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 Department of Health and Human Services Centers for Medicare & Medicaid Services 42 CFR Parts 411, 412, 413, 422, and 489
[CMS-1390-P]
RIN 0938-AP15
 AGENCY: Centers for Medicare and Medicaid Services (CMS), HHS.
 ACTION: Proposed rule.
 SUMMARY: We are proposing to revise the Medicare hospital inpatient prospective payment systems (IPPS) for operating and capital-related costs to implement changes arising from our continuing experience with these systems, and to implement certain provisions made by the Deficit Reduction Act of 2005, the Medicare Improvements and Extension Act, Division B, Title I of the Tax Relief and Health Care Act of 2006, and the TMA, Abstinence Education, and QI Programs Extension Act of 2007. In addition, in the Addendum to this proposed rule, we describe the proposed changes to the amounts and factors used to determine the rates for Medicare hospital inpatient services for operating costs and capital-related costs. These proposed changes would be applicable to discharges occurring on or after October 1, 2008. We also are setting forth the proposed update to the rate-of-increase limits for certain hospitals and hospital units excluded from the IPPS that are paid on a reasonable cost basis subject to these limits. The proposed updated rate-of-increase limits would be effective for cost reporting periods beginning on or after October 1, 2008. Among the other policy decisions and changes that we are proposing to make are changes related to: Limited proposed revisions of the classification of cases to Medicare severity diagnosis-related groups (MS-DRGs), proposals to address charge compression issues in the calculation of MS-DRG relative weights, the proposed revisions to the classifications and relative weights for the Medicare severity long-term care diagnosis-related groups (MS-LTC-DRGs); applications for new medical services and technologies add-on payments; wage index reform changes and the wage data, including the occupational mix data, used to compute the proposed FY 2009 wage indices; submission of hospital quality data; proposed changes to the postacute care transfer policy relating to transfers to home for the furnishing of home health services; and proposed policy changes relating to the requirements for furnishing hospital emergency services under the Emergency Medical Treatment and Labor Act of 1986 (EMTALA). In addition, we are proposing policy changes relating to disclosure to patients of physician ownership or investment interests in hospitals and soliciting public comments on a proposed collection of information regarding financial relationships between hospitals and physicians. We are also proposing changes or soliciting comments on issues relating to policies on physician self-referrals.
 DATES: To be assured consideration, comments must be received at one of the addresses provide below, no later than 5 p.m. E.S.T. on June 13, 2008.
 ADDRESSES: When commenting on issues presented in this proposed rule, please refer to filecode CMS-1390-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 file code CMS-1390-P to submit comments on this proposed rule. 2. 
                            *By regular mail*. You may mail written comments (one original and two copies) to the following address ONLY: Centers for Medicare & Medicaid Services, Department of Health and Human Services, 
                            *Attention:*
                             CMS-1390-P, P.O. Box 8011, 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-1390-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) 786-7195 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. *Submission of comments on paperwork requirements*. You may submit comments on this document's paperwork requirements by following the instructions at the end of the “Collection of Information Requirements” section in this document. For information on viewing public comments, see the beginning of the 
                            **SUPPLEMENTARY INFORMATION**
                             section.
 FOR FURTHER INFORMATION, CONTACT:  Michele Hudson, (410) 786-4487, Operating Prospective Payment, MS-DRGs, Wage Index, New Medical Service and Technology Add-On Payments, Hospital Geographic Reclassifications, and Postacute Care Transfer Issues. Tzvi Hefter, (410) 786-4487, Capital Prospective Payment, Excluded Hospitals, Direct and Indirect Graduate Medical Education, MS-LTC-DRGs, EMTALA, Hospital Emergency Services, and Hospital-within-Hospital Issues. Siddhartha Mazumdar, (410) 786-6673, Rural Community Hospital Demonstration Program Issues. Sheila Blackstock, (410) 786-3502, Quality Data for Annual Payment Update Issues. Thomas Valuck, (410) 786-7479, Hospital Value-Based Purchasing and Readmissions to Hospital Issues. Anne Hornsby, (410) 786-1181, Collection of Managed Care Encounter Data Issues. Jacqueline Proctor, (410) 786-8852, Disclosure of Physician Ownership in 
                            ( print page 23529)
                            Hospitals and Financial Relationships between Hospitals and Physicians Issues. Lisa Ohrin, (410) 786-4565, and Don Romano, (410) 786-1404, Physician Self-Referral Issues.


SUPPLEMENTARY INFORMATION: *Inspection of Public Comments:*
                         All comments received before the close of the comment period are available for viewing by the public, including any personally identifiable or confidential business information that is included in a comment. We post all comments received before the close of the comment period on the following Web 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, 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. Electronic Access This 
                        **Federal Register**
                         document is also available from the 
                        **Federal Register**
                         online database through 
                        *GPO Access*, a service of the U.S. Government Printing Office. Free public access is available on a Wide Area Information Server (WAIS) through the Internet and via asynchronous dial-in. Internet users can access the database by using the World Wide Web (the Superintendent of Documents' home page address is 
                        *http://www.gpoaccess.gov/​*), by using local WAIS client software, or by telnet to 
                        *swais.access.gpo.gov*, then login as guest (no password required). Dial-in users should use communications software and modem to call (202) 512-1661; type swais, then login as guest (no password required). Acronyms AARP American Association of Retired Persons AAHKS American Association of Hip and Knee Surgeons AAMC Association of American Medical Colleges ACGME Accreditation Council for Graduate Medical Education AF Artrial fibrillation AHA American Hospital Association AICD Automatic implantable cardioverter defibrillator AHIMA American Health Information Management Association AHIC American Health Information Community AHRQ Agency for Healthcare Research and Quality AMA American Medical Association AMGA American Medical Group Association AMI Acute myocardial infarction AOA American Osteopathic Association APR DRG All Patient Refined Diagnosis Related Group System ASC Ambulatory surgical center ASITN American Society of Interventional and Therapeutic Neuroradiology BBA Balanced Budget Act of 1997, Pub. L. 105-33 BBRA Medicare, Medicaid, and SCHIP [State Children's Health Insurance Program] Balanced Budget Refinement Act of 1999, Pub. L. 106-113 BIPA Medicare, Medicaid, and SCHIP [State Children's Health Insurance Program] Benefits Improvement and Protection Act of 2000, Pub. L. 106-554 BLS Bureau of Labor Statistics CAH Critical access hospital CARE [Medicare] Continuity Assessment Record & Evaluation [Instrument] CART CMS Abstraction & Reporting Tool CBSAs Core-based statistical areas CC Complication or comorbidity CCR Cost-to-charge ratio CDAC [Medicare] Clinical Data Abstraction Center CDAD 
                            *Clostridium difficile*
                            -associated disease CIPI Capital input price index CMI Case-mix index CMS Centers for Medicare & Medicaid Services CMSA Consolidated Metropolitan Statistical Area COBRA Consolidated Omnibus Reconciliation Act of 1985, Pub. L. 99-272 CoP [Hospital] condition of participation CPI Consumer price index CY Calendar year DFRR Disclosure of financial relationship report DRA Deficit Reduction Act of 2005, Pub. L. 109-171 DRG Diagnosis-related group DSH Disproportionate share hospital DVT Deep vein thrombosis ECI Employment cost index EMR Electronic medical record EMTALA Emergency Medical Treatment and Labor Act of 1986, Pub. L. 99-272 FAH Federation of Hospitals FDA Food and Drug Administration FHA Federal Health Architecture FIPS Federal information processing standards FQHC Federally qualified health center FTE Full-time equivalent FY Fiscal year GAAP Generally Accepted Accounting Principles GAF Geographic Adjustment Factor GME Graduate medical education HACs Hospital-acquired conditions HCAHPS Hospital Consumer Assessment of Healthcare Providers and Systems HCFA Health Care Financing Administration HCRIS Hospital Cost Report Information System HHA Home health agency HHS Department of Health and Human Services HIC Health insurance card HIPAA Health Insurance Portability and Accountability Act of 1996, Pub. L. 104-191 HIPC Health Information Policy Council HIS Health information system HIT Health information technology HMO Health maintenance organization HPMP Hospital Payment Monitoring Program HSA Health savings account HSCRC [Maryland] Health Services Cost Review Commission HSRV Hospital-specific relative value HSRVcc Hospital-specific relative value cost center HQA Hospital Quality Alliance HQI Hospital Quality Initiative HWH Hospital-within-a hospital ICD-9-CM International Classification of Diseases, Ninth Revision, Clinical Modification ICD-10-PCS International Classification of Diseases, Tenth Edition, Procedure Coding System ICR Information collection requirement IHS Indian Health Service IME Indirect medical education IOM Institute of Medicine IPF Inpatient psychiatric facility IPPS [Acute care hospital] inpatient prospective payment system IRF Inpatient rehabilitation facility LAMCs Large area metropolitan counties LTC-DRG Long-term care diagnosis-related group LTCH Long-term care hospital MA Medicare Advantage MAC Medicare Administrative Contractor MCC Major complication or comorbidity MCE Medicare Code Editor MCO Managed care organization MCV Major cardiovascular condition MDC Major diagnostic category MDH Medicare-dependent, small rural hospital MedPAC Medicare Payment Advisory Commission MedPAR Medicare Provider Analysis and Review File MEI Medicare Economic Index MGCRB Medicare Geographic Classification Review Board MIEA-TRHCA Medicare Improvements and Extension Act, Division B of the Tax Relief and Health Care Act of 2006, Pub. L. 109-432 MMA Medicare Prescription Drug, Improvement, and Modernization Act of 2003, Pub. L. 108-173 MPN Medicare provider number MRHFP Medicare Rural Hospital Flexibility Program MRSA Methicillin-resistant 
                            *Staphylococcus*
                             aureus MSA Metropolitan Statistical Area MS-DRG Medicare severity diagnosis-related group MS-LTC-DRG Medicare severity long-term care diagnosis-related group NAICS  North American Industrial Classification System NCD  National coverage determination 
                            ( print page 23530) NCHS National Center for Health Statistics NCQA National Committee for Quality Assurance NCVHS National Committee on Vital and Health Statistics NECMA New England County Metropolitan Areas NQF National Quality Forum NTIS National Technical Information Service NVHRI National Voluntary Hospital Reporting Initiative OES Occupational employment statistics OIG Office of the Inspector General OMB Executive Office of Management and Budget O.R. Operating room OSCAR Online Survey Certification and Reporting [System] PE Pulmonary embolism PMSAs Primary metropolitan statistical areas POA Present on admission PPI Producer price index PPS Prospective payment system PRM Provider Reimbursement Manual ProPAC Prospective Payment Assessment Commission PRRB Provider Reimbursement Review Board PSF Provider-Specific File PS&R Provider Statistical and Reimbursement (System) QIG Quality Improvement Group, CMS QIO Quality Improvement Organization RCE Reasonable compensation equivalent RHC Rural health clinic RHQDAPU Reporting hospital quality data for annual payment update RNHCI Religious nonmedical health care institution RRC Rural referral center RUCAs Rural-urban commuting area codes RY Rate year SAF Standard Analytic File SCH Sole community hospital SFY State fiscal year SIC Standard Industrial Classification SNF Skilled nursing facility SOCs Standard occupational classifications SOM State Operations Manual TEFRA Tax Equity and Fiscal Responsibility Act of 1982, Pub. L. 97-248 TMA TMA [Transitional Medical Assistance], Abstinence Education, and QI [Qualifying Individuals] Programs Extension Act of 2007, Pub. L. 110-09 TJA Total joint arthroplasty UHDDS Uniform hospital discharge data set VAP Ventilator-associated pneumonia VBP Value-based purchasing Table of Contents I. Background A. Summary 1. Acute Care Hospital Inpatient Prospective Payment System (IPPS) 2. Hospitals and Hospital Units Excluded From the IPPS a. Inpatient Rehabilitation Facilities (IRFs) b. Long-Term Care Hospitals (LTCHs) c. Inpatient Psychiatric Facilities (IPFs) 3. Critical Access Hospitals (CAHs) 4. Payments for Graduate Medical Education (GME) B. Provisions of the Deficit Reduction Act of 2005 (DRA) C. Provisions of the Medicare Improvements and Extension Act under Division B, Title I of the Tax Relief and Health Care Act of 2006 (MIEA-TRHCA) D. Provision of the TMA, Abstinence Education, and QI Programs Extension Act of 2007 E. Major Contents of this Proposed Rule 1. Proposed Changes to MS-DRG Classifications and Recalibrations of Relative Weights 2. Proposed Changes to the Hospital Wage Index 3. Other Decisions and Proposed Changes to the IPPS for Operating Costs and GME Costs 4. Proposed Changes to the IPPS for Capital-Related Costs 5. Proposed Changes to the Payment Rates for Excluded Hospitals and Hospital Units: Rate-of-Increase Percentages 6. Proposed Changes Relating to Disclosure of Physician Ownership in Hospitals 7. Proposed Changes and Solicitation of Comments on Physician Self-Referral Provisions 8. Proposed Collection of Information Regarding Financial Relationships between Hospitals and Physicians 9. Determining Proposed Prospective Payment Operating and Capital Rates and Rate-of-Increase Limits 10. Impact Analysis 11. Recommendation of Update Factors for Operating Cost Rates of Payment for Inpatient Hospital Services 12. Disclosure of Financial Relationships Report (DFRR) Form 13. Discussion of Medicare Payment Advisory Commission Recommendations F. Public Comments Received on Issues in Related Rules 1. Comments on Phase-Out of the Capital Teaching Adjustment under the IPPS Included in the FY 2008 IPPS Final Rule with Comment Period 2. Policy Revisions Related to Medicare GME Group Affiliations for Hospitals in Certain Declared Emergency Areas II. Proposed Changes to Medicare Severity DRG (MS-DRG) Classifications and Relative Weights A. Background B. MS-DRG Reclassifications 1. General 2. Yearly Review for Making MS-DRG Changes C. Adoption of the MS-DRGs in FY 2008 D. MS-DRG Documentation and Coding Adjustment, Including the Applicability to the Hospital-Specific Rates and the Puerto Rico-Specific Standardized Amount 1. MS-DRG Documentation and Coding Adjustment 2. Application of the Documentation and Coding Adjustment to the Hospital-Specific Rates 3. Application of the Documentation and Coding Adjustment to Puerto Rico-Specific Standardized Amount 4. Potential Additional Payment Adjustments in FYs 2010 through 2012 E. Refinement of the MS-DRG Relative Weight Calculation 1. Background 2. Refining the Medicare Cost Report 3. Timeline for Revising the Medicare Cost Report 4. Revenue Codes used in the MedPAR File F. Preventable Hospital-Acquired Conditions (HACs), Including Infections 1. General 2. Statutory Authority 3. Public Input 4. Collaborative Process 5. Selection Criteria for HACs 6. HACs Selected in FY 2008 and Proposed Changes to Certain Codes a. Foreign Object Retained After Surgery: Proposed Inclusion of ICD-9-CM Code 998.7 (CC) b. Pressure Ulcers: Proposed Changes in Code Assignments 7. HACs Under Consideration as Additional Candidates a. Surgical Site Infections Following Elective Surgeries b. Legionnaires' Disease c. Glycemic Control d. Iatrogenic Pneumothorax e. Delirium f. Ventilator-Associated Pneumonia (VAP) g. Deep Vein Thrombosis (DVT)/Pulmonary Embolism (PE) h. 
                            *Staphylococcus aureus*
                             Septicemia i. 
                            *Clostridium Difficile*
                            -Associated Disease (CDAD) j. Methicillin-Resistant Staphylococcus aureus (MRSA) 8. Present on Admission (POA) Indicator Reporting 9. Enhancement and Future Issues a. Risk Adjustment b. Rates of HACs c. Use of POA Information d. Transition to ICD-10-PCS e. Application of Nonpayment for HACs to Other Settings f. Relationship to NQF's Serious Reportable Adverse Events G. Proposed Changes to Specific MS-DRG Classifications 1. Pre-MDCs: Artificial Heart Devices 2. MDC 1 (Diseases and Disorders of the Nervous System) a. Transferred Stroke Patients Receiving Tissue Plasminogen Activator (tPA) b. Intractable Epilepsy with Video Electroencephalogram (EEG) 3. MDC 5 (Diseases and Disorders of the Circulatory System) a. Automatic Implantable Cardioverter-Defibrillators (AICD) Lead and Generator Procedures b. Left Atrial Appendage Device 4. MDC 8 (Diseases and Disorders of the Musculoskeletal System and Connective Tissue): Hip and Knee Replacements and Revisions a. Brief History of Development of Hip and Knee Replacement Codes b. Prior Recommendations of the AAHKS c. Adoption of MS-DRGs for Hip and Knee Replacements for FY 2008 and AAHKS' Recommendations d. AAHKS' Recommendations for FY 2009 e. CMS' Response to AAHKS' Recommendations f. Conclusion 5. MDC 18 (Infections and Parasitic Diseases Systemic or Unspecified Sites): Severe Sepsis 
                            ( print page 23531) 6. MDC 21 (Injuries, Poisonings and Toxic Effects of Drugs): Traumatic Compartment Syndrome 7. Medicare Code Editor (MCE) Changes a. List of Unacceptable Principal Diagnoses in MCE b. Diagnoses Allowed for Male Only Edit c. Limited Coverage Edit 8. Surgical Hierarchies 9. CC Exclusions List a. Background b. CC Exclusions List for FY 2009 10. Review of Procedure Codes in MS-DRGs 981, 982, and 983; 984, 985, and 986; and 987, 988, and 989 a. Moving Procedure Codes from MS-DRG 981 through 983 or MS-DRG 987 through 989 to MDCs b. Reassignment of Procedures among MS-DRGs 981 through 983, 984 through 986, and 987 through 989 c. Adding Diagnosis or Procedure Codes to MDCs 11. Changes to the ICD-9-CM Coding System H. Recalibration of MS-DRG Weights I. Proposed Medicare Severity Long-Term Care Diagnosis-Related Group (MS-LTC-DRG) Reclassifications and Relative Weights for LTCHs for FY 2009 1. Background 2. Proposed Changes in the MS-LTC-DRG Classifications a. Background b. Patient Classifications into MS-LTC-DRGs 3. Development of the Proposed FY 2009 MS-LTC-DRG Relative Weights a. General Overview of Development of the MS-LTC-DRG Relative Weights b. Data c. Hospital-Specific Relative Value (HSRV) Methodology d. Treatment of Severity Levels in Developing Proposed Relative Weights e. Proposed Low-Volume MS-LTC-DRGs 4. Steps for Determining the Proposed FY 2009 MS-LTC-DRG Relative Weights J. Proposed Add-On Payments for New Services and Technologies 1. Background 2. Public Input Before Publication of a Notice of Proposed Rulemaking on Add-On Payments 3. FY 2009 Status of Technologies Approved for FY 2008 Add-On Payments 4. FY 2009 Applications for New Technology Add-On Payments a. CardioWestTM
                             Temporary Total Artificial Heart System (CardioWestTM
                             TAH-t) b. Emphasys Medical Zephyr® Endobronchial Valve (Zephyr® EBV) c. Oxiplex® d. TherOx Downstream® System 5. Proposed Regulatory Change III. Proposed Changes to the Hospital Wage Index A. Background B. Requirements of Section 106 of the MIEA-TRHCA 1. Wage Index Study Required Under the MIEA-TRHCA 2. CMS Proposals in Response to Requirements Under Section 106(b) of the MIEA-TRHCA a. Proposed Revision of the Reclassification Average Hourly Wage Comparison Criteria b. Within-State Budget Neutrality Adjustment for the Rural and Imputed Floors c. Within-State Budget Neutrality Adjustment for Geographic Reclassification C. Core-Based Statistical Areas for the Hospital Wage Index D. Proposed Occupational Mix Adjustment to the Proposed FY 2009 Wage Index 1. Development of Data for the Proposed FY 2009 Occupational Mix Adjustment 2. Calculation of the Proposed Occupational Mix Adjustment for FY 2009 3. 2007-2008 Occupational Mix Survey for the FY 2010 Wage Index E. Worksheet S-3 Wage Data for the Proposed FY 2009 Wage Index 1. Included Categories of Costs 2. Excluded Categories of Costs 3. Use of Wage Index Data by Providers Other Than Acute Care Hospitals Under the IPPS F. Verification of Worksheet S-3 Wage Data 1. Wage Data for Multicampus Hospitals 2. New Orleans' Post-Katrina Wage Index G. Method for Computing the Proposed FY 2009 Unadjusted Wage Index H. Analysis and Implementation of the Proposed Occupational Mix Adjustment and the Proposed FY 2009 Occupational Mix Adjustment Wage Index I. Proposed Revisions to the Wage Index Based on Hospital Redesignations 1. General 2. Effects of Reclassification/Redesignation 3. FY 2009 MGCRB Reclassifications 4. FY 2008 Policy Clarifications and Revisions 5. Redesignations of Hospitals under Section 1886(d)(8)(B) of the Act 6. Reclassifications under Section 1886(d)(8)(B) of the Act J. Proposed FY 2009 Wage Index Adjustment Based on Commuting Patterns of Hospital Employees K. Process for Requests for Wage Index Data Corrections L. Labor-Related Share for the Proposed Wage Index for FY 2009 IV. Other Decisions and Proposed Changes to the IPPS for Operating Costs and GME Costs A. Proposed Changes to the Postacute Care Transfer Policy 1. Background 2. Proposed Policy Change Relating to Transfers to Home with a Written Plan for the Provision of Home Health Services 3. Evaluation of MS-DRGs under Postacute Care Transfer Policy for FY 2009 B. Reporting of Hospital Quality Data for Annual Hospital Payment Update 1. Background a. Overview b. Voluntary Hospital Quality Data Reporting c. Hospital Quality Data Reporting under Section 501(b) of Pub. L. 108-173 d. Hospital Quality Data Reporting under Section 5001(a) of Pub. L. 109-171 2. Proposed Quality Measures for FY 2010 and Subsequent Years a. Proposed Quality Measures for FY 2010 b. Possible New Quality Measures, Measure Sets, and Program Requirements for FY 2011 and Subsequent Years c. Considerations in Expanding and Updating Quality Measures Under the RHQDAPU Program 3. Form and Manner and Timing of Quality Data Submission 4. Current and Proposed RHQDAPU Program Procedures a. RHQDAPU Program Procedures for FY 2009 b. Proposed RHQDAPU Program Procedures for FY 2010 5. Current and Proposed HCAHPS Requirements a. FY 2009 HCAHPS Requirements b. Proposed FY 2010 HCAHPS Requirements 6. Current and Proposed Chart Validation Requirements a. Chart Validation Requirements for FY 2009 b. Proposed Chart Validation Requirements for FY 2010 c. Chart Validation Methods and Requirements Under Consideration for FY 2011 and Subsequent Years 7. Data Attestation Requirements a. Proposed Change to Requirements for FY 2009 b. Proposed Requirements for FY 2010 8. Public Display Requirements 9. Proposed Reconsideration and Appeal Procedures 10. Proposed RHQDAPU Program Withdrawal Deadline for FYs 2009 and 2010 11. Requirements for New Hospitals 12. Electronic Medical Records C. Medicare Hospital Value-Based Purchasing (VBP) 1. Medicare Hospital VBP Plan Report to Congress 2. Testing and Further Development of the Medicare Hospital VBP Plan D. Sole Community Hospitals (SCHs) and Medicare-Dependent, Small Rural Hospitals (MDHs): Volume Decrease Adjustment 1. Background 2. Volume Decrease Adjustment for SCHs and MDHs: Data Sources for Determining Core Staff Values a. Occupational Mix Survey b. AHA Annual Survey E. Rural Referral Centers (RRCs) 1. Case-Mix Index 2. Discharges F. Indirect Medical Education (IME) Adjustment 1. Background 2. IME Adjustment Factor for FY 2009 G. Medicare GME Affiliation Provisions for Teaching Hospitals in Certain Emergency Situations; Technical Correction 1. Background 2. Technical Correction H. Payments to Medicare Advantage Organizations: Collection of Risk Adjustment Data I. Hospital Emergency Services under EMTALA 
                            ( print page 23532) 1. Background 2. EMTALA Technical Advisory Group (TAG): Recommendations 3. Proposed Changes Relating to Applicability of EMTALA Requirements to Hospital Inpatients 4. Proposed Changes to the EMTALA Physician On-Call Requirements a. Relocation of Regulatory Provisions b. Shared/Community Call 5. Proposed Technical Change to Regulations J. Application of Incentives To Reduce Avoidable Readmissions to Hospitals 1. Introduction 2. Measurement 3. Accountability 4. Interventions 5. Financial Incentive: Direct Payment Adjustment 6. Financial Incentive: Performance-Based Payment Adjustment 7. Nonfinancial Incentive: Public Reporting 8. Conclusion K. Rural Community Hospital Demonstration Program V. Proposed Changes to the IPPS for Capital-Related Costs A. Background 1. Exception Payments 2. New Hospitals 3. Hospitals Located in Puerto Rico B. Revisions to the Capital IPPS Based on Data on Hospitals Medicare Capital Margins 1. Elimination of the Large Add-On Payment Adjustment 2. Changes to the Capital IME Adjustment a. Background and Changes Made for FY 2008 b. Public Comments Received on Phase Out of Capital IPPS Teaching Adjustment Provisions Included in the FY 2008 Final Rule With Comment Period and Further Solicitation of Public Comments VI. Proposed Changes for Hospitals and Hospital Units Excluded From the IPPS A. Proposed Payments to Excluded Hospitals and Hospital Units B. IRF PPS C. LTCH PPS D. IPF PPS E. Determining Proposed LTCH Cost-to-Charge Ratios (CCRs) under the LTCH PPS F. Proposed Change to the Regulations Governing Hospitals-Within-Hospitals VII. Disclosure Required of Certain Hospitals and Critical Access Hospitals Regarding Physician Ownership VIII. Physician Self-Referrals Provisions A. Stand in the Shoes Provisions 1. Physician “Stand in the Shoes” Provisions a. Background b. Proposals 2. DHS Entity “Stand in the Shoes” Provisions 3. Application of the Physician “Stand in the Shoes” and the Entity “Stand in the Shoes” Provisions 4. Definitions: “Physician” and “Physician Organization” B. Period of Disallowance C. Gainsharing Arrangements 1. Background 2. Statutory Impediments to Gainsharing Arrangements 3. Office of Inspector General (OIG) Approach Towards Gainsharing Arrangements 4. MedPAC Recommendation 5. Demonstration Programs 6. Solicitation of Comments D. Physician-Owned Implant and Other Medical Device Companies 1. Background 2. Solicitation of Comments IX. Financial Relationships between Hospitals and Physicians A. Background B. Section 5006 of the Deficit Reduction Act (DRA) of 2005 C. Disclosure of Financial Relationships Report (DFRR) D. Civil Monetary Penalties E. Uses of Information Captured by the DFRR F. Solicitation of Comments X. MedPAC Recommendations XI. Other Required Information A. Requests for Data from the Public B. Collection of Information Requirements 1. Legislative Requirement for Solicitation of Comments 2. Solicitation of Comments on Proposed Requirements in Regulatory Text a. ICRs Regarding Physician Reporting Requirements b. ICRs Regarding Risk Adjustment Data c. ICRs Regarding Basic Commitments of Providers 3. Associated Information Collections Not Specified in Regulatory Text a. Present on Admission (POA) Indicator Reporting b. Proposed Add-On Payments for New Services and Technologies c. Reporting of Hospital Quality Data for Annual Hospital Payment Update d. Occupational Mix Adjustment to the FY 2009 Index (Hospital Wage Index Occupational Mix Survey) 4. Addresses for Submittal of Comments on Information Collection Requirements C. Response to Public Comments Regulation Text Addendum—Proposed Schedule of Standardized Amounts, Update Factors, and Rate-of-Increase Percentages Effective With Cost Reporting Periods Beginning On or After October 1, 2008 I. Summary and Background II. Proposed Changes to the Prospective Payment Rates for Hospital Inpatient Operating Costs for FY 2009 A. Calculation of the Adjusted Standardized Amount B. Proposed Adjustments for Area Wage Levels and Cost-of-Living C. Proposed MS-DRG Relative Weights D. Calculation of the Proposed Prospective Payment Rates III. Proposed Changes of Payment Rates for Acute Care Hospital Inpatient Capital-Related Costs for FY 2009 A. Determination of Proposed Federal Hospital Inpatient Capital-Related Prospective Payment Rate Update B. Calculation of the Proposed Inpatient Capital-Related Prospective Payments for FY 2009 C. Capital Input Price Index IV. Proposed Changes to Payment Rates for Excluded Hospitals and Hospital Units: Rate-of-Increase Percentages V. Tables Table 1A.—National Adjusted Operating Standardized Amounts, Labor/Nonlabor (69.7 Percent Labor Share/30.3 Percent Nonlabor Share If Wage Index Is Greater Than 1) Table 1B.—National Adjusted Operating Standardized Amounts, Labor/Nonlabor (62 Percent Labor Share/38 Percent Nonlabor Share If Wage Index Is Less Than or Equal to 1) Table 1C.—Adjusted Operating Standardized Amounts for Puerto Rico, Labor/Nonlabor Table 1D.—Capital Standard Federal Payment Rate Table 2.—Hospital Case-Mix Indexes for Discharges Occurring in Federal Fiscal Year 2007; Hospital Wage Indexes for Federal Fiscal Year 2009; Hospital Average Hourly Wages for Federal Fiscal Years 2007 (2003 Wage Data), 2008 (2004 Wage Data), and 2009 (2005 Wage Data); and 3-Year Average of Hospital Average Hourly Wages Table 3A.—FY 2009 and 3-Year Average Hourly Wage for Urban Areas by CBSA Table 3B.—FY 2009 and 3-Year Average Hourly Wage for Rural Areas by CBSA Table 4A.—Wage Index and Capital Geographic Adjustment Factor (GAF) for Urban Areas by CBSA and by State—FY 2009 Table 4B.—Wage Index and Capital Geographic Adjustment Factor (GAF) for Rural Areas by CBSA and by State—FY 2009 Table 4C.—Wage Index and Capital Geographic Adjustment Factor (GAF) for Hospitals That Are Reclassified by CBSA and by State—FY 2009 Table 4D-1.—Rural Floor Budget Neutrality Factors—FY 2009 Table 4D-2.—Urban Areas with Hospitals Receiving the Statewide Rural Floor or Imputed Floor Wage Index—FY 2009 Table 4E.—Urban CBSAs and Constituent Counties—FY 2009 Table 4F.—Puerto Rico Wage Index and Capital Geographic Adjustment Factor (GAF) by CBSA—FY 2009 Table 4J.—Out-Migration Wage Adjustment—FY 2009 Table 5.—List of Medicare Severity Diagnosis-Related Groups (MS-DRGs), Relative Weighting Factors, and Geometric and Arithmetic Mean Length of Stay Table 6A.—New Diagnosis Codes Table 6B.—New Procedure Codes Table 6C.—Invalid Diagnosis Codes Table 6D.—Invalid Procedure Codes Table 6E.—Revised Diagnosis Code Titles Table 6F.—Revised Procedure Code Titles Table 6G.—Additions to the CC Exclusions List (Available through the Internet on the CMS Web site at: 
                            *http://www.cms.hhs.gov/​AcuteInpatientPPS/​*) Table 6H.—Deletions From the CC Exclusions List (Available Through the 
                            ( print page 23533)
                            Internet on the CMS Web site at: 
                            *http://www.cms.hhs.gov/​AcuteInpatientPPS/​*) Table 6I.—Complete List of Complication and Comorbidity (CC) Exclusions (Available Only Through the Internet on the CMS Web site at: 
                            *http:/www.cms.hhs.gov/​AcuteInpatientPPS/​*) Table 6J.—Major Complication and Comorbidity (MCC) List (Available Through the Internet on the CMS Web Site at: 
                            *http://www.cms.hhs.gov/​AcuteInpatientPPS/​*) Table 6K.—Complication and Comorbidity (CC) List (Available Through the Internet on the CMS Web site at: 
                            *http://www.cms.hhs.gov/​AcuteInpatientPPS/​*) Table 7A.—Medicare Prospective Payment System Selected Percentile Lengths of Stay: FY 2007 MedPAR Update—December 2007 GROUPER V25.0 MS-DRGs Table 7B.—Medicare Prospective Payment System Selected Percentile Lengths of Stay: FY 2007 MedPAR Update—December 2007 GROUPER V26.0 MS-DRGs Table 8A.—Proposed Statewide Average Operating Cost-to-Charge Ratios—March 2008 Table 8B.—Proposed Statewide Average Capital Cost-to-Charge Ratios—March 2008 Table 8C.—Proposed Statewide Average Total Cost-to-Charge Ratios for LTCHs—March 2008 Table 9A.—Hospital Reclassifications and Redesignations—FY 2009 Table 9B.—Hospitals Redesignated as Rural under Section 1886(d)(8)(E) of the Act—FY 2009 Table 10.—Geometric Mean Plus the Lesser of .75 of the National Adjusted Operating Standardized Payment Amount (Increased to Reflect the Difference Between Costs and Charges) or .75 of One Standard Deviation of Mean Charges by Medicare Severity Diagnosis-Related Groups (MS-DRGs)—March 2008 Table 11.—Proposed FY 2009 MS-LTC-DRGs, Proposed Relative Weights, Proposed Geometric Average Length of Stay, and Proposed Short-Stay Outlier Threshold Appendix A—Regulatory Impact Analysis I. Overall Impact II. Objectives III. Limitations on Our Analysis IV. Hospitals Included in and Excluded From the IPPS V. Effects on Excluded Hospitals and Hospital Units VI. Quantitative Effects of the Proposed Policy Changes Under the IPPS for Operating Costs A. Basis and Methodology of Estimates B. Analysis of Table I C. Effects of the Proposed Changes to the MS-DRG Reclassifications and Relative Cost-Based Weights (Column 2) D. Effects of Proposed Wage Index Changes (Column 3) E. Combined Effects of Proposed MS-DRG and Wage Index Changes (Column 4) F. Effects of MGCRB Reclassifications (Column 5) G. Effects of the Proposed Rural Floor and Imputed Rural Floor, Including the Proposed Application of Budget Neutrality at the State Level (Column 6) H. Effects of the Proposed Wage Index Adjustment for Out-Migration (Column 7) I. Effects of All Proposed Changes with CMI Adjustment Prior to Estimated Growth (Column 8) J. Effects of All Proposed Changes with CMI Adjustment and Estimated Growth (Column 9) K. Effects of Policy on Payment Adjustment for Low-Volume Hospitals L. Impact Analysis of Table II VII. Effects of Other Proposed Policy Changes A. Effects of Proposed Policy on HACs, Including Infections B. Effects of Proposed MS-LTC-DRG Reclassifications and Relative Weights for LTCHs C. Effects of Proposed Policy Change Relating to New Medical Service and Technology Add-On Payments D. Effects of Proposed Policy Change Regarding Postacute Care Transfers to Home Health Services E. Effects of Proposed Requirements for Hospital Reporting of Quality Data for Annual Hospital Payment Update F. Effects of Proposed Policy Change to Methodology for Computing Core Staffing Factors for Volume Decrease Adjustment for SCHs and MDHs G. Effects of Proposed Clarification of Policy for Collection of Risk Adjustment Data From MA Organizations H. Effects of Proposed Policy Changes Relating to Hospital Emergency Services under EMTALA I. Effects of Implementation of Rural Community Hospital Demonstration Program J. Effects of Proposed Policy Changes Relating to Payments to Hospitals-Within-Hospitals K. Effects of Proposed Policy Changes Relating to Requirements for Disclosure of Physician Ownership in Hospitals L. Effects of Proposed Changes Relating to Physician Self-Referral Provisions M. Effects of Proposed Changes Relating to Reporting of Financial Relationships Between Hospitals and Physicians VIII. Effects of Proposed Changes in the Capital IPPS A. General Considerations B. Results IX. Alternatives Considered X. Overall Conclusion XI. Accounting Statement XII. Executive Order 12866 Appendix B—Recommendation of Update Factors for Operating Cost Rates of Payment for Inpatient Hospital Services I. Background II. Inpatient Hospital Update for FY 2009 III. Secretary's Recommendation IV. MedPAC Recommendation for Assessing Payment Adequacy and Updating Payments in Traditional Medicare Appendix C—Disclosure of Financial Relationships Report (DFRR) Form I. Background A. Summary 1. Acute Care Hospital Inpatient Prospective Payment System (IPPS) Section 1886(d) of the Social Security Act (the Act) sets forth a system of payment for the operating costs of acute care hospital inpatient stays under Medicare Part A (Hospital Insurance) based on prospectively set rates. Section 1886(g) of the Act requires the Secretary to pay for the capital-related costs of hospital inpatient stays under a prospective payment system (PPS). Under these PPSs, Medicare payment for hospital inpatient operating and capital-related costs is made at predetermined, specific rates for each hospital discharge. Discharges are classified according to a list of diagnosis-related groups (DRGs). The base payment rate is comprised of a standardized amount that is divided into a labor-related share and a nonlabor-related share. The labor-related share is adjusted by the wage index applicable to the area where the hospital is located. If the hospital is located in Alaska or Hawaii, the nonlabor-related share is adjusted by a cost-of-living adjustment factor. This base payment rate is multiplied by the DRG relative weight. If the hospital treats a high percentage of low-income patients, it receives a percentage add-on payment applied to the DRG-adjusted base payment rate. This add-on payment, known as the disproportionate share hospital (DSH) adjustment, provides for a percentage increase in Medicare payments to hospitals that qualify under either of two statutory formulas designed to identify hospitals that serve a disproportionate share of low-income patients. For qualifying hospitals, the amount of this adjustment may vary based on the outcome of the statutory calculations. If the hospital is an approved teaching hospital, it receives a percentage add-on payment for each case paid under the IPPS, known as the indirect medical education (IME) adjustment. This percentage varies, depending on the ratio of residents to beds. Additional payments may be made for cases that involve new technologies or medical services that have been approved for special add-on payments. To qualify, a new technology or medical service must demonstrate that it is a substantial clinical improvement over technologies or services otherwise available, and that, absent an add-on 
                        ( print page 23534)
                        payment, it would be inadequately paid under the regular DRG payment. The costs incurred by the hospital for a case are evaluated to determine whether the hospital is eligible for an additional payment as an outlier case. This additional payment is designed to protect the hospital from large financial losses due to unusually expensive cases. Any outlier payment due is added to the DRG-adjusted base payment rate, plus any DSH, IME, and new technology or medical service add-on adjustments. Although payments to most hospitals under the IPPS are made on the basis of the standardized amounts, some categories of hospitals are paid in whole or in part based on their hospital-specific rate based on their costs in a base year. For example, sole community hospitals (SCHs) receive the higher of a hospital-specific rate based on their costs in a base year (the higher of FY 1982, FY 1987, or FY 1996) or the IPPS rate based on the standardized amount. Until FY 2007, a Medicare-dependent, small rural hospital (MDH) has received the IPPS rate plus 50 percent of the difference between the IPPS rate and its hospital-specific rate if the hospital-specific rate based on their costs in a base year (the higher of FY 1982, FY 1987, or FY 2002) is higher than the IPPS rate. As discussed below, for discharges occurring on or after October 1, 2007, but before October 1, 2011, an MDH will receive the IPPS rate plus 75 percent of the difference between the IPPS rate and its hospital-specific rate, if the hospital-specific rate is higher than the IPPS rate. SCHs are the sole source of care in their areas, and MDHs are a major source of care for Medicare beneficiaries in their areas. Both of these categories of hospitals are afforded this special payment protection in order to maintain access to services for beneficiaries. Section 1886(g) of the Act requires the Secretary to pay for the capital-related costs of inpatient hospital services “in accordance with a prospective payment system established by the Secretary.” The basic methodology for determining capital prospective payments is set forth in our regulations at 42 CFR 412.308 and 412.312. Under the capital IPPS, payments are adjusted by the same DRG for the case as they are under the operating IPPS. Capital IPPS payments are also adjusted for IME and DSH, similar to the adjustments made under the operating IPPS. However, as discussed in section V.B.2. of this preamble, we are phasing out the IME adjustment beginning with FY 2008. In addition, hospitals may receive outlier payments for those cases that have unusually high costs. The existing regulations governing payments to hospitals under the IPPS are located in 42 CFR Part 412, Subparts A through M. 2. Hospitals and Hospital Units Excluded From the IPPS Under section 1886(d)(1)(B) of the Act, as amended, certain specialty hospitals and hospital units are excluded from the IPPS. These hospitals and units are: Rehabilitation hospitals and units; long-term care hospitals (LTCHs); psychiatric hospitals and units; children's hospitals; and cancer hospitals. Religious nonmedical health care institutions (RNHCIs) are also excluded from the IPPS. Various sections of the Balanced Budget Act of 1997 (Pub. L. 105-33), the Medicare, Medicaid and SCHIP [State Children's Health Insurance Program] Balanced Budget Refinement Act of 1999 (Pub. L. 106-113), and the Medicare, Medicaid, and SCHIP Benefits Improvement and Protection Act of 2000 (Pub. L. 106-554) provide for the implementation of PPSs for rehabilitation hospitals and units (referred to as inpatient rehabilitation facilities (IRFs)), LTCHs, and psychiatric hospitals and units (referred to as inpatient psychiatric facilities (IPFs)), as discussed below. Children's hospitals, cancer hospitals, and RNHCIs continue to be paid solely under a reasonable cost-based system. The existing regulations governing payments to excluded hospitals and hospital units are located in 42 CFR Parts 412 and 413. a. Inpatient Rehabilitation Facilities (IRFs) Under section 1886(j) of the Act, as amended, rehabilitation hospitals and units (IRFs) have been transitioned from payment based on a blend of reasonable cost reimbursement subject to a hospital-specific annual limit under section 1886(b) of the Act and the adjusted facility Federal prospective payment rate for cost reporting periods beginning on or after January 1, 2002 through September 30, 2002, to payment at 100 percent of the Federal rate effective for cost reporting periods beginning on or after October 1, 2002. IRFs subject to the blend were also permitted to elect payment based on 100 percent of the Federal rate. The existing regulations governing payments under the IRF PPS are located in 42 CFR Part 412, Subpart P. b. Long-Term Care Hospitals (LTCHs) Under the authority of sections 123(a) and (c) of Pub. L. 106-113 and section 307(b)(1) of Pub. L. 106-554, the LTCH PPS was effective for a LTCH's first cost reporting period beginning on or after October 1, 2002. LTCHs that do not meet the definition of “new” under § 412.23(e)(4) are paid, during a 5-year transition period, a LTCH prospective payment that is comprised of an increasing proportion of the LTCH Federal rate and a decreasing proportion based on reasonable cost principles. Those LTCHs that did not meet the definition of “new” under § 412.23(e)(4) could elect to be paid based on 100 percent of the Federal prospective payment rate instead of a blended payment in any year during the 5-year transition. For cost reporting periods beginning on or after October 1, 2006, all LTCHs are paid 100 percent of the Federal rate. The existing regulations governing payment under the LTCH PPS are located in 42 CFR Part 412, Subpart O. c. Inpatient Psychiatric Facilities (IPFs) Under the authority of sections 124(a) and (c) of Pub. L. 106-113, inpatient psychiatric facilities (IPFs) (formerly psychiatric hospitals and psychiatric units of acute care hospitals) are paid under the IPF PPS. For cost reporting periods beginning on or after January 1, 2008, all IPFs are paid 100 percent of the Federal per diem payment amount established under the IPF PPS. (For cost reporting periods beginning on or after January 1, 2005, and ending on or before December 31, 2007, some IPFs received transitioned payments for inpatient hospital services based on a blend of reasonable cost-based payment and a Federal per diem payment rate.) The existing regulations governing payment under the IPF PPS are located in 42 CFR part 412, Subpart N. 3. Critical Access Hospitals (CAHs) Under sections 1814, 1820, and 1834(g) of the Act, payments are made to critical access hospitals (CAHs) (that is, rural hospitals or facilities that meet certain statutory requirements) for inpatient and outpatient services are based on 101 percent of reasonable cost. Reasonable cost is determined under the provisions of section 1861(v)(1)(A) of the Act and existing regulations under 42 CFR Parts 413 and 415. 4. Payments for Graduate Medical Education (GME) Under section 1886(a)(4) of the Act, costs of approved educational activities are excluded from the operating costs of inpatient hospital services. Hospitals with approved graduate medical education (GME) programs are paid for the direct costs of GME in accordance with section 1886(h) of the Act. The amount of payment for direct GME costs 
                        ( print page 23535)
                        for a cost reporting period is based on the hospital's number of residents in that period and the hospital's costs per resident in a base year. The existing regulations governing payments to the various types of hospitals are located in 42 CFR Part 413. B. Provisions of the Deficit Reduction Act of 2005 (DRA) Section 5001(b) of the Deficit Reduction Act of 2005 (DRA), Pub. L. 109-171, requires the Secretary to develop a plan to implement, beginning with FY 2009, a value-based purchasing plan for section 1886(d) hospitals defined in the Act. In section IV.C. of the preamble of this proposed rule, we discuss the report to Congress on the Medicare value-based purchasing plan and the current testing of the plan. C. Provisions of the Medicare Improvements and Extension Act Under Division B, Title I of the Tax Relief and Health Care Act of 2006 (MIEA-TRHCA) Section 106(b)(2) of the MIEA-TRHCA instructs the Secretary of Health and Human Services to include in the FY 2009 IPPS proposed rule one or more proposals to revise the wage index adjustment applied under section 1886(d)(3)(E) of the Act for purposes of the IPPS. The Secretary was also instructed to consider MedPAC's recommendations on the Medicare wage index classification system in developing these proposals. In section III. of the preamble of this proposed rule, we discuss MedPAC's recommendations in a report to Congress and present our proposed changes to the FY 2009 wage index in response to those recommendations. D. Provision of the TMA, Abstinence Education, and QI Programs Extension Act of 2007 Section 7 of the TMA [Transitional Medical Assistance], Abstinence Education, and QI [Qualifying Individuals] Programs Extension Act of 2007 (Pub. L. 110-90) provides for a 0.9 percent prospective documentation and coding adjustment in the determination of standardized amounts under the IPPS (except for MDHs and SCHs) for discharges occurring during FY 2009. The prospective documentation and coding adjustment was established in FY 2008 in response to the implementation of an MS-DRG system under the IPPS that resulted in changes in coding and classification that did not reflect real changes in case-mix under section 1886(d) of the Act. We discuss our proposed implementation of this provision in section II.D. of the preamble of this proposed rule and in the Addendum and in Appendix A to this proposed rule. E. Major Contents of This Proposed Rule In this proposed rule, we are setting forth proposed changes to the Medicare IPPS for operating costs and for capital-related costs in FY 2009. We also are setting forth proposed changes relating to payments for IME costs and payments to certain hospitals and units that continue to be excluded from the IPPS and paid on a reasonable cost basis. In addition, we are presenting proposed changes relating to disclosure to patients of physician ownership and investment interests in hospitals, proposed changes to our physician self-referral regulations, and a solicitation of public comments on a proposed collection of information regarding financial relationships between hospitals and physicians. The following is a summary of the major changes that we are proposing to make: 1. Proposed Changes to MS-DRG Classifications and Recalibrations of Relative Weights In section II. of the preamble to this proposed rule, we are including— Proposed changes to MS-DRG reclassifications based on our yearly review.
                    Proposed application of the documentation and coding adjustment to hospital-specific rates resulting from implementation of the MS-DRG system.
                    Proposed changes to address the RTI reporting recommendations on charge compression.
                    Proposed recalibrations of the MS-DRG relative weights. We also are proposing to refine the hospital cost reports so that charges for relatively inexpensive medical supplies are reported separately from the costs and charges for more expensive medical devices. This proposal would be applied to the determination of both the IPPS and the OPPS relative weights as well as the calculation of the ambulatory surgical center payment rates. We are presenting a listing and discussion of additional hospital-acquired conditions (HACs), including infections, that are being proposed to be subject to the statutorily required quality adjustment in MS-DRG payments for FY 2009. We are presenting our evaluation and analysis of the FY 2009 applicants for add-on payments for high-cost new medical services and technologies (including public input, as directed by Pub. L. 108-173, obtained in a town hall meeting). We are proposing the annual update of the MS-LTC-DRG classifications and relative weights for use under the LTCH PPS for FY 2009. 2. Proposed Changes to the Hospital Wage Index In section III. of the preamble to this proposed rule, we are proposing revisions to the wage index and the annual update of the wage data. Specific issues addressed include the following: Proposed wage index reform changes in response to recommendations made to Congress as a result of the wage index study required underPub. L. 109-432. We discuss changes related to reclassifications criteria, application of budget neutrality in reclassifications, and the rural floor and imputed floor budget neutrality at the State level.
                    Changes to the CBSA designations.
                    The methodology for computing the proposed FY 2009 wage index.
                    The proposed FY 2009 wage index update, using wage data from cost reporting periods that began during FY 2006.
                    Analysis and implementation of the proposed FY 2009 occupational mix adjustment to the wage index.
                    Proposed revisions to the wage index based on hospital redesignations and reclassifications.
                    The proposed adjustment to the wage index for FY 2009 based on commuting patterns of hospital employees who reside in a county and work in a different area with a higher wage index.
                    The timetable for reviewing and verifying the wage data used to compute the proposed FY 2009 wage index.
                    The proposed labor-related share for the FY 2009 wage index, including the labor-related share for Puerto Rico. 3. Other Decisions and Proposed Changes to the IPPS for Operating Costs and GME Costs In section IV. of the preamble to this proposed rule, we discuss a number of the provisions of the regulations in 42 CFR Parts 412, 413, and 489, including the following: Proposed changes to the postacute care transfer policy as it relates to transfers to home with the provision of home health services.
                    The reporting of hospital quality data as a condition for receiving the full annual payment update increase.
                    Proposed changes in the collection of Medicare Advantage (MA) encounter data that are used for computing the risk payment adjustment made to MA organizations.
                    Discussion of the report to Congress on the Medicare value-based purchasing( print page 23536)
                        plan and current testing and further development of the plan.
                    Proposed changes to the methodology for determining core staff values for the volume decrease payment adjustment for SCHs and MDHs.
                    The proposed updated national and regional case-mix values and discharges for purposes of determining RRC status.
                    The statutorily-required IME adjustment factor for FY 2009 and technical changes to the GME payment policies.
                    Proposed changes to policies on hospital emergency services under EMTALA to address EMTALA Technical Advisory Group (TAG) recommendations.
                    Solicitation of public comments on Medicare policies relating to incentives for avoidable readmissions to hospitals.
                    Discussion of the fifth year of implementation of the Rural Community Hospital Demonstration Program. 4. Proposed Changes to the IPPS for Capital-Related Costs In section V. of the preamble to this proposed rule, we discuss the payment policy requirements for capital-related costs and capital payments to hospitals. We acknowledge the public comments that we received on the phase-out of the capital teaching adjustment included in the FY 2008 IPPS final rule with comment period, and again are soliciting public comments on this phase-out in this proposed rule. 5. Proposed Changes to the Payment Rates for Excluded Hospitals and Hospital Units: Rate-of-Increase Percentages In section VI. of the preamble to this proposed rule, we discuss proposed changes to payments to excluded hospitals and hospital units, proposed changes for determining LTCH CCRs under the LTCH PPS, including a discussion regarding changing the annual payment rate update schedule for the LTCH PPS, and proposed changes to the regulations on hospitals-within-hospitals. 6. Proposed Changes Relating to Disclosure of Physician Ownership in Hospitals In section VII. of the preamble of this proposed rule, we present proposed changes to the regulations relating to the disclosure to patients of physician ownership or investment interests in hospitals. 7. Proposed Changes and Solicitation of Comments on Physician Self-Referrals Provisions In section VIII. of the preamble of this proposed rule, we present proposed changes to the policies on physician self-referrals relating to the “Stand in Shoes” provision, In addition, we solicit public comments regarding physician-owned implant companies and gainsharing arrangements. 8. Proposed Collection of Information Regarding Financial Relationships Between Hospitals and Physicians In section IX. of the preamble of this proposed rule, we solicit public comments on our proposed collection of information regarding financial relationships between hospitals and physicians. 9. Determining Proposed Prospective Payment Operating and Capital Rates and Rate-of-Increase Limits In the Addendum to this proposed rule, we set forth proposed changes to the amounts and factors for determining the FY 2009 prospective payment rates for operating costs and capital-related costs. We also establish the proposed threshold amounts for outlier cases. In addition, we address the proposed update factors for determining the rate-of-increase limits for cost reporting periods beginning in FY 2009 for hospitals and hospital units excluded from the PPS. 10. Impact Analysis In Appendix A of this proposed rule, we set forth an analysis of the impact that the proposed changes would have on affected hospitals. 11. Recommendation of Update Factors for Operating Cost Rates of Payment for Inpatient Hospital Services In Appendix B of this proposed rule, as required by sections 1886(e)(4) and (e)(5) of the Act, we provided our recommendations of the appropriate percentage changes for FY 2009 for the following: A single average standardized amount for all areas for hospital inpatient services paid under the IPPS for operating costs (and hospital-specific rates applicable to SCHs and MDHs).
                    Target rate-of-increase limits to the allowable operating costs of hospital inpatient services furnished by hospitals and hospital units excluded from the IPPS. 12. Disclosure of Financial Relationships Report (DFRR) Form In Appendix C of this proposed rule, we present the reporting form that we are proposing to use for the proposed collection of information on financial relationships between hospitals and physicians discussed in section IX, of the preamble of this proposed rule. 13. Discussion of Medicare Payment Advisory Commission Recommendations Under section 1805(b) of the Act, MedPAC is required to submit a report to Congress, no later than March 1 of each year, in which MedPAC reviews and makes recommendations on Medicare payment policies. MedPAC's March 2008 recommendations concerning hospital inpatient payment policies address the update factor for inpatient hospital operating costs and capital-related costs under the IPPS and for hospitals and distinct part hospital units excluded from the IPPS. We address these recommendations in Appendix B of this proposed rule. For further information relating specifically to the MedPAC March 2008 reports or to obtain a copy of the reports, contact MedPAC at (202) 220-3700 or visit MedPAC's Web site at: 
                        *www.medpac.gov*. F. Public Comments Received on Issues in Related Rules 1. Comments on Phase-Out of the Capital Teaching Adjustment Under the IPPS Included in the FY 2008 IPPS Final Rule With Comment Period In the FY 2008 IPPS final rule with comment period, we solicited public comments on our policy changes related to phase-out of the capital teaching adjustment to the capital payment update under the IPPS (72 FR 47401). We received approximately 90 timely pieces of correspondence in response to our solicitation. (These public comments may be viewed on the following Web site: 
                        *http://www.cms.hhs.gov/​eRulemaking/​ECCMSR/​list.asp*
                         under file code CMS-1533-FC.) In section V. of the preamble of this proposed rule, we acknowledge receipt of these public comments and again solicit public comments on the phase-out in this proposed rule. We will respond to the public comments received in response to both the FY 2008 IPPS final rule with comment period and this proposed rule in the FY 2009 IPPS final rule, which is scheduled to be published in August 2008. 2. Policy Revisions Related to Medicare GME Group Affiliations for Hospitals in Certain Declared Emergency Areas We have issued two interim final rules with comment periods in the 
                        **Federal Register**
                         that modified the GME 
                        ( print page 23537)
                        regulations as they apply to Medicare GME affiliated groups to provide for greater flexibility in training residents in approved residency programs during times of disasters: on April 12, 2006 (71 FR 18654) and on November 27, 2007 (72 FR 66892). We received a number of timely pieces of correspondence in response to these interim final rules with comment period. (The public comments that we received may be viewed on the Web site at: 
                        *http://www.cms.hhs.gov/​eRulemaking/​ECCMSR/​list.asp*
                         under the file codes CMS-1531-IFC1 and CMS-1531-IFC2, respectively.) We will summarize and address these public comments in the FY 2009 IPPS final rule, which is scheduled to be published in August 2008. II. Proposed Changes to Medicare Severity DRG (MS-DRG) Classifications and Relative Weights A. Background Section 1886(d) of the Act specifies that the Secretary shall establish a classification system (referred to as DRGs) for inpatient discharges and adjust payments under the IPPS based on appropriate weighting factors assigned to each DRG. Therefore, under the IPPS, we pay for inpatient hospital services on a rate per discharge basis that varies according to the DRG to which a beneficiary's stay is assigned. The formula used to calculate payment for a specific case multiplies an individual hospital's payment rate per case by the weight of the DRG to which the case is assigned. Each DRG weight represents the average resources required to care for cases in that particular DRG, relative to the average resources used to treat cases in all DRGs. Congress recognized that it would be necessary to recalculate the DRG relative weights periodically to account for changes in resource consumption. Accordingly, section 1886(d)(4)(C) of the Act requires that the Secretary adjust the DRG classifications and relative weights at least annually. These adjustments are made to reflect changes in treatment patterns, technology, and any other factors that may change the relative use of hospital resources. B. MS-DRG Reclassifications 1. General As discussed in the preamble to the FY 2008 IPPS final rule with comment period (72 FR 47138), we focused our efforts in FY 2008 on making significant reforms to the IPPS consistent with the recommendations made by MedPAC in its “Report to the Congress, Physician-Owned Specialty Hospitals” in March 2005. MedPAC recommended that the Secretary refine the entire DRG system by taking into account severity of illness and applying hospital-specific relative value (HSRV) weights to DRGs.[1]
                        
                         We began this reform process by adopting cost-based weights over a 3-year transition period beginning in FY 2007 and making interim changes to the DRG system for FY 2007 by creating 20 new CMS DRGs and modifying 32 others across 13 different clinical areas involving nearly 1.7 million cases. As described below in more detail, these refinements were intermediate steps towards comprehensive reform of both the relative weights and the DRG system that is occurring as we undertook further study. For FY 2008, we adopted 745 new Medicare Severity DRGs (MS-DRGs) to replace the CMS DRGs. We refer readers to section II.D. of the FY 2008 IPPS final rule with comment period for a full detailed discussion of how the MS-DRG system was established based on severity levels of illness (72 FR 47141). Currently, cases are classified into MS-DRGs for payment under the IPPS based on the principal diagnosis, up to eight additional diagnoses, and up to six procedures performed during the stay. In a small number of MS-DRGs, classification is also based on the age, sex, and discharge status of the patient. The diagnosis and procedure information is reported by the hospital using codes from the International Classification of Diseases, Ninth Revision, Clinical Modification (ICD-9-CM). The process of forming the MS-DRGs was begun by dividing all possible principal diagnoses into mutually exclusive principal diagnosis areas, referred to as Major Diagnostic Categories (MDCs). The MDCs were formed by physician panels to ensure that the DRGs would be clinically coherent. The diagnoses in each MDC correspond to a single organ system or etiology and, in general, are associated with a particular medical specialty. Thus, in order to maintain the requirement of clinical coherence, no final MS-DRG could contain patients in different MDCs. Most MDCs are based on a particular organ system of the body. For example, MDC 6 is Diseases and Disorders of the Digestive System. This approach is used because clinical care is generally organized in accordance with the organ system affected. However, some MDCs are not constructed on this basis because they involve multiple organ systems (for example, MDC 22 (Burns)). For FY 2008, cases are assigned to one of 745 MS-DRGs in 25 MDCs. The table below lists the 25 MDCs. Major Diagnostic Categories (MDCs)
1
Diseases and Disorders of the Nervous System.2
Diseases and Disorders of the Eye.3
Diseases and Disorders of the Ear, Nose, Mouth, and Throat.4
Diseases and Disorders of the Respiratory System.5
Diseases and Disorders of the Circulatory System.6
Diseases and Disorders of the Digestive System.7
Diseases and Disorders of the Hepatobiliary System and Pancreas.8
Diseases and Disorders of the Musculoskeletal System and Connective Tissue.9
Diseases and Disorders of the Skin, Subcutaneous Tissue and Breast.10
Endocrine, Nutritional and Metabolic Diseases and Disorders.11
Diseases and Disorders of the Kidney and Urinary Tract.12
Diseases and Disorders of the Male Reproductive System.13
Diseases and Disorders of the Female Reproductive System.14
Pregnancy, Childbirth, and the Puerperium.15
Newborns and Other Neonates with Conditions Originating in the Perinatal Period.16
Diseases and Disorders of the Blood and Blood Forming Organs and Immunological Disorders.17
Myeloproliferative Diseases and Disorders and Poorly Differentiated Neoplasms.18
Infectious and Parasitic Diseases (Systemic or Unspecified Sites).19
Mental Diseases and Disorders.20
Alcohol/Drug Use and Alcohol/Drug Induced Organic Mental Disorders.21
Injuries, Poisonings, and Toxic Effects of Drugs.22
Burns.23
Factors Influencing Health Status and Other Contacts with Health Services.24
Multiple Significant Trauma.25
Human Immunodeficiency Virus Infections.
 In general, cases are assigned to an MDC based on the patient's principal diagnosis before assignment to an MS-DRG. However, under the most recent version of the Medicare GROUPER (Version 26.0), there are 9 MS-DRGs to 
                        ( print page 23538)
                        which cases are directly assigned on the basis of ICD-9-CM procedure codes. These MS-DRGs are for heart transplant or implant of heart assist systems, liver and/or intestinal transplants, bone marrow transplants, lung transplants, simultaneous pancreas/kidney transplants, pancreas transplants, and for tracheostomies. Cases are assigned to these MS-DRGs before they are classified to an MDC. The table below lists the nine current pre-MDCs. Pre-Major Diagnostic Categories (Pre-MDCs)
MS-DRG 103
Heart Transplant or Implant of Heart Assist System.MS-DRG 480
Liver Transplant and/or Intestinal Transplant.MS-DRG 481
Bone Marrow Transplant.MS-DRG 482
Tracheostomy for Face, Mouth, and Neck Diagnoses.MS-DRG 495
Lung Transplant.MS-DRG 512
Simultaneous Pancreas/Kidney Transplant.MS-DRG 513
Pancreas Transplant.MS-DRG 541
ECMO or Tracheostomy with Mechanical Ventilation 96+ Hours or Principal Diagnosis Except for Face, Mouth, and Neck Diagnosis with Major O.R.MS-DRG 542
Tracheostomy with Mechanical Ventilation 96+ Hours or Principal Diagnosis Except for Face, Mouth, and Neck Diagnosis without Major O.R.
 Once the MDCs were defined, each MDC was evaluated to identify those additional patient characteristics that would have a consistent effect on the consumption of hospital resources. Because the presence of a surgical procedure that required the use of the operating room would have a significant effect on the type of hospital resources used by a patient, most MDCs were initially divided into surgical DRGs and medical DRGs. Surgical DRGs are based on a hierarchy that orders operating room (O.R.) procedures or groups of O.R. procedures by resource intensity. Medical DRGs generally are differentiated on the basis of diagnosis and age (0 to 17 years of age or greater than 17 years of age). Some surgical and medical DRGs are further differentiated based on the presence or absence of a complication or comorbidity (CC) or a major complication or comorbidity (MCC). Generally, nonsurgical procedures and minor surgical procedures that are not usually performed in an operating room are not treated as O.R. procedures. However, there are a few non-O.R. procedures that do affect MS-DRG assignment for certain principal diagnoses. An example is extracorporeal shock wave lithotripsy for patients with a principal diagnosis of urinary stones. Lithotripsy procedures are not routinely performed in an operating room. Therefore, lithotripsy codes are not classified as O.R. procedures. However, our clinical advisors believe that patients with urinary stones who undergo extracorporeal shock wave lithotripsy should be considered similar to other patients who undergo O.R. procedures. Therefore, we treat this group of patients similar to patients undergoing O.R. procedures. Once the medical and surgical classes for an MDC were formed, each diagnosis class was evaluated to determine if complications or comorbidities would consistently affect the consumption of hospital resources. Each diagnosis was categorized into one of three severity levels. These three levels include a major complication or comorbidity (MCC), a complication or comorbidity (CC), or a non-CC. Physician panels classified each diagnosis code based on a highly iterative process involving a combination of statistical results from test data as well as clinical judgment. As stated earlier, we refer readers to section II.D. of the FY 2008 IPPS final rule with comment period for a full detailed discussion of how the MS-DRG system was established based on severity levels of illness (72 FR 47141). A patient's diagnosis, procedure, discharge status, and demographic information is entered into the Medicare claims processing systems and subjected to a series of automated screens called the Medicare Code Editor (MCE). The MCE screens are designed to identify cases that require further review before classification into an MS-DRG. After patient information is screened through the MCE and any further development of the claim is conducted, the cases are classified into the appropriate MS-DRG by the Medicare GROUPER software program. The GROUPER program was developed as a means of classifying each case into an MS-DRG on the basis of the diagnosis and procedure codes and, for a limited number of MS-DRGs, demographic information (that is, sex, age, and discharge status). After cases are screened through the MCE and assigned to an MS-DRG by the GROUPER, the PRICER software calculates a base MS-DRG payment. The PRICER calculates the payment for each case covered by the IPPS based on the MS-DRG relative weight and additional factors associated with each hospital, such as IME and DSH payment adjustments. These additional factors increase the payment amount to hospitals above the base MS-DRG payment. The records for all Medicare hospital inpatient discharges are maintained in the Medicare Provider Analysis and Review (MedPAR) file. The data in this file are used to evaluate possible MS-DRG classification changes and to recalibrate the MS-DRG weights. However, in the FY 2000 IPPS final rule (64 FR 41500), we discussed a process for considering non-MedPAR data in the recalibration process. In order for us to consider using particular non-MedPAR data, we must have sufficient time to evaluate and test the data. The time necessary to do so depends upon the nature and quality of the non-MedPAR data submitted. Generally, however, a significant sample of the non-MedPAR data should be submitted by mid-October for consideration in conjunction with the next year's proposed rule. This date allows us time to test the data and make a preliminary assessment as to the feasibility of using the data. Subsequently, a complete database should be submitted by early December for consideration in conjunction with the next year's proposed rule. As we indicated above, for FY 2008, we made significant improvement in the DRG system to recognize severity of illness and resource usage by adopting MS-DRGs. The changes we adopted were reflected in the FY 2008 GROUPER, Version 25.0, and were effective for discharges occurring on or after October 1, 2007. Our DRG analysis for the FY 2008 final rule with comment period was based on data from the March 2007 update of the FY 2006 MedPAR file, which contained hospital bills received through March 31, 2007, for discharges occurring through September 30, 2006. For this proposed rule, for FY 2009, our DRG analysis is based on data from the September 2007 update of the FY 2007 MedPAR file, which contains hospital bills received through September 30, 2007, for discharges through September 30, 2007. 2. Yearly Review for Making MS-DRG Changes Many of the changes to the MS-DRG classifications we make annually are the result of specific issues brought to our attention by interested parties. We encourage individuals with concerns about MS-DRG classifications to bring those concerns to our attention in a timely manner so they can be carefully considered for possible inclusion in the annual proposed rule and, if included, may be subjected to public review and comment. Therefore, similar to the 
                        ( print page 23539)
                        timetable for interested parties to submit non-MedPAR data for consideration in the MS-DRG recalibration process, concerns about MS-DRG classification issues should be brought to our attention no later than early December in order to be considered and possibly included in the next annual proposed rule updating the IPPS. The actual process of forming the MS-DRGs was, and will likely continue to be, highly iterative, involving a combination of statistical results from test data combined with clinical judgment. In the FY 2008 IPPS final rule (72 FR 47140 through 47189), we described in detail the process we used to develop the MS-DRGs that we adopted for FY 2008. In addition, in deciding whether to make further modification to the MS-DRGs for particular circumstances brought to our attention, we considered whether the resource consumption and clinical characteristics of the patients with a given set of conditions are significantly different than the remaining patients in the MS-DRG. We evaluated patient care costs using average charges and lengths of stay as proxies for costs and relied on the judgment of our medical advisors to decide whether patients are clinically distinct or similar to other patients in the MS-DRG. In evaluating resource costs, we considered both the absolute and percentage differences in average charges between the cases we selected for review and the remainder of cases in the MS-DRG. We also considered variation in charges within these groups; that is, whether observed average differences were consistent across patients or attributable to cases that were extreme in terms of charges or length of stay, or both. Further, we considered the number of patients who will have a given set of characteristics and generally preferred not to create a new MS-DRG unless it would include a substantial number of cases. C. Adoption of the MS-DRGs in FY 2008 In the FY 2006, FY 2007, and FY 2008 IPPS final rules, we discussed a number of recommendations made by MedPAC regarding revisions to the DRG system used under the IPPS (70 FR 47473 through 47482; 71 FR 47881 through 47939; and 72 FR 47140 through 47189). As we noted in the FY 2006 IPPS final rule, we had insufficient time to complete a thorough evaluation of these recommendations for full implementation in FY 2006. However, we did adopt severity-weighted cardiac DRGs in FY 2006 to address public comments on this issue and the specific concerns of MedPAC regarding cardiac surgery DRGs. We also indicated that we planned to further consider all of MedPAC's recommendations and thoroughly analyze options and their impacts on the various types of hospitals in the FY 2007 IPPS proposed rule. For FY 2007, we began this process. In the FY 2007 IPPS proposed rule, we proposed to adopt Consolidated Severity DRGs (CS DRGs) for FY 2008 (if not earlier). However, based on public comments received on the FY 2007 IPPS proposed rule, we decided not to adopt the CS DRGs. Rather, we decided to make interim changes to the existing DRGs for FY 2007 by creating 20 new DRGs involving 13 different clinical areas that would significantly improve the CMS DRG system's recognition of severity of illness. We also modified 32 DRGs to better capture differences in severity. The new and revised DRGs were selected from 40 existing CMS DRGs that contained 1,666,476 cases and represent a number of body systems. In creating these 20 new DRGs, we deleted 8 and modified 32 existing DRGs. We indicated that these interim steps for FY 2007 were being taken as a prelude to more comprehensive changes to better account for severity in the DRG system by FY 2008. In the FY 2007 IPPS final rule, we indicated our intent to pursue further DRG reform through two initiatives. First, we announced that we were in the process of engaging a contractor to assist us with evaluating alternative DRG systems that were raised as potential alternatives to the CMS DRGs in the public comments. Second, we indicated our intent to review over 13,000 ICD-9-CM diagnosis codes as part of making further refinements to the current CMS DRGs to better recognize severity of illness based on the work that CMS (then HCFA) did in the mid-1990's in connection with adopting severity DRGs. We describe below the progress we have made on these two initiatives, our actions for FY 2008, and our proposals for FY 2009 based on our continued analysis of reform of the DRG system. We note that the adoption of the MS-DRGs to better recognize severity of illness has implications for the outlier threshold, the application of the postacute care transfer policy, the measurement of real case-mix versus apparent case-mix, and the IME and DSH payment adjustments. We discuss these implications for FY 2009 in other sections of this preamble and in the Addendum to this proposed rule. In the FY 2007 IPPS proposed rule, we discussed MedPAC's recommendations to move to a cost-based HSRV weighting methodology using HSRVs beginning with the FY 2007 IPPS proposed rule for determining the DRG relative weights. Although we proposed to adopt the HSRV weighting methodology for FY 2007, we decided not to adopt the proposed methodology in the final rule after considering the public comments we received on the proposal. Instead, in the FY 2007 IPPS final rule, we adopted a cost-based weighting methodology without the HSRV portion of the proposed methodology. The cost-based weights are being adopted over a 3-year transition period in 
                        1/3
                         increments between FY 2007 and FY 2009. In addition, in the FY 2007 IPPS final rule, we indicated our intent to further study the HSRV-based methodology as well as other issues brought to our attention related to the cost-based weighting methodology adopted in the FY 2007 final rule. There was significant concern in the public comments that our cost-based weighting methodology does not adequately account for charge compression—the practice of applying a higher percentage charge markup over costs to lower cost items and services and a lower percentage charge markup over costs to higher cost items and services. Further, public commenters expressed concern about potential inconsistencies between how costs and charges are reported on the Medicare cost reports and charges on the Medicare claims. In the FY 2007 IPPS final rule, we used costs and charges from the cost report to determine departmental level cost-to-charge ratios (CCRs) which we then applied to charges on the Medicare claims to determine the cost-based weights. The commenters were concerned about potential distortions to the cost-based weights that would result from inconsistent reporting between the cost reports and the Medicare claims. After publication of the FY 2007 IPPS final rule, we entered into a contract with RTI International (RTI) to study both charge compression and to what extent our methodology for calculating DRG relative weights is affected by inconsistencies between how hospitals report costs and charges on the cost reports and how hospitals report charges on individual claims. Further, as part of its study of alternative DRG systems, the RAND Corporation analyzed the HSRV cost-weighting methodology. We refer readers to section II.E. of the preamble of this proposed rule for our proposals for addressing the issue of charge compression and the HSRV cost-weighting methodology for FY 2009. We believe that revisions to the DRG system to better recognize severity of 
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                        illness and changes to the relative weights based on costs rather than charges are improving the accuracy of the payment rates in the IPPS. We agree with MedPAC that these refinements should be pursued. Although we continue to caution that any prospective payment system based on grouping cases will always present some opportunities for providers to specialize in cases they believe have higher margins, we believe that the changes we have adopted and the continuing reforms we are proposing in this proposed rule for FY 2009 will improve payment accuracy and reduce financial incentives to create specialty hospitals. We refer readers to section II.D. of the FY 2008 IPPS final rule with comment period for a full discussion of how the MS-DRG system was established based on severity levels of illness (72 FR 47141). D. MS-DRG Documentation and Coding Adjustment, Including the Applicability to the Hospital-Specific Rates and the Puerto Rico-Specific Standardized Amount 1. MS-DRG Documentation and Coding Adjustment As stated above, we adopted the new MS-DRG patient classification system for the IPPS, effective October 1, 2007, to better recognize severity of illness in Medicare payment rates. Adoption of the MS-DRGs resulted in the expansion of the number of DRGs from 538 in FY 2007 to 745 in FY 2008. By increasing the number of DRGs and more fully taking into account severity of illness in Medicare payment rates, the MS-DRGs encourage hospitals to improve their documentation and coding of patient diagnoses. In the FY 2008 IPPS final rule with comment period (72 FR 47175 through 47186), which appeared in the 
                        **Federal Register**
                         on August 22, 2007, we indicated that we believe the adoption of the MS-DRGs had the potential to lead to increases in aggregate payments without a corresponding increase in actual patient severity of illness due to the incentives for improved documentation and coding. In that final rule with comment period, using the Secretary's authority under section 1886(d)(3)(A)(vi) of the Act to maintain budget neutrality by adjusting the standardized amount to eliminate the effect of changes in coding or classification that do not reflect real change in case-mix, we established prospective documentation and coding adjustments of −1.2 percent for FY 2008, −1.8 percent for FY 2009, and −1.8 percent for FY 2010. On September 29, 2007, the TMA, Abstinence Education, and QI Programs Extension Act of 2007, Pub. L. 110-90, was enacted. Section 7 of Pub. L. 110-90 included a provision that reduces the documentation and coding adjustment for the MS-DRG system that we adopted in the FY 2008 IPPS final rule with comment period to −0.6 percent for FY 2008 and −0.9 percent for FY 2009. To comply with the provision of section 7 of Pub. L. 110-90, in a final rule that appeared in the 
                        **Federal Register**
                         on November 27, 2007 (72 FR 66886), we changed the IPPS documentation and coding adjustment for FY 2008 to −0.6 percent, and revised the FY 2008 payment rates, factors, and thresholds accordingly, with these revisions effective October 1, 2007. For FY 2009, Pub. L. 110-90 requires a documentation and coding adjustment of −0.9 percent instead of the −1.8 percent adjustment specified in the FY 2008 IPPS final rule with comment period. As required by statute, we are applying a documentation and coding adjustment of −0.9 percent to the FY 2009 IPPS national standardized amounts. The documentation and coding adjustments established in the FY 2008 IPPS final rule with comment period are cumulative. As a result, the −0.9 percent documentation and coding adjustment in FY 2009 is in addition to the −0.6 percent adjustment in FY 2008, yielding a combined effect of −1.5 percent. 2. Application of the Documentation and Coding Adjustment to the Hospital-Specific Rates Under section 1886(d)(5)(D)(i) of the Act, SCHs are paid based on whichever of the following rates yields the greatest aggregate payment: The Federal national rate; the updated hospital-specific rate based on FY 1982 costs per discharge; the updated hospital-specific rate based on FY 1987 costs per discharge; or the updated hospital-specific rate based on FY 1996 costs per discharge. Under section 1886(d)(5)(G) of the Act, MDHs are paid based on the Federal national rate or, if higher, the Federal national rate plus 75 percent of the difference between the Federal national rate and the updated hospital-specific rate based on the greater of either the FY 1982, 1987, or 2002 costs per discharge. In the FY 2008 IPPS final rule with comment period, we established a policy of applying the documentation and coding adjustment to the hospital-specific rates. In that rule, we indicated that because SCHs and MDHs use the same DRG system as all other hospitals, we believe they should be equally subject to the budget neutrality adjustment that we are applying for adoption of the MS-DRGs to all other hospitals. In establishing this policy, we cited our authority under section 1886(d)(3)(A)(vi) of the Act, which provides the authority to adjust “the standardized amount” to eliminate the effect of changes in coding or classification that do not reflect real change in case-mix. However, in a final rule that appeared in the 
                        **Federal Register**
                         on November 27, 2007 (72 FR 66886), we rescinded the application of the documentation and coding adjustment to the hospital-specific rates retroactive to October 1, 2007. In that final rule, we indicated that, while we still believe it would be appropriate to apply the documentation and coding adjustment to the hospital-specific rates, upon further review we decided that application of the documentation and coding adjustment to the hospital-specific rates is not consistent with the plain meaning of section 1886(d)(3)(A)(vi) of the Act, which only mentions adjusting “the standardized amount” and does not mention adjusting the hospital-specific rates. We continue to have concerns about this issue. Because hospitals paid based on the hospital-specific rate use the same MS-DRG system as other hospitals, we believe they have the potential to realize increased payments from coding improvements that do not reflect real increases in patients' severity of illness. In section 1886(d)(3)(A)(vi) of the Act, Congress stipulated that hospitals paid based on the standardized amount should not receive additional payments based on the effect of documentation and coding changes that do not reflect real changes in case-mix. Similarly, we believe that hospitals paid based on the hospital-specific rate should not have the potential to realize increased payments due to documentation and coding improvements that do not reflect real increases in patients' severity of illness. While we continue to believe that section 1886(d)(3)(A)(vi) of the Act does not provide explicit authority for application of the documentation and coding adjustment to the hospital-specific rates, we believe that we have the authority to apply the documentation and coding adjustment to the hospital-specific rates using our special exceptions and adjustment authority under section 1886(d)(5)(I)(i) of the Act. The special exceptions and adjustment authority authorizes us to provide “for such other exceptions and adjustments to [IPPS] payment amounts * * * as the Secretary deems appropriate.” In light of this authority, for the FY 2010 rulemaking, we plan to 
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                        examine our FY 2008 claims data for hospitals paid based on the hospital-specific rate. If we find evidence of significant increases in case-mix for patients treated in these hospitals, we would consider proposing application of the documentation and coding adjustments to the FY 2010 hospital-specific rates under our authority in section 1886(d)(5)(I)(i) of the Act. As noted previously, the documentation and coding adjustments established in the FY 2008 IPPS final rule with comment period are cumulative. For example, the −0.9 percent documentation and coding adjustment to the national standardized amount in FY 2009 is in addition to the −0.6 percent adjustment made in FY 2008, yielding a combined effect of −1.5 percent in FY 2009. Given the cumulative nature of the documentation and coding adjustments, if we were to propose to apply the documentation and coding adjustment to the FY 2010 hospital-specific rates, it may involve applying the FY 2008 and FY 2009 documentation and coding adjustments (−1.5 percent combined) plus the FY 2010 documentation and coding adjustment, discussed in the FY 2008 IPPS final rule with comment period, to the FY 2010 hospital-specific rates. 3. Application of the Documentation and Coding Adjustment to the Puerto Rico-Specific Standardized Amount Puerto Rico hospitals are paid based on 75 percent of the national standardized amount and 25 percent of the Puerto Rico-specific standardized amount. As noted previously, the documentation and coding adjustment we adopted in the FY 2008 IPPS final rule with comment period relied upon our authority under section 1886(d)(3)(A)(vi) of the Act, which provides the authority to adjust “the standardized amounts computed under this paragraph” to eliminate the effect of changes in coding or classification that do not reflect real change in case-mix. Section 1886(d)(3)(A)(vi) of the Act applies to the national standardized amounts computed under section 1886(d)(3) of the Act, but does not apply to the Puerto Rico-specific standardized amount computed under section 1886(d)(9)(C) of the Act. In calculating the FY 2008 payment rates, we made an inadvertent error and applied the FY 2008 −0.6 percent documentation and coding adjustment to the Puerto Rico-specific standardized amount, relying on our authority under section 1886(d)(3)(A)(vi) of the Act. We are currently in the process of developing a 
                        **Federal Register**
                         notice to correct that error in the Puerto Rico-specific standardized amount for FY 2008 retroactive to October 1, 2007. While section 1886(d)(3)(A)(vi) of the Act is not applicable to the Puerto Rico-specific standardized amount, we believe that we have the authority to apply the documentation and coding adjustment to the Puerto Rico-specific standardized amount using our special exceptions and adjustment authority under section 1886(d)(5)(I)(i) of the Act. Similar to SCHs and MDHs that are paid based on the hospital-specific rate, discussed in section II.D.2. of this preamble, we believe that Puerto Rico hospitals that are paid based on the Puerto Rico-specific standardized amount should not have the potential to realize increased payments due to documentation and coding improvements that do not reflect real increases in patients' severity of illness. Consistent with the approach described for SCHs and MDHs in section II.D.2. of the preamble of this proposed rule, for the FY 2010 rulemaking, we plan to examine our FY 2008 claims data for hospitals in Puerto Rico. If we find evidence of significant increases in case-mix for patients treated in these hospitals, we would consider proposing application of the documentation and coding adjustments to the FY 2010 Puerto Rico-specific standardized amount under our authority in section 1886(d)(5)(I)(i) of the Act. As noted previously, the documentation and coding adjustments established in the FY 2008 IPPS final rule with comment period are cumulative. Given the cumulative nature of the documentation and coding adjustments, if we were to propose to apply the documentation and coding adjustment to the FY 2010 Puerto Rico-specific standardized amount, it may involve applying the FY 2008 and FY 2009 documentation and coding adjustments (−1.5 percent combined) plus the FY 2010 documentation and coding adjustment, discussed in the FY 2008 IPPS final rule with comment period, to the FY 2010 Puerto Rico-specific standardized amount. 4. Potential Additional Payment Adjustments in FYs 2010 Through 2012 Section 7 of Pub. L.110-90 also provides for payment adjustments in FYs 2010 through 2012 based upon a retrospective evaluation of claims data from the implementation of the MS-DRG system. If, based on this retrospective evaluation, the Secretary finds that in FY 2008 and FY 2009, the actual amount of change in case-mix that does not reflect real change in underlying patient severity differs from the statutorily mandated documentation and coding adjustments implemented in those years, the law requires the Secretary to adjust payments for discharges occurring in FYs 2010 through 2012 to offset the estimated amount of increase or decrease in aggregate payments that occurred in FY 2008 and FY 2009 as a result of that difference, in addition to making an appropriate adjustment to the standardized amount under section 1886(d)(3)(A)(vi) of the Act. In order to implement these requirements of section 7 of Pub. L. 110-90, we are planning a thorough retrospective evaluation of our claims data. Results of this evaluation would be used by our actuaries to determine any necessary payment adjustments in FYs 2010 through 2012 to ensure the budget neutrality of the MS-DRG implementation for FY 2008 and FY 2009, as required by law. We are currently developing our analysis plans for this effort. We intend to measure and corroborate the extent of the overall national average changes in case-mix for FY 2008 and FY 2009. We expect part of this overall national average change would be attributable to underlying changes in actual patient severity and part would be attributable to documentation and coding improvements under the MS-DRG system. In order to separate the two effects, we plan to isolate the effect of shifts in cases among base DRGs from the effect of shifts in the types of cases within base DRGs. The shifts among base DRGs are the result of changes in principal diagnoses while the shifts within base DRGs are the result of changes in secondary diagnoses. Because we expect most of the documentation and coding improvements under the MS-DRG system will occur in the secondary diagnoses, the shifts among base DRGs are less likely to be the result of the MS-DRG system and the shifts within base DRGs are more likely to be the result of the MS-DRG system. We also anticipate evaluating data to identify the specific MS-DRGs and diagnoses that contributed significantly to the improved documentation and coding payment effect and to quantify their impact. This step would entail analysis of the secondary diagnoses driving the shifts in severity within specific base DRGs. While we believe that the data analysis plan described previously will produce an appropriate estimate of the extent of case-mix changes resulting from documentation and coding improvements, we may also decide, if feasible, to use historical data from our Hospital Payment Monitoring Program 
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                        (HPMP) to corroborate the within base DRG shift analysis. The HPMP is supported by the Medicare Clinical Data Abstraction Center (CDAC). From 1999 to 2007, the CDAC obtained medical records for a sample of discharges as part of our hospital monitoring activities. These data were collected on a random sample of between 30,000 to 50,000 hospital discharges per year. The historical CDAC data could be used to develop an upper bound estimate of the trend in real case-mix growth (that is, real change in underlying patient severity) prior to implementation of the MS-DRGs. We welcome public comments on our analysis plans, as well as suggestions on other possible approaches for conducting a retrospective analysis to identify the amount of case-mix changes that occurred in FY 2008 and FY 2009 that did not reflect real increases in patients' severity of illness. Our analysis, findings, and any resulting proposals to adjust payments for discharges occurring in FYs 2010 through 2012 to offset the estimated amount of increase or decrease in aggregate payments that occurred in FY 2008 and FY 2009 will be discussed in future years' rulemakings. E. Refinement of the MS-DRG Relative Weight Calculation 1. Background In the FY 2008 IPPS final rule with comment period (72 FR 47188), we continued to implement significant revisions to Medicare's inpatient hospital rates by basing relative weights on hospitals' estimated costs rather than on charges. We continued our 3-year transition from charge-based relative weights to cost-based relative weights. Beginning in FY 2007, we implemented relative weights based on cost report data instead of based on charge information. We had initially proposed to develop cost-based relative weights using the hospital-specific relative value cost center (HSRVcc) methodology as recommended by MedPAC. However, after considering concerns raised in the public comments, we modified MedPAC's methodology to exclude the hospital-specific relative weight feature. Instead, we developed national CCRs based on distinct hospital departments and engaged a contractor to evaluate the HSRVcc methodology for future consideration. To mitigate payment instability due to the adoption of cost-based relative weights, we decided to transition cost-based weights over 3 years by blending them with charge-based weights beginning in FY 2007. In FY 2008, we continued our transition by blending the relative weights with one-third charge-based weights and two-thirds cost-based weights. Also, in FY 2008, we adopted severity-based MS-DRGs, which increased the number of DRGs from 538 to 745. Many commenters raised concerns as to how the transition from charge-based weights to cost-based weights would continue with the introduction of new MS-DRGs. We decided to implement a 2-year transition for the MS-DRGs to coincide with the remainder of the transition to cost-based relative weights. In FY 2008, 50 percent of the relative weight for each DRG was based on the CMS DRG relative weight and 50 percent was based on the MS-DRG relative weight. We refer readers to the FY 2007 IPPS final rule (71 FR 47882) for more detail on our final policy for calculating the cost-based DRG relative weights and to the FY 2008 IPPS final rule with comment period (72 FR 47199) for information on how we blended relative weights based on the CMS DRGs and MS-DRGs. As we transitioned to cost-based relative weights, some commenters raised concerns about potential bias in the weights due to “charge compression,” which is the practice of applying a higher percentage charge markup over costs to lower cost items and services, and a lower percentage charge markup over costs to higher cost items and services. As a result, the cost-based weights would undervalue high cost items and overvalue low cost items if a single CCR is applied to items of widely varying costs in the same cost center. To address this concern, in August 2006, we awarded a contract to RTI to study the effects of charge compression in calculating the relative weights and to consider methods to reduce the variation in the CCRs across services within cost centers. RTI issued an interim draft report in March 2007 which was posted on the CMS Web site with its findings on charge compression. In that report, RTI found that a number of factors contribute to charge compression and affect the accuracy of the relative weights. RTI found inconsistent matching of charges in the Medicare cost report and their corresponding charges in the MedPAR claims for certain cost centers. In addition, there was inconsistent reporting of costs and charges among hospitals. For example, some hospitals would report costs and charges for devices and medical supplies in the Medical Supplies Charged to Patients cost center, while other hospitals would report those costs and charges in their related ancillary departments such as Operating Room or Radiology. RTI also found evidence that certain revenue codes within the same cost center had significantly different markup rates. For example, within the Medicare Supplies Charged to Patients cost center, revenue codes for devices, implantables, and prosthetics had different markup rates than the other medical supplies in that cost center. RTI's findings demonstrated that charge compression exists in several CCRs, most notably in the Medical Supplies and Equipment CCR. RTI offered short-term, medium-term, and long-term recommendations to mitigate the effects of charge compression. RTI's short-term recommendations included expanding the distinct hospital CCRs to 19 by disaggregating the “Emergency Room” and “Blood and Blood Products” from the Other Services cost center and by estimating regression-based CCRs to disaggregate Medical Supplies, Drugs, and Radiology cost centers. RTI recommended, for the medium-term, to expand the MedPAR file to include separate fields that disaggregate several existing charge departments. In addition, RTI recommended improving hospital cost reporting instructions so that hospitals can properly report costs in the appropriate cost centers. RTI's long-term recommendations included adding new cost centers to the Medicare cost report, such as adding a “Devices, Implants and Prosthetics” line under “Medical Supplies Charged to Patients” and a “CT Scanning and MRI” subscripted line under “Radiology-Diagnostics”. Among RTI's short-term recommendations, for FY 2008, we expanded the number of distinct hospital department CCRs from 13 to 15 by disaggregating “Emergency Room” and “Blood and Blood Products” from the Other Services cost center as these lines already exist on the hospital cost report. Furthermore, in an effort to improve consistency between costs and their corresponding charges in the MedPAR file, we moved the costs for cases involving electroencephalography (EEG) from the Cardiology cost center to the Laboratory cost center group which corresponds with the EEG MedPAR claims categorized under the Laboratory charges. We also agreed with RTI's recommendations to revise the Medicare cost report and the MedPAR file as a long-term solution for charge compression. We stated that, in the upcoming year, we would consider additional lines to the cost report and additional revenue codes for the MedPAR file. We did not adopt RTI's short-term recommendation to create four 
                        ( print page 23543)
                        additional regression-based CCRs for several reasons, even though we had received comments in support of the regression-based CCRs as a means to immediately resolve the problem of charge compression, particularly within the Medical Supplies and Equipment CCR. We were concerned that RTI's analysis was limited to charges on hospital inpatient claims while typically hospital cost report CCRs combine both inpatient and outpatient services. Further, because both the IPPS and OPPS rely on cost-based weights, we preferred to introduce any methodological adjustments to both payment systems at the same time. We have since expanded RTI's analysis of charge compression to incorporate outpatient services. RTI has been evaluating the cost estimation process for the OPPS cost-based weights, including a reassessment of the regression-based CCR models using both outpatient and inpatient charge data. The RTI report was finalized at the conclusion of our proposed rule development process and is expected to be posted on the CMS Web site in the near future. We welcome comments on this report. A second reason that we did not implement regression-based CCRs at the time of the FY 2008 IPPS final rule with comment period was our inability to investigate how regression-based CCRs would interact with the implementation of MS-DRGs. We stated that we would consider the results of the second phase of the RAND study as we prepared for the FY 2009 IPPS rulemaking process. The purpose of the RAND study was to analyze how the relative weights would change if we were to adopt regression-based CCRs to address charge compression while simultaneously adopting an HSRV methodology using fully phased-in MS-DRGs. We had intended to include a detailed discussion of RAND's study in this FY 2009 IPPS proposed rule. However, due to some delays in releasing identifiable data to the contractor under revised data security rules, the report on this second stage of RAND's analysis was not completed in time for the development of this proposed rule. Therefore, we continue to have the same concerns with respect to uncertainty about how regression-based CCRs would interact with the MS-DRGs or an HSRV methodology. Therefore, we are not proposing to adopt the regression-based CCRs or an HSRV methodology in this FY 2009 IPPS proposed rule. Nevertheless, we welcome public comments on our proposals not to adopt regression-based CCRs or an HSRV methodology at this time or in the future. The RAND report on regression-based CCRs and the HSRV methodology was finalized at the conclusion of our proposed rule development process and is expected to be posted on the CMS Web site in the near future. Although we are unable to include a discussion of the results of the RAND study in this proposed rule, we welcome public comment on the report. Finally, we received public comments on the FY 2008 IPPS proposed rule raising concerns on the accuracy of using regression-based CCR estimates to determine the relative weights rather than the Medicare cost report. Commenters noted that regression-based CCRs would not fix the underlying mismatch of hospital reporting of costs and charges. Instead, the commenters suggested that the impact of charge compression might be mitigated through an educational initiative that would encourage hospitals to improve their cost reporting. Commenters recommended that hospitals be educated to report costs and charges in a way that is consistent with how charges are grouped in the MedPAR file. In an effort to achieve this goal, hospital associations have launched an educational campaign to encourage consistent reporting, which would result in consistent groupings of the cost centers used to establish the cost-based relative weights. The commenters requested that CMS communicate to the fiscal intermediaries/MACs that such action is appropriate. In the FY 2008 IPPS final rule with comment period, we stated that we were supportive of the educational initiative of the industry, and we encouraged hospitals to report costs and charges consistently with how the data are used to determine relative weights (72 FR 47196). We would also like to affirm that the longstanding Medicare principles of cost apportionment at 42 CFR 413.53 convey that, under the departmental method of apportionment, the cost of 
                        *each*
                         ancillary department is to be apportioned separately rather than being combined with another ancillary department (for example, combining the cost of Medical Supplies Charged to Patients with the costs of Operating Room or any other ancillary cost center. (We note that, effective for cost reporting periods starting on or after January 1, 1979, the departmental method of apportionment replaced the combination method of apportionment where all the ancillary departments were apportioned in the aggregate (Section 2200.3 of the Provider Reimbursement Manual (PRM), Part I).) Furthermore, longstanding Medicare cost reporting policy has been that hospitals must include the cost and charges of separately “chargeable medical supplies” in the Medical Supplies Charged to Patients cost center (line 55 of Worksheet A), rather than in the Operating Room, Emergency Room, or other ancillary cost centers. Routine services, which can include “minor medical and surgical supplies” (Section 2202.6 of the PRM, Part 1), and items for which a 
                        *separate*
                         charge is 
                        *not*
                         customarily made, may be directly assigned through the hospital's accounting system to the department in which they were used, or they may be included in the Central Services and Supply cost center (line 15 of Worksheet A). Conversely, the separately chargeable medical supplies should be assigned to the Medical Supplies Charged to Patients cost center on line 55. We note that not only is accurate cost reporting important for IPPS hospitals to ensure that accurate relative weights are computed, but hospitals that are still paid on the basis of cost, such as CAHs and cancer hospitals, and SCHs and MDHs must adhere to Medicare cost reporting principles as well. The CY 2008 OPPS/ASC final rule with comment period (72 FR 66601) also discussed the issue of charge compression and regression-based CCRs, and noted that RTI is currently evaluating the cost estimation process underpinning the OPPS cost-based weights, including a reassessment of the regression models using both outpatient and inpatient charges, rather than inpatient charges only. In responding to comments in the CY 2008 OPPS/ASC final rule with comment period, we emphasized that we “fully support” the educational initiatives of the industry and that we would “examine whether the educational activities being undertaken by the hospital community to improve cost reporting accuracy under the IPPS would help to mitigate charge compression under the OPPS, either as an adjunct to the application of regression-based CCRs or in lieu of such an adjustment” (72 FR 66601). However, as we stated in the FY 2008 IPPS final rule with comment period that we would consider the results of the RAND study before considering whether to adopt regression-based CCRs, in the CY 2008 OPPS/ASC final rule with comment period, we stated that we would determine whether refinements should be proposed, after reviewing the results of the RTI study. On February 29, 2008, we issued Transmittal 321, Change Request 5928, to inform the fiscal intermediaries/
                        ( print page 23544)
                        MACs of the hospital associations’ initiative to encourage hospitals to modify their cost reporting practices with respect to costs and charges in a manner that is consistent with how charges are grouped in the MedPAR file. We noted that the hospital cost reports submitted for FY 2008 may have costs and charges grouped differently than in prior years, which is allowable as long as the costs and charges are properly matched and the Medicare cost reporting instructions are followed. Furthermore, we recommended that fiscal intermediaries/MACs remain vigilant to ensure that the costs of items and services are not moved from one cost center to another without moving their corresponding charges. Due to a time lag in submittal of cost reporting data, the impact of changes in providers' cost reporting practices occurring during FY 2008 would be reflected in the FY 2011 IPPS relative weights. 2. Refining the Medicare Cost Report In developing this FY 2009 proposed rule, we considered whether there were concrete steps we could take to mitigate the bias introduced by charge compression in both the IPPS and OPPS relative weights in a way that balance hospitals’ desire to focus on improving the cost reporting process through educational initiatives with device industry interest in adopting regression-adjusted CCRs. Although RTI recommended adopting regression-based CCRs, particularly for medical supplies and devices, as a short-term solution to address charge compression, RTI also recommended refinements to the cost report as a long-term solution. RTI's draft interim March 2007 report discussed a number of options that could improve the accuracy and precision of the CCRs currently being derived from the Medicare cost report and also reduce the need for statistically-based adjustments. As mentioned in the FY 2008 IPPS final rule with comment period (72 FR 47193), we believe that RTI and many of the public commenters on the FY 2008 IPPS proposed rule concluded that, ultimately, improved and more precise cost reporting is the best way to minimize charge compression and improve the accuracy of cost weights. Therefore, in this proposed rule, we are proposing to begin making cost report changes geared to improving the accuracy of the IPPS and OPPS relative weights. However, we also received comments last year asking that we proceed cautiously with changing the Medicare cost report to avoid unintended consequences for hospitals that are paid on a cost basis (such as CAHs and, to some extent, SCHs and MDHs), and to consider the administrative burden associated with adapting to new cost reporting forms and instructions. Accordingly, we are proposing to focus at this time on the CCR for Medical Supplies and Equipment because RTI found that the largest impact on the relative weights could result from correcting charge compression for devices and implants. When examining markup differences within the Medical Supplies Charged to Patients cost center, RTI found that its “regression results provide solid evidence that if there were distinct cost centers for items, cost ratios for devices and implants would average about 17 points higher than the ratios for other medical supplies” (January 2007 RTI report, page 59). This suggests that much of the charge compression within the Medical Supplies CCR results from inclusion of medical devices that have significantly different markups than the other supplies in that CCR. Furthermore, in the FY 2007 final rule and FY 2008 IPPS final rule with comment period, the Medical Supplies and Equipment CCR received significant attention by the public commenters. Although we are proposing to make improvements to lessen the effects of charge compression only on the Medical Supplies and Equipment CCR as a first step, we are inviting public comments as to whether to make other changes to the Medicare cost report to refine other CCRs. In addition, we are open to making further refinements to other CCRs in the future. Therefore, we are proposing at this time to add only one cost center to the cost report, such that, in general, the costs and charges for relatively inexpensive medical supplies would be reported separately from the costs and charges of more expensive devices (such as pacemakers and other implantable devices). We will consider public comments submitted on this proposed rule for purposes of both the IPPS and the OPPS relative weights and, by extension, the calculation of the ambulatory surgical center (ASC) payment rates. Under the IPPS for FY 2007 and FY 2008, the aggregate CCR for supplies and equipment was computed based on line 55 for Medical Supplies Charged to Patients and lines 66 and 67 for DME Rented and DME Sold, respectively. To compute the 15 national CCRs used in developing the cost-based weights under the IPPS (explained in more detail under section II.H. of the preamble of this proposed rule), we take the costs and charges for the 15 cost groups from Worksheet C, Part I of the Medicare cost report for all hospital patients and multiply each of these 15 CCRs by the Medicare charges on Worksheet D-4 for those same cost centers to impute the Medicare cost for each of the 15 cost groups. Under this proposal, the goal would be to split the current CCR for Medical Supplies and Equipment into one CCR for medical supplies, and another CCR for devices and DME Rented and DME Sold. In considering how to instruct hospitals on what to report in the cost center for supplies and the cost center for devices, we looked at the existing criteria for what type of device qualifies for payment as a transitional pass-through device category in the OPPS. (There are no such existing criteria for devices under the IPPS.) The provisions of the regulations under § 419.66(b) state that for a medical device to be eligible for pass-through payment under the OPPS, the medical device must meet the following criteria: a. If required by the FDA, the device must have received FDA approval or clearance (except for a device that has received an FDA investigational device exemption (IDE) and has been classified as a Category B device by the FDA in accordance with §§ 405.203 through 405.207 and 405.211 through 405.215 of the regulations) or another appropriate FDA exemption. b. The device is determined to be reasonable and necessary for the diagnosis or treatment of an illness or injury or to improve the functioning of a malformed body part (as required by section 1862(a)(1)(A) of the Act). c. The device is an integral and subordinate part of the service furnished, is used for one patient only, comes in contact with human tissues, and is surgically implanted or inserted whether or not it remains with the patient when the patient is released from the hospital. d. The device is not any of the following: Equipment, an instrument, apparatus, implement, or item of this type for which depreciation and financing expenses are recovered as depreciable assets as defined in Chapter 1 of the Medicare Provider Reimbursement Manual (CMS Pub. 15-1).
                    A material or supply furnished incident to a service (for example, a suture, customized surgical kit, or clip, other than a radiological site marker).
                    Material that may be used to replace human skin (for example, a biological or synthetic material). These requirements are the OPPS criteria used to define a device for pass-through payment purposes and do not include additional criteria that are used 
                        ( print page 23545)
                        under the OPPS to determine if a candidate device is new and represents a substantial clinical improvement, two other requirements for qualifying for pass-through payment. For purposes of applying the eligibility criteria, we interpret “surgical insertion or implantation” to include devices that are surgically inserted or implanted via a natural or surgically created orifice as well as those devices that are inserted or implanted via a surgically created incision (70 FR 68630). In proposing to modify the cost report to have one cost center for medical supplies and one cost center for devices, we are proposing that hospitals would determine what should be reported in the Medical Supplies cost center and what should be reported in the Medical Devices cost center using criteria consistent with those listed above that are included under § 419.66(b), with some modification. Specifically, for purposes of the cost reporting instructions, we are proposing that an item would be reported in the device cost center if it meets the following criteria: a. If required by the FDA, the device must have received FDA approval or clearance (except for a device that has received an FDA investigational device exemption (IDE) and has been classified as a Category B device by the FDA in accordance with §§ 405.203 through 405.207 and 405.211 through 405.215 of the regulations) or another appropriate FDA exemption. b. The device is reasonable and necessary for the diagnosis or treatment of an illness or injury or to improve the functioning of a malformed body part (as required by section 1862(a)(1)(A) of the Act). c. The device is an integral and subordinate part of the service furnished, is used for one patient only, comes in contact with human tissue, is surgically implanted or inserted through a natural or surgically created orifice or surgical incision in the body, and remains in the patient when the patient is discharged from the hospital. d. The device is not any of the following: Equipment, an instrument, apparatus, implement, or item of this type for which depreciation and financing expenses are recovered as depreciable assets as defined in Chapter 1 of the Medicare Provider Reimbursement Manual (CMS Pub. 15-1).
                    A material or supply furnished incident to a service (for example, a surgical staple, a suture, customized surgical kit, or clip, other than a radiological site marker).
                    Material that may be used to replace human skin (for example, a biological or synthetic material).
                    A medical device that is used during a procedure or service and does not remain in the patient when the patient is released from the hospital. We are proposing to select the existing criteria for what type of device qualifies for payment as a transitional pass-through device under the OPPS as a basis for instructing hospitals on what to report in the cost center for Medical Supplies Charged to Patients or the cost center for Medical Devices Charged to Patients because these criteria are concrete and already familiar to the hospital community. However, the key difference between the existing criteria for devices that are eligible for pass-through payment under the OPPS at § 419.66(b) and our proposed criteria stated above to be used for cost reporting purposes is that the device that is implanted 
                        *remains in the patient when the patient is discharged from the hospital*. Essentially, we are proposing to instruct hospitals to report only 
                        *implantable*
                         devices that remain in the patient at discharge in the cost center for devices. All other devices and non-routine supplies which are separately chargeable would be reported in the medical supplies cost center. We believe that defining a device for cost reporting purposes based on criteria that specify implantation and adding that the device must remain in the patient upon discharge would have the benefit of capturing virtually all costly implantable devices (for example, implantable cardioverter defibrillators (ICDs), pacemakers, and cochlear implants) for which charge compression is a significant concern. However, we acknowledge that a definition of device based on whether an item is implantable and remains in the patient could, in some cases, include items that are relatively inexpensive (for example, urinary catheters, fiducial markers, vascular catheters, and drainage tubes), and which many would consider to be supplies. Thus, some modest amount of charge compression could still be present in the cost center for devices if the hospital does not have a uniform markup policy. In addition, requiring as a cost reporting criterion that the device is to remain in the patient at discharge could exclude certain technologies that are moderately expensive (for example, cryoablation probes, angioplasty catheters, and cardiac echocardiography catheters, which do not remain in the patient upon discharge). Therefore, some charge compression could continue for these technologies. We believe this limited presence of charge compression is acceptable, given that the proposed definition of device for cost reporting purposes would isolate virtually all of the expensive items, allowing them to be separately reported from most inexpensive supplies. The criteria we are proposing above for instructing hospitals as to what to report in the device cost center specify that a device is not a material or supply furnished incident to a service (for example, a surgical staple, a suture, 
                        *customized surgical kit*, or clip, other than a radiological site marker) (emphasis added). We understand that hospitals may sometimes receive surgical kits from device manufacturers that consist of a high-cost primary implantable device, external supplies required for operation of the device, and other disposable surgical supplies required for successful device implantation. Often the device and the attending supplies are included on a single invoice from the manufacturer, making it difficult for the hospital to determine the cost of each item in the kit. In addition, manufacturers sometimes include with the primary device other free or “bonus” items or supplies that are not an integral and necessary part of the device (that is, not actually required for the safe surgical implantation and subsequent operation of that device). (We note that arrangements involving free or bonus items or supplies may implicate the Federal anti-kickback statue, depending on the circumstances.) One option is for the hospital to split the total combined charge on the invoice in a manner that the hospital believes best identifies the cost of the device alone. However, because it may be difficult for hospitals to determine the respective costs of the actual device and the attending supplies (whether they are required for the safe surgical implantation and subsequent operation of that device or not), we are soliciting comments with respect to how supplies, disposable or otherwise, that are part of surgical kits should be reported. We are distinguishing between such supplies that are an integral and necessary part of the primary device (that is, required for the safe surgical implantation and subsequent operation of that device) from other supplies that are not directly related to the implantation of that device, but may be included by the device manufacturer with or without charge as “perks” along with the kit. If it is difficult to break out the costs and charges of these lower cost items that are an integral and necessary 
                        ( print page 23546)
                        part of the primary device, we would consider allowing hospitals to report the costs and charges of these lower cost supplies along with the costs and charges of the more expensive primary device in the cost report cost center for implantable devices. However, to the extent that device manufacturers could be encouraged to refine their invoicing practices to break out the charges and costs for the lower cost supplies and the higher cost primary device separately, so that hospitals need not “guesstimate” the cost of the device, this would facilitate more accurate cost reporting and, therefore, the calculation of more accurate cost-based weights. Under either scenario, even for an aggregated invoice that contains an expensive device, we believe that RTI's findings of significant differences in supply CCRs for hospitals with a greater percentage of charges in device revenue codes demonstrate that breaking the Medical Supplies Charged to Patients cost center into two cost centers and using appropriate revenue codes for devices, and walking those costs to the new Implantable Devices Charged to Patients cost center, will result in an increase in estimated device costs. In summary, we are proposing to modify the cost report to have one cost center for Medical Supplies Charged to Patients and one cost center for Implantable Devices Charged to Patients. We are proposing to instruct hospitals to report only devices that meet the four criteria listed above (specifically including that the device is implantable and remains in the patient at discharge) in the cost center for Implantable Devices Charged to Patients. All other devices and nonchargeable supplies would be reported in the Medical Supplies cost center. This would allow for two distinct CCRs, one for medical supplies and one for implantable devices and DME rented and DME sold. However, we are also soliciting comments on alternative approaches that could be used in conjunction with or in lieu of the four proposed criteria for distinguishing between what should be reported in the cost center for Implantable Devices and Medical Supplies, respectively. Another option we are considering would distinguish between high-cost and low-cost items based on a cost threshold. Under this methodology, we would also have one cost center for Medical Supplies and one cost center for Devices, but we would instruct hospitals to report items that are not movable equipment or a capital expense but are above a certain cost threshold in the cost center for Devices. Items costing below that threshold would be reported in the cost center for Medical Supplies. Establishing a cost threshold for cost reporting purposes would directly address the problem of charge compression and would enable hospitals to easily determine whether an item should be reported in the supply or the device cost center. A cost threshold would also potentially allow a broader variety of expensive, single use devices that do not remain in the patient at discharge to be reported in the device cost center (such as specialized catheters or ablation probes). While we have a number of concerns with the cost threshold approach, we are nevertheless soliciting public comments on whether such an approach would be worthwhile to pursue. Specifically, we are concerned that establishing a single cost threshold for pricing devices could possibly be inaccurate across hospitals. Establishing a threshold would require identifying a cost at which hospitals would begin applying reduced markup policies. Currently, we do not have data from which to derive a threshold. We have anecdotal reports that hospitals change their markup thresholds between $15,000 and $20,000 in acquisition costs. Recent research on this issue indicated that hospitals with average inpatient discharges in DRGs with supply charges greater than $15,000, $20,000, and $30,000 have higher supply CCRs (Advamed March 2006). Furthermore, although a cost threshold directly addresses charge compression, it may not eliminate all charge compression from the device cost center because a fixed cost threshold may not accurately capture differential markup policies for an individual hospital. At the same time, we are also concerned that establishing a cost threshold may interfere with the pricing practices of device manufacturers in that the prices for certain devices or surgical kits could be inflated to ensure that the devices met the cost threshold. We believe our proposed approach of identifying a group of items that are relatively expensive based on the existing criteria for OPPS device pass-through payment status, rather than adopting a cost threshold, would not influence pricing by the device industry. In addition, if a cost threshold were adopted for distinguishing between high-cost devices and low-cost supplies on the cost report, we would need to periodically reassess the threshold for changes in markup policies and price inflation over time. Another option for distinguishing between high-cost and low-cost items for purposes of the cost report would be to divide the Medical Supplies cost center based on markup policies by placing items with lower than average markups in a separate cost center. This approach would center on documentation requirements for differential charging practices that would lead hospitals to distinguish between the reporting of supplies and devices on different cost report lines. That is, because charge compression results from the different markup policies that hospitals apply to the supplies and devices they use based on the estimated costs of those supplies and devices, isolating supplies and devices with different markup policies mitigates aggregation in markup policies that cause charge compression and is specific to a hospital's internal accounting and pricing practices. If requested by the fiscal intermediaries/MACs at audit, hospitals could be required to submit documentation of their markup policies to justify the way they have reported relatively inexpensive supplies on one line and more expensive devices on the other line. We believe that it should not be too difficult for hospitals to document their markup practices because, as was pointed out by many commenters since the implementation of cost-based weights, the source of charge compression is varying markup practices. Greater knowledge of the specifics of hospital markup practices may allow ultimately for development of standard cost reporting instructions that instruct hospitals to report an item as a device or a supply based on the type of markup applied to that item. This option related to markup practices, the proposal to define devices based on four specific criteria, and the third alternative that would establish a cost threshold for purposes of distinguishing between high-cost and low-cost items, could be utilized separately or in some combination for purposes of cost report modification. Again, we are soliciting comments on these alternative approaches. We are also interested in other recommendations for appropriate cost reporting improvements that address charge compression. 3. Timeline for Revising the Medicare Cost Report As mentioned in the FY 2008 IPPS final rule with comment period (72 FR 47198), we have begun a comprehensive review of the Medicare hospital cost report, and the proposed splitting of the current cost center for Medical Supplies Charged to Patients into one line for Medical Supplies Charged to Patients and another line for Implantable Devices Charged to Patients, is part of 
                        ( print page 23547)
                        our initiative to update and revise the hospital cost report. Under an effort initiated by CMS to update the Medicare hospital cost report to eliminate outdated requirements in conjunction with the Paperwork Reduction Act, we plan to propose the actual changes to the cost reporting form, the attending cost reporting software, and the cost report instructions in Chapter 36 of the Medicare Provider Reimbursement Manual (PRM), Part II. We expect the proposed revision to the Medicare hospital cost report to be issued after publication of this IPPS proposed rule. If we were to adopt as final our proposal to create one cost center for Medical Supplies Charged to Patients and one cost center for Implantable Devices Charged to Patients in the FY 2009 IPPS final rule, the cost report forms and instructions would reflect those changes. We expect the revised cost report would be available for hospitals to use when submitting cost reports during FY 2009 (that is, for cost reporting periods beginning on or after October 1, 2008). Because there is approximately a 3-year lag between the availability of cost report data for IPPS and OPPS ratesetting purposes and a given fiscal year, we may be able to derive two distinct CCRs, one for medical supplies and one for devices, for use in calculating the FY 2012 IPPS relative weights and the CY 2012 OPPS relative weights. 4. Revenue Codes Used in the MedPAR File An important first step in RTI's study (as explained in its draft interim March 2007 report) was determining how well the cost report charges used to compute CCRs matched to the charges in the MedPAR file. This match (or lack thereof) directly affects the accuracy of the DRG cost estimates because MedPAR charges are multiplied by CCRs to estimate cost. RTI found inconsistent reporting between the cost reports and the claims data for charges in several ancillary departments (Medical Supplies, Operating Room, Cardiology, and Radiology). For example, the data suggested that some hospitals often include costs and charges for devices and other medical supplies within the Medicare cost report cost centers for Operating Room, Radiology, or Cardiology, while other hospitals include them in the Medical Supplies Charged to Patients cost center. While the educational initiative undertaken by the national hospital associations is encouraging hospitals to consistently report costs and charges for devices and other medical supplies only in the Medical Supplies Charged to Patients cost center, equal attention must be paid to the way in which charges are grouped by hospitals in the MedPAR file. Several commenters on the FY 2008 IPPS proposed rule supported RTI's recommendation of including additional fields in the MedPAR file to disaggregate certain cost centers. One commenter stated that the assignment of revenue codes and charges to revenue centers in the MedPAR file should be reviewed and changed to better reflect hospital accounting practices as reflected on the cost report (72 FR 47198). In an effort to improve the match between the costs and charges included on the cost report and the charges in the MedPAR file, we are recommending that certain revenue codes be used for items reported in the proposed Medical Supplies Charged to Patients cost center and the proposed Implantable Devices Charged to Patients cost center, respectively. Specifically, under the proposal to create a cost center for implantable devices that remain in the patient upon discharge, revenue codes 0275 (Pacemaker), 0276 (Intraocular Lens), and 0278 (Other Implants) would correspond to implantable devices reported in the proposed Implantable Devices Charged to Patients cost center. Items for which a hospital may have previously used revenue code 0270 (General Classification), but actually meet the proposed definition of an implantable device that remains in the patient upon discharge should instead be billed with the 0278 revenue code. Conversely, relatively inexpensive items and supplies that are not implantable and do not remain in the patient at discharge would be reported in the proposed Medical Supplies Charged to Patients cost center on the cost report, and should be billed with revenue codes 0271 (nonsterile supply), 0272 (sterile supply), and 0273 (take-home supplies), as appropriate. Revenue code 0274 (Prosthetic/Orthotic devices) and revenue code 0277 (Oxygen—Take Home) should be associated with the costs reported on lines 66 and 67 for DME—Rented and DME—Sold on the cost report. Charges associated with supplies used incident to radiology or to other diagnostic services (revenue codes 0621 and 0622 respectively) should match those items used incident to those services on the Medical Supplies Charged to Patients cost center of the cost report, because, under this proposal, supplies furnished incident to a service would be reported in the Medical Supplies Charged to Patients cost center (see item b. listed above, in the proposed definition of a device). A revenue code of 0623 for surgical dressings would similarly be associated with the costs and charges of items reported in the proposed Medical Supplies Charged to Patients cost center, while a revenue code of 0624 for FDA investigational device, if that device does 
                        *not*
                         remain in the patient upon discharge, could be associated with items reported on the Medical Supplies Charged to Patients cost center as well. In general, if an item is reported as an implantable device on the cost report, the associated charges should be recorded in the MedPAR file with either revenue codes 0275 (Pacemaker), 0276 (Intraocular Lens), or 0278 (Other Implants). Likewise, items reported as Medical Supplies should receive an appropriate revenue code indicative of supplies. We understand that many of these revenue codes have been in existence for many years and have been added for purposes unrelated to the goal of refining the calculation of cost-based weights. Accordingly, we acknowledge that additional instructions relating to the appropriate use of these revenue codes may need to be issued. In addition, CMS or the hospital associations may need to request new revenue codes from the National Uniform Billing Committee (NUBC). In either case, we do not believe either should delay use of the new Medical Supplies and Implantable Devices CCRs in setting payment rates. However, in light of our proposal to create two separate cost centers for Medical Supplies Charged to Patients and Implantable Devices Charged to Patients, respectively, we are soliciting comments on how the existing revenue codes or additional revenue codes could best be used in conjunction with the revised cost centers on the cost report. F. Preventable Hospital-Acquired Conditions (HACs), Including Infections 1. General In its landmark 1999 report “To Err is Human: Building a Safer Health System,” the Institute of Medicine found that medical errors, particularly hospital-acquired conditions (HACs) caused by medical errors, are a leading cause of morbidity and mortality in the United States. The report noted that the number of Americans who die each year as a result of medical errors that occur in hospitals may be as high as 98,000. The cost burden of HACs is also high. Total national costs of these errors due to lost productivity, disability, and health care costs were estimated at $17 
                        ( print page 23548)
                        billion to $29 billion.[2]
                        
                         In 2000, the CDC estimated that hospital-acquired infections added nearly $5 billion to U.S. health care costs every year.[3]
                        
                         A 2007 study found that, in 2002, 1.7 million hospital-acquired infections were associated with 99,000 deaths[4]
                        
                         Research has also shown that hospitals are not following recommended guidelines to avoid preventable hospital-acquired infections. A 2007 Leapfrog Group survey of 1,256 hospitals found that 87 percent of those hospitals do not follow recommendations to prevent many of the most common hospital-acquired infections.[5] As one approach to combating HACs, including infections, in 2005 Congress authorized CMS to adjust for Medicare IPPS hospital payments to encourage the prevention of these conditions. The preventable HAC provision at section 1886(d)(4)(D) of the Act is part of an array of Medicare value-based purchasing (VBP) tools that CMS is using to promote increased quality and efficiency of care. Those tools include measuring performance, using payment incentives, publicly reporting performance results, applying national and local coverage policy decisions, enforcing conditions of participation, and providing direct support for providers through Quality Improvement Organization (QIO) activities. CMS' application of VBP tools through various initiatives, such as this HAC provision, is transforming Medicare from a passive payer to an active purchaser of higher value health care services. We are applying these strategies for inpatient hospital care and across the continuum of care for Medicare beneficiaries. The President's FY 2009 Budget outlines another approach for addressing serious preventable adverse events (“never events”), including HACs. The President's Budget proposal would: (1) Prohibit hospitals from billing the Medicare program for “never events” and prohibit Medicare payment for these events; and (2) require hospitals to report occurrence of these events or receive a reduced annual payment update. Medicare's IPPS encourages hospitals to treat patients efficiently. Hospitals receive the same DRG payment for stays that vary in length and in the services provided, which gives hospitals an incentive to avoid unnecessary costs in the delivery of care. In many cases, complications acquired in the hospital do not generate higher payments than the hospital would otherwise receive for uncomplicated cases paid under the same DRG. To this extent, the IPPS encourages hospitals to avoid complications. However, complications, such as infections, acquired in the hospital can generate higher Medicare payments in two ways. First, the treatment of complications can increase the cost of a hospital stay enough to generate an outlier payment. However, the outlier payment methodology requires that a hospital experience a large loss on an outlier case, which serves as an incentive for hospitals to prevent outliers. Second, under the MS-DRGs that took effect in FY 2008, there are currently 258 sets of MS-DRGs that are split into 2 or 3 subgroups based on the presence or absence of a CC or an MCC. If a condition acquired during a hospital stay is one of the conditions on the CC or MCC list, the hospital currently receives a higher payment under the MS-DRGs (prior to the October 1, 2008 effective date of the HAC payment provision). (We refer readers to section II.D. of the FY 2008 IPPS final rule with comment period for a discussion of DRG reforms (72 FR 47141).) The following is an example of how an MS-DRG may be paid. Service: MS-DRG Assignment*
                                 (Examples below with CC/MCC indicate a single secondary diagnosis only)
Present on admission (status of secondary
                                 diagnosis)
Average payment (based on 50th percentile)Principal Diagnosis

$5,347.98• Intracranial hemorrhage or cerebral infarction (stroke) without CC/MCC—MS-DRG 066Principal Diagnosis
Y
6,177.43• Intracranial hemorrhage or cerebral infarction (stroke) with CC—MS-DRG 065Example Secondary Diagnosis• Dislocation of patella-open due to a fall (code 836.4 (CC))Principal Diagnosis
N
5,347.98• Intracranial hemorrhage or cerebral infarction (stroke) with CC—MS-DRG 065Example Secondary Diagnosis• Dislocation of patella-open due to a fall (code 836.4 (CC))Principal Diagnosis
Y
8,030.28• Intracranial hemorrhage or cerebral infarction (stroke) with MCC—MS-DRG 064Example Secondary Diagnosis• Stage III pressure ulcer (code 707.23 (MCC))Principal Diagnosis
N
5,347.98• Intracranial hemorrhage or cerebral infarction (stroke) with MCC—MS-DRG 064Example Secondary Diagnosis• Stage III pressure ulcer (code 707.23 (MCC))*
                             Operating amounts for a hospital whose wage index is equal to the national average.
 2. Statutory Authority Section 1886(d)(4)(D) of the Act required the Secretary to select at least two conditions by October 1, 2007, that are: (a) High cost, high volume, or both; (b) assigned to a higher paying DRG when present as a secondary diagnosis; and (c) could reasonably have been prevented through the application of evidence-based guidelines. Beginning October 1, 2008, Medicare can no longer assign an inpatient hospital discharge to 
                        ( print page 23549)
                        a higher paying MS-DRG if a selected HAC was not present on admission. That is, the case will be paid as though the secondary diagnosis was not present. (Medicare will continue to assign a discharge to a higher paying MS-DRG if the selected condition was present on admission.) Section 1886(d)(4)(D) of the Act provides that the list of conditions can be revised from time to time, as long as the list contains at least two conditions. Beginning October 1, 2007, we required hospitals to begin submitting information on Medicare claims specifying whether diagnoses were present on admission (POA). The POA indicator reporting requirement and the HACs payment provision apply to IPPS hospitals only. At this time, non-IPPS hospitals such as CAHs, LTCHs, IRFs, and hospitals in Maryland operating under waivers, among others, are exempt from POA reporting and the HAC payment provision. Throughout this section, “hospital” refers to IPPS hospitals. 3. Public Input In the FY 2007 IPPS proposed rule (71 FR 24100), we sought public input regarding conditions with evidence-based prevention guidelines that should be selected in implementing section 1886(d)(4)(D) of the Act. The public comments we received were summarized in the FY 2007 IPPS final rule (71 FR 48051 through 48053). In the FY 2008 IPPS proposed rule (72 FR 24716), we again sought formal public comment on conditions that we proposed to select. In the FY 2008 IPPS final rule with comment period (72 FR 47200 through 47218), we summarized the public comments we received on the FY 2008 IPPS proposed rule, presented our responses, selected eight conditions to which the HAC provision will initially apply, and noted that we would be seeking comments on additional HAC candidates in this proposed rule. 4. Collaborative Process CMS experts worked with public health and infectious disease professionals from the CDC to identify the candidate preventable HACs. CMS and CDC staff also collaborated on the process for hospitals to submit a POA indicator for each diagnosis listed on IPPS hospital Medicare claims. On December 17, 2007, CMS and CDC hosted a jointly sponsored HAC and POA Listening Session to receive input from interested organizations and individuals. The agenda, presentations, audio file, and written transcript of the listening session are available on the Web site at: 
                        *http://www.cms.hhs.gov/​HospitalAcqCond/​07_​EducationalResources.asp.*
                         CMS and CDC also received informal comments during the listening session and subsequently received numerous written comments. 5. Selection Criteria for HACs CMS and CDC staff evaluated each candidate condition against the criteria established by section 1886(d)(4)(D)(iv) of the Act. Cost or Volume—Medicare data [6]
                        
                         must support that the selected conditions are high cost, high volume, or both. At this point, there are no Medicare claims data indicating which secondary diagnoses were POA because POA indicator reporting began only recently; therefore, the currently available data for candidate conditions includes all secondary diagnoses. Complicating Condition (CC) or Major Complicating Condition (MCC)—Selected conditions must be represented by ICD-9-CM diagnosis codes that clearly identify the condition, are designated as a CC or an MCC, and result in the assignment of the case to an MS-DRG that has a higher payment when the code is reported as a secondary diagnosis. That is, selected conditions must be a CC or an MCC that would, in the absence of this provision, result in assignment to a higher paying MS-DRG.
                    Evidence-Based Guidelines—Selected conditions must be reasonably preventable through the application of evidence-based guidelines. By reviewing guidelines from professional organizations, academic institutions, and entities such as the Healthcare Infection Control Practices Advisory Committee (HICPAC), we evaluated whether guidelines are available that hospitals should follow to prevent the condition from occurring in the hospital.
                    Reasonably Preventable—Selected conditions must be reasonably preventable through the application of evidence-based guidelines. 6. HACs Selected in FY 2008 and Proposed Changes to Certain Codes The HACs that were selected for the HAC payment provision through the FY 2008 IPPS final rule with comment period are listed below. The payment provision for these selected HACs will take effect on October 1, 2008. We refer readers to section II.F.6. of the FY 2008 IPPS final rule with comment period (72 FR 47202 through 47218) for a detailed analysis supporting the selection of each of these HACs. 
 
  
 
  
 
 We are seeking public comments on the following refinements to two of the previously selected HACs: a. Foreign Object Retained After Surgery: Proposed Inclusion of ICD-9-CM Code 998.7 (CC) In the FY 2008 IPPS final rule with comment period (72 FR 47206), we indicated that a foreign body accidentally left in the patient during a procedure (ICD-9-CM code 998.4) was one of the conditions selected. It has come to our attention that ICD-9-CM diagnosis code 998.7 (Acute reaction to foreign substance accidentally left during a procedure) should also be included. ICD-9-CM code 998.7 describes instances in which a patient developed an acute reaction due to a retained foreign substance. Therefore, we are proposing to make this code subject to the HAC payment provision. b. Pressure Ulcers: Proposed Changes in Code Assignments As discussed in the FY 2008 IPPS final rule with comment period (72 FR 47205-47206), we referred the need for more detailed ICD-9-CM pressure ulcer codes to the CDC. The topic of expanding pressure ulcer codes to capture the stage of the ulcer was addressed at the September 27-28, 2007, meeting of the ICD-9-CM Coordination and Maintenance Committee. A summary report of this meeting is available on the Web site at: 
                        *http://www.cdc.gov/​nchs/​about/​otheract/​icd9/​maint/​maint.htm.* Numerous wound care professionals supported modifying the pressure ulcer codes to capture staging information. The stage of the pressure ulcer is a powerful predictor of severity and resource utilization. At its September 27-28, 2007 meeting, the ICD-9-CM Coordination and Maintenance Committee discussed the creation of pressure ulcer codes to capture this information. The new codes, along with their proposed CC/MCC classifications, are shown in Table 6A of the Addendum to this proposed rule. The new codes are as follows: 707.20 (Pressure ulcer, unspecified stage).
                    707.21 (Pressure ulcer stage I).
                    707.22 (Pressure ulcer stage II).
                    707.23 (Pressure ulcer stage III).
                    707.24 (Pressure ulcer stage IV). While the code titles are final, we are soliciting comment on the proposed MS-DRG classifications of these codes, as indicated in Table 6A of the Addendum to this proposed rule. We are proposing to remove the CC/MCC classifications from the current pressure ulcer codes that show the site of the ulcer (ICD-9-CM codes 707.00 through 707.09). Therefore, the following codes would no longer be a CC: 707.00 (Decubitus ulcer, unspecified site).
                    707.01 (Decubitus ulcer, elbow).
                    707.09 (Decubitus ulcer, other site). The following codes would no longer be an MCC:
                    707.02 (Decubitus ulcer, upper back).
                    707.03 (Decubitus ulcer, lower back).
                    707.04 (Decubitus ulcer, hip).
                    707.05 (Decubitus ulcer, buttock).
                    707.06 (Decubitus ulcer, ankle).
                    707.07 (Decubitus ulcer, heel). We are proposing to instead assign the CC/MCC classifications to the stage of the pressure ulcer as shown in Table 6A of the Addendum to this proposed rule. We are proposing to classify ICD-9-CM codes 707.23 and 707.24 as MCCs. We are proposing to classify codes 707.20, 707.21, and 707.22 as non-CCs. Therefore, we are proposing that, beginning October 1, 2008, the codes used to make MS-DRG adjustments for pressure ulcers under the HAC provision would include the proposed MCC codes 707.23 and 707.24. 7. HACs Under Consideration as Additional Candidates CMS and CDC have diligently worked together and with other stakeholders to identify additional HACs that might appropriately be subject to the HAC payment provision. If the additional candidate HACs are selected in the FY 2009 IPPS final rule, the payment provision will take effect for these candidate HACS on October 1, 2008. The statutory criteria for each HAC candidate are presented in tabular format. Each table contains the following: HAC Candidate—We are seeking public comment on all HAC candidates.
                    Medicare Data—We are seeking public comment on the statutory criterion of high cost, high volume, or both as it applies to the HAC candidate.
                    CC/MCC—We are seeking public comment on the statutory criterion that an ICD-9-CM diagnosis code(s) clearly identifies the HAC candidate.
                    Selected Evidence-Based Guidelines—We are seeking public comment on the degree to which the HAC candidate is reasonably preventable through the application of the identified evidence-based guidelines. a. Surgical Site Infections Following Elective Surgeries 
 
  In the FY 2008 IPPS final rule with comment period (72 FR 47213), surgical site infections were identified as a broad category for consideration, and we selected mediastinitis after coronary artery bypass graft (CABG) as one of the initial eight HACs for implementation. We are now considering the addition of other surgical site infections, particularly those following elective procedures. In most cases, patients selected as candidates for elective surgeries should have a relatively low-risk profile for surgical site infections. The following elective surgical procedures are under consideration: Total Knee Replacement (81.54): ICD-9-CM codes 996.66 (CC) and 998.59 (CC)
                    Laparoscopic Gastric Bypass (44.38) and Laparoscopic Gastroenterostomy (44.39): ICD-9-CM code 998.59 (CC)
                    Ligation and Stripping of Varicose Veins (38.50 through 38.53, 38.55, 38.57, and 38.59): ICD-9-CM code 998.59 (CC) Evidence-based guidelines for preventing surgical site infections emphasize the importance of appropriately using prophylactic antibiotics, using clippers rather than razors for hair removal and tightly controlling postoperative glucose. While we are seeking public comments on the applicability of each of the statutory criteria to surgical site infections following elective procedures, we are particularly interested in receiving comments on the degree of preventability of surgical site infections following elective procedures generally, as well as specifically for those listed above. We also are seeking public comments on additional elective surgical procedures that would qualify for the HAC provision by meeting all of the statutory criteria. Based on the public comments we receive, we may select some combination of the four procedures presented here along with additional conditions that qualify and are supported by the comments. b. Legionnaires' Disease  We discussed Legionnaires’ Disease in the FY 2008 IPPS final rule with comment period (72 FR 47216). Legionnaires’ Disease is a type of pneumonia caused by the bacterium 
                        *Legionella pneumophila.*
                         It is contracted 
                        ( print page 23554)
                        by inhaling contaminated water vapor or droplets. It is not spread person to person. Individuals at risk include those who are elderly, immunocompromised, smokers, or persons with underlying lung disease. The bacterium thrives in warm aquatic environments and infections have been linked to large industrial water systems, including hospital water systems such as air conditioning cooling towers and potable water plumbing systems. Prevention depends primarily on regular monitoring and decontamination of these water systems. While we are seeking public comments regarding the applicability of each of the statutory criteria to Legionnaires' Disease, we are particularly interested in receiving comments on the degree of preventability of Legionnaires' Disease through the application of hospital water system maintenance guidelines. Legionnaires' Disease is typically acquired outside of the hospital setting and may be difficult to diagnose as present on admission. We are seeking comments on the degree to which hospital-acquired Legionnaires' Disease can be distinguished from community-acquired cases. We also are seeking public comments on additional water-borne pathogens that would qualify for the HAC provision by meeting the statutory criteria. Based on the public comments we receive, we may finalize some combination of Legionnaires' Disease and additional conditions that qualify and are supported by the public comments. c. Glycemic Control  During the December 17, 2007 HAC and POA Listening Session, one of the commenters suggested that we explore hyperglycemia and hypoglycemia as HACs for selection. NQF's list of Serious Reportable Adverse Events includes death or serious disability associated with hypoglycemia that occurs during hospitalization. Hyperglycemia and hypoglycemia are extremely common laboratory findings in hospitalized patients and can be complicating features of underlying diseases and some therapies. However, we believe that extreme forms of poor glycemic control should not occur while under medical care in the hospital setting. Thus, we are considering whether the following forms of extreme glucose derangement should be subject to the HAC payment provision: Diabetic Ketoacidosis: ICD-9-CM codes 250.10-250.13 (CC)
                    Nonketotic Hyperosmolar Coma: ICD-9-CM code 251.0 (CC)
                    Diabetic Coma: ICD-9-CM codes 250.30-250.33 (CC)
                    Hypoglycemic Coma: ICD-9-CM codes 250.30-251.0 (CC) While we are seeking public comments regarding the applicability of each of the statutory criteria to these extreme aberrations in glycemic control, we are particularly interested in receiving comments on the degree to which these extreme aberrations in glycemic control are reasonably preventable, in the hospital setting, through the application of evidence-based guidelines. Based on the public comments we receive, we may select some combination of these glycemic control-related conditions as HACs. d. Iatrogenic Pneumothorax 
 
  Iatrogenic pneumothorax refers to the accidental introduction of air into the pleural space, which is the space between the lung and the chest wall. When air is introduced into this space it partially or completely collapses the lung. Iatrogenic pneumothorax can occur during any procedure where there is the possibility of air entering pleural space, including needle biopsy of the lung, thoracentesis, central venous catheter placement, pleural biopsy, tracheostomy, and liver biopsy. Iatrogenic pneumothorax can occur secondary to positive pressure mechanical ventilation when an air sac in the lung ruptures allowing air into the pleural space. While we are seeking public comments on the applicability of each of the statutory criteria to iatrogenic pneumothorax, we are particularly interested in receiving comments on the degree to which iatrogenic pneumothorax is reasonably preventable through the application of evidence-based guidelines. Based on the public comments we receive, we may select iatrogenic pneumothorax as an HAC. e. Delirium  Delirium is a relatively abrupt deterioration in a patient's ability to sustain attention, learn, or reason. Delirium is strongly associated with aging and treatment of illnesses that are associated with hospitalizations. Delirium affects nearly half of hospital patient days for individuals age 65 and older, and approximately three-quarters of elderly individuals in intensive care units have delirium. About 14 to 24 percent of hospitalized elderly individuals have delirium at the time of admission. Having delirium is a very serious risk factor, with 1-year mortality of 35 to 40 percent, a rate as high as those associated with heart attacks and sepsis. The adverse effects of delirium routinely last for months. Delirium is a clinical diagnosis, commonly assisted by screening tests such as the Confusion Assessment Method. Well-established practices, such as reducing certain medications, reorienting the patient, assuring sensory input and sleep, and avoiding malnutrition and dehydration, prevent 30 to 40 percent of the possible cases. While we are seeking public comments on the applicability of each of the statutory criteria to delirium, we are particularly interested in receiving comments on the degree to which delirium is reasonably preventable through the application of evidence-based guidelines. Based upon the public comments we receive, we may select delirium as an HAC. f. Ventilator-Associated Pneumonia (VAP) 
 
  We discussed ventilator-associated pneumonia (VAP) in the FY 2008 IPPS final rule with comment period (72 FR 47209-47210). VAP is a serious hospital-acquired infection associated with high mortality, significantly increased hospital length of stay, and high cost. It is typically caused by the aspiration of contaminated gastric and/or oropharyngeal secretions. The presence of an endotracheal tube facilitates both the contamination of secretions as well as aspiration. During the past year, the ICD-9-CM Coordination and Maintenance Committee discussed the creation of a new ICD-9-CM code 997.31 to identify VAP. This new code is shown in Table 6A of the Addendum to this proposed rule. The lack of a specific code was one of the barriers to including VAP as an HAC that we discussed in the FY 2008 IPPS final rule with comment period. We also discussed the degree to which VAP may be reasonably preventable through the application of evidence-based guidelines. Specifically, the FY 2008 IPPS final rule with comment period referenced the American Association for Respiratory Care's Clinical Practice Guidelines at the Web site: 
                        *http://www.rcjournal.com/​cpgs/​09.03.0869.html.* To further investigate the extent to which VAP is reasonably preventable, we reviewed published clinical research. The literature, including recommendations by CDC and the HICPAC, from 2003 shows numerous prevention guidelines that can significantly reduce the incidence of VAP in the hospital setting. These guidelines include interventions such as educating staff, hand washing, using gowns and gloves, properly positioning the patient, elevating the head of the bed, changing ventilator tubing, sterilizing reusable equipment, applying chlorhexadine solution for oral decontamination, monitoring sedation daily, administering stress ulcer prophylaxis, and administering pneumococcal vaccinations. Further review of the literature, specifically regarding the proportion of VAP cases that might be preventable, revealed two large-scale analyses that were completed recently. One study concluded that an estimated 40 percent of VAP cases are preventable. A second study concluded that at least 20 percent of nosocomial infections in general (not just VAP) are preventable.[7] During the December 17, 2007 HAC and POA Listing Session, we also received comments on evidence-based guidelines for preventing VAP.
                        
                         Commenters referenced two articles [8]
                         [9]
                         that both state there is a high degree of risk associated with endotracheal tube insertions, suggesting that VAP may not always be preventable. While we are seeking public comments on the applicability of each of the statutory criteria to VAP, we are particularly interested in receiving comment on the degree to which VAP 
                        ( print page 23557)
                        is reasonably preventable through the application of evidence-based guidelines. Based on the public comments we receive, we may select VAP as an HAC. g. Deep Vein Thrombosis (DVT)/Pulmonary Embolism (PE)  We discussed deep vein thrombosis (DVT) and pulmonary embolism (PE) in the FY 2008 IPPS final rule with comment period (72 FR 47215). DVT and PE are common events. DVT occurs when a blood clot forms in the deep veins of the leg and causes local swelling and inflammation. PE occurs when a clot or a piece of a clot migrates from its original site into the lungs, causing the death of lung tissue, which can be fatal. Risk factors for DVTs and PEs include inactivity, smoking, use of oral contraceptives, prolonged bed rest, prolonged sitting with bent knees, certain types of cancer and other disease states, certain blood clotting disorders, and certain types of orthopedic and other surgical procedures. DVT is not always clinically apparent because the manifestations of pain, redness, and swelling may develop some time after the venous clot forms. As we discussed in the FY 2008 IPPS final rule with comment period, DVTs and PEs may be preventable in certain circumstances, but it is possible that a patient may have a DVT that is difficult to detect on admission. We also received comments during the December 17, 2007 HAC and POA Listening Session reiterating that not all cases of DVTs and PEs are preventable. For example, common patient characteristics such as immobility, obesity, severe vessel trauma, and venous stasis put certain trauma and joint replacement surgery patients at high risk for these conditions. In our review of the literature, we found that there are definite pharmacologic and nonpharmacologic interventions that may reduce the likelihood of developing DVTs and PEs, including exercise, compression stockings, intermittent pneumatic boots, aspirin, enoxaparin, dalteparin, heparin, coumadin, clopidogrel, and fondaparinux. However, the evidenceπbased guidelines indicate that some patients may still develop clots despite these therapies. While we are seeking public comments on the applicability of each of the statutory criteria to DVTs and PEs, we are particularly interested in receiving comments on the degree of preventability of DVTs and PEs. We are also interested in comments on determining the presence of DVT and PE at admission. Based on the public comments we receive, we may select DVTs and PEs as HACs. h. 
                        *Staphylococcus aureus*
                         Septicemia  
 
 We discuss 
                        *Staphylococcus aureus*
                         Septicemia in the FY 2008 IPPS final rule with comment period (72 FR 47208). 
                        *Staphylococcus aureus*
                         is a bacterium that lives in the nose and on the skin of a large percentage of the population. It usually does not cause physical illness, but it can cause infections ranging from superficial boils to cellulitis to pneumonia to life threatening bloodstream infections (septicemia). It usually enters the body through traumatized tissue, such as cuts or abrasions, or at the time of invasive procedures. 
                        *Staphylococcus aureus*
                         Septicemia can also be a late effect of an injury or a surgical procedure. Risk factors for developing 
                        *Staphylococcus aureus*
                         Septicemia include advanced age, debilitated state, immunocompromised status, and a history of an invasive medical procedure. CDC has developed evidence-based guidelines for the prevention of the 
                        *Staphylococcus aureus*
                         Septicemia. Most preventable cases of septicemia are primarily related to the presence of a central venous or vascular catheter. During the December 17, 2007 HAC and POA Listening Session, commenters noted that intravascular catheter-associated infections are only one cause of septicemia. Therefore, catheter-oriented evidence-based guidelines would not cover all cases of 
                        *Staphylococcus aureus*
                         Septicemia.[10] We identified evidence-based guidelines that suggest 
                        *Staphylococcus aureus*
                         Septicemia is reasonably preventable. These guidelines emphasize the importance of effective and fastidious hand washing by both staff and visitors, using gloves and gowns where appropriate, applying proper decontamination techniques, and exercising contact isolation where clinically indicated. While we are seeking public comments on the applicability of each of the statutory criteria to 
                        *Staphylococcus aureus*
                         infections generally, we are particularly interested in receiving comments on the degree of preventability of 
                        *Staphylococcus aureus*
                         infections generally, and specifically 
                        *Staphylococcus aureus*
                         Septicemia. Based on the public comments we receive, we may select 
                        *Staphylococcus aureus*
                         Septicemia as an HAC. i. 
                        *Clostridium Difficile*
                        -Associated Disease (CDAD)  We discussed 
                        *Clostridium difficile*
                        -associated disease (CDAD) in the FY 2008 IPPS final rule with comment period. 
                        *Clostridium difficile*
                         is a bacterium that colonizes the gastrointestinal (GI) tract of a certain number of healthy people. Under conditions where the normal flora of the gastrointestinal tract is altered, 
                        *Clostridium difficile*
                         can flourish and release large enough amounts of a toxin to cause severe diarrhea or even life threatening colitis. Risk factors for CDAD include prolonged use of broad spectrum antibiotics, gastrointestinal surgery, prolonged nasogastric tube insertion, and repeated enemas. CDAD can be acquired in the hospital or in the community. Its spores can live outside of the body for months and thus can be spread to other patients in the absence of meticulous hand washing by care providers and others who contact the infected patient. We continue to receive strong support in favor of selecting CDAD as an HAC. During the December 17, 2007 HAC and POA Listening Session, representatives of consumers and purchasers advocated to include CDAD as an HAC. The evidence-based guidelines for CDAD prevention emphasize that hand washing by staff and visitors and effective decontamination of environmental surfaces prevent the spread of 
                        *Clostridium difficile.*
                         While we are seeking public comments on the applicability of each of the statutory criteria to CDADs, we are particularly interested in receiving comments on the degree of preventability of CDAD. Based on the public comments we receive, we may select CDAD as an HAC. j. Methicillin-Resistant 
                        *Staphylococcus aureus*
                         (MRSA) 
 
  We discussed the special case of methicillin-resistant 
                        *Staphylococcus aureus*
                         (MRSA) in the FY 2008 IPPS final rule with comment period (72 FR 47212). In October 2007, the CDC published in the 
                        *Journal of the American Medical Association*
                         an article citing high mortality rates from MRSA, an antibiotic-resistant “superbug.” The article estimates 19,000 people died from MRSA infections in the United States in 2005. The majority of invasive MRSA cases are health care-related—contracted in hospitals or nursing homes—though community-acquired MRSA also poses a significant public health concern. Hospitals have been focused for years on controlling MRSA through the application of CDC's evidence-based guidelines outlining best practices for combating the bacterium in that setting. MRSA is currently addressed by the HAC payment provision. For every infectious condition selected, MRSA could be the etiology of that infection. For example, if MRSA were the cause of a vascular catheter-associated infection (one of the eight conditions selected in the FY 2008 IPPS final rule with comment period), the HAC payment provision would apply to that MRSA infection. As we noted in the FY 2008 IPPS final rule with comment period, colonization by MRSA is not a reasonably preventable HAC according to the current evidence-based guidelines; therefore, MRSA does not meet the reasonably preventable statutory criterion for an HAC. An estimated 32.4 percent of Americans are colonized with MRSA, which may reside in the nose or on the skin of asymptomatic carriers.[11]
                        
                         In addition, in last year's final rule with comment period, we noted that there is no CC/MCC code available for MRSA, and therefore it also does not meet the codeable CC/MCC statutory criterion for an HAC. Only when MRSA causes an infection does a codeable condition occur. However, we referenced the possibility that new codes for MRSA were being considered by the ICD-9-CM Coordination and Maintenance Committee. The creation of unique codes to capture MRSA was discussed during the March 19-20, 2008 Committee meeting. While these codes will enhance the data available and our understanding of MRSA, the availability and use of these codes will not change the fact that the mere presence of MRSA as a colonizing bacterium does not constitute an HAC. Because MRSA as a bacterium does not meet two of our statutory criteria, codeable CC/MCC and reasonably preventable through evidence-based guidelines, we are not proposing MRSA as an HAC. However, we recognize the significant public health concerns that were raised by representatives of consumers and purchasers at the HAC and POA Listening Session, and we are committed to reducing the spread of multi-drug resistant organisms, such as MRSA. In addition, we are pursuing collaborative efforts with other HHS agencies to combat MRSA. The Agency for Healthcare Research and Quality (AHRQ) has launched a new initiative in collaboration with CDC and CMS to identify and suppress the spread of MRSA and related infections. In support of this work, Congress has appropriated $5 million to fund research, implementation, management, and evaluation practices that mitigate such infections. CDC has carried out extensive research on the epidemiology of MRSA and effective techniques that could be used to treat the infection and reduce its spread. The following Web sites contain information that reflect CDC's commitment: (1) 
                        *http://www.cdc.gov/​ncidod/​dhqp/​ar_​mrsa.html*
                         (health care-associated MRSA); (2) 
                        *http://www.cdc.gov/​ncidod/​dhqp/​ar_​mrsa_​ca_​public.html*
                         (community-acquired MRSA); (3) 
                        *http://www.cdc.gov/​mmwr/​preview/​mmwrhtml/​mm4908a1.htm;*
                         and (4) 
                        *http://www.cdc.gov/​handhygiene/​.* AHRQ has made previous investments in systems research to help monitor MRSA and related infections in hospital settings, as reflected in material on the Web site at: 
                        *http://www.guideline.gov/​browse/​guideline_​index.aspx*
                         and 
                        *http://www.ahrq.gov/​clinic/​ptsafety/​pdf/​ptsafety.pdf.* 8. Present on Admission (POA) Indicator Reporting POA indicator information is necessary to identify which conditions were acquired during hospitalization for the HAC payment provision and for broader public health uses of Medicare data. Through Change Request No. 5679 (released June 20, 2007), CMS issued instructions requiring IPPS hospitals to submit the POA indicator data for all diagnosis codes on Medicare claims. Specific instructions on how to select the correct POA indicator for each diagnosis code are included in the ICD-9-CM Official Guidelines for Coding and Reporting, available at the Web site: 
                        *http://www.cdc.gov/​nchs/​datawh/​ftpserv/​ftpicd9/​icdguide07.pdf*
                         (POA 
                        ( print page 23560)
                        reporting guidelines begin on page 92). Additional instructions, including information regarding CMS's phased implementation of POA indicator reporting and application of the POA reporting options, are available at the Web site: 
                        *http://www.cms.hhs.gov/​HospitalAcqCond.* There are five POA indicator reporting options: “Y,” “N,” “W,” “U,” and “1.” Under the HAC payment provision, we are proposing to pay the CC/MCC MS-DRGs only for those HACs coded as “Y” and “W” indicators. The “Y” option indicates that the condition was present on admission. The “W” indicator affirms that the provider has determined, based on data and clinical judgment, that it is not possible to document when the onset of the condition occurred. We expect that this approach will encourage better documentation and promote the public health goals of POA reporting by providing more accurate data about the occurrence of HACs in the Medicare population. We anticipate that true clinical uncertainty will occur in only a very small number of cases. We plan to analyze how frequently the “W” indicator is used, and we leave open the possibility of proposing in future IPPS rulemaking not paying the CC/MCC MS-DRGs for HACs coded with the “W” indicator. In addition, we plan to analyze whether both the “Y” and “W” indicators are being used appropriately. Medicare program integrity initiatives closely monitor for inaccurate coding and coding that is inconsistent with medical record documentation. We are seeking public comments regarding the proposed treatment of the “Y” and “W” POA reporting options under the HAC payment provision. We are proposing to not pay the CC/MMC MS-DRGs for HACs coded with the “N” indicator. The “N” option indicates that the condition was not present on admission. We are also proposing to not pay the CC/MCC MS-DRGs for HACs coded with the “U” indicator. The “U” option indicates that the medical record documentation is insufficient to determine whether the condition was present at the time of admission. Not paying for the CC/MCC MS-DRGs for HACs that are coded with the “U” indicator is expected to foster better medical record documentation. Although we are proposing not paying the CC/MCC MS-DRG for HACs coded with the “U” indicator, we do recognize there may be some exceptional circumstances under which payment might be made. Death, elopement (leaving against medical advice), and transfers out of a hospital may preclude making an informed determination of whether an HAC was present on admission. We are seeking public comments on the potential use of the following current patient discharge status codes to identify the exceptional circumstances: Patient Discharge Status Codes
Form locator code
Code descriptor**Exception for Patient Death**20
Expired.**Exception for Patient Elopement (Leaving Against Medical Device)**7
Left against medical advice or discontinued care.**Exception for Transfer**02
Discharged/transferred to a short-term general hospital for inpatient care.03
Discharged/transferred to a skilled nursing facility (SNF) with Medicare certification in anticipation of skilled care.04
Discharged/transferred to an intermediate care facility (ICF).05
Discharged/transferred to a designated cancer center or children's hospital.06
Discharged/transferred to home under care of organized home health service organization.43
Discharged/transferred to a Federal health care facility.50
Hospice-home.51
Hospice-medical facility (certified) providing hospice level of care.61
Discharged/transferred to a hospital-based Medicare approved swing bed.62
Discharged/transferred to an inpatient rehabilitation facility (IRF) including rehabilitation distinct part units of a hospital.63
Discharged/transferred to a Medicare certified long term care hospital (LTCH).64
Discharged/transferred to a nursing facility certified under Medicaid but not certified under Medicare.65
Discharged/transferred to a psychiatric hospital or psychiatric distinct part unit of a hospital.66
Discharged/transferred to a critical access hospital (CAH).70
Discharged/transferred to another type of health care institution not otherwise defined in this code list.
 We plan to analyze whether both the “N” and “U” POA reporting options are being used appropriately. The American Health Information Management Association (AHIMA) has promulgated Standards of Ethical Coding that require accurate coding regardless of the payment implications of the diagnoses. That is, diagnoses must be reported accurately regardless of their effect on payment. Medicare program integrity initiatives closely monitor for inaccurate coding and coding inconsistent with medical record documentation. We are seeking public comments regarding the proposal to not pay the CC/MCC MS-DRGs for HACs coded with “N” and “U” indicators. 9. Enhancement and Future Issues The preventable HAC payment provision is one of CMS' VBP initiatives, as noted earlier in this section. VBP ties payment to performance through the use of incentives based on quality measures and cost of care. The implementation of VBP is rapidly transforming CMS from being a passive payer of claims to an active purchaser of higher quality, more efficient health care for Medicare beneficiaries. Other VBP initiatives include hospital pay for reporting (the RHQDAPU program discussed in section IV.B. of the preamble of this proposed rule), physician pay for reporting (the Physician Quality Reporting Initiative), home health pay for reporting, the Hospital VBP Plan Report to Congress (discussed in section IV.C. of the preamble of this proposed rule), and various VBP demonstration 
                        ( print page 23561)
                        programs across payment settings, including the Premier Hospital Quality Incentive Demonstration and the Physician Group Practice Demonstration. The success of CMS' VBP initiatives depends in large part on the validity of the performance measures and on the effectiveness of incentives in driving desired changes in behavior that will result in greater quality and efficiency. We are committed to enhancing the Medicare VBP programs, in close collaboration with stakeholders, to fulfill VBP's potential to promise of promoting higher value health care for Medicare beneficiaries. It is in this spirit that we seek public comment on enhancements to the preventable HACs payment policy and to concomitant POA indicator reporting. We welcome all public comments presenting ideas and models for combating preventable HACs through the application of VBP principles. To stimulate reflection and creativity, we present several options: Risk adjustment could be applied to make the HAC payment provision more precise.
                    Rates of HACs could be collected to obtain a more robust longitudinal measure of a hospital's incidence of these conditions.
                    POA information could be used in various ways to decrease the incidence of preventable HACs.
                    The adoption of ICD-10-PCS could facilitate more precise identification of HACs.
                    The principle behind the HAC payment provision (Medicare not paying more for preventable HACs) could be applied to Medicare payments in settings of care other than the IPPS.
                    CMS is using authority other than the HAC payment provision to address other events on the NQF's list of Serious Reportable Adverse Events. We note that we are not proposing new Medicare policy in this Enhancements and Future Issues discussion, as some of these approaches may require new statutory authority. a. Risk Adjustment To make the HAC payment provision more precise, the adjustments to payment made when one of the selected HACs occurs during the hospitalization could be further adjusted to account for patient-specific risk factors. The expected occurrence of an HAC may be greater or lesser depending on the health status of the patient, as reflected by severity of illness, presence of comorbidities, or other factors. Rather than not paying any additional amount for the complication, the additional payment for the complication could range from zero for the lowest risk patient to the full amount for the highest risk patient. An option may be individualized adjustment for every hospitalization based on the patient's unique characteristics, but state-of-the-art risk adjustment currently precludes such individualized adjustment. b. Rates of HACs Given our limited capability at present for precise patient-level risk adjustment, adding a consideration of risk to the criteria for selecting HACs could be an alternative. If primarily high-risk patients are acquiring a certain condition during hospitalization, that condition could be considered a less-fit candidate for selection. Other alternatives to precise individualized risk adjustment could be adjustment for overall facility case mix or facility case-mix by condition. At the highest level, national Medicare program data could be used to make adjustments to the payment implications for the selected HACs based on expected rates of complications. Another option could be to designate certain patient risk factors as exemptions that would prohibit or mitigate the application of the HAC payment policy to the claims of patients with those risk factors. The Medicare Hospital VBP Plan was submitted in a Report to Congress on November 21, 2007. The plan includes a performance assessment model that scores a hospital's attainment or improvement on various measures. The scores for each measure would be summed within each domain, such as the clinical process of care domain or the patient experience domain, and then the domains would be weighted and summed to yield a total performance score. The total performance score would then be translated into an incentive payment, proposed to be a certain percentage of each MS-DRG payment, using an exchange function. The plan also calls for public reporting of hospitals' performance scores by domain and in total. (Section IV.C. of this preamble included a related discussion of the Hospital VBP Plan Report to Congress.) In accordance with this hospital VBP model, a hospital's rates of HACs could be included as a domain within each hospital's total performance score. The measurement of rates over time could be a more meaningful, actionable, and fair way to adjust a hospital's MS-DRG payments for the incidence of HACs. The consequence of a higher incidence of measured conditions would be a lower VBP incentive payment. Public reporting of the measured rates of HACs would give hospitals an additional, nonfinancial incentive to prevent occurrence of the conditions to avoid lower public ratings. c. Use of POA Information Information obtained from hospitals' reporting of POA data could be used in various ways to better understand and prevent the occurrence of HACs. The POA information could be provided to health services researchers to analyze factors that lead to HACs and disseminate the best practices for prevention of HACs. At least two states, New York and California, already collect POA data from their hospitals. Comparison of the State POA data with the Medicare data could fill in gaps in the databases and yield valuable insights about POA data validity. POA data could also be used to calculate the incidence of HACs by hospital. This application of the POA data would be particularly powerful if the Medicare POA data were combined with state or private sector payer POA data. The Medicare-only or combined quality of care information could be initially shared with hospitals and thereafter publicly reported to support better healthcare decision making by Medicare beneficiaries, other health care consumers, professionals, and caregivers. d. Transition to ICD-10-PCS Accurate identification of HACs requires unambiguous and precise diagnosis codes. The current ICD-9-CM diagnosis coding system is three decades old. It is outdated and contains numerous instances of broad and vague codes. Attempts to add necessary detail to the ICD-9-CM system are inhibited by lack of expansion capacity. These factors negatively affect CMS' attempts to identify HAC cases. ICD-10-PCS codes are more precise and capture information using more current medical terminology. For example, ICD-9-CM codes for pressure ulcers do not provide information about the size, depth, or exact location of the ulcer, while ICD-10-PCS has 60 codes to capture this information. ICD-10-PCS would also provide codes, beyond the current ICD-9-CM codes, that would enable the selection of additional surgical complications and adverse drug events. e. Application of Nonpayment for HACs to Other Settings The broad principle of Medicare not paying for preventable health care-associated conditions could potentially be applied to Medicare payment settings other than IPPS hospitals. Other 
                        ( print page 23562)
                        possible settings of care might include hospital outpatient departments, SNFs, HHAs, end-stage renal disease facilities, and physician practices. The implications would be different for each setting, as each payment system is different and the reasonable preventability through the application of evidence-based guidelines would vary for candidate conditions over the different settings. However, alignment of incentives across settings of care is an important goal for all of CMS' VBP initiatives, including the HAC provision. A related application of the broad principle behind the HAC payment could be accomplished through modification to the Medicare secondary payer policy which would allow us to directly recoup from the provider that failed to prevent the occurrence of a preventable condition in one setting to pay for all or part of the necessary followup care in a second setting. This would help shield the Medicare program from inappropriately paying for the downstream effects of a preventable condition acquired in the first setting but treated in the second setting. f. Relationship to NQF's Serious Reportable Adverse Events CMS is applying its authority to address the events on the NQF's list of Serious Reportable Adverse Events (also known as “never events”). In May 2006 testimony before the Senate Finance Committee, the CMS Administrator noted that paying hospitals for serious preventable events is contrary to the promise that hospital payments should support higher quality and efficiency. There is growing consensus that health care purchasers should not be paying for these events when they occur during a hospitalization. In January 2005, HealthPartners, a Minnesota-based not-for-profit HMO, announced that it would no longer reimburse hospitals for services associated with events enumerated in the Minnesota Adverse Health Care Events Reporting Act (essentially the NQF's list of Serious Reportable Adverse Events). Further, HealthPartners' contracts preclude hospitals from seeking reimbursement from the patient for these costs. During 2007, several State hospital associations adopted policies stating that their members will not bill payers or patients when these events occur in their hospitals. In the FY 2008 IPPS final rule with comment period, we adopted several items from the NQF's list of events as HACs, including retained foreign object after surgery, air embolism, blood incompatibility, stage III and IV pressure ulcers, falls, electric shock, and burns. In this proposed rule, we are seeking public comments regarding adding hypoglycemic coma, which is closely related to NQF's listing of death or serious disability associated with hypoglycemia. However, as we discussed in the FY 2008 IPPS final rule with comment period, the HAC payment provision is not ideally suited to address every condition on the NQF's list of Serious Reportable Adverse Events. To address the events on the NQF's list beyond the effect of the HAC policy, CMS is exploring the application of Medicare authority, including other payment provisions, coverage policy, conditions of participation, and Quality Improvement Organization (QIO) retrospective review. We note that we are not proposing new Medicare policy in this discussion of the HAC payment provision for IPPS hospitals, as some of these approaches may require new statutory authority. We are seeking public comments on these and other options for enhancing the preventable HACs payment provision and maximizing the use of POA indicator reporting data. We look forward to working with stakeholders in the fight against HACs. G. Proposed Changes to Specific MS-DRG Classifications 1. Pre-MDCs: Artificial Heart Devices Heart failure affects more than 5 million patients in the United States with 550,000 new cases each year, and causes more than 55,000 deaths annually. It is a progressive disease that is medically managed at all stages, but over time leads to continued deterioration of the heart's ability to pump sufficient amounts of adequately oxygenated blood throughout the body. When medical management becomes inadequate to continue to support the patient, the patient's heart failure would be considered to be the end stage of the disease. At this point, the only remaining treatment options are a heart transplant or mechanical circulatory support. A device termed an artificial heart has been used only for severe failure of both the right and left ventricles, also known as biventricular failure. Relatively small numbers of patients suffer from biventricular failure, but the exact numbers are unknown. There are about 4,000 patients approved and waiting to receive heart transplants in the United States at any given time, but only about 2,000 hearts per year are transplanted due to a scarcity of donated organs. There are a number of mechanical devices that may be used to support the ventricles of a failing heart on either a temporary or permanent basis. When it is apparent that a patient will require long-term support, a ventricular support device is generally implanted and may be considered either as a bridge to recovery or a bridge to transplantation. Sometimes a patient's prognosis is uncertain, and with device support the native heart may recover its function. However when recovery is not likely, the patient may qualify as a transplant candidate and require mechanical circulatory support until a donor heart becomes available. This type of support is commonly supplied by ventricular assist devices, (VADs), which are surgically attached to the native ventricles but do not replace them. Devices commonly called artificial hearts are biventricular heart replacement systems that differ from VADs in that a substantial part of the native heart, including both ventricles, is removed. When the heart remains intact, it remains possible for the native heart to recover its function after being assisted by a VAD. However, because the artificial heart device requires the resection of the ventricles, the native heart is no longer intact and such recovery is not possible. The designation “artificial heart” is somewhat of a misnomer because some portion of the native heart remains and there is no current mechanical device that fully replaces all four chambers of the heart. Over time, better descriptive language for these devices may be adopted. In 1986, CMS made a determination that the use of artificial hearts was not covered under the Medicare program. To conform to that decision, we placed ICD-9-CM procedure code 37.52 (Implantation of total replacement heart system) on the GROUPER program's MCE in the noncovered procedure list. On August 1, 2007, CMS began a national coverage determination process for artificial hearts. SynCardia Systems, Inc. submitted a request for reconsideration of the longstanding noncoverage policy when its device, the CardioWest Temporary Total Artificial Heart (TAH-t) System, is used for “bridge to transplantation” in accordance with the FDA-labeled indication for the device. “Bridge to transplantation” is a phrase meaning that a patient in end-stage heart failure may qualify as a heart transplant candidate, but will require mechanical circulatory support until a donor heart becomes available. The CardioWest  TAH-t System is indicated for use as a bridge to transplantation in cardiac transplant-eligible candidates at risk of imminent death from biventricular 
                        ( print page 23563)
                        failure. The system is intended for use inside the hospital as the patient awaits a donor heart. The ultimate desired outcome for insertion of the TAH-t is a successful heart transplant, along with the potential that offers for cure from heart failure. CMS determined that a broader analysis of artificial heart coverage was deemed appropriate, as another manufacturer, Abiomed, Inc. has developed an artificial heart device, AbioCor® Implantable Replacement Heart Device, with different indications. SynCardia Systems, Inc has received approval of its device from the FDA for humanitarian use as destination therapy for patients in end-stage biventricular failure who cannot qualify as transplant candidates. The AbioCor® Implantable Replacement Heart Device is indicated for use in severe biventricular end-stage heart disease patients who are not cardiac transplant candidates and who are less than 75 years old, who require multiple inotropic support, who are not treatable by VAD destination therapy, and who cannot be weaned from biventricular support if they are on such support. The desired outcome for this device is prolongation of life and discharge to home. On February 1, 2008, CMS published a proposed coverage decision memorandum for artificial hearts which stated, in part, that while the evidence is inadequate to conclude that the use of an artificial heart is reasonable and necessary for Medicare beneficiaries, the evidence is promising for the uses of artificial heart devices as described above. CMS supports additional research for these devices, and therefore proposed that the artificial heart will be covered by Medicare when performed under the auspices of a clinical study. The study must meet all of the criteria listed in the proposed decision memorandum. This proposed coverage decision memorandum may be found on the CMS Web site at: 
                        *http://www.cms.hhs.gov/​mcd/​viewdraftdecisionmemo.asp?​id=​211.*
                         Following consideration of the public comments received, CMS expects to make a final decision on or about May 1, 2008. The topic of coding of artificial heart devices was discussed at the September 27-28, 2007 ICD-9-CM Coordination and Maintenance Committee meeting held at CMS in Baltimore, MD. We note that this topic was placed on the Committee's agenda because any proposed changes to the ICD-9-CM coding system must be discussed at a Committee meeting, with opportunity for comment from the public. At the September 2007 Committee meeting, the Committee accepted oral comments from participants and encouraged attendees or anyone with an interest in the topic to comment on proposed changes to the code, inclusion terms, or exclusion terms. We accepted written comments until October 12, 2007. As a result of discussion and comment from the Committee meeting, the Committee revised the title of procedure code 37.52 for artificial hearts to read “Implantation of internal biventricular heart replacement system.” In addition, the Committee created new code 37.55 (Removal of internal biventricular heart replacement system) to identify explantation of the artificial heart prior to heart transplantation. To make conforming changes to the IPPS system with regard to the proposed revision to the coverage decision for artificial hearts, in this proposed rule, we are proposing to remove procedure code 37.52 from MS-DRG 215 (Other Heart Assist System Implant) and assign it to MS-DRG 001 (Heart Transplant or Implant of Heart Assist System with Major Comorbidity or Complication (MCC)) and MS-DRG 002 (Heart Transplant or Implant of Heart Assist System without Major Comorbidity or Complication (MCC)). In addition, we are proposing to remove procedure code 37.52 from the MCE “Non-Covered Procedure” edit and assign it to the “Limited Coverage” edit. We are proposing to include in this proposed edit the requirement that ICD-9-CM diagnosis code V70.7 (Examination of participant in clinical trial) also be present on the claim. We are proposing that claims submitted without both procedure code 37.52 and diagnosis code V70.7 would be denied because they would not be in compliance with the proposed coverage policy. During FY 2008, we are making mid-year changes to portions of the GROUPER program that do not affect MS-DRG assignment or ICD-9-CM coding. However, as the proposed coverage decision memorandum for artificial hearts was published after the CMS contractor's testing and release of the mid-year product, the above proposed changes to the MCE will not be included in that revision of the GROUPER Version 25.0. GROUPER Version 26.0, which will be in use for FY 2009, will contain the proposed changes if they are approved. If the proposed revisions to the MCE are accepted, the edits in the MCE Version 25.0 will be effective retroactive to May 1, 2008. (To reduce confusion, we note that the version number of the MCE is one digit lower than the current GROUPER version number; that is, Version 26.0 of the GROUPER uses Version 25.0 of the MCE.) 2. MDC 1 (Diseases and Disorders of the Nervous System) a. Transferred Stroke Patients Receiving Tissue Plasminogen Activator (tPA) In 1996, the FDA approved the use of tissue plasminogen activator (tPA), one type of thrombolytic agent that dissolves blood clots. In 1998, the ICD-9-CM Coordination and Maintenance Committee created code 99.10 (Injection or infusion of thrombolytic agent) in order to be able to uniquely identify the administration of these agents. Studies have shown that tPA can be effective in reducing the amount of damage the brain sustains during an ischemic stroke, which is caused by blood clots that block blood flow to the brain. tPA is approved for patients who have blood clots in the brain, but not for patients who have a bleeding or hemorrhagic stroke. Thrombolytic therapy has been shown to be most effective when used within the first 3 hours after the onset of an embolic stroke, but it is contraindicated in hemorrhagic strokes. For FY 2006, we modified the structure of CMS DRGs 14 (Intracranial Hemorrhage or Cerebral Infarction) and 15 (Nonspecific CVA and Precerebral Occlusion without Infarction) by removing the diagnostic ischemic (embolic) stroke codes. We created a new CMS DRG 559 (Acute Ischemic Stroke with Use of Thrombolytic Agent) which increased reimbursement for patients who sustained an ischemic or embolic stroke and who also had administration of tPA. The intent of this DRG was not to award higher payment for a specific drug but to recognize the need for better overall care for this group of patients. Even though tPA is indicated only for a small proportion of stroke patients, that is, those patients experiencing ischemic strokes treated within 3 hours of the onset of symptoms, our data suggested that there was a sufficient quantity of patients to support the DRG change. While our goal is to make payment relate more closely to resource use, we also note that use of tPA in a carefully selected patient population may lead to better outcomes and overall care and may lessen the need for postacute care. For FY 2008, with the adoption of MS-DRGs, CMS DRG 559 became MS-DRGs 061 (Acute Ischemic Stroke with Use of Thrombolytic Agent with MCC), 062 (Acute Ischemic Stroke with Use of Thrombolytic Agent with CC), and 063 (Acute Ischemic Stroke with Use of Thrombolytic Agent without CC/MCC). Stroke cases in which no thrombolytic 
                        ( print page 23564)
                        agent was administered were grouped to MS-DRGs 064 (Intracranial Hemorrhage or Cerebral Infarction with MCC), 065 (Intracranial Hemorrhage or Cerebral Infarction with CC), or 066 (Intracranial Hemorrhage or Cerebral Infarction without CC/MCC). The MS-DRGs that reflect use of a thrombolytic agent, that is, MS-DRGs 061, 062, and 063, have higher relative weights than the hemorrhagic or cerebral infarction MS-DRGs 064, 065, and 066. The American Society of Interventional and Therapeutic Neuroradiology (ASITN) has made us aware of a treatment issue that is of concern to the stroke provider's community. In some instances, patients suffering an embolytic or thrombolytic stroke are evaluated and given tPA in a community hospital's emergency department, and then are transferred to a larger facility's stroke center that is able to provide the level of services required by the increased severity of these cases. The facility providing the administration of tPA in its emergency department does not realize increased reimbursement, as the patient is often transferred as soon a possible to a stroke center. The facility to which the patient is transferred does not realize increased reimbursement, as the tPA was not administered there. The ASITN has requested that CMS give permission to code the administration of tPA as if it had been given in the receiving facility. This would result in the receiving facility being paid the higher weighted MS-DRGs 061, 062, or 063 instead of MS-DRGs 064, 065, or 066. The ASITN's rationale is that the patients who received tPA in another facility (even though administration of tPA may have alleviated some of the worst consequences of their strokes) are still extremely compromised and require increased health care services that are much more resource consumptive than patients with less severe types of stroke. We have advised the ASITN that hospitals may not report services that were not performed in their facility. We recognize that the ASITN's concerns potentially have merit but the quantification of the increased resource consumption of these patients is not currently possible in the existing ICD-9-CM coding system. Without specific length of stay and average charges data, we are unable to determine an appropriate MS-DRG for these cases. Therefore, we have advised the ASITN to present a request at the diagnostic portion of the ICD-9-CM Coordination and Maintenance Committee meeting on March 20, 2008, for a code that would recognize the fact that the patient had received a thrombolytic agent for treatment of the current stroke. If this request is presented at the March 20, 2008 meeting, it will not be approved in time to be published as a final code in this proposed rule. However, if a diagnosis code is created by the National Centers for Health Statistics as a result of that meeting, it can be added to the list of codes published in the FY 2009 IPPS final rule that will go into effect on October 1, 2008. With such information appearing on subsequent claims, we will have a better idea of how to classify these cases within the MS-DRGs. Therefore, because we lack the data to identify these patients, we are not proposing an MS-DRG modification for the stroke patients receiving tPA in one facility prior to being transferred to another facility. b. Intractable Epilepsy With Video Electroencephalogram (EEG) As we did for FY 2008, we received a request from an individual representing the National Association of Epilepsy Centers to consider further refinements to the MS-DRGs describing seizures. Specifically, the representative recommended that a new MS-DRG be established for patients with intractable epilepsy who receive an electroencephalogram with video monitoring (vEEG) during their hospital stay. Similar to the initial recommendation, the representative stated that patients who suffer from uncontrolled seizures or intractable epilepsy are admitted to an epilepsy center for a comprehensive evaluation to identify the epilepsy seizure type, the cause of the seizure, and the location of the seizure. These patients are admitted to the hospital for 4 to 6 days with 24-hour monitoring that includes the use of EEG video monitoring along with cognitive testing and brain imaging procedures. Effective October 1, 2007, MS-DRG 100 (Seizures with MCC) and MS-DRG 101 (Seizures without MCC) were implemented as a result of refinements to the DRG system to better recognize severity of illness and resource utilization. Once again, the representative applauded CMS for making changes in the DRG structure to better recognize differences in patient severity. However, the representative stated that a subset of patients in MS-DRG 101 who have a primary diagnosis of intractable epilepsy and are treated with vEEG are substantially more costly to treat than other patients in this MS-DRG and represent the majority of patients being evaluated by specialized epilepsy centers. Alternatively, the representative stated that he was not requesting any change in the structure of MS-DRG 100. According to the representative, the number of cases that would fall into this category is not significant. The representative further noted that this is a change from last year's request. Epilepsy is currently identified by ICD-9-CM diagnosis codes 345.0x through 345.9x. There are two fifth digits that may be assigned to a subset of the epilepsy codes depending on the physician documentation: “0” for without mention of intractable epilepsy.
                    “1” for with intractable epilepsy. With the assistance of an outside reviewer, the representative analyzed cost data for MS-DRGs 100 and 101, which focused on three subsets of patients identified with a primary diagnosis of epilepsy or convulsions who also received vEEG (procedure code 89.19): Patients with a primary diagnosis of epilepsy with intractability specified (codes 345.01 through 345.91).
                    Patients with a primary diagnosis of epilepsy without intractability specified (codes 345.00 through 345.90).
                    Patients with a primary diagnosis of convulsions (codes 780.39). The representative acknowledged that the association did not include any secondary diagnoses in its analyses. Based on its results, the representative recommended that CMS further refine MS-DRG 101 by subdividing cases with a primary diagnosis of intractable epilepsy (codes 345.01 through 345.91) when vEEG (code 89.19) is also performed into a separate MS-DRG that would be defined as “MS-DRG XXX” (Epilepsy Evaluation without MCC). According to the representative, these cases are substantially more costly than the other cases within MS-DRG 101 and are consistent with the criteria for dividing MS-DRGs on the basis of CCs and MCCs. In addition, the representative stated that the request would have a minimal impact on most hospitals but would substantially improve the accuracy of payment to hospitals specializing in epilepsy care. We performed an analysis using FY 2007 MedPAR data. As shown in the table below, we found a total of 54,060 cases in MS-DRG 101 with average charges of $14,508 and an average length of stay of 3.69 days. There were 879 cases with intractable epilepsy and vEEG with average charges of $19,227 and an average length of stay of 5 days. 
                        ( print page 23565) MS-DRG
Number of cases
Average length of stay
Average chargesMS-DRG 100—All Cases
16,142
6.34
$27,623MS-DRG 100—Cases with Intractable Epilepsy with vEEG (Codes 345.01, 345.11, 345.41, 345.51, 345.61, 345.71, 345.81, 345.91)
69
6.6
26,990MS-DRG 100—Cases with Intractable Epilepsy without vEEG
328
7.81
32,539MS-DRG 101—All cases
54,060
3.69
14,508MS-DRG 101—Cases with Intractable Epilepsy with vEEG (Codes 345.01, 345.11, 345.41, 345.51, 345.61, 345.71, 345.81, 345.91)
879
5.0
19,227MS-DRG 101—Cased with Intractable Epilepsy without vEEG
1,351
4.25
14,913
 In applying the criteria to establish subgroups, the data do not support the creation of a new subdivision for MS-DRG 101 for cases with intractable epilepsy and vEEG nor does the data support moving the 879 cases from MS-DRG 101 to MS-DRG 100. Moving the 879 cases to MS-DRG 100 would mean moving cases with average charges of approximately $19,000 into an MS-DRG with average charges of $28,000. Therefore, we are not proposing to refine MS-DRG 101 by subdividing cases with a primary diagnosis of intractable epilepsy (codes 345.01 through 345.91) when vEEG (code 89.19) is also performed into a separate MS-DRG. 3. MDC 5 (Diseases and Disorders of the Circulatory System) a. Automatic Implantable Cardioverter-Defibrillators (AICD) Lead and Generator Procedures In the FY 2008 IPPS final rule with comment period (72 FR 47257), we created a separate, stand alone DRG for automatic implantable cardioverter-defibrillator (AICD) generator replacements and defibrillator lead replacements. The new MS-DRG 245 (AICD lead and generator procedures) contains the following codes: 00.52, Implantation or replacement of transvenous lead [electrode] into left ventricular coronary venous system.
                    00.54, Implantation or replacement of cardiac resynchronization defibrillator pulse generator device only [CRT-D].
                    37.95, Implantation of automatic cardioverter/defibrillator leads(s) only.
                    37.96, Implantation of automatic cardioverter/defibrillator pulse generator only.
                    37.97, Replacement of automatic cardioverter/defibrillator leads(s) only.
                    37.98, Replacement of automatic cardioverter/defibrillator pulse generator only. Commenters on the FY 2008 IPPS proposed rule supported this new MS-DRG, which recognizes the distinct differences in resource utilization between pacemaker and defibrillator generators and leads, but suggested that CMS should consider additional refinements for the defibrillator generator and leads. In reviewing the standardized charges for the AICD leads, the commenter believed that the leads may be more appropriately assigned to another DRG such as MS-DRG 243 (Permanent Cardiac Pacemaker Implant with CC) or MS-DRG 258 (Cardiac Pacemaker Device Replacement with MCC). The commenter recommended that CMS consider moving the defibrillator leads back into a pacemaker DRG, either MS-DRG 243 or MS-DRG 258. In response to the commenters, we indicated that the data supported separate DRGs for these very different devices (72 FR 47257). We indicated that moving the defibrillator leads back into a pacemaker MS-DRG defeated the purpose of creating separate MS-DRGs for defibrillators and pacemakers. Therefore, we finalized MS-DRG 245 as proposed with the leads and generator codes listed above. After publication of the FY 2008 IPPS final rule with comment period, we received a request from a manufacturer that recommended a subdivision for MS-DRG 245 (AICD Lead and Generator Procedures). The requestor suggested creating a new MS-DRG to separate the implantation or replacement of the AICD leads from the implantation or replacement of the AICD pulse generators to better recognize the differences in resource utilization for these distinct procedures. The requestor applauded CMS' decision to create separate MS-DRGs for the pacemaker device procedures from the AICD procedures in the FY 2008 IPPS final rule (72 FR 47257). The requestor further acknowledged its support of the clinically distinct MS-DRGs for pacemaker devices. Currently, MS-DRGs 258 and 259 (Cardiac Pacemaker Device Replacement with MCC and without MCC, respectively) describe the implantation or replacement of pacemaker generators while MS-DRGs 260, 261, and 262 (Cardiac Pacemaker Revision Except Device Replacement with MCC, with CC, without CC/MCC, respectively) describe the insertion or replacement of pacemaker leads. The requestor believed that the IPPS “needs to continue to evolve to accurately reflect clinical differences and costs of services.” As such, the requestor recommended that CMS follow the same structure as it did with the pacemaker MS-DRGs for MS-DRG 245 to separately identify the implantation or replacement of the defibrillator leads (codes 37.95, 37.97, and 00.52) from the implantation or replacement of the pulse generators (codes 37.96, 37.98, 00.54). In our analysis of the FY 2007 MedPAR data, we found a total of 5,546 cases in MS-DRG 245 with average charges of $62,631 and an average length of stay of 3.3 days. We found 1,894 cases with implantation or replacement of the defibrillator leads (codes 37.95, 37.97, and 00.52) with average charges of $42, 896 and an average length of stay of 3.4 days. We also found a total of 3,652 cases with implantation or replacement of the pulse generator (codes 37.96, 37.98, 00.54) with average charges of $72, 866 and an average length of stay of 3.2 days. We agree with the requestor that the IPPS should accurately recognize differences in resource utilization for clinically distinct procedures. As the data demonstrate, average charges for the implantation or replacement of the AICD pulse generators are significantly higher than for the implantation or replacement of the AICD leads. Therefore, we are proposing to create a new MS-DRG 265 to separately identify these distinct procedures. The proposed new MS-DRG 265 would be titled “AICD Lead Procedures” and would include procedure codes that identify the AICD leads (codes 37.95, 37.97 and 00.52). The title for MS-DRG 245 would be revised to “AICD Generator Procedures” and include procedure codes 37.96, 37.98, 00.54. We believe these changes would better reflect the clinical differences and resources utilized for these distinct procedures. 
                        ( print page 23566) b. Left Atrial Appendage Device Atrial fibrillation (AF) is the primary cardiac abnormality associated with ischemic or embolytic stroke. Most ischemic strokes associated with AF are possibly due to an embolism or thrombus that has formed in the left atrial appendage. Evidence from studies such as transesophageal echocardiography shows left atrial thrombi to be more frequent in AF patients with ischemic stroke as compared to AF patients without stroke. While anticoagulation medication can be efficient in ischemic stroke prevention, there can be problems of safety and tolerability in many patients, especially those older than 75 years. Chronic warfarin therapy has been proven to reduce the risk of embolism but there can be difficulties concerning its administration. Frequent blood tests to monitor warfarin INR are required at some cost and patient inconvenience. In addition, because warfarin INR is affected by a large number of drug and dietary interactions, it can be unpredictable in some patients and difficult to manage. The efficacy of aspirin for stroke prevention in AF patients is less clear and remains controversial. With the known disutility of warfarin and the questionable effectiveness of aspirin, a device-based solution may provide added protection against thromboembolism in certain patients with AF. At the April 1, 2004 ICD-9-CM Coordination and Maintenance Committee meeting, a proposal was presented for the creation of a unique procedure code describing insertion of the left atrial appendage filter system. Subsequently, ICD-9-CM code 37.90 (Insertion of left atrial appendage device) was created for use beginning October 1, 2004. This code was designated as a non-operating room (non-O.R.) procedure, and had an effect only on cases in MDC 5, CMS DRG 518 (Percutaneous Cardiovascular Procedure without Coronary Artery Stent or Acute Myocardial Infarction). With the adoption of MS-DRGs in FY 2008, CMS DRG 518 was divided into MS-DRGs 250 and 251 (Percutaneous Cardiovascular Procedure without Coronary Artery Stent or AMI with MCC, and without MCC, respectively). We have reviewed the data concerning this procedure code annually. Using FY 2005 MedPAR data for the FY 2007 IPPS final rule, 24 cases were reported, and the average charges ($27,620) closely mimicked the average charges of the other 22,479 cases in CMS DRG 518 ($28,444). As the charges were comparable, we made no recommendations to change the CMS DRG assignment for FY 2007. Using FY 2006 MedPAR data for the FY 2008 final rule with comment period, we divided CMS DRG 518 into the cases that would be reflected in the MS-DRG configuration; that is, we divided the cases based on the presence or absence of an MCC. There were 35 cases without an MCC with average charges of $24,436, again mimicking the 38,002 cases with average charges of $32,546. There were 3 cases with MCC with average charges of $62,337, compared to the 5,458 cases also with an MCC with average charges of $53,864. Again it was deemed that cases with code 37.90 were comparable to the rest of the cases in CMS DRG 518, and the decision was made not to make any changes in the DRG assignment for this procedure code. As noted above, CMS DRG 518 became MS-DRGs 250 and 251 in FY 2008. We have received a request regarding code 37.90, and its placement within the MS-DRG system for FY 2009. The requestor asked for either the reassignment of code 37.90 to an MS-DRG that would adequately cover the costs associated with the complete procedure or the creation of a new MS-DRG that would reimburse hospitals adequately for the cost of the device. The requestor, a manufacturer's representative, reported that the device's IDE clinical trial is nearing completion, with the conclusion of study enrollment in May 2008. The requestor will continue to enroll patients in a Continued Use Registry following completion of the trial. The requestor reported that it did not charge hospitals for the atrial appendage device, estimated to cost $6,000, during the trial period, but it will begin to charge hospitals upon the completion of the trial in May. The requestor provided us with its data showing what it believed to be a differential of $107 more per case than the payment average for MS-DRG 250, and a shortfall of $3,808 per case than the payment average for MS-DRG 251. The requestor pointed out that code 37.90 is assigned to both MS-DRGs 250 and 251, but stated that the final MS-DRG assignment would be MS-DRG 251 when the patient has a principal diagnosis of atrial fibrillation (code 427.31) because AF is not presently listed as a CC or an MCC. We would take this opportunity to note that the principal diagnosis is used to determine assignment of a case to the correct MDC. Secondary or additional diagnosis codes are the only codes that can be used to determine the presence of a CC or an MCC. With regard to the request to create a specific DRG for the insertion of this device entitled “Percutaneous Cardiovascular Procedures with Implantation of a Left Atrial Appendage Device without CC/MCC”, we would point out that the payments under a prospective payment system are predicated on averages. The device is already assigned to MS-DRGs containing other percutaneous cardiovascular devices; to create a new MS-DRG specific to this device would be to remove all other percutaneously inserted devices and base the MS-DRG assignment solely on the presence of code 37.90. This approach negates our longstanding method of grouping like procedures, and removes the concept of averaging. Further, to ignore the structure of the MS-DRG system solely for the purpose of increasing payment for one device would set an unwelcome precedent for defining all of the other MS-DRGs in the system. We would also point out that the final rule establishing the MS-DRGs set forth five criteria, all five of which are required to be met, in order to warrant creation of a CC or an MCC subgroup within a base MS-DRG. The criteria can be found in the FY 2008 IPPS final rule with comment period (72 FR 47169). One of the criteria specifies that there will be at least 500 cases in the CC or MCC subgroup. To date, there are not enough cases of code 37.90 reported within the MedPAR data. Using FY 2007 MedPAR data, for this FY 2009 IPPS proposed rule, we reviewed MS-DRGs 250 and 251 for the presence of the left atrial appendage device. The following table displays our results: MS-DRG
Number of cases
Average length of stay
Average charges250—All Cases
6,424
7.72
$60,597.58250—Cases with code 37.90
4
6.50
65,829.51250—Cases without code 37.90
6,420
7.72
60,594.32251—All Cases
39,456
2.84
35,719.81( print page 23567)251—Cases with code 37.90
101
1.30
20,846.09251—Cases without code 37.90
39,335
2.85
35,757.98
 There were a total of 105 cases with code 37.90 reported for Medicare beneficiaries in the 2007 MedPAR data. There are 4 cases with an atrial appendage device in MS-DRG 250 that have higher average charges than the other 6,420 cases in the MS-DRG, and that have slightly shorter lengths of stay by 1.25 days. However, the more telling data are located in MS-DRG 251, which shows that the 101 cases in which an atrial appendage device was implanted have much lower average charges ($20,846.09) than the other 39,355 cases in the MS-DRG, with average charges of $35,758.98. The difference in the average charges is approximately $14,912, so even when the manufacturer begins charging the hospitals the estimated $6,000 for the device, there is still a difference of approximately $8,912 in average charges based on the comparison within the total MS-DRG 251. Interestingly, the 101 cases also have an average length of stay of less than half of the average length of stay compared to the other cases assigned to that MS-DRG. Because the data do not support either the creation of a unique MS-DRG or the assignment of procedure code 37.90 to another higher-weighted MS-DRG, we are not proposing any change to MS-DRGs 250 and 251, or to code 37.90 for FY 2009. We believe, based on the past 3 year's comparisons, that this code is appropriately located within the MS-DRG structure. 4. MDC 8 (Diseases and Disorders of the Musculoskeletal System and Connective Tissue): Hip and Knee Replacements and Revisions For FY 2009, we again received a request from the American Association of Hip and Knee Surgeons (AAHKS), a specialty group within the American Academy of Orthopedic Surgeons (AAOS), concerning modifications of the lower joint procedure MS-DRGs. The request is similar, in some respects, to the AAHKS's request in FY 2008, particularly as it relates to separating routine and complex procedures. For the benefit of the reader, we are republishing a history of the development of DRGs for hip and knee replacements and a summary of the AAHKS FY 2008 request that were included in the FY 2008 IPPS final rule with comment period (72 FR 47222 through 47224) before we discuss the AAHKS's more recent request. a. Brief History of Development of Hip and Knee Replacement Codes In the FY 2006 IPPS final rule (70 FR 47303), we deleted CMS DRG 209 (Major Joint and Limb Reattachment Procedures of Lower Extremity) and created two new CMS DRGs: 544 (Major Joint Replacement or Reattachment of Lower Extremity) and 545 (Revision of Hip or Knee Replacement). The two new CMS DRGs were created because revisions of joint replacement procedures are significantly more resource intensive than original hip and knee replacements procedures. CMS DRG 544 included the following procedure code assignments: 81.51, Total hip replacement.
                    81.52, Partial hip replacement.
                    81.54, Total knee replacement.
                    81.56, Total ankle replacement.
                    84.26, Foot reattachment.
                    84.27, Lower leg or ankle reattachment.
                    84.28, Thigh reattachment. CMS DRG 545 included the following procedure code assignments: 00.70, Revision of hip replacement, both acetabular and femoral components.
                    00.71, Revision of hip replacement, acetabular component.
                    00.72, Revision of hip replacement, femoral component.
                    00.73, Revision of hip replacement, acetabular liner and/or femoral head only.
                    00.80, Revision of knee replacement, total (all components).
                    00.81, Revision of knee replacement, tibial component.
                    00.82, Revision of knee replacement, femoral component.
                    00.83, Revision of knee replacement, patellar component.
                    00.84, Revision of knee replacement, tibial insert (liner).
                    81.53, Revision of hip replacement, not otherwise specified
                    81.55, Revision of knee replacement, not otherwise specified Further, we created a number of new ICD-9-CM procedure codes effective October 1, 2005, that better distinguish the many different types of joint replacement procedures that are being performed. In the FY 2006 IPPS final rule (70 FR 47305), we indicated a commenter had requested that, once we receive claims data using the new procedure codes, we closely examine data from the use of the codes under the two new CMS DRGs to determine if future additional DRG modifications are needed. b. Prior Recommendations of the AAHKS Prior to this year, the AAHKS had recommended that we make further refinements to the CMS DRGs for knee and hip arthroplasty procedures. The AAHKS previously presented data to CMS on the important differences in clinical characteristics and resource utilization between primary and revision total joint arthroplasty procedures. The AAHKS stated that CMS's decision to create a separate DRG for revision of total joint arthroplasty (TJA) in October 2005 resulted in more equitable reimbursement for hospitals that perform a disproportionate share of complex revision of TJA procedures, recognizing the higher resource utilization associated with these cases. The AAHKS stated that this important payment policy change led to increased access to care for patients with failed total joint arthroplasties, and ensured that high volume TJA centers could continue to provide a high standard of care for these challenging patients. The AAHKS further stated that the addition of new, more descriptive ICD-9-CM diagnosis and procedure codes for TJA in October 2005 gave it the opportunity to further analyze differences in clinical characteristics and resource intensity among TJA patients and procedures. Inclusive of the preparatory work to submit its recommendations, the AAHKS compiled, analyzed, and reviewed detailed clinical and resource utilization data from over 6,000 primary and revision TJA procedure codes from 4 high volume joint arthroplasty centers located within different geographic regions of the United States: University of California, San Francisco, CA; Mayo Clinic, Rochester, MN; Massachusetts General Hospital, Boston, MA; and the Hospital for Special Surgery, New York, NY. Based on its analysis, the AAHKS recommended that CMS examine Medicare claims data and consider the creation of separate DRGs for total hip and total knee arthroplasty procedures. The AAHKS stated that based on the differences between patient 
                        ( print page 23568)
                        characteristics, procedure characteristics, resource utilization, and procedure code payment rates between total hip and total knee replacements, separate DRGs were warranted. Furthermore, the AAHKS recommended that CMS create separate base DRGs for routine versus complex joint revision or replacement procedures as shown below. Routine Hip Replacements 00.73, Revision of hip replacement, acetabular liner and/or femoral head only.
                    00.85, Resurfacing hip, total, acetabulum and femoral head.
                    00.86, Resurfacing hip, partial, femoral head.
                    00.87, Resurfacing hip, partial, acetabulum.
                    81.51, Total hip replacement.
                    81.52, Partial hip replacement.
                    81.53, Revision of hip replacement, not otherwise specified. Complex Hip Replacements 00.70, Revision of hip replacement, both acetabular and femoral components.
                    00.71, Revision of hip replacement, acetabular component.
                    00.72, Revision of hip replacement, femoral component. Routine Knee Replacements and Ankle Procedures 00.83, Revision of knee replacement, patellar component.
                    00.84, Revision of knee replacement, tibial insert (liner).
                    81.54, Revision of knee replacement, not otherwise specified.
                    81.55, Revision of knee replacement, not otherwise specified.
                    81.56, Total ankle replacement. Complex Knee Replacements and Other Reattachments 00.80, Revision of knee replacement, total (all components).
                    00.81, Revision of knee replacement, tibial component.
                    00.82, Revision of knee replacement, femoral component.
                    84.26, Foot reattachment.
                    84.27, Lower leg or ankle reattachment.
                    84.28, Thigh reattachment. The AAHKS also recommended the continuation of CMS DRG 471 (Bilateral or Multiple Major Joint Procedures of Lower Extremity) without modifications. CMS DRG 471 included any combination of two or more of the following procedure codes: 00.70, Revision of hip replacement, both acetabular and femoral components.
                    00.80, Revision of knee replacement, total (all components).
                    00.85, Resurfacing hip, total, acetabulum and femoral head.
                    00.86, Resurfacing hip, partial, femoral head.
                    00.87, Resurfacing hip, partial, acetabulum.
                    81.51, Total hip replacement.
                    81.52, Partial hip replacement.
                    81.54, Total knee replacement.
                    81.56, Total ankle replacement. c. Adoption of MS-DRGs for Hip and Knee Replacements for FY 2008 and AAHKS's Recommendations In the FY 2008 IPPS final rule with comment period (72 FR 47222 through 47226), we adopted MS-DRGs to better recognize severity of illness for FY 2008. The MS-DRGs include two new severity of illness levels under the then current base DRG 544. We also added three new severity of illness levels to the base DRG for Revision of Hip or Knee Replacement. The new MS-DRGs are as follows: MS-DRG 466 (Revision of Hip or Knee Replacement with MCC)
                    MS-DRG 467 (Revision of Hip or Knee Replacement with CC)
                    MS-DRG 468 (Revision of Hip or Knee Replacement without CC/MCC)
                    MS-DRG 469 (Major Joint Replacement or Reattachment of Lower Extremity with MCC)
                    MS-DRG 470 (Major Joint Replacement or Reattachment of Lower Extremity without MCC) We found that the MS-DRGs greatly improved our ability to identify joint procedures with higher resource costs. In the final rule, we presented data indicating the average charges for each new MS-DRG for the joint procedures. In the FY 2008 IPPS final rule with comment period, we acknowledged the valuable assistance the AAHKS had provided to CMS in creating the new joint replacement procedure codes and modifying the joint replacement DRGs beginning in FY 2006. These efforts greatly improved our ability to categorize significantly different groups of patients according to severity of illness. Commenters on the FY 2008 proposed rule had encouraged CMS to continue working with the orthopedic community, including the AAHKS, to monitor the need for additional new DRGs. The commenters stated that MS-DRGs 466 through 470 are a good first step. However, they stated that CMS should continue to evaluate the data for these procedures and consider additional refinements to the MS-DRGs, including the need for additional severity levels. AAHKS stated that its data suggest that all three base DRGs (primary replacement, revision of major joint replacement, and bilateral joint replacement) should be separated into three severity levels (that is, MCC, CC, and non-CC). (We had proposed three severity levels for revision of hip and knee replacement (MS-DRGs 466, 467, and 468), and AAHKS agreed with this 3-level subdivision.) The AAHKS recommended that the base DRG for the proposed two severity subdivision MS-DRGs for major joint replacement or reattachment of lower extremity with and without CC/MCC (MS-DRGs 483 and 484) be subdivided into three severity levels, as was the case for the revision of hip and knee replacement MS-DRGs. AAHKS also recommended that the two severity subdivision MS-DRGs for bilateral or multiple major joint procedures of lower extremity with and without MCC (MS-DRGs 461 and 462) be subdivided three ways for this base DRG. AAHKS acknowledged that the three way split would not meet all five of the criteria for establishing a subgroup, and stated that these criteria were too restrictive, lack face validity, and create perverse admission selection incentives for hospitals by significantly overpaying for cases without a CC and underpaying for cases with a CC. It recommended that the existing five criteria be modified for low volume subgroups to assure materiality. For higher volume MS-DRG subgroups, the AAHKS recommended that two other criteria be considered, particularly for nonemergency, elective admissions: Is the per-case underpayment amount significant enough to affect admission vs. referral decisions on a case-by-case basis?
                    Is the total level of underpayments sufficient to encourage systematic admission vs. referral policies, procedures, and marketing strategies? The AAHKS also recommended refining the five existing criteria for MCC/CC/without subgroups as follows: Create subgroups if they meet the five existing criteria, with cost difference between subgroups ($1,350) substituted for charge difference between subgroups ($4,000);
                    If a proposed subgroup meets criteria number 2 and 3 (at least 5 percent and at least 500 cases) but fails one of the others, then create the subgroup if either of the following criteria are met: ◻ At least $1,000 cost difference per case between subgroups; or ◻ At least $1 million overall cost should be shifted to cases with a CC (or MCC) within the base DRG for payment weight calculations. 
                        ( print page 23569) In response, we indicated that we did not believe it was appropriate to modify our five criteria for creating severity subgroups. Our data did not support creating additional subdivisions based on the criteria. At that time, we believed the criteria we established to create subdivisions within a base DRG were reasonable and establish the appropriate balance between better recognition of severity of illness, sufficient differences between the groups, and a reasonable number of cases in each subgroup. However, we indicated that we may consider further modifications to the criteria at a later date once we have had some experience with MS-DRGs created using the proposed criteria. The AAHKS indicated in its response to the FY 2008 proposed rule that it continued to support the separation of routine and complex joint procedures. It believed that certain joint replacement procedures have significantly lower average charges than do other joint replacements. The AAKHS's data suggest that more routine joint replacements are associated with substantially less resource utilization than other more complex revision procedures. The AAHKS stated that leaving these procedures in the revision MS-DRGs results in substantial overpayment for these relatively simple, less costly revision procedures, which in turn results in a relative underpayment for the more complex revision procedures. In response, we examined data on this issue and identified two procedure codes for partial knee revisions that had significantly lower average charges than did other joint revisions. The two codes are as follows: 00.83 Revision of knee replacement, patellar component
                    00.84 Revision of total knee replacement, tibial insert (liner) The data suggest that these less complex partial knee revisions are less resource intensive than other cases assigned to MS-DRGs 466, 467, or 468. We examined other orthopedic DRGs to which these two codes could be assigned. We found that these cases have very similar average charges to those in MS-DRG 485 (Knee Procedures with Principal Diagnosis of Infection with MCC), MS-DRG 486 (Knee Procedures with Principal Diagnosis of Infection with CC), MS-DRG 487 (Knee Procedures with Principal Diagnosis of Infection without CC), MS-DRG 488 (Knee Procedures without Principal Diagnosis of Infection with CC or MCC), and MS-DRG 489 (Knee Procedures without Principal Diagnosis of Infection without CC). Given the very similar resource requirements of MS-DRG 485 and the fact that these DRGs also contain knee procedures, we moved codes 00.83 and 00.84 out of MS-DRGs 466, 467, and 468 and into MS-DRGs 485, 486, 487, 488, and 489. We also indicated that we would continue to monitor the revision DRGs to determine if additional modifications are needed. d. AAHKS' Recommendations for FY 2009 The AAHKS’ current request involves the following recommendations: That CMS consolidate and reassign certain joint procedures that have a diagnosis of an infection or malignancy into MS-DRGs that are similar in terms of clinical characteristics and resource utilization. The AAKHS further identifies groups called Stage 1 and 2 procedures that it believes require significant differences in resource utilization.
                    That CMS reclassify certain specific joint procedures, which AAHKS refers to as “routine,” out of their current MS-DRG assignments. The three joint procedures that AAHKS classifies as “routine” are codes 00.73 (Revision of hip replacement, acetabular liner and/or femoral head only), 00.83 (Revision of knee replacement, patellar component), and 00.84 (Revision of total knee replacement, tibial insert (liner)). The AAHKS advocated removing these three “routine” procedures from the following DRGs: MS-DRGs 466, 467, and 468, MS-DRGs 485, 486, and 487, and MS-DRGs 488 and 489. The AAHKS refers to MS-DRGs 466, 467, and 468 as “complex” revision DRGs, and recommended that the three “routine” procedures be moved out of MS-DRGs 466, 467, and 468 and MS-DRGs 485, 486, and 489 and into MS-DRGs 469 and 470 (Major Joint Replacement or Reattachment of Lower Extremity with and without MCC, respectively). The AAHKS contended that the three “routine” procedures have similar clinical characteristics and resource utilization to those in MS-DRGs 469. The recommendations suggested by AAHKS are quite complex and involve a number of specific code lists and MS-DRG assignment changes. We discuss each of these requests in detail below. (1) AAHKS Recommendation 1: Consolidate and reassign patients with hip and knee prosthesis related infections or malignancies. The AAHKS pointed out that deep infection is one of the most devastating complications associated with hip and knee replacements. These infections have been reported to occur in approximately 0.5 percent to 3 percent of primary and 4 percent to 6 percent of revision total joint replacement procedures. These infections often result in the need for multiple reoperations, prolonged use of intravenous and oral antibiotics, extended inpatient and outpatient rehabilitation, and frequent followup visits. Furthermore, clinical outcomes following single- and two-stage revision total joint arthroplasty procedures have been less favorable than revision for other causes of failure not associated with infection. In addition to the clinical impact, the AAHKS stated that infected total joint replacement procedures also have substantial economic implications for patients, payers, hospitals, physicians, and society in terms of direct medical costs, resource utilization, and the indirect costs associated with lost wages and productivity. The AAHKS stated that the considerable resources required to care for these patients has resulted in a strong financial disincentive for physicians and hospitals to provide care for patients with infected total joint replacements, an increased economic burden on the high volume tertiary care referral centers where patients with infected hip replacement procedures are frequently referred for definitive management. The AAHKS further stated that, in some cases, there are compromised patient outcomes due to treatment delays as patients with infected joint replacements seek providers who are willing to care for them. Once a deep infection of a total joint prosthesis is identified, the first stage of treatment involves a hospital admission for removal of the infected prosthesis and debridement of the involved bone and surrounding tissue. During the same procedure, an antibiotic-impregnated cement spacer is typically inserted to maintain alignment of the limb during the course of antibiotic therapy. The patient is then discharged to a rehabilitation facility/nursing home (or to home if intravenous therapy can be safely arranged for the patient) for a 6-week course of IV antibiotic treatment until the infection has cleared. After the completion of antibiotic therapy, the hip or knee may be reaspirated to look for evidence of persistent infection or eradication of infection. A second stage procedure is then undertaken, where the patient is readmitted, the hip or knee is reexplored, and the cement spacer removed. If there are no signs of persistent infection, a hip or knee prosthesis is reimplanted, often using bone graft and costly revision implants in order to address extensive bone loss 
                        ( print page 23570)
                        and distorted anatomy. Thus, the entire course of treatment for patients with infected joint replacements is 4 to 6 months, with an additional 6 to 12 months of rehabilitation. Furthermore, clinical outcomes following revision for infection are poor relative to outcomes following revision for other, aseptic causes. The AAHKS noted that patients with bone malignancy have a similar treatment focus—surgery to remove diseased tissue, chemotherapy to treat the malignancy, and implantation of the new prosthesis. They also have similar resource use. For simplicity, the AAHKS' discussion focused on infected joint prostheses, but it suggested that the issues it raises would apply to patients with a malignancy as well. The AAHKS stated that these patients are currently grouped in multiple MS-DRGs, and the cases are often “outliers” in each one. AAHKS proposed to consolidate these patients with similar clinical characteristics and treatment into MS-DRGs reflective of their resource utilization. The AAHKS states that these more severe patients are currently classified into the following MS-DRGs: MS-DRGs 463, 463, and 465 (Wound Debridement and Skin Graft Excluding Hand, for Musculoskeletal-Connective Tissue Disease with MCC, with CC, without CC/MCC, respectively).
                    MS-DRGs 480, 481, and 482 (Hip and Femur Procedures Except Major Joint with MCC, with CC, without CC/MCC, respectively).
                    MS-DRGs 485, 486, and 487 (Knee Procedures with Principal Diagnosis of Infection and with MCC, with CC, and without CC/MCC, respectively).
                    MS-DRGs 488 and 489 (Knee Procedures without Principal Diagnosis of Infection and with CC/MCC and without CC/MCC, respectively).
                    MS-DRGs 495, 496, and 497 (Local Excision and Removal of Internal Fixation Devices Except Hip and Femur with MCC, with CC, and without CC/MCC, respectively).
                    Other MS-DRGs (The AAHKS did not specify what these other MS-DRGs were.). The AAHKS indicated that cases with the severe diagnoses of infections, neoplasms, and structural defects have similarities. These similarities are due to an overlap of a severe diagnosis (including a principal diagnosis of code 996.66 (Infected joint prosthesis) and the resulting need for more extensive surgical procedures. The AAHKS stated that currently these patients are grouped into MS-DRGs by major procedure alone. AAHKS recommended that these cases be grouped into what it refers to as Stages 1 and 2 as follows: Stage 1 would include the removal of an infected prosthesis and includes cases in MS-DRGs 463, 464, and 465, 480, 481, and 482, 485 through 489, and 495, 496, and 497. Stage 1 joint procedure codes would include codes 80.05 (Arthrotomy for removal of prosthesis, hip), 80.06 (Arthrotomy for removal of prosthesis, knee), 00.73 (Revision of hip replacement, acetabular liner and/or femoral head only), and 00.84 (Revision of knee replacement, tibial insert (liner)).
                    Stage 2 would include the implant of a new prosthesis and includes cases in MS-DRGs 461 and 462, 463, 464, and 465, 466, 467, and 468, and 469 and 470. Stage 2 joint procedure codes would include codes 00.70 (Revision of hip replacement, both acetabular and femoral components), 00.71 (Revision of hip replacement, acetabular component), 00.72 (Revision of hip replacement, femoral component), 00.80 (Revision of knee replacement, total (all components)), 00.81 (Revision of knee replacement, tibial component), 00.82 (Revision of knee replacement, femoral component), 00.85 (Resurfacing hip, total, acetabulum and femoral head), 00.86 (Resurfacing hip, partial, femoral head), 00.87 (Resurfacing hip, partial, acetabulum), 81.51 (Total hip replacement), 81.52 (Partial hip replacement), 81.53 (Revise hip replacement), 81.54 (Total knee replacement), 81.55 (Revise knee replacement), and 81.56 (Total ankle replacement). As stated earlier, the AAHKS recommended patients with certain more severe diagnoses be grouped into a higher severity level. While most of AAHKS' comments focused on joint replacement patients with infections, the AAHKS also believed that patients with certain neoplasms require greater resources. To this group of infections and neoplasms, the AAHKS recommended the addition of four codes that capture acquired deformities. The AAHKS believed that these codes would capture admissions for the second stage of the treatment for an infected joint. The AAHKS stated that the significance of these diagnoses when they are reported as the principal code position was significant in predicting resource utilization. However, the impact was not as significant when the diagnosis was reported as a secondary diagnosis. The AAHKS recommended that patients with one of the following infection/neoplasm/defect principal diagnosis codes be segregated into a higher severity level. Stage 1 Infection/Neoplasm/Defect Principal Diagnosis Codes 170.7 (Malignant neoplasm of long bones of lower limb).
                    171.3 (Malignant neoplasm of soft tissue, lower limb, including hip).
                    711.05 (Pyogenic arthritis, pelvic region and thigh).
                    711.06 (Pyogenic arthritis, lower leg).
                    730.05 (Acute osteomyelitis, pelvic region and thigh).
                    730.06 (Acute osteomyelitis, lower leg).
                    730.15 (Chronic osteomyelitis, pelvic region and thigh).
                    730.16 (Chronic osteomyelitis, lower leg).
                    730.25 (Unspecified osteomyelitis, pelvic region and thigh).
                    730.26 (Unspecified osteomyelitis, lower leg).
                    996.66 (Infection and inflammatory reaction due to internal joint prosthesis).
                    996.67 (Infection and inflammatory reaction due to other internal orthopedic device, implant, and graft). Stage 2 Infection/Neoplasm/Defect Principal Diagnosis Codes (an Asterisk * Shows the Diagnoses Included in Stage 2 That Were Not Listed in Stage 1) 170.7 (Malignant neoplasm of long bones of lower limb).
                    171.3 (Malignant neoplasm of soft tissue, lower limb, including hip).
                    198.5 (Secondary malignant neoplasm of bone and bone marrow) .*
                    711.05 (Pyogenic arthritis, pelvic region and thigh).
                    711.06 (Pyogenic arthritis, lower leg).
                    730.05 (Acute osteomyelitis, pelvic region and thigh).
                    730.06 (Acute osteomyelitis, lower leg).
                    730.15 (Chronic osteomyelitis, pelvic region and thigh).
                    730.16 (Chronic osteomyelitis, lower leg).
                    730.25 (Unspecified osteomyelitis, pelvic region and thigh).
                    730.26 (Unspecified osteomyelitis, lower leg).
                    736.30 (Acquired deformities of hip, unspecified deformity).
                    736.39 (Other acquired deformities of hip) .*
                    736.6 (Other acquired deformities of knee) .*
                    736.89 (Other acquired deformities of other parts of limbs). *
                    996.66 (Infection and inflammatory reaction due to internal joint prosthesis). *
                    996.67 (Infection and inflammatory reaction due to other internal orthopedic device, implant, and graft). *( print page 23571) For the Stage 2 procedures, AAHKS also suggested the use of the following secondary diagnosis codes to assign the cases to a higher severity level. These conditions would not be the reason the patient was admitted to the hospital. They would instead represent secondary conditions that were also present on admission or conditions that were diagnosed after admission. Stage 2 Infection/Neoplasm/Defect Secondary Diagnosis Codes 170.7 (Malignant neoplasm of long bones of lower limb).
                    171.3 (Malignant neoplasm of soft tissue, lower limb, including hip).
                    711.05 (Pyogenic arthritis, pelvic region and thigh).
                    711.06 (Pyogenic arthritis, lower leg).
                    730.05 (Acute osteomyelitis, pelvic region and thigh).
                    730.06 (Acute osteomyelitis, lower leg).
                    730.15 (Chronic osteomyelitis, pelvic region and thigh).
                    730.16 (Chronic osteomyelitis, lower leg).
                    730.25 (Unspecified osteomyelitis, pelvic region and thigh).
                    730.26 (Unspecified osteomyelitis, lower leg).
                    996.66 (Infection and inflammatory reaction due to internal joint prosthesis).
                    996.67 (Infection and inflammatory reaction due to other internal orthopedic device, implant, and graft). (2) AAHKS Recommendation 2: Reclassify certain specific joint procedures. The AAHKS suggested that cases with the infection/neoplasm/defect diagnoses listed above be segregated according to the Stage 1 and 2 groups listed above. The AAHKS made one final recommendation concerning joint procedure cases with infections. It identified a subset of patients who had a principal diagnosis of 996.66 (Infection and inflammatory reaction due to internal joint prosthesis) and who also had a secondary diagnosis of sepsis or septicemia. The AAHKS believed that these patients are for the most part admitted with both the joint infection and sepsis/septicemia present at the time of admission. The codes for sepsis/septicemia are classified as MCCs under MS-DRGs. The AAHKS believed it is inappropriate to count the secondary diagnosis of sepsis/septicemia as a MCC when it is reported with code 996.66. The AAHKS believed that counting sepsis and septicemia as a MCC results in double counting the infections. It believed that the joint infection and septicemia are the same infection. The AAHKS recommended that the following sepsis and septicemia codes not count as a MCC when reported with code 996.66: 038.0 (Streptococcal septicemia).
                    038.10 (Staphylococcal septicemia, unspecified).
                    038.11 (Staphylococcal aureus septicemia).
                    038.19 (Other staphylococcal septicemia).
                    038.2 (Pneumococcal septicemia [streptococcus pneumonia septicemia]).
                    038.3 (Septicemia due anaerobes).
                    038.40 (Septicemia due to gram-negative organisms).
                    038.41 (Hemophilus influenzae [H. Influenzae]).
                    038.42 (Escherichia coli [E. Coli]).
                    038.43 (Pseudomonas).
                    038.44 (Serratia).
                    038.49 (Other septicemia due to gram-negative organisms).
                    038.8 (Other specified septicemias).
                    038.9 (Unspecified septicemia).
                    995.91 (Sepsis).
                    995.92 (Severe sepsis). e. CMS' Response to AAHKS' Recommendations The MS-DRG modifications proposed by the AAHKS are quite complex and have many separate parts. We made changes to the MS-DRGs in FY 2008 as a result of a request by the AAHKS as discussed above, to recognize two types of partial knee replacements as less complex procedures. We have no data on how effective the new MS-DRGs for joint procedures are in differentiating patients with varying degrees of severity. Therefore, we analyzed data reported prior to the adoption of MS-DRGs to analyze each of the recommendations made. We begin our analysis by focusing first on the more simple aspects of the recommendations made by the AAHKS. (1) Changing the MS-DRG Assignment for Codes 00.73, 00.83, and 00.84 As discussed previously, in FY 2008, the AAHKS recommended that CMS classify certain joint procedures as either routine or complex. We examined the data for these cases and found that the following two codes had significantly lower charges than the other joint revisions: 00.83 (Revision of knee replacement, patellar component) and 00.84 (Revision of knee replacement, tibial insert (liner)). Therefore, we moved these two codes to MS-DRGs 485, 486, and 487, and MS-DRGs 488 and 489. As a result of AAHKS' most recent recommendations, we once again examined claims data for these two knee procedures (codes 00.83 and 00.84) as well as its request that we move code 00.73 (Revision of hip replacement, acetabular liner and/or femoral head only). Code 00.73 is assigned to MS-DRGs 466, 467, and 468. The following tables show our findings. MS-DRG
Number of cases
Average length of stay
Average charges485—All Cases
1,122
12.20
$64,672.47485—Cases with Code 00.83 or 00.84
179
11.83
64,446.68485—Cases without Code 00.83 or 00.84
943
12.27
64,715.33486—All Cases
2,061
8.03
40,758.55486—Cases with Code 00.83 or 00.84
464
7.34
39,864.39486—Cases without Code 00.83 or 00.84
1,597
8.23
41,018.34487—All Cases
1,236
5.67
29,180.88487—Cases with Code 00.83 or 00.84
284
5.61
31,231.79487—Cases without Code 00.83 or 00.84
952
5.68
28,569.06488—All Cases
2,374
5.17
30,180.80488—Cases with code 00.83 or 00.84
754
4.09
28,432.06488—Cases without code 00.83 or 00.84
1,620
5.67
30,994.73489—All Cases
5,493
3.04
21,385.67489—Cases with code 00.83 or 00,.84
2,154
3.07
23,122.18489—Cases without code 00.83 or 00.84
3,339
3.03
20,265.44469—All cases
29,030
8.17
56,681.64470—All Cases
385,123
3.93
36,126.23466—All Cases
3,888
9.18
76,015.66466—Cases with Code 00.73
273
10.02
71,293.33( print page 23572)466—Cases without Code 00.73
3,616
9.12
76,372.06467—All Cases
13,551
5.50
53,431.63467—Cases with Code 00.73
1,078
5.94
43,635.63467—Cases without Code 00.73
12,484
5.47
54,284.13468—All Cases
19,917
3.94
44,055.62468—Cases with Code 00.73
1,688
3.93
33,449.22468—Cases without Code 00.73
18,232
3.94
45,037.09469—All Cases
29,030
8.17
56,681.64470—All Cases
385,123
3.93
36,126.23
 The tables show that codes 00.73, 00.83, and 00.84 are appropriately assigned to their current MS-DRGs. The data do not support moving these three codes to MS-DRGs 469 and 470. Therefore, we are not proposing a change of MS-DRG assignment for codes 00.73, 00.83, and 00.84. (2) Excluding Sepsis and Septicemia From Being a MCC With Code 996.66 There are cases where a patient may be admitted with an infection of a joint prosthesis (code 996.66) and also have sepsis. In these cases, it may be possible to perform joint procedures as suggested by AAHKS. However, in other cases, a patient may be admitted with an infection of a joint prosthesis and then develop sepsis during the stay. Because our current data do not indicate whether a condition is present on admission, we could not determine whether or not the sepsis occurred after admission. Our data have consistently shown that cases of sepsis and septicemia require significant resources. Therefore, we classified the sepsis and septicemia codes as MCCs. Our clinical advisors do not believe it is appropriate to exclude all cases of sepsis and septicemia that are reported as a secondary diagnosis with code 996.66 from being classified as a MCC. We discuss septicemia as part of hospital acquired conditions provision under section II.F. of the preamble of this proposed rule. For the purposes of classifying sepsis and septicemia as non-CCs when reported with code 996.66, we do not support this recommendation. Therefore, we are not proposing that the sepsis and septicemia codes be added to the CC exclusion list for code 996.66. (3) Differences Between Stage 1 and 2 Cases With Severe Diagnoses We next examined data on AAHKS' suggestion that there are significantly differences in resource utilization for cases they refer to as Stage 1 and 2. AAHKS stated that this is particularly true for those with infections, neoplasms, or structural defects. We used the list of procedure codes listed above that AAHKS describes as Stage 1 and 2 procedures. We also used AAHKS' designated lists of Stage 1 and 2 principal diagnosis codes to examine this proposal. This proposal entails moving cases with a Stage 1 or 2 principal diagnosis and procedure out of their current MS-DRG assignment in the following 19 MS-DRGs and into a newly consolidated set of MS-DRGs: MS-DRGs 463, 464, and 465, 480, 481, and 482, 485 through 489, and 495, 496, and 497. As can be seen from the information below, there was not a significant difference in average charges between these Stage 1 and Stage 2 cases that have an MCC. Stage 1.—Cases With Infection, Neoplasm, or Structural Defect
Stage 1
Total cases
Average length of stay
Average chargesWith MCC
1,306
14.1
$79,232Without MCC
4,115
7.6
44,716
 Stage 2.—Cases With Infection, Neoplasm, or Structural Defect
Stage 2
Total cases
Average length of stay
Average chargesWith MCC
1,072
10.9
$80,781Without MCC
5,413
6.0
57,355
 Average charges for Stage 1 cases with an MCC was $79,232 compared to $80,781 for Stage 2. Stage 1 cases without an MCC had average charges of $44,716 compared to $57,355. These data do not support reconfiguring the current MS-DRGs based on this new subdivision. (4) Moving Joint Procedure Cases to New MS-DRGs Based on Secondary Diagnoses of Infection We examined AAHKS' recommendation that Stage 2 joint cases with specific secondary diagnoses of infection or neoplasm be moved out of their current MS-DRG assignments and into a newly constructed MS-DRG. We are reluctant to make this type of significant DRG change to the joint MS-DRGs based on the presence of a secondary diagnosis. This results in the movement of cases out of MS-DRGs which were configured based on the reason for the admission (for example, principal diagnosis) and surgery. The cases would instead be assigned based on conditions that are reported as secondary diagnoses. In some cases, the infection may have developed or be diagnosed during the admission. This would be a significant logic change to the MS-DRGs for joint procedures. We have not had an opportunity to examine 
                        ( print page 23573)
                        claims data based on hospital discharges under the MS-DRGs which began October 1, 2008. Our clinical advisors believe it would be more appropriate to wait for data under the new MS-DRG system to determine how well the new severity levels are addressing accurate payment for these cases before considering this approach to assigning cases to a MS-DRG. (5) Moving Cases With Infection, Neoplasms, or Structural Defects Out of 19 MS-DRGs and Into Two Newly Developed MS-DRGs The last recommended by AAHKS that we considered was moving cases with a principal diagnosis of infection, neoplasm, or structural defect from their list of Stage 1 and 2 diagnoses and consolidated them into newly constructed and modified MS-DRGs. AAHKS could not identify an existing set of MS-DRGs with similar resource utilizations into which the Stage 1 cases could be assigned. Therefore, the AAHKS recommended that CMS create three new MS-DRGs for Stage 1 cases with infections, neoplasms and structural defects which would be titled “Arthrotomy/Removal/Component exchange of Infected Hip or Knee Prosthesis with MCC, with CC, and without CC/MCC”, respectively. The AAHKS recommended moving Stage 2 cases out of MS-DRGs 466, 467, and 468, and 469 and 470 and into MS-DRGs 461 and 462. AAHKS recommended that MS-DRGs 461 and 462 be renamed “Major Joint Procedures of Lower Extremity—Bilateral/Multiple/Infection/Malignancy”. In reviewing these proposed changes, we had a number of concerns. The first concern was that these proposed changes would result in the removal of cases with varying average charges from 19 current MS-DRGs and consolidating them into two separate sets of MS-DRGs. As the data below indicate, the average charges vary from as low as $29,181 in MS-DRG 487 to $81,089 in MS-DRG 463. Furthermore, the average charges for these infection/neoplasm/structural defect cases are very similar to other cases in their respective MS-DRG assignments for many of these MS-DRGs. There are cases where the average charges are higher. In MS-DRG 469 and 470, the infection/neoplasm/structural defect cases are significantly higher. However, there are only 136 cases in MS-DRG 469 out of a total of 29,030 cases with these diagnoses. There are only 673 cases in MS-DRG 470 out of a total of 385,123 cases with one of these diagnoses. The table below clearly demonstrates the wide variety of charges for cases with these diagnoses. MS-DRGs
Number of cases
Average length of stay
Average charges463—All Cases
4,747
16.25
$73,405.46463—Cases with PDX of Infection/Malignancy/React
1,009
17.79
81,089.07464—All Cases
5,499
10.21
44,387.73464—Cases with PDX of Infection/Malignancy/React
1,420
10.59
46,800.60465—All Cases
2,271
5.95
26,631.57465—Cases with PDX of Infection/Malignancy/React
557
10.59
29,816.40466—All Cases
3,888
9.18
76,015.66466—Cases with PDX of Infection/Malignancy/React
890
10.67
79,334.69467—All Cases
13,551
5.50
53,431.63467—Cases with PDX of Infection/Malignancy/React
2,401
6.71
58,506.86468—All Cases
19,917
3.94
44,055.62468—Cases with PDX of Infection/Malignancy/React
1,994
4.76
54,322.03469—All Cases
29,030
8.17
56,681.64469—Cases with PDX of Infection/Malignancy/React
136
11.74
85,256.07470—All Cases
385,123
3.93
36,126.23470—Cases with PDX of Infection/Malignancy/React
673
6.44
59,676.31480—All Cases
25,391
9.32
52,281.65480—Cases with PDX of Infection/Malignancy/React
880
14.53
76,355.15481—All Cases
68,655
5.94
32,963.64481—Cases with PDX of Infection/Malignancy/React
878
8.78
48,655.30482—All Cases
45,832
4.86
27,266.20482—Cases with PDX of Infection/Malignancy/React
577
6.19
37,572.38485—All Cases
1,122
12.20
64,672.47485—Cases with PDX of Infection/Malignancy/React
1,122
12.20
64,672.47486—All Cases
2,061
8.03
40,758.55486—Cases with PDX of Infection/Malignancy/React
2,061
8.03
40,758.55487—All Cases
1,236
5.67
29,180.88487—Cases with PDX of Infection/Malignancy/React
1,236
5.67
29,180.88488—All Cases
2,374
5.17
30,180.80488—Cases with PDX of Infection/Malignancy/React
31
7.13
50,155.42489—All Cases
5,493
3.04
21,385.67489—Cases with PDX of Infection/Malignancy/React
36
3.72
35,313.84495—All Cases
1,860
10.94
55,103.91495—Cases with PDX of Infection/Malignancy/React
1,025
11.74
59,453.69496—All Cases
5,203
5.95
32,177.29496—Cases with PDX of Infection/Malignancy/React
2,759
6.98
36,940.99497—All Cases
6,259
3.01
21,445.60497—Cases with PDX of Infection/Malignancy/React
1,500
5.18
29,966.98
 Given the wide variety of charges and the small number of cases where there are differences in charges, we do not believe the data support the AAHKS' recommendations. The data do not support removing these cases from the 19 MS-DRGs above and consolidating them into a new set of MS-DRGs, either newly created, or by adding them to 
                        ( print page 23574)
                        MS-DRG 461 or 462, which have average charges of $80,718 and $57,355, respectively. A second major concern involves redefining MS-DRGs 461 and 462 is that these MS-DRG currently captures bilateral and multiple joint procedures. These MS-DRGs were specifically created to capture a unique set of patients who undergo procedures on more than one lower joint. Redefining these MS-DRGs to include both single and multiple joints undermines the clinical coherence of this MS-DRG. It would create a widely diverse group of patients based on either a list of specific diagnoses or the fact that the patient had multiple lower joint procedures. f. Conclusion The AAHKS recommended a number of complicated, interrelated MS-DRG changes to the joint procedure MS-DRGs. We have not yet had the opportunity to review data for these cases under the new MS-DRGs. We did analyze the impact of these recommendations using cases prior to the implementation of MS-DRGs. The recommendations were difficult to analyze because there were so many separate logic changes that impacted a number of MS-DRGs. We did examine each major suggestion separately, and found that our data and clinical analysis did not support making these changes. Therefore, we are not proposing any revisions to the joint procedure MS-DRGs for FY 2009. We look forward to examining these issues once we receive data under the MS-DRG system. We also welcome additional recommendations from the AAHKS and others on a more incremental approach to resolving its concerns about the ability of the current MS-DRGs to adequately capture differences in severity levels for joint procedure patients. 5. MDC 18 (Infections and Parasitic Diseases (Systemic or Unspecified Sites)): Severe Sepsis We received a request from a manufacturer to modify the titles for three MS-DRGs with the most significant concentration of severe sepsis patients. The manufacturer stated that modification of the titles will assist in quality improvement efforts and provide a better reflection on the types of patients included in these MS-DRGs. Specifically, the manufacturer urged CMS to incorporate the term “severe sepsis” into the titles of the following MS-DRGs that became effective October 1, 2007 (FY 2008) MS-DRG 870 (Septicemia with Mechanical Ventilation 96+ Hours).
                    MS-DRG 871 (Septicemia without Mechanical Ventilation 96+ Hours with MCC).
                    MS-DRG 872 (Septicemia without Mechanical Ventilation 96+ Hours without MCC). These MS-DRGs were created to better recognize severity of illness among patients diagnosed with conditions including septicemia, severe sepsis, septic shock, and systemic inflammatory response syndrome (SIRS) who are also treated with mechanical ventilation for a specified duration of time. According to the manufacturer, “severe sepsis is a common, deadly and costly disease, yet the number of patients impacted and the outcomes associated with their care remain largely hidden within the administrative data set.” The manufacturer further noted that, although improvements have been made in the ICD-9-CM coding of severe sepsis (diagnosis code 995.92) and septic shock (diagnosis code 785.52), results of an analysis demonstrated an unacceptably high mortality rate for patients reported to have those conditions. The manufacturer believed that revising the titles to incorporate “severe sepsis” will provide various clinicians and researchers the opportunity to improve outcomes for these patients. Therefore, the manufacturer recommended revising the current MS-DRG titles as follows: Proposed Revised MS-DRG 870 (Septicemia or Severe Sepsis with Mechanical Ventilation 96+ Hours).
                    Proposed Revised MS-DRG 871 (Septicemia or Severe Sepsis without Mechanical Ventilation 96+ Hours with MCC).
                    Proposed Revised MS-DRG 872 (Septicemia or Severe Sepsis without Mechanical Ventilation 96+ Hours without MCC). We agree with the manufacturer that revising the current MS-DRG titles to include the term “severe sepsis” would better assist in the recognition and identification of this disease, which could lead to better clinical outcomes and quality improvement efforts. In addition, both severe sepsis (diagnosis code 995.92) and septic shock (diagnosis code 785.52) are currently already assigned to these three MS-DRGs. Therefore, we are proposing to revise the titles of MS-DRGs 870, 871, and 872 to reflect severe sepsis in the titles as suggested by the manufacturer and listed above for FY 2009. 6. MDC 21 (Injuries, Poisonings and Toxic Effects of Drugs): Traumatic Compartment Syndrome Traumatic compartment syndrome is a condition in which increased pressure within a confined anatomical space that contains blood vessels, muscles, nerves, and bones causes a decrease in blood flow and may lead to tissue necrosis. There are five ICD-9-CM diagnosis codes that were created effective October 1, 2006, to identify traumatic compartment syndrome of various sites. 958.90 (Compartment syndrome, unspecified).
                    958.91 (Traumatic compartment syndrome of upper extremity).
                    958.92 (Traumatic compartment syndrome of lower extremity).
                    958.93 (Traumatic compartment syndrome of abdomen).
                    958.99 (Traumatic compartment syndrome of other sites) . Cases with one of the diagnosis codes listed above reported as the principal diagnosis and no operating room procedure are assigned to either MS-DRG 922 (Other Injury, Poisoning and Toxic Effect Diagnosis with MCC) or MS-DRG 923 (Other Injury, Poisoning and Toxic Effect Diagnosis without MCC) in MDC 21. In the FY 2008 IPPS final rule with comment period when we adopted the MS-DRGs, we inadvertently omitted the addition of these traumatic compartment syndrome codes 958.90 through 958.99 to the multiple trauma MS-DRGs 963 (Other Multiple Significant Trauma with MCC), MS-DRG 964 (Other Multiple Significant Trauma with CC), and MS-DRG 965 (Other Multiple Significant Trauma without CC/MCC) in MDC 24 (Multiple Significant Trauma). Cases are assigned to MDC 24 based on the principal diagnosis of trauma and at least two significant trauma diagnosis codes (either as principal or secondary diagnoses) from different body site categories. There are eight different body site categories as follows: Significant head trauma.
                    Significant chest trauma.
                    Significant abdominal trauma.
                    Significant kidney trauma.
                    Significant trauma of the urinary system.
                    Significant trauma of the pelvis or spine.
                    Significant trauma of the upper limb.
                    Significant trauma of the lower limb. Therefore, we are proposing to add traumatic compartment syndrome codes 958.90 through 958.99 to MS-DRGs 963 and MS-DRG 965 in MDC 24. Under 
                        ( print page 23575)
                        this proposal, codes 958.90 through 958.99 would be added to the list of principal diagnosis of significant trauma. In addition, code 958.91 would be added to the list of significant trauma of upper limb, code 958.92 would be added to the list of significant trauma of lower limb, and code 958.93 would be added to the list of significant abdominal trauma. 7. Medicare Code Editor (MCE) Changes As explained under section II.B.1. of the preamble of this proposed rule, the Medicare Code Editor (MCE) is a software program that detects and reports errors in the coding of Medicare claims data. Patient diagnoses, procedure(s), and demographic information are entered into the Medicare claims processing systems and are subjected to a series of automated screens. The MCE screens are designed to identify cases that require further review before classification into a DRG. For FY 2009, we are proposing to make the following changes to the MCE edits: a. List of Unacceptable Principal Diagnoses in MCE Diagnosis code V62.84 (Suicidal ideation) was created for use beginning October 1, 2005. At the time the diagnosis code was created, it was not clear that the creation of this code was requested in order to describe the principal reason for admission to a facility or the principal reason for treatment. The NCHS Official ICD-9-CM Coding Guidelines therefore categorized the group of codes in V62.X for use only as additional or secondary diagnoses. It has been brought to the government's attention that the use of this code is hampered by its designation as an additional-only diagnosis. NCHS has therefore modified the Official Coding Guidelines for FY 2009 by making this code acceptable as a principal diagnosis as well as an additional diagnosis. In order to conform to this change by NCHS, we are proposing to remove code V62.84 from the MCE list of “Unacceptable Principal Diagnoses” for FY 2009. b. Diagnoses Allowed for Males Only Edit There are four diagnosis codes that were inadvertently left off of the MCE edit titled “Diagnoses Allowed for Males Only.” These codes are located in the chapter of the ICD-9-CM diagnosis codes entitled “Diseases of Male Genital Organs.” We are proposing to add the following four codes to this MCE edit: 603.0 (Encysted hydrocele), 603.1 (Infected hydrocele), 603.8 (Other specified types of hydrocele), and 603.9 (Hydrocele, unspecified). We have had no reported problems or confusion with the omission of these codes from this section of the MCE, but in order to have an accurate product, we are proposing that these codes be added for FY 2009. c. Limited Coverage Edit As explained in section II.G.1. of the preamble of this proposed rule, we are proposing to remove procedure code 37.52 (Implantation of internal biventricular heart replacement system) from the MCE “Non-Covered Procedure” edit and to assign it to the “Limited Coverage” edit. We are proposing to include in this proposed edit the requirement that ICD-9-CM diagnosis code V70.7 (Examination of participant in clinical trial) also be present on the claim. We are proposing that claims submitted without both procedure code 37.52 and diagnosis code V70.7 would be denied because they would not be in compliance with the proposed coverage policy explained in section II.G.1. of this preamble. 8. Surgical Hierarchies Some inpatient stays entail multiple surgical procedures, each one of which, occurring by itself, could result in assignment of the case to a different MS-DRG within the MDC to which the principal diagnosis is assigned. Therefore, it is necessary to have a decision rule within the GROUPER by which these cases are assigned to a single MS-DRG. The surgical hierarchy, an ordering of surgical classes from most resource-intensive to least resource-intensive, performs that function. Application of this hierarchy ensures that cases involving multiple surgical procedures are assigned to the MS-DRG associated with the most resource-intensive surgical class. Because the relative resource intensity of surgical classes can shift as a function of MS-DRG reclassification and recalibrations, we reviewed the surgical hierarchy of each MDC, as we have for previous reclassifications and recalibrations, to determine if the ordering of classes coincides with the intensity of resource utilization. A surgical class can be composed of one or more MS-DRGs. For example, in MDC 11, the surgical class “kidney transplant” consists of a single MS-DRG (MS-DRG 652) and the class “kidney, ureter and major bladder procedures” consists of three MS-DRGs (MS-DRGs 653, 654, and 655). Consequently, in many cases, the surgical hierarchy has an impact on more than one MS-DRG. The methodology for determining the most resource-intensive surgical class involves weighting the average resources for each MS-DRG by frequency to determine the weighted average resources for each surgical class. For example, assume surgical class A includes MS-DRGs 1 and 2 and surgical class B includes MS-DRGs 3, 4, and 5. Assume also that the average charge of MS-DRG 1 is higher than that of MS-DRG 3, but the average charges of MS-DRGs 4 and 5 are higher than the average charge of MS-DRG 2. To determine whether surgical class A should be higher or lower than surgical class B in the surgical hierarchy, we would weight the average charge of each MS-DRG in the class by frequency (that is, by the number of cases in the MS-DRG) to determine average resource consumption for the surgical class. The surgical classes would then be ordered from the class with the highest average resource utilization to that with the lowest, with the exception of “other O.R. procedures” as discussed below. This methodology may occasionally result in assignment of a case involving multiple procedures to the lower-weighted MS-DRG (in the highest, most resource-intensive surgical class) of the available alternatives. However, given that the logic underlying the surgical hierarchy provides that the GROUPER search for the procedure in the most resource-intensive surgical class, in cases involving multiple procedures, this result is sometimes unavoidable. We note that, notwithstanding the foregoing discussion, there are a few instances when a surgical class with a lower average charge is ordered above a surgical class with a higher average charge. For example, the “other O.R. procedures” surgical class is uniformly ordered last in the surgical hierarchy of each MDC in which it occurs, regardless of the fact that the average charge for the MS-DRG or MS-DRGs in that surgical class may be higher than that for other surgical classes in the MDC. The “other O.R. procedures” class is a group of procedures that are only infrequently related to the diagnoses in the MDC, but are still occasionally performed on patients in the MDC with these diagnoses. Therefore, assignment to these surgical classes should only occur if no other surgical class more closely related to the diagnoses in the MDC is appropriate. A second example occurs when the difference between the average charges for two surgical classes is very small. We have found that small differences generally do not warrant reordering of the hierarchy because, as a result of reassigning cases on the basis of the hierarchy change, the average charges are likely to shift such that the higher-ordered surgical class has a lower 
                        ( print page 23576)
                        average charge than the class ordered below it. For FY 2009, we are proposing a revision of the surgical hierarchy for MDC 5 (Diseases and Disorders of the Circulatory System) by placing MS-DRG 245 (AICD Generator Procedures) above proposed new MS-DRG 265 (AICD Lead Procedures). 9. CC Exclusions List a. Background As indicated earlier in the preamble of this proposed rule, under the IPPS DRG classification system, we have developed a standard list of diagnoses that are considered CCs. Historically, we developed this list using physician panels that classified each diagnosis code based on whether the diagnosis, when present as a secondary condition, would be considered a substantial complication or comorbidity. A substantial complication or comorbidity was defined as a condition that, because of its presence with a specific principal diagnosis, would cause an increase in the length of stay by at least 1 day in at least 75 percent of the patients. We refer readers to section II.D.2. and 3. of the preamble of the FY 2008 IPPS final rule with comment period for a discussion of the refinement of CCs in relation to the MS-DRGs we adopted for FY-2008 (72 FR 47152 through 47121). b. CC Exclusions List for FY 2009 In the September 1, 1987 final notice (52-FR-33143) concerning changes to the DRG classification system, we modified the GROUPER logic so that certain diagnoses included on the standard list of CCs would not be considered valid CCs in combination with a particular principal diagnosis. We created the CC Exclusions List for the following reasons: (1) To preclude coding of CCs for closely related conditions; (2) to preclude duplicative or inconsistent coding from being treated as CCs; and (3) to ensure that cases are appropriately classified between the complicated and uncomplicated DRGs in a pair. As we indicated above, we developed a list of diagnoses, using physician panels, to include those diagnoses that, when present as a secondary condition, would be considered a substantial complication or comorbidity. In previous years, we have made changes to the list of CCs, either by adding new CCs or deleting CCs already on the list. In the May 19, 1987 proposed notice (52 FR 18877) and the September 1, 1987 final notice (52 FR 33154), we explained that the excluded secondary diagnoses were established using the following five principles: Chronic and acute manifestations of the same condition should not be considered CCs for one another.
                    Specific and nonspecific (that is, not otherwise specified (NOS)) diagnosis codes for the same condition should not be considered CCs for one another.
                    Codes for the same condition that cannot coexist, such as partial/total, unilateral/bilateral, obstructed/unobstructed, and benign/malignant, should not be considered CCs for one another.
                    Codes for the same condition in anatomically proximal sites should not be considered CCs for one another.
                    Closely related conditions should not be considered CCs for one another. The creation of the CC Exclusions List was a major project involving hundreds of codes. We have continued to review the remaining CCs to identify additional exclusions and to remove diagnoses from the master list that have been shown not to meet the definition of a CC.[12] For FY 2009, we are proposing to make limited revisions to the CC Exclusions List to take into account the changes that will be made in the ICD-9-CM diagnosis coding system effective October 1, 2008. (See section II.G.11. of the preamble of this proposed rule with comment period for a discussion of ICD-9-CM changes.) We are proposing to make these changes in accordance with the principles established when we created the CC Exclusions List in 1987. In addition, as discussed in section II.D.3. of the preamble of this proposed rule, we are indicating on the CC exclusion list some updates to reflect the exclusion of a few codes from being an MCC under the MS-DRG system that we adopted for FY 2008. Tables 6G and 6H, Additions to and Deletions from the CC Exclusion List, respectively, which will be effective for discharges occurring on or after October 1, 2008, are not being published in this proposed rule because of the length of the two tables. Instead, we are making them available through the Internet on the CMS Web site at: 
                        *http://www.cms.hhs.gov/​AcuteInpatientPPS*. Each of these principal diagnoses for which there is a CC exclusion is shown in Tables 6G and 6H with an asterisk, and the conditions that will not count as a CC, are provided in an indented column immediately following the affected principal diagnosis. A complete updated MCC, CC, and Non-CC Exclusions List is also available through the Internet on the CMS Web site at: 
                        *http:/www.cms.hhs.gov/​AcuteInpatientPPS*. Beginning with discharges on or after October 1, 2008, the indented diagnoses will not be recognized by the GROUPER as valid CCs for the asterisked principal diagnosis. To assist readers in the review of changes to the MCC and CC lists that occurred as a result of updates to the ICD-9-CM codes, as described in Tables 6A, 6C, and 6E, we are providing the following summaries of those MCC and CC changes. Summary of Additions to the MS-DRG MCC List.—Table 6I.1
Code
Description249.10
Secondary diabetes mellitus with ketoacidosis, not stated as uncontrolled, or unspecified.249.11
Secondary diabetes mellitus with ketoacidosis, uncontrolled.249.20
Secondary diabetes mellitus with hyperosmolarity, not stated as uncontrolled, or unspecified.( print page 23577)249.21
Secondary diabetes mellitus with hyperosmolarity, uncontrolled.249.30
Secondary diabetes mellitus with other coma, not stated as uncontrolled, or unspecified.249.31
Secondary diabetes mellitus with other coma, uncontrolled.707.23
Pressure ulcer, stage III.707.24
Pressure ulcer, stage IV.777.50
Necrotizing enterocolitis in newborn, unspecified.777.51
Stage I necrotizing enterocolitis in newborn.777.52
Stage II necrotizing enterocolitis in newborn.777.53
Stage III necrotizing enterocolitis in newborn.780.72
Functional quadriplegia.
 Summary of Deletions From the MS-DRG MCC List.—Table 6I.2
Code
Description136.2
Specific infections by free-living amebae.511.8
Other specified forms of pleural effusion, except tuberculous.707.02
Pressure ulcer, upper back.707.03
Pressure ulcer, lower back.707.04
Pressure ulcer, hip.707.05
Pressure ulcer, buttock.707.06
Pressure ulcer, ankle.707.07
Pressure ulcer, heel.777.5
Necrotizing enterocolitis in fetus or newborn.
 Summary of Additions to the MS-DRG CC List.—Table 6J.1
Code
Description046.11
Variant Creutzfeldt-Jakob disease.046.19
Other and unspecified Creutzfeldt-Jakob disease.046.71
Gerstmann-Sträussler-Scheinker syndrome.046.72
Fatal familial insomnia.046.79
Other and unspecified prion disease of central nervous system.059.01
Monkeypox.059.21
Tanapox.136.29
Other specific infections by free-living amebae.199.2
Malignant neoplasm associated with transplant organ.203.02
Multiple myeloma, in relapse.203.12
Plasma cell leukemia, in relapse.203.82
Other immunoproliferative neoplasms, in relapse.204.02
Acute lymphoid leukemia, in relapse.204.12
Chronic lymphoid leukemia, in relapse.204.22
Subacute lymphoid leukemia, in relapse.204.82
Other lymphoid leukemia, in relapse.204.92
Unspecified lymphoid leukemia, in relapse.205.02
Acute myeloid leukemia, in relapse.205.12
Chronic myeloid leukemia, in relapse.205.22
Subacute myeloid leukemia, in relapse.205.32
Myeloid sarcoma, in relapse.205.82
Other myeloid leukemia, in relapse.205.92
Unspecified myeloid leukemia, in relapse.206.02
Acute monocytic leukemia, in relapse.206.12
Chronic monocytic leukemia, in relapse.206.22
Subacute monocytic leukemia, in relapse.206.82
Other monocytic leukemia, in relapse.206.92
Unspecified monocytic leukemia, in relapse.207.02
Acute erythremia and erythroleukemia, in relapse.207.12
Chronic erythremia, in relapse.207.22
Megakaryocytic leukemia, in relapse.207.82
Other specified leukemia, in relapse.208.02
Acute leukemia of unspecified cell type, in relapse.208.12
Chronic leukemia of unspecified cell type, in relapse.208.22
Subacute leukemia of unspecified cell type, in relapse.208.82
Other leukemia of unspecified cell type, in relapse.208.92
Unspecified leukemia, in relapse.209.00
Malignant carcinoid tumor of the small intestine, unspecified portion.209.01
Malignant carcinoid tumor of the duodenum.209.02
Malignant carcinoid tumor of the jejunum.209.03
Malignant carcinoid tumor of the ileum.( print page 23578)209.10
Malignant carcinoid tumor of the large intestine, unspecified portion.209.11
Malignant carcinoid tumor of the appendix.209.12
Malignant carcinoid tumor of the cecum.209.13
Malignant carcinoid tumor of the ascending colon.209.14
Malignant carcinoid tumor of the transverse colon.209.15
Malignant carcinoid tumor of the descending colon.209.16
Malignant carcinoid tumor of the sigmoid colon.209.17
Malignant carcinoid tumor of the rectum.209.20
Malignant carcinoid tumor of unknown primary site.209.21
Malignant carcinoid tumor of the bronchus and lung.209.22
Malignant carcinoid tumor of the thymus.209.23
Malignant carcinoid tumor of the stomach.209.24
Malignant carcinoid tumor of the kidney.209.25
Malignant carcinoid tumor of foregut, not otherwise specified.209.26
Malignant carcinoid tumor of midgut, not otherwise specified.209.27
Malignant carcinoid tumor of hindgut, not otherwise specified.209.29
Malignant carcinoid tumor of other sites.209.30
Malignant poorly differentiated neuroendocrine carcinoma, any site.238.77
Post-transplant lymphoproliferative disorder (PTLD).279.50
Graft-versus-host disease, unspecified.279.51
Acute graft-versus-host disease.279.52
Chronic graft-versus-host disease.279.53
Acute on chronic graft-versus-host disease.346.60
Persistent migraine aura with cerebral infarction, without mention of intractable migraine without mention of status migrainosus.346.61
Persistent migraine aura with cerebral infarction, with intractable migraine, so stated, without mention of status migrainosus.346.62
Persistent migraine aura with cerebral infarction, without mention of intractable migraine with status migrainosus.346.63
Persistent migraine aura with cerebral infarction, with intractable migraine, so stated, with status migrainosus.511.81
Malignant pleural effusion.511.89
Other specified forms of effusion, except tuberculous.649.70
Cervical shortening, unspecified as to episode of care or not applicable.649.71
Cervical shortening, delivered, with or without mention of antepartum condition.649.73
Cervical shortening, antepartum condition or complication.695.12
Erythema multiforme major.695.13
Stevens-Johnson syndrome.695.14
Stevens-Johnson syndrome-toxic epidermal necrolysis overlap syndrome.695.15
Toxic epidermal necrolysis.695.53
Exfoliation due to erythematous condition involving 30-39 percent of body surface.695.54
Exfoliation due to erythematous condition involving 40-49 percent of body surface.695.55
Exfoliation due to erythematous condition involving 50-59 percent of body surface.695.56
Exfoliation due to erythematous condition involving 60-69 percent of body surface.695.57
Exfoliation due to erythematous condition involving 70-79 percent of body surface.695.58
Exfoliation due to erythematous condition involving 80-89 percent of body surface.695.59
Exfoliation due to erythematous condition involving 90 percent or more of body surface.997.31
Ventilator associated pneumonia.997.39
Other respiratory complications.998.30
Disruption of wound, unspecified.998.33
Disruption of traumatic wound repair.999.81
Extravasation of vesicant chemotherapy.999.82
Extravasation of other vesicant agent.
 Summary of Deletions to the MS-DRG CC List.—Table 6J.2
Code
Description046.1
Jakob-Creutzfeldt disease.337.0
Idiopathic peripheral autonomic neuropathy.695.1
Erythema multiforme.707.00
Pressure ulcer, unspecified site.707.01
Pressure ulcer, elbow.707.09
Pressure ulcer, other site.997.3
Respiratory complications.999.8
Other transfusion reaction.
 Alternatively, the complete documentation of the GROUPER logic, including the current CC Exclusions List, is available from 3M/Health Information Systems (HIS), which, under contract with CMS, is responsible for updating and maintaining the GROUPER program. The current DRG Definitions Manual, Version 25.0, is available for $225.00, which includes $15.00 for shipping and handling. Version 26.0 of this manual, which will include the final FY 2009 DRG changes, will be available in hard copy for $250.00. Version 26.0 of the manual is also available on a CD for $200.00; a combination hard copy and CD is available for $400.00. These manuals may be obtained by writing 3M/HIS at the following address: 100 Barnes Road, Wallingford, CT 06492; or by calling (203) 949-0303. Please specify the revision or revisions requested. 10. Review of Procedure Codes in MS DRGs 981, 982, and 983; 984, 985, and 986; and 987, 988, and 989 Each year, we review cases assigned to former CMS DRG 468 (Extensive O.R. Procedure Unrelated to Principal Diagnosis), CMS DRG 476 (Prostatic O.R. Procedure Unrelated to Principal Diagnosis), and CMS DRG 477 (Nonextensive O.R. Procedure Unrelated to Principal Diagnosis) to determine whether it would be appropriate to change the procedures assigned among 
                        ( print page 23579)
                        these CMS DRGs. Under the MS-DRGs that we adopted for FY 2008, CMS DRG 468 was split three ways and became MS-DRGs 981, 982, and 983 (Extensive O.R. Procedure Unrelated to Principal Diagnosis with MCC, with CC, and without CC/MCC). CMS DRG 476 became MS-DRGs 984, 985, and 986 (Prostatic O.R. Procedure Unrelated to Principal Diagnosis with MCC, with CC, and without CC/MCC). CMS DRG 477 became MS-DRGs 987, 988, and 989 (Nonextensive O.R. Procedure Unrelated to Principal Diagnosis with MCC, with CC, and without CC/MCC). MS-DRGs 981 through 983, 984 through 986, and 987 through 989 (formerly CMS DRGs 468, 476, and 477, respectively) are reserved for those cases in which none of the O.R. procedures performed are related to the principal diagnosis. These DRGs are intended to capture atypical cases, that is, those cases not occurring with sufficient frequency to represent a distinct, recognizable clinical group. MS-DRGs 984 through 986 (previously CMS DRG 476) are assigned to those discharges in which one or more of the following prostatic procedures are performed and are unrelated to the principal diagnosis: 60.0, Incision of prostate.
                    60.12, Open biopsy of prostate.
                    60.15, Biopsy of periprostatic tissue.
                    60.18, Other diagnostic procedures on prostate and periprostatic tissue.
                    60.21, Transurethral prostatectomy.
                    60.29, Other transurethral prostatectomy.
                    60.61, Local excision of lesion of prostate.
                    60.69, Prostatectomy, not elsewhere classified.
                    60.81, Incision of periprostatic tissue.
                    60.82, Excision of periprostatic tissue.
                    60.93, Repair of prostate.
                    60.94, Control of (postoperative) hemorrhage of prostate.
                    60.95, Transurethral balloon dilation of the prostatic urethra.
                    60.96, Transurethral destruction of prostate tissue by microwave thermotherapy.
                    60.97, Other transurethral destruction of prostate tissue by other thermotherapy.
                    60.99, Other operations on prostate. All remaining O.R. procedures are assigned to MS-DRGs 981 through 983 and 987 through 989, with MS-DRGs 987 through 989 assigned to those discharges in which the only procedures performed are nonextensive procedures that are unrelated to the principal diagnosis.[13] For FY 2009, we are not proposing to change the procedures assigned among these DRGs. a. Moving Procedure Codes From MS-DRGs 981 Through 983 or MS-DRGs 987 Through 989 to MDCs We annually conduct a review of procedures producing assignment to MS-DRGs 981 through 983 (formerly CMS DRG 468) or MS-DRGs 987 through 989 (formerly CMS DRG 477) on the basis of volume, by procedure, to see if it would be appropriate to move procedure codes out of these DRGs into one of the surgical DRGs for the MDC into which the principal diagnosis falls. The data are arrayed in two ways for comparison purposes. We look at a frequency count of each major operative procedure code. We also compare procedures across MDCs by volume of procedure codes within each MDC. We identify those procedures occurring in conjunction with certain principal diagnoses with sufficient frequency to justify adding them to one of the surgical DRGs for the MDC in which the diagnosis falls. For FY 2009, we are not proposing to remove any procedures from MS-DRGs 981 through 983 or MS-DRGs 987 through 989. b. Reassignment of Procedures Among MS-DRGs 981 Through 983, 984 Through 986, and 987 Through 989) We also annually review the list of ICD-9-CM procedures that, when in combination with their principal diagnosis code, result in assignment to MS-DRGs 981 through 983, 984 through 986, and 987 through 989 (formerly, CMS DRGs 468, 476, and 477, respectively), to ascertain whether any of those procedures should be reassigned from one of these three DRGs to another of the three DRGs based on average charges and the length of stay. We look at the data for trends such as shifts in treatment practice or reporting practice that would make the resulting DRG assignment illogical. If we find these shifts, we would propose to move cases to keep the DRGs clinically similar or to provide payment for the cases in a similar manner. Generally, we move only those procedures for which we have an adequate number of discharges to analyze the data. For FY 2009, we are not proposing to move any procedure codes among these DRGs. c. Adding Diagnosis or Procedure Codes to MDCs Based on our review this year, we are not proposing to add any diagnosis codes to MDCs for FY 2009. 11. Changes to the ICD-9-CM Coding System As described in section II.B.1. of the preamble of this proposed rule, the ICD-9-CM is a coding system used for the reporting of diagnoses and procedures performed on a patient. In September 1985, the ICD-9-CM Coordination and Maintenance Committee was formed. This is a Federal interdepartmental committee, co-chaired by the National Center for Health Statistics (NCHS), the Centers for Disease Control and Prevention, and CMS, charged with maintaining and updating the ICD-9-CM system. The Committee is jointly responsible for approving coding changes, and developing errata, addenda, and other modifications to the ICD-9-CM to reflect newly developed procedures and technologies and newly identified diseases. The Committee is also responsible for promoting the use of Federal and non-Federal educational programs and other communication techniques with a view toward standardizing coding applications and upgrading the quality of the classification system. The Official Version of the ICD-9-CM contains the list of valid diagnosis and procedure codes. (The Official Version of the ICD-9-CM is available from the Government Printing Office on CD-ROM for $27.00 by calling (202) 512-1800.) Complete information on ordering the CD-ROM is also available at: 
                        *http://www.cdc.gov/​nchs/​products/​prods/​subject/​icd96ed.htm.*
                         The Official 
                        ( print page 23580)
                        Version of the ICD-9-CM is no longer available in printed manual form from the Federal Government; it is only available on CD-ROM. Users who need a paper version are referred to one of the many products available from publishing houses. The NCHS has lead responsibility for the ICD-9-CM diagnosis codes included in the 
                        *Tabular List*
                         and 
                        *Alphabetic Index for Diseases*, while CMS has lead responsibility for the ICD-9-CM procedure codes included in the 
                        *Tabular List*
                         and 
                        *Alphabetic Index for Procedures.* The Committee encourages participation in the above process by health-related organizations. In this regard, the Committee holds public meetings for discussion of educational issues and proposed coding changes. These meetings provide an opportunity for representatives of recognized organizations in the coding field, such as the American Health Information Management Association (AHIMA), the American Hospital Association (AHA), and various physician specialty groups, as well as individual physicians, health information management professionals, and other members of the public, to contribute ideas on coding matters. After considering the opinions expressed at the public meetings and in writing, the Committee formulates recommendations, which then must be approved by the agencies. The Committee presented proposals for coding changes for implementation in FY 2009 at a public meeting held on September 27-28, 2007 and finalized the coding changes after consideration of comments received at the meetings and in writing by December 3, 2007. Those coding changes are announced in Tables 6A through 6F in the Addendum to this proposed rule. The Committee held its 2008 meeting on March 19-20, 2008. Proposed new codes for which there was a consensus of public support and for which complete tabular and indexing changes can be made by May 2008 will be included in the October 1, 2008 update to ICD-9-CM. Code revisions that were discussed at the March 19-20, 2008 Committee meeting but that could not be finalized in time to include them in the Addendum to this proposed rule are not included in Tables 6A through 6F. These additional codes will be included in Tables 6A through 6F of the final rule with comment period and are marked with an asterisk (*). Copies of the minutes of the procedure codes discussions at the Committee's September 27-28, 2007 meeting can be obtained from the CMS Web site at: 
                        *http://cms.hhs.gov/​ICD9ProviderDiagnosticCodes/​03_​meetings.asp*. The minutes of the diagnosis codes discussions at the September 27-28, 2007 meeting are found at: 
                        *http://www.cdc.gov/​nchs/​icd9.htm*. Paper copies of these minutes are no longer available and the mailing list has been discontinued. These Web sites also provide detailed information about the Committee, including information on requesting a new code, attending a Committee meeting, and timeline requirements and meeting dates. We encourage commenters to address suggestions on coding issues involving diagnosis codes to: Donna Pickett, Co-Chairperson, ICD-9-CM Coordination and Maintenance Committee, NCHS, Room 2402, 3311 Toledo Road, Hyattsville, MD 20782. Comments may be sent by E-mail to: 
                        *dfp4@cdc.gov*. Questions and comments concerning the procedure codes should be addressed to: Patricia E. Brooks, Co-Chairperson, ICD-9-CM Coordination and Maintenance Committee, CMS, Center for Medicare Management, Hospital and Ambulatory Policy Group, Division of Acute Care, C4-08-06, 7500 Security Boulevard, Baltimore, MD 21244-1850. Comments may be sent by E-mail to: 
                        *patricia.brooks2@cms.hhs.gov*. The ICD-9-CM code changes that have been approved will become effective October 1, 2008. The new ICD-9-CM codes are listed, along with their DRG classifications, in Tables 6A and 6B (New Diagnosis Codes and New Procedure Codes, respectively) in the Addendum to this proposed rule. As we stated above, the code numbers and their titles were presented for public comment at the ICD-9-CM Coordination and Maintenance Committee meetings. Both oral and written comments were considered before the codes were approved. In this proposed rule, we are only soliciting comments on the proposed classification of these new codes. For codes that have been replaced by new or expanded codes, and the corresponding new or expanded diagnosis codes are included in Table 6A. New procedure codes are shown in Table 6B. Diagnosis codes that have been replaced by expanded codes or other codes or have been deleted are in Table 6C (Invalid Diagnosis Codes). These invalid diagnosis codes will not be recognized by the GROUPER beginning with discharges occurring on or after October 1, 2008. Table 6D contains invalid procedure codes. These invalid procedure codes will not be recognized by the GROUPER beginning with discharges occurring on or after October 1, 2008. Revisions to diagnosis code titles are in Table 6E (Revised Diagnosis Code Titles), which also includes the MS-DRG assignments for these revised codes. Table 6F includes revised procedure code titles for FY 2009. In the September 7, 2001 final rule implementing the IPPS new technology add-on payments (66 FR 46906), we indicated we would attempt to include proposals for procedure codes that would describe new technology discussed and approved at the Spring meeting as part of the code revisions effective the following October. As stated previously, ICD-9-CM codes discussed at the March 19-20, 2008 Committee meeting that received consensus and that are finalized by May 2008, will be included in Tables 6A through 6F of the Addendum to the final rule. Section 503(a) of Pub. L. 108-173 included a requirement for updating ICD-9-CM codes twice a year instead of a single update on October 1 of each year. This requirement was included as part of the amendments to the Act relating to recognition of new technology under the IPPS. Section 503(a) amended section 1886(d)(5)(K) of the Act by adding a clause (vii) which states that the “Secretary shall provide for the addition of new diagnosis and procedure codes on April 1 of each year, but the addition of such codes shall not require the Secretary to adjust the payment (or diagnosis-related group classification) * * * until the fiscal year that begins after such date.” This requirement improves the recognition of new technologies under the IPPS system by providing information on these new technologies at an earlier date. Data will be available 6 months earlier than would be possible with updates occurring only once a year on October 1. While section 1886(d)(5)(K)(vii) of the Act states that the addition of new diagnosis and procedure codes on April 1 of each year shall not require the Secretary to adjust the payment, or DRG classification, under section 1886(d) of the Act until the fiscal year that begins after such date, we have to update the DRG software and other systems in order to recognize and accept the new codes. We also publicize the code changes and the need for a mid-year systems update by providers to identify the new codes. Hospitals also have to obtain the new code books and encoder updates, and make other system changes in order to identify and report the new codes. The ICD-9-CM Coordination and Maintenance Committee holds its 
                        ( print page 23581)
                        meetings in the spring and fall in order to update the codes and the applicable payment and reporting systems by October 1 of each year. Items are placed on the agenda for the ICD-9-CM Coordination and Maintenance Committee meeting if the request is received at least 2 months prior to the meeting. This requirement allows time for staff to review and research the coding issues and prepare material for discussion at the meeting. It also allows time for the topic to be publicized in meeting announcements in the 
                        **Federal Register**
                         as well as on the CMS Web site. The public decides whether or not to attend the meeting based on the topics listed on the agenda. Final decisions on code title revisions are currently made by March 1 so that these titles can be included in the IPPS proposed rule. A complete addendum describing details of all changes to ICD-9-CM, both tabular and index, is published on the CMS and NCHS Web sites in May of each year. Publishers of coding books and software use this information to modify their products that are used by health care providers. This 5-month time period has proved to be necessary for hospitals and other providers to update their systems. A discussion of this timeline and the need for changes are included in the December 4-5, 2005 ICD-9-CM Coordination and Maintenance Committee minutes. The public agreed that there was a need to hold the fall meetings earlier, in September or October, in order to meet the new implementation dates. The public provided comment that additional time would be needed to update hospital systems and obtain new code books and coding software. There was considerable concern expressed about the impact this new April update would have on providers. In the FY 2005 IPPS final rule, we implemented section 1886(d)(5)(K)(vii) of the Act, as added by section 503(a) of Pub. L. 108-173, by developing a mechanism for approving, in time for the April update, diagnosis and procedure code revisions needed to describe new technologies and medical services for purposes of the new technology add-on payment process. We also established the following process for making these determinations. Topics considered during the Fall ICD-9-CM Coordination and Maintenance Committee meeting are considered for an April 1 update if a strong and convincing case is made by the requester at the Committee's public meeting. The request must identify the reason why a new code is needed in April for purposes of the new technology process. The participants at the meeting and those reviewing the Committee meeting summary report are provided the opportunity to comment on this expedited request. All other topics are considered for the October 1 update. Participants at the Committee meeting are encouraged to comment on all such requests. There were no requests approved for an expedited April l, 2008 implementation of an ICD-9-CM code at the September 27-28, 2007 Committee meeting. Therefore, there were no new ICD-9-CM codes implemented on April 1, 2008. We believe that this process captures the intent of section 1886(d)(5)(K)(vii) of the Act. This requirement was included in the provision revising the standards and process for recognizing new technology under the IPPS. In addition, the need for approval of new codes outside the existing cycle (October 1) arises most frequently and most acutely where the new codes will identify new technologies that are (or will be) under consideration for new technology add-on payments. Thus, we believe this provision was intended to expedite data collection through the assignment of new ICD-9-CM codes for new technologies seeking higher payments. Current addendum and code title information is published on the CMS Web site at: 
                        *www.cms.hhs.gov/​icd9ProviderDiagnosticCodes/​01_​overview.asp#TopofPage.*
                         Information on ICD-9-CM diagnosis codes, along with the Official ICD-9-CM Coding Guidelines, can be found on the Web site at: 
                        *www.cdc.gov/​nchs/​icd9.htm.*
                         Information on new, revised, and deleted ICD-9-CM codes is also provided to the AHA for publication in the 
                        *Coding Clinic for ICD-9-CM.*
                         AHA also distributes information to publishers and software vendors. CMS also sends copies of all ICD-9-CM coding changes to its contractors for use in updating their systems and providing education to providers. These same means of disseminating information on new, revised, and deleted ICD-9-CM codes will be used to notify providers, publishers, software vendors, contractors, and others of any changes to the ICD-9-CM codes that are implemented in April. The code titles are adopted as part of the ICD-9-CM Coordination and Maintenance Committee process. Thus, although we publish the code titles in the IPPS proposed and final rules, they are not subject to comment in the proposed or final rules. We will continue to publish the October code updates in this manner within the IPPS proposed and final rules. For codes that are implemented in April, we will assign the new procedure code to the same DRG in which its predecessor code was assigned so there will be no DRG impact as far as DRG assignment. Any midyear coding updates will be available through the Web sites indicated above and through 
                        *the Coding Clinic for ICD-9-CM.*
                         Publishers and software vendors currently obtain code changes through these sources in order to update their code books and software systems. We will strive to have the April 1 updates available through these Web sites 5 months prior to implementation (that is, early November of the previous year), as is the case for the October 1 updates. *H. Recalibration of MS-DRG Weights* In section II.E. of the preamble of this proposed rule, we state that we are proposing to fully implement the cost-based DRG relative weights for FY 2009, which is the third year in the 3-year transition period to calculate the relative weights at 100 percent based on costs. In the FY 2008 IPPS final rule with comment period (72 FR 47267), as recommended by RTI, for FY 2008, we added two new CCRs for a total of 15 CCRs: one for “Emergency Room” and one for “Blood and Blood Products,” both of which can be derived directly from the Medicare cost report. In developing the FY 2009 proposed system of weights, we used two data sources: claims data and cost report data. As in previous years, the claims data source is the MedPAR file. This file is based on fully coded diagnostic and procedure data for all Medicare inpatient hospital bills. The FY 2007 MedPAR data used in this proposed rule include discharges occurring on October 1, 2006, through September 30, 2007, based on bills received by CMS through December 2007, from all hospitals subject to the IPPS and short-term, acute care hospitals in Maryland (which are under a waiver from the IPPS under section 1814(b)(3) of the Act). The FY 2007 MedPAR file used in calculating the relative weights includes data for approximately 11,433,806 Medicare discharges from IPPS providers. Discharges for Medicare beneficiaries enrolled in a Medicare Advantage managed care plan are excluded from this analysis. The data exclude CAHs, including hospitals that subsequently became CAHs after the period from which the data were taken. The second data source used in the cost-based relative weighting methodology is the FY 2006 Medicare cost report data files from HCRIS (that is, cost reports beginning on or after October 1, 2005, and before October 1, 2006), which represents the most recent full set of cost report data available. We used the 
                        ( print page 23582)
                        December 31, 2007 update of the HCRIS cost report files for FY 2006 in setting the relative cost-based weights. The methodology we used to calculate the DRG cost-based relative weights from the FY 2007 MedPAR claims data and FY 2006 Medicare cost report data is as follows: To the extent possible, all the claims were regrouped using the proposed FY 2009 MS-DRG classifications discussed in sections II.B. and G. of the preamble of this proposed rule.
                    The transplant cases that were used to establish the relative weights for heart and heart-lung, liver and/or intestinal, and lung transplants (MS-DRGs 001, 002, 005, 006, and 007, respectively) were limited to those Medicare-approved transplant centers that have cases in the FY 2007 MedPAR file. (Medicare coverage for heart, heart-lung, liver and/or intestinal, and lung transplants is limited to those facilities that have received approval from CMS as transplant centers.)
                    Organ acquisition costs for kidney, heart, heart-lung, liver, lung, pancreas, and intestinal (or multivisceral organs) transplants continue to be paid on a reasonable cost basis. Because these acquisition costs are paid separately from the prospective payment rate, it is necessary to subtract the acquisition charges from the total charges on each transplant bill that showed acquisition charges before computing the average cost for each DRG and before eliminating statistical outliers.
                    Claims with total charges or total length of stay less than or equal to zero were deleted. Claims that had an amount in the total charge field that differed by more than $10.00 from the sum of the routine day charges, intensive care charges, pharmacy charges, special equipment charges, therapy services charges, operating room charges, cardiology charges, laboratory charges, radiology charges, other service charges, labor and delivery charges, inhalation therapy charges, emergency room charges, blood charges, and anesthesia charges were also deleted.
                    At least 96.1 percent of the providers in the MedPAR file had charges for 10 of the 15 cost centers. Claims for providers that did not have charges greater than zero for at least 10 of the 15 cost centers were deleted.
                    Statistical outliers were eliminated by removing all cases that were beyond 3.0 standard deviations from the mean of the log distribution of both the total charges per case and the total charges per day for each DRG. Once the MedPAR data were trimmed and the statistical outliers were removed, the charges for each of the 15 cost groups for each claim were standardized to remove the effects of differences in area wage levels, IME and DSH payments, and for hospitals in Alaska and Hawaii, the applicable cost-of-living adjustment. Because hospital charges include charges for both operating and capital costs, we standardized total charges to remove the effects of differences in geographic adjustment factors, cost-of-living adjustments, DSH payments, and IME adjustments under the capital IPPS as well. Charges were then summed by DRG for each of the 15 cost groups so that each DRG had 15 standardized charge totals. These charges were then adjusted to cost by applying the national average CCRs developed from the FY 2006 cost report data. The 15 cost centers that we used in the relative weight calculation are shown in the following table. The table shows the lines on the cost report and the corresponding revenue codes that we used to create the 15 national cost center CCRs. 
 
  
 
  
 
  
 
  
 
  
 
  We developed the national average CCRs as follows: Taking the FY 2006 cost report data, we removed CAHs, Indian Health Service hospitals, all-inclusive rate hospitals, and cost reports that represented time periods of less than 1 year (365 days). We included hospitals located in Maryland as we are including their charges in our claims database. We then created CCRs for each provider for each cost center (see prior table for line items used in the calculations) and removed any CCRs that were greater than 10 or less than 0.01. We normalized the departmental CCRs by dividing the CCR for each department by the total CCR for the hospital for the purpose of trimming the data. We then took the logs of the normalized cost center CCRs and removed any cost 
                        ( print page 23589)
                        center CCRs where the log of the cost center CCR was greater or less than the mean log plus/minus 3 times the standard deviation for the log of that cost center CCR. Once the cost report data were trimmed, we calculated a Medicare-specific CCR. The Medicare-specific CCR was determined by taking the Medicare charges for each line item from Worksheet D-4 and deriving the Medicare-specific costs by applying the hospital-specific departmental CCRs to the Medicare-specific charges for each line item from Worksheet D-4. Once each hospital's Medicare-specific costs were established, we summed the total Medicare-specific costs and divided by the sum of the total Medicare-specific charges to produce national average, charge-weighted CCRs. After we multiplied the total charges for each DRG in each of the 15 cost centers by the corresponding national average CCR, we summed the 15 “costs” across each DRG to produce a total standardized cost for the DRG. The average standardized cost for each DRG was then computed as the total standardized cost for the DRG divided by the transfer-adjusted case count for the DRG. The average cost for each DRG was then divided by the national average standardized cost per case to determine the relative weight. The new cost-based relative weights were then normalized by an adjustment factor of 1.50612 so that the average case weight after recalibration was equal to the average case weight before recalibration. The normalization adjustment is intended to ensure that recalibration by itself neither increases nor decreases total payments under the IPPS, as required by section 1886(d)(4)(C)(iii) of the Act. The 15 proposed national average CCRs for FY 2009 are as follows: Group
CCRRoutine Days
0.527Intensive Days
0.476Drugs
0.205Supplies & Equipment
0.341Therapy Services
0.419Laboratory
0.166Operating Room
0.293Cardiology
0.186Radiology
0.171Emergency Room
0.291Blood and Blood Products
0.449Other Services
0.419Labor & Delivery
0.482Inhalation Therapy
0.198Anesthesia
0.150
 As we explained in section II.E. of the preamble of this proposed rule, we are proposing to complete our 2-year transition to the MS-DRGs. For FY 2008, the first year of the transition, 50 percent of the relative weight for an MS-DRG was based on the two-thirds cost-based weight/one-third charge-based weight calculated using FY 2006 MedPAR data grouped to the Version 24.0 (FY 2007) DRGs. The remaining 50 percent of the FY 2008 relative weight for an MS-DRG was based on the two-thirds cost-based weight/one-third charge-based weight calculated using FY 2006 MedPAR grouped to the Version 25.0 (FY 2008) MS-DRGs. In FY 2009, we are proposing that the relative weights will be based on 100 percent cost weights computed using the Version 26.0 (FY 2009) MS-DRGs. When we recalibrated the DRG weights for previous years, we set a threshold of 10 cases as the minimum number of cases required to compute a reasonable weight. We are proposing to use that same case threshold in recalibrating the MS-DRG weights for FY 2009. Using the FY 2007 MedPAR data set, there are 8 MS-DRGs that contain fewer than 10 cases. Under the MS-DRGs, we have fewer low-volume DRGs than under the CMS DRGs because we no longer have separate DRGs for patients age 0 to 17 years. With the exception of newborns, we previously separated some DRGs based on whether the patient was age 0 to 17 years or age 17 years and older. Other than the age split, cases grouping to these DRGs are identical. The DRGs for patients age 0 to 17 years generally have very low volumes because children are typically ineligible for Medicare. In the past, we have found that the low volume of cases for the pediatric DRGs could lead to significant year-to-year instability in their relative weights. Although we have always encouraged non-Medicare payers to develop weights applicable to their own patient populations, we have heard frequent complaints from providers about the use of the Medicare relative weights in the pediatric population. We believe that eliminating this age split in the MS-DRGs will provide more stable payment for pediatric cases by determining their payment using adult cases that are much higher in total volume. All of the low-volume MS-DRGs listed below are for newborns. Newborns are unique and require separate DRGs that are not mirrored in the adult population. Therefore, it remains necessary to retain separate DRGs for newborns. In FY 2009, because we do not have sufficient MedPAR data to set accurate and stable cost weights for these low-volume MS-DRGs,  we are proposing to compute weights for the low-volume MS-DRGs by  adjusting their FY 2008 weights by the percentage change in the average weight of the cases in other MS-DRGs. The crosswalk table is shown below: Low-volume MS-DRG
MS-DRG title
Crosswalk to MS-DRG768
Vaginal Delivery with O.R. Procedure Except Sterilization and/or D&C
FY 2008 FR weight (adjusted by percent change in average weight of the cases in other MS-DRGs).789
Neonates, Died or Transferred to Another Acute Care Facility
FY 2008 FR weight (adjusted by percent change in average weight of the cases in other MS-DRGs).790
Extreme Immaturity or Respiratory Distress Syndrome, Neonate
FY 2008 FR weight (adjusted by percent change in average weight of the cases in other MS-DRGs).791
Prematurity with Major Problems
FY 2008 FR weight (adjusted by percent change in average weight of the cases in other MS-DRGs).792
Prematurity without Major Problems
FY 2008 FR weight (adjusted by percent change in average weight of the cases in other MS-DRGs).793
Full-Term Neonate with Major Problems
FY 2008 FR weight (adjusted by percent change in average weight of the cases in other MS-DRGs).794
Neonate with Other Significant Problems
FY 2008 FR weight (adjusted by percent change in average weight of the cases in other MS-DRGs).795
Normal Newborn
FY 2008 FR weight (adjusted by percent change in average weight of the cases in other MS-DRGs).
 
 
 *I. Proposed Medicare Severity Long-Term Care (MS-LTC-DRG) Reclassifications and Relative Weights for LTCHs for FY 2009* 1. Background Section 123 of the BBRA requires that the Secretary implement a PPS for LTCHs (that is, a per discharge system with a diagnosis-related group (DRG)-based patient classification system reflecting the differences in patient resources and costs). Section 307(b)(1) of the BIPA modified the requirements of section 123 of the BBRA by requiring that the Secretary examine “the feasibility and the impact of basing payment under such a system [the long-term care hospital (LTCH) PPS] on the use of existing (or refined) hospital DRGs that have been modified to account for different resource use of LTCH patients, as well as the use of the most recently available hospital discharge data.” When the LTCH PPS was implemented for cost reporting periods beginning on or after October 1, 2002, we adopted the same DRG patient classification system (that is, the CMS DRGs) that was utilized at that time under the IPPS. As a component of the LTCH PPS, we refer to the patient classification system as the “long-term care diagnosis-related groups (LTC-DRGs).” As discussed in greater detail below, although the patient classification system used under both the LTCH PPS and the IPPS are the same, the relative weights are different. The established relative weight methodology and data used under the LTCH PPS result in LTC-DRG relative weights that reflect “the differences in patient resource use * * *” of LTCH patients (section 123(a)(1) of the BBRA (Pub. L. 106-113). As part of our efforts to better recognize severity of illness among patients, in the FY 2008 IPPS final rule with comment period (72 FR 47130), the MS-DRGs and the Medicare severity long-term care diagnosis related groups (MS-LTC-DRGs) were adopted for the IPPS and the LTCH PPS, respectively, effective October 1, 2007 (FY 2008). For a full description of the development and implementation of the MS-DRGs and MS-LTC-DRGs, we refer readers to the FY 2008 IPPS final rule with comment period (72 FR 47141 through 47175 and 47277 through 47299). (We note that, in that same final rule, we revised the regulations at § 412.503 to specify that for LTCH discharges occurring on or after October 1, 2007, when applying the provisions of 42 CFR Part 412, Subpart O applicable to LTCHs for policy descriptions and payment calculations, all references to LTC-DRGs would be considered a reference to MS-LTC-DRGs. For the remainder of this section, we present the discussion in terms of the current MS-LTC-DRG patient classification unless specifically referring to the previous LTC-DRG patient classification system (that was in effect before October 1, 2007).) We believe the MS-DRGs (and by extension, the MS-LTC-DRGs) represent a substantial improvement over the previous CMS DRGs in their ability to differentiate cases based on severity of illness and resource consumption. The MS-DRGs represent an increase in the number of DRGs by 207 (that is, from 538 to 745) (72 FR 47171). In addition to improving the DRG system's recognition of severity of illness, we believe the MS-DRGs are responsive to the public comments that were made on the FY 2007 IPPS proposed rule with respect to how we should undertake further DRG reform. The MS-DRGs use the CMS DRGs as the starting point for revising the DRG system to better recognize resource complexity and severity of illness. We have generally retained all of the refinements and improvements that have been made to the base DRGs over the years that recognize the significant advancements in medical technology and changes to medical practice. Consistent with section 123 of the BBRA as amended by section 307(b)(1) of the BIPA and § 412.515, we use information derived from LTCH PPS patient records to classify LTCH discharges into distinct MS-LTC-DRGs based on clinical characteristics and estimated resource needs. We then assign an appropriate weight to the MS-LTC-DRGs to account for the difference in resource use by patients exhibiting the case complexity and multiple medical problems characteristic of LTCHs. Generally, under the LTCH PPS, a Medicare payment is made at a predetermined specific rate for each discharge; and that payment varies by the MS-LTC-DRG to which a beneficiary's stay is assigned. Cases are classified into MS-LTC-DRGs for payment based on the following six data elements: Principal diagnosis.
                    Up to eight additional diagnoses.
                    Up to six procedures performed.
                    Age.
                    Sex.
                    Discharge status of the patient. Upon the discharge of the patient from a LTCH, the LTCH must assign appropriate diagnosis and procedure codes from the most current version of the International Classification of Diseases, Ninth Revision, Clinical Modification (ICD-9-CM). HIPAA Transactions and Code Sets Standards regulations at 45 CFR Parts 160 and 162 require that no later than October 16, 2003, all covered entities must comply with the applicable requirements of Subparts A and I through R of Part 162. Among other requirements, those provisions direct covered entities to use the ASC X12N 837 Health Care Claim: Institutional, Volumes 1 and 2, Version 4010, and the applicable standard medical data code sets for the institutional health care claim or equivalent encounter information transaction (see 45 CFR 162.1002 and 45 CFR 162.1102). For additional information on the ICD-9-CM Coding System, we refer readers to the FY 2008 IPPS final rule with comment period (72 FR 47241 through 47243 and 47277 through 47281). We also refer readers to the detailed discussion on correct coding practices in the August 30, 2002 LTCH PPS final rule (67 FR 55981 through 55983). Additional coding instructions and examples are published in the 
                        *Coding Clinic for ICD-9-CM*, a product of the American Hospital Association. Medicare contractors (that is, fiscal intermediaries or MACs) enter the clinical and demographic information into their claims processing systems and subject this information to a series of automated screening processes called the Medicare Code Editor (MCE). These screens are designed to identify cases that require further review before assignment into a MS-LTC-DRG can be made. During this process, the following types of cases are selected for further development: Cases that are improperly coded. (For example, diagnoses are shown that are inappropriate, given the sex of the patient. Code 68.69 (Other and unspecified radical abdominal hysterectomy) would be an inappropriate code for a male.)
                    Cases including surgical procedures not covered under Medicare. (For example, organ transplant in a nonapproved transplant center.)
                    Cases requiring more information. (For example, ICD-9-CM codes are required to be entered at their highest level of specificity. There are valid 3-digit, 4-digit, and 5-digit codes. That is, code 262 (Other severe protein-calorie malnutrition) contains all appropriate digits, but if it is reported with either fewer or more than 3 digits, the claim will be rejected by the MCE as invalid.) After screening through the MCE, each claim is classified into the appropriate MS-LTC-DRG by the Medicare LTCH GROUPER software. 
                        ( print page 23591)
                        The Medicare GROUPER software, which is used under the LTCH PPS, is specialized computer software, and is the same GROUPER software program used under the IPPS. The GROUPER software was developed as a means of classifying each case into a MS-LTC-DRG on the basis of diagnosis and procedure codes and other demographic information (age, sex, and discharge status). Following the MS-LTC-DRG assignment, the Medicare contractor determines the prospective payment amount by using the Medicare PRICER program, which accounts for hospital-specific adjustments. Under the LTCH PPS, we provide an opportunity for the LTCH to review the MS-LTC-DRG assignments made by the Medicare contractor and to submit additional information within a specified timeframe as specified in § 412.513(c). The GROUPER software is used both to classify past cases to measure relative hospital resource consumption to establish the DRG weights and to classify current cases for purposes of determining payment. The records for all Medicare hospital inpatient discharges are maintained in the MedPAR file. The data in this file are used to evaluate possible MS-DRG classification changes and to recalibrate the MS-DRG and MS-LTC-DRG relative weights during our annual update under both the IPPS (§ 412.60(e)) and the LTCH PPS (§ 412.517), respectively. In the June 6, 2003 LTCH PPS final rule (68 FR 34122), we changed the LTCH PPS annual payment rate update cycle to be effective July 1 through June 30 instead of October 1 through September 30. In addition, because the patient classification system utilized under the LTCH PPS uses the same DRGs as those used under the IPPS for acute care hospitals, in that same final rule, we explained that the annual update of the LTC-DRG classifications and relative weights will continue to remain linked to the annual reclassification and recalibration of the DRGs used under the IPPS. Therefore, we specified that we will continue to update the LTC-DRG classifications and relative weights to be effective for discharges occurring on or after October 1 through September 30 each year. We further stated that we will publish the annual proposed and final update of the LTC-DRGs in same notice as the proposed and final update for the IPPS (69 FR 34125). In the RY 2009 LTCH PPS proposed rule (73 FR 5351-5352), due to administrative considerations as well as in response to numerous comments urging CMS to establish one rulemaking cycle that would encompass the update of the LTCH PPS payment rates (currently updated on a rate year basis, effective July 1) as well as the development of the LTC-DRG weights (currently updated on a fiscal year basis, effective October 1), we proposed to amend the regulations at § 412.535 in order to consolidate the rate year and fiscal year rulemaking cycles. Specifically, we proposed that the annual update of the LTCH PPS payment rates (and description of the methodology and data used to calculate these payment rates) and the annual update of the MS-LTC-DRG classifications and associated weighting factors for LTCHs would be effective on October 1 each Federal fiscal year. In order to revise the payment rate update (currently on a rate year cycle of July 1 through June 30) to an October 1 through September 30 cycle, we proposed to extend the 2009 rate period to September 30, 2009, so that RY 2009 would be 15 months. This proposed 15-month rate period would extend from July 1, 2008, through September 30, 2009. We believe that extending RY 2009 by 3 months (July, August, and September) would provide for a smooth transition to a consolidated annual update for both the LTCH PPS payment rates and the LTCH PPS MS-LTC-DRG classifications and weighting factors. (We believe that proposing to shorten the 2009 rate year period to an October 1 through September 30 period so that RY 2009 would only be 3 months (that is, July 1, 2008 through September 30, 2008) would exacerbate the current time-consuming, biannual update process by resulting in two payment rate changes within a very short period of time.) Consequently, under the proposal to extend RY 2009 to a 15-month rate period, after September 30, 2009, when the RY 2009 cycle ends, the LTCH PPS payment rates and other policy changes would subsequently be updated on an October 1 through September 30 cycle in conjunction with the annual update to the MS-LTC-DRG classifications and relative weights. Accordingly, the next update to the LTCH PPS payment rates, after the proposed 15-month RY 2009, would begin October 1, 2009, coinciding with the 2010 Federal fiscal year. In the past, the annual update to the DRGs used under the IPPS has been based on the annual revisions to the ICD-9-CM codes and was effective each October 1. As discussed in the RY 2009 LTCH PPS proposed rule (73 FR 5348-5349), with the implementation of section 503(a) of Pub. L. 108-173, there is the possibility that one feature of the GROUPER software program may be updated twice during a Federal fiscal year (October 1 and April 1) as required by the statute for the IPPS. Section 503(a) of Pub. L. 108-173 amended section 1886(d)(5)(K) of the Act by adding a new clause (vii) which states that “the Secretary shall provide for the addition of new diagnosis and procedure codes in [sic] April 1 of each year, but the addition of such codes shall not require the Secretary to adjust the payment (or diagnosis-related group classification) * * * until the fiscal year that begins after such date.” This requirement improves the recognition of new technologies under the IPPS by accounting for those ICD-9-CM codes in the MedPAR claims data earlier than the agency had accounted for new technology in the past. In implementing the statutory change, the agency has provided that ICD-9-CM diagnosis and procedure codes for new medical technology may be created and assigned to existing DRGs in the middle of the Federal fiscal year, on April 1. However, this policy change will not impact the DRG relative weights in effect for that year, which will continue to be updated only once a year (October 1). The use of the ICD-9-CM code set is also compliant with the current requirements of the Transactions and Code Sets Standards regulations at 45 CFR Parts 160 and 162, promulgated in accordance with HIPAA. As noted above, the patient classification system used under the LTCH PPS is the same patient classification system that is used under the IPPS. Therefore, the ICD-9-CM codes currently used under both the IPPS and the LTCH PPS have the potential of being updated twice a year. This requirement is included as part of the amendments to the Act relating to recognition of new medical technology under the IPPS. Because we do not publish a midyear IPPS rule, any April 1 ICD-9-CM coding update will not be published in the 
                        **Federal Register**
                        . Rather, we will assign any new diagnosis or procedure codes to the same DRG in which its predecessor code was assigned, so that there will be no impact on the DRG assignments (as also discussed in section II.G.11. of the preamble of this proposed rule). Any coding updates will be available through the Web sites provided in section II.G.11. of the preamble of this proposed rule and through the 
                        *Coding Clinic for ICD-9-CM*. Publishers and software vendors currently obtain code changes through these sources in order to update their code books and software system.  If new codes are implemented on April 1, revised code books and software systems, including the GROUPER 
                        ( print page 23592)
                        software program, will be necessary because the most current ICD-9-CM codes must be reported. Therefore, for purposes of the LTCH PPS, because each ICD-9-CM code must be included in the GROUPER algorithm to classify each case under the correct LTCH PPS, the GROUPER software program used under the LTCH PPS would need to be revised to accommodate any new codes. In implementing section 503(a) of Pub. L. 108-173, there will only be an April 1 update if new technology diagnosis and procedure code revisions are requested and approved. We note that any new codes created for April 1 implementation will be limited to those primarily needed to describe new technologies and medical services. However, we reiterate that the process of discussing updates to the ICD-9-CM is an open process through the ICD-9-CM Coordination and Maintenance Committee. Requestors will be given the opportunity to present the merits for a new code and to make a clear and convincing case for the need to update ICD-9-CM codes for purposes of the IPPS new technology add-on payment process through an April 1 update (as also discussed in section II.G.11. of the preamble of this proposed rule). At the September 27, 2007 ICD-9-CM Coordination and Maintenance Committee meeting, there were no requests for an April 1, 2008 implementation of ICD-9-CM codes. Therefore, the next update to the ICD-9-CM coding system will occur on October 1, 2008 (FY 2009). Because there were no coding changes suggested for an April 1, 2008 update, the ICD-9-CM coding set implemented on October 1, 2008, will continue through September 30, 2009 (FY 2009). The update to the ICD-9-CM coding system for FY 2009 is discussed in section II.G.11. of the preamble of this proposed rule. Accordingly, in this proposed rule, as discussed in greater detail below, we are proposing to modify and revise the MS-LTC-DRG classifications and relative weights to be effective October 1, 2008 through September 30, 2009 (FY 2009). As discussed in greater detail below, the MS-LTC-DRGs for FY 2009 in this proposed rule are the same as the MS-DRGs proposed for the IPPS for FY 2009 (GROUPER Version 26.0) discussed in section II.B. of the preamble to this proposed rule. 2. Proposed Changes in the MS-LTC-DRG Classifications a. Background As discussed earlier, section 123 of Pub. L. 106-113 specifically requires that the agency implement a PPS for LTCHs that is a per discharge system with a DRG-based patient classification system reflecting the differences in patient resources and costs in LTCHs. Section 307(b)(1) of Pub. L. 106-554 modified the requirements of section 123 of Pub. L. 106-113 by specifically requiring that the Secretary examine “the feasibility and the impact of basing payment under such a system [the LTCH PPS] on the use of existing (or refined) hospital diagnosis-related groups (DRGs) that have been modified to account for different resource use of long-term care hospital patients as well as the use of the most recently available hospital discharge data.” Consistent with section 123 of Pub. L. 106-113 as amended by section 307(b)(1) of Pub. L. 106-554 and § 412.515 of our existing regulations, the LTCH PPS uses information from LTCH patient records to classify patient cases into distinct LTC-DRGs based on clinical characteristics and expected resource needs. As described in section II.D. of the preamble of this proposed rule, for FY 2008, we adopted MS-DRGs under the IPPS because we believe that this system results in a significant improvement in the DRG system's recognition of severity of illness and resource usage. We stated that we believe these improvements in the DRG system are equally applicable to the LTCH PPS. The changes we are proposing to make for the FY 2009 IPPS are reflected in the proposed FY 2009 GROUPER, Version 26.0, that would be effective for discharges occurring on or after October 1, 2008 through September 30, 2009. Consistent with our historical practice of having LTC-DRGs correspond to the DRGs applicable under the IPPS, under the broad authority of section 123(a) of Pub. L. 106-113, as modified by section 307(b) of Pub. L. 106-554, under the LTCH PPS for FY 2008, we adopted the use of MS-LTC-DRGs, which correspond to the MS-DRGs we adopted under the IPPS. In addition, as stated above, we are proposing to use the FY 2009 GROUPER Version 26.0 to classify cases effective for LTCH discharges occurring on or after October 1, 2008, through September 30, 2009. The changes to the MS-DRG classification system that we are proposing to use under the IPPS for FY 2009 (GROUPER Version 26.0) are discussed in section II.B. of the preamble to this proposed rule. Under the LTCH PPS, as described in greater detail below, we determine relative weights for each of the MS-LTC-DRGs to account for the difference in resource use by patients exhibiting the case complexity and multiple medical problems characteristic of LTCH patients. (Unless otherwise noted in this proposed rule, our MS-LTC-DRG analysis is based on LTCH data from the December 2007 update of the FY 2007 MedPAR file, which contains hospital bills received through December 31, 2007, for discharges occurring in FY 2007.) LTCHs do not typically treat the full range of diagnoses as do acute care hospitals. Therefore, as we discussed in the August 30, 2002 LTCH PPS final rule (67 FR 55985), which implemented the LTCH PPS, and the FY 2008 IPPS final rule with comment period (72 FR 47283), we use low-volume quintiles in determining the DRG relative weights for DRGs with less than 25 LTCH cases (low-volume MS-LTC-DRGs). Specifically, we group those low-volume DRGs into 5 quintiles based on average charges per discharge. (A listing of the composition of low-volume quintiles for the FY 2008 MS-LTC-DRGs (based on FY 2006 MedPAR data) appears in section II.I.3. of the FY 2008 IPPS final rule with comment period (72 FR 47281 through 47288).) We also adjust for cases in which the stay at the LTCH is less than or equal to five-sixths of the geometric average length of stay; that is, short-stay outlier cases, as discussed below in section II.I.4. of the preamble of this proposed rule. b. Patient Classifications Into MS-LTC-DRGs Generally, under the LTCH PPS, Medicare payment is made at a predetermined specific rate for each discharge; that is, payment varies by the DRG to which a beneficiary's stay is assigned. Just as cases have been classified into the MS-DRGs for acute care hospitals under the IPPS (section II.B. of the preamble of this proposed rule), cases have been classified into MS-LTC-DRGs for payment under the LTCH PPS based on the principal diagnosis, up to eight additional diagnoses, and up to six procedures performed during the stay, as well as demographic information about the patient. The diagnosis and procedure information is reported by the hospital using the ICD-9-CM coding system. Under the MS-DRGs for the IPPS and the MS-LTC-DRGs for the LTCH PPS, these factors will not change. Section II.B. of the preamble of this proposed rule discusses the organization of the existing MS-DRGs, which we are maintaining under the MS-LTC-DRG system. As noted above, the patient classification system for the LTCH PPS is derived from the IPPS DRGs and is similarly organized into 25 major diagnostic categories (MDCs). 
                        ( print page 23593)
                        Most of these MDCs are based on a particular organ system of the body and the remainder involves multiple organ systems (such as MDC 22, Burns). Accordingly, the principal diagnosis determines MDC assignment. Within most MDCs, cases are then divided into surgical DRGs and medical DRGs. Under the MS-DRGs, some surgical and medical DRGs are further defined for severity purposes based on the presence or absence of MCCs or CCs. The existing MS-LTC-DRGs are similarly categorized. (We refer readers to section II.B. of the preamble of this proposed rule for further discussion of surgical DRGs and medical DRGs.) Therefore, consistent with the MS-DRGs, a base MS-LTC-DRG may be subdivided according to three alternatives. The first alternative includes division of the DRG into one, two, or three severity levels. The most severe level has cases with at least one code that is a major CC, referred to as “with MCC”. The next lower severity level contains cases with at least one CC, referred to as “with CC”. Those DRGs without an MCC or a CC are referred to as “without CC/MCC”. When data do not support the creation of three severity levels, the base DRG is divided into either two levels or the base is not subdivided. The two-level subdivisions consist of one of the following subdivisions: “with CC/MCC” or “without CC/MCC.” In this type of subdivision, cases with at least one code that is on the CC or MCC list are assigned to the “ CC/MCC” DRG. Cases without a CC or an MCC are assigned to the “without CC/MCC” DRG. The other type of two-level subdivision is as follows: “with MCC” and “without MCC.” In this type of subdivision, cases with at least one code that is on the MCC list are assigned to the “with MCC” DRG. Cases that do not have an MCC are assigned to the “without MCC”  DRG. This type of subdivision could include cases with a CC code, but no MCC. 3. Development of the Proposed FY 2009 MS-LTC-DRG Relative Weights a. General Overview of Development of the MS-LTC-DRG Relative Weights As we stated in the August 30, 2002 LTCH PPS final rule (67 FR 55981), one of the primary goals for the implementation of the LTCH PPS is to pay each LTCH an appropriate amount for the efficient delivery of medical care to Medicare patients. The system must be able to account adequately for each LTCH's case-mix in order to ensure both fair distribution of Medicare payments and access to adequate care for those Medicare patients whose care is more costly. To accomplish these goals, we have annually adjusted the LTCH PPS standard Federal prospective payment system rate by the applicable relative weight in determining payment to LTCHs for each case. (As we have noted above, in last year's final rule, we adopted the MS-LTC-DRGs for the LTCH PPS beginning in FY 2008. However, this change in the patient classification system does not affect the basic principles of the development of relative weights under a DRG-based prospective payment system. Although the adoption of the MS-LTC-DRGs resulted in some modifications of existing procedures for assigning weights in cases of zero volume and/or nonmonotonicity, as discussed in the FY 2008 IPPS final rule with comment period (72 FR 47289 through 47295) and discussed in detail in the following sections, the basic methodology for developing the proposed FY 2009 MS-LTC-DRG relative weights in this proposed rule continue to be determined in accordance with the general methodology established in the August 30, 2002 LTCH PPS final rule (67 FR 55989 through 55991). Under the LTCH PPS, relative weights for each MS-LTC-DRG are a primary element used to account for the variations in cost per discharge and resource utilization among the payment groups (§ 412.515). To ensure that Medicare patients classified to each MS-LTC-DRG have access to an appropriate level of services and to encourage efficiency, we calculate a relative weight for each MS-LTC-DRG that represents the resources needed by an average inpatient LTCH case in that MS-LTC-DRG. For example, cases in an MS-LTC-DRG with a relative weight of 2 will, on average, cost twice as much to treat as cases in an MS-LTC-DRG with a weight of 1. b. Data To calculate the proposed MS-LTC-DRG relative weights for FY 2009, we obtained total Medicare allowable charges from FY 2007 Medicare LTCH bill data from the December 2007 update of the MedPAR file, which are the best available data at this time, and we used the proposed Version 26.0 of the CMS GROUPER that is also proposed for use under the IPPS to classify cases for FY 2009. We also are proposing that if more recent data are available, we will use those data and the finalized Version 26.0 of the CMS GROUPER in establishing the FY 2009 MS-LTC-DRG relative weights in the final rule. Consistent with our historical methodology, we have excluded the data from LTCHs that are all-inclusive rate providers and LTCHs that are reimbursed in accordance with demonstration projects authorized under section 402(a) of Pub. L. 90-248 or section 222(a) of Pub. L. 92-603 (We refer readers to the FY 2008 IPPS final rule with comment period (72 FR 47282)). Therefore, in the development of the proposed FY 2009 MS-LTC-DRG relative weights in this proposed rule, we have excluded the data of the 17 all-inclusive rate providers and the 2 LTCHs that are paid in accordance with demonstration projects that had claims in the FY 2007 MedPAR file. c. Hospital-Specific Relative Value (HSRV) Methodology By nature, LTCHs often specialize in certain areas, such as ventilator-dependent patients and rehabilitation and wound care. Some case types (DRGs) may be treated, to a large extent, in hospitals that have, from a perspective of charges, relatively high (or low) charges. This nonarbitrary distribution of cases with relatively high (or low) charges in specific MS-LTC-DRGs has the potential to inappropriately distort the measure of average charges. To account for the fact that cases may not be randomly distributed across LTCHs, we are proposing to use a hospital-specific relative value (HSRV) methodology to calculate the MS-LTC-DRG relative weights instead of the methodology used to determine the MS-DRG relative weights under the IPPS described in section II.H. of the preamble of this proposed rule. We believe this method will remove this hospital-specific source of bias in measuring LTCH average charges. Specifically, we are proposing to reduce the impact of the variation in charges across providers on any particular MS-LTC-DRG relative weight by converting each LTCH's charge for a case to a relative value based on that LTCH's average charge. Under the HSRV methodology, we standardize charges for each LTCH by converting its charges for each case to hospital-specific relative charge values and then adjusting those values for the LTCH's case-mix. The adjustment for case-mix is needed to rescale the hospital-specific relative charge values (which, by definition, average 1.0 for each LTCH). The average relative weight for a LTCH is its case-mix, so it is reasonable to scale each LTCH's average relative charge value by its case-mix. In this way, each LTCH's relative charge 
                        ( print page 23594)
                        value is adjusted by its case-mix to an average that reflects the complexity of the cases it treats relative to the complexity of the cases treated by all other LTCHs (the average case-mix of all LTCHs). In accordance with the methodology established in the August 30, 2002 LTCH PPS final rule (67 FR 55989 through 55991), we continue to standardize charges for each case by first dividing the adjusted charge for the case (adjusted for short-stay outliers under § 412.529 as described in section II.I.4. (step 3) of the preamble of this proposed rule) by the average adjusted charge for all cases at the LTCH in which the case was treated. Short-stay outliers are cases with a length of stay that is less than or equal to five-sixths the average length of stay of the MS-LTC-DRG (§ 412.529 and § 412.503). The average adjusted charge reflects the average intensity of the health care services delivered by a particular LTCH and the average cost level of that LTCH. The resulting ratio is multiplied by that LTCH's case-mix index to determine the standardized charge for the case. Multiplying by the LTCH's case-mix index accounts for the fact that the same relative charges are given greater weight at a LTCH with higher average costs than they would at a LTCH with low average costs, which is needed to adjust each LTCH's relative charge value to reflect its case-mix relative to the average case-mix for all LTCHs. Because we standardize charges in this manner, we count charges for a Medicare patient at a LTCH with high average charges as less resource intensive than they would be at a LTCH with low average charges. For example, a $10,000 charge for a case at a LTCH with an average adjusted charge of $17,500 reflects a higher level of relative resource use than a $10,000 charge for a case at a LTCH with the same case-mix, but an average adjusted charge of $35,000. We believe that the adjusted charge of an individual case more accurately reflects actual resource use for an individual LTCH because the variation in charges due to systematic differences in the markup of charges among LTCHs is taken into account. d. Treatment of Severity Levels in Developing Proposed Relative Weights Under the proposed MS-LTC-DRGs, for purposes of the proposed setting of the relative weights, there would be three different categories of DRGs based on volume of cases within specific MS-LTC-DRGs. MS-LTC-DRGs with at least 25 cases are each assigned a unique relative weight; low-volume MS-LTC-DRGs (that is, MS-LTC-DRGs that contain between one and 24 cases annually) are grouped into quintiles (described below) and assigned the weight of the quintile. No-volume MS-LTC-DRGs (that is, no cases in the database were assigned to those MS-LTC-DRGs) are crosswalked to other MS-LTC-DRGs based on the clinical similarities and assigned the relative weight of the crosswalked MS-LTC-DRG. (We provide in-depth discussions of our proposed policy regarding weight setting for low-volume MS-LTC-DRGs in section II.I.3.e. of the preamble of this proposed rule and for no-volume MS-LTC-DRGs, under Step 5 in section II.I.4. of the preamble of this proposed rule.) As described above, in response to the need to account for severity and pay appropriately for cases, we developed a severity-adjusted patient classification system which we adopted for both the IPPS and the LTCH PPS in FY 2008. As described in greater detail above, the MS-LTC-DRG system can accommodate three severity levels: “with MCC” (most severe); “with CC,” and “without CC/MCC” (the least severe) with each level assigned an individual MS-LTC-DRG number. In cases with two subdivisions, the levels are either “with CC/MCC” and “without CC/MCC” or “with MCC” and “without MCC”. For example, under the MS-LTC-DRG system, multiple sclerosis and cerebellar ataxia with MCC is MS-LTC-DRG 58; multiple sclerosis and cerebellar ataxia with CC is MS-LTC-DRG 59; and multiple sclerosis and cerebellar ataxia without CC/MCC is MS-LTC-DRG 60. For purposes of discussion in this section, the term “base DRG” is used to refer to the DRG category that encompasses all levels of severity for that DRG. For example, when referring to the entire DRG category for multiple sclerosis and cerebellar ataxia, which includes the above three severity levels, we would use the term “base-DRG.” As noted above, while the LTCH PPS and the IPPS use the same patient classification system, the methodology that is used to set the DRG weights for use in each payment system differs because the overall volume of cases in the LTCH PPS is much less than in the IPPS. As a general rule, consistent with the methodology we used when we adopted the MS-LTC-DRGs in the FY 2008 IPPS final rule with comment period (72 FR 47278 through 47281), we are proposing to determine the FY 2009 relative weights for the MS-LTC-DRGs using the following steps: (1) if an MS-LTC-DRG has at least 25 cases, it is assigned its own relative weight; (2) if an MS-LTC-DRG has between 1 and 24 cases, it is assigned to a quintile for which we will compute a relative weight; and (3) if an MS-LTC-DRG has no cases, it is crosswalked to another MS-LTC-DRG based upon clinical similarities to assign an appropriate relative weight (as described below in detail in Step 5 of the Steps for Determining the proposed FY 2009 MS-LTC-DRG Relative Weights). Furthermore, in determining the proposed FY 2009 MS-LTC-DRG relative weights, when necessary, we are proposing to make adjustments to account for nonmonotonicity, as explained below. Theoretically, cases under the MS-LTC-DRG system that are more severe require greater expenditure of medical care resources and will result in higher average charges. Therefore, in the three severity levels, weights should increase with severity, from lowest to highest. If the weights do not increase (that is, if based on the relative weight methodology outlined above, the MS-LTC-DRG with MCC would have a lower relative weight than one with CC, or the MS-LTC-DRG without CC/MCC would have a higher relative weight than either of the others), there is a problem with monotonicity. Since the start of the LTCH PPS for FY 2003 (67 FR 55990), we have adjusted the setting of the LTC-DRG relative weights in order to maintain monotonicity by grouping both sets of cases together and establishing a new relative weight for both LTC-DRGs. We continue to believe that utilizing nonmonotonic relative weights to adjust Medicare payments would result in inappropriate payments because, in a nonmonotonic system, cases that are more severe and require greater expenditure of medical care resources would be paid based on a lower relative weight than cases that are less severe and require lower resource use. The procedure for dealing with nonmonotonicity under the MS-LTC-DRG classification system is discussed in greater detail below in section II.I.4. (Step 6) of the preamble of this proposed rule. e. Proposed Low-Volume MS-LTC-DRGs In order to account for MS-LTC-DRGs with low volume (that is, with fewer than 25 LTCH cases), consistent with the methodology we established when we implemented the LTCH PPS (August 30, 2002; 67 FR 55984 through 55995), we group those “low-volume MS-LTC-DRGs” (that is, MS-LTC-DRGs that contained between 1 and 24 cases annually) into one of five categories (quintiles) based on average charges, for the purposes of determining relative weights (72 FR 47283 through 47288). In determining the proposed FY 
                        ( print page 23595)
                        2009 MS-LTC-DRG relative weights in this proposed rule, we are proposing to continue to employ this quintile methodology for proposed low-volume MS-LTC-DRGs. In addition, in cases where the initial assignment of a low-volume MS-LTC-DRG to quintiles results in nonmonotonicity within a base DRG, in order to ensure appropriate Medicare payments, consistent with our historical methodology, we are proposing to make adjustments to the treatment of low-volume MS-LTC-DRGs to preserve monotonicity, as discussed in detail below in section II.I.4 (Step 6 of the methodology for determining the proposed FY 2009 MS-LTC-DRG relative weights). In this proposed rule, using LTCH cases from the December 2007 update of the FY 2007 MedPAR file, we identified 290 MS-LTC-DRGs that contained between 1 and 24 cases. This list of proposed MS-LTC-DRGs was then divided into one of the proposed 5 low-volume quintiles, each containing 58 MS-LTC-DRGs (290/5 = 58). We are proposing to make the assignment of a low-volume MS-LTC-DRG to a specific low-volume quintile by sorting the proposed low-volume MS-LTC-DRGs in ascending order by average charge in accordance with our established methodology. Specifically, for this proposed rule, the 290 proposed low-volume MS-LTC-DRGs are sorted by ascending order by average charge and assigned to a specific proposed low-volume quintile (as described below). After sorting the 290 proposed low-volume MS-LTC-DRGs by average charge in ascending order, we are proposing to group the first fifth (1st through 58th) of proposed low-volume MS-LTC-DRGs (with the lowest average charge) into Quintile 1. This process is repeated through the remaining proposed low-volume MS-LTC-DRGs so that each of the 5 proposed low-volume quintiles contains 58 proposed MS-LTC-DRGs. The highest average charge cases would be grouped into Quintile 5. (We note that, consistent with our historical methodology, if the number of proposed low-volume MS-LTC-DRGs had not been evenly divisible by 5, we would have used the average charge of the proposed low-volume MS-LTC-DRG to determine which proposed low-volume quintile would have received the additional proposed low-volume MS-LTC-DRG.) Accordingly, in order to determine the proposed relative weights for the proposed MS-LTC-DRGs with low-volume for FY 2009, we are proposing to use the five low-volume quintiles described above. The composition of each of the proposed five low-volume quintiles shown in the chart below was used in determining the proposed MS-LTC-DRG relative weights for FY 2009 (Table 11 of the Addendum of this proposed rule). We would determine a proposed relative weight and (geometric) average length of stay for each of the proposed five low-volume quintiles using the methodology that we are proposing to apply to the regular MS-LTC-DRGs (25 or more cases), as described in section II.I.4. of the preamble of this proposed rule. We are proposing to assign the same relative weight and average length of stay to each of the proposed low-volume MS-LTC-DRGs that make up an individual low-volume quintile. We note that, as this system is dynamic, it is possible that the number and specific type of MS-LTC-DRGs with a low volume of LTCH cases will vary in the future. We use the best available claims data in the MedPAR file to identify low-volume MS-LTC-DRGs and to calculate the relative weights based on our methodology. **Proposed Composition of Low-Volume Quintiles for FY 2009**
Proposed
                                 MS-LTC-DRG 
                                 (version 26.0)
Proposed MS-LTC-DRG description (version 26.0)**PROPOSED QUINTILE 1**66
Intracranial hemorrhage or cerebral infarction w/o CC/MCC.67
Nonspecific cva & precerebral occlusion w/o infarct w MCC.68
Nonspecific cva & precerebral occlusion w/o infarct w/o MCC.69
Transient ischemia.72
Nonspecific cerebrovascular disorders w/o CC/MCC.79
Hypertensive encephalopathy w/o CC/MCC.87
Traumatic stupor & coma, coma <1 hr w/o CC/MCC.89
Concussion w CC.125
Other disorders of the eye w/o MCC.135
Sinus & mastoid procedures w CC/MCC.136
Sinus & mastoid procedures w/o CC/MCC.**148
Ear, nose, mouth & throat malignancy w/o CC/MCC.149
Dysequilibrium.159
Dental & Oral Diseases w/o CC/MCC.183
Major chest trauma w MCC.184
Major chest trauma w CC.185
Major chest trauma w/o CC/MCC.201
Pneumothorax w/o CC/MCC.257
Upper limb & toe amputation for circ system disorders w/o CC/MCC.261
Cardiac pacemaker revision except device replacement w CC.***263
Vein ligation & stripping.304
Hypertension w MCC.305
Hypertension w/o MCC.311
Angina pectoris.313
Chest pain.382
Complicated peptic ulcer w/o CC/MCC.387
Inflammatory bowel disease w/o CC/MCC.437
Malignancy of hepatobiliary system or pancreas w/o CC/MCC.443
Disorders of liver except malig, cirr, alc hepa w/o CC/MCC.468
Revision of hip or knee replacement w/o CC/MCC.510
Shoulder, elbow or forearm proc, exc major joint proc w MCC.***537
Sprains, strains, & dislocations of hip, pelvis & thigh w CC/MCC.( print page 23596)544
Pathological fractures & musculoskelet & conn tiss malig w/o CC/MCC.547
Connective tissue disorders w/o CC/MCC.556
Signs & symptoms of musculoskeletal system & conn tissue w/o MCC.563
Fx, sprn, strn & disl except femur, hip, pelvis & thigh w/o MCC.601
Non-malignant breast disorders w/o CC/MCC.618
Amputat of lower limb for endocrine, nutrit, & metabol dis w/o CC/MCC.642
Inborn errors of metabolism645
Endocrine disorders w/o CC/MCC.694
Urinary stones w/o esw lithotripsy w/o MCC.723
Malignancy, male reproductive system w CC.726
Benign prostatic hypertrophy w/o MCC.730
Other male reproductive system diagnoses w/o CC/MCC.756
Malignancy, female reproductive system w/o CC/MCC.781
Other antepartum diagnoses w medical complications.810
Major hematol/immun diag exc sickle cell crisis & coagul w/o CC/MCC.816
Reticuloendothelial & immunity disorders w/o CC/MCC.864
Fever of unknown origin.869
Other infectious & parasitic diseases diagnoses w/o CC/MCC.880
Acute adjustment reaction & psychosocial dysfunction.882
Neuroses except depressive.886
Behavioral & developmental disorders.895
Alcohol/drug abuse or dependence w rehabilitation therapy.897
Alcohol/drug abuse or dependence w/o rehabilitation therapy w/o MCC.917
Poisoning & toxic effects of drugs w MCC.918
Poisoning & toxic effects of drugs w/o MCC.958
Other O.R. procedures for multiple significant trauma w CC.965
Other multiple significant trauma w/o CC/MCC.**PROPOSED QUINTILE 2**59
Multiple sclerosis & cerebellar ataxia w CC.60
Multiple sclerosis & cerebellar ataxia w/o CC/MCC.75
Viral meningitis w CC/MCC.78
Hypertensive encephalopathy w CC.83
Traumatic stupor & coma, coma >1 hr w CC.84
Traumatic stupor & coma, coma >1 hr w/o CC/MCC.99
Non-bacterial infect of nervous sys exc viral meningitis w/o CC/MCC.102
Headaches w MCC.103
Headaches w/o MCC.121
Acute major eye infections w CC/MCC.122
Acute major eye infections w/o CC/MCC.124
Other disorders of the eye w MCC.153
Otitis media & URI w/o MCC.156
Nasal trauma & deformity w/o CC/MCC.157
Dental & Oral Diseases w MCC.158
Dental & Oral Diseases w CC.182
Respiratory neoplasms w/o CC/MCC.*188
Pleural effusion w/o CC/MCC.*203
Bronchitis & asthma w/o CC/MCC.254
Other vascular procedures w/o CC/MCC.294
Deep vein thrombophlebitis w CC/MCC.354
Hernia procedures except inguinal & femoral w CC.376
Digestive malignancy w/o CC/MCC.379
G.I. hemorrhage w/o CC/MCC.381
Complicated peptic ulcer w CC.390
G.I. obstruction w/o CC/MCC.409
Biliary tract proc except only cholecyst w or w/o c.d.e. w CC.433
Cirrhosis & alcoholic hepatitis w CC.440
Disorders of pancreas except malignancy w/o CC/MCC.446
Disorders of the biliary tract w/o CC/MCC.*489
Knee procedures w/o pdx of infection w/o CC/MCC.533
Fractures of femur w MCC.534
Fractures of femur w/o MCC.553
Bone diseases & arthropathies w MCC.578
Skin graft &/or debrid exc for skin ulcer or cellulitis w/o CC/MCC.584
Breast biopsy, local excision & other breast procedures w CC/MCC.624
Skin grafts & wound debrid for endoc, nutrit & metab dis w/o CC/MCC.661
Kidney & ureter procedures for non-neoplasm w/o CC/MCC.663
Minor bladder procedures w CC.665
Prostatectomy w MCC.***( print page 23597)669
Transurethral procedures w CC.671
Urethral procedures w CC/MCC.688
Kidney & urinary tract neoplasms w/o CC/MCC.696
Kidney & urinary tract signs & symptoms w/o MCC.722
Malignancy, male reproductive system w MCC.759
Infections, female reproductive system w/o CC/MCC.*815
Reticuloendothelial & immunity disorders w CC.835
Acute leukemia w/o major O.R. procedure w CC.***842
Lymphoma & non-acute leukemia w/o CC/MCC.844
Other myeloprolif dis or poorly diff neopl diag w CC.845
Other myeloprolif dis or poorly diff neopl diag w/o CC/MCC.866
Viral illness w/o MCC.876
O.R. procedure w principal diagnoses of mental illness.881
Depressive neuroses923
Other injury, poisoning & toxic effect diag w/o MCC.929
Full thickness burn w skin graft or inhal inj w/o CC/MCC.964
Other multiple significant trauma w CC.976
HIV w major related condition w/o CC/MCC.**PROPOSED QUINTILE 3**23
Craniotomy w major device implant or acute complex CNS PDX w MCC.***27
Craniotomy & endovascular intracranial procedures w/o CC/MCC.53
Spinal disorders & injuries w/o CC/MCC.58
Multiple sclerosis & cerebellar ataxia w MCC.82
Traumatic stupor & coma, coma >1 hr w MCC.98
Non-bacterial infect of nervous sys exc viral meningitis w CC.113
Orbital procedures w CC/MCC.116
Intraocular procedures w CC/MCC.136
Sinus & mastoid procedures w/o CC/MCC.***152
Otitis media & URI w MCC.165
Major chest procedures w/o CC/MCC.168
Other resp system O.R. procedures w/o CC/MCC.238
Major cardiovascular procedures w/o MCC.241
Amputation for circ sys disorders exc upper limb & toe w/o CC/MCC.261
Cardiac pacemaker revision except device replacement w CC.**262
Cardiac pacemaker revision except device replacement w/o CC/MCC.**284
Circulatory disorders w AMI, expired w CC.*287
Circulatory disorders except AMI, w card cath w/o MCC.369
Major esophageal disorders w CC.370
Major esophageal disorders w/o CC/MCC.380
Complicated peptic ulcer w MCC.384
Uncomplicated peptic ulcer w/o MCC.424
Other hepatobiliary or pancreas O.R. procedures w CC.471
Cervical spinal fusion w MCC.472
Cervical spinal fusion w CC.476
Amputation for musculoskeletal sys & conn tissue dis w/o CC/MCC.482
Hip & femur procedures except major joint w/o CC/MCC.494
Lower extrem & humer proc except hip, foot, femur w/o CC/MCC.497
Local excision & removal int fix devices exc hip & femur w/o CC/MCC.*502
Soft tissue procedures w/o CC/MCC.504
Foot procedures w CC.505
Foot procedures w/o CC/MCC.510
Shoulder, elbow or forearm proc, exc major joint proc w MCC.**511
Shoulder, elbow or forearm proc, exc major joint proc w CC.**535
Fractures of hip & pelvis w MCC.542
Pathological fractures & musculoskelet & conn tiss malig w MCC.555
Signs & symptoms of musculoskeletal system & conn tissue w MCC.562
Fx, sprn, strn & disl except femur, hip, pelvis & thigh w MCC.598
Malignant breast disorders w CC.599
Malignant breast disorders w/o CC/MCC.**600
Non-malignant breast disorders w CC/MCC.626
Thyroid, parathyroid & thyroglossal procedures w CC.630
Other endocrine, nutrit & metab O.R. proc w/o CC/MCC.665
Prostatectomy w MCC.**666
Prostatectomy w CC.**668
Transurethral procedures w MCC.686
Kidney & urinary tract neoplasms w MCC.687
Kidney & urinary tract neoplasms w CC.693
Urinary stones w/o esw lithotripsy w MCC.( print page 23598)725
Benign prostatic hypertrophy w MCC.744
D&C, conization, laparoscopy & tubal interruption w CC/MCC.755
Malignancy, female reproductive system w CC.800
Splenectomy w CC.809
Major hematol/immun diag exc sickle cell crisis & coagul w CC.814
Reticuloendothelial & immunity disorders w MCC.824
Lymphoma & non-acute leukemia w other O.R. proc w CC.834
Acute leukemia w/o major O.R. procedure w MCC.835
Acute leukemia w/o major O.R. procedure w CC.**836
Acute leukemia w/o major O.R. procedure w/o CC/MCC.**843
Other myeloprolif dis or poorly diff neopl diag w MCC.883
Disorders of personality & impulse control.903
Wound debridements for injuries w/o CC/MCC.905
Skin grafts for injuries w/o CC/MCC.922
Other injury, poisoning & toxic effect diag w MCC.941
O.R. proc w diagnoses of other contact w health services w/o CC/MCC.963
Other multiple significant trauma w MCC.989
Non-extensive O.R. proc unrelated to principal diagnosis w/o CC/MCC.**PROPOSED QUINTILE 4**23
Craniotomy w major device implant or acute complex CNS PDX w MCC.**24
Craniotomy w major device implant or acute complex CNS PDX w/o MCC.**28
Spinal procedures w MCC.29
Spinal procedures w CC.30
Spinal procedures w/o CC/MCC.37
Extracranial procedures w MCC.38
Extracranial procedures w CC.**42
Periph & cranial nerve & other nerv syst proc w/o CC/MCC.*77
Hypertensive encephalopathy w MCC.133
Other ear, nose, mouth & throat O.R. procedures w CC/MCC.164
Major chest procedures w CC.237
Major cardiovascular procedures w MCC.242
Permanent cardiac pacemaker implant w MCC.***246
Percutaneous cardiovascular proc w drug-eluting stent w MCC.247
Percutaneous cardiovascular proc w drug-eluting stent w/o MCC.248
Percutaneous cardiovasc proc w non-drug-eluting stent w MCC.249
Percutaneous cardiovasc proc w non-drug-eluting stent w/o MCC.**259
Cardiac pacemaker device replacement w/o MCC.260
Cardiac pacemaker revision except device replacement w MCC.262
Cardiac pacemaker revision except device replacement w/o CC/MCC.***286
Circulatory disorders except AMI, w card cath w MCC.327
Stomach, esophageal & duodenal proc w CC.328
Stomach, esophageal & duodenal proc w/o CC/MCC.**348
Anal & stomal procedures w CC.358
Other digestive system O.R. procedures w/o CC/MCC.*405
Pancreas, liver & shunt procedures w MCC.406
Pancreas, liver & shunt procedures w CC.**417
Laparoscopic cholecystectomy w/o c.d.e. w MCC.***466
Revision of hip or knee replacement w MCC.467
Revision of hip or knee replacement w CC.469
Major joint replacement or reattachment of lower extremity w MCC.***478
Biopsies of musculoskeletal system & connective tissue w CC.481
Hip & femur procedures except major joint w CC.485
Knee procedures w pdx of infection w MCC.486
Knee procedures w pdx of infection w CC.487
Knee procedures w pdx of infection w/o CC/MCC.**490
Back & neck procedures except spinal fusion w CC/MCC or disc devices.492
Lower extrem & humer proc except hip, foot, femur w MCC.493
Lower extrem & humer proc except hip, foot, femur w CC.503
Foot procedures w MCC.511
Shoulder, elbow or forearm proc, exc major joint proc w CC.***513
Hand or wrist proc, except major thumb or joint proc w CC/MCC.514
Hand or wrist proc, except major thumb or joint proc w/o CC/MCC.**597
Malignant breast disorders w MCC.599
Malignant breast disorders w/o CC/MCC.***625
Thyroid, parathyroid & thyroglossal procedures w MCC.659
Kidney & ureter procedures for non-neoplasm w MCC.660
Kidney & ureter procedures for non-neoplasm w CC.666
Prostatectomy w CC.***( print page 23599)695
Kidney & urinary tract signs & symptoms w MCC.711
Testes procedures w CC/MCC.717
Other male reproductive system O.R. proc exc malignancy w CC/MCC.739
Uterine, adnexa proc for non-ovarian/adnexal malig w MCC.749
Other female reproductive system O.R. procedures w CC/MCC.754
Malignancy, female reproductive system w MCC.802
Other O.R. proc of the blood & blood forming organs w MCC.808
Major hematol/immun diag exc sickle cell crisis & coagul w MCC.823
Lymphoma & non-acute leukemia w other O.R. proc w MCC.896
Alcohol/drug abuse or dependence w/o rehabilitation therapy w MCC.909
Other O.R. procedures for injuries w/o CC/MCC.*928
Full thickness burn w skin graft or inhal inj w CC/MCC.933
Extensive burns or full thickness burns w MV 96+ hrs w/o skin graft.957
Other O.R. procedures for multiple significant trauma w MCC.969
HIV w extensive O.R. procedure w MCC.970
HIV w extensive O.R. procedure w/o MCC.**984
Prostatic O.R. procedure unrelated to principal diagnosis w MCC.985
Prostatic O.R. procedure unrelated to principal diagnosis w CC.**PROPOSED QUINTILE 5**11
Tracheostomy for face, mouth & neck diagnoses w MCC.12
Tracheostomy for face, mouth & neck diagnoses w CC.24
Craniotomy w major device implant or acute complex CNS PDX w/o MCC.***25
Craniotomy & endovascular intracranial procedures w MCC.26
Craniotomy & endovascular intracranial procedures w CC.31
Ventricular shunt procedures w MCC.32
Ventricular shunt procedures w CC.38
Extracranial procedures w CC.***132
Cranial/facial procedures w/o CC/MCC.137
Mouth procedures w CC/MCC.226
Cardiac defibrillator implant w/o cardiac cath w MCC.227
Cardiac defibrillator implant w/o cardiac cath w/o MCC.242
Permanent cardiac pacemaker implant w MCC.**243
Permanent cardiac pacemaker implant w CC.244
Permanent cardiac pacemaker implant w/o CC/MCC.249
Percutaneous cardiovasc proc w non-drug-eluting stent w/o MCC.***250
Perc cardiovasc proc w/o coronary artery stent or AMI w MCC.326
Stomach, esophageal & duodenal proc w MCC.328
Stomach, esophageal & duodenal proc w/o CC/MCC.***330
Major small & large bowel procedures w CC.331
Major small & large bowel procedures w/o CC/MCC.335
Peritoneal adhesiolysis w MCC.344
Minor small & large bowel procedures w MCC.347
Anal & stomal procedures w MCC.353
Hernia procedures except inguinal & femoral w MCC.406
Pancreas, liver & shunt procedures w CC.***411
Cholecystectomy w c.d.e. w MCC.414
Cholecystectomy except by laparoscope w/o c.d.e. w MCC.415
Cholecystectomy except by laparoscope w/o c.d.e. w CC.417
Laparoscopic cholecystectomy w/o c.d.e. w MCC.**418
Laparoscopic cholecystectomy w/o c.d.e. w CC.423
Other hepatobiliary or pancreas O.R. procedures w MCC.456
Spinal fusion exc cerv w spinal curv, malig or 9+ fusions w MCC.457
Spinal fusion exc cerv w spinal curv, malig or 9+ fusions w CC.459
Spinal fusion except cervical w MCC.469
Major joint replacement or reattachment of lower extremity w MCC.**470
Major joint replacement or reattachment of lower extremity w/o MCC.477
Biopsies of musculoskeletal system & connective tissue w MCC.480
Hip & femur procedures except major joint w MCC.487
Knee procedures w pdx of infection w/o CC/MCC.***488
Knee procedures w/o pdx of infection w CC/MCC.496
Local excision & removal int fix devices exc hip & femur w CC.*498
Local excision & removal int fix devices of hip & femur w CC/MCC.507
Major shoulder or elbow joint procedures w CC/MCC.514
Hand or wrist proc, except major thumb or joint proc w/o CC/MCC.***582
Mastectomy for malignancy w CC/MCC.619
O.R. procedures for obesity w MCC.653
Major bladder procedures w MCC.656
Kidney & ureter procedures for neoplasm w MCC.( print page 23600)662
Minor bladder procedures w MCC.709
Penis procedures w CC/MCC.713
Transurethral prostatectomy w CC/MCC.746
Vagina, cervix & vulva procedures w CC/MCC.826
Myeloprolif disord or poorly diff neopl w maj O.R. proc w MCC.827
Myeloprolif disord or poorly diff neopl w maj O.R. proc w CC.829
Myeloprolif disord or poorly diff neopl w other O.R. proc w CC/MCC.836
Acute leukemia w/o major O.R. procedure w/o CC/MCC.***855
Infectious & parasitic diseases w O.R. procedure w/o CC/MCC.*906
Hand procedures for injuries.927
Extensive burns or full thickness burns w MV 96+ hrs w skin graft.970
HIV w extensive O.R. procedure w/o MCC.****One of the original 290 proposed low-volume MS-LTC-DRGs initially assigned to this proposed low-volume quintile; removed from this proposed low-volume quintile in addressing nonmonotonicity (refer to step 6 in section II.I.4..of the preamble of this proposed rule).**One of the original 290 proposed low-volume MS-LTC-DRGs initially assigned to a different proposed low-volume quintile but moved to this proposed low-volume quintile in addressing nonmonotonicity (refer to step  6 in section II.I.4. of the preamble of this proposed rule).***One of the original 290 proposed low-volume MS-LTC-DRGs initially assigned to this proposed low-volume quintile but moved to a different proposed low-volume quintile in addressing nonmonotonicity (refer to step 6 in section II.I.4. of the preamble of this proposed rule).
 We note that we will continue to monitor the volume (that is, the number of LTCH cases) in the low-volume quintiles to ensure that our proposed quintile assignment results in appropriate payment for such cases and does not result in an unintended financial incentive for LTCHs to inappropriately admit these types of cases. 4. Steps for Determining the Proposed FY 2009 MS-LTC-DRG Relative Weights In general, the proposed FY 2009 MS-LTC-DRG relative weights in this proposed rule were determined based on the methodology established in the August 30, 2002 LTCH PPS final rule (67 FR 55989 through 55991). In summary, for FY 2009, we are proposing to group LTCH cases to the appropriate proposed MS-LTC-DRG, while taking into account the proposed low-volume MS-LTC-DRGs (as described above), before the proposed FY 2009 MS-LTC-DRG relative weights are determined. After grouping the cases to the appropriate proposed MS-LTC-DRG (or proposed low-volume quintile), we would calculate the proposed relative weights for FY 2009 by first removing statistical outliers and cases with a length of stay of 7 days or less (as discussed in greater detail below). Next, we would adjust the number of cases in each proposed MS-LTC-DRG (or proposed low-volume quintile) for the effect of short-stay outlier cases (as also discussed in greater detail below). The short-stay adjusted discharges and corresponding charges are used to calculate “relative adjusted weights” in each proposed MS-LTC-DRG (or proposed low-volume quintile) using the HSRV method (described above). In general, to determine the proposed FY 2009 MS-LTC-DRG relative weights in this proposed rule, we are proposing to use the same methodology we used in determining the FY 2008 MS-LTC-DRG relative weights in the FY 2008 IPPS final rule with comment period (72 FR 47281 through 47299). However, we are proposing to make a modification to our methodology for determining proposed relative weights for MS-LTC-DRGs with no LTCH cases (as discussed in greater detail in Step 5 below). Also, we note that, although we are generally proposing to use the same methodology in this proposed rule (with the exception noted above) as the methodology used in the FY 2008 IPPS final rule with comment, the discussion presented below of the steps for determining the proposed FY 2009 MS-LTC-DRG relative weights varies slightly from the discussion of the steps for determining the FY 2008 MS-LTC-DRG relative weights (presented in the FY 2008 IPPS final rule with comment) because we are taking this opportunity to refine our description to more precisely explain our methodology for determining the MS-LTC-DRG relative weights. As discussed in the FY 2008 IPPS final rule with comment when we adopted the MS-LTC-DRGs, the adoption of the MS-LTC-DRGs with either two or three severity levels resulted in some slight modifications of procedures for assigning relative weights in cases of zero volume and/or nonmonotonicity (described in detail below) from the methodology we established when we implemented the LTCH PPS in the August 30, 2002 LTCH PPS final rule. As also discussed in the FY 2008 IPPS final rule with comment when we adopted the MS-LTC-DRGs, we implemented the MS-LTC-DRGs with a 2-year transition beginning in FY 2008. For FY 2008, the first year of the transition, 50 percent of the relative weight for a MS-LTC-DRG was based on the average LTC-DRG relative weight under Version 24.0 of the LTC-DRG GROUPER. The remaining 50 percent of the relative weight was based on the MS-LTC-DRG relative weight under Version 25.0 of the MS-LTC-DRG GROUPER. In FY 2009, the MS-LTC-DRG relative weights are based on 100 percent of the MS-LTC-DRG relative weights. Accordingly, in determining the proposed FY 2009 MS-LTC-DRG relative weights in this proposed rule, there is no longer a need to include a step to calculate MS-LTC-DRG transition blended relative weights (see Step 7 in the FY 2008 IPPS final rule with comment period (72 FR 47295)). Therefore, in this proposed rule, we determined the proposed FY 2009 MS-LTC-DRG relative weights based  solely on the proposed MS-LTC-DRG relative weight under proposed Version 26.0 of the MS-LTC-DRG GROUPER, which is discussed in section II.B. of the preamble of this proposed rule. Furthermore, we are proposing that we would determine the final FY 2009 MS-LTC-DRG relative weights in the final rule based on the final Version 26.0 of the MS-LTC-DRG GROUPER that will be presented in that same final rule. Below we discuss in detail the steps for calculating the proposed FY 2009 MS-LTC-DRG relative weights. We note that, as we stated above in section II.I.3.b. of the preamble of this proposed rule, we have excluded the data of all-inclusive rate LTCHs and LTCHs that 
                        ( print page 23601)
                        are paid in accordance with demonstration projects that had claims in the FY 2007 MedPAR file. *Step 1*
                        —Remove statistical outliers. The first step in the calculation of the proposed FY 2009 MS-LTC-DRG relative weights is to remove statistical outlier cases. Consistent with our historical relative weight methodology, we are proposing to continue to define statistical outliers as cases that are outside of 3.0 standard deviations from the mean of the log distribution of both charges per case and the charges per day for each proposed MS-LTC-DRG. These statistical outliers are removed prior to calculating the proposed relative weights because we believe that they may represent aberrations in the data that distort the measure of average resource use. Including those LTCH cases in the calculation of the proposed relative weights could result in an inaccurate proposed relative weight that does not truly reflect relative resource use among the proposed MS-LTC-DRGs. *Step 2*
                        —Remove cases with a length of stay of 7 days or less. The MS-LTC-DRG relative weights reflect the average of resources used on representative cases of a specific type. Generally, cases with a length of stay of 7 days or less do not belong in a LTCH because these stays do not fully receive or benefit from treatment that is typical in a LTCH stay, and full resources are often not used in the earlier stages of admission to a LTCH. If we were to include stays of 7 days or less in the computation of the proposed FY 2009 MS-LTC-DRG relative weights, the value of many relative weights would decrease and, therefore, payments would decrease to a level that may no longer be appropriate. We do not believe that it would be appropriate to compromise the integrity of the payment determination for those LTCH cases that actually benefit from and receive a full course of treatment at a LTCH, by including data from these very short-stays. Therefore, consistent with our historical relative weight methodology, in determining the proposed FY 2009 MS-LTC-DRG relative weights, we are proposing to remove LTCH cases with a length of stay of 7 days or less. *Step 3*
                        —Adjust charges for the effects of short-stay outliers. After removing cases with a length of stay of 7 days or less, we are left with cases that have a length of stay of greater than or equal to 8 days. As the next step in the calculation of the proposed FY 2009 MS-LTC-DRG relative weights, consistent with our historical relative weight methodology, we are proposing to adjust each LTCH's charges per discharge for those remaining cases for the effects of short-stay outliers (as defined in § 412.529(a) in conjunction with § 412.503 for LTCH discharges occurring on or after October 1, 2008). (We note that even if a case was removed in Step 2 (that is, cases with a length of stay of 7 days or less), it was paid as a short-stay outlier if its length of stay was less than or equal to five-sixths of the average length of stay of the MS-LTC-DRG.) We would make this adjustment by counting a short-stay outlier as a fraction of a discharge based on the ratio of the length of stay of the case to the average length of stay for the proposed MS-LTC-DRG for nonshort-stay outlier cases. This has the effect of proportionately reducing the impact of the lower charges for the short-stay outlier cases in calculating the average charge for the proposed MS-LTC-DRG. This process produces the same result as if the actual charges per discharge of a short-stay outlier case were adjusted to what they would have been had the patient's length of stay been equal to the average length of stay of the proposed MS-LTC-DRG. Counting short-stay outlier cases as full discharges with no adjustment in determining the proposed FY 2009 MS-LTC-DRG relative weights would lower the proposed FY 2009 MS-LTC-DRG relative weight for affected proposed MS-LTC-DRGs because the relatively lower charges of the short-stay outlier cases would bring down the average charge for all cases within a proposed MS-LTC-DRG. This would result in an “underpayment” for nonshort-stay outlier cases and an “overpayment” for short-stay outlier cases. Therefore, we are proposing to adjust for short-stay outlier cases under § 412.529 in this manner because it results in more appropriate payments for all LTCH cases. *Step 4*
                        —Calculate the proposed FY 2009 MS-LTC-DRG relative weights on an iterative basis. Consistent with our historical relative weight methodology, we are proposing to calculate the proposed MS-LTC-DRG relative weights using the HSRV methodology, which is an iterative process. First, for each LTCH case, we calculate a hospital-specific relative charge value by dividing the short-stay outlier adjusted charge per discharge (see step 3) of the LTCH case (after removing the statistical outliers (see step 1)) and LTCH cases with a length of stay of 7 days or less (see step 2) by the average charge per discharge for the LTCH in which the case occurred. The resulting ratio is then multiplied by the LTCH's case-mix index to produce an adjusted hospital-specific relative charge value for the case. An initial case-mix index value of 1.0 is used for each LTCH. For each proposed MS-LTC-DRG, the proposed FY 2009 relative weight is calculated by dividing the average of the adjusted hospital-specific relative charge values (from above) for the MS-LTC-DRG by the overall average hospital-specific relative charge value across all cases for all LTCHs. Using these recalculated MS-LTC-DRG relative weights, each LTCH's average relative weight for all of its cases (that is, its case-mix) is calculated by dividing the sum of all the LTCH's MS-LTC-DRG relative weights by its total number of cases. The LTCH's hospital-specific relative charge values above are multiplied by these hospital-specific case-mix indexes. These hospital-specific case-mix adjusted relative charge values are then used to calculate a new set of MS-LTC-DRG relative weights across all LTCHs. This iterative process is continued until there is convergence between the weights produced at adjacent steps, for example, when the maximum difference is less than 0.0001. *Step 5*
                        —Determine a proposed FY 2009 relative weight for proposed MS-LTC-DRGs with no LTCH cases. As we stated above, we determine the proposed FY 2009 relative weight for each proposed MS-LTC-DRG using total Medicare allowable charges reported in the best available LTCH claims data (that is, the December 2007 update of the FY 2007 MedPAR file for this proposed rule). Of the proposed FY 2009 MS-LTC-DRGs, we identified a number of proposed MS-LTC-DRGs for which there were no LTCH cases in the database. That is, based on data from the FY 2007 MedPAR file used for this proposed rule, no patients who would have been classified to those proposed MS-LTC-DRGs were treated in LTCHs during FY 2007 and, therefore, no charge data are available for those proposed MS-LTC-DRGs. Thus, in the process of determining the proposed MS-LTC-DRG relative weights, we are unable to calculate proposed relative weights for these proposed MS-LTC-DRGs with no LTCH cases using the methodology described in Steps 1 through 4 above. However, because patients with a number of the diagnoses under these proposed MS-LTC-DRGs may be treated at LTCHs, consistent with our historical methodology, we are proposing to assign relative weights to each of the proposed no-volume MS-LTC-DRGs based on clinical similarity and relative costliness (with the 
                        ( print page 23602)
                        exception of proposed “transplant” MS-LTC-DRGs and proposed “error” MS-LTC-DRGs as discussed below). In general, we are proposing to determine proposed FY 2009 relative weights for the proposed MS-LTC-DRGs with no LTCH cases in the FY 2007 MedPAR file used in this proposed rule (that is, proposed “no-volume MS-LTC-DRGs) by cross-walking each proposed no-volume MS-LTC-DRG to another proposed MS-LTC-DRG with a proposed relative weight (determined in accordance with the proposed methodology described above). Then, under our proposed methodology presented in this proposed rule, the proposed “no-volume” MS-LTC-DRG would be assigned the same proposed relative weight of the proposed MS-LTC-DRG to which it would be cross-walked (as described in greater detail below). As noted above, we are proposing to make a modification to our methodology for determining proposed relative weights for MS-LTC-DRGs with no LTCH cases in this proposed rule, which is discussed in greater detail below. As also noted above, even where we are not proposing changes to our existing methodology, we are taking this opportunity to refine our description to more precisely explain our proposed methodology for determining the MS-LTC-DRG relative weights in this proposed rule. Specifically, in this proposed rule, we are proposing to determine the relative weight for each proposed MS-LTC-DRG using total Medicare allowable charges reported in the December 2007 update of the FY 2007 MedPAR file. Of the 746 proposed MS-LTC-DRGs for FY 2009, we identified 203 proposed MS-LTC-DRGs for which there were no LTCH cases in the database (including the 8 proposed “transplant” MS-LTC-DRGs and 2 proposed “error” MS-LTC-DRGs). For this proposed rule, as noted above, we are proposing to assign proposed relative weights for each of the 203 proposed no-volume MS-LTC-DRGs (with the exception of the 8 proposed “transplant” proposed MS-LTC-DRGs and the 2 proposed “error” MS-LTC-DRGs, which are discussed below) based on clinical similarity and relative costliness to one of the remaining 543 (746 − 203 = 543) proposed MS-LTC-DRGs for which we are able to determine relative weights, based on FY 2007 LTCH claims data. (For the remainder of this discussion, we refer to one of the 543 proposed MS-LTC-DRGs for which we are able to determine relative weight as the proposed “cross-walked” MS-LTC-DRG.) Then we are proposing to assign the proposed no-volume MS-LTC-DRG the proposed relative weight of the proposed cross-walked MS-LTC-DRG. This proposed approach differs from the one we used to determine the FY 2008 MS-LTC-DRG relative weights when there were no LTCH cases (see 72 FR 47290). Specifically, in determining the FY 2008 MS-LTC-DRG relative weights in the FY 2008 IPPS final rule with comment period, if the no volume MS-LTC-DRG was cross-walked to a MS-LTC-DRG that had 25 or more cases and, therefore, was not in a low-volume quintile, we assigned the relative weight of a quintile to a no-volume MS-LTC-DRG (rather than assigning the relative weight of the cross-walked MS-LTC-DRG). While we believe this approach would result in appropriate LTCH PPS payments (because it is consistent with our methodology for determining relative weights for MS-LTC-DRGs that have a low volume of LTCH cases (which is discussed above in section II.I.3.e. of this preamble)), upon further review during the development of the proposed FY 2009 MS-LTC-DRG relative weights in this proposed rule, we now believe that proposing to assign the proposed relative weight of the proposed cross-walked MS-LTC-DRG to the proposed no-volume MS-LTC-DRG would result in more appropriate LTCH PPS payments because those cases generally require equivalent relative resource (and therefore should generally have the same LTCH PPS payment). The relative weight of each MS-LTC-DRG should reflect relative resource of the LTCH cases grouped to that MS-LTC-DRG. Because the proposed no-volume MS-LTC-DRGs would be cross-walked to other proposed MS-LTC-DRGs based on clinical similarity and relative costliness, which usually require equivalent relative resource use, we believe that assigning the proposed no-volume MS-LTC-DRG the proposed relative weight of the proposed cross-walked MS-LTC-DRG would result in appropriate LTCH PPS payments. (As explained below in Step 6, when necessary, we are proposing to make adjustments to account for nonmonotonicity.) Our proposed methodology for determining the proposed relative weights for the proposed no-volume MS-LTC-DRGs is as follows: We cross-walk the proposed no-volume MS-LTC-DRG to a proposed MS-LTC-DRG for which there are LTCH cases in the FY 2007 MedPAR file and to which it is similar clinically in intensity of use of resources and relative costliness as determined by criteria such as care provided during the period of time surrounding surgery, surgical approach (if applicable), length of time of surgical procedure, postoperative care, and length of stay. We then assign the proposed relative weight of the proposed cross-walked MS-LTC-DRG as the proposed relative weight for the proposed no-volume MS-LTC-DRG such that both of these proposed MS-LTC-DRGs (that is, the proposed no-volume MS-LTC-DRG and the proposed cross-walked MS-LTC-DRG) would have the same proposed relative weight. We note that if the proposed cross-walked MS-LTC-DRG had 25 cases or more, its proposed relative weight, which was calculated using the proposed methodology described in steps 1 through 4 above, would be assigned to the proposed no-volume MS-LTC-DRG as well. Similarly, if the proposed MS-LTC-DRG to which the proposed no-volume MS-LTC-DRG is cross-walked has 24 or less cases, and therefore was designated to one of the proposed low-volume quintiles for purposes of determining the proposed relative weights, we would assign the proposed relative weight of the applicable proposed low-volume quintile to the proposed no-volume MS-LTC-DRG such that both of these proposed MS-LTC-DRGs (that is, the proposed no-volume MS-LTC-DRG and the proposed cross-walked MS-LTC-DRG) would have the same proposed relative weight. (As we noted above, in the infrequent case where nonmonotonicity involving a proposed no-volume MS-LTC-DRG results, additional measures as described in Step 6 would be required in order to maintain monotonically increasing relative weights.) For this proposed rule, a list of the proposed no-volume FY 2009 MS-LTC-DRGs and the proposed FY 2009 MS-LTC-DRG to which it is cross-walked (that is, the proposed cross-walked MS-LTC-DRG) is shown in the chart below. 
                        ( print page 23603) Proposed No-Volume MS-LTC-DRG Crosswalk for FY 2009
Proposed 
                                 MS-LTC-DRG  
                                 (Version 26.0)
Proposed MS-LTC-DRG description (version 26.0)
Proposed 
                                 cross-walked  
                                 MS-LTC-DRG9
Bone marrow transplant
82313
Tracheostomy for face, mouth & neck diagnoses w/o CC/MCC
1220
Intracranial vascular procedures w PDX hemorrhage w MCC
3121
Intracranial vascular procedures w PDX hemorrhage w CC
3222
Intracranial vascular procedures w PDX hemorrhage w/o CC/MCC
3233
Ventricular shunt procedures w/o CC/MCC
3234
Carotid artery stent procedure w MCC
3735
Carotid artery stent procedure w CC
3836
Carotid artery stent procedure w/o CC/MCC
3839
Extracranial procedures w/o CC/MCC
3861
Acute ischemic stroke w use of thrombolytic agent w MCC
7062
Acute ischemic stroke w use of thrombolytic agent w CC
7163
Acute ischemic stroke w use of thrombolytic agent w/o CC/MCC
7276
Viral meningitis w/o CC/MCC
7588
Concussion w MCC
8990
Concussion w/o CC/MCC
89114
Orbital procedures w/o CC/MCC
113115
Extraocular procedures except orbit
125117
Intraocular procedures w/o CC/MCC
125123
Neurological eye disorders
125129
Major head & neck procedures w CC/MCC or major device
146130
Major head & neck procedures w/o CC/MCC
148131
Cranial/facial procedures w CC/MCC
132134
Other ear, nose, mouth & throat O.R. procedures w/o CC/MCC
133138
Mouth procedures w/o CC/MCC
137139
Salivary gland procedures
137150
Epistaxis w MCC
152151
Epistaxis w/o MCC
153215
Other heart assist system implant
238216
Cardiac valve & oth maj cardiothoracic proc w card cath w MCC
237217
Cardiac valve & oth maj cardiothoracic proc w card cath w CC
238218
Cardiac valve & oth maj cardiothoracic proc w card cath w/o CC/MCC
238219
Cardiac valve & oth maj cardiothoracic proc w/o card cath w MCC
237220
Cardiac valve & oth maj cardiothoracic proc w/o card cath w CC
238221
Cardiac valve & oth maj cardiothoracic proc w/o card cath w/o CC/MCC
238222
Cardiac defib implant w cardiac cath w AMI/HF/shock w MCC
242223
Cardiac defib implant w cardiac cath w AMI/HF/shock w/o MCC
243224
Cardiac defib implant w cardiac cath w/o AMI/HF/shock w MCC
242225
Cardiac defib implant w cardiac cath w/o AMI/HF/shock w/o MCC
243228
Other cardiothoracic procedures w MCC
252229
Other cardiothoracic procedures w CC
253230
Other cardiothoracic procedures w/o CC/MCC
254231
Coronary bypass w PTCA w MCC
237232
Coronary bypass w PTCA w/o MCC
238233
Coronary bypass w cardiac cath w MCC
237234
Coronary bypass w cardiac cath w/o MCC
238235
Coronary bypass w/o cardiac cath w MCC
237236
Coronary bypass w/o cardiac cath w/o MCC
238245
AICD generator procedures
244251
Perc cardiovasc proc w/o coronary artery stent or AMI w/o MCC
250258
Cardiac pacemaker device replacement w MCC
259265
AICD lead procedures
259285
Circulatory disorders w AMI, expired w/o CC/MCC
284295
Deep vein thrombophlebitis w/o CC/MCC
294296
Cardiac arrest, unexplained w MCC
283297
Cardiac arrest, unexplained w CC
284298
Cardiac arrest, unexplained w/o CC/MCC
284332
Rectal resection w MCC
356333
Rectal resection w CC
357334
Rectal resection w/o CC/MCC
358336
Peritoneal adhesiolysis w CC
335337
Peritoneal adhesiolysis w/o CC/MCC
335338
Appendectomy w complicated principal diag w MCC
371339
Appendectomy w complicated principal diag w CC
372340
Appendectomy w complicated principal diag w/o CC/MCC
373341
Appendectomy w/o complicated principal diag w MCC
371342
Appendectomy w/o complicated principal diag w CC
372343
Appendectomy w/o complicated principal diag w/o CC/MCC
373345
Minor small & large bowel procedures w CC
344346
Minor small & large bowel procedures w/o CC/MCC
344( print page 23604)349
Anal & stomal procedures w/o CC/MCC
348350
Inguinal & femoral hernia procedures w MCC
348351
Inguinal & femoral hernia procedures w CC
348352
Inguinal & femoral hernia procedures w/o CC/MCC
348355
Hernia procedures except inguinal & femoral w/o CC/MCC
354383
Uncomplicated peptic ulcer w MCC
384407
Pancreas, liver & shunt procedures w/o CC/MCC
406408
Biliary tract proc except only cholecyst w or w/o c.d.e. w MCC
409410
Biliary tract proc except only cholecyst w or w/o c.d.e. w/o CC/MCC
409412
Cholecystectomy w c.d.e. w CC
411413
Cholecystectomy w c.d.e. w/o CC/MCC
411416
Cholecystectomy except by laparoscope w/o c.d.e. w/o CC/MCC
415419
Laparoscopic cholecystectomy w/o c.d.e. w/o CC/MCC
418420
Hepatobiliary diagnostic procedures w MCC
424421
Hepatobiliary diagnostic procedures w CC
424422
Hepatobiliary diagnostic procedures w/o CC/MCC
424425
Other hepatobiliary or pancreas O.R. procedures w/o CC/MCC
424434
Cirrhosis & alcoholic hepatitis w/o CC/MCC
433453
Combined anterior/posterior spinal fusion w MCC
457454
Combined anterior/posterior spinal fusion w CC
457455
Combined anterior/posterior spinal fusion w/o CC/MCC
457458
Spinal fusion exc cerv w spinal curv, malig or 9+ fusions w/o CC/MCC
457460
Spinal fusion except cervical w/o MCC
459461
Bilateral or multiple major joint procs of lower extremity w MCC
480462
Bilateral or multiple major joint procs of lower extremity w/o MCC
482473
Cervical spinal fusion w/o CC/MCC
472479
Biopsies of musculoskeletal system & connective tissue w/o CC/MCC
478483
Major joint & limb reattachment proc of upper extremity w CC/MCC
480484
Major joint & limb reattachment proc of upper extremity w/o CC/MCC
482491
Back & neck procedures except spinal fusion w/o CC/MCC
490499
Local excision & removal int fix devices of hip & femur w/o CC/MCC
498506
Major thumb or joint procedures
514508
Major shoulder or elbow joint procedures w/o CC/MCC
507509
Arthroscopy
505512
Shoulder, elbow or forearm proc, exc major joint proc w/o CC/MCC
511517
Other musculoskelet sys & conn tiss O.R. proc w/o CC/MCC
516538
Sprains, strains, & dislocations of hip, pelvis & thigh w/o CC/MCC
537583
Mastectomy for malignancy w/o CC/MCC
582585
Breast biopsy, local excision & other breast procedures w/o CC/MCC
584614
Adrenal & pituitary procedures w CC/MCC
629615
Adrenal & pituitary procedures w/o CC/MCC
630620
O.R. procedures for obesity w CC
619621
O.R. procedures for obesity w/o CC/MCC
619627
Thyroid, parathyroid & thyroglossal procedures w/o CC/MCC
626654
Major bladder procedures w CC
653655
Major bladder procedures w/o CC/MCC
653657
Kidney & ureter procedures forneoplasm w CC
656658
Kidney & ureter procedures for neoplasm w/o CC/MCC
656664
Minor bladder procedures w/o CC/MCC
663667
Prostatectomy w/o CC/MCC
666670
Transurethral procedures w/o CC/MCC
669672
Urethral procedures w/o CC/MCC
671675
Other kidney & urinary tract procedures w/o CC/MCC
674691
Urinary stones w esw lithotripsy w CC/MCC
694692
Urinary stones w esw lithotripsy w/o CC/MCC
694697
Urethral stricture
688707
Major male pelvic procedures w CC/MCC
660708
Major male pelvic procedures w/o CC/MCC
661710
Penis procedures w/o CC/MCC
709712
Testes procedures w/o CC/MCC
711714
Transurethral prostatectomy w/o CC/MCC
713715
Other male reproductive system O.R. proc for malignancy w CC/MCC
717716
Other male reproductive system O.R. proc for malignancy w/o CC/MCC
717718
Other male reproductive system O.R. proc exc malignancy w/o CC/MCC
717724
Malignancy, male reproductive system w/o CC/MCC
723734
Pelvic evisceration, rad hysterectomy & rad vulvectomy w CC/MCC
717735
Pelvic evisceration, rad hysterectomy & rad vulvectomy w/o CC/MCC
717736
Uterine & adnexa proc for ovarian or adnexal malignancy w MCC
754737
Uterine & adnexa proc for ovarian or adnexal malignancy w CC
755738
Uterine & adnexa proc for ovarian or adnexal malignancy w/o CC/MCC
756( print page 23605)740
Uterine, adnexa proc for non-ovarian/adnexal malig w CC
739741
Uterine, adnexa proc for non-ovarian/adnexal malig w/o CC/MCC
739742
Uterine & adnexa proc for non-malignancy w CC/MCC
755743
Uterine & adnexa proc for non-malignancy w/o CC/MCC
756745
D&C, conization, laparascopy & tubal interruption w/o CC/MCC
744747
Vagina, cervix & vulva procedures w/o CC/MCC
746748
Female reproductive system reconstructive procedures
749750
Other female reproductive system O.R. procedures w/o CC/MCC
749760
Menstrual & other female reproductive system disorders w CC/MCC
744761
Menstrual & other female reproductive system disorders w/o CC/MCC
744765
Cesarean section w CC/MCC
744766
Cesarean section w/o CC/MCC
744767
Vaginal delivery w sterilization &/or D&C
744768
Vaginal delivery w O.R. proc except steril &/or D&C
744769
Postpartum & post abortion diagnoses w O.R. procedure
744770
Abortion w D&C, aspiration curettage or hysterotomy
744774
Vaginal delivery w complicating diagnoses
744775
Vaginal delivery w/o complicating diagnoses
744776
Postpartum & post abortion diagnoses w/o O.R. procedure
744777
Ectopic pregnancy
744778
Threatened abortion
759779
Abortion w/o D&C
759780
False labor
759782
Other antepartum diagnoses w/o medical complications
781789
Neonates, died or transferred to another acute care facility
781790
Extreme immaturity or respiratory distress syndrome, neonate
781791
Prematurity w major problems
781792
Prematurity w/o major problems
781793
Full term neonate w major problems
781794
Neonate w other significant problems
781795
Normal newborn
781799
Splenectomy w MCC
800801
Splenectomy w/o CC/MCC
800803
Other O.R. proc of the blood & blood forming organs w CC
802804
Other O.R. proc of the blood & blood forming organs w/o CC/MCC
802820
Lymphoma & leukemia w major O.R. procedure w MCC
823821
Lymphoma & leukemia w major O.R. procedure w CC
824822
Lymphoma & leukemia w major O.R. procedure w/o CC/MCC
824825
Lymphoma & non-acute leukemia w other O.R. proc w/o CC/MCC
824828
Myeloprolif disord or poorly diff neopl w maj O.R. proc w/o CC/MCC
827830
Myeloprolif disord or poorly diff neopl w other O.R. proc w/o CC/MCC
829837
Chemo w acute leukemia as sdx or w high dose chemo agent w MCC
829838
Chemo w acute leukemia as sdx or w high dose chemo agent w CC
829839
Chemo w acute leukemia as sdx or w high dose chemo agent w/o CC/MCC
829848
Chemotherapy w/o acute leukemia as secondary diagnosis w/o CC/MCC
847887
Other mental disorder diagnoses
881894
Alcohol/drug abuse or dependence, left ama
881915
Allergic reactions w MCC
918916
Allergic reactions w/o MCC
918955
Craniotomy for multiple significant trauma
26956
Limb reattachment, hip & femur proc for multiple significant trauma
482959
Other O.R. procedures for multiple significant trauma w/o CC/MCC
958986
Prostatic O.R. procedure unrelated to principal diagnosis w/o CC/MCC
985
 To illustrate this methodology for determining the proposed relative weights for the proposed MS-LTC-DRGs with no LTCH cases, we are providing the following example, which refers to the proposed no-volume MS-LTC-DRGs crosswalk information for FY 2009 provided in the chart above. *Example:*
                         There were no cases in the FY 2007 MedPAR file used for this proposed rule for proposed MS-LTC-DRG 61 (Acute ischemic stroke w use of thrombolytic agent w MCC). We determined that MS-LTC-DRG 70 (Nonspecific cebrovascular disorders w MCC) is similar clinically and based on resource use to proposed MS-LTC-DRG 61. Therefore, we are proposing to assign the same proposed relative weight of proposed MS-LTC-DRG 70 of 0.8718 for FY 2009 to proposed MS-LTC-DRG 61 (Table 11 of the Addendum of this proposed rule). Furthermore, for FY 2009, consistent with our historical relative weight methodology, we are proposing to establish MS-LTC-DRG relative weights of 0.0000 for the following proposed transplant MS-LTC-DRGs: Heart Transplant or Implant of Heart Assist System with MCC (MS-LTC-DRG 1); Heart Transplant or Implant of Heart Assist System without MCC (MS-LTC-DRG 2); Liver Transplant with MCC or Intestinal Transplant (MS-LTC-DRG 5); 
                        ( print page 23606)
                        Liver Transplant without MCC (MS-LTC-DRG 6); Lung Transplant (MS-LTC-DRG 7); Simultaneous Pancreas/Kidney Transplant (MS-LTC-DRG 8); Pancreas Transplant (MS-LTC-DRG 10); and Kidney Transplant (MS-LTC-DRG 652). This is because Medicare will only cover these procedures if they are performed at a hospital that has been certified for the specific procedures by Medicare and presently no LTCH has been so certified. Based on our research, we found that most LTCHs only perform minor surgeries, such as minor small and large bowel procedures, to the extent any surgeries are performed at all. Given the extensive criteria that must be met to become certified as a transplant center for Medicare, we believe it is unlikely that any LTCHs will become certified as a transplant center. In fact, in the more than 20 years since the implementation of the IPPS, there has never been a LTCH that even expressed an interest in becoming a transplant center. If in the future a LTCH applies for certification as a Medicare-approved transplant center, we believe that the application and approval procedure would allow sufficient time for us to determine appropriate weights for the MS-LTC-DRGs affected. At the present time, we would only include these eight proposed transplant MS-LTC-DRGs in the GROUPER program for administrative purposes only. Because we use the same GROUPER program for LTCHs as is used under the IPPS, removing these proposed MS-LTC-DRGs would be administratively burdensome. Again, we note that, as this system is dynamic, it is entirely possible that the number of proposed MS-LTC-DRGs with no volume of LTCH cases based on the system will vary in the future. We used the most recent available claims data in the MedPAR file to identify no-volume proposed MS-LTC-DRGs and to determine the proposed relative weights in this proposed rule. *Step 6*
                        —Adjust the proposed FY 2009 MS-LTC-DRG relative weights to account for nonmonotonically increasing relative weights. As discussed in section II.B. of the preamble of this proposed rule, the MS-DRGs (used under the IPPS) on which the MS-LTC-DRGs are based provide a significant improvement in the DRG system's recognition of severity of illness and resource usage. The proposed MS-DRGs contain base DRGs that have been subdivided into one, two, or three severity levels. Where there are three severity levels, the most severe level has at least one code that is referred to as an MCC. The next lower severity level contains cases with at least one code that is a CC. Those cases without a MCC or a CC are referred to as without CC/MCC. When data did not support the creation of three severity levels, the base was divided into either two levels or the base was not subdivided. The two-level subdivisions could consist of the CC/MCC and the without CC/MCC. Alternatively, the other type of two level subdivision could consist of the MCC and without MCC. In those base MS-LTC-DRGs that are split into either two or three severity levels, cases classified into the “without CC/MCC” MS-LTC-DRG are expected to have a lower resource use (and lower costs) than the “with CC/MCC” MS-LTC-DRG (in the case of a two-level split) or the “with CC” and “with MCC” MS-LTC-DRGs (in the case of a three-level split). That is, theoretically, cases that are more severe typically require greater expenditure of medical care resources and will result in higher average charges. Therefore, in the three severity levels, relative weights should increase by severity, from lowest to highest. If the relative weights do not increase (that is, if within a base MS-LTC-DRG, a MS-LTC-DRG with MCC has a lower relative weight than one with CC, or the MS-LTC-DRG without CC/MCC has a higher relative weight than either of the others, they are nonmonotonic). We continue to believe that utilizing nonmonotonic relative weights to adjust Medicare payments would result in inappropriate payments. Consequently, in general, we are proposing to combine proposed MS-LTC-DRG severity levels within a base MS-LTC-DRG for the purpose of computing a relative weight when necessary to ensure that monotonicity is maintained. In determining the proposed FY 2009 MS-LTC-DRG relative weights in this proposed rule, in general, we are proposing to use the same methodology to adjust for nonmonotonicity that we used to determine the FY 2008 MS-LTC-DRG relative weights in the FY 2008 IPPS final rule with comment (72 FR 47293 through 47295). However, as noted above, we are taking this opportunity to refine our description to more precisely explain our methodology for determining the MS-LTC-DRG relative weights in this proposed rule. Specifically, in determining the proposed FY 2009 MS-LTC-DRG relative weights in this proposed rule, under each of the example scenarios provided below, we would combine severity levels within a base MS-LTC-DRG as follows: The first example of nonmonotonically increasing relative weights for a MS-LTC-DRG pertains to a base MS-LTC-DRG with a three-level split and each of the three levels has 25 or more LTCH cases and, therefore, none of those MS-LTC-DRGs is assigned to one of the five low-volume quintiles. In this proposed rule, if nonmonotonicity is detected in the proposed relative weights of the proposed MS-LTC-DRGs in adjacent severity levels (for example, the proposed relative weight of the “with MCC” (the highest severity level) is less than the “with CC” (the middle level), or the “with CC” is less than the “without CC/MCC”), we would combine the nonmonotonic adjacent proposed MS-LTC-DRGs and re-determine a proposed relative weight based on the case-weighted average of the combined LTCH cases of the nonmonotonic proposed MS-LTC-DRGs. The case-weighted average charge is calculated by dividing the total charges for all LTCH cases in both severity levels by the total number of LTCH cases for both proposed MS-LTC-DRGs. The same proposed relative weight would be assigned to both affected levels of the base MS-LTC-DRG. If nonmonotonicity remains an issue because the above process results in a proposed relative weight that is still nonmonotonic to the remaining proposed MS-LTC-DRG relative weight within the base MS-LTC-DRG, we would combine all three of the severity levels to redetermine the proposed relative weights based on the case-weighted average charge of the combined severity levels. This same proposed relative weight is then assigned to each of the proposed MS-LTC-DRGs in that base MS-LTC-DRG. A second example of nonmonotonically increasing relative weights for a base MS-LTC-DRG pertains to the situation where there are three severity levels and one or more of the severity levels within a base MS-LTC-DRG has less than 25 LTCH cases (that is, low-volume). In this proposed rule, if nonmonotonicity occurs in the case where either the highest or lowest severity level (“with MCC” or “without CC/MCC”) has 25 LTCH cases or more and the other two severity levels are low-volume (and therefore the other two severity levels would otherwise be assigned the proposed relative weight of the applicable proposed low-volume quintile(s)), we would combine the data for the cases in the two adjacent proposed low-volume MS-LTC-DRGs for the purpose of determining a proposed relative weight. If the combination results in at least 25 cases, 
                        ( print page 23607)
                        we re-determine one proposed relative weight based on the case-weighted average charge of the combined severity levels and assign this same proposed relative weight to each of the severity levels. If the combination results in less than 25 cases, based on the case-weighted average charge of the combined proposed low-volume MS-LTC-DRGs, both proposed MS-LTC-DRGs would be assigned to the appropriate proposed low-volume quintile (discussed above in section II.I.3.e. of this preamble) based on the case-weighted average charge of the combined proposed low-volume MS-LTC-DRGs. Then the proposed relative weight of the affected proposed low-volume quintile would be redetermined and that proposed relative weight would be assigned to each of the affected severity levels (and all of the proposed MS-LTC-DRGs in the affected proposed low-volume quintile). If nonmonotonicity persists, we would combine all three severity levels and redetermine one proposed relative weight based on the case-weighted average charge of the combined severity levels and this same proposed relative weight would be assigned to each of the three levels. Similarly, in nonmonotonic cases where the middle level has 25 cases or more but either or both of the lowest or highest severity level has less than 25 cases (that is, low volume), we would combine the nonmonotonic proposed low-volume MS-LTC-DRG with the middle level proposed MS-LTC-DRG of the base MS-LTC-DRG. We would redetermine one proposed relative weight based on the case-weighted average charge of the combined severity levels and assign this same proposed relative weight to each of the affected proposed MS-LTC-DRGs. If nonmonotonicity persists, we would combine all three levels for the purpose of redetermining a proposed relative weight based on the case-weighted average charge of the combined severity levels, and assign that proposed relative weight to each of the three severity levels. In the case where all three severity levels in the base MS-LTC-DRGs are proposed low-volume MS-LTC-DRGs and two of the severity levels are nonmonotonic in relation to each other, we would combine the two adjacent nonmonotonic severity levels. If that combination results in less than 25 cases, both proposed low-volume MS-LTC-DRGs would be assigned to the appropriate proposed low-volume quintile (discussed above in section II.I.3.e. of this preamble) based on the case-weighted average charge of the combined proposed low-volume MS-LTC-DRGs. Then the proposed relative weight of the affected proposed low-volume quintile would be redetermined and that proposed relative weight would be assigned to each of the affected severity levels (and all of the proposed MS-LTC-DRGs in the affected proposed low-volume quintile). If the nonmonotonicity persists, we would combine all three levels of that base MS-LTC-DRG for the purpose of redetermining a proposed relative weight based on the case-weighted average charge of the combined severity levels, and assign that proposed relative weight to each of the three severity levels. If that combination of all three severity levels results in less than 25 cases, we would assign that “combined” base MS-LTC-DRG to the appropriate proposed low-volume quintile based on the case-weighted average charge of the combined proposed low-volume MS-LTC-DRGs. Then the proposed relative weight of the affected proposed low-volume quintile would be redetermined and that proposed relative weight would be assigned to each of the affected severity levels (and all of the proposed MS-LTC-DRGs in the affected proposed low-volume quintile). Another example of nonmonotonicity involves a base MS-LTC-DRG with three severity levels where at least one of the severity levels has no cases. As discussed above in greater detail in Step 5, based on resource use intensity and clinical similarity, we propose to cross-walk a proposed no-volume MS-LTC-DRG to a proposed MS-LTC-DRG that has at least one case. Under our proposed methodology for the treatment of proposed no-volume MS-LTC-DRGs, the proposed no-volume MS-LTC-DRG would be assigned the same proposed relative weight as the proposed MS-LTC-DRG to which the proposed no-volume MS-LTC-DRG is cross-walked. For many proposed no-volume MS-LTC-DRGs, as shown in the chart above in Step 5, the application of our proposed methodology results in a proposed cross-walk MS-LTC-DRG that is the adjacent severity level in the same base MS-LTC-DRG. Consequently, in most instances, the proposed no-volume MS-LTC-DRG and the adjacent proposed MS-LTC-DRG to which it is cross-walked would not result in nonmonotonicity because both of these severity levels would have the same proposed relative weight. (In this proposed rule, under our proposed methodology for the treatment of proposed no-volume MS-LTC-DRGs, in the case where the proposed no-volume MS-LTC-DRG is either the highest or lowest severity level, the proposed cross-walk MS-LTC-DRG would be the middle level (“with CC”) within the same base MS-LTC-DRG, and therefore the proposed no-volume MS-LTC-DRG (either the “with MCC” or the “without CC/MCC”) and the proposed cross-walk MS-LTC-DRG (the “with CC”) would have the same proposed relative weight. Consequently, no adjustment for monotonicity would be necessary.) However, if our proposed methodology for determining proposed relative weights for proposed no-volume MS-LTC-DRGs results in nonmonotonicity with the third severity level in the base-MS-LTC-DRG, all three severity levels would be combined for the purpose of redetermining one proposed relative weight based on the case-weighted average charge of the combined severity levels. This same proposed relative weight would be assigned to each of the three severity levels in the base MS-LTC-DRG. Thus far in the discussion, we have presented examples of nonmonotonicity in a base MS-LTC-DRG that has three severity levels. We would apply the same process where the base MS-LTC-DRG contains only two severity levels. For example, if nonmonotonicity occurs in a base MS-LTC-DRG with two severity levels (that is, the proposed relative weight of the higher severity level is less than the lower severity level), where both of the proposed MS-LTC-DRGs have at least 25 cases or where one or both of the proposed MS-LTC-DRGs is low volume (that is, less than 25 cases), we would combine the two proposed MS-LTC-DRGs of that base MS-LTC-DRG for the purpose of redetermining a proposed relative weight based on the combined case-weighted average charge for both severity levels. This same proposed relative weight would be assigned to each of the two severity levels in the base MS-LTC-DRG. Specifically, if the combination of the two severity levels would result in at least 25 cases, we would redetermine one proposed relative weight based on the case-weighted average charge and assign that proposed relative weight to each of the two proposed MS-LTC-DRGs. If the combination results in less than 25 cases, we would assign both proposed MS-LTC-DRGs to the appropriate proposed low-volume quintile (discussed above in section II.I.3.e. of this preamble) based on their combined case-weighted average charge. Then the proposed relative weight of the affected proposed low-volume quintile would be redetermined and that proposed relative 
                        ( print page 23608)
                        weight would be assigned to each of the affected severity levels. *Step 7*
                        —Calculate the proposed FY 2009 budget neutrality factor. As we established in the RY 2008 LTCH PPS final rule (72 FR 26882), under the broad authority conferred upon the Secretary under section 123 of Pub. L. 106-113 as amended by section 307(b) of Pub. L. 106-554 to develop the LTCH PPS, beginning with the MS-LTC-DRG update for FY 2008, the annual update to the MS-LTC-DRG classifications and relative weights will be done in a budget neutral manner such that estimated aggregate LTCH PPS payments would be unaffected, that is, would be neither greater than nor less than the estimated aggregate LTCH PPS payments that would have been made without the MS-LTC-DRG classification and relative weight changes. Specifically, in that same final rule, we established under § 412.517(b) that the annual update to the MS-LTC-DRG classifications and relative weights be done in a budget neutral manner. For a detailed discussion on the establishment of the requirement to update the MS-LTC-DRG classifications and relative weights in a budget neutral manner, we refer readers to the RY 2008 LTCH PPS final rule (72 FR 26880 through 26884). Updating the MS-LTC-DRGs in a budget neutral manner results in an annual update to the individual MS-LTC-DRG classifications and relative weights based on the most recent available data to reflect changes in relative LTCH resource use. To accomplish this, the MS-LTC-DRG relative weights are uniformly adjusted to ensure that estimated aggregate payments under the LTCH PPS would not be affected (that is, decreased or increased). Consistent with that provision, we are proposing to update the MS-LTC-DRG classifications and relative weights for FY 2009 based on the most recent available data and include a proposed budget neutrality adjustment that would be applied in determining the proposed MS-LTC-DRG relative weights. To ensure budget neutrality in updating the proposed MS-LTC-DRG classifications and proposed relative weights under § 412.517(b), consistent with the budget neutrality methodology we established in the FY 2008 IPPS final rule with comment period (72 FR 47295 through 47296), in determining the proposed budget neutrality adjustment for FY 2009 in this proposed rule, we are proposing to use a method that is similar to the methodology used under the IPPS. Specifically, for FY 2009, after recalibrating the proposed MS-LTC-DRG relative weights as we do under the methodology as described in detail in Steps 1 through 6 above, we would calculate and apply a normalization factor to those relative weights to ensure that estimated payments are not influenced by changes in the composition of case types or the changes being proposed to the classification system. That is, the proposed normalization adjustment is intended to ensure that the recalibration of the proposed MS-LTC-DRG relative weights (that is, the process itself) neither increases nor decreases total estimated payments. To calculate the proposed normalization factor for FY 2009, we would use the following steps: (1) We use the most recent available claims data (FY 2007) and the proposed MS-LTC-DRG relative weights (determined above in Steps 1 through 6 above) to calculate the average CMI; (2) we group the same claims data (FY 2007) using the FY 2008 GROUPER (Version 25.0) and FY 2008 relative weights (established in the FY 2008 IPPS final rule with comment period (72 FR 47295 through 47296)) and calculate the average CMI; and (3), we compute the ratio of these average CMIs by dividing the average CMI determined in step (2) by the average CMI determined in step (1). In determining the proposed MS-LTC-DRG relative weights for FY 2009, based on the latest available LTCH claims data, the normalization factor is estimated as 1.038266, which would be applied in determining each proposed MS-LTC-DRG relative weight. That is, each proposed MS-LTC-DRG relative weight would be multiplied by 1.038266 in the first step of the budget neutrality process. Accordingly, the proposed relative weights in Table 11 in the Addendum of this proposed rule reflect this proposed normalization factor. We also ensure that estimated aggregate LTCH PPS payments (based on the most recent available LTCH claims data) after reclassification and recalibration (the new proposed FY 2009 MS-LTC-DRG classifications and relative weights) are equal to estimated aggregate LTCH PPS payments (for the same most recent available LTCH claims data) before reclassification and recalibration (the existing FY 2008 MS-DRG classifications and relative weights). Therefore, we would calculate the proposed budget neutrality adjustment factor by simulating estimated total payments under both sets of GROUPERs and relative weights using current LTCH PPS payment policies (RY 2008) and the most recent available claims data (from the FY 2007 MedPAR file). Accordingly, we are proposing to use RY 2008 LTCH PPS rates and policies in determining the proposed FY 2009 budget neutrality adjustment in this proposed rule, using the following steps: (1) We simulate estimated total payments using the normalized proposed relative weights under GROUPER Version 26.0 (as described above); (2) we simulate estimated total payments using the FY 2008 GROUPER (Version 25.0) and FY 2008 MS-LTC-DRG relative weights (as established in the FY 2008 IPPS final rule (72 FR  47295 through 47296)); (3) we calculate the ratio of these estimated total payments by dividing the estimated total payments determined in step (2) by the estimated total payments determined in step (1). Then, each of the normalized proposed relative weights is multiplied by the proposed budget neutrality factor to determine the budget neutral proposed relative weight for each proposed MS-LTC-DRG. Accordingly, in determining the proposed MS-LTC-DRG relative weights for FY 2009 in this proposed rule, based on the most recent available LTCH claims data, we are proposing a budget neutrality factor of 0.99965, which would be applied to the normalized proposed relative weights (described above). The proposed FY 2009 MS-LTC-DRG relative weights in Table 11 in the Addendum of this proposed rule reflect this proposed budget neutrality factor. Furthermore, we expect that we will have established payments rates and policies for RY 2009 prior to the development of the FY 2009 IPPS final rule. Therefore, for purposes of determining the FY 2009 budget neutrality factor in the final rule, we are proposing that we would simulate estimated total payments using the most recent LTCH PPS payment policies and LTCH claims data that are available at that time. Table 11 in the Addendum to this proposed rule lists the proposed MS-LTC-DRGs and their respective proposed budget neutral relative weights, geometric mean length of stay, and five-sixths of the geometric mean length of stay (used in the determination of short-stay outlier payments under § 412.529) for FY 2009. J. Proposed Add-On Payments for New Services and Technologies 1. Background Sections 1886(d)(5)(K) and (L) of the Act establish a process of identifying and ensuring adequate payment for new medical services and technologies (sometimes collectively referred to in this section as “new technologies”) under the IPPS. Section 1886(d)(5)(K)(vi) of the Act specifies 
                        ( print page 23609)
                        that a medical service or technology will be considered new if it meets criteria established by the Secretary after notice and opportunity for public comment. Section 1886(d)(5)(K)(ii)(I) of the Act specifies that the process must apply to a new medical service or technology if, “based on the estimated costs incurred with respect to discharges involving such service or technology, the DRG prospective payment rate otherwise applicable to such discharges under this subsection is inadequate.” The regulations implementing this provision establish three criteria for new medical services and technologies to receive an additional payment. First, 42CFR412.87(b)(2) states that a specific medical service or technology will be considered new for purposes of new medical service or technology add-on payments until such time as Medicare data are available to fully reflect the cost of the technology in the DRG weights through recalibration. Typically, there is a lag of 2 to 3 years from the point a new medical service or technology is first introduced on the market (generally on the date that the technology receives FDA approval/clearance) and when data reflecting the use of the medical service or technology are used to calculate the DRG weights. For example, data from discharges occurring during FY 2007 are used to calculate the FY 2009 DRG weights in this proposed rule. Section 412.87(b)(2) of our existing regulations provides that “a medical service or technology may be considered new within 2 or 3 years after the point at which data begin to become available reflecting the ICD-9-CM code assigned to the new medical service or technology (depending on when a new code is assigned and data on the new medical service or technology become available for DRG recalibration). After CMS has recalibrated the DRGs based on available data to reflect the costs of an otherwise new medical service or technology, the medical service or technology will no longer be considered “new” under the criterion for this section.” The 2-year to 3-year period during which a medical service or technology can be considered new would ordinarily begin on the date on which the medical service or technology received FDA approval or clearance. (We note that, for purposes of this section of the proposed rule, we refer to both FDA approval and FDA clearance as FDA “approval.”) However, in some cases, initially there may be no Medicare data available for the new service or technology following FDA approval. For example, the newness period could extend beyond the 2-year to 3-year period after FDA approval is received in cases where the product initially was generally unavailable to Medicare patients following FDA approval, such as in the case of a national noncoverage determination, or if there was some documented delay in bringing the product onto the market after that approval (for instance, component production or drug production has been postponed following FDA approval due to shelf life concerns or manufacturing issues). After the DRGs have been recalibrated to reflect the costs of an otherwise new medical service or technology, the medical service or technology is no longer eligible for special add-on payment for new medical services or technologies (§ 412.87(b)(2)). For example, an approved new technology that received FDA approval in October 2007 and entered the market at that time may be eligible to receive add-on payments as a new technology for discharges occurring before October 1, 2010 (the start of FY 2011). Because the FY 2011 DRG weights would be calculated using FY 2009 MedPAR data, the costs of such a new technology would be fully reflected in the FY 2011 DRG weights. Therefore, the new technology would no longer be eligible to receive add-on payments as a new technology for discharges occurring in FY 2011 and thereafter. Section 412.87(b)(3) further provides that, to be eligible for the add-on payment for new medical services or technologies, the DRG prospective payment rate otherwise applicable to the discharge involving the new medical services or technologies must be assessed for adequacy. Under the cost criterion, to assess whether a new technology would be inadequately paid under the applicable DRG-prospective payment rate, we evaluate whether the charges for cases involving the new technology exceed certain threshold amounts. In the FY 2004 IPPS final rule (68 FR 45385), we established the threshold at the geometric mean standardized charge for all cases in the DRG plus 75 percent of 1 standard deviation above the geometric mean standardized charge (based on the logarithmic values of the charges and converted back to charges) for all cases in the DRG to which the new medical service or technology is assigned (or the case-weighted average of all relevant DRGs, if the new medical service or technology occurs in more than one DRG). However, section 503(b)(1) of Pub. L. 108-173 amended section 1886(d)(5)(K)(ii)(I) of the Act to provide that, beginning in FY 2005, CMS will apply “a threshold * * * that is the lesser of 75 percent of the standardized amount (increased to reflect the difference between cost and charges) or 75 percent of one standard deviation for the diagnosis-related group involved.” (We refer readers to section IV.D. of the preamble to the FY 2005 IPPS final rule (69 FR 49084) for a discussion of the revision of the regulations to incorporate the change made by section 503(b)(1) of Pub. L. 108-173.) Table 10 in section XIX. of the interim final rule with comment period published in the 
                        **Federal Register**
                         on November 27, 2007, contained the final thresholds that are being used to evaluate applications for new technology add-on payments for FY 2009 (72 FR 66888 through 66892). An applicant must demonstrate that the cost threshold is met using information from inpatient hospital claims. With regard to the issue of whether the HIPAA Privacy Rule at 45 CFR Parts 160 and 164 applies to claims information that providers submit with applications for new technology add-on payments, we addressed this issue in the September 7, 2001 final rule that established the new technology add-on payment regulations (66 FR 46917). In the preamble to that final rule, we explained that health plans, including Medicare, and providers that conduct certain transactions electronically, including the hospitals that would be receiving payment under the FY 2001 IPPS final rule, are required to comply with the HIPAA Privacy Rule. We further explained how such entities could meet the applicable HIPAA requirements by discussing how the HIPAA Privacy Rule permitted providers to share with health plans information needed to ensure correct payment, if they had obtained consent from the patient to use that patient's data for treatment, payment, or health care operations. We also explained that because the information to be provided within applications for new technology add-on payment would be needed to ensure correct payment, no additional consent would be required. The HHS Office of Civil Rights has since amended the HIPAA Privacy Rule, but the results remain. The HIPAA Privacy Rule no longer requires covered entities to obtain consent from patients to use or disclose protected health information for treatment, payment, or health care operations, and expressly permits such entities to use or to disclose protected health information for any of these purposes. (We refer readers to 45 CFR 164.502(a)(1)(ii), and 164.506(c)(1) and (c)(3), and the Standards for Privacy of Individually Identifiable Health Information published in the 
                        **Federal 
                            ( print page 23610)
                            Register**
                         on August 14, 2002, for a full discussion of changes in consent requirements.) Section 412.87(b)(1) of our existing regulations provides that a new technology is an appropriate candidate for an additional payment when it represents “an advance that substantially improves, relative to technologies previously available, the diagnosis or treatment of Medicare beneficiaries.” For example, a new technology represents a substantial clinical improvement when it reduces mortality, decreases the number of hospitalizations or physician visits, or reduces recovery time compared to the technologies previously available. (We refer readers to the September 7, 2001 final rule for a complete discussion of this criterion (66 FR 46902).) The new medical service or technology add-on payment policy under the IPPS provides additional payments for cases with relatively high costs involving eligible new medical services or technologies while preserving some of the incentives inherent under an average-based prospective payment system. The payment mechanism is based on the cost to hospitals for the new medical service or technology. Under § 412.88, if the costs of the discharge (determined by applying CCRs as described in § 412.84(h)) exceed the full DRG payment, Medicare will make an add-on payment equal to the lesser of: (1) 50 percent of the estimated costs of the new technology (if the estimated costs for the case including the new technology exceed Medicare's payment) or (2) 50 percent of the difference between the full DRG payment and the hospital's estimated cost for the case. If the amount by which the actual costs of a new medical service or technology case exceeds the full DRG payment (including payments for IME and DSH, but excluding outlier payments) by more than the 50-percent marginal cost factor, Medicare payment is limited to the full DRG payment plus 50 percent of the estimated costs of the new technology. Section 1886(d)(4)(C)(iii) of the Act requires that the adjustments to annual DRG classifications and relative weights must be made in a manner that ensures that aggregate payments to hospitals are not affected. Therefore, in the past, we accounted for projected payments under the new medical service and technology provision during the upcoming fiscal year at the same time we estimated the payment effect of changes to the DRG classifications and recalibration. The impact of additional payments under this provision was then included in the budget neutrality factor, which was applied to the standardized amounts and the hospital-specific amounts. However, section 503(d)(2) of Pub. L. 108-173 provides that there shall be no reduction or adjustment in aggregate payments under the IPPS due to add-on payments for new medical services and technologies. Therefore, add-on payments for new medical services or technologies for FY 2005 and later years have not been budget neutral. Applicants for add-on payments for new medical services or technologies for FY 2010 must submit a formal request, including a full description of the clinical applications of the medical service or technology and the results of any clinical evaluations demonstrating that the new medical service or technology represents a substantial clinical improvement, along with a significant sample of data to demonstrate the medical service or technology meets the high-cost threshold. Complete application information, along with final deadlines for submitting a full application, will be available on our Web site at: 
                        *http://www.cms.hhs.gov/​AcuteInpatientPPS/​08_​newtech.asp#TopOfPage.*
                         To allow interested parties to identify the new medical services or technologies under review before the publication of the proposed rule for FY 2010, the Web site will also list the tracking forms completed by each applicant. The Council on Technology and Innovation (CTI) at CMS oversees the agency's cross-cutting priority on coordinating coverage, coding and payment processes for Medicare with respect to new technologies and procedures, including new drug therapies, as well as promoting the exchange of information on new technologies between CMS  and other entities.  The CTI, composed of senior CMS staff and clinicians, was established under section 942(a) of Pub. L. 108-173.  It is co-chaired by the Director of the Center for Medicare Management (CMM), who is also designated as the CTI's Executive Coordinator, and the Director of the Office of Clinical Standards and Quality (OCSQ). The specific processes for coverage, coding, and payment are implemented by CMM, OCSQ, and the local claims-payment contractors (in the case of local coverage and payment decisions). The CTI supplements rather than replaces these processes by working to assure that all of these activities reflect the agency-wide priority to promote high-quality, innovative care, and at the same time to streamline, accelerate, and improve coordination of these processes to ensure that they remain up to date as new issues arise. To achieve its goals, the CTI works to streamline and create a more transparent coding and payment process, improve the quality of medical decisions, and speed patient access to effective new treatments. It is also dedicated to supporting better decisions by patients and doctors in using Medicare-covered services through the promotion of better evidence development, which is critical for improving the quality of care for Medicare beneficiaries. The agency plans to continue its Open Door forums with stakeholders who are interested in CTI's initiatives. In addition, to improve understanding of CMS processes for coverage, coding, and payment and how to access them, the CTI is developing an “innovator's guide” to these processes. This guide will, for example, outline regulation cycles and application deadlines. The intent is to consolidate this information, much of which is already available in a variety of CMS documents and in various places on CMS's Web site, in a user-friendly format. In the meantime, we invite any product developers with specific issues involving the agency to contact us early in the process of product development if they have questions or concerns about the evidence that would be needed later in the development process for the agency's coverage decisions for Medicare. The CTI aims to provide information on CTI activities to stakeholders, including Medicare beneficiaries, advocates, medical product manufacturers, providers, and health policy experts, and other stakeholders with useful information on CTI initiatives. Stakeholders with further questions about Medicare's coverage, coding, and payment processes, or who want further guidance about how they can navigate these processes, can contact the CTI at 
                        *CTI@cms.hhs.gov*
                         or from the “Contact Us” section of the CTI home page (
                        *http://www.cms.hhs.gov/​CouncilonTechInnov/​*). 2. Public Input Before Publication of a Notice of Proposed Rulemaking on Add-On Payments Section 1886(d)(5)(K)(viii) of the Act, as amended by section 503(b)(2) of Pub. L. 108-173, provides for a mechanism for public input before publication of a notice of proposed rulemaking regarding whether a medical service or technology represents a substantial clinical improvement or advancement. The process for evaluating new medical service and technology applications requires the Secretary to—
                        ( print page 23611) Provide, before publication of a proposed rule, for public input regarding whether a new service or technology represents an advance in medical technology that substantially improves the diagnosis or treatment of Medicare beneficiaries;
                    Make public and periodically update a list of the services and technologies for which applications for add-on payments are pending;
                    Accept comments, recommendations, and data from the public regarding whether a service or technology represents a substantial clinical improvement; and
                    Provide, before publication of a proposed rule, for a meeting at which organizations representing hospitals, physicians, manufacturers, and any other interested party may present comments, recommendations, and data regarding whether a new medical service or technology represents a substantial clinical improvement to the clinical staff of CMS. In order to provide an opportunity for public input regarding add-on payments for new medical services and technologies for FY 2009 before publication of the FY 2009 IPPS proposed rule, we published a notice in the 
                        **Federal Register**
                         on December 28, 2007 (72 FR 73845 through 73847), and held a town hall meeting at the CMS Headquarters Office in Baltimore, MD, on February 21, 2008. In the announcement notice for the meeting, we stated that the opinions and alternatives provided during the meeting would assist us in our evaluations of applications by allowing public discussion of the substantial clinical improvement criterion for each of the FY 2009 new medical service and technology add-on payment applications before the publication of the FY 2009 IPPS proposed rule. Approximately 70 individuals attended the town hall meeting in person, while approximately 20 additional participants listened over an open telephone line. Each of the four FY 2009 applicants presented information on its technology, including a focused discussion of data reflecting the substantial clinical improvement aspect of the technology. We received two comments during the town hall meeting, which are summarized below. We considered each applicant's presentation made at the town hall meeting, as well as written comments submitted on each applicant's application, in our evaluation of the new technology add-on applications for FY 2009 in this proposed rule. We have summarized these comments below or, if applicable, indicated that no comments were received at the end of the discussion of each application. *Comment:*
                         One commenter addressed the substantial clinical improvement criterion. A medical device association stated that CMS' interpretation of the statutory criteria for new technology add-on payments is narrow and makes it difficult for potential applicants, especially small manufacturing companies, to qualify for new technology add-on payments. The commenter urged CMS to “deem a device to satisfy the substantial clinical improvement criteria if it was granted a humanitarian device exemption or priority review based on the fact that it represents breakthrough technologies, which offer significant advantages over existing approved alternatives, for which no alternatives exist, or the availability of which is in the best interests of the patients.” In addition, the commenter remarked that this process would simplify CMS' evaluation of applications for new technology add-on payments and would promote access to innovative treatments, as intended by Congress. Although the commenter also made remarks that were unrelated to substantial clinical improvement, because the purpose of the town hall meeting was specifically to discuss substantial clinical improvement of pending new technology applications, those comments are not summarized in this proposed rule. *Response:*
                         With respect to the comment that CMS has a narrow interpretation of the statute that makes it difficult for applicants to meet the statutory criteria for a new technology add-on payment, we note that we have already specifically addressed the issue in the past (71 FR 47997 and 72 FR 47301). In addition, we addressed the comment concerning automatically deeming technologies granted a humanitarian device exemption (HDE) at 72 FR 47302. Further, because the purpose of the new technology town hall meeting was to discuss substantial clinical improvement of pending applications, we are not providing a response to the unrelated comments in this proposed rule. *Comment:*
                         One commenter, a medical technology association, submitted comments in reference to the MS-DRGs and the need to account for complexity as well as severity in making refinements to the DRG classification system. The commenter also made the following comments: CMS should raise the new technology marginal cost factor, adjust the newness policy to begin with the issuance of an ICD-9-CM code instead of the FDA approval date, provide access to the quarterly MedPAR updates, and allow for the use of external data for determining new technology payments (when CMS determines that the external data are unbiased and valid). *Response:*
                         Section 1886(d)(5)(K)(viii) of the Act requires that CMS accept comments, recommendations, and data from the public regarding whether a service or technology represents a substantial clinical improvement. Because the comments above are not related to the substantial clinical improvement criterion of pending applications, we are not providing a response to them in this proposed rule. 3. FY 2009 Status of Technologies Approved for FY 2008 Add-On Payments We did not approve any applications for new technology add-on payments for FY 2008. For additional information, refer to the FY 2008 IPPS final rule with comment period (72 FR 47305 through 47307). 4. FY 2009 Applications for New Technology Add-On Payments We received four applications to be considered for new technology add-on payment for FY 2009. A discussion of each of these applications is presented below. We note that, in the past, we have considered applications that had not yet received FDA approval, but were anticipating FDA approval prior to publication of the IPPS final rule. In such cases, we generally provide a more limited discussion of those technologies in the proposed rule because it is not known if these technologies will meet the newness criterion in time for us to conduct a complete analysis in the final rule. This year, three out of four applicants do not yet have FDA approval. Consequently, we have presented a limited analysis of them in this proposed rule. a. CardioWestTM
                         Temporary Total Artificial Heart System (CardioWestTM
                         TAH-t) SynCardia Systems, Inc. submitted an application for approval of the CardioWestTM
                         temporary Total Artificial Heart system (TAH-t) for new technology add-on payments for FY 2009. The TAH-t is a technology that is used as a bridge to heart transplant device for heart transplant-eligible patients with end-stage biventricular failure. The TAH-t pumps up to 9.5 liters of blood per minute. This high level of perfusion helps improve hemodynamic function in patients, thus making them better heart transplant candidates. 
                        ( print page 23612) The TAH-t was approved by the FDA on October 15, 2004, for use as a bridge to transplant device in cardiac transplant-eligible candidates at risk of imminent death from biventricular failure. The TAH-t is intended to be used in hospital inpatients. Some of the FDA's post-approval requirements include that the manufacturer agree to provide a post-approval study demonstrating that the success of the device at one center can be reproduced at other centers. The study was to include at least 50 patients who will be followed up to 1 year, including (but not limited to) the following endpoints; survival to transplant, adverse events, and device malfunction. Presently, Medicare does not cover artificial heart devices, including the TAH-t. However, on February 01, 2008, CMS proposed to reverse a national noncoverage determination that would extend coverage to this technology within the confines of an FDA-approved clinical study. (To view the proposed National Coverage Determination (NCD), we refer readers to the CMS Web site at 
                        *http://www.cms.hhs.gov/​mcd/​viewdraftdecisionmemo.asp?​from2=​viewdraftdecisionmemo.asp&​id=​211&​.*) Should this proposal be finalized, it would become effective on May 01, 2008. Because Medicare's existing coverage policy with respect to this device has precluded it from being paid for by Medicare, we would not expect the costs associated with this technology to be currently reflected in the data used to determine MS-DRGs relative weights. As we have indicated in the past, although we generally believe that the newness period would begin on the date that FDA approval was granted, in cases where the applicant can demonstrate a documented delay in market availability subsequent to FDA approval, we would consider delaying the start of the newness period. This technology's situation represents one such case. We also note that section 1886(d)(5)(K)(ii)(II) of the Act requires that we provide for the collection of cost data for a new medical service or technology for a period of at least 2 years and no more than 3 years “beginning on the date on which an inpatient hospital code is issued with respect to the service or technology.” Furthermore, the statute specifies that the term “inpatient hospital code” means any code that is used with respect to inpatient hospital services for which payment may be made under the IPPS and includes ICD-9-CM codes and any subsequent revisions. Although the TAH-t has been described by the ICD-9-CM code(s) (described below in the cost threshold discussion) since the time of its FDA approval, because the TAH-t has not been covered under the Medicare program (and, therefore, no Medicare payment has been made for this technology), this code is not “used with respect to inpatient hospital services for which payment” is made under the IPPS, and thus we assume that none of the costs associated with this technology would be reflected in the Medicare claims data used to recalibrate the MS-DRG weights. For this reason, despite its FDA approval date, it appears that this technology would still be eligible to be considered “new” for purposes of the new technology add-on payment if and when the proposal to reverse the national noncoverage determination concerning this technology is finalized. Therefore, based on this information, it appears that the TAH-t would meet the newness criterion on the date that Medicare coverage begins, should the proposed NCD be finalized. In an effort to demonstrate that TAH-t would meet the cost criterion, the applicant submitted data based on 28 actual cases of the TAH-t. The data included 6 cases (or 21.4 percent of cases) from 2005, 13 cases (or 46.5 percent of cases) from 2006, 7 cases (or 25 percent of cases) from 2007, and 2 cases (or 7.1 percent of cases) from 2008. Currently, cases involving the TAH-t are assigned to MS-DRG 215 (Other Heart Assist System Implant). As discussed below in this section, we are proposing to remove the TAH-t from MS-DRG 215 and reassign the TAH-t to MS-DRGs 001 (Heart Transplant or Implant of Heart Assist System with MCC) and 002 (Heart Transplant or Implant of Heart Assist System without MCC). Therefore, to determine if the technology meets the cost criterion, it is appropriate to compare the average standardized charge per case to the thresholds for MS-DRGs 001, 002, and 215 included in Table 10 of the November 27, 2007 interim final rule (72 FR 66888 through 66889). The thresholds for MS-DRGs 001, 002, and 215 from Table 10 are $345,031, $178,142, and $151,824, respectively. Based on the 28 cases the applicant submitted, the average standardized charge per case was $731,632. Because the average standardized charge per case is much greater than the thresholds cited above for MS-DRG 215 (and MS-DRGs 001 and 002, should the proposal to reassign the TAH-t be finalized), the applicant asserted that the TAH-t meets the cost criterion whether or not the costs were analyzed by using either a case-weighted threshold or case-weighted standardized charge per case. In addition to analyzing the costs of actual cases involving the TAH-t, the applicant searched the FY 2006 MedPAR file to identify cases involving patients who would have potentially been eligible to receive the TAH-t. The applicant submitted three different MedPAR analyses. The first MedPAR analysis involved a search for cases using ICD-9-CM diagnosis code 428.0 (Congestive heart failure) in combination with ICD-9-CM procedure code 37.66 (Insertion of implantable heart assist system), and an inpatient hospital length of stay greater than or equal to 60 days. The applicant found two cases that met this criterion, which had an average standardized charge per case of $821,522. The second MedPAR analysis searched for cases with ICD-9-CM diagnosis code 428.0 (Congestive heart failure) and one or more of the following ICD-9-CM procedure codes: 37.51 (Heart transplant), 37.52 (Implantation of total heart replacement system), 37.64 (Removal of heart assist system), 37.66 (Insertion of implantable heart assist system), or 37.68 (Insertion of percutaneous external heart assist device), and a length of stay greater than or equal to 60 days. The applicant found 144 cases that met this criterion, which had an average standardized charge per case of $841,827. The final MedPAR analysis searched for cases with ICD-9-CM procedure code 37.51 (Heart transplant) in combination with one of the following ICD-9-CM procedure codes: 37.52 (Implantation of total heart replacement system), 37.65 (Implantation of external heart system), or 37.66 (Insertion of implantable heart assist system). The applicant found 37 cases that met this criterion, which had an average standardized charge per case of $896,601. Because only two cases met the criterion for the first analysis, consistent with historical practice, we would not consider it to be of statistical significance and, therefore, would not rely upon it to demonstrate whether the TAH-t would meet the cost threshold. However, both of the additional analyses seem to provide an adequate number of cases to demonstrate whether the TAH-t would meet the cost threshold. We assume that none of the costs associated with this technology would be reflected in the MedPAR analyses that the applicant used to demonstrate that the technology would meet the cost criterion. We note that, under all three of the analyses the applicant performed, it identified cases that would have been eligible for the TAH-t, but did not remove charges that 
                        ( print page 23613)
                        were unrelated to the TAH-t, nor did the applicant insert a proxy of charges related to the TAH-t. However, as stated above, the average standardized charge per case is much greater than any of the thresholds for MS-DRGs 001, 002, and 215. Therefore, even if the applicant were to approximate what the costs of cases eligible to receive the TAH-t would have been by removing non-TAH-t associated charges and inserting charges related to the TAH-t, it appears that the average standardized charges per case for cases eligible for the TAH-t would exceed the relevant thresholds from Table 10 (as discussed above) and would therefore appear to meet the cost criterion. We invite public comment on whether TAH-t meets the cost criterion. As noted in section II.G. of this preamble, we are proposing to remove the TAH-t from MS-DRG 215 and reassign the TAH-t to MS-DRGs 001 and 002. As stated earlier, CMS is proposing to reverse a national noncoverage determination that would extend coverage to artificial heart devices within the confines of an FDA-approved clinical study, effective May 1, 2008. If this proposal is finalized, the MCE will require both the procedure code 37.52 (Implantation of total replacement heart system) and the diagnosis code reflecting clinical trial—V70.7 (Examination of participant in clinical trial). As we have previously mentioned, the TAH-t appears to meet the cost thresholds for MS-DRGs 001, 002, and 215. Therefore, its proposed reassignment from MS-DRG 215 to MS-DRGs 001 and 002 should have no material effect on meeting the cost thresholds in MS-DRGs 001 and 002 should the reassignment proposal be finalized. The manufacturer states that the TAH-t is the only mechanical circulatory support device intended as a bridge-to-transplant for patients with irreversible biventricular failure. It also asserts that the TAH-t improves clinical outcomes because it has been shown to reduce mortality in patients who are otherwise in end-stage heart failure. In addition, the manufacturer claims that the TAH-t provides greater hemodynamic stability and end-organ perfusion, thus making patients who receive it better candidates for eventual heart transplant. We welcome comments from the public regarding whether the TAH-t represents a substantial clinical improvement. We did not receive any written comments or public comments at the town hall meeting regarding the substantial clinical improvement aspects of this technology. b. Emphasys Medical Zephyr® Endobronchial Valve (Zephyr® EBV) Emphasys Medical submitted an application for new technology add-on payments for FY 2009 for the Emphasys Medical Zephyr® Endobronchial Valve (Zephyr® EBV). The Zephyr® EBV is intended to treat patients with emphysema by reducing volume in the diseased, hyperinflated portion of the emphysematous lung with fewer risks and complications than with more invasive surgical alternatives. Zephyr® EBV therapy involves placing small, one-way valves in the patients' airways to allow air to flow out of, but not into, the diseased portions of the lung thus reducing the hyperinflation. A typical procedure involves placing three to four valves in the target lobe using a bronchoscope, and the procedure takes approximately 20 to 40 minutes to complete. The Zephyr® EBVs are designed to be relatively easy to place, and are intended to be removable so that, unlike more risky surgical alternatives such as Lung Volume Reduction Surgery (LVRS) or Lung Transplant, the procedure has the potential to be fully reversible. Currently, the Zephyr® EBV has yet to receive approval from the FDA, but the manufacturer indicated to CMS that it expects to receive its FDA approval in the second or third quarter of 2008. Because the technology is not yet approved by the FDA, we will limit our discussion of this technology to data that the applicant submitted, rather than make specific proposals with respect to whether the device would meet the new technology add-on criteria. In an effort to demonstrate that the Zephyr® EBV would meet the cost criterion, the applicant searched the FY 2006 MedPAR file for cases with one of the following ICD-9-CM diagnosis codes: 492.0 (Emphysematous bleb), 492.8 (Other emphysema, NEC), or 496 (Chronic airway obstruction, NEC). Based on the diagnosis codes searched by the applicant, cases of the Zephyr® EBV would be most prevalent in MS-DRGs 190 (Chronic Obstructive Pulmonary Disease with MCC), 191 (Chronic Obstructive Pulmonary Disease with CC), and 192 (Chronic Obstructive Pulmonary Disease without CC/MCC). The applicant found 1,869 cases (or 12.8 percent of cases) in MS-DRG 190, 5,789 cases (or 39.5 percent of cases) in MS-DRG 191, and 6,995 cases (or 47.7 percent of cases) in MS-DRG 192 (which equals a total of 14,653 cases). The average standardized charge per case was $21,567 for MS-DRG 190, $15,494 for MS-DRG 191, and $11,826 for MS-DRG 192. The average standardized charge per case does not include charges related to the Zephyr® EBV; therefore, it is necessary to add the charges related to the device to the average standardized charge per case in evaluating the cost threshold criteria. Although the applicant submitted data related to the estimated cost of the Zephyr® EBV per case, the applicant noted that the cost of the device was proprietary information because the device is not yet available on the open market. The applicant estimates $23,920 in charges related to the Zephyr® EBV (based on a 100 percent charge markup of the cost of the device). In addition to case-weighting the data based on the amount of cases that the applicant found in the FY 2006 MedPAR file, the applicant case-weighted the data based on its own projections of how many Medicare cases it would expect to map to MS-DRGs 190, 191, and 192 in FY 2009. The applicant projects that, 5 percent of the cases would map to MS-DRG 190, 15 percent of the cases would map to MS-DRG 191, and 80 percent of the cases would map to MS-DRG 192. Adding the charges related to the device to the average standardized charge per case (based on the applicant's projected case distribution) resulted in a case-weighted average standardized charge per case of $36,782 ($12,862 plus $23,920). Using the thresholds published in Table 10 (72 FR 66889), the case-weighted threshold for MS-DRGs 190, 191, and 192 was $18,394. Because the case-weighted average standardized charge per case for the applicable MS-DRGs exceed the case-weighted threshold amount, the applicant maintains that the Zephyr® EBV would meet the cost criterion. As noted above, the applicant also performed a case-weighted analysis of the data based on the 14,653 cases the applicant found in the FY 2006 MedPAR file. Based on this analysis, the applicant found that the case-weighted average standardized charge per case ($38,441 based on the 14,653 cases) exceeded the case-weighted threshold ($20,606 based on the 14,653 cases). Based on both analyses described above, it appears that the applicant would meet the cost criterion. We invite public comment on whether Zephyr® EBV meets the cost criterion. The applicant asserts that the Zephyr® EBV is a substantial clinical improvement because it provides a new therapy along the continuum of care for patients with emphysema that offers improvement in lung function over standard medical therapy while incurring significantly less risk than more invasive treatments such as LVRS 
                        ( print page 23614)
                        and lung transplant. Specifically, the applicant submitted data from the ongoing pivotal Endobronchial Valve for Emphysema Palliation (VENT) trial,[14]
                        
                         which compared 220 patients who received EBV treatment to 101 patients who received standard medical therapy, including bronchodilators, steroids, mucolytics, and supplemental oxygen. At 6 months, patients who received the Zephyr® EBV had an average of 7.2 percent and 5.8 percent improvement (compared to standard medical therapy) in the primary effectiveness endpoints of the Forced Expiratory Volume in 1 second test (FEV1), and the 6 Minute Walk Test (6MWT), respectively. Both results were determined by the applicant to be statistically significant. The FEV1 results were determined using the t-test parametric confidence intervals (the p value determined using the one-side t-test adjusted for unequal variance) and the 6MWT results were determined using the Mann-Whitney nonparametric confidence intervals (the p value was calculated using the one-sided Wilcoxon rank sum test). However, the data also showed that patients who received the Zephyr® EBV experienced a number of adverse events, including hemoptyis, pneumonia, respiratory failure, pneumothorax, and COPD exacerbations, as well as valve migrations and expectorations that, in some cases, required repeat bronchoscopy. The manufacturer also submitted the VENT pivotal trial 1-year follow-up data, but has requested that the data not be disclosed because it has not yet been presented publicly nor published in a peer-reviewed journal. While CMS recognizes that the Zephyr® EBV therapy is significantly less risky than LVRS and lung transplant, we are concerned that the benefits as shown in the VENT pivotal trial may not outweigh the risks when compared with medical therapy alone. Further, we note that, according to the applicant, the Zephyr® EBV is intended for use in many patients who are ineligible for LVRS and/or lung transplant (including those too sick to undergo more invasive surgery and those with lower lobe predominant disease distribution), but that certain patients (that is, those with upper lobe predominant disease distribution) could be eligible for either surgery or the Zephyr® EBV. We welcome comments from the public on both the patient population who would be eligible for the technology, and whether the Zephyr® EBV represents a substantial clinical improvement in the treatment of patients with emphysema. We received written comments from the manufacturer and its presenters at the town hall meeting clarifying some questions that were raised at the town hall meeting. Specifically, these commenters explained that, in general, the target population for the Zephyr® EBV device was the same population that could benefit from LVRS, and also includes some patients who were too sick to undergo surgery. The commenters also explained that patients with emphysema with more heterogeneous lung damage were more likely to benefit from the device. We welcome public comments regarding where exactly this technology falls in the continuum of care of patients with emphysema, and for whom the risk/benefit ratio is most favorable. c. Oxiplex® FzioMed, Inc. submitted an application for new technology add-on payments for FY 2009 for Oxiplex®. Oxiplex® is an absorbable, viscoelastic gel made of carboxymethylcellulose (CMC) and polyethylene oxide (PEO) that is intended to be surgically implanted during a posterior discectomy, laminotomy, or laminectomy. The manufacturer asserts that the gel reduces the potential for inflammatory mediators that injure, tether, or antagonize the nerve root in the epidural space by creating an acquiescent, semi-permeable environment to protect against localized debris. These proinflammatory mediators (phospholipase A and nitric oxide), induced or extruded by intervertebral discs, may be responsible for increased pain during these procedures. The manufacturer also asserts that Oxiplex® is a unique material in that it coats tissue, such as the nerve root in the epidural space, to protect the nerve root from the effects of inflammatory mediators originating from either the nucleus pulposus, from blood derived inflammatory cells, or cytokines during the healing process. Oxiplex® is expecting to receive premarket approval from the FDA by June 2008. Because the technology is not yet approved by the FDA, we will limit our discussion of this technology to data that the applicant submitted, rather than make specific proposals with respect to whether the device would meet the new technology add-on payment criteria. With regard to the newness criterion, we are concerned that Oxiplex® may be substantially similar to adhesion barriers that have been on the market for several years. We also note that Oxiplex® has been marketed as an adhesion barrier in other countries outside of the United States. The manufacturer maintains that Oxiplex® is different from adhesion barriers in several ways, including chemical composition, method of action, surgical application (that is, it is applied liberally to the nerve root and surrounding neural tissues as opposed to minimally only to nerve elements), and tissue response (noninflammatory as opposed to inflammatory). We welcome comments from the public on this issue. In an effort to demonstrate that the technology meets the cost criterion, the applicant searched the FY 2006 MedPAR file for cases with ICD-9-CM procedure codes 03.09 (Other exploration and decompression of spinal canal) or 80.51 (Excision of interveterbral disc) that mapped to CMS DRGs 499 and 500 (CMS DRGs 499 and 500 are crosswalked to MS-DRGs 490 and 491 (Back and Neck Procedures except Spinal Fusion with or without CC)). Because these cases do not include charges associated with the technology, the applicant determined it was necessary to add an additional $7,143 in charges to the average standardized charge per case of cases that map to MS-DRGs 490 and 491. (To do this, the applicant used a methodology of inflating the costs of the technology by the average CCR computed by using the average costs and charges for supplies for cases with ICD-9-CM procedure codes 03.09 and 80.51 that map to MS-DRGs 490 and 491). Of the 221,505 cases the applicant found, 95,340 cases (or 43 percent of cases) would map to MS-DRG 490, which has an average standardized charge of $60,301, and 126,165 cases (or 57 percent of cases) would map to MS-DRG 491, which has an average standardized charge per case of $43,888. This resulted in a case-weighted average standardized charge per case of $50,952. The case-weighted threshold for MS-DRGs 490 and 491 was $27,481. Because the case-weighted average standardized charge per case exceeds the case-weighted threshold in MS-DRGs 490 and 491, the applicant maintains that Oxiplex® would meet the cost criterion. We invite public comment on whether Oxiplex® meets the cost criterion. The manufacturer maintains that Oxiplex® is a substantial clinical improvement because it “creates a protective environment around the neural tissue that limits nerve root exposure to post-surgical irritants and damage and thus reduces adverse outcomes associated with Failed Back 
                        ( print page 23615)
                        Surgery Syndrome (FBSS) following surgery.” The manufacturer also claims that the Oxiplex® gel reduces leg and back pain after discectomy, laminectomy, and laminotomy. The manufacturer also asserts that the use of Oxiplex® is consistent with fewer revision surgeries. (During the FDA Investigational Device Exemption (IDE) trial, one Oxiplex® patient required revision surgery compared to six control patients.) However, as we noted previously in this section, we are concerned that Oxiplex® may be substantially similar to adhesion barriers that have been on the market for several years. We are also concerned that even if we were to determine that Oxiplex is not substantially similar to existing adhesion barriers, there may still be insufficient evidence to support the manufacturer's claims that Oxiplex® reduces pain associated with spinal surgery. In addition, we have found no evidence to support the manufacturer's claims regarding mode of action, degree of dural healing, degree of wound healing, and local tissue response such as might be shown in animal studies. We welcome comments from the public regarding whether Oxiplex® represents a substantial clinical improvement. We did not receive any written comments or public comments at the town hall meeting regarding the substantial clinical improvement aspects of this technology. d. TherOx Downstream® System TherOx, Inc. submitted an application for new technology add-on payments for FY 2009 for the TherOx Downstream® System (Downstream® System). The Downstream® System uses SuperSaturatedOxygen Therapy (SSO2) that is designed to limit myocardial necrosis by minimizing microvascular damage in acute myocardial infarction (AMI) patients following intervention with Percutaneous Transluminal Coronary Angioplasty (PTCA), and coronary stent placement by perfusing the affected myocardium with blood that has been supersaturated with oxygen. SSO2 therapy refers to the delivery of superoxygenated arterial blood directly to areas of myocardial tissue that have been reperfused using PTCA and stent placement, but which may still be at risk. The desired effect of SSO2 therapy is to reduce infarct size and thus preserve heart muscle and function. The DownStream® System is the console portion of a disposable cartridge-based system that withdraws a small amount of the patient's arterial blood, mixes it with a small amount of saline, and supersaturates it with oxygen to create highly oxygen-enriched blood. The superoxygenated blood is delivered directly to the infarct-related artery via the TherOx infusion catheter. SSO2 therapy is a catheter laboratory-based procedure. Additional time in the catheter lab area is an average of 100 minutes. The manufacturer claims that the SSO2 therapy duration lasts 90 minutes and requires an additional 10 minutes post-procedure preparation for transfer time. The TherOx Downstream® System is currently not FDA approved; however, the manufacturer states that it expects to receive FDA approval in the second quarter of 2008. Because the technology is not yet approved by the FDA, we will limit our discussion of this technology to data that the applicant submitted, rather than make specific proposals with respect to whether the device would meet the new technology add-on criteria. In an effort to demonstrate that it would meet the cost criterion, the applicant submitted two analyses. The applicant believes that cases that would be eligible for the Downstream® System would most frequently group to MS-DRGs 246 (Percutaneous Cardiovascular Procedure with Drug-Eluting Stent with MCC or 4+Vessels/Stents), 247 (Percutaneous Cardiovascular Procedure with Drug-Eluting Stent without MCC), 248 (Percutaneous Cardiovascular Procedure with Non-Drug-Eluting Stent with MCC or 4+Vessels/Stents), and 249 (Percutaneous Cardiovascular Procedure with Non-Drug-Eluting Stent without MCC). The first analysis used data based on 83 clinical trial patients from 10 clinical sites. Of the 83 cases, 78 were assigned to MS-DRGs 246, 247, 248, or 249. The data showed that 32 of these patients were 65 years old or older. There were 12 cases (or 15.4 percent of cases) in MS-DRG 246, 56 cases (or 71.8 percent of cases) in MS-DRG 247, 2 cases (or 2.6 percent of cases) in MS-DRG 248, and 8 cases (or 10.3 percent of cases) in MS-DRG 249. (The remaining five cases grouped to MS-DRGs that the technology would not frequently group to and therefore are not included in this analysis.) The average standardized charge per case for MS-DRGs 246, 247, 248, and 249 was $66,730, $53,963, $54,977, and $41,594, respectively. The case-weighted average standardized charge per case for the four MS-DRGs listed above is $54,665. Based on the threshold from Table 10 (72 FR 66890), the case-weighted threshold for the four MS-DRGs listed above was $49,303. The applicant also searched the FY 2006 MedPAR file to identify cases that would be eligible for the Downstream® System. The applicant specifically searched for cases with primary ICD-9-CM diagnosis code 410.00 (Acute myocardial infarction of anterolateral wall with episode of care unspecified), 410.01 (Acute myocardial infarction of anterolateral wall with initial episode of care), 410.10 (Acute myocardial infarction of other anterior wall with episode of care unspecified), or 410.11 (Acute myocardial infarction of other anterior wall with initial episode of care) in combination with ICD-9-CM procedure code of 36.06 (Insertion of non-drug-eluting coronary artery stent(s)) or 36.07 (Insertion of drug-eluting coronary artery stent(s)). The applicant's search found 13,527 cases within MS-DRGs 246, 247, 248, and 249 distributed as follows: 2,287 cases (or 16.9 percent of cases) in MS-DRG 246; 9,691 cases (or 71.6 percent of cases) in MS-DRG 247; 402 cases (or 3 percent of cases) in MS-DRG 248; and 1,147 cases (or 8.5 percent of cases) in MS-DRG 249. Not including the charges associated with the technology, the geometric mean standardized charge per case for MS-DRGs 246, 247, 248, and 249 was $59,631, $42,357, $49,718 and $37,446, respectively. Therefore, based on this analysis, the total case-weighted geometric mean standardized charge per case across these MS-DRGs was $45,080. The applicant estimated that it was necessary to add an additional $21,620 in charges to the total case-weighted geometric mean standardized charge per case. The applicant included charges for supplies and tests related to the technology, charges for 100 minutes of additional procedure time in the catheter laboratory and charges for the technology itself in the additional charge amount referenced above. The inclusion of these charges would result in a total case-weighted geometric mean standardized charge per case of $66,700. The case-weighted threshold for MS-DRGs 246, 247, 248, and 249 (from Table 10 (72 FR 66889)) was $49,714. Because the total case-weighted average standardized charge per case from the first analysis and the case-weighted geometric mean standardized charge per case from the second analysis exceeds the applicable case-weighted threshold, the applicant maintains the Downstream® System would meet the cost criterion. We invite public comment on whether Downstream® System meets the cost criterion. The applicant asserts that the Downstream® System is a substantial clinical improvement because it reduces infarct size in acute AMI where PTCA and stent placement have also been performed. Data was submitted from the Acute Myocardial Infarction Hyperbaric 
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                        Oxygen Treatment (AMIHOT) II trial,  which was presented at the October 2007 Transcatheter Cardiovascular Therapeutics conference, but has not been published in peer reviewed literature, that showed an average of 6.5 percent reduction in infarct size as measured with Tc-99m Sestamibi imaging in patients who received supersaturated oxygen therapy. We note that those patients also showed a significantly higher incidence of bleeding complications. While we recognize that a reduction of infarct size may correlate with improved clinical outcomes, we question whether the degree of infarct size reduction found in the trial represents a substantial clinical improvement, particularly in light of the apparent increase in bleeding complications. We welcome comments from the public on this matter. We received one written comment from the manufacturer clarifying questions that were raised at the town hall meeting. Specifically, the commenter explained the methodology of Tc-99m Sestamibi scanning and interpretation in the AMIHOT II trial. In addition, the commenter explained that the AMIHOT [15]
                        
                         and AMIHOT II trials did not attempt to measure differences in heart failure outcomes nor mortality outcomes. 5. Proposed Regulatory Change Section 1886(d)(5)(K)(i) of the Act directs us to establish a mechanism to recognize the cost of new medical services and technologies under the IPPS, with such mechanism established after notice and opportunity for public comment. In accordance with this authority, we established at § 412.87(b) of our regulations criteria that a medical service or technology must meet in order to qualify for the additional payment for new medical services and technologies. Specifically, we evaluate applications for new medical service or technology add-on payment by determining whether they meet the criteria of newness, adequacy of payment, and substantial clinical improvement. As stated in section III.J.1. of the preamble of this proposed rule, § 412.87(b)(2) of our existing regulations provides that a specific medical service or technology will be considered new for purposes of new medical service or technology add-on payments after the point at which data begin to become available reflecting the ICD-9-CM code assigned to the new service or technology. The point at which these data become available typically begins when the new medical service or technology is first introduced on the market, generally on the date that the medical service or technology receives FDA approval. Accordingly, for purposes of the new medical service or technology add-on payment, a medical service or technology cannot be considered new prior to the date on which FDA approval is granted. In addition, as stated in section III.J.1. of the preamble of this proposed rule, § 412.87(b)(3) of our existing regulations provides that, to be eligible for the add-on payment for new medical services or technologies, the DRG prospective payment rate otherwise applicable to the discharge involving the new medical service or technology must be assessed for adequacy. Under the cost criterion, to assess the adequacy of payment for a new medical service or technology paid under the applicable DRG prospective payment rate, we evaluate whether the charges for cases involving the new medical service or technology exceed certain threshold amounts. Section 412.87(b)(1) of our existing regulations provides that, to be eligible for the add-on payment for new medical services or technologies, the new medical service or technology must represent an advance that substantially improves, relative to technologies previously available, the diagnosis or treatment of Medicare beneficiaries. In addition, § 412.87(b)(1) states that CMS will announce its determination as to whether a new medical service or technology meets the substantial clinical improvement criteria in the 
                        **Federal Register**
                         as part of the annual updates and changes to the IPPS. Since the implementation of the policy on add-on payments for new medical services and technologies, we accept applications for add-on payments for new medical services and technologies on an annual basis by a specified deadline. For example, applications for FY 2009 were submitted in November 2007. After accepting applications, CMS then evaluates them in the annual IPPS proposed and final rules to determine whether the medical service or technology is eligible for the new medical service or technology add-on payment. If an application meets each of the eligibility criteria, the medical service or technology is eligible for new medical service or technology add-on payments beginning on the first day of the new fiscal year (that is, October 1). We have advised prior and potential applicants that we evaluate whether a medical service or technology is eligible for the new medical service or technology add-on payments prior to publication of the final rule setting forth the annual updates and changes to the IPPS, with the results of our determination announced in the final rule. We announce our results in the final rule for each fiscal year because we believe predictability is an important aspect of the IPPS and that it is important to apply a consistent payment methodology for new medical services or technologies throughout the entire fiscal year. For example, hospitals must train their billing and other staff after publication of the final rule to properly implement the coding and payment changes for the upcoming fiscal year set forth in the final rule. In addition, hospitals'  budgetary process and clinical decisions regarding whether to utilize new technologies are based in part on the applicable payment rates under the IPPS for the upcoming fiscal year, including whether the new medical services or technologies qualify for the new medical service or technology add-on payment. If CMS were to make multiple payment changes under the IPPS during a fiscal year, these changes could adversely affect the decisions hospitals implement at the beginning of the fiscal year. For these reasons, we believe applications for new medical service or technology add-on payments should be evaluated prior to publication of the final IPPS rule for each fiscal year. Therefore, if an application does not meet the new medical service or technology add-on payment criteria prior to publication of the final rule, it will not be eligible for the new medical service or technology add-on payments for the fiscal year for which it applied for the add-on payments. Because we make our determination regarding whether a medical service or technology meets the eligibility criteria for the new medical service or technology add-on payments prior to publication of the final rule, we have advised both past and potential applicants that their medical service or technology must receive FDA approval early enough in the IPPS rulemaking cycle to allow CMS enough time to fully evaluate the application prior to the publication of the IPPS final rule. Moreover, because new medical services or technologies that have not received FDA approval do not meet the newness criterion, it would not be necessary or prudent for us to make a final determination regarding whether a new 
                        ( print page 23617)
                        medical service or technology meets the cost threshold and substantial clinical improvement criteria prior to the medical service or technology receiving FDA approval. In addition, we do not believe it is appropriate for CMS to determine whether a medical service or technology represents a substantial clinical improvement over existing technologies before the FDA makes a determination as to whether the medical service or technology is safe and effective. For these reasons, we first determine whether a medical service or technology meets the newness criteria, and only if so, do we then make a determination as to whether the technology meets the cost threshold and represents a substantial clinical improvement over existing medical services or technologies. For example, even if an application has FDA approval, if the medical service or technology is beyond the timeline of 2-3 years to be considered new, in the past we have not made a determination on the cost threshold and substantial clinical improvement. Further, as we have discussed in prior final rules (69 FR 49018-49019 and 70 FR 47344), it is our past and present practice to analyze the new medical service or technology add-on payment criteria in the following sequence: Newness, cost threshold, and finally substantial clinical improvement. Under our proposal in this proposed rule, we would continue this practice of analyzing the eligibility criteria in this sequence and announce in the annual 
                        **Federal Register**
                         as part of the annual updates and changes to the IPPS our determination on whether a medical service or technology meets the eligibility criteria in § 412.87(b). In the interest of more clearly defining the parameters under which CMS can fully and completely evaluate new medical service or technology add-on payment applications, we are proposing to amend the regulations at § 412.87 by adding a new paragraph (c) to codify our current policy and specify that CMS will consider whether a new medical service or technology meets the eligibility criteria in § 412.87(b) and announce the results in the 
                        **Federal Register**
                         as part of the annual updates and changes to the IPPS. As a result, we are proposing to remove the duplicative text in § 412.87(b)(1) that specifies that CMS will determine whether a new medical service or technology meets the substantial clinical improvement criteria and announce the results of its determination in the 
                        **Federal Register**
                         as part of the annual updates and changes to the IPPS. We note that this proposal is not a change to our current policy, as we have always given consideration to whether an application meets the new medical service or technology eligibility criteria in the annual IPPS proposed and final rules. Rather, this proposal simply codifies our current practice of fully evaluating new medical service or technology add-on payment applications prior to publication of the final rule in order to maintain predictability within the IPPS for the upcoming fiscal year. In addition, we are proposing in new paragraph (c) of § 412.87 to set July 1 of each year as the deadline by which IPPS new medical service or technology add-on payment applications must receive FDA approval. This proposed deadline should provide us with enough time to fully consider all of the new medical service or technology add-on payment criteria for each application and maintain predictability in the IPPS for the coming fiscal year. Finally, under this proposal, applications that have not received FDA approval by July 1 would not be considered in the final rule, even if they were summarized in the corresponding IPPS proposed rule. However, applications that receive FDA approval of the medical service or technology after July 1 would be able to reapply for the new medical service or technology add-on payment the following year (at which time they would be given full consideration in both the IPPS proposed and final rules). In summary, for the reasons cited above, we are proposing to revise § 412.87 to remove the second sentence of (b)(1) and add a new paragraph (c) to codify our current practice of how CMS evaluates new medical service or technology add-on payment applications and establish in paragraph (c) a deadline of July 1 of each year as the deadline by which IPPS new medical service or technology add-on payment applications must receive FDA approval in order to be fully evaluated in the applicable IPPS final rule each year. III. Proposed Changes to the Hospital Wage Index A. Background Section 1886(d)(3)(E) of the Act requires that, as part of the methodology for determining prospective payments to hospitals, the Secretary must adjust the standardized amounts “for area differences in hospital wage levels by a factor (established by the Secretary) reflecting the relative hospital wage level in the geographic area of the hospital compared to the national average hospital wage level.” In accordance with the broad discretion conferred under the Act, we currently define hospital labor market areas based on the definitions of statistical areas established by the Office of Management and Budget (OMB). A discussion of the proposed FY 2009 hospital wage index based on the statistical areas, including OMB's revised definitions of Metropolitan Areas, appears under section III.C. of this preamble. Beginning October 1, 1993, section 1886(d)(3)(E) of the Act requires that we update the wage index annually. Furthermore, this section provides that the Secretary base the update on a survey of wages and wage-related costs of short-term, acute care hospitals. The survey must exclude the wages and wage-related costs incurred in furnishing skilled nursing services. This provision also requires us to make any updates or adjustments to the wage index in a manner that ensures that aggregate payments to hospitals are not affected by the change in the wage index. The proposed adjustment for FY 2009 is discussed in section II.B. of the Addendum to this proposed rule. As discussed below in section III.I. of this preamble, we also take into account the geographic reclassification of hospitals in accordance with sections 1886(d)(8)(B) and 1886(d)(10) of the Act when calculating IPPS payment amounts. Under section 1886(d)(8)(D) of the Act, the Secretary is required to adjust the standardized amounts so as to ensure that aggregate payments under the IPPS after implementation of the provisions of sections 1886(d)(8)(B) and (C) and 1886(d)(10) of the Act are equal to the aggregate prospective payments that would have been made absent these provisions. The proposed budget neutrality adjustment for FY 2009 is discussed in section II.A.4.b. of the Addendum to this proposed rule. Section 1886(d)(3)(E) of the Act also provides for the collection of data every 3 years on the occupational mix of employees for short-term, acute care hospitals participating in the Medicare program, in order to construct an occupational mix adjustment to the wage index. A discussion of the occupational mix adjustment that we are proposing to apply beginning October 1, 2008 (the FY 2009 wage index) appears under section III.D. of this preamble. B. Requirements of Section 106 of the MIEA-TRHCA 1. Wage Index Study Required Under the MIEA-TRHCA Section 106(b)(1) of the MIEA-TRHCA (Pub. L. 109-432) required 
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                        MedPAC to submit to Congress, not later than June 30, 2007, a report on the Medicare wage index classification system applied under the Medicare IPPS. Section 106(b) of MIEA-TRHCA required the report to include any alternatives that MedPAC recommends to the method to compute the wage index under section 1886(d)(3)(E) of the Act. In addition, section 106(b)(2) of the MIEA-TRHCA instructed the Secretary of Health and Human Services, taking into account MedPAC's recommendations on the Medicare wage index classification system, to include in this FY 2009 IPPS proposed rule one or more proposals to revise the wage index adjustment applied under section 1886(d)(3)(E) of the Act for purposes of the IPPS. The proposal (or proposals) must consider each of the following: Problems associated with the definition of labor markets for the wage index adjustment.
                    The modification or elimination of geographic reclassifications and other adjustments.
                    The use of Bureau of Labor of Statistics data or other data or methodologies to calculate relative wages for each geographic area.
                    Minimizing variations in wage index adjustments between and within MSAs and statewide rural areas.
                    The feasibility of applying all components of CMS' proposal to other settings.
                    Methods to minimize the volatility of wage index adjustments while maintaining the principle of budget neutrality.
                    The effect that the implementation of the proposal would have on health care providers on each region of the country.
                    Methods for implementing the proposal(s) including methods to phase in such implementations.
                    Issues relating to occupational mix such as staffing practices and any evidence on quality of care and patient safety including any recommendation for alternative calculations to the occupational mix. In its June 2007 Report to Congress, “Report to the Congress: Promoting Greater Efficiency in Medicare” (Chapter 6 with Appendix), MedPAC made three broad recommendations regarding the wage index: (1) Congress should repeal the existing hospital wage index statute, including reclassifications and exceptions, and give the Secretary authority to establish a new wage index system; (2) The Secretary should establish a hospital compensation index that— Uses wage data from all employers and industry-specific occupational weights;
                    Is adjusted for geographic differences in the ratio of benefits to wages;
                    Is adjusted at the county level and smoothes large differences between counties; and
                    Is implemented so that large changes in wage index values are phased in over a transition period; and (3) The Secretary should use the hospital compensation index for the home health and skilled nursing facility prospective payment systems and evaluate its use in the other Medicare fee-for-service prospective payment systems. The full June 2007 Report to Congress is available at the Web site: 
                        *http://www.medpac.gov/​documents/​Jun07_​EntireReport.pdf)*. In the presentation and analysis of its alternative wage index system, MedPAC addressed almost all of the nine points for consideration under section 106(b)(2) of Pub. L. 109-432. Following are the highlights of the alternative wage index system recommended by MedPAC: Although the MedPAC recommended wage index generally retains the current labor market definitions, it supplements the metropolitan areas with county-level adjustments and eliminates single wage index values for rural areas.
                    In the MedPAC recommended wage index, the county-level adjustments, together with a smoothing process that constrains the magnitude of differences between and within contiguous wage areas, serve as a replacement for geographical reclassifications.
                    The MedPAC recommended wage index uses BLS data instead of the CMS hospital wage data collected on the Medicare cost report. MedPAC adjusts the BLS data for geographic differences in the ratio of benefits to wages using Medicare cost report data.
                    The BLS data are collected from a sample of all types of employers, not just hospitals. The MedPAC recommended wage index could be adapted to other providers such as HHAs and SNFs by replacing hospital occupational weights with occupational weights appropriate for other types of providers.
                    In the MedPAC recommended wage index, volatility over time is addressed by the use of BLS data, which is based on a 3-year rolling sample design.
                    MedPAC recommends a phased implementation for its recommended wage index in order to cushion the effect of large wage index changes on individual hospitals.
                    MedPAC suggests that using BLS data automatically addresses occupational mix differences, because the BLS data are specific to health care occupations, and national industry-wide occupational weights are applied to all geographic areas.
                    The MedPAC report does not provide any evidence of the impact of its wage index on staffing practices or the quality of care and patient safety. To assist CMS in meeting the requirements of section 106(b)(2) of Pub. L. 109-432, in February 2008, CMS awarded a Task Order under its Expedited Research and Demonstration Contract, to Acumen, LLC. The two general responsibilities of the Task Order are to (1) conduct a detailed impact analysis that compares the effects of MedPAC's wage and hospital compensation indexes with the CMS wage index and (2) assist CMS in developing a proposal (or proposals) that addresses the nine points for consideration under section 106(b)(2) of Pub. L. 109-432. Specifically, the tasks under the Task Order include, but are not limited to, an evaluation of whether differences between the two types of wage data (that is, CMS cost report and occupational mix data and BLS data) produce significant differences in wage index values among labor market areas, a consideration of alternative methods of incorporating benefit costs into the construction of the wage index, a review of past and current research on alternative labor market area definitions, and a consideration of how aspects of the MedPAC recommended wage index can be applied to the CMS wage data in constructing a new methodology for the wage index. We will present any analyses and proposals resulting from this Task Order in the FY 2009 IPPS final rule or in a special 
                        **Federal Register**
                         notice issued after the final rule is published. 2. CMS Proposals in Response to Requirements Under Section 106(b) of the MIEA-TRHCA As discussed in section III.A. of this preamble, the purpose of the hospital wage index is to adjust the IPPS standardized payment to reflect labor market area differences in wage levels. The geographic reclassification system exists in order to assist “hospitals which are disadvantaged by their current geographic classification because they compete with hospitals that are located in the geographic area to which they seek to be reclassified” (56 FR 25469). Geographic reclassification is 
                        ( print page 23619)
                        established under section 1886(d)(10) of the Act and is implemented through 42 CFR Part 412, Subpart L. (We refer readers to section III.I. of this preamble for a detailed discussion of the geographic reclassification system and other area wage index exceptions.) In its June 2007 Report to Congress, MedPAC discussed its findings that geographic reclassification, and numerous other area wage index exceptions added to the system over the years, have created major complexities and “troubling anomalies” in the hospital wage index. A review of the IPPS final rules reveals a long history of legislative changes that have permitted certain hospitals, that otherwise would not be able to reclassify under section 1886(d)(10) of the Act, to receive a higher wage index than calculated for their geographic area. MedPAC reports that more than one-third of hospitals now receive a higher wage index due to geographic reclassification or other wage index exceptions. We are concerned about the integrity of the current system, and agree with MedPAC that the process has become burdensome. As noted above, MedPAC recommended the elimination of geographic reclassification and other wage index exceptions. In addition, the President's FY 2009 Budget included a proposal to apply the geographic reclassification budget neutrality requirement at the State level rather than by adjusting the standardized rate for hospitals nationwide. Given the language in section 1886(d)(10) of the Act establishing the MGCRB, we believe a statutory change would be required to make these changes. However, we do have the authority to make some regulatory changes to the reclassification system as discussed below. We note that these proposals do not preclude future consideration of MedPAC's recommendations that could be implemented through additional changes to our regulations, once our analysis of those recommendations is complete (after the publication of the FY 2009 IPPS proposed rule). a. Proposed Revision of the Reclassification Average Hourly Wage Comparison Criteria Regulations at 42 CFR 413.230(d)(1) set forth the average hourly wage comparison criteria that an individual hospital must meet in order for the MGCRB to approve a geographic reclassification application. Our current criteria (requiring an urban hospital to demonstrate that its average hourly wage is at least 108 percent of the average hourly wage of hospitals in the area in which the hospital is located and at least 84 percent of the average hourly wage of hospitals in the area to which it seeks redesignation) were adopted in the FY 1993 IPPS final rule (57 FR 39825). In that final rule, we explained that the 108 percent threshold “is based on the national average hospital wage as a percentage of its area wage (96 percent) plus one standard deviation (12 percent).” We also explained that we would use the 84-percent threshold to reflect the average hospital wage of the hospital as a percentage of its area wage less one standard deviation. We stated that “to qualify for a wage index reclassification, a hospital must have an average hourly wage that is more than one national standard deviation above its original labor market area and not less than one national standard deviation below its new labor market area” (57 FR 39770). In response to numerous public comments we received, we expressed our policy and legal justifications for adopting the specific thresholds. Among other things, we stated that geographic reclassifications must be viewed not just in terms of those hospitals that are reclassifying, but also in terms of the nonreclassifying hospitals that, through a budget neutrality adjustment, are required to bear a financial burden associated with the higher wage indices received by those hospitals that reclassify. We also indicated that the Secretary has ample legal authority under section 1886(d)(10) of the Act to set the wage comparison thresholds and to revise such thresholds upon further review. We refer readers to that final rule for a full discussion of our justifications for the standards. In the FY 2000 IPPS final rule (65 FR 47089 through 47090), the wage comparison criteria for rural hospitals seeking individual hospital reclassifications were reduced to 82 percent and 106 percent to compensate for the historic economic underperformance of rural hospitals. The 2-percent drop in both thresholds was determined to allow a significant benefit to some hospitals that were close to meeting the existing criteria but would not make the reclassification standards overly liberal for rural hospitals. CMS has not evaluated or recalibrated the average hourly wage criteria for geographic reclassification since they were established in FY 1993. In consideration of the MIEA-TRHCA requirements and MedPAC's finding that over one-third of hospitals are receiving a reclassified wage index or other wage index adjustment, we decided to reevaluate the average hourly wage criteria for geographic reclassification. We ran simulations with more recent wage data to determine what would be the appropriate average hourly wage criteria. We found that the average hospital average hourly wage as a percentage of its area's wage has increased from approximately 96 percent in FY 1993 to closer to 98 percent over FYs 2006, 2007, and 2008 (97.8, 98.2, and 98 percent, respectively). We also determined that the standard deviation has been reduced from approximately 12 percent in FY 1993 to closer to 10 percent over the same 3-year period (10.7, 10.4, and 10.4 percent, respectively); that is, assuming normal distributions, approximately 68 percent of all hospitals would have an average hourly wage that deviates less than 10 percentage points above or below the mean. This assessment indicates that the new baseline criteria for reclassification should be set to 88/108 percent. While the 108 criterion appears not to require adjustment, the current 84 percent standard appears to be too low a threshold to serve the purpose of establishing wage comparability with a proximate labor market area. To assess the impact that these changes would have had on hospitals that reclassified in FY 2008, we ran models that set urban individual reclassification standards to 88/108 percent and the county group reclassification standard to 88 percent. We retained the 2-percent benefit for rural hospitals by setting an 86/106 percent standard. We used 3-year average hourly wage figures from the 2005, 2006, and 2007 wage surveys and compared them to 3-year average hourly wage figures for CBSAs over the same 3-year period. Of the 295 hospitals that applied for and received individual reclassifications in FY 2008, 45 of them (15.3 percent) would not meet the proposed 88/86 percent threshold. Of the 66 hospitals that applied for and received county group reclassification in FY 2008, 6 hospitals (9.1 percent) in 3 groups would not have qualified with the new standards. We also ran comparisons for hospitals that reclassified in FY 2006 and FY 2007 to determine if they would have been able to reclassify in FY 2008, using 3-year averages available in FY 2008. We found that, of all hospitals that were reclassified in FY 2008 (that is, applications approved for FYs 2006 through 2008), 14.7 percent of individual reclassifications and 8.5 percent of county group reclassification would not have qualified to reclassify in FY 2008. 
                        ( print page 23620) Section 106 of MIEA-TRHCA requires us to propose revisions to the hospital wage index system after considering the recommendations of MedPAC. To address this requirement, we are proposing that the 84/108 criteria for urban hospital reclassifications and the 82/106 criteria for rural hospital reclassifications be recalibrated using the methodology published in the FY 1993 final rule and more recent wage data (that is, data used in computing the FYs 2006, 2007, 2008 wage indices). We believe that hospitals that are seeking to reclassify to another area should be required to demonstrate more similarity to the area than the current criteria permit, and our recent analysis demonstrates that those criteria are no longer appropriate. Therefore, we are proposing to change the criterion for the comparison of a hospital's average hourly wage to that of the area to which the hospital seeks reclassification to 88 percent for urban hospitals and 86 percent for rural hospitals for new reclassifications beginning with the FY 2010 wage index and, accordingly, revise our regulations at 42 CFR 412.230 to reflect these changes. The criterion for the comparison of a hospital's average hourly wage to that of its geographic area would be unchanged (108 percent for urban hospitals and 106 percent for rural hospitals). We also are proposing that, when there are significant changes in labor market area definitions, such as CMS' adoption of new OMB CBSA definitions based upon the decennial census (69 FR 49027), we would again reevaluate and, if warranted, recalibrate these criteria. This would allow CMS to consider the effects of periodic changes in labor market boundaries and provide a regular timeline for updating and validating the reclassification criteria. Finally, we are proposing to adjust the 85 percent criterion for both urban and rural county group reclassifications to be equal to the proposed 88 percent standard for urban reclassifications, and to revise the regulations at 42 CFR 412.232 and 412.234 to reflect the change. The urban and rural county group average hourly wage standard has always been equivalent for both urban and rural county groups and has always been 1 percent higher than the 84 percent urban area individual reclassification standard. We would continue the policy of having an equivalent wage comparison criterion for both urban and rural county groups, as these groups have always used the same wage comparison criteria. We also would use the individual urban hospital reclassification standard of 88 percent because this threshold would ensure that the hospitals in the county group are at least as comparable to the proximate area as are individual hospitals within their own areas. Also, we do not believe it would be appropriate to have a group reclassification standard lower than the individual reclassification standards, thus potentially creating a situation where all of the hospitals in a county could reclassify, even though no single hospital within such county would be able to meet any average hourly wage-related comparisons for an individual reclassification. We considered raising the group reclassification criterion to 89 percent in order to preserve the historical policy of the standard being set at 1 percent higher than the individual reclassification standard. However, we determined that making the group standard equal to the individual standard would adequately address our stated concerns. We note that the proposed changes in the reclassification criteria apply only to new reclassifications beginning with the FY 2010 wage index. Any hospital or county group that is in the midst of a 3-year reclassification in FY 2010 will not be affected by the proposed criteria change until they reapply for a geographic reclassification. Therefore, we are proposing the effective date for these changes would be September 1, 2008, the deadline for hospitals to submit applications for reclassification for the FY 2010 wage index. b. Within-State Budget Neutrality Adjustment for the Rural and Imputed Floors Section 4410 of the Balanced Budget Act of 1997 (BBA) established the rural floor by requiring that the wage index for a hospital in an urban area of a State cannot be less than the area wage index determined for that State's rural area. Section 4410(b) of the BBA imposed the budget neutrality requirement and stated that the Secretary shall “adjust the area wage index referred to in subsection (a) for hospitals not described in such subsection.” Therefore, in order to compensate for the increased wage indices of urban hospitals receiving the rural floor, a nationwide budget neutrality adjustment is applied to the wage index to account for the additional payment to these hospitals. As a result, urban hospitals that qualify for their State's rural floor wage index receive enhanced payments at the expense of all rural hospitals nationwide and all other urban hospitals that do not receive their State's rural floor. In the FY 2009 proposed wage index, 266 hospitals in 27 States benefit from the rural floor. The first chart below lists the percentage of total payments each State either received or contributed to fund the current rural floor and imputed floor provisions with national budget neutrality adjustments (as indicated in the discussion of the imputed floor below in this section III.B.2.b.). The second chart below provides a graphical depiction of the proposed FY 2009 impacts. FY 2009 IPPS Estimated Payments with Proposed Within-State Rural Floor and Imputed Floor Budget Neutrality
State
Current policy 
                                 application of national rural floor and imputed floor budget neutrality
Proposed policy application of rural floor and imputed floor budget 
                                 neutrality within each stateAlabama
−0.1
0.3Alaska
0.0
−0.2Arizona
−0.2
0.3Arkansas
−0.1
0.3California
0.7
−0.8Colorado
0.0
−0.1Connecticut
2.1
−2.2Delaware
−0.2
0.3Washington, DC
−0.2
0.3( print page 23621)Florida
0.0
0.0Georgia
−0.1
0.3Hawaii
−0.1
0.3Idaho
−0.1
0.3Illinois
−0.2
0.1Indiana
−0.1
0.0Iowa
0.1
−0.1Kansas
−0.1
0.3Kentucky
−0.1
0.3Louisiana
−0.1
0.0Maine
−0.1
0.3Massachusetts
−0.2
0.3Michigan
−0.2
0.3Minnesota
−0.2
0.3Mississippi
−0.1
0.3Missouri
−0.1
0.0Montana
−0.1
0.2Nebraska
−0.1
0.3Nevada
−0.2
0.3New Hampshire
1.1
−1.2New Jersey
0.7
−0.8New Mexico
−0.1
0.0New York
−0.2
0.3North Carolina
−0.1
0.1North Dakota
0.1
−0.1Ohio
−0.1
0.1Oklahoma
−0.1
0.1Oregon
−0.1
0.0Pennsylvania
−0.1
0.1Rhode Island
−0.2
0.3South Carolina
−0.1
0.0South Dakota
−0.1
0.3Tennessee
0.0
0.0Texas
−0.1
0.1Utah
−0.1
0.3Vermont
3.5
−3.4Virginia
−0.1
0.0Washington
−0.1
−0.1West Virginia
0.0
−0.1Wisconsin
−0.1
−0.1Wyoming
0.0
0.1
 
 
  The above charts demonstrate how, at a State-by-State level, the rural floor is creating a benefit for a minority of States that is then funded by a majority of States, including States that are overwhelmingly rural in character. The intent behind the rural floor seems to have been to address anomalous occurrences where certain urban areas in a State have unusually depressed wages when compared to the State's rural areas. However, because these comparisons occur at the State level, we believe it also would be sound policy to make the budget neutrality adjustment specific to the State, redistributing payments among hospitals within the State, rather than adjusting payments to hospitals in other States. In addition, a statewide budget neutrality adjustment would address the situation we discussed in the FY 2008 IPPS final rule with comment period (72 FR 47324) in which rural CAHs were converting to IPPS status, apparently to raise the State's rural wage index to a level whereby all urban hospitals in the State would receive the rural floor. Medicare payments to CAHs are based on 101 percent of reasonable costs while the IPPS pays hospitals a fixed rate per discharge. In addition, as a CAH, a hospital is guaranteed to recover its costs, while an IPPS hospital is provided with incentives to increase efficiency to cover its costs. Thus, we stated that the identified CAHs were converting back to IPPS, even though the conversion would not directly benefit them. Because these hospitals’ wage levels are higher than most, if not all, of the urban hospitals in the State, the wage indices for most, if not all, of the State's urban hospitals would increase as a result of the rural floor provision if the CAHs convert to IPPS status. In simulating the effect of the hospitals setting the State's rural floor, we estimated that payment to hospitals in the State would increase in excess of $220 million in a single year. The MedPAC, in its June 2007 Report to the Congress stated, “The fact that the movement of one or two CAHs in or out of the [I]PPS system can increase (or decrease) Medicare payments by $220 million suggests there is a flaw in the design of the wage index system.” (We refer readers to page 131 of the report.) For the above reasons, we are proposing to apply a State level rural floor budget neutrality adjustment to the wage index beginning in FY 2009. States that have no hospitals receiving a rural floor wage index would no longer have a negative budget neutrality adjustment applied to their wage indices. Conversely, hospitals in States with hospitals receiving a rural floor would 
                        ( print page 23623)
                        have their wage indices downwardly adjusted to achieve budget neutrality within the State. All hospitals within each State would, in effect, be responsible for funding the rural floor adjustment applicable within that specific State. In the FY 2005 IPPS final rule and the FY 2008 IPPS final rule with comment period (69 FR 49109 and 72 FR 47321, respectively), we temporarily adopted an “imputed” floor measure to address a concern by some individuals that hospitals in all-urban States were disadvantaged by the absence of rural hospitals. Because no rural wage index could be calculated, no rural floor could be applied within such States. We originally limited application of the policy to FYs 2005 through 2007 and then extended it one additional year, through FY 2008. We are proposing to extend the imputed floor for 3 additional years, through FY 2011, and to revise the introductory text of § 412.64(h)(4) of our regulations to reflect this extension. For FY 2009, 26 hospitals in New Jersey (33.8 percent) would receive the imputed floor. Rhode Island, the only other all-urban State, has no hospitals that would receive the imputed floor. In past years, we applied a national budget neutrality adjustment to the standardized amount to ensure that payments remained constant to payments that would have occurred in the absence of the imputed floor policy. As a result, payments to all other hospitals in the Nation were adjusted downward to subsidize the higher payments to New Jersey hospitals receiving the imputed floor. As the intent of the imputed floor is to create a protection to all-urban States similar to the protection offered to urban-rural mixed States by the rural floor, and the effect of the measure is also State-specific like the rural floor, we believe that the budget neutrality adjustments for the imputed floor and the rural floor should be applied in the same manner. Therefore, beginning with FY 2009, we are also proposing to apply the imputed floor budget neutrality adjustment to the wage index and at the State level. Based on our impact analysis of these proposals for FY 2009, of the 49 States (Maryland is excluded because it is under a State waiver), the District of Columbia, and Puerto Rico, 39 would see either no change or an increase in total Medicare payments as a result of applying a budget neutrality adjustment to the wage index for the rural and imputed floors at the State level rather than the national level. The total payments of the remaining 12 States would decrease 0.1 percent to 3.4 percent compared to continuing our prior national adjustment policy. The full impact analysis is reflected in the two charts presented earlier in this section III.B.2.b. of the preamble of this proposed rule. Tables 4D-1 and 4D-2 in the Addendum to this proposed rule reflect the proposed FY 2009 State level budget neutrality adjustments for the rural and imputed floors. We are specifically requesting public comments from national and State hospital associations regarding these proposals, particularly the national associations, as they represent member hospitals that are both positively and negatively affected by our proposed policies, and are, therefore, in the best position to comment on the policy merits of these proposals. We will view the absence of any comments from the national hospital associations as a sign that they do not object to our proposed policies. c. Within-State Budget Neutrality Adjustment for Geographic Reclassification Currently, section 1886(d)(8)(D) of the Act requires us to adjust the standardized amount to ensure that the effects of geographic reclassification do not increase aggregate IPPS payments. This means that, in the case of a reclassification, budget neutrality is achieved by reducing the standardized amount for all hospitals nationwide. The FY 2009 President's Budget includes a legislative proposal to apply geographic reclassification budget neutrality at the State level (available at the Web site: 
                        *www.hhs.gov/​budget/​09budget/​2009BudgetInBrief.pdf*
                         under FY 2009 Medicare Proposals, page 54). If this proposal is enacted by the Congress, budget neutrality would be achieved by adjusting the wage index for all hospitals within the State rather than reducing the standardized amount for all hospitals nationwide. As noted also in MedPAC's June 2007 Report to Congress, over the years, there have been many changes to the Medicare law that are intended to broaden the ability for a hospital to receive a wage index that is higher than the value that is calculated for its geographic area and not be subject to the proximity or wage level criteria for geographic reclassification established under section 1886(d)(10) of the Act. These more targeted geographic reclassification provisions are creating inequities in the wage index by sometimes allowing hospitals to be reclassified to areas where other hospitals that are closer in proximity are ineligible to reclassify. Applying budget neutrality at the State level would focus the costs of geographic reclassification closer to the areas where hospitals that benefit from the reclassification are located. We expect that a legislative provision on applying geographic reclassification budget neutrality at the State level would be applied to all reclassifications and wage index exceptions that are implemented through 42 CFR Part 412, Subpart L, and certain provisions of the Social Security Act that permit hospitals to receive a higher wage index than is calculated for their geographic area. (As discussed above, as a proposed regulatory matter, there also would be a separate within-State budget neutrality adjustment for the imputed and rural floors.) We expect that reclassification budget neutrality at the State level would operate through adjustments to the IPPS payments to hospitals in the State in which the reclassifying hospital is geographically located. We are seeking public comments regarding MedPAC's recommendations for reforming the wage index, our plan for our contractor's review of the wage index, and the regulatory proposals for modifying the current hospital wage index system. We also welcome additional suggestions for reforming the hospital wage index. C. Core-Based Statistical Areas for the Hospital Wage Index The wage index is calculated and assigned to hospitals on the basis of the labor market area in which the hospital is located. In accordance with the broad discretion under section 1886(d)(3)(E) of the Act, beginning with FY 2005, we define hospital labor market areas based on the Core-Based Statistical Areas (CBSAs) established by OMB and announced in December 2003 (69 FR 49027). For a discussion of OMB's revised definitions of CBSAs and our implementation of the CBSA definitions, we refer readers to the preamble of the FY 2005 IPPS final rule (69 FR 49026 through 49032). As with the FY 2008 final rule, for FY 2009 we are proposing to provide that hospitals receive 100 percent of their wage index based upon the CBSA configurations. Specifically, for each hospital, we will determine a wage index for FY 2009 employing wage index data from FY 2005 hospital cost reports and using the CBSA labor market definitions. We consider CBSAs that are MSAs to be urban, and CBSAs that are Micropolitan Statistical Areas as well as areas outside of CBSAs to be rural. In addition, it has been our longstanding policy that where an MSA has been divided into Metropolitan Divisions, we consider the Metropolitan Division to comprise the labor market areas for purposes of calculating the 
                        ( print page 23624)
                        wage index (69 FR 49029). We are proposing to codify this longstanding policy into our regulations at § 412.64(b)(1)(ii)(A). On November 20, 2007, OMB announced the revision of titles for eight urban areas (OMB Bulletin No. 08-01). The revised titles are as follows: Hammonton, New Jersey qualifies as a new principal city of the Atlantic City, New Jersey CBSA. The new title is Atlantic City-Hammonton, New Jersey CBSA;
                    New Brunswick, New Jersey, located in the Edison, New Jersey Metropolitan Division, qualifies as a new principal city of the New York-Northern New Jersey-Long Island, New York, New Jersey, Pennsylvania CBSA. The new title for the Metropolitan Division is Edison-New Brunswick, New Jersey CBSA;
                    Summerville, South Carolina qualifies as a new principal city of the Charleston-North Charleston, South Carolina CBSA. The new title is Charleston-North Charleston-Summerville, South Carolina;
                    Winter Haven, Florida qualifies as a new principal city of the Lakeland, Florida CBSA. The new title is Lakeland-Winter Haven, Florida;
                    Bradenton, Florida replaces Sarasota, Florida as the most populous principal city of the Sarasota-Bradenton-Venice, Florida CBSA. The new title is Bradenton-Sarasota-Venice, Florida. The new CBSA code is 14600;
                    Frederick, Maryland replaces Gaithersburg, Maryland as the second most populous principal city in the Bethesda-Gaithersburg-Frederick, Maryland CBSA. The new title is Bethesda-Frederick-Gaithersburg, Maryland;
                    North Myrtle Beach, South Carolina replaces Conway, South Carolina as the second most populous principal city of the Myrtle Beach-Conway-North Myrtle Beach, South Carolina CBSA. The new title is Myrtle Beach-North Myrtle Beach-Conway, South Carolina;
                    Pasco, Washington replaces Richland, Washington as the second most populous principal city of the Kennewick-Richland-Pasco, Washington CBSA. The new title is Kennewick-Pasco-Richland, Washington. The OMB bulletin is available on the OMB Web site at 
                        *https://www.whitehouse.gov/​OMB—*
                         go to “Bulletins” or “Statistical Programs and Standards.” CMS will apply these changes to the IPPS beginning October 1, 2008. D. Proposed Occupational Mix Adjustment to the Proposed FY 2009 Wage Index As stated earlier, section 1886(d)(3)(E) of the Act provides for the collection of data every 3 years on the occupational mix of employees for each short-term, acute care hospital participating in the Medicare program, in order to construct an occupational mix adjustment to the wage index, for application beginning October 1, 2004 (the FY 2005 wage index). The purpose of the occupational mix adjustment is to control for the effect of hospitals’ employment choices on the wage index. For example, hospitals may choose to employ different combinations of registered nurses, licensed practical nurses, nursing aides, and medical assistants for the purpose of providing nursing care to their patients. The varying labor costs associated with these choices reflect hospital management decisions rather than geographic differences in the costs of labor. 1. Development of Data for the Proposed FY 2009 Occupational Mix Adjustment On October 14, 2005, we published a notice in the 
                        **Federal Register**
                         (70 FR 60092) proposing to use a new survey, the 2006 Medicare Wage Index Occupational Mix Survey (the 2006 survey) to apply an occupational mix adjustment to the FY 2008 wage index. In the proposed 2006 survey, we included several modifications based on the comments and recommendations we received on the 2003 survey, including (1) allowing hospitals to report their own average hourly wage rather than using BLS data; (2) extending the prospective survey period; and (3) reducing the number of occupational categories but refining the subcategories for registered nurses. We made the changes to the occupational categories in response to MedPAC comments to the FY 2005 IPPS final rule (69 FR 49036). Specifically, MedPAC recommended that CMS assess whether including subcategories of registered nurses would result in a more accurate occupational mix adjustment. MedPAC believed that including all registered nurses in a single category may obscure significant wage differences among the subcategories of registered nurses, for example, the wages of surgical registered nurses and floor registered nurses may differ. Also, to offset additional reporting burden for hospitals, MedPAC recommended that CMS should combine the general service categories that account for only a small percentage of a hospital's total hours with the “all other occupations” category because most of the occupational mix adjustment is correlated with the nursing general service category. In addition, in response to the public comments on the October 14, 2005 notice, we modified the 2006 survey. On February 10, 2006, we published a 
                        **Federal Register**
                         notice (71 FR 7047) that solicited comments and announced our intent to seek OMB approval on the revised occupational mix survey (Form CMS-10079 (2006)). OMB approved the survey on April 25, 2006. The 2006 survey provides for the collection of hospital-specific wages and hours data, a 6-month prospective reporting period (that is, January 1, 2006, through June 30, 2006), the transfer of each general service category that comprised less than 4 percent of total hospital employees in the 2003 survey to the “all other occupations” category (the revised survey focuses only on the mix of nursing occupations), additional clarification of the definitions for the occupational categories, an expansion of the registered nurse category to include functional subcategories, and the exclusion of average hourly rate data associated with advance practice nurses. The 2006 survey included only two general occupational categories: nursing and “all other occupations.” The nursing category has four subcategories: Registered nurses, licensed practical nurses, aides, orderlies, attendants, and medical assistants. The registered nurse subcategory includes two functional subcategories: management personnel and staff nurses or clinicians. As indicated above, the 2006 survey provided for a 6-month data collection period, from January 1, 2006 through June 30, 2006. However, we allowed flexibility for the reporting period beginning and ending dates to accommodate some hospitals' biweekly payroll and reporting systems. That is, the 6-month reporting period had to begin on or after December 25, 2005, and end before July 9, 2006. We are proposing to use the entire 6-month 2006 survey data to calculate the occupational mix adjustment for the FY 2009 wage index. The original timelines for the collection, review, and correction of the 2006 occupational mix data were discussed in detail in the FY 2007 IPPS final rule (71 FR 48008). The revision and correction process for all of the data, including the 2006 occupational mix survey data to be used for computing the FY 2009 wage index, is discussed in detail in section III.K. of the preamble of this proposed rule. 
                        ( print page 23625) 2. Calculation of the Proposed Occupational Mix Adjustment for FY 2009 For FY 2009 (as we did for FY 2008), we are proposing to calculate the occupational mix adjustment factor using the following steps: *Step 1*
                        —For each hospital, determine the percentage of the total nursing category attributable to a nursing subcategory by dividing the nursing subcategory hours by the total nursing category's hours (registered nurse management personnel and registered nurse staff nurses or clinicians are treated as separate nursing subcategories). Repeat this computation for each of the five nursing subcategories: registered nurse management personnel; registered nurse staff nurses or clinicians; licensed practical nurses; nursing aides, orderlies, and attendants; and medical assistants. *Step 2*
                        —Determine a national average hourly rate for each nursing subcategory by dividing a subcategory's total salaries for all hospitals in the occupational mix survey database by the subcategory's total hours for all hospitals in the occupational mix survey database. *Step 3*
                        —For each hospital, determine an adjusted average hourly rate for each nursing subcategory by multiplying the percentage of the total nursing category (from Step 1) by the national average hourly rate for that nursing subcategory (from Step 2). Repeat this calculation for each of the five nursing subcategories. *Step 4*
                        —For each hospital, determine the adjusted average hourly rate for the total nursing category by summing the adjusted average hourly rate (from Step 3) for each of the nursing subcategories. *Step 5*
                        —Determine the national average hourly rate for the total nursing category by dividing total nursing category salaries for all hospitals in the occupational mix survey database by total nursing category hours for all hospitals in the occupational mix survey database. *Step 6*
                        —For each hospital, compute the occupational mix adjustment factor for the total nursing category by dividing the national average hourly rate for the total nursing category (from Step 5) by the hospital's adjusted average hourly rate for the total nursing category (from Step 4). If the hospital's adjusted average hourly rate is less than the national average hourly rate (indicating the hospital employs a less costly mix of nursing employees), the occupational mix adjustment factor would be greater than 1.0000. If the hospital's adjusted average hourly rate is greater than the national average hourly rate, the occupational mix adjustment factor would be less than 1.0000. *Step 7*
                        —For each hospital, calculate the occupational mix adjusted salaries and wage-related costs for the total nursing category by multiplying the hospital's total salaries and wage-related costs (from Step 5 of the unadjusted wage index calculation in section III.G. of this preamble) by the percentage of the hospital's total workers attributable to the total nursing category (using the occupational mix survey data, this percentage is determined by dividing the hospital's total nursing category salaries by the hospital's total salaries for “nursing and all other”) and by the total nursing category's occupational mix adjustment factor (from Step 6 above). The remaining portion of the hospital's total salaries and wage-related costs that is attributable to all other employees of the hospital is not adjusted by the occupational mix. A hospital's all other portion is determined by subtracting the hospital's nursing category percentage from 100 percent. *Step 8*
                        —For each hospital, calculate the total occupational mix adjusted salaries and wage-related costs for a hospital by summing the occupational mix adjusted salaries and wage-related costs for the total nursing category (from Step 7) and the portion of the hospital's salaries and wage-related costs for all other employees (from Step 7). To compute a hospital's occupational mix adjusted average hourly wage, divide the hospital's total occupational mix adjusted salaries and wage-related costs by the hospital's total hours (from Step 4 of the unadjusted wage index calculation in section III.G. of this preamble). *Step 9*
                        —To compute the occupational mix adjusted average hourly wage for an urban or rural area, sum the total occupational mix adjusted salaries and wage-related costs for all hospitals in the area, then sum the total hours for all hospitals in the area. Next, divide the area's occupational mix adjusted salaries and wage-related costs by the area's hours. *Step 10*
                        —To compute the national occupational mix adjusted average hourly wage, sum the total occupational mix adjusted salaries and wage-related costs for all hospitals in the Nation, then sum the total hours for all hospitals in the Nation. Next, divide the national occupational mix adjusted salaries and wage-related costs by the national hours. The proposed FY 2009 occupational mix adjusted national average hourly wage is $32.2252. *Step 11*
                        —To compute the occupational mix adjusted wage index, divide each area's occupational mix adjusted average hourly wage (Step 9) by the national occupational mix adjusted average hourly wage (Step 10). *Step 12*
                        —To compute the Puerto Rico specific occupational mix adjusted wage index, follow Steps 1 through 11 above. The proposed FY 2009 occupational mix adjusted Puerto Rico specific average hourly wage is $13.7851. The table below is an illustrative example of the proposed occupational mix adjustment. 
 
  
 
  
 
 Because the occupational mix adjustment is required by statute, all hospitals that are subject to payments under the IPPS, or any hospital that would be subject to the IPPS if not granted a waiver, must complete the occupational mix survey, unless the hospital has no associated cost report wage data that are included in the proposed FY 2009 wage index. For the FY 2008 wage index, if a hospital did not respond to the occupational mix survey, or if we determined that a hospital's submitted data were too erroneous to include in the wage index, we assigned the hospital the average occupational mix adjustment for the labor market area (72 FR 47314). We believed this method had the least impact on the wage index for other hospitals in the area. For areas where no hospital submitted data for purposes of calculating the occupational mix adjustment, we applied the national occupational mix factor of 1.0000 in calculating the area's FY 2008 occupational mix adjusted wage index. We indicated in the FY 2008 IPPS final rule that we reserve the right to apply a different approach in future years, including potentially penalizing nonresponsive hospitals (72 FR 47314). For the FY 2009 wage index, we are proposing to handle the data for hospitals that did not respond to the occupational mix survey (neither the 1st quarter nor 2nd quarter data) in the same manner as discussed above for the FY 2008 wage index. In addition, if a hospital submits survey data for either the 1st quarter or 2nd quarter, but not for both quarters, we are proposing to use the data the hospital submitted for one quarter to calculate the hospital's proposed FY 2009 occupational mix adjustment factor. Lastly, if a hospital submits a survey(s), but that survey data can not be used because we determine it to be aberrant, we will also assign the hospital the average occupational mix adjustment for its labor market area. For example, if a hospital's individual nurse category average hourly wages are out of range (that is, unusually high or low), and the hospital does not provide sufficient documentation to explain the aberrancy, or the hospital does not submit any registered nurse staff salaries or hours data, we will assign the hospital the average occupational mix adjustment for the labor market area in which it is located. In calculating the average occupational mix adjustment factor for a labor market area, we replicated Steps 1 through 6 of the calculation for the occupational mix adjustment. However, instead of performing these steps at the hospital level, we aggregated the data at the labor market area level. In following these steps, for example, for CBSAs that contain providers that did not submit occupational mix survey data, the occupational mix adjustment factor ranged from a low of 0.8968 (CBSA 39820, Redding, CA), to a high of 1.0775 (CBSA 43300, Sherman-Denison, TX). Also, in computing a hospital's occupational mix adjusted salaries and wage-related costs for nursing employees (Step 7 of the calculation), in the absence of occupational mix survey data, we multiplied the hospital's total salaries and wage-related costs by the percentage of the 
                        *area's*
                         total workers attributable to the 
                        *area's*
                         total nursing category. For FY 2009, there was one CBSA for which we did not have occupational mix data for any of its providers (CBSA 12020, Athens-Clark County, GA). In the absence of any data in this labor market area, we applied an occupational mix adjustment factor of 1.0 to all provider(s). In the FY 2007 IPPS final rule, we also indicated that we would give serious consideration to applying a hospital-specific penalty if a hospital does not comply with regulations requiring submission of occupational mix survey data in future years. We stated that we believe that section 1886(d)(5)(I)(i) of the Act provides us with the authority to penalize hospitals that do not submit occupational mix survey data. That section authorizes us to provide for exceptions and adjustments to the payment amounts under IPPS as the Secretary deems appropriate. We also indicated that we would address this issue in the FY 2008 IPPS proposed rule. In the FY 2008 IPPS proposed rule, we solicited comments and suggestions for a hospital-specific penalty for hospitals that do not submit occupational mix survey data. In response to the FY 2008 IPPS proposed rule, some commenters suggested a 1-percent to 2-percent reduction in the hospital's wage index value or a set percentage of the standardized amount. We noted that any penalty that we would determine for nonresponsive hospitals would apply to a future wage index, not the FY 2008 wage index. In the FY 2008 final rule with comment period, we assigned nonresponsive hospitals the average occupational mix adjustment for the labor market area. For areas where no hospital submitted survey data, we applied the national occupational mix adjustment factor of 1.0000 in calculating the area's FY 2008 occupational mix adjusted wage index. We appreciate the suggestions we received regarding future penalties for hospitals that do not submit occupational mix survey data. We stated in the FY 2008 final rule with comment period that we may consider proposing a policy to penalize hospitals that do not submit occupational mix survey data for FY 2010, the first year of the application of the new 2007-2008 occupational mix survey, and that we expected that any such penalty would be proposed in the FY 2009 IPPS proposed rule so hospitals would be aware of the policy before the deadline for submitting the data to the fiscal intermediaries/MAC. At this time, however, we are not proposing a penalty for FY 2010. Rather, we are reserving the right to propose a penalty in the FY 2010 IPPS proposed rule, once we collect and analyze the FY 2007-2008 occupational mix survey data. Hospitals are still on notice that any failure to submit occupational mix data for the FY 2007-2008 survey year may result in a penalty in FY 2010, thus achieving our policy goal of ensuring that hospitals are aware of the consequences of failure to submit data in response to the most recent survey. 3. 2007-2008 Occupational Mix Survey for the FY 2010 Wage Index As stated earlier, section 304(c) of Pub. L. 106-554 amended section 1886(d)(3)(E) of the Act to require CMS to collect data every 3 years on the occupational mix of employees for each short-term, acute care hospital participating in the Medicare program. We used occupational mix data collected on the 2006 survey to compute the proposed occupational mix adjustment for FY 2009. In the FY 2008 IPPS final rule with comment period (72 FR 47315), we discussed how we modified the occupational mix survey. The revised 2007-2008 occupational mix survey provides for the collection of hospital-specific wages and hours data for the 1-year period of July 1, 2007, through June 30, 2008, additional clarifications to the survey instructions, the elimination of the registered nurse subcategories, some refinements to the definitions of the occupational categories, and the inclusion of additional cost centers that typically provide nursing services. The revised 2007-2008 occupational mix survey will be applied beginning with the FY 2010 wage index. On February 2, 2007, we published in the 
                        **Federal Register**
                         a notice soliciting comments on the proposed revisions to the occupational mix survey (72 FR 5055). The comment period for the notice ended on April 3, 2007. After considering the comments we received, we made a few minor editorial changes 
                        ( print page 23629)
                        and published the final 2007-2008 occupational mix survey on September 14, 2007 (72 FR 52568). OMB approved the survey without change on February 1, 2008 (OMB Control Number 0938 0907). The 2007-2008 Medicare occupational mix survey (Form CMS-10079 (2008)) is available on the CMS Web site at: 
                        *http://www.cms.hhs.gov/​AcuteInpatientPPS/​WIFN/​list.asp#TopOfPage*, and through the fiscal intermediaries/MAC. Hospitals must submit their completed surveys to their fiscal intermediaries/MAC by September 1, 2008. The preliminary, unaudited 2007-2008 occupational mix survey data will be released in early October 2008, along with the FY 2006 Worksheet S-3 wage data, for the FY 2010 wage index review and correction process. E. Worksheet S-3 Wage Data for the Proposed FY 2009 Wage Index The proposed FY 2009 wage index values (to be effective for hospital discharges occurring on or after October 1, 2008, and before October 1, 2009) in section II.B. of the Addendum to this proposed rule are based on the data collected from the Medicare cost reports submitted by hospitals for cost reporting periods beginning in FY 2005 (the FY 2008 wage index was based on FY 2004 wage data). 1. Included Categories of Costs The proposed FY 2009 wage index includes the following categories of data associated with costs paid under the IPPS (as well as outpatient costs): Salaries and hours from short-term, acute care hospitals (including paid lunch hours and hours associated with military leave and jury duty).
                    Home office costs and hours.
                    Certain contract labor costs and hours (which includes direct patient care, certain top management, pharmacy, laboratory, and nonteaching physician Part A services, and certain contract indirect patient care services (as discussed in the FY 2008 final rule with comment period (72 FR 47315).
                    Wage-related costs, including pensions and other deferred compensation costs. We note that, on March 28, 2008, CMS published a technical clarification to the cost reporting instructions for pension and deferred compensation costs (sections 2140 through 2142.7 of the Provider Reimbursement Manual, Part I). These instructions are used for developing pension and deferred compensation costs for purposes of the wage index, as discussed in the instructions for Worksheet S-3, Part II, Lines 13 through 20 and in the FY 2006 final rule (70 FR 47369). 2. Excluded Categories of Costs Consistent with the wage index methodology for FY 2008, the proposed wage index for FY 2009 also excludes the direct and overhead salaries and hours for services not subject to IPPS payment, such as SNF services, home health services, costs related to GME (teaching physicians and residents) and certified registered nurse anesthetists (CRNAs), and other subprovider components that are not paid under the IPPS. The proposed FY 2009 wage index also excludes the salaries, hours, and wage-related costs of hospital-based rural health clinics (RHCs), and Federally qualified health centers (FQHCs) because Medicare pays for these costs outside of the IPPS (68 FR 45395). In addition, salaries, hours, and wage-related costs of CAHs are excluded from the wage index, for the reasons explained in the FY 2004 IPPS final rule (68 FR 45397). 3. Use of Wage Index Data by Providers Other Than Acute Care Hospitals Under the IPPS Data collected for the IPPS wage index are also currently used to calculate wage indices applicable to other providers, such as SNFs, home health agencies, and hospices. In addition, they are used for prospective payments to IRFs, IPFs, and LTCHs, and for hospital outpatient services. We note that, in the IPPS rules, we do not address comments pertaining to the wage indices for non-IPPS providers. Such comments should be made in response to separate proposed rules for those providers. F. Verification of Worksheet S-3 Wage Data The wage data for the proposed FY 2009 wage index were obtained from Worksheet S-3, Parts II and III of the FY 2005 Medicare cost reports. Instructions for completing Worksheet S-3, Parts II and III are in the Provider Reimbursement Manual (PRM), Part II, sections 3605.2 and 3605.3. The data file used to construct the proposed wage index includes FY 2005 data submitted to us as of February 29, 2008. As in past years, we performed an intensive review of the wage data, mostly through the use of edits designed to identify aberrant data. We asked our fiscal intermediaries/MAC to revise or verify data elements that resulted in specific edit failures. For the proposed FY 2009 wage index, we identified and excluded 37 providers with data that was too aberrant to include in the proposed wage index, although if data elements for some of these providers are corrected, we intend to include some of these providers in the FY 2009 final wage index. We instructed fiscal intermediaries/MACs to complete their data verification of questionable data elements and to transmit any changes to the wage data no later than April 14, 2008. We believe all unresolved data elements will be resolved by the date the final rule is issued. The revised data will be reflected in the FY 2009 IPPS final rule. In constructing the proposed FY 2009 wage index, we included the wage data for facilities that were IPPS hospitals in FY 2005; inclusive of those facilities that have since terminated their participation in the program as hospitals, as long as those data did not fail any of our edits for reasonableness. We believe that including the wage data for these hospitals is, in general, appropriate to reflect the economic conditions in the various labor market areas during the relevant past period and to ensure that the current wage index represents the labor market area's current wages as compared to the national average of wages. However, we excluded the wage data for CAHs as discussed in the FY 2004 IPPS final rule (68 FR 45397). For this proposed rule, we removed 20 hospitals that converted to CAH status between February 16, 2007, the cut-off date for CAH exclusion from the FY 2008 wage index, and February 18, 2008, the cut-off date for CAH exclusion from the FY 2009 wage index. After removing hospitals with aberrant data and hospitals that converted to CAH status, the proposed FY 2009 wage index is calculated based on 3,533 hospitals. 1. Wage Data for Multicampus Hospitals In the FY 2008 final rule with comment period (72 FR 47317), we discussed our policy for allocating a multicampus hospital's wages and hours data, by full-time equivalent (FTE) staff, among the different labor market areas where its campuses are located. During the FY 2009 wage index desk review process, we requested fiscal intermediaries/MACs to contact multicampus hospitals that had campuses in different labor market areas to collect the data for the allocation. The proposed FY 2009 wage index in this proposed rule includes separate wage data for campuses of three multicampus hospitals. As with the FY 2008 wage index, we allowed hospitals the option of allocating their wages and hours for the FY 2009 wage index based on either FTE staff or discharge data. Again, we 
                        ( print page 23630)
                        are providing this option until a revised cost report is available that will allow a multicampus hospital to report the number of FTEs by location of its different campuses. Two of the three multicampus hospitals chose to have their wage data allocated by their Medicare discharge data. One of the hospitals provided FTE staff data for the allocation. The average hourly wage associated with each geographical location of a multicampus hospital is reflected in Table 2 of the Addendum to this proposed rule. 2. New Orleans' Post-Katrina Wage Index Since 2005 when Hurricane Katrina devastated the Gulf States, we have received numerous comments suggesting that current Medicare payments to hospitals in New Orleans, Louisiana are inadequate, and the wage index does not accurately reflect the increase in labor costs experienced by the city after the storm. The post-Katrina effects on the New Orleans wage index will not be realized in the wage index until FY 2010, when the wage index will be based on cost reporting periods beginning during FY 2006 (that is, beginning on or after October 1, 2005 and before October 1, 2006). In responding to the health-related needs of people affected by the hurricane, the Federal Government, through the Deficit Reduction Act of 2005 (DRA), appropriated $2 billion in FY 2006. These funds allowed the Secretary to make available $160 million in February 2007 to Louisiana, Mississippi, and Alabama for payments to hospitals and skilled nursing facilities facing financial stress because of changing wage rates not yet reflected in Medicare payment methodologies. In March and May 2007, the Department provided two additional DRA grants of $15 million and $35 million, respectively, to Louisiana for professional health care workforce recruitment and sustainability in the greater New Orleans area, namely the Orleans, Jefferson, St. Bernard, and Plaquemines Parishes. In addition, the Department issued a supplemental award of $60 million in provider stabilization grant funding to Louisiana, Mississippi, and Alabama to continue to help health care providers meet changing wage rates not yet reflected by Medicare's payment policies. On July 23, 2007, HHS awarded to Louisiana a new $100 million Primary Care Grant to help increase access to primary care in the Greater New Orleans area. The resulting stabilization and expansion of the community based primary care infrastructure, post Katrina, helps provide a viable alternative to local hospital emergency rooms for all citizens of New Orleans, especially those who are poor and uninsured. In other Department efforts, the OIG has performed an in-depth review of the post-Katrina infrastructure of five New Orleans hospitals, including the hospitals' staffing levels and wage costs. The OIG's final reports and recommendations are scheduled to be published in Spring 2008. G. Method for Computing the Proposed FY 2009 Unadjusted Wage Index The method used to compute the proposed FY 2009 wage index without an occupational mix adjustment follows: *Step 1*
                        —As noted above, we based the proposed FY 2009 wage index on wage data reported on the FY 2005 Medicare cost reports. We gathered data from each of the non-Federal, short-term, acute care hospitals for which data were reported on the Worksheet S-3, Parts II and III of the Medicare cost report for the hospital's cost reporting period beginning on or after October 1, 2004, and before October 1, 2005. In addition, we included data from some hospitals that had cost reporting periods beginning before October 2004 and reported a cost reporting period covering all of FY 2004. These data are included because no other data from these hospitals would be available for the cost reporting period described above, and because particular labor market areas might be affected due to the omission of these hospitals. However, we generally describe these wage data as FY 2005 data. We note that, if a hospital had more than one cost reporting period beginning during FY 2005 (for example, a hospital had two short cost reporting periods beginning on or after October 1, 2004, and before October 1, 2005), we included wage data from only one of the cost reporting periods, the longer, in the wage index calculation. If there was more than one cost reporting period and the periods were equal in length, we included the wage data from the later period in the wage index calculation. Step 2—Salaries—The method used to compute a hospital's average hourly wage excludes certain costs that are not paid under the IPPS. (We note that, beginning with FY 2008 (72 FR 47315), we include lines 22.01, 26.01, and 27.01 of Worksheet S-3, Part II for overhead services in the wage index. However, we note that the wages and hours on these lines are not incorporated into line 101, column 1 of Worksheet A, which, through the electronic cost reporting software, flows directly to line 1 of Worksheet S-3, Part II. Therefore, the first step in the wage index calculation for FY 2009 is to compute a “revised” Line 1, by adding to the Line 1 on Worksheet S-3, Part II (for wages and hours respectively) the amounts on Lines 22.01, 26.01, and 27.01.) In calculating a hospital's average salaries plus wage-related costs, we subtract from Line 1 (total salaries) the GME and CRNA costs reported on Lines 2, 4.01, 6, and 6.01, the Part B salaries reported on Lines 3, 5 and 5.01, home office salaries reported on Line 7, and exclude salaries reported on Lines 8 and 8.01 (that is, direct salaries attributable to SNF services, home health services, and other subprovider components not subject to the IPPS). We also subtract from Line 1 the salaries for which no hours were reported. To determine total salaries plus wage-related costs, we add to the net hospital salaries the costs of contract labor for direct patient care, certain top management, pharmacy, laboratory, and nonteaching physician Part A services (Lines 9 and 10), home office salaries and wage-related costs reported by the hospital on Lines 11 and 12, and nonexcluded area wage-related costs (Lines 13, 14, and 18). We note that contract labor and home office salaries for which no corresponding hours are reported are not included. In addition, wage-related costs for nonteaching physician Part A employees (Line 18) are excluded if no corresponding salaries are reported for those employees on Line 4. *Step 3*
                        —Hours—With the exception of wage-related costs, for which there are no associated hours, we compute total hours using the same methods as described for salaries in Step 2. *Step 4*
                        —For each hospital reporting both total overhead salaries and total overhead hours greater than zero, we then allocate overhead costs to areas of the hospital excluded from the wage index calculation. First, we determine the ratio of excluded area hours (sum of Lines 8 and 8.01 of Worksheet S-3, Part II) to revised total hours (Line 1 minus the sum of Part II, Lines 2, 3, 4.01, 5, 5.01, 6, 6.01, 7, and Part III, Line 13 of Worksheet S-3). We then compute the amounts of overhead salaries and hours to be allocated to excluded areas by multiplying the above ratio by the total overhead salaries and hours reported on Line 13 of Worksheet S-3, Part III. Next, we compute the amounts of overhead wage-related costs to be allocated to excluded areas using three steps: (1) We determine the ratio of overhead hours (Part III, Line 13 minus the sum of lines 22.01, 26.01, and 27.01) to revised hours excluding the sum of lines 22.01, 26.01, and 27.01 (Line 1 minus the sum of 
                        ( print page 23631)
                        Lines 2, 3, 4.01, 5, 5.01, 6, 6.01, 7, 8, 8.01, 22.01, 26.01, and 27.01). (We note that for the FY 2008 and subsequent wage index calculations, we are excluding the sum of lines 22.01, 26.01, and 27.01 from the determination of the ratio of overhead hours to revised hours, since hospitals typically do not provide fringe benefits (wage-related costs) to contract personnel. Therefore, it is not necessary for the wage index calculation to exclude overhead wage-related costs for contract personnel. Further, if a hospital does contribute to wage-related costs for contracted personnel, the instructions for lines 22.01, 26.01, and 27.01 require that associated wage-related costs be combined with wages on the respective contract labor lines.); (2) we compute overhead wage-related costs by multiplying the overhead hours ratio by wage-related costs reported on Part II, Lines 13, 14, and 18; and (3) we multiply the computed overhead wage-related costs by the above excluded area hours ratio. Finally, we subtract the computed overhead salaries, wage-related costs, and hours associated with excluded areas from the total salaries (plus wage-related costs) and hours derived in Steps 2 and 3. *Step 5*
                        —For each hospital, we adjust the total salaries plus wage-related costs to a common period to determine total adjusted salaries plus wage-related costs. To make the wage adjustment, we estimate the percentage change in the employment cost index (ECI) for compensation for each 30-day increment from October 14, 2003, through April 15, 2005, for private industry hospital workers from the BLS' 
                        *Compensation and Working Conditions.*
                         We use the ECI because it reflects the price increase associated with total compensation (salaries plus fringes) rather than just the increase in salaries. In addition, the ECI includes managers as well as other hospital workers. This methodology to compute the monthly update factors uses actual quarterly ECI data and assures that the update factors match the actual quarterly and annual percent changes. We also note that, since April 2006 with the publication of March 2006 data, the BLS' ECI uses a different classification system, the North American Industrial Classification System (NAICS), instead of the Standard Industrial Codes (SICs), which no longer exist. We have consistently used the ECI as the data source for our wages and salaries and other price proxies in the IPPS market basket and are not proposing to make any changes to the usage at this time. The factors used to adjust the hospital's data were based on the midpoint of the cost reporting period, as indicated below. Midpoint of cost reporting period
After
Before
Adjustment factor10/14/2004
11/15/2004
1.0539011/14/2004
12/15/2004
1.0503512/14/2004
01/15/2005
1.0469001/14/2005
02/15/2005
1.0434202/14/2005
03/15/2005
1.0399203/14/2005
04/15/2005
1.0364104/14/2005
05/15/2005
1.0329105/14/2005
06/15/2005
1.0294006/14/2005
07/15/2005
1.0259607/14/2005
08/15/2005
1.0226408/14/2005
09/15/2005
1.0194309/14/2005
10/15/2005
1.0162710/14/2005
11/15/2005
1.0130811/14/2005
12/15/2005
1.0098712/14/2005
01/15/2006
1.0066101/14/2006
02/15/2006
1.0033302/14/2006
03/15/2006
1.0000003/14/2006
04/15/2006
0.99670
 For example, the midpoint of a cost reporting period beginning January 1, 2005, and ending December 31, 2005, is June 30, 2005. An adjustment factor of 1.02596 would be applied to the wages of a hospital with such a cost reporting period. In addition, for the data for any cost reporting period that began in FY 2005 and covered a period of less than 360 days or more than 370 days, we annualize the data to reflect a 1-year cost report. Dividing the data by the number of days in the cost report and then multiplying the results by 365 accomplishes annualization. *Step 6—*
                        Each hospital is assigned to its appropriate urban or rural labor market area before any reclassifications under section 1886(d)(8)(B), section 1886(d)(8)(E), or section 1886(d)(10) of the Act. Within each urban or rural labor market area, we add the total adjusted salaries plus wage-related costs obtained in Step 5 for all hospitals in that area to determine the total adjusted salaries plus wage-related costs for the labor market area. *Step 7—*
                        We divide the total adjusted salaries plus wage-related costs obtained under both methods in Step 6 by the sum of the corresponding total hours (from Step 4) for all hospitals in each labor market area to determine an average hourly wage for the area. *Step 8—*
                        We add the total adjusted salaries plus wage-related costs obtained in Step5 for all hospitals in the Nation and then divide the sum by the national sum of total hours from Step 4 to arrive at a national average hourly wage. Using the data as described above, the proposed national average hourly wage (unadjusted for occupational mix) is $32.2489. *Step 9—*
                        For each urban or rural labor market area, we calculate the hospital wage index value, unadjusted for occupational mix, by dividing the area average hourly wage obtained in Step 7 by the national average hourly wage computed in Step 8. *Step 10—*
                        Following the process set forth above, we develop a separate Puerto Rico-specific wage index for purposes of adjusting the Puerto Rico standardized amounts. (The national Puerto Rico standardized amount is adjusted by a wage index calculated for all Puerto Rico labor market areas based on the national average hourly wage as described above.) We add the total adjusted salaries plus wage-related costs (as calculated in Step 5) for all hospitals in Puerto Rico and divide the sum by the total hours for Puerto Rico (as calculated in Step 4) to arrive at an overall proposed average hourly wage (unadjusted for occupational mix) of $13.7956 for Puerto Rico. For each labor market area in Puerto Rico, we calculate the Puerto Rico-specific wage index value by dividing the area average hourly wage (as calculated in Step 7) by the overall Puerto Rico average hourly wage. *Step 11—*
                        Section 4410 of Pub. L. 105-33 provides that, for discharges on or after October 1, 1997, the area wage index applicable to any hospital that is located in an urban area of a State may not be less than the area wage index applicable to hospitals located in rural areas in that State. For FY 2009, this proposed change would affect 266 hospitals in 69 urban areas. The areas affected by this provision are identified by a footnote in Table 4A in the Addendum of this proposed rule. In the FY 2005 IPPS final rule (69 FR 49109), we adopted the “imputed” floor as a temporary 3-year measure to address a concern by some individuals that hospitals in all-urban States were disadvantaged by the absence of rural hospitals to set a wage index floor in those States. The imputed floor was originally set to expire in FY 2007, but we extended it an additional year in the FY 2008 IPPS final rule with comment period (72FR47321). As explained in section III.B.2.b. of the preamble of this proposed rule, we are proposing to extend the imputed floor for an additional 3 years, through FY 2011. H. Analysis and Implementation of the Proposed Occupational Mix Adjustment and the Proposed FY 2009 Occupational Mix Adjusted Wage Index As discussed in section III.D. of this preamble, for FY 2009, we are proposing to apply the occupational mix adjustment to 100 percent of the FY 
                        ( print page 23632)
                        2009 wage index. We calculated the occupational mix adjustment using data from the 2006 occupational mix survey data, using the methodology described in section III.D.3. of this preamble. Using the 1st and 2nd quarter occupational mix survey data and applying the occupational mix adjustment to 100 percent of the proposed FY2009 wage index results in a proposed national average hourly wage of $32.2252 and a proposed Puerto-Rico specific average hourly wage of $13.7851. After excluding data of hospitals that either submitted aberrant data that failed critical edits, or that do not have FY 2005 Worksheet S-3 cost report data for use in calculating the proposed FY2009 wage index, we calculated the proposed FY 2009 wage index using the occupational mix survey data from 3,364 hospitals. Using the Worksheet S-3 cost report data of 3,533 hospitals and occupational mix 1st and/or 2nd quarter survey data from 3,364 hospitals represents a 95.2 percent survey response rate. The proposed FY2009 national average hourly wages for each occupational mix nursing subcategory as calculated in Step 2 of the occupational mix calculation are as follows: Occupational mix nursing subcategory
Average hourly wageNational RN Management
$38.6341National RN Staff
$33.4795National LPN
$19.2316National Nurse Aides, Orderlies, and Attendants
$13.6954National Medical Assistants
$15.7714National Nurse Category
$28.7291
 The proposed national average hourly wage for the entire nurse category as computed in Step 5 of the occupational mix calculation is $28.7291. Hospitals with a nurse category average hourly wage (as calculated in Step 4) of greater than the national nurse category average hourly wage receive an occupational mix adjustment factor (as calculated in Step 6) of less than 1.0. Hospitals with a nurse category average hourly wage (as calculated in Step 4) of less than the national nurse category average hourly wage receive an occupational mix adjustment factor (as calculated in Step 6) of greater than 1.0. Based on the January through June 2006 occupational mix survey data, we determined (in Step 7 of the occupational mix calculation) that the proposed national percentage of hospital employees in the Nurse category is 42.99 percent, and the proposed national percentage of hospital employees in the All Other Occupations category is 57.01 percent. At the CBSA level, the percentage of hospital employees in the Nurse category ranged from a low of 27.26 percent in one CBSA, to a high of 85.30 percent in another CBSA. The proposed wage index values for FY 2009 (except those for hospitals receiving wage index adjustments under section 1886(d)(13) of the Act) are shown in Tables 4A, 4B, 4C, and 4F in the Addendum to this proposed rule. Tables 3A and 3B in the Addendum to this proposed rule list the 3-year average hourly wage for each labor market area before the redesignation of hospitals based on FYs 2007, 2008, and 2009 cost reporting periods. Table 3A lists these data for urban areas and Table 3B lists these data for rural areas. In addition, Table 2 in the Addendum to this proposed rule includes the adjusted average hourly wage for each hospital from the FY 2003 and FY 2004 cost reporting periods, as well as the FY 2005 period used to calculate the proposed FY 2009 wage index. The 3-year averages are calculated by dividing the sum of the dollars (adjusted to a common reporting period using the method described previously) across all 3 years, by the sum of the hours. If a hospital is missing data for any of the previous years, its average hourly wage for the 3-year period is calculated based on the data available during that period. The proposed wage index values in Tables 2, 4A, 4B, 4C, and 4F and the average hourly wages in Tables 2, 3A, and 3B in the Addendum to this proposed rule include the proposed occupational mix adjustment. The proposed wage index values in Tables 2, 4A, 4B, and 4C also include the proposed State-specific rural floor and imputed floor budget neutrality adjustments that are discussed in section III.B.2. of this preamble. The proposed State budget neutrality adjustments for the rural and imputed floors are included in Tables 4D-1 and 4D-2 in the Addendum to this proposed rule. I. Proposed Revisions to the Wage Index Based on Hospital Redesignations 1. General Under section 1886(d)(10) of the Act, the MGCRB considers applications by hospitals for geographic reclassification for purposes of payment under the IPPS. Hospitals must apply to the MGCRB to reclassify 13 months prior to the start of the fiscal year for which reclassification is sought (generally by September 1). Generally, hospitals must be proximate to the labor market area to which they are seeking reclassification and must demonstrate characteristics similar to hospitals located in that area. The MGCRB issues its decisions by the end of February for reclassifications that become effective for the following fiscal year (beginning October 1). The regulations applicable to reclassifications by the MGCRB are located in 42 CFR 412.230 through 412.280. Section 1886(d)(10)(D)(v) of the Act provides that, beginning with FY 2001, a MGCRB decision on a hospital reclassification for purposes of the wage index is effective for 3 fiscal years, unless the hospital elects to terminate the reclassification. Section 1886(d)(10)(D)(vi) of the Act provides that the MGCRB must use average hourly wage data from the 3 most recently published hospital wage surveys in evaluating a hospital's reclassification application for FY 2003 and any succeeding fiscal year. Section 304(b) of Pub. L. 106-554 provides that the Secretary must establish a mechanism under which a statewide entity may apply to have all of the geographic areas in the State treated as a single geographic area for purposes of computing and applying a single wage index, for reclassifications beginning in FY 2003. The implementing regulations for this provision are located at 42 CFR 412.235. Section 1886(d)(8)(B) of the Act requires the Secretary to treat a hospital located in a rural county adjacent to one or more urban areas as being located in the MSA to which the greatest number of workers in the county commute, if the rural county would otherwise be considered part of an urban area under the standards for designating MSAs and if the commuting rates used in determining outlying counties were determined on the basis of the aggregate number of resident workers who commute to (and, if applicable under the standards, from) the central county or counties of 
                        *all*
                         contiguous MSAs. In light of the CBSA definitions and the Census 2000 data that we implemented for FY 2005 (69 FR 49027), we undertook to identify those counties meeting these criteria. Eligible counties are discussed and identified under section III.I.5. of this preamble. 2. Effects of Reclassification/Redesignation Section 1886(d)(8)(C) of the Act provides that the application of the wage index to redesignated hospitals is dependent on the hypothetical impact that the wage data from these hospitals would have on the wage index value for the area to which they have been redesignated. These requirements for determining the wage index values for 
                        ( print page 23633)
                        redesignated hospitals are applicable both to the hospitals deemed urban under section 1886(d)(8)(B) of the Act and hospitals that were reclassified as a result of the MGCRB decisions under section 1886(d)(10) of the Act. Therefore, as provided in section 1886(d)(8)(C) of the Act, the wage index values were determined by considering the following: If including the wage data for the redesignated hospitals would reduce the wage index value for the area to which the hospitals are redesignated by 1 percentage point or less, the area wage index value determined exclusive of the wage data for the redesignated hospitals applies to the redesignated hospitals.
                    If including the wage data for the redesignated hospitals reduces the wage index value for the area to which the hospitals are redesignated by more than 1 percentage point, the area wage index determined inclusive of the wage data for the redesignated hospitals (the combined wage index value) applies to the redesignated hospitals.
                    If including the wage data for the redesignated hospitals increases the wage index value for the urban area to which the hospitals are redesignated, both the area and the redesignated hospitals receive the combined wage index value. Otherwise, the hospitals located in the urban area receive a wage index excluding the wage data of hospitals redesignated into the area. Rural areas whose wage index values would be reduced by excluding the wage data for hospitals that have been redesignated to another area continue to have their wage index values calculated as if no redesignation had occurred (otherwise, redesignated rural hospitals are excluded from the calculation of the rural wage index). The wage index value for a redesignated rural hospital cannot be reduced below the wage index value for the rural areas of the State in which the hospital is located. CMS has also adopted the following policies: The wage data for a reclassified urban hospital is included in both the wage index calculation of the area to which the hospital is reclassified (subject to the rules described above) and the wage index calculation of the urban area where the hospital is physically located.
                    In cases where urban hospitals have reclassified to rural areas under42 CFR 412.103, the urban hospital wage data are: (a) Included in the rural wage index calculation, unless doing so would reduce the rural wage index; and (b) included in the urban area where the hospital is physically located. 3. FY 2009 MGCRB Reclassifications Under section 1886(d)(10) of the Act, the MGCRB considers applications by hospitals for geographic reclassification for purposes of payment under the IPPS. The specific procedures and rules that apply to the geographic reclassification process are outlined in 42 CFR 412.230 through 412.280. At the time this proposed rule was constructed, the MGCRB had completed its review of FY 2009 reclassification requests. There were 314 hospitals approved for wage index reclassifications by the MGCRB for FY 2009. Because MGCRB wage index reclassifications are effective for 3 years, hospitals reclassified during FY 2007 or FY 2008 are eligible to continue to be reclassified based on prior reclassifications to current MSAs during FY 2009. There were 175 hospitals approved for wage index reclassifications in FY 2007 and 324 hospitals approved for wage index reclassifications in FY 2008. Of all of the hospitals approved for reclassification for FY 2007, FY 2008, and FY 2009, 813 hospitals are in a reclassification status for FY 2009. Under 42 CFR 412.273, hospitals that have been reclassified by the MGCRB are permitted to withdraw their applications within 45 days of the publication of a proposed rule. The request for withdrawal of an application for reclassification or termination of an existing 3-year reclassification that would be effective in FY 2009 must be received by the MGCRB within 45 days of the publication of this proposed rule. If a hospital elects to withdraw its wage index application after the MGCRB has issued its decision, but within 45 days of publication of this proposed rule date, it may later cancel its withdrawal in a subsequent year and request the MGCRB to reinstate its wage index reclassification for the remaining fiscal year(s) of the 3-year period (42 CFR 412.273(b)(2)(i)). The request to cancel a prior withdrawal or termination must be in writing to the MGCRB no later than the deadline for submitting reclassification applications for the following fiscal year (42 CFR 412.273(d)). For further information about withdrawing, terminating, or canceling a previous withdrawal or termination of a 3-year reclassification for wage index purposes, we refer the reader to 42 CFR 412.273, as well as the August 1, 2002 IPPS final rule (67 FR 50065), and the August 1, 2001 IPPS final rule (66 FR 39887). Changes to the wage index that result from withdrawals of requests for reclassification, wage index corrections, appeals, and the Administrator's review process will be incorporated into the wage index values published in the FY 2009 final rule. These changes may affect not only the wage index value for specific geographic areas, but also the wage index value redesignated hospitals receive; that is, whether they receive the wage index that includes the data for both the hospitals already in the area and the redesignated hospitals. Further, the wage index value for the area from which the hospitals are redesignated may be affected. Applications for FY 2010 reclassifications are due to the MGCRB by September 2, 2008 (the first working day of September 2008). We note that this is also the deadline for canceling a previous wage index reclassification withdrawal or termination under 42 CFR 412.273(d). Applications and other information about MGCRB reclassifications may be obtained, beginning in mid-July 2008, via the CMS Internet Web site at: 
                        *http://cms.hhs.gov/​providers/​prrb/​mgcinfo.asp,*
                         or by calling the MGCRB at (410) 786-1174. The mailing address of the MGCRB is: 2520 Lord Baltimore Drive, Suite L, Baltimore, MD 21244-2670. 4. FY 2008 Policy Clarifications and Revisions We note below several policies related to geographic reclassification that were clarified or revised in the FY 2008 IPPS final rule with comment period (72 FR 47333): *Reinstating Reclassifications*
                        —As provided for in 42 CFR 412.273(b)(2), once a hospital (or hospital group) accepts a newly approved reclassification, any previous reclassification is permanently terminated.
                    *Geographic Reclassification for Multicampus Hospitals*
                        —Because campuses of a multicampus hospital can now have their wages and hours data allocated by FTEs or discharge data, a hospital campus located in a geographic area distinct from the geographic area associated with the provider number of the multicampus hospital will have official wage data to supplement an individual or group reclassification application (§ 412.230(d)(2)(v)).
                    *New England Deemed Counties*
                        —Hospitals in New England deemed counties are treated the same as Lugar hospitals in calculating the wage index. That is, the area is considered rural, but the hospitals within the area are deemed to be urban (§ 412.64(b)(3)(ii)).
                    *“Fallback” Reclassifications*
                        —A hospital will automatically be given its most recently approved reclassification 
                        ( print page 23634)
                        (thereby permanently terminating any previously approved reclassifications) unless it provides written notice to the MGCRB within 45 days of publication of the notice of proposed rulemaking that it wishes to withdraw its most recently approved reclassification and “fall back” to either its prior reclassification or its home area wage index for the following fiscal year. 5. Redesignations of Hospitals Under Section 1886(d)(8)(B) of the Act Section 1886(d)(8)(B) of the Act requires us to treat a hospital located in a rural county adjacent to one or more urban areas as being located in the MSA if certain criteria are met. Effective beginning FY 2005, we use OMB's 2000 CBSA standards and the Census 2000 data to identify counties in which hospitals qualify under section 1886(d)(8)(B) of the Act to receive the wage index of the urban area. Hospitals located in these counties have been known as “Lugar” hospitals and the counties themselves are often referred to as “Lugar” counties. We provide the proposed FY 2009 chart below with the listing of the rural counties containing the hospitals designated as urban under section 1886(d)(8)(B) of the Act. For discharges occurring on or after October 1, 2008, hospitals located in the rural county in the first column of this chart will be redesignated for purposes of using the wage index of the urban area listed in the second column. Rural Counties Containing Hospitals Redesignated as Urban Under Section 1886(D)(8)(B) of the Act
[Based on CBSAs and Census 2000 Data]
Rural county
CBSACherokee, AL
Rome, GAMacon, AL
Auburn-Opelika, ALTalladega, AL
Anniston-Oxford, ALHot Springs, AR
Hot Springs, ARWindham, CT
Hartford-West Hartford-East Hartford, CTBradford, FL
Gainesville, FLHendry, FL
West Palm Beach-Boca Raton-Boynton, FLLevy, FL
Gainesville, FLWalton, FL
Fort Walton Beach-Crestview-Destin, FLBanks, GA
Gainesville, GAChattooga, GA
Chattanooga, TN-GAJackson, GA
Atlanta-Sandy Springs-Marietta, GALumpkin, GA
Atlanta-Sandy Springs-Marietta, GAMorgan, GA
Atlanta-Sandy Springs-Marietta, GAPeach, GA
Macon, GAPolk, GA
Atlanta-Sandy Springs-Marietta, GATalbot, GA
Columbus, GA-ALBingham, ID
Idaho Falls, IDChristian, IL
Springfield, ILDeWitt, IL
Bloomington-Normal, ILIroquois, IL
Kankakee-Bradley, ILLogan, IL
Springfield, ILMason, IL
Peoria, ILOgle, IL
Rockford, ILClinton, IN
Lafayette, INHenry, IN
Indianapolis-Carmel, INSpencer, IN
Evansville, IN-KYStarke, IN
Gary, INWarren, IN
Lafayette, INBoone, IA
Ames, IABuchanan, IA
Waterloo-Cedar Falls, IACedar, IA
Iowa City, IAAllen, KY
Bowling Green, KYAssumption Parish, LA
Baton Rouge, LASt. James Parish, LA
Baton Rouge, LAAllegan, MI
Holland-Grand Haven, MIMontcalm, MI
Grand Rapids-Wyoming, MIOceana, MI
Muskegon-Norton Shores, MIShiawassee, MI
Lansing-East Lansing, MITuscola, MI
Saginaw-Saginaw Township North, MIFillmore, MN
Rochester, MNDade, MO
Springfield, MOPearl River, MS
Gulfport-Biloxi, MSCaswell, NC
Burlington, NCDavidson, NC
Greensboro-High Point, NCGranville, NC
Durham, NCHarnett, NC
Raleigh-Cary, NCLincoln, NC
Charlotte-Gastonia-Concord, NC-SCPolk, NC
Spartanburg, NCLos Alamos, NM
Santa Fe, NMLyon, NV
Carson City, NVCayuga, NY
Syracuse, NYColumbia, NY
Albany-Schenectady-Troy, NYGenesee, NY
Rochester, NY( print page 23635)Greene, NY
Albany-Schenectady-Troy, NYSchuyler, NY
Ithaca, NYSullivan, NY
Poughkeepsie-Newburgh-Middletown, NYWyoming, NY
Buffalo-Niagara Falls, NYAshtabula, OH
Cleveland-Elyria-Mentor, OHChampaign, OH
Springfield, OHColumbiana, OH
Youngstown-Warren-Boardman, OH-PACotton, OK
Lawton, OKLinn, OR
Corvallis, ORAdams, PA
York-Hanover, PAClinton, PA
Williamsport, PAGreene, PA
Pittsburgh, PAMonroe, PA
Allentown-Bethlehem-Easton, PA-NJSchuylkill, PA
Reading, PASusquehanna, PA
Binghamton, NYClarendon, SC
Sumter, SCLee, SC
Sumter, SCOconee, SC
Greenville, SCUnion, SC
Spartanburg, SCMeigs, TN
Cleveland, TNBosque, TX
Waco, TXFalls, TX
Waco, TXFannin, TX
Dallas-Plano-Irving, TXGrimes, TX
College Station-Bryan, TXHarrison, TX
Longview, TXHenderson, TX
Dallas-Plano-Irving, TXMilam, TX
Austin-Round Rock, TXVan Zandt, TX
Dallas-Plano-Irving, TXWillacy, TX
Brownsville-Harlingen, TXBuckingham, VA
Charlottesville, VAFloyd, VA
Blacksburg-Christiansburg-Radford, VAMiddlesex, VA
Virginia Beach-Norfolk-Newport News, VAPage, VA
Harrisonburg, VAShenandoah, VA
Winchester, VA-WVIsland, WA
Seattle-Bellevue-Everett, WAMason, WA
Olympia, WAWahkiakum, WA
Longview, WAJackson, WV
Charleston, WVRoane, WV
Charleston, WVGreen, WI
Madison, WIGreen Lake, WI
Fond du Lac, WIJefferson, WI
Milwaukee-Waukesha-West Allis, WIWalworth, WI
Milwaukee-Waukesha-West Allis, WI
 As in the past, hospitals redesignated under section 1886(d)(8)(B) of the Act are also eligible to be reclassified to a different area by the MGCRB. Affected hospitals are permitted to compare the reclassified wage index for the labor market area in Table 4C in the Addendum to this proposed rule into which they have been reclassified by the MGCRB to the wage index for the area to which they are redesignated under section 1886(d)(8)(B) of the Act. Hospitals may withdraw from an MCGRB reclassification within 45 days of the publication of this proposed rule. 6. Reclassifications Under Section 1886(d)(8)(B) of the Act As discussed in last year's FY 2008 IPPS final rule with comment period (72 FR 47336-47337), Lugar hospitals are treated like reclassified hospitals for purposes of determining their applicable wage index and receive the reclassified wage index (Table 4C in the Addendum to this proposed rule) for the urban area to which they have been redesignated. Because Lugar hospitals are treated like reclassified hospitals, when they are seeking reclassification by the MCGRB, they are subject to the rural reclassification rules set forth at 42 CFR 412.230. The procedural rules set forth at § 412.230 list the criteria that a hospital must meet in order to reclassify as a rural hospital. Lugar hospitals are subject to the proximity criteria and payment thresholds that apply to rural hospitals. Specifically, the hospital must be no more than 35 miles from the area to which it seeks reclassification (§ 412.230(b)(1)); and the hospital must show that its average hourly wage is at least 106 percent of the average hourly wage of all other hospitals in the area in which the hospital is located (§ 412.230(d)(1)(iii)(C)). Under current rules, the hospital must also demonstrate that its average hourly wage is equal to at least 82 percent of the average hourly wage of hospitals in the area to which it seeks redesignation (§ 412.230(d)(1)(iv)(C)). However, we are proposing to increase this threshold to 86 percent (as discussed in section III.B.2.a. of this preamble). Hospitals not located in a Lugar County seeking reclassification to the urban area where the Lugar hospitals have been redesignated are not permitted to measure to the Lugar County to demonstrate proximity (no more than 15 miles for an urban 
                        ( print page 23636)
                        hospital, and no more than 35 miles for a rural hospital or the closest urban or rural area for RRCs or SCHs) in order to be reclassified to such urban area. These hospitals must measure to the urban area exclusive of the Lugar County to meet the proximity or nearest urban or rural area requirement. As discussed in the FY 2008 final rule with comment period, we treat New England deemed counties in a manner consistent with how we treat Lugar counties. (We refer readers to 72 FR 47337 for a discussion of this policy.) J. Proposed FY 2009 Wage Index Adjustment Based on Commuting Patterns of Hospital Employees In accordance with the broad discretion under section 1886(d)(13) of the Act, as added by section 505 of Pub. L. 108-173, beginning with FY 2005, we established a process to make adjustments to the hospital wage index based on commuting patterns of hospital employees (the “out-migration” adjustment). The process, outlined in the FY 2005 IPPS final rule (69 FR 49061), provides for an increase in the wage index for hospitals located in certain counties that have a relatively high percentage of hospital employees who reside in the county but work in a different county (or counties) with a higher wage index. Such adjustments to the wage index are effective for 3 years, unless a hospital requests to waive the application of the adjustment. A county will not lose its status as a qualifying county due to wage index changes during the 3-year period, and counties will receive the same wage index increase for those three years. However, a county that qualifies in any given year may no longer qualify after the 3-year period, or it may qualify but receive a different adjustment to the wage index level. Hospitals that receive this adjustment to their wage index are not eligible for reclassification under section 1886(d)(8) or section 1886(d)(10) of the Act. Adjustments under this provision are not subject to the budget neutrality requirements under section 1886(d)(3)(E) of the Act. Hospitals located in counties that qualify for the wage index adjustment are to receive an increase in the wage index that is equal to the average of the differences between the wage indices of the labor market area(s) with higher wage indices and the wage index of the resident county, weighted by the overall percentage of hospital workers residing in the qualifying county who are employed in any labor market area with a higher wage index. Beginning with the FY 2008 wage index, we use post-reclassified wage indices when determining the out-migration adjustment (72 FR 47339). For the proposed FY 2009 wage index, we calculated the out-migration adjustment using the same formula described in the FY 2005 IPPS final rule (69 FR 49064), with the addition of using the post-reclassified wage indices, to calculate the out-migration adjustment. This adjustment is calculated as follows: *Step 1.*
                         Subtract the wage index for the qualifying county from the wage index of each of the higher wage area(s) to which hospital workers commute. *Step 2.*
                         Divide the number of hospital employees residing in the qualifying county who are employed in such higher wage index area by the total number of hospital employees residing in the qualifying county who are employed in any higher wage index area. For each of the higher wage index areas, multiply this result by the result obtained in Step 1. *Step 3.*
                         Sum the products resulting from Step 2 (if the qualifying county has workers commuting to more than one higher wage index area). *Step 4.*
                         Multiply the result from Step 3 by the percentage of hospital employees who are residing in the qualifying county and who are employed in any higher wage index area. These adjustments will be effective for each county for a period of 3 fiscal years. For example, hospitals that received the adjustment for the first time in FY 2008 will be eligible to retain the adjustment for FY 2009. For hospitals in newly qualified counties, adjustments to the wage index are effective for 3 years, beginning with discharges occurring on or after October 1, 2008. Hospitals receiving the wage index adjustment under section 1886(d)(13)(F) of the Act are not eligible for reclassification under sections 1886(d)(8) or (d)(10) of the Act unless they waive the out-migration adjustment. Consistent with our FY 2005, 2006, 2007, and 2008 IPPS final rules, we are proposing that hospitals redesignated under section 1886(d)(8) of the Act or reclassified under section 1886(d)(10) of the Act will be deemed to have chosen to retain their redesignation or reclassification. Section 1886(d)(10) hospitals that wish to receive the out-migration adjustment, rather than their reclassification, should follow the termination/withdrawal procedures specified in 42 CFR 412.273 and section III.I.3. of the preamble of this proposed rule. Otherwise, they will be deemed to have waived the out-migration adjustment. Hospitals redesignated under section 1886(d)(8) of the Act will be deemed to have waived the out-migration adjustment, unless they explicitly notify CMS within 45 days from the publication of this proposed rule that they elect to receive the out-migration adjustment instead. These notifications should be sent to the following address: Centers for Medicare and Medicaid Services, Center for Medicare Management, Attention: Wage Index Adjustment Waivers, Division of Acute Care, Room C4-08-06, 7500 Security Boulevard, Baltimore, MD 21244-1850. Table 4J in the Addendum to this proposed rule lists the proposed out-migration wage index adjustments for FY 2009. Hospitals that are not otherwise reclassified or redesignated under section 1886(d)(8) or section 1886(d)(10) of the Act will automatically receive the listed adjustment. In accordance with the procedures discussed above, redesignated/reclassified hospitals would be deemed to have waived the out-migration adjustment unless CMS is otherwise notified. Hospitals that are eligible to receive the out-migration wage index adjustment and that withdraw their application for reclassification would automatically receive the wage index adjustment listed in Table 4J in the Addendum to this proposed rule. K. Process for Requests for Wage Index Data Corrections The preliminary, unaudited Worksheet S-3 wage data and occupational mix survey data files for the FY 2009 wage index were made available on October 5, 2007, through the Internet on the CMS Web site at: 
                        *http://www.cms.hhs.gov/​AcuteInpatientPPS/​WIFN/​list.asp#TopOfPage.* In the interest of meeting the data needs of the public, beginning with the proposed FY 2009 wage index, we posted an additional public use file on our Web site that reflects the actual data that are used in computing the proposed wage index. The release of this new file does not alter the current wage index process or schedule. We notified the hospital community of the availability of these data as we do with the current public use wage data files through our Hospital Open Door forum. We encourage hospitals to sign up for automatic notifications of information about hospital issues and the scheduling of the Hospital Open Door forums at: 
                        *http://www.cms.hhs.gov/​OpenDoorForums/​.* In a memorandum dated October 5, 2007, we instructed all fiscal 
                        ( print page 23637)
                        intermediaries/MACs to inform the IPPS hospitals they service of the availability of the wage index data files and the process and timeframe for requesting revisions (including the specific deadlines listed below). We also instructed the fiscal intermediaries/MACs to advise hospitals that these data were also made available directly through their representative hospital organizations. If a hospital wished to request a change to its data as shown in the October 5, 2007 wage and occupational mix data files, the hospital was to submit corrections along with complete, detailed supporting documentation to its fiscal intermediary/MAC by December 7, 2007. Hospitals were notified of this deadline and of all other possible deadlines and requirements, including the requirement to review and verify their data as posted on the preliminary wage index data files on the Internet, through the October 5, 2007 memorandum referenced above. In the October 5, 2007 memorandum, we also specified that a hospital requesting revisions to its 1st and/or 2nd quarter occupational mix survey data was to copy its record(s) from the CY 2006 occupational mix preliminary files posted to our Web site in October, highlight the revised cells on its spreadsheet, and submit its spreadsheet(s) and complete documentation to its fiscal intermediary/MAC no later than December 7, 2007. The fiscal intermediaries (or, if applicable, the MACs) notified the hospitals by mid-February 2008 of any changes to the wage index data as a result of the desk reviews and the resolution of the hospitals' early-December revision requests. The fiscal intermediaries/MACs also submitted the revised data to CMS by mid-February 2008. CMS published the proposed wage index public use files that included hospitals' revised wage index data on February 25, 2008. In a memorandum also dated February 25, 2008, we instructed fiscal intermediaries/MACs to notify all hospitals regarding the availability of the proposed wage index public use files and the criteria and process for requesting corrections and revisions to the wage index data. Hospitals had until March 11, 2008 to submit requests to the fiscal intermediaries/MACs for reconsideration of adjustments made by the fiscal intermediaries/MACs as a result of the desk review, and to correct errors due to CMS's or the fiscal intermediary's (or, if applicable, the MAC's) mishandling of the wage index data. Hospitals were also required to submit sufficient documentation to support their requests. After reviewing requested changes submitted by hospitals, fiscal intermediaries/MACs are to transmit any additional revisions resulting from the hospitals' reconsideration requests by April 14, 2008. The deadline for a hospital to request CMS intervention in cases where the hospital disagreed with the fiscal intermediary's (or, if applicable, the MAC's) policy interpretations is April 21, 2008. Hospitals should also examine Table 2 in the Addendum to this proposed rule. Table 2 in the Addendum to this proposed rule contains each hospital's adjusted average hourly wage used to construct the wage index values for the past 3 years, including the FY 2005 data used to construct the proposed FY 2009 wage index. We note that the hospital average hourly wages shown in Table 2 only reflect changes made to a hospital's data and transmitted to CMS by February 29, 2008. We will release the final wage index data public use files in early May 2008 on the Internet at 
                        *http://www.cms.hhs.gov/​AcuteInpatientPPS/​WIFN/​list.asp#TopOfPage.*
                         The May 2008 public use files will be made available solely for the limited purpose of identifying any potential errors made by CMS or the fiscal intermediary/MAC in the entry of the final wage index data that result from the correction process described above (revisions submitted to CMS by the fiscal intermediaries/MACs by April 14, 2008). If, after reviewing the May 2008 final files, a hospital believes that its wage or occupational mix data are incorrect due to a fiscal intermediary or MAC or CMS error in the entry or tabulation of the final data, the hospital should send a letter to both its fiscal intermediary or MAC and CMS that outlines why the hospital believes an error exists and to provide all supporting information, including relevant dates (for example, when it first became aware of the error). CMS and the fiscal intermediaries (or, if applicable, the MACs) must receive these requests no later than June 9, 2008. Requests mailed to CMS should be sent to: Centers for Medicare & Medicaid Services, Center for Medicare Management, Attention: Wage Index Team, Division of Acute Care, C4-08-06, 7500 Security Boulevard, Baltimore, MD 21244-1850. Each request also must be sent to the fiscal intermediary or the MAC. The fiscal intermediary or the MAC will review requests upon receipt and contact CMS immediately to discuss its findings. At this point in the process, that is, after the release of the May 2008 wage index data files, changes to the wage and occupational mix data will only be made in those very limited situations involving an error by the fiscal intermediary or the MAC or CMS that the hospital could not have known about before its review of the final wage index data files. Specifically, neither the fiscal intermediary or the MAC nor CMS will approve the following types of requests: Requests for wage index data corrections that were submitted too late to be included in the data transmitted to CMS by fiscal intermediaries or the MACs on or before April 21, 2008.
                    Requests for correction of errors that were not, but could have been, identified during the hospital's review of the February 25, 2008 wage index public use files.
                    Requests to revisit factual determinations or policy interpretations made by the fiscal intermediary or the MAC or CMS during the wage index data correction process. Verified corrections to the wage index data received timely by CMS and the fiscal intermediaries or the MACs (that is, by June 9, 2008) will be incorporated into the final wage index in the FY 2009 IPPS final rule, which will be effective October 1, 2008. We created the processes described above to resolve all substantive wage index data correction disputes before we finalize the wage and occupational mix data for the FY 2009 payment rates. Accordingly, hospitals that do not meet the procedural deadlines set forth above will not be afforded a later opportunity to submit wage index data corrections or to dispute the fiscal intermediary's (or, if applicable the MAC's) decision with respect to requested changes. Specifically, our policy is that hospitals that do not meet the procedural deadlines set forth above will not be permitted to challenge later, before the Provider Reimbursement Review Board, the failure of CMS to make a requested data revision. (See 
                        *W. A. Foote Memorial Hospital*
                         v. 
                        *Shalala*, No. 99-CV-75202-DT (E.D. Mich. 2001) and 
                        *Palisades General Hospital*
                         v. 
                        *Thompson*, No. 99-1230 (D.D.C. 2003).) We refer the reader also to the FY 2000 final rule (64 FR 41513) for a discussion of the parameters for appealing to the PRRB for wage index data corrections. Again, we believe the wage index data correction process described above provides hospitals with sufficient opportunity to bring errors in their wage and occupational mix data to the fiscal intermediary's (or, if applicable, the MAC's) attention. Moreover, because 
                        ( print page 23638)
                        hospitals will have access to the final wage index data by early May 2008, they have the opportunity to detect any data entry or tabulation errors made by the fiscal intermediary or the MAC or CMS before the development and publication of the final FY 2009 wage index by August 1, 2008, and the implementation of the FY 2009 wage index on October 1, 2008. If hospitals availed themselves of the opportunities afforded to provide and make corrections to the wage and occupational mix data, the wage index implemented on October 1 should be accurate. Nevertheless, in the event that errors are identified by hospitals and brought to our attention after June 9, 2008, we retain the right to make midyear changes to the wage index under very limited circumstances. Specifically, in accordance with 42 CFR 412.64(k)(1) of our existing regulations, we make midyear corrections to the wage index for an area only if a hospital can show that: (1) The fiscal intermediary or the MAC or CMS made an error in tabulating its data; and (2) the requesting hospital could not have known about the error or did not have an opportunity to correct the error, before the beginning of the fiscal year. For purposes of this provision, “before the beginning of the fiscal year” means by the June deadline for making corrections to the wage data for the following fiscal year's wage index. This provision is not available to a hospital seeking to revise another hospital's data that may be affecting the requesting hospital's wage index for the labor market area. As indicated earlier, since CMS makes the wage index data available to hospitals on the CMS Web site prior to publishing both the proposed and final IPPS rules, and the fiscal intermediaries or the MAC notify hospitals directly of any wage index data changes after completing their desk reviews, we do not expect that midyear corrections will be necessary. However, under our current policy, if the correction of a data error changes the wage index value for an area, the revised wage index value will be effective prospectively from the date the correction is made. In the FY 2006 IPPS final rule (70 FR 47385), we revised 42 CFR 412.64(k)(2) to specify that, effective on October 1, 2005, that is beginning with the FY 2006 wage index, a change to the wage index can be made retroactive to the beginning of the Federal fiscal year only when: (1) The fiscal intermediary (or, if applicable, the MAC) or CMS made an error in tabulating data used for the wage index calculation; (2) the hospital knew about the error and requested that the fiscal intermediary (or if applicable the MAC) and CMS correct the error using the established process and within the established schedule for requesting corrections to the wage index data, before the beginning of the fiscal year for the applicable IPPS update (that is, by the June 9, 2008 deadline for the FY 2009 wage index); and (3) CMS agreed that the fiscal intermediary (or if applicable, the MAC) or CMS made an error in tabulating the hospital's wage index data and the wage index should be corrected. In those circumstances where a hospital requested a correction to its wage index data before CMS calculates the final wage index (that is, by the June deadline), and CMS acknowledges that the error in the hospital's wage index data was caused by CMS's or the fiscal intermediary's (or, if applicable, the MAC's) mishandling of the data, we believe that the hospital should not be penalized by our delay in publishing or implementing the correction. As with our current policy, we indicated that the provision is not available to a hospital seeking to revise another hospital's data. In addition, the provision cannot be used to correct prior years' wage index data; it can only be used for the current Federal fiscal year. In other situations where our policies would allow midyear corrections, we continue to believe that it is appropriate to make prospective-only corrections to the wage index. We note that, as with prospective changes to the wage index, the final retroactive correction will be made irrespective of whether the change increases or decreases a hospital's payment rate. In addition, we note that the policy of retroactive adjustment will still apply in those instances where a judicial decision reverses a CMS denial of a hospital's wage index data revision request. L. Labor-Related Share for the Proposed Wage Index for FY 2009 Section 1886(d)(3)(E) of the Act directs the Secretary to adjust the proportion of the national prospective payment system base payment rates that are attributable to wages and wage-related costs by a factor that reflects the relative differences in labor costs among geographic areas. It also directs the Secretary to estimate from time to time the proportion of hospital costs that are labor-related: “The Secretary shall adjust the proportion (as estimated by the Secretary from time to time) of hospitals' costs which are attributable to wages and wage-related costs of the DRG prospective payment rates * * *” We refer to the portion of hospital costs attributable to wages and wage-related costs as the labor-related share. The labor-related share of the prospective payment rate is adjusted by an index of relative labor costs, which is referred to as the wage index. Section 403 of Pub. L. 108-173 amended section 1886(d)(3)(E) of the Act to provide that the Secretary must employ 62 percent as the labor-related share unless this “would result in lower payments to a hospital than would otherwise be made.” However, this provision of Pub. L. 108-173 did not change the legal requirement that the Secretary estimate “from time to time” the proportion of hospitals costs that are “attributable to wages and wage-related costs.” We interpret this to mean that hospitals receive payment based on either a 62-percent labor-related share, or the labor-related share estimated from time to time by the Secretary, depending on which labor-related share resulted in a higher payment. We have continued our research into the assumptions employed in calculating the labor-related share. Our research involves analyzing the compensation share separately for urban and rural hospitals, using regression analysis to determine the proportion of costs influenced by the area wage index, and exploring alternative methodologies to determine whether all or only a portion of professional fees and nonlabor intensive services should be considered labor-related. In the FY 2006 IPPS final rule (70 FR 47392), we presented our analysis and conclusions regarding the methodology for updating the labor-related share for FY 2006. We also recalculated a labor-related share of 69.731 percent, using the FY 2002-based PPS market basket for discharges occurring on or after October 1, 2005. In addition, we implemented this revised and rebased labor-related share in a budget neutral manner, but consistent with section 1886(d)(3)(E) of the Act, we did not take into account the additional payments that would be made as a result of hospitals with a wage index less than or equal to 1.0 being paid using a labor-related share lower than the labor-related share of hospitals with a wage index greater than 1.0. The labor-related share is used to determine the proportion of the national PPS base payment rate to which the area wage index is applied. In this proposed rule, we are not proposing to make any changes to the national average proportion of operating costs that are attributable to wages and salaries, fringe benefits, professional fees, contract labor, and labor intensive services. Therefore, we are proposing to continue to use a labor-related share of 69.731 
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                        percent for discharges occurring on or after October 1, 2008. Tables 1A and 1B in the Addendum to this proposed rule reflect this proposed labor-related share. We note that section 403 of Pub. L. 108-173 amended sections 1886(d)(3)(E) and 1886(d)(9)(C)(iv) of the Act to provide that the Secretary must employ 62 percent as the labor-related share unless this employment “would result in lower payments to a hospital than would otherwise be made.” We also are proposing to continue to use a labor-related share for the Puerto Rico-specific standardized amounts of 58.7 percent for discharges occurring on or after October 1, 2008. Consistent with our methodology for determining the national labor-related share, we added the Puerto Rico-specific relative weights for wages and salaries, fringe benefits, contract labor, nonmedical professional fees, and other labor-intensive services to determine the labor-related share. Puerto Rico hospitals are paid based on 75 percent of the national standardized amounts and 25 percent of the Puerto Rico-specific standardized amounts. For Puerto Rico hospitals, the national labor-related share will always be 62 percent because the wage index for all Puerto Rico hospitals is less than 1.0. A Puerto Rico-specific wage index is applied to the Puerto Rico-specific portion of payments to the hospitals. The labor-related share of a hospital's Puerto Rico-specific rate will be either 62 percent or the Puerto Rico-specific labor-related share depending on which results in higher payments to the hospital. If the hospital has a Puerto Rico-specific wage index of greater than 1.0, we will set the hospital's rates using a labor-related share of 62 percent for the 25 percent portion of the hospital's payment determined by the Puerto Rico standardized amounts because this amount will result in higher payments. Conversely, a hospital with a Puerto Rico-specific wage index of less than 1.0 will be paid using the Puerto Rico-specific labor-related share of 58.7 percent of the Puerto Rico-specific rates because the lower labor-related share will result in higher payments. The proposed Puerto Rico labor-related share of 58.7 percent for FY 2008 is reflected in the Table 1C of the Addendum to this proposed rule. IV. Other Decisions and Proposed Changes to the IPPS for Operating Costs and GME Costs A. Proposed Changes to the Postacute Care Transfer Policy (§ 412.4) 1. Background Existing regulations at § 412.4(a) define discharges under the IPPS as situations in which a patient is formally released from an acute care hospital or dies in the hospital. Section 412.4(b) defines transfers from one acute care hospital to another. Section 412.4(c) establishes the conditions under which we consider a discharge to be a transfer for purposes of our postacute care transfer policy. In transfer situations, the transferring hospital is paid based on a per diem rate for each day of the stay, not to exceed the full MS-DRG payment that would have been made if the patient had been discharged without being transferred. The per diem rate paid to a transferring hospital is calculated by dividing the full MS-DRG payment by the geometric mean length of stay for the MS-DRG. Based on an analysis that showed that the first day of hospitalization is the most expensive (60 FR 5804), our policy generally provides for payment that is double the per diem amount for the first day, with each subsequent day paid at the per diem amount up to the full DRG payment (§ 412.4(f)(1)). Transfer cases are also eligible for outlier payments. The outlier threshold for transfer cases is equal to the fixed-loss outlier threshold for nontransfer cases (adjusted for geographic variations in costs), divided by the geometric mean length of stay for the MS-DRG, multiplied by the length of stay for the case plus one day. The purpose of the IPPS postacute care transfer payment policy is to avoid providing an incentive for a hospital to transfer patients to another hospital, a SNF, or home under a written plan of care for home health services early in the patients” stay in order to minimize costs while still receiving the full MS-DRG payment. The transfer policy adjusts the payments to approximate the reduced costs of transfer cases. Beginning with the FY 2006 IPPS, the regulations at § 412.4 specified that, effective October 1, 2005, a DRG would be subject to the postacute care transfer policy if, based on Version 23.0 of the DRG Definitions Manual (FY 2006), using data from the March 2005 update of FY 2004 MedPAR file, the DRG meets the following criteria: The DRG had a geometric mean length of stay of at least 3 days;
                    The DRG had at least 2,050 postacute care transfer cases; and
                    At least 5.5 percent of the cases in the DRG were discharged to postacute care prior to the geometric mean length of stay for the DRG. In addition, if the DRG was one of a paired set of DRGs based on the presence or absence of a CC or major cardiovascular condition (MCV), both paired DRGs would be included if either one met the three criteria above. If a DRG met the above criteria based on the Version 23.0 DRG Definitions Manual and FY 2004 MedPAR data, we made the DRG subject to the postacute care transfer policy. We noted in the FY 2006 final rule that we would not revise the list of DRGs subject to the postacute care transfer policy annually unless we made a change to a specific CMS DRG. We established this policy to promote certainty and stability in the postacute care transfer payment policy. Annual reviews of the list of CMS DRGs subject to the policy would likely lead to great volatility in the payment methodology with certain DRGs qualifying for the policy in one year, deleted the next year, only to be reinstated the following year. However, we noted that, over time, as treatment practices change, it was possible that some CMS DRGs that qualified for the policy will no longer be discharged with great frequency to postacute care. Similarly, we explained that there may be other CMS DRGs that at that time had a low rate of discharges to postacute care, but which might have very high rates in the future. The regulations at § 412.4 further specify that if a DRG did not exist in Version 23.0 of the DRG Definitions Manual or a DRG included in Version 23.0 of the DRG Definitions Manual is revised, the DRG will be a qualifying DRG if it meets the following criteria based on the version of the DRG Definitions Manual in use when the new or revised DRG first became effective, using the most recent complete year of MedPAR data: The total number of discharges to postacute care in the DRG must equal or exceed the 55th percentile for all DRGs; and
                    The proportion of short-stay discharges to postacute care to total discharges in the DRG exceeds the 55th percentile for all DRGs. A short-stay discharge is a discharge before the geometric mean length of stay for the DRG. A DRG also is a qualifying DRG if it is paired with another DRG based on the presence or absence of a CC or MCV that meets either of the above two criteria. The MS-DRGs that we adopted for FY 2008 were a significant revision to the CMS DRG system (72 FR 47141). Because the MS-DRGs were not reflected in Version 23.0 of the DRG Definitions Manual, consistent with § 412.4, we established policy to recalculate the 55th percentile thresholds in order to determine which MS-DRGs would be subject to the postacute care transfer policy (72 FR 47186 through 47188). Further, under 
                        ( print page 23640)
                        the MS-DRGs, the subdivisions within the base DRGs are different than those under the previous CMS DRGs. Unlike the CMS DRGs, the MS-DRGs are not divided based on the presence or absence of a CC or MCV. Rather, the MS-DRGs have up to three subdivisions based on: (1) The presence of a MCC; (2) the presence of a CC; or (3) the absence of either an MCC or CC. Consistent with our previous policy under which both CMS DRGs in a CC/non-CC pair were qualifying DRGs if one of the pair qualified, we established that each MS-DRG that shared a base MS-DRG will be a qualifying DRG if one of the MS-DRGs that shared the base DRG qualifies. We revised § 412.4(d)(3)(ii) to codify this policy. Similarly, the adoption of the MS-DRGs also necessitated a revision to one of the criteria used in § 412.4(f)(5) of the regulations to determine whether a DRG meets the criteria for payment under the “special payment methodology.” Under the special payment methodology, a case subject to the special payment methodology that is transferred early to a postacute care setting will be paid 50 percent of the total IPPS payment plus the average per diem for the first day of the stay. In addition, the hospital will receive 50 percent of the per diem amount for each subsequent day of the stay, up to the full MS-DRG payment amount. A CMS DRG was subject to the special payment methodology if it met the criteria of § 412.4(f)(5). Section 412.4(f)(5)(iv) specifies that, for discharges occurring on or after October 1, 2005, and prior to October 1, 2007, if a DRG meets the criteria specified under § 412.4(f)(5)(i) through (f)(5)(iii), any DRG that is paired with it based on the presence or absence of a CC or MCV is also subject to the special payment methodology. Given that this criterion was no longer applicable under the MS-DRG system, in the FY 2008 final rule with comment period, we added a new § 412.4(f)(6) (42 FR 47188 and 47410). Section 412.4(f)(6) provides that, for discharges on or after October 1, 2007, if an MS-DRG meets the criteria specified under §§ 412.4(f)(6)(i) through (f)(6)(iii), any other MS-DRG that is part of the same MS-DRG group is also subject to the special payment methodology. We updated this criterion so that it conformed to the changes associated with adopting MS-DRGs for FY 2008. The revision makes an MS-DRG subject to the special payment methodology if it shares a base MS-DRG with an MS-DRG that meets the criteria for receiving the special payment methodology. Section 1886(d)(5)(J) of the Act provides that, effective for discharges on or after October 1, 1998, a “qualified discharge” from one of DRGs selected by the Secretary to a postacute care provider would be treated as a transfer case. This section required the Secretary to define and pay as transfers all cases assigned to one of the DRGs selected by the Secretary, if the individuals are discharged to one of the following postacute care settings: A hospital or hospital unit that is not a subsection 1886(d) hospital. (Section 1886(d)(1)(B) of the Act identifies the hospitals and hospital units that are excluded from the term “subsection (d) hospital” as psychiatric hospitals and units, rehabilitation hospitals and units, children's hospitals, long-term care hospitals, and cancer hospitals.)
                    A SNF (as defined at section1819(a) of the Act).
                    Home health services provided by a home health agency, if the services relate to the condition or diagnosis for which the individual received inpatient hospital services, and if the home health services are provided within an appropriate period (as determined by the Secretary). In the FY 1999 IPPS final rule (63 FR 40975 through 40976 and 40979 through 40981), we specified that a patient discharged to home would be considered transferred to postacute care if the patient received home health services within 3 days after the date of discharge. In addition, in the FY 1999 IPPS final rule, we did not include patients transferred to a swing-bed for skilled nursing care in the definition of postacute care transfer cases (63 FR 40977). 2. Proposed Policy Change Relating to Transfers to Home with a Written Plan for the Provision of Home Health Services As noted above, in the FY 1999 IPPS final rule (63 FR 40975 through 40976 and 40979 through 40981), we determined that 3 days is an appropriate period within which home health services should begin following a beneficiary's discharge to the home in order for the discharge to be considered a “qualified discharge” subject to the payment adjustment for postacute care transfer cases. In that same final rule, we noted that we would monitor whether 3 days would remain an appropriate timeframe. Section 1886(d)(5)(J)(ii)(III) of the Act provides that the discharge of an individual who receives home health services upon discharge will be treated as a transfer if “such services are provided within an appropriate period as determined by the Secretary * * *”. The statute thus confers upon the Secretary the authority to determine an appropriate timeframe for the application of the postacute care transfer policy in cases where home health services commence subsequent to discharge from an acute care hospital. In the FY 1999 final IPPS rule, we established the policy that the postacute care transfer policy would apply to cases in which the home health care begins within 3 days of the discharge from an acute care policy. We noted in that rule that we did not believe that it was appropriate to limit the transfer definition to cases in which home health care begins on the same day as the patient is discharged from the hospital. We observed that data indicated that less than 8 percent of discharged patients who receive home health care begin receiving those services on the date of discharge. It is unreasonable to expect that patients who are discharged later in the day would receive a home health visit that same day. Furthermore, we believed that the financial incentive to delay needed home health care for only a matter of hours would be overwhelming if we limited the timeframe to one day. At the time of that final rule, we explained that we believed that 3 days would be a more appropriate timeframe because it would mitigate the incentive to delay home health services to avoid the application of the postacute care transfer policy, and because a 3-day timeframe was consistent with existing patterns of care. In that final rule, we also noted that a number of commenters had raised issues and questions concerning the proposal to adopt 3 days as the appropriate timeframe for the application of the postacute care transfer policy in these cases. While most of the commenters advocated shorter timeframes, on the grounds that postacute care beginning 3 days after a discharge should not be considered a substitute for inpatient hospital care, others suggested that a 3-day window might still allow for needlessly prolonged hospital care or delayed home health in order to avoid the application of the postacute care transfer policy. Although MedPAC agreed with the commenters who asserted that home health care services furnished after a delay of more than one day may not necessarily be regarded as substituting for inpatient acute care, they also noted that a 3-day window allows for the fact that most home health patients do not receive care every day, as well as for those occasions in which there may be a delay in arranging for the provision of planned care (for 
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                        example, an intervening weekend). The commission also stated that a shorter period may create a stronger incentive to delay the provision of necessary care beyond the window so that the hospital will receive the full DRG payment. In the light of these comments and, in particular, of the concern that a 3-day timeframe still allowed for some incentive to delay necessary home health services in order to avoid the application of the postacute care transfer policy, we indicated that we would continue to monitor this policy in order to track any changes in practices that may indicate the need for revising the window. Since the adoption of this policy in FY 1999, we have continued to receive reports that some providers discharge patients prior to the geometric mean length of stay but intentionally delay home health services beyond 3 days after the acute hospital discharge in order to avoid the postacute care transfer payment adjustment policy. These reports, and the concerns expressed by some commenters in FY 1999 about the adequacy of a 3-day window to reduce such incentives, have prompted us to examine the available data concerning the initiation and program payments for home health care subsequent to discharge from postacute care. We merged the FY 2004 MedPAR file with postacute care bill files matching beneficiary identification numbers and discharge and admission dates and looked at the 10 DRGs that were subject to the postacute care transfer policy from FYs 1999 through 2003 (DRG 14 (Intracranial Hemorrhage and Stroke with Infarction (formerly “Specific Cerebrovascular Disorders Except Transient Ischemic Attack”)); DRG 113 (Amputation for Circulatory System Disorders Except Upper Limb and Toe); DRG 209 (Major Joint Limb Reattachment Procedures of Lower Extremity); DRG 210 (Hip and Femur Procedures Except Major Joint Procedures ≤17 with CC); DRG 211 (Hip and Femur Procedures Except Major Joint Procedures Age ≤17 without CC); DRG 236 (Fractures of Hip and Pelvis); DRG 263 (Skin Graft and/or Debridement for Skin Ulcer or Cellulitis with CC); DRG 264 (Skin Graft and/or Debridement for Skin Ulcer or Cellulitis without CC); DRG 429 (Organic Disturbances and Mental Retardation); and DRG 483 (Tracheostomy with Mechanical Ventiliation 96+ Hours or Principal Diagnosis Except Face, Mouth, and Neck Diagnoses (formerly “Tracheostomy Except for Face, Mouth, and Neck Diagnoses”)). We selected the original 10 “qualified DRGs” because they were the DRGs to which the postacute care transfer policy applied for FYs 1999 through 2003 and because we expect that trends that we found in the data with those DRGs would be likely to accurately reflect provider practices after the inception of the postacute care transfer policy. We expect that provider practices for the original 10 DRGs would be consistent even with the expansion of the DRGs that are subject to the postacute care transfer policy. We note that providers may have even a greater incentive to delay the initiation of home health care in an effort to avoid the postacute care transfer policy now that there are more DRGs to which the policy applies. We compared data on home health services provided to patients who were discharged prior to the geometric mean length of stay to patients who were discharged at or beyond the geometric mean length of stay. For purposes of this analysis, we assumed that home health was the first discharge designation from the acute care hospital setting. The data showed that, on average, the Medicare payment per home health visit was higher for patients who were discharged prior to the geometric mean length of stay (as compared to patients who were discharged at or beyond the geometric mean length of stay). Additionally, we found some evidence in the data suggesting that, for patients discharged prior to the geometric mean length of stay for many DRGs, hospitals may indeed be discharging patients earlier than advisable, providing less than the optimal amount of acute inpatient care, and are instead substituting home health care for inpatient services, resulting in higher home health care payments under the Medicare program. One generally would expect that patients discharged prior to the geometric mean length of stay are genuinely less severely ill than patients discharged at or after the geometric mean length of stay because patients in the former group are judged to be appropriate for discharge after less acute inpatient care. However, our data paint a different picture. For example, the data on the average per day Medicare payments for home health care for those patients who are discharged from the hospital prior to the geometric mean length of stay in the DRGs to which the postacute care transfer policy applies, as compared to Medicare payments for patients discharged from the hospital at or after the geometric mean length of stay, show patterns other than what might be expected if hospitals are generally discharging patients for home health care only after the full amount of acute inpatient care. Specifically, average Medicare payments per home health care visit are consistently higher for patients discharged prior to the geometric mean length of stay than for patients discharged at or after the geometric mean length of stay. The average home health care per visit payments for patients treated for the relevant DRGs and discharged before the geometric mean length of stay are $204 when the initiation of home health care began on the second day after discharge, $199 on the third day, and $182 on the sixth day, compared to $177, $163, and $171, respectively for patients discharged on or after the geometric mean length of stay. Furthermore, the ratio of the payments for these two groups actually increases from 1.16 on the third day after discharge to 1.22 on the fourth day, before falling again to 1.04, 1.07, and 1.08 on the fifth, sixth, and seventh days. This suggests the possibility that home health care for some relatively sicker patients is being delayed until just beyond the 3-day window during which the postacute care transfer policy applies. In the light of these data, we believe that it is appropriate to propose extending the applicable timeframe in order to reduce the incentive for providers to delay home health care when discharging patients from the acute care setting. Further examination of the data indicates that the average per day Medicare payments for home health care for those patients, in the DRGs to which the postacute care transfer policy applies, who are discharged from the hospital prior to the geometric mean length of stay, stabilizes at a somewhat lower amount when the initiation of home health visits begins on the seventh and subsequent days after discharge. Specifically, average payments per visit for this group fall from $182 when home health services began on the sixth day after the acute care hospital discharge to $174 on the seventh day, and then remain relatively steady at $171, $177, and $172 on the eighth, ninth, and tenth days. This suggests that a 7-day period would be an appropriate point at which to establish a new timeframe. The stabilization of average home health care visit payments at and after the seventh day suggests that this may be the point at which the incentives to delay the start of home health care in order to avoid the application of the postacute care transfer policy are reduced. As a consequence of this analysis, in this proposed rule, we are proposing to revise § 412.4(c)(3) to extend the timeframe to within 7 days of discharge to home under a written 
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                        plan for the provision of home health services, effective October 1, 2008. We believe that extending the applicable timeframe will lessen the incentive for providers to delay the start of home health care after discharging patients from the acute care hospital setting. During the comment period on this proposed rule, we plan to continue to search our data on postacute care discharges to home health services. We welcome comments and suggestions on other data analyses that can be performed to determine an appropriate timeframe for which the postacute care transfer policy would apply. In addition to the reasons noted above, we believe that 7 days is currently an appropriate timeframe because we believe that accommodates current practices and it is sufficiently long enough to lessen the likelihood that providers would delay the initiation of necessary home health services. At the same time, we believe that 7 days is narrow enough that we would still expect the majority of the home health services to be related to the condition to which the acute inpatient hospital stay was necessary. Further, we note that there may be some cases for which it is not clinically appropriate to begin home health services immediately following an acute care discharge, and that even when home health services are clinically appropriate sooner than within 7 days of acute care discharge, home health services may not be immediately available. We note that, as we stated in the FY 2000 IPPS final rule (65 FR 47081), if the hospital's continuing care plan for the patient is not related to the purpose of the inpatient hospital admission, a condition code 42 must be entered on the claim. If the continuing care plan is related to the purpose of the inpatient hospital admission but begins after 7 days (formerly after 3 days) of discharge, a condition code 43 must be entered on the claim. The presence of either of these condition codes in conjunction with patient status discharge code 06 (Discharged/Transferred to Home under Care of Organized Home Health Service Organization in Anticipation of Covered Skilled Care) will result in full payment rather than the transfer payment amount. 3. Evaluation of MS-DRGs Under Postacute Care Transfer Policy for FY 2009 For FY 2009, we are not proposing to make any changes to the criteria by which an MS-DRG would qualify for inclusion in the postacute care transfer policy. However, because we are proposing to revise some existing MS-DRGs and to add one new MS-DRG (discussed under section II.G. of this preamble), we are proposing to evaluate those MS-DRGs under our existing postacute care transfer criteria in order to determine whether any of the revised or new MS-DRGs will meet the postacute care transfer criteria for FY 2009. Therefore, for 2009, we are evaluating MS-DRGs 001, 002, 215, 245, 901 through 909, 913 through 923, 955 through 959, and 963 through 965. Any revisions made would not constitute a change to the application of the postacute care transfer policy. A list indicating which MS-DRGs would be subject to the postacute care transfer policy for FY 2009 can be found in Table 5 in the Addendum to this proposed rule. B. Reporting of Hospital Quality Data for Annual Hospital Payment Update (§ 412.64(d)(2)) 1. Background a. Overview CMS is transforming the Medicare program from a passive payer to an active purchaser of higher quality, more efficient health care. Such care will contribute to the sustainability of the Medicare program, encourage the delivery of high quality care while avoiding unnecessary costs, and help ensure high value for beneficiaries. To support this transformation, CMS has worked with stakeholders to develop and implement quality measures, make provider and plan performance public, link payment incentives to reporting on measures, and ultimately is working to link payment to actual performance on these measures. Commonly referred to as value-based purchasing, this policy aligns payment incentives with the quality of care as well as the resources used to deliver care to encourage the delivery of high-value health care. The success of this transformation is supported by and dependent upon an increasing number of widely-agreed upon quality measures. The Medicare program has defined measures of quality in almost every setting and measures some aspect of care for almost all Medicare beneficiaries. These measures include clinical processes, patient perception of their care experience, and, increasingly, outcomes. The Medicare program has established mechanisms for collecting information on these measures, such as QualityNet, an Internet-based process that hospitals use to report all-payer information. Initial voluntary efforts were supplemented beginning in FY 20 05 by a provision in the Medicare Prescription Drug Improvement and Modernization Act (MMA), which provided the full annual payment update only to “subsection (d) hospitals” (that is, hospitals paid under the IPPS) that successfully reported on a set of widely-agreed upon quality measures. Since FY 2007, as required by subsequent legislation (the Deficit Reduction Act (DRA)) the number of quality measures and the amount of the financial incentive have increased. As a result, the great majority of hospitals now report on quality measures for heart failure, heart disease, pneumonia, and surgical infection and received the full annual update for FY 2008. The number of measures has continued to grow and the types of measures have grown as well, with the addition of outcomes measures, such as heart attack and heart failure mortality measures, and the HCAHPS measure of patient satisfaction. In section IV.B.2. of this preamble, we are seeking public comments on proposed additional quality measures. Reporting on these measures provides hospitals a greater awareness of the quality of care they provide and provides actionable information for consumers to make more informed decisions about their health care providers and treatments. Moving beyond reporting to performance, CMS has designed a Hospital Value-Based Purchasing Plan that would link hospital payments to their actual performance on quality measures. In accordance with the DRA, the Plan was submitted to Congress in November 2007. We discuss the Plan more fully in section IV.C. of this preamble. The ongoing CMS Premier Hospital Quality Incentive Demonstration project is another effort linking payments to quality performance. Launched in 2003, the Premier Hospital Quality Incentive Demonstration project promotes measurable improvements in the quality of care, examining whether economic incentives to hospitals are effective at improving the quality of care. Early evidence from the project indicates that linking payments to quality performance can be effective. As required by section 5001(c) the DRA, CMS also has implemented a program intended to encourage the prevention of certain avoidable or preventable hospital-acquired conditions (HACs), including infections, that may occur during a hospital stay. Beginning Octo ber 1, 2007, CMS required hospitals to begin reporting information on Medicare claims specifying whether certain diagnoses were present on admission (POA). Beginning October 1, 2008, CMS will no 
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                        longer pay hospitals for a DRG using the higher-paying CC or MCC associated with one or more of these conditions (if no other condition meeting the higher paying CC or MCC criteria is present) unless the condition was POA (that is, not acquired during the hospital stay). Linking a payment incentive to hospitals’ prevention of avoidable or preventable HACs is a strong approach for encouraging high quality care. Combating these HACs can reduce morbidity and mortality as well as reducing unnecessary costs. In the FY 2008 IPPS final rule with comment period (72 FR 47217), CMS identified eight HACs. In section II.F. of this preamble, CMS is seeking comment on additional proposed conditions. CMS is committed to enhancing these value-based purchasing programs, in close collaboration with stakeholders, through the development and use of new measures for quality reporting, expanded public reporting, greater and more widespread incentives in the payment system for reporting on such measures, and ultimately performance on those measures. These initiatives hold the potential to transform the delivery of health care by rewarding quality of care and delivering higher value to Medicare beneficiaries. A critical element of value-based purchasing is well-accepted measures. Hospitals can then measure their performance relative to other hospitals. Further, this information can be posted for consumers to use to make more informed choices about their care. In this section IV.B. of this preamble, we describe past and current efforts to make this information available and proposals to expand these efforts and make even more useful hospital quality information available to the public. b. Voluntary Hospital Quality Data Reporting In December 2002, the Secretary announced a partnership with several collaborators intended to promote hospital quality improvement and public reporting of hospital quality information. These collaborators included the American Hospital Association (AHA), the Federation of American Hospitals (FAH), the Association of American Medical Colleges (AAMC), the Joint Commission on Accreditation of Healthcare Organizations (the Joint Commission), the National Quality Forum (NQF), the American Medical Association (AMA), the Consumer-Purchaser Disclosure Project, the American Association of Retired Persons (AARP), the American Federation of Labor-Congress of Industrial Organizations (AFL-CIO), the Agency for Healthcare Research and Quality (AHRQ), as well as CMS and others. In July 2003, CMS began the National Voluntary Hospital Reporting Initiative. This initiative is now known as the Hospital Quality Alliance: Improving Care through Information (HQA). We established the following “starter set” of 10 quality measures for voluntary reporting as of November 1, 2003: Heart Attack (Acute Myocardial Infarction or AMI) Was aspirin given to the patient upon arrival to the hospital?
                    Was aspirin prescribed when the patient was discharged?
                    Was a beta blocker given to the patient upon arrival to the hospital?
                    Was a beta blocker prescribed when the patient was discharged?
                    Was an Angiotensin Converting Enzyme (ACE) Inhibitor given for the patient with heart failure? Heart Failure (HF) Did the patient get an assessment of his or her heart function?
                    Was an Angiotensin Converting Enzyme (ACE) Inhibitor given to the patient? Pneumonia (PN) Was an antibiotic given to the patient in a timely way?
                    Had the patient received a pneumococcal vaccination?
                    Was the patient's oxygen level assessed? This starter set of 10 quality measures was endorsed by the NQF. The NQF is a voluntary consensus standard-setting organization established to standardize health care quality measurement and reporting through its consensus development process. In addition, this starter set is a subset of measures currently collected for the Joint Commission as part of its hospital inpatient certification program. We chose these 10 quality measures in order to collect data that would: (1) Provide useful and valid information about hospital quality to the public; (2) provide hospitals with a sense of predictability about public reporting expectations; (3) begin to standardize data and data collection mechanisms; and (4) foster hospital quality improvement. Hospitals submit quality data through the QualityNet secure Web site (formerly known as QualityNet Exchange) 
                        *(www.qualitynet.org).*
                         This Web site meets or exceeds all current Health Insurance Portability and Accountability Act requirements for security of personal health information. Data from this initiative are used to populate the 
                        *Hospital Compare*
                         Web site, 
                        *www.hospitalcompare.hhs.gov.*
                         This Web site assists beneficiaries and the general public by providing information on hospital quality of care for consumers who need to select a hospital. It further serves to encourage consumers to work with their doctors and hospitals to discuss the quality of care hospitals provide to patients, thereby providing an additional incentive to improve the quality of care that they furnish. c. Hospital Quality Data Reporting Under Section 501(b) of Pub. L. 108-173 Section 1886(b)(3)(B)(vii) of the Act, as added by section 501(b) of Pub. L. 108-173, revised the mechanism used to update the standardized amount of payment for inpatient hospital operating costs. Specifically, the statute provided for a reduc tion of 0.4 percentage points to the update percentage increase (also known as the market basket update) for each of FYs 2005 through 2007 for any subsection (d) hospital that does not submit data on a set of 10 quality indicators established by the Secretary as of November 1, 2003. The statute also provided that any reduction would apply only to the fiscal year involved, and would not be taken into account in computing the applicable percentage increase for a subsequent fiscal year. This measure established an incentive for IPPS hospitals to submit data on the quality measures established by the Secretary. We initially implemented section 1886(b)(3)(B)(vii) of the Act in the FY 2005 IPPS final rule (69 FR 49078). In addition, we established the Reporting Hospital Quality Data for Annual Payment Update (RHQDAPU) program and added 42 CFR 412.64(d)(2) to our regulations. We adopted additional requirements under the RHQDAPU program in the FY 2006 IPPS final rule (70 FR 47420). d. Hospital Quality Data Reporting Under Section 5001(a) of Pub. L. 109-171 Section 5001(a) of the Deficit Reduction Act of 2005, Pub. L. 109-171 (DRA), further amended section 1886(b)(3)(B) of the Act to revise the mechanism used to update the standardized amount for payment for hospital inpatient operating costs. Specifically, sections 1886(b)(3)(B)(viii)(I) and (II) of the Act provide that the payment update for FY 2007 and each subsequent fiscal year be reduced by 2.0 percentage points for any subsection (d) hospital that does not 
                        ( print page 23644)
                        submit certain quality data in a form and manner, and at a time, specified by the Secretary. Section 1886(b)(3)(B)(viii)(III) of the Act requires that the Secretary expand the “starter set” of 10 quality measures that were established by the Secretary as of No vember 1, 2003, as the Secretary determines to be appropriate for the measurement of the quality of care furnished by a hospital in inpatient settings. In expanding this set of measures, section 1886(b)(3)(B)(viii)(IV) of the Act requires that, effective for payments beginning with FY 2007, the Secretary begin to adopt the baseline set of performance measures as set forth in a December 2005 report issued by the Institute of Medicine (IOM) of the National Academy of Sciences under section 238(b) of the MMA.[16] The IOM measures include: 21 HQA quality measures (including the “starter set” of 10 quality measures); the HCAHPS patient experience of care survey; and 3 structural measures. The structural measures are: (1) Implementation of computerized provider order entry for prescriptions; (2) staffing of intensive care units with intensivists; and (3) evidence-based hospital referrals. These structural measures constitute the Leapfrog Group's original “three leaps,” and are part of the NQF's 30 Safe Practices for Better Healthcare. Sections 1886(b)(3)(B)(viii)(V) and (VI) of the Act require that, effective for payments beginning with FY 2008, the Secretary add other quality measures that reflect consensus among affected parties, and to the extent feasible and practicable, have been set forth by one or more national consensus building entities, and provide the Secretary with the discretion to replace any quality measures or indicators in appropriate cases, such as where all hospitals are effectively in compliance with a measure, or the measures or indicators have been subsequently shown to not represent the best clinical practice. Thus, the Secretary is granted broad discretion to replace measures that are no longer appropriate for the RHQDAPU program. Section 1886(b)(3)(B)(viii)(VII) of the Act requires that the Secretary establish procedures for making quality data available to the public after ensuring that a hospital would have the opportunity to review its data before these data are made public. In addition, this section requires that the Secretary report quality measures of process, structure, outcome, patients' perspective of care, efficiency, and costs of care that relate to services furnished in inpatient settings on the CMS Web site. Section 1886(b)(3)(B)(viii)(I) of the Act also provides that any reduction in a hospital's payment update will apply only with respect to the fiscal year involved, and will not be taken into account for computing the applicable percentage increase for a subsequent fiscal year. In the FY 2007 IPPS final rule (71 FR 48045), we amended our regulations at 42 CFR 412.64(d)(2) to reflect the 2.0 percentage point reduction in the payment update for FY 2007 and subsequent fiscal years for subsection (d) hospitals that do not comply with requirements for reporting quality data, as provided for under section 1886(b)(3)(B)(viii) of the Act. In the FY 2007 IPPS final rule, we also added 11 additional quality measures to the 10-measure starter set to establish an expanded set of 21 quality measures (71 FR 48033 through 48037). Commenters on the FY 2007 IPPS proposed rule requested that we notify the public as far in advance as possible of any proposed expansions of the measure set and program procedures in order to encourage broad collaboration and to give hospitals time to prepare for any anticipated change. Taking these concerns into account, in the CY 2007 OPPS/ASC final rule with comment period (71 FR 68201), we adopted six additional quality measures for the FY 2008 IPPS update, for a total of 27 measures. The measure set that we adopted for the FY 2008 payment determination was as follows: Topic
Quality measureHeart Attack (Acute Myocardial Infarction).
• Aspirin at arrival.*• Aspirin prescribed at discharge.*• Angiotensin Converting Enzyme Inhibitor (ACE-I) or Angiotensin II Receptor Blocker (ARB) for left ventricular systolic dysfunction.*• Beta blocker at arrival.*• Beta blocker prescribed at discharge.*• Fibrinolytic (thrombolytic) agent received within 30 minutes of hospital arrival.**• Percutaneous Coronary Intervention (PCI) received within 120 minutes of hospital arrival.**• Adult smoking cessation advice/counseling.**Heart Failure (HF)
• Left ventricular function assessment.*• Angiotensin Converting Enzyme Inhibitor (ACE-I) or Angiotensin II Receptor Blocker (ARB) for left ventricular systolic dysfunction.• Discharge instructions.**• Adult smoking cessation advice/counseling.**Pneumonia (PN)
• Initial antibiotic received within 4 hours of hospital arrival *• Oxygenation assessment.*• Pneumococcal vaccination status.*• Blood culture performed before first antibiotic received in hospital.**• Adult smoking cessation advice/counseling.**• Appropriate initial antibiotic selection.**• Influenza vaccination status.**Surgical Care Improvement Project (SCIP)—named SIP for discharges prior to July 2006 (3Q06)
• Prophylactic antibiotic received within 1 hour prior to surgical incision.**• Prophylactic antibiotics discontinued within 24 hours after surgery end time.**( print page 23645)• SCIP-VTE-1: Venous thromboembolism (VTE) prophylaxis ordered for surgery patients.***• SCIP-VTE-2: VTE prophylaxis within 24 hours pre/post surgery.***• SCIP Infection 2: Prophylactic antibiotic selection for surgical patients.***Mortality Measures (Medicare patients)
• Acute Myocardial Infarction 30-day mortality Medicare patients***• Heart Failure 30-day mortality Medicare patients.***Patients' Experience of Care.
HCAHPS patient survey.****Measure included in 10 measure starter set.**Measure included in 21 measure expanded set.***Measure added in CY 2007 OPPS/ASC final rule with comment period (data submission required as of January 2007 for three additional SCIP measures).
 For FY 2008, hospitals were required to submit data on 25 of the 27 measures. No data submission was required for the two mortality outcome measures (30-Day Risk Standardized Mortality Rates for Heart Failure and AMI), because they were calculated using existing administrative Medicare claims data. The measures used for the payment determination included, for the first time, the HCAHPS patient experience of care survey as well as two outcome measures. These measures expanded the types of measures available for public reporting as required under section 1886(b)(3)(B)(viii) of the Act. In addition, the outcome measures, which are claims-based measures, did not increase the data submission requirements for hospitals, thereby reducing the burden associated with collection of data for quality reporting. In the FY 2008 IPPS proposed rule (72 FR 24805), we proposed to add 1 outcome measure and 4 process measures to the existing 27-measure set to establish a new set of 32 quality measures to be used under the RHQDAPU program for the FY 2009 IPPS annual payment determination. We proposed to add the following five measures for the FY 2009 IPPS annual payment determination: PN 30-day mortality measure (Medicare patients)
                    SCIP Infection 4: Cardiac Surgery Patients with Controlled 6AM Postoperative Serum Glucose SCIP Infection 6: Surgery Patients with Appropriate Hair Removal
                    SCIP Infection 7: Colorectal Patients with Immediate Postoperative Normothermia SCIP Cardiovascular 2: Surgery Patients on a Beta Blocker Prior to Arrival Who Received a Beta Blocker During the Perioperative Period We stated that we planned to formally adopt these measures a year in advance in order to provide time for hospitals to prepare for changes related to the RHQDAPU program. We also stated that we anticipated that the proposed measures would be endorsed by the NQF, as a national consensus building entity. Finally, we stated that any proposed measure that was not endorsed by the NQF by the time that we published the FY 2008 IPPS final rule with comment period would not be finalized in that final rule. At the time we published the FY 2008 IPPS final rule with comment period, only the PN 30-day mortality measure had been endorsed by the NQF. Therefore, we finalized only that measure as part of the FY 2009 IPPS measure set and stated that we would further address adding additional measures in the CY 2008 OPPS/ASC final rule and, if necessary, in the FY 2009 IPPS proposed and final rules. We also responded to comments we had received on the five proposed measures (72 FR 47348 through 47351). In the CY 2008 OPPS/ASC final rule with comment period (72 FR 66875), we noted that the NQF had endorsed the following additional process measures that we had proposed to include in the FY 2009 RHQDAPU program measure set: SCIP Infection 4: Cardiac Surgery Patients with Controlled 6AM Postoperative Serum Glucose SCIP Infection 6: Surgery Patients with Appropriate Hair Removal As we stated in the FY 2008 IPPS proposed rule (72 FR 24805), these measures reflect our continuing commitment to quality improvement in both clinical care and quality. These quality measures reflect consensus among affected parties as demonstrated by endorsement by a national consensus building entity. The addition of these two measures for the FY 2009 measure set bring the total number of measures in that measure set to 30 (72 FR 66876). The measure set to be used for FY 2009 annual payment determination is as follows: Topic
Quality measureHeart Attack (Acute Myocardial Infarction)
• Aspirin at arrival*.• Aspirin prescribed at discharge*.• Angiotensin Converting Enzyme Inhibitor (ACE-I) or Angiotensin II Receptor Blocker (ARB) for left ventricular systolic dysfunction*.• Beta blocker at arrival*.• Beta blocker prescribed at discharge*.• Fibrinolytic (thrombolytic) agent received within 30 minutes of hospital arrival**.• Primary Percutaneous Coronary Intervention (PCI) received within 120 minutes of hospital arrival**.• Adult smoking cessation advice/counseling**.Heart Failure (HF)
• Left ventricular function assessment*.( print page 23646)• Angiotensin Converting Enzyme Inhibitor (ACE-I) or Angiotensin II Receptor Blocker (ARB) for left ventricular systolic dysfunction*.• Discharge instructions**.• Adult smoking cessation advice/counseling**.Pneumonia (PN)
• Initial antibiotic received within 4 hours of hospital arrival*.• Oxygenation assessment*.• Pneumococcal vaccination status*.• Blood culture performed before first antibiotic received in hospital**.• Adult smoking cessation advice/counseling**.• Appropriate initial antibiotic selection**.• Influenza vaccination status**.Surgical Care Improvement Project (SCIP)—named SIP for discharges prior to July 2006 (3Q06)
• Prophylactic antibiotic received within 1 hour prior to surgical incision**.• Prophylactic antibiotics discontinued within 24 hours after surgery end time**.• SCIP-VTE-1: Venous thromboembolism (VTE) prophylaxis ordered for surgery patients***.• SCIP-VTE-2: VTE prophylaxis within 24 hours pre/post surgery***.• SCIP Infection 2: Prophylactic antibiotic selection for surgical patients***.• SCIP-Infection 4: Cardiac Surgery Patients with Controlled 6AM Postoperative Serum Glucose*****.• SCIP Infection 6: Surgery Patients with Appropriate Hair Removal*****.Mortality Measures (Medicare patients)
• Acute Myocardial Infarction 30-day mortality Medicare patients***.• Heart Failure 30-day mortality Medicare patients***.• Pneumonia 30-day mortality Medicare patients****.Patients' Experience of Care
• HCAHPS patient survey***.* Measure included in 10 measure starter set.** Measure included in 21 measure expanded set.*** Measure added in CY 2007 OPPS/ASC final rule with comment period.**** Measure added in FY 2008 IPPS final rule with comment period.***** Measure added in CY 2008 OPPS/ASC final rule with comment period (data submission required effective with discharges starting January 1, 2008).
 We also stated in the FY 2008 IPPS final rule with comment period and the CY 2008 OPPS/ASC final rule with comment period that the RHQDAPU program participation requirements for the FY 2009 program would apply to additional measures we adopt for the FY 2009 program (72 FR 47361; 72 FR 66877). Therefore, hospitals are required to start submitting data for SCIP Infection 4 and SCIP Infection 6 starting with first quarter calendar year 2008 discharges and subsequent quarters until further notice. Hospitals must submit their aggregate population and sample size counts for Medicare and non-Medicare patients. These requirements are consistent with the requirements for the other AMI, HF, PN, and SCIP process measures included in the FY 2009 measure set. The complete list of procedures for participating in the RHQDAPU program for FY 2009 are provided in the FY 2008 IPPS final rule with comment period (72 FR 47359 through 47361). Because SCIP Cardiovascular 2 and SCIP Infection 7 had not been endorsed by a national consensus building entity by the publishing deadline for the CY 2008 OPPS/ASC final rule with comment period, we did not adopt these measures as part of the FY 2009 IPPS measure set. In the FY 2008 IPPS proposed rule, we also solicited public comments on 18 measures and 8 measure sets that could be selected for future inclusion in the RHQDAPU program (72 FR 24805). These measures and measure sets highlight our interest in improving patient safety and outcomes of care, with a particular focus on the quality of surgical care and patient outcomes. In order to engender a broad review of potential performance measures, the list included measures that have not yet received endorsement by a national consensus review process for public reporting. The list also included measures developed by organizations other than CMS as well as measures that can be calculated using administrative data (such as claims). We solicited public comment not only on the measures and measure sets that were listed, but also on whether there were any critical gaps or “missing” measures or measure sets. We specifically requested input concerning the following issues: Which of the measures or measure sets should be included in the FY 2009 RHQDAPU program or in subsequent years?
                    What challenges for data collection and reporting are posed by the identified measures and measure sets?
                    What improvements could be made to data collection or reporting that might offset or otherwise address those challenges? In the FY 2008 IPPS final rule with comment period (72 FR 47351), after consideration of the public comments received, we decided not to adopt any of these measures or measure sets for FY 2009. We indicated that we will continue to consider some of these measures and measure sets for subsequent years. 2. Proposed Quality Measures for FY 2010 and Subsequent Years a. Proposed Quality Measures for FY 2010 For FY 2010, we are proposing to require continued submission of data on 26 of the 30 existing AMI, Heart Failure, 
                        ( print page 23647)
                        Pneumonia, HCAHPS, and SCIP measures adopted for FY 2009. As noted above, the three outcome measures do not require hospitals to submit data. In addition, we are proposing to remove the Pneumonia Oxygenation Assessment measure from the RHQDAPU program measure set. We are proposing to discontinue requiring hospitals to submit data on the Pneumonia Oxygenation Assessment measure, effective with discharges beginning January 1, 2009. Section 1886(b)(3)(B)(viii)(VI) of the Act provides the Secretary with the discretion to replace any quality measures or indicators in appropriate cases, such as where all hospitals are effectively in compliance with a measure. We interpret this to authorize the Secretary to remove or retire measures from the RHQDAPU program. In the case of the Pneumonia Oxygenation Assessment measure, the vast majority of hospitals are performing near 100 percent. In addition, oxygenation assessment is routinely performed by hospitals for admitted patients without regard to the specific diagnosis. Thus, the measure is topped out so completely across virtually all hospitals as to provide no significant opportunity for improvement. We believe that the burden to hospitals to abstract and report these data outweighs the benefit in publicly reporting hospital level data with very little variation among hospitals. We do not expect that the retirement of the Pneumonia Oxygenation Assessment measure will result in the deterioration of care. However, if we determine otherwise, we may seek to reintroduce the measure. The proposed removal of the Pneumonia Oxygenation Assessment measure for FY 2010 represents the first instance of retiring a measure. We intend to review other existing chart-abstracted measures recognizing the significant burden to hospitals that chart abstraction requires. In this way, we seek to maximize the value of the RHQDAPU program to promote quality improvement by hospitals and to report information that the public will find beneficial in choosing inpatient hospital services. We invite comment on the retirement of the Pneumonia Oxygenation Assessment measure. In addition, we invite comment on other measures that may be suitable for retirement from the RHQDAPU program measure set. Finally, we invite comment on the following general considerations relevant to retiring measures: Should CMS retire a RHQDAPU program measure when hospital performance on the measure has reached a high threshold (that is, performance on the measure has topped out) even if the measure still reflects best practice?
                    Are there reasons to consider retiring a measure other than high overall performance?
                    When a measure is retired on the basis of substantially complete compliance by hospitals, should data collection on the measure again be required after 1 or 2 years to assure that a high compliance level remains, or should some other way of monitoring continued hospital compliance be used? The specifications for two of the existing measures have been updated by the NQF, effective May 2007, with respect to the applicable timing interval. For the measures previously identified as: AMI—Primary Percutaneous Coronary Intervention (PCI) received within 120 minutes of hospital arrival, the NQF has revised its endorsement of the specifications to reflect that the timing interval has been changed to PCI within 90 minutes of arrival.
                    Pneumonia—Initial antibiotic received within 4 hours of hospital arrival, the NQF has revised its endorsement of the specifications to reflect that the initial antibiotic must be received within 6 hours of arrival. In the FY 2008 IPPS final rule with comment period, one commenter “urged CMS to develop a policy to harmonize measures that related to payment, such as the NQF's move from a 4-hour timeframe for initial antibiotic administration for pneumonia patients to a 6-hour timeframe (72 FR 47357).” Another commenter raised the issue of the timing for PCI in the AMI topic (72 FR 47347-8). In response to these comments, we responded that if we believe that a change is an appropriate change for the RHQDAPU program, we would expect to adopt it. Because the NQF is now endorsing different timing intervals with respect to these measures, we are proposing to also update these measures for the purposes of the FY 2010 RHQDAPU program. The updated measures are as follows: AMI—Timing of Receipt of Primary Percutaneous Coronary Intervention (PCI); and
                    Pneumonia—Timing of receipt of initial antibiotic following hospital arrival. We note that the technical specifications for these measures will not change, and hospitals will continue to submit the same data that they currently submit. However, beginning with discharges on or after January 1, 2009, CMS will calculate the measures using the updated timing intervals. The NQF updated these two measures to reflect the most current consensus standards effective May 2007. Because this was after we issued the FY 2008 IPPS proposed rule, we could not adopt the updated measures in the FY 2008 IPPS final rule with comment period or CY 2008 OPPS/ASC final rule with comment period. We also recognized that we did not have in place a subregulatory process that would have permitted us to update the measures. Therefore, we announced that hospitals could suppress the public reporting of the quality data for the two measures for hospital discharges starting with April 1, 2007 discharges. We did this because we believe that hospitals should not be held to out-of-date consensus standards for public reporting pending the next regulatory cycle. We propose, in the future, to act on updates to existing RHQDAPU program measures made by a consensus building entity such as the NQF through a subregulatory process. This is necessary to be able to utilize the most up-to-date consensus standards in the RHQDAPU program, and recognizes that neither scientific advances nor consensus building entity standard updates are linked to the timing of regulatory actions. We propose to implement updates to existing RHQDAPU program measures and provide notification through the Qualitynet Web site, and additionally in the CMS/Joint Commission Specifications Manual for National Hospital Inpatient Quality Measures where data collection and measure specifications changes are necessary. We invite comment on this proposal. Under section 1886(b)(3)(B)(viii)(III) of the Act, the Secretary shall expand the RHQDAPU program measures beyond the measures specified as of November 1, 2003. Under section 1886(b)(3)(B)(viii)(V) of the Act, these measures, to the extent feasible and practicable, shall include measures set forth by one or more national consensus building entities. We are proposing to add the following 43 measures for the FY 2010 payment determination: a SCIP measure that we proposed last year; 4 nursing sensitive measures; 3 readmission measures; 6 Venous Thromboembolism measures; 5 stroke measures; 9 AHRQ measures; and 15 cardiac surgery measures. We are proposing to add SCIP Cardiovascular 2, Surgery Patients on a Beta Blocker Prior to Arrival Who Received a Beta Blocker During the Perioperative Period. This measure was initially proposed last year in the FY 2008 IPPS proposed rule, but because the NQF had not endorsed this measure 
                        ( print page 23648)
                        at the time we issued the FY 2008 IPPS final rule with comment period or the CY 2008 OPPS/ASC final rule with comment period, we did not adopt it. For the purposes of proposing the FY 2010 RHQDAPU program measure set, CMS believes that NQF endorsement of a measure represents a standard for consensus among affected parties as specified in section 1886(b)(3)(B)(viii)(V) of the Act. The NQF is an independent health care quality endorsement organization with a diverse representation of consumer, purchaser, provider, academic, clinical, and other health care stakeholder organizations. In November 2007, the NQF endorsed SCIP Cardiovascular 2. CMS believes that this measure targets an important process of care, beta blocker administration for noncardiac surgery patients. Therefore, we are now proposing to add SCIP Cardiovascular 2 to the RHQDAPU program measures for FY 2010. The specifications and data collection tools are currently available through the Qualitynet Web site and in the CMS/Joint Commission Specifications Manual for National Hospital Inpatient Quality Measures for hospitals to utilize and submit data for this measure. We are proposing that hospitals be required to submit data on this measure beginning with January 1, 2009 discharges. We also are proposing to add four nursing sensitive measures to the RHQDAPU program measure set for FY 2010. The four measures are: Failure to Rescue
                    Pressure Ulcer Prevalence and Incidence by Severity (Joint Commission developed measure; all patient data from chart abstraction)
                    Patient Falls Prevalence
                    Patient Falls with Injury These measures broaden the ability of the RHQDAPU program measure set to assess care generally associated with nursing staff. In addition, these measures are directed toward outcomes that are underrepresented among the RHQDAPU program measures. These measures apply to the vast majority of inpatient stays and provide a great deal of critical information about hospital quality to consumers and stakeholders. The specifications and data collection tools are scheduled to be available in the specifications manual by December 2008 for hospitals to utilize and submit data for these measures. We are proposing that hospitals be required to submit data on these four measures effective with discharges beginning April 1, 2009. While these measures are endorsed by NQF, the Joint Commission has initiated rigorous field testing of the measures, which may not be completed until late 2008. Therefore, it is possible that the endorsement status of these measures may change in the next several months. If this rigorous field testing results in uncertainty as to the NQF endorsement status at the time we issue the FY 2009 IPPS final rule, we will defer our final decision on whether to require these measures for the RHQDAPU program for FY 2010 until the time that we issue the CY 2009 OPPS/ASC final rule with comment period. This deferral is consistent with our measure expansion during the past 2 years, when we finalized some RHQDAPU program measures in the annual OPPS/ASC final rules. We are proposing to adopt three readmission measures for FY 2010 that will be calculated using Medicare administrative claims data. The proposed measures are: Pneumonia (PN) 30-Day Risk Standardized Readmission Measure (Medicare patients)
                    Heart Attack (AMI) 30-Day Risk Standardized Readmission Measure (Medicare patients)
                    Heart Failure (HF) 30-Day Risk Standardized Readmission Measure (Medicare patients) These readmission measures assess both quality of care and efficiency of care. They also promote coordination of care among hospitals and other providers. They compliment the existing 30-Day Risk Standardized Mortality Measures for Pneumonia, Heart Attack, and Heart Failure. These measures require no additional data collection from hospitals. The measures are risk adjusted to account for differences between hospitals in the characteristics of their patient populations. These three claims-based readmission measures are pending NQF endorsement. The NQF endorsement decision on these three measures is expected before we issue the FY 2009 IPPS final rule. We are proposing to add these three measures contingent upon NQF endorsement. We are also proposing to defer our decision on whether to include these measures until we issue the CY 2009 OPPS/ASC final rule, in the event that NQF endorsement status is still pending when we issue the FY 2009 IPPS final rule. This deferral is consistent with our measure expansion during the past 2 years, when we finalized some RHQDAPU program measures in the annual OPPS/ASC final rules. We are also proposing to add six Venous Thromboembolism (VTE) measures. These measures comprehensively address a major cause of morbidity and mortality among hospitalized patients. VTE-1: VTE Prophylaxis
                    VTE-2: VTE Prophylaxis in the ICU
                    VTE-4: Patients with overlap in anticoagulation therapy
                    VTE-5/6: (as combined measure) Patients with UFH dosages who have platelet count monitoring and adjustment of medication per protocol or nomogram
                    VTE-7: Discharge instructions to address: follow-up monitoring, compliance, dietary restrictions and adverse drug reactions/interactions
                    VTE-8: Incidence of preventable VTE These VTE measures are pending NQF endorsement. The NQF endorsement decision on these measures is expected before we issue the FY 2009 IPPS final rule. We are proposing to add these measures contingent upon NQF endorsement. We also are proposing to defer our decision on whether to include these measures until we issue the CY 2009 OPPS/ASC final rule with comment period, in the event that NQF endorsement status is still pending when we issue the FY 2009 IPPS final rule. This deferral is consistent with our measure expansion during the past 2 years, when we finalized some RHQDAPU program measures in the annual OPPS/ASC final rules. We are proposing that hospitals be required to submit data on these six measures effective with discharges beginning January 1, 2009. We also are proposing to add five Stroke measures that will apply only to certain identified groups under specific ICD-9-CM codes as specified in the specifications manual. These measures comprehensively address an important condition not currently covered by the RHQDAPU program that is associated with significant morbidity and mortality. STK-1 DVT Prophylaxis
                    STK-2 Discharged on Antithrombotic Therapy
                    STK-3 Patients with Atrial Fibrillation Receiving Anticoagulation Therapy
                    STK-5 Antithrombotic Medication By End of Hospital Day Two
                    STK-7 Dysphasia Screening These Stroke measures are pending NQF endorsement. The NQF endorsement decision on these measures is expected before we issue the FY 2009 IPPS final rule. We are proposing to add these measures contingent upon NQF endorsement. We also are proposing to defer our adoption of these measures until we issue the CY 2009 OPPS/ASC final rule with comment period in the event that NQF 
                        ( print page 23649)
                        endorsement status is still pending as of the time we issue the FY 2009 IPPS final rule. This approach is consistent with our measure expansion during the past 2 years, when CMS finalized some RHQDAPU program measures in the annual OPPS/ASC final rules. We are proposing that hospitals be required to submit data on these five measures effective with discharges beginning July 1, 2009. We also are proposing to add the following nine AHRQ Patient Safety Indicators (PSI) and Inpatient Quality Indicators (IQI) that have been endorsed by the NQF: Patient Safety Indicator (PSI) 4—Death among surgical patients with treatable serious complications
                    PSI 6—Iatrogenic pneumothorax, adult
                    PSI 14—Postoperative wound dehiscence
                    PSI 15—Accidental puncture or laceration
                    Inpatient Quality Indicator (IQI) 4 and 11—Abdominal aortic aneurysm (AAA) mortality rate (with or without volume)
                    IQI 19—Hip fracture morality rate
                    IQI Mortality for selected medical conditions (composite)
                    IQI Mortality for selected surgical procedures (composite)
                    IQI Complication/patient safety for selected indicators (composite) These are claims-based outcome measures. They are important additional measures that can be calculated for hospital inpatients without the burden of additional chart abstraction. Hospitals currently collect and submit these data to CMS and other insurers for reimbursement. These measures will be calculated using all-payer claims data that hospitals currently collect with respect to each patient discharge. We are proposing to require hospitals to submit to CMS the all-payer claims data that we specify in the technical specifications manual as necessary to calculate the AHRQ PSI/IQI measures. We are proposing that hospitals begin submitting data on a quarterly basis on these measures to CMS by April 1, 2010 beginning with October 1, 2009 discharges. However, we are aware that a large number of hospitals already submit these data on a voluntary basis to third party data aggregators such as State health agencies or State hospital associations. We seek comments on whether a hospital that already submits the data necessary to calculate these measures to such entities should be permitted to authorize such an entity to transmit these data to CMS, in accordance with applicable confidentiality laws, on their behalf. This would relieve the hospital of the burden of having to submit the same data directly to CMS via the QIO Clinical Warehouse. As an alternative to requiring that hospitals submit all-payer claims data for purposes of calculating the AHRQ PSI/IQI measures, CMS is considering whether it should initially calculate the AHRQ PSI/IQI measures using Medicare claims data only, and at a subsequent date require submission of all-payer claims data. We also seek comment on this alternative. We also are proposing to add 15 cardiac surgery measures. Cardiac surgical procedures carry a significant risk of morbidity and mortality. We believe that the nationwide public reporting of these cardiac surgery measures would provide highly meaningful information for the public. Currently, over 85 percent of hospitals with a cardiac surgery program submit data on the proposed cardiac surgery measures listed below to the Society of Thoracic Surgeons (STS) Cardiac Surgery Clinical Data Registry. We are proposing to accept these data from the STS registry beginning on July 1, 2009, on a quarterly basis for discharges on or after January 1, 2009. Hospitals that participate in the RHQDAPU program, but that do not submit data on the proposed cardiac surgery measures to the STS registry for discharges on or after January 1, 2009, would need to submit such data to CMS. Although we would accept cardiac surgery data from other clinical data registries, we are unaware of any other registries that collect all of the data necessary to support calculation of the proposed cardiac surgery measures. Hospitals and CMS would need to establish appropriate legal arrangements, to the extent such arrangements are necessary, to ensure that the transfer of these data from the STS registry to CMS complies with all applicable laws. By accepting these registry-based data, only those hospitals with cardiac surgery programs that do not already collect such data to submit to the STS registry will have any additional data submission burden. All of the proposed measures are currently NQF-endorsed. We are proposing that hospitals begin submitting data by July 1, 2009, on a quarterly basis on the following 15 cardiac surgery measures to the STS data registry or CMS for 1st quarter calendar year 2009 discharges: Participation in a Systematic Database for Cardiac Surgery
                    Pre-Operative Beta Blockade
                    Prolonged Intubation
                    Deep Sternal Wound Infection Rate
                    Stroke/CVA
                    Post-Operative Renal Insufficiency
                    Surgical Reexploration
                    Anti-Platelet Medication at Discharge
                    Beta Blockade Therapy at Discharge
                    Anti-Lipid Treatment at Discharge
                    Risk-Adjusted Operative Mortality for CABG
                    Risk-Adjusted Operative Mortality for Aortic Valve Replacement
                    Risk-Adjusted Operative Mortality for Mitral Valve Replacement/Repair
                    Risk-Adjusted Mortality for Mitral Valve Replacement and CABG Surgery
                    Risk-Adjusted Mortality for Aortic Valve Replacement and CABG Surgery The following table lists the 72 proposed measures for FY 2010: Topic
Quality measureHeart Attack (Acute Myocardial Infarction)
• AMI-1 Aspirin at arrival *.• AMI-2 Aspirin prescribed at discharge *.• AMI-3 Angiotensin Converting Enzyme Inhibitor (ACE-I) or Angiotensin II Receptor Blocker (ARB) for left ventricular systolic dysfunction *.• AMI 6 Beta blocker at arrival *.• AMI-5 Beta blocker prescribed at discharge *.• AMI-7a Fibrinolytic (thrombolytic) agent received within 30 minutes of hospital arrival**.• AMI-4 Adult smoking cessation advice/counseling**.• AMI-8a Timing of Receipt of Primary Percutaneous Coronary Intervention (PCI).Heart Failure (HF)
• HF-2 Left ventricular function assessment *.( print page 23650)• HF-3 Angiotensin Converting Enzyme Inhibitor (ACE-I) or Angiotensin II Receptor Blocker (ARB) for left ventricular systolic dysfunction *.• HF-1 Discharge instructions**.• HF-4 Adult smoking cessation advice/counseling**.Pneumonia (PN)
• PN-2 Pneumococcal vaccination status *.• PN-3b Blood culture performed before first antibiotic received in hospital**.• PN-4 Adult smoking cessation advice/counseling**.• PN-6 Appropriate initial antibiotic selection**.• PN-7 Influenza vaccination status**.• PN-5c Timing of receipt of initial antibiotic following hospital arrival******.Surgical Care Improvement Project (SCIP)—named SIP for discharges prior to July 2006 (3Q06)
• SCIP-1 Prophylactic antibiotic received within 1 hour prior to surgical incision**.• SCIP-3 Prophylactic antibiotics discontinued within 24 hours after surgery end time**.• SCIP-VTE-1: Venous thromboembolism (VTE) prophylaxis ordered for surgery patients***.• SCIP-VTE-2: VTE prophylaxis within 24 hours pre/post surgery***.• SCIP Infection 2: Prophylactic antibiotic selection for surgical patients***.• SCIP-Infection 4: Cardiac Surgery Patients with Controlled 6AM Postoperative Serum Glucose*****.• SCIP Infection 6: Surgery Patients with Appropriate Hair Removal*****.• SCIP Cardiovascular 2: Surgery Patients on a Beta Blocker Prior to Arrival Who Received a Beta Blocker During the Perioperative Period******.Mortality Measures (Medicare patients)
• MORT-30-AMI Acute Myocardial Infarction 30-day mortality Medicare patients***.• MORT-30-HF Heart Failure 30-day mortality Medicare patients***.• MORT-30-PN Pneumonia 30-day mortality Medicare patients****.Patients' Experience of Care
• HCAHPS patient survey***.Readmission Measures (Medicare patients)
• Heart Attack (AMI) 30-Day Risk Standardized Readmission Measure (Medicare patients)******.• Heart Failure (HF) 30-Day Risk Standardized Readmission Measure (Medicare patients)******.• Pneumonia (PN) 30-Day Risk Standardized Readmission Measure (Medicare patients) ******.Inpatient Stroke Care
• STK-1 DVT Prophylaxis******.• STK-2 Discharged on Antithrombotic Therapy******.• STK-3 Patients with Atrial Fibrillation Receiving Anticoagulation Therapy******.• STK-5 Antithrombotic Medication By End of Hospital Day Two******.• STK-7 Dysphasia Screening******.Venous Thromboembolic Care
• VTE-1: VTE Prophylaxis******.• VTE-2: VTE Prophylaxis in the ICU******.• VTE-4: Patients with overlap in anticoagulation therapy******.• VTE-5/6: (as combined measure) patients with UFH dosages who have platelet count monitoring and adjustment of medication per protocol or nomagram******.• VTE-7: Discharge instructions to address: followup monitoring, compliance, dietary restrictions, and adverse drug reactions/interactions******.• VTE-8: Incidence of preventable VTE******.AHRQ Patient Safety Indicators
• Death among surgical patients with treatable serious complications******.• Iatrogenic pneumothorax, adult******.• Postoperative wound dehiscence******.• Accidental puncture or laceration******.AHRQ Inpatient Quality Indicators (IQI)
• Abdominal aortic aneurysm (AAA) mortality rate (with or without volume) ******.• Hip fracture morality rate******.AHRQ IQI Composite Measures
• Mortality for selected surgical procedures (composite) ******.( print page 23651)• Complication/patient safety for selected indicators (composite) ******.• Mortality for selected medical conditions (composite) ******.Nursing Sensitive Measures
• Failure to Rescue******.• Pressure Ulcer Prevalence and Incidence by Severity ******.• Patient Falls Prevalence******.• Patient Falls with Injury******.Cardiac Surgery Measures
• Participation in a Systematic Database for Cardiac Surgery ******.• Pre-operative Beta Blockade******.• Prolonged Intubation******.• Deep Sternal Wound Infection Rate******.• Stroke/CVA******.• Postoperative Renal Insufficiency******.• Surgical Reexploration******.• Anti-platelet Medication at Discharge******.• Beta Blockade Therapy at Discharge******.• Anti-lipid Treatment at Discharge******.• Risk-Adjusted Operative Mortality for CABG******.• Risk-Adjusted Operative Mortality for Aortic Valve Replacement******.• Risk-Adjusted Operative Mortality for Mitral Valve Replacement/Repair******.• Risk-Adjusted Mortality for Mitral Valve Replacement and CABG Surgery******.• Risk-Adjusted Mortality for Aortic Valve Replacement and CABG Surgery ******.*Measure included in 10 measure starter set.**Measure included in 21 measure expanded set.***Measure added in CY 2007 OPPS/ASC final rule with comment period.****Measure added in FY 2008 IPPS final rule with comment period.*****Measure added in CY 2008 OPPS/ASC final rule with comment period.******Measure proposed in FY 2009 IPPS proposed rule.
 In summary, we are proposing to increase the RHQDAPU program measures from 30 measures for FY 2009 to a total of 72 measures for FY 2010. The following table lists the increase in the RHQDAPU program measure set since the program's inception: IPPS payment year
Number of RHQDAPU program quality measures
Topics covered2005-2006
10
AMI, HF, PN.2007
21
AMI, HF, PN, SCIP.2008
27
AMI, HF, PN, SCIP, Mortality, HCAHPS.2009
30
AMI, HF, PN, SCIP, Mortality, HCAHPS.2010
72
AMI, HF, PN, SCIP, Mortality, HCAHPS, Nursing Sensitive, Readmission, VTE, Stroke, AHRQ IQI/PSI measures and composites, Cardiac Surgery.
 The above measures reflect our continuing commitment to quality improvement in both clinical care and patient safety. These additional measures also demonstrate our commitment to include in the RHQDAPU program only those quality measures that reflect consensus among the affected parties and that have been reviewed by a consensus building process. To the extent that the proposed measures have not already been endorsed by a consensus building entity such as the NQF, we anticipate that they will be endorsed prior to the time that we issue the FY 2009 IPPS final rule. We intend to finalize the FY 2010 RHQDAPU program measure set in the FY 2009 IPPS final rule, contingent on the endorsement status of the proposed measures. However, to the extent that a measure has not received NQF endorsement by the time we issue the FY 2009 IPPS final rule, we intend to finalize that measure for the FY 2010 RHQDAPU program measure set in the CY 2009 OPPS/ASC final rule with comment period if the measure is endorsed prior to the time we issue the CY-2009-OPPS/ASC final rule with comment period. We are requesting public comment on these measures. b. Possible New Quality Measures, Measure Sets, and Program Requirements for FY 2011 and Subsequent Years The following table contains a list of 59 measures and 4 measure sets from which additional quality measures could be selected for inclusion in the RHQDAPU program. It includes measures and measure sets that highlight CMS' interest in improving patient safety and outcomes of care, with a particular focus on the quality of surgical care and patient outcomes. In order to engender a broad review of potential performance measures, the list includes measures that have not yet 
                        ( print page 23652)
                        been considered for approval by the HQA or endorsed by a consensus review process such as the NQF. It also includes measures developed by organizations other than CMS as well as measures that are to be derived from administrative data (such as claims) that may need to be modified for specific use by the Medicare program if implemented under the RHQDAPU program. We are seeking public comment on the measures and measure sets that are listed as well as any critical gaps or missing measures or measure sets. We specifically request input concerning the following: Which of the measures or measure sets should be included in the RHQDAPU program for FY 2011 or in subsequent years?
                    What challenges for data collection and reporting are posed by the identified measures and measure sets? What improvements could be made to data collection or reporting that might offset or otherwise address those challenges? We are soliciting public comment on the following measure sets for consideration in FY 2011 and subsequent years: Possible Measures and Measure Sets for the RHQDAPU Program for FY 2011 and Subsequent Years
Topic
Quality measureChronic Pulmonary Obstructive Disease Measures:Complications of Vascular Surgery
AAA stratified by open and endovascular methods.Carotid Endarterectomy.Lower extremity bypass.Inpatient Diabetes Care Measures:Healthcare Associated Infection
Central Line-Associated Blood Stream Infections.Surgical Site Infections.Timeliness of Emergency Care Measures, including Timeliness
Median Time from ED Arrival to ED Departure for Admitted ED Patients.Median Time from ED Arrival to ED Departure for Discharged ED Patients.Admit Decision Time to ED Departure Time for Admitted Patients.Surgical Care Improvement Project (SCIP)—named SIP for discharges prior to July 2006 (3Q06)
SCIP Infection 8—Short Half-life Prophylactic Administered Preoperatively Redosed Within 4 Hours After Preoperative Dose.SCIP Cardiovascular 3—Surgery Patients on a Beta Blocker Prior to Arrival Receiving a Beta Blocker on Postoperative Days 1 and 2.Complication Measures (Medicare patients):Healthcare Acquired Conditions
Serious reportable events in healthcare (never events).Pressure ulcer prevalence and incidence by severity.Catheter-associated UTI.Hospital Inpatient Cancer Care Measures
Patients with early stage breast cancer who have evaluation of the axilla.College of American Pathologists breast cancer protocol.Surgical resection includes at least 12 nodes.College of American Pathologists Colon and rectum protocol.Completeness of pathologic reporting.Serious Reportable Events in Healthcare (“Never Events”)
Surgery performed on the wrong body part.Surgery performed on the wrong patient.Wrong surgical procedure on a patient.Retention of a foreign object in a patient after surgery or other procedure.Intraoperative or immediately post-operative death in a normal health patient (defined as a Class 1 patient for purposes of the American Society of Anesthesiologists patient safety initiative).Patient death or serious disability associated with the use of contaminated drugs, devices, or biologics provided by the healthcare facility.Patient death or serious disability associated with the use or function of a device in patient care in which the device is used or functions other than as intended.Patient death or serious disability associated with intravascular air embolism that occurs while being cared for in a healthcare facility.Patient death or serious disability associated with patient elopement (disappearance) for more than four hours.Patient suicide, or attempted suicide resulting in serious disability, while being cared for in a healthcare facility.Patient death or serious disability associated with a medication error (e.g.,  error involving the wrong drug, wrong dose, wrong patient, wrong time, wrong rate, wrong preparation, or wrong route of administration).Patient death or serious disability associated with a hemolytic reaction due to the administration of ABO-incompatible blood or blood products.( print page 23653)Patient death or serious disability associated with hypoglycemia, the onset of which occurs while the patient is being cared for in a health care facility.Stage 3 or 4 pressure ulcers acquired after admission to a health care facility.Patient death or serious disability due to spinal manipulative therapy.Patient death or serious disability associated with an electric shock while being cared for in a healthcare facility.Any incident in which a line designated for oxygen or other gas to be delivered to a patient contains the wrong gas or is contaminated by toxic substances.Patient death or serious disability associated with a burn incurred from any source while being cared for in a health care facility.Patient death associated with a fall while being cared for in a health care facility.Patient death or serious disability associated with the use of restraints or bedrails while being cared for in a health care facility.Any instance of care ordered by or provided by someone impersonating a physician, nurse, pharmacist, or other licensed health care provider.Abduction of a patient of any age.Sexual assault on a patient within or on the grounds of a health care facility.Death or significant injury of a patient or staff member resulting from a physical assault (i.e., battery) that occurs within or on the grounds of a health care facility.Average Length of Stay Coupled with Global Readmission Measure:Preventable Hospital-Acquired Conditions (HACs)
Catheter-Associated Urinary Tract Infection (UTI).Vascular Catheter-Associated Infection.Surgical Site Infections—Mediastinitis after Coronary Artery Bypass Graft (CABG).Surgical Site Infections following Elective Procedures—Total Knee Replacement, Laparoscopic Gastric Bypass, Litigation and Stripping of Varicose Veins.Legionnaires' Disease.Glycemic Control—Diabetic Ketoacidosis, Nonketotic Hypersmolar Coma, Hypoglycemic Coma.Iatrogenic pneumothorax.Delirium.Ventilator-Associated Pneumonia (VAP).Deep Vein Thrombosis (DVT)/Pulmonary Embolism (PE).Staphylococcus aureus Septicemia.Clostridium-Difficile Associated Disease (CDAD).Methicillin-Resistant Staphylococcus aureus (MRSA).
 c. Considerations in Expanding and Updating Quality Measures Under the RHQDAPU Program The RHQDAPU program has significantly expanded from an initial set of 10 measures to 30 measures for the FY 2009 payment determination. Initially, the conditions covered by the RHQDAPU program measures were limited to Acute Myocardial Infarction, Heart Failure, and Pneumonia, three high-cost and high-volume conditions. In expanding the process measures, Surgical Infection Prevention was the first additional focus, now supplemented by the two Venous Thromboembolism SCIP measures SCIP VTE-1 and SCIP VTE-2 for surgical patients. Of the 30 current measures, 27 require data collection from chart abstraction and surveying patients and submission of detailed data elements. In looking forward to further expansion of the RHQDAPU program, we believe it is important to take several goals into consideration. These include: (a) Expanding the types of measures beyond process of care measures to include an increased number of outcome measures, efficiency measures, and experience-of-care measures; (b) expanding the scope of hospital services to which the measures apply; (c) considering the burden on hospitals in collecting chart-abstracted data; (d) harmonizing the measures used in the RHQDAPU program with other CMS quality programs to align incentives and promote coordinated efforts to improve quality; (e) seeking to use measures based on alternative sources of data that do not require chart abstraction or that utilize data already being broadly reported by hospitals, such as clinical data registries or all-payer claims data bases; and (f) weighing the meaningfulness and utility of the measures compared to the burden on hospitals in submitting data under the RHQDAPU program. We request comments on how to reduce burden on the hospitals participating in the RHQDAPU program. We realize that our proposal to expand the RHQDAPU program measure set from submission of 30 measures in FY 2009 to 72 measures in FY 2010 is potentially burdensome. However, to minimize hospitals' burden, the proposed expansion uses many existing 
                        ( print page 23654)
                        data sources, including Medicare claims and registry data. We also request comment about which measures would be most useful while minimizing burden. (1) Expanding the Types of Measures Section 1886(b)(3)(B)(viii)(III) of the Act requires the Secretary to add other quality measures that the Secretary determines to be appropriate for the measurement of the quality of care furnished by hospitals in inpatient settings. We intend to expand outcome measures such as mortality measures and measures of complications. For FY 2010, the proposed measure set includes: Patient Experience of Care. HCAHPS collects data regarding a patient's experience of care in the hospital and provides a very meaningful perspective from the patient standpoint.
                    Efficiency. Efficiency is a Quality Domain, as defined by the IOM, that relates Quality and Cost. The three proposed readmission measures address hospital efficiency. These are considered efficiency measures because higher hospital readmission rates are linked to higher costs and also to lower quality of care received during hospitalization and after the initial hospital stay. We are also seeking additional ways in which to address efficiency.
                    Outcomes. The three 30-day mortality measures, the STS cardiac surgery measures, the AHRQ PSI/IQI measures, and the four outcome-related nursing sensitive measures represent significant expansion of the RHQDAPU program outcome measures. Additional outcome measures are provided in the list under consideration for inclusion in the RHQDAPU program for FY 2010 and beyond. (2) Expanding the Scope of Hospital Services To Which Measures Apply Many of the most common and high-cost Medicare DRGs were posted on the Hospital Compare Web site in March 2008 as part of the President's transparency initiative. We have assessed these DRGs and have found that the FY 2009 RHQDAPU program measure set does not capture data regarding care in important areas such as Inpatient Diabetes Care, Chronic Obstructive Pulmonary Disease (COPD), and Chest Pain. These are areas for which we currently do not have quality measures but which constitute a significant portion of the top paying DRGs for Medicare beneficiaries. We intend to develop measures in these areas in order to provide additional quality information on the most common and high-cost conditions that affect Medicare beneficiaries. In the proposed FY 2010 measure set, measures have been expanded to comprehensively address services related to preventing Venous Thromboembolism, treatment of stroke, and nursing services. (3) Considering the Burden on Hospitals in Collecting Chart-Abstracted Data for Measures Although we are proposing to add additional chart-abstracted measures for FY 2010, we also are proposing to stagger the dates for which data collection for these measures must begin, which we believe will lessen the burden on hospitals as they incorporate these new measures into their systems. We also intend to work to simplify the data abstraction specifications that add to the burden of data collection. (4) Harmonizing With Other CMS Programs We intend to harmonize measures across settings and other CMS programs as evidenced by the implementation of the readmission measures not only for the RHQDAPU program but also for the QIOs' 9th Scope of Work (SOW) Patient Pathways/Care Transitions Theme, which also uses the 30-Day Readmission Measures and will provide assistance to engage hospitals in improving care. The 9th SOW also focuses on disparities in health care, which is another important area of interest for CMS. We plan to analyze current RHQDAPU measures to identify particular RHQDAPU program measures needed to evaluate the existence of health care disparities, to require data elements that would support better identification of health care disparities, and to find more efficient ways to ascertain this information from claims data. In addition, at least some of the CY 2008 Physician Quality Reporting Initiative (PQRI) measures align with the current RHQDAPU program AMI and SCIP measures reported starting with the FY 2007 RHQDAPU measure set. In other words, there are financial incentives that cover the same clinical processes of care across different providers and settings. For example, Aspirin for Heart Attack corresponds to PQRI measure number 28, and Surgical Infection Antibiotic Timing corresponds to PQRI measure number 20. Outpatient quality measures under the Hospital Outpatient Data Quality Data Reporting Program (HOP QDRP) are also aligned with the RHQDAPU program measures. For example, the HOP QDRP addresses Acute Myocardial Infarction treatment for transferred patients and surgical infection prevention for outpatient surgery. (5) Using Alternative Data Sources Not Requiring Chart Abstraction We are actively pursuing alternative data sources, including data sources that are electronically maintained. Alternative data submission methodologies that we are proposing in this rule include: Use of registry-collected clinical data for which there is broad existing hospital participation as previously described with the STS registry.
                    Use of data collected by State data organizations, State hospital associations, Federal entities such as AHRQ, and/or other data warehouses. In addition, we are considering adopting the following methods of data collection in the future and request comments on these methods: Use of the CMS Continuity Assessment Record & Evaluation (CARE) tool, a standardized data collection instrument, which would allow data to be transmitted in “real time.” This recently developed, Internet-based, quality data collection tool was developed as a part of the Post Acute Care Reform Demonstration Program mandated by section 5008 of the DRA. The CARE tool consists of a core set of assessment items, common to all patients and all care settings (meeting criteria of being predictive of cost, utilization, outcomes, among others), organized under five major domains: Medical, Functional, Social, Environmental, and Cognitive—Continuity of Care. The Internet-based CARE tool will communicate critical information across settings accurately, quickly, and efficiently with reduced time burden to providers and is intended to enhance beneficiaries' safe transitions between settings to prevent avoidable, costly events such as unnecessary rehospitalizations or medication errors. We believe that the CARE tool may provide a vehicle for collection of data elements to be used for calculating RHQDAPU program quality measures. CMS is considering utilizing the CARE tool in this manner. The Care tool is available at:*www.cms.hhs.gov/​PaperworkReductionActof1995/​PRAL/​list.asp#TopOfPage*. (Viewers should select “Show only items with the word “10243”, click on show items, select CMS-10243, click on downloads, and open Appendices A & B, pdf files.) We are particularly interested in receiving public comment on this tool. Our goal is to have a standardized, efficient, effective, interoperable, common assessment tool to capture key 
                        ( print page 23655)
                        patient characteristics that will help CMS capture information related to resource utilization; expected costs as well as clinical outcomes; and post-discharge disposition. The CARE tool will also be useful for guiding payment and quality policies. Specifically, we are interested in receiving public comments on how CARE might advance the use of health information technology in automating the process for collecting and submitting quality data. Submission of data derived from electronic versions of laboratory test reports that are issued by the laboratory in accordance with CLIA to the ordering provider and maintained by the hospital as part of the patient's medical record during and after the patient's course of treatment at the hospital. We are considering using these data to support risk adjustment for claims-based outcome measures (for example, mortality measures) and to develop other outcomes measures. This would support use of electronically maintained data and our goal of reducing manual data collection burden on hospitals.
                    Submission of data currently being collected by clinical data registries in addition to the STS registry. This would support and leverage existing clinical data registries and existing voluntary clinical data collection efforts, such as:
                    American College of Cardiology (ACC) data registry for Cardiac Measures.
                    ACC data registry for ICD.
                    ACC data registry for Carotid Stents.
                    Vascular Surgery Registry for Vascular Surgical Procedures.
                    ACC-sponsored “Get with the Guidelines” registry for Stroke Care. (6) Weighing the Meaningfulness and Utility of the Measures Compared to the Burden on Hospitals in Submitting Data Under the RHQDAPU Program We are proposing to retire one measure from the RHQDAPU program for FY 2010 because we have determined that the burden on hospitals in abstracting the data outweighs the meaningful benefit that we can ascertain from the measure. As we explained more fully above, we are seeking comments on the applicability to the RHQDAPU program of criteria currently described in the Hospital VBP Issues Paper for inclusion and retirement of measures. The Hospital VBP Issues Paper is located on the CMS Web site at the following location: 
                        *http://www.cms.hhs.gov/​AcuteInpatientPPS/​downloads/​hospital_​VBP_​plan_​issues_​paper.pdf*. 3. Form and Manner and Timing of Quality Data Submission In the FY 2007 IPPS final rule (71 FR 48031 through 48045), we set out RHQDAPU program procedures for data submission, program withdrawal, data validation, attestation, public display of hospitals” quality data, and reconsiderations. Section 1886(b)(3)(B)(viii)(I) of the Act requires that subsection (d) hospitals submit data on measures selected under that clause with respect to the applicable fiscal year. In addition, section 1886(b)(3)(B)(viii)(II) of the Act requires that each subsection (d) hospital submit data on measures selected under that clause to the Secretary in a form and manner, and at a time, specified by the Secretary. The technical specifications for each RHQDAPU program measure are listed in the CMS/Joint Commission Specifications Manual for National Inpatient Hospital Quality Measures (Specifications Manual). We update this manual semiannually or more frequently in unusual cases, and include detailed instructions and calculation algorithms for hospitals to collect and submit the data for the required measures. The maintenance of the specifications for the measures selected by the Secretary occurs through publication of the Specifications Manual. Thus, measure selection by the Secretary occurs through the rulemaking process; whereas the maintenance of the technical specifications for the selected measures occurs through a subregulatory process so as to best maintain the specifications consistent with current science and consensus. The data submission, Specifications Manual, and submission deadlines are posted on the QualityNet Web site at 
                        *www.qualitynet.org*. We require that hospitals submit data in accordance with the specifications for the appropriate discharge periods. When measure specifications are updated, we are proposing to require that hospitals submit all of the data required to calculate the required measures as outlined in the Specifications Manual current as of the patient discharge date. 4. Current and Proposed RHQDAPU Program Procedures a. RHQDAPU Program Procedures for FY 2009 In the FY 2008 IPPS final rule with comment period, we stated that the requirements for FY 2008 would continue to apply for FY 2009 (72 FR 47361). The “Reporting Hospital Quality Data for Annual Payment Update Reference Checklist” section of the QualityNet Web site contains all of the forms to be completed by hospitals participating in the RHQDAPU program. Under these requirements hospitals must— Register with QualityNet, before participating hospitals initially begin reporting data, regardless of the method used for submitting data. ■ Identify a QualityNet Administrator who follows the registration process located on the QualityNet Web site (
                        *www.qualitynet.org*). ■ Complete the revised RHQDAPU program Notice of Participation form (only for hospitals that did not submit a form prior to August 15, 2007). For hospitals that share the same Medicare Provider Number (now CMS Certification Number (CCN)), report the name and address of each hospital on this form. ■ Collect and report data for each of the required measures except the Medicare mortality measures (AMI, HF, and PN 30-day Mortality for Medicare Patients). Hospitals must continuously report these data. Hospitals must submit the data to the QIO Clinical Warehouse using the CMS Abstraction & Reporting Tool (CART), The Joint Commission ORYX® Core Measures Performance Measurement System, or another third-party vendor tool that has met the measurement specification requirements for data transmission to QualityNet. All submissions will be executed through QualityNet. Because the information in the QIO Clinical Warehouse is considered QIO information, it is subject to the stringent QIO confidentiality regulations in 42 CFR Part 480. The QIO Clinical Warehouse will submit the data to CMS on behalf of the hospitals. Submit complete data regarding the quality measures in accordance with the joint CMS/Joint Commission sampling requirements located on the QualityNet Web site for each quality measure that requires hospitals to collect and report data. These requirements specify that hospitals must submit a random sample or complete population of cases for each of the topics covered by the quality measures. Hospitals must meet the sampling requirements for these quality measures for discharges in each quarter.
                    Submit to CMS on a quarterly basis aggregate population and sample size counts for Medicare and non-Medicare discharges for the four topic areas (AMI, HF, PN, and SCIP).
                    Continuously collect and submit HCAHPS data in accordance with the HCAHPS Quality Assurance Guidelines, Version 3.0, located at the Web site:*www.hcahpsonline.org.*
                         The QIO 
                        ( print page 23656)
                        Clinical Warehouse has been modified to accept zero HCAHPS-eligible discharges. We remind the public to refer to the QualityNet Web site for any questions about how to submit “zero cases” information. For the AMI 30-day, HF 30-day, and PN 30-day mortality measures, CMS uses Part A and Part B claims for Medicare fee-for-service patients to calculate the mortality measures. For FY 2009, hospital inpatient claims (Part A) from July 1, 2006 to June 30, 2007, will be used to identify the relevant patients and the index hospitalizations. Inpatient claims for the index hospitalizations and Part A and Part B claims for all inpatient, outpatient, and physician services received one year prior to the index hospitalizations are used to determine patient comorbidity, which is used in the risk adjustment calculation (see the Web site: 
                        *www.qualitynet.org/​dcs/​ContentServer?​cid=​1163010398556&​pagename=​QnetPublic%2FPage%2FQnetTier2&​c=​Page*). No other hospital data submission is required to calculate the mortality rates. b. Proposed RHQDAPU Program Procedures for FY 2010 We are proposing to continue requiring the FY 2009 RHQDAPU program procedures for FY 2010 for hospitals participating in the RHQDAPU program, with the following modifications: Notice of Participation. New subsection (d) hospitals and existing hospitals that wish to participate in RHQDAPU for the first time must complete a revised “Reporting Hospital Quality Data for Annual Payment Update Notice of Participation” that includes the name and address of each hospital that shares the same CCN.
                    Data Submission. In order to reduce the burden on hospitals that treat a low number of patients who are covered by the submission requirements, we are proposing the following: ■ AMI. We are proposing that a hospital that has five or fewer AMI discharges (both Medicare and non-Medicare combined) in a quarter will not be required to 
                        *submit*
                         AMI patient level data for that quarter. We are proposing to begin implementing this requirement with discharges on or after January 1, 2009. However, the hospital must still submit its aggregate AMI population and sample size counts to CMS for that quarter as part of its quarterly RHQDAPU data submission. ■ HCAHPS. We are proposing that a hospital that has five or fewer HCAHPS-eligible discharges in any month will not be required to submit HCAHPS surveys for that month. However, the hospital must still submit its total number of HCAHPS-eligible cases for that month as part of its quarterly HCAHPS data submission. We are proposing to begin implementing this requirement with discharges on or after January 1, 2009. ■ HF. We are proposing that a hospital that has five or fewer HF discharges (both Medicare and non-Medicare combined) in a quarter will not be required to 
                        *submit*
                         HF patient level data for that quarter. However, the hospital must still submit its aggregate HF population and sample size counts to CMS for that quarter as part of its quarterly RHQDAPU data submission. We are proposing to begin implementing this requirement with discharges on or after January 1, 2009. ■ PN. We are proposing that a hospital that has five or fewer PN discharges (both Medicare and non-Medicare combined) in a quarter will not be required to 
                        *submit*
                         PN patient level data for that quarter. However, the hospital must still submit its aggregate PN population and sample size counts to CMS for that quarter as part of its quarterly RHQDAPU data submission. We are proposing to begin implementing this requirement with discharges on or after January 1, 2009. ■ SCIP. We are proposing that a hospital that has five or fewer SCIP discharges (both Medicare and non-Medicare combined) in a quarter will not be required to 
                        *submit*
                         SCIP patient level data for that quarter. However, the hospital must still submit its aggregate SCIP population and sample size counts to CMS for that quarter as part of its quarterly RHQDAPU data submission. We are proposing to begin implementing this requirement with discharges on or after January 1, 2009. In addition, we are proposing the following quarterly deadlines for hospitals to submit the FY 2010 AMI, HF, SCIP, PN, Stroke, VTE, and nursing sensitive measure data: The data submission deadline for hospitals to submit the patient level measure data for 1st calendar quarter of 2009 discharges would be August 15, 2009. Data must be submitted for each of these measures 4.5 months after the end of the preceding quarter. The specific deadlines will be listed on the QualityNet Web site.
                    Even though data on applicable measures will not be due until 4.5 months after the end of the preceding quarter, hospitals must submit their aggregate population and sample size counts no later than 4 months after the end of the preceding quarter (the exact dates will be posted on the QualityNet Web site). This deadline falls approximately 15 days before the data submission deadline for the clinical process measures, and we are proposing it so that we can inform hospitals about their data submission status for the quarter before the 4.5 month clinical process measure deadline. We have found from past experience that hospitals need sufficient time to submit additional data when their counts differ from Medicare claims counts generated by CMS. We will provide hospitals with these Medicare claims counts and submitted patient level data counts on the QualityNet Web site approximately 2 weeks before the quarterly submission deadline. We plan to use the aggregate population and sample size data to assess submission completeness and adherence to sampling requirements for Medicare and non-Medicare patients. We propose the following quarterly deadlines for hospitals to submit cardiac surgery and the AHRQ PSI/IQI measure data to CMS or other entities: The data submission deadline for hospitals to submit cardiac surgery patient level measure data to CMS or STS data registry for 1st calendar quarter of 2009 discharges would be June 1, 2009. Data must be submitted for each of these measures 2 months after the end of the preceding quarter. The specific deadlines will be listed on the QualityNet Web site.
                    The data submission deadline for hospitals to submit the AHRQ PSI/IQI measure data to CMS for 4th calendar quarter of 2009 discharges would be April 1, 2010. Data must be submitted for each of these measures 3 months after the end of the preceding quarter. The specific deadlines will be listed on the QualityNet Web site. We are proposing these quarterly submission deadlines for cardiac surgery and AHRQ PSI/IQI measure data to coordinate submission deadlines with external data registries and provide more timely information to the consumers. We are proposing this quarterly submission deadline for cardiac surgery measure data to coincide with the STS quarterly submission deadline that is approximately 2 months following the discharge quarter. We also propose to shorten the time lag between the date of discharge and the public reporting of these quality measures to provide more timely consumer information. 5. Current and Proposed HCAHPS Requirements a. FY 2009 HCAHPS Requirements For FY 2009, hospitals must continuously collect and submit HCAHPS data to the QIO Clinical 
                        ( print page 23657)
                        Warehouse by the data submission deadlines posted on the Web site at: 
                        *www.hcahpsonline.org.*
                         The data submission deadline for first quarter CY 2008 (January through March) discharges is July 9, 2008. To collect HCAHPS data, a hospital can either contract with an approved HCAHPS survey vendor that will conduct the survey and submit data on the hospital's behalf to the QIO Clinical Warehouse, or a hospital can self-administer the survey without using a survey vendor, provided that the hospital meets Minimum Survey Requirements as specified on the Web site at: 
                        *www.hcahpsonline.org.*
                         A current list of approved HCAHPS survey vendors can be found on the Web site at: 
                        *www.hcahpsonline.org.* Every hospital choosing to contract with a survey vendor should provide the sample frame of hospital-eligible discharges to its survey vendor with sufficient time to allow the survey vendor to begin contacting each sampled patient within 6 weeks of discharge from the hospital (see the 
                        *Quality Assurance Guidelines*
                         for details about HCAHPS eligibility and sample frame creation) and must authorize the survey vendor to submit data via QualityNet on the hospital's behalf. CMS strongly recommends that the hospitals employing a survey vendor promptly review the two HCAHPS Feedback Reports (the Provider Survey Status Summary Report and the Data Submission Detail Report) that are available after the survey vendor submits the data to the QIO Clinical Warehouse. These reports enable a hospital to ensure that its survey vendor has submitted the data on time and it has been accepted into the Warehouse. In the FY 2008 IPPS final rule with comment period (72 FR 47362), we stated that hospitals and survey vendors must participate in a quality oversight process conducted by the HCAHPS project team. Starting in July 2007, we began asking hospitals/survey vendors to correct any problems that were found and provide followup documentation of corrections for review within a defined time period. If the HCAHPS project team finds that the hospital has not made these corrections, CMS may determine that the hospital is not submitting HCAHPS data that meet the requirements for the RHQDAPU program. As part of these activities, HCAHPS project staff reviews and discusses with survey vendors and hospitals self-administering the survey their specific Quality Assurance Plans, survey management procedures, sampling and data collection protocols, and data preparation and submission procedures. b. Proposed FY 2010 HCAHPS Requirements For FY 2010, we are proposing continuous collection of HCAHPS in accordance with the 
                        *Quality Assurance Guidelines*
                         located at the Web site: 
                        *www.hcahpsonline.org*, by the quarterly data submission deadlines posted on the Web site: 
                        *www.hcahpsonline.org*. As stated above, starting with January 1, 2009 discharges, we are proposing that hospitals that have five or fewer HCAHPS-eligible discharges in a month would not be required to submit HCAHPS patient-level data for that month as part of the quarterly data submission that includes that month, but they would still be required to submit the number of HCAHPS-eligible cases for that month as part of their HCAHPS quarterly data submission. With respect to HCAHPS oversight, we are proposing that the HCAHPS Project Team will continue to conduct site visits and/or conference calls with hospitals/survey vendors to ensure the hospital's compliance with the HCAHPS requirements. During the onsite visit or conference call, the HCAHPS Project Team will review the hospital's/survey vendor's survey systems and will assess protocols based upon the most recent Quality Assurance Guidelines. All materials relevant to survey administration will be subject to review. The systems and program review includes, but it is not necessarily limited to: (a) survey management and data systems; (b) printing and mailing materials and facilities; (c) telephone/IVR materials and facilities; (d) data receipt, entry and storage facilities; and (e) written documentation of survey processes. Organizations will be given a defined time period in which to correct any problems and provide followup documentation of corrections for review. Hospitals/survey vendors will be subject to followup site visits and/or conference calls, as needed. If CMS determines that a hospital is noncompliant with HCAHPS program requirements, CMS may determine that the hospital is not submitting HCAHPS data that meet the requirements of the RHQDAPU program. 6. Current and Proposed Chart Validation Requirements a. Chart Validation Requirements for FY 2009 In the FY 2008 IPPS final rule with comment period (72 FR 47361), we stated that, until further notice, we would continue to require that hospitals meet the chart validation requirements that we implemented in the FY 2006 IPPS final rule (70 FR 47421 and 47422). These requirements, as well as additional information on validation requirements, continue and are being placed on the QualityNet Web site. We also stated in the FY 2008 IPPS final rule with comment period that, until further notice, hospitals must pass our validation requirement that requires a minimum of 80-percent reliability, based upon our chart-audit validation process (72 FR 47361). In the FY 2008 IPPS final rule with comment period (72 FR 47362), we indicated that, for the FY 2009 update, all FY 2008 validation requirements would apply, except for the following modifications. We would modify the validation requirement to pool the quarterly validation estimates for 4th quarter CY 2006 through 3rd quarter 2007 discharges. We would also expand the list of validated measures in the FY 2009 update to add SCIP Infection-2, SCIP VTE-1, and SCIP VTE-2 (starting with 4th quarter CY 2006 discharges). We would also drop the current two-step process to determine if the hospital is submitting validated data. For the FY 2009 update, we stated that we will pool validation estimates covering the four quarters (4th quarter CY 2006 discharges through 3rd quarter 2007 discharges) in a similar manner to the current 3rd quarter pooled confidence interval. In summary, the following chart validation requirements apply for the FY 2009 RHQDAPU program: The 21-measure expanded set will be validated using 4th quarter CY 2006 (4Q06) through 3rd quarter CY 2007 (3Q07) discharges.
                    SCIP VTE-1, VTE-2, and SCIP Infection 2 will be validated using 2nd quarter CY 2007 and 3rd quarter CY 2007 discharges.
                    SCIP Infection 4 and SCIP Infection 6 must be submitted starting with 1st quarter CY 2008 discharges but will not be validated.
                    HCAHPS data must continuously be submitted and will be reviewed as discussed above.
                    AMI, HF, and PN 30-day mortality measures will be calculated as discussed below. In the FY 2008 IPPS final rule with comment period (72 FR 47364), we stated that, for the FY 2008 update and in subsequent years, we would revise and post up-to-date confidence interval information on the QualityNet Web site explaining the application of the confidence interval to the overall validation results. The data are being validated at several levels. There are consistency and internal edit checks to 
                        ( print page 23658)
                        ensure the integrity of the submitted data; there are external edit checks to verify expectations about the volume of the data received. b. Proposed Chart Validation Requirements for FY 2010 For FY 2010, we are proposing the following chart validation requirements to reflect the proposed 72-measure set: The following 21 measures from the FY 2009 RHQDAPU program measure set will be validated using data from 4th quarter 2007 through 3rd quarter 2008 discharges. Topic
Quality measure validated from 4th quarter 2007 through 3rd quarter 2008 dischargesHeart Attack (Acute Myocardial Infarction)
Aspirin at arrivalAspirin prescribed at dischargeAngiotensin Converting Enzyme Inhibitor (ACE-I) or Angiotensin II Receptor Blocker (ARB) for left ventricular systolic dysfunctionBeta blocker at arrivalBeta blocker prescribed at dischargeFibrinolytic (thrombolytic) agent received within 30 minutes of hospital arrivalAdult smoking cessation advice/counselingHeart Failure (HF)
Left ventricular function assessmentAngiotensin Converting Enzyme Inhibitor (ACE-I) or Angiotensin II Receptor Blocker (ARB) for left ventricular systolic dysfunctionDischarge instructionsAdult smoking cessation advice/counselingPneumonia (PN)
Pneumococcal vaccination statusBlood culture performed before first antibiotic received in hospitalAdult smoking cessation advice/counselingAppropriate initial antibiotic selectionInfluenza vaccination statusSurgical Care Improvement Project (SCIP)—named SIP for discharges prior to July 2006 (3Q06)
Prophylactic antibiotic received within 1 hour prior to surgical incisionSCIP-VTE-1: Venous thromboembolism (VTE) prophylaxis ordered for surgery patients***SCIP-VTE-2: VTE prophylaxis within 24 hours pre/post surgery***SCIP Infection 2: Prophylactic antibiotic selection for surgical patients***SCIP-Infection 3: Prophylactic antibiotics discontinued within 24 hours after surgery end time
 SCIP Infection 4 and Infection 6 will be validated using data from 2nd and 3rd quarter CY 2008 discharges. In addition, we are proposing to include the following three measures in the FY 2010 RHQDAPU program validation process that are included the FY 2009 RHQDAPU program measure set but have been updated or deleted for the FY 2010 measure set: Pneumonia antibiotic prophylaxis timing within 4 hours will be validated using data from 4th quarter 2007 through 3rd quarter 2008 discharges.
                    Percutaneous Coronary Intervention (PCI) Timing within 120 minutes will be validated using data from 4th quarter 2007 through 3rd quarter 2008 discharges.
                    Pneumonia Oxygenation Assessment will be validated using data from 4th quarter through 3rd quarter 2008 discharges. These measures will be submitted by hospitals during 2008 and early 2009, and are available to be validated by CMS in time for the FY 2010 RHQDAPU program payment eligibility determination. As explained above, will also revise and post up-to-date confidence interval information on the QualityNet Web site explaining the application of the confidence interval to the overall validation results. c. Chart Validation Methods and Requirements Under Consideration for FY 2011 and Subsequent Years Under the current and proposed RHQDAPU program chart validation process, we validate measures by reabstracting on a quarterly basis a random sample of five patient records for each hospital. This quarterly sample results in an annual combined sample of 20 patient records across 4 calendar quarters, but because the samples are random, they do not necessarily include patient records covering each of the clinical topics. We anticipate that the proposed expansion of the RHQDAPU program measure set to include additional clinical topics will decrease the percentage of RHQDAPU clinical topics, as well as the total number of measures, covered in many hospitals' annual chart validation. In addition to the measures for which hospitals must submit data for FY 2009 (with the exception of the Pneumonia Oxygenation Assessment measure), we have proposed that hospitals will submit data on the proposed five stroke measures, six VTE measures, and four nursing sensitive measures for FY 2010 using chart abstraction. CMS is considering the addition of these measures to the current RHQDAPU program validation process for FY 2011 and future years. However, we are considering whether registries and other external parties that may be collecting data on proposed RHQDAPU program measures could validate the accuracy of those measures beginning in FY 2011. In addition, we note that the proposed readmission measures are calculated using Medicare claims information and do not require chart validation. We are interested in receiving public comments from a broad set of stakeholders on the impact of adding measures to the validation process, as well as modifications to the current validation process that could improve 
                        ( print page 23659)
                        the reliability and validity of the methodology. We specifically request input concerning the following: Which of the measures or measure sets should be included in the FY 2010 RHQDAPU program chart validation process or in the chart validation process for subsequent years?
                    What validation challenges are posed by the RHQDAPU program measures and measure sets? What improvements could be made to validation or reporting that might offset or otherwise address those challenges?
                    Should CMS switch from its current quarterly validation sample of five charts per hospital to randomly selecting a sample of hospitals, and selecting more charts on an annual basis to improve reliability of hospital level validation estimates?
                    Should CMS select the validation sample by clinical topic to ensure that all publicly reported measures are covered by the validation sample? 7. Data Attestation Requirements a. Proposed Change to Requirements for FY 2009 In the FY 2008 IPPS final rule with comment period (72 FR 47364), we stated that we would require for FY 2008 and subsequent years that hospitals attest each quarter to the completeness and accuracy of their data, including the volume of data, submitted to the QIO Clinical Warehouse in order to improve aspects of the validation checks. We stated that we would provide additional information to explain this attestation requirement, as well as provide the relevant form to be completed on the QualityNet Web site, at the same time as the publication of the FY 2008 IPPS final rule with comment period. We are now proposing to defer the requirement in FY 2009 for hospitals to separately attest to the accuracy and completeness of their submitted data due to the burden placed on hospitals to report paper attestation forms on a quarterly basis. We continue to expect that hospitals will submit quality data that are accurate to the best of their knowledge and ability. b. Proposed Requirements for FY 2010 For FY 2010 and subsequent years, we are soliciting public comment on the electronic implementation of the attestation requirement at the point of data submission to the QIO Clinical Warehouse. Hospitals would electronically pledge to CMS that their submitted data are accurate and complete to the best of their knowledge. Hospitals would be required to designate an authorized contact to CMS for attestation in their patient-level data submission. Resubmissions would continue to be allowed before the quarterly submission deadline, and hospitals would be required to electronically update their pledges about data accuracy at the time of resubmission. We welcome comments on this approach. 8. Public Display Requirements Section 1886(b)(3)(B)(viii)(VII) of the Act provides that the Secretary shall establish procedures for making data submitted under the RHQDAPU program available to the public. The RHQDAPU program quality measures are posted on the Hospital Compare Web site (
                        *http://www.hospitalcompare.hhs.gov*). CMS requires that hospitals sign a “Reporting Hospital Quality Data for Annual Payment Update Notice of Participation” form when they first register to participate in the RHQDAPU program. Once a hospital has submitted a form, the hospital is considered to be an active RHQDAPU program participant until such time as the hospital submits a withdrawal form to CMS (72 FR 47360). Hospitals signing this form agree that they will allow CMS to publicly report the quality measures as required in the applicable year's RHQDAPU program requirements. We are proposing to continue to display quality information for public viewing as required by section 1886(b)(3)(B)(viii)(VII) of the Act. Before we display this information, hospitals will be permitted to review their information as recorded in the QIO Clinical Warehouse. Currently, hospitals that share the same CCN (formerly known as Medicare Provider Number (MPN)) must combine data collection and submission across their multiple campuses (for both clinical measures and for HCAHPS). These measures are then publicly reported as if they apply to a single hospital. We estimate that approximately 5 to 10 percent of the hospitals reported on the 
                        *Hospital Compare*
                         Web site share CCNs. Beginning with the FY 2008 RHQDAPU program, hospitals must report the name and address of each hospital that shares the same CCN. This information will be gathered through the RHQDAPU program Notice of Participation form for new hospitals participating in the RHQDAPU program. To increase transparency in public reporting and improve the usefulness of the 
                        *Hospital Compare*
                         Web site, we will note on the Web site where publicly reported measures combine results from two or more hospitals. 9. Proposed Reconsideration and Appeal Procedures For FY 2009, we are proposing to continue the current RHQDAPU program reconsideration and appeal procedures finalized in the FY 2008 IPPS final rule with comment period. The deadline for submitting a request for reconsideration in connection with the FY 2009 payment determination is November 1, 2008. We also are proposing to use the same procedural rules finalized in the FY 2008 IPPS final rule with comment period (72 FR 47365). We posted these rules on the 
                        *QualityNet*
                         Web site for the FY 2008 RHQDAPU program reconsideration process. Under the procedural rules, in order to receive reconsideration for FY 2009, the hospital must— Submit to CMS, via QualityNet, a Reconsideration Request form (available on the*QualityNet*
                         Web site) containing the following information: ○ Hospital Medicare ID number. ○ Hospital Name. ○ CMS-identified reason for failure (as provided in the CMS notification of failure letter to the hospital). ○ Hospital basis for requesting reconsideration. (This must identify the hospital's specific reason(s) for believing it met the RHQDAPU program requirements and should receive the full FY 2009 IPPS annual payment update.) ○ CEO contact information, including name, e-mail address, telephone number, and mailing address (must include physical address, not just the post office box). ○ QualityNet System Administrator contact information, including name, e-mail address, telephone number, and mailing address (must include physical address, not just the post office box). The request must be signed by the hospital's CEO.
                    Following receipt of a request for reconsideration, CMS will—
                    Provide an e-mail acknowledgement, using the contact information provided in the reconsideration request, to the CEO and the QualityNet Administrator that the letter has been received.
                    Provide a formal response to the hospital CEO, using the contact information provided in the reconsideration request, notifying the facility of the outcome of the reconsideration process. CMS expects the process to take 60 to 90 days from the due date of November 1, 2008. If a hospital is dissatisfied with the result of a RHQDAPU program 
                        ( print page 23660)
                        reconsideration decision, the hospital may file a claim under 42 CFR part 405, subpart R (a Provider Reimbursement Review Board (PRRB) appeal). 10. Proposed RHQDAPU Program Withdrawal Deadline for FYs 2009 and 2010 We propose to accept RHQDAPU program withdrawal forms for FY 2009 from hospitals through August 15, 2008. We are proposing this deadline to provide CMS with sufficient time to update the RHQDAPU FY 2009 payment to hospitals starting on October 1, 2008. If a hospital withdraws from the program for FY 2009, it will receive a 2.0 percentage point reduction in its FY 2009 annual payment update. We also propose to accept RHQDAPU program withdrawal forms for FY 2010 from hospitals through August 15, 2009. If a hospital withdraws from the program for FY 2010, it will receive a 2.0 percentage point reduction in its FY 2010 annual payment update. 11. Requirements for New Hospitals In the FY 2008 IPPS final rule with comment period (72 FR 47366), we stated that a new hospital that receives a provider number on or after October 1 of each year (beginning with October 1, 2007) will be required to report RHQDAPU program data beginning with the first day of the quarter following the date the hospital registers to participate in the RHQDAPU program. For example, a hospital that receives its CCN on October 2, 2008, and signs up to participate in the RHQDAPU program on November 1, 2007, will be expected to meet all of the data submission requirements for discharges on or after January 1, 2009. In addition, we strongly recommend that each new hospital participate in an HCAHPS dry run, if feasible, prior to beginning to collect HCAHPS data on an ongoing basis to meet RHQDAPU program requirements. We refer readers to the Web site at 
                        *www.hcahpsonline.org*
                         for a schedule of upcoming dry runs. The dry run will give newly participating hospitals the opportunity to gain first-hand experience collecting and transmitting HCAHPS data without the public reporting of results. Using the official survey instrument and the approved modes of administration and data collection protocols, hospitals/survey vendors will collect HCAHPS data and submit the data to QualityNet. 12. Electronic Medical Records In the FY 2006 IPPS final rule, we encouraged hospitals to take steps toward the adoption of electronic medical records (EMRs) that will allow for reporting of clinical quality data from the EMRs directly to a CMS data repository (70 FR 47420). We intend to begin working toward creating measures’ specifications, and a system or mechanism, or both, that will accept the data directly without requiring the transfer of the raw data into an XML file as is currently done. The Department continues to work cooperatively with other Federal agencies in the establishment of Federal Health Architecture (FHA) data standards. We encouraged hospitals that are developing systems to conform them to industry standards, and in particular to FHA data standards, once identified, taking measures to ensure that the data necessary for quality measures are captured. Ideally, such systems will also provide point-of-care decision support that enables detection of high levels of performance on the measures. Hospitals using EMRs to produce data on quality measures will be held to the same performance expectations as hospitals not using EMRs. Due to the low volume of comments we received on this issue in response to the FY 2006 proposed IPPS rule, in the FY 2007 IPPS proposed (71 FR 24095), we again invited public comment on these requirements and related options. In the FY 2007 IPPS final rule (71 FR 48045), we summarized and addressed the additional comments we received. In the FY 2008 IPPS proposed rule (72 FR 24809), we noted that we would welcome additional comments on this issue. In the FY 2008 IPPS final rule with comment period (72 FR 47366), we responded to the additional comments we received and noted that CMS plans to continue working with the American Health Information Community (AHIC) and other entities to explore processes through which an EMR could speed the collection and minimize the resources necessary for quality reporting. (The AHIC is a Federal advisory body, chartered in 2005 to make recommendations to the Secretary on how to accelerate the development and adoption of health information technology.) In addition, we noted that we will continue to participate in appropriate HHS studies and workgroups, as mentioned by a GAO report (GAO-07-320) about hospital quality data and their use of information technology. As appropriate, CMS will inform interested parties regarding progress in the implementation of HIT for the collection and submission of hospital quality data as specific steps, including timeframes and milestones, are identified. Current mechanisms include publication in the 
                        **Federal Register**
                         as well as ongoing collaboration with external stakeholders such as the HQA, the AHA, the FAH, the AAMC, and the Joint Commission. We further anticipate that as HIT is implemented, a formal plan, including training, will be developed to assist providers in understanding and utilizing HIT in reporting quality data. In addition, we will assess the effectiveness of our communications with providers and stakeholders as it relates to all information dissemination pertinent to collecting hospital quality data as part of an independent and comprehensive external evaluation of the RHQDAPU program. We are again soliciting comments on the issues and challenges associated with EMRs. Specifically, we invite comment on our proposed changes to our data submission requirements to be more aligned with currently implemented HIT systems, including data collection from registries and laboratory data. We recognize the potential burden on hospitals of increased data reporting requirements for process measures that require chart abstraction. In FY 2007 IPPS rulemaking, we listed a variety of additional possible measures for future years. The measures included and emphasized additional outcomes measures. Additional measures were included for which the data sources are claims. For these, no additional data abstraction or submission would be required for reporting hospitals beyond the claims data. In proposing measures for FY 2010, we seek to emphasize outcome measures and to minimize any additional data collection burden. In addition, as provided in section 1886(b)(3)(B)(viii)(VI) and discussed in section IV.B.2.a. of this proposed rule, we are proposing to retire one measure where there is no meaningful difference among hospitals as a means of reducing data collection burden. C. Medicare Hospital Value-Based Purchasing (VBP) 1. Medicare Hospital VBP Plan Report to Congress Through section 5001(b) of the Deficit Reduction Act of 2005, Congress authorized the development of a plan to implement value-based purchasing (VBP) beginning FY 2009 for IPPS hospital services. By statute, the plan must address: (a) The ongoing development, selection, and modification process for measures of quality and efficiency in hospital inpatient settings; (b) reporting, collection, and validation of quality 
                        ( print page 23661)
                        data; (c) the structure, size, and source of value-based payment adjustments; and (d) public disclosure of hospital performance data. To develop the plan, CMS created a Hospital VBP Workgroup with members from various CMS components and the Office of the Assistant Secretary for Planning and Evaluation. The Workgroup completed an environmental scan of existing hospital VBP programs, an issue paper outlining the topics to be addressed in the plan, and an options paper presenting design alternatives for the plan. CMS hosted two public Listening Sessions in early 2007 to solicit comments from interested parties on outstanding design questions associated with development of the plan. The perspectives expressed by stakeholders (including hospitals, consumers, and purchasers) during these sessions and in writing assisted the Workgroup in creating the Medicare Hospital VBP Plan Report to Congress. The Report was submitted to Congress on November 21, 2007. The Medicare Hospital VBP Plan builds on the foundation of Medicare's current RHQDAPU program (discussed in section IV.B. of the preamble of this proposed rule), which, since FY 2005, has provided differential payments to hospitals that report their performance on a defined set of inpatient measures for public posting on the 
                        *Hospital Compare*
                         Web site. If authorized by Congress, the VBP Plan would replace the current quality reporting program with a new program that would include both public reporting and financial incentives to drive improvements in clinical quality, patient-centeredness, and efficiency. The proposed plan contains the following key components: (a) A performance assessment model that incorporates measures from different quality domains (that is, clinical process of care, patient experience of care, outcomes, among others) to calculate a hospital's total performance score; (b) options for translating this score into an incentive payment that would make a portion of the hospital's base DRG payment contingent on its total performance score; (c) criteria for selecting performance measures for the financial incentive and candidate measures for FY 2009 and beyond; (d) a phased approach for transitioning from the RHQDAPU program to the VBP plan; (e) proposed enhancements to the current data transmission and validation infrastructure to support VBP program requirements; (f) refinements to the 
                        *Hospital Compare*
                         Web site to support expanded public reporting; and (g) an approach to monitoring VBP impacts. The Medicare Hospital VBP Plan Report to Congress is available on the CMS Web site at: 
                        *http://www.cms.hhs.gov/​AcuteInpatientPPS/​downloads/​HospitalVBPPlanRTCFINALSUBMITTED2007.pdf.* 2. Testing and Further Development of the Medicare Hospital VBP Plan The Hospital VBP Workgroup has undertaken testing of the VBP Plan. This “dry run” or “simulation” of the Plan will use the most recent clinical process-of-care and HCAHPS measurement data available from the RHQDAPU program. New information generated by the VBP Plan testing will include: (a) Performance scores by domain; (b) total performance scores; and (c) financial impacts. Following a process similar to that used in developing the Plan, CMS will analyze this information by individual IPPS hospital, by segment of the hospital industry (that is, geographic location, size, teaching status, among others), and in aggregate for all IPPS hospitals. The results of VBP Plan testing will be used to further develop the Plan. Priorities for Plan completion include addressing the small numbers issue (described on pages 74 and 75 of the Hospital VBP Plan Report to Congress) and developing a scoring methodology for the outcomes domain (pages 57-58 of the Hospital VBP Plan Report to Congress), which will become an additional aspect of the performance model. After completion, the Plan will be retested. We are seeking public comments on how to take full advantage of the new information generated through this testing and further Plan development. For example: Should the testing and retesting results be publicly posted? If the testing results were to be posted, would the best location be the 
                        *Hospital Compare*
                         Web site or the CMS Web site at: 
                        *http://www.cms.hhs.gov*
                        ? In what format would public posting be most useful to potential audiences? At what level would the data be posted—individual hospital or some higher level? Which data elements from the testing results would be most useful to share? D. Sole Community Hospitals (SCHs) and Medicare-Dependent, Small Rural Hospitals (MDHs): Volume Decrease Adjustment (§§ 412.92 and 412.108) 1. Background Under the IPPS, special payment protections are provided to a sole community hospital (SCH). Section 1886(d)(5)(D)(iii) of the Act defines an SCH as a hospital that, by reason of factors such as isolated location, weather conditions, travel conditions, absence of other like hospitals (as determined by the Secretary), or historical designation by the Secretary as an essential access community hospital, is the sole source of inpatient hospital services reasonably available to Medicare beneficiaries. The regulations that set forth the criteria that a hospital must meet to be classified as an SCH are located in 42 CFR 412.92 of the regulations. Under the IPPS, separate special payment protections also are provided to a Medicare-dependent, small rural hospital (MDH). Section 1886(d)(5)(G)(iv) of the Act defines an MDH as a hospital that is located in a rural area, has not more than 100 beds, is not an SCH, and has a high percentage of Medicare discharges (not less than 60 percent in its 1987 cost reporting year or in 2 of its most recent 3 audited and settled Medicare cost reporting years). The regulations that set forth the criteria that a hospital must meet to be classified as an MDH are located in 42 CFR 412.108. Although SCHs and MDHs are paid under special payment methodologies, they are hospitals that are paid under section 1886(d) of the Act. Like all IPPS hospitals paid under section 1886(d) of the Act, SCHs and MDHs are paid for their discharges based on the DRG weights calculated under section 1886(d)(4) of the Act. Effective with hospital cost reporting periods beginning on or after October 1, 2000, section 1886(d)(5)(D)(i) of the Act (as amended by section 6003(e) of Pub. L. 101-239) and section 1886(b)(3)(I) of the Act (as added by section 405 of Pub. L. 106-113 and further amended by section 213 of Pub. L. 106-554), provide that SCHs are paid based on whichever of the following rates yields the greatest aggregate payment to the hospital for the cost reporting period: The Federal rate applicable to the hospital;
                    The updated hospital-specific rate based on FY 1982 costs per discharge;
                    The updated hospital-specific rate based on FY 1987 costs per discharge; or
                    The updated hospital-specific rate based on FY 1996 costs per discharge. For purposes of payment to SCHs for which the FY 1996 hospital-specific rate yields the greatest aggregate payment, payments for discharges during FYs 2001, 2002, and 2003 were based on a blend of the FY 1996 hospital-specific rate and the greater of the Federal rate or the updated FY 1982 or FY 1987 
                        ( print page 23662)
                        hospital-specific rate. For discharges during FY 2004 and subsequent fiscal years, payments based on the FY 1996 hospital-specific rate are 100 percent of the updated FY 1996 hospital-specific rate. Through and including FY 2006, under section 1886(d)(5)(G) of the Act, MDHs are paid based on the Federal rate or, if higher, the Federal rate plus 50 percent of the difference between the Federal rate and the updated hospital-specific rate based on FY 1982 or FY 1987 costs per discharge, whichever is higher. However, section 5003 of Pub. L. 109-171 (DRA) modified these rules for discharges occurring on or after October 1, 2006. Section 5003(c) changed the 50 percent adjustment to 75 percent. Section 5003(b) requires that an MDH use the 2002 cost reporting year as its base year (that is, the FY 2002 updated hospital-specific rate), if that use results in a higher payment. MDHs do not have the option to use their FY 1996 hospital-specific rate. For each cost reporting period, the fiscal intermediary/MAC determines which of the payment options will yield the highest aggregate payment. Interim payments are automatically made at the highest rate using the best data available at the time the fiscal intermediary/MAC makes the determination. However, it may not be possible for the fiscal intermediary/MAC to determine in advance precisely which of the rates will yield the highest aggregate payment by year's end. In many instances, it is not possible to forecast the outlier payments, the amount of the DSH adjustment, or the IME adjustment, all of which are applicable only to payments based on the Federal rate and not to payments based on the hospital-specific rate. The fiscal intermediary/MAC makes a final adjustment at the close of the cost reporting period after it determines precisely which of the payment rates would yield the highest aggregate payment to the hospital. If a hospital disagrees with the fiscal intermediary's or MAC's determination regarding the final amount of program payment to which it is entitled, it has the right to appeal the fiscal intermediary's or MAC's decision in accordance with the procedures set forth in 42 CFR Part 405, Subpart R, which concern provider payment determinations and appeals. 2. Volume Decrease Adjustment for SCHs and MDHs: Data Sources for Determining Core Staff Values Section 1886(d)(5)(D)(ii) of the Act requires that the Secretary make a payment adjustment to an SCH that experiences a decrease of more than 5 percent in its total number of inpatient discharges from one cost reporting period to the next, if the circumstances leading to the decline in discharges were beyond the SCH's control. Section 1886(d)(5)(G)(iii) of the Act requires that the Secretary make a payment adjustment to an MDH that experiences a decrease of more than 5 percent in its total number of inpatient discharges from one cost reporting period to the next, if the circumstances leading to the decline in discharges were beyond the MDH's control. These adjustments were designed to compensate an SCH or MDH for the fixed costs it incurs in the year in which the reduction in discharges occurred, which it may be unable to reduce. Such costs include the maintenance of necessary core staff and services. Our records indicate that less than 10 SCHs/MDHs request and receive this payment adjustment each year. We believe that not all staff costs can be considered fixed costs. Using a standardized formula specified by us, the SCH or MDH must demonstrate that it appropriately adjusted the number of staff in inpatient areas of the hospital based on the decrease in the number of inpatient days. This formula examines nursing staff in particular. If an SCH or MDH has an excess number of nursing staff, the cost of maintaining those staff members is deducted from the total adjustment. One exception to this policy is that no SCH or MDH may reduce its number of staff to a level below what is required by State or local law. In other words, an SCH or MDH will not be penalized for maintaining a level of staff that is consistent with State or local requirements. The process for determining the amount of the volume decrease adjustment can be found in Section 2810.1 of the Provider Reimbursement Manual, Part 1 (PRM-1). Fiscal intermediaries/MACs are responsible for establishing whether an SCH or MDH is eligible for a volume decrease adjustment and, if so, the amount of the adjustment. To qualify for this adjustment, the SCH or MDH must demonstrate that: (a) a decrease of more than 5 percent in total number of inpatient discharges has occurred; and (b) the circumstance that caused the decrease in discharges was beyond the control of the hospital. Once the fiscal intermediary/MAC has established that the SCH or MDH satisfies these two requirements, it will calculate the adjustment. The adjustment amount is determined by subtracting the second year's DRG payment from the lesser of: (a) the second year's costs minus any adjustment for excess staff; or (b) the previous year's costs multiplied by the appropriate IPPS update factor minus any adjustment for excess staff. The SCH or MDH receives the difference in a lump-sum payment. In order to determine whether or not the hospital's nurse staffing level is appropriate, the fiscal intermediary/MAC compares the hospital's actual number of nursing staff in each area with the staffing of like-size hospitals in the same census region. If a hospital employs more than the reported average number of nurses for hospitals of its size and census region, the fiscal intermediary/MAC reduces the amount of the adjustment by the cost of maintaining the additional staff. The amount of the reduction is calculated by multiplying the actual number of nursing staff above the reported average by the average nurse salary for that hospital as reported on the Medicare cost report. The complete process for determining the amount of the adjustment can be found at Section 2810.1 of the PRM-1. Prior to FY 2007, our policy was for fiscal intermediaries/MACs to obtain average nurse staffing data from the AHA HAS/Monitrend Data Book. However, in light of concerns that the Data Book had been published in 1989 and is no longer updated, in the FY 2007 IPPS rule, we proposed and finalized our policy to update the data sources and methodology used to determine the core staffing factors (that is, the average nursing staff for similar bed size and census region) for purposes of calculating the volume decrease adjustment (71 FR 48056 through 48060). We specified that for adjustment requests for decreases in discharges beginning with FY 2007 (that is, a decrease in discharges in 2007 as compared to 2006), an SCH or MDH could opt to use one of two data sources: the AHA Annual Survey or the Occupational Mix Survey, but could not use the HAS/Monitrend Data Book. (For any open adjustment requests prior to FY 2007, we allowed SCHs and MDHs the option of using the results of any of three sources: (1) The 2006 Occupational Mix Survey for cost reporting periods beginning in FY 2006; (2) the AHA Annual Survey (where available); or (3) the AHA HAS/Monitrend Data Book. We also specified a methodology for calculating those core staffing factors. For purposes of explaining the methodology, we applied it to the 2003 Occupational Mix Survey data. In our explanation, we recognized that some of the 2003 data seemed anomalous, and we solicited comments on a possible alternative methodology. However, there were no suggested alternative methodologies from the 
                        ( print page 23663)
                        commenters. We also explained that, while we used the 2003 Occupational Mix Survey data “for purposes of describing how we would implement this methodology,” the final policy was to use FY 2006 Occupational Mix Survey data going forward. At the time we published the proposed and final rules, however, we had not yet processed the FY 2006 data, and could not present the core staffing figures that resulted from such data. We have now processed the 2006 Occupational Mix Survey data using the methodology specified in the FY 2007 IPPS final rule and continue to see some results that cause us to believe that the methodology for calculating the core staffing factors should be slightly revised from the methodology discussed in the FY 2007 IPPS final rule (71 FR 48056 through 48060). The new methodology uses a revised formula to remove outliers from the core staffing values. a. Occupational Mix Survey In the FY 2007 IPPS final rule (71 FR 48055), we explained the methodology we would use for calculating core staffing values from the Occupational Mix Survey. We stated that we would calculate the nursing hours per patient day for each SCH or MDH by dividing the number of paid nursing hours (for registered nurses, licensed practical nurses and nursing aides) reported on the Occupational Mix Survey by the number of patients days reported on the Medicare cost report. The results would be grouped in the same bed-size groups and census regions as were used in the HAS/Monitrend Data Book. We indicated that we would publish the mean number of nursing hours per patient day, for each census region and bed-size group, in the 
                        **Federal Register**
                         and on the CMS Web site. For purposes of the volume decrease adjustment, the published data would be utilized in the same way as the HAS/Monitrend data: The fiscal intermediary/MAC would multiply the SCH's and MDH's number of patient days by the applicable published hours per patient day. This figure would be divided by the average number of worked hours per year per nurse (for example, 2,080 for a standard 40-hour week). The result would be the target number of core nursing staff for the particular SCH or MDH. If necessary, the cost of any excess staff (number of FTEs that exceed the published number) would be removed from the second year's costs or, if applicable, the previous year's costs multiplied by the IPPS update factor when determining the volume decrease adjustment. In the FY 2007 IPPS final rule (71 FY 48057), we stated that we would use the results of the FY 2006 Occupational Mix Survey and begin applying the methodology for adjustments resulting from a decrease in discharges in FY 2007. Because the occupational mix survey is conducted once every 3 years, we would update the data set every 3 years. However, at the time of the FY 2007 IPPS final rule, the FY 2006 Occupational Mix Survey data were not available. In that final rule, we described our methodology using the FY 2003 occupational mix data and the FY 2003 Medicare cost report file. However, these data were used only in order to present an example of how our methodology would work. Our final policy was to use FY 2006 occupational mix and cost report data when actually processing adjustment requests. In the FY 2007 IPPS final rule, to illustrate how we would calculate the average number of nursing hours per patient day by bed size and region, we first merged the FY 2003 Occupational Mix Survey data with the FY 2003 Medicare cost report file. We eliminated all observations for non-IPPS providers, providers who failed to complete the occupational mix survey and the providers for which provider numbers, bed counts, and/or days counts were missing. For each provider in the pool, we calculated the number of nursing hours by adding the number of registered nurses, licensed practical nurses, and nursing aide hours reported on the Occupational Mix Survey. We divided the result of this calculation by the total number of inpatient days reported on the cost report to determine the number of nursing hours per patient day. For purposes of calculating the census regional averages for the various bed-size groups, we finalized our rule to only include observations that fell within three standard deviations of the mean of all observations, thus removing potential outliers in the data. When the FY 2006 Occupational Mix Survey data became available, our analysis of the results indicated that the methodology for computing core staffing factors should be further revised in order to further eliminate outlier data. After consulting with the Office of the Actuary on appropriate statistical methods to remove outlier data, we are proposing to modify our methodology for calculating the average nursing hours per patient day using the FY 2006 Occupational Mix Survey data and FY 2006 Medicare cost report data. Similar to what was finalized in the FY 2007 IPPS rule, we are proposing to merge the FY 2006 Occupational Mix Survey data with the FY 2006 Medicare cost report file. We would then eliminate all observations for non-IPPS providers, providers who failed to complete the occupational mix survey and the providers for which provider numbers, bed counts and/or days counts were missing. We would annualize the results so that the nursing hours from the Occupational Mix Survey and the patient days reported on the Medicare cost report is representative of one year. For each provider in the pool, we would calculate the number of nursing hours by adding the number of registered nurses, licensed practical nurses, and nursing aide hours reported on the Occupational Mix Survey. We would divide the result of this calculation by the total number of patient days reported on line 12 on Worksheet S-3, Part I, Column 6 of the Medicare cost report. This includes patient days in the general acute care area and the intensive care unit area. The result is the number of nursing hours per patient day. For purposes of calculating the census regional averages for the various bed-size groups, we are proposing a different method to remove outliers in the data. First, we would calculate the difference between the observations in the 75th percentile and the 25th percentile, which is the inter-quartile range. We would remove observations that are greater than the 75th percentile plus 1.5 times the inter-quartile range and less than the 25th percentile minus 1.5 times the inter-quartile range. This methodology, known as the Tukey method, is a common statistical method used by the Office of the Actuary. Under the standard deviation method described in the FY 2007 IPPS final rule, the mean and standard deviation can be influenced by extreme values (because the standard deviation is increased by the very observations that would otherwise be discarded from the analysis). Our proposed methodology is a more robust technique because it uses the quartile values instead of variance to describe the spread of the data, and quartiles are less influenced by extreme outlier values that may be present in the data. Our proposed method would prevent the mean from being influenced by extreme observations and assumes that the middle 50 percent of the data has no outlier observations. The application of this methodology would result in a pool of approximately 2,578 providers. Each census region and bed group category required at least three providers in order for their average to be published. The results of the average nursing hours per patient day by bed size and region using 
                        ( print page 23664)
                        the FY 2006 Occupational Mix Survey Data and the FY 2006 hospital cost report data are shown in the table below. As stated in the FY 2007 IPPS final rule (71 FR 48059), the results of the FY 2006 Occupational Mix Survey may be used for the volume decrease adjustment calculations for decreases in discharges beginning with cost reporting periods beginning in FYs 2006, 2007, and 2008. Paid Nursing Hours per Patient Day
Number of beds
Census RegionNew
                                 England
Middle
                                 Atlantic
South
                                 Atlantic
East North Central
East South Central
West North Central
West South Central
Mountain
Pacific(1)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
(9)0-49
25.47
20.60
21.08
24.52
20.27
25.92
22.16
24.52
20.9950-99
20.99
18.51
20.36
23.44
19.00
22.44
20.44
22.54
18.89100-199
18.12
16.31
17.31
18.87
17.43
19.50
17.01
18.70
16.25200-399
16.92
13.80
16.23
17.79
16.06
18.66
14.56
16.82
16.63400+
17.52
14.43
16.68
18.41
14.14
16.90
16.25
15.50
18.15
 b. AHA Annual Survey In the FY 2007 IPPS final rule (71 FR 48058), we also allowed SCHs or MDHs that experienced a greater than 5 percent reduction in the number of discharges in a cost reporting period the option of using the AHA Annual Survey results, where available, to compare the number of hospital's core staff with other like-sized hospitals in its geographic area. Our methodology for calculating the nursing hours per patient day using the AHA Annual Survey data and the Medicare hospital cost report was similar to the methodology using the Occupational Mix Survey data (eliminating outliers outside of three standard deviations from the mean). For this reason, as with the occupational mix data, both standard deviations and the mean could be influenced by extreme values. Therefore, we are proposing to refine our methodology to calculate the core staffing factors using the AHA Annual Survey data as well. The AHA Annual Survey contains FTE counts for registered nurses, practical and vocational nurses, nursing assistive personnel, and other personnel in both inpatient and outpatient areas of the hospital. This is consistent with the Occupational Mix Survey which collects data on both the inpatient and outpatient areas of the hospital. In the FY 2007 IPPS final rule, we stated we would calculate the nursing hours per patient day using the AHA Annual Survey data in a similar method to the Occupational Mix Survey. Consistent with the HAS/Monitrend Data book, we would only calculate the average number of nursing staff for a bed-size/census group if there are data available for three or more hospitals. First, we would merge the AHA Annual Survey Data with the corresponding Medicare cost report. We would eliminate all observations for non-IPPS providers, providers with hospital-based SNFs, and the providers for which provider numbers, bed counts, and/or days counts were missing. We would multiply the number of nurse, licensed practical nurse, and nursing aide FTEs reported on the AHA Annual Survey by 2,080 hours to derive the number of nursing hours per year (based on a 40-hour work week). We would then divide this number by the total number of patient days reported on line 12 on Worksheet S-3, Part I, Column 6 of the Medicare cost report. In the FY 2007 IPPS final rule (71 FR 48060), we had stated that we would eliminate all providers with results beyond three standard deviations from the mean. However, to be consistent with our methodology with the Occupational Mix Survey data, we are also proposing that we would remove outliers from the AHA Annual Survey data by calculating the difference between the observations in the 75th percentile and the 25th percentile, which is the inter-quartile range. Then, we are proposing to remove observations that are greater than the 75th percentile plus 1.5 times the inter-quartile range and less than the 25th percentile minus 1.5 times the inter-quartile range. After removing the outliers, we would group the hospitals by bed size and census area to calculate the average number of nursing hours per patient day for each category. Using the 2006 AHA Annual Survey data as an example, this would result in a pool of approximately 1,205 providers. The results of the nursing hours per patient day using the 2006 AHA Annual Survey data and the Medicare cost report data are shown below. The 2006 Survey would be used for the volume decrease adjustment calculations for decreases in discharges occurring during cost reporting periods beginning in FY 2006. As we stated in the FY 2007 IPPS final rule, for other years, the corresponding AHA Annual Survey would be used for the year in which the decreased occurred. For example, if a hospital experienced a decrease between its 2004 and 2005 cost reporting periods, the fiscal intermediary/MAC would compare the hospital's 2005 staffing with the results of the 2005 AHA Annual Survey, using the methodology discussed above. Paid Nursing Hours per Patient Day
Number of beds
Census RegionNew
                                 England
Middle
                                 Atlantic
South
                                 Atlantic
East North
                                 Central
East South Central
West North Central
West South Central
Mountain
Pacific(1)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
(9)0-49
25.82
23.48
21.77
26.12
17.25
24.75
23.66
25.44
24.5050-99
23.42
19.40
20.69
23.47
22.06
23.28
20.55
19.28
19.91( print page 23665)100-199
18.89
17.46
18.43
20.08
19.64
20.23
19.02
18.80
18.71200-399
18.89
14.96
15.75
17.02
15.07
19.81
15.85
18.17
18.01400+
18.98
16.66
17.39
21.59
16.47
17.71
15.06
17.76
21.11
 E. Rural Referral Centers (RRCs) (§ 412.96) Under the authority of section 1886(d)(5)(C)(i) of the Act, the regulations at § 412.96 set forth the criteria that a hospital must meet in order to qualify under the IPPS as an RRC. For discharges occurring before October 1, 1994, RRCs received the benefit of payment based on the other urban standardized amount rather than the rural standardized amount. Although the other urban and rural standardized amounts are the same for discharges occurring on or after October 1, 1994, RRCs continue to receive special treatment under both the DSH payment adjustment and the criteria for geographic reclassification. Section 402 of Pub. L. 108-173 raised the DSH adjustment for other rural hospitals with less than 500 beds and RRCs. Other rural hospitals with less than 500 beds are subject to a 12-percent cap on DSH payments. RRCs are not subject to the 12-percent cap on DSH payments that is applicable to other rural hospitals (with the exception of rural hospitals with 500 or more beds). RRCs are not subject to the proximity criteria when applying for geographic reclassification, and they do not have to meet the requirement that a hospital's average hourly wage must exceed the average hourly wage of the labor market area where the hospital is located by a certain percentage (106/108 percent in FY 2008). Section 4202(b) of Pub. L. 105-33 states, in part, “[a]ny hospital classified as an RRC by the Secretary * * * for fiscal year 1991 shall be classified as such an RRC for fiscal year 1998 and each subsequent year.” In the August 29, 1997 final rule with comment period (62 FR 45999), we reinstated RRC status for all hospitals that lost the status due to triennial review or MGCRB reclassification, but did not reinstate the status of hospitals that lost RRC status because they were now urban for all purposes because of the OMB designation of their geographic area as urban. However, subsequently, in the August 1, 2000 final rule (65 FR 47089), we indicated that we were revisiting that decision. Specifically, we stated that we would permit hospitals that previously qualified as an RRC and lost their status due to OMB redesignation of the county in which they are located from rural to urban to be reinstated as an RRC. Otherwise, a hospital seeking RRC status must satisfy the applicable criteria. We used the definitions of “urban” and “rural” specified in Subpart D of 42 CFR Part 412. One of the criteria under which a hospital may qualify as a RRC is to have 275 or more beds available for use (§ 412.96(b)(1)(ii)). A rural hospital that does not meet the bed size requirement can qualify as an RRC if the hospital meets two mandatory prerequisites (a minimum CMI and a minimum number of discharges), and at least one of three optional criteria (relating to specialty composition of medical staff, source of inpatients, or referral volume) (§ 412.96(c)(1) through (c)(5) and the September 30, 1988 
                        **Federal Register**
                         (53 FR 38513)). With respect to the two mandatory prerequisites, a hospital may be classified as an RRC if— The hospital's CMI is at least equal to the lower of the median CMI for urban hospitals in its census region, excluding hospitals with approved teaching programs, or the median CMI for all urban hospitals nationally; and
                    The hospital's number of discharges is at least 5,000 per year, or, if fewer, the median number of discharges for urban hospitals in the census region in which the hospital is located. (The number of discharges criterion for an osteopathic hospital is at least 3,000 discharges per year, as specified in section 1886(d)(5)(C)(i) of the Act.) 1. Case-Mix Index Section 412.96(c)(1) provides that CMS establish updated national and regional CMI values in each year's annual notice of prospective payment rates for purposes of determining RRC status. The methodology we used to determine the national and regional CMI values is set forth in the regulations at § 412.96(c)(1)(ii). The proposed national median CMI value for FY 2009 includes all urban hospitals nationwide, and the proposed regional values for FY 2009 are the median CMI values of urban hospitals within each census region, excluding those hospitals with approved teaching programs (that is, those hospitals that train residents in an approved GME program as provided in § 413.75). These values are based on discharges occurring during FY 2007 (October 1, 2006 through September 30, 2007), and include bills posted to CMS' records through December 2007. We are proposing that, in addition to meeting other criteria, if rural hospitals with fewer than 275 beds are to qualify for initial RRC status for cost reporting periods beginning on or after October 1, 2008, they must have a CMI value for FY 2007 that is at least— 1.4285; or
                    The median CMI value (not transfer-adjusted) for urban hospitals (excluding hospitals with approved teaching programs as identified in § 413.75) calculated by CMS for the census region in which the hospital is located. The proposed median CMI values by region are set forth in the following table: Region
Case-mix 
                                 index value1. New England (CT, ME, MA, NH, RI, VT)
1.25152. Middle Atlantic (PA, NJ, NY)
1.26913. South Atlantic (DE, DC, FL, GA, MD, NC, SC, VA, WV)
1.3589( print page 23666)4. East North Central (IL, IN, MI, OH, WI)
1.35725. East South Central (AL, KY, MS, TN)
1.30406. West North Central (IA, KS, MN, MO, NE, ND, SD)
1.35577. West South Central (AR, LA, OK, TX)
1.44058. Mountain (AZ, CO, ID, MT, NV, NM, UT, WY)
1.46929. Pacific (AK, CA, HI, OR, WA)
1.3872
 The preceding numbers will be revised in the FY 2009 IPPS final rule to the extent required to reflect the updated FY 2007 MEDPAR file, which will contain data from additional bills received through March 2008. Hospitals seeking to qualify as RRCs or those wishing to know how their CMI value compares to the criteria should obtain hospital-specific CMI values (not transfer-adjusted) from their fiscal intermediaries. Data are available on the Provider Statistical and Reimbursement (PS&R) System. In keeping with our policy on discharges, these CMI values are computed based on all Medicare patient discharges subject to the IPPS DRG-based payment. 2. Discharges Section 412.96(c)(2)(i) provides that CMS set forth the national and regional numbers of discharges in each year's annual notice of prospective payment rates for purposes of determining RRC status. As specified in section 1886(d)(5)(C)(ii) of the Act, the national standard is set at 5,000 discharges. We are proposing to update the regional standards based on discharges for urban hospitals' cost reporting periods that began during FY 2006 (that is, October 1, 2005 through September 30, 2006), which is the latest cost report data available at the time this proposed rule was developed. Therefore, we are proposing that, in addition to meeting other criteria, a hospital, if it is to qualify for initial RRC status for cost reporting periods beginning on or after October 1, 2008, must have as the number of discharges for its cost reporting period that began during FY 2006 a figure that is at least— 5,000 (3,000 for an osteopathic hospital); or
                    The median number of discharges for urban hospitals in the census region in which the hospital is located, as indicated in the following table. Region
Number of 
                                 discharges1. New England (CT, ME, MA, NH, RI, VT)
8,1582. Middle Atlantic (PA, NJ, NY)
10,4433. South Atlantic (DE, DC, FL, GA, MD, NC, SC, VA, WV)
10,3444. East North Central (IL, IN, MI, OH, WI)
8,9005. East South Central (AL, KY, MS, TN)
7,4016. West North Central (IA, KS, MN, MO, NE, ND, SD)
7,9887. West South Central (AR, LA, OK, TX)
5,8168. Mountain (AZ, CO, ID, MT, NV, NM, UT, WY)
9,9199. Pacific (AK, CA, HI, OR, WA)
8,600
 These numbers will be revised in the FY 2009 IPPS final rule based on the latest available cost reports. We note that the median number of discharges for hospitals in each census region is greater than the national standard of 5,000 discharges. Therefore, 5,000 discharges is the minimum criterion for all hospitals. We reiterate that, if an osteopathic hospital is to qualify for RRC status for cost reporting periods beginning on or after October 1, 2008, the hospital would be required to have at least 3,000 discharges for its cost reporting period that began during FY 2005. F. Indirect Medical Education (IME) Adjustment (§ 412.105) 1. Background Section 1886(d)(5)(B) of the Act provides for an additional payment amount under the IPPS for hospitals that have residents in an approved graduate medical education (GME) program in order to reflect the higher indirect patient care costs of teaching hospitals relative to nonteaching hospitals. The regulations regarding the calculation of this additional payment, known as the indirect medical education (IME) adjustment, are located at § 412.105. The Balanced Budget Act of 1997 (Pub. L. 105-33) established a limit on the number of allopathic and osteopathic residents that a hospital may include in its full-time equivalent (FTE) resident count for direct GME and IME payment purposes. Under section 1886(h)(4)(F) of the Act, for cost reporting periods beginning on or after October 1, 1997, a hospital's unweighted FTE count of residents for purposes of direct GME may not exceed the hospital's unweighted FTE count for its most recent cost reporting period ending on or before December 31, 1996. Under section 1886(d)(5)(B)(v) of the Act, a similar limit on the FTE resident count for IME purposes is effective for discharges occurring on or after October 1, 1997. 2. IME Adjustment Factor for FY 2009 The IME adjustment to the MS-DRG payment is based in part on the applicable IME adjustment factor. The IME adjustment factor is calculated by using a hospital's ratio of residents to beds, which is represented as 
                        *r*, and a formula multiplier, which is represented as 
                        *c*, in the following equation: 
                        *c*
                         x [{1 + 
                        *r*
                        }.405
                         − 1]. The formula is traditionally described in terms of a certain percentage increase in payment for every 10-percent increase in the resident-to-bed ratio. Section 502(a) of Pub. L. 108-173 modified the formula multiplier 
                        *(c)*
                         to be used in the calculation of the IME adjustment. Prior to the enactment of Pub. L. 108-173, the formula multiplier was fixed at 1.35 for discharges occurring during FY 2003 and thereafter. In the FY 2005 IPPS final rule, we announced the schedule of formula multipliers to be used in the calculation of the IME adjustment and incorporated the schedule in our 
                        ( print page 23667)
                        regulations at § 412.105(d)(3)(viii) through (d)(3)(xii). Section 502(a) modifies the formula multiplier beginning midway through FY 2004 and provides for a new schedule of formula multipliers for FYs 2005 and thereafter as follows: For discharges occurring on or after April 1, 2004, and before October 1, 2004, the formula multiplier is 1.47.
                    For discharges occurring during FY 2005, the formula multiplier is 1.42.
                    For discharges occurring during FY 2006, the formula multiplier is 1.37.
                    For discharges occurring during FY 2007, the formula multiplier is 1.32.
                    For discharges occurring during FY 2008 and fiscal years thereafter, the formula multiplier is 1.35. Accordingly, for discharges occurring during FY 2009, the formula multiplier would be 1.35. We estimate that application of this formula multiplier for FY 2009 IME adjustment will result in an increase in IME payment of 5.5 percent for every approximately 10-percent increase in the hospital's resident-to-bed ratio. G. Medicare GME Affiliation Provisions for Teaching Hospitals in Certain Emergency Situations; Technical Correction (§ 413.79(f)(6)(iv)) 1. Background Under section 1886(h) of the Act, as amended by section 9202 of the Consolidated Omnibus Budget Reconciliation Act (COBRA) of 1985 (Pub. L. 99-272), the Secretary is authorized to make payments to hospitals for the direct costs of approved GME programs. Section 1886(d)(5)(B) of the Act provides that prospective payment acute care hospitals that have residents in an approved GME program receive an additional payment for a Medicare discharge to reflect the higher patient care costs of teaching hospitals, that is, IME costs. Sections 1886(h)(4)(F) and 1886(d)(5)(B)(v) of the Act establish limits on the number of allopathic and osteopathic residents that hospitals may count for purposes of calculating direct GME payments and the IME adjustment, respectively, establishing hospital-specific direct GME and IME FTE resident caps. Under the authority granted by section 1886(h)(4)(H)(ii) of the Act, the Secretary issued rules to allow institutions that are members of the same affiliated group to apply their direct GME and IME FTE resident caps on an aggregate basis through a Medicare GME affiliation agreement. The Medicare regulations at §§ 413.75 and 413.76 permit hospitals, through a Medicare GME affiliation agreement, to adjust IME and direct GME FTE resident caps to reflect the rotation of residents among affiliated hospitals. In response to circumstances in the aftermath of Hurricanes Katrina and Rita, we supplemented regulations in the April 12, 2006 interim final rule with comment period published in the 
                        **Federal Register**
                         (71 FR 18654). The regulatory changes allowed certain hospitals to engage in emergency Medicare GME affiliations so that Medicare funding for GME is maintained while there are displaced residents training at various host hospitals even as the hurricane-affected hospitals are rebuilding their training programs. The modifications to the regulations at § 413.75(b) and § 413.76(f) provided flexibility for home hospitals whose residency programs have been disrupted due to an emergency to enter into 
                        *emergency*
                         Medicare GME affiliation agreements with host hospitals where the hospitals may not otherwise meet the regulatory requirements to form Medicare GME affiliations. (We note that on November 27, 2007, we issued a second interim final rule with comment period providing further flexibility relating to emergency Medicare GME affiliation agreements (72 FR 66893 through 66898). We expect to address the public comments received on both interim final rules with comment period and finalize our policies in the FY 2009 IPPS final rule scheduled to be published in August 2008.) 2. Technical Correction In the April 12, 2006 interim final rule, we revised § 413.79(f) by adding a new paragraph (6) to provide for more flexibility in Medicare GME affiliations for home hospitals located in section 1135 emergency areas to allow the home hospitals to efficiently find training sites for displaced residents. We have discovered that, under § 413.79(f)(6)(iv), in our provisions on the host hospital exception from the rolling average for the period from August 29, 2005 to June 30, 2006, we included an incorrect cross-reference to the rolling average requirements for direct GME as “§ 413.75(d).” The correct citation to the rolling average requirements for direct GME is § 413.79(d). We are proposing to correct the cross-reference under § 413.79(f)(6)(iv) to read “paragraph (d) of this section”. H. Payments to Medicare Advantage Organizations: Collection of Risk Adjustment Data (§ 422.310) Section 1853 of the Act requires CMS to make advance monthly payments to a Medicare Advantage (MA) organization for each beneficiary enrolled in an MA plan offered by the organization for coverage of Medicare Part A and Part B benefits. Section 1853(a)(1)(C) of the Act requires CMS to adjust the monthly payment amount for each enrollee to take into account the health status of the MA plan's enrollees. Under the CMS-Hierarchical Condition Category (HCC) risk adjustment payment methodology, CMS determines risk scores for MA enrollees for a year and adjusts the monthly payment amount using the appropriate enrollee risk score. Under section 1853(a)(3)(B) of the Act, MA organizations are required to “submit data regarding inpatient hospital services . . . and data regarding other services and other information as the Secretary deems necessary” in order to implement a methodology for “risk adjusting” payments made to MA organizations. Risk adjustments to payments are made in order to take into account “variations in per capita costs based on [the] health status” of the Medicare beneficiaries enrolled in an MA plan offered by the organization. Submission of data on inpatient hospital services has been required with respect to services beginning on or after July 1, 1997. Submission of data on other services has been required since July 1, 1998. While we initially required the submission of comprehensive data regarding services provided by MA organizations, including comprehensive inpatient hospital encounter data, we subsequently permitted MA organizations to submit an “abbreviated” set of data. Our regulations at 42 CFR 422.310(d)(1) currently explicitly provide MA organizations with the option of submitting an abbreviated data set. Under this provision, we currently collect limited risk adjustment data from MA organizations, primarily diagnosis data. From calendar years 2000 through 2006, application of risk adjustment to MA payments was “phased in” with an increasing percentage of the monthly capitation payment subjected to risk adjustment. Beginning with calendar year 2007, 100 percent of payments to MA organizations are risk-adjusted. Given the increased importance of the accuracy of our risk adjustment methodology, we are proposing to amend § 422.310 to provide that CMS will collect data from MA organizations regarding each item and service provided to an MA plan enrollee. This will allow us to include utilization data and other factors that CMS can use in developing the CMS-HCC risk 
                        ( print page 23668)
                        adjustment models in order to reflect patterns of diagnoses and expenditures in the MA program. Specifically, we are proposing to revise § 422.310(a) to clarify that risk adjustment data are data used not only in the application of risk adjustment to MA payments, but also in the development of risk adjustment models. For example, once encounter data for MA enrollees are available, CMS would have beneficiary-specific information on the utilization of services by MA plan enrollees. These data could be used to calibrate the CMS-HCC risk adjustment models using MA patterns of diagnoses and expenditures. We are proposing to revise §§ 422.310(b), (c), (d)(3), and (g) to clarify that the term “services” includes items and services. We are proposing to revise § 422.310(d) to clarify that CMS has the authority to require MA organizations to submit encounter data for each item and service provided to an MA plan enrollee. The proposed revision also would clarify that CMS will determine the formats for submitting encounter data, which may be more abbreviated than those used for the fee-for-service claims data submission process. We are proposing to revise § 422.310(f) to clarify that one of the “other” purposes for which CMS may use risk adjustment data collected under this section would be to update risk adjustment models with data from MA enrollees. In addition, when providing that CMS may use risk adjustment data for purposes other than adjusting payments as described at §§ 422.304(a) and (c), we are proposing to delete the phrase “except for medical records data” from paragraph (f). Any use of medical records data collected under paragraph (e) of § 422.310 is governed by the Privacy Act and the privacy provisions in the HIPAA. Furthermore, there may be occasions when we learn from analysis of medical record review data that some organizations have misunderstood our guidance on how to implement an operational instruction. We want to be able to provide improved guidance to MA organizations based on any insights that may emerge during analysis of the medical record review data. In addition, we are proposing a technical correction to § 422.310(f) to clarify that risk adjustment data are used not only to adjust payments to plans described at §§ 422.301(a)(1), (a)(2), and (a)(3) (which refer to coordinated care plans and private fee-for-service plans), but also to adjust payments for ESRD enrollees and payments to MSA plans and Religious Fraternal Benefit society plans, as described at § 422.301(c). Under § 422.310(g), we would continue to provide that data that CMS receives after the final deadline for a payment year will not be accepted for purposes of the reconciliation. However, we are proposing to revise paragraph (g)(2) of § 422.310 to change the deadline from “December 31” of the payment year to “January 31” of the year following the payment year. We are also proposing to add language to provide that CMS may adjust deadlines as appropriate. I. Hospital Emergency Services under EMTALA (§ 489.24) 1. Background Sections 1866(a)(1)(I), 1866(a)(1)(N), and 1867 of the Act impose specific obligations on certain Medicare-participating hospitals and CAHs. (Throughout this section of this proposed rule, when we reference the obligation of a “hospital” under these sections of the Act and in our regulations, we mean to include CAHs as well.) These obligations concern individuals who come to a hospital emergency department and request examination or treatment for a medical condition, and apply to all of these individuals, regardless of whether they are beneficiaries of any program under the Act. The statutory provisions cited above are frequently referred to as the Emergency Medical Treatment and Labor Act (EMTALA), also known as the patient antidumping statute. EMTALA was passed in 1986 as part of the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA), Pub. L. 99-272. Congress incorporated these antidumping provisions within the Social Security Act to ensure that individuals with emergency medical conditions are not denied essential lifesaving services. Under section 1866(a)(1)(I)(i) of the Act, a hospital that fails to fulfill its EMTALA obligations under these provisions may be subject to termination of its Medicare provider agreement, which would result in loss of all Medicare and Medicaid payments. Section 1867 of the Act sets forth requirements for medical screening examinations for individuals who come to the hospital and request examination or treatment for a medical condition. The section further provides that if a hospital finds that such an individual has an emergency medical condition, it is obligated to provide that individual with either necessary stabilizing treatment or an appropriate transfer to another medical facility where stabilization can occur. The EMTALA statute also outlines the obligation of hospitals to receive appropriate transfers from other hospitals. Section 1867(g) of the Act states that a participating hospital that has specialized capabilities or facilities (such as burn units, shock-trauma units, neonatal intensive care units, or, with respect to rural areas, regional referral centers as identified by the Secretary in regulation) shall not refuse to accept an appropriate transfer of an individual who requires these specialized capabilities or facilities if the hospital has the capacity to treat the individual. The regulations implementing section 1867 of the Act are found at 42 CFR 489.24. The regulations at 42 CFR 489.20(l), (m), (q), and (r) also refer to certain EMTALA requirements. The Interpretive Guidelines concerning EMTALA are found at Appendix V of the CMS State Operations Manual. 2. EMTALA Technical Advisory Group (TAG) Recommendations Section 945 of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA), Pub. L. 108-173, required the Secretary to establish a Technical Advisory Group (TAG) to advise the Secretary on issues related to the regulations and implementation of EMTALA. The MMA specified that the EMTALA TAG be composed of 19 members, including the Administrator of CMS, the Inspector General of HHS, hospital representatives and physicians representing specific specialties, patient representatives, and representatives of organizations involved in EMTALA enforcement. The EMTALA TAG's functions, as identified in the charter for the EMTALA TAG, were as follows: (1) Review EMTALA regulations; (2) provide advice and recommendations to the Secretary concerning these regulations and their application to hospitals and physicians; (3) solicit comments and recommendations from hospitals, physicians, and the public regarding the implementation of such regulations; and (4) disseminate information concerning the application of these regulations to hospitals, physicians, and the public. The TAG met 7 times during its 30-month term, which ended on September 30, 2007. At its meetings, the TAG heard testimony from representatives of physician groups, hospital associations, and others regarding EMTALA issues and concerns. During each meeting, the three subcommittees established by the TAG (the On-Call Subcommittee, the Action Subcommittee, and the Framework Subcommittee) developed 
                        ( print page 23669)
                        recommendations, which were then discussed and voted on by members of the TAG. In total, the TAG submitted 55 recommendations to the Secretary. If implemented, some of the recommendations would require regulatory changes. Of the 55 recommendations developed by the TAG, 5 have already been implemented by CMS. A complete list of TAG recommendations will be available shortly in the Emergency Medical Treatment and Labor Act Technical Advisory Group final report available at the Web site: 
                        *http://www.cms.hhs.gov/​FACA/​07_​emtalatag.asp.*
                         The following recommendations have already been implemented by CMS: That CMS revise, in the EMTALA regulations [42 CFR 489.24(b)], the following sentence contained in the definition of “labor”: “A woman experiencing contractions is in true labor unless a physician certifies that, after a reasonable time of observation, the woman is in false labor.” This recommendation was adopted with modification in the FY 2007 IPPS final rule (71 FR 48143). We revised the definition of “labor” in the regulations at § 489.24(b) to permit a physician, certified nurse-midwife, or other qualified medical person, acting within his or her scope of practice in accordance with State law and hospital bylaws, to certify that a woman is experiencing false labor. We issued Survey and Certification Letter S&C-06-32 on September 29, 2006, to clarify the regulation change. (The Survey and Certification Letter can be found at the following Web site: 
                        *http://www.cms.hhs.gov/​SurveyCertificationGenInfo/​PMSR/​list.asp*). That hospitals with specialized capabilities (as defined in the EMTALA regulations) that do not have a dedicated emergency department be bound by the same responsibilities under EMTALA as hospitals with specialized capabilities that do have a dedicated emergency department. This recommendation was adopted in the FY 2007 IPPS final rule (71 FR 48143). We added language at § 489.24(f) that makes explicit the current policy that all Medicare-participating providers with specialized capabilities are required to accept an appropriate transfer if they have the capacity to treat the individual. We issued Survey and Certification Letter S&C-06-32 on September 29, 2006, to clarify the regulation change. (The Survey and Certification Letter can be found at the following Web site: 
                        *http://www.cms.hhs.gov/​SurveyCertificationGenInfo/​PMSR/​list.asp*). That CMS clarify the intent of regulations regarding obligations under EMTALA to receive individuals who arrive by ambulance. Specifically, the TAG recommended that CMS revise a letter of guidance that had been issued by the agency to clarify its position on the practice of delaying the transfer of an individual from an emergency medical service provider's stretcher to a bed in a hospital's emergency department. This recommendation was adopted with modification by CMS in Survey and Certification Letter S&C-07-20, which was released on April 27, 2007. (The Survey and Certification Letter can be found at the following Web site: 
                        *http://www.cms.hhs.gov/​SurveyCertificationGenInfo/​PMSR/​list.asp).* That CMS clarify that a hospital may not refuse to accept an individual appropriately transferred under EMTALA on the grounds that it (the receiving hospital) does not approve the method of transfer arranged by the attending physician at the sending hospital (for example, a receiving hospital may not require the sending hospital to use an ambulance transport designated by the receiving hospital). In addition, CMS should improve its communication of such clarifications with its regional offices. This recommendation was adopted and implemented by CMS in Survey and Certification Letter S&C-07-20, which was released on April 27, 2007. (The Survey and Certification Letter can be found at the following Web site: 
                        *http://www.cms.hhs.gov/​SurveyCertificationGenInfo/​PMSR/​list.asp*). That CMS strike the language in the Interpretive Guidelines (CMS State Operations Manual, Appendix V) that addresses telehealth/telemedicine (relating to the regulations at § 489.24(j)(1)) and replace it with language that clarifies that the treating physician ultimately determines whether an on-call physician should come to the emergency department and that the treating physician may use a variety of methods to communicate with the on-call physician. A potential violation occurs only if the treating physician requests that the on-call physician come to the emergency department and the on-call physician refuses. This recommendation was adopted and implemented by CMS in Survey and Certification Letter S&C-07-23, which was released on June 22, 2007. (The Survey and Certification Letter can be found at the following Web site: 
                        *http://www.cms.hhs.gov/​SurveyCertificationGenInfo/​PMSR/​list.asp).* We are considering the remaining recommendations of the EMTALA TAG and may address them through future changes to or clarifications of the existing regulations or the Interpretive Guidelines, or both. At the end of its term, the EMTALA TAG compiled a final report to the Secretary. This report includes, among other materials, minutes from each TAG meeting as well as a comprehensive list of all of the TAG's recommendations. The final report will be available shortly at the following Web site: 
                        *http://www.cms.hhs.gov/​FACA/​07_​emtalatag.asp.* 3. Proposed Changes Relating to Applicability of EMTALA Requirements to Hospital Inpatients While many issues pertaining to EMTALA involve individuals presenting to a hospital's dedicated emergency department, questions have been raised regarding the applicability of the EMTALA requirements to inpatients. We have previously discussed the applicability of the EMTALA requirements to hospital inpatients in both the May 9, 2002 IPPS proposed rule (67 FR 31475) and the September 9, 2003 stand alone final rule on EMTALA (68 FR 53243). As we stated in both of the aforementioned rules, in 1999, the United States Supreme Court considered a case (
                        *Roberts*
                         v. 
                        *Galen of Virginia*, 525 U.S. 249 (1999)) that involved, in part, the question of whether EMTALA applies to inpatients in a hospital. In the context of that case, the United States Solicitor General advised the Court that HHS would develop a regulation clarifying its position on that issue. In the 2003 final rule, CMS took the position that a hospital's obligation under EMTALA ends when that hospital, in good faith, admits an individual with an unstable emergency medical condition as an inpatient to that hospital. In that rule, CMS noted that other patient safeguards protected inpatients, including the CoPs as well as State malpractice law. However, in the 2003 final rule, CMS did not directly address the question of whether EMTALA's “specialized care” requirements (section 1867(g) of the Act) applied to inpatients. As noted in section IV.I.2. of this preamble, the EMTALA TAG has developed a set of recommendations to the Secretary. One of those recommendations calls for CMS to revise its regulations to address the situation of an individual who: (1) 
                        ( print page 23670)
                        Presents to a hospital that has a dedicated emergency department and is determined to have an unstabilized emergency medical condition; (2) is admitted to the hospital as an inpatient; and (3) the hospital subsequently determines that stabilizing the individual's emergency medical condition requires specialized care only available at another hospital. We believe that the obligation of EMTALA does not end for all hospitals once an individual has been admitted as an inpatient to the hospital where the individual first presented with a medical condition that was determined to be an emergency medical condition. Rather, once the individual is admitted, admission only impacts on the EMTALA obligation of the hospital where the individual first presented. (Throughout this section of the preamble of this proposed rule, we will refer to the hospital where the individual first presented as the “admitting hospital.”) Section 1867(g) of the Act states: “Nondiscrimination—A participating hospital that has specialized capabilities or facilities (such as burn units, shock-trauma units, neonatal intensive care units, or (with respect to rural areas) regional referral centers as identified by the Secretary in regulation) shall not refuse to accept an appropriate transfer of an individual who requires such specialized capabilities or facilities if the hospital has the capacity to treat the individual.” Section 1867(g) of the Act therefore requires a receiving hospital with specialized capabilities to accept a request to transfer an individual with an unstable emergency medical condition as long as the hospital has the capacity to treat that individual, regardless of whether the individual had been an inpatient at the admitting hospital. Furthermore, in the September 9, 2003 final rule (68 FR 53263), we amended the regulations at § 489.24(d)(2)(i) to state: “If a hospital has screened an individual under paragraph (a) of this section and found the individual to have an emergency medical condition, and admits that individual in good faith in order to stabilize the emergency medical condition, the hospital has satisfied its special responsibilities under this section with respect to that individual” (emphasis added). We did not intend for the regulation to end the EMTALA obligation for any other hospital to which the individual may appropriately be transferred to stabilize his or her emergency medical condition. Permitting inpatient admission at the admitting hospital to end EMTALA obligations for another hospital to which an unstabilized individual is being appropriately transferred to receive specialized care would seemingly contradict the intent of section 1867(g) of the Act to ensure that hospitals with specialized capabilities provide medical treatment to individuals with emergency medical conditions to stabilize their conditions. We also note that, as we discussed in the preamble of the September 9, 2003 stand alone final rule, once a hospital has admitted an individual as an inpatient, the individual is protected under the Medicare CoPs and may also have additional protections under State law. Accordingly, we believe it is consistent with the intent of EMTALA to limit its protections to individuals who need them most; for example, individuals who present to a hospital but may not have been formally admitted as patients and thus are not covered by other protections applicable to inpatients of the hospital. As noted above, once the individual is admitted, the CoPs apply to the admitting hospital's care of that individual. A hospital that fails to provide treatment to such individuals could face termination of its Medicare provider agreement for a violation of the CoPs. However, these CoPs do not, of course, apply to a hospital with specialized capabilities to which the individual might be transferred unless and until the individual is formally admitted as a patient at that hospital. Therefore, in order to ensure an individual the protections intended by the EMTALA statute, especially section 1867(g) of the Act (obligating a hospital with specialized capabilities to accept an appropriately transferred individual if it has the capacity to treat that individual), we believe it is appropriate to propose to clarify that section 1867(g) of the Act continues to apply so as to protect even an individual who has been admitted as an inpatient to the admitting hospital who has not been stable since becoming an inpatient. We believe that this proposed clarification is necessary to ensure that EMTALA protections are continued for individuals who are not otherwise protected by the hospital CoPs. (We note that this proposed clarification is consistent with the EMATLA TAG's recommendation that EMTALA does not apply when an individual is admitted to the hospital for an elective procedure and subsequently develops an emergency medical condition.) We recognize that this proposed clarification that EMTALA applies to a hospital with specialized capabilities when an inpatient (who presented to the admitting hospital under EMTALA) is in need of specialized care to stabilize his or her emergency medical condition may raise concerns among the provider community that such a clarification in policy could hypothetically result in an increase in the number of transfers. However, the intention of this proposed clarification is 
                        *not*
                         to encourage patient dumping to hospitals with specialized capabilities. Rather, even if the hospital with specialized capabilities has an EMTALA obligation to accept an individual who was an inpatient at the admitting hospital, the admitting hospital transferring the individual should take all steps necessary to ensure that it is providing needed treatment within its capabilities prior to transferring the individual. This means that an individual with an unstabilized emergency medical condition should be transferred only when the capabilities of the admitting hospital have been exceeded. Accordingly, we are proposing to revise § 489.24(f) by adding to the existing text a provision that specifies that paragraph (f) also applies to an individual who has been admitted under paragraph (d)(2)(i) of the section and who has not been stabilized. While we are not including the following in our proposed clarification, we are seeking public comments on whether the EMTALA obligation imposed on hospitals with specialized capabilities to accept appropriate transfers should apply to a hospital with specialized capabilities in the case of an individual who had a period of stability during his or her stay at the admitting hospital and is in need of specialized care available at the hospital with specialized capabilities. CMS takes seriously its duty to protect patients with emergency medical conditions as required by EMTALA. Thus, we are seeking public comments as to whether, with respect to the EMTALA obligation on the hospital with specialized capabilities, it should or should not matter if an individual who currently has an unstabilized emergency medical condition (which is beyond the capability of the admitting hospital) (1) remained unstable after coming to the hospital emergency department or (2) subsequently had a period of stability after coming to the hospital emergency department. In summary, to implement the recommendation by the EMTALA TAG and clarify our policy regarding the applicability of EMTALA to hospital inpatients, we are proposing to amend § 489.24(f) to add a provision to state that when an individual covered by EMTALA was admitted as an inpatient and remains unstabilized with an 
                        ( print page 23671)
                        emergency medical condition, a receiving hospital with specialized capabilities has an EMTALA obligation to accept that individual, assuming that the transfer of the individual is an appropriate transfer and the participating hospital with specialized capabilities has the capacity to treat the individual. 4. Proposed Changes to the EMTALA Physician On-Call Requirements a. Relocation of Regulatory Provisions During its term, the EMTALA TAG dedicated a significant portion of its discussion to a hospital's physician on-call obligations under EMTALA and made several recommendations to the Secretary regarding physician on-call requirements that are included in its final report (will be available shortly at the Web site: 
                        *http://www.cms.hhs/​gov/​FACA/​07_​emtalatag.asp).*
                         The TAG recommended that CMS move the regulation discussing the obligation to maintain an on-call list from the EMTALA regulations at § 489.24(j)(1) to the regulations implementing provider agreements at § 489.20(r)(2). We agree with the TAG's recommendation. The requirement to maintain an on-call list is found at section 1866(a)(1)(I)(iii) of the Act, the section of the Act that refers to provider agreements. Section 1867 of the Act, which outlines the EMTALA requirements, makes no mention of the requirement to maintain an on-call list. To implement the EMTALA TAG's recommendation, we are proposing to delete the provision relating to maintaining a list of on-call physicians from § 489.24(j)(1). We note that a provision for an on-call physician list is already included in the regulations as a hospital provider agreement requirement at § 489.20(r)(2). We are proposing to incorporate the language of § 489.24(j)(1) as replacement language for the existing § 489.20(r)(2) and amend the regulatory language to make it more consistent with the statutory language found at section 1866(a)(1)(I)(iii) of the Act. Proposed revised § 489.20(r)(2) would read: “An on-call list of physicians on its medical staff available to provide treatment necessary after the initial examination to stabilize individuals with emergency medical conditions who are receiving services required under § 489.24 in accordance with the resources available to the hospital; and”. These proposed changes would make the regulations consistent with the statutory basis for maintaining an on-call list. The EMTALA TAG made additional recommendations regarding how a hospital would satisfy its on-call list obligations, including calling for an annual plan by the hospital and medical staff for on-call coverage that would include an assessment of factors such as the hospital's capabilities and services, community need for emergency department services as indicated by emergency department visits, emergent transfers, physician resources, and past performance of previous on-call plans. The TAG also recommended that a hospital have a backup plan for viable patient care options when an on-call physician is not available, including such factors as telemedicine, other staff physicians, transfer agreements, and regional or community call arrangements. While community call arrangements are discussed below, we intend to address the remainder of the TAG recommendations at a later date. b. Shared/Community Call As noted in the previous section, section 1866(a)(1)(I)(iii) of the Act states, as a requirement for participation in the Medicare program, that a hospital must keep a list of physicians who are on call for duty after the initial examination to provide treatment necessary to stabilize an individual with an emergency medical condition. If a physician on the list is called by a hospital to provide stabilizing treatment and either fails or refuses to appear within a reasonable period of time, the hospital and that physician may be in violation of EMTALA as provided for under section 1867(d)(1)(C) of the Act. Thus, hospitals are required to maintain a list of on-call physicians, and physicians or hospitals, or both, may be held responsible under the EMTALA statute if a physician who is on call fails or refuses to appear within a reasonable period of time. In the May 9, 2002 proposed rule (67 FR 31471), we stated that we were aware of hospitals' increasing concerns regarding their physician on-call requirements. Specifically, we noted that we were aware of reports of physicians, particularly specialty physicians, severing their relationships with hospitals because of on-call obligations, especially when those physicians belong to more than one hospital medical staff. We further noted that physician attrition from these medical staffs could result in hospitals having no specialty physician service coverage for their patients. In the September 9, 2003 final rule (68 FR 53264), we clarified the regulations at § 489.24(j) to permit on-call physicians to schedule elective surgery during the time that they are on call and to permit on-call physicians to have simultaneous on-call duties. We also specified that physicians, including specialists and subspecialists, are not required to be on call at all times, and that the hospital must have policies and procedures to be followed when a particular specialty is not available or the on-call physician cannot respond because of situations beyond his or her control. We expected these clarifications would help to improve access to physician services for all hospital patients by permitting hospitals flexibility to determine how best to maximize their available physician resources. Furthermore, we expected that these clarifications would permit hospitals to continue to attract physicians to serve on their medical staffs, thereby continuing to provide services to all patients, including those individuals who are covered by EMTALA. As part of its recommendations concerning physician on-call requirements, the EMTALA TAG recommended that hospitals be permitted to participate in “community call.” Specifically, the language of the recommendation states: “The TAG recommends that CMS clarify its position regarding shared or community call: that such community call arrangements are acceptable if the hospitals involved have formal agreements recognized in their policies and procedures, as well as backup plans. It should also be clarified that a community call arrangement does not remove a hospital's obligation to perform an MSE [medical screening examination].” The TAG also recommended in a subsequent recommendation that “A hospital may satisfy its on-call coverage obligation by participation in an approved community/regional call coverage program. (CMS to determine appropriate approval process).” We believe that community call (as described below) would afford additional flexibility to hospitals providing on-call services and improve access to specialty physician services for individuals in an emergency department. Therefore, we are proposing to amend our regulations at § 489.24(j) to provide that hospitals may comply with the on-call list requirement specified at § 489.20(r)(2) (under our proposed revision), by participating in a formal community call plan so long as the plan meets the elements outlined below. We are further proposing to revise the regulations to state that, notwithstanding participation in a community call plan, hospitals are still required to perform medical screening examinations on individuals who present seeking treatment and to 
                        ( print page 23672)
                        provide for an appropriate transfer when appropriate. We propose “community call,” to be a formal on-call plan that permits a specific hospital in a region to be designated as the on-call facility for a specific time period, or for a specific service, or both. For example, if there are two hospitals that choose to participate in community call, Hospital A could be designated as the on-call facility for the first 15 days of each month and Hospital B could be designated as the on-call facility for the rest of each month. Alternatively, Hospital A could be designated as on-call for cases requiring specialized interventional cardiac care, while Hospital B could be designated as on-call for neurosurgical cases. We anticipate that hospitals and their communities would have the flexibility to develop a plan that reflects their local resources and needs. Such a community on-call plan will allow various physicians in a certain specialty in the aggregate to be on continuous call (24 hours a day, 7 days a week), without putting a continuous call obligation on any one physician. We note that generally if an individual arrives at a hospital other than the designated on-call facility, is determined to have an unstabilized emergency medical condition, and requires the services of an on-call specialist, the individual would be transferred to the designated on-call facility in accordance with the community call plan. As noted above, we are proposing that a community call plan must be a formal plan among the participating hospitals. While we do not believe it is necessary for the formal community call plan to be subject to preapproval by CMS, if an EMTALA complaint investigation is initiated, the plan will be subject to review and enforcement by CMS. We are proposing that, at a minimum, hospitals must include the following elements when devising a formal community call plan: The community call plan would include a clear delineation of on-call coverage responsibilities, that is, when each hospital participating in the plan is responsible for on-call coverage.
                    The community call plan would define the specific geographic area to which the plan applies.
                    The community call plan would be signed by an appropriate representative of each hospital participating in the plan.
                    The community call plan would ensure that any local and regional EMS system protocol formally includes information on community on-call arrangements.
                    Hospitals participating in the community call plan would engage in an analysis of the specialty on-call needs of the community for which the plan is effective.
                    The community call plan would include a statement specifying that even if an individual arrives at the hospital that is not designated as the on-call hospital, that hospital still has an EMTALA obligation to provide a medical screening examination and stabilizing treatment within its capability, and hospitals participating in community call must abide by the EMTALA regulations governing appropriate transfers.
                    There would be an annual reassessment of the community call plan by the participating hospitals. Proposed revised § 489.24(j) would read 
                        *“Availability of on-call physicians.*
                         In accordance with the on-call list requirements specified in § 489.20(r)(2), a hospital must have written policies and procedures in place—(1) To respond to situations in which a particular specialty is not available or the on-call physician cannot respond because of circumstances beyond the physician's control; and (2) To provide that emergency services are available to meet the needs of individuals with emergency medical conditions if a hospital elects to—(i) Permit on-call physicians to schedule elective surgery during the time that they are on call; (ii) Permit on-call physicians to have simultaneous on-call duties; and (iii) Participate in a formal community call plan. Notwithstanding participation in a community call plan, hospitals are still required to perform medical screening examinations on individuals who present seeking treatment and to conduct appropriate transfers. The formal community call plan must include the following elements: [proposed elements noted above in the bullets are included in regulations text].” We welcome public comments on the proposed elements of the formal community call plan noted above. We are also soliciting public comments on whether individuals believe it is important that, in situations where there is a governing State or local agency that would have authority over the development of a formal community call plan, the plan be approved by that agency. In summary, we are proposing that, as part of the obligation to have an on-call list, hospitals may choose to participate in community call, provided that the formal community call plan includes, at a minimum, the elements noted in bullets above. Additionally, each hospital participating in the community call plan must have written policies and procedures in place to respond to situations in which the on-call physician is unable to respond due to situations beyond his or her control. We are further proposing that a hospital would still be responsible for performing medical screening examinations on individuals who present to the hospital seeking treatment and conducting appropriate transfers, regardless of which hospital has on-call responsibilities on a particular day. 5. Proposed Technical Change to Regulations In the FY 2008 IPPS final rule with comment period (72 FR 47413), we revised § 489.24(a)(2) (which refers to the nonapplicability of the EMTALA provisions in an emergency area during an emergency period) to conform it to the changes made to section 1135 of the Act by the Pandemic and All-Hazards Preparedness Act. When we made the change to the regulations, we inadvertently left out language consistent with the following statutory language found in section 1135: “pursuant to an appropriate State emergency preparedness plan; or in the case of a public health emergency described in subsection (g)(1)(B) that involves a pandemic infectious disease, pursuant to a State pandemic preparedness plan or a plan referred to in clause (i), whichever is applicable in the State.” We also inadvertently left out the phrase in section 1135 “during an emergency period” when we state the nonapplicability of the sanctions in an emergency area. We are proposing to revise the language at § 489.24(a)(2) to include the aforementioned language to conform the regulation text to the statutory language. Proposed revised § 489.24(a)(2) would read as follows: 
                        *“Nonapplicability of provisions of this section.*
                         Sanctions under this section for an inappropriate transfer during a national emergency or for the direction or relocation of an individual to receive medical screening at an alternate location pursuant to an appropriate State emergency preparedness plan or, in the case of a public health emergency that involves a pandemic infectious disease, pursuant to a State pandemic preparedness plan do not apply to a hospital with a dedicated emergency department located in an emergency area during an emergency period, as specified in section 1135(g)(1) of the Act. A waiver of these sanctions is limited to a 72-hour period beginning upon the implementation of a hospital disaster protocol, except that, if a public health emergency involves a pandemic infectious disease (such as pandemic 
                        ( print page 23673)
                        influenza), the waiver will continue in effect until the termination of the applicable declaration of a public health emergency, as provided for by section 1135(e)(1)(B) of the Act.” J. Application of Incentives To Reduce Avoidable Readmissions to Hospitals 1. Introduction A significant portion of Medicare spending—$15 billion each year—is related to hospital readmissions. According to a 2005 MedPAC analysis ,[17]
                        
                         nearly 18 percent of beneficiaries who are discharged from the hospital are readmitted within 30 days, resulting in approximately 2 million readmissions. By MedPAC's method, over 13 percent of 30-day hospital readmissions and an associated $12 billion in spending (
                        4/5
                         of all Medicare spending for readmissions) were found to be potentially avoidable. Beyond cost considerations, readmissions may reflect poor quality of care and affect beneficiaries” quality of life. Though not all readmissions are avoidable, hospitals should share accountability for readmission rates that could be much lower through the application of evidence-based best practices. Interventions that have been shown to reduce readmissions include better quality of care during the hospitalization, more complete care plans, emphasis on coordination of care at the point of transitions to home or postacute care, better use of after-hospital care, and more active involvement of patients and caregivers in decision making. The application of incentives to reduce hospital readmissions, including payment and public reporting approaches, could promote the adoption and development of best practice interventions for averting avoidable readmissions, resulting in higher quality of care for Medicare beneficiaries and reduction in unnecessary costs for the program. Under the current payment system, readmissions are financially rewarding for hospitals. Application of payment incentives to encourage reduction of avoidable readmissions could help address unintended incentives in the current payment system. In this section, following discussion of readmission issues related to measurement, accountability, and interventions, we are presenting three approaches to applying incentives to reduce avoidable readmissions for public comment: (1) Direct adjustment to hospital DRG payments for avoidable readmissions, (2) adjustments to hospital DRG payments through a performance-based payment methodology, and (3) public reporting of readmission rates. We note that either type of adjustment to hospital payments for readmissions would likely require new statutory authority for the Medicare program. We are seeking public comments on all of the ideas presented in this section. 2. Measurement Routine, valid, and reliable measurement of hospital-specific rates of readmissions would be a prerequisite to any method of applying incentives for reducing hospital readmissions. Measurement data should be meaningful and actionable for hospitals and should be fair to encourage trust and engagement in the effort. Risk adjustment of measurement data is necessary to account for patientπspecific factors that influence the likelihood of readmission, such as age, disease severity, and comorbidities. Another important consideration in measurement of readmission rates is the time period from discharge to readmission (for example, 7, 15, 30, or 90 days). In section IV.B. of the preamble of this proposed rule, measures of risk-adjusted 30-day readmission rates are proposed for the RHQDAPU program. The 9th Scope of Work for Medicare Quality Improvement Organizations (QIO 9th SOW) also includes 30-day readmission measures for communities. Measures should be aligned across settings of care. Hospitals are not the only providers that affect the occurrence of readmissions. For example, the care delivered by SNFs and HHAs also has an important impact on whether a beneficiary is readmitted. Data from aligned readmissions measures, applicable to various settings of care, would provide better information about care coordination problems within and between settings. Alignment of readmissions measures would also facilitate more powerful application of incentives across Medicare's payment systems. Another consideration is whether to focus on all readmissions or to focus on those that are known to be higher cost, more easily preventable, or most frequently occurring. For example, numerous hospitals have successfully implemented programs to reduce readmissions of heart failure patients, so more is known about the prevention of heart failure readmissions. Further, heart failure readmissions may be more costly than readmissions for other conditions. Another focus of efforts to prevent readmissions could be patients with multiple chronic conditions, who may be at the highest risk to experience readmissions. 3. Accountability In the assignment of accountability for readmissions, risk adjustment of measurement data is one consideration of fairness; however, other factors must also be considered, including avoidability and shared accountability. Most clinicians would agree that a goal of zero readmissions may not be appropriate, as an extremely low rate of readmissions could indicate restricted access to needed medical services, overuse of hospital resources during the initial hospitalization (for example, prolonged length of stay), or excessive intensity of post-acute care services. Adequate risk adjustment could help to elucidate the avoidability of readmissions by identifying an expected readmission rate for a given patient or patient population. Shared accountability is another important consideration. Hospitals are clearly accountable for the care provided during hospitalization and can also affect the quality of care provided after the hospitalization, but hospitals are not the only accountable entity. Both during and after hospitalization,
                        
                         physicians and other health professionals share accountability for the quality of care. Other provider entities, including skilled nursing facilities, rehabilitation facilities, home health agencies, and end-stage renal disease facilities, also share accountability for avoidable readmissions.
                        
                         Medicare beneficiaries themselves and their caregivers and social support systems play important roles in avoiding readmissions, particularly when beneficiaries have been discharged to home. Assignment of accountability also requires consideration of situations where the patient presents for readmission with a different diagnosis or presents to a different hospital.
                        
                         If the 
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                        locus of accountability were at the hospital level, a second hospital should not be held accountable for a readmission resulting from a first hospital's lack of adherence to evidence-based best practices for averting readmissions.
                        
                         If the locus of accountability were at the community level, then shared accountability could encourage hospitals to work together to reduce readmissions. 4. Interventions A number of interventions have been identified as best practices for averting avoidable readmissions.
                        [18,19,20,21,22,23,24,25,26]
                         Some of these evidence-based interventions are listed below: Better, safer care during the hospitalization.
                    Improved communication among providers and with the patient and caregivers.
                    Care planning that begins with assessment at admission.
                    Clear discharge instructions, with specific attention to medication management.
                    Shared accountability for care coordination, with attention to transitions and hand-offs.
                    Discharge to a proper setting of care.
                    Better, safer care in the post-acute setting of care.
                    Appropriate use of palliative care and honest planning for the likely course.
                    Timely physician follow up visits.
                    Active involvement of patients and their caregivers. Interventions such as these have been employed by several participants in CMS Physician Group Practice Demonstration and have contributed to improvements in the quality and cost-efficiency of care provided to Medicare beneficiaries. For example, the University of Michigan Faculty Group Practice's transitional care call-back program contacts Medicare patients discharged from the emergency department and acute care hospital to address gaps in care during the transition between care settings. The program provides short-term care coordination with linkages to visiting nurse and community services, as well as coordination with primary care and specialty clinics. The Everett Clinic utilizes hospital coaches to guide patients and caregivers through complicated care processes during hospital stays and on discharge. The clinic proactively reaches out to recently hospitalized patients to assure that they have a physician followup visit within 10 days after discharge to address any unresolved or new health problems. CMS is considering strategies for distributing a discharge checklist that the agency developed to help beneficiaries and their caregivers prepare for discharge from a hospital or nursing home. The checklist includes a range of issues to consider and address with physicians and other health care providers to facilitate a smooth transition to home or postacute care setting. In addition, the checklist provides information about supportive home and community-based services. The QIO 9th SOW includes a theme entitled Patient Pathways (Care Transitions). The goal of this theme is to measurably improve the quality of care for Medicare beneficiaries who transition among care settings, resulting in reduced readmissions and replicable strategies to sustain reduced readmission rates. The QIO 8th SOW included initiatives to reduce avoidable readmissions of home health patients. 5. Financial Incentive: Direct Payment Adjustment The first of three approaches presented for comment is direct adjustment to hospital DRG payments for readmissions. This approach would likely require new statutory authority for the Medicare program. In section II.F. of the preamble of this proposed rule, we discuss direct adjustments to MS-DRG payment for selected preventable HACs. Similarly, a payment adjustment could be applied for readmissions determined to be avoidable because the hospital did not follow evidence-based best practices for averting readmissions. The magnitude of the payment adjustment could be based on patient-specific risk factors and on the apportionment of shared accountability among the involved entities. A variation of this approach could be adjustment of all hospital payments for readmissions, nationwide or by some regional designation, based on aggregate information about avoidable readmissions for the entire relevant Medicare population (national or regional) under typical circumstances. Under this approach, hospitals would receive less Medicare payment for readmissions for conditions with lower expected rates of readmission and less shared accountability. Potential unintended consequences resulting from a financial incentive to avert readmissions also need to be considered. For example, hospitals could begin discharging patients to settings that provide more intensive postacute care to avoid readmissions, thereby potentially driving up total costs for episodes of care and total Medicare spending. As another example of potential unintended consequences, hospitals could begin to resist medically necessary readmissions from postacute care providers, creating an access problem. 6. Financial Incentive: Performance-Based Payment Adjustment The second approach presented for comment is adjustment to hospital MS-DRG payments using a performance-based payment methodology, such as the Medicare Hospital VBP Plan referenced in section IV.C. of the preamble of this proposed rule and available at: 
                        *http://www.cms.hhs.gov/​AcuteInpatientPPS/​downloads/​HospitalVBPPlanRTCFINALSUBMITTED2007.pdf.*
                         The intent of the VBP Plan methodology is to promote adherence to evidence-based best practices in the delivery of care and to provide rewards for those who are successful in improving their measured performance. Implementation of the VBP methodology would require new statutory authority for the Medicare program. Under the VBP Plan, measures of clinical processes of care, patient experience (HCAHPS), and outcomes (30-day mortality) would be scored and translated into an incentive payment. These measures of process, outcome, and patient-centeredness address areas of quality that are important to reducing readmissions; however, other measures could be added to more fully adjust payments for readmissions. Direct measures of hospital-specific, risk adjusted readmission rates could be included in the VBP Plan performance 
                        ( print page 23675)
                        assessment model. In addition, other measures of care coordination that indirectly address readmissions could also be included. The direct adjustment approach and the VBP Plan approaches for applying financial incentives to the reduction of avoidable readmissions could be implemented separately or in combination. 7. Nonfinancial Incentive: Public Reporting A third approach presented for comment is public reporting of hospital-specific, risk adjusted readmission rates. The Administration's Value-Driven Health Care initiative, which stems from the President's Executive Order Promoting Quality and Efficient Health Care in Federal Government Health Care Programs, calls for Federal agencies to make health care quality and cost information more transparent. Health care consumers, including Medicare beneficiaries, and their providers and caregivers need better information to support more informed decision making about their care. The public reporting of readmission rates would likely not require new statutory authority for the Medicare program. The 
                        *Hospital Compare*
                         Web site could be used to report readmission rates along with the other quality and cost of care parameters displayed on that site. Public reporting has been demonstrated to be a strong non-financial incentive with a competitive effect, as hospitals appropriately focus on maintaining and enhancing their reputations as providers of high quality of care. The VBP Plan envisions public reporting in concert with the VBP financial incentive, but the public reporting incentive could be applied regardless of statutory authority to implement the VBP Plan. 8. Conclusion The purpose of this section is to solicit and encourage public comments on considerations and options for applying incentives to reduce avoidable hospital readmissions. We welcome public comments on readmission issues related to measurement, accountability, and interventions, as well as on potential approaches to applying financial and nonfinancial incentives to reduce avoidable readmissions. K. Rural Community Hospital Demonstration Program In accordance with the requirements of section 410A(a) of Pub. L. 108-173, the Secretary has established a 5-year demonstration program (beginning with selected hospitals' first cost reporting period beginning on or after October 1, 2004) to test the feasibility and advisability of establishing “rural community hospitals” for Medicare payment purposes for covered inpatient hospital services furnished to Medicare beneficiaries. A rural community hospital, as defined in section 410A(f)(1), is a hospital that— Is located in a rural area (as defined in section 1886(d)(2)(D) of the Act) or is treated as being located in a rural area under section 1886(d)(8)(E) of the Act;
                    Has fewer than 51 beds (excluding beds in a distinct part psychiatric or rehabilitation unit) as reported in its most recent cost report;
                    Provides 24-hour emergency care services; and
                    Is not designated or eligible for designation as a CAH. Section 410A(a)(4) of Pub. L. 108-173 states that no more than 15 such hospitals may participate in the demonstration program. As we indicated in the FY 2005 IPPS final rule (69 FR 49078), in accordance with sections 410A(a)(2) and (a)(4) of Pub. L. 108-173 and using 2002 data from the U.S. Census Bureau, we identified 10 States with the lowest population density from which to select hospitals: Alaska, Idaho, Montana, Nebraska, Nevada, New Mexico, North Dakota, South Dakota, Utah, and Wyoming (Source: 
                        *U.S. Census Bureau Statistical Abstract of the United States: 2003*). Nine rural community hospitals located within these States are currently participating in the demonstration program. (Of the 13 hospitals that participated in the first 2 years of the demonstration program, 4 hospitals located in Nebraska have become CAHs and have withdrawn from the program.) In a notice published in the 
                        **Federal Register**
                         on February 6, 2008 (73 FR 6971 through 6973), we announced a solicitation for up to six additional hospitals to participate in the demonstration program. Hospitals that enter the demonstration under this solicitation will be able to participate for no more than 2 years. The February 6, 2008 notice specifies the eligibility requirements for the demonstration program. Under the demonstration program, participating hospitals are paid the reasonable costs of providing covered inpatient hospital services (other than services furnished by a psychiatric or rehabilitation unit of a hospital that is a distinct part), applicable for discharges occurring in the first cost reporting period beginning on or after the October 1, 2004 implementation date of the demonstration program. Payments to the participating hospitals will be the lesser amount of the reasonable cost or a target amount in subsequent cost reporting periods. The target amount in the second cost reporting period is defined as the reasonable costs of providing covered inpatient hospital services in the first cost reporting period, increased by the inpatient prospective payment update factor (as defined in section 1886(b)(3)(B) of the Act) for that particular cost reporting period. The target amount in subsequent cost reporting periods is defined as the preceding cost reporting period's target amount, increased by the inpatient prospective payment update factor (as defined in section 1886(b)(3)(B) of the Act) for that particular cost reporting period. Covered inpatient hospital services are inpatient hospital services (defined in section 1861(b) of the Act), and include extended care services furnished under an agreement under section 1883 of the Act. Section 410A of Pub. L. 108-173 requires that, “in conducting the demonstration program under this section, the Secretary shall ensure that the aggregate payments made by the Secretary do not exceed the amount which the Secretary would have paid if the demonstration program under this section was not implemented.” Generally, when CMS implements a demonstration program on a budget neutral basis, the demonstration program is budget neutral in its own terms; in other words, the aggregate payments to the participating providers do not exceed the amount that would be paid to those same providers in the absence of the demonstration program. This form of budget neutrality is viable when, by changing payments or aligning incentives to improve overall efficiency, or both, a demonstration program may reduce the use of some services or eliminate the need for others, resulting in reduced expenditures for the demonstration program's participants. These reduced expenditures offset increased payments elsewhere under the demonstration program, thus ensuring that the demonstration program as a whole is budget neutral or yields savings. However, the small scale of this demonstration program, in conjunction with the payment methodology, makes it extremely unlikely that this demonstration program could be viable under the usual form of budget neutrality. Specifically, cost-based payments to participating small rural hospitals are likely to increase Medicare outlays without producing any offsetting reduction in Medicare expenditures elsewhere. Therefore, a rural community hospital's 
                        ( print page 23676)
                        participation in this demonstration program is unlikely to yield benefits to the participant if budget neutrality were to be implemented by reducing other payments for these providers. In order to achieve budget neutrality for this demonstration program for FY 2009, we are proposing to adjust the national inpatient PPS rates by an amount sufficient to account for the added costs of this demonstration program. We are proposing to apply budget neutrality across the payment system as a whole rather than merely across the participants in this demonstration program. As we discussed in the FY 2005, FY 2006, FY 2007 and FY 2008 IPPS final rules (69 FR 49183; 70 FR 47462; 71 FR 48100; and 72 FR 47392), we believe that the language of the statutory budget neutrality requirements permits the agency to implement the budget neutrality provision in this manner. For FY 2009, using data from the cost reports from each of the nine hospitals' first year of participation in the demonstration program, that is, cost reports for years beginning in CY 2005, and estimating the cost of six additional hospitals based on these data, we estimate that the additional cost would be $32,011,849. (In the final rule, we should know the exact number of hospitals participating in the demonstration program and would revise our estimates accordingly.) This estimated adjusted amount reflects the estimated difference between the participating hospitals costs and the IPPS payment based on data from the hospitals' cost reports. We discuss the payment rate adjustment that is required to ensure the budget neutrality of the demonstration program for FY 2009 in section II.A.4. of the Addendum to this proposed rule. V. Proposed Changes to the IPPS for Capital-Related Costs A. Background Section 1886(g) of the Act requires the Secretary to pay for the capital-related costs of inpatient acute hospital services “in accordance with a prospective payment system established by the Secretary.” Under the statute, the Secretary has broad authority in establishing and implementing the IPPS for acute care hospital inpatient capital-related costs. We initially implemented the IPPS for capital-related costs in the Federal fiscal year (FY) 1992 IPPS final rule (56 FR 43358), in which we established a 10-year transition period to change the payment methodology for Medicare hospital inpatient capital-related costs from a reasonable cost-based methodology to a prospective methodology (based fully on the Federal rate). FY 2001 was the last year of the 10-year transition period established to phase in the IPPS for hospital inpatient capital-related costs. For cost reporting periods beginning in FY 2002, capital IPPS payments are based solely on the Federal rate for most acute care hospitals (other than hospitals receiving certain exception payments and certain new hospitals). The basic methodology for determining capital prospective payments using the Federal rate is set forth in § 412.312. For the purpose of calculating payments for each discharge, the standard Federal rate is adjusted as follows: (Standard Federal Rate) × (DRG Weight) × (Geographic Adjustment Factor (GAF)) × (Large Urban Add-on, if applicable) × (COLA for hospitals located in Alaska and Hawaii) × (1 + Capital DSH Adjustment Factor + Capital IME Adjustment Factor, if applicable). Hospitals also may receive outlier payments for those cases that qualify under the threshold established for each fiscal year as specified in § 412.312(c) of the regulations. 1. Exception Payments The regulations at § 412.348(f) provide that a hospital may request an additional payment if the hospital incurs unanticipated capital expenditures in excess of $5 million due to extraordinary circumstances beyond the hospital's control. This policy was originally established for hospitals during the 10-year transition period, but as we discussed in the FY 2003 IPPS final rule (67 FR 50102), we revised the regulations at § 412.312 to specify that payments for extraordinary circumstances are also made for cost reporting periods after the transition period (that is, cost reporting periods beginning on or after October 1, 2001). Additional information on the exception payment for extraordinary circumstances in § 412.348(f) can be found in the FY 2005 IPPS final rule (69 FR 49185 and 49186). During the transition period, under §§ 412.348(b) through (e), eligible hospitals could receive regular exception payments. These exception payments guaranteed a hospital a minimum payment percentage of its Medicare allowable capital-related costs depending on the class of the hospital (§ 412.348(c)), but were available only during the 10-year transition period. After the end of the transition period, eligible hospitals can no longer receive this exception payment. However, even after the transition period, eligible hospitals receive additional payments under the special exceptions provisions at § 412.348(g), which guarantees all eligible hospitals a minimum payment of 70 percent of its Medicare allowable capital-related costs provided that special exceptions payments do not exceed 10 percent of total capital IPPS payments. Special exceptions payments may be made only for the 10 years from the cost reporting year in which the hospital completes its qualifying project, and the hospital must have completed the project no later than the hospital's cost reporting period beginning before October 1, 2001. Thus, an eligible hospital may receive special exceptions payments for up to 10 years beyond the end of the capital IPPS transition period. Hospitals eligible for special exceptions payments are required to submit documentation to the intermediary indicating the completion date of their project. (For more detailed information regarding the special exceptions policy under § 412.348(g), we refer readers to the FY 2002 IPPS final rule (66 FR 39911 through 39914) and the FY 2003 IPPS final rule (67 FR 50102).) 2. New Hospitals Under the IPPS for capital-related costs, § 412.300(b) of the regulations defines a new hospital as a hospital that has operated (under current or previous ownership) for less than 2 years. (For more detailed information, we refer readers to the FY 1992 IPPS final rule (56 FR 43418).) During the 10-year transition period, a new hospital was exempt from the capital IPPS for its first 2 years of operation and was paid 85 percent of its reasonable costs during that period. Originally, this provision was effective only through the transition period and, therefore, ended with cost reporting periods beginning in FY 2002. Because, as discussed in the FY 2003 IPPS final rule (67 FR 50101), we believe that special protection to new hospitals is also appropriate even after the transition period, we revised the regulations at § 412.304(c)(2) to provide that, for cost reporting periods beginning on or after October 1, 2002, a new hospital (defined under § 412.300(b)) is paid 85 percent of its Medicare allowable capital-related costs through its first 2 years of operation, unless the new hospital elects to receive fully prospective payment based on 100 percent of the Federal rate. (We refer readers to the FY 2002 IPPS final rule (66 FR 39910) for a detailed discussion of the statutory basis for the system, the development and evolution of the system, the methodology used to 
                        ( print page 23677)
                        determine capital-related payments to hospitals both during and after the transition period, and the policy for providing exception payments.) 3. Hospitals Located in Puerto Rico Section 412.374 provides for the use of a blended payment amount for prospective payments for capital-related costs to hospitals located in Puerto Rico. Accordingly, under the capital IPPS, we compute a separate payment rate specific to Puerto Rico hospitals using the same methodology used to compute the national Federal rate for capital-related costs. In general, hospitals located in Puerto Rico are paid a blend of the applicable capital IPPS Puerto Rico rate and the applicable capital IPPS Federal rate. Prior to FY 1998, hospitals in Puerto Rico were paid a blended capital IPPS rate that consisted of 75 percent of the capital IPPS Puerto Rico specific rate and 25 percent of the capital IPPS Federal rate. However, effective October 1, 1997 (FY 1998), in conjunction with the change to the operating IPPS blend percentage for hospitals located in Puerto Rico required by section 4406 of Pub. L. 105-33, we revised the methodology for computing capital IPPS payments to hospitals in Puerto Rico to be based on a blend of 50 percent of the capital IPPS Puerto Rico rate and 50 percent of the capital IPPS Federal rate. Similarly, in conjunction with the change in operating IPPS payments to hospitals located in Puerto Rico for FY 2005 required by section 504 of Pub. L. 108-173, we again revised the methodology for computing capital IPPS payments to hospitals located in Puerto Rico to be based on a blend of 25 percent of the capital IPPS Puerto Rico rate and 75 percent of the capital IPPS Federal rate effective for discharges occurring on or after October 1, 2004. B. Revisions to the Capital IPPS Based on Data on Hospital Medicare Capital Margins As noted above, under the Secretary's broad authority under the statute in establishing and implementing the IPPS for hospital inpatient capital-related costs, we have established a standard Federal payment rate for capital-related costs, as well as the mechanism for updating that rate each year. For FY 1992, we computed the standard Federal payment rate for capital-related costs under the IPPS by updating the FY 1989 Medicare inpatient capital cost per case by an actuarial estimate of the increase in Medicare inpatient capital costs per case. Each year after FY 1992, we update the capital standard Federal rate, as provided at § 412.308(c)(1), to account for capital input price increases and other factors. The regulations at § 412.308(c)(2) provide that the capital Federal rate is adjusted annually by a factor equal to the estimated proportion of outlier payments under the capital Federal rate to total capital payments under the capital Federal rate. In addition, § 412.308(c)(3) requires that the capital Federal rate be reduced by an adjustment factor equal to the estimated proportion of payments for (regular and special) exceptions under § 412.348. Section 412.308(c)(4)(ii) requires that the capital standard Federal rate be adjusted so that the effects of the annual DRG reclassification and the recalibration of DRG weights, and changes in the geographic adjustment factor are budget neutral. In the FY 2008 IPPS final rule with comment period (72 FR 47398 through 47401), based on our analysis of data on inpatient hospital Medicare capital margins that we obtained through our monitoring and comprehensive review of the adequacy of the standard Federal payment rate for capital-related costs and the updates provided under the existing regulations, we made changes in the payment structure under the capital IPPS beginning with FY 2008. We summarize these changes below. We refer readers to section V.B. of the preamble of the FY 2008 final rule with comment period (72 FR 47393 through 47401) for a detailed discussion of the data used as a basis for these changes. These data showed that hospital inpatient Medicare capital margins were very high across all hospitals during the period from FY 1996 through FY 2004. In the FY 2008 IPPS final rule with comment period, as background, we noted that, in general, under a PPS, standard payment rates should reflect the costs that an average, efficient provider would bear to provide the services required for quality patient care. Payment rate updates should also account for the changes necessary to continue providing such services. Updates should reflect, for example, the increased costs that are necessary to provide for the introduction of new technology that improves patient care. Updates should also take into account the productivity gains that, over time, allow providers to realize the same, or even improved, quality outcomes with reduced inputs and lower costs. Hospital margins, the difference between the costs of actually providing services and the payments received under a particular system, thus provide some evidence concerning whether payment rates have been established and updated at an appropriate level over time for efficient providers to provide necessary services. All other factors being equal, sustained substantial positive margins demonstrate that payment rates and updates have exceeded what is required to provide those services. It is to be expected, under a PPS, that highly efficient providers might regularly realize positive margins, while less efficient providers might regularly realize negative margins. However, a PPS that is correctly calibrated should not necessarily experience sustained periods in which providers generally realize substantial positive Medicare margins. Under the capital IPPS in particular, it seems especially appropriate that there should not be sustained significant positive margins across the system as a whole. Prior to the implementation of the capital IPPS, Congress mandated that the Medicare program pay only 85 percent of hospitals' inpatient Medicare capital costs. During the first 5 years of the capital IPPS, Congress also mandated a budget neutrality adjustment, under which the standard Federal capital rate was set each year so that payments under the system as a whole equaled 90 percent of estimated hospitals' inpatient Medicare capital costs for the year. Finally, Congress has twice adjusted the standard Federal capital rate (a 7.4 percent reduction beginning in FY 1994, followed by a 17.78 percent reduction beginning in FY 1998). On the second occasion in particular, the specific congressional mandate was “to apply the budget neutrality factor used to determine the Federal capital payment rate in effect on September 30, 1995 * * * to the unadjusted standard Federal capital payment rate” for FY 1998 and beyond. (The designated budget neutrality factor constituted a 17.78 percent reduction.) This statutory language indicates that Congress considered the payment levels in effect during FYs1992 through 1995, established under the budget neutrality provision to pay 90 percent of hospitals' inpatient Medicare capital costs in the aggregate, appropriate for the capital IPPS. The statutory history of the capital IPPS thus suggests that the system in the aggregate should not provide for continuous, large positive margins. As we also discussed in the FY 2008 IPPS final rule with comment period, we believed that there could be a number of reasons for the relatively high margins that most IPPS hospitals have realized under the capital IPPS. One possibility is that the updates to the capital IPPS rates have been higher than the actual increases in Medicare inpatient capital costs that hospitals 
                        ( print page 23678)
                        have experienced in recent years. Another possible reason for the relatively high margins of most capital IPPS hospitals may be that the payment adjustments provided under the system are too high, or perhaps even unnecessary. Specifically, the adjustments for teaching hospitals, disproportionate share hospitals, and large urban hospitals appear to be contributing to excessive payment levels for these classes of hospitals. Since the inception of the capital IPPS in FY 1992, the system has provided adjustments for teaching hospitals (the IME adjustment factor, under § 412.322 of the regulations), disproportionate share hospitals (the DSH adjustment factor, under § 412.320), and large urban hospitals (the large urban location adjustment factor, under § 412.316(b)). The classes of hospitals eligible for these adjustments have been realizing much higher margins than other hospitals under the system. Specifically, teaching hospitals (11.6 percent for FYs 1998 through 2004), disproportionate share hospitals (8.4 percent), and urban hospitals (8.3 percent) have had significant positive margins. Other classes of hospitals have experienced much lower margins, especially rural hospitals (0.3 percent for FYs 1998 through 2004) and nonteaching hospitals (1.3 percent). The three groups of hospitals that have been realizing especially high margins under the capital IPPS are, therefore, classes of hospitals that are eligible to receive one or more specific payment adjustment under the system. We believed that the evidence indicates that these adjustments have been contributing to the significantly large positive margins experienced by the classes of hospitals eligible for these adjustments. Therefore, in the FY 2008 IPPS final rule with comment period, we made two changes to the structure of payments under the capital IPPS, as discussed under items 1. and 2. below. 1. Elimination of the Large Add-On Payment Adjustment In the FY 2008 IPPS final rule with comment period, we determined that the data we had gathered on inpatient hospital Medicare capital margins provided sufficient evidence to warrant elimination of the large urban add-on payment adjustment starting in FY 2008 under the capital IPPS. Therefore, for FYs 2008 and beyond, we discontinued the 3.0 percent additional payment that had been provided to hospitals located in large urban areas (72 FR 24822). This decision was supported by comments from MedPAC. 2. Changes to the Capital IME Adjustment a. Background and Changes Made for FY 2008 In the FY 2008 IPPS proposed rule, we noted that margin analysis indicated that several classes of hospitals had experienced continuous, significant positive margins. The analysis indicated that the existing payment adjustments for teaching hospitals and disproportionate share hospitals were contributing to excessive payment levels for these classes of hospitals. Therefore, we stated that it may be appropriate to reduce these adjustments significantly, or even to eliminate them altogether, within the capital IPPS. These payment adjustments, unlike parallel adjustments under the operating IPPS, were not mandated by the Act. Rather, they were included within the original design of the capital IPPS under the Secretary's broad authority in section 1886(g)(1) of the Act to include appropriate adjustments and exceptions within a capital IPPS. In the FY 2008 final rule with comment period, we also noted a MedPAC recommendation that we seriously reexamine the appropriateness of the existing capital IME adjustment, that the margin analysis indicated such adjustment may be too high, and that MedPAC's previous analysis also suggested the adjustment may be too high. In light of MedPAC's recommendation, we extended the margin analysis discussed in the FY 2008 IPPS proposed rule in order to distinguish the experience of teaching hospitals from the experience of urban and rural hospitals generally. Specifically, we isolated the margins of urban, large urban, and rural teaching hospitals, as opposed to urban, large urban, and rural nonteaching hospitals. In conducting this analysis, we employed updated cost report information, which allowed us to incorporate the margins for an additional year, FY 2005, into the analysis. The data on the experience of urban, large urban, and rural teaching hospitals as opposed to nonteaching hospitals provided significant new information. As the analysis demonstrated, teaching hospitals in each class (urban, large urban, and rural) performed significantly better than comparable nonteaching hospitals. For the period covering FYs 1998 through 2005, urban teaching hospitals realized aggregate positive margins of 11.9 percent, compared to a positive margin of 0.9 percent for urban nonteaching hospitals. Similarly, large urban teaching hospitals realized an aggregate positive margin of 12.8 percent during that period, while large urban nonteaching hospitals had an aggregate positive margin of only 2.9 percent. Finally, rural teaching hospitals experienced an aggregate positive margin of 4.5 percent, as compared to a negative 1.3 percent margin for nonteaching rural hospitals. We noted that the positive margins for teaching hospitals did not exhibit a decline to the same degree as the margins for all hospitals. For example, the positive margins for all IPPS hospitals declined from 8.7 percent in FY 2002 to 5.3 percent in FY 2004 and 3.7 percent in FY 2005. For urban hospitals, aggregate margins decreased from 10.3 percent in FY 2002 to 6.4 percent in FY 2004 and 4.8 percent in FY 2005. Rural hospitals experienced a decrease from 1.5 percent in FY 2001 to a negative margin of -4.2 percent in FY 2005. In comparison, the aggregate margin for teaching hospitals was 12.1 percent in FY 2001 and 10.6 percent in FY 2005. For urban teaching hospitals, margins were 12.5 percent in FY 2001, 14.0 percent in FY 2002, 13.6 percent in FY 2003, 11.9 percent in FY 2004, and 10.9 percent in FY 2005. Rural teaching hospital margins were more variable, but did not exhibit a pattern of significant decline. In FY 2001, rural teaching hospitals had a positive margin of 3.2 percent; in FY 2002, 8.2 percent; in FY 2003, 4.7 percent; in FY 2004, 5.7 percent; and in FY 2005, 4.0 percent. We are reprinting below the table found in the FY 2008 IPPS final rule with comment period showing our analysis (72 FR 47400). Hospital Inpatient Medicare Capital Margins
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
Aggregate
                                 1996-2005
Aggregate
                                 1998-2005U.S.
17.6
13.4
7.0
6.8
7.3
8.1
8.7
7.6
5.3
3.7
8.5
6.8URBAN
17.7
13.8
7.8
7.5
8.4
9.2
10.3
9.0
6.4
4.8
9.4
7.9RURAL
16.8
11.0
2.1
2.4
1.0
1.5
−1.7
−1.4
−2.3
−4.2
2.6
−0.4No DSH Payments
16.2
11.7
4.2
4.3
5.6
5.5
4.7
4.4
−1.3
−4.7
5.9
3.2Has DSH Payments
18.5
14.4
8.6
8.1
8.2
9.0
10.0
8.5
7.0
5.9
9.5
8.1( print page 23679)$1-$249,999
14.5
12.9
−0.4
3.1
1.6
4.1
3.2
1.4
−1.7
−4.8
3.2
1.9$250,000-$999,999
15.5
9.0
2.3
1.6
2.8
2.7
−2.4
−1.5
−4.3
−7.3
1.5
−0.9$1,000,000-$2,999,999
16.8
13.0
8.7
9.0
8.7
7.0
10.1
5.2
3.2
2.0
8.2
6.6$3,000,000 or more
20.3
16.6
10.4
9.3
9.7
12.1
13.2
12.5
10.6
9.5
12.2
11.0TEACHING
19.5
15.7
9.8
9.7
11.2
12.1
13.8
13.2
11.7
10.6
12.7
11.6Urban
19.7
15.9
10.2
10.0
11.4
12.5
14.0
13.6
11.9
10.9
13.0
11.9Large Urban
20.5
16.8
11.0
10.1
12.5
13.9
15.2
14.7
12.0
11.9
13.9
12.8Rural
13.9
8.5
1.0
2.9
5.8
3.2
8.2
4.7
5.7
4.0
5.7
4.5NONTEACHING
15.3
10.5
3.4
2.8
2.2
2.6
1.7
0.0
−3.2
−5.1
2.8
0.3Urban
14.4
10.1
3.8
3.0
3.0
3.1
3.6
0.9
−2.9
−4.9
3.1
0.9Large Urban
15.5
11.3
6.2
6.1
5.7
5.2
5.3
1.7
−0.9
−3.2
5.1
2.9Rural
17.3
11.4
2.3
2.4
0.2
1.2
−3.7
−2.6
−3.9
−6.0
2.0
−1.3Census Division:New England (1)
27.9
25.9
17.1
15.1
18.2
20.7
21.3
21.1
20.5
20.3
21.0
19.5Middle Atlantic (2)
19.1
15.5
11.1
11.6
14.1
16.5
18.7
18.0
14.7
16.0
15.6
15.2South Atlantic (3)
18.1
13.9
5.9
4.0
6.0
5.0
6.6
6.9
5.8
2.8
7.4
5.4East North Central (4)
18.2
12.7
6.4
7.1
8.8
8.5
6.1
7.1
6.6
3.2
8.4
6.7East South Central (5)
14.9
11.1
3.3
4.1
3.8
3.8
3.8
−0.9
−3.4
−5.8
3.2
0.9West North Central (6)
14.3
7.0
0.1
−-0.3
−1.5
2.0
1.9
3.4
1.6
−0.4
2.8
0.9West South Central (7)
13.2
8.3
3.3
2.6
−0.7
0.0
1.2
−2.0
−4.0
−6.5
1.2
−1.0Mountain (8)
17.2
14.7
8.5
7.7
7.2
6.4
2.9
3.3
0.8
−4.7
5.8
3.6Pacific (9)
20.4
16.1
12.3
11.3
11.9
13.3
14.7
12.1
9.8
8.8
13.0
11.7Code 99
23.7
24.1
14.5
16.8
19.8
20.7
20.5
25.1
21.6
24.8
21.4
20.8Bed Size:< 100 beds
17.7
13.0
4.6
3.5
2.7
2.5
−1.8
−1.2
−6.1
−9.6
2.0
−0.9100-249 beds
15.1
10.5
3.7
4.5
4.3
6.1
6.0
4.2
1.5
0.8
5.6
3.8250-499 beds
18.9
14.1
8.9
8.3
10.6
10.7
12.1
11.6
10.3
7.7
11.4
10.1500-999 beds
19.9
17.1
10.7
10.4
11.3
10.8
12.6
10.1
7.3
7.8
11.6
10.1>= 1000 beds
8.2
14.0
2.2
−1.3
−6.6
−3.6
6.5
8.1
6.5
2.1
3.5
2.3Notes:Based on Medicare Cost Report hospital data updated as of the 1st quarter of 2007.Medicare payments are from Worksheet E, Part A, Lines 9 and 10.Expenses are from Worksheet D, Part I, columns 10 and 12 and Part II, columns 6 and 8.We apply the outlier trimming methodology developed with MedPAC.Code 99 applies when census division information was not specified in the Medicare Cost Report hospital data.
 As we indicated in the FY 2008 IPPS final rule with comment period (72 FR 47401), the statutory history of the capital IPPS suggests that the system in the aggregate should not provide for continuous, large positive margins. As we also indicated, a possible reason for the relatively high margins of many capital IPPS hospitals may be that the payment adjustments provided under the system are too high, or perhaps even unnecessary. We agreed with MedPAC's recommendation and reexamined the appropriateness of the teaching adjustment. We concluded that the record of relatively high and persistent positive margins for teaching hospitals under the capital IPPS indicated that the teaching adjustment is unnecessary, and that it was therefore appropriate to exercise our discretion under the capital IPPS to eliminate this adjustment. At the same time, we believed that we should mitigate abrupt changes in payment policy and that we should provide time for hospitals to adjust to changes in the payments that they can expect under the program. Therefore, in the FY 2008 IPPS final rule with comment period, we adopted a policy to phase out the capital teaching adjustment over a 3-year period beginning in FY 2008. Specifically, we maintained the adjustment for FY 2008, in order to give teaching hospitals an opportunity to plan and make adjustments to the change. During the second year of the transition, FY 2009, the formula for determining the amount of the teaching adjustment was revised so that adjustment amounts will be half of the amounts provided under the current formula. For FY 2010 and after, hospitals will no longer receive an adjustment for teaching activity under the capital IPPS. b. Public Comments Received on Phase Out of Capital IPPS Teaching Adjustment Provisions Included in the FY 2008 Final Rule With Comment Period and Further Solicitation of Public Comments As indicated above, in the FY 2008 IPPS final rule with comment period, we formally adopted as final policy a phase out of the capital IPPS teaching adjustment over a 3-year period, maintaining the current adjustment for FY 2008, making a 50-percent reduction in FY 2009, and eliminating the adjustment for FY 2010 and subsequent years. However, because we concluded that this change to the structure of payments under the capital IPPS was significant, we provided the public with an opportunity for further comment on these provisions through a 90-day comment period after publication of the FY 2008 IPPS final rule with comment period (72 FR 47401). In addition, as we indicated in that final rule with comment period, to provide a more than adequate opportunity for hospitals, associations, and other interested parties to raise issues and concerns related to our policy, we are providing additional opportunity for public comment during this FY 2009 proposed rulemaking cycle for the IPPS. We received numerous timely pieces of correspondence that commented on the policy of phasing out the capital IPPS teaching adjustment as described in the FY 2008 IPPS final rule with comment period. These comments are available on our e-rulemaking Web site, at 
                        *http://www.cms.hhs.gov/​eRulemaking/​ECCMSR/​list.asp*. We will also accept public comments on this policy during the comment period for this proposed rule. We will respond to 
                        ( print page 23680)
                        both sets of public comments when we issue the FY 2009 IPPS final rule, which is scheduled for publication in August 2008. VI. Proposed Changes for Hospitals and Hospital Units Excluded From the IPPS A. Proposed Payments to Excluded Hospitals and Hospital Units Historically, hospitals and hospital units excluded from the prospective payment system received payment for inpatient hospital services they furnished on the basis of reasonable costs, subject to a rate-of-increase ceiling. An annual per discharge limit (the target amount as defined in § 413.40(a)) was set for each hospital or hospital unit based on the hospital's own cost experience in its base year. The target amount was multiplied by the Medicare discharges and applied as an aggregate upper limit (the ceiling as defined in § 413.40(a)) on total inpatient operating costs for a hospital's cost reporting period. Prior to October 1, 1997, these payment provisions applied consistently to all categories of excluded providers, which include rehabilitation hospitals and units (now referred to as IRFs), psychiatric hospitals and units (now referred to as IPFs), LTCHs, children's hospitals, and cancer hospitals. Payment for children's hospitals and cancer hospitals that are excluded from the IPPS continues to be subject to the rate-of-increase ceiling based on the hospital's own historical cost experience. (We note that, in accordance with § 403.752(a) of the regulations, RNHCIs are also subject to the rate-of-increase limits established under § 413.40 of the regulations.) In this FY 2009 IPPS proposed rule, we are proposing that the percentage increase in the rate-of-increase limits for cancer and children's hospitals and RNHCIs would be the proposed percentage increase in the FY 2009 IPPS operating market basket, which is estimated to be 3.0 percent. Consistent with our historical approach, we calculated the proposed IPPS operating market basket for FY 2009 using the most recent data available. However, if more recent data are available for the final rule, we will use them to calculate the IPPS operating market basket. For cancer and children's hospitals and RNHCIs, the proposed FY 2009 rate-of-increase percentage that is applied to FY 2008 target amounts in order to calculate FY 2009 target amounts is 3.0 percent, based on Global Insight, Inc.'s 2008 first quarter forecast of the IPPS operating market basket increase, in accordance with the applicable regulations in 42 CFR 413.40. IRFs, IPFs, and LTCHs were paid previously under the reasonable cost methodology. However, the statute was amended to provide for the implementation of prospective payment systems for IRFs, IPFs, and LTCHs. In general, the prospective payment systems for IRFs, IPFs, and LTCHs provided transition periods of varying lengths during which time a portion of the prospective payment was based on cost-based reimbursement rules under Part 413 (certain providers do not receive a transition period or may elect to bypass the transition period as applicable under 42 CFR Part 412, Subparts N, O, and P). We note that the various transition periods provided for under the IRF PPS, the IPF PPS, and the LTCH PPS have ended. For cost reporting periods beginning on or after October 1, 2002, all IRFs are paid 100 percent of the adjusted Federal rate under the IRF PPS. Therefore, for cost reporting periods beginning on or after October 1, 2002, no portion of an IRF PPS payment is subject to 42 CFR Part 413. Similarly, for cost reporting periods beginning on or after October 1, 2006, all LTCHs are paid 100 percent of the adjusted Federal prospective payment rate under the LTCH PPS. Therefore, for cost reporting periods beginning on or after October 1, 2006, no portion of the LTCH PPS payment is subject to 42 CFR Part 413. (We note that, to the extent a portion of a LTCH's PPS payment was subject to reasonable cost principles, the Secretary utilized his broad authority under section 123 of the BBRA, as amended by section 307 of the BIPA, to make such portion subject to 42 CFR Part 413 and various provisions in section 1886(b) of the Act.) Likewise, for cost reporting periods beginning on or after January 1, 2008, all IPFs are paid 100 percent of the Federal per diem amount under the IPF PPS. Therefore, for cost reporting periods beginning on or after January 1, 2008, no portion of an IPF PPS payment is subject to 42 CFR Part 413. B. IRF PPS Section 1886(j) of the Act, as added by section 4421(a) of Pub. L. 105-33, provided for a phase-in of a case-mix adjusted PPS for inpatient hospital services furnished by IRFs for cost reporting periods beginning on or after October 1, 2000, and before October 1, 2002, with payments based entirely on the adjusted Federal prospective payment for cost reporting periods beginning on or after October 1, 2002. Section 1886(j) of the Act was amended by section 125 of Pub. L. 106-113 to require the Secretary to use a discharge as the payment unit for services furnished under the PPS for inpatient rehabilitation hospitals and inpatient rehabilitation units of hospitals (referred to as IRFs), and to establish classes of patient discharges by functional-related groups. Section 305 of Pub. L. 106-554 further amended section 1886(j) of the Act to allow IRFs, subject to the blended methodology, to elect to be paid the full Federal prospective payment rather than the transitional period payments specified in the Act. On August 7, 2001, we issued a final rule in the 
                        **Federal Register**
                         (66 FR 41316) establishing the PPS for IRFs, effective for cost reporting periods beginning on or after January 1, 2002. There was a transition period for cost reporting periods beginning on or after January 1, 2002, and ending before October 1, 2002. For cost reporting periods beginning on or after October 1, 2002, payments are based entirely on the adjusted Federal prospective payment rate determined under the IRF PPS. C. LTCH PPS On August 30, 2002, we issued a final rule in the 
                        **Federal Register**
                         (67 FR 55954) establishing the PPS for LTCHs, effective for cost reporting periods beginning on or after October 1, 2002. Except for a LTCH that made an election under § 412.533(c) or a LTCH that is defined as new under § 412.23(e)(4), there was a transition period under § 412.533(a) for LTCHs. For cost reporting periods beginning on or after October 1, 2006, all LTCHs are paid 100 percent of the adjusted Federal prospective payment rate. D. IPF PPS In accordance with section 124 of Pub. L. 106-113 and section 405(g)(2) of Pub. L. 108-173, we established a PPS for inpatient hospital services furnished in IPFs. On November 15, 2004, we issued in the 
                        **Federal Register**
                         a final rule (69 FR 66922) that established the IPF PPS, effective for IPF cost reporting periods beginning on or after January 1, 2005. Under the requirements of that final rule, we computed a Federal per diem base rate to be paid to all IPFs for inpatient psychiatric services based on the sum of the average routine operating, ancillary, and capital costs for each patient day of psychiatric care in an IPF, adjusted for budget neutrality. The Federal per diem base rate is adjusted to reflect certain patient characteristics, including age, specified DRGs, selected high-cost comorbidities, days of the stay, and certain facility characteristics, including a wage index 
                        ( print page 23681)
                        adjustment, rural location, indirect teaching costs, the presence of a full-service emergency department, and COLAs for IPFs located in Alaska and Hawaii. We established a 3-year transition period during which IPFs whose cost reporting periods began on or after January 1, 2005, and before January 1, 2008, would be paid a PPS payment, a portion of which was based on reasonable cost principles and a portion of which was the Federal per diem payment amount. For cost reporting periods beginning on or after January 1, 2008, all IPFs are paid 100 percent of the Federal per diem payment amount. E. Determining Proposed LTCH Cost-to-Charge Ratios (CCRs) Under the LTCH PPS In general, we use a LTCH's overall CCR, which is computed based on either the most recently settled cost report or the most recent tentatively settled cost report, whichever is from the latest cost reporting period, in accordance with § 412.525(a)(4)(iv)(B) and § 412.529(c)(4)(iv)(B) for high cost outliers and short-stay outliers, respectively. (We note that, in some instances, we use an alternative CCR, such as the statewide average CCR in accordance with the regulations at § 412.525(a)(4)(iv)(C) and § 412.529(c)(4)(iv)(C), or a CCR that is specified by CMS or that is requested by the hospital under the provisions of the regulations at § 412.525(a)(4)(iv)(A) and § 412.529(c)(4)(iv)(A).) Under the LTCH PPS, a single prospective payment per discharge is made for both inpatient operating and capital-related costs. Therefore, we compute a single “overall” or “total” LTCH-specific CCR based on the sum of LTCH operating and capital costs (as described in Chapter 3, section 150.24, of the Medicare Claims Processing Manual (CMS Pub. 100-4)) as compared to total charges. Specifically, a LTCH's CCR is calculated by dividing a LTCH's total Medicare costs (that is, the sum of its operating and capital inpatient routine and ancillary costs) by its total Medicare charges (that is, the sum of its operating and capital inpatient routine and ancillary charges). Generally, a LTCH is assigned the applicable statewide average CCR if, among other things, a LTCH's CCR is found to be in excess of the applicable maximum CCR threshold (that is, the LTCH CCR ceiling). This is because CCRs above this threshold are most likely due to faulty data reporting or entry, and, therefore, these CCRs should not be used to identify and make payments for outlier cases. Such data are clearly errors and should not be relied upon. Thus, under our established policy, generally, if a LTCH's calculated CCR is above the applicable ceiling, the applicable LTCH PPS statewide average CCR is assigned to the LTCH instead of the CCR computed from its most recent (settled or tentatively settled) cost report data. In the FY 2008 IPPS final rule with comment period, in accordance with § 412.525(a)(4)(iv)(C)(
                        *2*) for high-cost outliers and § 412.529(c)(4)(iv)(C)(
                        *2*) for short-stay outliers, using our established methodology for determining the LTCH total CCR ceiling, based on IPPS total CCR data from the March 2007 update to the Provider-Specific File (PSF), we established a total CCR ceiling of 1.284 under the LTCH PPS effective October 1, 2007, through September 30, 2008. (For further detail on our methodology for annually determining the LTCH total CCR ceiling, we refer readers to the FY 2007 IPPS final rule (71 FR 48117 through 48121) and the FY 2008 IPPS final rule with comment period (72 FR 47403 through 47404).) Our general methodology established for determining the statewide average CCRs used under the LTCH PPS is similar to our established methodology for determining the LTCH total CCR ceiling (described above) because it is based on “total” IPPS CCR data. Under the LTCH PPS high-cost outlier policy at § 412.525(a)(4)(iv)(C) and the short-stay outlier policy at § 412.529(c)(4)(iv)(C), the fiscal intermediary (or MAC) may use a statewide average CCR, which is established annually by CMS, if it is unable to determine an accurate CCR for a LTCH in one of the following circumstances: (1) A new LTCH that has not yet submitted its first Medicare cost report (for this purpose, a new LTCH is defined as an entity that has not accepted assignment of an existing hospital's provider agreement in accordance with § 489.18); (2) a LTCH whose CCR is in excess of the LTCH CCR ceiling (as discussed above); and (3) any other LTCH for whom data with which to calculate a CCR are not available (for example, missing or faulty data). (Other sources of data that the fiscal intermediary (or MAC) may consider in determining a LTCH's CCR include data from a different cost reporting period for the LTCH, data from the cost reporting period preceding the period in which the hospital began to be paid as a LTCH (that is, the period of at least 6 months that it was paid as a short-term acute care hospital), or data from other comparable LTCHs, such as LTCHs in the same chain or in the same region.) In this proposed rule, in accordance with § 412.525(a)(4)(iv)(C)(
                        *2*) for high-cost outliers and § 412.529(c)(4)(iv)(C)(
                        *2*) for short-stay outliers, using our established methodology for determining the LTCH total CCR ceiling (described above), based on IPPS total CCR data from the December 2007 update to the PSF), we are proposing a total CCR ceiling of 1.262 under the LTCH PPS, effective for discharges occurring on or after October 1, 2008, and before October 1, 2009. If more recent data become available before publication of the final rule, we will use such data to determine the final total CCR ceiling under the LTCH PPS for FY 2009. In this FY 2009 IPPS proposed rule, in accordance with § 412.525(a)(4)(iv)(C) for high-cost outliers and § 412.529(c)(4)(iv)(C) for short-stay outliers, using our established methodology for determining the LTCH statewide average CCRs (described above), based on the most recent complete IPPS total CCR data from the December 2007 update of the PSF, we are proposing LTCH PPS statewide average total CCRs for urban and rural hospitals that would be effective for discharges occurring on or after October 1, 2008, and before October 1, 2009, presented in Table 8C of the Addendum to this proposed rule. If more recent data become available before publication of the final rule, we will use such data to determine the final statewide average total CCRs for urban and rural hospitals under the LTCH PPS for FY 2009 using our established methodology described above. We note that, for this proposed rule, as we established when we revised our methodology for determining the applicable LTCH statewide average CCRs in the FY 2007 IPPS final rule (71 FR 48119 through 48121), and as is the case under the IPPS, all areas in the District of Columbia, New Jersey, Puerto Rico, and Rhode Island are classified as urban, and, therefore, there are no proposed rural statewide average total CCRs listed for those jurisdictions in Table 8C of the Addendum to this proposed rule. In addition, as we established when we revised our methodology for determining the applicable LTCH statewide average CCRs in that same final rule, and as is the case under the IPPS, although Massachusetts has areas that are designated as rural, there were no short-term acute care IPPS hospitals or LTCHs located in those areas as of December 2007. Therefore, for this proposed rule, there is no proposed rural statewide average total CCR listed for rural Massachusetts in Table 8C of the 
                        ( print page 23682)
                        Addendum of this proposed rule. As we also established when we revised our methodology for determining the applicable LTCH statewide average CCRs in the FY 2007 IPPS final rule (71 FR 48120 through 48121), in determining the urban and rural statewide average total CCRs for Maryland LTCHs paid under the LTCH PPS, we use, as a proxy, the national average total CCR for urban IPPS hospitals and the national average total CCR for rural IPPS hospitals, respectively. We use this proxy because we believe that the CCR data on the PSF for Maryland hospitals may not be accurate (as discussed in greater detail in that same final rule (71 FR 48120)). F. Proposed Change to the Regulations Governing Hospitals-Within-Hospitals On September 1, 1994, we published hospital-within-hospital (HwH) regulations for LTCHs to address inappropriate Medicare payments to entities that were effectively units of other hospitals (59 FR 45330). There was concern that the HwH model was being used by some acute care hospitals paid under the IPPS as a way of inappropriately receiving higher payments for a subset of their cases. Moreover, IPPS-exclusion of long-term care “units” was and remains inconsistent with the statutory scheme. Therefore, we established the HwH regulations at 42 CFR 412.23 (currently at § 412.22) for a LTCH HwH that is co-located with another hospital. A co-located hospital is a hospital that occupies space in the same building or on the same campus as another hospital. The regulations at § 412.23(e) required that, to be excluded from the IPPS, long-term care HwHs must have a separate governing body, chief medical officer, medical staff, and chief executive officer from that of the co-located hospital. In addition, the HwH must meet either of the following two criteria: The HwH must perform certain specified basic hospital functions on its own and not receive them from the host hospital or a third entity that controls both hospitals; or the HwH must receive at least 75 percent of its inpatients from sources other than the co-located hospital. A third option was added to the regulations on September 1, 1995 (60 FR 45778) that allowed HwHs to demonstrate their separateness by showing that the cost of the services that the hospital obtains under contracts or other agreements with the co-located hospital or a third entity that controls both hospitals is no more than 15 percent. In 1997, we extended application of the HwH rules at § 412.22 to all classes of IPPS excluded hospitals. Therefore, effective for cost reporting periods beginning on or after October 1, 1997, psychiatric, rehabilitation, cancer, and children's hospitals that are co-located with another hospital are also required to meet the “separateness” criteria at § 412.22(e). In addition, a “grandfathering” provision was added to the regulations at § 412.22(f), as provided for under section 4417 of the Balanced Budget Act (BBA) of 1997 (Pub. L. 105-33). This provision of the regulations allowed a LTCH that was excluded from the IPPS on or before September 30, 1995, and at that time occupied space in a building also used by another hospital, or in one or more buildings located on the same campus as buildings used by another hospital, to retain its IPPS-excluded status even if the HwH criteria at § 412.22(e) could not be met, as long as the hospital continued to operate under the same terms and conditions as were in effect on September 30, 1995. Consistent with the grandfathering provision under the BBA, which only applied to LTCHs, we extended the application of the grandfathering rule to the other classes of IPPS-excluded hospitals that are HwHs but did not meet the criteria at § 412.22(e). (We subsequently expanded this provision to allow for a grandfathered hospital to make specified changes during particular timeframes.) Despite our efforts to allow those HwHs for whom the IPPS-exclusion status is appropriate to meet the HwH criteria, it appears that there may be a gap in our regulations. There remain certain HwHs under current rules that may be unnecessarily restricted from expanding their bed size. These HwHs are State hospitals that are co-located with another State hospital and that are grandfathered under § 412.22(f). Where a State law defines the structure and authority of the State's agencies and institutions, and the State hospital is co-located with another hospital that is under State governance, each hospital may have control over the day-to-day operations of its respective facility and have separate management, patient intake, and billing systems and medical staff, as well as a governing board. However, State law may require that the legal accountability for the budgets and activities of entities operating within a State-run institution rests with the State. Therefore, the co-located State hospitals may also be governed by a common governing body. Because of State law requirements, these HwHs are, therefore, precluded from meeting the HwH criteria at § 412.22(e)(1)(i) that requires the governing body of a co-located hospital to be separate from the governing body of the hospital with which it shares space. The excluded hospital's governing body cannot be under the control of the hospital occupying space in the same building or on the same campus, or of any third entity that controls both hospitals. Currently, there are State HwHs in these types of arrangements that have been able to retain their IPPS-excluded status solely because of the grandfathering provision in § 412.22(f). These HwHs were IPPS-excluded even before the HwH criteria were implemented and only remain excluded HwHs under § 412.22(f) as long as they continue to meet the requirements specified under § 412.22(f)(1), (f)(2), and (f)(3). Because they are grandfathered, these HwHs cannot increase their bed size without losing their IPPS-excluded status under the grandfathering provisions (§ 412.22(f)). Furthermore, if a grandfathered State-run HwH increased its bed size, it would be unable to qualify as an IPPS-excluded HwH under § 412.22(e) because it cannot meet the HwH criteria at § 412.22(e)(1)(i) as a result of State law requirements regarding its organizational structure and governance. These HwHs are precluded from the flexibility to expand their bed size, which is available to other HwHs whose organizational structure is not bound by State law. As discussed in the previous paragraph, the organizational arrangements were in place for these State-operated HwHs before the HwH regulations were adopted. To the extent the arrangements are required by State law, we believe they do not reflect attempts by entities to establish a nominal hospital and, in turn, seek inappropriate exclusions. We also believe it may be unnecessary to prevent hospitals that were created before the HwH requirements, and that because of State statutory requirements cannot meet the subsequently issued separate governing body requirements, from being excluded from the IPPS. Accordingly, we are proposing to add a provision to the regulations that would apply only to State hospitals that were in existence when the HwH regulations were established. This proposed provision would not apply to other State hospitals that chose to open as a HwH subsequent to the establishment of the HwH regulations in FY 1994, under an organizational structure the same as or similar to the one described in this section. These hospitals knew, in advance of becoming a HwH, the requirements that had to be met in order to be an IPPS-excluded HwH, unlike 
                        ( print page 23683)
                        those hospitals that existed before the HwH regulations were established. Accordingly, we are proposing to add a new paragraph (e)(1)(vi) to § 412.22 to provide that if a hospital cannot meet the criteria in § 412.22(e)(1)(i) solely because it is a State hospital occupying space with another State hospital, the HwH can nevertheless qualify for an exclusion from the IPPS if that hospital meets the other applicable criteria in § 412.22(e) and— Both State hospitals share the same building or same campus and have been continuously owned and operated by the State since October 1, 1995;
                    Is required by State law to be subject to the governing authority of the State hospital with which it shares space or the governing authority of a third entity that controls both hospitals; and
                    Was excluded from the inpatient prospective payment system before October 1, 1995, and continues to be excluded from the IPPS through September 30, 2008. We believe the proposed criteria capture the segment of grandfathered, State-operated HwHs that are unable to increase their bed size because of State law regarding governance. We emphasize that we intend to allow an exception to the criteria in § 412.22 (e)(1)(i) only if the hospital that meets the proposed criteria above cannot meet the separate governing body requirement because of State law. We do not intend to provide similar treatment for hospitals that are not subject to State statutory requirements regarding governance but have chosen not to organize in a manner that would allow them to be an IPPS-excluded hospital that meets the HwH criteria at § 412.22(e)(1)(i). VII. Disclosure Required of Certain Hospitals and Critical Access Hospitals Regarding Physician Ownership (§ 489.2(u) and (v)) Section 1866 of the Act states that any provider of services (except a fund designated for purposes of sections 1814(g) and 1835(e) of the Act) shall be qualified to participate in the Medicare program and shall be eligible for Medicare payments if it files with the Secretary a Medicare provider agreement and abides by the requirements applicable to Medicare provider agreements. These requirements are incorporated into our regulations in 42 CFR Part 489, Subparts A and B. Section 1861(e) of the Act defines the term “hospital.” Section 1861(e)(9) of the Act authorizes the Secretary to establish requirements for hospitals as he finds necessary in the interest of patient health and safety. Section 1820(e)(3) of the Act authorizes the Secretary to establish criteria necessary for an institution to be certified as a “critical access hospital.” In the FY 2008 IPPS final rule with comment period, we revised our regulations governing Medicare provider agreements, specifically § 489.20(u), to require a hospital to disclose to all patients whether it is physician-owned and, if so, the names of its physician owners (72 FR 47385 through 47387). In addition, we added a definition of physician-owned hospital at § 489.3. The disclosure requirement in current § 489.20(u) is applicable only to those hospitals with physician ownership. (For purposes of this proposal, the term “hospital” also includes “critical access hospital” (CAH).) We neglected to include those hospitals in which no physician held an ownership or investment interest, but in which an immediate family member of a physician held an ownership or investment interest. However, it was always our intent to have consistency between the disclosure requirements and the physician self-referral statute and regulations. The physician self-referral statute and regulations, which recognize the potential for program and patient abuse where a financial relationship exists, are applicable to both a physician and the immediate family member of the physician. We believe that it is necessary to revise our definition of physician-owned hospital because a physician's potential conflict of interest occurs not only in those instances where he or she has a financial relationship in the form of an ownership or investment interest, but also where his or her immediate family member has a similar interest, and patients should be informed of this as part of making an informed decision concerning treatment. Therefore, we are proposing to revise the language in § 489.3 to define a “physician-owned hospital” as a participating hospital in which a physician, or an immediate family member of a physician (as defined at § 411.351), has an ownership or investment interest in the hospital. To effectuate the changes made in the FY 2008 IPPS final rule with comment period, we relied on our authority in sections 1861(e)(9), 1820(e)(3) and 1866 of the Act, and on our general rulemaking authority in sections 1871 and 1102 of the Act. Following publication of the FY 2008 IPPS final rule with comment period, we became aware that some physician-owned hospitals have no physician owners who refer patients to the hospital (for example, in the case of a hospital whose physician-owners have retired from the practice of medicine). We believe that requiring a hospital with no 
                        *referring*
                         physician owners to disclose to all patients that it is physician-owned and to provide the patients with a list of the (nonreferring) physician owners would be an unnecessary burden on the hospital and of no value in assisting a patient in making an informed decision as to where to seek treatment. Similarly, we do not believe that it is useful to require a hospital to make such disclosures when no referring physician has an immediate family member who has an ownership or investment interest in the hospital. Accordingly, we are proposing to include in § 489.20(v) new language to provide for an exception to the disclosure requirements for a physician-owned hospital (as defined at § 489.3) that does not have any physician owners who refer patients to the hospital (and that has no referring physicians (as defined at § 411.351) who have an immediate family member with an ownership or investment interest in the hospital), provided that the hospital attests, in writing, to that effect and maintains such attestation in its files for review by State and Federal surveyors or other government officials. (We note that, as explained below, we are proposing to redesignate the existing paragraphs (v) and (w) of § 489.20 as paragraphs (w) and (x), respectively.) We are proposing to revise § 489.20(u) to specify that a hospital must furnish to patients the list of owners and investors who are physicians (or immediate family members of physicians) at the time the list is requested by or on behalf of the patient. In response to the FY 2008 IPPS proposed rule, we received public comments that noted that our proposal did not establish a timeframe within which the hospital must furnish to patients the required list of the hospital's physician owners or investors. These commenters suggested that we require that the list be provided to the patient at the time the request for the list is made by or on behalf of the patient. We stated in the preamble of the FY 2008 IPPS final rule with comment period that we would not revise the provision to include any specific timeframe for making the list available because we believed that it was important to allow hospitals some degree of flexibility regarding the manner and form in which it notified patients of the identity of its physician owners and investors (72 FR 47386). However, we also stated later in the preamble that we were revising proposed § 489.20(u) to specify that the 
                        ( print page 23684)
                        hospital should furnish a list of physician owners to a patient at the beginning of his or her hospital stay or outpatient visit, but the regulation text did not reflect this change (72 FR 47387). We have reconsidered the issue and are proposing in § 489.20(u)(1) that the list of the hospital's owners or investors who are physicians or immediate family members of physicians (as defined at § 411.351) must be furnished at the time the patient or someone on the patient's behalf requests it. We are proposing this change for two reasons. First, in the FY 2008 IPPS final rule with comment period, in response to public comments received on the FY 2008 IPPS proposed rule, we stated that we believed that the physician ownership disclosure proposal would permit an individual to make more informed decisions regarding his or her treatment and to evaluate whether the existence of a financial relationship, in the form of an ownership interest, suggests a conflict of interest that is not in his or her best interest. However, we maintain that the provision of a generic notice that the hospital is owned by physicians or immediate family members of physicians is insufficient to permit an individual to make a truly informed decision. We believe that it is critical that the patient receives the list of names of the relevant owners or investors at the time the request is made by or on behalf of the patient so that the patient may make a determination as to whether his or her admitting or referring physician has a potential conflict of interest. Second, furnishing the list at the time the request is made by the patient or on behalf of the patient is crucial to affording the patient an opportunity to make an informed decision 
                        *before*
                         treatment is furnished at the hospital. We are not specifying a form to be used for the list; rather, we are addressing the timeframe for the hospital to furnish the list to the patient. In addition, we are proposing to add new § 489.20(u)(2) to require a hospital to require all physicians who are members of the hospital's medical staff to agree, as a condition of continued medical staff membership or admitting privileges, to disclose in writing to all patients who they refer to the hospital any ownership or investment interest in the hospital held by themselves or by an immediate family member. We would require that physicians agree to make such disclosures at the time they refer patients to the hospital. We proposed a similar requirement in the FY 2008 IPPS proposed rule, but decided not to adopt it as final. In response to a public comment, we stated that we would not finalize the proposal because we believed that it would not provide any additional protections for patients that would not already be offered by the requirement for hospitals to disclose their physician ownership to patients. We have revisited this issue. In the FY 2008 IPPS final rule with comment period, we stated that the scheduling of most hospital inpatient or outpatient services is performed by a staff member in the physician's office, often weeks, or even months, in advance of the furnishing of the service. As discussed previously, we believe that early notification of physician ownership or investment in the hospital is beneficial to the patient's decisionmaking concerning his or her treatment. Currently, under § 489.20(u), scheduling of inpatient stays and outpatient visits at physician-owned hospitals would be permitted without notification to the patient of the referring physician's ownership or investment interest in the hospital. If a patient were notified of the physician ownership or investment at the time of the referral, he or she would have an opportunity to discuss the physician's ownership or investment in the hospital and make a more informed decision. We believe that it would be in the best interests of the patient and the physician owner or investor to disclose the physician's (or his or her immediate family member's) ownership in the hospital at the time the physician is referring the patient to the hospital. We are revising § 489.20(u) accordingly. We note that notification of physician ownership or investment in a hospital may not be viewed negatively by all interested parties. For instance, some physician owners or investors in hospitals believe that disclosing their ownership or investment interests in the hospital to their patients at the time of the referral is extremely beneficial for both the physician and the patient. They communicate to patients their belief that their ownership in the hospital permits them to have total control over scheduling, staffing, and quality mechanisms. Section 5006 of the Medicare, Prescription Drug, Improvement, and Modernization Act of 2003 (MMA) required, among other things, that HHS study the quality of care and patient satisfaction with specialty hospitals. HHS concluded that specialty hospital patients have very favorable perceptions of the clinical quality of care they receive, and that overall patient satisfaction is very high. We are also proposing to revise § 489.53 to permit CMS to terminate the Medicare provider agreement if the hospital fails to comply with the provisions of proposed § 489.20(u)(1) or (u)(2). We believe that these revisions would be necessary to enforce the proposed disclosure requirements set forth in § 489.20. We are not inclined to make a corresponding change to the medical staff bylaws condition of participation (CoP) in § 482.22(c). We believe that the proposed disclosure requirement is appropriate for inclusion in the regulations governing Medicare provider agreements for the following reasons. As stated in the FY 2008 IPPS final rule with comment period, each participating provider must comply with all applicable provisions of the provider agreement regulations found in 42 CFR Part 489, and CMS may terminate a provider agreement if the provider is not in substantial compliance with these requirements (72 FR 47391). A provider's compliance with applicable provider agreement regulations is reviewed through a variety of means, including onsite investigation of complaints. Thus, compliance with this proposed requirement could be easily monitored. We also note that any revisions to the medical staff bylaws concerning the requirement that the disclosure be given at the time of the referral would be difficult to enforce as a CoP because the required notification generally would be given outside of the hospital's or CAH's premises. However, we are considering whether these proposed changes would be better effectuated through changes to our regulations governing the CoPs applicable to hospitals and CAHs, which appear at 42 CFR Part 482 and 42 CFR Part 485, Subpart F, respectively, and, therefore, we are soliciting public comments on this issue. In the FY 2008 IPPS final rule with comment period, we added a new provision at § 489.20(v) to require that hospitals and CAHs: (1) Furnish all patients written notice at the beginning of their inpatient hospital stay or outpatient service if a doctor of medicine or a doctor of osteopathy is not present in the hospital 24 hours per day, 7 days per week; and (2) describe how the hospital or CAH will meet the medical needs of any patient who develops an emergency medical condition at a time when no physician is present in the hospital (72 FR 47387). (We are proposing to redesignate existing § 489.20(v) and (w) as § 489.20(w) and (x), respectively, to accommodate the addition of the proposed exception to the requirements in § 489.20(v) discussed above.) We stated that it is important to ensure that consumers are provided accurate information on the availability of 
                        ( print page 23685)
                        physician services at the point when they are about to become patients of a hospital or CAH. In order to be fully informed, consumers should be made aware of whether a hospital or CAH has a physician on-site 24 hours per day, 7 days per week, and should be made aware of the hospital's or CAH's processes for addressing medical emergencies that may occur when a physician is not on site. Given the patient safety measures addressed by these provisions, we are proposing to set forth penalties for failure to comply with these requirements. Specifically, we are proposing to revise § 489.53 to permit CMS to terminate the provider agreement of any hospital or CAH that fails to comply with the requirements set forth in proposed redesignated § 489.20(w). We are also soliciting public comments on whether hospitals and CAHs should educate patients about the availability of information regarding physician ownership under the proposed disclosure requirements and, if so, by what means (for example, by a posting in the admissions office or in a patient brochure). VIII. Physician Self-Referral Provisions (§§ 411.351, 411.352 and 411.354) A. Stand in the Shoes Provisions 1. Physician “Stand in the Shoes” Provisions a. Background Section 1877 of the Act, also known as the physician self-referral law: (1) Prohibits a physician from making referrals for certain designated health services (“DHS”) payable by Medicare to an entity with which he or she (or an immediate family member) has a financial relationship (ownership, investment or compensation), unless an exception applies; and (2) prohibits the entity from filing claims with Medicare (or billing another individual, entity, or third party payor) for those referred services. The statute establishes a number of specific exceptions and grants the Secretary the authority to create regulatory exceptions for financial relationships that pose no risk of program or patient abuse. Determining whether DHS entities and referring physicians (or their immediate family members) have direct or indirect financial relationships is a key step in applying the statute. In the final rule entitled “Medicare Program; Physicians' Referrals to Health Care Entities With Which They Have Financial Relationships (Phase III),” published in the 
                        **Federal Register**
                         on September 5, 2007 (72 FR 51012) (“Phase III”), we interpreted certain provisions of section 1877 of the Act, including provisions relating to direct and indirect compensation arrangements. Specifically, the Phase III final rule included provisions under which referring physicians are treated as standing in the shoes of their physician organizations for purposes of applying the rules that describe direct and indirect compensation arrangements in § 411.354 (72 FR 51026 through 51030). A “physician organization” is defined at § 411.351 as “a physician (including a professional corporation of which the physician is the sole owner), a physician practice, or a group practice that complies with the requirements of § 411.352.” Therefore, when determining whether a direct or indirect compensation arrangement exists between a physician and an entity to which the physician refers Medicare patients for DHS, the referring physician stands in the shoes of: (1) Another physician who employs the referring physician; (2) his or her wholly-owned professional corporation (“PC”); (3) a physician practice (that is, a medical practice) that employs or contracts with the referring physician or in which the physician has an ownership interest; or (4) a group practice of which the referring physician is a member or independent contractor. The referring physician is considered to have the same compensation arrangements (with the same parties and on the same terms) as the physician organization in whose shoes the referring physician stands. Subsequent to the publication of Phase III, industry stakeholders, including academic medical centers (“AMCs”), integrated tax-exempt health care delivery systems, and their representatives, expressed concern about the application of the Phase III “stand in the shoes” provisions to compensation arrangements involving “mission support payments” and “similar payments” (referred to in this proposed rule generally as “support payments”). The stakeholders believed that certain payments did not previously trigger application of the physician self-referral law but, after Phase III, need to satisfy the requirements of an exception. One example offered was a DHS entity component (such as a hospital) of an AMC that transfers funds to the faculty practice plan component of the AMC. If a referring physician stands in the shoes of his or her faculty practice plan, the compensation arrangement between the hospital providing the support payment and the faculty practice plan will be considered to be a direct compensation arrangement between the hospital and the physician and would need to satisfy the requirements of a direct compensation arrangement exception, if the physician is to continue referring Medicare patients to the component for DHS. According to the industry stakeholders, before Phase III, such arrangements would have been analyzed under the rules regarding indirect compensation arrangements and would, in their view, have been permitted. After Phase III, in their view, it is unlikely that the requirements of an available exception could be satisfied given the nature of support payments; that is, support payments usually are not tied to specific items or services provided by the faculty practice plan (or group practice within an integrated health care delivery system), but rather are intended to support the overall mission of the AMC or maintain operations in an integrated health care delivery system. For this reason, support payments likely do not satisfy the requirement, present in many exceptions, that the compensation be fair market value for items or services provided. Similarly, some stakeholders raised concerns about support payments made from faculty practice plans to AMC components. Although AMCs are free to use the exception for services provided by an AMC in § 411.355(e) (which would protect support payments made among AMC components if all of the conditions of the exception are met), industry stakeholders explained that many AMCs do not do so, preferring instead to rely on other available exceptions and the rules regarding indirect compensation arrangements (especially prior to Phase III). To provide CMS sufficient time to study the “stand in the shoes” provisions as they relate to compensation arrangements involving support payments, seek additional public comment, and develop an approach for addressing this issue, on November 15, 2007, we issued a final rule entitled “Medicare Program; Delay of the Date of Applicability for Certain Provisions of Physicians' Referrals to Health Care Entities With Which They Have Financial Relationships (Phase III)” (72 FR 64164) that delayed the effective date of the provisions in § 411.354(c)(1)(ii), § 411.354(c)(2)(iv), and § 411.354(c)(3) for 12 months after the effective date of Phase III (that is, until December 4, 2008). That final rule was applicable to the following compensation arrangements between the following physician organizations and entities ONLY: With respect to an AMC as described in § 411.355(e)(2),( print page 23686)
                        compensation arrangements between a faculty practice plan and another component of the same AMC; and
                    With respect to an integrated section 501(c)(3) health care system, compensation arrangements between an affiliated DHS entity and an affiliated physician practice in the same integrated section 501(c)(3) health care system. Following the publication of the November 15, 2007 final rule, other industry stakeholders asserted that, in addition to section 501(c)(3) health care systems, most integrated health care delivery systems, including ones involving for-profit entities, make support payments. The stakeholders further asserted that, although under the “stand in the shoes” provisions such payments must now satisfy a direct compensation arrangement exception, there is, in fact, no applicable exception. These stakeholders urged that any approach to addressing the impact of the Phase III “stand in the shoes” provisions on support payments and other monetary transfers within integrated health care delivery systems should have universal applicability that is not dependent on whether the system meets the definition of an AMC or has a particular status under the rules of the Internal Revenue Service. b. Proposals Given the potential widespread impact of the “stand in the shoes” provisions, as well as the considerable industry interest in their application, we are revisiting the “stand in the shoes” policy and regulations issued in Phase III. We believe that a more refined approach to the “stand in the shoes” provisions would accomplish our goals of simplifying the analysis of many financial arrangements and reducing program abuse by bringing more financial relationships within the scope of the physician self-referral law (such as certain potentially abusive arrangements between DHS entities and physician organizations that may not have met the definition of an “indirect compensation arrangement”). We note that we are not suggesting that support payments and other similar compensation arrangements are without risk of program or patient abuse, nor are we endorsing such payments and arrangements. We are proposing here two alternative ways to address the “stand in the shoes” issues described above, and are seeking industry input on each proposal, as well as on other possible approaches. The first is a multi-faceted approach to revising the Phase III “stand in the shoes” provisions. The second proposal would leave the Phase III “stand in the shoes” provisions as promulgated and would, instead, create a new exception using our authority under section 1877(b)(4) of the Act for nonabusive arrangements that warrant protection not available under existing exceptions. We are also interested in public comments on other approaches and on whether changes to the existing “stand in the shoes” provisions are needed at all. For the first proposal, we propose revising § 411.354(c)(2)(iv) to provide that a physician would be deemed not to stand in the shoes of his or physician organization if the compensation arrangement between the physician organization and the physician satisfies the requirements of the exception in § 411.357(c) (for 
                        *bona fide*
                         employment relationships), the exception in § 411.357(d) (for personal service arrangements), or the exception in § 411.357(l) (for fair market value compensation). Currently, all physicians stand in the shoes of their physician organizations, regardless of the nature of the compensation they receive from the physician organization. Under our proposal, the first step in the analysis would be to look at the compensation a referring physician receives from his or her physician organization. A compensation arrangement between a physician organization and a physician that satisfies the requirements of § 411.357(c), (d), or (l) would be consistent with fair market value by design and not determined in a manner that takes into account (directly or indirectly) the volume or value of any referrals by the physician to the 
                        *physician organization*. Although such compensation could, in some circumstances, be determined in a manner that takes into account (directly or indirectly) the volume or value of the physician's referrals 
                        *to the DHS entity*
                         (see 66 FR 869), we believe that the risk of program or patient abuse will be addressed sufficiently by analyzing such arrangements between DHS entities and referring physicians who do not stand in the shoes of their physician organizations using the rules regarding indirect compensation arrangements. Therefore, under this proposal, if the compensation arrangement between a physician organization and one of its referring physicians satisfies the requirements of one of the exceptions noted above, the referring physician would be deemed not to stand in the shoes of the physician organization for purposes of applying the definitions of, and provisions related to, direct and indirect compensation arrangements in § 411.354(c). Arrangements between DHS entities and physician organizations whose physicians do not stand in their shoes may still create indirect compensation arrangements that would need to satisfy the requirements of the exception for indirect compensation arrangements in § 411.357(p). Under this first proposed approach, physician owners and investors would continue to stand in the shoes of their physician organizations. However, we are concerned that considering all physician owners of, or physician investors in, a physician organization to stand in the shoes of the physician organization, as they currently do under the Phase III “stand in the shoes” provisions, might be over-inclusive. For example, in a State that prohibits the corporate practice of medicine, a physician owner of a captive or “friendly” PC who has no right to the distribution of profits would stand in the shoes of his or her physician organization, even though his or her employment arrangement with the group satisfies the requirements of the exception for 
                        *bona fide*
                         employment relationships in § 411.357(c). We are considering whether these and similarly situated physician owners should have to stand in the shoes of their physician organizations when their ownership interest is nominal in nature and their compensation arrangement with the physician organization satisfies the requirements of one of the exceptions in § 411.357(c), (d), or (l). We are soliciting public comments on this issue. As described above, a physician-employee or contractor whose compensation arrangement with a physician organization does not satisfy the requirements of § 411.357(c), (d), or (l) would stand in the shoes of the physician organization. This is necessary to address our concern that an arrangement between a DHS entity and a physician organization that compensates its physicians in a manner that does not satisfy the requirements of an exception may be particularly prone to abuse. For example, where a physician-employee's compensation arrangement with his or her group practice exceeds fair market value for services provided to the group practice employer (and, thus, does not satisfy the requirements of the exception in § 411.357(c)), and the physician-employee's DHS referrals to the group practice instead are protected under the exception for in-office ancillary services in § 411.355(b), there is risk that the physician-employee's above-fair-market-value compensation may reflect the volume or value of referrals to the DHS 
                        ( print page 23687)
                        entity. This could be the result of a support or other payment between the DHS entity and the group practice that is designed to channel compensation to the physician-employee for referrals to the DHS entity. We are also considering, and solicit comments on, an approach under which 
                        *only*
                         owners of a physician organization would stand in the shoes of that physician organization (in which case, a physician would not stand in the shoes of a physician organization unless he or she holds an ownership or investment interest, even if the physician's compensation arrangement with that physician organization does not satisfy the requirements of § 411.357(c), (d), or (l)). In conjunction with this approach, we are interested in receiving comments on whether and under what circumstances the “stand in the shoes” provisions should apply to a physician organization that has no physician owners. In this first approach, we also propose to revise § 411.354(c)(3)(ii) to provide that the provisions of §§ 411.354(c)(1)(ii) and (c)(2)(iv) do not apply when the requirements of § 411.355(e) are satisfied. In other words, a physician would not stand in the shoes of his or her physician organization (for example, a faculty practice plan) when his or her referral for DHS is protected under the exception in § 411.355(e) for services provided by an AMC. We note that, if all of the requirements of the exception in § 411.355(e) are 
                        *not*
                         satisfied, a physician would stand in the shoes of his or her physician organization unless, as discussed above with respect to proposed revised § 411.354(c)(2)(iv), the compensation from the physician organization to the physician satisfies the requirements of the exception for 
                        *bona fide*
                         employment relationships, the exception for personal service arrangements, or the exception for fair market value compensation in § 411.357(c), (d), and (l), respectively. We are proposing to include a specific revision to the regulation in § 411.354(c)(2)(iv); however, we are seeking public comment as to whether this policy is better achieved by revising § 411.354(c)(3) to delete the reference to applying the exceptions in § 411.355, and thereby providing that the “stand in the shoes” provisions do not apply where the prohibition on referrals is not applicable because all of the requirements of any of the exceptions in § 411.355 are satisfied. In this first approach, we also propose to revise § 411.354(c)(3)(ii) to provide that the provisions of § 411.354(c)(1)(ii) and (c)(2)(iv) do not apply when compensation is provided by a component of an AMC to a physician organization affiliated with that AMC through a written contract to provide services required to satisfy the AMC's obligations under the Medicare graduate medical education (GME) rules where the contract is limited to only services necessary to fulfill the GME obligations as set forth in 42 CFR, Part 413, Subpart F. We have in mind certain arrangements between a hospital component of an AMC and a community physician group to serve as a teaching site for the AMC's residents, as required by the GME rules. If adopted, this proposal would not mean that such arrangements necessarily are lawful, but rather that they would be analyzed by applying the rules regarding indirect compensation arrangements. Under this first proposal, if adopted, some referring physicians would no longer stand in the shoes of their physician organizations as they currently do under the Phase III “stand in the shoes” provisions. In such circumstances, the rules regarding direct and indirect compensation arrangements would still apply, and financial relationships would still need to be analyzed for compliance with the statute and regulations. We are concerned that, where physicians do not stand in the shoes of their physician organizations, some potentially abusive arrangements between DHS entities and physician organizations might be viewed incorrectly as falling outside the definition of an “indirect compensation arrangement” at § 411.354(c)(2) and, therefore, as not within the scope of the physician self-referral law. The definition of “indirect compensation arrangement” generally requires that three elements be present: (1) An unbroken chain of financial relationships between the DHS entity and the referring physician; (2) aggregate compensation to the referring physician (from the entity in the chain closest to the physician) that varies with or takes into account in any manner the volume or value of referrals to, or other business generated for, the DHS entity; and (3) knowledge by the DHS entity that the referring physician receives such compensation. (We refer readers to 66 FR 864 through 870, 69 FR 16057 through 16063, and 72 FR 51026 through 51031 for further explanation.) We believe that some parties may be construing these elements (particularly the second and the third) too narrowly. For example, we believe that aggregate compensation can vary with or take into account the volume or value of referrals to, or business generated for, DHS entities in a wide range of circumstances, including, without limitation, arrangements involving: variable, per-click, or percentage-based compensation; exclusive contracts; inflated fixed payments; or explicit or implicit tying of compensation to other referrals. To address this issue, we may provide additional guidance on the application of the three elements of the definition of “indirect compensation arrangement” in the FY 2009 IPPS final rule. We are interested in public comments regarding ways in which we can ensure that the full range of potentially abusive arrangements between DHS entities and physician organizations are appropriately addressed in situations where physicians do not stand in the shoes of their physician organizations. As discussed above, we are proposing an alternative approach to addressing the Phase III “stand in the shoes” provisions. (However, we are proposing regulation text for the first proposal only.) Our alternative proposal is to make no revisions to the Phase III “stand in the shoes” provisions in §§ 411.354(c)(1)(ii), (c)(2)(iv), and, (c)(3) and, to the extent necessary to protect nonabusive arrangements, promulgate a separate exception using our authority under section 1877(b)(4) of the Act to create exceptions for arrangements that do not pose a risk of program or patient abuse. The new exception would apply to specific types of nonabusive payments or arrangements that are not otherwise covered by existing exceptions (for example, certain support payments, as described above), subject to conditions necessary to protect against program and patient abuse, similar to those conditions incorporated into the existing exception for services provided by an AMC in § 411.355(e). Specifically, we are considering establishing a new exception, using our authority under section 1877(b)(4) of the Act, for compensation arrangements between DHS entities and physician organizations and physicians for “mission support” payments (or similar compensation arrangements) and, if so, how we should define those payments (or similar compensation arrangements), and what criteria such an exception should include to protect against program or patient abuse. We are soliciting comments about this proposal, including whether an exception should be limited to “mission support” payments, whether other specific types of payments or compensation arrangements should be eligible for such an exception, the types of parties that should be permitted to use the 
                        ( print page 23688)
                        exception (for example, AMC components, physician practices), and the conditions that should apply to such an exception to ensure that a protected compensation arrangement poses no risk of program or patient abuse. We are concerned that some “mission support” payments or similar payments are subject to fraud and abuse. We are interested in public comments that identify with specificity the types of compensation agreements that should be permitted under an applicable exception. Under this approach, the proposed exception might address compensation arrangements between components of certain well-defined integrated delivery systems, perhaps with tightly-crafted conditions similar to those in the existing exception for services provided by an AMC in § 411.355(e). For example, some industry stakeholders have recommended that we establish an exception for compensation arrangements between a DHS entity component of an integrated health care delivery system and a physician organization component of the same integrated health care delivery system. We are concerned that the term “integrated health care delivery system” is loosely used in the industry to describe a wide variety of systems, with varying degrees of actual integration, and that it may prove infeasible to craft a sufficiently circumscribed definition. In many circumstances, payment arrangements between components of “integrated health care delivery systems,” as well as payments from “integrated health care delivery systems” to physicians affiliated with those systems are susceptible to fraud and abuse. However, we are soliciting public comments defining a fully integrated health care delivery system, what types of compensation arrangements should be protected (for example, support payments), and what conditions should be included in an exception that would ensure no risk of program or patient abuse. We note that any exception established using our authority under section 1877(b)(4) of the Act would include documentation requirements and a requirement that the arrangement not violate the anti-kickback statute or any Federal or State law or regulation governing billing or claims submission, consistent with the existing exceptions created under this authority. According to some industry stakeholders, an “integrated health care delivery system” could be defined, for example, as a health care delivery system comprised of two or more entities that are related and substantially integrated by common ownership or control, and which includes at least one hospital and one physician organization that has no physician owners or investors who make referrals for DHS to any component of the health care delivery system. Entities that file consolidated financial statements could be deemed to be substantially integrated for purposes of this definition. For purposes of this approach, ownership could exist if an individual or individuals possess 50 percent ownership or equity in the component of the integrated health care delivery system, and control would exist if an individual or an organization has the power, directly or indirectly, significantly to influence or direct the actions or policies of the component of the integrated health care delivery system. As noted above, it would be necessary to define “integrated health care delivery system,” as well as “ownership” and “control,” and to determine whether to permit integrated health care delivery systems to include entities related through written contractual affiliation agreements and, if so, what limitations (if any) should be placed on the types of contractually affiliated entities we would permit to be included as components of an integrated health care delivery system. We would need also to determine what characteristics indicate substantial integration and identify the types of compensation arrangements that exist between components of integrated health care delivery systems. We are seeking public comments regarding this possible approach (including the specific issues noted), as well as public comments on other alternative approaches to addressing the concerns regarding support payments and similar monetary transfers noted by industry stakeholders and described above. 2. DHS Entity “Stand in the Shoes” Provisions On July 12, 2007, we published in the 
                        **Federal Register**
                         a proposed rule entitled “Medicare Program; Proposed Revisions to Payment Policies Under the Physician Fee Schedule, and Other Part B Payment Policies for CY 2008; Proposed Revisions to the Payment Policies of Ambulance Services Under the Ambulance Fee Schedule for CY 2008; and the Proposed Elimination of the E-Prescribing Exemption for Computer-Generated Facsimile Transmissions; Proposed Rule” (the “CY 2008 PFS proposed rule”) (72 FR 38122). In that rule, we proposed a corollary provision to the Phase III “stand in the shoes” provisions that addressed the DHS entity side of physician—DHS entity financial relationships. Specifically, we proposed to amend § 411.354(c) to provide that, where a DHS entity owns or controls an entity to which a physician refers Medicare patients for DHS, the DHS entity would stand in the shoes of the entity that it owns or controls and would be deemed to have the same compensation arrangements with the same parties and on the same terms as does the entity that it owns or controls. For example, a hospital would stand in the shoes of a medical foundation that it owns or controls (such as where the hospital is the sole member of a nonprofit corporation). Thus, under the CY 2008 PFS proposed rule proposal, if a hospital owns or controls a medical foundation that contracts with a physician to provide physician services at a clinic owned by the medical foundation, the hospital would stand in the shoes of the medical foundation and would be deemed to have a direct compensation relationship with the contractor physician. We solicited public comments as to whether and how we would employ a “stand in the shoes” approach for these types of relationships, as well as for other types of financial relationships. In response to the CY 2008 PFS proposed rule, we received comments from a variety of industry stakeholders, including physicians, medical associations, and their representatives. Although several commenters supported the proposed entity “stand in the shoes” provisions because they share our concerns regarding parties ability to avoid application of the physician self-referral law by simply inserting an entity in the chain of financial relationships linking a DHS entity and a referring physician, many commenters expressed concern that the proposal was unclear and potentially overly broad. Commenters requested guidance regarding the level of ownership or control that would trigger the application of the entity “stand in the shoes” provisions. One commenter recommended that, instead of finalizing the entity “stand in the shoes” provisions, we issue, through a notice of proposed rulemaking, a more detailed proposal that would give industry stakeholders the opportunity to provide more meaningful comments. We did not finalize the DHS entity “stand in the shoes” provisions in the CY 2008 PFS final rule published in the 
                        **Federal Register**
                         on November 27, 2007 (72 FR 66222, 66306). Because the DHS entity “stand in the shoes” provisions are integrally related to the physician “stand in the shoes” provisions that we finalized in Phase III and for which we 
                        ( print page 23689)
                        are proposing the regulatory revisions described above, we are re-proposing here the DHS entity “stand in the shoes” provisions, with some modification. We believe that a comprehensive approach to the “stand in the shoes” provisions that addresses both physicians and physician organizations, as well as DHS entities and other entities that they own or control, is the best vehicle to address the goals outlined in the Phase III final rule, namely: (1) Simplifying the analysis of many financial arrangements; and (2) reducing program abuse by bringing more financial relationships within the ambit of the physician self-referral law. We are proposing to revise § 411.354(a) to provide that an entity that furnishes DHS would be deemed to stand in the shoes of an organization in which it has a 100 percent ownership interest and would be deemed to have the same compensation arrangements with the same parties and on the same terms as does the organization that it owns. We believe this approach is straightforward and can be readily applied. We note that, under this approach (as compared to our CY 2008 PFS proposal), a DHS entity would stand in the shoes of 
                        *any*
                         wholly-owned organization, not merely a wholly-owned DHS entity. An organization may be in any legal form (for example, a limited liability company, partnership, or corporation, regardless of status as nonprofit or exempt from taxation). We are seeking public comments specifically as to whether we should consider a DHS entity to stand in the shoes of another organization in which the DHS entity holds less than a 100 percent ownership interest and, if so, what amount of ownership should trigger application of the entity “stand in the shoes” provisions. In addition, we are seeking public comments as to whether we should deem a DHS entity to stand in the shoes of an organization that it controls (for example, an entity would stand in the shoes of a nonprofit organization of which it is the sole member); we would consider a DHS entity to control an organization if the DHS entity has the power, directly or indirectly, significantly to influence or direct the actions or policies of the organization. We are seeking public comments as to what level of control should trigger the application of the entity “stand in the shoes” provisions. 3. Application of the Physician “Stand in the Shoes” and the Entity “Stand in the Shoes” Provisions In order to protect against program and patient abuse when multiple links involving various corporate and other entities exist in a chain of financial relationships between a DHS entity and a referring physician, we are proposing that, when applying the physician “stand in the shoes” provisions and the entity “stand in the shoes” provisions to a chain of financial relationships between a physician and a DHS entity, the following conventions would apply: First, parties would apply the physician “stand in the shoes” provisions and deem the physician to stand in the shoes of his or her physician organization (in those instances where the physician “stand in the shoes” provisions apply to the particular physician and physician organization).
                    However, if applying the physician “stand in the shoes” provisions would result in only one financial relationship remaining between the DHS entity and the “collapsed” physician/physician organization*and*
                         that relationship is an ownership interest, the physician “stand in the shoes” provisions would not be applied, and the entity “stand in the shoes” provisions instead would be applied first.
                    If more than two organizations remain after first “collapsing” the physician and the physician organization (that is, if at least two links remain in the chain of financial relationships between the physician who is standing in the shoes of his or her physician organization and the DHS entity), the next step would be to apply the entity “stand in the shoes” provisions. These conventions ensure that at least one compensation arrangement remains between the DHS entity and the referring physician for purposes of analyzing the chain of relationships under the physician-self referral rules. For example, if a chain of financial relationships runs: hospital—wholly-owned home health agency—group practice—physician owner of the group practice, the first step would be to apply the physician “stand in the shoes provisions” such that the physician owner would stand in the shoes of the group practice. The next step would be to apply the entity “stand in the shoes” provisions and deem the hospital to stand in the shoes of its wholly-owned home health agency. Assuming that the financial relationship between the home health agency and the group practice is a compensation arrangement, the remaining financial relationship would be deemed to be a direct compensation arrangement between the hospital (standing in the shoes of the home health agency) and the physician (standing in the shoes of the group practice). By contrast, the example of a chain of financial relationships that runs: hospital—group practice wholly-owned by the hospital—employed physician of the group practice (whose compensation does not satisfy the requirements of the exception in § 411.357(c)), is illustrative. If the relationship between the hospital and the group practice is solely an ownership interest (that is, there is no separate compensation arrangement between them), applying the physician “stand in the shoes” provisions first, so that the physician-employee stands in the shoes of the group practice, would result in one remaining financial link between the group practice and the hospital, and that relationship would be an ownership interest. In those circumstances, the entity “stand in the shoes” provisions would be applied first and the hospital would stand in the shoes of its wholly-owned group practice. The physician would not stand in the shoes of the group practice. The remaining financial relationship would be deemed to be a direct compensation arrangement between the hospital (standing in the shoes of the group practice) and the physician. (We note that, in this example, the physician's compensation from the group practice does not satisfy the requirements of the exception for 
                        *bona fide*
                         employment relationships in § 411.357(c) and, thus, no direct exception would apply to that compensation arrangement.) Using the same chain of financial relationships, but assuming instead that the hospital has a compensation arrangement with (in addition to being the sole owner of) the group practice (for example, an office space rental agreement), under the proposals described above, the physician would stand in the shoes of the group practice, but the hospital would not stand in the shoes of the group practice because, after first applying the physician “stand in the shoes” provisions, only two organizations would remain (that is, only one link in the chain of financial relationships remains). The remaining financial relationship created by the rental agreement would be deemed to be a direct compensation arrangement between the hospital and the physician, which would need to satisfy the requirements of an exception. We are not proposing regulation text at this time with respect to the application of the physician and entity “stand in the shoes” provisions. At such time as these provisions are finalized, we would amend the regulation text, as appropriate, to codify requirements 
                        ( print page 23690)
                        related to the application of the provisions. 4. Definitions: “Physician” and “Physician Organization” In an interim final rule with comment period entitled “Medicare Program; Physicians’ Referrals to Health Care Entities With Which They Have Financial Relationships (Phase II); Interim Final Rule,” published in the 
                        **Federal Register**
                         on March 26, 2004 (72 FR 16054) (“Phase II”), we revised the definition of “referring physician” at § 411.351 to provide that a referring physician is deemed to stand in the shoes of his or her wholly-owned PC (69 FR 16060). In that rule, we stated that it is not necessary to treat a referring physician as separate from his or her wholly-owned PC. In the Phase III final rule, for purposes of implementing the physician “stand in the shoes” provisions, the term “physician organization” was newly defined at § 411.351 as “a physician (including a professional corporation of which the physician is the sole owner), a physician practice, or a group practice that complies with the requirements of § 411.352.” Our intent was that, when applying the physician “stand in the shoes” provisions in § 411.354, a physician would stand in the shoes of: (1) Another physician who employs the physician; (2) his or her wholly-owned PC; (3) a physician practice that employs or contracts with the physician or in which the physician has an ownership interest; or (4) a group practice of which the physician is a member or independent contractor. Essentially, we intended this definition to incorporate the Phase II policy that a physician stands in the shoes of, or is considered the same as, the PC of which he or she is the sole owner. In determining whether a direct or indirect compensation arrangement exists between a DHS entity and a referring physician, we intended that parties should first “collapse” the physician into his or her wholly-owned PC, and then deem that “collapsed” physician/PC unit to stand in the shoes of the physician organization (if one exists). However, we are concerned that parties may interpret the rules, using the definition of “physician organization” exclusive of the definition of “referring physician,” as requiring only that they deem a physician to stand in the shoes of his or her wholly-owned PC without further deeming the “collapsed” physician/PC unit to stand in the shoes of the physician organization. That is, with respect to a chain of financial relationships that runs: hospital—group practice—PC—physician, parties might interpret our rules as requiring only that the physician stand in the shoes of the PC and not in the shoes of the group practice, so that the resulting chain of financial relationships (after the application of the “stand in the shoes” provisions) would run: hospital—group practice—PC/physician.  However, our intention was that, after application of the “stand in the shoes” provisions, the chain of financial relationships would run: hospital—group practice/PC/physician. Therefore, we are proposing revisions to the definitions of “physician” and “physician organization” to clarify that: (1) A physician and the PC of which he or she is the sole owner are always treated the same for purposes of applying the physician self-referral rules; and (2) a physician who stands in the shoes of his or her wholly-owned PC also stands in the shoes of his or her physician organization in accordance with § 411.354(c)(1)(ii) and (c)(2)(iv). B. Period of Disallowance In response to the Phase II interim final rule with comment period, several commenters questioned what the time period would be for which the physician could not refer patients for DHS to an entity and for which the entity could not bill Medicare (the “period of disallowance”) where a financial relationship between a referring physician and an entity failed to satisfy the requirements of an exception to the general prohibition on self-referral. (
                        *See*72 FR 51024 through 51025; and 72 FR 38183.) In the Phase III final rule, in response to these inquiries, we stated that the statute provides no explicit limitation on the billing and claims submission prohibition (72 FR 51025). In the CY 2008 PFS proposed rule, we stated that the statute contemplates that the period of disallowance begins with the date that a financial relationship failed to comply with the statute and the regulations, and ends with the date that the arrangement came into compliance or ended (72 FR 38183). We noted that, in some cases, it may not be clear when a financial relationship has ended. We provided the example of an entity leasing space to a physician at a rental price that is substantially below fair market value. We stated that such an arrangement may raise the inference that the below-market rent was in exchange for future referrals, including referrals made beyond the expiration of the lease. We solicited comments with respect to: (1) The types of noncompliance for which it is not clear when a financial relationship ended; and (2) whether we should always employ a case-by-case approach or deem certain types of financial relationships to continue for a prescribed period of time. We also solicited public comments as to whether we should allow a prescribed period of disallowance to terminate where the parties have returned (or paid back the value of) any excess compensation. For example, if we were to impose a period of disallowance for a prescribed period of time because it would not be clear when a noncompliant compensation arrangement ended, we stated that we might allow the parties to terminate the period of disallowance sooner than the prescribed period if the prohibited compensation were returned. In the CY 2008 PFS proposed rule, we cautioned that we did not envision allowing such an option where the parties knew or, in our judgment, reasonably should have known, that the arrangement did not satisfy the requirements of an exception. Finally, we sought public comments as to whether we should impose a period of disqualification, prohibiting the parties from using an exception where an arrangement has failed to satisfy the requirements of that exception. We gave the example of nonmonetary compensation provided by an entity to a physician that greatly exceeded the permissible limit prescribed in § 411.357(k), and questioned whether, in addition to whatever period of disallowance would apply, the parties should be disqualified, for some period of time, from using this exception. We received few public comments in response to the CY 2008 PFS proposed rule solicitation of comments; however, with respect to the length of the period of disallowance, one commenter asserted that the appropriate period of disallowance should match the period that the financial relationship did not satisfy the requirements of an exception, but that the period should be limited to a maximum term. In addition, commenters asserted that, if the parties unwind the relationship and return the prohibited compensation, the period of disallowance should end. Another commenter suggested that the period of disallowance should end once the hospital corrects or terminates the arrangement and the physician repays to the hospital any compensation in excess of what is permitted. Alternatively, according to the commenter, if the physician does not repay the excess compensation, the period of disallowance should end once the hospital repays to Medicare the excess compensation, and the hospital should be prohibited from paying any further compensation to the physician until the 
                        ( print page 23691)
                        physician reimburses the hospital for the excess compensation. One commenter asserted that certain circumstances warrant no period of disallowance. For instance, according to the commenter, if parties to an arrangement were unaware that the arrangement violates the physician self-referral law but later were notified by CMS or its contractor of the possible violation, they should be able to amend the arrangement so that it satisfies the requirements of an exception without any period of disallowance. The commenter also asserted that there should be no period of disqualification preventing the parties from using an exception in light of the onerous penalties under the physician self-referral law. At this time, we are proposing to amend § 411.353(c) to provide that, where the reason(s) a financial relationship does not meet any applicable exception is not related to compensation (for example, a signature is missing or an agreement is not in writing as required by the applicable exception), the period of disallowance would begin on the date the arrangement first was out of compliance and end no later than the date the arrangement was brought into compliance (for example, by obtaining a missing signature on an agreement or executing a written agreement as required by the applicable exception). For example, where a hospital and a physician enter into a personal service arrangement for medical director services and begin performing under the arrangement on January 1, but do not execute a written agreement until January 31, provided that all of the requirements of § 411.357(d) (the exception for personal service arrangements) are satisfied as of January 31, the period of disallowance would begin on January 1 and end no later than January 31. As discussed below, we believe that it is possible that a financial arrangement may end prior to the arrangement being brought into compliance. In such circumstances, a determination as to the duration of the period of disallowance necessarily would be made on a case-by-case basis considering the facts and circumstances, and we are not proposing a prescribed period of disallowance for such a situation. We are also proposing that, where the reason a financial relationship does not meet any applicable exception is related to the payment or receipt of excess compensation (for example, the compensation paid to a physician is greater than fair market value or exceeds the limits in § 411.357(k) or (m)), the period of disallowance would begin on the date the arrangement first was out of compliance 
                        *and*
                         end no later than the date the excess compensation (including interest, as appropriate) was returned by the party receiving it to the party that provided it and 
                        *all*
                         other requirements of the applicable exception are met. For example, if a hospital provided nonmonetary compensation totaling $100 in excess of the limits in § 411.357(k) on February 1 and the parties did not discover the noncompliance until October 1 (and, therefore, could not avail themselves of the provisions in § 411.357(k)(3) permitting parties to remain in compliance with the exception if excess nonmonetary compensation (within certain limits) provided inadvertently is discovered and returned with 180 days of its receipt), the period of disallowance would begin on February 1 and end no later than the date that the physician returned the excess nonmonetary compensation or its value ($100 plus interest, as appropriate) to the hospital. Assuming that the physician paid the hospital $100 (plus interest, as appropriate) on October 15, the period of disallowance would run from February 1 through no later than October 15. Our proposal would also prescribe a period of disallowance where the reason a financial relationship does not meet any applicable exception is related to the payment or receipt of compensation that is insufficient to satisfy the requirements of an exception (for example, office space or equipment rental payments that are below fair market value). We are proposing that the period of disallowance would begin on the date the arrangement first was out of compliance and end no later than the date the shortfall was paid to the party to which it is owed 
                        *and*
                         all other requirements of the applicable exception are met. The “shortfall” would be that amount (including interest, as appropriate) necessary to bring the arrangement into compliance from the date of its inception. For example, assume a hospital and physician entered into a 2-year office space rental agreement on January 1 (of Year 1) which specified rental charges (consistent with fair market value) of $20 per square foot during Year 1 and automatically adjusted upward each January 1 by any increase in the CPI-U. If, on January 1 of Year 2 of the agreement, the rental charges increased to $21 per square foot based on the amount of increase in the CPI-U, but the physician continued to pay $20 per square foot until the compliance failure was identified on June 30 of Year 2, the period of disallowance would run from January 1 of Year 2 until no later than June 30 of Year 2, 
                        *provided that*
                         the physician paid the hospital on June 30 of Year 2 the shortfall of $1 per square foot for the 6-month shortfall period (plus interest, as appropriate) 
                        *and,*
                         as of July 1 through the term of the agreement, the physician paid $21 per square foot for the office space, and the arrangement otherwise satisfied the requirements of the exception in § 411.357(d). As discussed below, we believe that it is possible that an arrangement may end prior to excess compensation being returned or a shortfall being paid; however, such a determination as to the duration of the period of disallowance necessarily would be made on a case-by-case basis considering the facts and circumstances, and we are not proposing a prescribed period of disallowance for such a situation. We also note that an arrangement may be noncompliant for reasons that are related to compensation, but which do not involve the payment or receipt of excess compensation or a shortfall in compensation paid or received. For example, many of our exceptions require that the compensation not take into account the volume or value of referrals or other business generated between the parties and that the compensation be commercially reasonable, even if no referrals were made between the parties. It is possible that the amount of compensation provided under an arrangement is fair market value or is consistent with a prescribed limit in one of the exceptions (such as in § 411.357(k)), but, for example, takes into account the volume or value of referrals and this results in a noncompliant arrangement. We are not proposing a prescribed period of disallowance for arrangements that are noncompliant for reasons that are related to compensation but which do not involve only the payment or receipt of excess compensation or a shortfall in compensation paid or received. Rather, the appropriate period of disallowance for such arrangements would need to be determined on a case-by-case basis. Essentially, our proposals place an outside limit on the period of disallowance in certain circumstances. That is, where the reason(s) for noncompliance does not relate to compensation, the latest the period of disallowance would end would be the date the arrangement was brought into compliance. Where the reason for noncompliance is the fact that excess compensation was provided or too little compensation was paid, the latest the 
                        ( print page 23692)
                        period of disallowance would end would be the date that the party receiving the excess compensation returned it to the party that provided it or the party owing the shortfall in compensation paid it to the party to which it was owed (assuming the arrangement otherwise satisfies the requirements of an applicable exception). We recognize, of course, that parties to a financial relationship that is noncompliant may never bring the relationship into compliance with an applicable exception. The financial relationship may expire according to the terms of the underlying agreement (such as the date of expiration of a personal service contract), or it may end earlier or later than the expiration date provided in the underlying agreement. However, we do not propose to prescribe with specificity when such a noncompliant financial relationship (and, thus, the period of disallowance) might end. Likewise, if a party that receives excess compensation never repays the excess compensation, or a party who owes additional compensation (the shortfall) never pays it, the question arises as to when the financial relationship ends. To return to the example that we gave in the CY 2008 PFS proposed rule and that we reference above, if an entity leases space to a physician at a rental price that is substantially below fair market value, the inference may be raised that the below-market rent was in exchange for future referrals, including referrals made beyond the expiration of the lease agreement. Therefore, in such a situation, if the physician does not pay the rental charges shortfall, the financial relationship may not end at the expiration of the written lease agreement, but rather could extend for some period beyond the expiration of the written lease agreement. We are not proposing to establish any specific time period or even guidelines for when the financial relationship in the above example would be deemed to end (so that future referrals would not be tainted); rather the determination of when the financial relationship ends must depend on the facts and circumstances. We note that our proposals pertain only to placing an outside limit on the period of disallowance for making referrals and billing the Medicare program in the case of certain noncompliant financial relationships; they do not address whether the anti-kickback statute is implicated and/or whether civil monetary penalties under the physician self-referral statute are potentially applicable due to noncompliant financial relationships. We are not proposing, as one commenter suggested, that, in a situation involving noncompliance due to excess compensation paid by an entity to a physician (or the physician's immediate relative), the period of disallowance would end no later than the date the entity repays the excess compensation to the Medicare program, should the physician not repay the excess compensation to the entity. This approach is not consistent with the statute. We are also not proposing, as another commenter suggested, to impose no period of disallowance for the situation in which parties allegedly were unaware of the noncompliant nature of a financial relationship. We do not have the authority under section 1877 of the Act to waive violations of the physician self-referral law. We note also that there would be practical problems in determining whether parties were unaware of the noncompliant nature of the arrangement and that we would be discouraging parties from carefully structuring arrangements and monitoring them. In the CY 2008 PFS proposed rule, we proposed an alternative method of compliance that may address some of the commenter's concerns, and that proposal is still under consideration for final rulemaking. Finally, we are not proposing to impose a period of disqualification during which the parties to a noncompliant financial relationship would be prohibited from using a particular exception due to that relationship. We may propose rulemaking on this subject in the future. C. Gainsharing Arrangements 1. Background The term “gainsharing” typically refers to an arrangement under which a hospital gives physicians a share of the reduction in the hospital's costs (that is, the hospital's cost savings) attributable in part to the physicians' efforts. Gainsharing may take several forms. Some arrangements are narrowly targeted, giving the physician a financial incentive to select specific medical devices and products that are less expensive or to adopt specific clinical practices or protocols that reduce costs. Other, more problematic arrangements are not targeted at utilization of specific supplies or specific clinical practices, but instead offer the physician payments to reduce total average costs per case below target amounts. Gainsharing arrangements seek to align physician incentives with those of hospitals by offering physicians a share of the hospital's variable cost savings attributable to the physicians' efforts in controlling the cost of providing patient care. Following the institution of the Medicare Part A DRG system of hospital reimbursement and with the growth of managed care, hospitals have experienced significant financial pressure to reduce costs. However, because physicians are paid separately under Medicare Part B and Medicaid, physicians do not share necessarily a hospital's incentive to control the hospital's patient care costs. Gainsharing arrangements are designed to align hospital and physician incentives by offering physicians a portion of the hospital's cost savings in exchange for identifying and implementing cost-saving strategies. 2. Statutory Impediments to Gainsharing Arrangements Whereas gainsharing promotes hospital cost reductions by aligning physician incentives with those of the hospital, these arrangements also implicate the physician self-referral statute (section 1877 of the Act). Section 1877(a)(1) of the Act states that, except as provided in section 1877(b) of the Act, if a physician (or an immediate family member of such physician) has a financial relationship with an entity, the physician may not make a referral to the entity for the furnishing of DHS for which payment otherwise may be made under title XVIII of the Act. The provision of monetary or nonmonetary remuneration by a hospital to a physician through a gainsharing arrangement would constitute a financial relationship with an entity for purposes of the physician self-referral statute. Gainsharing arrangements also implicate two specific fraud and abuse statutes. First, sections 1128A(b)(1) and (b)(2) of the Act, commonly referred to as the Civil Monetary Penalty, or CMP, statute, prohibit a hospital from knowingly making a payment directly or indirectly to a physician as an inducement to reduce or limit items or services furnished to Medicare or Medicaid beneficiaries, and a physician from knowingly accepting such payment. Second, gainsharing arrangements implicate section 1128B(b) of the Act (the “anti-kickback statute”) if one purpose of the cost savings payment is to influence referrals of Federal health care program business. 3. Office of Inspector General (OIG) Approach Towards Gainsharing Arrangements The HHS Office of Inspector General (“OIG”) historically has been wary of 
                        ( print page 23693)
                        gainsharing arrangements. In July 1999, OIG issued a Special Advisory Bulletin that addressed the application of sections 1128A(b)(1) and (2) of the Act to gainsharing arrangements. Although OIG recognized that appropriately structured gainsharing arrangements may offer significant benefits where there is no adverse impact on the quality of care received by patients, section 1128A(b) of the Act clearly prohibits arrangements that are intended as an inducement to limit or reduce services to Medicare or Medicaid patients. In addition, OIG stated that regulatory relief from the CMP prohibition would require statutory authorization. OIG has issued several favorable advisory opinions regarding individual gainsharing arrangements, although the opinions (like all OIG advisory opinions) do not have general applicability. When evaluating the risks posed by a gainsharing arrangement, OIG has generally looked for three types of safeguards, namely: (1) Measures that promote accountability and transparency; (2) adequate quality controls; and (3) controls on payments related to referrals. Properly structured, gainsharing arrangements may offer opportunities for hospitals to reduce costs without causing inappropriate reductions in medical services or rewarding referrals of Federal health care program patients. In a number of specific cases involving limited proposed arrangements, OIG has issued advisory opinions in which it concluded that the proposed arrangement presents a low risk of abuse and, therefore, it would exercise its prosecutorial discretion not to impose sanctions. In these cases, OIG has concluded, based on the totality of facts and circumstances and the presence of adequate safeguards, that: (1) The proposed arrangement would constitute an improper payment to induce the reduction or limitation of services as prohibited by sections 1128A(b)(1) and (2) of the Act, but that OIG would not impose sanctions on the requestors of the advisory opinion; and (2) the proposed arrangement would potentially generate prohibited remuneration under the anti-kickback statute if the requisite intent to induce or reward referrals of Federal health care program business were present, but that OIG would not impose administrative sanctions on the requestors under section 1128A(a), or under section 1128(b)(7) or section 1128A(a)(7), as those sections relate to the commission of acts described in the anti-kickback statute. 4. MedPAC Recommendation MedPAC, in its March 2005 Report to Congress, “Physician-owned Specialty Hospitals,” recommended that gainsharing arrangements between physicians and hospitals be permitted. Specifically, MedPAC stated that, “[t]he Congress should grant the Secretary the authority to allow gainsharing arrangements between physicians and hospitals and to regulate those arrangements to protect the quality of care and minimize financial incentives that could affect physician referrals.” (See 
                        *http://www.medpac.gov/​publications/​congressional repots/Mar05EntireReport.pdf,*
                         at page 47). In addition, MedPAC stated that, drawing on OIG's work, the Secretary could require that gainsharing arrangements: Identify specific actions that would produce savings, such as limiting the inappropriate use of supplies;
                    Are transparent and disclosed to patients;
                    Include periodic reviews of quality of care by an independent organization;
                    Limit the amount of time during which physicians can share cost savings in order to prevent hospitals from using these agreements as a mechanism to induce physician referrals;
                    Avoid rewarding physicians for increasing referrals to the hospitals, such as capping potential savings based on the number of prior year admissions; and
                    Monitor changes in the severity, age, and insurance coverage of patients affected by the gainsharing arrangement. 5. Demonstration Programs CMS has long been interested in evaluating the association between payments and the quality of care. In 1991, CMS initiated a demonstration program entitled the “Medicare Participating Heart Bypass Center Demonstration.” This demonstration was conducted to assess the feasibility and cost effectiveness of a negotiated all-inclusive bundled payment arrangement for coronary artery bypass graft (CABG) surgery while maintaining high quality care. CMS originally negotiated contracts with four applicants. In 1993, the demonstration was expanded to include three more participants. The results of the demonstration showed that an all-inclusive bundled payment arrangement can provide an incentive to physicians and hospitals to work together to provide services more efficiently, improve quality, and reduce costs. The bundling of the physician and hospital payments did not have a negative impact on the post-discharge health improvements of the demonstration patients. Three of the four original hospitals were able to make major changes in physician practice patterns and operations that generated significant cost savings. A hospital's participation in the demonstration appeared to have little or no effect on physician referral patterns. A second demonstration project that involves gainsharing arrangements is authorized by section 646 of the MMA, which added a new section 1866C of the Act and established the Medicare Health Care Quality MHCQ Demonstration Program. MHCQ demonstration projects are intended to “* * * examine health delivery factors that encourage the delivery of improved quality in patient care.” Using the authority provided by section 1866C of the Act, CMS decided to implement a 3-year demonstration that would test gainsharing models involving physicians and collaborations between hospitals working with physicians in a single geographic area to improve the quality of inpatient hospital care. In contrast to traditional models of gainsharing, the proposed demonstration approaches must be across single or multiple organizations and involve long-term followup to ensure both documented improvements in quality and reductions in the overall costs of care. CMS is particularly interested in demonstration designs that: (1) Track patients well beyond a hospital episode to determine the impact of hospital-physician collaborations on preventing short and longer-term complications, duplication of services, and coordination of care across settings; and (2) offer other quality improvements for eliminating preventable complications and unnecessary costs. A third series of demonstration projects was authorized by section 5007 of the Deficit Reduction Act of 2005 (the “DRA”) (Pub. L. 109-171). This provision requires the Secretary to establish a qualified gainsharing demonstration under which the Secretary shall approve up to six demonstration projects. Section 5007 demonstration projects would involve arrangements between a hospital and physicians and practitioners under which the hospital provides for remuneration (that is, gainsharing payments) to certain physicians and to certain practitioners (as defined in 1842(b)(18)(C) of the Act) that represents solely a share of the savings incurred directly as a result of collaborative efforts between the hospital and a particular physician (or practitioner) to improve overall quality and efficiency. Each demonstration 
                        ( print page 23694)
                        project must also provide measures to monitor quality and efficiency in the participating project hospital(s). 6. Solicitation of Comments In the CY 2008 PFS proposed rule, we noted that we are concerned about compensation arrangements between entities and physicians under which compensation is determined on a percentage basis (for example, rental charges for office space that are determined based on a percentage of a group practice's revenues) (72 FR 38184). We proposed to clarify that percentage-based compensation arrangements may be used only for paying for personally performed physician services and that such arrangements must be based on the revenues directly resulting from the physician services rather than based on some other factor such as a percentage of the savings by the hospital department. The proposed changes, if finalized, might prevent typical gainsharing arrangements between physicians and hospitals to which they refer for DHS. We have not yet finalized our proposal in the CY 2008 PFS final rule; however, it remains under active consideration. Notwithstanding our general concern with arrangements that involve the use of a percentage-based compensation formula (other than payment to a physician for work personally performed by the physician), we recognize the value to the Medicare program and its beneficiaries where the alignment of hospital and physician incentives results in improvements in quality of care. Therefore, we are considering whether to issue an exception specific to gainsharing arrangements. Under section 1877(b)(4) of the Act, we may issue additional exceptions (that is, exceptions not specified in the statute) only where doing so would create no risk of program or patient abuse. At this time, we decline to issue a specific proposal concerning an exception for gainsharing arrangements, but rather are soliciting comments as to whether we should establish an exception for gainsharing arrangements, and, if so, what safeguards should be included in the exception. Specifically, we are interested in receiving comments on: (1) What types of requirements and safeguards should be included in any exception for gainsharing arrangements; and (2) whether certain services, clinical protocols, or other arrangements should not qualify for the exception. D. Physician-Owned Implant and Other Medical Device Companies 1. Background We have recently become aware of an increase in physician investment in implant and other medical device manufacturing, distribution, and purchasing companies. We recognize that physician involvement often adds value to device manufacturing companies and that many physicians may have legitimate investment interests in these companies. Physicians participate in the research, development, and testing involved in creating and producing many lifesaving and quality-of-life enhancing medical devices. The added value of physician involvement in distribution and purchasing companies, essentially middlemen companies, is less clear. When physicians profit from the referrals they make to hospitals through physician-owned implant and medical device companies (“POCs”), we are concerned about possible program or patient abuse. POCs exist in three primary forms: manufacturers, distributors, and group purchasing organizations (“GPOs”). Our understanding, however, is that many POCs are not manufacturers, but rather are companies that profit from the purchase and resale of products made by another organization (that is, they act as distributors) or from GPO fees paid by device vendors. In many cases, the physician investors bear little, if any, economic risk with respect to the medical devices. It is also our understanding that some physicians are offered investment interests in “private label” or similar manufacturing entities when the physicians have provided little, if any, necessary research, design, or testing services. We are concerned that some physician-owned organizations may serve little purpose other than providing physicians the opportunity to earn economic benefits in exchange for nothing more than ordering medical devices or other products that the physician-investors use on their own patients. The financial incentives paid to the physicians may foster an anti-competitive climate, raise quality of care concerns, and lead to overutilization of the device or other product to which the physician is linked. Physicians are responsible for selecting or recommending the devices ordered for the hospital's patients. It is reasonable to believe that medical device or implant companies without physician investment will have difficulty finding referral sources in areas where many physicians are invested in a POC that offers competing products. In response to our proposed change to the definition of “entity” at § 411.351 in the CY 2008 PFS proposed rule, we received public comments regarding whether a physician-owned implant or other medical device company should or should not be considered to be an “entity.” One commenter noted that orthopedic surgeons may have an ownership interest in a manufacturer of spinal implants that sells its implants to the hospital where the surgeon performs his or her surgeries. According to the commenter, because the proposed definition of “entity” would extend to an entity that “performs the DHS,” the manufacturer arguably could be considered to be an “entity” under § 411.351. This commenter urged us to exclude such manufacturers from the definition of “entity.” The commenter stated that indirect arrangements involving spinal implants would trigger the self-referral prohibition if they are not at fair market value. Comments submitted on behalf of a manufacturer of spinal implants asserted that, despite superficial similarities, joint ventures involving medical devices differ in many material ways from the types of arrangements about which we expressed concern. This commenter also asserted that the meaning of “has performed the DHS” is unclear and that we should clarify that the proposal applied only to “true” “under arrangement” relationships with hospitals, but that, in any event, implantable devices are not DHS. According to the commenter, even if implantable devices were deemed to be DHS, the rigorous physician self-referral exceptions (for example, the exception for indirect compensation arrangements in § 411.357(p)) are still available to protect the arrangement and against program or patient abuse. In an October 6, 2006 letter response to a request for guidance regarding certain physician investments in the medical device industry, OIG stated that it was aware of an apparent proliferation of physician investments in medical device and distribution companies, including GPOs, and that, given the strong potential for improper inducements between and among the physician investors, the companies, device vendors, and medical device purchasers, it believed that all of these ventures should be closely scrutinized under the fraud and abuse laws. OIG also clarified that its 1989 Special Fraud Alert on Joint Ventures applies to all physician joint ventures and would, therefore, apply to physician investments in medical device manufacturing and distribution 
                        ( print page 23695)
                        companies, as well as GPOs. OIG confirmed that the fact that a substantial portion of a venture's gross revenues is derived from participant-driven referrals is a potential indicator of a problematic joint venture. The October 6, 2006 letter response is available at 
                        *http://oig.hhs.gov/​fraud/​docs/​alertsandbulletins/​GuidanceMedicalDevice%20(2).pdf.*
                         See also 
                        *http://oig.hhs.gov/​testimony/​docs/​2008/​demske_​testimony022708.pdf.* A medical device company requested that we take a closer look at the current prevalence of POCs and the impact that these companies may have on program or patient abuse, as well as the negative impact on competition among POCs and nonphysician owned medical device companies. This company noted that, in the CY2008 PFS proposed rule, we proposed revising the definition of “entity” to include, among other things, an entity that causes a claim to be submitted to Medicare. It suggested that we finalize our proposal and that we deem POCs to be DHS entities under certain circumstances. It also suggested that, in certain circumstances, physician investors in POCs should be deemed to have a direct compensation relationship with the hospitals that order and use implantable devices furnished by the POCs. The company suggested that a POC should not be considered to have caused a claim to be presented where the referring physician is named as an inventor on an issued patent for the implantable item, provided that the physician does not receive any remuneration from the POC based on the volume or value of his or her referrals, or where the physician's investment interest satisfies the requirements of the exception in § 411.356(a) for large, publicly traded entities. We note that it is not clear to us under what circumstances a patent holder physician, who presumably receives royalty payments from the POC, would receive remuneration that does not relate to the volume or value of referrals or other business generated by the physician. In the Phase II final rule with comment period, we noted that we received a comment that questioned whether the payment of a royalty by an equipment manufacturer to a physician inventor for a device implanted during surgeries performed by the physician inventor is permitted or whether that arrangement would create an indirect compensation relationship with the hospital that purchased the device. We stated, in response, that the physician inventor would have an indirect compensation arrangement with the hospital in which the surgeries are performed but, provided the royalty payment was fair market value, the relationship should satisfy the exception for indirect compensation arrangements in § 411.357(p) (69FR 16060). 2. Solicitation of Comments At this time, we are not issuing a specific proposal regarding POCs. The statute and our existing regulations, specifically those related to indirect compensation arrangements, address many POCs. In some problematic circumstances, an unbroken chain of financial relationships will connect the physician owner of a POC to a DHS entity to which the physician makes referrals, and the other elements of an indirect compensation arrangement contained in § 411.354(c)(2) will also be present, including the requisite knowledge by the DHS entity of the physician's interest in the POC. In many instances, the arrangement would not satisfy the requirements of the exception for indirect compensation arrangements in § 411.357(p), and would, therefore, run afoul of the physician self-referral statute. However, we are soliciting public comments as to whether our physician self-referral rules should address POCs and similar physician owned companies more specifically, or whether the concerns surrounding POCs and similar organizations, to the extent that they are not addressed by the statute and our current rules, are better addressed through enforcement of the False Claims Act, the anti-kickback statute and similar fraud and abuse laws, other public laws, and through other applicable Federal, State, and local regulations. In this regard, we are seeking comments as to whether, and to what degree, physician investment in POCs and similar organizations presents risks of overutilization, substandard care, and increased costs to the Medicare program and its beneficiaries, or whether the risk is confined to possible anti-competitive behavior. To the extent that commenters believe that certain physician investment in POCs and similar organizations should be addressed more specifically under our physician self-referral rules, commenters are encouraged to provide us with suggestions as to specific actions we should take (for example, considering POCs to be DHS entities under certain circumstances, considering physician investors in POCs who influence hospitals as to the ordering of medical devices to have direct compensation relationships with the hospitals, excepting certain investment interests from coverage under our rules, etc.). IX. Financial Relationships Between Hospitals and Physicians A. Background As stated earlier, under section 1877 of the Act, a physician is prohibited from referring a Medicare patient for DHS to an entity (including an individual) with which the physician (or an immediate family member of the physician) has a financial relationship, unless an exception applies. In addition, section 1877 of the Act provides that an entity may not present or cause to be presented a claim or bill to Medicare or any individual, third party payor, or other entity for DHS furnished as a result of a prohibited referral. Also, section 1877 of the Act prohibits us from making payment for DHS furnished pursuant to a prohibited referral. The statute contains several exceptions for certain types of compensation arrangements and ownership or investment interests, including the exception in section 1877(d)(3) of the Act for ownership or investment by a physician in the hospital itself and not merely in a subdivision of the hospital (that is, the “whole” hospital). Section 1877(b)(4) of the Act authorizes us to create additional exceptions, provided that they do not create a risk of program or patient abuse. As a result of the statutory exceptions in section 1877 of the Act, and the exceptions we have created using our authority under section 1877(b)(4) of the Act, our regulations contain approximately 40 exceptions to the prohibition on physician self-referrals. (We refer readers to 42 CFR 411.351 through 411.357 of our regulations and the September 5, 2007 “Phase III” final rule (72 FR 51012).) Section 1877(f) of the Act provides that: “Each entity providing covered items or services for which payment may be made under this title [42 USCS 1395 et seq.] shall provide the Secretary with the information concerning the entity's ownership, investment, and compensation arrangements, 
                        *including:*
                         (1) The covered items and services provided by the entity, and (2) the names and unique physician identification numbers of all physicians with an ownership or investment interest (as described in subsection (a)(2)(A)), or with a compensation arrangement (as described in subsection (a)(2)(B)), in the entity, or whose immediate relatives have such an ownership or investment interest or who have a compensation relationship with the entity. Such information shall be provided in such form, manner, and 
                        ( print page 23696)
                        at such times as the Secretary shall specify.” (Emphasis added) Some industry representatives have argued that the reference to financial relationships as described in section 1877(a)(2)(A) and (a)(2)(B) of the Act limits our ability to obtain information on financial relationships that do not satisfy one of the statutory or regulatory exceptions. We disagree. The statute clearly contains a broad authorization for the Secretary to obtain information concerning an entity's financial relationships, “including,” but not limited to, financial relationships that satisfy an exception. We believe that there would have been little point to the Congress providing us with the authority to compel information on excepted arrangements only, because, as we have noted previously, “an entity could decide that one or more of its financial relationships falls within an exception, fail to retain data concerning those financial relationships, and thereby prevent the government from reviewing the arrangements to determine if they qualify for an exception.” (72 FR 51069.) Accordingly, our regulation in § 411.361 requires entities to report “
                        *any*
                         ownership or investment interest, as defined at § 411.354(b), or any compensation arrangement, as defined at § 411.354(c), except for ownership or investment interests that satisfy the exceptions set forth in § 411.356(a) and § 411.356(b) regarding publicly-traded securities and mutual funds” (emphasis added). The statute provides that an ownership or investment interest in the entity may be through equity, debt, or other means, and includes an interest in an entity that holds an ownership or investment interest in any entity that furnishes DHS. Our regulations have been drafted to reflect clearly our commonsense interpretation of the statutory reporting requirements. In the proposed rule entitled “Medicare and Medicaid Programs; Physicians” Referrals to Health Care Entities With Which They Have Financial Relationships,” published in the 
                        **Federal Register**
                         on January 9, 1998 (63 FR 1703), we proposed to modify § 411.361 to require that entities report information concerning their reportable financial relationships to us on a prescribed form and thereafter report annually all changes to the submitted information that occurred in the previous 12 months. In addition, we revisited the statute and interpreted the opening paragraph of section 1877(f) of the Act to permit us to gather any data on financial relationships, including, but not necessarily limited to, financial relationships for which there are no exceptions under section 1877(a)(2)(A) or (a)(2)(B) of the Act. Therefore, we proposed to amend § 411.361 to reflect explicitly our authority to ask for a broader scope of information than the regulation permitted at that time. In the Phase II final rule with comment period (69 FR 16121), we modified the reporting requirement in § 411.361 to remove all references to the use of a prescribed form, to require entities to make information available only upon request, and to maintain the information only for the length of time specified by the applicable regulatory requirements for the information (that is, the rules of the Internal Revenue Service, Securities and Exchange Commission, Medicare, Medicaid, or other programs). In addition, we modified § 411.361 to provide that entities need not report ownership or investment interests that satisfy the exceptions in § 411.356(a) and (b) for publicly-traded securities and mutual funds. Most, if not all, hospitals have financial relationships with referring physicians. These financial relationships may involve ownership or investment interests, compensation arrangements, or both. The financial relationships can be direct or they may be indirect (such as through a physician group practice or limited liability company). The physician self-referral statute was first enacted in 1989, and the reporting requirements in the regulations in § 411.361 were first implemented in our December 3, 1991 interim final rule with comment period, published in the 
                        **Federal Register**
                         at 56 FR 61374. Since that time, CMS has not engaged in a comprehensive reporting initiative to examine financial relationships between hospitals and physicians. Consistent with congressional intent in enacting the physician self-referral statute, we believe it is important to query hospitals concerning their financial relationships with physicians. B. Section 5006 of the Deficit Reduction Act (DRA) of 2005 Section 5006 of the DRA required the Secretary to develop a strategic and implementing plan to address certain issues relating to physician-owned specialty hospitals. The specific issues the Secretary was required to address were: (1) Proportionality of investment return; (2) 
                        *bona fide*
                         investment; (3) annual disclosure of investment information; (4) the provision by specialty hospitals of (i) care to patients who are eligible for Medicaid (or who are not eligible for Medicaid but who are regarded as such because they receive benefits under a section 1115 waiver) and (ii) charity care; and (5) appropriate enforcement. In order to assist us in preparing the report and implementing plan required by section 5006 of the DRA, we sent a voluntary survey to 130 specialty hospitals and 220 competitor hospitals, which sought information regarding, among other things, the hospitals' ownership and investment relationships, and their compensation arrangements with physicians. In the enforcement section of the strategic and implementing plan that was included in our “Final Report to the Congress and Strategic and Implementing Plan Required under Section 5006 of the Deficit Reduction Act of 2005” issued on August 8, 2006, available on our Web site at 
                        *http://www.cms.hhs.gov/​PhysicianSelfReferral/​06a_​DRA_​Reports.asp*
                         (hereinafter referred to as the “DRA Report to Congress”), we stated that we would require 
                        *all*
                         hospitals (that is, not just specialty hospitals) to provide us information on a periodic basis concerning the investment interests in the hospital of physicians and the hospital's compensation arrangements with physicians (DRA Report to Congress 69). We stated that we would not limit our requirement to information concerning physician investments in 
                        *specialty*
                         hospitals for two reasons. First, physician investments in any type of hospital raise potential issues concerning compensation arrangements that can be associated with the investment. For example, a disproportionate return on investment or non-
                        *bona fide*
                         investment (through, for example, a sham loan), creates a prohibited compensation arrangement under the physician self-referral law and raises the possibility of an illegal kickback scheme. Second, other types of compensation arrangements (that is, those that are not associated with an investment interest), implicate the physician self-referral law, such as leasing, employment, and personal service arangements. It is also important to note that, although a physician may be highly motivated to refer patients to a hospital in which he or she has an ownership interest, the physician may be just as likely to refer patients to a hospital with which he or she has a compensation relationship, given that the physician may see a more direct and immediate financial benefit from the compensation arrangement. In the DRA Report to Congress, we stated that we would implement a regular disclosure process, but that we had not designed 
                        ( print page 23697)
                        the process at that point, and that we would consider such issues as whether we should: (1) Survey all hospitals annually; (2) stagger our survey so that all hospitals are queried but not all in the same year; and/or (3) focus our inquiry on certain types of relationships or certain hospitals. We stated that we would also consider whether, having once provided information, hospitals need only submit updated information on a yearly or other periodic basis. C. Disclosure of Financial Relationships Report (DFRR) Following up on our commitment to capture information concerning financial relationships between all types of hospitals and physicians, and to assist in enforcement of the physician self-referral statute and implementing regulations, we created an information collection instrument, referred to as the Disclosure of Financial Relationships Report (“DFRR”). The DFRR is designed to collect information concerning the ownership and investment interests and compensation arrangements between hospitals and physicians. (Appendix C of this proposed rule contains the DFRR instrument and instructions for public comment.) We believe information submitted by hospitals would permit us to analyze the types of financial relationships involving hospitals and physicians, the structure of various compensation arrangements and trends therein, and potentially whether the hospitals are in compliance with the physician self-referral law and implementing regulations. Using our authority under section 1877(f) of the Act and 42 CFR 411.361, we are proposing to send the DFRR to 500 hospitals, a number that we believe is necessary to provide us with sufficient information: (1) To determine compliance; and (2) to assist us in any future rulemaking concerning the reporting requirements and other physician self-referral provisions. We intend for our sample size to be a significant percentage of the total number of Medicare-participating hospitals. The 2007 CMS Statistics Handbook determined that, as of December 2006, there were approximately 6,200 Medicare-participating hospitals. Our goal is to begin by sending the DFRR to 8 to 10 percent of the Medicare-participating hospitals (496 to 620 hospitals). We reviewed our available funding and determined that our resources would permit us to review data from 500 hospitals (both general acute care hospitals and specialty hospitals). As discussed further below, the DFRR also may assist us in making an informed decision as to whether to propose rulemaking for an annual (or other periodic) disclosure requirement for all hospitals. By posing a comprehensive set of questions to a significant number of hospitals, we believe that we will be informed not only as to whether we should engage in such rulemaking, but also as to what the design of the proposed information collection should look like. Originally, we had planned to pilot this information collection request in advance of rulemaking. Thus, we prepared a proposed information collection request in accordance with the Paperwork Reduction Act. We announced and sought public comment on the information collection request in a 60-day 
                        **Federal Register**
                         notice (CMS-10236) that was published on May 18, 2007 (72 FR 28056). On September 14, 2007, we published in the 
                        **Federal Register**
                         a revised information collection request in which we increased the time estimate for completing the DFRR and increased the time for submission of the DFRR from 45 days to 60 days (72 FR 52568). (For additional information, we refer the reader to 72 FR 28056 and 72 FR 52568.) In this proposed rule, we are providing a discussion of the potential burden associated with completing the DFRR, including an analysis that provides estimates of the burden for small, medium, and large hospitals. To better understand the potential burden for completing the DFRR collection, we reviewed the bed size of Medicare-participating hospitals and developed three categories of hospitals (small, medium, and large hospitals). We randomly selected 20 hospitals from each category and requested that these 60 hospitals estimate the aggregate number of hours it would take them to complete and submit the entire DFRR collection. The 33 hospitals that responded included 11 small, 11 medium, and 11 large hospitals. We reviewed the responses from the 33 hospitals and determined that the average number of hours to complete the DFRR was 31 hours. This figure represents a significant increase from our most recent time and burden estimate. Therefore, we believe it would be beneficial to seek further comments on the accuracy of the time and burden estimates associated with this information collection instrument. Because the information that we seek is that which hospitals should already be keeping in the normal course of their business activities (even apart from the need to document compliance with the physician self-referral law), we anticipate that the majority of the time spent completing the DFRR will be spent by administrative staff. We believe that the tasks involved would include retrieving the information and printing it from electronic files or copy it from hard files, which largely should involve administrative personnel. In addition, the review and organization of the materials would also impose burden on the respondent. Nevertheless, in order to err on the side of more potential burden rather than less, we have calculated costs using an hourly rate for accountants. D. Civil Monetary Penalties We are proposing that the DFRR be completed, certified by the appropriate officer of the hospital, and received by CMS within 60 days of the date that appears on the cover letter or e-mail transmission of the DFRR. We are soliciting comment on the proposed 60-day timeframe for completing the DFRR. Section 411.361(f) provides that failure to timely submit the requested information concerning an entity's ownership, investment, and compensation arrangements may result in civil monetary penalties of up to $10,000 for each day beyond the deadline established for disclosure. Although we have the authority to impose civil monetary penalties, we seek not to invoke this authority and will work with entities to comply with the reporting requirements. Prior to imposing a civil monetary penalty in any amount, we would issue a letter to any hospital that does not return the completed DFRR, inquiring as to why the hospital did not return timely the completed DFRR. In addition, a hospital may, upon a demonstration of good cause, receive an extension of time to submit the requested information. E. Uses of Information Captured by the DFRR As noted above, we anticipate that the DFRR will be useful in determining whether the financial relationships between 500 hospitals and the physicians associated with those hospitals are in compliance with the physician self-referral statute and regulations. In addition, the results of the DFRR may assist us in other rulemaking efforts. In the CY 2008 PFS proposed rule, we proposed certain changes to our physician self-referral rules (72 FR 38179 through 38187). With the exception of the anti-markup provisions, however, we have not yet finalized any of the proposals. We are actively working on the proposals, and although we expect to finalize the proposals before receiving and 
                        ( print page 23698)
                        analyzing the completed DFRRs, information gleaned from the completed DFRRs may shape our final rulemaking if that rulemaking is delayed. Our analysis of the DFRRs may affect subsequent proposals on these and other related issues. F. Solicitation of Comments We are soliciting comments on the DFRR information collection instrument through this proposed rule as follows: Whether the collection effort should be recurring, and, if so, whether it should be implemented on an annual or some other periodic basis.
                    Whether we are collecting too much or not enough information, and whether we are collecting the correct (or incorrect) type of information.
                    The amount of time it will take hospitals to complete the DFRR and the costs associated with completing the DFRR; the amount of time we should give hospitals to complete and return their responses to us.
                    Whether we should direct the collection instrument to all hospitals, and, if so, whether we should stagger the collection so that only a certain number of hospitals are subject to it in any given year.
                    Whether hospitals, once having completed the DFRR, should have to send in yearly updates and report only changed information. X. MedPAC Recommendations We are required by section 1886(e)(4)(B) of the Act to respond to MedPAC's recommendations regarding hospital inpatient payments in our annual proposed and final IPPS rules. We have reviewed MedPAC's March 2008 “Report to the Congress: Medicare Payment Policy” and have given it careful consideration in conjunction with the proposed policies set forth in this document. MedPAC's Recommendation 2A-1 states that “The Congress should increase payment rates for the acute inpatient and outpatient prospective payment systems in 2009 by the projected rate of increase in the hospital market basket index, concurrent with implementation of a quality incentive payment program.” This recommendation is discussed in Appendix B to this proposed rule. *Recommendation 2A-2:*
                         MedPAC recommended that “The Congress should reduce the indirect medical education adjustment in 2009 by 1 percentage point to 4.5 percent per 10 percent increment in the resident-to-bed ratio. The funds obtained by reducing the indirect medical education adjustment should be used to fund a quality incentive payment program.” *Response:*
                         Redirecting funds obtained by reducing the IME adjustment to fund a quality incentive payment program is consistent with the VBP initiatives to improve the quality of care and, therefore, merits consideration. However, section 502(a) of Pub. L. 108-173 modified the formula multiplier (c) to be used in the calculation of the IME adjustment beginning midway through FY 2004 and provided for a new schedule of formula multipliers for FYs 2005 and thereafter. Consequently, CMS could not implement MedPAC's recommendation to reduce the IME adjustment in 2009 without a statutory change. We note that included in the President's FY 2009 budget proposal was a proposal to reduce the IME adjustment from 5.5 percent to 2.2 percent over 3 years, starting in FY 2009, in order to better align IME payments with the estimated costs per case that teaching hospitals may face. In its June 2007 “Report to Congress: Promoting Greater Efficiency in Medicare,” MedPAC made recommendations concerning the Medicare hospital wage index. Section 106(b)(1) of the MIEA-TRHCA (Pub. L. 109-432) required MedPAC to submit to Congress, not later than June 30, 2007, a report on the Medicare hospital wage index classification system applied under the Medicare IPPS, including any alternatives that MedPAC recommended to the method to compute the wage index under section 1886(d)(3)(E) of the Act. In addition, section 106(b)(2) of the MIEA-TRHCA instructed the Secretary taking into account MedPAC's recommendations on the Medicare hospital wage index classification system, to include in this FY 2009 IPPS proposed rule one or more proposals to revise the wage index adjustment applied under section 1886(d)(3)(E) of the Act for purposes of the IPPS. The MedPAC recommendations and our proposals concerning the Medicare hospital wage index are discussed in section III.B. of the preamble of this proposed rule. For further information relating specifically to the MedPAC reports or to obtain a copy of the reports, contact MedPAC at (202) 653-7220, or visit MedPAC's Web site at: 
                        *http://www.medpac.gov.* XI. Other Required Information A. Requests for Data From the Public In order to respond promptly to public requests for data related to the prospective payment system, we have established a process under which commenters can gain access to raw data on an expedited basis. Generally, the data are available in computer tape or cartridge format. However, some files are available on diskette as well as on the Internet at: 
                        *http://www.cms.hhs.gov/​providers/​hipps.*
                         Data files and the cost for each file, if applicable, are listed below. Anyone wishing to purchase data tapes, cartridges, or diskettes should submit a written request along with a company check or money order (payable to CMS-PUF) to cover the cost to the following address: Centers for Medicare & Medicaid Services, Public Use Files, Accounting Division, P.O. Box 7520, Baltimore, MD 21207-0520, (410)-786-3691. Files on the Internet may be downloaded without charge. 1. CMS Wage Data This file contains the hospital hours and salaries for FY 2005 used to create the proposed FY 2009 prospective payment system wage index. The file is currently available for the NPRM and will be available by the beginning of May for the final rule. Processing year
Wage data year
PPS fiscal year2008
2005
20092007
2004
20082006
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20072005
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20062004
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20052003
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20042002
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20032001
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20022000
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20001998
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19981996
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19961994
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19951993
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19941992
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19931991
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 These files support the following: Notice of proposed rulemaking published in the**Federal Register**
                        .
                    Final rule published in the**Federal Register**
                        . *Media:*
                         Diskette/most recent year on the Internet. *File Cost:*
                         $165.00 per year. *Periods Available:*
                         FY 2009 PPS Update. 2. CMS Hospital Wages Indices (Formerly: Urban and Rural Wage Index Values Only) This file contains a history of all wage indices since October 1, 1983. *Media:*
                         Diskette/most recent year on the Internet. *File Cost:*
                         $165.00 per year. *Periods Available:*
                         FY 2009 PPS Update. 
                        ( print page 23699) 3. FY 2009 Proposed Rule Occupational Mix Adjusted and Unadjusted AHW by Provider This file includes each hospital's adjusted and unadjusted average hourly wage. *Media:*
                         Internet. *Periods Available:*
                         FY 2009 PPS Update. 4. FY 2009 Proposed Rule Occupational Mix Adjusted and Unadjusted AHW and Pre-Reclassified Wage Index by CBSA This file includes each CBSA's adjusted and unadjusted average hourly wage. *Media:*
                         Internet. *Periods Available:*
                         FY 2009 PPS Update. 5. Provider Occupational Mix Adjustment Factors for Each Occupational Category This file contains each hospital's occupational mix adjustment factors by occupational category. *Media:*
                         Internet. *Periods Available:*
                         FY 2009 PPS Update. 6. PPS SSA/FIPS MSA State and County Crosswalk This file contains a crosswalk of State and county codes used by the Social Security Administration (SSA) and the Federal Information Processing Standards (FIPS), county name, and a historical list of Metropolitan Statistical Areas (MSAs). *Media:*
                         Diskette/Internet. *File Cost:*
                         $165.00 per year. *Periods Available:*
                         FY 2009 PPS Update. 7. Reclassified Hospitals New Wage Index (Formerly: Reclassified Hospitals by Provider Only) This file contains a list of hospitals that were reclassified for the purpose of assigning a new wage index. Two versions of these files are created each year. They support the following: Notice of proposed rulemaking published in the**Federal Register**
                        .
                    Final rule published in the**Federal Register**
                        . *Media:*
                         Diskette/Internet. *File Cost:*
                         $165.00 per year. *Periods Available:*
                         FY 2009 PPS Update. 8. PPS-IV to PPS-XII Minimum Data Set The Minimum Data Set contains cost, statistical, financial, and other information from Medicare hospital cost reports. The data set includes only the most current cost report (as submitted, final settled, or reopened) submitted for a Medicare participating hospital by the Medicare fiscal intermediary to CMS. This data set is updated at the end of each calendar quarter and is available on the last day of the following month. *Media:*
                         Tape/Cartridge. *File Cost:*
                         $770.00 per year. Periods 
                                 beginning  
                                 on or after
and beforePPS-IV
10/01/86
10/01/87PPS-V
10/01/87
10/01/88PPS-VI
10/01/88
10/01/89PPS-VII
10/01/89
10/01/90PPS-VIII
10/01/90
10/01/91PPS-IX
10/01/91
10/01/92PPS-X
10/01/92
10/01/93PPS-XI
10/01/93
10/01/94PPS-XII
10/01/94
10/01/95(
                            **Note:**
                             The PPS-XIII, PPS-XIV, PPS-XV, PPS-XVI, PPS-XVII, PPS-XVIII, PPS-XIX PPS-XX, PPS-XXI, PPS-XXII, and PPS-XXIII Minimum Data Sets are part of the PPS-XIII, PPS-XIV, PPS-XV, PPS-XVI, PPS-XVII, PPS-XVIII, PPS-XIX, PPS-XX, PPS-XXI, PPS-XXII, and PPS-XXIII Hospital Data Set Files (refer to item 10 below).)
 9. PPS-IX to PPS-XII Capital Data Set The Capital Data Set contains selected data for capital-related costs, interest expense and related information and complete balance sheet data from the Medicare hospital cost report. The data set includes only the most current cost report (as submitted, final settled or reopened) submitted for a Medicare certified hospital by the Medicare fiscal intermediary to CMS. This data set is updated at the end of each calendar quarter and is available on the last day of the following month. *Media:*
                         Tape/Cartridge. *File Cost:*
                         $770.00 per year. Periods
                                 beginning 
                                 on or after
and beforePPS-IX
10/01/91
10/01/92PPS-X
10/01/92
10/01/93PPS-XI
10/01/93
10/01/94PPS-XII
10/01/94
10/01/95
 (Note: The PPS-XIII, PPS-XIV, PPS-XV, PPS-XVI, PPS-XVII, PPS-XVIII, PPS-XIX PPS-XX, PPS-XXI, PPS-XXII, and PPS-XXIII Capital Data Sets are part of the PPS-XIII, PPS-XIV, PPS-XV, PPS-XVI, PPS-XVII, PPS-XVIII, PPS-XIX, PPS-XX, PPS-XXI, PPS-XXII, and PPS-XXIII Hospital Data Set Files (refer to item 10 below).) 10. PPS-XIII to PPS-XXIII Hospital Data Set The file contains cost, statistical, financial, and other data from the Medicare Hospital Cost Report. The data set includes only the most current cost report (as submitted, final settled, or reopened) submitted for a Medicare-certified hospital by the Medicare fiscal intermediary to CMS. The data set is updated at the end of each calendar quarter and is available on the last day of the following month. *Media:*
                         Diskette/Internet. *File Cost:*
                         $2,500.00. Periods 
                                 beginning on or after
and beforePPS-XIII
10/01/95
10/01/96PPS-XIV
10/01/96
10/01/97PPS-XV
10/01/97
10/01/98PPS-XVI
10/01/98
10/01/99PPS-XVII
10/01/99
10/01/00PPS-XVIII
10/01/00
10/01/01PPS-XIX
10/01/01
10/01/02PPS-XX
10/01/02
10/01/03PPS-XXI
10/01/03
10/01/04PPS-XXII
10/01/04
10/01/05PPS-XXIII
10/01/05
10/01/06
 11. Provider-Specific File This file is a component of the PRICER program used in the fiscal intermediary's or the MAC's system to compute DRG payments for individual bills. The file contains records for all prospective payment system eligible hospitals, including hospitals in waiver States, and data elements used in the prospective payment system recalibration processes and related activities. Beginning with December 1988, the individual records were enlarged to include pass-through per diems and other elements. *Media:*
                         Diskette/Internet. *File Cost:*
                         $265.00. *Periods Available:*
                         FY 2009 PPS Update. 12. CMS Medicare Case-Mix Index File This file contains the Medicare case-mix index by provider number as published in each year's update of the Medicare hospital inpatient prospective payment system. The case-mix index is a measure of the costliness of cases treated by a hospital relative to the cost of the national average of all Medicare hospital cases, using DRG weights as a measure of relative costliness of cases. Two versions of this file are created each year. They support the following: Notice of proposed rulemaking published in the**Federal Register**
                        .
                    Final rule published in the**Federal Register**
                        . *Media:*
                         Diskette/most recent year on Internet. *Price:*
                         $165.00 per year/per file. *Periods Available:*
                         FY 1985 through FY 2009. 
                        ( print page 23700) 13. MS-DRG Relative Weights (Formerly Table 5 DRG) This file contains a listing of MS-DRGs, MS-DRG narrative descriptions, relative weights, and geometric and arithmetic mean lengths of stay as published in the 
                        **Federal Register**
                        . The hard copy image has been copied to diskette. There are two versions of this file as published in the 
                        **Federal Register:** Notice of proposed rulemaking.
                    Final rule. *Media:*
                         Diskette/Internet. *File Cost:*
                         $165.00. *Periods Available:*
                         FY 2009 PPS Update. 14. PPS Payment Impact File This file contains data used to estimate payments under Medicare's hospital inpatient prospective payment systems for operating and capital-related costs. The data are taken from various sources, including the Provider-Specific File, Minimum Data Sets, and prior impact files. The data set is abstracted from an internal file used for the impact analysis of the changes to the prospective payment systems published in the 
                        **Federal Register**
                        . This file is available for release 1 month after the proposed and final rules are published in the 
                        **Federal Register**
                        . *Media:*
                         Diskette/Internet. *File Cost:*
                         $165.00. *Periods Available:*
                         FY 2009 PPS Update. 15. AOR/BOR Tables This file contains data used to develop the MS-DRG relative weights. It contains mean, maximum, minimum, standard deviation, and coefficient of variation statistics by MS-DRG for length of stay and standardized charges. The BOR tables are “Before Outliers Removed” and the AOR is “After Outliers Removed.” (Outliers refer to statistical outliers, not payment outliers.) Two versions of this file are created each year. They support the following: Notice of proposed rulemaking published in the**Federal Register**
                        .
                    Final rule published in the**Federal Register**
                        . *Media:*
                         Diskette/Internet. *File Cost:*
                         $165.00. *Periods Available:*
                         FY 2009 PPS Update. 16. Prospective Payment System (PPS) Standardizing File This file contains information that standardizes the charges used to calculate relative weights to determine payments under the prospective payment system. Variables include wage index, cost-of-living adjustment (COLA), case-mix index, disproportionate share, and the Metropolitan Statistical Area (MSA). The file supports the following: Notice of proposed rulemaking published in the**Federal Register**
                        .
                    Final rule published in the**Federal Register**
                        . *Media:*
                         Internet. *File Cost:*
                         No charge. *Periods Available:*
                         FY 2009 PPS Update. For further information concerning these data tapes, contact the CMS Public Use Files Hotline at (410) 786-3691. Commenters interested in discussing any data used in constructing this proposed rule should contact Nisha Bhat at (410) 786-5320. B. Collection of Information Requirements 1. Legislative Requirement for Solicitation of Comments Under the Paperwork Reduction Act of 1995, we are required to provide 60-day notice in the 
                        **Federal Register**
                         and solicit public comment before a collection of information requirement is submitted to the Office of Management and Budget (OMB) for review and approval. In order to fairly evaluate whether an information collection should be approved by OMB, section 3506(c)(2)(A) of the Paperwork Reduction Act of 1995 requires that we solicit comment on the following issues: The need for the information collection and its usefulness in carrying out the proper functions of our agency.
                    The accuracy of our estimate of the information collection burden.
                    The quality, utility, and clarity of the information to be collected.
                    Recommendations to minimize the information collection burden on the affected public, including automated collection techniques. 2. Solicitation of Comments on Proposed Requirements in Regulatory Text We are soliciting public comment on each of the issues listed under section XI.B.1. of this preamble for the following sections of this document that contain information collection requirements (ICRs): a. ICRs Regarding Physician Reporting Requirements (§ 411.361) Section 411.361(a) of the regulations states that except for entities that furnish 20 or fewer Part A and Part B services during a calendar year or for Medicare covered services furnished outside the United States, all entities furnishing services for which payment may be made under Medicare must submit information to CMS or to the Office of the Inspector General (OIG) concerning their reportable financial relationships (any ownership or investment interest, or compensation arrangement) in the form, manner, and at times that CMS or OIG specifies. As described in section IX. of the preamble of this proposed rule, and in accordance with its authority under 42 CFR 411.361(e), CMS is requiring that hospitals provide information concerning their ownership, investment and compensation arrangements with physicians by completing the DFRR instrument. An information collection request concerning the DFRR was previously submitted to OMB for approval. We announced and sought public comment on the information collection request in both 60-day and 30-day 
                        **Federal Register**
                         notices that published on May 18, 2007 (72 FR 28056), and September 14, 2007 (72 FR 52568), respectively. As further discussed in section IX. of this preamble, we have decided to obtain additional input from the public concerning the time and cost burden associated with completing and submitting the DFRR instrument. (The instrument is included as Appendix C to this proposed rule.) We believe that hospital accounting personnel would be responsible for: (1) Ensuring that the appropriate data or supporting documentation is retrieved; (2) completing the DFRR; and (3) submitting the DFRR to the Chief Executive Officer, Chief Financial Officer, or comparable officer of the hospital for his or her signature on the certification statement. Initially, CMS would require 500 hospitals to complete and submit the DFRR instrument. We estimate that these tasks would require 31 hours for each of the 500 hospitals to complete the DFRR. Thus, the total number of burden hours required for 500 hospitals to complete the DFRR instrument is 15,500 hours. b. ICRs Regarding Risk Adjustment Data (§ 422.310) As discussed in section IV.H. of the preamble of this proposed rule, § 422.310(b) states that each MA organization must submit to CMS (in accordance with CMS instructions) the data necessary to characterize the context and purposes of each item and service provided to a Medicare enrollee by a provider, supplier, physician, or other practitioner. In addition, § 422.310(b) states that CMS may collect data necessary to characterize the functional limitations of enrollees of 
                        ( print page 23701)
                        each MA organization. Section 422.310(c) lists the nature of the data elements to be submitted to CMS. The burden associated with these requirements is the time and effort necessary for the MA organization to submit the necessary data to CMS. These requirements are subject to the PRA and the associated burden is currently approved under OMB control number 0938-0878. However, under notice and comment periods separate from this proposed rule, we intend to revise the currently approved information collection to include burden estimates as they pertain to § 422.310. The preliminary burden estimate for this proposed rule is as follows: Currently, there are 676 MA organizations. Assuming that 99 percent of encounter data claims are submitted electronically and 1 percent are submitted manually, we estimate that it will take 1,089 hours annually for submission of electronic claims and 73,335 hours annually for submission of manual claims. The estimated annual burden associated with these requirements is an annual average of 110 hours per MA organization. c. ICRs Regarding Basic Commitments of Providers (§ 489.20) As discussed in section IV.I. of the preamble of this proposed rule, proposed § 489.20(r)(2) states that a hospital, as defined in § 489.24(b), must maintain an on-call list of physicians on its medical staff to provide treatment necessary to stabilize patients who are receiving services required under § 489.24 in accordance with the resources available to the hospital. The burden associated with this requirement is the time and effort necessary to draft, maintain, and periodically update the list of on-call physicians. We estimate that it will take 3 hours for each of the 100 Medicare-participating hospitals to comply with this recordkeeping requirement. The estimated annual burden associated with this requirement is 300 hours. As discussed in section VII. of the preamble of this proposed rule, proposed § 489.20(u)(1) states that, in the case of a physician-owned hospital as defined in § 489.3, the hospital must furnish written notice to all patients at the beginning of their hospital stay or outpatient visit that the hospital is a physician-owned facility. In addition, patients must be advised that a list of the hospital's owners or investors who are physicians (or immediate family members of physicians) is available upon request. Upon receiving the request of the patient or an individual on behalf of the patient, a hospital must immediately disseminate the list to the requesting patient. The burden associated with the requirements in this section is the time and effort necessary for a hospital to furnish written notice to all patients that the hospital is a physician-owned hospital. Whereas this requirement is subject to the PRA, the associated burden is currently approved under OMB control number 0938-1034, with an expiration date of February 28, 2011. In addition, there is burden associated with furnishing a patient with the list of the hospital's owners or investors who are physicians (or immediate family members of physicians) at the time of the patient request. However, CMS has no way to accurately quantify the burden because we cannot estimate the number of this type of request that a hospital may receive. We are soliciting public comments on the annual number of requests a hospital may receive for lists of physician-owners and investors, and will reevaluate this issue in the final rule stage of rulemaking. Proposed § 489.20(u)(2) would require disclosure of physician ownership as a condition of continued medical staff membership or admitting privileges. The burden associated with this requirement is the time and effort required for a hospital to develop, draft, and implement changes to its medical staff bylaws and other policies governing admitting privileges. Approximately 175 physician-owned hospitals would be required to comply with this requirement. We estimate that it will require a hospital's general counsel 4 hours to revise a hospital's medical staff bylaws and policies governing admitting privileges. Therefore, the total annual hospital burden would be 700 hours. In addition, the proposed § 489.20(u)(2) imposes a burden on physicians. As stated earlier, all physicians who are also members of the hospital's medical staff must agree, as a condition of continued medical staff membership or admitting privileges, to disclose, in writing, to all patients they refer to the hospital any ownership or investment interest in the hospital held by themselves or by an immediate family member. The disclosure must be made at the time the referral is made. The burden associated with this requirement is the time and effort necessary for a physician to draft a disclosure and to provide it to the patient at the time the referral is made to the physician-owned hospital. We estimate that it will take each physician, or designated office staff member, 1 hour to develop a disclosure notice and make copies that will be distributed to patients. In addition, we estimate 30 seconds to provide the disclosure to each patient and an additional 30 seconds to record the proof of disclosure into each patient's medical record. Although we can estimate the number of physician-owned hospitals, we are unable to quantify the number of physicians that possess an ownership or investment interest in hospitals. There is limited data available concerning physician ownership in hospitals. The studies to date, including those by CMS and the Government Accountability Office, pertain to physician ownership in specialty hospitals (cardiac, orthopedic, and surgical hospitals). These specialty hospital studies published data concerning the average percentage of shares of direct ownership by physicians (less than 2 percent), indirect ownership through group practices, and the aggregate percentage of physician ownership, but did not publish the number of physician owners in these types of hospitals. More importantly, proposed § 489.20(u)(2) would apply to physician ownership in any type of hospital. Our other research involved a review of enrollment data. However, the CMS enrollment application (CMS-855) requires the reporting of ownership interests that exceed 5 percent or greater, and, thus, most physician ownership is not captured. In summary, because we are unable to estimate the total physician burden associated with this reporting requirement, we are seeking public comment pertaining to this burden and will reevaluate this issue in the final rule stage of rulemaking. Proposed § 489.20(v) states that the aforementioned requirements in § 489.20(u)(1) and (u)(2) do not apply to a physician-owned hospital that does not have at least one referring physician who has an ownership or investment interest in the hospital or who has an immediate family member who has an ownership or investment interest in the hospital. To comply with this exception, an eligible hospital must sign an attestation to that effect and maintain the document in its records. Therefore, the number of hospitals that are now subject to the disclosure requirement would be slightly reduced. However, there may be a minimal burden attributable to the proposed requirement that the hospital maintain an attestation statement in its records. The burden associated with this requirement will be limited to those physician-owned hospitals that do not have at least one referring physician who has an ownership or investment interest in the hospital or who has an immediate family member who has an 
                        ( print page 23702)
                        ownership or investment interest in the hospital. The burden would include the time and effort for these hospitals to develop, sign, and maintain the attestations in their records. We estimate that 10 percent, or approximately 18, of the estimated 175 physician-owned hospitals would be subject to this requirement. We estimate that it would take each of these physician-owned hospitals an average of 1 hour to develop, sign, and maintain the attestation in its records. The estimated annual burden associated with this requirement is 18 hours. However, because we have no way of knowing for certain the number of physician-owned hospitals that do not have at least one referring physician who has an ownership or investment interest in the hospital or who has an immediate family member who has an ownership or investment interest in the hospital, we are requesting public comment regarding the accuracy of our estimate and the associated burden with the attestation requirement. Section 489.20(w) requires all hospitals, as defined in § 489.24(b), to furnish all patients notice, in accordance with § 482.13(b)(2), at the beginning of their hospital stay or outpatient visit if a doctor of medicine or a doctor of osteopathy is not present in the hospital 24 hours per day, 7 days per week. The notice must indicate how the hospital will meet the medical needs of any inpatient who develops an emergency medical condition, as defined in § 489.24(b), at a time when there is no physician present in the hospital. The burden associated with this requirement is the time and effort necessary for each hospital to develop a standard notice to furnish to its patients. Whereas this requirement is subject to the PRA, the associated burden is approved under OMB control number 0938-1034 with a current expiration date of February 28, 2011. Estimated Annual Reporting and Recordkeeping Burden
Regulation
                                 section(s)
OMB
                                 control 
                                 No.
Respondents
Responses
Burden per
                                 response 
                                 (hours)
Total
                                 annual 
                                 burden 
                                 (hours)§ 411.361
0938-New
500
500
31
15,500§ 422.310(b)
0938-0878
676
676
110
* 74,424§ 489.20(r)
0938-New
100
100
3
300§ 489.20(u)(1) and (w)
0938-1034
2,679
49,735,635
**
839,599§ 489.20(u)(2)
0938-New
175
175
4
700§ 489.20(v)
0938-New
18
18
1
18Total




930,541* Burden estimate is based on proposed revisions to the currently approved OMB control number.** There are multiple requirements associated with the regulation section approved under this OMB control number. There is no uniform estimate of the burden per response.
 3. Associated Information Collections Not Specified in Regulatory Text This proposed rule imposes collection of information requirements as outlined in the regulation text and specified above. However, this proposed rule also makes reference to several associated information collections that are not discussed in the regulation text. The following is a discussion of these collections, which have already received OMB approval. a. Present on Admission (POA) Indicator Reporting Section II.F.8 of the preamble of this proposed rule discusses the present on admission indicator (POA) reporting requirements. As stated earlier, POA indicator information is necessary to identify which conditions were acquired during hospitalization for the hospital-acquired condition (HAC) payment provision and for broader public health uses of Medicare data. Through Change Request No. 5499 (released May 11, 2007), CMS issued instructions requiring IPPS hospitals to submit the POA indicator data for all diagnosis codes on Medicare claims. The burden associated with this requirement is the time and effort necessary to place the appropriate POA codes on Medicare claims. While the requirement is subject to the PRA; the associated burden is approved under 0938-0997 with an expiration date of August 31, 2009. b. Proposed Add-On Payments for New Services and Technologies Section II.J. of the preamble of this proposed rule discusses proposed add-on payments for new services and technologies. Specifically, this section states that applicants for add-on payments for new medical services or technologies for FY 2010 must submit a formal request. A formal request includes a full description of the clinical applications of the medical service or technology and the results of any clinical evaluations demonstrating that the new medical service or technology represents a substantial clinical improvement. In addition, the request must contain a significant sample of the data to demonstrate that the medical service or technology meets the high-cost threshold. We detailed the burden associated with this requirement in a final rule published in the 
                        **Federal Register**
                         on September 7, 2001 (66 FR 46902). As stated in that final rule, we believe the associated burden is exempt from the PRA as stipulated under 5 CFR 1320.3(h)(6). Collection of the information for this requirement will be conducted on an individual case-by-case basis. c. Reporting of Hospital Quality Data for Annual Hospital Payment Update As noted in section IV.B. of the preamble of this proposed rule, the RHQDAPU program was originally established to implement section 501(b) of Pub. L. 108-173, thereby expanding our voluntary Hospital Quality Initiative. The RHQDAPU program originally consisted of a “starter set” of 10 quality measures. OMB approved the collection of data associated with the original starter set of quality measures under OMB control number 0938-0918, with a current expiration date of January 31, 2010. We added additional quality measures to the RHQDAPU program and submitted the information collection request to OMB for approval. This expansion of the RHQDAPU measures was part of our implementation of section 5001(a) of the DRA. Section 1886(b)(3)(B)(viii)(III) of the Act, added 
                        ( print page 23703)
                        by section 5001(a) of the DRA, requires that the Secretary expand the “starter set” of 10 quality measures that were established by the Secretary as of November 1, 2003, to include measures “that the Secretary determines to be appropriate for the measurement of the quality of care furnished by hospitals in inpatient settings.” The burden associated with these reporting requirements is currently approved under OMB control number 0938-1022 with a current expiration date of December 31, 2008. However, for FY 2009, we submitted to OMB for approval a revised information collection request using the same OMB control number (0938-1022). In the revised request, we proposed to add three new RHQDAPU quality measures that we adopted for the FY 2009 RHADAPU program to the PRA process. These three measures are as follows: Pneumonia 30-day Mortality (Medicare patients);
                    SCIP Infection 4: Cardiac Surgery Patients with Controlled 6AM Postoperative Serum Glucose; and
                    SCIP Infection 6: Surgery Patients with Appropriate Hair Removal. The revised information collection request was announced in the 
                        **Federal Register**
                         via an emergency notice on January 28, 2008 (73 FR 4868). The information collection request is currently under review by OMB. Once approved, we will submit another revision of the information collection request to obtain approval for the new measures contained in this proposed rule. Section IV.B.5. of the preamble of this proposed rule also discusses the requirements for the continuous collection of HCAHPS quality data. The HCAHPS survey is designed to produce comparable data on the patient's perspective on care that allows objective and meaningful comparisons between hospitals on domains that are important to consumers. We also added the HCAHPS survey to the PRA process in the information collection request currently approved under OMB control number 0938-1022 with a current expiration date of December 31, 2008. Section IV.B.9. of the preamble of this proposed rule addresses the reconsideration and appeal procedures for a hospital that we believe did not meet the RHQDAPU program requirements. If a hospital disagrees with our determination, it may submit a written request to us requesting that we reconsider our decision. The hospital's letter must explain the reasons it believes it did meet the RHQDAPU program requirements. While this is a reporting requirement, the burden associated with it is not subject to the PRA under 5 CFR 1320.4(a)(2). The burden associated with information collection requirements imposed subsequent to an administrative action is not subject to the PRA. d. Occupational Mix Adjustment to the FY 2009 Index (Hospital Wage Index Occupational Mix Survey) Section III. of the preamble of this proposed rule details the proposed changes to the hospital wage index. Specifically, section III.D. addresses the proposed occupational mix adjustment to the proposed FY 2009 index. While the preamble does not contain any new information collection requirements, it is important to note that there is an OMB approved collection associated with the hospital wage index. Section 304(c) of Pub. L. 106-554 amended section 1886(d)(3)(E) of the Act to require CMS to collect data at least once every 3 years on the occupational mix of employees for each short-term, acute care hospital participating in the Medicare program, in order to construct an occupational mix adjustment to the wage index. We collect the data via the occupational mix survey. The burden associated with this information collection request is the time and effort required to collect and submit the data in the Hospital Wage Index Occupational Mix Survey to CMS. While this burden is subject to the PRA, it is already approved under OMB control number 0938-0907, with an expiration date of February 28, 2011. 4. Addresses for Submittal of Comments on Information Collection Requirements If you comment on these information collection and recordkeeping requirements, please do either of the following: 1. Submit your comments electronically as specified in the 
                        **ADDRESSES**
                         section of this proposed rule; or 2. Mail copies to the address specified in the 
                        **ADDRESSES**
                         section of this proposed rule and to— Office of Information and Regulatory Affairs, Office of Management and Budget, Room 10235, New Executive Office Building, Washington, DC 20503, Attn: Carolyn L. Raffaelli, CMS Desk Officer, CMS-1390-P; E-mail: 
                        *Carolyn_L._Raffaelli@omb.eop.gov.*
                         Fax (202) 395-6974. C. Response to Comments Because of the large number of public comments we normally receive on 
                        **Federal Register**
                         documents, we are not able to acknowledge or respond to them individually. We will consider all comments we receive by the date and time specified in the 
                        **DATES**
                         section of this preamble, and, when we proceed with a subsequent document, we will respond to the comments in the preamble to that document. List of Subjects 42 CFR Part 411 Kidney diseases
Medicare
Physician referral
Reporting and recordkeeping requirements 42 CFR Part 412 Administrative practice and procedure
Health facilities
Medicare
Puerto Rico
Reporting and recordkeeping requirements 42 CFR Part 413 Health facilities
Kidney diseases
Medicare
Puerto Rico
Reporting and recordkeeping requirements 42 CFR Part 422 Administrative practice and procedure
Grant programs—health
Health care
Health insurance
Health maintenance organizations (HMO)
Loan programs—health
Medicare
Reporting and recordkeeping requirements 42 CFR Part 489 Health facilities
Medicare
Reporting and recordkeeping requirements
 For the reasons stated in the preamble of this proposed rule, the Centers for Medicare & Medicaid Services is proposing to amend 42 CFR Chapter IV as follows: PART 411—EXCLUSIONS FROM MEDICARE AND LIMITATIONS ON MEDICARE PAYMENT 1. The authority citation for part 411 continues to read as follows: Authority:
                            Secs. 1102, 1860D-1 through 1860D-42, 1871, and 1877 of the Social Security Act (42 U.S.C. 1302, 1395w-101 through 1395w-152, 1395hh, and 1395nn). 2. Section 411.351 is amended by— a. Revising the definition of “physician”. b. Revising the definition of “physician organization”. The revisions read as follows: § 411.351
  
 *Physician*
                                 means a doctor of medicine or osteopathy, a doctor of dental surgery or dental medicine, a doctor of podiatric medicine, a doctor of optometry, or a chiropractor, as defined in section 1861(r) of the Act. A physician and the 
                                ( print page 23704)
                                professional corporation of which he or she is a sole owner are the same for purposes of this subpart. 
 *Physician organization*
                                 means a physician, a physician practice, or a group practice that complies with the requirements of § 411.352. 
 3. Section 411.353 is amended by revising paragraph (c) to read as follows:
 § 411.353
  
 (c) 
                                *Denial of payment.*
                                 Except as provided in paragraph (e) of this section, no Medicare payment may be made for a designated health service that is furnished pursuant to a prohibited referral. The period during which referrals are prohibited is the period of disallowance. For purposes of this section, with respect to the following types of noncompliance, the period of disallowance begins at the time the financial relationship fails to satisfy the requirements of an applicable exception and ends no later than— (1) Where the noncompliance is unrelated to compensation, the date that the financial relationship satisfies all of the requirements of an applicable exception; (2) Where the noncompliance is due to the payment of excess compensation, the date on which the excess compensation is returned to the party that paid it and the financial relationship satisfies all of the requirements of an applicable exception; or (3) Where the noncompliance is due to the payment of compensation that is of an amount insufficient to satisfy the requirements of an applicable exception, the date on which the additional required compensation is paid to the party to which it is owed such that the financial relationship would satisfy all of the requirements of the exception as of its date of inception. 
 4. Section 411.354 is amended by— a. Adding a new paragraph (a)(1)(iii). b. Revising paragraph (c)(2)(iv). c. Revising paragraph (c)(3)(ii). The addition and revisions read as follows:
 § 411.354
  (a) * * * (1) * * * (iii) For purposes of paragraph (c) of this section, an entity that furnishes DHS is deemed to stand in the shoes of an organization in which it has a 100 percent ownership interest. 
 (c) * * * (2) * * * (iv) For purposes of paragraph (c)(2)(i) of this section, a physician is deemed to “stand in the shoes” of his or her physician organization unless the total compensation from the physician organization to the physician satisfies the requirements of § 411.357(c), (d), or (l). (3) * * * (ii) The provisions of paragraphs (c)(1)(ii) and (c)(2)(iv) of this section— (A) Need not apply during the original term or current renewal term of an arrangement that satisfied the requirements of § 411.357(p) as of September 5, 2007 (42 CFR parts 400-413, revised as of October 1, 2007); (B) Do not apply to an arrangement that satisfies the requirements of § 411.355(e); and (C) Do not apply with respect to an arrangement between a physician organization and a component of an academic medical center listed in § 411.355(e)(2) for the provision to that academic medical center of only services required to satisfy the academic medical center's obligations under the Medicare graduate medical education (GME) rules in part 413, subpart F of this chapter.
 PART 412—PROSPECTIVE PAYMENT SYSTEMS FOR INPATIENT HOSPITAL SERVICES 5. The authority citation for part 412 continues to read as follows: Authority:
                            Secs. 1102 and 1871 of the Social Security Act (42 U.S.C. 1302 and 1395hh), and sec. 124 of Pub. L. 106-113 (113 Stat. 1501A-332). 6. Section 412.4 is amended by revising paragraph (c)(3) to read as follows: § 412.4
  
 (c) * * * (3) To home under a written plan of care for the provision of home health services from a home health agency and those services begin— (i) Effective for fiscal years prior to FY 2009, within 3 days after the date of discharge; and (ii) Effective FY 2009, within 7 days after the date of discharge. 
 7. Section 412.22 is amended by— a. In the introductory text of paragraph (e), removing the phrase “paragraph (f) of this section” and adding in its place “paragraphs (e)(1) (vi) and (f) of this section”. b. Adding a new paragraph (e)(1)(vi). The addition reads as follows:
 § 412.22
  
 (e) * * * (1) * * * (vi) Effective October 1, 2008, if a State hospital that is occupying space in the same building or on the same campus as another State hospital cannot meet the criterion under paragraph (e)(1)(i) of this section solely because its governing body is under the control of the State hospital with which it shares a building or a campus, or is under the control of a third entity that also controls the State hospital with which it shares a building or a campus, the State hospital can nevertheless qualify for an exclusion if it meets the other applicable criteria in this section and— (A) Both State hospitals occupy space in the same building or on the same campus and have been continuously owned and operated by the State since October 1, 1995; (B) Is required by State law to be subject to the governing authority of the State hospital with which it shares space or the governing authority of a third entity that controls both hospitals; and (C) Was excluded from the inpatient prospective payment system before October 1, 1995, and continues to be excluded from the inpatient prospective payment system through September 30, 2008. 
 8. Section 412.64 is amended by— a. Republishing the introductory text of paragraph (b)(1)(ii) and revising paragraph (b)(1)(ii)(A). b. In the introductory text of paragraph (h)(4), removing the date “September 30, 2008” and adding in its place “September 30, 2011”. The revision reads as follows:
 § 412.64
  
 (b) * * * (1) * * * (ii) The term 
                                *urban area*
                                 means— (A) A Metropolitan Statistical Area or a Metropolitan division (in the case where a Metropolitan Statistical Area is divided into Metropolitan Divisions), as defined by the Executive Office of Management and Budget; or 
 9. Section 412.87 is amended by— 
                                ( print page 23705) a. Revising paragraph (b)(1). b. Adding a new paragraph (c). The revision and addition read as follows:
 § 412.87
  
 (b) * * * (1) A new medical service or technology represents an advance that substantially improves, relating to technologies previously available, the diagnosis or treatment of Medicare beneficiaries. 
 (c) 
                                *Announcement of determinations and deadline for consideration of new medical service or technology applications.*
                                 CMS will consider whether a new medical service or technology meets the eligibility criteria specified in paragraph (b) of this section and announce the results in the 
                                **Federal Register**
                                 as part of its annual updates and changes to the IPPS. CMS will only consider, for add-on payments for a particular fiscal year, an application for which the new medical service or technology has received FDA approval or clearance by July 1 prior to the particular fiscal year. 10. Section 412.230 is amended by— a. Revising paragraph (d)(1)(iv)(C). b. Adding a new paragraph (d)(1)(iv)(D). The addition and revision read as follows:
 § 412.230
  
 (d) * * * (1) * * * (iv) * * * (C) With respect to redesignations for fiscal years 2002 through 2009, the hospital's average hourly wage is equal to, in the case of a hospital located in a rural area, at least 82 percent, and in the case of a hospital located in an urban area, at least 84 percent of the average hourly wage of hospitals in the area to which it seeks redesignation. (D) With respect to redesignations for fiscal year 2010 and later fiscal years, the hospital's average hourly wage is equal to, in the case of a hospital located in a rural area, at least 86 percent, and in the case of a hospital located in an urban area, at least 88 percent of the average hourly wage of hospitals in the area to which it seeks redesignation. 
 11. Section 412.232 is amended by revising paragraphs (c)(1) and (c)(2) to read as follows:
 § 412.232
  
 (c) * * * (1) 
                                *Aggregate hourly wage for fiscal years before fiscal year 2010*
                                —(i) 
                                *Aggregate hourly wage.*
                                 With respect to redesignations effective beginning fiscal year 1999 and before fiscal year 2010, the aggregate average hourly wage for all hospitals in the rural county must be equal to at least 85 percent of the average hourly wage in the adjacent urban area. (ii) 
                                *Aggregate hourly wage weighted for occupational mix.*
                                 For redesignations effective before fiscal year 1999, the aggregate hourly wage for all hospitals in the rural county, weighed for occupational categories, is at least 90 percent of the average hourly wage in the adjacent urban area. (2) 
                                *Aggregate hourly wage for fiscal year 2010 and later fiscal years.*
                                 With respect to redesignations effective for fiscal year 2010 and later fiscal years, the aggregate average hourly wage for all hospitals in the rural county must be equal to at least 88 percent of the average hourly wage in the adjacent urban area. 
 12. Section 412.234 is amended by revising paragraphs (b)(1) and (b)(2) to read as follows:
 § 412.234
  
 (b) * * * (1) 
                                *Aggregate hourly wage for fiscal years before fiscal year 2010*
                                —(i) 
                                *Aggregate hourly wage.*
                                 With respect to redesignations effective beginning fiscal year 1999 and before fiscal year 2010, the aggregate average hourly wage for all hospitals in the urban county must be at least 85 percent of the average hourly wage in the urban area to which the hospitals in the county seek reclassification. (ii) 
                                *Aggregate hourly wage weighted for occupational mix.*
                                 For redesignations effective before fiscal year 1999, the aggregate hourly wage for all hospitals in the county, weighed for occupational categories, is at least 90 percent of the average hourly wage in the adjacent urban area. (2) 
                                *Aggregate hourly wage for fiscal year 2010 and later fiscal years.*
                                 With respect to redesignations effective for fiscal year 2010 and later fiscal years, the aggregate average hourly wage for all hospitals in the urban county must be at least 88 percent of the average hourly wage in the urban area to which the hospitals in the county seek reclassification.
 PART 413—PRINCIPLES OF REASONABLE COST REIMBURSEMENT; PAYMENT FOR END-STAGE RENAL DISEASE SERVICES; PROSPECTIVELY DETERMINED PAYMENT RATES FOR SKILLED NURSING FACILITIES 13. The authority citation for Part 413 continues to read as follows: Authority:
                            Secs. 1102, 1812(d), 1814(b), 1815, 1833(a), (i), and (n), 1861(v), 1871, 1881, 1883, and 1886 of the Social Security Act (42 U.S.C. 1302, 1395d(d), 1395f(b), 1395g, 1395l(a), (i), and (n), 1395x(v), 1395hh, 1395rr, 1395tt, and 1395ww); and sec. 124 of Pub. L. 106-133 (113 Stat. 1501A-332). § 413.79
  14. In § 413.79(f)(6)(iv), remove the cross-reference “§ 413.75(d)” and add the cross-reference “paragraph (d) of this section” in its place.
 PART 422—MEDICARE ADVANTAGE PROGRAM 15. The authority citation for Part 422 continues to read as follows: Authority:
                            Secs. 1102 and 1871 of the Social Security Act (42 U.S.C. 1302 and 1395hh). 16. Section 422.310 is revised to read as follows: § 422.310
  (a) 
                                *Definition of risk adjustment data.*
                                 Risk adjustment data are all data that are used in the development and application of a risk adjustment payment model. (b) 
                                *Data collection: Basic rule.*
                                 Each MA organization must submit to CMS (in accordance with CMS instructions) the data necessary to characterize the context and purposes of each item and service provided to a Medicare enrollee by a provider, supplier, physician, or other practitioner. CMS may also collect data necessary to characterize the functional limitations of enrollees of each MA organization. (c) 
                                *Sources and extent of data.*
                                 (1) To the extent required by CMS, risk adjustment data must account for the following: (i) Items and services covered under the original Medicare program. (ii) Medicare-covered items and services for which Medicare is not the primary payer. (iii) Other additional or supplemental benefits that the MA organization may provide. (2) The data must account separately for each provider, supplier, physician, 
                                ( print page 23706)
                                or other practitioner that would be permitted to bill separately under the original Medicare program, even if they participate jointly in the same service. (d) 
                                *Other data requirements.*
                                 (1) MA organizations must submit data that conform to CMS’ requirements for data equivalent to Medicare fee-for-service data, when appropriate, and to all relevant national standards. CMS may specify abbreviated formats for data submission required of MA organizations. (2) The data must be submitted electronically to the appropriate CMS contractor. (3) MA organizations must obtain the risk adjustment data required by CMS from the provider, supplier, physician, or other practitioner that furnished the item or service. (4) MA organizations may include in their contracts with providers, suppliers, physicians, and other practitioners, provisions that require submission of complete and accurate risk adjustment data as required by CMS. These provisions may include financial penalties for failure to submit complete data. (e) 
                                *Validation of risk adjustment data.*
                                 MA organizations and their providers and practitioners will be required to submit a sample of medical records for the validation of risk adjustment data, as required by CMS. There may be penalties for submission of false data. (f) 
                                *Use of data.*
                                 CMS uses the data obtained under this section to determine the risk adjustment factors used to adjust payments, as required under §§ 422.304(a) and (c). CMS may also use the data for other purposes, including updating of risk adjustment models. (g) 
                                *Deadlines for submission of risk adjustment data.*
                                 Risk adjustment factors for each payment year are based on risk adjustment data submitted for items and services furnished during the 12-month period before the payment year that is specified by CMS. As determined by CMS, this 12-month period may include a 6-month data lag that may be changed or eliminated as appropriate. CMS may adjust these deadlines, as appropriate. (1) The annual deadline for risk adjustment data submission is the first Friday in September for risk adjustment data reflecting items and services furnished during the 12-month period ending the prior June 30, and the first Friday in March for data reflecting services furnished during the 12-month period ending the prior December 31. (2) CMS allows a reconciliation process to account for late data submissions. CMS continues to accept risk adjustment data submitted after the March deadline until January 31 of the year following the payment year. After the payment year is completed, CMS recalculates the risk factors for affected individuals to determine if adjustments to payments are necessary. Risk adjustment data that are received after the annual January 31 late data submission deadline will not be accepted for the purposes of reconciliation.
 PART 489—PROVIDER AGREEMENTS AND SUPPLIER APPROVAL 17. The authority citation for part 489 continues to read as follows: Authority:
                            Secs. 1102, 1819, 1820(e), 1861, 1864(m), 1866, 1869, and 1871 of the Social Security Act (42 U.S.C. 1302, 1395i-3, 1395x, 1395aa(m), 1395cc, 1395ff, and 1395hh). 18. Section 489.3 is amended by revising the definition of “physician-owned hospital” to read as follows: § 489.3
  
 *Physician-owned hospital*
                                 means any participating hospital (as defined in § 489.24) in which a physician, or an immediate family member of a physician (as defined in § 411.351 of this chapter), has an ownership or investment interest. The ownership or investment interest may be through equity, debt, or other means, and includes an interest in an entity that holds an ownership or investment interest in the hospital. This definition does not include a hospital with physician ownership or investment interests that satisfy the requirements at § 411.356(a) or (b) of this chapter. 
 19. Section 489.20 is amended by— a. Revising paragraph (r)(2). b. Revising paragraph (u). c. Redesignating paragraphs (v) and (w) as paragraphs (w) and (x), respectively. d. Adding a new paragraph (v). The revisions and addition read as follows:
 § 489.20
  
 (r) * * * (2) An on-call list of physicians on its medical staff available to provide treatment necessary after the initial examination to stabilize individuals with emergency medical conditions who are receiving services required under § 489.24 in accordance with the resources available to the hospital; and 
 (u) Except as provided in paragraph (v) of this section, in the case of a physician-owned hospital as defined in § 489.3— (1) To furnish written notice to all patients at the beginning of their hospital stay or outpatient visit that the hospital is a physician-owned hospital, in order to assist the patients in making an informed decision regarding their care, in accordance with § 482.13(b)(2) of this subchapter. The notice should disclose, in a manner reasonably designed to be understood by all patients, the fact that the hospital meets the Federal definition of a physician-owned hospital specified in § 489.3 and that the list of the hospital's owners or investors who are physicians or immediate family members of physicians (as defined at § 411.351 of this chapter) must be provided to the patients at the time the request for the list is made by or on behalf of the patient. For purposes of this paragraph (u)(1), the hospital stay or outpatient visit begins with the provision of a package of information regarding scheduled preadmission testing and registration for a planned hospital admission for inpatient care or outpatient service. (2) To require all physicians who are members of the hospital's medical staff to agree, as a condition of continued medical staff membership or admitting privileges, to disclose, in writing, to all patients they refer to the hospital any ownership or investment interest in the hospital that is held by themselves or by an immediate family member (as defined in § 411.351 of this chapter). Disclosure must be required at the time the referral is made. (v) The requirements of paragraph (u) of this section do not apply to any physician-owned hospital that does not have at least one referring physician (as defined at § 411.351 of this chapter) who has an ownership or investment interest in the hospital or who has an immediate family member who has an ownership or investment interest in the hospital, provided that such hospital signs an attestation statement to that effect and maintain such a notice in its records. 
 20. Section 489.24 is amended by— a. Revising paragraph (a)(2). b. Revising paragraph (f). c. Revising paragraph (j). The revisions read as follows:
 § 489.24
  (a) * * * (2) 
                                *Nonapplicability of provisions of this section.*
                                 Sanctions under this section for an inappropriate transfer during a national emergency or for the direction or relocation of an individual to receive medical screening at an 
                                ( print page 23707)
                                alternate location pursuant to an appropriate State emergency preparedness plan or, in the case of a public health emergency that involves a pandemic infectious disease, pursuant to a State pandemic preparedness plan do not apply to a hospital with a dedicated emergency department located in an emergency area during an emergency period, as specified in section 1135(g)(1) of the Act. A waiver of these sanctions is limited to a 72-hour period beginning upon the implementation of a hospital disaster protocol, except that, if a public health emergency involves a pandemic infectious disease (such as pandemic influenza), the waiver will continue in effect until the termination of the applicable declaration of a public health emergency, as provided for by section 135(e)(1)(B) of the Act. 
 (f) 
                                *Recipient hospital responsibilities.*
                                 A participating hospital that has specialized capabilities or facilities (including, but not limited to, facilities such as burn units, shock-trauma units, neonatal intensive case units, or, with respect to rural areas, regional referral centers (which, for purposes of this subpart, mean hospitals meeting the requirements of referral centers found at § 412.96 of this chapter)) may not refuse to accept from a referring hospital within the boundaries of the United States an appropriate transfer of an individual who requires such specialized capabilities or facilities if the receiving hospital has the capacity to treat the individual. This provision applies to— (1) Any participating hospital with specialized capabilities, regardless of whether the hospital has a dedicated emergency department; and (2) An individual who has been admitted under paragraph (d)(2)(i) of this section and who has not been stabilized. 
 (j) 
                                *Availability of on-call physicians*. In accordance with the on-call list requirements specified in § 489.20(r)(2), a hospital must have written policies and procedures in place— (1) To respond to situations in which a particular specialty is not available or the on-call physician cannot respond because of circumstances beyond the physician's control; and (2) To provide that emergency services are available to meet the needs of individuals with emergency medical conditions if a hospital elects to— (i) Permit on-call physicians to schedule elective surgery during the time that they are on call; (ii) Permit on-call physicians to have simultaneous on-call duties; and (iii) Participate in a formal community call plan. Notwithstanding participation in a community call plan, hospitals are still required to perform medical screening examinations on individuals who present seeking treatment and to conduct appropriate transfers. The formal community plan must include the following elements: (A) A clear delineation of on-call coverage responsibilities; that is, when each hospital participating in the plan is responsible for on-call coverage. (B) A description of the specific geographic area to which the plan applies. (C) A signature by an appropriate representative of each hospital participating in the plan. (D) Assurances that any local and regional EMS system protocol formally includes information on community on-call arrangements. (E) Evidence of engagement of the hospitals participating in the community call plan in an analysis of the specialty on-call needs of the community for which the plan is effective. (F) A statement specifying that even if an individual arrives at a hospital that is not designated as the on-call hospital, that hospital still has an obligation under § 489.24 to provide a medical screening examination and stabilizing treatment within its capability, and that hospitals participating in the community call plan must abide by the regulations under § 489.24 governing appropriate transfers. (G) An annual assessment of the community call plan by the participating hospitals. 21. Section 489.53 is amended by revising paragraph (c) to read as follows:
 § 489.53
  
 (c) 
                                *Termination of agreements with physician-owned hospitals*. In the case of a physician-owned hospital, as defined at § 489.3, CMS may terminate the provider agreement if the hospital failed to comply with the requirements of § 489.20(u) or (w). 
 (Catalog of Federal Domestic Assistance Program No. 93.773, Medicare—Hospital Insurance; and Program No. 93.774, Medicare—Supplementary Medical Insurance Program)
 Dated: April 1, 2008. Kerry Weems, Acting Administrator, Centers for Medicare & Medicaid Services.
 Dated: April 10, 2008. Michael O. Leavitt, Secretary.
 [editorial Note: The following Addendum and appendixes will not appear in the Code of Federal Regulations.]
 Addendum—Proposed Schedule of Standardized Amounts, Update Factors, and Rate-of-Increase Percentages Effective With Cost Reporting Periods Beginning On or After October 1, 2008 I. Summary and Background In this Addendum, we are setting forth the methods and data we used to determine the proposed prospective payment rates for Medicare hospital inpatient operating costs and Medicare hospital inpatient capital-related costs. We are also setting forth the proposed rate-of-increase percentages for updating the target amounts for certain hospitals and hospital units excluded from the IPPS. In general, except for SCHs, MDHs, and hospitals located in Puerto Rico, each hospital's payment per discharge under the IPPS is based on 100 percent of the Federal national rate, also known as the national adjusted standardized amount. This amount reflects the national average hospital cost per case from a base year, updated for inflation. SCHs are paid based on whichever of the following rates yields the greatest aggregate payment: The Federal national rate; the updated hospital-specific rate based on FY 1982 costs per discharge; the updated hospital-specific rate based on FY 1987 costs per discharge; or the updated hospital-specific rate based on FY 1996 costs per discharge. Under section 1886(d)(5)(G) of the Act, MDHs historically have been paid based on the Federal national rate or, if higher, the Federal national rate plus 50 percent of the difference between the Federal national rate and the updated hospital-specific rate based on FY 1982 or FY 1987 costs per discharge, whichever was higher. (MDHs did not have the option to use their FY 1996 hospital-specific rate.) However, section 5003(a)(1) of Pub. L. 109-171 extended and modified the MDH special payment provision that was previously set to expire on October 1, 2006, to include discharges occurring on or after October 1, 2006, but before October 1, 2011. Under section 5003(b) of Pub. L. 109-171, if the change results in an increase to an MDH's target amount, an MDH must rebase its hospital-specific rates to its FY 2002 cost report. Section 5003(c) of Pub. L. 109-171 further required that MDHs be paid based on the Federal national rate or, if higher, the Federal national rate plus 75 percent of the difference between the Federal national rate and the updated hospital-specific rate. Further, based on the provisions of section 5003(d) of Pub. L. 109-171, MDHs are no longer subject to the 12-percent cap on their DSH payment adjustment factor. 
                                ( print page 23708) For hospitals located in Puerto Rico, the payment per discharge is based on the sum of 25 percent of an updated Puerto Rico-specific rate based on average costs per case of Puerto Rico hospitals for the base year and 75 percent of the Federal national rate. (We refer readers to section II.D.3. of this Addendum for a complete description.) As discussed below in section II. of this Addendum, we are proposing to make changes in the determination of the prospective payment rates for Medicare inpatient operating costs for FY 2009. In section III. of this Addendum, we discuss our proposed policy changes for determining the prospective payment rates for Medicare inpatient capital-related costs for FY 2009. Section IV. of this Addendum sets forth our proposed changes for determining the rate-of-increase limits for certain hospitals excluded from the IPPS for FY 2009. The tables to which we refer in the preamble of this proposed rule are presented in section V. of this Addendum of this proposed rule. II. Proposed Changes to Prospective Payment Rates for Hospital Inpatient Operating Costs for FY 2009 The basic methodology for determining prospective payment rates for hospital inpatient operating costs for FY 2005 and subsequent fiscal years is set forth at § 412.64. The basic methodology for determining the prospective payment rates for hospital inpatient operating costs for hospitals located in Puerto Rico for FY 2005 and subsequent fiscal years is set forth at §§ 412.211 and 412.212. Below we discuss the factors used for determining the prospective payment rates. In summary, the proposed standardized amounts set forth in Tables 1A, 1B, and 1C, of section VI. of this Addendum reflect— Equalization of the standardized amounts for urban and other areas at the level computed for large urban hospitals during FY 2004 and onward, as provided for under section 1886(d)(3)(A)(iv) of the Act, updated by the applicable percentage increase required under sections 1886(b)(3)(B)(i)(XX) and 1886(b)(3)(B)(viii) of the Act.
                            The labor-related share that is applied to the standardized amounts and Puerto Rico-specific standardized amounts to give the hospital the highest payment, as provided for under sections 1886(d)(3)(E), and 1886(d)(9)(C)(iv) of the Act.
                            Proposed updates of 3.0 percent for all areas (that is, the estimated full market basket percentage increase of 3.0 percent), as required by section 1886(b)(3)(B)(i)(XX) of the Act, as amended by section 5001(a)(1) ofPub. L. 109-171, and reflecting the requirements of section 1886(b)(3)(B)(viii) of the Act, as added by section 5001(a)(3) of Pub. L. 109-171, to reduce the applicable percentage increase by 2.0 percentage points for a hospital that fails to submit data, in a form and manner specified by the Secretary, relating to the quality of inpatient care furnished by the hospital.
                            A proposed update of 3.0 percent to the Puerto Rico-specific standardized amount (that is, the full estimated rate-of-increase in the hospital market basket for IPPS hospitals), as provided for under § 412.211(c), which states that we update the Puerto Rico-specific standardized amount using the percentage increase specified in § 412.64(d)(1), or the percentage increase in the market basket index for prospective payment hospitals for all areas.
                            An adjustment to the standardized amount to ensure budget neutrality for DRG recalibration and reclassification, as provided for under section 1886(d)(4)(C)(iii) of the Act.
                            An adjustment to ensure the wage index update and changes are budget neutral, as provided for under section 1886(d)(3)(E) of the Act.
                            An adjustment to ensure the effects of geographic reclassification are budget neutral, as provided for in section 1886(d)(8)(D) of the Act, by removing the FY 2008 budget neutrality factor and applying a revised factor.
                            An adjustment to remove the FY 2008 outlier offset and apply an offset for FY 2009. An adjustment to ensure the effects of the rural community hospital demonstration required under section 410A ofPub. L. 108-173 are budget neutral, as required under section 410A(c)(2) of Pub. L. 108-173.
                            An adjustment to eliminate the effect of coding or classification changes that do not reflect real changes in case-mix, as discussed below and in section II.D. of the preamble to this proposed rule. We note that, beginning in FY 2008, we applied the budget neutrality adjustment for the rural floor to the hospital wage indices rather than the standardized amount. For FY 2009, we are proposing to continue to apply the rural floor budget neutrality adjustment to hospital wage indices rather than the standardized amount. In addition, instead of applying the budget neutrality adjustment for the imputed rural floor adopted under section 1886(d)(3)(E) of the Act to the standardized amounts, beginning with FY 2009, we are proposing to apply the imputed rural floor budget neutrality adjustment to the wage indices. Beginning in FY 2009, we are also proposing to apply the budget neutrality adjustments for the rural floor and imputed rural floor at the State level rather than the national level. For a complete discussion of the budget neutrality proposals concerning the rural floor and the imputed rural floor, including the proposal for a within-State budget neutrality adjustment, we refer readers to section III.B.2.b. of the preamble to this proposed rule. A. Calculation of the Adjusted Standardized Amount 1. Standardization of Base-Year Costs or Target Amounts In general, the national standardized amount is based on per discharge averages of adjusted hospital costs from a base period (section 1886(d)(2)(A) of the Act) or, for Puerto Rico, adjusted target amounts from a base period (section 1886(d)(9)(B)(i) of the Act), updated and otherwise adjusted in accordance with the provisions of section 1886(d) of the Act. The September 1, 1983 interim final rule (48 FR 39763) contained a detailed explanation of how base-year cost data (from cost reporting periods ending during FY 1981) were established for urban and rural hospitals in the initial development of standardized amounts for the IPPS. The September 1, 1987 final rule (52 FR 33043 and 33066) contains a detailed explanation of how the target amounts were determined and how they are used in computing the Puerto Rico rates. Sections 1886(d)(2)(B) and (d)(2)(C) of the Act require us to update base-year per discharge costs for FY 1984 and then standardize the cost data in order to remove the effects of certain sources of cost variations among hospitals. These effects include case-mix, differences in area wage levels, cost-of-living adjustments for Alaska and Hawaii, indirect medical education costs, and costs to hospitals serving a disproportionate share of low-income patients. In accordance with section 1886(d)(3)(E) of the Act, the Secretary estimates, from time-to-time, the proportion of hospitals' costs that are attributable to wages and wage-related costs. In general, the standardized amount is divided into labor-related and nonlabor-related amounts; only the proportion considered to be the labor-related amount is adjusted by the wage index. Section 1886(d)(3)(E) of the Act requires that 62 percent of the standardized amount be adjusted by the wage index, unless doing so would result in lower payments to a hospital than would otherwise be made. (Section 1886(d)(9)(C)(iv)(II) of the Act extends this provision to the labor-related share for hospitals located in Puerto Rico.) For FY 2009, we are not proposing to change the national and Puerto Rico-specific labor-related and nonlabor-related shares from the percentages established for FY 2008. Therefore, the labor-related share continues to be 69.7 percent for the national standardized amounts and 58.7 percent for the Puerto Rico-specific standardized amount. Consistent with section 1886(d)(3)(E) of the Act, we are applying the wage index to a labor-related share of 62 percent for all non-Puerto Rico hospitals whose wage indexes are less than or equal to 1.0000. For all non-Puerto Rico hospitals whose wage indices are greater than 1.0000, we are applying the wage index to a labor-related share of 69.7 percent of the national standardized amount. For hospitals located in Puerto Rico, we are applying a labor-related share of 58.7 percent if its Puerto Rico-specific wage index is less than or equal to 1.0000. For hospitals located in Puerto Rico whose Puerto Rico-specific wage index values are greater than 1.0000, we are applying a labor share of 62 percent. The standardized amounts for operating costs appear in Table 1A, 1B, and 1C of the Addendum to this proposed rule. 2. Computing the Average Standardized Amount Section 1886(d)(3)(A)(iv)(II) of the Act requires that, beginning with FY-2004 and thereafter, an equal standardized amount be computed for all hospitals at the level computed for large urban hospitals during FY 2003, updated by the applicable percentage update. Section 1886(d)(9)(A)(ii)(II) of the Act equalizes the Puerto Rico-specific urban and rural area rates. Accordingly, we are calculating FY 2009 national and Puerto Rico 
                                ( print page 23709)
                                standardized amounts irrespective of whether a hospital is located in an urban or rural location. 3. Updating the Average Standardized Amount In accordance with section 1886(d)(3)(A)(iv)(II) of the Act, we are updating the equalized standardized amount for FY 2008 by the full estimated market basket percentage increase for hospitals in all areas, as specified in section 1886(b)(3)(B)(i)(XX) of the Act, as amended by section 5001(a)(1) of Pub. L. 109-171. The percentage change in the market basket reflects the average change in the price of goods and services purchased by hospitals to furnish inpatient care. The most recent forecast of the hospital market basket increase for FY 2009 is 3.0 percent. Thus, for FY 2009, the proposed update to the average standardized amount is 3.0 percent for hospitals in all areas. The estimated market basket increase of 3.0 percent is based on the 2008 first quarter forecast of the hospital market basket increase (as discussed in Appendix B of this proposed rule). Section 1886(b)(3)(B) of the Act specifies the mechanism to be used to update the standardized amount for payment for inpatient hospital operating costs. Section 1886(b)(3)(B)(viii) of the Act, as added by section 5001(a)(3) of Pub. L. 109-171, provides for a reduction of 2.0 percentage points from the update percentage increase (also known as the market basket update) for FY 2007 and each subsequent fiscal year for any “subsection (d) hospital” that does not submit quality data, as discussed in section IV.A. of the preamble of this proposed rule. The standardized amounts in Tables 1A through 1C of section V. of the Addendum to this proposed rule reflect these differential amounts. Section 412.211(c) states that we update the Puerto Rico-specific standardized amount using the percentage increase specified in § 412.64(d)(1) or the percentage increase in the market basket index for prospective payment hospitals for all areas. We are proposing to apply the full rate-of-increase in the hospital market basket for IPPS hospitals to the Puerto Rico-specific standardized amount. Therefore, the proposed update to the Puerto Rico-specific standardized amount is estimated to be 3.0 percent. Although the update factors for FY 2009 are set by law, we are required by section 1886(e)(4) of the Act to recommend, taking into account MedPAC's recommendations, appropriate update factors for FY 2009 for both IPPS hospitals and hospitals and hospital units excluded from the IPPS. Our recommendation on the update factors (which is required by sections 1886(e)(4)(A) and (e)(5)(A) of the Act) is set forth in Appendix B of this proposed rule. 4. Other Adjustments to the Average Standardized Amount As in the past, we are adjusting the FY 2009 standardized amount to remove the effects of the FY 2008 geographic reclassifications and outlier payments before applying the FY 2009 updates. We then applied budget neutrality offsets for outliers and geographic reclassifications to the standardized amount based on proposed FY 2009 payment policies. We do not remove the prior year's budget neutrality adjustments for reclassification and recalibration of the DRG weights and for updated wage data because, in accordance with sections 1886(d)(4)(C)(iii) and 1886(d)(3)(E) of the Act, estimated aggregate payments after updates in the DRG relative weights and wage index should equal estimated aggregate payments prior to the changes. If we removed the prior year's adjustment, we would not have satisfied these conditions. Budget neutrality is determined by comparing aggregate IPPS payments before and after making changes that are required to be budget neutral (for example, changes to DRG classifications, recalibration of the DRG relative weights, updates to the wage index, and different geographic reclassifications). We included outlier payments in the simulations because they may be affected by changes in these parameters. We are also proposing to adjust the standardized amount this year by an estimated amount to ensure that aggregate IPPS payments did not exceed the amount of payments that would have been made in the absence of the rural community hospital demonstration program, as required under section 410A of Pub. L. 108-173. This demonstration is required to be budget neutral under section 410A(c)(2) of Pub. L. 108-173. For FY 2009, we are proposing to no longer apply budget neutrality for the imputed rural floor to the standardized amount, and to apply it instead to the wage index, as discussed in section of II.B.2. of the preamble to this proposed rule. For FY 2009, we are also proposing an adjustment to eliminate the effect of coding or classification changes that did not reflect real changes in case-mix using the Secretary's authority under section 1886(d)(3)(A)(vi) of the Act, by the percentage specified in section 7 of Pub. L. 110-90. a. Proposed Recalibration of DRG Weights and Updated Wage Index—Budget Neutrality Adjustment Section 1886(d)(4)(C)(iii) of the Act specifies that, beginning in FY 1991, the annual DRG reclassification and recalibration of the relative weights must be made in a manner that ensures that aggregate payments to hospitals are not affected. As discussed in section II. of the preamble of this proposed rule, we normalized the recalibrated DRG weights by an adjustment factor so that the average case weight after recalibration is equal to the average case weight prior to recalibration. However, equating the average case weight after recalibration to the average case weight before recalibration does not necessarily achieve budget neutrality with respect to aggregate payments to hospitals because payments to hospitals are affected by factors other than average case weight. Therefore, as we have done in past years, we made a budget neutrality adjustment to ensure that the requirement of section 1886(d)(4)(C)(iii) of the Act is met. Section 1886(d)(3)(E) of the Act requires us to update the hospital wage index on an annual basis beginning October 1, 1993. This provision also requires us to make any updates or adjustments to the wage index in a manner that ensures that aggregate payments to hospitals are not affected by the change in the wage index. Consistent with current policy, for FY 2009, we are adjusting 100 percent of the wage index factor for occupational mix. We describe the occupational mix adjustment in section III.D. of the preamble to this proposed rule. To comply with the requirement that DRG reclassification and recalibration of the relative weights and the updated wage index be budget neutral, we used FY 2007 discharge data to simulate payments and compared aggregate payments using the FY 2008 relative weights and wage indices to aggregate payments using the proposed FY 2009 relative weights and wage indices. The same methodology was used for the FY 2008 budget neutrality adjustment. Based on this comparison, we computed a proposed budget neutrality adjustment factor equal to 0.999525 to be applied to the national standardized amount. We are also adjusting the Puerto Rico-specific standardized amount for the effect of DRG reclassification and recalibration. We computed a proposed budget neutrality adjustment factor of 0.998700 to be applied to the Puerto Rico-specific standardized amount. These proposed budget neutrality adjustment factors are applied to the standardized amounts for FY 2008 without removing the prior year's budget neutrality adjustments. In addition, as discussed in section IV. of this Addendum, we are applying the same proposed DRG reclassification and recalibration budget neutrality factor of 0.998700 to the hospital-specific rates that would be effective for cost reporting periods beginning on or after October 1, 2008. b. Reclassified Hospitals—Budget Neutrality Adjustment Section 1886(d)(8)(B) of the Act provides that, effective with discharges occurring on or after October 1, 1988, certain rural hospitals are deemed urban. In addition, section 1886(d)(10) of the Act provides for the reclassification of hospitals based on determinations by the MGCRB. Under section 1886(d)(10) of the Act, a hospital may be reclassified for purposes of the wage index. Under section 1886(d)(8)(D) of the Act, the Secretary is required to adjust the standardized amount to ensure that aggregate payments under the IPPS after implementation of the provisions of sections 1886(d)(8)(B) and (C) and 1886(d)(10) of the Act are equal to the aggregate prospective payments that would have been made absent these provisions. We note that the wage index adjustments provided under section 1886(d)(13) of the Act are not budget neutral. Section 1886(d)(13)(H) of the Act provides that any increase in a wage index under section 1886(d)(13) shall not be taken into account “in applying any budget neutrality adjustment with respect to such index” under section 1886(d)(8)(D) of the Act. To calculate the proposed budget neutrality factor for FY 2009, we used FY 2007 discharge data to simulate payments, and compared total IPPS payments prior to any reclassifications under sections 1886(d)(8)(B) and (C) and 1886(d)(10) of the Act to total IPPS payments after such reclassifications. 
                                ( print page 23710)
                                Based on these simulations, we calculated a proposed adjustment factor of 0.992333 to ensure that the effects of these provisions are budget neutral, consistent with the statute. The proposed adjustment factor is applied to the standardized amount after removing the effects of the FY 2008 budget neutrality adjustment factor. We note that the FY 2009 adjustment reflects FY 2009 wage index reclassifications approved by the MGCRB or the Administrator. (Section 1886(d)(10)(D)(v) of the Act makes wage index reclassifications effective for 3 years. Therefore, the FY 2009 geographic reclassification could either be the continuation of a 3-year reclassification that began in FY 2007 or FY 2008, or a new one beginning in FY 2009.) c. Case-Mix Budget Neutrality Adjustment As stated earlier, beginning in FY 2008, we adopted the new MS-DRG patient classification system for the IPPS to better recognize severity of illness in Medicare payment rates. In the FY 2008 IPPS final rule with comment period, we indicated that we believe the adoption of the MS-DRGs had the potential to lead to increases in aggregate payments without a corresponding increase in actual patient severity of illness due to the incentives for improved documentation and coding. In that final rule, using the Secretary's authority under section 1886(d)(3)(A)(vi) of the Act to maintain budget neutrality by adjusting the national standardized amounts to eliminate the effect of changes in coding or classification that do not reflect real change in case-mix, we established prospective documentation and coding adjustments of −1.2 percent for FY 2008, −1.8 percent for FY 2009, and −1.8 percent for FY 2010. On September 29, 2007, Pub. L. 110-90 was enacted. Section 7 of Pub. L. 110-90 included a provision that reduces the documentation and coding adjustment for the MS-DRG system that we adopted in the FY 2008 IPPS final rule with comment period to −0.6 percent for FY 2008 and −0.9 percent for FY 2009. To comply with the provision of section 7 of Pub. L. 110-90, in a final rule that appeared in the 
                                **Federal Register**
                                 on November 27, 2007 (72 FR 66886), we changed the IPPS documentation and coding adjustment for FY 2008 to −0.6 percent, and revised the FY 2008 national standardized amounts (as well as other payment factors and thresholds) accordingly, with these revisions effective October 1, 2007. For FY 2009, section 7 of Pub. L. 110-90 requires a documentation and coding adjustment of −0.9 percent instead of the −1.8 percent adjustment specified in the FY 2008 IPPS final rule with comment period. As required by statute, we are applying a documentation and coding adjustment of −0.9 percent to the FY 2009 IPPS national standardized amounts. The documentation and coding adjustments established in the FY 2008 IPPS final rule with comment period are cumulative. As a result, the −0.9 percent documentation and coding adjustment in FY 2009 is in addition to the −0.6 percent adjustment in FY 2008, yielding a combined effect of −1.5 percent. As discussed in more detail in section II.D. of the preamble of this proposed rule, in calculating the FY 2008 Puerto Rico standardized amount, we made an inadvertent error and applied the documentation and coding adjustment established using our authority in section 1886(d)(3)(A)(vi) of the Act (which only applies to the national standardized amounts) to the Puerto Rico-specific standardized amount. We are currently in the process of developing a 
                                **Federal Register**
                                 notice to remove the −0.6 percent documentation and coding adjustment from the FY 2008 Puerto Rico-specific standardized amount retroactive to October 1, 2007. As discussed in section II.D. of the preamble of this proposed rule, we are not applying the documentation and coding adjustment to the Puerto Rico-specific standardized amount for FY 2009, but we may consider doing so for the FY 2010 Puerto Rico-specific standardized amount in the FY 2010 rulemaking. In calculating the FY 2009 Puerto Rico-specific standardized amount for this proposed rule, we have removed the −0.6 percent documentation and coding adjustment that was inadvertently applied to the FY 2008 Puerto Rico-specific standardized amount. d. Outliers Section 1886(d)(5)(A) of the Act provides for payments in addition to the basic prospective payments for “outlier” cases involving extraordinarily high costs. To qualify for outlier payments, a case must have costs greater than the sum of the prospective payment rate for the DRG, any IME and DSH payments, any new technology add-on payments, and the “outlier threshold” or “fixed loss” amount (a dollar amount by which the costs of a case must exceed payments in order to qualify for an outlier payment). We refer to the sum of the prospective payment rate for the DRG, any IME and DSH payments, any new technology add-on payments, and the outlier threshold as the outlier “fixed-loss cost threshold.” To determine whether the costs of a case exceed the fixed-loss cost threshold, a hospital's CCR is applied to the total covered charges for the case to convert the charges to estimated costs. Payments for eligible cases are then made based on a marginal cost factor, which is a percentage of the estimated costs above the fixed-loss cost threshold. The marginal cost factor for FY 2009 is 80 percent, the same marginal cost factor we have used since FY 1995 (59 FR 45367). In accordance with section 1886(d)(5)(A)(iv) of the Act, outlier payments for any year are projected to be not less than 5 percent nor more than 6 percent of total operating DRG payments plus outlier payments. Section 1886(d)(3)(B) of the Act requires the Secretary to reduce the average standardized amount by a factor to account for the estimated proportion of total DRG payments made to outlier cases. Similarly, section 1886(d)(9)(B)(iv) of the Act requires the Secretary to reduce the average standardized amount applicable to hospitals located in Puerto Rico to account for the estimated proportion of total DRG payments made to outlier cases. More information on outlier payments may be found on the CMS Web site at 
                                *http://www.cms.hhs.gov/​AcuteInpatientPPS/​04_​outlier.asp#TopOfPage.* (1) Proposed FY 2009 Outlier Fixed-Loss Cost Threshold For FY 2009, we are proposing to use the same methodology used for FY 2008 (72 FR 47417) to calculate the outlier threshold. Similar to the methodology used in the FY 2008 final rule with comment period, for FY 2009, we are applying an adjustment factor to the CCRs to account for cost and charge inflation (as explained below). As we have done in the past, to calculate the proposed FY 2009 outlier threshold, we simulated payments by applying FY 2009 rates and policies using cases from the FY 2007 MedPAR files. Therefore, in order to determine the proposed FY 2009 outlier threshold, we inflate the charges on the MedPAR claims by 2 years, from FY 2007 to FY 2009. We are proposing to continue using a refined methodology that takes into account the lower inflation in hospital charges that are occurring as a result of the outlier final rule (68 FR 34494), which changed our methodology for determining outlier payments by implementing the use of more current CCRs. Our refined methodology uses more recent data that reflect the rate-of-change in hospital charges under the new outlier policy. Using the most recent data available, we calculated the 1-year average annualized rate-of-change in charges-per-case from the last quarter of FY 2006 in combination with the first quarter of FY 2007 (July 1, 2006 through December 31, 2006) to the last quarter of FY 2007 in combination with the first quarter of FY 2008 (July 1, 2007 through December 31, 2007). This rate of change was 5.84 percent (1.0585) or 12.03 percent (1.1204) over 2 years. As we have done in the past, we are proposing to establish the proposed FY 2009 outlier threshold using hospital CCRs from the December 2007 update to the Provider-Specific File (PSF)—the most recent available data at the time of this proposed rule. This file includes CCRs that reflected implementation of the changes to the policy for determining the applicable CCRs that became effective August 8, 2003 (68 FR 34494). As discussed in the FY 2007 final rule (71 FR 48150), we worked with the Office of Actuary to derive the methodology described below to develop the CCR adjustment factor. For FY 2009, we are proposing to use the same methodology to calculate the CCR adjustment by using the FY 2007 operating cost per discharge increase in combination with the actual FY 2007 operating market basket increase determined by Global Insight, Inc., as well as the charge inflation factor described above to estimate the adjustment to the CCRs. (We note that the FY 2007 actual (otherwise referred to as “final”) operating market basket increase reflects historical data whereas the published FY 2007 operating market basket update factor was based on Global Insight, Inc.'s 2006 second quarter forecast with historical data through the first quarter of 2007.) By using the operating market basket rate-of-increase and the increase in the average cost per discharge from hospital cost reports, we are using two different measures of cost inflation. For FY 
                                ( print page 23711)
                                2009, we determined the adjustment by taking the percentage increase in the operating costs per discharge from FY 2005 to FY 2006 (1.0538) from the cost report and dividing it by the final operating market basket increase from FY 2006 (1.0420). We repeated this calculation for 2 prior years to determine the 3-year average of the rate of adjusted change in costs between the operating market basket rate-of-increase and the increase in cost per case from the cost report (FY 2003 to FY 2004 percentage increase of operating costs per discharge of 1.0629 divided by FY 2004 final operating market basket increase of 1.0400, FY 2004 to FY 2005 percentage increase of operating costs per discharge of 1.0565 divided by FY 2005 final operating market basket increase of 1.0430). For FY 2009, we averaged the differentials calculated for FY 2004, FY 2005, and FY 2006, which resulted in a mean ratio of 1.0154. We multiplied the 3-year average of 1.0154 by the 2007 operating market basket percentage increase of 1.0340, which resulted in an operating cost inflation factor of 5.0 percent or 1.05. We then divided the operating cost inflation factor by the 1-year average change in charges (1.058474) and applied an adjustment factor of 0.9920 to the operating CCRs from the PSF. As stated in the FY 2008 final rule with comment period, we continue to believe it is appropriate to apply only a 1-year adjustment factor to the CCRs. On average, it takes approximately 9 months for fiscal intermediaries (or, if applicable, the MAC) to tentatively settle a cost report from the fiscal year end of a hospital's cost reporting period. The average “age” of hospitals' CCRs from the time the fiscal intermediary or the MAC inserts the CCR in the PSF until the beginning of FY 2008 is approximately 1 year. Therefore, as stated above, we believe a 1-year adjustment factor to the CCRs is appropriate. We used the same methodology for the capital CCRs and determined the adjustment by taking the percentage increase in the capital costs per discharge from FY 2005 to FY 2006 (1.0462) from the cost report and dividing it by the final capital market basket increase from FY 2006 (1.0090). We repeated this calculation for 2 prior years to determine the 3-year average of the rate of adjusted change in costs between the capital market basket rate-of-increase and the increase in cost per case from the cost report (FY 2003 to FY 2004 percentage increase of capital costs per discharge of 1.0315 divided by FY 2004 final capital market basket increase of 1.0050, FY 2004 to FY 2005 percentage increase of capital costs per discharge of 1.0311 divided by FY 2005 final capital market basket increase of 1.0060). For FY 2009, we averaged the differentials calculated for FY 2004, FY 2005, and FY 2006, which resulted in a mean ratio of 1.0294. We multiplied the 3-year average of 1.0294 by the 2007 capital market basket percentage increase of 1.0120, which resulted in a capital cost inflation factor of 4.17 percent or 1.0417. We then divided the capital cost inflation factor by the 1-year average change in charges (1.058474) and applied an adjustment factor of 0.9842 to the capital CCRs from the PSF. We are using the same charge inflation factor for the capital CCRs that was used for the operating CCRs. The charge inflation factor is based on the overall billed charges. Therefore, we believe it is appropriate to apply the charge factor to both the operating and capital CCRs. For purposes of estimating the proposed outlier threshold for FY 2009, we assume 3.0 percent case-mix growth in FY 2009 compared with our FY 2007 claims data (that is, a 1.2 percent increase in FY 2008 and an additional 1.8 percent increase in FY 2009).  The 3 percent case-mix growth was projected by the Office of the Actuary as the amount case-mix is expected to increase in response to adoption of the MS-DRGs as a result of improvements in documentation and coding that do not reflect real changes in patient severity of illness.   It is necessary to take the 3 percent expected case-mix growth into account when calculating the outlier threshold that results in outlier payments being 5.1 percent of total payments for FY 2009.  If we did not take this 3 percent projected case-mix growth into account, our estimate of total payments would be too low, and as a result, our estimate of the outlier threshold would be too high.  While we assume 3 percent case-mix growth for all hospitals in our outlier threshold calculations, the FY 2009 national standardized amounts used to calculate the outlier threshold reflect the statutorily mandated documentation and coding adjustment of −0.9 percent for FY 2009, on top of the −0.6 percent adjustment for FY 2008. Using this methodology, we are proposing an outlier fixed-loss cost threshold for FY 2009 equal to the prospective payment rate for the DRG, plus any IME and DSH payments, and any add-on payments for new technology, plus $21,025. As we did in establishing the FY 2008 outlier threshold (72 FR 47417), in our projection of FY 2009 outlier payments, we are not making any adjustments for the possibility that hospitals' CCRs and outlier payments may be reconciled upon cost report settlement. We continue to believe that, due to the policy implemented in the outlier final rule (68 FR 34494, June 9, 2003), CCRs will no longer fluctuate significantly and, therefore, few hospitals will actually have these ratios reconciled upon cost report settlement. In addition, it is difficult to predict the specific hospitals that will have CCRs and outlier payments reconciled in any given year. We also noted that reconciliation occurs because hospitals' actual CCRs for the cost reporting period are different than the interim CCRs used to calculate outlier payments when a bill is processed. Our simulations assume that CCRs accurately measure hospital costs based on information available to us at the time we set the outlier threshold. For these reasons, we are not making any assumptions about the effects of reconciliation on the outlier threshold calculation. We also note that there are some factors that contributed to a proposed lower fixed loss outlier threshold for FY 2009 compared to FY 2008.  First, the case-weighted national average operating CCR declined by approximately an additional 1 percentage point from the March 2007 update (used to calculate the FY 2008 outlier threshold) to the December 2007 update of the PSF (used to calculate the proposed FY 2009 outlier threshold).  In addition, as discussed in sections II.C. and II.H. of the preamble of this proposed rule, we began a 2-year phase-in of the MS-DRGs in FY 2008, with the DRG relative weights based on a 50 percent blend of the CMS DRGs and MS-DRGs in FY 2008 and based on 100 percent of the MS-DRGs beginning in FY 2009.  Better recognition of severity of illnesses with the MS-DRGs means that nonoutlier payments will compensate hospitals for the higher costs of some cases that previously received outlier payments.  As cases are paid more accurately, in order to meet the 5.1 percent target, we need to decrease the fixed-loss outlier threshold so that more cases qualify for outlier payments.  In addition, as noted previously, in our modeling of the outlier threshold, we included a 3-percent adjustment for expected case-mix growth between FY 2007 and FY 2009.  Together, we believe that the above factors cumulatively contributed to a lower proposed fixed-loss outlier threshold in FY 2009 compared to FY 2008. (2) Other Proposed Changes Concerning Outliers As stated in the FY 1994 IPPS final rule (58 FR 46348), we establish an outlier threshold that is applicable to both hospital inpatient operating costs and hospital inpatient capital-related costs. When we modeled the combined operating and capital outlier payments, we found that using a common threshold resulted in a lower percentage of outlier payments for capital-related costs than for operating costs. We are projecting that the proposed thresholds for FY 2009 will result in outlier payments that will equal 5.1 percent of operating DRG payments and 5.73 percent of capital payments based on the Federal rate. In accordance with section 1886(d)(3)(B) of the Act, we are reducing the FY 2009 standardized amount by the same percentage to account for the projected proportion of payments paid as outliers. The outlier adjustment factors that are applied to the standardized amount for the proposed FY 2009 outlier threshold are as follows: Operating standardized amounts
Capital 
                                         federal rateNational
0.948928
0.942711Puerto Rico
0.955988
0.925627
 Consistent with current policy, we are applying the outlier adjustment factors to FY 2009 rates after removing the effects of the FY 2008 outlier adjustment factors on the standardized amount. To determine whether a case qualifies for outlier payments, we apply hospital-specific CCRs to the total covered charges for the case. Estimated operating and capital costs for the case are calculated separately by applying separate operating and capital CCRs. These costs are then combined and 
                                ( print page 23712)
                                compared with the outlier fixed-loss cost threshold. The outlier final rule (68 FR 34494) eliminated the application of the statewide average CCRs for hospitals with CCRs that fell below 3 standard deviations from the national mean CCR. However, for those hospitals for which the fiscal intermediary or MAC computes operating CCRs greater than 1.213 or capital CCRs greater than 0.148, or hospitals for whom the fiscal intermediary or MAC is unable to calculate a CCR (as described at § 412.84(i)(3) of our regulations), we still use statewide average CCRs to determine whether a hospital qualifies for outlier payments.[27]
                                
                                 Table 8A in this Addendum contains the statewide average operating CCRs for urban hospitals and for rural hospitals for which the fiscal intermediary or MAC is unable to compute a hospital-specific CCR within the above range. Effective for discharges occurring on or after October 1, 2008, these statewide average ratios would replace the ratios published in the IPPS final rule for FY 2008 (72 FR 48126-48127). Table 8B in this Addendum contains the comparable statewide average capital CCRs. Again, the CCRs in Tables 8A and 8B would be used during FY 2009 when hospital-specific CCRs based on the latest settled cost report are either not available or are outside the range noted above. For an explanation of Table 8C, we refer readers to section V. of this Addendum. We finally note that we published a manual update (Change Request 3966) to our outlier policy on October 12, 2005, which updated Chapter 3, Section 20.1.2 of the Medicare Claims Processing Manual. The manual update covered an array of topics, including CCRs, reconciliation, and the time value of money. We encourage hospitals that are assigned the statewide average operating and/or capital CCRs to work with their fiscal intermediaries (or MAC if applicable) on a possible alternative operating and/or capital CCR as explained in Change Request 3966. Use of an alternative CCR developed by the hospital in conjunction with the fiscal intermediary or MAC can avoid possible overpayments or underpayments at cost report settlement, thus ensuring better accuracy when making outlier payments and negating the need for outlier reconciliation. We also note that a hospital may request an alternative operating or capital CCR ratio at any time as long as the guidelines of Change Request 3966 are followed. To download and view the manual instructions on outlier and cost-to-charge ratios, visit the Web site: 
                                *http://www.cms.hhs.gov/​manuals/​downloads/​clm104c03.pdf*. (3) FY 2007 and FY 2008 Outlier Payments In the FY 2008 IPPS final rule (72 FR 47420), we stated that, based on available data, we estimated that actual FY 2007 outlier payments would be approximately 4.6 percent of actual total DRG payments. This estimate was computed based on simulations using the FY 2006 MedPAR file (discharge data for FY 2006 bills). That is, the estimate of actual outlier payments did not reflect actual FY 2007 bills, but instead reflected the application of FY 2007 rates and policies to available FY 2006 bills. Our current estimate, using available FY 2007 bills, is that actual outlier payments for FY 2007 were approximately 4.64 percent of actual total DRG payments. Thus, the data indicate that, for FY 2007, the percentage of actual outlier payments relative to actual total payments is lower than we projected before FY 2007. Consistent with the policy and statutory interpretation we have maintained since the inception of the IPPS, we do not plan to make retroactive adjustments to outlier payments to ensure that total outlier payments for FY 2007 are equal to 5.1 percent of total DRG payments. We currently estimate that actual outlier payments for FY 2008 will be approximately 4.8 percent of actual total DRG payments, 0.3 percentage points lower than the 5.1 percent we projected in setting the outlier policies for FY 2008. This estimate is based on simulations using the FY 2007 MedPAR file (discharge data for FY 2007 bills). We used these data to calculate an estimate of the actual outlier percentage for FY 2008 by applying FY 2008 rates and policies, including an outlier threshold of $22,185 to available FY 2007 bills. e. Proposed Rural Community Hospital Demonstration Program Adjustment (Section 410A of Pub. L. 108-173) Section 410A of Pub. L. 108-173 requires the Secretary to establish a demonstration that will modify reimbursement for inpatient services for up to 15 small rural hospitals. Section 410A(c)(2) of Pub. L. 108-173 requires that “in conducting the demonstration program under this section, the Secretary shall ensure that the aggregate payments made by the Secretary do not exceed the amount which the Secretary would have paid if the demonstration program under this section was not implemented.” As discussed in section IV.K. of the preamble to this proposed rule, we have satisfied this requirement by adjusting national IPPS rates by a factor that is sufficient to account for the added costs of this demonstration. There are currently nine hospitals participating in the demonstration program. CMS is currently conducting a solicitation for up to six additional hospitals to participate in the demonstration program.  For this proposed rule, we used data from the cost reports of the 9 currently participating hospitals to estimate a total cost number for 15 hospitals that could potentially participate in the demonstration program in FY 2009. (In the final rule, we will know the exact number of hospitals participating in the demonstration program, and we will revise our estimates accordingly.)  We estimate that the average additional annual payment that will be made to each participating hospital under the demonstration will be approximately $2,134,123. We based this estimate on the recent historical experience of the difference between inpatient cost and payment for hospitals that are participating in the demonstration program. As an estimate of the cost for a total of 15 hospitals that may participate, the total annual impact of the demonstration program for FY 2009 is projected to be $32,011,849. The required adjustment to the Federal rate used in calculating Medicare inpatient prospective payments as a result of the demonstration is 0.999666. In order to achieve budget neutrality, we are adjusting the national IPPS rates by an amount sufficient to account for the added costs of this demonstration. In other words, we are applying budget neutrality across the payment system as a whole rather than merely across the participants of this demonstration, consistent with past practice. We believe that the language of the statutory budget neutrality requirement permits the agency to implement the budget neutrality provision in this manner. The statutory language requires that “aggregate payments made by the Secretary do not exceed the amount which the Secretary would have paid if the demonstration * * * was not implemented,” but does not identify the range across which aggregate payments must be held equal. 5. Proposed FY 2009 Standardized Amount The adjusted proposed standardized amount is divided into labor-related and nonlabor-related portions. Tables 1A and 1B of this Addendum contain the national standardized amounts that we are proposing to apply to all hospitals, except hospitals located in Puerto Rico, for FY 2009. The proposed Puerto Rico-specific amounts are shown in Table 1C of this Addendum. The proposed amounts shown in Tables 1A and 1B differ only in that the labor-related share applied to the standardized amounts in Table 1A is 69.7 percent, and Table 1B is 62 percent. In accordance with sections 1886(d)(3)(E) and 1886(d)(9)(C)(iv) of the Act, we are applying a labor-related share of 62 percent, unless application of that percentage would result in lower payments to a hospital than would otherwise be made. In effect, the statutory provision means that we apply a labor-related share of 62 percent for all hospitals (other than those in Puerto Rico) whose wage indexes are less than or equal to 1.0000. In addition, Tables 1A and 1B include proposed standardized amounts reflecting the full 3.0 percent update for FY 2009, and proposed standardized amounts reflecting the 2.0 percentage point reduction to the update (a 1.0 percent update) applicable for hospitals that fail to submit quality data consistent with section 1886(b)(3)(B)(viii) of the Act. Under section 1886(d)(9)(A)(ii) of the Act, the Federal portion of the Puerto Rico payment rate is based on the discharge-weighted average of the national large urban standardized amount (this proposed amount is set forth in Table 1A). The proposed labor-related and nonlabor-related portions of the national average standardized amounts for Puerto Rico hospitals for FY 2009 are set forth in Table 1C of this Addendum. This table also includes the proposed Puerto Rico standardized amounts. The labor-related share applied to the Puerto Rico specific standardized amount is 58.7 percent, or 62 percent, depending on which provides higher payments to the hospital. (Section 1886(d)(9)(C)(iv) of the Act, as amended by section 403(b) of Pub. L. 108-173, provides 
                                ( print page 23713)
                                that the labor-related share for hospitals located in Puerto Rico be 62 percent, unless the application of that percentage would result in lower payments to the hospital.) The following table illustrates the proposed changes from the FY 2008 national average standardized amount. The second and third columns show the proposed changes from the FY 2008 standardized amounts for hospitals that satisfy the quality data submission requirement for receiving the full update (3.0 percent) with the different labor-related shares that apply to hospitals. The fourth and fifth columns show the proposed changes for hospitals receiving the reduced update (1.0 percent) with the different labor-related shares that apply to hospitals. The first row of the table shows the updated (through FY 2008) average standardized amount after restoring the FY 2008 offsets for outlier payments, demonstration budget neutrality, the New Jersey imputed floor budget neutrality, and the geographic reclassification budget neutrality. The DRG reclassification and recalibration and wage index budget neutrality factor is cumulative. Therefore, the FY 2008 factor is not removed from this table. Also, in order to properly apply the documentation and coding adjustment, it was necessary to first remove the FY 2008 adjustment from the FY 2008 rate in the first row of the table and then later in the table to cumulatively apply the sum of the FY 2008 and FY 2009 adjustments (that is, 1−(.006 + .009)) to the FY 2009 rate. (For a complete discussion on the documentation and coding adjustment, we refer readers to section II.D of the preamble to this proposed rule.) Comparison of FY 2008 Standardized Amounts to the Proposed FY 2009 Single Standardized Amount With Full Update and Reduced Update
Full update (3.0 percent); wage index is greater than 1.0000
Full update (3.0 percent); wage index is less than 1.0000
Reduced update (1.0 percent); wage index is greater than 1.0000
Reduced update (1.0 percent); wage index is less than 1.0000FY 2008 Base Rate, after removing geographic reclassification budget neutrality, demonstration budget neutrality, documentation and coding adjustment, NJ imputed floor budget neutrality and outlier offset (based on the labor and market share percentage for FY 2009)
Labor: $3,723.07 
                                     Nonlabor: $1,618.50
Labor: $3,311.77 
                                     Nonlabor: $2,029.80
Labor: $3,723.07 
                                     Nonlabor: $1,618.50
Labor: $3,311.77 
                                     Nonlabor: $2,029.80FY 2009 Update Factor
1.030
1.030
1.010
1.010FY 2009 DRG Recalibrations and Wage Index Budget Neutrality Factor
0.999525
0.999525
0.999525
0.999525FY 2009 Reclassification Budget Neutrality Factor
0.992333
0.992333
0.992333
0.992333FY 2009 Outlier Factor
0.948928
0.948928
0.948928
0.948928Rural Demonstration Budget Neutrality Factor
0.999666
0.999666
0.999666
0.999666FY 2009 Documentation and Coding Adjustment and Actual FY 2008 Adjustment
0.985
0.985
0.985
0.985Proposed Rate for FY 2009
Labor: $3,553.98 
                                     Nonlabor: $1,544.98
Labor: $3,161.36 
                                     Nonlabor: $1,937.60
Labor: $3,484.97 
                                     Nonlabor: $1,514.98
Labor: $3,099.97 
                                     Nonlabor: $1,899.98
 Under section 1886(d)(9)(A)(ii) of the Act, the Federal portion of the Puerto Rico payment rate is based on the national average standardized amounts. The labor-related and nonlabor-related portions of the national average standardized amounts for hospitals located in Puerto Rico are set forth in Table 1C of this Addendum. This table also includes the Puerto Rico standardized amounts. The labor-related share applied to the Puerto Rico standardized amount is 58.7 percent, or 62 percent, depending on which results in higher payments to the hospital. (Section 1886(d)(9)(C)(iv) of the Act, as amended by section 403(b) of Pub. L. 108-173, provides that the labor-related share for hospitals located in Puerto Rico be 62 percent, unless the application of that percentage would result in lower payments to the hospital.) B. Proposed Adjustments for Area Wage Levels and Cost-of-Living Tables 1A through 1C, as set forth in this Addendum, contain the proposed labor-related and nonlabor-related shares that we are using to calculate the proposed prospective payment rates for hospitals located in the 50 States, the District of Columbia, and Puerto Rico for FY 2009. This section addresses two types of adjustments to the standardized amounts that were made in determining the prospective payment rates as described in this Addendum. 1. Proposed Adjustment for Area Wage Levels Sections 1886(d)(3)(E) and 1886(d)(9)(C)(iv) of the Act require that we make an adjustment to the labor-related portion of the national and Puerto Rico prospective payment rates, respectively, to account for area differences in hospital wage levels. This adjustment is made by multiplying the labor-related portion of the adjusted standardized amounts by the appropriate wage index for the area in which the hospital is located. In section III. of the preamble to this proposed rule, we discuss the data and methodology for the FY 2009 wage index. 2. Proposed Adjustment for Cost-of-Living in Alaska and Hawaii Section 1886(d)(5)(H) of the Act authorizes the Secretary to make an adjustment to take into account the unique circumstances of hospitals in Alaska and Hawaii. Higher labor-related costs for these two States are taken into account in the adjustment for area wages described above. For FY 2009, we are proposing to adjust the payments for hospitals in Alaska and Hawaii by multiplying the nonlabor-related portion of the standardized amount by the applicable adjustment factor contained in the table below. Table of Cost-of-Living Adjustment Factors: Alaska and Hawaii Hospitals
Area
Cost of living adjustment factorAlaska:City of Anchorage and 80-kilometer (50-mile) radius by road
1.24( print page 23714)City of Fairbanks and 80-kilometer (50-mile) radius by road
1.24City of Juneau and 80-kilometer (50-mile) radius by road
1.24Rest of Alaska
1.25Hawaii:City and County of Honolulu
1.25County of Hawaii
1.17County of Kauai
1.25County of Maui and County of Kalawao
1.25(The above factors are based on data obtained from the U.S. Office of Personnel Management.)
 C. Proposed MS-DRG Relative Weights As discussed in section II.H. of the preamble of this proposed rule, we have developed proposed relative weights for each MS-DRG that reflect the resource utilization of cases in each MS-DRG relative to Medicare cases in other MS-DRGs. Table 5 of this Addendum contains the proposed relative weights that we will apply to discharges occurring in FY 2009. These factors have been recalibrated as explained in section II. of the preamble of this proposed rule. D. Calculation of the Proposed Prospective Payment Rates General Formula for Calculation of the Proposed Prospective Payment Rates for FY 2009 In general, the operating prospective payment rate for all hospitals paid under the IPPS located outside of Puerto Rico, except SCHs and MDHs, for FY 2009 equals the Federal rate. The prospective payment rate for SCHs for FY 2009 equals the higher of the applicable Federal rate, or the hospital-specific rate as described below. The prospective payment rate for MDHs for FY 2009 equals the higher of the Federal rate, or the Federal rate plus 75 percent of the difference between the Federal rate and the hospital-specific rate as described below. The prospective payment rate for hospitals located in Puerto Rico for FY 2009 equals 25 percent of the Puerto Rico rate plus 75 percent of the applicable national rate. 1. Federal Rate The Federal rate is determined as follows: Step 1—Select the applicable average standardized amount depending on whether the hospital submitted qualifying quality data (full update for qualifying hospitals, update minus 2.0 percentage points for nonqualifying hospitals). Step 2—Multiply the labor-related portion of the standardized amount by the applicable wage index for the geographic area in which the hospital is located or the area to which the hospital is reclassified. Step 3—For hospitals in Alaska and Hawaii, multiply the nonlabor-related portion of the standardized amount by the applicable cost-of-living adjustment factor. Step 4—Add the amount from Step 2 and the nonlabor-related portion of the standardized amount (adjusted, if applicable, under Step 3). Step 5—Multiply the final amount from Step 4 by the relative weight corresponding to the applicable MS-DRG (see Table 5 of this Addendum). The Federal rate as determined in Step 5 is then further adjusted if the hospital qualifies for either the IME or DSH adjustment. In addition, for hospitals that qualify for a low-volume payment adjustment under section 1886(d)(12) of the Act and 42 CFR 412.101(b), the payment in Step 5 is increased by 25 percent. 2. Hospital-Specific Rate (Applicable Only to SCHs and MDHs) a. Calculation of Hospital-Specific Rate Section 1886(b)(3)(C) of the Act provides that SCHs are paid based on whichever of the following rates yields the greatest aggregate payment: the Federal rate; the updated hospital-specific rate based on FY 1982 costs per discharge; the updated hospital-specific rate based on FY 1987 costs per discharge; or the updated hospital-specific rate based on FY 1996 costs per discharge. As discussed previously, MDHs are required to rebase their hospital-specific rates to their FY 2002 cost reports if doing so results in higher payments. In addition, effective for discharges occurring on or after October 1, 2006, MDHs are to be paid based on the Federal national rate or, if higher, the Federal national rate plus 75 percent (changed from 50 percent) of the difference between the Federal national rate and the greater of the updated hospital-specific rates based on either FY 1982, FY 1987 or FY 2002 costs per discharge. Further, MDHs are no longer subject to the 12-percent cap on their DSH payment adjustment factor. Hospital-specific rates have been determined for each of these hospitals based on the FY 1982 costs per discharge, the FY 1987 costs per discharge, or, for SCHs, the FY 1996 costs per discharge and for MDHs, the FY 2002 cost per discharge. For a more detailed discussion of the calculation of the hospital-specific rates, we refer the reader to the FY 1984 IPPS interim final rule (48 FR 39772); the April 20, 1990 final rule with comment (55 FR 15150); the FY 1991 IPPS final rule (55 FR 35994); and the FY 2001 IPPS final rule (65 FR 47082). In addition, for both SCHs and MDHs, the hospital-specific rate is adjusted by the budget neutrality adjustment factor as discussed in section III. of this Addendum. The resulting rate will be used in determining the payment rate an SCH or MDH will receive for its discharges beginning on or after October 1, 2007. b. Updating the FY 1982, FY 1987, FY 1996, and FY 2002 Hospital-Specific Rates for FY 2009 We are proposing to increase the hospital-specific rates by 3.0 percent (the proposed estimated hospital market basket percentage increase) for FY 2009 for those SCHs and MDHs that submit qualifying quality data and by 1.0 percent for SCHs and MDHs that fail to submit qualifying quality data. Section 1886(b)(3)(C)(iv) of the Act provides that the update factor applicable to the hospital-specific rates for SCHs is equal to the update factor provided under section 1886(b)(3)(B)(iv) of the Act, which, for SCHs in FY 2008, is the market basket rate-of-increase for hospitals that submit qualifying quality data and the market basket rate-of-increase minus 2 percent for hospitals that fail to submit qualifying quality data. Section 1886(b)(3)(D) of the Act provides that the update factor applicable to the hospital-specific rates for MDHs also equals the update factor provided for under section 1886(b)(3)(B)(iv) of the Act, which, for FY 2009, is the market basket rate-of-increase for hospitals that submit qualifying quality data and the market basket rate-of-increase minus 2 percent for hospitals that fail to submit qualifying quality data. 3. General Formula for Calculation of Proposed Prospective Payment Rates for Hospitals Located in Puerto Rico Beginning On or After October 1, 2008, and Before October 1, 2009 Section 1886(d)(9)(E)(iv) of the Act provides that, effective for discharges occurring on or after October 1, 2004, hospitals located in Puerto Rico are paid based on a blend of 75 percent of the national prospective payment rate and 25 percent of the Puerto Rico-specific rate. a. Puerto Rico Rate The Puerto Rico prospective payment rate is determined as follows: *Step 1*
                                —Select the applicable average standardized amount considering the applicable wage index (Table 1C of this Addendum). *Step 2*
                                —Multiply the labor-related portion of the standardized amount by the applicable Puerto Rico-specific wage index. *Step 3*
                                —Add the amount from Step 2 and the nonlabor-related portion of the standardized amount. 
                                ( print page 23715) *Step 4*
                                —Multiply the amount from Step 3 by the applicable MS-DRG relative weight (Table 5 of this Addendum). *Step 5*
                                —Multiply the result in Step 4 by 25 percent. b. National Rate The national prospective payment rate is determined as follows: *Step 1*
                                —Select the applicable average standardized amount. *Step 2*
                                —Multiply the labor-related portion of the standardized amount by the applicable wage index for the geographic area in which the hospital is located or the area to which the hospital is reclassified. *Step 3*
                                —Add the amount from Step 2 and the nonlabor-related portion of the national average standardized amount. *Step 4*
                                —Multiply the amount from Step 3 by the applicable MS-DRG relative weight (Table 5 of this Addendum). *Step 5*
                                —Multiply the result in Step 4 by 75 percent. The sum of the Puerto Rico rate and the national rate computed above equals the prospective payment for a given discharge for a hospital located in Puerto Rico. This rate is then further adjusted if the hospital qualifies for either the IME or DSH adjustment. III. Proposed Changes to Payment Rates for Acute Care Hospital Inpatient Capital-Related Costs for FY 2009 The PPS for acute care hospital inpatient capital-related costs was implemented for cost reporting periods beginning on or after October 1, 1991. Effective with that cost reporting period, hospitals were paid during a 10-year transition period (which extended through FY 2001) to change the payment methodology for Medicare acute care hospital inpatient capital-related costs from a reasonable cost-based methodology to a prospective methodology (based fully on the Federal rate). The basic methodology for determining Federal capital prospective rates is set forth in the regulations at 42 CFR 412.308 through 412.352. Below we discuss the factors that we are proposing to use to determine the capital Federal rate for FY 2009, which would be effective for discharges occurring on or after October 1, 2008. The 10-year transition period ended with hospital cost reporting periods beginning on or after October 1, 2001 (FY 2002). Therefore, for cost reporting periods beginning in FY 2002, all hospitals (except “new” hospitals under § 412.304(c)(2)) are paid based on the capital Federal rate. For FY 1992, we computed the standard Federal payment rate for capital-related costs under the IPPS by updating the FY 1989 Medicare inpatient capital cost per case by an actuarial estimate of the increase in Medicare inpatient capital costs per case. Each year after FY 1992, we update the capital standard Federal rate, as provided at § 412.308(c)(1), to account for capital input price increases and other factors. The regulations at § 412.308(c)(2) provide that the capital Federal rate be adjusted annually by a factor equal to the estimated proportion of outlier payments under the capital Federal rate to total capital payments under the capital Federal rate. In addition, § 412.308(c)(3) requires that the capital Federal rate be reduced by an adjustment factor equal to the estimated proportion of payments for (regular and special) exceptions under § 412.348. Section 412.308(c)(4)(ii) requires that the capital standard Federal rate be adjusted so that the effects of the annual DRG reclassification and the recalibration of DRG weights and changes in the geographic adjustment factor (GAF) are budget neutral. For FYs 1992 through 1995, § 412.352 required that the capital Federal rate also be adjusted by a budget neutrality factor so that aggregate payments for inpatient hospital capital costs were projected to equal 90 percent of the payments that would have been made for capital-related costs on a reasonable cost basis during the respective fiscal year. That provision expired in FY 1996. Section 412.308(b)(2) describes the 7.4 percent reduction to the capital Federal rate that was made in FY 1994, and § 412.308(b)(3) describes the 0.28 percent reduction to the capital Federal rate made in FY 1996 as a result of the revised policy for paying for transfers. In FY 1998, we implemented section 4402 of Pub. L. 105-33, which required that, for discharges occurring on or after October 1, 1997, the budget neutrality adjustment factor in effect as of September 30, 1995, be applied to the unadjusted capital standard Federal rate and the unadjusted hospital-specific rate. That factor was 0.8432, which was equivalent to a 15.68 percent reduction to the unadjusted capital payment rates. An additional 2.1 percent reduction to the rates was effective from October 1, 1997 through September 30, 2002, making the total reduction 17.78 percent. As we discussed in the FY 2003 IPPS final rule (67 FR 50102) and implemented in § 412.308(b)(6), the 2.1 percent reduction was restored to the unadjusted capital payment rates effective October 1, 2002. To determine the appropriate budget neutrality adjustment factor and the regular exceptions payment adjustment during the 10-year transition period, we developed a dynamic model of Medicare inpatient capital-related costs; that is, a model that projected changes in Medicare inpatient capital-related costs over time. With the expiration of the budget neutrality provision, the capital cost model was only used to estimate the regular exceptions payment adjustment and other factors during the transition period. As we explained in the FY 2002 IPPS final rule (66 FR 39911), beginning in FY 2002, an adjustment for regular exception payments is no longer necessary because regular exception payments were only made for cost reporting periods beginning on or after October 1, 1991, and before October 1, 2001 (see § 412.348(b)). Because payments are no longer made under the regular exception policy effective with cost reporting periods beginning in FY 2002, we discontinued use of the capital cost model. The capital cost model and its application during the transition period are described in Appendix B of the FY 2002 IPPS final rule (66 FR 40099). Section 412.374 provides for the use of a blended payment system for payments to hospitals located in Puerto Rico under the IPPS for acute care hospital inpatient capital-related costs. Accordingly, under the capital PPS, we compute a separate payment rate specific to hospitals located in Puerto Rico using the same methodology used to compute the national Federal rate for capital-related costs. In accordance with section 1886(d)(9)(A) of the Act, under the IPPS for acute care hospital operating costs, hospitals located in Puerto Rico are paid for operating costs under a special payment formula. Prior to FY 1998, hospitals located in Puerto Rico were paid a blended operating rate that consisted of 75 percent of the applicable standardized amount specific to Puerto Rico hospitals and 25 percent of the applicable national average standardized amount. Similarly, prior to FY 1998, hospitals located in Puerto Rico were paid a blended capital rate that consisted of 75 percent of the applicable capital Puerto Rico-specific rate and 25 percent of the applicable capital Federal rate. However, effective October 1, 1997, in accordance with section 4406 of Pub. L. 105-33, the methodology for operating payments made to hospitals located in Puerto Rico under the IPPS was revised to make payments based on a blend of 50 percent of the applicable standardized amount specific to Puerto Rico hospitals and 50 percent of the applicable national average standardized amount. In conjunction with this change to the operating blend percentage, effective with discharges occurring on or after October 1, 1997, we also revised the methodology for computing capital payments to hospitals located in Puerto Rico to be based on a blend of 50 percent of the Puerto Rico capital rate and 50 percent of the capital Federal rate. As we discussed in the FY 2005 IPPS final rule (69 FR 49185), section 504 of Pub. L. 108-173 increased the national portion of the operating IPPS payments for hospitals located in Puerto Rico from 50 percent to 62.5 percent and decreased the Puerto Rico portion of the operating IPPS payments from 50 percent to 37.5 percent for discharges occurring on or after April 1, 2004 through September 30, 2004 (see the March 26, 2004 One-Time Notification (Change Request 3158)). In addition, section 504 of Pub. L. 108-173 provided that the national portion of operating IPPS payments for hospitals located in Puerto Rico is equal to 75 percent and the Puerto Rico portion of operating IPPS payments is equal to 25 percent for discharges occurring on or after October 1, 2004. Consistent with that change in operating IPPS payments to hospitals located in Puerto Rico, for FY 2005 (as we discussed in the FY 2005 IPPS final rule), we revised the methodology for computing capital payments to hospitals located in Puerto Rico to be based on a blend of 25 percent of the Puerto Rico capital rate and 75 percent of the capital Federal rate for discharges occurring on or after October 1, 2004. A. Determination of Proposed Federal Hospital Inpatient Capital-Related Prospective Payment Rate Update In the FY 2008 IPPS final rule with comment period (72 FR 66886 through 66888), we established a capital Federal rate 
                                ( print page 23716)
                                of $426.14 for FY 2008. In the discussion that follows, we explain the factors that we are proposing to use to determine the proposed FY 2009 capital Federal rate. In particular, we explain why the proposed FY 2009 capital Federal rate would decrease approximately 1.14 percent, compared to the FY 2008 capital Federal rate. However, taking into account an estimated increase in Medicare fee-for-service discharges in FY 2009 as compared to FY 2008, as well as the estimated increase in payments due to documentation and coding (discussed in section VIII. of Appendix A to this proposed rule), we estimate that the increase in aggregate capital payments would be negligible during this same period (approximately $6 million). Total payments to hospitals under the IPPS are relatively unaffected by changes in the capital prospective payments. Because capital payments constitute about 10 percent of hospital payments, a 1-percent change in the capital Federal rate yields only about a 0.1 percent change in actual payments to hospitals. As noted above, aggregate payments under the capital IPPS are projected to increase in FY 2009 compared to FY 2008. 1. Projected Capital Standard Federal Rate Update a. Description of the Update Framework Under § 412.308(c)(1), the capital standard Federal rate is updated on the basis of an analytical framework that takes into account changes in a capital input price index (CIPI) and several other policy adjustment factors. Specifically, we have adjusted the projected CIPI rate-of-increase as appropriate each year for case-mix index-related changes, for intensity, and for errors in previous CIPI forecasts. The proposed update factor for FY 2009 under that framework is 0.7 percent based on the best data available at this time. The proposed update factor under that framework is based on a projected 1.2 percent increase in the CIPI, a 0.0 percent adjustment for intensity, a 0.0 percent adjustment for case-mix, a −0.5 percent adjustment for the FY 2007 DRG reclassification and recalibration, and a forecast error correction of 0.0 percent. As discussed below in section III.C. of the Addendum to this proposed rule, we continue to believe that the CIPI is the most appropriate input price index for capital costs to measure capital price changes in a given year. We also explain the basis for the FY 2009 CIPI projection in that same section of this Addendum. In addition, as also noted below, the proposed capital rates would be further adjusted to account for documentation and coding improvements under the MS-DRGs discussed in section II.D. of the preamble of this proposed rule. Below we describe the policy adjustments that we are proposing to apply in the update framework for FY 2009. The case-mix index is the measure of the average MS-DRG weight for cases paid under the IPPS. Because the MS-DRG weight determines the prospective payment for each case, any percentage increase in the case-mix index corresponds to an equal percentage increase in hospital payments. The case-mix index can change for any of several reasons: The average resource use of Medicare patients changes (“real” case-mix change);
                            Changes in hospital coding of patient records result in higher weight MS-DRG assignments (“coding effects”); and
                            The annual MS-DRG reclassification and recalibration changes may not be budget neutral (“reclassification effect”). We define real case-mix change as actual changes in the mix (and resource requirements) of Medicare patients as opposed to changes in coding behavior that result in assignment of cases to higher weighted MS-DRGs but do not reflect higher resource requirements. The capital update framework includes the same case-mix index adjustment used in the former operating IPPS update framework (as discussed in the May 18, 2004 IPPS proposed rule for FY 2005 (69 FR 28816)). (We no longer use an update framework to make a recommendation for updating the operating IPPS standardized amounts as discussed in section II. of Appendix B in the FY 2006 IPPS final rule (70 FR 47707).) Absent the projected increase in case-mix resulting from documentation and coding improvements under the recently adopted MS-DRGs, for FY 2009, we are projecting a 1.0 percent total increase in the case-mix index. We estimate that the real case-mix increase will also equal 1.0 percent for FY 2009. The net adjustment for change in case-mix is the difference between the projected real increase in case-mix and the projected total increase in case-mix. Therefore, the net adjustment for case-mix change in FY 2009 is 0.0 percentage points. The capital update framework also contains an adjustment for the effects of DRG reclassification and recalibration. This adjustment is intended to remove the effect on total payments of prior year's changes to the DRG classifications and relative weights, in order to retain budget neutrality for all case-mix index-related changes other than those due to patient severity. Due to the lag time in the availability of data, there is a 2-year lag in data used to determine the adjustment for the effects of DRG reclassification and recalibration. For example, we are adjusting for the effects of the FY 2007 DRG reclassification and recalibration as part of our proposed update for FY 2009. We estimate that FY 2007 DRG reclassification and recalibration resulted in a 0.5 percent change in the case-mix when compared with the case-mix index that would have resulted if we had not made the reclassification and recalibration changes to the DRGs. Therefore, we are proposing to make a −0.5 percent adjustment for DRG reclassification in the proposed update for FY 2009 to maintain budget neutrality. The capital update framework also contains an adjustment for forecast error. The input price index forecast is based on historical trends and relationships ascertainable at the time the update factor is established for the upcoming year. In any given year, there may be unanticipated price fluctuations that may result in differences between the actual increase in prices and the forecast used in calculating the update factors. In setting a prospective payment rate under the framework, we make an adjustment for forecast error only if our estimate of the change in the capital input price index for any year is off by 0.25 percentage points or more. There is a 2-year lag between the forecast and the availability of data to develop a measurement of the forecast error. A forecast error of 0.10 percentage point was calculated for the FY 2007 update. That is, current historical data indicate that the forecasted FY 2007 CIPI (1.1 percent) used in calculating the FY 2007 update factor slightly understated the actual realized price increases (1.2 percent) by 0.10 percentage point. This slight underprediction was mostly due to the incorporation of newly available source data for fixed asset prices and moveable asset prices into the market basket. However, because this estimation of the change in the CIPI is less than 0.25 percentage points, it is not reflected in the update recommended under this framework. Therefore, we are proposing to make a 0.0 percent adjustment for forecast error in the update for FY 2009. Under the capital IPPS update framework, we also make an adjustment for changes in intensity. We calculate this adjustment using the same methodology and data that were used in the past under the framework for operating IPPS. The intensity factor for the operating update framework reflects how hospital services are utilized to produce the final product, that is, the discharge. This component accounts for changes in the use of quality-enhancing services, for changes within DRG severity, and for expected modification of practice patterns to remove noncost-effective services. We calculate case-mix constant intensity as the change in total charges per admission, adjusted for price level changes (the CPI for hospital and related services) and changes in real case-mix. The use of total charges in the calculation of the intensity factor makes it a total intensity factor; that is, charges for capital services are already built into the calculation of the factor. Therefore, we have incorporated the intensity adjustment from the operating update framework into the capital update framework. Without reliable estimates of the proportions of the overall annual intensity increases that are due, respectively, to ineffective practice patterns and the combination of quality-enhancing new technologies and complexity within the DRG system, we assume that one-half of the annual increase is due to each of these factors. The capital update framework thus provides an add-on to the input price index rate of increase of one-half of the estimated annual increase in intensity, to allow for increases within DRG severity and the adoption of quality-enhancing technology. We have developed a Medicare-specific intensity measure based on a 5-year average. Past studies of case-mix change by the RAND Corporation (
                                *Has DRG Creep Crept Up? Decomposing the Case Mix Index Change Between 1987 and 1988*
                                 by G. M. Carter, J. P. Newhouse, and D. A. Relles, R-4098-HCFA/ProPAC (1991)) suggest that real case-mix change was not dependent on total change, but was usually a fairly steady increase of 1.0 to 1.5 percent per year. 
                                ( print page 23717)
                                However, we used 1.4 percent as the upper bound because the RAND study did not take into account that hospitals may have induced doctors to document medical records more completely in order to improve payment. We calculate case-mix constant intensity as the change in total charges per admission, adjusted for price level changes (the CPI for hospital and related services), and changes in real case-mix. As we noted above, in accordance with § 412.308(c)(1)(ii), we began updating the capital standard Federal rate in FY 1996 using an update framework that takes into account, among other things, allowable changes in the intensity of hospital services. For FYs 1996 through 2001, we found that case-mix constant intensity was declining, and we established a 0.0 percent adjustment for intensity in each of those years. For FYs 2002 and 2003, we found that case-mix constant intensity was increasing, and we established a 0.3 percent adjustment and 1.0 percent adjustment for intensity, respectively. For FYs 2004 and 2005, we found that the charge data appeared to be skewed (as discussed in greater detail below), and we established a 0.0 percent adjustment in each of those years. Furthermore, we stated that we would continue to apply a 0.0 percent adjustment for intensity until any increase in charges can be tied to intensity rather than attempts to maximize outlier payments. As noted above, our intensity measure is based on a 5-year average, and therefore, the intensity adjustment for FY 2009 is based on data from the 5-year period beginning with FY 2003 and extending through FY 2007. There continues to be a substantial increase in hospital charges for three of those 5 years without a corresponding increase in the hospital case-mix index. Most dramatically, for FY 2003, the change in hospitals' charges is over 16 percent, which is reflective of the large increases in charges that we found in the 4 years prior to FY 2003 and before our revisions to the outlier policy in 2003 (discussed below). For FY 2004 and FY 2005, the change in hospitals' charges is somewhat lower in comparison to FY 2003, but is still significantly large. For FY 2006 and FY 2007, the change in hospitals' charges appears to be slightly moderating. However, the change in hospitals' charges for FYs 2003 and 2004 and to a somewhat lesser extent FY 2005 remains similar to the considerable increase in hospitals' charges that we found when examining hospitals' charge data in determining the intensity factor in the update recommendations for the past few years, as discussed in the FY 2004 IPPS final rule (68 FR 45482), the FY 2005 IPPS final rule (69 FR 49285), the FY 2006 IPPS final rule (70 FR 47500), the FY 2007 IPPS final rule (72 FR 47500), and the FY 2008 IPPS final rule with comment period (72 FR 47426). If hospitals were treating new or different types of cases, which would result in an appropriate increase in charges per discharge, then we would expect hospitals' case-mix to increase proportionally. As we discussed most recently in the FY 2008 IPPS final rule with comment period (72 FR 47426), because our intensity calculation relies heavily upon charge data and we believe that these charge data may be inappropriately skewed, we established a 0.0 percent adjustment for intensity for FY 2008 just as we did for FYs 2004 through 2007. On June 9, 2003, we published in the 
                                **Federal Register**
                                 revisions to our outlier policy for determining the additional payment for extraordinarily high-cost cases (68 FR 34494 through 34515). These revised policies were effective on August 8, 2003, and October 1, 2003. While it does appear that a response to these policy changes is beginning to occur, that is, the increase in charges for FYs 2004 and 2005 are somewhat less than the previous 4 years, they still show a significant annual increase in charges without a corresponding increase in hospital case-mix. Specifically, the increases in charges in FY 2004 and FY 2005 (approximately 12 percent and 8 percent, respectively), for example, which, while less than the increase in the previous 3 years, are still much higher than increases in years prior to FY 2001. In addition, these increases in charges for FYs 2003, FY 2004, and FY 2005 significantly exceed the respective case-mix increases for the same period. Based on the significant increases in charges for FYs 2003 through 2005 that remain in the 5-year average used for the intensity adjustment, we believe residual effects of hospitals’ charge practices prior to the implementation of the outlier policy revisions established in the June 9, 2003 final rule continue to appear in the data, because it may have taken hospitals some time to adopt changes in their behavior in response to the new outlier policy. Thus, we believe that the FY 2003, FY 2004, FY 2005 charge data may still be skewed. Although it appears that the change in hospitals’ charges is more reasonable because the intensity adjustment is based on a 5-year average, and although the new outlier policy was generally effective in FY 2004, we believe the effects of hospitals attempting to maximize outlier payments, while lessening costs, continue to skew the charge data. Therefore, we are proposing to make a 0.0 percent adjustment for intensity for FY 2009. In the past (FYs 1996 through 2001) when we found intensity to be declining, we believed a zero (rather than negative) intensity adjustment was appropriate. Similarly, we believe that it is appropriate to apply a zero intensity adjustment for FY 2009 until any increase in charges during the 5-year period upon which the intensity adjustment is based can be tied to intensity rather than to attempts to maximize outlier payments. Above, we described the basis of the components used to develop the proposed 0.7 percent capital update factor for all hospitals under the capital update framework for FY 2009 as shown in the table below. CMS Proposed FY 2009 Update Factor to the Capital Federal Rate
Capital Input Price Index
1.2Intensity
0.0Case-Mix Adjustment Factors:Real Across DRG Change
−1.0Projected Case-Mix Change
1.0Subtotal
1.2Effect of FY 2007 Reclassification and Recalibration
−0.5Forecast Error Correction
0.0Total Update for Hospitals
0.7
 b. Comparison of CMS and MedPAC Update Recommendation In its March 2008 Report to Congress, MedPAC did not make a specific update recommendation for capital IPPS payments for FY 2009. However, in that same report, in assessing the adequacy of current payments and costs, MedPAC recommended an update to the hospital inpatient and outpatient PPS rates equal to the increase in the hospital market basket in FY 2009, concurrent with a quality incentive program. (MedPAC's Report to the Congress: Medicare Payment Policy, March 2008, Section 2A.) 2. Proposed Outlier Payment Adjustment Factor Section 412.312(c) establishes a unified outlier payment methodology for inpatient operating and inpatient capital-related costs. A single set of thresholds is used to identify outlier cases for both inpatient operating and inpatient capital-related payments. Section 412.308(c)(2) provides that the standard Federal rate for inpatient capital-related costs be reduced by an adjustment factor equal to the estimated proportion of capital-related outlier payments to total inpatient capital-related PPS payments. The outlier thresholds are set so that operating outlier payments are projected to be 5.1 percent of total operating DRG payments. In the FY 2008 IPPS final rule with comment (72 FR 66887), we estimated that outlier payments for capital would equal 4.77 percent of inpatient capital-related payments based on the capital Federal rate in FY 2008. Based on the proposed thresholds as set forth 
                                ( print page 23718)
                                in section II.A. of this Addendum, we estimate that proposed outlier payments for capital-related costs would equal 5.73 percent for inpatient capital-related payments based on the proposed capital Federal rate in FY 2009. Therefore, we are proposing to apply an outlier adjustment factor of 0.9427 to the capital Federal rate. Thus, we estimate that the percentage of capital outlier payments to total capital standard payments for FY 2009 will be higher than the percentages for FY 2008. This increase is primarily due to the proposed decrease to the fixed-loss amount, which is discussed section II.A. of this Addendum. The outlier reduction factors are not built permanently into the capital rates; that is, they are not applied cumulatively in determining the capital Federal rate. The proposed FY 2009 outlier adjustment of 0.9427 is a −1.01percent change from the FY 2008 outlier adjustment of 0.9523. Therefore, the net change in the proposed outlier adjustment to the capital Federal rate for FY 2009 is 0.9899 (0.9427/0.9523). Thus, the proposed outlier adjustment decreases the FY 2009 capital Federal rate by 1.01 percent compared with the FY 2008 outlier adjustment. 3. Proposed Budget Neutrality Adjustment Factor for Changes in DRG Classifications and Weights and the GAF Section 412.308(c)(4)(ii) requires that the capital Federal rate be adjusted so that aggregate payments for the fiscal year based on the capital Federal rate after any changes resulting from the annual DRG reclassification and recalibration and changes in the GAF are projected to equal aggregate payments that would have been made on the basis of the capital Federal rate without such changes. Because we implemented a separate GAF for Puerto Rico, we apply separate budget neutrality adjustments for the national GAF and the Puerto Rico GAF. We apply the same budget neutrality factor for DRG reclassifications and recalibration nationally and for Puerto Rico. Separate adjustments were unnecessary for FY 1998 and earlier because the GAF for Puerto Rico was implemented in FY 1998. In the past, we used the actuarial capital cost model (described in Appendix B of the FY 2002 IPPS final rule (66 FR 40099)) to estimate the aggregate payments that would have been made on the basis of the capital Federal rate with and without changes in the DRG classifications and weights and in the GAF to compute the adjustment required to maintain budget neutrality for changes in DRG weights and in the GAF. During the transition period, the capital cost model was also used to estimate the regular exception payment adjustment factor. As we explain in section III.A. of this Addendum, beginning in FY 2002, an adjustment for regular exception payments is no longer necessary. Therefore, we will no longer use the capital cost model. Instead, we are using historical data based on hospitals’ actual cost experiences to determine the exceptions payment adjustment factor for special exceptions payments. To determine the proposed factors for FY 2009, we compared (separately for the national capital rate and the Puerto Rico capital rate) estimated aggregate capital Federal rate payments based on the FY 2008 DRG relative weights and the FY 2008 GAF to estimated aggregate capital Federal rate payments based on the proposed FY 2009 relative weights and the proposed FY 2009 GAFs. We established the final FY 2008 budget neutrality factors of 0.9902 for the national capital rate and 0.9955 for the Puerto Rico capital rate. In making the comparison, we set the exceptions reduction factor to 1.00. To achieve budget neutrality for the changes in the national GAFs, based on calculations using updated data, we are proposing to apply an incremental budget neutrality adjustment of 1.0013 for FY 2009 to the previous cumulative FY 2008 adjustments of 0.9902, yielding a proposed adjustment of 0.9915, through FY 2009. For the Puerto Rico GAFs, we are proposing to apply a proposed incremental budget neutrality adjustment of 1.0009 for FY 2009 to the previous cumulative FY 2008 adjustment of 0.9955, yielding a proposed cumulative adjustment of 0.9965 (calculated with unrounded numbers) through FY 2009. We then compared estimated aggregate capital Federal rate payments based on the FY 2008 DRG relative weights and the proposed FY 2009 GAFs to estimated aggregate capital Federal rate payments based on the cumulative effects of the proposed FY 2009 DRG relative weights and the proposed FY 2009 GAFs. The proposed incremental adjustment for proposed DRG classifications and proposed changes in relative weights is 0.9994 both nationally and for Puerto Rico. The proposed cumulative adjustments for DRG classifications and changes in relative weights and for proposed changes in the GAFs through FY 2009 are 0.9909 nationally and 0.9959 for Puerto Rico. The following table summarizes the adjustment factors for each fiscal year:
 
 
  The methodology used to determine the recalibration and geographic (DRG/GAF) budget neutrality adjustment factor is similar to the methodology used in establishing budget neutrality adjustments under the PPS for operating costs. One difference is that, under the operating PPS, the budget neutrality adjustments for the effect of geographic reclassifications are determined separately from the effects of other changes in the hospital wage index and the DRG relative weights. Under the capital PPS, there is a single DRG/GAF budget neutrality adjustment factor (the national capital rate and the Puerto Rico capital rate are determined separately) for changes in the GAF (including geographic reclassification) and the DRG relative weights. In addition, there is no adjustment for the effects that geographic reclassification has on the other payment parameters, such as the payments for serving low-income patients or indirect medical education payments. In the FY 2008 IPPS correction notice (72 FR 57636), we calculated a GAF/DRG budget neutrality factor of 0.9996 for FY 2008. For FY 2009, we are proposing to establish a GAF/DRG budget neutrality factor of 1.0007. The GAF/DRG budget neutrality factors are 
                            ( print page 23720)
                            built permanently into the capital rates; that is, they are applied cumulatively in determining the capital Federal rate. This follows the requirement that estimated aggregate payments each year be no more or less than they would have been in the absence of the annual DRG reclassification and recalibration and changes in the GAFs. The incremental change in the proposed adjustment from FY 2008 to FY 2009 is 1.0007. The cumulative change in the proposed capital Federal rate due to this proposed adjustment is 0.9909 (the product of the incremental factors for FYs 1994 though 2008 and the proposed incremental factor of 1.0007 for FY 2009). (We note that averages of the incremental factors that were in effect during FYs 2004 and 2005, respectively, were used in the calculation of the proposed cumulative adjustment of 0.9909 for FY 2009.) The proposed factor accounts for DRG reclassifications and recalibration and for changes in the GAFs. It also incorporates the effects on the proposed GAFs of FY 2009 geographic reclassification decisions made by the MGCRB compared to FY 2008 decisions. However, it does not account for changes in payments due to changes in the DSH and IME adjustment factors. 4. Exceptions Payment Adjustment Factor Section 412.308(c)(3) of our regulations requires that the capital standard Federal rate be reduced by an adjustment factor equal to the estimated proportion of additional payments for both regular exceptions and special exceptions under § 412.348 relative to total capital PPS payments. In estimating the proportion of regular exception payments to total capital PPS payments during the transition period, we used the actuarial capital cost model originally developed for determining budget neutrality (described in Appendix B of the FY 2002 IPPS final rule (66 FR 40099)) to determine the exceptions payment adjustment factor, which was applied to both the Federal and hospital-specific capital rates. An adjustment for regular exception payments is no longer necessary in determining the FY 2009 capital Federal rate because, in accordance with § 412.348(b), regular exception payments were only made for cost reporting periods beginning on or after October 1, 1991 and before October 1, 2001. Accordingly, as we explained in the FY 2002 IPPS final rule (66 FR 39949), in FY 2002 and subsequent fiscal years, no payments are made under the regular exceptions provision. However, in accordance with § 412.308(c), we still need to compute a budget neutrality adjustment for special exception payments under § 412.348(g). We describe our methodology for determining the exceptions adjustment used in calculating the FY 2008 capital Federal rate below. Under the special exceptions provision specified at § 412.348(g)(1), eligible hospitals include SCHs, urban hospitals with at least 100 beds that have a disproportionate share percentage of at least 20.2 percent or qualify for DSH payments under § 412.106(c)(2), and hospitals with a combined Medicare and Medicaid inpatient utilization of at least 70 percent. An eligible hospital may receive special exceptions payments if it meets the following criteria: (1) A project need requirement as described at § 412.348(g)(2), which, in the case of certain urban hospitals, includes an excess capacity test as described at § 412.348(g)(4); (2) an age of assets test as described at § 412.348(g)(3); and (3) a project size requirement as described at § 412.348(g)(5). Based on information compiled from our fiscal intermediaries, six hospitals have qualified for special exceptions payments under § 412.348(g). Because we have cost reports ending in FY 2005 for all of these hospitals, we calculated the adjustment based on actual cost experience. Using data from cost reports ending in FY 2005 from the December 2007 update of the HCRIS data, we divided the capital special exceptions payment amounts for the six hospitals that qualified for special exceptions by the total capital PPS payment amounts (including special exception payments) for all hospitals. Based on the data from cost reports ending in FY 2005, this ratio is rounded to 0.0002. We also computed the ratios for FY 2004 and FY 2003, which both round to 0.0003. Since the ratios are trending downward, we are proposing an adjustment of 0.0002. Because special exceptions are budget neutral, we are proposing to offset the proposed capital Federal rate by 0.02 percent for special exceptions payments for FY 2009. Therefore, the proposed exceptions adjustment factor is equal to 0.9998 (1−0.0002) to account for special exceptions payments in FY 2009. In the FY 2008 IPPS final rule with comment period (72 FR 47430), we estimated that total (special) exceptions payments for FY 2008 would equal 0.03 percent of aggregate payments based on the capital Federal rate. Therefore, we applied an exceptions adjustment factor of 0.9997 (1 − 0.0003) to determine the FY 2008 capital Federal rate. As we stated above, we estimate that exceptions payments in FY 2009 would equal 0.02 percent of aggregate payments based on the proposed FY 2009 capital Federal rate. Therefore, we are proposing to apply an exceptions payment adjustment factor of 0.9998 to the proposed capital Federal rate for FY 2009. The proposed exceptions adjustment factor for FY 2009 is slightly lower than the factor used in determining the FY 2008 capital Federal rate in the FY 2008 IPPS final rule. The exceptions reduction factors are not built permanently into the capital rates; that is, the factors are not applied cumulatively in determining the capital Federal rate. Therefore, the net change in the proposed exceptions adjustment factor used in determining the proposed FY 2009 capital Federal rate is 1.0001 (0.9998/0.9997). 5. Proposed Capital Standard Federal Rate for FY 2009 In the FY 2008 IPPS final rule with comment period (72 FR 66888), we established a capital Federal rate of $426.14 for all hospitals for FY 2008. We are proposing to establish an update of 0.7 percent in determining the proposed FY 2009 capital Federal rate for all hospitals. However, under the statutory authority at section 1886(d)(3)(A)(vi) of the Act, and as specified in section 7 of Pub. L. 110-90, we are proposing an additional 0.9 percent reduction to the proposed standardized amounts for both capital and operating Federal payment rates in FY 2009. The proposed 0.9 percent reduction is based on our Actuary's analysis of the effect of changes in coding or classification of discharges that do not reflect real changes in case-mix in light of the adoption of the MS-DRGs. Although the proposed 0.9 percent reduction is outside the established process for developing the proposed capital Federal payment rate, it nevertheless is a factor in the final prospective payment rate to hospitals for capital-related costs. For that reason, the proposed national capital Federal payment rate proposed in this proposed rule was determined by applying the proposed 0.9 percent reduction. (As discussed below in section II.A.6. of this Addendum, we are not proposing to apply the proposed 0.9 percent reduction in developing the proposed FY 2009 Puerto Rico-specific capital rate.) As a result of the proposed 0.70 percent update and other proposed budget neutrality factors discussed above, we are proposing to establish a capital Federal rate of $421.29 for FY 2009. The proposed capital Federal rate for FY 2009 was calculated as follows: The proposed FY 2009 update factor is 1.0070, that is, the update is 0.70 percent.
                        The proposed FY 2009 budget neutrality adjustment factor that is applied to the capital standard Federal payment rate for changes in the DRG relative weights and in the GAFs is 1.0007.
                        The proposed FY 2009 outlier adjustment factor is 0.9427.
                        The proposed FY 2009 (special) exceptions payment adjustment factor is 0.9998.
                        The proposed FY 2009 reduction for improvements in documentation and coding under the MS-DRGs is 0.9 percent. Because the proposed capital Federal rate has already been adjusted for differences in case-mix, wages, cost-of-living, indirect medical education costs, and payments to hospitals serving a disproportionate share of low-income patients, we are not proposing to make additional adjustments in the proposed capital standard Federal rate for these factors, other than the budget neutrality factor for changes in the DRG relative weights and the GAFs. We are providing the following chart that shows how each of the proposed factors and adjustments for FY 2009 affected the computation of the proposed FY 2009 capital Federal rate in comparison to the FY 2008 capital Federal rate. The proposed FY 2009 update factor has the effect of increasing the proposed capital Federal rate by 0.70 percent compared to the FY 2008 capital Federal rate. The proposed GAF/DRG budget neutrality factor has the effect of increasing the proposed capital Federal rate by 0.07 percent. The proposed FY 2009 outlier adjustment factor has the effect of decreasing the proposed capital Federal rate by 1.01 percent compared to the FY 2008 capital Federal rate. The proposed FY 2009 exceptions payment adjustment factor has the effect of increasing the proposed capital Federal rate by 0.01 percent. The proposed adjustment for improvements in documentation and coding 
                            ( print page 23721)
                            under the MS-DRGs has the effect of decreasing the proposed FY 2009 capital Federal rate by 0.9 percent as compared to the FY 2008 capital Federal rate. The combined effect of all the proposed changes decreases the proposed capital Federal rate by 1.14 percent compared to the FY 2008 capital Federal rate. Comparison of Factors and Adjustments: FY 2008 Capital Federal Rate and Proposed FY 2009 Capital Federal Rate
FY 2008
Proposed FY 2009 4
Change
Percent change 5Update Factor 1
1.0090
1.0070
1.0070
0.70GAF/DRG Adjustment Factor 1
0.9996
1.0007
1.0007
0.07Outlier Adjustment Factor 2
0.9523
0.9427
0.9899
−1.01Exceptions Adjustment Factor 2
0.9997
0.9998
1.0001
0.01MS-DRG Coding and Documentation Improvements Adjustment Factor 3
0.9940
0.9910
0.9910
−0.90Capital Federal Rate
$426.14
$421.29
0.9886
−1.141
                             The update factor and the GAF/DRG budget neutrality factors are built permanently into the capital rates. Thus, for example, the incremental change from FY 2008 to FY 2009 resulting from the application of the proposed 1.0007 GAF/DRG budget neutrality factor for FY 2009 is 1.0007.2
                             The outlier reduction factor and the exceptions adjustment factor are not built permanently into the capital rates; that is, these factors are not applied cumulatively in determining the capital rates. Thus, for example, the net change resulting from the application of the proposed FY 2009 outlier adjustment factor is 0.9427/0.9523, or 0.9899.3
                             Proposed adjustment to FY 2009 IPPS rates to account for documentation and coding improvements expected to result from the adoption of the MS-DRGs, as discussed above in section III.D. of the Addendum to this proposed rule.4
                             Proposed factors for FY 2009, as discussed above in section III. of this Addendum.5
                             Percent change of individual factors may not sum due to rounding.
 6. Proposed Special Capital Rate for Puerto Rico Hospitals Section 412.374 provides for the use of a blended payment system for payments to hospitals located in Puerto Rico under the PPS for acute care hospital inpatient capital-related costs. Accordingly, under the capital PPS, we compute a separate payment rate specific to hospitals located in Puerto Rico using the same methodology used to compute the national Federal rate for capital-related costs. Under the broad authority of section 1886(g) of the Act, as discussed in section V. of the preamble of this proposed rule, beginning with discharges occurring on or after October 1, 2004, capital payments to hospitals located in Puerto Rico are based on a blend of 25 percent of the Puerto Rico capital rate and 75 percent of the capital Federal rate. The Puerto Rico capital rate is derived from the costs of Puerto Rico hospitals only, while the capital Federal rate is derived from the costs of all acute care hospitals participating in the IPPS (including Puerto Rico). To adjust hospitals' capital payments for geographic variations in capital costs, we apply a GAF to both portions of the blended capital rate. The GAF is calculated using the operating IPPS wage index, and varies depending on the labor market area or rural area in which the hospital is located. We use the Puerto Rico wage index to determine the GAF for the Puerto Rico part of the capital-blended rate and the national wage index to determine the GAF for the national part of the blended capital rate. Because we implemented a separate GAF for Puerto Rico in FY 1998, we also apply separate budget neutrality adjustments for the national GAF and for the Puerto Rico GAF. However, we apply the same budget neutrality factor for DRG reclassifications and recalibration nationally and for Puerto Rico. As we stated above in section III.A.4. of this Addendum, for Puerto Rico, the proposed GAF budget neutrality factor is 1.0009, while the DRG adjustment is 0.9994, for a combined proposed cumulative adjustment of 1.0004. In computing the payment for a particular Puerto Rico hospital, the Puerto Rico portion of the capital rate (25 percent) is multiplied by the Puerto Rico-specific GAF for the labor market area in which the hospital is located, and the national portion of the capital rate (75 percent) is multiplied by the national GAF for the labor market area in which the hospital is located (which is computed from national data for all hospitals in the United States and Puerto Rico). In FY 1998, we implemented a 17.78 percent reduction to the Puerto Rico capital rate as a result of Pub. L. 105-33. In FY 2003, a small part of that reduction was restored. For FY 2008, before application of the GAF, the special capital rate for hospitals located in Puerto Rico was $201.67 for discharges occurring on or after October 1, 2007, through September 30, 2008 (72 FR 66888). However, as discussed in greater detail in section II.D. of the preamble of this proposed rule, we are revising this rate in a forthcoming correction notice that will be retroactive to October 1, 2007, to remove the application of the 0.6 percent documentation and coding adjustment for FY 2008, consistent with the correction to the Puerto Rico specific standardized amount for FY 2008. The statute gives broad authority to the Secretary under section 1886(g) of the Act, with respect to the development of and adjustments to a capital PPS. Although we would not be outside the authority of section 1886(g) of the Act in applying the documentation and coding adjustment to the Puerto Rico-specific portion of the capital payment rate, we have historically made changes to the capital PPS consistent with those changes made to the IPPS. Thus, we are removing the documentation and coding adjustment from the FY 2008 Puerto Rico-specific portion of the blended capital payment rate, consistent with its removal from the Puerto Rico-specific standardized amount under the IPPS for operating costs. Furthermore, we are not proposing to apply the 0.9 percent documentation and coding adjustment to the proposed FY 2009 Puerto Rico-specific portion of the blended capital payment. However, as also discussed in section II.D. of the preamble of this proposed rule, we may propose to apply such an adjustment to the Puerto Rico operating and capital rates in the future. With the changes we are proposing to make to the other factors used to determine the capital rate, the proposed FY 2009 special capital rate for hospitals in Puerto Rico is $197.19. B. Calculation of the Proposed Inpatient Capital-Related Prospective Payments for FY 2009 Because the 10-year capital PPS transition period ended in FY 2001, all hospitals (except “new” hospitals under § 412.324(b) and under § 412.304(c)(2)) are paid based on 100 percent of the capital Federal rate in FY 2007. The applicable capital Federal rate was determined by making the following adjustments: For outliers, by dividing the capital standard Federal rate by the outlier reduction factor for that fiscal year; and
                        For the payment adjustments applicable to the hospital, by multiplying the hospital's GAF, disproportionate share adjustment factor, and IME adjustment factor, when appropriate. For purposes of calculating payments for each discharge during FY 2009, the capital standard Federal rate would be adjusted as follows: (Standard Federal Rate) × (DRG weight) × (GAF) × (COLA for hospitals located in Alaska and Hawaii) × (1 + Disproportionate Share Adjustment Factor + IME Adjustment Factor, if applicable). The result is the adjusted capital Federal rate. (As discussed above and in section V. of the preamble of this proposed rule, we eliminated the large urban add-on adjustment in existing regulations at § 412.316, beginning in FY 2008.) Hospitals also may receive outlier payments for those cases that qualify under the thresholds established for each fiscal year. Section 412.312(c) provides for a single 
                            ( print page 23722)
                            set of thresholds to identify outlier cases for both inpatient operating and inpatient capital-related payments. The proposed outlier thresholds for FY 2009 are in section II.A. of this Addendum. For FY 2009, a case qualifies as a cost outlier if the cost for the case plus the IME and DSH payments is greater than the prospective payment rate for the DRG plus the proposed fixed-loss amount of $21,025. An eligible hospital may also qualify for a special exceptions payment under § 412.348(g) up through the 10th year beyond the end of the capital transition period if it meets the following criteria: (1) A project need requirement described at § 412.348(g)(2), which in the case of certain urban hospitals includes an excess capacity test as described at § 412.348(g)(4); and (2) a project size requirement as described at § 412.348(g)(5). Eligible hospitals include SCHs, urban hospitals with at least 100 beds that have a DSH patient percentage of at least 20.2 percent or qualify for DSH payments under § 412.106(c)(2), and hospitals that have a combined Medicare and Medicaid inpatient utilization of at least 70 percent. Under § 412.348(g)(8), the amount of a special exceptions payment is determined by comparing the cumulative payments made to the hospital under the capital PPS to the cumulative minimum payment level. This amount is offset by: (1) Any amount by which a hospital's cumulative capital payments exceed its cumulative minimum payment levels applicable under the regular exceptions process for cost reporting periods beginning during which the hospital has been subject to the capital PPS; and (2) any amount by which a hospital's current year operating and capital payments (excluding 75 percent of operating DSH payments) exceed its operating and capital costs. Under § 412.348(g)(6), the minimum payment level is 70 percent for all eligible hospitals. During the transition period, new hospitals (as defined under § 412.300) were exempt from the capital IPPS for their first 2 years of operation and were paid 85 percent of their reasonable costs during that period. Effective with the third year of operation through the remainder of the transition period, under § 412.324(b), we paid the hospitals under the appropriate transition methodology (if the hold-harmless methodology were applicable, the hold-harmless payment for assets in use during the base period would extend for 8 years, even if the hold-harmless payments extend beyond the normal transition period). Under § 412.304(c)(2), for cost reporting periods beginning on or after October 1, 2002, we pay a new hospital 85 percent of its reasonable costs during the first 2 years of operation unless it elects to receive payment based on 100 percent of the capital Federal rate. Effective with the third year of operation, we pay the hospital based on 100 percent of the capital Federal rate (that is, the same methodology used to pay all other hospitals subject to the capital PPS). C. Capital Input Price Index 1. Background Like the operating input price index, the capital input price index (CIPI) is a fixed-weight price index that measures the price changes associated with capital costs during a given year. The CIPI differs from the operating input price index in one important aspect—the CIPI reflects the vintage nature of capital, which is the acquisition and use of capital over time. Capital expenses in any given year are determined by the stock of capital in that year (that is, capital that remains on hand from all current and prior capital acquisitions). An index measuring capital price changes needs to reflect this vintage nature of capital. Therefore, the CIPI was developed to capture the vintage nature of capital by using a weighted-average of past capital purchase prices up to and including the current year. We periodically update the base year for the operating and capital input prices to reflect the changing composition of inputs for operating and capital expenses. The CIPI was last rebased to FY 2002 in the FY 2006 IPPS final rule (70 FR 47387). 2. Forecast of the CIPI for FY 2009 Based on the latest forecast by Global Insight, Inc. (first quarter of 2008), we are forecasting the CIPI to increase 1.2 percent in FY 2009. This reflects a projected 1.9 percent increase in vintage-weighted depreciation prices (building and fixed equipment, and movable equipment), and a 2.9 percent increase in other capital expense prices in FY 2009, partially offset by 2.8 percent decline in vintage-weighted interest expenses in FY 2009. The weighted average of these three factors produces the 1.2 percent increase for the CIPI as a whole in FY 2009. IV. Proposed Changes to Payment Rates for Excluded Hospitals and Hospital Units: Rate-of-Increase Percentages Historically, hospitals and hospital units excluded from the prospective payment system received payment for inpatient hospital services they furnished on the basis of reasonable costs, subject to a rate-of-increase ceiling. An annual per discharge limit (the target amount as defined in § 413.40(a)) was set for each hospital or hospital unit based on the hospital's own cost experience in its base year. The target amount was multiplied by the Medicare discharges and applied as an aggregate upper limit (the ceiling as defined in § 413.40(a)) on total inpatient operating costs for a hospital's cost reporting period. Prior to October 1, 1997, these payment provisions applied consistently to all categories of excluded providers (rehabilitation hospitals and units (now referred to as IRFs), psychiatric hospitals and units (now referred to as IPFs), LTCHs, children's hospitals, and cancer hospitals). Payment for services furnished in children's hospitals and cancer hospitals that are excluded from the IPPS continues to be subject to the rate-of-increase ceiling based on the hospital's own historical cost experience. (We note that, in accordance with § 403.752(a), RNHCIs are also subject to the rate-of-increase limits established under § 413.40 of the regulations.) We are proposing that the FY 2009 rate-of-increase percentage for cancer and children's hospitals and RNHCIs is the percentage increase in the FY 2009 IPPS operating market basket, estimated to be 3.0 percent. Consistent with our historical approach, if more recent data are available for the final rule, we will use those data to calculate the IPPS operating market basket. For this proposed rule, we are proposing to calculate the IPPS operating market basket for FY 2009 using the most recent data available. For cancer and children's hospitals and RNHCIs, the proposed FY 2009 rate-of-increase percentage that is applied to FY 2008 target amounts in order to calculate the proposed FY 2009 target amounts is based on Global Insight, Inc.'s 2008 forecast of the IPPS operating market basket increase, in accordance with the applicable regulations at 42 CFR 413.40. IRFs, IPFs, and LTCHs were previously paid under the reasonable cost methodology. However, the statute was amended to provide for the implementation of prospective payment systems for IRFs, IPFs, and LTCHs. In general, the prospective payment systems for IRFs, IPFs, and LTCHs provide transitioning periods of varying lengths of time during which a portion of the prospective payment is based on cost-based reimbursement rules under 42 CFR Part 413 (certain providers do not receive a transitioning period or may elect to bypass the transition as applicable under 42 CFR part 412, subparts N, O, and P.) We note that the various transitioning periods provided for under the IRF PPS, the IPF PPS, and the LTCH PPS have ended. For cost reporting periods beginning on or after October 1, 2002, all IRFs are paid 100 percent of the adjusted Federal rate under the IRF PPS. Therefore, for cost reporting periods beginning on or after October 1, 2002, no portion of an IRF PPS payment is subject to 42 CFR part 413. Similarly, for cost reporting periods beginning on or after October 1, 2006, all LTCHs are paid 100 percent of the adjusted Federal prospective payment rate under the LTCH PPS. Therefore, for cost reporting periods beginning on or after October 1, 2006, no portion of the LTCH PPS payment is subject to 42 CFR part 413. Likewise, for cost reporting periods beginning on or after January 1, 2008, all IPFs are paid 100 percent of the Federal per diem amount under the IPF PPS. Therefore, for cost reporting periods beginning on or after January 1, 2008, no portion of an IPF PPS payment is subject to 42 CFR part 413. V. Tables This section contains the tables referred to throughout the preamble to this proposed rule and in this Addendum. Tables 1A, 1B, 1C, 1D, 2, 3A, 3B, 4A, 4B, 4C, 4D, 4D-1, 4D-2, 4E, 4F, 4G, 4H, 4J, 5, 6A, 6B, 6C, 6D, 6E, 6F, 7A, 7B, 8A, 8B, 8C, 9A, 9C, 10, and 11 are presented below. The following tables discussed in section II. of the preamble of this proposed rule are available only through the Internet on the CMS Web site at: 
                            *http://www.cms.hhs.gov/​AcuteInpatientPPS/​:*
                             Table 6G.—Additions to the CC Exclusions List; Table 6H.—Deletions from the CC Exclusions List; Table 6I.—Complete List of Complication and Comorbidity (CC) Exclusions; Table 6J.—Major Complication and Comorbidity (MCC) List; and Table 6K.—Complication and Comorbidity (CC).
                            ( print page 23723) The tables presented in this section of the Addendum are as follows: Table 1A.—National Adjusted Operating Standardized Amounts, Labor/Nonlabor (69.7 Percent Labor Share/30.3 Percent Nonlabor Share If Wage Index Is Greater Than 1) Table 1B.—National Adjusted Operating Standardized Amounts, Labor/Nonlabor (62 Percent Labor Share/38 Percent Nonlabor Share If Wage Index Is Less Than or Equal To 1) Table 1C.—Adjusted Operating Standardized Amounts for Puerto Rico, Labor/Nonlabor Table 1D.—Capital Standard Federal Payment Rate Table 2.—Hospital Case-Mix Indexes for Discharges Occurring in Federal Fiscal Year 2007; Hospital Wage Indexes for Federal Fiscal Year 2009; Hospital Average Hourly Wages for Federal Fiscal Years 2007 (2003 Wage Data), 2008 (2004 Wage Data), and 2009 (2005 Wage Data); and 3-Year Average of Hospital Average Hourly Wages Table 3A.—FY 2009 and 3-Year Average Hourly Wage for Urban Areas by CBSA Table 3B.—FY 2009 and 3-Year Average Hourly Wage for Rural Areas by CBSA Table 4A.—Wage Index and Capital Geographic Adjustment Factor (GAF) for Urban Areas by CBSA and by State—FY 2009 Table 4B.—Wage Index and Capital Geographic Adjustment Factor (GAF) for Rural Areas by CBSA and by State—FY 2009 Table 4C.—Wage Index and Capital Geographic Adjustment Factor (GAF) for Hospitals That Are Reclassified by CBSA and by State—FY 2009 Table 4D-1.—Rural Floor Budget Neutrality Factors—FY 2009 Table 4D-2.—Urban Areas with Hospitals Receiving the Statewide Rural Floor or Imputed Floor Wage Index—FY 2009 Table 4E.—Urban CBSAs and Constituent Counties—FY 2009 Table 4F.—Puerto Rico Wage Index and Capital Geographic Adjustment Factor (GAF) by CBSA—FY 2009 Table 4J.—Out-Migration Adjustment—FY 2009 Table 5.—List of Medicare Severity Diagnosis-Related Groups (MS-DRGs), Relative Weighting Factors, and Geometric and Arithmetic Mean Length of Stay Table 6A.—New Diagnosis Codes Table 6B.—New Procedure Codes Table 6C.—Invalid Diagnosis Codes Table 6D.—Invalid Procedure Codes Table 6E.—Revised Diagnosis Code Titles Table 6F.—Revised Procedure Code Titles Table 7A.—Medicare Prospective Payment System Selected Percentile Lengths of Stay: FY 2007 MedPAR Update—December 2007 GROUPER V25.0 MS-DRGs Table 7B.—Medicare Prospective Payment System Selected Percentile Lengths of Stay: FY 2007 MedPAR Update—December 2007 GROUPER V26.0 MS-DRGs Table 8A.—Proposed Statewide Average Operating Cost-to-Charge Ratios— March 2008 Table 8B.—Proposed Statewide Average Capital Cost-to-Charge Ratios—March 2008 Table 8C.—Proposed Statewide Average Total Cost-to-Charge Ratios for LTCHs—March 2008 Table 9A.—Hospital Reclassifications and Redesignations—FY  2009 Table 9C.—Hospitals Redesignated as Rural under Section 1886(d)(8)(E) of the Act—FY 2009 Table 10.—Geometric Mean Plus the Lesser of .75 of the National Adjusted Operating Standardized Payment Amount (Increased to Reflect the Difference Between Costs and Charges) or .75 of One Standard Deviation of Mean Charges by Medicare Severity Diagnosis-Related Group (MS-DRG)—March 2008 Table 11.—Proposed FY 2009 MS-LTC-DRGs, Proposed Relative Weights, Proposed Geometric Average Length of Stay, and Proposed Short-Stay Outlier Threshold Table 1A.—National Adjusted Operating Standardized Amounts, Labor/Nonlabor
[69.7 Percent Labor Share/30.3 Percent Nonlabor Share if Wage Index Greater Than 1]
Full update (3.0 percent)
Reduced update (1.0 percent)Labor-related
Nonlabor-related
Labor-related
Nonlabor-related$3,553.98
$1,544.98
$3,484.97
$1,514.98
 Table 1B.—National Adjusted Operating Standardized Amounts, Labor/Nonlabor
[62 Percent Labor Share/38 Percent Nonlabor Share if Wage Index Less Than or Equal to 1]
Full update (3.0 percent)
Reduced update (1.0 percent)Labor-related
Nonlabor-related
Labor-related
Nonlabor-related$3,161.36
$1,937.60
$3,099.97
$1,899.98
 Table 1C.—Adjusted Operating Standardized Amounts for Puerto Rico, Labor/Nonlabor
Rates if wage index
                                 greater than 1
Rates if wage index less than or equal to 1Labor
Nonlabor
Labor
NonlaborNational
$3,553.98
$1,544.98
$3,161.36
$1,937.60Puerto Rico
1,501.82
920.46
1,421.88
1,000.40
 Table 1D.—Capital Standard Federal Payment Rate
RateNational
$421.29Puerto Rico
197.19
 
 
 Table 2.—Hospital Case-Mix Indexes for Discharges Occurring in Federal Fiscal Year 2007; Hospital Wage Indexes for Federal Fiscal Year 2009; Hospital Average Hourly Wages for Federal Fiscal Years 2007 (2003 Wage Data), 2008 (2004 Wage Data) and 2009 (2005 Wage Data); and 3-Year Average of Hospital Average Hourly Wages
Provider No.
Case-mix index 2
FY 2009 wage index
Average 
                                 hourly wage FY 2007
Average 
                                 hourly wage FY 2008
Average 
                                 
                                    hourly wage FY 2009 1
Average 
                                 hourly wage**  
                                 (3 years)010001
1.5513
0.8397
22.1989
23.2195
24.7672
23.3821010005
1.1192
0.8636
23.6022
23.0203
25.7755
24.1406010006
1.4819
0.7883
23.4975
23.7502
25.0258
24.0951010007
1.0611
0.7647
19.9329
21.3492
22.0185
21.1334010008
1.0242
0.7821
17.9533
22.0793
23.2562
20.8430010009
0.9973
0.8636
23.5626
25.9011
25.8405
25.1048010010
1.0945
0.8786
27.0385
22.8602
24.8375
24.7458010011
1.6762
0.8786
27.6658
27.4668
27.1978
27.4380010012
1.1633
0.9524
24.4059
25.5767
26.4968
25.4682010015
1.0453
0.7693
22.3383
27.0806
23.6811
24.1695010016
1.5794
0.8786
24.6488
26.8611
28.9705
26.8024010018
1.4886
0.8786
23.7048
24.8974
26.9498
25.1709010019
1.2556
0.7883
22.8766
23.3460
25.0154
23.7418010021
1.2285
0.7677
19.7367
21.0624
21.7592
20.8458010022
0.9940
0.9760
25.8404
27.4318
28.7520
27.3475010023
1.7665
0.8192
25.4272
26.1739
27.0693
26.2901010024
1.5997
0.8192
22.0819
25.0715
26.6617
24.5911010025
1.2929
0.8495
22.7635
23.6186
23.8602
23.4229010027
0.7391
0.7662
16.4682
17.0513
18.2507
17.2827010029
1.5947
0.8495
23.9007
25.0468
24.3605
24.4407010032
0.8805
0.7972
19.3311
18.5545
20.8446
19.6445010033
2.1342
0.8786
27.4181
29.1471
29.2005
28.6046010034
1.0166
0.8192
17.7457
19.1549
21.2713
19.3572010035
1.2478
0.8786
24.2425
24.2746
26.5285
25.0065010036
1.1526
0.7647
21.5796
24.2887
23.7923
23.2285010038
1.3336
0.8054
23.7039
27.0752
28.9624
26.4786010039
1.6454
0.8987
26.9919
28.6462
29.8012
28.4927010040
1.6515
0.8052
24.3207
24.7657
25.9851
25.0414010043
1.0854
0.8786
21.9774
23.9121
25.3624
23.7097010044
1.0626
0.7647
22.5009
24.4276
23.4009
23.4233010045
1.1529
0.7869
20.4927
23.1695
23.5160
22.3334010046
1.5241
0.8052
23.4219
25.9105
25.4444
24.8777010047
0.8836
0.7774
26.4851
19.7542
21.7347
22.0981010049
1.1411
0.7662
21.7888
22.4248
23.1186
22.4564010050
1.0831
0.8786
22.9620
24.4060
25.3663
24.2272010051
0.8989
0.8695
18.7701
18.0305
20.0755
18.9088010052
0.8813
0.8192
25.9233
36.3638
23.4990
28.7904010054
1.1310
0.8636
23.3624
24.4810
25.4189
24.4485010055
1.5957
0.8322
22.5396
22.4145
25.3295
23.4244010056
1.5856
0.8786
23.7398
24.5754
25.7272
24.7305010058
1.0206
0.8786
19.5092
17.0150
31.1856
21.2663010059
1.0080
0.8636
23.0012
24.8199
27.8607
25.3457010061
0.9842
0.8740
24.1185
25.2454
25.5878
24.9798010062
1.0319
0.7718
21.4805
21.7112
22.9481
22.0341010064
1.7124
0.8786
24.8155
27.6149
26.6313
26.3101010065
1.5119
0.8786
23.0477
24.3346
24.5833
24.0058010066
0.8885
0.7647
19.8692
25.4612
25.6055
23.6384010068
***
*
22.7156
24.4145
*
23.5620010069
0.9721
0.7647
23.1243
23.6272
27.3424
24.6217010072
***
*
24.4989
*
*
24.4989010073
0.9451
0.7647
18.3963
19.0046
20.7832
19.3949010078
1.6130
0.8054
23.5279
24.3828
25.2879
24.4148010079
1.2409
0.8987
22.7337
22.3034
23.1015
22.7293010083
1.1817
0.8115
22.4279
24.0036
25.0403
23.8754010084
***
*
26.3238
26.5079
27.5054
26.7172010085
1.3040
0.8636
24.2609
23.6280
24.0460
23.9691010086
1.0270
0.7647
22.2096
21.5584
26.8993
23.3292010087
2.2105
0.7809
22.4318
24.8320
26.2401
24.3812010089
1.2944
0.8786
25.0811
26.2628
25.9704
25.7574010090
1.7257
0.8030
26.0494
26.3957
25.6095
26.0158010091
0.9075
0.7693
23.1310
22.5272
23.6554
23.1156010092
1.4953
0.8695
26.6796
26.9959
28.5598
27.4270010095
0.8389
0.8695
16.5250
17.0024
17.8242
17.1161010097
0.7528
0.8192
19.4511
19.2481
18.4215
18.9973010099
0.9928
0.7647
20.8383
20.6736
22.3677
21.2837010100
1.7251
0.8115
23.8919
25.1460
25.4338
24.8850010101
1.1737
0.8786
24.2575
25.0974
26.2731
25.2372( print page 23725)010102
0.9506
0.8192
25.6158
26.9859
26.6935
26.4289010103
1.8628
0.8786
27.8272
28.9636
30.4015
29.0796010104
1.8548
0.8786
27.6471
28.3126
30.4938
28.7438010108
1.0595
0.8192
24.6740
25.4325
26.8882
25.7625010109
0.9572
0.8098
17.6733
21.0449
21.9296
20.0804010110
0.7382
0.7862
26.0038
19.8738
22.1164
22.5113010112
0.9794
0.7647
17.1833
20.4027
21.3150
19.6839010113
1.6320
0.7809
22.3282
24.7170
25.0689
24.0138010114
1.4032
0.8786
25.6152
25.7090
25.3646
25.5596010118
1.2125
0.8192
21.4630
22.7191
25.3678
23.1085010120
1.0320
0.7647
20.9019
22.1868
22.8170
21.9915010125
1.0385
0.8123
21.5123
22.8911
23.6542
22.7013010126
1.1498
0.8192
23.9327
24.4957
25.7234
24.7205010128
0.9062
0.7693
23.6647
24.9881
25.9417
24.9328010129
1.0676
0.7781
22.1574
21.8502
24.4806
22.8945010130
1.0051
0.8786
23.7528
24.5644
25.2775
24.5383010131
1.3760
0.8987
26.4297
27.2707
28.0468
27.2971010137
1.2318
0.8786
27.5782
28.5843
30.4347
28.8905010138
0.6210
0.7713
16.7602
14.5551
15.0814
15.4264010139
1.5846
0.8786
26.8726
28.1473
29.3543
28.1531010143
1.2041
0.8636
26.2762
24.0674
25.0859
25.0921010144
1.7285
0.7809
22.5133
22.3916
23.8581
22.9469010145
1.4494
0.8695
24.5092
25.8293
27.3277
25.8981010146
1.1251
0.8054
22.6586
22.6879
23.7803
23.0525010148
0.8893
0.7647
23.9246
23.5714
25.0949
24.1955010149
1.2271
0.8192
24.4805
25.4354
26.8895
25.7355010150
0.9968
0.8192
23.6080
24.4098
25.0060
24.3378010152
1.2632
0.7809
22.4075
23.7803
26.0777
24.1152010157
1.1630
0.7883
23.3828
24.2206
27.1156
24.7415010158
1.2536
0.7883
23.5533
25.5905
26.2350
25.0899010162
***
*
33.8777
*
*
33.8777010163
***
*
*
34.0325
*
34.0325010164
1.2261
0.8786
*
23.2447
25.6659
24.4751010165
***
*
*
28.8040
*
28.8040010166
***
*
*
29.7256
*
29.7256010167
1.6912
0.8786
*
*
*
*010168
1.3124
0.9061
*
*
*
*020001
1.7281
1.1884
35.4232
36.5298
38.1754
36.7192020004
***
*
31.8004
*
*
31.8004020006
1.2847
1.1884
34.3752
37.0211
37.2838
36.2129020008
1.2046
1.1884
36.1250
39.3432
40.6758
38.7262020012
1.3619
1.1884
32.5975
33.9375
36.1891
34.2975020014
1.0617
1.1884
29.4472
30.9722
30.6325
30.3727020017
2.0201
1.1884
35.4119
35.8804
38.2137
36.5154020018
0.9475
1.9292
*
*
*
*020019
0.9038
*
*
*
*
*020024
1.1768
1.1884
29.5195
38.6934
39.9916
35.5845020026
1.5400
1.9292
*
*
*
*020027
0.9585
1.9292
*
*
*
*030001
1.5351
1.0271
32.4791
33.4178
35.9045
33.8225030002
2.1087
1.0271
30.2200
31.0818
32.9061
31.4265030006
1.7187
0.9442
27.0599
27.7421
29.1218
28.0025030007
1.4597
1.1305
31.1928
33.7213
35.5193
33.5056030009
***
*
26.5408
*
*
26.5408030010
1.4417
0.9442
28.5684
30.6261
31.8606
30.4135030011
1.5335
0.9442
28.1423
28.8203
30.2062
29.0981030012
1.4301
1.0198
27.3895
29.1042
31.3041
29.3702030013
1.5318
0.9903
27.0111
31.2815
31.9135
30.1305030014
1.5815
1.0271
29.6582
29.8296
30.6276
30.0779030016
1.2770
1.0271
29.1980
30.7896
31.1854
30.4653030017
2.0581
1.0271
30.6007
34.4852
34.8458
33.3763030018
1.3639
1.0271
29.4566
31.8056
31.7220
31.0137030019
1.3016
1.0271
29.5921
30.1934
33.6528
31.0565030022
1.8063
1.0271
30.5710
30.3746
35.0728
31.9469030023
1.8138
1.1652
34.2142
35.8287
37.5481
35.8798030024
2.1440
1.0271
31.9247
33.1797
35.6078
33.6344030030
1.6952
1.0271
32.0994
34.4166
36.4747
34.2670( print page 23726)030033
1.3116
1.1305
28.7508
29.9383
32.0342
30.2702030036
1.5415
1.0271
30.9834
33.0523
36.2020
33.6063030037
1.9894
1.0271
31.2877
34.1079
35.1314
33.3937030038
1.6433
1.0271
29.9314
31.7238
31.2906
31.0104030040
***
*
27.5322
*
*
27.5322030043
1.2301
0.8857
26.5834
27.3856
28.3147
27.4531030055
1.4731
1.0011
27.1473
27.1621
30.9311
28.4812030060
1.1614
*
24.8373
*
*
24.8373030061
1.6370
1.0271
28.0696
28.1337
33.0826
29.7496030062
1.2360
0.8857
26.6880
28.9587
29.9331
28.5898030064
2.0334
0.9442
28.3853
29.8226
31.6603
30.0071030065
1.6347
1.0271
29.5883
31.0817
31.4568
30.7651030067
1.0057
0.9155
20.7591
27.4497
27.0766
25.0396030068
1.1245
0.8857
23.1394
23.8792
26.0276
24.3896030069
1.4761
1.1254
30.2224
29.7802
30.7696
30.2553030071
1.0045
1.4448
*
*
*
*030073
1.1300
1.4448
*
*
*
*030074
0.9181
1.4448
*
*
*
*030077
0.8053
1.4448
*
*
*
*030078
1.1355
1.4448
*
*
*
*030080
***
*
27.1360
28.6568
30.7660
28.9576030083
1.3493
1.0271
27.4983
33.5302
35.8488
32.0946030084
1.0175
1.4448
*
*
*
*030085
1.6306
0.9442
26.8364
28.1388
29.0750
28.0469030087
1.7040
1.0271
29.5962
31.2331
31.1070
30.6895030088
1.3727
1.0271
27.8604
29.9758
30.5716
29.5054030089
1.5952
1.0271
28.9068
30.1591
31.3148
30.1497030092
1.5055
1.0271
31.7512
30.6343
30.4361
30.8516030093
1.3209
1.0271
26.4430
27.8821
33.0699
29.2816030094
1.5460
1.0271
31.5422
33.4050
34.2007
33.1194030099
0.9137
0.8857
27.1402
26.9227
24.9115
26.3285030100
2.0982
0.9442
31.5628
34.7532
35.0944
33.8057030101
1.4909
1.1388
27.8302
30.6764
33.2110
30.6802030102
2.4535
1.0271
31.6285
33.6247
36.9492
34.0941030103
1.7698
1.0271
31.7322
32.2833
33.9387
32.6963030105
2.3493
1.0271
31.2970
32.7449
33.9846
32.7833030106
1.5634
1.0271
32.9840
36.4667
40.1625
36.8304030107
1.9107
1.0271
35.6197
35.5386
35.4524
35.5298030108
2.0613
1.0271
*
29.9395
34.8483
32.9293030109
***
*
16.5906
*
*
16.5906030110
1.6838
1.0271
31.4852
29.7949
36.2124
32.4772030111
1.0463
0.9442
*
33.3711
28.5133
30.2230030112
2.0028
1.0271
*
36.6601
33.4776
34.6249030113
0.9099
1.4448
*
*
*
*030114
1.4838
0.9442
*
*
28.8439
28.8439030115
1.4714
1.0271
*
*
32.5857
32.5857030117
1.2494
0.9817
*
*
*
*030118
1.1423
1.0198
*
*
*
*030119
1.2774
1.0271
*
*
*
*030120
0.8689
1.0271
*
*
*
*030121
1.0784
1.0271
*
*
*
*040001
1.0747
0.9131
22.9327
22.9948
24.4950
23.4592040002
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29.7126( print page 23727)040027
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***
*
18.0509
19.5353
*
18.7591040055
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23.1913
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23.2265040100
***
*
21.3051
22.6131
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1.8332
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24.7942040126
***
*
15.6985
17.3715
*
16.4167040132
***
*
*
22.0054
21.8131
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2.3449
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23.1293
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***
*
37.1976
*
*
37.1976040144
***
*
21.4008
*
*
21.4008040145
1.7933
0.8291
*
24.4367
20.3865
22.2702040146
***
*
*
33.7876
*
33.7876040147
1.7491
0.8754
*
*
35.7643
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1.3585
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*
*
*050002
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32.2188
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*
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29.0132( print page 23728)050047
1.7553
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***
*
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***
*
*
*
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***
*
34.0309
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1.4716
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***
*
34.2020
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*
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***
*
33.6662
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40.4728
37.3677050145
1.5409
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48.0796
49.2634
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*
*
*
*
*050148
1.0935
*
28.2305
*
*
28.2305050149
1.5423
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35.8821
37.3616
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39.0535( print page 23729)050150
1.2344
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***
*
16.9516
16.7756
*
16.8520050158
1.3682
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48.9658050175
***
*
33.3061
35.0152
*
34.1608050177
***
*
24.0717
*
*
24.0717050179
1.1909
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***
*
30.0062
31.3431
*
30.6661050211
1.3077
1.5288
35.0515
35.0289
42.9220
37.8234050214
***
*
25.4647
*
*
25.4647050215
***
*
48.8112
50.7578
*
49.8014050219
1.3346
1.1916
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***
*
36.1154
40.7427
*
38.4427050242
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*
40.4941
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***
*
27.8452
*
*
27.8452050253
***
*
23.5381
*
*
23.5381050254
1.2803
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32.6688050256
***
*
29.6793
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***
*
33.6855
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*
34.8609050272
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*
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49.0216( print page 23730)050290
1.7575
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1.2078
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30.2022
33.7864
33.6925
32.5818050299
***
*
35.1249
32.3707
*
33.6024050300
1.4161
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38.2659
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39.8863050312
***
*
36.8498
*
*
36.8498050313
1.2021
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35.0478
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36.8450050315
1.3141
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36.5948050390
1.1220
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27.3183
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33.0438
29.3100050391
***
*
17.2141
*
*
17.2141050393
1.3848
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34.1743
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45.0472
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1.3093
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36.1222
37.0117
35.4225050420
***
*
35.2869
39.9237
*
37.6935050423
1.0114
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35.2291050430
0.9394
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23.9045
24.5327
25.9363
24.7203050432
***
*
33.1876
35.2416
*
34.2247050433
***
*
21.3573
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23.0629
21.6609050434
0.9988
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32.6255
33.7794
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27.7351( print page 23731)050448
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38.5833
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43.3674
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1.5610
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30.4606
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35.0200
33.3430050456
***
*
21.6261
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1.5970
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47.8947
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1.7714
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31.1111
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37.3361
34.8277050469
***
*
30.6502
*
*
30.6502050470
***
*
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31.0466
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1.7119
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35.4768
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1.4110
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38.7856
41.1042
40.5395
40.1623050477
***
*
37.7668
40.1566
*
39.0877050478
1.0325
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35.1967050488
1.4378
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45.0630
47.1937
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***
*
34.3598
*
*
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1.1822
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***
*
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*
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1.4828
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*
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*
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*
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***
*
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*
31.6785
*
*
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37.8603050571
***
*
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*
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***
*
32.3744
*
*
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***
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42.5081
*
*
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***
*
22.2521
*
*
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***
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***
*
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*
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***
*
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*
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***
*
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*
*
*
*
*050662
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***
*
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49.0340
*
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2.2640
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***
*
28.9083
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***
*
35.7311
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***
*
21.1273
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*
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***
*
25.5140
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*
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***
*
39.3581
41.8263
*
40.4993050729
***
*
36.5432
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*
37.4033050730
***
*
37.0629
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*
38.1210050732
2.3278
1.1822
*
33.6831
34.3456
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*
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***
*
*
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*
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*
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*
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*
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*
*
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*
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*
*
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*
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*
*
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*
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***
*
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*
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*
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*
*
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*070001
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*
*
*
*080001
1.6391
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***
*
29.6800
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***
*
27.1257
*
*
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***
*
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*
*
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*
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*100080
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***
*
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0.9591
0.9865
27.3523
29.7000
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29.4319100242
1.5092
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25.6083
26.1988
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26.5486100243
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1.0025
27.4927
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28.5597
28.3018100254
1.4934
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27.3995100255
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31.2430100258
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26.7129
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28.1387100264
1.4156
0.8993
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30.1956
28.3177( print page 23737)100265
1.3296
0.8993
25.7432
26.3326
26.6920
26.2976100266
1.3896
0.8633
23.0208
24.2517
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1.1771
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29.0668
30.5750
33.6114
31.0650100269
1.3742
1.0025
26.6047
27.8407
28.3722
27.6319100271
2.0607
*
*
*
*
*100275
1.3310
1.0025
26.8943
28.7797
31.0459
28.9926100276
1.2874
1.0025
29.7606
30.5720
31.7050
30.6750100277
1.5574
0.9865
20.4791
24.1122
25.5878
23.9890100279
1.4040
0.9502
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29.2257
31.1921
29.7250100281
1.3929
1.0025
29.6698
30.9131
32.8807
31.2127100284
1.0632
0.9865
22.3134
25.2637
21.4401
22.7441100285
1.2639
1.0025
*
41.9481
34.7963
39.4585100286
1.5465
0.9820
28.3645
25.8085
26.5795
26.8126100287
1.3877
1.0025
28.1051
29.7536
30.3059
29.3361100288
1.7404
1.0025
28.7902
31.0506
32.9558
30.8729100289
1.6231
1.0025
29.6376
31.9011
31.4701
31.0127100290
1.2302
0.9215
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28.7111
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1.3483
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28.1515
28.3762
28.3296100292
1.3753
0.8633
26.7063
27.7644
28.5799
27.7205100293
***
*
32.7963
*
*
32.7963100294
***
*
30.7557
*
*
30.7557100295
***
*
26.1983
*
*
26.1983100296
1.3271
0.9865
*
29.3870
31.1449
30.2840100297
***
*
*
32.1536
*
32.1536100298
0.8450
0.8981
*
19.0297
21.9226
20.3569100299
1.2918
0.9757
*
34.3697
31.6820
33.1821100300
***
*
*
*
33.1669
33.1669100302
1.1546
0.9189
*
*
*
*110001
1.3724
0.8740
26.4338
26.5640
27.4189
26.8009110002
1.3136
0.9760
26.4715
26.2228
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1.3119
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1.2944
0.9760
28.1209
27.2826
29.5994
28.4189110006
1.5596
0.9589
28.3839
*
32.3714
30.3778110007
1.5907
0.8770
26.6396
26.3133
28.0665
27.0191110008
1.3589
0.9760
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1.0279
0.9760
24.4275
27.7619
28.2217
26.7950110046
1.1453
0.9760
26.7464
*
28.6264
27.6790110050
1.0857
0.8499
27.5985
27.0651
27.1525
27.2626( print page 23738)110051
1.1244
0.7840
20.1756
21.4898
22.1488
21.3080110054
1.4223
0.9760
28.9254
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1.9462
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30.5196
31.1064
30.5424110079
1.5678
0.9760
26.8412
27.3274
29.0882
27.7224110080
***
*
18.4714
*
*
18.4714110082
1.9672
0.9760
30.8320
30.1072
31.1407
30.6976110083
1.9525
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30.4287
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21.2642
21.6033
21.0527110135
1.2731
0.7840
22.5346
24.0945
25.1022
23.9470110136
***
*
18.8212
*
*
18.8212110142
0.9807
0.8025
21.3935
21.6286
22.2156
21.7484110143
1.4253
0.9760
28.6583
29.9139
30.9590
29.8777110146
1.0832
0.9112
27.0987
29.0193
30.1159
28.7418110149
***
*
28.4040
*
*
28.4040110150
1.2994
0.9760
25.3742
26.9884
27.7908
26.7261110153
1.1210
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1.0867
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30.9481
28.7481
29.1019110192
1.4139
0.9760
28.8267
30.0843
31.6605
30.2562110193
***
*
27.9161
*
*
27.9161110194
0.8957
0.7840
19.1920
21.0826
20.5257
20.2837110198
1.3546
0.9760
31.0557
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24.9236
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29.4610
27.3150110201
1.4532
0.9815
31.0841
32.0967
33.4267
32.2165( print page 23739)110203
0.9588
0.9760
29.7888
32.3441
32.0585
31.3300110205
1.1768
0.8347
22.0207
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26.1963
24.0311110209
0.6196
0.7840
21.1534
21.2428
22.4539
21.6327110212
1.2087
0.8163
*
*
*
*110214
***
*
37.1450
*
*
37.1450110215
1.3584
0.9760
27.5566
29.5238
30.1770
29.1787110219
1.4002
0.9760
28.8814
32.2603
33.4462
31.6155110220
***
*
37.5741
*
*
37.5741110221
***
*
28.0500
*
*
28.0500110222
***
*
35.6189
*
*
35.6189110223
***
*
*
25.3071
*
25.3071110224
***
*
*
33.6464
*
33.6464110225
1.2065
0.9760
*
29.5373
28.9757
29.2212110226
1.1952
0.9760
*
*
32.1814
32.1814110228
0.8800
0.9760
*
*
*
*110229
1.2950
0.9760
*
*
*
*110230
1.3685
0.7840
*
*
*
*120001
1.7874
1.1608
34.1385
39.6348
39.0344
37.5738120002
1.2448
1.1219
32.3784
34.1709
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31.8841120019
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1.4190
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29.5825
31.8146
30.1238120028
1.2595
1.1608
32.4847
34.0451
34.6327
33.7338120029
***
*
*
44.6382
*
44.6382130002
1.4057
0.9100
24.7871
24.7266
24.3491
24.6130130003
1.4692
0.9560
28.6158
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1.1981
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23.6212
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1.2309
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21.1998
22.7962
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28.4934
29.3360
28.3737130049
1.5627
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27.3597
29.0185
29.7190
28.7360130062
***
*
25.6467
29.1925
28.3416
27.9024130063
1.4068
0.9290
26.0955
27.7607
27.7664
27.1825130065
1.9441
0.9327
21.9792
30.4547
25.8977
26.3095130066
2.0484
0.9504
*
28.9883
28.1483
28.5227130067
2.5439
*
*
21.3867
26.8243
23.8814140001
1.1235
0.8797
22.3001
22.2003
23.2221
22.5895140002
1.3464
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31.8008
32.7592
31.22081400103
1.4980
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31.8806
40.1360
39.3702
36.3250140B103
***
*
*
40.1360
39.3702
39.7545140011
1.2146
0.8428
23.8575
25.8864
26.2125
25.4083140012
1.3120
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30.2776
31.6822
32.1110
31.3500140032
1.2668
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26.7310
27.5367
28.5229
27.5996140033
***
*
27.9993
29.5256
31.4328
29.1997140034
1.1683
0.8993
24.0470
24.4653
26.7233
25.0924140040
1.2236
0.9043
23.2293
24.5589
28.4995
25.3375( print page 23740)140043
1.2647
0.8606
27.3469
29.8633
31.3736
29.5994140046
1.4727
0.8993
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28.4513
29.9472
28.5957140054
1.4862
1.0334
33.1406
34.2378
34.5342
33.9734140058
1.2320
0.8993
24.6058
25.2568
26.5660
25.4975140059
1.0669
0.8993
22.6743
21.6230
22.8588
22.3764140062
1.3719
1.0334
34.1230
36.8271
36.6461
35.8580140063
1.4103
1.0334
28.6559
30.5465
31.1242
30.0979140064
1.2191
0.9043
23.8639
25.7551
26.6231
25.4620140065
1.4143
1.0334
30.1856
31.5510
32.4631
31.3610140066
1.1167
0.8993
22.1524
22.0225
23.6295
22.6003140067
1.8104
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28.3506
29.8982
30.6882
29.6686140068
1.2321
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28.3938
26.7166
31.3440
28.7631140075
1.2712
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26.2626
35.9507
33.6844
31.5469140077
0.9374
0.8993
20.3999
21.6468
22.5061
21.5537140080
1.4286
1.0334
28.8791
29.9067
30.3760
29.7135140082
1.6302
1.0334
28.3429
31.0516
32.0539
30.4270140083
0.9706
1.0334
26.8919
27.2189
26.1622
26.6852140084
1.2689
1.0334
30.5036
30.7251
31.3281
30.8596140088
1.8601
1.0334
30.5450
32.6866
34.0556
32.5121140089
1.2292
0.8428
24.1066
24.9120
26.6942
25.2540140091
1.7570
0.9353
27.8536
28.2095
29.4099
28.5130140093
1.2251
0.9711
28.3298
28.6709
31.2955
29.5310140094
1.0614
1.0334
27.3841
28.7647
28.8596
28.3324140095
1.2067
1.0334
28.7617
29.7385
29.9452
29.4617140100
1.4165
1.0334
41.3374
37.2961
37.3023
38.5940140101
1.2742
1.0334
29.4081
28.9723
31.0048
29.8038140103
1.1919
1.0334
23.6406
24.0926
25.3608
24.3942140105
***
*
29.5274
29.6590
30.7135
29.8404140110
1.1348
1.0334
28.6364
30.3432
31.3460
30.1323140113
1.5825
0.9353
29.5452
30.2542
31.6124
30.5020140114
1.5001
1.0334
28.2151
29.8316
31.1390
29.7616140115
1.2630
1.0334
26.0383
25.4576
26.2578
25.9061140116
1.3668
1.0341
34.5537
34.3876
34.1356
34.3550140117
1.5097
1.0334
27.7201
30.9679
28.5785
29.0528140118
1.4623
1.0334
32.5518
33.1987
33.6634
33.1346140119
1.8095
1.0334
34.2118
32.2185
34.3896
33.5609140120
1.3098
0.9043
23.9724
25.9275
26.2398
25.4006140122
1.5055
1.0334
30.5653
30.2888
32.4728
31.1094140124
1.2504
1.0334
35.7563
38.2191
38.8956
37.6290140125
1.1586
0.8993
22.7571
26.5801
27.6333
25.6694140127
1.6283
0.9520
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27.8363
29.3326
27.6412140130
1.2280
1.0334
32.6209
32.5425
34.5053
33.2090140133
1.4054
1.0334
31.0269
30.3259
32.8907
31.4186140135
1.4168
0.8840
23.3196
24.6645
25.9046
24.6639140137
1.0555
0.8993
23.4174
31.4349
*
26.5232140143
1.1818
1.0334
27.4499
26.1126
27.0294
26.8354140145
1.0941
0.8993
26.0875
25.2040
26.9326
26.0849140147
1.0800
0.8428
21.0686
21.1817
22.1026
21.4534140148
1.6364
0.9133
25.5677
27.0038
28.9453
27.2136140150
1.6423
1.0334
52.0970
35.5951
45.8193
44.1226140151
0.7986
1.0334
27.0312
26.0825
27.3539
26.8313140152
***
*
30.2209
29.8647
32.2789
30.7789140155
1.3176
1.0334
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32.7960
35.0804
32.3959140158
1.3565
1.0334
27.3721
30.4445
32.1130
30.0627140160
1.1748
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25.8684
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27.4932140161
1.1449
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28.8266
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1.5506
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32.1810
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1.7462
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25.9726
27.3117
26.0022140166
1.1830
0.8428
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26.2875
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1.1518
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1.0334
32.1220
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1.0334
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34.2433
32.0655( print page 23741)140176
1.2311
1.0341
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33.2116
32.9375140177
0.9832
1.0334
26.4340
25.5725
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30.1755
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1.0334
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1.4541
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32.7915
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34.3762
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1.1245
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31.4539
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1.0712
1.0334
49.9507
39.4295
38.0581
40.7701140303
2.1328
1.0334
29.6470
*
32.2920
30.8365150001
1.1896
0.9827
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31.2747150002
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1.0328
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1.0584
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24.4351( print page 23742)150023
1.5869
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27.7520
30.3560
28.3734150024
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0.9827
28.1655
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28.0434
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29.5008
31.1046
29.8290150129
1.1906
0.9827
29.7398
31.4317
32.9621
31.3709150132
***
*
27.6560
*
*
27.6560150133
1.2148
0.9353
25.1322
24.2538
23.0651
24.1076150134
***
*
26.3249
21.6740
27.3963
24.7453150146
1.1296
0.9547
29.5256
30.3343
31.8743
30.6315150147
1.4431
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0.9337
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1.3583
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32.1022
35.0617
37.3920
35.1885150154
2.4814
0.9827
29.8514
29.8894
30.5758
30.1310150155
***
*
45.0121
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45.0121150156
***
*
25.9681
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25.9681150157
1.7719
0.9827
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32.3106
32.9148
32.6153150158
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30.4337
30.4337150159
***
*
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27.5574150160
2.0971
0.9827
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24.0956
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1.5621
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29.2977160029
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26.4591160080
1.2258
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27.8729
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1.6319
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1.2114
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23.2149
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1.1157
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25.4740
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22.5482
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22.6949
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1.2223
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28.6303
29.8992
33.6376
30.7344160153
1.6977
0.8745
29.9378
30.6173
30.4338
30.3298160155
2.0066
0.8709
*
*
*
*170001
1.1220
0.8086
23.1260
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24.5932
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0.9453
30.9025
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1.2334
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1.0350
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23.1088
23.8515
29.0177
25.4500170110
0.8962
0.8086
23.3260
23.9572
24.7910
24.0231170114
0.5755
*
*
*
*
*170120
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22.6059( print page 23744)170122
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1.6684
0.8980
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27.0843
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27.8479170133
1.0196
0.9453
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25.2301
25.7108
24.7246170137
1.3249
0.8086
24.7096
25.3395
26.8014
25.6444170142
1.3711
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23.9527
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25.5550
24.7027170145
1.0867
0.8086
23.2162
23.3967
25.3728
23.9852170146
1.5002
0.9453
29.8858
29.0720
31.6994
30.2197170147
***
*
22.4973
24.3268
21.4565
23.0046170150
1.1410
0.8252
20.9448
19.6160
22.0251
20.8653170166
1.0165
0.8086
21.0762
22.6968
24.1063
22.6638170175
1.4832
0.8785
25.6281
26.7229
31.7582
28.0191170176
1.5583
0.9453
27.2332
29.0735
30.1114
28.8494170180
***
*
32.5010
*
*
32.5010170182
1.4504
0.9453
27.3503
28.9710
30.3781
28.8971170183
1.9858
0.8980
25.8340
26.1890
27.7178
26.5683170185
1.2572
0.9453
27.8139
28.1780
29.3202
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2.5220
0.8980
32.8392
30.2613
30.7638
31.2790170187
1.6421
0.8086
22.8493
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1.9852
0.9453
30.6844
32.2573
33.7221
32.2678170190
1.0158
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22.9540
26.2625
27.3023
25.5425170191
1.8259
0.8086
22.1197
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26.0279
24.3247170192
1.7639
0.8980
26.2724
27.7421
30.9200
28.4741170193
1.3485
0.8785
20.6821
24.8531
24.4126
22.9315170194
1.2331
0.9453
29.9014
27.6989
28.1972
28.5250170195
2.4249
0.9453
30.1001
29.5947
29.1763
29.5492170196
2.4635
0.8980
*
32.1832
29.9641
30.9601170197
2.3250
0.8980
*
*
*
*170198
1.9320
0.8086
*
*
*
*180001
1.3069
0.9590
27.6917
29.7423
29.9655
29.1412180002
1.0662
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1.0759
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1.1134
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1.2008
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1.4670
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1.4807
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32.8461
34.0348
32.7266180036
1.3287
0.9127
25.2972
25.6959
30.2621
27.0558180037
***
*
26.3132
27.8506
33.1874
29.1431180038
1.5441
0.8764
26.0440
26.9752
28.2413
27.1328180040
1.8313
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1.5998
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1.3277
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1.0026
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27.5846180048
1.3531
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26.0238
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27.9902180069
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26.8870( print page 23745)180070
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20.6741
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21.3693
20.7657180078
1.0594
0.8767
27.6806
28.2762
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1.1477
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2.0473
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28.4583
28.1734
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28.8044180104
1.5676
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25.9689
27.1274
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0.9511
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21.6002
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0.8902
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20.2884
20.7220
21.2265
20.7447180115
0.9040
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20.5539
20.3089
22.7088
21.1833180116
1.1839
0.8320
23.5354
25.8927
26.8836
25.4592180117
0.9408
0.7837
22.8469
24.7378
24.9567
24.2081180124
1.3223
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24.8292
25.4664
27.1341
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1.3584
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26.3947
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0.9392
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22.6056
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23.7770
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1.6779
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27.8900
29.1712
29.6725
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1.4346
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24.5105
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29.0546
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1.1879
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28.1901
28.6871
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1.0065
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23.3569
24.7575
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24.7763180141
1.8666
0.9245
25.3357
27.5912
28.7307
27.2557180143
1.6777
0.8950
28.1924
30.8734
28.2122
29.0557180144
***
*
29.5052
*
*
29.5052180147
***
*
*
31.1615
*
31.1615180148
***
*
*
30.1250
*
30.1250180149
1.0087
0.7837
*
*
16.4909
16.4909180150
1.8775
0.9245
*
*
*
*190001
1.0903
0.7682
22.1394
22.1569
22.5328
22.2811190002
1.5733
0.8438
23.3368
24.6984
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20.7334
21.2130
22.9658
21.6044190036
1.6604
0.9140
25.4164
25.6551
30.2172
26.9231190037
***
*
19.4071
20.7271
28.0447
21.7538190039
1.5115
0.9140
24.4386
25.4003
24.6075
24.8194190040
1.4212
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28.2870190041
1.4648
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1.2898
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1.5439
0.9140
25.8238
27.1996
27.5854
26.9044190046
1.4309
0.9140
23.8552
24.7370
*
24.2936190050
1.1484
0.7726
21.0259
20.9142
22.7951
21.5828190053
1.2074
0.7783
17.9788
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23.1218190060
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22.1880
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22.9847
22.7749190078
1.0906
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22.2431
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25.6940
23.4396( print page 23746)190079
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24.0985
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25.3327
24.4472190081
0.8736
0.7682
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1.0338
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1.7595
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27.3180
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1.0602
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1.2209
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26.0278
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1.1880
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0.9844
0.8547
22.8809
21.2580
22.6571
22.2425190122
1.4015
0.8142
22.0072
22.2371
22.8671
22.4040190124
***
*
26.0032
27.9484
28.6694
27.4838190125
1.5711
0.7961
25.5463
24.8256
26.6254
25.6717190128
1.0269
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28.3257
29.6682
31.1762
29.7845190131
1.3325
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0.7784
18.2045
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27.7540
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30.2944190140
0.9876
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1.2672
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0.9764
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19.9265
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21.3982
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1.5575
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27.4824
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0.9239
0.7682
18.7467
18.8391
20.6962
19.4061190152
1.1740
0.9140
28.1334
30.8512
34.6485
30.9971190158
***
*
26.4787
30.6450
21.9727
27.7355190160
1.5637
0.7961
22.9325
24.7822
25.8632
24.4460190161
1.0278
0.7682
22.6187
22.9035
23.8066
23.1213190162
***
*
25.2953
*
*
25.2953190164
1.1308
0.8127
25.2560
26.6207
27.7247
26.5855190167
1.2763
0.8438
26.4669
25.3283
27.1969
26.3225190175
1.2783
0.9140
26.0547
27.4256
30.5928
28.0066190176
1.7856
0.9140
25.8826
26.2596
*
26.0715190177
1.6464
0.9140
27.7792
28.2751
29.7229
28.5969190182
***
*
27.1682
29.8656
30.7038
29.2917190183
1.2357
0.7870
22.6928
22.0119
23.3452
22.7038190184
0.9592
0.7785
24.9476
24.1626
22.6137
23.9160190185
***
*
25.6394
28.9759
36.7292
29.7365190190
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***
*
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***
*
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*
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*
28.6936190203
***
*
28.1832
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*
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*
22.7833
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***
*
32.7499
*
*
32.7499190248
***
*
23.2220
*
*
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***
*
23.6924
*
*
23.6924190253
***
*
22.8060
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***
*
32.9290
*
*
32.9290( print page 23747)190255
0.7692
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***
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31.3715
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*
26.5084
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***
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*
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***
*
*
30.3719
*
30.3719190263
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*
26.4202
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***
*
*
26.5842
*
26.5842190265
***
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*
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*
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*
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*
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1.2748
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*
*
28.4541
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*
*
*
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1.6077
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*
*
*
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1.3329
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*
*
*
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0.8985
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*
*
*
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29.4507( print page 23748)210032
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34.0706220006
***
*
30.7673
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*
32.1319220008
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***
*
31.7122
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*
35.2808220029
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*
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***
*
*
31.4731
33.2051
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1.5438
1.1994
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32.1942220076
***
*
27.5148
*
*
27.5148220077
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35.3173( print page 23749)220088
1.9446
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***
*
32.6305
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*
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***
*
29.4855
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*
32.1170220135
1.3038
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38.7180
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***
*
*
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***
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1.5934
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32.9570230B045
***
*
*
*
34.0171
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1.7842
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*
*
*230146
1.3735
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***
*
34.6295
*
*
34.6295230190
***
*
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1.3561
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***
*
33.5531
*
*
33.5531230294
***
*
31.6195
*
*
31.6195230295
***
*
27.1298
*
*
27.1298230296
***
*
*
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1.0052
*
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*
*( print page 23751)230298
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*230300
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*
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*230301
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*
*
*
*240001
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***
*
24.3596
*
*
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***
*
23.3334
*
*
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***
*
24.6370
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*
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*
*
*
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*
19.4286250152
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27.2309250155
***
*
22.5728
*
*
22.5728250156
***
*
*
16.8659
*
16.8659250157
***
*
*
29.6398
*
29.6398250162
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*
*
*
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1.5513
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28.0235
29.6366
28.7794260105
1.8539
0.8986
29.8848
29.4766
32.4075
30.5702260107
***
*
25.8177
27.9710
29.7754
27.7676260108
1.8291
0.8986
26.6374
27.0758
28.5633
27.4377260110
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21.7609
22.8201
22.0857260147
0.9526
0.8470
21.4235
22.1928
22.9670
22.1968260159
***
*
22.6276
23.9515
24.3018
23.5847260160
1.0612
0.8470
23.8257
25.5096
26.6702
25.4076260162
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26.9797
28.8610
29.1853
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1.2175
0.9444
27.9137
30.5343
30.8981
29.7909( print page 23754)260191
1.4412
0.8986
24.6973
26.3244
27.8627
26.3553260193
1.2305
0.9444
26.8922
28.1060
29.5416
28.1851260195
1.2498
0.8470
22.6870
24.0411
25.0275
23.9191260198
***
*
28.0021
27.2555
27.9073
27.7138260200
1.2908
0.8986
28.2453
27.4784
30.3290
28.7369260207
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30.5975
36.4040
30.6935260211
1.4262
0.9444
40.9821
35.9113
37.1525
38.3586260213
***
*
*
34.8953
*
34.8953260214
1.2306
0.9444
*
*
31.0153
31.0153260216
1.3065
0.9444
*
*
*
*260218
0.8126
*
*
*
*
*260219
1.3191
0.8986
*
*
*
*260220
2.3259
*
*
*
*
*270002
1.1469
0.8640
24.0534
25.2907
28.3363
25.9060270003
1.2563
0.8679
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29.1938
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28.6560270004
1.6239
0.9045
26.1319
26.6779
28.5851
27.1552270011
1.0779
*
22.7061
24.4696
*
23.5588270012
1.5992
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26.5854
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1.2964
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0.8884
1.4448
*
*
*
*270081
1.0022
*
19.5612
20.0438
*
19.8033270086
1.2443
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1.1718
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24.5617
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0.8951
1.4448
*
*
*
*280123
0.9698
0.8884
15.4047
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1.5858
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2.7488
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27.1001
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2.0416
0.9400
*
27.8793
27.9490
27.9189280130
1.3820
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*
29.8588
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29.9161290001
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25.2225( print page 23755)290032
1.4391
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34.3264290039
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37.6077
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36.9258290042
***
*
*
22.4859
*
22.4859290044
***
*
37.1662
*
*
37.1662290045
1.6567
1.1666
33.1512
34.4584
38.3841
35.4482290046
1.4029
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*
38.7966
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1.4035
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*
33.4695
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1.3302
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*
26.0725
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1.8934
1.0027
*
*
32.5253
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1.1590
0.9824
*
*
*
*290053
1.5711
1.1666
*
*
*
*300001
1.4434
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1.5959
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41.9596
40.0664310013
***
*
31.0447
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33.1378310014
1.8164
1.1221
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33.9784310042
***
*
34.4986
*
*
34.4986310044
1.3493
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36.5463
34.2544( print page 23756)310054
1.4134
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36.9095
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36.5602310057
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1.6465
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38.0643
37.5163
38.1641
37.9202310077
***
*
34.6085
*
*
34.6085310078
***
*
30.5761
*
*
30.5761310081
1.2620
1.1221
30.1561
31.0699
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32.4707310122
***
*
*
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*
41.9029310123
***
*
*
37.1022
*
37.1022310124
***
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*
41.8827
*
41.8827310125
***
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*
36.2186
*
36.2186310126
***
*
*
*
34.3166
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*
*
*
*320058
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1.4430
*
*
*
*320059
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*
*
*
*320060
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*
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*
*( print page 23757)320063
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25.0031
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0.9255
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*
*
*
*320074
1.2421
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1.7562
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27.9944
27.4100
28.4513
27.9647320086
1.4744
0.8858
*
*
*
*320087
1.3725
1.0587
*
*
*
*330002
1.5701
1.3043
30.9600
32.1956
34.7252
32.6020330003
1.3545
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24.4326
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1.3374
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42.1759
45.7619
46.3155
44.6761330016
***
*
22.0493
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*
22.5738330019
1.3063
1.3043
38.5368
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40.8880330023
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1.7175
0.8833
26.4386
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28.9924
27.9865330154
1.6921
*
*
*
*
*330157
1.3796
0.9471
26.5686
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29.7604
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1.6713
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***
*
30.4005
35.1577
*
32.5880330175
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***
*
30.2038
*
*
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***
*
26.2719
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1.2398
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***
*
37.7497
*
*
37.7497330339
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2.1246
*
*
*
*
*330357
1.2886
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26.3688( print page 23760)330404
0.9366
1.3043
*
*
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0.9452
1.3043
*
*
35.2698
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*
*
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*
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*340001
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*
25.2493
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*
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28.9452( print page 23761)340119
1.2861
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***
*
22.2988
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***
*
22.1741
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0.9092
0.9693
*
*
*
*340141
1.6729
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*
*
*
*340158
1.1294
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*
*
*
*340171
1.1184
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27.4701
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***
*
26.7155
*
*
26.7155340179
***
*
34.1895
*
*
34.1895340182
***
*
27.8071
*
*
27.8071340183
1.1992
0.9570
*
*
30.1224
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*
20.1290
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*
*
*
*350064
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*
*
*
*350070
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***
*
26.2222
*
*
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28.6891360239
1.3536
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30.7728
31.7919
29.9651360241
***
*
23.0662
25.7290
25.8138
24.8236360242
1.9535
*
*
*
*
*360245
0.6344
0.9266
20.6504
20.3426
20.4587
20.4760360247
0.4196
0.9869
19.3677
*
*
19.3677360253
2.2617
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33.2371
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1.9432
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25.1652
25.4864
28.1657
26.3875360264
***
*
36.0754
*
*
36.0754360265
***
*
36.6265
*
*
36.6265360266
2.1538
0.9869
*
31.7565
29.8358
30.6488360267
***
*
*
34.0936
*
34.0936360268
***
*
*
34.0526
*
34.0526360269
1.7035
0.9581
*
24.8552
25.5163
25.2427360270
1.1268
0.8582
*
*
28.8661
28.8661360271
***
*
*
*
28.4331
28.4331360272
***
*
*
*
38.0986
38.0986360273
***
*
*
*
37.6617
37.6617360274
1.5016
0.9321
*
*
*
*360276
1.1341
0.8931
*
*
*
*370001
1.6484
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26.1032( print page 23764)370016
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1.4446
*
*
*
*370171
0.9693
1.4446
*
*
*
*370172
0.8569
1.4704
*
*
*
*370173
0.9838
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*
*
*
*370174
0.9087
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*
*
*
*370176
1.3084
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*
*
*
*370183
0.9683
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21.1807370196
***
*
22.3498
20.8296
24.6968
22.8178370199
0.9156
0.8686
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23.9357
23.7085( print page 23765)370200
1.0572
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***
*
26.8677
*
*
26.8677370218
1.9640
0.8652
*
30.3445
23.7493
26.4612370219
***
*
*
*
41.4373
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2.3081
0.8686
*
*
21.3140
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1.8753
0.8686
*
*
26.9158
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*
24.0138
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*
*
*
*370227
0.9326
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*
*
*
*370228
1.2387
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*
*
*380001
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***
*
34.4208
*
*
34.4208380014
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***
*
38.0989
*
*
38.0989380040
1.4621
1.0298
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***
*
26.8149
*
*
26.8149380082
1.2966
1.1204
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***
*
*
*
45.3849
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***
*
21.4856
20.2291
*
20.8697390012
1.1856
1.0992
30.7542
32.4856
34.1980
32.4294390013
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25.0037
26.2323
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26.5751( print page 23766)390016
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26.1785
24.5413390019
1.1210
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***
*
30.3565
29.6308
*
29.9808390023
1.2632
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35.4452
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36.2584
35.4918390024
***
*
33.5186
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19.1362
20.3878
*
19.7743390026
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27.3481
29.6697
28.1208390052
1.1476
0.8389
24.9510
25.1462
26.3688
25.5002390054
***
*
24.4435
27.4805
27.5682
26.3435390056
1.1124
0.8378
23.5077
23.5821
24.7026
23.9359390057
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26.2568
28.8131
26.7355390073
1.6919
0.8342
25.7822
26.4083
27.0855
26.4996390074
***
*
23.6500
25.4098
*
24.5222390076
1.3189
1.0992
31.8500
32.7671
33.9877
32.8740390079
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25.1596390102
1.4773
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24.4589
25.5321
24.9493390103
***
*
20.5741
20.4446
*
20.5090390104
1.1021
0.8342
19.2326
19.6630
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31.0518( print page 23767)390116
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1.2800
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24.3245
25.3896
24.2630390121
***
*
25.4826
*
*
25.4826390122
1.1069
0.8395
23.1866
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1.1993
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30.2692390133
1.7609
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33.0697
32.4255390136
***
*
23.9813
*
*
23.9813390137
1.4546
0.8342
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2.1300
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27.1950
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27.7684390166
***
*
20.9272
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35.5291
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36.3036390181
***
*
25.9871
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1.6460
*
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27.1364( print page 23768)390236
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*
25.1956
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*
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1.0992
*
*
32.9893
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0.6005
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1.4914
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38.4678
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1.2124
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29.5281
31.3393
31.7320
30.8704390287
***
*
39.3176
42.2401
*
40.3959390288
***
*
30.9701
*
*
30.9701390289
***
*
30.7583
*
*
30.7583390290
1.8004
1.0992
38.3776
41.1426
47.7624
42.2989390302
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***
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27.5580
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27.5580390304
1.2958
1.0992
30.4832
32.1633
33.4111
32.1082390305
***
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29.3217
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29.3217390306
***
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0.8930
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24.5393
22.9455
23.6860390308
***
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36.1737
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36.1737390309
***
*
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37.8924
*
37.8924390310
***
*
*
44.3991
*
44.3991390311
***
*
*
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49.8990
49.8990390312
1.2883
1.0992
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51.3342
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1.1642
0.9204
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11.2618( print page 23769)400104
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16.5726
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15.3043400127
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20.7775
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12.3520
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25.3750420006
***
*
26.3293
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1.0931
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1.4161
0.9231
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26.8671420066
0.9980
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*
25.0997( print page 23770)420067
1.3639
0.8827
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1.3759
0.9231
25.6857
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1.1634
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1.3829
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26.7147420078
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1.4321
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32.8693
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1.5113
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31.2671
33.9874
34.8836
33.3515420083
1.4528
0.9294
26.4932
28.9007
29.6565
28.4194420085
1.5909
0.9074
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29.1127
29.9059
28.9688420086
1.4584
0.8984
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26.9052420089
1.3777
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29.5862
31.7347
29.8346420091
1.4537
0.8609
26.0592
27.2520
27.9042
27.0840420093
***
*
28.0765
33.0474
*
30.2237420098
1.2041
0.8609
30.7532
27.1939
27.6701
28.2065420099
***
*
*
30.3089
*
30.3089420100
***
*
*
*
29.2958
29.2958420101
1.2049
0.8609
*
*
33.1975
33.1975420102
1.4677
0.9605
*
*
*
*430005
1.3356
0.8428
22.4111
23.8694
25.4368
23.9203430008
1.1161
0.8963
24.4277
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27.1837430014
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1.2671
0.8557
24.1969
25.1715
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25.0133430060
0.9444
0.8428
13.2618
*
*
13.2618430064
0.9859
0.8428
18.3125
16.4916
17.7325
17.4427430077
1.7222
0.9618
25.8572
27.2116
31.1926
28.0482430081
0.9388
1.4448
*
*
*
*430082
0.8463
1.4448
*
*
*
*430083
0.8496
1.4448
*
*
*
*430084
0.9068
1.4448
*
*
*
*430085
0.8878
1.4448
*
*
*
*430089
1.8588
0.8783
22.3335
23.2467
24.9033
23.5426430090
1.6017
0.9379
26.4862
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22.5407
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23.0928440026
***
*
28.0349
26.8153
28.4597
27.7725( print page 23771)440029
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0.9445
30.1204
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30.9557440030
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24.9917
24.8736
24.6802440144
1.2549
0.9252
23.9241
25.2293
26.3207
25.2055440147
***
*
33.1756
34.8199
36.6955
34.8975440148
1.1236
0.9252
23.9810
22.6188
28.0703
24.8107440150
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25.8289
27.2779
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1.9267
0.9445
28.7074
29.9894
31.0647
29.9300440162
***
*
27.6837
24.8705
24.6410
25.6902440166
***
*
35.3064
*
*
35.3064440168
1.0456
0.9305
28.1215
29.4028
31.3312
29.7029440173
1.4350
0.7957
23.1167
24.0621
23.1355
23.4173( print page 23772)440174
0.8828
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25.4829
26.2087
27.4573
26.4456440175
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30.3064440200
0.9829
0.9445
21.1860
23.8654
23.8295
22.9591440203
***
*
23.7451
17.9041
*
20.6007440217
1.3768
0.9305
28.8641
29.8888
31.6636
30.1328440218
2.0116
0.9445
23.7257
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27.3318440227
1.2974
0.9445
*
30.7785
31.9097
31.3743440228
1.5738
0.9305
*
28.3687
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0.8877
0.8153
26.9446
26.1567
22.2326
25.0645450076
1.6904
*
*
*
*
*450078
0.8999
0.8153
21.4716
20.0758
20.7809
20.7567450079
1.6789
0.9852
30.2420
30.5968
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1.2493
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23.9025
24.2018
25.5648
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1.7529
0.8901
27.4955
32.6462
30.2031
29.9862( print page 23773)450085
1.0822
0.8153
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25.4425450087
1.3998
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30.0095
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21.8839
22.7815
22.0412450092
1.2126
0.8153
24.9917
26.2781
28.2267
26.4935450096
***
*
26.5103
28.1902
*
27.3122450097
1.4580
0.9925
29.0142
29.8734
31.9758
30.2412450099
1.3019
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19.3245
22.4281
21.1092450119
1.3181
0.9118
27.8027
31.1026
34.4129
30.7679450121
***
*
29.1296
27.7472
*
28.4439450123
1.3318
0.8595
24.9674
26.2469
24.0420
24.9404450124
1.7511
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26.3296
28.3156
26.5694450130
1.1977
0.8949
24.3295
24.3842
26.9201
25.2414450131
***
*
25.9494
*
*
25.9494450132
1.6322
0.9425
30.1620
31.9981
31.1340
31.0941450133
1.5320
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24.7221
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25.1662450148
1.2241
0.9852
27.0894
29.6777
30.0530
28.8673450151
***
*
23.9558
26.2011
22.8759
24.2772450152
1.2565
0.8855
23.3428
23.1056
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23.6074450154
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17.2995( print page 23774)450253
0.9321
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0.9802
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21.4558
22.9486
22.6822
22.3403450315
2.4335
0.9852
37.1721
*
31.4204
33.9617450324
1.5212
0.9852
25.1633
26.6093
27.9889
26.5490450330
1.2552
0.9925
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29.3911450348
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29.2560
29.9580
28.5841450352
1.1062
0.9852
26.2281
27.2983
27.6466
27.0615450353
***
*
27.0248
27.9576
*
27.5079450358
1.9716
0.9925
31.4926
32.5922
33.9078
32.6875450369
0.9268
0.8153
19.9148
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31.9025450379
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1.1714
0.9852
25.6732
26.9638
26.8481
26.4861450393
0.7662
0.9852
21.9347
*
39.0250
28.4483450395
1.0730
0.9925
27.5189
26.7743
28.4265
27.6022450399
0.8925
0.8153
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29.8643
31.7040
30.2580450411
1.0061
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20.9372
21.5746
21.7875
21.4276450418
***
*
28.4362
*
*
28.4362450419
1.3124
0.9852
31.9966
34.2427
34.9949
33.8163450422
1.2786
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19.8494450508
1.4530
0.8666
28.4471
27.2850
29.1501
28.3018450514
***
*
26.3704
27.3043
26.4002
26.6921450518
1.4419
0.8595
28.1755
29.1322
27.5863
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26.3740( print page 23775)450573
1.0770
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33.5496
32.6557450683
1.2015
0.9852
27.4925
21.1737
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24.2908450684
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1.5563
0.9521
28.8285
29.4980
30.4912
29.6225450715
1.3146
0.9852
17.3991
17.0235
*
17.2098450716
1.4070
0.9925
32.3960
33.7096
33.9898
33.3800450718
1.4669
0.9521
27.3215
28.1560
29.7584
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31.0456
29.9614450730
1.3722
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31.3324
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32.8896
32.3004450742
1.1754
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29.2913450743
1.4478
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0.8780
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20.6343
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22.2429450747
1.1965
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23.8314
25.8175
28.3918
25.8472450749
0.9371
0.8153
20.0487
22.1562
23.9271
21.9555450751
***
*
18.7456
21.4223
*
20.1469450754
0.9429
0.8153
22.1819
24.7797
22.8559
23.2191450755
0.9660
0.8429
19.8988
22.2006
24.7427
22.1319450758
***
*
28.7342
28.2803
28.3285
28.4884450760
1.0061
0.8867
24.7489
25.1637
23.7138
24.5602( print page 23776)450766
2.0334
0.9852
30.8004
30.2341
31.2061
30.7524450770
1.1706
0.9521
24.1647
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1.5291
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28.1299450795
1.1739
0.9925
25.2007
32.9803
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24.1984
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24.1145450828
1.3774
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24.8236
26.9546
25.5737450829
***
*
20.6016
19.5842
*
20.0933450830
1.0119
0.9283
28.5902
27.8005
28.4004
28.2670450831
0.9180
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35.1102
32.8357
33.5034450853
1.7353
0.9852
36.1169
37.1043
38.3572
37.3449450854
***
*
27.1868
*
*
27.1868450855
1.6258
0.9226
30.8855
32.6916
30.7321
31.4205450856
2.0970
0.8949
39.0865
37.7362
35.4977
37.3569450857
***
*
30.4632
*
*
30.4632450860
1.8529
0.9925
24.0171
29.1075
33.3360
29.3070450861
***
*
34.9290
*
*
34.9290450862
1.5594
0.9925
31.2224
31.8095
33.7932
32.2128450863
***
*
24.8825
*
*
24.8825450864
2.1890
0.8901
23.3765
24.5049
25.3514
24.5415450865
1.1032
0.9521
29.1763
29.9559
31.9179
30.4451450866
***
*
15.2959
*
*
15.2959450867
1.1589
0.9521
28.2289
29.5879
31.4926
29.7806450868
1.7418
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25.3486
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27.0759450869
2.1455
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22.6253
26.1616
28.7406
27.5500450870
***
*
37.4364
*
*
37.4364450871
1.8768
0.9521
*
28.9150
32.3967
30.6337450872
1.3756
0.9852
*
27.2833
31.7321
29.8421450873
***
*
*
14.8821
*
14.8821450874
1.6738
0.9852
*
34.6083
35.6817
35.2071450875
1.7360
0.8997
*
23.2763
23.2949
23.2862450876
1.9264
0.8712
*
28.4343
30.3498
29.4575450877
1.4979
0.8867
*
26.1867
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27.6968450878
2.5641
0.8949
*
31.6750
33.6233
32.6691450879
1.3352
0.8816
*
35.5672
36.4836
36.0727450880
1.5477
0.9852
*
35.9572
32.6680
34.0899450881
***
*
*
24.5464
*
24.5464( print page 23777)450882
***
*
*
26.6910
*
26.6910450883
2.4793
0.9852
*
35.2646
37.1500
36.2387450884
1.0281
0.8715
*
27.8213
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1.4517
0.9852
*
34.1148
36.0926
35.1477450886
1.5017
0.9852
*
*
30.1552
30.1552450887
***
*
*
*
25.5574
25.5574450888
1.7096
0.9708
*
*
28.5970
28.5970450889
1.5530
0.9852
*
*
35.6125
35.6125450890
1.8266
0.9852
*
*
32.1973
32.1973450891
1.4143
0.9852
*
*
39.0842
39.0842450892
***
*
*
*
39.5303
39.5303450893
1.3909
0.9852
*
*
36.2633
36.2633450894
1.7932
0.9852
*
*
25.9422
25.9422450895
***
*
*
18.4142
*
18.4142460001
1.8307
0.9075
28.7150
30.0040
*
29.3648460003
1.5382
0.9271
31.4135
32.3427
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31.1480460004
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22.3156460019
1.1962
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24.3756
23.2202
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24.2508460020
0.9177
*
18.5159
*
*
18.5159460021
1.7949
1.1388
28.0291
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29.2069460023
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1.6931
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24.9926
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26.3926
25.7328460055
1.4742
0.9075
*
*
*
*470001
1.2668
0.9297
28.3017
29.7540
32.2867
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1.8776
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29.3468
30.5993
29.0707( print page 23778)490021
1.4622
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26.9966490022
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29.1527
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1.4069
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29.7186
31.7061
33.7101
31.7115490073
***
*
33.1829
34.5774
46.4178
36.1085490075
1.3188
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25.2022
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0.9203
*
17.0548
19.0055
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*
25.9379490106
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0.8323
0.8061
*
33.2405
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33.0901
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36.4745
34.6036500052
1.4632
1.1562
*
*
*
*500053
1.2557
1.0164
28.2901
30.2811
28.5649
29.0318500054
1.9737
1.0514
31.6595
32.5105
34.8088
32.9758500058
1.6843
1.0164
30.7487
30.7034
32.6820
31.4274500060
1.3541
1.1562
37.4869
38.7682
40.3002
38.8996500064
1.8909
1.1562
31.6112
32.3581
34.7906
32.9459500072
1.2605
1.0576
31.2000
32.5269
33.1128
32.3268500077
1.4765
1.0514
31.6153
33.2223
34.3082
33.0354500079
1.3733
1.1377
31.3280
32.5809
34.2468
32.6847500084
1.2608
1.1562
30.2411
32.7883
33.3057
32.1164500088
1.4739
1.1562
35.3770
36.7953
38.5166
36.8898500108
1.6172
1.1377
31.8483
34.3872
35.8890
34.0321500119
1.3809
1.0514
29.7028
31.2233
31.7102
30.8549500124
1.4071
1.1562
32.3505
34.4790
36.3296
34.3958500129
1.5755
1.1377
32.1102
34.4447
37.3169
34.6824500134
0.5967
1.1562
27.2428
28.1374
28.9744
28.2246500139
1.4903
1.1462
33.9739
34.6412
37.5682
35.2949500141
1.2645
1.1562
31.3308
33.7532
34.2350
33.1511500143
0.5889
1.1462
23.6766
25.3099
26.3882
25.1082500148
1.2204
1.0164
26.4206
37.7830
24.6331
30.3555500150
1.2775
1.1186
*
*
34.7828
34.7828510001
1.9319
0.8569
25.2973
25.8693
26.7901
26.0184510002
1.2681
0.8732
23.8921
23.7270
24.8834
24.1721510006
1.3528
0.8631
24.9627
24.8777
26.6403
25.4772510007
1.6750
0.9107
24.7264
27.1149
28.5769
26.8115510008
1.3363
0.9253
26.3554
27.5241
27.4687
27.1395510012
0.9584
0.7759
18.8984
20.8455
22.9026
20.8292510013
1.1635
0.7635
22.7882
22.8779
22.9605
22.8737510018
1.0730
0.8398
22.4597
23.1043
23.7726
23.1223510022
1.8098
0.8398
26.9511
26.8328
27.6095
27.1376510023
1.2565
0.8011
20.6435
21.0940
23.1446
21.6346510024
1.7530
0.8569
25.5634
26.6621
31.1308
27.8371510026
0.9848
0.7635
17.9908
19.2025
17.8264
18.3206510029
1.2995
0.8398
22.7104
24.0872
25.3908
24.0179510030
1.1499
0.7635
24.3936
24.2007
25.5580
24.7270510031
1.4626
0.8398
23.2624
24.0237
26.7854
24.6110510033
1.5988
0.8028
22.6189
24.0796
24.2824
23.6905510038
1.0704
0.7635
20.6565
20.9180
21.7526
21.1101( print page 23780)510039
1.3740
0.7635
19.8751
20.4719
21.3807
20.5901510046
1.3781
0.7795
22.1712
22.2935
24.7175
23.0443510047
1.2053
0.8569
27.1214
27.6859
28.8777
27.9077510048
1.1872
0.7635
18.8576
22.7930
23.6384
21.5406510050
1.5377
0.8569
21.0772
21.9009
23.5780
22.1906510053
1.0938
0.7635
22.3318
21.5338
22.6278
22.1640510055
1.5578
0.9107
28.4615
29.4111
30.7366
29.5844510058
1.3382
0.8028
23.9015
25.3248
24.8750
24.7020510059
***
*
22.1435
20.8847
21.9025
21.6378510062
1.2241
0.8398
26.2296
26.7066
27.7962
26.9089510067
1.0951
0.7635
25.0437
25.2130
25.2231
25.1585510070
1.2034
0.8398
23.5639
23.9742
25.4968
24.3383510071
1.2818
0.7795
23.4508
23.2954
23.4542
23.4003510072
1.0733
0.7635
20.5146
19.4370
20.2379
20.0443510077
1.0382
0.8748
24.5010
25.9515
27.1603
25.8349510082
1.1006
0.7635
19.9081
20.3279
21.1654
20.4929510085
1.2021
0.8398
26.3877
26.2617
26.8122
26.4911510086
1.0879
0.7635
19.8735
19.2606
20.1963
19.7687510090
***
*
*
*
39.0764
39.0764520002
1.3026
0.9823
27.7705
29.0501
31.9053
29.6240520004
1.4018
0.9796
27.6530
28.9857
30.9192
29.2469520008
1.5695
1.0182
30.7553
33.8057
33.6749
32.7716520009
1.6546
0.9511
27.4044
28.8591
29.6272
28.6360520011
1.2826
0.9511
26.6268
28.0224
29.5006
28.0213520013
1.4977
1.0976
29.0018
30.1834
32.1701
30.5206520017
1.1201
0.9599
28.4699
29.3278
31.0517
29.6386520019
1.3503
0.9511
28.6971
29.8640
30.2175
29.6442520021
1.3207
1.0315
28.4182
29.1129
29.7788
29.1139520027
1.4430
1.0182
31.4284
32.4137
33.5809
32.5077520028
1.3966
1.1014
26.7260
28.0813
29.4683
28.3047520030
1.6874
0.9823
29.4678
30.5724
31.6785
30.5738520033
1.2248
0.9511
28.0662
29.0236
30.2616
29.1742520034
1.2622
0.9511
26.1094
26.8886
28.1800
27.0611520035
1.3586
0.9587
27.3276
28.1048
29.4053
28.2938520037
1.7405
0.9823
30.1799
32.2144
31.6795
31.3757520038
1.2048
1.0182
29.3134
29.6339
30.5249
29.8341520040
***
*
29.1262
31.2038
35.9633
32.0420520041
1.0813
1.1232
23.5495
25.3764
26.1572
25.0721520044
1.3626
0.9587
27.3685
28.2382
28.6601
28.1191520045
1.5915
0.9511
27.3336
29.2556
30.0840
28.8905520048
1.5102
0.9511
26.8080
29.1870
30.1468
28.5889520049
2.0434
0.9511
26.9851
28.0936
29.4223
28.1983520051
1.5346
1.0182
31.9949
31.5974
32.4111
32.0738520057
1.1885
0.9704
27.7528
29.1158
31.3292
29.4114520059
1.3571
1.0026
29.5801
30.4491
31.1783
30.4093520060
***
*
24.8638
*
*
24.8638520062
1.3331
1.0182
28.8510
32.8584
32.6992
31.5738520063
1.1678
1.0182
29.0993
30.3391
31.5185
30.3770520064
1.5219
1.0182
30.3225
31.5723
33.1248
31.5779520066
1.4182
0.9824
29.2088
31.0644
31.6673
30.6304520070
1.6950
0.9599
27.6771
28.2059
30.0451
28.7359520071
1.2135
1.0026
30.0262
30.6930
31.5435
30.8053520075
1.6946
0.9511
29.2920
30.1582
32.2755
30.5484520076
1.2239
1.1014
27.3335
27.4423
26.8932
27.2252520078
1.4666
1.0182
29.9837
31.6606
32.0179
31.1768520083
1.7215
1.1232
30.8826
32.7728
34.7200
32.8276520087
1.7126
0.9796
28.5810
30.5659
31.9747
30.3890520088
1.3463
0.9523
30.7450
30.6657
30.7462
30.7187520089
1.5744
1.1232
33.8793
33.4098
34.9331
34.0808520091
1.2752
0.9511
25.4593
27.3442
28.7166
27.1741520095
1.2282
0.9704
30.4216
32.0381
33.2399
31.9187520096
1.3683
1.0026
27.8896
29.5985
28.5204
28.6435520097
1.3252
0.9511
29.1479
29.9998
31.0204
30.0765520098
2.0129
1.1232
32.5785
36.5776
38.0962
35.8078520100
1.3329
0.9824
29.3243
29.9458
31.7748
30.3552520102
1.1961
1.0026
29.1680
30.7990
31.5735
30.5379520103
1.5575
1.0182
30.3165
32.6269
34.5620
32.5629( print page 23781)520107
1.3439
0.9523
28.9878
29.4178
30.0343
29.4887520109
1.0451
0.9511
24.7228
25.0697
25.9723
25.2667520113
1.2659
0.9511
31.4708
33.3475
33.3023
32.7086520116
1.2564
1.0026
27.9688
30.2156
31.6687
29.9794520132
***
*
25.0006
27.3431
*
26.0481520136
1.6351
1.0182
30.6522
32.1479
32.3480
31.6992520138
1.8898
1.0182
30.8016
31.6581
32.5653
31.6762520139
1.3351
1.0182
28.8870
30.4903
31.7060
30.3322520140
***
*
31.0043
31.1315
*
31.0699520152
***
*
29.7308
*
*
29.7308520160
1.7768
0.9511
27.9548
29.5582
30.3037
29.2715520170
1.4785
1.0182
30.4309
31.4710
31.7586
31.2272520173
1.0888
*
29.2429
31.0599
*
30.1478520177
1.5992
1.0182
31.4555
32.5714
33.1218
32.4064520189
1.1684
1.0315
28.0014
29.0295
29.2212
28.7600520193
1.7185
0.9511
27.8113
29.2007
29.4715
28.8651520194
1.5801
1.0182
30.1668
31.4379
30.9993
30.8959520195
0.6565
1.0182
36.3116
36.2900
41.6044
37.9667520196
1.7736
0.9599
36.9266
31.1175
31.6125
32.7571520197
***
*
*
30.1917
*
30.1917520198
1.3572
0.9511
*
28.5975
29.9781
29.2918520199
2.0438
1.0182
*
36.5699
37.0103
36.7943520202
1.6509
0.9823
*
*
*
*520203
2.9989
1.1232
*
*
*
*530002
1.1984
0.9223
28.3063
29.2069
29.2407
28.9305530006
1.2359
0.9223
27.2421
29.2104
30.3704
28.9041530008
1.1650
0.9223
24.0090
26.5180
30.5992
27.0161530009
0.9602
0.9223
24.6719
26.0490
27.0529
25.9191530010
1.2145
0.9223
25.9852
27.4121
28.5518
27.3468530011
1.1265
0.9223
27.8772
27.8613
31.1309
28.8654530012
1.7040
0.9618
26.9582
28.7524
30.6085
28.7888530014
1.5582
0.9611
26.7156
28.5469
29.6709
28.4442530015
1.1779
0.9327
29.8310
29.8306
33.4886
31.0902530017
0.9134
0.9223
29.8503
31.1105
25.8172
28.8536530025
1.2876
0.9223
24.4392
29.4346
28.8951
27.4712530032
1.0528
0.9223
23.9004
24.6580
25.4254
24.68441
                             Based on salaries adjusted for occupational mix, according to the calculation in section III.D.2. of the preamble to this proposed rule.2
                             The case-mix index is based on the billed DRGs in the FY 2007 MedPAR file. It is not transfer adjusted.3
                             Provider 140010 is part of a multicampus provider (MCH) that is comprised of campuses that are located in two different CBSAs. The provider number with a “B” in the 4th position, 140B10, indicates the portion of the wage and hours of the MCH that is allocated to CBSA 29404; provider number 140010 indicates the portion of wages and hours of the MCH that is allocated to CBSA 16974.4
                             Provider 220074 is part of a multicampus provider (MCH) that is comprised of campuses that are located in two different CBSAs. The provider number with a “B” in the 4th position, 220B74, indicates the portion of the wage and hours of the MCH that is allocated to CBSA 14484; provider number 220074 indicates the portion of wages and hours of the MCH that is allocated to CBSA 39300.5
                             Provider 230104 is part of a multicampus provider (MCH) that is comprised of campuses that are located in two different CBSAs. The provider number with a “B” in the 4th position, 230B04, indicates the portion of the wage and hours of the MCH that is allocated to CBSA 47644; provider number 230104 indicates the portion of wages and hours of the MCH that is allocated to CBSA 19804.*Denotes wage data not available for the provider for that year.**Based on the sum of the salaries and hours computed for Federal FYs 2007, 2008, and 2009.***Denotes MedPAR data not available for the provider for FY 2007.
 Table 3A.—FY 2009 and 3-Year* Average Hourly Wage for Urban Areas by CBSA
[*Based on the salaries and hours computed for Federal FYs 2007, 2008, and 2009]
CBSA code
Urban area
FY 2009 average hourly wage
3-Year average hourly wage10180
Abilene, TX
27.1004
25.772310380
Aguadilla-Isabela-San Sebastián, PR
10.6709
10.762210420
Akron, OH
28.3319
26.929210500
Albany, GA
28.2617
27.218410580
Albany-Schenectady-Troy, NY
28.4655
27.222710740
Albuquerque, NM
30.6500
29.720110780
Alexandria, LA
26.1655
24.791310900
Allentown-Bethlehem-Easton, PA-NJ
31.2097
30.742511020
Altoona, PA
26.7060
25.9824( print page 23782)11100
Amarillo, TX
29.0008
28.261911180
Ames, IA
30.4757
30.090111260
Anchorage, AK
38.0798
36.623611300
Anderson, IN
28.7750
27.594811340
Anderson, SC
31.3772
28.740111460
Ann Arbor, MI
33.6572
32.657911500
Anniston-Oxford, AL
25.8029
24.680411540
Appleton, WI
30.0406
29.024111700
Asheville, NC
29.6273
28.551712020
Athens-Clarke County, GA
30.9008
29.859112060
Atlanta-Sandy Springs-Marietta, GA
31.4502
30.326912100
Atlantic City-Hammonton, NJ
38.0743
36.779412220
Auburn-Opelika, AL
24.3605
24.440712260
Augusta-Richmond County, GA-SC
30.9498
29.760312420
Austin-Round Rock, TX
30.6888
29.307912540
Bakersfield, CA
36.5786
34.604512580
Baltimore-Towson, MD
32.1655
30.937212620
Bangor, ME
32.5961
30.639712700
Barnstable Town, MA
40.8356
39.132612940
Baton Rouge, LA
26.2494
25.038412980
Battle Creek, MI
32.3508
30.740913020
Bay City, MI
30.3060
28.705713140
Beaumont-Port Arthur, TX
27.7045
26.777813380
Bellingham, WA
36.7964
34.734713460
Bend, OR
35.6036
33.255413644
Bethesda-Frederick-Gaithersburg, MD
33.9508
32.857113740
Billings, MT
29.1465
27.780513780
Binghamton, NY
28.1030
27.613613820
Birmingham-Hoover, AL
28.3138
27.382113900
Bismarck, ND
23.2350
22.494913980
Blacksburg-Christiansburg-Radford, VA
26.1759
25.259914020
Bloomington, IN
30.3742
28.683714060
Bloomington-Normal, IL
30.6807
29.068314260
Boise City-Nampa, ID
29.9365
29.137114484
Boston-Quincy, MA
38.6504
36.738714500
Boulder, CO
32.3079
31.305214540
Bowling Green, KY
26.8895
25.310614600
Bradenton-Sarasota-Venice, FL
31.5095
30.234514740
Bremerton-Silverdale, WA
34.5710
33.507114860
Bridgeport-Stamford-Norwalk, CT
42.0944
39.867815180
Brownsville-Harlingen, TX
29.7382
29.031915260
Brunswick, GA
32.6731
31.335015380
Buffalo-Niagara Falls, NY
30.9123
29.583315500
Burlington, NC
27.7660
26.618615540
Burlington-South Burlington, VT
29.6973
29.146015764
Cambridge-Newton-Framingham, MA
35.6990
34.380915804
Camden, NJ
34.1250
32.647615940
Canton-Massillon, OH
28.5297
27.678215980
Cape Coral-Fort Myers, FL
30.6869
29.430216180
Carson City, NV
32.3122
30.212416220
Casper, WY
30.6085
28.788816300
Cedar Rapids, IA
28.3050
27.034116580
Champaign-Urbana, IL
30.1432
29.175116620
Charleston, WV
27.1192
26.307116700
Charleston-North Charleston-Summerville, SC
29.7955
28.409716740
Charlotte-Gastonia-Concord, NC-SC
30.8456
29.451516820
Charlottesville, VA
31.3517
29.827316860
Chattanooga, TN-GA
28.6158
27.643916940
Cheyenne, WY
29.6709
28.444216974
Chicago-Naperville-Joliet, IL
33.3033
32.597317020
Chico, CA
35.0695
34.276117140
Cincinnati-Middletown, OH-KY-IN
30.9027
29.728517300
Clarksville, TN-KY
26.7544
25.747817420
Cleveland, TN
26.2909
25.379017460
Cleveland-Elyria-Mentor, OH
29.8896
28.933617660
Coeur d'Alene, ID
29.5998
28.725617780
College Station-Bryan, TX
29.6321
28.175617820
Colorado Springs, CO
31.4793
29.647017860
Columbia, MO
27.2133
26.2863( print page 23783)17900
Columbia, SC
28.9948
27.667217980
Columbus, GA-AL
29.2007
27.484418020
Columbus, IN
31.7711
29.890218140
Columbus, OH
31.8334
30.963518580
Corpus Christi, TX
27.3797
26.226018700
Corvallis, OR
35.7074
34.173919060
Cumberland, MD-WV
24.2686
24.374419124
Dallas-Plano-Irving, TX
31.7539
30.582719140
Dalton, GA
27.3868
26.852119180
Danville, IL
31.2955
29.531019260
Danville, VA
27.3411
26.079519340
Davenport-Moline-Rock Island, IA-IL
27.2010
26.896419380
Dayton, OH
30.0672
28.710019460
Decatur, AL
24.8584
24.289319500
Decatur, IL
26.3336
25.309119660
Deltona-Daytona Beach-Ormond Beach, FL
28.4632
27.844119740
Denver-Aurora, CO
34.1438
32.797019780
Des Moines-West Des Moines, IA
30.6173
28.745819804
Detroit-Livonia-Dearborn, MI
32.3846
31.460520020
Dothan, AL
24.8722
23.354620100
Dover, DE
34.3823
32.301320220
Dubuque, IA
26.5562
26.919020260
Duluth, MN-WI
33.8981
31.784220500
Durham, NC
31.2419
30.094420740
Eau Claire, WI
30.9902
29.632520764
Edison-New Brunswick, NJ
36.1487
34.511820940
El Centro, CA
29.1074
28.112921060
Elizabethtown, KY
27.2829
26.535221140
Elkhart-Goshen, IN
30.6988
29.432321300
Elmira, NY
26.8991
25.856421340
El Paso, TX
28.5812
28.109521500
Erie, PA
28.0896
26.918821660
Eugene-Springfield, OR
35.9675
34.218621780
Evansville, IN-KY
27.4904
26.711921820
Fairbanks, AK
36.1891
34.297521940
Fajardo, PR
13.1075
12.884622020
Fargo, ND-MN
26.0887
24.986422140
Farmington, NM
25.2152
26.157722180
Fayetteville, NC
31.9846
30.223322220
Fayetteville-Springdale-Rogers, AR-MO
29.4256
27.923922380
Flagstaff, AZ
37.5481
35.879822420
Flint, MI
36.2781
34.150322500
Florence, SC
27.3900
26.563922520
Florence-Muscle Shoals, AL
25.2619
24.076322540
Fond du Lac, WI
30.7462
30.718822660
Fort Collins-Loveland, CO
30.8219
29.276422744
Fort Lauderdale-Pompano Beach-Deerfield Beach, FL
31.6349
30.848522900
Fort Smith, AR-OK
25.2751
24.493723020
Fort Walton Beach-Crestview-Destin, FL
28.1059
26.845023060
Fort Wayne, IN
28.8955
28.172923104
Fort Worth-Arlington, TX
31.2137
29.833023420
Fresno, CA
35.7716
34.281623460
Gadsden, AL
25.7517
24.968823540
Gainesville, FL
30.4476
29.094023580
Gainesville, GA
30.0367
28.893223844
Gary, IN
30.0576
28.862824020
Glens Falls, NY
28.2938
26.817524140
Goldsboro, NC
29.5207
28.519724220
Grand Forks, ND-MN
24.9880
24.405524300
Grand Junction, CO
31.2200
29.987924340
Grand Rapids-Wyoming, MI
29.9037
29.139924500
Great Falls, MT
27.9340
26.544624540
Greeley, CO
32.4200
30.998824580
Green Bay, WI
30.6825
29.507824660
Greensboro-High Point, NC
29.4639
28.136324780
Greenville, NC
30.1256
28.879624860
Greenville-Mauldin-Easley, SC
31.0004
29.764925020
Guayama, PR
10.1106
09.617625060
Gulfport-Biloxi, MS
28.6731
27.0856( print page 23784)25180
Hagerstown-Martinsburg, MD-WV
29.8828
28.763825260
Hanford-Corcoran, CA
35.7293
33.405225420
Harrisburg-Carlisle, PA
29.4620
28.648125500
Harrisonburg, VA
28.8643
27.890825540
Hartford-West Hartford-East Hartford, CT
36.0188
34.198125620
Hattiesburg, MS
24.2839
23.413925860
Hickory-Lenoir-Morganton, NC
28.8353
27.778925980
1
                                 Hinesville-Fort Stewart, GA26100
Holland-Grand Haven, MI
29.3296
28.260526180
Honolulu, HI
37.4061
34.972226300
Hot Springs, AR
29.4741
27.945726380
Houma-Bayou Cane-Thibodaux, LA
25.3740
24.794226420
Houston-Sugar Land-Baytown, TX
31.9906
30.986926580
Huntington-Ashland, WV-KY-OH
29.4107
27.764426620
Huntsville, AL
28.9607
27.862426820
Idaho Falls, ID
29.3359
28.269926900
Indianapolis-Carmel, IN
31.6890
30.310526980
Iowa City, IA
30.2168
29.311627060
Ithaca, NY
30.8103
29.902827100
Jackson, MI
30.5399
29.581127140
Jackson, MS
25.9122
24.968727180
Jackson, TN
27.3080
26.686527260
Jacksonville, FL
29.3541
28.390427340
Jacksonville, NC
27.0573
25.921427500
Janesville, WI
31.7184
30.503627620
Jefferson City, MO
29.1505
27.251927740
Johnson City, TN
25.8452
24.593927780
Johnstown, PA
25.9505
24.988127860
Jonesboro, AR
26.0204
24.649127900
Joplin, MO
31.3014
28.651028020
Kalamazoo-Portage, MI
35.1589
33.291228100
Kankakee-Bradley, IL
38.7329
33.030028140
Kansas City, MO-KS
30.4624
29.057928420
Kennewick-Pasco-Richland, WA
31.3630
30.656128660
Killeen-Temple-Fort Hood, TX
28.5417
26.955728700
Kingsport-Bristol-Bristol, TN-VA
25.3719
24.515428740
Kingston, NY
30.3965
29.349228940
Knoxville, TN
25.4214
24.894329020
Kokomo, IN
29.8433
29.284529100
La Crosse, WI-MN
31.6291
30.029429140
Lafayette, IN
28.8946
27.288529180
Lafayette, LA
27.2063
25.963829340
Lake Charles, LA
24.4720
24.043429404
Lake County-Kenosha County, IL-WI
33.4390
32.663929420
Lake Havasu City-Kingman, AZ
31.6370
29.638329460
Lakeland-Winter Haven, FL
28.1459
27.500429540
Lancaster, PA
31.0576
30.044929620
Lansing-East Lansing, MI
31.9010
30.991429700
Laredo, TX
28.4147
26.309529740
Las Cruces, NM
28.3851
27.292529820
Las Vegas-Paradise, NV
37.5945
35.488929940
Lawrence, KS
26.8014
25.644430020
Lawton, OK
27.8148
26.337630140
Lebanon, PA
29.0022
26.830730300
Lewiston, ID-WA
29.8774
29.007430340
Lewiston-Auburn, ME
30.0517
28.772030460
Lexington-Fayette, KY
28.8431
27.816330620
Lima, OH
29.9606
28.361730700
Lincoln, NE
31.0009
30.391530780
Little Rock-North Little Rock-Conway, AR
28.2114
28.253030860
Logan, UT-ID
28.3537
27.895830980
Longview, TX
27.3041
26.935531020
Longview, WA
36.9240
33.843431084
Los Angeles-Long Beach-Glendale, CA
38.9626
36.610831140
Louisville-Jefferson County, KY-IN
29.7925
28.326931180
Lubbock, TX
28.0803
26.783531340
Lynchburg, VA
27.7933
26.666031420
Macon, GA
31.6291
30.340931460
Madera, CA
26.7719
26.0576( print page 23785)31540
Madison, WI
36.2618
34.394531700
Manchester-Nashua, NH
33.0542
31.482131900
Mansfield, OH
29.9812
28.572632420
Mayagüez, PR
12.5555
11.717032580
McAllen-Edinburg-Mission, TX
29.3886
27.988432780
Medford, OR
33.0786
32.322332820
Memphis, TN-MS-AR
30.0626
28.879832900
Merced, CA
39.1381
36.703533124
Miami-Miami Beach-Kendall, FL
31.8599
30.691133140
Michigan City-La Porte, IN
29.1570
27.738033260
Midland, TX
30.8197
29.699333340
Milwaukee-Waukesha-West Allis, WI
32.8741
31.808533460
Minneapolis-St. Paul-Bloomington, MN-WI
35.4391
33.758033540
Missoula, MT
28.2291
26.968333660
Mobile, AL
25.1640
24.356933700
Modesto, CA
39.1156
36.986533740
Monroe, LA
25.6673
24.684333780
Monroe, MI
28.7386
29.035033860
Montgomery, AL
26.3999
25.105634060
Morgantown, WV
27.8745
26.487034100
Morristown, TN
23.5598
23.407334580
Mount Vernon-Anacortes, WA
32.2055
31.342934620
Muncie, IN
26.7339
25.426034740
Muskegon-Norton Shores, MI
32.9571
31.317234820
Myrtle Beach-North Myrtle Beach-Conway, SC
28.0263
27.077234900
Napa, CA
45.2771
42.340534940
Naples-Marco Island, FL
31.7163
30.532334980
Nashville-Davidson-Murfreesboro-Franklin, TN
30.5185
29.835635004
Nassau-Suffolk, NY
41.0210
39.818435084
Newark-Union, NJ-PA
37.3360
36.127135300
New Haven-Milford, CT
38.1842
37.016835380
New Orleans-Metairie-Kenner, LA
29.4715
27.134035644
New York-White Plains-Wayne, NY-NJ
42.0303
40.886635660
Niles-Benton Harbor, MI
29.3085
28.026435980
Norwich-New London, CT
36.8468
36.039836084
Oakland-Fremont-Hayward, CA
49.9560
47.794136100
Ocala, FL
27.4049
26.535736140
Ocean City, NJ
37.4820
34.300836220
Odessa, TX
30.3782
30.324736260
Ogden-Clearfield, UT
29.7855
28.261536420
Oklahoma City, OK
27.9928
27.113536500
Olympia, WA
37.0153
34.971036540
Omaha-Council Bluffs, NE-IA
30.2913
29.208136740
Orlando-Kissimmee, FL
29.6766
28.978336780
Oshkosh-Neenah, WI
30.0761
28.854436980
Owensboro, KY
28.2413
27.132837100
Oxnard-Thousand Oaks-Ventura, CA
36.9286
35.105537340
Palm Bay-Melbourne-Titusville, FL
30.3622
29.269037380
2
                                 Palm Coast, FL
28.3179
27.719737460
Panama City-Lynn Haven, FL
27.4719
25.984237620
Parkersburg-Marietta-Vienna, WV-OH
25.9281
25.212237700
Pascagoula, MS
25.8776
25.501237764
Peabody, MA
34.6216
32.817937860
Pensacola-Ferry Pass-Brent, FL
26.1506
24.908137900
Peoria, IL
29.1439
28.439237964
Philadelphia, PA
35.4610
33.958338060
Phoenix-Mesa-Scottsdale, AZ
33.0972
31.581038220
Pine Bluff, AR
26.6629
25.927038300
Pittsburgh, PA
27.6753
26.375938340
Pittsfield, MA
33.6590
31.776238540
Pocatello, ID
29.3360
28.373738660
Ponce, PR
13.2835
13.472538860
Portland-South Portland-Biddeford, ME
31.9890
30.748038900
Portland-Vancouver-Beaverton, OR-WA
36.1216
34.756938940
Port St. Lucie, FL
31.9898
30.802639100
Poughkeepsie-Newburgh-Middletown, NY
35.2679
33.987839140
Prescott, AZ
32.8634
30.961439300
Providence-New Bedford-Fall River, RI-MA
34.3817
33.049039340
Provo-Orem, UT
29.1600
28.8274( print page 23786)39380
Pueblo, CO
27.8188
26.868439460
Punta Gorda, FL
29.9874
29.479839540
Racine, WI
28.8930
28.889239580
Raleigh-Cary, NC
31.2156
30.048439660
Rapid City, SD
30.6204
27.764339740
Reading, PA
30.0875
29.381939820
Redding, CA
41.6249
39.424139900
Reno-Sparks, NV
33.7604
34.633040060
Richmond, VA
29.6609
28.380740140
Riverside-San Bernardino-Ontario, CA
36.2653
34.018140220
Roanoke, VA
28.6468
27.463040340
Rochester, MN
35.3899
33.786540380
Rochester, NY
28.7144
27.809940420
Rockford, IL
31.7824
30.668640484
Rockingham County-Strafford County, NH
31.9359
31.098840580
Rocky Mount, NC
29.2288
27.875140660
Rome, GA
31.2559
29.901740900
Sacramento-Arden-Arcade-Roseville, CA
41.9426
40.383540980
Saginaw-Saginaw Township North, MI
29.1128
28.248541060
St. Cloud, MN
37.2177
34.830841100
St. George, UT
29.7373
29.206941140
St. Joseph, MO-KS
33.7767
30.598141180
St. Louis, MO-IL
28.9842
27.852341420
Salem, OR
34.3369
32.405841500
Salinas, CA
47.9744
45.405041540
Salisbury, MD
29.6266
27.898241620
Salt Lake City, UT
29.8767
29.142241660
San Angelo, TX
27.7212
26.550241700
San Antonio, TX
28.8457
27.666541740
San Diego-Carlsbad-San Marcos, CA
36.2686
34.683441780
Sandusky, OH
28.4754
27.699241884
San Francisco-San Mateo-Redwood City, CA
48.5597
46.782641900
San Germán-Cabo Rojo, PR
14.9779
14.534841940
San Jose-Sunnyvale-Santa Clara, CA
51.2569
48.259241980
San Juan-Caguas-Guaynabo, PR
14.1930
13.805042020
San Luis Obispo-Paso Robles, CA
38.5623
36.311242044
Santa Ana-Anaheim-Irvine, CA
38.1247
35.984642060
Santa Barbara-Santa Maria-Goleta, CA
37.7124
35.116242100
Santa Cruz-Watsonville, CA
51.5525
48.388142140
Santa Fe, NM
34.1580
33.161942220
Santa Rosa-Petaluma, CA
49.2189
45.608142340
Savannah, GA
28.8176
27.842442540
Scranton-Wilkes-Barre, PA
26.5201
25.664842644
Seattle-Bellevue-Everett, WA
37.3352
35.338742680
Sebastian-Vero Beach, FL
30.7417
30.044243100
Sheboygan, WI
29.1159
28.086343300
Sherman-Denison, TX
29.9470
27.306543340
Shreveport-Bossier City, LA
27.5578
26.786343580
Sioux City, IA-NE-SD
28.3024
27.778143620
Sioux Falls, SD
30.2235
29.219743780
South Bend-Mishawaka, IN-MI
31.0993
30.135843900
Spartanburg, SC
29.1025
28.352544060
Spokane, WA
33.9523
32.333244100
Springfield, IL
29.4330
27.909144140
Springfield, MA
33.3312
31.895044180
Springfield, MO
27.3178
26.691944220
Springfield, OH
27.8315
26.502844300
State College, PA
28.4188
27.004044700
Stockton, CA
38.6087
36.471144940
Sumter, SC
27.6406
26.721845060
Syracuse, NY
31.7909
30.576345104
Tacoma, WA
35.9647
33.896945220
Tallahassee, FL
29.0061
27.874645300
Tampa-St. Petersburg-Clearwater, FL
28.9032
28.172345460
Terre Haute, IN
29.4437
27.673645500
Texarkana, TX-Texarkana, AR
26.4165
24.836345780
Toledo, OH
29.8934
28.912645820
Topeka, KS
28.5929
27.059945940
Trenton-Ewing, NJ
34.3697
33.3207( print page 23787)46060
Tucson, AZ
30.4264
29.223246140
Tulsa, OK
27.8831
26.326546220
Tuscaloosa, AL
28.0199
26.829546340
Tyler, TX
28.6912
27.851746540
Utica-Rome, NY
28.1040
27.105746660
Valdosta, GA
26.3052
25.642746700
Vallejo-Fairfield, CA
45.6926
44.812747020
Victoria, TX
25.6787
25.286947220
Vineland-Millville-Bridgeton, NJ
35.2379
33.020147260
Virginia Beach-Norfolk-Newport News, VA-NC
28.5838
27.292347300
Visalia-Porterville, CA
33.2020
31.599647380
Waco, TX
28.0515
26.909147580
Warner Robins, GA
30.5824
28.890247644
Warren-Troy-Farmington Hills, MI
32.1363
31.093247894
Washington-Arlington-Alexandria, DC-VA-MD-WV
34.3840
33.363947940
Waterloo-Cedar Falls, IA
28.0510
26.902848140
Wausau, WI
31.6785
30.573848260
Weirton-Steubenville, WV-OH
25.8721
24.738648300
Wenatchee, WA
30.3614
31.968848424
West Palm Beach-Boca Raton-Boynton Beach, FL
31.1027
29.703048540
Wheeling, WV-OH
22.6472
21.807448620
Wichita, KS
28.9395
27.796448660
Wichita Falls, TX
29.5744
26.820148700
Williamsport, PA
25.8784
24.830648864
Wilmington, DE-MD-NJ
34.0940
32.858848900
Wilmington, NC
29.1370
29.012349020
Winchester, VA-WV
31.4889
30.645749180
Winston-Salem, NC
29.0508
28.224649340
Worcester, MA
35.2688
34.200649420
Yakima, WA
32.0317
30.955249500
Yauco, PR
10.8210
10.606749620
York-Hanover, PA
31.1804
29.569149660
Youngstown-Warren-Boardman, OH-PA
28.8065
27.585449700
Yuba City, CA
34.7445
32.868849740
Yuma, AZ
31.9135
30.13051
                             This area has no average hourly wage because there are no short-term, acute care hospitals in the area.2
                             This is a new CBSA for FY 2008. To calculate the 3-year average hourly wage for this new area, we included the hospitals' data from their previous geographic location for FY 2006 and FY 2007.
 Table 3B.—FY 2009 and 3-Year* Average Hourly Wage for Rural Areas by CBSA
[*Based on the sum of the salaries and hours computed for Federal FYs 2007, 2008, and 2009]
CBSA code
Nonurban area
FY 2009 average hourly wage
3-Year average hourly wage01
Alabama
24.6411
23.624202
Alaska
38.4008
35.413803
Arizona
28.5407
27.457304
Arkansas
24.6204
23.333505
California
38.6569
35.924606
Colorado
30.0754
28.784207
Connecticut
36.4301
35.633008
Delaware
32.6029
30.822610
Florida
27.8797
26.806211
Georgia
25.2642
24.287312
Hawaii
36.0283
33.650813
Idaho
24.4380
24.164114
Illinois
27.1642
25.970515
Indiana
27.3432
26.447516
Iowa
28.1850
26.679117
Kansas
25.9806
24.808918
Kentucky
25.2536
24.224919
Louisiana
24.7667
23.688120
Maine
27.7429
26.271121
Maryland
28.3407
27.460922
Massachusetts23
Michigan
28.5656
27.6632( print page 23788)24
Minnesota
29.3894
28.312625
Mississippi
24.6569
23.927326
Missouri
26.3804
25.217427
Montana
27.8425
26.470028
Nebraska
28.0119
26.948629
Nevada
31.6580
29.648330
New Hampshire
33.2526
32.823731
New Jersey 132
New Mexico
28.5810
27.108933
New York
26.7717
25.811034
North Carolina
27.8184
26.706035
North Dakota
23.7299
22.735836
Ohio
27.6801
26.813837
Oklahoma
25.8341
24.314838
Oregon
33.1220
30.901639
Pennsylvania
26.9119
25.817840
Puerto Rico 141
Rhode Island 142
South Carolina
27.7889
26.874443
South Dakota
27.1581
25.885844
Tennessee
25.6634
24.648645
Texas
26.2796
25.360146
Utah
27.0526
25.672347
Vermont
32.0308
30.293549
Virginia
25.9700
24.996750
Washington
32.6127
31.503051
West Virginia
24.6596
23.698852
Wisconsin
30.7058
29.722453
Wyoming
29.7219
28.31751
                             All counties within the State or territory are classified as urban.
 Table 4A.—Wage Index and Capital Geographic Adjustment Factor (GAF) for Urban Areas by CBSA and by State—FY 2009
[Constituent counties are listed in Table 4E.]
CBSA Code
Urban area
State
Wage index
GAF10180
Abilene, TX
TX
0.8408
0.888010380
Aguadilla-Isabela-San Sebastián, PR
PR
0.3311
0.469110420
Akron, OH
OH
0.8784
0.915010500
Albany, GA
GA
0.8770
0.914010580
Albany-Schenectady-Troy, NY
NY
0.8833
0.918510740
Albuquerque, NM
NM
0.9499
0.965410780
Alexandria, LA
LA
0.8127
0.867610900
Allentown-Bethlehem-Easton, PA-NJ
NJ
1.1221
1.082110900
Allentown-Bethlehem-Easton, PA-NJ
PA
0.9675
0.977611020
Altoona, PA
PA
0.8342
0.883311100
Amarillo, TX
TX
0.8997
0.930211180
Ames, IA
IA
0.9417
0.959711260
Anchorage, AK
AK
1.1884
1.125511300
Anderson, IN
IN
0.8923
0.924911340
Anderson, SC
SC
0.9721
0.980811460
Ann Arbor, MI
MI
1.0444
1.030211500
Anniston-Oxford, AL
AL
0.8007
0.858811540
Appleton, WI
WI
0.9511
0.966211700
Asheville, NC
NC
0.9192
0.943912020
Athens-Clarke County, GA
GA
0.9589
0.971712060
Atlanta-Sandy Springs-Marietta, GA
GA
0.9760
0.983512100
Atlantic City-Hammonton, NJ
NJ
1.1666
1.111312220
Auburn-Opelika, AL
AL
0.7647
0.832212260
Augusta-Richmond County, GA-SC
GA
0.9604
0.972712260
Augusta-Richmond County, GA-SC
SC
0.9589
0.971712420
Austin-Round Rock, TX
TX
0.9521
0.966912540
Bakersfield, CA
CA
1.1822
1.121412580
Baltimore-Towson, MD
MD
0.9981
0.998712620
Bangor, ME
ME
1.0115
1.0079( print page 23789)12700
Barnstable Town, MA
MA
1.2672
1.176112940
Baton Rouge, LA
LA
0.8142
0.868712980
Battle Creek, MI
MI
1.0039
1.002713020
Bay City, MI
MI
0.9472
0.963513140
Beaumont-Port Arthur, TX
TX
0.8595
0.901513380
Bellingham, WA
WA
1.1395
1.093513460
Bend, OR
OR
1.1043
1.070313644
Bethesda-Frederick-Gaithersburg, MD
MD
1.1018
1.068613740
Billings, MT
MT
0.9045
0.933613780
Binghamton, NY
NY
0.8721
0.910513820
Birmingham-Hoover, AL
AL
0.8786
0.915213900
Bismarck, ND
ND
0.7336
0.808813980
Blacksburg-Christiansburg-Radford, VA
VA
0.8122
0.867214020
Bloomington, IN
IN
0.9419
0.959814060
Bloomington-Normal, IL
IL
0.9520
0.966914260
Boise City-Nampa, ID
ID
0.9290
0.950814484
Boston-Quincy, MA
MA
1.1994
1.132614500
Boulder, CO
CO
0.9994
0.999614540
Bowling Green, KY
KY
0.8344
0.883414600
Bradenton-Sarasota-Venice, FL
FL
0.9757
0.983314740
Bremerton-Silverdale, WA
WA
1.0706
1.047814860
Bridgeport-Stamford-Norwalk, CT
CT
1.2591
1.170915180
Brownsville-Harlingen, TX
TX
0.9226
0.946315260
Brunswick, GA
GA
1.0139
1.009515380
Buffalo-Niagara Falls, NY
NY
0.9593
0.971915500
Burlington, NC
NC
0.8632
0.904215540
Burlington-South Burlington, VT
VT
0.9275
0.949815764
Cambridge-Newton-Framingham, MA
MA
1.1078
1.072615804
Camden, NJ
NJ
1.1221
1.082115940
Canton-Massillon, OH
OH
0.8845
0.919415980
Cape Coral-Fort Myers, FL
FL
0.9502
0.965616180
Carson City, NV
NV
1.0027
1.001816220
Casper, WY
WY
0.9618
0.973716300
Cedar Rapids, IA
IA
0.8746
0.912316580
Champaign-Urbana, IL
IL
0.9353
0.955216620
Charleston, WV
WV
0.8398
0.887316700
Charleston-North Charleston-Summerville, SC
SC
0.9231
0.946716740
Charlotte-Gastonia-Concord, NC-SC
NC
0.9570
0.970416740
Charlotte-Gastonia-Concord, NC-SC
SC
0.9557
0.969416820
Charlottesville, VA
VA
0.9728
0.981316860
Chattanooga, TN-GA
GA
0.8880
0.921916860
Chattanooga, TN-GA
TN
0.8857
0.920216940
Cheyenne, WY
WY
0.9223
0.946116974
Chicago-Naperville-Joliet, IL
IL
1.0334
1.022817020
Chico, CA
CA
1.1822
1.121417140
Cincinnati-Middletown, OH-KY-IN
IN
0.9583
0.971317140
Cincinnati-Middletown, OH-KY-IN
KY
0.9590
0.971717140
Cincinnati-Middletown, OH-KY-IN
OH
0.9581
0.971117300
Clarksville, TN-KY
KY
0.8302
0.880417300
Clarksville, TN-KY
TN
0.8280
0.878817420
Cleveland, TN
TN
0.8137
0.868317460
Cleveland-Elyria-Mentor, OH
OH
0.9266
0.949117660
Coeur d'Alene, ID
ID
0.9185
0.943417780
College Station-Bryan, TX
TX
0.9193
0.944017820
Colorado Springs, CO
CO
0.9738
0.982017860
Columbia, MO
MO
0.8470
0.892517900
Columbia, SC
SC
0.8984
0.929317980
Columbus, GA-AL
AL
0.9061
0.934717980
Columbus, GA-AL
GA
0.9061
0.934718020
Columbus, IN
IN
0.9852
0.989818140
Columbus, OH
OH
0.9869
0.991018580
Corpus Christi, TX
TX
0.8494
0.894218700
Corvallis, OR
OR
1.1076
1.072519060
Cumberland, MD-WV
MD
0.8795
0.915819060
Cumberland, MD-WV
WV
0.7635
0.831319124
Dallas-Plano-Irving, TX
TX
0.9852
0.989819140
Dalton, GA
GA
0.8499
0.894619180
Danville, IL
IL
0.9711
0.980119260
Danville, VA
VA
0.8483
0.8935( print page 23790)19340
Davenport-Moline-Rock Island, IA-IL
IL
0.8606
0.902319340
Davenport-Moline-Rock Island, IA-IL
IA
0.8709
0.909719380
Dayton, OH
OH
0.9321
0.953019460
Decatur, AL
AL
0.7714
0.837219500
Decatur, IL
IL
0.8428
0.889519660
Deltona-Daytona Beach-Ormond Beach, FL
FL
0.8814
0.917219740
Denver-Aurora, CO
CO
1.0561
1.038119780
Des Moines-West Des Moines, IA
IA
0.9460
0.962719804
Detroit-Livonia-Dearborn, MI
MI
1.0052
1.003620020
Dothan, AL
AL
0.7718
0.837520100
Dover, DE
DE
1.0669
1.045320220
Dubuque, IA
IA
0.8709
0.909720260
Duluth, MN-WI
MN
1.0519
1.035320260
Duluth, MN-WI
WI
1.0499
1.033920500
Durham, NC
NC
0.9693
0.978920740
Eau Claire, WI
WI
0.9599
0.972420764
Edison-New Brunswick, NJ
NJ
1.1221
1.082120940
El Centro, CA
CA
1.1822
1.121421060
Elizabethtown, KY
KY
0.8466
0.892221140
Elkhart-Goshen, IN
IN
0.9547
0.968821300
Elmira, NY
NY
0.8347
0.883621340
El Paso, TX
TX
0.8867
0.921021500
Erie, PA
PA
0.8708
0.909621660
Eugene-Springfield, OR
OR
1.1157
1.077921780
Evansville, IN-KY
IN
0.8525
0.896521780
Evansville, IN-KY
KY
0.8531
0.896921820
Fairbanks, AK
AK
1.1884
1.125521940
Fajardo, PR
PR
0.4067
0.540022020
Fargo, ND-MN
MN
0.9120
0.938922020
Fargo, ND-MN
ND
0.8212
0.873822140
Farmington, NM
NM
0.8858
0.920322180
Fayetteville, NC
NC
0.9923
0.994722220
Fayetteville-Springdale-Rogers, AR-MO
AR
0.9131
0.939622220
Fayetteville-Springdale-Rogers, AR-MO
MO
0.9123
0.939122380
Flagstaff, AZ
AZ
1.1652
1.110422420
Flint, MI
MI
1.1258
1.084522500
Florence, SC
SC
0.8609
0.902522520
Florence-Muscle Shoals, AL
AL
0.7883
0.849722540
Fond du Lac, WI
WI
0.9523
0.967122660
Fort Collins-Loveland, CO
CO
0.9581
0.971122744
Fort Lauderdale-Pompano Beach-Deerfield Beach, FL
FL
1.0025
1.001722900
Fort Smith, AR-OK
AR
0.7843
0.846722900
Fort Smith, AR-OK
OK
0.8016
0.859523020
Fort Walton Beach-Crestview-Destin, FL
FL
0.8703
0.909323060
Fort Wayne, IN
IN
0.9004
0.930723104
Fort Worth-Arlington, TX
TX
0.9684
0.978323420
Fresno, CA
CA
1.1822
1.121423460
Gadsden, AL
AL
0.7991
0.857623540
Gainesville, FL
FL
0.9427
0.960423580
Gainesville, GA
GA
0.9321
0.953023844
Gary, IN
IN
0.9320
0.952924020
Glens Falls, NY
NY
0.8780
0.914824140
Goldsboro, NC
NC
0.9159
0.941624220
Grand Forks, ND-MN
MN
0.9120
0.938924220
Grand Forks, ND-MN
ND
0.7709
0.836824300
Grand Junction, CO
CO
0.9925
0.994924340
Grand Rapids-Wyoming, MI
MI
0.9305
0.951924500
Great Falls, MT
MT
0.8679
0.907524540
Greeley, CO
CO
1.0028
1.001924580
Green Bay, WI
WI
0.9511
0.966224660
Greensboro-High Point, NC
NC
0.9141
0.940324780
Greenville, NC
NC
0.9346
0.954724860
Greenville-Mauldin-Easley, SC
SC
0.9605
0.972825020
Guayama, PR
PR
0.3137
0.452125060
Gulfport-Biloxi, MS
MS
0.8898
0.923225180
Hagerstown-Martinsburg, MD-WV
MD
0.9273
0.949625180
Hagerstown-Martinsburg, MD-WV
WV
0.9253
0.948225260
Hanford-Corcoran, CA
CA
1.1822
1.121425420
Harrisburg-Carlisle, PA
PA
0.9185
0.9434( print page 23791)25500
Harrisonburg, VA
VA
0.8956
0.927325540
Hartford-West Hartford-East Hartford, CT
CT
1.1897
1.126325620
Hattiesburg, MS
MS
0.7653
0.832625860
Hickory-Lenoir-Morganton, NC
NC
0.8946
0.926626100
Holland-Grand Haven, MI
MI
0.9101
0.937526180
Honolulu, HI
HI
1.1608
1.107526300
Hot Springs, AR
AR
0.9146
0.940726380
Houma-Bayou Cane-Thibodaux, LA
LA
0.7870
0.848726420
Houston-Sugar Land-Baytown, TX
TX
0.9925
0.994926580
Huntington-Ashland, WV-KY-OH
KY
0.9127
0.939426580
Huntington-Ashland, WV-KY-OH
OH
0.9118
0.938726580
Huntington-Ashland, WV-KY-OH
WV
0.9107
0.938026620
Huntsville, AL
AL
0.8987
0.929526820
Idaho Falls, ID
ID
0.9327
0.953426900
Indianapolis-Carmel, IN
IN
0.9827
0.988126980
Iowa City, IA
IA
0.9337
0.954127060
Ithaca, NY
NY
0.9561
0.969727100
Jackson, MI
MI
0.9477
0.963927140
Jackson, MS
MS
0.8095
0.865327180
Jackson, TN
TN
0.8452
0.891227260
Jacksonville, FL
FL
0.9092
0.936927340
Jacksonville, NC
NC
0.8632
0.904227500
Janesville, WI
WI
0.9824
0.987927620
Jefferson City, MO
MO
0.9038
0.933127740
Johnson City, TN
TN
0.7999
0.858227780
Johnstown, PA
PA
0.8342
0.883327860
Jonesboro, AR
AR
0.8291
0.879627900
Joplin, MO
MO
0.9704
0.979628020
Kalamazoo-Portage, MI
MI
1.0910
1.061528100
Kankakee-Bradley, IL
IL
1.2018
1.134128140
Kansas City, MO-KS
KS
0.9453
0.962228140
Kansas City, MO-KS
MO
0.9444
0.961628420
Kennewick-Pasco-Richland, WA
WA
1.0164
1.011228660
Killeen-Temple-Fort Hood, TX
TX
0.8855
0.920128700
Kingsport-Bristol-Bristol, TN-VA
TN
0.7957
0.855128700
Kingsport-Bristol-Bristol, TN-VA
VA
0.8061
0.862828740
Kingston, NY
NY
0.9433
0.960828940
Knoxville, TN
TN
0.7957
0.855129020
Kokomo, IN
IN
0.9254
0.948329100
La Crosse, WI-MN
MN
0.9815
0.987329100
La Crosse, WI-MN
WI
0.9796
0.986029140
Lafayette, IN
IN
0.8960
0.927629180
Lafayette, LA
LA
0.8438
0.890229340
Lake Charles, LA
LA
0.7682
0.834829404
Lake County-Kenosha County, IL-WI
IL
1.0376
1.025629404
Lake County-Kenosha County, IL-WI
WI
1.0357
1.024329420
Lake Havasu City-Kingman, AZ
AZ
0.9817
0.987429460
Lakeland-Winter Haven, FL
FL
0.8715
0.910129540
Lancaster, PA
PA
0.9799
0.986229620
Lansing-East Lansing, MI
MI
0.9899
0.993129700
Laredo, TX
TX
0.8816
0.917329740
Las Cruces, NM
NM
0.8858
0.920329820
Las Vegas-Paradise, NV
NV
1.1666
1.111329940
Lawrence, KS
KS
0.8317
0.881430020
Lawton, OK
OK
0.8630
0.904030140
Lebanon, PA
PA
0.8991
0.929830300
Lewiston, ID-WA
ID
0.9271
0.949530300
Lewiston, ID-WA
WA
1.0164
1.011230340
Lewiston-Auburn, ME
ME
0.9326
0.953330460
Lexington-Fayette, KY
KY
0.8950
0.926830620
Lima, OH
OH
0.9299
0.951430700
Lincoln, NE
NE
0.9620
0.973830780
Little Rock-North Little Rock-Conway, AR
AR
0.8754
0.912930860
Logan, UT-ID
ID
0.8827
0.918130860
Logan, UT-ID
UT
0.8827
0.918130980
Longview, TX
TX
0.8666
0.906631020
Longview, WA
WA
1.1434
1.096131084
Los Angeles-Long Beach-Glendale, CA
CA
1.1916
1.127531140
Louisville-Jefferson County, KY-IN
IN
0.9238
0.9472( print page 23792)31140
Louisville-Jefferson County, KY-IN
KY
0.9245
0.947731180
Lubbock, TX
TX
0.8712
0.909931340
Lynchburg, VA
VA
0.8646
0.905231420
Macon, GA
GA
0.9815
0.987331460
Madera, CA
CA
1.1822
1.121431540
Madison, WI
WI
1.1232
1.082831700
Manchester-Nashua, NH
NH
1.0807
1.054631900
Mansfield, OH
OH
0.9295
0.951232420
Mayagüez, PR
PR
0.3896
0.524432580
McAllen-Edinburg-Mission, TX
TX
0.9118
0.938732780
Medford, OR
OR
1.0298
1.020332820
Memphis, TN-MS-AR
AR
0.9329
0.953532820
Memphis, TN-MS-AR
MS
0.9329
0.953532820
Memphis, TN-MS-AR
TN
0.9305
0.951932900
Merced, CA
CA
1.1969
1.131033124
Miami-Miami Beach-Kendall, FL
FL
0.9865
0.990733140
Michigan City-La Porte, IN
IN
0.9041
0.933333260
Midland, TX
TX
0.9562
0.969833340
Milwaukee-Waukesha-West Allis, WI
WI
1.0182
1.012433460
Minneapolis-St. Paul-Bloomington, MN-WI
MN
1.0997
1.067233460
Minneapolis-St. Paul-Bloomington, MN-WI
WI
1.0976
1.065933540
Missoula, MT
MT
0.8909
0.923933660
Mobile, AL
AL
0.7809
0.844233700
Modesto, CA
CA
1.1963
1.130633740
Monroe, LA
LA
0.7961
0.855433780
Monroe, MI
MI
0.8918
0.924633860
Montgomery, AL
AL
0.8192
0.872334060
Morgantown, WV
WV
0.8631
0.904134100
Morristown, TN
TN
0.7957
0.855134580
Mount Vernon-Anacortes, WA
WA
1.0164
1.011234620
Muncie, IN
IN
0.8479
0.893234740
Muskegon-Norton Shores, MI
MI
1.0227
1.015534820
Myrtle Beach-North Myrtle Beach-Conway, SC
SC
0.8683
0.907834900
Napa, CA
CA
1.3847
1.249734940
Naples-Marco Island, FL
FL
0.9820
0.987634980
Nashville-Davidson-Murfreesboro-Franklin, TN
TN
0.9445
0.961735004
Nassau-Suffolk, NY
NY
1.2729
1.179735084
Newark-Union, NJ-PA
NJ
1.1440
1.096535084
Newark-Union, NJ-PA
PA
1.1574
1.105335300
New Haven-Milford, CT
CT
1.1897
1.126335380
New Orleans-Metairie-Kenner, LA
LA
0.9140
0.940335644
New York-White Plains-Wayne, NY-NJ
NJ
1.2878
1.189135644
New York-White Plains-Wayne, NY-NJ
NY
1.3043
1.199535660
Niles-Benton Harbor, MI
MI
0.9095
0.937135980
Norwich-New London, CT
CT
1.1897
1.126336084
Oakland-Fremont-Hayward, CA
CA
1.5278
1.336736100
Ocala, FL
FL
0.8633
0.904236140
Ocean City, NJ
NJ
1.1484
1.099436220
Odessa, TX
TX
0.9425
0.960336260
Ogden-Clearfield, UT
UT
0.9243
0.947536420
Oklahoma City, OK
OK
0.8686
0.908036500
Olympia, WA
WA
1.1462
1.097936540
Omaha-Council Bluffs, NE-IA
IA
0.9360
0.955736540
Omaha-Council Bluffs, NE-IA
NE
0.9400
0.958536740
Orlando-Kissimmee, FL
FL
0.9189
0.943736780
Oshkosh-Neenah, WI
WI
0.9511
0.966236980
Owensboro, KY
KY
0.8764
0.913637100
Oxnard-Thousand Oaks-Ventura, CA
CA
1.1822
1.121437340
Palm Bay-Melbourne-Titusville, FL
FL
0.9401
0.958637380
Palm Coast, FL
FL
0.8769
0.914037460
Panama City-Lynn Haven, FL
FL
0.8633
0.904237620
Parkersburg-Marietta-Vienna, WV-OH
OH
0.8582
0.900637620
Parkersburg-Marietta-Vienna, WV-OH
WV
0.8028
0.860337700
Pascagoula, MS
MS
0.8030
0.860537764
Peabody, MA
MA
1.0744
1.050437860
Pensacola-Ferry Pass-Brent, FL
FL
0.8633
0.904237900
Peoria, IL
IL
0.9043
0.933437964
Philadelphia, PA
PA
1.0992
1.066938060
Phoenix-Mesa-Scottsdale, AZ
AZ
1.0271
1.0185( print page 23793)38220
Pine Bluff, AR
AR
0.8274
0.878338300
Pittsburgh, PA
PA
0.8579
0.900438340
Pittsfield, MA
MA
1.0445
1.030338540
Pocatello, ID
ID
0.9103
0.937738660
Ponce, PR
PR
0.4122
0.545038860
Portland-South Portland-Biddeford, ME
ME
0.9927
0.995038900
Portland-Vancouver-Beaverton, OR-WA
OR
1.1204
1.081038900
Portland-Vancouver-Beaverton, OR-WA
WA
1.1186
1.079838940
Port St. Lucie, FL
FL
0.9905
0.993539100
Poughkeepsie-Newburgh-Middletown, NY
NY
1.0944
1.063739140
Prescott, AZ
AZ
1.0198
1.013539300
Providence-New Bedford-Fall River, RI-MA
MA
1.0669
1.045339300
Providence-New Bedford-Fall River, RI-MA
RI
1.0669
1.045339340
Provo-Orem, UT
UT
0.9052
0.934139380
Pueblo, CO
CO
0.9303
0.951739460
Punta Gorda, FL
FL
0.9286
0.950539540
Racine, WI
WI
0.9511
0.966239580
Raleigh-Cary, NC
NC
0.9685
0.978339660
Rapid City, SD
SD
0.9502
0.965639740
Reading, PA
PA
0.9327
0.953439820
Redding, CA
CA
1.2730
1.179739900
Reno-Sparks, NV
NV
1.0476
1.032440060
Richmond, VA
VA
0.9203
0.944740140
Riverside-San Bernardino-Ontario, CA
CA
1.1822
1.121440220
Roanoke, VA
VA
0.8889
0.922540340
Rochester, MN
MN
1.0982
1.066240380
Rochester, NY
NY
0.8911
0.924140420
Rockford, IL
IL
0.9862
0.990540484
Rockingham County-Strafford County, NH
NH
1.0807
1.054640580
Rocky Mount, NC
NC
0.9068
0.935240660
Rome, GA
GA
0.9699
0.979340900
Sacramento—Arden-Arcade—Roseville, CA
CA
1.2827
1.185940980
Saginaw-Saginaw Township North, MI
MI
0.9034
0.932841060
St. Cloud, MN
MN
1.1549
1.103641100
St. George, UT
UT
0.9228
0.946541140
St. Joseph, MO-KS
KS
1.0481
1.032741140
St. Joseph, MO-KS
MO
1.0472
1.032141180
St. Louis, MO-IL
IL
0.8993
0.929941180
St. Louis, MO-IL
MO
0.8986
0.929441420
Salem, OR
OR
1.0650
1.044141500
Salinas, CA
CA
1.4671
1.300141540
Salisbury, MD
MD
0.9194
0.944141620
Salt Lake City, UT
UT
0.9271
0.949541660
San Angelo, TX
TX
0.8600
0.901941700
San Antonio, TX
TX
0.8949
0.926841740
San Diego-Carlsbad-San Marcos, CA
CA
1.1822
1.121441780
Sandusky, OH
OH
0.8828
0.918241884
San Francisco-San Mateo-Redwood City, CA
CA
1.4879
1.312741900
San Germán-Cabo Rojo, PR
PR
0.4648
0.591841940
San Jose-Sunnyvale-Santa Clara, CA
CA
1.5758
1.365441980
San Juan-Caguas-Guaynabo, PR
PR
0.4404
0.570342020
San Luis Obispo-Paso Robles, CA
CA
1.1822
1.121442044
Santa Ana-Anaheim-Irvine, CA
CA
1.1822
1.121442060
Santa Barbara-Santa Maria-Goleta, CA
CA
1.1822
1.121442100
Santa Cruz-Watsonville, CA
CA
1.5766
1.365842140
Santa Fe, NM
NM
1.0587
1.039842220
Santa Rosa-Petaluma, CA
CA
1.5052
1.323242340
Savannah, GA
GA
0.8943
0.926442540
Scranton—Wilkes-Barre, PA
PA
0.8342
0.883342644
Seattle-Bellevue-Everett, WA
WA
1.1562
1.104542680
Sebastian-Vero Beach, FL
FL
0.9519
0.966843100
Sheboygan, WI
WI
0.9511
0.966243300
Sherman-Denison, TX
TX
0.9291
0.950943340
Shreveport-Bossier City, LA
LA
0.8547
0.898143580
Sioux City, IA-NE-SD
IA
0.8745
0.912343580
Sioux City, IA-NE-SD
NE
0.8783
0.915043580
Sioux City, IA-NE-SD
SD
0.8783
0.915043620
Sioux Falls, SD
SD
0.9379
0.957043780
South Bend-Mishawaka, IN-MI
IN
0.9644
0.9755( print page 23794)43780
South Bend-Mishawaka, IN-MI
MI
0.9651
0.976043900
Spartanburg, SC
SC
0.9017
0.931644060
Spokane, WA
WA
1.0514
1.034944100
Springfield, IL
IL
0.9133
0.939844140
Springfield, MA
MA
1.0343
1.023444180
Springfield, MO
MO
0.8470
0.892544220
Springfield, OH
OH
0.8629
0.904044300
State College, PA
PA
0.8810
0.916944700
Stockton, CA
CA
1.1822
1.121444940
Sumter, SC
SC
0.8609
0.902545060
Syracuse, NY
NY
0.9865
0.990745104
Tacoma, WA
WA
1.1137
1.076545220
Tallahassee, FL
FL
0.8981
0.929045300
Tampa-St. Petersburg-Clearwater, FL
FL
0.8993
0.929945460
Terre Haute, IN
IN
0.9130
0.939645500
Texarkana, TX-Texarkana, AR
AR
0.8197
0.872745500
Texarkana, TX-Texarkana, AR
TX
0.8195
0.872645780
Toledo, OH
OH
0.9267
0.949245820
Topeka, KS
KS
0.8873
0.921445940
Trenton-Ewing, NJ
NJ
1.1221
1.082146060
Tucson, AZ
AZ
0.9442
0.961446140
Tulsa, OK
OK
0.8652
0.905646220
Tuscaloosa, AL
AL
0.8695
0.908746340
Tyler, TX
TX
0.8901
0.923446540
Utica-Rome, NY
NY
0.8721
0.910546660
Valdosta, GA
GA
0.8163
0.870246700
Vallejo-Fairfield, CA
CA
1.3974
1.257547020
Victoria, TX
TX
0.8153
0.869547220
Vineland-Millville-Bridgeton, NJ
NJ
1.1221
1.082147260
Virginia Beach-Norfolk-Newport News, VA
NC
0.8868
0.921047260
Virginia Beach-Norfolk-Newport News, VA
VA
0.8869
0.921147300
Visalia-Porterville, CA
CA
1.1822
1.121447380
Waco, TX
TX
0.8703
0.909347580
Warner Robins, GA
GA
0.9490
0.964847644
Warren-Troy-Farmington-Hills, MI
MI
0.9972
0.998147894
Washington-Arlington-Alexandria, DC-VA-MD-WV
DC
1.0670
1.045447894
Washington-Arlington-Alexandria DC-VA-MD-WV
MD
1.0670
1.045447894
Washington-Arlington-Alexandria DC-VA-MD-WV
VA
1.0669
1.045347894
Washington-Arlington-Alexandria DC-VA-MD-WV
WV
1.0647
1.043947940
Waterloo-Cedar Falls, IA
IA
0.9248
0.947948140
Wausau, WI
WI
0.9823
0.987848260
Weirton-Steubenville, WV-OH
OH
0.8582
0.900648260
Weirton-Steubenville, WV-OH
WV
0.8011
0.859148300
Wenatchee, WA
WA
1.0164
1.011248424
West Palm Beach-Boca Raton-Boynton Beach, FL
FL
0.9631
0.974648540
Wheeling, WV-OH
OH
0.8582
0.900648540
Wheeling, WV-OH
WV
0.7635
0.831348620
Wichita, KS
KS
0.8980
0.929048660
Wichita Falls, TX
TX
0.9175
0.942748700
Williamsport, PA
PA
0.8342
0.883348864
Wilmington, DE-MD-NJ
DE
1.0645
1.043748864
Wilmington, DE-MD-NJ
MD
1.0645
1.043748864
Wilmington, DE-MD-NJ
NJ
1.1221
1.082148900
Wilmington, NC
NC
0.9087
0.936549020
Winchester, VA-WV
VA
0.9771
0.984349020
Winchester, VA-WV
WV
0.9751
0.982949180
Winston-Salem, NC
NC
0.9096
0.937249340
Worcester, MA
MA
1.0945
1.063849420
Yakima, WA
WA
1.0164
1.011249500
Yauco, PR
PR
0.3358
0.473749620
York-Hanover, PA
PA
0.9666
0.977049660
Youngstown-Warren-Boardman, OH-PA
OH
0.8931
0.925549660
Youngstown-Warren-Boardman, OH-PA
PA
0.8930
0.925449700
Yuba City, CA
CA
1.1822
1.121449740
Yuma, AZ
AZ
0.9903
0.9933
 
 
 Table 4B.—Wage Index and Capital Geographic Adjustment Factor (GAF) for Rural Areas by CBSA and by State—FY 2009
CBSA code
Rural area
State
Wage index
GAF01
Alabama
AL
0.7647
0.832202
Alaska
AK
1.1884
1.125503
Arizona
AZ
0.8857
0.920204
Arkansas
AR
0.7641
0.831705
California
CA
1.1822
1.121406
Colorado
CO
0.9303
0.951707
Connecticut
CT
1.1897
1.126308
Delaware
DE
1.0252
1.017210
Florida
FL
0.8633
0.904211
Georgia
GA
0.7840
0.846512
Hawaii
HI
1.1219
1.082013
Idaho
ID
0.7597
0.828414
Illinois
IL
0.8428
0.889515
Indiana
IN
0.8479
0.893216
Iowa
IA
0.8709
0.909717
Kansas
KS
0.8086
0.864618
Kentucky
KY
0.7837
0.846319
Louisiana
LA
0.7682
0.834820
Maine
ME
0.8609
0.902521
Maryland
MD
0.8795
0.915822
Massachusetts
MA
1.0199
1.013623
Michigan
MI
0.8864
0.920724
Minnesota
MN
0.9120
0.938925
Mississippi
MS
0.7653
0.832626
Missouri
MO
0.8470
0.892527
Montana
MT
0.8640
0.904728
Nebraska
NE
0.8761
0.913429
Nevada
NV
0.9824
0.987930
New Hampshire
NH
1.0807
1.054631
New Jersey 1
NJ
1.1221
1.082132
New Mexico
NM
0.8858
0.920333
New York
NY
0.8308
0.880834
North Carolina
NC
0.8632
0.904235
North Dakota
ND
0.7336
0.808836
Ohio
OH
0.8582
0.900637
Oklahoma
OK
0.8016
0.859538
Oregon
OR
1.0298
1.020339
Pennsylvania
PA
0.8342
0.883340
Puerto Rico 1
PR41
Rhode Island 1
RI42
South Carolina
SC
0.8609
0.902543
South Dakota
SD
0.8428
0.889544
Tennessee
TN
0.7957
0.855145
Texas
TX
0.8153
0.869546
Utah
UT
0.8395
0.887147
Vermont
VT
0.9275
0.949849
Virginia
VA
0.8061
0.862850
Washington
WA
1.0164
1.011251
West Virginia
WV
0.7635
0.831352
Wisconsin
WI
0.9511
0.966253
Wyoming
WY
0.9223
0.94611
                             All counties in the State or Territory are classified as urban. The New Jersey floor is imputed as specified in § 412.64(h)(4) and discussed in the FY 2005 IPPS final rule (69 FR 49109) and in section III.B.2 of the preamble of this proposed rule.
 Table 4C.—Wage Index and Capital Geographic Adjustment Factor (GAF) for Hospitals That Are Reclassified by CBSA and by State—FY 2009
CBSA code
Area
State
Wage index
GAF10420
Akron, OH
OH
0.8784
0.915010500
Albany, GA
AL
0.8397
0.887210500
Albany, GA
GA
0.8397
0.887210580
Albany-Schenectady-Troy, NY
NY
0.8833
0.918510740
Albuquerque, NM
NM
0.9295
0.951210780
Alexandria, LA
LA
0.8127
0.867610900
Allentown-Bethlehem-Easton, PA-NJ
PA
0.9675
0.977611100
Amarillo, TX
KS
0.8885
0.922211100
Amarillo, TX
TX
0.8883
0.9221( print page 23796)11180
Ames, IA
IA
0.8881
0.921911260
Anchorage, AK
AK
1.1884
1.125511460
Ann Arbor, MI
MI
1.0113
1.007712060
Atlanta-Sandy Springs-Marietta, GA
AL
0.9760
0.983512060
Atlanta-Sandy Springs-Marietta, GA
GA
0.9760
0.983512420
Austin-Round Rock, TX
TX
0.9521
0.966912620
Bangor, ME
ME
1.0115
1.007912940
Baton Rouge, LA
MS
0.8146
0.869013020
Bay City, MI
MI
0.9472
0.963513644
Bethesda-Frederick-Gaithersburg, MD
DC
1.1018
1.068613644
Bethesda-Frederick-Gaithersburg, MD
PA
1.1006
1.067813644
Bethesda-Frederick-Gaithersburg, MD
VA
1.1017
1.068613780
Binghamton, NY
PA
0.8560
0.899013820
Birmingham-Hoover, AL
AL
0.8786
0.915213900
Bismarck, ND
ND
0.7336
0.808813980
Blacksburg-Christiansburg-Radford, VA
WV
0.7795
0.843214020
Bloomington, IN
IN
0.8791
0.915514260
Boise City-Nampa, ID
ID
0.9100
0.937514260
Boise City-Nampa, ID
NV
0.9824
0.987914484
Boston-Quincy, MA
MA
1.1338
1.089814484
Boston-Quincy, MA
RI
1.1338
1.089814600
Bradenton-Sarasota-Venice, FL
FL
0.9648
0.975814740
Bremerton-Silverdale, WA
WA
1.0576
1.039114860
Bridgeport-Stamford-Norwalk, CT
NY
1.2694
1.177515380
Buffalo-Niagara Falls, NY
NY
0.9593
0.971915540
Burlington-South Burlington, VT
NY
0.9216
0.945615764
Cambridge-Newton-Framingham, MA
NH
1.0807
1.054616180
Carson City, NV
NV
0.9837
0.988816220
Casper, WY
SD
0.9618
0.973716580
Champaign-Urbana, IL
IL
0.8840
0.919016620
Charleston, WV
WV
0.8398
0.887316700
Charleston-North Charleston-Summerville, SC
SC
0.9231
0.946716740
Charlotte-Gastonia-Concord, NC-SC
NC
0.9570
0.970416740
Charlotte-Gastonia-Concord, NC-SC
SC
0.9557
0.969416820
Charlottesville, VA
VA
0.9449
0.961916860
Chattanooga, TN-GA
AL
0.8740
0.911916860
Chattanooga, TN-GA
GA
0.8740
0.911916860
Chattanooga, TN-GA
TN
0.8717
0.910316974
Chicago-Naperville-Joliet, IL
IL
1.0334
1.022816974
Chicago-Naperville-Joliet, IL
IN
1.0328
1.022316974
Chicago-Naperville-Joliet, IL
WI
1.0315
1.021517140
Cincinnati-Middletown, OH-KY-IN
IN
0.9583
0.971317140
Cincinnati-Middletown, OH-KY-IN
OH
0.9581
0.971117300
Clarksville, TN-KY
KY
0.8302
0.880417460
Cleveland-Elyria-Mentor, OH
OH
0.9266
0.949117660
Coeur d'Alene, ID
MT
0.8992
0.929817820
Colorado Springs, CO
CO
0.9738
0.982017860
Columbia, MO
MO
0.8470
0.892517900
Columbia, SC
SC
0.8984
0.929317980
Columbus, GA-AL
AL
0.8495
0.894317980
Columbus, GA-AL
GA
0.8495
0.894318140
Columbus, OH
OH
0.9657
0.976418700
Corvallis, OR
OR
1.0572
1.038819124
Dallas-Plano-Irving, TX
TX
0.9852
0.989819340
Davenport-Moline-Rock Island, IA-IL
IL
0.8606
0.902319340
Davenport-Moline-Rock Island, IA-IL
IA
0.8709
0.909719380
Dayton, OH
OH
0.9321
0.953019740
Denver-Aurora, CO
CO
1.0409
1.027819804
Detroit-Livonia-Dearborn, MI
MI
1.0052
1.003620100
Dover, DE
DE
1.0304
1.020720260
Duluth, MN-WI
MN
1.0401
1.027320500
Durham, NC
NC
0.9693
0.978920500
Durham, NC
VA
0.9694
0.978920764
Edison-New Brunswick, NJ
NJ
1.1221
1.082121060
Elizabethtown, KY
KY
0.8230
0.875121140
Elkhart-Goshen, IN
IN
0.9547
0.968821500
Erie, PA
NY
0.8420
0.888921660
Eugene-Springfield, OR
OR
1.1157
1.077921780
Evansville, IN-KY
IN
0.8479
0.893221780
Evansville, IN-KY
KY
0.8131
0.8679( print page 23797)22020
Fargo, ND-MN
ND
0.8212
0.873822020
Fargo, ND-MN
SD
0.8428
0.889522180
Fayetteville, NC
NC
0.9567
0.970122220
Fayetteville-Springdale-Rogers, AR-MO
AR
0.8952
0.927022220
Fayetteville-Springdale-Rogers, AR-MO
OK
0.8950
0.926822380
Flagstaff, AZ
AZ
1.1305
1.087622420
Flint, MI
MI
1.0810
1.054822520
Florence-Muscle Shoals, AL
AL
0.7883
0.849722520
Florence-Muscle Shoals, AL
MS
0.7883
0.849722540
Fond du Lac, WI
WI
0.9523
0.967122660
Fort Collins-Loveland, CO
CO
0.9581
0.971122744
Ft Lauderdale-Pompano Beach-Deerfield Beach, FL
FL
1.0025
1.001723020
Fort Walton Beach-Crestview-Destin, FL
FL
0.8633
0.904223060
Fort Wayne, IN
IN
0.9004
0.930723104
Fort Worth-Arlington, TX
TX
0.9684
0.978323540
Gainesville, FL
FL
0.9427
0.960423844
Gary, IN
IN
0.9320
0.952924300
Grand Junction, CO
CO
0.9925
0.994924340
Grand Rapids-Wyoming, MI
MI
0.9305
0.951924500
Great Falls, MT
MT
0.8679
0.907524540
Greeley, CO
NE
0.9611
0.973224540
Greeley, CO
WY
0.9611
0.973224580
Green Bay, WI
MI
0.9412
0.959424580
Green Bay, WI
WI
0.9511
0.966224660
Greensboro-High Point, NC
NC
0.8984
0.929324660
Greensboro-High Point, NC
VA
0.8985
0.929324780
Greenville, NC
NC
0.9174
0.942724860
Greenville-Mauldin-Easley, SC
NC
0.9307
0.952024860
Greenville-Mauldin-Easley, SC
SC
0.9294
0.951125060
Gulfport-Biloxi, MS
MS
0.8156
0.869725420
Harrisburg-Carlisle, PA
PA
0.9185
0.943425540
Hartford-West Hartford-East Hartford, CT
CT
1.1897
1.126325540
Hartford-West Hartford-East Hartford, CT
MA
1.0972
1.065625860
Hickory-Lenoir-Morganton, NC
NC
0.8794
0.915826180
Honolulu, HI
HI
1.1608
1.107526420
Houston-Sugar Land-Baytown, TX
TX
0.9925
0.994926580
Huntington-Ashland, WV-KY-OH
KY
0.8767
0.913826580
Huntington-Ashland, WV-KY-OH
OH
0.8759
0.913326580
Huntington-Ashland, WV-KY-OH
WV
0.8748
0.912526620
Huntsville, AL
AL
0.8636
0.904526620
Huntsville, AL
TN
0.8614
0.902926820
Idaho Falls, ID
ID
0.9327
0.953426820
Idaho Falls, ID
WY
0.9327
0.953426900
Indianapolis-Carmel, IN
IN
0.9707
0.979826980
Iowa City, IA
IA
0.9107
0.938027060
Ithaca, NY
NY
0.9101
0.937527140
Jackson, MS
MS
0.8095
0.865327180
Jackson, TN
MS
0.8361
0.884627180
Jackson, TN
TN
0.8339
0.883027260
Jacksonville, FL
FL
0.9092
0.936927260
Jacksonville, FL
GA
0.9112
0.938327620
Jefferson City, MO
MO
0.8736
0.911627780
Johnstown, PA
PA
0.8342
0.883327860
Jonesboro, AR
AR
0.8291
0.879627860
Jonesboro, AR
MO
0.8470
0.892527900
Joplin, MO
KS
0.9351
0.955127900
Joplin, MO
OK
0.9349
0.954928020
Kalamazoo-Portage, MI
MI
1.0365
1.024928140
Kansas City, MO-KS
MO
0.9444
0.961628420
Kennewick-Pasco-Richland, WA
ID
0.9560
0.969728420
Kennewick-Pasco-Richland, WA
WA
1.0164
1.011228700
Kingsport-Bristol-Bristol, TN-VA
KY
0.7919
0.852328700
Kingsport-Bristol-Bristol, TN-VA
TN
0.7957
0.855128940
Knoxville, TN
KY
0.7889
0.850128940
Knoxville, TN
TN
0.7957
0.855129180
Lafayette, LA
LA
0.8438
0.890229460
Lakeland-Winter Haven, FL
FL
0.8715
0.910129540
Lancaster, PA
PA
0.9799
0.986229620
Lansing-East Lansing, MI
MI
0.9652
0.976029820
Las Vegas-Paradise, NV
AZ
1.1388
1.0931( print page 23798)29820
Las Vegas-Paradise, NV
UT
1.1388
1.093130460
Lexington-Fayette, KY
KY
0.8756
0.913030620
Lima, OH
OH
0.9299
0.951430700
Lincoln, NE
NE
0.9336
0.954030780
Little Rock-North Little Rock-Conway, AR
AR
0.8650
0.905530860
Logan, UT-ID
UT
0.8827
0.918130980
Longview, TX
TX
0.8666
0.906631084
Los Angeles-Long Beach-Glendale, CA
CA
1.1822
1.121431140
Louisville-Jefferson County, KY-IN
KY
0.9123
0.939131340
Lynchburg, VA
VA
0.8646
0.905231420
Macon, GA
GA
0.9618
0.973731540
Madison, WI
WI
1.1014
1.068431700
Manchester-Nashua, NH
NH
1.0807
1.054632780
Medford, OR
OR
1.0298
1.020332820
Memphis, TN-MS-AR
AR
0.8909
0.923932820
Memphis, TN-MS-AR
MS
0.8909
0.923932820
Memphis, TN-MS-AR
TN
0.8886
0.922333124
Miami-Miami Beach-Kendall, FL
FL
0.9865
0.990733340
Milwaukee-Waukesha-West Allis, WI
WI
1.0026
1.001833460
Minneapolis-St. Paul-Bloomington, MN-WI
MN
1.0997
1.067233460
Minneapolis-St. Paul-Bloomington, MN-WI
WI
1.0976
1.065933540
Missoula, MT
MT
0.8909
0.923933700
Modesto, CA
CA
1.1963
1.130633740
Monroe, LA
AR
0.7789
0.842733740
Monroe, LA
LA
0.7785
0.842433860
Montgomery, AL
AL
0.8192
0.872334060
Morgantown, WV
WV
0.8631
0.904134740
Muskegon-Norton Shores, MI
MI
0.9455
0.962334820
Myrtle Beach-North Myrtle Beach-Conway, SC
NC
0.8632
0.904234820
Myrtle Beach-North Myrtle Beach-Conway, SC
SC
0.8609
0.902534980
Nashville-Davidson-Murfreesboro-Franklin, TN
KY
0.9276
0.949834980
Nashville-Davidson-Murfreesboro-Franklin, TN
TN
0.9252
0.948235004
Nassau-Suffolk, NY
CT
1.2038
1.135435084
Newark-Union, NJ-PA
NJ
1.1316
1.088435084
Newark-Union, NJ-PA
NY
1.1461
1.097935084
Newark-Union, NJ-PA
PA
1.1449
1.097135300
New Haven-Milford, CT
CT
1.1897
1.126335380
New Orleans-Metairie-Kenner, LA
LA
0.9140
0.940335644
New York-White Plains-Wayne, NY-NJ
CT
1.2391
1.158135644
New York-White Plains-Wayne, NY-NJ
NJ
1.2693
1.177435644
New York-White Plains-Wayne, NY-NJ
NY
1.2855
1.187735980
Norwich-New London, CT
RI
1.1587
1.106136084
Oakland-Fremont-Hayward, CA
CA
1.5278
1.336736140
Ocean City, NJ
DE
1.0909
1.061436220
Odessa, TX
NM
0.9273
0.949636220
Odessa, TX
TX
0.9283
0.950336420
Oklahoma City, OK
OK
0.8686
0.908036500
Olympia, WA
WA
1.1297
1.087136740
Orlando-Kissimmee, FL
FL
0.9073
0.935637460
Panama City-Lynn Haven, FL
AL
0.8322
0.881837700
Pascagoula, MS
AL
0.8030
0.860537764
Peabody, MA
NH
1.0807
1.054637860
Pensacola-Ferry Pass-Brent, FL
AL
0.8115
0.866737900
Peoria, IL
IL
0.9043
0.933437964
Philadelphia, PA
DE
1.0799
1.054037964
Philadelphia, PA
NJ
1.1221
1.082137964
Philadelphia, PA
PA
1.0788
1.053338220
Pine Bluff, AR
MS
0.8150
0.869338300
Pittsburgh, PA
OH
0.8582
0.900638300
Pittsburgh, PA
PA
0.8579
0.900438300
Pittsburgh, PA
WV
0.8569
0.899638340
Pittsfield, MA
NY
0.9901
0.993238340
Pittsfield, MA
VT
0.9275
0.949838860
Portland-South Portland-Biddeford, ME
ME
0.9644
0.975538900
Portland-Vancouver-Beaverton, OR-WA
OR
1.1204
1.081038900
Portland-Vancouver-Beaverton, OR-WA
WA
1.1186
1.079838940
Port St. Lucie, FL
FL
0.9741
0.982239100
Poughkeepsie-Newburgh-Middletown, NY
NY
1.0709
1.048039140
Prescott, AZ
AZ
1.0011
1.000839340
Provo-Orem, UT
UT
0.9052
0.9341( print page 23799)39580
Raleigh-Cary, NC
NC
0.9557
0.969439740
Reading, PA
PA
0.9204
0.944839820
Redding, CA
CA
1.2730
1.179739900
Reno-Sparks, NV
NV
1.0476
1.032440060
Richmond, VA
VA
0.9203
0.944740140
Riverside-San Bernardino-Ontario, CA
AZ
1.1254
1.084340220
Roanoke, VA
VA
0.8750
0.912640220
Roanoke, VA
WV
0.8732
0.911340380
Rochester, NY
NY
0.8911
0.924140420
Rockford, IL
IL
0.9756
0.983240484
Rockingham County-Strafford County, NH
ME
1.0007
1.000540660
Rome, GA
AL
0.9524
0.967240900
Sacramento—Arden-Arcade—Roseville, CA
CA
1.2710
1.178540980
Saginaw-Saginaw Township North, MI
MI
0.8864
0.920741060
St. Cloud, MN
MN
1.0638
1.043341100
St. George, UT
UT
0.9228
0.946541140
St. Joseph, MO-KS
MO
1.0267
1.018241180
St. Louis, MO-IL
IL
0.8993
0.929941180
St. Louis, MO-IL
MO
0.8986
0.929441620
Salt Lake City, UT
UT
0.9271
0.949541700
San Antonio, TX
TX
0.8949
0.926841884
San Francisco-San Mateo-Redwood City, CA
CA
1.4879
1.312741940
San Jose-Sunnyvale-Santa Clara, CA
CA
1.5758
1.365442044
Santa Ana-Anaheim-Irvine, CA
CA
1.1822
1.121442100
Santa Cruz-Watsonville, CA
CA
1.5766
1.365842140
Santa Fe, NM
NM
1.0207
1.014142220
Santa Rosa-Petaluma, CA
CA
1.4497
1.289642340
Savannah, GA
GA
0.8841
0.919142340
Savannah, GA
SC
0.8827
0.918142644
Seattle-Bellevue-Everett, WA
WA
1.1377
1.092443300
Sherman-Denison, TX
OK
0.9291
0.950943340
Shreveport-Bossier City, LA
LA
0.8547
0.898143580
Sioux City, IA-NE-SD
NE
0.8761
0.913443620
Sioux Falls, SD
SD
0.9262
0.948943780
South Bend-Mishawaka, IN-MI
IN
0.9353
0.955243900
Spartanburg, SC
SC
0.9017
0.931644060
Spokane, WA
ID
1.0315
1.021544180
Springfield, MO
AR
0.8477
0.893044180
Springfield, MO
MO
0.8470
0.892544940
Sumter, SC
SC
0.8609
0.902545060
Syracuse, NY
NY
0.9471
0.963545220
Tallahassee, FL
GA
0.8397
0.887245300
Tampa-St. Petersburg-Clearwater, FL
FL
0.8993
0.929945500
Texarkana, TX-Texarkana, AR
AR
0.8093
0.865145780
Toledo, OH
OH
0.9267
0.949245820
Topeka, KS
KS
0.8720
0.910546140
Tulsa, OK
OK
0.8652
0.905646220
Tuscaloosa, AL
MS
0.8280
0.878846340
Tyler, TX
TX
0.8901
0.923446700
Vallejo-Fairfield, CA
CA
1.3974
1.257547260
Virginia Beach-Norfolk-Newport News, VA
NC
0.8868
0.921047644
Warren-Troy-Farmington-Hills, MI
MI
0.9972
0.998147894
Washington-Arlington-Alexandria, DC-VA
VA
1.0669
1.045347940
Waterloo-Cedar Falls, IA
IA
0.9248
0.947948140
Wausau, WI
WI
0.9823
0.987848620
Wichita, KS
KS
0.8785
0.915148620
Wichita, KS
OK
0.8784
0.915048700
Williamsport, PA
PA
0.8342
0.883348864
Wilmington, DE-MD-NJ
DE
1.0645
1.043748864
Wilmington, DE-MD-NJ
NJ
1.1221
1.082148900
Wilmington, NC
SC
0.9074
0.935649180
Winston-Salem, NC
NC
0.9096
0.937249340
Worcester, MA
NH
1.0807
1.054649660
Youngstown-Warren-Boardman, OH-PA
OH
0.8582
0.900649660
Youngstown-Warren-Boardman, OH-PA
PA
0.8559
0.898904
Arkansas
LA
0.7682
0.834805
California
CA
1.1822
1.121410
Florida
FL
0.8633
0.904214
Illinois
IL
0.8428
0.889514
Illinois
KY
0.8320
0.8817( print page 23800)14
Illinois
MO
0.8470
0.892516
Iowa
MO
0.8738
0.911817
Kansas
KS
0.8086
0.864622
Massachusetts
MA
1.0199
1.013623
Michigan
MI
0.8864
0.920725
Mississippi
MS
0.7653
0.832626
Missouri
MO
0.8470
0.892530
New Hampshire
VT
0.9297
0.951333
New York
NY
0.8308
0.880834
North Carolina
TN
0.8611
0.902736
Ohio
OH
0.8582
0.900637
Oklahoma
OK
0.8016
0.859538
Oregon
OR
1.0298
1.020339
Pennsylvania
NY
0.8351
0.883939
Pennsylvania
PA
0.8342
0.883344
Tennessee
KY
0.7978
0.856744
Tennessee
TN
0.7957
0.855145
Texas
TX
0.8153
0.869549
Virginia
KY
0.8062
0.862849
Virginia
VA
0.8061
0.862850
Washington
WA
1.0164
1.011253
Wyoming
NE
0.9223
0.9461
 Table 4D-1.—Rural Floor Budget Neutrality Factors—FY 2009
State
Rural floor budget
                                 neutrality 
                                 ajustment 
                                 factorAlabama
1.00000Alaska
0.99734Arizona
1.00000Arkansas
1.00000California
0.98552Colorado
0.99683Connecticut
0.96390Delaware
1.00000Washington, DC
1.00000Florida
0.99781Georgia
1.00000Hawaii
1.00000Idaho
1.00000Illinois
0.99993Indiana
0.99928Iowa
0.99572Kansas
1.00000Kentucky
1.00000Louisiana
0.99945Maine
1.00000MarylandMassachusetts
1.00000Michigan
1.00000Minnesota
1.00000Mississippi
1.00000Missouri
0.99910Montana
1.00000Nebraska
1.00000Nevada
1.00000New Hampshire
0.97787New Jersey
0.98738New Mexico
0.99875New York
1.00000North Carolina
0.99983North Dakota
0.99424Ohio
0.99906Oklahoma
0.99983Oregon
0.99955Pennsylvania
0.99895Puerto Rico
1.00000Rhode Island
1.00000South Carolina
0.99840South Dakota
1.00000Tennessee
0.99741Texas
0.99980Utah
1.00000Vermont
0.90100Virginia
0.99991Washington
0.99791West Virginia
0.99782Wisconsin
0.99809Wyoming
1.00000* Maryland hospitals, under section 1814(b)(3) of the Act, are waived from the IPPS ratesetting. Therefore, the rural floor budget neutrality adjustment does not apply.** The rural floor budget neutrality factor for New Jersey is based on an imputed floor (see Table 4B).
 Table 4D-2.—Urban Areas With Hospitals Receiving the Statewide Rural Floor or Imputed Floor Wage Index—FY 2009
[*Only hospitals that are geographically located in the specified State receive the State's rural or imputed floor wage index.]
CBSA code
Urban area
State *
Rural or imputed floor wage index10900
Allentown-Bethlehem-Easton, PA-NJ
NJ
1.122111020
Altoona, PA
PA
0.834211260
Anchorage, AK
AK
1.188411540
Appleton, WI
WI
0.951112220
Auburn-Opelika, AL
AL
0.764712540
Bakersfield, CA
CA
1.182213900
Bismarck, ND
ND
0.733615500
Burlington, NC
NC
0.8632( print page 23801)15540
Burlington-South Burlington, VT
VT
0.927515804
Camden, NJ
NJ
1.122116940
Cheyenne, WY
WY
0.922317020
Chico, CA
CA
1.182217860
Columbia, MO
MO
0.847019060
Cumberland, MD-WV
MD
0.879519060
Cumberland, MD-WV
WV
0.763519340
Davenport-Moline-Rock Island, IA-IL
IA
0.870919500
Decatur, IL
IL
0.842820220
Dubuque, IA
IA
0.870920764
Edison-New Brunswick, NJ
NJ
1.122120940
El Centro, CA
CA
1.182221820
Fairbanks, AK
AK
1.188422020
Fargo, ND-MN
MN
0.912022140
Farmington, NM
NM
0.885822500
Florence, SC
SC
0.860922900
Fort Smith, AR-OK
OK
0.801623420
Fresno, CA
CA
1.182224220
Grand Forks, ND-MN
MN
0.912024580
Green Bay, WI
WI
0.951125260
Hanford-Corcoran, CA
CA
1.182225540
Hartford-West Hartford-East Hartford, CT
CT
1.189725620
Hattiesburg, MS
MS
0.765327340
Jacksonville, NC
NC
0.863227780
Johnstown, PA
PA
0.834228420
Kennewick-Pasco-Richland, WA
WA
1.016428700
Kingsport-Bristol-Bristol, TN-VA
TN
0.795728700
Kingsport-Bristol-Bristol, TN-VA
VA
0.806128940
Knoxville, TN
TN
0.795729340
Lake Charles, LA
LA
0.768229740
Las Cruces, NM
NM
0.885830300
Lewiston, ID-WA
WA
1.016431460
Madera, CA
CA
1.182231700
Manchester-Nashua, NH
NH
1.080732780
Medford, OR
OR
1.029834100
Morristown, TN
TN
0.795734580
Mount Vernon-Anacortes, WA
WA
1.016434620
Muncie, IN
IN
0.847935300
New Haven-Milford, CT
CT
1.189735980
Norwich-New London, CT
CT
1.189736100
Ocala, FL
FL
0.863336780
Oshkosh-Neenah, WI
WI
0.951137100
Oxnard-Thousand Oaks-Ventura, CA
CA
1.182237460
Panama City-Lynn Haven, FL
FL
0.863337620
Parkersburg-Marietta-Vienna, WV-OH
OH
0.858237860
Pensacola-Ferry Pass-Brent, FL
FL
0.863339380
Pueblo, CO
CO
0.930339540
Racine, WI
WI
0.951140140
Riverside-San Bernardino-Ontario, CA
CA
1.182240484
Rockingham County-Strafford County, NH
NH
1.080741740
San Diego-Carlsbad-San Marcos, CA
CA
1.182242020
San Luis Obispo-Paso Robles, CA
CA
1.182242044
Santa Ana-Anaheim-Irvine, CA
CA
1.182242060
Santa Barbara-Santa Maria-Goleta, CA
CA
1.182242540
Scranton-Wilkes-Barre, PA
PA
0.834243100
Sheboygan, WI
WI
0.951144180
Springfield, MO
MO
0.847044700
Stockton, CA
CA
1.182244940
Sumter, SC
SC
0.860945940
Trenton-Ewing, NJ
NJ
1.122147020
Victoria, TX
TX
0.815347220
Vineland-Millville-Bridgeton, NJ
NJ
1.122147300
Visalia-Porterville, CA
CA
1.182248260
Weirton-Steubenville, WV-OH
OH
0.858248300
Wenatchee, WA
WA
1.016448540
Wheeling, WV-OH
OH
0.858248540
Wheeling, WV-OH
WV
0.763548700
Williamsport, PA
PA
0.834248864
Wilmington, DE-MD-NJ
NJ
1.1221( print page 23802)49420
Yakima, WA
WA
1.016449700
Yuba City, CA
CA
1.1822
 Table 4E.—Urban CBSAs and Constituent Counties—FY 2009
CBSA code
Urban area
                                 (constituent counties)10180
Abilene, TXCallahan County, TXJones County, TXTaylor County, TX10380
Aguadilla-Isabela-San Sebastián, PRAguada Municipio, PRAguadilla Municipio, PRAñasco Municipio, PRIsabela Municipio, PRLares Municipio, PRMoca Municipio, PRRincón Municipio, PRSan Sebastián Municipio, PR10420
Akron, OHPortage County, OHSummit County, OH10500
Albany, GABaker County, GADougherty County, GALee County, GATerrell County, GAWorth County, GA10580
Albany-Schenectady-Troy, NYAlbany County, NYRensselaer County, NYSaratoga County, NYSchenectady County, NYSchoharie County, NY10740
Albuquerque, NMBernalillo County, NMSandoval County, NMTorrance County, NMValencia County, NM10780
Alexandria, LAGrant Parish, LARapides Parish, LA10900
Allentown-Bethlehem-Easton, PA-NJWarren County, NJCarbon County, PALehigh County, PANorthampton County, PA11020
Altoona, PABlair County, PA11100
Amarillo, TXArmstrong County, TXCarson County, TXPotter County, TXRandall County, TX11180
Ames, IAStory County, IA11260
Anchorage, AKAnchorage Municipality, AKMatanuska-SusitnaBorough, AK11300
Anderson, INMadison County, IN11340
Anderson, SCAnderson County, SC11460
Ann Arbor, MIWashtenaw County, MI11500
Anniston-Oxford, ALCalhoun County, AL11540
Appleton, WICalumet County, WIOutagamie County, WI11700
Asheville, NCBuncombe County, NCHaywood County, NCHenderson County, NCMadison County, NC12020
Athens-Clarke County, GAClarke County, GAMadison County, GAOconee County, GAOglethorpe County, GA12060
1
                                 Atlanta-Sandy Springs-Marietta, GABarrow 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, GAPickens County, GAPike County, GARockdale County, GASpalding County, GAWalton County, GA12100
Atlantic City-Hammonton, NJAtlantic County, NJHammonton County, NJ12220
Auburn-Opelika, ALLee County, AL12260
Augusta-Richmond County, GA-SCBurke County, GAColumbia County, GAMcDuffie County, GARichmond County, GAAiken County, SCEdgefield County, SC12420
1
                                 Austin-Round Rock, TXBastrop County, TXCaldwell County, TXHays County, TXTravis County, TXWilliamson County, TX12540
Bakersfield, CAKern County, CA12580
1
                                 Baltimore-Towson, MDAnne Arundel County, MDBaltimore County, MDCarroll County, MDHarford County, MDHoward County, MDQueen Anne's County, MDBaltimore City, MD12620
Bangor, MEPenobscot County, ME12700
Barnstable Town, MABarnstable County, MA12940
Baton Rouge, LAAscension 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, MICalhoun County, MI13020
Bay City, MIBay County, MI13140
Beaumont-Port Arthur, TXHardin County, TXJefferson County, TXOrange County, TX13380
Bellingham, WAWhatcom County, WA13460
Bend, ORDeschutes County, OR13644
1
                                 Bethesda-Frederick-Gaithersburg, MDFrederick County, MDMontgomery County, MD13740
Billings, MTCarbon County, MTYellowstone County, MT13780
Binghamton, NYBroome County, NYTioga County, NY13820
1
                                 Birmingham-Hoover, ALBibb County, ALBlount County, AL( print page 23803)Chilton County, ALJefferson County, ALSt. Clair County, ALShelby County, ALWalker County, AL13900
Bismarck, NDBurleigh County, NDMorton County, ND13980
Blacksburg-Christiansburg-Radford, VAGiles County, VAMontgomery County, VAPulaski County, VARadford City, VA14020
Bloomington, INGreene County, INMonroe County, INOwen County, IN14060
Bloomington-Normal, ILMcLean County, IL14260
Boise City-Nampa, IDAda County, IDBoise County, IDCanyon County, IDGem County, IDOwyhee County, ID14484
1
                                 Boston-Quincy, MANorfolk County, MAPlymouth County, MASuffolk County, MA14500
Boulder, COBoulder County, CO14540
Bowling Green, KYEdmonson County, KYWarren County, KY14600
Bradenton-Sarasota-Venice, FLBradenton County, FLManatee County, FLSarasota County, FL14740
Bremerton-Silverdale, WAKitsap County, WA14860
Bridgeport-Stamford-Norwalk, CTFairfield County, CT15180
Brownsville-Harlingen, TXCameron County, TX15260
Brunswick, GABrantley County, GAGlynn County, GAMcIntosh County, GA15380
1
                                 Buffalo-Niagara Falls, NYErie County, NYNiagara County, NY15500
Burlington, NCAlamance County, NC15540
Burlington-South Burlington, VTChittenden County, VTFranklin County, VTGrand Isle County, VT15764
1
                                 Cambridge-Newton-Framingham, MAMiddlesex County, MA15804
1
                                 Camden, NJBurlington County, NJCamden County, NJGloucester County, NJ15940
Canton-Massillon, OHCarroll County, OHStark County, OH15980
Cape Coral-Fort Myers, FLLee County, FL16180
Carson City, NVCarson City, NV16220
Casper, WYNatrona County, WY16300
Cedar Rapids, IABenton County, IAJones County, IALinn County, IA16580
Champaign-Urbana, ILChampaign County, ILFord County, ILPiatt County, IL16620
Charleston, WVBoone County, WVClay County, WVKanawha County, WVLincoln County, WVPutnam County, WV16700
Charleston-North Charleston-Summerville, SCBerkeley County, SCCharleston County, SCDorchester County, SCSummerville County, SC16740
1
                                 Charlotte-Gastonia-Concord, NC-SCAnson County, NCCabarrus County, NCGaston County, NCMecklenburg County, NCUnion County, NCYork County, SC16820
Charlottesville, VAAlbemarle County, VAFluvanna County, VAGreene County, VANelson County, VACharlottesville City, VA16860
Chattanooga, TN-GACatoosa County, GADade County, GAWalker County, GAHamilton County, TNMarion County, TNSequatchie County, TN16940
Cheyenne, WYLaramie County, WY16974
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                                 Chicago-Naperville-Joliet, ILCook County, ILDeKalb County, ILDuPage County, ILGrundy County, ILKane County, ILKendall County, ILMcHenry County, ILWill County, IL17020
Chico, CAButte County, CA17140
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                                 Cincinnati-Middletown, OH-KY-INDearborn 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-KYChristian County, KYTrigg County, KYMontgomery County, TNStewart County, TN17420
Cleveland, TNBradley County, TNPolk County, TN17460
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                                 Cleveland-Elyria-Mentor, OHCuyahoga County, OHGeauga County, OHLake County, OHLorain County, OHMedina County, OH17660
Coeur d'Alene, IDKootenai County, ID17780
College Station-Bryan, TXBrazos County, TXBurleson County, TXRobertson County, TX17820
Colorado Springs, COEl Paso County, COTeller County, CO17860
Columbia, MOBoone County, MOHoward County, MO17900
Columbia, SCCalhoun County, SCFairfield County, SCKershaw County, SCLexington County, SCRichland County, SCSaluda County, SC17980
Columbus, GA-ALRussell County, ALChattahoochee County, GAHarris County, GAMarion County, GAMuscogee County, GA18020
Columbus, INBartholomew County, IN18140
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                                 Columbus, OHDelaware County, OHFairfield County, OHFranklin County, OHLicking County, OHMadison County, OHMorrow County, OHPickaway County, OHUnion County, OH18580
Corpus Christi, TXAransas County, TXNueces County, TXSan Patricio County, TX18700
Corvallis, ORBenton County, OR19060
Cumberland, MD-WVAllegany County, MDMineral County, WV19124
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                                 Dallas-Plano-Irving, TXCollin County, TX( print page 23804)Dallas County, TXDelta County, TXDenton County, TXEllis County, TXHunt County, TXKaufman County, TXRockwall County, TX19140
Dalton, GAMurray County, GAWhitfield County, GA19180
Danville, ILVermilion County, IL19260
Danville, VAPittsylvania County, VADanville City, VA19340
Davenport-Moline-Rock Island, IA-ILHenry County, ILMercer County, ILRock Island County, ILScott County, IA19380
Dayton, OHGreene County, OHMiami County, OHMontgomery County, OHPreble County, OH19460
Decatur, ALLawrence County, ALMorgan County, AL19500
Decatur, ILMacon County, IL19660
Deltona-Daytona Beach-Ormond Beach, FLVolusia County, FL19740
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                                 Denver-Aurora, COAdams 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, IADallas County, IAGuthrie County, IAMadison County, IAPolk County, IAWarren County, IA19804
1
                                 Detroit-Livonia-Dearborn, MIWayne County, MI20020
Dothan, ALGeneva County, ALHenry County, ALHouston County, AL20100
Dover, DEKent County, DE20220
Dubuque, IADubuque County, IA20260
Duluth, MN-WICarlton County, MNSt. Louis County, MNDouglas County, WI20500
Durham, NCChatham County, NCDurham County, NCOrange County, NCPerson County, NC20740
Eau Claire, WIChippewa County, WIEau Claire County, WI20764
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                                 Edison-New Brunswick, NJMiddlesex County, NJMonmouth County, NJNew Brunswick County, NJOcean County, NJSomerset County, NJ20940
El Centro, CAImperial County, CA21060
Elizabethtown, KYHardin County, KYLarue County, KY21140
Elkhart-Goshen, INElkhart County, IN21300
Elmira, NYChemung County, NY21340
El Paso, TXEl Paso County, TX21500
Erie, PAErie County, PA21660
Eugene-Springfield, ORLane County, OR21780
Evansville, IN-KYGibson County, INPosey County, INVanderburgh County, INWarrick County, INHenderson County, KYWebster County, KY21820
Fairbanks, AKFairbanks North Star Borough, AK21940
Fajardo, PRCeiba Municipio, PRFajardo Municipio, PRLuquillo Municipio, PR22020
Fargo, ND-MNClay County, MNCass County, ND22140
Farmington, NMSan Juan County, NM22180
Fayetteville, NCCumberland County, NCHoke County, NC22220
Fayetteville-Springdale-Rogers, AR-MOBenton County, ARMadison County, ARWashington County, ARMcDonald County, MO22380
Flagstaff, AZCoconino County, AZ22420
Flint, MIGenesee County, MI22500
Florence, SCDarlington County, SCFlorence County, SC22520
Florence-Muscle Shoals, ALColbert County, ALLauderdale County, AL22540
Fond du Lac, WIFond du Lac County, WI22660
Fort Collins-Loveland, COLarimer County, CO22744
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                                 Fort Lauderdale-Pompano Beach-Deerfield Beach, FLBroward County, FL22900
Fort Smith, AR-OKCrawford County, ARFranklin County, ARSebastian County, ARLe Flore County, OKSequoyah County, OK23020
Fort Walton Beach-Crestview-Destin, FLOkaloosa County, FL23060
Fort Wayne, INAllen County, INWells County, INWhitley County, IN23104
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                                 Fort Worth-Arlington, TXJohnson County, TXParker County, TXTarrant County, TXWise County, TX23420
Fresno, CAFresno County, CA23460
Gadsden, ALEtowah County, AL23540
Gainesville, FLAlachua County, FLGilchrist County, FL23580
Gainesville, GAHall County, GA23844
Gary, INJasper County, INLake County, INNewton County, INPorter County, IN24020
Glens Falls, NYWarren County, NYWashington County, NY24140
Goldsboro, NCWayne County, NC24220
Grand Forks, ND-MNPolk County, MNGrand Forks County, ND24300
Grand Junction, COMesa County, CO24340
Grand Rapids-Wyoming, MIBarry County, MIIonia County, MIKent County, MINewaygo County, MI24500
Great Falls, MTCascade County, MT24540
Greeley, COWeld County, CO24580
Green Bay, WIBrown County, WIKewaunee County, WIOconto County, WI24660
Greensboro-High Point, NCGuilford County, NCRandolph County, NCRockingham County, NC24780
Greenville, NCGreene County, NCPitt County, NC24860
Greenville-Mauldin-Easley, SCGreenville County, SCLaurens County, SCPickens County, SC( print page 23805)25020
Guayama, PRArroyo Municipio, PRGuayama Municipio, PRPatillas Municipio, PR25060
Gulfport-Biloxi, MSHancock County, MSHarrison County, MSStone County, MS25180
Hagerstown-Martinsburg, MD-WVWashington County, MDBerkeley County, WVMorgan County, WV25260
Hanford-Corcoran, CAKings County, CA25420
Harrisburg-Carlisle, PACumberland County, PADauphin County, PAPerry County, PA25500
Harrisonburg, VARockingham County, VAHarrisonburg City, VA25540
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                                 Hartford-West Hartford-East Hartford, CTHartford County, CTMiddlesex County, CTTolland County, CT25620
Hattiesburg, MSForrest County, MSLamar County, MSPerry County, MS25860
Hickory-Lenoir-Morganton, NCAlexander County, NCBurke County, NCCaldwell County, NCCatawba County, NC25980
Hinesville-Fort Stewart, GALiberty County, GALong County, GA26100
Holland-Grand Haven, MIOttawa County, MI26180
Honolulu, HIHonolulu County, HI26300
Hot Springs, ARGarland County, AR26380
Houma-Bayou Cane-Thibodaux, LALafourche Parish, LATerrebonne Parish, LA26420
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                                 Houston-Sugar Land-Baytown, TXAustin 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-OHBoyd County, KYGreenup County, KYLawrence County, OHCabell County, WVWayne County, WV26620
Huntsville, ALLimestone County, ALMadison County, AL26820
Idaho Falls, IDBonneville County, IDJefferson County, ID26900
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                                 Indianapolis-Carmel, INBoone County, INBrown County, INHamilton County, INHancock County, INHendricks County, INJohnson County, INMarion County, INMorgan County, INPutnam County, INShelby County, IN26980
Iowa City, IAJohnson County, IAWashington County, IA27060
Ithaca, NYTompkins County, NY27100
Jackson, MIJackson County, MI27140
Jackson, MSCopiah County, MSHinds County, MSMadison County, MSRankin County, MSSimpson County, MS27180
Jackson, TNChester County, TNMadison County, TN27260
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                                 Jacksonville, FLBaker County, FLClay County, FLDuval County, FLNassau County, FLSt. Johns County, FL27340
Jacksonville, NCOnslow County, NC27500
Janesville, WIRock County, WI27620
Jefferson City, MOCallaway County, MOCole County, MOMoniteau County, MOOsage County, MO27740
Johnson City, TNCarter County, TNUnicoi County, TNWashington County, TN27780
Johnstown, PACambria County, PA27860
Jonesboro, ARCraighead County, ARPoinsett County, AR27900
Joplin, MOJasper County, MONewton County, MO28020
Kalamazoo-Portage, MIKalamazoo County, MIVan Buren County, MI28100
Kankakee-Bradley, ILKankakee County, IL28140
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                                 Kansas City, MO-KSFranklin 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-Pasco-Richland, WABenton County, WAFranklin County, WA28660
Killeen-Temple-Fort Hood, TXBell County, TXCoryell County, TXLampasas County, TX28700
Kingsport-Bristol-Bristol, TN-VAHawkins County, TNSullivan County, TNBristol City, VAScott County, VAWashington County, VA28740
Kingston, NYUlster County, NY28940
Knoxville, TNAnderson County, TNBlount County, TNKnox County, TNLoudon County, TNUnion County, TN29020
Kokomo, INHoward County, INTipton County, IN29100
La Crosse, WI-MNHouston County, MNLa Crosse County, WI29140
Lafayette, INBenton County, INCarroll County, INTippecanoe County, IN29180
Lafayette, LALafayette Parish, LASt. Martin Parish, LA29340
Lake Charles, LACalcasieu Parish, LACameron Parish, LA29404
Lake County-Kenosha County, IL-WILake County, ILKenosha County, WI29420
Lake Havasu City-Kingman, AZMohave County, AZ29460
Lakeland-Winter Haven, FLPolk County, FLWinter Haven County, FL29540
Lancaster, PALancaster County, PA29620
Lansing-East Lansing, MIClinton County, MIEaton County, MIIngham County, MI29700
Laredo, TXWebb County, TX29740
Las Cruces, NMDona Ana County, NM29820
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                                 Las Vegas-Paradise, NVClark County, NV29940
Lawrence, KS( print page 23806)Douglas County, KS30020
Lawton, OKComanche County, OK30140
Lebanon, PALebanon County, PA30300
Lewiston, ID-WANez Perce County, IDAsotin County, WA30340
Lewiston-Auburn, MEAndroscoggin County, ME30460
Lexington-Fayette, KYBourbon County, KYClark County, KYFayette County, KYJessamine County, KYScott County, KYWoodford County, KY30620
Lima, OHAllen County, OH30700
Lincoln, NELancaster County, NESeward County, NE30780
Little Rock-North Little Rock-Conway, ARFaulkner County, ARGrant County, ARLonoke County, ARPerry County, ARPulaski County, ARSaline County, AR30860
Logan, UT-IDFranklin County, IDCache County, UT30980
Longview, TXGregg County, TXRusk County, TXUpshur County, TX31020
Longview, WACowlitz County, WA31084
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                                 Los Angeles-Long Beach-Glendale, CALos Angeles County, CA31140
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                                 Louisville-Jefferson County, KY-INClark County, INFloyd County, INHarrison County, INWashington County, INBullitt County, KYHenry County, KYJefferson County, KYMeade County, KYNelson County, KYOldham County, KYShelby County, KYSpencer County, KYTrimble County, KY31180
Lubbock, TXCrosby County, TXLubbock County, TX31340
Lynchburg, VAAmherst County, VAAppomattox County, VABedford County, VACampbell County, VABedford City, VALynchburg City, VA31420
Macon, GABibb County, GACrawford County, GAJones County, GAMonroe County, GATwiggs County, GA31460
Madera, CAMadera County, CA31540
Madison, WIColumbia County, WIDane County, WIIowa County, WI31700
Manchester-Nashua, NHHillsborough County, NH31900
Mansfield, OHRichland County, OH32420
Mayagüez, PRHormigueros Municipio, PRMayagüez Municipio, PR32580
McAllen-Edinburg-Mission, TXHidalgo County, TX32780
Medford, ORJackson County, OR32820
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                                 Memphis, TN-MS-ARCrittenden County, ARDeSoto County, MSMarshall County, MSTate County, MSTunica County, MSFayette County, TNShelby County, TNTipton County, TN32900
Merced, CAMerced County, CA33124
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                                 Miami-Miami Beach-Kendall, FLMiami-Dade County, FL33140
Michigan City-La Porte, INLaPorte County, IN33260
Midland, TXMidland County, TX33340
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                                 Milwaukee-Waukesha-West Allis, WIMilwaukee County, WIOzaukee County, WIWashington County, WIWaukesha County, WI33460
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                                 Minneapolis-St. Paul-Bloomington, MN-WIAnoka County, MNCarver County, MNChisago County, MNDakota County, MNHennepin County, MNIsanti County, MNRamsey County, MNScott County, MNSherburne County, MNWashington County, MNWright County, MNPierce County, WISt. Croix County, WI33540
Missoula, MTMissoula County, MT33660
Mobile, ALMobile County, AL33700
Modesto, CAStanislaus County, CA33740
Monroe, LAOuachita Parish, LAUnion Parish, LA33780
Monroe, MIMonroe County, MI33860
Montgomery, ALAutauga County, ALElmore County, ALLowndes County, ALMontgomery County, AL34060
Morgantown, WVMonongalia County, WVPreston County, WV34100
Morristown, TNGrainger County, TNHamblen County, TNJefferson County, TN34580
Mount Vernon-Anacortes, WASkagit County, WA34620
Muncie, INDelaware County, IN34740
Muskegon-Norton Shores, MIMuskegon County, MI34820
Myrtle Beach-North Myrtle Beach-Conway, SCHorry County, SC34900
Napa, CANapa County, CA34940
Naples-Marco Island, FLCollier County, FL34980
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                                 Nashville-Davidson-Murfreesboro-Franklin, TNCannon 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
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                                 Nassau-Suffolk, NYNassau County, NYSuffolk County, NY35084
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                                 Newark-Union, NJ-PAEssex County, NJHunterdon County, NJMorris County, NJSussex County, NJUnion County, NJPike County, PA35300
New Haven-Milford, CTNew Haven County, CT35380
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                                 New Orleans-Metairie-Kenner, LAJefferson Parish, LAOrleans Parish, LAPlaquemines Parish, LASt. Bernard Parish, LASt. Charles Parish, LASt. John the Baptist Parish, LASt. Tammany Parish, LA35644
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                                 New York-White Plains-Wayne, NY-NJBergen County, NJHudson County, NJPassaic County, NJBronx County, NYKings County, NY( print page 23807)New York County, NYPutnam County, NYQueens County, NYRichmond County, NYRockland County, NYWestchester County, NY35660
Niles-Benton Harbor, MIBerrien County, MI35980
Norwich-New London, CTNew London County, CT36084
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                                 Oakland-Fremont-Hayward, CAAlameda County, CAContra Costa County, CA36100
Ocala, FLMarion County, FL36140
Ocean City, NJCape May County, NJ36220
Odessa, TXEctor County, TX36260
Ogden-Clearfield, UTDavis County, UTMorgan County, UTWeber County, UT36420
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                                 Oklahoma City, OKCanadian County, OKCleveland County, OKGrady County, OKLincoln County, OKLogan County, OKMcClain County, OKOklahoma County, OK36500
Olympia, WAThurston County, WA36540
Omaha-Council Bluffs, NE-IAHarrison County, IAMills County, IAPottawattamie County, IACass County, NEDouglas County, NESarpy County, NESaunders County, NEWashington County, NE36740
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                                 Orlando-Kissimmee, FLLake County, FLOrange County, FLOsceola County, FLSeminole County, FL36780
Oshkosh-Neenah, WIWinnebago County, WI36980
Owensboro, KYDaviess County, KYHancock County, KYMcLean County, KY37100
Oxnard-Thousand Oaks-Ventura, CAVentura County, CA37340
Palm Bay-Melbourne-Titusville, FLBrevard County, FL37380
Palm Coast, FLFlager County, FL37460
Panama City-Lynn Haven, FLBay County, FL37620
Parkersburg-Marietta-Vienna, WV-OHWashington County, OHPleasants County, WVWirt County, WVWood County, WV37700
Pascagoula, MSGeorge County, MSJackson County, MS37764
Peabody, MAEssex County, MA37860
Pensacola-Ferry Pass-Brent, FLEscambia County, FLSanta Rosa County, FL37900
Peoria, ILMarshall County, ILPeoria County, ILStark County, ILTazewell County, ILWoodford County, IL37964
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                                 Philadelphia, PABucks County, PAChester County, PADelaware County, PAMontgomery County, PAPhiladelphia County, PA38060
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                                 Phoenix-Mesa-Scottsdale, AZMaricopa County, AZPinal County, AZ38220
Pine Bluff, ARCleveland County, ARJefferson County, ARLincoln County, AR38300
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                                 Pittsburgh, PAAllegheny County, PAArmstrong County, PABeaver County, PAButler County, PAFayette County, PAWashington County, PAWestmoreland County, PA38340
Pittsfield, MABerkshire County, MA38540
Pocatello, IDBannock County, IDPower County, ID38660
Ponce, PRJuana Díaz Municipio, PRPonce Municipio, PRVillalba Municipio, PR38860
Portland-South Portland-Biddeford, MECumberland County, MESagadahoc County, MEYork County, ME38900
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                                 Portland-Vancouver-Beaverton, OR-WAClackamas County, ORColumbia County, ORMultnomah County, ORWashington County, ORYamhill County, ORClark County, WASkamania County, WA38940
Port St. Lucie, FLMartin County, FLSt. Lucie County, FL39100
Poughkeepsie-Newburgh-Middletown, NYDutchess County, NYOrange County, NY39140
Prescott, AZYavapai County, AZ39300
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                                 Providence-New Bedford-Fall River, RI-MABristol County, MABristol County, RIKent County, RINewport County, RIProvidence County, RIWashington County, RI39340
Provo-Orem, UTJuab County, UTUtah County, UT39380
Pueblo, COPueblo County, CO39460
Punta Gorda, FLCharlotte County, FL39540
Racine, WIRacine County, WI39580
Raleigh-Cary, NCFranklin County, NCJohnston County, NCWake County, NC39660
Rapid City, SDMeade County, SDPennington County, SD39740
Reading, PABerks County, PA39820
Redding, CAShasta County, CA39900
Reno-Sparks, NVStorey County, NVWashoe County, NV40060
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                                 Richmond, VAAmelia 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
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                                 Riverside-San Bernardino-Ontario, CARiverside County, CASan Bernardino County, CA40220
Roanoke, VABotetourt County, VACraig County, VAFranklin County, VARoanoke County, VARoanoke City, VASalem City, VA40340
Rochester, MNDodge County, MNOlmsted County, MNWabasha County, MN40380
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                                 Rochester, NYLivingston County, NYMonroe County, NYOntario County, NY( print page 23808)Orleans County, NYWayne County, NY40420
Rockford, ILBoone County, ILWinnebago County, IL40484
Rockingham County-Strafford County, NHRockingham County, NHStrafford County, NH40580
Rocky Mount, NCEdgecombe County, NCNash County, NC40660
Rome, GAFloyd County, GA40900
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                                 Sacramento—Arden-Arcade—Roseville, CAEl Dorado County, CAPlacer County, CASacramento County, CAYolo County, CA40980
Saginaw-Saginaw Township North, MISaginaw County, MI41060
St. Cloud, MNBenton County, MNStearns County, MN41100
St. George, UTWashington County, UT41140
St. Joseph, MO-KSDoniphan County, KSAndrew County, MOBuchanan County, MODeKalb County, MO41180
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                                 St. Louis, MO-ILBond 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, ORMarion County, ORPolk County, OR41500
Salinas, CAMonterey County, CA41540
Salisbury, MDSomerset County, MDWicomico County, MD41620
Salt Lake City, UTSalt Lake County, UTSummit County, UTTooele County, UT41660
San Angelo, TXIrion County, TXTom Green County, TX41700
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                                 San Antonio, TXAtascosa County, TXBandera County, TXBexar County, TXComal County, TXGuadalupe County, TXKendall County, TXMedina County, TXWilson County, TX41740
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                                 San Diego-Carlsbad-San Marcos, CASan Diego County, CA41780
Sandusky, OHErie County, OH41884
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                                 San Francisco-San Mateo-Redwood City, CAMarin County, CASan Francisco County, CASan Mateo County, CA41900
San Germán-Cabo Rojo, PRCabo Rojo Municipio, PRLajas Municipio, PRSabana Grande Municipio, PRSan Germán Municipio, PR41940
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                                 San Jose-Sunnyvale-Santa Clara, CASan Benito County, CASanta Clara County, CA41980
1
                                 San Juan-Caguas-Guaynabo, PRAguas 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, CASan Luis Obispo County, CA42044
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                                 Santa Ana-Anaheim-Irvine, CAOrange County, CA42060
Santa Barbara-Santa Maria-Goleta, CASanta Barbara County, CA42100
Santa Cruz-Watsonville, CASanta Cruz County, CA42140
Santa Fe, NMSanta Fe County, NM42220
Santa Rosa-Petaluma, CASonoma County, CA42340
Savannah, GABryan County, GAChatham County, GAEffingham County, GA42540
Scranton—Wilkes-Barre, PALackawanna County, PALuzerne County, PAWyoming County, PA42644
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                                 Seattle-Bellevue-Everett, WAKing County, WASnohomish County, WA42680
Sebastian-Vero Beach, FLIndian River County, FL43100
Sheboygan, WISheboygan County, WI43300
Sherman-Denison, TXGrayson County, TX43340
Shreveport-Bossier City, LABossier Parish, LACaddo Parish, LADe Soto Parish, LA43580
Sioux City, IA-NE-SDWoodbury County, IADakota County, NEDixon County, NEUnion County, SD43620
Sioux Falls, SDLincoln County, SDMcCook County, SDMinnehaha County, SDTurner County, SD43780
South Bend-Mishawaka, IN-MISt. Joseph County, INCass County, MI43900
Spartanburg, SCSpartanburg County, SC44060
Spokane, WASpokane County, WA44100
Springfield, ILMenard County, ILSangamon County, IL44140
Springfield, MAFranklin County, MAHampden County, MAHampshire County, MA44180
Springfield, MOChristian County, MODallas County, MOGreene County, MOPolk County, MOWebster County, MO44220
Springfield, OHClark County, OH44300
State College, PACentre County, PA( print page 23809)44700
Stockton, CASan Joaquin County, CA44940
Sumter, SCSumter County, SC45060
Syracuse, NYMadison County, NYOnondaga County, NYOswego County, NY45104
Tacoma, WAPierce County, WA45220
Tallahassee, FLGadsden County, FLJefferson County, FLLeon County, FLWakulla County, FL45300
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                                 Tampa-St. Petersburg-Clearwater, FLHernando County, FLHillsborough County, FLPasco County, FLPinellas County, FL45460
Terre Haute, INClay County, INSullivan County, INVermillion County, INVigo County, IN45500
Texarkana, TX-Texarkana, ARMiller County, ARBowie County, TX45780
Toledo, OHFulton County, OHLucas County, OHOttawa County, OHWood County, OH45820
Topeka, KSJackson County, KSJefferson County, KSOsage County, KSShawnee County, KSWabaunsee County, KS45940
Trenton-Ewing, NJMercer County, NJ46060
Tucson, AZPima County, AZ46140
Tulsa, OKCreek County, OKOkmulgee County, OKOsage County, OKPawnee County, OKRogers County, OKTulsa County, OKWagoner County, OK46220
Tuscaloosa, ALGreene County, ALHale County, ALTuscaloosa County, AL46340
Tyler, TXSmith County, TX46540
Utica-Rome, NYHerkimer County, NYOneida County, NY46660
Valdosta, GABrooks County, GAEchols County, GALanier County, GALowndes County, GA46700
Vallejo-Fairfield, CASolano County, CA47020
Victoria, TXCalhoun County, TXGoliad County, TXVictoria County, TX47220
Vineland-Millville-Bridgeton, NJCumberland County, NJ47260
1
                                 Virginia Beach-Norfolk-Newport News, VA-NCCurrituck 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, VASuffolk City, VAVirginia Beach City, VAWilliamsburg City, VA47300
Visalia-Porterville, CATulare County, CA47380
Waco, TXMcLennan County, TX47580
Warner Robins, GAHouston County, GA47644
1
                                 Warren-Troy-Farmington Hills, MILapeer County, MILivingston County, MIMacomb County, MIOakland County, MISt. Clair County, MI47894
1
                                 Washington-Arlington-Alexandria, DC-VA-MD-WVDistrict 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, IABlack Hawk County, IABremer County, IAGrundy County, IA48140
Wausau, WIMarathon County, WI48260
Weirton-Steubenville, WV-OHJefferson County, OHBrooke County, WVHancock County, WV48300
Wenatchee, WAChelan County, WADouglas County, WA48424
1
                                 West Palm Beach-Boca Raton-Boynton Beach, FLPalm Beach County, FL48540
Wheeling, WV-OHBelmont County, OHMarshall County, WVOhio County, WV48620
Wichita, KSButler County, KSHarvey County, KSSedgwick County, KSSumner County, KS48660
Wichita Falls, TXArcher County, TXClay County, TXWichita County, TX48700
Williamsport, PALycoming County, PA48864
Wilmington, DE-MD-NJNew Castle County, DECecil County, MDSalem County, NJ48900
Wilmington, NCBrunswick County, NCNew Hanover County, NCPender County, NC49020
Winchester, VA-WVFrederick County, VAWinchester City, VAHampshire County, WV49180
Winston-Salem, NCDavie County, NCForsyth County, NCStokes County, NCYadkin County, NC49340
Worcester, MAWorcester County, MA49420
Yakima, WAYakima County, WA49500
Yauco, PRGuánica Municipio, PRGuayanilla Municipio, PRPeñuelas Municipio, PRYauco Municipio, PR49620
York-Hanover, PAYork County, PA49660
Youngstown-Warren-Boardman, OH-PAMahoning County, OHTrumbull County, OHMercer County, PA49700
Yuba City, CASutter County, CAYuba County, CA49740
Yuma, AZYuma County, AZ1
                             Large urban area.
 
 
 Table 4F.—Puerto Rico Wage Index and Capital Geographic Adjustment Factor (GAF) by CBSA—FY 2009
[Note: The rural floor budget neutrality adjustment is not applicable to the Puerto Rico-specific wage index.]
CBSA code
Area
Wage index
GAF
Wage index—reclassified hospitals
GAF—reclassified hospitals10380
Aguadilla-Isabela-San Sebastián, PR
0.7845
0.846921940
Fajardo, PR
0.9572
0.970525020
Guayama, PR
0.7472
0.819132420
Mayagüez, PR
0.9236
0.947038660
Ponce, PR
0.9757
0.983341900
San Germán-Cabo Rojo, PR
1.0864
1.058441980
San Juan-Caguas-Guaynabo, PR
1.0348
1.023749500
Yauco, PR
0.7969
0.8560
 The following list represents all hospitals that are eligible to have their wage index increased by the out-migration adjustment listed in this table. Hospitals cannot receive the out-migration adjustment if they are reclassified under section 1886(d)(10) of the Act or redesignated under section 1886(d)(8)(B) of the Act. Hospitals that have already been reclassified under section 1886(d)(10) of the Act or redesignated under section 1886(d)(8)(B) of the Act are designated with an asterisk. We will automatically assume that hospitals that have already been reclassified under section 1886(d)(10) of the Act or redesignated under section 1886(d)(8)(B) of the Act wish to retain their reclassification/redesignation status and waive the application of the out-migration adjustment. Section 1886(d)(10) hospitals that wish to receive the out-migration adjustment, rather than their reclassification, should follow the termination/withdrawal procedures specified in 42 CFR 412.273 and section III.I.3. of the preamble of this proposed rule. Otherwise, they will be deemed to have waived the out-migration adjustment. Hospitals redesignated under section 1886(d)(8)(B) of the Act will be deemed to have waived the out-migration adjustment, unless they explicitly notify CMS that they elected to receive the out-migration adjustment instead within 45 days from the publication of this proposed rule. These notifications should be sent to the following address: Centers for Medicare and Medicaid Services, Center for Medicare Management, Attn.: Wage Index Adjustment Waivers, Division of Acute Care, Room C4-08-06, 7500 Security Boulevard, Baltimore, MD 21244-1850. Table 4J.—Out-Migration Adjustment—FY 2009
Provider No.
Reclassified for FY 2009
Out-migration adjustment
Qualifying county name
County code010005
*
0.0296
MARSHALL
01470010008

0.0174
CRENSHAW
01200010009
*
0.0092
MORGAN
01510010010
*
0.0296
MARSHALL
01470010012
*
0.0186
DE KALB
01240010015

0.0046
CLARKE
01120010021

0.0030
DALE
01220010022
*
0.1128
CHEROKEE
01090010025
*
0.0235
CHAMBERS
01080010027

0.0015
COFFEE
01150010029
*
0.0289
LEE
01400010032

0.0325
RANDOLPH
01550010035
*
0.0254
CULLMAN
01210010038

0.0047
CALHOUN
01070010040

0.0061
ETOWAH
01270010045

0.0222
FAYETTE
01280010046

0.0061
ETOWAH
01270010047

0.0127
BUTLER
01060010049

0.0015
COFFEE
01150010052
*
0.0103
TALLAPOOSA
01610010054
*
0.0092
MORGAN
01510010059
*
0.0069
LAWRENCE
01390010061
*
0.0542
JACKSON
01350010065
*
0.0103
TALLAPOOSA
01610010078

0.0047
CALHOUN
01070010083
*
0.0134
BALDWIN
01010010085
*
0.0092
MORGAN
01510010091

0.0046
CLARKE
01120010100
*
0.0134
BALDWIN
01010010101
*
0.0211
TALLADEGA
01600010109

0.0451
PICKENS
01530010110

0.0215
BULLOCK
01050010125

0.0476
WINSTON
01660010128

0.0046
CLARKE
01120010129

0.0134
BALDWIN
01010010138

0.0066
SUMTER
01590010143
*
0.0254
CULLMAN
01210010146

0.0047
CALHOUN
01070( print page 23811)010150
*
0.0127
BUTLER
01060010158
*
0.0023
FRANKLIN
01290010164
*
0.0211
TALLADEGA
01600030067

0.0298
LAPAZ
03055040014
*
0.0199
WHITE
04720040019
*
0.0258
ST. FRANCIS
04610040039
*
0.0172
GREENE
04270040047

0.0117
RANDOLPH
04600040067

0.0007
COLUMBIA
04130040071
*
0.0149
JEFFERSON
04340040076
*
0.1000
HOT SPRING
04290040081

0.0357
PIKE
04540050002

0.0010
ALAMEDA
05000050007

0.0146
SAN MATEO
05510050008

0.0026
SAN FRANCISCO
05480050009
*
0.0180
NAPA
05380050013
*
0.0180
NAPA
05380050014
*
0.0139
AMADOR
05020050016

0.0103
SAN LUIS OBISPO
05500050042
*
0.0162
TEHAMA
05620050043

0.0010
ALAMEDA
05000050047

0.0026
SAN FRANCISCO
05480050055

0.0026
SAN FRANCISCO
05480050069
*
0.0020
ORANGE
05400050070

0.0146
SAN MATEO
05510050073
*
0.0171
SOLANO
05580050075

0.0010
ALAMEDA
05000050076
*
0.0026
SAN FRANCISCO
05480050084

0.0132
SAN JOAQUIN
05490050089
*
0.0017
SAN BERNARDINO
05460050090
*
0.0058
SONOMA
05590050099
*
0.0017
SAN BERNARDINO
05460050101
*
0.0171
SOLANO
05580050113

0.0146
SAN MATEO
05510050118
*
0.0132
SAN JOAQUIN
05490050122

0.0132
SAN JOAQUIN
05490050129
*
0.0017
SAN BERNARDINO
05460050133
*
0.0178
YUBA
05680050136
*
0.0058
SONOMA
05590050140
*
0.0017
SAN BERNARDINO
05460050150
*
0.0342
NEVADA
05390050152

0.0026
SAN FRANCISCO
05480050167

0.0132
SAN JOAQUIN
05490050168
*
0.0020
ORANGE
05400050173
*
0.0020
ORANGE
05400050174
*
0.0058
SONOMA
05590050193
*
0.0020
ORANGE
05400050194
*
0.0052
SANTA CRUZ
05540050195

0.0010
ALAMEDA
05000050197
*
0.0146
SAN MATEO
05510050211

0.0010
ALAMEDA
05000050224
*
0.0020
ORANGE
05400050226
*
0.0020
ORANGE
05400050228

0.0026
SAN FRANCISCO
05480050230
*
0.0020
ORANGE
05400050232

0.0103
SAN LUIS OBISPO
05500050242
*
0.0052
SANTA CRUZ
05540050245
*
0.0017
SAN BERNARDINO
05460050264

0.0010
ALAMEDA
05000050272
*
0.0017
SAN BERNARDINO
05460050279
*
0.0017
SAN BERNARDINO
05460050283

0.0010
ALAMEDA
05000050289

0.0146
SAN MATEO
05510050291
*
0.0058
SONOMA
05590050298

0.0017
SAN BERNARDINO
05460050300
*
0.0017
SAN BERNARDINO
05460050305

0.0010
ALAMEDA
05000050313

0.0132
SAN JOAQUIN
05490050320

0.0010
ALAMEDA
05000050325

0.0033
TUOLUMNE
05650050327
*
0.0017
SAN BERNARDINO
05460( print page 23812)050335
*
0.0033
TUOLUMNE
05650050336

0.0132
SAN JOAQUIN
05490050348
*
0.0020
ORANGE
05400050366

0.0015
CALAVERAS
05040050367
*
0.0171
SOLANO
05580050385
*
0.0058
SONOMA
05590050407

0.0026
SAN FRANCISCO
05480050426
*
0.0020
ORANGE
05400050444

0.0233
MERCED
05340050454

0.0026
SAN FRANCISCO
05480050457

0.0026
SAN FRANCISCO
05480050476
*
0.0278
LAKE
05160050488

0.0010
ALAMEDA
05000050494
*
0.0342
NEVADA
05390050506

0.0103
SAN LUIS OBISPO
05500050512

0.0010
ALAMEDA
05000050517
*
0.0017
SAN BERNARDINO
05460050526
*
0.0020
ORANGE
05400050528
*
0.0233
MERCED
05340050541
*
0.0146
SAN MATEO
05510050543
*
0.0020
ORANGE
05400050547
*
0.0058
SONOMA
05590050548
*
0.0020
ORANGE
05400050551
*
0.0020
ORANGE
05400050567
*
0.0020
ORANGE
05400050570
*
0.0020
ORANGE
05400050580
*
0.0020
ORANGE
05400050584

0.0017
SAN BERNARDINO
05460050586
*
0.0017
SAN BERNARDINO
05460050589
*
0.0020
ORANGE
05400050603
*
0.0020
ORANGE
05400050609
*
0.0020
ORANGE
05400050618
*
0.0017
SAN BERNARDINO
05460050633

0.0103
SAN LUIS OBISPO
05500050667
*
0.0180
NAPA
05380050668

0.0026
SAN FRANCISCO
05480050678
*
0.0020
ORANGE
05400050680
*
0.0171
SOLANO
05580050690
*
0.0058
SONOMA
05590050693
*
0.0020
ORANGE
05400050714

0.0052
SANTA CRUZ
05540050720
*
0.0020
ORANGE
05400050744
*
0.0020
ORANGE
05400050745
*
0.0020
ORANGE
05400050746
*
0.0020
ORANGE
05400050747
*
0.0020
ORANGE
05400050748

0.0132
SAN JOAQUIN
05490050754

0.0146
SAN MATEO
05510050758
*
0.0017
SAN BERNARDINO
05460060001

0.0042
WELD
06610060003
*
0.0069
BOULDER
06060060010

0.0153
LARIMER
06340060027
*
0.0069
BOULDER
06060060030

0.0153
LARIMER
06340060103
*
0.0069
BOULDER
06060060116
*
0.0069
BOULDER
06060060119

0.0153
LARIMER
06340070006
*
0.0045
FAIRFIELD
07000070010
*
0.0045
FAIRFIELD
07000070018
*
0.0045
FAIRFIELD
07000070028
*
0.0045
FAIRFIELD
07000070033
*
0.0045
FAIRFIELD
07000070034
*
0.0045
FAIRFIELD
07000080001
*
0.0063
NEW CASTLE
08010080003
*
0.0063
NEW CASTLE
08010100014
*
0.0047
VOLUSIA
10630100017
*
0.0047
VOLUSIA
10630100045
*
0.0047
VOLUSIA
10630100047
*
0.0028
CHARLOTTE
10070100068
*
0.0047
VOLUSIA
10630100072
*
0.0047
VOLUSIA
10630( print page 23813)100077
*
0.0028
CHARLOTTE
10070100081
*
0.0022
WALTON
10650100102

0.0125
COLUMBIA
10110100118
*
0.0177
FLAGLER
10170100156
*
0.0125
COLUMBIA
10110100232
*
0.0054
PUTNAM
10530100236
*
0.0028
CHARLOTTE
10070100252
*
0.0151
OKEECHOBEE
10460100290

0.0582
SUMTER
10590100292
*
0.0022
WALTON
10650110023
*
0.0416
GORDON
11500110029
*
0.0052
HALL
11550110040
*
0.1455
JACKSON
11610110041
*
0.0623
HABERSHAM
11540110100

0.0790
JEFFERSON
11620110101

0.0067
COOK
11311110142

0.0185
EVANS
11441110146
*
0.0805
CAMDEN
11170110150
*
0.0227
BALDWIN
11030110187
*
0.0643
LUMPKIN
11701110189
*
0.0066
FANNIN
11450110190

0.0241
MACON
11710110205

0.0507
GILMER
11471130003
*
0.0235
NEZ PERCE
13340130024

0.0675
BONNER
13080130049
*
0.0319
KOOTENAI
13270130066

0.0319
KOOTENAI
13270130067
*
0.0725
BINGHAM
13050140001

0.0369
FULTON
14370140026

0.0315
LA SALLE
14580140043
*
0.0056
WHITESIDE
14988140058
*
0.0126
MORGAN
14770140110
*
0.0315
LA SALLE
14580140116

0.0007
MC HENRY
14640140160
*
0.0332
STEPHENSON
14970140161

0.0168
LIVINGSTON
14610140167
*
0.0632
IROQUOIS
14460140176

0.0007
MC HENRY
14640140234

0.0315
LA SALLE
14580150006
*
0.0113
LA PORTE
15450150015
*
0.0113
LA PORTE
15450150022

0.0158
MONTGOMERY
15530150030
*
0.0192
HENRY
15320150072

0.0105
CASS
15080150076
*
0.0215
MARSHALL
15490150088
*
0.0111
MADISON
15470150091
*
0.0050
HUNTINGTON
15340150102
*
0.0108
STARKE
15740150113
*
0.0111
MADISON
15470150133
*
0.0193
KOSCIUSKO
15420150146
*
0.0319
NOBLE
15560160013

0.0179
MUSCATINE
16690160030

0.0040
STORY
16840160032

0.0235
JASPER
16490160080
*
0.0066
CLINTON
16220170137
*
0.0336
DOUGLAS
17220170150

0.0166
COWLEY
17170180012
*
0.0080
HARDIN
18460180017
*
0.0035
BARREN
18040180049
*
0.0488
MADISON
18750180064

0.0314
MONTGOMERY
18860180066
*
0.0439
LOGAN
18700180070

0.0240
GRAYSON
18420180079

0.0259
HARRISON
18480190003
*
0.0085
IBERIA
19220190015
*
0.0243
TANGIPAHOA
19520190017
*
0.0187
ST. LANDRY
19480190034

0.0189
VERMILION
19560190044

0.0261
ACADIA
19000190050

0.0044
BEAUREGARD
19050190053

0.0101
JEFFERSON DAVIS
19260( print page 23814)190054

0.0085
IBERIA
19220190078

0.0187
ST. LANDRY
19480190086
*
0.0061
LINCOLN
19300190088
*
0.0387
WEBSTER
19590190099

0.0189
AVOYELLES
19040190106
*
0.0102
ALLEN
19010190116

0.0085
MOREHOUSE
19330190133

0.0102
ALLEN
19010190140

0.0035
FRANKLIN
19200190144
*
0.0387
WEBSTER
19590190145

0.0090
LA SALLE
19290190184
*
0.0161
CALDWELL
19100190190

0.0161
CALDWELL
19100190191
*
0.0187
ST. LANDRY
19480190246

0.0161
CALDWELL
19100190257
*
0.0061
LINCOLN
19300190277

0.0387
WEBSTER
19590200024
*
0.0094
ANDROSCOGGIN
20000200032

0.0466
OXFORD
20080200034
*
0.0094
ANDROSCOGGIN
20000200050
*
0.0227
HANCOCK
20040210001

0.0187
WASHINGTON
21210210023

0.0079
ANNE ARUNDEL
21010210028

0.0512
ST. MARYS
21180210043

0.0079
ANNE ARUNDEL
21010210061

0.0188
WORCESTER
21230220001
*
0.0067
WORCESTER
22170220002
*
0.0271
MIDDLESEX
22090220010
*
0.0355
ESSEX
22040220011
*
0.0271
MIDDLESEX
22090220019
*
0.0067
WORCESTER
22170220025
*
0.0067
WORCESTER
22170220029
*
0.0355
ESSEX
22040220033
*
0.0355
ESSEX
22040220035
*
0.0355
ESSEX
22040220049
*
0.0271
MIDDLESEX
22090220058
*
0.0067
WORCESTER
22170220062
*
0.0067
WORCESTER
22170220063
*
0.0271
MIDDLESEX
22090220070
*
0.0271
MIDDLESEX
22090220080
*
0.0355
ESSEX
22040220082
*
0.0271
MIDDLESEX
22090220084
*
0.0271
MIDDLESEX
22090220090
*
0.0067
WORCESTER
22170220095
*
0.0067
WORCESTER
22170220098
*
0.0271
MIDDLESEX
22090220101
*
0.0271
MIDDLESEX
22090220105
*
0.0271
MIDDLESEX
22090220163
*
0.0067
WORCESTER
22170220171
*
0.0271
MIDDLESEX
22090220174
*
0.0355
ESSEX
22040220176
*
0.0067
WORCESTER
22170230003
*
0.0220
OTTAWA
23690230005

0.0473
LENAWEE
23450230013
*
0.0025
OAKLAND
23620230015

0.0295
ST. JOSEPH
23740230019
*
0.0025
OAKLAND
23620230021
*
0.0101
BERRIEN
23100230022
*
0.0212
BRANCH
23110230029
*
0.0025
OAKLAND
23620230035
*
0.0095
MONTCALM
23580230037
*
0.0210
HILLSDALE
23290230047
*
0.0021
MACOMB
23490230069
*
0.0210
LIVINGSTON
23460230071
*
0.0025
OAKLAND
23620230072
*
0.0220
OTTAWA
23690230075

0.0047
CALHOUN
23120230078
*
0.0101
BERRIEN
23100230092
*
0.0223
JACKSON
23370230093

0.0058
MECOSTA
23530230096
*
0.0295
ST. JOSEPH
23740( print page 23815)230099
*
0.0231
MONROE
23570230121
*
0.0678
SHIAWASSEE
23770230130
*
0.0025
OAKLAND
23620230151
*
0.0025
OAKLAND
23620230174
*
0.0220
OTTAWA
23690230195
*
0.0021
MACOMB
23490230204
*
0.0021
MACOMB
23490230207
*
0.0025
OAKLAND
23620230208
*
0.0095
MONTCALM
23580230217

0.0047
CALHOUN
23120230222
*
0.0035
MIDLAND
23550230223
*
0.0025
OAKLAND
23620230227
*
0.0021
MACOMB
23490230254
*
0.0025
OAKLAND
23620230257
*
0.0021
MACOMB
23490230264
*
0.0021
MACOMB
23490230269
*
0.0025
OAKLAND
23620230277
*
0.0025
OAKLAND
23620230279
*
0.0210
LIVINGSTON
23460230301
*
0.0025
OAKLAND
23620240018

0.0805
GOODHUE
24240240044

0.0625
WINONA
24840240064
*
0.0134
ITASCA
24300240069
*
0.0267
STEELE
24730240071
*
0.0385
RICE
24650240117

0.0527
MOWER
24490240211

0.0812
PINE
24570250023
*
0.0541
PEARL RIVER
25540250040
*
0.0021
JACKSON
25290250117
*
0.0541
PEARL RIVER
25540250128

0.0446
PANOLA
25530250162

0.0014
HANCOCK
25220260059

0.0077
LACLEDE
26520260064
*
0.0089
AUDRAIN
26030260097

0.0300
JOHNSON
26500260116
*
0.0087
ST. FRANCOIS
26930260163

0.0087
ST. FRANCOIS
26930280077

0.0080
DODGE
28260280123

0.0123
GAGE
28330290002
*
0.0277
LYON
29090300011
*
0.0069
HILLSBOROUGH
30050300012
*
0.0069
HILLSBOROUGH
30050300017
*
0.0102
ROCKINGHAM
30070300020
*
0.0069
HILLSBOROUGH
30050300023
*
0.0102
ROCKINGHAM
30070300029
*
0.0102
ROCKINGHAM
30070300034
*
0.0069
HILLSBOROUGH
30050310002
*
0.0268
ESSEX
31200310009
*
0.0268
ESSEX
31200310010

0.0092
MERCER
31260310011

0.0115
CAPE MAY
31180310015
*
0.0203
MORRIS
31300310017
*
0.0203
MORRIS
31300310018
*
0.0268
ESSEX
31200310021
*
0.0092
MERCER
31260310031
*
0.0153
BURLINGTON
31150310038
*
0.0209
MIDDLESEX
31270310039
*
0.0209
MIDDLESEX
31270310044

0.0092
MERCER
31260310050
*
0.0203
MORRIS
31300310054
*
0.0268
ESSEX
31200310057
*
0.0153
BURLINGTON
31150310061
*
0.0153
BURLINGTON
31150310069
*
0.0096
SALEM
31340310070
*
0.0209
MIDDLESEX
31270310076
*
0.0268
ESSEX
31200310083
*
0.0268
ESSEX
31200310091
*
0.0096
SALEM
31340310092

0.0092
MERCER
31260310093
*
0.0268
ESSEX
31200310096
*
0.0268
ESSEX
31200( print page 23816)310108
*
0.0209
MIDDLESEX
31270310110

0.0092
MERCER
31260310119
*
0.0268
ESSEX
31200320003
*
0.0629
SAN MIGUEL
32230320011

0.0442
RIO ARRIBA
32190320018

0.0024
DONA ANA
32060320085

0.0024
DONA ANA
32060330004
*
0.0633
ULSTER
33740330008
*
0.0126
WYOMING
33900330010

0.0067
MONTGOMERY
33380330027
*
0.0123
NASSAU
33400330033

0.0223
CHENANGO
33080330047

0.0067
MONTGOMERY
33380330073
*
0.0151
GENESEE
33290330094
*
0.0503
COLUMBIA
33200330103
*
0.0131
CATTARAUGUS
33040330106
*
0.0123
NASSAU
33400330126
*
0.0642
ORANGE
33540330132

0.0131
CATTARAUGUS
33040330135

0.0642
ORANGE
33540330144

0.0054
STEUBEN
33690330151

0.0054
STEUBEN
33690330167
*
0.0123
NASSAU
33400330175

0.0260
CORTLAND
33210330181
*
0.0123
NASSAU
33400330182
*
0.0123
NASSAU
33400330191
*
0.0017
WARREN
33750330198
*
0.0123
NASSAU
33400330205

0.0642
ORANGE
33540330224
*
0.0633
ULSTER
33740330225
*
0.0123
NASSAU
33400330235
*
0.0306
CAYUGA
33050330259
*
0.0123
NASSAU
33400330264

0.0642
ORANGE
33540330276

0.0036
FULTON
33280330277
*
0.0054
STEUBEN
33690330331
*
0.0123
NASSAU
33400330332
*
0.0123
NASSAU
33400330372
*
0.0123
NASSAU
33400330386
*
0.0745
SULLIVAN
33710340020

0.0156
LEE
34520340021
*
0.0162
CLEVELAND
34220340024

0.0177
SAMPSON
34810340027
*
0.0128
LENOIR
34530340037

0.0162
CLEVELAND
34220340038

0.0253
BEAUFORT
34060340039
*
0.0101
IREDELL
34480340068
*
0.0087
COLUMBUS
34230340069
*
0.0015
WAKE
34910340070
*
0.0395
ALAMANCE
34000340071
*
0.0226
HARNETT
34420340073
*
0.0015
WAKE
34910340085

0.0250
DAVIDSON
34280340096

0.0250
DAVIDSON
34280340104

0.0162
CLEVELAND
34220340114
*
0.0015
WAKE
34910340126
*
0.0100
WILSON
34970340129
*
0.0101
IREDELL
34480340133

0.0308
MARTIN
34580340138
*
0.0015
WAKE
34910340144
*
0.0101
IREDELL
34480340145
*
0.0336
LINCOLN
34540340151

0.0052
HALIFAX
34410340173
*
0.0015
WAKE
34910360002

0.0141
ASHLAND
36020360010
*
0.0074
TUSCARAWAS
36800360013
*
0.0135
SHELBY
36760360025
*
0.0077
ERIE
36220360036
*
0.0126
WAYNE
36860360040

0.0387
KNOX
36430360044

0.0127
DARKE
36190( print page 23817)360065
*
0.0075
HURON
36400360071

0.0035
VAN WERT
36820360086
*
0.0186
CLARK
36110360096
*
0.0071
COLUMBIANA
36140360107
*
0.0119
SANDUSKY
36730360125
*
0.0133
ASHTABULA
36030360156

0.0119
SANDUSKY
36730360175
*
0.0183
CLINTON
36130360185
*
0.0071
COLUMBIANA
36140360187
*
0.0186
CLARK
36110360245
*
0.0133
ASHTABULA
36030370014
*
0.0361
BRYAN
37060370015
*
0.0366
MAYES
37480370023

0.0090
STEPHENS
37680370065

0.0096
CRAIG
37170370072

0.0258
LATIMER
37380370083

0.0051
PUSHMATAHA
37630370100

0.0100
CHOCTAW
37110370149
*
0.0302
POTTAWATOMIE
37620370156

0.0121
GARVIN
37240370169

0.0163
MCINTOSH
37450370172

0.0258
LATIMER
37380370214

0.0121
GARVIN
37240380022
*
0.0067
LINN
38210380029

0.0075
MARION
38230380051
*
0.0075
MARION
38230380056

0.0075
MARION
38230390008

0.0060
LAWRENCE
39450390016
*
0.0060
LAWRENCE
39450390030

0.0284
SCHUYLKILL
39650390031
*
0.0284
SCHUYLKILL
39650390044
*
0.0191
BERKS
39110390052

0.0047
CLEARFIELD
39230390056

0.0036
HUNTINGDON
39380390065
*
0.0532
ADAMS
39000390066
*
0.0372
LEBANON
39460390079
*
0.0003
BRADFORD
39130390086
*
0.0047
CLEARFIELD
39230390096
*
0.0191
BERKS
39110390110
*
0.0003
CAMBRIA
39160390113
*
0.0053
CRAWFORD
39260390117

0.0002
BEDFORD
39100390122

0.0053
CRAWFORD
39260390125

0.0022
WAYNE
39760390130
*
0.0003
CAMBRIA
39160390138
*
0.0218
FRANKLIN
39350390146

0.0022
WARREN
39740390150
*
0.0031
GREENE
39370390151
*
0.0218
FRANKLIN
39350390162
*
0.0200
NORTHAMPTON
39590390183
*
0.0284
SCHUYLKILL
39650390201

0.1170
MONROE
39550390236

0.0003
BRADFORD
39130390313
*
0.0284
SCHUYLKILL
39650390316

0.0191
BERKS
39110420002

0.0004
YORK
42450420007
*
0.0027
SPARTANBURG
42410420009
*
0.0113
OCONEE
42360420019

0.0158
CHESTER
42110420020
*
0.0007
GEORGETOWN
42210420027
*
0.0108
ANDERSON
42030420030
*
0.0069
COLLETON
42140420036
*
0.0064
LANCASTER
42280420039
*
0.0153
UNION
42430420043

0.0157
CHEROKEE
42100420053

0.0035
NEWBERRY
42350420054

0.0003
MARLBORO
42340420062
*
0.0109
CHESTERFIELD
42120420068
*
0.0027
ORANGEBURG
42370420069
*
0.0052
CLARENDON
42130420070
*
0.0052
SUMTER
42420( print page 23818)420082

0.0008
AIKEN
42010420083
*
0.0027
SPARTANBURG
42410420098
*
0.0007
GEORGETOWN
42210430008

0.0535
BROOKINGS
43050430048

0.0129
LAWRENCE
43400430094

0.0129
LAWRENCE
43400440007

0.0219
COFFEE
44150440008
*
0.0449
HENDERSON
44380440012

0.0007
SULLIVAN
44810440016

0.0144
CARROLL
44080440017

0.0007
SULLIVAN
44810440024
*
0.0230
BRADLEY
44050440025
*
0.0007
GREENE
44290440030

0.0056
HAMBLEN
44310440031

0.0019
ROANE
44720440033

0.0027
CAMPBELL
44060440035
*
0.0301
MONTGOMERY
44620440047

0.0338
GIBSON
44260440050

0.0007
GREENE
44290440051

0.0082
MC NAIRY
44540440057

0.0021
CLAIBORNE
44120440060
*
0.0338
GIBSON
44260440067
*
0.0056
HAMBLEN
44310440070

0.0109
DECATUR
44190440081

0.0052
SEVIER
44770440084

0.0025
MONROE
44610440109

0.0070
HARDIN
44350440115

0.0338
GIBSON
44260440137

0.0738
BEDFORD
44010440144
*
0.0219
COFFEE
44150440148
*
0.0296
DE KALB
44200440153

0.0007
COCKE
44140440174

0.0312
HAYWOOD
44370440176

0.0007
SULLIVAN
44810440180

0.0027
CAMPBELL
44060440181

0.0365
HARDEMAN
44340440182

0.0144
CARROLL
44080440185
*
0.0230
BRADLEY
44050450032

0.0254
HARRISON
45620450039
*
0.0024
TARRANT
45910450052
*
0.0276
BOSQUE
45160450059

0.0075
COMAL
45320450064
*
0.0024
TARRANT
45910450087
*
0.0024
TARRANT
45910450090

0.0650
COOKE
45340450099
*
0.0145
GRAY
45563450135
*
0.0024
TARRANT
45910450137
*
0.0024
TARRANT
45910450144

0.0559
ANDREWS
45010450163

0.0054
KLEBERG
45743450192

0.0271
HILL
45651450194

0.0213
CHEROKEE
45281450210

0.0151
PANOLA
45842450224
*
0.0195
WOOD
45974450236

0.0389
HOPKINS
45654450270

0.0271
HILL
45651450283
*
0.0653
VAN ZANDT
45947450324
*
0.0132
GRAYSON
45564450347
*
0.0370
WALKER
45949450348
*
0.0059
FALLS
45500450370

0.0235
COLORADO
45312450389
*
0.0618
HENDERSON
45640450393
*
0.0132
GRAYSON
45564450395
*
0.0441
POLK
45850450419
*
0.0024
TARRANT
45910450438

0.0235
COLORADO
45312450451

0.0536
SOMERVELL
45893450460

0.0053
TYLER
45942450469
*
0.0132
GRAYSON
45564450497

0.0375
MONTAGUE
45800450539

0.0067
HALE
45582( print page 23819)450547
*
0.0195
WOOD
45974450563
*
0.0024
TARRANT
45910450565
*
0.0486
PALO PINTO
45841450573

0.0126
JASPER
45690450596
*
0.0743
HOOD
45653450615

0.0032
CASS
45260450639
*
0.0024
TARRANT
45910450641

0.0375
MONTAGUE
45800450672
*
0.0024
TARRANT
45910450675
*
0.0024
TARRANT
45910450677
*
0.0024
TARRANT
45910450698

0.0127
LAMB
45751450747
*
0.0126
ANDERSON
45000450755

0.0276
HOCKLEY
45652450770
*
0.0182
MILAM
45795450779
*
0.0024
TARRANT
45910450813
*
0.0126
ANDERSON
45000450838

0.0126
JASPER
45690450872
*
0.0024
TARRANT
45910450880
*
0.0024
TARRANT
45910450884

0.0049
UPSHUR
45943450886
*
0.0024
TARRANT
45910450888

0.0024
TARRANT
45910460001

0.0023
UTAH
46240460013

0.0023
UTAH
46240460017

0.0383
BOX ELDER
46010460023

0.0023
UTAH
46240460039
*
0.0383
BOX ELDER
46010460043

0.0023
UTAH
46240460052

0.0023
UTAH
46240460055

0.0023
UTAH
46240490019
*
0.1088
CULPEPER
49230490084

0.0187
ESSEX
49280490110

0.0185
MONTGOMERY
49600500003
*
0.0166
SKAGIT
50280500007
*
0.0166
SKAGIT
50280500019

0.0131
LEWIS
50200500039
*
0.0094
KITSAP
50170500041
*
0.0020
COWLITZ
50070510012

0.0124
MASON
51260510018
*
0.0188
JACKSON
51170510047
*
0.0269
MARION
51240510077
*
0.0021
MINGO
51290520028
*
0.0286
GREEN
52220520035

0.0076
SHEBOYGAN
52580520044

0.0076
SHEBOYGAN
52580520057

0.0193
SAUK
52550520059
*
0.0195
RACINE
52500520071
*
0.0161
JEFFERSON
52270520076
*
0.0146
DODGE
52130520095

0.0193
SAUK
52550520096
*
0.0195
RACINE
52500520102
*
0.0242
WALWORTH
52630520116
*
0.0161
JEFFERSON
52270670015

0.0024
TARRANT
45910670023

0.0024
TARRANT
45910
 Table 5.—List of Medicare Severity Diagnosis-Related Groups (MS-DRGs), Relative Weighting Factors, and Geometric and Arithmetic Mean Length of Stay
MS-DRG
FY 2009 proposed rule post-acute DRG
FY 2009 proposed rule
                                 special pay DRG
MDC
Type
MS-DRG title
Weights
Geometric mean LOS
Arithmetic mean LOS001
No
No
PRE
SURG
Heart transplant or implant of heart assist system w MCC
23.4061
29.1
40.2002
No
No
PRE
SURG
Heart transplant or implant of heart assist system w/o MCC
12.8956
18.4
24.7( print page 23820)003
Yes
No
PRE
SURG
ECMO or trach w MV 96+ hrs or PDX exc face, mouth & neck w maj O.R
18.3635
32.5
39.6004
Yes
No
PRE
SURG
Trach w MV 96+ hrs or PDX exc face, mouth & neck w/o maj O.R.
11.1684
23.5
28.8005
No
No
PRE
SURG
Liver transplant w MCC or intestinal transplant
10.7436
15.9
21.2006
No
No
PRE
SURG
Liver transplant w/o MCC
4.8292
8.9
10.2007
No
No
PRE
SURG
Lung transplant
9.7325
15.9
19.7008
No
No
PRE
SURG
Simultaneous pancreas/kidney transplant
4.8917
10.1
11.9009
No
No
PRE
SURG
Bone marrow transplant
6.6398
18.2
21.9010
No
No
PRE
SURG
Pancreas transplant
3.7508
9.1
10.8011
No
No
PRE
SURG
Tracheostomy for face,mouth & neck diagnoses w MCC
4.8900
13.1
16.7012
No
No
PRE
SURG
Tracheostomy for face,mouth & neck diagnoses w CC
3.0563
8.9
10.7013
No
No
PRE
SURG
Tracheostomy for face,mouth & neck diagnoses w/o CC/MCC
1.9057
5.9
6.9020
No
No
01
SURG
Intracranial vascular procedures w PDX hemorrhage w MCC
8.3276
14.8
18.4021
No
No
01
SURG
Intracranial vascular procedures w PDX hemorrhage w CC
6.3534
13.7
15.4022
No
No
01
SURG
Intracranial vascular procedures w PDX hemorrhage w/o CC/MCC
4.2072
7.6
9.4023
No
No
01
SURG
Cranio w major dev impl/acute complex CNS PDX w MCC or chemo implant
5.0763
8.9
12.7024
No
No
01
SURG
Cranio w major dev impl/acute complex CNS PDX w/o MCC
3.4757
6.3
9.0025
Yes
No
01
SURG
Craniotomy & endovascular intracranial procedures w MCC
5.0324
9.9
13.0026
Yes
No
01
SURG
Craniotomy & endovascular intracranial procedures w CC
3.0107
6.5
8.2027
Yes
No
01
SURG
Craniotomy & endovascular intracranial procedures w/o CC/MCC
2.1083
3.5
4.5028
Yes
Yes
01
SURG
Spinal procedures w MCC
5.1853
10.7
14.3029
Yes
Yes
01
SURG
Spinal procedures w CC or spinal neurostimulators
2.7949
5.1
7.1030
Yes
Yes
01
SURG
Spinal procedures w/o CC/MCC
1.5395
2.8
3.7031
Yes
No
01
SURG
Ventricular shunt procedures w MCC
4.3899
9.4
13.1032
Yes
No
01
SURG
Ventricular shunt procedures w CC
1.9471
4.0
6.0033
Yes
No
01
SURG
Ventricular shunt procedures w/o CC/MCC
1.3334
2.3
3.0034
No
No
01
SURG
Carotid artery stent procedure w MCC
3.2182
4.6
7.2035
No
No
01
SURG
Carotid artery stent procedure w CC
2.0258
2.1
3.3036
No
No
01
SURG
Carotid artery stent procedure w/o CC/MCC
1.5706
1.3
1.6037
No
No
01
SURG
Extracranial procedures w MCC
3.0208
5.9
8.5038
No
No
01
SURG
Extracranial procedures w CC
1.5585
2.5
3.8039
No
No
01
SURG
Extracranial procedures w/o CC/MCC
1.0057
1.5
1.8040
Yes
Yes
01
SURG
Periph/cranial nerve & other nerv syst proc w MCC
3.9691
9.7
13.3041
Yes
Yes
01
SURG
Periph/cranial nerve & other nerv syst proc w CC or periph neurostim
2.1517
5.3
7.2042
Yes
Yes
01
SURG
Periph/cranial nerve & other nerv syst proc w/o CC/MCC
1.6771
2.5
3.6052
No
No
01
MED
Spinal disorders & injuries w CC/MCC
1.6271
4.9
6.7053
No
No
01
MED
Spinal disorders & injuries w/o CC/MCC
0.8617
3.2
4.0054
Yes
No
01
MED
Nervous system neoplasms w MCC
1.5844
5.2
7.0055
Yes
No
01
MED
Nervous system neoplasms w/o MCC
1.0781
3.8
5.1056
Yes
No
01
MED
Degenerative nervous system disorders w MCC
1.6311
5.7
7.8057
Yes
No
01
MED
Degenerative nervous system disorders w/o MCC
0.8755
3.9
5.0( print page 23821)058
No
No
01
MED
Multiple sclerosis & cerebellar ataxia w MCC
1.5373
5.7
7.6059
No
No
01
MED
Multiple sclerosis & cerebellar ataxia w CC
0.9404
4.2
5.1060
No
No
01
MED
Multiple sclerosis & cerebellar ataxia w/o CC/MCC
0.6978
3.4
4.0061
No
No
01
MED
Acute ischemic stroke w use of thrombolytic agent w MCC
2.8759
6.8
8.9062
No
No
01
MED
Acute ischemic stroke w use of thrombolytic agent w CC
1.9505
5.3
6.3063
No
No
01
MED
Acute ischemic stroke w use of thrombolytic agent w/o CC/MCC
1.5168
3.9
4.5064
Yes
No
01
MED
Intracranial hemorrhage or cerebral infarction w MCC
1.8446
5.5
7.5065
Yes
No
01
MED
Intracranial hemorrhage or cerebral infarction w CC
1.1748
4.3
5.2066
Yes
No
01
MED
Intracranial hemorrhage or cerebral infarction w/o CC/MCC
0.8426
3.1
3.7067
No
No
01
MED
Nonspecific cva & precerebral occlusion w/o infarct w MCC
1.3899
4.4
5.8068
No
No
01
MED
Nonspecific cva & precerebral occlusion w/o infarct w/o MCC
0.8449
2.7
3.4069
No
No
01
MED
Transient ischemia
0.7143
2.4
3.0070
Yes
No
01
MED
Nonspecific cerebrovascular disorders w MCC
1.8241
6.0
7.9071
Yes
No
01
MED
Nonspecific cerebrovascular disorders w CC
1.1307
4.4
5.6072
Yes
No
01
MED
Nonspecific cerebrovascular disorders w/o CC/MCC
0.7629
2.8
3.5073
No
No
01
MED
Cranial & peripheral nerve disorders w MCC
1.3037
4.7
6.2074
No
No
01
MED
Cranial & peripheral nerve disorders w/o MCC
0.8406
3.4
4.3075
No
No
01
MED
Viral meningitis w CC/MCC
1.6738
5.7
7.3076
No
No
01
MED
Viral meningitis w/o CC/MCC
0.8544
3.4
4.1077
No
No
01
MED
Hypertensive encephalopathy w MCC
1.6225
5.2
6.7078
No
No
01
MED
Hypertensive encephalopathy w CC
1.0050
3.6
4.4079
No
No
01
MED
Hypertensive encephalopathy w/o CC/MCC
0.7377
2.8
3.4080
No
No
01
MED
Nontraumatic stupor & coma w MCC
1.1007
3.8
5.1081
No
No
01
MED
Nontraumatic stupor & coma w/o MCC
0.7094
2.7
3.5082
No
No
01
MED
Traumatic stupor & coma, coma >1 hr w MCC
2.0177
3.7
6.4083
No
No
01
MED
Traumatic stupor & coma, coma >1 hr w CC
1.3027
3.7
5.0084
No
No
01
MED
Traumatic stupor & coma, coma >1 hr w/o CC/MCC
0.8720
2.4
3.1085
Yes
No
01
MED
Traumatic stupor & coma, coma <1 hr w MCC
2.0942
5.5
7.6086
Yes
No
01
MED
Traumatic stupor & coma, coma <1 hr w CC
1.2049
3.9
5.0087
Yes
No
01
MED
Traumatic stupor & coma, coma <1 hr w/o CC/MCC
0.8008
2.6
3.3088
No
No
01
MED
Concussion w MCC
1.5774
4.2
5.9089
No
No
01
MED
Concussion w CC
0.9162
3.0
3.8090
No
No
01
MED
Concussion w/o CC/MCC
0.6736
2.0
2.5091
Yes
No
01
MED
Other disorders of nervous system w MCC
1.5641
4.6
6.4092
Yes
No
01
MED
Other disorders of nervous system w CC
0.9195
3.5
4.5093
Yes
No
01
MED
Other disorders of nervous system w/o CC/MCC
0.6753
2.6
3.2094
No
No
01
MED
Bacterial & tuberculous infections of nervous system w MCC
3.3477
9.2
11.9095
No
No
01
MED
Bacterial & tuberculous infections of nervous system w CC
2.1934
6.9
8.6( print page 23822)096
No
No
01
MED
Bacterial & tuberculous infections of nervous system w/o CC/MCC
1.8297
5.0
6.2097
No
No
01
MED
Non-bacterial infect of nervous sys exc viral meningitis w MCC
3.2101
9.9
12.6098
No
No
01
MED
Non-bacterial infect of nervous sys exc viral meningitis w CC
1.8564
6.8
8.4099
No
No
01
MED
Non-bacterial infect of nervous sys exc viral meningitis w/o CC/MCC
1.2533
4.6
5.9100
Yes
No
01
MED
Seizures w MCC
1.5064
4.7
6.4101
Yes
No
01
MED
Seizures w/o MCC
0.7594
2.9
3.7102
No
No
01
MED
Headaches w MCC
0.9594
3.3
4.5103
No
No
01
MED
Headaches w/o MCC
0.6224
2.5
3.1113
No
No
02
SURG
Orbital procedures w CC/MCC
1.5656
3.8
5.6114
No
No
02
SURG
Orbital procedures w/o CC/MCC
0.8313
1.9
2.6115
No
No
02
SURG
Extraocular procedures except orbit
1.0625
3.3
4.3116
No
No
02
SURG
Intraocular procedures w CC/MCC
1.1338
2.6
4.1117
No
No
02
SURG
Intraocular procedures w/o CC/MCC
0.6699
1.6
2.2121
No
No
02
MED
Acute major eye infections w CC/MCC
0.9556
4.4
5.5122
No
No
02
MED
Acute major eye infections w/o CC/MCC
0.6127
3.4
4.0123
No
No
02
MED
Neurological eye disorders
0.6840
2.3
2.9124
No
No
02
MED
Other disorders of the eye w MCC
1.0620
3.9
5.3125
No
No
02
MED
Other disorders of the eye w/o MCC
0.6660
2.8
3.5129
No
No
03
SURG
Major head & neck procedures w CC/MCC or major device
2.0147
3.7
5.2130
No
No
03
SURG
Major head & neck procedures w/o CC/MCC
1.1588
2.4
2.9131
No
No
03
SURG
Cranial/facial procedures w CC/MCC
1.9768
4.0
5.7132
No
No
03
SURG
Cranial/facial procedures w/o CC/MCC
1.1041
2.1
2.7133
No
No
03
SURG
Other ear, nose, mouth & throat O.R. procedures w CC/MCC
1.5491
3.6
5.3134
No
No
03
SURG
Other ear, nose, mouth & throat O.R. procedures w/o CC/MCC
0.8243
1.7
2.2135
No
No
03
SURG
Sinus & mastoid procedures w CC/MCC
1.6842
3.8
5.8136
No
No
03
SURG
Sinus & mastoid procedures w/o CC/MCC
0.9023
1.7
2.3137
No
No
03
SURG
Mouth procedures w CC/MCC
1.2668
3.8
5.4138
No
No
03
SURG
Mouth procedures w/o CC/MCC
0.7368
1.9
2.5139
No
No
03
SURG
Salivary gland procedures
0.8176
1.4
1.8146
No
No
03
MED
Ear, nose, mouth & throat malignancy w MCC
2.0489
6.7
9.4147
No
No
03
MED
Ear, nose, mouth & throat malignancy w CC
1.2486
4.3
6.1148
No
No
03
MED
Ear, nose, mouth & throat malignancy w/o CC/MCC
0.8181
2.7
3.8149
No
No
03
MED
Dysequilibrium
0.6086
2.2
2.7150
No
No
03
MED
Epistaxis w MCC
1.2243
3.7
5.2151
No
No
03
MED
Epistaxis w/o MCC
0.6018
2.3
2.9152
No
No
03
MED
Otitis media & URI w MCC
0.8976
3.4
4.5153
No
No
03
MED
Otitis media & URI w/o MCC
0.5948
2.6
3.2154
No
No
03
MED
Other ear, nose, mouth & throat diagnoses w MCC
1.3768
4.6
6.3155
No
No
03
MED
Other ear, nose, mouth & throat diagnoses w CC
0.8779
3.5
4.4156
No
No
03
MED
Other ear, nose, mouth & throat diagnoses w/o CC/MCC
0.6306
2.5
3.2157
No
No
03
MED
Dental & oral diseases w MCC
1.4793
4.7
6.7158
No
No
03
MED
Dental & oral diseases w CC
0.8615
3.4
4.5159
No
No
03
MED
Dental & oral diseases w/o CC/MCC
0.5952
2.4
3.1163
Yes
No
04
SURG
Major chest procedures w MCC
4.9951
12.2
14.9164
Yes
No
04
SURG
Major chest procedures w CC
2.5982
6.7
8.1165
Yes
No
04
SURG
Major chest procedures w/o CC/MCC
1.8086
4.3
5.1166
Yes
No
04
SURG
Other resp system O.R. procedures w MCC
3.6865
10.0
12.9( print page 23823)167
Yes
No
04
SURG
Other resp system O.R. procedures w CC
2.0256
6.3
8.0168
Yes
No
04
SURG
Other resp system O.R. procedures w/o CC/MCC
1.3443
3.9
5.3175
Yes
No
04
MED
Pulmonary embolism w MCC
1.5777
6.0
7.3176
Yes
No
04
MED
Pulmonary embolism w/o MCC
1.0696
4.6
5.3177
Yes
No
04
MED
Respiratory infections & inflammations w MCC
2.0391
7.2
9.1178
Yes
No
04
MED
Respiratory infections & inflammations w CC
1.4979
6.0
7.4179
Yes
No
04
MED
Respiratory infections & inflammations w/o CC/MCC
1.0409
4.6
5.6180
No
No
04
MED
Respiratory neoplasms w MCC
1.6938
6.0
7.9181
No
No
04
MED
Respiratory neoplasms w CC
1.2293
4.5
5.9182
No
No
04
MED
Respiratory neoplasms w/o CC/MCC
0.8712
3.2
4.2183
No
No
04
MED
Major chest trauma w MCC
1.5304
5.8
7.2184
No
No
04
MED
Major chest trauma w CC
0.9405
3.8
4.6185
No
No
04
MED
Major chest trauma w/o CC/MCC
0.6755
2.9
3.4186
Yes
No
04
MED
Pleural effusion w MCC
1.6200
5.7
7.4187
Yes
No
04
MED
Pleural effusion w CC
1.0940
4.1
5.3188
Yes
No
04
MED
Pleural effusion w/o CC/MCC
0.8121
3.1
4.0189
No
No
04
MED
Pulmonary edema & respiratory failure
1.3473
4.8
6.1190
Yes
No
04
MED
Chronic obstructive pulmonary disease w MCC
1.3004
5.0
6.3191
Yes
No
04
MED
Chronic obstructive pulmonary disease w CC
0.9734
4.1
5.0192
Yes
No
04
MED
Chronic obstructive pulmonary disease w/o CC/MCC
0.7239
3.3
4.0193
Yes
No
04
MED
Simple pneumonia & pleurisy w MCC
1.4303
5.4
6.8194
Yes
No
04
MED
Simple pneumonia & pleurisy w CC
1.0041
4.4
5.3195
Yes
No
04
MED
Simple pneumonia & pleurisy w/o CC/MCC
0.7301
3.5
4.1196
Yes
No
04
MED
Interstitial lung disease w MCC
1.6006
5.9
7.4197
Yes
No
04
MED
Interstitial lung disease w CC
1.0973
4.4
5.4198
Yes
No
04
MED
Interstitial lung disease w/o CC/MCC
0.8158
3.3
4.1199
No
No
04
MED
Pneumothorax w MCC
1.7383
6.4
8.3200
No
No
04
MED
Pneumothorax w CC
1.0118
3.9
5.1201
No
No
04
MED
Pneumothorax w/o CC/MCC
0.7399
3.1
4.1202
No
No
04
MED
Bronchitis & asthma w CC/MCC
0.8135
3.5
4.4203
No
No
04
MED
Bronchitis & asthma w/o CC/MCC
0.5938
2.8
3.4204
No
No
04
MED
Respiratory signs & symptoms
0.6533
2.2
2.9205
Yes
No
04
MED
Other respiratory system diagnoses w MCC
1.2427
4.0
5.5206
Yes
No
04
MED
Other respiratory system diagnoses w/o MCC
0.7266
2.7
3.4207
Yes
No
04
MED
Respiratory system diagnosis w ventilator support 96+ hours
5.1153
12.8
15.1208
No
No
04
MED
Respiratory system diagnosis w ventilator support <96 hours
2.1827
5.2
7.2215
No
No
05
SURG
Other heart assist system implant
12.3351
7.8
14.2216
Yes
No
05
SURG
Cardiac valve & oth maj cardiothoracic proc w card cath w MCC
1..1072
15.7
18.4217
Yes
No
05
SURG
Cardiac valve & oth maj cardiothoracic proc w card cath w CC
7.0028
10.9
12.3218
Yes
No
05
SURG
Cardiac valve & oth maj cardiothoracic proc w card cath w/o CC/MCC
5.4355
8.4
9.1219
Yes
Yes
05
SURG
Cardiac valve & oth maj cardiothoracic proc w/o card cath w MCC
8.0764
11.5
14.0220
Yes
Yes
05
SURG
Cardiac valve & oth maj cardiothoracic proc w/o card cath w CC
5.3066
7.7
8.6( print page 23824)221
Yes
Yes
05
SURG
Cardiac valve & oth maj cardiothoracic proc w/o card cath w/o CC/MCC
4.4089
6.0
6.4222
No
No
05
SURG
Cardiac defib implant w cardiac cath w AMI/HF/shock w MCC
8.6586
10.7
13.1223
No
No
05
SURG
Cardiac defib implant w cardiac cath w AMI/HF/shock w/o MCC
6.3035
4.6
6.3224
No
No
05
SURG
Cardiac defib implant w cardiac cath w/o AMI/HF/shock w MCC
7.9767
9.2
11.4225
No
No
05
SURG
Cardiac defib implant w cardiac cath w/o AMI/HF/shock w/o MCC
5.9123
4.5
5.6226
No
No
05
SURG
Cardiac defibrillator implant w/o cardiac cath w MCC
6.7278
6.2
9.3227
No
No
05
SURG
Cardiac defibrillator implant w/o cardiac cath w/o MCC
5.0145
1.8
2.8228
Yes
No
05
SURG
Other cardiothoracic procedures w MCC
7.8191
12.1
14.7229
Yes
No
05
SURG
Other cardiothoracic procedures w CC
5.0358
7.9
9.1230
Yes
No
05
SURG
Other cardiothoracic procedures w/o CC/MCC
4.0677
5.6
6.5231
No
No
05
SURG
Coronary bypass w PTCA w MCC
7.6801
11.2
13.3232
No
No
05
SURG
Coronary bypass w PTCA w/o MCC
5.5460
8.3
9.2233
Yes
No
05
SURG
Coronary bypass w cardiac cath w MCC
7.0378
12.4
14.2234
Yes
No
05
SURG
Coronary bypass w cardiac cath w/o MCC
4.6193
8.3
8.9235
Yes
No
05
SURG
Coronary bypass w/o cardiac cath w MCC
5.6992
9.5
11.2236
Yes
No
05
SURG
Coronary bypass w/o cardiac cath w/o MCC
3.6122
6.1
6.6237
No
No
05
SURG
Major cardiovasc procedures w MCC or thoracic aortic aneurysm repair
5.0881
7.5
10.8238
No
No
05
SURG
Major cardiovasc procedures w/o MCC
2.8962
3.2
4.6239
Yes
No
05
SURG
Amputation for circ sys disorders exc upper limb & toe w MCC
4.4798
12.0
15.3240
Yes
No
05
SURG
Amputation for circ sys disorders exc upper limb & toe w CC
2.6706
8.3
10.4241
Yes
No
05
SURG
Amputation for circ sys disorders exc upper limb & toe w/o CC/MCC
1.5740
5.6
6.8242
Yes
No
05
SURG
Permanent cardiac pacemaker implant w MCC
3.7041
6.7
8.8243
Yes
No
05
SURG
Permanent cardiac pacemaker implant w CC
2.5934
3.8
5.1244
Yes
No
05
SURG
Permanent cardiac pacemaker implant w/o CC/MCC
2.0098
2.2
2.9245
No
No
05
SURG
AICD generator procedures
4.0022
2.1
3.2246
No
No
05
SURG
Perc cardiovasc proc w drug-eluting stent w MCC or 4+ vessels/stents
3.1498
3.6
5.3247
No
No
05
SURG
Perc cardiovasc proc w drug-eluting stent w/o MCC
1.9134
1.7
2.2248
No
No
05
SURG
Perc cardiovasc proc w non-drug-eluting stent w MCC or 4+ ves/stents
2.8065
4.2
6.0249
No
No
05
SURG
Perc cardiovasc proc w non-drug-eluting stent w/o MCC
1.6397
1.9
2.5250
No
No
05
SURG
Perc cardiovasc proc w/o coronary artery stent w MCC
2.9923
5.4
7.8251
No
No
05
SURG
Perc cardiovasc proc w/o coronary artery stent w/o MCC
1.6023
2.1
2.8252
No
No
05
SURG
Other vascular procedures w MCC
2.9526
5.5
8.5253
No
No
05
SURG
Other vascular procedures w CC
2.2593
4.2
6.0254
No
No
05
SURG
Other vascular procedures w/o CC/MCC
1.5485
2.0
2.7255
Yes
No
05
SURG
Upper limb & toe amputation for circ system disorders w MCC
2.4040
7.1
9.7( print page 23825)256
Yes
No
05
SURG
Upper limb & toe amputation for circ system disorders w CC
1.5895
5.8
7.5257
Yes
No
05
SURG
Upper limb & toe amputation for circ system disorders w/o CC/MCC
1.0216
3.6
4.8258
No
No
05
SURG
Cardiac pacemaker device replacement w MCC
2.8434
5.4
7.4259
No
No
05
SURG
Cardiac pacemaker device replacement w/o MCC
1.6944
2.0
2.8260
No
No
05
SURG
Cardiac pacemaker revision except device replacement w MCC
3.4221
8.1
11.2261
No
No
05
SURG
Cardiac pacemaker revision except device replacement w CC
1.4398
3.0
4.2262
No
No
05
SURG
Cardiac pacemaker revision except device replacement w/o CC/MCC
1.0173
2.0
2.6263
No
No
05
SURG
Vein ligation & stripping
1.5392
3.4
5.4264
Yes
No
05
SURG
Other circulatory system O.R. procedures
2.5265
5.8
8.9265
No
No
05
SURG
AICD lead procedures
2.2140
2.2
3.5280
Yes
No
05
MED
Acute myocardial infarction, discharged alive w MCC
1.9395
5.8
7.3281
Yes
No
05
MED
Acute myocardial infarction, discharged alive w CC
1.2210
3.9
4.8282
Yes
No
05
MED
Acute myocardial infarction, discharged alive w/o CC/MCC
0.8698
2.6
3.2283
No
No
05
MED
Acute myocardial infarction, expired w MCC
1.6979
3.4
5.5284
No
No
05
MED
Acute myocardial infarction, expired w CC
0.9130
2.2
3.2285
No
No
05
MED
Acute myocardial infarction, expired w/o CC/MCC
0.6059
1.7
2.2286
No
No
05
MED
Circulatory disorders except AMI, w card cath w MCC
1.9745
5.2
6.9287
No
No
05
MED
Circulatory disorders except AMI, w card cath w/o MCC
1.0225
2.4
3.1288
Yes
No
05
MED
Acute & subacute endocarditis w MCC
3.0720
9.2
11.8289
Yes
No
05
MED
Acute & subacute endocarditis w CC
1.9524
7.0
8.7290
Yes
No
05
MED
Acute & subacute endocarditis w/o CC/MCC
1.4507
5.2
6.5291
Yes
No
05
MED
Heart failure & shock w MCC
1.4576
5.0
6.5292
Yes
No
05
MED
Heart failure & shock w CC
1.0053
4.1
5.0293
Yes
No
05
MED
Heart failure & shock w/o CC/MCC
0.7205
3.1
3.7294
No
No
05
MED
Deep vein thrombophlebitis w CC/MCC
0.9564
4.6
5.5295
No
No
05
MED
Deep vein thrombophlebitis w/o CC/MCC
0.6347
3.7
4.3296
No
No
05
MED
Cardiac arrest, unexplained w MCC
1.1910
1.9
3.0297
No
No
05
MED
Cardiac arrest, unexplained w CC
0.6502
1.4
1.8298
No
No
05
MED
Cardiac arrest, unexplained w/o CC/MCC
0.4438
1.1
1.3299
Yes
No
05
MED
Peripheral vascular disorders w MCC
1.4326
5.0
6.7300
Yes
No
05
MED
Peripheral vascular disorders w CC
0.9245
4.1
5.0301
Yes
No
05
MED
Peripheral vascular disorders w/o CC/MCC
0.6580
3.0
3.7302
No
No
05
MED
Atherosclerosis w MCC
1.0307
3.2
4.4303
No
No
05
MED
Atherosclerosis w/o MCC
0.5666
2.0
2.5304
No
No
05
MED
Hypertension w MCC
1.0808
3.9
5.2305
No
No
05
MED
Hypertension w/o MCC
0.5900
2.3
2.9306
No
No
05
MED
Cardiac congenital & valvular disorders w MCC
1.5655
4.4
6.3307
No
No
05
MED
Cardiac congenital & valvular disorders w/o MCC
0.7476
2.7
3.4308
No
No
05
MED
Cardiac arrhythmia & conduction disorders w MCC
1.2981
4.1
5.5309
No
No
05
MED
Cardiac arrhythmia & conduction disorders w CC
0.8320
3.1
3.9( print page 23826)310
No
No
05
MED
Cardiac arrhythmia & conduction disorders w/o CC/MCC
0.5829
2.3
2.8311
No
No
05
MED
Angina pectoris
0.4969
1.9
2.3312
No
No
05
MED
Syncope & collapse
0.7082
2.5
3.1313
No
No
05
MED
Chest pain
0.5312
1.7
2.1314
Yes
No
05
MED
Other circulatory system diagnoses w MCC
1.7517
5.0
7.0315
Yes
No
05
MED
Other circulatory system diagnoses w CC
0.9922
3.5
4.6316
Yes
No
05
MED
Other circulatory system diagnoses w/o CC/MCC
0.6513
2.4
3.0326
Yes
No
06
SURG
Stomach, esophageal & duodenal proc w MCC
5.8025
13.2
17.1327
Yes
No
06
SURG
Stomach, esophageal & duodenal proc w CC
2.8389
7.8
10.1328
Yes
No
06
SURG
Stomach, esophageal & duodenal proc w/o CC/MCC
1.4576
3.2
4.4329
Yes
No
06
SURG
Major small & large bowel procedures w MCC
5.1793
12.8
16.0330
Yes
No
06
SURG
Major small & large bowel procedures w CC
2.5644
8.3
9.7331
Yes
No
06
SURG
Major small & large bowel procedures w/o CC/MCC
1.6250
5.2
5.9332
Yes
No
06
SURG
Rectal resection w MCC
4.5358
12.0
14.3333
Yes
No
06
SURG
Rectal resection w CC
2.4487
7.7
8.8334
Yes
No
06
SURG
Rectal resection w/o CC/MCC
1.6247
4.7
5.5335
Yes
No
06
SURG
Peritoneal adhesiolysis w MCC
4.0903
11.6
14.1336
Yes
No
06
SURG
Peritoneal adhesiolysis w CC
2.2387
7.5
9.1337
Yes
No
06
SURG
Peritoneal adhesiolysis w/o CC/MCC
1.4519
4.4
5.6338
No
No
06
SURG
Appendectomy w complicated principal diag w MCC
3.1787
8.8
10.7339
No
No
06
SURG
Appendectomy w complicated principal diag w CC
1.8625
6.0
7.0340
No
No
06
SURG
Appendectomy w complicated principal diag w/o CC/MCC
1.2267
3.5
4.2341
No
No
06
SURG
Appendectomy w/o complicated principal diag w MCC
2.1659
5.3
7.1342
No
No
06
SURG
Appendectomy w/o complicated principal diag w CC
1.3154
3.2
4.1343
No
No
06
SURG
Appendectomy w/o complicated principal diag w/o CC/MCC
0.9067
1.8
2.2344
No
No
06
SURG
Minor small & large bowel procedures w MCC
3.0822
9.2
11.8345
No
No
06
SURG
Minor small & large bowel procedures w CC
1.6391
6.2
7.2346
No
No
06
SURG
Minor small & large bowel procedures w/o CC/MCC
1.1869
4.4
4.9347
No
No
06
SURG
Anal & stomal procedures w MCC
2.1823
6.4
8.8348
No
No
06
SURG
Anal & stomal procedures w CC
1.2860
4.4
5.7349
No
No
06
SURG
Anal & stomal procedures w/o CC/MCC
0.7681
2.4
3.1350
No
No
06
SURG
Inguinal & femoral hernia procedures w MCC
2.2486
5.8
8.0351
No
No
06
SURG
Inguinal & femoral hernia procedures w CC
1.2638
3.4
4.6352
No
No
06
SURG
Inguinal & femoral hernia procedures w/o CC/MCC
0.8131
2.0
2.5353
No
No
06
SURG
Hernia procedures except inguinal & femoral w MCC
2.4935
6.4
8.4354
No
No
06
SURG
Hernia procedures except inguinal & femoral w CC
1.4046
4.0
5.1355
No
No
06
SURG
Hernia procedures except inguinal & femoral w/o CC/MCC
0.9675
2.4
2.9356
Yes
No
06
SURG
Other digestive system O.R. procedures w MCC
3.8574
9.5
12.9357
Yes
No
06
SURG
Other digestive system O.R. procedures w CC
2.1703
6.2
8.1( print page 23827)358
Yes
No
06
SURG
Other digestive system O.R. procedures w/o CC/MCC
1.3493
3.3
4.5368
No
No
06
MED
Major esophageal disorders w MCC
1.6184
5.1
6.6369
No
No
06
MED
Major esophageal disorders w CC
1.0703
3.8
4.7370
No
No
06
MED
Major esophageal disorders w/o CC/MCC
0.7835
2.8
3.4371
Yes
No
06
MED
Major gastrointestinal disorders & peritoneal infections w MCC
1.9062
6.7
8.7372
Yes
No
06
MED
Major gastrointestinal disorders & peritoneal infections w CC
1.3025
5.6
6.9373
Yes
No
06
MED
Major gastrointestinal disorders & peritoneal infections w/o CC/MCC
0.8646
4.2
4.9374
Yes
No
06
MED
Digestive malignancy w MCC
1.9057
6.3
8.6375
Yes
No
06
MED
Digestive malignancy w CC
1.2523
4.6
6.0376
Yes
No
06
MED
Digestive malignancy w/o CC/MCC
0.8820
3.2
4.2377
Yes
No
06
MED
G.I. hemorrhage w MCC
1.6069
4.9
6.4378
Yes
No
06
MED
G.I. hemorrhage w CC
1.0048
3.7
4.4379
Yes
No
06
MED
G.I. hemorrhage w/o CC/MCC
0.7567
2.9
3.4380
Yes
No
06
MED
Complicated peptic ulcer w MCC
1.7995
5.6
7.3381
Yes
No
06
MED
Complicated peptic ulcer w CC
1.1138
4.2
5.2382
Yes
No
06
MED
Complicated peptic ulcer w/o CC/MCC
0.8208
3.1
3.7383
No
No
06
MED
Uncomplicated peptic ulcer w MCC
1.1789
4.4
5.5384
No
No
06
MED
Uncomplicated peptic ulcer w/o MCC
0.7818
3.1
3.7385
No
No
06
MED
Inflammatory bowel disease w MCC
1.8541
6.5
8.8386
No
No
06
MED
Inflammatory bowel disease w CC
1.0601
4.5
5.7387
No
No
06
MED
Inflammatory bowel disease w/o CC/MCC
0.7746
3.5
4.3388
Yes
No
06
MED
G.I. obstruction w MCC
1.5392
5.5
7.3389
Yes
No
06
MED
G.I. obstruction w CC
0.9244
4.0
5.0390
Yes
No
06
MED
G.I. obstruction w/o CC/MCC
0.6333
3.0
3.6391
No
No
06
MED
Esophagitis, gastroent & misc digest disorders w MCC
1.0810
3.9
5.2392
No
No
06
MED
Esophagitis, gastroent & misc digest disorders w/o MCC
0.6685
2.8
3.5393
No
No
06
MED
Other digestive system diagnoses w MCC
1.5367
4.9
6.9394
No
No
06
MED
Other digestive system diagnoses w CC
0.9489
3.8
4.8395
No
No
06
MED
Other digestive system diagnoses w/o CC/MCC
0.6745
2.6
3.3405
Yes
No
07
SURG
Pancreas, liver & shunt procedures w MCC
5.6481
12.4
17.0406
Yes
No
07
SURG
Pancreas, liver & shunt procedures w CC
2.7895
7.0
9.2407
Yes
No
07
SURG
Pancreas, liver & shunt procedures w/o CC/MCC
1.8411
4.2
5.5408
No
No
07
SURG
Biliary tract proc except only cholecyst w or w/o c.d.e. w MCC
4.2539
12.1
15.0409
No
No
07
SURG
Biliary tract proc except only cholecyst w or w/o c.d.e. w CC
2.5819
8.3
9.8410
No
No
07
SURG
Biliary tract proc except only cholecyst w or w/o c.d.e. w/o CC/MCC
1.6374
5.4
6.5411
No
No
07
SURG
Cholecystectomy w c.d.e. w MCC
3.7602
10.4
12.4412
No
No
07
SURG
Cholecystectomy w c.d.e. w CC
2.3633
7.5
8.6413
No
No
07
SURG
Cholecystectomy w c.d.e. w/o CC/MCC
1.6896
5.0
5.9414
Yes
No
07
SURG
Cholecystectomy except by laparoscope w/o c.d.e. w MCC
3.5777
9.7
11.7415
Yes
No
07
SURG
Cholecystectomy except by laparoscope w/o c.d.e. w CC
2.0372
6.5
7.6416
Yes
No
07
SURG
Cholecystectomy except by laparoscope w/o c.d.e. w/o CC/MCC
1.3290
4.1
4.8417
No
No
07
SURG
Laparoscopic cholecystectomy w/o c.d.e. w MCC
2.4851
6.5
8.4418
No
No
07
SURG
Laparoscopic cholecystectomy w/o c.d.e. w CC
1.6541
4.5
5.6( print page 23828)419
No
No
07
SURG
Laparoscopic cholecystectomy w/o c.d.e. w/o CC/MCC
1.1296
2.5
3.2420
No
No
07
SURG
Hepatobiliary diagnostic procedures w MCC
4.0976
9.9
13.7421
No
No
07
SURG
Hepatobiliary diagnostic procedures w CC
1.8978
5.6
7.7422
No
No
07
SURG
Hepatobiliary diagnostic procedures w/o CC/MCC
1.2275
3.2
4.4423
No
No
07
SURG
Other hepatobiliary or pancreas O.R. procedures w MCC
4.5535
11.8
15.9424
No
No
07
SURG
Other hepatobiliary or pancreas O.R. procedures w CC
2.5159
7.9
10.4425
No
No
07
SURG
Other hepatobiliary or pancreas O.R. procedures w/o CC/MCC
1.3760
4.0
5.4432
No
No
07
MED
Cirrhosis & alcoholic hepatitis w MCC
1.6776
5.2
7.0433
No
No
07
MED
Cirrhosis & alcoholic hepatitis w CC
0.9378
3.8
4.9434
No
No
07
MED
Cirrhosis & alcoholic hepatitis w/o CC/MCC
0.6551
2.9
3.7435
No
No
07
MED
Malignancy of hepatobiliary system or pancreas w MCC
1.7117
5.7
7.6436
No
No
07
MED
Malignancy of hepatobiliary system or pancreas w CC
1.1892
4.5
5.8437
No
No
07
MED
Malignancy of hepatobiliary system or pancreas w/o CC/MCC
0.9506
3.2
4.3438
No
No
07
MED
Disorders of pancreas except malignancy w MCC
1.6992
5.5
7.5439
No
No
07
MED
Disorders of pancreas except malignancy w CC
1.0223
4.2
5.3440
No
No
07
MED
Disorders of pancreas except malignancy w/o CC/MCC
0.6963
3.2
3.8441
Yes
No
07
MED
Disorders of liver except malig, cirr, alc hepa w MCC
1.6580
5.1
7.0442
Yes
No
07
MED
Disorders of liver except malig, cirr, alc hepa w CC
0.9825
3.9
5.1443
Yes
No
07
MED
Disorders of liver except malig, cirr, alc hepa w/o CC/MCC
0.6945
3.0
3.8444
No
No
07
MED
Disorders of the biliary tract w MCC
1.5579
5.0
6.6445
No
No
07
MED
Disorders of the biliary tract w CC
1.0375
3.8
4.7446
No
No
07
MED
Disorders of the biliary tract w/o CC/MCC
0.7225
2.6
3.3453
No
No
08
SURG
Combined anterior/posterior spinal fusion w MCC
9.8724
12.0
15.7454
No
No
08
SURG
Combined anterior/posterior spinal fusion w CC
7.0370
6.5
8.0455
No
No
08
SURG
Combined anterior/posterior spinal fusion w/o CC/MCC
5.1744
3.7
4.4456
No
No
08
SURG
Spinal fus exc cerv w spinal curv/malig/infec or 9+ fus w MCC
8.5225
11.6
14.7457
No
No
08
SURG
Spinal fus exc cerv w spinal curv/malig/infec or 9+ fus w CC
5.6672
6.2
7.5458
No
No
08
SURG
Spinal fus exc cerv w spinal curv/malig/infec or 9+ fus w/o CC/MCC
4.7056
4.0
4.5459
Yes
No
08
SURG
Spinal fusion except cervical w MCC
5.9847
7.6
9.4460
Yes
No
08
SURG
Spinal fusion except cervical w/o MCC
3.5746
3.6
4.2461
No
No
08
SURG
Bilateral or multiple major joint procs of lower extremity w MCC
4.5636
6.8
8.4462
No
No
08
SURG
Bilateral or multiple major joint procs of lower extremity w/o MCC
3.1564
3.9
4.2463
Yes
No
08
SURG
Wnd debrid & skn grft exc hand, for musculo-conn tiss dis w MCC
4.6669
12.0
16.6464
Yes
No
08
SURG
Wnd debrid & skn grft exc hand, for musculo-conn tiss dis w CC
2.6117
7.7
10.2465
Yes
No
08
SURG
Wnd debrid & skn grft exc hand, for musculo-conn tiss dis w/o CC/MCC
1.4955
4.4
5.9466
Yes
No
08
SURG
Revision of hip or knee replacement w MCC
4.5564
7.4
9.2( print page 23829)467
Yes
No
08
SURG
Revision of hip or knee replacement w CC
3.0720
4.8
5.5468
Yes
No
08
SURG
Revision of hip or knee replacement w/o CC/MCC
2.4597
3.6
3.9469
Yes
No
08
SURG
Major joint replacement or reattachment of lower extremity w MCC
3.2979
6.9
8.2470
Yes
No
08
SURG
Major joint replacement or reattachment of lower extremity w/o MCC
2.0144
3.6
3.9471
No
No
08
SURG
Cervical spinal fusion w MCC
4.4277
7.0
9.8472
No
No
08
SURG
Cervical spinal fusion w CC
2.6200
2.8
4.1473
No
No
08
SURG
Cervical spinal fusion w/o CC/MCC
1.9213
1.6
2.0474
Yes
No
08
SURG
Amputation for musculoskeletal sys & conn tissue dis w MCC
3.4435
9.5
12.6475
Yes
No
08
SURG
Amputation for musculoskeletal sys & conn tissue dis w CC
1.9768
6.5
8.4476
Yes
No
08
SURG
Amputation for musculoskeletal sys & conn tissue dis w/o CC/MCC
1.1001
3.7
4.8477
Yes
Yes
08
SURG
Biopsies of musculoskeletal system & connective tissue w MCC
3.2545
8.9
11.9478
Yes
Yes
08
SURG
Biopsies of musculoskeletal system & connective tissue w CC
2.1266
4.6
6.6479
Yes
Yes
08
SURG
Biopsies of musculoskeletal system & connective tissue w/o CC/MCC
1.4779
1.9
2.8480
Yes
Yes
08
SURG
Hip & femur procedures except major joint w MCC
2.9050
7.8
9.3481
Yes
Yes
08
SURG
Hip & femur procedures except major joint w CC
1.8204
5.4
5.9482
Yes
Yes
08
SURG
Hip & femur procedures except major joint w/o CC/MCC
1.4976
4.5
4.8483
Yes
No
08
SURG
Major joint & limb reattachment proc of upper extremity w CC/MCC
2.2601
3.4
4.2484
Yes
No
08
SURG
Major joint & limb reattachment proc of upper extremity w/o CC/MCC
1.7535
2.1
2.4485
No
No
08
SURG
Knee procedures w pdx of infection w MCC
3.3033
9.8
12.1486
No
No
08
SURG
Knee procedures w pdx of infection w CC
2.1664
6.8
8.0487
No
No
08
SURG
Knee procedures w pdx of infection w/o CC/MCC
1.5507
4.9
5.7488
Yes
No
08
SURG
Knee procedures w/o pdx of infection w CC/MCC
1.6836
4.1
5.2489
Yes
No
08
SURG
Knee procedures w/o pdx of infection w/o CC/MCC
1.1604
2.6
3.0490
No
No
08
SURG
Back & neck proc exc spinal fusion w CC/MCC or disc device/neurostim
1.7221
3.0
4.3491
No
No
08
SURG
Back & neck proc exc spinal fusion w/o CC/MCC
0.9413
1.8
2.2492
Yes
Yes
08
SURG
Lower extrem & humer proc except hip,foot,femur w MCC
2.7705
6.8
8.5493
Yes
Yes
08
SURG
Lower extrem & humer proc except hip,foot,femur w CC
1.7631
4.3
5.3494
Yes
Yes
08
SURG
Lower extrem & humer proc except hip,foot,femur w/o CC/MCC
1.2385
2.8
3.4495
Yes
No
08
SURG
Local excision & removal int fix devices exc hip & femur w MCC
3.1782
8.1
11.0496
Yes
No
08
SURG
Local excision & removal int fix devices exc hip & femur w CC
1.7775
4.6
6.0497
Yes
No
08
SURG
Local excision & removal int fix devices exc hip & femur w/o CC/MCC
1.1277
2.3
3.0498
No
No
08
SURG
Local excision & removal int fix devices of hip & femur w CC/MCC
2.0274
5.5
7.9499
No
No
08
SURG
Local excision & removal int fix devices of hip & femur w/o CC/MCC
0.9097
2.3
3.0500
Yes
Yes
08
SURG
Soft tissue procedures w MCC
2.8423
7.8
10.8501
Yes
Yes
08
SURG
Soft tissue procedures w CC
1.4718
4.5
6.0502
Yes
Yes
08
SURG
Soft tissue procedures w/o CC/MCC
0.9585
2.3
2.9503
No
No
08
SURG
Foot procedures w MCC
2.3059
7.2
9.5( print page 23830)504
No
No
08
SURG
Foot procedures w CC
1.4725
5.1
6.5505
No
No
08
SURG
Foot procedures w/o CC/MCC
0.9882
2.6
3.4506
No
No
08
SURG
Major thumb or joint procedures
1.0286
2.5
3.4507
No
No
08
SURG
Major shoulder or elbow joint procedures w CC/MCC
1.7188
3.7
5.1508
No
No
08
SURG
Major shoulder or elbow joint procedures w/o CC/MCC
1.1156
1.7
2.1509
No
No
08
SURG
Arthroscopy
1.1762
2.0
3.1510
Yes
No
08
SURG
Shoulder,elbow or forearm proc, exc major joint proc w MCC
1.9973
4.9
6.4511
Yes
No
08
SURG
Shoulder,elbow or forearm proc, exc major joint proc w CC
1.3434
3.2
4.0512
Yes
No
08
SURG
Shoulder,elbow or forearm proc, exc major joint proc w/o CC/MCC
0.9533
1.8
2.2513
No
No
08
SURG
Hand or wrist proc, except major thumb or joint proc w CC/MCC
1.2813
3.6
5.0514
No
No
08
SURG
Hand or wrist proc, except major thumb or joint proc w/o CC/MCC
0.8067
2.1
2.8515
Yes
Yes
08
SURG
Other musculoskelet sys & conn tiss O.R. proc w MCC
3.0601
7.9
10.4516
Yes
Yes
08
SURG
Other musculoskelet sys & conn tiss O.R. proc w CC
1.8073
4.5
6.0517
Yes
Yes
08
SURG
Other musculoskelet sys & conn tiss O.R. proc w/o CC/MCC
1.3326
2.1
3.0533
Yes
No
08
MED
Fractures of femur w MCC
1.4207
4.8
6.7534
Yes
No
08
MED
Fractures of femur w/o MCC
0.7318
3.3
4.0535
Yes
No
08
MED
Fractures of hip & pelvis w MCC
1.3327
4.8
6.2536
Yes
No
08
MED
Fractures of hip & pelvis w/o MCC
0.6934
3.4
3.9537
No
No
08
MED
Sprains, strains, & dislocations of hip, pelvis & thigh w CC/MCC
0.8871
3.6
4.5538
No
No
08
MED
Sprains, strains, & dislocations of hip, pelvis & thigh w/o CC/MCC
0.5787
2.7
3.2539
Yes
No
08
MED
Osteomyelitis w MCC
2.0097
7.5
9.7540
Yes
No
08
MED
Osteomyelitis w CC
1.3457
5.7
7.1541
Yes
No
08
MED
Osteomyelitis w/o CC/MCC
0.9285
4.2
5.4542
Yes
No
08
MED
Pathological fractures & musculoskelet & conn tiss malig w MCC
1.8953
6.7
8.8543
Yes
No
08
MED
Pathological fractures & musculoskelet & conn tiss malig w CC
1.1263
4.8
5.9544
Yes
No
08
MED
Pathological fractures & musculoskelet & conn tiss malig w/o CC/MCC
0.7672
3.7
4.4545
Yes
No
08
MED
Connective tissue disorders w MCC
2.3477
6.5
9.1546
Yes
No
08
MED
Connective tissue disorders w CC
1.0951
4.4
5.5547
Yes
No
08
MED
Connective tissue disorders w/o CC/MCC
0.7224
3.1
3.8548
No
No
08
MED
Septic arthritis w MCC
1.8776
6.7
8.9549
No
No
08
MED
Septic arthritis w CC
1.1590
5.1
6.4550
No
No
08
MED
Septic arthritis w/o CC/MCC
0.8006
3.7
4.5551
Yes
No
08
MED
Medical back problems w MCC
1.5261
5.4
7.1552
Yes
No
08
MED
Medical back problems w/o MCC
0.7623
3.4
4.1553
No
No
08
MED
Bone diseases & arthropathies w MCC
1.0978
4.7
6.0554
No
No
08
MED
Bone diseases & arthropathies w/o MCC
0.6305
3.0
3.7555
No
No
08
MED
Signs & symptoms of musculoskeletal system & conn tissue w MCC
1.0014
3.6
4.8556
No
No
08
MED
Signs & symptoms of musculoskeletal system & conn tissue w/o MCC
0.5738
2.5
3.1557
Yes
No
08
MED
Tendonitis, myositis & bursitis w MCC
1.4264
5.2
6.6558
Yes
No
08
MED
Tendonitis, myositis & bursitis w/o MCC
0.8009
3.5
4.3559
Yes
No
08
MED
Aftercare, musculoskeletal system & connective tissue w MCC
1.7085
5.3
7.6( print page 23831)560
Yes
No
08
MED
Aftercare, musculoskeletal system & connective tissue w CC
0.9491
3.6
4.7561
Yes
No
08
MED
Aftercare, musculoskeletal system & connective tissue w/o CC/MCC
0.5794
2.1
2.8562
Yes
No
08
MED
Fx, sprn, strn & disl except femur, hip, pelvis & thigh w MCC
1.3933
4.9
6.4563
Yes
No
08
MED
Fx, sprn, strn & disl except femur, hip, pelvis & thigh w/o MCC
0.6749
3.1
3.7564
No
No
08
MED
Other musculoskeletal sys & connective tissue diagnoses w MCC
1.4053
5.2
7.0565
No
No
08
MED
Other musculoskeletal sys & connective tissue diagnoses w CC
0.8848
3.9
5.0566
No
No
08
MED
Other musculoskeletal sys & connective tissue diagnoses w/o CC/MCC
0.6673
3.0
3.7573
Yes
No
09
SURG
Skin graft &/or debrid for skn ulcer or cellulitis w MCC
3.1703
9.6
13.1574
Yes
No
09
SURG
Skin graft &/or debrid for skn ulcer or cellulitis w CC
1.9362
7.1
9.3575
Yes
No
09
SURG
Skin graft &/or debrid for skn ulcer or cellulitis w/o CC/MCC
1.1176
4.7
5.9576
No
No
09
SURG
Skin graft &/or debrid exc for skin ulcer or cellulitis w MCC
3.4522
8.4
13.0577
No
No
09
SURG
Skin graft &/or debrid exc for skin ulcer or cellulitis w CC
1.5788
4.2
6.1578
No
No
09
SURG
Skin graft &/or debrid exc for skin ulcer or cellulitis w/o CC/MCC
0.9803
2.4
3.3579
Yes
No
09
SURG
Other skin, subcut tiss & breast proc w MCC
2.7821
7.8
10.7580
Yes
No
09
SURG
Other skin, subcut tiss & breast proc w CC
1.4093
3.7
5.5581
Yes
No
09
SURG
Other skin, subcut tiss & breast proc w/o CC/MCC
0.8606
1.9
2.6582
No
No
09
SURG
Mastectomy for malignancy w CC/MCC
0.9682
2.1
2.8583
No
No
09
SURG
Mastectomy for malignancy w/o CC/MCC
0.7498
1.6
1.8584
No
No
09
SURG
Breast biopsy, local excision & other breast procedures w CC/MCC
1.4344
4.0
6.0585
No
No
09
SURG
Breast biopsy, local excision & other breast procedures w/o CC/MCC
0.7995
1.7
2.2592
Yes
No
09
MED
Skin ulcers w MCC
1.7469
6.6
8.9593
Yes
No
09
MED
Skin ulcers w CC
1.1021
5.2
6.4594
Yes
No
09
MED
Skin ulcers w/o CC/MCC
0.7871
4.1
5.1595
No
No
09
MED
Major skin disorders w MCC
1.8159
6.2
8.3596
No
No
09
MED
Major skin disorders w/o MCC
0.8200
3.8
4.8597
No
No
09
MED
Malignant breast disorders w MCC
1.6001
5.9
8.2598
No
No
09
MED
Malignant breast disorders w CC
1.0812
4.3
5.7599
No
No
09
MED
Malignant breast disorders w/o CC/MCC
0.7309
2.7
3.7600
No
No
09
MED
Non-malignant breast disorders w CC/MCC
0.9433
4.1
5.1601
No
No
09
MED
Non-malignant breast disorders w/o CC/MCC
0.6539
3.1
3.9602
Yes
No
09
MED
Cellulitis w MCC
1.3980
5.5
7.0603
Yes
No
09
MED
Cellulitis w/o MCC
0.7988
3.9
4.7604
No
No
09
MED
Trauma to the skin, subcut tiss & breast w MCC
1.1875
4.3
5.7605
No
No
09
MED
Trauma to the skin, subcut tiss & breast w/o MCC
0.6739
2.8
3.5606
No
No
09
MED
Minor skin disorders w MCC
1.2415
4.4
6.3607
No
No
09
MED
Minor skin disorders w/o MCC
0.6434
2.9
3.8614
No
No
10
SURG
Adrenal & pituitary procedures w CC/MCC
2.5046
5.1
7.0615
No
No
10
SURG
Adrenal & pituitary procedures w/o CC/MCC
1.3782
2.7
3.2616
Yes
No
10
SURG
Amputat of lower limb for endocrine, nutrit, & metabol dis w MCC
4.6284
13.3
16.9( print page 23832)617
Yes
No
10
SURG
Amputat of lower limb for endocrine, nutrit, & metabol dis w CC
2.0940
7.0
8.8618
Yes
No
10
SURG
Amputat of lower limb for endocrine, nutrit, & metabol dis w/o CC/MCC
1.3234
5.1
6.4619
No
No
10
SURG
O.R. procedures for obesity w MCC
3.3383
5.2
8.2620
No
No
10
SURG
O.R. procedures for obesity w CC
1.8739
2.9
3.7621
No
No
10
SURG
O.R. procedures for obesity w/o CC/MCC
1.4269
1.9
2.2622
Yes
No
10
SURG
Skin grafts & wound debrid for endoc, nutrit & metab dis w MCC
3.1268
9.4
13.2623
Yes
No
10
SURG
Skin grafts & wound debrid for endoc, nutrit & metab dis w CC
1.8728
6.7
8.6624
Yes
No
10
SURG
Skin grafts & wound debrid for endoc, nutrit & metab dis w/o CC/MCC
1.0877
4.8
6.0625
No
No
10
SURG
Thyroid, parathyroid & thyroglossal procedures w MCC
2.1260
4.7
7.1626
No
No
10
SURG
Thyroid, parathyroid & thyroglossal procedures w CC
1.1284
2.1
3.1627
No
No
10
SURG
Thyroid, parathyroid & thyroglossal procedures w/o CC/MCC
0.7378
1.3
1.5628
Yes
No
10
SURG
Other endocrine, nutrit & metab O.R. proc w MCC
3.2732
7.5
11.2629
Yes
No
10
SURG
Other endocrine, nutrit & metab O.R. proc w CC
2.2931
6.9
8.7630
Yes
No
10
SURG
Other endocrine, nutrit & metab O.R. proc w/o CC/MCC
1.5069
4.0
5.5637
Yes
No
10
MED
Diabetes w MCC
1.3538
4.5
6.1638
Yes
No
10
MED
Diabetes w CC
0.8135
3.4
4.3639
Yes
No
10
MED
Diabetes w/o CC/MCC
0.5577
2.5
3.0640
Yes
No
10
MED
Nutritional & misc metabolic disorders w MCC
1.1105
3.9
5.4641
Yes
No
10
MED
Nutritional & misc metabolic disorders w/o MCC
0.6798
3.1
3.8642
No
No
10
MED
Inborn errors of metabolism
1.0169
3.7
5.2643
Yes
No
10
MED
Endocrine disorders w MCC
1.6408
5.8
7.6644
Yes
No
10
MED
Endocrine disorders w CC
1.0437
4.4
5.5645
Yes
No
10
MED
Endocrine disorders w/o CC/MCC
0.7164
3.1
3.9652
No
No
11
SURG
Kidney transplant
2.9787
6.6
7.8653
Yes
No
11
SURG
Major bladder procedures w MCC
5.8091
13.6
16.9654
Yes
No
11
SURG
Major bladder procedures w CC
2.9531
8.7
9.9655
Yes
No
11
SURG
Major bladder procedures w/o CC/MCC
2.0241
5.7
6.5656
No
No
11
SURG
Kidney & ureter procedures for neoplasm w MCC
3.2762
8.0
10.1657
No
No
11
SURG
Kidney & ureter procedures for neoplasm w CC
1.8655
5.0
6.0658
No
No
11
SURG
Kidney & ureter procedures for neoplasm w/o CC/MCC
1.3790
3.3
3.7659
Yes
No
11
SURG
Kidney & ureter procedures for non-neoplasm w MCC
3.3225
8.0
11.2660
Yes
No
11
SURG
Kidney & ureter procedures for non-neoplasm w CC
1.8913
4.8
6.5661
Yes
No
11
SURG
Kidney & ureter procedures for non-neoplasm w/o CC/MCC
1.2600
2.6
3.3662
No
No
11
SURG
Minor bladder procedures w MCC
2.7078
7.4
10.3663
No
No
11
SURG
Minor bladder procedures w CC
1.4443
3.7
5.3664
No
No
11
SURG
Minor bladder procedures w/o CC/MCC
0.9940
1.6
2.1665
No
No
11
SURG
Prostatectomy w MCC
2.5635
8.2
11.1666
No
No
11
SURG
Prostatectomy w CC
1.5553
4.3
6.4667
No
No
11
SURG
Prostatectomy w/o CC/MCC
0.8259
2.1
2.9668
No
No
11
SURG
Transurethral procedures w MCC
2.2348
6.2
8.5669
No
No
11
SURG
Transurethral procedures w CC
1.2049
3.1
4.4670
No
No
11
SURG
Transurethral procedures w/o CC/MCC
0.7672
1.9
2.5671
No
No
11
SURG
Urethral procedures w CC/MCC
1.4136
4.1
5.9672
No
No
11
SURG
Urethral procedures w/o CC/MCC
0.7962
1.9
2.5( print page 23833)673
No
No
11
SURG
Other kidney & urinary tract procedures w MCC
2.7645
5.8
9.7674
No
No
11
SURG
Other kidney & urinary tract procedures w CC
2.1527
4.6
7.2675
No
No
11
SURG
Other kidney & urinary tract procedures w/o CC/MCC
1.3137
1.5
2.1682
Yes
No
11
MED
Renal failure w MCC
1.6374
5.2
7.2683
Yes
No
11
MED
Renal failure w CC
1.1270
4.5
5.7684
Yes
No
11
MED
Renal failure w/o CC/MCC
0.7278
3.2
3.9685
No
No
11
MED
Admit for renal dialysis
0.8578
2.5
3.5686
No
No
11
MED
Kidney & urinary tract neoplasms w MCC
1.6240
5.6
7.6687
No
No
11
MED
Kidney & urinary tract neoplasms w CC
1.0719
4.1
5.4688
No
No
11
MED
Kidney & urinary tract neoplasms w/o CC/MCC
0.6816
2.5
3.3689
Yes
No
11
MED
Kidney & urinary tract infections w MCC
1.2271
4.9
6.2690
Yes
No
11
MED
Kidney & urinary tract infections w/o MCC
0.7559
3.5
4.2691
No
No
11
MED
Urinary stones w esw lithotripsy w CC/MCC
1.4503
2.9
4.0692
No
No
11
MED
Urinary stones w esw lithotripsy w/o CC/MCC
1.1528
1.9
2.4693
No
No
11
MED
Urinary stones w/o esw lithotripsy w MCC
1.1915
3.6
4.8694
No
No
11
MED
Urinary stones w/o esw lithotripsy w/o MCC
0.6573
2.0
2.6695
No
No
11
MED
Kidney & urinary tract signs & symptoms w MCC
1.1723
4.2
5.5696
No
No
11
MED
Kidney & urinary tract signs & symptoms w/o MCC
0.6308
2.6
3.3697
No
No
11
MED
Urethral stricture
0.6938
2.4
3.1698
Yes
No
11
MED
Other kidney & urinary tract diagnoses w MCC
1.4719
5.0
6.7699
Yes
No
11
MED
Other kidney & urinary tract diagnoses w CC
0.9700
3.7
4.8700
Yes
No
11
MED
Other kidney & urinary tract diagnoses w/o CC/MCC
0.6813
2.8
3.6707
No
No
12
SURG
Major male pelvic procedures w CC/MCC
1.6265
3.4
4.4708
No
No
12
SURG
Major male pelvic procedures w/o CC/MCC
1.1839
1.8
2.1709
No
No
12
SURG
Penis procedures w CC/MCC
1.8803
3.8
6.5710
No
No
12
SURG
Penis procedures w/o CC/MCC
1.2586
1.4
1.8711
No
No
12
SURG
Testes procedures w CC/MCC
2.0318
5.5
8.2712
No
No
12
SURG
Testes procedures w/o CC/MCC
0.8077
2.2
3.0713
No
No
12
SURG
Transurethral prostatectomy w CC/MCC
1.1188
2.9
4.2714
No
No
12
SURG
Transurethral prostatectomy w/o CC/MCC
0.6333
1.7
1.9715
No
No
12
SURG
Other male reproductive system O.R. proc for malignancy w CC/MCC
1.7120
3.9
6.3716
No
No
12
SURG
Other male reproductive system O.R. proc for malignancy w/o CC/MCC
0.9713
1.2
1.4717
No
No
12
SURG
Other male reproductive system O.R. proc exc malignancy w CC/MCC
1.8091
5.1
7.2718
No
No
12
SURG
Other male reproductive system O.R. proc exc malignancy w/o CC/MCC
0.7849
2.2
2.8722
No
No
12
MED
Malignancy, male reproductive system w MCC
1.5588
5.7
7.6723
No
No
12
MED
Malignancy, male reproductive system w CC
0.9901
4.1
5.3724
No
No
12
MED
Malignancy, male reproductive system w/o CC/MCC
0.6006
2.4
3.2725
No
No
12
MED
Benign prostatic hypertrophy w MCC
1.0462
4.2
5.5( print page 23834)726
No
No
12
MED
Benign prostatic hypertrophy w/o MCC
0.6675
2.7
3.5727
No
No
12
MED
Inflammation of the male reproductive system w MCC
1.3016
5.0
6.4728
No
No
12
MED
Inflammation of the male reproductive system w/o MCC
0.6911
3.3
4.0729
No
No
12
MED
Other male reproductive system diagnoses w CC/MCC
1.0993
4.0
5.6730
No
No
12
MED
Other male reproductive system diagnoses w/o CC/MCC
0.5963
2.4
3.1734
No
No
13
SURG
Pelvic evisceration, rad hysterectomy & rad vulvectomy w CC/MCC
2.3505
6.0
8.0735
No
No
13
SURG
Pelvic evisceration, rad hysterectomy & rad vulvectomy w/o CC/MCC
1.1311
2.9
3.4736
No
No
13
SURG
Uterine & adnexa proc for ovarian or adnexal malignancy w MCC
4.1736
11.2
13.8737
No
No
13
SURG
Uterine & adnexa proc for ovarian or adnexal malignancy w CC
1.9577
6.0
7.2738
No
No
13
SURG
Uterine & adnexa proc for ovarian or adnexal malignancy w/o CC/MCC
1.1577
3.5
3.9739
No
No
13
SURG
Uterine, adnexa proc for non-ovarian/adnexal malig w MCC
3.0131
7.8
10.2740
No
No
13
SURG
Uterine, adnexa proc for non-ovarian/adnexal malig w CC
1.4661
4.3
5.2741
No
No
13
SURG
Uterine, adnexa proc for non-ovarian/adnexal malig w/o CC/MCC
1.0021
2.7
3.0742
No
No
13
SURG
Uterine & adnexa proc for non-malignancy w CC/MCC
1.3433
3.5
4.5743
No
No
13
SURG
Uterine & adnexa proc for non-malignancy w/o CC/MCC
0.8469
2.0
2.3744
No
No
13
SURG
D&C, conization, laparoscopy & tubal interruption w CC/MCC
1.3918
4.1
5.8745
No
No
13
SURG
D&C, conization, laparoscopy & tubal interruption w/o CC/MCC
0.7460
2.1
2.6746
No
No
13
SURG
Vagina, cervix & vulva procedures w CC/MCC
1.2662
3.0
4.2747
No
No
13
SURG
Vagina, cervix & vulva procedures w/o CC/MCC
0.8403
1.6
1.9748
No
No
13
SURG
Female reproductive system reconstructive procedures
0.8193
1.5
1.7749
No
No
13
SURG
Other female reproductive system O.R. procedures w CC/MCC
2.4919
6.7
9.3750
No
No
13
SURG
Other female reproductive system O.R. procedures w/o CC/MCC
0.9660
2.5
3.1754
No
No
13
MED
Malignancy, female reproductive system w MCC
1.7520
6.2
8.3755
No
No
13
MED
Malignancy, female reproductive system w CC
1.0769
4.3
5.7756
No
No
13
MED
Malignancy, female reproductive system w/o CC/MCC
0.6327
2.5
3.1757
No
No
13
MED
Infections, female reproductive system w MCC
1.5775
6.5
8.1758
No
No
13
MED
Infections, female reproductive system w CC
1.0621
4.9
6.1759
No
No
13
MED
Infections, female reproductive system w/o CC/MCC
0.7646
3.6
4.5760
No
No
13
MED
Menstrual & other female reproductive system disorders w CC/MCC
0.7917
3.0
4.0761
No
No
13
MED
Menstrual & other female reproductive system disorders w/o CC/MCC
0.5008
1.9
2.4765
No
No
14
SURG
Cesarean section w CC/MCC
1.0606
4.0
5.0766
No
No
14
SURG
Cesarean section w/o CC/MCC
0.7486
3.0
3.2767
No
No
14
SURG
Vaginal delivery w sterilization &/or D&C
0.9741
2.6
3.4768
No
No
14
SURG
Vaginal delivery w O.R. proc except steril &/or D&C
1.7321
0.0
0.0( print page 23835)769
No
No
14
SURG
Postpartum & post abortion diagnoses w O.R. procedure
1.2935
3.2
4.6770
No
No
14
SURG
Abortion w D&C, aspiration curettage or hysterotomy
0.6677
1.6
2.2774
No
No
14
MED
Vaginal delivery w complicating diagnoses
0.6571
2.6
3.2775
No
No
14
MED
Vaginal delivery w/o complicating diagnoses
0.4830
2.0
2.2776
No
No
14
MED
Postpartum & post abortion diagnoses w/o O.R. procedure
0.6192
2.5
3.3777
No
No
14
MED
Ectopic pregnancy
0.7721
1.9
2.2778
No
No
14
MED
Threatened abortion
0.4373
2.0
3.0779
No
No
14
MED
Abortion w/o D&C
0.4871
1.6
2.1780
No
No
14
MED
False labor
0.1962
1.3
1.5781
No
No
14
MED
Other antepartum diagnoses w medical complications
0.6154
2.6
3.8782
No
No
14
MED
Other antepartum diagnoses w/o medical complications
0.3926
1.7
2.5789
No
No
15
MED
Neonates, died or transferred to another acute care facility
1.4227
0.0
0.0790
No
No
15
MED
Extreme immaturity or respiratory distress syndrome, neonate
4.6916
0.0
0.0791
No
No
15
MED
Prematurity w major problems
3.2042
0.0
0.0792
No
No
15
MED
Prematurity w/o major problems
1.9334
0.0
0.0793
No
No
15
MED
Full term neonate w major problems
3.2914
0.0
0.0794
No
No
15
MED
Neonate w other significant problems
1.1650
0.0
0.0795
No
No
15
MED
Normal newborn
0.1577
0.0
0.0799
No
No
16
SURG
Splenectomy w MCC
4.7602
10.8
14.1800
No
No
16
SURG
Splenectomy w CC
2.5819
6.2
7.9801
No
No
16
SURG
Splenectomy w/o CC/MCC
1.6484
3.8
4.9802
No
No
16
SURG
Other O.R. proc of the blood & blood forming organs w MCC
3.3539
8.9
12.2803
No
No
16
SURG
Other O.R. proc of the blood & blood forming organs w CC
1.7689
4.7
6.7804
No
No
16
SURG
Other O.R. proc of the blood & blood forming organs w/o CC/MCC
1.0613
2.5
3.4808
No
No
16
MED
Major hematol/immun diag exc sickle cell crisis & coagul w MCC
1.9850
6.3
8.2809
No
No
16
MED
Major hematol/immun diag exc sickle cell crisis & coagul w CC
1.1737
4.2
5.3810
No
No
16
MED
Major hematol/immun diag exc sickle cell crisis & coagul w/o CC/MCC
0.8957
3.2
4.0811
No
No
16
MED
Red blood cell disorders w MCC
1.2742
4.0
5.7812
No
No
16
MED
Red blood cell disorders w/o MCC
0.7629
2.8
3.7813
No
No
16
MED
Coagulation disorders
1.3556
3.7
5.1814
No
No
16
MED
Reticuloendothelial & immunity disorders w MCC
1.4932
5.0
6.7815
No
No
16
MED
Reticuloendothelial & immunity disorders w CC
0.9973
3.8
5.0816
No
No
16
MED
Reticuloendothelial & immunity disorders w/o CC/MCC
0.6989
2.8
3.5820
No
No
17
SURG
Lymphoma & leukemia w major O.R. procedure w MCC
5.6401
13.3
17.7821
No
No
17
SURG
Lymphoma & leukemia w major O.R. procedure w CC
2.2489
5.5
7.9822
No
No
17
SURG
Lymphoma & leukemia w major O.R. procedure w/o CC/MCC
1.2399
2.6
3.5823
No
No
17
SURG
Lymphoma & non-acute leukemia w other O.R. proc w MCC
4.0990
12.1
15.4824
No
No
17
SURG
Lymphoma & non-acute leukemia w other O.R. proc w CC
2.1791
6.6
8.7825
No
No
17
SURG
Lymphoma & non-acute leukemia w other O.R. proc w/o CC/MCC
1.2059
3.0
4.3826
No
No
17
SURG
Myeloprolif disord or poorly diff neopl w maj O.R. proc w MCC
4.6385
11.1
15.0827
No
No
17
SURG
Myeloprolif disord or poorly diff neopl w maj O.R. proc w CC
2.2759
5.9
8.0( print page 23836)828
No
No
17
SURG
Myeloprolif disord or poorly diff neopl w maj O.R. proc w/o CC/MCC
1.3050
3.0
3.8829
No
No
17
SURG
Myeloprolif disord or poorly diff neopl w other O.R. proc w CC/MCC
2.8972
7.0
10.7830
No
No
17
SURG
Myeloprolif disord or poorly diff neopl w other O.R. proc w/o CC/MCC
1.0802
2.5
3.7834
No
No
17
MED
Acute leukemia w/o major O.R. procedure w MCC
4.5854
9.5
15.5835
No
No
17
MED
Acute leukemia w/o major O.R. procedure w CC
2.5840
6.2
10.4836
No
No
17
MED
Acute leukemia w/o major O.R. procedure w/o CC/MCC
1.2085
3.4
5.2837
No
No
17
MED
Chemo w acute leukemia as sdx or w high dose chemo agent w MCC
6.4047
17.6
23.1838
No
No
17
MED
Chemo w acute leukemia as sdx w CC or high dose chemo agent
2.9669
7.9
12.3839
No
No
17
MED
Chemo w acute leukemia as sdx w/o CC/MCC
1.4181
5.0
6.4840
Yes
No
17
MED
Lymphoma & non-acute leukemia w MCC
2.6031
7.7
10.4841
Yes
No
17
MED
Lymphoma & non-acute leukemia w CC
1.5529
5.2
6.9842
Yes
No
17
MED
Lymphoma & non-acute leukemia w/o CC/MCC
1.0261
3.4
4.6843
No
No
17
MED
Other myeloprolif dis or poorly diff neopl diag w MCC
1.8203
6.1
8.5844
No
No
17
MED
Other myeloprolif dis or poorly diff neopl diag w CC
1.2030
4.6
6.1845
No
No
17
MED
Other myeloprolif dis or poorly diff neopl diag w/o CC/MCC
0.8143
3.3
4.3846
No
No
17
MED
Chemotherapy w/o acute leukemia as secondary diagnosis w MCC
2.1299
5.8
8.4847
No
No
17
MED
Chemotherapy w/o acute leukemia as secondary diagnosis w CC
0.9436
2.7
3.4848
No
No
17
MED
Chemotherapy w/o acute leukemia as secondary diagnosis w/o CC/MCC
0.7995
2.5
3.1849
No
No
17
MED
Radiotherapy
1.2021
4.4
6.0853
Yes
No
18
SURG
Infectious & parasitic diseases w O.R. procedure w MCC
5.4286
12.7
16.7854
Yes
No
18
SURG
Infectious & parasitic diseases w O.R. procedure w CC
2.9171
9.1
11.1855
Yes
No
18
SURG
Infectious & parasitic diseases w O.R. procedure w/o CC/MCC
1.8093
5.6
7.0856
Yes
No
18
SURG
Postoperative or post-traumatic infections w O.R. proc w MCC
4.7315
11.5
15.4857
Yes
No
18
SURG
Postoperative or post-traumatic infections w O.R. proc w CC
2.0472
6.6
8.5858
Yes
No
18
SURG
Postoperative or post-traumatic infections w O.R. proc w/o CC/MCC
1.3563
4.5
5.7862
Yes
No
18
MED
Postoperative & post-traumatic infections w MCC
1.9123
6.1
8.2863
Yes
No
18
MED
Postoperative & post-traumatic infections w/o MCC
0.9575
4.2
5.2864
No
No
18
MED
Fever of unknown origin
0.8224
3.2
4.1865
No
No
18
MED
Viral illness w MCC
1.4950
4.7
6.7866
No
No
18
MED
Viral illness w/o MCC
0.6673
2.8
3.5867
Yes
No
18
MED
Other infectious & parasitic diseases diagnoses w MCC
2.3423
7.0
9.6868
Yes
No
18
MED
Other infectious & parasitic diseases diagnoses w CC
1.0761
4.5
5.8869
Yes
No
18
MED
Other infectious & parasitic diseases diagnoses w/o CC/MCC
0.7628
3.5
4.3870
Yes
No
18
MED
Septicemia or severe sepsis w MV 96+ hours
5.7422
12.9
15.5871
Yes
No
18
MED
Septicemia or severe sepsis w/o MV 96+ hours w MCC
1.8211
5.5
7.5( print page 23837)872
Yes
No
18
MED
Septicemia or severe sepsis w/o MV 96+ hours w/o MCC
1.1188
4.7
5.7876
No
No
19
SURG
O.R. procedure w principal diagnoses of mental illness
2.4279
7.8
11.9880
No
No
19
MED
Acute adjustment reaction & psychosocial dysfunction
0.5867
2.4
3.2881
No
No
19
MED
Depressive neuroses
0.5784
3.1
4.2882
No
No
19
MED
Neuroses except depressive
0.6086
3.1
4.4883
No
No
19
MED
Disorders of personality & impulse control
1.0102
4.4
7.4884
Yes
No
19
MED
Organic disturbances & mental retardation
0.8923
4.1
5.5885
No
No
19
MED
Psychoses
0.8380
5.5
7.6886
No
No
19
MED
Behavioral & developmental disorders
0.7479
4.0
6.1887
No
No
19
MED
Other mental disorder diagnoses
0.7275
3.0
4.6894
No
No
20
MED
Alcohol/drug abuse or dependence, left ama
0.3842
2.1
3.0895
No
No
20
MED
Alcohol/drug abuse or dependence w rehabilitation therapy
0.8727
8.1
10.5896
Yes
No
20
MED
Alcohol/drug abuse or dependence w/o rehabilitation therapy w MCC
1.3787
4.8
6.6897
Yes
No
20
MED
Alcohol/drug abuse or dependence w/o rehabilitation therapy w/o MCC
0.6152
3.3
4.1901
No
No
21
SURG
Wound debridements for injuries w MCC
3.8708
9.9
15.1902
No
No
21
SURG
Wound debridements for injuries w CC
1.6889
5.5
7.7903
No
No
21
SURG
Wound debridements for injuries w/o CC/MCC
0.9976
3.4
4.6904
No
No
21
SURG
Skin grafts for injuries w CC/MCC
2.9204
7.0
11.2905
No
No
21
SURG
Skin grafts for injuries w/o CC/MCC
1.1156
3.4
4.7906
No
No
21
SURG
Hand procedures for injuries
0.9941
2.1
3.1907
Yes
No
21
SURG
Other O.R. procedures for injuries w MCC
3.6871
8.0
11.6908
Yes
No
21
SURG
Other O.R. procedures for injuries w CC
1.9162
4.9
6.8909
Yes
No
21
SURG
Other O.R. procedures for injuries w/o CC/MCC
1.1372
2.7
3.6913
No
No
21
MED
Traumatic injury w MCC
1.2246
4.2
5.7914
No
No
21
MED
Traumatic injury w/o MCC
0.6625
2.7
3.4915
No
No
21
MED
Allergic reactions w MCC
1.2354
3.3
4.7916
No
No
21
MED
Allergic reactions w/o MCC
0.4409
1.7
2.1917
Yes
No
21
MED
Poisoning & toxic effects of drugs w MCC
1.4143
3.7
5.2918
Yes
No
21
MED
Poisoning & toxic effects of drugs w/o MCC
0.5809
2.1
2.7919
No
No
21
MED
Complications of treatment w MCC
1.5200
4.5
6.4920
No
No
21
MED
Complications of treatment w CC
0.9220
3.3
4.4921
No
No
21
MED
Complications of treatment w/o CC/MCC
0.6097
2.3
3.0922
No
No
21
MED
Other injury, poisoning & toxic effect diag w MCC
1.3580
4.1
6.0923
No
No
21
MED
Other injury, poisoning & toxic effect diag w/o MCC
0.6142
2.4
3.2927
No
No
22
SURG
Extensive burns or full thickness burns w MV 96+ hrs w skin graft
14.0060
23.4
31.1928
No
No
22
SURG
Full thickness burn w skin graft or inhal inj w CC/MCC
5.0621
11.7
16.0929
No
No
22
SURG
Full thickness burn w skin graft or inhal inj w/o CC/MCC
2.1574
5.3
7.7933
No
No
22
MED
Extensive burns or full thickness burns w MV 96+ hrs w/o skin graft
2.1246
2.3
4.3934
No
No
22
MED
Full thickness burn w/o skin grft or inhal inj
1.2949
4.4
6.2935
No
No
22
MED
Non-extensive burns
1.2209
3.6
5.4939
No
No
23
SURG
O.R. proc w diagnoses of other contact w health services w MCC
2.6570
6.6
10.1( print page 23838)940
No
No
23
SURG
O.R. proc w diagnoses of other contact w health services w CC
1.6379
3.6
5.4941
No
No
23
SURG
O.R. proc w diagnoses of other contact w health services w/o CC/MCC
1.0782
2.1
2.7945
Yes
No
23
MED
Rehabilitation w CC/MCC
1.2869
8.6
10.5946
Yes
No
23
MED
Rehabilitation w/o CC/MCC
1.0861
6.9
7.9947
Yes
No
23
MED
Signs & symptoms w MCC
1.0525
3.8
5.0948
Yes
No
23
MED
Signs & symptoms w/o MCC
0.6473
2.8
3.5949
No
No
23
MED
Aftercare w CC/MCC
0.7925
2.6
4.1950
No
No
23
MED
Aftercare w/o CC/MCC
0.5548
2.4
3.5951
No
No
23
MED
Other factors influencing health status
0.7442
2.2
4.7955
No
No
24
SURG
Craniotomy for multiple significant trauma
5.0969
8.6
12.3956
Yes
No
24
SURG
Limb reattachment, hip & femur proc for multiple significant trauma
3.5263
7.6
9.3957
No
No
24
SURG
Other O.R. procedures for multiple significant trauma w MCC
6.0787
10.2
14.9958
No
No
24
SURG
Other O.R. procedures for multiple significant trauma w CC
3.6129
8.0
10.4959
No
No
24
SURG
Other O.R. procedures for multiple significant trauma w/o CC/MCC
2.3808
4.9
6.3963
No
No
24
MED
Other multiple significant trauma w MCC
2.8713
6.7
9.5964
No
No
24
MED
Other multiple significant trauma w CC
1.6024
4.9
6.2965
No
No
24
MED
Other multiple significant trauma w/o CC/MCC
0.9832
3.4
4.1969
No
No
25
SURG
HIV w extensive O.R. procedure w MCC
5.3749
12.9
18.8970
No
No
25
SURG
HIV w extensive O.R. procedure w/o MCC
2.4892
6.5
9.8974
No
No
25
MED
HIV w major related condition w MCC
2.5595
7.3
10.4975
No
No
25
MED
HIV w major related condition w CC
1.3571
5.3
7.0976
No
No
25
MED
HIV w major related condition w/o CC/MCC
0.8910
3.8
4.9977
No
No
25
MED
HIV w or w/o other related condition
1.0965
3.9
5.3981
Yes
No

SURG
Extensive O.R. procedure unrelated to principal diagnosis w MCC
5.0175
11.7
15.1982
Yes
No

SURG
Extensive O.R. procedure unrelated to principal diagnosis w CC
3.0780
7.5
9.7983
Yes
No

SURG
Extensive O.R. procedure unrelated to principal diagnosis w/o CC/MCC
1.9959
3.9
5.4984
No
No

SURG
Prostatic O.R. procedure unrelated to principal diagnosis w MCC
3.3256
11.8
14.6985
No
No

SURG
Prostatic O.R. procedure unrelated to principal diagnosis w CC
2.2113
7.3
9.7986
No
No

SURG
Prostatic O.R. procedure unrelated to principal diagnosis w/o CC/MCC
1.2767
3.5
5.3987
Yes
No

SURG
Non-extensive O.R. proc unrelated to principal diagnosis w MCC
3.4336
9.8
13.0988
Yes
No

SURG
Non-extensive O.R. proc unrelated to principal diagnosis w CC
1.8752
5.8
7.8989
Yes
No

SURG
Non-extensive O.R. proc unrelated to principal diagnosis w/o CC/MCC
1.1032
2.9
4.1998
No
No

**
Principal diagnosis invalid as discharge diagnosis
0.0000
0.0
0.0999
No
No

**
Ungroupable
0.0000
0.0
0.0MS-DRGs 998 and 999 contain cases that could not be assigned to valid DRGs.**Note:**
                             If there is no value in either the geometric mean length of stay or the arithmetic mean length of stay columns, the volume of cases is insufficient to obtain a meaningful computation of these statistics.
 
 
 Table 6A.—New Diagnosis Codes
Diagnosis code
Description
CC
MDC
MS-DRG046.11
Variant Creutzfeldt-Jakob disease
CC
01
056,  057046.19
Other and unspecified Creutzfeldt-Jakob disease
CC
01
056,  057046.71
Gerstmann-Sträussler-Scheinker syndrome
CC
01
056,  05725
974,  975,  976046.72
Fatal familial insomnia
CC
01
056, 05725
974, 975, 976046.79
Other and unspecified prion disease of central nervous system
CC
01
056, 05725
974, 975, 976051.01
Cowpox
N
18
865, 866051.02
Vaccinia not from vaccination
N
18
865, 866059.00
Orthopoxvirus infection,  unspecified
N
18
865, 866059.01
Monkeypox
CC
18
865, 866059.09
Other orthopoxvirus infections
N
18
865, 866059.10
Parapoxvirus infection,  unspecified
N
18
865, 866059.11
Bovine stomatitis
N
18
865, 866059.12
Sealpox
N
18
865, 866059.19
Other parapoxvirus infections
N
18
865, 866059.21
Tanapox
CC
18
865, 866059.22
Yaba monkey tumor virus
N
18
865, 866059.29
Yatapoxvirus infection,  unspecified
N
18
865, 866059.8
Other poxvirus infections
N
18
865, 866059.9
Poxvirus infections,  unspecified
N
18
865, 866078.12
Plantar wart
N
09
606, 607136.21
Specific infection due to acanthamoeba
N
18
867, 868, 869136.29
Other specific infections by free-living amebae
CC
18
867, 868, 869199.2
Malignant neoplasm associated with transplant organ
CC
17
843, 844, 845203.02
Multiple myeloma,  in relapse
CC
17
820, 821, 822, 823, 824, 825, 840, 841, 842203.12
Plasma cell leukemia,  in relapse
CC
17
820, 821, 822, 823, 824, 825, 840, 841, 842203.82
Other immunoproliferative neoplasms,  in relapse
CC
17
820, 821, 822, 823, 824, 825, 840, 841, 842204.02
Acute lymphoid leukemia,  in relapse
CC
17
820, 821, 822, 834, 835, 836, 837 1
                                , 838 1
                                , 839 1204.12
Chronic lymphoid leukemia,  in relapse
CC
17
820, 821, 822, 823, 824, 825, 840, 841, 842204.22
Subacute lymphoid leukemia,  in relapse
CC
17
820, 821, 822, 823, 824, 825, 840, 841, 842204.82
Other lymphoid leukemia,  in relapse
CC
17
820, 821, 822, 823, 824, 825, 840, 841, 842204.92
Unspecified lymphoid leukemia,  in relapse
CC
17
820, 821, 822, 823, 824, 825, 840, 841, 842205.02
Acute myeloid leukemia,  in relapse
CC
17
820, 821, 822, 834, 835, 836, 837 1
                                , 838 1
                                , 839 1205.12
Chronic myeloid leukemia,  in relapse
CC
17
820, 821, 822, 823, 824, 825, 840, 841, 842205.22
Subacute myeloid leukemia,  in relapse
CC
17
820, 821, 822, 823, 824, 825, 840, 841, 842205.32
Myeloid sarcoma,  in relapse
CC
17
820, 821, 822, 823, 824, 825, 840, 841, 842205.82
Other myeloid leukemia,  in relapse
CC
17
820, 821, 822, 823, 824, 825, 840, 841, 842205.92
Unspecified myeloid leukemia,  in relapse
CC
17
820, 821, 822, 823, 824, 825, 840, 841, 842( print page 23840)206.02
Acute monocytic leukemia,  in relapse
CC
17
820, 821, 822, 834, 835, 836, 837 1
                                , 838 1
                                , 839 1206.12
Chronic monocytic leukemia,  in relapse
CC
17
820, 821, 822, 823, 824, 825, 840, 841, 842206.22
Subacute monocytic leukemia,  in relapse
CC
17
820, 821, 822, 823, 824, 825, 840, 841, 842206.82
Other monocytic leukemia,  in relapse
CC
17
820, 821, 822, 823, 824, 825, 840, 841, 842206.92
Unspecified monocytic leukemia,  in relapse
CC
17
820, 821, 822, 823, 824, 825, 840, 841, 842207.02
Acute erythremia and erythroleukemia,  in relapse
CC
17
820, 821, 822, 834, 835, 836, 837 1
                                , 838 1
                                , 839 1207.12
Chronic erythremia,  in relapse
CC
17
820, 821, 822, 823, 824, 825, 840, 841, 842207.22
Megakaryocytic leukemia,  in relapse
CC
17
820, 821, 822, 823, 824, 825, 840, 841, 842207.82
Other specified leukemia,  in relapse
CC
17
820, 821, 822, 823, 824, 825, 840, 841, 842208.02
Acute leukemia of unspecified cell type,  in relapse
CC
17
820, 821, 822, 834, 835, 836, 837 1
                                , 838 1
                                , 839 1208.12
Chronic leukemia of unspecified cell type,  in relapse
CC
17
820, 821, 822, 823, 824, 825, 840, 841, 842208.22
Subacute leukemia of unspecified cell type,  in relapse
CC
17
820, 821, 822, 823, 824, 825, 840, 841, 842208.82
Other leukemia of unspecified cell type,  in relapse
CC
17
820, 821, 822, 823, 824, 825, 840, 841, 842208.92
Unspecified leukemia,  in relapse
CC
17
820, 821, 822, 823, 824, 825, 840, 841, 842209.00
Malignant carcinoid tumor of the small intestine,  unspecified portion
CC
06
374, 375, 376209.01
Malignant carcinoid tumor of the duodenum
CC
06
374, 375, 376209.02
Malignant carcinoid tumor of the jejunum
CC
06
374, 375, 376209.03
Malignant carcinoid tumor of the ileum
CC
06
374, 375, 376209.10
Malignant carcinoid tumor of the large intestine,  unspecified portion
CC
06
374, 375, 376209.11
Malignant carcinoid tumor of the appendix
CC
06
338, 339, 340, 374, 375, 376209.12
Malignant carcinoid tumor of the cecum
CC
06
374, 375, 376209.13
Malignant carcinoid tumor of the ascending colon
CC
06
374, 375, 376209.14
Malignant carcinoid tumor of the transverse colon
CC
06
374, 375, 376209.15
Malignant carcinoid tumor of the descending colon
CC
06
374, 375, 376209.16
Malignant carcinoid tumor of the sigmoid colon
CC
06
374, 375, 376209.17
Malignant carcinoid tumor of the rectum
CC
06
374, 375, 376209.20
Malignant carcinoid tumor of unknown primary site
CC
17
843, 844, 845209.21
Malignant carcinoid tumor of the bronchus and lung
CC
04
180, 181, 182209.22
Malignant carcinoid tumor of the thymus
CC
17
843, 844, 845209.23
Malignant carcinoid tumor of the stomach
CC
06
374, 375, 376209.24
Malignant carcinoid tumor of the kidney
CC
11
656, 657, 658, 686, 687, 688209.25
Malignant carcinoid tumor of foregut,  not otherwise specified
CC
06
374, 375, 376209.26
Malignant carcinoid tumor of midgut,  not otherwise specified
CC
06
374, 375, 376209.27
Malignant carcinoid tumor of hindgut,  not otherwise specified
CC
06
374, 375, 376209.29
Malignant carcinoid tumor of other sites
CC
17
843, 844, 845209.30
Malignant poorly differentiated neuroendocrine carcinoma,  any site
CC
17
843, 844, 845209.40
Benign carcinoid tumor of the small intestine,  unspecified portion
N
06
393, 394, 395209.41
Benign carcinoid tumor of the duodenum
N
06
393, 394, 395( print page 23841)209.42
Benign carcinoid tumor of the jejunum
N
06
393, 394, 395209.43
Benign carcinoid tumor of the ileum
N
06
393, 394, 395209.50
Benign carcinoid tumor of the large intestine,  unspecified portion
N
06
393, 394, 395209.51
Benign carcinoid tumor of the appendix
N
06
393, 394, 395209.52
Benign carcinoid tumor of the cecum
N
06
393, 394, 395209.53
Benign carcinoid tumor of the ascending colon
N
06
393, 394, 395209.54
Benign carcinoid tumor of the transverse colon
N
06
393, 394, 395209.55
Benign carcinoid tumor of the descending colon
N
06
393, 394, 395209.56
Benign carcinoid tumor of the sigmoid colon
N
06
393, 394, 395209.57
Benign carcinoid tumor of the rectum
N
06
393, 394, 395209.60
Benign carcinoid tumor of unknown primary site
N
17
843, 844, 845209.61
Benign carcinoid tumor of the bronchus and lung
N
04
180, 181, 182209.62
Benign carcinoid tumor of the thymus
N
16
814, 815, 816209.63
Benign carcinoid tumor of the stomach
N
06
393, 394, 395209.64
Benign carcinoid tumor of the kidney
N
11
656, 657, 658, 686, 687, 688209.65
Benign carcinoid tumor of foregut,  not otherwise specified
N
06
393, 394, 395209.66
Benign carcinoid tumor of midgut,  not otherwise specified
N
06
393, 394, 395209.67
Benign carcinoid tumor of hindgut,  not otherwise specified
N
06
393, 394, 395209.69
Benign carcinoid tumor of other sites
N
17
843, 844, 845238.77
Post-transplant lymphoproliferative disorder (PTLD)
CC
21
919, 920, 921249.00
Secondary diabetes mellitus without mention of complication, not stated as uncontrolled,  or unspecified
N
PRE 10
008, 010
                                 637, 638, 639249.01
Secondary diabetes mellitus without mention of complication,  uncontrolled
N
PRE 10
008, 010
                                 637, 638, 639249.10
Secondary diabetes mellitus with ketoacidosis,  not stated as uncontrolled,  or unspecified
MCC
PRE 10
008, 010
                                 637, 638, 639249.11
Secondary diabetes mellitus with ketoacidosis,  uncontrolled
MCC
PRE 10
008, 010
                                 637, 638, 639,249.20
Secondary diabetes mellitus with hyperosmolarity,  not stated as uncontrolled,  or unspecified
MCC
PRE 10
008, 010
                                 637, 638, 639249.21
Secondary diabetes mellitus with hyperosmolarity,  uncontrolled
MCC
PRE 10
008, 010
                                 637, 638, 639249.30
Secondary diabetes mellitus with other coma,  not stated as uncontrolled,  or unspecified
MCC
PRE 10
008, 010
                                 637, 638, 639249.31
Secondary diabetes mellitus with other coma,  uncontrolled
MCC
PRE 10
008, 010
                                 637, 638, 639249.40
Secondary diabetes mellitus with renal manifestations,  not stated as uncontrolled,  or unspecified
N
PRE 11
008, 010
                                 698, 699, 700249.41
Secondary diabetes mellitus with renal manifestations,  uncontrolled
N
PRE 11
008, 010
                                 698, 699, 700249.50
Secondary diabetes mellitus with ophthalmic manifestations,  not stated as uncontrolled,  or unspecified
N
PRE 02
008, 010
                                 124, 125249.51
Secondary diabetes mellitus with ophthalmic manifestations,  uncontrolled
N
PRE 02
008, 010
                                 124, 125249.60
Secondary diabetes mellitus with neurological manifestations,  not stated as uncontrolled,  or unspecified
N
PRE 01
008, 010
                                 073, 074249.61
Secondary diabetes mellitus with neurological manifestations,  uncontrolled
N
PRE 01
008, 010
                                 073, 074249.70
Secondary diabetes mellitus with peripheral circulatory disorders,  not stated as uncontrolled,  or unspecified
N
PRE 05
008, 010
                                 299, 300, 301249.71
Secondary diabetes mellitus with peripheral circulatory disorders,  uncontrolled
N
PRE 05
008, 010
                                 299, 300, 301249.80
Secondary diabetes mellitus with other specified manifestations,  not stated as uncontrolled,  or unspecified
N
PRE 10
008, 010
                                 637, 638, 639249.81
Secondary diabetes mellitus with other specified manifestations,  uncontrolled
N
PRE 10
008, 010
                                 637, 638, 639249.90
Secondary diabetes mellitus with unspecified complication,  not stated as uncontrolled,  or unspecified
N
PRE 10
008, 010
                                 637, 638, 639249.91
Secondary diabetes mellitus with unspecified complication,  uncontrolled
N
PRE 10
008, 010
                                 637, 638, 639259.50
Androgen insensitivity,  unspecified
N
10
643, 644, 645259.51
Androgen insensitivity syndrome
N
10
643, 644, 645259.52
Partial androgen insensitivity
N
10
643, 644, 645275.5
Hungry bone syndrome
N
10
640, 641279.50
Graft-versus-host disease,  unspecified
CC
16
808, 809, 810279.51
Acute graft-versus-host disease
CC
16
808, 809, 810279.52
Chronic graft-versus-host disease
CC
16
808, 809, 810279.53
Acute on chronic graft-versus-host disease
CC
16
808, 809, 810289.84
Heparin-induced thrombocytopenia (HIT)
N
15
791 2
                                , 793 216
813( print page 23842)25
977337.00
Idiopathic peripheral autonomic neuropathy,  unspecified
N
01
073, 074337.01
Carotid sinus syndrome
N
01
073, 074337.09
Other idiopathic peripheral autonomic neuropathy
N
01
073, 074339.00
Cluster headache syndrome,  unspecified
N
01
102, 103339.01
Episodic cluster headache
N
01
102, 103339.02
Chronic cluster headache
N
01
102, 103339.03
Episodic paroxysmal hemicrania
N
01
102, 103339.04
Chronic paroxysmal hemicrania
N
01
102, 103339.05
Short lasting unilateral neuralgiform headache with conjunctival injection and tearing
N
01
102, 103339.09
Other trigeminal autonomic cephalgias
N
01
102, 103339.10
Tension type headache,  unspecified
N
01
102, 103339.11
Episodic tension type headache
N
01
102, 103339.12
Chronic tension type headache
N
01
102, 103339.20
Post-traumatic headache,  unspecified
N
01
102, 103339.21
Acute post-traumatic headache
N
01
102, 103339.22
Chronic post-traumatic headache
N
01
102, 103339.3
Drug induced headache,  not elsewhere classified
N
01
102, 103339.41
Hemicrania continua
N
01
102, 103339.42
New daily persistent headache
N
01
102, 103339.43
Primary thunderclap headache
N
01
102, 103339.44
Other complicated headache syndrome
N
01
102, 103339.81
Hypnic headache
N
01
102, 103339.82
Headache associated with sexual activity
N
01
102, 103339.83
Primary cough headache
N
01
102, 103339.84
Primary exertional headache
N
01
102, 103339.85
Primary stabbing headache
N
01
102, 103339.89
Other headache syndromes
N
01
102, 103346.02
Migraine with aura,  without mention of intractable migraine with status migrainosus
N
01
102, 103346.03
Migraine with aura,  with intractable migraine,  so stated,  with status migrainosus
N
01
102, 103346.12
Migraine without aura,  without mention of intractable migraine with status migrainosus
N
01
102, 103346.13
Migraine without aura,  with intractable migraine,  so stated,  with status migrainosus
N
01
102, 103346.22
Variants of migraine,  not elsewhere classified,  without mention of intractable migraine with status migrainosus
N
01
102, 103346.23
Variants of migraine,  not elsewhere classified,  with intractable migraine,  so stated,  with status migrainosus
N
01
102, 103346.30
Hemiplegic migraine,  without mention of intractable migraine without mention of status migrainosus
N
01
102, 103346.31
Hemiplegic migraine,  with intractable migraine,  so stated,  without mention of status migrainosus
N
01
102, 103346.32
Hemiplegic migraine,  without mention of intractable migraine with status migrainosus
N
01
102, 103346.33
Hemiplegic migraine,  with intractable migraine,  so stated,  with status migrainosus
N
01
102, 103346.40
Menstrual migraine,  without mention of intractable migraine without mention of status migrainosus
N
01
102, 103346.41
Menstrual migraine,  with intractable migraine,  so stated,  without mention of status migrainosus
N
01
102, 103346.42
Menstrual migraine,  without mention of intractable migraine with status migrainosus
N
01
102, 103346.43
Menstrual migraine,  with intractable migraine,  so stated,  with status migrainosus
N
01
102, 103346.50
Persistent migraine aura without cerebral infarction,  without mention of intractable migraine without mention of status migrainosus
N
01
102, 103346.51
Persistent migraine aura without cerebral infarction,  with intractable migraine,  so stated,  without mention of status migrainosus
N
01
102, 103346.52
Persistent migraine aura without cerebral infarction,  without mention of intractable migraine with status migrainosus
N
01
102, 103346.53
Persistent migraine aura without cerebral infarction,  with intractable migraine,  so stated,  with status migrainosus
N
01
102, 103346.60
Persistent migraine aura with cerebral infarction,  without mention of intractable migraine without mention of status migrainosus
CC
01
102, 103346.61
Persistent migraine aura with cerebral infarction,  with intractable migraine,  so stated,  without mention of status migrainosus
CC
01
102, 103346.62
Persistent migraine aura with cerebral infarction,  without mention of intractable migraine with status migrainosus
CC
01
102, 103346.63
Persistent migraine aura with cerebral infarction,  with intractable migraine,  so stated,  with status migrainosus
CC
01
102, 103346.70
Chronic migraine without aura,  without mention of intractable migraine without mention of status migrainosus
N
01
102, 103346.71
Chronic migraine without aura,  with intractable migraine,  so stated,  without mention of status migrainosus
N
01
102, 103346.72
Chronic migraine without aura,  without mention of intractable migraine with status migrainosus
N
01
102, 103346.73
Chronic migraine without aura,  with intractable migraine,  so stated,  with status migrainosus
N
01
102, 103( print page 23843)346.82
Other forms of migraine,  without mention of intractable migraine with status migrainosus
N
01
102, 103346.83
Other forms of migraine,  with intractable migraine,  so stated,  with status migrainosus
N
01
102, 103362.20
Retinopathy of prematurity,  unspecified
N
02
124, 125362.22
Retinopathy of prematurity,  stage 0
N
02
124, 125362.23
Retinopathy of prematurity,  stage 1
N
02
124, 125362.24
Retinopathy of prematurity,  stage 2
N
02
124, 125362.25
Retinopathy of prematurity,  stage 3
N
02
124, 125362.26
Retinopathy of prematurity,  stage 4
N
02
124, 125362.27
Retinopathy of prematurity,  stage 5
N
02
124, 125364.82
Plateau iris syndrome
N
02
124, 125372.34
Pingueculitis
N
02
124, 125414.3
Coronary atherosclerosis due to lipid rich plaque
N
05
302, 303511.81
Malignant pleural effusion
CC
04
180, 181, 182511.89
Other specified forms of effusion,  except tuberculous
CC
04
186, 187, 18815
791 2
                                , 793 2569.44
Dysplasia of anus
N
06
393, 394, 395571.42
Autoimmune hepatitis
N
07
441, 442, 443599.70
Hematuria,  unspecified
N
11
695, 69615
791 2
                                , 793 2599.71
Gross hematuria
N
11
695, 69615
791 2
                                , 793 2599.72
Microscopic hematuria
N
11
695, 69615
791 2
                                , 793 2611.81
Ptosis of breast
N
09
600, 601611.82
Hypoplasia of breast
N
09
600, 601611.83
Capsular contracture of breast implant
N
09
600, 601611.89
Other specified disorders of breast
N
09
600, 601612.0
Deformity of reconstructed breast
N
09
600, 601612.1
Disproportion of reconstructed breast
N
09
600, 601625.70
Vulvodynia,  unspecified
N
13
742, 743, 760, 761625.71
Vulvar vestibulitis
N
13
742, 743, 757, 758, 759625.79
Other vulvodynia
N
13
742, 743, 760, 761649.70
Cervical shortening,  unspecified as to episode of care or not applicable
CC
14
998649.71
Cervical shortening,  delivered,  with or without mention of antepartum condition
CC
14
765, 766, 767, 768, 774, 775649.73
Cervical shortening,  antepartum condition or complication
CC
14
781, 782678.00
Fetal hematologic conditions,  unspecified as to episode of care or not applicable
N
14
998678.01
Fetal hematologic conditions,  delivered,  with or without mention of antepartum condition
N
14
765, 766, 767, 768, 774, 775678.03
Fetal hematologic conditions,  antepartum condition or complication
N
14
781, 782678.10
Fetal conjoined twins,  unspecified as to episode of care or not applicable
N
14
998678.11
Fetal conjoined twins,  delivered,  with or without mention of antepartum condition
N
14
765, 766, 767, 768, 774, 775678.13
Fetal conjoined twins,  antepartum condition or complication
N
14
781, 782679.00
Maternal complications from in utero procedure,  unspecified as to episode of care or not applicable
N
14
765, 766, 767, 768, 774, 775679.01
Maternal complications from in utero procedure,  delivered,  with or without mention of antepartum condition
N
14
765, 766, 767, 768, 774679.02
Maternal complications from in utero procedure,  delivered,  with mention of postpartum complication
N
14
765, 766, 767, 768, 774679.03
Maternal complications from in utero procedure,  antepartum condition or complication
N
14
781, 782679.04
Maternal complications from in utero procedure,  postpartum condition or complication
N
14
769, 776679.10
Fetal complications from in utero procedures,  unspecified as to episode of care or not applicable
N
14
998679.11
Fetal complications from in utero procedures,  delivered,  with or without mention of antepartum condition
N
14
765, 766, 767, 768, 774, 775679.12
Fetal complications from in utero procedures,  delivered,  with mention of postpartum complication
N
14
765, 766, 767, 768, 774, 775679.13
Fetal complications from in utero procedures,  antepartum condition or complication
N
14
781, 782679.14
Fetal complications from in utero procedures,  postpartum condition or complication
N
14
769, 776695.10
Erythema multiforme,  unspecified
N
09
595, 596695.11
Erythema multiforme minor
N
09
595, 596695.12
Erythema multiforme major
CC
09
595, 596695.13
Stevens-Johnson syndrome
CC
09
595, 596695.14
Stevens-Johnson syndrome-toxic epidermal necrolysis overlap syndrome
CC
09
595, 596695.15
Toxic epidermal necrolysis
CC
09
595, 596695.19
Other erythema multiforme
N
09
595, 596695.50
Exfoliation due to erythematous condition involving less than 10 percent of body surface
N
09
606, 607( print page 23844)695.51
Exfoliation due to erythematous condition involving 10-19 percent of body surface
N
09
606, 607695.52
Exfoliation due to erythematous condition involving 20-29 percent of body surface
N
09
606, 607695.53
Exfoliation due to erythematous condition involving 30-39 percent of body surface
CC
09
606, 607695.54
Exfoliation due to erythematous condition involving 40-49 percent of body surface
CC
09
606, 607695.55
Exfoliation due to erythematous condition involving 50-59 percent of body surface
CC
09
606, 607695.56
Exfoliation due to erythematous condition involving 60-69 percent of body surface
CC
09
606, 607695.57
Exfoliation due to erythematous condition involving 70-79 percent of body surface
CC
09
606, 607695.58
Exfoliation due to erythematous condition involving 80-89 percent of body surface
CC
09
606, 607695.59
Exfoliation due to erythematous condition involving 90 percent or more of body surface
CC
09
606, 607707.20
Pressure ulcer,  unspecified stage
N
09
573, 574, 575, 592, 593, 594707.21
Pressure ulcer,  stage I
N
09
573, 574, 575, 592, 593, 594707.22
Pressure ulcer,  stage II
N
09
573, 574, 575, 592, 593, 594707.23
Pressure ulcer,  stage III
MCC 3
09
573, 574, 575, 592, 593, 594707.24
Pressure ulcer,  stage IV
MCC 3
09
573, 574, 575, 592, 593, 594729.90
Disorders of soft tissue,  unspecified
N
08
555, 556729.91
Post-traumatic seroma
N
08
555, 556729.92
Nontraumatic hematoma of soft tissue
N
08
555, 556729.99
Other disorders of soft tissue
N
08
555, 556760.61
Newborn affected by amniocentesis
N
15
794760.62
Newborn affected by other in utero procedure
N
15
794760.63
Newborn affected by other surgical operations on mother during pregnancy
N
15
794760.64
Newborn affected by previous surgical procedure on mother not associated with pregnancy
N
15
794777.50
Necrotizing enterocolitis in newborn,  unspecified
MCC
15
791 4
                                , 793 4777.51
Stage I necrotizing enterocolitis in newborn
MCC
15
791 4
                                , 793 4777.52
Stage II necrotizing enterocolitis in newborn
MCC
15
791 4
                                , 793 4777.53
Stage III necrotizing enterocolitis in newborn
MCC
15
791 4
                                , 793 4780.72
Functional quadriplegia
MCC
01
052, 053788.91
Functional urinary incontinence
N
11
695, 696788.99
Other symptoms involving urinary system
N
11
695, 696795.07
Satisfactory cervical smear but lacking transformation zone
N
13
742, 743, 760, 761795.10
Abnormal glandular Papanicolaou smear of vagina
N
13
742, 743, 760, 761795.11
Papanicolaou smear of vagina with atypical squamous cells of undetermined significance (ASC-US)
N
13
742, 743, 760, 761795.12
Papanicolaou smear of vagina with atypical squamous cells cannot exclude high grade squamous intraepithelial lesion (ASC-H)
N
13
742, 743, 760, 761795.13
Papanicolaou smear of vagina with low grade squamous intraepithelial lesion (LGSIL)
N
13
742, 743, 760, 761795.14
Papanicolaou smear of vagina with high grade squamous intraepithelial lesion (HGSIL)
N
13
742, 743, 760, 761795.15
Vaginal high risk human papillomavirus (HPV) DNA test positive
N
13
742, 743, 760, 761795.16
Papanicolaou smear of vagina with cytologic evidence of malignancy
N
13
742, 743, 760, 761795.18
Unsatisfactory vaginal cytology smear
N
13
742, 743, 760, 761795.19
Other abnormal Papanicolaou smear of vagina and vaginal HPV
N
13
742, 743, 760, 761796.70
Abnormal glandular Papanicolaou smear of anus
N
06
393, 394, 395796.71
Papanicolaou smear of anus with atypical squamous cells of undetermined significance (ASC-US)
N
06
393, 394, 395796.72
Papanicolaou smear of anus with atypical squamous cells cannot exclude high grade squamous intraepithelial lesion (ASC-H)
N
06
393, 394, 395796.73
Papanicolaou smear of anus with low grade squamous intraepithelial lesion (LGSIL)
N
06
393, 394, 395796.74
Papanicolaou smear of anus with high grade squamous intraepithelial lesion (HGSIL)
N
06
393, 394, 395796.75
Anal high risk human papillomavirus (HPV) DNA test positive
N
06
393, 394, 395796.76
Papanicolaou smear of anus with cytologic evidence of malignancy
N
06
393, 394, 395796.77
Satisfactory anal smear but lacking transformation zone
N
06
393, 394, 395796.78
Unsatisfactory anal cytology smear
N
06
393, 394, 395796.79
Other abnormal Papanicolaou smear of anus and anal HPV
N
06
393, 394, 395997.31
Ventilator associated pneumonia
CC
04
205, 20615
791 2
                                , 793 2997.39
Other respiratory complications
CC
04
205, 20615
791 2
                                , 793 2998.30
Disruption of wound,  unspecified
CC
21
919, 920, 921( print page 23845)998.33
Disruption of traumatic wound repair
CC
21
919, 920, 921999.81
Extravasation of vesicant chemotherapy
CC
05
314, 315, 31615
791 2
                                , 793 2999.82
Extravasation of other vesicant agent
CC
05
314, 315, 31615
791 2
                                , 793 2999.88
Other infusion reaction
N
05
314, 315, 31615
791 2
                                , 793 2999.89
Other transfusion reaction
N
15
791 2
                                , 793 216
811, 812V07.51
Prophylactic use of selective estrogen receptor modulators (SERMs)
N
23
951V07.52
Prophylactic use of aromatase inhibitors
N
23
951V07.59
Prophylactic use of other agents affecting estrogen receptors and estrogen levels
N
23
951V13.51
Personal history of pathologic fracture
N
23
951V13.52
Personal history of stress fracture
N
23
951V13.59
Personal history of other musculoskeletal disorders
N
23
951V15.21
Personal history of undergoing in utero procedure during pregnancy
N
23
951V15.22
Personal history of undergoing in utero procedure while a fetus
N
23
951V15.29
Personal history of surgery to other organs
N
23
951V15.51
Personal history of traumatic fracture
N
23
951V15.59
Personal history of other injury
N
23
951V23.85
Pregnancy resulting from assisted reproductive technology
N
14
998V23.86
Pregnancy with history of in utero procedure during previous pregnancy
N
14
998V28.81
Encounter for fetal anatomic survey
N
23
951V28.82
Encounter for screening for risk of pre-term labor
N
23
951V28.89
Other specified antenatal screening
N
23
951V45.11
Renal dialysis status
N
23
951V45.12
Noncompliance with renal dialysis
N
23
951V45.87
Transplanted organ removal status
N
23
951V46.3
Wheelchair dependence
N
23
951V51.0
Encounter for breast reconstruction following mastectomy
N
09
606, 607V51.8
Other aftercare involving the use of plastic surgery
N
09
606, 607V87.01
Contact with and (suspected) exposure to arsenic
N
23
951V87.09
Contact with and (suspected) exposure to other hazardous metals
N
23
951V87.11
Contact with and (suspected) exposure to aromatic amines
N
23
951V87.12
Contact with and (suspected) exposure to benzene
N
23
951V87.19
Contact with and (suspected) exposure to other hazardous aromatic compounds
N
23
951V87.2
Contact with and (suspected) exposure to other potentially hazardous chemicals
N
23
951V87.31
Contact with and (suspected) exposure to mold
N
23
951V87.39
Contact with and (suspected) exposure to other potentially hazardous substances
N
23
951V87.41
Personal history of antineoplastic chemotherapy
N
23
949, 950V87.42
Personal history of monoclonal drug therapy
N
23
949, 950V87.49
Personal history of other drug therapy
N
23
949, 950V88.01
Acquired absence of both cervix and uterus
N
13
742, 743, 760, 761V88.02
Acquired absence of uterus with remaining cervical stump
N
13
742, 743, 760, 761V88.03
Acquired absence of cervix with remaining uterus
N
13
742, 743, 760, 761V89.01
Suspected problem with amniotic cavity and membrane not found
N
23
951V89.02
Suspected placental problem not found
N
23
951V89.03
Suspected fetal anomaly not found
N
23
951V89.04
Suspected problem with fetal growth not found
N
23
951V89.05
Suspected cervical shortening not found
N
23
951V89.09
Other suspected maternal and fetal condition not found
N
23
9511
                             Secondary diagnosis of acute leukemia2
                             Secondary diagnosis of major problem.3
                             The pressure ulcer site specific codes (707.00-707.09) will be non-CCs. The pressure ulcer stage III and IV codes will be classified as MCCs.4
                             Principal or secondary diagnosis of major problem.
 Table 6B.—New Procedure Codes
Procedure code
Description
O.R.
MDC
MS-DRG00.49
SuperSaturated oxygen therapy
N.00.58
Insertion of intra-aneurysm sac pressure monitoring device (intraoperative)
N.00.59
Intravascular pressure measurement of coronary arteries
N.00.67
Intravascular pressure measurement of intrathoracic arteries
N.00.68
Intravascular pressure measurement of peripheral arteries
N.00.69
Intravascular pressure measurement, other specified and unspecified vessels
N.( print page 23846)17.11
Laparoscopic repair of direct inguinal hernia with graft or prosthesis
Y
06
350, 351, 35217.12
Laparoscopic repair of indirect inguinal hernia with graft or prosthesis
Y
06
350, 351, 35217.13
Laparoscopic repair of inguinal hernia with graft or prosthesis, not otherwise specified
Y
06
350, 351, 35217.21
Laparoscopic bilateral repair of direct inguinal hernia with graft or prosthesis
Y
06
350, 351, 35217.22
Laparoscopic bilateral repair of indirect inguinal hernia with graft or prosthesis
Y
06
350, 351, 35217.23
Laparoscopic bilateral repair of inguinal hernia, one direct and one indirect, with graft or prosthesis
Y
06
350, 351, 35217.24
Laparoscopic bilateral repair of inguinal hernia with graft or prosthesis, not otherwise specified
Y
06
350, 351, 35217.31
Laparoscopic multiple segmental resection of large intestine
Y
06
329, 330, 33117
820, 821, 822, 826, 827, 82821
907, 908, 90924
957, 958, 95917.32
Laparoscopic cecectomy
Y
05
26406
329, 330, 33121
907, 908, 90924
957, 958, 95917.33
Laparoscopic right hemicolectomy
Y
05
26406
329, 330, 33117
820, 821, 822, 826, 827, 82821
907, 908, 90924
957, 958, 95917.34
Laparoscopic resection of transverse colon
Y
05
26406
329, 330, 33117
820, 821, 822, 826, 827, 82821
907, 908, 90924
957, 958, 95917.35
Laparoscopic left hemicolectomy
Y
05
26406
329, 330, 33110
628, 629, 63017
820, 821, 822, 826, 827, 82821
907, 908, 90924
957, 958, 95917.36
Laparoscopic sigmoidectomy
Y
06
329, 330, 33117
820, 821, 822, 826, 827, 82821
907, 908, 90924
957, 958, 95917.39
Other laparoscopic partial excision of large intestine
Y
05
26406
329, 330, 33117
820, 821, 822, 826, 827, 82821
907, 908, 90924
957, 958, 95937.36
Excision or destruction of left atrial appendage (LAA)
N.37.55
Removal of internal biventricular heart replacement system
Y
PRE
001, 00205
237, 23838.23
Intravascular spectroscopy
N.45.81
Laparoscopic total intra-abdominal colectomy
Y
05
26406
329, 330, 33117
820, 821, 822, 826, 827, 82821
907, 908, 90924
957, 958, 95945.82
Open total intra-abdominal colectomy
Y
05
26406
329, 330, 33117
820, 821, 822, 826, 827, 82821
907, 908, 90924
957, 958, 95945.83
Other and unspecified total intra-abdominal colectomy
Y
05
26406
329, 330, 33117
820, 821, 822, 826, 827, 82821
907, 908, 90924
957, 958, 95948.40
Pull-through resection of rectum, not otherwise specified
Y
06
332, 333, 334( print page 23847)17
820, 821, 822, 826, 827, 82821
907, 908, 90924
957, 958, 95948.42
Laparoscopic pull-through resection of rectum
Y
06
332, 333, 33417
820, 821, 822, 826, 827, 82821
907, 908, 90924
957, 958, 95948.43
Open pull-through resection of rectum
Y
06
332, 333, 33417
820, 821, 822, 826, 827, 82821
907, 908, 90924
957, 958, 95948.50
Abdominoperineal resection of the rectum, not otherwise specified
Y
06
332, 333, 33417
820, 821, 822, 826, 827, 82821
907, 908, 90924
957, 958, 95948.51
Laparoscopic abdominoperineal resection of the rectum
Y
06
332, 333, 33417
820, 821, 822, 826, 827, 82821
907, 908, 90924
957, 958, 95948.52
Open abdominoperineal resection of the rectum
Y
06
332, 333, 33417
820, 821, 822, 826, 827, 82821
907, 908, 90924
957, 958, 95948.59
Other abdominoperineal resection of the rectum
Y
06
332, 333, 33417
820, 821, 822, 826, 827, 82821
907, 908, 90924
957, 958, 95953.42
Laparoscopic repair of umbilical hernia with graft or prosthesis
Y
06
353, 354, 35553.43
Other laparoscopic umbilical herniorrhaphy
Y
06
353, 354, 35521
907, 908, 90924
957, 958, 95953.62
Laparoscopic incisional hernia repair with graft or prosthesis
Y
06
353, 354, 35521
907, 908, 90924
957, 958, 95953.63
Other laparoscopic repair of other hernia of anterior abdominal wall with graft or prosthesis
Y
06
353, 354, 35553.71
Laparoscopic repair of diaphragmatic hernia, abdominal approach
Y
04
163, 164, 16506
326, 327, 32821
907, 908, 90924
957, 958, 95953.72
Other and open repair of diaphragmatic hernia, abdominal approach
Y
04
163, 164, 16506
326, 327, 32821
907, 908, 90924
957, 958, 95953.75
Repair of diaphragmatic hernia, abdominal approach, not otherwise specified
Y
04
163, 164, 16506
326, 327, 32821
907, 908, 90924
957, 958, 95953.83
Laparoscopic repair of diaphragmatic hernia, with thoracic approach
Y
04
163, 164, 16506
326, 327, 32821
907, 908, 90924
957, 958, 95953.84
Other and open repair of diaphragmatic hernia, with thoracic approach
Y
04
163, 164, 16506
326, 327, 32821
907, 908, 90924
957, 958, 95980.53
Repair of the anulus fibrosus with graft or prosthesis
Y
01
028, 029, 03008
490, 49117
820, 821, 822, 826, 827, 82821
907, 908, 90924
957, 958, 95980.54
Other and unspecified repair of the anulus fibrosus
Y
01
028, 029, 03008
490, 49117
820, 821, 822, 826, 827, 828( print page 23848)21
907, 908, 90924
957, 958, 959
 Table 6C.—Invalid Diagnosis Codes
Diagnosis code
Description
CC
MDC
MS-DRG046.1
Jakob-Creutzfeldt disease
CC
01
056, 057051.0
Cowpox
N
18
865, 866136.2
Specific infections by free-living amebae
MCC
18
867, 868, 869259.5
Androgen insensitivity syndrome
N
10
643, 644, 645337.0
Idiopathic peripheral autonomic neuropathy
CC
01
073, 074511.8
Other specified forms of pleural effusion, except tuberculous
MCC
04
186, 187, 18815
791 1
                                , 793 1599.7
Hematuria
N
11
695, 69615
791 1
                                , 793 1611.8
Other specified disorders of breast
N
09
600, 601695.1
Erythema multiforme
CC
09
595, 596729.9
Other and unspecified disorders of soft tissue
N
08
555, 556760.6
Surgical operation on mother
N
15
794777.5
Necrotizing enterocolitis in fetus or newborn
MCC
15
791 2
                                , 793 2788.9
Other symptoms involving urinary system
N
11
695, 696795.1
Nonspecific abnormal Papanicolaou smear of other site
N
04
180, 181, 182997.3
Respiratory complications
CC
04
205, 20615
791 1
                                , 793 1999.8
Other transfusion reaction
CC
15
791 1
                                , 793 116
811, 812V13.5
Personal history of other musculoskeletal disorders
N
23
951V15.2
Personal history of surgery to other major organs
N
23
951V15.5
Personal history of injury
N
23
951V28.8
Encounter for other specified antenatal screening
N
23
951V45.1
Renal dialysis status
N
23
951V51
Aftercare involving the use of plastic surgery
N
09
606, 6071
                             Principal or secondary diagnosis of major problem.2
                             Principal or secondary diagnosis of major problem.
 Table 6D.—Invalid Procedure Codes
Procedure code
Description
O.R.
MDC
MS-DRG45.8
Total intra-abdominal colectomy
Y
05
26406
329, 330, 33117
820, 821, 822, 826, 827, 82821
907, 908, 90924
957, 958, 95948.5
Abdominoperineal resection of rectum
Y
06
332, 333, 33417
820, 821, 822, 826, 827, 82821
907, 908, 90924
957, 958, 95953.7
Repair of diaphragmatic hernia, abdominal approach
Y
04
163, 164, 16506
326, 327, 32821
907, 908, 90924
957, 958, 959
 Table 6E.—Revised Diagnosis Code Titles
Diagnosis code
Description
CC
MDC
MS-DRG203.00
Multiple myeloma, without mention of having achieved remission
CC
17
820, 821, 822, 823, 824, 825, 840, 841, 842( print page 23849)203.10
Plasma cell leukemia, without mention of having achieved remission
CC
17
820, 821, 822, 823, 824, 825, 840, 841, 842203.80
Other immunoproliferative neoplasms, without mention of having achieved remission
CC
17
820, 821, 822, 823, 824, 825, 840, 841, 842204.00
Acute lymphoid leukemia, without mention of having achieved remission
CC
17
820, 821, 822, 834, 835, 836, 837 1
                                , 838 1
                                , 839 1204.10
Chronic lymphoid leukemia, without mention of having achieved remission
CC
17
820, 821, 822, 823, 824, 825, 840, 841, 842204.20
Subacute lymphoid leukemia, without mention of having achieved remission
CC
17
820, 821, 822, 823, 824, 825, 840, 841, 842204.80
Other lymphoid leukemia, without mention of having achieved remission
CC
17
820, 821, 822, 823, 824, 825, 840, 841, 842204.90
Unspecified lymphoid leukemia, without mention of having achieved remission
CC
17
820, 821, 822, 823, 824, 825, 840, 841, 842205.00
Acute myeloid leukemia, without mention of having achieved remission
CC
17
820, 821, 822, 834, 835, 836, 837 1
                                , 838 1
                                , 839 1205.10
Chronic myeloid leukemia, without mention of having achieved remission
CC
17
820, 821, 822, 823, 824, 825, 840, 841, 842205.20
Subacute myeloid leukemia, without mention of having achieved remission
CC
17
820, 821, 822, 823, 824, 825, 840, 841, 842205.30
Myeloid sarcoma, without mention of having achieved remission
CC
17
820, 821, 822, 823, 824, 825, 840, 841, 842205.80
Other myeloid leukemia, without mention of having achieved remission
CC
17
820, 821, 822, 823, 824, 825, 840, 841, 842205.90
Unspecified myeloid leukemia, without mention of having achieved remission
CC
17
820, 821, 822, 823, 824, 825, 840, 841, 842206.00
Acute monocytic leukemia, without mention of having achieved remission
CC
17
820, 821, 822, 834, 835, 836, 837 1
                                , 838 1
                                , 839 1206.10
Chronic monocytic leukemia, without mention of having achieved remission
CC
17
820, 821, 822, 823, 824, 825, 840, 841, 842206.20
Subacute monocytic leukemia, without mention of having achieved remission
CC
17
820, 821, 822, 823, 824, 825, 840, 841, 842206.80
Other monocytic leukemia, without mention of having achieved remission
CC
17
820, 821, 822, 823, 824, 825, 840, 841, 842206.90
Unspecified monocytic leukemia, without mention of having achieved remission
CC
17
820, 821, 822, 823, 824, 825, 840, 841, 842207.00
Acute erythremia and erythroleukemia, without mention of having achieved remission
CC
17
820, 821, 822, 834, 835, 836, 837 1
                                , 838 1
                                , 839 1207.10
Chronic erythremia, without mention of having achieved remission
CC
17
820, 821, 822, 823, 824, 825, 840, 841, 842207.20
Megakaryocytic leukemia, without mention of having achieved remission
CC
17
820, 821, 822, 823, 824, 825, 840, 841, 842207.80
Other specified leukemia, without mention of having achieved remission
CC
17
820, 821, 822, 823, 824, 825, 840, 841, 842( print page 23850)208.00
Acute leukemia of unspecified cell type, without mention of having achieved remission
CC
17
820, 821, 822, 834, 835, 836, 837 1
                                , 838 1
                                , 839 1208.10
Chronic leukemia of unspecified cell type, without mention of having achieved remission
CC
17
820, 821, 822, 823, 824, 825, 840, 841, 842208.20
Subacute leukemia of unspecified cell type, without mention of having achieved remission
CC
17
820, 821, 822, 823, 824, 825, 840, 841, 842208.80
Other leukemia of unspecified cell type, without mention of having achieved remission
CC
17
820, 821, 822, 823, 824, 825, 840, 841, 842208.90
Unspecified leukemia, without mention of having achieved remission
CC
17
820, 821, 822, 823, 824, 825, 840, 841, 842346.00
Migraine with aura, without mention of intractable migraine without mention of status migrainosus
N
01
102, 103346.01
Migraine with aura, with intractable migraine, so stated, without mention of status migrainosus
N
01
102, 103346.10
Migraine without aura, without mention of intractable migraine without mention of status migrainosus
N
01
102, 103346.11
Migraine without aura, with intractable migraine, so stated, without mention of status migrainosus
N
01
102, 103346.20
Variants of migraine, not elsewhere classified, without mention of intractable migraine without mention of status migrainosus
N
01
102, 103346.21
Variants of migraine, not elsewhere classified, with intractable migraine, so stated, without mention of status migrainosus
N
01
102, 103346.80
Other forms of migraine, without mention of intractable migraine without mention of status migrainosus
N
01
102, 103346.81
Other forms of migraine, with intractable migraine, so stated, without mention of status migrainosus
N
01
102, 103386.00
Ménière's disease, unspecified
N
03
149386.01
Active Ménière's disease, cochleovestibular
N
03
149386.02
Active Ménière's disease, cochlear
N
03
149386.03
Active Ménière's disease, vestibular
N
03
149386.04
Inactive Ménière's disease
N
03
149707.00
Pressure ulcer, unspecified site
N 2
09
573, 574, 575, 592, 593, 594707.01
Pressure ulcer, elbow
N 2
09
573, 574, 575, 592, 593, 594707.02
Pressure ulcer, upper back
N 2
09
573, 574, 575, 592, 593, 594707.03
Pressure ulcer, lower back
N 2
09
573, 574, 575, 592, 593, 594707.04
Pressure ulcer, hip
N 2
09
573, 574, 575, 592, 593, 594707.05
Pressure ulcer, buttock
N 2
09
573, 574, 575, 592, 593, 594707.06
Pressure ulcer, ankle
N 2
09
573, 574, 575, 592, 593, 594707.07
Pressure ulcer, heel
N 2
09
573, 574, 575, 592, 593, 594707.09
Pressure ulcer, other site
N 2
09
573, 574, 575, 592, 593, 594776.9
Unspecified hematological disorder specific to newborn
N
15
794795.08
Unsatisfactory cervical cytology smear
N
13
742, 743, 760, 761998.31
Disruption of internal operation (surgical) wound
CC
21
919, 920, 921V28.3
Encounter for routine screening for malformation using ultrasonics
N
23
951V45.71
Acquired absence of breast and nipple
N
23
9511
                             Secondary diagnosis of acute leukemia.2
                             The pressure ulcer site specific codes (707.00-707.09) will be non-CCs. The pressure ulcer stage III and IV codes will be classified as MCCs.
 
 
 Table 6F.—Revised Procedure Code Titles
Procedure code
Description
O.R.
MDC
MS-DRG37.52
Implantation of internal biventricular heart replacement system
Y
PRE
001 1
                                , 002 137.53
Replacement or repair of thoracic unit of (total) replacement heart system
Y
05
21537.54
Replacement or repair of other implantable component of (total) replacement heart system
Y
05
21545.71
Open and other multiple segmental resection of large intestine
Y
06
329, 330, 33117
820, 821, 822, 826, 827, 82821
907, 908, 90924
957, 958, 95945.72
Open and other cecectomy
Y
05
26406
329, 330, 33121
907, 908, 90924
957, 958, 95945.73
Open and other right hemicolectomy
Y
05
26406
329, 330, 33117
820, 821, 822, 826, 827, 82821
907, 908, 90924
957, 958, 95945.74
Open and other resection of transverse colon
Y
05
26406
329, 330, 33117
820, 821, 822, 826, 827, 82821
907, 908, 90924
957, 958, 95945.75
Open and other left hemicolectomy
Y
05
26406
329, 330, 33110
628, 629, 63017
820, 821, 822, 826, 827, 82821
907, 908, 90924
957, 958, 95945.76
Open and other sigmoidectomy
Y
06
329, 330, 33117
820, 821, 822, 826, 827, 82821
907, 908, 90924
957, 958, 95945.79
Other and unspecified partial excision of large intestine
Y
05
26406
329, 330, 33117
820, 821, 822, 826, 827, 82821
907, 908, 90924
957, 958, 95953.01
Other and open repair of direct inguinal hernia
Y
06
350, 351, 35253.02
Other and open repair of indirect inguinal hernia
Y
06
350, 351, 35253.03
Other and open repair of direct inguinal hernia with graft or prosthesis
Y
06
350, 351, 35253.04
Other and open repair of indirect inguinal hernia with graft or prosthesis
Y
06
350, 351, 35253.11
Other and open bilateral repair of direct inguinal hernia
Y
06
350, 351, 35253.12
Other and open bilateral repair of indirect inguinal hernia
Y
06
350, 351, 35253.13
Other and open bilateral repair of inguinal hernia, one direct and one indirect
Y
06
350, 351, 35253.14
Other and open bilateral repair of direct inguinal hernia with graft or prosthesis
Y
06
350, 351, 35253.15
Other and open bilateral repair of indirect inguinal hernia with graft or prosthesis
Y
06
350, 351, 35253.16
Other and open bilateral repair of inguinal hernia, one direct and one indirect, with graft or prosthesis
Y
06
350, 351, 35253.41
Other and open repair of umbilical hernia with graft or prosthesis
Y
06
353, 354, 35553.49
Other open umbilical herniorrhaphy
Y
06
353, 354, 35521
907, 908, 90924
957, 958, 95953.61
Other open incisional hernia repair with graft or prosthesis
Y
06
353, 354, 35521
907, 908, 90924
957, 958, 95953.69
Other and open repair of other hernia of anterior abdominal wall with graft or prosthesis
Y
06
353, 354, 35581.65
Percutaneous vertebroplasty
Y
08
515, 516, 51721
907, 908, 90924
957, 958, 95981.66
Percutaneous vertebral augmentation
Y
08
515, 516, 51721
907, 908, 90924
957, 958, 9591
                             Note MS-DRG change.
 
 
 Table 7A.—Medicare Prospective Payment System Selected Percentile Lengths of Stay: FY 2007 MedPAR Update—December 2007 Grouper V25.0 MS-DRGs
MS-DRG
Number of discharges
Arithmetic mean LOS
10th 
                                 percentile
25th 
                                 percentile
50th 
                                 percentile
75th 
                                 percentile
90th 
                                 percentile1
655
40.2107
12
17
31
51
832
287
24.7456
9
12
17
28
483
23,205
39.6406
16
22
32
48
684
21,267
28.8412
11
17
24
35
495
635
21.1717
7
10
15
26
426
229
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89,951
3.7401
1
2
3
5
7813
14,232
5.1669
1
2
4
6
10814
1,554
6.7368
2
3
5
8
13815
3,297
4.9706
1
2
4
6
9816
2,147
3.5198
1
2
3
4
7820
1,299
17.7229
5
8
14
23
34821
2,474
7.8646
1
3
6
10
16822
1,893
3.5288
1
1
3
4
7823
2,178
15.4385
5
8
12
20
29824
2,974
8.7492
2
4
7
11
17825
1,748
4.3084
1
1
3
6
9826
524
15.0401
4
7
11
19
29827
1,254
7.9793
2
4
6
10
16828
799
3.7722
1
2
3
5
7( print page 23861)829
1,171
10.6576
2
4
7
13
22830
521
3.7179
1
1
2
4
8834
4,028
15.4615
2
4
10
23
36835
2,703
10.4351
2
3
6
12
28836
1,622
5.1843
1
2
3
6
10837
1,043
23.1419
5
10
23
31
42838
1,320
12.2629
3
4
6
21
29839
1,467
6.4104
3
4
5
6
10840
9,659
10.4408
3
5
8
13
21841
10,035
6.9221
2
3
5
9
13842
5,310
4.5563
1
2
4
6
9843
1,350
8.5222
2
4
6
10
17844
2,412
6.0987
2
3
5
8
12845
804
4.3022
1
2
3
6
8846
2,113
8.4179
2
3
5
10
18847
23,862
3.3508
1
2
3
4
6848
1,723
3.1294
1
1
3
4
5849
1,477
5.9709
2
3
5
6
12853
34,852
16.6669
5
8
13
21
30854
6,643
11.1072
4
6
9
14
20855
459
7.0261
2
4
6
9
13856
5,892
15.3839
4
7
12
19
30857
9,614
8.4628
3
4
7
10
16858
3,246
5.6741
2
3
5
7
10862
7,929
8.1778
2
4
6
10
16863
21,420
5.1976
2
3
4
7
9864
18,946
4.0639
1
2
3
5
7865
1,705
6.7009
2
3
4
8
14866
8,182
3.5351
1
2
3
4
7867
5,062
9.6254
2
4
7
12
19868
2,641
5.7819
2
3
4
7
11869
1,103
4.3128
2
2
4
5
7870
21,199
15.4758
6
9
13
19
27871
216,384
7.4839
2
3
6
10
14872
90,892
5.7138
2
3
5
7
10876
857
11.9498
2
5
9
14
24880
9,282
3.1518
1
1
2
4
6881
4,623
4.1888
1
2
3
5
8882
1,556
4.4274
1
2
3
6
9883
757
7.3725
1
2
4
8
15884
19,006
5.4936
2
3
4
6
10885
80,806
7.6211
2
3
6
9
14886
404
6.0767
1
2
4
7
12887
393
4.6209
1
2
3
5
8894
4,369
2.9528
1
1
2
3
4895
6,958
10.4997
3
4
6
7
9896
5,490
6.6087
2
3
5
8
13897
36,053
4.0582
1
2
3
5
6901
924
15.0693
3
6
10
18
30902
2,031
7.7371
2
3
6
9
16903
1,500
4.5680
1
2
4
6
9904
1,047
11.2178
2
4
7
13
23905
811
4.6523
1
2
4
6
8906
712
3.1657
1
1
2
4
6907
8,462
11.6494
2
5
8
14
23908
8,319
6.7682
2
3
5
8
13909
5,447
3.6367
1
1
3
5
7913
804
5.6629
1
3
4
7
12914
6,609
3.4330
1
2
3
4
6915
1,078
4.7356
1
2
3
6
9916
5,508
2.1044
1
1
2
3
4917
15,775
5.1645
1
2
4
6
11918
35,653
2.7260
1
1
2
3
5919
11,089
6.3723
2
3
5
8
13920
13,970
4.3608
1
2
3
5
8921
9,423
2.9687
1
1
2
4
6922
1,047
5.9933
1
2
4
7
12923
3,952
3.2338
1
1
2
4
6927
211
31.1374
7
15
26
41
60928
818
15.9694
4
7
12
21
31( print page 23862)929
438
7.6872
1
3
6
10
16933
139
4.3453
1
1
1
4
8934
659
6.1988
1
3
5
8
12935
2,201
5.4330
1
2
4
7
11939
671
10.0611
2
4
7
13
20940
1,320
5.4220
1
2
4
7
12941
1,707
2.7299
1
1
2
3
5945
6,244
10.4947
4
6
8
12
15946
3,055
7.8628
3
5
6
7
8947
9,715
5.0101
1
2
4
6
10948
47,722
3.4806
1
2
3
4
6949
632
4.1092
1
1
2
4
6950
387
3.4858
1
1
2
4
5951
940
4.6436
1
1
2
3
6955
443
12.2822
2
5
10
16
26956
3,975
9.2896
4
5
7
11
17957
1,311
14.8795
2
7
12
19
28958
1,146
10.4031
3
6
8
13
19959
286
6.2413
2
3
5
8
11963
1,586
9.5214
2
4
8
13
19964
2,573
6.2274
2
3
5
8
11965
1,071
4.1391
1
2
3
5
7969
639
18.8279
4
8
14
22
36970
136
9.8309
2
3
7
12
17974
5,920
10.3723
2
4
8
13
21975
4,674
7.0148
2
3
5
9
13976
2,617
4.9308
2
2
4
6
8977
4,565
5.2931
1
2
4
6
10981
25,479
15.1488
5
8
12
19
28982
18,329
9.7455
3
5
8
12
18983
6,112
5.3613
1
2
4
7
11984
671
14.6811
5
8
13
18
25985
903
9.6512
2
5
8
13
18986
731
5.3338
1
2
3
7
12987
8,240
13.0089
4
6
10
16
24988
11,583
7.8090
2
3
6
10
15989
5,796
4.1046
1
1
3
6
911,387,276
  Table 7B.—Medicare Prospective Payment System Selected Percentile Lengths of Stay: FY 2007 MedPAR Update—December 2007 Grouper V26.0 MS-DRGs
MS-DRG
Number of discharges
Arithmetic mean LOS
10th 
                                 percentile
25th 
                                 percentile
50th 
                                 percentile
75th 
                                 percentile
90th 
                                 percentile1
655
40.2107
12
17
31
51
832
287
24.7456
9
12
17
28
483
23,205
39.6406
16
22
32
48
684
21,267
28.8412
11
17
24
35
495
635
21.1717
7
10
15
26
426
229
10.2576
6
7
9
12
177
356
19.6517
8
10
15
22
388
483
11.9337
6
7
9
13
209
1,346
21.9725
8
16
20
25
3510
163
10.7791
6
7
8
11
1911
1,264
16.7302
6
9
13
20
3012
1,907
10.6754
4
6
9
13
1813
1,268
6.9267
3
4
6
8
1120
885
18.3525
6
10
17
24
3221
530
15.4472
8
11
14
19
2522
212
9.3726
2
6
9
12
1523
3,730
12.6794
2
5
10
17
2524
2,092
9.0263
1
4
8
12
1825
8,697
13.0331
4
6
10
17
2526
11,781
8.2206
2
4
7
11
15( print page 23863)27
13,695
4.5403
1
2
4
6
928
1,666
14.3055
4
7
11
18
2729
3,070
7.1091
1
3
6
9
1430
3,398
3.7310
1
1
3
5
731
1,024
13.1377
3
6
10
18
2732
2,780
5.9781
1
2
4
8
1433
3,623
3.0395
1
1
2
4
634
765
7.2261
1
2
5
9
1535
2,239
3.2823
1
1
2
4
836
6,947
1.5949
1
1
1
2
337
4,841
8.5478
2
3
7
11
1738
14,146
3.7666
1
1
2
5
939
51,927
1.8278
1
1
1
2
340
4,765
13.3490
3
6
10
17
2541
7,573
7.2006
1
3
6
9
1442
4,859
3.6300
1
1
2
5
852
1,163
6.7395
2
3
5
8
1453
587
4.0102
1
2
3
5
754
5,240
6.9504
2
3
5
9
1455
16,289
5.0708
1
2
4
6
1056
8,250
7.7668
2
3
6
9
1457
47,224
4.9743
2
3
4
6
958
736
7.5978
2
4
6
9
1559
2,752
5.1432
2
3
4
6
960
4,068
3.9668
2
2
4
5
761
1,586
8.9426
2
4
7
11
1762
2,464
6.2683
3
4
5
8
1163
1,323
4.5110
2
3
4
6
864
55,734
7.4669
2
3
6
10
1565
105,000
5.2179
2
3
4
6
966
89,325
3.7141
1
2
3
5
767
1,397
5.8232
2
3
5
7
1168
11,402
3.4467
1
2
3
4
669
101,817
2.9920
1
2
2
4
570
7,341
7.8574
2
4
6
10
1571
9,526
5.5568
2
3
4
7
1072
5,739
3.5389
1
2
3
4
773
9,223
6.2394
2
3
5
8
1274
31,500
4.3070
1
2
3
5
875
1,238
7.3021
2
4
6
9
1476
873
4.1340
2
2
4
5
777
1,211
6.6821
2
3
5
9
1278
1,405
4.4157
2
2
4
6
879
931
3.3845
1
2
3
4
680
1,861
5.1016
1
2
4
6
1081
7,124
3.5267
1
2
3
4
682
1,757
6.4087
1
1
4
9
1583
2,049
4.9551
1
2
4
7
1084
2,769
3.1268
1
1
2
4
685
5,879
7.6399
2
3
6
10
1586
11,468
5.0024
1
3
4
6
987
12,958
3.2740
1
2
3
4
688
711
5.8748
1
3
4
7
1289
2,733
3.7603
1
2
3
5
790
3,089
2.5494
1
1
2
3
591
7,605
6.3657
2
3
5
8
1392
16,265
4.4647
1
2
4
6
893
16,121
3.2188
1
2
3
4
694
1,473
11.8547
4
6
10
15
2295
1,030
8.6359
3
5
7
11
1596
757
6.1744
2
4
6
8
1197
1,192
12.6023
4
7
11
16
2398
1,005
8.3522
3
5
7
10
1599
641
5.8752
2
3
5
8
11100
16,989
6.3526
2
3
5
8
12101
56,991
3.6950
1
2
3
5
7102
1,080
4.5306
1
2
3
6
9103
13,735
3.1270
1
2
2
4
6113
525
5.5981
1
2
4
8
12114
555
2.6090
1
1
2
3
5( print page 23864)115
1,046
4.3222
1
2
4
5
7116
546
4.0678
1
1
2
5
8117
996
2.1596
1
1
1
2
3121
542
5.4576
2
3
4
7
10122
617
4.0454
2
2
3
5
7123
2,785
2.8747
1
2
2
4
5124
749
5.2697
1
2
4
7
10125
4,661
3.5134
1
2
3
4
7129
1,353
5.1803
1
2
4
6
11130
1,073
2.9385
1
1
2
4
6131
929
5.7492
1
2
4
8
12132
886
2.6501
1
1
2
3
5133
1,981
5.3296
1
2
4
7
11134
3,362
2.2329
1
1
1
3
4135
352
5.8295
1
2
4
8
12136
472
2.3305
1
1
1
3
5137
773
5.4062
1
2
4
7
11138
886
2.5237
1
1
2
3
5139
1,490
1.8456
1
1
1
2
3146
674
9.4466
2
4
7
12
19147
1,364
6.1320
1
2
4
8
12148
847
3.8040
1
1
3
5
8149
38,817
2.7185
1
1
2
3
5150
949
5.1981
1
2
4
6
10151
6,810
2.8921
1
1
2
4
5152
1,726
4.4571
1
2
3
5
8153
11,433
3.2168
1
2
3
4
6154
1,899
6.3381
2
3
5
8
12155
4,471
4.4187
1
2
4
6
8156
4,819
3.1731
1
2
3
4
6157
1,044
6.6542
1
3
5
8
14158
3,219
4.5281
1
2
3
6
9159
2,355
3.0522
1
1
2
4
6163
13,614
14.9476
5
8
13
19
27164
17,887
8.0977
3
5
7
10
15165
13,805
5.1442
2
3
5
6
9166
20,549
12.9161
4
7
10
16
24167
20,520
7.9756
2
4
7
10
15168
5,467
5.2532
1
2
4
7
10175
12,682
7.2650
3
4
6
9
12176
41,338
5.3283
2
3
5
7
9177
63,750
9.1032
3
5
7
12
17178
70,831
7.3794
3
4
6
9
13179
26,087
5.5654
2
3
5
7
10180
22,324
7.9001
2
4
6
10
15181
30,220
5.9078
2
3
5
8
11182
5,446
4.1761
1
2
3
5
8183
1,856
7.2338
2
4
6
9
13184
4,320
4.5829
2
3
4
6
8185
2,506
3.4066
1
2
3
4
6186
9,239
7.4006
2
4
6
9
14187
10,028
5.3216
2
3
4
7
10188
5,014
3.9928
1
2
3
5
8189
113,067
6.1459
2
3
5
8
11190
58,781
6.2972
2
3
5
8
12191
118,162
5.0156
2
3
4
6
9192
184,764
3.9705
1
2
3
5
7193
87,315
6.7517
2
4
6
8
12194
253,950
5.2660
2
3
4
7
9195
133,231
4.0792
2
2
4
5
7196
5,388
7.3537
3
4
6
9
14197
6,796
5.3899
2
3
4
7
10198
4,616
4.0804
1
2
3
5
7199
3,208
8.3030
2
4
7
11
16200
8,382
5.0894
1
2
4
7
10201
3,467
4.0580
1
2
3
5
8202
29,252
4.3530
1
2
4
5
8203
36,870
3.3859
1
2
3
4
6204
25,669
2.8746
1
1
2
4
5205
5,848
5.5050
1
2
4
7
10( print page 23865)206
21,532
3.4393
1
2
3
4
6207
39,505
15.0709
6
9
13
18
25208
76,444
7.2241
1
3
6
10
14215
141
14.1844
1
3
9
17
31216
8,616
18.3713
8
11
16
23
31217
7,236
12.3046
6
8
11
15
20218
2,554
9.0568
5
6
8
11
14219
10,525
13.9944
6
8
11
17
26220
13,928
8.5619
5
6
7
10
14221
7,032
6.4428
4
5
6
7
10222
2,771
13.0949
5
7
11
17
23223
5,080
6.2701
1
3
5
8
12224
1,911
11.3673
4
6
9
14
21225
5,076
5.6420
2
3
5
7
10226
7,064
9.3342
1
3
7
12
19227
42,807
2.8263
1
1
1
3
7228
2,974
14.7078
6
8
13
18
26229
3,596
9.1096
4
6
8
11
15230
1,566
6.4757
3
4
6
8
11231
1,446
13.3811
6
8
11
17
24232
1,515
9.1868
5
7
8
11
14233
16,254
14.1787
7
9
12
17
24234
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7
10
15624
383
6.0261
2
3
5
7
10625
1,274
7.0879
1
2
5
9
15626
2,538
3.1233
1
1
2
3
7627
14,026
1.5172
1
1
1
2
2628
3,366
11.1851
2
4
8
14
23629
4,160
8.7418
3
5
7
11
16630
534
5.5281
1
2
4
7
11637
17,104
6.0581
2
3
5
7
12638
42,581
4.2659
1
2
3
5
8639
38,312
3.0382
1
2
2
4
5640
60,806
5.4332
1
2
4
7
11641
201,324
3.8256
1
2
3
5
7642
1,492
5.1810
1
2
4
6
9643
5,176
7.6103
2
4
6
9
14644
11,788
5.4597
2
3
4
7
10645
8,179
3.8912
1
2
3
5
7652
10,067
7.7888
4
5
6
9
13653
1,697
16.8981
7
9
13
21
31654
3,452
9.8624
5
7
8
11
16655
1,633
6.5150
3
5
7
8
10656
3,918
10.1146
4
5
8
12
19657
7,422
5.9603
3
4
5
7
10658
8,271
3.7356
2
2
3
5
6659
4,658
11.2003
3
5
8
14
22( print page 23870)660
7,594
6.5146
2
3
5
8
13661
4,260
3.2758
1
2
3
4
6662
949
10.2740
2
4
8
14
20663
2,054
5.2639
1
2
4
7
11664
4,390
2.1223
1
1
1
2
4665
654
11.0627
3
5
9
14
21666
2,092
6.3595
1
2
4
9
14667
3,616
2.8695
1
1
2
3
6668
3,833
8.5265
2
4
7
11
16669
12,746
4.4236
1
2
3
6
9670
11,687
2.5131
1
1
2
3
5671
808
5.9468
1
2
4
8
12672
943
2.5302
1
1
2
3
5673
12,542
9.7323
1
3
7
13
21674
11,715
7.1905
1
2
5
9
15675
7,824
2.0675
1
1
1
2
4682
82,091
7.1569
2
3
5
9
14683
132,320
5.6544
2
3
5
7
10684
44,932
3.8913
1
2
3
5
7685
2,331
3.4822
1
1
2
4
7686
1,597
7.5717
2
3
6
9
15687
3,261
5.3502
1
3
4
7
10688
1,073
3.2591
1
1
2
4
6689
55,995
6.2004
2
3
5
8
11690
198,101
4.2356
2
2
4
5
7691
821
3.9586
1
2
3
5
8692
491
2.3992
1
1
2
3
5693
2,429
4.8345
1
2
4
6
10694
18,000
2.5778
1
1
2
3
5695
975
5.5251
1
3
4
7
11696
10,518
3.2901
1
2
3
4
6697
592
3.1115
1
1
2
4
6698
23,320
6.6546
2
3
5
8
13699
24,207
4.8302
1
2
4
6
9700
12,279
3.5497
1
2
3
4
7707
5,979
4.4131
1
2
3
5
8708
18,063
2.1475
1
1
2
3
4709
762
6.5341
1
2
4
8
15710
1,831
1.7739
1
1
1
2
3711
790
8.1684
1
3
6
10
16712
705
3.0496
1
1
2
4
7713
10,252
4.1916
1
2
3
5
9714
28,797
1.9430
1
1
2
2
3715
531
6.2806
1
2
4
8
13716
1,273
1.4289
1
1
1
1
2717
703
7.2319
2
3
5
9
14718
589
2.7640
1
1
2
3
5722
745
7.5852
2
3
6
10
14723
1,949
5.2678
1
3
4
7
10724
578
3.1522
1
1
2
4
6725
755
5.5007
2
3
4
7
10726
3,716
3.4739
1
2
3
4
6727
1,294
6.3995
2
3
5
8
12728
6,158
4.0404
1
2
3
5
7729
591
5.5736
1
2
4
7
10730
471
3.0786
1
1
2
4
6734
1,362
7.9941
3
4
6
9
15735
1,130
3.3602
1
2
3
4
5736
854
13.7752
5
7
11
17
25737
3,293
7.1786
3
4
6
8
13738
863
3.8714
2
3
3
5
6739
1,013
10.1955
3
5
8
12
20740
4,326
5.2305
2
3
4
6
9741
6,014
2.9940
1
2
3
4
5742
10,950
4.5175
2
2
3
5
8743
32,325
2.2608
1
2
2
3
3744
1,520
5.8355
1
2
4
7
12745
1,694
2.5738
1
1
2
3
5746
2,634
4.2134
1
2
3
5
8747
10,409
1.8856
1
1
2
2
3( print page 23871)748
19,857
1.7358
1
1
1
2
3749
982
9.3401
2
4
7
12
19750
435
3.1103
1
1
2
4
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978
8.3395
2
4
7
11
16755
2,933
5.6870
2
3
4
7
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677
3.1359
1
1
2
4
6757
1,393
8.1436
3
4
6
10
16758
1,605
6.0536
2
3
5
7
11759
1,239
4.4722
2
2
4
5
8760
1,700
3.9594
1
2
3
5
8761
1,749
2.4351
1
1
2
3
5765
2,754
5.0359
2
3
4
5
7766
2,686
3.1601
2
2
3
4
4767
132
3.3712
2
2
2
3
5768
6
3.5000
1
2
3
6
6769
98
4.6224
1
2
3
6
11770
202
2.2277
1
1
1
2
5774
1,506
3.1886
2
2
2
3
5775
5,768
2.2394
1
2
2
3
3776
511
3.3112
1
2
2
4
7777
206
2.2136
1
1
2
3
4778
474
3.0127
1
1
2
3
5779
110
2.1182
1
1
1
2
3780
40
1.4500
1
1
1
1
3781
3,017
3.7630
1
1
2
4
7782
171
2.4971
1
1
1
2
4790
1
25.0000
125
125
125
125
125799
566
14.0583
5
7
11
18
26800
705
7.8610
3
4
6
9
15801
557
4.9336
2
2
4
6
9802
765
12.2706
3
5
9
15
25803
1,070
6.6738
1
3
5
8
14804
987
3.4215
1
1
3
4
6808
6,088
8.2467
3
4
6
10
16809
12,869
5.3247
2
3
4
7
10810
2,786
4.0337
1
2
3
5
7811
21,404
5.6912
1
2
4
7
11812
89,951
3.7401
1
2
3
5
7813
14,232
5.1669
1
2
4
6
10814
1,554
6.7368
2
3
5
8
13815
3,297
4.9706
1
2
4
6
9816
2,147
3.5198
1
2
3
4
7820
1,299
17.7229
5
8
14
23
34821
2,474
7.8646
1
3
6
10
16822
1,893
3.5288
1
1
3
4
7823
2,178
15.4385
5
8
12
20
29824
2,974
8.7492
2
4
7
11
17825
1,748
4.3084
1
1
3
6
9826
524
15.0401
4
7
11
19
29827
1,254
7.9793
2
4
6
10
16828
799
3.7722
1
2
3
5
7829
1,171
10.6576
2
4
7
13
22830
521
3.7179
1
1
2
4
8834
4,028
15.4615
2
4
10
23
36835
2,703
10.4351
2
3
6
12
28836
1,622
5.1843
1
2
3
6
10837
1,043
23.1419
5
10
23
31
42838
1,320
12.2629
3
4
6
21
29839
1,467
6.4104
3
4
5
6
10840
9,659
10.4408
3
5
8
13
21841
10,035
6.9221
2
3
5
9
13842
5,310
4.5563
1
2
4
6
9843
1,350
8.5222
2
4
6
10
17844
2,412
6.0987
2
3
5
8
12845
804
4.3022
1
2
3
6
8846
2,113
8.4179
2
3
5
10
18847
23,862
3.3508
1
2
3
4
6848
1,723
3.1294
1
1
3
4
5849
1,477
5.9709
2
3
5
6
12853
34,852
16.6669
5
8
13
21
30( print page 23872)854
6,643
11.1072
4
6
9
14
20855
459
7.0261
2
4
6
9
13856
5,892
15.3839
4
7
12
19
30857
9,614
8.4628
3
4
7
10
16858
3,246
5.6741
2
3
5
7
10862
7,929
8.1778
2
4
6
10
16863
21,420
5.1976
2
3
4
7
9864
18,946
4.0639
1
2
3
5
7865
1,705
6.7009
2
3
4
8
14866
8,182
3.5351
1
2
3
4
7867
5,062
9.6254
2
4
7
12
19868
2,641
5.7819
2
3
4
7
11869
1,103
4.3128
2
2
4
5
7870
21,199
15.4758
6
9
13
19
27871
216,384
7.4839
2
3
6
10
14872
90,892
5.7138
2
3
5
7
10876
857
11.9498
2
5
9
14
24880
9,282
3.1518
1
1
2
4
6881
4,623
4.1888
1
2
3
5
8882
1,556
4.4274
1
2
3
6
9883
757
7.3725
1
2
4
8
15884
19,006
5.4936
2
3
4
6
10885
80,806
7.6211
2
3
6
9
14886
404
6.0767
1
2
4
7
12887
393
4.6209
1
2
3
5
8894
4,369
2.9528
1
1
2
3
4895
6,958
10.4997
3
4
6
7
9896
5,490
6.6087
2
3
5
8
13897
36,053
4.0582
1
2
3
5
6901
924
15.0693
3
6
10
18
30902
2,031
7.7371
2
3
6
9
16903
1,500
4.5680
1
2
4
6
9904
1,046
11.2237
2
4
7
13
23905
811
4.6523
1
2
4
6
8906
710
3.1451
1
1
2
4
6907
8,461
11.6506
2
5
8
14
23908
8,319
6.7682
2
3
5
8
13909
5,447
3.6367
1
1
3
5
7913
804
5.6629
1
3
4
7
12914
6,609
3.4330
1
2
3
4
6915
1,078
4.7356
1
2
3
6
9916
5,508
2.1044
1
1
2
3
4917
15,775
5.1645
1
2
4
6
11918
35,653
2.7260
1
1
2
3
5919
11,089
6.3723
2
3
5
8
13920
13,970
4.3608
1
2
3
5
8921
9,423
2.9687
1
1
2
4
6922
1,047
5.9933
1
2
4
7
12923
3,952
3.2338
1
1
2
4
6927
211
31.1374
7
15
26
41
60928
818
15.9694
4
7
12
21
31929
438
7.6872
1
3
6
10
16933
139
4.3453
1
1
1
4
8934
659
6.1988
1
3
5
8
12935
2,201
5.4330
1
2
4
7
11939
671
10.0611
2
4
7
13
20940
1,320
5.4220
1
2
4
7
12941
1,707
2.7299
1
1
2
3
5945
6,244
10.4947
4
6
8
12
15946
3,055
7.8628
3
5
6
7
8947
9,715
5.0101
1
2
4
6
10948
47,722
3.4806
1
2
3
4
6949
632
4.1092
1
1
2
4
6950
387
3.4858
1
1
2
4
5951
940
4.6436
1
1
2
3
6955
444
12.2658
2
5
10
16
26956
3,976
9.2912
4
5
7
11
17957
1,318
14.8566
2
7
12
19
28958
1,147
10.4080
3
6
8
13
19959
291
6.2921
2
3
5
8
11( print page 23873)963
1,586
9.5214
2
4
8
13
19964
2,573
6.2274
2
3
5
8
11965
1,072
4.1371
1
2
3
5
7969
639
18.8279
4
8
14
22
36970
136
9.8309
2
3
7
12
17974
5,920
10.3723
2
4
8
13
21975
4,674
7.0148
2
3
5
9
13976
2,617
4.9308
2
2
4
6
8977
4,565
5.2931
1
2
4
6
10981
25,478
15.1488
5
8
12
19
28982
18,329
9.7455
3
5
8
12
18983
6,112
5.3613
1
2
4
7
11984
671
14.6811
5
8
13
18
25985
903
9.6512
2
5
8
13
18986
731
5.3338
1
2
3
7
12987
8,240
13.0089
4
6
10
16
24988
11,583
7.8090
2
3
6
10
15989
5,796
4.1046
1
1
3
6
911,387,276
 Table 8A.—Proposed Statewide Average Operating Cost-to-Charge Ratios—March 2008
State
Urban
RuralAlabama
0.261
0.33Alaska
0.401
0.745Arizona
0.288
0.418Arkansas
0.32
0.368California
0.225
0.303Colorado
0.281
0.437Connecticut
0.399
0.528Delaware
0.495
0.513District of Columbia *
0.345Florida
0.238
0.281Georgia
0.329
0.39Hawaii
0.382
0.453Idaho
0.468
0.534Illinois
0.305
0.395Indiana
0.39
0.466Iowa
0.357
0.444Kansas
0.288
0.424Kentucky
0.37
0.371Louisiana
0.299
0.353Maine
0.498
0.462Maryland
0.726
0.793Massachusetts *
0.471Michigan
0.364
0.462Minnesota
0.391
0.53Mississippi
0.302
0.355Missouri
0.33
0.399Montana
0.422
0.465Nebraska
0.335
0.46Nevada
0.22
0.478New Hampshire
0.457
0.427New Jersey *
0.178New Mexico
0.377
0.36New York
0.346
0.522North Carolina
0.402
0.396North Dakota
0.428
0.457Ohio
0.338
0.522Oklahoma
0.293
0.383Oregon
0.452
0.415Pennsylvania
0.267
0.413Puerto Rico *
0.474Rhode Island *
0.388South Carolina
0.284
0.301South Dakota
0.335
0.43Tennessee
0.297
0.371Texas
0.257
0.342Utah
0.414
0.572Vermont
0.543
0.619Virginia
0.358
0.357Washington
0.385
0.443West Virginia
0.471
0.462Wisconsin
0.425
0.458Wyoming
0.431
0.562* All counties in the State or Territory are classified as urban, with the exception of Massachusetts, which has areas designated as rural. However, no short-term acute care IPPS hospitals are located in those areas as of March 2008.
 Table 8B.—Proposed Statewide Average Capital Cost-to-Charge Ratios—March 2008
State
RatioAlabama
0.024Alaska
0.036Arizona
0.023Arkansas
0.025California
0.015Colorado
0.028Connecticut
0.028Delaware
0.035District of Columbia
0.022Florida
0.022Georgia
0.028Hawaii
0.03Idaho
0.038Illinois
0.026Indiana
0.037Iowa
0.028Kansas
0.03Kentucky
0.029Louisiana
0.026Maine
0.03Maryland
0.058Massachusetts
0.031Michigan
0.03Minnesota
0.028Mississippi
0.027Missouri
0.029Montana
0.034Nebraska
0.039Nevada
0.021New Hampshire
0.032New Jersey
0.013New Mexico
0.032New York
0.026North Carolina
0.032North Dakota
0.037Ohio
0.028Oklahoma
0.026Oregon
0.031Pennsylvania
0.022Puerto Rico
0.042Rhode Island
0.02South Carolina
0.024South Dakota
0.032Tennessee
0.03Texas
0.026Utah
0.032Vermont
0.045Virginia
0.036Washington
0.03West Virginia
0.034Wisconsin
0.037Wyoming
0.044
 
 
 Table 8C.—Proposed Statewide Average Total Cost-to-Charge Ratios for LTCHs—March 2008
State
Urban
RuralAlabama
0.279
0.36Alaska
0.432
0.806Arizona
0.311
0.448Arkansas
0.343
0.401California
0.238
0.322Colorado
0.307
0.479Connecticut
0.426
0.576Delaware
0.529
0.551District of Columbia *
0.368Florida
0.259
0.311Georgia
0.355
0.424Hawaii
0.411
0.487Idaho
0.506
0.576Illinois
0.33
0.427Indiana
0.426
0.507Iowa
0.381
0.483Kansas
0.314
0.463Kentucky
0.398
0.401Louisiana
0.325
0.38Maine
0.529
0.49Maryland ***
0.34
0.434Massachusetts **
0.502Michigan
0.393
0.497Minnesota
0.418
0.569Mississippi
0.328
0.384Missouri
0.357
0.438Montana
0.453
0.505Nebraska
0.371
0.505Nevada
0.24
0.539New Hampshire
0.489
0.459New Jersey **
0.19New Mexico
0.408
0.394New York
0.372
0.558North Carolina
0.434
0.431North Dakota
0.461
0.505Ohio
0.365
0.563Oklahoma
0.318
0.414Oregon
0.484
0.444Pennsylvania
0.287
0.443Puerto Rico **
0.514Rhode Island **
0.408South Carolina
0.308
0.327South Dakota
0.365
0.466Tennessee
0.326
0.406Texas
0.282
0.374Utah
0.445
0.622Vermont
0.594
0.657Virginia
0.393
0.398Washington
0.414
0.473West Virginia
0.505
0.496Wisconsin
0.462
0.497Wyoming
0.467
0.616*
                             All counties in the State or Territory are classified as urban, with the exception of Massachusetts, which has areas designated as rural. However, no short-term acute care IPPS hospitals or LTCHs are located in those areas as of March 2008.**
                             National average IPPS total cost-to-charge ratios, as discussed in section VI.E. of this proposed rule.
 Table 9A.—Hospital Reclassifications and Redesignations—FY 2009
Provider No.
Geographic 
                                 CBSA
Reclassified 
                                 CBSA
LUGAR010001
20020
10500010005
01
26620010009
19460
26620010010
01
13820010012
01
40660010022
01
12060010025
01
17980010029
12220
17980010035
01
13820010052
01
33860010054
19460
26620010055
20020
37460010059
19460
26620010061
01
16860010065
01
13820010083
01
37860010085
19460
26620010090
33660
37700010100
01
37860010101
01
13820010102
01
33860010118
01
33860010126
01
33860010143
01
26620010150
01
33860010158
01
22520010164
01
13820020008
02
11260030007
39140
22380
LUGAR030033
03
22380030055
29420
39140030069
29420
40140030101
29420
29820040014
04
30780040017
04
22220040019
04
32820040020
27860
32820040027
04
44180040039
04
27860040041
04
30780040069
04
32820040071
38220
30780( print page 23875)040076
04
30780
LUGAR040078
26300
30780040080
04
27860040085
04
32820040088
04
33740040091
04
45500040119
04
30780050006
05
39820050009
34900
46700050013
34900
46700050014
05
40900050022
40140
42044050038
41940
42100050042
05
39820050046
37100
31084050054
40140
42044050069
42044
31084050071
41940
42100050073
46700
36084050076
41884
36084050082
37100
31084050089
40140
31084050090
42220
41884050099
40140
31084050101
46700
36084050102
40140
42044050118
44700
33700050125
41940
42100050129
40140
31084050131
41884
36084050133
49700
40900050136
42220
41884050140
40140
31084050150
05
40900050153
41940
42100050159
37100
31084050168
42044
31084050173
42044
31084050174
42220
41884050188
41940
42100050193
42044
31084050194
42100
41940050197
41884
41940050224
42044
31084050226
42044
31084050230
42044
31084050236
37100
31084050242
42100
41940050243
40140
42044050245
40140
31084050272
40140
31084050279
40140
31084050291
42220
41884050292
40140
42044050300
40140
31084050301
05
42220050308
41940
42100050327
40140
31084050329
40140
42044050335
05
33700050348
42044
31084050360
41884
36084050367
46700
36084050380
41940
42100050385
42220
41884050390
40140
42044050394
37100
31084050423
40140
42044050426
42044
31084050441
41940
42100050476
05
42220( print page 23876)050494
05
40900050510
41884
36084050517
40140
31084050526
42044
31084050534
40140
42044050541
41884
41940050543
42044
31084050547
42220
41884050548
42044
31084050549
37100
31084050551
42044
31084050567
42044
31084050570
42044
31084050573
40140
42044050580
42044
31084050586
40140
31084050589
42044
31084050603
42044
31084050604
41940
42100050609
42044
31084050616
37100
31084050662
41940
42100050667
34900
46700050678
42044
31084050680
46700
36084050684
40140
42044050686
40140
42044050688
41940
42100050690
42220
41884050693
42044
31084050694
40140
42044050701
40140
42044050709
40140
31084050720
42044
31084050744
42044
31084050745
42044
31084050746
42044
31084050747
42044
31084050749
37100
31084050758
40140
31084060003
14500
19740060012
39380
17820060023
24300
19740060027
14500
19740060031
17820
19740060049
06
22660060075
06
24300060096
06
19740060103
14500
19740060116
14500
19740070001
35300
35004070003
07
25540
LUGAR070004
07
25540070005
35300
35004070006
14860
35644070010
14860
35644070011
07
25540070015
07
35644070016
35300
35004070017
35300
35004070018
14860
35644070019
35300
35004070022
35300
35004070028
14860
35644070031
35300
35004070033
14860
35644070034
14860
35644070036
25540
35300070038
35300
35004070039
35300
35004080001
48864
37964( print page 23877)080003
48864
37964080004
20100
48864080006
08
20100080007
08
36140090001
47894
13644090004
47894
13644090011
47894
13644100002
48424
22744100014
19660
36740100017
19660
36740100022
33124
22744100023
10
36740100024
10
33124100045
19660
36740100047
39460
14600100049
10
29460100068
19660
36740100072
19660
36740100077
39460
14600100080
48424
22744100081
10
23020
LUGAR100105
42680
38940100109
10
36740100130
48424
22744100139
10
23540
LUGAR100150
10
33124100156
10
23540100157
29460
45300100160
10
33124100168
48424
22744100176
48424
22744100217
42680
38940100232
10
27260100234
48424
22744100236
39460
14600100249
10
45300100252
10
38940100253
48424
22744100258
48424
22744100268
48424
22744100269
48424
22744100275
48424
22744100287
48424
22744100288
48424
22744100292
10
23020
LUGAR110001
19140
16860110002
11
12060110016
11
17980110023
11
12060110029
23580
12060110038
11
45220110040
11
12060
LUGAR110041
11
12060110054
40660
12060110069
47580
31420110075
11
42340110095
11
10500110112
11
10500110121
11
45220110122
46660
45220110125
11
31420110128
11
42340110146
11
27260110150
11
12060110153
47580
31420110168
40660
12060110187
11
12060
LUGAR110189
11
12060120028
12
26180130002
13
14260130003
30300
28420( print page 23878)130049
17660
44060130067
13
26820
LUGAR140012
14
16974140015
14
41180140032
14
41180140034
14
41180140040
14
37900140043
14
19340140046
14
41180140058
14
41180140064
14
37900140084
29404
16974140100
29404
16974140110
14
16974140130
29404
16974140135
19500
16580140143
14
16974140155
28100
16974140160
14
40420140164
14
41180140186
28100
16974140202
29404
16974140291
29404
16974150002
23844
16974150004
23844
16974150006
33140
43780150008
23844
16974150011
15
26900150015
33140
23844150018
21140
43780150023
45460
26900150026
21140
43780150030
15
26900
LUGAR150034
23844
16974150042
15
14020150045
15
23060150048
15
17140150051
14020
26900150065
15
26900150069
15
17140150076
15
43780150088
11300
26900150090
23844
16974150091
15
23060150102
15
23844
LUGAR150112
18020
26900150113
11300
26900150115
15
21780150125
23844
16974150126
23844
16974150133
15
43780150146
15
21140150147
23844
16974160001
16
11180160016
16
11180160057
16
26980160064
16
47940160080
16
19340160089
16
26980160147
16
11180170006
17
27900170012
17
48620170013
17
48620170020
17
48620170023
17
48620170068
17
11100170120
17
27900170142
17
45820170175
17
48620170190
17
45820170193
17
48620( print page 23879)180002
18
49180005
18
26580180011
18
30460180012
21060
31140180013
14540
34980180017
18
21060180024
18
31140180027
18
17300180029
18
30460180043
18
44180044
18
26580180048
18
31140180049
18
30460180050
18
28700180066
18
34980180069
18
26580180078
18
26580180080
18
28940180093
18
21780180102
18
17300180104
18
17300180116
18
14180124
14540
34980180127
18
31140180132
18
30460190003
19
29180190015
19
35380190017
19
29180190086
19
33740190088
19
43340190106
19
10780190144
19
43340190164
19
10780190167
19
29180190184
19
33740190191
19
29180190208
19
04190218
19
43340190257
19
33740200020
38860
40484200024
30340
38860200034
30340
38860200039
20
38860200050
20
12620220001
49340
14484220002
15764
14484220008
39300
14484220010
37764
14484220011
15764
14484220019
49340
14484220020
39300
14484220025
49340
14484220029
37764
14484220033
37764
14484220035
37764
14484220049
15764
14484220058
49340
14484220062
49340
14484220063
15764
14484220070
15764
14484220073
39300
14484220074
39300
14484220077
44140
25540220080
37764
14484220082
15764
14484220084
15764
14484220090
49340
14484220095
49340
14484220098
15764
14484220101
15764
14484220105
15764
14484( print page 23880)220163
49340
14484220171
15764
14484220174
37764
14484220175
15764
14484220176
49340
14484230002
19804
11460230003
26100
34740230013
47644
19804230019
47644
19804230020
19804
11460230021
35660
28020230022
23
29620230024
19804
11460230029
47644
19804230030
23
40980230035
23
24340
LUGAR230036
23
13020230037
23
11460230038
24340
34740230047
47644
19804230053
19804
11460230054
23
24580230059
24340
34740230069
47644
22420230071
47644
19804230072
26100
34740230077
40980
22420230080
23
13020230089
19804
11460230092
27100
11460230095
23
13020230096
23
28020230097
23
24340230099
33780
11460230104
19804
1146023B104
47644
19804230105
23
13020230106
24340
34740230119
19804
11460230121
23
29620
LUGAR230130
47644
19804230135
19804
11460230142
19804
11460230146
19804
11460230151
47644
19804230165
19804
11460230174
26100
34740230176
19804
11460230195
47644
19804230204
47644
19804230207
47644
19804230208
23
24340
LUGAR230222
23
13020230223
47644
19804230227
47644
19804230236
24340
34740230244
19804
11460230254
47644
19804230257
47644
19804230264
47644
19804230269
47644
19804230270
19804
11460230273
19804
11460230277
47644
19804230279
47644
22420230301
47644
19804240030
24
41060240036
41060
33460240064
24
20260240069
24
33460240071
24
33460( print page 23881)240075
24
41060240088
24
41060240093
24
33460240187
24
33460250002
25
22520250004
25
32820250006
25
32820250009
25
27180250023
25
25060
LUGAR250031
25
27140250034
25
32820250040
37700
25060250042
25
32820250044
25
22520250069
25
46220250078
25620
25060250081
25
46220250082
25
38220250094
25620
25060250097
25
12940250099
25
27140250100
25
46220250104
25
46220250117
25
25060
LUGAR260009
26
28140260015
26
27860260017
26
27620260022
26
16260025
26
41180260050
26
41140260064
26
17860260074
26
17860260094
26
44180260110
26
44180260113
26
14260116
26
14260119
26
27860260175
26
28140260183
26
41180260186
26
44180270003
27
24500270014
33540
17660270017
27
33540270051
27
33540280009
28
30700280023
28
30700280032
28
30700280061
28
53280065
28
24540280125
28
43580290002
29
16180
LUGAR290006
29
39900290008
29
14260290019
16180
39900300001
30
31700300011
31700
49340300012
31700
49340300017
40484
37764300019
30
15764300020
31700
49340300023
40484
37764300029
40484
37764300034
31700
49340310002
35084
35644310009
35084
35644310014
15804
37964310015
35084
35644310017
35084
35644310018
35084
35644310021
45940
35084310022
15804
37964( print page 23882)310029
15804
37964310031
15804
20764310032
47220
48864310038
20764
35644310039
20764
35644310048
20764
35084310050
35084
35644310054
35084
35644310070
20764
35644310076
35084
35644310081
15804
37964310083
35084
35644310086
15804
37964310093
35084
35644310096
35084
35644310108
20764
35644310119
35084
35644320003
32
42140320005
22140
10740320006
32
10740320013
32
42140320033
32
42140
LUGAR320063
32
36220320065
32
36220330004
28740
39100330008
33
15380
LUGAR330023
39100
35644330027
35004
35644330049
39100
14860330067
39100
14860330073
33
40380
LUGAR330085
33
45060330090
21300
27060330094
33
38340330103
33
39330106
35004
35644330126
39100
35644330136
33
45060330157
33
45060330167
35004
35644330181
35004
35644330182
35004
35644330191
24020
10580330198
35004
35644330224
28740
39100330225
35004
35644330229
33
21500330235
33
45060
LUGAR330239
33
21500330250
33
15540330259
35004
35644330277
33
27060330331
35004
35644330332
35004
35644330372
35004
35644330386
33
35084340004
24660
49180340008
34
22180340010
24140
39580340013
34
24860340014
49180
24660340015
34
16740340021
34
16740340023
11700
24860340027
34
24780340039
34
16740340047
49180
24660340050
34
22180340051
34
25860340068
34
34820340069
39580
20500( print page 23883)340070
15500
24660340071
34
39580
LUGAR340073
39580
20500340091
24660
49180340109
34
47260340114
39580
20500340115
34
20500340126
34
39580340127
34
20500
LUGAR340129
34
16740340131
34
24780340138
39580
20500340144
34
16740340145
34
16740
LUGAR340147
40580
39580340148
49180
24660340173
39580
20500350003
35
13900350006
35
13900350009
35
22020360008
36
26580360010
36
10420360011
36
18140360013
36
30620360014
36
18140360019
10420
17460360020
10420
17460360025
41780
45780360027
10420
17460360036
36
17460360039
36
18140360054
36
26580360065
36
17460360078
10420
17460360086
44220
19380360095
36
45780360096
36
49660
LUGAR360107
36
45780360121
36
45780360150
10420
17460360159
36
18140360175
36
18140360185
36
49660
LUGAR360187
44220
19380360197
36
18140360211
48260
38300360245
36
17460
LUGAR360253
19380
17140370004
37
27900370006
37
48620370014
37
43300370015
37
46140370016
37
36420370018
37
46140370025
37
46140370026
37
36420370030
37
46140370047
37
36420370049
37
36420370113
37
22220370149
37
36420380001
38
38900380022
38
18700
LUGAR380027
38
21660380050
38
32780380051
41420
38900380090
38
21660390006
39
25420390013
39
25420390016
39
49660390031
39
39740
LUGAR( print page 23884)390044
39740
37964390046
49620
29540390048
39
25420390065
39
13644390066
30140
25420390071
39
48700
LUGAR390079
39
13780390086
39
27780390091
39
49660390093
39
49660390096
39740
37964390110
27780
38300390113
39
49660390138
39
25420390150
39
38300
LUGAR390151
39
13644390162
10900
35084390163
38300
49660390185
42540
10900390313
39
39740
LUGAR410001
39300
14484410004
39300
14484410005
39300
14484410007
39300
14484410010
39300
14484410011
39300
14484410012
39300
14484410013
39300
35980420007
43900
24860420009
42
24860
LUGAR420020
42
16700420027
11340
24860420030
42
16700420036
42
16740420039
42
43900
LUGAR420062
42
16740420067
42
42340420068
42
16700420069
42
44940
LUGAR420070
44940
17900420071
42
24860420080
42
42340420083
43900
24860420085
34820
48900420098
42
34820430012
43
43620430013
43
43620430014
43
22020430077
39660
16220440002
27180
32820440008
44
27180440020
44
26620440024
17420
16860440025
44
34440035
17300
34980440056
34100
28940440059
44
34980440060
44
27180440067
34100
28700440068
44
16860440072
44
32820440073
44
34980440144
44
34980440148
44
34980440151
44
34980440185
17420
16860440192
44
34980450007
45
41700450039
23104
19124450064
23104
19124450080
45
30980( print page 23885)450087
23104
19124450099
45
11100450133
33260
36220450135
23104
19124450137
23104
19124450148
23104
19124450178
45
36220450187
45
26420450196
45
19124450211
45
30980450214
45
26420450224
45
46340450283
45
19124
LUGAR450324
43300
19124450347
45
26420450351
45
23104450389
45
19124
LUGAR450393
43300
19124450395
45
26420450419
23104
19124450447
45
19124450465
45
26420450469
43300
19124450484
45
30980450508
45
30980450547
45
19124450563
23104
19124450565
45
23104450596
45
23104450639
23104
19124450656
45
30980450672
23104
19124450675
23104
19124450677
23104
19124450747
45
46340450770
45
12420
LUGAR450779
23104
19124450813
45
41700450830
45
36220450872
23104
19124450880
23104
19124450886
23104
19124460004
36260
41620460005
36260
41620460007
46
41100460021
41100
29820460026
46
39340460039
46
30860460041
36260
41620460042
36260
41620470001
47
30470012
47
38340490004
25500
16820490005
49020
47894490013
49
20500490018
49
16820490019
49
47894490040
47894
13644490042
13980
40220490043
47894
13644490048
40220
31340490063
47894
13644490079
49
24660490097
49
40060490101
47894
13644490107
47894
13644490122
47894
13644500002
50
28420500003
34580
42644500007
34580
42644500016
48300
42644( print page 23886)500021
45104
42644500031
50
36500500039
14740
42644500041
31020
38900500072
50
14740500079
45104
42644500108
45104
42644500129
45104
42644510001
34060
38300510002
51
40220510006
51
34060510018
51
16620
LUGAR510024
34060
38300510046
51
13980510047
51
38300510050
48540
38300510062
51
16620510070
51
16620510071
51
13980510077
51
26580520002
52
48140520013
20740
33460520021
29404
16974520028
52
31540
LUGAR520037
52
48140520059
39540
33340520071
52
33340
LUGAR520076
52
31540520096
39540
33340520102
52
33340
LUGAR520107
52
22540520113
52
24580520116
52
33340
LUGAR520189
29404
16974530014
16940
24540530015
53
26820
 Table 9C.—Hospitals Redesignated as Rural Under Section 1886(d)(8)(E) of the Act—FY 2009
Provider No.
Geographic CBSA
Redesignated rural area050192
23420
05050528
32900
05050618
40140
05100048
37860
10100118
37380
10100134
27260
10140167
14
14170137
29940
17220051
38340
22230078
35660
23250017
25
25260006
41140
26260047
27620
26260195
44180
26330268
10580
33360125
36
36370054
36420
37380040
13460
38390130
27780
39390183
39
39440135
34980
44450052
45
45450078
10180
45450243
10180
45450348
45
45490116
13980
49500148
48300
50
 Table 10.—Geometric Mean Plus the Lesser of .75 of the National Adjusted Operating Standardized Payment Amount (Increased To Reflect the Difference Between Costs and Charges) or .75 of One Standard Deviation of Mean Charges by Medicare Severity Diagnosis-Related Group (MS-DRG)—March 2008 1
MS-DRG
Number of cases
Threshold1
655
$345,7542
287
202,8923
23,338
258,7564
21,431
156,8155
634
172,1906
228
95,9197
356
167,4528
482
96,3439
1,345
104,34110
163
77,50011
1,266
77,65412
1,909
55,61713
1,274
39,62420
887
149,49021
532
115,97322
212
81,50023
3,741
88,47324
2,103
62,851( print page 23887)25
8,713
82,50426
11,796
56,52327
13,711
44,49128
1,670
80,24229
3,085
50,23130
3,425
32,61631
1,024
67,61832
2,785
38,80933
3,621
31,32234
764
60,60535
2,238
44,51836
6,915
38,59237
4,842
55,04538
14,152
35,52939
51,945
25,86540
4,769
62,15141
7,588
41,97142
4,869
36,09452
1,167
32,40753
593
22,31354
5,257
31,97355
16,334
26,86056
8,269
29,87357
47,422
19,70758
742
29,62559
2,761
22,94160
4,080
17,34661
1,591
55,73462
2,466
44,29763
1,327
38,68564
55,842
35,59065
105,150
28,43466
89,467
21,61667
1,406
31,00668
11,458
23,21869
102,005
18,93870
7,347
34,96771
9,531
27,71872
5,746
20,09273
9,230
28,41174
31,583
21,47175
1,240
35,75676
874
23,18377
1,214
34,33478
1,405
25,70379
931
19,43580
1,870
26,20581
7,158
17,93782
1,764
36,63083
2,056
30,14984
2,784
22,39085
5,896
37,01986
11,488
27,92587
13,005
19,83688
712
31,87089
2,740
23,57290
3,094
17,95391
7,628
30,62792
16,286
22,38893
16,162
17,18294
1,476
57,29495
1,034
44,07296
761
37,72397
1,195
56,72598
1,007
38,01899
642
30,539100
17,058
30,273101
57,248
19,211102
1,086
24,512103
13,854
16,849113
527
33,475114
562
20,755115
1,060
26,332116
566
26,098117
1,140
16,472121
549
22,487122
623
14,246123
2,789
18,857124
753
25,197125
4,693
16,936129
1,359
40,771130
1,074
29,912131
933
39,603132
889
28,315133
1,988
32,709134
3,379
21,267135
353
36,814136
474
24,169137
775
29,030138
891
18,731139
1,498
20,992146
680
36,795147
1,369
27,392148
860
20,935149
38,942
16,006150
955
25,517151
6,839
13,767152
1,735
21,825153
11,517
15,282154
1,906
28,847155
4,498
21,959156
4,851
16,219157
1,048
29,382158
3,229
21,572159
2,376
15,149163
13,622
83,366164
17,895
50,966165
13,816
40,520166
20,575
60,767167
20,538
42,190168
5,478
32,296175
12,686
34,823176
41,375
26,341177
63,876
38,177178
71,036
31,805179
26,205
25,015180
22,369
34,979181
30,299
28,647182
5,485
22,812183
1,858
32,624184
4,329
23,386185
2,521
16,595186
9,254
33,122187
10,047
27,117188
5,031
20,564189
113,197
30,640190
58,935
28,961191
118,443
24,100192
185,468
18,078193
87,659
30,876194
254,760
24,785195
134,022
18,110196
5,396
32,914197
6,822
27,198198
4,650
20,752199
3,215
34,978200
8,396
25,022201
3,475
17,803202
29,397
20,216203
37,161
14,886204
25,777
17,542205
5,872
27,528206
21,625
18,717207
39,614
87,097208
76,655
43,557215
143
173,781216
8,640
168,323217
7,240
124,423218
2,557
104,181219
10,538
136,802220
13,938
99,436221
7,039
87,477222
2,772
156,334223
5,081
119,825224
1,912
145,014225
5,074
113,498226
7,067
118,743227
42,758
93,475228
2,975
132,326229
3,599
95,382230
1,568
80,590231
1,445
149,264232
1,516
114,499233
16,267
125,690234
34,348
93,360235
9,634
99,860236
30,093
73,812237
22,441
88,481238
42,307
57,831239
13,331
62,725240
11,688
43,263241
2,679
32,205242
17,530
66,838243
36,091
52,897244
62,665
44,466245
3,943
73,686246
28,838
67,069( print page 23888)247
188,816
48,746248
13,859
60,786249
70,027
44,038250
6,790
59,714251
41,777
41,857252
45,667
51,697253
44,988
46,446254
53,543
37,335255
2,525
40,724256
3,453
31,694257
707
23,510258
688
53,299259
7,314
38,081260
1,553
56,280261
3,525
31,484262
3,531
25,624263
656
30,621264
28,327
41,945265
1,959
42,694280
63,744
37,477281
53,825
29,595282
54,438
22,672283
14,927
32,787284
4,145
24,166285
2,811
16,215286
23,714
42,608287
158,325
29,592288
2,964
50,314289
1,357
37,277290
480
31,429291
188,057
30,477292
205,085
23,997293
197,247
17,506294
1,417
22,037295
1,346
14,125296
1,917
28,779297
793
17,798298
603
12,266299
17,830
29,028300
44,700
21,461301
37,174
15,572302
7,607
24,792303
70,815
14,928304
2,098
25,698305
35,311
15,266306
1,521
29,058307
6,371
18,574308
35,795
28,398309
79,510
20,681310
158,993
14,833311
21,229
13,279312
166,359
18,189313
212,358
14,841314
61,733
32,156315
30,052
24,173316
18,076
16,573326
11,247
90,510327
10,467
52,332328
8,878
34,042329
48,192
83,718330
63,720
49,785331
28,246
37,251332
1,828
76,442333
5,926
48,536334
3,736
36,301335
7,186
70,724336
12,464
45,785337
8,586
34,468338
1,501
60,013339
3,167
42,250340
3,566
31,529341
882
45,033342
2,548
33,808343
6,990
24,135344
933
54,766345
2,919
36,119346
2,766
28,030347
1,628
40,240348
4,174
30,100349
5,178
19,260350
1,760
42,667351
4,293
30,824352
8,211
20,507353
3,172
47,221354
8,433
33,349355
15,386
23,911356
8,357
61,777357
7,827
42,844358
2,484
32,598368
3,570
34,021369
5,250
26,848370
3,562
20,098371
24,424
34,233372
27,117
28,743373
15,293
20,505374
9,082
35,802375
19,032
28,329376
4,321
22,907377
51,664
32,372378
110,502
24,239379
92,325
18,668380
3,027
35,357381
5,304
27,876382
4,499
21,070383
1,227
29,549384
8,101
21,207385
1,998
34,976386
7,139
26,903387
5,041
20,238388
18,589
31,113389
45,899
23,260390
46,538
16,397391
44,419
26,016392
282,973
17,753393
23,327
30,889394
45,966
23,957395
24,872
17,482405
3,972
86,374406
5,304
52,360407
2,120
39,348408
1,549
71,677409
1,737
50,663410
601
36,877411
957
69,221412
961
51,066413
760
39,922414
5,248
62,853415
6,133
43,331416
5,338
32,604417
16,454
49,649418
27,098
39,258419
35,942
29,790420
768
66,342421
1,057
39,447422
331
31,257423
1,545
71,874424
897
47,509425
126
32,981432
15,201
33,045433
9,723
23,926434
898
17,085435
12,164
34,878436
13,203
28,443437
3,911
25,366438
14,096
33,587439
24,418
26,852440
25,766
18,781441
13,382
31,516442
14,214
24,098443
6,593
17,782444
12,947
33,108445
16,870
27,464446
16,037
19,832453
950
165,424454
1,778
121,032455
1,988
93,297456
947
144,023457
2,416
98,535458
1,617
82,249459
3,516
97,638460
52,310
66,514461
1,018
82,048462
13,179
63,047463
5,060
60,604464
5,853
43,476465
2,416
31,714466
4,073
74,467467
14,326
57,869468
21,140
49,618469
30,544
59,370470
405,849
44,493471
2,288
77,861472
7,009
52,304473
23,109
42,971474
2,925
51,927475
3,287
37,186476
1,595
25,620( print page 23889)477
2,589
58,272478
8,575
45,067479
11,457
35,879480
26,755
53,624481
72,188
40,303482
48,187
34,632483
7,107
47,684484
17,896
40,860485
1,183
60,074486
2,189
44,942487
1,312
36,049488
2,501
35,530489
5,791
27,889490
23,080
37,310491
52,938
23,744492
5,221
51,439493
16,933
38,816494
29,231
29,960495
1,974
52,628496
5,569
37,148497
6,672
28,169498
1,167
38,115499
1,113
22,378500
1,503
47,316501
3,878
32,847502
6,482
23,489503
833
42,531504
2,172
32,702505
3,036
24,287506
815
25,704507
838
37,099508
2,506
27,713509
627
28,236510
974
40,828511
3,932
32,904512
11,002
23,803513
1,053
30,121514
1,014
20,124515
3,820
54,024516
11,287
39,608517
17,603
32,537533
825
27,647534
3,414
16,259535
7,007
27,756536
33,727
15,479537
667
21,443538
1,059
13,756539
3,448
35,081540
4,046
28,706541
1,658
21,628542
5,723
34,804543
17,041
26,766544
10,817
18,081545
4,093
36,357546
5,587
26,110547
4,571
17,948548
585
33,933549
1,120
26,761550
865
18,763551
10,077
30,882552
85,429
18,705553
3,084
25,449554
19,284
15,035555
2,025
23,819556
18,715
14,407557
3,658
29,996558
15,153
19,455559
1,816
30,350560
4,334
21,234561
7,125
13,644562
5,476
28,172563
36,406
15,527564
1,667
28,585565
3,334
21,320566
2,646
16,029573
5,490
45,601574
11,156
34,288575
5,477
25,545576
549
51,383577
2,233
32,911578
3,065
24,256579
3,521
45,095580
10,746
31,153581
12,188
22,362582
5,347
24,362583
8,780
19,177584
670
31,432585
1,499
20,658592
4,197
31,149593
12,368
23,904594
2,786
17,143595
1,119
31,375596
5,334
19,449597
465
30,971598
1,413
25,450599
321
18,124600
686
22,523601
893
15,565602
22,195
28,410603
130,827
18,332604
2,679
26,853605
22,207
16,438606
1,358
25,667607
7,223
15,152614
1,460
47,701615
1,550
34,632616
1,091
65,719617
6,743
38,652618
262
29,334619
696
56,060620
2,183
41,545621
7,840
34,898622
1,113
43,197623
3,081
34,355624
387
24,651625
1,276
41,939626
2,544
28,873627
14,040
19,271628
3,371
53,828629
4,183
42,434630
539
33,189637
17,173
28,050638
42,846
19,293639
38,599
13,546640
61,027
25,018641
202,068
16,467642
1,522
23,787643
5,194
31,972644
11,834
25,437645
8,221
17,977652
10,083
61,353653
1,697
89,458654
3,458
56,337655
1,633
42,874656
3,922
58,696657
7,428
41,203658
8,291
33,644659
4,668
53,703660
7,609
38,883661
4,273
31,713662
952
45,713663
2,064
31,902664
4,406
24,778665
656
47,408666
2,094
32,797667
3,632
20,211668
3,838
42,144669
12,767
30,048670
11,721
19,264671
809
31,091672
945
19,988673
12,591
45,199674
11,735
41,821675
7,841
34,014682
82,356
31,292683
132,588
26,544684
45,085
17,817685
2,328
19,847686
1,603
31,947687
3,266
26,251688
1,084
18,135689
56,256
27,047690
198,999
18,127691
819
33,914692
492
26,929693
2,431
28,697694
18,046
18,013695
981
25,865696
10,563
15,132697
594
17,528698
23,391
29,470699
24,279
23,424700
12,340
16,877707
5,984
37,222708
18,084
30,416709
765
35,528710
1,845
29,560( print page 23890)711
792
37,675712
710
20,316713
10,272
26,996714
28,875
15,559715
532
36,052716
1,275
29,420717
705
34,114718
589
19,293722
754
30,816723
1,970
24,740724
586
15,657725
759
24,606726
3,733
16,368727
1,300
27,843728
6,194
17,130729
592
25,442730
471
14,723734
1,364
44,272735
1,133
28,372736
856
73,117737
3,302
41,614738
866
28,882739
1,015
53,269740
4,338
34,448741
6,033
24,839742
10,977
31,971743
32,430
21,234744
1,527
30,774745
1,700
20,207746
2,643
30,028747
10,434
21,235748
19,915
20,564749
982
45,119750
437
24,771754
986
33,562755
2,954
25,879756
687
16,172757
1,398
32,870758
1,612
26,363759
1,244
19,100760
1,708
19,562761
1,773
13,249765
2,773
20,365766
2,692
13,836767
133
18,724769
98
28,990770
203
16,249774
1,517
12,327775
5,784
8,750776
513
15,047777
209
20,244778
475
8,942779
112
11,223780
41
3,917781
3,040
13,218782
175
8,623799
566
82,467800
705
50,685801
556
37,382802
764
53,613803
1,071
36,134804
995
27,223808
6,092
37,130809
12,879
27,509810
2,801
22,786811
21,482
26,846812
90,369
18,397813
14,238
27,095814
1,564
30,406815
3,315
25,805816
2,154
18,432820
1,301
89,835821
2,478
43,777822
1,894
30,581823
2,182
69,584824
2,976
44,341825
1,756
30,652826
524
76,715827
1,256
44,122828
802
32,076829
1,175
47,921830
524
28,158834
4,031
58,295835
2,707
37,287836
1,623
25,573837
1,044
96,925838
1,321
47,431839
1,466
30,443840
9,683
43,346841
10,060
32,240842
5,341
25,445843
1,354
34,538844
2,414
27,673845
811
21,496846
2,117
38,966847
23,925
26,844848
1,725
23,146849
1,478
29,110853
34,961
80,838854
6,662
52,593855
459
38,661856
5,904
65,124857
9,631
37,513858
3,258
30,272862
7,955
34,329863
21,482
22,129864
19,034
20,781865
1,707
29,217866
8,201
17,149867
5,076
38,916868
2,659
25,425869
1,139
18,507870
21,356
94,830871
216,894
35,333872
91,026
27,030876
860
42,167880
9,304
15,133881
4,658
12,046882
1,558
12,634883
758
17,971884
19,126
19,197885
81,314
15,242886
407
13,905887
399
16,694894
4,798
7,599895
10,278
12,773896
5,570
26,933897
38,298
13,086901
926
54,456902
2,036
33,188903
1,508
23,579904
1,047
43,056905
812
26,185906
716
24,257907
8,469
56,134908
8,340
36,960909
5,470
27,977913
807
27,237914
6,655
16,360915
1,080
26,134916
5,527
10,518917
15,818
29,720918
35,758
14,390919
11,106
30,394920
14,005
22,313921
9,462
14,923922
1,055
28,288923
3,976
15,419927
213
182,484928
819
65,145929
440
37,218933
145
31,568934
663
24,756935
2,220
22,937939
673
46,257940
1,322
33,961941
1,720
26,932945
6,687
20,290946
4,359
15,730947
9,751
24,756948
47,916
15,920949
682
18,328950
420
12,682951
951
15,279955
449
87,860956
3,984
57,503957
1,325
101,860958
1,156
67,071959
295
47,759963
1,592
50,127964
2,581
34,357965
1,077
25,020969
644
78,213970
138
45,746974
5,952
41,989975
4,710
29,607976
2,654
22,430( print page 23891)977
4,633
25,054981
25,506
78,693982
18,355
55,049983
6,144
40,105984
671
59,501985
904
42,990986
732
29,607987
8,256
55,744988
11,611
37,995989
5,817
27,744999
26
15,3871
                             Cases taken from the FY 2007 MedPAR file; MS-DRGs are from GROUPER Version 26.0.
 Table 11.—Proposed FY 2009 MS-LTC-DRGS, Proposed Relative Weights, Proposed Geometric Average Length of Stay, and Proposed Short-Stay Outlier Threshold
Proposed MS-LTC-DRG
Proposed base MS-LTC-DRG
Proposed MS-LTC-DRG title
FY 2007 LTCH cases
Proposed relative weight
Proposed geometric average length of stay
Proposed short-stay outlier (SSO) threshold 11
1
Heart transplant or implant of heart assist system w MCC
0
0.0000
0.0
0.02
1
Heart transplant or implant of heart assist system w/o MCC
0
0.0000
0.0
0.03
3
ECMO or trach w MV 96+ hrs or PDX exc face, mouth & neck w maj O.R.
286
4.5889
66.5
55.44
4
Trach w MV 96+ hrs or PDX exc face, mouth & neck w/o maj O.R.
1,201
2.9992
44.4
37.05
5
Liver transplant w MCC or intestinal transplant
0
0.0000
0.0
0.06
5
Liver transplant w/o MCC
0
0.0000
0.0
0.07
7
Lung transplant
0
0.0000
0.0
0.08
8
Simultaneous pancreas/kidney transplant
0
0.0000
0.0
0.09
9
Bone marrow transplant
0
1.2617
31.5
26.310
10
Pancreas transplant
0
0.0000
0.0
0.011
11
Tracheostomy for face, mouth & neck diagnoses w MCC
1
1.7509
37.9
31.612
11
Tracheostomy for face, mouth & neck diagnoses w CC
1
1.7509
37.9
31.613
11
Tracheostomy for face, mouth & neck diagnoses w/o CC/MCC
0
1.7509
37.9
31.620
20
Intracranial vascular procedures w PDX hemorrhage w MCC
0
1.7509
37.9
31.621
20
Intracranial vascular procedures w PDX hemorrhage w CC
0
1.7509
37.9
31.622
20
Intracranial vascular procedures w PDX hemorrhage w/o CC/MCC
0
1.7509
37.9
31.623
23
Craniotomy w major device implant or acute complex CNS PDX w MCC*
2
1.2617
31.5
26.324
23
Craniotomy w major device implant or acute complex CNS PDX w/o MCC*
1
1.2617
31.5
26.325
25
Craniotomy & endovascular intracranial procedures w MCC
1
1.7509
37.9
31.626
25
Craniotomy & endovascular intracranial procedures w CC
3
1.7509
37.9
31.627
25
Craniotomy & endovascular intracranial procedures w/o CC/MCC
1
0.8596
25.2
21.028
28
Spinal procedures w MCC
11
1.2617
31.5
26.329
28
Spinal procedures w CC
9
1.2617
31.5
26.330
28
Spinal procedures w/o CC/MCC
1
1.2617
31.5
26.331
31
Ventricular shunt procedures w MCC
5
1.7509
37.9
31.632
31
Ventricular shunt procedures w CC
1
1.7509
37.9
31.633
31
Ventricular shunt procedures w/o CC/MCC
0
1.7509
37.9
31.634
34
Carotid artery stent procedure w MCC
0
1.2617
31.5
26.335
34
Carotid artery stent procedurew CC
0
1.2617
31.5
26.336
34
Carotid artery stent procedure w/o CC/MCC
0
1.2617
31.5
26.337
37
Extracranial procedures w MCC
7
1.2617
31.5
26.338
37
Extracranial procedures w CC*
6
1.2617
31.5
26.339
37
Extracranial procedures w/o CC/MCC
0
1.2617
31.5
26.3( print page 23892)40
40
Periph & cranial nerve & other nerv syst proc w MCC
143
1.2451
34.8
29.041
40
Periph & cranial nerve & other nerv syst proc w CC
87
1.0890
34.5
28.842
40
Periph & cranial nerve & other nerv syst proc w/o CC/MCC*
6
1.0890
34.5
28.852
52
Spinal disorders & injuries w CC/MCC
83
0.9943
31.3
26.153
52
Spinal disorders & injuries w/o CC/MCC
7
0.8596
25.2
21.054
54
Nervous system neoplasms w MCC
31
1.0109
26.7
22.355
54
Nervous system neoplasms w/o MCC
50
0.6542
21.6
18.056
56
Degenerative nervous system disorders w MCC
1,180
0.8022
25.3
21.157
56
Degenerative nervous system disorders w/o MCC
1,945
0.6033
24.0
20.058
58
Multiple sclerosis & cerebellar ataxia w MCC
19
0.8596
25.2
21.059
58
Multiple sclerosis & cerebellar ataxia w CC
23
0.6327
21.6
18.060
58
Multiple sclerosis & cerebellar ataxia w/o CC/MCC
10
0.6327
21.6
18.061
61
Acute ischemic stroke w use of thrombolytic agent w MCC
0
0.8823
23.5
19.662
61
Acute ischemic stroke w use of thrombolytic agent w CC
0
0.5770
22.8
19.063
61
Acute ischemic stroke w use of thrombolytic agent w/o CC/MCC
0
0.4824
19.6
16.364
64
Intracranial hemorrhage or cerebral infarction w MCC
107
0.7831
24.5
20.465
64
Intracranial hemorrhage or cerebral infarction w CC
67
0.6217
24.0
20.066
64
Intracranial hemorrhage or cerebral infarction w/o CC/MCC
24
0.4824
19.6
16.367
67
Nonspecific cva & precerebral occlusion w/o infarct w MCC
4
0.4824
19.6
16.368
67
Nonspecific cva & precerebral occlusion w/o infarct w/o MCC
4
0.4824
19.6
16.369
69
Transient ischemia
13
0.4824
19.6
16.370
70
Nonspecific cerebrovascular disorders w MCC
87
0.8823
23.5
19.671
70
Nonspecific cerebrovascular disorders w CC
52
0.5770
22.8
19.072
70
Nonspecific cerebrovascular disorders w/o CC/MCC
8
0.4824
19.6
16.373
73
Cranial & peripheral nerve disorders w MCC
116
0.8910
24.6
20.574
73
Cranial & peripheral nerve disorders w/o MCC
173
0.6057
23.1
19.375
75
Viral meningitis w CC/MCC
15
0.6327
21.6
18.076
75
Viral meningitis w/o CC/MCC
0
0.6327
21.6
18.077
77
Hypertensive encephalopathy w MCC
4
1.2617
31.5
26.378
77
Hypertensive encephalopathy w CC
1
0.6327
21.6
18.079
77
Hypertensive encephalopathy w/o CC/MCC
1
0.4824
19.6
16.380
80
Nontraumatic stupor & coma w MCC
47
0.7859
29.2
24.381
80
Nontraumatic stupor & coma w/o MCC
110
0.7028
28.2
23.582
82
Traumatic stupor & coma, coma >1 hr w MCC
9
0.8596
25.2
21.083
82
Traumatic stupor & coma, coma >1 hr w CC
12
0.6327
21.6
18.084
82
Traumatic stupor & coma, coma >1 hr w/o CC/MCC
3
0.6327
21.6
18.085
85
Traumatic stupor & coma, coma <1 hr w MCC
78
0.8652
26.1
21.886
85
Traumatic stupor & coma, coma <1 hr w CC
81
0.6630
24.1
20.187
85
Traumatic stupor & coma, coma <1 hr w/o CC/MCC
15
0.4824
19.6
16.388
88
Concussion w MCC
0
0.4824
19.6
16.389
88
Concussion w CC
1
0.4824
19.6
16.390
88
Concussion w/o CC/MCC
0
0.4824
19.6
16.391
91
Other disorders of nervous system w MCC
218
0.9248
25.9
21.692
91
Other disorders of nervous system w CC
138
0.6661
25.0
20.893
91
Other disorders of nervous system w/o CC/MCC
43
0.6046
22.0
18.394
94
Bacterial & tuberculous infections of nervous system w MCC
203
1.0466
29.2
24.395
94
Bacterial & tuberculous infections of nervous system w CC
106
0.9763
28.9
24.196
94
Bacterial & tuberculous infections of nervous system w/o CC/MCC
31
0.7559
27.6
23.097
97
Non-bacterial infect of nervous sys exc viral meningitis w MCC
48
1.0415
26.0
21.798
97
Non-bacterial infect of nervous sys exc viral meningitis w CC
22
0.8596
25.2
21.099
97
Non-bacterial infect of nervous sys exc viral meningitis w/o CC/MCC
6
0.6327
21.6
18.0100
100
Seizures w MCC
47
0.6380
21.8
18.2101
100
Seizures w/o MCC
55
0.6132
25.4
21.2102
102
Headaches w MCC
9
0.6327
21.6
18.0103
102
Headaches w/o MCC
4
0.6327
21.6
18.0113
113
Orbital procedures w CC/MCC
1
0.8596
25.2
21.0( print page 23893)114
113
Orbital procedures w/o CC/MCC
0
0.8596
25.2
21.0115
115
Extraocular procedures except orbit
0
0.4824
19.6
16.3116
116
Intraocular procedures w CC/MCC
1
0.8596
25.2
21.0117
116
Intraocular procedures w/o CC/MCC
0
0.4824
19.6
16.3121
121
Acute major eye infections w CC/MCC
10
0.6327
21.6
18.0122
121
Acute major eye infections w/o CC/MCC
1
0.6327
21.6
18.0123
123
Neurological eye disorders
0
0.4824
19.6
16.3124
124
Other disorders of the eye w MCC
2
0.6327
21.6
18.0125
124
Other disorders of the eye w/o MCC
8
0.4824
19.6
16.3129
129
Major head & neck procedures w CC/MCC or major device
0
1.3344
30.2
25.2130
129
Major head & neck procedures w/o CC/MCC
0
0.4824
19.6
16.3131
131
Cranial/facial procedures w CC/MCC
0
1.7509
37.9
31.6132
131
Cranial/facial procedures w/o CC/MCC
1
1.7509
37.9
31.6133
133
Other ear, nose, mouth & throat O.R. procedures w CC/MCC
10
1.2617
31.5
26.3134
133
Other ear, nose, mouth & throat O.R. procedures w/o CC/MCC
0
1.2617
31.5
26.3135
135
Sinus & mastoid procedures w CC/MCC
2
0.4824
19.6
16.3136
135
Sinus & mastoid procedures w/o CC/MCC*
1
0.4824
19.6
16.3137
137
Mouth procedures w CC/MCC
1
1.7509
37.9
31.6138
137
Mouth procedures w/o CC/MCC
0
1.7509
37.9
31.6139
139
Salivary gland procedures
0
1.7509
37.9
31.6146
146
Ear, nose, mouth & throat malignancy w MCC
40
1.3344
30.2
25.2147
146
Ear, nose, mouth & throat malignancy w CC
26
0.9930
22.4
18.7148
146
Ear, nose, mouth & throat malignancy w/o CC/MCC
6
0.4824
19.6
16.3149
149
Dysequilibrium
11
0.4824
19.6
16.3150
150
Epistaxis w MCC
0
0.8596
25.2
21.0151
150
Epistaxis w/o MCC
0
0.6327
21.6
18.0152
152
Otitis media & URI w MCC
9
0.8596
25.2
21.0153
152
Otitis media & URI w/o MCC
23
0.6327
21.6
18.0154
154
Nasal trauma & deformity w MCC
50
0.7707
22.0
18.3155
154
Nasal trauma & deformity w CC
47
0.7011
21.1
17.6156
154
Nasal trauma & deformity w/o CC/MCC
13
0.6327
21.6
18.0157
157
Dental & Oral Diseases w MCC
12
0.6327
21.6
18.0158
157
Dental & Oral Diseases w CC
21
0.6327
21.6
18.0159
157
Dental & Oral Diseases w/o CC/MCC
5
0.4824
19.6
16.3163
163
Major chest procedures w MCC
45
2.5063
33.5
27.9164
163
Major chest procedures w CC
6
1.2617
31.5
26.3165
163
Major chest procedures w/o CC/MCC
1
0.8596
25.2
21.0166
166
Other resp system O.R. procedures w MCC
1,506
2.4992
41.8
34.8167
166
Other resp system O.R. procedures w CC
211
1.8587
36.2
30.2168
166
Other resp system O.R. procedures w/o CC/MCC
8
0.8596
25.2
21.0175
175
Pulmonary embolism w MCC
128
0.6640
21.9
18.3176
175
Pulmonary embolism w/o MCC
139
0.5479
20.0
16.7177
177
Respiratory infections & inflammations w MCC
3,181
0.8784
22.8
19.0178
177
Respiratory infections & inflammations w CC
2,334
0.7414
22.1
18.4179
177
Respiratory infections & inflammations w/o CC/MCC
394
0.6225
19.4
16.2180
180
Respiratory neoplasms w MCC
149
0.7975
20.9
17.4181
180
Respiratory neoplasms w CC
109
0.6255
18.7
15.6182
180
Respiratory neoplasms w/o CC/MCC*
11
0.6255
18.7
15.6183
183
Major chest trauma w MCC
1
0.4824
19.6
16.3184
183
Major chest trauma w CC
2
0.4824
19.6
16.3185
183
Major chest trauma w/o CC/MCC
1
0.4824
19.6
16.3186
186
Pleural effusion w MCC
121
0.7576
20.5
17.1187
186
Pleural effusion w CC
60
0.6176
20.5
17.1188
186
Pleural effusion w/o CC/MCC*
15
0.6176
20.5
17.1189
189
Pulmonary edema & respiratory failure
6,586
0.9608
23.9
19.9190
190
Chronic obstructive pulmonary disease w MCC
1,652
0.7477
20.5
17.1191
190
Chronic obstructive pulmonary disease w CC
1,343
0.6220
19.4
16.2192
190
Chronic obstructive pulmonary disease w/o CC/MCC
764
0.5358
17.3
14.4193
193
Simple pneumonia & pleurisy w MCC
1,805
0.7698
21.6
18.0194
193
Simple pneumonia & pleurisy w CC
2,026
0.6368
20.1
16.8195
193
Simple pneumonia & pleurisy w/o CC/MCC
382
0.5374
17.4
14.5196
196
Interstitial lung disease w MCC
110
0.7122
20.1
16.8197
196
Interstitial lung disease w CC
85
0.5716
17.6
14.7198
196
Interstitial lung disease w/o CC/MCC
40
0.5059
15.9
13.3( print page 23894)199
199
Pneumothorax w MCC
49
0.7639
21.8
18.2200
199
Pneumothorax w CC
32
0.5906
17.8
14.8201
199
Pneumothorax w/o CC/MCC
5
0.4824
19.6
16.3202
202
Bronchitis & asthma w CC/MCC
88
0.6509
19.6
16.3203
202
Bronchitis & asthma w/o CC/MCC
21
0.6327
21.6
18.0204
204
Respiratory signs & symptoms
233
0.8315
22.8
19.0205
205
Other respiratory system diagnoses w MCC
324
0.8236
22.3
18.6206
205
Other respiratory system diagnoses w/o MCC
171
0.7182
21.5
17.9207
207
Respiratory system diagnosis w ventilator support 96+ hours
13,186
2.0793
34.5
28.8208
208
Respiratory system diagnosis w ventilator support <96 hours
1,452
1.1752
23.6
19.7215
215
Other heart assist system implant
0
0.8596
25.2
21.0216
216
Cardiac valve & oth maj cardiothoracic proc w card cath w MMCC
0
1.2617
31.5
26.3217
216
Cardiac valve & oth maj cardiothoracic proc w card cath w MCC
0
0.8596
25.2
21.0218
216
Cardiac valve & oth maj cardiothoracic proc w card cath w/o CC/MMCC
0
0.8596
25.2
21.0219
219
Cardiac valve & oth maj cardiothoracic proc w/o card cath w MMCC
0
1.2617
31.5
26.3220
219
Cardiac valve & oth maj cardiothoracic proc w/o card cath w MCC
0
0.8596
25.2
21.0221
219
Cardiac valve & oth maj cardiothoracic proc w/o card cath w/o CC/MCC
0
0.8596
25.2
21.0222
222
Cardiac defib implant w cardiac cath w AMI/HF/shock w MMCC
0
1.7509
37.9
31.6223
222
Cardiac defib implant w cardiac cath w AMI/HF/shock w/o MMCC
0
1.7509
37.9
31.6224
224
Cardiac defib implant w cardiac cath w/o AMI/HF/shock w MMCC
0
1.7509
37.9
31.6225
224
Cardiac defib implant w cardiac cath w/o AMI/HF/shock w/o MMCC
0
1.7509
37.9
31.6226
226
Cardiac defibrillator implant w/o cardiac cath w MMCC
11
1.7509
37.9
31.6227
226
Cardiac defibrillator implant w/o cardiac cath w/o MMCC
9
1.7509
37.9
31.6228
228
Other cardiothoracic procedures w MMCC
0
1.4637
33.3
27.8229
228
Other cardiothoracic procedures w MCC
0
1.2121
28.9
24.1230
228
Other cardiothoracic procedures w/o CC/MMCC
0
0.6327
21.6
18.0231
231
Coronary bypass w PTCA w MMCC
0
1.2617
31.5
26.3232
231
Coronary bypass w PTCA w/o MMCC
0
0.8596
25.2
21.0233
233
Coronary bypass w cardiac cath w MMCC
0
1.2617
31.5
26.3234
233
Coronary bypass w cardiac cath w/o MMCC
0
0.8596
25.2
21.0235
235
Coronary bypass w/o cardiac cath w MMCC
0
1.2617
31.5
26.3236
235
Coronary bypass w/o cardiac cath w/o MMCC
0
0.8596
25.2
21.0237
237
Major cardiovascular procedures w MMCC
7
1.2617
31.5
26.3238
237
Major cardiovascular procedures w/o MMCC
2
0.8596
25.2
21.0239
239
Amputation for circ sys disorders exc upper limb & toe w MMCC
163
1.5067
36.6
30.5240
239
Amputation for circ sys disorders exc upper limb & toe w MCC
83
1.1559
34.1
28.4241
239
Amputation for circ sys disorders exc upper limb & toe w/o CC/MMCC
10
0.8596
25.2
21.0242
242
Permanent cardiac pacemaker implant w MCC*
12
1.7509
37.9
31.6243
242
Permanent cardiac pacemaker implant w MCC
5
1.7509
37.9
31.6244
242
Permanent cardiac pacemaker implant w/o CC/MMCC
1
1.7509
37.9
31.6245
245
AICD generator procedures
0
1.7509
37.9
31.6246
246
Percutaneous cardiovascular proc w drug-eluting stent w MMCC
3
1.2617
31.5
26.3247
246
Percutaneous cardiovascular proc w drug-eluting stent w/o MMCC
1
1.2617
31.5
26.3248
248
Percutaneous cardiovasc proc w non-drug-eluting stent w MMCC
2
1.2617
31.5
26.3249
248
Percutaneous cardiovasc proc w non-drug-eluting stent w/o MCC*
1
1.2617
31.5
26.3250
250
Perc cardiovasc proc w/o coronary artery stent or AMI w MMCC
3
1.7509
37.9
31.6( print page 23895)251
250
Perc cardiovasc proc w/o coronary artery stent or AMI w/o MMCC
0
1.7509
37.9
31.6252
252
Other vascular procedures w MMCC
134
1.4637
33.3
27.8253
252
Other vascular procedures w MCC
51
1.2121
28.9
24.1254
252
Other vascular procedures w/o CC/MMCC
3
0.6327
21.6
18.0255
255
Upper limb & toe amputation for circ system disorders w MMCC
61
1.2589
33.8
28.2256
255
Upper limb & toe amputation for circ system disorders w MCC
42
0.9416
30.0
25.0257
255
Upper limb & toe amputation for circ system disorders w/o CC/MMCC
1
0.4824
19.6
16.3258
258
Cardiac pacemaker device replacement w MMCC
0
1.2617
31.5
26.3259
258
Cardiac pacemaker device replacement w/o MMCC
1
1.2617
31.5
26.3260
260
Cardiac pacemaker revision except device replacement w MMCC
2
1.2617
31.5
26.3261
260
Cardiac pacemaker revision except device replacement w CC*
1
0.8596
25.2
21.0262
260
Cardiac pacemaker revision except device replacement w/o CC/MCC*
1
0.8596
25.2
21.0263
263
Vein ligation & stripping
3
0.4824
19.6
16.3264
264
Other circulatory system O.R. procedures
608
1.0954
31.1
25.9265
265
AICD lead procedures
0
1.2617
31.5
26.3280
280
Circulatory disorders w AMI, discharged alive w MMCC
259
0.7832
23.0
19.2281
280
Circulatory disorders w AMI, discharged alive w MCC
110
0.5772
20.6
17.2282
280
Circulatory disorders w AMI, discharged alive w/o CC/MMCC
35
0.5060
19.9
16.6283
283
Circulatory disorders w AMI, expired w MMCC
56
0.7924
16.1
13.4284
283
Circulatory disorders w AMI, expired w CC*
17
0.7924
16.1
13.4285
283
Circulatory disorders w AMI, expired w/o CC/MMCC
0
0.7924
16.1
13.4286
286
Circulatory disorders except AMI, w card cath w MMCC
8
1.2617
31.5
26.3287
286
Circulatory disorders except AMI, w card cath w/o MMCC
9
0.8596
25.2
21.0288
288
Acute & subacute endocarditis w MMCC
594
1.0060
26.1
21.8289
288
Acute & subacute endocarditis w MCC
217
0.7920
26.1
21.8290
288
Acute & subacute endocarditis w/o CC/MMCC
48
0.6873
24.3
20.3291
291
Heart failure & shock w MMCC
1,728
0.7727
21.9
18.3292
291
Heart failure & shock w MCC
901
0.6294
21.2
17.7293
291
Heart failure & shock w/o CC/MMCC
362
0.5168
18.8
15.7294
294
Deep vein thrombophlebitis w CC/MMCC
6
0.6327
21.6
18.0295
294
Deep vein thrombophlebitis w/o CC/MMCC
0
0.6327
21.6
18.0296
296
Cardiac arrest, unexplained w MMCC
0
0.7924
16.1
13.4297
296
Cardiac arrest, unexplained w MCC
0
0.7924
16.1
13.4298
296
Cardiac arrest, unexplained w/o CC/MMCC
0
0.7924
16.1
13.4299
299
Peripheral vascular disorders w MMCC
587
0.7804
23.4
19.5300
299
Peripheral vascular disorders w MCC
751
0.5847
22.0
18.3301
299
Peripheral vascular disorders w/o CC/MMCC
78
0.5385
20.3
16.9302
302
Atherosclerosis w MMCC
59
0.7597
21.8
18.2303
302
Atherosclerosis w/o MMCC
61
0.5692
20.1
16.8304
304
Hypertension w MMCC
6
0.4824
19.6
16.3305
304
Hypertension w/o MMCC
15
0.4824
19.6
16.3306
306
Cardiac congenital & valvular disorders w MMCC
59
0.8224
22.7
18.9307
306
Cardiac congenital & valvular disorders w/o MMCC
38
0.7367
22.9
19.1308
308
Cardiac arrhythmia & conduction disorders w MMCC
96
0.8384
25.0
20.8309
308
Cardiac arrhythmia & conduction disorders w MCC
107
0.5679
20.8
17.3310
308
Cardiac arrhythmia & conduction disorders w/o CC/MCC
36
0.4590
19.4
16.2311
311
Angina pectoris
7
0.4824
19.6
16.3312
312
Syncope & collapse
58
0.5083
19.7
16.4313
313
Chest pain
6
0.4824
19.6
16.3314
314
Other circulatory system diagnoses w MMCC
1,305
0.8758
22.9
19.1315
314
Other circulatory system diagnoses w MCC
285
0.6575
21.0
17.5316
314
Other circulatory system diagnoses w/o CC/MMCC
72
0.6026
21.0
17.5326
326
Stomach, esophageal & duodenal proc w MMCC
19
1.7509
37.9
31.6327
326
Stomach, esophageal & duodenal proc w MCC
3
1.2617
31.5
26.3328
326
Stomach, esophageal & duodenal proc w/o CC/MCC*
1
1.2617
31.5
26.3329
329
Major small & large bowel procedures w MMCC
31
2.2757
41.8
34.8330
329
Major small & large bowel procedures w MCC
12
1.7509
37.9
31.6331
329
Major small & large bowel procedures w/o CC/MMCC
1
1.7509
37.9
31.6332
332
Rectal resection w MMCC
0
1.6757
34.2
28.5( print page 23896)333
332
Rectal resection w MCC
0
1.1606
30.0
25.0334
332
Rectal resection w/o CC/MMCC
0
1.1606
30.0
25.0335
335
Peritoneal adhesiolysis w MMCC
6
1.7509
37.9
31.6336
335
Peritoneal adhesiolysis w MCC
0
1.7509
37.9
31.6337
335
Peritoneal adhesiolysis w/o CC/MMCC
0
1.7509
37.9
31.6338
338
Appendectomy w complicated principal diag w MMCC
0
0.9726
25.1
20.9339
338
Appendectomy w complicated principal diag w MCC
0
0.7768
23.2
19.3340
338
Appendectomy w complicated principal diag w/o CC/MMCC
0
0.5958
19.6
16.3341
341
Appendectomy w/o complicated principal diag w MMCC
0
0.9726
25.1
20.9342
341
Appendectomy w/o complicated principal diag w MCC
0
0.7768
23.2
19.3343
341
Appendectomy w/o complicated principal diag w/o CC/MMCC
0
0.5958
19.6
16.3344
344
Minor small & large bowel procedures w MMCC
5
1.7509
37.9
31.6345
344
Minor small & large bowel procedures w MCC
0
1.7509
37.9
31.6346
344
Minor small & large bowel procedures w/o CC/MMCC
0
1.7509
37.9
31.6347
347
Anal & stomal procedures w MMCC
3
1.7509
37.9
31.6348
347
Anal & stomal procedures w MCC
3
1.2617
31.5
26.3349
347
Anal & stomal procedures w/o CC/MMCC
0
1.2617
31.5
26.3350
350
Inguinal & femoral hernia procedures w MMCC
0
1.2617
31.5
26.3351
350
Inguinal & femoral hernia procedures w MCC
0
1.2617
31.5
26.3352
350
Inguinal & femoral hernia procedures w/o CC/MMCC
0
1.2617
31.5
26.3353
353
Hernia procedures except inguinal & femoral w MMCC
1
1.7509
37.9
31.6354
353
Hernia procedures except inguinal & femoral w MCC
1
0.6327
21.6
18.0355
353
Hernia procedures except inguinal & femoral w/o CC/MMCC
0
0.6327
21.6
18.0356
356
Other digestive system O.R. procedures w MMCC
141
1.6757
34.2
28.5357
356
Other digestive system O.R. procedures w MCC
36
1.1606
30.0
25.0358
356
Other digestive system O.R. procedures w/o CC/MCC*
4
1.1606
30.0
25.0368
368
Major esophageal disorders w MMCC
26
0.9161
21.1
17.6369
368
Major esophageal disorders w MCC
14
0.8596
25.2
21.0370
368
Major esophageal disorders w/o CC/MMCC
4
0.8596
25.2
21.0371
371
Major gastrointestinal disorders & peritoneal infections w MMCC
722
0.9726
25.1
20.9372
371
Major gastrointestinal disorders & peritoneal infections w MCC
350
0.7768
23.2
19.3373
371
Major gastrointestinal disorders & peritoneal infections w/o CC/MCC
68
0.5958
19.6
16.3374
374
Digestive malignancy w MMCC
96
0.9011
21.5
17.9375
374
Digestive malignancy w MCC
90
0.7804
23.4
19.5376
374
Digestive malignancy w/o CC/MMCC
3
0.6327
21.6
18.0377
377
G.I. hemorrhage w MMCC
90
0.8200
23.8
19.8378
377
G.I. hemorrhage w MCC
53
0.6902
23.8
19.8379
377
G.I. hemorrhage w/o CC/MMCC
18
0.6327
21.6
18.0380
380
Complicated peptic ulcer w MMCC
22
0.8596
25.2
21.0381
380
Complicated peptic ulcer w MCC
17
0.6327
21.6
18.0382
380
Complicated peptic ulcer w/o CC/MMCC
5
0.4824
19.6
16.3383
383
Uncomplicated peptic ulcer w MMCC
0
0.8596
25.2
21.0384
383
Uncomplicated peptic ulcer w/o MMCC
7
0.8596
25.2
21.0385
385
Inflammatory bowel disease w MMCC
36
0.8076
23.3
19.4386
385
Inflammatory bowel disease w MCC
37
0.7126
23.1
19.3387
385
Inflammatory bowel disease w/o CC/MMCC
5
0.4824
19.6
16.3388
388
G.I. obstruction w MMCC
213
0.9486
22.5
18.8389
388
G.I. obstruction w MCC
97
0.7302
20.9
17.4390
388
G.I. obstruction w/o CC/MMCC
17
0.6327
21.6
18.0391
391
Esophagitis, gastroent & misc digest disorders w MMCC
255
0.7914
21.9
18.3392
391
Esophagitis, gastroent & misc digest disorders w/o MMCC
292
0.6568
21.0
17.5393
393
Other digestive system diagnoses w MMCC
779
1.0684
25.7
21.4394
393
Other digestive system diagnoses w MCC
449
0.7872
22.6
18.8395
393
Other digestive system diagnoses w/o CC/MMCC
33
0.5783
22.1
18.4405
405
Pancreas, liver & shunt procedures w MMCC
10
1.2617
31.5
26.3406
405
Pancreas, liver & shunt procedures w CC*
2
1.2617
31.5
26.3407
405
Pancreas, liver & shunt procedures w/o CC/MMCC
0
1.2617
31.5
26.3408
408
Biliary tract proc except only cholecyst w or w/o c.d.e. w MMCC
0
0.6327
21.6
18.0409
408
Biliary tract proc except only cholecyst w or w/o c.d.e. w MCC
1
0.6327
21.6
18.0( print page 23897)410
408
Biliary tract proc except only cholecyst w or w/o c.d.e. w/o CC/MMCC
0
0.6327
21.6
18.0411
411
Cholecystectomy w c.d.e. w MMCC
1
1.7509
37.9
31.6412
411
Cholecystectomy w c.d.e. w MCC
0
1.7509
37.9
31.6413
411
Cholecystectomy w c.d.e. w/o CC/MMCC
0
1.7509
37.9
31.6414
414
Cholecystectomy except by laparoscope w/o c.d.e. w MMCC
2
1.7509
37.9
31.6415
414
Cholecystectomy except by laparoscope w/o c.d.e. w MCC
3
1.7509
37.9
31.6416
414
Cholecystectomy except by laparoscope w/o c.d.e. w/o CC/MMCC
0
1.7509
37.9
31.6417
417
Laparoscopic cholecystectomy w/o c.d.e. w MCC*
11
1.7509
37.9
31.6418
417
Laparoscopic cholecystectomy w/o c.d.e. w MCC
5
1.7509
37.9
31.6419
417
Laparoscopic cholecystectomy w/o c.d.e. w/o CC/MMCC
0
1.7509
37.9
31.6420
420
Hepatobiliary diagnostic procedures w MMCC
0
0.8596
25.2
21.0421
420
Hepatobiliary diagnostic procedures w MCC
0
0.8596
25.2
21.0422
420
Hepatobiliary diagnostic procedures w/o CC/MMCC
0
0.8596
25.2
21.0423
423
Other hepatobiliary or pancreas O.R. procedures w MMCC
23
1.7509
37.9
31.6424
423
Other hepatobiliary or pancreas O.R. procedures w MCC
2
0.8596
25.2
21.0425
423
Other hepatobiliary or pancreas O.R. procedures w/o CC/MMCC
0
0.8596
25.2
21.0432
432
Cirrhosis & alcoholic hepatitis w MMCC
73
0.6977
20.9
17.4433
432
Cirrhosis & alcoholic hepatitis w MCC
24
0.6327
21.6
18.0434
432
Cirrhosis & alcoholic hepatitis w/o CC/MMCC
0
0.6327
21.6
18.0435
435
Malignancy of hepatobiliary system or pancreas w MMCC
53
0.8340
22.0
18.3436
435
Malignancy of hepatobiliary system or pancreas w MCC
26
0.4904
17.2
14.3437
435
Malignancy of hepatobiliary system or pancreas w/o CC/MMCC
4
0.4824
19.6
16.3438
438
Disorders of pancreas except malignancy w MMCC
243
1.0807
23.5
19.6439
438
Disorders of pancreas except malignancy w MCC
144
0.7533
22.0
18.3440
438
Disorders of pancreas except malignancy w/o CC/MMCC
24
0.6327
21.6
18.0441
441
Disorders of liver except malig,cirr,alc hepa w MMCC
123
0.8206
23.1
19.3442
441
Disorders of liver except malig,cirr,alc hepa w MCC
62
0.7145
21.7
18.1443
441
Disorders of liver except malig,cirr,alc hepa w/o CC/MMCC
14
0.4824
19.6
16.3444
444
Disorders of the biliary tract w MMCC
104
0.8334
22.7
18.9445
444
Disorders of the biliary tract w MCC
35
0.6140
20.7
17.3446
444
Disorders of the biliary tract w/o CC/MCC*
8
0.6140
20.7
17.3453
453
Combined anterior/posterior spinal fusion w MMCC
0
1.7509
37.9
31.6454
453
Combined anterior/posterior spinal fusion w MCC
0
1.7509
37.9
31.6455
453
Combined anterior/posterior spinal fusion w/o CC/MMCC
0
1.7509
37.9
31.6456
456
Spinal fusion exc cerv w spinal curv, malig or 9+ fusions w MMCC
1
1.7509
37.9
31.6457
456
Spinal fusion exc cerv w spinal curv, malig or 9+ fusions w MCC
3
1.7509
37.9
31.6458
456
Spinal fusion exc cerv w spinal curv, malig or 9+ fusions w/o CC/MMCC
0
1.7509
37.9
31.6459
459
Spinal fusion except cervical w MMCC
1
1.7509
37.9
31.6460
459
Spinal fusion except cervical w/o MMCC
0
1.7509
37.9
31.6461
461
Bilateral or multiple major joint procs of lower extremity w MMCC
0
1.7509
37.9
31.6462
461
Bilateral or multiple major joint procs of lower extremity w/o MMCC
0
0.8596
25.2
21.0463
463
Wnd debrid & skn grft exc hand, for musculo-conn tiss dis w MMCC
526
1.4126
38.7
32.3464
463
Wnd debrid & skn grft exc hand, for musculo-conn tiss dis w MCC
311
1.0643
34.0
28.3465
463
Wnd debrid & skn grft exc hand, for musculo-conn tiss dis w/o CC/MCC
61
0.9863
34.0
28.3466
466
Revision of hip or knee replacement w MMCC
3
1.2617
31.5
26.3467
466
Revision of hip or knee replacement w MCC
4
1.2617
31.5
26.3468
466
Revision of hip or knee replacement w/o CC/MMCC
1
0.4824
19.6
16.3469
469
Major joint replacement or reattachment of lower extremity w MCC*
3
1.7509
37.9
31.6470
469
Major joint replacement or reattachment of lower extremity w/o MMCC
3
1.7509
37.9
31.6( print page 23898)471
471
Cervical spinal fusion w MMCC
2
0.8596
25.2
21.0472
471
Cervical spinal fusion w MCC
1
0.8596
25.2
21.0473
471
Cervical spinal fusion w/o CC/MMCC
0
0.8596
25.2
21.0474
474
Amputation for musculoskeletal sys & conn tissue dis w MMCC
91
1.5642
38.4
32.0475
474
Amputation for musculoskeletal sys & conn tissue dis w MCC
67
1.1116
33.9
28.3476
474
Amputation for musculoskeletal sys & conn tissue dis w/o CC/MMCC
4
0.8596
25.2
21.0477
477
Biopsies of musculoskeletal system & connective tissue w MMCC
22
1.7509
37.9
31.6478
477
Biopsies of musculoskeletal system & connective tissue w MCC
12
1.2617
31.5
26.3479
477
Biopsies of musculoskeletal system & connective tissue w/o CC/MMCC
0
1.2617
31.5
26.3480
480
Hip & femur procedures except major joint w MMCC
21
1.7509
37.9
31.6481
480
Hip & femur procedures except major joint w MCC
11
1.2617
31.5
26.3482
480
Hip & femur procedures except major joint w/o CC/MMCC
2
0.8596
25.2
21.0483
483
Major joint & limb reattachment proc of upper extremity w CC/MMCC
0
1.7509
37.9
31.6484
483
Major joint & limb reattachment proc of upper extremity w/o CC/MMCC
0
0.8596
25.2
21.0485
485
Knee procedures w pdx of infection w MMCC
10
1.2617
31.5
26.3486
485
Knee procedures w pdx of infection w MCC
10
1.2617
31.5
26.3487
485
Knee procedures w pdx of infection w/o CC/MCC*
2
1.2617
31.5
26.3488
488
Knee procedures w/o pdx of infection w CC/MMCC
1
1.7509
37.9
31.6489
488
Knee procedures w/o pdx of infection w/o CC/MMCC
1
0.6327
21.6
18.0490
490
Back & neck procedures except spinal fusion w CC/MCC or disc devices
8
1.2617
31.5
26.3491
490
Back & neck procedures except spinal fusion w/o CC/MMCC
0
1.2617
31.5
26.3492
492
Lower extrem & humer proc except hip, foot, femur w MMCC
10
1.2617
31.5
26.3493
492
Lower extrem & humer proc except hip, foot, femur w MCC
10
1.2617
31.5
26.3494
492
Lower extrem & humer proc except hip, foot, femur w/o CC/MMCC
1
0.8596
25.2
21.0495
495
Local excision & removal int fix devices exc hip & femur w MMCC
42
1.2616
36.9
30.8496
495
Local excision & removal int fix devices exc hip & femur w CC*
20
1.2616
36.9
30.8497
495
Local excision & removal int fix devices exc hip & femur w/o CC/MCC*
5
1.2616
36.9
30.8498
498
Local excision & removal int fix devices of hip & femur w CC/MCC
9
1.7509
37.9
31.6499
498
Local excision & removal int fix devices of hip & femur w/o CC/MCC
0
1.7509
37.9
31.6500
500
Soft tissue procedures w MMCC
68
1.3427
36.7
30.6501
500
Soft tissue procedures w MCC
28
1.0746
33.3
27.8502
500
Soft tissue procedures w/o CC/MMCC
4
0.8596
25.2
21.0503
503
Foot procedures w MMCC
15
1.2617
31.5
26.3504
503
Foot procedures w MCC
22
0.8596
25.2
21.0505
503
Foot procedures w/o CC/MMCC
3
0.8596
25.2
21.0506
506
Major thumb or joint procedures
0
1.2617
31.5
26.3507
507
Major shoulder or elbow joint procedures w CC/MMCC
1
1.7509
37.9
31.6508
507
Major shoulder or elbow joint procedures w/o CC/MMCC
0
1.7509
37.9
31.6509
509
Arthroscopy
0
0.8596
25.2
21.0510
510
Shoulder, elbow or forearm proc, exc major joint proc w MCC*
1
0.8596
25.2
21.0511
510
Shoulder, elbow or forearm proc, exc major joint proc w CC*
2
0.8596
25.2
21.0512
510
Shoulder, elbow or forearm proc, exc major joint proc w/o CC/MCC
0
0.8596
25.2
21.0513
513
Hand or wrist proc, except major thumb or joint proc w CC/MMCC
6
1.2617
31.5
26.3514
513
Hand or wrist proc, except major thumb or joint proc w/o CC/MCC*
1
1.2617
31.5
26.3( print page 23899)515
515
Other musculoskelet sys & conn tiss O.R. proc w MMCC
60
1.3728
31.5
26.3516
515
Other musculoskelet sys & conn tiss O.R. proc w MCC
27
0.9133
28.0
23.3517
515
Other musculoskelet sys & conn tiss O.R. proc w/o CC/MMCC
0
0.9133
28.0
23.3533
533
Fractures of femur w MMCC
3
0.6327
21.6
18.0534
533
Fractures of femur w/o MMCC
6
0.6327
21.6
18.0535
535
Fractures of hip & pelvis w MMCC
16
0.8596
25.2
21.0536
535
Fractures of hip & pelvis w/o MMCC
25
0.6130
26.9
22.4537
537
Sprains, strains, & dislocations of hip, pelvis & thigh w CC/MMCC
1
0.4824
19.6
16.3538
537
Sprains, strains, & dislocations of hip, pelvis & thigh w/o CC/MCC
0
0.4824
19.6
16.3539
539
Osteomyelitis w MMCC
1,317
0.9928
30.2
25.2540
539
Osteomyelitis w MCC
848
0.7632
27.6
23.0541
539
Osteomyelitis w/o CC/MMCC
227
0.6901
27.1
22.6542
542
Pathological fractures & musculoskelet & conn tiss malig w MMCC
23
0.8596
25.2
21.0543
542
Pathological fractures & musculoskelet & conn tiss malig w MCC
42
0.5682
20.5
17.1544
542
Pathological fractures & musculoskelet & conn tiss malig w/o CC/MMCC
17
0.4824
19.6
16.3545
545
Connective tissue disorders w MMCC
50
0.9093
23.5
19.6546
545
Connective tissue disorders w MCC
38
0.8478
25.5
21.3547
545
Connective tissue disorders w/o CC/MMCC
5
0.4824
19.6
16.3548
548
Septic arthritis w MMCC
172
0.8843
26.1
21.8549
548
Septic arthritis w MCC
200
0.7080
26.9
22.4550
548
Septic arthritis w/o CC/MMCC
73
0.6067
24.2
20.2551
551
Medical back problems w MMCC
83
0.8867
26.5
22.1552
551
Medical back problems w/o MMCC
156
0.6146
24.2
20.2553
553
Bone diseases & arthropathies w MMCC
15
0.6327
21.6
18.0554
553
Bone diseases & arthropathies w/o MMCC
59
0.5022
21.3
17.8555
555
Signs & symptoms of musculoskeletal system & conn tissue w MMCC
3
0.8596
25.2
21.0556
555
Signs & symptoms of musculoskeletal system & conn tissue w/o MCC
8
0.4824
19.6
16.3557
557
Tendonitis, myositis & bursitis w MMCC
84
0.8284
24.6
20.5558
557
Tendonitis, myositis & bursitis w/o MMCC
134
0.6519
23.0
19.2559
559
Aftercare, musculoskeletal system & connective tissue w MMCC
1,368
0.8146
26.1
21.8560
559
Aftercare, musculoskeletal system & connective tissue w MCC
1,613
0.6469
24.7
20.6561
559
Aftercare, musculoskeletal system & connective tissue w/o CC/MMCC
730
0.5579
22.8
19.0562
562
Fx, sprn, strn & disl except femur, hip, pelvis & thigh w MMCC
5
0.8596
25.2
21.0563
562
Fx, sprn, strn & disl except femur, hip, pelvis & thigh w/o MMCC
9
0.4824
19.6
16.3564
564
Other musculoskeletal sys & connective tissue diagnoses w MMCC
307
0.8803
24.2
20.2565
564
Other musculoskeletal sys & connective tissue diagnoses w MCC
199
0.6473
22.7
18.9566
564
Other musculoskeletal sys & connective tissue diagnoses w/o CC/MMCC
60
0.6236
22.5
18.8573
573
Skin graft &/or debrid for skn ulcer or cellulitis w MMCC
1,814
1.3944
38.2
31.8574
573
Skin graft &/or debrid for skn ulcer or cellulitis w MCC
1,761
1.0779
36.0
30.0575
573
Skin graft &/or debrid for skn ulcer or cellulitis w/o CC/MMCC
200
0.9033
30.1
25.1576
576
Skin graft &/or debrid exc for skin ulcer or cellulitis w MMCC
27
1.7840
37.6
31.3577
576
Skin graft &/or debrid exc for skin ulcer or cellulitis w MCC
28
0.8093
27.3
22.8578
576
Skin graft &/or debrid exc for skin ulcer or cellulitis w/o CC/MMCC
11
0.6327
21.6
18.0579
579
Other skin, subcut tiss & breast proc w MMCC
476
1.3648
36.5
30.4580
579
Other skin, subcut tiss & breast proc w MCC
398
1.0585
33.5
27.9581
579
Other skin, subcut tiss & breast proc w/o CC/MMCC
34
0.8032
30.1
25.1582
582
Mastectomy for malignancy w CC/MMCC
1
1.7509
37.9
31.6583
582
Mastectomy for malignancy w/o CC/MMCC
0
1.7509
37.9
31.6( print page 23900)584
584
Breast biopsy, local excision & other breast procedures w CC/MMCC
2
0.6327
21.6
18.0585
584
Breast biopsy, local excision & other breast procedures w/o CC/MMCC
0
0.6327
21.6
18.0592
592
Skin ulcers w MMCC
3,044
0.9490
27.0
22.5593
592
Skin ulcers w MCC
2,805
0.7171
26.1
21.8594
592
Skin ulcers w/o CC/MMCC
435
0.6109
24.8
20.7595
595
Major skin disorders w MMCC
28
0.8138
25.3
21.1596
595
Major skin disorders w/o MMCC
39
0.6547
22.4
18.7597
597
Malignant breast disorders w MMCC
7
1.2617
31.5
26.3598
597
Malignant breast disorders w MCC
7
0.8596
25.2
21.0599
597
Malignant breast disorders w/o CC/MCC*
1
0.8596
25.2
21.0600
600
Non-malignant breast disorders w CC/MMCC
17
0.8596
25.2
21.0601
600
Non-malignant breast disorders w/o CC/MMCC
6
0.4824
19.6
16.3602
602
Cellulitis w MMCC
829
0.6963
21.7
18.1603
602
Cellulitis w/o MMCC
1,634
0.5333
19.9
16.6604
604
Trauma to the skin, subcut tiss & breast w MMCC
29
0.8236
24.4
20.3605
604
Trauma to the skin, subcut tiss & breast w/o MMCC
53
0.6053
23.8
19.8606
606
Minor skin disorders w MMCC
63
0.8273
24.5
20.4607
606
Minor skin disorders w/o MMCC
93
0.5599
20.7
17.3614
614
Adrenal & pituitary procedures w CC/MMCC
0
1.0449
32.5
27.1615
614
Adrenal & pituitary procedures w/o CC/MMCC
0
0.8596
25.2
21.0616
616
Amputat of lower limb for endocrine, nutrit,& metabol dis w MMCC
70
1.4804
38.4
32.0617
616
Amputat of lower limb for endocrine, nutrit,& metabol dis w MCC
132
1.1478
33.1
27.6618
616
Amputat of lower limb for endocrine, nutrit,& metabol dis w/o CC/MMCC
2
0.4824
19.6
16.3619
619
O.R. procedures for obesity w MMCC
1
1.7509
37.9
31.6620
619
O.R. procedures for obesity w MCC
0
1.7509
37.9
31.6621
619
O.R. procedures for obesity w/o CC/MMCC
0
1.7509
37.9
31.6622
622
Skin grafts & wound debrid for endoc, nutrit & metab dis w MCC
171
1.2978
35.7
29.8623
622
Skin grafts & wound debrid for endoc, nutrit & metab dis w MCC
357
1.0065
30.9
25.8624
622
Skin grafts & wound debrid for endoc, nutrit & metab dis w/o CC/MMCC
21
0.6327
21.6
18.0625
625
Thyroid, parathyroid & thyroglossal procedures w MMCC
1
1.2617
31.5
26.3626
625
Thyroid, parathyroid & thyroglossal procedures w MCC
1
0.8596
25.2
21.0627
625
Thyroid, parathyroid & thyroglossal procedures w/o CC/MMCC
0
0.8596
25.2
21.0628
628
Other endocrine, nutrit & metab O.R. proc w MMCC
48
1.3769
32.3
26.9629
628
Other endocrine, nutrit & metab O.R. proc w MCC
110
1.0449
32.5
27.1630
628
Other endocrine, nutrit & metab O.R. proc w/o CC/MMCC
2
0.8596
25.2
21.0637
637
Diabetes w MMCC
421
0.9264
26.6
22.2638
637
Diabetes w MCC
1,052
0.6950
24.5
20.4639
637
Diabetes w/o CC/MMCC
71
0.5777
20.8
17.3640
640
Nutritional & misc metabolic disorders w MMCC
638
0.8424
23.1
19.3641
640
Nutritional & misc metabolic disorders w/o MMCC
548
0.6217
21.5
17.9642
642
Inborn errors of metabolism
5
0.4824
19.6
16.3643
643
Endocrine disorders w MMCC
30
0.6833
24.0
20.0644
643
Endocrine disorders w MCC
28
0.5393
21.1
17.6645
643
Endocrine disorders w/o CC/MCC
1
0.4824
19.6
16.3652
652
Kidney transplant
0
0.0000
0.0
0.0653
653
Major bladder procedures w MCC
2
1.7509
37.9
31.6654
653
Major bladder procedures w MCC
0
1.7509
37.9
31.6655
653
Major bladder procedures w/o CC/MMCC
0
1.7509
37.9
31.6656
656
Kidney & ureter procedures for neoplasm w MMCC
1
1.7509
37.9
31.6657
656
Kidney & ureter procedures forneoplasm w MCC
0
1.7509
37.9
31.6658
656
Kidney & ureter procedures for neoplasm w/o CC/MMCC
0
1.7509
37.9
31.6659
659
Kidney & ureter procedures for non-neoplasm w MMCC
6
1.2617
31.5
26.3660
659
Kidney & ureter procedures for non-neoplasm w MCC
6
1.2617
31.5
26.3661
659
Kidney & ureter procedures for non-neoplasm w/o CC/MMCC
1
0.6327
21.6
18.0662
662
Minor bladder procedures w MMCC
2
1.7509
37.9
31.6663
662
Minor bladder procedures w MCC
2
0.6327
21.6
18.0664
662
Minor bladder procedures w/o CC/MCC
0
0.6327
21.6
18.0( print page 23901)665
665
Prostatectomy w MCC*
2
0.8596
25.2
21.0666
665
Prostatectomy w CC*
1
0.8596
25.2
21.0667
665
Prostatectomy w/o CC/MMCC
0
0.8596
25.2
21.0668
668
Transurethral procedures w MMCC
4
0.8596
25.2
21.0669
668
Transurethral procedures w MCC
3
0.6327
21.6
18.0670
668
Transurethral procedures w/o CC/MMCC
0
0.6327
21.6
18.0671
671
Urethral procedures w CC/MMCC
1
0.6327
21.6
18.0672
671
Urethral procedures w/o CC/MMCC
0
0.6327
21.6
18.0673
673
Other kidney & urinary tract procedures w MMCC
227
1.4418
33.8
28.2674
673
Other kidney & urinary tract procedures w MCC
67
1.1430
29.1
24.3675
673
Other kidney & urinary tract procedures w/o CC/MMCC
0
1.1430
29.1
24.3682
682
Renal failure w MMCC
1,458
0.8945
23.8
19.8683
682
Renal failure w MCC
713
0.7478
22.8
19.0684
682
Renal failure w/o CC/MMCC
91
0.6647
20.6
17.2685
685
Admit for renal dialysis
32
0.8341
25.1
20.9686
686
Kidney & urinary tract neoplasms w MMCC
15
0.8596
25.2
21.0687
686
Kidney & urinary tract neoplasms w MCC
18
0.8596
25.2
21.0688
686
Kidney & urinary tract neoplasms w/o CC/MMCC
3
0.6327
21.6
18.0689
689
Kidney & urinary tract infections w MMCC
868
0.6712
22.6
18.8690
689
Kidney & urinary tract infections w/o MMCC
782
0.5266
20.5
17.1691
691
Urinary stones w esw lithotripsy w CC/MMCC
0
0.4824
19.6
16.3692
691
Urinary stones w esw lithotripsy w/o CC/MMCC
0
0.4824
19.6
16.3693
693
Urinary stones w/o esw lithotripsy w MMCC
3
0.8596
25.2
21.0694
693
Urinary stones w/ot esw lithotripsy w/o MMCC
5
0.4824
19.6
16.3695
695
Kidney & urinary tract signs & symptoms w MMCC
4
1.2617
31.5
26.3696
695
Kidney & urinary tract signs & symptoms w/o MMCC
7
0.6327
21.6
18.0697
697
Urethral stricture
0
0.6327
21.6
18.0698
698
Other kidney & urinary tract diagnoses w MMCC
285
0.9527
23.5
19.6699
698
Other kidney & urinary tract diagnoses w MCC
142
0.6606
22.0
18.3700
698
Other kidney & urinary tract diagnoses w/o CC/MMCC
33
0.5695
21.1
17.6707
707
Major male pelvic procedures w CC/MMCC
0
1.2617
31.5
26.3708
707
Major male pelvic procedures w/o CC/MMCC
0
0.6327
21.6
18.0709
709
Penis procedures w CC/MMCC
15
1.7509
37.9
31.6710
709
Penis procedures w/o CC/MMCC
0
1.7509
37.9
31.6711
711
Testes procedures w CC/MMCC
6
1.2617
31.5
26.3712
711
Testes procedures w/o CC/MMCC
0
1.2617
31.5
26.3713
713
Transurethral prostatectomy w CC/MMCC
2
1.7509
37.9
31.6714
713
Transurethral prostatectomy w/o CC/MMCC
0
1.7509
37.9
31.6715
715
Other male reproductive system O.R. proc for malignancy w CC/MMCC
0
1.2617
31.5
26.3716
715
Other male reproductive system O.R. proc for malignancy w/o CC/MMCC
0
1.2617
31.5
26.3717
717
Other male reproductive system O.R. proc exc malignancy w CC/MMCC
11
1.2617
31.5
26.3718
717
Other male reproductive system O.R. proc exc malignancy w/o CC/MMCC
0
1.2617
31.5
26.3722
722
Malignancy, male reproductive system w MMCC
15
0.6327
21.6
18.0723
722
Malignancy, male reproductive system w MCC
15
0.4824
19.6
16.3724
722
Malignancy, male reproductive system w/o CC/MMCC
0
0.4824
19.6
16.3725
725
Benign prostatic hypertrophy w MMCC
1
0.8596
25.2
21.0726
725
Benign prostatic hypertrophy w/o MMCC
2
0.4824
19.6
16.3727
727
Inflammation of the male reproductive system w MMCC
27
0.7907
23.1
19.3728
727
Inflammation of the male reproductive system w/o MMCC
51
0.5259
20.4
17.0729
729
Other male reproductive system diagnoses w CC/MMCC
49
0.8878
26.2
21.8730
729
Other male reproductive system diagnoses w/o CC/MMCC
8
0.4824
19.6
16.3734
734
Pelvic evisceration, rad hysterectomy & rad vulvectomy w CC/MMCC
0
1.2617
31.5
26.3735
734
Pelvic evisceration, rad hysterectomy & rad vulvectomy w/o CC/MMCC
0
1.2617
31.5
26.3736
736
Uterine & adnexa proc for ovarian or adnexal malignancy w MMCC
0
1.2617
31.5
26.3737
736
Uterine & adnexa proc for ovarian or adnexal malignancy w MCC
0
0.8596
25.2
21.0738
736
Uterine & adnexa proc for ovarian or adnexal malignancy w/o CC/MMCC
0
0.4824
19.6
16.3739
739
Uterine,adnexa proc for non-ovarian/adnexal malig w MMCC
1
1.2617
31.5
26.3( print page 23902)740
739
Uterine,adnexa proc for non-ovarian/adnexal malig w MCC
0
1.2617
31.5
26.3741
739
Uterine,adnexa proc for non-ovarian/adnexal malig w/o CC/MMCC
0
1.2617
31.5
26.3742
742
Uterine & adnexa proc for non-malignancy w CC/MMCC
0
0.8596
25.2
21.0743
742
Uterine & adnexa proc for non-malignancy w/o CC/MMCC
0
0.4824
19.6
16.3744
744
D&C, conization, laparascopy & tubal interruption w CC/MMCC
1
0.8596
25.2
21.0745
744
D&C, conization, laparascopy & tubal interruption w/o CC/MMCC
0
0.8596
25.2
21.0746
746
Vagina, cervix & vulva procedures w CC/MMCC
1
1.7509
37.9
31.6747
746
Vagina, cervix & vulva procedures w/o CC/MMCC
0
1.7509
37.9
31.6748
748
Female reproductive system reconstructive procedures
0
1.2617
31.5
26.3749
749
Other female reproductive system O.R. procedures w CC/MMCC
4
1.2617
31.5
26.3750
749
Other female reproductive system O.R. procedures w/o CC/MMCC
0
1.2617
31.5
26.3754
754
Malignancy, female reproductive system w MMCC
22
1.2617
31.5
26.3755
754
Malignancy, female reproductive system w MCC
21
0.8596
25.2
21.0756
754
Malignancy, female reproductive system w/o CC/MMCC
1
0.4824
19.6
16.3757
757
Infections, female reproductive system w MCC*
52
0.7580
23.7
19.8758
757
Infections, female reproductive system w CC*
27
0.7580
23.7
19.8759
757
Infections, female reproductive system w/o CC/MCC*
5
0.7580
23.7
19.8760
760
Menstrual & other female reproductive system disorders w CC/MMCC
0
0.8596
25.2
21.0761
760
Menstrual & other female reproductive system disorders w/o CC/MMCC
0
0.8596
25.2
21.0765
765
Cesarean section w CC/MMCC
0
0.8596
25.2
21.0766
765
Cesarean section w/o CC/MMCC
0
0.8596
25.2
21.0767
767
Vaginal delivery w sterilization &/or D&C
0
0.8596
25.2
21.0768
768
Vaginal delivery w O.R. proc except steril &/or D&C
0
0.8596
25.2
21.0769
769
Postpartum & post abortion diagnoses w O.R. procedure
0
0.8596
25.2
21.0770
770
Abortion w D&C, aspiration curettage or hysterotomy
0
0.8596
25.2
21.0774
774
Vaginal delivery w complicating diagnoses
0
0.8596
25.2
21.0775
775
Vaginal delivery w/o complicating diagnoses
0
0.8596
25.2
21.0776
776
Postpartum & post abortion diagnoses w/o O.R. procedure
0
0.8596
25.2
21.0777
777
Ectopic pregnancy
0
0.8596
25.2
21.0778
778
Threatened abortion
0
0.7580
23.7
19.8779
779
Abortion w/o D&C
0
0.7580
23.7
19.8780
780
False labor
0
0.7580
23.7
19.8781
781
Other antepartum diagnoses w medical complications
1
0.4824
19.6
16.3782
782
Other antepartum diagnoses w/o medical complications
0
0.4824
19.6
16.3789
789
Neonates, died or transferred to another acute care facility
0
0.4824
19.6
16.3790
790
Extreme immaturity or respiratory distress syndrome, neonate
0
0.4824
19.6
16.3791
791
Prematurity w major problems
0
0.4824
19.6
16.3792
792
Prematurity w/o major problems
0
0.4824
19.6
16.3793
793
Full term neonate w major problems
0
0.4824
19.6
16.3794
794
Neonate w other significant problems
0
0.4824
19.6
16.3795
795
Normal newborn
0
0.4824
19.6
16.3799
799
Splenectomy w MCC
0
0.8596
25.2
21.0800
799
Splenectomy w CC
1
0.8596
25.2
21.0801
799
Splenectomy w/o CC/MMCC
0
0.8596
25.2
21.0802
802
Other O.R. proc of the blood & blood forming organs w MMCC
4
1.2617
31.5
26.3803
802
Other O.R. proc of the blood & blood forming organs w MCC
0
1.2617
31.5
26.3804
802
Other O.R. proc of the blood & blood forming organs w/o CC/MMCC
0
1.2617
31.5
26.3808
808
Major hematol/immun diag exc sickle cell crisis & coagul w MMCC
17
1.2617
31.5
26.3809
808
Major hematol/immun diag exc sickle cell crisis & coagul w MCC
11
0.8596
25.2
21.0810
808
Major hematol/immun diag exc sickle cell crisis & coagul w/o CC/MMCC
1
0.4824
19.6
16.3811
811
Red blood cell disorders w MMCC
43
0.7905
22.8
19.0812
811
Red blood cell disorders w/o MMCC
58
0.5349
20.4
17.0( print page 23903)813
813
Coagulation disorders
55
0.8402
23.2
19.3814
814
Reticuloendothelial & immunity disorders w MMCC
16
0.8596
25.2
21.0815
814
Reticuloendothelial & immunity disorders w MCC
7
0.6327
21.6
18.0816
814
Reticuloendothelial & immunity disorders w/o CC/MMCC
1
0.4824
19.6
16.3820
820
Lymphoma & leukemia w major O.R. procedure w MMCC
0
1.2617
31.5
26.3821
820
Lymphoma & leukemia w major O.R. procedure w MCC
0
0.8596
25.2
21.0822
820
Lymphoma & leukemia w major O.R. procedure w/o CC/MMCC
0
0.8596
25.2
21.0823
823
Lymphoma & non-acute leukemia w other O.R. proc w MMCC
11
1.2617
31.5
26.3824
823
Lymphoma & non-acute leukemia w other O.R. proc w MCC
4
0.8596
25.2
21.0825
823
Lymphoma & non-acute leukemia w other O.R. proc w/o CC/MMCC
0
0.8596
25.2
21.0826
826
Myeloprolif disord or poorly diff neopl w maj O.R. proc w MMCC
1
1.7509
37.9
31.6827
826
Myeloprolif disord or poorly diff neopl w maj O.R. proc w MCC
1
1.7509
37.9
31.6828
826
Myeloprolif disord or poorly diff neopl w maj O.R. proc w/o CC/MMCC
0
1.7509
37.9
31.6829
829
Myeloprolif disord or poorly diff neopl w other O.R. proc w CC/MMCC
7
1.7509
37.9
31.6830
829
Myeloprolif disord or poorly diff neopl w other O.R. proc w/o CC/MMCC
0
1.7509
37.9
31.6834
834
Acute leukemia w/o major O.R. procedure w MMCC
14
0.8596
25.2
21.0835
834
Acute leukemia w/o major O.R. procedure w CC*
14
0.8596
25.2
21.0836
834
Acute leukemia w/o major O.R. procedure w/o CC/MCC*
2
0.8596
25.2
21.0837
837
Chemo w acute leukemia as sdx or w high dose chemo agent w MMCC
0
1.7509
37.9
31.6838
837
Chemo w acute leukemia as sdx or w high dose chemo agent w MCC
0
1.7509
37.9
31.6839
837
Chemo w acute leukemia as sdx or w high dose chemo agent w/o CC/MMCC
0
1.7509
37.9
31.6840
840
Lymphoma & non-acute leukemia w MMCC
133
0.9227
23.1
19.3841
840
Lymphoma & non-acute leukemia w MCC
63
0.7247
19.7
16.4842
840
Lymphoma & non-acute leukemia w/o CC/MMCC
7
0.6327
21.6
18.0843
843
Other myeloprolif dis or poorly diff neopl diag w MMCC
20
0.8596
25.2
21.0844
843
Other myeloprolif dis or poorly diff neopl diag w MCC
11
0.6327
21.6
18.0845
843
Other myeloprolif dis or poorly diff neopl diag w/o CC/MMCC
3
0.6327
21.6
18.0846
846
Chemotherapy w/o acute leukemia as secondary diagnosis w MMCC
49
1.4778
30.0
25.0847
846
Chemotherapy w/o acute leukemia as secondary diagnosis w MCC
43
1.0877
23.8
19.8848
846
Chemotherapy w/o acute leukemia as secondary diagnosis w/o CC/MMCC
0
1.0877
23.8
19.8849
849
Radiotherapy
141
0.7949
21.6
18.0853
853
Infectious & parasitic diseases w O.R. procedure w MMCC
837
1.7864
37.3
31.1854
853
Infectious & parasitic diseases w O.R. procedure w MCC
104
1.1703
33.0
27.5855
853
Infectious & parasitic diseases w O.R. procedure w/o CC/MCC*
5
1.1703
33.0
27.5856
856
Postoperative or post-traumatic infections w O.R. proc w MMCC
301
1.5591
36.7
30.6857
856
Postoperative or post-traumatic infections w O.R. proc w MCC
213
1.0707
32.6
27.2858
856
Postoperative or post-traumatic infections w O.R. proc w/o CC/MMCC
32
0.8943
26.8
22.3862
862
Postoperative & post-traumatic infections w MMCC
1,163
0.9629
25.3
21.1863
862
Postoperative & post-traumatic infections w/o MMCC
1,231
0.7018
23.8
19.8864
864
Fever of unknown origin
11
0.4824
19.6
16.3865
865
Viral illness w MMCC
36
0.7998
22.2
18.5866
865
Viral illness w/o MMCC
14
0.6327
21.6
18.0867
867
Other infectious & parasitic diseases diagnoses w MMCC
357
1.1296
23.4
19.5868
867
Other infectious & parasitic diseases diagnoses w MCC
86
0.7458
22.6
18.8869
867
Other infectious & parasitic diseases diagnoses w/o CC/MMCC
7
0.4824
19.6
16.3( print page 23904)870
870
Septicemia w MV 96+ hours
894
2.2127
33.0
27.5871
871
Septicemia w/o MV 96+ hours w MMCC
4,507
0.8713
23.4
19.5872
871
Septicemia w/o MV 96+ hours w/o MMCC
1,608
0.6584
21.8
18.2876
876
O.R. procedure w principal diagnoses of mental illness
12
0.6327
21.6
18.0880
880
Acute adjustment reaction & psychosocial dysfunction
11
0.4824
19.6
16.3881
881
Depressive neuroses
14
0.6327
21.6
18.0882
882
Neuroses except depressive
16
0.4824
19.6
16.3883
883
Disorders of personality & impulse control
12
0.8596
25.2
21.0884
884
Organic disturbances & mental retardation
146
0.5159
25.4
21.2885
885
Psychoses
1,218
0.4206
23.9
19.9886
886
Behavioral & developmental disorders
18
0.4824
19.6
16.3887
887
Other mental disorder diagnoses
0
0.6327
21.6
18.0894
894
Alcohol/drug abuse or dependence, left ama
0
0.6327
21.6
18.0895
895
Alcohol/drug abuse or dependence w rehabilitation therapy
2
0.4824
19.6
16.3896
896
Alcohol/drug abuse or dependence w/o rehabilitation therapy w MMCC
7
1.2617
31.5
26.3897
896
Alcohol/drug abuse or dependence w/o rehabilitation therapy w/o MMCC
17
0.4824
19.6
16.3901
901
Wound debridements for injuries w MMCC
217
1.5251
35.9
29.9902
901
Wound debridements for injuries w MCC
129
1.0552
30.1
25.1903
901
Wound debridements for injuries w/o CC/MMCC
23
0.8596
25.2
21.0904
904
Skin grafts for injuries w CC/MMCC
78
1.3404
35.6
29.7905
904
Skin grafts for injuries w/o CC/MMCC
6
0.8596
25.2
21.0906
906
Hand procedures for injuries
1
1.7509
37.9
31.6907
907
Other O.R. procedures for injuries w MMCC
91
1.6273
37.5
31.3908
907
Other O.R. procedures for injuries w MCC
63
1.1167
34.0
28.3909
907
Other O.R. procedures for injuries w/o CC/MCC*
6
1.1167
34.0
28.3913
913
Traumatic injury w MMCC
37
0.7480
24.8
20.7914
913
Traumatic injury w/o MMCC
66
0.6073
21.8
18.2915
915
Allergic reactions w MMCC
0
0.4824
19.6
16.3916
915
Allergic reactions w/o MMCC
0
0.4824
19.6
16.3917
917
Poisoning & toxic effects of drugs w MMCC
8
0.4824
19.6
16.3918
917
Poisoning & toxic effects of drugs w/o MMCC
9
0.4824
19.6
16.3919
919
Complications of treatment w MMCC
1,235
1.0924
26.9
22.4920
919
Complications of treatment w MCC
841
0.8582
26.0
21.7921
919
Complications of treatment w/o CC/MMCC
117
0.6163
20.1
16.8922
922
Other injury, poisoning & toxic effect diag w MMCC
7
0.8596
25.2
21.0923
922
Other injury, poisoning & toxic effect diag w/o MMCC
11
0.6327
21.6
18.0927
927
Extensive burns or full thickness burns w MV 96+ hrs w skin graft
1
1.7509
37.9
31.6928
928
Full thickness burn w skin graft or inhal inj w CC/MMCC
9
1.2617
31.5
26.3929
928
Full thickness burn w skin graft or inhal inj w/o CC/MMCC
2
0.6327
21.6
18.0933
933
Extensive burns or full thickness burns w MV 96+ hrs w/o skin graft
10
1.2617
31.5
26.3934
934
Full thickness burn w/o skin grft or inhal inj
40
0.7755
24.2
20.2935
935
Non-extensive burns
46
0.7815
24.5
20.4939
939
O.R. proc w diagnoses of other contact w health services w MCC
267
1.3463
34.1
28.4940
939
O.R. proc w diagnoses of other contact w health services w MCC
135
0.9993
30.6
25.5941
939
O.R. proc w diagnoses of other contact w health services w/o CC/MMCC
15
0.8596
25.2
21.0945
945
Rehabilitation w CC/MMCC
2,220
0.6154
22.1
18.4946
945
Rehabilitation w/o CC/MMCC
428
0.4311
18.9
15.8947
947
Signs & symptoms w MMCC
57
0.6548
22.2
18.5948
947
Signs & symptoms w/o MMCC
69
0.5737
22.2
18.5949
949
Aftercare w CC/MMCC
3,802
0.7034
22.5
18.8950
949
Aftercare w/o CC/MMCC
546
0.5002
19.2
16.0951
951
Other factors influencing health status
28
1.2726
27.0
22.5955
955
Craniotomy for multiple significant trauma
0
1.7509
37.9
31.6956
956
Limb reattachment, hip & femur proc for multiple significant trauma
0
0.8596
25.2
21.0957
957
Other O.R. procedures for multiple significant trauma w MMCC
1
1.2617
31.5
26.3958
957
Other O.R. procedures for multiple significant trauma w MCC
1
0.4824
19.6
16.3( print page 23905)959
957
Other O.R. procedures for multiple significant trauma w/o CC/MMCC
0
0.4824
19.6
16.3963
963
Other multiple significant trauma w MMCC
15
0.8596
25.2
21.0964
963
Other multiple significant trauma w MCC
5
0.6327
21.6
18.0965
963
Other multiple significant trauma w/o CC/MMCC
3
0.4824
19.6
16.3969
969
HIV w extensive O.R. procedure w MMCC
13
1.2617
31.5
26.3970
969
HIV w extensive O.R. procedure w/o MCC*
3
1.2617
31.5
26.3974
974
HIV w major related condition w MMCC
196
1.0056
21.9
18.3975
974
HIV w major related condition w MCC
85
0.6433
18.3
15.3976
974
HIV w major related condition w/o CC/MMCC
16
0.6327
21.6
18.0977
977
HIV w or w/o other related condition
45
0.6975
19.0
15.8981
981
Extensive O.R. procedure unrelated to principal diagnosis w MMCC
1,143
2.3516
43.1
35.9982
981
Extensive O.R. procedure unrelated to principal diagnosis w MCC
290
1.4645
35.2
29.3983
981
Extensive O.R. procedure unrelated to principal diagnosis w/o CC/MMCC
26
1.1662
31.9
26.6984
984
Prostatic O.R. procedure unrelated to principal diagnosis w MMCC
16
1.2617
31.5
26.3985
984
Prostatic O.R. procedure unrelated to principal diagnosis w MCC
9
1.2617
31.5
26.3986
984
Prostatic O.R. procedure unrelated to principal diagnosis w/o CC/MMCC
0
1.2617
31.5
26.3987
987
Non-extensive O.R. proc unrelated to principal diagnosis w MMCC
419
1.7561
36.4
30.3988
987
Non-extensive O.R. proc unrelated to principal diagnosis w MCC
218
1.1596
33.9
28.3989
987
Non-extensive O.R. proc unrelated to principal diagnosis w/o CC/MMCC
10
0.8596
25.2
21.0998
998
Ungroupable
0
0.0000
0.0
0.0999
999
Principal diagnosis invalid as discharge diagnosis
0
0.0000
0.0
0.01
                             The proposed SSO Threshold is calculated as 
                            5/6
                            th of the geometric average length of stay of the proposed MS-LTC-DRG (as specified at § 412.529 in conjunction with § 412.503).* In determining the proposed MS-LTC-DRG relative weights, these proposed MS-LTC-DRGs were adjusted for nonmonotonicity as discussed in section II.I.4. (step 6) of the preamble of this proposed rule.
 Appendix A—Regulatory Impact Analysis I. Overall Impact We have examined the impacts of this proposed rule as required by Executive Order 12866 (September 1993, Regulatory Planning and Review) and 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)). Executive Order 12866 (as amended by Executive Order 13258) 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 a major rule as defined in 5 U.S.C. 804(2). We estimate that the proposed changes for FY 2009 operating and capital payments would redistribute in excess of $100 million among different types of inpatient cases. The market basket update to the IPPS rates required by the statute, in conjunction with other payment changes in this proposed rule, would result in an approximate $4 billion increase in FY 2009 operating and capital payments. Our impact estimate includes the −0.9 percent adjustment for documentation and coding changes to the IPPS standardized amounts and capital Federal rates for FY 2009 in accordance with section 7 of Pub. L. 110-90. For purposes of the impact analysis, we also assume an additional 1.8 percent increase in case-mix between FY 2008 and FY 2009 because we believe the adoption of the MS-DRGs will result in case-mix growth due to documentation and coding changes that do not reflect real changes in patient severity of illness. The estimates of IPPS operating payments do not reflect any changes in hospital admissions or real case-mix intensity, which would also affect overall payment changes. The RFA requires agencies to analyze options for regulatory relief of small businesses. For purposes of the RFA, small entities include small businesses, nonprofit organizations, and small government jurisdictions. Most hospitals and most other providers and suppliers are considered to be small entities, either by being nonprofit organizations or by meeting the Small Business Administration definition of a small business (having revenues of $31.5 million or less in any 1 year). (For details on the latest standards for heath care providers, we refer readers to page 33 of the Table of Small Business Size Standards at the Small Business Administration Web site at: 
                            *http://www.sba.gov/​services/​contractingopportunities/​sizestandardstopics/​tableofsize/​index.html.*) For purposes of the RFA, all hospitals and other providers and suppliers are considered to be small entities. Individuals and States are not included in the definition of a small entity. We believe that this proposed rule would have a significant impact on small entities as explained in this Appendix. Because we acknowledge that many of the affected entities are small entities, the analysis discussed throughout the preamble of this proposed rule constitutes our initial regulatory flexibility analysis. Therefore, we are soliciting comments on our estimates and analysis of the impact of the proposed rule on those small entities. In addition, section 1102(b) of the Act requires us to prepare a regulatory impact 
                            ( print page 23906)
                            analysis for any proposed or final rule that 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 603 of the RFA. With the exception of hospitals located in certain New England counties, for purposes of section 1102(b) of the Act, we now define a small rural hospital as a hospital that is located outside of an urban area and has fewer than 100 beds. Section 601(g) of the Social Security Amendments of 1983 (Pub. L. 98-21) designated hospitals in certain New England counties as belonging to the adjacent urban area. Thus, for purposes of the IPPS, we continue to classify these hospitals as urban hospitals. Section 202 of the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4) also requires that agencies assess anticipated costs and benefits before issuing any rule whose mandates require spending in any 1 year of $100 million in 1995 dollars, updated annually for inflation. That threshold level is currently approximately $130 million. This proposed rule will not mandate any requirements for State, local, or tribal governments, nor will it affect private sector costs. Executive Order 13132 establishes certain requirements that an agency must meet when it promulgates a proposed rule (and subsequent final rule) that imposes substantial direct requirement costs on State and local governments, preempts State law, or otherwise has Federalism implications. As stated above, this proposed rule would not have a substantial effect on State and local governments. The following analysis, in conjunction with the remainder of this document, demonstrates that this proposed rule is consistent with the regulatory philosophy and principles identified in Executive Order 12866, the RFA, and section 1102(b) of the Act. The proposed rule would affect payments to a substantial number of small rural hospitals, as well as other classes of hospitals, and the effects on some hospitals may be significant. II. Objectives The primary objective of the IPPS is to create incentives for hospitals to operate efficiently and minimize unnecessary costs while at the same time ensuring that payments are sufficient to adequately compensate hospitals for their legitimate costs. In addition, we share national goals of preserving the Medicare Hospital Insurance Trust Fund. We believe the proposed changes in this proposed rule would further each of these goals while maintaining the financial viability of the hospital industry and ensuring access to high quality health care for Medicare beneficiaries. We expect that these proposed changes would ensure that the outcomes of this payment system are reasonable and equitable while avoiding or minimizing unintended adverse consequences. III. Limitations of Our Analysis The following quantitative analysis presents the projected effects of our proposed policy changes, as well as statutory changes effective for FY 2009, on various hospital groups. We estimate the effects of individual proposed policy changes by estimating payments per case while holding all other payment policies constant. We use the best data available, but, generally, we do not attempt to make adjustments for future changes in such variables as admissions, lengths of stay, or case-mix. However, in the FY 2008 IPPS final rule, we indicated that we believe that implementation of the MS-DRGs would lead to increases in case-mix that do not reflect actual increases in patients' severity of illness as a result of more comprehensive documentation and coding. As explained in section II.D. of the preamble of this proposed rule, the FY 2008 IPPS final rule with comment period established a documentation and coding adjustment of −1.2 percent for FY 2008, −1.8 percent for FY 2009, and −1.8 percent for FY 2010 to maintain budget neutrality for the transition to the MS DRGs. Subsequently, Congress enacted Pub. L. 110-90. Section 7 of Public L. 110-90 reduced the IPPS documentation and coding adjustment from −1.2 percent to −0.6 percent for FY 2008 and from −1.8 percent to −0.9 percent for FY 2009. Following enactment of Pub. L. 110-90, we revised the FY 2008 standardized amounts (as well as other affected payment factors and thresholds) to reflect the −0.6 percent FY 2008 documentation and coding adjustment. The proposed FY 2009 IPPS national standardized amount included in this proposed rule reflects the documentation and coding adjustment of −0.9 percent for FY 2009. While we have adopted the statutorily mandated documentation and coding adjustments for payment purposes, we continue to believe that an increase in case-mix of 1.8 percent between FY 2008 and FY 2009 is likely as a result of the adoption of the MS DRGs. The impacts shown below illustrate the impact of the FY 2009 IPPS changes on hospital operating payments, including the −0.9 percent FY 2009 documentation and coding adjustment to the IPPS national standardized amounts, both prior to and following the expected 1.8 percent growth in case-mix between FY 2008 and FY 2009. As we have done in the previous rules, we are soliciting comments and information about the anticipated effects of the proposed changes on hospitals and our methodology for estimating them. IV. Hospitals Included in and Excluded From the IPPS The prospective payment systems for hospital inpatient operating and capital-related costs encompass most general short-term, acute care hospitals that participate in the Medicare program. There were 35 Indian Health Service hospitals in our database, which we excluded from the analysis due to the special characteristics of the prospective payment methodology for these hospitals. Among other short-term, acute care hospitals, only the 46 such hospitals in Maryland remain excluded from the IPPS under the waiver at section 1814(b)(3) of the Act. As of March 2008, there are 3,528 IPPS hospitals to be included in our analysis. This represents about 58 percent of all Medicare-participating hospitals. The majority of this impact analysis focuses on this set of hospitals. There are also approximately 1,311 CAHs. These small, limited service hospitals are paid on the basis of reasonable costs rather than under the IPPS. There are also 1,219 specialty hospitals and 2,291 specialty units that are excluded from the IPPS. These specialty hospitals include IPFs, IRFs, LTCHs, RNHCIs, children's hospitals, and cancer hospitals. Changes in payments for IPFs and IRFs are made through other separate rulemaking. Payment impacts for these specialty hospitals and units are not included in this proposed rule. There is also a separate rule to update and make changes to the LTCH PPS for its current July 1 through June 30 rate year (RY). However, we have traditionally used the IPPS rule to update the LTCH patient classifications and relative weights because the LTCH PPS uses the same DRGs as the IPPS, resulting in the LTCH relative weights being reclassified and recalibrated according to the same schedule as the IPPS (that is, for each Federal fiscal year). The impacts of our policy changes on LTCHs, where applicable, are discussed below. (We note that, as discussed in section II.I. of the preamble of this proposed rule, in the RY 2009 LTCH PPS proposed rule 73 FR 5351 through 5352), we proposed to move the annual LTCH PPS RY update (currently effective July 1) to be effective October 1 through September 30 (the Federal fiscal year) each year beginning October 1, 2009. Under this proposal, RY 2009 would be extended 3 months, such that RY 2009 would be the 15-month period of July 1, 2008 through September 30, 2009.) V. Effects on Excluded Hospitals and Hospital Units As of March 2008, there were 1,219 hospitals excluded from the IPPS. Of these 1,219 hospitals, 314 IPFs, 78 children's hospitals, 11 cancer hospitals, and 19 RNHCIs are either being paid on a reasonable cost basis or have a portion of the PPS payment based on reasonable cost principles subject to the rate-of-increase ceiling under § 413.40. The remaining providers, 221 IRFs, 394 LTCHs, and 182 IPFs, are paid 100 percent of the Federal prospective rate under the IRF PPS and the LTCH PPS, respectively, or 100 percent of the Federal per diem amount under the IPF PPS. As stated above, IRFs and IPFs are not affected by this proposed rule. The impacts of the changes to LTCHs are discussed separately below. In addition, there are 1,319 IPFs co-located in hospitals otherwise subject to the IPPS, 788 of which are paid on a blend of the IPF PPS per diem payment and the reasonable cost-based payment. The remaining 531 IPF units are paid 100 percent of the Federal amount under the IPF PPS. There are 972 IRFs (paid under the IRF PPS) co-located in hospitals otherwise subject to the IPPS. In the past, hospitals and units excluded from the IPPS have been paid based on their reasonable costs subject to limits as established by the Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA). Hospitals that continue to be paid fully on a reasonable cost basis are subject to TEFRA limits for FY 2009. For these hospitals 
                            ( print page 23907)
                            (cancer and children's hospitals), consistent with section 1886(b)(3)(B)(ii) of the Act, we are proposing an update that is the percentage increase in the FY 2009 IPPS operating market basket, which is estimated to be 3.0 percent, based on Global Insights, Inc.'s 2008 first quarter forecast of the IPPS operating market basket increase. In addition, in accordance with § 403.752(a) of the regulations, RNHCIs are paid under § 413.40, which also uses section 1886(b)(3)(B)(ii) of the Act to update target amounts by the rate-of-increase percentage. For RNHCIs, the proposed update is the percentage increase in the FY 2009 IPPS operating market basket increase, which is estimated to be 3.0 percent, based on Global Insight, Inc.'s 2008 first quarter forecast of the IPPS operating market basket increase. The final rule implementing the IPF PPS (69 FR 66922) established a 3-year transition to the IPF PPS during which some providers received a blend of the IPF PPS per diem payment and the TEFRA reasonable cost-based payment. This transitional period for a blended payment amount for IPFs ended for cost reporting periods that began on or after January 1, 2008. Because the reasonable cost-based amount is zero percent for cost reporting periods beginning during CY 2008, no IPF will have a portion of its PPS payment that is based in part on reasonable cost subject to the rate-of-increase ceiling during FY 2009. Thus, there is no longer a need for an update factor for IPFs' TEFRA target amount for FY 2009 and thereafter. The impact on excluded hospitals and hospital units of the proposed update in the rate-of-increase limit depends on the cumulative cost increases experienced by each excluded hospital or unit since its applicable base period. For excluded hospitals and units that have maintained their cost increases at a level below the rate-of-increase limits since their base period, the major effect is on the level of incentive payments these hospitals and hospital units receive. Conversely, for excluded hospitals and hospital units with per-case cost increases above the cumulative update in their rate-of-increase limits, the major effect is the amount of excess costs that will not be reimbursed. We note that, under § 413.40(d)(3), an excluded hospital or unit whose costs exceed 110 percent of its rate-of-increase limit receives its rate-of-increase limit plus 50 percent of the difference between its reasonable costs and 110 percent of the limit, not to exceed 110 percent of its limit. In addition, under the various provisions set forth in § 413.40, certain excluded hospitals and hospital units can obtain payment adjustments for justifiable increases in operating costs that exceed the limit. VI. Quantitative Effects of the Proposed Policy Changes Under the IPPS for Operating Costs A. Basis and Methodology of Estimates In this proposed rule, we are announcing proposed policy changes and payment rate updates for the IPPS for operating costs. Changes to the capital payments are discussed in section VIII. of this Appendix. Based on the overall percentage change in payments per case estimated using our payment simulation model, we estimate that total FY 2009 operating payments will increase 4.1 percent compared to FY 2008, largely due to the statutorily mandated update to the IPPS rates. This amount also reflects the −0.9 percent FY 2009 documentation and coding adjustment to the IPPS national standardized amounts and our assumption of an additional 1.8 percent increase in case-mix between FY 2008 and FY 2009 as a result of improvements in documentation and coding that do not represent real increases in underlying resource demands and patient acuity due to the adoption of the MS-DRGs. The impacts do not illustrate changes in hospital admissions or real case-mix intensity, which will also affect overall payment changes. We have prepared separate impact analyses of the changes to each system. This section deals with changes to the operating prospective payment system. Our payment simulation model relies on the most recent available data to enable us to estimate the impacts on payments per case of certain changes in this proposed rule. However, there are other changes for which we do not have data available that would allow us to estimate the payment impacts using this model. For those changes, we have attempted to predict the payment impacts based upon our experience and other more limited data. The data used in developing the quantitative analyses of changes in payments per case presented below are taken from the FY 2007 MedPAR file and the most current Provider-Specific File that is used for payment purposes. Although the analyses of the changes to the operating PPS do not incorporate cost data, data from the most recently available hospital cost report were used to categorize hospitals. Our analysis has several qualifications. First, in this analysis, we do not make adjustments for future changes in such variables as admissions, lengths of stay, or underlying growth in real case-mix. Second, due to the interdependent nature of the IPPS payment components, it is very difficult to precisely quantify the impact associated with each change. Third, we use various sources for the data used to categorize hospitals in the tables. In some cases, particularly the number of beds, there is a fair degree of variation in the data from different sources. We have attempted to construct these variables with the best available source overall. However, for individual hospitals, some miscategorizations are possible. Using cases from the FY 2007 MedPAR file, we simulated payments under the operating IPPS given various combinations of payment parameters. Any short-term, acute care hospitals not paid under the IPPS (Indian Health Service hospitals and hospitals in Maryland) were excluded from the simulations. The impact of payments under the capital IPPS, or the impact of payments for costs other than inpatient operating costs, are not analyzed in this section. Estimated payment impacts of FY 2009 changes to the capital IPPS are discussed in section VIII. of this Appendix. The changes discussed separately below are the following: The effects of the annual reclassification of diagnoses and procedures, full implementation of the MS-DRG system and 100 percent cost-based DRG relative weights,
                        The effects of the changes in hospitals' wage index values reflecting wage data from hospitals’ cost reporting periods beginning during FY 2005, compared to the FY 2004 wage data.
                        The effects of the recalibration of the DRG relative weights as required by section 1886(d)(4)(C) of the Act, including the wage and recalibration budget neutrality factors.
                        The effects of geographic reclassifications by the MGCRB that will be effective in FY 2009.
                        The effects of the proposal to apply the rural floor budget neutrality adjustment at the State level, redistributing payments within the State, rather than adjusting payments to hospitals in other States.
                        The effects of the proposal to apply the imputed rural floor budget neutrality adjustment to the wage index at the State-level, rather than applying it to the standardized amount at the national level.
                        The effects of section 505 ofPub. L. 108-173, which provides for an increase in a hospital's wage index if the hospital qualifies by meeting a threshold percentage of residents of the county where the hospital is located who commute to work at hospitals in counties with higher wage indexes.
                        The effect of the budget neutrality adjustment being made for the adoption of the MS-DRGs under section 1886(d)(3)(A)(iv) of the Act for the change in aggregate payments that is a result of changes in the coding or classification of discharges that do not reflect real changes in case-mix.
                        The total estimated change in payments based on the proposed FY 2009 policies relative to payments based on FY 2008 policies. To illustrate the impacts of the proposed FY 2009 changes, our analysis begins with a FY 2008 baseline simulation model using: the proposed FY 2009 update of 3.0 percent; the FY 2008 DRG GROUPER (Version 25.0); the most current CBSA designations for hospitals based on OMB's MSA definitions; the FY 2008 wage index; and no MGCRB reclassifications. Outlier payments are set at 5.1 percent of total operating DRG and outlier payments. Section 1886(b)(3)(B)(viii) of the Act, as added by section 5001(a) of Pub. L. 109-171, provides that for FY 2007 and subsequent years, the update factor will be reduced by 2.0 percentage points for any hospital that does not submit quality data in a form and manner and at a time specified by the Secretary. At the time this impact was prepared, 186 providers did not receive the full market basket rate-of-increase for FY 2008 because they failed the quality data submission process. For purposes of the simulations shown below, we modeled the proposed payment changes for FY 2009 using a reduced update for these 186 hospitals. However, we do not have enough information to determine which hospitals will not receive the full market basket rate-of-increase for FY 2009 at this time. Each policy change, statutorily or otherwise, is then added incrementally to 
                            ( print page 23908)
                            this baseline, finally arriving at an FY 2009 model incorporating all of the proposed changes. This simulation allows us to isolate the effects of each proposed change. Our final comparison illustrates the proposed percent change in payments per case from FY 2008 to FY 2009. Three factors not discussed separately have significant impacts here. The first is the update to the standardized amount. In accordance with section 1886(b)(3)(B)(i) of the Act, we are updating the standardized amounts for FY 2009 using the most recently forecasted hospital market basket increase for FY 2009 of 3.0 percent. (Hospitals that fail to comply with the quality data submission requirements to receive the full update will receive an update reduced by 2.0 percentage points to 1.0 percent.) Under section 1886(b)(3)(B)(iv) of the Act, the updates to the hospital-specific amounts for SCHs and for MDHs are also equal to the market basket increase, or 3.0 percent. A second significant factor that affects the proposed changes in hospitals' payments per case from FY 2008 to FY 2009 is the change in a hospital's geographic reclassification status from one year to the next. That is, payments may be reduced for hospitals reclassified in FY 2008 that are no longer reclassified in FY 2009. Conversely, payments may increase for hospitals not reclassified in FY 2008 that are reclassified in FY 2009. Particularly with the expiration of section 508 of Pub. L. 108-173, the reclassification provision, these impacts can be quite substantial, so if a relatively small number of hospitals in a particular category lose their reclassification status, the percentage change in payments for the category may be below the national mean. A third significant factor is that we currently estimate that actual outlier payments during FY 2008 will be 4.8 percent of total DRG payments. When the FY 2008 final rule was published, we projected FY 2008 outlier payments would be 5.1 percent of total DRG plus outlier payments; the average standardized amounts were offset correspondingly. The effects of the lower than expected outlier payments during FY 2009 (as discussed in the Addendum to this proposed rule) are reflected in the analyses below comparing our current estimates of FY 2008 payments per case to estimated FY 2009 payments per case (with outlier payments projected to equal 5.1 percent of total DRG payments). B. Analysis of Table I Table I displays the results of our analysis of the proposed changes for FY 2009. The table categorizes hospitals by various geographic and special payment consideration groups to illustrate the varying impacts on different types of hospitals. The top row of the table shows the overall impact on the 3,528 hospitals included in the analysis. The next four rows of Table I contain hospitals categorized according to their geographic location: all urban, which is further divided into large urban and other urban; and rural. There are 2,542 hospitals located in urban areas included in our analysis. Among these, there are 1,402 hospitals located in large urban areas (populations over 1 million), and 1,140 hospitals in other urban areas (populations of 1 million or fewer). In addition, there are 986 hospitals in rural areas. The next two groupings are by bed-size categories, shown separately for urban and rural hospitals. The final groupings by geographic location are by census divisions, also shown separately for urban and rural hospitals. The second part of Table I shows hospital groups based on hospitals' FY 2009 payment classifications, including any reclassifications under section 1886(d)(10) of the Act. For example, the rows labeled urban, large urban, other urban, and rural show that the number of hospitals paid based on these categorizations after consideration of geographic reclassifications (including reclassifications under section 1886(d)(8)(B) and section 1886(d)(8)(E) of the Act that have implications for capital payments) are 2,584, 1,424, 1,160 and 944, respectively. The next three groupings examine the impacts of the proposed changes on hospitals grouped by whether or not they have GME residency programs (teaching hospitals that receive an IME adjustment) or receive DSH payments, or some combination of these two adjustments. There are 2,485 nonteaching hospitals in our analysis, 805 teaching hospitals with fewer than 100 residents, and 238 teaching hospitals with 100 or more residents. In the DSH categories, hospitals are grouped according to their DSH payment status, and whether they are considered urban or rural for DSH purposes. The next category groups together hospitals considered urban after geographic reclassification, in terms of whether they receive the IME adjustment, the DSH adjustment, both, or neither. The next five rows examine the impacts of the proposed changes on rural hospitals by special payment groups (SCHs, RRCs, and MDHs). There were 197 RRCs, 355 SCHs, 156 MDHs, 102 hospitals that are both SCHs and RRCs, and 12 hospitals that are both an MDH and an RRC. The next series of groupings are based on the type of ownership and the hospital's Medicare utilization expressed as a percent of total patient days. These data were taken from the FY 2005 Medicare cost reports. The next two groupings concern the geographic reclassification status of hospitals. The first grouping displays all urban hospitals that were reclassified by the MGCRB for FY 2009. The second grouping shows the MGCRB rural reclassifications. The final category shows the impact of the proposed policy changes on the 20 cardiac specialty hospitals in our analysis. Table I.—Impact Analysis of Proposed Changes for FY 2009
Number of hospitals 1
Proposed FY 2009 cost based DRG Weights & MS-DRG changes 2
Proposed FY 2009 wage data 3
Proposed FY 2009 DRG, rel. wts. and wage index changes 4
FY 2009 MGCRB Reclassifications 5
Application of proposed rural floor and imputed rural floor, including proposed within state budget neutrality 6
Proposed FY 2009 out-migration adjustment 7
All proposed FY 2009 changes w/CMI adjustment prior to estimated CMI growth 8
All proposed FY 2009 changes w/CMI adjustment and estimated CMI growth 9(1)
(2)
(3)
(4)
(5)
(6)
(7)
(8)
(9)All Hospitals
3,528
0.1
−0.1
0
0
0
0
2.3
4.1By Geographic Location:Urban hospitals
2,542
0.2
−0.1
0.1
−0.2
0
0
2.4
4.2Large urban areas
1,402
0.5
−0.1
0.3
−0.4
−0.1
0
2.6
4.4Other urban areas
1,140
0
0
−0.1
−0.1
0.1
0
2.2
3.9Rural hospitals
986
−1
0
−1.1
2.1
−0.1
0.1
1.5
3.3Bed Size (Urban):0-99 beds
643
−0.7
−0.1
−0.8
−0.4
0.1
0
1.6
3.4100-199 beds
829
0.1
0
0
−0.1
0.1
0
2.2
4200-299 beds
483
0.2
0
0.2
−0.2
−0.1
0
2.4
4.2300-499 beds
411
0.3
0
0.3
−0.2
0
0
2.6
4.3500 or more beds
176
0.5
−0.3
0.1
−0.3
0
0
2.5
4.3Bed Size (Rural):0-49 beds
338
−2.3
0.1
−2.3
0.6
0
0.2
0.7
2.550-99 beds
373
−1.2
0
−1.3
1.1
−0.1
0.2
1.2
3100-149 beds
166
−0.9
0.1
−0.8
2.5
0
0.1
1.5
3.3150-199 beds
67
−0.6
−0.1
−0.8
3
−0.1
0
2
3.8( print page 23909)200 or more beds
42
−0.3
−0.1
−0.4
3.2
−0.1
0
2.1
3.9Urban by Region:New England
121
0
0
−0.1
0.5
0.1
0
1.2
3Middle Atlantic
348
0
−0.5
−0.5
0.1
0
0
1.2
3South Atlantic
385
0.4
−0.3
0.1
−0.4
0
0
2.7
4.4East North Central
394
0.5
−0.5
−0.1
−0.4
0
0
2.4
4.1East South Central
163
−0.1
−0.2
−0.2
−0.2
0
0
2.4
4.2West North Central
157
−0.1
0.2
0.1
−0.7
0
0
2.8
4.5West South Central
371
0.4
0
0.3
−0.6
0
0
2.9
4.7Mountain
157
0.3
0.1
0.5
−0.2
0
0
3.2
5Pacific
393
0.4
0.9
1.2
−0.2
0
0
3.4
5.2Puerto Rico
53
−0.2
−0.7
−0.9
−0.7
0
0
1.4
3.2Rural by Region:New England
23
−0.8
−0.4
−1.3
2.4
−0.9
0
0.6
2.3Middle Atlantic
70
−0.9
−0.1
−1.1
2
0
0.1
1.3
3.1South Atlantic
172
−0.6
−0.1
−0.7
2.2
0
0.1
1.9
3.7East North Central
121
−0.9
−0.3
−1.3
1.6
0
0.1
1.4
3.2East South Central
176
−1.3
−0.1
−1.4
2.7
0
0.1
1.6
3.4West North Central
113
−0.9
0.1
−0.8
1.7
0
0.1
1.6
3.4West South Central
200
−1.7
0.5
−1.3
2.5
0
0.1
1.3
3.1Mountain
75
−0.9
0
−1
0.5
0
0.1
1.2
3.1Pacific
36
−0.7
0.6
−0.2
1.8
−0.3
0
1.8
3.6By Payment Classification:Urban hospitals
2,584
0.2
−0.1
0.1
−0.2
0
0
2.4
4.2Large urban areas
1,424
0.4
−0.1
0.3
−0.4
−0.1
0
2.6
4.4Other urban areas
1,160
0
0
−0.1
0
0.1
0
2.2
3.9Rural areas
944
−1
0
−1.1
2
−0.1
0.1
1.5
3.3Teaching Status:Nonteaching
2,485
−0.2
0
−0.2
0.3
0
0
2.2
4Fewer than 100 residents
805
0.2
0
0.1
−0.2
0
0
2.4
4.2100 or more residents
238
0.5
−0.3
0.2
−0.3
0
0
2.5
4.2Urban DSH:Non-DSH
838
−0.3
−0.2
−0.4
−0.1
0
0
1.8
3.6100 or more beds
1,534
0.4
−0.1
0.3
−0.3
0
0
2.6
4.3Less than 100 beds
354
−0.7
0
−0.8
0
0
0
1.6
3.4Rural DSH:SCH
389
−1.5
0
−1.5
0.4
0
0.1
1.5
3.3RRC
206
−0.6
0
−0.6
3.4
−0.1
0
1.9
3.7100 or more beds
39
−0.8
0
−0.9
1.3
0
0.4
1.3
3.1Less than 100 beds
168
−1.7
0
−1.8
1.3
0
0.3
0.6
2.4Urban teaching and DSH:Both teaching and DSH
811
0.4
−0.1
0.3
−0.4
0
0
2.5
4.3Teaching and no DSH
172
−0.1
−0.2
−0.3
0
0
0
1.8
3.6No teaching and DSH
1,077
0.2
0
0.2
0
0.1
0
2.5
4.3No teaching and no DSH
524
−0.2
−0.2
−0.4
−0.3
0
0
1.9
3.7Special Hospital Types:RRC
197
−0.4
−0.1
−0.4
3.2
0
0
2.3
4.1SCH
355
−1.3
0.1
−1.3
0.4
0
0.1
1.2
3MDH
156
−1.8
0.1
−1.8
0.5
0
0.2
2
3.8SCH and RRC
102
−0.5
0.1
−0.5
1.7
0
0
2.2
4.1MDH and RRC
12
−1.3
0.1
−1.3
0.9
−0.3
0
1
2.8Type of Ownership:Voluntary
2,027
0.1
−0.1
0
0
0
0
2.3
4Proprietary
827
0
0
−0.1
0
−0.1
0
2.4
4.1Government
587
0.1
−0.1
0
0.1
0.1
0
2.6
4.4Medicare Utilization as a Percent of Inpatient Days:0-25
255
0.8
−0.1
0.7
−0.4
−0.2
0
3.2
4.925-50
1,350
0.3
0
0.3
−0.3
0
0
2.7
4.450-65
1,431
−0.1
−0.2
−0.3
0.4
0.1
0
1.9
3.7Over 65
392
−0.8
−0.2
−1
0.5
0
0.1
1.2
3FY 2009 Reclassifications by the Medicare Geographic Classification Review Board:All Reclassified Hospitals
805
0
0
0
2
−0.1
0
2.1
3.8Non-Reclassified Hospitals
2,723
0.2
−0.1
0
−0.7
0
0
2.4
4.2Urban Hospitals Reclassified
445
0.2
0
0.2
1.5
−0.2
0
2.1
3.9Urban Nonreclassified, FY 2009
2,075
0.3
−0.1
0.1
−0.7
0.1
0
2.5
4.3All Rural Hospitals Reclassified Full Year FY 2009
360
−0.7
0
−0.7
3.3
−0
0
1.8
3.7Rural Nonreclassified Hospitals Full Year FY 2009
565
−1.5
−0
−1.6
−0.4
−0.1
0.3
1
2.8( print page 23910)All Section 401 Reclassified Hospitals
29
−1.3
−0.2
−1.6
0.6
0
0
1.6
3.5Other Reclassified Hospitals (Section 1886(d)(8)(B))
61
−1
−0.2
−1.3
3.2
−0.2
0.1
1
2.8Specialty HospitalsCardiac specialty Hospitals
20
−2.2
−0.1
−2.4
−0.7
0.1
0
0
1.81
                             Because data necessary to classify some hospitals by category were missing, the total number of hospitals in each category may not equal the national total. Discharge data are from FY 2007, and hospital cost report data are from reporting periods beginning in FY 2006 and FY 2005.2
                             This column displays the payment impact of the changes to the V26 GROUPER and the recalibration of the DRG weights based on FY 2007 MedPAR data in accordance with section 1886(d)(4)(C)(iii) of the Act.3
                             This column displays the payment impact of updating the wage index data to the FY 2005 cost report data.4
                             This column displays the combined payment impact of the changes in column 2 and column 3 and the budget neutrality factors for DRG and wage index changes in accordance with section 1886(d)(4)(C)(iii) of the Act and section 1886(d)(3)(E) of the Act.5
                             Shown here are the effects of geographic reclassifications by the Medicare Geographic Classification Review Board (MGCRB). The effects demonstrate the FY 2009 payment impact of going from no reclassifications to the reclassifications scheduled to be in effect for FY 2008. Reclassification for prior years has no bearing on the payment impacts shown here. This column reflects the geographic budget neutrality factor of 0.992333.6
                             This column displays the effects of the rural floor and the imputed rural floor, including the proposal to apply the budget neutrality adjustment within State.7
                             This column displays the impact of section 505 of Pub. L. 108-173, which provides for an increase in a hospital's wage index if the hospital qualifies by meeting a threshold percentage of residents of the county where the hospital is located who commute to work at hospitals in counties with higher wage indexes.8
                             This column shows changes in payments from FY 2008 to FY 2009, including the proposed FY 2009 −0.9 percent documentation and coding adjustment, but not the projected 1.8 percent increase in case-mix expected to occur in FY 2009 due to improvements in documentation and coding. It incorporates all of the changes displayed in Columns 4, 5, 6, 7 (the changes displayed in Columns 2 and 3 are included in Column 4). It also reflects the impact of the FY 2009 update, and changes in hospitals' reclassification status in FY 2009 compared to FY 2008.9
                             This column shows changes in payments from FY 2008 to FY 2009 including the proposed FY 2009 −0.9 percent documentation and coding adjustment and the projected 1.8 percent increase in case-mix expected to occur in FY 2009 due to improvements in documentation and coding. It incorporates all of the changes displayed in Columns 4, 5, 6, 7, 8 (the changes displayed in Columns 2 and 3 are included in Column 4). It also reflects the impact of the FY 2008 update, and changes in hospitals' reclassification status in FY 2009 compared to FY 2008. The sum of these impacts may be different from the percentage changes shown here due to rounding and interactive effects.
 C. Effects of the Proposed Changes to the MS-DRG Reclassifications and Relative Cost-Based Weights (Column 2) In Column 2 of Table I, we present the effects of the DRG reclassifications, as discussed in section II. of the preamble to this proposed rule. Section 1886(d)(4)(C)(i) of the Act requires us annually to make appropriate classification changes in order to reflect changes in treatment patterns, technology, and any other factors that may change the relative use of hospital resources. As discussed in the preamble of this proposed rule, the FY2009 DRG relative weights will be 100 percent cost-based and 100 percent MS-DRGs, thus completing our three year transition to cost-based relative weights and our two year transition to MS-DRGs. For FY 2009, the MS-DRGs are calculated using the FY2007 MedPAR data grouped to the Version 26.0 (FY2009) DRGs. The proposed methods of calculating the relative weights and the reclassification changes to the GROUPER are described in more detail in section II.H. of the preamble to this proposed rule. In previous years, this column would also reflect the effects of the recalibration budget neutrality factor that is applied to the hospital-specific rates and the Puerto Rico-specific standardized amount. However, for this proposed rule, we show the effects of the recalibration budget neutrality factor of 0.998700 in column 4. We note that, consistent with section 1886(d)(4)(C)(iii) of the Act, we are applying a budget neutrality factor to the national standardized amounts to ensure that the overall payment impact of the DRG changes (combined with the wage index changes) is budget neutral. This proposed wage and recalibration budget neutrality factor of 0.99525 is applied to payments in Column 4 and not Column 2. The proposed changes to the relative weights and DRGs shown in column 2 are prior to any offset for budget neutrality. The “All Hospitals” line indicates that proposed changes in this column will increase payments by 0.1 percent. However, as stated earlier, the proposed changes shown in this column are combined with revisions to the wage index, and the budget neutrality adjustments made for these changes are shown in column 4. Thus, the impact after accounting only for budget neutrality for proposed changes to the DRG relative weights and classification is somewhat lower than the figures shown in this column (approximately 0.1 percent). D. Effects of Proposed Wage Index Changes (Column 3) Section 1886(d)(3)(E) of the Act requires that, beginning October 1, 1993, we annually update the wage data used to calculate the wage index. In accordance with this requirement, the wage index for FY 2009 is based on data submitted for hospital cost reporting periods beginning on or after October 1, 2004 and before October 1, 2005. The estimated impact of the proposed wage data on hospital payments is isolated in Column 3 by holding the other payment parameters constant in this simulation. That is, Column 3 shows the percentage changes in payments when going from a model using the FY 2008 wage index, based on FY 2004 wage data and having a 100-percent occupational mix adjustment applied, to a model using the FY 2009 pre-reclassification wage index, also having a 100-percent occupational mix adjustment applied, based on FY 2005 wage data (while holding other payment parameters such as use of the version 26.0 DRG grouper constant). The wage data collected on the FY 2005 cost report include overhead costs for contract labor that were not collected on FY 2004 and earlier cost reports. The impacts below incorporate the effects of the FY 2005 wage data collected on hospital cost reports, including additional overhead costs for contract labor compared to the wage data from FY 2004 cost reports that were used to calculate the FY 2008 wage index. Column 3 shows the impacts of updating the wage data using FY 2004 cost reports. Overall, the new wage data will lead to a −0.1 percent change for all hospitals before application of the wage and DRG recalibration budget neutrality adjustment shown in column 4. Thus, the figures in this column are approximately 0.1 below what they otherwise would be if they also illustrated a budget neutrality adjustment solely for changes to the wage index. Among the regions, the largest increase is in the urban Pacific region, which experiences a 0.9 percent increase before applying an adjustment for budget neutrality. The largest decline from updating the wage data is seen in Puerto Rico (0.7 percent decrease). In looking at the wage data itself, the national average hourly wage increased 4.2 percent compared to FY 2008. Therefore, the only manner in which to maintain or exceed 
                            ( print page 23911)
                            the previous year's wage index was to match or exceed the national 4.2 percent increase in average hourly wage. Of the 3,457 hospitals with wage data for both FYs 2008 and 2009, 1,707, or 49.4 percent, experienced an average hourly wage increase of 4.2 percent or more. The following chart compares the shifts in wage index values for hospitals for FY 2009 relative to FY 2008. Among urban hospitals, 32 will experience an increase of more than 5 percent and less than 10 percent and 5 will experience an increase of more than 10 percent. Among rural hospitals, none will experience an increase of more than 5 percent and less than 10 percent, and none will experience an increase of more than 10 percent. However, 972 rural hospitals will experience increases or decreases of less than 5 percent, while 2,420 urban hospitals will experience increases or decreases of less than 5 percent. Eighteen urban hospitals will experience decreases in their wage index values of more than 5 percent and less than 10 percent. Ten urban hospitals will experience decreases in their wage index values of greater than 10 percent. No rural hospitals will experience decreases of more than 5 percent. These figures reflect changes in the wage index which is an adjustment to either 69.7 percent or 62 percent of a hospital's standardized amount depending upon whether its wage index is greater than 1.0 or less than or equal to 1.0. Therefore, these figures are illustrating a somewhat larger change in the wage index than would occur to the hospital's total payment. The following chart shows the projected impact for urban and rural hospitals. Percentage change in area wage index values
Number of hospitalsUrban
RuralIncrease more than 10 percent
5
0Increase more than 5 percent and less than 10 percent
32
0Increase or decrease less than 5 percent
2,420
972Decrease more than 5 percent and less than 10 percent
18
0Decrease more than 10 percent
10
0
 E. Combined Effects of Proposed MS-DRG and Wage Index Changes (Column 4) Section 1886(d)(4)(C)(iii) of the Act requires that changes to MS-DRG reclassifications and the relative weights cannot increase or decrease aggregate payments. In addition, section 1886(d)(3)(E) of the Act specifies that any updates or adjustments to the wage index are to be budget neutral. As noted in the Addendum to this proposed rule, in determining the budget neutrality factor, we equated simulated aggregate payments for FY 2008 and FY 2009 using the FY 2007 Medicare utilization data after applying the changes to the DRG relative weights and the wage index. We computed a wage and MS-DRG recalibration budget neutrality factor of 0.999525 (which is applied to the national standardized amounts) and a recalibration budget neutrality factor 0.998700 (which is applied to the hospital-specific rates and the Puerto Rico-specific standardized amount). The 0.0 percent impact for all hospitals demonstrates that the proposed MS-DRG and wage changes, in combination with the budget neutrality factor, are budget neutral. In Table I, the combined overall impacts of the effects of both the MS-DRG reclassifications and the updated wage index are shown in Column 4. The estimated changes shown in this column reflect the combined effects of the changes in Columns 2 and 3 and the budget neutrality factors discussed previously. We estimate that the combined impact of the proposed changes to the relative weights and DRGs and the updated wage data with budget neutrality applied will increase payments to hospitals located in large urban areas (populations over 1 million) by approximately 0.3. These proposed changes would generally increase payments to hospitals in all urban areas (0.1 percent) and large teaching hospitals (0.2 percent). Rural hospitals will generally experience a decrease in payments (−1.1 percent). Among the rural hospital categories, rural hospitals with less than 50 beds will experience the greatest decline in payment (−2.3 percent) primarily due to the changes to MS-DRGs and the relative cost weights. F. Effects of MGCRB Reclassifications (Column 5) Our impact analysis to this point has assumed hospitals are paid on the basis of their actual geographic location (with the exception of ongoing policies that provide that certain hospitals receive payments on other bases than where they are geographically located). The proposed changes in Column 5 reflect the per case payment impact of moving from this baseline to a simulation incorporating the MGCRB decisions for FY 2009 which affect hospitals' wage index area assignments. By February 28 of each year, the MGCRB makes reclassification determinations that will be effective for the next fiscal year, which begins on October 1. The MGCRB may approve a hospital's reclassification request for the purpose of using another area's wage index value. Hospitals may appeal denials of MGCRB decisions to the CMS Administrator. Further, hospitals have 45 days from publication of the IPPS rule in the 
                            **Federal Register**
                             to decide whether to withdraw or terminate an approved geographic reclassification for the following year. This column reflects all MGCRB decisions, Administrator appeals and decisions of hospitals for FY 2009 geographic reclassifications. The overall effect of geographic reclassification is required by section 1886(d)(8)(D) of the Act to be budget neutral. Therefore, we are proposing to apply an adjustment of 0.992333 to ensure that the effects of the section 1886(d)(10) reclassifications are budget neutral. (See section II.A. of the Addendum to this proposed rule.) Geographic reclassification generally benefits hospitals in rural areas. We estimate that geographic reclassification will increase payments to rural hospitals by an average of 2.1 percent. G. Effects of the Proposed Rural Floor and Imputed Rural Floor, Including the Proposed Application of Budget Neutrality at the State Level (Column 6) As discussed in section III.B. of the preamble of this FY 2009 proposed rule, section 4410 of Pub. L. 105-33 established the rural floor by requiring that the wage index for a hospital in any urban area cannot be less than the area wage index determined for the state's rural area. In FY 2008, we changed how we applied budget neutrality to the rural floor. Rather than applying a budget neutrality adjustment to the standardized amount, a uniform budget neutrality adjustment is applied to the wage index. For FY 2009, we are proposing to apply the rural floor budget neutrality adjustment at the State level, which would redistribute payments within the State rather than across all other providers within the Nation. Furthermore, the FY 2005 IPPS final rule (69 FR 49109) established a temporary imputed rural floor for all urban States from FY 2005 to FY 2007. The rural floor requires that an urban wage index cannot be lower than the wage index for any rural hospital in that State. Therefore, an imputed rural floor was established for States that do not have rural areas or rural IPPS hospitals. In the FY 2008 IPPS final rule with comment period (72 FR 47321), we finalized our rule to extend the imputed rural floor for 1 additional year. In this proposed rule, we are proposing to extend the imputed rural floor for an additional 3 years through FY 2011. Furthermore, consistent with our proposal to apply the rural floor budget neutrality adjustment at the State level, we are proposing to apply the imputed rural floor budget neutrality adjustment to the wage index at the State level. Column 6 shows the projected impact of the rural floor and the imputed rural floor, including the proposed application of the budget neutrality adjustment at the State level. The column compares the post-reclassification FY 2009 wage index of providers before the rural floor adjustment and the post-reclassification FY 2009 wage index of providers with the rural floor and 
                            ( print page 23912)
                            imputed rural floor adjustment. Only urban hospitals can benefit from the rural floor provision. Because the provision is budget neutral, in prior years, all other hospitals (that is, all rural hospitals and those urban hospitals to which the adjustment is not made) had experienced a decrease in payments due to the budget neutrality adjustment applied nationally. However, under this proposal, States that have no hospitals receiving a rural floor wage index would no longer have a negative budget neutrality adjustment applied to their wage indices. Conversely, all hospitals in States with hospitals receiving a rural floor would have their wage indices downwardly adjusted to achieve budget neutrality within the State. We project that, in aggregate, rural hospitals will experience a 0.1 percent decrease in payments. We project hospitals located in other urban areas (populations of 1 million or fewer) will experience a 0.1 percent increase in payments because the rural floor adjustment applies to urban hospitals. Rural New England hospitals can expect the greatest decrease in payment by 0.9 percent because hospitals in Vermont will receive a rural floor budget neutrality adjustment of 0.901 or a reduction of approximately 10 percent, and hospitals in Connecticut will receive a rural floor budget neutrality adjustment of 0.9639 or a reduction of approximately 4 percent. New Jersey, which is the only State that benefits from the imputed rural floor, is expected to receive a rural floor budget neutrality adjustment of 0.987838 or a reduction of approximately 1.2 percent. The table that appears in section III B.2.b. of the preamble of this proposed rule shows how payments would change, at the State level, if we moved from our current policy of applying rural floor budget neutrality at the national level to our proposed policy to apply the rural floor budget neutrality within the State. The table shows that, under our current policy of applying budget neutrality at the national level, States that do not have any hospitals receiving the rural floor wage index would expect a decrease in payments because, in order to maintain budget neutrality nationally, these hospitals have to pay for the hospitals in other States that do receive a rural floor. For example, States such as Arizona, New York, and Rhode Island, which do not have hospitals receiving a rural floor, would expect to lose 0.2 percent in payments under a national rural floor budget neutrality adjustment. However, under our proposed policy to apply rural floor budget neutrality within each State, States that do not have hospitals receiving a floor would see an increase in payments (compared with our current policy of applying budget neutrality at the national level) because they would no longer have their wage indexes adjusted to maintain budget neutrality. However, all hospitals in States with hospitals receiving a rural floor would expect a decrease in their payments in order to achieve budget neutrality within their States (that is, the wage indices for hospitals in that State would be decreased in order to make the additional payments to hospitals in that State receiving the rural floor). Therefore, compared with our current policy of applying budget neutrality at the national level, States such as Arizona, New York, and Rhode Island could expect payment increases of 0.3 percent under a rural floor budget neutrality applied at the State level, while States such as California and Connecticut, which have several hospitals that benefit from the rural floor, could expect decreases in payments by 0.8 percent and 2.2 percent, respectively. H. Effects of the Proposed Wage Index Adjustment for Out-Migration (Column 7) Section 1886(d)(13) of the Act, as added by section 505 of Pub. L. 108-173, provides for an increase in the wage index for hospitals located in certain counties that have a relatively high percentage of hospital employees who reside in the county, but work in a different area with a higher wage index. Hospitals located in counties that qualify for the payment adjustment are to receive an increase in the wage index that is equal to a weighted average of the difference between the wage index of the resident county, post-reclassification and the higher wage index work area(s), weighted by the overall percentage of workers who are employed in an area with a higher wage index. With the out-migration adjustment, rural providers will experience a 0.1 percent increase in payments in FY 2009 relative to no adjustment at all. We included these additional payments to providers in the impact table shown above, and we estimate the impact of these providers receiving the out-migration increase to be approximately $20 million. I. Effects of All Proposed Changes With CMI Adjustment Prior to Estimated Growth (Column 8) Column 8 compares our estimate of payments per case between FY 2008 and FY 2009 with all changes reflected in this proposed rule for FY 2009, including a −0.9 percent documentation and coding adjustment to the FY 2009 national standardized amounts to account for anticipated improvements in documentation and coding that are expected to increase case-mix. We generally apply an adjustment to the DRGs to ensure budget neutrality assuming constant utilization. However, in the FY 2008 IPPS final rule with comment period, we indicated that we believe that the adoption of MS-DRGs would lead to increases in case-mix as a result of improved documentation and coding. In the FY 2008 IPPS final rule with comment period, we had finalized a policy to apply a documentation and coding adjustment to the standardized amount of −1.2 percent for FY 2008, −1.8 percent for FY 2009, and −1.8 percent for FY 2010 to offset the expected increase in case-mix and achieve budget neutrality. However, in compliance with section 7 of Pub. L. 110-90, we reduced the documentation and coding adjustment to −0.6 percent for FY 2008. In accordance with section 7 of Pub. L. 110-90, for FY 2009, we are applying a documentation and coding adjustment of −0.9 percent to the FY 2009 national standardized amounts (in addition to the −0.6 percent adjustment made for FY 2008). We are not proposing to apply the documentation and coding adjustment to the FY 2009 hospital-specific rates and the FY 2009 Puerto Rico-specific standardized amount. However, we continue to believe that case-mix growth of an additional 1.8 percent compared to FY 2008 is likely to occur across all hospitals as a result of improvements in documentation and coding. Column 8 illustrates the total payment change for FY 2009 compared to FY 2008, taking into account the −0.9 percent FY 2009 documentation and coding adjustment but not the projected 1.8 percent case-mix increase itself. Therefore, this column illustrates a total payment change that is less than what is anticipated to occur. J. Effects of All Proposed Changes With CMI Adjustment and Estimated Growth (Column 9) Column 9 compares our estimate of payments per case between FY 2008 and FY 2009, incorporating all changes reflected in this proposed rule for FY 2009 (including statutory changes). This column includes the FY 2009 documentation and coding adjustment of −0.9 percent and the projected 1.8 percent increase in case-mix from improved documentation and coding (with the 1.8 percent case-mix increase assumed to occur equally across all hospitals). Column 9 reflects the impact of all FY 2009 changes relative to FY 2008, including those shown in Columns 2 through 7. The average increase for all hospitals is approximately 4.1 percent. This increase includes the effects of the 3.0 percent market basket update. It also reflects the 0.3 percentage point difference between the projected outlier payments in FY 2008 (5.1 percent of total DRG payments) and the current estimate of the percentage of actual outlier payments in FY 2008 (4.8 percent), as described in the introduction to this Appendix and the Addendum to this proposed rule. As a result, payments are projected to be 0.3 percentage points lower in FY 2008 than originally estimated, resulting in a 0.3 percentage point greater increase for FY 2009 than would otherwise occur. In addition, the impact of expiration of section 508 of Pub. L. 108-173 reclassification accounts for a 0.1 percent decrease in estimated payments. There might also be interactive effects among the various factors comprising the payment system that we are not able to isolate. For these reasons, the values in Column 9 may not equal the product of the percentage changes described above. The overall change in payments per case for hospitals in FY 2009 is proposed to increase by 4.1 percent. Hospitals in urban areas will experience an estimated 4.2 percent increase in payments per case compared to FY 2008. Hospitals in large urban areas will experience an estimated 4.4 percent increase and hospitals in other urban areas will experience an estimated 3.9 percent increase in payments per case in FY 2008. Hospital payments per case in rural areas are estimated to increase 3.3 percent. The increases that are larger than the national average for larger urban areas and smaller than the national average for other urban and rural areas are largely attributed to the differential impact of adopting MS-DRGs. 
                            ( print page 23913) Among urban census divisions, the largest estimated payment increases will be 5.2 percent in the Pacific region (generally attributed to MS-DRGs and wage data) and 5.0 percent in the Mountain region (mostly due to MS-DRGs). The smallest urban increase is estimated at 3.0 percent in the Middle Atlantic and New England regions. Among the rural regions in Column 9, the providers in the New England region experience the smallest increase in payments (2.3 percent) primarily due to the State-specific rural floor budget neutrality adjustment. The South Atlantic and Pacific regions will have the highest increases among rural regions, with 3.7 percent and 3.6 percent estimated increases, respectively. Again, increases in rural areas are generally less than the national average due to the adoption of MS-DRGs. Among special categories of rural hospitals in Column 9, the SCH and RRC providers will receive an estimated increase in payments of 4.1 percent, and the MDH and RRCs will experience an estimated increase in payments by 2.8 percent. Urban hospitals reclassified for FY 2009 are anticipated to receive an increase of 3.9 percent, while urban hospitals that are not reclassified for FY 2009 are expected to receive an increase of 4.3 percent. Rural hospitals reclassifying for FY 2009 are anticipated to receive a 3.7 percent payment increase and rural hospitals that are not reclassifying are estimated to receive a payment increase of 2.8 percent. K. Effects of Policy on Payment Adjustments for Low-Volume Hospitals For FY 2009, we are continuing to apply the volume adjustment criteria we specified in the FY 2005 IPPS final rule (69 FR 49099). We expect that three providers will receive the low-volume adjustment for FY 2009. We estimate the impact of these providers receiving the additional 25-percent payment increase to be approximately $2,300. L. Impact Analysis of Table II Table II presents the projected impact of the proposed changes for FY 2009 for urban and rural hospitals and for the different categories of hospitals shown in Table I. It compares the estimated payments per case for FY 2008 with the proposed average estimated payments per case for FY 2009, as calculated under our models. Thus, this table presents, in terms of the average dollar amounts paid per discharge, the combined effects of the proposed changes presented in Table I. The proposed percentage changes shown in the last column of Table II equal the proposed percentage changes in average payments from Column 9 of Table I. Table II.—Impact Analysis of Proposed Changes for FY 2009 Operating Prospective Payment System
[Payments per case]
Number of hospitals
Average FY 2008 payment per case 1
Average proposed FY 2009 payment per case 1
All proposed FY 2009 changes(1)
(2)
(3)
(4)All hospitals
3,528
$9,144
$9,519
4.1By Geographic Location:Urban hospitals
2,542
9,571
9,972
4.2Large urban areas (populations over 1 million)
1,402
10,045
10,484
4.4Other urban areas (populations of 1 million or fewer)
1,140
9,000
9,355
3.9Rural hospitals
986
6,683
6,905
3.3Bed Size (Urban):0-99 beds
643
7,283
7,533
3.4100-199 beds
829
8,103
8,428
4200-299 beds
483
8,985
9,363
4.2300-499 beds
411
10,046
10,482
4.3500 or more beds
176
11,875
12,382
4.3Bed Size (Rural):0-49 beds
338
5,509
5,644
2.550-99 beds
373
6,097
6,279
3100-149 beds
166
6,660
6,884
3.4150-199 beds
67
7,467
7,752
3.8200 or more beds
42
8,361
8,686
3.9Urban by Region:New England
121
9,935
10,230
3Middle Atlantic
348
10,440
10,752
3South Atlantic
385
9,025
9,427
4.5East North Central
394
9,065
9,440
4.1East South Central
163
8,681
9,044
4.2West North Central
157
9,140
9,555
4.5West South Central
371
9,043
9,466
4.7Mountain
157
9,571
10,051
5Pacific
393
11,614
12,219
5.2Puerto Rico
53
4,706
4,857
3.2Rural by Region:New England
23
9,051
9,263
2.3Middle Atlantic
70
6,912
7,124
3.1South Atlantic
172
6,529
6,773
3.7East North Central
121
6,872
7,093
3.2East South Central
176
6,263
6,474
3.4West North Central
113
6,886
7,119
3.4West South Central
200
6,088
6,276
3.1Mountain
75
6,802
7,010
3.1Pacific
36
8,162
8,455
3.6By Payment Classification:Urban hospitals
2,584
9,549
9,948
4.2Large urban areas (populations over 1 million)
1,424
10,026
10,464
4.4Other urban areas (populations of 1 million or fewer)
1,160
8,975
9,328
3.9( print page 23914)Rural areas
944
6,716
6,941
3.3Teaching Status:Non-teaching
2,485
7,716
8,023
4Fewer than 100 Residents
805
9,193
9,577
4.2100 or more Residents
238
13,392
13,951
4.2Urban DSH:Non-DSH
838
8,118
8,409
3.6100 or more beds
1,534
10,062
10,498
4.3Less than 100 beds
354
6,792
7,022
3.4Rural DSH:SCH
389
6,093
6,293
3.3RRC
206
7,465
7,740
3.7100 or more beds
39
6,110
6,299
3.1Less than 100 beds
168
5,451
5,580
2.4Urban teaching and DSH:Both teaching and DSH
811
10,986
11,457
4.3Teaching and no DSH
172
8,885
9,201
3.6No teaching and DSH
1,077
8,283
8,644
4.4No teaching and no DSH
524
7,796
8,083
3.7Rural Hospital Types:RRC
197
7,783
8,100
4.1SCH
355
6,564
6,764
3MDH
156
5,757
5,975
3.8SCH and RRC
102
7,901
8,223
4.1MDH and RRC
12
7,303
7,510
2.8Type of Ownership:Voluntary
2,027
9,252
9,625
4Proprietary
827
8,424
8,772
4.1Government
587
9,440
9,853
4.4Medicare Utilization as a Percent of Inpatient Days:0-25
255
13,112
13,751
4.925-50
1,350
10,344
10,801
4.450-65
1,431
7,950
8,245
3.7Over 65
392
7,033
7,245
3Hospitals Reclassified by the Medicare Geographic Classification Review Board:FY 2009 Reclassifications:All Reclassified Hospitals FY 2009
805
8,803
9,141
3.8All Non-Reclassified Hospitals FY 2009
2,723
9,264
9,651
4.2Urban Reclassified Hospitals FY 2009:
445
9,547
9,921
3.9Urban Non-reclassified Hospitals FY 2009:
2,075
9,586
9,994
4.3Rural Reclassified Hospitals FY 2009:
360
7,240
7,505
3.7Rural Nonreclassified Hospitals FY 2009:
565
5,870
6,033
2.8All Section 401 Reclassified Hospitals:
29
7,555
7,816
3.5Other Reclassified Hospitals (Section 1886(d)(8)(B))
61
6,534
6,716
2.8Specialty Hospitals:Cardiac Specialty Hospitals
20
10,894
11,085
1.81
                             These payment amounts per case do not reflect any estimates of annual case-mix increase.
 VII. Effects of Other Proposed Policy Changes In addition to those policy changes discussed above that we are able to model using our IPPS payment simulation model, we are proposing to make various other changes in this proposed rule. Generally, we have limited or no specific data available with which to estimate the impacts of these proposed changes. Our estimates of the likely impacts associated with these other proposed changes are discussed below. A. Effects of Proposed Policy on HACs, Including Infections In section II.F. of the preamble of this proposed rule, we discuss our implementation of section 5001(c) of Pub. L. 109-171, which requires the Secretary to identify conditions that (1) are high cost, high volume, or both, (2) result in the assignment of a case to a MS-DRG that has a higher payment when present as a secondary diagnosis, and (3) could reasonably have been prevented through application of evidence-based guidelines. For discharges occurring on or after October 1, 2008, hospitals will not receive additional payment for cases in which one of the selected conditions was not present on admission. That is, the case will be paid as though the secondary diagnosis was not present. However, the statute also requires the Secretary to continue counting the condition as a secondary diagnosis that results in a higher IPPS payment when doing the budget neutrality calculations for MS-DRG reclassifications and recalibration. Therefore, we do our budget neutrality calculations as though the payment provision 
                            ( print page 23915)
                            did not apply but Medicare will make a lower payment to the hospital for the specific case that includes the secondary diagnosis. Thus, the provision will result in cost savings to the Medicare program. We note that the provision will only apply when one or more of the selected conditions are the only secondary diagnosis or diagnoses present on the claim that will lead to higher payment. Therefore, if at least one nonselected secondary diagnosis that leads to the same higher payment is on the claim, the case will continue to be assigned to the higher paying DRG and there will be no savings to Medicare from the case. Medicare beneficiaries will generally have multiple secondary diagnoses during a hospital stay, such that beneficiaries having one MCC or CC will frequently have additional conditions that also will generate higher payment. Therefore, in only a small percentage of the cases will the beneficiary have only one secondary diagnosis that would lead to higher payment. The section 5001(c) payment provision will go into effect on October 1, 2008. Our savings estimate for the next 5 fiscal years from this provision has changed from our savings estimate published in the FY 2008 IPPS final rule with comment period because of the potential addition to the list of selected HACs for FY 2009 of the nine conditions considered in section II.F. of this proposed rule. We had estimated a savings of $20 million per year from this provision for the eight conditions we originally selected in the FY 2008 IPPS final rule with comment period (72 FR 48168). We now estimate that this provision will save $50 million per year for the first 3 years beginning October 1, 2008. Beginning in FY 2012, we estimate a savings of $60 million per year as a result of this provision. Our savings estimates for the next 5 fiscal years are shown below: Year
Savings 
                                 (in  
                                 millions)FY 2009
$50FY 2010
50FY 2011
50FY 2012
60FY 2013
60
 B. Effects of Proposed MS-LTC-DRG Reclassifications and Relative Weights for LTCHs In section II.I. of the preamble to this proposed rule, we discuss the proposed MS-LTC-DRGs (proposed Version 26.0 of the GROUPER) and development of the proposed relative weights for use under the LTCH PPS for FY 2009. We also discuss that when we adopted the new severity adjusted MS-LTC-DRG patient classification system under the LTCH PPS in the FY 2008 IPPS final rule with comment, we implemented a 2-year transition, in which the MS-LTC-DRG relative weights for FY 2009 would be based completely on the MS-LTC-DRG patient classification system (and no longer based in part on the former LTC-DRG patient classification system). Consistent with the requirement at § 412.517 established in the RY 2008 LTCH PPS final rule (72 FR 26880 through 26884), the proposed annual update to the classification and relative weights under the LTCH PPS for RY 2009 was done in a budget neutral manner, such that estimated aggregate LTCH PPS payments would be unaffected; that is, they would be neither greater than nor less than the estimated aggregate LTCH PPS payments that would have been made without the MS-LTC-DRG classification and relative weight changes. To achieve budget neutrality under § 412.517, in determining the proposed FY 2009 MS-LTC-DRG relative weights, we applied a factor of 1.038266 in the first step of the budget neutrality process (normalization), and we applied a budget neutrality factor of 0.9965 after normalization (see section II.I.4. (step 7) of the preamble of this proposed rule). These proposed factors that were applied to maintain budget neutrality were based on the most recent available LTCH claims data (FY 2007 MedPAR files) for the 387 LTCHs in our database. Consistent with the budget neutrality requirement under § 412.517, we estimate that with the proposed changes to the MS-LTC-DRG classifications and relative weights for FY 2009, there would be no change in aggregate LTCH PPS payments. In applying the budget neutrality adjustment described above, we assumed constant utilization. C. Effects of Proposed Policy Change Relating to New Medical Service and Technology Add-On Payments In section II.J. of the preamble to this proposed rule, we discuss proposed add-on payments for new medical services and technologies. As explained in that section, add-on payments for new technology under section 1886(d)(5)(K) of the Act are not required to be budget neutral. As discussed in section II.J.4. of this proposed rule, we have yet to determine whether any of the four applications we received will meet the criteria for new technology add-on payments for FY 2009. Consequently, it is premature to estimate the potential payment impact in FY 2009 of any potential new technology add-on payments for FY 2009. There are no technologies receiving new technology add-on payment in FY 2008. Therefore, at this time, we estimate that Medicare's new technology add-on payments would remain unchanged in FY 2009 compared to FY 2008. If any of the four applicants are found to be eligible for new technology add-on payments for FY 2009 in the final rule, we would discuss the estimated payment impact for FY 2009 in that final rule. D. Effects of Proposed Policy Regarding Postacute Care Transfers to Home Health Services In section IV.A. of the preamble to this proposed rule, we noted that, under current regulations, the postacute care transfer policy applies to acute care discharges for which home health care (for a related condition) begins within 3 days of the discharge from an acute care hospital where the patient was discharged from the hospital prior to the geometric mean length of stay for a “qualified” MS-DRG. In that section, we discussed the reasons why we believe that the 3-day timeframe is no longer an appropriate threshold under the postacute care transfer policy. We discussed our rationale for extending the timeframe from within 3 days to within 7 days. Accordingly, we proposed to revise the timeframe in our regulations to within 7 days of discharge to home under a written plan for the provision of home health services, effective with discharges occurring on or after October 1, 2008. To estimate the impact of this proposal, we used acute care hospital claims from the FY 2005 MedPAR file and searched for claims with a discharge destination code of “01” (Discharged to Home or Self-Care (Routine Discharge)) or “06” (Discharged/Transferred to Home under Care of Organized Home Health Service Organization in Anticipation of Covered Skilled Care). We then matched the acute care hospital MedPAR claims with HHA final action claims for 2005, using beneficiary identification numbers. We then compared the hospital discharge date with the home health admission date and determined a distribution by the difference in these two dates. We found that, for those patients for whom home health services began within 60 days of hospital discharge, in 6.7 percent of the cases, the services began on days 4 through day 7 after the acute care hospital discharge. We estimate that applying the proposed change to the hospital postacute care transfer policy would reduce Medicare payments to acute care inpatient hospitals by approximately $330 million over 5 years. For FY 2009, we estimate that Medicare payments would be reduced by approximately $50 million. E. Effects of Proposed Requirements for Hospital Reporting of Quality Data for Annual Hospital Payment Update In section IV.B. of the preamble of this proposed rule, we discuss the requirements for hospitals to report quality data in order for hospitals to receive the full annual hospital payment update for FY 2009 and FY 2010. There are an estimated 186 hospitals in this analysis that may not receive the full market basket update for FY 2009. Most of these hospitals are either small rural or small urban hospitals. However, at this time, information is not available to determine the hospitals that do not meet the requirements for the full hospital market increase for FY 2009. We also note that, for the FY 2009 payment update, hospitals must pass our validation requirement of a minimum of 80 percent reliability, based upon our chart-audit validation process, for the four quarters of data from FY 2007. These data were due to the QIO Clinical Warehouse by May 15, 2007 (fourth quarter CY 2006 discharges), August 15, 2007 (first quarter CY 2007 discharges), November 15, 2007 (second quarter CY 2007 discharges), and February 15, 2008 (third quarter CY 2007 discharges). We have continued our efforts to ensure that QIOs provide assistance to all hospitals that wish to submit data. In the preamble of this proposed rule, we are proposing to provide additional validation criteria to ensure that the quality data being sent to CMS are accurate. The requirement of 5 charts per 
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                            hospital will result in approximately 21,500 charts per quarter total submitted to the agency. We reimburse hospitals for the cost of sending charts to the Clinical Data Abstraction Center (CDAC) at the rate of 12 cents per page for copying and approximately $4.00 per chart for postage. Our experience shows that the average chart received at the CDAC is approximately 150 pages. Thus, the agency will have expenditures of approximately $597,600 per quarter to collect the charts. Given that we reimburse for the data collection effort, we believe that a requirement for five charts per hospital per quarter represents a minimal burden to the participating hospital. F. Effects of Proposed Policy Change to Methodology for Computing Core Staffing Factors for Volume Decrease Adjustment for SCHs and MDHs In section IV.D. of the preamble of this proposed rule, we discuss a change to the methodology we would use to compute the average nursing staff factors (nursing hours per patient days) for the volume decrease adjustment for SCHs and MDHs. If certain requirements are met, this adjustment may be made if the hospital's total discharges decrease by more than 5 percent from one cost reporting period to the next. We do not believe this proposed change would have any significant impact on Medicare payments to these hospitals. G. Effects of Proposed Clarification of Policy for Collection of Risk Adjustment Data From MA Organizations In section IV.H. of the preamble of this proposed rule, we discuss our proposed revision of our regulations to clarify that CMS has the authority to require MA organizations to submit encounter data for each item and service provided to an MA plan enrollee. The proposed revision also would clarify that CMS will determine the formats for submitting encounter data, which may be more abbreviated than those used for the Medicare fee-for-service claims data submission process. At this time, we have not yet determined an approach for submission of the encounter data. Therefore, we are not in a position to determine the extent to which the cost impact of submitting encounter data would differ from the current costs to MA organizations of submitting risk adjustment data. H. Effects of Proposed Policy Changes Relating to Hospital Emergency Services Under EMTALA In section IV.I. of the preamble of this proposed rule, we are proposing to clarify our policy regarding the applicability of EMTALA to hospital inpatients. We are proposing to amend the regulations to state that when an individual covered by EMTALA was admitted as an inpatient and remains unstabilized with an emergency medical condition, a receiving hospital with specialized capabilities has an EMTALA obligation to accept that individual, assuming that the transfer of the individual is an appropriate transfer and the participating hospital with specialized capabilities has the capacity to treat the individual. In addition, we are proposing two changes relating to the requirements for on-call physicians in hospital emergency departments. We are proposing to delete the provision relating to maintaining a list of on-call physicians from the regulations referring to EMTALA at § 489.24(j)(1) because a provision addressing the on-call physician list is already included in the regulations relating to provider agreements at § 489.20(r)(2). We are proposing to incorporate the language of § 489.24(j)(1) as replacement language for the existing § 489.20(r)(2) and amend the regulatory language to make it more consistent with the statutory language found at section 1866(a)(1)(I)(iii) of the Act, which refers to hospital CoPs and the requirement to maintain an on-call list. These proposed changes would make the regulations consistent with the statutory basis for maintaining an on-call list. In addition, we are proposing to amend our regulations to provide that hospitals may comply with the on-call list requirement by participating in a formal community call plan so long as the plan includes a number of elements that are specified in the preamble to the proposed rule. Lastly, we are proposing to make a technical change to the regulations to conform them to the statutory language found in the Pandemic and All-Hazards Preparedness Act. These proposals do not include any substantive new requirements. Although hospitals choosing to participate in a community call arrangement will be required to devise a formal community call plan, such a plan would increase a hospital's flexibility in meeting its on-call requirements. We are estimating no impact on Medicare expenditures and no significant impact on hospitals with emergency departments. I. Effects of Implementation of Rural Community Hospital Demonstration Program In section IV.K. of the preamble to this proposed rule, we discuss our implementation of section 410A of Pub. L. 108-173 that required the Secretary to establish a demonstration that will modify reimbursement for inpatient services for up to 15 small rural hospitals. Section 410A(c)(2) requires that “in conducting the demonstration program under this section, the Secretary shall ensure that the aggregate payments made by the Secretary do not exceed the amount which the Secretary would have paid if the demonstration program under this section was not implemented.” There are currently nine hospitals participating in the demonstration. We are currently conducting a solicitation for up to six additional hospitals to participate in the demonstration program. As discussed in section IV.K. of the preamble to this proposed rule, we are satisfying this requirement by adjusting national IPPS rates by a factor that is sufficient to account for the added costs of this demonstration. We estimate that the average additional annual payment for FY 2009 that would be made to each participating hospital under the demonstration would be approximately $2,134,123. We based this estimate on the recent historical experience of the difference between inpatient cost and payment for hospitals that are participating in the demonstration. As an estimate for the 15 hospitals that may participate, the total annual impact of the demonstration program for FY 2009 is projected to be $32,011,849. (In the final rule, we should know the exact number of hospitals participating in the demonstration program and would revise our estimates accordingly.) The adjustment factor to the Federal rate used in calculating Medicare inpatient prospective payments as a result of the demonstration is 0.999903. J. Effects of Proposed Policy Changes Relating to Payments to Hospitals-Within-Hospitals In section VI.F. of the preamble of this proposed rule, we discuss our proposed policy change to allow a HwH that cannot meet the criteria in regulations for a separate governing body solely because it is a State hospital occupying space with another State hospital or located on the same campus as another State hospital and both hospitals are under the same governing authority, or the governing authority of a third entity that controls both State hospitals, to nevertheless qualify for an exclusion from the IPPS if the hospital meets other applicable criteria for HwHs in the regulations and the specified proposed criteria in this proposed rule. We are only aware of one hospital that would be allowed qualify for exclusion from the IPPS under the proposed criteria and to expand its bed size under the proposed provisions. Because any expansion would occur at some point in the future, we are unable to quantify the impact of this proposed change. K. Effects of Proposed Policy Changes Relating to Requirements for Disclosure of Physician Ownership in Hospitals In section VII. of the preamble of this proposed rule, we discuss our proposals concerning (1) the definition of a physician-owned hospital; (2) the requirement that physician-owned hospitals disclose the ownership to patients; and (3) the requirement that all hospitals and CAHs must furnish written notice to their patients at the beginning of their hospital stay or outpatient visit if a physician is not present in the hospital 24 hours per day, 7 days per week, and that the notice must indicate how the hospital will meet the medical needs of any patient who develops an emergency medical condition at a time when there is no physician present in the hospital. The definition and the above requirements were implemented in the FY 2008 IPPS final rule with comment period (72 FR 47387 and 47391). In this proposed rule, we are proposing to revise the definition of a physician-owned hospital at § 489.3 to include hospitals that have an ownership or investment interests by a physician and/or by an immediate family member of a physician. (The existing definition refers to an ownership or investment interest by a physician only, and not to an ownership or investment interest by an immediate family member.) We are also proposing to except from the definition of physician-owned hospital those hospitals that do not have at least one physician owner/investor or immediate family member 
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                            owner/investor who refers patients to the hospital. We believe that the proposed changes to the definition of physician-owned hospital would result in no more than a de minimis increase in the number of hospitals that are subject to the disclosure requirements applicable to physician-owned hospitals. We believe that there would be very few hospitals that would now meet the definition of physician-owned hospital, if we adopt our proposal to include immediate family members within the group of owners or investors that cause a hospital to be considered physician-owned, that did not already meet the definition. That is, we believe there are very few hospitals for which an immediate family member of a physician, but not the physician himself or herself, or any other physician, has an ownership or investment interest. Moreover, to the extent that such hospitals exist, that is, hospitals that have no physician owner/investors but which have owners/investors who are immediate family members of one or more physicians, such hospitals would not be subject to the disclosure requirement if we adopt our proposed exception to the definition of a physician-owned hospital for those hospitals that do not have at least one referring physician whose immediate family member is an owner/investor. Also, if we adopt this proposed exception to the definition of physician-owned hospital, the number of hospitals that now are subject to the disclosure requirement may be reduced slightly as we understand that there are some hospitals that have no referring physician owner/investors but rather have physician owner/investors who have retired from the practice of medicine. Thus, if both our proposed changes to the definition of physician-owned hospital are adopted, the net result may be no change, or a minimal increase or decrease in the number of hospitals that are subject to the disclosure requirement. Finally, if our proposal to change the definition of physician-owned hospital is adopted to encompass immediate family members, some hospitals that already meet the definition based on the presence of physician owner/investors may have to amend their list of physician owner/investors to add immediate family members, which we believe would be a minimal burden. We are proposing to clarify that the list of the hospital's owners or investors who are physicians or immediate family members of physicians must be provided to the patient at the time the request for the list is made by or on behalf of the patient. We note that hospitals are already currently required to furnish the list of physician owners or investors and, thus, we believe that the impact of stipulating a timeframe for furnishing the list is negligible. We are proposing to require all hospitals to require that all physician owners who also are members of the hospital's medical staff to agree, as a condition of continued medical staff membership or admitting privileges, to disclose, in writing, to all patients they refer to the hospital any ownership or investment interest that is held by themselves or by an immediate family member (as defined in § 411.351). Disclosure would be required at the time the referral is made. Both hospitals and physicians would participate in the disclosure process. We believe this proposal would have a small effect on physician-owned hospitals to the extent that it may require them to change their bylaws or make similar changes. We do not anticipate that our proposals in section VII. of the preamble of this proposed rule would have a significant economic impact on a substantial number of physicians, other health care providers and suppliers, or the Medicare or Medicaid programs and their beneficiaries. Specifically, we believe that this proposed rule would affect mostly hospitals, physicians, and beneficiaries. The proposed changes concerning both the definition of a physician-owned hospital and the disclosure of physician ownership in hospitals are consistent with the physician self-referral statute and regulations as well as the current practices of most hospitals. Thus, our proposed requirement that the list of physician owners be provided to the patient at the time the request for the list is made by or on behalf of the patient would present a negligible economic impact on the hospital. Similarly, the cost borne by individual physicians to implement these provisions would be limited to a one-time cost associated with developing a disclosure notice that would be shared with patients at the time the referral is made in addition to the negligible time associated with providing the list to the patient and maintaining a copy of the notice in the patient's medical record. We are also proposing to provide authority for CMS to terminate the Medicare provider agreement of any hospital that fails to furnish the required written notice that a physician is not available 24 hours per day, 7 days per week and to describe how the hospital will meet the medical needs of any patient who develops an emergency medical condition at a time when there is no physician present in the hospital. We believe that the cost borne by hospitals to implement this proposal would be limited to a one-time cost associated with completing minor revisions to the hospital's policies and procedures to comply with the requirements of its Medicare provider agreement. Most hospitals have standard procedures to satisfy CMS by correcting deficiencies (such as the failure to furnish notice of physician ownership in the hospital to patients) before action is taken by CMS to terminate the Medicare provider agreement. Overall, we believe that beneficiaries would be positively impacted by these provisions. Specifically, disclosure of physician ownership or investment interests equips patients to make informed decisions about where they elect to receive care. Our proposals make no significant changes that have the potential to impede patient access to health care facilities and services. In fact, we believe that our proposals would help minimize anti-competitive behavior that can affect the decision as to where a beneficiary receives health care services and possibly the quality of the services furnished. L. Effects of Proposed Changes Relating to Physician Self-Referral Provisions In section VIII. of the preamble of this proposed rule, we discuss our proposals pertaining to physician self-referral provisions, including: stand in the shoes, period of disallowance, and reporting of financial relationships between hospitals and physicians. We do not anticipate that our proposals would have a significant impact on physicians, other health care providers and suppliers, or the Medicare or Medicaid programs and their beneficiaries. With respect to the proposals to modify the physician “stand in the shoes” provisions, we do not anticipate that entities that include one or more physician organizations would find it necessary to restructure their organizational relationships. We believe that if either of our alternative approaches is adopted, compliance with the “stand in the shoes” provisions would be made easier by simplifying the required analysis of arrangements in which a physician organization is interposed between the referring physician and the entity furnishing DHS. In addition to our proposals concerning the physician “stand in the shoes” provisions, we are making an entity “stand in the shoes” proposal, whereby an entity that furnishes DHS would be deemed to stand in the shoes of an organization in which it has a 100-percent ownership interest and would be deemed to have the same compensation arrangements with the same parties and on the same terms as does the organization that it owns. We believe that the entity stand in the shoes proposal may result in more financial relationships between entities and physicians being subject to the physician self-referral provisions, but we are unable to quantify at this time the possible increase or determine the effect of the proposal on the referral patterns or organization structures of DHS entities and their wholly-owned organizations. Rather, we welcome public comments on these issues. Our proposal pertaining to the period of disallowance is a codification of what we believe is existing law and reflects what we believe most entities furnishing DHS are already following. Therefore, we do not anticipate a significant economic impact on the industry. *M. Effects of Proposed Changes Relating to Reporting of Financial Relationships Between Hospitals and Physicians* As discussed in section IX. of the preamble to this proposed rule, we are proposing to require that 500 hospitals furnish information concerning their financial relationships with their physicians. The financial relationships include ownership and investment interests and compensation arrangements. We are proposing that this information be submitted in a collection of information instrument that CMS has developed—the “DFRR,” which is included in Appendix C to this proposed rule. We are unable to quantify the number of physicians who have ownership and investment interests and compensation arrangements with hospitals. Even if we assume that the 500 hospitals have a substantial number of financial relationships with physicians, we believe that, in general, the economic impact on these hospitals would not be substantial. Because we are proposing that the DFRR be completed by hospitals and that the 
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                            physician information requested in the DFRR will be on file at the hospital, we believe there should be negligible, if any, impact upon physicians or other health care providers or suppliers. Specifically, we believe that the cost to complete the DFRR for each hospital would be approximately $1,550, and the total cost burden for the industry would be approximately $775,000. We expect that this proposed rule may result in savings to the Medicare program by minimizing anti-competitive business arrangements as well as financial incentives that encourage overutilization. In addition, to the extent that we determine that any arrangements are noncompliant with the physician self-referral statute and regulations, there may be monies returned to the Medicare Trust Fund. We cannot gauge with any certainty the extent of these savings to the Medicare program at this time. Finally, we do not anticipate any financial burden on beneficiaries or impact on beneficiary access to medically necessary services because the completion of the DFRR would be conducted by hospitals. VIII. Effects of Proposed Changes in the Capital IPPS A. General Considerations Fiscal year (FY) 2001 was the last year of the 10-year transition period established to phase in the PPS for hospital capital-related costs. During the transition period, hospitals were paid under one of two payment methodologies: fully prospective or hold harmless. Under the fully prospective methodology, hospitals were paid a blend of the capital Federal rate and their hospital-specific rate (see § 412.340). Under the hold-harmless methodology, unless a hospital elected payment based on 100 percent of the capital Federal rate, hospitals were paid 85 percent of reasonable costs for old capital costs (100 percent for SCHs) plus an amount for new capital costs based on a proportion of the capital Federal rate (see § 412.344). As we state in section V. of the preamble of this proposed rule, with the 10-year transition period ending with hospital cost reporting periods beginning on or after October 1, 2001 (FY 2002), beginning in FY 2002 capital prospective payment system payments for most hospitals are based solely on the capital Federal rate. Therefore, we no longer include information on obligated capital costs or projections of old capital costs and new capital costs, which were factors needed to calculate payments during the transition period, for our impact analysis. The basic methodology for determining a capital PPS payment is set forth at § 412.312. The basic methodology for calculating capital IPPS payments in FY 2009 would be as follows: (Standard Federal Rate) × (DRG weight) × (GAF) × (COLA for hospitals located in Alaska and Hawaii) × (1 + Disproportionate Share Adjustment Factor + IME Adjustment Factor, if applicable). We note that, in accordance with § 412.322(c), the IME adjustment factor for FY 2009 is equal to half of the current adjustment, as discussed in section V.B.2. of the preamble of this proposed rule. In addition, hospitals may also receive outlier payments for those cases that qualify under the threshold established for each fiscal year. The data used in developing the impact analysis presented below are taken from the December 2007 update of the FY 2007 MedPAR file and the December 2007 update of the Provider-Specific File that is used for payment purposes. Although the analyses of the proposed changes to the capital prospective payment system do not incorporate cost data, we used the December 2007 update of the most recently available hospital cost report data (FYs 2005 and 2006) to categorize hospitals. Our analysis has several qualifications. We use the best data available and make assumptions about case-mix and beneficiary enrollment as described below. In addition, as discussed in section III. of the Addendum to this proposed rule, as we established for FY 2008, we are proposing to adjust the national capital rate to account for improvements in documentation and coding under the MS-DRGs in FY 2009. (As discussed in section III.A.6. of the Addendum to this proposed rule, we are not proposing to adjust the Puerto Rico specific capital rate to account for improvements in documentation and coding under the MS-DRGs in FY 2009.) Furthermore, due to the interdependent nature of the IPPS, it is very difficult to precisely quantify the impact associated with each proposed change. In addition, we draw upon various sources for the data used to categorize hospitals in the tables. In some cases (for instance, the number of beds), there is a fair degree of variation in the data from different sources. We have attempted to construct these variables with the best available sources overall. However, for individual hospitals, some miscategorizations are possible. Using cases from the December 2007 update of the FY 2007 MedPAR file, we simulated payments under the capital PPS for FY 2008 and FY 2009 for a comparison of total payments per case. Any short-term, acute care hospitals not paid under the general IPPS (Indian Health Service hospitals and hospitals in Maryland) are excluded from the simulations. As we explain in section III.A. of the Addendum to this proposed rule, payments are no longer made under the regular exceptions provision under §§ 412.348(b) through (e). Therefore, we no longer use the actuarial capital cost model (described in Appendix B of the August 1, 2001 proposed rule (66 FR 40099)). We modeled payments for each hospital by multiplying the capital Federal rate by the GAF and the hospital's case-mix. We then added estimated payments for indirect medical education (which are reduced by 50 percent in FY 2009 in accordance with § 412.322(c), as discussed in section V.B.2. of the preamble of this proposed rule), disproportionate share, and outliers, if applicable. For purposes of this impact analysis, the model includes the following assumptions: We estimate that the Medicare case-mix index will increase by 1.0 percent in both FYs 2008 and 2009. (We note that this does not reflect the expected growth in case-mix due to improvement in documentation and coding under the MS-DRGs, as discussed below.)
                        We estimate that the Medicare discharges will be 13.2 million in FY 2008 and 13.3 million in FY 2009 for an approximately 0.4 percent increase from FY 2008 to FY 2009.
                        The capital Federal rate was updated beginning in FY 1996 by an analytical framework that considers changes in the prices associated with capital-related costs and adjustments to account for forecast error, changes in the case-mix index, allowable changes in intensity, and other factors. As discussed in section VIII. of the preamble and section III.A.2.1. of the Addendum to this proposed rule, the proposed FY-2009 update is 0.7 percent.
                        In addition to the proposed FY 2009 update factor, the proposed FY 2009 capital Federal rate was calculated based on a proposed GAF/DRG budget neutrality factor of 1.0007, a proposed outlier adjustment factor of 0.9427, and a proposed exceptions adjustment factor of 0.9998.
                        For FY 2009, as discussed in section III.A. of the Addendum to this proposed rule, the proposed FY 2009 national capital rate was further adjusted by a factor to account for anticipated improvements in documentation and coding that are expected to increase case-mix under the MS-DRGs. In the FY 2008 IPPS final rule with comment period (72 FR 47186), we established adjustments to the IPPS rates based on the Office of the Actuary projected case-mix growth resulting from improved documentation and coding of 1.2 percent for FY 2008, 1.8 percent for FY 2009, and 1.8 percent for FY 2010. However, we reduced the documentation and coding adjustment to -0.6 percent for FY 2008, and for FY 2009, we are proposing to apply an adjustment of 0.9 percent, consistent with section 7 of Pub. L. 110-90. As noted above and as discussed in section III.A.6. of the Addendum to this proposed rule, we are not proposing to adjust the Puerto Rico-specific capital rate to account for improvements in documentation and coding under the MS-DRGs in FY 2009. B. Results We used the actuarial model described above to estimate the potential impact of our proposed changes for FY 2009 on total capital payments per case, using a universe of 3,528 hospitals. As described above, the individual hospital payment parameters are taken from the best available data, including the December 2007 update of the FY 2007 MedPAR file, the December 2007 update to the PSF, and the most recent cost report data from the December 2007 update of HCRIS. In Table III, we present a comparison of total payments per case for FY 2008 compared to proposed FY 2009 based on the proposed FY 2009 payment policies. Column 2 shows estimates of payments per case under our model for FY 2008. Column 3 shows estimates of payments per case under our model for FY 2009. Column 4 shows the total percentage change in payments from FY 2008 to FY 2009. The change represented in Column 4 includes the proposed 0.7 percent update to the capital Federal rate, other changes in the adjustments to the capital Federal rate (for example, the 50 percent reduction to the teaching adjustment for FY 
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                            2009), and the additional 0.9 percent reduction to the national capital rate to account for improvements in documentation and coding (or other changes in coding that do not reflect real changes in case-mix) for implementation of the MS-DRGs. Consistent with the impact analysis for the proposed policy changes under the IPPS for operating costs in section VI. of this Appendix, for purposes of this impact analysis, we also assume a 1.8 percent increase in case-mix growth for FY 2009, as determined by the Office of the Actuary, because we believe the adoption of the MS-DRG will result in case-mix growth due to documentation and coding changes that do not reflect real changes in patient severity of illness. The comparisons are provided by: (1) Geographic location; (2) region; and (3) payment classification. The simulation results show that, on average, capital payments per case in FY 2009 can be expected to remain about the same as capital payments per case in FY 2008. The proposed capital rate for FY 2009 would decrease 1.14 percent as compared to the FY 2008 capital rate, and the proposed changes to the GAFs are expected to result in a slight decrease (0.3 percent) in capital payments. In addition, the 50 percent reduction to the teaching adjustment in FY 2009 will also result in a decrease in capital payments from FY 2008 as compared to FY 2009. Countering these factors is the projected case-mix growth as a result of improved documentation and coding (discussed above) as well as an estimated increase in outlier payments in FY 2008 as compared to FY 2009. The net result of these changes is an estimated 0.0 percent change in capital payments per discharge from FY 2008 to FY 2009 for all hospitals (as shown below in Table III). The results of our comparisons by geographic location and by region are consistent with the results we expected with the decrease to the teaching adjustment in FY 2009 (§ 412.522(c)). The geographic comparison shows that all urban hospitals are expected to experience no change in capital IPPS payments per case in FY 2009 as compared to FY 2008, while hospitals in large urban areas are expected to experience a slight decrease (0.3 percent) in capital IPPS payments per case in FY 2009 as compared to FY 2008. Capital IPPS payments per case for rural hospitals are expected to increase 0.5 percent. These differences in payments per case by geographic location are mostly due to the decrease in the teaching adjustment. Because teaching hospitals generally tend to be located in urban or large urban areas, we would expect that the 50 percent decrease in the teaching adjustment for FY 2009 would have a more significant impact on hospitals in those areas than those hospitals located in rural areas. Most regions are estimated to experience an increase in total capital payments per case from FY 2008 to FY 2009. These increases vary by region and range from a 1.9 percent increase in the Pacific urban and West South Central urban regions to a 0.1 percent increase in the East North Central urban region. Two urban regions are projected to experience a relatively larger decrease in capital payments, with the difference mostly due to proposed changes in the GAFs and the 50 percent reduction in the teaching adjustment for FY 2009: −2.7 percent in the Middle Atlantic urban region and −3.6 percent in the New England urban region. The East North Central urban region is also expected to experience a decrease of 0.1 percent in capital payments in FY 2009 as compared to FY 2008, mostly due to proposed changes in the GAFs. There are two rural regions that expected to experience a decrease in total capital payments per case: A −4.5 percent decrease in the New England rural region and a −1.0 percent decrease in the Middle Atlantic rural region. Again, for these two rural regions, the projected decrease in capital payments is mostly due to proposed changes in the GAF, as well as a smaller than average increase in changes payments due to the adoption of the MS-DRGs. By type of ownership, voluntary and government hospitals are estimated to experience a decrease of 0.2 percent and 0.8 percent, respectively. The projected decrease in capital payments per case is primarily due to the 50 percent teaching adjustment reduction for FY 2009. Proprietary hospitals are estimated to experience an increase in capital payments per case of 1.6 percent. This estimated increase in capital payments is mostly due to a smaller than average decrease in payments resulting from the 50 percent teaching adjustment reduction for FY 2009. Section 1886(d)(10) of the Act established the MGCRB. Before FY 2005, hospitals could apply to the MGCRB for reclassification for purposes of the standardized amount, wage index, or both. Section 401(c) of Pub. L. 108-173 equalized the standardized amounts under the operating IPPS. Therefore, beginning in FY 2005, there is no longer reclassification for the purposes of the standardized amounts; however, hospitals still may apply for reclassification for purposes of the wage index for FY 2009. Reclassification for wage index purposes also affects the GAFs because that factor is constructed from the hospital wage index. To present the effects of the hospitals being reclassified for FY 2009, we show the average capital payments per case for reclassified hospitals for FY 2008. Urban reclassified hospitals are expected to have the largest decrease in capital payments of 0.4 percent, while rural reclassified hospitals are expected to have the largest increase in capital payments of 1.0 percent. Urban nonreclassified hospitals are not expected to experience any change in capital payment from FY 2008 to FY 2009, while rural nonreclassified hospitals are expected to experience a slight decrease in capital payments of 0.3 percent. The projected changes in capital payments for rural hospitals are mainly due to the proposed changes to the GAF (including the proposal to apply the rural floor budget neutrality at a State level). The projected changes in capital payments for urban hospitals are mainly due to the 50 percent reduction in the teaching adjustment in FY 2009. Table III.—Comparison of Total Capital Payments Per Case
[FY 2008 payments compared to FY 2009 payments]
Number of hospitals
Average FY 2008 payments/case
Average FY 2009 payments/case
ChangeBy Geographic Location:All hospitals
3,528
757
757
0.0Large urban areas (populations over 1 million)
1,402
834
831
−0.3Other urban areas (populations of 1 million or fewer)
1,140
752
754
0.3Rural areas
986
528
531
0.5Urban hospitals
2,542
796
796
0.00-99 beds
643
632
642
1.6100-199 beds
829
684
692
1.1200-299 beds
483
752
758
0.8300-499 beds
411
829
827
−0.3500 or more beds
176
973
957
−1.7Rural hospitals
986
528
531
0.50-49 beds
338
429
427
−0.550-99 beds
373
485
487
0.4100-149 beds
166
532
537
1.0150-199 beds
67
586
595
1.4200 or more beds
42
652
652
0.0By Region:( print page 23920)Urban by Region
2,542
796
796
0.0New England
121
835
805
−3.6Middle Atlantic
348
858
835
−2.7South Atlantic
385
755
763
1.1East North Central
394
777
770
−0.9East South Central
163
719
727
1.2West North Central
157
777
779
0.2West South Central
371
747
761
1.9Mountain
157
807
822
1.8Pacific
393
925
943
1.9Puerto Rico
53
367
368
0.3Rural by Region
986
528
531
0.5New England
23
706
675
−4.5Middle Atlantic
70
543
537
−1.0South Atlantic
172
516
524
1.5East North Central
121
555
555
0.1East South Central
176
480
484
0.9West North Central
113
560
567
1.1West South Central
200
479
483
0.8Mountain
75
533
539
1.2Pacific
36
650
660
1.6By Payment Classification:All hospitals
3,528
757
757
0.0Large urban areas (populations over 1 million)
1,424
832
830
−0.3Other urban areas (populations of 1 million or fewer)
1,160
750
752
0.3Rural areas
944
528
531
0.6Teaching Status:Non-teaching
2,484
643
657
2.1Fewer than 100 Residents
805
765
769
0.5100 or more Residents
238
1,085
1,037
−4.4Urban DSH:100 or more beds
1,534
823
820
−0.3Less than 100 beds
354
567
573
1.2Rural DSH:Sole Community (SCH/EACH)
389
467
469
0.4Referral Center (RRC/EACH)
206
584
589
0.8Other Rural:100 or more beds
39
489
493
0.8Less than 100 beds
168
438
438
0.1Urban teaching and DSH:Both teaching and DSH
811
896
881
−1.6Teaching and no DSH
172
784
777
−0.8No teaching and DSH
1,077
683
700
2.5No teaching and no DSH
524
702
716
2.0Rural Hospital Types:Non special status hospitals
2,459
800
799
−0.1RRC/EACH
63
700
714
2.0SCH/EACH
36
654
659
0.8Medicare-dependent hospitals (MDH)
11
457
456
−0.2SCH, RRC and EACH
15
751
776
3.4Hospitals Reclassified by the Medicare Geographic Classification Review Board:FY 2009 Reclassifications:All Urban Reclassified
445
802
799
−0.4All Urban Non-Reclassified
2,075
796
796
0.0All Rural Reclassified
360
573
579
1.0All Rural Non-Reclassified
565
459
458
−0.3Other Reclassified Hospitals (Section 1886(d)(8)(B))
54
535
538
0.5Type of Ownership:Voluntary
2,027
770
769
−0.2Proprietary
827
699
710
1.6Government
587
752
746
−0.8Medicare Utilization as a Percent of Inpatient Days:0-25
255
998
971
−2.825-50
1,350
847
843
−0.550-65
1,431
671
677
0.9Over 65
392
598
601
0.5
 
 
 IX. Alternatives Considered This proposed rule contains a range of proposed policies. The preamble of this proposed rule provides descriptions of the statutory provisions that are addressed, identifies those proposed policies when discretion has been exercised, and presents rationale for our decisions and, where relevant, alternatives that were considered. X. Overall Conclusion The changes we are proposing in this proposed rule will affect all classes of hospitals. Some hospitals are expected to experience significant gains and others less significant gains, but overall hospitals are projected to experience positive updates in IPPS payments in FY 2009. Table I of section VI. of this Appendix demonstrates the estimated distributional impact of the IPPS budget neutrality requirements for proposed MS-DRG and wage index changes, and for the wage index reclassifications under the MGCRB. Table I also shows an overall increase of 4.1 percent in operating payments. We estimate operating payments to increase by $3.96 billion. This accounts for the projected savings associated with the postacute care transfer policy proposal and the HACs policy, which each have an estimated savings of $50 million. In addition, this estimate includes the hospital reporting of quality data program costs ($2.39 million) and all proposed operating payment policies as described in section VII. of this Appendix. Capital payments are estimated to increase by 0.0 percent per case, as shown in Table III of section VIII. of this Appendix. Therefore, we project that the increase in capital payments in FY 2009 compared to FY 2008 is negligible ($6 million). The proposed operating and capital payments should result in a net increase of $3.967 billion to IPPS providers. The discussions presented in the previous pages, in combination with the rest of this proposed rule, constitute a regulatory impact analysis. XI. Accounting Statement As required by OMB Circular A-4 (available at 
                            *http://www.whitehousegov/​omb/​circulars/​a004/​a-4.pdf),*
                             in Table IV below, we have prepared an accounting statement showing the classification of the expenditures associated with the provisions of this proposed rule. This table provides our best estimate of the increase in Medicare payments to providers as a result of the proposed changes to the IPPS presented in this proposed rule. All expenditures are classified as transfers to Medicare providers. Table IV.—Accounting Statement: Classification of Estimated Expenditures From FY 2008 to FY 2009
Category
TransfersAnnualized Monetized Transfers
$3.967 Billion.From Whom to Whom
Federal Government to IPPS Medicare Providers.Total
$3.967 Billion.
 XII. Executive Order 12866 In accordance with the provisions of Executive Order 12866, the Office of Management and Budget reviewed this proposed rule. Appendix B: Recommendation of Update Factors for Operating Cost Rates of Payment for Inpatient Hospital Services I. Background Section 1886(e)(4)(A) of the Act requires that the Secretary, taking into consideration the recommendations of the MedPAC, recommend update factors for inpatient hospital services for each fiscal year that take into account the amounts necessary for the efficient and effective delivery of medically appropriate and necessary care and high quality care. Under section 1886(e)(5)(B) of the Act, we are required to publish update factors recommended by the Secretary in the proposed and final IPPS rules, respectively. Accordingly, this Appendix provides the recommendations for the update factors for the IPPS national standardized amount, the Puerto Rico-specific standardized amount, the hospital-specific rates for SCHs and MDHs, and the rate-of-increase limits for hospitals and hospital units excluded from the IPPS, as well as LTCHS, IPFs, and IRFs. We also discuss our response to MedPAC's recommended update factors for inpatient hospital services. II. Inpatient Hospital Update for FY 2009 Section 1886(b)(3)(B)(i)(XX) of the Act, as amended by section 5001(a) of Pub. L. 109-171, sets the FY 2009 percentage increase in the operating cost standardized amount equal to the rate-of-increase in the hospital market basket for IPPS hospitals in all areas, subject to the hospital submitting quality information under rules established by the Secretary in accordance with 1886(b)(3)(B)(viii) of the Act. For hospitals that do not provide these data, the update is equal to the market basket percentage increase less 2.0 percentage points. Consistent with current law, based on Global Insight, Inc.'s first quarter 2008 forecast of the FY 2009 market basket increase, we are estimating that the FY 2009 update to the standardized amount will be 3.0 percent (that is, the current estimate of the market basket rate-of-increase) for hospitals in all areas, provided the hospital submits quality data in accordance with our rules. For hospitals that do not submit quality data, we are estimating that the update to the standardized amount will be 1.0 percent (that is, the current estimate of the market basket rate-of-increase minus 2.0 percentage points). Section 1886(d)(9)(C)(1) of the Act is the basis for determining the percentage increase to the Puerto Rico-specific standardized amount. For FY 2009, we are applying the full rate-of-increase in the hospital market basket for IPPS hospitals to the Puerto Rico-specific standardized amount. Therefore, the update to the Puerto Rico-specific standardized amount is estimated to be 3.0 percent. Section 1886(b)(3)(B)(iv) of the Act sets the FY 2009 percentage increase in the hospital-specific rates applicable to SCHs and MDHs equal to the rate set forth in section 1886(b)(3)(B)(i) of the Act (that is, the same update factor as for all other hospitals subject to the IPPS, or the rate-of-increase in the market basket). Therefore, the update to the hospital-specific rates applicable to SCHs and MDHs is estimated to be 3.0 or 1.0 percent, depending upon whether the hospital submits quality data. Section 1886(b)(3)(B)(ii) of the Act is used for purposes of determining the percentage increase in the rate-of-increase limits for children's and cancer hospitals. Section 1886(b)(3)(B)(ii) of the Act sets the percentage increase in the rate-of-increase limits equal to the market basket percentage increase. In accordance with § 403.752(a) of the regulations, RNHCIs are paid under § 413.40, which also uses section 1886(b)(3)(B)(ii) of the Act to update the percentage increase in the rate-of-increase limits. Section 1886(j)(3)(C) of the Act addresses the increase factor for the Federal prospective payment rate of IRFs. Section 123 of Pub. L. 106-113, as amended by section 307(b) of Pub. L. 106-554, provides the statutory authority for updating payment rates under the LTCH PPS. As discussed below, for cost reporting periods beginning on or after October 1, 2006, LTCHs that are not defined as new under § 412.23(e)(4), and that had not elected to be paid under 100 percent of the Federal rate are paid 100 percent of the adjusted Federal PPS rate. Therefore, because no portion of LTCHs' prospective payments will be based on reasonable cost concepts for cost reporting periods beginning on or after October 1, 2006, we are not proposing a rate-of-increase percentage to the reasonable cost portion for FY 2009 for LTCHs to be used under § 413.40. In addition, section 124 of Pub. L. 106-113 provides the statutory authority for updating all aspects of the payment rates for IPFs. Under this broad authority, IPFs that are not defined as new under § 412.426(c) are paid under a blended methodology for cost reporting periods beginning on or after January 1, 2005, and before January 1, 2008. For cost reporting periods beginning on or after January 1, 2008, existing IPFs are paid based on 100 percent of the Federal per diem rate. Therefore, because no portion of the existing IPFs prospective payments will be based on reasonable cost concepts for cost reporting periods beginning on or after 
                            ( print page 23922)
                            January 1, 2008, we are not proposing a rate-of-increase percentage to the reasonable cost portion for FY 2009 for IPFs to be used under § 412.426(c). New IPFs are paid based on 100 percent of the Federal per diem payment amount. Currently, children's hospitals, cancer hospitals, and RNHCIs are the remaining three types of hospitals still reimbursed under the reasonable cost methodology. We are providing our current estimate of the FY 2009 IPPS operating market basket percentage increase (3.0 percent) to update the target limits for children's hospitals, cancer hospitals, and RNHCIs. Effective for cost reporting periods beginning on or after October 1, 2002, LTCHs have been paid under the LTCH PPS. Additionally, for cost reporting periods beginning on or after October 1, 2006, no portion of a LTCH's PPS payments can be based on reasonable cost concepts. Consequently, there is no need to propose to update the target limit under § 413.40 effective October 1, 2008, for LTCHs. In the RY 2009 LTCH PPS proposed rule (73 FR 5361 through 5362), we proposed an update of 2.6 percent to the LTCH PPS Federal rate for RY 2009, which is based on a proposed market basket increase of 3.5 percent and a proposed adjustment of 0.9 percent to account for the increase in case-mix in a prior year that resulted from changes in coding practices rather than an increase in patient severity. The proposed market basket of 3.5 percent used in determining this proposed update factor is based on our proposal in the LTCH proposed rule to extend the LTCH RY 2009 by 3 months (a total of 15 months instead of 12 months) through September 30, 2009. (A full discussion of the reasons for this proposed extension of RY 2009 can be found in the RY 2009 LTCH PPS proposed rule (73 FR 5351 through 5353).) However, if we were not proposing to extend the 2009 LTCH PPS rate year by 3 months, we would have proposed a market basket update of 3.1 percent for a 12-month RY 2009 offset by the proposed adjustment of 0.9 percent to account for the increase in case-mix in a prior year that resulted from changes in coding practices rather than an increase in patient severity. Effective for cost reporting periods beginning on or after January 1, 2005, IPFs are paid under the IPF PPS. IPF PPS payments are based on a Federal per diem rate that is derived from the sum of the average routine operating, ancillary, and capital costs for each patient day of psychiatric care in an IPF, adjusted for budget neutrality. For cost reporting periods beginning on or after January 1, 2005, and before January 1, 2008, existing IPFs (those not defined as “new” under § 412.426(c)) are paid based on a blend of the reasonable cost-based PPS payments and the Federal per diem base rate. For cost reporting periods beginning on or after January 1, 2008, existing IPFs are paid based on 100 percent of the Federal per diem rate. Consequently, there is no need to propose to update the target limit under § 412.426(c) effective October 1, 2008, for IPFs. IRFs are paid under the IRF PPS for cost reporting periods beginning on or after January 1, 2002. For cost reporting periods beginning on or after October 1, 2002 (FY 2003), and thereafter, the Federal prospective payments to IRFs are based on 100 percent of the adjusted Federal IRF prospective payment amount, updated annually (69 FR 45721). Section 1886(j)(3)(C) of the Act, as amended by section 115 of Pub. L. 110-173 sets the FY 2009 IRF PPS update factor equal to 0 percent. Thus, we are not applying an update (market basket) to the IRF PPS rates for FY 2009. III. Secretary's Recommendation MedPAC is recommending an inpatient hospital update equal to the market basket rate of increase for FY 2009. MedPAC's rationale for this update recommendation is described in more detail below. Based on the FY 2009 President's Budget, we are recommending an update to the standardized amount of 0 percent. We are recommending that this same update factor apply to SCHs and MDHs. Section 1886(d)(9)(C)(1) of the Act is the basis for determining the percentage increase to the Puerto Rico-specific standardized amount. For FY 2009, we are applying the full rate-of-increase in the hospital market basket for IPPS hospitals to the Puerto Rico-specific standardized amount. Therefore, the update to the Puerto Rico-specific standardized amount is estimated to be 3.0 percent. In addition to making a recommendation for IPPS hospitals, in accordance with section 1886(e)(4)(A) of the Act, we are also recommending update factors for all other types of hospitals. Consistent with the President's Budget, we are recommending an update based on the IPPS market basket increase for children's hospitals, cancer hospitals, and RNHCIs of 0 percent. As mentioned above, for cost reporting periods beginning on or after January 1, 2008, existing IPFs are paid based on 100 percent of the Federal per diem rate (and are no longer paid a blend of the reasonable cost-based PPS payments and the Federal per diem base rate). Consequently, we are no longer recommending an update factor for the portion of the payment that is based on reasonable costs. Consistent with the President's Budget, based on Global Insight, Inc.'s first quarter 2008 forecast of the RPL market basket increase, we are recommending an update to the IPF PPS Federal rate for RY 2009 of 3.2 percent for the Federal per diem payment amount. In the RY 2009 LTCH PPS proposed rule (73 FR 5361 through 5362), we proposed an update of 2.6 percent to the LTCH PPS Federal rate for RY 2009, which is based on a proposed market basket increase of 3.5 percent and a proposed adjustment of 0.9 percent to account for the increase in case-mix in a prior year that resulted from changes in coding practices rather than an increase in patient severity. The proposed market basket of 3.5 percent used in determining this proposed update factor is based on our proposal in the LTCH proposed rule to extend the LTCH RY 2009 by 3 months (a total of 15 months instead of 12 months) through September 30, 2009. (A full discussion on the reasons for this proposed extension of RY 2009 can be found in the RY 2009 LTCH PPS proposed rule (73 FR 5351 through 5353).) However, if we were not proposing to extend the 2009 LTCH PPS rate year by 3 months, we would have proposed a market basket update for a 12 month RY 2009 of 3.1 percent in determining the proposed update factor for RY 2009 offset by the proposed adjustment of 0.9 percent to account for the increase in case-mix in a prior year that resulted from changes in coding practices rather than an increase in patient severity. Finally, consistent with the President's FY 2009 Budget, we are recommending a zero percent update to the IRF PPS Federal rate for FY 2009. This recommendation is consistent with the zero percent increase factor specified in section 1886(j)(3)(C) of the Act, as amended by section 115 of Pub. L. 110-173. IV. MedPAC Recommendation for Assessing Payment Adequacy and Updating Payments in Traditional Medicare In its March 2008 Report to Congress, MedPAC assessed the adequacy of current payments and costs, and the relationship between payments and an appropriate cost base, utilizing an established methodology used by MedPAC in the past several years. MedPAC recommended an update to the hospital inpatient rates equal to the increase in the hospital market basket in FY 2009, concurrent with implementation of a quality incentive program. Similar to last year, MedPAC also recommended that CMS put pressure on hospitals to control their costs rather than accommodate the current rate of cost growth, which is, in part, caused by a lack of pressure from private payers. MedPAC noted that indicators of payment adequacy are almost uniformly positive. MedPAC expects Medicare margins to remain low in 2008. At the same time though, MedPAC's analysis finds that hospitals with low non-Medicare profit margins have below average standardized costs and most of these facilities have positive overall Medicare margins. *Response:*
                             Similar to our response last year, we agree with MedPAC that hospitals should control costs rather than accommodate the current rate of growth. An update equal to less than the market basket will motivate hospitals to control their costs, consistent with MedPAC's recommendation. As MedPAC noted, the lack of financial pressure at certain hospitals can lead to higher costs and in turn bring down the overall Medicare margin for the industry. As discussed in section II of the preamble of this proposed rule, CMS implemented the MS-DRGs in FY 2008 to better account for severity of illness under the IPPS, and is basing the DRG weights on costs rather than charges. We continue to believe that these refinements will better match Medicare payment of the cost of care and provide incentives for hospitals to be more efficient in controlling costs. We note that, because the operating and capital prospective payment systems remain separate, we are proposing to continue to use separate updates for operating and capital payments. The proposed update to the 
                            ( print page 23923)
                            capital rate is discussed in section III of the Addendum to this proposed rule. Appendix C—Disclosure of Financial Relationship Report (DFRR) Form Disclosure of Financial Relationship Report (DFRR) Requirement Completion of the Disclosure of Financial Relationship Report (DFRR or Report) is required under section 1877(f) of the Social Security Act. The Report must be completed, certified by the appropriate officer of the hospital, and received by CMS within 60 days of the date that appears on the cover letter or e-mail transmission. Pursuant to 42 CFR 411.361(f), failure to timely submit the requested information concerning an entity's ownership, investment, and compensation arrangements may result in civil monetary penalties of up to $10,000 for each day beyond the deadline established for disclosure. Please be advised that the results from the DFRR may be shared with other Federal agencies and with Congressional committees, as permitted or mandated by law. We intend to protect from public disclosure, to the fullest extent permitted by Exemptions 4 and 6 of the Freedom of Information Act, 5 U.S.C. 552(b)(4) and (6), any confidential business information and any individual-specific information collected. We note that CMS is prevented by the Trade Secrets Act, 18 U.S.C. 1905, from releasing confidential business information, except as authorized by law. Information collected from each hospital will be analyzed separately to determine whether the financial relationships are in compliance with the physician self-referral laws and implementing regulations. At this time, we do not plan to aggregate data. Exception to Mandatory Reporting An entity that furnishes 20 or fewer Part A and/or Part B services during a calendar year is excepted from this reporting requirement pursuant to 42 CFR 411.361(b). If you believe that the hospital qualifies for this exception: The Chief Executive Officer, Chief Financial Officer, or a comparable officer of the Hospital must certify in writing that the hospital furnishes 20 or fewer Part A and/or Part B services during a calendar year.
                        The certification statement must read as follows: “I, (insert name), hereby certify that, to the best of my knowledge and belief, (insert name of Hospital) furnishes 20 or fewer Part A and/or Part B services during a calendar year. Therefore the hospital is relying on the exception in42 CFR 411.361(b) and will not be reporting financial relationship data concerning the facility.” The certification statement must be signed and dated, and include the title of the signatory.
                        If the hospital or entity qualifies for the exception at42 CFR 411.361(b), please mail the original and one copy of the signed certification statement to: Physician Self-Referral, Centers for Medicare & Medicaid Services, 7500 Security Boulevard, Mailstop C4-25-02, Baltimore, Maryland 21244-1850. In addition, we request, but do not require, that you e-mail a PDF or other electronically scanned version of the document to 
                            *HOSPITALDISCLOSURE@cms.hhs.gov*. In the subject line, please include the title “Exception to Disclosure Report.” General Instructions for DFRR The requested disclosures on Worksheets 1 through 6 pertain only to hospitals with physician ownership or investment. For purposes of this Report, ownership is synonymous with investment.
                        For any question pertaining to the financial relationship between a physician and the Hospital or entity or individual, “physician” shall include each immediate family member of the physician, as defined in42 CFR 411.351.
                        The terms, “physician-owner” and “physician-investor” are used interchangeably throughout this report.
                        Please provide the physician's last name, first name, and Medicare National Provider Identifier (NPI). Only for those physicians who have not yet received an NPI, may the physician's Unique Physician Identification Number (UPIN) be submitted instead. We will not accept a hospital created identifier (for example, Physician 1, Physician 2, etc.).
                        Where supporting documentation or an explanation is requested, please include the name of the physician-owner or physician-investor, and his/her NPI.
                        Supplemental documents should be provided only when specifically requested on a worksheet. Supporting documentation should be organized and clearly labeled to reference the relevant worksheet. Please include only information that responds to the question asked; extraneous information should not be included. For example, if only a few pages of a large document are responsive to a question, please only submit those relevant pages.
                        If a particular question does not apply to the hospital, please type “N/A.”
                        If sufficient rows are not provided, please save the Excel spreadsheet, insert the necessary number of additional rows, and print a copy of the revised Excel spreadsheet.
                        Upon completion of the entire DFRR, please verify all information presented (including the totals for the respective fields or columns) and return an original and one copy to: Physician Self-Referral, Centers for Medicare & Medicaid Services, 7500 Security Boulevard, Mailstop C4-25-02, Baltimore, Maryland 21244-1850. CMS also requests, but does not require, that a PDF or other electronically scanned version of the DFRR and accompanying documentation be sent to*HOSPITALDISCLOSURE@cms.hhs.gov*.
                        Please enter all date fields in the following format: MM/DD/YY. For example, “March 31, 2006” must be entered as follows: 03/31/06. Report Contents The attached report consists of the following spreadsheets: Cover Sheet—(Certification Page)
                        Worksheet 1—Hospital Characteristics
                        Worksheet 2—Direct Ownership in Hospital
                        Worksheet 3—Indirect Ownership in Hospital
                        Worksheet 4—Payments Made to Hospital by Direct Owners
                        Worksheet 5—Payments Made to Hospital by Indirect Owners
                        Worksheet 6—Investment Reconciliation
                        Worksheet 7—Compensation Arrangements—Rentals, Personal Service Arrangements, and Recruitment (See42 CFR 411.357)
                        Worksheet 8—Other Types of Compensation Arrangements (See42 CFR 411.357) Key Terms 1. Additional Purchases: Stocks purchased after initial or starting investment. Report the total cost and number of additional shares of stock purchased. 2. Assessments: Any cost or fee required and paid by any investor of the hospital. These fees usually do not involve any basis or change in the owner's investment in the facility. 3. Back-up Guarantee: Physician-owner's risk of loss or liability related to the ownership of his or her stock is guaranteed by another entity. If the borrower has problems in repayment, the payment is guaranteed by a third party. 4. Basis of Stock/Shares: The cost of the stock at the end of the cost reporting period(s) ending in 2006. 5. Capital Calls: Each investor is asked/required to put additional capital in the company. Depending on the structure of the call, if no additional shares are issued, the basis (cost) of the investor's stock will increase, or if additional shares are issued, the number of the investor's shares will increase. 6. Compilation of Financial Statements: A compilation presents information in the form of financial statements that are the representation of management without expressing assurances. 7. Direct Ownership or Investment Interest: Direct ownership or investment interest is defined at 42 CFR 411.354(a)(2). 8. Disproportionate Guarantee by Physician Investor: Physician investor's risk of loss or liability related to the ownership of his/her stock is guaranteed by the corporate investor in a disproportionate percentage to the percentage of stock owned by that physician investor (i.e.: Physician investor owns 40% of the stock of a hospital, but assumes risk of loss or liability equal to 20%.) 9. Fair Market Value: Fair market value is defined at 42 CFR 411.351. 10. Hospital: Hospital is synonymous with operating entity (that is, the corporation or legal entity through which the hospital operates). 11. Immediate family member: An immediate family member means: Husband or wife; birth or adoptive parent, child, or sibling; stepparent, stepchild, stepbrother, or stepsister; father-in-law, mother-in-law, son-in-law, daughter-in-law, brother-in-law, sister-in-law; grandparent or grandchild; and spouse of a grandparent or grandchild. 42 CFR 411.351. 12. Indirect Ownership or Investment Interest: An indirect ownership or investment interest is defined at 42 CFR 411.354(b)(5). 
                            ( print page 23924) 13. Internally prepared: Internally prepared financial statements are prepared by employees of the hospital, and are used mostly to monitor the hospital's performance. 14. Loan Guarantees: A situation when the borrower's liability is collateralized by a third party. 15. NPI: Medicare National Provider Identifier. 16. Other Capital Assessments: Report only if shares of stock are involved. Fees assessed should not be reported. 17. Relinquishments or Sales: For each share of stock that is sold during the cost reporting period(s) in 2006, report the dollar amount of the sale and the number of shares sold. 18. Reporting Period: The reporting period refers to any cost reporting period(s) ending in 2006. 19. Return of Capital Dividends: A distribution that is not paid out of the earnings and profits of the company. This distribution reduces the basis of the stock. 20. Review of Financial Statements: A review of financial statements is an engagement that results in an accountant's opinion that expresses less assurance than that of a certified audit, but more than a compilation. Typically this involves limited auditing, testing, analytical procedures, and/or inquiries. 21. Stock/share: These terms are used interchangeably throughout the worksheets. 22. Stock Dividends: Stock dividends are distributions made by a corporation of its own stock. Worksheet 1—Hospital Characteristics Please include month, date, and year for the beginning and end of your cost reporting period(s). Worksheet 2—Direct Ownership in Hospital Identify the class of stock (if applicable) and list all owners of that class within the same grouping on the Worksheet.
                        If the direct owner is the physician, enter “Self” in Column B.
                        If the direct owner is not the physician, please write the individual's name in Column A and in Column B indicate his/her relationship to the physician and give the physician's name.
                        The basis of the stock/shares is the cost of the stock at the end of the cost reporting period(s) ending in 2006. This amount should equal Worksheet 6, Column B, Line 18.
                        One hundred percent of ownership should be identified for each individual class of stock. Worksheet 3—Indirect Ownership in Hospital Report only indirect ownership interests of physicians and immediate family members on this Worksheet.
                        In Column A, identify each entity with ownership in the hospital and identify the type of entity in Column B. The entity's percentage of direct ownership should be listed in Column C.
                        List each investor-owner of the group entity in Column D. Indicate if the investor-owner is a physician. If the investor-owner is an immediate family member, please indicate the relationship to, and name of the physician to whom the investor-owner is related.
                        Column E should indicate each investor-owner's percentage ownership in the entity at the end of the cost reporting period(s) in 2006, with the number of shares owned (if applicable) listed in Column F. Each type of share owned (if applicable) should be listed individually with the type of stock labeled in Column G.
                        To calculate the percent of indirect ownership in Column H for each investor-owner of the entity, multiply the percentage in Column C by the percentage in Column E. Worksheet 4—Payments Made to Hospital by Direct Owners Report only payments to the hospital by direct physician-owners and immediate family member owners on this Worksheet.
                        Complete one line for each payment made by a physician-owner related to his or her investment interest, including, but not limited to: Initial investments, assessments, capital calls, and loan guarantees. If necessary, please insert additional lines.
                        In Column B, indicate “Self” if the physician is the direct owner. If the direct owner is not the physician, please list the direct owner's name in Column A and in Column B, indicate the immediate family member's relationship to the physician and give the physician's name.
                        Do not group payments under one physician name, but rather use a separate line for each type of payment made by a physician. Worksheet 5—Payments Made to Hospital by Indirect Owners Report only payments made by indirect physician-owners and immediate family member owners on this Worksheet.
                        Complete one line for each payment made by an entity related to an investment interest, including, but not limited to: Initial investments, assessments, capital calls, and loan guarantees. If necessary, please insert additional lines.
                        List the name of the indirect ownership entity in Column A. In Column B, list the names of individuals that compose that entity, placing only one person per line and indicating his or her status, i.e. “Self” for physician, or “IFM” for immediate family member.
                        For immediate family members, enter the relationship to and name of, the physician family member in Column C.
                        Do not group payments under one entity name, but rather use a separate line for each type of payment made by an entity. Worksheet 6—Investment Reconciliation Please*complete*
                             a separate Worksheet for each physician-owner or immediate family member owner.
                        Please provide the owner's Social Security Number (SSN) or NPI as appropriate.
                        If a physician owns more than one class of stock/equity, a separate worksheet must be completed for each class of stock/equity.
                        Line 10, Column A—The begin date must be the start of the cost reporting period(s) that end(s) in 2006. That is, for a cost reporting period of July 1, 2005 to June 30, 2006, the begin date is 07/01/05.
                        Line 10, Columns B, C, and D must reflect the physician-owner's total investment for the class of stock/equity described, as of the beginning of the period being evaluated (all cost period(s) ending in 2006).
                        Lines 11 through 17, Columns B, C, and D must reflect any and all changes to the physician-owner's stock/equity during the period being evaluated, so that line 18 reflects the owner's total investment at the end of the period.
                        Line 17 must reflect all other capital assessments that occurred during the cost reporting period(s) ending in 2006.
                        Line 18, Column A—The end date must be the end date of the cost reporting period(s) that end(s) in 2006. That is, for a cost reporting period of July 1, 2005 to June 30, 2006, the end date is 06/30/06.
                        Line 18, Column B—The amount entered here should be equal to the amount listed on Worksheet 2, Column C for each class of stock for each physician owner. Worksheet 7—Compensation Arrangements—Rentals, Personal Service Arrangements, and Recruitment (See 42 CFR 411.357) For all physicians who had one or more of the compensation arrangements listed in columns A through D list the physician's complete name in the first column, the physician's NPI, and insert either a Y or N as to whether the physician is an owner/investor of the hospital. In addition, please insert the applicable number of compensation arrangements in each respective column.
                        For those compensation arrangements listed in columns A through D, include not just those that you believe fit within an exception in42 CFR 411.357, but those that are implicated by the referenced exception.
                        The information requested in columns A and B must include compensation arrangements that occur in either direction (i.e., rentals to/from physicians).
                        Please indicate in the appropriate column*the number of compensation arrangements*
                             that pertain to the physician for the reporting period(s) ending in 2006.
                        Note that each Column A-D that is filled in with a number requires the submission of supporting documentation for each compensation arrangement. With the exception of uniform personal service arrangements, please submit a copy of the written agreement(s) that were in effect during the reporting period(s) ending in 2006.
                        *Personal Service Arrangements (PSA—Column C)* ○ For each physician listed, please indicate the number of PSAs in effect for the cost reporting period(s) ending in 2006. ○ In the next column indicate if the physician used a uniform PSA prepared by the hospital. We consider a PSA to be uniform if all of the elements present in the arrangements are materially the same. Only one copy of the uniform PSA should be included in the supplemental materials. The 
                            ( print page 23925)
                            one copy will satisfy the supporting documentation requirement for all physicians who entered into a uniform PSA with the hospital. ○ Indicate whether or not the hospital has a signed copy of this agreement on file for this physician in the next sub-column with a Y or N. ○ If the physician had a non-uniform PSA in effect for the cost reporting period(s) ending in 2006, please indicate this on the Worksheet and provide a copy of the PSA with the supplemental materials for this Worksheet. Worksheet 8—Other Types of Compensation Arrangements (See 42 CFR 411.357) This Worksheet addresses other compensation arrangements exceptions that are found at42 CFR 411.357.
                        Please note that you may be required to furnish an explanation or additional documentation depending on the answer to each question.
                        Submit only the information that is necessary to answer the question by removing extraneous documentation where possible. Questions Questions regarding these instructions may be directed to: 
                            *DFRR-Questions@cms.hhs.gov*.


# Footnotes

1.
    
                             Medicare Payment Advisory Commission: 
                            *Report to the Congress, Physician-Owned Specialty Hospitals,*
                             March 25, page viii. Back to Citation
 2.
    
                             Institute of Medicine: To Err Is Human: Building a Safer Health System, November 1999. Available at: 
                            *http://www.iom.edu/​Object.File/​Master/​4/​117/​ToErr-8pager.pdf.* Back to Citation
 3.
    
                             Centers for Disease Control and Prevention: Press Release, March 2000. Available at: 
                            *http://www.cdc.gov/​od/​oc/​media/​pressrel/​r2k0306b.htm.* Back to Citation
 4.
    
                             Klevens et al. Estimating Health Care-Associated Infections and Deaths in U.S. Hospitals, 2002. 
                            *Public Health Reports.*
                             March-April 2007. Volume 122. Back to Citation
 5.
    
                             2007 Leapfrog Group Hospital Survey. The Leapfrog Group 2007. Available at: 
                            *http://www.leapfroggroup.org/​media/​file/​Leapfrog_​hospital_​acquired_​infections_​release.pdf* Back to Citation
 6.
    
                             For this FY 2009 IPPS proposed rule, the DRG analysis is based on data from the September 2007 update of the FY 2007 MedPAR file, which contains hospital bills received through September 30, 2007, for discharges through September 30, 2007. Back to Citation
 7.
    
                             
                            *American Association for Respiratory Care Clinical Practice:*
                             Guideline: Care of the Ventilator Circuit and Its Relation to Ventilator Associated Pneumonia. 
                            *Available at the Web site:  http://www.rcjournal.com/​cpgs/​09.03.0869.html.* Back to Citation
 8.
    
                             Ramirez et al.:  Prevention Measures for Ventilator-Associated Pneumonia:  A New Focus on the Endotracheal Tube. 
                            *Current Opinion in Infectious Disease,*
                             April 2007, Vol.20 (2), pp. 190-197. Back to Citation
 9.
    
                             Safdar et al.:  The Pathogenesis of Ventilator-Associated Pneumonia:  Its Relevance to Developing Effective Strategies for Prevention. 
                            *Respiratory Care,*
                             June 2005, Vol. 50, No. 6, pp.725-741. Back to Citation
 10.
    
                             Jensen, A.G.  Importance of Focus Identification in the Treatment of 
                            *Staphylococcus aureus*
                             Bacteremia.  2002.  Vol. 52, pp. 29-36. Back to Citation
 11.
    
                             Kuehnert, M.J., et al.: Prevalence of 
                            *Staphylococcusa aureus*
                             Nasal Colonization in the United States, 2001-2002.  The Journal of Infectious Disease, January 15, 2006; Vol. 193. Back to Citation
 12.
    
                             See the FY 1989 final rule (53 FR 38485, September 30, 1988), for the revision made for  the discharges occurring in FY 1989; the FY 1990 final rule (54 FR 36552, September 1, 1989), for the FY 1990 revision; the FY 1991 final rule (55 FR 36126, September 4, 1990), for the FY 1991 revision; the FY 1992 final rule (56 FR 43209, August 30, 1991) for the FY 1992 revision; the FY 1993 final rule (57 FR 39753, September 1, 1992), for the FY 1993 revision; the FY 1994 final rule (58 FR 46278, September 1, 1993), for the FY 1994 revisions; the FY 1995 final rule (59 FR 45334, September 1, 1994), for the FY 1995 revisions; the FY 1996 final rule (60 FR 45782, September 1, 1995), for the FY 1996 revisions; the FY 1997 final rule (61 FR 46171, August 30, 1996), for the FY 1997 revisions; the FY 1998 final rule (62 FR 45966, August 29, 1997) for the FY 1998 revisions; the FY 1999 final rule (63 FR 40954, July 31, 1998), for the FY 1999 revisions; the FY 2001 final rule (65 FR 47064, August 1, 2000), for the FY 2001 revisions; the FY 2002 final rule (66 FR 39851, August 1, 2001),  for the FY 2002 revisions; the FY 2003 final rule (67 FR 49998, August 1, 2002), for the FY 2003 revisions; the FY 2004 final rule (68 FR 45364, August 1, 2003), for the FY 2004 revisions;  the FY 2005 final rule (69 FR 49848, August 11, 2004), for the FY 2005 revisions; the FY 2006 final rule (70 FR 47640, August 12, 2005), for the FY 2006 revisions; the FY 2007 final rule (71 FR 47870) for the FY 2007 revisions; and  the FY 2008 final rule (72 FR 47130) for the FY 2008 revisions.  In the FY 2000 final rule (64 FR 41490, July 30, 1999, we did not modify the CC Exclusions List because we did not make any changes to the ICD-9-CM codes for FY 2000. Back to Citation
 13.
    
                             The original list of the ICD-9-CM procedure codes for the procedures we consider nonextensive procedures, if performed with an unrelated principal diagnosis, was published in Table 6C in section IV. of the Addendum to the FY 1989 final rule (53 FR 38591). As part of the FY 1991 final  rule (55 FR 36135), the FY 1992 final rule (56 FR 43212), the FY 1993 final rule (57 FR 23625), the FY 1994 final rule (58 FR 46279), the FY 1995 final rule (59 FR 45336), the FY 1996 final rule (60 FR 45783), the FY 1997 final rule (61 FR 46173), and the FY 1998 final rule (62 FR 45981), we moved several other procedures from DRG 468 to DRG 477, and some procedures from DRG 477 to DRG 468.  No procedures were moved in FY 1999, as noted in the final rule (63 FR 40962); in FY 2000 (64 FR 41496); in FY 2001 (65 FR 47064); or in FY 2002 (66 FR 39852). In the FY 2003 final rule (67 FR 49999) we did not move any procedures from DRG 477. However, we did move procedure codes from DRG 468 and placed them in more clinically coherent DRGs. In the FY 2004 final rule (68 FR 45365), we moved several procedures from DRG 468 to DRGs 476 and 477 because the procedures are nonextensive. In the FY 2005 final rule (69 FR 48950), we moved one procedure from DRG 468 to 477. In addition, we added several existing procedures to DRGs 476 and 477. In the FY 2006 (70 FR 47317), we moved one procedure from DRG 468 and assigned it to DRG 477. In FY 2007, we moved one procedure from DRG 468 and assigned it to DRGs 479, 553, and 554. In FY 2008, no procedures were moved, as noted in the final rule with comment period (72 FR 46241). Back to Citation
 14.
    
                             Strange, Charlie., et al., design of the Endobronchial Valve for Emphysema Palliation trial (VENT): A Nonsurgical Method of Lung Volume Reduction, 
                            *BMC Pulmonary Medicine.*
                             2007; 7:10. Back to Citation
 15.
    
                             Oneill, WW., et al., Acute Myocardial Infarction with Hyperoxemic Therapy (AMIHOT): A Prospective Randomized Trial of Intracoronary Hyperoxemic Reperfusion after Percutaneous Coronary Intervention. 
                            *Journal of the American College of Cardiology*, Vol. 50, No. 5, 2007, pp. 397-405. Back to Citation
 16.
    
                             Institute of Medicine, “Performance Measurement:  Accelerating Improvement,” December 1, 2005, available at: 
                            *www.iom.edu/​CMS/​3809/​19805/​31310.aspx.* Back to Citation
 17.
    
                             Medicare Payment Advisory Commission:  Report to Congress:  Promoting Greater Efficiency in Medicare. June 2007, Chapter 5, page 103. Back to Citation
 18.
    
                             Coleman, E.A., C. Parry, S. Chalmers, et al. 2006.  The care transitions intervention:  Results of a randomized controlled trial. 
                            *Archives of Internal Medicine,*
                             166 (September 25):  1822-1828. Back to Citation
 19.
    
                             Coleman, E.A., J.D. Smith, R. Devbani, et al. 2005.  Posthospital medication discrepancies:  Prevalence and contributing factors. 
                            *Archives of Internal Medicine*
                             165, (September 12):  1842-1847. Back to Citation
 20.
    
                             Coleman, E., and R. Berenson.  2004. Lost in transition:  Challenges and opportunities for improving the quality of transitional care. 
                            *Annals of Internal Medicine,*
                             141, no. 7 (October 5):  533-536. Back to Citation
 21.
    
                             Institute for Healthcare Improvement.  2004a. 
                            *Reducing readmissions for heart failure patients: 
                                
                                 Hackensack University Medical Center.*
                             Available at 
                            *http://www.ihi.org.* Back to Citation
 22.
    
                             Institute for Healthcare Improvement.  2004b. 
                            *The MedProvider inpatient care unit-congestive heart failure project.*
                             Available at: 
                            *http://www.ihi.org.* Back to Citation
 23.
    
                             Lappe, J.M., J.B. Muhlestein, D.L. Lappe, et al. 2004.  Improvements in 1-year cardiovascular clinical outcomes associated with a hospital-based discharge medication program. 
                            *Annals of Internal Medicine,*
                             141, no.6 (September 21):  446-453. Back to Citation
 24.
    
                             Naylor, M.D., D. Brooton, R. Campbell, et al. 1999.  Comprehensive discharge planning and home follow-up of hospitalized elders. 
                            *Journal of the American Medical Association,*
                             281, no.7 (February 17):  613-620. Back to Citation
 25.
    
                             VanSuch, M., J.M. Naessens, R.J. Stroebel, et al. 2006.  Effect of discharge instructions on readmission of hospitalized patients with heart failure:  Do all of the Joint Commission on Accreditation of Healthcare Organizations heart failure core measures reflect better care? 
                            *Quality and Safety in Healthcare,*
                             15:  414-417. Back to Citation
 26.
    
                             Weinberg D.B., J.H. Gittell, R.W. Lusenhop, et al. 2007.  Beyond our walls:  Impact of patient and provider coordination across the continuum on outcomes for surgical patients. 
                            *Health Services Research,*
                             42, no. 1, pt. 1 (February):  7-24. Back to Citation
 27.
    
                                     These figures represent 3.0 standard deviations from the mean of the log distribution of CCRs for all hospitals. Back to Citation


BILLING CODE 4120-01-P BILLING CODE 4120-01-C [FR Doc. 08-1135 Filed 4-14-08; 9:19 am]