[Federal Register Volume 66, Number 10 (Tuesday, January 16, 2001)]
[Rules and Regulations]
[Pages 3497-3499]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-1187]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Health Care Financing Administration

42 CFR Parts 411, 413, and 489

[HCFA-1112-CN]
RIN 0938-AJ93


Medicare Program; Prospective Payment System and Consolidated 
Billing for Skilled Nursing Facilities--Update; Correction

AGENCY: Health Care Financing Administration (HCFA), HHS.

ACTION: Correction notice.

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SUMMARY: This document corrects technical errors that appeared in the 
final rule published in the Federal Register on July 31, 2000 entitled, 
``Medicare Program; Prospective Payment System and Consolidated Billing 
for Skilled Nursing Facilities--Update.''

EFFECTIVE DATE: This correction is effective October 1, 2000, except 
for certain wage index corrections that are effective December 1, 2000.

FOR FURTHER INFORMATION CONTACT: Bill Ullman (410) 786-5667 or Susan 
Burris (410) 786-6655.

SUPPLEMENTARY INFORMATION:

Background

    In the July 31, 2000 final rule entitled, ``Prospective Payment 
System and Consolidated Billing for Skilled Nursing Facilities'' (FR 
Doc. 00-19004, July 31, 2000), there were several technical errors in 
the preamble.
    In the first column of Tables 3 through 6 of the preamble there was 
a typographical error. We are correcting the heading of the column from 
``RUG IV category'' to ``RUG III category.''
    We are also correcting several SNF PPS wage index values as 
published in Tables 7 and 8. Specifically, effective October 1, 2000, 
in Table 7, the wage index value for the Allentown-Bethlehem-Easton, PA 
MSA (area 0240) is corrected from 1.0040 to 0.9925 and the wage index 
value for the Kansas City, KS-MO MSA (area 3760) is corrected from 
0.9498 to 0.9509.
    Effective December 1, 2000, in Table 7, the wage index value for 
the Alexandria, LA MSA (area 0220) is corrected from 0.8151 to 0.8123, 
the wage index value for the Kansas City, KS-MO MSA (area 3760) is 
corrected again from 0.9509 (as corrected in the previous paragraph) to 
0.9527, and, in Table 8, the wage index value for rural LA (area 19) is 
corrected from 0.7668 to 0.7681.
    In accordance with our longstanding policies, these technical and 
tabulation errors are being corrected prospectively, effective on the 
dates noted above. This correction notice conforms the published SNF 
PPS wage index values to the prospectively revised values.
    We are also taking this opportunity to provide a correction 
regarding the applicable time period to which a special market basket 
inflation factor is to be applied for certain providers that 
participated in the Multistate Nursing Home Case-Mix and Quality 
Demonstration (NHCMQD), the demonstration project that served as the 
forerunner to the national skilled nursing facility (SNF) prospective 
payment system (PPS). In the May 12, 1998 SNF PPS interim final rule 
(63 FR 26288), we explained that for those providers that received 
payment under the NHCMQD during a cost reporting period that began in 
calendar year 1997, we derived a special market basket index inflation 
factor of 1.031532. We used this factor to adjust the 1997 costs to the 
midpoint of the rate setting period in calculating their facility-
specific rate. The May 1998 interim final rule indicated that the 
initial rate setting period (which applied to those providers beginning 
their first cost reporting period under the SNF PPS) encompassed the 
15-month period from July 1, 1998, to September 30, 1999.
    Under the statute's phased transition from facility-specific to 
full Federal rates, this inflation factor was to be successively 
updated for the second and third cost reporting periods under the SNF 
PPS. However, for demonstration providers beginning their second cost 
reporting period under the SNF PPS, the

[[Page 3498]]

July 30, 1999 SNF PPS update notice (64 FR 41697) inadvertently 
included the same inflation factor of 1.031532 that had been displayed 
for the first cost reporting period in the May 1998 interim final rule, 
along with the same time period of July 1, 1998, to September 30, 1999. 
Although a subsequent correction notice published in the Federal 
Register on October 5, 1999 (64 FR 54030) provided the correct 
inflation factor of 1.062244 for the second cost reporting period, it 
did not make a similar correction to the applicable time period.
    Further, while the July 2000 final rule (65 FR 46787) did update 
both the inflation factor (1.105788) and the applicable time period 
(October 1, 2000, to September 30, 2001) for these demonstration 
providers, the latter change failed to reflect that it is possible for 
such a provider to begin its third cost reporting period under the SNF 
PPS as early as July 1, 2000. Accordingly, we are hereby correcting the 
start date for the demonstration providers for the applicable time 
period that was displayed in the 2000 final rule, from October 1, 2000, 
to July 1, 2000.
    In addition, there was an error in the Regulatory Impact Analysis, 
section VI of the preamble, that resulted in two columns of incorrect 
figures displayed in the impact analysis table. Based on the correct 
percent changes in the two columns, some dollar figures and percentages 
mentioned throughout the preamble are also in error.
    Specifically, on pages 46793 and 46794, column 3, we referenced 
$3.1 billion as the aggregate increase in payments associated with this 
final rule; however, we made a technical error in our calculation and 
the correct number is $2.6 billion. Additionally, in this section (page 
46795, column 3), we made another technical error in our calculation 
that the payments will increase by 21.8 percent. The correct figure is 
18.3 percent.
    Accordingly, we are reprinting Table 11 of the preamble (64 FR 
46795), entitled ``Projected Impact of FY 2001 Update to the SNF PPS,'' 
with the corrected figures displayed in the last two columns of the 
table and a corrected figure for the total number of facilities. 
Further, we note that Table 11 presents the projected effects of the 
policy changes in the SNF PPS from FY 2000 to FY 2001, as well as 
statutory changes effective for FY 2001 for SNFs. As such, these 
corrections do not represent any changes to the policies set forth in 
the final rule.
    The corrections appear in this document under the heading 
``Correction of Errors.'' The provisions in this correction notice are 
effective as if they had been included in the document published in the 
Federal Register on July 31, 2000, that is, as of October 1, 2000, 
except for those wage index value corrections that we specifically 
noted to be effective as of December 1, 2000.

Correction of Errors

    In FR Doc. 00-19004 of July 31, 2000 (64 FR 46770), we are making 
the following corrections:

Corrections to Preamble

    1. In the first column of Table 3 (on pages 46775-76), Table 4 (on 
pages 46776-77), Table 5 (on pages 46777-78), and Table 6 (on page 
46778), the column heading is revised to read ``RUG III category''.
    2. On page 46779, in column 2, the entry of ``0.8151'' for 
Alexandria, LA, under ``Wage Index for Urban Areas'' is revised by 
adding ``0.8123 (effective December 1, 2000)''.
    3. On page 46779, in column 3, the entry of ``1.0040'' for 
Allentown-Bethlehem-Easton, PA, under ``Wage Index for Urban Areas'' is 
revised to read ``0.9925''.
    4. On page 46782, in column 2, the entry of ``0.9498'' for Kansas 
City, KS-MO, under ``Wage Index for Urban Areas'' is revised to read 
``0.9509''.
    5. On page 46782, in column 2, the revised entry of ``0.9509'' for 
Kansas City KS-MO, under ``Wage Index for Urban Areas'' is further 
revised by adding ``0.9527 (effective December 1, 2000)''.
    6. On page 46785, in column 3, the entry of ``0.7668'' for 
Louisiana, under ``Wage Index for Rural Areas'' is revised by adding 
``0.7681 (effective December 1, 2000)''.
    7. On page 46787, in column 2, first full paragraph, the last 
sentence is revised to read: ``In addition, we derive a special market 
basket inflation factor, which is 1.105788, to adjust the 1997 costs to 
the midpoint of the rate setting period (July 1, 2000 to September 30, 
2001.)'
    8. On page 46793, in column 3, section VI, Regulatory Impact 
Analysis, paragraph 2, the third sentence is revised to read: ``This 
final rule is a major rule as defined in Title 5, United States Code, 
section 804(2), because we estimate its impact will be to increase the 
payments to SNFs by approximately $2.6 billion in FY 2001.''
    9. On page 46794, in column 3, first full paragraph, the first 
sentence is revised to read: ``As stated previously in this rule, the 
aggregate increase in payments associated with this final rule is 
estimated to be $2.6 billion.''
    10. On page 46795, in column 3, first full paragraph, the third 
sentence is revised to read: ``It is assumed that payments will 
increase by 18.3 percent in total, assuming facilities do not change 
their care delivery and billing practices in response.''
    11. Table 11 (Projected Impact of FY 2001 Update to the SNF PPS) is 
corrected as set forth below.

                                              Table 11.--Projected Impact of FY 2001 Update to the SNF PPS
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                                                                             Transition   Add on to
                                                                Number of    to Federal    Federal       Update     Wage index       20        Total FY
                                                                facilities     rates        rates        change       change     (percent)   2001 change
                                                                             (percent)    (percent)    (percent)    (percent)      add on      (percent)
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Total........................................................         9037          4.2          3.5          2.3          0.0          7.2         18.3
Urban........................................................         6300          3.6          3.5          2.3         -0.1          7.1         17.4
Rural........................................................         2737          7.1          3.7          2.2          0.8          7.7         23.2
Hospital based urban.........................................          683         -4.5          3.0          2.4          0.0          6.8          7.6
Freestanding urban...........................................         5617          5.1          3.6          2.3         -0.1          7.2         19.3
Hospital based rural.........................................          533          2.0          3.4          2.3          0.9          8.7         18.3
Freestanding rural...........................................         2204          8.2          3.7          2.2          0.7          7.5         24.1
Urban by region:
New England..................................................          630         10.5          3.8          2.2         -0.8          7.8         25.4
Middle Atlantic..............................................          877         14.3          3.8          2.2         -0.3          9.0         31.8
South Atlantic...............................................          959         -0.4          3.3          2.3         -0.4          6.2         11.3
East North Central...........................................         1232          6.1          3.6          2.2          0.4          7.0         20.7

[[Page 3499]]

 
East South Central...........................................          212          1.9          3.5          2.3         -0.7          6.9         14.5
West North Central...........................................          469          3.6          3.5          2.3          0.4          6.7         17.5
West South Central...........................................          519         -5.2          3.0          2.4          1.0          6.3          7.3
Mountain.....................................................          303         -4.0          3.1          2.4          0.0          4.8          6.2
Pacific......................................................         1070         -2.3          3.2          2.4         -0.5          6.9          9.8
Rural by region:
New England..................................................           88         14.4          3.9          2.2         -0.9          8.4         30.5
Middle Atlantic..............................................          144         13.1          3.9          2.2          0.0          9.0         30.9
South Atlantic...............................................          373          5.3          3.6          2.2          1.1          8.0         21.7
East North Central...........................................          561          9.2          3.7          2.2          1.0          7.4         25.5
East South Central...........................................          255          4.2          3.6          2.3          0.6          8.8         20.9
West North Central...........................................          581         11.1          3.7          2.2          0.8          8.3         28.5
West South Central...........................................          354          1.2          3.4          2.3          1.1          6.9         15.7
Mountain.....................................................          204          3.3          3.5          2.3          0.7          6.4         17.2
Pacific......................................................          151          3.2          3.5          2.3          0.3          6.3         16.5
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    (Authority: Section 1888 of the Social Security Act (42 U.S.C. 
1395yy))

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

    Dated: January 2, 2001.
Brian P. Burns,
Deputy Assistant Secretary for Information Resources Management.
[FR Doc. 01-1187 Filed 1-12-01; 8:45 am]
BILLING CODE 4120-01-P