94-62. Medicare Program; Schedule of Limits for Skilled Nursing Facility Inpatient Routine Service Costs  

  • [Federal Register Volume 59, Number 4 (Thursday, January 6, 1994)]
    [Notices]
    [Pages 762-767]
    From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
    [FR Doc No: 94-62]
    
    
    [[Page Unknown]]
    
    [Federal Register: January 6, 1994]
    
    
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    DEPARTMENT OF HEALTH AND HUMAN SERVICES
    [BPD-795-NC]
    RIN: 0938-AG56
    
     
    
    Medicare Program; Schedule of Limits for Skilled Nursing Facility 
    Inpatient Routine Service Costs
    
    AGENCY: Health Care Financing Administration (HCFA), HHS.
    
    ACTION: Final notice with comment period.
    
    -----------------------------------------------------------------------
    
    SUMMARY: This final notice with comment period provides that there will 
    be no changes in the skilled nursing facility (SNF) cost limits for 
    cost reporting periods beginning during Federal fiscal years 1994 and 
    1995 and that the add-on for administrative and general costs of 
    hospital-based SNFs is eliminated. This notice announces provisions of 
    the Omnibus Budget Reconciliation Act of 1993 that affect the schedule 
    of limits on SNF routine service costs for which payment may be made 
    under the Medicare program and explains the effects of these provisions 
    on the methodology used in calculating the SNF cost limits.
    
    DATES: Effective date: The provisions set forth in this notice are 
    effective for cost reporting periods beginning on or after October 1, 
    1993.
        Comment date: Written comments will be considered if we receive 
    them at the appropriate address, as provided below, no later than 5 
    p.m. on [March 7, 1994].
    
    ADDRESSES: Mail written comments (1 original and 3 copies) to the 
    following address:
    
    Health Care Financing Administration Department of Health and Human 
    Services Attention: BPD-795-NC, P.O. Box 7571, Baltimore Maryland 
    21207-0517.
    
        If you prefer, you may deliver your comments to one of the 
    following addresses:
    
    Room 309-G, Hubert H. Humphrey Building, 200 Independence Ave. SW., 
    Washington DC 20201, or
    Room 132, East High Rise Building 6325 Security Boulevard Baltimore 
    Maryland 21207.
    
        Because of staffing and resource limitations, we cannot accept 
    comments by facsimile (FAX) transmission. In commenting, please refer 
    to file code BPD-795-NC. Comments received timely will be available for 
    public inspection as they are received, beginning approximately three 
    weeks after publication of a document, in room 309-G of the 
    Department's offices at 200 Independence Avenue SW., Washington DC, on 
    Monday through Friday of each week from 8:30 a.m. to 5:00 p.m. (Phone: 
    202-690-7890).
        Copies: To order copies of the Federal Register containing this 
    document, send your request to: New Orders, Superintendent of 
    Documents, P.O. Box 371954, Pittsburgh, PA 15250-7954. Specify the date 
    of the issue requested and enclose a check or money order payable to 
    the Superintendent of Documents, or enclose your Visa or MasterCard 
    number and expiration date. Credit card orders can also be placed by 
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    an alternative, you can view and photocopy the Federal Register 
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    Libraries and at many other public and academic libraries throughout 
    the country that receive the Federal Register.
    
    FOR FURTHER INFORMATION CONTACT: Laurence Wilson, (410) 966-4603
    
    SUPPLEMENTARY INFORMATION:
    
    I. Background
    
        Sections 1861(v)(1)(A) and 1888 of the Social Security Act (the 
    Act) authorize the Secretary to set limits on allowable costs incurred 
    by a provider of services for which payment may be made under Medicare. 
    These limits are based on estimates of the costs necessary for the 
    efficient delivery of needed health services. Implementing regulations 
    appear at 42 CFR 413.30. Section 1888 of the Act directs the Secretary 
    to set limits on per diem inpatient routine service costs for hospital-
    based and freestanding skilled nursing facilities (SNFs) by urban or 
    rural area location. Section 4008(e)(2) of the Omnibus Budget 
    Reconciliation Act of 1990 (Pub. L. 101-508) amended section 1888(a) of 
    the Act to require the Secretary to update the per diem SNF cost limits 
    for cost reporting periods beginning on or after October 1, 1992, and 
    every 2 years thereafter.
        Under the authority of section 1888 of the Act, we published a 
    final notice on October 7, 1992 (57 FR 46177) announcing a schedule of 
    limits for freestanding and hospital-based SNFs effective for cost 
    reporting periods beginning on or after October 1, 1992. The limits 
    were computed using data from cost reporting periods ending on or after 
    June 30, 1989, through May 31, 1990, for freestanding SNFs and from 
    cost reporting periods ending on or after October 31, 1988, through 
    September 30, 1989, for hospital-based SNFs.
        The October 7, 1992 final notice contained provisions relating to:
        (1) Separate group limits for labor-related and nonlabor-related 
    components of SNF per diem routine service costs;
        (2) Adjustments to the cost limits by an area wage index developed 
    from hospital industry wages;
        (3) A ``market basket'' index developed to reflect changes in the 
    price of goods and services purchased by SNFs;
        (4) Application of the adjusted hospital wage index to wages, 
    employee benefits, health service costs, costs of business services, 
    and other miscellaneous expenses;
        (5) Freestanding SNF cost limits set at 112 percent of the average 
    per diem labor-related and nonlabor-related costs;
        (6) Hospital-based SNF cost limits set at the limit for 
    freestanding SNFs, plus 50 percent of the difference between the 
    freestanding limit and 112 percent of the average per diem routine 
    service costs of hospital-based SNFs, and an add-on for administrative 
    and general (A&G) costs;
        (7) Cost-of-living adjustments for Alaska, Hawaii, Puerto Rico, and 
    the Virgin Islands;
        (8) Exceptions to the cost limits;
        (9) A classification system based on whether the SNF is hospital-
    based or freestanding and whether it is located in an urban or rural 
    area.
        In addition to the above provisions, the October 7, 1992 final 
    notice also provided for a per diem add-on to recognize the costs 
    incurred by SNFs in complying with the additional nursing home reform 
    requirements of section 1819 of the Act (including the costs of 
    conducting nurse aide training and competency evaluations). (Section 
    1861(v)(1)(E) of the Act provides for Medicare payment for costs 
    incurred by SNFs in complying with the requirements of section 1819 of 
    the Act.) The October 7, 1992 notice also included an add-on to the 
    cost limits to recognize the costs that SNFs may incur in meeting the 
    universal precaution requirements of the Occupational Safety and Health 
    Administration (OSHA). These requirements were described in a final 
    rule published by OSHA in the Federal Register on December 6, 1991 (54 
    FR 64004) that set forth a standard under section 6(b) of the 
    Occupational Safety and Health Act of 1970 (29 U.S.C. 655) to eliminate 
    or minimize occupational exposure to bloodborne pathogens.
    
    II. Provisions of This Final Notice With Comment Period
    
    A. No Changes in the Cost Limits
    
        On August 10, 1993, the Omnibus Budget Reconciliation Act of 1993 
    (OBRA '93), Public Law 103-66, was enacted. Section 13503(a)(1) of OBRA 
    '93 requires that there be no changes in the SNF routine cost limits 
    (except as may be necessary to take into account the elimination of the 
    administrative and general add-on for hospital-based SNFs) for cost 
    reporting periods beginning during Federal fiscal years (FY) 1994 and 
    1995, that is, for cost reporting periods beginning on or after October 
    1, 1993, and before October 1, 1995. The effect of this provision is 
    that a SNF's latest routine cost limit for a period beginning on or 
    after October 1, 1992 and before October 1, 1993, as calculated under 
    the October 7, 1992 notice, without regard to any subsequent 
    adjustments under section 1888(c) of the Act such as exceptions, will 
    remain in effect until its cost reporting period beginning on or after 
    October 1, 1995. Accordingly, there will be no changes to a SNF's cost 
    limit for cost reporting periods beginning on or after October 1, 1993, 
    and before October 1, 1995, to account for inflation, updates of the 
    data, changes to the wage index or to MSA designations. Thus, in 
    computing a provider's cost limit for cost reporting periods beginning 
    on or after October 1, 1993 and before October 1, 1995, the cost 
    reporting period adjustment factors that were to apply for cost 
    reporting periods beginning on or after October 1, 1993, as set forth 
    in Table IV of the October 7, 1992 notice (57 FR 46188), will not be 
    used. Other components of the October 7, 1992 notice, specifically the 
    SNF Group Limits in Table I, and the wage indexes in Tables II and III 
    will continue to be used to compute the limits, with the exception in 
    Table I of the add-on for administrative and general costs of hospital-
    based SNFs.
        In the example below, a freestanding SNF in Dallas, Texas has a 
    cost reporting period beginning date of January 1, 1993. As calculated 
    under the October 7, 1992 notice, its cost limit for the 12-month 
    period beginning January 1, 1993 is $96.97. Under the provisions of 
    this notice, the cost limit of $96.97 will remain in effect for its 12-
    month cost reporting periods beginning January 1, 1994 and January 1, 
    1995. As explained above, the cost reporting period adjustment factors 
    that would have been used under the October 7, 1992 notice for 
    calculating the limits for the SNF's new cost reporting periods 
    beginning January 1, 1994 and January 1, 1995, are not used. 
    Accordingly, the provider in this example will not have any change in 
    its cost limit until its cost reporting period beginning January 1, 
    1996.
        Example--Calculation of Adjusted Limit for a Freestanding SNF 
    Located in Dallas, Texas (using the appropriate tables from the October 
    7, 1992 schedule of limits): 
    
    Labor-Related Component.......................................................          $79.56  (Table I).      
    Wage Index....................................................................        x 0.9638  (Table II).     
                                                                                                                    
                                                                                   ----------------                 
    Adjusted Labor Component......................................................          $76.68                  
    Nonlabor-Related Component....................................................          +17.08  (Table I).      
    Nursing Home Reform and OSHA Per Diem Add-On..................................          +1.98.                  
                                                                                                                    
                                                                                   ----------------                 
    Limit Prior To Inflation Adjustment $95.74                                                                      
    Adjustment Factor.............................................................       x 1.01286  (Table IV).     
                                                                                                                    
                                                                                   ----------------                 
    Inflation Adjusted Limit......................................................         $96.97                   
                                                                                                                    
    
    
        As noted above, for cost reporting periods beginning on or after 
    October 1, 1993 but before October 1, 1995, a SNF's cost limit will be 
    its latest routine cost limit for the period beginning on or after 
    October 1, 1992 and before October 1, 1993, as calculated under the 
    October 7, 1992 notice and without regard to any subsequent 
    adjustments, such as an exception to the limit. Thus, if the SNF in the 
    above example received an exception to its cost limit for its cost 
    reporting period beginning January 1, 1993, its cost limit for the cost 
    reporting period beginning January 1, 1994 would not include the 
    exception amount for the previous period. To receive an exception or 
    other adjustment to its cost limit, the SNF would need to submit a 
    request to its fiscal intermediary in accordance with the procedures 
    set forth in Sec. 413.30 of the regulations.
    
    B. Periods Other Than 12 Months
    
        The above methodology applies to providers with cost reporting 
    periods of 12 months in duration. If a facility's cost reporting period 
    is not 12 months in duration, a special adjustment factor is 
    calculated. This is necessary because inflation projections are 
    computed to the midpoint of a cost reporting period, and the adjustment 
    factors in Table IV are based on 12-month reporting periods. For cost 
    reporting periods of other than 12 months, the calculation must be made 
    based on the midpoint of the specific cost reporting period. The SNF's 
    intermediary obtains this adjustment factor from HCFA central office. 
    This methodology results in a different cost limit than if a 12-month 
    adjustment factor were used. However, since the provisions of OBRA '93 
    require no changes in the cost limit on or after October 1, 1993, the 
    limit calculated with the special adjustment factor will remain in 
    place for subsequent cost reporting periods beginning before October 1, 
    1995.
    
    C. Providers Entering the Medicare Program
    
        For providers entering the Medicare program on or after October 1, 
    1993 and before October 1, 1995, the applicable cost limit will be the 
    cost limit for the identical period beginning on or after October 1, 
    1992 through September 30, 1993. For example, if a provider enters the 
    Medicare program on September 1, 1994, with a 12-month cost reporting 
    period, its cost limit will be determined in the same manner as a cost 
    limit for a period beginning September 1, 1993 and ending August 30, 
    1994. If the provider's cost reporting period is a short period 
    beginning September 1, 1994 and ending December 31, 1994, the 
    provider's cost limit will be determined in the same manner as a cost 
    limit for a period beginning September 1, 1993 and ending December 31, 
    1993. In addition, whether the first period is a full 12-month period 
    or a period other than 12 months, the cost limit determined for the 
    first period will remain in effect until the provider's first cost 
    reporting period beginning on or after October 1, 1995.
    
    D. Next Update of Limits
    
        As discussed above, before the enactment of OBRA '93, section 
    1888(a) of the Act required that the SNF routine cost limits be updated 
    on October 1, 1992 and every 2 years thereafter. Section 13503(a)(1) of 
    OBRA '93 amended this section to delay the next update until October 1, 
    1995, and every 2 years thereafter. Accordingly, there will be no 
    changes to the routine cost limits published in the October 7, 1992 
    notice for inflation, changes in the wage index, geographic 
    designation, or for a more recent data base until October 1, 1995.
    
    E. Add-On for Hospital-Based SNFs
    
        Before the enactment of OBRA '93, section 1888(b) of the Act 
    provided for an add-on to recognize the cost differences between 
    hospital-based and freestanding SNFs attributable to excess overhead 
    allocations, that is, an add-on for the administrative and general 
    costs (A&G) of hospital-based SNFs. Section 13503(a)(3) of OBRA '93 
    amended this section of the Act to repeal the requirement that we 
    recognize cost differences attributable to excess overhead allocations. 
    Therefore, this notice implements that provision by eliminating the A&G 
    add-on for hospital-based SNFs. In addition, while section 13503(a)(1) 
    of OBRA '93 requires that there be no changes in the cost limits, as 
    explained above, it also states that the provision does not apply to 
    the elimination of the A&G add-on for hospital-based SNFs. Therefore, 
    effective for cost reporting periods beginning on or after October 1, 
    1993, we will no longer apply the administrative and general add-on for 
    hospital-based SNFs as shown in Table I of the October 7, 1992 schedule 
    of limits. The intermediary will continue to determine the cost limits 
    for hospital-based SNFs using the relevant instructions and Table I SNF 
    Group Limits, as described in the October 7, 1992 notice. However, for 
    cost reporting periods beginning on or after October 1, 1993, these 
    limits will be calculated without using the A&G add-on.
        The example below uses information from Table I of the October 7, 
    1992 schedule of limits to calculate a cost limit for a hospital-based 
    SNF located in Scranton, Pennsylvania. The cost limit is for a cost 
    reporting period beginning October 1, 1993. However, as discussed 
    above, the A&G add-on for hospital-based SNFs is no longer applied, and 
    the cost limit effective October 1, 1992 remains in effect for the cost 
    reporting period beginning on or after October 1, 1993.
        Example--Calculation of Adjusted Limit Effective October 1, 1993, 
    for a Hospital-Based SNF Located in Scranton, Pennsylvania: 
    
    Labor-Related Component Limit.................................................         $112.22  (Table I).      
    Wage Index....................................................................        x 0.8952  (Table II).     
                                                                                   ----------------                 
        Adjusted Labor Component..................................................         $100.46                  
        Nonlabor-Related Component:                                                                                 
            Limit.................................................................           23.79  (Table I).      
            Nursing Home Reform and OSHA Per Diem Add-on..........................           +1.98                  
                                                                                   ----------------                 
            Adjusted Limit........................................................         $126.23                  
                                                                                                                    
    
    
    F. Adjustments to the Routine Limits
    
        Section 1888(c) of the Act provides for appropriate adjustments to 
    the SNF routine cost limits. These adjustments are set forth at 
    Sec. 413.30 and include: exemptions from the cost limits for new 
    providers; exceptions to the limits for atypical services and 
    extraordinary circumstances; and other provisions. Section 13503(a)(1) 
    of OBRA '93 mandates that the effect of allowing no changes in the SNF 
    routine cost limits for cost reporting periods beginning during FYs 
    1994 and 1995 not be considered in making adjustments to the routine 
    cost limits under the exceptions process. Therefore, effective for cost 
    reporting periods beginning on or after October 1, 1993, and before 
    October 1, 1995, a provider may request an exception only for costs 
    incurred above the amount that the limit would have been had the 
    provisions set forth in this notice regarding no changes in the cost 
    limits not been enacted. Accordingly, for the purpose of determining 
    the amount of an exception to the SNF routine cost limits under the 
    regulations at Sec. 413.30(f), the difference between the amount of a 
    provider's cost limit as determined by the provisions set forth in this 
    notice, and the amount that a provider's cost limit would have been 
    under the October 7, 1992 notice had the provisions described herein 
    not been enacted, is not subject to an exception to the routine cost 
    limits. We note that this provision does not apply to the A&G add-on 
    for hospital-based SNFs. That is, for cost reporting periods beginning 
    on or after October 1, 1993, the A&G add-on for hospital-based SNFs 
    will not be used in computing the amount that the hospital-based cost 
    limit would have been had the provisions requiring no changes in the 
    limits not been enacted. In addition, we note that this provision has 
    no effect on new provider exemptions to the SNF cost limits, as set 
    forth under Sec. 413.30(e)(2), since this exemption removes the 
    limitation on a SNF's routine costs.
        The example below demonstrates the computation to determine the 
    amount not subject to an exception under the provisions set forth in 
    this notice. The provider's cost limit is computed for the cost 
    reporting period beginning January 1, 1993, in accordance with the 
    provisions set forth in this notice, and this limit remains in effect 
    until the cost reporting period beginning January 1, 1995. The provider 
    has requested an exception to its limit for the period beginning 
    January 1, 1994. Again, we use the information from the October 7, 1992 
    notice to calculate what the limit would have been had the OBRA '93 
    provisions requiring no changes in the limits not been enacted. The 
    difference of $5.04 between the actual limit and the amount the limit 
    would have been is the amount not subject to an exception.
        Example--Calculation of Amount Not Subject to an Exception to the 
    Limits Freestanding SNF Located in Dallas, Texas: 
    
    Labor-Related Component.......................................................          $79.56  (Table I).      
    Wage Index....................................................................        x 0.9638  (Table II).     
                                                                                   ----------------                 
    Adjusted Labor Component......................................................          $76.68                  
    Nonlabor-Related Component....................................................          +17.08  (Table I).      
    Nursing Home Reform and OSHA Per Diem Add-On..................................           +1.98                  
                                                                                                                    
                                                                                   ----------------                 
    Limit Prior To Inflation Adjustment...........................................          $95.74                  
    Adjustment Factor (January 1, 1993)...........................................       x 1.01286  (Table IV).     
                                                                                   ----------------                 
    Inflation Adjusted Limit (Limit in Effect for January 1, 1993, January 1,               $96.97                  
     1994, January 1, 1995).                                                                                        
    Adjustment Factor (January 1, 1994 for Exception Purposes Only)...............       x 1.06553  (Table IV).     
                                                                                   ----------------                 
    Inflation Adjusted Limit (January 1, 1994 for Exception Purposes Only)........         $102.01                  
    Amount Not Subject to Exception ($102.01-$96.97)..............................           $5.04                  
                                                                                                                    
    
    III. Impact Statement
    
        Executive Order 12866 (E.O. 12866) requires us to prepare an 
    analysis for any rule that meets one of the E.O. 12866 criteria for a 
    ``significant regulatory action''; that is, that may--
         Have an annual effect on the economy of $100 million or 
    more or adversely affect in a material way the economy, a sector of the 
    economy, productivity, competition, jobs, the environment, public 
    health or safety, or State, local, or tribal governments or 
    communities;
         Create a serious inconsistency or otherwise interfere with 
    an action taken or planned by another agency;
         Materially alter the budgetary impact of entitlements, 
    grants, user fees, or loan programs or the rights and obligations of 
    recipients thereof; or
         Raise a novel legal or policy issues arising out of legal 
    mandates, the President's priorities, or the principles set forth in 
    E.O. 12866.
        In addition for final notices such as this, we generally prepare a 
    regulatory flexibility analysis that is consistent with the Regulatory 
    Flexibility Act (RFA) (5 U.S.C. 601 through 612) unless the Secretary 
    certifies that this notice will not have a significant economic impact 
    on a substantial number of small entities. For purposes of the RFA, all 
    SNFs are treated as small entities.
        This final notice with comment period announces the provisions of 
    section 13503(a) of OBRA '93, which provides for a delay in the updates 
    of the limits on payments for routine SNF services through cost 
    reporting periods beginning before October 1, 1995, and provides for 
    the elimination of the A&G add-on for hospital-based SNFs effective for 
    cost reporting periods beginning on or after October 1, 1993. None of 
    the provisions of this notice interprets or extends requirements beyond 
    those set forth in OBRA '93.
        Sections 13503(a)(1) and (3) of OBRA '93 will result in significant 
    Federal cost savings. The impact of these provisions is discussed 
    further below. This notice explains the revised methodology for 
    calculating the SNF limits that results from the provisions of OBRA 
    '93. We do not believe that merely reflecting these provisions in this 
    notice produces any effect that will meet any of the criteria of E.O. 
    12866 for a significant regulatory action or will have a significant 
    effect on a substantial number of small entities. Therefore, we have 
    determined and the Secretary certifies that neither an impact analysis 
    under E.O. 12866 nor a regulatory flexibility analysis under the RFA 
    are required.
        To the extent that a legislative provision being announced by a 
    notice such as this may have a significant effect on beneficiaries or 
    providers or may be viewed as controversial, we believe that we should 
    address any potential concerns. In this instance, we believe it is 
    desirable to inform the public of our estimate of the substantial 
    budgetary effect of these statutory changes. We estimate that these 
    statutory provisions will result in the following savings to the 
    Medicare program:
    
    Table 1.--Impact of Delay in the Update of SNF Limits and Elimination of
                                     Add-on*                                
    ------------------------------------------------------------------------
                                                        Update   Elimination
                       Fiscal year                      delay     of add-on 
    ------------------------------------------------------------------------
    1994............................................        $30         $10 
    1995............................................        120          10 
    1996............................................         90          10 
    1997............................................  .........          10 
    1998............................................  .........         10  
    ------------------------------------------------------------------------
    *All figures are rounded to the nearest $10 million.                    
    
    
        As illustrated in Table 2 below, the delay in updating the cost 
    limits until October 1, 1995, combined with the elimination of the A&G 
    add-on for hospital-based SNFs, will result in a small increase in the 
    number of SNFs exceeding the SNF limits in all categories, although we 
    cannot isolate the separate impact of these factors. Table 2 below 
    shows the combined impact of these changes. 
    
                                    Table 2.                                
    ------------------------------------------------------------------------
                                               Exceeding old   Exceeding new
                                Total SNFs        limits          limits    
    ------------------------------------------------------------------------
    Freestanding SNFs.......            5340             911            1209
        Urban...............            4074             706             930
        Rural...............            1266             205             279
    Hospital-based SNFs.....             908             518             563
        Urban...............             455             298             321
        Rural...............             453             220            242 
    ------------------------------------------------------------------------
    
        We are unable to identify the effects of these provisions on 
    individual SNFs. However, we anticipate that overall SNF payments for 
    FY 1994 and FY 1995 will be approximately 1.2 percent and 2.3 percent 
    less, respectively, than they would have been in those years if the 
    OBRA '93 provisions were not in effect. Moreover, since Medicare does 
    not account for a high proportion of SNF utilization or revenue, we 
    estimate that the delay in updating the limits and the elimination of 
    the hospital-based add-on will not result in a significant number of 
    facilities' total revenues being increased or reduced by 3 percent or 
    more from the October 7, 1992 limits, adjusted for inflation. Thus, we 
    have determined that the economic impact on SNFs will not be 
    significant.
        Section 1102(b) of the Act requires the Secretary to prepare a 
    regulatory impact analysis if a final notice such as this may have a 
    significant impact on the operations of a substantial number of small 
    rural hospitals. Such an analysis must conform to the provisions of 
    section 604 of the RFA. For purposes of section 1102(b) of the Act, we 
    define a small rural hospital as a hospital with fewer than 100 beds 
    located outside of a Metropolitan Statistical Area.
        We have not prepared a rural impact statement since we have 
    determined and the Secretary certifies that this final notice will not 
    have a significant economic impact on the operations of a substantial 
    number of small rural hospitals.
    
    IV. Other Required Information
    
    A. Paperwork Reduction Act
    
        This final notice with comment period does not impose information 
    collection requirements. Consequently, it need not be reviewed by the 
    Office of Management and Budget under the authority of the Paperwork 
    Reduction Act of 1980 (44 U.S.C. 3501 through 3511).
    
    B. Waiver of Proposed Notice and 30-Day Delay in the Effective Date
    
        In adopting notices such as this, we ordinarily publish a proposed 
    notice in the Federal Register with a 60-day period for public comment 
    as required under section 1871(b)(1) of the Act. We also normally 
    provide a delay of 30 days in the effective date for documents such as 
    this. However, we may waive these procedures if we find good cause that 
    prior notice and comment or a delay in the effective date are 
    impracticable, unnecessary, or contrary to the public interest.
        As discussed above, before the enactment of OBRA '93, section 
    1888(a) of the Act required that the SNF routine cost limits be updated 
    for cost reporting periods beginning on or after October 1, 1992 and 
    every 2 years thereafter. However, section 13503(a)(1) of OBRA '93 
    specifies that there be no changes in the SNF cost limits for cost 
    reporting periods beginning during FYs 1994 and 1995, and section 
    13503(a)(2) of OBRA '93 amended section 1888 of the Act to delay the 
    next required update of the SNF limits until October 1, 1995. In 
    addition, section 13503(a)(3) of OBRA '93 amended section 1888(b) of 
    the Act to eliminate, effective for cost reporting periods beginning on 
    or after October 1, 1993, the add-on to the SNF cost limits to 
    recognize the higher administrative and general costs of hospital-based 
    SNFs.
        In conformance with the clear direction of section 13503(a) of OBRA 
    '93, this notice announces the new SNF provisions and explains the 
    effects of these provisions on the methodology used in calculating the 
    SNF cost limits. We have made no changes in this methodology beyond 
    those directly required by OBRA '93, nor are there any other 
    discretionary aspects to this notice. Moreover, section 13503(a) of 
    OBRA '93 mandates that these provisions are effective beginning with 
    cost reporting periods beginning on or after October 1, 1993. Thus, we 
    have concluded that in this instance, it would be impracticable, 
    unnecessary, and contrary to the public interest to publish a proposed 
    notice or to provide for a 30-day delay in the effective date of this 
    notice. Therefore, we find good cause to waive publication of a 
    proposed notice and the 30-day delay in effective date. However, we are 
    providing a 60-day period for public comment, as indicated at the 
    beginning of this preamble.
    
    C. Public Comments
    
        Because of the large number of items of correspondence we normally 
    receive, we are not able to acknowledge or respond to them 
    individually. However, we will consider all comments that we receive by 
    the date and time specified in the ``Date'' section of the preamble to 
    this notice. If we make any changes to this notice, we will respond to 
    the comments in the preamble to the notice that incorporates the 
    changes.
    
        Authority: (Sections 1102, 1814(b), 1861(v)(1), 1866(a), 1871, 
    and 1888 of the Social Security Act (42 U.S.C. 1302, 1395f(b), 
    1395x(v)(1), 1395cc(a), 1395hh, and 1395yy); section 6024 of Pub. L. 
    101-239 (42 U.S.C. 1395yy(note)); section 13503 of Pub. L. 103-66 
    (42 U.S.C. 1395yy(note)) and 42 CFR 413.30.)
    
    (Catalog of Federal Domestic Assistance Program No. 93.773 Medicare-
    Hospital Insurance Program)
    
        Dated: November 23, 1993.
    Bruce C. Vladeck,
    Administrator, Health Care Financing Administration.
        Dated: November 28, 1993.
    Donna E. Shalala,
    Secretary.
    [FR Doc. 94-62 Filed 1-5-94; 8:45 am]
    BILLING CODE 4120-01-P
    
    
    

Document Information

Effective Date:
10/1/1993
Published:
01/06/1994
Department:
Health Care Finance Administration
Entry Type:
Notice
Action:
Final notice with comment period.
Document Number:
94-62
Dates:
Effective date: The provisions set forth in this notice are effective for cost reporting periods beginning on or after October 1, 1993.
Pages:
762-767 (6 pages)
Docket Numbers:
Federal Register: January 6, 1994, BPD-795-NC