Medicare Program; Prospective Payment System and Consolidated Billing for Skilled Nursing Facilities for FY 2015
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Proposed rule.
CFR Part: "42 CFR Part 488"
RIN Number: "RIN 0938-AS07"
Citation: "79 FR 25767"
Document Number: "CMS-1605-P"
"Proposed Rules"
SUMMARY: This proposed rule would update the payment rates used under the prospective payment system (PPS) for skilled nursing facilities (SNFs) for fiscal year (FY) 2015. In addition, it includes a proposal to adopt the most recent
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Availability of Certain Tables Exclusively Through the Internet on the CMS Web Site
In the past, tables setting forth the Wage Index for Urban Areas Based on CBSA Labor Market Areas and the Wage Index Based on CBSA Labor Market Areas for Rural Areas were published in the
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To assist readers in referencing sections contained in this document, we are providing the following Table of Contents.
Table of Contents
I. Executive Summary
A. Purpose
B. Summary of Major Provisions
C. Summary of Cost and Benefits
II. Background
A. Statutory Basis and Scope
B. Initial Transition
C. Required Annual Rate Updates
III. SNF PPS Rate Setting Methodology and FY 2015 Update
A. Federal Base Rates
B. SNF Market Basket Update
1. SNF Market Basket Index
2. Use of the SNF Market Basket Percentage
3. Forecast Error Adjustment
4. Multifactor Productivity Adjustment
a. Incorporating the Multifactor Productivity Adjustment Into the Market Basket Update
5. Market Basket Update Factor for FY 2015
C. Case-Mix Adjustment
D. Wage Index Adjustment
E. Adjusted Rate Computation Example
IV. Additional Aspects of the SNF PPS
A. SNF Level of Care--Administrative Presumption
B. Consolidated Billing
C. Payment for SNF-Level Swing-Bed Services
V. Other Issues
A. Proposed Changes to SNF PPS Wage Index
1. Background
2. Proposed Implementation of New Labor Market Definitions
a. Micropolitan Areas
b. Urban Counties Becoming Rural
c. Rural Counties Becoming Urban
d. Urban Counties Moving to a Different Urban CBSA
e. Transition Period
3. Labor-Related Share
B.
C. Proposed Revisions to Policies Related to the Change of Therapy (COT) Other Medicare Required Assessment (OMRA)
D. Civil Money Penalties (Section 6111 of the Affordable Care Act)
E. Observations on Therapy Utilization Trends
F. Accelerating Health Information Exchange in the SNF PPS
VI. Provisions of the Proposed Rule
VII. Collection of Information Requirements
VIII. Response to Comments
IX. Economic Analyses
Regulation Text
Acronyms
In addition, because of the many terms to which we refer by acronym in this proposed rule, we are listing these abbreviations and their corresponding terms in alphabetical order below:
AIDS Acquired Immune Deficiency Syndrome
ARD Assessment reference date
BBA Balanced Budget Act of 1997, Pub. L. 105-33
BBRA Medicare,
BIPA Medicare,
CAH Critical access hospital
CBSA Core-based statistical area
CFR Code of Federal Regulations
CMI Case-mix index
CMP Civil money penalties
COT Change of therapy
ECI Employment Cost Index
eCQM Electronically specified clinical quality measures
EHR Electronic health record
EOT End of therapy
EOT-R End of therapy--resumption
FQHC Federally qualified health center
FY Fiscal year
GAO
HCPCS Healthcare Common Procedure Coding System
HOMER Home office
ICR Information Collection Requirements
IGI IHS (Information Handling Services)
IPPS Inpatient Prospective Payment System
MDS Minimum data set
MFP Multifactor productivity
MMA Medicare Prescription Drug, Improvement, and Modernization Act of 2003, Pub. L. 108-173
MSA Metropolitan statistical area
NAICS North American Industrial Classification System
NF Nursing facility
OMRA Other Medicare Required Assessment
PAMA Protecting Access to Medicare Act of 2014, Pub. L 113-93
PPS Prospective Payment System
RAI Resident assessment instrument
RAVEN Resident assessment validation entry
RFA Regulatory Flexibility Act, Pub. L. 96-354
RHC Rural health clinic
RIA Regulatory impact analysis
RUG-III Resource Utilization Groups, Version 3
RUG-IV Resource Utilization Groups, Version 4
RUG-53 Refined 53-Group RUG-III Case-Mix Classification System
SCHIP State Children's Health Insurance Program
SNF Skilled nursing facility
STM Staff time measurement
STRIVE Staff time and resource intensity verification
UMRA Unfunded Mandates Reform Act, Pub. L. 104-4
I. Executive Summary
A. Purpose
This proposed rule would update the SNF prospective payment rates for FY 2015 as required under section 1888(e)(4)(E) of the Act. It would also respond to section 1888(e)(
B. Summary of Major Provisions
In accordance with sections 1888(e)(4)(E)(ii)(IV) and 1888(e)(5) of the Act, the federal rates in this proposed rule would reflect an update to the rates that we published in the SNF PPS final rule for FY 2014 (78 FR 47936) which reflects the SNF market basket index, adjusted by the forecast error correction, if applicable, and the multifactor productivity adjustment for FY 2015.
C. Summary of Cost and Benefits GOES
Provision description Total transfers Proposed FY 2015 SNF PPS The overall economic impact of this proposed rule payment rate update would be an estimated increase of$750 million in aggregate payments to SNFs during FY 2015.
II. Background
A. Statutory Basis and Scope
As amended by section 4432 of the Balanced Budget Act of 1997 (BBA, Pub. L. 105-33, enacted on
As noted in section I.F. of that legislative history, on
B. Initial Transition
Under sections 1888(e)(1)(A) and 1888(e)(11) of the Act, the SNF PPS included an initial, three-phase transition that blended a facility-specific rate (reflecting the individual facility's historical cost experience) with the federal case-mix adjusted rate. The transition extended through the facility's first three cost reporting periods under the PPS, up to and including the one that began in FY 2001. Thus, the SNF PPS is no longer operating under the transition, as all facilities have been paid at the full federal rate effective with cost reporting periods beginning in FY 2002. As we now base payments for SNFs entirely on the adjusted federal per diem rates, we no longer include adjustment factors under the transition related to facility-specific rates for the upcoming FY.
C. Required Annual Rate Updates
Section 1888(e)(4)(E) of the Act requires the SNF PPS payment rates to be updated annually. The most recent annual update occurred in a final rule that set forth updates to the SNF PPS payment rates for FY 2014 (78 FR 47936,
Section 1888(e)(
* The unadjusted federal per diem rates to be applied to days of covered SNF services furnished during the upcoming FY.
* The case-mix classification system to be applied for these services during the upcoming FY.
* The factors to be applied in making the area wage adjustment for these services.
Along with other revisions discussed later in this preamble, this proposed rule would provide the required annual updates to the per diem payment rates for SNFs for FY 2015.
III. SNF PPS Rate Setting Methodology and FY 2015 Update
A. Federal Base Rates
Under section 1888(e)(4) of the Act, the SNF PPS uses per diem federal payment rates based on mean SNF costs in a base year (FY 1995) updated for inflation to the first effective period of the PPS. We developed the federal payment rates using allowable costs from hospital-based and freestanding SNF cost reports for reporting periods beginning in FY 1995. The data used in developing the federal rates also incorporated a "Part B add-on," which is an estimate of the amounts that, prior to the SNF PPS, would have been payable under Part B for covered SNF services furnished to individuals during the course of a covered Part A stay in a SNF.
In developing the rates for the initial period, we updated costs to the first effective year of the PPS (the 15-month period beginning
B. SNF Market Basket Update
1. SNF Market Basket Index
Section 1888(e)(5)(A) of the Act requires us to establish a SNF market basket index that reflects changes over time in the prices of an appropriate mix of goods and services included in covered SNF services. Accordingly, we have developed a SNF market basket index that encompasses the most commonly used cost categories for SNF routine services, ancillary services, and capital-related expenses. We use the SNF market basket index, adjusted in the manner described below, to update the federal rates on an annual basis. In the SNF PPS final rule for FY 2014 (78 FR 47939 through 47946), we revised and rebased the market basket, which included updating the base year from FY 2004 to FY 2010.
For the FY 2015 proposed rule, the FY 2010-based SNF market basket growth rate is estimated to be 2.4 percent, which is based on the
2. Use of the SNF Market Basket Percentage
Section 1888(e)(5)(B) of the Act defines the SNF market basket percentage as the percentage change in the SNF market basket index from the midpoint of the previous FY to the midpoint of the current FY. For the federal rates set forth in this proposed rule, we use the percentage change in the SNF market basket index to compute the update factor for FY 2015. This is based on the IGI first quarter 2014 forecast (with historical data through the fourth quarter 2013) of the FY 2015 percentage increase in the FY 2010-based SNF market basket index for routine, ancillary, and capital-related expenses, which is used to compute the update factor in this proposed rule. As discussed in sections III.B.3. and III.B.4. of this proposed rule, this market basket percentage change would be reduced by the forecast error correction (as described in
3. Forecast Error Adjustment
As discussed in the
For FY 2013 (the most recently available FY for which there is final data), the estimated increase in the market basket index was 2.5 percentage points, while the actual increase for FY 2013 was 2.2 percentage points, resulting in the actual increase being 0.3 percentage point lower than the estimated increase. Accordingly, as the difference between the estimated and actual amount of change in the market basket index does not exceed the 0.5 percentage point threshold, the payment rates for FY 2015 do not include a forecast error adjustment. Table 1 shows the forecasted and actual market basket amounts for FY 2013. GOES
Table 1--Difference Between the Forecasted and Actual Market Basket Increases for FY 2013 Index Forecasted Actual FY 2013 FY 2013 FY 2013 difference increase * increase ** SNF 2.5 2.2 -0.3 * Published inFederal Register ; based on second quarter 2012 IGI forecast (2004-based index). ** Based on the first quarter 2014IHS Global Insight forecast, with historical data through the fourth quarter 2013 (2004-based index).
4. Multifactor Productivity Adjustment
Section 3401(b) of the Affordable Care Act requires that, in FY 2012 (and in subsequent FYs), the market basket percentage under the SNF payment system as described in section 1888(e)(5)(B)(i) of the Act is to be reduced annually by the productivity adjustment described in section 1886(b)(3)(B)(xi)(II) of the Act. Section 1886(b)(3)(B)(xi)(II) of the Act, added by section 3401(a) of the Affordable Care Act, sets forth the definition of this productivity adjustment. The statute defines the productivity adjustment to be equal to "the 10-year moving average of changes in annual economy-wide private nonfarm business multi-factor productivity (as projected by the Secretary for the 10-year period ending with the applicable fiscal year, year, cost-reporting period, or other annual period)" (the MFP adjustment).
The projection of MFP is currently produced by IGI, an economic forecasting firm. To generate a forecast of MFP, IGI replicated the MFP measure calculated by the BLS, using a series of proxy variables derived from IGI's U.S. macroeconomic models. This process is described in greater detail in section III.F.3. of the FY 2012 SNF PPS final rule (76 FR 48527 through 48529).
a. Incorporating the Multifactor Productivity Adjustment Into the Market Basket Update
According to section 1888(e)(5)(A) of the Act, the Secretary "shall establish a skilled nursing facility market basket index that reflects changes over time in the prices of an appropriate mix of goods and services included in covered skilled nursing facility services." Section 1888(e)(5)(B)(ii) of the Act, added by section 3401(b) of the Affordable Care Act, requires that for FY 2012 and each subsequent FY, after determining the market basket percentage described in section 1888(e)(5)(B)(i) of the Act, "the Secretary shall reduce such percentage by the productivity adjustment described in section 1886(b)(3)(B)(xi)(II)" (which we refer to as the MFP adjustment). Section 1888(e)(5)(B)(ii) of the Act further states that the reduction of the market basket percentage by the MFP adjustment may result in the market basket percentage being less than zero for a FY, and may result in payment rates under section 1888(e) of the Act for a FY being less than such payment rates for the preceding FY. Thus, if the application of the MFP adjustment to the market basket percentage calculated under section 1888(e)(5)(B)(i) of the Act results in an MFP-adjusted market basket percentage that is less than zero, then the annual update to the unadjusted federal per diem rates under section 1888(e)(4)(E)(ii) of the Act would be negative, and such rates would decrease relative to the prior FY.
For the FY 2015 update, the MFP adjustment is calculated as the 10-year moving average of changes in MFP for the period ending
5. Market Basket Update Factor for FY 2015
Sections 1888(e)(4)(E)(ii)(IV) and 1888(e)(5)(i) of the Act require that the update factor used to establish the FY 2015 unadjusted federal rates be at a level equal to the market basket index percentage change. Accordingly, we determined the total growth from the average market basket level for the period of
While we would continue to compute and apply separate federal per diem rates for SNFs located in urban and rural areas as we have in the past, we propose to use the revised OMB statistical area delineations discussed in Section V.A below to identify a facility's urban or rural status for the purpose of determining which set of rate tables would apply to a facility beginning on
Table 2--FY 2015 Unadjusted Federal Rate Per Diem Urban Rate component Nursing--case- Therapy--case- Therapy--non- Non-case-mix mix mix case-mix Per Diem Amount$169.14 $127.41 $16.78 $86.32
Table 3--FY 2015 Unadjusted Federal Rate Per Diem Rural Rate component Nursing--case- Therapy--case- Therapy--non- Non-case-mix mix mix case-mix Per Diem Amount$161.59 $146.90 $17.92 $87.92
C. Case-Mix Adjustment
Under section 1888(e)(4)(G)(i) of the Act, the federal rate also incorporates an adjustment to account for facility case-mix, using a classification system that accounts for the relative resource utilization of different patient types. The statute specifies that the adjustment is to reflect both a resident classification system that the Secretary establishes to account for the relative resource use of different patient types, as well as resident assessment data and other data that the Secretary considers appropriate. In the interim final rule with comment period that initially implemented the SNF PPS (63 FR 26252,
We note that case-mix classification is based, in part, on the beneficiary's need for skilled nursing care and therapy services. The case-mix classification system uses clinical data from the MDS to assign a case-mix group to each patient that is then used to calculate a per diem payment under the SNF PPS. As discussed in section IV.A. of this proposed rule, the clinical orientation of the case-mix classification system supports the SNF PPS's use of an administrative presumption that considers a beneficiary's initial case-mix classification to assist in making certain SNF level of care determinations. Further, because the MDS is used as a basis for payment, as well as a clinical assessment, we have provided extensive training on proper coding and the time frames for MDS completion in our Resident Assessment Instrument (RAI) Manual. For an MDS to be considered valid for use in determining payment, the MDS assessment must be completed in compliance with the instructions in the RAI Manual in effect at the time the assessment is completed. For payment and quality monitoring purposes, the RAI Manual consists of both the Manual instructions and the interpretive guidance and policy clarifications posted on the appropriate MDS Web site at http://www.cms.gov/Medicare/Quality-Initiatives-Patient-Assessment-Instruments/NursingHomeQualityInits/MDS30RAIManual.html.
In addition, we note that section 511 of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA, Pub. L. 108-173) amended section 1888(e)(12) of the Act to provide for a temporary increase of 128 percent in the PPS per diem payment for any SNF residents with Acquired Immune Deficiency Syndrome (AIDS), effective with services furnished on or after
Currently, we use the International Classification of Diseases, 9th revision, Clinical Modification (ICD-9-CM) code 042 to identify those residents for whom it is appropriate to apply the AIDS add-on established by section 511 of the MMA. In this context, we note that the Department published a final rule in the
However, on
Under section 1888(e)(
Table 4-- RUG-IV Case-Mix Adjusted Federal Rates and Associated Indexes URBAN RUG-IV Nursing Therapy Nursing Therapy Non-case Non-case Total Category index index component component mix therapy mix rate comp component RUX 2.67 1.87$451.60 $238.26 $86.32 $776.18 RUL 2.57 1.87 434.69 238.26 86.32 759.27 RVX 2.61 1.28 441.46 163.08 86.32 690.86 RVL 2.19 1.28 370.42 163.08 86.32 619.82 RHX 2.55 0.85 431.31 108.30 86.32 625.93 RHL 2.15 0.85 363.65 108.30 86.32 558.27 RMX 2.47 0.55 417.78 70.08 86.32 574.18 RML 2.19 0.55 370.42 70.08 86.32 526.82 RLX 2.26 0.28 382.26 35.67 86.32 504.25 RUC 1.56 1.87 263.86 238.26 86.32588.44 RUB 1.56 1.87 263.86 238.26 86.32 588.44 RUA 0.99 1.87 167.45 238.26 86.32 492.03 RVC 1.51 1.28 255.40 163.08 86.32 504.80 RVB 1.11 1.28 187.75 163.08 86.32 437.15 RVA 1.10 1.28 186.05 163.08 86.32 435.45 RHC 1.45 0.85 245.25 108.30 86.32 439.87 RHB 1.19 0.85 201.28 108.30 86.32 395.90 RHA 0.91 0.85 153.92 108.30 86.32 348.54 RMC 1.36 0.55 230.03 70.08 86.32386.43 RMB 1.22 0.55 206.35 70.08 86.32 362.75 RMA 0.84 0.55 142.08 70.08 86.32 298.48 RLB 1.50 0.28 253.71 35.67 86.32 375.70 RLA 0.71 0.28 120.09 35.67 86.32 242.08 ES3 3.58 605.52 16.78 86.32 708.62 ES2 2.67 451.60 16.78 86.32 554.70 ES1 2.32 392.40 16.78 86.32 495.50 HE2 2.22 375.49 16.78 86.32 478.59 HE1 1.74 294.30 16.78 86.32 397.40 HD2 2.04 345.05 16.78 86.32 448.15 HD1 1.60 270.62 16.78 86.32 373.72 HC2 1.89 319.67 16.78 86.32 422.77 HC1 1.48 250.33 16.78 86.32 353.43 HB2 1.86 314.60 16.78 86.32 417.70 HB1 1.46 246.94 16.78 86.32 350.04 LE2 1.96 331.51 16.78 86.32 434.61 LE1 1.54 260.48 16.78 86.32 363.58 LD2 1.86 314.60 16.78 86.32 417.70 LD1 1.46 246.94 16.78 86.32 350.04 LC2 1.56 263.86 16.78 86.32 366.96 LC1 1.22 206.35 16.78 86.32 309.45 LB2 1.45 245.25 16.78 86.32 348.35 LB1 1.14 192.82 16.78 86.32 295.92 CE2 1.68 284.16 16.78 86.32 387.26 CE1 1.50 253.71 16.78 86.32 356.81 CD2 1.56 263.86 16.78 86.32 366.96 CD1 1.38 233.41 16.78 86.32 336.51 CC2 1.29 218.19 16.78 86.32 321.29 CC1 1.15 194.51 16.78 86.32 297.61 CB2 1.15 194.51 16.78 86.32 297.61 CB1 1.02 172.52 16.78 86.32 275.62 CA2 0.88 148.84 16.78 86.32 251.94 CA1 0.78 131.93 16.78 86.32 235.03 BB2 0.97 164.07 16.78 86.32 267.17 BB1 0.90 152.23 16.78 86.32 255.33 BA2 0.70 118.40 16.78 86.32 221.50 BA1 0.64 108.25 16.78 86.32 211.35 PE2 1.50 253.71 16.78 86.32 356.81 PE1 1.40 236.80 16.78 86.32 339.90 PD2 1.38 233.41 16.78 86.32 336.51 PD1 1.28 216.50 16.78 86.32 319.60 PC2 1.10 186.05 16.78 86.32 289.15 PC1 1.02 172.52 16.78 86.32 275.62 PB2 0.84 142.08 16.78 86.32 245.18 PB1 0.78 131.93 16.78 86.32 235.03 PA2 0.59 99.79 16.78 86.32 202.89 PA1 0.54 91.34 16.78 86.32 194.44
Table 5--RUG-IV Case-Mix Adjusted Federal Rates and Associated Indexes RURAL RUG-IV Nursing Therapy Nursing Therapy Non-case Non-case Total Category index index component component mix mix rate therapy component comp RUX 2.67 1.87$431.45 $274.70 $87.92 $794.07 RUL 2.57 1.87 415.29 274.70 87.92 777.91 RVX 2.61 1.28 421.75 188.03 87.92 697.70 RVL 2.19 1.28 353.88 188.03 87.92 629.83 RHX 2.55 0.85 412.05 124.87 87.92 624.84 RHL 2.15 0.85 347.42 124.87 87.92 560.21 RMX 2.47 0.55 399.13 80.80 87.92 567.85 RML 2.19 0.55 353.88 80.80 87.92 522.60 RLX 2.26 0.28 365.19 41.13 87.92 494.24 RUC 1.56 1.87 252.08 274.70 87.92614.70 RUB 1.56 1.87 252.08 274.70 87.92 614.70 RUA 0.99 1.87 159.97 274.70 87.92 522.59 RVC 1.51 1.28 244.00 188.03 87.92 519.95 RVB 1.11 1.28 179.36 188.03 87.92 455.31 RVA 1.10 1.28 177.75 188.03 87.92 453.70 RHC 1.45 0.85 234.31 124.87 87.92 447.10 RHB 1.19 0.85 192.29 124.87 87.92 405.08 RHA 0.91 0.85 147.05 124.87 87.92 359.84 RMC 1.36 0.55 219.76 80.80 87.92388.48 RMB 1.22 0.55 197.14 80.80 87.92 365.86 RMA 0.84 0.55 135.74 80.80 87.92 304.46 RLB 1.50 0.28 242.39 41.13 87.92 371.44 RLA 0.71 0.28 114.73 41.13 87.92 243.78 ES3 3.58 578.49 17.92 87.92 684.33 ES2 2.67 431.45 17.92 87.92 537.29 ES1 2.32 374.89 17.92 87.92 480.73 HE2 2.22 358.73 17.92 87.92 464.57 HE1 1.74 281.17 17.92 87.92 387.01 HD2 2.04 329.64 17.92 87.92 435.48 HD1 1.60 258.54 17.92 87.92 364.38 HC2 1.89 305.41 17.92 87.92 411.25 HC1 1.48 239.15 17.92 87.92 344.99 HB2 1.86 300.56 17.92 87.92 406.40 HB1 1.46 235.92 17.92 87.92 341.76 LE2 1.96 316.72 17.92 87.92 422.56 LE1 1.54 248.85 17.92 87.92 354.69 LD2 1.86 300.56 17.92 87.92 406.40 LD1 1.46 235.92 17.92 87.92 341.76 LC2 1.56 252.08 17.92 87.92 357.92 LC1 1.22 197.14 17.92 87.92 302.98 LB2 1.45 234.31 17.92 87.92 340.15 LB1 1.14 184.21 17.92 87.92 290.05 CE2 1.68 271.47 17.92 87.92 377.31 CE1 1.50 242.39 17.92 87.92 348.23 CD2 1.56 252.08 17.92 87.92 357.92 CD1 1.38 222.99 17.92 87.92 328.83 CC2 1.29 208.45 17.92 87.92 314.29 CC1 1.15 185.83 17.92 87.92 291.67 CB2 1.15 185.83 17.92 87.92 291.67 CB1 1.02 164.82 17.92 87.92 270.66 CA2 0.88 142.20 17.92 87.92 248.04 CA1 0.78 126.04 17.92 87.92 231.88 BB2 0.97 156.74 17.92 87.92 262.58 BB1 0.90 145.43 17.92 87.92 251.27 BA2 0.70 113.11 17.92 87.92 218.95 BA1 0.64 103.42 17.92 87.92 209.26 PE2 1.50 242.39 17.92 87.92 348.23 PE1 1.40 226.23 17.92 87.92 332.07 PD2 1.38 222.99 17.92 87.92 328.83 PD1 1.28 206.84 17.92 87.92 312.68 PC2 1.10 177.75 17.92 87.92 283.59 PC1 1.02 164.82 17.92 87.92 270.66 PB2 0.84 135.74 17.92 87.92 241.58 PB1 0.78 126.04 17.92 87.92 231.88 PA2 0.59 95.34 17.92 87.92 201.18 PA1 0.54 87.26 17.92 87.92 193.10
D. Wage Index Adjustment
Section 1888(e)(4)(G)(ii) of the Act requires that we adjust the federal rates to account for differences in area wage levels, using a wage index that the Secretary determines appropriate. Since the inception of the SNF PPS, we have used hospital inpatient wage data in developing a wage index to be applied to SNFs. We propose to continue this practice for FY 2015, as we continue to believe that in the absence of SNF-specific wage data, using the hospital inpatient wage index data is appropriate and reasonable for the SNF PPS. As explained in the update notice for FY 2005 (69 FR 45786), the SNF PPS does not use the hospital area wage index's occupational mix adjustment, as this adjustment serves specifically to define the occupational categories more clearly in a hospital setting; moreover, the collection of the occupational wage data also excludes any wage data related to SNFs. Therefore, we believe that using the updated wage data exclusive of the occupational mix adjustment continues to be appropriate for SNF payments. For FY 2015, the updated wage data are for hospital cost reporting periods beginning on or after
We note that section 315 of the
In addition, we propose to continue to use the same methodology discussed in the SNF PPS final rule for FY 2008 (72 FR 43423) to address those geographic areas in which there are no hospitals, and thus, no hospital wage index data on which to base the calculation of the FY 2015 SNF PPS wage index. For rural geographic areas that do not have hospitals, and therefore, lack hospital wage data on which to base an area wage adjustment, we would use the average wage index from all contiguous Core-Based Statistical Areas (CBSAs) as a reasonable proxy. For FY 2015, there are no rural geographic areas that do not have hospitals, and thus, this methodology would not be applied. For rural
Once calculated, we would apply the wage index adjustment to the labor-related portion of the federal rate. Each year, we calculate a revised labor-related share, based on the relative importance of labor-related cost categories (that is, those cost categories that are sensitive to local area wage costs) in the input price index. In the SNF PPS final rule for FY 2014 (78 FR 47944 through 47946), we finalized a proposal to revise the labor-related share to reflect the relative importance of the revised FY 2010-based SNF market basket cost weights for the following cost categories: wages and salaries; employee benefits; the labor-related portion of nonmedical professional fees; administrative and facilities support services; all other--labor-related services; and a proportion of capital-related expenses.
We calculate the labor-related relative importance from the SNF market basket, and it approximates the labor-related portion of the total costs after taking into account historical and projected price changes between the base year and FY 2015. The price proxies that move the different cost categories in the market basket do not necessarily change at the same rate, and the relative importance captures these changes. Accordingly, the relative importance figure more closely reflects the cost share weights for FY 2015 than the base year weights from the SNF market basket.
We calculate the labor-related relative importance for FY 2015 in four steps. First, we compute the FY 2015 price index level for the total market basket and each cost category of the market basket. Second, we calculate a ratio for each cost category by dividing the FY 2015 price index level for that cost category by the total market basket price index level. Third, we determine the FY 2015 relative importance for each cost category by multiplying this ratio by the base year (FY 2010) weight. Finally, we add the FY 2015 relative importance for each of the labor-related cost categories (wages and salaries, employee benefits, the labor-related portion of non-medical professional fees, administrative and facilities support services, all other: labor-related services, and a portion of capital-related expenses) to produce the FY 2015 labor-related relative importance. Tables 6 and 7 show the RUG-IV case-mix adjusted federal rates by labor-related and non-labor-related components. As discussed above, the proposed new OMB delineations would be used to identify a facility's urban or rural status for the purpose of determining which set of rate tables would apply to them beginning on
Table 6--RUG-IV Case-Mix Adjusted Federal Rates for Urban SNFs by Labor and Non-Labor Component RUG-IV Total Labor Non-labor Category rate portion portion RUX 776.18$539.55 $236.63 RUL 759.27 527.79 231.48 RVX 690.86 480.24 210.62 RVL 619.82 430.86 188.96 RHX 625.93 435.10 190.83 RHL 558.27 388.07 170.20 RMX 574.18 399.13 175.05 RML 526.82 366.21 160.61 RLX 504.25 350.52 153.73 RUC 588.44 409.04179.40 RUB 588.44 409.04 179.40 RUA 492.03 342.02 150.01 RVC 504.80 350.90 153.90 RVB 437.15 303.88 133.27 RVA 435.45 302.69 132.76 RHC 439.87 305.77 134.10 RHB 395.90 275.20 120.70 RHA 348.54 242.28 106.26 RMC 386.43 268.62117.81 RMB 362.75 252.16 110.59 RMA 298.48 207.48 91.00 RLB 375.70 261.16 114.54 RLA 242.08 168.28 73.80 ES3 708.62 492.58 216.04 ES2 554.70 385.59 169.11 ES1 495.50 344.44 151.06 HE2 478.59 332.68 145.91 HE1 397.40 276.24 121.16 HD2 448.15 311.52 136.63 HD1 373.72 259.78 113.94 HC2 422.77 293.88 128.89 HC1 353.43 245.68 107.75 HB2 417.70 290.36 127.34 HB1 350.04 243.32 106.72 LE2 434.61 302.11 132.50 LE1 363.58 252.74 110.84 LD2 417.70 290.36 127.34 LD1 350.04 243.32 106.72 LC2 366.96 255.08 111.88 LC1 309.45 215.11 94.34 LB2 348.35 242.15 106.20 LB1 295.92 205.70 90.22 CE2 387.26 269.20 118.06 CE1 356.81 248.03 108.78 CD2 366.96 255.08 111.88 CD1 336.51 233.92 102.59 CC2 321.29 223.34 97.95 CC1 297.61 206.88 90.73 CB2 297.61 206.88 90.73 CB1 275.62 191.59 84.03 CA2 251.94 175.13 76.81 CA1 235.03 163.38 71.65 BB2 267.17 185.72 81.45 BB1 255.33 177.49 77.84 BA2 221.50 153.97 67.53 BA1 211.35 146.92 64.43 PE2 356.81 248.03 108.78 PE1 339.90 236.27 103.63 PD2 336.51 233.92 102.59 PD1 319.60 222.16 97.44 PC2 289.15 201.00 88.15 PC1 275.62 191.59 84.03 PB2 245.18 170.43 74.75 PB1 235.03 163.38 71.65 PA2 202.89 141.03 61.86 PA1 194.44 135.16 59.28
GOES
Table 7--RUG-IV Case-Mix Adjusted Federal Rates for Rural SNFs by Labor and Non-Labor Component RUG-IV Total Labor Non-labor Category rate portion portion RUX 794.07$551.98 $242.09 RUL 777.91 540.75 237.16 RVX 697.70 484.99 212.71 RVL 629.83 437.81 192.02 RHX 624.84 434.35 190.49 RHL 560.21 389.42 170.79 RMX 567.85 394.73 173.12 RML 522.60 363.27 159.33 RLX 494.24 343.56 150.68 RUC 614.70 427.30187.40 RUB 614.70 427.30 187.40 RUA 522.59 363.27 159.32 RVC 519.95 361.43 158.52 RVB 455.31 316.50 138.81 RVA 453.70 315.38 138.32 RHC 447.10 310.79 136.31 RHB 405.08 281.58 123.50 RHA 359.84 250.14 109.70 RMC 388.48 270.04118.44 RMB 365.86 254.32 111.54 RMA 304.46 211.64 92.82 RLB 371.44 258.20 113.24 RLA 243.78 169.46 74.32 ES3 684.33 475.70 208.63 ES2 537.29 373.49 163.80 ES1 480.73 334.17 146.56 HE2 464.57 322.94 141.63 HE1 387.01 269.02 117.99 HD2 435.48 302.72 132.76 HD1 364.38 253.29 111.09 HC2 411.25 285.87 125.38 HC1 344.99 239.81 105.18 HB2 406.40 282.50 123.90 HB1 341.76 237.57 104.19 LE2 422.56 293.73 128.83 LE1 354.69 246.56 108.13 LD2 406.40 282.50 123.90 LD1 341.76 237.57 104.19 LC2 357.92 248.80 109.12 LC1 302.98 210.61 92.37 LB2 340.15 236.45 103.70 LB1 290.05 201.62 88.43 CE2 377.31 262.28 115.03 CE1 348.23 242.07 106.16 CD2 357.92 248.80 109.12 CD1 328.83 228.58 100.25 CC2 314.29 218.47 95.82 CC1 291.67 202.75 88.92 CB2 291.67 202.75 88.92 CB1 270.66 188.14 82.52 CA2 248.04 172.42 75.62 CA1 231.88 161.19 70.69 BB2 262.58 182.53 80.05 BB1 251.27 174.67 76.60 BA2 218.95 152.20 66.75 BA1 209.26 145.46 63.80 PE2 348.23 242.07 106.16 PE1 332.07 230.83 101.24 PD2 328.83 228.58 100.25 PD1 312.68 217.35 95.33 PC2 283.59 197.13 86.46 PC1 270.66 188.14 82.52 PB2 241.58 167.93 73.65 PB1 231.88 161.19 70.69 PA2 201.18 139.85 61.33 PA1 193.10 134.23 58.87
Section 1888(e)(4)(G)(ii) of the Act also requires that we apply this wage index in a manner that does not result in aggregate payments under the SNF PPS that are greater or less than would otherwise be made if the wage adjustment had not been made. For FY 2015 (federal rates effective
In the SNF PPS final rule for FY 2006 (70 FR 45026,
In adopting the CBSA geographic designations, we provided for a one-year transition in FY 2006 with a blended wage index for all providers. For FY 2006, the wage index for each provider consisted of a blend of 50 percent of the FY 2006 MSA-based wage index and 50 percent of the FY 2006 CBSA-based wage index (both using FY 2002 hospital data). We referred to the blended wage index as the FY 2006 SNF PPS transition wage index. As discussed in the SNF PPS final rule for FY 2006 (70 FR 45041), since the expiration of this one-year transition on
On
While the revisions OMB published on
As discussed in the SNF PPS proposed rule for FY 2014 (78 FR 26448), the changes made by the bulletin and their ramifications required extensive review by CMS before using them for the SNF PPS wage index. Having completed our assessment, we are proposing changes to the SNF PPS wage index based on the newest OMB delineations, as described in OMB Bulletin No. 13-01, beginning in FY 2015, including a proposed one-year transition with a blended wage index for FY 2015. These proposed changes are discussed further in section V.A. of this proposed rule. The proposed wage index applicable to FY 2015 is set forth in Table A available on the CMS Web site at http://cms.gov/Medicare/Medicare-Fee-for-Service-Payment/SNFPPS/WageIndex.html. Table A provides a crosswalk between the FY 2015 wage index for a provider using the current OMB delineations in effect in FY 2014 and the FY 2015 wage index using the proposed revised OMB delineations, as well as the proposed transition wage index values that would be in effect in FY 2015 if these proposed changes are finalized.
E. Adjusted Rate Computation Example
Using the hypothetical SNF XYZ described below, Table 8 shows the adjustments made to the federal per diem rates to compute the provider's actual per diem PPS payment. We derive the Labor and Non-labor columns from Table 6. The wage index used in this example is based on the proposed transition wage index, which may be found in Table A as referenced above. As illustrated in Table 8, SNF XYZ's total PPS payment would equal
SNF XYZ: Located inCedar Rapids, IA (Urban CBSA 16300) Wage Index: 0.8883 [See Proposed Transition Wage Index in Table A] *1 RUG-IV Group Labor Wage index Adjusted labor Non-labor RVX$480.24 0.8883$426.60 $210.62 ES2 385.59 0.8883 342.52 169.11 RHA 242.28 0.8883 215.22 106.26 CC2 * 223.34 0.8883 198.39 97.95 BA2 153.97 0.8883 136.77 67.53
SNF XYZ: Located inCedar Rapids, IA (Urban CBSA 16300) Wage Index: 0.8883 [See Proposed Transition Wage Index in Table A] *1 RUG-IV Group Adjusted rate Percent Medicare days Payment adjustment RVX$637.22 $637.22 14$8,921.08 ES2 511.63 511.63 30 15,348.90 RHA 321.48 321.48 16 5,143.68 CC2 * 296.34 675.66 10 6,756.60 BA2 204.30 204.30 30 6,129.00 *1 Available on the CMS Web site at http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/SNFPPS/WageIndex.html.
IV. Additional Aspects of the SNF PPS</p>
A. SNF Level of Care--Administrative Presumption
The establishment of the SNF PPS did not change
In accordance with section 1888(e)(
A beneficiary assigned to any of the lower 14 RUG-IV groups is not automatically classified as either meeting or not meeting the definition, but instead receives an individual level of care determination using the existing administrative criteria. This presumption recognizes the strong likelihood that beneficiaries assigned to one of the upper 52 RUG-IV groups during the immediate post-hospital period require a covered level of care, which would be less likely for those beneficiaries assigned to one of the lower 14 RUG-IV groups.
In the
* Rehabilitation plus Extensive Services;
* Ultra High Rehabilitation;
* Very High Rehabilitation;
* High Rehabilitation;
* Medium Rehabilitation;
* Low Rehabilitation;
* Extensive Services;
*
* Special Care Low; and,
*
However, we note that this administrative presumption policy does not supersede the SNF's responsibility to ensure that its decisions relating to level of care are appropriate and timely, including a review to confirm that the services prompting the beneficiary's assignment to one of the upper 52 RUG-IV groups (which, in turn, serves to trigger the administrative presumption) are themselves medically necessary. As we explained in the FY 2000 SNF PPS final rule (64 FR 41667), the administrative presumption:
". . . is itself rebuttable in those individual cases in which the services actually received by the resident do not meet the basic statutory criterion of being reasonable and necessary to diagnose or treat a beneficiary's condition (according to section 1862(a)(1) of the Act). Accordingly, the presumption would not apply, for example, in those situations in which a resident's assignment to one of the upper . . . groups is itself based on the receipt of services that are subsequently determined to be not reasonable and necessary."
Moreover, we want to stress the importance of careful monitoring for changes in each patient's condition to determine the continuing need for Part A SNF benefits after the assessment reference date of the 5-day assessment.
B. Consolidated Billing
Sections 1842(b)(6)(E) and 1862(a)(18) of the Act (as added by section 4432(b) of the BBA) require a SNF to submit consolidated
A detailed discussion of the legislative history of the consolidated billing provision is available on the SNF PPS Web site at http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/SNFPPS/Downloads/Legislative_History_07302013.pdf. In particular, section 103 of the
As explained in the FY 2001 proposed rule (65 FR 19232), the amendments enacted in section 103 of the BBRA not only identified for exclusion from this provision a number of particular service codes within four specified categories (that is, chemotherapy items, chemotherapy administration services, radioisotope services, and customized prosthetic devices), but also gave the Secretary ". . . the authority to designate additional, individual services for exclusion within each of the specified service categories." In the proposed rule for FY 2001, we also noted that the
As we further explained in the final rule for FY 2001 (65 FR 46790), and as our longstanding policy, any additional service codes that we might designate for exclusion under our discretionary authority must meet the same statutory criteria used in identifying the original codes excluded from consolidated billing under section 103(a) of the BBRA: they must fall within one of the four service categories specified in the BBRA; and they also must meet the same standards of high cost and low probability in the SNF setting, as discussed in the
We note that the original BBRA amendment (as well as the implementing regulations) identified a set of excluded services by means of specifying HCPCS codes that were in effect as of a particular date (in that case, as of
Section 1883 of the Act permits certain small, rural hospitals to enter into a
Accordingly, all non-CAH swing-bed rural hospitals have now come under the SNF PPS. Therefore, all rates and wage indexes outlined in earlier sections of this proposed rule for the SNF PPS also apply to all non-CAH swing-bed rural hospitals. A complete discussion of assessment schedules, the MDS, and the transmission software (RAVEN-SB for Swing Beds) appears in the FY 2002 final rule (66 FR 39562) and in the FY 2010 final rule (74 FR 40288). As finalized in the FY 2010 SNF PPS final rule (74 FR 40356-57), effective
V. Other Issues
A. Proposed Changes to SNF PPS Wage Index
1. Background
Section 1888(e)(4)(G)(ii) of the Act requires that we adjust the federal rates to account for differences in area wage levels, using a wage index that the Secretary determines appropriate. Since the inception of the SNF PPS, we have used hospital inpatient wage data, exclusive of the occupational mix adjustment, in developing a wage index to be applied to SNFs. As noted previously in section III.D of this proposed rule, we are proposing to continue that practice for FY 2015. The wage index used for the SNF PPS is calculated using the Inpatient Prospective Payment System (IPPS) wage index data on the basis of the labor market area in which the acute care hospital is located, but without taking into account geographic reclassifications under section 1886(d)(8) and (d)(10) of the Act, and without applying the IPPS rural floor under section 4410 of the BBA, the IPPS imputed rural floor under 42 CFR 412.64(h), and the outmigration adjustment under section 1886(d)(13) (see the FY 2006 SNF PPS proposed rule (70 FR 29090 through 29092)). The applicable SNF wage index value is assigned to a SNF on the basis of the labor market area in which the SNF is geographically located. Under section 1888(e)(4)(G)(ii) of the Act, beginning with FY 2006, we delineate labor market areas based on the Core-Based Statistical Areas (CBSAs) established by the
While the revisions OMB published on
2. Proposed Implementation of New Labor Market Delineations
As discussed in the FY 2014 SNF PPS proposed rule (78 FR 26448) and final rule (78 FR 47952), CMS delayed implementing the new OMB statistical area delineations to allow for sufficient time to assess the new changes. We believe it is important for the SNF PPS to use the latest OMB delineations available in order to maintain a more accurate and up-to-date payment system that reflects the reality of population shifts and labor market conditions. While CMS and other stakeholders have explored potential alternatives to the current CBSA-based labor market system (we refer readers to the CMS Web site at www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/Wage-Index-Reform.html), no consensus has been achieved regarding how best to implement a replacement system. As discussed in the FY 2005 IPPS final rule (69 FR 49027), "While we recognize that MSAs are not designed specifically to define labor market areas, we believe they do represent a useful proxy for this purpose." We further believe that using the most current OMB delineations would increase the integrity of the SNF PPS wage index by creating a more accurate representation of geographic variation in wage levels. We have reviewed our findings and impacts relating to the new OMB delineations, and have concluded that there is no compelling reason to further delay implementation. Because we believe that we have broad authority under section 1888(e)(4)(G)(ii) to determine the labor market areas used for the SNF PPS wage index, and because we also believe that the most current OMB delineations accurately reflect the local economies and wage levels of the areas in which hospitals are currently located, we are proposing to implement the new OMB delineations as described in the
a. Micropolitan Statistical Areas
As discussed in the FY 2006 SNF PPS proposed rule (70 FR 29093 through 29094) and final rule (70 FR 45041), CMS considered how to use the Micropolitan Statistical Area definitions in the calculation of the wage index. OMB defines a "Micropolitan Statistical Area" as a CBSA "associated with at least one urban cluster that has a population of at least 10,000, but less than 50,000" (75 FR 37252). We refer to these as Micropolitan Areas. After extensive impact analysis, consistent with the treatment of these areas under the IPPS as discussed in the FY 2005 IPPS final rule (69 FR 49029 through 49032), CMS determined the best course of action would be to treat Micropolitan Areas as "rural" and include them in the calculation of each state's SNF PPS rural wage index (see 70 FR 29094 and 70 FR 45040 through 45041)). Thus, the SNF PPS statewide rural wage index is determined using IPPS hospital data from hospitals located in non-MSA areas, and the statewide rural wage index is assigned to SNFs located in those areas. Because Micropolitan Areas tend to encompass smaller population centers and contain fewer hospitals than MSAs, we determined that if Micropolitan Areas were to be treated as separate labor market areas, the SNF PPS wage index would have included significantly more single-provider labor market areas. As we explained in the FY 2006 SNF PPS proposed rule (70 FR 29094), recognizing Micropolitan Areas as independent labor markets would generally increase the potential for dramatic shifts in year-to-year wage index values because a single hospital (or group of hospitals) could have a disproportionate effect on the wage index of an area. Dramatic shifts in an area's wage index from year to year are problematic and create instability in the payment levels from year to year, which could make fiscal planning for SNFs difficult if we adopted this approach. For these reasons, we adopted a policy to include Micropolitan Areas in the state's rural wage area for purposes of the SNF PPS wage index, and have continued this policy through the present.
Based upon the new 2010 Decennial Census data, a number of urban counties have switched status and have joined or became Micropolitan Areas, and some counties that once were part of a Micropolitan Area, have become urban. Overall, there are fewer Micropolitan Areas (541) under the new OMB delineations based on the 2010 Census than existed under the latest data from the 2000 Census (581). We believe that the best course of action would be to continue the policy established in the FY 2006 SNF PPS final rule and include Micropolitan Areas in each state's rural wage index. These areas continue to be defined as having relatively small urban cores (populations of 10,000 to 49,999). We do not believe it would be appropriate to calculate a separate wage index for areas that typically may include only a few hospitals for the reasons discussed in the FY 2006 SNF PPS proposed rule, and as discussed above. Therefore, in conjunction with our proposal to implement the new OMB labor market delineations beginning in FY 2015 and consistent with the treatment of Micropolitan Areas under the IPPS, we are proposing to continue to treat Micropolitan Areas as "rural" and to include Micropolitan Areas in the calculation of the state's rural wage index.
b. Urban Counties Becoming Rural
As previously discussed, we are proposing to implement the new OMB statistical area delineations (based upon the 2010 decennial Census data) beginning in FY 2015 for the SNF PPS wage index. Our analysis shows that a total of 37 counties (and county equivalents) that are currently considered part of an urban CBSA would be considered located in a rural area, beginning in FY 2015, if we adopt the new OMB delineations. Table 9 below lists the 37 urban counties that would be rural if we finalize our proposal to implement the new OMB delineations.
Table 9--Counties That Would Lose Urban Status County State Previous CBSA Previous urban area (constituent counties) Greene County IN 14020 Bloomington, IN. Anson County NC 16740 Charlotte-Gastonia-Rock Hill, NC-SC. Franklin County IN 17140 Cincinnati-Middletown, OH- KY-IN. Stewart County TN 17300 Clarksville, TN-KY. Howard County MO 17860 Columbia, MO. Delta County TX 19124 Dallas-Fort Worth- Arlington, TX. Pittsylvania VA 19260 Danville, VA. County Danville City VA 19260 Danville, VA. Preble County OH 19380 Dayton, OH. Gibson County IN 21780 Evansville, IN-KY. Webster County KY 21780 Evansville, IN-KY. Franklin County AR 22900 Fort Smith, AR-OK. Ionia County MI 24340 Grand Rapids-Wyoming, MI. Newaygo County MI 24340 Grand Rapids-Wyoming, MI. Greene County NC 24780 Greenville, NC. Stone County MS 25060 Gulfport-Biloxi, MS. Morgan County WV 25180 Hagerstown-Martinsburg, MD-WV. San Jacinto TX 26420 Houston-Sugar Land- County Baytown, TX. Franklin County KS 28140 Kansas City, MO-KS. Tipton County IN 29020 Kokomo, IN. Nelson County KY 31140 Louisville/Jefferson County, KY-IN. Geary County KS 31740 Manhattan, KS. Washington OH 37620 Parkersburg-Marietta- County Vienna, WV-OH. Pleasants County WV 37620 Parkersburg-Marietta- Vienna, WV-OH. George County MS 37700 Pascagoula, MS. Power County ID 38540 Pocatello, ID. Cumberland VA 40060 Richmond, VA. County King and Queen VA 40060 Richmond, VA. County Louisa County VA 40060 Richmond, VA. Washington MO 41180 St. Louis, MO-IL. County Summit County UT 41620 Salt Lake City, UT. Erie County OH 41780 Sandusky, OH. Franklin County MA 44140 Springfield, MA. Ottawa County OH 45780 Toledo, OH. Greene County AL 46220 Tuscaloosa, AL. Calhoun County TX 47020 Victoria, TX. Surry County VA 47260 Virginia Beach-Norfolk- Newport News, VA-NC.
We are proposing that the wage data for all hospitals located in the counties listed above would now be considered rural when calculating their respective state's rural wage index value, which rural wage index value would be used under the SNF PPS. Furthermore, for SNF providers currently located in an urban county that would be considered rural, should this proposal be finalized, CMS would utilize the rural unadjusted per-diem rates, found in Table 3 above, as the basis for determining this facility's payment rates beginning on
c. Rural Counties Becoming Urban
Analysis of the new OMB delineations (based upon the 2010 decennial Census data) shows that a total of 105 counties (and county equivalents) that are currently located in rural areas would be located in urban areas, if we finalize our proposal to implement the new OMB delineations. Table 10 below lists the 105 rural counties that would be urban if we finalize this proposal.
Table 10--Counties That Would Gain Urban Status County State New CBSA Urban area (constituent counties) Utuado Municipio PR 10380 Aguadilla-Isabela, PR. Linn County OR 10540 Albany, OR. Oldham County TX 11100 Amarillo, TX. Morgan County GA 12060 Atlanta-Sandy Springs- Roswell, GA. Lincoln County GA 12260 Augusta-Richmond County, GA-SC. Newton County TX 13140 Beaumont-Port Arthur, TX. Fayette County WV 13220 Beckley, WV. Raleigh County WV 13220 Beckley, WV. Golden Valley MT 13740 Billings, MT. County Oliver County ND 13900 Bismarck, ND. Sioux County ND 13900 Bismarck, ND. Floyd County VI 13980 Blacksburg-Christiansburg- Radford, VA. De Witt County IL 14010 Bloomington, IL. Columbia County PA 14100 Bloomsburg-Berwick, PA. Montour County PA 14100 Bloomsburg-Berwick, PA. Allen County KY 14540 Bowling Green, KY. Butler County KY 14540 Bowling Green, KY. St. Mary's MD 15680 California-Lexington Park, County MD. Jackson County IL 16060 Carbondale-Marion, IL. Williamson IL 16060 Carbondale-Marion, IL. County Franklin County PA 16540 Chambersburg-Waynesboro, PA. Iredell County NC 16740 Charlotte-Concord- Gastonia, NC-SC. Lincoln County NC 16740 Charlotte-Concord- Gastonia, NC-SC. Rowan County NC 16740 Charlotte-Concord- Gastonia, NC-SC. Chester County SC 16740 Charlotte-Concord- Gastonia, NC-SC. Lancaster County SC 16740 Charlotte-Concord- Gastonia, NC-SC. Buckingham VA 16820 Charlottesville, VA. County Union County IN 17140 Cincinnati, OH-KY-IN. Hocking County OH 18140 Columbus, OH. Perry County OH 18140 Columbus, OH. Walton County FL 18880 Crestview-Fort Walton Beach-Destin, FL. Hood County TX 23104 Dallas-Fort Worth- Arlington, TX. Somervell County TX 23104 Dallas-Fort Worth- Arlington, TX. Baldwin County AL 19300 Daphne-Fairhope-Foley, AL. Monroe County PA 20700 East Stroudsburg, PA. Hudspeth County TX 21340 El Paso, TX. Adams County PA 23900 Gettysburg, PA. Hall County NE 24260 Grand Island, NE. Hamilton County NE 24260 Grand Island, NE. Howard County NE 24260 Grand Island, NE. Merrick County NE 24260 Grand Island, NE. Montcalm County MI 24340 Grand Rapids-Wyoming, MI. Josephine County OR 24420 Grants Pass, OR. Tangipahoa LA 25220 Hammond, LA. Parish Beaufort County SC 25940 Hilton Head Island- Bluffton-Beaufort, SC. Jasper County SC 25940 Hilton Head Island- Bluffton-Beaufort, SC. Citrus County FL 26140 Homosassa Springs, FL. Butte County ID 26820 Idaho Falls, ID. Yazoo County MS 27140 Jackson, MS. Crockett County TN 27180 Jackson, TN. Kalawao County HI 27980 Kahului-Wailuku-Lahaina, HI. Maui County HI 27980 Kahului-Wailuku-Lahaina, HI. Campbell County TN 28940 Knoxville, TN. Morgan County TN 28940 Knoxville, TN. Roane County TN 28940 Knoxville, TN. Acadia Parish LA 29180 Lafayette, LA. Iberia Parish LA 29180 Lafayette, LA. Vermilion Parish LA 29180 Lafayette, LA. Cotton County OK 30020 Lawton, OK. Scott County IN 31140 Louisville/Jefferson County, KY-IN. Lynn County TX 31180 Lubbock, TX. Green County WI 31540 Madison, WI. Benton County MS 32820 Memphis, TN-MS-AR. Midland County MI 33220 Midland, MI. Martin County TX 33260 Midland, TX. Le Sueur County MN 33460 Minneapolis-St. Paul- Bloomington, MN-WI. Mille Lacs MN 33460 Minneapolis-St. Paul- County Bloomington, MN-WI. Sibley County MN 33460 Minneapolis-St. Paul- Bloomington, MN-WI. Maury County TN 34980 Nashville-Davidson- Murfreesboro-Franklin, TN. Craven County NC 35100 New Bern, NC. Jones County NC 35100 New Bern, NC. Pamlico County NC 35100 New Bern, NC. St. James Parish LA 35380 New Orleans-Metairie, LA. Box Elder County UT 36260 Ogden-Clearfield, UT. Gulf County FL 37460 Panama City, FL. Custer County SD 39660 Rapid City, SD. Fillmore County MN 40340 Rochester, MN. Yates County NY 40380 Rochester, NY. Sussex County DE 41540 Salisbury, MD-DE. Worcester County MA 41540 Salisbury, MD-DE. Highlands County FL 42700 Sebring, FL. Webster Parish LA 43340 Shreveport-Bossier City, LA. Cochise County AZ 43420 Sierra Vista-Douglas, AZ. Plymouth County IA 43580 Sioux City, IA-NE-SD. Union County SC 43900 Spartanburg, SC. Pend Oreille WA 44060 Spokane-Spokane Valley, County WA. Stevens County WA 44060 Spokane-Spokane Valley, WA. Augusta County VA 44420 Staunton-Waynesboro, VA. Staunton City VA 44420 Staunton-Waynesboro, VA. Waynesboro City VA 44420 Staunton-Waynesboro, VA. Little River AR 45500 Texarkana, TX-AR. County Sumter County FL 45540 The Villages, FL. Pickens County AL 46220 Tuscaloosa, AL. Gates County NC 47260 Virginia Beach-Norfolk- Newport News, VA-NC. Falls County TX 47380 Waco, TX. Columbia County WA 47460 Walla Walla, WA. Walla Walla WA 47460 Walla Walla, WA. County Peach County GA 47580 Warner Robins, GA. Pulaski County GA 47580 Warner Robins, GA. Culpeper County VA 47894 Washington-Arlington- Alexandria, DC-VA-MD-WV. Rappahannock VA 47894 Washington-Arlington- County Alexandria, DC-VA-MD-WV. Jefferson County NY 48060 Watertown-Fort Drum, NY. Kingman County KS 48620 Wichita, KS. Davidson County NC 49180 Winston-Salem, NC. Windham County CT 49340 Worcester, MA-CT.
We are proposing that when calculating the area wage index, the wage data for hospitals located in these counties would be included in their new respective urban CBSAs. Furthermore, for SNF providers currently located in a rural county that would be considered urban, should this proposal be finalized, CMS would utilize the urban unadjusted per-diem rates, found in Table 2 above, as the basis for determining this facility's payment rates beginning on
d. Urban Counties Moving to a Different Urban CBSA
In addition to rural counties becoming urban and urban counties becoming rural, several urban counties would shift from one urban CBSA to another urban CBSA under our proposal to adopt the new OMB delineations. In other cases, applying the new OMB delineations would involve a change only in CBSA name or number, while the CBSA continues to encompass the same constituent counties. For example, CBSA 29140 (
In one type of change, an entire CBSA would be subsumed by another CBSA. For example, CBSA 37380 (
In another type of change, some CBSAs have counties that would split off to become part of or to form entirely new labor market areas. For example, CBSA 37964 (
Finally, in some cases, a CBSA would lose counties to another existing CBSA if we adopt the new OMB delineations. For example,
Table 11--Counties That Would Change to a Different CBSA Prior CBSA New CBSA County State 11300 26900 Madison County IN. 11340 24860 Anderson County SC. 14060 14010 McLean County IL. 37764 15764 Essex County MA. 16620 26580 Lincoln County WV. 16620 26580 Putnam County WV. 16974 20994 DeKalb County IL. 16974 20994 Kane County IL. 21940 41980 Ceiba Municipio PR. 21940 41980 Fajardo Municipio PR. 21940 41980 Luquillo Municipio PR. 26100 24340 Ottawa County MI. 31140 21060 Meade County KY. 34100 28940 Grainger County TN. 35644 35614 Bergen County NJ. 35644 35614 Hudson County NJ. 20764 35614 Middlesex County NJ. 20764 35614 Monmouth County NJ. 20764 35614 Ocean County NJ. 35644 35614 Passaic County NJ. 20764 35084 Somerset County NJ. 35644 35614 Bronx County NY. 35644 35614 Kings County NY. 35644 35614 New York County NY. 35644 20524 Putnam County NY. 35644 35614 Queens County NY. 35644 35614 Richmond County NY. 35644 35614 Rockland County NY. 35644 35614 Westchester County NY. 37380 19660 Flagler County FL. 37700 25060 Jackson County MS. 37964 33874 Bucks County PA. 37964 33874 Chester County PA. 37964 33874 Montgomery County PA. 39100 20524 Dutchess County NY. 39100 35614 Orange County NY. 41884 42034 Marin County CA. 41980 11640 Arecibo Municipio PR. 41980 11640 Camuy Municipio PR. 41980 11640 Hatillo Municipio PR. 41980 11640 Quebradillas Municipio PR. 48900 34820 Brunswick County NC. 49500 38660 Gunica Municipio PR. 49500 38660 Guayanilla Municipio PR. 49500 38660 Penuelas Municipio PR. 49500 38660 Yauco Municipio PR.
If providers located in these counties move from one CBSA to another under the new OMB delineations, there may be impacts, both negative and positive, upon their specific wage index values. As discussed below, we propose to implement a transition wage index to adjust for these possible impacts.
e. Transition Period
Overall, we believe implementing the new OMB delineations would result in wage index values being more representative of the actual costs of labor in a given area. Further, we recognize that some providers (15 percent) would have a higher wage index due to our proposed implementation of the new labor market area delineations. However, we also recognize that more providers (22 percent) would experience decreases in wage index values as a result of our proposed implementation of the new labor market area delineations. Therefore, we believe it would be appropriate to consider, as we did in FY 2006, whether or not a transition period should be used in order to implement these proposed changes to the wage index.
We considered having no transition period and fully implementing the proposed new OMB delineations beginning in FY 2015. This would mean that we would adopt the revised OMB delineations for all providers on
First, we considered transitioning the wage index to the revised OMB delineations over a number of years in order minimize the impact of the proposed wage index changes in a given year. However, we also believe this must be balanced against the need to ensure the most accurate payments possible, which argues for a faster transition to the revised OMB delineations. As discussed above in section V.A.2 of this proposed rule, we believe that using the most current OMB delineations would increase the integrity of the SNF PPS wage index by creating a more accurate representation of geographic variation in wage levels. As such, we believe that utilizing a one-year (rather than a multiple year) transition with a blended wage index in FY 2015 would strike the best balance.
Second, we considered what type of blend would be appropriate for purposes of the transition wage index. We are proposing that providers would receive a one-year blended wage index using 50 percent of their FY 2015 wage index based on the proposed new OMB delineations and 50 percent of their FY 2015 wage index based on the OMB delineations used in FY 2014. We believe that a 50/50 blend would best mitigate the negative payment impacts associated with the implementation of the proposed new OMB delineations. While we considered alternatives to the 50/50 blend, we believe this type of split balances the increases and decreases in wage index values associated with this proposal, as well as provides a readily understandable calculation for providers.
Next, we considered whether or not the blended wage index should be used for all providers or for only a subset of providers, such as those providers that would experience a decrease in their respective wage index values due to implementation of the revised OMB delineations. If we were to apply the transition policy only to those providers that would experience a decrease in their respective wage index values due to the implementation of the revised OMB delineations, then providers that would experience either no change in wage index or an increase in wage index due to the revised OMB delineations would be immediately transitioned to the FY 2015 wage index under the revised OMB delineations. As required in Section 1888(e)(4)(G)(ii) of the Act, the wage index adjustment must be implemented in a budget-neutral manner. As such, if we were to apply the transition policy only to those providers that would experience a decrease in their respective wage index values due to implementation of the revised OMB delineations, the budget neutrality factor, discussed in section III.D, calculated based on this this approach would be 0.9986, which would result in reduced base rates for all providers as compared to the budget neutrality factor of 1.0001 which would result from applying the blended wage index to all providers. Furthermore, based on our analysis of the wage index changes associated with fully implementing the revised OMB delineations, we determined that the new OMB delineations would only affect the wage index values of approximately 37 percent of facilities. Given that our goal is to provide relief to the largest percentage of adversely-affected SNFs with the least impact to the rest of the facilities (whose wage index values either would remain the same or would increase), we believe that using a blended wage index for all providers would be the best option. This option would assist the 22 percent of providers that would be adversely affected by the proposed implementation of the new OMB delineations without reducing the base rates for all providers, 63 percent of which would otherwise be unaffected by the proposed implementation of the new OMB delineations. In other words, this option is based on a balance between the interests of all SNF providers, including the 15 percent of providers that would experience an increase in their wage index value due to the proposed implementation of the new OMB delineations, the 22 percent of providers that would experience a decrease in their wage index value due to the proposed implementation of the new OMB delineations, and the 63 percent of providers that would be unaffected by the proposed implementation of the new OMB delineations. As discussed above, if we were to apply the blended wage index only to the 22 percent of providers that would experience a decrease in their respective wage index values due to the proposed implementation of the new OMB delineations in an effort to preserve the full increase in wage index value for the 15 percent of providers that would experience such an increase due to the proposed implementation of the new OMB delineations, the budget neutrality factor of 1.0001 referenced in section III.D, which is based on applying the blended wage index to all providers, would be revised to 0.9986. As such, this would mean a reduction in the base rate for all providers, most notably the 63 percent of providers that would be unaffected by the proposed implementation of the new OMB delineations, but also for that 15 percent of providers that would experience an increase in their wage index value.
Moreover, while providers experience wage index changes from year to year based on updating the wage data, full implementation of the proposed new OMB delineations would dramatically increase the magnitude of those changes for some providers. Year-to-year wage index changes usually vary from decreases as high as 10 percent to increases as high as 10 percent. Using FY 2011 wage data (the data used for the FY 2015 wage index), the range of changes in the wage index values due solely to full implementation of the proposed OMB delineations would span from decreases of over 20 percent to increases of over 30 percent. Therefore, in addition to mitigating the impact of the proposed OMB delineations on the facilities that are adversely affected by them and providing a period to adjust, we believe a transition wage index could also mitigate the volatility of the SNF PPS wage index caused by these proposed changes.
Therefore, for the reasons discussed above, if we finalize implementation of the new OMB delineations, we are proposing to apply a one-year transition with a 50/50 blended wage index for all providers in FY 2015. We propose to calculate the FY 2015 wage indexes using both the current FY 2014 and proposed new labor market delineations. Specifically, providers would receive 50 percent of their FY 2015 wage index based on the new OMB delineations, and 50 percent of their FY 2015 wage index based on the labor market area delineations for FY 2014 (both using FY 2011 hospital wage data). This ultimately results in an average of the two values. As we stated in the FY 2006 SNF PPS final rule (70 FR 45041), we believe that our proposed transition approach would best achieve our objective of providing relief to the largest percentage of adversely-affected SNFs with the least impact to the rest of the facilities, because it reduces the impact of the transition on the base rates for all providers. For the reasons discussed above, and based on provider reaction during the FY 2006 rulemaking cycle to the proposed adoption of the new CBSA definitions, we are proposing to provide a one-year blended wage index for all SNFs to assist providers in adapting to these proposed changes. We refer to this blended wage index as the FY 2015 SNF PPS transition wage index. This transition policy would be for a one-year period, going into effect
The proposed wage index applicable to FY 2015 is set forth in Table A available on the CMS Web site at http://cms.gov/Medicare/Medicare-Fee-for-Service-Payment/SNFPPS/WageIndex.html. Table A provides a crosswalk between the FY 2015 wage index for a provider using the current OMB delineations in effect in FY 2014 and the FY 2015 wage index using the proposed revised OMB delineations, as well as the proposed transition wage index values that would be in effect in FY 2015 if these proposed changes are finalized.
3. Labor-Related Share
Each year, we calculate a revised labor-related share based on the relative importance of labor-related cost categories in the SNF market basket as discussed in Section III.D of this proposed rule. Table 12 summarizes the proposed updated labor-related share for FY 2015, compared to the labor-related share that was used for the FY 2014 SNF PPS final rule. GOES
Table 12--Labor-Related Relative Importance, FY 2014 and FY 2015 Relative importance, Relative importance, labor-related, FY 2014 labor-related, FY 2015 13:2 forecast *1 14:1 forecast *2 Wages and salaries 49.118 49.116 Employee benefits 11.423 11.373 Nonmedical Professional 3.446 3.460 fees: labor-related Administrative and 0.499 0.503 facilities support services All Other: Labor-related 2.287 2.285 services Capital-related (.391) 2.772 2.776 Total 69.545 69.513 *1 Published in theFederal Register ; based on second quarter 2013 IGI forecast. *2 Based on first quarter 2014 IGI forecast, with historical data through fourth quarter 2013.
B.
As discussed in the FY 2014 SNF PPS proposed rule (78 FR 26466,
In this proposed rule, we are taking the opportunity to update the public on the current state of this project. In
During the second phase of the project, which began in
As before, comments may be included as part of comments on this proposed rule. We are also soliciting comments outside the rulemaking process and these comments should be sent via email to [email protected]. Information regarding this project can be found on the project Web site at http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/SNFPPS/therapyresearch.html.
C. Proposed Revisions to Policies Related to the Change of Therapy (COT) Other Medicare Required Assessment (OMRA)
On
To address this situation, effective for services provided on or after
As discussed above, the resident must be classified into a RUG-IV therapy category or into a nursing RUG because of index maximization (while receiving a level of therapy sufficient for classification into a RUG-IV therapy category) in order for the COT OMRA requirements to apply. However, since implementation of this assessment, we have learned that, in rare cases where a resident has been classified into a RUG-IV therapy category, therapy services provided to the resident during a COT observation period may not be sufficient to continue to qualify the resident for any therapy RUG, resulting in classification of the resident into a non-therapy RUG. During a subsequent week when the therapy services are sufficient to again qualify the resident for a therapy RUG, providers have indicated that they cannot complete a subsequent COT OMRA to reclassify the resident into a therapy RUG because the resident is no longer in a therapy RUG or in a nursing RUG because of index maximization as discussed above (pursuant to the conditions set forth in the FY 2012 SNF PPS final rule and in Section 2.9 of the MDS 3.0 RAI manual). As a result, providers are unable to use the COT OMRA to capture the increased therapy services provided to the resident to ensure accurate payment for the services provided, which is the express purpose of the COT OMRA.
Accordingly, we propose to revise the existing COT OMRA policy to permit providers to complete a COT OMRA for a resident who is not currently classified into a RUG-IV therapy group, or receiving a level of therapy sufficient for classification into a RUG-IV therapy group as discussed above, but only in those rare cases where the resident had qualified for a RUG-IV therapy group on a prior assessment during the resident's current Medicare Part A stay and had no discontinuation of therapy services between Day 1 of the COT observation period for the COT OMRA that classified the resident into his/her current non-therapy RUG-IV group and the ARD of the COT OMRA that reclassified the patient into a RUG-IV therapy group. Under the proposed policy, while a COT OMRA may be used to reclassify a resident into a therapy RUG in the circumstances described above, it may not be used to initially classify a resident into a therapy RUG. We believe it is appropriate to revise the COT OMRA policy in this manner to provide for more accurate payment for services provided to those residents who have qualified for a RUG-IV therapy group during their Medicare Part A stay and continue to receive skilled therapy services during their Medicare Part A stay (even though they may have been classified into a non-therapy RUG as discussed above).
Consider, for example, if Mr. A. was classified into the RUG group RUA on his 30-day assessment with an ARD set for Day 30 of his stay. On Day 37, the facility checks how much therapy was provided to Mr. A. and finds that while Mr. A. did receive the requisite number of therapy minutes to qualify for this RUG category, he only received therapy on 4 distinct calendar days, which would make it impossible for him to qualify for an Ultra-High Rehabilitation RUG group. Moreover, due to the lack of 5 distinct calendar days of therapy and the lack of any restorative nursing services, Mr. A. does not qualify for any therapy RUG group. As a result, the facility must complete a COT OMRA for Mr. A., on which he may only classify to a non-therapy RUG group. Let us further assume that the facility continues to provide Mr. A. with skilled therapy and that, when looking back on Mr. A.'s services from Day 44 (7 days after the ARD of the COT OMRA), Mr. A. again qualifies for classification in the RUG group RUA.
Under the existing COT OMRA policy, it would not be possible for this provider to reclassify Mr. A. back into RUA from the non-therapy group by using a COT OMRA. Instead, Mr. A. could only be classified into a therapy RUG either by discontinuing his therapy using an End of Therapy (EOT) OMRA and beginning a new therapy program and completing a Start of Therapy (SOT) OMRA, or by waiting until the next scheduled assessment. Under our proposed revised policy, this provider would be permitted to complete a COT OMRA with an ARD of Day 44 in order to reclassify Mr. A. back into the RUA group. The facility would then continue to review the therapy services provided to Mr. A. in order to ensure that these services continue to reflect Mr. A.'s current RUG-IV therapy classification.
<p> To further clarify the scope of this proposal, consider a slightly different example in which Mr. A. is classified into the RUG group RUA on his 30-day assessment with an ARD set for Day 30 of his stay. On Day 37, the facility checks the amount of therapy that was provided to Mr. A. and finds that while Mr. A. did receive the requisite number of therapy minutes to qualify for this RUG category, he only received therapy on 4 distinct calendar days, which would make it impossible for him to qualify for an Ultra-High Rehabilitation RUG group. Moreover, due to the lack of 5 distinct calendar days of therapy and the lack of any restorative nursing services, Mr. A. does not qualify for any therapy RUG group. As a result, the facility must complete a COT OMRA for Mr. A., on which he may only classify for a non-therapy RUG group. However, as opposed to the previous situation where the resident's therapy continued during the week following the COT OMRA, let us assume that the facility decides to discontinue his therapy services by completing an End of Therapy OMRA with an ARD set for Day 39, resulting in a non-therapy RUG classification for Mr. A. The facility subsequently decides to restart Mr. A.'s therapy services, beginning on Day 41 of his stay. The facility looks back from Day 47 (7 days following the day therapy began on Day 41, including Day 41) to review the therapy services provided to Mr. A. during the prior week and finds that Mr. A. would qualify for the RUG group RVA.
As in the prior example, under the existing COT OMRA policy, it would not be possible for this provider to classify Mr. A. into RVA from the non-therapy group by using a COT OMRA. However, as opposed to the prior example, under the revised COT OMRA policy proposed in this proposed rule, the facility would still not be permitted to complete the COT OMRA in this instance, as a discontinuation of therapy services had occurred between Day 1 of the COT observation period for the COT OMRA that classified the resident into his/her current non-therapy RUG-IV group and the ARD of the COT OMRA that would have been used to reclassify the patient into a RUG-IV therapy group if it had been permitted. Based on this example, in order to reclassify the resident into a RUG-IV therapy group, the provider would need to either complete a Start of Therapy OMRA or wait until the next regularly scheduled assessment.
We believe this proposal would address the concern of those providers who have experienced the rare occurrence of a COT OMRA classifying a resident into a non-therapy RUG group from a therapy RUG group, where the patient continues to receive therapy and later qualifies again for a therapy RUG. We believe this proposed revision to the COT OMRA policy would ensure the most accurate payment for therapy services furnished to such residents by allowing providers to capture variations in therapy services on a weekly basis. As with other similar policy changes, if this revision is finalized, then we intend to monitor the impact of this revision to ensure that is has the intended effect. We invite comments on this proposed change to the existing COT OMRA policy.
D. Civil Money Penalties (Section 6111 of the Affordable Care Act)
Sections 6111 of the Patient Protection and Affordable Care Act (Affordable Care Act), amended sections 1819(h) and 1919(h) of the Act to incorporate specific provisions pertaining to the imposition and collection of civil money penalties (CMPs). Sections 1819(h)(2)(B)(ii)(IV)(ff) and 1919(h)(3)(C)(ii)(IV)(ff) of the Act specifies that some portion of such amounts collected may be used to support activities that benefit residents, including assistance to support and protect residents of a facility that closes (voluntarily or involuntarily) or is decertified (including offsetting costs of relocating residents to home and community-based settings or another facility), projects that support resident and family councils and other consumer involvement in assuring quality care in facilities, and facility improvement initiatives approved by the Secretary (including joint training of facility staff and surveyors, technical assistance for facilities implementing quality assurance programs, the appointment of temporary management firms, and other activities approved by the Secretary). These changes were implemented in a final rule published on
This proposed rule would clarify statutory requirements as specified in section 6111 of the Affordable Care Act regarding the approval and use of CMPs imposed by CMS. It is important to note that these clarifications not only apply to the Federal share of collected CMP funds granted for approved projects that benefit residents under
A key function of the CMP remedy is to prompt quick compliance with the federal health and safety requirements. These monies must be used to support projects or activities that will benefit nursing home residents. Entities applying for approval of projects utilizing CMP funds must demonstrate that the planned use will benefit nursing home residents and promote compliance with the regulations.
We propose changes to the CMS enforcement regulations at
We invite public comment on our proposed changes. This proposed rule would explicitly clarify the intended use and statutory requirements of collected CMP funds. Specifically, we propose to: (1) Specify that CMP funds may not be used for state management operations except for the reasonable costs that are consistent with managing projects utilizing CMP funds; (the rationale for this clarification is explained further in section VI.); (2) clarify CMS's expectations that States must obtain prior approval for use of these CMP funds; (3) outline specific requirements that must be included in proposals submitted for CMS approval; (4) specify that CMPs funds may not be used for projects that have been disapproved by CMS; (5) specify that states are responsible for having an acceptable plan to solicit, accept, monitor and track projects utilizing CMP funds and make the results of all approved projects publicly available on at least an annual basis; (6) specify that state plans must ensure that a core amount of civil money penalty funds will be held in reserve for emergencies, such as relocation of residents in the event of involuntary termination from
E. Observations on Therapy Utilization Trends
In the FY 2014 SNF PPS final rule (78 FR 47959 through 47960), we discussed our monitoring efforts associated with the impact of certain policy changes finalized in the FY 2012 SNF PPS final rule (76 FR 48486). We noted that we would continue these monitoring efforts and report any new information as appropriate. We are not proposing new
In the FY 2014 SNF PPS proposed rule (78 FR 26464), we presented data which compared various utilization metrics including, in particular, the case-mix distribution for the RUG-IV therapy categories (Ultra-High Rehabilitation or RU, Very-High Rehabilitation or RV, High Rehabilitation or RH, Medium Rehabilitation or RM, and Low Rehabilitation or RL), for FY 2011 and FY 2012. It was observed based on those data that the percentage of billed days of service being classified into the RU RUG groups had increased from 44.8 percent in FY 2011 to 48.6 percent in FY 2012, while utilization in all other therapy RUG categories either remained stable or declined. We have since updated this data set using data from FY 2013 and have posted a memo to the SNF PPS Web site (available at http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/SNFPPS/Spotlight.html) which demonstrates that the percentage of billed service days in the RU RUG groups has increased to over 50 percent. These revised data in the aforementioned memo are presented in a slightly different format than they have been presented in the past, which is to show how, over the course of the past 3 years since October of 2010, the percentage of residents classified into one of these Ultra-High Rehabilitation groups has not only increased, but done so rather steadily.
The second identified trend that we would highlight here and is discussed in the memo referenced above is that, most notably in the cases of RU and RV RUG groups, the amount of therapy reported on the MDS is just enough to surpass the relevant therapy minute threshold for a given therapy RUG category. For example, as demonstrated in Figure 2 in the aforementioned memo, the percentage of claims-matched MDS assessments in the range of 720 minutes to 739 minutes, which is just enough to surpass the therapy minute threshold for RU RUG groups of 720 minutes, has increased from 21 percent in FY 2011 to 33 percent in FY 2013. As stated above, this trend also holds for residents classified into a RV RUG group, where the largest percentage of service days were provided in the 500 to 520 minutes range, which just surpasses the therapy minute threshold for the RV RUG groups of 500 minutes.
We invite comment on the data presented here and the discussion of observed trends.
F. Accelerating Health Information Exchange in SNFs
As we have stated in the past, we believe all patients, and others involved in the patient's care, and their healthcare providers should have consistent and timely access to their health information in a standardized format that can be securely exchanged between the patient, providers, and others involved in the patient's care. (HHS
We believe that HIE and the use of certified EHRs by SNFs and other types of providers that are ineligible for the
* http://healthit.gov/policy-researchers-implementers/standards-and-certification-regulations.
* http://wiki.siframework.org/LCC+LTPAC+Care+Transition+SWG.
* http://wiki.siframework.org/Longitudinal+Coordination+of+Care.
VI. Provisions of the Proposed Rule
As discussed in section III. of this proposed rule, this proposed rule would update the payment rates under the SNF PPS for FY 2015 as required by section 1888(e)(4)(E)(ii) of the Act. In addition, we propose to use the most current OMB delineations (discussed in section V.A) to identify a facility's urban or rural status for the purpose of determining which set of rate tables would apply to the facility (section III.B.). Furthermore, as discussed in section V. of this proposed rule, we propose changes to the wage index based on the most current OMB delineations, including a one-year transition with a blended wage index for FY 2015 (section V.A.); propose to revise the policy governing use of the COT OMRA (section V.C.); and finally, propose changes to the enforcement regulations related to civil money penalties utilized by states (section V.D.).
With reference to the civil money penalty provisions discussed in section V.D. of this proposed rule, we propose to modify current CMS regulations to provide further clarification to states and the public regarding prior approval and appropriate use of these federal-imposed civil money penalty funds.
At SEC 488.433, civil money penalties: Uses and approval of civil money penalties imposed by CMS, we propose to amend this regulation to specify that civil money penalties may not be used for state management operations except for the costs that are consistent with managing the civil money penalty funds, specify that all activities utilizing civil money penalty funds must be approved in advance by CMS, outline specific requirements that must be included in proposals submitted for CMS approval, specify that states are responsible for monitoring and tracking the results of all approved activities utilizing civil money penalties and making this information publicly available, specify that state plans must ensure that a core amount of civil money penalty funds will be held in reserve for emergencies, such as relocation of residents in the event of involuntary termination from
The proposed CMS regulation would explicitly clarify the intended use of these civil money penalty funds including the processes for prior approval of all activities using civil money penalty funds by CMS and how CMS will address a state's use of civil money penalty funds for activities that have been disapproved by CMS or used by states for activities other than those explicitly specified in statute or regulations.
At proposed
At proposed
At new
At new
At new
In SEC 488.433(f), we propose that CMS may withhold future disbursement of collected civil money penalty funds to a state if CMS finds that the state has not spent such funds in accordance with the statute and regulations, fails to make use of funds to benefit the quality of care or life of residents, or fails to maintain an acceptable plan approved by CMS.
VII. Collection of Information Requirements
Under the Paperwork Reduction Act of 1995 (PRA), we are required to publish a 60-day notice in the
* The need for the information collection and its usefulness in carrying out the proper functions of our agency.
* The accuracy of our estimate of the information collection burden.
* The quality, utility, and clarity of the information to be collected.
* Recommendations to minimize the information collection burden on the affected public, including automated collection techniques.
A. Information Collection Requirements (ICRs)
While this proposed rule does not have any PRA implications, we are soliciting comment on the following:
1. ICRs Regarding the SNF PPS Rate Setting Methodology (preamble sections III and V)
While sections III and V propose to revise certain policies related to the current rate setting methodology (such as the use of updated OMB delineations to assign a facility the urban or rural per diem rate and to calculate wage index adjustments), the provisions would not impose any new or revised reporting, recordkeeping, or third-party disclosure requirements. Nor would they require the development, acquisition, installation, and utilization of any new or revised technology or information systems. Consequently, they do not require review under the authority of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.).
The information collection requirements discussed in section III.C. concerning the resident assessment instrument (MDS 3.0) are currently approved by OMB under OCN 0938-1140 (CMS-10387).
2. ICRs Regarding the COT OMRA (Preamble Section V.C.)
While section V.C. proposes to revise current COT OMRA policy by permitting providers to complete a COT OMRA for a resident who is not currently classified into a RUG-IV therapy group in certain circumstances, this provision does not impose any new or revised reporting, recordkeeping, or third-party disclosure requirements. Consequently, it does not require review under the authority of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.).
3. ICRs Regarding the Use of Civil Money Penalties (
In SEC 488.433(c), states proposing to use civil money penalties for certain activities are required to submit descriptions of the intended outcomes, deliverables, sustainability, and methods by which the results will be assessed, including specific measures. Prior to using these funds, the activities must be approved by CMS under existing regulations. The proposed language in this rule provides methods to ensure that these requirements are followed and to promote additional transparency.
The provision does not require additional OMB review under the authority of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seq.). In addition, as stated in the Civil Money Penalties for
4. ICRs Regarding Civil Money Penalty Plans (
In SEC 488.433(e), states would be required to maintain an acceptable plan (approved by CMS) for the effective use of civil money funds. The plan must include a description of methods by which the state will: (1) Solicit, accept, monitor, and track projects utilizing civil money penalty funds; (2) make information about the use of civil money penalty funds publicly available, including key information about approved projects, the grantee or contract recipients, and the results of projects; (3) ensure that a core amount of civil money penalty funds will be held in reserve for emergencies, such as unplanned relocation of residents pursuant to an involuntary termination from
Since current statute, regulations and/or CMS policy guidance released to the states already specifies that all proposed activities using civil money penalty funds must be submitted to CMS for approval and must contain information on the expected final outcomes of the activity and how the results of the activity will be assessed, states must already have plans in place to monitor and track the outcomes of all approved activities using these funds. Consequently, the proposed provision would not require any substantive revision to any state plans and would not impose any additional burden to states.
Since the provisions in
B. Submission of PRA-Related Comments
If you comment on any of these information collection requirements, please submit your comments electronically as specified in the ADDRESSES section of this proposed rule.
Comments must be received on/by
VIII. Response to Comments
Because of the large number of public comments we normally receive on
IX. Economic Analyses
A. Regulatory Impact Analysis
1. Introduction
We have examined the impacts of this proposed rule as required by Executive Order 12866 on Regulatory Planning and Review (
Executive Orders 12866 and 13563 direct 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). Executive Order 13563 emphasizes the importance of quantifying both costs and benefits, of reducing costs, of harmonizing rules, and of promoting flexibility. This rule has been designated an economically significant rule, under section 3(f)(1) of Executive Order 12866. Accordingly, we have prepared a regulatory impact analysis (RIA) as further discussed below. Also, the rule has been reviewed by OMB.
2. Statement of Need
This proposed rule would update the SNF prospective payment rates for FY 2015 as required under section 1888(e)(4)(E) of the Act. It also responds to section 1888(e)(
3. Overall Impacts
This proposed rule sets forth proposed updates of the SNF PPS rates contained in the SNF PPS final rule for FY 2014 (78 FR 47936). Based on the above, we estimate that the aggregate impact would be an increase of
Certain events may occur to limit the scope or accuracy of our impact analysis, as this analysis is future-oriented and, thus, very susceptible to forecasting errors due to certain events that may occur within the assessed impact time period. Some examples of possible events may include newly-legislated general
In accordance with sections 1888(e)(4)(E) and 1888(e)(5) of the Act, we update the FY 2014 payment rates by a factor equal to the market basket index percentage change adjusted by the FY 2013 forecast error adjustment (if applicable) and the MFP adjustment to determine the payment rates for FY 2015. As discussed previously, for FY 2012 and each subsequent FY, as required by section 1888(e)(5)(B) of the Act as amended by section 3401(b) of the Affordable Care Act, the market basket percentage is reduced by the MFP adjustment. The special AIDS add-on established by section 511 of the MMA remains in effect until ". . . such date as the Secretary certifies that there is an appropriate adjustment in the case mix . . . ." We have not provided a separate impact analysis for the MMA provision. Our latest estimates indicate that there are fewer than 4,355 beneficiaries who qualify for the add-on payment for residents with AIDS. The impact to
The annual update set forth in this proposed rule applies to SNF PPS payments in FY 2015. Accordingly, the analysis that follows only describes the impact of this single year. In accordance with the requirements of the Act, we will publish a notice or rule for each subsequent FY that will provide for an update to the SNF PPS payment rates and include an associated impact analysis.
As discussed in Section V.D. of this proposed rule, we would also clarify statutory requirements and intent as specified in section 6111 of the Affordable Care Act regarding the approval and use of civil money penalties imposed by CMS. There would be no impact to States unless they failed to follow the new regulations regarding the approval and use of civil money penalty funds. In FY 2011, the approximate total amount of civil money penalties returned to the states was
4. Detailed Economic Analysis
The FY 2015 impacts appear in Table 13. Using the most recently available data, in this case FY 2013, we apply the current FY 2014 wage index and labor-related share value to the number of payment days to simulate FY 2014 payments. Then, using the same FY 2013 data, we apply the FY 2015 wage index, as proposed in Section V.A above, and labor-related share value to simulate FY 2015 payments. We tabulate the resulting payments according to the classifications in Table 13 (for example, facility type, geographic region, facility ownership), and compare the difference between current and proposed payments to determine the overall impact. The breakdown of the various categories of data in the table follows.
The first column shows the breakdown of all SNFs by urban or rural status, hospital-based or freestanding status, census region, and ownership.
The first row of figures describes the estimated effects of the various changes on all facilities. The next six rows show the effects on facilities split by hospital-based, freestanding, urban, and rural categories. The urban and rural designations are based on the location of the facility under the new OMB delineations that we are proposing to implement beginning in FY 2015. Facilities should use these proposed OMB delineations to identify their urban or rural status for purposes of identifying what areas of the impact table would apply to them beginning on
The second column shows the number of facilities in the impact database.
The third column shows the effect of the annual update to the wage index. This represents the effect of using the most recent wage data available, without taking into account the proposed revised OMB delineations. That is, the impact represented in this column is solely that of updating from the FY 2014 wage index to the FY 2015 wage index without any changes to the OMB delineations. The total impact of this change is zero percent; however, there are distributional effects of the change.
The fourth column shows the effect of adopting the updated OMB delineations (as set forth in OMB Bulletin No. 13-01) for wage index purposes for FY 2015, independent of the effect of using the most recent wage data available, captured in Column 3. That is, the impact represented in this column is that of the proposed use of the revised OMB delineations, utilizing the proposed blended wage index. The total impact of this change is zero percent; however, there are distributional effects of the change.
The fifth column shows the effect of all of the changes on the FY 2015 payments. The update of 2.0 percent (consisting of the market basket increase of 2.4 percentage points, reduced by the 0.4 percentage point MFP adjustment) is constant for all providers and, though not shown individually, is included in the total column. It is projected that aggregate payments will increase by 2.0 percent, assuming facilities do not change their care delivery and billing practices in response.
As illustrated in Table 13, the combined effects of all of the changes vary by specific types of providers and by location. For example, due to changes proposed in this rule, providers in the rural Pacific region would experience a 4.5 percent increase in FY 2015 total payments. GOES
Table 13--RUG-IV Projected Impact to the SNF PPS for FY 2015 Number of Update wage Update OMB Total change facilities data delineations (%) FY 2015 (%) (%) Group: Total 15,397 0.0 0.0 2.0 Urban 10,860 0.0 0.0 2.0 Rural 4,537 0.1 -0.2 1.9 Hospital based 572 0.1 0.0 2.0 urban Freestanding 10,288 0.0 0.0 2.0 urban Hospital based 640 0.1 -0.3 1.7 rural Freestanding 3,897 0.1 -0.2 1.9 rural Urban by region: New England 803 0.9 0.0 2.9 Middle 1,490 0.3 0.1 2.5 Atlantic South Atlantic 1,853 -0.3 0.0 1.7 East North 2,054 -0.3 0.0 1.6 Central East South 544 -1.0 0.0 1.0 Central West North 889 0.0 0.0 2.0 Central West South 1,293 -0.4 0.0 1.6 Central Mountain 501 0.1 -0.1 2.0 Pacific 1,427 0.3 0.0 2.3 Outlying 6 0.6 -0.2 2.4 Rural by region: New England 144 0.7 0.1 2.8 Middle 228 1.5 -1.6 1.8 Atlantic South Atlantic 504 -0.4 -0.2 1.4 East North 925 -0.1 0.0 1.9 Central East South 533 -0.3 -0.2 1.4 Central West North 1,093 0.3 -0.2 2.2 Central West South 770 0.3 -0.4 1.9 Central Mountain 235 -0.7 0.0 1.3 Pacific 105 2.6 -0.1 4.5 Outlying 0 0.0 0.0 2.0 Ownership: Government 852 0.1 0.1 2.2 Profit 10,783 0.0 0.0 2.0 Non-profit 3,762 0.1 0.0 2.0 Note: The Total column includes the 2.4 percent market basket increase, reduced by the 0.4 percentage point MFP adjustment. Additionally, we found no SNFs in rural outlying areas.
5. Alternatives Considered
As described above, we estimate that the aggregate impact for FY 2015 would be an increase of
Section 1888(e) of the Act establishes the SNF PPS for the payment of Medicare SNF services for cost reporting periods beginning on or after
With regard to the proposal discussed in section V.A of this rule related to our proposed adoption of the revised OMB delineations for purposes of calculating the wage index, we believe implementing the new OMB delineations would result in wage index values being more representative of the actual costs of labor in a given area. Further, we recognize that some providers (15 percent) would have a higher wage index due to our proposed implementation of the new labor market delineations. However, we also recognize that more providers (22 percent) would experience decreases in wage index values as a result of our proposed implementation of the new labor market area delineations. Therefore, we believe it would be appropriate to consider, as we did in FY 2006, whether or not a transition period should be used in order to implement these proposed changes to the wage index.
We considered having no transition period and fully implementing the proposed new OMB delineations beginning in FY 2015. This would mean that we would adopt the revised OMB delineations for all providers on
First, we considered transitioning the wage index to the revised OMB delineations over a number of years in order minimize the impact of the proposed wage index changes in a given year. However, we also believe this must be balanced against the need to ensure the most accurate payments possible, which argues for a faster transition to the revised OMB delineations. As discussed above in section V.A.2 of this proposed rule, we believe that using the most current OMB delineations would increase the integrity of the SNF PPS wage index by creating a more accurate representation of geographic variation in wage levels. As such, we believe that utilizing a one-year (rather than a multiple year) transition with a blended wage index in FY 2015 would strike the best balance.
Second, we considered what type of blend would be appropriate for purposes of the transition wage index. We are proposing that providers would receive a one-year blended wage index using 50 percent of their FY 2015 wage index based on the proposed new OMB delineations and 50 percent of their FY 2015 wage index based on the FY 2014 OMB delineations. We believe that a 50/50 blend would best mitigate the negative payment impacts associated with the implementation of the proposed new OMB delineations. While we considered alternatives to the 50/50 blend, we believe this type of split balances the increases and decreases in wage index values associated with this proposal, as well as provides a readily understandable calculation for providers.
Next, we considered whether or not the blended wage index should be used for all providers or for only a subset of providers, such as those providers that would experience a decrease in their respective wage index values due to implementation of the revised OMB delineations. If we were to apply the transition policy only to those providers that would experience a decrease in their respective wage index values due to the implementation of the revised OMB delineations, then providers that would experience either no change in wage index or an increase in wage due to the revised OMB delineations would be immediately transitioned to the FY 2015 wage index under the revised OMB delineations. As required in section 1888(e)(4)(G)(ii) of the Act, the wage index adjustment must be implemented in a budget-neutral manner. As such, if we were to apply the transition policy only to those providers that would experience a decrease in their respective wage index values due to implementation of the revised OMB delineations, the budget neutrality factor, discussed in section III.D, calculated based on this this approach would be 0.9986, which would result in reduced base rates for all providers as compared to the budget neutrality factor of 1.0001 which would result from applying the blended wage index to all providers. Furthermore, based on our analysis of the wage index changes associated with fully implementing the revised OMB delineations, we determined that the new OMB delineations would only affect the wage index values of approximately 37 percent of facilities. Given that our goal is to provide relief to the largest percentage of adversely-affected SNFs with the least impact to the rest of the facilities (whose wage index values either would remain the same or increase), we believe that using a blended wage index for all providers would be the best option. This option would assist the 22 percent of providers that would be adversely affected by the proposed implementation of the new OMB delineations without reducing the base rates for all providers, 63 percent of which would otherwise be unaffected by the proposed implementation of the new OMB delineations. In other words, this option is based on a balance between the interests of all SNF providers, including the 15 percent of providers that would experience an increase in their wage index value due to the proposed implementation of the new OMB delineations, the 22 percent of providers that would experience a decrease in their wage index value due to the proposed implementation of the new OMB delineations, and the 63 percent of providers that would be unaffected by the proposed implementation of the new OMB delineations. As discussed above, if we were to apply the blended wage index only to the 22 percent of providers that would experience a decrease in their respective wage index values due to the proposed implementation of the new OMB delineations in an effort to preserve the full increase in wage index value for the 15 percent of providers that would experience such an increase due to the proposed implementation of the new OMB delineations, the budget neutrality factor of 1.0001 referenced in section III.D, which is based on applying the blended wage index to all providers, would be revised to 0.9986. As such, this would mean a reduction in the base rate for all providers, most notably the 63 percent of providers that would be unaffected by the proposed implementation of the new OMB delineations, but also for that 15 percent of providers that would experience an increase in their wage index value.
Moreover, while providers experience wage index changes from year to year based on updating the wage data, full implementation of the proposed new OMB delineations would dramatically increase the magnitude of those changes for some providers. Year-to-year wage index changes usually vary from decreases as high as 10 percent to increases as high as 10 percent. Using FY 2011 wage data (the data used for the FY 2015 wage index), the range of changes in the wage index values due solely to full implementation of the proposed OMB delineations would span from decreases of over 20 percent to increases of over 30 percent. Therefore, in addition to mitigating the impact of the proposed OMB delineations on the facilities that are adversely affected by them and providing a period to adjust, we believe a transition wage index could also mitigate the volatility of the SNF PPS wage index for certain providers caused by these proposed changes.
Therefore, if we finalize implementation of the new OMB delineations for the SNF PPS wage index, we are proposing to use a one-year transition with a blended wage index for all providers in FY 2015, as outlined in Section V.A.2.e. For the reasons discussed above, we believe that this proposed transition approach appropriately balances the interests of all SNFs, and would best achieve our objective of providing relief to the largest percentage of adversely affected SNFs with the least impact to the rest of the facilities. We believe this approach would mitigate negative impacts on providers as well as the volatility of the SNF PPS wage index for certain providers resulting from implementation of the proposed new OMB delineations. We invite comments on the alternatives discussed in this analysis.
6. Accounting Statement
As required by OMB Circular A-4 (available online at www.whitehouse.gov/sites/default/files/omb/assets/regulatory_matters_pdf/a-4.pdf), in Table 14, we have prepared an accounting statement showing the classification of the expenditures associated with the provisions of this proposed rule. Table 14 provides our best estimate of the possible changes in
Table 14--Accounting Statement: Classification of Estimated Expenditures, From the 2014 SNF PPS Fiscal Year to the 2015 SNF PPS Fiscal Year Category Transfers Annualized Monetized Transfers$750 million *. From Whom To Whom? Federal Government to SNF Medicare Providers. * The net increase of$750 million in transfer payments is a result of the MFP-adjusted market basket increase of$750 million .
7. Conclusion
This proposed rule sets forth updates of the SNF PPS rates contained in the SNF PPS final rule for FY 2014 (78 FR 47936). Based on the above, we estimate the overall estimated payments for SNFs in FY 2015 are projected to increase by
B. Regulatory Flexibility Act Analysis
The RFA requires agencies to analyze options for regulatory relief of small entities, if a rule has a significant impact on a substantial number of small entities. For purposes of the RFA, small entities include small businesses, non profit organizations, and small governmental jurisdictions. Most SNFs and most other providers and suppliers are small entities, either by their non-profit status or by having revenues of
This proposed rule sets forth updates of the SNF PPS rates contained in the SNF PPS final rule for FY 2014 (78 FR 47936). Based on the above, we estimate that the aggregate impact would be an increase of
Guidance issued by the
In addition, section 1102(b) of the Act requires us to prepare a regulatory impact analysis if a rule may have a significant impact on the operations of a substantial number of small rural hospitals. This analysis must conform to the provisions of section 603 of the RFA. For purposes of section 1102(b) of the Act, we define a small rural hospital as a hospital that is located outside of a Metropolitan Statistical Area and has fewer than 100 beds. This proposed rule would affect small rural hospitals that (1) furnish SNF services under a swing-bed agreement or (2) have a hospital-based SNF. We anticipate that the impact on small rural hospitals would be similar to the impact on SNF providers overall. Moreover, as noted in previous SNF PPS final rules (most recently the one for FY 2014 (78 FR 47968)), the category of small rural hospitals would be included within the analysis of the impact of this proposed rule on small entities in general. As indicated in Table 13, the effect on facilities is projected to be an aggregate positive impact of 2.0 percent. As the overall impact on the industry as a whole is less than the 3 to 5 percent threshold discussed above, the Secretary has determined that this proposed rule would not have a significant impact on a substantial number of small rural hospitals.
C. Unfunded Mandates Reform Act Analysis
Section 202 of the Unfunded Mandates Reform Act of 1995 (UMRA) also requires that agencies assess anticipated costs and benefits before issuing any rule whose mandates require spending in any 1 year of
D. Federalism Analysis
Executive Order 13132 establishes certain requirements that an agency must meet when it promulgates a proposed rule (and subsequent final rule) that impose substantial direct requirement costs on state and local governments, preempts state law, or otherwise has federalism implications. This proposed rule would have no substantial direct effect on state and local governments, preempt state law, or otherwise have federalism implications.
List of Subjects in 42 CFR Part 488
Administrative practice and procedure, Health facilities,
For the reasons set forth in the preamble, the
PART 488--SURVEY, CERTIFICATION AND ENFORCEMENT PROCEDURES
1. The authority citation for part 488 continues to read as follows:
Authority: Secs. 1102, 1128I and 1871 of the Social Security Act, unless otherwise noted (42 U.S.C. 1302, 1320a-7j, and 1395hh); Pub. L. 110-149, 121
2. Section 488.433 is revised to read as follows:
(a) Ten percent of the collected civil money penalty funds that are required to be held in escrow pursuant to
(b) All activities and plans for utilizing civil money penalty funds, including any expense used to administer grants utilizing CMP funds, must be approved in advance by CMS and may include, but are not limited to:
(1) Support and protection of residents of a facility that closes (voluntarily or involuntarily).
(2) Time-limited expenses incurred in the process of relocating residents to home and community-based settings or another facility when a facility is closed (voluntarily or involuntarily) or downsized pursuant to an agreement with the State Medicaid agency.
(3) Projects that support resident and family councils and other consumer involvement in assuring quality care in facilities.
(4) Facility improvement initiatives, such as joint training of facility staff and surveyors or technical assistance for facilities implementing quality assurance and performance improvement programs.
(5) Development and maintenance of temporary management or receivership capability such as but not limited to, recruitment, training, retention or other system infrastructure expenses. However, as specified in
(c) At a minimum, proposed activities submitted to CMS for prior approval must include a description of the intended outcomes, deliverables, and sustainability; and a description of the methods by which the activity results will be assessed, including specific measures.
(d) Civil money penalty funds may not be used for activities that have been disapproved by CMS.
(e) The State must maintain an acceptable plan for the effective use of civil money funds, including a description of methods by which the State will:
(1) Solicit, accept, monitor, and track projects utilizing civil money penalty funds including any funds used for state administration.
(2) Make information about the use of civil money penalty funds publicly available, including about the dollar amount awarded for approved projects, the grantee or contract recipients, the results of projects, and other key information.
(3) Ensure that:
(i) A core amount of civil money penalty funds will be held in reserve for emergencies, such as relocation of residents pursuant to an involuntary termination from
(ii) A reasonable amount of funds, beyond those held in reserve under paragraph (i) of this section, will be awarded or contracted each year for the purposes specified in this section.
(f) If CMS finds that a State has not spent civil money penalty funds in accordance with this section, or fails to make use of funds to benefit the quality of care or life of residents, or fails to maintain an acceptable plan for the use of funds that is approved by CMS, then CMS may withhold future disbursements of civil money penalty funds to the State until the State has submitted an acceptable plan to comply with this section.
Dated:
Administrator,
Approved:
Secretary.
[FR Doc. 2014-10319 Filed 5-1-14;
BILLING CODE 4120-01-P
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