Document headings vary by document type but may contain
                    the following: the agency or agencies that issued and signed a document
the number of the CFR title and the number of each part
                      the document amends, proposes to amend, or is directly
                      related to
the agency docket number / agency internal file number
the RIN which identifies each regulatory action listed in
                      the Unified Agenda of Federal Regulatory and Deregulatory
                      Actions See the
                    Document Drafting Handbook
                    for more details.
 Department of Health and Human Services Centers for Medicare & Medicaid Services 42 CFR Part 418
[CMS-1548-P]
RIN 0938-AP14
 AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS.
 ACTION: Proposed rule.
 SUMMARY: This proposed rule proposes the hospice wage index for fiscal year 2009. This proposed rule also proposes to phase-out the Medicare hospice budget neutrality adjustment factor and clarify two wage index issues, pertaining to the definition of rural and urban areas and to multi-campus hospital facilities.
 DATES: To be assured consideration, comments must be received at one of the addresses provided below, no later than 5 p.m. on June 27, 2008.
 ADDRESSES: In commenting, please refer to file code CMS-1548-P. Because of staff and resource limitations, we cannot accept comments by facsimile (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 to 
                        *http://www.regulations.gov.*
                         Follow the instructions for “Comment or Submission” and enter the filecode to find the document accepting comments. 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-1548-P, P.O. Box 8012, Baltimore, MD 21244-1850. 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-1548-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 Government identification, commenters are encouraged to leave their comments in the CMS drop slots located in the main lobby of the building. A stamp-in clock is available for persons wishing to retain a proof of filing by stamping in and retaining an extra copy of the comments being filed.) b. 7500 Security Boulevard, Baltimore, MD 21244-1850. If you intend to deliver your comments to the Baltimore address, please call telephone number (410) 786-9994 in advance to schedule your arrival with one of our staff members. Comments mailed to the addresses indicated as appropriate for hand or courier delivery may be delayed and received after the comment period. For information on viewing public comments, see the beginning of the 
                        **SUPPLEMENTARY INFORMATION**
                         section.
 FOR FURTHER INFORMATION CONTACT: Randy Throndset (410) 786-0131 or Katie Lucas (410) 786-7723.


SUPPLEMENTARY INFORMATION: *Submitting Comments:*
                     We welcome comments from the public on all issues set forth in this rule to assist us in fully considering issues and developing policies. You can assist us by 
                    ( print page 24001)
                    referencing the file code CMS-1548-P and the specific “issue identifier” that precedes the section on which you choose to comment. *Inspection of Public Comments:*
                     All comments received before the close of the comment period are available for viewing by the public, including any personally identifiable or confidential business information that is included in a comment. We post all comments received before the close of the comment period on the following Web site as soon as possible after they have been received: 
                    *http://www.regulations.gov.*
                     Follow the search instructions on that Web site to view public comments. Comments received timely will also be available for public inspection as they are received, generally beginning approximately 3 weeks after publication of a document, at the headquarters of the Centers for Medicare & Medicaid Services, 7500 Security Boulevard, Baltimore, Maryland 21244, Monday through Friday of each week from 8:30 a.m. to 4 p.m. To schedule an appointment to view public comments, phone 1-800-743-3951. Table of Contents I. Background A. General 1. Hospice Care 2. Medicare Payment for Hospice Care B. Hospice Wage Index 1. Raw Wage Index Values (Pre-Floor, Pre-Reclassified Hospital Wage Index) 2. Changes to Core-Based Statistical Area (CBSA) Designations 3. Definition of Urban and Rural Areas 4. Areas Without Hospital Wage Data 5. CBSA Nomenclature Changes 6. Hospice Payment Rates II. Provisions of the Proposed Rule A. Clarification of New England Deemed Counties B. Wage Data for Multi-Campus Hospitals C. FY 2009 Proposed Hospice Wage Index With Phase-Out of the Budget Neutrality Adjustment Factor (BNAF) 1. Background 2. Areas Without Hospital Wage Data 3. Phase-Out of the BNAF *a. Effects of phasing-out the BNAF using the published FY 2008 Hospice Wage Index Data* *b. Effects of phasing-out the BNAF using the Updated Pre-floor, Pre-reclassified Hospital Wage Index Data (FY 2009 proposal)* D. Summary of the Provisions of the Proposed Rule III. Collection of Information Requirements IV. Regulatory Impact Analysis A. Overall Impact B. Anticipated Effects 1. Hospice Size 2. Geographic Location 3. Type of Ownership 4. Hospice Base C. Accounting Statement Part 418—Hospice Care I. Background *A. General* 1. Hospice Care Hospice care is an approach to treatment that recognizes that the impending death of an individual warrants a change in the focus from curative care to palliative care for relief of pain and for symptom management. The goal of hospice care is to help terminally ill individuals continue life with minimal disruption to normal activities while remaining primarily in the home environment. A hospice uses an interdisciplinary approach to deliver medical, nursing, social, psychological, emotional, and spiritual services through use of a broad spectrum of professional and other caregivers, with the goal of making the individual as physically and emotionally comfortable as possible. Counseling services and inpatient respite services are available to the family of the hospice patient. Hospice programs consider both the patient and the family as a unit of care. Section 1861(dd) of the Social Security Act (the Act) provides for coverage of hospice care for terminally ill Medicare beneficiaries who elect to receive care from a participating hospice. Section 1814(i) of the Act provides payment for Medicare participating hospices. 2. Medicare Payment for Hospice Care Our regulations at 42 CFR part 418 establish eligibility requirements, payment standards and procedures, define covered services, and delineate the conditions a hospice must meet to be approved for participation in the Medicare program. Part 418 subpart G provides for payment in one of four prospectively-determined rate categories (routine home care, continuous home care, inpatient respite care, and general inpatient care) to hospices based on each day a qualified Medicare beneficiary is under a hospice election. B. Hospice Wage Index Our regulations at § 418.306(c) require each hospice's labor market to be established using the most current hospital wage data available, including any changes by OMB to the Metropolitan Statistical Areas (MSAs) definitions. OMB revised the MSA definitions beginning in 2003 with new designations called the Core Based Statistical Areas (CBSAs). For the purposes of the hospice benefit, the term “MSA-based” refers to wage index values and designations based on the previous MSA designations before 2003. Conversely, the term “CBSA-based” refers to wage index values and designations based on the OMB revised MSA designations in 2003, which now include CBSAs. In the August 11, 2004 IPPS final rule (69 FR 48916, 49026), revised labor market area definitions were adopted at § 412.64(b), which were effective October 1, 2004 for acute care hospitals. CMS also revised the labor market areas for hospices using the new OMB standards that included CBSAs. In the FY 2006 hospice wage index final rule (70 FR 45130), we implemented a 1-year transition policy using a 50/50 blend of the CBSA-based wage index values and the Metropolitan Statistical Area (MSA)-based wage index values for FY 2006. The one-year transition policy ended on September 30, 2006. For FY 2007 and FY 2008 we used wage index values based on CBSA designations. The hospice wage index is used to adjust payment rates for hospice agencies under the Medicare program to reflect local differences in area wage levels. The original hospice wage index was based on the 1981 Bureau of Labor Statistics hospital data and had not been updated since 1983. In 1994, because of disparity in wages from one geographical location to another, a committee was formulated to negotiate a wage index methodology that could be accepted by the industry and the government. This committee, functioning under a process established by the Negotiated Rulemaking Act of 1990, was comprised of national hospice associations; rural, urban, large and small hospices; multi-site hospices; consumer groups; and a government representative. On April 13, 1995, the Hospice Wage Index Negotiated Rulemaking Committee signed an agreement for the methodology to be used for updating the hospice wage index. In the August 8, 1997 
                    **Federal Register**
                     (62 FR 42860), we published a final rule implementing a new methodology for calculating the hospice wage index based on the recommendations of the negotiated rulemaking committee. The committee statement was included in the appendix of that final rule (62 FR 42883). The hospice wage index is updated annually. Our most recent annual update notice published in the 
                    **Federal Register**
                     (72 FR 50214) on August 31, 2007 set forth updates to the hospice wage index for FY 2008. On October 1, 2007, we published a correction notice in the 
                    **Federal Register**
                     (72 FR 55672) to correct technical errors that appeared in the August 31, 2007 final rule. 
                    ( print page 24002) 1. Raw Wage Index Values (Pre-Floor, Pre-Reclassified Hospital Wage Index) As described in the August 8, 1997 hospice wage index final rule (62 FR 42860), the pre-floor and pre-reclassified hospital wage index is used as the raw wage index for the hospice benefit. These raw wage index values are then subject to either a budget neutrality adjustment or application of the hospice floor to compute the hospice wage index used to determine payments to hospices. Pre-floor, pre-reclassified hospital wage index values of 0.8 or greater are adjusted by the BNAF. Pre-floor, pre-reclassified hospital wage index values below 0.8 are adjusted by the greater of: (1) The hospice BNAF; or (2) the hospice floor (which is a 15 percent increase) subject to a maximum wage index value of 0.8. For example, if County A has a pre-floor, pre-reclassified hospital wage index (raw wage index) value of 0.4000, we would perform the following calculations using the budget neutrality factor (which for this example is 1.060988) and the hospice floor to determine County A's hospice wage index: Pre-floor, pre-reclassified hospital wage index value below 0.8 multiplied by the BNAF: (0.4000 × 1.060988 = 0.4244) Pre-floor, pre-reclassified hospital wage index value below 0.8 multiplied by the hospice floor: (0.4000 × 1.15 = 0.4600) Based on these calculations, County A's hospice wage index would be 0.4600. As decided upon by the Hospice Wage Index Negotiated Rulemaking Committee, budget neutrality means that, in a given year, estimated aggregate payments for Medicare hospice services using the updated hospice values will equal estimated payments that would have been made for these services if the 1983 hospice wage index values had remained in effect, after adjusting the payment rates for inflation. The BNAF has been computed and applied annually to the labor portion of the hospice payment. Currently, the labor portion of the payment rates is as follows: for Routine Home Care, 68.71 percent; for Continuous Home Care, 68.71 percent; for General Inpatient Care, 64.01 percent; and for Respite Care, 54.13 percent. The non-labor portion is equal to 100 percent minus the labor portion for each level of care. Therefore the non-labor portion of the payment rates is as follows: for Routine Home Care, 31.29 percent; for Continuous Home Care, 31.29 percent; for General Inpatient Care, 35.99 percent; and for Respite Care, 45.87 percent. 2. Changes to Core-Based Statistical Area (CBSA) Designations The annual update to the hospice wage index is published in the 
                    **Federal Register**
                     and is based on the most current available hospital wage data, as well as any changes by the Office of Management and Budget (OMB) to the definitions of MSAs, which now include CBSA designations. The August 4, 2005 final rule (70 FR 45130) set forth the adoption of the changes discussed in the OMB Bulletin No. 03-04 (June 6, 2003), which announced revised definitions for Micropolitan Statistical Areas and the creation of MSAs and Combined Statistical Areas. In adopting the OMB CBSA geographic designations, we provided for a 1-year transition with a blended hospice wage index for all hospices for FY 2006. For FY 2006, the hospice wage index for each provider consisted of a blend of 50 percent of the FY 2006 MSA-based hospice wage index and 50 percent of the FY 2006 CBSA-based hospice wage index. Fiscal years 2007 and 2008 used the full CBSA-based hospice wage index values as discussed in their respective notices or rules (71 FR 52080 and 72 FR 50214). 3. Definition of Rural and Urban Areas Each hospice's labor market is determined based on definitions of MSAs issued by OMB. In general, an urban area is defined as an MSA or New England County Metropolitan Area (NECMA) as defined by OMB. Under § 412.64(b)(1)(ii)(C), a rural area is defined as any area outside of the urban area. The urban and rural area geographic classifications are defined in § 412.64(b)(1)(ii)(A) through (C), and have been used for the Medicare hospice benefit since implementation. 4. Areas Without Hospital Wage Data When adopting OMB's new labor market designations in FY 2006, we identified some geographic areas where there were no hospitals, and thus, no hospital wage index data on which to base the calculation of the hospice wage index. Beginning in FY 2006, we adopted a policy to use the FY 2005 pre-floor, pre-reclassified hospital wage index value for rural areas when no hospital wage data were available. We also adopted the policy that for urban labor markets without a hospital from which a hospital wage index data could be derived, all of the CBSAs within the State would be used to calculate a statewide urban average pre-floor, pre-reclassified hospital wage index value to use as a reasonable proxy for these areas. Consequently, in the FY 2006 final rule, the FY 2007 update notice, and the FY 2008 final rule, we applied the average pre-floor, pre-reclassified hospital wage index data from all urban areas in that state to urban areas without a hospital. The only affected CBSA is 25980, Hinesville-Fort Stewart, Georgia. Under the CBSA labor market areas, there are no hospitals in rural locations in Massachusetts and Puerto Rico. Since there was no rural proxy for more recent rural data within those areas, in the FY 2006 hospice wage index proposed rule (70 FR 22394, 22398), we proposed applying the FY 2005 pre-floor, pre-reclassified hospital wage index value to rural areas where no hospital wage data were available. In the FY 2006 final rule and in the FY 2007 update notice, we applied the FY 2005 pre-floor, pre-reclassified hospital wage index data for areas lacking hospital wage data in both FY 2006 and FY 2007 for rural Massachusetts and rural Puerto Rico. In the FY 2008 final rule (72 FR 50214, 50217) we considered alternatives to our methodology to update the pre-floor, pre-reclassified hospital wage index for rural areas without hospital wage data. We indicated that we believed that the best imputed proxy for rural areas, would: (1) Use pre-floor, pre-reclassified hospital data; (2) use the most local data available to impute a rural pre-floor, pre-reclassified hospital wage index; (3) be easy to evaluate; and, (4) be easy to update from year-to-year. Therefore, in FY 2008, in cases where there was a rural area without rural hospital wage data, we used the average pre-floor, pre-reclassified hospital wage index data from all contiguous CBSAs to represent a reasonable proxy for the rural area. This approach does not use rural data, however, the approach uses pre-floor, pre-reclassified hospital wage data, is easy to evaluate, is easy to update from year-to-year, and uses the most local data available. In the FY 2008 rule (72 FR at 50217), we noted that in determining an imputed rural pre-floor, pre-reclassified hospital wage index, we interpret the term “contiguous” to mean sharing a border. For example, in the case of Massachusetts, the entire rural area consists of Dukes and Nantucket counties. We determined that the borders of Dukes and Nantucket counties are contiguous with Barnstable and Bristol counties. Under the adopted methodology, the pre-floor, pre-reclassified hospital wage index values for the counties of Barnstable (CBSA 12700, Barnstable Town, MA) and Bristol (CBSA 39300, Providence-New Bedford-Fall River, RI-MA) would be 
                    ( print page 24003)
                    averaged resulting in an imputed pre-floor, pre-reclassified rural hospital wage index for FY 2008. We noted in the FY 2008 final hospice wage index rule that while we believe that this policy could be readily applied to other rural areas that lack hospital wage data (possibly due to hospitals converting to a different provider type, such as a Critical Access Hospital, that does not submit the appropriate wage data), if a similar situation arose in the future, we would re-examine this policy. We also noted that we do not believe that this policy would be appropriate for Puerto Rico, as there are sufficient economic differences between hospitals in the United States and those in Puerto Rico, including the payment of hospitals in Puerto Rico using blended Federal/Commonwealth-specific rates. Therefore we believe that a separate and distinct policy for Puerto Rico is necessary. Any alternative methodology for imputing a pre-floor, pre-reclassified hospital wage index for rural Puerto Rico would need to take into account the economic differences between hospitals in the United States and those in Puerto Rico. Our policy of imputing a rural pre-floor, pre-reclassified hospital wage index based on the pre-floor, pre-reclassified hospital wage index(es) of CBSAs contiguous to the rural area in question does not recognize the unique circumstances of Puerto Rico. While we have not yet identified an alternative methodology for imputing a pre-floor, pre-reclassified hospital wage index for rural Puerto Rico, we will continue to evaluate the feasibility of using existing hospital wage data and, possibly, wage data from other sources. For FY 2008, we used the most recent pre-floor, pre-reclassified hospital wage index available for Puerto Rico, which is 0.4047. 5. CBSA Nomenclature Changes The Office of Management and Budget (OMB) regularly publishes a bulletin that updates the titles of certain CBSAs. In the FY 2008 Final Rule (72 FR 50218) we noted that the FY 2008 rule and all subsequent hospice wage index rules and notices would incorporate CBSA changes from the most recent OMB bulletins. The OMB bulletins may be accessed at 
                    *http://www.whitehouse.gov/​omb/​bulletins/​index.html.* 6. Hospice Payment Rates Section 4441(a) of the Balanced Budget Act of 1997 (BBA) amended section 1814(i)(1)(C)(ii) of the Act to establish updates to hospice rates for FYs 1998 through 2002. Hospice rates were to be updated by a factor equal to the market basket index, minus 1 percentage point. However, neither the BBA nor subsequent legislation specified alteration to the market basket adjustment to be used to compute payment for fiscal years beyond 2002. Payment rates for FYs since 2002 have been updated according to section 1814(i)(1)(C)(ii)(VII) of the Act, which states that the update to the payment rates for subsequent fiscal years will be the market basket percentage for the fiscal year. It has been longstanding practice to use the inpatient hospital market basket as a proxy for a hospice market basket. Historically, the rate update has been published through a separate administrative instruction issued annually in July to provide adequate time to implement system change requirements. Providers determine their payments by applying the hospice wage index in this notice to the labor portion of the published hospice rates. II. Provisions of the Proposed Rule A. Clarification of New England Deemed Counties We are taking the opportunity to address the change in the designation of “New England deemed counties,” which are listed in § 412.64(b)(1)(ii)(B). These counties were deemed to be parts of urban areas under section 601(g) of the Social Security Amendments of 1983, yet the OMB designates these counties as rural. In the FY 2008 Inpatient Prospective Payment System (IPPS) final rule, IPPS adopted the OMB designation for the pre-floor, pre-reclassified hospital wage index. The counties include Litchfield County, Connecticut; York County, Maine; Sagadahoc County, Maine; Merrimack County, New Hampshire; and Newport County, Rhode Island. Of these five “New England deemed counties,” three (York County, Sagadahoc County, and Newport County) are also included in metropolitan statistical areas defined by OMB and are considered urban under the current IPPS labor market area definitions in § 412.64(b)(1)(ii)(A). The remaining two, Litchfield County and Merrimack County, are geographically located in areas that are considered rural under the current IPPS labor market area definitions. However, they have been previously deemed urban under the IPPS in certain circumstances as discussed below. In the FY 2008 IPPS final rule with comment period (72 FR 47130, August 22, 2007), § 412.64(b)(1)(ii)(B) was revised such that the two “New England deemed counties” that are still considered rural by OMB (Litchfield County, CT and Merrimack County, NH) are no longer considered urban effective for discharges occurring on or after October 1, 2007. Therefore, these two counties are considered rural in accordance with § 412.64(b)(1)(ii)(C). However, for purposes of payment under the IPPS, acute care hospitals located within those areas are treated as being reclassified to their deemed urban area effective for discharges occurring on or after October 1, 2007 (see 72 FR 47337 through 47338). We also noted in this discussion that this policy change was limited to the “New England deemed counties” IPPS hospitals only, and that any change to non-IPPS provider wage indexes would be addressed in the respective payment system rules. The hospice program does not provide for such geographic reclassification as the IPPS does, and we are taking this opportunity to clarify treatment of “New England deemed counties” under the hospice program in this proposed rule. As discussed, our regulations at § 418.306(c) require each hospice's labor market to be established using the most current hospital wage data available. The original hospice wage index was based on the 1981 Bureau of Labor Statistics hospital data. In 1994, a committee functioning under a process established by the Negotiated Rulemaking Act of 1990, was formed to negotiate a hospice wage index methodology that could be accepted by the industry and the government. The revised hospice wage index was based on the recommendations of the Negotiated Rulemaking Advisory Committee. This committee was established to provide advice and make recommendations to the Secretary on the hospice wage index used to adjust payment rates for hospices under the Medicare program, to reflect local differences in area wage levels. The Committee recommended that the revised hospice wage index be based on the most current available data for each fiscal year, which would be used to construct a pre-floor, pre-reclassified hospital wage index under the prospective payment system before adjustments were made to take into account the geographic reclassification of hospitals in accordance with sections 1886(d)(8)(B) and (d)(10) of the Act, as well as each hospice's labor market area as established by OMB. The reason the unadjusted hospital wage data were recommended was to avoid further reductions in certain rural statewide wage index values that would result from reclassification. The recommendations are codified in 
                    ( print page 24004)
                    § 418.306(c) of our regulations; however, there is no reference to § 412.64. In other words, while § 412.64 is not explicitly noted, the hospice program has used the urban definition in § 412.64(b)(1)(ii)(A) and (B), and the rural definition as any area outside of an urban area in § 412.64(b)(1)(ii)(C). Historical changes to the labor market area/geographic classifications and annual updates to the hospice wage index values have been made effective October 1 each year. When we established the hospice wage index values effective October 1, 2007 through September 30, 2008, we considered the “New England deemed counties” (including Litchfield County, CT and Merrimack County, NH) as urban for FY 2008 in accordance with the definitions of urban and rural areas in the FY 2008 hospice final rule (72 FR 50216). Therefore, Litchfield County was listed as one of the constituent counties of urban CBSA 25540 (Hartford-West Hartford-East Hartford, CT), and Merrimack County was listed as one of the constituent counties of urban CBSA 31700 (Manchester-Nashua, NH) (72 FR 50236 and 50239, respectively). As noted above, the terms “rural” and “urban” areas are defined in IPPS according to the definitions of those terms in § 412.64(b)(1)(ii)(A) through (C). Litchfield county, CT and Merrimack county, NH are considered rural areas for hospital IPPS purposes in accordance with § 412.64. Under this proposal, effective October 1, 2008, Litchfield county, CT would no longer be considered part of urban CBSA 25540 (Hartford-West Hartford-East Hartford, CT), and Merrimack County, NH would no longer be considered part of urban CBSA 31700 (Manchester-Nashua, NH). Rather, these counties would be considered to be rural areas within their respective states under the hospice payment system. This proposed policy is consistent with our policy of not taking into account IPPS geographic reclassifications in determining payments under the hospice wage index. We propose to amend § 418.306(c) to cross-reference to the definitions of urban and rural in the IPPS regulations in 42 CFR part 412 subpart D. B. Wage Data for Multi-Campus Hospitals In the 2007 IPPS final rule, we changed in the way that we treat multi-campus hospital wage data in the creation of the pre-floor, pre-reclassified hospital wage index. The IPPS wage data used to determine the proposed FY 2009 hospice wage index values now apportion the wage data for multi-campus hospitals located in different labor market areas (CBSAs) to the CBSAs where the campuses are located (see 72 FR 47317 through 47320). Historically, the hospice wage index is derived from the pre-floor, pre-reclassified hospital wage index. Consequently, for this proposed rule we propose to continue to use the most recent available pre-floor, pre-reclassified hospital wage index in computing the hospice wage index. The pre-floor, pre-reclassified hospital wage index values for the following CBSAs are affected by this change in how wage data from multi-campus hospitals are used in the computation of the pre-floor, pre-reclassified hospital wage index: Boston-Quincy, MA (CBSA 14484), Providence-New Bedford-Falls River, RI-MA (CBSA 39300), Chicago-Naperville-Joliet, IL (CBSA 16974) and Lake-County-Kenosha County, IL-WI (CBSA 29404). C. FY 2009 Hospice Wage Index With Phase-Out of the Budget Neutrality Adjustment Factor (BNAF) [If you choose to comment on issues in this section, please include the caption, “FY 2009 Hospice Wage Index with Phase-out of the Budget Neutrality Adjustment Factor (BNAF)” at the beginning of your comments.] 1. Background The hospice final rule published in the 
                    **Federal Register**
                     on December 16, 1983 (48 FR 56008) provided for adjustment to hospice payment rates to reflect differences in area wage levels. We apply the appropriate hospice wage index value to the labor portion of the hospice payment rates based on the geographic area where hospice care was furnished. As noted earlier, each hospice's labor market area is based on definitions of Metropolitan Statistical Areas (MSAs) issued by the OMB. For FY 2009, we propose to again use a pre-floor, pre-reclassified hospital wage index based solely on the CBSA designations. As noted above, our hospice payment rules utilize the wage adjustment factors used by the Secretary for purposes of section 1886(d)(3)(E) of the Act for hospital wage adjustments. We are proposing again to use the pre-floor and pre-reclassified hospital wage index data to adjust the labor portion of the hospice payment rates based on the geographic area where the beneficiary receives hospice care. We believe the use of the pre-floor, pre-reclassified hospital wage index data results in the appropriate adjustment to the labor portion of the costs. For the FY 2009 update to hospice payment rates, we propose to continue to use the most recent pre-floor, pre-reclassified hospital wage index available at the time of publication. 2. Areas Without Hospital Wage Data In adopting the CBSA designations, we identified some geographic areas where there are no hospitals, and thus no hospital wage data on which to base the calculation of the hospice wage index. These areas were described in section I.B.4 of this proposed rule. Beginning in FY 2006, we adopted a policy that, for urban labor markets without an urban hospital from which a pre-floor, pre-reclassified hospital wage index can be derived, all of the urban CBSA pre-floor, pre-reclassified hospital wage index values within the State would be used to calculate a statewide urban average pre-floor, pre-reclassified hospital wage index to use as a reasonable proxy for these areas. Currently, the only CBSA that would be affected by this policy is CBSA 25980, Hinesville, Georgia. We propose to continue this policy for FY 2009. Currently, the only rural areas where there are no hospitals from which to calculate a pre-floor, pre-reclassified hospital wage index are Massachusetts and Puerto Rico. In August 2007 (72 FR 50217) we adopted the following methodology for imputing rural pre-floor, pre-reclassified hospital wage index values for areas where no hospital wage data are available as an acceptable proxy. We imputed an average pre-floor, pre-reclassified hospital wage index value by averaging the pre-floor, pre-reclassified hospital wage index values from contiguous CBSAs as a reasonable proxy for rural areas with no hospital wage data from which to calculate a pre-floor, pre-reclassified hospital wage index. In determining an imputed rural pre-floor, pre-reclassified hospital wage index, we define “contiguous” as sharing a border. For Massachusetts, rural Massachusetts currently consists of Dukes and Nantucket Counties. We determined that the borders of Dukes and Nantucket counties are “contiguous” with Barnstable and Bristol counties. We are again proposing to apply this methodology for imputing a rural pre-floor, pre-reclassified hospital wage index for those rural areas without rural hospital wage data in FY 2009. However, as we noted in our final rule at 72 FR 50218, we do not believe that this policy is appropriate for Puerto Rico. We noted that there are sufficient economic differences between the hospitals in the United States and those in Puerto Rico, including the fact that hospitals in Puerto Rico are paid on 
                    ( print page 24005)
                    blended Federal/Commonwealth-specific rates, to make a separate distinct policy for Puerto Rico necessary. For FY 2009, we again propose to continue to use the most recent pre-floor, pre-reclassified hospital wage index value available for Puerto Rico, which is 0.4047. This pre-floor, pre-reclassified hospital wage index value is then adjusted upward by the hospice floor in the computing of the proposed FY 2009 hospice wage index. 3. Phase-Out of the Budget Neutrality Adjustment Factor (BNAF) As noted in section 1.B of this proposed rule, the current hospice wage index methodology was developed through a negotiated rule making process and implemented in 1997. The rule making committee sought to address the inaccuracies in the original Bureau of Labor Statistics (BLS)-based hospice wage index, account better for disparities from one geographic location to another, and develop a wage index that would be as accurate, reliable and equitable as possible. The resulting hospice wage index reflects a special adjustment (a BNAF) to ensure payments in the aggregate are budget neutral to payments using the original 1983 hospice wage index. The adjustment, still in place today, results in providers currently receiving about 4 percent more in payments than they would receive if the adjustment factor were not applied. The rationale for maintaining this adjustment is outdated given the time that has elapsed since it was put into place and the growth that is occurring in the hospice benefit. In this section, we propose to phase-out this adjustment over 3 years, reducing it by 25 percent in FY 2009, by an additional 50 percent for a total of 75 percent in FY 2010, and eliminating it completely in FY 2011. We also provide our rationale for the phase-out. As discussed in section I.B of this proposed rule, the original hospice wage index was based on the 1981 Bureau of Labor Statistics (BLS) hospital data and had not been updated since 1983. During earlier attempts to update the hospice wage index, the hospice industry raised concerns over the adverse financial impact of a new wage index on individual hospices and a possible overall reduction in Medicare payments. Thus, the result was that in the absence of agreement on a new wage index, we continued to use a wage index that was clearly obsolete for geographically adjusting Medicare hospice payments (see “Medicare Program; Notice Containing the Statement Drafted by the Committee Established to Negotiate the Wage Index to be Used to Adjust Hospice Payment Rates Under Medicare,” November 29, 1995, 60 FR 61264). Changing to a new but more accurate wage index would result in some areas gaining as their wage index value would increase, but in other areas seeing declines in payments as their wage index value dropped. In 1994 we noted that a majority of hospices would have their wage index reduced with the new wage index based on using the pre-floor, pre-reclassified hospital wage index. These reductions would have occurred for two key reasons: (1) Hospices were located in areas where the original hospice wage index was artificially high due to flaws in the 1981 BLS data, and (2) hospices were located in areas where wages had gone down relative to other geographic areas (see “Hospice Services Under Medicare Program: Intent to Form Negotiated Rulemaking Committee,” October 14, 1994, 59 FR 52130). Because of the negative impact to certain areas that was expected with the change to a new wage index, a committee was formulated in 1994, under the process established by the Negotiated Rulemaking Act of 1990 (Pub. L. 101-648). The Committee was established to negotiate the hospice wage index methodology rather than to go through the usual rulemaking process. On September 4, 1996, we published a proposed rule (61 FR 46579) in which we proposed a methodology to update the hospice wage index used to adjust Medicare hospice payment rates. In formulating the provisions of that proposed rule, the Committee considered criteria in evaluating the available data sources. The need for fundamental equity of the wage index; data that reflected actual work performed by hospice personnel; compatibility with wage indexes used by CMS for other Medicare providers; and availability of the data for timely implementation were considered. The Committee agreed that the hospice wage index be derived from the 1993 hospital cost report data and that these data, prior to reclassification, would form the basis for the FY 1997 hospice wage index. That is the pre-floor, pre-reclassified hospital wage index would not be adjusted to take into account the geographic reclassification of hospitals in accordance with sections 1886(d)(8)(B) and 1886(d)(10) of the Act. The methodology is codified in § 418.306(c). The hospice wage index for subsequent years would be based on pre-floor, pre-reclassified hospital wage index data for a subsequent year. The Committee was also concerned that while some hospices would see increases, use of the pre-floor, pre-reclassified hospital wage index as the wage index for hospices would result in a net reduction in aggregate Medicare payments for hospices. As noted above, a majority of hospices would have had their wage index lowered by using the new wage index because the prior hospice wage indices were based on outdated data which were artificially high due to flaws in the 1981 BLS data, and because some hospices were located in areas where wages had gone down relative to other geographic areas. The reduction in overall Medicare payments if a new wage index were adopted was noted in the November 29, 1995 final rule (60 FR 61264). Therefore, the Committee also decided that, each year in updating the hospice wage index, aggregate Medicare payments to hospices would remain budget neutral to payments as if the 1983 wage index had been used. As decided upon by the Hospice Wage Index Negotiated Rulemaking Committee, budget neutrality means that, in a given year, estimated aggregate payments for Medicare hospice services using the updated hospice values will equal estimated payments that would have been made for these services if the 1983 hospice wage index values had remained in effect, after adjusting the payment rates for inflations. Being budget neutral does not take into account annual market basket updates to hospice payment rates. Therefore, although payments to individual hospice programs may change each year, the total payments each year to hospices would not be affected by using the updated hospice wage index because total payments would be budget neutral as if the 1983 wage index had been used. To implement this provision a BNAF would be computed and applied annually. The BNAF is calculated by computing estimated payments using the most recent completed year of hospice claims data. The units (days or hours) from those claims are multiplied by the updated hospice payment rates to calculate estimated payments. The updated hospice wage index values are then applied to the labor portion of the payments. For this proposed rule, that means estimating payments for FY 2009 using FY 2006 hospice claims data, and applying the estimated updated FY 2009 hospice payment rates (updating the FY 2008 rates by the estimated FY 2009 market basket update). The proposed FY 2009 hospice wage index values are then applied to the labor portion only. The procedure is repeated using the 
                    ( print page 24006)
                    same claims data and payment rates, but using the 1983 BLS-based wage index instead of the updated pre-floor, pre-reclassified hospital wage index. The total payments are then compared, and the adjustment required to make total payments equal is computed; that adjustment factor is the BNAF. In 1998, the BNAF increased all wage index values by just over 2 percent. All pre-floor, pre-reclassified hospital wage index values of 0.8 or greater would be adjusted by the BNAF. Also, all pre-floor, pre-reclassified hospital wage index values below 0.8 would receive the greater of the following: (1) A 15-percent increase subject to a maximum hospice wage index value of 0.8; or (2) an adjustment by the BNAF. All hospice wage index values of 0.8 or greater would be adjusted by the BNAF. The BNAF would be calculated and applied annually. While the Committee sought to adopt a wage index methodology that would be as accurate, reliable, and equitable as possible, the Committee also decided to incorporate a BNAF into the calculation of the hospice wage index that would otherwise apply in order to mitigate adverse financial impacts some hospices would experience through a decrease in their wage index value by transitioning to a pre-floor, pre-reclassified hospital wage index. In the August 8, 1997 final rule (62 FR 42860), we indicated that the annual updates of the hospice wage index values would be made in accordance with the methodology agreed to by the rulemaking committee. We also noted that in the event that if we decide to change this methodology by which the hospice wage index is computed, it would be reflected in a proposed rule published in the 
                    **Federal Register**
                    . In this proposed rule, we now propose to change this methodology. In FY 1998, the BNAF was 1.020768; in FY 2008 it was 1.066671. In other words, any pre-floor, pre-reclassified hospital wage index value greater than 0.8 was increased by over 2 percent in FY 1998 and increased by almost 7 percent in FY 2008. In FY 2008, this adjustment resulted in hospice providers receiving about 4 percent more in payments than they would have received if the BNAF had not been applied. The negotiating committee also recommended that the transition to the new hospice wage index occur over 3 years, from FY 1998 to FY 2001. The intent of both the three year transition and the budget neutrality adjustment was to mitigate the negative financial impact to many hospices resulting from the wage index change. Additionally, the committee sought to ensure that access to hospice care was not jeopardized as a result of the wage index change. We believe that the rationale for maintaining this adjustment is outdated for several reasons. First, the original purpose of the BNAF was to prevent reductions in payments to the majority of hospices whose wage index was based on the original hospice wage index which was artificially high due to flaws in the 1981 BLS data. While incorporating a BNAF into hospice wage indices could be rationalized in 1997 as a way to smooth the transition from an old wage index to a new one, since hospices have had plenty of time to adjust to the new wage index, it is difficult to justify maintaining in perpetuity a BNAF which was in part compensating for artificially high data to begin with. Second, the new wage index adopted in 1997 resulted in increases in wage index values for hospices in certain areas. The BNAF applies to hospices in all areas. Thus, hospices in areas that would have had increases without the BNAF received an artificial boost in the wage index for the past 11 years. We believe that continuation of this excess payment can no longer be justified. Third, an adjustment factor that is based on 24-year old wage index values is contrary to our goal of using a hospice wage index that is as accurate, reliable and equitable as possible in accounting for geographic variation in wages. We believe that those goals can be better achieved by using the pre-floor, pre-reclassified hospital wage index, without an outdated BNAF, consistent with other providers. For instance, Medicare payments to home health agencies, that utilize a similar labor mix, are adjusted by the pre-floor, pre-reclassified hospital wage index, without any budget neutrality adjustment. We believe that using the unadjusted pre-floor, pre-reclassified hospital wage index provides a good measure of area wage differences for both these home-based reimbursement systems. Fourth, in the 13 years since concerns about the impact of switching from an old to a new wage index were voiced, the hospice industry and hospice payments have grown substantially. Hospice expenditures in 2006 were $9.2 billion, compared to about $2.2 billion in 1998, a growth rate of almost 20 percent per year. Aggregate hospice expenditures are increasing at a rate of about $1 billion per year. MedPAC projects that expenditures will continue to grow at a rate of 9 percent per year through 2015, outpacing the growth rate of projected expenditures for hospitals, skilled nursing facilities, and physician and home health services. We believe that this growth in Medicare spending for hospice indicates that the original rationale of the BNAF, to cushion the impact of using the new wage index, is no longer justified. These spending growth figures also indicate that any negative financial impact to the hospice industry as a result of eliminating the BNAF is no longer present, and thus the need for a transitional adjustment has passed. Fifth, 13 years ago the industry also voiced concerns about the negative financial impact on individual hospices that could occur by adopting a new wage index. In August 1994 there were 1,602 hospices; currently there are 2,986 hospices. Clearly any negative financial impact from adopting a new wage index in 1997 is no longer present, or we would not have seen an 86 percent increase in the number of hospices since 1994. The number of Medicare-certified hospices has continued to increase, with a 26 percent increase in the number of hospice providers from 2001 to 2005. This ongoing growth in the industry also suggests that phasing out the BNAF would not have a negative impact on access to care. Therefore for these reasons, we believe that continuing to apply a BNAF for the purpose of mitigating any adverse financial impact on hospices or negative impact on access to care is no longer necessary. We are proposing to phase out the BNAF over a 3-year period, reducing the BNAF by 25 percent in FY 2009, by 75 percent in FY 2010, and eliminating it in FY 2011. We believe that the proposed 3-year phase-out period will reduce any adverse financial impact that the industry might experience if we eliminated the BNAF in a single year. However, depending on the comments received, updated data, and subsequent analysis, for the final rule we may determine that a different percentage reduction in the BNAF (for any of the years) or a different phase-out timeframe would be more appropriate. Specifically, it may be determined that a more aggressive phase-out alternative (e.g. a 50 percent reduction in the BNAF in FY 2009, a 75 percent reduction in the BNAF in FY 2010, and elimination of the BNAF in FY 2011) is more appropriate. Consequently, we will continue to look at reduction percentages and timeframe alternatives for the phase-out of the BNAF and, for the final rule, will implement what is determined to be the most appropriate option based on the above information. We propose to maintain the hospice floor, which offers protection to 
                    ( print page 24007)
                    hospices with pre-floor, pre-reclassified hospital wage index values less than 0.8. We believe that we should have addressed this issue in previous years. We believe that using the BNAF has resulted in Medicare spending for hospice services in excess of what spending should have been in the absence of such an adjustment. However, we are not proposing to reduce Medicare payments to hospices for prior years. We are only proposing to remove the application of the BNAF on a prospective basis, beginning on October 1, 2008. Section II.C.3.a below discusses the effects of phasing out the BNAF over three years using the data from the published FY 2008 hospice wage index; by basing the analysis on this data, our simulations hold claims data, the wage index values, and payment rates constant, with the only change being the reduction in the BNAF. Section II.C.3.b discusses the effects of reducing the BNAF for FY 2009 using the proposed FY 2009 hospice wage index. a. Effects of Phasing-Out the BNAF Using the Published FY 2008 Hospice Wage Index For this proposed rule, we will use the FY 2008 hospice wage index (72 FR 50214, published August 31, 2007) to illustrate the effects of phasing out the BNAF over 3 years. This analysis and discussion is for illustrative purposes only and does not affect any of the hospice wage index values for FY 2008. The BNAF that was calculated and applied to the 2007 pre-floor, pre-reclassified hospital wage index values was 6.6671 percent. We propose reducing the BNAF by 25 percent for FY 2009, by 75 percent for FY 2010, and eliminating it altogether for FY 2011 and beyond. A 25 percent reduction in the BNAF can be accomplished by blending 75 percent of the FY 2008 hospice wage index that applied the full 6.6671 percent BNAF with 25 percent of the FY 2008 hospice wage index that used no BNAF. This is mathematically equivalent to taking 75 percent of the full BNAF value, or multiplying 0.066671 by 0.75, which equals 0.050003, or 5.0003 percent. The BNAF of 5.0003 percent reflects a 25 percent reduction in the BNAF. The 25 percent reduction in the BNAF of 5.0003 percent would be applied to the pre-floor, pre-reclassified hospital wage index values of 0.8 or greater used in the published FY 2008 hospice wage index. The hospice floor calculation would still apply to any pre-floor, pre-reclassified hospital wage index values less then 0.8. Currently, the floor calculation has 4 steps. Pre-floor, pre-reclassified hospital wage index values that are less than 0.8 are first multiplied by 1.15; second, the minimum of 0.8 or the pre-floor, pre-reclassified hospital wage index value times 1.15 is chosen as the preliminary hospice wage index value. Third, the pre-floor, pre-reclassified hospital wage index value is multiplied by BNAF. Finally, the greater result of either step 2 or step 3 is chosen as the final hospice wage index value. We propose to leave the hospice floor unchanged, noting that steps 3 and 4 will become unnecessary once the BNAF is eliminated. For the simulations of the BNAF phase-out for FY 2010 and FY 2011, we used the same pre-floor, pre-reclassified hospital wage index values and claims data as the example above, and simply changed the value of the BNAF to reflect either a 75 percent reduction for FY 2010 or a 100 percent reduction for FY 2011. In both cases we started with the full BNAF of 6.6671 percent. We changed the calculation to take 25 percent of the full BNAF to reflect a 75 percent reduction for FY 2010, or eliminated the BNAF altogether to reflect a 100 percent reduction for FY 2011. For FY 2010, the reduced BNAF or the hospice floor was then applied to the 2008 pre-floor, pre-reclassified hospital wage index as described previously. For FY 2011 and subsequent years, the pre-floor, pre-reclassified hospital wage index values would be unadjusted unless they are less than 0.8, in which case the hospice floor calculation would be applied. For our simulations, the calculations of the BNAF are as follows: A 75 percent reduction to the BNAF in FY 2010 would be 0.066671 × 0.25 = 0.016668 or 1.6668 percent
                A 100 percent reduction or elimination of the BNAF in FY 2011 would be 0.066671 × 0.0 = 0.0 or 0 percent We examined the effects of phasing out the BNAF versus using the full BNAF of 6.6671 percent on the FY 2008 hospice wage index. The FY 2009 BNAF reduction of 25 percent resulted in approximately a 1.55 to 1.57 percent reduction in the hospice wage index value. The FY 2010 BNAF reduction of 75 percent would result in an estimated additional 3.12 to 3.13 percent reduction from the FY 2009 hospice wage index values. The elimination of the BNAF in FY 2011 would result in an estimated final reduction of the FY 2011 hospice wage index values of approximately 1.55 to 1.57 percent compared to FY 2010 hospice wage index values. Those CBSAs whose pre-floor, pre-reclassified hospital wage index values had the hospice floor calculation applied prior to the BNAF reduction would not be affected by this proposed phase-out of the BNAF. These CBSAs, which typically include rural areas, are protected by the hospice floor calculation. Additionally, those CBSAs whose hospice wage index values were previously 0.8 or greater after the BNAF was applied, but which would have values less than 0.8 after the reduced BNAF was applied would see a smaller reduction in their hospice wage index values since the hospice floor calculation would apply. We have estimated the number of CBSAs that would have their pre-floor, pre-reclassified hospital wage index value eligible for the floor calculation after applying the 25, 75, and 100 percent reductions in the BNAF. Three CBSAs would be affected by the 25 percent reduction, 12 would be affected by the 75 percent reduction, and 22 would be affected by the 100 percent reduction. Because of the protection given by the hospice floor calculation, these CBSAs would see smaller percentage decreases in their hospice wage index values than those CBSAs that are not eligible for the floor calculation. This will benefit those hospices with lower hospice wage index values, which are typically in rural areas. Finally, the hospice wage index values only apply to the labor portion of the payment rates; the labor portion was described in Section I.B.1 of this proposed rule. Therefore the estimated reduction in payments due to this proposed phase-out of the BNAF would be less than the percentage reductions to the hospice wage index values that would result from reducing or eliminating the BNAF. In addition, the effects of the proposed phase-out of the BNAF could also be mitigated by a hospital market basket update in payments, which in FY 2008 was a 3.3 percent increase in payment rates. We will not have the final market basket update for FY 2009 until the summer, but the current estimate of the hospital market basket update is expected to be around 3.0 percent. This update will be communicated through an administrative instruction and not through rulemaking. The estimated effects on payment described in column 5 of Table 1 in section IV.B of this proposed rule include the projected effect of an estimated 3.0 percent hospital market basket update. CMS may implement updates to the payment rates in future rulemaking. 
                    ( print page 24008) b. Effects of Phasing-Out the BNAF Using the Updated Pre-floor, Pre-reclassified Hospital Wage Index Data (FY 2009 Proposal) For FY 2009, we propose updating the hospice wage index using the 2008 pre-floor, pre-reclassified hospital wage index and the most complete claims data available (FY 2006 claims). Using these data, we computed a full BNAF of 6.5357 percent. For the first year of the BNAF phase-out (FY 2009), the BNAF would be reduced by 25 percent, or 0.065357 × 0.75 = 0.049018, to 4.9018 percent. This would decrease hospice wage index values by approximately 1.53 to 1.54 percent from wage index values with the full BNAF applied. As noted in the previous discussion on the effects of the BNAF reduction in the published FY 2008 hospice wage index, those CBSAs which already have pre-floor, pre-reclassified hospital wage index values that have the hospice floor applied prior to implementing a proposed BNAF reduction would be completely unaffected by this proposed BNAF reduction. Those CBSAs which previously had hospice wage index values above 0.8 after applying the full BNAF, but which now are below 0.8 with the 25 percent reduction in the BNAF would be less affected by the BNAF reduction than those CBSAs which are 0.8 or above after applying the BNAF, as they are protected by the hospice floor calculation. Additionally, as mentioned in section I.B.1 of this proposed rule, the final hospice wage index is only applied to the labor portion of the payment rates, so the actual effect on estimated payment would be less than the anticipated 1.53 to 1.54 percent reduction in the hospice wage index value. Furthermore, that effect may be mitigated by a market basket update. As noted earlier, the market basket update will not be available until the summer, but estimates of the update are at about 3.0 percent. Column 3 of Table 1 (section IV of this proposed rule) shows the impact of using the most recent wage index data (the 2008 pre-floor, pre-reclassified hospital wage index not including any reclassification under section 1886(d)(8)(B) of the Act) compared to the 2007 pre-floor, pre-reclassified hospital wage index data which was used to derive the FY 2008 hospice wage index. Column 4 of Table 1 in Section IV of this proposed rule shows the impact of incorporating the 25 percent reduction in the BNAF in the proposed FY 2009 hospice wage index along with using the most recent wage index data (2008 pre-floor, pre-reclassified hospital wage index). Finally, column 5 of Table 1 shows the combined effects of using the updated pre-floor, pre-reclassified hospital wage index, the 25 percent reduced BNAF, and an estimated market basket update of 3.0 percent. The proposed FY 2009 rural and urban hospice wage indexes can be found in Addenda A and B of this proposed rule. The pre-floor, pre-reclassified hospital wage index values were adjusted by the 25 percent reduced BNAF or by the hospice floor. D. Summary of the Provisions of the Proposed Rule We propose to clarify that the hospice benefit will follow the definition of “urban” specified in § 412.64(b)(1)(ii)(A) and (B), and the rural definition as any area outside of an urban area in § 412.64(b)(1)(ii)(C). The regulatory text of § 418.306(c) will be amended to reference § 412.64(b)(1)(ii)(A) through (C). This affects two New England “deemed” counties that meet the OMB definition of rural, but were previously counted as urban; these two counties would now be considered rural. See section II.A of this proposed rule for details.
                As a basis for the hospice wage index, we propose to continue to use the pre-floor, pre-reclassified hospital wage index, which includes a change to how wage data from multi-campus hospitals are apportioned. See section II.B of this proposed rule for more details.
                We propose to continue to use a pre-floor, pre-reclassified hospital wage index based solely on the CBSA designations, using the most recent pre-floor and pre-reclassified hospital wage index available at the time of publication. See section II.C.1 of this proposed rule for details.
                We propose to continue the policy that for urban labor markets without an urban hospital from which a pre-floor, pre-reclassified hospital wage index could be derived, all of the urban CBSA pre-floor, pre-reclassified hospital wage index values within the State would be used to calculate a statewide urban average pre-floor, pre-reclassified hospital wage index to use as a reasonable proxy for these areas. See section II.C.2 of this proposed rule for details.
                We propose to continue the policy that we impute an average pre-floor, pre-reclassified rural hospital wage index value by averaging the pre-floor, pre-reclassified hospital wage index values from contiguous CBSAs as a reasonable proxy for rural areas with no hospital wage data from which to calculate a pre-floor, pre-reclassified hospital wage index. See section II.C.2 f of this proposed rule or details.
                We propose to continue to utilize the most recent pre-floor, pre-reclassified hospital wage index value available for Puerto Rico. See section II.C.2 of this proposed rule for details.
                We propose to phase-out the hospice BNAF over 3 years, reducing it by 25 percent for FY 2009, by 75 percent for FY 2010, and eliminating it completely for FY 2011. See sections II.C.3.a and II.C.3.b of this proposed rule for details. As stated in section II.C.3, based on comments received, updated data, and subsequent analysis, for the final rule we may determine that a different percentage reduction in the BNAF (for any of the years) or a different phase-out timeframe would be more appropriate. Specifically, it may be determined that a more aggressive alternative (e.g., a 50 percent reduction in the BNAF in FY 2009, a 75 percent reduction in the BNAF in FY 2010, and elimination of the BNAF in FY 2011) is more appropriate. Consequently, we will continue to look at reduction percentages and time period alternatives for the phase-out of the BNAF and, for the final rule, will implement what is determined to be the most appropriate option based on the above information.
                We propose to continue to maintain the hospice floor calculation. See section II.C.3 of this proposed rule for details. Addendum A reflects the proposed FY 2009 hospice wage index values for urban areas designations. Addendum B reflects the proposed FY 2009 hospice wage index values for rural areas designations. III. Collection of Information Requirements This document does not impose any information collection and recordkeeping requirements. Consequently, it does not need to be reviewed by the Office of Management and Budget under the authority of the Paperwork Reduction Act of 1995 (44 U.S.C. 35). IV. Regulatory Impact Analysis A. Overall Impact We have examined the impacts of this rule as required by Executive Order 12866 (September 1993, Regulatory Planning and Review), the Regulatory Flexibility Act (RFA) (September 19, 1980, Pub. L. 96-354), section 1102(b) of the Social Security Act, the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4), Executive Order 13132 on Federalism, and the Congressional Review Act (5 U.S.C. 804(2)). We 
                    ( print page 24009)
                    estimated the impact on hospices, as a result of the changes to the proposed FY 2009 hospice wage index and of reducing the BNAF by 25 percent. As discussed previously, the methodology for computing the hospice wage index was determined through a negotiated rulemaking committee and implemented in the August 8, 1997 final rule (62 FR 42860). This rule proposes updates to the hospice wage index in accordance with our regulation but proposes to revise the Negotiated Rulemaking Committee methodology of including a BNAF. Executive Order 12866 (as amended by Executive Order 13258, which merely reassigns responsibility of duties) directs agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits including potential economic, environmental, public health and safety effects, distributive impacts, and equity. A regulatory impact analysis (RIA) must be prepared for major rules with economically significant effects ($100 million or more in any 1 year). We have determined that this proposed rule is an economically significant rule under this Executive Order. Column 4 of Table 1 shows the combined effects of the proposed 25 percent reduction in the BNAF and of the updated wage data, comparing estimated payments for FY 2009 to estimated payments for FY 2008. We estimate that the total hospice payments for FY 2009 will decrease by $100 million as a result of the application of the 25 percent reduction in the BNAF and the updated wage data. This estimate does not take into account any market basket update, which is currently forecast to be about 3.0 percent. The final market basket update will not be available until some time later this year and will be communicated through an administrative instruction. The estimated effect of a 3.0 percent forecasted market basket update on payments to hospices is approximately $280 million. If we were to take into account an estimated 3.0 percent market basket update, in addition to the 25 percent reduction in the BNAF and the updated wage data, it is estimated that hospice payments would increase by approximately $180 million ($280 million − $100 million = $180 million). The percent change in payments to hospices due to the combined effects of the 25 percent reduction in the BNAF, the updated wage data, and the estimated market basket update of 3.0 percent is reflected in column 5 of the impact table (Table 1). 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. The great majority of hospices and most other providers and suppliers are small entities, either by nonprofit status or by having revenues of less than $6.5 million to $31.5 million in any one year (for details, see the Small Business Administration's regulation at 65 FR 69432, that sets forth size standards for health care industries). As indicated in Table 1 below, there are 2,986 hospices as of February 2008. Approximately 52.7 percent of Medicare certified hospices are identified as voluntary, government, or other agencies and, therefore, are considered small entities. Most of these and most of the remainder are also small hospice entities because their revenues fall below the SBA size thresholds. We note that the hospice wage index methodology was previously guided by consensus, through a negotiated rulemaking committee that included representatives of national hospice associations, rural, urban, large and small hospices, multi-site hospices, and consumer groups. Based on all of the options considered, the committee agreed on the methodology described in the committee statement, and after notice and comment, it was adopted into regulation in the August 8, 1997 final rule. In developing the process for updating the hospice wage index in the 1997 final rule, we considered the impact of this methodology on small hospice entities and attempted to mitigate any potential negative effects. Small hospice entities are more likely to be in rural areas, which are less affected by the BNAF reduction than entities in urban areas. Generally, hospices in rural areas are protected by the hospice floor, which mitigates the effect of the BNAF reduction. The effects of this rule on hospices, as illustrated in Table 1, are small. Overall, Medicare payments to all hospices will decrease by an estimated 1.1 percent, reflecting the combined effects of the 25 percent reduction in the BNAF and the updated wage data. Within the hospice subgroups, Medicare payments will decrease by no more than 1.6 percent. Furthermore, when including the estimated market basket update of 3.0 percent into these figures, the combined effects of Medicare payment changes to all hospices will result in an increase of approximately 1.9 percent. Overall average hospice revenue effects will be slightly less than these estimates since according the National Hospice and Palliative Care Organization, about 16 percent of hospice caseload is non-Medicare. Longstanding HHS practice in interpreting the RFA is to consider effects economically “significant” only if they reach a threshold of 3 to 5 percent or more. Accordingly, we have determined that this proposed rule does not create a significant economic impact on a substantial number of small entities. In addition, section 1102(b) of the Act requires us to prepare a regulatory impact analysis if a rule may have a significant impact on the operations of a substantial number of small rural hospitals. This analysis must conform to the provisions of section 604 of the RFA. For purposes of section 1102(b) of the Act, we define a small rural hospital as a hospital that is located outside a CBSA and has fewer than 100 beds. We have determined that this proposed rule will not have a significant impact on the operations of a substantial number of small rural hospitals. Section 202 of the Unfunded Mandates Reform Act of 1995 (UMRA) also requires that agencies assess anticipated costs and benefits before issuing any rule whose mandates require spending in any 1 year of about $130 million or more (the threshold in the statute, updated for inflation through 2008). This proposed rule is not anticipated to have an effect on State, local, or tribal governments or on the private sector of $130 million or more. 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. We have reviewed this proposed rule under the threshold criteria of Executive Order 13132, Federalism, and have determined that it will not have an impact on the rights, roles, and responsibilities of State, local, or tribal governments. B. Anticipated Effects This section discusses the impact of the projected effects of the proposed provisions of this rule, including the estimated effects of a projected 3.0 percent market basket update that will be communicated separately through an administrative instruction. The proposed provisions include continuing to use the CBSA-based pre-floor, pre-reclassified hospital wage index (to include the clarification of New England “deemed” counties and a change in the way that multi-campus hospital wage 
                    ( print page 24010)
                    data are treated in the creation of the pre-floor, pre-reclassified hospital wage index), continuing the use the same policies for treatment of areas (rural and urban) without hospital wage data, and reducing the BNAF by 25 percent for the first year of a 3-year BNAF phase-out. The proposed FY 2009 hospice wage index is based upon the 2008 pre-floor, pre-reclassified hospital wage index and the most complete claims data available (FY 2006) with a 25 percent reduction in the BNAF. For the purposes of our impacts, our baseline is estimated FY 2008 payments using the 2007 pre-floor, pre-reclassified hospital wage index. Our first comparison (column 3, Table 1) compares our baseline to estimated FY 2009 payments (holding payment rates constant) using the updated wage data (2008 pre-floor, pre-reclassified hospital wage index). Consequently, the estimated effects illustrated in column 3 of Table 1 are for the updated wage data only. The effects of using the updated pre-floor, pre-reclassified hospital wage index data combined with the 25 percent reduction in the BNAF are illustrated in column 4 of Table 1. Even though the market basket update is not part of this proposed rule, we have included a comparison of the combined effects of the 25 percent BNAF reduction, the updated pre-floor, pre-reclassified hospital wage index, and an estimated 3.0 percent market basket increase for FY 2009 (Table 1, column 5). Presenting this data gives the hospice industry a more complete picture of the effects of the proposed changes in this rule and the market basket update. Certain events may limit the scope or accuracy of our impact analysis, because such an analysis is susceptible to forecasting errors due to other changes in the forecasted impact time period. The nature of the Medicare program is such that the changes may interact, and the complexity of the interaction of these changes could make it difficult to predict accurately the full scope of the impact upon hospices. Table 1.—Anticipated Impact on Medicare Hospice Payments of Reducing the BNAF, Updating the Pre-Floor, Pre-Reclassified Hospital Wage Index Data, and Applying an Estimated 3.0 Percent Market Basket Update for the Proposed FY 2009 Hospice Wage Index, Compared to the Published Final FY 2008 Hospice Wage Index
Number of hospices*
Number of routine home care days in thousands
Percent change in payments due to the effects of the updated wage data (FY 2009 Proposed Wage Index)
Percent change in payments due to the combined effects of the 25% reduction in the BNAF and the updated wage data (FY 2009 Proposed Wage Index)
Percent change in payments due to the combined effects of the 25% reduction in the BNAF, the updated wage data (FY 2009 Proposed Wage Index), and estimated market basket update (3.0%)(1)
(2)
(3)
(4)
(5)ALL HOSPICES
2,986
61,351
−0.1
−1.1
1.9URBAN HOSPICES
1,996
52,642
−0.1
−1.1
1.8RURAL HOSPICES
990
8,709
−0.1
−0.9
2.1BY REGION—URBAN:NEW ENGLAND
113
1,787
0.3
−0.8
2.2MIDDLE ATLANTIC
201
5,250
−0.5
−1.6
1.4SOUTH ATLANTIC
288
11,388
−0.1
−1.1
1.8EAST NORTH CENTRAL
296
7,638
−0.3
−1.4
1.6EAST SOUTH CENTRAL
160
4,365
−0.4
−1.3
1.7WEST NORTH CENTRAL
152
3,413
0.0
−1.0
1.9WEST SOUTH CENTRAL
339
7,131
−0.2
−1.2
1.7MOUNTAIN
183
4,543
0.0
−1.1
1.9PACIFIC
230
6,330
0.8
−0.4
2.6PUERTO RICO
34
797
−1.1
−1.1
1.9BY REGION—RURAL:NEW ENGLAND
26
147
−0.4
−1.4
1.5MIDDLE ATLANTIC
43
408
0.3
−0.7
2.3SOUTH ATLANTIC
125
1,759
0.0
−0.9
2.0EAST NORTH CENTRAL
140
1,148
0.0
−1.0
1.9EAST SOUTH CENTRAL
145
2,017
−0.4
−1.1
1.8WEST NORTH CENTRAL
189
945
−0.3
−1.3
1.7WEST SOUTH CENTRAL
165
1,325
−0.6
−0.8
2.2MOUNTAIN
104
580
0.4
−0.6
2.4PACIFIC
52
372
1.5
0.4
3.4PUERTO RICO
1
7
0.0
0.0
3.0ROUTINE HOME CARE DAYS:0-3499 DAYS (small)
631
1,060
0.0
−0.9
2.03500-19,999 DAYS (medium)
1,445
14,385
−0.1
−1.1
1.920,000+ DAYS (large)
910
45,906
−0.1
−1.1
1.9TYPE OF OWNERSHIP:VOLUNTARY
1,194
27,185
−0.2
−1.2
1.8PROPRIETARY
1,412
30,017
0.0
−1.0
1.9GOVERNMENT
192
986
0.1
−0.8
2.2OTHER
188
3,163
0.0
−1.0
2.0HOSPICE BASE:FREESTANDING
1,807
45,473
−0.1
−1.1
1.8HOME HEALTH AGENCY
597
8,908
0.0
−1.0
2.0HOSPITAL
567
6,756
0.0
−1.1
1.9( print page 24011)SKILLED NURSING FACILITY
15
213
−0.6
−1.7
1.2BNAF = Budget Neutrality Adjustment Factor.* As of February 2008.
 Table 1 shows the results of our analysis. In column 1, we indicate the number of hospices included in our analysis as of February 2008. In column 2, we indicate the number of routine home care days that were included in our analysis, although the analysis was performed on all types of hospice care. Column 3 shows the percentage change in estimated Medicare payments from FY 2008 to FY 2009 due to the effects of the updated wage data only. Column 4 shows the percentage change in estimated hospice payments from FY 2008 to FY 2009 due to the combined effects of using the 2008 pre-floor, pre-reclassified hospital wage index and reducing the BNAF by 25 percent. Column 5 shows the percentage change in estimated hospice payments from FY 2008 to FY 2009 due to the combined effects of using updated wage data, a 25 percent BNAF reduction, and a 3.0 percent estimated market basket update. Table 1 also categorizes hospices by various geographic and provider characteristics. The first row of data displays the aggregate result of the impact for all Medicare-certified hospices. The second and third rows of the table categorize hospices according to their geographic location (urban and rural). Our analysis indicated that there are 1,996 hospices located in urban areas and 990 hospices located in rural areas. The next two row groupings in the table indicate the number of hospices by census region, also broken down by urban and rural hospices. The next grouping shows the impact on hospices based on the size of the hospice's program. We determined that the majority of hospice payments are made at the routine home care rate. Therefore, we based the size of each individual hospice's program on the number of routine home care days provided in FY 2006. The next grouping shows the impact on hospices by type of ownership. The final grouping shows the impact on hospices defined by whether they are provider-based or freestanding. As indicated in Table 1 below, there are 2,986 hospices. Approximately 52.7 percent of Medicare-certified hospices are identified as voluntary, government, or other agencies and, therefore, are considered small entities. Because the National Hospice and Palliative Care Organization estimates that approximately 83.7 percent of hospice patients are Medicare beneficiaries, we have not considered other sources of revenue in this analysis. As noted earlier, those CBSAs which had the hospice floor applied prior to our proposal to reduce the BNAF are unaffected by this proposed change in methodology. Those CBSAs that were not previously less than 0.8 after applying the full BNAF but which now are less than 0.8 after applying the reduced BNAF will see less of a reduction in payments as the floor protects their hospice wage index value. As stated previously, the following discussions are limited to demonstrating trends rather than projected dollars. We used the pre-floor, pre-reclassified hospital wage indexes as well as the most complete claims data available (FY 2006) in developing the impact analysis. The FY 2009 payment rates will be adjusted to reflect the full hospital market basket, as required by section 1814(i)(1)(C)(ii)(VII) of the Act. As previously noted, we publish these rates through administrative instructions rather than in a proposed rule. The FY 2008 update was 3.3 percent, and the FY 2009 update will not be available until the summer. Currently the FY 2009 update is estimated to be 3.0 percent; however this figure is subject to change. Since the inclusion of the effect of a market basket increase provides a more complete picture of estimated hospice payments for FY 2009, the last column of Table 1 shows the combined impacts of the 25 percent BNAF reduction, the updated wage index, and a projected 3.0 percent market basket update factor. As discussed in the FY 2006 final rule (70 FR 45129), hospice agencies may use multiple hospice wage index values to compute their payments based on potentially different geographic locations. Before January 1, 2008, the location of the beneficiary was used to determine the CBSA for routine and continuous home care and the location of the hospice agency was used to determine the CBSA for respite and general inpatient care. Beginning January 1, 2008, the hospice wage index utilized is based on the location of the site of service. As the location of the beneficiary's home and the location of the facility may vary, there will still be variability in geographic location for an individual hospice. We anticipate that the location of the various sites will usually correspond with the geographic location of the hospice, and thus we will continue to use the location of the hospice for our analyses of the impact of the proposed changes to the hospice wage index in this rule. For this analysis, we use payments to the hospice in the aggregate based on the location of the hospice. The impact of hospice wage index changes has been analyzed according to the type of hospice, geographic location, type of ownership, hospice base, and size. Our analysis shows that most hospices are in urban areas and provide the vast majority of routine home care days. Most hospices are medium-sized 
                    ( print page 24012)
                    followed by large hospices. Hospices are almost equal in numbers by ownership with 1,574 designated as non-profit and 1,412 as proprietary. The vast majority of hospices are freestanding. 1. Hospice Size Under the Medicare hospice benefit, hospices can provide four different levels of care days. The majority of the days provided by a hospice are routine home care (RHC) days representing about 97 percent of the services provided by a hospice. Therefore, the number of RHC days can be used as a proxy for the size of the hospice, that is, the more days of care provided, the larger the hospice. As discussed in the August 4, 2005 final rule, we currently use three size designations to present the impact analyses. The three categories are: (1) Small agencies having 0 to 3,499 RHC days; (2) medium agencies having 3,500 to 19,999 RHC days; and (3) large agencies having 20,000 or more RHC days. The proposed FY 2009 wage index values without the BNAF reduction are anticipated to have virtually no impact on small hospice providers, with a slight decrease of 0.1 percent anticipated for medium and large hospices (column 3); the proposed FY 2009 wage index values with the 25 percent BNAF reduction and the updated wage data are anticipated to decrease estimated payments by 0.9 percent to small hospices and by 1.1 percent to medium and large hospices (column 4); and finally, the proposed FY 2009 wage index values with the 25 percent BNAF reduction, the updated wage data, and the estimated 3.0 percent market basket update are projected to increase estimated payments by 2.0 percent for small hospices and by 1.9 percent for medium and large hospices (column 5). 2. Geographic Location Column 3 of Table 1 shows that FY 2009 wage index values without the BNAF reduction will result in little change in estimated payments with rural and urban hospices anticipated to experience a slight decrease of 0.1 percent. For urban hospices, the greatest increase of 0.8 percent is anticipated to be experienced by the Pacific regions, followed by an increase for New England of 0.3 percent and no change for the West North Central and Mountain regions. The remaining urban regions are anticipated to experience a decrease ranging from 0.1 percent in the South Atlantic region 1.1 percent is for Puerto Rico. Column 3 shows that for rural hospices, Puerto Rico, the South Atlantic, and the East North Central regions are anticipated to experience no change. Four regions are anticipated to experience a decrease ranging from 0.3 percent for the West North Central region to 0.6 percent for West South Central region. The remaining regions are anticipated to experience an increase ranging from 0.3 percent for the Middle Atlantic region to 1.5 percent for the Pacific region. Column 4 shows the combined effect of the 25 percent BNAF reduction and the updated pre-floor, pre-reclassified hospital wage index values on estimated payments, as compared to the published FY 2008 payments. Overall urban hospices are anticipated to experience a 1.1 percent decrease in payments, while rural hospices expect a 0.9 percent decrease. The estimated percent decrease in payment for urban hospices ranged from 0.4 percent for Pacific hospices to 1.6 percent for Middle Atlantic hospices. The estimated percent decrease in payment for rural hospices ranged from 0.6 percent for Mountain hospices to 1.4 percent for New England hospices. Rural Puerto Rico's estimated payments were unaffected, and the Pacific region saw a 0.4 percent increase in estimated payments. Column 5 shows the combined effects of the proposed FY 2009 wage index values with the 25 percent BNAF reduction, the updated wage data, and the estimated 3.0 percent market basket update on estimated payments as compared to the published FY 2008 payments. Overall, urban hospices are anticipated to experience a 1.8 percent increase in payments while rural hospices should experience a 2.1 percent increase in payments. Urban hospices are anticipated to see an increase in estimated payments ranging from 1.4 percent for the Middle Atlantic region to 2.6 percent for the Pacific region. Rural hospices are estimated to see an increase in estimated payments ranging from 1.5 percent for the New England region to 3.4 percent for the Pacific region. 3. Type of Ownership Column 3 demonstrates the effect of the updated pre-floor, pre-reclassified hospital wage index on FY 2009 estimated payments versus FY 2008 estimated payments. We anticipate that using the updated pre-floor, pre-reclassified hospital wage index data will have no effect on proprietary hospices. While we estimate a slight decrease in estimated payments for voluntary (non-profit) hospices (0.2 percent), other hospices are expected to experience no effect and government hospices are expected to experience a slight increase in payments (0.1 percent). Column 4 demonstrates the combined effects of using updated pre-floor, pre-reclassified hospital wage index data and of incorporating a 25 percent BNAF reduction. Estimated payments to proprietary hospices are anticipated to decrease by 1.0 percent, while voluntary (non-profit), other, and government hospices are anticipated to experience decreases of 1.2 percent, 1.0 percent, and 0.8 percent, respectively. Column 5 shows the combined effects of the updated pre-floor, pre-reclassified hospital wage index values with the 25 percent BNAF reduction, the updated wage data, and the estimated 3.0 percent market basket update on estimated payments, comparing FY 2009 to FY 2008. Estimated FY 2009 payments are anticipated to increase for all hospices, regardless of ownership type. Estimated payments are forecast to increase from 1.8 percent for voluntary hospices to 2.2 percent for government hospices. 4. Hospice Base Column 3 demonstrates the effect of using the updated pre-floor, pre-reclassified hospital wage index values, comparing estimated payments for FY 2009 to FY 2008. Estimated payments are anticipated to decrease by 0.1 percent for freestanding facilities and by 0.6 percent for skilled nursing facilities. Home health and hospital based facilities are anticipated to experience no change in estimated payments. Column 4 shows the combined effects of reducing the BNAF by 25 percent and updating the pre-floor, pre-reclassified hospital wage index values, comparing FY 2009 to FY 2008 estimated payments. Skilled nursing facility based hospices are estimated to see a 1.7 percent decline, while hospital based hospices and freestanding hospices are each anticipated to experience a 1.1 percent decrease in payments. Home health agency based hospices are expected to experience a 1.0 percent decrease. Column 5 shows the combined effects of the 25 percent BNAF reduction, the updated pre-floor, pre-reclassified hospital wage index, and the estimated 3.0 percent market basket update on estimated payments, comparing FY 2009 to FY 2008. Estimated increases in payments range from 1.2 percent for skilled nursing facility based hospices to 2.0 percent for home health agency based hospices. We note that the President's budget includes a proposal for a zero percent payment update for hospices in FY 2009. The impacts outlined in Column 5 of Table 1 in this proposed rule, 
                    ( print page 24013)
                    which include the effects of a 3.0 percent market basket update, would need to change in the final rule to reflect any legislation that the Congress might enact which would affect the market basket update. C. Accounting Statement As required by OMB Circular A-4 (available at 
                    *http://www.whitehouse.gov/​omb/​circulars/​a004/​a-4.pdf*), in Table 2 below, we have prepared an accounting statement showing the classification of the expenditures associated with the proposed provisions of this rule. This table provides our best estimate of the decrease in Medicare payments under the hospice benefit as a result of the changes presented in this proposed rule on data for 2,086 hospices in our database. All expenditures are classified as transfers to Medicare providers (that is, hospices). Table 2.—Accounting Statement: Classification of Estimated Expenditures, From FY 2008 to FY 2009 [In millions]
Category
TransfersAnnualized Monetized Transfers
$-100*
                            .From Whom to Whom
Federal Government to Hospices.*
                        The $100 million reduction in transfers includes the 25 percent reduction in the BNAF and the updated wage data. It does not include the market basket update, which is currently forecast to be about 3.0%.
 In accordance with the provisions of Executive Order 12866, this regulation was reviewed by the Office of Management and Budget. List of Subjects in 42 CFR Part 418 Health facilities
Health professions
Medicare, and Reporting and recordkeeping requirements
 For the reasons set forth in the preamble, the Centers for Medicare and Medicare Services proposes to amend 42 CFR chapter IV as set forth below: PART 418—HOSPICE CARE 1. The authority citation for part 418 continues to read as follows: Authority:
                        Secs 1102 and 1871 of the Social Security Act (42 U.S.C. 1302 and 1395hh). Subpart G—Payment for Hospice Care
 2. Section § 418.306 is amended by revising paragraph (c) to read as follows: § 418.306
  
 (c) Each hospice's labor market is determined based on definitions of Metropolitan Statistical Areas (MSAs) issued by OMB. CMS will issue annually, in the 
                            **Federal Register**
                            , a hospice wage index based on the most current available CMS hospital wage data, including changes to the definition of MSAs. The urban and rural area geographic classifications are defined in § 412.64(b)(1)(ii)(A) through (C) of this chapter. The payment rates established by CMS are adjusted by the intermediary to reflect local differences in wages according to the revised wage data. 
 (Catalog of Federal Domestic Assistance Program No. 93.773, Medicare—Hospital Insurance; and Program No. 93.774, Medicare—Supplementary Medical Insurance Program) Note: The following addendums will not appear in the Code of Federal Regulations.
 Dated: March 14, 2008. Kerry Weems, Acting Administrator, Centers for Medicare & Medicaid Services. Approved: April 7, 2008. Michael O. Leavitt, Secretary.
 Addendum A.—Proposed Hospice Wage Index for Urban Areas by CBSA—FY 2009
CBSA code
Urban area (constituent counties) 2
Wage index 110180
Abilene, TX
0.8347Callahan County, TXJones County, TXTaylor County, TX10380
Aguadilla-Isabela-San Sebastián, PR
0.3965Aguada Municipio, PRAguadilla Municipio, PRAñasco Municipio, PRIsabela Municipio, PRLares Municipio, PRMoca Municipio, PRRincón Municipio, PRSan Sebastián Municipio, PR10420
Akron, OH
0.9225Portage County, OHSummit County, OH10500
Albany, GA
0.8931Baker County, GADougherty County, GALee County, GATerrell County, GAWorth County, GA10580
Albany-Schenectady-Troy, NY
0.9009Albany County, NYRensselaer County, NYSaratoga County, NYSchenectady County, NY( print page 24014)Schoharie County, NY10740
Albuquerque, NM
1.0022Bernalillo County, NMSandoval County, NMTorrance County, NMValencia County, NM10780
Alexandria, LA
0.8370Grant Parish, LARapides Parish, LA10900
Allentown-Bethlehem-Easton, PA-NJ
1.0349Warren County, NJCarbon County, PALehigh County, PANorthampton County, PA11020
Altoona, PA
0.9040Blair County, PA11100
Amarillo, TX
0.9563Armstrong County, TXCarson County, TXPotter County, TXRandall County, TX11180
Ames, IA
1.0538Story County, IA11260
Anchorage, AK
1.2497Anchorage Municipality, AKMatanuska-Susitna Borough, AK11300
Anderson, IN
0.9260Madison County, IN11340
Anderson, SC
0.9531Anderson County, SC11460
Ann Arbor, MI
1.1056Washtenaw County, MI11500
Anniston-Oxford, AL
0.8315Calhoun County, AL11540
Appleton, WI
1.0068Calumet County, WIOutagamie County, WI11700
Asheville, NC
0.9635Buncombe County, NCHaywood County, NCHenderson County, NCMadison County, NC12020
Athens-Clarke County, GA
1.1033Clarke County, GAMadison County, GAOconee County, GAOglethorpe County, GA12060
Atlanta-Sandy Springs-Marietta, GA
1.0310Barrow County, GABartow County, GAButts County, GACarroll County, GACherokee County, GAClayton County, GACobb County, GACoweta County, GADawson County, GADeKalb County, GADouglas County, GAFayette County, GAForsyth County, GAFulton County, GAGwinnett County, GAHaralson County, GAHeard County, GAHenry County, GAJasper County, GALamar County, GAMeriwether County, GANewton County, GAPaulding County, GA( print page 24015)Pickens County, GAPike County, GARockdale County, GASpalding County, GAWalton County, GA12100
Atlantic City, NJ
1.2796Atlantic County, NJ12220
Auburn-Opelika, AL
0.8487Lee County, AL12260
Augusta-Richmond County, GA-SC
1.0118Burke County, GAColumbia County, GAMcDuffie County, GARichmond County, GAAiken County, SCEdgefield County, SC12420
Austin-Round Rock, TX
1.0012Bastrop County, TXCaldwell County, TXHays County, TXTravis County, TXWilliamson County, TX12540
Bakersfield, CA
1.1593Kern County, CA12580
Baltimore-Towson, MD
1.0631Anne Arundel County, MDBaltimore County, MDCarroll County, MDHarford County, MDHoward County, MDQueen Anne's County, MDBaltimore City, MD12620
Bangor, ME
1.0467Penobscot County, ME12700
Barnstable Town, MA
1.3221Barnstable County, MA12940
Baton Rouge, LA
0.8428Ascension Parish, LAEast Baton Rouge Parish, LAEast Feliciana Parish, LAIberville Parish, LALivingston Parish, LAPointe Coupee Parish, LASt. Helena Parish, LAWest Baton Rouge Parish, LAWest Feliciana Parish, LA12980
Battle Creek, MI
1.0678Calhoun County, MI13020
Bay City, MI
0.9333Bay County, MI13140
Beaumont-Port Arthur, TX
0.8949Hardin County, TXJefferson County, TXOrange County, TX13380
Bellingham, WA
1.2036Whatcom County, WA13460
Bend, OR
1.1478Deschutes County, OR13644
Bethesda-Frederick-Gaithersburg, MD
1.1026Frederick County, MDMontgomery County, MD13740
Billings, MT
0.9091Carbon County, MTYellowstone County, MT13780
Binghamton, NY
0.9388Broome County, NYTioga County, NY13820
Birmingham-Hoover, AL
0.9334Bibb County, ALBlount County, ALChilton County, AL( print page 24016)Jefferson County, ALSt. Clair County, ALShelby County, ALWalker County, AL13900
Bismarck, ND
0.8000Burleigh County, NDMorton County, ND13980
Blacksburg-Christiansburg-Radford, VA
0.8594Giles County, VAMontgomery County, VAPulaski County, VARadford City, VA14020
Bloomington, IN
0.9352Greene County, INMonroe County, INOwen County, IN14060
Bloomington-Normal, IL
0.9782McLean County, IL14260
Boise City-Nampa, ID
0.9929Ada County, IDBoise County, IDCanyon County, IDGem County, IDOwyhee County, ID14484
Boston-Quincy, MA
1.2370Norfolk County, MAPlymouth County, MASuffolk County, MA14500
Boulder, CO
1.0937Boulder County, CO14540
Bowling Green, KY
0.8559Edmonson County, KYWarren County, KY14740
Bremerton-Silverdale, WA
1.1438Kitsap County, WA14860
Bridgeport-Stamford-Norwalk, CT
1.3359Fairfield County, CT15180
Brownsville-Harlingen, TX
0.9351Cameron County, TX15260
Brunswick, GA
0.9939Brantley County, GAGlynn County, GAMcIntosh County, GA15380
Buffalo-Niagara Falls, NY
1.0037Erie County, NYNiagara County, NY15500
Burlington, NC
0.9176Alamance County, NC15540
Burlington-South Burlington, VT
1.0134Chittenden County, VTFranklin County, VTGrand Isle County, VT15764
Cambridge-Newton-Framingham, MA
1.1765Middlesex County, MA15804
Camden, NJ
1.0921Burlington County, NJCamden County, NJGloucester County, NJ15940
Canton-Massillon, OH
0.9373Carroll County, OHStark County, OH15980
Cape Coral-Fort Myers, FL
0.9857Lee County, FL16180
Carson City, NV
1.0493Carson City, NV16220
Casper, WY
0.9845Natrona County, WY16300
Cedar Rapids, IA
0.9286Benton County, IAJones County, IALinn County, IA( print page 24017)16580
Champaign-Urbana, IL
0.9852Champaign County, ILFord County, ILPiatt County, IL16620
Charleston, WV
0.8695Boone County, WVClay County, WVKanawha County, WVLincoln County, WVPutnam County, WV16700
Charleston-North Charleston, SC
0.9571Berkeley County, SCCharleston County, SCDorchester County, SC16740
Charlotte-Gastonia-Concord, NC-SC
0.9987Anson County, NCCabarrus County, NCGaston County, NCMecklenburg County, NCUnion County, NCYork County, SC16820
Charlottesville, VA
0.9732Albemarle County, VAFluvanna County, VAGreene County, VANelson County, VACharlottesville City, VA16860
Chattanooga, TN-GA
0.9435Catoosa County, GADade County, GAWalker County, GAHamilton County, TNMarion County, TNSequatchie County, TN16940
Cheyenne, WY
0.9764Laramie County, WY16974
Chicago-Naperville-Joliet, IL
1.1240Cook County, ILDeKalb County, ILDuPage County, ILGrundy County, ILKane County, ILKendall County, ILMcHenry County, ILWill County, IL17020
Chico, CA
1.1843Butte County, CA17140
Cincinnati-Middletown, OH-KY-IN
1.0264Dearborn County, INFranklin County, INOhio County, INBoone County, KYBracken County, KYCampbell County, KYGallatin County, KYGrant County, KYKenton County, KYPendleton County, KYBrown County, OHButler County, OHClermont County, OHHamilton County, OHWarren County, OH17300
Clarksville, TN-KY
0.8655Christian County, KYTrigg County, KYMontgomery County, TNStewart County, TN17420
Cleveland, TN
0.8447Bradley County, TNPolk County, TN( print page 24018)17460
Cleveland-Elyria-Mentor, OH
0.9797Cuyahoga County, OHGeauga County, OHLake County, OHLorain County, OHMedina County, OH17660
Coeur d'Alene, ID
0.9999Kootenai County, ID17780
College Station-Bryan, TX
0.9817Brazos County, TXBurleson County, TXRobertson County, TX17820
Colorado Springs, CO
1.0195El Paso County, COTeller County, CO17860
Columbia, MO
0.9082Boone County, MOHoward County, MO17900
Columbia, SC
0.9231Calhoun County, SCFairfield County, SCKershaw County, SCLexington County, SCRichland County, SCSaluda County, SC17980
Columbus, GA-AL
0.9157Russell County, ALChattahoochee County, GAHarris County, GAMarion County, GAMuscogee County, GA18020
Columbus, IN
1.0004Bartholomew County, IN18140
Columbus, OH
1.0579Delaware County, OHFairfield County, OHFranklin County, OHLicking County, OHMadison County, OHMorrow County, OHPickaway County, OHUnion County, OH18580
Corpus Christi, TX
0.9009Aransas County, TXNueces County, TXSan Patricio County, TX18700
Corvallis, OR
1.1496Benton County, OR19060
Cumberland, MD-WV
0.8701Allegany County, MDMineral County, WV19124
Dallas-Plano-Irving, TX
1.0401Collin County, TXDallas County, TXDelta County, TXDenton County, TXEllis County, TXHunt County, TXKaufman County, TXRockwall County, TX19140
Dalton, GA
0.9189Murray County, GAWhitfield County, GA19180
Danville, IL
0.9396Vermilion County, IL19260
Danville, VA
0.8644Pittsylvania County, VADanville City, VA19340
Davenport-Moline-Rock Island, IA-IL
0.9263Henry County, ILMercer County, IL( print page 24019)Rock Island County, ILScott County, IA19380
Dayton, OH
0.9640Greene County, OHMiami County, OHMontgomery County, OHPreble County, OH19460
Decatur, AL
0.8272Lawrence County, ALMorgan County, AL19500
Decatur, IL
0.8470Macon County, IL19660
Deltona-Daytona Beach-Ormond Beach, FL
0.9474Volusia County, FL19740
Denver-Aurora, CO
1.1243Adams County, COArapahoe County, COBroomfield County, COClear Creek County, CODenver County, CODouglas County, COElbert County, COGilpin County, COJefferson County, COPark County, CO19780
Des Moines-West Des Moines, IA
0.9678Dallas County, IAGuthrie County, IAMadison County, IAPolk County, IAWarren County, IA19804
Detroit-Livonia-Dearborn, MI
1.0489Wayne County, MI20020
Dothan, AL
0.8000Geneva County, ALHenry County, ALHouston County, AL20100
Dover, DE
1.0594Kent County, DE20220
Dubuque, IA
0.9502Dubuque County, IA20260
Duluth, MN-WI
1.0464Carlton County, MNSt. Louis County, MNDouglas County, WI20500
Durham, NC
1.0297Chatham County, NCDurham County, NCOrange County, NCPerson County, NC20740
Eau Claire, WI
0.9939Chippewa County, WIEau Claire County, WI20764
Edison, NJ
1.1729Middlesex County, NJMonmouth County, NJOcean County, NJSomerset County, NJ20940
El Centro, CA
0.9351Imperial County, CA21060
Elizabethtown, KY
0.9138Hardin County, KYLarue County, KY21140
Elkhart-Goshen, IN
1.0082Elkhart County, IN21300
Elmira, NY
0.8669Chemung County, NY21340
El Paso, TX
0.9430El Paso County, TX21500
Erie, PA
0.8911Erie County, PA( print page 24020)21660
Eugene-Springfield, OR
1.1468Lane County, OR21780
Evansville, IN-KY
0.9087Gibson County, INPosey County, INVanderburgh County, INWarrick County, INHenderson County, KYWebster County, KY21820
Fairbanks, AK
1.1592Fairbanks North Star Borough, AK21940
Fajardo, PR
0.5031Ceiba Municipio, PRFajardo Municipio, PRLuquillo Municipio, PR22020
Fargo, ND-MN
0.8436Cass County, NDClay County, MN22140
Farmington, NM
1.0057San Juan County, NM22180
Fayetteville, NC
0.9827Cumberland County, NCHoke County, NC22220
Fayetteville-Springdale-Rogers, AR-MO
0.9171Benton County, ARMadison County, ARWashington County, ARMcDonald County, MO22380
Flagstaff, AZ
1.2260Coconino County, AZ22420
Flint, MI
1.1770Genesee County, MI22500
Florence, SC
0.8653Darlington County, SCFlorence County, SC22520
Florence-Muscle Shoals, AL
0.8056Colbert County, ALLauderdale County, AL22540
Fond du Lac, WI
1.0141Fond du Lac County, WI22660
Fort Collins-Loveland, CO
1.0382Larimer County, CO22744
Fort Lauderdale-Pompano Beach-Deerfield Beach, FL
1.0730Broward County, FL22900
Fort Smith, AR-OK
0.8322Crawford County, ARFranklin County, ARSebastian County, ARLe Flore County, OKSequoyah County, OK23020
Fort Walton Beach-Crestview-Destin, FL
0.9172Okaloosa County, FL23060
Fort Wayne, IN
0.9739Allen County, INWells County, INWhitley County, IN23104
Fort Worth-Arlington, TX
1.0168Johnson County, TXParker County, TXTarrant County, TXWise County, TX23420
Fresno, CA
1.1532Fresno County, CA23460
Gadsden, AL
0.8559Etowah County, AL23540
Gainesville, FL
0.9647Alachua County, FLGilchrist County, FL23580
Gainesville, GA
0.9668Hall County, GA23844
Gary, IN
0.9676( print page 24021)Jasper County, INLake County, INNewton County, INPorter County, IN24020
Glens Falls, NY
0.8661Warren County, NYWashington County, NY24140
Goldsboro, NC
0.9743Wayne County, NC24220
Grand Forks, ND-MN
0.8267Polk County, MNGrand Forks County, ND24300
Grand Junction, CO
1.0348Mesa County, CO24340
Grand Rapids-Wyoming, MI
0.9772Barry County, MIIonia County, MIKent County, MINewaygo County, MI24500
Great Falls, MT
0.9100Cascade County, MT24540
Greeley, CO
1.0131Weld County, CO24580
Green Bay, WI
1.0204Brown County, WIKewaunee County, WIOconto County, WI24660
Greensboro-High Point, NC
0.9452Guilford County, NCRandolph County, NCRockingham County, NC24780
Greenville, NC
0.9863Greene County, NCPitt County, NC24860
Greenville, SC
1.0343Greenville County, SCLaurens County, SCPickens County, SC25020
Guayama, PR
0.3524Arroyo Municipio, PRGuayama Municipio, PRPatillas Municipio, PR25060
Gulfport-Biloxi, MS
0.9203Hancock County, MSHarrison County, MSStone County, MS25180
Hagerstown-Martinsburg, MD-WV
0.9455Washington County, MDBerkeley County, WVMorgan County, WV25260
Hanford-Corcoran, CA
1.1014Kings County, CA25420
Harrisburg-Carlisle, PA
0.9735Cumberland County, PADauphin County, PAPerry County, PA25500
Harrisonburg, VA
0.9302Rockingham County, VAHarrisonburg City, VA25540
Hartford-West Hartford-East Hartford, CT
1.1496Hartford County, CTMiddlesex County, CTTolland County, CT25620
Hattiesburg, MS
0.8000Forrest County, MSLamar County, MSPerry County, MS25860
Hickory-Lenoir-Morganton, NC
0.9471Alexander County, NCBurke County, NCCaldwell County, NC( print page 24022)Catawba County, NC25980
Hinesville-Fort Stewart, GA 3
0.9637Liberty County, GALong County, GA26100
Holland-Grand Haven, MI
0.9447Ottawa County, MI26180
Honolulu, HI
1.2122Honolulu County, HI26300
Hot Springs, AR
0.9556Garland County, AR26380
Houma-Bayou Cane-Thibodaux, LA
0.8279Lafourche Parish, LATerrebonne Parish, LA26420
Houston-Sugar Land-Baytown, TX
1.0426Austin County, TXBrazoria County, TXChambers County, TXFort Bend County, TXGalveston County, TXHarris County, TXLiberty County, TXMontgomery County, TXSan Jacinto County, TXWaller County, TX26580
Huntington-Ashland, WV-KY-OH
0.9484Boyd County, KYGreenup County, KYLawrence County, OHCabell County, WVWayne County, WV26620
Huntsville, AL
0.9594Limestone County, ALMadison County, AL26820
Idaho Falls, ID
0.9718Bonneville County, IDJefferson County, ID26900
Indianapolis-Carmel, IN
1.0327Boone County, INBrown County, INHamilton County, INHancock County, INHendricks County, INJohnson County, INMarion County, INMorgan County, INPutnam County, INShelby County, IN26980
Iowa City, IA
1.0037Johnson County, IAWashington County, IA27060
Ithaca, NY
1.0102Tompkins County, NY27100
Jackson, MI
0.9786Jackson County, MI27140
Jackson, MS
0.8404Copiah County, MSHinds County, MSMadison County, MSRankin County, MSSimpson County, MS27180
Jackson, TN
0.9101Chester County, TNMadison County, TN27260
Jacksonville, FL
0.9463Baker County, FLClay County, FLDuval County, FLNassau County, FLSt. Johns County, FL27340
Jacksonville, NC
0.8475Onslow County, NC( print page 24023)27500
Janesville, WI
1.0178Rock County, WI27620
Jefferson City, MO
0.8894Callaway County, MOCole County, MOMoniteau County, MOOsage County, MO27740
Johnson City, TN
0.8053Carter County, TNUnicoi County, TNWashington County, TN27780
Johnstown, PA
0.8000Cambria County, PA27860
Jonesboro, AR
0.8172Craighead County, ARPoinsett County, AR27900
Joplin, MO
0.9390Jasper County, MONewton County, MO28020
Kalamazoo-Portage, MI
1.0944Kalamazoo County, MIVan Buren County, MI28100
Kankakee-Bradley, IL
1.0740Kankakee County, IL28140
Kansas City, MO-KS
0.9970Franklin County, KSJohnson County, KSLeavenworth County, KSLinn County, KSMiami County, KSWyandotte County, KSBates County, MOCaldwell County, MOCass County, MOClay County, MOClinton County, MOJackson County, MOLafayette County, MOPlatte County, MORay County, MO28420
Kennewick-Richland-Pasco, WA
1.0569Benton County, WAFranklin County, WA28660
Killeen-Temple-Fort Hood, TX
0.8653Bell County, TXCoryell County, TXLampasas County, TX28700
Kingsport-Bristol-Bristol, TN-VA
0.8033Hawkins County, TNSullivan County, TNBristol City, VAScott County, VAWashington County, VA28740
Kingston, NY
1.0024Ulster County, NY28940
Knoxville, TN
0.8430Anderson County, TNBlount County, TNKnox County, TNLoudon County, TNUnion County, TN29020
Kokomo, IN
1.0061Howard County, INTipton County, IN29100
La Crosse, WI-MN
1.0160Houston County, MNLa Crosse County, WI29140
Lafayette, IN
0.9304Benton County, INCarroll County, INTippecanoe County, IN( print page 24024)29180
Lafayette, LA
0.8651Lafayette Parish, LASt. Martin Parish, LA29340
Lake Charles, LA
0.8158Calcasieu Parish, LACameron Parish, LA29404
Lake County-Kenosha County, IL-WI
1.1123Lake County, ILKenosha County, WI29420
Lake Havasu City - Kingman, AZ
0.9790Mohave County, AZ29460
Lakeland, FL
0.9086Polk County, FL29540
Lancaster, PA
0.9706Lancaster County, PA29620
Lansing-East Lansing, MI
1.0615Clinton County, MIEaton County, MIIngham County, MI29700
Laredo, TX
0.8490Webb County, TX29740
Las Cruces, NM
0.9101Dona Ana County, NM29820
Las Vegas-Paradise, NV
1.2377Clark County, NV29940
Lawrence, KS
0.8630Douglas County, KS30020
Lawton, OK
0.8418Comanche County, OK30140
Lebanon, PA
0.8594Lebanon County, PA30300
Lewiston, ID-WA
0.9917Nez Perce County, IDAsotin County, WA30340
Lewiston-Auburn, ME
0.9644Androscoggin County, ME30460
Lexington-Fayette, KY
0.9642Bourbon County, KYClark County, KYFayette County, KYJessamine County, KYScott County, KYWoodford County, KY30620
Lima, OH
0.9886Allen County, OH30700
Lincoln, NE
1.0544Lancaster County, NESeward County, NE30780
Little Rock-North Little Rock, AR
0.9297Faulkner County, ARGrant County, ARLonoke County, ARPerry County, ARPulaski County, ARSaline County, AR30860
Logan, UT-ID
0.9633Franklin County, IDCache County, UT30980
Longview, TX
0.9144Gregg County, TXRusk County, TXUpshur County, TX31020
Longview, WA
1.1358Cowlitz County, WA31084
Los Angeles-Long Beach-Glendale, CA
1.2348Los Angeles County, CA31140
Louisville, KY-IN
0.9509Clark County, INFloyd County, INHarrison County, INWashington County, IN( print page 24025)Bullitt County, KYHenry County, KYJefferson County, KYMeade County, KYNelson County, KYOldham County, KYShelby County, KYSpencer County, KYTrimble County, KY31180
Lubbock, TX
0.9105Crosby County, TXLubbock County, TX31340
Lynchburg, VA
0.9160Amherst County, VAAppomattox County, VABedford County, VACampbell County, VABedford City, VALynchburg City, VA31420
Macon, GA
1.0009Bibb County, GACrawford County, GAJones County, GAMonroe County, GATwiggs County, GA31460
Madera, CA
0.8465Madera County, CA31540
Madison, WI
1.1471Columbia County, WIDane County, WIIowa County, WI31700
Manchester-Nashua, NH
1.0777Hillsborough County, NH31900
Mansfield, OH
0.9725Richland County, OH32420
Mayaguez, PR
0.4268Hormigueros Municipio, PRMayaguez Municipio, PR32580
McAllen-Edinburg-Pharr, TX
0.9570Hidalgo County, TX32780
Medford, OR
1.0824Jackson County, OR32820
Memphis, TN-MS-AR
0.9703Crittenden County, ARDeSoto County, MSMarshall County, MSTate County, MSTunica County, MSFayette County, TNShelby County, TNTipton County, TN32900
Merced, CA
1.2714Merced County, CA33124
Miami-Miami Beach-Kendall, FL
1.0492Miami-Dade County, FL33140
Michigan City-La Porte, IN
0.9351LaPorte County, IN33260
Midland, TX
1.0508Midland County, TX33340
Milwaukee-Waukesha-West Allis, WI
1.0715Milwaukee County, WIOzaukee County, WIWashington County, WIWaukesha County, WI33460
Minneapolis-St. Paul-Bloomington, MN-WI
1.1637Anoka County, MNCarver County, MNChisago County, MNDakota County, MNHennepin County, MNIsanti County, MN( print page 24026)Ramsey County, MNScott County, MNSherburne County, MNWashington County, MNWright County, MNPierce County, WISt. Croix County, WI33540
Missoula, MT
0.9392Missoula County, MT33660
Mobile, AL
0.8427Mobile County, AL33700
Modesto, CA
1.2548Stanislaus County, CA33740
Monroe, LA
0.8216Ouachita Parish, LAUnion Parish, LA33780
Monroe, MI
0.9875Monroe County, MI33860
Montgomery, AL
0.8484Autauga County, ALElmore County, ALLowndes County, ALMontgomery County, AL34060
Morgantown, WV
0.8729Monongalia County, WVPreston County, WV34100
Morristown, TN
0.8000Grainger County, TNHamblen County, TNJefferson County, TN34580
Mount Vernon-Anacortes, WA
1.1045Skagit County, WA34620
Muncie, IN
0.8617Delaware County, IN34740
Muskegon-Norton Shores, MI
1.0318Muskegon County, MI34820
Myrtle Beach-Conway-North Myrtle Beach, SC
0.9057Horry County, SC34900
Napa, CA
1.5186Napa County, CA34940
Naples-Marco Island, FL
0.9952Collier County, FL34980
Nashville-Davidson—Murfreesboro, TN
1.0164Cannon County, TNCheatham County, TNDavidson County, TNDickson County, TNHickman County, TNMacon County, TNRobertson County, TNRutherford County, TNSmith County, TNSumner County, TNTrousdale County, TNWilliamson County, TNWilson County, TN35004
Nassau-Suffolk, NY
1.3260Nassau County, NYSuffolk County, NY35084
Newark-Union, NJ-PA
1.2443Essex County, NJHunterdon County, NJMorris County, NJSussex County, NJUnion County, NJPike County, PA35300
New Haven-Milford, CT
1.2453New Haven County, CT35380
New Orleans-Metairie-Kenner, LA
0.9333Jefferson Parish, LAOrleans Parish, LA( print page 24027)Plaquemines Parish, LASt. Bernard Parish, LASt. Charles Parish, LASt. John the Baptist Parish, LASt. Tammany Parish, LA35644
New York-Wayne-White Plains, NY-NJ
1.3758Bergen County, NJHudson County, NJPassaic County, NJBronx County, NYKings County, NYNew York County, NYPutnam County, NYQueens County, NYRichmond County, NYRockland County, NYWestchester County, NY35660
Niles-Benton Harbor, MI
0.9589Berrien County, MI35980
Norwich-New London, CT
1.1992New London County, CT36084
Oakland-Fremont-Hayward, CA
1.6454Alameda County, CAContra Costa County, CA36100
Ocala, FL
0.9050Marion County, FL36140
Ocean City, NJ
1.1527Cape May County, NJ36220
Odessa, TX
1.0534Ector County, TX36260
Ogden-Clearfield, UT
0.9441Davis County, UTMorgan County, UTWeber County, UT36420
Oklahoma City, OK
0.9247Canadian County, OKCleveland County, OKGrady County, OKLincoln County, OKLogan County, OKMcClain County, OKOklahoma County, OK36500
Olympia, WA
1.2076Thurston County, WA36540
Omaha-Council Bluffs, NE-IA
1.0030Harrison County, IAMills County, IAPottawattamie County, IACass County, NEDouglas County, NESarpy County, NESaunders County, NEWashington County, NE36740
Orlando, FL
0.9678Lake County, FLOrange County, FLOsceola County, FLSeminole County, FL36780
Oshkosh-Neenah, WI
1.0019Winnebago County, WI36980
Owensboro, KY
0.9076Daviess County, KYHancock County, KYMcLean County, KY37100
Oxnard-Thousand Oaks-Ventura, CA
1.2433Ventura County, CA37340
Palm Bay-Melbourne-Titusville, FL
0.9782Brevard County, FL37380
Palm Coast, FL
0.9383Flagler County, FL37460
Panama City-Lynn Haven, FL
0.8720( print page 24028)Bay County, FL37620
Parkersburg-Marietta, WV-OH
0.8502Washington County, OHPleasants County, WVWirt County, WVWood County, WV37700
Pascagoula, MS
0.9071George County, MSJackson County, MS37764
Peabody, MA
1.1172Essex County, MA37860
Pensacola-Ferry Pass-Brent, FL
0.8687Escambia County, FLSanta Rosa County, FL37900
Peoria, IL
0.9755Marshall County, ILPeoria County, ILStark County, ILTazewell County, ILWoodford County, IL37964
Philadelphia, PA
1.1461Bucks County, PAChester County, PADelaware County, PAMontgomery County, PAPhiladelphia County, PA38060
Phoenix-Mesa-Scottsdale, AZ
1.0767Maricopa County, AZPinal County, AZ38220
Pine Bluff, AR
0.8223Cleveland County, ARJefferson County, ARLincoln County, AR38300
Pittsburgh, PA
0.8943Allegheny County, PAArmstrong County, PABeaver County, PAButler County, PAFayette County, PAWashington County, PAWestmoreland County, PA38340
Pittsfield, MA
1.0586Berkshire County, MA38540
Pocatello, ID
0.9929Bannock County, IDPower County, ID38660
Ponce, PR
0.5118Juana Díaz Municipio, PRPonce Municipio, PRVillalba Municipio, PR38860
Portland-South Portland-Biddeford, ME
1.0534Cumberland County, MESagadahoc County, MEYork County, ME38900
Portland-Vancouver-Beaverton, OR-WA
1.2062Clackamas County, ORColumbia County, ORMultnomah County, ORWashington County, ORYamhill County, ORClark County, WASkamania County, WA38940
Port St. Lucie—Fort Pierce, FL
1.0507Martin County, FLSt. Lucie County, FL39100
Poughkeepsie-Newburgh-Middletown, NY
1.1520Dutchess County, NYOrange County, NY39140
Prescott, AZ
1.0511Yavapai County, AZ39300
Providence-New Bedford-Fall River, RI-MA
1.1092( print page 24029)Bristol County, MABristol County, RIKent County, RINewport County, RIProvidence County, RIWashington County, RI39340
Provo-Orem, UT
1.0025Juab County, UTUtah County, UT39380
Pueblo, CO
0.9285Pueblo County, CO39460
Punta Gorda, FL
0.9708Charlotte County, FL39540
Racine, WI
0.9964Racine County, WI39580
Raleigh-Cary, NC
1.0321Franklin County, NCJohnston County, NCWake County, NC39660
Rapid City, SD
0.9243Meade County, SDPennington County, SD39740
Reading, PA
0.9815Berks County, PA39820
Redding, CA
1.4205Shasta County, CA39900
Reno-Sparks, NV
1.1240Storey County, NVWashoe County, NV40060
Richmond, VA
0.9887Amelia County, VACaroline County, VACharles City County, VAChesterfield County, VACumberland County, VADinwiddie County, VAGoochland County, VAHanover County, VAHenrico County, VAKing and Queen County, VAKing William County, VALouisa County, VANew Kent County, VAPowhatan County, VAPrince George County, VASussex County, VAColonial Heights City, VAHopewell City, VAPetersburg City, VARichmond City, VA40140
Riverside-San Bernardino-Ontario, CA
1.1644Riverside County, CASan Bernardino County, CA40220
Roanoke, VA
0.9117Botetourt County, VACraig County, VAFranklin County, VARoanoke County, VARoanoke City, VASalem City, VA40340
Rochester, MN
1.1282Dodge County, MNOlmsted County, MNWabasha County, MN40380
Rochester, NY
0.9292Livingston County, NYMonroe County, NYOntario County, NYOrleans County, NYWayne County, NY40420
Rockford, IL
1.0295( print page 24030)Boone County, ILWinnebago County, IL40484
Rockingham County-Strafford County, NH
1.0607Rockingham County, NHStrafford County, NH40580
Rocky Mount, NC
0.9442Edgecombe County, NCNash County, NC40660
Rome, GA
0.9485Floyd County, GA40900
Sacramento—Arden-Arcade—Roseville, CA
1.4167El Dorado County, CAPlacer County, CASacramento County, CAYolo County, CA40980
Saginaw-Saginaw Township North, MI
0.9244Saginaw County, MI41060
St. Cloud, MN
1.1066Benton County, MNStearns County, MN41100
St. George, UT
0.9817Washington County, UT41140
St. Joseph, MO-KS
0.9191Doniphan County, KSAndrew County, MOBuchanan County, MODeKalb County, MO41180
St. Louis, MO-IL
0.9466Bond County, ILCalhoun County, ILClinton County, ILJersey County, ILMacoupin County, ILMadison County, ILMonroe County, ILSt. Clair County, ILCrawford County, MOFranklin County, MOJefferson County, MOLincoln County, MOSt. Charles County, MOSt. Louis County, MOWarren County, MOWashington County, MOSt. Louis City, MO41420
Salem, OR
1.1090Marion County, ORPolk County, OR41500
Salinas, CA
1.5499Monterey County, CA41540
Salisbury, MD
0.9435Somerset County, MDWicomico County, MD41620
Salt Lake City, UT
0.9860Salt Lake County, UTSummit County, UTTooele County, UT41660
San Angelo, TX
0.9000Irion County, TXTom Green County, TX41700
San Antonio, TX
0.9267Atascosa County, TXBandera County, TXBexar County, TXComal County, TXGuadalupe County, TXKendall County, TXMedina County, TXWilson County, TX41740
San Diego-Carlsbad-San Marcos, CA
1.2055San Diego County, CA( print page 24031)41780
Sandusky, OH
0.9254Erie County, OH41884
San Francisco-San Mateo-Redwood City, CA
1.5940Marin County, CASan Francisco County, CASan Mateo County, CA41900
San Germán-Cabo Rojo, PR
0.5438Cabo Rojo Municipio, PRLajas Municipio, PRSabana Grande Municipio, PRSan Germán Municipio, PR41940
San Jose-Sunnyvale-Santa Clara, CA
1.6506San Benito County, CASanta Clara County, CA41980
San Juan-Caguas-Guaynabo, PR
0.5207Aguas Buenas Municipio, PRAibonito Municipio, PRArecibo Municipio, PRBarceloneta Municipio, PRBarranquitas Municipio, PRBayamón Municipio, PRCaguas Municipio, PRCamuy Municipio, PRCanóvanas Municipio, PRCarolina Municipio, PRCataño Municipio, PRCayey Municipio, PRCiales Municipio, PRCidra Municipio, PRComerío Municipio, PRCorozal Municipio, PRDorado Municipio, PRFlorida Municipio, PRGuaynabo Municipio, PRGurabo Municipio, PRHatillo Municipio, PRHumacao Municipio, PRJuncos Municipio, PRLas Piedras Municipio, PRLoíza Municipio, PRManatí Municipio, PRMaunabo Municipio, PRMorovis Municipio, PRNaguabo Municipio, PRNaranjito Municipio, PROrocovis Municipio, PRQuebradillas Municipio, PRRío Grande Municipio, PRSan Juan Municipio, PRSan Lorenzo Municipio, PRToa Alta Municipio, PRToa Baja Municipio, PRTrujillo Alto Municipio, PRVega Alta Municipio, PRVega Baja Municipio, PRYabucoa Municipio, PR42020
San Luis Obispo-Paso Robles, CA
1.3100San Luis Obispo County, CA42044
Santa Ana-Anaheim-Irvine, CA
1.2343Orange County, CA42060
Santa Barbara-Santa Maria-Goleta, CA
1.2288Santa Barbara County, CA42100
Santa Cruz-Watsonville, CA
1.6912Santa Cruz County, CA42140
Santa Fe, NM
1.1260Santa Fe County, NM42220
Santa Rosa-Petaluma, CA
1.5416Sonoma County, CA42260
Sarasota-Bradenton-Venice, FL
1.0420Manatee County, FLSarasota County, FL( print page 24032)42340
Savannah, GA
0.9579Bryan County, GAChatham County, GAEffingham County, GA42540
Scranton—Wilkes-Barre, PA
0.8872Lackawanna County, PALuzerne County, PAWyoming County, PA42644
Seattle-Bellevue-Everett, WA
1.2139King County, WASnohomish County, WA42680
Sebastian-Vero Beach, FL
0.9873Indian River County, FL43100
Sheboygan, WI
0.9415Sheboygan County, WI43300
Sherman-Denison, TX
0.8728Grayson County, TX43340
Shreveport-Bossier City, LA
0.8891Bossier Parish, LACaddo Parish, LADe Soto Parish, LA43580
Sioux City, IA-NE-SD
0.9704Woodbury County, IADakota County, NEDixon County, NEUnion County, SD43620
Sioux Falls, SD
1.0032Lincoln County, SDMcCook County, SDMinnehaha County, SDTurner County, SD43780
South Bend-Mishawaka, IN-MI
1.0088St. Joseph County, INCass County, MI43900
Spartanburg, SC
0.9884Spartanburg County, SC44060
Spokane, WA
1.0967Spokane County, WA44100
Springfield, IL
0.9382Menard County, ILSangamon County, IL44140
Springfield, MA
1.0874Franklin County, MAHampden County, MAHampshire County, MA44180
Springfield, MO
0.9121Christian County, MODallas County, MOGreene County, MOPolk County, MOWebster County, MO44220
Springfield, OH
0.9120Clark County, OH44300
State College, PA
0.9198Centre County, PA44700
Stockton, CA
1.2436San Joaquin County, CA44940
Sumter, SC
0.9021Sumter County, SC45060
Syracuse, NY
1.0396Madison County, NYOnondaga County, NYOswego County, NY45104
Tacoma, WA
1.1597Pierce County, WA45220
Tallahassee, FL
0.9467Gadsden County, FLJefferson County, FLLeon County, FLWakulla County, FL45300
Tampa-St. Petersburg-Clearwater, FL
0.9462( print page 24033)Hernando County, FLHillsborough County, FLPasco County, FLPinellas County, FL45460
Terre Haute, IN
0.9237Clay County, INSullivan County, INVermillion County, INVigo County, IN45500
Texarkana, TX-Texarkana, AR
0.8151Miller County, ARBowie County, TX45780
Toledo, OH
0.9893Fulton County, OHLucas County, OHOttawa County, OHWood County, OH45820
Topeka, KS
0.8957Jackson County, KSJefferson County, KSOsage County, KSShawnee County, KSWabaunsee County, KS45940
Trenton-Ewing, NJ
1.1223Mercer County, NJ46060
Tucson, AZ
0.9698Pima County, AZ46140
Tulsa, OK
0.8749Creek County, OKOkmulgee County, OKOsage County, OKPawnee County, OKRogers County, OKTulsa County, OKWagoner County, OK46220
Tuscaloosa, AL
0.8710Greene County, ALHale County, ALTuscaloosa County, AL46340
Tyler, TX
0.9561Smith County, TX46540
Utica-Rome, NY
0.8902Herkimer County, NYOneida County, NY46660
Valdosta, GA
0.8495Brooks County, GAEchols County, GALanier County, GALowndes County, GA46700
Vallejo-Fairfield, CA
1.5385Solano County, CA47020
Victoria, TX
0.8709Calhoun County, TXGoliad County, TXVictoria County, TX47220
Vineland-Millville-Bridgeton, NJ
1.0630Cumberland County, NJ47260
Virginia Beach-Norfolk-Newport News, VA-NC
0.9250Currituck County, NCGloucester County, VAIsle of Wight County, VAJames City County, VAMathews County, VASurry County, VAYork County, VAChesapeake City, VAHampton City, VANewport News City, VANorfolk City, VAPoquoson City, VAPortsmouth City, VA( print page 24034)Suffolk City, VAVirginia Beach City, VAWilliamsburg City, VA47300
Visalia-Porterville, CA
1.0586Tulare County, CA47380
Waco, TX
0.8936McLennan County, TX47580
Warner Robins, GA
0.9575Houston County, GA47644
Warren-Troy-Farmington Hills, MI
1.0491Lapeer County, MILivingston County, MIMacomb County, MIOakland County, MISt. Clair County, MI47894
Washington-Arlington-Alexandria, DC-VA-MD-WV
1.1387District of Columbia, DCCalvert County, MDCharles County, MDPrince George's County, MDArlington County, VAClarke County, VAFairfax County, VAFauquier County, VALoudoun County, VAPrince William County, VASpotsylvania County, VAStafford County, VAWarren County, VAAlexandria City, VAFairfax City, VAFalls Church City, VAFredericksburg City, VAManassas City, VAManassas Park City, VAJefferson County, WV47940
Waterloo-Cedar Falls, IA
0.8937Black Hawk County, IABremer County, IAGrundy County, IA48140
Wausau, WI
1.0153Marathon County, WI48260
Weirton-Steubenville, WV-OH
0.8312Jefferson County, OHBrooke County, WVHancock County, WV48300
Wenatchee, WA
1.2031Chelan County, WADouglas County, WA48424
West Palm Beach-Boca Raton-Boynton Beach, FL
1.0205Palm Beach County, FL48540
Wheeling, WV-OH
0.8000Belmont County, OHMarshall County, WVOhio County, WV48620
Wichita, KS
0.9506Butler County, KSHarvey County, KSSedgwick County, KSSumner County, KS48660
Wichita Falls, TX
0.8308Archer County, TXClay County, TXWichita County, TX48700
Williamsport, PA
0.8437Lycoming County, PA48864
Wilmington, DE-MD-NJ
1.1355New Castle County, DECecil County, MDSalem County, NJ48900
Wilmington, NC
0.9871( print page 24035)Brunswick County, NCNew Hanover County, NCPender County, NC49020
Winchester, VA-WV
1.0399Frederick County, VAWinchester City, VAHampshire County, WV49180
Winston-Salem, NC
0.9565Davie County, NCForsyth County, NCStokes County, NCYadkin County, NC49340
Worcester, MA
1.1840Worcester County, MA49420
Yakima, WA
1.0770Yakima County, WA49500
Yauco, PR
0.3777Guánica Municipio, PRGuayanilla Municipio, PRPeñuelas Municipio, PRYauco Municipio, PR49620
York-Hanover, PA
0.9818York County, PA49660
Youngstown-Warren-Boardman, OH-PA
0.9443Mahoning County, OHTrumbull County, OHMercer County, PA49700
Yuba City, CA
1.1283Sutter County, CAYuba County, CA49740
Yuma, AZ
0.9953Yuma County, AZ1
                             Wage index values are based on FY 2004 hospital cost report data before reclassification. These data form the basis for the pre-floor, pre-reclassified hospital wage index. The budget neutrality adjustment or the hospice floor is then applied to the pre-floor, pre-reclassified hospital wage index to derive the hospice wage index.  Wage index values greater than or equal to 0.8 are subject to a budget neutrality adjustment.  The hospice floor calculation is as follows: Wage index values below 0.8 are adjusted to be the greater of either the a) the 25 percent reduced budget neutrality adjustment OR b) the minimum of the pre-floor, pre-reclassified hospital wage index value x 1.15, or 0.8000. For the proposed FY 2009 hospice wage index, the budget neutrality adjustment was reduced by 25 percent.2
                             This column lists each CBSA area name and each county or county equivalent, in the CBSA area.  Counties not listed in this Table are considered to be rural areas.  Wage index values for these areas are found in Addendum B.3
                             Because there are no hospitals in this CBSA, the wage index value is calculated by taking the average of all other urban CBSAs in Georgia.
 Addendum B.—Proposed Hospice Wage Index for Rural Areas by CBSA—FY 2009
CBSA code
Non-urban area
Wage index1
Alabama
0.80002
Alaska
1.27033
Arizona
0.88954
Arkansas
0.80005
California
1.26126
Colorado
1.01807
Connecticut
1.16648
Delaware
1.020410
Florida
0.888011
Georgia
0.803412
Hawaii
1.113213
Idaho
0.830814
Illinois
0.874415
Indiana
0.899616
Iowa
0.898617
Kansas
0.837218
Kentucky
0.817519
Louisiana
0.800020
Maine
0.889121
Maryland
0.947722
Massachusetts 1
1.215723
Michigan
0.939224
Minnesota
0.952425
Mississippi
0.807726
Missouri
0.831927
Montana
0.879028
Nebraska
0.928329
Nevada
0.972630
New Hampshire
1.098331
New Jersey 232
New Mexico
0.937833
New York
0.867334
North Carolina
0.902535
North Dakota
0.800036
Ohio
0.914137
Oklahoma
0.800038
Oregon
1.039239
Pennsylvania
0.879640
Puerto Rico 3
0.465441
Rhode Island 242
South Carolina
0.908043
South Dakota
0.896844
Tennessee
0.810245
Texas
0.835946
Utah
0.851447
Vermont
1.040548
Virgin Islands
0.785549
Virginia
0.828350
Washington
1.076251
West Virginia
0.800052
Wisconsin
1.014153
Wyoming
0.974265
Guam
1.00821
                             There are no hospitals in the rural areas of Massachusetts, so the wage index value used is the average of the contiguous counties.2
                             There are no rural areas in this state.3
                             Wage index values are obtained using the methodology described in this proposed rule.


[FR Doc. 08-1198 Filed 4-28-08; 4:00 pm] BILLING CODE 4120-01-P