Source: https://www.federalregister.gov/documents/2013/03/07/2013-05263/medicare-program-extension-of-the-payment-adjustment-for-low-volume-hospitals-and-the
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Federal Register :: Medicare Program; Extension of the Payment Adjustment for Low-volume Hospitals and the Medicare-dependent Hospital (MDH) Program Under the Hospital Inpatient Prospective Payment Systems (IPPS) for Acute Care Hospitals for Fiscal Year 2013
A Rule by the Centers for Medicare & Medicaid Services on 03/07/2013
14689-14694 (6 pages)
https://www.federalregister.gov/d/2013-05263 https://www.federalregister.gov/d/2013-05263
We revised the regulations at 42 CFR 412.101 to reflect the changes to the qualifying criteria and the payment adjustment for low-volume hospitals according to the provisions of the Affordable Care Act in the FY 2011 IPPS/LTCH PPS final rule (75 FR 50238 through 50275 and 50414). In addition, we also defined, at § 412.101(a), the term “road miles” to mean “miles” as defined at § 412.92(c)(1), and clarified the existing regulations to indicate that a hospital must continue to qualify as a low-volume hospital in order to receive the payment adjustment in that year (that is, it is not based on a one-time qualification). Furthermore, in that same final rule, we discussed the process for requesting and obtaining the low-volume hospital payment adjustment for FY 2011 (75 FR 50240). For the second year of the changes to the low-volume hospital adjustment provided for by the provisions of the Affordable Care Act (that is, FY 2012), consistent with the regulations at § 412.101(b)(2)(ii), we updated the discharge data source used to identify qualifying low-volume hospitals and calculate the payment adjustment (percentage increase) in the FY 2012 IPPS/LTCH PPS final rule (76 FR 51677 through 51680). Under § 412.101(b)(2)(ii), for FYs 2011 and 2012, a hospital's Medicare discharges from the most recently available MedPAR data, as determined by CMS, are used to determine if the hospital meets the discharge criteria to receive the low-volume payment adjustment in the current year. In that same final rule, we established that, for FY 2012, qualifying low-volume hospitals and their payment adjustment are determined using Medicare discharge data from the March 2011 update of the FY 2010 MedPAR file, as these data were the most recent data available at that time. In addition, we noted that eligibility for the low-volume payment adjustment for FY 2012 was also dependent upon meeting (if the hospital was qualifying for the low-volume payment adjustment for the first time in FY 2012), or continuing to meet (if the hospital qualified in FY 2011) the mileage criteria specified at § 412.101(b)(2)(ii). Furthermore, we established a procedure for a hospital to request low-volume hospital status for FY 2012 (which was consistent with the process we employed for the low-volume hospital payment adjustment for FY 2011).Start Printed Page 14690
Prior to the enactment of the ATRA, in the FY 2013 IPPS/LTCH PPS final rule (77 FR 53406 through 53409), we discussed the low-volume hospital payment adjustment for FY 2013 and subsequent fiscal years. Specifically, we discussed that in accordance with section 1886(d)(12) of the Act, beginning with FY 2013, the low-volume hospital definition and payment adjustment methodology reverted back to the statutory requirements that were in effect prior to the amendments made by the Affordable Care Act. Therefore, we explained, as specified under the existing regulations at § 412.101, effective for FY 2013 and subsequent years, in order to qualify as a low-volume hospital, a subsection (d) hospital must be more than 25 road miles from another subsection (d) hospital and have less than 200 discharges (that is, less than 200 total discharges, including both Medicare and non-Medicare discharges) during the fiscal year. We also established a procedure for hospitals to request low-volume hospital status for FY 2013 (which was consistent with our previously established procedures for FYs 2011 and 2012).
To implement the extension of the temporary change in the low-volume hospital payment policy for FY 2013 provided for by the ATRA, in accordance with the existing regulations at § 412.101(b)(2)(ii) and consistent with our implementation of the changes in FYs 2011 and 2012, we are updating the discharge data source used to identify qualifying low-volume hospitals and calculate the payment adjustment (percentage increase) for FY 2013. As noted previously, under § 412.101(b)(2)(ii), for FYs 2011 and FY 2012, a hospital's Medicare discharges from the most recently available MedPAR data, as determined by us, are used to determine if the hospital meets the discharge criteria to receive the low-volume payment adjustment in the current year. The applicable low-volume percentage increase provided for by the provisions of the Affordable Care Act is determined using a continuous linear sliding scale equation that results in a low-volume adjustment ranging from an additional 25 percent for hospitals with 200 or fewer Medicare discharges to a zero percent additional payment adjustment for hospitals with 1,600 or more Medicare discharges.
For FY 2013, consistent with our historical policy, qualifying low-volume hospitals and their payment adjustment will be determined using Medicare discharge data from the March 2012 update of the FY 2011 MedPAR file, as these data were the most recent data available at the time of the development of the FY 2013 payment rates and factors established in the FY 2013 IPPS/LTCH PPS final rule. Table 14 of this notice (which is available only through the Internet on the CMS Web site at http://www.cms.hhs.gov/​AcuteInpatientPPS/​01_​overview.asp) lists the “subsection (d)” hospitals with fewer than 1,600 Medicare discharges based on the March 2012 update of the FY 2011 MedPAR files and their FY 2013 low-volume payment adjustment (if eligible). Eligibility for the low-volume hospital payment adjustment for FY 2013 is also dependent upon meeting (in the case of a hospital that did not qualify for the low-volume hospital payment adjustment in FY 2012) or continuing to meet (in the case of a hospital that did qualify for the low-volume hospital payment adjustment in FY 2012) the mileage criterion specified at § 412.101(b)(2)(ii). We note that the list of hospitals with fewer than 1,600 Medicare discharges in Table 14 does not reflect whether or not the hospital meets the mileage criterion, and a hospital also must be located more than 15 road miles from any other IPPS hospital in order to qualify for a low-volume hospital payment adjustment in FY 2013.
In order to receive a low-volume hospital payment adjustment under § 412.101, in accordance with our previously established procedure, a hospital must notify and provide documentation to its fiscal intermediary or Medicare Administrative Contractor (MAC) that it meets the mileage criterion. The use of a Web-based mapping tool, such as MapQuest, as part of documenting that the hospital meets the mileage criterion for low-volume hospitals, is acceptable. The fiscal intermediary or MAC will determine if the information submitted by the hospital, such as the name and street address of the nearest hospitals, location on a map, and distance (in road miles, as defined in the regulations at § 412.101(a)) from the hospital requesting low-volume hospital status, is sufficient to document that it meets the mileage criterion. The fiscal intermediary or MAC may follow up with the hospital to obtain additional necessary information to determine whether or not the hospital meets the low-volume mileage criterion. In addition, the fiscal intermediary or MAC will refer to the hospital's Medicare discharge data determined by CMS to determine whether or not the hospital meets the discharge criterion, and the amount of the FY 2013 payment adjustment, once it is determined that the mileage criterion has been met. The Medicare discharge data shown in Table 14, as well as the Medicare discharge data for all “subsection (d)” hospitals with claims in the March 2012 update of the FY 2011 MedPAR file, is also available on the CMS Web site for hospitals to view their Medicare discharges to help hospitals to decide whether or not to apply for low-volume hospital status.
Consistent with our previously established procedure, we are implementing the following procedure for a hospital to request low-volume hospital status for FY 2013. In order for the applicable low-volume percentage increase to be applied to payments for its discharges beginning on or after October 1, 2012 (that is, the beginning of FY 2013), a hospital must make its request for low-volume hospital status in writing to its fiscal intermediary or MAC by March 22, 2013. A hospital that qualified for the low-volume payment adjustment in FY 2012 may continue to receive a low-volume payment adjustment in FY 2013 without reapplying, if it continues to meet the Medicare discharge criterion, based on the March 2012 update of the FY 2011 MedPAR data (shown in Table 14) and the distance criterion; however, the hospital must verify in writing to its fiscal intermediary or MAC no later than March 22, 2013, that it continues to be more than 15 miles from any other “subsection (d)” hospital. Furthermore, for requests for low-volume hospital status for FY 2013 received after March 22, 2013, if the hospital meets the criteria to qualify as a low-volume hospital, the fiscal intermediary or MAC Start Printed Page 14691will apply the applicable low-volume adjustment in determining payments to the hospital's FY 2013 discharges prospectively effective within 30 days of the date of the fiscal intermediary's or MAC's low-volume status determination. (As noted previously, this procedure is similar to the policy we established for a hospital to request low-volume hospital status for FYs 2011 and 2012 in the FY 2011 IPPS/LTCH PPS final rule (75 FR 20574 through 20575) and FY 2012 IPPS/LTCH PPS final rule (76 FR 51680), respectively.)
In the FY 2011 IPPS/LTCH PPS final rule (75 FR 50287 and 50414), we amended the regulations at § 412.108(a)(1) and (c)(2)(iii) to reflect the Affordable Care Act extension of the MDH program through FY 2012. We intend to amend the regulations at § 412.108(a)(1) and (c)(2)(iii) to reflect the statutory extension of the MDH program through FY 2013 provided for by the provisions of the ATRA in future rulemaking.
In anticipation of the September 30, 2012 expiration of the MDH provision, we allowed MDHs that applied for reclassification as sole community hospitals (SCHs) by August 31, 2012, to have such status be effective on October 1, 2012 under the regulations at § 412.92(b)(2)(v). Hospitals that applied by the August 31, 2012 deadline and were approved for SCH classification received SCH status effective October 1, 2012. Additionally, some hospitals that had MDH status as of the September 30, 2012 expiration of the MDH program may have missed the August 31, 2012 application deadline. These hospitals applied for SCH status in the usual manner instead and were approved for SCH status effective 30 days from the date of approval, resulting in an effective date later than October 1, 2012. These hospitals must reapply for MDH status under § 412.108(b).
One of the criteria to be classified as an MDH is that the hospital must be located in a rural area. To qualify for MDH status, some MDHs reclassified from an urban to a rural hospital designation, under the regulations at § 412.103(b). With the expiration of the MDH provision, some of these providers may have requested a cancellation of their rural classification. Therefore, in order to qualify for MDH status, these hospitals must request to be reclassified as rural under § 412.103(b) and must reapply for MDH status under § 412.108(b).
Any provider that falls within either of the two exceptions listed previously may not have its MDH status automatically reinstated effective October 1, 2012. That is, if a provider reclassified to SCH status or cancelled its rural status effective October 1, 2012, its MDH status will not be retroactive to October 1, 2012, but will instead be applied prospectively based on the date the hospital is notified that it again meets the requirements for MDH status in accordance with § 412.108(b)(4) after reapplying for MDH status. Once granted, this status will remain in effect through FY 2013, subject to the requirements at § 412.108. However, if a provider reclassified to SCH status or cancelled its rural status effective on a date later than October 1, 2012, MDH status will be reinstated effective from October 1, 2012 but will end on the date on which the provider changed its status to an SCH or cancelled its rural status. Those hospitals may also reapply for MDH status to be effective again 30 days from the date the hospital is notified of the determination, in accordance with § 412.108(b)(4). Once granted, this status will remain in effect through FY 2013, subject to the requirements at § 412.108. Providers that fall within either of the two exceptions will have to reapply for MDH status according to the classification procedures in 42 CFR 412.108(b). Specifically, the regulations at § 412.108(b) require the following:
Example 2: Hospital B was classified as an MDH prior to the September 30, 2012 expiration of the MDH program. per the regulations at § 412.92(b)(2)(v) and in anticipation of the expiration of the MDH program, Hospital B applied for reclassification as an SCH by August 31, 2012, and was approved for SCH status effective on October 1, 2012. Hospital B's MDH status will not be automatically reinstated. In order to reclassify as an MDH, Hospital B must cancel its SCH status, in accordance with § 412.92(b)(4), and reapply for Start Printed Page 14692MDH status under the regulations at § 412.108(b).
Example 3: Hospital C was classified as an MDH prior to the September 30, 2012 expiration of the MDH program. Hospital C missed the application deadline of August 31, 2012 for reclassification as an SCH under the regulations at § 412.92(b)(2)(v) and was not eligible for its SCH status to be effective as of October 1, 2012. Hospitals C's Medicare contractor approved its request for SCH status effective November 16, 2012. Hospital C's MDH status will be reinstated effective October 1, 2012 through November 15, 2012 and will subsequently be cancelled effective November 16, 2012. In order to reclassify as an MDH, Hospital C must cancel its SCH status, in accordance § 412.92(b)(4), and reapply for MDH status under the regulations at § 412.108(b).
Example 4: Hospital D was classified as an MDH prior to the September 30, 2012 expiration of the MDH program. In anticipation of the expiration of the MDH program, Hospital D requested that its rural classification be cancelled per the regulations at § 412.103(g). Hospital D's rural classification was cancelled effective October 1, 2012. Hospital D's MDH status will not be automatically reinstated. In order to reclassify as an MDH, Hospital D must request to be reclassified as rural under § 412.103(b) and must reapply for MDH status under § 412.108(b).
Example 5: Hospital E was classified as an MDH prior to the September 30, 2012 expiration of the MDH program. In anticipation of the expiration of the MDH program, Hospital E requested that its rural classification be cancelled per the regulations at § 412.103(g). Hospital E's rural classification was cancelled effective January 1, 2013. Hospital E's MDH status will be reinstated but only for the period of time during which it met the criteria for MDH status. Since Hospital E cancelled its rural status and was classified as urban effective January 1, 2013, MDH status will only be reinstated effective October 1, 2012 through December 31, 2012 and will be cancelled effective January 1, 2013. In order to reclassify as an MDH, Hospital E must request to be reclassified as rural under § 412.103(b) and must reapply for MDH status under § 412.108(b).
We note that hospitals that were MDHs as of the September 30, 2012 expiration of the MDH program that have returned to urban status will first need to apply for rural status under § 412.103(b), and hospitals that became SCHs will first need to request cancellation of SCH status under § 412.92(b)(4).
Finally, we note that hospitals continue to be bound by § 412.108(b)(4)(i) through (iii) to report a change in the circumstances under which the status was approved. Thus, if a hospital's MDH status has been extended and it no longer meets the requirements for MDH status, it is required under § 412.108(b)(4)(i) through (iii) to make such a report to its fiscal intermediary or MAC. Additionally, under the regulations at § 412.108(b)(5), Medicare contractors are required to evaluate on an ongoing basis whether or not a hospital continues to qualify for MDH status.
We have examined the impacts of this notice as required by Executive Order Start Printed Page 1469312866 on Regulatory Planning and Review (September 30, 1993), Executive Order 13563 on Improving Regulation and Regulatory Review (January 18, 2011), the Regulatory Flexibility Act (RFA) (September 19, 1980, Pub. L. 96-354), section 1102(b) of the Social Security Act, section 202 of the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-4), Executive Order 13132 on Federalism (August 4, 1999), and the Congressional Review Act (5 U.S.C. 804(2)).
The impact analysis reflects the change in estimated payments to IPPS hospitals in FY 2013 due to sections 605 and 606 of the ATRA relative to estimated FY 2013 payments to IPPS hospitals published in the FY 2013 IPPS/LTCH PPS final rule (77 FR 53748). As described later in the regulatory impact analysis, FY 2013 IPPS payments to hospitals affected by sections 605 and 606 of the ATRA are projected to increase by $509 million (relative to the FY 2013 payments estimated for these hospitals for the FY Start Printed Page 146942013 IPPS/LTCH PPS final rule). Furthermore, we project that, on the average, overall IPPS payments in FY 2013 for all hospitals will increase by 0.5 percent due to these provisions in the ATRA compared to the previous estimate of FY 2013 payments to all IPPS hospitals published in the FY 2013 IPPS/LTCH PPS final rule.
As required by OMB Circular A-4 (available at http://www.whitehousegov/​omb/​circulars/​a004/​a-4.pdf), in Table I below, we have prepared an accounting statement showing the classification of expenditures associated with the provisions of this notice as they relate to acute care hospitals. This table provides our best estimate of the change in Medicare payments to providers as a result of the changes to the IPPS presented in this notice. All expenditures are classified as transfers from the Federal government to Medicare providers. As previously discussed, relative to what was projected in the FY 2013 IPPS/LTCH PPS final rule, the changes in this notice for implementing sections 605 and 606 of the ATRA are projected to increase FY 2013 payments to IPPS hospitals by $509 million.
Annualized Monetized Transfers $509 million
Total $509 million