E8-2798. Medicare Program; Extension of Certain Hospital Wage Index Reclassifications

AGENCY:

Centers for Medicare & Medicaid Services (CMS) HHS.

ACTION:

Notice.

SUMMARY:

This notice announces the extension of the expiration date for certain wage index geographic reclassifications and special exceptions as implemented by section 117 of the Medicare, Medicaid and SCHIP Extension Act of 2007 (Pub. L. 110-173). Certain geographic reclassifications and special exception hospitals' wage indices that were set to expire on September 30, 2007 are now extended through September 30, 2008. In addition, for hospital reclassifications extended by Division B, Title I, section 106(a) of the Tax Relief and Health Care Act of 2006, Pub. L. 109-432, that resulted in a lower wage index for the second half of FY 2007, we will apply the higher wage index that was applicable to such hospitals during the first half of FY 2007, for the entire fiscal year.

DATES:

Effective date: This notice is effective on February 22, 2008. Applicability date: This notice is applicable to the hospitals identified in section II.A. of this notice on October 1, 2007 and to the hospitals identified in section II.B. of this notice on April 1, 2007.

FOR FURTHER INFORMATION CONTACT:

Brian Slater, [phone].

SUPPLEMENTARY INFORMATION:

I. Background

Section 508 of the Medicare Prescription Drug, Improvement and Modernization Act of 2003 (MMA) (Pub. L. 108-173) permitted a qualifying hospital to appeal the wage index classification otherwise applicable to the hospital and apply for reclassification to another area of the State in which the hospital was located (or, at the discretion of the Secretary, to an area within a contiguous State). Hospitals were required to submit their applications by February 15, 2004. In the February 13, 2004 Federal Register (69 FR 7340), we published a notice that described our implementation of section 508 of MMA. The Congress limited the reclassifications under section 508 of MMA to a 3-year period beginning April 1, 2004 and ending March 31, 2007.

Section 106(a) of the Medicare Improvements and Extension Act, Division B of the Tax Relief and Health Care Act of 2006 (MIEA-TRHCA) (Pub. L. 109-432) extended any geographic reclassification that was set to expire on March 31, 2007 by 6 months until September 30, 2007. In the March 23, 2007 Federal Register (72 FR 13799), we published a notice explaining how we would implement section 106 of MIEA-TRHCA. We also explained that for a subset of hospitals whose reclassifications were extended, the wage index for the second half of fiscal year (FY) 2007 would decrease from the first half of the year.

II. Provisions of the Notice

A. Reclassifications for Hospitals Affected by Section 117(a) of the Medicare, Medicaid, and SCHIP Extension Act of 2007

Section 117(a) of the Medicare, Medicaid, and SCHIP Extension Act of 2007 (MMSEA) (Pub. L. 110-173) extends through September 30, 2008 both the reclassifications that were extended by section 106 of MIEA-TRCHA as well as certain special exception wage indices referenced in the FY 2005 inpatient prospective payment system (IPPS) final rule (69 FR 49105 and 49107). Consistent with how section 508 of MMA and special exceptions were implemented in FY 2005, hospitals receiving extensions under section 117(a) of MMSEA may not receive an out-migration adjustment. Such hospitals are treated in a manner consistent to reclassified hospitals, and section 1886(d)(13) of the Act specifies that a reclassified hospital is not eligible for the out-migration adjustment. In addition, the special exceptions granted in FY 2005 provided for the complete wage index to be assigned the specified hospitals without any addition of an out-migration adjustment. Further, we only extended the reclassification or special exception in cases where it benefited the hospital. If, in FY 2008, the hospital is already receiving a reclassification or wage index that results in a higher wage index than would be received under the reclassification or special exception extension, then we did not change the hospital's wage index value that was published in the October 10, 2007, or subsequent notice.

The following table lists providers affected by section 117(a) of MMSEA, which extends certain reclassifications and special exceptions through FY 2008 (October 1, 2007 through September 30, 2008):

Fiscal intermediary No.	Provider No.	FY 2008 wage index	FY 2008 GAF
52280	010150	0.8588	0.9010
00322	020008	1.2727	1.1795
00454	050494	1.4147	1.2682
52280	050549	1.4147	1.2682
52280	060075	1.2164	1.1436
00308	070036	1.3696	1.2403
00011	160064	0.9194	0.9441
52280	220046	1.1304	1.0876
00450	230003	1.0147	1.0100
00450	230004	1.0147	1.0100
00452	230036	1.0244	1.0166
00450	230038	1.0147	1.0100
00450	230059	1.0147	1.0100
00452	230066	1.0147	1.0100
00450	230072	1.0147	1.0100
00452	230097	1.0147	1.0100
00452	230106	1.0147	1.0100
00450	230174	1.0147	1.0100
00450	230236	1.0147	1.0100
00230	250002	0.8217	0.8742
52280	250122	0.8217	0.8742
03201	2 270002	0.8738	0.9118
03201	270023	0.8871	0.9212
03201	270032	0.8871	0.9212
03201	270057	0.8871	0.9212
00390	310021	1.3003	1.1970
00390	310028	1.3003	1.1970
00390	310051	1.3003	1.1970
00390	310060	1.3003	1.1970
00390	310115	1.3003	1.1970
00390	310120	1.3003	1.1970
00308	2 330023	1.3003	1.1970
00308	330049	1.3003	1.1970
00308	2 330067	1.3003	1.1970
00308	330106	1.4999	1.3200
00308	3 330135	1.3003	1.1970
00308	3 330205	1.3003	1.1970
00308	3 330264	1.3003	1.1970
77002	340002	0.9342	0.9545
03301	350002	0.7944	0.8542
03301	350003	0.7944	0.8542
03301	350006	0.7944	0.8542
03301	350010	0.7944	0.8542
03301	350014	0.7944	0.8542
03301	350015	0.7944	0.8542
03301	350017	0.7944	0.8542
03301	350030	0.7944	0.8542
00325	380090	1.1501	1.1005
00363	390001	1.0004	1.0003
00363	390003	1.0004	1.0003
00363	1 390045	1.0004	1.0003
52280	390072	1.0004	1.0003
00363	390095	1.0004	1.0003
00363	390119	1.0004	1.0003
00363	390137	1.0004	1.0003
00363	390169	1.0004	1.0003
00363	390185	0.9650	0.9759
00363	390192	1.0004	1.0003
00363	390237	1.0004	1.0003
00363	390270	0.9650	0.9759
03401	430005	0.8686	0.9080
03401	2 430008	0.9373	0.9566
52280	430015	0.9373	0.9566
03401	3 430048	0.9373	0.9566
03401	430060	0.9373	0.9566
03401	430064	0.9373	0.9566
03401	430077	0.9373	0.9566
03401	430091	0.9373	0.9566
00400	450010	0.9136	0.9400
00270	470003	1.1304	1.0876
00453	490001	0.8606	0.9023
03601	2 530008	0.9271	0.9495
03601	2 530010	0.9271	0.9495
03601	530015	0.9650	0.9759
1 This hospital has been assigned a wage index under a special exceptions policy (See the August 18, 2006 final rule (71 FR 48070)).
2 These hospitals are assigned a wage index value under a special exceptions policy (See Table 9B of the August 11, 2004 final rule (69 FR 49105) and the December 30, 2004 correction notice, (69 FR 78705)).
3 The hospital originally received an out-migration adjustment for FY 2008. However, due to the extension of the hospital's special reclassification or exception, the hospital no longer qualifies for the out-migration adjustment for FY 2008.

B. Reclassifications for Hospitals Affected by Section 117(c) of the Medicare, Medicaid, and SCHIP Extension Act of 2007

Section 117(c) of MMSEA requires that, for hospital reclassifications extended by section 106(a) of MIEA-TRHCA that resulted in a lower wage index for the period April 1, 2007 through September 30, 2007, we will apply the higher wage index that was applicable to such hospitals during the period October 1, 2006 through March 31, 2007, for the entire FY 2007.

The following table lists providers affected by section 117(c), which revises the FY 2007 wage index from April 1, 2007 through September 30, 2007:

Fiscal intermediary No.	Provider No.	Current wage index 4/1/2007-9/30/2007	Current GAF 4/1/2007-9/30/2007	Revised wage index 4/1/2007-9/30/2007	Revised GAF 4/1/2007-9/30/2007
00308	070001	1.2730	1.1797	1.2971	1.1950
00308	070005	1.2730	1.1797	1.2971	1.1950
00308	070010	1.3113	1.2039	1.3134	1.2053
00308	070016	1.2730	1.1797	1.2971	1.1950
00308	070017	1.2730	1.1797	1.2971	1.1950
00308	070019	1.2730	1.1797	1.2971	1.1950
00308	070022	1.2730	1.1797	1.2971	1.1950
00308	070028	1.3113	1.2039	1.3134	1.2053
00308	070031	1.2730	1.1797	1.2971	1.1950
00308	070039	1.2730	1.1797	1.2971	1.1950
00011	160040	0.8708	0.9096	0.8803	0.9164
00011	160067	0.8708	0.9096	0.8803	0.9164
00011	160110	0.8708	0.9096	0.8803	0.9164
00450	230020	1.0440	1.0299	1.0563	1.0382
00452	230024	1.0440	1.0299	1.0563	1.0382
00450	230053	1.0440	1.0299	1.0563	1.0382
00450	230089	1.0440	1.0299	1.0563	1.0382
00452	230104	1.0440	1.0299	1.0563	1.0382
00450	230119	1.0440	1.0299	1.0563	1.0382
00450	230135	1.0440	1.0299	1.0563	1.0382
00450	230146	1.0440	1.0299	1.0563	1.0382
00450	230165	1.0440	1.0299	1.0563	1.0382
00450	230176	1.0440	1.0299	1.0563	1.0382
00450	230270	1.0440	1.0299	1.0563	1.0382
00452	230273	1.0440	1.0299	1.0563	1.0382
00390	310021	1.3113	1.2039	1.3134	1.2053
00390	310028	1.3113	1.2039	1.3134	1.2053
00390	310051	1.3113	1.2039	1.3134	1.2053
00390	310060	1.3113	1.2039	1.3134	1.2053
00390	310115	1.3113	1.2039	1.3134	1.2053
00390	310120	1.3113	1.2039	1.3134	1.2053
00308	330049	1.3113	1.2039	1.3134	1.2053
00308	330126	1.3113	1.2039	1.3134	1.2053
00308	330135	1.3113	1.2039	1.3134	1.2053
00308	330205	1.3113	1.2039	1.3134	1.2053
00308	330209	1.2730	1.1797	1.2971	1.1950
00308	330264	1.2730	1.1797	1.2971	1.1950

We have implemented these provisions through instructions to the Medicare Administrative Contractors (MAC) (CMS Joint Signature Memorandum, JSM/TDL-08149, January 28, 2008). CMS has instructed FIs/MACs to reprocess claims for the affected providers FY 2007 and FY 2008.

When originally applying section 508 of MMA, we required each hospital to submit a request in writing by February 15, 2004, to the Medicare Geographic Classification Review Board (MGCRB), with a copy to CMS. We will neither require nor accept written requests for the extension required by section 117 of MMSEA, since that section, by providing a 1-year extension for certain special exceptions and reclassifications set to expire September 30, 2007, already specifies the affected hospitals.

III. Regulatory Impact Statement

We have examined the impact of this notice using the requirements of Executive Order 12866 (September 1993, Regulatory Planning and Review), and Executive Order 13132.

Executive Order 12866 directs 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 notice implements a statutory provision that would increase payments to hospitals by less than $100 million and is therefore, not a major rule. This notice also is not a legislative rulemaking under the Administrative Procedure Act, but rather interprets and applies a statutory mandate.

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. Again, although we do not consider this notice to be a substantive rule subject to notice and comment rulemaking, we note that this notice does not impose any costs on State or local governments. Therefore, the requirements of Executive Order 13132 would not be applicable.

We estimate the impact of sections 117(a) and (c) of MMSEA is to increase payments to hospitals by $24 million for FY 2007 and by $57 million for FY 2008.

In accordance with the provisions of Executive Order 12866, this notice was reviewed by the Office of Management and Budget.

Authority: Section 117(a) and (c) of Public Law 110-173. Section 106(a) of Division B, Title 1, Public Law 109-432. Section 508(a) of Public Law 108-173.

(Catalog of Federal Domestic Assistance Program No. 93.773, Medicare—Hospital Insurance; and Program No. 93.774, Medicare—Supplementary Medical Insurance Program)

Dated: February 7, 2008.

Kerry Weems,

Acting Administrator, Centers for Medicare & Medicaid Services.