[Federal Register Volume 64, Number 204 (Friday, October 22, 1999)]
[Notices]
[Pages 57103-57104]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-27625]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Health Care Financing Administration
[HCFA-8005-N]
RIN 0938-AB52
Medicare Program; Inpatient Hospital Deductible and Hospital and
Extended Care Services Coinsurance Amounts for 2000
AGENCY: Health Care Financing Administration (HCFA), HHS.
ACTION: Notice.
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SUMMARY: This notice announces the inpatient hospital deductible and
the hospital and extended care services coinsurance amounts for
services furnished in calendar year 2000 under Medicare's hospital
insurance program (Medicare Part A). The Medicare statute specifies the
formulae used to determine these amounts.
The inpatient hospital deductible will be $776. The daily
coinsurance amounts will be: (a) $194 for the 61st through 90th day of
hospitalization in a benefit period; (b) $388 for lifetime reserve
days; and (c) $97 for the 21st through 100th day of extended care
services in a skilled nursing facility in a benefit period.
EFFECTIVE DATE: This notice is effective on January 1, 2000.
FOR FURTHER INFORMATION CONTACT: Clare McFarland, (410) 786-6390.
For case-mix analysis only: Gregory J. Savord, (410) 786-1521.
SUPPLEMENTARY INFORMATION:
I. Background
Section 1813 of the Social Security Act (the Act) provides for an
inpatient hospital deductible to be subtracted from the amount payable
by Medicare for inpatient hospital services furnished to a beneficiary.
It also provides for certain coinsurance amounts to be subtracted from
the amounts payable by Medicare for inpatient hospital and extended
care services. Section 1813(b)(2) of the Act requires us to determine
and publish, between September 1 and September 15 of each year, the
amount of the inpatient hospital deductible and the hospital and
extended care services coinsurance amounts applicable for services
furnished in the following calendar year.
II. Computing the Inpatient Hospital Deductible for 2000
Section 1813(b) of the Act prescribes the method for computing the
amount of the inpatient hospital deductible. The inpatient hospital
deductible is an amount equal to the inpatient hospital deductible for
the preceding calendar year, changed by our best estimate of the
payment-weighted average of the applicable percentage increases (as
defined in section 1886(b)(3)(B) of the Act) used for updating the
payment rates to hospitals for discharges in the fiscal year that
begins on October 1 of the same preceding calendar year, and adjusted
to reflect real case mix. The adjustment to reflect real case mix is
determined on the basis of the most recent case mix data available. The
amount determined under this formula is rounded to the nearest multiple
of $4 (or, if midway between two multiples of $4, to the next higher
multiple of $4).
Under section 1886(b)(3)(B)(i) of the Act, as amended by section
4401(a) of the Balanced Budget Act of 1997 (BBA '97) (Public Law 105-
33), the percentage increase used to update the payment rates for
fiscal year 2000 for hospitals paid under the prospective payment
system is the market basket percentage increase minus 1.8 percentage
points.
Under section 1886(b)(3)(B)(ii) of the Act, as amended by section
4411(a) of the BBA '97, the percentage increase used to update the
payment rates for fiscal year 2000 for hospitals excluded from the
prospective payment system depends on the hospital's allowable
operating costs of inpatient hospital services. If the hospital's
allowable operating costs of inpatient hospital services for the most
recent cost reporting period for which information is available--
(1) Are equal to or exceed 110 percent of the hospital's target
amount for that cost reporting period, the applicable percentage
increase is the market basket percentage;
(2) Exceed 100 percent but are less than 110 percent of the
hospital's target amount for that cost reporting period, the applicable
percentage increase is the market basket percentage minus 0.25
percentage points for each percentage point by which the hospital's
allowable operating costs are less than 110 percent of the target
amount for that cost reporting period (but not less than 0 percent);
(3) Are equal to or less than 100 percent of the hospital's target
amount for that cost reporting period, but exceed two-thirds of the
target amount, the applicable percentage increase is 0 percent or, if
greater, the market basket percentage minus 2.5 percentage points; or
(4) Do not exceed two-thirds of the hospital's target amount for
that cost reporting period, the applicable percentage increase is 0
percent.
The market basket percentage increase for fiscal year 2000 is 2.9
percent, as announced in the Federal Register on July 30, 1999 (64 FR
41490). Therefore, the percentage increase for hospitals paid under the
prospective payment system is 1.1 percent. The average payment
percentage increase for hospitals excluded from the prospective payment
system is 0.9 percent. Weighting these percentages in accordance with
payment volume, our best estimate of the payment-weighted average of
the increases in the payment rates for fiscal year 2000 is 1.09
percent.
To develop the adjustment for real case mix, we first calculated
for each hospital an average case mix that reflects the relative
costliness of that hospital's mix of cases compared to those of other
hospitals. We then computed the change in average case mix for
hospitals paid under the Medicare prospective payment system in fiscal
year 1999 compared to fiscal year 1998. (We excluded from this
calculation hospitals excluded from the prospective payment system
because their payments are based on reasonable costs and are affected
only by real changes in case mix.) We used bills from prospective
payment hospitals received in HCFA as of April 1999. These bills
represent a total of about 5.6 million discharges for fiscal year 1999
and provide the most recent case mix data available at this time. Based
on these bills, the change in average case mix in fiscal year 1999 is -
0.87 percent. Based on past experience, we expect the overall case mix
change to be -0.6 percent as the year progresses and more fiscal year
1999 data become available.
Section 1813 of the Act requires that the inpatient hospital
deductible be adjusted only by that portion of the case mix change that
is determined to be real. There is a negligible change in overall case
mix for fiscal year 1999. We estimate that there is no change in real
case mix; that is, we estimate that the change in real case mix for
fiscal year 1999 is 0.0 percent.
[[Page 57104]]
Thus, the estimate of the payment-weighted average of the
applicable percentage increases used for updating the payment rates is
1.09 percent, and the real case mix adjustment factor for the
deductible is 0.0 percent. Therefore, under the statutory formula, the
inpatient hospital deductible for services furnished in calendar year
2000 is $776. This deductible amount is determined by multiplying $768
(the inpatient hospital deductible for 1999) by the payment-weighted
average increase in the payment rates of 1.0109 multiplied by the
increase in real case mix of 1.000, which equals $776.37 and is rounded
to $776.
III. Computing the Inpatient Hospital and Extended Care Services
Coinsurance Amounts for 2000
The coinsurance amounts provided for in section 1813 of the Act are
defined as fixed percentages of the inpatient hospital deductible for
services furnished in the same calendar year. Thus, the increase in the
deductible generates increases in the coinsurance amounts. For
inpatient hospital and extended care services furnished in 2000, in
accordance with the fixed percentages defined in the law, the daily
coinsurance for the 61st through 90th day of hospitalization in a
benefit period will be $194 (one-fourth of the inpatient hospital
deductible); the daily coinsurance for lifetime reserve days will be
$388 (one-half of the inpatient hospital deductible); and the daily
coinsurance for the 21st through 100th day of extended care services in
a skilled nursing facility in a benefit period will be $97 (one-eighth
of the inpatient hospital deductible).
IV. Cost to Beneficiaries
We estimate that in 2000 there will be about 8.6 million
deductibles paid at $776 each, about 2.2 million days subject to
coinsurance at $194 per day (for hospital days 61 through 90), about
1.0 million lifetime reserve days subject to coinsurance at $388 per
day, and about 31.7 million extended care days subject to coinsurance
at $97 per day. Similarly, we estimate that in 1999 there will be about
8.5 million deductibles paid at $768 each, about 2.2 million days
subject to coinsurance at $192 per day (for hospital days 61 through
90), about 1.0 million lifetime reserve days subject to coinsurance at
$384 per day, and about 29.9 million extended care days subject to
coinsurance at $96 per day. Therefore, the estimated total increase in
cost to beneficiaries is about $360 million (rounded to the nearest $10
million), due to (1) the increase in the deductible and coinsurance
amounts and (2) the change in the number of deductibles and daily
coinsurance amounts paid.
V. Waiver of Proposed Notice and Comment Period
The Medicare statute, as discussed previously, requires publication
of the Medicare part A inpatient hospital deductible and the hospital
and extended care services coinsurance amounts for services for each
calendar year. The amounts are determined according to the statute. As
has been our custom, we use general notices, rather than notice and
comment rulemaking procedures, to make the announcements. In doing so,
we acknowledge that, under the Administrative Procedure Act,
interpretive rules, general statements of policy, and rules of agency
organization, procedure, or practice are excepted from the requirements
of notice and comment rulemaking.
We considered publishing a proposed notice to provide a period for
public comment. However, we may waive that procedure if we find good
cause that prior notice and comment are impracticable, unnecessary, or
contrary to the public interest. We find that the procedure for notice
and comment is unnecessary because the formula used to calculate the
inpatient hospital deductible and hospital and extended care services
coinsurance amounts is statutorily directed, and we can exercise no
discretion in following that formula. Moreover, the statute establishes
the time period for which the deductible and coinsurance amounts will
apply and delaying publication would be contrary to the public
interest. Therefore, we find good cause to waive publication of a
proposed notice and solicitation of public comments.
VI. Regulatory Impact Statement
We have examined the impacts of this notice as required by
Executive Order 12866 and the Regulatory Flexibility Act (RFA) (Public
Law 96-354). Executive Order 12866 directs agencies to assess all costs
and benefits of available regulatory alternatives and, when regulation
is necessary, to select regulatory approaches that maximize net
benefits (including potential economic, environmental, public health
and safety effects; distributive impacts; and equity). The RFA requires
agencies to analyze options for regulatory relief for small businesses.
For purposes of the RFA, States and individuals are not considered
small entities.
Also, section 1102(b) of the Act requires the Secretary to prepare
a regulatory impact analysis for any notice that 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 consider
a small rural hospital as a hospital that is located outside of a
Metropolitan Statistical Area and has fewer than 50 beds. We have
determined that this notice will not have a significant effect on the
operations of a substantial number of small rural hospitals. Therefore,
we are not preparing an analysis for section 1102(b) of the Act.
As stated in section IV of this notice, we estimate that the total
increase in costs to beneficiaries associated with this notice is about
$360 million due to (1) the increase in the deductible and coinsurance
amounts and (2) the change in the number of deductibles and daily
coinsurance amounts paid. Therefore, this notice is a major rule as
defined in title 5, United States Code, section 804(2) and is an
economically significant rule under Executive Order 12866.
In accordance with the provisions of Executive Order 12866, this
notice was reviewed by the Office of Management and Budget.
We have reviewed this notice under the threshold criteria of
Executive Order 13132, Federalism. We have determined that it does not
significantly affect the rights, roles, and responsibilities of States.
Authority: Sections 1813(b)(2) of the Social Security Act (42
U.S.C. 1395e-2(b)(2)).
(Catalog of Federal Domestic Assistance Program No. 93.773,
Medicare--Hospital Insurance)
Dated: October 13, 1999.
Michael M. Hash,
Deputy Administrator, Health Care Financing Administration.
Dated: October 18, 1999.
Donna E. Shalala,
Secretary.
[FR Doc. 99-27625 Filed 10-19-99; 11:35am]
BILLING CODE 4120-01-P
