Federal Register / Vol. 74, No. 203 / Thursday, October 22, 2009 / Notices 54579 

IV. Waiver of Proposed Notice 

The statute requires publication of the 

monthly actuarial rates and the Part B 

premium amounts. We ordinarily use 

general notices, rather than notice and 

comment rulemaking procedures, to 

make such announcements. In doing so, 

we note that, under the Administrative 

Procedure Act, interpretive rules, 

general statements of policy, and rules 

of agency organization, procedure, or 

practice are excepted from the 

requirements of notice and comment 

rulemaking. 

We considered publishing a proposed 

notice to provide a period for public 

comment. However, we may waive that 

procedure if we find, for good cause, 

that prior notice and comment are 

impracticable, unnecessary, or contrary 

to the public interest. We find that the 

procedure for notice and comment is 

unnecessary because the formulas used 

to calculate the Part B premiums are 

statutorily directed, and we can exercise 

no discretion in applying those 

formulas. Moreover, the statute 

establishes the time period for which 

the premium rates will apply, and 

delaying publication of the Part B 

premium rate such that it would not be 

published before that time would be 

contrary to the public interest. 

Therefore, we find good cause to waive 

publication of a proposed notice and 

solicitation of public comments. 

(Catalog of Federal Domestic Assistance 

Program No. 93.773, Medicare—Hospital 

Insurance; and Program No. 93.774, 

Medicare—Supplementary Medical 

Insurance Program) 

Dated: October 14, 2009. 

Charlene Frizzera, 

Acting Administrator, Centers for Medicare 

& Medicaid Services. 

Approved: October 16, 2009. 

Kathleen Sebelius, 

Secretary. 

[FR Doc. E9–25370 Filed 10–16–09; 4:15 pm] 

BILLING CODE 4120–01–P 

DEPARTMENT OF HEALTH AND 

HUMAN SERVICES 

Centers for Medicare & Medicaid 

Services 

[CMS–8037–N] 

RIN 0938–AP42 

Medicare Program; Inpatient Hospital 

Deductible and Hospital and Extended 

Care Services Coinsurance Amounts 

for Calendar Year 2010 

AGENCY: Centers for Medicare & 

Medicaid Services (CMS), HHS. 

ACTION: Notice. 

SUMMARY: This notice announces the 

inpatient hospital deductible and the 

hospital and extended care services 

coinsurance amounts for services 

furnished in calendar year (CY) 2010 

under Medicare’s Hospital Insurance 

Program (Medicare Part A). The 

Medicare statute specifies the formulae 

used to determine these amounts. For 

CY 2010, the inpatient hospital 

deductible will be $1,100. The daily 

coinsurance amounts for CY 2010 will 

be—(a) $275 for the 61st through 90th 

day of hospitalization in a benefit 

period; (b) $550 for lifetime reserve 

days; and (c) $137.50 for the 21st 

through 100th day of extended care 

services in a skilled nursing facility in 

a benefit period. 

DATES: Effective Date: This notice is 

effective on January 1, 2010. 

FOR FURTHER INFORMATION CONTACT: 

Clare McFarland, (410) 786–6390 for 

general information. Gregory J. Savord, 

(410) 786–1521 for case-mix analysis. 

SUPPLEMENTARY INFORMATION: 

I. Background 

Section 1813 of the Social Security 

Act (the Act) provides for an inpatient 

hospital deductible to be subtracted 

from the amount payable by Medicare 

for inpatient hospital services furnished 

to a beneficiary. It also provides for 

certain coinsurance amounts to be 

subtracted from the amounts payable by 

Medicare for inpatient hospital and 

extended care services. Section 

1813(b)(2) of the Act requires us to 

determine and publish each year the 

amount of the inpatient hospital 

deductible and the hospital and 

extended care services coinsurance 

amounts applicable for services 

furnished in the following CY. 

II. Computing the Inpatient Hospital 

Deductible for CY 2010 

Section 1813(b) of the Act prescribes 

the method for computing the amount of 

the inpatient hospital deductible. The 

inpatient hospital deductible is an 

amount equal to the inpatient hospital 

deductible for the preceding CY, 

adjusted by our best estimate of the 

payment-weighted average of the 

applicable percentage increases (as 

defined in section 1886(b)(3)(B) of the 

Act) used for updating the payment 

rates to hospitals for discharges in the 

fiscal year (FY) that begins on October 

1 of the same preceding CY, and 

adjusted to reflect changes in real casemix. The adjustment to reflect real casemix is determined on the basis of the 

most recent case-mix data available. The 

amount determined under this formula 

is rounded to the nearest multiple of $4 

(or, if midway between two multiples of 

$4, to the next higher multiple of $4). 

Under section 1886(b)(3)(B)(i)(XX) of 

the Act, the percentage increase used to 

update the payment rates for FY 2010 

for hospitals paid under the inpatient 

prospective payment system is the 

market basket percentage increase, 

otherwise known as the market basket 

update. Under section 1886(b)(3)(B)(viii) 

of the Act, hospitals will receive the full 

market basket update only if they 

submit quality data as specified by the 

Secretary. The market basket update for 

hospitals that do not submit this data is 

reduced by 2.0 percentage points. We 

are estimating that after accounting for 

those hospitals receiving the lower 

market basket update in the paymentweighted average update, the calculated 

deductible will remain the same. 

Under section 1886(b)(3)(B)(ii)(VIII) of 

the Act, the percentage increase used to 

update the payment rates for FY 2010 

for hospitals excluded from the 

prospective payment system is the 

market basket percentage increase, 

defined according to section 

1886(b)(3)(B)(iii) of the Act. 

The market basket percentage increase 

for 2010 is 2.1 percent, as announced in 

the final rule with comment period 

published in the Federal Register on 

August 27, 2009 entitled, ‘‘Medicare 

Program; Changes to the Hospital 

Inpatient Prospective Payment Systems 

for Acute Care Hospitals and Fiscal Year 

2010 Rates; and Changes to the LongTerm Care Hospital Prospective 

Payment System and Rate Years 2010 

and 2009 Rates (IPPS/RY 2010 LTCH 

PPS) (74 FR 43754).’’ Therefore, the 

percentage increase for hospitals paid 

under the prospective payment system 

is 2.1 percent. The average payment 

percentage increase for hospitals 

excluded from the prospective payment 

system is 2.5 percent. Weighting these 

percentages in accordance with 

payment volume, our best estimate of 

the payment-weighted average of the 

increases in the payment rates for FY 

2010 is 2.15 percent. 

To develop the adjustment to reflect 

changes in real case-mix, we first 

calculated for each hospital an average 

case-mix that reflects the relative 

costliness of that hospital’s mix of cases 

compared to those of other hospitals. 

We then computed the change in 

average case-mix for hospitals paid 

under the Medicare prospective 

payment system in FY 2009 compared 

to FY 2008. (We excluded from this 

calculation hospitals whose payments 

are not based on the Acute care 

prospective payment system because 

their payments are based on alternate 


dcolon on DSK2BSOYB1PROD with NOTICES
54580 Federal Register / Vol. 74, No. 203 / Thursday, October 22, 2009 / Notices 

prospective payment systems or 

reasonable costs.) We used Medicare 

bills from prospective payment 

hospitals that we received as of June 

2009. These bills represent a total of 

about 9.0 million Medicare discharges 

for FY 2009 and provide the most recent 

case-mix data available at this time. 

Based on these bills, the change in 

average case-mix in FY 2009 is 2.5 

percent. Based on these bills and past 

experience, we expect the overall case 

mix change to be 3.1 percent as the year 

progresses and more FY 2009 data 

become available. 

Section 1813 of the Act requires that 

the inpatient hospital deductible be 

adjusted only by that portion of the 

case-mix change that is determined to 

be real. In the FY 2010 IPPS/RY 2010 

LTCH PPS final rule with comment 

period, we indicated that we believe the 

adoption of the Medicare severity-based 

diagnosis-related groups (MS–DRGs) led 

to increases in aggregate payments 

without a corresponding increase in 

actual patient severity of illness due to 

the incentives for improved 

documentation and coding. In that final 

rule with comment period, we estimated 

that changes in coding or classification 

that do not reflect real change in casemix would be 2.3 percent for FY 2009. 

Therefore, since we are expecting 

overall case mix to increase by 3.1 

percent and 2.3 percent of that to be 

caused by coding changes, real case-mix 

changes resulted in an increase of 0.8 

percent for FY 2009. 

Thus, the estimate of the paymentweighted average of the applicable 

percentage increases used for updating 

the payment rates is 2.15 percent, and 

the real case-mix adjustment factor for 

the deductible is 0.8 percent. Therefore, 

under the statutory formula, the 

inpatient hospital deductible for 

services furnished in CY 2010 is $1,100. 

This deductible amount is determined 

by multiplying $1,068 (the inpatient 

hospital deductible for CY 2009) by the 

payment-weighted average increase in 

the payment rates of 1.0215 multiplied 

by the increase in real case-mix of 1.008, 

which equals $1,099.69 and is rounded 

to $1,100. 

III. Computing the Inpatient Hospital 

and Extended Care Services 

Coinsurance Amounts for CY 2010 

The coinsurance amounts provided 

for in section 1813 of the Act are 

defined as fixed percentages of the 

inpatient hospital deductible for 

services furnished in the same CY. The 

increase in the deductible generates 

increases in the coinsurance amounts. 

For inpatient hospital and extended care 

services furnished in CY 2010, in 

accordance with the fixed percentages 

defined in the law, the daily 

coinsurance for the 61st through 90th 

day of hospitalization in a benefit 

period will be $275 (one-fourth of the 

inpatient hospital deductible); the daily 

coinsurance for lifetime reserve days 

will be $550 (one-half of the inpatient 

hospital deductible); and the daily 

coinsurance for the 21st through 100th 

day of extended care services in a 

skilled nursing facility in a benefit 

period will be $137.50 (one-eighth of 

the inpatient hospital deductible). 

IV. Cost to Medicare Beneficiaries 

Table 1 below summarizes the 

deductible and coinsurance amounts for 

CYs 2009 and 2010, as well as the 

number of each that is estimated to be 

paid. 

TABLE 1—PART A DEDUCTIBLE AND COINSURANCE AMOUNTS FOR CALENDAR YEARS 2009 AND 2010 

Type of cost sharing 

Value Number paid 

(in millions) 

2009 2010 2009 2010 

Inpatient hospital deductible ........................................................................ $1068 $1100 8.70 8.80 

Daily coinsurance for 61st–90th day ........................................................... 267 275 2.27 2.30 

Daily coinsurance for lifetime reserve days ................................................. 534 550 1.12 1.13 

SNF coinsurance ......................................................................................... 133 .50 137 .50 40.79 41.74 

The estimated total increase in costs 

to beneficiaries is about $730 million 

(rounded to the nearest $10 million) due 

to—(1) the increase in the deductible 

and coinsurance amounts; and (2) the 

change in the number of deductibles 

and daily coinsurance amounts paid. 

V. Waiver of Proposed Notice and 

Comment Period 

The Medicare statute, as discussed 

previously, requires publication of the 

Medicare Part A inpatient hospital 

deductible and the hospital and 

extended care services coinsurance 

amounts for services for each CY. The 

amounts are determined according to 

the statute. As has been our custom, we 

use general notices, rather than notice 

and comment rulemaking procedures, to 

make the announcements. In doing so, 

we acknowledge that, under the 

Administrative Procedure Act (APA), 

interpretive rules, general statements of 

policy, and rules of agency organization, 

procedure, or practice are excepted from 

the requirements of notice and comment 

rulemaking. 

We considered publishing a proposed 

notice to provide a period for public 

comment. However, we may waive that 

procedure if we find good cause that 

prior notice and comment are 

impracticable, unnecessary, or contrary 

to the public interest. We find that the 

procedure for notice and comment is 

unnecessary because the formulae used 

to calculate the inpatient hospital 

deductible and hospital and extended 

care services coinsurance amounts are 

statutorily directed, and we can exercise 

no discretion in following the formulae. 

Moreover, the statute establishes the 

time period for which the deductible 

and coinsurance amounts will apply 

and delaying publication would be 

contrary to the public interest. 

Therefore, we find good cause to waive 

publication of a proposed notice and 

solicitation of public comments. 

VI. 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. 35). 

VII. Regulatory Impact Statement 

We have examined the impacts of this 

final rule as required by Executive 

Order 12866 on Regulatory Planning 

and Review (September 30, 1993), the 

Regulatory Flexibility Act (RFA) 

(September 19, 1980, Pub. L. 96–354), 

section 1102(b) of the Social Security 

Act, section 202 of the Unfunded 

Mandates Reform Act of 1995 (Pub. L. 

104–4), Executive Order 13132 on 

Federalism (August 4, 1999), and the 


dcolon on DSK2BSOYB1PROD with NOTICES
Federal Register / Vol. 74, No. 203 / Thursday, October 22, 2009 / Notices 54581 

Congressional Review Act (5 U.S.C. 

804(2)). 

Executive Order 12866 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). As stated in section IV 

of this notice, we estimate that the total 

increase in costs to beneficiaries 

associated with this notice is about $730 

million due to—(1) The increase in the 

deductible and coinsurance amounts; 

and (2) the change in the number of 

deductibles and daily coinsurance 

amounts paid. Therefore, this notice is 

a major rule as defined in Title 5, 

United States Code, section 804(2), and 

is an economically significant rule 

under Executive Order 12866. 

The RFA requires agencies to analyze 

options for regulatory relief of small 

businesses, if a rule has a significant 

impact on a substantial number of small 

entities. For purposes of the RFA, small 

entities include small businesses, 

nonprofit organizations, and 

government agencies. Most hospitals 

and most other providers and suppliers 

are small entities, either by nonprofit 

status or by having revenues of $7.0 

million to $34.5 million in any 1 year. 

Individuals and States are not included 

in the definition of a small entity. We 

have determined that this notice will 

not have a significant economic impact 

on a substantial number of small 

entities. Therefore, we are not preparing 

an analysis under the RFA. 

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. The Secretary has 

determined that this notice will not 

have a significant impact on the 

operations of a substantial number of 

small rural hospitals. Therefore, we are 

not preparing an analysis under section 

1102(b) of the Act. 

Section 202 of the Unfunded 

Mandates Reform Act of 1995 (UMRA) 

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 2009, that threshold is approximately 

$133 million. This notice has no 

consequential effect on State, local, or 

Tribal governments or on the private 

sector. However, States may be required 

to pay the deductibles and coinsurance 

for dually-eligible beneficiaries. 

Executive Order 13132 establishes 

certain requirements that an agency 

must meet when it promulgates a 

proposed rule (and subsequent final 

rule) that imposes substantial direct 

requirement costs on State and local 

governments, preempts State law, or 

otherwise has Federalism implications. 

This notice will not have a substantial 

effect on State or local governments. 

In accordance with the provisions of 

Executive Order 12866, this notice was 

reviewed by the Office of Management 

and Budget. 

(Catalog of Federal Domestic Assistance 

Program No. 93.773, Medicare—Hospital 

Insurance) 

Dated: September 1, 2009. 

Charlene Frizzera, 

Acting Administrator, Centers for Medicare 

& Medicaid Services. 

Dated: September 17, 2009. 

Kathleen Sebelius, 

Secretary. 

[FR Doc. E9–25372 Filed 10–16–09; 4:15 pm] 

BILLING CODE 4120–01–P 

DEPARTMENT OF HEALTH AND 

HUMAN SERVICES 

Centers for Medicare & Medicaid 

Services 

[CMS–8038–N] 

RIN 0938–AP43 

Medicare Program; Part A Premium for 

Calendar Year 2010 for the Uninsured 

Aged and for Certain Disabled 

Individuals Who Have Exhausted Other 

Entitlement 

AGENCY: Centers for Medicare & 

Medicaid Services (CMS), HHS. 

ACTION: Notice. 

SUMMARY: This annual notice announces 

Medicare’s Hospital Insurance (Part A) 

premium for uninsured enrollees in 

calendar year (CY) 2010. This premium 

is paid by enrollees age 65 and over who 

are not otherwise eligible for benefits 

under Medicare Part A (hereafter known 

as the ‘‘uninsured aged’’) and by certain 

disabled individuals who have 

exhausted other entitlement. The 

monthly Part A premium for the 12 

months beginning January 1, 2010 for 

these individuals will be $461. The 

reduced premium for certain other 

individuals as described in this notice 

will be $254. 

DATES: Effective Date: This notice is 

effective on January 1, 2010. 

FOR FURTHER INFORMATION CONTACT: 

Clare McFarland, (410) 786–6390. 

SUPPLEMENTARY INFORMATION: 

I. Background 

Section 1818 of the Social Security 

Act (the Act) provides for voluntary 

enrollment in the Medicare Hospital 

Insurance Program (Medicare Part A), 

subject to payment of a monthly 

premium, of certain persons aged 65 

and older who are uninsured under the 

Old-Age, Survivors, and Disability 

Insurance (OASDI) program or the 

Railroad Retirement Act and do not 

otherwise meet the requirements for 

entitlement to Medicare Part A. (Persons 

insured under the OASDI program or 

the Railroad Retirement Act and certain 

others do not have to pay premiums for 

Medicare Part A.) 

Section 1818A of the Act provides for 

voluntary enrollment in Medicare Part 

A, subject to payment of a monthly 

premium of certain disabled individuals 

who have exhausted other entitlement. 

These are individuals who were entitled 

to coverage due to a disabling 

impairment under section 226(b) of the 

Act, but are no longer entitled to 

disability benefits and free Medicare 

Part A coverage because they have gone 

back to work and their earnings exceed 

the statutorily defined ‘‘substantial 

gainful activity’’ amount (section 

223(d)(4) of the Act). 

Section 1818A(d)(2) of the Act 

specifies that the provisions relating to 

premiums under section 1818(d) 

through section 1818(f) of the Act for 

the aged will also apply to certain 

disabled individuals as described above. 

Section 1818(d) of the Act requires us 

to estimate, on an average per capita 

basis, the amount to be paid from the 

Federal Hospital Insurance Trust Fund 

for services incurred in the following 

calendar year (CY) (including the 

associated administrative costs) on 

behalf of individuals aged 65 and over 

who will be entitled to benefits under 

Medicare Part A. We must then 

determine, during September of each 

year, the monthly actuarial rate for the 

following year (the per capita amount 

estimated above divided by 12) and 

publish the dollar amount for the 

monthly premium in the succeeding CY. 

If the premium is not a multiple of $1, 

the premium is rounded to the nearest 

multiple of $1 (or, if it is a multiple of 


dcolon on DSK2BSOYB1PROD with NOTICES