Final Rule: Inpatient Psychiatric Facilities
DEPARTMENT OF HEALTH AND HUMAN SERVICES
Centers for Medicare & Medicaid Services
42 CFR Part 412
[CMS-1346-F]
RIN 0938-AQ23
Medicare Program; Inpatient Psychiatric Facilities Prospective
Payment System – Update for Rate Year Beginning July 1, 2011
(RY 2012)
AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS.
ACTION: Final rule.
SUMMARY: This final rule updates the prospective payment
rates for Medicare inpatient hospital services provided by
inpatient psychiatric facilities (IPFs) for discharges
occurring during the rate year (RY) beginning July 1, 2011
through September 30, 2012. The final rule also changes the
IPF prospective payment system (PPS) payment rate update
period to a RY that coincides with a fiscal year (FY). In
addition, the rule implements policy changes affecting the IPF
PPS teaching adjustment. It also rebases and revises the
Rehabilitation, Psychiatric, and Long-Term Care (RPL) market
basket, and makes some clarifications and corrections to
terminology and regulations text.
DATES: These regulations are effective on July 1, 2011.
CMS-1346-F 2
FOR FURTHER INFORMATION CONTACT:
Dorothy Myrick or Jana Lindquist, (410) 786-4533 (for general
information).
Mary Carol Barron, (410) 786-7943, or Bridget Dickensheets,
(410) 786-8670, (for information regarding the market basket
and labor-related share).
Theresa Bean, (410) 786-2287 (for information regarding the
regulatory impact analysis).
SUPPLEMENTARY INFORMATION:
Table of Contents
To assist readers in referencing sections contained in
this document, we are providing the following table of
contents.
I. Background
A. Annual Requirements for Updating the IPF PPS
B. Overview of the Legislative Requirements of the IPF PPS
C. General Overview of the IPF PPS
D. Transition Period for Implementation of the IPF PPS
II. Provisions of the Proposed Rule and Responses to Public
Comments
III. Changing the IPF PPS Payment Rate Update Period from a
Rate Year to a Fiscal Year
IV. Rebasing and Revising of the Rehabilitation, Psychiatric,
CMS-1346-F 3
and Long-Term Care (RPL) Market Basket for Inpatient
Psychiatric Facilities
A. Background
B. Overview of the FY 2008-Based RPL Market
Basket
C. Rebasing and Revising of the RPL Market Basket
1. Development of Cost Categories and Weights
a. Medicare Cost Reports
b. Other Data Sources
2. Final Cost Category Computation
3. Selection of Price Proxies
a. Wages and Salaries
b. Employee Benefits
c. Electricity
d. Fuel, Oil, and Gasoline
e. Water and Sewage
f. Professional Liability Insurance
g. Pharmaceuticals
h. Food: Direct Purchases
i. Food: Contract Services
j. Chemicals
k. Medical Instruments
l. Photographic Supplies
CMS-1346-F 4
m. Rubber and Plastics
n. Paper and Printing Products
o. Apparel
p. Machinery and Equipment
q. Miscellaneous Products
r. Professional Fees: Labor-Related
s. Administrative and Business Support Services
t. All Other: Labor-Related Services
u. Professional Fees: Nonlabor-Related
v. Financial Services
w. Telephone Services
x. Postage
y. All Other: Nonlabor-Related Services
4. Methodology for Capital Portion of the RPL Market Basket
5. RY 2012 Market Basket Update
6. Labor-Related Share
V. Updates to the IPF PPS for RY Beginning July 1, 2011
A. Determining the Standardized Budget-Neutral Federal
Per Diem Base Rate
1. Standardization of the Federal Per Diem Base Rate and
Electroconvulsive Therapy (ECT) Rate
2. Calculation of the Budget Neutrality Adjustment
a. Outlier Adjustment
CMS-1346-F 5
b. Stop-Loss Provision Adjustment
c. Behavioral Offset
B. Update of the Federal Per Diem Base Rate and
Electroconvulsive Therapy Rate
VI. Update of the IPF PPS Adjustment Factors
A. Overview of the IPF PPS Adjustment Factors
B. Patient-Level Adjustments
1. Adjustment for MS-DRG Assignment
2. Payment for Comorbid Conditions
3. Patient Age Adjustments
4. Variable Per Diem Adjustments
C. Facility-Level Adjustments
1. Wage Index Adjustment
a. Background
b. Wage Index for RY 2012
c. OMB Bulletins
2. Adjustment for Rural Location
3. Teaching Adjustment
a. Temporary Adjustment to FTE Cap to Reflect
Residents Affected by Hospital Closure
b. Temporary Adjustment to FTE Cap to Reflect Residents
Affected By Residency Program Closure
CMS-1346-F 6
4. Cost of Living Adjustment for IPFs Located in Alaska
and Hawaii
5. Adjustment for IPFs with a Qualifying
Emergency Department (ED)
D. Other Payment Adjustments and Policies
1. Outlier Payments
a. Update to the Outlier Fixed Dollar Loss Threshold Amount
b. Statistical Accuracy of Cost-to-Charge Ratios
2. Expiration of the Stop-Loss Provision
3. Future Refinements
VII. Regulations Text Corrections
VIII. Collection of Information Requirements
IX. Regulatory Impact Analysis
Regulations Text
Addenda
Acronyms
Because of the many terms to which we refer by acronym in
this final rule, we are listing the acronyms used and their
corresponding meanings in alphabetical order below:
BBRA
Medicare, Medicaid and SCHIP [State
Children’s Health Insurance Program] Balanced
Budget Refinement Act of 1999, (Pub. L. 106-113)
CBSA
Core-Based Statistical Area
CMS-1346-F 7
CCR
Cost-to-charge ratio
CAH
Critical access hospital
DSM-IV-TR Diagnostic and Statistical Manual of Mental
Disorders Fourth Edition–Text Revision
DRGs
Diagnosis-related groups
FY
Federal fiscal year (October 1 through
September 30)
ICD-9-CM International Classification of Diseases, 9th
Revision, Clinical Modification
IPFs
Inpatient psychiatric facilities
IRFs
Inpatient rehabilitation facilities
LTCHs
Long-term care hospitals
MedPAR
Medicare provider analysis and review file
RPL
Rehabilitation, Psychiatric, and Long-Term Care
RY
Rate Year (July 1 through June 30)
TEFRA
Tax Equity and Fiscal Responsibility Act of 1982,
(Pub. L. 97-248)
CMS-1346-F 8
I. Background
A. Annual Requirements for Updating the IPF PPS
In November 2004, we implemented the inpatient
psychiatric facilities (IPF) prospective payment system (PPS)
in a final rule that appeared in the November 15, 2004 Federal
Register (69 FR 66922). In developing the IPF PPS, in order
to ensure that the IPF PPS is able to account adequately for
each IPF’s case-mix, we performed an extensive regression
analysis of the relationship between the per diem costs and
certain patient and facility characteristics to determine
those characteristics associated with statistically
significant cost differences on a per diem basis. For
characteristics with statistically significant cost
differences, we used the regression coefficients of those
variables to determine the size of the corresponding payment
adjustments.
In that final rule, we explained that we believe it is
important to delay updating the adjustment factors derived
from the regression analysis until we have IPF PPS data that
includes as much information as possible regarding the
patient-level characteristics of the population that each IPF
serves. Therefore, we indicated that we did not intend to
update the regression analysis and recalculate the Federal per
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diem base rate and the patient- and facility-level adjustments
until we complete that analysis. Until that analysis is
complete, we stated our intention to publish a notice in the
Federal Register each spring to update the IPF PPS
(71 FR 27041). However, in this final rule, we are changing
the payment rate update period to a rate year (RY) that
coincides with a fiscal year (FY) update. Therefore, future
update notices will be published in the Federal Register in
the summer. We discuss this change in more detail in
section III of this final rule.
Updates to the IPF PPS as specified in 42 CFR §412.428
include the following:
(cid:129) A description of the methodology and data used to
calculate the updated Federal per diem base payment amount.
(cid:129) The rate of increase factor as described in
§412.424(a)(2)(iii), which is based on the Excluded Hospital
With Capital market basket under the update methodology of
section 1886(b)(3)(B)(ii) of the Social Security Act (the Act)
for each year (effective from the implementation period until
June 30, 2006).
(cid:129) For discharges occurring on or after July 1, 2006, the
rate of increase factor for the Federal portion of the IPF’s
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payment, which is based on the Rehabilitation, Psychiatric,
and Long-Term Care (RPL) market basket.
(cid:129) The best available hospital wage index and information
regarding whether an adjustment to the Federal per diem base
rate is needed to maintain budget neutrality.
(cid:129) Updates to the fixed dollar loss threshold amount in
order to maintain the appropriate outlier percentage.
(cid:129) Description of the International Classification of
Diseases, 9th Revision, Clinical Modification (ICD-9-CM) coding
and diagnosis-related groups (DRGs) classification changes
discussed in the annual update to the hospital inpatient
prospective payment system (IPPS) regulations.
(cid:129) Update to the electroconvulsive therapy (ECT) payment
by a factor specified by CMS.
(cid:129) Update to the national urban and rural cost-to-charge
ratio medians and ceilings.
(cid:129) Update to the cost of living adjustment factors for
IPFs located in Alaska and Hawaii, if appropriate.
Our most recent IPF PPS annual update occurred in the
April 30, 2010 Federal Register notice (75 FR 23106)
(hereinafter referred to as the April 2010 IPF PPS notice)
that set forth updates to the IPF PPS payment rates for
RY 2011. This notice updated the IPF PPS per diem payment
CMS-1346-F 11
rates that were published in the May 2009 IPF PPS notice in
accordance with our established policies.
Since implementation of the IPF PPS, we have explained
that we believe it is important to delay updating the
adjustment factors derived from the regression analysis until
we have IPF PPS data that include as much information as
possible regarding the patient-level characteristics of the
population that each IPF serves. Since we are now
approximately 5 years into the system, we believe that we have
enough data to begin that process. Therefore, we have begun
the necessary analysis in order to make future refinements.
While we did not propose to make refinements in this
rulemaking, as explained in section V.D.3 below, we
believe that in the next rulemaking, for FY 2013, we will be
ready to propose potential refinements.
B. Overview of the Legislative Requirements of the IPF PPS
Section 124 of the Medicare, Medicaid, and SCHIP (State
Children’s Health Insurance Program) Balanced Budget
Refinement Act of 1999 (BBRA) (Pub. L. 106-113) required
implementation of the IPF PPS. Specifically, section 124 of
the BBRA mandated that the Secretary develop a per diem PPS
for inpatient hospital services furnished in psychiatric
hospitals and psychiatric units that includes an adequate
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patient classification system that reflects the differences in
patient resource use and costs among psychiatric hospitals and
psychiatric units.
Section 405(g)(2) of the Medicare Prescription Drug,
Improvement, and Modernization Act of 2003 (MMA) (Pub. L.
108-173) extended the IPF PPS to distinct part psychiatric
units of critical access hospitals (CAHs).
To implement these provisions, we published various
proposed and final rules in the Federal Register. For more
information regarding these rules, see the CMS website
http://www.cms.hhs.gov/InpatientPsychFacilPPS/ .
Section 3401(f) of the Patient Protection and Affordable
Care Act (Pub. L. 111-148) as amended by section 10319(e) of
that Act and by section 1105(d) of the Health Care and
Education Reconciliation Act of 2010 (Pub. L. 111-152)
(hereafter referred to as “The Affordable Care Act”) added
subsection (s) to section 1886 of the Act.
Section 1886(s)(1) is titled “Reference to Establishment
and Implementation of System” and it refers to section 124 of
the Medicare, Medicaid, and SCHIP Balanced Budget Refinement
Act of 1999, which relates to the establishment of the IPF
PPS.
CMS-1346-F 13
Section 1886(s)(2)(A)(i) of the Act requires the
application of the productivity adjustment described in
section 1886(b)(3)(B)(xi)(II) of the Act to the IPF PPS for
the RY beginning in 2012 and each subsequent RY. Section
1886(s)(2)(A)(ii) of the Act requires the application of an
“other adjustment” that reduces any update to an IPF PPS base
rate by percentages specified in section 1886(s)(3) of the Act
for rate years beginning in 2010 through the RY beginning in
2019. For the RY beginning in 2011, the reduction is 0.25
percentage point. We are implementing that provision for RY
2012 in this RY 2012 IPF PPS final rule.
Section 1886(s)(4) of the Act requires the establishment
of a quality data reporting program for the IPF PPS beginning
in RY 2014.
C. General Overview of the IPF PPS
The November 2004 IPF PPS final rule (69 FR 66922)
established the IPF PPS, as authorized under section 124 of
the BBRA and codified at subpart N of part 412 of the Medicare
regulations. The November 2004 IPF PPS final rule set forth
the per diem Federal rates for the implementation year (the
18-month period from January 1, 2005 through June 30, 2006),
and it provided payment for the inpatient operating and
capital costs to IPFs for covered psychiatric services they
CMS-1346-F 14
furnish (that is, routine, ancillary, and capital costs, but
not costs of approved educational activities, bad debts, and
other services or items that are outside the scope of the IPF
PPS). Covered psychiatric services include services for which
benefits are provided under the fee-for-service Part A
(Hospital Insurance Program) Medicare program.
The IPF PPS established the Federal per diem base rate
for each patient day in an IPF derived from the national
average daily routine operating, ancillary, and capital costs
in IPFs in FY 2002. The average per diem cost was updated to
the midpoint of the first year under the IPF PPS, standardized
to account for the overall positive effects of the IPF PPS
payment adjustments, and adjusted for budget neutrality.
The Federal per diem payment under the IPF PPS is
comprised of the Federal per diem base rate described above
and certain patient- and facility-level payment adjustments
that were found in the regression analysis to be associated
with statistically significant per diem cost differences.
The patient-level adjustments include age, DRG
assignment, comorbidities, and variable per diem adjustments
to reflect higher per diem costs in the early days of an IPF
stay. Facility-level adjustments include adjustments for the
IPF’s wage index, rural location, teaching status, a cost of
CMS-1346-F 15
living adjustment for IPFs located in Alaska and Hawaii, and
presence of a qualifying emergency department (ED).
The IPF PPS provides additional payment policies for:
outlier cases; stop-loss protection (which was applicable only
during the IPF PPS transition period); interrupted stays; and
a per treatment adjustment for patients who undergo ECT.
A complete discussion of the regression analysis appears
in the November 2004 IPF PPS final rule (69 FR 66933 through
66936).
Section 124 of BBRA does not specify an annual update
rate strategy for the IPF PPS and is broadly written to give
the Secretary discretion in establishing an update
methodology. Therefore, in the November 2004 IPF PPS final
rule, we implemented the IPF PPS using the following update
strategy:
• Calculate the final Federal per diem base rate to be
budget neutral for the 18-month period of January 1, 2005
through June 30, 2006.
• Use a July 1 through June 30 annual update cycle.
• Allow the IPF PPS first update to be effective for
discharges on or after July 1, 2006 through June 30, 2007.
CMS-1346-F 16
D. Transition Period for Implementation of the IPF PPS
In the November 2004 IPF PPS final rule, we provided for
a 3-year transition period. During this 3-year transition
period, an IPF’s total payment under the PPS was based on an
increasing percentage of the Federal rate with a corresponding
decreasing percentage of the IPF PPS payment that is based on
reasonable cost concepts. However, effective for cost
reporting periods beginning on or after January 1, 2008, IPF
PPS payments are based on 100 percent of the Federal rate.
II. Provisions of the Proposed Rule and Responses to Public
Comments
On January 27, 2011, we published a proposed rule that
appeared in the Federal Register (76 FR 4998) entitled,
“Inpatient Psychiatric Facilities Prospective Payment System –
Update for Rate Year Beginning July 1, 2011 (RY 2012).” The
January 2011 proposed rule (hereinafter referred to as the
RY 2012 IPF PPS proposed rule) set forth the proposed annual
update to the proposed PPS for IPFs for discharges occurring
during the RY beginning July 1, 2011.
In addition to the annual rate update, we proposed to —
• Switch the annual update period for the IPF PPS from a RY
that begins on July 1 and goes through June 30 to one that
coincides with a FY, that is, that begins on October 1 and
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goes through September 30. For the update period that begins
in 2012, that is, FY 2013, we would refer to the update
period as a FY. In order to make this switch, we proposed
that RY 2012 be a 15-month period, from July 1, 2011 through
September 30, 2012.
• Rebase and revise the FY 2002-based RPL market basket to
a FY 2008-based RPL market basket. Apply a 0.25 percentage
point reduction to the market basket update as required by
section 1886(s)(3)of the Act.
• Adopt IPF policies similar to such IPPS graduate medical
education (GME) policies providing for temporary adjustments
to an IPF’s FTE cap to reflect residents added due to the
closure of an IPF or an IPF’s residency training program.
• Update the fixed dollar loss threshold amount in order to
maintain the appropriate outlier percentage.
• Update the ECT adjustment by a factor specified by CMS.
• Update the national urban and rural cost-to-charge ratio
medians and ceilings.
• Update the cost of living adjustment factors for IPFs
located in Alaska and Hawaii, if appropriate.
• Describe the ICD-9-CM and MS-DRG classification changes
discussed in the annual update to the hospital inpatient
prospective payment system regulations.
CMS-1346-F 18
• Use the best available hospital wage index and
information regarding whether an adjustment to the Federal per
diem base rate is needed to maintain budget neutrality.
• Retain the 17 percent adjustment for IPFs located in
rural areas, the 1.31 adjustment for IPFs with a qualifying
ED, the 0.5150 teaching adjustment to the Federal per diem
rate, and the MS-DRG adjustment factor currently being paid to
IPFs for RY 2011.
• Update the MS-DRG listing and comorbidity categories to
reflect the ICD-9-CM revisions effective October 1, 2010.
In addition, we proposed to make clarifying changes to
the regulations text. We noted that these proposed changes
would not impact policy.
We provided for a 60 day comment period on the RY 2012
IPF PPS proposed rule. We received 12 public comments from
hospital associations and psychiatric hospitals and units. In
general, many of the commenters strongly supported our
proposed policy changes, including changes to the payment rate
update cycle and the teaching policy. A few commenters
expressed concern regarding the proposed decrease in the
labor-related share. Several commenters recommended that we
explore the creation of an inpatient rehabilitation and
psychiatric facilities (RP) market basket. Summaries of the
CMS-1346-F 19
public comments received and our responses to those comments
are provided in the appropriate sections in the preamble of
this final rule.
III. Changing the IPF PPS Payment Rate Update Period from a
Rate Year to a Fiscal Year
In the RY 2012 IPF PPS proposed rule, we proposed to
change the current period for the annual updates of the IPF
PPS Federal payment rates. Specifically, we proposed to
revise the IPF PPS payment rate update period by switching
from a RY that begins on July 1 and goes through June 30 to a
period that coincides with a FY, that is, October 1 through
September 30. We proposed to refer to the update period as a
FY beginning with the update period that begins in 2012, that
is, FY 2013. We specified that this change in the annual
update period would allow us to consolidate Medicare
publications by aligning the IPF PPS update with the annual
update of the ICD-9-CM codes, which are effective on
October 1 of each year. Currently, in addition to our annual
proposed and final rulemaking documents, we publish a change
request transmittal every August updating the ICD-9-CM codes
related to the DRG and comorbidity adjustments. By proposing
to align the IPF PPS with the same update period as the
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ICD-9-CM codes, we aimed to eliminate the need to publish a
transmittal off-cycle.
We maintain the same diagnostic coding and DRG
classification for IPFs that are used under the IPPS for
providing the psychiatric care. When the IPF PPS was
implemented, we adopted the same diagnostic code set and DRG
patient classification systems (that is, the CMS DRGs) that
were utilized at the time under the hospital IPPS. Every
year, changes to the ICD-9-CM coding system are addressed in
the IPPS proposed and final rules. These changes are
effective October 1 of each year and must be used by acute
care hospitals as well as other providers to report diagnostic
and procedure information. The IPF PPS has always
incorporated ICD-9-CM coding changes made in the annual IPPS
update. This proposed change to the annual payment rate
update period would allow the annual update to the rates and
the ICD-9-CM coding update to occur on the same schedule and
appear in the same Federal Register document.
Our intent in making the change in the payment rate
update schedule is to place the IPF PPS on the same update
cycle as other PPSs, making it administratively efficient. In
order to smoothly transition to a payment update period that
runs from October 1 through September 30, we proposed that the
CMS-1346-F 21
RY 2012 period run from July 1, 2011 to September 30, 2012
such that RY 2012 would be 15 months. As proposed and for
this final rule, after RY 2012, the rate update period for the
IPF PPS payment rates and other policy changes will begin on
October 1 and go through September 30. The next update to the
IPF PPS rates after RY 2012 would be the FY 2013 update cycle,
which will begin on October 1, 2012 and go through
September 30, 2013. In addition, we proposed to make a change
to the regulations at §412.402 to add the term “IPF
Prospective Payment System Rate Year” which would mean
October 1 through September 30. We proposed that the RY would
be referred to as a FY. For a discussion of the proposed
15-month market basket update for the proposed 2012 RY, we
refer readers to the RY 2012 IPF PPS proposed rule
(76 FR 4998).
Public comments and our responses on the switch from a RY
to a FY are summarized below.
Comment: A few commenters supported moving the payment
rate update period from a RY to a FY. They supported a 15-
month update for RY 2012 in order to transition to a FY update
period.
CMS-1346-F 22
Response: We appreciate the commenters’ support to move
the IPF PPS payment rate update period to a period that begins
on October 1 and goes through the following September, with a
15-month update for RY 2012 in order to transition to a FY.
We are adopting as final, without modification, the proposal
to revise the IPF PPS payment period to a FY with a 15-month
update for RY 2012 in order to transition to a FY update
period.
Final Rule Action: In summary, for RY 2012, we are
revising the IPF PPS payment rate update period by switching
the RY period from July 1 through June 30 to a period that
coincides with a FY. In order to transition to a FY update
period, RY 2012 is a 15-month period. We are also making a
change to §412.402 to add the term “IPF Prospective Payment
System Rate Year” which means October 1 through September 30
will be referred to as a Fiscal year.
IV. Rebasing and Revising of the Rehabilitation, Psychiatric,
and Long-Term Care (RPL) Market Basket for Inpatient
Psychiatric Facilities
A. Background
The input price index (that is, the market basket) that
was used to develop the IPF PPS was the Excluded Hospital with
Capital market basket. This market basket was based on 1997
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Medicare cost report data and included data for Medicare
participating IPFs, inpatient rehabilitation facilities
(IRFs), long-term care hospitals (LTCHs), cancer hospitals,
and children’s hospitals. Although “market basket”
technically describes the mix of goods and services used in
providing hospital care, this term is also commonly used to
denote the input price index (that is, cost category weights
and price proxies combined) derived from that market basket.
Accordingly, the term “market basket” as used in this document
refers to a hospital input price index.
Beginning with the May 2006 IPF PPS final rule
(71 FR 27046 through 27054), IPF PPS payments were updated
using a FY 2002-based market basket reflecting the operating
and capital cost structures for IRFs, IPFs, and LTCHs
(hereafter referred to as the Rehabilitation, Psychiatric, and
Long-Term Care (RPL) market basket).
We excluded cancer and children’s hospitals from the RPL
market basket because these hospitals are not reimbursed
through a PPS; rather, their payments are based entirely on
reasonable costs subject to rate-of-increase limits
established under the authority of section 1886(b) of the Act,
which are implemented in regulations at §413.40. Moreover,
the FY 2002 cost structures for cancer and children’s
CMS-1346-F 24
hospitals are noticeably different than the cost structures of
the IRFs, IPFs, and LTCHs. A complete discussion of the FY
2002-based RPL market basket appears in the May 2006 IPF PPS
final rule (71 FR 27046 through 27054).
In the May 1, 2009 IPF PPS notice (74 FR 20362), we
expressed our interest in exploring the possibility of
creating a stand-alone IPF market basket that reflects the
cost structures of only IPF providers. We noted that, of the
available options, one would be to join the Medicare cost
report data from freestanding IPF providers (presently
incorporated into the FY 2002-based RPL market basket) with
data from hospital-based IPF providers. We indicated that an
examination of the Medicare cost report data comparing
freestanding and hospital-based IPFs revealed considerable
differences between the two with respect to cost levels and
cost structures. At that time, we were unable to fully
understand the differences between these two types of IPF
providers. As a result, we felt that further research was
required and we solicited public comment for additional
information that might help us to better understand the
reasons for the variations in costs and cost structures, as
indicated by the cost report data, between freestanding and
hospital-based IPFs (74 FR 20376).
CMS-1346-F 25
We summarized the public comments we received and our
responses in the April 2010 IPF PPS notice (75 FR 23111
through 23113). Despite receiving comments from the public on
this issue, we remain unable to sufficiently understand the
observed differences in costs and cost structures between
hospital-based and freestanding IPFs, and therefore we do not
feel it is appropriate at this time to incorporate data from
hospital-based IPFs with those of freestanding IPFs to create
a stand-alone IPF market basket.
Although we do not feel it would be appropriate to
propose a stand-alone IPF market basket, we are currently
exploring the viability of creating two separate market
baskets from the current RPL, one of which would include
freestanding IPFs and freestanding IRFs and would be used to
update payments under both the IPF and IRF payment systems.
The other would be a stand-alone LTCH market basket.
Depending on the outcome of our research, we anticipate the
possibility of proposing a rehabilitation and psychiatric (RP)
market basket in the next update cycle. In the RY 2012 IPF
PPS proposed rule, we welcomed public comment on the
possibility of using this type of market basket to update IPF
payments in the future.
CMS-1346-F 26
For this update cycle, we proposed to rebase and revise
the FY 2002-based RPL market basket by creating a proposed FY
2008-based RPL market basket. For this RY 2012 IPF PPS final
rule, we are finalizing the FY 2008-based RPL market basket as
proposed. In the following section, we provide an overview of
the market basket and describe the methodologies we proposed
to use, and are finalizing in this final rule, for purposes of
determining the operating and capital portions of the FY
2008-based RPL market basket.
Public comments and our responses on the rebasing and
revising of the RPL market basket for IPFs are summarized
below.
Comment: One commenter, while generally supporting use
of the RPL market basket at the time of implementation, stated
that it has its limitations, and recommended that CMS explore
the creation of an RP market basket. Several commenters
supported CMS’ efforts to determine if a separate market
basket for inpatient psychiatric and rehabilitation facilities
is appropriate.
Response: CMS will continue its efforts to investigate
the viability of an alternative market basket to update IPF
providers. Any possible changes to the market basket used to
CMS-1346-F 27
update IPF payments would appear in a future rulemaking and be
subject to public comment.
Comment: Several commenters expressed concern regarding
a recent trend in facility closures of hospital-based IPFs and
stated that hospital-based IPF facilities are a vital
component in preserving access to care for patients suffering
from mental illness, particularly those who have coexisting
physical conditions or experience a crisis and enter the
emergency department for treatment. Therefore, the commenters
recommended that CMS continue exploring reasons behind the
differences in costs and cost structures between freestanding
and hospital-based providers.
Response: We are continuing to analyze the Medicare cost
report data in order to better understand the differences
between freestanding and hospital-based IPF providers.
B. Overview of the FY 2008-Based RPL Market Basket
The FY 2008-based RPL market basket is a fixed weight,
Laspeyres-type price index. A Laspeyres price index measures
the change in price, over time, of the same mix of goods and
services purchased in the base period. Any changes in the
quantity or mix of goods and services (that is, intensity)
purchased over time are not measured.
CMS-1346-F 28
The index itself is constructed in three steps. First, a
base period is selected (in this final rule, the base period
is FY 2008) and total base period expenditures are estimated
for a set of mutually exclusive and exhaustive spending
categories with the proportion of total costs that each
category represents being calculated. These proportions are
called cost or expenditure weights. Second, each expenditure
category is matched to an appropriate price or wage variable,
referred to as a price proxy. In nearly every instance, these
price proxies are derived from publicly available statistical
series that are published on a consistent schedule (preferably
at least on a quarterly basis). Finally, the expenditure
weight for each cost category is multiplied by the level of
its respective price proxy. The sum of these products (that
is, the expenditure weights multiplied by their price levels)
for all cost categories yields the composite index level of
the market basket in a given period. Repeating this step for
other periods produces a series of market basket levels over
time. Dividing an index level for a given period by an index
level for an earlier period produces a rate of growth in the
input price index over that timeframe.
As noted above, the market basket is described as a
fixed-weight index because it represents the change in price
CMS-1346-F 29
over time of a constant mix (quantity and intensity) of goods
and services needed to furnish hospital services. The effects
on total expenditures resulting from changes in the mix of
goods and services purchased subsequent to the base period are
not measured. For example, a hospital hiring more nurses to
accommodate the needs of patients would increase the volume of
goods and services purchased by the hospital, but would not be
factored into the price change measured by a fixed-weight
hospital market basket. Only when the index is rebased would
changes in the quantity and intensity be captured, with those
changes being reflected in the cost weights. Therefore, we
rebase the market basket periodically so the cost weights
reflect recent changes in the mix of goods and services that
hospitals purchase (hospital inputs) to furnish inpatient care
between base periods.
C. Rebasing and Revising of the RPL Market Basket
In the RY 2012 IPF PPS proposed rule, we proposed to
rebase and revise the market basket used to update the IPF
PPS. We solicited public comments on our proposed
methodological changes to the RPL market basket. We did not
receive any specific comments on these proposed changes.
Therefore, we are finalizing the methodology for calculating
CMS-1346-F 30
the rebased and revised FY 2008-based market basket as
proposed. The methodology is described in more detail below.
The terms “rebasing” and “revising,” while often used
interchangeably, actually denote different activities.
“Rebasing” means moving the base year for the structure of
costs of an input price index (for example, in this final
rule, we are shifting the base year cost structure for the RPL
market basket from FY 2002 to FY 2008). “Revising” means
changing data sources, price proxies, or methods, used to
derive the input price index.
1. Development of Cost Categories and Weights
a. Medicare Cost Reports
As proposed, and in this final rule, the FY 2008-based
RPL market basket consists of several major cost categories
derived from the FY 2008 Medicare cost reports for
freestanding IRFs, freestanding IPFs, and LTCHs, including
wages and salaries, pharmaceuticals, professional liability
insurance, capital, and a residual. These FY 2008 cost
reports include providers whose cost reporting periods began
on or after October 1, 2007 and before October 1, 2008. We
choose to use FY 2008 as the base year because we believe that
the Medicare cost reports for this year represent the most
recent, complete set of Medicare cost report data available
CMS-1346-F 31
for IRFs, IPFs, and LTCHs. However, for the FY 2008 cost
reports, IRFs, IPFs, and LTCHs were not required to complete
the Medicare cost report worksheet for benefits and contract
labor (Worksheet S-3, part II). As a result, less than 30
percent of providers reported data for these categories, and
we do not expect these FY 2008 data to improve over time.
Furthermore, the issue of incomplete Medicare cost report data
for benefits and contract labor also existed when we finalized
the FY 2002-based RPL market basket, since, at that time,
IRFs, IPFs and LTCHs were not required to submit data for
Worksheet S-3, part II in the FY 2002 cost reporting year.
Due to the incomplete benefits and contract labor data for
IRFs, IPFs, and LTCHs, for these cost weights, rather than
using IRF/IPF/LTCH cost report data, we instead used FY 2008
IPPS hospital cost report data (similar to the method that was
used for the FY 2002-based RPL market basket). Additional
detail is provided later in this section.
Since our goal is to measure cost shares that are
reflective of case mix and practice patterns associated with
providing services to Medicare beneficiaries, we limited our
selection of Medicare cost reports to those from hospitals
that have a Medicare average length of stay (LOS) that is
within a comparable range of their total facility average LOS.
CMS-1346-F 32
We believe this provides a more accurate reflection of the
structure of costs for Medicare covered days. We used the
cost reports of IRFs and LTCHs with Medicare average LOS
within 15 percent (that is, 15 percent higher or lower) of the
total facility average LOS for the hospital. This is the same
edit applied to derive the FY 2002-based RPL market basket and
generally includes those LTCHs and IRFs with Medicare LOS
within approximately 5 days of the facility average LOS of the
hospital.
We used a less stringent measure of Medicare LOS for
IPFs. For this provider-type, and in order to produce a
robust sample size, we used those facilities’ Medicare cost
reports whose average LOS is within 30 or 50 percent
(depending on the total facility average LOS) of the total
facility average LOS. This is the same edit applied to derive
the FY 2002-based RPL market basket.
We applied these LOS edits to first obtain a set of cost
reports for facilities that have a Medicare LOS within a
comparable range of their total facility LOS. Using this set
of Medicare cost reports, we then calculated cost weights for
four cost categories directly from the FY 2008 Medicare cost
reports for freestanding IRFs, freestanding IPFs, and LTCHs
(found in Table 1 below). These Medicare cost report cost
CMS-1346-F 33
weights were then supplemented with information obtained from
other data sources (explained in more detail below) to derive
the final FY 2008-based RPL market basket cost weights.
Table 1—Major Cost Categories and Their Respective Cost
Weights as Calculated Directly from FY 2008 Medicare Cost
Reports
Major Cost Categories
Wages and salaries
Professional Liability Insurance (Malpractice)
Pharmaceuticals
Capital
All other
b. Other Data Sources
FY 2008-Based RPL Market
Basket
(Percent)
47.371
0.764
6.514
8.392
36.959
In addition to the IRF, IPF and LTCH Medicare cost
reports for freestanding IRFs and freestanding IPFs, and
LTCHs, the other data sources we used to develop the
FY 2008-based RPL market basket cost weights were the FY 2008
IPPS Medicare cost reports and the 2002 Benchmark Input-Output
(I-O) Tables created by the Bureau of Economic Analysis (BEA),
U.S. Department of Commerce. The FY 2008 Medicare cost
reports include providers whose cost reporting periods began
on or after October 1, 2007 and before October 1, 2008.
As noted above, the FY 2008-based RPL cost weights for
benefits and contract labor were derived using FY 2008-based
IPPS Medicare cost reports. We used these Medicare cost
reports to calculate cost weights for Wages and Salaries,
CMS-1346-F 34
Benefits, and Contract Labor for IPPS hospitals for FY 2008.
For the Benefits cost weight for the FY 2008-based RPL market
basket, the ratio of the FY 2008 IPPS Benefits cost weight to
the FY 2008 IPPS Wages and Salaries cost weight was applied to
the RPL Wages and Salaries cost weight. Similarly, the ratio
of the FY 2008 IPPS Contract Labor cost weight to the FY 2008
IPPS Wages and Salaries cost weight was applied to the RPL
Wages and Salaries cost weight to derive a Contract Labor cost
weight for the FY 2008-based RPL market basket.
The All Other cost category is divided into other
hospital expenditure category shares using the 2002 BEA
Benchmark I-O data following the removal of the portions of
the All Other cost category provided in Table 1 that are
attributable to Benefits and Contract Labor. The BEA
Benchmark I-O data are scheduled for publication every 5
years. The most recent data available are for 2002. BEA also
produces Annual I-O estimates; however, the 2002 Benchmark I-O
data represent a much more comprehensive and complete set of
data that are derived from the 2002 Economic Census. The
Annual I-O is simply an update of the Benchmark I-O tables.
For the FY 2002-based RPL market basket, we used the 1997
Benchmark I-O data. Therefore, we used the 2002 Benchmark I-O
data in the FY 2008-based RPL market basket, and instead of
CMS-1346-F 35
using the less detailed Annual I-O data, we aged the 2002
Benchmark I-O data forward to 2008. The methodology we used
to age the data forward involves applying the annual price
changes from the respective price proxies to the appropriate
cost categories. We repeated this practice for each year.
The All Other cost category expenditure shares are
determined as being equal to each category’s proportion to
total “all other” in the aged 2002 Benchmark I-O data. For
instance, if the cost for telephone services represented 10
percent of the sum of the “all other” Benchmark I-O hospital
expenditures, then telephone services would represent
10 percent of the RPL market basket’s All Other cost category.
2. Final Cost Category Computation
As stated previously, for this rebasing we used the FY
2008 Medicare cost reports for IRFs, IPFs, and LTCHs to derive
four major cost categories. The FY 2008-based RPL market
basket includes two additional cost categories that were not
broken out separately in the FY 2002-based RPL market basket:
“Administrative and Business Support Services” and “Financial
Services”. The inclusion of these two additional cost
categories, which are derived using the Benchmark I-O data, is
consistent with the addition of these two cost categories to
the FY 2006-based IPPS market basket (74 FR 43845). We chose
CMS-1346-F 36
to break out both categories so we can better match their
respective expenses with more appropriate price proxies.
Also, the FY 2008-based RPL market basket excludes one cost
category: Photo Supplies. The 2002 Benchmark I-O weight for
this category is considerably smaller than the 1997 Benchmark
I-O weight, presently accounting for less than one-tenth of
one percentage point of the RPL market basket. Therefore, we
included the photo supplies costs in the Chemical cost
category weight with other similar chemical products.
We did not change our definition of the labor-related
share. However, we renamed our aggregate cost categories from
“labor-intensive” and “nonlabor-intensive” services to “labor-
related” and “nonlabor-related” services. This is consistent
with the FY 2006-based IPPS market basket (74 FR 43845). As
discussed in more detail below and similar to the FY
2002-based RPL market basket, we classify a cost category as
labor-related and include it in the labor-related share if the
cost category is defined as being labor-intensive and its cost
varies with the local labor market. In previous regulations,
we grouped cost categories that met both of these criteria
into labor-intensive services. We believe the new labels more
accurately reflect the concepts that they are intended to
convey. Therefore, we did not change our definition of the
CMS-1346-F 37
labor-related share because we continue to classify a cost
category as labor-related if the costs are labor-intensive and
vary with the local labor market.
3. Selection of Price Proxies
After computing the FY 2008 cost weights for the rebased
RPL market basket, it was necessary to select appropriate wage
and price proxies to reflect the rate of price change for each
expenditure category. With the exception of the proxy for
Professional Liability Insurance, all of the proxies for the
operating portion of the FY 2008-based RPL market basket are
based on Bureau of Labor Statistics (BLS) data and are grouped
into one of the following BLS categories:
Producer Price Indexes–Producer Price Indexes (PPIs)
measure price changes for goods sold in markets other than the
retail market. PPIs are preferable price proxies for goods
and services that hospitals purchase as inputs because these
PPIs better reflect the actual price changes faced by
hospitals. For example, we use a special PPI for prescription
drugs, rather than the Consumer Price Index (CPI) for
prescription drugs, because hospitals generally purchase drugs
directly from a wholesaler. The PPIs that we use measure
price changes at the final stage of production.
CMS-1346-F 38
Consumer Price Indexes–Consumer Price Indexes (CPIs)
measure change in the prices of final goods and services
bought by the typical consumer. Because they may not
represent the price faced by a producer, we used CPIs only if
an appropriate PPI was not available, or if the expenditures
were more similar to those faced by retail consumers in
general rather than by purchasers of goods at the wholesale
level. For example, the CPI for food purchased away from home
is used as a proxy for contracted food services.
Employment Cost Indexes–Employment Cost Indexes (ECIs)
measure the rate of change in employee wage rates and employer
costs for employee benefits per hour worked. These indexes
are fixed-weight indexes and strictly measure the change in
wage rates and employee benefits per hour. Appropriately,
they are not affected by shifts in employment mix.
We evaluated the price proxies using the criteria of
reliability, timeliness, availability, and relevance.
Reliability indicates that the index is based on valid
statistical methods and has low sampling variability.
Timeliness implies that the proxy is published regularly,
preferably at least once a quarter. Availability means that
the proxy is publicly available. Finally, relevance means
that the proxy is applicable and representative of the cost
CMS-1346-F 39
category weight to which it is applied. The CPIs, PPIs, and
ECIs selected meet these criteria.
Table 2 sets forth the final FY 2008-based RPL market
basket including cost categories, and their respective weights
and price proxies. For comparison purposes, the corresponding
FY 2002-based RPL market basket cost weights are listed, as
well. For example, Wages and Salaries are 49.447 percent of
total costs in the FY 2008-based RPL market basket compared to
52.895 percent for the FY 2002-based RPL market basket.
Employee Benefits are 12.831 percent in the FY 2008-based RPL
market basket compared to 12.982 percent for the FY 2002-based
RPL market basket. As a result, compensation costs (Wages and
Salaries plus Employee Benefits) for the FY 2008-based RPL
market basket are 62.278 percent of total costs compared to
65.877 percent for the FY 2002-based RPL market basket.
Following Table 2 is a summary outlining the choice of
the proxies used for the operating portion of the FY 2008-
based RPL market basket. The price proxies used for the
capital portion are described in more detail in the capital
methodology section (see section IV.c.4 of this final rule).
We note that the proxies for the operating portion of the
FY 2008-based RPL market basket are the same as those used for
the FY 2006-based IPPS operating market basket. Because these
CMS-1346-F 40
proxies meet our criteria of reliability, timeliness,
availability, and relevance, we believe they are the best
measures of price changes for the cost categories. For
further discussion on the FY 2006-based IPPS market basket,
see the IPPS final rule published in the Federal Register on
August 27, 2009 (74 FR 43843).
Table 2—FY 2008-Based RPL Market Basket Cost Categories,
Weights, and Price Proxies with FY 2002-Based RPL Market
Basket Cost Weights Included for Comparison
FY
2002-Based
RPL Market
Basket Cost
Weights
65.877
52.895
Cost Categories
1. Compensation
A. Wages and Salaries1
FY
2008-Based
RPL Market
Basket Cost
Weights
62.278
49.447
FY 2008-Based RPL Market
Basket Price Proxies
—
ECI for Wages and Salaries,
Civilian Hospital Workers
ECI for Benefits, Civilian
Hospital Workers
—
PPI for Commercial Electric
Power
PPI for Petroleum Refineries
CPI-U for Water & Sewerage
Maintenance
CMS Hospital Professional
Liability Insurance
Premium Index
—
—
PPI for Pharmaceutical
Preparations for Human
Use(Prescriptions)
PPI for Processed Foods &
Feeds
CPI-U for Food Away From
Home
B. Employee Benefits1
12.982
12.831
2. Utilities
A. Electricity
B. Fuel, Oil, and Gasoline
C. Water and Sewage
3. Professional Liability
Insurance
4. All Other Products and
Services
A. All Other Products
(1.) Pharmaceuticals
(2.) Food: Direct Purchases
(3.) Food: Contract Services
0.656
0.351
0.108
0.197
1.161
22.158
13.325
5.103
0.873
0.620
1.578
1.125
0.371
0.082
0.764
26.988
15.574
6.514
2.959
0.392
CMS-1346-F 41
FY
2002-Based
RPL Market
Basket Cost
Weights
1.100
1.014
FY
2008-Based
RPL Market
Basket Cost
Weights
1.100
1.795
0.096
1.052
1.000
0.207
0.297
1.963
8.833
5.111
2.892
n/a
2.219
3.722
n/a
n/a
0.240
0.682
2.800
10.149
6.187
4.250
—
1.131
1.021
0.210
0.106
0.346
11.414
4.681
2.114
0.422
2.145
6.733
4.211
0.853
0.416
0.630
0.623
8.392
5.519
3.286
FY 2008-Based RPL Market
Basket Price Proxies
Blend of Chemical PPIs
PPI for Medical, Surgical, and
Personal Aid Devices
—
PPI for Rubber & Plastic
Products
PPI for Converted Paper &
Paperboard Products
PPI for Apparel
PPI for Machinery & Equipment
PPI for Finished Goods less
Food and Energy
—
—
ECI for Compensation for
Professional and Related
Occupations
ECI for Compensation for Office
and Administrative Services
ECI for Compensation for
Private Service Occupations
—
ECI for Compensation for
Professional and Related
Occupations
ECI for Compensation for
Financial Activities
CPI-U for Telephone Services
CPI-U for Postage
CPI-U for All Items less Food
and Energy
—
—
BEA chained price index for
nonresidential construction for
hospitals and special care
facilities—vintage weighted (26
years)
Cost Categories
(4.) Chemicals2
(5.) Medical Instruments
(6.) Photographic Supplies
(7.) Rubber and Plastics
(8.) Paper and Printing
Products
(9.) Apparel
(10.) Machinery and
Equipment
(11.) Miscellaneous Products
B. All Other Services
(1.) Labor-related Services
(a.) Professional Fees: Labor-
related3
(b.) Administrative and
Business Support Services4
(c.) All Other: Labor-Related
Services4
(2.) Nonlabor-Related
Services
(a.) Professional Fees:
Nonlabor-Related3
(b.) Financial Services 5
(c.) Telephone Services
(d.) Postage
(e.) All Other: Nonlabor-
Related Services5
5. Capital-Related Costs
A. Depreciation
(1.) Fixed Assets
CMS-1346-F 42
Cost Categories
(2.) Movable Equipment
FY
2002-Based
RPL Market
Basket Cost
Weights
1.937
FY
2008-Based
RPL Market
Basket Cost
Weights
2.233
B. Interest Costs
(1.) Government/Nonprofit
2.775
2.081
1.954
0.653
(2.) For Profit
0.694
1.301
FY 2008-Based RPL Market
Basket Price Proxies
PPI for Machinery and
Equipment—vintage weighted
(11 years).
—
Average yield on domestic
municipal bonds (Bond Buyer 20
bonds)—vintage-weighted (26
years)
Average yield on Moody’s Aaa
bonds—vintage-weighted (26
years)
CPI–U for Residential Rent
—
1.187
0.919
C. Other Capital-Related
Costs
Total
100.000
100.000
Note: Detail may not add to total due to rounding.
1Contract Labor is distributed to Wages and Salaries and Employee Benefits
based on the share of total compensation that each category represents.
2To proxy the Chemicals cost category, we used a blended PPI composed of the
PPI for Industrial Gases, the PPI for Other Basic Inorganic Chemical
Manufacturing, the PPI for Other Basic Organic Chemical Manufacturing, and the
PPI for Soap and Cleaning Compound Manufacturing. For more detail about this
proxy, see section IV.C.3.j. of the preamble of this final rule.
3The Professional Fees: Labor-related and Professional Fees: Nonlabor-related
cost categories were included in one cost category called Professional Fees in
the FY 2002-based RPL market basket. For more detail about how these new
categories were derived, we refer readers to sections IV.C.6. of the preamble
of this final rule, on the labor-related share.
4The Administrative and Business Support Services cost category was contained
within All Other: Labor-intensive Services cost category in the FY 2002-based
RPL market basket. The All Other: Labor-intensive Services cost category is
renamed the All Other: Labor-related Services cost category for the FY 2008-
based RPL market basket.
5The Financial Services cost category was contained within the All Other: Non-
labor Intensive Services cost category in the FY 2002-based RPL market basket.
The All Other: Non-labor Intensive Services cost category is renamed the All
Other: Nonlabor-related Services cost category for the FY 2008-based RPL
market basket.
a. Wages and Salaries
We use the ECI for Wages and Salaries for Hospital
Workers (All Civilian) (BLS series code CIU1026220000000I) to
measure the price growth of this cost category. This same
proxy was used in the FY 2002-based RPL market basket.
CMS-1346-F 43
b. Employee Benefits
We use the ECI for Employee Benefits for Hospital Workers
(All Civilian) to measure the price growth of this cost
category. This same proxy was used in the FY 2002-based RPL
market basket.
c. Electricity
We use the PPI for Commercial Electric Power (BLS series
code WPU0542) to measure the price growth of this cost
category. This same proxy was used in the FY 2002-based RPL
market basket.
d. Fuel, Oil, and Gasoline
For the FY 2002-based RPL market basket, this category
only included expenses classified under North American
Industry Classification System (NAICS) 21 (Mining). We
proxied this category using the PPI for Commercial Natural Gas
(BLS series code WPU0552). For the FY 2008-based market
basket, we added costs to this category that had previously
been grouped in other categories. The added costs include
petroleum-related expenses under NAICS 324110 (previously
captured in the miscellaneous category), as well as
petrochemical manufacturing classified under NAICS 325110
(previously captured in the chemicals category). These added
costs represent 80 percent of the hospital industry’s fuel,
CMS-1346-F 44
oil, and gasoline expenses (or 80 percent of this category).
Because the majority of the industry’s fuel, oil, and gasoline
expenses originate from petroleum refineries (NAICS 324110),
we use the PPI for Petroleum Refineries (BLS series code
PCU324110324110) as the proxy for this cost category.
e. Water and Sewage
We use the CPI for Water and Sewerage Maintenance (All
Urban Consumers) (BLS series code CUUR0000SEHG01) to measure
the price growth of this cost category. This same proxy was
used in the FY 2002-based RPL market basket.
f. Professional Liability Insurance
We proxy price changes in hospital professional liability
insurance premiums (PLI) using percentage changes as estimated
by the CMS Hospital Professional Liability Index. To generate
these estimates, we collect commercial insurance premiums for
a fixed level of coverage while holding nonprice factors
constant (such as a change in the level of coverage). This
method is also used to proxy PLI price changes in the Medicare
Economic Index (75 FR 73268). This same proxy was used in the
FY 2002-based RPL market basket.
g. Pharmaceuticals
We use the PPI for Pharmaceuticals for Human Use,
Prescription (BLS series code WPUSI07003) to measure the price
CMS-1346-F 45
growth of this cost category. We note that we are not making
a change to the PPI that is used to proxy this cost category.
There was a recent change to the BLS naming convention for
this series; however this is the same proxy that was used in
the FY 2002-based RPL market basket.
h. Food: Direct Purchases
We use the PPI for Processed Foods and Feeds (BLS series
code WPU02) to measure the price growth of this cost category.
This same proxy was used in the FY 2002-based RPL market
basket.
i. Food: Contract Services
We use the CPI for Food Away From Home (All Urban
Consumers) (BLS series code CUUR0000SEFV) to measure the price
growth of this cost category. This same proxy was used in the
FY 2002-based RPL market basket.
j. Chemicals
We use a blended PPI composed of the PPI for Industrial
Gas Manufacturing (NAICS 325120) (BLS series code
PCU325120325120P), the PPI for Other Basic Inorganic Chemical
Manufacturing (NAICS 325180) (BLS series code PCU32518-32518-
), the PPI for Other Basic Organic Chemical Manufacturing
(NAICS 325190) (BLS series code PCU32519-32519-), and the PPI
for Soap and Cleaning Compound Manufacturing (NAICS 325610)
CMS-1346-F 46
(BLS series code PCU32561-32561-). Using the 2002 Benchmark
I-O data, we found that these NAICS industries accounted for
approximately 90 percent of the hospital industry’s chemical
expenses.
Therefore, we use this blended index because we believe
its composition better reflects the composition of the
purchasing patterns of hospitals than does the PPI for
Industrial Chemicals (BLS series code WPU061), the proxy used
in the FY 2002-based RPL market basket. Table 3 below shows
the weights for each of the four PPIs used to create the
blended PPI, which we determined using the 2002 Benchmark I-O
data.
Table 3—Blended Chemical PPI Weights
Name
PPI for Industrial Gas Manufacturing
PPI for Other Basic Inorganic Chemical Manufacturing
PPI for Other Basic Organic Chemical Manufacturing
PPI for Soap and Cleaning Compound Manufacturing
k. Medical Instruments
Weights
(in
percent)
35%
25%
30%
10%
NAICS
325120
325180
325190
325610
We use the PPI for Medical, Surgical, and Personal Aid
Devices (BLS series code WPU156) to measure the price growth
of this cost category. In the 1997 Benchmark I-O data,
approximately half of the expenses classified in this category
were for surgical and medical instruments. Therefore, we used
CMS-1346-F 47
the PPI for Surgical and Medical Instruments and Equipment
(BLS series code WPU1562) to proxy this category in the FY
2002-based RPL market basket. The 2002 Benchmark I-O data
show that surgical and medical instruments now represent only
33 percent of these expenses and that the largest expense
category is surgical appliance and supplies manufacturing
(corresponding to BLS series code WPU1563). Due to this
reallocation of costs over time, we use as the price proxy for
this cost category the more aggregated PPI for Medical,
Surgical, and Personal Aid Devices.
l. Photographic Supplies
We eliminated the cost category specific to photographic
supplies for the FY 2008-based RPL market basket. These costs
are now included in the Chemicals cost category because the
costs are presently reported as all other chemical products.
Notably, although we are eliminating the specific cost
category, these costs are still accounted for within the RPL
market basket.
m. Rubber and Plastics
We use the PPI for Rubber and Plastic Products (BLS
series code WPU07) to measure price growth of this cost
category. This same proxy was used in the FY 2002-based RPL
market basket.
CMS-1346-F 48
n. Paper and Printing Products
We use the PPI for Converted Paper and Paperboard
Products (BLS series code WPU0915) to measure the price growth
of this cost category. This same proxy was used in the FY
2002-based RPL market basket.
o. Apparel
We use the PPI for Apparel (BLS series code WPU0381) to
measure the price growth of this cost category. This same
proxy was used in the FY 2002-based RPL market basket.
p. Machinery and Equipment
We use the PPI for Machinery and Equipment (BLS series
code WPU11) to measure the price growth of this cost category.
This same proxy was used in the FY 2002-based RPL market
basket.
q. Miscellaneous Products
We use the PPI for Finished Goods Less Food and Energy
(BLS series code WPUSOP3500) to measure the price growth of
this cost category. Using this index removes the double-
counting of food and energy prices, which are already captured
elsewhere in the market basket. This same proxy was used in
the FY 2002-based RPL market basket.
CMS-1346-F 49
r. Professional Fees: Labor-Related
We use the ECI for Compensation for Professional and
Related Occupations (Private Industry) (BLS series code
CIS2020000120000I) to measure the price growth of this
category. It includes occupations such as legal, accounting,
and engineering services. This same proxy was used in the FY
2002-based RPL market basket.
s. Administrative and Business Support Services
We use the ECI for Compensation for Office and
Administrative Support Services (Private Industry) (BLS series
code CIU2010000220000I) to measure the price growth of this
category. Previously these costs were included in the All
Other: Labor-intensive category (now renamed the All Other:
Labor-related Services category), and were proxied by the ECI
for Compensation for Service Occupations. We believe that
this compensation index better reflects the changing price of
labor associated with the provision of administrative services
and its incorporation represents a technical improvement to
the market basket.
t. All Other: Labor-Related Services
We use the ECI for Compensation for Service Occupations
(Private Industry) (BLS series code CIU2010000300000I) to
CMS-1346-F 50
measure the price growth of this cost category. This same
proxy was used in the FY 2002-based RPL market basket.
u. Professional Fees: Nonlabor-Related
We use the ECI for Compensation for Professional and
Related Occupations (Private Industry) (BLS series code
CIS2020000120000I) to measure the price growth of this
category. This is the same price proxy that we are using for
the Professional Fees: Labor-related cost category.
v. Financial Services
We use the ECI for Compensation for Financial Activities
(Private Industry) (BLS series code CIU201520A000000I) to
measure the price growth of this cost category. Previously
these costs were included in the All Other: Nonlabor-intensive
category (now renamed the All Other: Nonlabor-related Services
category), and were proxied by the CPI for All Items. We
believe that this compensation index better reflects the
changing price of labor associated with the provision of
financial services and its incorporation represents a
technical improvement to the market basket.
w. Telephone Services
We use the CPI for Telephone Services (BLS series code
CUUR0000SEED) to measure the price growth of this cost
CMS-1346-F 51
category. This same proxy was used in the FY 2002-based RPL
market basket.
x. Postage
We use the CPI for Postage (BLS series code
CUUR0000SEEC01) to measure the price growth of this cost
category. This same proxy was used in the FY 2002-based RPL
market basket.
y. All Other: Nonlabor-Related Services
We use the CPI for All Items Less Food and Energy (BLS
series code CUUR0000SA0L1E) to measure the price growth of
this cost category. Previously these costs were proxied by
the CPI for All Items in the FY 2002-based RPL market basket.
We believe that using the CPI for All Items Less Food and
Energy removes the double counting of changes in food and
energy prices, as they are already captured elsewhere in the
market basket. Consequently, we believe that the
incorporation of this proxy represents a technical improvement
to the market basket.
4. Methodology for Capital Portion of the RPL Market Basket
In the FY 2002-based RPL market basket, we did not have
IRF, IPF, and LTCH 2002 Medicare cost report data for the
capital cost weights, due to a change in the 2002 reporting
requirements. Therefore, we used these hospitals’ 2001
CMS-1346-F 52
expenditure data for the capital cost categories of
depreciation, interest, and other capital expenses, and aged
the data to a 2002 base year using relevant price proxies.
For the FY 2008-based RPL market basket, we calculated
weights for the RPL market basket capital costs using the same
set of FY 2008 Medicare cost reports used to develop the
operating share for IRFs, IPFs, and LTCHs. To calculate the
total capital cost weight, we first apply the same LOS edits
as applied prior to calculating the operating cost weights as
described above in section IV.C.3. The resulting capital
weight for the FY 2008 base year is 8.392 percent.
Lease expenses are unique in that they are not broken out
as a separate cost category in the RPL market basket, but
rather are proportionally distributed amongst the cost
categories of Depreciation, Interest, and Other, reflecting
the assumption that the underlying cost structure of leases is
similar to that of capital costs in general. As was done in
the FY 2002-based RPL market basket, we first assumed 10
percent of lease expenses represents overhead and assigned
those costs to the Other Capital-Related Costs category
accordingly. The remaining lease expenses were distributed
across the three cost categories based on the respective
CMS-1346-F 53
weights of depreciation, interest, and other capital not
including lease expenses.
Depreciation contains two subcategories: (1) Building &
Fixed Equipment; and (2) Movable Equipment. The apportionment
between building & fixed equipment and movable equipment was
determined using the FY 2008 Medicare cost reports for
freestanding IRFs, IPFs, and LTCHs. This methodology was also
used to compute the apportionment used in the FY 2002-based
RPL market basket (70 FR 47912).
The total Interest expense cost category is split between
government/nonprofit interest and for-profit interest. The FY
2002-based RPL market basket allocated 75 percent of the total
Interest cost weight to government/nonprofit interest and
proxied that category by the average yield on domestic
municipal bonds. The remaining 25 percent of the Interest
cost weight was allocated to for-profit interest and was
proxied by the average yield on Moody’s Aaa bonds
(70 FR 47912). This was based on the FY 2002-based IPPS
capital input price index (70 FR 23406) due to insufficient
Medicare cost report data for IPFs, IRFs, and LTCHs. For the
FY 2008-based RPL market basket, we derived the split using
the relative FY 2008 Medicare cost report data on interest
expenses for government/nonprofit and for-profit IRFs, IPFs,
CMS-1346-F 54
and LTCHs. Based on these data, we calculated a 33/67 split
between government/nonprofit and for-profit interest. We
believe it is important that this split reflects the latest
relative cost structure of interest expenses for RPL
providers. As stated above, we first apply the LOS edits (as
described in section IV.C.3.) prior to calculating this split.
Therefore, we are using Medicare cost reports that are
reflective of case mix and practice patterns associated with
providing services to Medicare beneficiaries. Using data
specific to government/nonprofit and for-profit IRFs, IPFs,
and LTCHs as well as the application of these LOS edits are
the primary reasons for the difference in this split relative
to the FY 2002-based RPL market basket.
Because capital is acquired and paid for over time,
capital expenses in any given year are determined by both past
and present purchases of physical and financial capital. The
vintage-weighted capital portion of the FY 2008-based RPL
market basket is intended to capture the long-term consumption
of capital, using vintage weights for depreciation (physical
capital) and interest (financial capital). These vintage
weights reflect the proportion of capital purchases
attributable to each year of the expected life of building &
fixed equipment, movable equipment, and interest. We use the
CMS-1346-F 55
vintage weights to compute vintage-weighted price changes
associated with depreciation and interest expense.
Vintage weights are an integral part of the FY 2008-based
RPL market basket. Capital costs are inherently complicated
and are determined by complex capital purchasing decisions,
over time, based on such factors as interest rates and debt
financing. In addition, capital is depreciated over time
instead of being consumed in the same period it is purchased.
The capital portion of the FY 2008-based RPL market basket
would reflect the annual price changes associated with capital
costs, and would be a useful simplification of the actual
capital investment process. By accounting for the vintage
nature of capital, we are able to provide an accurate and
stable annual measure of price changes. Annual nonvintage
price changes for capital are unstable due to the volatility
of interest rate changes and, therefore, do not reflect the
actual annual price changes for Medicare capital-related
costs. The capital component of the FY 2008-based RPL market
basket would reflect the underlying stability of the capital
acquisition process and provides hospitals with the ability to
plan for changes in capital payments.
To calculate the vintage weights for depreciation and
interest expenses, we needed a time series of capital
CMS-1346-F 56
purchases for building & fixed equipment and movable
equipment. We found no single source that provides a uniquely
best time series of capital purchases by hospitals for all of
the above components of capital purchases. The early Medicare
cost reports did not have sufficient capital data to meet this
need. Data we obtained from the American Hospital Association
(AHA) do not include annual capital purchases. However, AHA
does provide a consistent database back to 1963. We used data
from the AHA Panel Survey and the AHA Annual Survey to obtain
a time series of total expenses for hospitals. We then used
data from the AHA Panel Survey supplemented with the ratio of
depreciation to total hospital expenses obtained from the
Medicare cost reports to derive a trend of annual depreciation
expenses for 1963 through 2008.
In order to estimate capital purchases using data on
depreciation expenses, the expected life for each cost
category (building & fixed equipment, movable equipment, and
interest) is needed to calculate vintage weights. For the FY
2002-based RPL market basket, due to insufficient Medicare
cost report data for IRFs, IPFs, and LTCHs, we used 2001
Medicare Cost Reports for IPPS hospitals to determine the
expected life of building & fixed equipment and movable
equipment (70 FR 47913). The FY 2002-based RPL market basket
CMS-1346-F 57
was based on an expected life of building & fixed equipment of
23 years. It used 11 years as the expected life for movable
equipment. We believed that this data source reflected the
latest relative cost structure of depreciation expenses for
hospitals at the time and was analogous to IRFs, IPFs, and
LTCHs.
The expected life of any piece of equipment can be
determined by dividing the value of the asset (excluding fully
depreciated assets) by its current year depreciation amount.
This calculation yields the estimated useful life of an asset
if depreciation were to continue at current year levels,
assuming straight-line depreciation. Following a similar
method to what was applied for the FY 2002-based RPL market
basket, we use an expected life of building & fixed equipment
equal to 26 years, and an expected life of movable equipment
of 11 years for the FY 2008-based RPL market basket. These
expected lives are calculated using FY 2008 Medicare cost
reports for IPPS hospitals since we are currently unable to
obtain robust measures of the expected lives for building &
fixed equipment and movable equipment using the Medicare cost
reports from IRFs, IPFs, and LTCHs.
We used the building & fixed equipment and movable
equipment weights derived from FY 2008 Medicare cost reports
CMS-1346-F 58
for IRFs, IPFs, and LTCHs to separate the depreciation
expenses into annual amounts of building & fixed equipment
depreciation and movable equipment depreciation. Year-end
asset costs for building & fixed equipment and movable
equipment were determined by multiplying the annual
depreciation amounts by the expected life calculations. We
then calculated a time series, back to 1963, of annual capital
purchases by subtracting the previous year asset costs from
the current year asset costs. From this capital purchase time
series, we were able to calculate the vintage weights for
building & fixed equipment and for movable equipment. Each of
these sets of vintage weights is explained in more detail
below.
For the building & fixed equipment vintage weights, we
used the real annual capital purchase amounts for building &
fixed equipment to capture the actual amount of the physical
acquisition, net of the effect of price inflation. This real
annual purchase amount for building & fixed equipment was
produced by deflating the nominal annual purchase amount by
the building & fixed equipment price proxy, BEA’s chained
price index for nonresidential construction for hospitals and
special care facilities. Because building & fixed equipment
have an expected life of 26 years, the vintage weights for
CMS-1346-F 59
building & fixed equipment are deemed to represent the average
purchase pattern of building & fixed equipment over 26-year
periods. With real building & fixed equipment purchase
estimates available from 2008 back to 1963, we averaged twenty
26-year periods to determine the average vintage weights for
building & fixed equipment that are representative of average
building & fixed equipment purchase patterns over time.
Vintage weights for each 26-year period are calculated by
dividing the real building & fixed capital purchase amount in
any given year by the total amount of purchases in the 26-year
period. This calculation is done for each year in the 26-year
period, and for each of the twenty 26-year periods. We used
the average of each year across the twenty 26-year periods to
determine the average building & fixed equipment vintage
weights for the FY 2008-based RPL market basket.
For the movable equipment vintage weights, the real
annual capital purchase amounts for movable equipment were
used to capture the actual amount of the physical acquisition,
net of price inflation. This real annual purchase amount for
movable equipment was calculated by deflating the nominal
annual purchase amounts by the movable equipment price proxy,
the PPI for Machinery and Equipment. This is the same proxy
used for the FY 2002-based RPL market basket. Based on our
CMS-1346-F 60
determination that movable equipment has an expected life of
11 years, the vintage weights for movable equipment represent
the average expenditure for movable equipment over an 11-year
period. With real movable equipment purchase estimates
available from 2008 back to 1963, thirty-five 11-year periods
were averaged to determine the average vintage weights for
movable equipment that are representative of average movable
equipment purchase patterns over time. Vintage weights for
each 11-year period are calculated by dividing the real
movable capital purchase amount for any given year by the
total amount of purchases in the 11-year period. This
calculation was done for each year in the 11-year period and
for each of the thirty-five 11-year periods. We used the
average of each year across the thirty-five 11-year periods to
determine the average movable equipment vintage weights for
the FY 2008-based RPL market basket.
For the interest vintage weights, the nominal annual
capital purchase amounts for total equipment (building &
fixed, and movable) were used to capture the value of the debt
instrument. Because we have determined that hospital debt
instruments have an expected life of 26 years, the vintage
weights for interest are deemed to represent the average
purchase pattern of total equipment over 26-year periods.
CMS-1346-F 61
With nominal total equipment purchase estimates available from
2008 back to 1963, twenty 26-year periods were averaged to
determine the average vintage weights for interest that are
representative of average capital purchase patterns over time.
Vintage weights for each 26-year period are calculated by
dividing the nominal total capital purchase amount for any
given year by the total amount of purchases in the 26-year
period. This calculation is done for each year in the 26-year
period and for each of the twenty 26-year periods. We used
the average of each year across the twenty 26-year periods to
determine the average interest vintage weights for the FY
2008-based RPL market basket. The vintage weights for the
capital portion of the FY 2002-based RPL market basket and the
FY 2008-based RPL market basket are presented in Table 4.
Table 4—FY 2002 and FY 2008 Vintage Weights for
Capital-Related Price Proxies
Year
1
2
3
4
5
6
7
8
9
10
11
12
13
14
Building & Fixed Equipment
FY 2008
FY 2002
26 years
23 years
0.021
0.021
0.023
0.022
0.025
0.025
0.027
0.027
0.029
0.028
0.030
0.031
0.031
0.033
0.033
0.035
0.038
0.035
0.037
0.040
0.039
0.042
0.041
0.045
0.047
0.042
0.043
0.049
Movable Equipment
FY 2008
FY 2002
11 years
11 years
0.065
0.071
0.075
0.071
0.080
0.077
0.083
0.082
0.086
0.085
0.089
0.091
0.092
0.095
0.098
0.100
0.106
0.103
0.109
0.112
0.116
0.117
—
—
—
—
—
—
Interest
FY 2008
FY 2002
26 years
23 years
0.010
0.010
0.012
0.012
0.014
0.014
0.016
0.016
0.019
0.018
0.020
0.023
0.021
0.026
0.024
0.029
0.033
0.026
0.029
0.036
0.033
0.039
0.035
0.043
0.048
0.038
0.041
0.053
CMS-1346-F 62
Year
15
16
17
18
19
20
21
22
23
24
25
26
Total
Building & Fixed Equipment
FY 2008
FY 2002
26 years
23 years
0.044
0.051
0.053
0.045
0.046
0.056
0.047
0.057
0.047
0.058
0.045
0.060
0.060
0.045
0.045
0.061
0.046
0.061
—
0.046
—
0.045
0.046
—
1.000
1.000
Movable Equipment
FY 2008
FY 2002
11 years
11 years
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
1.000
1.000
Interest
FY 2008
FY 2002
26 years
23 years
0.043
0.056
0.059
0.046
0.049
0.062
0.052
0.064
0.053
0.066
0.053
0.070
0.071
0.055
0.056
0.074
0.060
0.076
0.063
—
—
0.064
0.068
—
1.000
1.000
Note: Numbers may not add to total due to rounding.
After the capital cost category weights were computed, it
was necessary to select appropriate price proxies to reflect
the rate-of-increase for each expenditure category. As
proposed, and in this final rule, we use the same price
proxies for the capital portion of the FY 2008-based RPL
market basket that were used in the FY 2002-based RPL market
basket, with the exception of the Boeckh Construction Index.
We replaced the Boeckh Construction Index with BEA’s chained
price index for nonresidential construction for hospitals and
special care facilities. The BEA index represents
construction of facilities such as hospitals, nursing homes,
hospices, and rehabilitation centers. Although these price
indices move similarly over time, we believe that it is more
technically appropriate to use an index that is more specific
CMS-1346-F 63
to the hospital industry. We believe these are the most
appropriate proxies for hospital capital costs that meet our
selection criteria of relevance, timeliness, availability, and
reliability.
The price proxies (prior to any vintage weighting) for
each of the capital cost categories are the same as those used
for the FY 2006-based Capital Input Price Index as described
in the IPPS FY 2010 final rule (74 FR at 43857).
5. RY 2012 Market Basket Update
As proposed, and in this final rule, for RY 2012 (that
is, beginning July 1, 2011 through September 30, 2012), we
derived a 15-month estimate of the FY 2008-based RPL market
basket based on the best available data. To determine a 15-
month market basket update for RY 2012, we calculate the 5-
quarter moving average index level for July 1, 2011 through
September 30, 2012 and the 4-quarter moving average index
level for July 1, 2010 through June 30, 2011. The percent
change in these two values represents the 15-month market
basket update.
Consistent with historical practice, we estimate the RPL
market basket update for the IPF PPS based on IHS Global
Insight’s forecast using the most recent available data. IHS
Global Insight, Inc. is a nationally recognized economic and
CMS-1346-F 64
financial forecasting firm that contracts with CMS to forecast
the components of the market baskets. In the RY 2012 IPF PPS
proposed rule, we proposed a market basket update based on the
4th quarter 2010 forecast with history through the 3rd quarter
of 2010. We also proposed that if more recent data
subsequently became available (for example, a more recent
estimate of the market basket) we would use such data, if
appropriate, to determine the RY 2012 update in the final
rule. Based on IHS Global Insight’s 1st quarter 2011 forecast
with history through the 4th quarter of 2010, the projected
15-month market basket update for the 15-month RY 2012 (July
1, 2011 through September 30, 2012) is 3.2 percent.
The most recent estimate of the FY 2008-based RPL market
basket update for July 1, 2011 through June 30, 2012, based on
IHS Global Insight’s 1st quarter 2011 forecast with history
through the 4th quarter of 2010, is 2.8 percent. We
determined this 12-month market basket update by calculating
the 4-quarter moving average index level for July 1, 2011
through June 30, 2012 and the 4-quarter moving average index
level for July 1, 2010 through June 30, 2011. The percent
change in these two values represents the 12-month market
basket update. Consistent with our historical practice of
using market basket estimates based on the most recent
CMS-1346-F 65
available data, if we were not extending the 2012 IPF PPS RY
by 3 months, the market basket update for a 12-month RY 2012
would be 2.8 percent, based on the most recent estimate of the
12-month RPL market basket update for July 1, 2011 through
June 30, 2012.
Using the FY 2002-based RPL market basket and IHS Global
Insight’s 1st quarter 2011 forecast for the market basket
components, the 15-month RY 2012 update would be 3.3 percent.
The 12-month RY 2012 update would be 2.9 percent.
As proposed, for this RY 2012 IPF PPS final rule we have
determined the RY 2012 update based on the most recent market
basket estimate for the 15-month period. The current
estimates of the FY 2002-based and FY 2008-based RPL market
baskets are based on IHS Global Insight’s first quarter 2011
forecast with historical data through fourth quarter 2010.
Table 5 below compares the FY 2008-based RPL market basket and
the FY 2002-based RPL market basket percent changes.
Table 5—FY 2002-Based and FY 2008-Based RPL Market Basket
Percent Changes, RY 2006 through FY 2014
FY 2002-Based RPL
Market Basket Index
Percent Change
FY 2008-Based RPL Market
Basket Index Percent Change
Rate Year (RY) or Fiscal Year
(FY)
Historical data:
RY 20061
RY 20071
RY 20081
RY 20091
RY 20101
Average 2006-2010
3.8
3.5
3.5
3.1
2.2
3.2
3.7
3.5
3.6
3.3
2.1
3.2
CMS-1346-F 66
FY 2008-Based RPL Market
Basket Index Percent Change
Rate Year (RY) or Fiscal Year
(FY)
FY 2002-Based RPL
Market Basket Index
Percent Change
Forecast:
RY 20111
2.5
2.4
RY 20122
3.2
3.3
FY 20133
2.9
2.9
FY 20143
3.0
3.0
Average 2011-2014
2.9
2.9
1 RY 2006 through RY 2011 represent 12-month updates, which include July 1
through June 30.
2 RY 2012 represents a 15-month update, which includes July 1, 2011 through
September 30, 2012.
3 FY 2013 through FY 2014 represent 12-month updates, which include October
1 through September 30.
Note that these market basket percent changes do not include any further
adjustments as may be statutorily required.
Source: IHS Global Insight, Inc. 1st quarter 2011 forecast.
The 15-month RY 2012 market basket update using the FY
2008-based RPL market basket is 0.1 percentage point lower
than the market basket update using the FY 2002-based RPL
market basket. This is due to slightly offsetting factors.
The lower total compensation weight in the FY 2008-based RPL
market basket (62.278 percent) relative to the FY 2002-based
RPL market basket (65.877 percent), absent other factors,
would have resulted in a slightly lower market basket update
using the FY 2008-based RPL market basket. This impact,
however, is partially offset by the larger weight associated
with the Professional Fees category. In both market baskets,
these expenditures are proxied by the ECI for Compensation for
Professional and Related Services. The weight for
Professional Fees in the FY 2002-based RPL market basket is
CMS-1346-F 67
2.892 percent compared to 6.325 percent in the FY 2008-based
RPL market basket.
We did not receive any public comments on the market
basket updates in the RY 2012 IPF PPS proposed rule.
6. Labor-Related Share
As described in section VI.C.1. of this final rule, due
to the variations in costs and geographic wage levels, we
proposed that payment rates under the IPF PPS continue to be
adjusted by a geographic wage index. This wage index would
apply to the labor-related portion of the Federal per diem
base rate, hereafter referred to as the labor-related share.
The labor-related share is determined by identifying the
national average proportion of total costs that are related
to, influenced by, or vary with the local labor market. As
proposed, and for this final rule, we continue to classify a
cost category as labor-related if the costs are labor-
intensive and vary with the local labor market. Given this,
based on our definition of the labor-related share, we
proposed to include in the labor-related share the sum of the
relative importance of Wages and Salaries, Employee Benefits,
Professional Fees: Labor-related, Administrative and Business
Support Services, All Other: Labor-related Services
(previously referred to in the FY 2002-based RPL market basket
CMS-1346-F 68
as labor-intensive), and a portion of the Capital-Related cost
weight.
Consistent with previous rebasings, the All Other:
Labor-related Services cost category is mostly comprised of
building maintenance and security services (including, but not
limited to, commercial and industrial machinery and equipment
repair, nonresidential maintenance and repair, and
investigation and security services). Because these services
tend to be labor-intensive and are mostly performed at the
hospital facility (and, therefore, unlikely to be purchased in
the national market), we believe that they meet our definition
of labor-related services.
As stated in the April 2010 IPF PPS notice (75 FR 23110),
the labor-related share was defined as the sum of the relative
importance of Wages and Salaries, Fringe Benefits,
Professional Fees, Labor-intensive Services, and a portion of
the capital share from an appropriate market basket.
Therefore, to determine the labor-related share for the IPF
PPS for RY 2011, we used the FY 2002-based RPL market basket
cost weights relative importance to determine the
labor-related share for the IPF PPS.
For the proposed FY 2008-based RPL market basket
rebasing, the proposed inclusion of the Administrative and
CMS-1346-F 69
Business Support Services cost category into the labor-related
share remained consistent with the current labor-related share
because this cost category was previously included in the
Labor-intensive cost category. As previously stated, we
established a separate Administrative and Business Support
Service cost category so that we can use the ECI for
Compensation for Office and Administrative Support Services to
more precisely proxy these specific expenses.
For the FY 2002-based RPL market basket, we assumed that
all nonmedical professional services (including accounting and
auditing services, engineering services, legal services, and
management and consulting services) were purchased in the
local labor market and, therefore, all of their associated
fees varied with the local labor market. As a result, we
previously included 100 percent of these costs in the
labor-related share. In an effort to more accurately
determine the share of professional fees that should be
included in the labor-related share, we surveyed hospitals
regarding the proportion of those fees that go to companies
that are located beyond their own local labor market (the
results are discussed below).
We continue to look for ways to refine our market basket
approach to more accurately account for the proportion of
CMS-1346-F 70
costs influenced by the local labor market. To that end, we
conducted a survey of hospitals to empirically determine the
proportion of contracted professional services purchased by
the industry that are attributable to local firms and the
proportion that are purchased from national firms. We
notified the public of our intent to conduct this survey on
December 9, 2005 (70 FR 73250) and received no comments
(71 FR 8588).
With approval from the Office of Management and Budget
(OMB), we contacted a sample of IPPS hospitals and received
responses to our survey from 108 hospitals. We believe that
these data serve as an appropriate proxy for the purchasing
patterns of professional services for IPFs as they are also
institutional providers of health care services. Using data
on FTEs to allocate responding hospitals across strata (region
of the country and urban/rural status), we calculated
poststratification weights. Based on these weighted results,
we determined that hospitals purchase, on average, the
following portions of contracted professional services outside
of their local labor market:
• 34 percent of accounting and auditing services.
• 30 percent of engineering services.
• 33 percent of legal services.
CMS-1346-F 71
• 42 percent of management consulting services.
We applied each of these percentages to its respective
Benchmark I-O cost category underlying the professional fees
cost category. This is the methodology that we used to
separate the FY 2008-based RPL market basket professional fees
category into Professional Fees: Labor-related and
Professional Fees: Nonlabor-related cost categories. In
addition to the professional services listed above, we also
classified expenses under NAICS 55, Management of Companies
and Enterprises, into the Professional Fees cost category as
was done in previous rebasings. The NAICS 55 data are mostly
comprised of corporate, subsidiary, and regional managing
offices, or otherwise referred to as home offices. Formerly,
all of the expenses within this category were considered to
vary with, or be influenced by, the local labor market and
were thus included in the labor-related share. Because many
hospitals are not located in the same geographic area as their
home office, we analyzed data from a variety of sources in
order to determine what proportion of these costs should be
appropriately included in the labor-related share.
Using data primarily from the Medicare cost reports and a
CMS database of Home Office Medicare Records (HOMER) (a
database that provides city and state information (addresses)
CMS-1346-F 72
for home offices), we were able to determine that 19 percent
of the total number of freestanding IRFs, freestanding IPFs,
and LTCHs that had home offices had those home offices located
in their respective local labor markets–defined as being in
the same Metropolitan Statistical Area (MSA).
The Medicare cost report requires hospitals to report
their home office provider numbers. Using the HOMER database
to determine the home office location for each home office
provider number, we compared the location of the provider with
the location of the hospital’s home office. We then placed
providers into one of the following three groups:
• Group 1–Provider and home office are located in
different States.
• Group 2–Provider and home office are located in the
same State and same city.
• Group 3–Provider and home office are located in the
same State and different city.
We found that 63 percent of the providers with home
offices were classified into Group 1 (that is, different
State) and, thus, these providers were determined to not be
located in the same local labor market as their home office.
Although there were a very limited number of exceptions (that
CMS-1346-F 73
is, providers located in different States but the same MSA as
their home office), the 63 percent estimate was unchanged.
We found that 9 percent of all providers with home
offices were classified into Group 2 (that is, same State and
same city and, therefore, the same MSA). Consequently, these
providers were determined to be located in the same local
labor market as their home offices.
We found that 27 percent of all providers with home
offices were classified into Group 3 (that is, same State and
different city). Using data from the Census Bureau to
determine the specific MSA for both the provider and its home
office, we found that 10 percent of all providers with home
offices were identified as being in the same State, a
different city, but the same MSA.
Pooling these results, we were able to determine that
approximately 19 percent of providers with home offices had
home offices located within their local labor market (that is,
9 percent of providers with home offices had their home
offices in the same State and city (and, thus, the same MSA),
and 10 percent of providers with home offices had their home
offices in the same State, a different city, but the same
MSA). We proposed to apportion the NAICS 55 expense data by
this percentage. Thus, we proposed to classify 19 percent of
CMS-1346-F 74
these costs into the Professional Fees: Labor-related cost
category and the remaining 81 percent into the Professional
Fees: Nonlabor-related Services cost category.
We received several comments on our proposal to revise
the labor-related share. These comments and our responses are
provided below.
Comment: One commenter recommended that CMS move
forward with this proposal, and stated a belief that the
labor-related share has been overstated in the past, resulting
in reduced payments to facilities in areas with low wage
indices.
Response: We thank the commenter for this comment. We
believe comments on prior years’ labor-related shares would
have been addressed in those rulemakings.
Comment: Several commenters objected to the proposed
change in the treatment of professional fees in the
calculation of the labor-related share, and recommended
maintaining the current methodology. One commenter questioned
the sample size (108 hospitals) for estimating the allocation
of professional fees. Several commenters believed that
professional services, whether purchased within or outside the
local labor market, are substitutes for hospital-employed
staff and should be included as labor costs.
CMS-1346-F 75
Response: We disagree with the request to reject the
proposed change in the calculation of the labor-related share.
A method that distributes professional fees based on empirical
research and data represents a technical improvement to the
construction of the market basket, where previously all
professional fees were assumed to vary with the local labor
market. In response to the concern about the sample of 108
hospitals, we provided more detail on that survey conducted
below. We note that these same survey results were used in
the IPPS market basket rebasing for the FY 2010 IPPS final
rule (74 FR 43853).
The survey’s methods unfolded in the following manner:
Through an independent contractor, a small sample of 12
hospitals were initially pre-tested in order to ensure the
understandability of the survey questions. The survey
prompted sample institutions to select from multiple choice
answers the proportions of their professional fees that are
purchased from firms located outside of their respective local
labor market. The multiple choice answers for each type of
professional service included the following options: 0 percent
of fees; 1–20 percent of fees; 21-40 percent of fees; 41–60
percent of fees; 61–80 percent of fees; 81–99 percent of fees;
and 100 percent of fees. All respondents were assured that
CMS-1346-F 76
the information they provided would be kept strictly
confidential.
Understanding that larger, urban-based hospitals (and
those located in areas with area wage indexes greater than
1.0) are most likely to be impacted by the survey’s results,
we used data on full-time equivalents (FTEs) to represent the
sizes of hospitals and selected hospitals with probability
proportional to their sizes across strata when drawing the
full sample. Strata were formed by Census Region and
Urban/Rural Status. The distributions of the hospital
population, as well as weighted distributions for the
responders, by Urban/Rural Status (including data on hospital
size) and Census Region were as follows:
Total
Total Rurals
Total Urbans
Total Northeast Region
Total Mid-West Region
Total South Region
Total West Region
All hospitals
percent distribution
& average FTE size
100%/994
30%/388
70%/1,255
15%/1,442
23%/1,062
42%/843
20%/899
Responding
hospitals percent
distribution &
average FTE size
100%/1,156
25%/449
75%/1,460
20%/1,078
24%/1,656
37%/944
19%/1,081
Sample weights were calculated as the inverse of the
selection probability and were subsequently adjusted for
nonresponse bias by strata and post-stratified to derive final
CMS-1346-F 77
weights. This type of application represents a common survey
approach and is based on valid and widely-accepted statistical
techniques.
For the estimates of the nationwide proportion of
nonmedical professional services fees purchased outside of the
local labor market, we first examined the data on multiple
levels. First, we found that fewer than 30 percent of the
responding hospitals paid 100 percent of their professional
fees to vendors located within their local labor market.
Conversely, we found that roughly 20 percent of responding
hospitals reported 81 percent or more of their professional
services fees are paid to vendors located outside of their
local labor market.
In determining the specific and appropriate proportions
of professional fees to consider labor-related and
nonlabor-related, we generated weighted averages from the data
in the following manner:
• For any multiple choice answer where the standard error
associated with the weighted counts for that answer was less
than 30 percent, we multiplied the weighted counts associated
with that answer by the midpoint of the range within that
answer. For example, for Accounting and Auditing services, if
a weighted count of 500 hospitals responded that they pay ‘‘1
CMS-1346-F 78
to 20 percent’’ of their professional fees for these services
to firms located outside of their local labor market, we would
multiply 500 times 10 percent. We repeat this for each
possible multiple choice answer.
• For any multiple choice answer where the standard error
associated with the weighted counts for that answer exceeded
30 percent, we multiplied the weighted hospital counts by the
low point of the range. Using a similar example as above, if
a weighted count of 300 hospitals responded that they pay ‘‘1
to 20 percent’’ of their professional fees for these services
to firms located outside of their local labor market, and the
standard error on that estimate was greater than 30 percent,
we would multiply 300 times 1 percent.
• After applying one of these two techniques to each
answer, dependent on its associated standard error, we took a
weighted average of the results to determine the final
proportion to be excluded from the labor-related share for
each of the four types of professional services surveyed.
Given the information provided above, we believe that the
estimates based on this survey are valid. In response to the
commenters’ statement that professional services should be
included as labor-related costs no matter where they are
purchased, we again note that the purpose of the labor-related
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share is to determine the national average proportion of total
costs that are related to, influenced by, or vary with the
local labor market. We define the labor-related share as not
only those expenses that are labor-intensive but those that
also vary with, or are influenced by, the local labor market.
By application of this definition, it is relevant where these
professional services are purchased. To the extent these
services are not purchased in the local labor market, they are
not included in the labor-related share.
After consideration of the public comments received, in
this final rule we are finalizing our methodology for
calculating the labor-related share for RY 2012. Using the
same methodology that was proposed in the RY 2012 IPF PPS
proposed rule, we calculated a labor-related share for RY 2012
using the most recent data available at the time of this final
rule. This estimate of the RY 2012 labor-related share is
based on IHS Global Insight Inc.’s first quarter 2011
forecast, which is the same forecast used to derive the
RY 2012 market basket update.
Table 6 below shows the RY 2012 relative importance
labor-related share using the FY 2008-based RPL market basket
and the FY 2002-based RPL market basket.
CMS-1346-F 80
Table 6—Comparison of the RY 2011 (12-month) Relative
Importance Labor-Related Share based on the FY 2002-Based RPL
Market Basket and the RY 2012 (15-month) Relative Importance
Labor-Related Share based on the FY 2008-Based RPL Market
Basket
Final RY 2012
Relative Importance
Labor-Related
Share2
RY 2011 Relative
Importance Labor-
Related Share1
52.600
13.935
2.853
Wages and Salaries
Employee Benefits
Professional Fees: Labor-Related
Administrative and Business
Support Services
All Other: Labor-Related Services
Subtotal
Labor-Related Portion of Capital Costs
3.894
3.649
(46%)
Total Labor-Related Share
70.317
75.400
1. Published in the RY 2011 IPF PPS notice (75FR 23110-23111) and based on the IHS Global Insight, Inc.
first quarter 2010 forecast of the 2002-based RPL market basket..
2. Based on IHS Global Insight, Inc. first quarter 2011 forecast of the 2008-based RPL market basket.
The labor-related share for RY 2012 is the sum of the RY
—
2.118
71.506
49.049
13.036
2.073
0.416
2.094
66.668
2012 relative importance of each labor-related cost category,
and would reflect the different rates of price change for
these cost categories between the base year (FY 2008) and RY
2012. The sum of the relative importance for RY 2012 for
operating costs (Wages and Salaries, Employee Benefits,
Professional Fees: Labor-Related, Administrative and Business
Support Services, and All Other: Labor-related Services) is
66.668 percent, as shown in Table 6 above. The portion of
Capital that is influenced by the local labor market is
estimated to be 46 percent, which is the same percentage
CMS-1346-F 81
applied to the FY 2002-based RPL market basket. Since the
relative importance for Capital-Related Costs is 7.932 percent
of the FY 2008-based RPL market basket in RY 2012, we take 46
percent of 7.932 percent to determine the labor-related share
of Capital for RY 2012. The result is 3.649 percent, which we
add to 66.668 percent for the operating cost amount to
determine the total labor-related share for RY 2012.
Therefore, the labor-related share for the IPF PPS in RY 2012
is 70.317 percent. This labor-related share is determined
using the same methodology as employed in calculating all
previous IPF labor-related shares (69 FR 66952). The wage
index and the labor-related share are reflected in budget
neutrality adjustments.
V. Updates to the IPF PPS for RY Beginning July 1, 2011
The IPF PPS is based on a standardized Federal per diem
base rate calculated from IPF average per diem costs and
adjusted for budget-neutrality in the implementation year.
The Federal per diem base rate is used as the standard payment
per day under the IPF PPS and is adjusted by the patient- and
facility-level adjustments that are applicable to the IPF
stay. A detailed explanation of how we calculated the average
per diem cost appears in the November 2004 IPF PPS final rule
(69 FR 66926).
CMS-1346-F 82
A. Determining the Standardized Budget-Neutral Federal Per
Diem Base Rate
Section 124(a)(1) of the BBRA requires that we implement
the IPF PPS in a budget neutral manner. In other words, the
amount of total payments under the IPF PPS, including any
payment adjustments, must be projected to be equal to the
amount of total payments that would have been made if the IPF
PPS were not implemented. Therefore, we calculated the
budget-neutrality factor by setting the total estimated IPF
PPS payments to be equal to the total estimated payments that
would have been made under the Tax Equity and Fiscal
Responsibility Act of 1982 (TEFRA) (Pub. L. 97-248)
methodology had the IPF PPS not been implemented.
Under the IPF PPS methodology, we calculated the final
Federal per diem base rate to be budget neutral during the IPF
PPS implementation period (that is, the 18-month period from
January 1, 2005 through June 30, 2006) using a July 1 update
cycle. We updated the average cost per day to the midpoint of
the IPF PPS implementation period (that is, October 1, 2005),
and this amount was used in the payment model to establish the
budget-neutrality adjustment.
CMS-1346-F 83
A step-by-step description of the methodology used to
estimate payments under the TEFRA payment system appears in
the November 2004 IPF PPS final rule (69 FR 66926).
1. Standardization of the Federal Per Diem Base Rate and
Electroconvulsive Therapy (ECT) Rate
In the November 2004 IPF PPS final rule, we describe how
we standardized the IPF PPS Federal per diem base rate in
order to account for the overall positive effects of the IPF
PPS payment adjustment factors. To standardize the IPF PPS
payments, we compared the IPF PPS payment amounts calculated
from the FY 2002 Medicare Provider Analysis and Review
(MedPAR) file to the projected TEFRA payments from the FY 2002
cost report file updated to the midpoint of the IPF PPS
implementation period (that is, October 2005). The
standardization factor was calculated by dividing total
estimated payments under the TEFRA payment system by estimated
payments under the IPF PPS. The standardization factor was
calculated to be 0.8367.
As described in detail in the May 2006 IPF PPS final rule
(71 FR 27045), in reviewing the methodology used to simulate
the IPF PPS payments used for the November 2004 IPF PPS final
rule, we discovered that due to a computer code error, total
IPF PPS payments were underestimated by about 1.36 percent.
CMS-1346-F 84
Since the IPF PPS payment total should have been larger than
the estimated figure, the standardization factor should have
been smaller (0.8254 vs. 0.8367). In turn, the Federal per
diem base rate and the ECT rate should have been reduced by
0.8254 instead of 0.8367.
To resolve this issue, in RY 2007, we amended the Federal
per diem base rate and the ECT payment rate prospectively.
Using the standardization factor of 0.8254, the average cost
per day was effectively reduced by 17.46 percent (100 percent
minus 82.54 percent = 17.46 percent).
2. Calculation of the Budget Neutrality Adjustment
To compute the budget neutrality adjustment for the IPF
PPS, we separately identified each component of the
adjustment, that is, the outlier adjustment, stop-loss
adjustment, and behavioral offset.
A complete discussion of how we calculate each component
of the budget neutrality adjustment appears in the November
2004 IPF PPS final rule (69 FR 66932 through 66933) and in the
May 2006 IPF PPS final rule (71 FR 27044 through 27046).
a. Outlier Adjustment
Since the IPF PPS payment amount for each IPF includes
applicable outlier amounts, we reduced the standardized
Federal per diem base rate to account for aggregate IPF PPS
CMS-1346-F 85
payments estimated to be made as outlier payments. The
outlier adjustment was calculated to be 2 percent. As a
result, the standardized Federal per diem base rate was
reduced by 2 percent to account for projected outlier
payments.
b. Stop-Loss Provision Adjustment
As explained in the November 2004 IPF PPS final rule, we
provided a stop-loss payment during the transition from
cost-based reimbursement to the per diem payment system to
ensure that an IPF’s total PPS payments were no less than a
minimum percentage of their TEFRA payment, had the IPF PPS not
been implemented. We reduced the standardized Federal per
diem base rate by the percentage of aggregate IPF PPS payments
estimated to be made for stop-loss payments. As a result, the
standardized Federal per diem base rate was reduced by 0.39
percent to account for stop-loss payments. Since the
transition was completed in RY 2009, the stop-loss provision
is no longer applicable, and for cost reporting periods
beginning on or after January 1, 2008, IPFs were paid 100
percent PPS.
c. Behavioral Offset
As explained in the November 2004 IPF PPS final rule,
implementation of the IPF PPS may result in certain changes in
CMS-1346-F 86
IPF practices, especially with respect to coding for comorbid
medical conditions. As a result, Medicare may make higher
payments than assumed in our calculations. Accounting for
these effects through an adjustment is commonly known as a
behavioral offset.
Based on accepted actuarial practices and consistent with
the assumptions made in other PPSs, we assumed in determining
the behavioral offset that IPFs would regain 15 percent of
potential “losses” and augment payment increases by 5 percent.
We applied this actuarial assumption, which is based on our
historical experience with new payment systems, to the
estimated “losses” and “gains” among the IPFs. The behavioral
offset for the IPF PPS was calculated to be 2.66 percent. As
a result, we reduced the standardized Federal per diem base
rate by 2.66 percent to account for behavioral changes. As
indicated in the November 2004 IPF PPS final rule, we do not
plan to change adjustment factors or projections until we
analyze IPF PPS data.
If we find that an adjustment is warranted, the percent
difference may be applied prospectively to the established PPS
rates to ensure the rates accurately reflect the payment level
intended by the statute. In conducting this analysis, we will
be interested in the extent to which improved coding of
CMS-1346-F 87
patients’ principal and other diagnoses, which may not reflect
real increases in underlying resource demands, has occurred
under the PPS.
B. Update of the Federal Per Diem Base Rate and
Electroconvulsive Therapy Rate
As described in the November 2004 IPF PPS final rule
(69 FR 66931), the average per diem cost was updated to the
midpoint of the implementation year. This updated average per
diem cost of $724.43 was reduced by 17.46 percent to account
for standardization to projected TEFRA payments for the
implementation period, by 2 percent to account for outlier
payments, by 0.39 percent to account for stop-loss payments,
and by 2.66 percent to account for the behavioral offset. The
Federal per diem base rate in the implementation year was
$575.95. The increase in the per diem base rate for RY 2009
included the 0.39 percent increase due to the removal of the
stop-loss provision. We indicated in the November 2004 IPF
PPS final rule (69 FR 66932) that we would remove this 0.39
percent reduction to the Federal per diem base rate after the
transition. As discussed in section IV.D.2. of the May 2008
IPF PPS notice, we increased the Federal per diem base rate
and the ECT base rate by 0.39 percent in RY 2009. Therefore
CMS-1346-F 88
for RY 2009 and beyond, the stop-loss provision has ended and
is no longer a part of budget neutrality.
In accordance with section 1886(s)(2)(A)(ii) of the Act,
which requires the application of an “other adjustment,”
described in section 1886(s)(3) of the Act (specifically,
section 1886(s)(3)(A) for RYs 2011 and 2012) that reduces the
update to the IPF PPS base rate for the RY beginning in
Calendar Year (CY) 2011, we are adjusting the IPF PPS update
by a 0.25 percentage point reduction for RY 2012. For this
final rule, we are applying the 15-month 2008-based RPL market
basket increase for RY 2012 of 3.2 percent, as adjusted by the
“other adjustment” of -0.25 percentage point, and the wage
index budget neutrality factor of 0.9995 to the RY 2011
Federal per diem base rate of $665.71 yielding a Federal per
diem base rate of $685.01 for RY 2012. Similarly, we are
applying the market basket increase, as adjusted by the “other
adjustment”, and the wage index budget neutrality factor to
the RY 2011 ECT base rate, yielding an ECT base rate of
$294.91 for RY 2012.
Final Rule Action: In summary, for the RY 2012, we
received no public comments concerning the “other adjustment”;
therefore, we will apply the 15-month FY 2008-based RPL market
basket increase of 3.2 percent with the “other adjustment” of
CMS-1346-F 89
-0.25 percent and the wage index budget neutrality factor to
the RY 2011 ECT and Federal per diem base rates to yield the
RY 2012 ECT base rate of $294.91 and Federal per diem base
rate of $685.01.
VI. Update of the IPF PPS Adjustment Factors
A. Overview of the IPF PPS Adjustment Factors
The IPF PPS payment adjustments were derived from a
regression analysis of 100 percent of the FY 2002 MedPAR data
file, which contained 483,038 cases. For the proposed rule,
we used the same results of the regression analysis used to
implement the November 2004 IPF PPS final rule. For a more
detailed description of the data file used for the regression
analysis, see the November 2004 IPF PPS final rule
(69 FR 66935 through 66936). While we have since used more
recent claims data to set the fixed dollar loss threshold
amount, we used the same results of this regression analysis
to update the IPF PPS for RY 2011 and we proposed to use these
same results for RY 2012. Now that we are approximately 5
years into the IPF PPS, we believe that we have enough data to
begin looking at the process of refining the IPF PPS as
appropriate. We believe that in the next rulemaking, for FY
2013, we will be ready to propose potential refinements to the
system.
CMS-1346-F 90
As we stated previously, we do not plan to update the
regression analysis until we are able to analyze IPF PPS
claims and cost report data. However, we continue to monitor
claims and payment data independently from cost report data to
assess issues, to determine whether changes in case-mix or
payment shifts have occurred among freestanding governmental,
non-profit and private psychiatric hospitals, and psychiatric
units of general hospitals, and CAHs and other issues of
importance to IPFs.
B. Patient-Level Adjustments
In the April 2010 IPF PPS notice (75 FR 23113 through
23117), we announced payment adjustments for the following
patient-level characteristics: Medicare Severity diagnosis
related groups (MS–DRGs) assignment of the patient’s principal
diagnosis, selected comorbidities, patient age, and the
variable per diem adjustments.
1. Adjustment for MS–DRG Assignment
The IPF PPS includes payment adjustments for the
psychiatric DRG assigned to the claim based on each patient’s
principal diagnosis. The IPF PPS recognizes the MS–DRGs. The
DRG adjustment factors were expressed relative to the most
frequently reported psychiatric DRG in FY 2002, that is, DRG
CMS-1346-F 91
430 (psychoses). The coefficient values and adjustment
factors were derived from the regression analysis.
In accordance with §412.27(a), payment under the IPF PPS
is conditioned on IPFs admitting “only patients whose
admission to the unit is required for active treatment, of an
intensity that can be provided appropriately only in an
inpatient hospital setting, of a psychiatric principal
diagnosis that is listed in Chapter Five (“Mental Disorders”)
of the International Classification of Diseases, Ninth
Revision, Clinical Modification (ICD–9–CM)” or in the Fourth
Edition, Text Revision of the American Psychiatric
Association’s Diagnostic and Statistical Manual, (DSM–IV–TR).
IPF claims with a principal diagnosis included in Chapter Five
of the ICD–9–CM or the DSM–IV–TR are paid the Federal per diem
base rate under the IPF PPS and all other applicable
adjustments, including any applicable DRG adjustment.
Psychiatric principal diagnoses that do not group to one of
the designated DRGs still receive the Federal per diem base
rate and all other applicable adjustments, but the payment
would not include a DRG adjustment.
The Standards for Electronic Transaction final rule
published in the Federal Register on August 17, 2000
(65 FR 50312), adopted the ICD–9–CM as the designated code set
CMS-1346-F 92
for reporting diseases, injuries, impairments, other health
related problems, their manifestations, and causes of injury,
disease, impairment, or other health related problems.
Therefore, we use the ICD–9–CM as the designated code set for
the IPF PPS.
We believe that it is important to maintain the same
diagnostic coding and DRG classification for IPFs that are
used under the IPPS for providing psychiatric care.
Therefore, when the IPF PPS was implemented for cost reporting
periods beginning on or after January 1, 2005, we adopted the
same diagnostic code set and DRG patient classification system
(that is, the CMS DRGs) that were utilized at the time under
the hospital inpatient prospective payment system (IPPS).
Since the inception of the IPF PPS, the DRGs used as the
patient classification system under the IPF PPS have
corresponded exactly with the CMS DRGs applicable under the
IPPS for acute care hospitals.
Every year, changes to the ICD–9–CM coding system are
addressed in the IPPS proposed and final rules. The changes
to the codes are effective October 1 of each year and must be
used by acute care hospitals as well as other providers to
report diagnostic and procedure information. The IPF PPS has
always incorporated ICD–9–CM coding changes made in the annual
CMS-1346-F 93
IPPS update. We publish coding changes in a
Transmittal/Change Request, similar to how coding changes are
announced by the IPPS and LTCH PPS. Those ICD–9–CM coding
changes are also published in the following IPF PPS RY update,
in either the IPF PPS proposed and final rules, or in an IPF
PPS update notice.
In the May 2008 IPF PPS notice (73 FR 25709), we
discussed CMS’ effort to better recognize resource use and the
severity of illness among patients. CMS adopted the new
MS-DRGs for the IPPS in the FY 2008 IPPS final rule with
comment period (72 FR 47130). We believe by better accounting
for patients’ severity of illness in Medicare payment rates,
the MS–DRGs encourage hospitals to improve their coding and
documentation of patient diagnoses. The MS–DRGs, which are
based on the CMS DRGs, represent a significant increase in the
number of DRGs (from 538 to 745, an increase of 207). For a
full description of the development and implementation of the
MS–DRGs, see the FY 2008 IPPS final rule with comment period
(72 FR 47141 through 47175).
In the May 2008 IPF PPS notice, the IPF PPS recognized
the MS-DRGs. A crosswalk, to reflect changes that were made
to the DRGs under the IPF PPS to the new MS-DRGs was provided
(73 FR 25716). Since then, we have referred to the IPF PPS
CMS-1346-F 94
DRGs as MS-DRGs. In the RY 2012 IPF PPS proposed rule, we
proposed that all references to the MS-DRGs used for the IPF
PPS would be to MS-IPF-DRGs. This would only be a change in
terminology. We proposed to revise §412.402 to add the
definition of MS-IPF-DRG.
Comment: One Commenter suggested for consistency sake,
that the DRG name of MS-DRG should remain the same in this
rule as it is in the IPPS rule. The commenter believes that
the name change to MS-IPF-DRGs suggest that there are two
separate and distinct DRG classification systems.
Response: We understand the commenter’s concern that the
name change from MS-DRG to MS-IPF-DRG could suggest that there
are two separate DRG classification systems. Although we
proposed to simply change the terminology only and this change
does not mean two separate and distinct DRG classification
systems, we will retain the MS-DRG name for consistency sake
and to avoid confusion. Therefore, we will not finalize the
revision of §412.402 to add the definition of MS-IPF-DRG. All
references to the DRG name of MS-DRGs for the IPF PPS will
remain the same.
All of the ICD–9–CM coding changes are reflected in the
FY 2011 GROUPER, Version 28.0, effective for IPPS discharges
occurring on or after October 1, 2010 through September 30,
CMS-1346-F 95
2011. The GROUPER Version 28.0 software package assigns each
case to an MS–DRG on the basis of the diagnosis and procedure
codes and demographic information (that is, age, sex, and
discharge status). The Medicare Code Editor (MCE) 27.0 uses
the new ICD–9–CM codes to validate coding for IPPS discharges
on or after October 1, 2010. For additional information on
the GROUPER Version 28.0 and MCE 27.0, see Transmittal 2060
(Change Request 7134), dated October 1, 2010. The IPF PPS has
always used the same GROUPER and Code Editor as the IPPS.
Therefore, the ICD–9–CM changes, which were reflected in the
GROUPER Version 28.0 and MCE 27.0 on October 1, 2010, also
became effective for the IPF PPS for discharges occurring on
or after October 1, 2010.
The impact of the new MS–DRGs on the IPF PPS was
negligible. Mapping to the MS–DRGs resulted in the current 17
MS–DRGs, instead of the original 15, for which the IPF PPS
provides an adjustment. Although the code set is updated, the
same associated adjustment factors apply now that have been in
place since implementation of the IPF PPS, with one exception
that is unrelated to the update to the codes. When DRGs 521
and 522 were consolidated into MS–DRG 895, we carried over the
adjustment factor of 1.02 from DRG 521 to the newly
consolidated MS–DRG. This was done to reflect the higher
CMS-1346-F 96
claims volume under DRG 521, with more than eight times the
number of claims than billed under DRG 522. The updates are
reflected in Tables 7 and 8. For a detailed description of
the mapping changes from the original DRG adjustment
categories to the current MS–DRG adjustment categories we
refer readers to the May 2008 IPF PPS notice (73 FR 25714).
The official version of the ICD–9–CM is available on
CD-ROM from the U.S. Government Printing Office. The FY 2009
version can be ordered by contacting the Superintendent of
Documents, U.S. Government Printing Office, Department 50,
Washington, DC 20402–9329, telephone number (202)512–1800.
Questions concerning the ICD–9–CM should be directed to
Patricia E. Brooks, Co-Chairperson, ICD–9–CM Coordination and
Maintenance Committee, CMS, Center for Medicare Management,
Hospital and Ambulatory Policy Group, Division of Acute Care,
Mailstop C4–08–06, 7500 Security Boulevard, Baltimore,
Maryland 21244–1850.
Further information concerning the official version of
the ICD–9–CM can be found in the IPPS final rule with comment
period, “Changes to Hospital Inpatient Prospective Payment
System and Fiscal Year 2011 Rates” in the August 16, 2010
Federal Register (75 FR 50042) and at Tables 7 and 8 below
list the FY 2011 new and revised ICD–9–CM diagnosis codes that
CMS-1346-F 97
group to one of the 17 MS–DRGs for which the IPF PPS provides
an adjustment. These tables are only a listing of FY 2011
changes and do not reflect all of the currently valid and
applicable ICD–9–CM codes classified in the MS–DRGs. When
coded as a principal code or diagnosis, these codes receive
the correlating MS–DRG adjustment.
TABLE 7—FY 2011 NEW DIAGNOSIS CODES
Diagnosis Code MS-DRG Descriptions
799.51
Attention or concentration deficit
Cognitive communication deficit
799.52
Psychomotor deficit
799.54
Frontal lobe and executive function deficit
799.55
799.59
Other signs and symptoms involving cognition
TABLE 8—FY 2011 REVISED DIAGNOSIS CODE
Diagnosis Code
307.0
Because we do not plan to update the regression analysis until
MS-DRG
886
884
884
884
884
Description
Adult onset fluency disorder
MS-DRG
887
we are able to analyze IPF PPS data, we proposed that the MS–
IPF-DRG adjustment factors (as shown in Table 9) would
continue to be paid for discharges occurring in RY 2012.
TABLE 9—RY 2012 CURRENT MS–IPF-DRGS APPLICABLE FOR THE
PRINCIPAL DIAGNOSIS ADJUSTMENT
MS-DRG
056
057
080
081
876
880
881
882
883
MS-DRG Descriptions
Degenerative nervous system disorders w MCC.
Degenerative nervous system disorders w/o MCC.
Nontraumatic stupor & coma w MCC.
Nontraumatic stupor & coma w/o MCC.
O.R. procedure w principal diagnoses of mental illness.
Acute adjustment reaction & psychosocial dysfunction.
Depressive neuroses
Neuroses except depressive.
Disorders of personality & impulse control.
Adjustment
Factor
1.05
1.05
1.07
1.07
1.22
1.05
0.99
1.02
1.02
CMS-1346-F 98
MS-DRG Descriptions
Organic disturbances & mental retardation.
Psychoses
Behavioral & developmental disorders.
Other mental disorder diagnoses.
Alcohol/drug abuse or dependence, left AMA.
Alcohol/drug abuse or dependence w
rehabilitation therapy.
Alcohol/drug abuse or dependence w/o
rehabilitation therapy w MCC.
Alcohol/drug abuse or dependence w/o
rehabilitation therapy w/o MCC.
Adjustment
Factor
1.03
1.00
0.99
0.92
0.97
1.02
0.88
0.88
MS-DRG
884
885
886
887
894
895
896
897
Final Rule Action: In summary, we received one public
comment objecting to our proposed change to §412.402 to change
the terminology from MS-DRG to MS-IPF-DRG. Therefore, we will
not revise §412.402 to add the definition of MS-IPF-DRG.
Instead, we will retain the MS-DRG name for consistency sake
and in order to avoid confusion. All references to the DRG
name of MS-DRG for the IPF PPS will remain the same. In
addition, we are adopting the MS-DRG adjustments currently in
effect and as shown in Table 9.
2. Payment for Comorbid Conditions
The intent of the comorbidity adjustments is to recognize
the increased costs associated with comorbid conditions by
providing additional payments for certain concurrent medical
or psychiatric conditions that are expensive to treat. In the
April 2010 IPF PPS notice (75 FR 23114), we explained that the
IPF PPS includes 17 comorbidity categories and identified the
CMS-1346-F 99
new, revised, and deleted ICD–9–CM diagnosis codes that
generate a comorbid condition payment adjustment under the IPF
PPS for RY 2011 (75 FR 23115).
Comorbidities are specific patient conditions that are
secondary to the patient’s principal diagnosis and that
require treatment during the stay. Diagnoses that relate to
an earlier episode of care and have no bearing on the current
hospital stay are excluded and must not be reported on IPF
claims. Comorbid conditions must exist at the time of
admission or develop subsequently, and affect the treatment
received, length of stay (LOS), or both treatment and LOS.
For each claim, an IPF may receive only one comorbidity
adjustment per comorbidity category, but it may receive an
adjustment for more than one comorbidity category. Billing
instructions require that IPFs must enter the full ICD–9–CM
codes for up to 8 additional diagnoses if they co-exist at the
time of admission or develop subsequently and impact the
treatment provided.
The comorbidity adjustments were determined based on the
regression analysis using the diagnoses reported by IPFs in FY
2002. The principal diagnoses were used to establish the DRG
adjustments and were not accounted for in establishing the
comorbidity category adjustments, except where ICD–9–CM “code
CMS-1346-F 100
first” instructions apply. As we explained in the April 2010
IPF PPS notice (75 FR 23115), the code first rule applies when
a condition has both an underlying etiology and a
manifestation due to the underlying etiology. For these
conditions, the ICD–9–CM has a coding convention that requires
the underlying conditions to be sequenced first followed by
the manifestation. Whenever a combination exists, there is a
“use additional code” note at the etiology code and a code
first note at the manifestation code.
As discussed in the MS–DRG section, where we proposed
that all references to MS-DRGs used for the IPF PPS be to
MS-IPF-DRGs (as previously stated, we are not finalizing that
proposal), it is our policy to maintain the same diagnostic
coding set for IPFs that is used under the IPPS for providing
the same psychiatric care. Although the ICD–9–CM code set has
been updated, the same adjustment factors have been in place
since the implementation of the IPF PPS.
Table 10 below lists the FY 2011 new ICD diagnosis codes
that impact the comorbidity adjustments under the IPF PPS.
Table 10 is not a list of all currently valid ICD codes
applicable for the IPF PPS comorbidity adjustments.
TABLE 10—FY 2011 NEW ICD CODES APPLICABLE FOR THE COMORBIDITY
ADJUSTMENT
Diagnosis Code Description
Comorbidity Category
CMS-1346-F 101
237.73
237.79
For RY 2012, we are applying the seventeen comorbidity
Schwannomatosis
Other neurofibromatosis
Oncology
Oncology
categories for which we are providing an adjustment, their
respective codes, including the new FY 2011 ICD–9–CM codes,
and their respective adjustment factors in Table 11 below.
TABLE 11—RY 2012 DIAGNOSIS CODES AND ADJUSTMENT FACTORS FOR
COMORBIDITY CATEGORIES
Description of Comorbidity
Developmental Disabilities
Coagulation Factor Deficits
Tracheostomy
Renal Failure, Acute
Renal Failure, Chronic
Oncology Treatment
Uncontrolled Diabetes-
Mellitus with or without
complications
Severe Protein Calorie
Malnutrition
Eating and Conduct
Disorders
Infectious Disease
Drug and/or Alcohol Induced
Mental Disorders
Cardiac Conditions
Gangrene
Chronic Obstructive
Pulmonary Disease
Artificial Openings—
Digestive and Urinary
Severe Musculoskeletal and
Diagnoses Codes
317, 3180, 3181, 3182, and 319.
2860 through 2864.
51900 through 51909 and V440.
5845 through 5849, 63630, 63631, 63632, 63730,
63731, 63732, 6383, 6393, 66932, 66934, 9585.
40301, 40311, 40391, 40402, 40412, 40413,
40492, 40493, 5853, 5854, 5855, 5856,
5859,586, V451, V560, V561,
and V562.
1400 through 2399 with a radiation therapy code
92.21-92.29 or
chemotherapy code 99.25.
25002, 25003, 25012, 25013, 25022, 25023,
25032, 25033, 25042, 25043, 25052, 25053,
25062, 25063, 25072, 25073,
25082, 25083, 25092, and 25093.
260 through 262
3071, 30750, 31203, 31233, and 31234.
01000 through 04110, 042, 04500 through
05319, 05440 through 05449, 0550 through
0770, 0782 through 07889, and 07950 through
07959.
2910, 2920, 29212, 2922, 30300, and 30400.
3910, 3911, 3912, 40201, 40403, 4160, 4210,
4211, and 4219.
44024 and 7854.
49121, 4941, 5100, 51883, 51884, V4611 and
V4612, V4613 and V4614.
56960 through 56969, 9975, and V441 through
V446.
6960, 7100, 73000 through 73009, 73010
Adjustment
Factor
1.04
1.13
1.06
1.11
1.11
1.07
1.05
1.13
1.12
1.07
1.03
1.11
1.10
1.12
1.08
1.09
CMS-1346-F 102
Description of Comorbidity
Diagnoses Codes
Connective Tissue Diseases through 73019, and 73020 through 73029.
Poisoning
96500 through 96509, 9654, 9670 through 9699,
9770, 9800 through 9809, 9830 through 9839,
986, 9890 through 9897.
Adjustment
Factor
1.11
Final Rule Action: In summary, we are adopting the
comorbidity adjustments currently in effect and as shown in
Table 11 above for RY 2012 beginning on July 1, 2011.
3. Patient Age Adjustments
As explained in the November 2004 IPF PPS final rule
(69 FR 66922), we analyzed the impact of age on per diem cost
by examining the age variable (that is, the range of ages) for
payment adjustments.
In general, we found that the cost per day increases with
age. The older age groups are more costly than the under 45
age group, the differences in per diem cost increase for each
successive age group, and the differences are statistically
significant.
We do not plan to update the regression analysis until we
are able to analyze IPF PPS data. Therefore, for RY 2012, we
proposed to continue to use the patient age adjustments
currently in effect as shown in Table 12 below.
CMS-1346-F 103
TABLE 12—Age Groupings and Adjustment Factors
Age
Under 45
45 and under 50
50 and under 55
55 and under 60
60 and under 65
65 and under 70
70 and under 75
75 and under 80
80 and over
Adjustment Factor
1.00
1.01
1.02
1.04
1.07
1.10
1.13
1.15
1.17
Final Rule Action: We received no comments on the
RY 2012 IPF PPS proposed rule concerning the age adjustment.
We are adopting the age adjustment currently in effect and as
shown in Table 12 above for RY 2012.
4. Variable Per Diem Adjustments
We explained in the November 2004 IPF PPS final rule
(69 FR 66946) that the regression analysis indicated that per
diem cost declines as the LOS increases. The variable per
diem adjustments to the Federal per diem base rate account for
ancillary and administrative costs that occur
disproportionately in the first days after admission to an
IPF.
We used a regression analysis to estimate the average
differences in per diem cost among stays of different lengths.
As a result of this analysis, we established variable per diem
adjustments that begin on day 1 and decline gradually until
CMS-1346-F 104
day 21 of a patient’s stay. For day 22 and thereafter, the
variable per diem adjustment remains the same each day for the
remainder of the stay. However, the adjustment applied to
day 1 depends upon whether the IPF has a qualifying ED. If an
IPF has a qualifying ED, it receives a 1.31 adjustment factor
for day 1 of each stay. If an IPF does not have a qualifying
ED, it receives a 1.19 adjustment factor for day 1 of the
stay. The ED adjustment is explained in more detail in
section V.C.5 of this final rule.
For RY 2012, we proposed to continue to use the variable
per diem adjustment factors currently in effect as shown in
Table 13 below. A complete discussion of the variable per
diem adjustments appears in the November 2004 IPF PPS final
rule (69 FR 66946).
Table 13—Variable Per Diem Adjustments
Day-Of-Stay
Day 1- IPF Without a Qualifying ED
Day 1- IPF With a Qualifying ED
Day 2
Day 3
Day 4
Day 5
Day 6
Day 7
Day 8
Day 9
Day 10
Day 11
Day 12
Day 13
Day 14
Day 15
Day 16
Adjustment Factor
1.19
1.31
1.12
1.08
1.05
1.04
1.02
1.01
1.01
1.00
1.00
0.99
0.99
0.99
0.99
0.98
0.97
CMS-1346-F 105
Day-Of-Stay
Day 17
Day 18
Day 19
Day 20
Day 21
After Day 21
Final Rule Action: In response to the RY 2012 IPF PPS
Adjustment Factor
0.97
0.96
0.95
0.95
0.95
0.92
proposed rule, we received no public comments concerning the
variable per diem adjustment. We are adopting the variable
per diem adjustment currently in effect and as shown in Table
13 above.
C. Facility-Level Adjustments
The IPF PPS includes facility-level adjustments for the
wage index, IPFs located in rural areas, teaching IPFs, cost
of living adjustments for IPFs located in Alaska and Hawaii,
and IPFs with a qualifying ED.
1. Wage Index Adjustment
a. Background
As discussed in the May 2006 IPF PPS final rule and in the
May 2008 and May 2009 IPF PPS notices, in providing an
adjustment for geographic wage levels, the labor-related
portion of an IPF’s payment is adjusted using an appropriate
wage index. Currently, an IPF’s geographic wage index value
is determined based on the actual location of the IPF in an
CMS-1346-F 106
urban or rural area as defined in §412.64(b)(1)(ii)(A) through
§412.64(C).
b. Wage Index for RY 2012
Since the inception of the IPF PPS, we have used hospital
wage data in developing a wage index to be applied to IPFs.
We are continuing that practice for RY 2012. We apply the
wage index adjustment to the labor-related portion of the
Federal rate, which is 70.317 percent. This percentage
reflects the labor-related relative importance of the FY 2008-
based RPL market basket for RY 2012 (see section IV.C.6 of
this final rule). The IPF PPS uses the pre-floor, pre-
reclassified hospital wage index. Changes to the wage index
are made in a budget neutral manner so that updates do not
increase expenditures.
For RY 2012, we proposed to apply the most recent
hospital wage index (that is, the FY 2011 pre-floor, pre-
reclassified hospital wage index because this is the most
appropriate index as it best reflects the variation in local
labor costs of IPFs in the various geographic areas) using the
most recent hospital wage data (that is, data from hospital
cost reports for the cost reporting period beginning during FY
2007), and applying an adjustment in accordance with our
budget neutrality policy. This policy requires us to estimate
CMS-1346-F 107
the total amount of IPF PPS payments in RY 2011 using the
applicable wage index value divided by the total estimated IPF
PPS payments in RY 2012 using the most recent wage index. The
estimated payments are based on FY 2009 IPF claims, inflated
to the appropriate RY. This quotient is the wage index budget
neutrality factor, and it is applied in the update of the
Federal per diem base rate for RY 2012 in addition to the
market basket described in section IV.C.5 of this final rule.
The wage index budget neutrality factor for RY 2012 is 0.9995.
The wage index applicable for RY 2012 appears in Table 1
and Table 2 in Addendum B of this final rule. As explained in
the May 2006 IPF PPS final rule for RY 2007 (71 FR 27061), the
IPF PPS applies the hospital wage index without a
hold-harmless policy, and without an out-commuting adjustment
or out-migration adjustment because the statutory authority
for these policies applies only to the IPPS.
Also in the May 2006 IPF PPS final rule for RY 2007
(71 FR 27061), we adopted the changes discussed in the Office
of Management and Budget (OMB) Bulletin No. 03-04 (June 6,
2003), which announced revised definitions for Metropolitan
Statistical Areas (MSAs), and the creation of Micropolitan
Statistical Areas and Combined Statistical Areas. In adopting
the OMB Core-Based Statistical Area (CBSA) geographic
CMS-1346-F 108
designations, since the IPF PPS was already in a transition
period from TEFRA payments to PPS payments, we did not provide
a separate transition for the CBSA-based wage index.
As was the case in RY 2011, for RY 2012 we proposed to
continue to use the CBSA-based wage index values as presented
in Tables 1 and 2 in Addendum B of this final rule. A
complete discussion of the CBSA labor market definitions
appears in the May 2006 IPF PPS final rule (71 FR 27061
through 27067).
In summary, for RY 2012 we proposed to use the FY 2011
wage index data (collected from cost reports submitted by
hospitals for cost reporting periods beginning during FY 2007)
to adjust IPF PPS payments beginning July 1 ,2011.
c. OMB Bulletins
The Office of Management and Budget (OMB) publishes
bulletins regarding CBSA changes, including changes to CBSA
numbers and titles. In the May 2008 IPF PPS notice, we
incorporated the CBSA nomenclature changes published in the
most recent OMB bulletin that applies to the hospital wage
data used to determine the current IPF PPS wage index
(73 FR 25721). We will continue to do the same for all such
OMB CBSA nomenclature changes in future IPF PPS rules and
CMS-1346-F 109
notices, as necessary. The OMB bulletins may be accessed
online at http://www.whitehouse.gov/omb/bulletins/index.html.
Final Rule Action: We are finalizing our proposal to use
FY 2011 wage index data to adjust IPF PPS payments beginning
July 1, 2011.
2. Adjustment for Rural Location
In the November 2004 IPF PPS final rule, we provided a 17
percent payment adjustment for IPFs located in a rural area.
This adjustment was based on the regression analysis, which
indicated that the per diem cost of rural facilities was 17
percent higher than that of urban facilities after accounting
for the influence of the other variables included in the
regression. For RY 2012, we proposed to apply a 17 percent
payment adjustment for IPFs located in a rural area as defined
at §412.64(b)(1)(ii)(C). As stated in the November 2004 IPF
PPS final rule, we do not intend to update the adjustment
factors derived from the regression analysis until we are able
to analyze IPF PPS data. A complete discussion of the
adjustment for rural locations appears in the November 2004
IPF PPS final rule (69 FR 66954).
Final Rule Action: In summary, we are adopting the 17
percent rural adjustment in effect for RY 2012.
CMS-1346-F 110
3. Teaching Adjustment
In the November 2004 IPF PPS final rule, we implemented
regulations at §412.424(d)(1)(iii) to establish a
facility-level adjustment for IPFs that are, or are part of,
teaching hospitals. The teaching adjustment accounts for the
higher indirect operating costs experienced by hospitals that
participate in GME programs. The payment adjustments are made
based on the number of full-time equivalent (FTE) interns and
residents training in the IPF and the IPF’s average daily
census.
Medicare makes direct GME payments (for direct costs such
as resident and teaching physician salaries, and other direct
teaching costs) to all teaching hospitals including those paid
under a PPS, and those paid under the TEFRA rate-of-increase
limits. These direct GME payments are made separately from
payments for hospital operating costs and are not part of the
PPSs. The direct GME payments do not address the estimated
higher indirect operating costs teaching hospitals may face.
For teaching hospitals paid under the TEFRA rate-of-
increase limits, Medicare does not make separate payments for
indirect medical education costs because payments to these
hospitals are based on the hospitals’ reasonable costs which
CMS-1346-F 111
already include these higher indirect costs that may be
associated with teaching programs.
The results of the regression analysis of FY 2002 IPF
data established the basis for the payment adjustments
included in the November 2004 IPF PPS final rule. The results
showed that the indirect teaching cost variable is significant
in explaining the higher costs of IPFs that have teaching
programs. We calculated the teaching adjustment based on the
IPF’s “teaching variable,” which is one plus the ratio of the
number of FTE residents training in the IPF (subject to
limitations described below) to the IPF’s average daily census
(ADC).
We established the teaching adjustment in a manner that
limited the incentives for IPFs to add FTE residents for the
purpose of increasing their teaching adjustment. We imposed a
cap on the number of FTE residents that may be counted for
purposes of calculating the teaching adjustment. The cap
limits the number of FTE residents that teaching IPFs may
count for the purpose of calculating the IPF PPS teaching
adjustment, not the number of residents teaching institutions
can hire or train. We calculated the number of FTE residents
that trained in the IPF during a “base year” and used that FTE
resident number as the cap. An IPF’s FTE resident cap is
CMS-1346-F 112
ultimately determined based on the final settlement of the
IPF’s most recent cost report filed before November 15, 2004
(that is, the publication date of the IPF PPS final rule).
In the regression analysis, the logarithm of the teaching
variable had a coefficient value of 0.5150. We converted this
cost effect to a teaching payment adjustment by treating the
regression coefficient as an exponent and raising the teaching
variable to a power equal to the coefficient value. We note
that the coefficient value of 0.5150 was based on the
regression analysis holding all other components of the
payment system constant.
As with other adjustment factors derived through the
regression analysis, we do not plan to rerun the regression
analysis until we analyze IPF PPS data. Therefore, in this
final rule, for RY 2012, we are retaining the coefficient
value of 0.5150 for the teaching adjustment to the Federal per
diem base rate.
A complete discussion of how the teaching adjustment was
calculated appears in the November 2004 IPF PPS final rule (69
FR 66954 through 66957) and the May 2008 IPF PPS notice (73 FR
25721).
CMS-1346-F 113
FTE Intern and Resident Cap Adjustment
CMS has been asked to reconsider the current IPF teaching
policy and permit a temporary increase in the FTE resident cap
when the IPF increases the number of FTE residents it trains
due to the acceptance of displaced residents (residents that
are training in an IPF or a program before the IPF or program
closed) when another IPF closes or closes its medical
residency training program.
To help us assess how many IPFs have been, or expect to
be adversely affected by their inability to adjust their caps
under §412.424(d)(1) and under these situations, we
specifically requested public comment from IPFs in the May 1,
2009 IPF PPS notice (74 FR 20376 through 20377). A summary of
the comments and our response can be reviewed in the April 30,
2010 IPF PPS notice (75 FR 23106, 23117). All of the
commenters recommended that CMS modify the IPF PPS teaching
adjustment policy, supporting a policy change that would
permit the IPF PPS residency cap to be temporarily adjusted
when that IPF trains displaced residents due to closure of an
IPF or closure of an IPF’s medical residency training
program(s). The commenters recommended a temporary resident
cap adjustment policy similar to such policies applied in
similar contexts for acute care hospitals.
CMS-1346-F 114
We agree with the commenters that, when a hospital
temporarily takes on residents because another hospital closes
or discontinues its program, a temporary adjustment to the cap
would be appropriate for rotation that occurs in an IPF
setting (freestanding or units). In these situations,
residents may have partially completed a medical residency
training program at the hospital that has closed its training
program and may be unable to complete their training at
another hospital that is already training residents up to or
in excess of its cap. We believe that it is appropriate to
allow temporary adjustments to the FTE caps for an IPF that
provides residency training to medical residents who have
partially completed a residency training program at an IPF
that closes or at an IPF that discontinues training residents
in a residency training program(s) (also referred to as a
“closed” program throughout this preamble). For this reason,
we proposed to adopt the following temporary resident cap
adjustment policies, similar to the temporary adjustments to
the FTE cap used for acute care hospitals. We proposed that
the cap adjustment would be temporary because it is resident
specific and would only apply to the displaced resident(s)
until the resident(s) completes training in that specialty.
We proposed that, as under the IPPS policy for displaced
CMS-1346-F 115
residents, the IPF PPS temporary cap adjustment would apply
only to residents that were still training at the IPF at the
time the IPF closed or at the time the IPF ceased training
residents in the residency training program(s). Residents who
leave the IPF, for whatever reason, before the closure of the
IPF hospital or medical residency training program would not
be considered displaced residents for purposes of the IPF
temporary cap adjustment policy. Similarly, as under the IPPS
policy, we proposed that medical students who match to a
program at an IPF but the IPF or medical residency training
program closes before the individual begins training at that
IPF are also not considered displaced residents for purposes
of the IPF temporary cap adjustments. For detailed
information on these acute care hospital GME/IME payment
policies, see 66 FR 39899 (August 1, 2001), 64 FR 41522 (July
30 1999), and 64 FR 24736 (May 7 1999). We note that although
we proposed to adopt a policy under the IPF PPS that is
consistent with the policy applicable under the IPPS, the
actual caps under the two payment systems may not be
commingled.
CMS-1346-F 116
a. Temporary Adjustment to the FTE Cap to Reflect Residents
Added Due to Hospital Closure
We proposed to allow an IPF to receive a temporary
adjustment to the FTE cap to reflect residents added because
of another IPF’s closure. This adjustment is intended to
account for medical residents who would have partially
completed a medical residency training program at the hospital
that has closed and may be unable to complete their training
at another hospital because that hospital is already training
residents up to or in excess of its cap. We proposed this
change because IPFs have indicated a reluctance to accept
additional residents from a closed IPF without a temporary
adjustment to their caps. For purposes of this policy on IPF
closure, we proposed to adopt the IPPS definition of “closure
of a hospital” in 42 CFR §413.79(h) to mean the IPF terminates
its Medicare provider agreement as specified in 42 CFR
§489.52. Therefore, we proposed to add a new
§412.424(d)(1)(iii)(F)(1) to allow a temporary adjustment to
an IPF’s FTE cap to reflect residents added because of an
IPF’s closure on or after July 1, 2011 to be effective for
cost reporting periods beginning on or after July 1, 2011. We
would allow an adjustment to an IPF’s FTE cap if the IPF meets
the following criteria: (a) the IPF is training displaced
CMS-1346-F 117
residents from an IPF that closed on or after July 1, 2011;
and (b) the IPF that is training the displaced residents from
the closed IPF submits a request for a temporary adjustment to
its FTE cap to its Medicare contractor no later than 60 days
after the hospital first begins training the displaced
residents, and documents that the IPF is eligible for this
temporary adjustment to its FTE cap by identifying the
residents who have come from the closed IPF and have caused
the IPF to exceed its cap, (or the IPF may already be over its
cap), and specifies the length of time that the adjustment is
needed. After the displaced residents leave the IPF’s
training program or complete their residency program, the
IPF’s cap would revert to its original level. This means that
the temporary adjustment to the FTE cap would be available to
the IPF only for the period of time necessary for the
displaced residents to complete their training. Further, as
under the IPPS policy, we also proposed that the total amount
of temporary cap adjustment that can be distributed to all
receiving hospitals cannot exceed the cap amount of the IPF
that closed.
We also note that section 5506 of the Affordable Care
Act, “Preservation of Resident Cap Positions from Closed
Hospitals,” does not apply to IPFs that closed. Section 5506
CMS-1346-F 118
only amends sections 1886(d) and (h) of the Act with respect
to direct GME and IPPS IME payments. Therefore, the IME FTE
cap redistributions under section 5506 only apply to
“subsection (d)” IPPS hospitals. Section 5506 has no
applicability to the IME teaching adjustments under the IPF
PPS (or the IRF PPS, for that matter).
b. Temporary Adjustment to FTE Cap to Reflect Residents
Affected by Residency Program Closure
We proposed that if an IPF that ceases training residents
in a residency training program(s) agrees to temporarily
reduce its FTE cap, another IPF may receive a temporary
adjustment to its FTE cap to reflect residents added because
of the closure of another IPF’s residency training program.
For purposes of this policy on closed residency programs, we
proposed to adopt the IPPS definition of “closure of a
hospital residency training program” to mean that the hospital
ceases to offer training for residents in a particular
approved medical residency training program as specified in
§413.79(h). The methodology for adjusting the caps for the
“receiving IPF” and the “IPF that closed its program” is
described below.
CMS-1346-F 119
i. Receiving IPF
We proposed that an IPF(s) may receive a temporary
adjustment to its FTE cap to reflect residents added because
of the closure of another IPF’s residency training program for
cost reporting periods beginning on or after July 1, 2011
if —
• The IPF is training additional residents from the
residency training program of an IPF that closed its program
on or after July 1, 2011; and
• No later than 60 days after the IPF begins to train the
residents, the IPF submits to its Medicare Contractor a
request for a temporary adjustment to its FTE cap, documents
that the IPF is eligible for this temporary adjustment by
identifying the residents who have come from another IPF’s
closed program and have caused the IPF to exceed its cap,(or
the IPF may already be in excess of its cap), specifies the
length of time the adjustment is needed, and, as explained in
more detail below, submits to its Medicare contractor a copy
of the FTE cap reduction statement by the IPF closing the
residency training program.
In general, the temporary adjustment criteria established
for closed medical residency training programs at IPFs is
similar to the criteria established for closed IPFs. More
CMS-1346-F 120
than one IPF may be eligible to apply for the temporary
adjustment because residents from one closed program may
migrate to different IPFs, or they may complete their training
at more than one IPF. Also, only to the extent to which an
IPF would exceed its FTE cap by training displaced residents
would it be eligible for the temporary adjustment.
Finally, we proposed that IPFs that meet the proposed
criteria would be eligible to receive temporary adjustments to
their FTE caps for cost reporting periods beginning on or
after July 1, 2011.
ii. IPF That Closed Its Program(s)
We proposed that an IPF that agrees to train residents
who have been displaced by the closure of another IPF’s
resident teaching program may receive a temporary FTE cap
adjustment only if the IPF with the closed program meets the
following criteria —
• Temporarily reduces its FTE cap by the number of FTE
residents in each program year, training in the program at the
time of the program’s closure. The yearly reduction would be
determined by deducting the number of those residents who
would have been training in the program during the year of the
closure, had the program not closed; and
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• No later than 60 days after the residents who were in the
closed program begin training at another IPF, submits to its
Medicare contractor a statement signed and dated by its
representative that specifies that it agrees to the temporary
reduction in its FTE cap to allow the IPF training the
displaced residents to obtain a temporary adjustment to its
cap; identifies the residents who were training at the time of
the program’s closure; identifies the IPFs to which the
residents are transferring once the program closes; and
specifies the reduction for the applicable program years.
Unlike the proposed closed IPF policy at §412.424(d)
(1)(iii)(F)(1), we proposed under this closed program policy
that in order for the receiving IPF(s) to qualify for a
temporary adjustment to their FTE cap, the IPFs that are
closing their programs would need to reduce their FTE cap for
the duration of time the displaced residents would need to
finish their training. We proposed this because the IPF that
closes the program still retains the FTE slots in its cap,
even if the IPF chooses not to fill the slots with residents.
We believe it is inappropriate to allow an increase to the
receiving IPF’s cap without an attendant decrease to the cap
of the IPF with the closed program, because the IPF that
closed a program(s) could fill these slots with residents from
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other programs even if the increase and related decrease is
only temporary.
We proposed that the cap reduction for the IPF with the
closed program would be based on the number of FTE residents
in each program year who were in the program at the IPF at the
time of the program’s closure, and who begin training at
another IPF.
Comment: The majority of the commenters strongly
supported the proposed policy to allow a temporary adjustment
to the resident cap when an IPF closes or closes its residency
teaching program. However, a few of the commenters urged CMS
to modify the regulations to allow IPFs to receive the
temporary cap adjustment if they are training displaced
residents as of July 1, 2011. One commenter requested the
amendment at §412.424(d)(1)(iii)(F)(l)(i) be modified to
state, “The IPF is training additional residents as of
July 1, 2011 from an IPF that closed”. The commenter also
requested that we modify §412.424(d)(1)(iii)(l)(ii) to state,
“No later than 60 days after the IPF begins to train the
resident or in the case where an IPF is training the residents
as of July 1,2011, by August 31, 2011, the IPF submits…”
Response: We share the commenters’ concern for those FTE
residents who have been displaced before July 1, 2011 due to
CMS-1346-F 123
closure of an IPF. We carefully considered the commenters’
request that CMS modify the IPF temporary cap adjustment
policy to allow IPFs that volunteered to train displaced
residents before July 1, 2011, to receive the temporary cap
adjustment. We realize that at present, IPFs provide this
important service to displaced residents without extra
compensation. However, this is a new policy that was proposed
rather than a correction to an existing policy, and as such
the effective date of the IPF closure policy must be applied
prospectively. Therefore, as proposed, we are finalizing the
IPF PPS temporary cap adjustment to apply where an IPF is
training additional residents from an IPF that closed or
closed its’ residency program on or after July 1, 2011. The
policy is effective for cost reporting periods beginning on or
after July 1, 2011. We appreciate the support for the
proposed policies to allow a temporary adjustment to the
resident cap when an IPF closes or closes its residency
teaching program. We are finalizing these policies as
proposed.
Comment: Several commenters expressed concern about the
caps on the number of FTE residents that can be used to
calculate the teaching adjustment. These commenters believe
that the current cap is based on a snapshot of activity
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freezing the status of residency education at a random point
in time-2004. The commenters stated that they continue to
advocate for a substantial increase in the total number of
residency training positions supported by the federal
government.
One commenter expressed concern about having caps in
general since the current cap is based on 2004 data. Several
commenters pointed out that the demand for health care
services will continue with the growing needs of 78 million
“baby boomers” that started retirement in 2010 and with the
passage of Paul Wellstone and Pete Domenic Mental Health
Parity and Addiction Equality Act of 2008. These commenters
stated that the U.S. already faces a shortage of
psychiatrist, and these factors could potentially elevate what
is now a problem to what could be a crisis.
Response: We established the teaching adjustment in a
manner that limited the incentives for IPFs to add FTE
residents for the purpose of increasing their teaching
adjustment. We imposed a cap on the number of FTE residents
that may be counted for purposes of calculating the teaching
adjustment, similar to that established by sections 4621 (IME
FTE cap for IPPS hospitals) and 4623 (direct GME FTE cap for
all hospitals) of the BBA. The cap limits the number of
CMS-1346-F 125
residents that teaching IPFs may count for purposes of
calculating the teaching adjustment, not the number of
residents that teaching institutions can hire or train.
We acknowledge that the cap on the number of FTE
residents that may be counted under the IPF PPS teaching
adjustment is based on 2004 data and the cap freezes the
number of residents that Medicare will recognize for payment
under the IPF PPS teaching adjustment to that year. This
policy is intended to exercise our statutory responsibility
under the BBA to prevent any erosion of the resident caps
established under the IPPS that could result from incentives
created by the facility adjustment for teaching hospitals
under the IPF PPS. In addition, we wanted to avoid creating
incentives to artificially expand residency training in IPFs,
and ensure that the resident base used to determine payments
is related to the care needs in IPF institutions. We provided
a detailed discussion in the November 15, 2004 Federal
Register (69 FR 66954-66955)of the BBA cap. We are
continually monitoring the impact of our policies to assess
the appropriateness of the policies and will continue to
monitor the impact of this policy closely and consider the
appropriateness of our FTE cap for future refinements for the
RY 2013.
CMS-1346-F 126
Comment: One commenter recommended that CMS work with
the Congress to provide a permanent distribution of the
resident cap for IPFs that close, similar to the Affordable
Care Act for acute care hospital closures.
Response: We believe the commenter is referring to
section 5506 of the Affordable Care Act, “Preservation of
Resident Cap Positions from Closed Hospitals,” which does not
apply to IPFs that closed. In the absence of such authority,
we are finalizing the temporary adjustment to the FTE resident
caps for when an IPF closes or closes its residency teaching
program, as described above.
Final Rule Action: In summary, we are adding
§412.424(d)(1)(iii)(F)(1) and §412.424(d)(1)(iii)(F)(2) to
implement policies related to temporary adjustments to FTE
caps to reflect residents added due to closure of an IPF or an
IPFs medical residency training program respectfully.
4. Cost of Living Adjustment for IPFs Located in Alaska and
Hawaii.
The IPF PPS includes a payment adjustment for IPFs
located in Alaska and Hawaii based upon the county in which
the IPF is located. As we explained in the November 2004 IPF
PPS final rule, the FY 2002 data demonstrated that IPFs in
Alaska and Hawaii had per diem costs that were
CMS-1346-F 127
disproportionately higher than other IPFs. Other Medicare
PPSs (for example, the IPPS and LTCH PPS) have adopted a cost
of living adjustment (COLA) to account for the cost
differential of care furnished in Alaska and Hawaii.
We analyzed the effect of applying a COLA to payments for
IPFs located in Alaska and Hawaii. The results of our
analysis demonstrated that a COLA for IPFs located in Alaska
and Hawaii would improve payment equity for these facilities.
As a result of this analysis, we provided a COLA in the
November 2004 IPF PPS final rule.
A COLA adjustment for IPFs located in Alaska and Hawaii
is made by multiplying the nonlabor-related portion of the
Federal per diem base rate by the applicable COLA factor based
on the COLA area in which the IPF is located.
The COLA factors are published on the OPM website at
(http://www.opm.gov/oca/cola/rates.asp).
We note that the COLA areas for Alaska are not defined by
county as are the COLA areas for Hawaii. In 5 CFR 591.207,
the OPM established the following COLA areas:
(a) City of Anchorage, and 80-kilometer (50-mile) radius
by road, as measured from the Federal courthouse;
(b) City of Fairbanks, and 80-kilometer (50-mile) radius
by road, as measured from the Federal courthouse;
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(c) City of Juneau, and 80-kilometer (50-mile) radius by
road, as measured from the Federal courthouse;
(d) Rest of the State of Alaska.
As previously stated in the November 2004 IPF PPS final
rule, we update the COLA factors according to updates
established by the U.S. Office of Personnel Management (OPM).
Sections 1911 through 1919 of the Nonforeign Area Retirement Equity Assurance
Act, as contained in subtitle B of title XIX of the National Defense Authorization Act
(NDAA) for Fiscal Year 2010 (Pub. L. 111-84, October 28, 2009), transitions the Alaska and
Hawaii COLAs to locality pay. Under section 1914 of Pub. L. 111-84, locality pay is being
phased in over a 3-year period beginning in January 2010, with COLA rates frozen as of the
date of enactment, October 28, 2009, and then proportionately reduced to reflect the phase-in
of locality pay..
When we published the proposed COLA adjustment factors in
the January 2011 proposed rule, we inadvertently selected the
FY 2010 COLA rates. The FY 2010 COLA rates were reduced rates
to account for the phase-in of locality pay. We did not
intend to propose reduced COLA rates, and we do not believe it
is appropriate to finalize the reduced COLAs that we showed in
our proposed rule. The 2009 COLA rates do not reflect the
phase-in of locality pay. Therefore, we are finalizing the FY
2009 COLA rates, which are the same rates that were in effect
CMS-1346-F 129
for both RY 2010 and RY 2011. We plan to address COLA in the
future refinement process in FY 2013.
TABLE 14—COLA Factors for Alaska and Hawaii IPFs
Area
Alaska:
City of Anchorage and 80-kilometer (50-
mile) radius by road
City of Fairbanks and 80-kilometer (50-
mile) radius by road
City of Juneau and 80-kilometer (50-mile)
radius by road
Rest of Alaska
Hawaii:
City and County of Honolulu
County of Hawaii
County of Kauai
County of Maui and County of Kalawao
Cost of
Living
Adjustment
Factor
1.23
1.23
1.23
1.25
1.25
1.18
1.25
1.25
(The above factors are based on data obtained from the U.S.
Office of Personnel Management Web site at:
http://www.opm.gov/oca/cola/rates.asp.)
Final Rule Action: In summary, although we did not
propose the FY 2009 COLAs, in order to provide a full COLA, we
are adopting the FY 2009 COLA rates obtained from the OPM
website and as shown in Table 14 above.
5. Adjustment for IPFs with a Qualifying Emergency Department
(ED)
Currently, the IPF PPS includes a facility-level
adjustment for IPFs with qualifying EDs. We provide an
adjustment to the Federal per diem base rate to account for
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the costs associated with maintaining a full-service ED. The
adjustment is intended to account for ED costs incurred by a
freestanding psychiatric hospital with a qualifying ED or a
distinct part psychiatric unit of an acute hospital or a CAH
for preadmission services otherwise payable under the Medicare
Outpatient Prospective Payment System (OPPS) furnished to a
beneficiary during the day immediately preceding the date of
admission to the IPF (see §413.40(c)(2)) and the overhead cost
of maintaining the ED. This payment is a facility-level
adjustment that applies to all IPF admissions (with one
exception described below), regardless of whether a particular
patient receives preadmission services in the hospital’s ED.
The ED adjustment is incorporated into the variable per
diem adjustment for the first day of each stay for IPFs with a
qualifying ED. That is, IPFs with a qualifying ED receive an
adjustment factor of 1.31 as the variable per diem adjustment
for day 1 of each stay. If an IPF does not have a qualifying
ED, it receives an adjustment factor of 1.19 as the variable
per diem adjustment for day 1 of each patient stay.
The ED adjustment is made on every qualifying claim
except as described below. As specified in
§412.424(d)(1)(v)(B), the ED adjustment is not made where a
patient is discharged from an acute care hospital or critical
CMS-1346-F 131
access hospital (CAH) and admitted to the same hospital’s or
CAH’s psychiatric unit. An ED adjustment is not made in this
case because the costs associated with ED services are
reflected in the DRG payment to the acute care hospital or
through the reasonable cost payment made to the CAH. If we
provided the ED adjustment in these cases, the hospital would
be paid twice for the overhead costs of the ED, as stated in
the November 2004 IPF PPS final rule (69 FR 66960).
Therefore, when patients are discharged from an acute
care hospital or CAH and admitted to the same hospital’s or
CAH’s psychiatric unit, the IPF receives the 1.19 adjustment
factor as the variable per diem adjustment for the first day
of the patient’s stay in the IPF.
For RY 2012, we proposed to retain the 1.31 adjustment
factor for IPFs with qualifying EDs. A complete discussion of
the steps involved in the calculation of the ED adjustment
factor appears in the November 2004 IPF PPS final rule (69 FR
66959 through 66960) and the May 2006 IPF PPS final rule (71
FR 27070 through 27072).
Final Rule Action: We are retaining the 1.31 adjustment
factor for IPFs with qualifying EDs for RY 2012.
CMS-1346-F 132
D. Other Payment Adjustments and Policies
For RY 2012, the IPF PPS includes an outlier adjustment
to promote access to IPF care for those patients who require
expensive care and to limit the financial risk of IPFs
treating unusually costly patients. In this section, we also
explain the reason for ending the stop-loss provision that was
applicable during the transition period.
1. Outlier Payments
In the November 2004 IPF PPS final rule, we implemented
regulations at §412.424(d)(3)(i) to provide a per-case payment
for IPF stays that are extraordinarily costly. Providing
additional payments to IPFs for extremely costly cases
strongly improves the accuracy of the IPF PPS in determining
resource costs at the patient and facility level. These
additional payments reduce the financial losses that would
otherwise be incurred in treating patients who require more
costly care and, therefore, reduce the incentives for IPFs to
under-serve these patients.
We make outlier payments for discharges in which an IPF’s
estimated total cost for a case exceeds a fixed dollar loss
threshold amount (multiplied by the IPF’s facility-level
adjustments) plus the Federal per diem payment amount for the
case.
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In instances when the case qualifies for an outlier
payment, we pay 80 percent of the difference between the
estimated cost for the case and the adjusted threshold amount
for days 1 through 9 of the stay (consistent with the median
LOS for IPFs in FY 2002), and 60 percent of the difference for
day 10 and thereafter. We established the 80 percent and 60
percent loss sharing ratios because we were concerned that a
single ratio established at 80 percent (like other Medicare
PPSs) might provide an incentive under the IPF per diem
payment system to increase LOS in order to receive additional
payments. After establishing the loss sharing ratios, we
determined the current fixed dollar loss threshold amount of
$6,372 through payment simulations designed to compute a
dollar loss beyond which payments are estimated to meet the
2 percent outlier spending target.
a. Update to the Outlier Fixed Dollar Loss Threshold Amount
In accordance with the update methodology described in
§412.428(d), we proposed to update the fixed dollar loss
threshold amount used under the IPF PPS outlier policy. Based
on the regression analysis and payment simulations used to
develop the IPF PPS, we established a 2 percent outlier policy
which strikes an appropriate balance between protecting IPFs
from extraordinarily costly cases while ensuring the adequacy
CMS-1346-F 134
of the Federal per diem base rate for all other cases that are
not outlier cases.
We believe it is necessary to update the fixed dollar
loss threshold amount because an analysis of the latest
available data (that is, FY 2009 IPF claims) and rate
increases indicates that adjusting the fixed dollar loss
amount is necessary in order to maintain an outlier percentage
that equals 2 percent of total estimated IPF PPS payments.
In the May 2006 IPF PPS final rule (71 FR 27072), we
describe the process by which we calculate the outlier fixed
dollar loss threshold amount. We will continue to use this
process for RY 2012. We begin by simulating aggregate
payments with and without an outlier policy, and applying an
iterative process to determine an outlier fixed dollar loss
threshold amount that will result in outlier payments being
equal to 2 percent of total estimated payments under the
simulation. Based on this process, using the FY 2009 claims
data, we estimate that IPF outlier payments as a percentage of
total estimated payments are approximately 2.2 percent in RY
2011. Thus, for this final rule, we are updating the RY 2012
IPF outlier threshold amount to ensure that estimated RY 2012
outlier payments are approximately 2 percent of total
estimated IPF payments. The outlier fixed dollar loss
CMS-1346-F 135
threshold amount of $6,372 for RY 2011 will be changed to
$7,340 for RY 2012 to reduce estimated outlier payments and
thereby maintain estimated outlier payments at 2 percent of
total estimated aggregate IPF payments for RY 2012.
Final Rule Action: In this final rule, we are adopting
$7,340 as the fixed dollar loss threshold for RY 2012.
b. Statistical Accuracy of Cost-to-Charge Ratios
As previously stated, under the IPF PPS, an outlier
payment is made if an IPF’s cost for a stay exceeds a fixed
dollar loss threshold amount. In order to establish an IPF’s
cost for a particular case, we multiply the IPF’s reported
charges on the discharge bill by its overall cost-to-charge
ratio (CCR). This approach to determining an IPF’s cost is
consistent with the approach used under the IPPS and other
PPSs. In FY 2004, we implemented changes to the IPPS outlier
policy used to determine CCRs for acute care hospitals because
we became aware that payment vulnerabilities resulted in
inappropriate outlier payments. Under the IPPS, we
established a statistical measure of accuracy for CCRs in
order to ensure that aberrant CCR data did not result in
inappropriate outlier payments.
As we indicated in the November 2004 IPF PPS final rule,
because we believe that the IPF outlier policy is susceptible
CMS-1346-F 136
to the same payment vulnerabilities as the IPPS, we adopted an
approach to ensure the statistical accuracy of CCRs under the
IPF PPS (69 FR 66961). Therefore, we adopted the following
procedure in the November 2004 IPF PPS final rule:
• We calculated two national ceilings, one for IPFs located
in rural areas and one for IPFs located in urban areas. We
computed the ceilings by first calculating the national
average and the standard deviation of the CCR for both urban
and rural IPFs.
To determine the rural and urban ceilings, we multiplied
each of the standard deviations by 3 and added the result to
the appropriate national CCR average (either rural or urban).
The upper threshold CCR for IPFs in RY 2012 is 1.8199 for
rural IPFs, and 1.7643 for urban IPFs, based on CBSA-based
geographic designations. If an IPF’s CCR is above the
applicable ceiling, the ratio is considered statistically
inaccurate and we assign the appropriate national (either
rural or urban) median CCR to the IPF.
We apply the national CCRs to the following situations:
++ New IPFs that have not yet submitted their first
Medicare cost report.
CMS-1346-F 137
++ IPFs whose overall CCR is in excess of 3 standard
deviations above the corresponding national geometric mean
(that is, above the ceiling).
++ Other IPFs for which the Medicare contractor obtains
inaccurate or incomplete data with which to calculate a CCR.
For new IPFs, we are using these national CCRs until the
facility’s actual CCR can be computed using the first
tentatively or final settled cost report.
We are not making any changes to the procedures for
ensuring the statistical accuracy of CCRs in RY 2012.
However, we are updating the national urban and rural CCRs
(ceilings and medians) for IPFs for RY 2012 based on the CCRs
entered in the latest available IPF PPS Provider Specific
File.
Specifically, for RY 2012, and to be used in each of the
three situations listed above, we estimate the national
average CCR to be 0.6435 for rural IPFs and the national
average CCR of 0.5055 for urban IPFs. These calculations are
based on the IPF’s location (either urban or rural) using the
CBSA-based geographic designations.
A complete discussion regarding the national median CCRs
appears in the November 2004 IPF PPS final rule (69 FR 66961
through 66964).
CMS-1346-F 138
2. Expiration of the Stop-Loss Provision
In the November 2004 IPF PPS final rule, we implemented a
stop-loss policy that reduced financial risk to IPFs projected
to experience substantial reductions in Medicare payments
during the period of transition to the IPF PPS. This
stop-loss policy guaranteed that each facility received total
IPF PPS payments that were no less than 70 percent of its
TEFRA payments had the IPF PPS not been implemented. This
policy was applied to the IPF PPS portion of Medicare payments
during the 3-year transition.
In the implementation year, the 70 percent of TEFRA
payment stop-loss policy required a reduction in the
standardized Federal per diem and ECT base rates of
0.39 percent in order to make the stop-loss payments budget
neutral. As described in the May 2008 IPF PPS notice for
RY 2009, we increased the Federal per diem base rate and ECT
rate by 0.39 percent because these rates were reduced by
0.39 percent in the implementation year to ensure
stop-loss payments were budget neutral.
The stop-loss provision ended during RY 2009 (that is for
discharges occurring on or after July 1, 2008 through
June 30, 2009). The stop-loss policy is no longer applicable
under the IPF PPS.
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3. Future Refinements
As we have noted throughout the RY 2012 IPF PPS proposed
rule as well as in this final rule, we have delayed making
refinements to the IPF PPS until we have adequate IPF PPS data
on which to base those decisions. Now that we are
approximately 5 years into the system, we believe that we have
enough data to begin that process. We have begun the
necessary analysis to better understand IPF industry practices
so that we may refine the IPF PPS as appropriate. While we
did not propose to make the following refinements in the
RY 2012 IPF PPS proposed rulemaking, we believe that in
the rulemaking for FY 2013 we will be ready to present the
results of our analysis.
Specifically, with the change from ICD-9-CM to ICD-10-CM
coming in FY 2013, we are analyzing the comorbidity categories
and related codes for utilization and continued suitability.
While we would continue to provide for comorbidity
adjustments, we are analyzing whether the current groupings
and codes continue to be warranted and whether other
appropriate codes should be added. Also, we are analyzing our
current policies for interrupted stays, readmissions, same-day
transfers, and length of stays in order to assess whether
these policies continue to be appropriate. Additionally, in
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accordance with section 1886(s)(4) of the Act, which was added
by section 10322 of the Affordable Care Act, IPFs must submit
data on quality measures, as specified by the Secretary, for
each RY beginning in RY 2014. If data is not submitted, any
annual update to a Federal base rate for discharges for the
payments shall be reduced by 2 percentage points. Quality
measures are currently being developed to effectuate this
requirement. Lastly, for the first time MedPAC will become
involved in evaluating facility margins and will likely make
recommendations regarding the appropriate payment update to
IPFs based on their findings. CMS is interested in gaining
feedback on these areas for future refinements and therefore
we invite comments on these issues described in this section
at this time.
Comment: A few commenters strongly supported the need to
develop and implement quality measures for the IPF PPS. They
strongly encouraged CMS to review and consider the Hospital-
based Inpatient Psychiatric Services (HBIPS) core measures as
a foundation for quality measures for the IPF PPS. They
pointed out that these quality measures are now in effect for
all Joint Commission-accredited psychiatric hospitals and are
available for use by psychiatric units in acute care
hospitals.
CMS-1346-F 141
Response: We appreciate the support for the development
and implementation of quality measures, as well as the
recommendation regarding the Hospital-based Inpatient
Psychiatric Services (HBIPS) core measures for IPFs. In
accordance with section 1886(s)(4) of the SSA (the Act), which
was added by section 10322 of the Affordable Care Act, IPFs
must submit data on quality measures as specified by the
Secretary, for each RY (that coincides with a FY) beginning in
FY 2014. Quality measures are currently being developed to
effectuate this requirement. To implement this, a Technical
Expert Panel (TEP) has been assembled to develop quality
measures for inpatient psychiatric hospitals and psychiatric
units. The TEP consists of a wide cross-section of today’s
learned scholars and experts in the field including the Joint
Commission on Hospital and Accreditation (formerly Joint
Commission on Accreditation of Healthcare Organizations), to
provide valued input on quality measure development. The TEP
is charged with identifying measures that reflect current
knowledge regarding effective, evidenced-based treatments for
psychiatric disorders; addressing the range of treatments and
care processes provided at IPFs; and identifying measures
applicable to all Medicare beneficiaries treated in IPFs.
Therefore, consistent with the views of these commenters, CMS
CMS-1346-F 142
is reviewing and taking into consideration those HBIPS core
measures to help form a foundation for quality measures as
directed under the Act.
Comment: A few commenters stated that although the core
adjustments to the system, such as age length of stay and
comorbidities have been effective in addressing the
variability in the costs of treating Medicare patients with
psychiatric disorders, they recommend that the key adjustments
(such as age, comorbidities, and length of stays) be analyzed
to determine if any changes are warranted.
Response: We agree with the commenters on the need to
analyze patient characteristics such as age, comorbidities and
length of stays when we refine the IPF PPS system. As
explained in the RY 2012 IPF PPS proposed rule, in preparation
for the migration from ICD-9-CM to ICD-10-CM in FY 2013, we
plan to analyze the comorbidity categories and related codes
for utilization and continued suitability. We will make
determinations as to whether the current groupings and codes
continue to be warranted and whether other appropriate codes
should also be added. We are also analyzing our current
policies on interrupted stays, readmissions, same-day
transfers, and length of stays in order to assess whether
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these policies continue to be appropriate. We welcome the
support by these commenters for such future refinements.
VII. Regulations Text Corrections
We proposed several minor corrections to the regulations
text to address typographical errors. We noted that these
proposed changes do not impact policy. We proposed to correct
typographical errors at §412.404, “Conditions for payment
under the prospective payment system for inpatient hospital
services of psychiatric facilities; §412.422, “Basis of
payment;” and §412.426, “Transition period.” In addition to
these corrections, we proposed to add clarifying language at
§412.426 and §412.432(d), “Method of payment under the
inpatient psychiatric facility prospective payment system.”
The proposed revisions are described below.
Section 412.404(a)(1)
Under §412.404, in paragraph (a)(1), “General
requirements,” we proposed to delete the word “in” between the
words “furnished” and “to Medicare”.
CMS-1346-F 144
Section 412.422(b)(2)
Under §412.422, in paragraph (b)(2), we proposed to
correct the reference to §413.80 to §413.89. The regulations
covered at §413.89 include bad debts, charity, and courtesy
allowances.
Section 412.426(a)
Under §412.426, in paragraph (a), “Duration of transition
period and composition of the blended transition payment,” we
proposed to replace “Except as provided in paragraph (d) of
this section” with “Except as provided in paragraph (c) of
this section.” There is no paragraph (d); this exception
should refer to paragraph (c), “Treatment of new inpatient
psychiatric facilities.”
Also in paragraph (a), we proposed to add the words “of
this part” after “as specified in §412.424(d)” and “of this
section” after “as specified under paragraph (b).” This
regulatory language is required by the Federal Register.
In each of paragraphs §412.426(a)(1) through (a)(3), we
proposed to delete the words “on or” directly before the words
“before January”. For example, paragraph (a)(1) currently
states, “For cost reporting periods beginning on or after
January 1, 2005 and on or before January 1, 2006…” We
proposed that this statement read: “For cost reporting
CMS-1346-F 145
periods beginning on or after January 1, 2005 and before
January 1, 2006…” This correction does not represent a change
in policy. Rather, it is a correction to conform the
regulation text to our policy, which was established in our
final rule that appeared in the Federal Register on November
15, 2004 (69 FR 66980) (which was subsequently corrected on
April 1, 2005 (70 FR 16729)). It is clear that the current
regulation text is incorrect. The same January date (for
example, January 1, 2007) cannot be both the date on which a
new transition period begins and the date on which the
previous transition period ends. Our policy, since we
established the transition, has been to begin a transition
period on or after a January 1 date and to end that transition
period before the next transition period begins. Because our
regulation text does not accurately reflect our actual policy,
we proposed this correction.
At §412.426(a)(4), we proposed to replace the statement,
“For cost reporting periods beginning on or after July 1,
2008, payment is based entirely on the Federal per diem
payment amount” with the following statement: “For cost
reporting periods beginning on or after January 1, 2008,
payment is based entirely on the Federal per diem payment
amount.” The transition period during which payment was based
CMS-1346-F 146
on a combination of the Federal per diem payment amount and
TEFRA payments, ended on January 1, 2008, not July 1, 2008.
Comment: Two commenters expressed serious concern that
CMS is making retroactive policy changes to the regulations
text for the 3-year transition period for the IPF PPS rather
than minor corrections to address typographical errors.
Response: We disagree with the commenters. We are
simply making minor corrections to the regulations at §412.426
covering the transition period to address typographical errors
to the IPF PPS. In the November 2004 IPF PPS final rule, we
provided for a 3-year transition period. During this 3-year
transition period, an IPF’s total payment under the PPS was
based on an increasing percentage of the Federal rate with a
corresponding decreasing percentage of the IPF PPS payment
that was based on reasonable cost concepts. However,
effective for cost reporting periods beginning on or after
January 1, 2008, IPF PPS payments are based on 100 percent of
the Federal rate. This correction does not represent a policy
change, and therefore is not a retroactive change. Rather, it
is a correction to conform the regulation text to our policy,
which was established in our final rule that appeared in the
Federal Register on November 15, 2004 (69 FR 66980) (which was
subsequently corrected on April 1, 2005 (70 FR 16729)). It is
CMS-1346-F 147
clear that the current regulation text is incorrect. The same
January date (for example, January 1, 2007) cannot be both the
date on which a new transition period begins and the date on
which the previous transition period ends. Our policy, since
we established the transition, has been to begin a transition
period on or after a January 1 date and to end that transition
period before the next transition period begins. Because our
regulation text does not accurately reflect our actual policy,
we proposed this correction.
In addition for §412.426, in paragraph (a), “Duration of
transition period and composition of the blended transition
payment,” we intended to propose, but did not, to replace “on
or after January 1, 2005 through January 1, 2008” with “on or
after January 1, 2005 through December 31,2007”. Here again,
this correction does not represent a policy change; it is
merely a correction to conform the regulation text to our
policy, and it is consistent with the other typographical
errors we are correcting in §412.426.
Section 412.432(d)
Under §412.432, in paragraph (d), “Outlier payments,” we
proposed to add the words “of this part” after “subject to the
cost report settlement specified in §412.84(i) and
§412.84(m).” This regulatory language is required by the
CMS-1346-F 148
Federal Register and clarifies that §412.84(i) and §412.84(m)
refer to 42 CFR part 412, “Prospective Payment Systems for
Inpatient Hospital Services.”
VIII. Collection of Information Requirements
This document does not impose any information collection
and recordkeeping requirements. Consequently, it need not be
reviewed by the Office of Management and Budget under the
authority of the Paperwork Reduction Act of 1995 (44 U.S.C.
35).
IX. Regulatory Impact Analysis
A. Statement of Need
This final rule will update the prospective payment rates
for Medicare inpatient hospital services provided by inpatient
psychiatric facilities for discharges occurring during the RY
beginning July 1, 2011 through September 30, 2012. We are
applying the 15-month FY 2008-based RPL market basket increase
of 3.2 percent, adjusted by the 0.25 percentage point
reduction, as required by section 1886(s)(3)(A)of the Act. In
addition, the rule implements policy changes affecting the IPF
PPS teaching adjustment, as well as makes some clarifications
and corrections to terminology and regulations text.
CMS-1346-F 149
B. Overall Impact
We have examined the impact of this rule as required by
Executive Order 12866 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 (March 22,
1995; Pub. L. 104-4), Executive Order 13132 on Federalism
(August 4, 1999) and the Congressional Review Act (5 U.S.C.
804(2)).
Executive Orders 12866 and 13563 direct agencies to
assess all costs and benefits of available regulatory
alternatives and, if regulation is necessary, to select
regulatory approaches that maximize net benefits (including
potential economic, environmental, public health and safety
effects, distributive impacts, and equity). A regulatory
impact analysis (RIA) must be prepared for major rules with
economically significant effects ($100 million or more in any
1 year). This final rule has been designated an
“economically” significant rule, under section 3(f) (1) of
Executive Order 12866 and a major rule under the Congressional
CMS-1346-F 150
Review Act. Accordingly, the rule has been reviewed by the
Office of Management and Budget.
We estimate that the total impact of these changes for
estimated RY 2012 payments compared to estimated RY 2011
payments would be an increase of approximately $120 million
(this reflects a $130 million increase from the update to the
payment rates and a $10 million decrease due to the update to
the outlier threshold amount to decrease outlier payments from
approximately 2.2 percent in RY 2011 to 2.0 percent in RY
2012).
The RFA requires agencies to analyze options for
regulatory relief of small entities, if a rule has a
significant impact on a substantial number of small entities.
For purposes of the RFA, small entities include small
businesses, nonprofit organizations, and small governmental
jurisdictions. Most IPFs and most other providers and
suppliers are small entities, either by nonprofit status or by
having revenues of $7 million to $34.5 million in any one year
(for details, refer to the SBA Small Business Size Standards
found at http://ecfr.gpoaccess.gov/cgi/t/text/text-
idx?c=ecfr&sid=2465b064ba6965cc1fbd2eae60854b11&rgn=div8&view=
text&node=13:1.0.1.1.16.1.266.9&idno=13). Because we lack
data on individual hospital receipts, we cannot determine the
CMS-1346-F 151
number of small proprietary IPFs or the proportion of IPFs’
revenue that is derived from Medicare payments. Therefore, we
assume that all IPFs are considered small entities. The
Department of Health and Human Services generally uses a
revenue impact of 3 to 5 percent as a significance threshold
under the RFA.
As shown in Table 15, we estimate that the revenue impact
of this final rule on all IPFs is to increase estimated
Medicare payments by about 2.74 percent, with rural IPFs
estimated to receive an increase in estimated Medicare
payments greater than 3 percent (an aggregate 3.80 percent).
As a result, the Secretary has determined that this final rule
will not have a significant impact on a substantial number of
small entities. Medicare fiscal intermediaries, Medicare
Administrative Contractors, and carriers are not considered to
be small entities. Individuals and States are not included in
the definition of a small entity. We solicited comment on the
above analysis.
In addition, section 1102(b) of the Social Security Act
requires us to prepare a regulatory impact analysis, if a rule
may have a significant impact on the operations of a
substantial number of small rural hospitals. This analysis
must conform to the provisions of section 604 of the RFA. For
CMS-1346-F 152
purposes of section 1102(b) of the Act, we define a small
rural hospital as a hospital that is located outside of a
metropolitan statistical area and has fewer than 100 beds. As
discussed in detail below, the rates and policies set forth in
this final rule will not have an adverse impact on the rural
hospitals based on the data of the 320 rural units and 67
rural hospitals in our database of 1,653 IPFs for which data
were available. Therefore, the Secretary has determined that
this final rule will not have a significant impact on the
operations of a substantial number of small rural hospitals.
Section 202 of the Unfunded Mandates Reform Act of 1995
(UMRA) also requires that agencies assess anticipated costs
and benefits before issuing any rule whose mandates require
spending in any 1 year of $100 million in 1995 dollars,
updated annually for inflation. In 2011, that threshold is
approximately $136 million. This final rule will not impose
spending costs on State, local, or tribal governments in the
aggregate, or by the private sector, of $136 million.
Executive Order 13132 establishes certain requirements
that an agency must meet when it promulgates a proposed rule
(and subsequent final rule) that imposes substantial direct
requirement costs on State and local governments, preempts
State law, or otherwise has Federalism implications. As
CMS-1346-F 153
stated above, this final rule would not have a substantial
effect on State and local governments.
C. Anticipated Effects of the Final Rule
We discuss below the historical background of the IPF PPS
and the impact of this final rule on the Federal Medicare
budget and on IPFs.
1. Budgetary Impact
As discussed in the November 2004 and May 2006 IPF PPS
final rules, we applied a budget neutrality factor to the
Federal per diem and ECT base rates to ensure that total
estimated payments under the IPF PPS in the implementation
period would equal the amount that would have been paid if the
IPF PPS had not been implemented. The budget neutrality
factor includes the following components: outlier adjustment,
stop-loss adjustment, and the behavioral offset. As discussed
in the May 2008 IPF PPS notice (73 FR 25711), the stop-loss
adjustment is no longer applicable under the IPF PPS.
In accordance with §412.424(c)(3)(ii), we indicated that
we would evaluate the accuracy of the budget neutrality
adjustment within the first 5 years after implementation of
the payment system. We may make a one-time prospective
adjustment to the Federal per diem and ECT base rates to
account for differences between the historical data on cost-
CMS-1346-F 154
based TEFRA payments (the basis of the budget neutrality
adjustment) and estimates of TEFRA payments based on actual
data from the first year of the IPF PPS. As part of that
process, we will reassess the accuracy of all of the factors
impacting budget neutrality. In addition, as discussed in
section IV.C.6 of this final rule, we are using the wage index
and labor-related share in a budget neutral manner by applying
a wage index budget neutrality factor to the Federal per diem
and ECT base rates. Therefore, the budgetary impact to the
Medicare program of this final rule will be due to the
15-month market basket update for RY 2012 of 3.2 percent (see
section IV.C.5 of this final rule) as adjusted by the “other
adjustment” of -0.25 percentage point according to section
1886(s)(3)(A) of the Act, and the update to the outlier fixed
dollar loss threshold amount.
We estimate that the RY 2012 impact would be a net
increase of $120 million in payments to IPF providers. This
reflects an estimated $130 million increase from the update to
the payment rates and a $10 million decrease due to the update
to the outlier threshold amount to decrease estimated outlier
payments from approximately 2.2 percent in RY 2011 to 2.0
percent in RY 2012.
2. Impact on Providers
CMS-1346-F 155
To understand the impact of the changes to the IPF PPS on
providers, discussed in this final rule, it is necessary to
compare estimated payments under the IPF PPS rates and factors
for RY 2012 versus those under RY 2011. The estimated
payments for RY 2011 and RY 2012 will be 100 percent of the
IPF PPS payment, since the transition period has ended and
stop-loss payments are no longer paid. We determined the
percent change of estimated RY 2012 IPF PPS payments to RY
2011 IPF PPS payments for each category of IPFs. In addition,
for each category of IPFs, we have included the estimated
percent change in payments resulting from the update to the
outlier fixed dollar loss threshold amount, the labor-related
share and wage index changes for the RY 2012 IPF PPS, and the
15-month market basket update for RY 2012, as adjusted by the
“other adjustment” according to section 1886(s)(3)(A) of the
Act.
To illustrate the impacts of the RY 2012 changes in this
final rule, our analysis begins with a RY 2011 baseline
simulation model based on FY 2009 IPF payments inflated to the
midpoint of RY 2011 using IHS Global Insight’s most recent
forecast of the market basket update (see section IV.C.5 of
this final rule); the estimated outlier payments in RY 2011;
the CBSA designations for IPFs based on OMB’s MSA definitions
CMS-1346-F 156
after June 2003; the FY 2010 pre-floor, pre-reclassified
hospital wage index; the RY 2011 labor-related share; and the
RY 2011 percentage amount of the rural adjustment. During the
simulation, the total estimated outlier payments are
maintained at 2 percent of total IPF PPS payments.
Each of the following changes is added incrementally to
this baseline model in order for us to isolate the effects of
each change:
• The update to the outlier fixed dollar loss threshold
amount.
• The FY 2011 pre-floor, pre-reclassified hospital wage
index and RY 2012 labor-related share.
• The 15-month market basket update for RY 2012 of 3.2
percent adjusted by the 0.25 percentage point reduction in
accordance with section 1886(s)(3)(A) of the Act.
Our final comparison illustrates the percent change in
payments from RY 2011 (that is, July 1, 2010 to June 30, 2011)
to RY 2012 (that is, July 1, 2011 to September 30, 2012)
including all the changes in this final rule.
CMS-1346-F 157
TABLE 15—IPF Impact Table for RY 2012
Projected Impacts (Percent Change for RY 2012)
CBSA
Wage
Index &
Labor
Share
(4)
0.00
Number of
Facilities
(2)
1,653
Outlier
(3)
-0.21
Adjusted
Market
Basket
Update1
(5)
2.95
Total
Percent
Change2
(6)
2.74
Facility by Type
(1)
All Facilities
Total Urban
Total Rural
Urban DPU
Urban CAH unit
Urban hospital
Rural DPU
Rural CAH unit
Rural hospital
Freestanding IPF
By Type of Ownership:
Urban Psychiatric Hospitals
Government
Non-Profit
For-Profit
Rural Psychiatric Hospitals
Government
Non-Profit
For-Profit
IPF Units
By Type of Ownership:
Urban DPU
Government
Non-Profit
For-Profit
Urban CAH
Government
Non-Profit
Rural DPU
Government
Non-Profit
For-Profit
Rural CAH
1,266
387
854
10
402
267
53
67
169
117
116
43
9
15
148
589
117
4
6
64
153
50
-0.21
-0.18
-0.28
-0.84
-0.06
-0.24
-0.13
-0.06
-0.08
-0.07
-0.04
-0.07
-0.01
-0.03
-0.43
-0.27
-0.17
-1.57
-0.31
-0.25
-0.22
-0.27
-0.16
1.02
-0.23
-0.20
-0.05
1.05
0.64
1.10
-0.34
0.01
0.20
0.61
1.03
2.25
-0.30
-0.28
0.07
-0.18
-0.21
1.05
0.97
1.28
2.95
2.95
2.95
2.95
2.95
2.95
2.95
2.95
2.95
2.95
2.95
2.95
2.95
2.95
2.95
2.95
2.95
2.95
2.95
2.95
2.95
2.95
2.57
3.80
2.43
1.86
2.84
3.77
3.47
4.02
2.52
2.88
3.12
3.51
4.00
5.23
2.21
2.38
2.84
1.09
2.41
3.76
3.71
3.97
CMS-1346-F 158
1,428
130
0.12
-0.53
-0.35
-0.39
-0.19
-0.18
-0.43
-0.40
66
29
21
28
4
2.95
2.95
2.95
2.16
2.15
2.88
2.22
3.28
3.59
3.61
0.42
0.78
0.85
-0.08
-0.15
-0.20
2.95
2.95
2.95
2.95
117
273
233
274
166
149
228
87
126
Government
Non-Profit
For-Profit
By Teaching Status:
Non-teaching
Less than 10% interns and residents
to beds
10% to 30% interns and residents to
beds
More than 30% interns and residents
to beds
By Region:
New England
Mid-Atlantic
South Atlantic
East North Central
East South Central
West North Central
West South Central
Mountain
Pacific
By Bed Size:
Psychiatric Hospitals
Under 12 beds
Beds: 12-24
Beds: 25-49
Beds: 50-75
Over 75 beds
Psychiatric Units
3.34
2.95
0.75
-0.34
189
Under 12 beds
2.83
2.95
0.15
-0.26
515
Beds: 12-24
2.50
2.95
-0.15
-0.28
313
Beds: 25-49
2.62
2.95
-0.05
-0.27
105
Beds: 50-75
Over 75 beds
2.11
2.95
-0.57
-0.27
62
1 This column reflects the impact of the 15-month market basket update for RY 2012 of 3.2 percent, reduced by
0.25 percentage point in accordance with section 1886(s)(3)(A) of the Act.
2Percent changes in estimated payments from RY 2011 to RY 2012 include all changes of this rule. Note, the
products of these impacts may be different from the percentage changes shown here due to rounding effects.
3. Results
-0.91
-0.74
0.19
0.22
0.62
0.04
1.18
0.03
-0.43
-0.23
-0.19
-0.17
-0.24
-0.16
-0.21
-0.18
-0.17
-0.29
1.78
2.00
2.96
2.93
3.43
2.77
3.97
2.80
2.19
2.95
2.95
2.95
2.95
2.95
2.95
2.95
2.95
2.95
0.02
1.08
0.32
0.16
-0.12
-0.43
-0.13
-0.15
-0.05
-0.04
2.52
3.93
3.11
3.06
2.78
2.95
2.95
2.95
2.95
2.95
12
71
70
72
244
Table 15 above displays the results of our analysis. The
table groups IPFs into the categories listed below based on
CMS-1346-F 159
characteristics provided in the Provider of Services (POS)
file, the IPF provider specific file, and cost report data
from HCRIS:
• Facility Type
• Location
• Teaching Status Adjustment
• Census Region
• Size
The top row of the table shows the overall impact on the 1,653
IPFs included in this analysis.
In column 3, we present the effects of the update to the
outlier fixed dollar loss threshold amount. We estimate that
IPF outlier payments as a percentage of total IPF payments are
2.2 percent in RY 2011. Therefore, we are adjusting the
outlier threshold amount from $6,372 in RY 2011 to $7,340 in
RY 2012 in order to set total estimated outlier payments equal
to 2 percent of total payments in RY 2012. The estimated
change in total IPF payments for RY 2012, therefore, includes
an approximate 0.2 percent decrease in payments because the
outlier portion of total payments is expected to decrease from
approximately 2.2 percent to 2 percent.
CMS-1346-F 160
The overall aggregate effect of this outlier adjustment
update (as shown in column 3 of table 15), across all hospital
groups, is to decrease total estimated payments to IPFs by
0.21 percent. We do not estimate that any group of IPFs will
experience an increase in payments from this update. The
largest decrease in payments is estimated to reflect a 1.57
percent decrease in payments to urban government IPF units
located in CAHs which is due to the small number of IPFs of
that type and the high volume of outlier payments made to
those IPFs.
In column 4, we present the effects of the budget-neutral
update to the labor-related share and the wage index
adjustment under the CBSA geographic area definitions
announced by OMB in June 2003. This is a comparison of the
simulated RY 2012 payments under the FY 2011 hospital wage
index under CBSA classification and associated labor-related
share to the simulated RY 2011 payments under the FY 2010
hospital wage index under CBSA classifications and associated
labor-related share. We note that there is no projected
change in aggregate payments to IPFs, as indicated in the
first row of column 4. However, there will be distributional
effects among different categories of IPFs. For example, we
estimate a 1.02 percent increase in overall payments to rural
CMS-1346-F 161
IPFs, with the largest increase in payments of 2.25 percent
for rural, for-profit freestanding psychiatric hospitals. In
addition, we estimate the largest decrease in payments to be a
0.91 percent decrease for IPFs in the New England region.
Column 5 shows the estimated effect of the update to the
IPF PPS payment rates, which includes a 3.2 percent 15-month
market basket update adjusted by the 0.25 percentage point
reduction in accordance with section 1886(s)(3)(A).
Column 6 compares our estimates of the changes reflected
in this final rule for RY 2012, to our payments for RY 2011
(without these changes). This column reflects all RY 2012
changes relative to RY 2011. The average estimated increase
for all IPFs is approximately 2.74 percent. This estimated
net increase includes the effects of the 3.2 percent 15-month
market basket update adjusted by the “other adjustment” of –
0.25 percentage point, as required by section 1886(s)(3)(A) of
the Act. It also includes the overall estimated 0.2 percent
decrease in estimated IPF outlier payments from the update to
the outlier fixed dollar loss threshold amount. Since we are
making the updates to the IPF labor-related share and wage
index in a budget-neutral manner, they will not affect total
estimated IPF payments in the aggregate. However, they will
affect the estimated distribution of payments among providers.
CMS-1346-F 162
Overall, no IPFs are estimated to experience a net
decrease in payments as a result of the updates in this rule.
IPFs in urban areas will experience a 2.57 percent increase
and IPFs in rural areas will experience a 3.80 percent
increase. The largest payment increase is estimated at 5.23
percent for rural, for-profit freestanding psychiatric
hospitals. This is due to the larger than average positive
effect of the FY 2011 CBSA wage index and labor-related share
updates for rural IPFs in this category.
4. Effect on the Medicare Program
Based on actuarial projections resulting from our
experience with other PPSs, we estimate that Medicare spending
(total Medicare program payments) for IPF services over the
next 5 years would be as shown in Table 16 below.
TABLE 16- Estimated Payments
Rate Year
July 1, 2011 to June 30, 2012
July 1, 2012 to June 30, 2013
July 1, 2013 to June 30, 2014
July 1, 2014 to June 30, 2015
July 1, 2015 to June 30, 2016
Dollars in Millions
$4,615
$4,945
$5,330
$5,775
$6,273
These estimates are based on the current forecast of the
increases in the RPL market basket, including an adjustment
for productivity, for the RY beginning in 2012 and each
CMS-1346-F 163
subsequent RY, as required by section 1886(s)(3)(A) of the
Act, as follows:
(cid:129) 2.8 percent for rate years beginning in 2011
(RY 2012).
(cid:129) 1.7 percent for rate years beginning in 2012
(RY 2013).
(cid:129) 2.0 percent for rate years beginning in 2013
(RY 2014).
(cid:129) 2.2 percent for rate years beginning in 2014
(RY 2015).
(cid:129) 2.4 percent for rate years beginning in 2015
(RY 2016).
The estimates in Table 16 also include the application of
the “other adjustment,” as required by section 1886(s)(3)(A)
of the Act, as follows:
(cid:129) -0.25 percentage point for rate years beginning in
2011.
(cid:129) -0.1 percentage point for rate years beginning in
2012.
(cid:129) -0.1 percentage point for rate years beginning in
2013.
(cid:129) -0.3 percentage point for rate years beginning in
2014.
CMS-1346-F 164
(cid:129) -0.2 percentage point for rate years beginning in
2015.
We estimate that there would be a change in
fee-for-service Medicare beneficiary enrollment as follows:
(cid:129) 3.3 percent in RY 2012.
(cid:129) 3.7 percent in RY 2013.
(cid:129) 4.3 percent in RY 2014.
(cid:129) 4.9 percent in RY 2015.
(cid:129) 5.6 percent in RY 2016.
5. Effect on Beneficiaries
Under the IPF PPS, IPFs would receive payment based on
the average resources consumed by patients for each day. We
do not expect changes in the quality of care or access to
services for Medicare beneficiaries under the RY 2012 IPF PPS.
In fact, we believe that access to IPF services will be
enhanced due to the patient- and facility-level adjustment
factors, all of which are intended to adequately reimburse
IPFs for expensive cases. Finally, the outlier policy is
intended to assist IPFs that experience high-cost cases.
D. Alternatives Considered
The statute does not specify an update strategy for the
IPF PPS and is broadly written to give the Secretary
discretion in establishing an update methodology. Therefore,
CMS-1346-F 165
we are updating the IPF PPS using the methodology published in
the November 2004 IPF PPS final rule.
We note that this final rule initiates policy changes
with regard to the IPF PPS, and it also provides an update to
the rates for RY 2012. We considered making refinements to
the IPF PPS in this final rule. However, more time is
required to assess the data and will therefore once again
delay running the regression analysis until we have adequate
IPF PPS data. We have initiated the necessary analysis to
better understand IPF industry practices. We did not consider
rebasing the IPF PPS for concerns that rebasing would be too
costly (re-calculate the cost-per-day) and time consuming.
E. Accounting Statement
As required by OMB Circular A-4 (available at
http://www.whitehouse.gov/omb/circulars/a004/a-4.pdf), in
Table 17 below, we have prepared an accounting statement
showing the classification of the expenditures associated with
the provisions of this final rule. This table provides our
best estimate of the increase in Medicare payments under the
IPF PPS as a result of the proposed changes presented in this
final rule and based on the data for 1,653 IPFs in our
database. All expenditures are classified as transfers to IPF
Medicare providers.
CMS-1346-F 166
Table 17—Accounting Statement: Classification of Estimated
Expenditures, from the 2011 IPF PPS RY to the 2012 IPF PPS RY
(in Millions)
Category
Annualized Monetized Transfers
From Whom To Whom?
TRANSFERS
$120
Federal Government To IPF Medicare
Providers
In accordance with the provisions of Executive Order
12866, this regulation was reviewed by the Office of
Management and Budget.
CMS-1346-F 167
List of Subjects in 42 CFR Part 412
Administrative practice and procedure, Health
facilities, Medicare, Puerto Rico, Reporting and
recordkeeping requirements.
CMS-1346-F 168
For the reasons set forth in the preamble, the Centers
for Medicare & Medicaid Services amends 42 CFR chapter IV
as set forth below:
PART 412—PROSPECTIVE PAYMENT SYSTEMS FOR INPATIENT HOSPITAL
SERVICES
1. The authority citation for part 412 continues to
read as follows:
Authority: Secs 1102, 1862, and 1871 of the Social
Security Act (42 U.S.C. 1302, 1395y, and 1395hh).
Subpart N—Prospective payment system for inpatient hospital
services of inpatient psychiatric facilities
2. In §412.402, the definition of “Inpatient
psychiatric facilities prospective payment system rate
year” is added in alphabetical order to read as follows:
§412.402 Definitions.
*
*
*
*
*
Inpatient psychiatric facilities prospective payment
system rate year means —
(1) Through June 30, 2011, the 12-month period of
July 1 through June 30.
(2) Beginning July 1, 2011, the 15-month period of
July 1, 2011 through September 30, 2012.
CMS-1346-F 169
(3) Beginning October 1, 2012, the 12-month period of
October 1 through September 30, referred to as Fiscal Year
(FY).
*
*
*
*
*
3. Section 412.404 is amended by revising paragraph
(a)(1) to read as follows:
§412.404 Conditions for payment under the prospective
payment system for inpatient hospital services of
psychiatric facilities.
(a) * * *
(1) Effective for cost reporting periods beginning on
or after January 1, 2005, an inpatient psychiatric facility
must meet the conditions of this section to receive payment
under the prospective payment system described in this
subpart for inpatient hospital services furnished to
Medicare Part A fee-for-service beneficiaries.
*
*
*
*
*
4. Section 412.422 is amended by revising paragraph
(b)(2) to read as follows:
§412.422 Basis of payment.
*
*
(b) *
*
*
*
*
*
CMS-1346-F 170
(2) In addition to the Federal per diem payment
amounts, inpatient psychiatric facilities receive payment
for bad debts of Medicare beneficiaries, as specified in
§413.89 of this chapter.
5. Section 412.424 is amended by adding a new
paragraph (d)(1)(iii)(F) to read as follows:
§412.424 Methodology for calculating the Federal per diem
payment amount.
*
*
*
(d) *
(1) *
*
*
*
(iii) * *
*
*
*
*
(F) Closure of an IPF. (1) For cost reporting
periods beginning on or after July 1, 2011, an IPF may
receive a temporary adjustment to its FTE cap to reflect
residents added because of another IPF’s closure if the IPF
meets the following criteria:
(i) The IPF is training additional residents from an
IPF that closed on or after July 1, 2011.
(ii) No later than 60 days after the IPF begins to
train the residents, the IPF submits a request to its
Medicare contractor for a temporary adjustment to its cap,
documents that the IPF is eligible for this temporary
CMS-1346-F 171
adjustment by identifying the residents who have come from
the closed IPF and have caused the IPF to exceed its cap,
and specifies the length of time the adjustment is needed.
(2) Closure of an IPF’s residency training program.
If an IPF that closes its residency training program on or
after July 1, 2011, agrees to temporarily reduce its FTE
cap according to the criteria specified in paragraph
(d)(1)(iii)(F)(2)(ii) of this section, another IPF(s) may
receive a temporary adjustment to its FTE cap to reflect
residents added because of the closure of the residency
training program if the criteria specified in paragraph
(d)(1)(iii)(F)(2)(i) of this section are met.
(i) Receiving IPF(s). For cost reporting periods
beginning on or after July 1, 2011, an IPF may receive a
temporary adjustment to its FTE cap to reflect residents
added because of the closure of another IPF’s residency
training program if the IPF is training additional
residents from the residency training program of an IPF
that closed a program; and if no later than 60 days after
the IPF begins to train the residents, the IPF submits to
its Medicare Contractor a request for a temporary
adjustment to its FTE cap, documents that it is eligible
for this temporary adjustment by identifying the residents
CMS-1346-F 172
who have come from another IPF’s closed program and have
caused the IPF to exceed its cap, specifies the length of
time the adjustment is needed, and submits to its Medicare
contractor a copy of the FTE reduction statement by the
hospital that closed its program, as specified in paragraph
(d)(1)(iii)(F)(2)(ii) of this section.
(ii) IPF that closed its program. An IPF that agrees
to train residents who have been displaced by the closure
of another IPF’s program may receive a temporary FTE cap
adjustment only if the hospital with the closed program
temporarily reduces its FTE cap based on the FTE residents
in each program year training in the program at the time of
the program’s closure. This yearly reduction in the FTE
cap will be determined based on the number of those
residents who would have been training in the program
during that year had the program not closed. No later than
60 days after the residents who were in the closed program
begin training at another hospital, the hospital with the
closed program must submit to its Medicare contractor a
statement signed and dated by its representative that
specifies that it agrees to the temporary reduction in its
FTE cap to allow the IPF training the displaced residents
to obtain a temporary adjustment to its cap; identifies the
CMS-1346-F 173
residents who were in training at the time of the program’s
closure; identifies the IPFs to which the residents are
transferring once the program closes; and specifies the
reduction for the applicable program years.
*
*
*
*
*
6. Section 412.426 is amended by revising paragraph
(a) to read as follows:
§412.426 Transition period.
(a) Duration of transition period and composition of
the blended transition payment. Except as provided in
paragraph (c) of this section, for cost reporting periods
beginning on or after January 1, 2005 through December 31,
2007, an inpatient psychiatric facility receives a payment
comprised of a blend of the estimated Federal per diem
payment amount, as specified in §412.424(d) of this subpart
and a facility-specific payment as specified under
paragraph (b) of this section.
(1) For cost reporting periods beginning on or after
January 1, 2005 and before January 1, 2006, payment is
based on 75 percent of the facility-specific payment and 25
percent is based on the Federal per diem payment amount.
(2) For cost reporting periods beginning on or after
January 1, 2006 and before January 1, 2007, payment is
CMS-1346-F 174
based on 50 percent of the facility-specific payment and
50 percent is based on the Federal per diem payment amount.
(3) For cost reporting periods beginning on or after
January 1, 2007 and before January 1, 2008, payment is
based on 25 percent of the facility-specific payment and
75 percent is based on the Federal per diem payment amount.
(4) For cost reporting periods beginning on or after
January 1, 2008, payment is based entirely on the Federal
per diem payment amount.
*
*
*
*
*
7. Section 412.432 is amended by revising paragraph (d) to
read as follows:
§412.432 Method of payment under the inpatient psychiatric
facility prospective payment system.
*
*
*
*
*
(d) Outlier payments. Additional payments for
outliers are not made on an interim basis. Outlier
payments are made based on the submission of a discharge
bill and represents final payment subject to the cost
report settlement specified in §412.84(i) and §412.84(m) of
this part.
*
*
*
*
*
CMS-1346-F
Catalog of Federal Domestic Assistance Program No. 93.773,
Medicare–Hospital Insurance; and Program No. 93.774,
Medicare–Supplementary Medical Insurance Program)
Dated: April 21, 2011
______________________________
Donald Berwick,
Administrator,
Centers for Medicare & Medicaid
Services.
Approved: April 26, 2011
______________________________
Kathleen Sebelius,
Secretary.
BILLING CODE 4120-01-P
CMS-1346-F 176
[Note: The following Addendums will not appear in the Code
of Federal Regulations].
Addendum A—Rate and Adjustment Factors
Per Diem Rate:
Federal Per Diem Base
Rate
Labor Share (0.70317)
Non-Labor Share
(0.29683)
$685.01
$481.68
$203.33
Fixed Dollar Loss Threshold Amount:
$7,340
Wage Index Budget Neutrality Factor:
0.9995
Facility Adjustments:
Rural Adjustment Factor
Teaching Adjustment
Factor
Wage Index
1.17
0.5150
Pre-reclass Hospital Wage Index
(FY2011)
Cost of Living Adjustments (COLAs):
Area
Cost of
Living
Adjustment
Factor
Alaska:
City of Anchorage and 80-kilometer (50-
mile) radius by road
City of Fairbanks and 80-kilometer (50-
mile) radius by road
City of Juneau and 80-kilometer (50-mile)
1.23
1.23
1.23
CMS-1346-F 177
Area
radius by road
Rest of Alaska
Hawaii:
City and County of Honolulu
County of Hawaii
County of Kauai
County of Maui and County of Kalawao
Patient Adjustments:
ECT – Per Treatment $294.91
Variable Per Diem Adjustments:
Cost of
Living
Adjustment
Factor
1.25
1.25
1.18
1.25
1.25
Day 1 — Facility Without a Qualifying Emergency Department
Day 1 — Facility With a Qualifying Emergency Department
Day 2
Day 3
Day 4
Day 5
Day 6
Day 7
Day 8
Day 9
Day 10
Day 11
Day 12
Day 13
Day 14
Day 15
Day 16
Day 17
Day 18
Day 19
Day 20
Day 21
After Day 21
Adjustment Factor
1.19
1.31
1.12
1.08
1.05
1.04
1.02
1.01
1.01
1.00
1.00
0.99
0.99
0.99
0.99
0.98
0.97
0.97
0.96
0.95
0.95
0.95
0.92
CMS-1346-F 178
Age Adjustments:
Age (in years)
Under 45
45 and under 50
50 and under 55
55 and under 60
60 and under 65
65 and under 70
70 and under 75
75 and under 80
80 and over
Adjustment Factor
1.00
1.01
1.02
1.04
1.07
1.10
1.13
1.15
1.17
DRG Adjustments:
MS-DRG
056
057
080
081
876
880
881
882
883
884
885
886
887
894
895
896
897
MS-DRG Descriptions
Degenerative nervous system disorders w MCC
Degenerative nervous system disorders w/o MCC
Nontraumatic stupor & coma w MCC
Nontraumatic stupor & coma w/o MCC
O.R. procedure w principal diagnoses of mental illness
Acute adjustment reaction & psychosocial dysfunction
Depressive neuroses
Neuroses except depressive
Disorders of personality & impulse control
Organic disturbances & mental retardation
Psychoses
Behavioral & developmental disorders
Other mental disorder diagnoses
Alcohol/drug abuse or dependence, left AMA
Alcohol/drug abuse or dependence w rehabilitation therapy
Alcohol/drug abuse or dependence w/o rehabilitation therapy w MCC
Alcohol/drug abuse or dependence w/o rehabilitation therapy w/o MCC
Comorbidity Adjustments:
Adjustment
Factor
1.05
1.07
1.22
1.05
0.99
1.02
1.02
1.03
1.00
0.99
0.92
0.97
1.02
0.88
Comorbidity
Developmental Disabilities
Coagulation Factor Deficit
Tracheostomy
Eating and Conduct Disorders
Infectious Diseases
Renal Failure, Acute
Renal Failure, Chronic
Oncology Treatment
Uncontrolled Diabetes Mellitus
Adjustment
Factor
1.04
1.13
1.06
1.12
1.07
1.11
1.11
1.07
1.05
CMS-1346-F 179
Comorbidity
Severe Protein Malnutrition
Drug/Alcohol Induced Mental Disorders
Cardiac Conditions
Gangrene
Chronic Obstructive Pulmonary Disease
Artificial Openings – Digestive & Urinary
Severe Musculoskeletal & Connective Tissue Diseases
Poisoning
Adjustment
Factor
1.13
1.03
1.11
1.10
1.12
1.08
1.09
1.11
Addendum B—RY 2012 CBSA Wage Index Tables
In this addendum, we provide the wage index tables
referred to in the preamble to this notice. Tables 1 and 2
display the CBSA-based wage index values for urban and
rural providers.
Table 1—RY 2012 WAGE INDEX FOR URBAN AREAS BASED ON CBSA
LABOR MARKET AREAS
Urban Area
(Constituent Counties)
CBSA
Code
10180 Abilene, TX
Callahan County, TX
Jones County, TX
Taylor County, TX
10380 Aguadilla-Isabela-San Sebastián, PR
Aguada Municipio, PR
Aguadilla Municipio, PR
Añasco Municipio, PR
Isabela Municipio, PR
Lares Municipio, PR
Moca Municipio, PR
Rincón Municipio, PR
San Sebastián Municipio, PR
10420 Akron, OH
Portage County, OH
Summit County, OH
10500 Albany, GA
Baker County, GA
Dougherty County, GA
Lee County, GA
Terrell County, GA
Worth County, GA
Wage
Index
0.8003
0.3471
0.8843
0.9036
CMS-1346-F 180
Urban Area
CBSA
Code
(Constituent Counties)
10580 Albany-Schenectady-Troy, NY
Albany County, NY
Rensselaer County, NY
Saratoga County, NY
Schenectady County, NY
Schoharie County, NY
10740 Albuquerque, NM
Bernalillo County, NM
Sandoval County, NM
Torrance County, NM
Valencia County, NM
10780 Alexandria, LA
Grant Parish, LA
Rapides Parish, LA
10900 Allentown-Bethlehem-Easton, PA-NJ
Warren County, NJ
Carbon County, PA
Lehigh County, PA
Northampton County, PA
11020 Altoona, PA
Blair County, PA
11100 Amarillo, TX
Armstrong County, TX
Carson County, TX
Potter County, TX
Randall County, TX
11180 Ames, IA
Story County, IA
11260 Anchorage, AK
Anchorage Municipality, AK
Matanuska-Susitna Borough, AK
11300 Anderson, IN
Madison County, IN
11340 Anderson, SC
Anderson County, SC
11460 Ann Arbor, MI
Washtenaw County, MI
11500 Anniston-Oxford, AL
Calhoun County, AL
11540 Appleton, WI
Calumet County, WI
Outagamie County, WI
Wage
Index
0.8653
0.9456
0.7995
0.9194
0.8620
0.8644
0.9970
1.1964
0.9192
0.8691
1.0124
0.7918
0.9361
CMS-1346-F 181
Urban Area
(Constituent Counties)
CBSA
Code
11700 Asheville, NC
Buncombe County, NC
Haywood County, NC
Henderson County, NC
Madison County, NC
12020 Athens-Clarke County, GA
Clarke County, GA
Madison County, GA
Oconee County, GA
Oglethorpe County, GA
12060 Atlanta-Sandy Springs-Marietta, GA
Barrow County, GA
Bartow County, GA
Butts County, GA
Carroll County, GA
Cherokee County, GA
Clayton County, GA
Cobb County, GA
Coweta County, GA
Dawson County, GA
DeKalb County, GA
Douglas County, GA
Fayette County, GA
Forsyth County, GA
Fulton County, GA
Gwinnett County, GA
Haralson County, GA
Heard County, GA
Henry County, GA
Jasper County, GA
Lamar County, GA
Meriwether County, GA
Newton County, GA
Paulding County, GA
Pickens County, GA
Pike County, GA
Rockdale County, GA
Spalding County, GA
Walton County, GA
12100 Atlantic City-Hammonton, NJ
Atlantic County, NJ
12220 Auburn-Opelika, AL
Lee County, AL
Wage
Index
0.9001
0.9659
0.9549
1.1129
0.7190
CMS-1346-F 182
Urban Area
CBSA
Code
(Constituent Counties)
12260 Augusta-Richmond County, GA-SC
Burke County, GA
Columbia County, GA
McDuffie County, GA
Richmond County, GA
Aiken County, SC
Edgefield County, SC
12420 Austin-Round Rock, TX
Bastrop County, TX
Caldwell County, TX
Hays County, TX
Travis County, TX
Williamson County, TX
12540 Bakersfield, CA
Kern County, CA
12580 Baltimore-Towson, MD
Anne Arundel County, MD
Baltimore County, MD
Carroll County, MD
Harford County, MD
Howard County, MD
Queen Anne’s County, MD
Baltimore City, MD
12620 Bangor, ME
Penobscot County, ME
12700 Barnstable Town, MA
Barnstable County, MA
12940 Baton Rouge, LA
Ascension Parish, LA
East Baton Rouge Parish, LA
East Feliciana Parish, LA
Iberville Parish, LA
Livingston Parish, LA
Pointe Coupee Parish, LA
St. Helena Parish, LA
West Baton Rouge Parish, LA
West Feliciana Parish, LA
12980 Battle Creek, MI
Calhoun County, MI
13020 Bay City, MI
Bay County, MI
13140 Beaumont-Port Arthur, TX
Hardin County, TX
Jefferson County, TX
Orange County, TX
Wage
Index
0.9538
0.9514
1.1707
1.0255
0.9777
1.2823
0.8583
0.9656
0.9221
0.8488
CMS-1346-F 183
CBSA
Code
13380 Bellingham, WA
Whatcom County, WA
13460 Bend, OR
Deschutes County, OR
Urban Area
(Constituent Counties)
13644 Bethesda-Frederick-Gaithersburg, MD
Frederick County, MD
Montgomery County, MD
13740 Billings, MT
Carbon County, MT
Yellowstone County, MT
13780 Binghamton, NY
Broome County, NY
Tioga County, NY
13820 Birmingham-Hoover, AL
Bibb County, AL
Blount County, AL
Chilton County, AL
Jefferson County, AL
St. Clair County, AL
Shelby County, AL
Walker County, AL
13900 Bismarck, ND
Burleigh County, ND
Morton County, ND
13980 Blacksburg-Christiansburg-Radford, VA
Giles County, VA
Montgomery County, VA
Pulaski County, VA
Radford City, VA
14020 Bloomington, IN
Greene County, IN
Monroe County, IN
Owen County, IN
14060 Bloomington-Normal, IL
McLean County, IL
14260 Boise City-Nampa, ID
Ada County, ID
Boise County, ID
Canyon County, ID
Gem County, ID
Owyhee County, ID
14484 Boston-Quincy, MA
Norfolk County, MA
Plymouth County, MA
Suffolk County, MA
Wage
Index
1.1390
1.1372
1.0525
0.8674
0.8719
0.8611
0.7348
0.8314
0.8989
0.9439
0.9273
1.2178
CMS-1346-F 184
Urban Area
(Constituent Counties)
CBSA
Code
14500 Boulder, CO
Boulder County, CO
14540 Bowling Green, KY
Edmonson County, KY
Warren County, KY
14740 Bremerton-Silverdale, WA
Kitsap County, WA
14860 Bridgeport-Stamford-Norwalk, CT
Fairfield County, CT
15180 Brownsville-Harlingen, TX
Cameron County, TX
15260 Brunswick, GA
Brantley County, GA
Glynn County, GA
McIntosh County, GA
15380 Buffalo-Niagara Falls, NY
Erie County, NY
Niagara County, NY
15500 Burlington, NC
Alamance County, NC
15540 Burlington-South Burlington, VT
Chittenden County, VT
Franklin County, VT
Grand Isle County, VT
15764 Cambridge-Newton-Framingham, MA
Middlesex County, MA
15804 Camden, NJ
Burlington County, NJ
Camden County, NJ
Gloucester County, NJ
15940 Canton-Massillon, OH
Carroll County, OH
Stark County, OH
15980 Cape Coral-Fort Myers, FL
Lee County, FL
16020 Cape Girardeau-Jackson, MO-IL
Alexander County, IL
Bollinger County, MO
Cape Girardeau County, MO
16180 Carson City, NV
Carson City, NV
Wage
Index
1.0065
0.8666
1.0667
1.2547
0.9173
0.9209
0.9530
0.8863
0.9947
1.1250
1.0386
0.8749
0.9195
0.8983
1.0465
CMS-1346-F 185
CBSA
Code
16220 Casper, WY
Natrona County, WY
Urban Area
(Constituent Counties)
16300 Cedar Rapids, IA
Benton County, IA
Jones County, IA
Linn County, IA
16580 Champaign-Urbana, IL
Champaign County, IL
Ford County, IL
Piatt County, IL
16620 Charleston, WV
Boone County, WV
Clay County, WV
Kanawha County, WV
Lincoln County, WV
Putnam County, WV
16700 Charleston-North Charleston-Summerville, SC
Berkeley County, SC
Charleston County, SC
Dorchester County, SC
16740 Charlotte-Gastonia-Concord, NC-SC
Anson County, NC
Cabarrus County, NC
Gaston County, NC
Mecklenburg County, NC
Union County, NC
York County, SC
16820 Charlottesville, VA
Albemarle County, VA
Fluvanna County, VA
Greene County, VA
Nelson County, VA
Charlottesville City, VA
16860 Chattanooga, TN-GA
Catoosa County, GA
Dade County, GA
Walker County, GA
Hamilton County, TN
Marion County, TN
Sequatchie County, TN
16940 Cheyenne, WY
Laramie County, WY
Wage
Index
0.9655
0.8844
1.0235
0.7895
0.9354
0.9420
0.9342
0.8829
0.9392
CMS-1346-F 186
Urban Area
(Constituent Counties)
CBSA
Code
16974 Chicago-Naperville-Joliet, IL
Cook County, IL
DeKalb County, IL
DuPage County, IL
Grundy County, IL
Kane County, IL
Kendall County, IL
McHenry County, IL
Will County, IL
17020 Chico, CA
Butte County, CA
17140 Cincinnati-Middletown, OH-KY-IN
Dearborn County, IN
Franklin County, IN
Ohio County, IN
Boone County, KY
Bracken County, KY
Campbell County, KY
Gallatin County, KY
Grant County, KY
Kenton County, KY
Pendleton County, KY
Brown County, OH
Butler County, OH
Clermont County, OH
Hamilton County, OH
Warren County, OH
17300 Clarksville, TN-KY
Christian County, KY
Trigg County, KY
Montgomery County, TN
Stewart County, TN
17420 Cleveland, TN
Bradley County, TN
Polk County, TN
17460 Cleveland-Elyria-Mentor, OH
Cuyahoga County, OH
Geauga County, OH
Lake County, OH
Lorain County, OH
Medina County, OH
17660 Coeur d’Alene, ID
Kootenai County, ID
17780 College Station-Bryan, TX
Brazos County, TX
Burleson County, TX
Robertson County, TX
Wage
Index
1.0593
1.1533
0.9699
0.7888
0.7731
0.9050
0.9364
0.9588
CMS-1346-F 187
Urban Area
(Constituent Counties)
CBSA
Code
17820 Colorado Springs, CO
El Paso County, CO
Teller County, CO
17860 Columbia, MO
Boone County, MO
Howard County, MO
17900 Columbia, SC
Calhoun County, SC
Fairfield County, SC
Kershaw County, SC
Lexington County, SC
Richland County, SC
Saluda County, SC
17980 Columbus, GA-AL
Russell County, AL
Chattahoochee County, GA
Harris County, GA
Marion County, GA
Muscogee County, GA
18020 Columbus, IN
Bartholomew County, IN
18140 Columbus, OH
Delaware County, OH
Fairfield County, OH
Franklin County, OH
Licking County, OH
Madison County, OH
Morrow County, OH
Pickaway County, OH
Union County, OH
18580 Corpus Christi, TX
Aransas County, TX
Nueces County, TX
San Patricio County, TX
18700 Corvallis, OR
Benton County, OR
18880 Crestview-Fort Walton Beach-Destin, FL
Okaloosa County, FL
19060 Cumberland, MD-WV
Allegany County, MD
Mineral County, WV
Wage
Index
0.9481
0.8282
0.8733
0.9027
0.9434
1.0141
0.8585
1.0455
0.8842
0.8186
CMS-1346-F 188
Urban Area
(Constituent Counties)
Wage
Index
0.9860
0.8622
0.9693
0.8168
0.8400
0.9140
0.7621
0.7916
0.8736
1.0718
CBSA
Code
19124 Dallas-Plano-Irving, TX
Collin County, TX
Dallas County, TX
Delta County, TX
Denton County, TX
Ellis County, TX
Hunt County, TX
Kaufman County, TX
Rockwall County, TX
19140 Dalton, GA
Murray County, GA
Whitfield County, GA
19180 Danville, IL
Vermilion County, IL
19260 Danville, VA
Pittsylvania County, VA
Danville City, VA
19340 Davenport-Moline-Rock Island, IA-IL
Henry County, IL
Mercer County, IL
Rock Island County, IL
Scott County, IA
19380 Dayton, OH
Greene County, OH
Miami County, OH
Montgomery County, OH
Preble County, OH
19460 Decatur, AL
Lawrence County, AL
Morgan County, AL
19500 Decatur, IL
Macon County, IL
19660 Deltona-Daytona Beach-Ormond Beach, FL
Volusia County, FL
19740 Denver-Aurora-Broomfield, CO
Adams County, CO
Arapahoe County, CO
Broomfield County, CO
Clear Creek County, CO
Denver County, CO
Douglas County, CO
Elbert County, CO
Gilpin County, CO
Jefferson County, CO
Park County, CO
CMS-1346-F 189
Urban Area
CBSA
Code
(Constituent Counties)
19780 Des Moines-West Des Moines, IA
Dallas County, IA
Guthrie County, IA
Madison County, IA
Polk County, IA
Warren County, IA
19804 Detroit-Livonia-Dearborn, MI
Wayne County, MI
20020 Dothan, AL
Geneva County, AL
Henry County, AL
Houston County, AL
20100 Dover, DE
Kent County, DE
20220 Dubuque, IA
Dubuque County, IA
20260 Duluth, MN-WI
Carlton County, MN
St. Louis County, MN
Douglas County, WI
20500 Durham-Chapel Hill, NC
Chatham County, NC
Durham County, NC
Orange County, NC
Person County, NC
20740 Eau Claire, WI
Chippewa County, WI
Eau Claire County, WI
20764 Edison-New Brunswick, NJ
Middlesex County, NJ
Monmouth County, NJ
Ocean County, NJ
Somerset County, NJ
20940 El Centro, CA
Imperial County, CA
21060 Elizabethtown, KY
Hardin County, KY
Larue County, KY
21140 Elkhart-Goshen, IN
Elkhart County, IN
21300 Elmira, NY
Chemung County, NY
Wage
Index
0.9621
0.9699
0.7435
0.9921
0.8774
1.0565
0.9664
0.9639
1.1006
0.9258
0.8449
0.9465
0.8445
CMS-1346-F 190
Urban Area
(Constituent Counties)
CBSA
Code
21340 El Paso, TX
El Paso County, TX
21500 Erie, PA
Erie County, PA
21660 Eugene-Springfield, OR
Lane County, OR
21780 Evansville, IN-KY
Gibson County, IN
Posey County, IN
Vanderburgh County, IN
Warrick County, IN
Henderson County, KY
Webster County, KY
21820 Fairbanks, AK
Fairbanks North Star Borough, AK
21940 Fajardo, PR
Ceiba Municipio, PR
Fajardo Municipio, PR
Luquillo Municipio, PR
22020 Fargo, ND-MN
Cass County, ND
Clay County, MN
22140 Farmington, NM
San Juan County, NM
22180 Fayetteville, NC
Cumberland County, NC
Hoke County, NC
22220 Fayetteville-Springdale-Rogers, AR-MO
Benton County, AR
Madison County, AR
Washington County, AR
McDonald County, MO
22380 Flagstaff, AZ
Coconino County, AZ
22420 Flint, MI
Genesee County, MI
22500 Florence, SC
Darlington County, SC
Florence County, SC
22520 Florence-Muscle Shoals, AL
Colbert County, AL
Lauderdale County, AL
Wage
Index
0.8475
0.8360
1.1384
0.8433
1.1080
0.3883
0.8064
0.9339
0.9323
0.8616
1.2443
1.1496
0.8252
0.8144
CMS-1346-F 191
CBSA
Code
22540 Fond du Lac, WI
Fond du Lac County, WI
22660 Fort Collins-Loveland, CO
Larimer County, CO
Urban Area
(Constituent Counties)
22744 Fort Lauderdale-Pompano Beach-Deerfield Beach, FL
Broward County, FL
22900 Fort Smith, AR-OK
Crawford County, AR
Franklin County, AR
Sebastian County, AR
Le Flore County, OK
Sequoyah County, OK
23060 Fort Wayne, IN
Allen County, IN
Wells County, IN
Whitley County, IN
23104 Fort Worth-Arlington, TX
Johnson County, TX
Parker County, TX
Tarrant County, TX
Wise County, TX
23420 Fresno, CA
Fresno County, CA
23460 Gadsden, AL
Etowah County, AL
23540 Gainesville, FL
Alachua County, FL
Gilchrist County, FL
23580 Gainesville, GA
Hall County, GA
23844 Gary, IN
Jasper County, IN
Lake County, IN
Newton County, IN
Porter County, IN
24020 Glens Falls, NY
Warren County, NY
Washington County, NY
24140 Goldsboro, NC
Wayne County, NC
24220 Grand Forks, ND-MN
Polk County, MN
Grand Forks County, ND
Wage
Index
0.9223
0.9892
1.0160
0.7599
0.9362
0.9474
1.1422
0.7180
0.9160
0.9223
0.9084
0.8507
0.9067
0.7717
CMS-1346-F 192
Urban Area
(Constituent Counties)
CBSA
Code
24300 Grand Junction, CO
Mesa County, CO
24340 Grand Rapids-Wyoming, MI
Barry County, MI
Ionia County, MI
Kent County, MI
Newaygo County, MI
24500 Great Falls, MT
Cascade County, MT
24540 Greeley, CO
Weld County, CO
24580 Green Bay, WI
Brown County, WI
Kewaunee County, WI
Oconto County, WI
24660 Greensboro-High Point, NC
Guilford County, NC
Randolph County, NC
Rockingham County, NC
24780 Greenville, NC
Greene County, NC
Pitt County, NC
24860 Greenville-Mauldin-Easley, SC
Greenville County, SC
Laurens County, SC
Pickens County, SC
25020 Guayama, PR
Arroyo Municipio, PR
Guayama Municipio, PR
Patillas Municipio, PR
25060 Gulfport-Biloxi, MS
Hancock County, MS
Harrison County, MS
Stone County, MS
25180 Hagerstown-Martinsburg, MD-WV
Washington County, MD
Berkeley County, WV
Morgan County, WV
25260 Hanford-Corcoran, CA
Kings County, CA
25420 Harrisburg-Carlisle, PA
Cumberland County, PA
Dauphin County, PA
Perry County, PA
Wage
Index
0.9850
0.9169
0.8289
0.9496
0.9586
0.8882
0.9370
0.9644
0.3686
0.8877
0.9254
1.1205
0.9296
CMS-1346-F 193
Urban Area
(Constituent Counties)
CBSA
Code
25500 Harrisonburg, VA
Rockingham County, VA
Harrisonburg City, VA
25540 Hartford-West Hartford-East Hartford, CT
Hartford County, CT
Middlesex County, CT
Tolland County, CT
25620 Hattiesburg, MS
Forrest County, MS
Lamar County, MS
Perry County, MS
25860 Hickory-Lenoir-Morganton, NC
Alexander County, NC
Burke County, NC
Caldwell County, NC
Catawba County, NC
25980 Hinesville-Fort Stewart, GA1
Liberty County, GA
Long County, GA
26100 Holland-Grand Haven, MI
Ottawa County, MI
26180 Honolulu, HI
Honolulu County, HI
26300 Hot Springs, AR
Garland County, AR
26380 Houma-Bayou Cane-Thibodaux, LA
Lafourche Parish, LA
Terrebonne Parish, LA
26420 Houston-Sugar Land-Baytown, TX
Austin County, TX
Brazoria County, TX
Chambers County, TX
Fort Bend County, TX
Galveston County, TX
Harris County, TX
Liberty County, TX
Montgomery County, TX
San Jacinto County, TX
Waller County, TX
26580 Huntington-Ashland, WV-KY-OH
Boyd County, KY
Greenup County, KY
Lawrence County, OH
Cabell County, WV
Wayne County, WV
Wage
Index
0.9158
1.0927
0.7714
0.8693
0.8958
0.8632
1.1807
0.9151
0.7852
0.9824
0.8953
CMS-1346-F 194
Urban Area
(Constituent Counties)
26900
26820
CBSA
Code
26620 Huntsville, AL
Limestone County, AL
Madison County, AL
Idaho Falls, ID
Bonneville County, ID
Jefferson County, ID
Indianapolis-Carmel, IN
Boone County, IN
Brown County, IN
Hamilton County, IN
Hancock County, IN
Hendricks County, IN
Johnson County, IN
Marion County, IN
Morgan County, IN
Putnam County, IN
Shelby County, IN
Iowa City, IA
Johnson County, IA
Washington County, IA
Ithaca, NY
Tompkins County, NY
26980
27060
27100
Jackson, MI
Jackson County, MI
27140
27180
27260
27340
Jackson, MS
Copiah County, MS
Hinds County, MS
Madison County, MS
Rankin County, MS
Simpson County, MS
Jackson, TN
Chester County, TN
Madison County, TN
Jacksonville, FL
Baker County, FL
Clay County, FL
Duval County, FL
Nassau County, FL
St. Johns County, FL
Jacksonville, NC
Onslow County, NC
27500
Janesville, WI
Rock County, WI
Wage
Index
0.9191
0.9663
0.9672
0.9657
0.9842
0.9155
0.8042
0.8404
0.8884
0.7807
0.9415
CMS-1346-F 195
Urban Area
(Constituent Counties)
CBSA
Code
27620
27740
27780
Jefferson City, MO
Callaway County, MO
Cole County, MO
Moniteau County, MO
Osage County, MO
Johnson City, TN
Carter County, TN
Unicoi County, TN
Washington County, TN
Johnstown, PA
Cambria County, PA
27860
27900
Jonesboro, AR
Craighead County, AR
Poinsett County, AR
Joplin, MO
Jasper County, MO
Newton County, MO
28020 Kalamazoo-Portage, MI
Kalamazoo County, MI
Van Buren County, MI
28100 Kankakee-Bradley, IL
Kankakee County, IL
28140 Kansas City, MO-KS
Franklin County, KS
Johnson County, KS
Leavenworth County, KS
Linn County, KS
Miami County, KS
Wyandotte County, KS
Bates County, MO
Caldwell County, MO
Cass County, MO
Clay County, MO
Clinton County, MO
Jackson County, MO
Lafayette County, MO
Platte County, MO
Ray County, MO
28420 Kennewick-Pasco-Richland, WA
Benton County, WA
Franklin County, WA
28660 Killeen-Temple-Fort Hood, TX
Bell County, TX
Coryell County, TX
Lampasas County, TX
Wage
Index
0.8434
0.8105
0.8090
0.7757
0.8214
1.0292
1.0619
0.9652
0.9976
0.8798
CMS-1346-F 196
Urban Area
CBSA
Code
(Constituent Counties)
28700 Kingsport-Bristol-Bristol, TN-VA
Hawkins County, TN
Sullivan County, TN
Bristol City, VA
Scott County, VA
Washington County, VA
28740 Kingston, NY
Ulster County, NY
29140
29100
28940 Knoxville, TN
Anderson County, TN
Blount County, TN
Knox County, TN
Loudon County, TN
Union County, TN
29020 Kokomo, IN
Howard County, IN
Tipton County, IN
La Crosse, WI-MN
Houston County, MN
La Crosse County, WI
Lafayette, IN
Benton County, IN
Carroll County, IN
Tippecanoe County, IN
Lafayette, LA
Lafayette Parish, LA
St. Martin Parish, LA
Lake Charles, LA
Calcasieu Parish, LA
Cameron Parish, LA
Lake County-Kenosha County, IL-WI
Lake County, IL
Kenosha County, WI
Lake Havasu City-Kingman, AZ
Mohave County, AZ
29420
29180
29340
29404
29460
Lakeland-Winter Haven, FL
Polk County, FL
29540
Lancaster, PA
Lancaster County, PA
29620
29700
Lansing-East Lansing, MI
Clinton County, MI
Eaton County, MI
Ingham County, MI
Laredo, TX
Webb County, TX
Wage
Index
0.7588
0.9075
0.7842
0.9130
0.9803
0.9289
0.8489
0.8196
1.0781
1.0235
0.8447
0.9344
1.0298
0.7914
CMS-1346-F 197
Urban Area
(Constituent Counties)
CBSA
Code
29740
Las Cruces, NM
Dona Ana County, NM
29820
Las Vegas-Paradise, NV
Clark County, NV
29940
Lawrence, KS
Douglas County, KS
30020
Lawton, OK
Comanche County, OK
30140
Lebanon, PA
Lebanon County, PA
30300
30340
30460
30620
30700
30780
30860
30980
Lewiston, ID-WA
Nez Perce County, ID
Asotin County, WA
Lewiston-Auburn, ME
Androscoggin County, ME
Lexington-Fayette, KY
Bourbon County, KY
Clark County, KY
Fayette County, KY
Jessamine County, KY
Scott County, KY
Woodford County, KY
Lima, OH
Allen County, OH
Lincoln, NE
Lancaster County, NE
Seward County, NE
Little Rock-North Little Rock-Conway, AR
Faulkner County, AR
Grant County, AR
Lonoke County, AR
Perry County, AR
Pulaski County, AR
Saline County, AR
Logan, UT-ID
Franklin County, ID
Cache County, UT
Longview, TX
Gregg County, TX
Rusk County, TX
Upshur County, TX
Wage
Index
0.9296
1.2099
0.8533
0.8285
0.7807
0.9358
0.8903
0.8817
0.9271
0.9617
0.8546
0.8794
0.8563
CMS-1346-F 198
CBSA
Code
31020
Longview, WA
Cowlitz County, WA
Urban Area
(Constituent Counties)
31084
Los Angeles-Long Beach-Glendale, CA
Los Angeles County, CA
31140
31340
31180
Louisville-Jefferson County, KY-IN
Clark County, IN
Floyd County, IN
Harrison County, IN
Washington County, IN
Bullitt County, KY
Henry County, KY
Meade County, KY
Nelson County, KY
Oldham County, KY
Shelby County, KY
Spencer County, KY
Trimble County, KY
Lubbock, TX
Crosby County, TX
Lubbock County, TX
Lynchburg, VA
Amherst County, VA
Appomattox County, VA
Bedford County, VA
Campbell County, VA
Bedford City, VA
Lynchburg City, VA
31420 Macon, GA
Bibb County, GA
Crawford County, GA
Jones County, GA
Monroe County, GA
Twiggs County, GA
31460 Madera-Chowchilla, CA
Madera County, CA
31540 Madison, WI
Columbia County, WI
Dane County, WI
Iowa County, WI
31700 Manchester-Nashua, NH
Hillsborough County, NH
31740 Manhattan, KS
Geary County, KS
Pottawatomie County, KS
Riley County, KS
Wage
Index
1.0296
1.2130
0.8896
0.8847
0.8694
0.9202
0.7986
1.1294
0.9869
0.7847
CMS-1346-F 199
Wage
Index
0.9083
0.8918
0.3640
0.8837
1.0061
0.9268
1.2359
1.0128
0.9470
0.9711
1.0183
Urban Area
(Constituent Counties)
CBSA
Code
31860 Mankato-North Mankato, MN
Blue Earth County, MN
Nicollet County, MN
31900 Mansfield, OH
Richland County, OH
32420 Mayagüez, PR
Hormigueros Municipio, PR
Mayagüez Municipio, PR
32580 McAllen-Edinburg-Mission, TX
Hidalgo County, TX
32780 Medford, OR
Jackson County, OR
32820 Memphis, TN-MS-AR
Crittenden County, AR
DeSoto County, MS
Marshall County, MS
Tate County, MS
Tunica County, MS
Fayette County, TN
Shelby County, TN
Tipton County, TN
32900 Merced, CA
Merced County, CA
33124 Miami-Miami Beach-Kendall, FL
Miami-Dade County, FL
33140 Michigan City-La Porte, IN
LaPorte County, IN
33260 Midland, TX
Midland County, TX
33340 Milwaukee-Waukesha-West Allis, WI
Milwaukee County, WI
Ozaukee County, WI
Washington County, WI
Waukesha County, WI
CMS-1346-F 200
Urban Area
CBSA
Code
(Constituent Counties)
33460 Minneapolis-St. Paul-Bloomington, MN-WI
Anoka County, MN
Carver County, MN
Chisago County, MN
Dakota County, MN
Hennepin County, MN
Isanti County, MN
Ramsey County, MN
Scott County, MN
Sherburne County, MN
Washington County, MN
Wright County, MN
Pierce County, WI
St. Croix County, WI
33540 Missoula, MT
Missoula County, MT
33660 Mobile, AL
Mobile County, AL
33700 Modesto, CA
Stanislaus County, CA
33740 Monroe, LA
Ouachita Parish, LA
Union Parish, LA
33780 Monroe, MI
Monroe County, MI
33860 Montgomery, AL
Autauga County, AL
Elmore County, AL
Lowndes County, AL
Montgomery County, AL
34060 Morgantown, WV
Monongalia County, WV
Preston County, WV
34100 Morristown, TN
Grainger County, TN
Hamblen County, TN
Jefferson County, TN
34580 Mount Vernon-Anacortes, WA
Skagit County, WA
34620 Muncie, IN
Delaware County, IN
34740 Muskegon-Norton Shores, MI
Muskegon County, MI
Wage
Index
1.1143
0.8921
0.7960
1.2104
0.7993
0.8684
0.8442
0.8137
0.7041
1.0363
0.8206
0.9809
CMS-1346-F 201
Urban Area
CBSA
Code
(Constituent Counties)
34820 Myrtle Beach-North Myrtle Beach-Conway, SC
Horry County, SC
34900 Napa, CA
Napa County, CA
34940 Naples-Marco Island, FL
Collier County, FL
34980 Nashville-Davidson—Murfreesboro-Franklin, TN
Cannon County, TN
Cheatham County, TN
Davidson County, TN
Dickson County, TN
Hickman County, TN
Macon County, TN
Robertson County, TN
Rutherford County, TN
Smith County, TN
Sumner County, TN
Trousdale County, TN
Williamson County, TN
Wilson County, TN
35004 Nassau-Suffolk, NY
Nassau County, NY
Suffolk County, NY
35084 Newark-Union, NJ-PA
Essex County, NJ
Hunterdon County, NJ
Morris County, NJ
Sussex County, NJ
Union County, NJ
Pike County, PA
35300 New Haven-Milford, CT
New Haven County, CT
35380 New Orleans-Metairie-Kenner, LA
Jefferson Parish, LA
Orleans Parish, LA
Plaquemines Parish, LA
St. Bernard Parish, LA
St. Charles Parish, LA
St. John the Baptist Parish, LA
St. Tammany Parish, LA
Wage
Index
0.8738
1.4604
0.9698
0.9457
1.2315
1.1460
1.1515
0.9070
CMS-1346-F 202
Urban Area
CBSA
Code
(Constituent Counties)
35644 New York-White Plains-Wayne, NY-NJ
Bergen County, NJ
Hudson County, NJ
Passaic County, NJ
Bronx County, NY
Kings County, NY
New York County, NY
Putnam County, NY
Queens County, NY
Richmond County, NY
Rockland County, NY
Westchester County, NY
35660 Niles-Benton Harbor, MI
Berrien County, MI
35840 North Port-Bradenton-Sarasota-Venice, FL
Manatee County, FL
Sarasota County, FL
35980 Norwich-New London, CT
New London County, CT
36084 Oakland-Fremont-Hayward, CA
Alameda County, CA
Contra Costa County, CA
36100 Ocala, FL
Marion County, FL
36140 Ocean City, NJ
Cape May County, NJ
36220 Odessa, TX
Ector County, TX
36260 Ogden-Clearfield, UT
Davis County, UT
Morgan County, UT
Weber County, UT
36420 Oklahoma City, OK
Canadian County, OK
Cleveland County, OK
Grady County, OK
Lincoln County, OK
Logan County, OK
McClain County, OK
Oklahoma County, OK
36500 Olympia, WA
Thurston County, WA
Wage
Index
1.2955
0.8872
0.9481
1.1215
1.6354
0.8468
1.0879
0.9436
0.9267
0.8877
1.1269
CMS-1346-F 203
Urban Area
(Constituent Counties)
Wage
Index
0.9583
0.9163
0.9566
0.8370
1.2377
0.9211
0.8405
0.7954
0.7455
0.8299
1.0979
0.8254
CBSA
Code
36540 Omaha-Council Bluffs, NE-IA
Harrison County, IA
Mills County, IA
Pottawattamie County, IA
Cass County, NE
Douglas County, NE
Sarpy County, NE
Saunders County, NE
Washington County, NE
36740 Orlando-Kissimmee, FL
Lake County, FL
Orange County, FL
Osceola County, FL
Seminole County, FL
36780 Oshkosh-Neenah, WI
Winnebago County, WI
36980 Owensboro, KY
Daviess County, KY
Hancock County, KY
McLean County, KY
37100 Oxnard-Thousand Oaks-Ventura, CA
Ventura County, CA
37340 Palm Bay-Melbourne-Titusville, FL
Brevard County, FL
37380 Palm Coast, FL
Flagler County, FL
37460 Panama City-Lynn Haven-Panama City Beach, FL
Bay County, FL
37620 Parkersburg-Marietta-Vienna, WV-OH
Washington County, OH
Pleasants County, WV
Wirt County, WV
Wood County, WV
37700 Pascagoula, MS
George County, MS
Jackson County, MS
37764 Peabody, MA
Essex County, MA
37860 Pensacola-Ferry Pass-Brent, FL
Escambia County, FL
Santa Rosa County, FL
CMS-1346-F 204
Urban Area
(Constituent Counties)
CBSA
Code
37900 Peoria, IL
Marshall County, IL
Peoria County, IL
Stark County, IL
Tazewell County, IL
Woodford County, IL
37964 Philadelphia, PA
Bucks County, PA
Chester County, PA
Delaware County, PA
Montgomery County, PA
Philadelphia County, PA
38060 Phoenix-Mesa-Scottsdale, AZ
Maricopa County, AZ
Pinal County, AZ
38220 Pine Bluff, AR
Cleveland County, AR
Jefferson County, AR
Lincoln County, AR
38300 Pittsburgh, PA
Allegheny County, PA
Armstrong County, PA
Beaver County, PA
Butler County, PA
Fayette County, PA
Washington County, PA
Westmoreland County, PA
38340 Pittsfield, MA
Berkshire County, MA
38540 Pocatello, ID
Bannock County, ID
Power County, ID
38660 Ponce, PR
Juana Díaz Municipio, PR
Ponce Municipio, PR
Villalba Municipio, PR
38860 Portland-South Portland-Biddeford, ME
Cumberland County, ME
Sagadahoc County, ME
York County, ME
38900 Portland-Vancouver-Beaverton, OR-WA
Clackamas County, OR
Columbia County, OR
Multnomah County, OR
Washington County, OR
Yamhill County, OR
Clark County, WA
Skamania County, WA
Wage
Index
0.9149
1.0803
1.0642
0.8012
0.8605
1.0371
0.9507
0.4326
0.9899
1.1476
CMS-1346-F 205
Urban Area
(Constituent Counties)
CBSA
Code
38940 Port St. Lucie, FL
Martin County, FL
St. Lucie County, FL
39100 Poughkeepsie-Newburgh-Middletown, NY
Dutchess County, NY
Orange County, NY
39140 Prescott, AZ
Yavapai County, AZ
39300 Providence-New Bedford-Fall River, RI-MA
Bristol County, MA
Bristol County, RI
Kent County, RI
Newport County, RI
Providence County, RI
Washington County, RI
39340 Provo-Orem, UT
Juab County, UT
Utah County, UT
39380 Pueblo, CO
Pueblo County, CO
39460 Punta Gorda, FL
Charlotte County, FL
39540 Racine, WI
Racine County, WI
39580 Raleigh-Cary, NC
Franklin County, NC
Johnston County, NC
Wake County, NC
39660 Rapid City, SD
Meade County, SD
Pennington County, SD
39740 Reading, PA
Berks County, PA
39820 Redding, CA
Shasta County, CA
39900 Reno-Sparks, NV
Storey County, NV
Washoe County, NV
Wage
Index
1.0723
1.1354
1.2234
1.0714
0.9321
0.8721
0.8759
1.0580
0.9811
1.0442
0.8904
1.4134
1.0419
CMS-1346-F 206
Urban Area
(Constituent Counties)
CBSA
Code
40060 Richmond, VA
Amelia County, VA
Caroline County, VA
Charles City County, VA
Chesterfield County, VA
Cumberland County, VA
Dinwiddie County, VA
Goochland County, VA
Hanover County, VA
Henrico County, VA
King and Queen County, VA
King William County, VA
Louisa County, VA
New Kent County, VA
Powhatan County, VA
Prince George County, VA
Sussex County, VA
Colonial Heights City, VA
Hopewell City, VA
Petersburg City, VA
Richmond City, VA
40140 Riverside-San Bernardino-Ontario, CA
Riverside County, CA
San Bernardino County, CA
40220 Roanoke, VA
Botetourt County, VA
Craig County, VA
Franklin County, VA
Roanoke County, VA
Roanoke City, VA
Salem City, VA
40340 Rochester, MN
Dodge County, MN
Olmsted County, MN
Wabasha County, MN
40380 Rochester, NY
Livingston County, NY
Monroe County, NY
Ontario County, NY
Orleans County, NY
Wayne County, NY
40420 Rockford, IL
Boone County, IL
Winnebago County, IL
40484 Rockingham County-Strafford County, NH
Rockingham County, NH
Strafford County, NH
40580 Rocky Mount, NC
Edgecombe County, NC
Nash County, NC
Wage
Index
0.9661
1.1570
0.8827
1.0942
0.8595
1.0033
1.0026
0.9034
CMS-1346-F 207
CBSA
Code
40660 Rome, GA
Floyd County, GA
Urban Area
(Constituent Counties)
40900 Sacramento-Arden-Arcade-Roseville, CA
El Dorado County, CA
Placer County, CA
Sacramento County, CA
Yolo County, CA
40980 Saginaw-Saginaw Township North, MI
Saginaw County, MI
41060 St. Cloud, MN
Benton County, MN
Stearns County, MN
41100 St. George, UT
Washington County, UT
41140 St. Joseph, MO-KS
Doniphan County, KS
Andrew County, MO
Buchanan County, MO
DeKalb County, MO
41180 St. Louis, MO-IL
Bond County, IL
Calhoun County, IL
Clinton County, IL
Jersey County, IL
Macoupin County, IL
Madison County, IL
Monroe County, IL
St. Clair County, IL
Crawford County, MO
Franklin County, MO
Jefferson County, MO
Lincoln County, MO
St. Charles County, MO
St. Louis County, MO
Warren County, MO
Washington County, MO
St. Louis City, MO
41420 Salem, OR
Marion County, OR
Polk County, OR
41500 Salinas, CA
Monterey County, CA
41540 Salisbury, MD
Somerset County, MD
Wicomico County, MD
Wage
Index
0.8635
1.4053
0.8728
1.1042
0.9133
1.0302
0.9090
1.1133
1.5686
0.9005
CMS-1346-F 208
Urban Area
(Constituent Counties)
CBSA
Code
41620 Salt Lake City, UT
Salt Lake County, UT
Summit County, UT
Tooele County, UT
41660 San Angelo, TX
Irion County, TX
Tom Green County, TX
41700 San Antonio, TX
Atascosa County, TX
Bandera County, TX
Bexar County, TX
Comal County, TX
Guadalupe County, TX
Kendall County, TX
Medina County, TX
Wilson County, TX
41740 San Diego-Carlsbad-San Marcos, CA
San Diego County, CA
41780 Sandusky, OH
Erie County, OH
41884 San Francisco-San Mateo-Redwood City, CA
Marin County, CA
San Francisco County, CA
San Mateo County, CA
41900 San Germán-Cabo Rojo, PR
Cabo Rojo Municipio, PR
Lajas Municipio, PR
Sabana Grande Municipio, PR
San Germán Municipio, PR
41940 San Jose-Sunnyvale-Santa Clara, CA
San Benito County, CA
Santa Clara County, CA
Wage
Index
0.9266
0.8303
0.8998
1.1979
0.8686
1.5733
0.4560
1.6703
CMS-1346-F 209
Urban Area
CBSA
Code
(Constituent Counties)
41980 San Juan-Caguas-Guaynabo, PR
Aguas Buenas Municipio, PR
Aibonito Municipio, PR
Arecibo Municipio, PR
Barceloneta Municipio, PR
Barranquitas Municipio, PR
Bayamón Municipio, PR
Caguas Municipio, PR
Camuy Municipio, PR
Canóvanas Municipio, PR
Carolina Municipio, PR
Cataño Municipio, PR
Cayey Municipio, PR
Ciales Municipio, PR
Cidra Municipio, PR
Comerío Municipio, PR
Corozal Municipio, PR
Dorado Municipio, PR
Florida Municipio, PR
Guaynabo Municipio, PR
Gurabo Municipio, PR
Hatillo Municipio, PR
Humacao Municipio, PR
Juncos Municipio, PR
Las Piedras Municipio, PR
Loíza Municipio, PR
Manatí Municipio, PR
Maunabo Municipio, PR
Morovis Municipio, PR
Naguabo Municipio, PR
Naranjito Municipio, PR
Orocovis Municipio, PR
Quebradillas Municipio, PR
Río Grande Municipio, PR
San Juan Municipio, PR
San Lorenzo Municipio, PR
Toa Alta Municipio, PR
Toa Baja Municipio, PR
Trujillo Alto Municipio, PR
Vega Alta Municipio, PR
Vega Baja Municipio, PR
Yabucoa Municipio, PR
42020 San Luis Obispo-Paso Robles, CA
San Luis Obispo County, CA
42044 Santa Ana-Anaheim-Irvine, CA
Orange County, CA
42060 Santa Barbara-Santa Maria-Goleta, CA
Santa Barbara County, CA
Wage
Index
0.4296
1.2915
1.2162
1.1909
CMS-1346-F 210
Urban Area
(Constituent Counties)
CBSA
Code
42100 Santa Cruz-Watsonville, CA
Santa Cruz County, CA
42140 Santa Fe, NM
Santa Fe County, NM
42220 Santa Rosa-Petaluma, CA
Sonoma County, CA
42340 Savannah, GA
Bryan County, GA
Chatham County, GA
Effingham County, GA
42540 Scranton–Wilkes-Barre, PA
Lackawanna County, PA
Luzerne County, PA
Wyoming County, PA
42644 Seattle-Bellevue-Everett, WA
King County, WA
Snohomish County, WA
42680 Sebastian-Vero Beach, FL
Indian River County, FL
43100 Sheboygan, WI
Sheboygan County, WI
43300 Sherman-Denison, TX
Grayson County, TX
43340 Shreveport-Bossier City, LA
Bossier Parish, LA
Caddo Parish, LA
De Soto Parish, LA
43580 Sioux City, IA-NE-SD
Woodbury County, IA
Dakota County, NE
Dixon County, NE
Union County, SD
43620 Sioux Falls, SD
Lincoln County, SD
McCook County, SD
Minnehaha County, SD
Turner County, SD
43780 South Bend-Mishawaka, IN-MI
St. Joseph County, IN
Cass County, MI
43900 Spartanburg, SC
Spartanburg County, SC
Wage
Index
1.6740
1.0847
1.6143
0.8907
0.8238
1.1556
0.9097
0.9233
0.8279
0.8536
0.9091
0.9299
0.9948
0.9383
CMS-1346-F 211
Urban Area
(Constituent Counties)
CBSA
Code
44060 Spokane, WA
Spokane County, WA
44100 Springfield, IL
Menard County, IL
Sangamon County, IL
44140 Springfield, MA
Franklin County, MA
Hampden County, MA
Hampshire County, MA
44180 Springfield, MO
Christian County, MO
Dallas County, MO
Greene County, MO
Polk County, MO
Webster County, MO
44220 Springfield, OH
Clark County, OH
44300 State College, PA
Centre County, PA
44600 Steubenville-Weirton, OH-WV
Jefferson County, OH
Brooke County, WV
Hancock County, WV
44700 Stockton, CA
San Joaquin County, CA
44940 Sumter, SC
Sumter County, SC
45060 Syracuse, NY
Madison County, NY
Onondaga County, NY
Oswego County, NY
45104 Tacoma, WA
Pierce County, WA
45220 Tallahassee, FL
Gadsden County, FL
Jefferson County, FL
Leon County, FL
Wakulla County, FL
45300 Tampa-St. Petersburg-Clearwater, FL
Hernando County, FL
Hillsborough County, FL
Pasco County, FL
Pinellas County, FL
Wage
Index
1.0571
0.9130
1.0251
0.8371
0.9234
0.8779
0.7315
1.2644
0.7860
0.9905
1.1343
0.8806
0.9054
CMS-1346-F 212
Urban Area
(Constituent Counties)
CBSA
Code
45460 Terre Haute, IN
Clay County, IN
Sullivan County, IN
Vermillion County, IN
Vigo County, IN
45500 Texarkana, TX-Texarkana, AR
Miller County, AR
Bowie County, TX
45780 Toledo, OH
Fulton County, OH
Lucas County, OH
Ottawa County, OH
Wood County, OH
45820 Topeka, KS
Jackson County, KS
Jefferson County, KS
Osage County, KS
Shawnee County, KS
Wabaunsee County, KS
45940 Trenton-Ewing, NJ
Mercer County, NJ
46060 Tucson, AZ
Pima County, AZ
46140 Tulsa, OK
Creek County, OK
Okmulgee County, OK
Osage County, OK
Pawnee County, OK
Rogers County, OK
Tulsa County, OK
Wagoner County, OK
46220 Tuscaloosa, AL
Greene County, AL
Hale County, AL
Tuscaloosa County, AL
46340 Tyler, TX
Smith County, TX
46540 Utica-Rome, NY
Herkimer County, NY
Oneida County, NY
46660 Valdosta, GA
Brooks County, GA
Echols County, GA
Lanier County, GA
Lowndes County, GA
Wage
Index
0.9205
0.7748
0.9432
0.8952
1.0150
0.9480
0.8793
0.8843
0.8065
0.8471
0.7941
CMS-1346-F 213
Wage
Index
1.4931
0.8219
1.0534
0.8961
1.0738
0.8403
0.8028
0.9648
CBSA
Code
46700 Vallejo-Fairfield, CA
Solano County, CA
Urban Area
(Constituent Counties)
47020 Victoria, TX
Calhoun County, TX
Goliad County, TX
Victoria County, TX
47220 Vineland-Millville-Bridgeton, NJ
Cumberland County, NJ
47260 Virginia Beach-Norfolk-Newport News, VA-NC
Currituck County, NC
Gloucester County, VA
Isle of Wight County, VA
James City County, VA
Mathews County, VA
Surry County, VA
York County, VA
Chesapeake City, VA
Hampton City, VA
Newport News City, VA
Norfolk City, VA
Poquoson City, VA
Portsmouth City, VA
Suffolk City, VA
Virginia Beach City, VA
Williamsburg City, VA
47300 Visalia-Porterville, CA
Tulare County, CA
47380 Waco, TX
McLennan County, TX
47580 Warner Robins, GA
Houston County, GA
47644 Warren-Troy-Farmington Hills, MI
Lapeer County, MI
Livingston County, MI
Macomb County, MI
Oakland County, MI
St. Clair County, MI
CMS-1346-F 214
Urban Area
CBSA
Code
(Constituent Counties)
47894 Washington-Arlington-Alexandria, DC-VA-MD-WV
District of Columbia, DC
Calvert County, MD
Charles County, MD
Prince George’s County, MD
Arlington County, VA
Clarke County, VA
Fairfax County, VA
Fauquier County, VA
Loudoun County, VA
Prince William County, VA
Spotsylvania County, VA
Stafford County, VA
Warren County, VA
Alexandria City, VA
Fairfax City, VA
Falls Church City, VA
Fredericksburg City, VA
Manassas City, VA
Manassas Park City, VA
Jefferson County, WV
47940 Waterloo-Cedar Falls, IA
Black Hawk County, IA
Bremer County, IA
Grundy County, IA
48140 Wausau, WI
Marathon County, WI
48300 Wenatchee-East Wenatchee, WA
Chelan County, WA
Douglas County, WA
48424 West Palm Beach-Boca Raton-Boynton Beach, FL
Palm Beach County, FL
48540 Wheeling, WV-OH
Belmont County, OH
Marshall County, WV
Ohio County, WV
48620 Wichita, KS
Butler County, KS
Harvey County, KS
Sedgwick County, KS
Sumner County, KS
48660 Wichita Falls, TX
Archer County, TX
Clay County, TX
Wichita County, TX
48700 Williamsport, PA
Lycoming County, PA
Wage
Index
1.0723
0.8462
0.9563
0.9615
0.9934
0.6675
0.8898
0.9566
0.7256
CMS-1346-F 215
Wage
Index
1.0580
0.9202
1.0002
0.8939
1.1012
1.0067
0.3536
0.9983
0.8625
1.1043
0.9283
1 At this time, there are no hospitals located in this urban area on which to base a wage index.
Urban Area
(Constituent Counties)
CBSA
Code
48864 Wilmington, DE-MD-NJ
New Castle County, DE
Cecil County, MD
Salem County, NJ
48900 Wilmington, NC
Brunswick County, NC
New Hanover County, NC
Pender County, NC
49020 Winchester, VA-WV
Frederick County, VA
Winchester City, VA
Hampshire County, WV
49180 Winston-Salem, NC
Davie County, NC
Forsyth County, NC
Stokes County, NC
Yadkin County, NC
49340 Worcester, MA
Worcester County, MA
49420 Yakima, WA
Yakima County, WA
49500 Yauco, PR
Guánica Municipio, PR
Guayanilla Municipio, PR
Peñuelas Municipio, PR
Yauco Municipio, PR
49620 York-Hanover, PA
York County, PA
49660 Youngstown-Warren-Boardman, OH-PA
Mahoning County, OH
Trumbull County, OH
Mercer County, PA
49700 Yuba City, CA
Sutter County, CA
Yuba County, CA
49740 Yuma, AZ
Yuma County, AZ
CMS-1346-F 216
Table 2—RY 2012 WAGE INDEX BASED ON CBSA LABOR MARKET AREAS
FOR RURAL AREAS
State Code
1
2
3
4
5
6
7
8
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
Nonurban Area
Alabama
Alaska
Arizona
Arkansas
California
Colorado
Connecticut
Delaware
Florida
Georgia
Hawaii
Idaho
Illinois
Indiana
Iowa
Kansas
Kentucky
Louisiana
Maine
Maryland
Massachusetts1
Michigan
Minnesota
Mississippi
Missouri
Montana
Nebraska
Nevada
New Hampshire
New Jersey1
Wage
Index
0.7380
1.2626
0.9095
0.7222
1.2056
0.9933
1.1128
0.9757
0.8409
0.7566
1.1189
0.7556
0.8343
0.8391
0.8545
0.7981
0.7830
0.7712
0.8588
0.9175
1.1769
0.8555
0.9038
0.7620
0.7655
0.8517
0.8911
0.9350
1.0207
—–
CMS-1346-F 217
State Code
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
65
Nonurban Area
New Mexico
New York
North Carolina
North Dakota
Ohio
Oklahoma
Oregon
Pennsylvania
Puerto Rico1
Rhode Island1
South Carolina
South Dakota
Tennessee
Texas
Utah
Vermont
Virgin Islands
Virginia
Washington
West Virginia
Wisconsin
Wyoming
Guam
Wage
Index
0.8911
0.8185
0.8359
0.6831
0.8561
0.7860
1.0029
0.8480
0.4047
—–
0.8413
0.8536
0.7886
0.7806
0.8649
0.9591
0.7993
0.7841
1.0184
0.7474
0.9186
0.9528
0.9611
1 All counties within the State are classified as urban, with the
exception of Massachusetts and Puerto Rico. Massachusetts and Puerto
Rico have areas designated as rural; however, no short-term, acute care
hospitals are located in the area(s) for FY 2011. The rural
Massachusetts wage index is calculated as the average of all contiguous
CBSAs. The Puerto Rico wage index is the same as FY 2010.
[FR Doc. 2011-10562 Filed 04/28/2011 at 4:15 pm; Publication Date:
05/06/2011]