46416 Federal Register / Vol. 73, No. 154 / Friday, August 8, 2008 / Rules and Regulations 

DEPARTMENT OF HEALTH AND 

HUMAN SERVICES 

Centers for Medicare & Medicaid 

Services 

42 CFR Part 413 

[CMS–1534–F] 

RIN 0938–AP11 

Medicare Program; Prospective 

Payment System and Consolidated 

Billing for Skilled Nursing Facilities for 

FY 2009 

AGENCY: Centers for Medicare & 

Medicaid Services (CMS), HHS. 

ACTION: Final rule. 

SUMMARY: This final rule updates the 

payment rates used under the 

prospective payment system (PPS) for 

skilled nursing facilities (SNFs), for 

fiscal year (FY) 2009. It also discusses 

our ongoing analysis of nursing home 

staff time measurement data collected in 

the Staff Time and Resource Intensity 

Verification (STRIVE) project. Finally, 

this final rule makes technical 

corrections in the regulations text with 

respect to Medicare bad debt payments 

to SNFs and the reference to the 

definition of urban and rural as applied 

to SNFs. 

DATES: Effective Date: This final rule 

becomes effective on October 1, 2008. 

FOR FURTHER INFORMATION CONTACT: 

Ellen Berry, (410) 786–4528 (for 

information related to clinical issues). 

Jeanette Kranacs, (410) 786–9385 (for 

information related to the development 

of the payment rates and case-mix 

indexes). 

Bill Ullman, (410) 786–5667 (for 

information related to level of care 

determinations, consolidated billing, 

and general information). 

SUPPLEMENTARY INFORMATION: To assist 

readers in referencing sections 

contained in this document, we are 

providing the following Table of 

Contents. 

Table of Contents 

I. Background 

A. Current System for Payment of Skilled 

Nursing Facility Services Under Part A 

of the Medicare Program 

B. Requirements of the Balanced Budget 

Act of 1997 (BBA) for Updating the 

Prospective Payment System for Skilled 

Nursing Facilities 

C. The Medicare, Medicaid, and SCHIP 

Balanced Budget Refinement Act of 1999 

(BBRA) 

D. The Medicare, Medicaid, and SCHIP 

Benefits Improvement and Protection 

Act of 2000 (BIPA) 

E. The Medicare Prescription Drug, 

Improvement, and Modernization Act of 

2003 (MMA) 

F. Skilled Nursing Facility Prospective 

Payment—General Overview 

1. Payment Provisions—Federal Rate 

2. Rate Updates Using the Skilled Nursing 

Facility Market Basket Index 

II. Summary of the Provisions of the FY 2009 

Proposed Rule 

III. Analysis of and Response to Public 

Comments on the FY 2009 Proposed 

Rule 

A. General Comments on the FY 2009 

Proposed Rule 

B. Annual Update of Payment Rates Under 

the Prospective Payment System for 

Skilled Nursing Facilities 

1. Federal Prospective Payment System 

a. Costs and Services Covered by the 

Federal Rates 

b. Methodology Used for the Calculation of 

the Federal Rates 

2. Case-Mix Adjustments 

a. Background 

b. Development of the Case-Mix Indexes 

3. Wage Index Adjustment to Federal Rates 

a. Clarification of New England Deemed 

Counties 

b. Multi-Campus Hospital Wage Index Data 

4. Updates to the Federal Rates 

5. Relationship of RUG–III Classification 

System to Existing Skilled Nursing 

Facility Level-of-Care Criteria 

6. Example of Computation of Adjusted 

PPS Rates and SNF Payment 

7. Other Issues 

a. Staff Time and Resource Intensity 

Verification (STRIVE) Project 

b. Minimum Data Set (MDS) 3.0 

c. Integrated Post Acute Care Payment 

8. Miscellaneous Technical Corrections 

and Clarifications 

a. Bad Debt Payments 

b. Additional Clarifications 

IV. The Skilled Nursing Facility Market 

Basket Index 

A. Use of the Skilled Nursing Facility 

Market Basket Percentage 

B. Market Basket Forecast Error 

Adjustment 

C. Federal Rate Update Factor 

V. Consolidated Billing 

VI. Application of the SNF PPS to SNF 

Services Furnished by Swing-Bed 

Hospitals 

VII. Provisions of the Final Rule 

VIII. Collection of Information Requirements 

IX. Regulatory Impact Analysis 

A. Overall Impact 

B. Anticipated Effects 

C. Alternatives Considered 

D. Accounting Statement 

E. Conclusion 

Regulation Text 

Addendum: FY 2009 CBSA-Based Wage 

Index Tables (Tables 8 & 9) 

Abbreviations 

Because of the many terms to which 

we refer by abbreviation in this final 

rule, we are listing these abbreviations 

and their corresponding terms in 

alphabetical order below: 

AIDS Acquired Immune Deficiency 

Syndrome 

ARD Assessment Reference Date 

BBA Balanced Budget Act of 1997, Public 

Law 105–33 

BBRA Medicare, Medicaid, and SCHIP 

Balanced Budget Refinement Act of 1999, 

Public Law 106–113 

BIPA Medicare, Medicaid, and SCHIP 

Benefits Improvement and Protection Act 

of 2000, Public Law 106–554 

CAH Critical Access Hospital 

CARE Continuity Assessment Record and 

Evaluation 

CBSA Core-Based Statistical Area 

CFR Code of Federal Regulations 

CMI Case-Mix Index 

CMS Centers for Medicare & Medicaid 

Services 

DRA Deficit Reduction Act of 2005, Public 

Law 109–171 

FQHC Federally Qualified Health Center 

FR Federal Register 

FY Fiscal Year 

GAO Government Accountability Office 

HAC Hospital-Acquired Condition 

HCPCS Healthcare Common Procedure 

Coding System 

HIPPS Health Insurance Prospective 

Payment System 

HIT Health Information Technology 

IFC Interim Final Rule with Comment 

Period 

IPPS Hospital Inpatient Prospective 

Payment System 

MDS Minimum Data Set 

MMA Medicare Prescription Drug, 

Improvement, and Modernization Act of 

2003, Public Law 108–173 

MSA Metropolitan Statistical Area 

MS-DRG Medicare Severity DiagnosisRelated Group 

NRST Non-Resident Specific Time 

NTA Non-Therapy Ancillary 

OBRA Omnibus Budget Reconciliation Act 

of 1987, Public Law 100–203 

OIG Office of the Inspector General 

OMB Office of Management and Budget 

OMRA Other Medicare Required 

Assessment 

PAC–PRD Post-Acute Care Payment Reform 

Demonstration 

POA Present on Admission 

PPS Prospective Payment System 

RAI Resident Assessment Instrument 

RAP Resident Assessment Protocol 

RAVEN Resident Assessment Validation 

Entry 

RFA Regulatory Flexibility Act, Public Law 

96–354 

RHC Rural Health Clinic 

RIA Regulatory Impact Analysis 

RUG–III Resource Utilization Groups, 

Version III 

RUG–53 Refined 53–Group RUG–III CaseMix Classification System 

RST Resident Specific Time 

SCHIP State Children’s Health Insurance 

Program 

SNF Skilled Nursing Facility 

STM Staff Time Measurement 

STRIVE Staff Time and Resource Intensity 

Verification 

TEP Technical Expert Panel 

UMRA Unfunded Mandates Reform Act, 

Public Law 104–4 

VBP Value-Based Purchasing 


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I. Background 

On May 7, 2008, we published a 

proposed rule (73 FR 25918) in the 

Federal Register (hereafter referred to as 

the FY 2009 proposed rule), setting forth 

updates to the payment rates used under 

the prospective payment system (PPS) 

for skilled nursing facilities (SNFs), for 

fiscal year (FY) 2009. Annual updates to 

the prospective payment system rates 

for skilled nursing facilities are required 

by section 1888(e) of the Social Security 

Act (the Act), as added by section 4432 

of the Balanced Budget Act of 1997 

(BBA), and amended by the Medicare, 

Medicaid, and SCHIP Balanced Budget 

Refinement Act of 1999 (BBRA), the 

Medicare, Medicaid, and SCHIP 

Benefits Improvement and Protection 

Act of 2000 (BIPA), and the Medicare 

Prescription Drug, Improvement, and 

Modernization Act of 2003 (MMA). Our 

most recent annual update occurred in 

the August 3, 2007 final rule (72 FR 

43412) that set forth updates to the SNF 

PPS payment rates for FY 2008. We 

subsequently published two correction 

notices (72 FR 55085, September 28, 

2007, and 72 FR 67652, November 30, 

2007) with respect to those payment rate 

updates. 

A. Current System for Payment of 

Skilled Nursing Facility Services Under 

Part A of the Medicare Program 

Section 4432 of the BBA amended 

section 1888 of the Act to provide for 

the implementation of a per diem PPS 

for SNFs, covering all costs (routine, 

ancillary, and capital-related) of covered 

SNF services furnished to beneficiaries 

under Part A of the Medicare program, 

effective for cost reporting periods 

beginning on or after July 1, 1998. In 

this final rule, we are updating the per 

diem payment rates for SNFs for FY 

2009. Major elements of the SNF PPS 

include: 

• Rates. As discussed in section I.F.1. 

of this final rule, we established per 

diem Federal rates for urban and rural 

areas using allowable costs from FY 

1995 cost reports. These rates also 

included an estimate of the cost of 

services that, before July 1, 1998, had 

been paid under Part B but were 

furnished to Medicare beneficiaries in a 

SNF during a Part A covered stay. We 

update the rates annually using a SNF 

market basket index, and we adjust 

them by the hospital inpatient wage 

index to account for geographic 

variation in wages. We also apply a 

case-mix adjustment to account for the 

relative resource utilization of different 

patient types. This adjustment utilizes a 

refined, 53-group version of the 

Resource Utilization Groups, version III 

(RUG-III) case-mix classification system, 

based on information obtained from the 

required resident assessments using the 

Minimum Data Set (MDS) 2.0. 

Additionally, as noted in sections I.C 

through I.E of this final rule, the 

payment rates at various times have also 

reflected specific legislative provisions, 

including section 101 of the BBRA, 

sections 311, 312, and 314 of the BIPA, 

and section 511 of the MMA. 

• Transition. Under sections 

1888(e)(1)(A) and (e)(11) of the Act, the 

SNF PPS included an initial, threephase transition that blended a facilityspecific rate (reflecting the individual 

facility’s historical cost experience) with 

the Federal case-mix adjusted rate. The 

transition extended through the 

facility’s first three cost reporting 

periods under the PPS, up to and 

including the one that began in FY 

2001. Thus, the SNF PPS is no longer 

operating under the transition, as all 

facilities have been paid at the full 

Federal rate effective with cost reporting 

periods beginning in FY 2002. As we 

now base payments entirely on the 

adjusted Federal per diem rates, we no 

longer include adjustment factors 

related to facility-specific rates for the 

coming FY. 

• Coverage. The establishment of the 

SNF PPS did not change Medicare’s 

fundamental requirements for SNF 

coverage. However, because the RUG-III 

classification is based, in part, on the 

beneficiary’s need for skilled nursing 

care and therapy, we have attempted, 

where possible, to coordinate claims 

review procedures with the output of 

beneficiary assessment and RUG-III 

classifying activities. This approach 

includes an administrative presumption 

that utilizes a beneficiary’s initial 

classification in one of the upper 35 

RUGs of the refined 53-group system to 

assist in making certain SNF level of 

care determinations, as discussed in 

greater detail in section III.B.5 of this 

final rule. 

• Consolidated Billing. The SNF PPS 

includes a consolidated billing 

provision that requires a SNF to submit 

consolidated Medicare bills to its fiscal 

intermediary or Medicare 

Administrative Contractor for almost all 

of the services that its residents receive 

during the course of a covered Part A 

stay. In addition, this provision places 

with the SNF the Medicare billing 

responsibility for physical, 

occupational, and speech-language 

therapy that the resident receives during 

a noncovered stay. The statute excludes 

a small list of services from the 

consolidated billing provision 

(primarily those of physicians and 

certain other types of practitioners), 

which remain separately billable under 

Part B when furnished to a SNF’s Part 

A resident. A more detailed discussion 

of this provision appears in section V. 

of this final rule. 

• Application of the SNF PPS to SNF 

services furnished by swing-bed 

hospitals. Section 1883 of the Act 

permits certain small, rural hospitals to 

enter into a Medicare swing-bed 

agreement, under which the hospital 

can use its beds to provide either acute 

or SNF care, as needed. For critical 

access hospitals (CAHs), Part A pays on 

a reasonable cost basis for SNF services 

furnished under a swing-bed agreement. 

However, in accordance with section 

1888(e)(7) of the Act, these services are 

paid under the SNF PPS when 

furnished by non-CAH rural hospitals, 

effective with cost reporting periods 

beginning on or after July 1, 2002. A 

more detailed discussion of this 

provision appears in section VI. of this 

final rule. 

B. Requirements of the Balanced Budget 

Act of 1997 (BBA) for Updating the 

Prospective Payment System for Skilled 

Nursing Facilities 

Section 1888(e)(4)(H) of the Act 

requires that we publish annually in the 

Federal Register: 

1. The unadjusted Federal per diem 

rates to be applied to days of covered 

SNF services furnished during the FY. 

2. The case-mix classification system 

to be applied with respect to these 

services during the FY. 

3. The factors to be applied in making 

the area wage adjustment with respect 

to these services. 

In the July 30, 1999 final rule (64 FR 

41670), we indicated that we would 

announce any changes to the guidelines 

for Medicare level of care 

determinations related to modifications 

in the RUG–III classification structure 

(see section III.B.5 of this final rule for 

a discussion of the relationship between 

the case-mix classification system and 

SNF level of care determinations). 

Along with other revisions outlined 

later in this preamble, this final rule 

provides the annual updates to the 

Federal rates as mandated by the Act. 

C. The Medicare, Medicaid, and SCHIP 

Balanced Budget Refinement Act of 

1999 (BBRA) 

There were several provisions in the 

BBRA that resulted in adjustments to 

the SNF PPS. We described these 

provisions in detail in the SNF PPS final 

rule for FY 2001 (65 FR 46770, July 31, 

2001). In particular, section 101(a) of the 

BBRA provided for a temporary 20 

percent increase in the per diem 

adjusted payment rates for 15 specified 


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46418 Federal Register / Vol. 73, No. 154 / Friday, August 8, 2008 / Rules and Regulations 

RUG–III groups. In accordance with 

section 101(c)(2) of the BBRA, this 

temporary payment adjustment expired 

on January 1, 2006, with the 

implementation of case-mix refinements 

(see section I.F.1. of this final rule). We 

included further information on BBRA 

provisions that affected the SNF PPS in 

Program Memorandums A–99–53 and 

A–99–61 (December 1999). 

Also, section 103 of the BBRA 

designated certain additional services 

for exclusion from the consolidated 

billing requirement, as discussed in 

greater detail in section V. of this final 

rule. Further, for swing-bed hospitals 

with more than 49 (but less than 100) 

beds, section 408 of the BBRA provided 

for the repeal of certain statutory 

restrictions on length of stay and 

aggregate payment for patient days, 

effective with the end of the SNF PPS 

transition period described in section 

1888(e)(2)(E) of the Act. In the SNF PPS 

final rule for FY 2002 (66 FR 39562, July 

31, 2001), we made conforming changes 

to the regulations at § 413.114(d), 

effective for services furnished in cost 

reporting periods beginning on or after 

July 1, 2002, to reflect section 408 of the 

BBRA. 

D. The Medicare, Medicaid, and SCHIP 

Benefits Improvement and Protection 

Act of 2000 (BIPA) 

The BIPA also included several 

provisions that resulted in adjustments 

to the SNF PPS. We described these 

provisions in detail in the SNF PPS final 

rule for FY 2002 (66 FR 39562, July 31, 

2001). In particular: 

• Section 203 of the BIPA exempted 

CAH swing-beds from the SNF PPS. We 

included further information on this 

provision in Program Memorandum A–

01–09 (Change Request #1509), issued 

January 16, 2001, which is available 

online at http://www.cms.hhs.gov/ 

transmittals/downloads/a0109.pdf. 

• Section 311 of the BIPA revised the 

statutory update formula for the SNF 

market basket, and also directed us to 

conduct a study of alternative case-mix 

classification systems for the SNF PPS. 

In 2006, we submitted a report to the 

Congress on this study, which is 

available online at http:// 

www.cms.hhs.gov/SNFPPS/Downloads/ 

RC_2006_PC-PPSSNF.pdf. 

• Section 312 of the BIPA provided 

for a temporary increase of 16.66 

percent in the nursing component of the 

case-mix adjusted Federal rate for 

services furnished on or after April 1, 

2001, and before October 1, 2002; 

accordingly, this add-on is no longer in 

effect. This section also directed the 

Government Accountability Office 

(GAO) to conduct an audit of SNF 

nursing staff ratios and submit a report 

to the Congress on whether the 

temporary increase in the nursing 

component should be continued. The 

report (GAO–03–176), which GAO 

issued in November 2002, is available 

online at http://www.gao.gov/ 

new.items/d03176.pdf. 

• Section 313 of the BIPA repealed 

the consolidated billing requirement for 

services (other than physical, 

occupational, and speech-language 

therapy) furnished to SNF residents 

during noncovered stays, effective 

January 1, 2001. (A more detailed 

discussion of this provision appears in 

section V. of this final rule.) 

• Section 314 of the BIPA corrected 

an anomaly involving three of the RUGs 

that the BBRA had designated to receive 

the temporary payment adjustment 

discussed above in section I.C. of this 

final rule. (As noted previously, in 

accordance with section 101(c)(2) of the 

BBRA, this temporary payment 

adjustment expired upon the 

implementation of case-mix refinements 

on January 1, 2006.) 

• Section 315 of the BIPA authorized 

us to establish a geographic 

reclassification procedure that is 

specific to SNFs, but only after 

collecting the data necessary to establish 

a SNF wage index that is based on wage 

data from nursing homes. To date, this 

has proven to be infeasible due to the 

volatility of existing SNF wage data and 

the significant amount of resources that 

would be required to improve the 

quality of that data. 

We included further information on 

several of the BIPA provisions in 

Program Memorandum A–01–08 

(Change Request #1510), issued January 

16, 2001, which is available online at 

http://www.cms.hhs.gov/transmittals/ 

downloads/a0108.pdf. 

E. The Medicare Prescription Drug, 

Improvement, and Modernization Act of 

2003 (MMA) 

The MMA included a provision that 

resulted in further adjustment to the 

SNF PPS. Specifically, section 511 of 

the MMA amended section 1888(e)(12) 

of the Act, to provide for a temporary 

increase of 128 percent in the PPS per 

diem payment for any SNF resident 

with Acquired Immune Deficiency 

Syndrome (AIDS), effective with 

services furnished on or after October 1, 

2004. This special AIDS add-on was to 

remain in effect until ‘‘* * * such date 

as the Secretary certifies that there is an 

appropriate adjustment in the case mix 

* * *.’’ The AIDS add-on is also 

discussed in Program Transmittal #160 

(Change Request #3291), issued on April 

30, 2004, which is available online at 

http://www.cms.hhs.gov/transmittals/ 

downloads/r160cp.pdf. As discussed in 

the SNF PPS final rule for FY 2006 (70 

FR 45028, August 4, 2005), the 

implementation of the case-mix 

refinements did not address the 

certification regarding the AIDS add-on, 

allowing the temporary add-on payment 

created by section 511 of the MMA to 

continue in effect. 

For the limited number of SNF 

residents that qualify for the AIDS addon, implementation of this provision 

results in a significant increase in 

payment. For example, using FY 2006 

data, we identified less than 2,700 SNF 

residents with a diagnosis code of 042 

(Human Immunodeficiency Virus (HIV) 

Infection). For FY 2009, an urban 

facility with a resident with AIDS in 

RUG group ‘‘SSA’’ would have a casemix adjusted payment of $259.40 (see 

Table 4) before the application of the 

MMA adjustment. After an increase of 

128 percent, this urban facility would 

receive a case-mix adjusted payment of 

$591.43. 

In addition, section 410 of the MMA 

contained a provision that excluded 

from consolidated billing certain 

practitioner and other services 

furnished to SNF residents by rural 

health clinics (RHCs) and Federally 

Qualified Health Centers (FQHCs). 

(Further information on this provision 

appears in section V. of this final rule.) 

F. Skilled Nursing Facility Prospective 

Payment—General Overview 

We implemented the Medicare SNF 

PPS effective with cost reporting 

periods beginning on or after July 1, 

1998. This PPS pays SNFs through 

prospective, case-mix adjusted per diem 

payment rates applicable to all covered 

SNF services. These payment rates 

cover all costs of furnishing covered 

skilled nursing services (routine, 

ancillary, and capital-related costs) 

other than costs associated with 

approved educational activities. 

Covered SNF services include posthospital services for which benefits are 

provided under Part A and all items and 

services that, before July 1, 1998, had 

been paid under Part B (other than 

physician and certain other services 

specifically excluded under the BBA) 

but furnished to Medicare beneficiaries 

in a SNF during a covered Part A stay. 

A comprehensive discussion of these 

provisions appears in the May 12, 1998 

interim final rule (63 FR 26252). 

1. Payment Provisions—Federal Rate 

The PPS uses per diem Federal 

payment rates based on mean SNF costs 

in a base year updated for inflation to 

the first effective period of the PPS. We 


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developed the Federal payment rates 

using allowable costs from hospitalbased and freestanding SNF cost reports 

for reporting periods beginning in FY 

1995. The data used in developing the 

Federal rates also incorporated an 

estimate of the amounts that would be 

payable under Part B for covered SNF 

services furnished to individuals during 

the course of a covered Part A stay in 

a SNF. 

In developing the rates for the initial 

period, we updated costs to the first 

effective year of the PPS (the 15-month 

period beginning July 1, 1998) using a 

SNF market basket index, and then 

standardized for the costs of facility 

differences in case-mix and for 

geographic variations in wages. In 

compiling the database used to compute 

the Federal payment rates, we excluded 

those providers that received new 

provider exemptions from the routine 

cost limits, as well as costs related to 

payments for exceptions to the routine 

cost limits. Using the formula that the 

BBA prescribed, we set the Federal rates 

at a level equal to the weighted mean of 

freestanding costs plus 50 percent of the 

difference between the freestanding 

mean and weighted mean of all SNF 

costs (hospital-based and freestanding) 

combined. We computed and applied 

separately the payment rates for 

facilities located in urban and rural 

areas. In addition, we adjusted the 

portion of the Federal rate attributable 

to wage-related costs by a wage index. 

The Federal rate also incorporates 

adjustments to account for facility casemix, using a classification system that 

accounts for the relative resource 

utilization of different patient types. 

The RUG–III classification system uses 

beneficiary assessment data from the 

Minimum Data Set (MDS) completed by 

SNFs to assign beneficiaries to one of 53 

RUG–III groups. The original RUG–III 

case-mix classification system included 

44 groups. However, under refinements 

that became effective on January 1, 

2006, we added nine new groups—

comprising a new Rehabilitation plus 

Extensive Services category—at the top 

of the RUG hierarchy. The May 12, 1998 

interim final rule (63 FR 26252) 

included a detailed description of the 

original 44-group RUG–III case-mix 

classification system. A comprehensive 

description of the refined 53-group 

RUG–III case-mix classification system 

(RUG–53) appeared in the proposed rule 

for FY 2006 (70 FR 29070, May 19, 

2005) and in the final rule for FY 2006 

(70 FR 45026, August 4, 2005). 

Further, in accordance with section 

1888(e)(4)(E)(ii)(IV) of the Act, the 

Federal rates in this final rule reflect an 

update to the rates that we published in 

the final rule for FY 2008 (72 FR 43412, 

August 3, 2007) and the associated 

correction notices published on 

September 28, 2007 (72 FR 55085) and 

November 30, 2007 (72 FR 67652), equal 

to the full change in the SNF market 

basket index. A more detailed 

discussion of the SNF market basket 

index and related issues appears in 

sections I.F.2. and IV. of this final rule. 

2. Rate Updates Using the Skilled 

Nursing Facility Market Basket Index 

Section 1888(e)(5) of the Act requires 

us to establish a SNF market basket 

index that reflects changes over time in 

the prices of an appropriate mix of 

goods and services included in covered 

SNF services. We use the SNF market 

basket index to update the Federal rates 

on an annual basis. In the FY 2008 SNF 

PPS final rule (72 FR 43425 through 

43430, August 3, 2007), we revised and 

rebased the market basket, which 

included updating the base year from 

FY 1997 to FY 2004. The proposed FY 

2009 market basket increase was 3.1 

percent. The final FY 2009 market 

basket increase is 3.4 percent. 

In addition, as explained in the SNF 

PPS final rule for FY 2004 (66 FR 46058, 

August 4, 2003) and in section IV.B. of 

this final rule, the annual update of the 

payment rates includes, as appropriate, 

an adjustment to account for market 

basket forecast error. As described in the 

SNF PPS final rule for FY 2008 (72 FR 

43425, August 3, 2007), the threshold 

percentage that serves to trigger an 

adjustment to account for market basket 

forecast error is 0.5 percentage point 

effective for FY 2008 and subsequent 

years. This adjustment takes into 

account the forecast error from the most 

recently available FY for which there is 

final data, and applies whenever the 

difference between the forecasted and 

actual change in the market basket 

exceeds a 0.5 percentage point 

threshold. For FY 2007 (the most 

recently available FY for which there is 

final data), the estimated increase in the 

market basket index was 3.1 percentage 

points, while the actual increase was 3.1 

percentage points, resulting in no 

difference. Accordingly, as the 

difference between the estimated and 

actual amount of change does not 

exceed the 0.5 percentage point 

threshold, the payment rates for FY 

2009 do not include a forecast error 

adjustment. Table 1 below shows the 

forecasted and actual market basket 

amounts for FY 2007. 

TABLE 1—DIFFERENCE BETWEEN THE FORECASTED AND ACTUAL MARKET BASKET INCREASES FOR FY 2007 

Index Forecasted 

FY 2007 increase * 

Actual 

FY 2007 increase ** 

FY 2007 

difference *** 

SNF .............................................................................................. 3.1 3.1 0.0 

* Published in Federal Register; based on second quarter 2006 Global Insight Inc. forecast (97 index). 

** Based on the second quarter 2008 Global Insight forecast (97 index). 

*** The FY 2007 forecast error correction will be applied to the FY 2009 PPS update recommendations. Any forecast error less than 0.5 percentage points will not be reflected in the update recommendation. 

Requirements for Issuance of 

Regulations 

Section 902 of the Medicare 

Prescription Drug, Improvement, and 

Modernization Act of 2003 (MMA) 

amended section 1871(a) of the Act and 

requires the Secretary, in consultation 

with the Director of the Office of 

Management and Budget, to establish 

and publish timelines for the 

publication of Medicare final 

regulations based on the previous 

publication of a Medicare proposed or 

interim final regulation. Section 902 of 

the MMA also states that the timelines 

for these regulations may vary but shall 

not exceed 3 years after publication of 

the preceding proposed or interim final 

regulation except under exceptional 

circumstances. 

This final rule finalizes provisions 

proposed in the May 7, 2008 proposed 

rule. In addition, this final rule has been 

published within the 3-year time limit 

imposed by section 902 of the MMA. 

Therefore, we believe that the final rule 

is in accordance with the Congress’

intent to ensure timely publication of 

final regulations. 

II. Summary of the Provisions of the FY 

2009 Proposed Rule 

In the FY 2009 proposed rule (73 FR 

25918, May 7, 2008), we proposed to 

update the Federal payment rates used 


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46420 Federal Register / Vol. 73, No. 154 / Friday, August 8, 2008 / Rules and Regulations 

under the SNF PPS for FY 2009. We also 

proposed to recalibrate the case-mix 

indexes so that they would more 

accurately reflect parity in expenditures 

related to the implementation of casemix refinements in January 2006. In 

addition, we discussed our ongoing 

analysis of nursing home staff time 

measurement data collected in the Staff 

Time and Resource Intensity 

Verification (STRIVE) project. We also 

proposed to make technical corrections 

in the regulations text with respect to 

Medicare bad debt payments to SNFs 

and the reference to the definition of 

urban and rural as applied to SNFs. 

III. Analysis and Response to Public 

Comments on the FY 2009 Proposed 

Rule 

In response to the publication of the 

FY 2009 proposed rule, we received 

over 100 timely items of correspondence 

from the public. The comments 

originated primarily from various trade 

associations and major organizations, 

but also from individual providers, 

corporations, government agencies, and 

private citizens. 

Brief summaries of each proposed 

provision, a summary of the public 

comments that we received, and our 

responses to the comments appear 

below. 

A. General Comments on the FY 2009 

Proposed Rule 

In addition to the comments that we 

received on the proposed rule’s 

discussion of specific aspects of the SNF 

PPS (which we address later in this final 

rule), commenters also submitted the 

following, more general observations on 

the payment system. 

Comment: We received comments 

similar to those discussed previously in 

the SNF PPS final rule for FY 2008 (72 

FR 43415 through 43416, August 3, 

2007) regarding the need to address 

certain perceived inadequacies in 

payment for non-therapy ancillary 

(NTA) services, including those services 

relating to the provision of ventilator 

care in SNFs. We also received 

comments recommending that we 

continue to monitor ongoing research, 

and that we consider alternative casemix methodologies such as the recent 

MedPAC proposal that appears on the 

MedPAC Web site (see http:// 

www.MedPAC.gov.) 

Response: As we noted in the August 

3, 2007 FY 2008 final rule (72 FR 

43416), we anticipate that the findings 

from our current Staff Time and 

Resource Intensity Verification 

(STRIVE) project will assist us in 

reviewing and addressing these types of 

concerns. However, as noted in our 

December 2006 Report to Congress, our 

analysis of NTA utilization has been 

hindered by a lack of data. All Medicare 

institutional providers except SNFs are 

required to submit detailed line item 

billing that shows each ancillary service 

furnished during a Part A stay. SNFs 

currently submit summary data that 

shows total dollar amounts for each 

ancillary service category, such as 

radiology and pharmacy. As we 

examine the data collected through the 

STRIVE project, we will be evaluating 

whether our current data requirements 

are sufficient to move forward with 

additional program enhancements. We 

will also consider whether collecting 

more detailed claims information on a 

regular basis will allow us to establish 

more accurate payment rates for NTA 

services. 

We also believe it is important to 

monitor ongoing research activities, and 

work with all stakeholders, including 

MedPAC, to identify opportunities for 

future program enhancements. At the 

same time, we note that the SNF PPS 

reimbursement structure will be 

completely examined as part of the Post 

Acute Care Payment Reform 

Demonstration (PAC–PRD) project. 

Under this major CMS initiative, we 

intend to analyze the payment structure 

currently used for all post-acute care 

providers, and establish an integrated 

payment model centered on beneficiary 

needs and service utilization (including 

the use of non-therapy ancillaries) 

across settings. In considering future 

changes to the SNF PPS, it will be 

important to evaluate how shorter term 

enhancements contribute to our 

integrated post acute care strategy. 

A discussion of the public comments 

that we received on the STRIVE project 

itself appears in section III.B.7.a of this 

final rule. 

B. Annual Update of Payment Rates 

Under the Prospective Payment System 

for Skilled Nursing Facilities 

1. Federal Prospective Payment System 

This final rule sets forth a schedule of 

Federal prospective payment rates 

applicable to Medicare Part A SNF 

services beginning October 1, 2008. The 

schedule incorporates per diem Federal 

rates that provide Part A payment for all 

costs of services furnished to a 

beneficiary in a SNF during a Medicarecovered stay. 

a. Costs and Services Covered by the 

Federal Rates 

In accordance with section 

1888(e)(2)(B) of the Act, the Federal 

rates apply to all costs (routine, 

ancillary, and capital-related) of covered 

SNF services other than costs associated 

with approved educational activities as 

defined in § 413.85. Under section 

1888(e)(2)(A)(i) of the Act, covered SNF 

services include post-hospital SNF 

services for which benefits are provided 

under Part A (the hospital insurance 

program), as well as all items and 

services (other than those services 

excluded by statute) that, before July 1, 

1998, were paid under Part B (the 

supplementary medical insurance 

program) but furnished to Medicare 

beneficiaries in a SNF during a Part A 

covered stay. (These excluded service 

categories are discussed in greater detail 

in section V.B.2. of the May 12, 1998 

interim final rule (63 FR 26295 through 

26297).) 

b. Methodology Used for the Calculation 

of the Federal Rates 

The FY 2009 rates reflect an update 

using the full amount of the latest 

market basket index. The FY 2009 

market basket increase factor is 3.4 

percent. A complete description of the 

multi-step process used to calculate 

Federal rates initially appeared in the 

May 12, 1998 interim final rule (63 FR 

26252), as further revised in subsequent 

rules. We note that in accordance with 

section 101(c)(2) of the BBRA, the 

previous temporary increases in the per 

diem adjusted payment rates for certain 

designated RUGs, as specified in section 

101(a) of the BBRA and section 314 of 

the BIPA, are no longer in effect due to 

the implementation of case-mix 

refinements as of January 1, 2006. 

However, the temporary increase of 128 

percent in the per diem adjusted 

payment rates for SNF residents with 

AIDS, enacted by section 511 of the 

MMA (and discussed previously in 

section I.E of this final rule), remains in 

effect. 

We used the SNF market basket to 

adjust each per diem component of the 

Federal rates forward to reflect cost 

increases occurring between the 

midpoint of the Federal FY beginning 

October 1, 2007, and ending September 

30, 2008, and the midpoint of the 

Federal FY beginning October 1, 2008, 

and ending September 30, 2009, to 

which the payment rates apply. In 

accordance with section 

1888(e)(4)(E)(ii)(IV) of the Act, we 

update the payment rates for FY 2009 by 

a factor equal to the full market basket 

index percentage increase. (We note, 

that the FY 2009 President’s Budget 

includes a provision that would 

establish a zero percent market basket 

update for FYs 2009 through 2011, 

contingent upon the enactment of 

legislation by the Congress to adopt that 

proposal.) We further adjust the rates by 


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a wage index budget neutrality factor, 

described later in this section. Tables 2 

and 3 below reflect the updated 

components of the unadjusted Federal 

rates for FY 2009. 

TABLE 2—FY 2009 UNADJUSTED FEDERAL RATE PER DIEM—URBAN

Rate component Nursing—

case-mix 

Therapy—

case-mix 

Therapy—noncase-mix Non-case-mix 

Per diem amount ............................................................................................. $151.74 $114.30 $15.05 $77.44 

TABLE 3—FY 2009 UNADJUSTED FEDERAL RATE PER DIEM—RURAL

Rate component Nursing—

case-mix 

Therapy—

case-mix 

Therapy—noncase-mix Non-case-mix 

Per diem amount ............................................................................................. $144.97 $131.80 $16.08 $78.87 

2. Case-Mix Adjustments 

a. Background 

Section 1888(e)(4)(G)(i) of the Act 

requires the Secretary to make an 

adjustment to account for case-mix. The 

statute specifies that the adjustment is 

to reflect both a resident classification 

system that the Secretary establishes to 

account for the relative resource use of 

different patient types, as well as 

resident assessment and other data that 

the Secretary considers appropriate. In 

first implementing the SNF PPS (we 

refer readers to the May 12, 1998 

interim final rule (63 FR 26252)), we 

developed the Resource Utilization 

Groups, version III (RUG–III) case-mix 

classification system, which tied the 

amount of payment to resident resource 

use in combination with resident 

characteristic information. Staff time 

measurement (STM) studies conducted 

in 1990, 1995, and 1997 provided 

information on resource use (time spent 

by staff members on residents) and 

resident characteristics that enabled us 

not only to establish RUG–III, but also 

to create case-mix indexes. 

Under the BBA, each update of the 

SNF PPS payment rates must include 

the case-mix classification methodology 

applicable for the coming Federal FY. 

As indicated previously in section I.F.1, 

the payment rates set forth in this final 

rule reflect the use of the refined RUG–

53 system that we discussed in detail in 

the proposed and final rules for FY 

2006. 

When we introduced a new refined 

RUG–53 classification model in January 

2006, we used our authority for 

establishing an appropriate case-mix 

structure to construct a new case-mix 

index for use with the RUG–53 model. 

We calculated the new case-mix indexes 

using the STM study data that were 

collected during the 1990s and 

originally used in creating the SNF PPS 

case-mix classification system and casemix indexes. As explained in greater 

detail below, we then performed a 

budget neutrality analysis, and 

increased the RUG–53 case-mix weights 

so that overall payments under the two 

models (the original 44-group model 

and the refined 53-group model) could 

be expected to be equal. 

In the following section of this final 

rule, we discuss the adjustments to the 

RUG–53 case-mix indexes structure that 

we proposed in our FY 2009 proposed 

rule. 

b. Development of the Case-Mix Indexes 

In the August 4, 2005 SNF PPS final 

rule for FY 2006 (70 FR 45032), we 

introduced two refinements to the SNF 

PPS: (1) Nine new case-mix groups to 

account for the care needs of 

beneficiaries requiring both extensive 

medical and rehabilitation services; and 

(2) an adjustment to reflect the 

variability in the use of non-therapy 

ancillaries (NTAs). We made these 

refinements by using the resource 

minute data from the original 44-group 

model to create a new set of relative 

weights, or case-mix indexes (CMIs), for 

the refined 53-group model. We then 

compared the two models to ensure that 

estimated total payments under the 53- 

group model would not be greater or 

less than the aggregate payments that 

would have been made under the 44- 

group model. 

As explained in the FY 2009 proposed 

rule (73 FR 25923), in conducting this 

analysis for the FY 2006 final rule, we 

used FY 2001 claims data (the most 

current data available at the time) to 

compare estimated aggregate payments 

under the 44-group and 53-group 

models. For each model, we multiplied 

the estimated case-mix adjusted base 

rate by the number of Medicare paid 

days attributable to each RUG group. 

For the 44-group RUG model, we used 

the actual 2001 paid claims data to 

determine the distribution of paid days. 

For the 53-group RUG model, we did 

not have any actual claims data, and 

had to estimate the number of days that 

would be distributed across the 53 

groups. Using our estimated 

distribution, we found that payments 

under the new 53-group model would 

be lower than under the original 44- 

group model. As the purpose of the 

refinement was to better allocate 

payment and not to reduce overall 

expenditures, we adjusted the new CMIs 

upward by applying a parity adjustment 

factor. In this way, we attempted to 

ensure that the RUG–III model was 

expanded in a budget-neutral manner 

(that is, one that would not cause any 

change in the overall level of 

expenditures). We then applied a 

second adjustment to the CMIs to 

account for the variability in the use of 

NTA services. These two adjustments 

resulted in a combined 17.9 percent 

increase in the CMIs that went into 

effect on January 1, 2006, as part of the 

case-mix refinement implementation. A 

detailed description of the methods 

used to make these two adjustments to 

the CMIs appears in the SNF PPS 

proposed rule for FY 2006 (70 FR 29077 

through 29078, May 19, 2005). 

While we took all reasonable 

precautions to establish an appropriate, 

budget neutral conversion from the 44- 

group to the 53-group classification 

model, we recognized that the analyses 

we used to compute the budget 

neutrality adjustment were based solely 

on estimated data and that actual 

experience could be significantly 

different. For this reason, in the SNF 

PPS final rule for FY 2006 (70 FR 45031, 

August 4, 2005), we committed to 

monitoring the accuracy and 

effectiveness of the CMIs used in the 53- 

group model. 

In monitoring recent claims data, we 

observed that actual expenditures were 

significantly higher than what we had 

projected using the 2001 data. In 


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particular, the proportion of dollars paid 

for patients who grouped in the highest 

paying RUG categories—combining high 

therapy with extensive services—greatly 

exceeded our projections. To determine 

why expenditures so greatly exceeded 

our projections, we repeated the budget 

neutrality analyses described earlier in 

this section (and as described in the FY 

2006 SNF PPS proposed rule (70 FR 

29077 through 29078, May 19, 2005)), 

using actual 2006 claims data to 

determine the distribution of paid days 

across the 53-group RUG model. For this 

analysis, we compared simulated 

calendar year (CY) 2006 payments (the 

first time period for which RUG–53 paid 

days data were available) to payments 

that would have been made under the 

RUG–44 model. As the introduction of 

the 9 new groups had not required a 

change to the MDS used to classify 

beneficiaries, we also had all of the data 

necessary to calculate accurately the 

distribution of paid days under the 

RUG–44 model. We found that 

estimated payments under the RUG–44 

model were still higher than under the 

RUG–53 model, but that our original 

projections had overstated the 

difference. In addition, as the original 

budget neutrality adjustment was 

overestimated, the percentage 

adjustment made to the case-mix 

weights (after the budget neutrality 

adjustment was made) to account for 

NTA variability also needed to be 

recalibrated. Using the actual 2006 data, 

we found that the adjustment necessary 

to achieve budget neutrality was an 

increase of 9.68 percent rather than the 

17.9 percent increase that had been in 

effect since January 2006. Thus, from 

January 2006 to the present, using the 

17.9 percent adjustment to the case-mix 

weights resulted in overpayments far 

exceeding our intention of paying in a 

budget neutral manner. For FY 2009, we 

estimate the amount of overpayment at 

$780 million. 

Although the 2001 data were the best 

source available at the time the FY 2006 

refinements were introduced, the 

distribution of paid days, a key 

component in adjusting the RUG–53 

case-mix weights, was based solely on 

estimated utilization. The 2006 data 

provide a more recent and a more 

accurate source of RUG–53 utilization 

based on actual utilization, and are an 

appropriate source to use for case-mix 

adjustment. 

We received a number of comments 

questioning our legal authority to 

recalibrate the case-mix weights, as well 

as questions on the methodology used to 

make the case-mix weight adjustments. 

In the following discussion, we present 

the concerns that the commenters raised 

on this issue, and we also take the 

opportunity to address a number of 

misconceptions about the proposed 

recalibration that the comments 

reflected. However, in view of the 

potential ramifications of this proposal 

and the complexity of the issues 

involved, we believe that it would be 

prudent to take additional time to 

evaluate the proposal in order to further 

consider consequences that may result 

from it. Accordingly, we are not 

proceeding with the proposed 

recalibration at this time, pending 

further analysis. We note that as we 

continue to evaluate this issue, we fully 

expect to implement such an adjustment 

in the future. The comments that we 

received on this issue, and our 

responses, are as follows: 

Comment: Several commenters stated 

that the need for the recalibration arose 

because CMS initial projections of 

utilization under the refined case-mix 

system proved to be inaccurate once 

actual utilization data became available. 

They then asserted that in view of this, 

the proposed recalibration represents a 

‘‘forecast error adjustment’’ that is not 

covered under the statutory authority to 

provide for an appropriate adjustment to 

account for case mix (section 

1888(e)(4)(G)(i) of the Act). 

Response: It would be incorrect to 

characterize the proposed recalibration 

as a ‘‘forecast error adjustment,’’ as that 

term refers solely to an adjustment that 

compensates for an inaccurate forecast 

of the annual inflation factor in the SNF 

market basket. By contrast, the proposed 

recalibration would serve to ensure that 

the 2006 case-mix refinements are 

implemented as intended. As such, it 

would be integral to the process of 

providing ‘‘* * * for an appropriate 

adjustment to account for case mix’’ that 

is based upon appropriate data in 

accordance with section 1888(e)(4)(G)(i) 

of the Act. 

Comment: A number of comments 

included references to the discussion of 

the 2006 case-mix refinements in the 

SNF PPS proposed rule for FY 2006 (70 

FR 29079, May 19, 2005), in which we 

explained that we were ‘‘* * * 

advancing these proposed changes 

under our authority in section 101(a) of 

the BBRA to establish case-mix 

refinements, and that the changes we 

are hereby proposing will represent the 

final adjustments made under this 

authority’’ (emphasis added). The 

commenters stated that this earlier 

description of the 2006 case-mix 

refinements as ‘‘final’’ effectively 

precludes CMS from proceeding with a 

recalibration, which they characterized 

as representing a further refinement. 

Similarly, several commenters also 

questioned our authority to recalibrate 

the case-mix system prior to the 

completion of the STRIVE staff time 

measurement (STM) project. In 

addition, several commenters 

questioned whether CMS has the 

authority to impose a budget neutrality 

requirement on the introduction of a 

new classification model. 

Response: We wish to clarify that the 

actual ‘‘refinement’’ that we proposed 

and implemented in the FY 2006 

rulemaking cycle consisted of our 

introduction of the 9 new Rehabilitation 

plus Extensive Services groups at the 

top of the previous, 44-group RUG 

hierarchy, along with the adjustment 

recognizing the variability of NTA use, 

which together fulfilled the provisions 

of section 101(a) of the BBRA. The 

accompanying adjustment to the casemix indexes (CMIs) was merely a 

vehicle through which we implemented 

that refinement. Rather than 

representing a new or further 

‘‘refinement’’ in itself, the proposed 

recalibration merely serves to ensure 

that we correctly accomplish a revision 

to the CMIs that accompanied the FY 

2006 case-mix refinements. 

In the FY 2006 final rule (70 FR 

45033, August 4, 2005), we addressed 

the introduction of the refinements 

within the broader context of ensuring 

payment accuracy and beneficiary 

access to care. We pointed out that 

* * * this incremental change is part of this 

ongoing process that will also include update 

activities such as the upcoming STM study 

and investigation of potential alternatives to 

the RUG system itself. However, the 

commitment to long term analysis and 

refinement should not preclude the 

introduction of more immediate 

methodological and policy updates. 

Finally, the budget neutrality factor 

was applied to the unadjusted RUG 53 

case-mix weights that were introduced 

in January 2006. As stated above, our 

initial analyses indicated that payments 

would be lower under the RUG–53 

model. As the purpose of the refinement 

was to reallocate payments, and not to 

reduce expenditures, we believe that 

increasing the case-mix weights to 

equalize payments under the two 

models is an appropriate exercise of our 

broad authority to establish an 

appropriate case-mix system. We further 

note that the FY 2006 refinement to the 

case-mix classification system using 

adjusted CMIs was implemented 

through the rulemaking process, and we 

received no comments on the use of a 

budget neutrality adjustment at that 

time. 

We also received a number of 

technical comments on the potential 

effects of implementing this 


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recalibration proposal on beneficiaries, 

providers, and the overall economy. 

These comments are summarized below. 

Comment: Some commenters opposed 

the recalibration of the budget neutrality 

adjustment, believing that the change to 

the case-mix weights would ‘‘take back’’

payments to providers that had 

increased due to changes in case mix 

between 2001 and 2006. Specifically, 

several commenters expressed the belief 

that by proposing to recalibrate the casemix weights put into place for the RUG–

53 system, we are incorrectly 

identifying increased payments related 

to treatment of higher case-mix patients 

with an overpayment related to the use 

of an incorrect budget neutrality 

adjustment factor applied in January 

2006. Another commenter believed that 

the proposed recalibration could be 

more accurately calculated using either 

2005 data or a combination of 2005 and 

2006 data. 

Response: We agree that, on average, 

the case-mix indexes for current SNF 

patients are higher than they were in 

2001. However, we believe this concern 

erroneously equates the introduction of 

a new classification model with the 

regular SNF PPS annual update process. 

Normally, changes in case mix are 

accommodated as the classification 

model identifies changes in case mix 

and assigns the appropriate RUG group. 

Actual payments will typically vary 

from projections since case-mix 

changes, which occur for a variety of 

reasons, cannot be anticipated in an 

impact analysis. 

However, in January 2006, we did 

more than just update the payment 

rates; we introduced a new 

classification model, the RUG–53 casemix system. As discussed above, the 

purpose of this refined model was to 

redistribute payments across the 53 

groups while maintaining the same total 

expenditure level that we would have 

incurred had we retained the original 

44-group RUG model. 

In testing the two models, we used 

2001 data because it was the best data 

we had available, and found that using 

the raw weights calculated for the RUG–

53 model, we could expect aggregate 

payments to decrease as a result of 

introducing the refinement. To prevent 

this expected reduction in Medicare 

expenditures, we applied an adjustment 

to the RUG–53 case-mix weights as 

described in detail earlier in this 

section. Later analysis using actual 2006 

data showed that, rather than achieving 

budget neutrality between the two 

models, expenditures were significantly 

higher than intended. For FY 2009, 

expenditures are estimated to be $780 

million higher than intended. 

We do not agree that updating our 

analysis using CY 2006 data captured 

payments related to increased case mix 

rather than establishing budget 

neutrality between the two models. 

First, by using 2006 data to estimate 

expenditures under both models, the 

same case-mix changes are incorporated 

into the estimated expenditure levels for 

RUG–44 as well as for RUG–53. Second, 

we believe it is appropriate to 

standardize the new model for the time 

period in which it is being introduced. 

The only reason we used 2001 data in 

the original calculation is that it was the 

best data available at the time. The CY 

2006 data allowed us to calibrate the 

RUG–53 model more precisely for its 

first year of operation. 

One commenter recommended using 

alternative time periods in calculating 

the budget neutrality adjustment. 

However, while it might be possible to 

use CY 2005 rather than CY 2006 data, 

using CY 2005 data still requires us to 

use a projection of the distributional 

shift to the nine new groups in the 

RUG–53 group model. We also looked at 

a second recommended alternative, 

which involved comparing quarterly 

data periods directly before and after 

implementation of the RUG–53 model; 

that is, October through December 2005 

for the RUG–44 model and January 

through March 2006 for the RUG–53 

model. Our preliminary analyses 

confirmed that the proposed 

recalibration would serve to ensure that 

the 2006 case-mix refinements are 

implemented as actually intended. 

However, we believe that using actual 

utilization data for CY 2006 is more 

accurate, since actual case mix during 

the calibration year is the basis for 

computing the case-mix adjustment. We 

have determined that using the 2006 

data instead of the suggested 

alternatives are the most appropriate to 

adopt. 

It is important to stress that this 

recalibration was not designed to adjust 

for aggregate payment differences that 

result from changes in the coding or 

classification of residents not reflective 

of real changes in case mix; that is, casemix creep. Monitoring the changes in 

case mix under RUG–53 over the years 

since RUG–53 has been in place is part 

of a longer-term effort. If we find that a 

pattern of coding or the classification of 

residents does not reflect real changes in 

case mix over several years, we would 

propose a documentation and coding 

adjustment, pursuant to § 1888(e)(4)(F) 

of the Act. By contrast, the original 

application of a budget neutrality factor 

and the recalibration of that factor 

discussed in this final rule represented 

the mechanism that we used to establish 

the appropriate baseline for 

expenditures under the refined 

classification model (that is, the change 

from RUG–44 to RUG–53). 

Comment: Some commenters argued 

against implementing the proposed 

recalibration, asserting that it is 

important to maintain Medicare SNF 

payments at their current levels in order 

to cross-subsidize what they 

characterized as inadequate payment 

rates for nursing facilities under the 

Medicaid program. Other commenters 

asserted that a shift in patients from 

Inpatient Rehabilitation Facilities (IRFs) 

to SNFs results in savings to the 

Medicare Trust Fund and that the 

current SNF spending levels are needed 

to treat the types of patients SNFs are 

now receiving. 

Response: Even though we are not 

moving forward at this time with the 

proposed recalibration, we wish to be 

clear that it is not the appropriate role 

of the Medicare SNF benefit to crosssubsidize nursing home payments made 

under the Medicaid program. We note 

that MedPAC stated it is inappropriate 

for the Medicare program’s SNF 

payments to cross-subsidize Medicaid 

nursing facility rates. Specifically, on 

page 152 of its March 2008 Report to the 

Congress on Medicare Payment Policy 

(which is available online at http:// 

medpac.gov/documents/ 

Mar08_EntireReport.pdf), MedPAC 

stated: 

There are several reasons why Medicare 

cross-subsidization is not advisable policy for 

the Medicare program. On average, Medicare 

payments accounted for 21 percent of 

revenues to freestanding SNFs in 2006. As a 

result, the policy would use a minority of 

Medicare payments to subsidize a majority of 

Medicaid payments. If Medicare were to pay 

still higher rates, facilities with high shares 

of Medicare payments—presumably the 

facilities that need revenues the least—would 

receive the most in subsidies from the higher 

Medicare payments. In other words, the 

subsidy would be poorly targeted. Given the 

variation among states in the level and 

method of nursing home payments, the 

impact of the subsidy would be highly 

variable; in states where Medicaid payments 

were adequate, it would have no positive 

impact. In addition, increasing Medicare’s 

payment rates could encourage states to 

reduce Medicaid payments further and, in 

turn, result in pressure to again raise 

Medicare rates. It could also encourage 

providers to select patients based on payer 

source or to rehospitalize dual-eligible 

patients so that they qualified for a Medicarecovered, and higher payment, stay. 

We agree with MedPAC and, 

therefore, do not agree with the 

commenters that cited cross-subsidizing 

Medicaid as a justification for 

maintaining Medicare SNF payments at 

any specific level. 


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Regarding the comments about a shift 

of patients from IRFs to SNFs producing 

savings to the Medicare Trust Fund, and 

the need to maintain current SNF 

spending levels to treat the types of 

patients SNFs are now receiving, we 

note that a basic principle of the SNF 

PPS is to pay appropriately for the 

services provided. CMS data are 

consistent with the commenters’

assertions that many patients formerly 

being treated in IRFs are now being 

treated in SNFs or Home Health 

Agencies. In fact, the CY 2006 

distribution used to recalibrate the casemix adjustments indicates that there are 

more patients in the 9 new RUGs than 

we originally anticipated and patients 

shifting from IRFs could be a partial 

explanation. 

Patients who shifted to SNFs or other 

settings from IRFs due to ‘‘75 Percent 

Rule’’ compliance percentage 

requirements represent a population 

that was not appropriate for IRF care, 

and CMS payments for those IRF stays 

would represent an overpayment to 

IRFs. For those former IRF patients who 

are appropriate for SNF care, we must 

pay the appropriate rate for the SNF 

services provided, and cannot use a 

reduction in IRF overpayments as a 

reason to increase payments under the 

SNF PPS. SNF patients with more 

intensive therapy and extensive service 

needs will be paid the higher amounts 

associated with the 9 new groups. While 

we are not moving forward with the 

proposed recalibration at this time, it is 

still important to understand that 

recalibrating CMIs would not change the 

relative nature of higher payments for 

patients using more staff resources and 

services. 

Comment: One commenter claimed 

that CMS did not make the data and 

analysis underlying the proposed 

recalibration of the budget neutrality 

adjustment publicly available. 

Response: We do not agree with the 

commenter’s assertion. The 

methodology used to establish the casemix adjustments is the same as that 

described in detail in the FY 2006 SNF 

PPS proposed rule (70 FR 29077 

through 29078, May 19, 2005). In 

addition, the data used to calculate the 

adjustments are publicly available on 

the CMS Web site. We used the CY 2006 

days of service (available in the 

downloads section of our Web site at 

http://www.cms.hhs.gov/SNFPPS/ 

02_Highlights.asp#TopOfPage) for both 

the RUG–44 and RUG–53 systems. We 

multiplied the CY 2006 days of service 

by the FY 2008 unadjusted Federal per 

diem payment rate components (72 FR 

43416) multiplied by the unadjusted 

case-mix indexes (available in the 

Downloads section of our Web site at 

http://www.cms.hhs.gov/SNFPPS/ 

09_RUGRefinement.asp#TopOfPage) to 

establish expenditures under the RUG–

44 and RUG–53 systems. The budget 

neutrality adjustment was determined 

as the percentage increase necessary for 

the nursing CMIs to generate estimated 

expenditure levels under the RUG–53 

system that were equal to estimated 

expenditure levels under the RUG–44 

system. We then calculated a second 

adjustment factor to increase the 

baseline by an amount that served to 

offset the variability in NTA utilization. 

As discussed above, we are confident 

that we employed the correct 

methodology to evaluate the accuracy 

with which we implemented the 2006 

refinements. However, in view of the 

widespread industry concern that a 

recalibration could potentially have 

adverse effects on beneficiaries and SNF 

clinical staff, and could negatively affect 

the quality of SNF care, we believe that 

the most prudent course is to continue 

to evaluate these issues carefully before 

proceeding. Thus, we will not proceed 

with the recalibration for FY 2009, but 

will instead continue to evaluate the 

data, and further consider consequences 

that may result from the recalibration. 

We note that as we continue to evaluate 

this issue, we fully expect to implement 

such an adjustment in the future. 

Therefore, for FY 2009, the case-mix 

indexes shown in Tables 4 and 5 below 

remain the same as those adopted in FY 

2006. As always, we list the case-mix 

adjusted payment rates separately for 

urban and rural SNFs, with the 

corresponding case-mix values. We note 

that these tables do not reflect the AIDS 

add-on enacted by section 511 of the 

MMA, which we apply only after 

making all other adjustments (wage and 

case-mix). 

TABLE 4—RUG–53 CASE-MIX ADJUSTED FEDERAL RATES AND ASSOCIATED INDEXES—URBAN

RUG–III category Nursing index Therapy index Nursing 

component 

Therapy 

component 

Non-case mix 

therapy comp 

Non-case mix 

component Total rate 

RUX ............................ 1 .9 2.25 288.31 257.18 ........................ 77.44 622.93 

RUL ............................ 1 .4 2.25 212.44 257.18 ........................ 77.44 547.06 

RVX ............................ 1 .54 1.41 233.68 161.16 ........................ 77.44 472.28 

RVL ............................ 1 .33 1.41 201.81 161.16 ........................ 77.44 440.41 

RHX ............................ 1 .42 0.94 215.47 107.44 ........................ 77.44 400.35 

RHL ............................ 1 .37 0.94 207.88 107.44 ........................ 77.44 392.76 

RMX ........................... 1 .93 0.77 292.86 88.01 ........................ 77.44 458.31 

RML ............................ 1 .68 0.77 254.92 88.01 ........................ 77.44 420.37 

RLX ............................ 1 .31 0.43 198.78 49.15 ........................ 77.44 325.37 

RUC ........................... 1 .28 2.25 194.23 257.18 ........................ 77.44 528.85 

RUB ............................ 0 .99 2.25 150.22 257.18 ........................ 77.44 484.84 

RUA ............................ 0 .84 2.25 127.46 257.18 ........................ 77.44 462.08 

RVC ............................ 1 .23 1.41 186.64 161.16 ........................ 77.44 425.24 

RVB ............................ 1 .09 1.41 165.40 161.16 ........................ 77.44 404.00 

RVA ............................ 0 .82 1.41 124.43 161.16 ........................ 77.44 363.03 

RHC ........................... 1 .22 0.94 185.12 107.44 ........................ 77.44 370.00 

RHB ............................ 1 .11 0.94 168.43 107.44 ........................ 77.44 353.31 

RHA ............................ 0 .94 0.94 142.64 107.44 ........................ 77.44 327.52 

RMC ........................... 1 .15 0.77 174.50 88.01 ........................ 77.44 339.95 

RMB ........................... 1 .09 0.77 165.40 88.01 ........................ 77.44 330.85 

RMA ........................... 1 .04 0.77 157.81 88.01 ........................ 77.44 323.26 

RLB ............................ 1 .14 0.43 172.98 49.15 ........................ 77.44 299.57 

RLA ............................ 0 .85 0.43 128.98 49.15 ........................ 77.44 255.57 

SE3 ............................ 1 .86 ........................ 282.24 ........................ 15.05 77.44 374.73 

SE2 ............................ 1 .49 ........................ 226.09 ........................ 15.05 77.44 318.58 

SE1 ............................ 1 .26 ........................ 191.19 ........................ 15.05 77.44 283.68 

SSC ............................ 1 .23 ........................ 186.64 ........................ 15.05 77.44 279.13 


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TABLE 4—RUG–53 CASE-MIX ADJUSTED FEDERAL RATES AND ASSOCIATED INDEXES—URBAN—Continued 

RUG–III category Nursing index Therapy index Nursing 

component 

Therapy 

component 

Non-case mix 

therapy comp 

Non-case mix 

component Total rate 

SSB ............................ 1 .13 ........................ 171.47 ........................ 15.05 77.44 263.96 

SSA ............................ 1 .1 ........................ 166.91 ........................ 15.05 77.44 259.40 

CC2 ............................ 1 .22 ........................ 185.12 ........................ 15.05 77.44 277.61 

CC1 ............................ 1 .06 ........................ 160.84 ........................ 15.05 77.44 253.33 

CB2 ............................ 0 .98 ........................ 148.71 ........................ 15.05 77.44 241.20 

CB1 ............................ 0 .91 ........................ 138.08 ........................ 15.05 77.44 230.57 

CA2 ............................ 0 .9 ........................ 136.57 ........................ 15.05 77.44 229.06 

CA1 ............................ 0 .8 ........................ 121.39 ........................ 15.05 77.44 213.88 

IB2 .............................. 0 .74 ........................ 112.29 ........................ 15.05 77.44 204.78 

IB1 .............................. 0 .72 ........................ 109.25 ........................ 15.05 77.44 201.74 

IA2 .............................. 0 .61 ........................ 92.56 ........................ 15.05 77.44 185.05 

IA1 .............................. 0 .56 ........................ 84.97 ........................ 15.05 77.44 177.46 

BB2 ............................ 0 .73 ........................ 110.77 ........................ 15.05 77.44 203.26 

BB1 ............................ 0 .69 ........................ 104.70 ........................ 15.05 77.44 197.19 

BA2 ............................ 0 .6 ........................ 91.04 ........................ 15.05 77.44 183.53 

BA1 ............................ 0 .52 ........................ 78.90 ........................ 15.05 77.44 171.39 

PE2 ............................ 0 .85 ........................ 128.98 ........................ 15.05 77.44 221.47 

PE1 ............................ 0 .82 ........................ 124.43 ........................ 15.05 77.44 216.92 

PD2 ............................ 0 .78 ........................ 118.36 ........................ 15.05 77.44 210.85 

PD1 ............................ 0 .76 ........................ 115.32 ........................ 15.05 77.44 207.81 

PC2 ............................ 0 .71 ........................ 107.74 ........................ 15.05 77.44 200.23 

PC1 ............................ 0 .69 ........................ 104.70 ........................ 15.05 77.44 197.19 

PB2 ............................ 0 .55 ........................ 83.46 ........................ 15.05 77.44 175.95 

PB1 ............................ 0 .54 ........................ 81.94 ........................ 15.05 77.44 174.43 

PA2 ............................ 0 .53 ........................ 80.42 ........................ 15.05 77.44 172.91 

PA1 ............................ 0 .5 ........................ 75.87 ........................ 15.05 77.44 168.36 

TABLE 5—RUG–53 CASE-MIX ADJUSTED FEDERAL RATES AND ASSOCIATED INDEXES—RURAL

RUG–III category Nursing index Therapy index Nursing 

component 

Therapy 

component 

Non-case mix 

therapy comp 

Non-case mix 

component Total rate 

RUX ............................ 1 .9 2.25 275.44 296.55 ........................ 78.87 650.86 

RUL ............................ 1 .4 2.25 202.96 296.55 ........................ 78.87 578.38 

RVX ............................ 1 .54 1.41 223.25 185.84 ........................ 78.87 487.96 

RVL ............................ 1 .33 1.41 192.81 185.84 ........................ 78.87 457.52 

RHX ............................ 1 .42 0.94 205.86 123.89 ........................ 78.87 408.62 

RHL ............................ 1 .37 0.94 198.61 123.89 ........................ 78.87 401.37 

RMX ........................... 1 .93 0.77 279.79 101.49 ........................ 78.87 460.15 

RML ............................ 1 .68 0.77 243.55 101.49 ........................ 78.87 423.91 

RLX ............................ 1 .31 0.43 189.91 56.67 ........................ 78.87 325.45 

RUC ........................... 1 .28 2.25 185.56 296.55 ........................ 78.87 560.98 

RUB ............................ 0 .99 2.25 143.52 296.55 ........................ 78.87 518.94 

RUA ............................ 0 .84 2.25 121.77 296.55 ........................ 78.87 497.19 

RVC ............................ 1 .23 1.41 178.31 185.84 ........................ 78.87 443.02 

RVB ............................ 1 .09 1.41 158.02 185.84 ........................ 78.87 422.73 

RVA ............................ 0 .82 1.41 118.88 185.84 ........................ 78.87 383.59 

RHC ........................... 1 .22 0.94 176.86 123.89 ........................ 78.87 379.62 

RHB ............................ 1 .11 0.94 160.92 123.89 ........................ 78.87 363.68 

RHA ............................ 0 .94 0.94 136.27 123.89 ........................ 78.87 339.03 

RMC ........................... 1 .15 0.77 166.72 101.49 ........................ 78.87 347.08 

RMB ........................... 1 .09 0.77 158.02 101.49 ........................ 78.87 338.38 

RMA ........................... 1 .04 0.77 150.77 101.49 ........................ 78.87 331.13 

RLB ............................ 1 .14 0.43 165.27 56.67 ........................ 78.87 300.81 

RLA ............................ 0 .85 0.43 123.22 56.67 ........................ 78.87 258.76 

SE3 ............................ 1 .86 ........................ 269.64 ........................ 16.08 78.87 364.59 

SE2 ............................ 1 .49 ........................ 216.01 ........................ 16.08 78.87 310.96 

SE1 ............................ 1 .26 ........................ 182.66 ........................ 16.08 78.87 277.61 

SSC ............................ 1 .23 ........................ 178.31 ........................ 16.08 78.87 273.26 

SSB ............................ 1 .13 ........................ 163.82 ........................ 16.08 78.87 258.77 

SSA ............................ 1 .1 ........................ 159.47 ........................ 16.08 78.87 254.42 

CC2 ............................ 1 .22 ........................ 176.86 ........................ 16.08 78.87 271.81 

CC1 ............................ 1 .06 ........................ 153.67 ........................ 16.08 78.87 248.62 

CB2 ............................ 0 .98 ........................ 142.07 ........................ 16.08 78.87 237.02 

CB1 ............................ 0 .91 ........................ 131.92 ........................ 16.08 78.87 226.87 

CA2 ............................ 0 .9 ........................ 130.47 ........................ 16.08 78.87 225.42 

CA1 ............................ 0 .8 ........................ 115.98 ........................ 16.08 78.87 210.93 

IB2 .............................. 0 .74 ........................ 107.28 ........................ 16.08 78.87 202.23 

IB1 .............................. 0 .72 ........................ 104.38 ........................ 16.08 78.87 199.33 

IA2 .............................. 0 .61 ........................ 88.43 ........................ 16.08 78.87 183.38 


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TABLE 5—RUG–53 CASE-MIX ADJUSTED FEDERAL RATES AND ASSOCIATED INDEXES—RURAL—Continued 

RUG–III category Nursing index Therapy index Nursing 

component 

Therapy 

component 

Non-case mix 

therapy comp 

Non-case mix 

component Total rate 

IA1 .............................. 0 .56 ........................ 81.18 ........................ 16.08 78.87 176.13 

BB2 ............................ 0 .73 ........................ 105.83 ........................ 16.08 78.87 200.78 

BB1 ............................ 0 .69 ........................ 100.03 ........................ 16.08 78.87 194.98 

BA2 ............................ 0 .6 ........................ 86.98 ........................ 16.08 78.87 181.93 

BA1 ............................ 0 .52 ........................ 75.38 ........................ 16.08 78.87 170.33 

PE2 ............................ 0 .85 ........................ 123.22 ........................ 16.08 78.87 218.17 

PE1 ............................ 0 .82 ........................ 118.88 ........................ 16.08 78.87 213.83 

PD2 ............................ 0 .78 ........................ 113.08 ........................ 16.08 78.87 208.03 

PD1 ............................ 0 .76 ........................ 110.18 ........................ 16.08 78.87 205.13 

PC2 ............................ 0 .71 ........................ 102.93 ........................ 16.08 78.87 197.88 

PC1 ............................ 0 .69 ........................ 100.03 ........................ 16.08 78.87 194.98 

PB2 ............................ 0 .55 ........................ 79.73 ........................ 16.08 78.87 174.68 

PB1 ............................ 0 .54 ........................ 78.28 ........................ 16.08 78.87 173.23 

PA2 ............................ 0 .53 ........................ 76.83 ........................ 16.08 78.87 171.78 

PA1 ............................ 0 .5 ........................ 72.49 ........................ 16.08 78.87 167.44 

3. Wage Index Adjustment to Federal 

Rates 

Section 1888(e)(4)(G)(ii) of the Act 

requires that we adjust the Federal rates 

to account for differences in area wage 

levels, using a wage index that we find 

appropriate. Since the inception of a 

PPS for SNFs, we have used hospital 

wage data in developing a wage index 

to be applied to SNFs. In the FY 2009 

proposed rule, we proposed to continue 

that practice, as we continue to believe 

that in the absence of SNF-specific wage 

data, using the hospital inpatient wage 

index is appropriate and reasonable for 

the SNF PPS. As explained in the SNF 

PPS update notice for FY 2005 (69 FR 

45786, July 30, 2004), the SNF PPS does 

not use the hospital area wage index’s 

occupational mix adjustment, as this 

adjustment serves specifically to define 

the occupational categories more clearly 

in a hospital setting; moreover, the 

collection of the occupational wage data 

also excludes any wage data related to 

SNFs. Therefore, we believe that using 

the updated wage data exclusive of the 

occupational mix adjustment continues 

to be appropriate for SNF payments. 

Since the implementation of the SNF 

PPS, as set forth in § 413.337(a)(1)(ii), a 

SNF’s wage index is determined based 

on the location of the SNF in an urban 

or rural area as defined in § 413.333 and 

further defined in § 412.62(f)(1)(ii) and 

§ 412.62(f)(1)(iii) as urban and rural 

areas, respectively. In the SNF PPS final 

rule for FY 2006 (70 FR 45041, August 

4, 2005), we adopted revised labor 

market area definitions based on CoreBased Statistical Area (CBSAs). At the 

time, we noted that these were the same 

labor market area definitions (based on 

OMB’s new CBSA designations) 

implemented under the Hospital 

Inpatient Prospective Payment System 

(IPPS) at § 412.64(b), which were 

effective for those hospitals beginning 

October 1, 2004, as discussed in the 

IPPS final rule for FY 2005 (69 FR at 

49026 through 49034, August 11, 2004). 

In the FY 2006 SNF PPS final rule, we 

inadvertently omitted making a 

conforming regulation text change to 

§ 413.333. However, this did not alter 

our decision to follow the IPPS 

definitions of urban and rural. In the FY 

2009 proposed rule, we proposed to 

make that conforming regulation text 

change to revise the definitions for rural 

and urban areas effective for services 

provided on or after October 1, 2005, to 

reference the regulations at 

§§ 412.64(b)(1)(ii)(A) through (C), 

consistent with the revision under the 

IPPS. 

Comments on the wage index 

adjustment to the Federal rates, and our 

responses to those comments, are as 

follows: 

Comment: A few commenters 

recommended that CMS develop a SNFspecific wage index. Other commenters 

asked CMS to consider adopting certain 

wage index policies in use under the 

acute IPPS, because SNFs compete in a 

similar labor pool as acute care 

hospitals. The commenters indicated 

that adoption of these measures under 

the SNF PPS would allow SNFs to 

benefit from the IPPS geographic 

reclassification and/or rural floor 

policies. (A discussion of the IPPS 

reclassification and floor policies 

appears on our Web site at http:// 

www.cms.hhs.gov/AcuteInpatientPPS/ 

01_overview.asp.) 

Response: The regulations that govern 

the SNF PPS currently do not provide 

a mechanism for allowing providers to 

seek geographic reclassification. 

Moreover, as we have explained in the 

past (most recently, in the SNF PPS 

final rule for FY 2008 (72 FR 43420, 

August 3, 2007)), while section 315 of 

the Benefits Improvement and 

Protection Act of 2000 (BIPA, Pub. L. 

106–554) does authorize us to establish 

such a reclassification methodology 

under the SNF PPS, it additionally 

stipulates that such reclassification 

cannot be implemented until we have 

collected the data necessary to establish 

a SNF-specific wage index. This, in 

turn, has proven to be infeasible due to 

‘‘* * * the volatility of existing SNF 

wage data and the significant amount of 

resources that would be required to 

improve the quality of that data’’ (72 FR 

43420, August 3, 2007). We continue to 

believe that these factors make it 

unlikely for such an approach to yield 

meaningful improvements in our ability 

to determine facility payments, or to 

justify the significant increase in 

administrative resources as well as 

burden on providers that this type of 

data collection would involve. 

In addition, we reviewed the 

Medicare Payment Advisory 

Commission’s (MedPAC) wage index 

recommendations as discussed in 

MedPAC’s June 2007 report entitled, 

‘‘Report to Congress: Promoting Greater 

Efficiency in Medicare.’’ Although some 

commenters recommend that we adopt 

the IPPS wage index policies such as 

reclassification and floor policies, we 

note that MedPAC’s June 2007 report to 

Congress recommends that Congress 

‘‘repeal the existing hospital wage index 

statute, including reclassification and 

exceptions, and give the Secretary 

authority to establish new wage index 

systems.’’ We believe that adopting the 

IPPS wage index policies (such as 

reclassification or floor) would not be 

prudent at this time, because MedPAC 

suggests that the reclassification and 

exception policies in the IPPS wage 

index alters the wage index values for 

one-third of IPPS hospitals. In addition, 

MedPAC found that the exceptions may 


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lead to anomalies in the wage index. By 

adopting the IPPS reclassification and 

exceptions at this time, the SNF PPS 

wage index could become vulnerable to 

problems similar to those that MedPAC 

identified in their June 2007 Report to 

Congress. However, we will continue to 

review and consider MedPAC’s 

recommendations on a refined or 

alternative wage index methodology for 

the SNF PPS in future years. 

We also note that section 106(b)(2) of 

the Medicare Improvements and 

Extension Act (MIEA) of 2006 (which is 

Division B of the Tax Relief and Health 

Care Act (TRHCA) of 2006, Pub. L. 109–

432, collectively referred to as ‘‘MIEA–

TRHCA’’) required the Secretary of 

Health and Human Services, taking into 

account MedPAC’s recommendations on 

the Medicare wage index classification 

system, to include in the FY 2009 IPPS 

proposed rule one or more proposals to 

revise the wage index adjustment 

applied under section 1886(d)(3)(E) of 

the Act for purposes of the IPPS. To 

assist CMS in meeting the requirements 

of section 106(b)(2) of MIEA–TRHCA, in 

February 2008, CMS awarded a Task 

Order under its Expedited Research and 

Demonstration Contract, to Acumen, 

LLC. A comparison of the current IPPS 

wage index and MedPAC’s are 

presented in the FY 2009 IPPS final 

rule. We plan to continue monitoring 

wage index research efforts and the 

impact or influence they may have for 

the SNF PPS wage index. Moreover, in 

light of all of the pending research and 

review of wage index issues in general, 

we believe that it would be premature 

at this time to initiate review of a SNFspecific wage index. 

a. Clarification of New England Deemed 

Counties 

As we discussed in the SNF PPS 

proposed rule for FY 2009 (73 FR 25926, 

May 7, 2008), two New England 

counties (Litchfield County, CT and 

Merrimack County, NH) are deemed to 

be urban areas under section 601(g) of 

the Social Security Amendments of 

1983, yet are considered rural by OMB 

definitions. We proposed to clarify the 

treatment of these two New England 

counties in accordance with the FY 

2008 IPPS final rule with comment 

period (72 FR 47337 through 47338, 

August 22, 2007), which revised the 

regulations at § 412.64(b)(1)(ii)(B) so 

that these counties are no longer 

considered urban, effective for 

discharges occurring on or after October 

1, 2007. A more detailed discussion of 

this proposal appears in the SNF PPS 

proposed rule for FY 2009 (73 FR 

24926). We note that all post-acute care 

payment systems are clarifying this 

policy to create consistency among 

provider types. 

We received no comments on this 

aspect of the proposed rule, and we are 

proceeding with this technical 

clarification as proposed with no 

change. Therefore, we are treating these 

counties as rural for purposes of the 

SNF PPS. 

b. Multi-Campus Hospital Wage Index 

Data 

When a multi-campus hospital has 

campuses located in different labor 

market areas, wages and hours are 

reported in a single labor market area 

(CBSA) even though the hospital’s staff 

is working at campuses in more than 

one labor market area. Currently, the 

wage data are reported in the labor 

market area of the hospital campus 

associated with the provider number. In 

the SNF PPS proposed rule for FY 2009 

(73 FR 25926, May 7, 2008), we 

described a change in the way wage data 

for multi-campus hospitals located in 

different labor market areas (CBSAs) 

would be apportioned, consistent with a 

FY 2008 change in the IPPS rule. The 

IPPS wage data used to determine the 

FY 2009 SNF wage index apportion the 

wage data for multi-campus hospitals 

located in different labor market areas 

(CBSAs) to each CBSA where the 

campuses are located (72 FR 47317 

through 47320, August 22, 2007). A 

more detailed discussion of this 

proposal appears in the SNF PPS 

proposed rule for FY 2009 (73 FR 

24926). Adopting the treatment of this 

data is consistent with our use of the 

pre-floor, pre-reclassified IPPS wage 

data. 

We received no comments on this 

aspect of the proposed rule and we are 

adopting this policy as proposed 

without change, consistent with our use 

of IPPS wage data. The wage index 

values for the FY 2009 SNF PPS are 

affected by this policy. 

We also proposed to continue using 

the same methodology discussed in the 

SNF PPS final rule for FY 2008 (72 FR 

43423) to address those geographic areas 

in which there are no hospitals and, 

thus, no hospital wage index data on 

which to base the calculation of the FY 

2009 SNF PPS wage index. For rural 

geographic areas that do not have 

hospitals and, therefore, lack hospital 

wage data on which to base an area 

wage adjustment, we would use the 

average wage index from all contiguous 

CBSAs as a reasonable proxy. This 

methodology is used to construct the 

wage index for rural Massachusetts. 

However, as discussed in the FY 2008 

SNF PPS proposed rule (72 FR 25539, 

May 4, 2007), we are not applying this 

methodology to rural Puerto Rico due to 

the distinct economic circumstances 

that exist there, but instead will 

continue using the most recent wage 

index previously available for that area. 

For urban areas without specific 

hospital wage index data, we will use 

the average wage indexes of all of the 

urban areas within the State to serve as 

a reasonable proxy for the wage index 

of that urban CBSA. The only urban area 

without wage index data available is 

CBSA (25980) Hinesville-Fort Stewart, 

GA. We received no comments on this 

issue and are finalizing our policy as 

proposed without change. 

In summary, in the FY 2009 proposed 

rule, we proposed to use the FY 2009 

wage index data (collected from cost 

reports submitted by hospitals for cost 

reporting periods beginning during FY 

2005) to adjust SNF PPS payments 

beginning October 1, 2008. We also 

proposed to continue our policies for 

calculating wage indexes for areas 

without hospitals. We are finalizing the 

wage index and associated policies as 

proposed for the SNF PPS for FY 2009 

without change. These data reflect the 

multi-campus and New England 

deemed counties policies discussed 

above. 

To calculate the SNF PPS wage index 

adjustment, we apply the wage index 

adjustment to the labor-related portion 

of the Federal rate, which is 69.783 

percent of the total rate. This percentage 

reflects the labor-related relative 

importance for FY 2009, using the 

revised and rebased FY 2004-based 

market basket. The labor-related relative 

importance for FY 2008 was 70.249, as 

shown in Table 11. We calculate the 

labor-related relative importance from 

the SNF market basket, and it 

approximates the labor-related portion 

of the total costs after taking into 

account historical and projected price 

changes between the base year and FY 

2009. The price proxies that move the 

different cost categories in the market 

basket do not necessarily change at the 

same rate, and the relative importance 

captures these changes. Accordingly, 

the relative importance figure more 

closely reflects the cost share weights 

for FY 2009 than the base year weights 

from the SNF market basket. 

We calculate the labor-related relative 

importance for FY 2009 in four steps. 

First, we compute the FY 2009 price 

index level for the total market basket 

and each cost category of the market 

basket. Second, we calculate a ratio for 

each cost category by dividing the FY 

2009 price index level for that cost 

category by the total market basket price 

index level. Third, we determine the FY 

2009 relative importance for each cost 


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category by multiplying this ratio by the 

base year (FY 2004) weight. Finally, we 

add the FY 2009 relative importance for 

each of the labor-related cost categories 

(wages and salaries, employee benefits, 

non-medical professional fees, laborintensive services, and a portion of 

capital-related expenses) to produce the 

FY 2009 labor-related relative 

importance. Tables 6 and 7 below show 

the Federal rates by labor-related and 

non-labor-related components. 

TABLE 6—RUG–53 CASE-MIX ADJUSTED FEDERAL RATES FOR URBAN SNFS BY LABOR AND NON-LABOR COMPONENT

RUG–III category Total rate Labor 

portion 

Non-labor 

portion 

RUX ............................................................................................................................................. 622.93 434.70 188.23 

RUL .............................................................................................................................................. 547.06 381.75 165.31 

RVX .............................................................................................................................................. 472.28 329.57 142.71 

RVL .............................................................................................................................................. 440.41 307.33 133.08 

RHX ............................................................................................................................................. 400.35 279.38 120.97 

RHL .............................................................................................................................................. 392.76 274.08 118.68 

RMX ............................................................................................................................................. 458.31 319.82 138.49 

RML ............................................................................................................................................. 420.37 293.35 127.02 

RLX .............................................................................................................................................. 325.37 227.05 98.32 

RUC ............................................................................................................................................. 528.85 369.05 159.80 

RUB ............................................................................................................................................. 484.84 338.34 146.50 

RUA ............................................................................................................................................. 462.08 322.45 139.63 

RVC ............................................................................................................................................. 425.24 296.75 128.49 

RVB .............................................................................................................................................. 404.00 281.92 122.08 

RVA .............................................................................................................................................. 363.03 253.33 109.70 

RHC ............................................................................................................................................. 370.00 258.20 111.80 

RHB ............................................................................................................................................. 353.31 246.55 106.76 

RHA ............................................................................................................................................. 327.52 228.55 98.97 

RMC ............................................................................................................................................. 339.95 237.23 102.72 

RMB ............................................................................................................................................. 330.85 230.88 99.97 

RMA ............................................................................................................................................. 323.26 225.58 97.68 

RLB .............................................................................................................................................. 299.57 209.05 90.52 

RLA .............................................................................................................................................. 255.57 178.34 77.23 

SE3 .............................................................................................................................................. 374.73 261.50 113.23 

SE2 .............................................................................................................................................. 318.58 222.31 96.27 

SE1 .............................................................................................................................................. 283.68 197.96 85.72 

SSC .............................................................................................................................................. 279.13 194.79 84.34 

SSB .............................................................................................................................................. 263.96 184.20 79.76 

SSA .............................................................................................................................................. 259.40 181.02 78.38 

CC2 .............................................................................................................................................. 277.61 193.72 83.89 

CC1 .............................................................................................................................................. 253.33 176.78 76.55 

CB2 .............................................................................................................................................. 241.20 168.32 72.88 

CB1 .............................................................................................................................................. 230.57 160.90 69.67 

CA2 .............................................................................................................................................. 229.06 159.84 69.22 

CA1 .............................................................................................................................................. 213.88 149.25 64.63 

IB2 ................................................................................................................................................ 204.78 142.90 61.88 

IB1 ................................................................................................................................................ 201.74 140.78 60.96 

IA2 ................................................................................................................................................ 185.05 129.13 55.92 

IA1 ................................................................................................................................................ 177.46 123.84 53.62 

BB2 .............................................................................................................................................. 203.26 141.84 61.42 

BB1 .............................................................................................................................................. 197.19 137.61 59.58 

BA2 .............................................................................................................................................. 183.53 128.07 55.46 

BA1 .............................................................................................................................................. 171.39 119.60 51.79 

PE2 .............................................................................................................................................. 221.47 154.55 66.92 

PE1 .............................................................................................................................................. 216.92 151.37 65.55 

PD2 .............................................................................................................................................. 210.85 147.14 63.71 

PD1 .............................................................................................................................................. 207.81 145.02 62.79 

PC2 .............................................................................................................................................. 200.23 139.73 60.50 

PC1 .............................................................................................................................................. 197.19 137.61 59.58 

PB2 .............................................................................................................................................. 175.95 122.78 53.17 

PB1 .............................................................................................................................................. 174.43 121.72 52.71 

PA2 .............................................................................................................................................. 172.91 120.66 52.25 

PA1 .............................................................................................................................................. 168.36 117.49 50.87 

TABLE 7—RUG–53 CASE-MIX ADJUSTED FEDERAL RATES FOR RURAL SNFS BY LABOR AND NON-LABOR COMPONENT

RUG–III category Total rate Labor 

portion 

Non-labor 

portion 

RUX ................................................................................................................................................................. 650.86 454.19 196.67 

RUL .................................................................................................................................................................. 578.38 403.61 174.77 

RVX .................................................................................................................................................................. 487.96 340.51 147.45 

RVL .................................................................................................................................................................. 457.52 319.27 138.25 

RHX ................................................................................................................................................................. 408.62 285.15 123.47 

RHL .................................................................................................................................................................. 401.37 280.09 121.28 


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TABLE 7—RUG–53 CASE-MIX ADJUSTED FEDERAL RATES FOR RURAL SNFS BY LABOR AND NON-LABOR COMPONENT—

Continued 

RUG–III category Total rate Labor 

portion 

Non-labor 

portion 

RMX ................................................................................................................................................................. 460.15 321.11 139.04 

RML ................................................................................................................................................................. 423.91 295.82 128.09 

RLX .................................................................................................................................................................. 325.45 227.11 98.34 

RUC ................................................................................................................................................................. 560.98 391.47 169.51 

RUB ................................................................................................................................................................. 518.94 362.13 156.81 

RUA ................................................................................................................................................................. 497.19 346.95 150.24 

RVC ................................................................................................................................................................. 443.02 309.15 133.87 

RVB .................................................................................................................................................................. 422.73 294.99 127.74 

RVA .................................................................................................................................................................. 383.59 267.68 115.91 

RHC ................................................................................................................................................................. 379.62 264.91 114.71 

RHB ................................................................................................................................................................. 363.68 253.79 109.89 

RHA ................................................................................................................................................................. 339.03 236.59 102.44 

RMC ................................................................................................................................................................. 347.08 242.20 104.88 

RMB ................................................................................................................................................................. 338.38 236.13 102.25 

RMA ................................................................................................................................................................. 331.13 231.07 100.06 

RLB .................................................................................................................................................................. 300.81 209.91 90.90 

RLA .................................................................................................................................................................. 258.76 180.57 78.19 

SE3 .................................................................................................................................................................. 364.59 254.42 110.17 

SE2 .................................................................................................................................................................. 310.96 217.00 93.96 

SE1 .................................................................................................................................................................. 277.61 193.72 83.89 

SSC .................................................................................................................................................................. 273.26 190.69 82.57 

SSB .................................................................................................................................................................. 258.77 180.58 78.19 

SSA .................................................................................................................................................................. 254.42 177.54 76.88 

CC2 .................................................................................................................................................................. 271.81 189.68 82.13 

CC1 .................................................................................................................................................................. 248.62 173.49 75.13 

CB2 .................................................................................................................................................................. 237.02 165.40 71.62 

CB1 .................................................................................................................................................................. 226.87 158.32 68.55 

CA2 .................................................................................................................................................................. 225.42 157.30 68.12 

CA1 .................................................................................................................................................................. 210.93 147.19 63.74 

IB2 .................................................................................................................................................................... 202.23 141.12 61.11 

IB1 .................................................................................................................................................................... 199.33 139.10 60.23 

IA2 .................................................................................................................................................................... 183.38 127.97 55.41 

IA1 .................................................................................................................................................................... 176.13 122.91 53.22 

BB2 .................................................................................................................................................................. 200.78 140.11 60.67 

BB1 .................................................................................................................................................................. 194.98 136.06 58.92 

BA2 .................................................................................................................................................................. 181.93 126.96 54.97 

BA1 .................................................................................................................................................................. 170.33 118.86 51.47 

PE2 .................................................................................................................................................................. 218.17 152.25 65.92 

PE1 .................................................................................................................................................................. 213.83 149.22 64.61 

PD2 .................................................................................................................................................................. 208.03 145.17 62.86 

PD1 .................................................................................................................................................................. 205.13 143.15 61.98 

PC2 .................................................................................................................................................................. 197.88 138.09 59.79 

PC1 .................................................................................................................................................................. 194.98 136.06 58.92 

PB2 .................................................................................................................................................................. 174.68 121.90 52.78 

PB1 .................................................................................................................................................................. 173.23 120.89 52.34 

PA2 .................................................................................................................................................................. 171.78 119.87 51.91 

PA1 .................................................................................................................................................................. 167.44 116.84 50.60 

Section 1888(e)(4)(G)(ii) of the Act 

also requires that we apply this wage 

index in a manner that does not result 

in aggregate payments that are greater or 

less than would otherwise be made in 

the absence of the wage adjustment. For 

FY 2009 (Federal rates effective October 

1, 2008), we apply an adjustment to 

fulfill the budget neutrality requirement. 

We meet this requirement by 

multiplying each of the components of 

the unadjusted Federal rates by a budget 

neutrality factor equal to the ratio of the 

weighted average wage adjustment 

factor for FY 2008 to the weighted 

average wage adjustment factor for FY 

2009. For this calculation, we use the 

same 2006 claims utilization data for 

both the numerator and denominator of 

this ratio. We define the wage 

adjustment factor used in this 

calculation as the labor share of the rate 

component multiplied by the wage 

index plus the non-labor share of the 

rate component. The final budget 

neutrality factor for this year is 1.0009. 

The wage index applicable to FY 2009 

appears in Tables 8 and 9, which are 

included in the Addendum of this final 

rule. 

In the FY 2006 SNF PPS final rule (70 

FR 45026, August 4, 2005), we adopted 

the changes discussed in the Office of 

Management and Budget (OMB) 

Bulletin No. 03–04 (June 6, 2003), 

available online at http:// 

www.whitehouse.gov/omb/bulletins/ 

b03-04.html, which announced revised 

definitions for Metropolitan Statistical 

Areas (MSAs), and the creation of 

Micropolitan Statistical Areas and 

Combined Statistical Areas. In addition, 

OMB published subsequent bulletins 

regarding CBSA changes, including 

changes in CBSA numbers and titles. As 

indicated in the FY 2008 SNF PPS final 

rule (72 FR 43423, August 3, 2007), this 

and all subsequent SNF PPS rules and 

notices are considered to incorporate 

the CBSA changes published in the 

most recent OMB bulletin that applies 

to the hospital wage data used to 

determine the current SNF PPS wage 

index. The OMB bulletins may be 


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accessed online at http:// 

www.whitehouse.gov/omb/bulletins/ 

index.html. 

In adopting the OMB CBSA 

geographic designations, we provided 

for a 1-year transition with a blended 

wage index for all providers. For FY 

2006, the wage index for each provider 

consisted of a blend of 50 percent of the 

FY 2006 MSA-based wage index and 50 

percent of the FY 2006 CBSA-based 

wage index (both using FY 2002 

hospital data). We referred to the 

blended wage index as the FY 2006 SNF 

PPS transition wage index. As discussed 

in the SNF PPS final rule for FY 2006 

(70 FR 45041), subsequent to the 

expiration of this 1-year transition on 

September 30, 2006, we used the full 

CBSA-based wage index values, as now 

presented in Tables 8 and 9 in the 

Addendum to this final rule. 

4. Updates to the Federal Rates 

In accordance with section 

1888(e)(4)(E) of the Act, as amended by 

section 311 of the BIPA, the payment 

rates in this final rule reflect an update 

equal to the full SNF market basket, 

estimated at 3.4 percentage points. We 

continue to disseminate the rates, wage 

index, and case-mix classification 

methodology through the Federal 

Register before the August 1 that 

precedes the start of each succeeding 

FY. 

5. Relationship of RUG-III Classification 

System to Existing Skilled Nursing 

Facility Level-of-Care Criteria 

As discussed in § 413.345, we include 

in each update of the Federal payment 

rates in the Federal Register the 

designation of those specific RUGs 

under the classification system that 

represent the required SNF level of care, 

as provided in § 409.30. This 

designation reflects an administrative 

presumption under the refined RUG–53 

classification system that beneficiaries 

who are correctly assigned to one of the 

upper 35 of the RUG–53 groups on the 

initial 5-day, Medicare-required 

assessment are automatically classified 

as meeting the SNF level of care 

definition up to and including the 

assessment reference date on that 

assessment. 

A beneficiary assigned to any of the 

lower 18 groups is not automatically 

classified as either meeting or not 

meeting the definition, but instead 

receives an individual level of care 

determination using the existing 

administrative criteria. This 

presumption recognizes the strong 

likelihood that beneficiaries assigned to 

one of the upper 35 groups during the 

immediate post-hospital period require 

a covered level of care, which would be 

significantly less likely for those 

beneficiaries assigned to one of the 

lower 18 groups. 

In this final rule, we are continuing 

the designation of the upper 35 groups 

for purposes of this administrative 

presumption, consisting of the following 

RUG–53 classifications: All groups 

within the Rehabilitation plus Extensive 

Services category; all groups within the 

Ultra High Rehabilitation category; all 

groups within the Very High 

Rehabilitation category; all groups 

within the High Rehabilitation category; 

all groups within the Medium 

Rehabilitation category; all groups 

within the Low Rehabilitation category; 

all groups within the Extensive Services 

category; all groups within the Special 

Care category; and, all groups within the 

Clinically Complex category. 

6. Example of Computation of Adjusted 

PPS Rates and SNF Payment 

Using the hypothetical SNF XYZ 

described in Table 10 below, the 

following shows the adjustments made 

to the Federal per diem rate to compute 

the provider’s actual per diem PPS 

payment. SNF XYZ’s 12-month cost 

reporting period begins October 1, 2008. 

SNF XYZ’s total PPS payment would 

equal $30,968. The Labor and Non-labor 

columns are derived from Table 6. 

TABLE 10—RUG–53 SNF XYZ: LOCATED IN CEDAR RAPIDS, IA (URBAN CBSA 16300) WAGE INDEX: 0.8924 

RUG group Labor Wage 

index Adj. labor Non-labor Adj. rate Percent adj 

Medicare 

days Payment 

RVX .............................................. $329.57 0.8919 $293.94 $142.71 $436.65 $436.65 14 $6,113.00 

RLX .............................................. 227.05 0.8919 202.51 98.32 300.83 300.83 30 9,025.00 

RHA .............................................. 228.55 0.8919 203.84 98.97 302.81 302.81 16 4,845.00 

CC2 .............................................. 193.72 0.8919 172.78 83.89 256.67 * 585.21 10 5,852.00 

IA2 ................................................ 129.13 0.8919 115.17 55.92 171.09 171.09 30 5,133.00 

100 30,968.00 

* Reflects a 128 percent adjustment from section 511 of the MMA. 

7. Other Issues 

In the SNF PPS proposed rule for FY 

2009 (73 FR 25930, May 7, 2008), we 

discussed several issues that relate to 

the SNF PPS for which we made no 

specific proposals, but solicited 

comments. These issues are noted 

below. 

a. Staff Time and Resource Intensity 

Verification (STRIVE) Project 

The SNF PPS proposed rule for FY 

2009 (73 FR 25930, May 7, 2008) 

included a more detailed discussion of 

the current status of the STRIVE project. 

Specific comments on this issue, and 

our responses to those comments, are as 

follows: 

Comment: Specifically referencing the 

STRIVE Technical Expert Panel (TEP) 

described in the proposed rule, one 

commenter expressed concern about 

whether registered nurses (RNs) have 

been adequately represented in the 

STRIVE process. 

Response: We understand that nurses 

have been well represented as the 

STRIVE contractor has sought input 

from a variety of individual 

stakeholders. Two RNs directly 

representing nursing associations have 

attended STRIVE TEPs as observers, 

who not only observe the proceedings, 

but can also offer comments and ask 

questions of the STRIVE team. Other 

people with backgrounds as RNs 

constitute a significant percentage of 

TEP attendees overall. In fact, the 

STRIVE contractor has received insights 

from RNs attending not only as 

observers, but as participants, who 

directly interact with the STRIVE team 

during TEP presentations. 

Comment: One commenter voiced 

concerns regarding whether STRIVE 

collected the RN staff time associated 

with residents separately from that of 

other personnel; for example, LPNs and 

nursing aides. 

Response: STRIVE collected all 

nursing staff time over 2 days using 

personal digital assistants (PDAs). In 

each PDA, the name of each nursing 

staff member was linked to his or her 


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individual job title (including RN, LPN, 

and CNA). STRIVE does not represent 

the first instance in which CMS (or, 

rather, its predecessor, HCFA) has 

separately tracked different nursing staff 

positions as it collected time data. In the 

FY 2006 refinements that added nine 

new RUG categories, CMS calculated 

case-mix indexes based on nursing staff 

time collected in the prior time studies. 

That data accounted for three different 

disciplines: RNs, LPNs, and Aides. In 

fact, CMS published on its Web site a 

spreadsheet containing populationweighted time for each of those three 

positions. These data appear on the 

RUG refinement page of the SNF PPS 

Web site: http://www.cms.hhs.gov/ 

SNFPPS/09_RUG

Refinement.asp#TopOfPage. Under 

‘‘Downloads’’ near the bottom of the 

page, that data can be unzipped after 

linking to Unadjusted nursing weights 

[Zip, 15kb]. 

b. Minimum Data Set (MDS) 3.0 

The SNF PPS proposed rule for FY 

2009 (73 FR 25931, May 7, 2008) 

included a more detailed discussion of 

the new version (3.0) of the MDS that is 

currently under development. Specific 

comments, and our responses to those 

comments, are as follows: 

Comment: One commenter was 

concerned that because CMS does not 

currently require a resident assessment 

instrument to be completed at 

admission and at discharge, the changes 

in a patient’s condition cannot be 

accurately measured and outcomes 

assessed, making it more difficult to tie 

Medicare’s payments to patient 

outcomes. 

Response: We note that the current 

SNF PPS is based upon the amount of 

resources used by a particular patient 

due to their unique clinical needs, and 

that it is not an outcome-based system. 

However, as noted in section III.B.7.c. of 

this final rule, we are currently 

evaluating the appropriateness of 

introducing certain pay for performance 

initiatives in the SNF setting. In the 

interim, although the current SNF PPS 

design does not provide for the 

completion of an assessment at 

admission and then again at discharge, 

the current Post Acute Care Payment 

Reform Demonstration (PAC–PRD) does 

provide for this. It is our intention to 

monitor this particular aspect of the 

PAC–PRD to determine both its 

administrative and financial impact, in 

order to understand the effect it could 

have on SNFs should it be adopted 

under the SNF PPS. 

Comment: A commenter 

recommended revising the MDS to 

gather information solely about services 

furnished during the SNF stay, so that 

payments to SNFs are not based on 

services provided during the preceding 

hospital stay. Another stated that the 

draft MDS 3.0 represents an excellent 

modification of the current MDS, and 

applauded CMS for retaining the 

critically necessary look-back periods 

that, in their view, help clinicians more 

thoroughly evaluate and follow-up on 

conditions and treatments related to the 

hospital stay. 

Response: The development of the 

MDS 3.0 has been and will continue to 

be a collaborative effort designed to 

maximize the quality of care provided to 

Medicare beneficiaries and to ensure 

proper payment under the SNF PPS. 

Under the STRIVE project, we are 

currently assessing each of the data 

elements used in the payment 

methodology, as well as other items that 

may affect resource utilization. We 

appreciate the commenter’s concern and 

also recognize the role of clinicians in 

ensuring proper care, and will take 

these comments into consideration as 

we finalize the design of the MDS 3.0. 

Comment: One commenter 

recommended that CMS change the look 

back period for therapies in section O 

on the MDS 3.0 from 5 days to 7 days, 

as it is currently on the MDS 2.0. The 

same commenter suggested that we 

continue to collect minutes for 

respiratory therapy on the MDS 3.0. 

Response: We note that, contrary to 

the commenter’s impression, CMS did 

not change the look back for therapy 

services on the MDS 3.0 to 5 days. In 

fact, the instructions for Section O4—

Therapies states ‘‘Record the number of 

days each of the following therapies was 

administered for at least 15 minutes a 

day in the last 7 Days’’ (emphasis 

added). The January draft version of the 

MDS 3.0 appears at the following link: 

http://www.cms.hhs.gov/ 

NursingHomeQualityInits/Downloads/ 

MDS30DraftVersion.pdf. We will post 

the CMS Draft MDS 2.0/3.0 Crosswalk 

on the CMS web site. This draft version 

contains all of the items that potentially 

may appear in the final version of the 

MDS 3.0. We have added an item to 

collect the minutes of respiratory 

therapy services, as well as other items. 

The CMS Draft MDS 2.0/3.0 Crosswalk 

(July 2008) will be available on the MDS 

3.0 Web site, which appears at the 

following link: http://www.cms.hhs.gov/ 

NursingHomeQualityInits/ 

25_NHQIMDS30.asp. 

c. Integrated Post Acute Care Payment 

In the proposed rule, we discussed 

our ongoing examination of possible 

steps toward achieving a more seamless 

system for the delivery and payment of 

post-acute care (PAC) services in 

various care settings. These include the 

PAC Payment Reform Demonstration 

(PAC–PRD) and its standardized patient 

assessment tool, the Continuity 

Assessment Record and Evaluation 

(CARE) tool. In the related area of valuebased purchasing (VBP) initiatives, we 

described the IPPS preventable hospitalacquired conditions (HAC) payment 

provision, which is designed to ensure 

that the occurrence of selected, 

preventable conditions during 

hospitalization does not have the 

unintended effect of generating higher 

Medicare payments under the IPPS. We 

then discussed the potential application 

of this same underlying principle to 

other care settings in addition to IPPS 

hospitals. For a more detailed 

discussion of this issue as it pertains to 

the SNF setting, we refer readers to the 

SNF PPS proposed rule for FY 2009 (73 

FR 25932, May 7, 2008). 

The comments that we received, and 

our responses to those comments, are as 

follows: 

Comment: We received several 

comments concerning the use of the 

CARE tool. While most of these 

comments acknowledged that the CARE 

tool holds long-term promise in terms of 

potentially facilitating the efficient flow 

of secure electronic patient information, 

they also cautioned that it would be far 

too premature at this point in time to 

draw any definitive conclusions about 

its use, given the very early stage of the 

research currently being conducted in 

this area. 

Response: We agree with the 

commenters’ observations about the 

CARE tool, both in terms of its 

significant future potential and the need 

to await the results of ongoing research 

before reaching any specific conclusions 

about its use. We will continue to 

evaluate the CARE tool closely during 

the remainder of the current 

demonstration, and we plan to keep the 

commenters’ concerns in mind as we 

proceed with our research in this area. 

Comment: A number of commenters 

stressed the need for external research 

in the area of PAC payment reform, as 

well as the importance of obtaining 

input from the stakeholder community. 

Response: We agree with the 

commenters regarding the value of 

obtaining stakeholder input, and believe 

that this is, in fact, crucial to the success 

of our PAC payment reform efforts. We 

also recognize the importance of 

obtaining the benefit of all available 

findings from any research that is 

currently underway. We note that our 

own activities in this regard primarily 

involve applied research through our 

demonstration projects and internal 


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analysis of changes in program policy. 

However, we also encourage interested 

parties to engage in external research 

projects on PAC payment reform. 

Comment: We received a number of 

comments regarding the HAC payment 

provision under the IPPS, and the 

possible adoption of a similar approach 

in care settings other than IPPS 

hospitals. The commenters 

recommended that CMS conduct a 

thorough evaluation of the HAC policy’s 

implementation under the IPPS to 

determine its actual impact and efficacy 

before considering whether to adopt this 

type of approach in other care settings. 

Some commenters also questioned the 

legal authority under existing Medicare 

law to expand the HAC payment 

provision beyond the IPPS hospital 

setting. Other commenters raised 

concerns about the specific implications 

of applying this type of policy to the 

SNF setting. They cited hospitalacquired infections, dementia, and falls 

as examples of things that might be less 

appropriately characterized as ‘‘never 

events’’ in long-term care settings than 

in the acute setting. These commenters 

also observed that it would be unfair to 

penalize a SNF financially for a 

condition that actually developed 

during the preceding hospital stay but 

was not detected until after transfer to 

the SNF. 

One commenter specifically noted 

that a SNF should not be expected to 

assume the financial liability for the 

care of a resident’s decubitus ulcer if it 

was acquired during the preceding 

hospital stay. In addition, the 

commenters indicated that it may be 

difficult to differentiate a preventable 

healthcare-acquired complication from a 

normal, unavoidable aspect of a 

terminal illness, and also asserted that 

it is difficult to define the extent to 

which an adverse event is ‘‘reasonably 

preventable.’’

Response: We appreciate the 

commenters’ thoughtful input about 

application of the principal embodied in 

the IPPS HAC payment provision to the 

SNF setting. While we acknowledge that 

infections, dementia, and falls are 

among the selected HACs in the IPPS 

acute care setting that potentially have 

relevance for the SNF setting as well, we 

agree that these and other conditions 

may have different implications in the 

SNF setting. We agree with the 

commenters that it would be unfair to 

penalize a SNF financially for a 

condition that developed in another 

care setting. We note that the IPPS HAC 

payment provision uses Present on 

Admission (POA) indicator data to 

exclude from payment those conditions 

that develop outside of the IPPS acute 

care stay, and a similar mechanism 

would be needed to apply this type of 

payment provision to the SNF setting 

should such an approach be adopted 

there. Regarding the commenters’

concerns about the difficulty of 

determining which adverse events are 

‘‘reasonably preventable,’’ we would 

expect to work closely with 

stakeholders to determine which 

conditions could reasonably be 

prevented through the application of 

evidence-based guidelines. With regard 

to the comments that questioned the 

existing legal authority for expanding 

the HAC payment provision beyond the 

IPPS hospital setting, we note that in 

this final rule, we are not establishing 

any new Medicare policies in this area. 

However, we will keep the commenters’

concerns in mind as our 

implementation of VBP for all Medicare 

payment systems proceeds. We look 

forward to working with stakeholders in 

continuing to explore possible ways to 

reduce the occurrence of these 

preventable conditions in various care 

settings. Finally, we note that in 

addition to the comments on those 

aspects of PAC payment reform and 

VBP that we discussed in the proposed 

rule, we also received some comments 

on the current Nursing Home VBP 

Demonstration (referenced previously in 

the SNF PPS update notice for FY 2007 

(71 FR 43172, July 31, 2006); however, 

those comments, which offered specific 

suggestions about the design and 

conduct of the demonstration, are 

beyond the scope of this rulemaking. 

8. Miscellaneous Technical Corrections 

and Clarifications 

In the FY 2009 proposed rule, we set 

forth certain technical corrections and 

clarifications, as discussed below. 

a. Bad Debt Payments 

In the SNF PPS proposed rule for FY 

2009 (73 FR 25932, May 7, 2008), we 

proposed to make a technical revision in 

the regulations text at § 413.335(b), in 

order to reflect our longstanding policy 

regarding Medicare bad debt payments 

to SNFs. 

We received no comments on this 

aspect of the proposed rule. We are 

proceeding with this technical 

correction as proposed with no change. 

b. Additional Clarifications 

In the FY 2009 proposed rule (73 FR 

25932 through 25933, May 7, 2008), we 

also discussed the following 

clarifications in two other areas: 

• The circumstances under which a 

SNF is paid at the ‘‘default rate,’’ a 

reduced payment made in lieu of the 

full SNF PPS rate that would have been 

payable had the SNF’s resident been 

assessed in a timely manner; and 

• The role of rehabilitation services 

evaluations in SNFs. 

The comments that we received, and 

our responses, are as follows: 

Comment: One commenter asserted 

that in some of the circumstances that 

we specified as triggering payment of 

the default rate (for example, when the 

SNF does not receive timely notification 

of a Medicare Secondary Payer denial, 

or of the revocation of a payment ban), 

the SNF is not at fault and, accordingly, 

should be permitted to complete an 

assessment retroactively. 

Response: We note that SNFs are not 

permitted to backdate any portion of the 

medical record, including the resident 

assessment. It is for precisely this reason 

that we strongly encourage SNFs to 

follow the Medicare-required 

assessment schedule in any instance 

where there is even a possibility of 

Medicare payment; otherwise, the SNF 

risks being paid at the default rate. We 

also note that if a SNF has performed an 

‘‘OBRA’’ assessment (that is, one 

conducted to meet the basic assessment 

schedule prescribed in the nursing 

home reform provisions of OBRA 1987 

rather than the supplemental SNF PPS 

schedule for Medicare-required 

assessments) during this period which 

also happens to fall within the window 

for a Medicare-required assessment, the 

OBRA assessment can be used for 

Medicare payment purposes as well. 

Comment: One commenter was 

concerned that CMS did not allow the 

billing of the default code when a SNF 

PPS assessment is inadvertently 

omitted, referring to an instruction in 

the Resident Assessment Instrument 

(RAI) regarding the use of the default 

code when an assessment was not 

completed. The commenter also asked 

whether there is a time limit on the 

filing of a late assessment. 

Response: To bill for Part A services 

provided under the SNF PPS, the SNF 

is required to submit a HIPPS rate code 

and the assessment reference date (ARD) 

associated with the applicable RAI on 

the claim, except as provided in the five 

specific circumstances described in the 

FY 2009 proposed rule (73 FR 25933), 

under which payment is available at the 

default rate. In order to obtain the 

HIPPS code, the SNF is required to 

submit the RAI to the State RAI 

database, and to receive a Final 

Validation Report prior to filing the 

claim in order to establish the correct 

RUG code for billing purposes. For these 

reasons, the SNF cannot simply bill the 

default code if it misses a Medicarerequired assessment. Instead, we have 

always provided for payment at the 


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default rate for what is referred to as a 

‘‘late assessment.’’ A late assessment 

occurs when the ARD for the Medicarerequired assessment is set outside of the 

prescribed assessment window. In order 

to bill the default code, the SNF must 

prepare a late assessment that is 

completed prior to the date of discharge 

from Medicare Part A. If no assessment 

is completed prior to discharge from 

Medicare Part A, no payment is made. 

The statement in the RAI that the 

commenter cited is more fully described 

in the situations set forth in Chapter 2, 

Section 2.9 of the RAI. We are currently 

in the process of revising the RAI 

instructions to ensure greater clarity. 

Comment: One commenter expressed 

the belief that CMS was further 

penalizing SNFs for not completing 

Medicare-required assessments by 

having the SNF absorb all of the liability 

for SNF-level care provided to their 

beneficiaries, by limiting the use of the 

default code (outside of a late 

assessment) to the following situations: 

• When the stay is less than 8 days 

within a spell of illness (that is, benefit 

period); 

• The SNF is notified on an untimely 

basis or is unaware of a Medicare 

Secondary Payer denial; 

• The SNF is notified on an untimely 

basis of the revocation of a payment 

ban; 

• The beneficiary requests a demand 

bill; or, 

• The SNF is notified on an untimely 

basis or is unaware of a beneficiary’s 

disenrollment from a Medicare 

Advantage program. 

Response: As we stated in the FY 

2009 proposed rule (73 FR 25933), 

program instructions have been issued 

through the Provider Reimbursement 

Manual and the Medicare Claims 

Processing Manual since the inception 

of the SNF PPS to allow for the use of 

the default code in the first four 

situations described above. The 

proposed rule simply reiterated these 

policies in order to remind providers of 

the procedures on the use of the default 

code in circumstances other than that of 

a late assessment. We also took this 

opportunity to clarify that in those 

situations where a beneficiary was 

enrolled in a Medicare Advantage (MA) 

plan and the SNF was subsequently 

unaware or notified untimely of a 

beneficiary’s disenrollment from an MA 

plan, the SNF could use the default 

code to receive payment for services 

provided. 

Comment: One commenter asked that 

CMS explain why the default code is 

allowed to be billed when the stay is 

less than 8 days within a spell of illness 

(that is, benefit period) when the 

beneficiary dies or is discharged. 

Response: In those situations where 

the beneficiary dies or is discharged 

before day 8 of the covered stay upon 

initial admission to the SNF following 

the qualifying three-day hospital stay, 

CMS has instructed SNFs either to 

complete an assessment to the best of 

their ability or to submit a claim using 

the default rate without the necessity of 

completing an assessment. The decision 

to allow for payment at the default rate 

without the completion of an 

assessment in this case is predicated on 

the administrative presumption that the 

beneficiary meets the SNF level of care 

requirements through the ARD on the 

Medicare-required 5-day assessment 

completed upon initial admission 

following the qualifying three-day 

hospital stay. The ARD on a Medicarerequired 5-day assessment must be set 

no later than the eighth day of the 

covered stay. 

Comment: A commenter asked that 

CMS explain why the default code is 

allowed to be billed when a beneficiary 

requests that the SNF submit a demand 

bill. 

Response: As stated above, a HIPPS 

rate code must be present on the claim 

in order to receive payment under the 

SNF PPS. However, a SNF is not 

required to assess a beneficiary to 

classify that beneficiary into a RUG 

using the RAI when the SNF determines 

that the care is noncovered, or where 

the beneficiary has not met the technical 

requirements for a SNF stay. Therefore, 

a SNF may submit a claim using the 

default code in order to ensure payment 

in the event that the SNF’s 

determination of noncoverage is 

subsequently reversed. 

Comment: A commenter requested 

clarification of the term ‘‘most recent 

clinical assessment,’’ in the context of 

current program instructions that 

provide for payment at other than the 

default rate when the SNF is notified 

untimely or is unaware of a Medicare 

secondary payer (MSP) denial or the 

revocation of a payment ban. The 

commenter also requested guidance on 

how to handle an untimely notification 

of a beneficiary’s disenrollment from a 

Medicare Advantage program. The 

commenter additionally requested clear 

instructions on the proper way to use 

clinical assessments in place of 

Medicare PPS assessments when the 

‘‘most recent clinical assessment’’ does 

not accurately represent the level of 

resources currently being utilized by the 

beneficiary (including the number of 

days that can be billed using the ‘‘most 

recent clinical assessment’’). 

Response: A SNF that finds itself in 

these circumstances had no reason to 

expect payment under the SNF PPS and 

is generally not required to perform 

Medicare-required assessments; as a 

result, the SNF is left without a HIPPS 

code that would be required to bill for 

payment under the SNF PPS. 

Instructions relating to MSP denials in 

the Provider Reimbursement Manual 

and revocation of payment bans in the 

Medicare Claims Processing Manual 

have allowed SNFs to use the most 

recent assessment that was completed in 

accordance with the schedule outlined 

in 42 CFR 483.20(b)(4) in order to 

receive payment under the Medicare 

program. However, the commenter 

makes a valid point in asking whether 

it is proper to submit an MDS that does 

not reflect the level of resources 

currently being utilized by beneficiaries. 

After careful consideration of this 

question, we are revising our policy to 

allow the 14-day assessment required 

under 42 CFR 483.20(b)(4) to be used to 

bill for all days of covered care 

associated with a Medicare-required 5- 

day and 14-day assessment. This is the 

case even if the beneficiary is no longer 

receiving therapy services that were 

identified under the most recent clinical 

assessment. For covered days associated 

with the Medicare-required 30-, 60-, or 

90-day assessment, the SNF must have 

an assessment that falls within the 

window of the Medicare-required 

assessment in order to receive full 

payment at the RUG level in which the 

resident grouped. If no assessment was 

completed, the SNF may submit a claim 

requesting payment at the default rate. 

This revision recognizes that the level 

of resources used by a resident changes 

throughout the stay, and that the 14-day 

assessment required under 

§ 483.20(b)(4) is less likely to represent 

the beneficiary’s clinical status later in 

the stay. 

We will also apply this policy to 

situations where the SNF is notified on 

an untimely basis or is unaware of a 

beneficiary’s disenrollment from a 

Medicare Advantage program. 

Comment: A commenter asked if 

guidance involving the ‘‘special 

payment modifiers’’ was forthcoming, 

noting that it was overdue. 

Response: Instructions are currently 

being revised to provide for the proper 

use of the ‘‘special payment modifiers.’’

Comment: One commenter wanted to 

know, if a SNF can demonstrate that an 

ARD was determined on a document 

other than the MDS, whether the SNF 

could use such documentation to ‘‘set’’

the ARD in order to avoid payment at 

the default rate. 


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Response: It is not acceptable to 

backdate an MDS or to use any 

documentation other than the MDS 

itself to establish the ARD. 

Comment: In a situation where the 

SNF receives no payment under Part A 

because it fails to do Medicare-required 

assessment before the date of discharge 

from Medicare Part A, a commenter 

questioned whether the SNF could bill 

Medicare Part B for services rendered, 

as the SNF would receive no Part A 

reimbursement. 

Response: In situations where the 

SNF fails to assess the beneficiary and 

fails to issue the proper Notification of 

Non-Coverage, the SNF is liable for all 

services normally covered under the 

Medicare Part A benefit. Since the 

beneficiary is receiving benefits, the 

days will be considered Part A days and 

charged against the beneficiary’s benefit 

period. The SNF may collect any 

applicable copayment amounts. 

Services that would have been payable 

to the SNF as Part A benefits cannot be 

billed to either the FI or the carrier as 

Part B services. 

Comment: A commenter questioned 

why CMS was issuing a technical 

clarification regarding the requirement 

for a therapy evaluation before therapy 

minutes can be counted in Section P 

and Section T of the MDS. The 

commenter was concerned that while 

the proposed change appears to be 

consistent with the practices of its 

therapy members, questions have been 

raised as to whether in making this 

clarification, CMS inadvertently may be 

changing the instructions for Subpart T 

as they relate to projected therapy 

services. 

Response: Due to several recent 

inquiries on the need for therapy 

evaluations, we sought to ensure that 

SNFs and other non-therapy ancillary 

providers are clear as to the requirement 

for a therapy evaluation for each 

discipline before minutes can be 

included on the MDS on Section P and 

Section T. Moreover, in the case of 

Section T, the projection must be based 

upon the evaluation performed for each 

discipline that reflects the needs of the 

patient. 

IV. The Skilled Nursing Facility Market 

Basket Index 

Section 1888(e)(5)(A) of the Act 

requires us to establish a SNF market 

basket index (input price index) that 

reflects changes over time in the prices 

of an appropriate mix of goods and 

services included in the SNF PPS. In the 

FY 2009 proposed rule, we stated that 

the proposed rule incorporated the 

latest available projections of the SNF 

market basket index. In this final rule, 

we are updating projections based on 

the latest available projections at the 

time of publication. Accordingly, we 

have developed a SNF market basket 

index that encompasses the most 

commonly used cost categories for SNF 

routine services, ancillary services, and 

capital-related expenses. 

Each year, we calculate a revised 

labor-related share based on the relative 

importance of labor-related cost 

categories in the input price index. 

Table 11 below summarizes the final 

updated labor-related share for FY 2009. 

TABLE 11—LABOR-RELATED RELATIVE IMPORTANCE, FY 2008 AND FY 2009 

Relative importance, 

labor-related, 

FY 2008 (04 index) 

07:2 forecast 

Relative importance, 

labor-related, 

FY 2009 (04 index) 

08:2 forecast 

Wages and salaries ................................................................................................................. 51.218 51.003 

Employee benefits ................................................................................................................... 11.720 11.547 

Nonmedical professional fees ................................................................................................. 1.333 1.331 

Labor-intensive services .......................................................................................................... 3.456 3.434 

Capital-related (.391) ............................................................................................................... 2.522 2.468 

Total .................................................................................................................................. 70.249 69.783 

Source: Global Insight, Inc., formerly DRI–WEFA. 

A. Use of the Skilled Nursing Facility 

Market Basket Percentage 

Section 1888(e)(5)(B) of the Act 

defines the SNF market basket 

percentage as the percentage change in 

the SNF market basket index from the 

average of the previous FY to the 

average of the current FY. For the 

Federal rates established in this final 

rule, we use the percentage increase in 

the SNF market basket index to compute 

the update factor for FY 2009. We use 

the Global Insight, Inc. (GII, formerly 

DRI–WEFA), 2nd quarter 2008 (2008q2) 

forecasted percentage increase in the FY 

2004-based SNF market basket index for 

routine, ancillary, and capital-related 

expenses, described in the previous 

section, to compute the update factor. 

Finally, as discussed previously in 

section I.A. of this final rule, we no 

longer compute update factors to adjust 

a facility-specific portion of the SNF 

PPS rates because the initial three-phase 

transition period from facility-specific 

to full Federal rates that started with 

cost reporting periods beginning in July 

1998 has expired. 

B. Market Basket Forecast Error 

Adjustment 

As discussed in the FY 2004 

supplemental proposed rule (68 FR 

34768, June 10, 2003) and finalized in 

the FY 2004 final rule (68 FR 46067, 

August 4, 2003), regulations at 

§ 413.337(d)(2) provide for an 

adjustment to account for market basket 

forecast error. The initial adjustment 

applied to the update of the FY 2003 

rate for FY 2004, and took into account 

the cumulative forecast error for the 

period from FY 2000 through FY 2002. 

Subsequent adjustments in succeeding 

FYs take into account the forecast error 

from the most recently available FY for 

which there is final data, and apply 

whenever the difference between the 

forecasted and actual change in the 

market basket exceeds a specified 

threshold. We originally used a 0.25 

percentage point threshold for this 

purpose; however, for the reasons 

specified in the FY 2008 SNF PPS final 

rule (72 FR 43425, August 3, 2007), we 

adopted a 0.5 percentage point 

threshold effective with FY 2008. As 

discussed previously in section I.F.2. of 

this final rule, as the difference between 

the estimated and actual amounts of 

increase in the market basket index for 

FY 2007 (the most recently available FY 

for which there is final data) does not 

exceed the 0.5 percentage point 

threshold, the payment rates for FY 

2009 do not include a forecast error 

adjustment. 

The following is a specific comment 

that we received on the market basket 

forecast error adjustment, and our 

response: 


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Comment: A few commenters 

suggested that CMS apply a cumulative 

forecast error to account for all of the 

variations in the market basket forecasts 

since FY 2004 (that is, as of when CMS 

implemented the market basket forecast 

error correction policy.) 

Response: For FY 2004, CMS applied 

a one-time, cumulative forecast error 

correction of 3.26 percent (68 FR 

46036). Since that time, the forecast 

errors have been relatively small and 

clustered near zero. We believe the 

forecast error correction should be 

applied only when the forecast error in 

any given year reflects a percentage 

such that the SNF PPS base payment 

rate does not adequately reflect the 

historical price changes faced by SNFs. 

We continue to believe that the forecast 

error adjustment mechanism should 

appropriately be reserved for the type of 

major, unexpected change that initially 

gave rise to this policy, rather than the 

minor variances that are a routine and 

inherent aspect of this type of statistical 

measurement. 

C. Federal Rate Update Factor 

Section 1888(e)(4)(E)(ii)(IV) of the Act 

requires that the update factor used to 

establish the FY 2009 Federal rates be 

at a level equal to the full market basket 

percentage change. Accordingly, to 

establish the update factor, we 

determined the total growth from the 

average market basket level for the 

period of October 1, 2007 through 

September 30, 2008 to the average 

market basket level for the period of 

October 1, 2008 through September 30, 

2009. Using this process, the market 

basket update factor for FY 2009 SNF 

Federal rates is 3.4 percent. We used 

this update factor to compute the 

Federal portion of the SNF PPS rate 

shown in Tables 2 and 3. 

We received one comment expressing 

support for our proposed full market 

basket increase for FY 2009. We thank 

the commenter and again note that the 

final update factor for FY 2009 is 3.4 

percent. 

V. Consolidated Billing 

Section 4432(b) of the BBA 

established a consolidated billing 

requirement that places with the SNF 

itself the Medicare billing responsibility 

for virtually all of the services that the 

SNF’s residents receive, except for a 

small number of services that the statute 

specifically identifies as being excluded 

from this provision. Section 103 of the 

BBRA amended this provision by 

further excluding a number of 

individual ‘‘high-cost, low-probability’’

services, identified by the Healthcare 

Common Procedure Coding System 

(HCPCS) codes, within several broader 

categories (chemotherapy and its 

administration, radioisotope services, 

and customized prosthetic devices) that 

otherwise remained subject to the 

provision. We discuss this BBRA 

amendment in greater detail in the FY 

2001 SNF PPS proposed rule (65 FR 

19231 through 19232, April 10, 2000), 

and the FY 2001 SNF PPS final rule (65 

FR 46790 through 46795, July 31, 2000), 

as well as in Program Memorandum 

AB–00–18 (Change Request #1070), 

issued March 2000, which is available 

online at http://www.cms.hhs.gov/ 

transmittals/downloads/ab001860.pdf. 

Section 313 of the BIPA further 

amended this provision by repealing its 

Part B aspect; that is, its applicability to 

services furnished to a resident during 

a SNF stay that Medicare does not 

cover. (However, physical, 

occupational, and speech-language 

therapy remain subject to consolidated 

billing, regardless of whether the 

resident who receives these services is 

in a covered Part A stay.) We discuss 

this BIPA amendment in greater detail 

in the FY 2002 SNF PPS proposed rule 

(66 FR 24020 through 24021, May 10, 

2001), and the FY 2002 SNF PPS final 

rule (66 FR 39587 through 39588, July 

31, 2001). 

In addition, section 410 of the MMA 

amended this provision by excluding 

certain practitioner and other services 

furnished to SNF residents by RHCs and 

FQHCs. We discuss this MMA 

amendment in greater detail in the SNF 

PPS update notice for FY 2005 (69 FR 

45818 through 45819, July 30, 2004), as 

well as in Program Transmittal #390 

(Change Request #3575), issued 

December 10, 2004, which is available 

online at http://www.cms.hhs.gov/ 

transmittals/downloads/r390cp.pdf. 

To date, the Congress has enacted no 

further legislation affecting the 

consolidated billing provision. 

However, as noted above and explained 

in the FY 2001 SNF PPS proposed rule 

(65 FR 19232, April 10, 2000), the 

amendments enacted in section 103 of 

the BBRA not only identified for 

exclusion from this provision a number 

of particular service codes within four 

specified categories (that is, 

chemotherapy items, chemotherapy 

administration services, radioisotope 

services, and customized prosthetic 

devices), but also gave the Secretary 

‘‘* * * the authority to designate 

additional, individual services for 

exclusion within each of the specified 

service categories.’’ In the FY 2001 SNF 

PPS proposed rule, we also noted that 

the BBRA Conference report (H.R. Rep. 

No. 106–479 at 854 (1999) (Conf. Rep.)) 

characterizes the individual services 

that this legislation targets for exclusion 

as, ‘‘* * * high-cost, low probability 

events that could have devastating 

financial impacts because their costs far 

exceed the payment [SNFs] receive 

under the prospective payment 

system* * *.’’ According to the 

conferees, section 103(a) ‘‘* * * is an 

attempt to exclude from the PPS certain 

services and costly items that are 

provided infrequently in SNFs * * * 

For example, * * * chemotherapy 

drugs [that] are not typically 

administered in a SNF, or are 

exceptionally expensive, or are given as 

infusions, thus requiring special staff 

expertise to administer.’’ By contrast, 

we noted that the Congress declined to 

designate for exclusion any of the 

remaining services within those four 

categories (thus leaving all of those 

services subject to SNF consolidated 

billing), because they ‘‘* * * are 

relatively inexpensive and are 

administered routinely in SNFs’’. 

As we further explained in the FY 

2001 SNF PPS final rule (65 FR 46790, 

July 31, 2000), any additional service 

codes that we might designate for 

exclusion under our discretionary 

authority must meet the same criteria 

that the Congress used in identifying the 

original codes excluded from 

consolidated billing under section 

103(a) of the BBRA: Our longstanding 

policy is that they must fall within one 

of the four service categories specified 

in the BBRA, and they also must meet 

the same standards of high cost and low 

probability in the SNF setting. 

Accordingly, we characterized this 

statutory authority to identify additional 

service codes for exclusion ‘‘ * * * as 

essentially affording the flexibility to 

revise the list of excluded codes in 

response to changes of major 

significance that may occur over time 

(for example, the development of new 

medical technologies or other advances 

in the state of medical practice)’’ (65 FR 

46791). In the FY 2009 proposed rule 

(73 FR 25934, May 7, 2008), we 

specifically invited public comments 

identifying codes in any of these four 

service categories (chemotherapy items, 

chemotherapy administration services, 

radioisotope services, and customized 

prosthetic devices) representing recent 

medical advances that might meet our 

criteria for exclusion from SNF 

consolidated billing. 

Specific comments on this issue and 

our responses to those comments are as 

follows: 

Comment: Several commenters 

submitted additional chemotherapy 

codes that they recommended for 

exclusion from consolidated billing. 


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Response: We note that the law (at 

section 1888(e)(2)(A)(iii)(II) of the Act) 

describes the chemotherapy code ranges 

that the BBRA identified for exclusion 

in terms of the version of the HCPCS 

codes that was in existence ‘‘as of July 

1, 1999.’’ In the SNF PPS final rule for 

FY 2006 (70 FR 45048, August 4, 2005), 

we reiterated our belief that the 

authority granted by the BBRA to 

identify additional codes for exclusion 

within this category was ‘‘* * * 

essentially affording the flexibility to 

revise the list of excluded codes in 

response to changes of major 

significance that may occur over time 

(for example, the development of new 

medical technologies or other advances 

in the state of medical practice)’’

(emphasis added). Accordingly, we 

view this discretionary authority as 

applying only to codes that were created 

subsequent to that point, and not to 

those codes that were in existence as of 

July 1, 1999. 

A review of the particular 

chemotherapy codes that commenters 

submitted in response to the proposed 

rule’s solicitation for comment revealed 

that many of them were codes that had 

already been submitted for 

consideration in previous years, and 

that we had previously decided not to 

exclude. Other codes that commenters 

submitted were themselves already in 

existence as of July 1, 1999, but did not 

fall within the specific code ranges 

statutorily designated for exclusion in 

the BBRA. As the statute does not 

specifically exclude these alreadyexisting codes, we are not adding them 

to the exclusion list. Most of the other 

codes submitted represent services that, 

for various reasons, do not meet the 

statutory criteria for exclusion. For 

example, some represent oral 

medications that can be administered 

routinely in SNFs and are not 

reasonably characterized as ‘‘requiring 

special staff expertise to administer.’’

Others represent drugs that are 

administered in conjunction with 

chemotherapy to address side effects 

such as nausea; however, as such drugs 

are not in themselves inherently 

chemotherapeutic in nature, they do not 

fall within the excluded chemotherapy 

category designated in the BBRA. 

Finally, some other codes that were 

submitted represent services that, in 

fact, are already excluded from 

consolidated billing under existing 

instructions. 

Comment: Although the FY 2008 SNF 

PPS proposed rule specifically invited 

comments on possible exclusions 

within the particular service categories 

identified in the BBRA legislation, a 

number of commenters took this 

opportunity to reiterate concerns about 

other aspects of consolidated billing. 

For example, some commenters 

reiterated past suggestions that CMS 

unbundle additional service categories 

such as specialized wound care 

procedures (including hyperbaric 

oxygen therapy) and ambulance 

services. Another commenter advocated 

the exclusion of custom fabricated 

orthotics, stating that in the absence of 

such an exclusion SNFs might deny 

access to needed orthotic treatments 

during the Medicare-covered portion of 

the stay. 

Response: As we have consistently 

stated (most recently, in the SNF PPS 

final rule for FY 2008 (72 FR 43431, 

August 3, 2007)), the BBRA authorizes 

us to identify additional services for 

exclusion only within those particular 

service categories—chemotherapy and 

its administration; radioisotope services; 

and, customized prosthetic devices (a 

term which does not encompass 

orthotics)—that it has designated for 

this purpose, and does not give us the 

authority to create additional categories 

of excluded services beyond those 

specified in the law. Accordingly, as the 

particular services that these 

commenters recommended for 

exclusion do not fall within one of the 

specific service categories designated for 

this purpose in the statute itself, these 

services remain subject to consolidated 

billing. Regarding the concern about the 

possibility of a SNF withholding access 

to a needed item or service during the 

covered portion of a stay because it is 

bundled, we note that the requirements 

for program participation at § 483.25 

require participating SNFs to provide 

the necessary care and services to attain 

or maintain each resident’s ‘‘* * * 

highest practicable state of physical, 

mental, and psychosocial well-being 

* * *.’’ Thus, a SNF which delays or 

denies access to needed care could 

jeopardize its Medicare program 

certification. 

Comment: One commenter stated that 

the existing exclusion of certain 

customized prosthetic devices should be 

expanded to encompass all prosthetics 

that are designated by an L code. 

Response: When the Congress enacted 

the selective consolidated billing 

exclusion (by HCPCS code) of certain 

customized prosthetic devices in section 

103 of the BBRA, it specifically 

identified certain designated L codes for 

exclusion, while omitting others from 

the exclusion list. Accordingly, we 

believe it is clear that the assignment of 

an L code to a particular prosthetic does 

not, in itself, automatically serve to 

qualify that item for exclusion from 

consolidated billing. 

Comment: Several commenters took 

this opportunity to revisit the existing 

set of administrative exclusions for 

certain high-intensity outpatient 

hospital services under the regulations 

in 42 CFR § 411.15(p)(3)(iii), and 

expressed the view that these exclusions 

should not be limited to only those 

services that actually occur in the 

hospital setting, but rather, should also 

encompass services performed in other, 

non-hospital settings as well. As 

examples, they cited services such as 

magnetic resonance imaging (MRIs) and 

computerized axial tomography (CT) 

scans furnished in freestanding imaging 

centers, and radiation therapy furnished 

in physicians’ clinics or ambulatory care 

centers, all of which may be less 

expensive and more accessible in 

certain particular localities (such as 

rural areas) than those furnished by 

hospitals. 

Response: We believe the comments 

that reflect previous suggestions for 

expanding this administrative exclusion 

to encompass services furnished in nonhospital settings indicate a continued 

misunderstanding of the underlying 

purpose of this provision. As we have 

consistently noted in response to 

comments on this issue in previous 

years (most recently, in the SNF PPS 

final rule for FY 2008 (72 FR 43431, 

August 3, 2007), and as also explained 

in Medicare Learning Network (MLN) 

Matters article SE0432 (available online 

at http://www.cms.hhs.gov/ 

MLNMattersArticles/downloads/ 

SE0432.pdf), the rationale for 

establishing this exclusion was to 

address those types of services that are 

so far beyond the normal scope of SNF 

care that they require the intensity of the 

hospital setting in order to be furnished 

safely and effectively. 

Moreover, we note that when the 

Congress enacted the consolidated 

billing exclusion for certain RHC and 

FQHC services in section 410 of the 

MMA, the accompanying legislative 

history’s description of present law 

acknowledged that the existing 

exclusions for exceptionally intensive 

outpatient services are specifically 

limited to ‘‘* * * certain outpatient 

services from a Medicare-participating 

hospital or critical access hospital 

***’’ (emphasis added). (See the 

House Ways and Means Committee 

Report (H. Rep. No. 108–178, Part 2 at 

209), and the Conference Report (H. 

Conf. Rep. No. 108–391 at 641).) 

Therefore, these services are excluded 

from SNF consolidated billing only 

when furnished in the outpatient 

hospital or CAH setting, and not when 

furnished in other, freestanding (nonhospital or non-CAH) settings. 


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Accordingly, establishing a categorical 

exclusion for these services that would 

apply irrespective of the setting in 

which they are furnished would require 

the enactment of legislation by the 

Congress to amend the law itself. 

Comment: Other commenters 

reiterated previous suggestions on 

expanding the existing chemotherapy 

exclusion to encompass related drugs 

that are commonly administered in 

conjunction with chemotherapy in order 

to treat the side effects of the 

chemotherapy drugs. The commenters 

cited examples such as anti-emetics 

(anti-nausea drugs), erythropoietin 

(EPO), and Reclast, an osteoporosis drug 

administered via a once-yearly infusion. 

Response: As we have noted 

previously in this final rule and in 

response to comments on this issue in 

the past (most recently, in the SNF PPS 

final rule for FY 2008 (72 FR 43432, 

August 3, 2007), the BBRA authorizes us 

to identify additional services for 

exclusion only within those particular 

service categories—chemotherapy and 

its administration; radioisotope services; 

and, customized prosthetic devices—

that it has designated for this purpose, 

and does not give us the authority to 

exclude other services which, though 

they may be related, fall outside of the 

specified service categories themselves. 

Thus, while anti-emetics, for example, 

are commonly administered in 

conjunction with chemotherapy, they 

are not themselves inherently 

chemotherapeutic in nature and, 

consequently, do not fall within the 

excluded chemotherapy category 

designated in the BBRA. In the case of 

Reclast, in the FY 2008 SNF PPS final 

rule (72 FR 43432, August 3, 2007), we 

discussed the specific rationale for our 

decision not to exclude this particular 

drug, explaining that such an exclusion 

could not be accomplished 

administratively under our existing 

authority. We also explained in the FY 

2008 final rule that the existing 

statutory exclusion from consolidated 

billing for EPO is effectively defined by 

the scope of coverage under the Part B 

EPO benefit at section 1861(s)(2)(O) of 

the Act; that benefit, in turn, specifically 

limits EPO coverage to dialysis patients, 

and does not provide for such coverage 

in any other, non-dialysis situations 

such as chemotherapy (72 FR 43432). 

VI. Application of the SNF PPS to SNF 

Services Furnished by Swing-Bed 

Hospitals 

In accordance with section 1888(e)(7) 

of the Act, as amended by section 203 

of the BIPA, Part A pays CAHs on a 

reasonable cost basis for SNF services 

furnished under a swing-bed agreement. 

However, effective with cost reporting 

periods beginning on or after July 1, 

2002, the swing-bed services of nonCAH rural hospitals are paid under the 

SNF PPS. As explained in the FY 2002 

SNF PPS final rule (66 FR 39562, July 

31, 2001), we selected this effective date 

consistent with the statutory provision 

to integrate swing-bed rural hospitals 

into the SNF PPS by the end of the SNF 

transition period, June 30, 2002. 

Accordingly, all non-CAH swing-bed 

rural hospitals have come under the 

SNF PPS as of June 30, 2003. Therefore, 

all rates and wage indexes outlined in 

earlier sections of this final rule, also 

apply to all non-CAH swing-bed rural 

hospitals. A complete discussion of 

assessment schedules, the MDS and the 

transmission software (RAVEN–SB for 

Swing Beds) appears in the final rule for 

FY 2002 (66 FR 39562, July 31, 2001). 

The latest changes in the MDS for 

swing-bed rural hospitals appear on our 

SNF PPS Web site, http:// 

www.cms.hhs.gov/snfpps. 

We received no comments on this 

aspect of the proposed rule and are 

making no changes in this final rule. 

VII. Provisions of the Final Rule 

In this final rule, in addition to 

accomplishing the required annual 

update of the SNF PPS payment rates, 

we are making the following revisions 

in the regulations text: 

• Revise the existing SNF PPS 

definitions of ‘‘urban’’ and ‘‘rural’’ areas 

that appear in § 413.333 to include 

updated cross-references to the 

corresponding IPPS definitions in Part 

412, subpart D. 

• Make a technical revision at 

§ 413.335(b) to reflect Medicare bad debt 

payments to SNFs. 

VIII. Collection of Information 

Requirements 

This document does not impose 

information collection and 

recordkeeping requirements. 

Consequently, it need not be reviewed 

by the Office of Management and 

Budget under the authority of the 

Paperwork Reduction Act of 1995 (44 

U.S.C. 3501 et seq.). 

IX. Regulatory Impact Analysis 

A. Overall Impact 

We have examined the impacts of this 

final rule as required by Executive 

Order 12866 (September 1993, 

Regulatory Planning and Review), the 

Regulatory Flexibility Act (September 

19, 1980, RFA, Pub. L. 96–354), section 

1102(b) of the Social Security Act (the 

Act), the Unfunded Mandates Reform 

Act of 1995 (UMRA, Pub. L. 104–4), 

Executive Order 13132 on Federalism, 

and the Congressional Review Act (5 

U.S.C. 804(2)). 

Executive Order 12866, as amended, 

directs agencies to assess all costs and 

benefits of available regulatory 

alternatives and, if regulation is 

necessary, to select regulatory 

approaches that maximize net benefits 

(including potential economic, 

environmental, public health and safety 

effects, distributive impacts, and 

equity). A regulatory impact analysis 

(RIA) must be prepared for major rules 

with economically significant effects 

($100 million or more in any 1 year). 

This final rule is a major rule, as defined 

in Title 5, United States Code, section 

804(2), because we estimate the FY 2009 

impact of the standard update will be to 

increase payments to SNFS by 

approximately $780 million dollars. We 

are also considering this an 

economically significant rule under 

Executive Order 12866. 

The update set forth in this final rule 

would apply to payments in FY 2009. 

Accordingly, the analysis that follows 

only describes the impact of this single 

year. In accordance with the 

requirements of the Act, we will publish 

a notice for each subsequent FY that 

will provide for an update to the 

payment rates and include an associated 

impact analysis. 

The RFA requires agencies to analyze 

options for regulatory relief of small 

entities. For purposes of the RFA, small 

entities include small businesses, 

nonprofit organizations, and small 

government jurisdictions. Most SNFs 

and most other providers and suppliers 

are small entities, either by their 

nonprofit status or by having revenues 

of $11.5 million or less in any 1 year. 

For purposes of the RFA, approximately 

53 percent of SNFs are considered small 

businesses according to the Small 

Business Administration’s latest size 

standards, with total revenues of $11.5 

million or less in any 1 year (for further 

information, see 65 FR 69432, 

November 17, 2000). Individuals and 

States are not included in the definition 

of a small entity. In addition, 

approximately 29 percent of SNFs are 

nonprofit organizations. 

This final rule updates the SNF PPS 

rates published in the FY 2008 SNF PPS 

final rule (72 FR 43412, August 3, 2007) 

and the associated correction notices 

published on September 28, 2007 (72 FR 

55085) and on November 30, 2007 (72 

FR 67652), resulting in a net change in 

payments of an estimated $780 million 

for FY 2009. As indicated in Table 12, 

the effect on facilities will be a net 

positive impact of 3.4 percent. We note 

that while all providers will experience 


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an overall net increase in payments, 

some providers may experience larger 

increases than others due to the 

distributional impact of the FY 2009 

wage indexes and the degree of 

Medicare utilization. 

The Department of Health and Human 

Services generally uses a revenue 

impact of 3 to 5 percent as a significance 

threshold under the RFA. While this 

final rule is considered major, its 

relative impact on SNFs overall is 

positive due to the application of the 3.4 

percent market basket adjustment. Thus, 

while the overall impact is positive on 

the industry as a whole, and on small 

entities specifically, it is highly variable, 

with the majority of SNFs having 

significantly lower Medicare utilization. 

Therefore, for most facilities, the impact 

on total facility revenues, considering 

all payers, should be substantially less 

than those shown in Table 12. However, 

in view of the potential economic 

impact on small entities, we have 

considered regulatory alternatives. 

In addition, section 1102(b) of the Act 

requires us to prepare a regulatory 

impact analysis if a rule may have a 

significant impact on the operations of 

a substantial number of small rural 

hospitals. This analysis must conform to 

the provisions of section 604 of the 

RFA. For purposes of section 1102(b) of 

the Act, we define a small rural hospital 

as a hospital that is located outside of 

a Metropolitan Statistical Area and has 

fewer than 100 beds. This final rule 

affects small rural hospitals that furnish 

SNF services under a swing-bed 

agreement, or that have a hospital-based 

SNF. We anticipate that the impact on 

small rural hospitals will be similar to 

the impact on SNF providers overall. 

Section 202 of the UMRA also 

requires that agencies assess anticipated 

costs and benefits before issuing any 

rule whose mandates require spending 

in any 1 year of $100 million in 1995 

dollars, updated annually for inflation. 

In 2008, that threshold is approximately 

$130 million. This final rule will not 

have a substantial effect on State, local, 

or tribal governments, or on private 

sector costs. 

Executive Order 13132 establishes 

certain requirements that an agency 

must meet when it promulgates 

regulations that impose substantial 

direct requirement costs on State and 

local governments, preempts State law, 

or otherwise has Federalism 

implications. As stated above, this final 

rule will have no substantial effect on 

State and local governments. 

B. Anticipated Effects 

This final rule sets forth updates of 

the SNF PPS rates contained in the FY 

2008 final rule (72 FR 43412, August 3, 

2007) and the associated correction 

notices published on September 28, 

2007 (72 FR 55085) and on November 

30, 2008 (72 FR 67652). Based on the 

above, we estimate the FY 2009 impact 

would be a net increase of $780 million 

in payments to SNFs. The impact 

analysis of this final rule represents the 

projected effects of the changes in the 

SNF PPS from FY 2008 to FY 2009. We 

estimate the effects by estimating 

payments while holding all other 

payment variables constant. We use the 

best data available, but we do not 

attempt to predict behavioral responses 

to these changes, and we do not make 

adjustments for future changes in such 

variables as days or case-mix. 

We note that certain events may 

combine to limit the scope or accuracy 

of our impact analysis, because an 

analysis is future-oriented and, thus, 

very susceptible to changes in provider 

behavior related to such events as 

newly-legislated general Medicare 

program funding changes by the 

Congress. Although these changes may 

not be specific to the SNF PPS, the 

nature of the Medicare program is that 

the changes may interact, and the 

complexity of the interaction of these 

changes could make it difficult to 

predict accurately the full scope of the 

impact upon SNFs. 

In accordance with section 

1888(e)(4)(E) of the Act, we update the 

payment rates for FY 2008 by a factor 

equal to the full market basket index 

percentage increase plus the FY 2007 

forecast error adjustment to determine 

the payment rates for FY 2009. The 

special AIDS add-on established by 

section 511 of the MMA remains in 

effect until ‘‘* * * such date as the 

Secretary certifies that there is an 

appropriate adjustment in the case mix 

* * *.’’ We have not provided a 

separate impact analysis for this MMA 

provision. Our latest estimates indicate 

that there are less than 2,700 

beneficiaries who qualify for the AIDS 

add-on payment. The impact on 

Medicare is included in the ‘‘total’’

column of Table 12. In updating the 

rates for FY 2009, we made a number of 

standard annual revisions and 

clarifications mentioned elsewhere in 

this final rule (for example, the update 

to the wage and market basket indexes 

used for adjusting the Federal rates). 

These revisions would increase 

payments to SNFs by approximately 

$780 million for FY 2009. 

The impacts are shown in Table 12. 

The breakdown of the various categories 

of data in the table follows. 

The first column shows the 

breakdown of all SNFs by urban or rural 

status, hospital-based or freestanding 

status, and census region. 

The first row of figures in the first 

column describes the estimated effects 

of the various changes on all facilities. 

The next six rows show the effects on 

facilities split by hospital-based, 

freestanding, urban, and rural 

categories. The urban and rural 

designations are based on the location of 

the facility under the CBSA designation. 

The next twenty-two rows show the 

effects on urban versus rural status by 

census region. 

The second column in the table shows 

the number of facilities in the impact 

database. 

The third column of the table shows 

the effect of the annual update to the 

wage index. This represents the effect of 

using the most recent wage data 

available. The total impact of this 

change is zero percent; however, there 

are distributional effects of the change. 

The fourth column shows the effect of 

all of the changes on the FY 2009 

payments. The market basket increase of 

3.4 percentage points is constant for all 

providers and, though not shown 

individually, is included in the total 

column. It is projected that aggregate 

payments will increase by 3.4 percent, 

assuming facilities do not change their 

care delivery and billing practices in 

response. 

As can be seen from this table, the 

effects of the changes vary by specific 

types of providers and by location. For 

example, all facilities experience 

payment increases, however, some 

providers (for example, those in the 

urban Pacific region) show a greater 

increase. In fact, payment increases for 

facilities in the urban and rural Pacific 

areas of the country are the highest for 

any of the provider categories at 4.9 

percent and 4.5 percent, respectively. 


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TABLE 12—PROJECTED IMPACT TO THE SNF PPS FOR FY 2009 

Number of 

facilities 

Updated 

wage data 

(percent) 

Total FY 

2009 

change 

(percent) 

Total ......................................................................................................................................................... 15,373 0.0 3.4 

Urban ................................................................................................................................................ 10,497 0.0 3.4 

Rural ................................................................................................................................................. 4,876 0.0 3.4 

Hospital based urban ............................................................................................................................... 1,528 ¥0.1 3.3 

Freestanding urban .................................................................................................................................. 8,969 0.0 3.4 

Hospital based rural ................................................................................................................................. 1,154 0.0 3.4 

Freestanding rural .................................................................................................................................... 3,722 0.0 3.4 

Urban by region: 

New England .................................................................................................................................... 840 0.2 3.6 

Middle Atlantic .................................................................................................................................. 1,490 ¥0.5 2.9 

South Atlantic ................................................................................................................................... 1,734 ¥0.3 3.1 

East North Central ............................................................................................................................ 2,010 ¥0.5 2.9 

East South Central ........................................................................................................................... 530 0.0 3.4 

West North Central ........................................................................................................................... 827 0.6 4.0 

West South Central .......................................................................................................................... 1,166 0.2 3.6 

Mountain ........................................................................................................................................... 472 0.0 3.4 

Pacific ............................................................................................................................................... 1,420 1.5 4.9 

Outlying ............................................................................................................................................. 8 0.6 4.0 

Rural by region: 

New England .................................................................................................................................... 150 ¥1.8 1.6 

Middle Atlantic .................................................................................................................................. 257 ¥0.2 3.2 

South Atlantic ................................................................................................................................... 603 0.0 3.4 

East North Central ............................................................................................................................ 940 ¥0.6 2.8 

East South Central ........................................................................................................................... 552 0.3 3.7 

West North Central ........................................................................................................................... 1,144 0.5 4.0 

West South Central .......................................................................................................................... 821 0.5 3.9 

Mountain ........................................................................................................................................... 259 ¥0.1 3.3 

Pacific ............................................................................................................................................... 148 1.1 4.5 

Outlying ............................................................................................................................................. 2 0.4 3.9 

Ownership: 

Government ...................................................................................................................................... 665 ¥0.1 3.3 

Proprietary ........................................................................................................................................ 11,286 0.0 3.4 

Voluntary ........................................................................................................................................... 3,422 ¥0.1 3.3 

We received one comment on the 

regulatory impact section. The comment 

and our response to the comment is as 

follows: 

Comment: One commenter asserted 

that the regulatory impact analysis 

understates the effects of the policy 

changes associated with the proposed 

recalibration of the case-mix weights (as 

discussed in the FY 2009 SNF PPS 

proposed rule) on state and local 

governments, as well as small entities. 

The commenter stated that the loss of 

tax revenues for State and local 

governments will be substantial. 

Response: As we have decided not to 

pursue the recalibration of the case-mix 

weights at this time, SNFs will see an 

increase of approximately 3.4 percent in 

their payments. However, should we 

decide to recalibrate the case-mix 

weights in the future, we wish to make 

clear that the law and regulations that 

govern SNF payment rate updates do 

not provide for considering indirect 

effects, induced effects, or ripple effects 

on economic activity. Moreover, as such 

secondary effects, if any, would occur 

within the context of a dynamic, 

market-based economy, we expect that 

the market would properly adjust its 

economic resources in reaction to the 

appropriately recalibrated SNF PPS 

payments. For these reasons, we believe 

that the regulatory impact analysis 

adequately estimates the proposed rule’s 

economic impact. 

C. Alternatives Considered 

Section 1888(e) of the Act establishes 

the SNF PPS for the payment of 

Medicare SNF services for cost reporting 

periods beginning on or after July 1, 

1998. This section of the statute 

prescribes a detailed formula for 

calculating payment rates under the 

SNF PPS, and does not provide for the 

use of any alternative methodology. It 

specifies that the base year cost data to 

be used for computing the SNF PPS 

payment rates must be from FY 1995 

(October 1, 1994, through September 30, 

1995). In accordance with the statute, 

we also incorporated a number of 

elements into the SNF PPS (for example, 

case-mix classification methodology, the 

MDS assessment schedule, a market 

basket index, a wage index, and the 

urban and rural distinction used in the 

development or adjustment of the 

Federal rates). Further, section 

1888(e)(4)(H) of the Act specifically 

requires us to disseminate the payment 

rates for each new FY through the 

Federal Register, and to do so before the 

August 1 that precedes the start of the 

new FY. Accordingly, we are not 

pursuing alternatives with respect to the 

payment methodology as discussed 

above. 

In finalizing our decision on the 

proposed FY 2009 recalibration of the 

case-mix adjustment, we reviewed the 

options considered in the proposed rule 

and took into consideration comments 

received during the public comment 

period as discussed in the preamble. 

Although the 2001 data were the best 

source available at the time the FY 2006 

refinements were introduced, the 

distribution of paid days, a key 

component in adjusting the RUG–53 

case-mix weights, was based solely on 

estimated utilization. The 2006 data 

provide a more recent and a more 

accurate source of RUG–53 utilization 

based on actual utilization, and are an 

appropriate source to use for case-mix 

adjustment. However, in light of the 

potential ramifications of this proposal 


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and the complexity of the issues 

involved, we believe that it would be 

prudent to take additional time to 

evaluate the proposal in order to further 

consider consequences that may result 

from it. Accordingly, we are not 

proceeding with the proposed 

recalibration at this time, pending 

further analysis. We note that as we 

continue to evaluate this issue, we fully 

expect to implement such an adjustment 

in the future. 

D. Accounting Statement 

As required by OMB Circular A–4 

(available at http:// 

www.whitehouse.gov/omb/circulars/ 

a004/a-4.pdf), in Table 13 below, we 

have prepared an accounting statement 

showing the classification of the 

expenditures associated with the 

provisions of this final rule. This table 

provides our best estimate of the change 

in Medicare payments under the SNF 

PPS as a result of the policies in this 

final rule based on the data for 15,373 

SNFs in our database. All expenditures 

are classified as transfers to Medicare 

providers (that is, SNFs). 

TABLE 13—ACCOUNTING STATEMENT: 

CLASSIFICATION OF ESTIMATED EXPENDITURES, FROM THE 2008 SNF 

PPS FISCAL YEAR TO THE 2009 

SNF PPS FISCAL YEAR

[In millions] 

Category Transfers 

Annualized Monetized 

Transfers.

$780 million. 

From Whom to 

Whom? 

Federal Government 

to SNF Medicare 

Providers. 

E. Conclusion 

Overall estimated payments for SNFs 

in FY 2009 are projected to increase by 

$780 million dollars compared with 

those in FY 2008. We estimate that 

SNFs in urban areas will experience a 

positive change of 3.4 percent in 

estimated payments compared with FY 

2008. We estimate that SNFs in rural 

areas will experience a 3.4 percent 

increase in estimated payments 

compared with FY 2008. Providers in 

the urban Pacific region and the rural 

Pacific region show the greatest 

increases in payments of 4.9 percent 

and 4.5 percent, respectively. 

Finally, in accordance with the 

provisions of Executive Order 12866, 

this regulation was reviewed by the 

Office of Management and Budget. 

List of Subjects in 42 CFR Part 413 

Health facilities, Kidney diseases, 

Medicare, Reporting and recordkeeping 

requirements. 

■ For the reasons set forth in the 

preamble, the Centers for Medicare & 

Medicaid Services amends 42 CFR 

chapter IV as follows: 

PART 413—PRINCIPLES OF 

REASONABLE COST 

REIMBURSEMENT; PAYMENT FOR 

END-STAGE RENAL DISEASE 

SERVICES; PROSPECTIVELY 

DETERMINED PAYMENT RATES FOR 

SKILLED NURSING FACILITIES 

■ 1. The authority citation for part 413 

continues to read as follows: 

Authority: Secs. 1102, 1812(d), 1814(b), 

1815, 1833(a), (i), and (n), 1861(v), 1871, 

1881, 1883, and 1886 of the Social Security 

Act (42 U.S.C. 1302, 1395d(d), 1395f(b), 

1395g, 1395l(a), (i), and (n), 1395x(v), 

1395hh, 1395rr, 1395tt, and 1395ww); and 

sec. 124 of Public Law 106–133 (113 Stat. 

1501A–332). 

Subpart J—Prospective Payment for 

Skilled Nursing Facilities 

■ 2. In § 413.333, the definitions of the 

terms ‘‘rural area’’ and ‘‘urban area’’ are 

revised to read as follows: 

§ 413.333 Definitions. 

* * * * * 

Rural area means, for services 

provided on or after July 1, 1998, but 

before October 1, 2005, an area as 

defined in § 412.62(f)(1)(iii) of this 

chapter. For services provided on or 

after October 1, 2005, rural area means 

an area as defined in § 412.64(b)(1)(ii)(C) 

of this chapter. 

Urban area means, for services 

provided on or after July 1, 1998, but 

before October 1, 2005, an area as 

defined in § 412.62(f)(1)(ii) of this 

chapter. For services provided on or 

after October 1, 2005, urban area means 

an area as defined in 

§ 412.64(b)(1)(ii)(A) and 

§ 412.64(b)(1)(ii)(B) of this chapter. 

§ 413.335 [Amended] 

■ 3. Section 413.335 is amended by 

revising paragraph (b) to read as follows: 

§ 413.335 Basis of payment. 

* * * * * 

(b) Payment in full. (1) The payment 

rates represent payment in full (subject 

to applicable coinsurance as described 

in subpart G of part 409 of this chapter) 

for all costs (routine, ancillary, and 

capital-related) associated with 

furnishing inpatient SNF services to 

Medicare beneficiaries other than costs 

associated with approved educational 

activities as described in § 413.85. 

(2) In addition to the Federal per diem 

payment amounts, SNFs receive 

payment for bad debts of Medicare 

beneficiaries, as specified in § 413.89 of 

this part. 

(Catalog of Federal Domestic Assistance 

Program No. 93.773, Medicare—Hospital 

Insurance Program; and No. 93.774, 

Medicare—Supplementary Medical 

Insurance Program) 

Dated: July 18, 2008. 

Kerry Weems, 

Acting Administrator, Centers for Medicare 

& Medicaid Services. 

Dated: July 31, 2008. 

Michael O. Leavitt, 

Secretary. 

[Note: The following Addendum will 

not appear in the Code of Federal 

Regulations] 

Addendum—FY 2009 CBSA Wage 

Index Tables 

In this addendum, we provide the wage 

index tables referred to in the preamble to 

this final rule. Tables 8 and 9 display the 

CBSA-based wage index values for urban and 

rural providers. 

TABLE 8—FY 2009 WAGE INDEX FOR URBAN AREAS BASED ON CBSA LABOR MARKET AREAS

CBSA code Urban area (constituent counties) Wage index 

10180 ....... Abilene, TX ........................................................................................................................................................................ 0.8097 

Callahan County, TX 

Jones County, TX 

Taylor County, TX 

10380 ....... Aguadilla-Isabela-San Sebastia ́n, PR ............................................................................................................................... 0.3399 

Aguada Municipio, PR 

Aguadilla Municipio, PR 

An ̃asco Municipio, PR 

Isabela Municipio, PR 

Lares Municipio, PR 


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TABLE 8—FY 2009 WAGE INDEX FOR URBAN AREAS BASED ON CBSA LABOR MARKET AREAS—Continued 

CBSA code Urban area (constituent counties) Wage index 

Moca Municipio, PR 

Rinco ́n Municipio, PR 

San Sebastia ́n Municipio, PR 

10420 ....... Akron, OH ......................................................................................................................................................................... 0.8917 

Portage County, OH 

Summit County, OH 

10500 ....... Albany, GA ........................................................................................................................................................................ 0.8703 

Baker County, GA 

Dougherty County, GA 

Lee County, GA 

Terrell County, GA 

Worth County, GA 

10580 ....... Albany-Schenectady-Troy, NY .......................................................................................................................................... 0.8707 

Albany County, NY 

Rensselaer County, NY 

Saratoga County, NY 

Schenectady County, NY 

Schoharie County, NY 

10740 ....... Albuquerque, NM .............................................................................................................................................................. 0.9210 

Bernalillo County, NM 

Sandoval County, NM 

Torrance County, NM 

Valencia County, NM 

10780 ....... Alexandria, LA ................................................................................................................................................................... 0.8130 

Grant Parish, LA 

Rapides Parish, LA 

10900 ....... Allentown-Bethlehem-Easton, PA-NJ ............................................................................................................................... 0.9499 

Warren County, NJ 

Carbon County, PA 

Lehigh County, PA 

Northampton County, PA 

11020 ....... Altoona, PA ....................................................................................................................................................................... 0.8521 

Blair County, PA 

11100 ....... Amarillo, TX ....................................................................................................................................................................... 0.8927 

Armstrong County, TX 

Carson County, TX 

Potter County, TX 

Randall County, TX 

11180 ....... Ames, IA ............................................................................................................................................................................ 0.9487 

Story County, IA 

11260 ....... Anchorage, AK .................................................................................................................................................................. 1.1931 

Anchorage Municipality, AK 

Matanuska-Susitna Borough, AK 

11300 ....... Anderson, IN ..................................................................................................................................................................... 0.8760 

Madison County, IN 

11340 ....... Anderson, SC .................................................................................................................................................................... 0.9570 

Anderson County, SC 

11460 ....... Ann Arbor, MI .................................................................................................................................................................... 1.0445 

Washtenaw County, MI 

11500 ....... Anniston-Oxford, AL .......................................................................................................................................................... 0.7927 

Calhoun County, AL 

11540 ....... Appleton, WI ...................................................................................................................................................................... 0.9440 

Calumet County, WI 

Outagamie County, WI 

11700 ....... Asheville, NC ..................................................................................................................................................................... 0.9142 

Buncombe County, NC 

Haywood County, NC 

Henderson County, NC 

Madison County, NC 

12020 ....... Athens-Clarke County, GA ................................................................................................................................................ 0.9591 

Clarke County, GA 

Madison County, GA 

Oconee County, GA 

Oglethorpe County, GA 

12060 ....... Atlanta-Sandy Springs-Marietta, GA ................................................................................................................................. 0.9754 

Barrow County, GA 

Bartow County, GA 

Butts County, GA 

Carroll County, GA 

Cherokee County, GA 

Clayton County, GA 

Cobb County, GA 


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TABLE 8—FY 2009 WAGE INDEX FOR URBAN AREAS BASED ON CBSA LABOR MARKET AREAS—Continued 

CBSA code Urban area (constituent counties) Wage index 

Coweta County, GA 

Dawson County, GA 

DeKalb County, GA 

Douglas County, GA 

Fayette County, GA 

Forsyth County, GA 

Fulton County, GA 

Gwinnett County, GA 

Haralson County, GA 

Heard County, GA 

Henry County, GA 

Jasper County, GA 

Lamar County, GA 

Meriwether County, GA 

Newton County, GA 

Paulding County, GA 

Pickens County, GA 

Pike County, GA 

Rockdale County, GA 

Spalding County, GA 

Walton County, GA 

12100 ....... Atlantic City-Hammonton, NJ ............................................................................................................................................ 1.1973 

Atlantic County, NJ 

12220 ....... Auburn-Opelika, AL ........................................................................................................................................................... 0.7544 

Lee County, AL 

12260 ....... Augusta-Richmond County, GA-SC .................................................................................................................................. 0.9615 

Burke County, GA 

Columbia County, GA 

McDuffie County, GA 

Richmond County, GA 

Aiken County, SC 

Edgefield County, SC 

12420 ....... Austin-Round Rock, TX .................................................................................................................................................... 0.9536 

Bastrop County, TX 

Caldwell County, TX 

Hays County, TX 

Travis County, TX 

Williamson County, TX 

12540 ....... Bakersfield, CA ................................................................................................................................................................. 1.1189 

Kern County, CA 

12580 ....... Baltimore-Towson, MD ...................................................................................................................................................... 1.0055 

Anne Arundel County, MD 

Baltimore County, MD 

Carroll County, MD 

Harford County, MD 

Howard County, MD 

Queen Anne’s County, MD 

Baltimore City, MD 

12620 ....... Bangor, ME ....................................................................................................................................................................... 1.0174 

Penobscot County, ME 

12700 ....... Barnstable Town, MA ........................................................................................................................................................ 1.2643 

Barnstable County, MA 

12940 ....... Baton Rouge, LA ............................................................................................................................................................... 0.8163 

Ascension Parish, LA 

East Baton Rouge Parish, LA 

East Feliciana Parish, LA 

Iberville Parish, LA 

Livingston Parish, LA 

Pointe Coupee Parish, LA 

St. Helena Parish, LA 

West Baton Rouge Parish, LA 

West Feliciana Parish, LA 

12980 ....... Battle Creek, MI ................................................................................................................................................................ 1.0120 

Calhoun County, MI 

13020 ....... Bay City, MI ....................................................................................................................................................................... 0.9248 

Bay County, MI 

13140 ....... Beaumont-Port Arthur, TX ................................................................................................................................................ 0.8479 

Hardin County, TX 

Jefferson County, TX 

Orange County, TX 

13380 ....... Bellingham, WA ................................................................................................................................................................. 1.1640 

Whatcom County, WA 


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TABLE 8—FY 2009 WAGE INDEX FOR URBAN AREAS BASED ON CBSA LABOR MARKET AREAS—Continued 

CBSA code Urban area (constituent counties) Wage index 

13460 ....... Bend, OR .......................................................................................................................................................................... 1.1375 

Deschutes County, OR 

13644 ....... Bethesda-Frederick-Gaithersburg, MD ............................................................................................................................. 1.0548 

Frederick County, MD 

Montgomery County, MD 

13740 ....... Billings, MT ........................................................................................................................................................................ 0.8805 

Carbon County, MT 

Yellowstone County, MT 

13780 ....... Binghamton, NY ................................................................................................................................................................ 0.8574 

Broome County, NY 

Tioga County, NY 

13820 ....... Birmingham-Hoover, AL .................................................................................................................................................... 0.8792 

Bibb County, AL 

Blount County, AL 

Chilton County, AL 

Jefferson County, AL 

St. Clair County, AL 

Shelby County, AL 

Walker County, AL 

13900 ....... Bismarck, ND .................................................................................................................................................................... 0.7148 

Burleigh County, ND 

Morton County, ND 

13980 ....... Blacksburg-Christiansburg-Radford, VA ........................................................................................................................... 0.8155 

Giles County, VA 

Montgomery County, VA 

Pulaski County, VA 

Radford City, VA 

14020 ....... Bloomington, IN ................................................................................................................................................................. 0.8979 

Greene County, IN 

Monroe County, IN 

Owen County, IN 

14060 ....... Bloomington-Normal, IL .................................................................................................................................................... 0.9323 

McLean County, IL 

14260 ....... Boise City-Nampa, ID ....................................................................................................................................................... 0.9268 

Ada County, ID 

Boise County, ID 

Canyon County, ID 

Gem County, ID 

Owyhee County, ID 

14484 ....... Boston-Quincy, MA ........................................................................................................................................................... 1.1897 

Norfolk County, MA 

Plymouth County, MA 

Suffolk County, MA 

14500 ....... Boulder, CO ...................................................................................................................................................................... 1.0302 

Boulder County, CO 

14540 ....... Bowling Green, KY ............................................................................................................................................................ 0.8388 

Edmonson County, KY 

Warren County, KY 

14600 ....... Bradenton-Sarasota-Venice, FL ........................................................................................................................................ 0.9900 

Manatee County, FL 

Sarasota County, FL 

14740 ....... Bremerton-Silverdale, WA ................................................................................................................................................. 1.0770 

Kitsap County, WA 

14860 ....... Bridgeport-Stamford-Norwalk, CT ..................................................................................................................................... 1.2868 

Fairfield County, CT 

15180 ....... Brownsville-Harlingen, TX ................................................................................................................................................. 0.8916 

Cameron County, TX 

15260 ....... Brunswick, GA ................................................................................................................................................................... 0.9567 

Brantley County, GA 

Glynn County, GA 

McIntosh County, GA 

15380 ....... Buffalo-Niagara Falls, NY ................................................................................................................................................. 0.9537 

Erie County, NY 

Niagara County, NY 

15500 ....... Burlington, NC ................................................................................................................................................................... 0.8736 

Alamance County, NC 

15540 ....... Burlington-South Burlington, VT ....................................................................................................................................... 0.9254 

Chittenden County, VT 

Franklin County, VT 

Grand Isle County, VT 

15764 ....... Cambridge-Newton-Framingham, MA ............................................................................................................................... 1.1086 

Middlesex County, MA 


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46444 Federal Register / Vol. 73, No. 154 / Friday, August 8, 2008 / Rules and Regulations 

TABLE 8—FY 2009 WAGE INDEX FOR URBAN AREAS BASED ON CBSA LABOR MARKET AREAS—Continued 

CBSA code Urban area (constituent counties) Wage index 

15804 ....... Camden, NJ ...................................................................................................................................................................... 1.0346 

Burlington County, NJ 

Camden County, NJ 

Gloucester County, NJ 

15940 ....... Canton-Massillon, OH ....................................................................................................................................................... 0.8841 

Carroll County, OH 

Stark County, OH 

15980 ....... Cape Coral-Fort Myers, FL ............................................................................................................................................... 0.9396 

Lee County, FL 

16180 ....... Carson City, NV ................................................................................................................................................................ 1.0128 

Carson City, NV 

16220 ....... Casper, WY ....................................................................................................................................................................... 0.9579 

Natrona County, WY 

16300 ....... Cedar Rapids, IA ............................................................................................................................................................... 0.8919 

Benton County, IA 

Jones County, IA 

Linn County, IA 

16580 ....... Champaign-Urbana, IL ...................................................................................................................................................... 0.9461 

Champaign County, IL 

Ford County, IL 

Piatt County, IL 

16620 ....... Charleston, WV ................................................................................................................................................................. 0.8275 

Boone County, WV 

Clay County, WV 

Kanawha County, WV 

Lincoln County, WV 

Putnam County, WV 

16700 ....... Charleston-North Charleston-Summerville, SC ................................................................................................................ 0.9209 

Berkeley County, SC 

Charleston County, SC 

Dorchester County, SC 

16740 ....... Charlotte-Gastonia-Concord, NC-SC ................................................................................................................................ 0.9595 

Anson County, NC 

Cabarrus County, NC 

Gaston County, NC 

Mecklenburg County, NC 

Union County, NC 

York County, SC 

16820 ....... Charlottesville, VA ............................................................................................................................................................. 0.9816 

Albemarle County, VA 

Fluvanna County, VA 

Greene County, VA 

Nelson County, VA 

Charlottesville City, VA 

16860 ....... Chattanooga, TN-GA ........................................................................................................................................................ 0.8878 

Catoosa County, GA 

Dade County, GA 

Walker County, GA 

Hamilton County, TN 

Marion County, TN 

Sequatchie County, TN 

16940 ....... Cheyenne, WY .................................................................................................................................................................. 0.9276 

Laramie County, WY 

16974 ....... Chicago-Naperville-Joliet, IL ............................................................................................................................................. 1.0399 

Cook County, IL 

DeKalb County, IL 

DuPage County, IL 

Grundy County, IL 

Kane County, IL 

Kendall County, IL 

McHenry County, IL 

Will County, IL 

17020 ....... Chico, CA .......................................................................................................................................................................... 1.0897 

Butte County, CA 

17140 ....... Cincinnati-Middletown, OH-KY-IN ..................................................................................................................................... 0.9687 

Dearborn County, IN 

Franklin County, IN 

Ohio County, IN 

Boone County, KY 

Bracken County, KY 

Campbell County, KY 

Gallatin County, KY 


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TABLE 8—FY 2009 WAGE INDEX FOR URBAN AREAS BASED ON CBSA LABOR MARKET AREAS—Continued 

CBSA code Urban area (constituent counties) Wage index 

Grant County, KY 

Kenton County, KY 

Pendleton County, KY 

Brown County, OH 

Butler County, OH 

Clermont County, OH 

Hamilton County, OH 

Warren County, OH 

17300 ....... Clarksville, TN-KY ............................................................................................................................................................. 0.8298 

Christian County, KY 

Trigg County, KY 

Montgomery County, TN 

Stewart County, TN 

17420 ....... Cleveland, TN ................................................................................................................................................................... 0.8010 

Bradley County, TN 

Polk County, TN 

17460 ....... Cleveland-Elyria-Mentor, OH ............................................................................................................................................ 0.9241 

Cuyahoga County, OH 

Geauga County, OH 

Lake County, OH 

Lorain County, OH 

Medina County, OH 

17660 ....... Coeur d’Alene, ID .............................................................................................................................................................. 0.9322 

Kootenai County, ID 

17780 ....... College Station-Bryan, TX ................................................................................................................................................ 0.9346 

Brazos County, TX 

Burleson County, TX 

Robertson County, TX 

17820 ....... Colorado Springs, CO ....................................................................................................................................................... 0.9977 

El Paso County, CO 

Teller County, CO 

17860 ....... Columbia, MO ................................................................................................................................................................... 0.8540 

Boone County, MO 

Howard County, MO 

17900 ....... Columbia, SC .................................................................................................................................................................... 0.8933 

Calhoun County, SC 

Fairfield County, SC 

Kershaw County, SC 

Lexington County, SC 

Richland County, SC 

Saluda County, SC 

17980 ....... Columbus, GA-AL ............................................................................................................................................................. 0.8739 

Russell County, AL 

Chattahoochee County, GA 

Harris County, GA 

Marion County, GA 

Muscogee County, GA 

18020 ....... Columbus, IN .................................................................................................................................................................... 0.9739 

Bartholomew County, IN 

18140 ....... Columbus, OH ................................................................................................................................................................... 0.9943 

Delaware County, OH 

Fairfield County, OH 

Franklin County, OH 

Licking County, OH 

Madison County, OH 

Morrow County, OH 

Pickaway County, OH 

Union County, OH 

18580 ....... Corpus Christi, TX ............................................................................................................................................................. 0.8598 

Aransas County, TX 

Nueces County, TX 

San Patricio County, TX 

18700 ....... Corvallis, OR ..................................................................................................................................................................... 1.1304 

Benton County, OR 

19060 ....... Cumberland, MD-WV ........................................................................................................................................................ 0.7816 

Allegany County, MD 

Mineral County, WV 

19124 ....... Dallas-Plano-Irving, TX ..................................................................................................................................................... 0.9945 

Collin County, TX 

Dallas County, TX 

Delta County, TX 

Denton County, TX 


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46446 Federal Register / Vol. 73, No. 154 / Friday, August 8, 2008 / Rules and Regulations 

TABLE 8—FY 2009 WAGE INDEX FOR URBAN AREAS BASED ON CBSA LABOR MARKET AREAS—Continued 

CBSA code Urban area (constituent counties) Wage index 

Ellis County, TX 

Hunt County, TX 

Kaufman County, TX 

Rockwall County, TX 

19140 ....... Dalton, GA ......................................................................................................................................................................... 0.8705 

Murray County, GA 

Whitfield County, GA 

19180 ....... Danville, IL ........................................................................................................................................................................ 0.9374 

Vermilion County, IL 

19260 ....... Danville, VA ....................................................................................................................................................................... 0.8395 

Pittsylvania County, VA 

Danville City, VA 

19340 ....... Davenport-Moline-Rock Island, IA-IL ................................................................................................................................ 0.8435 

Henry County, IL 

Mercer County, IL 

Rock Island County, IL 

Scott County, IA 

19380 ....... Dayton, OH ....................................................................................................................................................................... 0.9203 

Greene County, OH 

Miami County, OH 

Montgomery County, OH 

Preble County, OH 

19460 ....... Decatur, AL ....................................................................................................................................................................... 0.7803 

Lawrence County, AL 

Morgan County, AL 

19500 ....... Decatur, IL ......................................................................................................................................................................... 0.8145 

Macon County, IL 

19660 ....... Deltona-Daytona Beach-Ormond Beach, FL .................................................................................................................... 0.8890 

Volusia County, FL 

19740 ....... Denver-Aurora, CO ........................................................................................................................................................... 1.0818 

Adams County, CO 

Arapahoe County, CO 

Broomfield County, CO 

Clear Creek County, CO 

Denver County, CO 

Douglas County, CO 

Elbert County, CO 

Gilpin County, CO 

Jefferson County, CO 

Park County, CO 

19780 ....... Des Moines-West Des Moines, IA .................................................................................................................................... 0.9535 

Dallas County, IA 

Guthrie County, IA 

Madison County, IA 

Polk County, IA 

Warren County, IA 

19804 ....... Detroit-Livonia-Dearborn, MI ............................................................................................................................................. 0.9958 

Wayne County, MI 

20020 ....... Dothan, AL ........................................................................................................................................................................ 0.7613 

Geneva County, AL 

Henry County, AL 

Houston County, AL 

20100 ....... Dover, DE .......................................................................................................................................................................... 1.0325 

Kent County, DE 

20220 ....... Dubuque, IA ...................................................................................................................................................................... 0.8380 

Dubuque County, IA 

20260 ....... Duluth, MN-WI ................................................................................................................................................................... 1.0363 

Carlton County, MN 

St. Louis County, MN 

Douglas County, WI 

20500 ....... Durham, NC ...................................................................................................................................................................... 0.9732 

Chatham County, NC 

Durham County, NC 

Orange County, NC 

Person County, NC 

20740 ....... Eau Claire, WI ................................................................................................................................................................... 0.9668 

Chippewa County, WI 

Eau Claire County, WI 

20764 ....... Edison-New Brunswick, NJ ............................................................................................................................................... 1.1283 

Middlesex County, NJ 

Monmouth County, NJ 

Ocean County, NJ 


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TABLE 8—FY 2009 WAGE INDEX FOR URBAN AREAS BASED ON CBSA LABOR MARKET AREAS—Continued 

CBSA code Urban area (constituent counties) Wage index 

Somerset County, NJ 

20940 ....... El Centro, CA .................................................................................................................................................................... 0.8746 

Imperial County, CA 

21060 ....... Elizabethtown, KY ............................................................................................................................................................. 0.8525 

Hardin County, KY 

Larue County, KY 

21140 ....... Elkhart-Goshen, IN ............................................................................................................................................................ 0.9568 

Elkhart County, IN 

21300 ....... Elmira, NY ......................................................................................................................................................................... 0.8247 

Chemung County, NY 

21340 ....... El Paso, TX ....................................................................................................................................................................... 0.8694 

El Paso County, TX 

21500 ....... Erie, PA ............................................................................................................................................................................. 0.8713 

Erie County, PA 

21660 ....... Eugene-Springfield, OR .................................................................................................................................................... 1.1061 

Lane County, OR 

21780 ....... Evansville, IN-KY .............................................................................................................................................................. 0.8690 

Gibson County, IN 

Posey County, IN 

Vanderburgh County, IN 

Warrick County, IN 

Henderson County, KY 

Webster County, KY 

21820 ....... Fairbanks, AK .................................................................................................................................................................... 1.1297 

Fairbanks North Star Borough, AK 

21940 ....... Fajardo, PR ....................................................................................................................................................................... 0.4061 

Ceiba Municipio, PR 

Fajardo Municipio, PR 

Luquillo Municipio, PR 

22020 ....... Fargo, ND-MN ................................................................................................................................................................... 0.8166 

Cass County, ND 

Clay County, MN 

22140 ....... Farmington, NM ................................................................................................................................................................ 0.8051 

San Juan County, NM 

22180 ....... Fayetteville, NC ................................................................................................................................................................. 0.9340 

Cumberland County, NC 

Hoke County, NC 

22220 ....... Fayetteville-Springdale-Rogers, AR-MO ........................................................................................................................... 0.8970 

Benton County, AR 

Madison County, AR 

Washington County, AR 

McDonald County, MO 

22380 ....... Flagstaff, AZ ...................................................................................................................................................................... 1.1743 

Coconino County, AZ 

22420 ....... Flint, MI ............................................................................................................................................................................. 1.1425 

Genesee County, MI 

22500 ....... Florence, SC ..................................................................................................................................................................... 0.8130 

Darlington County, SC 

Florence County, SC 

22520 ....... Florence-Muscle Shoals, AL ............................................................................................................................................. 0.7871 

Colbert County, AL 

Lauderdale County, AL 

22540 ....... Fond du Lac, WI ............................................................................................................................................................... 0.9293 

Fond du Lac County, WI 

22660 ....... Fort Collins-Loveland, CO ................................................................................................................................................. 0.9867 

Larimer County, CO 

22744 ....... Fort Lauderdale-Pompano Beach-Deerfield Beach, FL .................................................................................................... 0.9946 

Broward County, FL 

22900 ....... Fort Smith, AR-OK ............................................................................................................................................................ 0.7697 

Crawford County, AR 

Franklin County, AR 

Sebastian County, AR 

Le Flore County, OK 

Sequoyah County, OK 

23020 ....... Fort Walton Beach-Crestview-Destin, FL .......................................................................................................................... 0.8769 

Okaloosa County, FL 

23060 ....... Fort Wayne, IN .................................................................................................................................................................. 0.9176 

Allen County, IN 

Wells County, IN 

Whitley County, IN 

23104 ....... Fort Worth-Arlington, TX ................................................................................................................................................... 0.9709 

Johnson County, TX 


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46448 Federal Register / Vol. 73, No. 154 / Friday, August 8, 2008 / Rules and Regulations 

TABLE 8—FY 2009 WAGE INDEX FOR URBAN AREAS BASED ON CBSA LABOR MARKET AREAS—Continued 

CBSA code Urban area (constituent counties) Wage index 

Parker County, TX 

Tarrant County, TX 

Wise County, TX 

23420 ....... Fresno, CA ........................................................................................................................................................................ 1.1009 

Fresno County, CA 

23460 ....... Gadsden, AL ..................................................................................................................................................................... 0.7983 

Etowah County, AL 

23540 ....... Gainesville, FL .................................................................................................................................................................. 0.9312 

Alachua County, FL 

Gilchrist County, FL 

23580 ....... Gainesville, GA ................................................................................................................................................................. 0.9109 

Hall County, GA 

23844 ....... Gary, IN ............................................................................................................................................................................. 0.9250 

Jasper County, IN 

Lake County, IN 

Newton County, IN 

Porter County, IN 

24020 ....... Glens Falls, NY ................................................................................................................................................................. 0.8473 

Warren County, NY 

Washington County, NY 

24140 ....... Goldsboro, NC .................................................................................................................................................................. 0.9143 

Wayne County, NC 

24220 ....... Grand Forks, ND-MN ........................................................................................................................................................ 0.7565 

Polk County, MN 

Grand Forks County, ND 

24300 ....... Grand Junction, CO .......................................................................................................................................................... 0.9812 

Mesa County, CO 

24340 ....... Grand Rapids-Wyoming, MI .............................................................................................................................................. 0.9184 

Barry County, MI 

Ionia County, MI 

Kent County, MI 

Newaygo County, MI 

24500 ....... Great Falls, MT ................................................................................................................................................................. 0.8784 

Cascade County, MT 

24540 ....... Greeley, CO ...................................................................................................................................................................... 0.9684 

Weld County, CO 

24580 ....... Green Bay, WI .................................................................................................................................................................. 0.9709 

Brown County, WI 

Kewaunee County, WI 

Oconto County, WI 

24660 ....... Greensboro-High Point, NC .............................................................................................................................................. 0.9011 

Guilford County, NC 

Randolph County, NC 

Rockingham County, NC 

24780 ....... Greenville, NC ................................................................................................................................................................... 0.9448 

Greene County, NC 

Pitt County, NC 

24860 ....... Greenville-Mauldin-Easley, SC ......................................................................................................................................... 0.9961 

Greenville County, SC 

Laurens County, SC 

Pickens County, SC 

25020 ....... Guayama, PR .................................................................................................................................................................... 0.3249 

Arroyo Municipio, PR 

Guayama Municipio, PR 

Patillas Municipio, PR 

25060 ....... Gulfport-Biloxi, MS ............................................................................................................................................................ 0.9029 

Hancock County, MS 

Harrison County, MS 

Stone County, MS 

25180 ....... Hagerstown-Martinsburg, MD-WV .................................................................................................................................... 0.8997 

Washington County, MD 

Berkeley County, WV 

Morgan County, WV 

25260 ....... Hanford-Corcoran, CA ...................................................................................................................................................... 1.0870 

Kings County, CA 

25420 ....... Harrisburg-Carlisle, PA ..................................................................................................................................................... 0.9153 

Cumberland County, PA 

Dauphin County, PA 

Perry County, PA 

25500 ....... Harrisonburg, VA ............................................................................................................................................................... 0.8894 

Rockingham County, VA 

Harrisonburg City, VA 


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TABLE 8—FY 2009 WAGE INDEX FOR URBAN AREAS BASED ON CBSA LABOR MARKET AREAS—Continued 

CBSA code Urban area (constituent counties) Wage index 

25540 ....... Hartford-West Hartford-East Hartford, CT ........................................................................................................................ 1.1069 

Hartford County, CT 

Middlesex County, CT 

Tolland County, CT 

25620 ....... Hattiesburg, MS ................................................................................................................................................................ 0.7337 

Forrest County, MS 

Lamar County, MS 

Perry County, MS 

25860 ....... Hickory-Lenoir-Morganton, NC ......................................................................................................................................... 0.8976 

Alexander County, NC 

Burke County, NC 

Caldwell County, NC 

Catawba County, NC 

25980 ....... Hinesville-Fort Stewart, GA1 ............................................................................................................................................. 0.9110 

Liberty County, GA 

Long County, GA 

26100 ....... Holland-Grand Haven, MI ................................................................................................................................................. 0.9008 

Ottawa County, MI 

26180 ....... Honolulu, HI ...................................................................................................................................................................... 1.1811 

Honolulu County, HI 

26300 ....... Hot Springs, AR ................................................................................................................................................................ 0.9113 

Garland County, AR 

26380 ....... Houma-Bayou Cane-Thibodaux, LA ................................................................................................................................. 0.7758 

Lafourche Parish, LA 

Terrebonne Parish, LA 

26420 ....... Houston-Sugar Land-Baytown, TX ................................................................................................................................... 0.9838 

Austin County, TX 

Brazoria County, TX 

Chambers County, TX 

Fort Bend County, TX 

Galveston County, TX 

Harris County, TX 

Liberty County, TX 

Montgomery County, TX 

San Jacinto County, TX 

Waller County, TX 

26580 ....... Huntington-Ashland, WV-KY-OH ...................................................................................................................................... 0.9254 

Boyd County, KY 

Greenup County, KY 

Lawrence County, OH 

Cabell County, WV 

Wayne County, WV 

26620 ....... Huntsville, AL .................................................................................................................................................................... 0.9082 

Limestone County, AL 

Madison County, AL 

26820 ....... Idaho Falls, ID ................................................................................................................................................................... 0.9080 

Bonneville County, ID 

Jefferson County, ID 

26900 ....... Indianapolis-Carmel, IN ..................................................................................................................................................... 0.9908 

Boone County, IN 

Brown County, IN 

Hamilton County, IN 

Hancock County, IN 

Hendricks County, IN 

Johnson County, IN 

Marion County, IN 

Morgan County, IN 

Putnam County, IN 

Shelby County, IN 

26980 ....... Iowa City, IA ...................................................................................................................................................................... 0.9483 

Johnson County, IA 

Washington County, IA 

27060 ....... Ithaca, NY ......................................................................................................................................................................... 0.9614 

Tompkins County, NY 

27100 ....... Jackson, MI ....................................................................................................................................................................... 0.9309 

Jackson County, MI 

27140 ....... Jackson, MS ...................................................................................................................................................................... 0.8067 

Copiah County, MS 

Hinds County, MS 

Madison County, MS 

Rankin County, MS 

Simpson County, MS 


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46450 Federal Register / Vol. 73, No. 154 / Friday, August 8, 2008 / Rules and Regulations 

TABLE 8—FY 2009 WAGE INDEX FOR URBAN AREAS BASED ON CBSA LABOR MARKET AREAS—Continued 

CBSA code Urban area (constituent counties) Wage index 

27180 ....... Jackson, TN ...................................................................................................................................................................... 0.8523 

Chester County, TN 

Madison County, TN 

27260 ....... Jacksonville, FL ................................................................................................................................................................. 0.8999 

Baker County, FL 

Clay County, FL 

Duval County, FL 

Nassau County, FL 

St. Johns County, FL 

27340 ....... Jacksonville, NC ................................................................................................................................................................ 0.8177 

Onslow County, NC 

27500 ....... Janesville, WI .................................................................................................................................................................... 0.9662 

Rock County, WI 

27620 ....... Jefferson City, MO ............................................................................................................................................................ 0.8775 

Callaway County, MO 

Cole County, MO 

Moniteau County, MO 

Osage County, MO 

27740 ....... Johnson City, TN .............................................................................................................................................................. 0.7971 

Carter County, TN 

Unicoi County, TN 

Washington County, TN 

27780 ....... Johnstown, PA .................................................................................................................................................................. 0.7920 

Cambria County, PA 

27860 ....... Jonesboro, AR .................................................................................................................................................................. 0.7916 

Craighead County, AR 

Poinsett County, AR 

27900 ....... Joplin, MO ......................................................................................................................................................................... 0.9406 

Jasper County, MO 

Newton County, MO 

28020 ....... Kalamazoo-Portage, MI .................................................................................................................................................... 1.0801 

Kalamazoo County, MI 

Van Buren County, MI 

28100 ....... Kankakee-Bradley, IL ........................................................................................................................................................ 1.0485 

Kankakee County, IL 

28140 ....... Kansas City, MO-KS ......................................................................................................................................................... 0.9610 

Franklin County, KS 

Johnson County, KS 

Leavenworth County, KS 

Linn County, KS 

Miami County, KS 

Wyandotte County, KS 

Bates County, MO 

Caldwell County, MO 

Cass County, MO 

Clay County, MO 

Clinton County, MO 

Jackson County, MO 

Lafayette County, MO 

Platte County, MO 

Ray County, MO 

28420 ....... Kennewick-Pasco-Richland, WA ....................................................................................................................................... 0.9911 

Benton County, WA 

Franklin County, WA 

28660 ....... Killeen-Temple-Fort Hood, TX .......................................................................................................................................... 0.8765 

Bell County, TX 

Coryell County, TX 

Lampasas County, TX 

28700 ....... Kingsport-Bristol-Bristol, TN-VA ........................................................................................................................................ 0.7743 

Hawkins County, TN 

Sullivan County, TN 

Bristol City, VA 

Scott County, VA 

Washington County, VA 

28740 ....... Kingston, NY ..................................................................................................................................................................... 0.9375 

Ulster County, NY 

28940 ....... Knoxville, TN ..................................................................................................................................................................... 0.7881 

Anderson County, TN 

Blount County, TN 

Knox County, TN 

Loudon County, TN 

Union County, TN 


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TABLE 8—FY 2009 WAGE INDEX FOR URBAN AREAS BASED ON CBSA LABOR MARKET AREAS—Continued 

CBSA code Urban area (constituent counties) Wage index 

29020 ....... Kokomo, IN ....................................................................................................................................................................... 0.9349 

Howard County, IN 

Tipton County, IN 

29100 ....... La Crosse, WI-MN ............................................................................................................................................................ 0.9758 

Houston County, MN 

La Crosse County, WI 

29140 ....... Lafayette, IN ...................................................................................................................................................................... 0.9221 

Benton County, IN 

Carroll County, IN 

Tippecanoe County, IN 

29180 ....... Lafayette, LA ..................................................................................................................................................................... 0.8374 

Lafayette Parish, LA 

St. Martin Parish, LA 

29340 ....... Lake Charles, LA .............................................................................................................................................................. 0.7556 

Calcasieu Parish, LA 

Cameron Parish, LA 

29404 ....... Lake County-Kenosha County, IL-WI ............................................................................................................................... 1.0389 

Lake County, IL 

Kenosha County, WI 

29420 ....... Lake Havasu City-Kingman, AZ ........................................................................................................................................ 0.9797 

Mohave County, AZ 

29460 ....... Lakeland-Winter Haven, FL .............................................................................................................................................. 0.8530 

Polk County, FL 

29540 ....... Lancaster, PA .................................................................................................................................................................... 0.9363 

Lancaster County, PA 

29620 ....... Lansing-East Lansing, MI ................................................................................................................................................. 0.9931 

Clinton County, MI 

Eaton County, MI 

Ingham County, MI 

29700 ....... Laredo, TX ........................................................................................................................................................................ 0.8366 

Webb County, TX 

29740 ....... Las Cruces, NM ................................................................................................................................................................ 0.8929 

Dona Ana County, NM 

29820 ....... Las Vegas-Paradise, NV ................................................................................................................................................... 1.1971 

Clark County, NV 

29940 ....... Lawrence, KS .................................................................................................................................................................... 0.8343 

Douglas County, KS 

30020 ....... Lawton, OK ....................................................................................................................................................................... 0.8211 

Comanche County, OK 

30140 ....... Lebanon, PA ..................................................................................................................................................................... 0.8954 

Lebanon County, PA 

30300 ....... Lewiston, ID-WA ............................................................................................................................................................... 0.9465 

Nez Perce County, ID 

Asotin County, WA 

30340 ....... Lewiston-Auburn, ME ........................................................................................................................................................ 0.9200 

Androscoggin County, ME 

30460 ....... Lexington-Fayette, KY ....................................................................................................................................................... 0.9110 

Bourbon County, KY 

Clark County, KY 

Fayette County, KY 

Jessamine County, KY 

Scott County, KY 

Woodford County, KY 

30620 ....... Lima, OH ........................................................................................................................................................................... 0.9427 

Allen County, OH 

30700 ....... Lincoln, NE ........................................................................................................................................................................ 0.9759 

Lancaster County, NE 

Seward County, NE 

30780 ....... Little Rock-North Little Rock-Conway, AR ........................................................................................................................ 0.8672 

Faulkner County, AR 

Grant County, AR 

Lonoke County, AR 

Perry County, AR 

Pulaski County, AR 

Saline County, AR 

30860 ....... Logan, UT-ID ..................................................................................................................................................................... 0.8765 

Franklin County, ID 

Cache County, UT 

30980 ....... Longview, TX .................................................................................................................................................................... 0.8370 

Gregg County, TX 

Rusk County, TX 

Upshur County, TX 


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46452 Federal Register / Vol. 73, No. 154 / Friday, August 8, 2008 / Rules and Regulations 

TABLE 8—FY 2009 WAGE INDEX FOR URBAN AREAS BASED ON CBSA LABOR MARKET AREAS—Continued 

CBSA code Urban area (constituent counties) Wage index 

31020 ....... Longview, WA ................................................................................................................................................................... 1.1207 

Cowlitz County, WA 

31084 ....... Los Angeles-Long Beach-Santa Ana, CA ........................................................................................................................ 1.2208 

Los Angeles County, CA 

31140 ....... Louisville-Jefferson County, KY-IN ................................................................................................................................... 0.9249 

Clark County, IN 

Floyd County, IN 

Harrison County, IN 

Washington County, IN 

Bullitt County, KY 

Henry County, KY 

Meade County, KY 

Nelson County, KY 

Oldham County, KY 

Shelby County, KY 

Spencer County, KY 

Trimble County, KY 

31180 ....... Lubbock, TX ...................................................................................................................................................................... 0.8731 

Crosby County, TX 

Lubbock County, TX 

31340 ....... Lynchburg, VA ................................................................................................................................................................... 0.8774 

Amherst County, VA 

Appomattox County, VA 

Bedford County, VA 

Campbell County, VA 

Bedford City, VA 

Lynchburg City, VA 

31420 ....... Macon, GA ........................................................................................................................................................................ 0.9570 

Bibb County, GA 

Crawford County, GA 

Jones County, GA 

Monroe County, GA 

Twiggs County, GA 

31460 ....... Madera, CA ....................................................................................................................................................................... 0.7939 

Madera County, CA 

31540 ....... Madison, WI ...................................................................................................................................................................... 1.0967 

Columbia County, WI 

Dane County, WI 

Iowa County, WI 

31700 ....... Manchester-Nashua, NH ................................................................................................................................................... 1.0359 

Hillsborough County, NH 

31900 ....... Mansfield, OH ................................................................................................................................................................... 0.9330 

Richland County, OH 

32420 ....... Mayagu ̈ez, PR ................................................................................................................................................................... 0.3940 

Hormigueros Municipio, PR 

Mayagu ̈ez Municipio, PR 

32580 ....... McAllen-Edinburg-Mission, TX .......................................................................................................................................... 0.9009 

Hidalgo County, TX 

32780 ....... Medford, OR ...................................................................................................................................................................... 1.0244 

Jackson County, OR 

32820 ....... Memphis, TN-MS-AR ........................................................................................................................................................ 0.9232 

Crittenden County, AR 

DeSoto County, MS 

Marshall County, MS 

Tate County, MS 

Tunica County, MS 

Fayette County, TN 

Shelby County, TN 

Tipton County, TN 

32900 ....... Merced, CA ....................................................................................................................................................................... 1.2243 

Merced County, CA 

33124 ....... Miami-Miami Beach-Kendall, FL ....................................................................................................................................... 0.9830 

Miami-Dade County, FL 

33140 ....... Michigan City-La Porte, IN ................................................................................................................................................ 0.9159 

LaPorte County, IN 

33260 ....... Midland, TX ....................................................................................................................................................................... 0.9827 

Midland County, TX 

33340 ....... Milwaukee-Waukesha-West Allis, WI ................................................................................................................................ 1.0080 

Milwaukee County, WI 

Ozaukee County, WI 

Washington County, WI 

Waukesha County, WI 


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TABLE 8—FY 2009 WAGE INDEX FOR URBAN AREAS BASED ON CBSA LABOR MARKET AREAS—Continued 

CBSA code Urban area (constituent counties) Wage index 

33460 ....... Minneapolis-St. Paul—Bloomington, MN-WI .................................................................................................................... 1.1150 

Anoka County, MN 

Carver County, MN 

Chisago County, MN 

Dakota County, MN 

Hennepin County, MN 

Isanti County, MN 

Ramsey County, MN 

Scott County, MN 

Sherburne County, MN 

Washington County, MN 

Wright County, MN 

Pierce County, WI 

St. Croix County, WI 

33540 ....... Missoula, MT ..................................................................................................................................................................... 0.8973 

Missoula County, MT 

33660 ....... Mobile, AL ......................................................................................................................................................................... 0.7908 

Mobile County, AL 

33700 ....... Modesto, CA ..................................................................................................................................................................... 1.2194 

Stanislaus County, CA 

33740 ....... Monroe, LA ........................................................................................................................................................................ 0.7900 

Ouachita Parish, LA 

Union Parish, LA 

33780 ....... Monroe, MI ........................................................................................................................................................................ 0.8941 

Monroe County, MI 

33860 ....... Montgomery, AL ................................................................................................................................................................ 0.8283 

Autauga County, AL 

Elmore County, AL 

Lowndes County, AL 

Montgomery County, AL 

34060 ....... Morgantown, WV ............................................................................................................................................................... 0.8528 

Monongalia County, WV 

Preston County, WV 

34100 ....... Morristown, TN .................................................................................................................................................................. 0.7254 

Grainger County, TN 

Hamblen County, TN 

Jefferson County, TN 

34580 ....... Mount Vernon-Anacortes, WA .......................................................................................................................................... 1.0292 

Skagit County, WA 

34620 ....... Muncie, IN ......................................................................................................................................................................... 0.8489 

Delaware County, IN 

34740 ....... Muskegon-Norton Shores, MI ........................................................................................................................................... 1.0055 

Muskegon County, MI 

34820 ....... Myrtle Beach-North Myrtle Beach-Conway, SC ................................................................................................................ 0.8652 

Horry County, SC 

34900 ....... Napa, CA ........................................................................................................................................................................... 1.4520 

Napa County, CA 

34940 ....... Naples-Marco Island, FL ................................................................................................................................................... 0.9672 

Collier County, FL 

34980 ....... Nashville-Davidson-Murfreesboro-Franklin, TN ................................................................................................................ 0.9504 

Cannon County, TN 

Cheatham County, TN 

Davidson County, TN 

Dickson County, TN 

Hickman County, TN 

Macon County, TN 

Robertson County, TN 

Rutherford County, TN 

Smith County, TN 

Sumner County, TN 

Trousdale County, TN 

Williamson County, TN 

Wilson County, TN 

35004 ....... Nassau-Suffolk, NY ........................................................................................................................................................... 1.2453 

Nassau County, NY 

Suffolk County, NY 

35084 ....... Newark-Union, NJ-PA ....................................................................................................................................................... 1.1731 

Essex County, NJ 

Hunterdon County, NJ 

Morris County, NJ 

Sussex County, NJ 

Union County, NJ 


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46454 Federal Register / Vol. 73, No. 154 / Friday, August 8, 2008 / Rules and Regulations 

TABLE 8—FY 2009 WAGE INDEX FOR URBAN AREAS BASED ON CBSA LABOR MARKET AREAS—Continued 

CBSA code Urban area (constituent counties) Wage index 

Pike County, PA 

35300 ....... New Haven-Milford, CT ..................................................................................................................................................... 1.1742 

New Haven County, CT 

35380 ....... New Orleans-Metairie-Kenner, LA .................................................................................................................................... 0.9103 

Jefferson Parish, LA 

Orleans Parish, LA 

Plaquemines Parish, LA 

St. Bernard Parish, LA 

St. Charles Parish, LA 

St. John the Baptist Parish, LA 

St. Tammany Parish, LA 

35644 ....... New York-White Plains-Wayne, NY-NJ ............................................................................................................................ 1.2885 

Bergen County, NJ 

Hudson County, NJ 

Passaic County, NJ 

Bronx County, NY 

Kings County, NY 

New York County, NY 

Putnam County, NY 

Queens County, NY 

Richmond County, NY 

Rockland County, NY 

Westchester County, NY 

35660 ....... Niles-Benton Harbor, MI ................................................................................................................................................... 0.9066 

Berrien County, MI 

35980 ....... Norwich-New London, CT ................................................................................................................................................. 1.1398 

New London County, CT 

36084 ....... Oakland-Fremont-Hayward, CA ........................................................................................................................................ 1.6092 

Alameda County, CA 

Contra Costa County, CA 

36100 ....... Ocala, FL ........................................................................................................................................................................... 0.8512 

Marion County, FL 

36140 ....... Ocean City, NJ .................................................................................................................................................................. 1.1496 

Cape May County, NJ 

36220 ....... Odessa, TX ....................................................................................................................................................................... 0.9475 

Ector County, TX 

36260 ....... Ogden-Clearfield, UT ........................................................................................................................................................ 0.9153 

Davis County, UT 

Morgan County, UT 

Weber County, UT 

36420 ....... Oklahoma City, OK ........................................................................................................................................................... 0.8724 

Canadian County, OK 

Cleveland County, OK 

Grady County, OK 

Lincoln County, OK 

Logan County, OK 

McClain County, OK 

Oklahoma County, OK 

36500 ....... Olympia, WA ..................................................................................................................................................................... 1.1537 

Thurston County, WA 

36540 ....... Omaha-Council Bluffs, NE-IA ........................................................................................................................................... 0.9441 

Harrison County, IA 

Mills County, IA 

Pottawattamie County, IA 

Cass County, NE 

Douglas County, NE 

Sarpy County, NE 

Saunders County, NE 

Washington County, NE 

36740 ....... Orlando-Kissimmee, FL .................................................................................................................................................... 0.9111 

Lake County, FL 

Orange County, FL 

Osceola County, FL 

Seminole County, FL 

36780 ....... Oshkosh-Neenah, WI ........................................................................................................................................................ 0.9474 

Winnebago County, WI 

36980 ....... Owensboro, KY ................................................................................................................................................................. 0.8685 

Daviess County, KY 

Hancock County, KY 

McLean County, KY 

37100 ....... Oxnard-Thousand Oaks-Ventura, CA ............................................................................................................................... 1.1951 

Ventura County, CA 


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TABLE 8—FY 2009 WAGE INDEX FOR URBAN AREAS BASED ON CBSA LABOR MARKET AREAS—Continued 

CBSA code Urban area (constituent counties) Wage index 

37340 ....... Palm Bay-Melbourne-Titusville, FL ................................................................................................................................... 0.9332 

Brevard County, FL 

37380 ....... Palm Coast, FL ................................................................................................................................................................. 0.8963 

Flagler County, FL 

37460 ....... Panama City-Lynn Haven, FL ........................................................................................................................................... 0.8360 

Bay County, FL 

37620 ....... Parkersburg-Marietta-Vienna, WV-OH .............................................................................................................................. 0.7867 

Washington County, OH 

Pleasants County, WV 

Wirt County, WV 

Wood County, WV 

37700 ....... Pascagoula, MS ................................................................................................................................................................ 0.8102 

George County, MS 

Jackson County, MS 

37764 ....... Peabody, MA ..................................................................................................................................................................... 1.0747 

Essex County, MA 

37860 ....... Pensacola-Ferry Pass-Brent, FL ....................................................................................................................................... 0.8242 

Escambia County, FL 

Santa Rosa County, FL 

37900 ....... Peoria, IL ........................................................................................................................................................................... 0.9038 

Marshall County, IL 

Peoria County, IL 

Stark County, IL 

Tazewell County, IL 

Woodford County, IL 

37964 ....... Philadelphia, PA ................................................................................................................................................................ 1.0979 

Bucks County, PA 

Chester County, PA 

Delaware County, PA 

Montgomery County, PA 

Philadelphia County, PA 

38060 ....... Phoenix-Mesa-Scottsdale, AZ ........................................................................................................................................... 1.0379 

Maricopa County, AZ 

Pinal County, AZ 

38220 ....... Pine Bluff, AR .................................................................................................................................................................... 0.7926 

Cleveland County, AR 

Jefferson County, AR 

Lincoln County, AR 

38300 ....... Pittsburgh, PA ................................................................................................................................................................... 0.8678 

Allegheny County, PA 

Armstrong County, PA 

Beaver County, PA 

Butler County, PA 

Fayette County, PA 

Washington County, PA 

Westmoreland County, PA 

38340 ....... Pittsfield, MA ..................................................................................................................................................................... 1.0445 

Berkshire County, MA 

38540 ....... Pocatello, ID ...................................................................................................................................................................... 0.9343 

Bannock County, ID 

Power County, ID 

38660 ....... Ponce, PR ......................................................................................................................................................................... 0.4289 

Juana Dı ́az Municipio, PR 

Ponce Municipio, PR 

Villalba Municipio, PR 

38860 ....... Portland-South Portland-Biddeford, ME ............................................................................................................................ 0.9942 

Cumberland County, ME 

Sagadahoc County, ME 

York County, ME 

38900 ....... Portland-Vancouver-Beaverton, OR-WA .......................................................................................................................... 1.1456 

Clackamas County, OR 

Columbia County, OR 

Multnomah County, OR 

Washington County, OR 

Yamhill County, OR 

Clark County, WA 

Skamania County, WA 

38940 ....... Port St. Lucie, FL .............................................................................................................................................................. 0.9870 

Martin County, FL 

St. Lucie County, FL 

39100 ....... Poughkeepsie-Newburgh-Middletown, NY ........................................................................................................................ 1.0920 

Dutchess County, NY 


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TABLE 8—FY 2009 WAGE INDEX FOR URBAN AREAS BASED ON CBSA LABOR MARKET AREAS—Continued 

CBSA code Urban area (constituent counties) Wage index 

Orange County, NY 

39140 ....... Prescott, AZ ...................................................................................................................................................................... 1.0221 

Yavapai County, AZ 

39300 ....... Providence-New Bedford-Fall River, RI-MA ..................................................................................................................... 1.0696 

Bristol County, MA 

Bristol County, RI 

Kent County, RI 

Newport County, RI 

Providence County, RI 

Washington County, RI 

39340 ....... Provo-Orem, UT ................................................................................................................................................................ 0.9381 

Juab County, UT 

Utah County, UT 

39380 ....... Pueblo, CO ........................................................................................................................................................................ 0.8713 

Pueblo County, CO 

39460 ....... Punta Gorda, FL ............................................................................................................................................................... 0.8976 

Charlotte County, FL 

39540 ....... Racine, WI ......................................................................................................................................................................... 0.9054 

Racine County, WI 

39580 ....... Raleigh-Cary, NC .............................................................................................................................................................. 0.9817 

Franklin County, NC 

Johnston County, NC 

Wake County, NC 

39660 ....... Rapid City, SD .................................................................................................................................................................. 0.9598 

Meade County, SD 

Pennington County, SD 

39740 ....... Reading, PA ...................................................................................................................................................................... 0.9242 

Berks County, PA 

39820 ....... Redding, CA ...................................................................................................................................................................... 1.3731 

Shasta County, CA 

39900 ....... Reno-Sparks, NV .............................................................................................................................................................. 1.0317 

Storey County, NV 

Washoe County, NV 

40060 ....... Richmond, VA ................................................................................................................................................................... 0.9363 

Amelia County, VA 

Caroline County, VA 

Charles City County, VA 

Chesterfield County, VA 

Cumberland County, VA 

Dinwiddie County, VA 

Goochland County, VA 

Hanover County, VA 

Henrico County, VA 

King and Queen County, VA 

King William County, VA 

Louisa County, VA 

New Kent County, VA 

Powhatan County, VA 

Prince George County, VA 

Sussex County, VA 

Colonial Heights City, VA 

Hopewell City, VA 

Petersburg City, VA 

Richmond City, VA 

40140 ....... Riverside-San Bernardino-Ontario, CA ............................................................................................................................. 1.1468 

Riverside County, CA 

San Bernardino County, CA 

40220 ....... Roanoke, VA ..................................................................................................................................................................... 0.8660 

Botetourt County, VA 

Craig County, VA 

Franklin County, VA 

Roanoke County, VA 

Roanoke City, VA 

Salem City, VA 

40340 ....... Rochester, MN .................................................................................................................................................................. 1.1214 

Dodge County, MN 

Olmsted County, MN 

Wabasha County, MN 

40380 ....... Rochester, NY ................................................................................................................................................................... 0.8811 

Livingston County, NY 

Monroe County, NY 

Ontario County, NY 


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TABLE 8—FY 2009 WAGE INDEX FOR URBAN AREAS BASED ON CBSA LABOR MARKET AREAS—Continued 

CBSA code Urban area (constituent counties) Wage index 

Orleans County, NY 

Wayne County, NY 

40420 ....... Rockford, IL ....................................................................................................................................................................... 0.9835 

Boone County, IL 

Winnebago County, IL 

40484 ....... Rockingham County, NH .................................................................................................................................................. 0.9926 

Strafford County, NH 

40580 ....... Rocky Mount, NC .............................................................................................................................................................. 0.9031 

Edgecombe County, NC 

Nash County, NC 

40660 ....... Rome, GA ......................................................................................................................................................................... 0.9134 

Floyd County, GA 

40900 ....... Sacramento—Arden-Arcade—Roseville, CA .................................................................................................................... 1.3572 

El Dorado County, CA 

Placer County, CA 

Sacramento County, CA 

Yolo County, CA 

40980 ....... Saginaw-Saginaw Township North, MI ............................................................................................................................. 0.8702 

Saginaw County, MI 

41060 ....... St. Cloud, MN .................................................................................................................................................................... 1.0976 

Benton County, MN 

Stearns County, MN 

41100 ....... St. George, UT .................................................................................................................................................................. 0.9021 

Washington County, UT 

41140 ....... St. Joseph, MO-KS ........................................................................................................................................................... 1.0380 

Doniphan County, KS 

Andrew County, MO 

Buchanan County, MO 

DeKalb County, MO 

41180 ....... St. Louis, MO-IL ................................................................................................................................................................ 0.9006 

Bond County, IL 

Calhoun County, IL 

Clinton County, IL 

Jersey County, IL 

Macoupin County, IL 

Madison County, IL 

Monroe County, IL 

St. Clair County, IL 

Crawford County, MO 

Franklin County, MO 

Jefferson County, MO 

Lincoln County, MO 

St. Charles County, MO 

St. Louis County, MO 

Warren County, MO 

Washington County, MO 

St. Louis City, MO 

41420 ....... Salem, OR ......................................................................................................................................................................... 1.0884 

Marion County, OR 

Polk County, OR 

41500 ....... Salinas, CA ....................................................................................................................................................................... 1.4987 

Monterey County, CA 

41540 ....... Salisbury, MD .................................................................................................................................................................... 0.9246 

Somerset County, MD 

Wicomico County, MD 

41620 ....... Salt Lake City, UT ............................................................................................................................................................. 0.9158 

Salt Lake County, UT 

Summit County, UT 

Tooele County, UT 

41660 ....... San Angelo, TX ................................................................................................................................................................. 0.8424 

Irion County, TX 

Tom Green County, TX 

41700 ....... San Antonio, TX ................................................................................................................................................................ 0.8856 

Atascosa County, TX 

Bandera County, TX 

Bexar County, TX 

Comal County, TX 

Guadalupe County, TX 

Kendall County, TX 

Medina County, TX 

Wilson County, TX 

41740 ....... San Diego-Carlsbad-San Marcos, CA .............................................................................................................................. 1.1538 


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46458 Federal Register / Vol. 73, No. 154 / Friday, August 8, 2008 / Rules and Regulations 

TABLE 8—FY 2009 WAGE INDEX FOR URBAN AREAS BASED ON CBSA LABOR MARKET AREAS—Continued 

CBSA code Urban area (constituent counties) Wage index 

San Diego County, CA 

41780 ....... Sandusky, OH ................................................................................................................................................................... 0.8870 

Erie County, OH 

41884 ....... San Francisco-San Mateo-Redwood City, CA .................................................................................................................. 1.5529 

Marin County, CA 

San Francisco County, CA 

San Mateo County, CA 

41900 ....... San Germa ́n-Cabo Rojo, PR ............................................................................................................................................ 0.4756 

Cabo Rojo Municipio, PR 

Lajas Municipio, PR 

Sabana Grande Municipio, PR 

San Germa ́n Municipio, PR 

41940 ....... San Jose-Sunnyvale-Santa Clara, CA .............................................................................................................................. 1.6141 

San Benito County, CA 

Santa Clara County, CA 

41980 ....... San Juan-Caguas-Guaynabo, PR .................................................................................................................................... 0.4393 

Aguas Buenas Municipio, PR 

Aibonito Municipio, PR 

Arecibo Municipio, PR 

Barceloneta Municipio, PR 

Barranquitas Municipio, PR 

Bayamo ́n Municipio, PR 

Caguas Municipio, PR 

Camuy Municipio, PR 

Cano ́vanas Municipio, PR 

Carolina Municipio, PR 

Catan ̃o Municipio, PR 

Cayey Municipio, PR 

Ciales Municipio, PR 

Cidra Municipio, PR 

Comer ́ıo Municipio, PR 

Corozal Municipio, PR 

Dorado Municipio, PR 

Florida Municipio, PR 

Guaynabo Municipio, PR 

Gurabo Municipio, PR 

Hatillo Municipio, PR 

Humacao Municipio, PR 

Juncos Municipio, PR 

Las Piedras Municipio, PR 

Lo ́ıza Municipio, PR 

Manat ́ı Municipio, PR 

Maunabo Municipio, PR 

Morovis Municipio, PR 

Naguabo Municipio, PR 

Naranjito Municipio, PR 

Orocovis Municipio, PR 

Quebradillas Municipio, PR 

R ́ıo Grande Municipio, PR 

San Juan Municipio, PR 

San Lorenzo Municipio, PR 

Toa Alta Municipio, PR 

Toa Baja Municipio, PR 

Trujillo Alto Municipio, PR 

Vega Alta Municipio, PR 

Vega Baja Municipio, PR 

Yabucoa Municipio, PR 

42020 ....... San Luis Obispo-Paso Robles, CA ................................................................................................................................... 1.2441 

San Luis Obispo County, CA 

42044 ....... Santa Ana-Anaheim-Irvine, CA ......................................................................................................................................... 1.1993 

Orange County, CA 

42060 ....... Santa Barbara-Santa Maria-Goleta, CA ........................................................................................................................... 1.1909 

Santa Barbara County, CA 

42100 ....... Santa Cruz-Watsonville, CA ............................................................................................................................................. 1.6429 

Santa Cruz County, CA 

42140 ....... Santa Fe, NM .................................................................................................................................................................... 1.0610 

Santa Fe County, NM 

42220 ....... Santa Rosa-Petaluma, CA ................................................................................................................................................ 1.5528 

Sonoma County, CA 

42340 ....... Savannah, GA ................................................................................................................................................................... 0.9152 

Bryan County, GA 

Chatham County, GA 


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TABLE 8—FY 2009 WAGE INDEX FOR URBAN AREAS BASED ON CBSA LABOR MARKET AREAS—Continued 

CBSA code Urban area (constituent counties) Wage index 

Effingham County, GA 

42540 ....... Scranton—Wilkes-Barre, PA ............................................................................................................................................. 0.8333 

Lackawanna County, PA 

Luzerne County, PA 

Wyoming County, PA 

42644 ....... Seattle-Bellevue-Everett, WA ............................................................................................................................................ 1.1755 

King County, WA 

Snohomish County, WA 

42680 ....... Sebastian-Vero Beach, FL ................................................................................................................................................ 0.9217 

Indian River County, FL 

43100 ....... Sheboygan, WI .................................................................................................................................................................. 0.8920 

Sheboygan County, WI 

43300 ....... Sherman-Denison, TX ....................................................................................................................................................... 0.9024 

Grayson County, TX 

43340 ....... Shreveport-Bossier City, LA .............................................................................................................................................. 0.8442 

Bossier Parish, LA 

Caddo Parish, LA 

De Soto Parish, LA 

43580 ....... Sioux City, IA-NE-SD ........................................................................................................................................................ 0.8915 

Woodbury County, IA 

Dakota County, NE 

Dixon County, NE 

Union County, SD 

43620 ....... Sioux Falls, SD ................................................................................................................................................................. 0.9354 

Lincoln County, SD 

McCook County, SD 

Minnehaha County, SD 

Turner County, SD 

43780 ....... South Bend-Mishawaka, IN-MI ......................................................................................................................................... 0.9761 

St. Joseph County, IN 

Cass County, MI 

43900 ....... Spartanburg, SC ............................................................................................................................................................... 0.9025 

Spartanburg County, SC 

44060 ....... Spokane, WA .................................................................................................................................................................... 1.0559 

Spokane County, WA 

44100 ....... Springfield, IL .................................................................................................................................................................... 0.9102 

Menard County, IL 

Sangamon County, IL 

44140 ....... Springfield, MA .................................................................................................................................................................. 1.0405 

Franklin County, MA 

Hampden County, MA 

Hampshire County, MA 

44180 ....... Springfield, MO ................................................................................................................................................................. 0.8424 

Christian County, MO 

Dallas County, MO 

Greene County, MO 

Polk County, MO 

Webster County, MO 

44220 ....... Springfield, OH .................................................................................................................................................................. 0.8876 

Clark County, OH 

44300 ....... State College, PA .............................................................................................................................................................. 0.8937 

Centre County, PA 

44700 ....... Stockton, CA ..................................................................................................................................................................... 1.2015 

San Joaquin County, CA 

44940 ....... Sumter, SC ........................................................................................................................................................................ 0.8257 

Sumter County, SC 

45060 ....... Syracuse, NY .................................................................................................................................................................... 0.9787 

Madison County, NY 

Onondaga County, NY 

Oswego County, NY 

45104 ....... Tacoma, WA ..................................................................................................................................................................... 1.1241 

Pierce County, WA 

45220 ....... Tallahassee, FL ................................................................................................................................................................. 0.8964 

Gadsden County, FL 

Jefferson County, FL 

Leon County, FL 

Wakulla County, FL 

45300 ....... Tampa-St. Petersburg-Clearwater, FL .............................................................................................................................. 0.8852 

Hernando County, FL 

Hillsborough County, FL 

Pasco County, FL 

Pinellas County, FL 


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46460 Federal Register / Vol. 73, No. 154 / Friday, August 8, 2008 / Rules and Regulations 

TABLE 8—FY 2009 WAGE INDEX FOR URBAN AREAS BASED ON CBSA LABOR MARKET AREAS—Continued 

CBSA code Urban area (constituent counties) Wage index 

45460 ....... Terre Haute, IN ................................................................................................................................................................. 0.9085 

Clay County, IN 

Sullivan County, IN 

Vermillion County, IN 

Vigo County, IN 

45500 ....... Texarkana, TX-Texarkana, AR ......................................................................................................................................... 0.8144 

Miller County, AR 

Bowie County, TX 

45780 ....... Toledo, OH ........................................................................................................................................................................ 0.9407 

Fulton County, OH 

Lucas County, OH 

Ottawa County, OH 

Wood County, OH 

45820 ....... Topeka, KS ....................................................................................................................................................................... 0.8756 

Jackson County, KS 

Jefferson County, KS 

Osage County, KS 

Shawnee County, KS 

Wabaunsee County, KS 

45940 ....... Trenton-Ewing, NJ ............................................................................................................................................................ 1.0604 

Mercer County, NJ 

46060 ....... Tucson, AZ ........................................................................................................................................................................ 0.9229 

Pima County, AZ 

46140 ....... Tulsa, OK .......................................................................................................................................................................... 0.8445 

Creek County, OK 

Okmulgee County, OK 

Osage County, OK 

Pawnee County, OK 

Rogers County, OK 

Tulsa County, OK 

Wagoner County, OK 

46220 ....... Tuscaloosa, AL ................................................................................................................................................................. 0.8496 

Greene County, AL 

Hale County, AL 

Tuscaloosa County, AL 

46340 ....... Tyler, TX ............................................................................................................................................................................ 0.8804 

Smith County, TX 

46540 ....... Utica-Rome, NY ................................................................................................................................................................ 0.8404 

Herkimer County, NY 

Oneida County, NY 

46660 ....... Valdosta, GA ..................................................................................................................................................................... 0.8027 

Brooks County, GA 

Echols County, GA 

Lanier County, GA 

Lowndes County, GA 

46700 ....... Vallejo-Fairfield, CA .......................................................................................................................................................... 1.4359 

Solano County, CA 

47020 ....... Victoria, TX ........................................................................................................................................................................ 0.8124 

Calhoun County, TX 

Goliad County, TX 

Victoria County, TX 

47220 ....... Vineland-Millville-Bridgeton, NJ ........................................................................................................................................ 1.0366 

Cumberland County, NJ 

47260 ....... Virginia Beach-Norfolk-Newport News, VA-NC ................................................................................................................ 0.8884 

Currituck County, NC 

Gloucester County, VA 

Isle of Wight County, VA 

James City County, VA 

Mathews County, VA 

Surry County, VA 

York County, VA 

Chesapeake City, VA 

Hampton City, VA 

Newport News City, VA 

Norfolk City, VA 

Poquoson City, VA 

Portsmouth City, VA 

Suffolk City, VA 

Virginia Beach City, VA 

Williamsburg City, VA 

47300 ....... Visalia-Porterville, CA ....................................................................................................................................................... 1.0144 

Tulare County, CA 


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Federal Register / Vol. 73, No. 154 / Friday, August 8, 2008 / Rules and Regulations 46461 

TABLE 8—FY 2009 WAGE INDEX FOR URBAN AREAS BASED ON CBSA LABOR MARKET AREAS—Continued 

CBSA code Urban area (constituent counties) Wage index 

47380 ....... Waco, TX .......................................................................................................................................................................... 0.8596 

McLennan County, TX 

47580 ....... Warner Robins, GA ........................................................................................................................................................... 0.8989 

Houston County, GA 

47644 ....... Warren-Troy-Farmington Hills, MI ..................................................................................................................................... 0.9904 

Lapeer County, MI 

Livingston County, MI 

Macomb County, MI 

Oakland County, MI 

St. Clair County, MI 

47894 ....... Washington-Arlington-Alexandria, DC-VA-MD-WV ........................................................................................................... 1.0827 

District of Columbia, DC 

Calvert County, MD 

Charles County, MD 

Prince George’s County, MD 

Arlington County, VA 

Clarke County, VA 

Fairfax County, VA 

Fauquier County, VA 

Loudoun County, VA 

Prince William County, VA 

Spotsylvania County, VA 

Stafford County, VA 

Warren County, VA 

Alexandria City, VA 

Fairfax City, VA 

Falls Church City, VA 

Fredericksburg City, VA 

Manassas City, VA 

Manassas Park City, VA 

Jefferson County, WV 

47940 ....... Waterloo-Cedar Falls, IA ................................................................................................................................................... 0.8490 

Black Hawk County, IA 

Bremer County, IA 

Grundy County, IA 

48140 ....... Wausau, WI ....................................................................................................................................................................... 0.9615 

Marathon County, WI 

48260 ....... Weirton-Steubenville, WV-OH ........................................................................................................................................... 0.8079 

Jefferson County, OH 

Brooke County, WV 

Hancock County, WV 

48300 ....... Wenatchee, WA ................................................................................................................................................................ 0.9544 

Chelan County, WA 

Douglas County, WA 

48424 ....... West Palm Beach-Boca Raton-Boynton Beach, FL ......................................................................................................... 0.9757 

Palm Beach County, FL 

48540 ....... Wheeling, WV-OH ............................................................................................................................................................. 0.6955 

Belmont County, OH 

Marshall County, WV 

Ohio County, WV 

48620 ....... Wichita, KS ........................................................................................................................................................................ 0.9069 

Butler County, KS 

Harvey County, KS 

Sedgwick County, KS 

Sumner County, KS 

48660 ....... Wichita Falls, TX ............................................................................................................................................................... 0.8832 

Archer County, TX 

Clay County, TX 

Wichita County, TX 

48700 ....... Williamsport, PA ................................................................................................................................................................ 0.8096 

Lycoming County, PA 

48864 ....... Wilmington, DE-MD-NJ ..................................................................................................................................................... 1.0696 

New Castle County, DE 

Cecil County, MD 

Salem County, NJ 

48900 ....... Wilmington, NC ................................................................................................................................................................. 0.9089 

Brunswick County, NC 

New Hanover County, NC 

Pender County, NC 

49020 ....... Winchester, VA-WV .......................................................................................................................................................... 0.9801 

Frederick County, VA 

Winchester City, VA 


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46462 Federal Register / Vol. 73, No. 154 / Friday, August 8, 2008 / Rules and Regulations 

TABLE 8—FY 2009 WAGE INDEX FOR URBAN AREAS BASED ON CBSA LABOR MARKET AREAS—Continued 

CBSA code Urban area (constituent counties) Wage index 

Hampshire County, WV 

49180 ....... Winston-Salem, NC ........................................................................................................................................................... 0.9016 

Davie County, NC 

Forsyth County, NC 

Stokes County, NC 

Yadkin County, NC 

49340 ....... Worcester, MA .................................................................................................................................................................. 1.0836 

Worcester County, MA 

49420 ....... Yakima, WA ...................................................................................................................................................................... 0.9948 

Yakima County, WA 

49500 ....... Yauco, PR ......................................................................................................................................................................... 0.3432 

Gua ́nica Municipio, PR 

Guayanilla Municipio, PR 

Pen ̃uelas Municipio, PR 

Yauco Municipio, PR 

49620 ....... York-Hanover, PA ............................................................................................................................................................. 0.9518 

York County, PA 

49660 ....... Youngstown-Warren-Boardman, OH-PA .......................................................................................................................... 0.8915 

Mahoning County, OH 

Trumbull County, OH 

Mercer County, PA 

49700 ....... Yuba City, CA ................................................................................................................................................................... 1.1137 

Sutter County, CA 

Yuba County, CA 

49740 ....... Yuma, AZ .......................................................................................................................................................................... 0.9281 

Yuma County, AZ 

1At this time, there are no hospitals located in this urban area on which to base a wage index. We use the average wage index of all of the 

urban areas within the State to serve as a reasonable proxy. 

TABLE 9—FY 2009 WAGE INDEX

BASED ON CBSA LABOR MARKET

AREAS FOR RURAL AREAS

State 

code Nonurban area Wage index 

1 ........ Alabama ........................ 0.7587 

2 ........ Alaska ............................ 1.1898 

3 ........ Arizona .......................... 0.8453 

4 ........ Arkansas ........................ 0.7473 

5 ........ California ....................... 1.2275 

6 ........ Colorado ........................ 0.9570 

7 ........ Connecticut .................... 1.1016 

8 ........ Delaware ....................... 0.9962 

10 ...... Florida ............................ 0.8504 

11 ...... Georgia .......................... 0.7612 

12 ...... Hawaii ............................ 1.0999 

13 ...... Idaho .............................. 0.7651 

14 ...... Illinois ............................. 0.8386 

15 ...... Indiana ........................... 0.8473 

16 ...... Iowa ............................... 0.8804 

17 ...... Kansas ........................... 0.8052 

18 ...... Kentucky ........................ 0.7803 

19 ...... Louisiana ....................... 0.7447 

20 ...... Maine ............................. 0.8644 

21 ...... Maryland ........................ 0.8883 

22 ...... Massachusetts 1 ............ 1.1670 

23 ...... Michigan ........................ 0.8887 

24 ...... Minnesota ...................... 0.9059 

TABLE 9—FY 2009 WAGE INDEX

BASED ON CBSA LABOR MARKET

AREAS FOR RURAL AREAS—Continued 

State 

code Nonurban area Wage index 

25 ...... Mississippi ..................... 0.7584 

26 ...... Missouri ......................... 0.7982 

27 ...... Montana ......................... 0.8658 

28 ...... Nebraska ....................... 0.8730 

29 ...... Nevada .......................... 0.9382 

30 ...... New Hampshire ............. 1.0182 

31 ...... New Jersey 1 ................. ................

32 ...... New Mexico ................... 0.8812 

33 ...... New York ....................... 0.8145 

34 ...... North Carolina ............... 0.8576 

35 ...... North Dakota ................. 0.7205 

36 ...... Ohio ............................... 0.8588 

37 ...... Oklahoma ...................... 0.7732 

38 ...... Oregon ........................... 1.0218 

39 ...... Pennsylvania ................. 0.8365 

40 ...... Puerto Rico 1 ................. 0.4047 

41 ...... Rhode Island 1 ............... ................

42 ...... South Carolina ............... 0.8538 

43 ...... South Dakota ................. 0.8603 

44 ...... Tennessee ..................... 0.7789 

45 ...... Texas ............................. 0.7894 

TABLE 9—FY 2009 WAGE INDEX

BASED ON CBSA LABOR MARKET

AREAS FOR RURAL AREAS—Continued 

State 

code Nonurban area Wage index 

46 ...... Utah ............................... 0.8267 

47 ...... Vermont ......................... 1.0079 

48 ...... Virgin Islands ................. 0.6971 

49 ...... Virginia ........................... 0.7861 

50 ...... Washington .................... 1.0181 

51 ...... West Virginia ................. 0.7503 

52 ...... Wisconsin ...................... 0.9373 

53 ...... Wyoming ........................ 0.9315 

65 ...... Guam ............................. 0.9611 

1All counties within the State are classified 

as urban, with the exception of Massachusetts 

and Puerto Rico. Massachusetts and Puerto 

Rico have areas designated as rural; however, 

no short-term, acute care hospitals are located 

in the area(s) for FY 2009. The rural Massachusetts wage index is calculated as the average of all contiguous CBSAs. The Puerto Rico 

wage index is the same as FY 2008. 

[FR Doc. E8–17948 Filed 7–31–08; 4:15 pm] 

BILLING CODE 4120–01–P 


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