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[Federal Register Volume 77, Number 77 (Friday, April 20, 2012)]
[Notices]
[Pages 23722-23729]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-9598]

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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

[CMS-1442-N]

Medicare Program; Extension of Certain Wage Index 
Reclassifications and Special Exceptions for the Hospital Inpatient 
Prospective Payment Systems (PPS) for Acute Care Hospitals and the 
Hospital Outpatient PPS

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

ACTION: Notice.

-----------------------------------------------------------------------

SUMMARY: This notice announces changes to wage indices and hospital 
reclassifications in accordance with section 302 of the Temporary 
Payroll Tax Cut Continuation Act of 2011 (TPTCCA) as amended by section 
3001 of the Middle Class Tax Relief and Job Creation Act of 2012 
(MCTRJCA). The TPTCCA and MCTRJCA extend the expiration date for 
certain geographic reclassifications and special exception wage indices 
through March 31, 2012 for the hospital inpatient prospective payment 
systems for acute care hospitals (IPPS). These geographic 
reclassifications and special exception wage indices are also extended 
under the hospital outpatient prospective payment system (OPPS).

DATES: Applicability Dates: For IPPS payments, the revised wage indices 
for section 508, certain nonsection 508, and special exception 
providers described in this notice are applicable for discharges on or 
after October 1, 2011 and on or before March 31, 2012. For OPPS 
payments, the revised wage indices for section 508 providers described 
in this notice are applicable for services furnished on or after 
October 1, 2011 and on or before March 31, 2012; and the revised wage 
indices for nonsection 508 and special exception providers described in 
this notice are applicable for services furnished on or after January 
1, 2012 and on or before June 30, 2012.

FOR FURTHER INFORMATION CONTACT:
Brian Slater, (410) 786-5229, for the IPPS.
Erick Chuang (410) 786-1816, for the OPPS.

SUPPLEMENTARY INFORMATION: 

I. Background

    On December 23, 2011, the Temporary Payroll Tax Cut Continuation 
Act (TPTCCA) of 2011 (Pub. L. 112-78) was enacted. Section 302 of the 
TPTCCA extends section 508 of the Medicare Prescription Drug, 
Improvement, and Modernization Act of 2003 (MMA) (Pub. L. 108-173) 
reclassifications and certain additional special exceptions for 2 
months, through November 30, 2011. On February 22, 2012, the Middle 
Class Tax Relief and Job Creation Act (MCTRJCA) of 2012 (Pub. L. 112-
96) was enacted. Section 3001 of the MCTRJCA amended section 302 of the 
TPTCCA by extending section 508 reclassifications and certain 
additional special exceptions for an additional 4 months, through March 
31, 2012. We apply such extensions to both the hospital inpatient 
prospective payment systems (IPPS) (for the relevant part of fiscal 
year (FY) 2012) and the hospital outpatient prospective payment system 
(OPPS) (for the relevant parts of calendar years (CYs) 2011 and 2012) 
final wage index data.

II. Provisions of This Notice

A. Overview of the Section 508 Extension

    Section 302 of the TPTCCA and section 3001 of the MCTRJCA, extend 
through March 31, 2012 wage index reclassifications under section 508 
of the MMA and certain special exceptions, for example, those special 
exceptions contained in the final rule that appeared in the August 11, 
2004 Federal Register (69 FR 49105 and 49107) extended under section 
117 of the Medicare, Medicaid, and SCHIP Extension Act (MMSEA) of 2007 
(Pub. L. 110-173) and further extended under section 124 of the 
Medicare Improvements for Patients and Providers Act of 2008 (MIPPA) 
(Pub. L. 110-275), section 3137(a) of the Patient Protection and 
Affordable Care Act (also known as the Affordable Care Act) (Pub. L. 
111-148) as amended by section 10317 of Affordable Care Act, and 
section 102 of the Medicare and Medicaid Extenders Act of 2010, Public 
Law 111-309.
    Under section 508 of the MMA, a qualifying hospital could appeal 
the

[[Page 23723]]

wage index classification otherwise applicable to the hospital and 
apply for reclassification to another area of the State in which the 
hospital is located or, at the discretion of the Secretary, to an area 
within a contiguous State. We implemented this process through notices 
published in the Federal Register on January 6, 2004 (69 FR 661) and 
February 13, 2004 (69 FR 7340). Such reclassifications were applicable 
to discharges occurring during the 3-year period beginning April 1, 
2004, and ending March 31, 2007. Section 106(a) of the Medicare 
Improvements and Extension Act, Division B of the Tax Relief and Health 
Care Act of 2006 (MIEA-TRHCA) extended the geographic reclassifications 
of hospitals that were made under section 508 of the MMA. In the March 
23, 2007 Federal Register (72 FR 3799), we published a notice that 
indicated how we were implementing section 106(a) of the MIEA-TRHCA 
through September 30, 2007. Section 117 of the MMSEA further extended 
section 508 reclassifications and certain special exceptions through 
September 30, 2008. On February 22, 2008 in the Federal Register (73 FR 
9807), we published a notice regarding our implementation of section 
117 of the MMSEA. In the October 3, 2008 Federal Register (73 FR 
57888), we published a notice regarding our implementation of section 
124 of MIPPA, which extended section 508 reclassifications and certain 
special exceptions through September 30, 2009. In the June 2, 2010 
Federal Register (75 FR 31118), we described our implementation of 
section 3137(a) of the Affordable Care Act, as amended by section 10317 
of Affordable Care Act, which further extended section 508 
reclassifications and certain special exceptions through the end of FY 
2010. Section 102 of the Medicare and Medicaid Extenders Act of 2010 
(MMEA) (Pub. L. 111-309) further extended section 508 reclassifications 
and certain special exceptions through September 30, 2011. In the April 
7, 2011 Federal Register (76 FR 19365), we published a notice regarding 
our implementation of section 102 of the MMEA.
    Section 302 of the TPTCCA and section 3001 of the MCTRJCA have 
extended the hospital reclassifications originally received under 
section 508 and certain special exceptions for 6 months, through March 
31, 2012. Furthermore, for the 6-month period, section 302 of the 
TPTCCA and section 3001 of the MCTRJCA also require that in determining 
the wage index applicable to hospitals that qualify for 
reclassification, the Secretary shall remove the section 508 and 
special exception hospital's wage data from the calculation of the 
reclassified wage index if doing so raises the reclassified wage index. 
As a result of these changes, we have recalculated certain wage index 
values to account for the new legislation.
    When originally implementing section 508 of the MMA, we required 
each hospital to submit a request in writing by February 15, 2004, to 
the Medicare Geographic Classification Review Board (MGCRB), with a 
copy to CMS. We will neither require nor accept written requests for 
the extension required by the TPTCCA and the MCTRJCA, since these laws 
simply provide a 6-month continuation from October 1, 2011 through 
March 31, 2012 for any section 508 reclassifications and special 
exceptions wage indices that expired September 30, 2011.

B. Implementation of Section 508 Extension

1. Under the IPPS
    The final rule setting forth the Medicare fiscal year (FY) 2012 
IPPS and the long-term care hospital prospective payment system (LTCH 
PPS) (hereinafter referred to as the FY 2012 IPPS/LTCH PPS final rule) 
appeared in the August 18, 2011 Federal Register (76 FR 51476) and we 
subsequently corrected this final rule via the September 26, 2011 (76 
FR 59263) and February 1, 2012 (77 FR 4908) Federal Register.
    The FY 2012 final wage index values and geographic adjustment 
factors (GAF) for IPPS hospitals affected by section 302 of the TPTCCA 
and section 3001 of the MCTRJCA for the 6-month period beginning on 
October 1, 2011 and ending on March 31, 2012 are included in Tables 2, 
4C, and 9B which are posted on our Web site at http://www.cms.hhs.gov/AcuteInpatientPPS/. Also posted, is a Table showing the hospitals that 
have been removed from Table 9A for the 6-month period due to the 
enactment of section 302 of TPTCCA and section 3001 of the MCTRJCA, 
Table 2 includes the final wage index values for the 6-month period for 
section 508, nonsection 508 and special exception hospitals affected by 
the extension. Table 4C lists the revised final wage index and GAF 
values for the 6-month period for hospitals that are reclassified. In 
addition, Table 9B lists hospitals that have section 508 and special 
exception reclassifications that have been extended until March 31, 
2012. Please note that some hospitals that might otherwise qualify for 
an extension of their section 508 reclassification or special exception 
have not been so extended for FY 2012, because they are receiving a 
higher wage index as a result of maintaining their MGCRB 
reclassification or due to section 10324 of the Affordable Care Act 
which provides for a floor (of 1.0) on the area wage index for 
hospitals in Frontier States. Therefore, in keeping with our historical 
practice, these providers continue to receive the wage index published 
in the FY 2012 IPPS/LTCH PPS final rule, or subsequent correction 
notices (published September 26, 2011 (76 FR 59263), February 1, 2012 
(77 FR 4908), respectively), and are neither removed from Table 9A nor 
listed in Table 9B.
2. Under the OPPS
    Under the OPPS, wage indices applicable to providers reclassified 
under section 508 are adopted on a federal fiscal year timeframe. Table 
2A at http://www.cms.gov/HospitalOutpatientPPS/lists section 508 
providers and their applicable wage indices from October 1, 2011 
through March 31, 2012. Please note these section 508 providers will 
revert to the previously scheduled January 1, 2012 reclassification or 
home area wage index from April 1, 2012 through December 31, 2012 as 
published in the FY 2012 IPPS/LTCH PPS final rule, or subsequent 
correction notices (published September 26, 2011 (76 FR 59263), 
February 1, 2012 (77 FR 4908), respectively) and adopted under the 
OPPS. The wage indices applicable to certain nonsection 508 OPPS 
providers and to providers that receive special exception wage indexes 
are adopted on a calendar year timeframe. Because the OPPS payments are 
based on the calendar year, the wage indices for these nonsection 508 
providers and special exception providers are applied from January 1, 
2012 through June 30, 2012 in order for these providers to receive the 
revised wage index for 6 months, the same period that applies in the 
IPPS. Table 2B at http://www.cms.gov/HospitalOutpatientPPS/lists these 
nonsection 508 and special exceptions providers and their wage indices 
that are applicable from January 1, 2012 through June 30, 2012.

III. Collection of Information Requirements

    This document does not impose information collection and 
recordkeeping requirements. Consequently, it need not be reviewed by 
the Office of Management and Budget under the authority of the

[[Page 23724]]

Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35).

IV. Waiver of Proposed Rulemaking and Delay of Effective Date

    We ordinarily publish a notice of proposed rulemaking in the 
Federal Register and invite public comment prior to a rule taking 
effect in accordance with section 553(b) of the Administrative 
Procedure Act (APA) and section 1871 of the Act. In addition, in 
accordance with section 553(d) of the APA and section 1871(e)(1)(B)(i) 
of the Act, we ordinarily provide a 30 day delay to a substantive 
rule's effective date. For substantive rules that constitute major 
rules, in accordance with 5 U.S.C. 801, we ordinarily provide a 60-day 
delay in the effective date.
    None of the processes or effective date requirements apply, 
however, when the rule in question is interpretive, a general statement 
of policy, or a rule of agency organization, procedure or practice. 
They also do not apply when the Congress itself has created the rules 
that are to be applied, leaving no discretion or gaps for an agency to 
fill in through rulemaking.
    In addition, an agency may waive notice and comment rulemaking, as 
well as any delay in effective date, when the agency for good cause 
finds that notice and public comment on the rule as well the effective 
date delay are impracticable, unnecessary, or contrary to the public 
interest. In cases where an agency finds good cause, the agency must 
incorporate a statement of this finding and its reasons in the rule 
issued.
    The policies being publicized in this notice do not constitute 
agency rulemaking. Rather, the Congress, in the TPTCCA and MCTRJCA, has 
already required that the agency make these changes, and we are simply 
notifying the public of certain required revisions to wage index values 
that are effective October 1, 2011 through March 31, 2012 for the IPPS 
and OPPS, and effective January 1, 2012 through June 30, 2012 for OPPS 
for certain nonsection 508 and special exception providers. As this 
notice merely informs the public of these modifications to the wage 
index values under the IPPS and OPPS, it is not a rule and does not 
require any notice and comment rulemaking. To the extent any of the 
policies articulated in this notice constitute interpretations of the 
Congress's requirements or procedures that will be used to implement 
the Congress's directive; they are interpretive rules, general 
statements of policy, and/or rules of agency procedure or practice, 
which are not subject to notice and comment rulemaking or a delayed 
effective date.
    However, to the extent that notice and comment rulemaking or a 
delay in effective date or both would otherwise apply, we find good 
cause to waive such requirements. Specifically, we find it unnecessary 
to undertake notice and comment rulemaking in this instance as this 
notice does not propose to make any substantive changes to IPPS and 
OPPS policies or methodologies already in effect as a matter of law, 
but simply applies rate adjustments under the TPTCCA and MCTRJCA to 
these existing policies and methodologies. Therefore, we would be 
unable to change any of the policies governing the IPPS for FY 2012 and 
the OPPS for CY 2011 or 2012 in response to public comment on this 
notice. As the changes outlined in this notice have already taken 
effect, it would also be impracticable to undertake notice and comment 
rulemaking. For these reasons, we also find that a waiver of any delay 
in effective date, if it were otherwise applicable, is necessary to 
comply with the requirements of the TPTCCA and MCTRJCA. Therefore, we 
find good cause to waive notice and comment procedures as well as any 
delay in effective date, if such procedures or delays are required at 
all.

V. Regulatory Impact Analysis

A. Introduction

    We have examined the impacts of this notice as required by 
Executive Order 12866 on Regulatory Planning and Review (September 30, 
1993), Executive Order 13563 on Improving Regulation and Regulatory 
Review (January 18, 2011), the Regulatory Flexibility Act (RFA) 
(September 19, 1980, Pub. L. 96-354), section 1102(b) of the Social 
Security Act, section 202 of the Unfunded Mandates Reform Act of 1995 
(Pub. L. 104-4), Executive Order 13132 on Federalism (August 4, 1999), 
and the Congressional Review Act (5 U.S.C. 804(2)).
    Executive Orders 12866 and 13563 direct agencies to assess all 
costs and benefits of available regulatory alternatives and, if 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety effects, distributive impacts, and equity). Executive 
Order 13563 emphasizes the importance of quantifying both costs and 
benefits, of reducing costs, of harmonizing rules, and of promoting 
flexibility. A regulatory impact analysis (RIA) must be prepared for 
regulatory actions with economically significant effects ($100 million 
or more in any 1 year). Although we do not consider this notice to 
constitute a substantive rule or regulatory action, the changes 
announced in this notice are ``economically'' significant, under 
section 3(f)(1) of Executive Order 12866, and therefore we have 
prepared a RIA, that to the best of our ability, presents the costs and 
benefits of this notice. In accordance with Executive Order 12866, the 
notice has been reviewed by the Office of Management and Budget.
    The RFA requires agencies to analyze options for regulatory relief 
of small businesses, if a rule has a significant impact on a 
substantial number of small entities. For purposes of the RFA, small 
entities include small businesses, nonprofit organizations, and small 
government jurisdictions. We estimate that most hospitals and most 
other providers and suppliers are small entities as that term is used 
in the RFA. The great majority of hospitals and most other health care 
providers and suppliers are small entities, either by being nonprofit 
organizations or by meeting the SBA definition of a small business 
(having revenues of less than $7.5 to $34.5 million in any 1 year). 
(For details on the latest standard for health care providers, we refer 
readers to page 33 of the Table of Small Business Size Standards at the 
Small Business Administration's Web site at http://www.sba.gov/services/contractingopportunities/sizestandardstopics/tableofsize/index.html.) For purposes of the RFA, all hospitals and other providers 
and suppliers are considered to be small entities. Individuals and 
States are not included in the definition of a small entity. We believe 
that this notice will have a significant impact on small entities. 
Because we acknowledge that many of the affected entities are small 
entities, the analysis discussed in this section would fulfill any 
requirement for a final regulatory flexibility analysis.
    In addition, section 1102(b) of the Act requires us to prepare a 
regulatory impact analysis if a rule may have a significant impact on 
the operations of a substantial number of small rural hospitals. This 
analysis must conform to the provisions of section 604 of the RFA. With 
the exception of hospitals located in certain New England counties, for 
purposes of section 1102(b) of the Act, we now define a small rural 
hospital as a hospital that is located outside of an urban area and has 
fewer than 100 beds.
    Section 202 of the Unfunded Mandates Reform Act of 1995 (UMRA) 
(Pub. L. 104-4) also requires that

[[Page 23725]]

agencies assess anticipated costs and benefits before issuing any rule 
whose mandates require spending in any 1 year of $100 million in 1995 
dollars, updated annually for inflation. In 2011, that threshold is 
approximately $136 million. This notice will not mandate any 
requirements for State, local, or tribal governments, nor will it 
affect private sector costs.
    Executive Order 13132 establishes certain requirements that an 
agency must meet when it promulgates a proposed rule (and subsequent 
final rule) that imposes substantial direct requirement costs on State 
and local governments, preempts State law, or otherwise has Federalism 
implications. This notice will not have a substantial effect on State 
and local governments.
    Although this notice merely reflects the implementation of 
provisions of the TPTCCA and MCTRJCA and does not constitute a 
substantive rule, we are nevertheless preparing this impact analysis in 
the interest of ensuring that the impacts of these changes are fully 
understood. The following analysis, in conjunction with the remainder 
of this document, demonstrates that this notice is consistent with the 
regulatory philosophy and principles identified in Executive Order 
12866 and 13563, the RFA, and section 1102(b) of the Act. The notice 
will positively affect payments to a substantial number of small rural 
hospitals and providers, as well as other classes of hospitals and 
providers, and the effects on some hospitals and providers may be 
significant. The impact analysis, which shows the affect on all 
payments to IPPS and OPPS hospitals and providers, is shown in Table I 
of this notice.

B. Statement of Need

    This notice is necessary to update the IPPS final fiscal year (FY) 
2012 and OPPS final calendar years (CYs) 2011 and 2012 wage indices and 
hospital reclassifications and other related tables to reflect changes 
required by or resulting from the implementation of section 302 of the 
TPTCCA and section 3001 of the MCTRJCA. The TPTCCA and MCTRJCA require 
the extension of the expiration date for certain geographic 
reclassifications and special exception wage indices through March 31, 
2012 We note that the changes in this notice are already in effect with 
changes made to PRICER in February 2012. Thus, the issuance of this 
notice does not result in additional changes in payments.

C. Overall Impact

1. Under the IPPS
    The FY 2012 IPPS final rule included an impact analysis for the 
changes to the IPPS included in that rule. This notice updates those 
impacts to the IPPS operating payment system as to reflect certain 
changes required by section 302 of the TPTCCA and section 3001 of the 
MCTRJCA. Because these provisions in the TPTCCA and the MCTRJCA were 
not budget neutral, the overall estimates for hospitals have changed 
from our estimate that was published in the FY 2012 IPPS final rule (76 
FR 51814). We estimate that the changes in the FY 2012 IPPS final rule, 
in conjunction with the final IPPS rates and wage index included in 
this notice, will result in an approximate $1.22 billion increase in 
total operating payments relative to FY 2011. In the FY 2012 IPPS final 
rule (76 FR 51814), we had projected that total operating payments 
would increase by $1.13 billion relative to FY 2011. However, since the 
changes in this notice will increase operating payments by $90 million 
relative to what was projected in the FY 2012 IPPS final rule, these 
changes will result in a net increase of $1.22 billion in total 
operating payments, as mentioned previously. Capital payments are 
estimated to increase by an additional $7.6 million in FY 2012 relative 
to FY 2011 as a result of the changes in this notice.
2. Under the OPPS
    The CY 2012 OPPS final rule included an impact analysis for the 
changes to the OPPS included in that rule. This notice updates those 
impacts to the OPPS to reflect certain changes we are announcing as a 
result of section 302 of the TPTCCA and section 3001 of the MCTRJCA. 
The overall estimates for hospitals have changed from our estimate that 
was published in the CY 2012 OPPS final rule (76 FR 74562). We estimate 
that the changes to the CY 2011 wage indexes included in this notice 
will increase the OPPS payments in CY 2011 by $11 million, relative to 
what was estimated in the CY 2012 OPPS final rule. We estimate that the 
changes to the CY 2012 OPPS wage indexes will increase OPPS payments by 
$15 million relative to what was projected in the CY 2012 OPPS final 
rule, resulting in a net increase of $650 million in OPPS operating 
payments in CY 2012 relative to CY 2011.

D. Anticipated Effects

1. Under the IPPS
    In the Table I, we provide an impact analysis for changes to the 
IPPS operating payments in FY 2012 as a result of the changes required 
by section 302 of the TPTCCA and section 3001 of the MCTRJCA. The table 
categorizes hospitals by various geographic and special payment 
consideration groups to illustrate the varying impacts on different 
types of hospitals. The first row of the Table I shows the overall 
impact on the 3,423 acute care hospitals included in the analysis. The 
impact analysis reflects the change in estimated operating payments in 
FY 2012 due to section 302 of the TPTCCA and section 3001 of the 
MCTRJCA relative to estimated FY 2012 operating payments published in 
the FY 2012 IPPS final rule (76 FR 51817). Overall, all hospitals paid 
under the IPPS will experience an estimated 0.1 percent increase in 
operating payments in FY 2012 due to these provisions in the TPTCCA and 
MCTRJCA compared to the previous estimates of operating payments in FY 
2012 published in the FY 2012 IPPS final rule. Because section 302 of 
the TPTCCA and section 3001 of the MCTRJCA were not budget neutral, all 
hospitals, depending on whether they were affected by these provisions, 
will either experience no change or an increase in IPPS operating 
payments in FY 2012 in this notice relative to the previously published 
estimates. As such, hospitals located in urban areas will experience a 
0.1 percent increase in payments while hospitals located in rural areas 
will not experience any change in payments in FY 2012 due to the 
provisions in this notice as compared to the estimated payments 
provided in the FY 2012 IPPS final rule. Among the hospitals that are 
subject to the changes in this notice, hospitals will experience a net 
effect increase in payments ranging from 0.1 percent to 0.3 percent 
where urban New England hospitals and urban reclassified hospitals are 
expected to experience the largest net increase in operating payments 
of 0.3 percent in FY 2012.

[[Page 23726]]

   Table I--Impact Analysis of Changes for FY 2012 Acute Care Hospital
                  Operating Prospective Payment System
------------------------------------------------------------------------
                                                           Percent net
                                            Number of     effect of all
                                            hospitals     changes for FY
                                                               2012
------------------------------------------------------------------------
All Hospitals..........................            3423              0.1
By Geographic Location:
        Urban hospitals................            2499              0.1
        Large urban areas..............            1371              0.1
        Other urban areas..............            1128              0.1
    Rural hospitals....................             924              0
Bed Size (Urban):
    0-99 beds..........................             633              0
    100-199 beds.......................             782              0.1
    200-299 beds.......................             449              0.1
    300-499 beds.......................             430              0.1
    500 or more beds...................             205              0.1
Bed Size (Rural):
    0-49 beds..........................             319              0
    50-99 beds.........................             348              0
    100-149 beds.......................             152              0
    150-199 beds.......................              58              0
    200 or more beds...................              47              0
Urban by Region:
    New England........................             120              0.3
    Middle Atlantic....................             320              0.2
    South Atlantic.....................             380              0
    East North Central.................             401              0.2
    East South Central.................             153              0
    West North Central.................             169              0
    West South Central.................             367              0
    Mountain...........................             159              0
    Pacific............................             380              0
    Puerto Rico........................              50              0
Rural by Region:
    New England........................              23              0
    Middle Atlantic....................              69              0
    South Atlantic.....................             165              0
    East North Central.................             120              0
    East South Central.................             170              0
    West North Central.................              99              0.1
    West South Central.................             182              0
    Mountain...........................              66              0
    Pacific............................              29              0
    Puerto Rico........................               1              0
By Payment Classification:
    Urban hospitals....................            2520              0.1
    Large urban areas..................            1384              0.1
    Other urban areas..................            1136              0.1
    Rural areas........................             903              0
Teaching Status:
    Nonteaching........................            2391              0
    Fewer than 100 residents...........             792              0.1
    100 or more residents..............             240              0.2
Urban DSH:
    Non-DSH............................             739              0.1
    100 or more beds...................            1547              0.1
    Less than 100 beds.................             337              0
Rural DSH:
    SCH................................             417              0
    RRC................................             222              0
    100 or more beds...................              27              0.1
    Less than 100 beds.................             134              0.1
Urban teaching and DSH:
    Both teaching and DSH..............             827              0.1
    Teaching and no DSH................             144              0.2
    No teaching and DSH................            1057              0
    No teaching and no DSH.............             492              0.1
Special Hospital Types:
    RRC................................             175              0
    SCH................................             320              0
    MDH................................             193              0
        SCH and RRC....................             120              0

[[Page 23727]]

 
        MDH and RRC....................              18              0
Type of Ownership:
    Voluntary..........................            1985              0.1
    Proprietary........................             870              0.1
    Government.........................             566              0
Medicare Utilization as a Percent of
 Inpatient Days:
    0-25...............................             358              0
    25-50..............................            1695              0.1
    50-65..............................            1081              0.1
    Over 65............................             198              0.1
FY 2012 Reclassifications by the
 Medicare Geographic Classification
 Review Board:
    All Reclassified Hospitals.........             655              0.2
    Non-Reclassified Hospitals.........            2768              0
    Urban Hospitals Reclassified.......             323              0.3
    Urban Nonreclassified Hospitals, FY            2142              0
     2012..............................
    All Rural Hospitals Reclassified FY             332              0
     2012..............................
    Rural Nonreclassified Hospitals FY              532              0
     2012..............................
    All Section 401 Reclassified                     40              0
     Hospitals.........................
    Other Reclassified Hospitals                     62              0
     (Section 1886(d)(8)(B))...........
Specialty Hospitals:
    Cardiac specialty Hospitals........              19              0
------------------------------------------------------------------------

2. Under the OPPS
    In the Table II, we provide an impact analysis for changes to the 
OPPS payments in CYs 2011 and 2012 as a result of the changes under 
section 302 of the TPTCCA and section 3001 of the MCTRJCA. The table 
categorizes hospitals by various geographic and special payment 
consideration groups to illustrate the varying impacts on different 
types of hospitals. The first row of Table II shows the overall impact 
on the 3,894 hospitals included in the analysis. The impact analysis 
reflects the change in estimated OPPS payments in CYs 2011 and 2012 due 
to section 302 of the TPTCCA and section 3001 of the MCTRJCA relative 
to estimated OPPS payments published in the CY 2011 OPPS final rule (75 
FR 72268) and promulgated in the CY 2012 OPPS final rule. Overall, all 
hospitals will experience an estimated 0.0 percent increase in OPPS 
payments in CYs 2011 and 2012 due to these provisions compared to the 
previous estimates of OPPS payments published in the CY 2012 OPPS final 
rule. Because the changes are not budget neutral, all hospitals, 
depending on whether they were affected by these provisions, will 
either experience no change or an increase in OPPS payments in CYs 2011 
and 2012 in this notice relative to the previously published estimates. 
As such, hospitals located in urban areas will generally not experience 
any change in payments while hospitals located in rural areas will 
generally not experience any change in payments in CY 2012 due to the 
provisions in this notice as compared to the estimated payments 
provided in the CY 2012 OPPS final rule. Among the hospitals that are 
subject to the changes in this notice, hospitals will experience a net 
effect increase in payments ranging from 0.0 percent to 0.1 percent.

    Table II--Impact Analysis of Changes for CYs 2011 and 2012 Hospital Outpatient Prospective Payment System
----------------------------------------------------------------------------------------------------------------
                                                                                    Percent net     Percent net
                                                                     Number of     effect of all   effect of all
                                                                     hospitals    changes for CY  changes for CY
                                                                                       2011            2012
----------------------------------------------------------------------------------------------------------------
All Hospitals (excludes hospitals held harmless and CMHCs)......           3,894             0.0             0.0
Urban Hospitals.................................................           2,945             0.0             0.0
    Large urban (>1 Million)....................................           1,607             0.0             0.0
    Other urban (89,999 lines...............................................             777             0.0             0.0
Volume (Rural)
    42,999 lines...............................................             355             0.0             0.0
Region (Urban)
    New England.................................................             150             0.1             0.1
    Middle Atlantic.............................................             355             0.1             0.1
    South Atlantic..............................................             449             0.0             0.0
    East North Cent.............................................             472             0.1             0.1
    East South Cent.............................................             183             0.0             0.0
    West North Cent.............................................             190             0.0             0.0
    West South Cent.............................................             498             0.0             0.0
    Mountain....................................................             208             0.0             0.0
    Pacific.....................................................             394             0.0             0.0
    Puerto Rico.................................................              46             0.0             0.0
Region (Rural)
    New England.................................................              25             0.0             0.0
    Middle Atlantic.............................................              67             0.0             0.0
    South Atlantic..............................................             162             0.0             0.0
    East North Cent.............................................             128             0.1             0.1
    East South Cent.............................................             170             0.0             0.0
    West North Cent.............................................             101             0.1             0.1
    West South Cent.............................................             200             0.0             0.0
    Mountain....................................................              67             0.0             0.1
    Pacific.....................................................              29             0.1             0.1
Teaching Status
    Non-Teaching................................................           2,895             0.0             0.0
    Minor.......................................................             708             0.0             0.0
    Major.......................................................             291             0.1             0.1
DSH Patient Percent
    0...........................................................              11             0.0             0.0
    >0-0.10.....................................................             353             0.0             0.0
    0.10-0.16...................................................             357             0.1             0.1
    0.16-0.23...................................................             734             0.0             0.1
    0.23-0.35...................................................           1,040             0.0             0.0
    >=0.35......................................................             785             0.0             0.0
    DSH Not Available *.........................................             614             0.0             0.0
Urban Teaching/DSH
    Teaching & DSH..............................................             903             0.0             0.1
    No Teaching/DSH.............................................           1,456             0.0             0.0
    No teaching/No DSH..........................................              10             0.0             0.0
    DSH not Available...........................................             576             0.0             0.0
Type Of Ownership
    Voluntary...................................................           2,061             0.0             0.0
    Proprietary.................................................           1,272             0.0             0.0
    Government..................................................             561             0.0             0.0
----------------------------------------------------------------------------------------------------------------
** Complete DSH numbers are not available for providers that are not paid under IPPS, including rehabilitation,
  psychiatric, and long-term care hospitals.

E. Alternatives Considered

    This notice provides descriptions of the statutory provisions that 
are addressed and identifies policies for implementing these 
provisions. Due to the prescriptive nature of the statutory provisions, 
no alternatives were considered.

F. Accounting Statement and Table

    As required by OMB Circular A-4 (available at http://www.whitehousegov/omb/circulars/a004/a-4.pdf), in Table III, we have 
prepared an accounting

[[Page 23729]]

statement showing the classification of expenditures associated with 
the provisions of this notice as they relate to acute care hospitals. 
This table provides our best estimate of the change in Medicare 
payments to providers as a result of the changes to the IPPS presented 
in this notice. All expenditures are classified as transfers from the 
Federal government to Medicare providers. As previously discussed, 
relative to what was projected in the FY 2012 IPPS final rule, the 
changes in this notice are projected to increase FY 2012 IPPS operating 
payments by $90 million and IPPS capital payments by $ 8 million. As 
previously discussed, relative to what was projected in the CY 2012 
OPPS final rule, the changes in this notice will increase CY 2011 OPPS 
payments by $11 million, and will increase CY 2012 OPPS payments by $15 
million. Thus, the total increase in Federal expenditures for 
implementing section 302 of the TPTCCA and section 3001 of the MCTRJCA 
under the IPPS and the OPPS is approximately $124 million.

      Table III--Accounting Statement: Classification of Estimated
  Expenditures Under the IPPS From Published FY 2012 to Revised FY 2012
 and Under the OPPS From Published CYs 2011 and 2012 to Revised CYs 2011
                                and 2012
------------------------------------------------------------------------
                Category                            Transfers
------------------------------------------------------------------------
Annualized Monetized Transfers.........  $124 million.
From Whom to Whom......................  Federal Government to IPPS and
                                          OPPS Medicare Providers.
                                        --------------------------------
    Total..............................  $124 million.
------------------------------------------------------------------------

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

    Dated: March 1, 2012.
Marilyn Tavenner,
Acting Administrator, Centers for Medicare & Medicaid Services.
    Approved: March 23, 2012.
Kathleen Sebelius,
Secretary, Department of Health and Human Services.
[FR Doc. 2012-9598 Filed 4-19-12; 8:45 am]
BILLING CODE 4120-01-P
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