E7-18732. Medicare Program; Prospective Payment System and Consolidated Billing for Skilled Nursing Facilities; Corrections

AGENCY:

Centers for Medicare & Medicaid Services (CMS), HHS.

ACTION:

Final rule; correction notice.

SUMMARY:

This document corrects technical errors that appeared in the August 3, 2007 Federal Register, entitled “Medicare Program; Prospective Payment System and Consolidated Billing for Skilled Nursing Facilities for FY 2008; Final Rule.”

DATES:

Effective Date: This correction is effective October 1, 2007.

FOR FURTHER INFORMATION CONTACT:

Bill Ullman, [phone].

SUPPLEMENTARY INFORMATION:

I. Background

FR Doc. 07-3784 of August 3, 2007 (72 FR 43412) contained technical errors that this notice serves to identify and correct. The first involves the construction of the 2004 skilled nursing facility (SNF) market basket update. In the SNF prospective payment system (PPS) proposed rule for fiscal year (FY) 2008 (72 FR 25552, May 4, 2007), we proposed to discontinue the previous, 1997-based market basket's use of the Producer Price Index (PPI) for Industrial Chemicals, in favor of using a blended PPI composed of the PPIs for soap and other detergent manufacturing (North American Industrial Classification System (NAICS) 325611), polish and other sanitation good manufacturing (NAICS 325612), and all other miscellaneous chemical product and preparation manufacturing (NAICS 325998) in the 2004-based market basket, which we believed would better reflect SNF purchasing patterns. In the FY 2008 SNF PPS final rule, we finalized this proposal “* * * to revise the market basket to reflect more appropriate, industry-specific price proxies (such as the blended compensation and chemical price proxies)” (72 FR 43426, 43436).

However, in performing the actual calculations in the final rule, we inadvertently proxied the chemicals cost weight by the PPI for Industrial Chemicals rather than by the appropriate blended chemical price proxy. We note that this error did not affect the final market basket update factor of 3.3 percent, but did affect the labor-related share. The corrected labor-related share is 70.249, which is slightly higher than the 70.152 figure published in the FY 2008 SNF PPS final rule. Accordingly, in this notice, we are republishing corrected versions of Tables 6, 7, 10, 13, and 14 (as well as revising the corresponding portions of the final rule's preamble text) in order to reflect the final, corrected labor-related share.

In addition, we have determined that in the process of developing the most recent hospital wage index, two inpatient hospital providers with wage data that belonged in the Hartford-West Hartford-East Hartford, CT core-based statistical area (CBSA) were inadvertently included in rural Connecticut instead. Accordingly, in Table 8, we are revising the wage index value for CBSA Code 25540 (Hartford-West Hartford-East Hartford, CT) from 1.0937 to the corrected value of 1.0930. Similarly, in Table 9, we are revising the wage index value for CBSA Code 7 (rural Connecticut) from 1.1283 to the corrected value of 1.1711. As we are revising only a single entry in each of these two tables, we are not republishing Tables 8 and 9 in their entirety in this notice; however, we note that the corrected versions of both tables are available online on the SNF PPS Web site, at http://www.cms.hhs.gov/​SNFPPS/​04_​WageIndex.asp. Moreover, we note that the corrected version of Table 14 that we are republishing in this notice also reflects these corrected values. We are also correcting a typographical error in the final rule's version of that table, which had inadvertently displayed the wage data update for rural New England incorrectly as a negative value.

II. Correction of Errors

In FR Doc. 07-3784 (72 FR 43412), make the following corrections:

1. On page 43421, Table 6 is corrected to read as follows:

Table 6.—RUG-53

[Case-Mix Adjusted Federal Rates for Urban SNFs by Labor and Non-Labor Component.]

RUG-III category	Total rate	Labor portion	Non-labor portion
RUX	601.90	422.83	179.07
RUL	528.59	371.33	157.26
RVX	456.34	320.57	135.77
RVL	425.55	298.94	126.61
RHX	386.84	271.75	115.09
RHL	379.51	266.60	112.91
RMX	442.85	311.10	131.75
RML	406.19	285.34	120.85
RLX	314.39	220.86	93.53
RUC	510.99	358.97	152.02
RUB	468.47	329.10	139.37
RUA	446.48	313.65	132.83
RVC	410.89	288.65	122.24
RVB	390.37	274.23	116.14
RVA	350.78	246.42	104.36
RHC	357.52	251.15	106.37
RHB	341.39	239.82	101.57
RHA	316.46	222.31	94.15
RMC	328.48	230.75	97.73
RMB	319.69	224.58	95.11
RMA	312.35	219.42	92.93
RLB	289.47	203.35	86.12
RLA	246.95	173.48	73.47
SE3	362.08	254.36	107.72
SE2	307.83	216.25	91.58
SE1	274.11	192.56	81.55
SSC	269.71	189.47	80.24
SSB	255.05	179.17	75.88
SSA	250.65	176.08	74.57
CC2	268.25	188.44	79.81
CC1	244.79	171.96	72.83
CB2	233.06	163.72	69.34
CB1	222.79	156.51	66.28
CA2	221.33	155.48	65.85
CA1	206.67	145.18	61.49
IB2	197.87	139.00	58.87
IB1	194.94	136.94	58.00
IA2	178.81	125.61	53.20
IA1	171.48	120.46	51.02
BB2	196.40	137.97	58.43
BB1	190.54	133.85	56.69
BA2	177.34	124.58	52.76
BA1	165.61	116.34	49.27
PE2	214.00	150.33	63.67
PE1	209.60	147.24	62.36
PD2	203.73	143.12	60.61
PD1	200.80	141.06	59.74
PC2	193.47	135.91	57.56
PC1	190.54	133.85	56.69
PB2	170.01	119.43	50.58
PB1	168.54	118.40	50.14
PA2	167.08	117.37	49.71
PA1	162.68	114.28	48.40

2. On page 43422, Table 7 is corrected to read as follows:

Table 7.—RUG-53

[Case-Mix Adjusted Federal Rates for Rural SNFs by Labor and Non-Labor Component.]

RUG-III category	Total rate	Labor portion	Non-labor portion
RUX	628.90	441.80	187.10
RUL	558.86	392.59	166.27
RVX	471.49	331.22	140.27
RVL	442.08	310.56	131.52
RHX	394.83	277.36	117.47
RHL	387.83	272.45	115.38
RMX	444.62	312.34	132.28
RML	409.60	287.74	121.86
RLX	314.47	220.91	93.56
RUC	542.05	380.78	161.27
RUB	501.43	352.25	149.18
RUA	480.42	337.49	142.93
RVC	428.07	300.71	127.36
RVB	408.46	286.94	121.52
RVA	370.64	260.37	110.27
RHC	366.82	257.69	109.13
RHB	351.41	246.86	104.55
RHA	327.60	230.14	97.46
RMC	335.36	235.59	99.77
RMB	326.96	229.69	97.27
RMA	319.95	224.76	95.19
RLB	290.66	204.19	86.47
RLA	250.04	175.65	74.39
SE3	352.30	247.49	104.81
SE2	300.47	211.08	89.39
SE1	268.25	188.44	79.81
SSC	264.05	185.49	78.56
SSB	250.04	175.65	74.39
SSA	245.84	172.70	73.14
CC2	262.65	184.51	78.14
CC1	240.23	168.76	71.47
CB2	229.03	160.89	68.14
CB1	219.22	154.00	65.22
CA2	217.82	153.02	64.80
CA1	203.81	143.17	60.64
IB2	195.41	137.27	58.14
IB1	192.61	135.31	57.30
IA2	177.20	124.48	52.72
IA1	170.19	119.56	50.63
BB2	194.01	136.29	57.72
BB1	188.41	132.36	56.05
BA2	175.80	123.50	52.30
BA1	164.59	115.62	48.97
PE2	210.82	148.10	62.72
PE1	206.62	145.15	61.47
PD2	201.01	141.21	59.80
PD1	198.21	139.24	58.97
PC2	191.21	134.32	56.89
PC1	188.41	132.36	56.05
PB2	168.79	118.57	50.22
PB1	167.39	117.59	49.80
PA2	165.99	116.61	49.38
PA1	161.79	113.66	48.13

3. On page 43424, third column, first full paragraph, line 7, the figure “$29,758” is corrected to read “$29,755”.

4. On page 43424, Table 10 is corrected to read as follows:

Table 10.—RUG-53

[SNF XYZ: Located in Cedar Rapids, IA (Urban CBSA 16300) Wage Index: 0.8852]

RUG group	Labor	Wage index	Adj. labor	Non-labor	Adj. rate	Percent adj.	Medicare days	Payment
RVX	$320.57	0.8852	$283.77	$135.77	$419.54	$419.54	14	$5,874.00
RLX	220.86	0.8852	195.51	93.53	289.04	289.04	30	8,671.00
RHA	222.31	0.8852	196.79	94.15	290.94	290.94	16	4,655.00
CC2	188.44	0.8852	166.81	79.81	246.62	*562.29	10	5,623.00
IA2	125.61	0.8852	111.19	53.20	164.39	164.39	30	4,932.00
Total							100	29,755.00
* Reflects a 128 percent adjustment from section 511 of the MMA.

5. On page 43430, Table 13 is corrected to read as follows:

Table 13.—Labor-related Relative Importance, FY 2007 and FY 2008

	Relative importance, labor-related, FY 2007 (1997-based index) 06:2 forecast	Relative importance, labor-related, FY 2008 (2004-based index) 07:2 forecast
Wages and salaries	54.231	51.218
Employee benefits	11.903	11.72
Nonmedical professional fees	2.721	1.333
Labor-intensive services	4.035	3.456
Capital-related (.391)	2.949	2.522
Total	75.839	70.249

6. On page 43434, third column, final paragraph, line 19, the figure “9.6 percent” is corrected to read “9.5 percent”.

7. On page 43435, Table 14 is corrected to read as follows:

Table 14.—Projected Impact to the SNF PPS for FY 2008

	Number of facilities	Update wage data (percent)	Total FY 2008 change (percent)
Total	15,325	0.0	3.3
Urban	10,476	−.0.2	3.1
Rural	4,849	1.0	4.3
Hospital based urban	1,450	0.0	3.3
Freestanding urban	9,026	−0.2	3.1
Hospital based rural	1,130	1.2	4.5
Freestanding rural	3,719	1.0	4.3
Urban by region:
New England	865	−0.3	3.0
Middle Atlantic	1,482	−0.9	2.4
South Atlantic	1,735	0.0	3.3
East North Central	2,004	−0.2	3.1
East South Central	524	0.0	3.3
West North Central	823	0.4	3.7
West South Central	1,146	0.2	3.5
Mountain	470	0.1	3.4
Pacific	1,419	−0.2	3.1
Outlying1	8	6.0	9.5
Rural by region:
New England	130	0.5	3.8
Middle Atlantic	260	1.5	4.8
South Atlantic	608	0.9	4.2
East North Central	927	0.9	4.2
East South Central	556	1.1	4.4
West North Central	1,134	0.9	4.2
West South Central	818	1.3	4.6
Mountain	262	1.3	4.6
Pacific	152	1.3	4.6
Outlying1	2	−3.2	0.0
Ownership:
Government	675	0.1	3.4
Proprietary	11,178	0.0	3.3
Voluntary	3,472	−0.1	3.2
1 The Outlying region includes the following, noncontiguous jurisdictions referenced as States in §§ 1861(x) and 210(h) of the Social Security Act: Puerto Rico, the Virgin Islands, American Samoa, and Guam.

8. On page 43436, third column, lines 4-5, the figure “9.6 percent” is corrected to read “9.5 percent”.

9. On page 43446, the entry of “1.0937” that is displayed in Table 8 as the wage index value for CBSA Code 25540 (Hartford-West Hartford-East Hartford, CT) is corrected to read “1.0930”.

10. On page 43462, the entry of “1.1283” that is displayed in Table 9 as the wage index value for CBSA Code 7 (rural Connecticut) is corrected to read “1.1711”.

III. Waiver of Proposed Rulemaking and Delayed Effective Date

We ordinarily publish a notice of proposed rulemaking in the Federal Register to provide a period for public comment before the provisions of a notice such as this take effect in accordance with section 553(b) of the Administrative Procedure Act (APA) (5 U.S.C. 553(b)). We also ordinarily provide a 30-day delay in the effective date of the provisions of a notice in accordance with section 553(d) of the APA (5 U.S.C. 553(d)). However, we can waive both the notice and comment procedure and the 30-day delay in effective date if the Secretary finds, for good cause, that a notice and comment process is impracticable, unnecessary or contrary to the public interest, and incorporates a statement of the finding and the reasons therefore in the notice.

We find for good cause that it is unnecessary to undertake notice and comment rulemaking because this notice merely provides technical corrections to the regulations. We are not making substantive changes to our payment methodologies or policies, but rather, are simply implementing correctly the payment methodologies and policies that we previously proposed, received comment on, and subsequently finalized. The public has already had the opportunity to comment on these payment methodologies and policies, and this correction notice is intended solely to ensure that the FY 2008 SNF PPS final rule accurately reflects them. Therefore, we believe that undertaking further notice and comment procedures to incorporate these corrections into the update notice is unnecessary and contrary to the public interest.

Further, we believe a delayed effective date is unnecessary because this correction notice merely corrects inadvertent technical errors. The changes noted above do not make any substantive changes to the SNF PPS payment methodologies or policies. Moreover, we regard imposing a delay in the effective date as being contrary to the public interest. We believe that it is in the public interest for providers to receive appropriate SNF PPS payments in as timely a manner as possible and to ensure that the FY 2008 SNF PPS final rule accurately reflects our payment methodologies, payment rates, and policies. Therefore, we find good cause to waive notice and comment procedures, as well as the 30-day delay in effective date.

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

Dated: September 17, 2007.

Ann C. Agnew,

Executive Secretary to the Department.