[Federal Register Volume 62, Number 212 (Monday, November 3, 1997)]
[Notices]
[Pages 59365-59366]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-29032]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Health Care Financing Administration
[OACT-057-N]
RIN 0938-AI12
Medicare Program; Inpatient Hospital Deductible and Hospital and
Extended Care Services Coinsurance Amounts for 1998
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 1998 under Medicare's hospital
insurance program (Medicare Part A). The Medicare statute specifies the
formulae to be used to determine these amounts.
The inpatient hospital deductible will be $764. The daily
coinsurance amounts will be: (a) $191 for the 61st through 90th days of
hospitalization in a benefit period; (b) $382 for lifetime reserve
days; and (c) $95.50 for the 21st through 100th days of extended care
services in a skilled nursing facility in a benefit period.
EFFECTIVE DATE: This notice is effective on January 1, 1998.
FOR FURTHER INFORMATION CONTACT: John Wandishin, (410) 786-6389. 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 1998
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). This estimate is 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).
Section 4401(a) of the Balanced Budget Act of 1997 (Public Law 105-
33, enacted on August 5, 1997) amended section 1886(b)(3)(B)(i) of the
Act by making the percentage increase for hospitals paid under the
prospective payment system 0 percent for fiscal year 1998. Section
4411(a) of the Balanced Budget Act of 1997 similarly amended section
1886(b)(3)(B)(ii) of the Act by making the percentage increase for
hospitals excluded from the prospective payment system 0 percent for
fiscal year 1998. Therefore, our best estimate of the payment-weighted
average of the increase in the payment rates for fiscal year 1998 is 0
percent.
To develop the adjustment for real case mix, an average case mix
was first calculated for each hospital that reflects the relative
costliness of that hospital's
[[Page 59366]]
mix of cases compared to that of other hospitals. We then computed the
increase in average case mix for hospitals paid under the Medicare
prospective payment system in fiscal year 1997 compared to fiscal year
1996. (Hospitals excluded from the prospective payment system were
excluded from this calculation since their payments are based on
reasonable costs and are affected only by real increases in case mix.)
We used bills from prospective payment hospitals received in HCFA as of
July 1997. These bills represent a total of about 8.3 million
discharges for fiscal year 1997 and provide the most recent case mix
data available at this time. Based on these bills, the increase in
average case mix in fiscal year 1997 is 0.12 percent. Based on past
experience, we expect overall case mix to increase to 0.5 percent as
the year progresses and more fiscal year 1997 data become available.
Section 1813 of the Act requires that the inpatient hospital
deductible be increased only by that portion of the case mix increase
that is determined to be real. We estimate that the increase in real
case mix is about 0.5 percent. We believe that any case mix increased
up to 1 percent is real case mix increase. Therefore, for fiscal year
1997, all of the case mix increase, 0.5 percent, is real case mix
increase.
Thus, the estimate of the payment-weighted average of the
applicable percentage increases used for updating the payment rates is
0 percent, and the real case mix adjustment factor for the deductible
is 0.5 percent. Therefore, under the statutory formula, the inpatient
hospital deductible for services furnished in calendar year 1998 is
$764. This deductible amount is determined by multiplying $760 (the
inpatient hospital deductible for 1997) by the payment rate increase of
1.00 multiplied by the increase in real case mix of 1.005 which equals
$763.8 and is rounded to $764.
III. Computing the Inpatient Hospital and Extended Care Services
Coinsurance Amounts for 1998
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 1998, in
accordance with the fixed percentages defined in the law, the daily
coinsurance for the 61st through 90th days of hospitalization in a
benefit period will be $191 (\1/4\ of the inpatient hospital
deductible); the daily coinsurance for lifetime reserve days will be
$382 (\1/2\ of the inpatient hospital deductible); and the daily
coinsurance for the 21st through 100th days of extended care services
in a skilled nursing facility in a benefit period will be $95.50 (\1/8\
of the inpatient hospital deductible).
IV. Cost to Beneficiaries
We estimate that in 1998 there will be about 9.1 million
deductibles paid at $764 each, about 2.8 million days subject to
coinsurance at $191 per day (for hospital days 61 through 90), about
1.3 million lifetime reserve days subject to coinsurance at $382 per
day, and about 25.0 million extended care days subject to coinsurance
at $95.50 per day. Similarly, we estimate that in 1997 there will be
about 8.9 deductibles paid at $760 each, about 2.7 million days subject
to coinsurance at $190 per day (for hospital days 61 through 90), about
1.3 million lifetime reserve days subject to coinsurance at $380 per
day, and about 24.6 million extended care days subject to coinsurance
at $95.00 per day. Therefore, the estimated total increase in cost to
beneficiaries is about $260 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 formal notice
and comment rulemaking procedures, to make such announcements. In doing
so, we acknowledge that, under the Administrative Procedure Act,
interpretive rule, 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. Impact Statement
This notice merely announces amounts required by legislation. This
notice is not a proposed rule or a final rule issued after a proposal
and does not alter any regulation or policy. Therefore, we have
determined, and certify, that no analyses are required under Executive
Order 12866, the Regulatory Flexibility Act (5 U.S.C. 601 through 612),
or section 1102(b) of the Act.
In accordance with the provisions of Executive Order 12866, this
notice was reviewed by the Office of Management and Budget.
Authority: Section 1813(b)(2) of the Social Security Act (42
U.S.C. 1395e(b)(2)).
(Catalog of Federal Domestic Assistance Program No. 93.773,
Medicare--Hospital Insurance)
Dated: September 19, 1997.
Nancy-Ann Min DeParle,
Deputy Administrator, Health Care Financing Administration.
Dated: October 7, 1997.
Donna E. Shalala,
Secretary.
[FR Doc. 97-29032 Filed 10-31-97; 8:45 am]
BILLING CODE 4120-01-P
