Federal Register / Vol. 60, No. 30 / Tuesday, February 14, 1995 / Notices 8389

promotional materials, and

telemarketing scripts; information

regarding prize recipients and prizes;

sales information; information regarding

employees directly involved in

telephone sales; and written notices,

disclosures and acknowledgements

required under the proposed rule. These

records would be available for

inspection by Commission staff, by

other government law enforcement

personnel, and by private litigants to

determine compliance with the rule.

Absent the recordkeeping

requirements, Commission staff believes

that this is the type of information that

would be retained by these entities in

any event during the normal course of

business because this information

would be useful in resolving private,

non-governmental inquiries and

disputes. The definition of ‘‘burden’’ for

OMB purposes excludes any effort that

would be expended regardless of a

regulatory requirement. 5 C.F.R.

§ 1320.7(b)(1). Thus, the only burden

would be for retaining the records for an

additional period of time.

Currently, staff is estimating that

40,000 entities will be affected and that

it will take each affected entity one hour

per year to retain these documents for

an additional period of time. Thus, the

total burden for the proposed rule is

estimated at 40,000 hours (1 hour per

year times 40,000 industry members).

However, staff is seeking comments,

particularly quantitative estimates,

about the amount of time it would take

to comply with these requirements, and

the comments may result in a change in

the estimated burden hours. The basis

for this estimate is described in more

detail in the Supporting Statement

submitted with the Request for OMB

Review.

DATES: Comments on this application

must be submitted on or before March

31, 1995.

ADDRESSES: Send comments both to

Office of Information and Regulatory

Affairs, Office of Management and

Budget, New Executive Office Building,

Room 3228, Washington, DC 20503,

ATN: Desk Officer for the Federal Trade

Commission, and to the Office of the

Secretary, Room 159, Federal Trade

Commission, Washington, DC 20580.

Copies of the submission to OMB may

be obtained from the Public Reference

Section, Room 130, Federal Trade

Commission, Washington, DC 20580.

FOR FURTHER INFORMATION CONTACT:

David M. Torok, Attorney, Bureau of

Consumer Protection, Division of

Marketing Practices, Federal Trade

Commission, Washington, DC 20580,

(202) 326–3140.

Donald S. Clark,

Secretary.

[FR Doc. 95–3538 Filed 2–13–95; 8:45 am]

BILLING CODE 6750–01–M

DEPARTMENT OF HEALTH AND

HUMAN SERVICES

Health Care Financing Administration

[BPD–793–NC]

RIN 0938–AG54

Medicare Program; Schedule of Limits

on Home Health Agency Costs Per

Visit

AGENCY: Health Care Financing

Administration (HCFA), HHS.

ACTION: Notice with comment period.

SUMMARY: This notice with comment

period sets forth a revised schedule of

limits on home health agency costs that

may be paid under the Medicare

program for cost reporting periods

beginning on or after July 1, 1993. These

limits replace the per-visit limits that

were set forth in our July 8, 1993 notice

with comment period (58 FR 36748).

This notice also provides, in accordance

with the provisions of the Omnibus

Budget Reconciliation Act of 1993

(OBRA ’93), that there will be no

changes in the home health agency

(HHA) cost limits for cost reporting

periods beginning on or after July 1,

1994, and before July 1, 1996. In

addition, this notice responds to public

comments on the July 8, 1993 notice

with comment period, which originally

set forth the HHA cost limits for cost

reporting periods beginning on or after

July 1, 1993, and on the January 6, 1994

notice with comment period (59 FR

760), which announced the elimination

of the hospital based add-on effective

for cost reporting periods beginning on

or after October 1, 1993.

DATES: Effective date: The revised

schedule of limits on HHA costs set

forth in this notice is effective for cost

reporting periods beginning on or after

July 1, 1993.

The OBRA ’93 provision providing

that there be no changes in the HHA

cost limits for cost reporting periods

beginning on or after July 1, 1994, and

before July 1, 1996, as set forth in this

notice, is effective for cost reporting

periods beginning on or after July 1,

1994.

Comment date: Written comments

will be considered if we receive them at

the appropriate address, as provided

below, no later than 5:00 p.m. on April

17, 1995.

ADDRESSES: Mail written comments (1

original and 3 copies) to the following

address: Health Care Financing

Administration, Department of Health

and Human Services, Attention: BPD–

793–NC, P.O. Box 7571, Baltimore

Maryland 21207–0517.

If you prefer, you may deliver your

comments (1 original and 3 copies) to

one of the following addresses: Room

309–G, Hubert H. Humphrey Building,

200 Independence Ave., SW.,

Washington DC 20201, or Room 132,

East High Rise Building, 6325 Security

Boulevard, Baltimore Maryland 21207.

Because of staffing and resource

limitations, we cannot accept comments

by facsimile (FAX) transmission. In

commenting, please refer to file code

BPD–793–NC. Comments received

timely will be available for public

inspection as they are received,

beginning approximately 3 weeks after

publication of a document, in Room

309–G of the Department’s offices at 200

Independence Avenue, SW, Washington

DC, on Monday through Friday of each

week from 8:30 a.m. to 5 p.m. (phone:

(202) 690–7890).

Copies: To order copies of the Federal

Register containing this document, send

your request to: New Orders,

Superintendent of Documents, P.O. Box

371954, Pittsburgh, PA 15250–7954.

Specify the date of the issue requested

and enclose a check or money order

payable to the Superintendent of

Documents, or enclose your Visa or

Master Card number and expiration

date. Credit card orders can also be

placed by calling the order desk at (202)

783–3238 or by faxing to (202) 512–

2250. The cost for each copy is $8.00.

As an alternative, you can view and

photocopy the Federal Register

document at most libraries designated

as Federal Depository Libraries and at

many other public and academic

libraries throughout the country that

receive the Federal Register.

FOR FURTHER INFORMATION CONTACT:

Michael Bussacca, (410) 966–4602.

SUPPLEMENTARY INFORMATION:

I. Background

A. History

Section 1861(v)(1)(A) of the Social

Security Act (the Act) authorizes the

Secretary to set limits on allowable costs

incurred by a provider of services for

which payment may be made under the

Medicare program. These limits are

based on estimates of the costs

necessary for the efficient delivery of

needed health services. Under this
8390 Federal Register / Vol. 60, No. 30 / Tuesday, February 14, 1995 / Notices

authority, we have maintained limits on

home health agency (HHA) per-visit

costs since 1979. The limits may be

applied to direct and indirect overall

costs or to the costs incurred for specific

items or services furnished by the

provider. Implementing regulations

appear at 42 CFR 413.30. Additional

statutory provisions governing the limits

applicable to HHAs are contained at

section 1861(v)(1)(L) of the Act. Section

1861(v)(1)(L)(i) of the Act specifies that

the cost limits are not to exceed 112

percent of the mean of the labor-related

and nonlabor per-visit costs for

freestanding HHAs. For cost reporting

periods beginning before October 1,

1993, section 1861(v)(1)(L)(ii) of the Act

requires that the Secretary make an

adjustment to the cost limits for the

administrative and general (A&G) costs

of hospital-based HHAs. Section

1861(v)(1)(L)(iii) of the Act requires that

the Secretary establish HHA cost limits

on an annual basis for cost reporting

periods beginning on or after July 1 of

each year.

Accordingly, we published a notice

with comment period that appeared in

the July 8, 1993, issue of the Federal

Register (58 FR 36748), which set forth

a schedule of limits on HHA costs for

cost reporting periods beginning on or

after July 1, 1993. The limits were

computed using the actual cost per-visit

data from cost reporting periods ending

on or after June 30, 1989, and before

May 31, 1991, and were adjusted by the

latest estimates in the ‘‘market basket’’

index to reflect changes in the price of

goods and services furnished by HHAs.

B. Omnibus Budget Reconciliation Act

of 1993

On August 10, 1993, the Omnibus

Budget Reconciliation Act of 1993

(OBRA ’93) (Public Law 103–66) was

enacted. Section 13564(a) of OBRA ’93

amended section 1861(v)(1)(L)(iii) of the

Act to provide that there be no changes

in the HHA per-visit cost limits (except

as may be necessary to take into account

the elimination of the A&G add-on for

hospital-based HHAs) for cost reporting

periods beginning on or after July 1,

1994, and before July 1, 1996. In

addition, section 13564(b) of OBRA ’93

amended section 1861(v)(1)(L)(ii) of the

Act to require that, effective for cost

reporting periods beginning on or after

October 1, 1993, we no longer include

a payment adjustment for A&G costs of

hospital-based HHAs in computing the

HHA limits. The A&G per-visit add-on

for hospital-based HHAs had been

applied since 1980. Under this

provision, hospital-based HHAs and

freestanding HHAs will be treated

identically for payment purposes.

On January 6, 1994, we published a

notice with comment period in the

Federal Register to announce the

elimination of the A&G add-on for

hospital-based HHAs (59 FR 760). In

that notice, we stated that in computing

a hospital-based HHA’s cost limits for

cost reporting periods beginning on or

after October 1, 1993, the A&G add-on

amounts that were to apply, as set forth

in Table II of the July 8, 1993 notice (58

FR 36753), will not be used. We also

stated that we would publish a separate

Federal Register notice to explain the

effects of the requirement under section

13564(a) of OBRA ’93 that there be no

changes in the per-visit cost limits for

home health services for cost reporting

periods beginning on or after July 1,

1994 and before July 1, 1996.

II. Discussion of Public Comments

A. Response to Public Comments

Received On the July 8, 1993 Notice

With Comment Period

We received 28 items of timely

correspondence on our HHA cost limits

notice issued in the Federal Register on

July 8, 1993 (58 FR 36748). A discussion

of the comments we received on that

notice and our responses to those

comments is set forth below.

1. Cost Limits

Comment: Many commenters stated

that the per-discipline cost limits for

skilled nursing and home health aides

are inadequate. They believe that the

cost limits are arbitrary and not at the

level required by law. In addition, two

commenters suggested that the limits

effective July 1, 1993 should be phased

in.

Response: Section 1861(v)(1)(L) of the

Act governs the methodology for

computing the HHA limits. As noted in

section I.A of this notice, section

1861(v)(1)(L)(i) of the Act specifies that

the HHA per-visit cost limits are not to

exceed 112 percent of the mean of the

labor-related and nonlabor per-visit

costs for freestanding HHAs. Section

1861(v)(1)(L)(iii) of the Act requires that

we establish cost limits on an annual

basis for cost reporting periods

beginning on or after July 1 of each year

(except for cost reporting periods

beginning on or after July 1, 1994, and

before July 1, 1996) and that we use the

current hospital wage index to calculate

the limits.

Thus, in calculating the limits, we use

actual cost-per-visit data from the latest

available settled Medicare cost reports.

From those data, we compute an average

per-visit cost for each Medicare covered

home health service. The labor portion

of the average per-visit cost is adjusted,

using the current hospital wage index,

to account for variations in area wage

levels. We then apply a statistically

valid methodology for eliminating

outlier costs to the average per-visit

costs for each service. The resulting

average per-visit costs are increased by

112 percent, the maximum the statute

allows. We believe the methodology

used to calculate the cost limits

correctly implements the statute and

results in a statistically valid national

average of the costs estimated to be

necessary in the efficient delivery of

needed home health services under the

Medicare program.

In summary, the implementation of

the schedule of limits set forth in our

July 8, 1993 notice and the methodology

for developing the limits are in full

compliance with statutory directives. In

developing these limits, we have made

no changes, beyond those directly

required by OBRA ’93, in the

methodology used in setting the limits

effective July 1, 1991 and July 1, 1992.

Finally, the statute does not provide for

a phase-in of the limits.

2. Database

Comment: Several commenters

questioned the database used to develop

the cost limits. Some commenters raised

concerns about the possible omission of

providers from California. Others

suggested that the provider database

used to develop the limits was not

representative because HCFA relies only

on settled cost reports to compute the

HHA cost limits.

Response: The data used in the

calculations of the cost limits effective

July 1, 1993, were actual cost per-visit

data extracted from settled Medicare

cost reports, for cost reporting periods

ending on or after June 30, 1989, and

before May 31, 1991. This resulted in a

database of 2602 freestanding agencies

located throughout the country. Due to

concerns with under-representation of

HHAs, we reviewed the Provider of

Services (POS) file to determine the

number of HHAs that were Medicarecertified as of November, 1992 (the cutoff date of the HHA database used to

develop the HHA cost limits effective

for cost reporting periods beginning on

or after July 1, 1993). Our review

showed that the POS file contained all

HHA providers of service, including

terminated providers, existing

providers, and new providers. However,

the POS file does not indicate whether

a HHA needs to file a cost report, or if

a cost report is due from an HHA.

Accordingly, we extended our review.

We instructed the nine regional home

health intermediaries (RHHIs) servicing

the freestanding HHAs to review their
Federal Register / Vol. 60, No. 30 / Tuesday, February 14, 1995 / Notices 8391

files for the time period of our data

collection (before November 1992) to

determine if any providers had been

omitted erroneously when the

intermediaries filed their cost report

data for the HHA database. The RHHIs

identified 309 freestanding ‘‘missing’’

providers. Our review of the original

database showed that it did not include

data from Blue Cross and Blue Shield of

California. All ‘‘missing’’ providers’ cost

data were entered into the database and

were subject to an extensive edit process

to validate the data. In addition, we

reexamined the entire database to

identify duplicates and as-submitted

cost reports. This examination resulted

in elimination of 120 duplicate reports

from freestanding HHAs and the

elimination of 100 hospital-based assubmitted cost reports. The revised

database consists of 2911 freestanding

providers.

The following table shows the effects

of the revised database on the perdiscipline cost limits for Metropolitan

Statistical Area (MSA) and non-MSA

HHAs published in our July 8, 1993

notice. See section IV of this notice for

a revised table of limits effective for cost

reporting periods beginning on or after

July 1, 1993, and before July 1, 1994.

EFFECT ON PER-VISIT COST LIMITS

FOR MSA AND NON-MSA HHAS

Type of visit

Effect

on limits

for MSA

HHAs

Effect

on limits

for nonMSA

HHAs

Skilled nursing care ...... $+0.72 $+0.75

Physical therapy ........... ¥1.59 ¥0.02

Speech pathology ......... ¥1.50 +0.02

Occupational therapy .... ¥1.20 +0.54

Medical social services . +0.06 ¥1.00

Home health aide ......... +0.54 +0.26

The following table shows the effects

of the revised database on the per-visit

hospital-based add-on for MSA and

non-MSA HHAs published in our July 8,

1993 notice. See section IV of this notice

for a revised table of add-on amounts for

hospital-based HHAs with cost

reporting periods beginning on or after

July 1, 1993, and before October 1, 1993.

EFFECT ON PER-VISIT ADD-ON FOR

MSA AND NON-MSA HHAS

Type of visit

Effect

on hospitalbased

add-on

for MSA

HHAs

Effect

on hospitalbased

add-on

for nonMSA

HHAs

Skilled nursing care ...... $+0.03 $+0.57

Physical therapy ........... ¥0.22 +0.22

Speech pathology ......... ¥0.07 +0.51

Occupational therapy .... ¥0.20 +1.03

Medical social services . ¥1.14 +0.16

Home health aide ......... +0.03 +0.25

We recognize that the conversion to a

limited number of fiscal intermediaries

and the lack of a internal HCFA system

to track settled cost reports for HHAs

resulted in missing providers. In the

future, HCFA will request that each of

the nine regional intermediaries submit

a list of all HHAs that it is servicing at

the time of data collection. Upon

collecting the data, HCFA will crosscheck the HHAs included in the

database with the lists submitted by the

intermediaries.

Concerning the comment on the use

of settled cost reports, all of the RHHIs

met the Contractor Performance

Evaluation (CPEP) standard for settling

cost reports timely for FY 1991/1992.

For example, in FY 1992, 90 percent of

freestanding HHA cost reports were

settled timely by the RHHIs and would

be available to be included in HCFA’s

database. Thus, the use of settled cost

reports does not affect the representative

nature of the database.

Comment: Some commenters believe

that the conversion to a limited number

of intermediaries that specialize in

handling home health claims and the

exclusive use of settled cost reports in

the database invalidate the rationale for

excluding certain outliers from the

database as a first step, before

proceeding with the calculation of the

cost limits. One commenter raised a

series of specific questions about the

outlier exclusion process, including

what constitutes an outlier, how many

agencies are classified as outliers, and

whether all of an HHA’s costs are

excluded if the agency has a single

outlier discipline?

Response: The use of settled cost

report data does not eliminate the need

to exclude outliers from the database.

Outliers are aberrant costs; these costs

are not representative of industry

norms. As in previous schedules of

HHA cost limits, the elimination of cost

per-visit outliers continues to be

necessary in developing the limits

because the per-discipline cost data in

our database are extracted from actual

cost reports. Although these cost reports

have been settled, the settlement

process is designed to ensure that cost

report data reflect actual costs

associated with covered visits; it does

not assess whether the actual costs are

reasonable.

The elimination of outliers is on a

per-discipline basis. That is, we

eliminate costs associated with a

specific discipline that are statistical

outliers. Based on our longstanding

policy, we consider outliers to be those

costs that are two standard deviations or

more from the mean. Therefore, the high

outliers, as well as the low outliers, are

eliminated. All other per-discipline

costs would be included in the

computation of the per-discipline limits.

In the table below we have listed the

range of high and low per-visit costs for

each discipline for both the labor and

the nonlabor portions for both MSA

limits and non-MSA limits. Only pervisit costs outside these ranges are

considered outliers. We believe that

using costs beyond these ranges, that is,

outliers, to develop the per-visit limits

subverts the statistical validity of the

national average of estimated costs.

HOME HEALTH AGENCY COST LIMITS OUTLIERS LABOR AND NONLABOR PORTIONS HIGHS AND LOWS

Urban Labor low Labor high Nonlabor low Nonlabor high

Skilled nursing care .......................................................................................... $33.85 $131.24 $6.08 $36.06

Physical therapy ............................................................................................... 33.02 132.78 5.37 31.69

Speech pathology ............................................................................................. 31.59 141.76 6.05 32.45

Occupational therapy ....................................................................................... 29.85 139.01 6.19 35.88

Medical social services .................................................................................... 31.43 252.36 6.09 58.58

Home health aide ............................................................................................. 16.16 75.30 2.87 19.21

Rural

Skilled nursing care .......................................................................................... 39.98 141.46 4.74 29.15
8392 Federal Register / Vol. 60, No. 30 / Tuesday, February 14, 1995 / Notices

HOME HEALTH AGENCY COST LIMITS OUTLIERS LABOR AND NONLABOR PORTIONS HIGHS AND LOWS—Continued

Urban Labor low Labor high Nonlabor low Nonlabor high

Physical therapy ............................................................................................... 41.77 147.54 6.69 28.34

Speech pathology ............................................................................................. 40.28 160.19 7.36 37.65

Occupational therapy ....................................................................................... 35.69 161.74 6.22 30.35

Medical social services .................................................................................... 36.42 350.59 6.85 62.15

Home health aide ............................................................................................. 16.18 72.55 2.52 17.07

Comment: Two commenters

recommended that we use data from

hospital-based agencies in the

calculation of the limits. The

commenters believe that the calculation

of the limits using only freestanding

facilities does not reflect the higher

costs associated with hospital-based

HHAs.

Response: Section 1861(v)(1)(L)(i) of

the Act specifies that the Secretary is to

establish a single schedule of HHA cost

limits based on the cost experience of

freestanding agencies. We have no

discretion to include hospital-based

providers in the calculation of the HHA

limits.

Comment: A commenter suggested

that the use of settled cost reports

ignores the higher claims presented

before the Provider Reimbursement

Review Board (PRRB) and that these

claims should be included in the

database for calculation of the HHA cost

limits.

Response: The use of settled cost

reports in developing the HHA cost

limits was established for cost reporting

periods beginning on or after July 1,

1992 (see 57 FR 29411). Before July 1,

1992, HHA databases included data

from both settled and as-submitted cost

reports. We were able to begin using

settled cost report data as a result of

revised CPEP standards that required

Medicare fiscal intermediaries to settle

the HHA cost reports sooner than was

required under former standards.

Consequently, as explained in our July

1, 1992 notice with comment period,

settled data are available much sooner

than in previous cost reporting periods,

and we believe the data accurately

reflect current conditions in the health

care industry. The use of settled cost

reports allows us to eliminate misstated

data including nonallowable costs and

noncovered visits that inevitably result

from using as-submitted cost reports.

(See 57 FR 29410.)

Providers that file an appeal before

the PRRB must have received a Notice

of Program Reimbursement for the fiscal

year in question, before filing the

appeal. During the cost reporting

periods ending on or after June 30, 1989,

and before May 31, 1991, on an annual

basis, fewer than 2 percent of certified

HHAs submitted appeals to the PRRB. If

an appeal was decided before we

develop the annual HHA per-visit cost

limits, the final data would be entered

into the database. In those cases in

which the PRRB appeal and

administrative review processes are not

completed until after we have

developed the annual HHA per-visit

cost limits, the settled data from the cost

reports in question would be entered.

Including the adjusted data that may

result from PRRB appeals into the

database would have no significant

effect on the calculation of the cost

limits. Moreover, since the cost limits

are set prospectively, it would be

neither necessary nor administratively

feasible to include adjusted data

resulting from the completed appeals

process into the HHA database used to

develop the annual limits. We note that

the HHA per-visit limits constitute an

estimated national average of costs, and

individual providers are free to pursue

exceptions to these averages where

justified.

Comment: Several commenters stated

that the limits do not reflect the costs

associated with the implementation of

the Omnibus Budget Reconciliation Act

of 1987 (OBRA ’87) (Public Law 100–

203) quality assurance provisions,

specifically, the requirements for home

health aide training and competency

evaluation programs. They asserted that

no additional amount has been added to

the HHA limits to account for these

costs.

Response: Section 1891(a)(3) of the

Act requires HHAs to comply with the

requirements relating to home health

aide training and competency programs,

established by OBRA ’87. The cost-pervisit data used in the calculations of the

cost limits effective on July 1, 1993 were

extracted from settled Medicare cost

reports for periods ending on or after

June 30, 1989, and before May 31, 1991.

We published regulations on August 14,

1989 at 42 CFR § 484.36 to require that

HHAs establish a competency

evaluation program for home health

aides by February 14, 1990 (see 54 FR

33357–33360 and 33372). Therefore, the

costs associated with home health aide

training and competency evaluation

programs are included in this database.

However, if a provider believes that it

has incurred additional costs not

included in the limits relating to home

health aide training and competency

evaluation programs, the provider may

apply for an exception to the cost limits

under the exceptions process outlined

in § 413.30. This situation could be

recognized as an ‘‘extraordinary

circumstance’’ exception under

§ 413.30(f)(2).

Comment: A commenter indicated

that the database from which the HHA

cost limits were developed was not

available for public use when the

regulation was issued on July 8, 1993.

Response: It is our standard practice

to make available to the public the

database used to construct the cost

limits. HCFA’s Bureau of Data

Management and Strategy annually

publishes a ‘‘Public Use Files Catalog’’

that identifies available Medicare/

Medicaid data files and gives

instructions on how to obtain them. The

database used to construct the cost

limits outlined in the July 8, 1993 notice

(that is, Medicare HHA Cycle 11 Data

Set, containing data for cost reporting

periods ending on June 30, 1989, and

before May 31, 1991) was available from

the Bureau of Data Management and

Strategy, HCFA, to the public, on the

date the regulation was published. The

HHA database is available on tape or

diskette for $680. For further

information on obtaining data used in

calculating the HHA cost limits, see

section VI.C of this notice.

3. Market Basket

Comment: Several commenters

believe that the market basket factors

that have been used to update the 1990

cost data seemed to understate home

care market basket cost increases of

between 5 to 7 percent for the 1992–

1993 period and need to be updated for

current weights and revised wage-price

proxies. Specifically, the commenters

believe that the market basket factors

fail to account properly for increases in

the Federal minimum wage, base rates

for workers’ compensation premiums,

reimbursement for mileage, Federal

gasoline tax, computers to submit

claims via electronic media

communications, additional A&G costs,
Federal Register / Vol. 60, No. 30 / Tuesday, February 14, 1995 / Notices 8393

and FICA taxes. They indicated that

there is evidence that the market basket

factors now used to update the cost

limits are too low and that appropriate

alternatives exist and are being used to

make budget projections for the

Administration and Congress.

Response: For the last several years,

the HHA input price index (market

basket) has increased at the fastest rate

of all the market basket indices for the

Medicare program. The increase in the

market basket reflects the weights and

wage-price proxies in the market basket

to capture the special market conditions

for HHA services (such as the shortage

of several categories of licensed health

professionals providing HHA services).

The compensation and nonlabor proxies

used in the market basket include the

effects of taxes on the rates of increase.

Wages and salaries include employer

contributions (payroll taxes) for social

insurance (old age, survivors, disability

and hospital insurance). The wage and

salary category also includes State

unemployment insurance, supplemental

unemployment insurance and

workmen’s compensation. The price

proxies for transportation and utilities

include the relevant sales taxes. Further,

the price proxy for rental and leasing

costs includes the impact of all costs

including property taxes.

The market basket factors used to

update the cost limits are consistent

with, but not identical to, the cost-pervisit budget projections for the

Administration and Congress. The HHA

market basket is designed to measure

price inflation for inputs used to

produce HHA services. It, therefore,

does not take into account changes in

the quantity, mix or intensity of services

per visit. In contrast, the

Administration’s budget projections

take into account the change in mix of

types of visits and the effects of

productivity changes on per-visit costs.

Productivity changes are a major

determinant of cost-per-visit increases

and are specifically excluded from the

HHA market basket.

We believe that it would be

appropriate to do a special study of the

weighting and wage-price proxies for

the HHA market basket. We intend to

begin such a study in the near future,

and we welcome public comments on

data sources for weights and wage-price

proxies.

4. Wage Index

Comment: One commenter stated that

the wage index factors used in the

calculation of the cost limits effective

July 1, 1993 are lower than the July 1,

1992 cost limits in almost all cases. In

addition, the commenter stated that the

Omnibus Budget Reconciliation Act of

1990 (OBRA ’90) mandates use of the

most recent hospital wage index for

calculation of the labor portion of the

cost limits, but it also requires that

aggregate payments to HHAs be budget

neutral. The commenter asserted that

the use of a lower budget neutrality

factor than in the previous schedule of

limits accounted in itself for a reduction

of approximately 2.5 percent in the cost

limits. In addition, the commenter noted

that the budget neutrality factor of 2.7

percent used in calculating the limits

effective July 1, 1993 is a considerable

reduction from the 5.9 percent used in

calculating the limits effective July 1,

1992 and fails to provide

Congressionally mandated budget

neutrality between the 1982 and the

1988 hospital wage indexes.

Response: Section 4207(d)(1) of OBRA

’90 amended section 1861(v)(1)(L)(iii) of

the Act to require that in establishing

the HHA schedule of limits annually on

July 1 of each year we are to use the

current hospital wage index. To lessen

the effect on individual HHAs that

would have been caused by

implementing this requirement

immediately, section 4207(d)(3) of

OBRA ’90 provided for a 2-year

transition period during which we

would use a blend of 1982 and 1988

hospital wage data. As required by

section 1861(v)(1)(L)(iii) of the Act, the

limits effective for cost reporting

periods beginning on or after July 1,

1993, and before July 1, 1994, use the

FY 1993 hospital wage index, that is the

hospital wage index effective for

hospital discharges on or after October

1, 1992, which is based entirely on 1988

wage survey data (see 58 FR 36750).

Thus, although the wage indices used in

calculating the limits effective for cost

reporting periods beginning on or after

July 1, 1993 are in many cases lower

than in the past, they reflect the latest

available actual wages.

Section 4207(d)(2) of OBRA ’90

requires that, in updating the wage

index used for establishing the HHA

limits, aggregate payments will remain

the same as they would have been if the

wage index had not been updated. To

meet this requirement, as explained in

detail in our July 8, 1993 notice with

comment period, we determined that it

was necessary to apply a budget

neutrality adjustment factor of 1.027

(that is, an increase of 2.7 percent) to the

labor-related portion of the cost limits

(58 FR 36748–36749). However, for this

notice, we have recalculated the budget

neutrality adjustment factor and have

determined that a factor of 1.067 should

be applied (that is, a 6.7 percent

increase). The change in the budget

neutrality adjustment is attributable to

the revised limits that have resulted

from our validation of the HHA

database.

Comment: A commenter stated that a

persistent problem in the application of

the cost limits that is made more

difficult by the new limits are that

HHAs, like hospitals, are sometimes

assigned to the ‘‘wrong’’ geographic

area. The commenter suggested that we

consider basing hospital wage indices

on the wage levels paid by neighboring

providers and that wage levels should

be standardized according to some

predefined occupational mix.

Response: Under section 1886(d)(3)(E)

of the Act, the Secretary annually

establishes a wage index for the

purposes of adjusting payment rates for

hospital inpatient services to reflect

wages in a geographic area relative to

the national average. Section

1861(v)(1)(L)(iii) of the Act requires

that, in establishing the HHA schedule

of limits, the Secretary is to use the

current hospital wage index.

Almost from the beginning of the

hospital prospective payment system,

we have received comments from the

hospital industry objecting to the use of

labor market areas based on

Metropolitan Statistical Areas (MSAs)

established by the Office of Management

and Budget to construct the wage index.

The Prospective Payment Assessment

Commission (ProPAC) has also

recommended changes in how the labor

market areas used to construct the

hospital wage index should be defined.

We recognize that, as currently

structured, there are certain

inefficiencies inherent in the MSAbased system. In light of these concerns,

we have continued to examine a variety

of options for revising wage index labor

market areas.

On May 27, 1994, we published a

proposed rule in the Federal Register

(59 FR 27708) that detailed changes to

the hospital prospective payment

system for FY 1995. In the proposed

rule, we discussed in detail issues

raised by commenters concerning a

‘‘nearest neighbor’’ approach to the

wage index, as recommended by

ProPAC, and our research and analysis

on alternative methodologies for

defining labor market areas (59 FR

27724 through 27732). These

alternatives are still under review, and

no final decision has been made at this

time to use a different methodology in

determining future payment rates.

5. Additional Costs/Exceptions

Comment: A commenter suggested

that new HHAs be exempt from the

limits for the first two full year cost
8394 Federal Register / Vol. 60, No. 30 / Tuesday, February 14, 1995 / Notices

reports, citing the exemptions presently

granted for inpatient facilities (non-PPS

hospitals and skilled nursing facilities).

The commenter believes that this

resulted in discrimination against the

establishment of home health care

services when the emphasis of health

care is away from inpatient services and

toward home care.

Response: Prior to 1987, § 413.40(f)(7)

(formerly § 405.460(f)(7)) granted an

exception to the cost limits to minimize

financial barriers to HHAs wanting to

enter Medicare markets for the first

time, especially in underserved areas.

On June 4, 1987, we published a final

rule with comment period (52 FR

21216) indicating that the exception for

newly-established HHAs was

eliminated. As discussed in detail in

that final rule with comment period,

evidence acquired from FY 1980

through FY 1985 indicated a changing

composition of HHAs that suggested

that financing was no longer a

significant obstacle to entering the

market place, and therefore the

exception was rescinded. In fact, while

hospital-based and proprietary agencies

had access to financial resources and

patient populations, nonprofit and freestanding agencies did not. We continue

to believe that an exception for newlyestablished HHAs is not necessary to

encourage the spread of HHAs services.

Moreover, we note that the number of

HHAs servicing Medicare beneficiaries

has increased approximately 28 percent

since 1987, from 5,857 to 7,473 as of

March, 1994.

Comment: Several commenters

indicated that the recruitment and

retention of occupational therapists and

physical therapists, especially in rural

areas, results in increased costs not

incorporated in the HHA cost limits.

In addition, one commenter indicated

that the additional amount of $.18

allowed for the OSHA adjustment to

account for new standards for universal

precautions is not adequate to account

for the actual, necessary and reasonable

cost being incurred by HHAs after May

31, 1991.

The commenters believe that the

failure to reflect these costs fully in the

per-visit limits will reduce access and

quality of care to beneficiaries.

Response: If a provider can quantify

the costs it incurs as a result of

recruiting and retaining occupational

therapists or physical therapists, or an

OSHA add-on amount that exceeds the

allowed $.18, the provider may apply

for an exception to the cost limits under

the exceptions process outlined in

§ 413.30. These situations could be

recognized as an ‘‘extraordinary

circumstances’’ as defined in

§ 413.30(f)(2). The HHA cost limits

effective for cost reporting periods

beginning on or after July 1, 1992 and

on or after July 1, 1993 allow a provider

an adjustment for costs incurred for

OSHA, upon presentation of

documentation to the intermediary to

substantiate the adjustment. If a

provider exceeds the adjustment, an

exception to the cost limits is made only

to the extent that costs are reasonable,

attributable to the circumstances

specified, separately identified by the

provider, and verified by the

intermediary.

Comment: Some of the commenters

believe that filing for a waiver to seek

an exception from the limits is time

consuming, expensive and impractical.

Response: The purpose of establishing

the per-visit limits is to cover the costs

necessary in the efficient delivery of

needed health services. However,

because the limits are not intended to

take into account every cost, we have

established an exceptions process for

situations in which providers incur

additional costs in excess of the cost

limits. Providers may apply for an

exception to the cost limits under the

exceptions process outlined in § 413.30.

We believe that the exceptions process

is a fair and equitable method for HHAs

to substantiate costs exceeding the limit.

6. Administrative Procedure Act

Comment: A commenter stated that

the schedule of cost limits published on

July 8, 1993 (58 FR 36748) is void

because it is a product of retroactive

rulemaking, which is not authorized by

the Social Security Act and is

prohibited by the Administrative

Procedure Act (APA). Specifically, the

rule had an effective date of July 1,

1993, but was not published in the

Federal Register until July 8, 1993.

Further, the commenter stated that the

rule is void because it was issued in

violation of the notice and comment

requirements of the Medicare statute

and APA. The commenter believes that

we did not have ‘‘good cause’’ to waive

publication of a proposed notice and to

waive the 30-day delayed effective date

requirements of the APA. The

commenter stated that HCFA failed to

offer any explanation as to why the rule

could not have been published earlier.

Response: Section 1861(v)(1)(L)(iii) of

the Act requires that the Secretary

update the HHA cost limits on an

annual basis for cost reporting periods

beginning on or after July 1 of each year.

On July 1, 1993, the schedule of limits

on HHA costs per visit, effective for cost

reporting periods beginning on or after

July 1, 1993, was filed with the Office

of the Federal Register and was made

available for public inspection (see 58

FR 36762 for file date). Under 44 U.S.C.

section 1507, the filing of the document

is sufficient to give constructive notice

of the contents of the document to a

person subject to or affected by it.

As explained in our July 8, 1993

notice with comment period, we used

the same methodology to develop the

schedule of limits that was used in

setting the limits published on July 1,

1992. The cost limits were updated to

reflect the cost increases occurring

between the cost reporting periods for

the data contained in the database and

December 31, 1993.

Because the methodology used to

develop the July 1, 1993 schedule of

limits was previously published for

public comment and because we are

required by section 1861(v)(1)(L)(iii) of

the Act to use the current hospital wage

index, which was based on 1988 wage

survey data, we determined that it

would be impractical and unnecessary

to request public comment before we

implemented the cost limits effective for

cost reporting periods beginning on or

after July 1, 1993. Thus, we stated that

it would be contrary to public interest,

and we found good cause to waive

publication of a proposed notice.

In response to the comment on the

waiver of the 30-day delayed effective

date, as we explained in our July 8, 1993

notice with comment period, in order

for HHAs to receive timely the benefits

of the cost limits that are based on the

updated wage index, it was necessary

that the limits be effective for cost

reporting periods beginning on or after

July 1, 1993 as required by section

1861(v)(1)(L)(iii) of the Act (see 58 FR

36762).

B. Response to Public Comments

Received on the January 6, 1994 Notice

With Comment Period

We received 10 items of timely

correspondence on our notice

eliminating payment adjustments for the

A&G costs of hospital-based HHAs. The

comments we received on that notice

and our responses to those comments

are set forth below.

Many of the comments we received

on that notice addressed issues that we

have already addressed in section II.A of

this notice, particularly, the exclusion of

hospital-based agencies from the

database. Since we have already

addressed these comments, we are not

repeating our responses to the

comments here.

1. Elimination of the A&G Add-on

Comment: One commenter agreed that

the A&G add-on should be eliminated.

However, most commenters objected to
Federal Register / Vol. 60, No. 30 / Tuesday, February 14, 1995 / Notices 8395

the elimination of the A&G add-on,

emphasizing that the costs incurred by

hospital-based and freestanding

agencies are different. One commenter

stated that although section 13564 of

OBRA ’93 eliminates the A&G add-on, it

does not preclude the Secretary from

making the adjustments that are

necessary to ensure fair payment to

providers. In addition, another

commenter believes that the elimination

of the add-on should be phased-in.

Response: Section 13564(b) of OBRA

’93 amended section 1861(v)(1)(L)(ii) of

the Act to require that, effective for cost

reporting periods beginning on or after

October 1, 1993, we no longer include

a payment adjustment for the A&G costs

of hospital-based HHAs in computing

the HHA limits. Under this provision,

for cost reporting periods beginning on

or after October 1, 1993, hospital-based

HHAs and free-standing HHAs will be

treated identically for payment

purposes. The statute does not provide

for a phase-in period.

Section 1861(v)(1)(L)(i)(III) of the Act

defines fair payment to HHAs at some

level determined by the Secretary, but

not in excess of 112 percent of the cost

experience of freestanding providers.

Section 1861(v)(1)(L)(ii) of the Act

provides the Secretary with the

authority to provide for exceptions to

the cost limits. Accordingly, if a

provider quantifies and provides an

explanation of costs that exceed the

limits, it may apply for an exception to

the cost limits under the exceptions

process outlined in § 413.30.

2. Reimbursement Methodology

Comment: Two commenters indicated

that the reimbursement methodology for

HHAs should be assessed, including a

review of the Medicare step-down cost

methodology and the use of severity of

illness to determine the cost of care and

length of stay for post-acute versus

community-based referrals. One

commenter stated that the change in

methodology, that is, the elimination of

the hospital-based add-on, imposes a

systematic error in accurately measuring

costs of caring for home health patients.

Another commenter stated that HCFA

should wait for the results of the

Federally funded demonstration

projects that are currently evaluating

home care reimbursement before any

changes are made to the present home

care reimbursement structure. The

commenter stated that the information

we obtain from these studies should be

used to develop an appropriate

industry-wide home care

reimbursement system.

Response: We agree that further study

of the HHA reimbursement system is

desirable. HCFA’s Office of Research

and Demonstrations is presently

conducting a demonstration relating to

prospective payment for HHAs. During

the second phase of this demonstration,

we intend to develop a prototype casemix or severity adjustment to be tested

under the demonstration for possible

use in future payment methodologies. In

addition, HCFA has begun the Medicare

Home Health Initiative, which will

review a variety of issues related to the

home health benefit including those

presented above.

III. Provisions of This Notice With

Comment Period

A. Revised Schedule of Limits

As discussed in section II.A.2 of this

notice, we have identified problems

with the validity of the database used to

calculate the cost limits for cost

reporting periods beginning on or after

July 1, 1993, as set forth in our July 8,

1993 notice. Therefore, we are setting

forth in this notice a revised schedule of

limits on HHA costs that may be paid

under the Medicare program for cost

reporting periods beginning on or after

July 1, 1993. We also are setting forth

revised add-on amounts for hospitalbased HHAs for cost reporting periods

beginning on or after July 1, 1993, and

before October 1, 1993.

Before adopting this approach, which

entails the retroactive application of the

schedule of limits set forth in this

notice, we considered three possible

alternatives for dealing with the

problems with the database used in the

calculation of the cost limits effective

July 1, 1993. One option was to take no

action to revise the limits, in accordance

with the provisions of section 13564(a)

of OBRA ’93, which explicitly prohibit

any changes in the cost limits for HHAs

for cost reporting periods beginning on

or after July 1, 1994, and before July 1,

1996. However, we believe that in

enacting these provisions, Congress

could not have envisioned that there

would be errors in the database that

would necessitate revisions to the

limits. Thus, we do not believe that the

revision of the limits under these

circumstances is inconsistent with the

statute. In addition, we do not believe

that it is appropriate to base payments

to HHAs on limits that are known to be

based on a limited database and are

estimated to result in lower Medicare

payments to HHAs. (See section V of

this notice for a discussion of its

economic impact.)

We also considered applying the

changes to the cost limits prospectively,

that is, effective upon publication of this

notice. Although this option would

avoid the administrative difficulties

associated with implementing revised

limits retroactively for cost reporting

periods beginning on or after July 1,

1993, it still would not conform strictly

to the OBRA ’93 provisions prohibiting

any changes in the cost limits until July

1, 1996. In addition, this option again

would disadvantage HHAs by not

assigning accurate limits effective for

cost reporting periods beginning on or

after July 1, 1993.

Our remaining option was to apply

the changes to the cost limits

retroactively. That is, we would publish

revised limits that would be effective for

cost reporting periods beginning on or

after July 1, 1993, in place of the limits

set forth in our July 8, 1993 notice. The

statute allows us to set the cost limits at

a maximum of 112 percent of the mean

of per-visit costs for freestanding

agencies. As in the past, for the cost

limits applicable to cost reporting

periods beginning on or after July 1,

1993, we set the limits at that

maximum. Because we have identified

errors in the database of costs for

freestanding agencies, we believe that it

is in keeping with the intent of the

statute that these errors be rectified.

Therefore, we believe it is appropriate,

and consistent with the statute, to revise

the limits for cost reporting periods

beginning on or after July 1, 1993, so

that they are based on 112 percent of the

mean of the more accurate database of

freestanding agencies’ per-visit costs.

Also, despite the administrative

difficulties that may arise, we believe

this option is in the best interests of

HHAs. Therefore, we have determined

that revising the limits, effective for cost

reporting periods beginning on or after

July 1, 1993 is the most appropriate

course of action.

Thus, the revised schedule of limits

set forth in Table I of section IV of this

notice replaces the per-visit limits set

forth in our July 8, 1993 notice. As

required by section 13564(a) of OBRA

’93, these limits will remain in effect for

cost reporting periods beginning before

July 1, 1996. In addition, we are setting

forth in Table II of section IV of this

notice revised A&G add-on amounts for

hospital-based HHAs to replace the addon amounts set forth in our July 8, 1993

notice. In accordance with section

1861(v)(1)(L)(ii) of the Act, as amended

by section 13564 of OBRA ’93, the

intermediaries will make an adjustment

for the A&G add-on in computing the

adjusted limits for hospital-based HHAs

with cost reporting periods beginning

on or after July 1, 1993, and before

October 1, 1993.

For the convenience of the reader, we

are republishing Tables IIIa, IIIb, and IV
8396 Federal Register / Vol. 60, No. 30 / Tuesday, February 14, 1995 / Notices

that were published in our July 8, 1993

notice. These tables contain the wage

indices for urban and rural areas and

cost reporting year adjustment factor

and also are presented in section IV of

this notice.

The intermediaries will compute the

adjusted limits using the wage index in

Tables IIIa and IIIb set forth in section

IV of this notice, and will notify each

HHA that they service of its applicable

cost per-visit limits for each type of

service. Each HHA’s aggregate limit

cannot be determined prospectively, but

depends on each HHA’s Medicare visits

for each type of service and actual costs

for the cost reporting period subject to

this notice.

The HHA costs that are subject to the

limits include the cost of medical

supplies routinely furnished in

conjunction with patient care. Durable

medical equipment, orthotics,

prosthetics, and other medical supplies

directly identifiable as services to an

individual patient are excluded from

per-visit costs and are paid without

regard to this schedule of limits. (See

Chapter IV of the Home Health Agency

Manual (HCFA Pub. 11).)

The intermediary will determine the

limit for each HHA by multiplying the

number of Medicare visits for each type

of service furnished by the HHA by the

respective per-visit cost limit. The sum

of these amounts is compared to the

HHA’s total allowable costs.

Example: HHA X, a free-standing agency

located in Richmond VA, furnishes 5,000

covered skilled nursing visits, 2,000 covered

physical therapy visits, and 4,000 covered

home health aide visits to Medicare

beneficiaries during its 12-month cost

reporting period beginning on July 1, 1993.

The Aggregate Cost Limit is

Determined As Follows:

Type of visit Visits Nonlabor

portion

Adjusted

labor portion

Adjusted

limit

Aggregate

limit

Skilled Nursing Care ................................................................................................ 5,000 $16.44 $74.72 $92.32 $461,600

Physical Therapy ...................................................................................................... 2,000 16.52 75.28 92.96 185,920

Home Health Aide .................................................................................................... 4,000 8.33 37.65 46.57 186,280

Total Visits ................................................................................................................ 11,000 ............... ............... ............... ...................

Aggregate Cost Limit ................................................................................................ ............... ............... ............... ............... $833,800

As noted in section III.A of our July

8, 1993 notice, in order to account for

OSHA’s universal precaution

requirements, we also will allow an

additional adjustment to the aggregate

cost limit of $.18 per visit for those

HHAs that incur costs in complying

with these requirements (see 58 FR

36749). An HHA must apply to its

intermediary for the add-on amount.

The agency must demonstrate that it

will exceed its cost limit in order to be

in compliance with the OSHA

mandated requirements. The HHA must

provide the intermediary with adequate

documentation to support the add-on

amount.

Before the limits are applied during

settlement of the cost report, the HHA’s

actual costs are reduced by the amount

of individual items of cost (for example,

administrative compensation and

contract services) that are found to be

excessive under the Medicare

reasonable cost principles of provider

payment. That is, the intermediary

reviews the various reported costs,

taking into account all Medicare

payment principles (for example, the

cost guidelines for physical therapy

furnished under arrangement (see

§ 413.106) and the limitation on costs

that are substantially out of line with

those of comparable HHAs (see

§ 413.9)).

B. No Changes in the Cost Limits

As discussed in section I.B of this

notice, section 13564(a) of OBRA ’93

amended section 1861(v)(1)(L)(iii) of the

Act to provide that there be no changes

in the HHA per-visit cost limits (except

as may be necessary to take into account

the elimination of the A&G add-on for

hospital-based HHAs) for cost reporting

periods beginning on or after July 1,

1994, and before July 1, 1996. The effect

of this provision is that a HHA’s latest

per-discipline cost limit for a period

beginning on or after July 1, 1993, and

before July 1, 1994, as calculated under

this notice, without regard to

subsequent adjustments under section

1861(v)(1)(L)(ii) of the Act for

exceptions, will remain in effect until

its cost reporting period beginning on or

after July 1, 1996. As explained in our

January 6, 1994 notice with comment

period, section 13564(b) of OBRA ’93

eliminated the A&G add-on for hospitalbased HHAs. Accordingly, there will be

no changes, besides those due to the

elimination of the A&G add-on, to a

HHA’s cost limit for cost reporting

periods beginning on or after July 1,

1994, and before July 1, 1996, to account

for inflation, changes to the wage index

or to MSA designations. Thus, in

computing a provider’s cost limit for

cost reporting periods beginning on or

after July 1, 1994, and before July 1,

1996, the cost reporting period

adjustment factors that were to apply for

cost reporting periods beginning on or

after July 1, 1994, will not be used. (In

our July 8, 1993 notice with comment

period, we specified that if we did not

publish new limits to be effective on

July 1, 1994, the limits effective July 1,

1993 would continue in effect, but the

last cost reporting year adjustment

factor in Table IV would be multiplied

by an inflation factor once for each

month between June 1, 1994, and the

month in which the cost reporting

period begins, until a new schedule of

limits or other provision is issued (58

FR 36760). In accordance with section

13564(a) of OBRA ’93, the inflation

factor will not be used for cost reporting

periods beginning on or after July 1,

1994, and before July 1, 1996.) The

revised schedule of per-visit limits set

forth in Table I of section IV of this

notice, which replaces the schedule of

limits set forth in our July 8, 1993

notice, will be used to compute the

limits. Revised Table II will be used to

calculate the A&G add-on, when

applicable. The wage indices in Tables

IIIa and IIIb that were originally

published in our July 8, 1993 notice and

are republished in section IV of this

notice will continue to be used to

compute the limits.

In the example below, a freestanding

HHA in Dallas, Texas has a cost

reporting period beginning date of

January 1, 1994. As calculated under

this notice, its cost limit for the 12-

month period beginning January 1,

1994, for occupational therapy is

$96.13. Under the provisions of this

notice, the cost limit of $96.13 will

remain in effect for its 12-month cost

reporting periods beginning January 1,

1995, and January 1, 1996. As explained

above, the cost reporting period

adjustment factors that would have been

used under the July 8, 1993 notice with

comment period for calculating the

limits for the HHA’s new cost reporting

periods beginning January 1, 1995, and

January 1, 1996, are not used.
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Accordingly, the provider in this

example will not have any change in its

cost limit until its cost reporting period

beginning January 1, 1997.

Example: Calculation of Adjusted Limit for

Occupational Therapy for a Freestanding

HHA Located in Dallas, Texas: Computation

of Revised Limit for Occupational Therapy:

Labor Related Component ....................................................................................................................................... $74.97 (Table I)

Wage Index .............................................................................................................................................................. ×0.9599 (Table IIIa)

Labor Portion ........................................................................................................................................................... 71.96

Special Labor Adjustment for Budget Neutrality .................................................................................................. ×1.067

Adjusted Labor Component .................................................................................................................................... 76.79

Nonlabor-Related Component ................................................................................................................................. +16.78 (Table I)

OSHA Per Diem Add-On ........................................................................................................................................ +.18

Adjusted Occupational Therapy Limit .................................................................................................................. 93.75

Cost Reporting Period Adjustment Factor (January 1, 1994) ................................................................................ ×1.0254 (Table IV)

Inflation Adjusted Limit (Limit in Effect for January 1, 1994, January 1, 1995, and January 1, 1996) ............. 96.13

As noted above, for cost reporting

periods beginning on or after July 1,

1994, but before July 1, 1996, a

freestanding HHA’s cost limit will be its

latest per-discipline cost limit for the

period beginning on or after July 1,

1993, and before July 1, 1994, as

calculated under this notice and

without regard to any subsequent

adjustments, such as an exception to the

limit. Thus, if the HHA in the above

example received an exception to its

cost limit for its cost reporting period

beginning January 1, 1993, its cost limit

for the cost reporting period beginning

January 1, 1994, would not include the

exception amount for the previous

period. To receive an exception or other

adjustment to its cost limit, the HHA

would need to submit a request to its

fiscal intermediary in accordance with

the procedures set forth in § 413.30 of

our regulations.

As explained in detail in our January

6, 1994 notice with comment period, a

hospital-based HHA’s cost limit is

computed in an identical manner (59 FR

761) to the example above, since the

A&G add-on for hospital-based HHAs is

no longer applicable for cost reporting

periods beginning on or after October 1,

1993.

C. Periods Other Than 12 Months

The above methodology applies to

providers with cost reporting periods of

12 months in duration. If a HHA’s cost

reporting period is not 12 months in

duration, a special adjustment factor is

calculated. This is necessary because

inflation projections are computed to

the midpoint of a cost reporting period,

and the adjustment factors in Table IV

(58 FR 36760) are based on 12-month

reporting periods. For cost reporting

periods of other than 12 months, the

calculation must be made based on the

midpoint of the specific cost reporting

period. The HHA’s intermediary obtains

this adjustment factor from HCFA

central office. This methodology results

in a different cost limit than if a 12-

month adjustment factor were used.

However, since the provisions of OBRA

’93 require no changes in the cost limit

on or after July 1, 1994, the limit

calculated with the special adjustment

factor will remain in place for

subsequent cost reporting periods

beginning before July 1, 1996.

D. Providers Entering the Medicare

Program

For providers entering the Medicare

program on or after July 1, 1994, and

before July 1, 1996, the applicable cost

limit will be the cost limit for the

identical period beginning on or after

July 1, 1993, through June 30, 1994.

(The only exception to this policy is

that, as a result of the elimination of the

A&G add-on for hospital-based HHAs

effective for cost reporting periods

beginning on or after October 1, 1993,

the A&G add-on amount is not included

in the cost limit calculation for hospitalbased HHAs that enter the program.) For

example, if a provider enters the

Medicare program on October 1, 1994,

with a 12-month cost reporting period,

its cost limit will be determined in the

same manner as a cost limit for a period

beginning October 1, 1993, and ending

September 30, 1994. If the provider’s

cost reporting period is a short period,

for example, a period beginning October

1, 1994, and ending December 31, 1994,

the provider’s cost limit will be

determined in the same manner as a

cost limit for a period beginning October

1, 1993, and ending December 31, 1993.

In addition, whether the first period is

a full 12-month period or a period other

than 12 months, the cost limit

determined for the first period will

remain in effect until the provider’s first

cost reporting period beginning on or

after July 1, 1996.

E. Next Update of Limits

Before the enactment of OBRA ’93,

section 1861(v)(1)(L)(iii) of the Act

required that the HHA per-discipline

cost limits be updated on July 1, 1994,

and every year thereafter. Section

13564(a)(2) of OBRA ’93 amended that

section of the Act to delay the next

update until July 1, 1996, and every year

thereafter. Accordingly, there will be no

changes to the HHA per-discipline cost

limits effective under this notice for cost

reporting periods beginning on or after

July 1, 1993 for inflation, changes in the

wage index, or geographic designation

until July 1, 1996.

F. Adjustments to the Per-Visit Cost

Limits

Section 1861(v)(1)(L)(ii) of the Act

provides for appropriate adjustments to

the HHA per-discipline cost limits.

These adjustments are set forth at

§ 413.30(f) and include: exceptions to

the limits for atypical services and

extraordinary circumstances; and other

provisions. Section 13564(a)(1) of OBRA

’93 mandates that the effect of allowing

no changes in the HHA per-visit cost

limits for cost reporting periods

beginning on or after July 1, 1994, and

before July 1, 1996, not be considered in

making adjustments to the per-visit cost

limits under the exceptions process.

Therefore, effective for cost reporting

periods beginning on or after July 1,

1994, and before July 1, 1996, a provider

may request an exception only for costs

incurred above the amount that the limit

would have been had the OBRA ’93

provisions set forth in this notice

regarding no changes in the cost limits

not been enacted. Accordingly, for the

purpose of determining the amount of

an exception to the HHA per-discipline

cost limits under the regulations at
8398 Federal Register / Vol. 60, No. 30 / Tuesday, February 14, 1995 / Notices

§ 413.30(f), the difference between the

amount of a provider’s cost limit as

determined by the provisions set forth

in this notice, and the amount that a

provider’s cost limit would have been

under this notice had the OBRA ’93

provisions requiring no changes in the

cost limits not been enacted, is not

subject to an exception to the perdiscipline cost limits. We note that this

provision does not apply to the A&G

add-on for hospital-based HHAs. That

is, for cost reporting periods beginning

on or after October 1, 1993, the A&G

add-on for hospital-based HHAs will not

be used in computing the amount that

the hospital-based cost limit would have

been had the OBRA ’93 provisions

requiring no changes in the limits not

been enacted.

The example below demonstrates the

computation to determine the amount

not subject to an exception under the

provisions set forth in this notice. The

provider’s cost limit for occupational

therapy is computed for the cost

reporting period beginning January 1,

1994, in accordance with the provisions

set forth in this notice, and this limit

remains in effect until the cost reporting

period beginning January 1, 1996. In the

example, the provider has requested an

exception to its limit for the period

beginning January 1, 1995. Again, we

calculate what the limit would have

been had the OBRA ’93 provisions

requiring no changes in the limits not

been enacted. The difference between

the actual limit and the amount the

limit would have been ($5.14) is the

amount not subject to an exception.

Example: Calculation of Amount Not

Subject to an Exception to the Limits for

Occupational Therapy for a Freestanding

HHA Located in Dallas, Texas

Labor Related Component ....................................................................................................................................... $74.97 (Table I)

Wage Index .............................................................................................................................................................. ×0.9599 (Table IIIa)

Labor Portion ........................................................................................................................................................... $71.96

Special Labor Adjustment for Budget Neutrality .................................................................................................. ×1.067

Adjusted Labor Component .................................................................................................................................... $76.79

Nonlabor-Related Component ................................................................................................................................. +16.78 (Table I)

OSHA Per Diem Add-On ........................................................................................................................................ +.18

Limit Prior to Inflation Adjustment ....................................................................................................................... $93.75

Cost Reporting Period Adjustment Factor ............................................................................................................. ×1.0254 (Table IV)

(January 1, 1994)

Inflation Adjusted Limit (Limit in Effect for January 1, 1994, January 1, 1995, and January 1, 1996) ............. $96.13

Cost Reporting Period Adjustment Factor (January 1, 1995 for Exception Purposes Only) .............................. ×1.0803 (Table IV)

(Using the calculation procedures in Table IV for cost reporting periods beginning on January 1, 1995,

1.0475 is multiplied by 1.00442 seven times and the resulting factor equals 1.0803.) (1.0475×

(1.00442)7=1.0803).

Inflation Adjusted Limit (January 1, 1994 for Exception Purposes Only) ........................................................... $101.27

Amount Not Subject to Exception ($101.27¥$96.13=$5.14)

IV. Tables

TABLE I.—PER VISIT LIMITS FOR HOME HEALTH AGENCIES

Type of visit Limit Labor portion

Non-labor

portion 1

MSA (NECMA) Location:

Skilled Nursing Care ............................................................................................................................. $91.16 $74.72 $16.44

Physical Therapy .................................................................................................................................. 91.80 75.28 16.52

Speech Pathology ................................................................................................................................ 93.18 76.30 16.88

Occupational Therapy .......................................................................................................................... 91.75 74.97 16.78

Medical Social Services ....................................................................................................................... 129.62 105.99 23.63

Home Health Aide ................................................................................................................................ 45.98 37.65 8.33

Non-MSA Location:

Skilled Nursing Care ............................................................................................................................. $99.83 $84.88 $14.95

Physical Therapy .................................................................................................................................. 105.55 89.71 15.84

Speech Pathology ................................................................................................................................ 110.45 93.74 16.71

Occupational Therapy .......................................................................................................................... 107.02 90.55 16.47

Medical Social Services ....................................................................................................................... 164.60 139.56 25.04

Home Health Aide ................................................................................................................................ 46.30 39.36 6.94

1 Non-labor portion of limits for HHAs located in Alaska, Hawaii, Puerto Rico, and the Virgin Islands are increased by multiplying them by the

following cost-of-living adjustment factors:

Location Adjustment

factor

Alaska ................................... 1.250

Hawaii:

Oahu ................................. 1.225

Location Adjustment

factor

Kauai ................................. 1.175

Maui, Lanai, and Molokai .. 1.200

Hawaii (Island) .................. 1.150

Location Adjustment

factor

Puerto Rico ........................... 1.100

Virgin Islands ........................ 1.125
Federal Register / Vol. 60, No. 30 / Tuesday, February 14, 1995 / Notices 8399

TABLE II.—ADD-ON AMOUNTS FOR HOSPITAL-BASED HOME HEALTH AGENCIES

Type of visit A&G Addon

Labor portionNon-labor

portion

MSA (NECMA) Location:

Skilled Nursing Care ............................................................................................................................. $12.20 $9.99 $2.21

Physical Therapy .................................................................................................................................. 11.30 9.25 2.05

Speech Pathology ................................................................................................................................ 11.48 9.39 2.09

Occupational Therapy .......................................................................................................................... 11.48 9.35 2.12

Medical Social Services ....................................................................................................................... 17.73 14.42 3.32

Home Health Aide ................................................................................................................................ 5.50 4.50 1.00

Non-MSA Location:

Skilled Nursing Care ............................................................................................................................. $14.99 $12.74 $2.25

Physical Therapy .................................................................................................................................. 16.14 13.73 2.41

Speech Pathology ................................................................................................................................ 16.09 13.67 2.42

Occupational Therapy .......................................................................................................................... 17.00 14.36 2.64

Medical Social Services ....................................................................................................................... 24.20 20.41 3.80

Home Health Aide ................................................................................................................................ 6.01 5.11 0.90

TABLE IIIa.—WAGE INDEX FOR URBAN

AREAS

Urban areas (constituent counties or

county equivalents)

Wage

index

Abilene TX ........................................ 0.9183

Taylor, TX

Aguadilla, PR .................................... 0.4549

Aguada, PR

Aguadilla, PR

Isabella, PR

Moca, PR

Akron, OH ......................................... 0.9455

Portage, OH

Summit, OH

Albany, GA ....................................... 0.8017

Dougherty, GA

Lee, GA

Albany-Schenectady-Troy, NY ......... 0.8887

Albany, NY

Greene, NY

Montgomery, NY

Rensselaer, NY

Saratoga, NY

Schenectady, NY

Albuquerque, NM .............................. 1.0083

Bernalillo, NM

Alexandria, LA .................................. 0.8242

Rapides, LA

Allentown-Bethlehem, PA-NJ ........... 0.9957

Warren, NJ

Carbon, PA

Lehigh, PA

Northampton, PA

Altoona, PA ....................................... 0.9201

Blair, PA

Amarillo, TX ...................................... 0.8703

Potter, TX

Randall, TX

Anaheim-Santa Ana, CA .................. 1.2217

Orange, CA

Anchorage, AK ................................. 1.4119

Anchorage, AK

Anderson, IN ..................................... 0.9544

Madison, IN

Anderson, SC ................................... 0.7229

Anderson, SC

Ann Arbor, MI ................................... 1.1815

Washtenaw, MI

Anniston, AL ..................................... 0.7899

Calhoun, AL

Appleton-Oshkosh-Neenah, WI ........ 0.9142

Calumet, WI

Outagamie, WI

TABLE IIIa.—WAGE INDEX FOR URBAN

AREAS—Continued

Urban areas (constituent counties or

county equivalents)

Wage

index

Winnebago, WI

Arecibo, PR ...................................... 0.3938

Arecibo, PR

Camuy, PR

Hatillo, PR

Quebradillas, PR

Asheville, NC .................................... 0.8760

Buncombe, NC

Athens, GA ....................................... 0.8518

Clarke, GA

Jackson, GA

Madison, GA

Oconee, GA

Atlanta, GA ....................................... 0.9557

Barrow, GA

Butts, GA

Cherokee, GA

Clayton, GA

Cobb, GA

Coweta, GA

De Kalb, GA

Douglas, GA

Fayette, GA

Forsyth, GA

Fulton, GA

Gwinnett, GA

Henry, GA

Newton, GA

Paulding, GA

Rockdale, GA

Spalding, GA

Walton, GA

Atlantic City, NJ ................................ 1.0464

Atlantic , NJ

Cape May, NJ

Augusta, GA-SC ............................... 0.9363

Columbia, GA

McDuffie, GA

Richmond, GA

Aiken, SC

Aurora-Elgin, IL ................................. 0.9626

Kane, IL

Kendall, IL

Austin, TX ......................................... 0.9560

Hays, TX

Travis, TX

Williamson, TX

Bakersfield, CA ................................. 1.0824

Kern, CA

TABLE IIIa.—WAGE INDEX FOR URBAN

AREAS—Continued

Urban areas (constituent counties or

county equivalents)

Wage

index

Baltimore, MD ................................... 1.0115

Anne Arundel, MD

Baltimore, MD

Baltimore City, MD

Carroll, MD

Harford, MD

Howard, MD

Queen Annes, MD

Bangor, ME ....................................... 0.9027

Penobscot, ME

Baton Rouge, LA .............................. 0.9052

Ascension, LA

East Baton Rouge, LA

Livingston, LA

West Baton Rouge, LA

Battle Creek, MI ................................ 0.9480

Calhoun, MI

Beaumont-Port Arthur, TX ................ 0.9599

Hardin, TX

Jefferson, TX

Orange, TX

Beaver County, PA ........................... 1.0124

Beaver, PA

Bellingham, WA ................................ 1.0454

Whatcom, WA

Benton Harbor, MI ............................ 0.8421

Berrien, MI

Bergen-Passaic, NJ .......................... 1.0733

Bergen, NJ

Passaic, NJ

Billings, MT ....................................... 0.9287

Yellowstone, MT

Biloxi-Gulfport, MS ............................ 0.8030

Hancock, MS

Harrison, MS

Binghamton, NY ............................... 0.9223

Broome, NY

Tioga, NY

Birmingham, AL ................................ 0.8734

Blount, AL

Jefferson, AL

Saint Clair, AL

Shelby, AL

Walker, AL

Bismarck, ND .................................... 0.8845

Burleigh, ND

Morton, ND

Bloomington, IN ................................ 0.8604

Monroe, IN
8400 Federal Register / Vol. 60, No. 30 / Tuesday, February 14, 1995 / Notices

TABLE IIIa.—WAGE INDEX FOR URBAN

AREAS—Continued

Urban areas (constituent counties or

county equivalents)

Wage

index

Bloomington-Normal, IL .................... 0.8723

McLean, IL

Boise City, ID .................................... 0.9718

Ada, ID

Boston-Lawrence-Salem-LowellBrockton, MA ................................ 1.1762

Essex, MA

Middlesex, MA

Norfolk, MA

Plymouth, MA

Suffolk, MA

Boulder-Longmont, CO ..................... 1.0155

Boulder, CO

Bradenton, FL ................................... 0.9225

Manatee, FL

Brazoria, TX ...................................... 0.9276

Brazoria, TX

Bremerton, WA ................................. 0.9495

Kitsap, WA

Bridgeport-Stamford-Norwalk-Danbury ............................................... 1.1984

Fairfield, CT

Brownsville-Harlingen, TX ................ 0.8592

Cameron, TX

Bryan-College Station, TX ................ 0.9451

Brazos, TX

Buffalo, NY ....................................... 0.8873

Erie, NY

Burlington, NC .................................. 0.7954

Alamance, NC

Burlington, VT ................................... 0.9320

Chittenden, VT

Grand Isle, VT

Caguas, PR ...................................... 0.4461

Caguas, PR

Gurabo, PR

San Lorenz, PR

Aguas Buenas, PR

Cayey, PR

Cidra, PR

Canton, OH ....................................... 0.8776

Carroll, OH

Stark, OH

Casper, WY ...................................... 0.8855

Natrona, WY

Cedar Rapids, IA .............................. 0.8938

Linn, IA

Champaign-Urbana-Rantoul, IL ........ 0.8710

Champaign, IL

Charleston, SC ................................. 0.8298

Berkeley, SC

Charleston, SC

Dorchester, SC

Charleston, WV ................................ 0.9653

Kanawha, WV

Putnam, WV

Charlotte-Gastonia-Rock Hill, NC-SC 0.9432

Cabarrus, NC

Gaston, NC

Lincoln, NC

Mecklenburg, NC

Rowan, NC

Union, NC

York, SC

Charlottesville, VA ............................ 0.9576

Albermarle, VA

Charlottesville City, VA

Fluvanna, VA

Greene, VA

Chattanooga, TN-GA ........................ 0.9161

TABLE IIIa.—WAGE INDEX FOR URBAN

AREAS—Continued

Urban areas (constituent counties or

county equivalents)

Wage

index

Catoosa, GA

Dade, GA

Walker, GA

Hamilton, TN

Marion, TN

Sequatchie, TN

Cheyenne, WY ................................. 0.7876

Laramie, WY

Chicago, IL ....................................... 1.0475

Cook, IL

Du Page, IL

McHenry, IL

Chico, CA ......................................... 1.0937

Butte, CA

Cincinnati, OH-KY-IN ........................ 0.9972

Dearborn, IN

Boone, KY

Campbell, KY

Kenton, KY

Clermont, OH

Hamilton, OH

Warren, OH

Clarksville-Hopkinsville, TN-KY ........ 0.7352

Christian, KY

Montgomery, TN

Cleveland, OH .................................. 1.0695

Cuyahoga, OH

Geauga, OH

Lake, OH

Medina, OH

Colorado Springs, CO ...................... 0.9777

El Paso, CO

Columbia, MO ................................... 0.9468

Boone, MO

Columbia, SC ................................... 0.8904

Lexington, SC

Richland, SC

Columbus, GA-AL ............................. 0.7452

Russell, AL

Chattanoochee, GA

Muscogee, GA

Columbus, OH .................................. 0.9634

Delaware, OH

Fairfield, OH

Franklin, OH

Licking, OH

Madison, OH

Pickaway, OH

Union, OH

Corpus Christi, TX ............................ 0.8559

Nueces, TX

San Patricio, TX

Cumberland, MD-WV ....................... 0.8155

Allegany, MD

Mineral, WV

Dallas, TX ......................................... 0.9599

Collin, TX

Dallas, TX

Denton, TX

Ellis, TX

Kaufman, TX

Rockwall, TX

Danville, VA ...................................... 0.7476

Danville City, VA

Pittsylvania, VA

Davenport-Rock Island-Moline, IA-IL 0.8640

Scott, IA

Henry, IL

Rock Island, IL

Dayton-Springfield, OH ..................... 0.9686

TABLE IIIa.—WAGE INDEX FOR URBAN

AREAS—Continued

Urban areas (constituent counties or

county equivalents)

Wage

index

Clark, OH

Greene, OH

Miami, OH

Montgomery, OH

Daytona Beach, FL ........................... 0.8907

Volusia, FL

Decatur, AL ....................................... 0.7457

Lawrence, AL

Morgan, AL

Decatur, IL ........................................ 0.8253

Macon, IL

Denver, CO ....................................... 1.0714

Adams, CO

Arapahoe, CO

Denver, CO

Douglas, CO

Jefferson, CO

Des Moines, IA ................................. 0.9225

Dallas, IA

Polk, IA

Warren, IA

Detroit, MI ......................................... 1.0924

Lapeer, MI

Livingston, MI

Macomb, MI

Monroe, MI

Oakland, MI

Saint Clair, MI

Wayne, MI

Dothan, AL ........................................ 0.7524

Dale, AL

Houston, AL

Dubuque, IA ...................................... 0.8341

Dubuque, IA

Duluth, MN-WI .................................. 0.9479

St. Louis, MN

Douglas, WI

Eau Claire, WI .................................. 0.8444

Chippewa, WI

Eau Claire, WI

El Paso, TX ...................................... 0.8679

El Paso, TX

Elkhart-Goshen, IN ........................... 0.8913

Elkhart, IN

Elmira, NY ........................................ 0.8775

Chemung, NY

Enid, OK ........................................... 0.8877

Garfield, OK

Erie, PA ............................................ 0.9118

Erie, PA

Eugene-Springfield, OR .................... 1.0123

Lane, OR

Evansville, IN-KY .............................. 0.9422

Posey, IN

Vanderburgh, IN

Warrick, IN

Henderson, KY

Fargo-Moorhead, ND-MN ................. 0.9668

Clay, MN

Cass, ND

Fayetteville, NC ................................ 0.8262

Cumberland, NC

Fayetteville-Springdale, AR .............. 0.7958

Washington, AR

Flint, MI ............................................. 1.1506

Genesee, MI

Florence, AL ..................................... 0.7648

Colbert, AL

Lauderdale, AL

Florence, SC ..................................... 0.8395
Federal Register / Vol. 60, No. 30 / Tuesday, February 14, 1995 / Notices 8401

TABLE IIIa.—WAGE INDEX FOR URBAN

AREAS—Continued

Urban areas (constituent counties or

county equivalents)

Wage

index

Florence, SC

Fort Collins-Loveland, CO ................ 1.0197

Larimor, CO

Ft Lauderdale-Hollywood-Pompano

Beach, FL ...................................... 1.0314

Broward, FL

Fort Myers-Cape Coral, FL .............. 0.9759

Lee, FL

Fort Pierce, FL .................................. 1.0996

Martin, FL

St. Lucie, FL

Fort Smith, AR-OK ........................... 0.7900

Crawford, AR

Sebastian, AR

Sequoyah, OK

Fort Walton Beach, FL ..................... 0.8881

Okaloosa, FL

Fort Wayne, IN ................................. 0.8967

Allen, IN

De Kalb, IN

Whitley, IN

Forth Worth-Arlington, TX ................ 0.9708

Johnson, TX

Parker, TX

Tarrant, TX

Fresno, CA ....................................... 1.0694

Fresno, CA

Gadsden, AL ..................................... 0.8166

Etowah, AL

Gainesville, FL .................................. 0.8763

Alachua, FL

Bradford, FL

Galveston-Texas City, TX ................ 1.0129

Galveston, TX

Gary-Hammond, IN .......................... 0.9853

Lake, IN

Porter, IN

Glens Falls, NY ................................ 0.9193

Warren, NY

Washington, NY

Grand Forks, ND .............................. 0.9539

Grand Forks, ND

Grand Rapids, MI ............................. 0.9813

Kent, MI

Ottawa, MI

Great Falls, MT ................................. 0.9951

Cascade, MT

Greeley, CO ...................................... 0.9320

Weld, CO

Green Bay, WI .................................. 0.9547

Brown, WI

Greensboro-Winston-Salem-High

Point, NC ....................................... 0.9128

Davidson, NC

Davie, NC

Forsyth, NC

Guilford, NC

Randolph, NC

Stokes, NC

Yadkin, NC

Greenville-Spartanburg, SC ............. 0.8887

Greenville, SC

Pickens, SC

Spartanburg, SC

Hagerstown, MD ............................... 0.9121

Washington, MD

Hamilton-Middletown, OH ................. 0.9347

Butler, OH

Harrisburg-Lebanon-Carlisle, PA ...... 0.9879

Cumberland, PA

TABLE IIIa.—WAGE INDEX FOR URBAN

AREAS—Continued

Urban areas (constituent counties or

county equivalents)

Wage

index

Dauphin, PA

Lebanon, PA

Perry, PA

Hartford-Middletown-New BritainBristol, CT ..................................... 1.1868

Hartford, CT

Middlesex, CT

Tolland, CT

Litchfield, CT

Hickory, NC ...................................... 0.8735

Alexander, NC

Burke, NC

Catawba, NC

Honolulu, HI ...................................... 1.1534

Honolulu, HI

Houma-Thibodaux, LA ...................... 0.7315

Lafourche, LA

Terrebonne, LA

Houston, TX ...................................... 1.0022

Fort Bend, TX

Harris, TX

Liberty, TX

Montgomery, TX

Waller, TX

Huntington-Ashland, WV-KY-OH ...... 0.9400

Boyd, KY

Carter, KY

Greenup, KY

Lawrence, OH

Cabell, WV

Wayne, WV

Huntsville, AL .................................... 0.8799

Madison, AL

Indianapolis, IN ................................. 0.9665

Boone, IN

Hamilton, IN

Hancock, IN

Hendricks, IN

Johnson, IN

Marion, IN

Morgan, IN

Shelby, IN

Iowa City, IA ..................................... 0.9489

Johnson, IA

Jackson, MI ...................................... 0.9625

Jackson, MI

Jackson, MS ..................................... 0.7702

Hinds, MS

Madison, MS

Rankin, MS

Jackson, TN ...................................... 0.7878

Madison, TN

Jacksonville, FL ................................ 0.9122

Clay, FL

Duval, FL

Nassau, FL

St. Johns, FL

Jacksonville, NC ............................... 0.7125

Onslow, NC

Jamestown-Dunkirk, NY ................... 0.7746

Chautaqua, NY

Janesville-Beloit, WI ......................... 0.8432

Rock, WI

Jersey City, NJ ................................. 1.0728

Hudson, NJ

Johnson City-Kingsport-Bristol, TNVA ................................................. 0.8633

Carter, TN

Hawkins, TN

Sullivan, TN

TABLE IIIa.—WAGE INDEX FOR URBAN

AREAS—Continued

Urban areas (constituent counties or

county equivalents)

Wage

index

Unicoi, TN

Washington, TN

Bristol City, VA

Scott, VA

Washington, VA

Johnstown, PA .................................. 0.8827

Cambria, PA

Somerset, PA

Joliet, IL ............................................ 1.0237

Grundy, IL

Will, IL

Joplin, MO ........................................ 0.7925

Jasper, MO

Newton, MO

Kalamazoo, MI .................................. 1.1765

Kalamazoo, MI

Kankakee, IL ..................................... 0.8454

Kankakee, IL

Kansas City, KS-MO ........................ 0.9550

Johnson, KS

Leavenworth, KS

Miami, KS

Wyandotte, KS

Cass, MO

Clay, MO

Jackson, MO

Lafayette, MO

Platte, MO

Ray, MO

Kenosha, WI ..................................... 0.8934

Kenosha, WI

Killeen-Temple, TX ........................... 1.1250

Bell, TX

Coryell, TX

Knoxville, TN .................................... 0.8658

Anderson, TN

Blount, TN

Grainger, TN

Jefferson, TN

Knox, TN

Sevier, TN

Union, TN

Kokomo, IN ....................................... 0.9452

Howard, IN

Tipton, IN

LaCrosse, WI .................................... 0.8920

LaCrosse, WI

Lafayette, LA .................................... 0.8194

Lafayette, LA

St. Martin, LA

Lafayette, IN ..................................... 0.8588

Tippecanoe, IN

Lake Charles, LA .............................. 0.8341

Calcasieu, LA

Lake County, IL ................................ 0.9953

Lake, IL

Lakeland-Winter Haven, FL .............. 0.8409

Polk, FL

Lancaster, PA ................................... 0.9221

Lancaster, PA

Lansing-East Lansing, MI ................. 1.0242

Clinton, MI

Eaton, MI

Ingham, MI

Laredo, TX ........................................ 0.7248

Webb, TX

Las Cruces, NM ................................ 0.7877

Dona Ana, NM

Las Vegas, NV ................................. 1.0588

Clark, NV
8402 Federal Register / Vol. 60, No. 30 / Tuesday, February 14, 1995 / Notices

TABLE IIIa.—WAGE INDEX FOR URBAN

AREAS—Continued

Urban areas (constituent counties or

county equivalents)

Wage

index

Lawrence, KS ................................... 0.8901

Douglas, KS

Lawton, OK ....................................... 0.8354

Comanche, OK

Lewiston-Auburn, ME ....................... 0.9021

Androscoggin, ME

Lexington-Fayette, KY ...................... 0.8565

Bourbon, KY

Clark, KY

Fayette, KY

Jessamine, KY

Scott, KY

Woodford, KY

Lima, OH .......................................... 0.8030

Allen, OH

Auglaize, OH

Lincoln, NE ....................................... 0.8920

Lancaster, NE

Little Rock-North Little Rock, AR ..... 0.8373

Faulkner, AR

Lonoke, AR

Pulaski, AR

Saline, AR

Longview-Marshall, TX ..................... 0.8656

Gregg, TX

Harrison, TX

Lorain-Elyria, OH .............................. 0.8933

Lorain, OH

Los Angeles-Long Beach, CA .......... 1.2308

Los Angeles, CA

Louisville, KY–IN .............................. 0.9291

Clark, IN

Floyd, IN

Harrison, IN

Bullitt, KY

Jefferson, KY

Oldham, KY

Shelby, KY

Lubbock, TX ..................................... 0.8766

Lubbock, TX

Lynchburg, VA .................................. 0.8509

Amherst, VA

Campbell, VA

Lynchburg City, VA

Macon-Warner Robins, GA .............. 0.8768

Bibb, GA

Huston, GA

Jones, GA

Peach, GA

Madison, WI ...................................... 1.0270

Dane, WI

Manchester-Nashua, NH .................. 1.0219

Hillsborough, NH

Merrimack, NH

Mansfield, OH ................................... 0.8358

Richland, OH

Mayaguez, PR .................................. 0.4752

Anasco, PR

Cabo Rojo, PR

Hormigueros, PR

Mayaguez, PR

San German, PR

McAllen-Edinburg-Mission, TX ......... 0.7684

Hidalgo, TX

Medford, OR ..................................... 1.0005

Jackson, OR

Melbourne-Titusville, FL ................... 0.9162

Brevard, FL

Memphis, TN–AR–MS ...................... 0.9023

Crittenden, AR

TABLE IIIa.—WAGE INDEX FOR URBAN

AREAS—Continued

Urban areas (constituent counties or

county equivalents)

Wage

index

De Soto, MS

Shelby, TN

Tipton, TN

Merced, CA ....................................... 1.0270

Merced, CA

Miami-Hialeah, FL ............................ 1.0147

Dade, FL

Middlesex-Somerset-Hunterdon, NJ 1.0903

Hunterdon, NJ

Middlesex, NJ

Somerset, NJ

Midland, TX ...................................... 1.0335

Midland, TX

Milwaukee, WI .................................. 0.9680

Milwaukee, WI

Ozaukee, WI

Washington, WI

Waukesha, WI

Minneapolis-St Paul, MN–WI ........... 1.0774

Anoka, MN

Carver, MN

Chisago, MN

Dakota, MN

Hennepin, MN

Isanti, MN

Ramsey, MN

Scott, MN

Washington, MN

Wright, MN

St. Croix, WI

Mobile, AL ......................................... 0.8454

Baldwin, AL

Mobile, AL

Modesto, CA ..................................... 1.1530

Stanislaus, CA

Monmouth-Ocean, NJ ...................... 1.0058

Monmouth, NJ

Ocean, NJ

Monroe, LA ....................................... 0.7832

Ouachita, LA

Montgomery, AL ............................... 0.7823

Autauga, AL

Elmore, AL

Montgomery, AL

Muncie, IN ........................................ 0.8397

Delaware, IN

Muskegon, MI ................................... 0.9680

Muskegon, MI

Naples, FL ........................................ 1.0282

Collier, FL

Nashville, TN .................................... 0.9360

Cheatham, TN

Davidson, TN

Dickson, TN

Robertson, TN

Rutherford TN

Sumner, TN

Williamson, TN

Wilson, TN

Nassau-Suffolk, NY .......................... 1.3167

Nassau, NY

Suffolk, NY

New Bedford-Fall River-Attleboro,

MA ................................................. 0.9962

Bristol, MA

New Haven-Waterbury-Meriden, CT 1.2046

New Haven, CT

New London, London-Norwich ......... 1.1525

New London, CT

New Orleans, LA .............................. 0.8967

TABLE IIIa.—WAGE INDEX FOR URBAN

AREAS—Continued

Urban areas (constituent counties or

county equivalents)

Wage

index

Jefferson, LA

Orleans, LA

St. Bernard, LA

St. Charles, LA

St. John The Baptist, LA

St. Tammany, LA

New York, NY ................................... 1.3431

Bronx, NY

Kings, NY

New York City, NY

Putnam, NY

Queens, NY

Richmond, NY

Rockland, NY

Westchester, NY

Newark, NJ ....................................... 1.1350

Essex, NJ

Morris, NJ

Sussex, NJ

Union, NJ

Niagara Falls, NY ............................. 0.8350

Niagara, NY

Norfolk-Virginia Beach-Newport

News, VA ...................................... 0.8481

Chesapeake City, VA

Gloucester, VA

Hampton City, VA

James City Co., VA

Newport News City, VA

Norfolk City, VA

Poquoson, VA

Portsmouth City, VA

Suffolk City, VA

Virginia Beach City, VA

Williamsburg City, VA

York, VA

Oakland, CA ..................................... 1.4225

Alameda, CA

Contra Costa, CA

Ocala, FL .......................................... 0.8580

Marion, FL

Odessa, TX ....................................... 1.0835

Ector, TX

Oklahoma City, OK ........................... 0.9195

Canadian, OK

Cleveland, OK

Logan, OK

McClain, OK

Oklahoma, OK

Pottawatomie, OK

Olympia, WA ..................................... 1.0957

Thurston, WA

Omaha, NE-IA .................................. 0.8953

Pottawattamie, IA

Douglas, NE

Sarpy, NE

Washington, NE

Orange County, NY .......................... 0.9815

Orange, NY

Orlando, FL ....................................... 0.9582

Orange, FL

Osceola, FL

Seminole, FL

Owensboro, KY ................................ 0.8082

Daviess, KY

Oxnard-Ventura, CA ......................... 1.2259

Ventura, CA

Panama City, FL ............................... 0.8598

Bay, FL

Parkersburg-Marietta, WV-OH ......... 0.8505
Federal Register / Vol. 60, No. 30 / Tuesday, February 14, 1995 / Notices 8403

TABLE IIIa.—WAGE INDEX FOR URBAN

AREAS—Continued

Urban areas (constituent counties or

county equivalents)

Wage

index

Washington, OH

Wood, WV

Pascagoula, MS ............................... 0.8720

Jackson, MS

Pensacola, FL ................................... 0.8589

Escambia, FL

Santa Rosa, FL

Peoria, IL .......................................... 0.8704

Peoria, IL

Tazewell, IL

Woodford, IL

Philadelphia, PA-NJ .......................... 1.0908

Burlington, NJ

Camden, NJ

Gloucester, NJ

Bucks, PA

Chester, PA

Delaware, PA

Montgomery, PA

Philadelphia, PA

Phoenix, AZ ...................................... 1.0387

Maricopa, AZ

Pine Bluff, AR ................................... 0.7840

Jefferson, AR

Pittsburgh, PA ................................... 1.0087

Allegheny, PA

Fayette, PA

Washington, PA

Westmoreland, PA

Pittsfield, MA ..................................... 1.0739

Berkshire, MA

Ponce, PR ........................................ 0.4583

Juana Diaz, PR

Ponce, PR

Portland, ME ..................................... 0.9254

Cumberland, ME

Sagadahoc, ME

York, ME

Portland, OR ..................................... 1.1529

Clackamas, OR

Multnomah, OR

Washington, OR

Yamhill, OR

Portsmouth-Dover-Rochester, NH .... 1.0039

Rockingham, NH

Strafford, NH

Poughkeepsie, NY ............................ 1.0639

Dutchess, NY

Providence-Pawtucket-Woonsocket,

RI ................................................... 1.0590

Bristol, RI

Kent, RI

Newport, RI

Providence, RI

Washington, RI

Provo-Orem, UT ............................... 1.0189

Utah, UT

Pueblo, CO ....................................... 0.8687

Pueblo, CO

Racine, WI ........................................ 0.8814

Racine, WI

Raleigh-Durham, NC ........................ 0.9448

Durham, NC

Franklin, NC

Orange, NC

Wake, NC

Rapid City, SD .................................. 0.8366

Pennington, SD

Reading, PA ..................................... 0.8778

Berks, PA

TABLE IIIa.—WAGE INDEX FOR URBAN

AREAS—Continued

Urban areas (constituent counties or

county equivalents)

Wage

index

Redding, CA ..................................... 1.0507

Shasta, CA

Reno, NV .......................................... 1.1571

Washoe, NV

Richland-Kennewick, WA ................. 0.9364

Benton, WA

Franklin, WA

Richmond-Petersburg, VA ................ 0.9379

Charles City Co., VA

Chesterfield, VA

Colonial Heights City, VA

Dinwiddie, VA

Goochland, VA

Hanover, VA

Henrico, VA

Hopewell City, VA

New Kent, VA

Petersburg City, VA

Powhatan, VA

Prince George, VA

Richmond City, VA

Riverside-San Bernardino, CA ......... 1.1391

Riverside, CA

San Bernardino, CA

Roanoke, VA .................................... 0.8251

Botetourt, VA

Roanoke, VA

Roanoke City, VA

Salem City, VA

Rochester, MN .................................. 1.0985

Olmsted, MN

Rochester, NY .................................. 0.9671

Livingston, NY

Monroe, NY

Ontario, NY

Orleans, NY

Wayne, NY

Rockford, IL ...................................... 0.9245

Boone, IL

Winnebago, IL

Sacramento, CA ............................... 1.2280

Eldorado, CA

Placer, CA

Sacramento, CA

Yolo, CA

Saginaw-Bay City-Midland, MI ......... 1.0452

Bay, MI

Midland, MI

Saginaw, MI

St. Cloud, MN ................................... 0.9382

Benton, MN

Sherburne, MN

Stearns, MN

St. Joseph, MO ................................. 0.9376

Buchanan, MO

St. Louis, MO-IL ............................... 0.9351

Clinton, IL

Jersey, IL

Madison, IL

Monroe, IL

St. Clair, IL

Franklin, MO

Jefferson, MO

St. Charles, MO

St. Louis, MO

St. Louis City, MO

Sullivan City, MO

Salem, OR ........................................ 1.0403

Marion, OR

Polk, OR

TABLE IIIa.—WAGE INDEX FOR URBAN

AREAS—Continued

Urban areas (constituent counties or

county equivalents)

Wage

index

Salinas-Seaside-Monterey, CA ........ 1.2988

Monterey, CA

Salt Lake City-Ogden, UT ................ 0.9892

Davis, UT

Salt Lake, UT

Weber, UT

San Angelo, TX ................................ 0.8107

Tom Green, TX

San Antonio, TX ............................... 0.8418

Bexar, TX

Comal, TX

Guadalupe, TX

San Diego, CA .................................. 1.2095

San Diego, CA

San Francisco, CA ........................... 1.4480

Marin, CA

San Francisco, CA

San Mateo, CA

San Jose, CA ................................... 1.4840

Santa Clara, CA

San Juan, PR ................................... 0.4967

Barcelona, PR

Bayoman, PR

Canovanas, PR

Carolina, PR

Catano, PR

Corozal, PR

Dorado, PR

Fajardo, PR

Florida, PR

Guaynabo, PR

Humacao, PR

Juncos, PR

Los Piedras, PR

Loiza, PR

Luguillo, PR

Manati, PR

Naranjito, PR

Rio Grande, PR

San Juan, PR

Toa Alta, PR

Toa Baja, PR

Trojillo Alto, PR

Vega Alta, PR

Vega Baja, PR

Santa Barbara-Santa Maria-Lompoc,

CA ................................................. 1.1721

Santa Barbara, CA

Santa Cruz, CA ................................ 1.2733

Santa Cruz, CA

Santa Fe, NM ................................... 0.9102

Los Alamos, NM

Santa Fe, NM

Santa Rosa-Petaluma, CA ............... 1.2926

Sonoma, CA

Sarasota, FL ..................................... 0.9741

Sarasota, FL

Savannah, GA .................................. 0.8294

Chatham, GA

Effingham, GA

Scranton, Wilkes Barre, PA .............. 0.8916

Columbia, PA

Lackawanna, PA

Luzerne, PA

Monroe, PA

Wyoming, PA

Seattle, WA ....................................... 1.0827

King, WA

Snohomish, WA

Sharon, PA ....................................... 0.9024
8404 Federal Register / Vol. 60, No. 30 / Tuesday, February 14, 1995 / Notices

TABLE IIIa.—WAGE INDEX FOR URBAN

AREAS—Continued

Urban areas (constituent counties or

county equivalents)

Wage

index

Mercer, PA

Sheboygan, WI ................................. 0.8836

Sheboygan, WI

Sherman-Denison, TX ...................... 0.9052

Grayson, TX

Shreveport, LA .................................. 0.9262

Bossier, LA

Caddo, LA

Sioux City, IA-NE .............................. 0.8470

Woodbury, IA

Dakota, NE

Sioux Falls, SD ................................. 0.8797

Minnehaha, SD

South Bend-Mishawaka, IN .............. 1.0142

St. Joseph, IN

Spokane, WA .................................... 1.0648

Spokane, WA

Springfield, IL .................................... 0.9258

Menard, IL

Sangamon, IL

Springfield, MO ................................. 0.8050

Christian, MO

Greene, MO

Springfield, MA ................................. 1.0290

Hampden, MA

Hampshire, MA

State College, PA ............................. 0.9861

Centre, PA

Steubenville-Weirton, OH-WV .......... 0.8756

Jefferson, OH

Brooke, WV

Hancock, WV

Stockton, CA ..................................... 1.1566

San Joaquin, CA

Syracuse, NY .................................... 0.9905

Madison, NY

Onondaga, NY

Oswego, NY

Tacoma, WA ..................................... 1.0276

Pierce, WA

Tallahassee, FL ................................ 0.9183

Gadsden, FL

Leon, FL

Tampa-St. Petersburg-Clearwater,

FL .................................................. 0.9225

Hernando, FL

Hillsborough, FL

Pasco, FL

Pinellas, FL

Terre Haute, IN ................................. 0.8791

Clay, IN

Vigo, IN

Texarkana-TX-AR ............................. 0.7860

Miller, AR

Bowie, TX

Toledo, OH ....................................... 1.0160

Fulton, OH

Lucas, OH

Wood, OH

Topeka, KS ....................................... 0.9265

Shawnee, KS

Trenton, NJ ....................................... 1.0094

Mercer, NJ

Tucson, AZ ....................................... 0.9552

Pima, AZ

Tulsa, OK .......................................... 0.8542

Creeks, OK

Osage, OK

Rogers, OK

Tulsa, OK

TABLE IIIa.—WAGE INDEX FOR URBAN

AREAS—Continued

Urban areas (constituent counties or

county equivalents)

Wage

index

Wagoner, OK

Tuscaloosa, AL ................................. 0.8487

Tuscaloosa, AL

Tyler, TX ........................................... 0.9798

Smith, TX

Utica-Rome, NY ................................ 0.8652

Herkimer, NY

Oneida, NY

Vallejo-Fairfield-Napa, CA ................ 1.3150

Napa, CA

Solano, CA

Vancouver, WA ................................. 1.0755

Clark, WA

Victoria, TX ....................................... 0.8958

Victoria, TX

Vineland-Millville-Bridgeton, NJ ........ 0.9720

Cumberland, NJ

Visalia-Tulare-Porterville, CA ........... 1.0351

Tulare, CA

Waco, TX .......................................... 0.7783

McLennan, TX

Washington, DC-MD-VA ................... 1.0928

District of Columbia, DC

Calvert, MD

Charles, MD

Frederick, MD

Montgomery, MD

Prince Georges, MD

Alexandria City, VA

Arlington, VA

Fairfax, VA

Fairfax City, VA

Falls Church City, VA

Loudoun, VA

Manassas City, VA

Manassas Park City, VA

Prince William, VA

Stafford, VA

Waterloo-Cedar Falls, IA .................. 0.8884

Black Hawk, IA

Bremer, IA

Wausau, WI ...................................... 0.9709

Marathon, WI

West Palm Beach-Boca Raton-Delray Beach, FL ............................... 1.0095

Palm Beach, FL

Wheeling, WV-OH ............................ 0.8035

Belmont, OH

Marshall, WV

Ohio, WV

Wichita, KS ....................................... 0.9770

Butler, KS

Harvey, KS

Sedgwick, KS

Wichita Falls, TX .............................. 0.8139

Wichita, TX

Williamsport, PA ............................... 0.8829

Lycoming, PA

Wilmington, DE-NJ-MD .................... 1.0825

New Castle, DE

Cecil, MD

Salem, NJ

Wilmington, NC ................................. 0.8677

New Hanover, NC

Worcester-Fitchburg-Leominster, MA 1.0782

Worcester, MA

Yakima, WA ...................................... 1.0070

Yakima, WA

York, PA ........................................... 0.9008

Adams, PA

TABLE IIIa.—WAGE INDEX FOR URBAN

AREAS—Continued

Urban areas (constituent counties or

county equivalents)

Wage

index

York, PA

Youngstown-Warren, OH ................. 0.9826

Mahoning, OH

Trumbull, OH

Yuba City, CA ................................... 1.0220

Sutter, CA

Yuba, CA

Yuma, AZ .......................................... 0.8850

Yuma, AZ

TABLE IIIB.—WAGE INDEX FOR RURAL

AREAS

Non-urban areas Wage index

ALABAMA ................................. 0.7121

ALASKA .................................... 1.3372

ARIZONA .................................. 0.8724

ARKANSAS .............................. 0.6979

CALIFORNIA ............................ 1.0122

COLORADO ............................. 0.8382

CONNECTICUT ........................ 1.1857

DELAWARE .............................. 0.8537

FLORIDA .................................. 0.8704

GEORGIA ................................. 0.7769

HAWAII ..................................... 0.9579

IDAHO ...................................... 0.8917

ILLINOIS ................................... 0.7696

INDIANA ................................... 0.7830

IOWA ........................................ 0.7517

KANSAS ................................... 0.7426

KENTUCKY .............................. 0.7781

LOUISIANA ............................... 0.7355

MAINE ...................................... 0.8294

MARYLAND .............................. 0.8029

MASSACHUSETTS .................. 1.1607

MICHIGAN ................................ 0.8893

MINNESOTA ............................ 0.8288

MISSISSIPPI ............................ 0.6935

MISSOURI ................................ 0.7240

MONTANA ................................ 0.8226

NEBRASKA .............................. 0.6967

NEVADA ................................... 0.9663

NEW HAMPSHIRE ................... 0.9508

NEW JERSEY .......................... 1

NEW MEXICO .......................... 0.8289

NEW YORK .............................. 0.8371

NORTH CAROLINA ................. 0.7992

NORTH DAKOTA ..................... 0.7688

OHIO ......................................... 0.8438

OKLAHOMA ............................. 0.7384

OREGON .................................. 0.9643

PENNSYLVANIA ...................... 0.8620

PUERTO RICO ......................... 2 0.4316

RHODE ISLAND ....................... 1

SOUTH CAROLINA .................. 0.7678

SOUTH DAKOTA ..................... 0.7179

TENNESSEE ............................ 0.7316

TEXAS ...................................... 0.7578

UTAH ........................................ 0.8977

VERMONT ................................ 0.8997

VIRGINIA .................................. 0.7784

VIRGIN ISLANDS ..................... 2 1.0000

WASHINGTON ......................... 0.9597

WEST VIRGINIA ...................... 0.8482

WISCONSIN ............................. 0.8459

WYOMING ................................ 0.8423

1All counties within State are classified

urban.
Federal Register / Vol. 60, No. 30 / Tuesday, February 14, 1995 / Notices 8405

2Approximate value for area.

TABLE IV.—COST REPORTING YEAR

ADJUSTMENT FACTOR 1

If the HHA cost reporting period

begins

The adjustment factor

is

August 1, 1993 ......................... 1.0042

September 1, 1993 ................... 1.0085

October 1, 1993 ........................ 1.0126

November 1, 1993 .................... 1.0169

December 1, 1993 .................... 1.0211

January 1, 1994 ........................ 1.0254

February 1, 1994 ...................... 1.0299

March 1, 1994 .......................... 1.0340

April 1, 1994 ............................. 1.0385

May 1, 1994 .............................. 1.0430

June 1, 1994 ............................. 1.0475

1Based on compounded projected market

basket inflation rates of 5.10 percent for 1994

and 5.30 percent for 1995.

V. Impact Statement

For notices such as this, we generally

prepare a regulatory flexibility analysis

that is consistent with the Regulatory

Flexibility Act (RFA) (5 U.S.C. 601

through 612) unless the Secretary

certifies that this notice will not have a

significant economic impact on a

substantial number of small entities. For

purposes of the RFA, all HHAs are

treated as small entities.

This notice with comment period sets

forth a revised schedule of HHA pervisit cost limits and A&G add-on

amounts for hospital-based HHAs for

cost reporting periods beginning on or

after July 1, 1993. (We note that, in

accordance with section 13564(b) of

OBRA ’93, the A&G add-on for hospitalbased HHAs is eliminated effective for

cost reporting periods beginning on or

after October 1, 1993.) In addition, this

notice announces the provisions of

section 13564(a) of OBRA ’93, which

provides for a delay in the updates of

the HHA per-visit cost limits until cost

reporting periods beginning on or after

July 1, 1996.

As discussed below, the aggregate

impact of revising the schedule of limits

effective for cost reporting periods

beginning on or after July 1, 1993 is not

significant. In contrast, the requirement

under section 13564(a) of OBRA ’93 that

these limits remain in place for cost

reporting periods beginning before July

1, 1996 will result in significant Federal

cost savings. The impact of this OBRA

’93 provision also is discussed further

below. This notice explains the revised

methodology for calculating the HHA

per-visit cost limits that result from the

provisions of OBRA ’93. We do not

believe that merely explaining the

results of these provisions in this notice

will have a significant effect on a

substantial number of small entities.

Therefore, we have determined and the

Secretary certifies that a regulatory

flexibility analysis under the RFA is not

required.

However, to the extent that a

legislative provision being announced

by a notice such as this may have a

significant effect on beneficiaries or

providers or may be viewed as

controversial, we believe that we should

address any potential concerns. In this

instance, we believe it is desirable to

inform the public of our estimate of the

substantial budgetary effect of the

statutory requirement that there be no

update in the HHA per-visit cost limits

until cost reporting periods beginning

on or after July 1, 1996.

A. Effects of Revised Cost Limits for Cost

Reporting Periods Beginning On or After

July 1, 1993 and Before July 1, 1994

In response to comments on the

schedule of limits set forth in our July

8, 1993 notice with comment period, we

decided to validate the database used in

calculating the limits. As discussed in

section II.A.2 of this notice, we

determined that data were missing from

a large number of HHAs and that

duplicate cost reports were used in the

calculation of the hospital-based addon. Consequently, it was necessary to

recalculate the limits and add-on

amounts effective for cost reporting

periods beginning on or after July 1,

1993. This notice sets forth revised pervisit cost limits and add-on amounts for

hospital-based HHAs for cost reporting

periods beginning on or after July 1,

1993. Section II.A.2 of this notice

contains tables that illustrate the effects

of using the revised database to

calculate the limits and the A&G add-on

amounts. As the tables illustrate, the

per-visit cost limits and A&G add-on

amounts change for each discipline.

Most notable is the increase in the limits

and add-on amounts for skilled nursing

care and home health aide visits, since

these visits constitute the great majority

of covered HHA visits. We estimate that

the aggregate impact of these changes on

Medicare spending for HHA care will be

as follows:

TABLE 1.—IMPACT OF REVISED

LIMITS 1

Fiscal year Costs

1994 .................................................. 10

1995 .................................................. 10

1996 .................................................. 10

1997 .................................................. 10

1All figures are rounded to the nearest 10

million.

We are unable to estimate the effects

of these changes on individual HHAs. In

general, we believe that most HHAs will

experience small revenue increases

under the revised limits; the degree of

that increase will vary depending on the

proportion of the HHA’s revenues that

come from the Medicare program, the

distribution of services provided by the

HHA, and the HHA’s ability to operate

with the cost limits.

B. Effect of Cost Limits On Cost

Reporting Periods Beginning On or After

July 1, 1994 and Before July 1, 1996

In accordance with section 13564(a)

of OBRA ’93, this notice with comment

period specifies that there will be no

changes in the per-visit cost limits for

home health services for cost reporting

periods beginning on or after July 1,

1994, and before July 1, 1996, except as

may be necessary to take into account

the elimination of the A&G add-on for

hospital-based HHAs. We estimate that

this statutory provision will result in the

following savings to the Medicare

program:

TABLE 2.—IMPACT OF DELAY IN THE

UPDATE OF HHA LIMITS 1

Fiscal year Savings

1994 ................................................ $ 0

1995 ................................................ 130

1996 ................................................ 330

1997 ................................................ 100

1All figures are rounded to the nearest $10

million.

As illustrated in Table 3 below, the

delay in updating the cost limits until

July 1, 1996, will result in an increase

in the number of HHAs exceeding the

HHA cost limits in all categories. Table

3 below shows the impact of these

changes.

TABLE 3.—AGENCIES EXCEEDING THE

COST LIMITS 1

HHAs in

Model

Exceeding the

limits as

of 7/1/93

Exceeding the

limits as

of 7/1/95

Freestanding

HHAs . 2992 763 1329

Urban . 2001 510 911

Rural .. 991 253 418

Hospitalbased

HHAs . 1053 408 856

Urban . 447 173 383
8406 Federal Register / Vol. 60, No. 30 / Tuesday, February 14, 1995 / Notices

TABLE 3.—AGENCIES EXCEEDING THE

COST LIMITS 1—Continued

HHAs in

Model

Exceeding the

limits as

of 7/1/93

Exceeding the

limits as

of 7/1/95

Rural .. 606 235 473

1All figures are based on revised cost limits

as published in this notice for cost reporting

periods beginning on or before July 1, 1993

and before July 1, 1994.

Again, we are unable to identify the

effects of these provisions on individual

HHAs. However, we anticipate that

overall HHA payments for FY 1995

through FY 1997 will be approximately

0.9 percent, 2.0 percent, and 0.5 percent

less, respectively, than they would have

been in those years if the OBRA ’93

provisions were not in effect. The effects

of this reduction on the total revenues

of individual HHAs will depend on the

HHA’s ability to operate within the cost

limits and on the proportion of the

HHA’s revenues that come from the

Medicare program. We estimate that the

delay in updating the limits will not

result in a significant number of

facilities’ total revenues being increased

or reduced by 3 percent or more from

the revised limits effective for cost

reporting periods beginning on July 1,

1993, as set forth in this notice, adjusted

for inflation.

Section 1102(b) of the Act requires the

Secretary to prepare a regulatory impact

analysis if a notice such as this may

have a significant impact on the

operations of a substantial number of

small rural hospitals. Such an analysis

must conform to the provisions of

section 604 of the RFA. For purposes of

section 1102(b) of the Act, we define a

small rural hospital as a hospital with

fewer than 100 beds located outside of

a Metropolitan Statistical Area.

We have not prepared a rural impact

statement since we have determined

and the Secretary certifies that this final

notice will not have a significant

economic impact on the operations of a

substantial number of small rural

hospitals.

In accordance with the provisions of

Executive Order 12866, this notice was

reviewed by the Office of Management

and Budget.

VI. Other Required Information

A. Waiver of Proposed Notice and 30-

Day Delay in the Effective Date

In adopting notices such as this, we

ordinarily publish a proposed notice in

the Federal Register with a 60-day

period for public comment as required

under section 1871(b)(1) of the Act. We

also normally provide a delay of 30 days

in the effective date for documents such

as this. However, we may waive these

procedures if we find good cause that

prior notice and comment or a delay in

the effective date are impracticable,

unnecessary, or contrary to the public

interest.

This notice revises the per-visit limits

effective for cost reporting periods

beginning on or after July 1, 1993. We

believe the revised limits will be

beneficial to HHAs. Moreover, we have

revised the limits based on public

comments on our July 8, 1993 notice

with comment period.

In addition, as discussed above,

before the enactment of OBRA ’93,

section 1861(v)(1)(L)(iii) of the Act

required that the HHA per-discipline

cost limits be updated annually no later

than July 1 of each year. However,

section 13564(a)(1) of OBRA ’93

specifies that there be no changes in the

HHA cost limits (except as may be

necessary to take into account the

elimination of the A&G add-on for

hospital-based HHAs) for cost reporting

periods beginning on or after July 1,

1994, and before July 1, 1996. Section

13564(a)(2) of OBRA ’93 amended

section 1861(v)(1)(L)(iii) of the Act to

delay the next required update of the

HHA limits until July 1, 1996.

Thus, in conformance with the clear

direction of section 13564(a) of OBRA

’93, this notice announces the new HHA

provisions and explains the effects of

these provisions on the methodology

used in calculating the HHA cost limits.

We have made no changes in this

methodology beyond those directly

required by OBRA ’93. Moreover,

section 13564(a) of OBRA ’93 mandates

that these provisions are effective

beginning with cost reporting periods

beginning on or after July 1, 1994.

Because many of the provisions in this

notice announce, and explain the

impact of, changes made by statute that

are already effective, we believe it is

unnecessary to publish a proposed

notice or delay the effective date.

In summary, the only discretionary

aspect of this notice is the revision of

the schedule of HHA cost limits

effective for cost reporting periods

beginning on or after July 1, 1993. As

noted above, this change is being made

in response to public comment and is

clearly beneficial to HHAs. Publishing a

proposed rule or delaying the effective

date would postpone the correction of

errors in the database used to compute

the HHA cost limits. Thus, we have

concluded that in this instance, it would

be impracticable, unnecessary, and

contrary to the public interest to publish

a proposed notice or to provide for a 30-

day delay in the effective date of this

notice. Therefore, we find good cause to

waive publication of a proposed notice

and the 30-day delay in effective date.

However, we are providing a 60-day

period for public comment, as indicated

at the beginning of this notice.

B. Paperwork Reduction Act

This notice with comment period

does not impose information collection

requirements. Consequently, it need not

be reviewed by the Office of

Management and Budget under the

authority of the Paperwork Reduction

Act of 1980 (44 U.S.C. 3501 et seq.).

C. Requests for Data From the Public

In order to respond promptly to

public requests for data used in

calculating the HHA cost limits, we

have set up a process under which

commenters can gain access to the raw

data on an expedited basis. The HHA

database is available on computer tape

format or diskette for $680. Anyone

wishing to purchase data tapes or

diskettes should submit a written

request along with a company check or

money order (payable to HCFA-PUF) to

cover the cost, to the following address:

Health Care Financing Administration,

Public Use Files, Accounting Division,

P.O. Box 7520, Baltimore, Maryland

21207–0520, (410) 597–5151.

D. Public Comments

Because of the large number of items

of correspondence we normally receive

on Federal Register documents

published for comment, 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 notice, and, if we proceed with a

subsequent document, we will respond

to the comments in that document.

Authority: (Sections 1102, 1814(b),

1861(v)(1)(A) and (v)(1)(L), 1866(a), and 1871

of the Social Security Act (42 U.S.C. 1302,

1395f(b), 1395x(v)(1)(A) and (v)(1)(L),

1395cc(a), and 1395hh); section 13564(a) of

Public Law 103–66 (42 U.S.C. 1395x(note))

and 42 CFR 413.30.)

(Catalog of Federal Domestic Assistance

Program No. 93.773, Medicare—Hospital

Insurance)

Dated: October 11, 1994.

Bruce C. Vladeck,

Administrator, Health Care Financing

Administration.

Dated: November 4, 1994.

Donna E. Shalala,

Secretary.

[FR Doc. 95–3526 Filed 2–13–95; 8:45 am]

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