[Federal Register Volume 66, Number 250 (Monday, December 31, 2001)]
[Rules and Regulations]
[Pages 67494-67495]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-32091]


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DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

42 CFR Parts 413, 419, and 489

[CMS-1159-F3]
RIN 0938-AL35


Medicare Program; Prospective Payment System for Hospital 
Outpatient Services; Delay in Effective Date of Calendar Year 2002 
Payment Rates and the Pro Rata Reduction on Transitional Pass-Through 
Payments

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

ACTION: Final rule; delay of effective date.

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SUMMARY: This document delays the effective date of the payment rates 
announced for Medicare hospital outpatient services paid under the 
prospective payment system for calendar year 2002. These rates were 
announced in a November 30, 2001 final rule (66 FR 59856). In addition, 
this document delays the effective date of the uniform reduction to be 
applied to each of the transitional pass-through payments for CY 2002. 
Certain provisions of the November 30, 2001 rule, as discussed in the 
SUPPLEMENTARY INFORMATION section, are not delayed.

DATES: The effective date of the amendments to 42 CFR published at 66 
FR 59856 (November 30, 2001) remains January 1, 2002, except that the 
effective date for Sec. 419.32(b)(1)(iii) is delayed indefinitely. 
Also, the effective date for Sec. 419.62(d), added at 66 FR 55865, 
published on November 2, 2001, is delayed indefinitely. The effective 
date of the payment rates announced for Medicare hospital outpatient 
services paid under the prospective payment system for calendar year 
2002, published in the preamble and addenda of the November 30, 2001 
final rule, and the uniform reduction to be applied to each of the 
transitional pass-through payments for CY 2002, published in the 
preamble and addenda of the November 30, 2001 final rule, is delayed 
until no later than April 1, 2002. These rates were announced in a 
November 30, 2001 final rule (66 FR 59856). We will publish a document 
in the Federal Register announcing the new effective date for the rates 
and for Sec. 419.32(b)(1)(iii) and Sec. 419.62(d).

FOR FURTHER INFORMATION CONTACT: James L. Hart, (410) 786-0378.

SUPPLEMENTARY INFORMATION:

Availability of Copies and Electronic Access

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I. Background

    On November 30, 2001, we published a final rule announcing the 
final ambulatory payment classification (APC) groups, relative weights, 
and payment rates under the hospital outpatient prospective payment 
system (OPPS) for calendar year 2002 (66 FR 59856). As discussed in 
detail in that document, in setting the APC relative weights, we 
incorporated 75 percent of the estimated costs for devices eligible for 
transitional pass-through payments in 2002 into the costs of the APC 
groups associated with the use of the devices (66 FR 59906).
    After the publication of the November 30 final rule, we discovered 
that the final rule reflects several inadvertent technical errors in 
which we incorrectly associated specific devices approved for 
transitional pass-through payments with particular procedures. The 
effects of the errors we have identified are of a magnitude significant 
enough to affect not only the estimate of total transitional pass-
through payments and the uniform reduction percentage to be applied to 
transitional pass-through payments in 2002, but also the payment rates 
for all APCs. Using rates that reflect these errors would result in 
inappropriate, uneven effects on payments to hospitals. Thus, we 
believe it would be inappropriate to proceed to make the payment rates 
published on November 30 effective without further changes.
    In order to thoroughly assess the accuracy of the data files 
containing these errors and to assure that they do not contain further 
errors that might also have significant implications, an intensive 
review of the data will be necessary. Because of the time needed for 
this review, we cannot complete this review and recalculate the rates 
before the previously published effective date of January 1, 2002. We 
will, therefore, continue to pay for services covered under the OPPS 
after January 1 and until no later than April 1, 2002 under the rates 
in effect on December 31, 2001. We will also continue until no later 
than April 1, 2002 to make transitional pass-through payments for drugs 
and devices without applying the uniform reduction announced on 
November 30, 2001.
    Once our review has been completed and the rates corrected, we will 
publish a final rule with revised rates and a revised calculation of 
the uniform reduction in transitional pass-through payments. We will 
announce the effective date of these changes in that rule.

II. List of OPPS Provisions That Are Not Delayed

    This document does not delay the following provisions:
    <bullet> Medicare, Medicaid, and SCHIP Benefits Improvement and 
Protection Act of 2000 coinsurance limit.
    <bullet> Limitation of coinsurance amount to inpatient hospital 
deductible amount.
    <bullet> Changes in services covered within the scope of OPPS.
    <bullet> Categories of hospitals subject to, and excluded from, the 
OPPS.
    <bullet> Criteria for new technology APCs.
    <bullet> Provider-based issues.
    <bullet> Change to the definition of ``single-use devices'' for 
transitional pass-through payments.

III. Waiver of Notice of Proposed Rulemaking and the 30-Day Delay 
in the Effective Date

    We ordinarily publish a notice of proposed rulemaking in the 
Federal Register and invite public comment on the proposed rule. The 
notice of proposed rulemaking includes a reference to the legal 
authority under which the rule is proposed, and the terms and 
substances of the proposed rule or a description of the subjects and 
issues involved. This procedure can be waived, however, if an agency 
finds good cause that a notice-and-comment

[[Page 67495]]

procedure is impracticable, unnecessary, or contrary to the public 
interest and incorporates a statement of the finding and its reasons in 
the rule issued.
    We normally provide a delay of 30 days in the effective date of a 
final rule. However, if adherence to this procedure would be 
impracticable, unnecessary, or contrary to the public interest, we may 
waive the delay in the effective date. We find that a 30-day delay in 
the effective date of this regulation would be both impracticable and 
contrary to the public interest. In addition, although this is an 
ongoing final rule proceeding, we nevertheless have good cause to waive 
notice and comment. As we have discussed above, the rates that are 
scheduled to go into effect on January 1, 2002 reflect inadvertent 
technical errors that have major consequences. We, therefore, do not 
believe it is appropriate to implement the new rates on January 1, 
2002. To proceed with making payments on the basis of significantly 
incorrect rates would be imprudent and contrary to the public interest. 
These errors were discovered within 30 days of the January 1, 2002 
effective date. Therefore, there is an urgent need to proceed with a 
delay in the effective date of the 2002 rates, and there is not 
sufficient time to provide notice of proposed rulemaking and a 30-day 
notice of the delay.

(Catalog of Federal Domestic Assistance Program No. 93.773, 
Medicare--Hospital Insurance; and Program No. 93.774, Medicare--
Supplementary Medical Insurance Program)


    Dated: December 18, 2001.
Thomas A. Scully,
Administrator, Centers for Medicare & Medicaid Services.

    Approved: December 21, 2001.
Tommy G. Thompson,
Secretary.
[FR Doc. 01-32091 Filed 12-27-01; 8:55 am]
BILLING CODE 4120-01-P