS W/O MCC 1 0.4878 18.1 15.1 152 152 OTITIS MEDIA & URI W MCC 31 0.8587 25.4 21.2CMS-1498-P 1139

MSLTCDRG BaseMSLTCDRG MS-LTC-DRG Title FY 2009 LTCH Cases Proposed Relative Weight Proposed Geometric

Average Length of Stay Proposed Short-Stay

Outlier (SSO) Threshold 1
153 152 OTITIS MEDIA & URI W/O MCC 28 0.5982 19.9 16.6 154 154 OTHER EAR, NOSE, MOUTH & THROAT DIAGNOSES W MCC 49 1.0726 26.3 21.9 155 154 OTHER EAR, NOSE, MOUTH & THROAT DIAGNOSES W CC* 42 0.8203 25.3 21.1 156 154 OTHER EAR, NOSE, MOUTH & THROAT DIAGNOSES W/O CC/MCC 8 0.8203 25.3 21.1 157 157 DENTAL & ORAL DISEASES W MCC 9 1.0834 28.9 24.1 158 157 DENTAL & ORAL DISEASES W CC 24 0.6280 20.9 17.4 159 157 DENTAL & ORAL DISEASES W/O CC/MCC 4 0.6280 20.9 17.4 163 163 MAJOR CHEST PROCEDURES W MCC 28 2.4302 42.0 35.0 164 163 MAJOR CHEST PROCEDURES W CC 5 1.6495 36.4 30.3 165 163 MAJOR CHEST PROCEDURES W/O CC/MCC 0 1.5463 31.4 26.2 166 166 OTHER RESP SYSTEM O.R. PROCEDURES W MCC 1,742 2.5489 42.0 35.0 167 166 OTHER RESP SYSTEM O.R. PROCEDURES W CC* 174 1.5463 31.4 26.2 168 166 OTHER RESP SYSTEM O.R. PROCEDURES W/O CC/MCC 8 1.5463 31.4 26.2 175 175 PULMONARY EMBOLISM W MCC 105 0.7521 22.7 18.9 176 175 PULMONARY EMBOLISM W/O MCC 72 0.5489 18.8 15.7 177 177 RESPIRATORY INFECTIONS & INFLAMMATIONS W MCC 4,071 0.8895 22.9 19.1 178 177 RESPIRATORY INFECTIONS & INFLAMMATIONS W CC 1,912 0.7193 20.8 17.3 179 177 RESPIRATORY INFECTIONS & INFLAMMATIONS W/O CC/MCC 143 0.6009 17.1 14.3 180 180 RESPIRATORY NEOPLASMS W MCC 117 0.7510 20.1 16.8 181 180 RESPIRATORY NEOPLASMS W CC 64 0.6640 19.9 16.6 182 180 RESPIRATORY NEOPLASMS W/O CC/MCC 2 0.6280 20.9 17.4 183 183 MAJOR CHEST TRAUMA W MCC 0 2.4302 42.0 35.0 184 183 MAJOR CHEST TRAUMA W CC 0 1.6495 36.4 30.3 185 183 MAJOR CHEST TRAUMA W/O CC/MCC 0 1.5463 31.4 26.2 186 186 PLEURAL EFFUSION W MCC 147 0.7405 20.7 17.3 187 186 PLEURAL EFFUSION W CC 41 0.5699 18.8 15.7 188 186 PLEURAL EFFUSION W/O CC/MCC 3 0.4878 18.1 15.1 189 189 PULMONARY EDEMA & RESPIRATORY FAILURE 8,376 0.9737 23.5 19.6 190 190 CHRONIC OBSTRUCTIVE PULMONARY DISEASE W MCC 2,365 0.7421 20.2 16.8 191 190 CHRONIC OBSTRUCTIVE PULMONARY DISEASE W CC 1,129 0.6316 18.4 15.3 192 190 CHRONIC OBSTRUCTIVE PULMONARY DISEASE W/O CC/MCC 286 0.5081 16.4 13.7 193 193 SIMPLE PNEUMONIA & PLEURISY W MCC 2,120 0.7644 20.9 17.4 194 193 SIMPLE PNEUMONIA & PLEURISY W CC 1,554 0.6152 18.9 15.8 195 193 SIMPLE PNEUMONIA & PLEURISY W/O CC/MCC 162 0.4881 16.7 13.9CMS-1498-P 1140

MSLTCDRG BaseMSLTCDRG MS-LTC-DRG Title FY 2009 LTCH Cases Proposed Relative Weight Proposed Geometric

Average Length of Stay Proposed Short-Stay

Outlier (SSO) Threshold 1
196 196 INTERSTITIAL LUNG DISEASE W MCC 96 0.7048 20.4 17.0 197 196 INTERSTITIAL LUNG DISEASE W CC 71 0.6056 18.6 15.5 198 196 INTERSTITIAL LUNG DISEASE W/O CC/MCC 20 0.4878 18.1 15.1 199 199 PNEUMOTHORAX W MCC 80 0.7749 21.5 17.9 200 199 PNEUMOTHORAX W CC 15 0.6280 20.9 17.4 201 199 PNEUMOTHORAX W/O CC/MCC 4 0.4878 18.1 15.1 202 202 BRONCHITIS & ASTHMA W CC/MCC 114 0.7236 20.9 17.4 203 202 BRONCHITIS & ASTHMA W/O CC/MCC 10 0.6280 20.9 17.4 204 204 RESPIRATORY SIGNS & SYMPTOMS 144 0.7769 21.1 17.6 205 205 OTHER RESPIRATORY SYSTEM DIAGNOSES W MCC 376 0.8291 22.1 18.4 206 205 OTHER RESPIRATORY SYSTEM DIAGNOSES W/O MCC 145 0.7030 20.7 17.3 207 207 RESPIRATORY SYSTEM DIAGNOSIS W VENTILATOR SUPPORT 96+ HOURS 14,744 2.0241 33.3 27.8 208 208 RESPIRATORY SYSTEM DIAGNOSIS W VENTILATOR SUPPORT <96 HOURS 1,828 1.0948 22.2 18.5 215 215 OTHER HEART ASSIST SYSTEM IMPLANT 0 0.6280 20.9 17.4 216 216 CARDIAC VALVE & OTH MAJ CARDIOTHORACIC PROC W CARD CATH W MCC 0 1.6495 36.4 30.3 217 216 CARDIAC VALVE & OTH MAJ CARDIOTHORACIC PROC W CARD CATH W CC 0 1.2501 30.4 25.3 218 216 CARDIAC VALVE & OTH MAJ CARDIOTHORACIC PROC W CARD CATH W/O CC/MCC 0 0.6280 20.9 17.4 219 219 CARDIAC VALVE & OTH MAJ CARDIOTHORACIC PROC W/O CARD CATH W MCC 0 1.6495 36.4 30.3 220 219 CARDIAC VALVE & OTH MAJ CARDIOTHORACIC PROC W/O CARD CATH W CC 1 1.6495 36.4 30.3 221 219 CARDIAC VALVE & OTH MAJ CARDIOTHORACIC PROC W/O CARD CATH W/O CC/MCC 0 0.6280 20.9 17.4 222 222 CARDIAC DEFIB IMPLANT W CARDIAC CATH W AMI/HF/SHOCK W MCC 0 1.6495 36.4 30.3 223 222 CARDIAC DEFIB IMPLANT W CARDIAC CATH W AMI/HF/SHOCK W/O MCC 0 0.8667 24.6 20.5 224 224 CARDIAC DEFIB IMPLANT W CARDIAC CATH W/O AMI/HF/SHOCK W MCC 0 1.6495 36.4 30.3 225 224 CARDIAC DEFIB IMPLANT W CARDIAC CATH W/O AMI/HF/SHOCK W/O MCC 1 0.6280 20.9 17.4 226 226 CARDIAC DEFIBRILLATOR IMPLANT W/O CARDIAC CATH W MCC 6 1.6495 36.4 30.3 227 226 CARDIAC DEFIBRILLATOR IMPLANT W/O CARDIAC CATH W/O MCC 2 1.6495 36.4 30.3CMS-1498-P 1141

MSLTCDRG BaseMSLTCDRG MS-LTC-DRG Title FY 2009 LTCH Cases Proposed Relative Weight Proposed Geometric

Average Length of Stay Proposed Short-Stay

Outlier (SSO) Threshold 1
228 228 OTHER CARDIOTHORACIC PROCEDURES W MCC 0 1.3830 30.1 25.1 229 228 OTHER CARDIOTHORACIC PROCEDURES W CC 0 1.2501 30.4 25.3 230 228 OTHER CARDIOTHORACIC PROCEDURES W/O CC/MCC 0 0.6280 20.9 17.4 231 231 CORONARY BYPASS W PTCA W MCC 0 1.6495 36.4 30.3 232 231 CORONARY BYPASS W PTCA W/O MCC 0 0.6280 20.9 17.4 233 233 CORONARY BYPASS W CARDIAC CATH W MCC 0 1.6495 36.4 30.3 234 233 CORONARY BYPASS W CARDIAC CATH W/O MCC 0 0.6280 20.9 17.4 235 235 CORONARY BYPASS W/O CARDIAC CATH W MCC 0 1.6495 36.4 30.3 236 235 CORONARY BYPASS W/O CARDIAC CATH W/O MCC 1 0.6280 20.9 17.4 237 237 MAJOR CARDIOVASC PROCEDURES W MCC OR THORACIC AORTIC ANEURYSM REPAIR 6 1.6495 36.4 30.3 238 237 MAJOR CARDIOVASC PROCEDURES W/O MCC 0 0.6280 20.9 17.4 239 239 AMPUTATION FOR CIRC SYS DISORDERS EXC UPPER LIMB & TOE W MCC 142 1.5508 36.9 30.8 240 239 AMPUTATION FOR CIRC SYS DISORDERS EXC UPPER LIMB & TOE W CC 55 1.3458 35.0 29.2 241 239 AMPUTATION FOR CIRC SYS DISORDERS EXC UPPER LIMB & TOE W/O CC/MCC 0 0.6280 20.9 17.4 242 242 PERMANENT CARDIAC PACEMAKER IMPLANT W MCC 3 1.6495 36.4 30.3 243 242 PERMANENT CARDIAC PACEMAKER IMPLANT W CC 6 0.8667 24.6 20.5 244 242 PERMANENT CARDIAC PACEMAKER IMPLANT W/O CC/MCC 1 0.4878 18.1 15.1 245 245 AICD GENERATOR PROCEDURES 0 0.4878 18.1 15.1 246 246 PERC CARDIOVASC PROC W DRUG-ELUTING STENT W MCC OR 4+ VESSELS/STENTS 0 1.3830 30.1 25.1 247 246 PERC CARDIOVASC PROC W DRUG-ELUTING STENT W/O MCC 2 0.8667 24.6 20.5248 248 PERC CARDIOVASC PROC W NON-DRUGELUTING STENT W MCC OR 4+ VES/STENTS 1 1.6495 36.4 30.3249 248 PERC CARDIOVASC PROC W NON-DRUGELUTING STENT W/O MCC 1 0.6280 20.9 17.4 250 250 PERC CARDIOVASC PROC W/O CORONARY ARTERY STENT W MCC 3 1.0834 28.9 24.1 251 250 PERC CARDIOVASC PROC W/O CORONARY ARTERY STENT W/O MCC 0 1.0834 28.9 24.1 252 252 OTHER VASCULAR PROCEDURES W MCC 110 1.3830 30.1 25.1 253 252 OTHER VASCULAR PROCEDURES W CC 46 1.2501 30.4 25.3 254 252 OTHER VASCULAR PROCEDURES W/O CC/MCC 2 0.6280 20.9 17.4CMS-1498-P 1142

MSLTCDRG BaseMSLTCDRG MS-LTC-DRG Title FY 2009 LTCH Cases Proposed Relative Weight Proposed Geometric

Average Length of Stay Proposed Short-Stay

Outlier (SSO) Threshold 1
255 255 UPPER LIMB & TOE AMPUTATION FOR CIRC SYSTEM DISORDERS W MCC 37 1.2192 33.9 28.3 256 255 UPPER LIMB & TOE AMPUTATION FOR CIRC SYSTEM DISORDERS W CC 22 1.0834 28.9 24.1 257 255 UPPER LIMB & TOE AMPUTATION FOR CIRC SYSTEM DISORDERS W/O CC/MCC 0 0.6280 20.9 17.4 258 258 CARDIAC PACEMAKER DEVICE REPLACEMENT W MCC 1 0.8667 24.6 20.5 259 258 CARDIAC PACEMAKER DEVICE REPLACEMENT W/O MCC 0 0.6280 20.9 17.4 260 260 CARDIAC PACEMAKER REVISION EXCEPT DEVICE REPLACEMENT W MCC 2 1.6495 36.4 30.3 261 260 CARDIAC PACEMAKER REVISION EXCEPT DEVICE REPLACEMENT W CC 3 1.0834 28.9 24.1 262 260 CARDIAC PACEMAKER REVISION EXCEPT DEVICE REPLACEMENT W/O CC/MCC 1 0.6280 20.9 17.4 263 263 VEIN LIGATION & STRIPPING 2 1.6495 36.4 30.3 264 264 OTHER CIRCULATORY SYSTEM O.R. PROCEDURES 594 1.0441 30.6 25.5 265 265 AICD LEAD PROCEDURES 0 1.0441 30.6 25.5 280 280 ACUTE MYOCARDIAL INFARCTION, DISCHARGED ALIVE W MCC 271 0.7702 22.2 18.5 281 280 ACUTE MYOCARDIAL INFARCTION, DISCHARGED ALIVE W CC 105 0.6663 20.9 17.4 282 280 ACUTE MYOCARDIAL INFARCTION, DISCHARGED ALIVE W/O CC/MCC 12 0.4878 18.1 15.1 283 283 ACUTE MYOCARDIAL INFARCTION, EXPIRED W MCC 46 0.9091 17.2 14.3 284 283 ACUTE MYOCARDIAL INFARCTION, EXPIRED W CC 6 0.6280 20.9 17.4 285 283 ACUTE MYOCARDIAL INFARCTION, EXPIRED W/O CC/MCC 0 0.6280 20.9 17.4 286 286 CIRCULATORY DISORDERS EXCEPT AMI, W CARD CATH W MCC 11 1.6495 36.4 30.3 287 286 CIRCULATORY DISORDERS EXCEPT AMI, W CARD CATH W/O MCC 5 0.8667 24.6 20.5 288 288 ACUTE & SUBACUTE ENDOCARDITIS W MCC 646 1.0263 26.3 21.9 289 288 ACUTE & SUBACUTE ENDOCARDITIS W CC 240 0.8452 26.2 21.8 290 288 ACUTE & SUBACUTE ENDOCARDITIS W/O CC/MCC 25 0.7600 27.8 23.2 291 291 HEART FAILURE & SHOCK W MCC 1,436 0.7773 21.5 17.9 292 291 HEART FAILURE & SHOCK W CC 872 0.6120 19.5 16.3 293 291 HEART FAILURE & SHOCK W/O CC/MCC 83 0.4418 16.9 14.1 294 294 DEEP VEIN THROMBOPHLEBITIS W CC/MCC 8 1.6495 36.4 30.3 295 294 DEEP VEIN THROMBOPHLEBITIS W/O CC/MCC 0 0.5156 20.0 16.7 296 296 CARDIAC ARREST, UNEXPLAINED W MCC 0 0.7773 21.5 17.9 297 296 CARDIAC ARREST, UNEXPLAINED W CC 0 0.6120 19.5 16.3CMS-1498-P 1143

MSLTCDRG BaseMSLTCDRG MS-LTC-DRG Title FY 2009 LTCH Cases Proposed Relative Weight Proposed Geometric

Average Length of Stay Proposed Short-Stay

Outlier (SSO) Threshold 1 298 296 CARDIAC ARREST, UNEXPLAINED W/O CC/MCC 0 0.4418 16.9 14.1 299 299 PERIPHERAL VASCULAR DISORDERS W MCC 735 0.7976 23.7 19.8 300 299 PERIPHERAL VASCULAR DISORDERS W CC 696 0.5845 21.6 18.0 301 299 PERIPHERAL VASCULAR DISORDERS W/O CC/MCC 39 0.5156 20.0 16.7 302 302 ATHEROSCLEROSIS W MCC 49 0.8801 22.6 18.8 303 302 ATHEROSCLEROSIS W/O MCC 38 0.5651 21.5 17.9 304 304 HYPERTENSION W MCC 3 1.6495 36.4 30.3 305 304 HYPERTENSION W/O MCC 14 0.6280 20.9 17.4 306 306 CARDIAC CONGENITAL & VALVULAR DISORDERS W MCC 58 0.8633 24.3 20.3 307 306 CARDIAC CONGENITAL & VALVULAR DISORDERS W/O MCC 37 0.8144 24.4 20.3 308 308 CARDIAC ARRHYTHMIA & CONDUCTION DISORDERS W MCC 131 0.7120 20.7 17.3 309 308 CARDIAC ARRHYTHMIA & CONDUCTION DISORDERS W CC 55 0.5307 19.3 16.1 310 308 CARDIAC ARRHYTHMIA & CONDUCTION DISORDERS W/O CC/MCC 11 0.4878 18.1 15.1 311 311 ANGINA PECTORIS 1 0.8667 24.6 20.5 312 312 SYNCOPE & COLLAPSE 29 0.4995 17.3 14.4 313 313 CHEST PAIN 3 0.8667 24.6 20.5 314 314 OTHER CIRCULATORY SYSTEM DIAGNOSES W MCC 1,566 0.9068 23.1 19.3 315 314 OTHER CIRCULATORY SYSTEM DIAGNOSES W CC 314 0.6812 21.5 17.9 316 314 OTHER CIRCULATORY SYSTEM DIAGNOSES W/O CC/MCC 26 0.5394 19.2 16.0 326 326 STOMACH, ESOPHAGEAL & DUODENAL PROC W MCC 24 1.6495 36.4 30.3 327 326 STOMACH, ESOPHAGEAL & DUODENAL PROC W CC 3 0.8667 24.6 20.5 328 326 STOMACH, ESOPHAGEAL & DUODENAL PROC W/O CC/MCC 1 0.8667 24.6 20.5 329 329 MAJOR SMALL & LARGE BOWEL PROCEDURES W MCC 28 1.7888 41.2 34.3 330 329 MAJOR SMALL & LARGE BOWEL PROCEDURES W CC 8 1.6495 36.4 30.3 331 329 MAJOR SMALL & LARGE BOWEL PROCEDURES W/O CC/MCC 0 1.0834 28.9 24.1 332 332 RECTAL RESECTION W MCC 0 1.0834 28.9 24.1 333 332 RECTAL RESECTION W CC 0 0.8667 24.6 20.5 334 332 RECTAL RESECTION W/O CC/MCC 0 0.8667 24.6 20.5 335 335 PERITONEAL ADHESIOLYSIS W MCC 10 1.6495 36.4 30.3 336 335 PERITONEAL ADHESIOLYSIS W CC 1 1.0834 28.9 24.1 337 335 PERITONEAL ADHESIOLYSIS W/O CC/MCC 0 1.0834 28.9 24.1CMS-1498-P 1144

MSLTCDRG BaseMSLTCDRG MS-LTC-DRG Title FY 2009 LTCH Cases Proposed Relative Weight Proposed Geometric

Average Length of Stay Proposed Short-Stay

Outlier (SSO) Threshold 1
338 338 APPENDECTOMY W COMPLICATED PRINCIPAL DIAG W MCC 0 0.7254 22.0 18.3 339 338 APPENDECTOMY W COMPLICATED PRINCIPAL DIAG W CC 0 0.7254 22.0 18.3 340 338 APPENDECTOMY W COMPLICATED PRINCIPAL DIAG W/O CC/MCC 0 0.5065 17.1 14.3 341 341 APPENDECTOMY W/O COMPLICATED PRINCIPAL DIAG W MCC 0 0.9536 24.3 20.3 342 341 APPENDECTOMY W/O COMPLICATED PRINCIPAL DIAG W CC 0 0.7254 22.0 18.3 343 341 APPENDECTOMY W/O COMPLICATED PRINCIPAL DIAG W/O CC/MCC 0 0.5065 17.1 14.3 344 344 MINOR SMALL & LARGE BOWEL PROCEDURES W MCC* 1 1.0834 28.9 24.1 345 344 MINOR SMALL & LARGE BOWEL PROCEDURES W CC* 1 1.0834 28.9 24.1 346 344 MINOR SMALL & LARGE BOWEL PROCEDURES W/O CC/MCC 0 1.0834 28.9 24.1 347 347 ANAL & STOMAL PROCEDURES W MCC 3 1.0834 28.9 24.1 348 347 ANAL & STOMAL PROCEDURES W CC 2 0.8667 24.6 20.5 349 347 ANAL & STOMAL PROCEDURES W/O CC/MCC 0 0.8667 24.6 20.5 350 350 INGUINAL & FEMORAL HERNIA PROCEDURES W MCC 1 1.6495 36.4 30.3 351 350 INGUINAL & FEMORAL HERNIA PROCEDURES W CC 0 0.4878 18.1 15.1 352 350 INGUINAL & FEMORAL HERNIA PROCEDURES W/O CC/MCC 0 0.4878 18.1 15.1 353 353 HERNIA PROCEDURES EXCEPT INGUINAL & FEMORAL W MCC 3 1.0834 28.9 24.1 354 353 HERNIA PROCEDURES EXCEPT INGUINAL & FEMORAL W CC 1 0.4878 18.1 15.1 355 353 HERNIA PROCEDURES EXCEPT INGUINAL & FEMORAL W/O CC/MCC 0 0.4878 18.1 15.1 356 356 OTHER DIGESTIVE SYSTEM O.R. PROCEDURES W MCC 141 1.7106 35.6 29.7 357 356 OTHER DIGESTIVE SYSTEM O.R. PROCEDURES W CC 26 1.1300 29.0 24.2 358 356 OTHER DIGESTIVE SYSTEM O.R. PROCEDURES W/O CC/MCC 3 1.0834 28.9 24.1 368 368 MAJOR ESOPHAGEAL DISORDERS W MCC 34 1.0400 22.4 18.7 369 368 MAJOR ESOPHAGEAL DISORDERS W CC 12 0.6280 20.9 17.4 370 368 MAJOR ESOPHAGEAL DISORDERS W/O CC/MCC* 1 0.6280 20.9 17.4 371 371 MAJOR GASTROINTESTINAL DISORDERS & PERITONEAL INFECTIONS W MCC 949 0.9536 24.3 20.3 372 371 MAJOR GASTROINTESTINAL DISORDERS & PERITONEAL INFECTIONS W CC 342 0.7254 22.0 18.3 373 371 MAJOR GASTROINTESTINAL DISORDERS & PERITONEAL INFECTIONS W/O CC/MCC 31 0.5065 17.1 14.3CMS-1498-P 1145

MSLTCDRG BaseMSLTCDRG MS-LTC-DRG Title FY 2009 LTCH Cases Proposed Relative Weight Proposed Geometric

Average Length of Stay Proposed Short-Stay

Outlier (SSO) Threshold 1
374 374 DIGESTIVE MALIGNANCY W MCC 101 0.8268 21.0 17.5 375 374 DIGESTIVE MALIGNANCY W CC 56 0.6770 21.3 17.8 376 374 DIGESTIVE MALIGNANCY W/O CC/MCC 3 0.4878 18.1 15.1 377 377 G.I. HEMORRHAGE W MCC 88 0.7978 22.5 18.8 378 377 G.I. HEMORRHAGE W CC 43 0.6163 21.3 17.8 379 377 G.I. HEMORRHAGE W/O CC/MCC 8 0.4878 18.1 15.1 380 380 COMPLICATED PEPTIC ULCER W MCC 22 1.0834 28.9 24.1 381 380 COMPLICATED PEPTIC ULCER W CC 17 0.8667 24.6 20.5 382 380 COMPLICATED PEPTIC ULCER W/O CC/MCC 1 0.8667 24.6 20.5 383 383 UNCOMPLICATED PEPTIC ULCER W MCC 9 0.4878 18.1 15.1 384 383 UNCOMPLICATED PEPTIC ULCER W/O MCC* 5 0.4878 18.1 15.1 385 385 INFLAMMATORY BOWEL DISEASE W MCC 32 0.9126 23.3 19.4 386 385 INFLAMMATORY BOWEL DISEASE W CC 26 0.7394 25.5 21.3 387 385 INFLAMMATORY BOWEL DISEASE W/O CC/MCC 2 0.4878 18.1 15.1 388 388 G.I. OBSTRUCTION W MCC 218 0.9443 23.4 19.5 389 388 G.I. OBSTRUCTION W CC 83 0.6325 19.8 16.5 390 388 G.I. OBSTRUCTION W/O CC/MCC 10 0.4878 18.1 15.1 391 391 ESOPHAGITIS, GASTROENT & MISC DIGEST DISORDERS W MCC 342 0.9298 23.1 19.3 392 391 ESOPHAGITIS, GASTROENT & MISC DIGEST DISORDERS W/O MCC 194 0.6310 19.9 16.6 393 393 OTHER DIGESTIVE SYSTEM DIAGNOSES W MCC 970 1.0710 25.8 21.5 394 393 OTHER DIGESTIVE SYSTEM DIAGNOSES W CC 389 0.7560 21.8 18.2 395 393 OTHER DIGESTIVE SYSTEM DIAGNOSES W/O CC/MCC 17 0.6280 20.9 17.4 405 405 PANCREAS, LIVER & SHUNT PROCEDURES W MCC 17 1.6495 36.4 30.3 406 405 PANCREAS, LIVER & SHUNT PROCEDURES W CC 2 1.0834 28.9 24.1 407 405 PANCREAS, LIVER & SHUNT PROCEDURES W/O CC/MCC 0 0.6280 20.9 17.4 408 408 BILIARY TRACT PROC EXCEPT ONLY CHOLECYST W OR W/O C.D.E. W MCC 1 1.6495 36.4 30.3 409 408 BILIARY TRACT PROC EXCEPT ONLY CHOLECYST W OR W/O C.D.E. W CC 1 1.0834 28.9 24.1 410 408 BILIARY TRACT PROC EXCEPT ONLY CHOLECYST W OR W/O C.D.E. W/O CC/MCC 0 0.6280 20.9 17.4 411 411 CHOLECYSTECTOMY W C.D.E. W MCC 1 1.6495 36.4 30.3 412 411 CHOLECYSTECTOMY W C.D.E. W CC 0 1.6495 36.4 30.3 413 411 CHOLECYSTECTOMY W C.D.E. W/O CC/MCC 0 0.6280 20.9 17.4 414 414 CHOLECYSTECTOMY EXCEPT BY LAPAROSCOPE W/O C.D.E. W MCC 0 1.6495 36.4 30.3 415 414 CHOLECYSTECTOMY EXCEPT BY LAPAROSCOPE W/O C.D.E. W CC 0 1.6495 36.4 30.3CMS-1498-P 1146

MSLTCDRG BaseMSLTCDRG MS-LTC-DRG Title FY 2009 LTCH Cases Proposed Relative Weight Proposed Geometric

Average Length of Stay Proposed Short-Stay

Outlier (SSO) Threshold 1
416 414 CHOLECYSTECTOMY EXCEPT BY LAPAROSCOPE W/O C.D.E. W/O CC/MCC 1 1.6495 36.4 30.3 417 417 LAPAROSCOPIC CHOLECYSTECTOMY W/O C.D.E. W MCC 10 1.6495 36.4 30.3 418 417 LAPAROSCOPIC CHOLECYSTECTOMY W/O C.D.E. W CC 2 1.6495 36.4 30.3 419 417 LAPAROSCOPIC CHOLECYSTECTOMY W/O C.D.E. W/O CC/MCC 1 0.6280 20.9 17.4 420 420 HEPATOBILIARY DIAGNOSTIC PROCEDURES W MCC 0 1.6495 36.4 30.3 421 420 HEPATOBILIARY DIAGNOSTIC PROCEDURES W CC 0 1.6495 36.4 30.3 422 420 HEPATOBILIARY DIAGNOSTIC PROCEDURES W/O CC/MCC 0 1.6495 36.4 30.3 423 423 OTHER HEPATOBILIARY OR PANCREAS O.R. PROCEDURES W MCC 17 1.6495 36.4 30.3 424 423 OTHER HEPATOBILIARY OR PANCREAS O.R. PROCEDURES W CC 3 1.6495 36.4 30.3 425 423 OTHER HEPATOBILIARY OR PANCREAS O.R. PROCEDURES W/O CC/MCC 0 1.6495 36.4 30.3 432 432 CIRRHOSIS & ALCOHOLIC HEPATITIS W MCC 80 0.6674 20.3 16.9 433 432 CIRRHOSIS & ALCOHOLIC HEPATITIS W CC 11 0.6280 20.9 17.4 434 432 CIRRHOSIS & ALCOHOLIC HEPATITIS W/O CC/MCC 0 0.6280 20.9 17.4 435 435 MALIGNANCY OF HEPATOBILIARY SYSTEM OR PANCREAS W MCC 41 0.8842 20.1 16.8 436 435 MALIGNANCY OF HEPATOBILIARY SYSTEM OR PANCREAS W CC 11 0.6280 20.9 17.4 437 435 MALIGNANCY OF HEPATOBILIARY SYSTEM OR PANCREAS W/O CC/MCC 1 0.4878 18.1 15.1 438 438 DISORDERS OF PANCREAS EXCEPT MALIGNANCY W MCC 310 1.0513 23.8 19.8 439 438 DISORDERS OF PANCREAS EXCEPT MALIGNANCY W CC 122 0.7550 21.1 17.6 440 438 DISORDERS OF PANCREAS EXCEPT MALIGNANCY W/O CC/MCC 13 0.4878 18.1 15.1 441 441 DISORDERS OF LIVER EXCEPT MALIG,CIRR,ALC HEPA W MCC 228 0.8011 22.2 18.5 442 441 DISORDERS OF LIVER EXCEPT MALIG,CIRR,ALC HEPA W CC* 72 0.7091 23.1 19.3 443 441 DISORDERS OF LIVER EXCEPT MALIG,CIRR,ALC HEPA W/O CC/MCC 8 0.7091 23.1 19.3 444 444 DISORDERS OF THE BILIARY TRACT W MCC 127 0.7728 21.5 17.9 445 444 DISORDERS OF THE BILIARY TRACT W CC* 47 0.5847 20.7 17.3 446 444 DISORDERS OF THE BILIARY TRACT W/O CC/MCC 12 0.5847 20.7 17.3 453 453 COMBINED ANTERIOR/POSTERIOR SPINAL FUSION W MCC 0 1.6495 36.4 30.3CMS-1498-P 1147

MSLTCDRG BaseMSLTCDRG MS-LTC-DRG Title FY 2009 LTCH Cases Proposed Relative Weight Proposed Geometric

Average Length of Stay Proposed Short-Stay

Outlier (SSO) Threshold 1
454 453 COMBINED ANTERIOR/POSTERIOR SPINAL FUSION W CC 0 1.6495 36.4 30.3 455 453 COMBINED ANTERIOR/POSTERIOR SPINAL FUSION W/O CC/MCC 0 1.0834 28.9 24.1 456 456 SPINAL FUS EXC CERV W SPINAL CURV/MALIG/INFEC OR 9+ FUS W MCC 2 1.6495 36.4 30.3 457 456 SPINAL FUS EXC CERV W SPINAL CURV/MALIG/INFEC OR 9+ FUS W CC 0 1.6495 36.4 30.3 458 456 SPINAL FUS EXC CERV W SPINAL CURV/MALIG/INFEC OR 9+ FUS W/O CC/MCC 0 1.0834 28.9 24.1 459 459 SPINAL FUSION EXCEPT CERVICAL W MCC 2 1.6495 36.4 30.3 460 459 SPINAL FUSION EXCEPT CERVICAL W/O MCC 1 1.0834 28.9 24.1 461 461 BILATERAL OR MULTIPLE MAJOR JOINT PROCS OF LOWER EXTREMITY W MCC 0 1.6495 36.4 30.3 462 461 BILATERAL OR MULTIPLE MAJOR JOINT PROCS OF LOWER EXTREMITY W/O MCC 0 1.6495 36.4 30.3 463 463 WND DEBRID & SKN GRFT EXC HAND, FOR MUSCULO-CONN TISS DIS W MCC 845 1.4194 39.1 32.6 464 463 WND DEBRID & SKN GRFT EXC HAND, FOR MUSCULO-CONN TISS DIS W CC 306 1.0953 34.3 28.6 465 463 WND DEBRID & SKN GRFT EXC HAND, FOR MUSCULO-CONN TISS DIS W/O CC/MCC 23 0.8667 24.6 20.5 466 466 REVISION OF HIP OR KNEE REPLACEMENT W MCC 4 1.6495 36.4 30.3 467 466 REVISION OF HIP OR KNEE REPLACEMENT W CC 1 0.8667 24.6 20.5 468 466 REVISION OF HIP OR KNEE REPLACEMENT W/O CC/MCC* 0 0.8667 24.6 20.5 469 469 MAJOR JOINT REPLACEMENT OR REATTACHMENT OF LOWER EXTREMITY W MCC 2 1.6495 36.4 30.3 470 469 MAJOR JOINT REPLACEMENT OR REATTACHMENT OF LOWER EXTREMITY W/O MCC 2 1.6495 36.4 30.3 471 471 CERVICAL SPINAL FUSION W MCC 0 1.0834 28.9 24.1 472 471 CERVICAL SPINAL FUSION W CC 1 1.0834 28.9 24.1 473 471 CERVICAL SPINAL FUSION W/O CC/MCC 0 1.0834 28.9 24.1 474 474 AMPUTATION FOR MUSCULOSKELETAL SYS & CONN TISSUE DIS W MCC 140 1.3860 36.9 30.8 475 474 AMPUTATION FOR MUSCULOSKELETAL SYS & CONN TISSUE DIS W CC 51 1.0993 34.1 28.4 476 474 AMPUTATION FOR MUSCULOSKELETAL SYS & CONN TISSUE DIS W/O CC/MCC 4 0.6280 20.9 17.4 477 477 BIOPSIES OF MUSCULOSKELETAL SYSTEM & CONNECTIVE TISSUE W MCC 32 1.3916 38.2 31.8 478 477 BIOPSIES OF MUSCULOSKELETAL SYSTEM & CONNECTIVE TISSUE W CC 13 1.0834 28.9 24.1 479 477 BIOPSIES OF MUSCULOSKELETAL SYSTEM & CONNECTIVE TISSUE W/O CC/MCC* 1 1.0834 28.9 24.1CMS-1498-P 1148

MSLTCDRG BaseMSLTCDRG MS-LTC-DRG Title FY 2009 LTCH Cases Proposed Relative Weight Proposed Geometric

Average Length of Stay Proposed Short-Stay

Outlier (SSO) Threshold 1
480 480 HIP & FEMUR PROCEDURES EXCEPT MAJOR JOINT W MCC* 13 1.6495 36.4 30.3 481 480 HIP & FEMUR PROCEDURES EXCEPT MAJOR JOINT W CC 6 1.6495 36.4 30.3 482 480 HIP & FEMUR PROCEDURES EXCEPT MAJOR JOINT W/O CC/MCC 1 1.6495 36.4 30.3 483 483 MAJOR JOINT & LIMB REATTACHMENT PROC OF UPPER EXTREMITY W CC/MCC 0 1.6495 36.4 30.3 484 483 MAJOR JOINT & LIMB REATTACHMENT PROC OF UPPER EXTREMITY W/O CC/MCC 0 1.6495 36.4 30.3 485 485 KNEE PROCEDURES W PDX OF INFECTION W MCC 11 1.0834 28.9 24.1 486 485 KNEE PROCEDURES W PDX OF INFECTION W CC 9 1.0834 28.9 24.1 487 485 KNEE PROCEDURES W PDX OF INFECTION W/O CC/MCC 2 0.6280 20.9 17.4 488 488 KNEE PROCEDURES W/O PDX OF INFECTION W CC/MCC 0 1.0834 28.9 24.1 489 488 KNEE PROCEDURES W/O PDX OF INFECTION W/O CC/MCC 0 0.6280 20.9 17.4 490 490 BACK & NECK PROC EXC SPINAL FUSION W CC/MCC OR DISC DEVICE/NEUROSTIM 9 1.0834 28.9 24.1 491 490 BACK & NECK PROC EXC SPINAL FUSION W/O CC/MCC 2 0.4878 18.1 15.1 492 492 LOWER EXTREM & HUMER PROC EXCEPT HIP,FOOT,FEMUR W MCC 11 1.6495 36.4 30.3 493 492 LOWER EXTREM & HUMER PROC EXCEPT HIP,FOOT,FEMUR W CC 17 1.6495 36.4 30.3 494 492 LOWER EXTREM & HUMER PROC EXCEPT HIP,FOOT,FEMUR W/O CC/MCC 1 0.8667 24.6 20.5 495 495 LOCAL EXCISION & REMOVAL INT FIX DEVICES EXC HIP & FEMUR W MCC 81 1.4624 37.6 31.3 496 495 LOCAL EXCISION & REMOVAL INT FIX DEVICES EXC HIP & FEMUR W CC 22 1.0834 28.9 24.1 497 495 LOCAL EXCISION & REMOVAL INT FIX DEVICES EXC HIP & FEMUR W/O CC/MCC 1 1.0834 28.9 24.1 498 498 LOCAL EXCISION & REMOVAL INT FIX DEVICES OF HIP & FEMUR W CC/MCC 18 1.6495 36.4 30.3 499 498 LOCAL EXCISION & REMOVAL INT FIX DEVICES OF HIP & FEMUR W/O CC/MCC 1 0.8667 24.6 20.5 500 500 SOFT TISSUE PROCEDURES W MCC 129 1.3544 36.4 30.3 501 500 SOFT TISSUE PROCEDURES W CC 38 0.9664 30.7 25.6 502 500 SOFT TISSUE PROCEDURES W/O CC/MCC 5 0.6280 20.9 17.4 503 503 FOOT PROCEDURES W MCC* 33 1.0106 31.5 26.3 504 503 FOOT PROCEDURES W CC 22 1.0106 31.5 26.3 505 503 FOOT PROCEDURES W/O CC/MCC 2 1.0106 31.5 26.3 506 506 MAJOR THUMB OR JOINT PROCEDURES 1 0.8667 24.6 20.5 507 507 MAJOR SHOULDER OR ELBOW JOINT PROCEDURES W CC/MCC 2 1.6495 36.4 30.3CMS-1498-P 1149

MSLTCDRG BaseMSLTCDRG MS-LTC-DRG Title FY 2009 LTCH Cases Proposed Relative Weight Proposed Geometric

Average Length of Stay Proposed Short-Stay

Outlier (SSO) Threshold 1
508 507 MAJOR SHOULDER OR ELBOW JOINT PROCEDURES W/O CC/MCC 0 0.8667 24.6 20.5 509 509 ARTHROSCOPY 2 1.6495 36.4 30.3 510 510 SHOULDER,ELBOW OR FOREARM PROC,EXC MAJOR JOINT PROC W MCC 0 1.3468 31.7 26.4 511 510 SHOULDER,ELBOW OR FOREARM PROC,EXC MAJOR JOINT PROC W CC 0 0.8667 24.6 20.5 512 510 SHOULDER,ELBOW OR FOREARM PROC,EXC MAJOR JOINT PROC W/O CC/MCC 0 0.8667 24.6 20.5 513 513 HAND OR WRIST PROC, EXCEPT MAJOR THUMB OR JOINT PROC W CC/MCC 8 1.0834 28.9 24.1 514 513 HAND OR WRIST PROC, EXCEPT MAJOR THUMB OR JOINT PROC W/O CC/MCC 0 0.8667 24.6 20.5 515 515 OTHER MUSCULOSKELET SYS & CONN TISS O.R. PROC W MCC 83 1.3468 31.7 26.4 516 515 OTHER MUSCULOSKELET SYS & CONN TISS O.R. PROC W CC 23 0.8667 24.6 20.5 517 515 OTHER MUSCULOSKELET SYS & CONN TISS O.R. PROC W/O CC/MCC* 5 0.8667 24.6 20.5 533 533 FRACTURES OF FEMUR W MCC 3 1.0834 28.9 24.1 534 533 FRACTURES OF FEMUR W/O MCC 1 1.0834 28.9 24.1 535 535 FRACTURES OF HIP & PELVIS W MCC 26 0.7420 25.4 21.2 536 535 FRACTURES OF HIP & PELVIS W/O MCC 13 0.6280 20.9 17.4 537 537 SPRAINS, STRAINS, & DISLOCATIONS OF HIP, PELVIS & THIGH W CC/MCC 1 0.4878 18.1 15.1 538 537 SPRAINS, STRAINS, & DISLOCATIONS OF HIP, PELVIS & THIGH W/O CC/MCC 0 0.4878 18.1 15.1 539 539 OSTEOMYELITIS W MCC 1,932 1.0093 30.7 25.6 540 539 OSTEOMYELITIS W CC 962 0.7936 27.5 22.9 541 539 OSTEOMYELITIS W/O CC/MCC 148 0.6821 24.4 20.3 542 542 PATHOLOGICAL FRACTURES & MUSCULOSKELET & CONN TISS MALIG W MCC 37 0.9292 21.9 18.3 543 542 PATHOLOGICAL FRACTURES & MUSCULOSKELET & CONN TISS MALIG W CC 25 0.6938 22.1 18.4 544 542 PATHOLOGICAL FRACTURES & MUSCULOSKELET & CONN TISS MALIG W/O CC/MCC 4 0.6280 20.9 17.4 545 545 CONNECTIVE TISSUE DISORDERS W MCC 61 0.8812 21.8 18.2 546 545 CONNECTIVE TISSUE DISORDERS W CC 47 0.7162 24.1 20.1 547 545 CONNECTIVE TISSUE DISORDERS W/O CC/MCC 2 0.4878 18.1 15.1 548 548 SEPTIC ARTHRITIS W MCC 260 0.9215 27.2 22.7 549 548 SEPTIC ARTHRITIS W CC 214 0.7472 26.6 22.2 550 548 SEPTIC ARTHRITIS W/O CC/MCC 39 0.5739 25.1 20.9 551 551 MEDICAL BACK PROBLEMS W MCC 130 0.9177 26.4 22.0 552 551 MEDICAL BACK PROBLEMS W/O MCC 116 0.5946 21.7 18.1 553 553 BONE DISEASES & ARTHROPATHIES W MCC 6 0.4878 18.1 15.1CMS-1498-P 1150

MSLTCDRG BaseMSLTCDRG MS-LTC-DRG Title FY 2009 LTCH Cases Proposed Relative Weight Proposed Geometric

Average Length of Stay Proposed Short-Stay

Outlier (SSO) Threshold 1
554 553 BONE DISEASES & ARTHROPATHIES W/O MCC* 17 0.4878 18.1 15.1 555 555 SIGNS & SYMPTOMS OF MUSCULOSKELETAL SYSTEM & CONN TISSUE W MCC* 15 0.6280 20.9 17.4 556 555 SIGNS & SYMPTOMS OF MUSCULOSKELETAL SYSTEM & CONN TISSUE W/O MCC 12 0.6280 20.9 17.4 557 557 TENDONITIS, MYOSITIS & BURSITIS W MCC 114 0.8794 26.1 21.8 558 557 TENDONITIS, MYOSITIS & BURSITIS W/O MCC 109 0.6295 21.9 18.3 559 559 AFTERCARE, MUSCULOSKELETAL SYSTEM & CONNECTIVE TISSUE W MCC 1,722 0.8472 25.6 21.3 560 559 AFTERCARE, MUSCULOSKELETAL SYSTEM & CONNECTIVE TISSUE W CC 1,411 0.6950 24.9 20.8 561 559 AFTERCARE, MUSCULOSKELETAL SYSTEM & CONNECTIVE TISSUE W/O CC/MCC 243 0.5788 23.0 19.2 562 562 FX, SPRN, STRN & DISL EXCEPT FEMUR, HIP, PELVIS & THIGH W MCC 13 0.8667 24.6 20.5 563 562 FX, SPRN, STRN & DISL EXCEPT FEMUR, HIP, PELVIS & THIGH W/O MCC 14 0.8667 24.6 20.5 564 564 OTHER MUSCULOSKELETAL SYS & CONNECTIVE TISSUE DIAGNOSES W MCC 384 0.8675 23.5 19.6 565 564 OTHER MUSCULOSKELETAL SYS & CONNECTIVE TISSUE DIAGNOSES W CC 207 0.6727 22.6 18.8 566 564 OTHER MUSCULOSKELETAL SYS & CONNECTIVE TISSUE DIAGNOSES W/O CC/MCC 25 0.5464 19.5 16.3 573 573 SKIN GRAFT &/OR DEBRID FOR SKN ULCER OR CELLULITIS W MCC 1,862 1.3702 38.2 31.8 574 573 SKIN GRAFT &/OR DEBRID FOR SKN ULCER OR CELLULITIS W CC 1,163 1.0312 34.5 28.8 575 573 SKIN GRAFT &/OR DEBRID FOR SKN ULCER OR CELLULITIS W/O CC/MCC 77 0.7628 28.0 23.3 576 576 SKIN GRAFT &/OR DEBRID EXC FOR SKIN ULCER OR CELLULITIS W MCC 44 1.4531 38.4 32.0 577 576 SKIN GRAFT &/OR DEBRID EXC FOR SKIN ULCER OR CELLULITIS W CC 26 0.9545 30.8 25.7 578 576 SKIN GRAFT &/OR DEBRID EXC FOR SKIN ULCER OR CELLULITIS W/O CC/MCC 3 0.4878 18.1 15.1 579 579 OTHER SKIN, SUBCUT TISS & BREAST PROC W MCC 626 1.3095 35.4 29.5 580 579 OTHER SKIN, SUBCUT TISS & BREAST PROC W CC 315 0.9380 31.5 26.3 581 579 OTHER SKIN, SUBCUT TISS & BREAST PROC W/O CC/MCC 12 0.8667 24.6 20.5 582 582 MASTECTOMY FOR MALIGNANCY W CC/MCC 0 1.6495 36.4 30.3 583 582 MASTECTOMY FOR MALIGNANCY W/O CC/MCC 0 0.5998 20.1 16.8CMS-1498-P 1151

MSLTCDRG BaseMSLTCDRG MS-LTC-DRG Title FY 2009 LTCH Cases Proposed Relative Weight Proposed Geometric

Average Length of Stay Proposed Short-Stay

Outlier (SSO) Threshold 1 584 584 BREAST BIOPSY, LOCAL EXCISION & OTHER BREAST PROCEDURES W CC/MCC 4 0.6280 20.9 17.4 585 584 BREAST BIOPSY, LOCAL EXCISION & OTHER BREAST PROCEDURES W/O CC/MCC 0 0.6016 22.3 18.6 592 592 SKIN ULCERS W MCC 3,450 0.9187 26.5 22.1 593 592 SKIN ULCERS W CC 2,181 0.6858 25.1 20.9 594 592 SKIN ULCERS W/O CC/MCC 151 0.5644 23.1 19.3 595 595 MAJOR SKIN DISORDERS W MCC 48 0.9095 24.7 20.6 596 595 MAJOR SKIN DISORDERS W/O MCC 33 0.5998 20.1 16.8 597 597 MALIGNANT BREAST DISORDERS W MCC 15 1.6495 36.4 30.3 598 597 MALIGNANT BREAST DISORDERS W CC 11 0.6280 20.9 17.4 599 597 MALIGNANT BREAST DISORDERS W/O CC/MCC 0 0.4878 18.1 15.1 600 600 NON-MALIGNANT BREAST DISORDERS W CC/MCC 29 0.6625 24.0 20.0 601 600 NON-MALIGNANT BREAST DISORDERS W/O CC/MCC 5 0.4878 18.1 15.1 602 602 CELLULITIS W MCC 1,133 0.7276 22.1 18.4 603 602 CELLULITIS W/O MCC 1,519 0.5291 19.1 15.9 604 604 TRAUMA TO THE SKIN, SUBCUT TISS & BREAST W MCC 37 0.6494 23.4 19.5 605 604 TRAUMA TO THE SKIN, SUBCUT TISS & BREAST W/O MCC 50 0.6016 22.3 18.6 606 606 MINOR SKIN DISORDERS W MCC 94 0.8380 22.8 19.0 607 606 MINOR SKIN DISORDERS W/O MCC 98 0.5684 20.2 16.8 614 614 ADRENAL & PITUITARY PROCEDURES W CC/MCC 0 0.9743 28.6 23.8 615 614 ADRENAL & PITUITARY PROCEDURES W/O CC/MCC 0 0.8667 24.6 20.5 616 616 AMPUTAT OF LOWER LIMB FOR ENDOCRINE,NUTRIT,& METABOL DIS W MCC 104 1.5785 39.7 33.1 617 616 AMPUTAT OF LOWER LIMB FOR ENDOCRINE,NUTRIT,& METABOL DIS W CC 115 1.0153 31.1 25.9 618 616 AMPUTAT OF LOWER LIMB FOR ENDOCRINE,NUTRIT,& METABOL DIS W/O CC/MCC 0 1.0153 31.1 25.9 619 619 O.R. PROCEDURES FOR OBESITY W MCC 3 1.0834 28.9 24.1 620 619 O.R. PROCEDURES FOR OBESITY W CC 0 1.0834 28.9 24.1 621 619 O.R. PROCEDURES FOR OBESITY W/O CC/MCC 0 1.0834 28.9 24.1 622 622 SKIN GRAFTS & WOUND DEBRID FOR ENDOC, NUTRIT & METAB DIS W MCC 261 1.2544 35.9 29.9 623 622 SKIN GRAFTS & WOUND DEBRID FOR ENDOC, NUTRIT & METAB DIS W CC 352 0.9977 30.8 25.7 624 622 SKIN GRAFTS & WOUND DEBRID FOR ENDOC, NUTRIT & METAB DIS W/O CC/MCC 9 0.6280 20.9 17.4 625 625 THYROID, PARATHYROID & THYROGLOSSAL PROCEDURES W MCC 1 0.6280 20.9 17.4CMS-1498-P 1152

MSLTCDRG BaseMSLTCDRG MS-LTC-DRG Title FY 2009 LTCH Cases Proposed Relative Weight Proposed Geometric

Average Length of Stay Proposed Short-Stay

Outlier (SSO) Threshold 1 626 625 THYROID, PARATHYROID & THYROGLOSSAL PROCEDURES W CC* 0 0.6280 20.9 17.4 627 625 THYROID, PARATHYROID & THYROGLOSSAL PROCEDURES W/O CC/MCC* 0 0.6280 20.9 17.4 628 628 OTHER ENDOCRINE, NUTRIT & METAB O.R. PROC W MCC 68 1.2313 32.7 27.3 629 628 OTHER ENDOCRINE, NUTRIT & METAB O.R. PROC W CC 108 0.9743 28.6 23.8 630 628 OTHER ENDOCRINE, NUTRIT & METAB O.R. PROC W/O CC/MCC 3 0.8667 24.6 20.5 637 637 DIABETES W MCC 687 0.8949 26.2 21.8 638 637 DIABETES W CC 1,035 0.7071 23.4 19.5 639 637 DIABETES W/O CC/MCC 32 0.4679 20.0 16.7 640 640 NUTRITIONAL & MISC METABOLIC DISORDERS W MCC 678 0.8741 23.1 19.3 641 640 NUTRITIONAL & MISC METABOLIC DISORDERS W/O MCC 465 0.6222 20.6 17.2 642 642 INBORN ERRORS OF METABOLISM 5 1.0834 28.9 24.1 643 643 ENDOCRINE DISORDERS W MCC 17 0.6280 20.9 17.4 644 643 ENDOCRINE DISORDERS W CC 18 0.6280 20.9 17.4 645 643 ENDOCRINE DISORDERS W/O CC/MCC 4 0.4878 18.1 15.1 652 652 KIDNEY TRANSPLANT 0 0.0000 0.0 0.0 653 653 MAJOR BLADDER PROCEDURES W MCC 1 1.6495 36.4 30.3 654 653 MAJOR BLADDER PROCEDURES W CC 0 1.0834 28.9 24.1 655 653 MAJOR BLADDER PROCEDURES W/O CC/MCC 0 1.0834 28.9 24.1 656 656 KIDNEY & URETER PROCEDURES FOR NEOPLASM W MCC 1 0.4878 18.1 15.1 657 656 KIDNEY & URETER PROCEDURES FOR NEOPLASM W CC 0 0.4878 18.1 15.1 658 656 KIDNEY & URETER PROCEDURES FOR NEOPLASM W/O CC/MCC 0 0.4878 18.1 15.1659 659 KIDNEY & URETER PROCEDURES FOR NONNEOPLASM W MCC* 4 1.0834 28.9 24.1660 659 KIDNEY & URETER PROCEDURES FOR NONNEOPLASM W CC 4 1.0834 28.9 24.1661 659 KIDNEY & URETER PROCEDURES FOR NONNEOPLASM W/O CC/MCC 0 1.0834 28.9 24.1 662 662 MINOR BLADDER PROCEDURES W MCC 0 1.0834 28.9 24.1 663 662 MINOR BLADDER PROCEDURES W CC 1 1.0834 28.9 24.1 664 662 MINOR BLADDER PROCEDURES W/O CC/MCC 0 1.0834 28.9 24.1 665 665 PROSTATECTOMY W MCC 2 1.0834 28.9 24.1 666 665 PROSTATECTOMY W CC 0 1.0834 28.9 24.1 667 665 PROSTATECTOMY W/O CC/MCC 0 1.0834 28.9 24.1 668 668 TRANSURETHRAL PROCEDURES W MCC 9 1.0834 28.9 24.1 669 668 TRANSURETHRAL PROCEDURES W CC 1 0.6280 20.9 17.4 670 668 TRANSURETHRAL PROCEDURES W/O CC/MCC 0 0.6280 20.9 17.4 671 671 URETHRAL PROCEDURES W CC/MCC 3 0.8667 24.6 20.5CMS-1498-P 1153

MSLTCDRG BaseMSLTCDRG MS-LTC-DRG Title FY 2009 LTCH Cases Proposed Relative Weight Proposed Geometric

Average Length of Stay Proposed Short-Stay

Outlier (SSO) Threshold 1
672 671 URETHRAL PROCEDURES W/O CC/MCC 0 0.8667 24.6 20.5 673 673 OTHER KIDNEY & URINARY TRACT PROCEDURES W MCC 212 1.3836 32.9 27.4 674 673 OTHER KIDNEY & URINARY TRACT PROCEDURES W CC 44 0.9783 27.9 23.3 675 673 OTHER KIDNEY & URINARY TRACT PROCEDURES W/O CC/MCC 3 0.8667 24.6 20.5 682 682 RENAL FAILURE W MCC 1,584 0.9085 23.1 19.3 683 682 RENAL FAILURE W CC 538 0.6892 21.0 17.5 684 682 RENAL FAILURE W/O CC/MCC 28 0.6199 17.1 14.3 685 685 ADMIT FOR RENAL DIALYSIS 1 1.0834 28.9 24.1 686 686 KIDNEY & URINARY TRACT NEOPLASMS W MCC 15 0.8667 24.6 20.5 687 686 KIDNEY & URINARY TRACT NEOPLASMS W CC 14 0.6280 20.9 17.4 688 686 KIDNEY & URINARY TRACT NEOPLASMS W/O CC/MCC 0 0.6280 20.9 17.4 689 689 KIDNEY & URINARY TRACT INFECTIONS W MCC 942 0.6715 21.7 18.1 690 689 KIDNEY & URINARY TRACT INFECTIONS W/O MCC 682 0.5198 19.3 16.1 691 691 URINARY STONES W ESW LITHOTRIPSY W CC/MCC 0 0.8667 24.6 20.5 692 691 URINARY STONES W ESW LITHOTRIPSY W/O CC/MCC 0 0.4878 18.1 15.1 693 693 URINARY STONES W/O ESW LITHOTRIPSY W MCC 11 0.8667 24.6 20.5 694 693 URINARY STONES W/O ESW LITHOTRIPSY W/O MCC 1 0.4878 18.1 15.1 695 695 KIDNEY & URINARY TRACT SIGNS & SYMPTOMS W MCC 5 0.8667 24.6 20.5 696 695 KIDNEY & URINARY TRACT SIGNS & SYMPTOMS W/O MCC 4 0.4878 18.1 15.1 697 697 URETHRAL STRICTURE 1 0.8667 24.6 20.5 698 698 OTHER KIDNEY & URINARY TRACT DIAGNOSES W MCC 345 0.8846 22.9 19.1 699 698 OTHER KIDNEY & URINARY TRACT DIAGNOSES W CC 134 0.6313 20.2 16.8 700 698 OTHER KIDNEY & URINARY TRACT DIAGNOSES W/O CC/MCC 11 0.6280 20.9 17.4 707 707 MAJOR MALE PELVIC PROCEDURES W CC/MCC 0 1.0834 28.9 24.1 708 707 MAJOR MALE PELVIC PROCEDURES W/O CC/MCC 0 1.0834 28.9 24.1 709 709 PENIS PROCEDURES W CC/MCC 5 1.0834 28.9 24.1 710 709 PENIS PROCEDURES W/O CC/MCC 1 0.6280 20.9 17.4 711 711 TESTES PROCEDURES W CC/MCC 5 1.0834 28.9 24.1 712 711 TESTES PROCEDURES W/O CC/MCC 0 1.0834 28.9 24.1CMS-1498-P 1154

MSLTCDRG BaseMSLTCDRG MS-LTC-DRG Title FY 2009 LTCH Cases Proposed Relative Weight Proposed Geometric

Average Length of Stay Proposed Short-Stay

Outlier (SSO) Threshold 1
713 713 TRANSURETHRAL PROSTATECTOMY W CC/MCC 4 0.8667 24.6 20.5 714 713 TRANSURETHRAL PROSTATECTOMY W/O CC/MCC 0 0.6280 20.9 17.4 715 715 OTHER MALE REPRODUCTIVE SYSTEM O.R. PROC FOR MALIGNANCY W CC/MCC 0 1.6495 36.4 30.3 716 715 OTHER MALE REPRODUCTIVE SYSTEM O.R. PROC FOR MALIGNANCY W/O CC/MCC 0 1.0834 28.9 24.1 717 717 OTHER MALE REPRODUCTIVE SYSTEM O.R. PROC EXC MALIGNANCY W CC/MCC 11 1.6495 36.4 30.3 718 717 OTHER MALE REPRODUCTIVE SYSTEM O.R. PROC EXC MALIGNANCY W/O CC/MCC 1 1.0834 28.9 24.1 722 722 MALIGNANCY, MALE REPRODUCTIVE SYSTEM W MCC 8 1.0834 28.9 24.1 723 722 MALIGNANCY, MALE REPRODUCTIVE SYSTEM W CC 9 0.6280 20.9 17.4 724 722 MALIGNANCY, MALE REPRODUCTIVE SYSTEM W/O CC/MCC 0 0.6280 20.9 17.4 725 725 BENIGN PROSTATIC HYPERTROPHY W MCC 2 1.6495 36.4 30.3 726 725 BENIGN PROSTATIC HYPERTROPHY W/O MCC 1 0.8667 24.6 20.5 727 727 INFLAMMATION OF THE MALE REPRODUCTIVE SYSTEM W MCC 75 0.8106 22.6 18.8 728 727 INFLAMMATION OF THE MALE REPRODUCTIVE SYSTEM W/O MCC 57 0.5026 17.3 14.4 729 729 OTHER MALE REPRODUCTIVE SYSTEM DIAGNOSES W CC/MCC 68 0.8981 26.5 22.1 730 729 OTHER MALE REPRODUCTIVE SYSTEM DIAGNOSES W/O CC/MCC 3 0.4878 18.1 15.1 734 734 PELVIC EVISCERATION, RAD HYSTERECTOMY & RAD VULVECTOMY W CC/MCC 0 1.0834 28.9 24.1 735 734 PELVIC EVISCERATION, RAD HYSTERECTOMY & RAD VULVECTOMY W/O CC/MCC 0 1.0834 28.9 24.1 736 736 UTERINE & ADNEXA PROC FOR OVARIAN OR ADNEXAL MALIGNANCY W MCC 0 1.0834 28.9 24.1 737 736 UTERINE & ADNEXA PROC FOR OVARIAN OR ADNEXAL MALIGNANCY W CC 0 0.6280 20.9 17.4 738 736 UTERINE & ADNEXA PROC FOR OVARIAN OR ADNEXAL MALIGNANCY W/O CC/MCC 0 0.6280 20.9 17.4739 739 UTERINE,ADNEXA PROC FOR NONOVARIAN/ADNEXAL MALIG W MCC 0 1.2313 32.7 27.3740 739 UTERINE,ADNEXA PROC FOR NONOVARIAN/ADNEXAL MALIG W CC* 0 0.9743 28.6 23.8741 739 UTERINE,ADNEXA PROC FOR NONOVARIAN/ADNEXAL MALIG W/O CC/MCC 0 0.8667 24.6 20.5742 742 UTERINE & ADNEXA PROC FOR NONMALIGNANCY W CC/MCC* 0 0.9743 28.6 23.8CMS-1498-P 1155

MSLTCDRG BaseMSLTCDRG MS-LTC-DRG Title FY 2009 LTCH Cases Proposed Relative Weight Proposed Geometric

Average Length of Stay Proposed Short-Stay

Outlier (SSO) Threshold 1
743 742 UTERINE & ADNEXA PROC FOR NONMALIGNANCY W/O CC/MCC 0 0.8667 24.6 20.5 744 744 D&C, CONIZATION, LAPAROSCOPY & TUBAL INTERRUPTION W CC/MCC 0 1.0834 28.9 24.1 745 744 D&C, CONIZATION, LAPAROSCOPY & TUBAL INTERRUPTION W/O CC/MCC 0 1.0834 28.9 24.1 746 746 VAGINA, CERVIX & VULVA PROCEDURES W CC/MCC 4 1.0834 28.9 24.1 747 746 VAGINA, CERVIX & VULVA PROCEDURES W/O CC/MCC 0 1.0834 28.9 24.1 748 748 FEMALE REPRODUCTIVE SYSTEM RECONSTRUCTIVE PROCEDURES 0 1.0834 28.9 24.1 749 749 OTHER FEMALE REPRODUCTIVE SYSTEM O.R. PROCEDURES W CC/MCC 7 1.0834 28.9 24.1 750 749 OTHER FEMALE REPRODUCTIVE SYSTEM O.R. PROCEDURES W/O CC/MCC 0 1.0834 28.9 24.1 754 754 MALIGNANCY, FEMALE REPRODUCTIVE SYSTEM W MCC 17 1.0834 28.9 24.1 755 754 MALIGNANCY, FEMALE REPRODUCTIVE SYSTEM W CC 11 0.6280 20.9 17.4 756 754 MALIGNANCY, FEMALE REPRODUCTIVE SYSTEM W/O CC/MCC* 0 0.6279 20.9 17.4 757 757 INFECTIONS, FEMALE REPRODUCTIVE SYSTEM W MCC 72 0.7744 24.6 20.5 758 757 INFECTIONS, FEMALE REPRODUCTIVE SYSTEM W CC 40 0.6839 23.9 19.9 759 757 INFECTIONS, FEMALE REPRODUCTIVE SYSTEM W/O CC/MCC 7 0.4878 18.1 15.1 760 760 MENSTRUAL & OTHER FEMALE REPRODUCTIVE SYSTEM DISORDERS W CC/MCC* 4 0.8667 24.6 20.5 761 760 MENSTRUAL & OTHER FEMALE REPRODUCTIVE SYSTEM DISORDERS W/O CC/MCC* 2 0.8667 24.6 20.5 765 765 CESAREAN SECTION W CC/MCC 0 1.0834 28.9 24.1 766 765 CESAREAN SECTION W/O CC/MCC 0 1.0834 28.9 24.1 767 767 VAGINAL DELIVERY W STERILIZATION &/OR D&C 0 1.0834 28.9 24.1 768 768 VAGINAL DELIVERY W O.R. PROC EXCEPT STERIL &/OR D&C 0 1.0834 28.9 24.1 769 769 POSTPARTUM & POST ABORTION DIAGNOSES W O.R. PROCEDURE 2 1.6495 36.4 30.3 770 770 ABORTION W D&C, ASPIRATION CURETTAGE OR HYSTEROTOMY 0 1.0834 28.9 24.1 774 774 VAGINAL DELIVERY W COMPLICATING DIAGNOSES 0 1.0834 28.9 24.1 775 775 VAGINAL DELIVERY W/O COMPLICATING DIAGNOSES 0 1.0834 28.9 24.1CMS-1498-P 1156

MSLTCDRG BaseMSLTCDRG MS-LTC-DRG Title FY 2009 LTCH Cases Proposed Relative Weight Proposed Geometric

Average Length of Stay Proposed Short-Stay

Outlier (SSO) Threshold 1
776 776 POSTPARTUM & POST ABORTION DIAGNOSES W/O O.R. PROCEDURE 1 0.6280 20.9 17.4 777 777 ECTOPIC PREGNANCY 0 0.6280 20.9 17.4 778 778 THREATENED ABORTION 0 0.6280 20.9 17.4 779 779 ABORTION W/O D&C 0 0.6280 20.9 17.4 780 780 FALSE LABOR 0 0.6280 20.9 17.4 781 781 OTHER ANTEPARTUM DIAGNOSES W MEDICAL COMPLICATIONS 3 0.4878 18.1 15.1 782 782 OTHER ANTEPARTUM DIAGNOSES W/O MEDICAL COMPLICATIONS 0 0.4878 18.1 15.1 789 789 NEONATES, DIED OR TRANSFERRED TO ANOTHER ACUTE CARE FACILITY 0 0.4878 18.1 15.1 790 790 EXTREME IMMATURITY OR RESPIRATORY DISTRESS SYNDROME, NEONATE 0 0.4878 18.1 15.1 791 791 PREMATURITY W MAJOR PROBLEMS 0 0.4878 18.1 15.1 792 792 PREMATURITY W/O MAJOR PROBLEMS 0 0.4878 18.1 15.1 793 793 FULL TERM NEONATE W MAJOR PROBLEMS 0 0.4878 18.1 15.1 794 794 NEONATE W OTHER SIGNIFICANT PROBLEMS 0 0.4878 18.1 15.1 795 795 NORMAL NEWBORN 0 0.4878 18.1 15.1 799 799 SPLENECTOMY W MCC 0 1.0834 28.9 24.1 800 799 SPLENECTOMY W CC 0 1.0834 28.9 24.1 801 799 SPLENECTOMY W/O CC/MCC 0 1.0834 28.9 24.1 802 802 OTHER O.R. PROC OF THE BLOOD & BLOOD FORMING ORGANS W MCC 1 1.0834 28.9 24.1 803 802 OTHER O.R. PROC OF THE BLOOD & BLOOD FORMING ORGANS W CC 0 1.0834 28.9 24.1 804 802 OTHER O.R. PROC OF THE BLOOD & BLOOD FORMING ORGANS W/O CC/MCC 0 1.0834 28.9 24.1 808 808 MAJOR HEMATOL/IMMUN DIAG EXC SICKLE CELL CRISIS & COAGUL W MCC 12 0.8667 24.6 20.5 809 808 MAJOR HEMATOL/IMMUN DIAG EXC SICKLE CELL CRISIS & COAGUL W CC 14 0.6280 20.9 17.4 810 808 MAJOR HEMATOL/IMMUN DIAG EXC SICKLE CELL CRISIS & COAGUL W/O CC/MCC 0 0.5578 19.4 16.2 811 811 RED BLOOD CELL DISORDERS W MCC 65 0.8441 21.1 17.6 812 811 RED BLOOD CELL DISORDERS W/O MCC 38 0.5578 19.4 16.2 813 813 COAGULATION DISORDERS 35 0.7443 20.8 17.3 814 814 RETICULOENDOTHELIAL & IMMUNITY DISORDERS W MCC 29 0.8803 24.8 20.7 815 814 RETICULOENDOTHELIAL & IMMUNITY DISORDERS W CC 14 0.6280 20.9 17.4 816 814 RETICULOENDOTHELIAL & IMMUNITY DISORDERS W/O CC/MCC 0 0.6280 20.9 17.4 820 820 LYMPHOMA & LEUKEMIA W MAJOR O.R. PROCEDURE W MCC 0 0.4878 18.1 15.1 821 820 LYMPHOMA & LEUKEMIA W MAJOR O.R. PROCEDURE W CC 1 0.4878 18.1 15.1CMS-1498-P 1157

MSLTCDRG BaseMSLTCDRG MS-LTC-DRG Title FY 2009 LTCH Cases Proposed Relative Weight Proposed Geometric

Average Length of Stay Proposed Short-Stay

Outlier (SSO) Threshold 1
822 820 LYMPHOMA & LEUKEMIA W MAJOR O.R. PROCEDURE W/O CC/MCC 0 0.4878 18.1 15.1 823 823 LYMPHOMA & NON-ACUTE LEUKEMIA W OTHER O.R. PROC W MCC 3 1.6495 36.4 30.3 824 823 LYMPHOMA & NON-ACUTE LEUKEMIA W OTHER O.R. PROC W CC 1 0.4878 18.1 15.1 825 823 LYMPHOMA & NON-ACUTE LEUKEMIA W OTHER O.R. PROC W/O CC/MCC 0 0.4878 18.1 15.1 826 826 MYELOPROLIF DISORD OR POORLY DIFF NEOPL W MAJ O.R. PROC W MCC 0 0.8667 24.6 20.5 827 826 MYELOPROLIF DISORD OR POORLY DIFF NEOPL W MAJ O.R. PROC W CC 1 0.8667 24.6 20.5 828 826 MYELOPROLIF DISORD OR POORLY DIFF NEOPL W MAJ O.R. PROC W/O CC/MCC 0 0.8667 24.6 20.5 829 829 MYELOPROLIF DISORD OR POORLY DIFF NEOPL W OTHER O.R. PROC W CC/MCC 7 1.6495 36.4 30.3 830 829 MYELOPROLIF DISORD OR POORLY DIFF NEOPL W OTHER O.R. PROC W/O CC/MCC 0 1.6495 36.4 30.3 834 834 ACUTE LEUKEMIA W/O MAJOR O.R. PROCEDURE W MCC 22 0.8667 24.6 20.5 835 834 ACUTE LEUKEMIA W/O MAJOR O.R. PROCEDURE W CC 12 0.8667 24.6 20.5 836 834 ACUTE LEUKEMIA W/O MAJOR O.R. PROCEDURE W/O CC/MCC 1 0.6280 20.9 17.4 837 837 CHEMO W ACUTE LEUKEMIA AS SDX OR W HIGH DOSE CHEMO AGENT W MCC 0 1.3820 29.1 24.3 838 837 CHEMO W ACUTE LEUKEMIA AS SDX W CC OR HIGH DOSE CHEMO AGENT 0 1.3026 28.6 23.8 839 837 CHEMO W ACUTE LEUKEMIA AS SDX W/O CC/MCC 0 1.3026 28.6 23.8 840 840 LYMPHOMA & NON-ACUTE LEUKEMIA W MCC 91 0.8901 22.1 18.4 841 840 LYMPHOMA & NON-ACUTE LEUKEMIA W CC 38 0.6737 18.8 15.7 842 840 LYMPHOMA & NON-ACUTE LEUKEMIA W/O CC/MCC 4 0.4878 18.1 15.1 843 843 OTHER MYELOPROLIF DIS OR POORLY DIFF NEOPL DIAG W MCC 7 0.8667 24.6 20.5 844 843 OTHER MYELOPROLIF DIS OR POORLY DIFF NEOPL DIAG W CC 7 0.8667 24.6 20.5 845 843 OTHER MYELOPROLIF DIS OR POORLY DIFF NEOPL DIAG W/O CC/MCC 1 0.4878 18.1 15.1 846 846 CHEMOTHERAPY W/O ACUTE LEUKEMIA AS SECONDARY DIAGNOSIS W MCC 57 1.3820 29.1 24.3 847 846 CHEMOTHERAPY W/O ACUTE LEUKEMIA AS SECONDARY DIAGNOSIS W CC 54 1.3026 28.6 23.8 848 846 CHEMOTHERAPY W/O ACUTE LEUKEMIA AS SECONDARY DIAGNOSIS W/O CC/MCC 0 1.3026 28.6 23.8 849 849 RADIOTHERAPY 119 0.7730 22.7 18.9CMS-1498-P 1158

MSLTCDRG BaseMSLTCDRG MS-LTC-DRG Title FY 2009 LTCH Cases Proposed Relative Weight Proposed Geometric

Average Length of Stay Proposed Short-Stay

Outlier (SSO) Threshold 1
853 853 INFECTIOUS & PARASITIC DISEASES W O.R. PROCEDURE W MCC 1,059 1.7413 37.6 31.3 854 853 INFECTIOUS & PARASITIC DISEASES W O.R. PROCEDURE W CC 96 1.1085 30.2 25.2 855 853 INFECTIOUS & PARASITIC DISEASES W O.R. PROCEDURE W/O CC/MCC 2 0.8667 24.6 20.5 856 856 POSTOPERATIVE OR POST-TRAUMATIC INFECTIONS W O.R. PROC W MCC 361 1.4571 34.1 28.4 857 856 POSTOPERATIVE OR POST-TRAUMATIC INFECTIONS W O.R. PROC W CC 194 1.0415 30.5 25.4 858 856 POSTOPERATIVE OR POST-TRAUMATIC INFECTIONS W O.R. PROC W/O CC/MCC 10 0.8667 24.6 20.5 862 862 POSTOPERATIVE & POST-TRAUMATIC INFECTIONS W MCC 1,722 0.9661 25.3 21.1 863 862 POSTOPERATIVE & POST-TRAUMATIC INFECTIONS W/O MCC 1,019 0.6984 23.0 19.2 864 864 FEVER 3 0.4878 18.1 15.1 865 865 VIRAL ILLNESS W MCC 26 0.8013 21.3 17.8 866 865 VIRAL ILLNESS W/O MCC* 13 0.8013 21.3 17.8 867 867 OTHER INFECTIOUS & PARASITIC DISEASES DIAGNOSES W MCC 450 1.0443 23.7 19.8 868 867 OTHER INFECTIOUS & PARASITIC DISEASES DIAGNOSES W CC 64 0.6882 19.5 16.3 869 867 OTHER INFECTIOUS & PARASITIC DISEASES DIAGNOSES W/O CC/MCC 2 0.4878 18.1 15.1 870 870 SEPTICEMIA OR SEVERE SEPSIS W MV 96+ HOURS 1,282 2.1404 31.7 26.4 871 871 SEPTICEMIA OR SEVERE SEPSIS W/O MV 96+ HOURS W MCC 5,885 0.8725 23.1 19.3 872 871 SEPTICEMIA OR SEVERE SEPSIS W/O MV 96+ HOURS W/O MCC 1,275 0.6255 20.3 16.9 876 876 O.R. PROCEDURE W PRINCIPAL DIAGNOSES OF MENTAL ILLNESS 3 1.6495 36.4 30.3 880 880 ACUTE ADJUSTMENT REACTION & PSYCHOSOCIAL DYSFUNCTION 9 0.6280 20.9 17.4 881 881 DEPRESSIVE NEUROSES 34 0.3912 21.9 18.3 882 882 NEUROSES EXCEPT DEPRESSIVE 10 0.4878 18.1 15.1 883 883 DISORDERS OF PERSONALITY & IMPULSE CONTROL 7 0.6280 20.9 17.4 884 884 ORGANIC DISTURBANCES & MENTAL RETARDATION 76 0.5153 25.7 21.4 885 885 PSYCHOSES 877 0.3977 24.2 20.2 886 886 BEHAVIORAL & DEVELOPMENTAL DISORDERS 38 0.4205 24.7 20.6 887 887 OTHER MENTAL DISORDER DIAGNOSES 2 0.4878 18.1 15.1 894 894 ALCOHOL/DRUG ABUSE OR DEPENDENCE, LEFT AMA 0 0.4878 18.1 15.1 895 895 ALCOHOL/DRUG ABUSE OR DEPENDENCE W REHABILITATION THERAPY 0 0.4878 18.1 15.1CMS-1498-P 1159

MSLTCDRG BaseMSLTCDRG MS-LTC-DRG Title FY 2009 LTCH Cases Proposed Relative Weight Proposed Geometric

Average Length of Stay Proposed Short-Stay

Outlier (SSO) Threshold 1
896 896 ALCOHOL/DRUG ABUSE OR DEPENDENCE W/O REHABILITATION THERAPY W MCC 12 0.8667 24.6 20.5 897 896 ALCOHOL/DRUG ABUSE OR DEPENDENCE W/O REHABILITATION THERAPY W/O MCC 8 0.4878 18.1 15.1 901 901 WOUND DEBRIDEMENTS FOR INJURIES W MCC 292 1.3896 34.4 28.7 902 901 WOUND DEBRIDEMENTS FOR INJU RIES W CC 138 1.0410 29.9 24.9 903 901 WOUND DEBRIDEMENTS FOR INJURIES W/O CC/MCC 6 0.6280 20.9 17.4 904 904 SKIN GRAFTS FOR INJURIES W CC/MCC 100 1.3723 38.3 31.9 905 904 SKIN GRAFTS FOR INJURIES W/O CC/MCC 2 0.8667 24.6 20.5 906 906 HAND PROCEDURES FOR INJURIES 3 0.6280 20.9 17.4 907 907 OTHER O.R. PROCEDURES FOR INJURIES W MCC 135 1.4580 34.3 28.6 908 907 OTHER O.R. PROCEDURES FOR INJURIES W CC 57 0.9544 28.7 23.9 909 907 OTHER O.R. PROCEDURES FOR INJURIES W/O CC/MCC 4 0.6280 20.9 17.4 913 913 TRAUMATIC INJURY W MCC 49 0.7653 24.3 20.3 914 913 TRAUMATIC INJURY W/O MCC 79 0.5687 20.1 16.8 915 915 ALLERGIC REACTIONS W MCC 1 0.4878 18.1 15.1 916 915 ALLERGIC REACTIONS W/O MCC 0 0.4878 18.1 15.1 917 917 POISONING & TOXIC EFFECTS OF DRUGS W MCC 8 1.0834 28.9 24.1 918 917 POISONING & TOXIC EFFECTS OF DRUGS W/O MCC 3 0.4878 18.1 15.1 919 919 COMPLICATIONS OF TREATMENT W MCC 1,547 1.0957 26.7 22.3 920 919 COMPLICATIONS OF TREATMENT W CC 888 0.8190 24.9 20.8 921 919 COMPLICATIONS OF TREATMENT W/O CC/MCC 53 0.5150 18.4 15.3 922 922 OTHER INJURY, POISONING & TOXIC EFFECT DIAG W MCC 7 0.8667 24.6 20.5 923 922 OTHER INJURY, POISONING & TOXIC EFFECT DIAG W/O MCC 11 0.4878 18.1 15.1 927 927 EXTENSIVE BURNS OR FULL THICKNESS BURNS W MV 96+ HRS W SKIN GRAFT 0 1.0834 28.9 24.1 928 928 FULL THICKNESS BURN W SKIN GRAFT OR INHAL INJ W CC/MCC 11 1.0834 28.9 24.1 929 928 FULL THICKNESS BURN W SKIN GRAFT OR INHAL INJ W/O CC/MCC 1 1.0834 28.9 24.1 933 933 EXTENSIVE BURNS OR FULL THICKNESS BURNS W MV 96+ HRS W/O SKIN GRAFT 11 0.6280 20.9 17.4 934 934 FULL THICKNESS BURN W/O SKIN GRFT OR INHAL INJ 31 0.6455 23.9 19.9 935 935 NON-EXTENSIVE BURNS 64 0.6800 22.2 18.5 939 939 O.R. PROC W DIAGNOSES OF OTHER CONTACT W HEALTH SERVICES W MCC 225 1.4032 33.6 28.0CMS-1498-P 1160

MSLTCDRG BaseMSLTCDRG MS-LTC-DRG Title FY 2009 LTCH Cases Proposed Relative Weight Proposed Geometric

Average Length of Stay Proposed Short-Stay

Outlier (SSO) Threshold 1
940 939 O.R. PROC W DIAGNOSES OF OTHER CONTACT W HEALTH SERVICES W CC 98 1.0076 31.1 25.9 941 939 O.R. PROC W DIAGNOSES OF OTHER CONTACT W HEALTH SERVICES W/O CC/MCC 9 0.6280 20.9 17.4 945 945 REHABILITATION W CC/MCC 1,338 0.6482 21.1 17.6 946 945 REHABILITATION W/O CC/MCC 89 0.4068 17.2 14.3 947 947 SIGNS & SYMPTOMS W MCC 41 0.8225 23.5 19.6 948 947 SIGNS & SYMPTOMS W/O MCC 51 0.4846 19.9 16.6 949 949 AFTERCARE W CC/MCC 3,264 0.7151 22.1 18.4 950 949 AFTERCARE W/O CC/MCC 194 0.4499 17.1 14.3 951 951 OTHER FACTORS INFLUENCING HEALTH STATUS 66 1.5229 27.2 22.7 955 955 CRANIOTOMY FOR MULTIPLE SIGNIFICANT TRAUMA 0 1.0834 28.9 24.1 956 956 LIMB REATTACHMENT, HIP & FEMUR PROC FOR MULTIPLE SIGNIFICANT TRAUMA 0 1.6495 36.4 30.3 957 957 OTHER O.R. PROCEDURES FOR MULTIPLE SIGNIFICANT TRAUMA W MCC 1 0.6280 20.9 17.4 958 957 OTHER O.R. PROCEDURES FOR MULTIPLE SIGNIFICANT TRAUMA W CC* 0 0.6280 20.9 17.4 959 957 OTHER O.R. PROCEDURES FOR MULTIPLE SIGNIFICANT TRAUMA W/O CC/MCC* 0 0.6280 20.9 17.4 963 963 OTHER MULTIPLE SIGNIFICANT TRAUMA W MCC* 8 1.0834 28.9 24.1 964 963 OTHER MULTIPLE SIGNIFICANT TRAUMA W CC 8 1.0834 28.9 24.1 965 963 OTHER MULTIPLE SIGNIFICANT TRAUMA W/O CC/MCC 1 0.4878 18.1 15.1 969 969 HIV W EXTENSIVE O.R. PROCEDURE W MCC 12 1.6495 36.4 30.3 970 969 HIV W EXTENSIVE O.R. PROCEDURE W/O MCC 2 0.8667 24.6 20.5 974 974 HIV W MAJOR RELATED CONDITION W MCC 210 1.0512 23.2 19.3 975 974 HIV W MAJOR RELATED CONDITION W CC 58 0.6394 18.6 15.5 976 974 HIV W MAJOR RELATED CONDITION W/O CC/MCC 7 0.4878 18.1 15.1 977 977 HIV W OR W/O OTHER RELATED CONDITION 30 0.6746 19.9 16.6 981 981 EXTENSIVE O.R. PROCEDURE UNRELATED TO PRINCIPAL DIAGNOSIS W MCC 1,045 2.1787 41.6 34.7 982 981 EXTENSIVE O.R. PROCEDURE UNRELATED TO PRINCIPAL DIAGNOSIS W CC 219 1.1314 30.7 25.6 983 981 EXTENSIVE O.R. PROCEDURE UNRELATED TO PRINCIPAL DIAGNOSIS W/O CC/MCC 6 0.6280 20.9 17.4 984 984 PROSTATIC O.R. PROCEDURE UNRELATED TO PRINCIPAL DIAGNOSIS W MCC 19 1.6495 36.4 30.3 985 984 PROSTATIC O.R. PROCEDURE UNRELATED TO PRINCIPAL DIAGNOSIS W CC 8 1.0834 28.9 24.1 986 984 PROSTATIC O.R. PROCEDURE UNRELATED TO PRINCIPAL DIAGNOSIS W/O CC/MCC 0 1.0834 28.9 24.1CMS-1498-P 1161

MSLTCDRG BaseMSLTCDRG MS-LTC-DRG Title FY 2009 LTCH Cases Proposed Relative Weight Proposed Geometric

Average Length of Stay Proposed Short-Stay

Outlier (SSO) Threshold 1
987 987 NON-EXTENSIVE O.R. PROC UNRELATED TO PRINCIPAL DIAGNOSIS W MCC 467 1.8330 38.5 32.1 988 987 NON-EXTENSIVE O.R. PROC UNRELATED TO PRINCIPAL DIAGNOSIS W CC 172 1.0342 30.2 25.2 989 987 NON-EXTENSIVE O.R. PROC UNRELATED TO PRINCIPAL DIAGNOSIS W/O CC/MCC 4 0.6280 20.9 17.4 998 998 PRINCIPAL DIAGNOSIS INVALID AS DISCHARGE DIAGNOSIS 0 0.0000 0.0 0.0 999 999 UNGROUPABLE 0 0.0000 0.0 0.0

1 The SSO Threshold is calculated as 5/6 th of the geometric average length of stay of the MS-LTC-DRG (as specified in §412.529(a)

in conjunction with §412.503). * In determining the proposed MS-LTC-DRG relative weights for FY 2011, these MS-LTC-DRGs were adjusted for

nonmonotonicity as discussed in section VIII.B.3.g. (step 6) of the preamble of this proposed rule.CMS-1498-P 1162

TABLE 12A.—PROPOSED LTCH PPS WAGE INDEX FOR URBAN AREAS FOR DISCHARGES OCCURRING FROM OCTOBER 1, 2010 THROUGH SEPTEMBER 30, 2011

CBSA Code Urban Area (Constituent Counties) Proposed LTCH PPS Wage Index 10180 Abilene, TX Callahan County, TX Jones County, TX Taylor County, TX 0.8016 10380 Aguadilla-Isabela-San Sebastián, PR Aguada Municipio, PR Aguadilla Municipio, PR Añasco Municipio, PR Isabela Municipio, PR Lares Municipio, PR Moca Municipio, PR Rincón Municipio, PR San Sebastián Municipio, PR 0.3476 10420 Akron, OH Portage County, OH Summit County, OH 0.8857 10500 Albany, GA Baker County, GA Dougherty County, GA Lee County, GA Terrell County, GA Worth County, GA 0.9050 10580 Albany-Schenectady-Troy, NY Albany County, NY Rensselaer County, NY Saratoga County, NY Schenectady County, NY Schoharie County, NY 0.8667 10740 Albuquerque, NM Bernalillo County, NM Sandoval County, NM Torrance County, NM Valencia County, NM 0.9454 10780 Alexandria, LA Grant Parish, LA Rapides Parish, LA 0.8008CMS-1498-P 1163

CBSA Code Urban Area (Constituent Counties) Proposed LTCH PPS Wage Index 10900 Allentown-Bethle hem-Easton, PA-NJ Warren County, NJ Carbon County, PA Lehigh County, PA Northampton County, PA 0.9178 11020 Altoona, PA Blair County, PA 0.8634 11100 Amarillo, TX Armstrong County, TX Carson County, TX Potter County, TX Randall County, TX 0.8658 11180 Ames, IA Story County, IA 0.9986 11260 Anchorage, AK Anchorage Municipality, AK Matanuska-Susitna Borough, AK 1.1984 11300 Anderson, IN Madison County, IN 0.9207 11340 Anderson, SC Anderson County, SC 0.8969 11460 Ann Arbor, MI Washtenaw County, MI 1.0140 11500 Anniston-Oxford, AL Calhoun County, AL 0.7931 11540 Appleton, WI Calumet County, WI Outagamie County, WI 0.9376 11700 Asheville, NC Buncombe County, NC Haywood County, NC Henderson County, NC Madison County, NC 0.9016 12020 Athens-Clarke County, GA Clarke County, GA Madison County, GA Oconee County, GA Oglethorpe County, GA 0.9546CMS-1498-P 1164

CBSA Code Urban Area (Constituent Counties) Proposed LTCH PPS Wage Index 12060 Atlanta-Sandy Spri ngs-Marietta, GA Barrow County, GA Bartow County, GA Butts County, GA Carroll County, GA Cherokee County, GA Clayton County, GA Cobb County, GA Coweta County, GA Dawson County, GA DeKalb County, GA Douglas County, GA Fayette County, GA Forsyth County, GA Fulton County, GA Gwinnett County, GA Haralson County, GA Heard County, GA Henry County, GA Jasper County, GA Lamar County, GA Meriwether County, GA Newton County, GA Paulding County, GA Pickens County, GA Pike County, GA Rockdale County, GA Spalding County, GA Walton County, GA 0.9566 12100 Atlantic City, NJ- Hammonton, New Jersey Atlantic County, NJ 1.1147 12220 Auburn-Opelika, AL Lee County, AL 0.7255 12260 Augusta-Richmond County, GA-SC Burke County, GA Columbia County, GA McDuffie County, GA Richmond County, GA Aiken County, SC Edgefield County, SC 0.9522CMS-1498-P 1165

CBSA Code Urban Area (Constituent Counties) Proposed LTCH PPS Wage Index 12420 Austin-Round Rock-San Marcos, TX Bastrop County, TX Caldwell County, TX Hays County, TX Travis County, TX Williamson County, TX 0.9529 12540 Bakersfield-Delano, CA Kern County, CA 1.1655 12580 Baltimore-Towson, MD Anne Arundel County, MD Baltimore County, MD Carroll County, MD Harford County, MD Howard County, MD Queen Anne's County, MD Baltimore City, MD 1.0267 12620 Bangor, ME Penobscot County, ME 0.9793 12700 Barnstable Town, MA Barnstable County, MA 1.2844 12940 Baton Rouge, LA Ascension Parish, LA East Baton Rouge Parish, LA East Feliciana Parish, LA Iberville Parish, LA Livingston Parish, LA Pointe Coupee Parish, LA St. Helena Parish, LA West Baton Rouge Parish, LA West Feliciana Parish, LA 0.8597 12980 Battle Creek, MI Calhoun County, MI 0.9671 13020 Bay City, MI Bay County, MI 0.9235 13140 Beaumont-Port Arthur, TX Hardin County, TX Jefferson County, TX Orange County, TX 0.8502 13380 Bellingham, WA Whatcom County, WA 1.1408 13460 Bend, OR Deschutes County, OR 1.1388CMS-1498-P 1166

CBSA Code Urban Area (Constituent Counties) Proposed LTCH PPS Wage Index 13644 Bethesda- - Rockville-Frederick, MD Frederick County, MD Montgomery County, MD 1.0542 13740 Billings, MT Carbon County, MT Yellowstone County, MT 0.8688 13780 Binghamton, NY Broome County, NY Tioga County, NY 0.8733 13820 Birmingham-Hoover, AL Bibb County, AL Blount County, AL Chilton County, AL Jefferson County, AL St. Clair County, AL Shelby County, AL Walker County, AL 0.8616 13900 Bismarck, ND Burleigh County, ND Morton County, ND 0.7360 13980 Blacksburg-Christiansburg-Radford, VA Giles County, VA Montgomery County, VA Pulaski County, VA Radford City, VA 0.8328 14020 Bloomington, IN Greene County, IN Monroe County, IN Owen County, IN 0.9004 14060 Bloomington-Normal, IL McLean County, IL 0.9455 14260 Boise City-Nampa, ID Ada County, ID Boise County, ID Canyon County, ID Gem County, ID Owyhee County, ID 0.9288 14484 Boston-Quincy, MA Norfolk County, MA Plymouth County, MA Suffolk County, MA 1.2215 14500 Boulder, CO Boulder County, CO 1.0081CMS-1498-P 1167

CBSA Code Urban Area (Constituent Counties) Proposed LTCH PPS Wage Index 14540 Bowling Green, KY Edmonson County, KY Warren County, KY 0.8680 14740 Bremerton-Silverdale, WA Kitsap County, WA 1.0684 14860 Bridgeport-Stamford-Norwalk, CT Fairfield County, CT 1.2567 15180 Brownsville-Harlingen, TX Cameron County, TX 0.9188 15260 Brunswick, GA Brantley County, GA Glynn County, GA McIntosh County, GA 0.9224 15380 Buffalo-Niagara Falls, NY Erie County, NY Niagara County, NY 0.9545 15500 Burlington, NC Alamance County, NC 0.8878 15540 Burlington-South Burlington, VT Chittenden County, VT Franklin County, VT Grand Isle County, VT 0.9963 15764 Cambridge-Newton-Framingham, MA Middlesex County, MA 1.1268 15804 Camden, NJ Burlington County, NJ Camden County, NJ Gloucester County, NJ 1.0403 15940 Canton-Massillon, OH Carroll County, OH Stark County, OH 0.8761 15980 Cape Coral-Fort Myers, FL Lee County, FL 0.9191 16020 Cape Girardeau-Jackson, MO-IL Alexander County, IL Bollinger County, MO Cape Girardeau County, MO 0.8905 16180 Carson City, NV Carson City, NV 1.0482 16220 Casper, WY Natrona County, WY 0.9670CMS-1498-P 1168

CBSA Code Urban Area (Constituent Counties) Proposed LTCH PPS Wage Index 16300 Cedar Rapids, IA Benton County, IA Jones County, IA Linn County, IA 0.8858 16580 Champaign-Urbana, IL Champaign County, IL Ford County, IL Piatt County, IL 1.0251 16620 Charleston, WV Boone County, WV Clay County, WV Kanawha County, WV Lincoln County, WV Putnam County, WV 0.7908 16700 Charleston-North CharlestonSummerville, SC Berkeley County, SC Charleston County, SC Dorchester County, SC 0.9345 16740 Charlotte-Gastonia-Rock Hill, NC-SC Anson County, NC Cabarrus County, NC Gaston County, NC Mecklenburg County, NC Union County, NC York County, SC 0.9435 16820 Charlottesville, VA Albemarle County, VA Fluvanna County, VA Greene County, VA Nelson County, VA Charlottesville City, VA 0.9358 16860 Chattanooga, TN-GA Catoosa County, GA Dade County, GA Walker County, GA Hamilton County, TN Marion County, TN Sequatchie County, TN 0.8755 16940 Cheyenne, WY Laramie County, WY 0.9408CMS-1498-P 1169

CBSA Code Urban Area (Constituent Counties) Proposed LTCH PPS Wage Index 16974 Chicago- Joliet-Naperville, IL Cook County, IL DeKalb County, IL DuPage County, IL Grundy County, IL Kane County, IL Kendall County, IL McHenry County, IL Will County, IL 1.0573 17020 Chico, CA Butte County, CA 1.1572 17140 Cincinnati-Middletown, OH-KY-IN Dearborn County, IN Franklin County, IN Ohio County, IN Boone County, KY Bracken County, KY Campbell County, KY Gallatin County, KY Grant County, KY Kenton County, KY Pendleton County, KY Brown County, OH Butler County, OH Clermont County, OH Hamilton County, OH Warren County, OH 0.9714 17300 Clarksville, TN-KY Christian County, KY Trigg County, KY Montgomery County, TN Stewart County, TN 0.7898 17420 Cleveland, TN Bradley County, TN Polk County, TN 0.7744 17460 Cleveland-Elyria-Mentor, OH Cuyahoga County, OH Geauga County, OH Lake County, OH Lorain County, OH Medina County, OH 0.9052 17660 Coeur d'Alene, ID Kootenai County, ID 0.9379CMS-1498-P 1170

CBSA Code Urban Area (Constituent Counties) Proposed LTCH PPS Wage Index 17780 College Station-Bryan, TX Brazos County, TX Burleson County, TX Robertson County, TX 0.9604 17820 Colorado Springs, CO El Paso County, CO Teller County, CO 0.9497 17860 Columbia, MO Boone County, MO Howard County, MO 0.8295 17900 Columbia, SC Calhoun County, SC Fairfield County, SC Kershaw County, SC Lexington County, SC Richland County, SC Saluda County, SC 0.8721 17980 Columbus, GA-AL Russell County, AL Chattahoochee County, GA Harris County, GA Marion County, GA Muscogee County, GA 0.9042 18020 Columbus, IN Bartholomew County, IN 0.9449 18140 Columbus, OH Delaware County, OH Fairfield County, OH Franklin County, OH Licking County, OH Madison County, OH Morrow County, OH Pickaway County, OH Union County, OH 1.0157 18580 Corpus Christi, TX Aransas County, TX Nueces County, TX San Patricio County, TX 0.8599 18700 Corvallis, OR Benton County, OR 1.0472 18880 Crestview-Fort Walton Beach- Destin, FL Okaloosa County, FL 0.8856CMS-1498-P 1171

CBSA Code Urban Area (Constituent Counties) Proposed LTCH PPS Wage Index 19060 Cumberland, MD-WV Allegany County, MD Mineral County, WV 0.8199 19124 Dallas-Plano-Irving, TX Collin County, TX Dallas County, TX Delta County, TX Denton County, TX Ellis County, TX Hunt County, TX Kaufman County, TX Rockwall County, TX 0.9848 19140 Dalton, GA Murray County, GA Whitfield County, GA 0.8610 19180 Danville, IL Vermilion County, IL 0.9708 19260 Danville, VA Pittsylvania County, VA Danville City, VA 0.8182 19340 Davenport-Moline-Rock Island, IA-IL Henry County, IL Mercer County, IL Rock Island County, IL Scott County, IA 0.8414 19380 Dayton, OH Greene County, OH Miami County, OH Montgomery County, OH Preble County, OH 0.9155 19460 Decatur, AL Lawrence County, AL Morgan County, AL 0.7618 19500 Decatur, IL Macon County, IL 0.7929 19660 Deltona-Daytona Beach-Ormond Beach, FL Volusia County, FL 0.8750CMS-1498-P 1172

CBSA Code Urban Area (Constituent Counties) Proposed LTCH PPS Wage Index 19740 Denver-Aurora-Broomfield, CO Adams County, CO Arapahoe County, CO Broomfield County, CO Clear Creek County, CO Denver County, CO Douglas County, CO Elbert County, CO Gilpin County, CO Jefferson County, CO Park County, CO 1.0735 19780 Des Moines,-West Des Moines, IA Dallas County, IA Guthrie County, IA Madison County, IA Polk County, IA Warren County, IA 0.9637 19804 Detroit-Livonia-Dearborn, MI Wayne County, MI 0.9702 20020 Dothan, AL Geneva County, AL Henry County, AL Houston County, AL 0.7635 20100 Dover, DE Kent County, DE 0.9937 20220 Dubuque, IA Dubuque County, IA 0.8788 20260 Duluth, MN-WI Carlton County, MN St. Louis County, MN Douglas County, WI 1.0469 20500 Durham-Chapel Hill, NC Chatham County, NC Durham County, NC Orange County, NC Person County, NC 0.9680 20740 Eau Claire, WI Chippewa County, WI Eau Claire County, WI 0.9655CMS-1498-P 1173

CBSA Code Urban Area (Constituent Counties) Proposed LTCH PPS Wage Index 20764 Edison-New Brunswick, NJ Middlesex County, NJ Monmouth County, NJ Ocean County, NJ Somerset County, NJ 1.1022 20940 El Centro, CA Imperial County, CA 0.9273 21060 Elizabethtown, KY Hardin County, KY Larue County, KY 0.8463 21140 Elkhart-Goshen, IN Elkhart County, IN 0.9480 21300 Elmira, NY Chemung County, NY 0.8459 21340 El Paso, TX El Paso County, TX 0.8489 21500 Erie, PA Erie County, PA 0.8371 21660 Eugene-Springfield, OR Lane County, OR 1.1402 21780 Evansville, IN-KY Gibson County, IN Posey County, IN Vanderburgh County, IN Warrick County, IN Henderson County, KY Webster County, KY 0.8446 21820 Fairbanks, AK Fairbanks North Star Borough, AK 1.1098 21940 Fajardo, PR Ceiba Municipio, PR Fajardo Municipio, PR Luquillo Municipio, PR 0.3889

22020 Fargo, ND-MN Cass County, ND Clay County, MN 0.8049 22140 Farmington, NM San Juan County, NM 0.8000 22180 Fayetteville, NC Cumberland County, NC Hoke County, NC 0.9339CMS-1498-P 1174

CBSA Code Urban Area (Constituent Counties) Proposed LTCH PPS Wage Index 22220 Fayetteville-Springdale-Rogers, AR-MO Benton County, AR Madison County, AR Washington County, AR McDonald County, MO 0.8630 22380 Flagstaff, AZ Coconino County, AZ 1.2463 22420 Flint, MI Genesee County, MI 1.1515 22500 Florence, SC Darlington County, SC Florence County, SC 0.8264 22520 Florence-Muscle Shoals, AL Colbert County, AL Lauderdale County, AL 0.8058 22540 Fond du Lac, WI Fond du Lac County, WI 0.9238 22660 Fort Collins-Loveland, CO Larimer County, CO 0.9908

22744 Fort Lauderdale-Pompano Beach-Deerfield Beach, FL Broward County, FL 1.0170 22900 Fort Smith, AR-OK Crawford County, AR Franklin County, AR Sebastian County, AR Le Flore County, OK Sequoyah County, OK 0.7601 23060 Fort Wayne, IN Allen County, IN Wells County, IN Whitley County, IN 0.9322 23104 Fort Worth-Arlington, TX Johnson County, TX Parker County, TX Tarrant County, TX Wise County, TX 0.9490 23420 Fresno, CA Fresno County, CA 1.1439 23460 Gadsden, AL Etowah County, AL 0.7028CMS-1498-P 1175

CBSA Code Urban Area (Constituent Counties) Proposed LTCH PPS Wage Index 23540 Gainesville, FL Alachua County, FL Gilchrist County, FL 0.9175 23580 Gainesville, GA Hall County, GA 0.9386 23844 Gary, IN Jasper County, IN Lake County, IN Newton County, IN Porter County, IN 0.9099 24020 Glens Falls, NY Warren County, NY Washington County, NY 0.8521 24140 Goldsboro, NC Wayne County, NC 0.9081 24220 Grand Forks, ND-MN Polk County, MN Grand Forks County, ND 0.7729 24300 Grand Junction, CO Mesa County, CO 0.9866 24340 Grand Rapids-Wyoming, MI Barry County, MI Ionia County, MI Kent County, MI Newaygo County, MI 0.9183 24500 Great Falls, MT Cascade County, MT 0.8303 24540 Greeley, CO Weld County, CO 0.9511 24580 Green Bay, WI Brown County, WI Kewaunee County, WI Oconto County, WI 0.9601 24660 Greensboro-High Point, NC Guilford County, NC Randolph County, NC Rockingham County, NC 0.8897 24780 Greenville, NC Greene County, NC Pitt County, NC 0.9385CMS-1498-P 1176

CBSA Code Urban Area (Constituent Counties) Proposed LTCH PPS Wage Index 24860 Greenville-Mauldin-Easley, SC Greenville County, SC Laurens County, SC Pickens County, SC 0.9563 25020 Guayama, PR Arroyo Municipio, PR Guayama Municipio, PR Patillas Municipio, PR 0.3692 25060 Gulfport-Biloxi, MS Hancock County, MS Harrison County, MS Stone County, MS 0.8990 25180 Hagerstown-Martinsburg, MD-WV Washington County, MD Berkeley County, WV Morgan County, WV 0.9269 25260 Hanford-Corcoran, CA Kings County, CA 1.1223 25420 Harrisburg-Carlisle, PA Cumberland County, PA Dauphin County, PA Perry County, PA 0.9311 25500 Harrisonburg, VA Rockingham County, VA Harrisonburg City, VA 0.9173 25540 Hartford-West Hartford-East Hartford, CT Hartford County, CT Middlesex County, CT Tolland County, CT 1.0936 25620 Hattiesburg, MS Forrest County, MS Lamar County, MS Perry County, MS 0.7727 25860 Hickory-Lenoir-Morganton, NC Alexander County, NC Burke County, NC Caldwell County, NC Catawba County, NC 0.8707 25980 Hinesville-Fort Stewart, GA Liberty County, GA Long County, GA 0.8955 26100 Holland-Grand Haven, MI Ottawa County, MI 0.8646CMS-1498-P 1177

CBSA Code Urban Area (Constituent Counties) Proposed LTCH PPS Wage Index 26180 Honolulu, HI Honolulu County, HI 1.1801 26300 Hot Springs, AR Garland County, AR 0.9166 26380 Houma-Bayou Cane-Thibodaux, LA Lafourche Parish, LA Terrebonne Parish, LA 0.7865 26420 Houston-Sugar Land-Baytown, TX Austin County, TX Brazoria County, TX Chambers County, TX Fort Bend County, TX Galveston County, TX Harris County, TX Liberty County, TX Montgomery County, TX San Jacinto County, TX Waller County, TX 0.9838 26580 Huntington-Ashland, WV-KY-OH Boyd County, KY Greenup County, KY Lawrence County, OH Cabell County, WV Wayne County, WV 0.8967 26620 Huntsville, AL Limestone County, AL Madison County, AL 0.9130 26820 Idaho Falls, ID Bonneville County, ID Jefferson County, ID 0.9678 26900 Indianapolis-Carmel, IN Boone County, IN Brown County, IN Hamilton County, IN Hancock County, IN Hendricks County, IN Johnson County, IN Marion County, IN Morgan County, IN Putnam County, IN Shelby County, IN 0.9687CMS-1498-P 1178

CBSA Code Urban Area (Constituent Counties) Proposed LTCH PPS Wage Index 26980 Iowa City, IA Johnson County, IA Washington County, IA 0.9672 27060 Ithaca, NY Tompkins County, NY 0.9858 27100 Jackson, MI Jackson County, MI 0.9170 27140 Jackson, MS Copiah County, MS Hinds County, MS Madison County, MS Rankin County, MS Simpson County, MS 0.8105 27180 Jackson, TN Chester County, TN Madison County, TN 0.8418 27260 Jacksonville, FL Baker County, FL Clay County, FL Duval County, FL Nassau County, FL St. Johns County, FL 0.8899 27340 Jacksonville, NC Onslow County, NC 0.7819 27500 Janesville, WI Rock County, WI 0.9430 27620 Jefferson City, MO Callaway County, MO Cole County, MO Moniteau County, MO Osage County, MO 0.8448 27740 Johnson City, TN Carter County, TN Unicoi County, TN Washington County, TN 0.7269 27780 Johnstown, PA Cambria County, PA 0.8103 27860 Jonesboro, AR Craighead County, AR Poinsett County, AR 0.7770 27900 Joplin, MO Jasper County, MO Newton County, MO 0.8227CMS-1498-P 1179

CBSA Code Urban Area (Constituent Counties) Proposed LTCH PPS Wage Index 28020 Kalamazoo-Portage, MI Kalamazoo County, MI Van Buren County, MI 1.0309 28100 Kankakee-Bradley, IL Kankakee County, IL 1.0636 28140 Kansas City, MO-KS Franklin County, KS Johnson County, KS Leavenworth County, KS Linn County, KS Miami County, KS Wyandotte County, KS Bates County, MO Caldwell County, MO Cass County, MO Clay County, MO Clinton County, MO Jackson County, MO Lafayette County, MO Platte County, MO Ray County, MO 0.9667 28420 Kennewick- Pasco-Richland, WA Benton County, WA Franklin County, WA 0.9992 28660 Killeen-Temple-Fort Hood, TX Bell County, TX Coryell County, TX Lampasas County, TX 0.8711 28700 Kingsport-Bristol-Bristol, TN-VA Hawkins County, TN Sullivan County, TN Bristol City, VA Scott County, VA Washington County, VA 0.7596 28740 Kingston, NY Ulster County, NY 0.9089 28940 Knoxville, TN Anderson County, TN Blount County, TN Knox County, TN Loudon County, TN Union County, TN 0.7856CMS-1498-P 1180

CBSA Code Urban Area (Constituent Counties) Proposed LTCH PPS Wage Index 29020 Kokomo, IN Howard County, IN Tipton County, IN 0.9134 29100 La Crosse, WI-MN Houston County, MN La Crosse County, WI 0.9819 29140 Lafayette, IN Benton County, IN Carroll County, IN Tippecanoe County, IN 0.9304 29180 Lafayette, LA Lafayette Parish, LA St. Martin Parish, LA 0.8499 29340 Lake Charles, LA Calcasieu Parish, LA Cameron Parish, LA 0.8209 29404 Lake County-Kenosha County, IL-WI Lake County, IL Kenosha County, WI 1.0799

29420 Lake Havasu City-Kingman, AZ Mohave County, AZ 1.0252 29460 Lakeland-Winter Haven, FL Polk County, FL 0.8461 29540 Lancaster, PA Lancaster County, PA 0.9359 29620 Lansing-East Lansing, MI Clinton County, MI Eaton County, MI Ingham County, MI 1.0315 29700 Laredo, TX Webb County, TX 0.7927 29740 Las Cruces, NM Dona Ana County, NM 0.9311 29820 Las Vegas-Paradise, NV Clark County, NV 1.2119 29940 Lawrence, KS Douglas County, KS 0.8547 30020 Lawton, OK Comanche County, OK 0.8298 30140 Lebanon, PA Lebanon County, PA 0.7820CMS-1498-P 1181

CBSA Code Urban Area (Constituent Counties) Proposed LTCH PPS Wage Index 30300 Lewiston, ID-WA Nez Perce County, ID Asotin County, WA 0.9373 30340 Lewiston-Auburn, ME Androscoggin County, ME 0.8917 30460 Lexington-Fayette, KY Bourbon County, KY Clark County, KY Fayette County, KY Jessamine County, KY Scott County, KY Woodford County, KY 0.8832 30620 Lima, OH Allen County, OH 0.9285 30700 Lincoln, NE Lancaster County, NE Seward County, NE 0.9633 30780 Little Rock-North Little Rock-Conway, AR Faulkner County, AR Grant County, AR Lonoke County, AR Perry County, AR Pulaski County, AR Saline County, AR 0.8542 30860 Logan, UT-ID Franklin County, ID Cache County, UT 0.8808 30980 Longview, TX Gregg County, TX Rusk County, TX Upshur County, TX 0.8582 31020 Longview, WA Cowlitz County, WA 1.0313 31084 Los Angeles-Long Beach-Glendale, CA Los Angeles County, CA 1.2054CMS-1498-P 1182

CBSA Code Urban Area (Constituent Counties) Proposed LTCH PPS Wage Index 31140 Louisville-Jefferson County, KY-IN Clark County, IN Floyd County, IN Harrison County, IN Washington County, IN Bullitt County, KY Henry County, KY Jefferson County, KY Meade County, KY Nelson County, KY Oldham County, KY Shelby County, KY Spencer County, KY Trimble County, KY 0.8898 31180 Lubbock, TX Crosby County, TX Lubbock County, TX 0.8862 31340 Lynchburg, VA Amherst County, VA Appomattox County, VA Bedford County, VA Campbell County, VA Bedford City, VA Lynchburg City, VA 0.8679 31420 Macon, GA Bibb County, GA Crawford County, GA Jones County, GA Monroe County, GA Twiggs County, GA 0.9044 31460 Madera-Chowchilla, CA Madera County, CA 0.7999 31540 Madison, WI Columbia County, WI Dane County, WI Iowa County, WI 1.1307 31700 Manchester-Nashua, NH Hillsborough County, NH 0.9885 31740 Mahattan, KS Geary County, KS Pottawatomie County, KS Riley County; KS 0.7860CMS-1498-P 1183

CBSA Code Urban Area (Constituent Counties) Proposed LTCH PPS Wage Index 31860 Mankato-North Mankato, MN Blue Earth County, MN Nicollet County, MN 0.9098 31900 Mansfield, OH Richland County, OH 0.8932 32420 Mayagüez, PR Hormigueros Municipio, PR Mayagüez Municipio, PR 0.3646 32580 McAllen-Edinburg-Mission, TX Hidalgo County, TX 0.8852 32780 Medford, OR Jackson County, OR 1.0077 32820 Memphis, TN-MS-AR Crittenden County, AR DeSoto County, MS Marshall County, MS Tate County, MS Tunica County, MS Fayette County, TN Shelby County, TN Tipton County, TN 0.9205 32900 Merced, CA Merced County, CA 1.2241 33124 Miami-Miami Beach-Kendall, FL Miami-Dade County, FL 1.0144 33140 Michigan City-La Porte, IN LaPorte County, IN 0.9485 33260 Midland, TX Midland County, TX 0.9727 33340 Milwaukee-Waukesha-West Allis, WI Milwaukee County, WI Ozaukee County, WI Washington County, WI Waukesha County, WI 1.0200CMS-1498-P 1184

CBSA Code Urban Area (Constituent Counties) Proposed LTCH PPS Wage Index 33460 Minneapolis-St. Paul-Bloomington, MN-WI Anoka County, MN Carver County, MN Chisago County, MN Dakota County, MN Hennepin County, MN Isanti County, MN Ramsey County, MN Scott County, MN Sherburne County, MN Washington County, MN Wright County, MN Pierce County, WI St. Croix County, WI 1.1161 33540 Missoula, MT Missoula County, MT 0.8935 33660 Mobile, AL Mobile County, AL 0.7949 33700 Modesto, CA Stanislaus County, CA 1.2123 33740 Monroe, LA Ouachita Parish, LA Union Parish, LA 0.8008 33780 Monroe, MI Monroe County, MI 0.8698 33860 Montgomery, AL Autauga County, AL Elmore County, AL Lowndes County, AL Montgomery County, AL 0.8346 34060 Morgantown, WV Monongalia County, WV Preston County, WV 0.8150 34100 Morristown, TN Grainger County, TN Hamblen County, TN Jefferson County, TN 0.7046 34580 Mount Vernon-Anacortes, WA Skagit County, WA 1.0379 34620 Muncie, IN Delaware County, IN 0.8219 34740 Muskegon-Norton Shores, MI Muskegon County, MI 0.9805CMS-1498-P 1185

CBSA Code Urban Area (Constituent Counties) Proposed LTCH PPS Wage Index 34820 Myrtle Beach- North Myrtle Beach-Conway, SC Horry County, SC 0.8726 34900 N apa, C A Napa County, CA 1.4628 34940 N apl es -Marco Island, FL Collier County, FL 0.9714 34980 N ashvil le -Davidson-Murfreesboro-Franklin, TN Cannon County, TN Cheatham County, TN Davidson County, TN Dickson County, TN Hickman County, TN Macon County, TN Robertson County, TN Rutherford County, TN Smith County, TN Sumner County, TN Trousdale County, TN Williamson County, TN Wilson County, TN 0.9390 35004 N ass au -Suffolk, NY Nassau County, NY Suffolk County, NY 1.2333 35084 N ewa rk -Union, NJ-PA Essex County, NJ Hunterdon County, NJ Morris County, NJ Sussex County, NJ Union County, NJ Pike County, PA 1.1461 35300 N ew Hav en -Milford, CT New Haven County, CT 1.1534 35380 N ew Orlea ns -Metairie-Kenner, LA Jefferson Parish, LA Orleans Parish, LA Plaquemines Parish, LA St. Bernard Parish, LA St. Charles Parish, LA St. John the Baptist Parish, LA St. Tammany Parish, LA 0.9085CMS-1498-P 1186

CBSA Code Urban Area (Constituent Counties) Proposed LTCH PPS Wage Index 35644 N ew Yo rk -White Plains-Wayne, NY-NJ Bergen County, NJ Hudson County, NJ Passaic County, NJ Bronx County, NY Kings County, NY New York County, NY Putnam County, NY Queens County, NY Richmond County, NY Rockland County, NY Westchester County, NY 1.2949 35660 N il es -Benton Harbor, MI Berrien County, MI 0.8887 35840 N orth Po rt -Bradenton-Sarasota, FL Manatee County, FL Sarasota County, FL 0.9495 35980 N orwi ch -New London, CT New London County, CT 1.1234 36084 Oakland-Fremont-Hayward, CA Alameda County, CA Contra Costa County, CA 1.6374 36100 Ocala, FL Marion County, FL 0.8482 36140 Ocean City, NJ Cape May County, NJ 1.0896 36220 Odessa, TX Ector County, TX 0.9451 36260 Ogden-Clearfield, UT Davis County, UT Morgan County, UT Weber County, UT 0.9282 36420 Oklahoma City, OK Canadian County, OK Cleveland County, OK Grady County, OK Lincoln County, OK Logan County, OK McClain County, OK Oklahoma County, OK 0.8892 36500 Olympia, WA Thurston County, WA 1.1287CMS-1498-P 1187

CBSA Code Urban Area (Constituent Counties) Proposed LTCH PPS Wage Index 36540 Omaha-Council Bluffs, NE-IA Harrison County, IA Mills County, IA Pottawattamie County, IA Cass County, NE Douglas County, NE Sarpy County, NE Saunders County, NE Washington County, NE 0.9599 36740 Orlando-Kissimmee-Sanford, FL Lake County, FL Orange County, FL Osceola County, FL Seminole County, FL 0.9159 36780 Oshkosh-Neenah, WI Winnebago County, WI 0.9582 36980 Owensboro, KY Daviess County, KY Hancock County, KY McLean County, KY 0.8384 37100 Oxnard-Thousand Oaks-Ventura, CA Ventura County, CA 1.2397 37340 Palm Bay-Melbourne-Titusville, FL Brevard County, FL 0.9226

37380 Palm Coast, FL Flager County, FL 0.8419 37460 Panama City-Lynn Haven- Panama City Beach, FL Bay County, FL 0.7967 37620 Parkersburg-Marietta-Vienna, WV-OH Washington County, OH Pleasants County, WV Wirt County, WV Wood County, WV 0.7467 37700 Pascagoula, MS George County, MS Jackson County, MS 0.8312

37764 Peabody, MA Essex County, MA 1.0996 37860 Pensacola-Ferry Pass-Brent, FL Escambia County, FL Santa Rosa County, FL 0.8267CMS-1498-P 1188

CBSA Code Urban Area (Constituent Counties) Proposed LTCH PPS Wage Index 37900 Peoria, IL Marshall County, IL Peoria County, IL Stark County, IL Tazewell County, IL Woodford County, IL 0.9163 37964 Philadelphia, PA Bucks County, PA Chester County, PA Delaware County, PA Montgomery County, PA Philadelphia County, PA 1.0818 38060 Phoenix-Mesa-Glendale, AZ Maricopa County, AZ Pinal County, AZ 1.0662 38220 Pine Bluff, AR Cleveland County, AR Jefferson County, AR Lincoln County, AR 0.8025 38300 Pittsburgh, PA Allegheny County, PA Armstrong County, PA Beaver County, PA Butler County, PA Fayette County, PA Washington County, PA Westmoreland County, PA 0.8619 38340 Pittsfield, MA Berkshire County, MA 1.0388 38540 Pocatello, ID Bannock County, ID Power County, ID 0.9523 38660 Ponce, PR Juana Díaz Municipio, PR Ponce Municipio, PR Villalba Municipio, PR 0.4320 38860 Portland-South Por tland-Biddeford, ME Cumberland County, ME Sagadahoc County, ME York County, ME 0.9905CMS-1498-P 1189

CBSA Code Urban Area (Constituent Counties) Proposed LTCH PPS Wage Index 38900 Portland-Vancouve r-Hillsboro, OR-WA Clackamas County, OR Columbia County, OR Multnomah County, OR Washington County, OR Yamhill County, OR Clark County, WA Skamania County, WA 1.1495 38940 Port St. Lucie, FL Martin County, FL St. Lucie County, FL 1.0740 39100 Poughkeepsie-Newburgh-Middletown, NY Dutchess County, NY Orange County, NY 1.1350 39140 Prescott, AZ Yavapai County, AZ 1.2253 39300 Providence-New Bedford-Fall River, RI-MA Bristol County, MA Bristol County, RI Kent County, RI Newport County, RI Providence County, RI Washington County, RI 1.0731 39340 Provo-Orem, UT Juab County, UT Utah County, UT 0.9336 39380 Pueblo, CO Pueblo County, CO 0.8735 39460 Punta Gorda, FL Charlotte County, FL 0.8773 39540 Racine, WI Racine County, WI 1.0597 39580 Raleigh-Cary, NC Franklin County, NC Johnston County, NC Wake County, NC 0.9827 39660 Rapid City, SD Meade County, SD Pennington County, SD 1.0459 39740 Reading, PA Berks County, PA 0.8918 39820 Redding, CA Shasta County, CA 1.4146CMS-1498-P 1190

CBSA Code Urban Area (Constituent Counties) Proposed LTCH PPS Wage Index 39900 Reno-Sparks, NV Storey County, NV Washoe County, NV 1.0436 40060 Richmond, VA Amelia County, VA Caroline County, VA Charles City County, VA Chesterfield County, VA Cumberland County, VA Dinwiddie County, VA Goochland County, VA Hanover County, VA Henrico County, VA King and Queen County, VA King William County, VA Louisa County, VA New Kent County, VA Powhatan County, VA Prince George County, VA Sussex County, VA Colonial Heights City, VA Hopewell City, VA Petersburg City, VA Richmond City, VA 0.9677 40140 Riverside-San Bern ardino-Ontario, CA Riverside County, CA San Bernardino County, CA 1.1553 40220 Roanoke, VA Botetourt County, VA Craig County, VA Franklin County, VA Roanoke County, VA Roanoke City, VA Salem City, VA 0.8841 40340 Rochester, MN Dodge County, MN Olmsted County, MN Wabasha County, MN 1.0960CMS-1498-P 1191

CBSA Code Urban Area (Constituent Counties) Proposed LTCH PPS Wage Index 40380 Rochester, NY Livingston County, NY Monroe County, NY Ontario County, NY Orleans County, NY Wayne County, NY 0.8609 40420 Rockford, IL Boone County, IL Winnebago County, IL 1.0049 40484 Rockingham County-Strafford County, NH Rockingham County, NH Strafford County, NH 1.0042 40580 Rocky Mount, NC Edgecombe County, NC Nash County, NC 0.9049 40660 Rome, GA Floyd County, GA 0.8817 40900 Sacramento--Arden-Arcade--Roseville, CA El Dorado County, CA Placer County, CA Sacramento County, CA Yolo County, CA 1.3949 40980 Saginaw-Saginaw Township North, MI Saginaw County, MI 0.8742 41060 St. Cloud, MN Benton County, MN Stearns County, MN 1.1060 41100 St. George, UT Washington County, UT 0.9148 41140 St. Joseph, MO-KS Doniphan County, KS Andrew County, MO Buchanan County, MO DeKalb County, MO 1.0318CMS-1498-P 1192

CBSA Code Urban Area (Constituent Counties) Proposed LTCH PPS Wage Index 41180 St. Louis, MO-IL Bond County, IL Calhoun County, IL Clinton County, IL Jersey County, IL Macoupin County, IL Madison County, IL Monroe County, IL St. Clair County, IL Crawford County, MO Franklin County, MO Jefferson County, MO Lincoln County, MO St. Charles County, MO St. Louis County, MO Warren County, MO Washington County, MO St. Louis City, MO 0.9105 41420 Salem, OR Marion County, OR Polk County, OR 1.1151 41500 Salinas, CA Monterey County, CA 1.5711 41540 Salisbury, MD Somerset County, MD Wicomico County, MD 0.9020 41620 Salt Lake City, UT Salt Lake County, UT Summit County, UT Tooele County, UT 0.9281 41660 San Angelo, TX Irion County, TX Tom Green County, TX 0.8317 41700 San Antonio-New Braunfels, TX Atascosa County, TX Bandera County, TX Bexar County, TX Comal County, TX Guadalupe County, TX Kendall County, TX Medina County, TX Wilson County, TX 0.9013CMS-1498-P 1193

CBSA Code Urban Area (Constituent Counties) Proposed LTCH PPS Wage Index 41740 San Diego-Carlsbad-San Marcos, CA San Diego County, CA 1.1858 41780 Sandusky, OH Erie County, OH 0.8700 41884 San Francisco-San Ma teo-Redwood City, CA Marin County, CA San Francisco County, CA San Mateo County, CA 1.5740 41900 San Germán-Cabo Rojo, PR Cabo Rojo Municipio, PR Lajas Municipio, PR Sabana Grande Municipio, PR San Germán Municipio, PR 0.4567 41940 San Jose-Sunnyvale-Santa Clara, CA San Benito County, CA Santa Clara County, CA 1.6730CMS-1498-P 1194

CBSA Code Urban Area (Constituent Counties) Proposed LTCH PPS Wage Index 41980 San Juan-Caguas-Guaynabo, PR Aguas Buenas Municipio, PR Aibonito Municipio, PR Arecibo Municipio, PR Barceloneta Municipio, PR Barranquitas Municipio, PR Bayamón Municipio, PR Caguas Municipio, PR Camuy Municipio, PR Canóvanas Municipio, PR Carolina Municipio, PR Cataño Municipio, PR Cayey Municipio, PR Ciales Municipio, PR Cidra Municipio, PR Comerío Municipio, PR Corozal Municipio, PR Dorado Municipio, PR Florida Municipio, PR Guaynabo Municipio, PR Gurabo Municipio, PR Hatillo Municipio, PR Humacao Municipio, PR Juncos Municipio, PR Las Piedras Municipio, PR Loíza Municipio, PR Manatí Municipio, PR Maunabo Municipio, PR Morovis Municipio, PR Naguabo Municipio, PR Naranjito Municipio, PR Orocovis Municipio, PR Quebradillas Municipio, PR Río Grande Municipio, PR San Juan Municipio, PR San Lorenzo Municipio, PR Toa Alta Municipio, PR Toa Baja Municipio, PR Trujillo Alto Municipio, PR Vega Alta Municipio, PR Vega Baja Municipio, PR Yabucoa Municipio, PR 0.4303CMS-1498-P 1195

CBSA Code Urban Area (Constituent Counties) Proposed LTCH PPS Wage Index 42020 San Luis Obispo-Paso Robles, CA San Luis Obispo County, CA 1.2927 42044 Santa Ana-Anaheim-Irvine, CA Orange County, CA 1.2181 42060 Santa Barbara-Santa Maria-Goleta, CA Santa Barbara County, CA 1.1986 42100 Santa Cruz-Watsonville, CA Santa Cruz County, CA 1.6768 42140 Santa Fe, NM Santa Fe County, NM 1.0864 42220 Santa Rosa-Petaluma, CA Sonoma County, CA 1.6167 42340 Savannah, GA Bryan County, GA Chatham County, GA Effingham County, GA 0.8918 42540 Scranton--Wilkes-Barre, PA Lackawanna County, PA Luzerne County, PA Wyoming County, PA 0.8252 42644 Seattle-Tacoma-Bellevue, WA King County, WA Snohomish County, WA 1.1574 42680 Sebastian-Vero Beach, FL Indian River County, FL 0.9111 43100 Sheboygan, WI Sheboygan County, WI 0.9248 43300 Sherman-Denison, TX Grayson County, TX 0.8292 43340 Shreveport-Bossier City, LA Bossier Parish, LA Caddo Parish, LA De Soto Parish, LA 0.8550 43580 Sioux City, IA-NE-SD Woodbury County, IA Dakota County, NE Dixon County, NE Union County, SD 0.9106 43620 Sioux Falls, SD Lincoln County, SD McCook County, SD Minnehaha County, SD Turner County, SD 0.9314CMS-1498-P 1196

CBSA Code Urban Area (Constituent Counties) Proposed LTCH PPS Wage Index 43780 South Bend-Mishawaka, IN-MI St. Joseph County, IN Cass County, MI 0.9964 43900 Spartanburg, SC Spartanburg County, SC 0.9268 44060 Spokane, WA Spokane County, WA 1.0588 44100 Springfield, IL Menard County, IL Sangamon County, IL 0.9145 44140 Springfield, MA Franklin County, MA Hampden County, MA Hampshire County, MA 1.0236 44180 Springfield, MO Christian County, MO Dallas County, MO Greene County, MO Polk County, MO Webster County, MO 0.8271 44220 Springfield, OH Clark County, OH 0.9249 44300 State College, PA Centre County, PA 0.8793 44600 SteubenvilleWeirton-, WV-OH Jefferson County, OH Brooke County, WV Hancock County, WV 0.7326 44700 Stockton, CA San Joaquin County, CA 1.2576 44940 Sumter, SC Sumter County, SC 0.7873 45060 Syracuse, NY Madison County, NY Onondaga County, NY Oswego County, NY 0.9631 45104 Tacoma, WA Pierce County, WA 1.1362 45220 Tallahassee, FL Gadsden County, FL Jefferson County, FL Leon County, FL Wakulla County, FL 0.8820CMS-1498-P 1197

CBSA Code Urban Area (Constituent Counties) Proposed LTCH PPS Wage Index 45300 Tampa-St. Petersburg-Clearwater, FL Hernando County, FL Hillsborough County, FL Pasco County, FL Pinellas County, FL 0.9068 45460 Terre Haute, IN Clay County, IN Sullivan County, IN Vermillion County, IN Vigo County, IN 0.9220 45500 Texarkana, TX-Texarkana, AR Miller County, AR Bowie County, TX 0.7654 45780 Toledo, OH Fulton County, OH Lucas County, OH Ottawa County, OH Wood County, OH 0.9447 45820 Topeka, KS Jackson County, KS Jefferson County, KS Osage County, KS Shawnee County, KS Wabaunsee County, KS 0.8967 45940 Trenton-Ewing, NJ Mercer County, NJ 1.0167 46060 Tucson, AZ Pima County, AZ 0.9495 46140 Tulsa, OK Creek County, OK Okmulgee County, OK Osage County, OK Pawnee County, OK Rogers County, OK Tulsa County, OK Wagoner County, OK 0.8802 46220 Tuscaloosa, AL Greene County, AL Hale County, AL Tuscaloosa County, AL 0.8003 46340 Tyler, TX Smith County, TX 0.8078CMS-1498-P 1198

CBSA Code Urban Area (Constituent Counties) Proposed LTCH PPS Wage Index 46540 Utica-Rome, NY Herkimer County, NY Oneida County, NY 0.8485 46660 Valdosta, GA Brooks County, GA Echols County, GA Lanier County, GA Lowndes County, GA 0.7937 46700 Vallejo-Fairfield, CA Solano County, CA 1.4939 47020 Victoria, TX Calhoun County, TX Goliad County, TX Victoria County, TX 0.8232 47220 Vineland-Millville-Bridgeton, NJ Cumberland County, NJ 1.0432 47260 Virginia Beach-Norfolk-Newport News, VA-NC Currituck County, NC Gloucester County, VA Isle of Wight County, VA James City County, VA Mathews County, VA Surry County, VA York County, VA Chesapeake City, VA Hampton City, VA Newport News City, VA Norfolk City, VA Poquoson City, VA Portsmouth City, VA Suffolk City, VA Virginia Beach City, VA Williamsburg City, VA 0.8975 47300 Visalia-Porterville, CA Tulare County, CA 1.0756 47380 Waco, TX McLennan County, TX 0.8417 47580 Warner Robins, GA Houston County, GA 0.7951CMS-1498-P 1199

CBSA Code Urban Area (Constituent Counties) Proposed LTCH PPS Wage Index 47644 Warren-Troy-Farmington Hills, MI Lapeer County, MI Livingston County, MI Macomb County, MI Oakland County, MI St. Clair County, MI 0.9662 47894 Washington-Arlington-Alexandria, DC-VA-MD-WV District of Columbia, DC Calvert County, MD Charles County, MD Prince George's County, MD Arlington County, VA Clarke County, VA Fairfax County, VA Fauquier County, VA Loudoun County, VA Prince William County, VA Spotsylvania County, VA Stafford County, VA Warren County, VA Alexandria City, VA Fairfax City, VA Falls Church City, VA Fredericksburg City, VA Manassas City, VA Manassas Park City, VA Jefferson County, WV 1.0722 47940 Waterloo-Cedar Falls, IA Black Hawk County, IA Bremer County, IA Grundy County, IA 0.8476 48140 Wausau, WI Marathon County, WI 0.9358 48300 Wenatchee- East Wenatchee, WA Chelan County, WA Douglas County, WA 0.9631 48424 West Palm Beach-Boca Raton-Boynton Beach, FL Palm Beach County, FL 0.9949 48540 Wheeling, WV-OH Belmont County, OH Marshall County, WV Ohio County, WV 0.6686CMS-1498-P 1200

CBSA Code Urban Area (Constituent Counties) Proposed LTCH PPS Wage Index 48620 Wichita, KS Butler County, KS Harvey County, KS Sedgwick County, KS Sumner County, KS 0.8913 48660 Wichita Falls, TX Archer County, TX Clay County, TX Wichita County, TX 0.9581 48700 Williamsport, PA Lycoming County, PA 0.7267 48864 Wilmington, DE-MD-NJ New Castle County, DE Cecil County, MD Salem County, NJ 1.0597 48900 Wilmington, NC Brunswick County, NC New Hanover County, NC Pender County, NC 0.9150 49020 Winchester, VA-WV Frederick County, VA Winchester City, VA Hampshire County, WV 1.0018 49180 Winston-Salem, NC Davie County, NC Forsyth County, NC Stokes County, NC Yadkin County, NC 0.8953 49340 Worcester, MA Worcester County, MA 1.1030 49420 Yakima, WA Yakima County, WA 1.0083 49500 Yauco, PR Guánica Municipio, PR Guayanilla Municipio, PR Peñuelas Municipio, PR Yauco Municipio, PR 0.3542 49620 York-Hanover, PA York County, PA 0.9542 49660 Youngstown-Warren-Boardman, OH-PA Mahoning County, OH Trumbull County, OH Mercer County, PA 0.8639CMS-1498-P 1201

CBSA Code Urban Area (Constituent Counties) Proposed LTCH PPS Wage Index 49700 Yuba City, CA Sutter County, CA Yuba County, CA 1.1061 49740 Yuma, AZ Yuma County, AZ 0.9298CMS-1498-P 1202

TABLE 12B.—PROPOSED LTCH PPS WAGE INDEX FOR R URAL AREAS FOR DISCHARGES OCCURRING FROM OCTOBER 1, 2010 THROUGH SEPTEMBER 30, 2011

CBSA Code Nonurban Area Proposed LTCH PPS Wage Index 01 Alabama 0.7376 02 Alaska 1.2646 03 Arizona 0.9094 04 Arkansas 0.7234 05 California 1.2456 06 Colorado 0.9949 07 Connecticut 1.1139 08 Delaware 0.9771 10 Florida 0.8422 11 Georgia 0.7567 12 Hawaii 1.1100 13 Idaho 0.7568 14 Illinois 0.8357 15 Indiana 0.8404 16 Iowa 0.8584 17 Kansas 0.7994 18 Kentucky 0.7827 19 Louisiana 0.7724 20 Maine 0.8602 21 Maryland 0.9189 22 Massachusetts 1.1788 23 Michigan 0.8569 24 Minnesota 0.9053 25 Mississippi 0.7647 26 Missouri 0.7648 27 Montana 0.8531 28 Nebraska 0.8920 29 Nevada 0.9365 30 New Hampshire 0.9894 31 New Jersey *

------- 32 New Mexico 0.8948 33 New York 0.8198 34 North Carolina 0.8379 35 North Dakota 0.6842 36 Ohio 0.8542 37 Oklahoma 0.7867 38 Oregon 1.0045CMS-1498-P 1203

CBSA Code Nonurban Area Proposed LTCH PPS Wage Index 39 Pennsylvania 0.8482 41 Rhode Island *

------- 42 South Carolina 0.8431 43 South Dakota 0.8549 44 Tennessee 0.7879 45 Texas 0.7818 46 Utah 0.8663 47 Vermont 0.9606 49 Virginia 0.7853 50 Washington 1.0200 51 West Virginia 0.7484 52 Wisconsin 0.8976 53 Wyoming 0.9544

* All counties within the State are classified as urban.CMS-1498-P 1204

Appendix A: Regulatory Impact Analysis

Note: The impacts of the proposed FY 2011 policy changes and paymen t rates addressed

in this Appendix do not reflect the provisions of the Patient Protection a nd Affordable Care Act

(Pub. L. 111-148), as amended by the Health Care and Education R econciliation Act of 2010

(Pub. L. 111-152. A number of the provisions of Pub. L. 111-148, as amended by Pub. L. 111-

152, affect the IPPS and the LTCH PPS and the providers and suppliers addressed in this

proposed rule. However, due to the timing of th e passage of the legisl ation, we are unable to

address those provisions in this proposed rule. Therefore, the proposed policies and payment

rates in this proposed rule do not reflect the new legislation. We plan to issue separate

documents in the Federal Register addressing the provisions of Pub. L. 111-148, as amended,

that affect our proposed policies and payment rates for FY 2011 under the IPPS and the LTCH

PPS. In addition, we plan to issue further instructions implementing the provisions of

Pub. L. 111-148, as amended, that affect the policies and payment rates for FY 2010 under the

IPPS and for RY 2010 under the LTCH PPS.

I. Overall Impact

We have examined the impacts of this proposed rule as required by Executive

Order 12866 (September 1993, Regulato ry Planning and Review) and the Regulatory Flexibility

Act (RFA) (September 19, 1980, Pub. L. 96-354), sec tion 1102(b) of the Social Security Act, the

Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4), Executive Order 13132 on Federalism,

and the Congressional Review Act (5 U.S.C. 804(2)).

Executive Order 12866 directs agencies to a ssess all costs and bene fits of available

regulatory alternatives and, if regulation is necessary, to select regulatory approaches that

maximize net benefits (including potential economic, environm ental, public health and safetyCMS-1498-P 1205

effects, distributive impacts, and equity). A regu latory impact analysis (RIA) must be prepared

for major rules with economically significant effects ($100 million or more in any 1 year).

We have determined that this proposed rule is a major rule as defined in 5 U.S.C. 804(2).

We estimate that the proposed changes for FY 2011 acute care hospital operating and capital

payments will redistribute in excess of $100 million among different types of inpatient cases.

The proposed market basket update to the IPPS rates required by the statute, in conjunction with

other proposed payment changes in this propos ed rule, would result in an estimated $142 million

decrease in FY 2011 operating payments (or - 0.1 percent increase), and an estimated $20 million

decrease in FY 2011 capital payments (or -0.2 percent change). The impact analysis of the

capital payments can be found in section VIII. of this Appendix. In addition, as described in

section IX. of this Appendix, LTCHs are expected to experience an increase in payments by

$41 million (or 0.8 percent).

Our operating impact estimate includes th e proposed -2.9 percent documentation and

coding adjustment applied to th e hospital-specific rates, the pr oposed -2.4 percent documentation

and coding adjustment applied to the Puerto Rico-specific rates and the proposed -2.9 percent

adjustment for documentation and coding changes to the IPPS standardized amounts. In

addition, our operating impact es timate includes the proposed 2.4 pe rcent market basket update

to the standardized amount. The estimates of IPPS operating payments to acute care hospitals do

not reflect any changes in hospital admissions or r eal case-mix intensity, which would also affect

overall payment changes.

The RFA requires agencies to analyze options for regulatory relief of small businesses.

For purposes of the RFA, small entities include small businesses, nonpr ofit organizations, and

small government jurisdictions. Most hospitals and most other providers and suppliers areCMS-1498-P 1206

considered to be small entities, either by bein g nonprofit organizations or by meeting the Small

Business Administration definiti on of a small business (havin g revenues of $34.5 million or less

in any 1 year). (For details on the latest standa rds for health care providers, we refer readers to

the Table of Small Business Size Standa rds for NAIC 622 found on the Small Business

Administration Office of Size Standards Web site at:

http://www.sba.gov/contractingopportunitie s/officials/size/GC-SMALL-BUS-SIZESTANDARDS.html .) For purposes of the RFA, all hosp itals and other prov iders and suppliers

are considered to be small entities. Individuals and States are not included in the definition of a

small entity. We believe that the provisions of th is proposed rule relating to acute care hospitals

would have a significant impact on small entities as explained in this Appendix. Because we

lack data on individual hospital receipts, we can not determine the number of small proprietary

LTCHs. Therefore, we are assuming that a ll LTCHs are considered small entities for the

purpose of the analysis in section IX. of this Appendix. Medicare fis cal intermediaries and

MACs are not considered to be small entities. Because we acknowledge that many of the

affected entities are small entities, the analysis discussed throughout the preamble of this

proposed rule constitutes our propos ed regulatory flexibility analysis. Therefore, we are

soliciting public comments on our es timates and analysis of the imp act of this proposed rule on

those small entities.

The Small Business Regulatory Enforc ement Fairness Act of 1996 (SBREFA),

Pub. L. 104-121, as amended by section 8302 of P ub. L. 110-28, requires an agency to provide

compliance guides for each rule or group of re lated rules for which an agency is required to

prepare a final regulatory flexibility analysis. The compliance guides associated with this

proposed rule are available on the CMS IPPS Web page atCMS-1498-P 1207

http://www.cms.hhs.gov/Acut eInpatientPPS/01_overview.asp . We also note that the Hospital

Center Web page at http://www.cms.hhs.gov/center/hospital.asp was developed to assist

hospitals in understanding and adapting to chan ges in Medicare regulations and in billing and

payment procedures. This Web page provide s hospitals with substantial downloadable

explanatory materials.

In addition, section 1102(b) of the Act requires us to prepare a regulatory impact analysis

for any proposed or final rule that may have a significant impact on the operations of a

substantial number of sma ll rural hospitals. This analysis must conform to the provisions of

section 603 of the RFA. With the exception of hospitals located in certain New England

counties, for purposes of section 1102(b) of the Ac t, we now define a small rural hospital as a

hospital that is located outside of an urban area and has fewer than 100 beds. Section 601(g) of

the Social Security Amendments of 1983 (Pub. L. 98-21) designated hospitals in certain New

England counties as belonging to the adjacent urban area. Thus, for purposes of the IPPS and the

LTCH PPS, we continue to classify these hospitals as urban hospitals. (We refer readers to

Table 1 and section VI. of this Appendix for the quantitative effects of the proposed policy

changes under the IPPS for operating costs.)

Section 202 of the Unfunded Mandates Refo rm Act of 1995 (Pub. L. 104-4) also requires

that agencies assess anticipated costs and benefits before issuing any rule whose mandates

require spending in any 1 year of $100 million in 1995 dollars, updated annually for inflation.

That threshold level is curre ntly approximately $133 million. This proposed rule would not

mandate any requirements for State, local, or tr ibal governments, nor would it affect private

sector costs.CMS-1498-P 1208

Executive Order 13132 establishes certain require ments that an agency must meet when it

promulgates a proposed rule (and subsequent fi nal rule) that imposes substantial direct

requirement costs on State and local governme nts, preempts State law, or otherwise has

Federalism implications. As stated above, this pro posed rule would not have a substantial effect

on State and local governments.

The following analysis, in conjunction with th e remainder of this document, demonstrates

that this proposed rule is consistent with the regulatory philosophy and principles identified in

Executive Order 12866, the RFA, and section 1102(b) of the Act. The proposed rule would

affect payments to a substantial number of sma ll rural hospitals, as well as other classes of

hospitals, and the effects on some hospitals may be significant.

II. Objectives of the IPPS

The primary objective of the IPPS is to create incentives for hospitals to operate

efficiently and minimize unnecessary costs while at the same time ensuring that payments are

sufficient to adequately compensate hospitals fo r their legitimate costs. In addition, we share

national goals of preserving the Me dicare Hospital Insurance Trust Fund.

We believe the proposed changes in this propos ed rule would further each of these goals

while maintaining the financial viability of the hospital industry and ensuring access to high

quality health care for Medicare beneficiaries. We expect that these proposed changes would

ensure that the outcomes of the prospective payment systems are reasonable and equitable while

avoiding or minimizing unintended adverse consequences.

III. Limitations of Our Analysis

The following quantitative analysis presents th e projected effects of our proposed policy

changes, as well as statutory changes effec tive for FY 2011, on various hospital groups. WeCMS-1498-P 1209

estimate the effects of individual policy changes by estimating payments per case while holding

all other payment policies constant. We use the best data available, but , generally, we do not

attempt to make adjustments for future changes in such variables as admissions, lengths of stay,

or case-mix. However, in the FY 2008 IPPS final rule with comment period, we indicated that

we believe that implementation of the MS-DRGs w ould lead to increases in case-mix that do not

reflect actual increases in patients’ severity of illness as a result of more comprehensive

documentation and coding. As expl ained in section II.D. of the preamble of this proposed rule,

the FY 2008 IPPS final rule with comment period established a documentation and coding

adjustment of -1.2 percent for FY 2008, -1.8 pe rcent for FY 2009, and -1.8 percent for FY 2010

to maintain budget neutrality for the transiti on to the MS–DRGs. Subsequently, Congress

enacted Pub. L. 110–90. Section 7 of Pub. L. 110-90 reduced the IPPS documentation and

coding adjustment from -1.2 percent to -0.6 pe rcent for FY 2008 and from -1.8 percent to -0.9

percent for FY 2009. In the FY 2010 IPPS/RY 2010 LTCH PPS final rule (74 FR 43773), we

postponed the documentation and coding adjustme nt to the average standardized amount until

FY 2011 and did not apply the adjustment to the average standardized amount for FY 2010. An

analysis of the FY 2008 IPPS claims data and the FY 2009 IPPS claims data found that an

estimated recoupment adjustment of -5.8 percent applied to the na tional standardized amount is

required to remove the full effects of docume ntation and coding due to the transition to

MS-DRGs. Therefore, we are proposing to reduce the national standardized amount for IPPS

hospitals by 2.9 percent in FY 2011 with a dditional reductions in subsequent years.

Furthermore, we believe that hospitals th at are paid under the hospital-specific payment

rate, specifically SCHs and MDHs, experience similar increases in case-mix due to

documentation and coding changes that do not refl ect real changes in case-mix. Our actuarialCMS-1498-P 1210

office estimates that hospitals paid under the hos pital-specific rate ex perienced a 4.8 percent

increase in payments due to documentation and coding changes in FY 2008 and FY 2009. We

did not apply a documentation and coding adjustme nt to the hospital-specific rates when we first

implemented the MS-DRG system. In the FY 2010 IPPS/RY 2010 LTCH PPS final rule

(74 FR43776 ), we postponed the documentation and coding adjustment to the hospital-specific

payment rate until FY 2011 and did not apply the adjustment to hospital-specific payment rate

for FY 2010. We believe that SCHs and MDHs pa id under the hospital-specific rate also should

receive an adjustment to the hospital-specific rate due to changes in documentation and coding

that do not reflect real changes in case-mix. Our best estimate, based on the most recently

available data, is that a cumula tive adjustment of -5.4 percent to the hospital-specific payment

rate would address the effect of the document ation and coding changes on future payments.

Therefore, for FY 2011, we are proposing to a pply a -2.9 percent documentation and coding

adjustment to the hospital-specific payment rate.

Our analysis, as described in section II.D. of the preamble of this proposed rule, shows

that Puerto Rico hospitals experienced an incr ease in case-mix by 1.1 percent in FY 2008 due to

changes in documentation and coding. We did not apply a documentation and coding adjustment

to the Puerto Rico-specific rate when we first implemented the MS-DRG system. In the FY

2010 IPPS/RY 2010 LTCH PPS final rule (74 FR 43777), consistent with our decision to

postpone documentation and coding adjustments for the hospital- specific rate and the Federal

standardized amount, we also postponed the documen tation and coding adjustment to the PuertoRico specific payment rate Analysis of claims data from Puerto Rico hospitals found that a

cumulative adjustment of -2.4 percent is re quired to eliminate the full effect of the

documentation and coding changes on future paym ents from the Puerto Rico-specific rate.CMS-1498-P 1211

Therefore, for FY 2011, we are proposing to apply a -2.4 percent adjustment to the Puerto Ricospecific rate to account for changes due to documentation and coding.

The impacts shown below illustrate the impact of the proposed FY 2011 IPPS changes on

acute care hospital operating payments, including the proposed -2.9 percent FY 2011

documentation and coding adjustment to the IPPS national standardized amount, the proposed

-2.9 percent FY 2011 documentation and coding adjustment to the hospital-specific payment

rates, and the proposed -2.4 percent FY 2011 docume ntation and coding adjustment to the Puerto

Rico-specific standardi zed amount. The proposed documentati on and coding adjustment that

would be applicable to the Federal rate under the LTCH PPS for FY 2011 is discussed in section

IX. of this Appendix. As we have done in th e previous rules, we ar e soliciting public comments

and information about the anticipated effects of the proposed changes on acute care hospitals and

our methodology for estimating them.

IV. Hospitals Included in and Excluded from the IPPS

The prospective payment systems for hospita l inpatient operating and capital-related

costs of acute care hospitals encompass most ge neral short-term, acute care hospitals that

participate in the Medicare program. There we re 33 Indian Health Service hospitals in our

database, which we excluded from the analysis due to the special characteristics of the

prospective payment methodology for these hosp itals. Among other short-term, acute care

hospitals, only the 46 such hospitals in Maryland remain excluded from the IPPS pursuant to the

waiver under section 1814(b)(3) of the Act.

As of March 2010, there are 3,472 IPPS acute care hospitals to be included in our

analysis. This represents about 64 percent of a ll Medicare-participating ho spitals. The majority

of this impact analysis focuses on this set of hospitals. There are also approximately 1,338CMS-1498-P 1212

CAHs. These small, limited service hospitals are paid on the basis of reasonable costs rather

than under the IPPS. (We refer readers to section VII. of this Appendix for a further description

of the impact of CAH-related proposed policy changes.) There are also 1,270 IPPS-excluded

hospitals and 2,169 IPPS-excluded hospital units. These IPPS-excluded hospitals and units

include IPFs, IRFs, LTCHs, RNHCIs, children's hospitals, and cancer hospitals, which are paid

under separate payment systems. Changes in the prospective payment systems for IPFs and IRFs

are made through separate rulemaking. Payment impacts for these IPPS-excluded hospitals and

units are not included in this proposed rule. The impact of the proposed update and policy

changes to the LTCH PPS for FY 2011 are discussed in section IX. of this Appendix.

V. Effects on Hospitals and Hospital Units Excluded From the IPPS

As of March 2010, there were 3,439 hospitals and hospital units excluded from the IPPS.

Of these, 78 children’s hospitals, 11 cancer hospitals, and 17 RNHCIs are being paid on a

reasonable cost basis subject to the rate -of-increase ceiling under §413.40. The remaining

providers, 228 rehabilitation hospita ls and 961 rehabilitation units, and 429 LTCHs, are paid the

Federal prospective per discharge rate under the IRF PPS and the LTCH PPS, respectively, and

507 psychiatric hospitals and 1,208 psychiatric units are paid the Federal per diem amount under

the IPF PPS. As stated above, IRFs and IPFs are not affected by rate updates in this proposed

rule. The impacts of the changes to LTCHs are discussed in section IX. of this Appendix.

In the past, certain hospitals and units excluded from the IPPS have been paid based on

their reasonable costs subject to limits as estab lished by the Tax Equity and Fiscal Responsibility

Act of 1982 (TEFRA). Cancer and children's hospitals continue to be paid on a reasonable cost

basis subject to TEFRA limits for FY 2011. For th ese hospitals (cancer and children's hospitals),

consistent with the authority pr ovided in section 1886(b)(3)(B)(ii) of the Act, the update is theCMS-1498-P 1213

percentage increase in the FY 2011 IPPS operating market basket. In compliance with section

404 of the MMA, in the FY 2010 IPPS/RY 2010 LTCH PPS final rule (74 FR 43930), we

replaced the FY 2002-based IPPS operating and capital market baskets with the revised and

rebased FY 2006-based IPPS operating and capital market baskets. Therefore, consistent with

current law, based on IHS Global Insight, Inc.'s 2 010 first quarter forecast, with historical data

through the 2009 fourth quarter, we are estimating that the proposed FY 2011 update to the IPPS

operating market basket would be 2.4 percent (that is, the current estimate of the market basket

rate-of-increase). In addition, in accordance with §403.752(a) of the regulations, RNHCIs are

paid under §413.40. Therefore, for RNHCIs, the pr oposed update is the same as for children’s

and cancer hospitals, which is the percentage increase in the FY 2011 IPPS operating market

basket increase, estimate d to be 2.4 percent.

The impact of the proposed update in the rate-of-increase limit on those excluded

hospitals depends on the cumulative cost increase s experienced by each excluded hospital since

its applicable base period. For excluded hospitals that have maintained their cost increases at a

level below the rate-of-increase limits since their ba se period, the major effect is on the level of

incentive payments these excluded hospitals recei ve. Conversely, for excluded hospitals with

per-case cost increases above the cumulative update in thei r rate-of-increase limits, the major

effect is the amount of excess co sts that will not be reimbursed.

We note that, under §413.40(d)(3), an excluded hospital that continue s to be paid under

the TEFRA system, whose costs exceed 110 percent of its rate-of-increas e limit receives its rateof-increase limit plus 50 percent of the difference between its reasonable costs and 110 percent

of the limit, not to exceed 110 percent of its limit. In addition, under the various provisions setCMS-1498-P 1214

forth in §413.40, cancer and children's hospitals ca n obtain payment adjustments for justifiable

increases in operating costs that exceed the limit.

VI. Quantitative Effects of the Policy Changes Under the IPPS for Operating Costs

A. Basis and Methodology of Estimates

In this proposed rule, we are announcing proposed policy changes and payment rate

updates for the IPPS for operating costs of acute care hospitals. Updates to the capital payments

to acute care hospitals are discussed in section VIII. of this Appendix.

Based on the overall percentage change in payments per case estimated using our payment

simulation model, we estimate that total FY 2011 operating paym ents would decrease by 0.1

percent compared to FY 2010, largely due to th e documentation and c oding adjustments and

market basket update to the IPPS rates. This amount reflects the proposed FY 2011

documentation and coding adjustme nts described above and in sec tion II.D. of the preamble of

this proposed rule: -2.9 percent for the IPPS national standardized amounts, -2.9 percent for the

IPPS hospital-specific rates, and -2.4 percent for the IPPS Puerto Rico-specific standardized

amount. The impacts do not illustrate changes in hos pital admissions or real case-mix intensity,

which will also affect overall payment changes.

We have prepared separate impact analyses of the proposed changes to each system.

This section deals with changes to the operating prospective payment system for acute care

hospitals. Our payment simulation model relies on the most recent available data to enable us to

estimate the impacts on payments pe r case of certain proposed chan ges in this proposed rule.

However, there are other proposed changes for wh ich we do not have data available that would

allow us to estimate the payment impacts using this model. For those proposed changes, weCMS-1498-P 1215

have attempted to pred ict the payment impacts based upon our experience and other more limited

data.

The data used in developing the quantitative analyses of changes in payments per case

presented below are taken from the FY 2009 MedPAR file and the most current

Provider-Specific File that is us ed for payment purposes. Although the analyses of the proposed

changes to the operating PPS do not incorporate cost data, data from the most recently available

hospital cost report were used to categorize hosp itals. Our analysis has several qualifications.

First, in this analysis, we do not make adjus tments for future changes in such variables as

admissions, lengths of stay, or underlying gr owth in real case-mix. Second, due to the

interdependent nature of the IPPS payment components, it is very difficult to precisely quantify

the impact associated with each change. Third, we use various sources for the data used to

categorize hospitals in the tables. In some cases, particularly the number of beds, there is a fair

degree of variation in the data from different s ources. We have attemp ted to construct these

variables with the best availa ble source overall. However, for individual hospitals, some

miscategorizations are possible.

Using cases from the FY 2009 MedPAR file , we simulated payments under the operating

IPPS given various combinations of payment parameters. Any short-term, acute care hospitals

not paid under the IPPS (Indian Health Service hospitals and hospitals in Maryland) were

excluded from the simulations. The impact of paym ents under the capital IPPS, or the impact of

payments for costs other than inpatient operatin g costs, are not analyzed in this section.

Estimated payment impacts of the capital IPPS for FY 2011 are discussed in section VIII. of this

Appendix.

The changes discussed separately below are the following:CMS-1498-P 1216

● The effects of the proposed annual recla ssification of diagnoses and procedures, full

implementation of the MS-DRG system and 100 percent cost-bas ed MS-DRG relative weights.

● The effects of the proposed changes in hospitals' wage index values reflecting wage

data from hospitals’ cost repor ting periods beginning during FY 2007, compared to the FY 2006

wage data.

● The effects of the recalibration of the MS -DRG relative weights as required by section

1886(d)(4)(C) of the Act, including the propos ed wage and recalibration budget neutrality

factors.

● The effects of geographic reclassifications by the MGCRB that will be effective in FY

2011.

● The effects of the third year of the 3- year transition to apply rural floor budget

neutrality adjustment at the State level. For purposes of this impact analysis, we assume that in

FY 2011, hospitals will receive a wa ge index with the State leve l rural and imputed floor budget

neutrality adjustment. Hiowever, we recognize that this policy was recently changed by the

provisions of section 3141 of Pub. L. 111-148 and will address the new im pact in a separate

document in the Federal Register

.

● The effects of section 505 of Pub. L. 108-173, which provides for an increase in a

hospital’s wage index if the hospital qualifies by meeting a threshold percen tage of residents of

the county where the hospital is located who comm ute to work at hospitals in counties with

higher wage indexes.

● The total estimated change in paymen ts based on the proposed FY 2011 policies

relative to payments based on FY 2010 policies th at include the proposed market basket update

of 2.4 percent.CMS-1498-P 1217

To illustrate the impacts of the proposed FY 2011 changes, our analysis begins with a

FY 2010 baseline simulation model using: the proposed FY 2011 market basket update of

2.4 percent; the FY 2010 MS-DRG GROUPER (Version 27.0); the most current CBSA

designations for hospitals based on OMB's MS A definitions; the FY 2010 wage index; and no

MGCRB reclassifications. Outlier payments are set at 5.1 percent of total operating MS-DRG

and outlier payments.

Section 1886(b)(3)(B)(viii) of the Act, as added by section 5001(a) of Pub. L. 109-171,

provides that, for FY 2007 and subsequent ye ars, the update factor will be reduced by

2.0 percentage points for any hospital that does not submit quality data in a form and manner and

at a time specified by the Secretary. At the time that this impact was prepared, 104 hospitals did

not receive the full market basket rate-of-inc rease for FY 2010 because they failed the quality

data submission process or did not choose to participate. For purposes of the simulations shown

below, we modeled the proposed payment change s for FY 2011 using a reduced update for these

104 hospitals. However, we do not have enough information at this time to determine which

hospitals will not receive the full market basket rate-of-increase for FY 2011.

Each policy change, statutory or otherwise, is then added incrementally to this baseline,

finally arriving at an FY 2011 model incorporating all of the changes. This simulation allows us

to isolate the effects of each proposed change.

Our final comparison illustrates the proposed percent change in payments per case from

FY 2010 to FY 2011. Three factors not discussed se parately have significant impacts here. The

first factor is the update to the standardized am ount. In accordance with section 1886(b)(3)(B)(i)

of the Act, we are proposing to update the standardized amounts for FY 2011 using the most

recently forecasted hospital market basket increas e for FY 2011 of 2.4 percent. (Hospitals thatCMS-1498-P 1218

fail to comply with the quality data submi ssion requirements to rece ive the full update will

receive an update reduced by 2.0 percentage points from 2.4 percent to 0.4 percent.) Under

section 1886(b)(3)(B)(iv) of the Act, the update s to the hospital-specific amounts for SCHs and

for MDHs are also equal to the market ba sket percentage increase, or 2.4 percent.

A second significant factor that affects th e changes in hospitals' payments per case from

FY 2010 to FY 2011 is the change in a hospital’ s geographic reclassifi cation status from one

year to the next. That is, payments may be reduced for hospitals reclassified in FY 2010 that are

no longer reclassified in FY 2011. Conversely, payments may increase for hospitals not

reclassified in FY 2010 that are reclassified in FY 2011.

A third significant factor is that we currently estimate that actual outlier payments during

FY 2011 will be 5.1 percent of total MS-DRG pa yments. When the FY 2010 final rule was

published, we projected FY 2010 outlier payments would be 5.1 percent of total MS-DRG plus

outlier payments; the average standardized amounts were offset correspondin gly. The effects of

the higher than expected outlier payments durin g FY 2010 (as discussed in the Addendum to this

proposed rule) are reflected in the analyses below comparing our current estimates of FY 2010

payments per case to estimated FY 2011 payments per case (with outlier payments projected to

equal 5.1 percent of tota l MS-DRG payments).

B. Analysis of Table I

Table I displays the results of our analysis of the proposed changes for FY 2011. The

table categorizes hospitals by various geographi c and special payment consideration groups to

illustrate the varying impacts on different types of hospitals. The top row of the table shows the

overall impact on the 3,472 acute care hos pitals included in the analysis.CMS-1498-P 1219

The next four rows of Table I contain hospitals categorized according to their geographic

location: all urban, which is furt her divided into large urban and other urban; and rural. There

are 2,502 hospitals located in urban areas included in our analysis. Among these, there are 1,365

hospitals located in large urban areas (popula tions over 1 million), and 1,137 hospitals in other

urban areas (populations of 1 milli on or fewer). In addition, there are 970 hospitals in rural

areas. The next two groupings are by bed-size categories, shown separately for urban and rural

hospitals. The final groupings by geographic location are by census divisions, also shown

separately for urban and rural hospitals.

The second part of Table I shows hospita l groups based on hospitals' FY 2011 payment

classifications, including any r eclassifications under section 1886(d)(10) of the Act. For

example, the rows labeled urban, large urban, ot her urban, and rural show that the numbers of

hospitals paid based on these categ orizations after cons ideration of geograph ic reclassifications

(including reclassifications unde r section 1886(d)(8)(B) and section 1886(d)(8)(E) of the Act that

have implications for capital paymen ts) are 2,555, 1,403, 1,152 and 917, respectively.

The next three groupings examine the impact s of the changes on hospitals grouped by

whether or not they have GME residency programs (teaching hospitals that receive an IME

adjustment) or receive DSH payments, or some co mbination of these two adjustments. There are

2,434 nonteaching hospitals in our analysis, 798 teaching hospitals with fewer than 100

residents, and 240 teaching hospita ls with 100 or more residents.

In the DSH categories, hospitals are grouped according to their DSH payment status, and

whether they are considered urban or rural for DSH purposes. The next category groups together

hospitals considered urban or ru ral, in terms of whether they receive the IME adjustment, the

DSH adjustment, both, or neither.CMS-1498-P 1220

The next five rows examine the impacts of the changes on rural hospitals by special

payment groups (SCHs, RRCs, and MDHs). There were 183 RRCs, 340 SCHs, 187 MDHs, and

108 hospitals that are both SCHs and RRCs, and 13 hospitals that are both an MDH and an RRC.

The next series of groupings are based on the type of ownership and the hospital's

Medicare utilization expressed as a percent of tota l patient days. These data were taken from the

FY 2008 or FY 2007 Medicare cost reports.

The next two groupings concern the geographic reclassification status of hospitals. The

first grouping displays all urban hospitals that were reclassified by the MGCRB for FY 2011.

The second grouping shows the MGCRB rural reclassifications.

The final category shows the impact of the proposed policy changes on the 19 cardiac

hospitals in our analysis.CMS-1498-P 1221TABLE I.--IMPACT ANALYSIS OF PROPOSED CHANGES TO THE IPPS FOR OPERATING COSTS FOR FY 2011**No. of Hos** **pitals Pro** **posed FY 2011** **Weights & MS** **DRG Change** **s (1)** **Appli ca** **tion of** **Recal i** **bratio n** **Budg et** **Neu trality** **(2) Pro** **posed FY** **2011 Wage** **Data (3)** **Applica tion of** **Wage Budget** **Neu-trality (4)** **Pro posed FY** **2011 DRG, Rel.** **Wts., Wage** **Index Changes,** **with Wage** **and Recal** **ibration Budget** **Neutrality (5)** **FY 2011 MGCRB** **Reclass ifica** **tions (6)** **Pro posed** **Rural Floor** **Budget Neu** **trality and** **Within State** **Rural Floor** **Budget Neu** **trality (7)** **Pro posed FY** **2011 Out Migra** **tion Adjust** **ment (8)** **All Pro posed** **FY 2011 Changes** **Prior to the CMI Adjust** **ment (9)** **All Pro posed** **FY 2011 Changes** **w/CMI Adjust-ment** **(10)**All Hospitals3,4720.300000002.8-0.1By GeographicLocation:Urban hospitals2,5020.30000-0.2002.8-0.1Large urban areas1,3650.2-0.100.10-0.3-0.102.8-0.1Other urban areas1,1370.40.1-0.1-0.1000.102.9-0.1Rural hospitals9700.300001.6-0.10.12.4-0.5Bed Size (Urban):0-99 beds6350.60.2000.3-0.5002.90100-199 beds7910.2-0.100000.102.7-0.2200-299 beds4610.30000-0.1002.7-0.2300-499 beds4250.30000-0.2002.8-0.1500 or more beds1900.30-0.1-0.10-0.2-0.1030.1Bed Size (Rural):0-49 beds3370.60.30.10.10.30.600.22.9050-99 beds3660.300000.600.12.1-0.8100-149 beds1640.300002.1-0.10.12.5-0.4150-199 beds610.30000.12.4-0.102.6-0.3200 or more beds420.2-0.100.1-0.12.3002.1-0.8Urban by Region:New England1210.1-0.2-0.4-0.4-0.60.9002-0.9CMS-1498-P 1222**No. of Hos** **pitals Pro** **posed FY 2011** **Weights & MS** **DRG Change** **s (1)** **Appli ca** **tion of** **Recal i** **bratio n** **Budg et** **Neu trality** **(2) Pro** **posed FY** **2011 Wage** **Data (3)** **Applica tion of** **Wage Budget** **Neu-trality (4)** **Pro posed FY** **2011 DRG, Rel.** **Wts., Wage** **Index Changes,** **with Wage** **and Recal** **ibration Budget** **Neutrality (5)** **FY 2011 MGCRB** **Reclass ifica** **tions (6)** **Pro posed** **Rural Floor** **Budget Neu** **trality and** **Within State** **Rural Floor** **Budget Neu** **trality (7)** **Pro posed FY** **2011 Out Migra** **tion Adjust** **ment (8)** **All Pro posed** **FY 2011 Changes** **Prior to the CMI Adjust** **ment (9)** **All Pro posed** **FY 2011 Changes** **w/CMI Adjust-ment** **(10)**Middle Atlantic3300.30-0.3-0.3-0.30.2002.3-0.6South Atlantic3830.1-0.200-0.2-0.3002.8-0.1East North Central4030.1-0.10.20.20.1-0.20030.1East South Central1550.40.2-0.5-0.6-0.4-0.2002.5-0.4West North Central1660.50.2-0.1-0.10.1-0.70030.1West South Central3420.50.20.20.20.4-0.6003.20.3Mountain1620.30000-0.30030Pacific3900.60.20.40.40.5-0.3003.40.5Puerto Rico500.90.7-0.3-0.30.4-0.8003.10.3Rural by Region:New England240.2-0.200-0.20.5001.2-1.6Middle Atlantic70-0.1-0.40.40.401.4-0.102.1-0.8South Atlantic165-0.2-0.5-0.3-0.4-0.9200.11.8-1East North Central1200.30-0.1-0.1-0.21.3002.2-0.7East South Central1750.60.30.20.20.52.4-0.10.22.7-0.2West North Central1000.70.4000.40.5002.8-0.1West South Central2140.70.50.30.40.81.900.13.40.4Mountain710.70.4000.40.1002.8-0.1Pacific310-0.40.30.3-0.10.9-0.301.4-1.5By PaymentClassification:Urban hospitals2,5550.30000-0.2002.8-0.1Large urban areas1,4030.2000.10-0.3-0.102.8-0.1CMS-1498-P 1223**No. of Hos** **pitals Pro** **posed FY 2011** **Weights & MS** **DRG Change** **s (1)** **Appli ca** **tion of** **Recal i** **bratio n** **Budg et** **Neu trality** **(2) Pro** **posed FY** **2011 Wage** **Data (3)** **Applica tion of** **Wage Budget** **Neu-trality (4)** **Pro posed FY** **2011 DRG, Rel.** **Wts., Wage** **Index Changes,** **with Wage** **and Recal** **ibration Budget** **Neutrality (5)** **FY 2011 MGCRB** **Reclass ifica** **tions (6)** **Pro posed** **Rural Floor** **Budget Neu** **trality and** **Within State** **Rural Floor** **Budget Neu** **trality (7)** **Pro posed FY** **2011 Out Migra** **tion Adjust** **ment (8)** **All Pro posed** **FY 2011 Changes** **Prior to the CMI Adjust** **ment (9)** **All Pro posed** **FY 2011 Changes** **w/CMI Adjust-ment** **(10)**Other urban areas1,1520.40.1-0.1-0.1000.102.9-0.1Rural areas9170.300001.400.12.3-0.5Teaching Status:Nonteaching2,4340.400.10.10.10.2002.8-0.1Fewer than 100residents7980.30-0.1-0.1-0.1-0.2002.7-0.2100 or moreresidents2400.30-0.1-0.1-0.1-0.2-0.102.90Urban DSH:Non-DSH8340.50.10000.1002.90100 or more beds1,5100.30000-0.2002.8-0.1Less than 100beds3400.2-0.1000-0.3-0.102.4-0.5Rural DSH:SCH4070.300000.200.12.3-0.6RRC2090.2-0.10.10.102.3-0.102.3-0.6100 or more beds300.1-0.2-0.3-0.3-0.51.200.32.3-0.6Less than 100beds1420.40.200.10.20.9-0.10.52.2-0.7Urban teachingand DSH:Both teaching andDSH8060.30-0.1-0.1-0.1-0.3002.8-0.1Teaching and noDSH1690.3-0.1-0.2-0.2-0.20.4002.7-0.2No teaching andDSH1,0440.300.20.20.200.102.8-0.1CMS-1498-P 1224**No. of Hos** **pitals Pro** **posed FY 2011** **Weights & MS** **DRG Change** **s (1)** **Appli ca** **tion of** **Recal i** **bratio n** **Budg et** **Neu trality** **(2) Pro** **posed FY** **2011 Wage** **Data (3)** **Applica tion of** **Wage Budget** **Neu-trality (4)** **Pro posed FY** **2011 DRG, Rel.** **Wts., Wage** **Index Changes,** **with Wage** **and Recal** **ibration Budget** **Neutrality (5)** **FY 2011 MGCRB** **Reclass ifica** **tions (6)** **Pro posed** **Rural Floor** **Budget Neu** **trality and** **Within State** **Rural Floor** **Budget Neu** **trality (7)** **Pro posed FY** **2011 Out Migra** **tion Adjust** **ment (8)** **All Pro posed** **FY 2011 Changes** **Prior to the CMI Adjust** **ment (9)** **All Pro posed** **FY 2011 Changes** **w/CMI Adjust-ment** **(10)**No teaching and noDSH5360.60.2000.2-0.2003.10.2Special HospitalTypes:RRC1830.40.1000.22.9-0.102.5-0.4SCH3400.300000002.3-0.5MDH1870.2-0.100-0.10.4-0.10.22.3-0.6SCH and RRC1080.2-0.2-0.1-0.1-0.20.7002.1-0.8MDH and RRC130.400.20.20.20.200.12.2-0.6Type of Ownership:Voluntary19780.300000002.7-0.2Proprietary8370.40.10.20.20.3-0.10030.1Government5770.30-0.1-0.100.10.102.9-0.1MedicareUtilization as aPercent of InpatientDays:0-253530.2-0.1000-0.4-0.102.8-0.125-501,5930.30000-0.3002.9-0.150-651,2020.300-0.1-0.10.6002.6-0.3Over 652370.40.2-0.1-0.200.60.102.7-0.2FY 2011Reclassificationsby the MedicareGeographicClassificationReview Board:CMS-1498-P 1225**No. of Hos** **pitals Pro** **posed FY 2011** **Weights & MS** **DRG Change** **s (1)** **Appli ca** **tion of** **Recal i** **bratio n** **Budg et** **Neu trality** **(2) Pro** **posed FY** **2011 Wage** **Data (3)** **Applica tion of** **Wage Budget** **Neu-trality (4)** **Pro posed FY** **2011 DRG, Rel.** **Wts., Wage** **Index Changes,** **with Wage** **and Recal** **ibration Budget** **Neutrality (5)** **FY 2011 MGCRB** **Reclass ifica** **tions (6)** **Pro posed** **Rural Floor** **Budget Neu** **trality and** **Within State** **Rural Floor** **Budget Neu** **trality (7)** **Pro posed FY** **2011 Out Migra** **tion Adjust** **ment (8)** **All Pro posed** **FY 2011 Changes** **Prior to the CMI Adjust** **ment (9)** **All Pro posed** **FY 2011 Changes** **w/CMI Adjust-ment** **(10)**All ReclassifiedHospitals8100.300.10.101.8-0.102.8-0.1Non-ReclassifiedHospitals2,6620.30000-0.6002.8-0.1Urban HospitalsReclassified4880.300.10.101.6-0.202.9-0.1UrbanNonreclassifiedHospitals, FY 2011:1,9850.30000-0.70.102.8-0.1All Rural HospitalsReclassified FY 2011:3220.300.10.10.12.7-0.102.6-0.3Rural NonreclassifiedHospitals FY 2011:5850.40000.1-0.300.22.2-0.7All Section 401ReclassifiedHospitals:37-0.1-0.4-0.1-0.1-0.5-0.3001.8-1.1Other ReclassifiedHospitals (Section1886(d)(8)(B))63-0.2-0.5-0.2-0.2-0.62.9-0.101.7-1.2Specialty HospitalsCardiac specialtyHospitals191.10.80.30.31.1-0.8003.70.81Because data necessary to classifysome hospitals by category were missing, the total number of hospitals in each category may not equal the national total. Discharge data are from FY 2009, andhospital cost report data are from reporting periods beginning in FY 2008 and FY 2007.2This column displays the payment impact of the proposed changes to the Version 28 GROUPER and the recalibration of the MS-DRGweights based on FY 2009 MedPAR data in accordance withsection 1886(d)(4)(C)(iii) of the Act.3This column displays the application of the recalibration budget neutrality factor of 0.996856, in accordance with section 1886(d)(4)(C)(iii) of the Act.4.This column displays the proposed payment impact of the update to wage index data using FY 2007 cost report data.5This column displays the payment impact of the application of the wage budget neutrality factor in accordance with section 1886(d)(3)(E)(i) of the Act. This factor is calculated separately from therecalibration budget neutrality factor. The wage budget neutrality factor is1.000107.CMS-1498-P 12266This column displays the combined payment impact of the proposed changes in Columns 2 through 5 and the proposed cumulative budget neutrality factor for MS-DRG and wage changes inaccordance with section 1886(d)(4)(C)(iii) of the Act and section 1886(d)(3)(E) of the Act. The cumulative wage and recalibration budget neutrality factor of 0.996963is the product of the wage budgetneutrality factor and the recalibration budget neutrality factor.7Shown here are the effects of geographic reclassifications by the Medicare Geographic Classification Review Board (MGCRB). The effects demonstrate the FY 2011 payment impact of going from noreclassifications to the reclassifications scheduled to be in effect for FY 2011. Reclassification for prior years has no bearing on the payment impacts shown here. This column reflects the geographicbudget neutrality factor of 0.991756.8This column displays the effects of the rural floor and the imputed floor, including the transition to the rural floor budgetneutrality adjustment at the State level. Under the transition, hospitals willreceive a blended wage index that is 100 percent of a wage index with the State level rural and imputed floor budget neutralityadjustment.9This column displays the impact of section 505 of Pub. L. 108-173, which provides for an increase in a hospital’s wage index if the hospital qualifies by meeting a threshold percentage of residents ofthe county where the hospital is located who commute to work at hospitals in counties with higher wage indexes.10This column shows the proposed changes in payments from FY 2010 to FY 2011. It reflects the impact of the proposed FY 2011 market basket update, and the proposed reductions to the FY 2011standardized amount due to the documentation and coding effect. The proposed FY 2011 documentation and coding adjustment is -2.9 percent to the IPPS standardized amounts, -2.9 percent to thehospital-specific rates, and -2.4 percent to the Puerto Rico-specific amount. It also reflects changes in hospitals’ reclassification status in FY 2011 compared to FY 2010. It incorporates all of theproposed changes displayed in Columns 5, 6, 7, and 8 (the changes displayed in Columns 2, 4 are included in Column 5). The sumof these impacts may be different from the percentage changes shownhere due to rounding and interactive effects.CMS-1498-P 1227

C. Effects of the Proposed Changes to the MS -DRG Reclassifications and Relative Cost-Based

Weights (Column 1)

In Column 1 of Table I, we present the ef fects of the proposed MS -DRG reclassifications,

as discussed in section II. of the preamble to this proposed rule. Section 1886(d)(4)(C)(i) of the

Act requires us annually to make appropriate classification chan ges in order to reflect changes in

treatment patterns, technology, and any other fact ors that may change the relative use of hospital

resources.

As discussed in the preamble of this proposed rule, the proposed FY 2011 MS-DRG

relative weights will be 100 percent cost-bas ed and 100 percent MS-DRGs. For FY 2011, the

MS-DRGs are calculated using the FY 2009 Me dPAR data grouped to the Version 28.0 (FY

2011) MS-DRGs. The methods of calculatin g the proposed relative weights and the

reclassification changes to the GROUPER are desc ribed in more detail in section II.H. of the

preamble to this proposed rule. The proposed changes to the relative weights and MS-DRGs

shown in Column 2 are prior to any offset for budget neutrality. Overall, hospitals will

experience a 0.3 percent increase in payments due to the changes in the MS-DRGs and relative

weights prior to budget neutralit y. Urban hospitals and rura l hospitals will experience a 0.3

percent increase in payments under the upda tes to the relative weights and MS-DRGs.

D. Effects of the Application of R ecalibration Budget Neutrality (Column 2)

Column 2 shows the effects of the changes to the MS-DRGs and relative weights with the

application of the recalibration budge t neutrality factor to the standardized amounts. Consistent

with section 1886(d)(4)(C)(iii) of the Act, we are calculating a recalibration budget neutrality

factor to account for the changes in MS-DRGs and relative weights to ensure that the overall

payment impact is budget neutral. In FY 2010, we began calculating a budget neutrality factor toCMS-1498-P 1228

account for changes in MS-DRGs and relative we ights separately from the budget neutrality

factor to account for changes in wage data. In addition, as described in section II.A.4. of the

Addendum to this proposed rule, we are includi ng IME payments made on Medicare Advantage

claims to IPPS hospitals in order to calculate budget neutrality.

The “All Hospitals” line in Column 1 indicat es that proposed changes due to MS-DRGs

and relative weights will increase payments by 0.3 percent before application of the budget

neutrality factor. The proposed recalibrati on budget neutrality factor is 0.996856, which is

applied to the standardized amount. Thus, the impact after accounting only for budget neutrality

for changes to the MS-DRG relative weights and classification is somewhat lower than the

figures shown in Column 1 (approximately 0.3 pe rcent). Consequentia lly, urban and rural

hospitals will not experience a change in payments when recalibration budget neutrality is

applied.

E. Effects of Proposed Wage Index Changes (Column 3)

Section 1886(d)(3)(E) of the Act requires that, beginning October 1, 1993, we annually

update the wage data used to calcu late the wage index. In accordance with this requirement, the

proposed wage index for acute ca re hospitals for FY 2011 is base d on data submitted for hospital

cost reporting periods beginning on or after October 1, 2006 and before October 1, 2007. The

estimated impact of the updated wage data and labor share on hospital payments is isolated in

Column 3 by holding the other payment parameters constant in this simulation. That is, Column

3 shows the percentage change in payments when going from a model using the FY 2010 wage

index, based on FY 2006 wage data, the curren t labor-related share and having a 100-percent

occupational mix adjustment a pplied, to a model using the FY 2011 pre-reclassification wage

index with the labor-related share, also havi ng a 100-percent occupational mix adjustmentCMS-1498-P 1229

applied, based on FY 2007 wage da ta (while holding other payment parameters such as use of

the Version 28.0 MS-DRG GROUPER constant). The occupational mix adjustment is based on

the FY 2008/2009 occupational mix survey.

Column 3 shows the impacts of updating the wage data using FY 2007 cost reports.

Overall, the new wage data will lead to a 0.0 percent chan ge for all hospitals before being

combined with the wage budget neutrality adjustment shown in Column 5. Among the regions,

the largest increase is in the rural Middle A tlantic region, which experiences a 0.4 percent

increase before applying an adjustment for budget neutrality. The largest decline from updating

the wage data is seen in Urban East South Central (0.5 percent decrease).

In looking at the wage data itself, the na tional average hourly wage increased 1.2 percent

compared to FY 2010. Therefore, the only manner in which to maintain or exceed the previous

year's wage index was to match or exceed the national 1.2 percent increase in average hourly

wage. Of the 3,442 hospitals with wage data for both FYs 2010 and 2011, 2,696, or 78.3

percent, experienced an average hourly wage increase of 1.2 percent or more.

The following chart compares the shifts in proposed wage index values for hospitals for

FY 2011 relative to FY 2010. Among urban hosp itals, 39 will experience an increase of more

than 5 percent and less than 10 percent and 7 will experience an increase of more than

10 percent. Among rural hospitals, 2 will experience an increase of more than 5 percent and less

than 10 percent, and none will experience an incr ease of more than 10 percent. However, 938

rural hospitals will experience increases or decr eases of less than 5 pe rcent, while 2,415 urban

hospitals will experience increases or decreases of less than 5 percent. Twenty-four urban

hospitals will experience decreases in their wage index values of more than 5 percent and less

than 10 percent. Sixteen urban hospitals will experience decreases in their wage index values ofCMS-1498-P 1230

greater than 10 percent. One rural hospital will experience a decrease of more than 10 percent.

These figures reflect changes in the wage index wh ich is an adjustment to either 68.8 percent or

62 percent of a hospital’s standardized amount , depending upon whether its wage index is

greater than 1.0 or less than or equal to 1.0. Ther efore, these figures are illustrating a somewhat

larger change in the wage index than will occur to the hospital’s total payment.

The following chart shows the projected impact for urban and rural hospitals.

Percentage Change in Area Wage I ndex Values Number of Hospitals Urban Rural Increase more than 10 percent 7 0 Increase more than 5 percent and less than 10 percent 39 2 Increase or decrease less than 5 percent 2,415 938 Decrease more than 5 percent and less than 10 percent 24 0 Decrease more than 10 percent 16 1

F. Application of the Wage Budg et Neutrality Factor (Column 4)

Column 4 shows the impact of the new wage da ta with the application of the wage budget

neutrality factor. In FY 2010, we began calcu lating separate wage budget neutrality and

recalibration budget neutrality factors, in acco rdance with section 1886(d)(3)(E) of the Act,

which specifies that budget neutrality to account for wage changes or updates made under that

subparagraph must be made without regard to the 62 percent labor-related share guaranteed

under section 1886(d)(3)(E)(ii) of the Act. Ther efore, for FY 2011, we are calculating the wage

budget neutrality factor to ensure that paym ents under updated wage data and the proposed

labor-related share are budget neutral without re gard to the lower labor-related share of 62

percent applied to hospitals with a wage index less than or equal to 1. In other words, the wage

budget neutrality is calculated under the assumption that all hospitals receive the higher laborrelated share of the standardized amount. Because the wage data changes did not change overallCMS-1498-P 1231

payments (displayed in Column 3), the wage budget neutrality factor is minimal at 1.000107, and

the overall payment change is 0.0 percent.

G. Combined Effects of Proposed MS-DRG and Wage Index Changes (Column 5)

Section 1886(d)(4)(C)(iii) of the Act requires that changes to MS-DRG reclassifications

and the relative weights cannot increase or decr ease aggregate payments. In addition, section

1886(d)(3)(E) of the Act specifies that any updates or adjustments to the wage index are to be

budget neutral. We computed a proposed wa ge budget neutrality factor of 1.000107, and a

proposed recalibration budget neutrality factor of 0.996856 (which is applied to the Puerto Rico

specific standardized amount and the hospital-sp ecific rates). The product of the two budget

neutrality factors is the cumulative wage a nd recalibration budget neutrality factor. The

proposed cumulative wage and recalibrati on budget neutrality adjustment is 0.996963, or

approximately -0.3 percent, which is applied to the national standardized amounts. Because the

wage budget neutrality and the recalibration bud get neutrality are calculated under different

methodologies according to the statute, when the two budget neutralities are combined and

applied to the standardized amount, the overall paym ent impact is not necessarily budget neutral.

However, in this proposed rule, we are estima ting that the proposed changes in the MS-DRG,

relative weights and updated wage data with wage and budget neutrality applied will result in a

0.0 change in payments. The estimated changes shown in this column reflect the combined

effects of the changes in Columns 2, 3, and 4 and the budget neutralit y factors discussed

previously.

We estimate that the combined impact of the proposed changes to the relative weights

and MS-DRGs and the proposed updated wage data with budget neutrality applied will result in

no change in payments for urban or rural hosp itals. Urban New England would experience a 0.6CMS-1498-P 1232

decrease in payments due to reductions in th eir case-mix and wages compared to the national

average, while the urban Paci fic area would experience a 0.5 pe rcent increase in payments

because of above average increases in wages and case-mix. Among the rural hospital categories,

rural South Atlantic hospitals would experience the greatest decline in payment (-0.9 percent)

primarily due to the changes to MS-DRGs and the relative cost weights.

H. Effects of MGCRB R eclassifications (Column 6)

Our impact analysis to this point has assume d acute care hospitals are paid on the basis of

their actual geographic location (with the exception of ongoing policies that provide that certain

hospitals receive payments on other bases than where they are geographically located). The

changes in Column 6 reflect the per case paymen t impact of moving from this baseline to a

simulation incorporating the MGCRB decisions fo r FY 2011 which affect hospitals' wage index

area assignments.

By spring of each year, the MGCRB makes reclassification determinations that will be

effective for the next fiscal year, which begins on October 1. The MGCRB may approve a

hospital’s reclassification request for the purpose of using another area's wage index value.

Hospitals may appeal denials of MGCRB deci sions to the CMS Administrator. Further,

hospitals have 45 days from publi cation of the IPPS rule in the Federal Register to decide

whether to withdraw or terminate an approved ge ographic reclassification for the following year.

This column reflects all MGCRB decisions, Adminis trator appeals and decisions of hospitals for

FY 2011 geographic reclassifications.

The overall effect of geographic reclassifica tion is required by section 1886(d)(8)(D) of

the Act to be budget neutral. Therefore, for the purposes of this impact analysis, we are applying

an adjustment of 0.991756 to ensure that the effects of the section 1886(d)(10) reclassificationsCMS-1498-P 1233

are budget neutral (section II.A. of the Adde ndum to this proposed rule). Geographic

reclassification generally benefits hospitals in rural areas. We estimate that geographic

reclassification will increase payments to rural hospitals by an average of 1.6 percent. By region,

all the rural hospital categories will experience increases in payments due to MGCRB

reclassification where rural hospitals in th e Mountain region will experience a 0.1 percent

increase in payments and rural hospitals in th e East South Central region will experience a 2.4

percent increase in payments.

Table 9A of the Addendum to this proposed rule reflects the appr oved reclassifications

for FY 2011.

I. Effects of the Rural Floor and Imputed Floor , Including Application of Budget Neutrality at

the State Level (Column 7)

As discussed in section III.B. of the preamble of the FY 2009 IPPS final rule, the FY

2010 IPPS/RY 2010 LTCH final rule and this proposed rule, section 4410 of Pub. L. 105-33

established the rural floor by requiring that th e wage index for a hospital in any urban area

cannot be less than the wage index received by rura l hospitals in the same State. In FY 2008, we

changed how we applied budget neutrality to the rural floor. Rather than applying a budget

neutrality adjustment to the standardized am ount, a uniform budget neutrality adjustment is

applied to the wage index. In the FY 2009 final rule, we finalized the policy to apply the rural

floor budget neutrality at the State level with a 3-year transition. In FY 2009, hospitals received

a blended wage index that is 20 percent of a wa ge index with the State level rural and imputed

floor budget neutrality adjustment and 80 percent of a wage index with the national budget

neutrality adjustment. In FY 2010, hospitals receive d a blended wage index that is 50 percent of

a wage index with the State level rural and im puted floor budget neutralit y and 50 percent of aCMS-1498-P 1234

wage index with the national budget neutrality adjustment. For FY 2011, for purposes of this

impact analysis, we assume application of the thir d year of the transitional period so that wage

indices adjusted for the rural floor will have 100 percent of the wage index adjusted with a

within-State rural budget neutrality factor. Howe ver, we recognize that this policy was recently

changed by the provisions of section 3141 of Pub. L. 111-148.

Furthermore, the FY 2005 IPPS final rule (69 FR 49109) established a temporary

imputed floor for all urban States from FY 2005 to FY 2007. The rural floor requires that an

urban wage index cannot be lower than the wage index for any rural hospital in that State.

Therefore, an imputed floor was established for States that do not have rural areas or rural IPPS

hospitals. In the FY 2008 IPPS final rule with comment period (72 FR 47321), we finalized our

proposal to extend the imputed floor for 1 additional year. In the FY 2009 IPPS final rule (73 FR

48573), we extended the imputed floor for an add itional 3 years through FY 2011. Furthermore,

as noted above, in that final rule we provided for a 3-year transition to the rural floor budget

neutrality adjustment at the State level. Ther efore, we also apply the imputed floor budget

neutrality adjustment at the State level throug h a 3-year transition, so that, for FY 2011, wage

indices adjusted for the imputed floor will have 100 percent of the wage index computed using

the within-State rural and imput ed budget neutrality adjustment.

Column 7 shows the projected impact of th e rural floor and the imputed floor and the

within-State rural and imputed floor budget neutrality. The column compares the proposed postreclassification FY 2011 wage index of providers before the rural floor adjustment and the postreclassification FY 2011 wage index of provide rs with the rural floor and imputed floor

adjustment. Only urban hospita ls can benefit from the rural floor provision. Because the

provision is budget neutral, in prior years, all othe r hospitals (that is, all rural hospitals and thoseCMS-1498-P 1235

urban hospitals to which the adjustment is not made) had experienced a decrease in payments

due to the budget neutrality adju stment applied nationally. Ho wever, because, for FY 2011, this

calculation assumes that the rural floor adjusted wage index is made budget neutral through a

within-State budget neutrality fact or, rural hospitals and urban hosp itals located in States that do

not benefit from the rural floor will not experience a change in payments attributable to the rural

floor. Conversely, all hospitals in States with hospitals receiving a rural floor will have their

wage indices downwardly adjusted to ac hieve budget neutrality within the State.

We project that, in aggregate, rural hosp itals will experience a 0.1 percent decrease in

payments as a result of the application of rura l floor budget neutrality becau se the rural hospitals

located in States with a rural floor do not bene fit from the rural floor, but have their wage

indexes downwardly adjusted to ensure that the application of the rural floor is budget neutral

overall within the State. We project hospitals located in other urba n areas (populations of

1 million or fewer) will experience a 0.1 percent in crease in payments be cause those providers

benefit from the rural floor. Urban hospitals in the regions can expect 0 percent change in

payments because within each state, the rural fl oor is budget neutral and increases in payments

for providers receiving the rural floor re offs et by the within-State budget neutrality factors

applied to the wage index of the providers in Stat es with a rural floor. Rural hospitals located in

the Pacific area will expe rience a 0.3 percent decrease in paym ents because of the rural floor

budget neutrality factor in California downwardly adjusts the wage index by 2.4 percent. Rural

hospitals located in the Middle Atlantic area w ill experience a 0.1 percent decrease in payments

because of the imputed rural floor budget neutra lity factor (0.97946) in New Jersey downwardly

adjusts the wage index for rural hospitals by approximately 2 percent.CMS-1498-P 1236

J. Effects of the Proposed Wage Index Adjustment for Out-Migration (Column 8)

Section 1886(d)(13) of the Act, as added by section 505 of Pub. L. 108-173, provides for

an increase in the wage index for hospitals located in certain counties that have a relatively high

percentage of hospital employees who reside in th e county, but work in a different area with a

higher wage index. Hospitals located in counties that qualify for the payment adjustment are to

receive an increase in the wage index that is equal to a weighted average of the difference

between the wage index of the resident county, post-reclassification and the higher wage index

work area(s), weighted by the overall percentage of workers who are employed in an area with a

higher wage index. With the out-migration ad justment, small rural pr oviders DSH providers

with less than 100 beds will experience a 0.5 percen t increase in payments in FY 2011 relative to

no adjustment at all. We included these additi onal payments to providers in the impact table

shown above, and we est imate the impact of these providers receiving the out-migration increase

to be approximately $20 million.

K. Effects of All Proposed Changes Prior to Documentation and Coding (or CMI) Adjustment

(Column 9)

Column 9 shows our estimate of the chan ges in payments per discharge from FY 2010

and FY 2011, resulting from all proposed changes reflected in this proposed rule for FY 2011

(including statutory changes), other than the proposed documen tation and coding adjustment.

Column 9 reflects the impact of all other FY 2011 changes relative to FY 2010, including those

shown in Columns 1 through 8. The average increase in payments under the IPPS for all

hospitals is approximately 2.8 pe rcent. In addition, it reflects the estimated 0.5 percentage point

difference between the projected outlier paymen ts in FY 2010 (5.1 percent of total MS-DRG

payments), the current estimate of the perc entage of actual outlier payments in FY 2010CMS-1498-P 1237

(4.7 percent) as described in the introduction to this Appendix and the Addendum to this

proposed rule.

There might also be interactive effects among the various factors comprising the payment

system that we are not able to isolate. For th ese reasons, the values in Column 9 may not equal

the sum of the percentage changes described above.

L. Effects of All Proposed Change s With CMI Adjustment (Column 10)

Column 10 shows our estimate of the chan ges in payments per discharge from FY 2010

and FY 2011, resulting from all proposed changes reflected in this proposed rule for FY 2011

(including statutory changes). This column includes the proposed FY 2011 documentation and

coding adjustment of -2.9 percent on the na tional standardized amount, -2.9 percent on the

hospital-specific rates, and –2.4 percent on the Pu erto Rico-specific standardized amount, which

overall accounts for a 2.9 percent decrease in payments.

Column 10 reflects the impact of all proposed FY 2011 changes relative to FY 2010,

including those shown in Columns 1 through 9. The average decrease in payments under the

IPPS for all hospitals is approximately -0.1 percent. As described in Column 9, this average

decrease includes the effects of the 2.4 percent market basket update, the 0.5 percentage point

difference between the projected outlier paymen ts in FY 2010 (5.1 percent of total MS-DRG

payments), and the current estimate of the percen tage of actual outlier payments in FY 2010 (4.7

percent). There might also be interactive effects among the various factors comprising the

payment system that we are not able to isolate. For these reasons, the values in Column 10 may

not equal the sum of the percen tage changes described above.

The overall proposed change in payments per discharge for hospitals paid under the IPPS

in FY 2011 is estimated to decrease by 0.1 percen t. The payment decreases among the hospitalCMS-1498-P 1238

categories are largely attributed to the propos ed documentation and coding adjustments.

Hospitals in urban areas would experience an estimated 0.1 percent decrea se in payments per

discharge in FY 2011 compared to FY 2010. Hospita l payments per discharge in rural areas are

estimated to decrease by 0.5 per cent in FY 2011 as compared to FY 2010. The decreases larger

than the national average for rural areas are larg ely attributed to the differential impact of the

MS-DRGs and wage data and due to the -2.9 percent documentation and coding adjustment

applied to the national standa rdized amount and the -2.9 per cent documentation and coding

adjustment to the hospital-specific rate applied to SCHs and MDHs, which generally are

classified as rural hospitals.

Among urban census divisions, the larg est estimated payment decreases will be 0.9

percent in the New England region and 0.6 percen t in the Middle Atlantic region, while urban

hospitals in the Pacific will see the largest pa yment increases (0.5 percent). Among the rural

regions, the providers in the New England region will experience the largest decrease in

payments (1.6 percent) because of reductions due to case-mix and the documentation and coding

adjustments while rural hospitals in the West South Central region will experience an increase in

payments by 0.4 percent due to increases in case-mix, wage data and MGCRB reclassification.

Among special categories of rural hospita ls, MDHs will receive an estimated payment

decrease of 0.6 percent. MDHs are paid the higher of the IPPS rate based on the national

standardized amount, that is, the Federal rate, or, if the hospital- specific rate exceeds the Federal

rate, the Federal rate plus 75 percent of the di fference between the Federal rate and the hospitalspecific rate. MDHs will experience a decr ease in payments because of the proposed

documentation and coding adjustme nts applied to both the hospital- specific rate and the Federal

rate. SCHs are also paid the higher of their hos pital-specific rate or the federal rate. Overall,CMS-1498-P 1239

SCHs will experience an estimated decrease in payments by 0.5 percent due to the proposed

documentation and coding adjustments to the national standardized amount and the hospitalspecific rates.

Rural hospitals reclassified for FY 2011 are anticipated to receive a 0.3 percent payment

decrease, and rural hospitals that are not reclassifying are estimated to receive a payment

decrease of 0.7 percent.

Cardiac hospitals are expect ed to experience a payment increase of 0.8 percent in FY

2011 relative to FY 2010 due to increases in paym ents attributable to changes in the MS-DRGs

and relative weights.

M. Effects of Proposed Policy on Paymen t Adjustments for Low-Volume Hospitals

For FY 2011, we are proposing to continue to apply the volume adjustment criteria we

specified in the FY 2005 IPPS final rule (69 FR 49099). We expect that three providers will

receive the low-volume adjustment for FY 2011. We estimate that low-volume hospitals will

experience an increase of $114,000 in payments due to the low volume payment adjustment.

N. Impact Analysis of Table II

Table II presents the projected impact of the proposed changes for FY 2011 for urban and

rural hospitals and for the different categories of hospitals shown in Table I. It compares the

estimated average payments per discharge fo r FY 2010 with the proposed payments per

discharge for FY 2011, as calculated under our models . Thus, this table presents, in terms of the

average dollar amounts paid per discharge, the combined effects of the proposed changes

presented in Table I. The estimated percentage changes shown in the last column of Table II

equal the estimated percentage changes in average payments per discharge from Column 10 of

Table I.CMS-1498-P 1240

TABLE II.--IMPACT ANALYSIS OF PROPOSED CHANGES FOR FY 2011 ACUTE CARE HOSPITAL OPERATING PROSPECTIVE PAYMENT SYSTEM (PAYMENTS PER DISCHARGE )

Number of Hospitals Average FY 2010 Payment Per

Discharge (2) Average Proposed FY 2011 Payment Per Discharge (3) All Proposed FY 2011 Changes (4) All hospitals 3,472 $10,179 $10,166 -0.1 By Geographic Location: Urban hospitals 2,502 $10,607 $10,598 -0.1 Large urban areas (populations over 1 million) 1,365 $11,193 $11,181 -0.1 Other urban areas (populations of 1 million or fewer) 1,137 $9,888 $9,882 -0.1 Rural hospitals 970 $7,577 $7,536 -0.5 Bed Size (Urban):
0-99 beds 635 $8,056 $8,057 0
100-199 beds 791 $8,926 $8,908 -0.2
200-299 beds 461 $9,861 $9,842 -0.2
300-499 beds 425 $10,995 $10,984 -0.1
500 or more beds 190 $13,104 $13,113 0.1 Bed Size (Rural):
0-49 beds 337 $6,136 $6,137 0
50-99 beds 366 $7,088 $7,030 -0.8
100-149 beds 164 $7,485 $7,458 -0.4
150-199 beds 61 $8,274 $8,249 -0.3
200 or more beds 42 $9,405 $9,331 -0.8 Urban by Region: New England 121 $11,035 $10,937 -0.9
Middle Atlantic 330 $11,677 $11,611 -0.6
South Atlantic 383 $9,841 $9,827 -0.1
East North Central 403 $9,967 $9,975 0.1
East South Central 155 $9,510 $9,475 -0.4
West North Central 166 $10,131 $10,138 0.1
West South Central 342 $9,931 $9,961 0.3
Mountain 162 $10,836 $10,841 0
Pacific 390 $13,032 $13,092 0.5
Puerto Rico 50 $5,133 $5,149 0.3 Rural by Region: New England 24 $9,980 $9,817 -1.6
Middle Atlantic 70 $7,939 $7,874 -0.8
South Atlantic 165 $7,348 $7,271 -1
East North Central 120 $7,854 $7,800 -0.7
East South Central 175 $6,872 $6,856 -0.2CMS-1498-P 1241

Number of Hospitals Average FY 2010 Payment Per

Discharge (2) Average Proposed FY 2011 Payment Per Discharge (3) All Proposed FY 2011 Changes (4)
West North Central 100 $8,013 $8,003 -0.1
West South Central 214 $6,805 $6,835 0.4
Mountain 71 $8,195 $8,184 -0.1
Pacific 31 $10,340 $10,186 -1.5 By Payment Classification : Urban hospitals 2,555 $10,584 $10,575 -0.1 Large urban areas (populations over 1 million) 1,403 $11,171 $11,159 -0.1 Other urban areas (populations of 1 million or fewer) 1,152 $9,859 $9,853 -0.1
Rural areas 917 $7,638 $7,596 -0.5 Teaching Status: Non-teaching 2,434 $8,547 $8,537 -0.1
Fewer than 100 Residents 798 $10,088 $10,066 -0.2
100 or more Residents 240 $15,040 $15,033 0
Urban DSH:
Non-DSH 834 $8,866 $8,866 0
100 or more beds 1,510 $11,163 $11,153 -0.1 Less than 100 beds 340 $7,594 $7,558 -0.5
Rural DSH:
SCH 407 $7,022 $6,983 -0.6
RRC 209 $8,414 $8,362 -0.6
100 or more beds 30 $6,589 $6,547 -0.6 Less than 100 beds 142 $5,898 $5,854 -0.7 Urban teaching and DSH: Both teaching and DSH 806 $12,188 $12,173 -0.1 Teaching and no DSH 169 $9,705 $9,686 -0.2 No teaching and DSH 1,044 $9,130 $9,123 -0.1 No teaching and no DSH 536 $8,468 $8,482 0.2 Rural Hospital Types:
RRC 183 $8,527 $8,493 -0.4
SCH 340 $7,998 $7,956 -0.5

MDH 187 $6,325 $6,288 -0.6
SCH and RRC 108 $9,479 $9,407 -0.8
MDH and RRC 13 $8,007 $7,955 -0.6 Type of Ownership : Voluntary 1,978 $10,331 $10,310 -0.2 Proprietary 837 $9,122 $9,132 0.1
Government 577 $10,688 $10,681 -0.1CMS-1498-P 1242

Number of Hospitals Average FY 2010 Payment Per

Discharge (2) Average Proposed FY 2011 Payment Per Discharge (3) All Proposed FY 2011 Changes (4) Medicare Utilization as a Percent of Inpatient Days:
0-25 353 $13,589 $13,576 -0.1
25-50 1593 $11,094 $11,088 -0.1
50-65 1202 $8,511 $8,483 -0.3
Over 65 237 $7,455 $7,438 -0.2 Hospitals Reclassified by the Medicare Geographic Classification Review Board: FY 2011 Reclassifications: All Reclassified Hospitals FY 2011 810 $9,903 $9,889 -0.1 All Non-Reclassified Hospitals FY 2011 2,662 $10,282 $10,268 -0.1 Urban Reclassified Hospitals FY 2011: 488 $10,557 $10,549 -0.1 Urban Non-reclassified Hospitals FY 2011:..... 1,985 $10,632 $10,623 -0.1 Rural Reclassified Hospitals FY 2011:......: 322 $8,173 $8,145 -0.3 Rural Nonreclassified Hospitals FY 2011: 585 $6,872 $6,822 -0.7 All Section 401 Reclassified Hospitals: 37 $8,923 $8,825 -1.1 Other Reclassified Hospitals (Section 1886(d)(8)(B)) 63 $7,276 $7,190 -1.2 Specialty Hospitals Cardiac Hospitals 19 $11,496 $11,584 0.8

VII. Effects of Other Proposed Policy Changes

In addition to those proposed policy changes di scussed above that we are able to model

using our IPPS payment simulation model, we are proposing to make various other changes in

this proposed rule. Generally, we have limited or no specific da ta available with which to

estimate the impacts of these changes. Our estimates of the likely impacts associated with these

other proposed changes are discussed below.

A. Effects of Proposed Policy on HACs, Including Infections

In section II.F. of the preamble of this proposed rule, we discu ss our implementation of

section 1886(d)(4)(D) of the Act, which requires the Secretary to identify cond itions that are: (1)

high cost, high volume, or both; (2) result in th e assignment of a case to an MS-DRG that has aCMS-1498-P 1243

higher payment when present as a secondary di agnosis; and (3) could reasonably have been

prevented through application of evidence-based gu idelines. For discharges occurring on or after

October 1, 2008, hospitals will not receive additional payment for cases in which one of the

selected conditions was not present on admission, unless based on data and clinical judgment, it

cannot be determined at the time of admission whet her a condition is present. That is, the case

will be paid as though the secondary diagnosis we re not present. Howe ver, the statute also

requires the Secretary to continue counting the co ndition as a secondary diagnosis that results in

a higher IPPS payment when doing the budget neutrality calculations for MS-DRG

reclassifications and re calibration. Therefore, we will perfo rm our budget neutrality calculations

as though the payment provision did not apply, but Medicare will make a lower payment to the

hospital for the specific case that includes the se condary diagnosis. Thus, the provision results in

cost savings to the Medicare program.

We note that the provision will only apply when one or more of the selected conditions

are the only secondary diagnosis or diagnoses pr esent on the claim that will lead to higher

payment. Medicare be neficiaries will generally have mu ltiple secondary diagnoses during a

hospital stay, such that beneficiaries having one MCC or CC will frequently have additional

conditions that also will generate higher payment. Only a small percentage of the cases will

have only one secondary diagnosis that would lead to a higher payment. Therefore, if at least

one nonselected secondary diagnosis that leads to higher payment is on the claim, the case will

continue to be assigned to the higher paying MS-DRG and there will be no Medicare savings

from that case. In addition, as discussed in sectio n II.F.3.e. of the preamble of this proposed rule,

it is possible to have two severi ty levels where the HAC does not affect the MS-DRG assignment

or for an MS-DRG not to have severity levels. In either of these circumstances, the case willCMS-1498-P 1244

continue to be assigned to the higher paying MS-DRG and there will be no Medicare savings

from that case.

The HAC payment provision went into eff ect on October 1, 2008. Our savings estimates

for the next 5 fiscal years are shown below:

Year Savings (in millions) FY 2011 $23 FY 2012 $24 FY 2013 $25 FY 2014 $26 FY 2015 $26

B. Effects of Proposed Policy Relating to New Medical Service and Technology Add-On

Payments

In section II.I. of the preamble to this propos ed rule, we discuss the three applications for

add-on payments for new medical services and t echnologies for FY 2011, as well as the status of

the new technologies that were approved to receive new technol ogy add-on payments in FY

2010. As explained in that section, add-on payments for new technology under section

1886(d)(5)(K) of the Act are not required to be budg et neutral. As discussed in section II.I.4. of

the preamble of this proposed rule, we have yet to determine whether any of the three

applications we received for consideration for new technology add-on payments for FY 2011

will meet the specified criteria. Consequently, it is premature to estimate the potential payment

impact of any potential new technology add-on pa yments for FY 2011. We note that if any of

the three applications are found to be eligible for new technology add-on payments for FY 2011,

in the FY 2011 IPPS/LTCH PPS final rule, we would discuss the estimated payment impact for

FY 2011 in that final rule.CMS-1498-P 1245

However, we are proposing to continue to make new technology add-on payments in FY

2011 for the CardiowestTM Temporary Total Artific ial Heart System (TAH-t) and the Spiration®

IBV® Valve System. Therefore, we are providing an estimate of total payments for these

technologies in FY 2011. We note that new t echnology add-on payments per case are limited to

the lesser of: (1) 50 percent of the costs of th e new technology; or (2) 50 percent of the amount

by which the costs of the case exceed the standard MS–DRG payment for the case. Because it is

difficult to predict the actual new technology a dd-on payment for each case, our estimate below

is based on the increase in add-on payments for FY 2011 as if every claim that would qualify for

a new technology add-on payments would receive the maximum add-on payment. Therefore, we

currently estimate that payments for the TAH-t will increase overall FY 2011 payments by

$9.54 million. For FY 2010, the applicant estima ted that approximately 2,286 Medicare

beneficiaries would be e ligible for the Spiration® IBV® Valve System. Therefore, based on the

applicant's estimate from FY 2010, we currently estimate that payments for the Spiration®

IBV® Valve System will increase overall FY 2011 payments by $7.80 million.

C. Effects of Proposed Requirements for Ho spital Reporting of Quality Data for Annual

Hospital Payment Update

In Appendix A, section VII.C. of the FY 2010 IPPS/RY 2010 LTCH PPS final rule (74

FR 44224), we discussed the impact of the FY 2011 RHQDAPU program requirements. In this

proposed rule, we are proposing to retire one of the FY 2011 quality measures. We believe that

this proposal would not have a significant effect on our previous analysis. We note that, in that

final rule, we estimated that 96 hospitals would not receive th e full payment update in FY 2010

and that 96 hospitals would not receive the full payment update in FY 2011. As noted above, atCMS-1498-P 1246

the time this analysis was prepared, 104 hospita ls did not receive the full payment update in

FY 2010.

In section IV.A. of the preamble of this proposed rule, we discuss our proposed

requirements for hospitals to report quality data under the RHQDAPU program in order to

receive the full payment update for FY 2012, FY 2013, and FY 2014. We estimate that

approximately 104 hospitals may not receive the full payment update in any fiscal year. We

believe that most of these hosp itals would be either small ru ral or small urban hospitals.

However, at this time, information is not available to determine the hospitals that will not meet

the requirements for the full hospital mark et basket increase for FY 2012, FY 2013, and

FY 2014.

For the FY 2012 payment determination, hospitals would be required to submit

all-patient volume data for selected MS-DRGs that relate to RHQDAPU program measures. The

submission of all-patient volume data will occur free of charge to hospitals. Therefore, the

additional resource burden to hosp itals for this requirement is expected to be minimal. For the

FY 2013 payment determination, we have proposed that hospita ls will choose one of four

proposed registry-based topics for which there are currently a number of nationwide registries

each individually collecting data from a signif icant proportion of IPPS hospitals. We have

proposed that hospitals will submit data on pr oposed measures included within the proposed

registry-based topic to a registry that we qualify for this purpose.

For the proposed ICD Complications regist ry-based topic, currently, 100 percent of

hospitals performing ICD implantation participate in the American College of CardiologyNational Cardiovascular Data Registry’s (ACC-NCDR) ICD registry and 78 percent of those

hospitals are already submitting the additional data elements and secondary population needed toCMS-1498-P 1247

calculate the ICD complication measure. For the proposed Cardiac Surgery registry-based topic,

we have estimated that 80 to 90 percent of hospitals performing cardiac surgery currently

participate in a cardiac surgery registry. Th erefore, the number of additional hospitals not

currently participating in a cardiac surgery registry that would choose this t opic is expected to be

minimal. For the proposed Stroke and Nursing Se nsitive Care registry-bas ed topics, there are a

number of registries to which at least 25 percent of IPPS hospitals currently submit data. We

currently do not know if hospitals would choose one of these two proposed topics if they are not

already submitting data to one of these registries. The AMI-statin at discharge measure,

proposed for FY 2013 payment determination, would create minimal additional burden as

hospitals can collect the data elements from the same charts already being pulled for existing

RHQDAPU program AMI measures.

For the FY 2014 payment determination, the pr oposed addition of four chart-abstracted

measures that require hospitals to submit data on all inpatients is expected to create an additional

burden for hospitals. The information needed for the proposed ED-Throughput measures is

captured as routine documentation, and therefore is not expected to impose much additional

burden. The proposed Global Immunization meas ures would require hospitals to collect

information on all inpatients regarding flu and pneumonia vaccinations that they are currently

only collecting for patients admitted for pneumonia. Therefore, the number of patients for which

these data would need to be collected will increase.

We also note that, beginning with the FY 2012 payment update, hospitals must pass our

validation requirement of a minimum of 75 percent reliabilit y, based upon our chart-audit

validation process, for three quart ers of data from the first quart er of CY 2010 through the third

quarter of CY 2010. These data are due to the QIO Clinical Warehouse by August 15, 2010CMS-1498-P 1248

(first quarter CY 2010 discharges), November 15, 2010 (second quarter CY 2010 discharges),

and February 15, 2011 (third quarter CY 2010 discha rges). We have continued our efforts to

ensure that QIOs provide assistance to all hosp itals that wish to participate in the RHQDAPU

program. The requirement of 12 charts per hospital submitted for validation would result in

approximately 9,600 charts per quarter being submitted to CMS. We reimburse hospitals for the

cost of sending charts to the Clinical Data Abst raction Center (CDAC) cont ractor at the rate of

12 cents per page for copying and approximate ly $4.00 per chart for postage. Our experience

shows that the average chart received by the CD AC contractor is approximately 150 pages.

Thus, as a result of the validation require ments we are proposing for the FY 2012 annual

payment update, we estimate that CMS would have expenditures of approximately $212,000 per

quarter, which is a reduction from the $597,600 per qua rter to collect the charts for the FY 2010

and FY 2011 annual payment updates. Given that we reimburse for the data collection effort, we

believe that a requirement for 12 charts per hos pital per quarter repres ents a minimal burden to

participating hospitals.

We have finalized a new validation methodology for FY 2012. We believe that these

modifications will not change the number of hospitals that fail the validation requirement for FY

2012 from previous years. We are changing the wa y we calculate the vali dation matches (that is,

all relevant data elements submitted by the hospital must match the independently re-abstracted

data elements to count as a ma tch), which will ma ke it more difficult for hospitals to satisfy the

validation requirement. However, we also will validate data for a smaller number of hospitals

each year and we changed the validation threshol d from 80 percent to 75 percent. In addition,

we conducted analysis in FY 2010 of past valida tion data and found that at least 95 percent of

sampled hospitals are expected to pass the 75 pe rcent validation threshold starting in FY 2012.CMS-1498-P 1249

In combination, we believe that these proposed revisions will counterba lance each other and

result in no additional impact to the number of hospitals failing our validation requirement for

FY 2012.

If we determine that a hospital is not en titled to receive the full FY 2012 payment update

because it failed to satisfy the validation requirement, and the hospital asks for a reconsideration

of that decision, we are proposing that the hos pital submit complete c opies of the medical

records that it submitted to the CDAC contractor for purposes of the validation for which the

hospital incurs the cost. We estimate that no greater than 40 hospitals would fail this

requirement for FY 2012. We es timate that this proposal would cost hospitals approximately

12 cents per page for copying and approximate ly $4.00 per chart for postage. We have found,

based on experience, that an average sized medica l chart is approximately 150 pages. Hospitals

would be required to return all 36 sampled medical records for the three quarters of data from FY

2010. We estimate that the total cost to the 40 impacted hospitals would be approximately

$17,600, or $440 per hospital. We be lieve that this cost is minimal, compared with the 2.0

percent RHQDAPU program component of the an nual payment update at risk. This proposed

requirement is necessary so that CMS has all the information it needs to fairly and timely make a

decision on the hospital’s reconsideration reques t. We also anticipate that this proposed

requirement would benefit hospitals seeking a reconsideration because it will enable us to

resolve potential issues earlier in the appeals proc ess, obviating the need for a hearing before the

Provider Reimbursement Review Board (PRRB). We believe that this benefit would greatly

outweigh the burden of copying and mailing the requested records.

We note that, beginning with FY 2014 and future years, we are considering adding two

stratum to the current RHQDAPU validation sample of SCIP, AMI, HF, and PN cases. We willCMS-1498-P 1250

consider selecting two additional samples of th ree cases per selected hospital per quarter to

validate proposed surgical site infection, bl ood stream infection, ED-Throughput and Global

Immunization measures. If we later propose th is requirement and adopt it as final through

rulemaking, we would randomly sel ect a total of 18 records per quarter per validated hospital in

6 strata (SCIP, AMI, HF, PN, CLABSI/SSI, a nd ED-Throughput/Immunization measures). The

requirement of an additional 6 charts per hospital submitted for validation would result in

approximately 4,800 additional char ts per quarter being submitte d to CMS. We reimburse

hospitals for the cost of sending charts to the CD AC contractor at the rate of 12 cents per page

for copying and approximately $4.00 per chart fo r postage. Our experience shows that the

average chart received by the CDAC contractor is approximately 150 pages. Thus, we would

expend approximately $105,600 per qua rter to collect the charts for the annual payment update

for FY 2014 and future years. Given that we reimburse for the data collec tion effort, we believe

that a proposed requirement of the additiona l records in FY 2014 per hospital per quarter

represents a minimal burden to the participating hospital.

D. Effects of Proposed Policy on Payment fo r Transfer Cases from Medicare Participating

Hospitals to Nonparticip ating Hospitals and CAHs

In section IV.B. of the preamble of this proposed rule, we are proposing to expand the

acute care transfer policy to transfers to nonpartic ipating acute care hospitals and to CAHs. This

proposed expansion of the acute care transfer pol icy aims to further align the policy with its

original intent, that is, to pay a hospital commens urate with the resources it expends in treating a

Medicare beneficiary who is transferred. However, the impacts of this change are not possible to

measure, although we believe the any change in Medicare payments to hospitals associated with

this proposed change would be negligible. Specifically, because there are relatively fewCMS-1498-P 1251

nonparticipating acute care hospitals, we expect that there woul d be few, if any, transfers to

nonparticipating hospitals in a gi ven period. In addition, based on the capped inpatient bed size

of CAHs (that is, not more than 25 inpatient be ds) and the CAH distance requirements (that is, a

CAH must generally be located at least 35 miles from another hospital) , we believe that

transfers from an IPPS acute care hospital to a CAH occur very infrequently. Therefore, we

estimate that this proposed expansion of the acute care transfer policy would not have a material

impact on Medicare payments to acute care hospitals.

E. Effects of Proposed Change in Criteria for MDHs

In section IV.D. of the preamble of this pr oposed rule, we discuss our proposal to revise

the existing Medicare-dependency criterion for MDHs at §412.108(a)(1)(iii) of the regulations

(that is, "At least 60 percent of the hospital's inpa tient days or discharges were attributable to

individuals receiving Medicare Part A benefits during the hospital's cost reporting period . . . .")

by replacing the word “receiving” with the phrase “entitled to”. As a result, we would include in

the count of Medicare inpatient days or discharges, all days or discharges attributable to

individuals entitled to the Medicare Part A insurance benefit, including individuals who have

exhausted their Medicare Part A hosp ital inpatient cove rage benefit.

Based on our analysis of data for cost reporting periods beginning in FYs 2007 and 2008,

we estimate that the proposed change to the MDH definition of Medicare-dependency may allow

48 more IPPS hospitals to qualify as an MDH. We estimate that this proposed change would

result in increased expenditure of $3.6 million in FY 2011. (We note that the PPACA (Pub. L.

111-148) extended the sunset date for MDHs fro m the end of FY 2011 to the end of FY 2012.

We plan to issue a separate rulemaking document in the Federal Register to address this

statutory provision.CMS-1498-P 1252

F. Effects of Proposed Change Relating to Payment Adjustme nt for Disproportionate Share

Hospitals

In section IV.E. of the preamble of this proposed rule, we are proposing to change,

effective for FY 2011 and subsequent years, the da ta matching process used to calculate the SSI

fraction for the Medicare DSH payment adjustment. The SSI fraction is part of the formula used

to determine whether a subsection (d) hospital qualifies for a DSH payment adjustment and the

amount of any DSH payment.

The numerator of a hospital’s DSH SSI fracti on is the number of inpatient days for the

provider’s patients who were entitled to both Medicare Part A and SSI benefits. The

denominator of the hospital’s SSI fraction is the total number of inpatient days for the provider’s

patients who were entitled to Part A benefits. In order to calculate the numerator of a hospital’s

DSH SSI fraction, CMS matches cert ain Medicare data f iles with SSI eligibilit y data files that

are furnished by SSA. In Baystate Medical Center v. Leavitt (545 F. Supp. 2d 20, as amended

, 587 F. Supp. 2d 37, 44 (D.D.C. 2008)), the district court concluded that, in certain respects,

CMS’ current matching process did not use the “b est available data” to match Medicare patient

day information with SSI eligibility data. In implementing the Baystate decision, CMS

recalculated the plaintiff’s SSI fractions and DSH payments for its FYs 1993 through 1996 by

using a revised data matching process that comports with the district court’s decision.

We are now proposing to adopt the same revi sed data matching pr ocess for calculating

hospitals’ DSH SSI fractions for FY 2011 and subs equent fiscal years. In addition, we are

proposing to use, in the revised ma tching process, a later update of the MedPAR claims data file

and the SSI eligibility data file. Specifically, we are proposing to use MedPAR claims files and

SSI eligibility data that are updated 15 months after the end of the Federal fiscal year, rather thanCMS-1498-P 1253

continue with our current practice of using data updated 6 months after the end of the Federal

fiscal year. We believe that our proposed revision to the timing of the data match would achieve

an appropriate balance between accounting for additional retroactive SSI eligibility

determinations and the lifting of SSI payment su spensions and facilitating administrative finality

through the timely final settlement of Medicare cost reports.

We are not able to provide a detailed anal ysis of the potential impact of the proposed

revised data matching process. That is, it is not possible to determine whether Medicare DSH

adjustment payments to hospitals will generally increase or decrease, because hospitals’ SSI

fractions will vary depending on various factors, including the use of a more updated MedPAR

claims data file, use of a more updated SSI eligibility data file, and the other features of our

proposed revised data matching process.

With respect to the use of a more updated Me dPAR claims data file, we expect that using

a later version of the MedPAR claims file woul d increase the number of inpatient claims for a

given Federal fiscal year and, therefore, woul d increase the number of Medicare inpatient days

included in the denominator of the SSI fracti on. Depending on whether or not the additional

claims in the MedPAR file were for Medicare pati ents who were also eligible for SSI during the

inpatient stay, the numerator of the SS I fraction might increase or decrease.

As for the use of an updated SSI eligibility f ile, we note that retroactive SSI eligibility

determinations include both the granting and the de nial of SSI benefits. Therefore, assuming that

some of the retroactive SSI eligibility determinations were for Medicare patients, the use of an

updated SSI eligibility file also could increase or decrease the numerator of the SSI fraction. We

expect that, as a result of using an updated SSI eligibility file, the SSI fraction for some hospitals

would increase while it would decrease for other hospitals.CMS-1498-P 1254

We also note that, in the Baystate decision, the district cour t found that certain records

(for example, “stale records” and “forced pay records”) were not included in the SSI eligibility

data that SSA gave to CMS for use in the data matching process. However, the SSI eligibility

data files began to include cer tain of these records in the mid-1990’s, and stale records and

forced pay records were included in the SSI eligibility data files that CMS used in recalculating

the specific SSI fractions and DSH adjustment payments at issue in the Baystate case. As certain

of these records are already included in the data matching process and we are making no

proposals that would change this policy, we are unab le to determine if this issue has any cost or

savings for FY 2011 and subsequent years.

Finally, our proposed revise d data matching process in cludes the use of SSNs and a

greater number of Title II numbers and HICANs. As a result, we might be able to identify some

individuals who were entitled to both Part A and SSI benefits that our current data matching

process might not have id entified. Therefore, we would expect an increase in the SSI fraction for

certain providers, but we are unabl e to determine the extent to which DSH adjustment payments

would increase.

G. Effects of Proposed Changes Relating to Payments for IME and Direct GME

1. Identifying “Approved Medical Residency Programs”

In section IV.H.2. of the preamble of this proposed rule, we discuss our proposal to

clarify our policy regarding whether an individual is considered to be training in an approved

medical residency program such that the indivi dual’s time should be incl uded in the FTE count

for IME and direct GME purposes, or whether th at individual should be treated and bill as a

physician. Specifically, our proposed clarification states that indi viduals should be treated as and

bill as physicians if they have already succe ssfully completed at least one residency programCMS-1498-P 1255

(regardless of whether they have passed the board examination for that specialty program), and

are engaged in subsequent traini ng that will not provide them with knowledge or skills that could

be applied for additional board certification in another subsp ecialty, nor do they need that

training to satisfy requirements for board certification in the specialty program they already

successfully completed. We al so are proposing to revise the definition of “resident” at

§413.75(b) to mean “an intern, resident, or fe llow who is formally accepted, enrolled, and

participating in an approved medical residency program, including programs in osteopathy,

dentistry, and podiatry, as required in order to become certified by th e appropriate specialty

board.”

With respect to the policy regarding the treatment of trainees that have already

successfully completed at leas t one residency program, ther e is no financial impact on the

Medicare program because this is a proposed clar ification of existing policy and is not a policy

revision or addition of a new policy. The proposed policy change to the regulations might have

some limited financial impact to the extent that a hospital previously included trainees who were

not formally enrolled in an approved program in its FTE counts, and as a result of the proposed

change to the regulations, would no longer be able to include such trainees in its FTE count for

IME and direct GME purposes. However, we belie ve it would be rare fo r a hospital to have

included in its FTE count trainees who are not fo rmally enrolled in a residency program in the

typical fashion. Further, we believe that it woul d be rare for such a hospital to have sufficient

room under its IME and direct GME FTE resident caps to include any such “informally enrolled”

residents in addition to the typically enrolled residents. Thus, the financial impact of the

proposed change in the regulatory definition of “resident” would be insignificant.

2. Submission of Electronic Affiliation AgreementsCMS-1498-P 1256

In section IV.H.3. of the preamble of this pr oposed rule, we discuss our proposal to allow

hospitals to submit Medicare GME affiliation agreements to the CMS Central Office by

electronic submission. Over the last several years, we have received numerous inquiries

regarding the possibility of submitting the Medica re GME affiliation agreement electronically.

To date, CMS has only accepted signed hard copies of Medicare GME affiliation agreements

that are received through the mail. Facsimile (FAX) and other electronic submissions of

affiliation agreements have not been an ac ceptable means of transmission of affiliation

agreements to CMS Central Office in order for a hospital to meet the requirements of

§§413.79(f) and 412.105(f)(1)(vi).

The increasing frequency of these inquiries and our concerns re garding environmental

and paperwork reduction have prompted us to r econsider our procedure for hospitals to submit

Medicare GME affiliation agreements to the CMS Central Office. Accordingly, we are

proposing to change our policy to provide for el ectronic submission of the affiliation agreement

that is required to be sent to the CMS Centra l Office. This proposal would not affect the

authority of the fiscal intermediary or MAC to continue to specify its requirements for

submission for hospitals in its servicing area.

We are proposing an electronic submission proce ss that would consist of either an e-mail

mailbox or a Web site where hospitals would submit their Medicare GME affiliation agreements

to the CMS Central Office. As part of this process, a copy of the Medicare GME affiliation

agreement would need to be received through the electronic system no later than 11:59 p.m. on

July 1 of each academic year. We are proposin g that the electronic affiliation agreement would

need to be submitted either as a scanned copy or a PDF version of that hard copy agreement. We

are proposing not to accept an agreement in an y electronic format that could be subject toCMS-1498-P 1257

manipulation. The scanned and/or PDF format wi ll enable CMS to ensure that the agreements

are signed and dated as required in the regulations at §413.75.

We believe that allowing an electronic submission of the affiliation agreement to the

CMS Central Office would assist us in more eff ectively tracking the groups of hospitals that

become an affiliation as well as the numbers of FTE cap slots that are being transferred within

those groups. In addition, we believe an el ectronic submission pro cess would minimize the

paperwork burden for hospitals.

H. Effects of Proposed Changes Relating to CR NA Services Furnished in Rural Hospitals and

CAHs

In section IV.I. of the preamble of this proposed rule, we discu ss our proposal to amend

the regulations at §412.113(c)(2)(i)(A) to state that , effective for cost reporting periods beginning

on or after October 1, 2010, hospitals and CAHs that have reclassified under section

1886(d)(8)(E) of the Act and §412.103 are eligible to be paid based on reasonable cost for

anesthesia and related care furnished by qua lified nonphysician anesthe tists. Under existing

regulations, a hospital or CAH is not eligible to be paid based on reasonable cost for anesthesia

and related care furnished by qua lified nonphysician anesthetists if the hospital or CAH has been

granted rural status under §412.103. However, becau se the Act, as revised by section 608 of

Pub. L. 100–485, allows for reasonabl e cost payments for CRNA serv ices if the facility is a

hospital located in a rural area as defined for pu rposes of section 1886(d) of the Act, we are

proposing to revise the regulations to permit urban hospitals that have been reclassified as rural,

in accordance with section 1886(d)(8)(E) of the Act, to qualify for these payments. We are

proposing to revise the regulations to state that , effective for cost reporting periods beginning on

or after October 1, 2010, hospitals and CAHs th at have reclassified pursuant to sectionCMS-1498-P 1258

1886(d)(8)(E) of the Act and §412.103 of the regulati ons would be eligible to be paid based on

reasonable cost for anesthesia services a nd related care provided by qualified nonphysician

anesthetists.

We believe it is difficult to quantify the paym ent impact of this proposed change because,

in order to qualify for reasonable cost-based payment for anesthesia and related services

provided by qualified no nphysician anesthetists, a rural hospital or CAH cannot exceed an

annual limit of 800 surgical procedur es requiring anesthesia. We cannot establish the number of

facilities that would meet this threshold. In addition, although a hospita l or CAH may contract

with more than one qualified nonphysician anesthe tist and be paid based on reasonable cost for

anesthesia and related services performed by th ese nonphysician anesthetists, the total number of

hours of service furnished by the nonphysic ian anesthetists may not exceed 2,080 hours

annually. We also cannot dete rmine the number of facilities that would exceed this threshold.

Therefore, while we believe the impact would be relatively minor, we are unable to quantify the

impact of the proposed change.

I. Effects of Implementation of Rural Community Hospital De monstration Program

In section IV.J. of the preamble of this proposed rule, we discu ss our implementation of

section 410A of Pub. L. 108-173, which requires the Secretary to establish a demonstration that

will modify reimbursement for inpatient services for up to 15 small rural hospitals. Section

410A(c)(2) requires that "[i]n conducting the de monstration program under this section, the

Secretary shall ensure that the aggregate payments made by the Secretary do not exceed the

amount which the Secretary would have paid if the demonstration prog ram under this section

was not implemented." As discusse d in section IV.J. of the preamble of this proposed rule, in the

IPPS final rule for each of the previous 6 fiscal years, we have estimated the additional paymentsCMS-1498-P 1259

as a result of the demonstration for each of the pa rticipating hospitals. In order to achieve budget

neutrality, we are proposing to adjust the national IPPS rates by an amount sufficient to account

for the added costs of this demonstration. In other words, we are proposing to apply budget

neutrality across the payment system as a whole rather than merely across the participants of this

demonstration. We believe that the language of the statutor y budget neutrality requirement

permits the agency to implement the budget neutra lity provision in this manner. The statutory

language requires that "aggregate payments made by the Secretary do not exceed the amount

which the Secretary would have paid if the dem onstration . . . was not implemented" but does not

identify the range across which aggregate payments must be held equal.

An extension of this dem onstration has been mandated by the Patient Protection and

Affordable Care Act (Pub. L. 111-148). The prov isions of Pub. L. 111-148 will be addressed in

a separate notice in the Federal Register . For this proposed rule, because the mandated period

for the demonstration was scheduled to e nd by the end of FY 2010, we are proposing no

additional payment offset for upcoming years of the demonstration. However, we are proposing

to make an adjustment in the FY 2011 IPPS fina l rule to the national IPPS rates to account for

any differences between the cost of the demonstr ation program for hospitals participating in the

demonstration during FY 2007, repr esented by their cost reports beginning in FY 2007, and the

amount that was offset by the budget neutralit y adjustment for FY 2007. The specific numeric

value associated with the proposed adjustment to the national IPPS rates cannot be known until

cost reports beginning in FY 2007 of the hosp itals participating during FY 2007 in the

demonstration are settled. We expect those cost reports to be se ttled prior to the publication of

the FY 2011 IPPS final rule, and that we will be able to provide an estimated amount in the

FY 2011 IPPS final rule.CMS-1498-P 1260

J. Effects of Proposed Changes Relating to CAHs

1. CAH Optional Method of Payment for Outpatient Services

In section VI.B.2. of the preamble of this proposed rule, we discuss our proposal to

amend the regulations to permit a CAH to elect to be paid fo r outpatient services under the

optional method on a continuous basis. Under exis ting regulations, if a CAH wishes to be paid

under the optional method for outpa tient services on a continuous ba sis, it must submit an annual

election to the fiscal intermediary or MAC servicing the CAH at least 30 days prior to the cost

reporting period for which the election is made. Du e to the significant consequences that result

if a CAH fails to make a timely election, we are proposing to ame nd the regulations at

§413.70(b)(3)(i) to state that, effective for CAH cost reporting periods beginning on or after

October 1, 2010, if a CAH has elected the optiona l method for its most recent cost reporting

period beginning prior to October 1, 2010, or ch ooses to elect the optional method for its

upcoming cost reporting period, that election will remain in place until it is terminated. If a

CAH chooses to terminate its election, it must submit a termination request to the fiscal

intermediary or MAC servicing the CAH at least 30 days prior to the start of the next cost

reporting period. In order to provide CAHs th at have cost reporting periods beginning in

October or November 2010 time to choose to terminate an existing election of the optional

method, we are proposing that these CAHs w ould have until December 1, 2010, to terminate

their election. We anticipate that there would be no additional Medicare expenditure associated

with this proposed change because we are not pr oposing any changes that govern payment rules

for CAHs. Rather, we believe the regulato ry changes we are proposing would reduce any

perceived burden associated with the election proc ess and make it easier for CAHs to maintain

their election of the optional method on a continuous basis.CMS-1498-P 1261

2. Consideration of Costs of Provide r Taxes as Allowable Costs for CAHs

In section VI.B.3. of the preamble of this proposed rule, we discuss our proposal to

clarify our policy on the determina tion of whether the costs of property taxes are allowable costs

under Medicare, as described in sections 2212.1 and 2212.2 of the PRM. This is a clarification

of our longstanding policy. Therefore, we have determined that there is no financial impact of

the proposed change.

K. Effects of Proposed Policy Relating to Eff ective Date of Provider Agreements and Supplier

Approvals

In section VIII. of the preamble of this pr oposed rule, we discuss our proposal to clarify

the requirements supporting the existing process fo r assignment of an effective date for a

provider agreement or supplier approval. Approximately 54,500 Medicare providers and

suppliers are subject to survey and certificati on requirements under this proposal. However, the

proposed clarification would not ch ange the process for providers and suppliers. Therefore, the

impact of our proposed clar ification is negligible.

L. Effects of Proposed Change s Relating to Hospita l Rehabilitation Servi ces and Respiratory

Care Services Conditions of Participation

In section IX. of the preamble of this propos ed rule, we discuss our proposed changes to

the conditions of participation for hospital rehabilitation services a nd respiratory care services to

clarify the categories of practitioners allowed to order rehabilitation services and respiratory care

services. We believe that th is proposal would impose minimal a dditional costs on hospitals. In

fact, hospitals may realize some minimal cost savings due to the regulatory flexibility of these

proposed changes, which may allow for greater co nsistency with existing State laws and with

hospital policies and pr ocedures. The cost of implementing these proposed changes wouldCMS-1498-P 1262

largely be limited to the one-time cost related to the revision of a hospital’s medical staff bylaws

and its policies and procedures as they relate to the pr oposed requirements for the categories of

practitioners allowed to order rehabilitation and re spiratory care services. There also may be

some minimal cost associated with communicating these changes to affected hospital staff.

However, we believe that these costs would be offset by the benefits derived from the

overall intent of this proposed clarification to allow qualified, licensed practitioners, who are

authorized by the medical staff, to order these se rvices as long as they are responsible for the

care of the patient for whom they are ordering the services and as long as such privileges are in

accordance with hospital policies and applicable State laws and regulations. Furthermore, the

proposed changes would clarify existing hospital c onditions of participati on to make them more

consistent not only with each other, but also with many State laws and with current practice.

Therefore, while this proposal would impose a minimal burden on hospitals, we believe that, in

sum, the changes proposed would gr eatly benefit hospitals overall.

VIII. Effects of Proposed Changes in the Capital IPPS

A. General Considerations

Fiscal year (FY) 2001 was the last year of the 10-year transition period established to

phase in the PPS for hospital capital-related costs. During the transition period, hospitals were

paid under one of two payment methodologies: fu lly prospective or hold harmless. Under the

fully prospective methodology, hos pitals were paid a blend of th e capital Federal rate and their

hospital-specific rate (§412.340). Under the hold-harmless methodolog y, unless a hospital

elected payment based on 100 percent of the capita l Federal rate, hospitals were paid 85 percent

of reasonable costs for old capital costs (100 pe rcent for SCHs) plus an amount for new capital

costs based on a proportion of the capital Federal rate (§412.344). As we state in section V. ofCMS-1498-P 1263

the preamble of this proposed rule, with the 10-ye ar transition period ending with hospital cost

reporting periods beginning on or after Oct ober 1, 2001 (FY 2002), beginning in FY 2002 capital

prospective payment system payments for most hospitals are based solely on the capital Federal

rate. Therefore, we no longer include informati on on obligated capital costs or projections of old

capital costs and new capital costs, which were factors needed to calculate payments during the

transition period, for our impact analysis.

The basic methodology for determining a capital IPPS payment is set forth at §412.312.

The basic methodology for calculating capital IPPS payments in FY 2011 is as follows:

(Standard Federal Rate) x (DRG weight) x (GAF) x (COLA for hospitals located in

Alaska and Hawaii) x (1 + DSH Adjustment Fact or + IME adjustment factor, if applicable).

In addition to the other adjustments, hospitals may also receive outlier payments for those

cases that qualify under the threshold established for each fiscal year.

The data used in developing the impact analysis presented below are taken from the

December 2009 update of the FY 2009 MedPAR f ile and the December 2009 update of the

Provider-Specific File (PSF) that is used for payment purposes. Although the analyses of the

changes to the capital prospective payment syst em do not incorporate cost data, we used the

December 2009 update of the most recently availa ble hospital cost report data (FYs 2006 and

2007) to categorize hospitals. Our analysis has several qualifications. We use the best data

available and make assumptions about case-mix and beneficiary en rollment as described below.

In addition, as discussed in section V.E. of the preamble of this proposed rule, we are proposing

a -2.9 percent documentation and coding adjustme nt to the capital Federal rate for FY 2011, in

addition to the -0.6 percent adju stment established for FY 2008 a nd the -0.9 percent adjustment

for FY 2009. This proposal results in a cumula tive adjustment factor of 0.957 that we areCMS-1498-P 1264

proposing to apply to the capital Federal rate to account for imp rovements in doc umentation and

coding under the MS-DRGs in FY 2011. We also are proposing to adjust the Puerto Ricospecific capital rate in FY 2011 by -2.4 percen t to account for changes in documentation and

coding resulting from the adoption of the MS-DRGs.

Due to the interdependent nature of the IPPS, it is very difficult to precisely quantify the

impact associated with each change. In additi on, we draw upon various sources for the data used

to categorize hospitals in the tables. In some ca ses (for instance, the number of beds), there is a

fair degree of variation in the data from differen t sources. We have atte mpted to construct these

variables with the best availa ble sources overall. However, for individual hospitals, some

miscategorizations are possible.

Using cases from the December 2009 update of the FY 2009 MedPAR file, we simulated

payments under the capital PPS for FY 2010 and FY 2011 for a comparison of total payments

per case. Any short-term, acute care hospitals not paid under the general IPPS (Indian Health

Service hospitals and hospitals in Maryland) are excluded from the simulations.

As we explain in section III.A.4. of the Addendum to this proposed rule, payments are no

longer made under the regular exceptions provi sion under §§412.348(b) through (e). Therefore,

we no longer use the actuarial cap ital cost model (described in Appendix B of the August 1, 2001

proposed rule (66 FR 40099)). We modeled pa yments for each hospital by multiplying the

capital Federal rate by the GAF and the hospital’s case-mix. We then added estimated payments

for indirect medical education, di sproportionate share, and outliers , if applicable. For purposes

of this impact analysis, the model includes the following assumptions:

● We estimate that the Medicare case-mix index will increase by 1.0 percent in both

FYs 2010 and 2011.CMS-1498-P 1265

● We estimate that the Medicare discharg es will be approxima tely 11.8 million in FY

2010 and 12.1 million FY 2011.

● The capital Federal rate was updated beginning in FY 1996 by an analytical

framework that considers changes in the prices associated with capital-related costs and

adjustments to account for forecast error, change s in the case-mix index, allowable changes in

intensity, and other factors. As discussed in section III.1.a. of the Addendum to this proposed

rule, the proposed FY 2011 update is 1.5 percent.

● In addition to the FY 2011 update factor , the proposed FY 2011 capital Federal rate

was calculated based on a proposed GAF/DRG b udget neutrality factor of 1.0000, a proposed

outlier adjustment factor of 0.9424, and a proposed (special) excep tions adjustment factor of

0.9997.

● For FY 2011, as discussed above and in sec tion V.E. of the preamble to this proposed

rule, we also are proposing to apply a 0.957 adju stment to the proposed FY 2011 capital Federal

rate for changes in documentati on and coding that are expected to increase case-mix under the

MS-DRGs.

B. Results

We used the actuarial mode l described above to estimate the potential impact of our

proposed changes for FY 2011 on total capital pa yments per case, using a universe of 3,472

hospitals. As described above, the individual hospital payment parameters are taken from the

best available data, including the Decembe r 2009 update of the FY 2009 MedPAR file, the

December 2009 update to the PSF, and the most recent cost report data from the December 2009

update of HCRIS. In Table III, we present a co mparison of estimated total payments per case for

FY 2010 compared to FY 2011 based on the proposed FY 2011 payment policies. Column 2CMS-1498-P 1266

shows estimates of payments pe r case under our model for FY 2010. Column 3 shows estimates

of payments per case under our model for FY 2011. Column 4 shows the total percentage

change in payments from FY 2010 to FY 2011. The change represented in Column 4 includes

the proposed 1.5 percent update to the capital Fede ral rate and other proposed changes in the

adjustments to the capital Federal rate. The comparisons are provided by: (1) geographic

location; (2) region; and (3) payment classification.

The simulation results show that, on average, capital payments per case in FY 2011 are

expected to decrease as compared to capital payments per case in FY 2010. The proposed

capital Federal rate for FY 2011 w ould increase 1.5 percent as compared to the FY 2010 capital

rate. The proposed changes to the GAFs are expect ed to result, on average, in a slight decrease

in capital payments, although, for rural areas, it is more of a contributing factor to the overall

estimated decrease in capital payments than to urban areas mostly due to the application of the

rural floor to the wage index. Our impact analys is includes actuarial assumptions of growth from

FY 2010 to FY 2011 resulting in a slight increase in capital payments. The net result of these

proposed changes is an estimated -0.2 percent ch ange in capital payments per discharge from

FY 2010 to FY 2011 for all hospitals (as shown below in Table III).

The geographic comparison shows that, on averag e, all urban hospitals are expected to

experience a 0.2 percent decrease in capital IPPS payments per case in FY 2011 as compared to

FY 2010, while hospitals in large urban areas ar e expected to experien ce a 0.1 percent decrease

in capital IPPS payments per case in FY 2011 as compared to FY 2010. Capital IPPS payments

per case for rural hospitals are ex pected to decrease 0.7 percent.

The change comparisons by regions show some regions experiencing slight increases in

total capital payments, while other regions are estimated to experience decreases in capitalCMS-1498-P 1267

payments from FY 2010 to FY 2011. For the urban regions, changes in capital payments range

from a -1.3 percent for the New England urban region to a 0.5 percent for the Pacific urban

region. Estimates for two urban regions, East No rth Central and West No rth Central, show no

change in total capital payments from FY 2010 to FY 2011. Estimates of changes for the rural

regions from FY 2010 to FY 2011 range from a 2.3 percent decrease in capital payments in the

New England rural region to a 0.6 percent increa se for the West South Central rural region.

These regional differences are primarily du e to the proposed changes to the GAFs and

differences in the estimate d increase in outlier payments from FY 2010 to FY 2011.

By type of ownership, proprietary hospitals are estimated to experience an increase of 0.1

percent in capital payments per case, and vol untary hospitals are estimated to experience a 0.3

percent decrease in capital payments per case from FY 2010 to FY 2011. We estimate no change

in capital payments per case for government hospitals from FY 2010 to FY 2011.

Section 1886(d)(10) of the Act establis hed the MGCRB. Before FY 2005, hospitals

could apply to the MGCRB for reclassification for purposes of the standardized amount, wage

index, or both. Section 401(c) of Pub. L. 108-173 equalized the standardized amounts under the

operating IPPS. Therefore, beginning in FY 2005, there is no longer reclassification for the

purposes of the standardized amounts; however, ho spitals still may apply for reclassification for

purposes of the wage index for FY 2011. Reclassi fication for wage index purposes also affects

the GAFs because that factor is constructed from the hospital wage index.

To present the effects of the hospitals being reclassified for FY 2011, we show the

average capital payments per case for reclassified hospitals for FY 2010. All classifications of

reclassified hospitals are expected to experience a decrease in capital payments per case in FY

2011 as compared to FY 2010. Urban reclassified a nd rural reclassified hospitals are expected toCMS-1498-P 1268

have a decrease in capital payments of 0.2 per cent and 0.3 percent, respectively. Capital

payments for urban nonreclassified are estima ted to decrease 0.1 percent while rural

nonreclassified hospitals are estimated to decrease 1.1 percent. Other recla ssified hospitals (that

is, hospitals reclassified under section 1886(d)(8)( B) of the Act) are expected to experience a

decrease of 1.6 percent in capital payment from FY 2010 to FY 2011.

T ABLE III.—C OMPARISON OF T OTAL P AYMENTS P ER C ASE [FY 2010 Payments Compared To Proposed FY 2011 Payments]

Number of hospitals Average FY 2010 payments/

case Average Proposed FY 2011 payments/

case Change

By Geographic Location: All hospit als ....................................................................................................... 3,472 791 789 -0.2 Large urban areas (populations ov er 1 mil lion) .................................................. 1, 365 872 871 -0.1 Other urban areas (populat ions of 1 million of fewer) ......................................... 1,137 780 778 -0.2 Rural ar eas

........................................................................................................ 970 549 545 -0.7 Urban hospita ls.................................................................................................. 2, 502 831 829 -0.2 0-99 beds

....................................................................................................... 635 656 655 - 0.1 100-199 beds

................................................................................................. 791 714 711 -0.4 200-299 beds

................................................................................................. 461 782 779 -0.4 300-499 beds

................................................................................................. 425 854 852 -0.2 500 or more beds

........................................................................................... 190 1,005 1,007 0. 2 Rural hospi tals................................................................................................... 970 549 545 -0.7 0-49 beds

....................................................................................................... 337 442 442 0 .1 50-99 beds

..................................................................................................... 366 509 504 -1 .1 100-149 beds

................................................................................................. 164 554 551 -0.5 150-199 beds

................................................................................................. 61 600 598 -0.3 200 or more beds

........................................................................................... 42 670 663 -0.9 By Region: Urban by Regi on................................................................................................ 2,502 831 829 - 0.2 New England

................................................................................................. 121 863 852 -1.3 Middle Atlant ic ............................................................................................... 330 885 879 -0. 7 South Atla ntic................................................................................................. 383 783 781 -0 .2 East North C entral

......................................................................................... 403 806 806 0.0 East South Cent ral......................................................................................... 155 742 739 -0.5 West North C entral

........................................................................................ 166 817 817 0.0 West South C entral

........................................................................................ 342 776 778 0.3 Mountain

........................................................................................................ 162 856 855 - 0.1 Pacifi c............................................................................................................ 390 987 99 2 0.5 Puerto Ri co.................................................................................................... 50 373 375 0.4 Rural by R egion

................................................................................................. 970 549 545 -0 .7 New England

................................................................................................. 24 724 708 -2.3 Middle Atlant ic ............................................................................................... 70 565 558 -1.2 South Atla ntic................................................................................................. 165 540 534 -1 .1 East North Cent ral ......................................................................................... 120 574 569 -0.9 East South Cent ral......................................................................................... 175 497 495 -0.4 West North Cent ral ........................................................................................ 100 562 558 -0.8 West South C entral

........................................................................................ 214 514 517 0.6 Mountain

........................................................................................................ 71 551 553 0. 3 Pacifi c............................................................................................................ 31 693 685 -1.1 By Payment Classification: All hospit als ....................................................................................................... 3,472 791 789 -0.2 Large urban areas (populations ov er 1 mil lion) .................................................. 1, 403 871 870 -0.1 Other urban areas (populat ions of 1 million of fewer) ......................................... 1,152 779 777 -0.2CMS-1498-P 1269

T ABLE III.—C OMPARISON OF T OTAL P AYMENTS P ER C ASE [FY 2010 Payments Compared To Proposed FY 2011 Payments]

Number of hospitals Average FY 2010 payments/

case Average Proposed FY 2011 payments/

case Change

Rural ar eas

........................................................................................................ 917 546 542 -0.7 Teaching Status: Non-teachi ng ................................................................................................. 2,434 674 672 -0 .3 Fewer than 100 Resi dents

............................................................................. 798 793 790 -0.4 100 or more Residents 240 1,121 1,122 0.1 Urban DSH: 100 or more beds ....................................................................................... 1, 510 859 858 -0.1 Less than 100 beds

.................................................................................... 340 593 589 -0.7 Rural DSH: Sole Community (SCH/EACH)

................................................................... 407 480 477 -0.6 Referral Center (RRC/EACH)

..................................................................... 209 603 598 -0.8 Other Rural: 100 or more beds

................................................................................... 30 500 495 -1.0 Less than 100 beds

................................................................................ 142 453 448 -1.1 Urban teaching and DSH: Both teaching and DSH

.................................................................................. 806 929 928 -0.1 Teaching and no DSH.................................................................................... 169 807 804 -0.4 No teaching and DSH .................................................................................... 1, 044 717 715 -0.3 No teaching and no DSH

............................................................................... 536 731 731 0.0 Rural Hospital Types: Non special status hospitals ........................................................................... 2, 435 834 833 -0.1 RRC/EACH

.................................................................................................... 59 747 743 -0.5 SCH/EACH

.................................................................................................... 38 686 688 0.3 Medicare-dependent hospitals (MDH)

............................................................ 10 472 468 -1.0 SCH, RRC and EACH

.................................................................................... 13 830 824 -0.7 Hospitals Reclassified by the Medicare Geographic Classification Review Board: FY2011 Reclassifications: All Urban Reclassi fied

.................................................................................... 488 835 834 -0.2 All Urban Non-Reclas sified ............................................................................ 1, 985 831 830 -0.1 All Rural Reclas sified

..................................................................................... 322 590 588 -0.3 All Rural Non-Recl assified

............................................................................. 585 496 491 -1.1 Other Reclassified Hospitals (Section 1886(d)(8)(B )) ..................................... 55 557 548 -1.6 Type of Ownership: Voluntar y ....................................................................................................... 1,978 807 804 -0.3 Proprieta ry ..................................................................................................... 837 718 719 0 .1 Government

................................................................................................... 577 795 794 0.0 Medicare Utilization as a Percent of Inpatient Days: 0-25

............................................................................................................... 353 966 96 7 0.1 25- 50

............................................................................................................. 1,593 859 8 59 -0.1 50- 65

............................................................................................................. 1,202 678 6 74 -0.5 Over 65

.......................................................................................................... 237 583 580 -0.5

IX. Effects of Proposed Payment Rate Ch anges and Policy Changes under the LTCH PPS

A. Introduction and Ge neral Considerations

In section VII. of the preamble and section V. of the Addendum of this proposed rule, we

are setting forth the proposed annual update to the payment rates for the LTCH PPS for FY 2011.

In the preamble, we specify the statutory author ity for the proposed provisions that are presented,CMS-1498-P 1270

identify those proposed policies where discretion has been exercised, and present rationale for

our decisions as well as alternatives that were c onsidered. In this section of Appendix A to this

proposed rule, we discuss the impact of the propose d changes to the payment rates, factors, and

other payment rate policies related to the LTCH PPS that are presented in the preamble of this

proposed rule in terms of their estimated fiscal impact on the Medicare budget and on LTCHs.

On March 23, 2010, the Patient Protection a nd Affordable Care Act, Pub. L. 111-148,

was enacted. Following the enactment of P ub. L. 111-148, the Health Care and Education

Reconciliation Act of 2010, P ub. L. 111-152 (enacted on March 30, 2010), amended certain

provisions of Pub. L. 111-148. A number of th e provisions of Pub. L. 111-148, as amended by

Pub. L. 111-152, affect the IPPS and the LTCH PPS and the providers and suppliers addressed in

this proposed rule. However, due to the timing of the passage of the legisl ation, we are unable to

address those provisions in this proposed rule. Therefore, the proposed policies and payment

rates in this proposed rule do not reflect the new legislation. We plan to issue separate

documents in the Federal Register addressing the provisions of Pub. L. 111-148, as amended,

that affect our proposed policies and payment rates for FY 2011 under the IPPS and the LTCH

PPS. In addition, we plan to issue further inst ructions implementing the provisions of Pub. L.

111-148, as amended, that affect the policies and payment rates for FY 2010 under the IPPS and

for RY 2010 under the LTCH PPS.

Currently, our database of 421 LTCHs in cludes the data for 77 nonprofit (voluntary

ownership control) LTCHs a nd 301 proprietary LTCHs. Of the remaining 43 LTCHs, 12

LTCHs are government-owned and operated and th e ownership type of the other 31 LTCHs is

unknown. In the impact analysis, we are using the proposed rates, factors, and policies presented

in this proposed rule, including proposed updated wage index values and the labor-related share,CMS-1498-P 1271

and the best available claims and CCR data to estimate the change in payments for FY 2011.

The standard Federal rate for RY 2010 is $39,896.65. As discussed in section V.A.2. of the

Addendum to this proposed rule, consistent with our historical practice, we are proposing to

update the standard Federal rate for FY 2011 by -0.1 percent in order to establish the proposed

FY 2011 standard Federal rate at $39,856.75. This includes a proposed market basket update of

2.4 percent and a proposed documentation and coding adjustment of -2.5 percent to account for

increases in case-mix that do not reflect real changes in patients’ severity of illness associated

with the adoption of the MS-LTC-DRGs. Based on the best available data for the 421 LTCHs in

our database, we estimate that the proposed update to the standard Federal rate for FY 2011

(discussed in section VII.C. of the preamble of this proposed rule) and the proposed changes to

the area wage adjustment (discussed in section V.B. of the Addendum to this proposed rule) for

FY 2011, in addition to an estimated increase in HCO payments and an es timated increase in

SSO payments, will result in an increase in estimated payments from RY 2010 of approximately

$41 million (or about 0.8 percent). Based on the 4 21 LTCHs in our databa se, we estimate FY

2011 LTCH PPS payments to be approximately $4.946 billion, an increase from RY 2010 LTCH

PPS payments of approximately $4.905 billion. Becau se the combined distributional effects and

estimated changes to the Medicare program paym ents would be greater than $100 million, this

proposed rule is considered a major economic ru le, as defined in this section. We note the

approximately $41 million for the projected increase in estimated aggregate LTCH PPS

payments from RY 2010 to FY 2011 does not reflect changes in LTCH admissions or case-mix

intensity in estimated LTCH PPS payments, which also would affect overall payment changes.

The projected 0.8 percent increase in estimate d payments per discharge from RY 2010 to

FY 2011 is attributable to seve ral factors, including the proposed -0.1 percent decrease to theCMS-1498-P 1272

standard Federal rate, proposed changes in the wage index values (including the proposed change

to the labor-related share) and projected incr eases in estimated HCO and SSO payments. As

Table IV shows, the proposed change attributable solely to the standard Fe deral rate is projected

to result in an decrease of 0.1 percent in estima ted payments per discharge from RY 2010 to FY

2011, on average, for all LTCHs, while the proposed changes to the area wage adjustment are

projected to result in an increase in estimated payments of 0.1 percent, on average, for all

LTCHs.

As discussed in section V.B. of the Addendum to this proposed rule, we are proposing to

update the wage index values fo r FY 2011 based on the most recen t available data. In addition,

we are proposing to decrease the labor-rel ated share slightly from 75.779 percent to

75.407 percent under the LTCH PPS for FY 2011 based on the most recent available data on the

relative importance of the labor-related share of operating and capital costs of the RPL market

basket (discussed in section VII.C.2. of the pr eamble of this proposed rule). This proposed

update to the wage data and the labor-related share is expected to increase LTCH PPS payments

by 0.1 percent.

Table IV below shows the impact of the proposed payment rate and proposed policy

changes on LTCH PPS payments for FY 2011 by comparing RY 2010 estimated payments to FY

2011 estimated payments. The projected increase in payments per di scharge from RY 2010 to

FY 2011 is 0.8 percent (shown in Column 8). This projected increase in payments is attributable

to the impacts of the proposed change to the stan dard Federal rate (-0.1 pe rcent in Column 6) and

the proposed change due to the area wage adjustme nt (0.1 percent in Column 7), as well as the

effect of the estimated increase in payments for HCO cases and SSO cases in FY 2011 as

compared to RY 2010 (0.5 percent and 0.3 percent, respectively). That is, estimated total HCOCMS-1498-P 1273

payments are projected to increase from RY 2010 to FY 2011 in order to ensure that estimated

HCO payments will be 8 percent of total estimated LTCH PPS payments in FY 2011. An

analysis of the most recent available LTCH PPS claims data (FY 2009 claims from the

December 2009 update of the MedPAR files) i ndicates that the RY 2010 HCO threshold of

$18,425 may result in HCO payments in RY 2010 th at fall below the estimated 8 percent.

Specifically, we currently estimate that HCO pa yments will be approximately 7.5 percent of

estimated total LTCH PPS payments in RY 2010. We estimate that the impact of the increase in

HCO payments would result in approximately a 0. 5 percent increase in estimated payments from

RY 2010 to FY 2011 on average for all LTCHs. Furthermore, in calculating the estimated

increase in payments from RY 2010 to FY 2011 fo r HCO and SSO cases, we increased estimated

costs by the applicable market basket percentage increase as projected by our actuaries, which

increases payments by 0.3 percent relative to last year. We note that estimated payments for all

SSO cases comprise approximately 14 percent of estimated total LTCH PPS payments, and

estimated payments for HCO cases comprise approximately 8 percent of estimated total LTCH

PPS payments. Payments for HCO cases are based on 80 percent of the estimated cost above the

HCO threshold, while the majority of the payments for SSO cases (over 65 percent) are based on

the estimated cost of the SSO case.

As we discuss in detail throughout this pr oposed rule, based on the most recent available

data, we believe that the provisions of this propos ed rule relating to the LTCH PPS will result in

an increase in estimated aggregate LTCH PPS payments and that the resulting LTCH PPS

payment amounts result in appr opriate Medicare payments.CMS-1498-P 1274

B. Impact on Rural Hospitals

For purposes of section 1102(b) of the Act, we define a small rura l hospital as a hospital

that is located outside of a Me tropolitan Statistical Area and has fewer than 100 beds. As shown

in Table IV, we are projecting a 1.4 percent increa se in estimated payments per discharge for FY

2011 as compared to RY 2010 for rural LTCHs that would result from the proposed changes

presented in this proposed rule (that is, the proposed update to the standard Federal rate

discussed in section V.A. of the Addendum to this proposed rule and the proposed changes to the

area wage adjustment as discussed in section V. B. of the Addendum to this proposed rule) as

well as the effect of estimated changes to HCO and SSO payments. This estimated impact is

based on the data for the 26 rural LTCHs in our database of 421 LTCHs, for which complete

data were available.

The estimated increase in LTCH PPS payments from RY 2010 to FY 2011 for rural

LTCHs is primarily due to the higher than average impacts from the proposed changes to the

area wage adjustment and the proposed reduction in the labor-related share from 75.779 to

75.407 percent, which results in an estimated 0.6 percent in crease in payments. We believe that

the proposed changes to the area wage adjustment presented in this proposed rule (that is, the

proposed use of updated wage data and the propos ed change in the labor-related share) would

result in accurate and appropria te LTCH PPS payments in FY 2011 because they are based on

the most recent available data. Such updated data appr opriately reflect national differences in

area wage levels and appropriately identifies the portion of the st andard Federal rate that should

be adjusted to account for such differences in area wages, thereby resulting in accurate and

appropriate LTCH PPS payments.CMS-1498-P 1275

C. Anticipated Effects of Proposed LTCH PPS Payment Rate Change and Policy Changes

We discuss the impact of the proposed change s to the payment rates, factors, and other

payment rate policies under the LTCH PPS for FY 2011 (in terms of their estimated fiscal impact

on the Medicare budget and on LTCHs) in section VII. of the preamble of this proposed rule.

1. Budgetary Impact

Section 123(a)(1) of the BBRA requires that the PPS developed for LTCHs “maintain

budget neutrality.” We believe that the statute' s mandate for budget neutrality applies only to the

first year of the implementation of the LTCH PPS (that is, FY 2003). Therefore, in calculating

the FY 2003 standard Federal rate under §412.523(d )(2), we set total estimated payments for

FY 2003 under the LTCH PPS so that estimated aggregate payments under the LTCH PPS were

estimated to equal the amount that would have been paid if the LTCH PPS had not been

implemented.

As discussed in section IX.A. of this Appe ndix A, we project an increase in aggregate

LTCH PPS payments in FY 2011 of approximately $41 million (or 0.8 percent) based on the 421

LTCHs in our database.

2. Impact on Providers

The basic methodology for determining a per discharge LTCH PPS payment is set forth

in §412.515 through §412.536. In addition to th e basic MS-LTC-DRG payment (standard

Federal rate multiplied by the MS-LTC-DRG relative weight), we make adjustments for

differences in area wage levels, COLA for Alas ka and Hawaii, and SSOs. Furthermore, LTCHs

may also receive HCO payments for those cases that qualify based on the threshold established

each year.CMS-1498-P 1276

To understand the impact of the proposed changes to the LTCH PPS payments presented

in this proposed rule on different categories of LTCHs for FY 2011, it is necessary to estimate

payments per discharge for RY 2010 using the ra tes, factors, including the FY 2010 GROUPER

(Version 27.0) and relative weights, and policies established in the FY 2010 IPPS/RY 2010

LTCH PPS final rule (74 FR 43945 through 43994 and 44021 through 44030). It is also

necessary to estimate the paymen ts per discharge that would be made under the proposed LTCH

PPS rates, factors, policies, and GROUPER (Ver sion 28.0) for FY 2011 (as discussed in VII. of

the preamble and section V. of the Addendum to this proposed rule). These estimates of

RY 2010 and FY 2011 LTCH PPS payments are based on the best available LTCH claims data

and other factors, such as the application of inflation factors to estimate costs for SSO and HCO

cases in each year. We also evaluated the change in estimated RY 2010 payments to estimated

FY 2011 payments (on a per discharge basis) for each category of LTCHs.

Hospital groups were based on characteristic s provided in the OSCAR data, FY 2006

through FY 2007 cost report data in HCRIS, and PSF data. Hospita ls with incomplete

characteristics were grouped into the "unknow n" category. Hospital groups include the

following:

● Location: large urba n/other urban/rural.

● Participation date.

● Ownership control.

● Census region.

● Bed size.

To estimate the impacts of the payment rates and policy changes among the various

categories of existing providers, we used LTCH cases from the FY 2009 MedPAR file toCMS-1498-P 1277

estimate payments for RY 2010 and to estimate payments for FY 2011 for 421 LTCHs. We

believe that the discharges based on the FY 2009 MedPAR data for the 421 LTCHs in our

database, which includes 301 propr ietary LTCHs, provide sufficient representation in the MSLTC-DRGs containing discharges for patients who received LTCH care for the most commonly

treated LTCH patients' diagnoses.

3. Calculation of Pr ospective Payments

For purposes of this impact analysis, to estimate per discharge payments under the LTCH

PPS, we simulated payments on a case-by-case basis using LTCH claims from the FY 2009

MedPAR files. For modeling estimated LTCH PPS payments for RY 2010, we applied the RY

2010 standard Federal rate (t hat is, $39,896.65, which is effec tive for LTCH discharges

occurring on or after October 1, 2009, and through September 30, 2010). For modeling

estimated LTCH PPS payments for FY 2011, we applied the proposed FY 2011 standard Federal

rate of $39,856.75, which would be effective for LTCH discharges occurring on or after October

1, 2010, and through September 30, 2011.

Furthermore, in modeling estimated LTCH PPS payments for both RY 2010 and FY

2011 in this impact analysis, we applied the RY 2010 and proposed FY 2011 adjustments for

area wage differences and the COLA for Alaska and Hawaii. Specifically, we adjusted for area

wage differences for estimated RY 2010 paym ents using the RY 2010 LTCH PPS labor-related

share of 75.779 percent (74 FR 43968), the wage inde x values established in the Tables 12A and

12B of the Addendum to the FY 2010 IPPS/RY 2010 LTCH PPS final rule (74 FR 44192

through 44213) and the RY 2010 COLA factors shown in the table in section V. of the

Addendum to that final rule (74 FR 44026). Similarly, we adjusted for area wage differences for

estimated FY 2011 payments using the proposed LTCH PPS FY 2011 labor-related share ofCMS-1498-P 1278

75.407 percent (section VII.C.2.d. of the preamble of this proposed rule), the FY 2011 proposed

wage index values presented in Tables 12A and 12B of the Addendum to this proposed rule, and

the FY 2011 COLA factors shown in the table in section V.B.5. of the Addendum to this

proposed rule.

As discussed above, our impact analysis refl ects an estimated change in payments for

SSO cases as well as an estimated increase in payments for HCO cases (as described in section

V.C. of the Addendum to this proposed rule). In modeling proposed payments for SSO and

HCO cases in RY 2010, we applied an inflation factor of 1.024 percent (determined by OACT)

to the estimated costs of each case determined from the charges reported on the claims in the FY

2009 MedPAR files and the best available CCRs from the December 2009 update of the PSF. In

modeling proposed payments for SSO and HCO case s in FY 2011, we applied an inflation factor

of 1.049 (determined by OACT) to the estimated co sts of each case determined from the charges

reported on the claims in the FY 2009 MedPAR files and the best available CCRs from the

December 2009 update of the PSF. Furthermor e, in modeling estimated LTCH PPS payments

for both RY 2010 and FY 2011 in this impact anal ysis, we applied the RY 2010 HCO fixed-loss

amount of $18,425 (74 FR 44029) and the propos ed FY 2011 fixed loss amount of $18,692 (as

discussed in section V.C.3. of the Addendum of this proposed rule).

These impacts reflect the estimated "losses" or "gains" among the various classifications

of LTCHs from the RY 2010 to FY 2011 based on the proposed payment rates and policy

changes presented in this proposed rule. Tabl e IV illustrates the estima ted aggregate impact of

the LTCH PPS among various classifications of LTCHs.

● The first column, LTCH Classification, identifies the type of LTCH.

● The second column lists the number of LTCHs of each classification type.CMS-1498-P 1279

● The third column identifies the number of LTCH cases.

● The fourth column shows the estimate d payment per discharge for RY 2010 (as

described above).

● The fifth column shows the estimated payment per discharge for FY 2011 (as

described above).

● The sixth column shows the percentage change in estimated payments per discharge

from RY 2010 to FY 2011 for proposed changes to the standard Federal ra te (as discussed in

section V.A. of the Addendum to this proposed rule).

● The seventh column shows the percentage change in estimated payments per discharge

from RY 2010 to FY 2011 for proposed changes to the area wage adjustment at §412.525(c) (as

discussed in section V.B. of the Addendum to this proposed rule).

● The eighth column shows the percentage change in estimated payments per discharge

from RY 2010 (Column 4) to FY 2011 (Column 5) for all proposed changes (and includes the

effect of estimated changes to HCO and SSO payments).

TABLE IV: Impact of Proposed Payment Rate and Policy Changes to LTCH PPS Payments for FY 2011 (Estimated FY 2010 Payments Compared to Estimated FY 2011 Payments * )

LTCH Classification (1) Number of LTCHs

(2) Number of LTCH PPS Cases (3) Average RY 2010 LTCH

PPS Rate

Year Payment Per Case 1

(4) Average FY 2011 LTCH

PPS Rate

Year Proposed Payment Per Case 2 (5) Percent Change in Estimated Payments Per Discharge from RY 2010 to FY

2011 for Proposed Changes to the Federal

Rate 3

(6) Percent Change in Estimated Payments Per Discharge from RY 2010 to FY

2011 for Proposed Changes to the Area

Wage Adjustment 4 (7) Percent Change in Payments Per Discharge from RY 2010 to FY

2011 for

All Proposed Changes 5 (8)

ALL PROVIDERS 421 131,490 37,304 37,616 -0.1 0.1 0.8

BY LOCATION:

RURAL 26 5,610 31,693 32,125 -0.1 0.6 1.4

URBAN 395 125,880 37,554 37,860 -0.1 0.1 0.8CMS-1498-P 1280

LTCH Classification (1) Number of LTCHs

(2) Number of LTCH PPS Cases (3) Average RY 2010 LTCH

PPS Rate

Year Payment Per Case 1

(4) Average FY 2011 LTCH

PPS Rate

Year Proposed Payment Per Case 2 (5) Percent Change in Estimated Payments Per Discharge from RY 2010 to FY

2011 for Proposed Changes to the Federal

Rate 3

(6) Percent Change in Estimated Payments Per Discharge from RY 2010 to FY

2011 for Proposed Changes to the Area

Wage Adjustment 4 (7) Percent Change in Payments Per Discharge from RY 2010 to FY

2011 for

All Proposed Changes 5 (8)

LARGE 204 75,855 39,025 39,364 -0.1 0.1 0.9

OTHER 191 50,025 35,324 35,580 -0.1 0.1 0.7

BY PARTICIPATION DATE:

BEFORE OCT. 1983 17 6,244 32,058 32,423 -0.1 0.2 1.1

OCT. 1983 - SEPT. 1993 44 16,824 38,212 38,574 -0.1 0.1 0.9

OCT. 1993 - SEPT. 2002 189 63,987 36,781 37,053 -0.1 0.1 0.7

AFTER OCTOBER 2002 161 41,657 38,501 38,831 -0.1 0.1 0.9 UNKNOWN PARTICIPATION DATE 10 2,778 37,710 38,233 -0.1 0.3 1.4

BY OWNERSHIP TYPE:

VOLUNTAFY 77 19,922 37,393 37,822 -0.1 0.2 1.1

PROPRIETARY 301 105,986 37,212 37,492 -0.1 0.1 0.8

GOVERNMENT 12 1,588 38,960 39,458 -0.1 -0.2 1.3 UNKNOWN OWNERSHIP TYPE 31 3,994 38,639 39,134 -0.1 0.1 1.3

BY REGION:

NEW ENGLAND 15 7,584 32,848 33,213 -0.1 0.1 1.1

MIDDLE ATLANTIC 29 7,742 38,086 38,320 -0.1 -0.2 0.6

SOUTH ATLANTIC 55 14,665 40,522 40,765 -0.1 -0.2 0.6

EAST NORTH CENTRAL 68 19,194 40,304 40,652 -0.1 0.2 0.9

EAST SOUTH CENTRAL 31 7,909 37,380 37,569 -0.1 -0.2 0.5

WEST NORTH CENTRAL 24 5,178 38,607 38,834 -0.1 0.0 0.6

WEST SOUTH CENTRAL 142 50,537 32,924 33,239 -0.1 0.3 1

MOUNTAIN 32 6,268 40,358 40,725 -0.1 0.0 0.9

PACIFIC 25 12,413 46,801 47,221 -0.1 0.3 0.9

BY BED SIZE:

BEDS: 0-24 42 5,288 32,969 33,438 -0.1 0.6 1.4

BEDS: 25-49 192 41,372 37,081 37,298 -0.1 0.0 0.6

BEDS: 50-74 101 32,024 38,230 38,567 -0.1 0.1 0.9

BEDS: 75-124 50 22,652 39,512 39,955 -0.1 0.3 1.1

BEDS: 125-199 21 15,145 35,296 35,660 -0.1 0.2 1

BEDS: 200 + 15 15,009 36,168 36,378 -0.1 0.0 0.6

1 Estimated RY 2010 payments based on the rates, factors, including the FY 2010 GROUPER (Version 27.0) and relative weights, and policies established in the FY 2010 IPPS/RY 2010 LTCH PPS final rule (74 FR 43945 through 43994 and 44021 through 44030).CMS-1498-P 1281

2 Estimated FY 2011 LTCH PPS payments based on the proposed payment rates and policy changes presented in the preamble and the Addendum of this proposed rule.
3 Percent change in estimated payments per discharge from RY 2010 to FY 2011 for the proposed changes to the standard Federal ra te, as discussed in section V.A. of the Addendum to this proposed rule.

4 Percent change in estimated payments per discharge from RY 2010 to FY 2011 for proposed changes to the area wage adjustment at §412.525(c) (as discussed in section V.B. of the Addendum to this proposed rule).
5 Percent change in estimated payments per discharge from RY 2010 LTCH PPS (shown in Column 4) to FY 2011 LTCH PPS (shown in Col umn 5), including all of the proposed changes presented in the preamble of this proposed rule. Note, this column, which shows the percent change in estimated payments per discharge for all proposed changes, does not equal the sum of the percent changes in estimated payments per discharge for proposed changes to the standard Federal rate (column 6) and the proposed changes to the area wage adjustment (Column 7) du e to the effect of estimated changes in both estimated payments to SSO cases that are paid based on estimated costs and aggregate HCO payments (as discussed in this impact analysis), as well as other interactive effects that cannot be isolated.

4. Results

Based on the most recent available data (as described previously for 421 LTCHs, we

have prepared the following summary of the impact (as shown in Table IV) of the proposed

LTCH PPS payment rate and policy changes presented in this proposed rule. The impact

analysis in Table IV shows that estimated payments per discharge are expected to increase

approximately 0.8 percent, on average, for a ll LTCHs from RY 2010 to FY 2011 as a result of

the proposed payment rate and policy changes presented in this proposed rule, as well as

estimated increases in HCO and SSO payments. We note that we are proposing a -0.1 percent

decrease to the standard Federal rate for FY 2011, based on the latest market basket estimate

(2.4 percent) and the adjustment for the cumula tive effect of changes in documentation and

coding in FYs 2008 and 2009 (-2.5 percent). We not ed earlier in this section that for most

categories of LTCHs, as shown in Table IV (Col umn 6), the impact of the proposed decrease of -

0.1 percent to the standard Federal rate is proj ected to result in approximately a -0.1 percent

decrease in estimated paymen ts per discharge for all LTCHs from RY 2010 to FY 2011.

Furthermore, as discussed previously in this re gulatory impact analysis, the average increase in

estimated payments per discharge from the RY 2010 to FY 2011 for all LT CHs of approximately

0.8 percent (as shown in Table IV) was determined by comparing estimated FY 2011 LTCH PPS

payments (using the proposed rates and policies discussed in this proposed rule) to estimated RY

2010 LTCH PPS payments (as described above in section IX.C. of this Appendix A).CMS-1498-P 1282

a. Location

Based on the most recent available data, the va st majority of LTCHs are located in urban

areas. Only approximately 6 percent of the LTCHs are identified as being located in a rural area,

and approximately 4 percent of all LTCH cases are treated in these rural hospitals. The impact

analysis presented in Table IV shows that the average percent increase in estimated payments per

discharge from RY 2010 to FY 2011 for all hospitals is 0.8 percent for all proposed changes. For

rural LTCHs, the percent change for all proposed changes is estimated to be 1.4 percent, while

for urban LTCHs, we estimate th e increase to be 0.8 percent. Large urban LTCHs are projected

to experience an increase of 0.9 percent in es timated payments per discharge from RY 2010 to

FY 2011, while other urban LTCHs are projected to experience an increase of 0.7 percent in

estimated payments per discharge from RY 2010 to FY 2011, as shown in Table IV.

b. Participation Date

LTCHs are grouped by participation date into four categories: (1) before October 1983;

(2) between October 1983 and September 1993; (3) between October 1993 and September 2002;

and (4) after October 2002. Based on the most rece nt available data, the majority (approximately

49 percent) of the LTCH cases are in hospitals that began participa ting between October 1993

and September 2002, and are projected to experience nearly the average increase (0.7 percent) in

estimated payments per discharge from RY 2010 to FY 2011, as shown in Table IV.

In the participation category where LTCHs began participating in Medicare before

October 1983, LTCHs are projected to experience a higher than average percent increase (1.1

percent) in estimated payments per discharge from RY 2010 to FY 2011, as shown in Table IV.

Approximately 4 percent of LTCH s began participating in Medica re before October 1983. The

LTCHs in this category are projected to experien ce a higher than average increase in estimatedCMS-1498-P 1283

payments because of estimated increases in paym ents due to the proposed change to the area

wage adjustment, the proposed changes in the MS-LTC-DRG classifications and relative

weights, and also because of estimated increases in their SSO payments relative to last year.

Approximately 10 percent of LTCHs began partic ipating in Medicare be tween October 1983 and

September 1993. These LTCHs are projected to ex perience a slightly above average increase

(0.9 percent) in estimated payments from RY 2010 to FY 2011. LTCHs thatbegan participating

in Medicare after October 2002 currently represen t approximately 38 percen t of all LTCHs, and

are projected to experience a slightly above aver age increase (0.9 percent) in estimated payments

from RY 2010 to FY 2011.

c. Ownership Control

Other than LTCHs whose ownership contro l type is unknown, LTCHs are grouped into

three categories based on ownership control type: voluntary, proprietary, and government.

Based on the most recent availa ble data, approximately 18 percen t of LTCHs are identified as

voluntary (Table IV). We expect that, for these LTCHs in the voluntary category, estimated FY

2011 LTCH payments per discharge will increase higher than the average (1.1 percent) in

comparison to estimated payments in RY 2010 pr imarily because we pr oject an increase in

estimated HCO payments and SSO payments to be higher than the average for these LTCHs.

The majority (71 percent) of LTCHs are identified as proprietary and these LTCHs are projected

to experience an average increas e (0.8 percent) in estimated paym ents per discharge from RY

2010 to FY 2011. Finally, government-owned and operated LTCHs (3 percent) are expected to

experience a higher than the average increase ( 1.3 percent) in estimated payments primarily due

to a larger than the average increase in estimated HCO payments and increases under the

proposed MS-LTC-DRG GR OUPER (Version 28) and relative weights.CMS-1498-P 1284

d. Census Region

Estimated payments per discharge for FY 2011 are projected to increase for LTCHs

located in all regions in comparison to RY 2010. Of the 9 census regions, we project that the

increase in estimated payments per discharge will have the largest positive impact on LTCHs in

the New England and West South Central regions (1.1 percent, 1.0, respectively, as shown in

Table IV). The estimated percen t increase in payments per discharge from RY 2010 to FY 2011

for New England is largely attributable to the projected increase in estimated HCO and SSO

payments (explained in great er detail above in section XV.B.4. of this Appendix A). The

projected increase in estimated payments per di scharge from RY 2010 to FY 2011 for LTCHs in

the West South Central region is mostly due to the 43 percent of providers in this region that

would receive a higher wage index in FY 2011 compared to RY 2010 and because all the

providers have a proposed FY 2011 wage index less than 1, which results in an estimated

payment increase because the proposed labor-related share (the portion of the rate adjusted by

the wage index) is being reduced so their lower wage index adjusts a sma ller portion of the rate.

In contrast, LTCHs located in the East Sout h Central region are projected to experience a

lower than average increase in estimated pa yments per discharge from RY 2010 to FY 2011.

The less than average estimated increase in paymen ts of 0.5 percent for LTCHs in the East South

Central region is primarily due to estimated decreases in payments associated with the proposed

wage index because 50 percent of LTCHs located in this region will have a proposed FY 2011

wage index value that is less than their RY 2010 wage index value. Similarly, LTCHs in the

Middle Atlantic and South Atlantic are expected to experience a below average increase in

payments of 0.6 percent primarily due to an estimated decrease in payment because of the

proposed FY 2011 wage index changes.CMS-1498-P 1285

e. Bed Size

LTCHs were grouped into six categories ba sed on bed size: 0-24 beds; 25-49 beds;

50-74 beds; 75-124 beds; 125-199 beds ; and greater than 200 beds.

We project that payments for small LTCHs (0-24 beds) will experience a 1.4 percent increase in

payments due to increases in their wage inde x while large LTCHs (200+ beds) will experience

smaller than average increase in payments of 0.6 percent. LTCHs with between 75 and 124 beds

and between 125 and 199 beds are expected to experience an above average increase in

payments per discharge from RY 2010 to FY 201 1 (1.1 percent and 1.0 percent, respectively)

primarily due to a larger than average estimated increase in payments from the proposed

FY 2011 changes to the area wage adjustment.

D. Effect on the Medicare Program

As noted previously, we project that the provi sions of this proposed rule will result in an

increase in estimated aggregate LTCH PPS payments in FY 2011 of approximately $41 million

(or about 0.8 percent) for th e 421 LTCHs in our database.

E. Effect on Medicare Beneficiaries

Under the LTCH PPS, hospitals receive payment based on the average resources

consumed by patients for each diagnosis. We do not expect any changes in the quality of care or

access to services for Medicare beneficiaries unde r the LTCH PPS, but we expect that paying

prospectively for LTCH services would enhance the efficiency of the Medicare program.

X. Effects of Proposed Policy Changes Regarding Accreditation Requirements for

Medicaid Providers of Inpatient Psychiatric Services for Individuals under Age 21

In section X. of the preamble of this proposed rule, we discuss our proposal to remove the

Medicaid requirement for Joint Commission accreditation of psychiatric hospitals, hospitals withCMS-1498-P 1286

inpatient psychiatric programs, and PRTFs. Ps ychiatric hospitals would have the choice of

meeting the requirements to participate in Me dicare as a psychiatric hospital under 42 CFR

482.60, or obtaining accreditation from a nationa l accrediting organization whose psychiatric

hospital accrediting program has been approved by CMS. Hospitals with inpatient psychiatric

programs would have the choice of meeting the re quirements for participation in Medicare as a

hospital as specified in 42 CFR Part 482 or obtaining accreditation fro m a national accrediting

organization whose hospital accreditation program has been approved by CMS. In addition,

PRTFs would be afforded the flexibility in obtaining accreditation by a national accrediting

organization whose program has been approved by CMS, or by any other accrediting

organization with comparable standards that is recognized by the State. This proposal would

remove specific references to national accrediting bodies to pr ovide appropriate administrative

flexibility to account for any changes in qualifying accrediting organizations.

Ensuring access to services is a priority for CMS, and we believe th at this proposal would

result in psychiatric hospitals, hospitals with i npatient psychiatric programs, and PRTFs meeting

comparable standards required in order to provide services. In addition, the proposed revision to

the accreditation requirement aligns Medicaid standards with exis ting standards in the Medicare

program. We believe that this flexibility in obt aining accreditation will facilitate the provision of

medically necessary, Medicaid-reimbursable psychiatric services to vulnerable children, while

maintaining the high quality of care demanded by the Medicaid program.

We are not preparing an analysis for this proposal under the RFA because we have

determined that the proposal would not have a significant economic impact on a substantial

number of small entities.CMS-1498-P 1287

We are not preparing an analysis for section 1102(b) of the Act because this proposal

would not have a significant impact on the opera tions 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 that may result in expenditure in any

one year of $100 million in 1995 dolla rs, updated annually for inflati on. That threshold level is

currently approximately $135 million. This prop osal would not result in an impact of $135

million or more on State, local or tribal government s, in the aggregate, or on the private sector.

Executive Order 13132 establishes certain requireme nts that an agency must meet when it

promulgates a proposed rule (and subsequent fi nal rule) that imposes substantial direct

requirement costs on State and local governme nts, preempts State law, or otherwise has

Federalism implications. Because this proposal does not impose any costs on State or local

governments, the requirements of Executive Order 13132 are not applicable.

XI. Alternatives Considered

This proposed rule contains a range of polic ies. The preamble of this proposed rule

provides descriptions of the statutory provisi ons that are addressed, identifies implementing

policies where discretion has been exercised, and presents rationales for our decisions and, where

relevant, alternatives that were considered.

XII. Overall Conclusion

A. Acute Care Hospitals

Table I of section VI. of this Appendix demonstrates the estimated distributional impact

of the IPPS budget neutrality requirements for the proposed MS-DRG and wage index changes,

and for the wage index reclassifications unde r the MGCRB. Table I also shows an overallCMS-1498-P 1288

decrease of 0.1 percent in operating payments. We estimate that ope rating payments will

decrease by approxima tely $142 million in FY 2011. In addition, this estimate includes the

reporting of hospital quality data program costs of $2.4 milli on, and a savings of $21 million

associated with the proposed HACs policies a nd all other proposed operating payment policies

described in section VII. of this Appendix. We estimate that capital payments will experience

-0.2 percent change in payments per case, as shown in Table III of section VIII. of this

Appendix. We estimate that capital payments will decrease by approximately $20 million in

FY 2011 compared to FY 2010. The proposed cumulative operating and capital payments

should result in a net decrease of $181 million to IPPS providers. The discussions presented in

the previous pages, in combination with the rest of this proposed rule, constitute a regulatory

impact analysis.

B. LTCHs

Overall, LTCHs are projected to experience an increase in estimated payments per

discharge in FY 2011. In the impact analysis, we are using the proposed rates, factors, and

policies presented in this proposed rule, incl uding proposed updated wage index values and

relative weights, and the best available claims and CCR data to estimate the change in payments

under the LTCH PPS for FY 2011. Accordingly, based on the best available data for the 421

LTCHs in our database, we estimate that FY 2011 LTCH PPS payments will increase

approximately $41 million (o r about 0.8 percent).

XIII. Accounting Statements

A. Acute Care Hospitals

As required by OMB Circular A-4 (available at

http://www.whitehousegov/om b/circulars/a004/a-4.pdf ), in Table V below, we have prepared anCMS-1498-P 1289

accounting statement showing the classification of the expenditures associated with the

provisions of this proposed rule as they relate to acute care hos pitals. This table provides our

best estimate of the change in Medicare paymen ts to providers as a result of the proposed

changes to the IPPS presented in this proposed rule. All expenditures are classified as transfers

to Medicare providers.

Table V.—Accounting Statement: Classifica tion of Estimated Expenditures under the IPPS from FY 2010 to FY 2011

Category Transfers Annualized Monetized Transfers -$181 million From Whom to Whom Federal Government to IPPS Medicare Providers Total -$181 millionCMS-1498-P 1290

B. LTCHs

As discussed in section IX. of this Appe ndix, the impact analysis for the proposed

changes under the LTCH PPS for this proposed rule projects an increase in estimated aggregate

payments of approximately $41 million (or about 0.8 percent) for the 421 LTCHs in our database

that are subject to payment under the LTCH PPS. Therefore, as required by OMB Circular A-4

(available at http://www.whitehouse.gov/ omb/circulars/a004/a-4.pdf )

, in Table VI below, we

have prepared an accounting statement showing th e classification of the expenditures associated

with the provisions of this proposed rule as they relate to changes to the LTCH PPS. Table VI

provides our best estimate of the proposed increase in Medicare payments under the LTCH PPS

as a result of the proposed provisions presented in this proposed rule based on the data for the

421 LTCHs in our database. All expenditures are classified as transfers to Medicare providers

(that is, LTCHs).

TABLE VI. —Accounting Statement: Classification of Estimated Expenditures from the 2010 LTCH PPS Rate Year to the FY 2011 LTCH PPS

Category Transfers Annualized Monetized Transfers Pos itive transfer--Estimated increase in expenditures: $41 million From Whom to Whom Federal Government to LTCH PPS Medicare Providers Total $41 million

XIV. Executive Order 12866

In accordance with the provisions of Ex ecutive Order 12866, the Executive Office of

Management and Budget revi ewed this proposed rule.CMS-1498-P 1291

Appendix B: Recommendation of Update Factor s for Operating Cost Rates of Payment for

Inpatient Hospital Services

I. Background

Section 1886(e)(4)(A) of the Act requires that th e Secretary, taking into consideration the

recommendations of the MedPAC, recommend update factors for i npatient hospital services for

each fiscal year that take into account the am ounts necessary for the efficient and effective

delivery of medically appropriate and necessary care of high qu ality. Under section 1886(e)(5)

of the Act, we are required to publish update factors recommended by the Secretary in the

proposed and final IPPS rules, respectively. Accordingly, this Appendix provides the

recommendations for the update factors for the IPPS national standardized amount, the Puerto

Rico-specific standardi zed amount, the hospital-specific rates for SCHs and MDHs, and the rateof-increase limits for certain hospitals excluded from the IPPS, as well as LTCHs, IPFs, and

IRFs. We also discuss our response to MedP AC’s recommended update factors for inpatient

hospital services.

II. Inpatient Hospital Update for FY 2011

On March 23, 2010, the Patient Protection and Affordab le Care Act (PPACA),

Pub. L. 111-148 was enacted. Following the enactme nt of Pub. L. 111-148, the Health Care and

Education Reconciliation Act of 2010, Public L. 111-152 (enact ed on March 30, 2010), amended

certain provisions of Pub. L. 111-148. A num ber of the provisions of Pub. L. 111-148, as

amended by Pub. L. 111-152, affect the IPPS and the LTCH PPS and the providers and suppliers

addressed in this proposed rule. However, due to the timing of the passage of the legislation, we

are unable to address those provisions in this proposed rule. Therefore, the proposed policies

and payment rates in this proposed rule do not re flect the new legislation. We plan to issueCMS-1498-P 1292

separate documents in the Federal Register addressing the provisions of Pub. L. 111-148, as

amended, that affect our proposed policies and payment rates for FY 2011 under the IPPS and

LTCH PPS, as well as the provisions of Pub. L. 111-148, as amended, that affect the policies and

payment rates for FY 2010 under the IPPS and LTCH PPS.

Section 1886(b)(3)(B)(i)(XX) of the Act, as amended by section 5001(a) of Pub. L.

109-171, sets the FY 2011 percentage increase in the operating cost standardized amount equal

to the rate-of-increase in the hospital market basket for IPPS hospitals in all areas, subject to the

hospital submitting quality information under rules established by the S ecretary in accordance

with section 1886(b)(3)(B)(viii) of the Act. For hospitals that do not provide these data, the

update is equal to the market basket per centage increase less 2.0 percentage points.

Consistent with current law, based on IH S Global Insight, Inc.'s first quarter 2010

forecast, with historical data through the 2009 fourth quarter, of the FY 2011 IPPS market basket

increase, we are estimating that the FY 2011 upda te to the standardized amount will be 2.4

percent (that is, the current estimate of the market basket rate-of-increase) for hospitals in all

areas, provided the hospital submits quality data in accordance with our rules. For hospitals that

do not submit quality data, we are estimating that the update to the standardized amount will be

0.4 percent (that is, the current estimate of the market bask et rate-of-increase minus

2.0 percentage points).

Section 1886(d)(9)(C)(1) of the Act is the ba sis for determining the percentage increase

to the Puerto Rico-specific standardized amount . For FY 2011, we are proposing to apply the

full rate-of-increase in the hospital market basket for IPPS hospitals to the Puerto Rico-specific

standardized amount. Therefore, the update to th e Puerto Rico-specific standardized amount is

estimated to be 2.4 percent.CMS-1498-P 1293

Section 1886(b)(3)(B)(iv) of the Act sets th e FY 2011 percentage increase in the hospitalspecific rates applicable to SCHs and MDHs equal to the rate set forth in section

1886(b)(3)(B)(i) of the Act (that is, the same update factor as for all other hospitals subject to the

IPPS, or the rate-of-increase in the market basket). Therefore, the update to the hospital-specific

rates applicable to SCHs and MDHs is es timated to be 2.4 or 0.4 percent, depending upon

whether the hospital submits quality data.

Section 1886(b)(3)(B)(ii) of the Act is used for purposes of determining the percentage

increase in the rate-of-increase limits for children’s and cancer hospitals. Section

1886(b)(3)(B)(ii) of the Act sets the percentage increase in the rate-of-increase limits equal to the

market basket percentage increase. In acco rdance with §403.752(a) of the regulations, RNHCIs

are paid under §413.40, which also uses section 1886(b)(3)(B)(ii) of the Act to update the

percentage increase in the rate -of-increase limits. Sec tion 1886(j)(3)(C) of the Act addresses the

increase factor for the Federal prospectiv e payment rate of IRFs. Section 123 of

Pub. L. 106-113, as amended by section 307(b) of Pub. L. 106-554, provides the statutory

authority for updating payment rates under the LTCH PPS. In addition, section 124 of Pub. L.

106-113 provides the statutory authority for updating all aspects of the payment rates for IPFs.

Currently, children's hospitals, cancer hospitals, and RNHCIs are the remaining three

types of hospitals still reimburse d under the reasonable cost met hodology. We are proposing to

provide our current estimate of the FY 2011 IPPS operating market basket percentage increase

(2.4 percent) to update the target limits for ch ildren’s hospitals, cancer hospitals, and RNHCIs.

For FY 2011, as discussed in section VII. of the preamble to this proposed rule, we are

proposing an update of -0.1 percent to the LTCH PPS standard Federal rate, which is based on a

proposed market basket increase of 2.4 percent (b ased on IHS Global Insight, Inc.'s first quarterCMS-1498-P 1294

2010 forecast of the FY 2002-based RPL market bask et increase for FY 2011) and an adjustment

of -2.5 percent to account for the increase in ca se-mix in a prior year that resulted from changes

in coding practices rather than an increase in patient severity.

Effective for cost reporting periods beginni ng on or after January 1, 2005, IPFs are paid

under the IPF PPS. IPF PPS payments are based on a Federal per diem rate that is derived from

the sum of the average routine operating, ancillary, and capital costs for each patient day of

psychiatric care in an IPF, adjusted for budget neutrality.

IRFs are paid under the IRF PPS for cost repor ting periods beginning on or after January

1, 2002. For cost reporting periods beginni ng on or after October 1, 2002 (FY 2003), and

thereafter, the Federal prospective payments to IRFs are based on 100 percent of the adjusted

Federal IRF prospective payment am ount, updated annually (69 FR 45721).

III. Secretary’s Recommendations

MedPAC is recommending an inpatient hospital update equal to the mark et basket rate of

increase for FY 2011. MedPAC’s rationale for th is update recommendation is described in more

detail below. As menti oned above, section 1886(e)(4 )(A) of the Act requires that the Secretary,

taking into consideration the recommendations of the MedPAC, recommend update factors for

inpatient hospital services for each fiscal year that take into account the amounts necessary for

the efficient and effective delivery of medically appropriate and necessary care of high quality.

Consistent with the update factor in the Pres ident’s budget, we are recommending an update to

the standardized amount of 2.9 percent. We ar e recommending that this same update factor

apply to SCHs and MDHs.

Section 1886(d)(9)(C)(i) of the Act is the basi s for determining the percentage increase to

the Puerto Rico-specific standa rdized amount. For FY 2011, we are proposing to apply the fullCMS-1498-P 1295

rate-of-increase in the hospital market basket for IPPS hospitals to the Puerto Rico-specific

standardized amount. Therefore, the update to th e Puerto Rico-specific standardized amount is

estimated to be 2.4 percent.

In addition to making a recommendation fo r IPPS hospitals, in accordance with section

1886(e)(4)(A) of the Act, we also are recomme nding update factors for all other types of

hospitals. Consistent with the update factor in the President’s budget, we are recommending an

update for children's hospitals, cancer hos pitals, and RNHCIs of 2.9 percent.

For FY 2011, consistent with the proposal set fo rth in section VII. of the preamble of this

proposed rule, we are recommending an update of -0.1 percent to the LTCH PPS standard

Federal rate. In addition, base d on IHS Global Insight, Inc.'s first quarter 2010 forecast of the

RPL market basket increase, we are recommending an update of 2.4 percent to the IRF PPS

Federal rate for FY 2011 and an update of 2.4 percent to the IPF PPS Federal rate for RY 2011

for the Federal per diem payment amount.

IV. MedPAC Recommendation for Assessing Payment Adequacy and Updating Payments

in Traditional Medicare

In its March 2010 Report to Congress, Me dPAC assessed the adequacy of current

payments and costs, and the relationship betwee n payments and an appropriate cost base.

MedPAC recommended an update to the hospital inpatient rates eq ual to the increase in the

hospital market basket in FY 2011, concurrent with implementation of a quality incentive

program. MedPAC’s reasoning is that under a qu ality program, an indi vidual hospital’s quality

performance should determine whether its net increas e in payments is above or below the market

basket increase. MedPAC noted the importance of hospitals to control their costs rather than

accommodate the current rate of cost growth.CMS-1498-P 1296

MedPAC also noted that indicators of paym ent adequacy are positive. MedPAC expects

Medicare margins to remain low in 2011. At th e same time though, MedPAC’s analysis finds

that high-performing hospitals have been able to maintain relatively low costs while maintaining

a relatively high quality of care. In addition, ro ughly half of these providers are generating a

profit on their Medicare business.

Response : Similar to our response last year, we agree with MedPAC that hospitals

should control costs rather than have Medicare accommodate the current rate of growth. As

MedPAC noted, the lack of financial pressure at certain hospitals can lead to higher costs and in

turn bring down the overall Medicare margin for the industry.

In addition to the quality data that hospitals are required to submit to CMS, as discussed

in section II. of the preamble of this propos ed rule, CMS implemented the MS-DRGs in FY 2008

to better account for severity of illness under the IPPS and is basing the DRG weights on costs

rather than charges. We continue to believe that these refinements will better match Medicare

payment of the cost of care and provide incen tives for hospitals to be more efficient in

controlling costs.

We note that, because the operating and capital prospective payment systems remain

separate, we are continuing to use separate updates for operating and capital payments. The

proposed update to the capital rate is discussed in section III. of the Addendum to this proposed

rule.

[FR Doc. 2010-9163 Filed 04/19/2010 at 4:15 pm; Publication Date: 05/04/2010]