[Federal Register Volume 82, Number 191 (Wednesday, October 4, 2017)]
[Rules and Regulations]
[Pages 46138-46163]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-21325]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

42 CFR Parts 405, 412, 413, 414, 416, 486, 488, 489, and 495

[CMS-1677-CN]
RIN-0938-AS98


Medicare Program; Hospital Inpatient Prospective Payment Systems 
for Acute Care Hospitals and the Long-Term Care Hospital Prospective 
Payment System and Policy Changes and Fiscal Year 2018 Rates; Quality 
Reporting Requirements for Specific Providers; Medicare and Medicaid 
Electronic Health Record (EHR) Incentive Program Requirements for 
Eligible Hospitals, Critical Access Hospitals, and Eligible 
Professionals; Provider-Based Status of Indian Health Service and 
Tribal Facilities and Organizations; Costs Reporting and Provider 
Requirements; Agreement Termination Notices; Correction

AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS.

ACTION: Final rule; correction.

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SUMMARY: This document corrects technical and typographical errors in 
the final rule that appeared in the August 14, 2017, issue of the 
Federal Register, which will amend the Medicare hospital inpatient 
prospective payment systems (IPPS) for operating and capital related 
costs of acute care hospitals to implement changes arising from our 
continuing experience with these systems for FY 2018.

DATES: This correction is effective October 1, 2017.

FOR FURTHER INFORMATION CONTACT: Donald Thompson, (410) 786-4487.

SUPPLEMENTARY INFORMATION: 

I. Background

    In FR Doc. 2017-16434 of August 14, 2017 (82 FR 37990) there were a 
number of technical and typographical errors that are identified and 
corrected by the Correction of Errors section of this correcting 
document. The provisions in this correcting document are effective as 
if they had been included in the document that appeared in the August 
14, 2017 Federal Register. Accordingly, the corrections are effective 
October 1, 2017.

II. Summary of Errors

A. Summary of Errors in the Preamble

    On page 37990, we are making a conforming correction, removal of 
the reference to part 488, based on the removal of the regulations text 
for Sec.  488.5 described in section II.B. of this correcting document.
    On pages 38067 and 38068, we are correcting technical errors in our 
discussion and summary of and response to public comment regarding ICD-
10-PCS procedure codes describing procedures involving percutaneous 
insertion of intraluminal or monitoring device. Specifically, we 
erroneously referred to a count of 28 procedure codes describing 
procedures involving the percutaneous insertion of intraluminal and 
monitoring devices into central nervous system and other cardiovascular 
body parts rather than 18 procedure codes. Of the 28 codes listed in 
Table 6P.4b associated with the proposed rule, 10 procedure codes were 
duplicative, and erroneously included in the table and in the total 
number of codes referenced in the preamble. As indicated in the final 
rule, after consideration of the public comments we received, we 
maintained the designation of 15 procedure codes identified by the 
commenters. For this reason, we are also correcting Table 6P.4b 
associated with the final rule (as discussed in section II.E. of this 
correcting document) to reflect the 3 distinct procedure codes for 
which we finalized a change in designation, including to remove the 
listings of ICD-10-PCS procedure codes 00H032Z (Insertion of Monitoring 
Device into Brain, Percutaneous Approach) and 00H632Z (Insertion of 
Monitoring Device into Cerebral Ventricle, Percutaneous Approach), 
which we finalized to maintain as O.R. procedures for FY 2018, and are 
making conforming changes to the corresponding count of codes listed in 
that table as indicated on page 38068. Consistent with these 
corrections, we are also correcting the description of the proposal on 
page 38067 of the final rule. As a result of the corrections to Table 
6P.4b associated with the final rule and the conforming corrections on 
pages 38067 and 38068, we have made conforming changes to the ICD-10 
MS-DRG Definitions Manual Version 35 and ICD-10 MS-DRG Grouper Software 
Version 35 for FY 2018 to reflect the O.R. designation of ICD-10-PCS 
procedure codes 00H032Z (Insertion of Monitoring Device into Brain, 
Percutaneous Approach) and 00H632Z (Insertion of Monitoring Device into 
Cerebral Ventricle, Percutaneous Approach), as finalized on page 38068 
of the final rule for FY 2018.
    In addition, after publication of the FY 2018 IPPS/LTCH PPS final 
rule, we became aware that the logic for the ICD-10 MS-DRG Definitions 
Manual Version 35 and the ICD-10 MS-DRG Grouper and Medicare Code 
Editor (MCE) Version 35 Software erroneously designated the following 
ICD-10-PCS procedure code as a non-O.R. procedure rather than as an 
O.R. procedure as finalized on page 38072 of the final rule for FY 
2018: 0BCC8ZZ (Extirpation of matter from right upper lung lobe, via 
natural or artificial opening endoscopic). Therefore, we also made 
changes to the ICD-10 MS-DRG Definitions Manual Version 35 and the ICD-
10 MS-DRG Grouper and MCE Version 35 Software to correctly reflect the 
O.R. designation for this procedure code for FY 2018.
    We recalculated the FY 2018 MS-DRG relative weights (and associated 
statistics, such as average length of stay (ALOS)) as a result of the 
corrections to the logic for the ICD-10 MS-DRG Grouper Version 35 
Software discussed above. In addition, since the MS-LTC-DRGs used under 
the LTCH PPS for FY 2018 are the same as the MS DRGs used under the 
IPPS for FY 2018 (and as such use the same ICD-10 MS-DRG Grouper 
Version 35 Software), we also recalculated the FY 2018 MS-LTC-DRG 
relative weights (and associated statistics, such as geometric ALOS) 
for the same reasons.
    On page 38119, we made a technical error in describing which ICD-
10-PCS procedure codes will be used to identify cases involving 
ZINPLAVA<SUP>TM</SUP> that are eligible for new technology add-on 
payments in FY 2018. Specifically, cases involving 
ZINPLAVA<SUP>TM</SUP> that are eligible for new technology add-on 
payments will be identified by either of the ICD-10-PCS procedure codes 
listed in the final rule (XW033A3 or XW043A3) (rather than requiring 
the combination of both ICD-10-PCS procedure codes).
    On pages 38132 and 38137, in our discussion of the wage indexes, we 
provided incorrect values for the FY 2018 national average hourly wage 
(unadjusted for occupational mix) and the FY 2018 occupational mix 
adjusted national average hourly wage due to inadvertent errors related 
to the wage data collected from the Medicare cost reports of six 
hospitals (CMS Certification Numbers (CCNs) 240010, 420033, 420037, 
420038, 420078, and 420102).
    On page 38144, we made an inadvertent error in the mailing address

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for the Medicare Geographic Review Board (MGCRB).
    On page 38195, in our discussion regarding disproportionate share 
hospitals (DSHs), we made errors in the June 2017 Office of the 
Actuary's estimate for FY 2018 Medicare DSH payments.
    On page 38225, we made typographical errors in our description of 
several Hospital Readmissions Reduction Program (HRRP) measures.
    On page 38249, in our response to a comment, we advertently 
referenced the MORT-30-PN measure, instead of the PN Payment measure.
    On page 38257 through 38259, in our discussion of the Hospital 
Value-Based Purchasing (HVBP) Program, we made several typographical 
and technical errors to references and dates.
    On pages 38309 and 38310, we are correcting the MS-LTC-DRG 
normalization factor and the MS-LTC DRG budget neutrality factor based 
on the recalculation of the MS-LTC-DRG relative weights due to the 
corrections to the MS-DRG Grouper Software Version 35 described 
previously. (Because the MS-LTC-DRGs used under the LTCH PPS are the 
same as the MS-DRGs used under the IPPS, the corrections to the MS-DRG 
Grouper Software Version 35 described previously affect the MS-LTC-DRGs 
groupings by extension.)
    On pages 38426, 38434, 38440, and 38458, in our discussion of the 
LTCH Quality Reporting Program (QRP), we made technical and 
typographical errors including an error in our description of a quality 
measure.

B. Summary of Errors in the Regulations Text

    On page 38516, we inadvertently retained regulations language from 
the proposed rule at Sec.  488.5(a)(21), regarding accrediting 
organizations, after stating in the preamble of the final rule that we 
had decided not to adopt such language. In addition, on page 38509, we 
inadvertently retained a description of subjects set out in 42 CFR part 
488 in the ``List of Subjects.'' We are correcting these errors by 
removing the description of subjects, amendatory instructions, and 
regulations text for part 488.
    On page 38516, in the regulations text provisions for Sec.  495.4 
(definitions for the Electronic Health Record (EHR) Incentive Program), 
we inadvertently omitted the definition of certified electronic health 
record technology (CEHRT) for 2018.
    On page 38517, in the regulations text provisions for Sec.  495.24, 
we inadvertently omitted an EHR measure change for eligible 
professionals (EPs) in Sec.  495.24(d)(6)(i)(B)(1)(iv).

C. Summary of Errors in the Addendum

    As discussed in section II.A. of this correcting document, we are 
making corrections to the logic for the ICD-10 MS-DRG Grouper Version 
35 Software for three ICD-10-PCS procedure codes (0BCC8ZZ, 00H032Z and 
00H632Z) that had been erroneously designated as non-O.R. procedures 
rather than as O.R. procedures as finalized for FY 2018. As a result, 
we have recalculated the FY 2018 MS-DRG relative weights after applying 
the changes in the Version 35 MS-DRG groupings to the FY 2016 MedPAR 
data used for the final rule.
    The FY 2018 MS-DRG relative weights are used to calculate the MS-
DRG reclassification and recalibration budget neutrality factor when 
comparing total payments using FY 2017 MS-DRG relative weights to total 
payments using the FY 2018 MS-DRG relative weights. Additionally, the 
FY 2018 MS-DRG relative weights are used when determining total 
payments for purposes of all other budget neutrality factors and the 
final outlier threshold, which are discussed in this section II.C. of 
this correcting document.
    As discussed in section II.E. of this correcting document, we made 
several technical errors with regard to the calculation of Factor 3 of 
the uncompensated care payment methodology. Factor 3 is used to 
determine the total amount of the uncompensated care payment a hospital 
is eligible to receive for a fiscal year. This amount is then used to 
calculate the amount of the interim uncompensated care payments a 
hospital receives per discharge. Per discharge uncompensated care 
payments are included when determining total payments for purposes of 
all of the budget neutrality factors and the final outlier threshold.
    As a result, the revisions made to address these technical errors 
regarding the calculation of Factor 3 directly affected the calculation 
of total payments and required the recalculation of all the budget 
neutrality factors and the final outlier threshold.
    Because of the errors in the wage data for the six hospitals (CCNs 
240010, 420033, 420037, 420038, 420078, and 420102), as discussed in 
section II.A. of this correcting document, we recalculated the FY 2018 
national average hourly wages unadjusted for occupational mix and 
adjusted for occupational mix which resulted in the recalculation of 
the final FY 2018 IPPS wage indexes and the geographic adjustment 
factors (GAFs) (which are computed from the wage index). The final FY 
2018 IPPS wage data are used in the calculation of the wage index 
budget neutrality adjustment when comparing total payments using the 
final FY 2017 IPPS wage index data to total payments using the final FY 
2018 IPPS wage index data. Additionally, the final FY 2018 IPPS wage 
index data are used when determining total payments for purposes of the 
rest of the budget neutrality factors (except for the MS-DRG 
reclassification and recalibration budget neutrality factor) and the 
final outlier threshold. In addition, the final FY 2018 IPPS wage index 
data are used to calculate the FY 2018 LTCH PPS wage index values, 
certain budget neutrality factors, and the LTCH PPS standard Federal 
payment rate in the FY 2018 IPPS/LTCH PPS final rule.
    Due to the correction of the combination of errors listed 
previously (recalculation of the MS-DRG relative weights, revisions to 
Factor 3 of the uncompensated care methodology and correction to the 
final FY 2018 IPPS wage index data), we recalculated all IPPS budget 
neutrality adjustment factors, the fixed-loss cost threshold, the final 
wage indexes (and GAFs), and the national operating standardized 
amounts and capital Federal rate. Therefore, we made conforming changes 
to the following:
    <bullet> On page 38522 and 38532, the MS-DRG reclassification and 
recalibration budget neutrality factor.
    <bullet> On page 38522, the wage index budget neutrality 
adjustment.
    <bullet> On page 38522, the reclassification hospital budget 
neutrality adjustment.
    <bullet> On page 38523, the rural and imputed floor budget 
neutrality adjustment.
    <bullet> On page 38527, the calculation of the outlier fixed-loss 
cost threshold, the national outlier adjustment factors, total 
operating Federal payments, total operating outlier payments, and 
percentage of capital outlier payments.
    <bullet> On page 38529, the table titled ``Changes From FY 2017 
Standardized Amounts to the FY 2018 Standardized Amounts''.
    On pages 38532 and 38534 through 38535, in our discussion of the 
determination of the Federal hospital inpatient capital related 
prospective payment rate update, due to the recalculation of the MS-DRG 
relative weights and GAFs we have made conforming corrections to the 
increase in the capital Federal rate, the capital outlier payment 
adjustment (budget neutrality) factor, the GAF/DRG budget neutrality 
adjustment factors, the capital Federal rate, and the outlier threshold 
(as discussed previously), along with

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certain statistical figures (for example, percent change) in the 
accompanying discussions.
    Also, as a result of these errors, on page 38535, we have made 
conforming corrections in the tables showing the comparison of factors 
and adjustments for the FY 2017 capital Federal rate and FY 2018 
capital Federal rate and the proposed FY 2018 capital Federal rate and 
final FY 2018 capital Federal rate.
    On pages 38537 and 38539, we are correcting the area wage level 
budget neutrality factor and making a conforming change to the FY 2018 
LTCH PPS standard Federal payment rate due to corrections to the wage 
data discussed previously.
    On page 38544, we are making conforming corrections to the fixed-
loss amount for FY 2018 LTCH PPS standard Federal payment rate 
discharges and the high-cost outlier (HCO) threshold determined in 
absence of the required changes under the 21st Century Cures Act due to 
corrections in the MS-LTC-DRG data discussed previously.
    On page 38545, we are making conforming corrections to the fixed-
loss amount for site neutral discharges due to corrections in the IPPS 
rates and factors discussed previously.
    On pages 38546 and 38547, we are making conforming corrections to 
the figures used in the example of computing the adjusted LTCH PPS 
Federal prospective payment for FY 2018.
    On page 38548, we have made conforming corrections to the 
following:
    <bullet> National adjusted operating standardized amounts and 
capital standard Federal payment rate (which also include the rates 
payable to hospitals located in Puerto Rico) in Tables 1A, 1B, 1C, and 
1D as a result of the conforming corrections to certain budget 
neutrality factors and the outlier threshold (as described previously).
    <bullet> LTCH PPS standard Federal payment rate in Table 1E as a 
result of the correction to area wage level budget neutrality factor 
(as discussed previously).
    Also, on page 38548, in Table 1E, we are correcting a technical 
error in our terminology by replacing ``Standard Federal Rate'' with 
`Standard Federal Payment Rate''.

D. Summary of Errors in the Appendices

    On pages 38552 through 38560 and 38572 through 38574 in our 
regulatory impact analyses, we made conforming corrections to the 
factors, values, and tables and accompanying discussion of the changes 
in operating and capital IPPS payments for FY 2018 and the effects of 
certain budget neutrality factors as a result of the technical errors 
that lead to conforming changes in our calculation of the operating and 
capital IPPS budget neutrality factors, outlier threshold, final wage 
indexes, operating standardized amounts, and capital Federal rate (as 
described in sections II.A. and II.C. of this correcting document).
    In particular, we made changes to the following tables.
    <bullet> On pages 38552 through 38554, the table titled ``Table 
I.--Impact Analysis of Changes to the IPPS for Operating Costs for FY 
2018''.
    <bullet> On pages 38557 through 38558, the table titled ``FY 2018 
IPPS Estimated Payments Due To Rural and Imputed Floor With National 
Budget Neutrality''.
    <bullet> On pages 38559 and 38560, the table titled ``Table II--
Impact Analysis of Changes for FY 2018 Acute Care Hospital Operating 
Prospective Payment System [Payments per Discharge]''.
    <bullet> On pages 38572 through 38574, the table titled ``Table 
III--Comparison of Total Payments Per Case [FY 2017 Payments Compared 
to FY 2018 Payments]''.
    On pages 38561 through 38564, we are correcting the discussion of 
the ``Effects of the Changes to Medicare DSH and Uncompensated Care 
Payments for FY 2018'' for purposes of the Regulatory Impact Analysis 
in Appendix A of the FY 2018 IPPS/LTCH PPS final rule in light of the 
corrections discussed in sections II.D. and II.E. of this correcting 
document.
    On pages 38576 and 38578 through 38579, we made conforming 
corrections to the area wage level budget neutrality factor and the 
LTCH PPS standard Federal payment rate as described in section II.C. of 
this correcting document.
    On page 38579, we are making conforming corrections to ``Table 
IV.--Impact of Payment Rate and Policy Changes to LTCH PPS Payments for 
Standard Payment Rate Cases for FY 2018.'' We are also correcting 
technical errors in the terminology used in the title and column 
headings of Table IV by ensuring the use of ``Standard Federal Payment 
Rate''.
    On page 38585, we made conforming corrections to the estimated 
increase in capital payments in FY 2018 compared to FY 2017.

E. Summary of Errors in and Corrections to Files and Tables Posted on 
the CMS Web Site

    We are correcting the errors in the following IPPS tables that are 
listed on pages 38547 and 38548 of the FY 2018 IPPS/LTCH PPS final rule 
and are available on the Internet on the CMS Web site at https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/FY2018-IPPS-Final-Rule-Home-Page.html. The tables 
that are available on the Internet have been updated to reflect the 
revisions discussed in this correcting document.
    Table 2--Case-Mix Index and Wage Index Table- FY 2018. The wage 
data errors related to the six hospitals required the recalculation of 
the FY 2018 national average hourly wages unadjusted for occupational 
mix and adjusted for occupational mix which resulted in recalculating 
the FY 2018 wage indexes. Also, the recalculation of the MS-DRG 
relative weights, the revisions to Factor 3 of the uncompensated care 
payment methodology and recalculation of the FY 2018 wage index 
necessitated the recalculation of the rural and imputed floor budget 
neutrality factor (as discussed in section II.C. of this correcting 
document). Therefore, we are correcting the values in the column titled 
``FY 2018 Wage Index'' for all hospitals. Additionally, for the six 
hospitals for which we inadvertently used the incorrect wage data (as 
discussed in section II.A. of this correcting document), we are 
correcting the average hourly wages in the columns titled ``Average 
Hourly Wage FY 2018'' and ``3-Year Average Hourly Wage (2016, 2017, 
2018)''.
    Table 3.--Wage Index Table by CBSA-FY 2018. The wage data errors 
related to the six hospitals required the recalculation of the FY 2018 
national average hourly wage adjusted for occupational mix which 
resulted in recalculating the FY 2018 wage indexes. Also, the 
recalculation of the MS-DRG relative weights, the revisions to Factor 3 
of the uncompensated care payment methodology, and recalculation of the 
FY 2018 wage index necessitated the recalculation of the rural and 
imputed floor budget neutrality factor (as discussed in section II.C. 
of this correcting document). Therefore, we are making corresponding 
changes to the wage indexes and GAFs of all CBSAs listed in Table 3. 
Specifically, we are correcting the values and flags in the columns 
titled ``Wage Index'', ``Reclassified Wage Index'', ``GAF'', 
``Reclassified GAF'', ``Pre-Frontier and/or Pre-Rural or Imputed Floor 
Wage Index'' and ``Eligible for Rural or Imputed Floor Wage Index''. 
Additionally, for the two CBSAs (24860 and 40340) where the six 
hospitals for which we inadvertently used the incorrect wage data are 
located (as discussed in section II.A. of this correcting document), we 
are correcting the average hourly wages in the

[[Page 46141]]

columns titled ``FY 2018 Average Hourly Wage'' and ``3-Year Average 
Hourly Wage (2016, 2017, 2018)''. As we described previously, we 
inadvertently used the incorrect wage data for the following hospitals: 
CCNs 240010, 420033, 420037, 420038, 420078 and 420102.
    Table 5.--List of Medicare Severity Diagnosis-Related Groups (MS-
DRGs), Relative Weighting Factors, and Geometric and Arithmetic Mean 
Length of Stay--FY 2018. We are correcting this table to reflect the 
recalculation of the FY 2018 MS-DRG relative weights and associated 
statistics as a result of the corrections to the logic for the ICD-10 
MS-DRG Grouper Version 35 Software discussed in section II.A. of this 
correcting document. Specifically, we are correcting the values in the 
columns titled ``Weights'', ``Geometric mean LOS'', and ``Arithmetic 
mean LOS''.
    Table 6P.--ICD-10-CM and ICD-10-PCS Code Designations, MCE and MS-
DRG Changes--FY 2018. As discussed in section II.A of this correcting 
document, we are correcting the list of the ICD-10-PCS procedure codes 
in Table 6P.4b to reflect the three ICD-10-PCS procedure codes relating 
to the percutaneous insertion of intraluminal or monitoring devices 
that are finalized as non-O.R. procedures for FY 2018.
    Table 7B.--Medicare Prospective Payment System Selected Percentile 
Lengths of Stay: FY 2016 MedPAR Update--March 2017 GROUPER V35.0 MS-
DRGs. We are correcting this table to reflect the recalculation of the 
FY 2018 MS-DRG relative weights and associated statistics as a result 
of the corrections to the logic for the ICD-10 MS-DRG Grouper Version 
35 Software discussed in section II.A. of this correcting document.
    Table 10--New Technology Add-On Payment Thresholds for Applications 
for FY 2019. We are correcting the thresholds in this table as a result 
of the corrections to the operating standardized amounts discussed in 
section II.C. of this correcting document.
    Table 18.--Final FY 2018 Medicare DSH Uncompensated Care Payment 
Factor 3. We are correcting this table to reflect revisions to the 
Factor 3 calculations for purposes of determining uncompensated care 
payments for the FY 2018 IPPS/LTCH PPS final rule for the following 
reasons:
    <bullet> To apply our finalized policy of double weighting the 2013 
Factor 3 instead of developing a 2014 Factor 3 using uncompensated care 
cost data from Worksheet S-10 for several all-inclusive rate providers.
    <bullet> To reflect mergers where data for the merged hospital were 
not combined with the data for the surviving hospital for purposes of 
calculating Factor 3 for the FY 2018 IPPS/LTCH PPS Final Rule.
    <bullet> To correct the Factor 3 that was computed for a hospital 
whose FY 2014 cost report in the March 2017 extract of Healthcare Cost 
Report Information System (HCRIS) inadvertently omitted amended 
uncompensated care cost data reported on an amended Worksheet S-10 that 
had been received timely per CR 9648 issued on July, 15, 2016, and that 
was inadvertently omitted from the hospital's 2014 cost report when it 
was uploaded into HCRIS.
    <bullet> To correct the Factor 3 that was computed for a hospital 
that only had Factor 3 values for two cost reporting periods, but whose 
Factor 3 was inadvertently calculated by dividing by three cost 
reporting periods when averaging the Factor 3 values.
    <bullet> To correct the misapplication of our new hospital policy, 
where hospitals with a CMS Certification Number (CCN) established after 
October 1, 2013, but before October 1, 2014, were inadvertently 
considered subject to that policy when calculating Factor 3. As stated 
in the FY 2018 IPPS/LTCH PPS final rule (82 FR 38212), only those 
hospitals with a CCN established after October 1, 2014, are considered 
new and subject to the new hospital policy when calculating Factor 3 
for FY 2018.
    We are revising Factor 3 for all hospitals to correct these errors. 
We are also revising the amount of the total uncompensated care payment 
calculated for each DSH-eligible hospital. The total uncompensated care 
payment that a hospital receives is used to calculate the amount of the 
interim uncompensated care payments the hospital receives per 
discharge. Per discharge uncompensated care payments are included when 
determining total payments for purposes of all of the budget neutrality 
factors and the final outlier threshold. As a result, these corrections 
to the uncompensated care payments impacted the calculation of all the 
budget neutrality factors as well as the outlier fixed-loss cost 
threshold for outlier payments. These corrections will be reflected in 
Table 18 and the Medicare DSH Supplemental Data File. In section II.D. 
of this correcting document, we have made corresponding revisions to 
the discussion of the ``Effects of the Changes to Medicare DSH and 
Uncompensated Care Payments for FY 2018'' for purposes of the 
Regulatory Impact Analysis in Appendix A of the FY 2018 IPPS/LTCH PPS 
final rule to reflect the corrections discussed previously.
    We are also correcting the errors in the following LTCH PPS tables 
that are listed on page 38548 of the FY 2018 IPPS/LTCH PPS final rule 
and are available on the Internet on the CMS Web site at https://www.cms.gov/Medicare/Medicare-Fee-for-ServicePayment/LongTermCareHospitalPPS/index.html under the list item for regulation 
number CMS-1677-F. The tables that are available on the Internet have 
been updated to reflect the revisions discussed in this correcting 
document.
    Table 11.--MS-LTC-DRGs, Relative Weights, Geometric Average Length 
of Stay, and Short-Stay Outlier (SSO) Threshold for LTCH PPS Discharges 
Occurring from October 1, 2017 through September 30, 2018. We are 
correcting this table to reflect the recalculation of the FY 2018 MS-
LTC-DRG relative weights and associated statistics as a result of the 
corrections to the logic for the Version 35 Grouper Software discussed 
in section II.A. of this correcting document.
    Table 12A.--LTCH PPS Wage Index for Urban Areas for Discharges 
Occurring from October 1, 2017 through September 30, 2018. We are 
correcting this table to reflect the revisions to the LTCH PPS wage 
index values discussed in section II.C. of this correcting document.
    Table 12B.--LTCH PPS Wage Index for Rural Areas for Discharges 
Occurring from October 1, 2017 through September 30, 2018. We are 
correcting this table to reflect the revisions to the LTCH PPS wage 
index values discussed in section II.C. of this correcting document.
    We also note that we have made conforming changes to the ICD-10 MS-
DRG Definitions Manual Version 35 for consistency with the ICD-10 MS-
DRG Grouper and Medicare Code Editor (MCE) Version 35 Software. First, 
the ICD-10-CM diagnosis code P05.18 (Newborn small for gestational age, 
2000-2499 grams) was displayed in the ICD-10 MS-DRG Definitions Manual 
Version 35 as grouping to both MS-DRGs 793 (Full Term Neonate with 
Major Problems) and 795 (Normal Newborn). The correct MS-DRG assignment 
for diagnosis code P05.18 is only MS-DRG 795; therefore, corrections 
were made to the ICD-10 MS-DRG Definitions Manual Version 35 to reflect 
the correct MS-DRG assignment. Second, the following 9 diagnosis codes 
were not included in the major problem list in the MS-DRG Definitions 
Manual: K56.600 (Partial intestinal obstruction, unspecified as to 
cause); K56.601 (Complete intestinal obstruction, unspecified as to 
cause);

[[Page 46142]]

K56.609 (Unspecified intestinal obstruction, unspecified as to partial 
versus complete obstruction); K56.690 (Other partial intestinal 
obstruction); K56.691(Other complete intestinal obstruction); K56.699 
(Other intestinal obstruction unspecified as to partial versus complete 
obstruction); K91.30 (Postprocedural intestinal obstruction, 
unspecified as to partial versus complete); K91.31 (Postprocedural 
partial intestinal obstruction); and K91.32 (Postprocedural complete 
intestinal obstruction). We made corrections to add these 9 diagnosis 
codes to the major problems list for MS-DRG 793 under Major Diagnostic 
Category (MDC) 15 (Newborns & Other Neonates with Conditions 
Originating in Perinatal Period) in the ICD-10 MS-DRG Definitions 
Manual Version 35.

III. Waiver of Proposed Rulemaking and Delay in Effective Date

    We ordinarily publish a notice of proposed rulemaking in the 
Federal Register to provide a period for public comment before the 
provisions of a rule take effect in accordance with section 553(b) of 
the Administrative Procedure Act (APA) (5 U.S.C. 553(b)). However, we 
can waive this notice and comment procedure if the Secretary finds, for 
good cause, that the notice and comment process is impracticable, 
unnecessary, or contrary to the public interest, and incorporates a 
statement of the finding and the reasons therefore in the notice.
    Section 553(d) of the APA ordinarily requires a 30-day delay in the 
effective date of final rules after the date of their publication in 
the Federal Register. This 30-day delay in effective date can be 
waived, however, if an agency finds for good cause that the delay is 
impracticable, unnecessary, or contrary to the public interest, and the 
agency incorporates a statement of the findings and its reasons in the 
rule issued.
    We believe that this correcting document does not constitute a rule 
that would be subject to the APA notice and comment or delayed 
effective date requirements. This correcting document corrects 
technical and typographic errors in the preamble, regulations text, 
addendum, payment rates, tables, and appendices included or referenced 
in the FY 2018 IPPS/LTCH PPS final rule but does not make substantive 
changes to the policies or payment methodologies that were adopted in 
the final rule. As a result, this correcting document is intended to 
ensure that the information in the FY 2018 IPPS/LTCH PPS final rule 
accurately reflects the policies adopted in that final rule.
    In addition, even if this were a rule to which the notice and 
comment procedures and delayed effective date requirements applied, we 
find that there is good cause to waive such requirements. Undertaking 
further notice and comment procedures to incorporate the corrections in 
this document into the final rule or delaying the effective date would 
be contrary to the public interest because it is in the public's 
interest for providers to receive appropriate payments in as timely a 
manner as possible, and to ensure that the FY 2018 IPPS/LTCH PPS final 
rule accurately reflects our policies. Furthermore, such procedures 
would be unnecessary, as we are not altering our payment methodologies 
or policies, but rather, we are simply implementing correctly the 
policies that we previously proposed, received comment on, and 
subsequently finalized. This correcting document is intended solely to 
ensure that the FY 2018 IPPS/LTCH PPS final rule accurately reflects 
these payment methodologies and policies. Therefore, we believe we have 
good cause to waive the notice and comment and effective date 
requirements.

Correction of Errors

    In FR Doc. 2017-16434 of August 14, 2017 (82 FR 37990), we are 
making the following corrections:

A. Corrections of Errors in the Preamble

    1. On page 37990, first column, line 8 (Part headings), the figures 
``486, 488, 489, and 495'' are corrected to read ``486, 489, and 495''.
    2. On page 38067--
    a. Second column, last partial paragraph, line 1, the figure ``28'' 
is corrected to read ``18''.
    b. Third column--
    (1) First partial paragraph--
    (a) Line 7, the phrase ``28 ICD-10-PCS'' is corrected to read ``28 
(18 discrete) ICD-10-PCS''.
    (b) Line 15, the phrase ``O.R. procedures. We invite public'' is 
corrected to read ``O.R. procedures. (We note that Table 6P.4b. 
associated with the proposed rule listed 28 rather than 18 ICD-10-PCS 
codes because we inadvertently included 10 duplicate codes. However 
only 18 discrete ICD-10-PCS codes were listed in that table.) We invite 
public''.
    (2) First full paragraph--
    (a) Line 3, the figure ``28'' is corrected to read ``18''.
    (b) Line 9, the figure ``28'' is corrected to read ``18''.
    3. On page 38068, top half of the page (between the untitled 
tables) first column--
    a. First paragraph, line 5, the figure ``28'' is corrected to read 
``18''.
    b. Second paragraph, line 4, the figure ``13'' is corrected to read 
``3''.
    4. On page 38119, third column, first partial paragraph, lines 25 
and 26, the phrase ``XW033A3 and XW043A3.'' is corrected to read 
``XW033A3 or XW043A3.''
    5. On page 38132--
    a. Second column, first paragraph, last line, the figure 
``$42.1027'' is corrected to read ``$42.0795''.
    b. Third column, first partial paragraph, line 4, the figure 
$42.1027'' is corrected to read ``$42.0795''.
    6. On page 38137, third column--
    a. First full paragraph, last line, the figure $42.0564'' is 
corrected to read ``$42.0332''.
    b. Last full paragraph, last line, the figure $42.0564'' is 
corrected to read ``$42.0332''.
    7. On page 38144, first column, first partial paragraph, lines 8 
through 10, the phrase ``2520 Lord Baltimore Drive, Suite L, Baltimore, 
MD 21244- 2670.'' is corrected to read ``1508 Woodlawn Drive, Suite 
100, Baltimore, MD 21207.''.
    8. On page 38195--
    a. Top of the page, third column, first full paragraph, line 19, 
the figure ``$15.533'' is corrected to read ``$15.553''.
    b. Bottom of the page in the table titled ``FACTORS APPLIED FOR FY 
2015 THROUGH FY 2018 TO ESTIMATE MEDICARE DSH EXPENDITURES USING 2014 
BASELINE'' last row (FY 2018), last column (Estimated DSH payment), the 
entry ``15.533'' is corrected to read ``15.553''.
    9. On page 38225--
    a. First column, last bulleted paragraph, lines 3 through 5, the 
phrase ``(AMI-Version 8.0, HF-Version 8.0, Pneumonia-Version 8.0, COPD-
Version 4.0, and Stroke-Version 4.0: 2016'' is corrected to read 
``(AMI-Version 9.0, HF-Version 9.0, Pneumonia-Version 9.0, COPD-Version 
5.0, and Stroke-Version 5.0: 2016''.
    b. Second column; first bulleted paragraph, lines 2 through 4, the 
phrase ``(THA and/or TKA-Version 4.0, CABG-Version 2.0: 2016'' is 
corrected to read ``(THA and/or TKA-Version 5.0, CABG-Version 3.0: 
2016)''.
    10. On page 38249, second column, last paragraph, lines 23 and 24, 
the parenthetical phrase ``(for example, the MORT-30-PN measure)'' is 
corrected to read ``(for example, PN Payment measure)''.
    11. On page 38257, third column, footnote paragraph (footnote 69), 
last line, the date ``Mar 1997'' is corrected to read ``Mar 1977''.
    12. On page 38258, first column, third paragraph--

[[Page 46143]]

    a. Lines 8 and 9, the reference ``(78 FR 50074;'' is corrected to 
read ``(79 FR 50074;''.
    b. Line 9, the reference ``80 FR 49588).'' is corrected to read 
``80 FR 49558).''.
    13. On page 38259, first column, first partial paragraph, line 14, 
the date ``June 0'' is corrected to read ``June 30''.
    14. On page 38309, third column, first full paragraph, line 29 the 
figure ``1.28590'' is corrected to read ``1.28593''.
    15. On page 38310, first column--
    a. First full paragraph, line 29, the figure ``0.9907845'' is 
corrected to read ``0.9907437''.
    b. Second full paragraph--
    (1) Line 5, the figure ``1.28590'' is corrected to read 
``1.28593''.
    (2) Line 6, the figure ``0.9907845'' is corrected to read 
``0.9907437''.
    16. On page 38426--
    a. First column, second full paragraph, line 21, the phrase ``an 
Application of Percent'' is corrected to read ``Application of 
Percent''.
    b. Third column, third full paragraph, line 10, the phrase 
``criteria; however should'' is corrected to read ``criteria. However, 
the measure should''.
    17. On page 38434, in the first column, second paragraph--
    a. Line 29, the phrase ``Stage 3 or 4 ulcers.'' is corrected to 
read ``Stage 3 or 4 pressure ulcers.''.
    b. Line 31, the phrase ``Stage 1 and 2 ulcers decreased'' is 
corrected to read ``Stage 1 and 2 pressure ulcers decreased''.
    c. Line 32, the phrase '' of Stage 3 and 4 ulcers'' is corrected to 
read ``of Stage 3 and 4 pressure ulcers''.
    18. On page 38440, third column, last paragraph--
    a. Lines 10 and 11, the phrase ``That nearly one third'' is 
corrected to read ``The fact that nearly one third''.
    b. Lines 16 and 17, the phrase ``LTCH, and also indicates'' is 
corrected to read ``LTCH. It also indicates''.
    19. On page 38458, third column, second full paragraph--
    a. Lines 21 through 23, the phrase (measure name) ``Functional 
Outcome Measure: Change in Mobility Among Patients Requiring Ventilator 
Support (NQF #2632).'' is corrected to read ``Functional Outcome 
Measure: Change in Mobility Among Long-Term Care Hospital (LTCH) 
Patients Requiring Ventilator Support (NQF #2632).''.
    b. Lines 31 through 34, the phrase (measure name) ``Functional 
Outcome Measure: Change in Mobility Among Patients Requiring Ventilator 
Support (NQF #2632)'' is corrected to read ``Functional Outcome 
Measure: Change in Mobility Among Long-Term Care Hospital (LTCH) 
Patients Requiring Ventilator Support (NQF #2632).''
    20. On page 38509, second column, eighth full paragraph (List of 
subjects 42 CFR 488), the paragraph is corrected by removing the 
paragraph.

B. Correction of Errors in the Regulations Text

    1. On page 38516, in the first column, remove the part heading for 
part 488 and remove amendatory instructions 34 and 35 in their 
entirety.


Sec.  495.4  [Corrected]

    2. On page 38516, in the second column, after amendatory 
instruction 39a, add amendatory instruction a2 to read--
    ``a2. In the definition of ``Certified electronic health record 
technology (CEHRT)'':
    i. In paragraph (1)(iii), removing the phrase ``for 2018 subsequent 
years'' and adding in its place the phrase ``for 2019 and subsequent 
years''; and
    ii. In the introductory text of paragraph (2), removing the phrase 
``For 2018 and subsequent years,'' and adding in its place the phrase 
``For 2019 and subsequent years,''.''


Sec.  495.24  [Corrected]

    3. On page 38517, second column, sixth full paragraph, amendatory 
instruction 41d is corrected and amendatory instructions 41e and f are 
correctly added to read as follows:
    ``d. Revising the paragraph (d) heading.
    e. In paragraph (d)(6)(i)(B)(1)(iv) by removing the phrase ``For an 
EHR reporting period in 2017 only, an EP'' and adding in its place the 
phrase ``For an EHR reporting period in 2017 and 2018, an EP''.
    f. Revising paragraphs (d)(6)(i)(B)(2)(i) and (ii), 
(d)(6)(ii)(B)(1)(iv), and (d)(6)(ii)(B)(2)(i) and (ii).''

C. Correction of Errors in the Addendum

    1. On page 38522 --
    a. Second column, first full paragraph--
    (1) Line 3, the figure ``0.997432'' is corrected to read 
``0.997439''.
    (2) Line 8, the figure ``0.997432'' is corrected to read 
``0.997439''.
    b. Third column--
    (1) First full paragraph, line 9, the figure ``1.001148'' is 
corrected to read ``1.000882''.
    (2) Last paragraph, line 11 the figure ``0.988008'' is corrected to 
read ``0.987985''.
    2. On page 38523, second column, first partial paragraph, line 2, 
the figure ``0.993348'' is corrected to read ``0.993324''.
    3. On page 38527, lower two-thirds of the page (after the first 
untitled table), third column--
    a. First partial paragraph--
    (1) Line 4, the figure ``$26,601'' is corrected to read 
``$26,537''.
    (2) Line 5, the figure ``85,942,484,975'' is corrected to read 
``$90,203,348,168''.
    (3) Line 6, the figure ``$4,618,707,285'' is corrected to read 
``$4,600,554,656''.
    (4) Line 17, the figure ``$26,601'' is corrected to read 
``$26,537''.
    b. First full paragraph, line 13, the figure ``5.16'' is corrected 
to read ``5.17''.
    c. Following the third full paragraph, the untitled table is 
corrected to read as follows:

------------------------------------------------------------------------
                                           Operating
                                          standardized   Capital federal
                                            amounts            rate
------------------------------------------------------------------------
National..............................        0.948998         0.948259
------------------------------------------------------------------------

    4. On page 38529, top of the page, the table titled ``CHANGES FROM 
FY 2017 STANDARDIZED AMOUNTS TO THE FY 2018 STANDARDIZED AMOUNTS'', is 
corrected to read as follows:

[[Page 46144]]



                  Changes From FY 2017 Standardized Amounts to the FY 2018 Standardized Amounts
----------------------------------------------------------------------------------------------------------------
                                                      Hospital submitted   Hospital did NOT    Hospital did NOT
                                  Hospital submitted   quality data and     submit quality      submit quality
                                   quality data and        is NOT a          data and is a     data and is NOT a
                                    is a meaningful     meaningful EHR      meaningful EHR      meaningful EHR
                                       EHR user              user                user                user
----------------------------------------------------------------------------------------------------------------
FY 2018 Base Rate after
 removing:
    1. FY 2017 Geographic         If Wage Index is    If Wage Index is    If Wage Index is    If Wage Index is
     Reclassification Budget       Greater Than        Greater Than        Greater Than        Greater Than
     Neutrality (0.988136).        1.0000:             1.0000:             1.0000:             1.0000:
    2. FY 2017 Operating Outlier     Labor (68.3%):      Labor (68.3%):      Labor (68.3%):      Labor (68.3%):
     Offset (0.948998).               $3,993.72.          $3,993.72.          $3,993.72.          $3,993.72.
    3. FY 2017 2-Midnight Rule       Nonlabor            Nonlabor            Nonlabor            Nonlabor
     One-Time Prospective             (30.4%):            (30.4%):            (30.4%):            (30.4%):
     Increase (1.006).                $1,853.60.          $1,853.60.          $1,853.60.          $1,853.60.
    4. FY 2017 Labor Market       If Wage Index is    If Wage Index is    If Wage Index is    If Wage Index is
     Delineation Wage Index        less Than or        less Than or        less Than or        less Than or
     Transition Budget             Equal to 1.0000:    Equal to 1.0000:    Equal to 1.0000:    Equal to 1.0000:
     Neutrality Factor
     (0.999997).
                                  Labor (62%):        Labor (62%):        Labor (62%):        Labor (62%):
                                   $3,625.34.          $3,625.34.          $3,625.34.          $3,625.34.
                                  Nonlabor (38%):     Nonlabor (38%):     Nonlabor (38%):     Nonlabor (38%):
                                   $2,221.98.          $2,221.98.          $2,221.98.          $2,221.98.
FY 2018 Update Factor...........  1.0135............  0.99325...........  1.00675...........  0.9865.
FY 2018 MS-DRG Recalibration      0.997439..........  0.997439..........  0.997439..........  0.997439.
 Budget Neutrality Factor.
FY 2018 Wage Index Budget         1.000882..........  1.000882..........  1.000882..........  1.000882.
 Neutrality Factor.
FY 2018 Reclassification Budget   0.987985..........  0.987985..........  0.987985..........  0.987985.
 Neutrality Factor.
FY 2018 Operating Outlier Factor  0.948998..........  0.948998..........  0.948998..........  0.98998.
Adjustment for FY 2018 Required   1.004588..........  1.004588..........  1.004588..........  1.004588.
 under Section 414 of Pub. L.
 114-10 (MACRA) and Section
 15005 of Pub. L. 114-255.
National Standardized Amount for  Labor: $3,806.04..  Labor: $3,729.99..  Labor: $3,780.69..  Labor: $3,704.65.
 FY 2018 if Wage Index is         Nonlabor:           Nonlabor:           Nonlabor:           Nonlabor:
 Greater Than 1.0000; Labor/Non-   $1,766.49.          $1,731.20.          $1,754.73.          $1,719.43.
 Labor Share Percentage (68.3/
 31.7).
National Standardized Amount for  Labor: $3,454.97..  Labor: $3,385.94..  Labor: $3,431.96..  Labor: $3,362.93.
 FY 2018 if Wage Index is less    Nonlabor:           Nonlabor:           Nonlabor:           Nonlabor:
 Than or Equal to 1.0000; Labor/   $2,117.56.          $2,075.25.          $2,103.46.          $2,061.15.
 Non-Labor Share Percentage (62/
 38).
----------------------------------------------------------------------------------------------------------------

    5. On page 38532, lower two-thirds of the page (after the untitled 
table)--
    a. First column, second full paragraph, line 13, the figure 
``0.997432'' is corrected to read ``0.997439''.
    b. Third column, second full paragraph, line 6, the figure ``1.61'' 
is corrected to read ``1.60''.
    6. On page 38534--
    a. First column--
    (1) First full paragraph--
    (a) Line 8, the figure ``5.16'' is corrected to read ``5.17''.
    (b) Line 12, the figure ``0.9484'' is corrected to read ``0.9483''.
    (2) Second full paragraph--
    (a) Lines 5 and 6, the phrase ``outlier adjustment of 0.9484 is a 
1.04 percent change'' is corrected to read ``outlier adjustment of 
0.9483 is a 1.03 percent change''.
    (b) Line 10, the figures ``1.0104 (0.9484/0.9386)'' are corrected 
to read ``1.0103(0.9483/0.9386)''.
    (c) Line 12, the figure ``1.04'' is corrected to read ``1.03''.
    (3) Fourth full paragraph--
    (a) Line 13, the figure ``0.9994'' is corrected to read ``0.9995''.
    (b) Line 16, the figure ``0.9844'' is corrected to read 
``0.99845''.
    b. Second column--
    (1). First partial paragraph, line 8, the figure ``0.9837'' is 
corrected to read ``0.9838''.
    (2). Third full paragraph--
    (a) Line 1, the figure ``0.9986'' is corrected to read ``0.9987''.
    (b) Line 3, the figure ``0.9994'' is corrected to read ``0.9995''.
    c. Third column--
    (1). First full paragraph--
    (a) Line 4, the figure ``1.61'' is corrected to read ``1.60''.
    (b) Line 15, the figure ``$453.97'' is corrected to read 
``$453.95''.

[[Page 46145]]

    (c) Second bulleted paragraph, last line, the figure ``0.9986'' is 
corrected to read ``0.9987''.
    (d) Third bulleted paragraph, last line, the figure ``0.9484'' is 
corrected to read ``0.9483''.
    (e) Last paragraph--
    (1) Line 15, the figure ``0.14'' is corrected to read ``0.13''.
    (2) Line 18, the figure ``1.04'' is corrected to read ``1.03''.
    7. On page 38535--
    a. Top of page--
    (1) Second column, first partial paragraph, last line, the figure 
``1.61'' is corrected to read ``1.60''.
    (2) The table titled ``COMPARISON OF FACTORS AND ADJUSTMENTS: FY 
2017 CAPITAL FEDERAL RATE AND FY 2018 CAPITAL FEDERAL RATE'' is 
corrected to read as follows:

      Comparison of Factors and Adjustments: FY 2017 Capital Federal Rate and FY 2018 Capital Federal Rate
----------------------------------------------------------------------------------------------------------------
                                                                                                  Percent change
                                                      FY 2017         FY 2018         Change            \3\
----------------------------------------------------------------------------------------------------------------
Update Factor \1\...............................          1.0090          1.0130          1.0130            1.30
GAF/DRG Adjustment Factor \1\...................          0.9990          0.9987          0.9987           -0.13
Outlier Adjustment Factor \2\...................          0.9386          0.9483          1.0103            1.03
Removal of One-Time 2-Midnight Policy Adjustment          1.0060         1/1.006          0.9940           -0.60
 Factor.........................................
Capital Federal Rate............................         $446.79         $453.95          1.0160            1.60
----------------------------------------------------------------------------------------------------------------
\1\ The update factor and the GAF/DRG budget neutrality adjustment factors are built permanently into the
  capital Federal rates. Thus, for example, the incremental change from FY 2017 to FY 2018 resulting from the
  application of the 0.9987 GAF/DRG budget neutrality adjustment factor for FY 2018 is a net change of 0.9987
  (or -0.13 percent).
\2\ The outlier reduction factor is not built permanently into the capital Federal rate; that is, the factor is
  not applied cumulatively in determining the capital Federal rate. Thus, for example, the net change resulting
  from the application of the FY 2018 outlier adjustment factor is 0.9483/0.9386 or 1.0103 (or 1.03 percent).
\3\ Percent change may not sum due to rounding.

    b. Middle of page, the table titled ``COMPARISON OF FACTORS AND 
ADJUSTMENTS: PROPOSED FY 2018 CAPITAL FEDERAL RATE AND FINAL FY 2018 
CAPITAL FEDERAL RATE'' is corrected to read as follows:

 Comparison of Factors and Adjustments: Proposed FY 2018 Capital Federal Rate and Final FY 2018 Capital Federal
                                                      Rate
----------------------------------------------------------------------------------------------------------------
                                                    Proposed FY
                                                       2018        Final FY 2018      Change      Percent change
----------------------------------------------------------------------------------------------------------------
Update Factor \1\...............................          1.0120          1.0130          1.0010            1.10
GAF/DRG Adjustment Factor \1\...................          0.9992          0.9987          0.9985           -0.05
Outlier Adjustment Factor \2\...................          0.9434          0.9483          1.0052            0.52
Removal of One-Time 2-Midnight Policy Adjustment         1/1.006         1/1.006          0.0000            0.00
 Factor.........................................
Capital Federal Rate............................         $451.37         $453.95          1.0057            0.57
----------------------------------------------------------------------------------------------------------------

    c. Lower third of the page, first column, second full paragraph, 
last line, the figure, ``$26,601'' is corrected to read ``$26,537''.
    8. On page 38537--
    a. First column last paragraph--
    (1) Line 22, the figure ``1.0006434'' is corrected to read 
``1.0002704''.
    (2) Line 35, the figure ``$41,430.56'' is corrected to read 
``$41,415.11''.
    (3) Line 36, the figure ``1.0006434'' is corrected to read 
``1.0002704''.
    b. Second column, first partial paragraph--
    (1) Line 5, the figure ``40,610.16'' is corrected to read 
``$40,595.02''.
    (2) Line 6, the figure ``1.0006434'' is corrected to read 
``1.0002704''.
    9. On page 38539, second column, fourth full paragraph--
    a. Line 6, the figure ``1.0006434'' is corrected to read 
``1.0002704''.
    b. Line 11, the figure ``1.0006434'' is corrected to read 
``1.0002704''.
    10. On page 38544--
    a. First column--
    (1) First partial paragraph--
    (a) Line 6, the figure ``27,382'' is corrected to read ``27,381''.
    (b) Last line, the figure ``27,382'' is corrected to read 
``27,381''.
    (2) First full paragraph--
    (a) Line 4, the figure ``27,382'' is corrected to read ``27,381''.
    (b) Line 27, the figure ``27,240'' is corrected to read ``27,239''.
    (3) Second column, first partial paragraph, line 25, the figure 
``27,382'' is corrected to read ``27,381''.
    10. On page 38545--
    a. Second column, second full paragraph--
    (1) Line 14, the figure, ``$26,601'' is corrected to read 
``$26,537''.
    (2) Last line, the figure, ``$26,601'' is corrected to read 
``$26,537''.
    b. Third column, second full paragraph, line 3, the figure, 
``$26,601'' is corrected to read ``$26,537''.
    11. On page 38546, third column--
    a. Second full paragraph, line 27, the figure ``$41,430.56'' is 
corrected to read ``$41,415.11''.
    b. Last paragraph, line 7, the figure ``1.0547'' is corrected to 
read ``1.0553''.
    12. On page 38547, top of the page--
    a. Second column, partial paragraph--
    (1) Line 2, the figure ``$41,430.56'' is corrected to read 
``$41,415.11''.
    (2) Line 3, the figure ``1.0547'' is corrected to read ``1.0553''.
    b. Third column, partial paragraph, line 5, the figure 
``$41,449.71'' is corrected to read ``$41,450.13''.
    c. Untitled table, the table is corrected to read as follows:

------------------------------------------------------------------------
 
------------------------------------------------------------------------
LTCH PPS Standard Federal Payment Rate..................      $41,415.11
Labor-Related Share.....................................         x 0.662
Labor-Related Portion of the LTCH PPS Standard Federal      = $27,416.80
 Payment Rate...........................................
Wage Index (CBSA 16974).................................        x 1.0553

[[Page 46146]]

 
Wage-Adjusted Labor Share of LTCH PPS Standard Federal      = $28,932.95
 Payment Rate...........................................
Nonlabor-Related Portion of the LTCH PPS Standard           + $13,998.31
 Federal Payment Rate ($41,415.11 x 0.338)..............
Adjusted LTCH PPS Standard Federal Payment Amount.......    = $42,931.26
MS-LTC-DRG 189 Relative Weight..........................        x 0.9655
Total Adjusted LTCH PPS Standard Federal Payment Rate...    = $41,450.13
------------------------------------------------------------------------

    13. On page 38548--
    a. Middle of the page,
    (1) The table titled ``TABLE 1A.--NATIONAL ADJUSTED OPERATING 
STANDARDIZED AMOUNTS, LABOR/NONLABOR [(68.3 PERCENT LABOR SHARE/31.7 
PERCENT NONLABOR SHARE IF WAGE INDEX IS GREATER THAN 1)--FY 2018''] is 
corrected to read as follows:

                                       Table 1A--National Adjusted Operating Standardized Amounts, Labor/Nonlabor
                            [(68.3 percent labor share/31.7 percent nonlabor share if wage index is greater than 1)--FY 2018]
--------------------------------------------------------------------------------------------------------------------------------------------------------
Hospital submitted quality data and is   Hospital submitted quality data and  Hospital did NOT submit quality data  Hospital did NOT submit quality data
 a meaningful EHR user (update = 1.35   is not a meaningful EHR user (update  and is a meaningful EHR user (update    and is NOT a meaningful EHR user
               percent)                           = -0.675 percent)                     = 0.675 percent)                  (update = -1.35 percent)
--------------------------------------------------------------------------------------------------------------------------------------------------------
       Labor             Nonlabor             Labor             Nonlabor            Labor             Nonlabor            Labor             Nonlabor
--------------------------------------------------------------------------------------------------------------------------------------------------------
       $3,806.04           $1,766.49          $3,729.99          $1,731.20          $3,780.69          $1,754.73          $3,704.65          $1,719.43
--------------------------------------------------------------------------------------------------------------------------------------------------------

    (2) The table titled ``TABLE 1B.--NATIONAL ADJUSTED OPERATING 
STANDARDIZED AMOUNTS, LABOR/NONLABOR [(62 PERCENT LABOR SHARE/38 
PERCENT NONLABOR SHARE IF WAGE INDEX IS LESS THAN OR EQUAL TO 1)--FY 
2018]'' is corrected to read as follows:

                                       Table 1B--National Adjusted Operating Standardized Amounts, Labor/Nonlabor
                         [(62 percent labor share/38 percent nonlabor share if wage index is less than or equal to 1)--FY 2018]
--------------------------------------------------------------------------------------------------------------------------------------------------------
Hospital submitted quality data and is   Hospital submitted quality data and  Hospital did NOT submit quality data  Hospital did NOT submit quality data
 a meaningful EHR user (update = 1.35   is not a meaningful EHR user (update  and is a meaningful EHR user (update    and is NOT a meaningful EHR user
               percent)                           = -0.675 percent)                     = 0.675 percent)                  (update = -1.35 percent)
--------------------------------------------------------------------------------------------------------------------------------------------------------
       Labor             Nonlabor             Labor             Nonlabor            Labor             Nonlabor            Labor             Nonlabor
--------------------------------------------------------------------------------------------------------------------------------------------------------
       $3,454.97           $2,117.56          $3,385.94          $2,075.25          $3,431.96          $2,103.46          $3,362.93          $2,061.15
--------------------------------------------------------------------------------------------------------------------------------------------------------

    (3) The table titled ``TABLE 1C.--ADJUSTED OPERATING STANDARDIZED 
AMOUNTS FOR HOSPITALS IN PUERTO RICO, LABOR/NONLABOR [(NATIONAL: 62 
PERCENT LABOR SHARE/38 PERCENT NONLABOR SHARE BECAUSE WAGE INDEX IS 
LESS THAN OR EQUAL TO 1);--FY 2018]'' is corrected to read as follows:

         Table 1C--Adjusted Operating Standardized Amounts For Hospitals In Puerto Rico, Labor/Nonlabor
[(National: 62 percent labor share/38 percent nonlabor share because wage index is less than or equal to 1);--FY
                                                      2018]
----------------------------------------------------------------------------------------------------------------
                                       Rates if wage index is greater than 1    Rates if wage index is less than
                                   --------------------------------------------           or equal to 1
        Standardized amount                                                    ---------------------------------
                                            Labor               Nonlabor             Labor           Nonlabor
----------------------------------------------------------------------------------------------------------------
National \1\......................  Not Applicable......  Not Applicable......       $3,454.97        $2,117.56
----------------------------------------------------------------------------------------------------------------
\1\ For FY 2018, there are no CBSAs in Puerto Rico with a national wage index greater than 1.

    b. Bottom of the page--
    (1) The table titled ``TABLE 1D.--CAPITAL STANDARD FEDERAL PAYMENT 
RATE [FY 2018]'' is corrected to read as follows:

             Table 1D--Capital Standard Federal Payment Rate
                                [FY 2018]
------------------------------------------------------------------------
                                                               Rate
------------------------------------------------------------------------
National...............................................         $453.95
------------------------------------------------------------------------

    (2) The table titled ``TABLE 1E.--LTCH PPS STANDARD FEDERAL PAYMENT 
RATE [FY 2018]'' is corrected to read as follows:

[[Page 46147]]



            Table 1E--LTCH PPS Standard Federal Payment Rate
                                [FY 2018]
------------------------------------------------------------------------
                                                          Reduced update
                                         Full update (1      * (-1.0
                                            percent)         percent)
------------------------------------------------------------------------
Standard Federal Payment Rate.........      $41,415.11       $40,595.02
------------------------------------------------------------------------

D. Corrections of Errors in the Appendices

    1. On pages 38552 through 38554, the table and table notes for the 
table titled ``TABLE I.--IMPACT ANALYSIS OF CHANGES TO THE IPPS FOR 
OPERATING COSTS FOR FY 2018'' are corrected to read as follows:
BILLING CODE 4120-01-P

[[Page 46148]]

[GRAPHIC] [TIFF OMITTED] TR04OC17.000


[[Page 46149]]


[GRAPHIC] [TIFF OMITTED] TR04OC17.001


[[Page 46150]]


[GRAPHIC] [TIFF OMITTED] TR04OC17.002


[[Page 46151]]


[GRAPHIC] [TIFF OMITTED] TR04OC17.003

BILLING CODE 4120-01-C

[[Page 46152]]

    2. On page 38555,
    a. Second column, second full paragraph--
    (1) Line 6, the figure ``0.997432'' is corrected to read 
``0.997439''.
    (2) Line 14, the figure ``0.2'' is corrected to read ``0.1''.
    b. Third column, first full paragraph, line 26, the figure 
``1.001148'' is corrected to read ``1.000882''.
    3. On page 38556, lower half of the page--
    a. First column, third full paragraph, line 6, the figure 
``0.988008'' is corrected to read ``0.987985''.
    b. Third column--
    (1) First full paragraph, line 8, the figure ``0.993348'' is 
corrected to read ``0.993324''.
    (2) Last paragraph, line 5, the figure ``0.993348'' is corrected to 
read ``0.993324''.
    4. On page 38557, top of the page, first column, first partial 
paragraph, line 20, the figure ``$44 million'' is corrected to read 
``$43 million''.
    5. On pages 38557 and 38558, the table titled ``FY 2018 IPPS 
ESTIMATED PAYMENTS DUE TO RURAL AND IMPUTED FLOOR WITH NATIONAL BUDGET 
NEUTRALITY'' is corrected to read as follows:

         FY 2018 IPPS Estimated Payments Due to Rural and Imputed Floor With National Budget Neutrality
----------------------------------------------------------------------------------------------------------------
                                                                                  Percent change
                                                                                    in payments
                                                                     Number of        due to
                                                                  hospitals that  application of
                      State                          Number of     will receive     rural floor   Difference (in
                                                     hospitals     the rural or     and imputed     $ millions)
                                                                   imputed floor    floor with
                                                                                      budget
                                                                                    neutrality
                                                             (1)             (2)             (3)             (4)
----------------------------------------------------------------------------------------------------------------
Alabama.........................................              84               3            -0.3              -5
Alaska..........................................               6               4             1.4               3
Arizona.........................................              57              38             0.4               7
Arkansas........................................              44               1            -0.3              -4
California......................................             299             177             1.2             134
Colorado........................................              47               4             0.4               5
Connecticut.....................................              30               7             0.1               2
Delaware........................................               6               6             1.8               8
Washington, DC..................................               7               0            -0.4              -2
Florida.........................................             171              17            -0.2             -16
Georgia.........................................             103               0            -0.3              -9
Hawaii..........................................              12               0            -0.3              -1
Idaho...........................................              14               0            -0.2              -1
Illinois........................................             127               3            -0.4             -17
Indiana.........................................              85               0            -0.3              -8
Iowa............................................              34               0            -0.3              -3
Kansas..........................................              53               0            -0.3              -3
Kentucky........................................              66               0            -0.3              -5
Louisiana.......................................              94               2            -0.3              -5
Maine...........................................              17               0            -0.4              -2
Massachusetts...................................              57              36             1.3              43
Michigan........................................              94               0            -0.3             -14
Minnesota.......................................              49               0            -0.3              -6
Mississippi.....................................              60               0            -0.3              -4
Missouri........................................              74               0            -0.2              -6
Montana.........................................              13               4               0               0
Nebraska........................................              24               0            -0.3              -2
Nevada..........................................              23               0            -0.4              -3
New Hampshire...................................              13               9             3.7              20
New Jersey......................................              64              17            -0.1              -4
New Mexico......................................              25               0            -0.2              -1
New York........................................             154              11            -0.3             -23
North Carolina..................................              84               0            -0.3             -10
North Dakota....................................               6               0            -0.2              -1
Ohio............................................             128               6            -0.3             -12
Oklahoma........................................              84               4            -0.2              -3
Oregon..........................................              34               5            -0.3              -3
Pennsylvania....................................             150               3            -0.4             -17
Puerto Rico.....................................              52              10             0.2               0
Rhode Island....................................              11              10             5.0              19
South Carolina..................................              56               0            -0.3              -5
South Dakota....................................              17               0            -0.2              -1
Tennessee.......................................              91               3            -0.3              -8
Texas...........................................             310               4            -0.3             -22
Utah............................................              31               1            -0.3              -2
Vermont.........................................               6               0            -0.2               0
Virginia........................................              73               1            -0.3              -7
Washington......................................              48               3            -0.2              -5
West Virginia...................................              29               3            -0.1              -1

[[Page 46153]]

 
Wisconsin.......................................              66               8            -0.2              -3
Wyoming.........................................              10               0            -0.1               0
----------------------------------------------------------------------------------------------------------------

    6. On pages 38559 and 38560, the table titled ``TABLE II.--IMPACT 
ANALYSIS OF CHANGES FOR FY 2018 ACUTE CARE HOSPITAL OPERATING 
PROSPECTIVE PAYMENT SYSTEM (PAYMENTS PER DISCHARGE)'' is corrected to 
read as follows:

    Table II--Impact Analysis of Changes for FY 2018 Acute Care Hospital Operating Prospective Payment System
                                            [Payments per discharge]
----------------------------------------------------------------------------------------------------------------
                                                                     Estimated       Estimated
                                                     Number of      average FY      average FY        FY 2018
                                                     hospitals     2017  payment   2018  payment      changes
                                                                  per  discharge  per  discharge
                                                             (1)             (2)             (3)             (4)
----------------------------------------------------------------------------------------------------------------
All Hospitals...................................           3,292         $11,867         $12,024             1.3
By Geographic Location:
    Urban hospitals.............................           2,492          12,207          12,379             1.4
    Large urban areas...........................           1,340          12,881          13,061             1.4
    Other urban areas...........................           1,152          11,477          11,642             1.4
    Rural hospitals.............................             800           8,911           8,930             0.2
Bed Size (Urban):
    0-99 beds...................................             648           9,730           9,813             0.8
    100-199 beds................................             763          10,248          10,404             1.5
    200-299 beds................................             441          11,079          11,245             1.5
    300-499 beds................................             426          12,366          12,538             1.4
    500 or more beds............................             214          15,011          15,224             1.4
Bed Size (Rural):
    0-49 beds...................................             318           7,523           7,486            -0.5
    50-99 beds..................................             282           8,487           8,372            -1.4
    100-149 beds................................             117           8,896           8,966             0.8
    150-199 beds................................              44           9,292           9,410             1.3
    200 or more beds............................              39          10,514          10,679             1.6
Urban by Region:
    New England.................................             114          13,125          13,303             1.4
    Middle Atlantic.............................             315          13,819          13,967             1.1
    South Atlantic..............................             404          10,783          10,952             1.6
    East North Central..........................             385          11,537          11,727             1.6
    East South Central..........................             147          10,245          10,375             1.3
    West North Central..........................             160          11,915          12,107             1.6
    West South Central..........................             378          10,948          11,134             1.7
    Mountain....................................             162          12,824          12,898             0.6
    Pacific.....................................             375          15,634          15,867             1.5
    Puerto Rico.................................              52           8,851           8,947             1.1
Rural by Region:
    New England.................................              20          12,091          12,166             0.6
    Middle Atlantic.............................              53           8,891           8,812            -0.9
    South Atlantic..............................             125           8,274           8,269            -0.1
    East North Central..........................             115           9,224           9,144            -0.9
    East South Central..........................             154           7,900           7,987             1.1
    West North Central..........................              97           9,736           9,794             0.6
    West South Central..........................             154           7,539           7,587             0.6
    Mountain....................................              58          10,620          10,718             0.9
    Pacific.....................................              24          12,466          12,517             0.4
By Payment Classification:
    Urban hospitals.............................           2,373          12,148          12,320             1.4

[[Page 46154]]

 
    Large urban areas...........................           1,354          12,867          13,047             1.4
    Other urban areas...........................           1,019          11,200          11,362             1.4
    Rural areas.................................             919          10,568          10,656             0.8
Teaching Status:
    Nonteaching.................................           2,204           9,850           9,967             1.2
    Fewer than 100 residents....................             839          11,372          11,535             1.4
    100 or more residents.......................             249          17,228          17,461             1.4
Urban DSH:
    Non-DSH.....................................             551          10,357          10,456             1.0
    100 or more beds............................           1,543          12,512          12,689             1.4
    Less than 100 beds..........................             370           8,960           9,102             1.6
Rural DSH:
    SCH.........................................             257           9,526           9,578             0.5
    RRC.........................................             293          11,384          11,568             1.6
    100 or more beds............................              34          10,297          10,339             0.4
    Less than 100 beds..........................             244           7,035           6,764            -3.9
Urban teaching and DSH:
    Both teaching and DSH.......................             863          13,579          13,766             1.4
    Teaching and no DSH.........................              92          11,410          11,522             1.0
    No teaching and DSH.........................           1,050          10,217          10,374             1.5
    No teaching and no DSH......................             368           9,854          10,000             1.5
Special Hospital Types:
    RRC.........................................             263          11,165          11,360             1.8
    SCH.........................................             316          10,774          10,820             0.4
    SCH and RRC.................................             131          11,265          11,362             0.9
Type of Ownership:
    Voluntary...................................           1,914          12,058          12,212             1.3
    Proprietary.................................             863          10,392          10,554             1.6
    Government..................................             513          12,810          12,980             1.3
Medicare Utilization as a Percent of Inpatient
 Days:
    0-25........................................             554          14,910          15,115             1.4
    25-50.......................................           2,149          11,728          11,890             1.4
    50-65.......................................             485           9,617           9,695             0.8
    Over 65.....................................             103           7,591           7,444            -1.9
FY 2018 Reclassifications by the Medicare
 Geographic Classification Review Board:
    All Reclassified Hospitals..................             858          11,661          11,830             1.5
    Non-Reclassified Hospitals..................           2,434          11,956          12,108             1.3
    Urban Hospitals Reclassified................             590          12,202          12,396             1.6
    Urban Nonreclassified Hospitals.............           1,858          12,210          12,381             1.4
    Rural Hospitals Reclassified Full Year......             268           9,339           9,399             0.7
    Rural Nonreclassified Hospitals Full Year...             485           8,422           8,379            -0.5
    All Section 401 Reclassified Hospitals:.....             166          12,504          12,677             1.4
    Other Reclassified Hospitals (Section                     47           8,122           8,165             0.5
     1886(d)(8)(B)).............................
----------------------------------------------------------------------------------------------------------------

    7. On pages 38561 through 38564 in the section titled ``Effects of 
the Changes to Medicare DSH and Uncompensated Care Payments for FY 
2018'' (which begins with the phrase ``As discussed in section V.G of 
the preamble'' and ends with the phrase ``hospitals are projected to 
receive large increases'') the section is corrected to read as follows:
    ``5. Effects of the Changes to Medicare DSH and Uncompensated Care 
Payments for FY 2018.
    As discussed in section V.G. of the preamble of this final rule, 
under section 3133 of the Affordable Care Act, hospitals that are 
eligible to receive Medicare DSH payments will receive 25 percent of 
the amount they previously would have received under the statutory 
formula for Medicare DSH payments under section 1886(d)(5)(F) of the 
Act. The remainder, equal to an estimate of 75 percent of what formerly 
would have been paid as Medicare DSH payments (Factor 1), reduced to 
reflect changes in the percentage of uninsured individuals and 
additional statutory adjustments (Factor 2), is available to make 
additional payments to each hospital that qualifies for Medicare DSH 
payments and that has uncompensated care. Each hospital eligible for 
Medicare DSH payments will receive an additional payment based on its 
estimated share of the total amount of uncompensated care for all 
hospitals eligible for Medicare DSH payments. The uncompensated care 
payment methodology has redistributive effects based on the proportion 
of a hospital's uncompensated care relative to the uncompensated care 
for all hospitals eligible for Medicare DSH payments (Factor 3).

[[Page 46155]]

    For FY 2018, we are establishing a Factor 2 of 58.01 percent 
determined using the uninsured estimates produced by CMS' Office of the 
Actuary (OACT) as part of the development of the National Health 
Expenditure Accounts (NHEA). Although we are continuing to use low-
income insured patient days as a proxy for uncompensated care, for the 
first time, we are using these data in combination with data on 
uncompensated care costs from Worksheet S-10 in the calculation of 
Factor 3. The uncompensated care payment methodology has redistributive 
effects based on the proportion of a hospital's uncompensated care 
relative to the total uncompensated care for all hospitals eligible for 
Medicare DSH payments. The change to Medicare DSH payments under 
section 3133 of the Affordable Care Act is not budget neutral.
    In this final rule, we are establishing the amount to be 
distributed as uncompensated care payments to DSH eligible hospitals, 
which for FY 2018 is $6,766,695,163.56. This figure represents 75 
percent of the amount that otherwise would have been paid for Medicare 
DSH payment adjustments adjusted by a Factor 2 of 58.01 percent. For FY 
2017, the amount available to be distributed for uncompensated care was 
$5,977,483,146.86, or 75 percent of the amount that otherwise would 
have been paid for Medicare DSH payment adjustments adjusted by a 
Factor 2 of 55.36 percent. To calculate Factor 3 for FY 2018, we used 
an average of data computed using Medicaid days from hospitals' 2012 
and 2013 cost reports from the March 2017 update of the HCRIS database, 
uncompensated care costs from hospitals' 2014 cost reports from the 
same extract of HCRIS, Medicaid days from 2012 cost report data 
submitted to CMS by IHS hospitals, and SSI days from the FY 2014 and FY 
2015 SSI ratios. For each eligible hospital, we calculated an 
individual Factor 3 for cost reporting years FYs 2012, 2013, and 2014. 
We then added the individual amounts and divided the sum by the number 
of cost reporting periods with data to calculate an average Factor 3 
for FY 2018. For purposes of this final rule, as we proposed, we used 
the most recent data from the March 2017 update of the HCRIS database 
for the Medicaid days component of the Factor 3 calculation as well as 
for the Worksheet S-10 uncompensated care cost component.
    The FY 2018 policy of using data from hospitals' FY 2012, FY 2013, 
and FY 2014 cost reporting years to determine Factor 3 is based on our 
FY 2017 final policy (81 FR 56943 through 56973), which is in contrast 
to the methodology used in FY 2016, when we used Medicaid days from the 
more recent of a hospital's full year 2012 or 2011 cost report from the 
March 2015 update of the HCRIS database, Medicaid days from 2012 cost 
report data submitted to CMS by IHS hospitals, and SSI days from the FY 
2013 SSI ratios to calculate Factor 3. In addition, as explained in 
section V.G.4.c. of the preamble of this final rule, we are making 
several additional modifications to the Factor 3 methodology: (1) To 
annualize Medicaid data and uncompensated care data if a hospital's 
cost report does not equal 12 months of data; (2) to apply a scaling 
factor to the uncompensated care payment amount calculated for each DSH 
eligible hospital so that total uncompensated care payments are 
consistent with the estimated amount available to make uncompensated 
care payments for FY 2018; (3) to apply statistical trims to the CCRs 
on Worksheet S-10 that are considered anomalies to ensure reasonable 
CCRs are used to convert charges to costs for purposes of determining 
uncompensated care costs; (4) to calculate Factor 3 for Puerto Rico 
hospitals, all-inclusive rate providers, and Indian Health Service and 
Tribal hospitals by substituting data regarding low-income insured days 
for FY 2013 for the Worksheet S-10 data on uncompensated care costs 
from FY 2014 cost reports; and (5) to determine the ratio of 
uncompensated care costs relative to total operating costs on the 
hospital's 2014 cost report (as of March 2017), and in cases where the 
ratio of uncompensated care costs relative to total operating costs 
exceeds 50 percent, to determine the ratio of uncompensated care costs 
to total operating costs from the hospital's 2015 cost report (as of 
March 2017) and apply that ratio to the hospital's total operating 
costs from its 2014 cost report to determine uncompensated care costs 
for FY 2014.
    We also are continuing the policies that were finalized in the FY 
2015 IPPS/LTCH PPS final rule (79 FR 50020 through 50022) to address 
several specific issues concerning the process and data to be employed 
in determining Factor 3 in the case of hospital mergers for FY 2018 and 
subsequent years, as well as continuing the policies finalized in the 
FY 2017 IPPS/LTCH PPS final rule concerning the methodology for 
calculating each hospital's relative share of uncompensated care, such 
as combining data from multiple cost reports beginning in the same 
fiscal year and calculating Factor 3 based on an average of the three 
individual Factor 3s for FYs 2012, 2013, and 2014, determined by adding 
the Factor 3 values for these years, and dividing by the number of cost 
reporting periods with data.
    To estimate the impact of the combined effect of changes in Factors 
1 and 2, as well as the changes to the data used in determining Factor 
3, on the calculation of Medicare DSH payments, including both 
empirically justified Medicare DSH payments and uncompensated care 
payments, we compared total DSH payments estimated in the FY 2017 IPPS/
LTCH PPS final rule to total DSH payments estimated in this FY 2018 
IPPS/LTCH PPS final rule. For FY 2017, for each hospital, we calculated 
the sum of: (1) 25 percent of the estimated amount of what would have 
been paid as Medicare DSH in FY 2017 in the absence of section 3133 of 
the Affordable Care Act; and (2) 75 percent of the estimated amount of 
what would have been paid as Medicare DSH payments in the absence of 
section 3133 of the Affordable Care Act, adjusted by a Factor 2 of 
55.36 percent and multiplied by a Factor 3 calculated as described in 
the FY 2017 IPPS/LTCH PPS final rule. For FY 2018, we calculated the 
sum of: (1) 25 percent of the estimated amount of what would be paid as 
Medicare DSH payments in FY 2018 absent section 3133 of the Affordable 
Care Act; and (2) 75 percent of the estimated amount of what would be 
paid as Medicare DSH payments absent section 3133 of the Affordable 
Care Act, adjusted by a Factor 2 of 58.01 percent and multiplied by a 
Factor 3 calculated using the methodology described previously.
    Our analysis included 2,438 hospitals that are projected to be 
eligible for DSH in FY 2018. It did not include hospitals that had 
terminated their participation in the Medicare program as of July 1, 
2017, Maryland hospitals, and SCHs that are expected to be paid based 
on their hospital specific rates. In addition, data from merged or 
acquired hospitals were combined under the surviving hospital's CCN, 
and the non-surviving CCN was excluded from the analysis. The estimated 
impact of the changes to Factors 1, 2, and 3 across all hospitals 
projected to be eligible for DSH payments in FY 2018, by hospital 
characteristic, is presented in the following table.

[[Page 46156]]



  Modeled Disproportionate Share Hospital Payments for Estimated FY 2018 DSHs by Hospital Type: Model DSH $ (in
                                        Millions) From FY 2017 to FY 2018
----------------------------------------------------------------------------------------------------------------
                                                   FY 2017 final   FY 2018 final      Dollar
                                     Number of    rule estimated  rule estimated  difference: FY  Percent change
                                  estimated DSHs    DSH  $ (in      DSH  $ (in     2017-FY 2018         **
                                     (FY 2018)       millions)       millions)     (in millions)
                                             (1)             (2)             (3)             (4)             (5)
----------------------------------------------------------------------------------------------------------------
Total...........................           2,438          $9,553         $10,630          $1,077            11.3
By Geographic Location:
    Urban Hospitals.............           1,938           9,113          10,110             996            10.9
    Large Urban Areas...........           1,043           5,717           6,377             660            11.5
    Other Urban Areas...........             895           3,396           3,733             336             9.9
    Rural Hospitals.............             500             439             520              80            18.3
Bed Size (Urban):
    0 to 99 Beds................             342             185             241              57            30.7
    100 to 249 Beds.............             843           2,154           2,386             233            10.8
    250+ Beds...................             753           6,775           7,482             707            10.4
Bed Size (Rural):
    0 to 99 Beds................             371             190             238              48            25.2
    100 to 249 Beds.............             115             193             221              28            14.6
    250+ Beds...................              14              56              60               5             8.2
Urban by Region:
    New England.................              91             387             415              29             7.4
    Middle Atlantic.............             241           1,570           1,643              73             4.7
    South Atlantic..............             316           1,724           2,037             314            18.2
    East North Central..........             322           1,252           1,372             120             9.6
    East South Central..........             131             566             618              53             9.3
    West North Central..........             103             439             488              48            11.0
    West South Central..........             257           1,165           1,448             283            24.3
    Mountain....................             121             448             497              49            11.0
    Pacific.....................             316           1,448           1,463              15             1.0
    Puerto Rico.................              40             116             129              13            10.9
Rural by Region:
    New England.................              12              16              21               5            32.0
    Middle Atlantic.............              25              33              32              -1            -3.9
    South Atlantic..............              86              92             115              23            25.2
    East North Central..........              68              44              58              13            29.9
    East South Central..........             136             141             150               9             6.2
    West North Central..........              30              19              23               4            22.1
    West South Central..........             111              72              95              23            32.1
    Mountain....................              27              15              20               5            32.2
    Pacific.....................               5               7               6              -1           -11.4
By Payment Classification:
    Urban Hospitals.............           1,928           9,106          10,101             994            10.9
    Large Urban Areas...........           1,043           5,717           6,377             660            11.5
    Other Urban Areas...........             885           3,389           3,724             334             9.9
    Rural Hospitals.............             510             447             529              82            18.5
Teaching Status:
    Nonteaching.................           1,526           2,955           3,276             321            10.9
    Fewer than 100 residents....             669           3,213           3,501             288             9.0
    100 or more residents.......             243           3,384           3,853             468            13.8
Type of Ownership:
    Voluntary...................           1,434           5,971           6,533             563             9.4
    Proprietary.................             552           1,650           1,662              12             0.7
    Government..................             452           1,932           2,434             502            30.0
Medicare Utilization Percent:
    Missing or Unknown..........              15               1              15              14          2147.4
    0 to 25.....................             425           2,972           3,365             393            13.2
    25 to 50....................           1,642           6,218           6,829             611             9.8
    50 to 65....................             310             352             408              57            16.1
    Greater than 65.............              46              11              13               2            17.4
----------------------------------------------------------------------------------------------------------------
Source: Dobson [bond] DaVanzo analysis of 2012-2014 Hospital Cost Reports.
* Dollar DSH calculated by [0.25 * estimated section 1886(d)(5)(F) payments] + [0.75 * estimated section
  1886(d)(5)(F) payments * Factor 2 * Factor 3]. When summed across all hospitals projected to receive DSH
  payments, DSH payments are estimated to be $9,553 million in FY 2017 and $10,630 million in FY 2018.
** Percentage change is determined as the difference between Medicare DSH payments modeled for the FY 2018 IPPS/
  LTCH PPS final rule (column 3) and Medicare DSH payments modeled for the FY 2017 IPPS/LTCH PPS final rule
  (column 2) divided by Medicare DSH payments modeled for the FY 2017 final rule (column 2) times 100 percent.

    Changes in projected FY 2018 DSH payments from DSH payments in FY 
2017 are primarily driven by (1) changes to Factor 1, which increased 
from $10.797 billion to $11.665 billion; (2) changes to Factor 2, which 
increased

[[Page 46157]]

from 55.36 percent to 58.01 percent; (3) changes to the data used to 
determine Factor 3; and (4) changes to the number of DSH-eligible 
hospitals within a given hospital type. The impact analysis found that, 
across all projected DSH eligible hospitals, FY 2018 DSH payments are 
estimated at approximately $10.630 billion, or an increase of 
approximately 11.3 percent from FY 2017 DSH payments (approximately 
$9.553 billion). While these changes result in a net increase in the 
amount available to be distributed in uncompensated care payments, DSH 
payments to select hospital types are expected to decrease. This 
redistribution of DSH payments is caused by changes in the data used to 
determine Factor 3 and changes in the number of DSH-eligible hospitals 
within a given hospital type.
    As seen in the above table, percent changes in DSH payments of less 
than 11.3 percent indicate that hospitals within the specified category 
are projected to experience a smaller increase in DSH payments, on 
average, compared to the universe of projected FY 2018 DSH hospitals. 
Conversely, percent changes in DSH payments that are greater than 11.3 
percent indicate a hospital type is projected to have a larger increase 
than the overall percent change on average, a larger increase than the 
overall percent change. The variation in the distribution of DSH 
payments by hospital characteristic is largely dependent on the change 
in a given hospital's number of Medicaid days and SSI days for purposes 
of the low-income insured days proxy between FY 2017 and FY 2018, as 
well as on its uncompensated care costs as reported on its FY 2014 
Worksheet S-10.
    Many rural hospitals, grouped by geographic location, payment 
classification, and bed size, are projected to experience a larger 
increase in DSH payments than their urban counterparts. Overall, rural 
hospitals are projected to receive an 18.3 percent increase in DSH 
payments, and urban hospitals are projected to receive a 10.9 percent 
increase. However, only smaller and medium-sized rural hospitals are 
projected to receive increases in DSH payments that are, on average, 
higher than the 11.3 percent change across all hospitals that are 
projected to be eligible for DSH in FY 2018. Rural hospitals that have 
0-99 beds are projected to experience a 25.2 percent payment increase, 
those with 100-249 beds are projected to receive a 14.6 percent 
increase, and larger rural hospitals with 250+ beds are projected to 
experience an 8.2 percent payment increase. This trend is somewhat 
consistent with urban hospitals, in which the smallest urban hospitals 
(0- 99 beds) are projected to receive an increase in DSH payments of 
30.7 percent. Medium sized hospitals (100-250 beds) and larger 
hospitals (250+ beds) are projected to receive increases of 10.8 and 
10.4 percent in DSH payments, respectively, which are relatively 
consistent with the overall average.
    By region, projected DSH payment increases for urban hospitals are 
smaller than the overall percent change in the New England, Middle 
Atlantic, East North Central, East South Central, and Pacific regions. 
Hospitals in the South Atlantic and West South Central regions are 
projected to receive increases in DSH payments that are, on average, 
larger than the 11.3 percent change across all hospitals projected to 
be eligible for DSH in FY 2018. Increases in the West North Central, 
Mountain, and Puerto Rico regions are generally consistent with the 
overall average percent increase of 11.3 percent. Regionally, rural 
hospitals are projected to receive a wider range of increases. Rural 
hospitals in the Middle Atlantic and Pacific regions are expected to 
receive a decrease in DSH payments, while those in the East South 
Central region are projected to receive an increase in DSH payments 
smaller than the 11.3 overall percent change. Increases are projected 
to be substantially larger than the overall average in many regions, 
including New England, South Atlantic, East North Central, West North 
Central, West South Central, and Mountain.
    Nonteaching hospitals and teaching hospitals with fewer than 100 
residents are projected to receive smaller increases than the overall 
percent change, at 10.9 and 9.0 percent respectively. Conversely, 
teaching hospitals with 100 or more residents are projected to receive, 
on average, larger increases than the overall percent change of 11.3 
percent, with a projected increase of 13.8 percent. Voluntary hospitals 
are expected to receive a 9.4 percent increase, which is somewhat 
smaller than the overall percent change, while proprietary hospitals 
are expected to receive almost no change in DSH payments. Government 
hospitals are projected to receive a larger than average 30.0 percent 
increase. Hospitals with 25 to 50 percent Medicare utilization are 
projected to receive increases in DSH payments slightly below the 
overall average at 9.8 percent, while all other hospitals are projected 
to receive larger increases.''
    8. On page 38572 top of the page--
    a. First column, fourth bulleted paragraph--
    (1) Line 4, the figure ``0.9986'' is corrected to read ``0.9987''
    (2) Line 5, the figure ``0.9484'' is corrected to read ``0.9483''
    b Second column, first full paragraph--
    (1) Line 8, the figure ``0.9484'' is corrected to read ``0.9483''
    (2) Line 9, the figure ``1.04'' is corrected to read ``1.03''.
    c. Third column--
    (1) First partial paragraph--
    (a) Line 1, the figure ``2.9'' is corrected to read ``3.0''
    (b) Line 4, the figure 2.0'' is corrected to read ``1.9''.
    (2) First full paragraph -
    (a) Line 4, the figure ``3.7'' is corrected to read ``3.8''.
    (b) Line 9, the figure ``5.2'' is corrected to read ``5.3''.
    (c) Line 12, the figure ``1.9'' is corrected to read ``2.0''.
    (3) Second full paragraph--
    (a) Line 7, the figure ``2.3'' is corrected to read ``2.2''.
    (b) Lines 10 and 11, the phrase ``3.2 percent.'' is corrected to 
read ``3.2 percent and 3.3 percent, respectively.''.
    (4) Last paragraph--
    (a) Line 14, the figure ``1.6'' is corrected to read ``1.7''.
    (b) Line 27, the figure ``6.6'' is corrected to read ``6.5''.
    9. On pages 38572 through 38574, the table titled ``TABLE III.--
COMPARISON OF TOTAL PAYMENTS PER CASE [FY 2017 PAYMENTS COMPARED TO FY 
2018 PAYMENTS]'' is corrected to read as follows:

BILLING CODE 4120-01-P

[[Page 46158]]

[GRAPHIC] [TIFF OMITTED] TR04OC17.004


[[Page 46159]]


[GRAPHIC] [TIFF OMITTED] TR04OC17.005

BILLING CODE 4120-01-C
    10. On page 38576--
    a. First column, last paragraph, line 4, the figure ``$41,430.56'' 
is corrected to read ``$41,415.11''.
    b. Second column--
    (1) First partial paragraph--
    (a) Line 1, the figure ``1.0006434'' is corrected to read 
``1.0002704''.
    (b) Line 12, the figure ``$40,610.16'' is corrected to read 
``$40,595.02''.
    (2) Second full paragraph, line 14, the figure ``1.0006434'' is 
corrected to read ``1.0002704''.
    11. On page 38578, second column, second full paragraph--
    a. Line 21, the figure ``$41,430.56'' is corrected to read 
``$41,415.11''.
    b. Line 22, the figure ``$40,610.16'' is corrected to read 
``$40,595.02''.
    12. On page 38579--
    a. Top of the page, the table title and the table titled ``TABLE 
IV: IMPACT OF PAYMENT RATE AND POLICY CHANGES TO LTCH PPS PAYMENTS FOR 
STANDARD PAYMENT RATE CASES FOR FY 2018 [Estimated FY 2017 payments 
compared to estimated FY 2018 payments]'' are corrected to read as 
follows:
BILLING CODE 4120-01-P

[[Page 46160]]

[GRAPHIC] [TIFF OMITTED] TR04OC17.006


[[Page 46161]]


[GRAPHIC] [TIFF OMITTED] TR04OC17.007


[[Page 46162]]


[GRAPHIC] [TIFF OMITTED] TR04OC17.008

    b. Lower fourth of the page, third column, partial paragraph, line 
5, the figure ``1.0006434'' is corrected to read ``1.0002704''.
    13. On page 38585, middle of the page, first column, first 
paragraph--

[[Page 46163]]

    a. Lines 34, the figure ``2.7'' is corrected to read ``2.5''.
    b. Line 38, the figure ``$226'' is corrected to read ``$227''.

    Dated: September 29, 2017.
Ann C. Agnew,
Executive Secretary to the Department, Department of Health and Human 
Services.
[FR Doc. 2017-21325 Filed 9-29-17; 4:15 pm]
 BILLING CODE 4120-01-C