# Medicare Program; Prospective Payment System and Consolidated Billing for Skilled Nursing Facilities-Update > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/fr%3A00-19004 ## Record - **Collection:** Federal Register - **Document type:** Rule - **Published:** July 31, 2000 - **Citation:** 65 FR 46770 ## Text DEPARTMENT OF HEALTH AND HUMAN SERVICES Health Care Financing Administration 42 CFR Parts 411, 413, and 489 [HCFA-1112-F] RIN 0938-AJ93 Medicare Program; Prospective Payment System and Consolidated Billing for Skilled Nursing Facilities—Update AGENCY: Health Care Financing Administration (HCFA), HHS. ACTION: Final rule. SUMMARY: This final rule sets forth updates to the payment rates used under the prospective payment system (PPS) for skilled nursing facilities (SNFs), for fiscal year 2001. Annual updates to the PPS rates are required by section 1888(e) of the Social Security Act, as amended by the Medicare, Medicaid and State Child Health Insurance Program Balanced Budget Refinement Act of 1999, related to Medicare payments and consolidated billing for SNFs. In addition, this rule sets forth certain conforming revisions to the regulations that are necessary in order to implement amendments made to the Act by section 103 of the Medicare, Medicaid and State Child Health Insurance Program Balanced Budget Refinement Act of 1999. EFFECTIVE DATE: These regulations are effective on October 1, 2000. FOR FURTHER INFORMATION CONTACT: Dana Burley, (410) 786-4547 or Sheila Lambowitz, (410) 786-7605 (for information related to the case-mix classification methodology). John Davis, (410) 786-0008 (for information related to the Wage Index). Bill Ullman, (410) 786-5667 (for information related to consolidated billing). Steve Raitzyk, (410) 786-4599 (for information related to the facility-specific transition rates). Bill Ullman, (410) 786-5667 or Susan Burris (410) 786-6655 (for general information). SUPPLEMENTARY INFORMATION: Copies To order copies of the Federal Register containing this document, send your request to: New Orders, Superintendent of Documents, P.O. Box 371954, Pittsburgh, PA 15250-7954. Please specify the date of the issue requested and enclose a check or money order payable to the Superintendent of Documents, or enclose your Visa or Master Card number and expiration date. Credit card orders can also be placed by calling the order desk at (202) 512-1800 (or toll free at 1-888-293-6498) or by faxing to (202) 512-2250. The cost for each copy is $8. As an alternative, you can view and photocopy the Federal Register document at most libraries designated as Federal Depository Libraries and at many other public and academic libraries throughout the country that receive the Federal Register . To assist readers in referencing sections contained in this document, we are providing the following table of contents. Table of Contents I. Background A. Current System for Payment of Skilled Nursing Facility Services Under Part A of the Medicare Program B. Requirements of the Balanced Budget Act of 1997 for Updating the Prospective Payment System for Skilled Nursing Facilities C. The Medicare, Medicaid and State Child Health Insurance Program (SCHIP) Balanced Budget Refinement Act of 1999 D. Skilled Nursing Facility Prospective Payment—General Overview 1. Payment Provisions—Federal Rates 2. Payment Provisions—Transition Period 3. Payment Provisions—Facility-Specific Rate II. Provisions of the Proposed Rule III. Analysis of and Responses to Public Comments A. Case-Mix Refinements 1. Potential Case-Mix Refinements Described in the Proposed Rule 2. Clinical Issues 3. Medical Review and Fiscal Intermediary Issues 4. Section U of the Minimum Data Set B. Update of Payment Rates Under the Prospective Payment System for Skilled Nursing Facilities 1. Federal Prospective Payment System 2. Case-Mix Adjustment C. Wage Index Adjustment to Federal Rates D. Updates to the Federal Rates E. Relationship of RUG-III Classification System to Existing Skilled Nursing Facility Level-of-Care Criteria F. Three-Year Transition Period 1. Computation of the Skilled Nursing Facility Prospective Payment System Rate during the Transition G. The Skilled Nursing Facility Market Basket Index 1. Facility-Specific Rate Update Factor 2. Federal Rate Update Factor H. Consolidated Billing I. Appeal Rights J. Impact Analysis of the Proposed Rule IV. Provisions of the Final Regulation V. Collection of Information Requirements VI. Regulatory Impact Analysis A. Background B. Impact of this Final Rule VII. Federalism Regulations Text In addition, because of the many terms to which we refer by abbreviation in this rule, we are listing these abbreviations and their corresponding terms in alphabetical order below: ADL Activity of Daily Living BBA Balanced Budget Act of 1997, P.L. 105-33 BBRA Medicare, Medicaid and SCHIP Balanced Budget Refinement Act of 1999, P.L. 106-113, Appendix F BLS (U.S.) Bureau of Labor Statistics CPI Consumer Price Index HCFA Health Care Financing Administration HCPCS HCFA Common Procedure Coding System IFC Interim Final Rule with Comments MDS Minimum Data Set MSA Metropolitan Statistical Area PPI Producer Price Index PPS Prospective Payment System PRM Provider Reimbursement Manual RUG-III Resource Utilization Groups, version III SCHIP State Child Health Insurance Program SNF Skilled Nursing Facility I. Background On April 10, 2000, we published in the Federal Register (65 FR 19188), a proposed rule that set forth updates to the payment rates used under the prospective payment system (PPS) for skilled nursing facilities (SNFs), for fiscal year (FY) 2001. Furthermore, it specifically proposed changes to the SNF PPS case-mix methodology. Annual updates to the PPS rates are required by section 1888(e) of the Social Security Act (the Act), as amended by the Medicare, Medicaid and State Child Health Insurance Program Balanced Budget Refinement Act of 1999, related to Medicare payments and consolidated billing for SNFs. In addition, the rule proposed certain conforming revisions to the regulations necessary in order to implement amendments made to the Act by section 103 of the Medicare, Medicaid and State Child Health Insurance Program Balanced Budget Refinement Act of 1999 (BBRA), Public Law 106-113, Appendix F. A. Current System for Payment of Skilled Nursing Facility Services Under Part A of the Medicare Program Section 4432 of the Balanced Budget Act of 1997 (BBA) (Public Law 105-33) mandated the implementation of a per diem PPS for SNFs, covering all costs (routine, ancillary, and capital) of covered SNF services furnished to beneficiaries under Part A of the Medicare program, effective for cost reporting periods beginning on or after July 1, 1998. We are updating the per diem payment rates for SNFs, for FY 2001. Major elements of the SNF PPS include: • Rates : Per diem Federal rates were established for urban and rural areas using allowable costs from FY 1995 cost reports. These rates also included an estimate of the cost of services that, before July 1, 1998, had been paid under Part B but furnished to Medicare beneficiaries in a SNF during a Part A covered stay. Rates are case-mix adjusted using a classification system (Resource Utilization Groups, version III (RUG-III)) based on beneficiary assessments (using the Minimum Data Set (MDS) 2.0). In addition, the Federal rates are adjusted by the hospital wage index to account for geographic variation in wages. Further, the rates are adjusted annually using an SNF market basket index. • Transition : The SNF PPS includes a 3-year, phased transition that blends a facility-specific payment rate with the Federal case-mix adjusted rate. For each cost reporting period after a facility migrates to the new system, the facility-specific portion of the blend decreases and the Federal portion increases, in 25 percent increments. For most facilities, the facility-specific rate is based on allowable costs from FY 1995. As discussed later in this final rule, section 102 of the BBRA authorized facilities to elect to bypass the transition to be paid at the full Federal rate. • Coverage : The PPS statute did not change Medicare's fundamental requirements for SNF coverage. However, because RUG-III classification is based, in part, on the beneficiary's need for skilled nursing care and therapy, we have attempted where possible to coordinate claims review procedures with the outputs of beneficiary assessment and RUG-III classifying activities. • Consolidated Billing : The statute includes a billing provision that requires a SNF to submit consolidated Medicare bills for its beneficiaries for virtually all services that are covered under either Part A or Part B. The statute excludes a small list of services (primarily those of physicians and certain other types of practitioners). As discussed later in this final rule, section 103 of the BBRA has identified certain additional services for exclusion, effective April 1, 2000. B. Requirements of the Balanced Budget Act of 1997 for Updating the Prospective Payment System for Skilled Nursing Facilities Section 1888(e)(4)(H) of the Act requires that we publish in the Federal Register: 1. The unadjusted Federal per diem rates to be applied to days of covered SNF services furnished during the FY. 2. The case-mix classification system to be applied with respect to these services during the FY. 3. The factors to be applied in making the area wage adjustment with respect to these services. In addition, in the July 30, 1999 final rule (64 FR 41670), we indicated that we would announce any changes to the guidelines for Medicare level of care determinations related to Part A SNF services or to the RUG-III classifications. Along with a number of other revisions and refinements discussed later in this preamble, this final rule provides the annual updates to the Federal rates, as mandated by the Medicare statute. C. The Medicare, Medicaid and State Child Health Insurance Program (SCHIP) Balanced Budget Refinement Act of 1999 (BBRA) As a result of enactment of the BBRA, there are several new provisions that result in adjustments to the PPS for SNFs. The following provisions were described in the proposed rule that we published on April 10, 2000 (65 FR 19188), and are discussed further in section III. of this preamble, to the extent that we received public comments concerning them: • Section 101 provides for a temporary, 20 percent increase in the per diem adjusted payment rates for 15 specified RUG-III groups (SE3, SE2, SE1, SSC, SSB, SSA, CC2, CC1, CB2, CB1, CA2, CA1, RHC, RMC, and RMB). This legislation provides that the 20 percent increase takes effect with SNF services that are furnished on or after April 1, 2000, and continues until the later of October 1, 2000, or implementation by the Secretary of a refined RUG system. Thus, the 20 percent increase serves as a temporary, interim adjustment to the payment rates and RUG-III classification system as published in the final rule of July 30, 1999, and will continue until implementation of the case-mix refinements described in the legislation. As discussed in Section III., we are not implementing such case-mix refinements in this final rule. Therefore, the 20 percent increase for the specified RUG-III groups will remain in effect during FY 2001. Section 101 also includes an across-the-board increase in the adjusted Federal per diem payment rates by 4 percent each year for FYs 2001 and 2002, exclusive of the 20 percent increase. • Section 102 authorizes SNFs that would otherwise be subject to the three-year, phased transition from facility-specific to Federal rates to elect instead to make an immediate transition to the full Federal rate. • Effective April 1, 2000, section 103 excludes from the SNF PPS bundle and the consolidated billing requirement certain types of ambulance services, certain customized prosthetic devices, and certain services involving chemotherapy and its administration; beginning with FY 2001, this section also requires a corresponding proportional reduction in Part A SNF payments. • Section 104 provides for a Part B add-on for facilities participating in the Multistate Nursing Home Case-Mix and Quality (NHCMQ) Demonstration Project. • Section 105 provides for a 50 percent Federal, 50 percent facility-specific payment rate for those SNFs that serve certain specialized patient populations. • Section 155 provides that PPS payment to certain SNF providers located in Baldwin or Mobile County, Alabama, are based on 100 percent of their facility specific rates for cost reporting periods that begin in FY 2000 or FY 2001. We included further information on these provisions in Program Memorandums A-99-53 and A-99-61 (December 1999), and Program Memorandum A-00-18 (March 2000). D. Skilled Nursing Facility Prospective Payment—General Overview The Medicare SNF PPS was implemented for cost reporting periods beginning on or after July 1, 1998. Under the PPS, SNFs are paid through prospective, case-mix adjusted per diem payment rates applicable to all covered SNF services. These payment rates cover all the costs of furnishing covered skilled nursing services (that is, routine, ancillary, and capital-related costs) other than costs associated with approved educational activities. Covered SNF services include posthospital SNF services for which benefits are provided under Part A and all items and services that, before July 1, 1998, had been paid under Part B (other than physician and certain other services specifically excluded under the BBA) but furnished to Medicare beneficiaries in a SNF during a Part A covered stay. (A complete discussion of these provisions appears in the May 12, 1998 interim final rule (63 FR 26252)). 1. Payment Provisions—Federal Rate The statute sets forth a fairly prescriptive methodology for calculating the amount of payment under the SNF PPS. The PPS utilizes per diem Federal payment rates based on mean SNF costs in a base year 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 incorporate an estimate of the amounts that would be payable under Part B for covered SNF services to individuals who were receiving Part A covered services in an SNF. In developing the rates for the initial period, we updated costs to the first effective year of PPS (15-month period beginning July 1, 1998) using a SNF market basket index, and standardized for facility differences in case-mix and for geographic variations in wages. Providers that received “new provider” exemptions from the routine cost limits were excluded from the database used to compute the Federal payment rates. In addition, costs related to payments for exceptions to the routine cost limits were excluded from the database used to compute the Federal rates. In accordance with the formula prescribed in the BBA, we set the Federal rates at a level equal to the weighted mean of freestanding costs plus 50 percent of the difference between the freestanding mean and weighted mean of all SNF costs (hospital-based and freestanding) combined. We compute and apply separately the payment rates for facilities located in urban and rural areas. In addition, we adjust the portion of the Federal rate attributable to wage related costs by a wage index. The Federal rate also incorporates adjustments to account for facility case-mix using a classification system that accounts for the relative resource utilization of different patient types. This classification system, RUG-III, utilizes beneficiary assessment data (from the Minimum Data Set or MDS) completed by SNFs to assign beneficiaries into one of 44 groups. The May 12, 1998 interim final rule (63 FR 26252) has a complete and detailed description of the RUG-III classification system. The BBA requires us to publish the SNF PPS case-mix classification methodology applicable for the next Federal FY before August 1 of each year. In the proposed rule, we discussed options for refining the existing RUG-III classification system. Further discussion of this issue appears in Section III. A. of this rule. The Federal rates reflected in this rule update the rates in the July 30, 1999 update notice (64 FR 41684) by a factor equal to the SNF market basket index minus 1 percentage point. According to section 1888(e)(4)(E)(ii) of the Act, for FYs 2001 and 2002, we will update the rate by adjusting the current rates by the SNF market basket change minus 1 percentage point. For subsequent FYs, we will adjust the rates by the applicable SNF market basket change. 2. Payment Provisions—Transition Period Beginning with a provider's first cost reporting period beginning on or after July 1, 1998, there is a transition period covering three cost reporting periods. During the transition period, SNFs receive a payment rate comprising a blend between the Federal rate and a facility-specific rate based on each facility's FY 1995 cost report. Under section 1888(e)(2)(E)(ii) of the Act, SNFs that received their first payment from Medicare on or after October 1, 1995 receive payment according to the Federal rates only. For SNFs subject to transition, the composition of the blended rate varies depending on the year of transition. For the first cost reporting period beginning on or after July 1, 1998, we make payment based on 75 percent of the facility-specific rate and 25 percent of the Federal rate. In the next cost reporting period, the rate consists of 50 percent of the facility-specific rate and 50 percent of the Federal rate. In the following cost reporting period, the rate consists of 25 percent of the facility-specific rate and 75 percent of the Federal rate. For all subsequent cost reporting periods, we base payments entirely on the Federal rates. As noted elsewhere in this regulation, in accordance with section 102 of the BBRA, SNFs that would otherwise be subject to the statutory three-year, phased transition from facility-specific to Federal rates, may elect to bypass the transition and go directly to the full Federal rate. This amendment applies to elections made on or after December 15, 1999, except that no election will be effective for a cost reporting period beginning before January 1, 2000; an election is effective for a cost reporting period beginning no earlier than 30 days before the date of the election. 3. Payment Provisions—Facility-Specific Rate For most facilities, we compute the facility-specific payment rate utilized for the transition using the allowable costs of SNF services for cost reporting periods beginning in FY 1995 (cost reporting periods beginning on or after October 1, 1994 and before October 1, 1995). Included in the facility-specific per diem rate is an estimate of the amount that would be payable under Part B for covered SNF services furnished during FY 1995 to those beneficiaries in the facility who were receiving Part A covered services. The facility-specific rate, in contrast to the Federal rates, includes amounts paid to SNFs for exceptions to the routine cost limits. In addition, we also take into account “new provider” exemptions from the routine cost limits, but only to the extent that routine costs do not exceed 150 percent of the routine cost limit. We update the facility-specific rate for each cost reporting period after 1995 by a factor equal to the SNF market basket percentage increase minus 1 percentage point. In each subsequent year, we will update it by the applicable SNF market basket increase. II. Provisions of the Proposed Rule The proposed rule that we published in the Federal Register (65 FR 19188, April 10, 2000) included proposed FY 2001 updates to the Federal payment rates used under the SNF PPS. In accordance with section 1888(e)(4)(E)(ii)(II) of the Act, the proposed updates reflected the SNF market basket percentage change for that fiscal year minus 1 percentage point. Also, in order to facilitate the incorporation of proposed refinements into the case-mix classification system (see discussion in Section III. A. of this final rule), we created a separate component of the payment rates specifically to account for non-therapy ancillary costs (which have been included within the overall nursing case-mix component of the payment rates). In addition, the proposed rule described our methodology for adjusting the Federal rates in accordance with section 103 of the BBRA, in order to reflect that provision's exclusion of certain additional items and services from the SNF PPS and consolidated billing. Further, we provided for a 4 percent increase in the adjusted Federal rate, in accordance with section 101 of the BBRA. We also included a discussion of the rights of SNFs to appeal their payment rates under the PPS (65 FR 19192). In addition, we proposed to make certain refinements in the case-mix classification system, in accordance with section 101 of the BBRA (see discussion in Section III. A. of this final rule). In addition to discussing these general issues in the proposed rule, we also proposed to make the following specific revisions to the existing text of the regulations: • In § 411.15, paragraph (p)(2)(vii) would be revised to exclude from consolidated billing those ambulance services that are furnished to an SNF resident in conjunction with dialysis services that are covered under Part B. • In § 411.15, paragraph (p)(2) would also be revised to list the additional services that section 103 of the BBRA has excluded from consolidated billing. • In § 411.15, paragraph (p)(3)(iv), the phrase “within 24 consecutive hours” would be revised to read “by midnight of the day of departure”. • In § 489.20, paragraph (s) would be revised to list the additional services that the BBRA has excluded from consolidated billing, and a conforming change would be made in § 489.21(h). • In § 489.20, paragraph (s)(7) would be revised to exclude from consolidated billing those ambulance services that are furnished to an SNF resident in conjunction with dialysis services that are covered under Part B. • Section 489.20(s)(11) and § 411.15(p)(2)(xi), would be revised to reflect editorial revisions in the paragraphs concerning the transportation costs of electrocardiogram equipment. More detailed information on each of these issues can be found in the discussion contained in the following section of this final rule. III. Analysis of and Responses to Public Comments In response to the publication of the proposed rule on April 10, 2000, we received approximately 750 comments. The majority consisted of form letters, in which we received multiple copies of an identically-worded letter that had been signed and submitted by different individuals. Furthermore, we received over 30 comments from various trade associations and other major organizations. Comments originated from nursing homes and other providers, suppliers and practitioners (both individually, and through their respective trade associations), nursing home resident advocacy groups, health care consulting firms, and private citizens. While the comments fell into several broad areas, by far the largest number involved the refinements that we proposed to make in the PPS case-mix classification system, in accordance with section 101 of the BBRA. A. Case-Mix Refinements The proposed rule discussed options for refinements to the RUG-III system, described ongoing research and analyses, shared the initial results that we proposed be incorporated into the Medicare PPS system effective October 1, 2000, and solicited comments from all interested parties. 1. Potential Case-Mix Refinements Described in the Proposed Rule Comment : We received numerous comments on the potential refinements, the supporting data, and the analyses planned to validate the data. Commenters were concerned first about our ability to complete the analyses on a timely basis, and then on how we would use the additional analyses in setting the FY 2001 rates. They also expressed concerns that the proposed refinements might not adequately address the problems that they perceived with current PPS payment levels. Response : In the proposed rule (65 FR 19202), we indicated that we believed our preliminary research findings to be valid, but we also noted that * * * it is certainly possible that additional testing will identify new issues or suggest alternative refinements to those presented here. We remain open to suggestions during the comment period and will carefully evaluate the validation analyses before proceeding to final rulemaking. We conducted the validation analyses discussed in the proposed rule to identify the actual distribution of the Medicare population, to determine any cost or acuity differences associated with short stay beneficiaries, and to validate the predictive power of the unweighted and weighted models in identifying variations in ancillary costs using national data from a current period (for example, after the implementation of the SNF PPS). We identified several important variations in the volume and distribution of beneficiaries and ancillary services costs using the 1999 national data which appear to have affected the performance of the index models described in the proposed rule. In examining the 1999 data, it is apparent that the introduction of the PPS and consolidated billing provisions for covered Part A SNF stays has caused changes in facility practice patterns and billing, although some of this change may be the effect of using national data. In part, these variations may be related to changes in facility practices regarding the use of pharmaceuticals and in the way respiratory therapy services are provided to Medicare beneficiaries. For example, respiratory therapy (RT) was a significant portion of the non-therapy ancillary services in the pre-PPS data base used to develop the refinement models. This component of cost provided a significant contribution to the predictive power of the index models presented in the proposed rule. However, mean RT costs decreased from $16.04 based on a re-analysis of the six State sample to $5.46 in the 1999 national data base (or a 66 percent decrease). We believe that the decrease may be a result of both more prudent use of the services (RT has been a target of OIG studies in utilization and pricing) and the incentives created by the PPS (for example, the use of nurses to provide RT care). On the other hand, average drug costs increased from $29.93 based on a re-analysis of the six State sample to $92.38 in 1999 national data base. Therefore, when applying the non-therapy ancillary index indicators to the national PPS data, we found the models were less effective in predicting ancillary cost variations than when applied to the earlier research data. As stated in the proposed rule, we were committed to validating the research results before proceeding to a refinement which required such a large expansion of the RUG-III classification system and impact on the delivery of SNF care. Since our latest validation analyses do not confirm the effectiveness of index models in the current PPS environment, we are not proceeding with implementation of the RUG refinements discussed in the proposed rule. Therefore, for FY 2001, we will be maintaining the existing 44-group RUG-III configuration. Consequently, we will also maintain the 20 percent add-on to the Federal rates for the 15 selected RUG-III groups, in accordance with section 101 of BBRA. The inability to validate the specific non-therapy ancillary index models described in the proposed rule does not preclude us from further efforts to improve the payment system's ability to allocate payments based on expected ancillary use. However, additional research will be needed to identify variables that will be effective predictors in the PPS environment. Now that we have developed a large national database of claims and MDS records from 1999, we plan to continue research on the development of a non-therapy ancillary index, as well as to investigate other potential refinement approaches. In continuing this research, we will carefully consider the comments we received, and use these comments to assist us in exploring potential solutions. Finally, as indicated in the April 10, 2000, proposed rule, both non-therapy ancillary index models were designed in conjunction with an addition to the RUG-III hierarchy; for example, 14 combined Extensive Services/Rehabilitation groups. While this approach may warrant further exploration, we are not adopting it at this time. The validation analyses looked at the impact of both components of the proposed refinements: the expansion of the RUG-III groups and the creation of a non-therapy ancillary index. The combined predictive power of both components was approximately 3 percent. Measured separately, the added predictive power of either component would be negligible. The benefit of expanding the number of RUG-III groups would be too small to justify the added complexity of the RUG-III system. We will continue to work to develop ways to address the needs of those beneficiaries who require an unusually heavy combination of clinical care, rehabilitation services, and ancillary utilization, without creating perverse incentives that could negatively affect the quality of care for this vulnerable segment of the beneficiary population. 2. Clinical Issues Comment : One commenter raised an issue involving certain restrictions placed by SNF administrators on staff's provision of therapies. The commenter reported that SNFs frequently constrain the amount of therapy therapists are permitted to provide the beneficiaries in particular facilities. Specifically, the commenter stated that therapists have been instructed by SNFs to limit therapy minutes to the minimum required for the medium RUG-III groups. Response : In view of this comment, in addition to other anecdotal evidence, we believe it is appropriate to reiterate some key points of Medicare policy. As we previously stated in the final rule of July 30, 1999 (64 FR 41662), the number of minutes per week that are used as qualifiers for classification into the rehabilitation RUG-III groups “are minimums and are not to be used as upper limits for service provision.” Facilities with patterns of therapy service provided at the minimum levels may be targeted for medical review and other audit activities. Arbitrary decisions by facility administrative staff to override the professional decision-making regarding which types and how much therapy service are needed by, and will be provided to, the individual beneficiary are inconsistent with our requirements for individual evaluations by a licensed professional therapist, care plan development that involves the physician and the professional therapist, and the strict rules we have promulgated regarding supervision of therapy service provision when service is provided by someone other than the licensed professional. Further, the Medicare requirements for participation (at section 1819(b) of the Act) require SNFs to provide the services necessary to attain each resident's highest level of physical functioning. Any facility level policy that obstructs this goal is in direct conflict with Medicare policy. In addition, because we are not implementing the RUG-III refinements as proposed, we are concerned about some of the payment incentives associated with the 20 percent add-ons for 15 of the RUG-III groups. We are especially concerned about the effect on provider behavior that could result from the incentive provided by the add-on for such groups as those in the extensive services category, and for three of the rehabilitation RUG-III groups. For example, the additional payment for the RHC, RMC, and RMB groups results in higher payment for these groups than for some other, higher-level rehabilitation groups. We want to make clear that although this may create a fiscal incentive to provide less service in order to receive a higher rate of payment, we expect that facilities will continue to provide therapy at the levels most appropriate for each individual beneficiary. However, we realize that this is a powerful incentive and, therefore, are working on ways to monitor the inappropriate denial of services to beneficiaries in facilities' attempts to achieve higher payment. We are exploring our monitoring options and strategies to detect and deter inappropriate practices in this area, and will be able to present more specific information about our plans at our fall fiscal intermediary and provider training sessions. Monitoring activities will include our use of MDS data linked to SNF bills (which allows us to identify patterns and trends of SNF use and RUG-III group distributions), the SNF PPS Quality Medical Review Pilot and Data Analysis Peer Review Organization (which will specifically focus on the impact of the PPS in terms of quality of care and the potential for underutilization), and survey reports. At the facility level, we would certainly expect that any significant shift in beneficiary RUG-III classifications (for example, all beneficiaries being classified into the rehabilitation groups that have the 20 percent add-on), would result in closer monitoring and possible intervention. Comment : We received a few comments regarding the clinical items used as indicators for the non-therapy ancillary index. The commenters suggested additional MDS items that they believe should be used to trigger additional payment. Response : The clinical items used as indicators for the non-therapy ancillary indices, in the models discussed in the proposed rule are based on the data analyses performed to create the models. We did not undertake the research with any preconceived expectations or preferences as to the variables we believed would be most predictive of non-therapy ancillary cost. Rather, we looked to the data itself to identify the MDS items that were predictive of costs. We did not make decisions about the inclusion of these items and the values accepted for them unless the decision could be supported by the data analyses. As we continue to perform data analyses to identify the best way to recognize non-therapy ancillary costs, we will take into consideration the suggestions offered during the comment period. We plan to reexamine, using national data, which MDS items are predictive of non-therapy ancillary costs. 3. Medical Review and Fiscal Intermediary Issues Comment : Many comments suggested that implementation of the refinements should be accompanied by HCFA-sponsored provider training. The reasons given for the additional training request are the expectation that the refinements will require software changes as well as some other operational changes. A few also suggested that clinical staff in particular, needed additional training because the refined RUG-III groups would necessitate changes in assessing, coding and documenting clinical decisions. Response : Although we are not going forward with the proposed refinements, we do intend to proceed with our plans for provider and fiscal intermediary training, in order to ensure that they have the most current information available on medical review procedures, claims processing requirements, and other aspects of the SNF PPS. We have already made plans for the provision of both “train-the-trainer” sessions for the fiscal intermediaries and for other HCFA-sponsored provider training to present updates on all aspects of the SNF PPS. We believe that having a full understanding of the payment and classification systems will help providers achieve their highest levels of performance. 4. Section U of the Minimum Data Set Comment : We received a few comments expressing disappointment at our decision not to collect medication data using Section U of the minimum data set (MDS). These commenters suggested that we are losing an opportunity to collect very important information about the medications being offered to Medicare beneficiaries. They point out the importance of this data collection from both quality of care and payment perspectives. We also received a comment applauding our decision not to collect the medication data, which stated that the MDS should be streamlined rather than expanded. Response : We appreciate the commenters' concerns but, as stated in the proposed rule, we cannot collect the medication data beginning in October 2000, as we had planned. However, we are continuing our evaluation and will take all of the comments into consideration in that process. B. Update of Payment Rates Under the Prospective Payment System for Skilled Nursing Facilities 1. Federal Prospective Payment System This final rule sets forth a schedule of Federal prospective payment rates applicable to Medicare Part A SNF services beginning October 1, 2000. The schedule incorporates per diem Federal rates that provide Part A payment for all costs of services furnished to a beneficiary in an SNF during a Medicare-covered stay. Tables 1 and 2 reflect the updated components of the unadjusted Federal rates. Table 1.—Unadjusted Federal Rate Per Diem [Urban] Rate component Nursing—Case-mix Therapy—Case-mix Therapy—Non-case mix Non-case-mix Per Diem Amount $114.38 $86.16 $11.35 $58.38 Table 2.—Unadjusted Federal Rate Per Diem [Rural] Rate component Nursing—Case-mix Therapy—Case-mix Therapy—Non-case mix Non-case-mix Per Diem Amount $109.29 $99.34 $12.13 $59.45 2. Case-Mix Adjustment As noted earlier in this final rule, we are not proceeding with the implemenation of the RUG refinements discussed in the proposed rule. Accordingly, the payment rates set forth in this final rule reflect the continued use of the 44-group RUG-III classification system discussed in the May 12, 1998 interim final rule (63 FR 26252). The case-mix adjusted payment rates are listed separately for urban and rural SNFs in Tables 3 and 4, with the corresponding case-mix index values. Table 3.—Case-mix Adjusted Federal Rates and Associated Indices RUG IV category Nursing index Therapy index Nursing component Therapy component Therapy non-case-mix component Non-case-mix component Total rate RUC 1.30 2.25 $148.69 $193.86 $58.38 $400.93 RUB 0.95 2.25 108.66 193.86 58.38 360.90 RUA 0.78 2.25 89.22 193.86 58.38 341.46 RVC 1.13 1.41 129.25 121.49 58.38 309.12 RVB 1.04 1.41 118.96 121.49 58.38 298.83 RVA 0.81 1.41 92.65 121.49 58.38 272.52 RHC 1.26 0.94 144.12 80.99 58.38 283.49 RHB 1.06 0.94 121.24 80.99 58.38 260.61 RHA 0.87 0.94 99.51 80.99 58.38 238.88 RMC 1.35 0.77 154.41 66.34 58.38 279.13 RMB 1.09 0.77 124.67 66.34 58.38 249.39 RMA 0.96 0.77 109.80 66.34 58.38 234.52 RLB 1.11 0.43 126.96 37.05 58.38 222.39 RLA 0.80 0.43 91.50 37.05 58.38 186.93 SE3 1.70 194.45 $11.35 58.38 264.18 SE2 1.39 158.99 11.35 58.38 228.72 SE1 1.17 133.82 11.35 58.38 203.55 SSC 1.13 129.25 11.35 58.38 198.98 SSB 1.05 120.10 11.35 58.38 189.83 SSA 1.01 115.52 11.35 58.38 185.25 CC2 1.12 128.11 11.35 58.38 197.84 CC1 0.99 113.24 11.35 58.38 182.97 CB2 0.91 104.09 11.35 58.38 173.82 CB1 0.84 96.08 11.35 58.38 165.81 CA2 0.83 94.94 11.35 58.38 164.67 CA1 0.75 85.79 11.35 58.38 155.52 IB2 0.69 78.92 11.35 58.38 148.65 IB1 0.67 76.63 11.35 58.38 146.36 IA2 0.57 65.20 11.35 58.38 134.93 IA1 0.53 60.62 11.35 58.38 130.35 BB2 0.68 77.78 11.35 58.38 147.51 BB1 0.65 74.35 11.35 58.38 144.08 BA2 0.56 64.05 11.35 58.38 133.78 BA1 0.48 54.90 11.35 58.38 124.63 PE2 0.79 90.36 11.35 58.38 160.09 PE1 0.77 88.07 11.35 58.38 157.80 PD2 0.72 82.35 11.35 58.38 152.08 PD1 0.70 80.07 11.35 58.38 149.80 PC2 0.65 74.35 11.35 58.38 144.08 PC1 0.64 73.20 11.35 58.38 142.93 PB2 0.51 58.33 11.35 58.38 128.06 PB1 0.50 57.19 11.35 58.38 126.92 PA2 0.49 56.05 11.35 58.38 125.78 PA1 0.46 52.61 11.35 58.38 122.34 Table 4.—Case-Mix Adjusted Federal Rates and Associated Indices [Rural] RUG IV category Nursing index Therapy index Nursing component Therapy component Therapy non-case-mix component Non-case-mix component Total rate RUC 1.30 2.25 $142.08 $223.52 $59.45 $425.05 RUB 0.95 2.25 103.83 223.52 59.45 386.80 RUA 0.78 2.25 85.25 223.52 59.45 368.22 RVC 1.13 1.41 123.50 140.07 59.45 323.02 RVB 1.04 1.41 113.66 140.07 59.45 313.18 RVA 0.81 1.41 88.52 140.07 59.45 288.04 RHC 1.26 0.94 137.71 93.38 59.45 290.54 RHB 1.06 0.94 115.85 93.38 59.45 268.68 RHA 0.87 0.94 95.08 93.38 59.45 247.91 RMC 1.35 0.77 147.54 76.49 59.45 283.48 RMB 1.09 0.77 119.13 76.49 59.45 255.07 RMA 0.96 0.77 104.92 76.49 59.45 240.86 RLB 1.11 0.43 121.31 42.72 59.45 223.48 RLA 0.80 0.43 87.43 42.72 59.45 189.60 SE3 1.70 185.79 12.13 59.45 257.37 SE2 1.39 151.91 12.13 59.45 223.49 SE1 1.17 127.87 12.13 59.45 199.45 SSC 1.13 123.50 12.13 59.45 195.08 SSB 1.05 114.75 12.13 59.45 186.33 SSA 1.01 110.38 12.13 59.45 181.96 CC2 1.12 122.40 12.13 59.45 193.98 CC1 0.99 108.20 12.13 59.45 179.78 CB2 0.91 99.45 12.13 59.45 171.03 CB1 0.84 91.80 12.13 59.45 163.38 CA2 0.83 90.71 12.13 59.45 162.29 CA1 0.75 81.97 12.13 59.45 153.55 IB2 0.69 75.41 12.13 59.45 146.99 IB1 0.67 73.22 12.13 59.45 144.80 IA2 0.57 62.30 12.13 59.45 133.88 IA1 0.53 57.92 12.13 59.45 129.50 BB2 0.68 74.32 12.13 59.45 145.90 BB1 0.65 71.04 12.13 59.45 142.62 BA2 0.56 61.20 12.13 59.45 132.78 BA1 0.48 52.46 12.13 59.45 124.04 PE2 0.79 86.34 12.13 59.45 157.92 PE1 0.77 84.15 12.13 59.45 155.73 PD2 0.72 78.69 12.13 59.45 150.27 PD1 0.70 76.50 12.13 59.45 148.08 PC2 0.65 71.04 12.13 59.45 142.62 PC1 0.64 69.95 12.13 59.45 141.53 PB2 0.51 55.74 12.13 59.45 127.32 PB1 0.50 54.65 12.13 59.45 126.23 PA2 0.49 53.55 12.13 59.45 125.13 PA1 0.46 50.27 12.13 59.45 121.85 C. Wage Index Adjustment to Federal Rates Section 1888(e)(4)(G)(ii) of the Act requires that we provide for adjustments to the Federal rates to account for differences in area wage levels using an “appropriate” wage index as determined by the Secretary. It is our intent to evaluate a wage index based specifically on SNF data once it becomes available. The SNF wage data are currently being collected and evaluated to determine if we can utilize them in the future. If a wage index based on SNF data is developed, we will publish it for comment. However, in the interim, many commenters urged us to incorporate the latest wage data available. We continue to believe that, until a wage index based on SNF wage data is collected and analyzed, the hospital wage index's wage data provide the best available measure of comparable wages that should be paid by SNFs. Since hospitals and SNFs compete in the same labor market area, we believe that the use of this index's wage data results in an appropriate adjustment to the labor portion of SNF costs based on an “appropriate” wage index, as required under section 1888(e) of the Act. The computation of the wage index is similar to past years in that we incorporate the latest data and methodology used to construct the hospital wage index (see the discussion in the May 12, 1998 interim final rule (63 FR 26274)). The wage index adjustment is applied to the labor-related portion of the Federal rate, which is 77.870 percent of the total rate. Tables 5 and 6 below shows the Federal rates by labor-related and non-labor-related components. Table 5.— Case-Mix Adjusted Federal Rates for Urban SNFs by Labor and Non-Labor Component RUGs IV category Labor-related Non-labor-related Total federal rate RUC $312.20 $88.73 $400.93 RUB 281.03 79.87 360.90 RUA 265.89 75.57 341.46 RVC 240.71 68.41 309.12 RVB 232.70 66.13 298.83 RVA 212.21 60.31 272.52 RHC 220.75 62.74 283.49 RHB 202.94 57.67 260.61 RHA 186.02 52.86 238.88 RMC 217.36 61.77 279.13 RMB 194.20 55.19 249.39 RMA 182.62 51.90 234.52 RLB 173.18 49.21 222.39 RLA 145.56 41.37 186.93 SE3 205.72 58.46 264.18 SE2 178.10 50.62 228.72 SE1 158.50 45.05 203.55 SSC 154.95 44.03 198.98 SSB 147.82 42.01 189.83 SSA 144.25 41.00 185.25 CC2 154.06 43.78 197.84 CC1 142.48 40.49 182.97 CB2 135.35 38.47 173.82 CB1 129.12 36.69 165.81 CA2 128.23 36.44 164.67 CA1 121.10 34.42 155.52 IB2 115.75 32.90 148.65 IB1 113.97 32.39 146.36 IA2 105.07 29.86 134.93 IA1 101.50 28.85 130.35 BB2 114.87 32.64 147.51 BB1 112.20 31.88 144.08 BA2 104.17 29.61 133.78 BA1 97.05 27.58 124.63 PE2 124.66 35.43 160.09 PE1 122.88 34.92 157.80 PD2 118.42 33.66 152.08 PD1 116.65 33.15 149.80 PC2 112.20 31.88 144.08 PC1 111.30 31.63 142.93 PB2 99.72 28.34 128.06 PB1 98.83 28.09 126.92 PA2 97.94 27.84 125.78 PA1 95.27 27.07 122.34 Table 6.—Case-Mix Adjusted Federal Rates for Rural SNFs by Labor and Non-Labor Component RUGs IV category Labor-related Non-labor-related Total federal rate RUC $330.99 $94.06 $425.05 RUB 301.20 85.60 386.80 RUA 286.73 81.49 368.22 RVC 251.54 71.48 323.02 RVB 243.87 69.31 313.18 RVA 224.30 63.74 288.04 RHC 226.24 64.30 290.54 RHB 209.22 59.46 268.68 RHA 193.05 54.86 247.91 RMC 220.75 62.73 283.48 RMB 198.62 56.45 255.07 RMA 187.56 53.30 240.86 RLB 174.02 49.46 223.48 RLA 147.64 41.96 189.60 SE3 200.41 56.96 257.37 SE2 174.03 49.46 223.49 SE1 155.31 44.14 199.45 SSC 151.91 43.17 195.08 SSB 145.10 41.23 186.33 SSA 141.69 40.27 181.96 CC2 151.05 42.93 193.98 CC1 139.99 39.79 179.78 CB2 133.18 37.85 171.03 CB1 127.22 36.16 163.38 CA2 126.38 35.91 162.29 CA1 119.57 33.98 153.55 IB2 114.46 32.53 146.99 IB1 112.76 32.04 144.80 IA2 104.25 29.63 133.88 IA1 100.84 28.66 129.50 BB2 113.61 32.29 145.90 BB1 111.06 31.56 142.62 BA2 103.40 29.38 132.78 BA1 96.59 27.45 124.04 PE2 122.97 34.95 157.92 PE1 121.27 34.46 155.73 PD2 117.02 33.25 150.27 PD1 115.31 32.77 148.08 PC2 111.06 31.56 142.62 PC1 110.21 31.32 141.53 PB2 99.14 28.18 127.32 PB1 98.30 27.93 126.23 PA2 97.44 27.69 125.13 PA1 94.88 26.97 121.85 As discussed above and in the proposed rule, until an appropriate wage index based specifically on SNF data is available, we will use the latest available hospital wage index data in making annual updates to the payment rates. In making these annual updates, section 1888(e)(4)(G)(ii) of the Act requires that the application of this wage index be made in a manner that does not result in aggregate payments that are greater or less than would otherwise be made in the absence of the wage adjustment. In this third PPS year (Federal rates effective October 1, 2000), we are updating the wage index applicable to SNF payments using the most recent hospital wage data and applying an adjustment to fulfill the budget neutrality requirement. This requirement will be met by multiplying each of the per diem rate components by the ratio of the volume weighted mean wage adjustment factor (using the wage index from the previous year) to the volume weighted mean wage adjustment factor, using the wage index for the FY beginning October 1, 2000. The same volume weights are used in both the numerator and denominator and will be derived from 1997 Medicare Provider Analysis and Review File (MedPar) data. The wage adjustment factor used in this calculation is defined as the labor share of the rate component multiplied by the wage index plus the non-labor share. The budget neutrality factor for FY 2001 is 0.99909, which is multiplied by each of the Federal rate components. Comment: We received one comment suggesting that the differences in the rural and urban wage indexes exacerbate rural access problems. The commenter indicates that the loss of adequate indirect and overhead reimbursement has taken away the incentive for ancillary providers to travel long distances, particularly to rural SNFs. Response: The wage index used to adjust the SNF payment rate is currently based upon the wage and hourly data derived directly from the hospital cost report and, therefore, reflects the relative wage difference between a rural and urban area. In addition, the wages are adjusted to account for overhead allocated to excluded areas that are carved out of the computation. We do not believe that using the wage index to adjust payments to SNFs will affect access to care in rural SNFs. Comment: We received several comments concerning the use of the hospital wage index to adjust payments for SNFs. Several of these commenters suggested that the hospital wage index does not adequately reflect the wages paid in the SNF setting. They argued that this is compounded by the fact that the SNF along with other areas are carved out or excluded from the computation of the hospital wage index. These commenters strongly suggested that we move quickly to a SNF-specific wage index. We also received other comments suggesting that we only implement a SNF-specific wage index if the data is significantly better, in order to justify the efforts involved in collecting and cleaning up the data. Response: We are currently reviewing the data collected on the SNF cost reports to evaluate the possibility of developing a SNF-specific wage index. We are developing edits and screens on the data to evaluate the reasonableness and accuracy of the data. A full year's worth of data under the PPS will not be available until late fall 2000. We will review the data and consider the reasonableness of a SNF specific wage index. We hope to be able to provide detailed information on a SNF-specific wage index in our next proposed rule. However, until that time, we continue to believe that the hospital wage data are an appropriate measure to adjust for area differences in wage rates. The statute provides that the Secretary use an “appropriate” wage index. We believe that the use of hospital wage data is appropriate because the relative difference between labor markets for hospitals and SNFs does not vary significantly, as they compete in the same labor market area. Comment: One commenter suggested that we update the wage index every six months to attract the best nursing staff to nursing homes. Response: We are not adopting this suggestion, because we do not believe that revising the wage index every six months would achieve the goal that the commenter seeks. For any RUG-III group, to compute a wage-adjusted Federal payment rate, the labor-related portion of the payment rate is multiplied by the SNF's appropriate wage index factor listed in Table 7. The product of that calculation is added to the corresponding non-labor-related component. The resulting amount is the Federal rate applicable to a beneficiary in that RUG-III group for that SNF. Table 7.—Wage Index for Urban Areas Urban area (Constituent Counties or County Equivalents) Wage Index 0040 Abilene, TX 0.8240 Taylor, TX 0060 Aguadilla, PR 0.4391 Aguada, PR Aguadilla, PR Moca, PR 0080 Akron, OH 0.9736 Portage, OH Summit, OH 0120 Albany, GA 0.9933 Dougherty, GA Lee, GA 0160 Albany-Schenectady-Troy, NY 0.8549 Albany, NY Montgomery, NY Rensselaer, NY Saratoga, NY Schenectady, NY Schoharie, NY 0200 Albuquerque, NM 0.9136 Bernalillo, NM Sandoval, NM Valencia, NM 0220 Alexandria, LA 0.8151 Rapides, LA 0240 Allentown-Bethlehem-Easton, PA 1.0040 Carbon, PA Lehigh, PA Northampton, PA 0280 Altoona, PA 0.9346 Blair, PA 0320 Amarillo, TX 0.8715 Potter, TX Randall, TX 0380 Anchorage, AK 1.2793 Anchorage, AK 0440 Ann Arbor, MI 1.1254 Lenawee, MI Livingston, MI Washtenaw, MI 0450 Anniston, AL 0.8284 Calhoun, AL 0460 Appleton-Oshkosh-Neenah, WI 0.9052 Calumet, WI Outagamie, WI Winnebago, WI 0470 Arecibo, PR 0.4525 Arecibo, PR Camuy, PR Hatillo, PR 0480 Asheville, NC 0.9516 Buncombe, NC Madison, NC 0500 Athens, GA 0.9739 Clarke, GA Madison, GA Oconee, GA 0520 Atlanta, GA 1.0096 Barrow, GA Bartow, GA Carroll, GA Cherokee, GA Clayton, GA Cobb, GA Coweta, GA De Kalb, GA Douglas, GA Fayette, GA Forsyth, GA Fulton, GA Gwinnett, GA Henry, GA Newton, GA Paulding, GA Pickens, GA Rockdale, GA Spalding, GA Walton, GA 0560 Atlantic City-Cape May, NJ 1.1182 Atlantic City, NJ Cape May, NJ 0580 Auburn-Opelika, AL 0.8106 Lee, AL 0600 Augusta-Aiken, GA-SC 0.9160 Columbia, GA McDuffie, GA Richmond, GA Aiken, SC Edgefield, SC 0640 Austin-San Marcos, TX 0.9577 Bastrop, TX Caldwell, TX Hays, TX Travis, TX Williamson, TX 0680 Bakersfield, CA 0.9678 Kern, CA 0720 Baltimore, MD 0.9365 Anne Arundel, MD Baltimore, MD Baltimore City, MD Carroll, MD Harford, MD Howard, MD Queen Annes, MD 0733 Bangor, ME 0.9561 Penobscot, ME 0743 Barnstable-Yarmouth, MA 1.3839 Barnstable, MA 0760 Baton Rouge, LA 0.8842 Ascension, LA East Baton Rouge, LA Livingston, LA West Baton Rouge, LA 0840 Beaumont-Port Arthur, TX 0.8744 Hardin, TX Jefferson, TX Orange, TX 0860 Bellingham, WA 1.1439 Whatcom, WA 0870 Benton Harbor, MI 0.8671 Berrien, MI 0875 Bergen-Passaic, NJ 1.1848 Bergen, NJ Passaic, NJ 0880 Billings, MT 0.9585 Yellowstone, MT 0920 Biloxi-Gulfport-Pascagoula, MS 0.8236 Hancock, MS Harrison, MS Jackson, MS 0960 Binghamton, NY 0.8690 Broome, NY Tioga, NY 1000 Birmingham, AL 0.8452 Blount, AL Jefferson, AL St. Clair, AL Shelby, AL 1010 Bismarck, ND 0.7705 Burleigh, ND Morton, ND 1020 Bloomington, IN 0.8733 Monroe, IN 1040 Bloomington-Normal, IL 0.9095 McLean, IL 1080 Boise City, ID 0.9006 Ada, ID Canyon, ID 1123 Boston-Worcester-Lawrence-Lowell-Brockton, MA-NH 1.1160 Bristol, MA Essex, MA Middlesex, MA Norfolk, MA Plymouth, MA Suffolk, MA Worcester, MA Hillsborough, NH Merrimack, NH Rockingham, NH Strafford, NH 1125 Boulder-Longmont, CO 0.9731 Boulder, CO 1145 Brazoria, TX 0.8658 Brazoria, TX 1150 Bremerton, WA 1.0975 Kitsap, WA 1240 Brownsville-Harlingen-San Benito, TX 0.8722 Cameron, TX 1260 Bryan-College Station, TX 0.8237 Brazos, TX 1280 Buffalo-Niagara Falls, NY 0.9580 Erie, NY Niagara, NY 1303 Burlington, VT 1.0735 Chittenden, VT Franklin, VT Grand Isle, VT 1310 Caguas, PR 0.4562 Caguas, PR Cayey, PR Cidra, PR Gurabo, PR San Lorenzo, PR 1320 Canton-Massillon, OH 0.8584 Carroll, OH Stark, OH 1350 Casper, WY 0.8724 Natrona, WY 1360 Cedar Rapids, IA 0.8736 Linn, IA 1400 Champaign-Urbana, IL 0.9198 Champaign, IL 1440 Charleston-North Charleston, SC 0.9038 Berkeley, SC Charleston, SC Dorchester, SC 1480 Charleston, WV 0.9240 Kanawha, WV Putnam, WV 1520 Charlotte-Gastonia-Rock Hill, NC-SC 0.9407 Cabarrus, NC Gaston, NC Lincoln, NC Mecklenburg, NC Rowan, NC Stanly, NC Union, NC York, SC 1540 Charlottesville, VA 1.0789 Albemarle, VA Charlottesville City, VA Fluvanna, VA Greene, VA 1560 Chattanooga, TN-GA 0.9833 Catoosa, GA Dade, GA Walker, GA Hamilton, TN Marion, TN 1580 Cheyenne, WY 0.8308 Laramie, WY 1600 Chicago, IL 1.1146 Cook, IL De Kalb, IL Du Page, IL Grundy, IL Kane, IL Kendall, IL Lake, IL McHenry, IL Will, IL 1620 Chico-Paradise, CA 0.9918 Butte, CA 1640 Cincinnati, OH-KY-IN 0.9415 Dearborn, IN Ohio, IN Boone, KY Campbell, KY Gallatin, KY Grant, KY Kenton, KY Pendleton, KY Brown, OH Clermont, OH Hamilton, OH Warren, OH 1660 Clarksville-Hopkinsville, TN-KY 0.8204 Christian, KY Montgomery, TN 1680 Cleveland-Lorain-Elyria, OH 0.9597 Ashtabula, OH Geauga, OH Cuyahoga, OH Lake, OH Lorain, OH Medina, OH 1720 Colorado Springs, CO 0.9697 El Paso, CO 1740 Columbia, MO 0.8961 Boone, MO 1760 Columbia, SC 0.9554 Lexington, SC Richland, SC 1800 Columbus, GA-AL 0.8568 Russell, AL Chattanoochee, GA Harris, GA Muscogee, GA 1840 Columbus, OH 0.9619 Delaware, OH Fairfield, OH Franklin, OH Licking, OH Madison, OH Pickaway, OH 1880 Corpus Christi, TX 0.8726 Nueces, TX San Patricio, TX 1890 Corvallis, OR 1.1326 Benton, OR 1900 Cumberland, MD-WV 0.8369 Allegany, MD Mineral, WV 1920 Dallas, TX 0.9913 Collin, TX Dallas, TX Denton, TX Ellis, TX Henderson, TX Hunt, TX Kaufman, TX Rockwall, TX 1950 Danville, VA 0.8589 Danville City, VA Pittsylvania, VA 1960 Davenport-Moline-Rock Island, IA-IL 0.8898 Scott, IA Henry, IL Rock Island, IL 2000 Dayton-Springfield, OH 0.9442 Clark, OH Greene, OH Miami, OH Montgomery, OH 2020 Daytona Beach, FL 0.9200 Flagler, FL Volusia, FL 2030 Decatur, AL 0.8534 Lawrence, AL Morgan, AL 2040 Decatur, IL 0.8125 Macon, IL 2080 Denver, CO 1.0181 Adams, CO Arapahoe, CO Denver, CO Douglas, CO Jefferson, CO 2120 Des Moines, IA 0.9118 Dallas, IA Polk, IA Warren, IA 2160 Detroit, MI 1.0510 Lapeer, MI Macomb, MI Monroe, MI Oakland, MI St. Clair, MI Wayne, MI 2180 Dothan, AL 0.7943 Dale, AL Houston, AL 2190 Dover, DE 1.0078 Kent, DE 2200 Dubuque, IA 0.8746 Dubuque, IA 2240 Duluth-Superior, MN-WI 1.0032 St. Louis, MN Douglas, WI 2281 Dutchess County, NY 1.0249 Dutchess, NY 2290 Eau Claire, WI 0.8790 Chippewa, WI Eau Claire, WI 2320 El Paso, TX 0.9346 El Paso, TX 2330 Elkhart-Goshen, IN 0.9145 Elkhart, IN 2335 Elmira, NY 0.8546 Chemung, NY 2340 Enid, OK 0.8610 Garfield, OK 2360 Erie, PA 0.8985 Erie, PA 2400 Eugene-Springfield, OR 1.0965 Lane, OR 2440 Evansville-Henderson, IN-KY 0.8173 Posey, IN Vanderburgh, IN Warrick, IN Henderson, KY 2520 Fargo-Moorhead, ND-MN 0.8749 Clay, MN Cass, ND 2560 Fayetteville, NC 0.8655 Cumberland, NC 2580 Fayetteville-Springdale-Rogers, AR 0.7910 Benton, AR Washington, AR 2620 Flagstaff, AZ-UT 1.0686 Coconino, AZ Kane, UT 2640 Flint, MI 1.1205 Genesee, MI 2650 Florence, AL 0.7616 Colbert, AL Lauderdale, AL 2655 Florence, SC 0.8777 Florence, SC 2670 Fort Collins-Loveland, CO 1.0647 Larimer, CO 2680 Ft. Lauderdale, FL 1.0121 Broward, FL 2700 Fort Myers-Cape Coral, FL 0.9247 Lee, FL 2710 Fort Pierce-Port St. Lucie, FL 0.9538 Martin, FL St. Lucie, FL 2720 Fort Smith, AR-OK 0.8052 Crawford, AR Sebastian, AR Sequoyah, OK 2750 Fort Walton Beach, FL 0.9607 Okaloosa, FL 2760 Fort Wayne, IN 0.8665 Adams, IN Allen, IN De Kalb, IN Huntington, IN Wells, IN Whitley, IN 2800 Fort Worth-Arlington, TX 0.9527 Hood, TX Johnson, TX Parker, TX Tarrant, TX 2840 Fresno, CA 1.0104 Fresno, CA Madera, CA 2880 Gadsden, AL 0.8423 Etowah, AL 2900 Gainesville, FL 1.0074 Alachua, FL 2920 Galveston-Texas City, TX 0.9918 Galveston, TX 2960 Gary, IN 0.9454 Lake, IN Porter, IN 2975 Glens Falls, NY 0.8361 Warren, NY Washington, NY 2980 Goldsboro, NC 0.8423 Wayne, NC 2985 Grand Forks, ND-MN 0.8816 Polk, MN Grand Forks, ND 2995 Grand Junction, CO 0.9109 Mesa, CO. 3000 Grand Rapids-Muskegon-Holland, MI 1.0248 Allegan, MI Kent, MI Muskegon, MI Ottawa, MI 3040 Great Falls, MT 0.9065 Cascade, MT 3060 Greeley, CO 0.9814 Weld, CO 3080 Green Bay, WI 0.9225 Brown, WI 3120 Greensboro-Winston-Salem-High Point, NC 0.9131 Alamance, NC Davidson, NC Davie, NC Forsyth, NC Guilford, NC Randolph, NC Stokes, NC Yadkin, NC 3150 Greenville, NC 0.9384 Pitt, NC 3160 Greenville-Spartanburg-Anderson, SC 0.9003 Anderson, SC Cherokee, SC Greenville, SC Pickens, SC Spartanburg, SC 3180 Hagerstown, MD 0.9409 Washington, MD 3200 Hamilton-Middletown, OH 0.9061 Butler, OH 3240 Harrisburg-Lebanon-Carlisle, PA 0.9386 Cumberland, PA Dauphin, PA Lebanon, PA Perry, PA 3283 Hartford, CT 1.1373 Hartford, CT Litchfield, CT Middlesex, CT Tolland, CT 3285 Hattiesburg, MS 0.7490 Forrest, MS Lamar, MS 3290 Hickory-Morganton-Lenoir, NC 0.9008 Alexander, NC Burke, NC Caldwell, NC Catawba, NC 3320 Honolulu, HI 1.1863 Honolulu, HI 3350 Houma, LA 0.8086 Lafourche, LA Terrebonne, LA 3360 Houston, TX 0.9732 Chambers, TX Fort Bend, TX Harris, TX Liberty, TX Montgomery, TX Waller, TX 3400 Huntington-Ashland, WV-KY-OH 0.9876 Boyd, KY Carter, KY Greenup, KY Lawrence, OH Cabell, WV Wayne, WV 3440 Huntsville, AL 0.8932 Limestone, AL Madison, AL 3480 Indianapolis, IN 0.9787 Boone, IN Hamilton, IN Hancock, IN Hendricks, IN Johnson, IN Madison, IN Marion, IN Morgan, IN Shelby, IN 3500 Iowa City, IA 0.9657 Johnson, IA 3520 Jackson, MI 0.9134 Jackson, MI 3560 Jackson, MS 0.8812 Hinds, MS Madison, MS Rankin, MS 3580 Jackson, TN 0.8796 Chester, TN Madison, TN 3600 Jacksonville, FL 0.9208 Clay, FL Duval, FL Nassau, FL St. Johns, FL 3605 Jacksonville, NC 0.7777 Onslow, NC 3610 Jamestown, NY 0.7818 Chautaqua, NY 3620 Janesville-Beloit, WI 0.9585 Rock, WI 3640 Jersey City, NJ 1.1502 Hudson, NJ 3660 Johnson City-Kingsport-Bristol, TN-VA 0.8272 Carter, TN Hawkins, TN Sullivan, TN Unicoi, TN Washington, TN Bristol City, VA Scott, VA Washington, VA 3680 Johnstown, PA 0.8846 Cambria, PA Somerset, PA 3700 Jonesboro, AR 0.7832 Craighead, AR 3710 Joplin, MO 0.8148 Jasper, MO Newton, MO 3720 Kalamazoo-Battlecreek, MI 1.0453 Calhoun, MI Kalamazoo, MI Van Buren, MI 3740 Kankakee, IL 0.9902 Kankakee, IL 3760 Kansas City, KS-MO 0.9498 Johnson, KS Leavenworth, KS Miami, KS Wyandotte, KS Cass, MO Clay, MO Clinton, MO Jackson, MO Lafayette, MO Platte, MO Ray, MO 3800 Kenosha, WI 0.9611 Kenosha, WI 3810 Killeen-Temple, TX 1.0119 Bell, TX Coryell, TX 3840 Knoxville, TN 0.8340 Anderson, TN Blount, TN Knox, TN Loudon, TN Sevier, TN Union, TN 3850 Kokomo, IN 0.9518 Howard, IN Tipton, IN 3870 La Crosse, WI-MN 0.9211 Houston, MN La Crosse, WI 3880 Lafayette, LA 0.8490 Acadia, LA Lafayette, LA St. Landry, LA St. Martin, LA 3920 Lafayette, IN 0.8834 Clinton, IN Tippecanoe, IN 3960 Lake Charles, LA 0.7399 Calcasieu, LA 3980 Lakeland-Winter Haven, FL 0.9239 Polk, FL 4000 Lancaster, PA 0.9259 Lancaster, PA 4040 Lansing-East Lansing, MI 0.9934 Clinton, MI Eaton, MI Ingham, MI 4080 Laredo, TX 0.8168 Webb, TX 4100 Las Cruces, NM 0.8658 Dona Ana, NM 4120 Las Vegas, NV-AZ 1.0796 Mohave, AZ Clark, NV Nye, NV 4150 Lawrence, KS 0.8190 Douglas, KS 4200 Lawton, OK 0.8996 Comanche, OK 4243 Lewiston-Auburn, ME 0.9036 Androscoggin, ME 4280 Lexington, KY 0.8866 Bourbon, KY Clark, KY Fayette, KY Jessamine, KY Madison, KY Scott, KY Woodford, KY 4320 Lima, OH 0.9320 Allen, OH Auglaize, OH 4360 Lincoln, NE 0.9626 Lancaster, NE 4400 Little Rock-North Little Rock, AR 0.8906 Faulkner, AR Lonoke, AR Pulaski, AR Saline, AR 4420 Longview-Marshall, TX 0.8922 Gregg, TX Harrison, TX Upshur, TX 4480 Los Angeles-Long Beach, CA 1.1996 Los Angeles, CA 4520 Louisville, KY-IN 0.9350 Clark, IN Floyd, IN Harrison, IN Scott, IN Bullitt, KY Jefferson, KY Oldham, KY 4600 Lubbock, TX 0.8838 Lubbock, TX 4640 Lynchburg, VA 0.8867 Amherst, VA Bedford City, VA Bedford, VA Campbell, VA Lynchburg City, VA 4680 Macon, GA 0.8974 Bibb, GA Houston, GA Jones, GA Peach, GA Twiggs, GA 4720 Madison, WI 1.0271 Dane, WI 4800 Mansfield, OH 0.8690 Crawford, OH Richland, OH 4840 Mayaguez, PR 0.4589 Anasco, PR Cabo Rojo, PR Hormigueros, PR Mayaguez, PR Sabana Grande, PR San German, PR 4880 McAllen-Edinburg-Mission, TX 0.8566 Hidalgo, TX 4890 Medford-Ashland, OR 1.0344 Jackson, OR 4900 Melbourne-Titusville-Palm Bay, FL 0.9688 Brevard, Fl 4920 Memphis, TN-AR-MS 0.8723 Crittenden, AR De Soto, MS Fayette, TN Shelby, TN Tipton, TN 4940 Merced, CA 0.9646 Merced, CA 5000 Miami, FL 1.0059 Dade, FL 5015 Middlesex-Somerset-Hunterdon, NJ 1.1075 Hunterdon, NJ Middlesex, NJ Somerset, NJ 5080 Milwaukee-Waukesha, WI 0.9767 Milwaukee, WI Ozaukee, WI Washington, WI Waukesha, WI 5120 Minneapolis-St Paul, MN-WI 1.1017 Anoka, MN Carver, MN Chisago, MN Dakota, MN Hennepin, MN Isanti, MN Ramsey, MN Scott, MN Sherburne, MN Washington, MN Wright, MN Pierce, WI St. Croix, WI 5140 Missoula, MT 0.9274 Missoula, MT 5160 Mobile, AL 0.8163 Baldwin, AL Mobile, AL 5170 Modesto, CA 1.0396 Stanislaus, CA 5190 Monmouth-Ocean, NJ 1.1278 Monmouth, NJ Ocean, NJ 5200 Monroe, LA 0.8396 Ouachita, LA 5240 Montgomery, AL 0.7653 Autauga, AL Elmore, AL Montgomery, AL 5280 Muncie, IN 1.0969 Delaware, IN 5330 Myrtle Beach, SC 0.8440 Horry, SC 5345 Naples, FL 0.9661 Collier, FL 5360 Nashville, TN 0.9490 Cheatham, TN Davidson, TN Dickson, TN Robertson, TN Rutherford TN Sumner, TN Williamson, TN Wilson, TN 5380 Nassau-Suffolk, NY 1.3932 Nassau, NY Suffolk, NY 5483 New Haven-Bridgeport-Stamford-Waterbury-Danbury, CT 1.2297 Fairfield, CT New Haven, CT 5523 New London-Norwich, CT 1.2063 New London, CT 5560 New Orleans, LA 0.9295 Jefferson, LA Orleans, LA Plaquemines, LA St. Bernard, LA St. Charles, LA St. James, LA St. John The Baptist, LA St. Tammany, LA 5600 New York, NY 1.4651 Bronx, NY Kings, NY New York, NY Putnam, NY Queens, NY Richmond, NY Rockland, NY Westchester, NY 5640 Newark, NJ 1.1837 Essex, NJ Morris, NJ Sussex, NJ Union, NJ Warren, NJ 5660 Newburgh, NY-PA 1.0847 Orange, NY Pike, PA 5720 Norfolk-Virginia Beach-Newport News, VA-NC 0.8412 Currituck, NC Chesapeake City, VA Gloucester, VA Hampton City, VA Isle of Wight, VA James City, VA Mathews, VA Newport News City, VA Norfolk City, VA Poquoson City, VA Portsmouth City, VA Suffolk City, VA Virginia Beach City VA Williamsburg City, VA York, VA 5775 Oakland, CA 1.4983 Alameda, CA Contra Costa, CA 5790 Ocala, FL 0.9243 Marion, FL 5800 Odessa-Midland, TX 0.9205 Ector, TX Midland, TX 5880 Oklahoma City, OK 0.8822 Canadian, OK Cleveland, OK Logan, OK McClain, OK Oklahoma, OK Pottawatomie, OK 5910 Olympia, WA 1.0677 Thurston, WA 5920 Omaha, NE-IA 0.9572 Pottawattamie, IA Cass, NE Douglas, NE Sarpy, NE Washington, NE 5945 Orange County, CA 1.1467 Orange, CA 5960 Orlando, FL 0.9610 Lake, FL Orange, FL Osceola, FL Seminole, FL 5990 Owensboro, KY 0.8159 Daviess, KY 6015 Panama City, FL 0.9010 Bay, FL 6020 Parkersburg-Marietta, WV-OH 0.8274 Washington, OH Wood, WV 6080 Pensacola, FL 0.8176 Escambia, FL Santa Rosa, FL 6120 Peoria-Pekin, IL 0.8645 Peoria, IL Tazewell, IL Woodford, IL 6160 Philadelphia, PA-NJ 1.0937 Burlington, NJ Camden, NJ Gloucester, NJ Salem, NJ Bucks, PA Chester, PA Delaware, PA Montgomery, PA Philadelphia, PA 6200 Phoenix-Mesa, AZ 0.9669 Maricopa, AZ Pinal, AZ 6240 Pine Bluff, AR 0.7791 Jefferson, AR 6280 Pittsburgh, PA 0.9741 Allegheny, PA Beaver, PA Butler, PA Fayette, PA Washington, PA Westmoreland, PA 6323 Pittsfield, MA 1.0288 Berkshire, MA 6340 Pocatello, ID 0.9076 Bannock, ID 6360 Ponce, PR 0.5006 Guayanilla, PR Juana Diaz, PR Penuelas, PR Ponce, PR Villalba, PR Yauco, PR 6403 Portland, ME 0.9748 Cumberland, ME Sagadahoc, ME York, ME 6440 Portland-Vancouver, OR-WA 1.0910 Clackamas, OR Columbia, OR Multnomah, OR Washington, OR Yamhill, OR Clark, WA 6483 Providence-Warwick-Pawtucket, RI 1.0864 Bristol, RI Kent, RI Newport, RI Providence, RI Washington, RI 6520 Provo-Orem, UT 1.0029 Utah, UT 6560 Pueblo, CO 0.8815 Pueblo, CO 6580 Punta Gorda, FL 0.9613 Charlotte, FL 6600 Racine, WI 0.9246 Racine, WI 6640 Raleigh-Durham-Chapel Hill, NC 0.9646 Chatham, NC Durham, NC Franklin, NC Johnston, NC Orange, NC Wake, NC 6660 Rapid City, SD 0.8865 Pennington, SD 6680 Reading, PA 0.9152 Berks, PA 6690 Redding, CA 1.1664 Shasta, CA 6720 Reno, NV 1.0550 Washoe, NV 6740 Richland-Kennewick-Pasco, WA 1.1460 Benton, WA Franklin, WA 6760 Richmond-Petersburg, VA 0.9617 Charles City County, VA Chesterfield, VA Colonial Heights City, VA Dinwiddie, VA Goochland, VA Hanover, VA Henrico, VA Hopewell City, VA New Kent, VA Petersburg City, VA Powhatan, VA Prince George, VA Richmond City, VA 6780 Riverside-San Bernardino, CA 1.1239 Riverside, CA San Bernardino, CA 6800 Roanoke, VA 0.8750 Botetourt, VA Roanoke, VA Roanoke City, VA Salem City, VA 6820 Rochester, MN 1.1315 Olmsted, MN 6840 Rochester, NY 0.9182 Genesee, NY Livingston, NY Monroe, NY Ontario, NY Orleans, NY Wayne, NY 6880 Rockford, IL 0.8819 Boone, IL Ogle, IL Winnebago, IL 6895 Rocky Mount, NC 0.8849 Edgecombe, NC Nash, NC 6920 Sacramento, CA 1.1950 El Dorado, CA Placer, CA Sacramento, CA 6960 Saginaw-Bay City-Midland, MI 0.9575 Bay, MI Midland, MI Saginaw, MI 6980 St. Cloud, MN 1.0016 Benton, MN Stearns, MN 7000 St. Joseph, MO 0.9071 Andrews, MO Buchanan, MO 7040 St. Louis, MO-IL 0.9049 Clinton, IL Jersey, IL Madison, IL Monroe, IL St. Clair, IL Franklin, MO Jefferson, MO Lincoln, MO St. Charles, MO St. Louis, MO St. Louis City, MO Warren, MO Sullivan City, MO 7080 Salem, OR 1.0189 Marion, OR Polk, OR 7120 Salinas, CA 1.4502 Monterey, CA 7160 Salt Lake City-Ogden, UT 0.9807 Davis, UT Salt Lake, UT Weber, UT 7200 San Angelo, TX 0.8083 Tom Green, TX 7240 San Antonio, TX 0.8580 Bexar, TX Comal, TX Guadalupe, TX Wilson, TX 7320 San Diego, CA 1.1784 San Diego, CA 7360 San Francisco, CA 1.4156 Marin, CA San Francisco, CA San Mateo, CA 7400 San Jose, CA 1.3652 Santa Clara, CA 7440 San Juan-Bayamon, PR 0.4690 Aguas Buenas, PR Barceloneta, PR Bayamon, PR Canovanas, PR Carolina, PR Catano, PR Ceiba, PR Comerio, PR Corozal, PR Dorado, PR Fajardo, PR Florida, PR Guaynabo, PR Humacao, PR Juncos, PR Los Piedras, PR Loiza, PR Luguillo, PR Manati, PR Morovis, PR Naguabo, PR Naranjito, PR Rio Grande, PR San Juan, PR Toa Alta, PR Toa Baja, PR Trujillo Alto, PR Vega Alta, PR Vega Baja, PR Yabucoa, PR 7460 San Luis Obispo-Atascadero-Paso Robles, CA 1.0673 San Luis Obispo, CA 7480 Santa Barbara-Santa Maria-Lompoc, CA 1.0597 Santa Barbara, CA 7485 Santa Cruz-Watsonville, CA 1.4040 Santa Cruz, CA 7490 Santa Fe, NM 1.0537 Los Alamos, NM Santa Fe, NM 7500 Santa Rosa, CA 1.2646 Sonoma, CA 7510 Sarasota-Bradenton, FL 0.9809 Manatee, FL Sarasota, FL 7520 Savannah, GA 0.9697 Bryan, GA Chatham, GA Effingham, GA 7560 Scranton—Wilkes-Barre—Hazleton, PA 0.8421 Columbia, PA Lackawanna, PA Luzerne, PA Wyoming, PA 7600 Seattle-Bellevue-Everett, WA 1.0996 Island, WA King, WA Snohomish, WA 7610 Sharon, PA 0.7928 Mercer, PA 7620 Sheboygan, WI 0.8379 Sheboygan, WI 7640 Sherman-Denison, TX 0.8694 Grayson, TX 7680 Shreveport-Bossier City, LA 0.8750 Bossier, LA Caddo, LA Webster, LA 7720 Sioux City, IA-NE 0.8473 Woodbury, IA Dakota, NE 7760 Sioux Falls, SD 0.8790 Lincoln, SD Minnehaha, SD 7800 South Bend, IN 1.0000 St. Joseph, IN 7840 Spokane, WA 1.0513 Spokane, WA 7880 Springfield, IL 0.8685 Menard, IL Sangamon, IL 7920 Springfield, MO 0.8488 Christian, MO Greene, MO Webster, MO 8003 Springfield, MA 1.0637 Hampden, MA Hampshire, MA 8050 State College, PA 0.9038 Centre, PA 8080 Steubenville-Weirton, OH-WV 0.8548 Jefferson, OH Brooke, WV Hancock, WV 8120 Stockton-Lodi, CA 1.0629 San Joaquin, CA 8140 Sumter, SC 0.8271 Sumter, SC 8160 Syracuse, NY 0.9549 Cayuga, NY Madison, NY Onondaga, NY Oswego, NY 8200 Tacoma, WA 1.1564 Pierce, WA 8240 Tallahassee, FL 0.8545 Gadsden, FL Leon, FL 8280 Tampa-St. Petersburg-Clearwater, FL 0.8982 Hernando, FL Hillsborough, FL Pasco, FL Pinellas, FL 8320 Terre Haute, IN 0.8304 Clay, IN Vermillion, IN Vigo, IN 8360 Texarkana, AR-Texarkana, TX 0.8363 Miller, AR Bowie, TX 8400 Toledo, OH 0.9832 Fulton, OH Lucas, OH Wood, OH 8440 Topeka, KS 0.9117 Shawnee, KS 8480 Trenton, NJ 1.0137 Mercer, NJ 8520 Tucson, AZ 0.8794 Pima, AZ 8560 Tulsa, OK 0.8454 Creek, OK Osage, OK Rogers, OK Tulsa, OK Wagoner, OK 8600 Tuscaloosa, AL 0.8064 Tuscaloosa, AL 8640 Tyler, TX 0.9404 Smith, TX 8680 Utica-Rome, NY 0.8560 Herkimer, NY Oneida, NY 8720 Vallejo-Fairfield-Napa, CA 1.2847 Napa, CA Solano, CA 8735 Ventura, CA 1.1030 Ventura, CA 8750 Victoria, TX 0.8154 Victoria, TX 8760 Vineland-Millville-Bridgeton, NJ 1.0501 Cumberland, NJ 8780 Visalia-Tulare-Porterville, CA 0.9551 Tulare, CA 8800 Waco, TX 0.8314 McLennan, TX 8840 Washington, DC-MD-VA-WV 1.0755 District of Columbia, DC Calvert, MD Charles, MD Frederick, MD Montgomery, MD Prince Georges, MD Alexandria City, VA Arlington, VA Clarke, VA Culpepper, VA Fairfax, VA Fairfax City, VA Falls Church City, VA Fauquier, VA Fredericksburg City, VA King George, VA Loudoun, VA Manassas City, VA Manassas Park City, VA Prince William, VA Spotsylvania, VA Stafford, VA Warren, VA Berkeley, WV Jefferson, WV 8920 Waterloo-Cedar Falls, IA 0.8404 Black Hawk, IA 8940 Wausau, WI 0.9418 Marathon, WI 8960 West Palm Beach-Boca Raton, FL 0.9682 Palm Beach, FL 9000 Wheeling, OH-WV 0.7733 Belmont, OH Marshall, WV Ohio, WV 9040 Wichita, KS 0.9544 Butler, KS Harvey, KS Sedgwick, KS 9080 Wichita Falls, TX 0.7668 Archer, TX Wichita, TX 9140 Williamsport, PA 0.8392 Lycoming, PA 9160 Wilmington-Newark, DE-MD 1.1191 New Castle, DE Cecil, MD 9200 Wilmington, NC 0.9402 New Hanover, NC Brunswick, NC 9260 Yakima, WA 0.9907 Yakima, WA 9270 Yolo, CA 1.0199 Yolo, CA 9280 York, PA 0.9264 York, PA 9320 Youngstown-Warren, OH 0.9543 Columbiana, OH Mahoning, OH Trumbull, OH 9340 Yuba City, CA 1.0706 Sutter, CA Yuba, CA 9360 Yuma, AZ 0.9529 Yuma, AZ Table 8.—Wage Index for Rural Areas Nonurban area Wage index Alabama 0.7489 Alaska 1.2392 Arizona 0.8317 Arkansas 0.7445 California 0.9861 Colorado 0.8968 Connecticut 1.1715 Delaware 0.9074 Florida 0.8919 Georgia 0.8329 Guam 0.9611 Hawaii 1.1059 Idaho 0.8678 Illinois 0.8160 Indiana 0.8602 Iowa 0.8030 Kansas 0.7605 Kentucky 0.7931 Louisiana 0.7668 Maine 0.8766 Maryland 0.8651 Massachusetts 1.1204 Michigan 0.8987 Minnesota 0.8881 Mississippi 0.7491 Missouri 0.7698 Montana 0.8688 Nebraska 0.8109 Nevada 0.9232 New Hampshire 0.9845 New Jersey 1 New Mexico 0.8497 New York 0.8499 North Carolina 0.8445 North Dakota 0.7716 Ohio 0.8670 Oklahoma 0.7491 Oregon 1.0132 Pennsylvania 0.8578 Puerto Rico 0.4264 Rhode Island 1 South Carolina 0.8370 South Dakota 0.7570 Tennessee 0.7838 Texas 0.7502 Utah 0.9037 Vermont 0.9274 Virginia 0.8189 Virgin Islands 0.6306 Washington 1.0434 West Virginia 0.8231 Wisconsin 0.8880 Wyoming 0.8817 1 All counties within the State are classified urban. D. Updates to the Federal Rates In accordance with section 1888(e)(4)(E) of the Act, the proposed payment rates listed here have been updated by the SNF market basket minus 1 percentage point, which equals 2.161 percent. For each succeeding FY, we will publish the rates in the Federal Register before August 1 of the year preceding the affected Federal FY. For the current FY (FY 2001), and for FY 2002, section 1888(e)(4)(E)(ii) of the Act requires the rates to be increased by a factor equal to the SNF market index change minus 1 percentage point. For subsequent FYs, this section requires the rates to be increased by the applicable SNF market basket index increase. E. Relationship of RUG-III Classification System to Existing Skilled Nursing Facility Level-of-Care Criteria Regulations at § 413.345 provide that the information included in each update of the Federal payment rates in the Federal Register will include the designation of those specific RUGs under the classification system that represent the required SNF level of care, as provided in § 409.30. In the proposed rule (65 FR 19228), we proposed to designate the following RUG-III classifications for this purpose: All groups within the proposed new Rehabilitation and Extensive category; all groups within the Ultra High Rehabilitation category; all groups within the Very High Rehabilitation category; all groups within the Medium Rehabilitation category; all groups within the Low Rehabilitation category; all groups within the Extensive Services category; and, all groups within the Clinically Complex category. Comment: A few commenters raised issues regarding specific aspects of the process for making SNF level of care determinations. One commenter recommended that the level of care presumption in existing regulations at § 409.30 (which extends through the assessment reference date (ARD) for the initial 5-day, Medicare-required assessment) be expanded to extend through the ARD for the 30-day assessment. This commenter also favored revising the regulations to allow for using a beneficiary's assignment to one of the designated RUG-III groups in lieu of following the physician certification and recertification procedures described in § 424.20. Another commenter suggested that requiring individual level of care determinations for those beneficiaries who are assigned to one of the “lower 18” RUG-III groups (that is, to a RUG-III group that is not designated for purposes of the administrative presumption) creates a barrier to care for beneficiaries with dementing diseases. However, by far the majority of comments in this area observed that the High Rehabilitation and Special Care categories, which had been included in the most recent update notice (64 FR 41696, July 30, 1999), were missing from the list in the proposed rule, and urged their restoration. Response: We believe that the suggestion for expanding the administrative presumption's timeframe to encompass the 30-day assessment is inconsistent with the underlying rationale for this presumption. In the preamble to the final rule that was published on July 30, 1999 (64 FR 41666-67), we noted that the Medicare SNF benefit is a “posthospital” benefit, and * * * that SNF residents tend to be relatively unstable and require fairly intensive skilled care during the period immediately following admission from the prior hospitalization, but that this tendency typically diminishes as they get further on in the SNF stay * * *. [This] means, in effect, that the basis for making any type of presumption with regard to coverage would tend to become progressively less conclusive as a resident moves farther into the SNF stay, and would be at its most conclusive at the very outset of the stay, during the period immediately following the resident's admission from the prior hospitalization. Further, the requirement for an initial physician certification and periodic recertification as to level of care is mandated by the law itself (at section 1814(a)(2)(B) of the Act) and, thus, cannot be eliminated administratively. We also note that the implementing regulations at § 424.20(a)(1)(ii) already allow, at the option of the physician, for the required initial certification to be completed simply by confirming that the beneficiary has been correctly assigned to one of the designated RUG-III groups, as provided in § 409.30. In the preamble to the interim final rule that was published on May 12, 1998 (63 FR 26283), we provided that beneficiaries assigned to one of the upper 26 RUG-III groups would be automatically classified as meeting the SNF level of care definition under the administrative presumption, “* * * while those beneficiaries assigned to any of the lower 18 groups are not automatically classified as either meeting or not meeting the definition, but instead receive an individual level of care determination using the existing administrative criteria.” This presumption recognized the strong likelihood that beneficiaries assigned to one of the upper 26 groups during the immediate posthospital period would actually require a covered level of care, which would be significantly less likely for those beneficiaries assigned to one of the lower 18 groups. However, we do not share the view of the commenter who characterized as a barrier to coverage the policy of providing for an individual level of care determination when a beneficiary is assigned to one of the lower 18 groups. To the contrary, we chose this particular approach—rather than a policy of summarily deeming all of the lower 18 groups to be noncovered—precisely in order to ensure coverage under the SNF PPS for individual beneficiaries within those groups who would have met the previous administrative criteria for determining a SNF level of care. This policy also helps ensure that any beneficiary who does, in fact, require a covered level of care will actually be able to receive coverage, without regard to the beneficiary's particular diagnosis. Finally, we note that the omission of the High Rehabilitation and Special Care categories from the designation list that appeared in the proposed rule was inadvertent, and we concur with the recommendation of the commenters who urged that these categories be restored to the list. Further, as discussed elsewhere in this final rule, we have decided not to adopt the case-mix refinements (including the creation of a new Rehabilitation and Extensive category) that we had previously proposed. Accordingly, we hereby designate the upper 26 RUG-III groups for purposes of the administrative presumption described in § 409.30, as follows: all groups within the Ultra High Rehabilitation category; all groups within the Very High Rehabilitation category; all groups within the High Rehabilitation category; all groups within the Medium Rehabilitation category; all groups within the Low Rehabilitation category; all groups within the Extensive Services category; all groups within the Special Care category; and, all groups within the Clinically Complex category. F. Three-Year Transition Period Under sections 1888(e)(1) and (2) of the Act, during a facility's first three cost reporting periods that begin on or after July 1, 1998 (that is, the transition period), the facility's PPS rate will be equal to the sum of a percentage of an adjusted facility-specific per diem rate and a percentage of the adjusted Federal per diem rate. After the transition period, the PPS rate will equal the adjusted Federal per diem rate. The transition period payment method will not apply to SNFs that first received Medicare payments (interim or otherwise) on or after October 1, 1995 under present or previous ownership, or to those facilities choosing to bypass the transition in accordance with section 102 of the BBRA; these facilities will be paid based on 100 percent of the Federal rate. The facility-specific per diem rate is the sum of the facility's total allowable Part A Medicare costs and an estimate of the amounts that would be payable under Part B for covered SNF services for cost reporting periods beginning in FY 1995 (base year). The base year cost report used to compute the facility-specific per diem rate in the transition period may be settled (either tentative or final) or as-submitted for Medicare payment purposes. Under section 1888(e)(3) of the Act, any adjustments to the base year cost report made as a result of settlement or other action by the fiscal intermediary, including cost limit exceptions and exemptions, or results of an appeal, will result in a revision to the facility-specific per diem rate. The instructions for calculating the facility-specific per diem rate are described in detail in the May 12, 1998 interim final rule. In order to implement section 104 of the BBRA, for providers that received payment under the RUG-III demonstration during a cost reporting period that began in calendar year 1997, we will determine their facility-specific per diem rate using the methodology described below. It is possible that some providers participated in the demonstration but did not have a cost reporting period that began in calendar year 1997. For those providers, we will determine their facility-specific per diem rate by using the calculations outlined in the May 12, 1998 Federal Register interim final rule (63 FR 26251, section III. (A)(1)(a), (b), or (c)). As with the facility-specific per diem applicable to other providers, the allowable costs will be subject to change based on the settlement of the cost report used to determine the total payment under the demonstration. In addition, we derive a special market basket inflation factor, which is 1.105788, to adjust the 1997 costs to the midpoint of the rate setting period (October 1, 2000 to September 30, 2001.) Step 1 —Determine the aggregate payment during the cost reporting period that began in calendar year 1997—RUG-III payment plus routine capital costs plus ancillary costs (other than occupational therapy, physical therapy, and speech pathology). Step 2 —Divide the amount in Step 1 by the applicable total inpatient days for the cost reporting period. Step 3 —Adjust the amount in Step 2 by 1.105788 (inflation factor). Step 4 —Add the amount determined in Step 3 to the appropriate Part B add-on amount determined according to Program Memorandum transmittal no. A-99-53 (December 1999). The amount in Step 4 is the facility-specific rate that is applicable for the facility's first cost reporting period beginning on or after October 1, 2000. 1. Computation of the Skilled Nursing Facility Prospective Payment System Rate During the Transition For the first three cost reporting periods beginning on or after July 1, 1998 (the transition period), an SNF's payment under the PPS is the sum of a percentage of the facility-specific per diem rate and a percentage of the adjusted Federal per diem rate. Under section 1888(e)(2)(C) of the Act, for the first cost reporting period in the transition period, the SNF payment will be the sum of 75 percent of the facility-specific per diem rate and 25 percent of the Federal per diem rate. For the second cost reporting period, the SNF payment will be the sum of 50 percent of the facility-specific per diem rate and 50 percent of the Federal per diem rate. For the third cost reporting period, the SNF payment will be the sum of 25 percent of the facility-specific per diem rate and 75 percent of the Federal per diem rate. For all subsequent cost reporting periods beginning after the transition period, the SNF payment will be equal to 100 percent of the Federal per diem rate. An example is given below computing the SNF PPS rate and SNF payment. Example of computation of adjusted PPS rates and SNF payment: Using the XYZ SNF described in Table 9, the following shows the adjustments made to the facility-specific per diem rate and the Federal per diem rate to compute the provider's actual per diem PPS payment in the transition period. XYZ's 12-month cost reporting period begins October 1, 2000. (This is the provider's third cost reporting period under the transition.) Step 1 Compute: Facility-specific per diem rate $570.00 Market Basket Adjustment (Table 10.B) × 1.14457 Adjusted facility-specific rate $652.40 Step 2 Compute Federal per diem rate: Table 9.—SNF XYZ From Above Is Located in State College, PA With a Wage Index of 0.9038 RUG group Labor portion * Wage index Adjusted labor Nonlabor portion * Adjusted rate Percent adjustment Medicare Days Payment RVC $240.71 0.9038 $217.55 $68.41 $285.96 ** $297.40 50 $14,870 SSC 154.95 0.9038 140.04 44.03 184.07 *** 228.25 50 11,413 Total 100 26,283 * From Table 5. ** Reflects a 4 percent adjustment. *** Reflects a 24 percent adjustment. Step 3 Apply transition period percentages: Facility-specific per diem rate $652.40 × 100 days = $65,240 Times transition percentage (25 percent) .25 Actual facility-specific PPS payment $16,310 Federal PPS payment $26,283 Times transition percentage (75 percent) .75 Actual Federal PPS payment $19,712 Step 4 Compute total PPS payment: XYZ's total PPS payment ($16,310 + $19,712) $36,022 G. The Skilled Nursing Facility Market Basket Index Section 1888(e)(5)(A) of the Act requires the Secretary to establish an SNF market basket index (input price index) that reflects changes over time in the prices of an appropriate mix of goods and services included in the SNF PPS. The proposed rule incorporated the latest estimates of the SNF market basket index at that time. This rule incorporates updated projections based on the latest available projections as of this point in time. 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. In the May 12, 1998 Federal Register , we included a complete discussion on rebasing the SNF market basket to FY 1992, and revising the index to include capital and ancillary costs. There are 21 separate cost categories and respective price proxies. These cost categories were illustrated in Tables 4.A, 4.B, and Appendix A, found in the May 12, 1998 Federal Register . Each year we calculate a revised labor-related share based on the relative importance of labor-related cost categories in the input price index. Table 10.A summarizes the updated labor-related share for FY 2001. Table 10.A.—FY 2001 Labor-Related Share Cost category FY 2000 relative importance* FY 2001 relative importance Wages and Salaries 56.647 56.734 Employee Benefits 12.321 12.654 Nonmedical Professional Fees 1.959 1.957 Labor-intensive Services 3.738 3.719 Capital-related 2.880 2.807 Total 77.545 77.870 The forecasted rates of growth used to compute the projected SNF market basket percentages, described in the next section, are shown in Table 10.B, and the 12-month cost reporting period facility specific rate update factors are shown in Table 10C. Table 10.B.—Skilled Nursing Facility Total Cost Market Basket, Forecasted Change, 1997-2002 Fiscal years beginning October 1 Skilled nursing facility total cost market basket October 1996, FY 1997 2.4 October 1997, FY 1998 2.7 October 1998, FY 1999 3.0 October 1999, FY 2000 3.6 October 2000, FY 2001 3.2 October 2001, FY 2002 3.2 Forecasted Average: 2000-2002 3.3 Source: Standard & Poor's DRI HCC, 2nd QTR 2000; @USSIM/TRENDLONG0500@ CISSIM/TRENDLONG0500. Released by HCFA, OACT, National Health Statistics Group. Use of the Skilled Nursing Facility 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, described in the previous section, from the midpoint of the prior FY (or period) to the midpoint of the current FY (or other period) involved. The facility-specific portion and Federal portion of the SNF PPS rates addressed in the proposed rule were based on cost reporting periods beginning in the base year, Federal FY 1995. For the Federal rates, the percentage increases in the SNF market basket index will be used to compute the update factors occurring between the midpoint of FY 2000 and the midpoint of FY 2001. We used the Standard & Poor's DRI CC, 2nd quarter 2000 historical and forecasted percentage increases of the revised and rebased SNF market basket index for routine, ancillary, and capital-related expenses, to compute the update factors. Finally, we used the update factors to adjust the base year costs for computing the facility-specific portion and Federal portion of the SNF PPS rates. Comment : A number of commenters expressed concern with the SNF market basket. The commenters asserted that the market basket index used for updating the PPS rates does not reflect Medicare SNF care costs accurately. They added that we have the authority to address this issue through modifications to the market basket index. The comments included: trending forward the 1995 data to 1997 significantly understates the actual increase observed over this period; the market basket index is based on 1992 data that do not reflect the dynamic changes in the health care system that occurred between 1992 and 1997; the market basket labor inputs significantly understate the actual increases in labor costs for Medicare SNFs; and the one percentage point reduction to the market basket should be restored. Response : A number of the provisions that were the subjects of the commenters' concerns are specifically mandated by the law itself. Section 1888(e)(4)(A) of the Act requires the use of 1995 costs as a base. Section 1888(e)(5)(A) of the Act specifically provides for the establishment of an SNF market basket, while section 1888(e)(4)(E) of the Act requires that the SNF PPS rates be updated annually using that index. Furthermore, for the current FY 2001, and for FY 2002, section 1888(e)(4)(E)(ii)(II) of the Act requires that the rates be increased by a factor equal to the SNF market basket index change minus 1 percentage point. For subsequent fiscal years, section 1888(e)(4)(E)(i)(III) of the Act requires the rates to be increased by the applicable SNF market basket index increase. The statute at section 1888(e)(5)(A) specifies that the market basket should reflect “changes over time in the prices of an appropriate mix of goods and services included in covered SNF services”. The SNF market basket index meets this statutory requirement. The SNF market basket captures the pure price change of inputs such as labor, capital, etc., used to provide SNF services. While several commenters pointed to the large growth in per diem SNF costs between 1995 and 1998 (as indicated on SNF cost report data) as evidence that the SNF market basket was inaccurate, we wish to emphasize that we do not consider reported historical per diem SNF costs an appropriate benchmark for determining its accuracy. The SNF market basket index, like the market basket indices used for other Medicare payment systems, measures pure price changes of inputs associated with the efficient delivery of care. It should not reflect changes in historical reported SNF costs associated with inefficient care or medically unnecessary services. Suggestions that it should are antithetical to the very notion of a PPS. It should also not reflect changes in non-price factors, such as adding staff or purchasing additional supplies. In any event, the statute provides that, once the initial PPS rates have been established, the unadjusted payment rates for a given year are calculated by applying an update to the rates for the previous year; the statute does not provide for a complete recalculation of the rates by applying a revised market basket methodology retroactively to 1995. It is also important to note that the statute itself sets forth a fairly prescriptive methodology for calculating and updating the initial per diem payments established under the SNF PPS in 1998. The statute requires the use of an FY 1995 base year to calculate the Federal rates, and the statute specifies the amount of the updates to the base year costs (market basket minus one). It further reduces the base year cost pool by eliminating the costs associated with atypical services exceptions and exemptions (under § 413.30 of the regulations), and sets the base payments at just above the freestanding mean. The current SNF PPS per diem payment rates reflect the methodology prescribed by statute, an intended consequence of which was the accumulation of budgetary savings. Thus, concerns regarding the level of funding associated with the base payment rates may actually have more to do with the statutory formula for establishing the payments than the market basket used to update them. With regard to the weights used to allocate many of the price proxies within the market basket, these are based on 1992 data because these are the latest complete data available from the Bureau of the Census and the Bureau of Economic Analysis. When more recent data become available, we will review the data and determine whether to rebase the market basket index to a more recent year. However, previous experience has shown that there is very little impact in the overall percent change in the market basket index when it is rebased. This was shown in the May 12, 1998 Federal Register (63 FR 26292), when the SNF market basket index was last rebased to a 1992 base from a 1977 base. All of the price proxies used in the calculation of the SNF market basket are based on the latest data released by their respective data sources. Therefore, the price proxies capture all of the dynamic price change which occurred or is expected to occur in any given period. In response to the specific comment concerning the labor portion of the market basket, the labor input proxies used in the SNF market basket are based the Employment Cost Index, a proven national survey of wages, salaries, and benefits for nursing home and personal care facilities, published by the BLS. These measures are based on a fixed skill mix of workers and do not reflect changes in skill mix. They measure only actual changes in the wages of workers and not shifts in wage costs caused by a shift in the skill mix of workers used. This makes it the preferred proxy to use, since it measures only pure price changes and not changes caused by other factors. As has always been our policy, we will continue to monitor and respond to any changes in the market for SNF services that affect the SNF market basket index. When data from the first fiscal year after full implementation of the SNF PPS become available, we plan to review the SNF market basket index to ensure that it accurately and appropriately captures all price changes faced by SNFs in providing services. This review includes updating weights used in allocating the price proxies within the market basket, as well as ensuring that our price proxies reflect market trends. For example, we monitor the proxy for prescription drugs to make sure that it reflects the price changes associated with both new and older medications. Finally, HCFA and MedPAC recognize that the SNF input price index developed by HCFA is only one component of the change in SNF cost per day. The index is designed to capture only the pure price change of inputs used to produce a constant quantity and quality of care in a SNF. This is consistent with the definition as it is used by HCFA and MedPAC in the existing payment methodologies for SNFs, hospitals, home health agencies, and other settings. Other factors in addition to input prices help determine the overall change in costs per day. These factors include changes in case-mix, intensity, and productivity. Under the inpatient hospital PPS, HCFA and MedPAC use an update framework to account for these other factors and to make annual recommendations to Congress on the magnitude of the update. HCFA and MedPAC are both exploring the possibility of developing a SNF PPS update framework to make similar annual recommendations to Congress. As part of this update framework, we would address non-market basket factors such as intensity, productivity, and changes in site of service. This would allow us to maintain the integrity (and stability) of the market basket by keeping it separate and distinct from these other factors. It is very important to note that the non-market basket factors can be negative as well as positive. As SNFs move from a cost-based system to a fixed price PPS, there are likely to be substantial decreases in cost per unit of service. Increases in productivity, changes in site of service, elimination of ineffective practice patterns, and renegotiation to lower price contracts for inputs are some of the behavioral changes which result in negative factors. 1. Facility-Specific Rate Update Factor Under section 1888(e)(3)(D)(i) of the Act, for the facility-specific portion of the SNF PPS rate, we will update a facility's base year costs up to the corresponding cost reporting period beginning October 1, 2000, and ending September 30, 2001, by the SNF market basket percentage. We took the following steps to develop the 12-month cost reporting period facility-specific rate update factors shown in Table 10.C. Table 10. C.—Update Factors 1 for Facility-Specific Portion of the SNF PPS Rates—Adjust To 12-Month Cost Reporting Periods Beginning On or After October 1, 2000 and Before October 1, 2001 From Cost Reporting Periods Beginning in FY 1995 [Base year] If 12-month cost reporting period in initial period begins: Adjust from 12-month cost reporting period in base year that begins: Using update factor of: October 1, 2000 October 1, 1994 1.14457 November 1, 2000 November 1, 1994 1.14475 December 1, 2000 December 1, 1994 1.14494 January 1, 2001 January 1, 1995 1.14522 February 1, 2001 February 1, 1995 1.14567 March 1, 2001 March 1, 1995 1.14630 April 1, 2001 April 1, 1995 1.14693 May 1, 2001 May 1, 1995 1.14739 June 1, 2001 June 1, 1995 1.14768 July 1, 2001 July 1, 1995 1.14797 August 1, 2001 August 1, 1995 1.14843 September 1, 2001 September 1, 1995 1.14905 1 Source: Standard & Poor's DRI HCC, 2nd QTR 2000; @USSIM/TRENDLONG0500@CISSIM/TRENDLONG0500. For the facility rate, we developed factors to inflate data from cost reporting periods beginning October 1, 1994, through September 30, 1995, to the corresponding cost reporting period beginning in FY 2001. According to section 1888(e)(3)(D) of the Act, the years through FY 1999 were inflated at a rate of market basket minus 1 percentage point, while FY 2000 and FY 2001 are to be inflated at the full market basket rate of increase. 2. Federal Rate Update Factor To update each facility's costs up to the common period, we: A. Determined the total growth from the average market basket level for the period of October 1, 1999, through September 30, 2000, to the average market basket level for the period of October 1, 2000, through September 30, 2001. B. Calculated the rate of growth between the midpoints of the two periods. C. Calculated the annual average rate of growth for number 2, above. D. Subtracted 1 percentage point from this annual average rate of growth. E. Using the annual average minus 1 percentage point rate of growth, determined the cumulative growth between the midpoints of the two periods specified above. This revised update factor was used to compute the Federal portion of the SNF PPS rate shown in Tables 1 and 2. H. Consolidated Billing The consolidated billing requirement places with the SNF itself the Medicare billing responsibility for virtually all of the services that an SNF resident receives. The original SNF PPS legislation in the BBA identified several service categories that were excluded from the SNF consolidated billing requirement, as well as from the bundled Part A payment made under the SNF PPS itself. As noted in the proposed rule, section 103(a) of the BBRA amended section 1888(e)(2)(A) of the Act, effective with services furnished on or after April 1, 2000, to exclude certain additional types of services from the consolidated billing requirement, thus allowing these services to be billed separately to Part B. We listed these excluded services, by HCPCS code, in Program Memorandum AB-00-18 (March 2000). Section 103(b) of the BBRA also amended section 1888(e)(4)(G) of the Act to provide for a corresponding proportional reduction in Part A SNF payments, beginning with FY 2001. Comment : In addition to identifying certain individual services (within a number of broader service categories) for exclusion from the consolidated billing requirement, section 103 of the BBRA also gives the Secretary the authority to designate additional services within each of those categories for exclusion from this requirement. A number of commenters recommended that we exercise this authority to designate a variety of additional services for exclusion, such as modified barium swallow, stress tests, hyperbaric oxygen treatment, doppler studies, nuclear medicine, orthotic devices, gastrointestinal procedures performed in endoscopy rooms, and outpatient surgery performed in hospital treatment rooms or ambulatory surgical centers. Alternatively, some commenters suggested that we could accomplish this result by adding these services to the existing exclusion list (in regulations at § 411.15(p)(3)(iii)) for certain high-intensity outpatient hospital services. Others expressed the view that this latter authority should not be limited to only those services that actually require the intensity of a hospital setting, but rather, should also encompass services furnished in other, nonhospital settings as well. As an example, they cited magnetic resonance imaging (MRIs) furnished in freestanding imaging centers, which may be cheaper and more accessible in certain particular localities than those furnished by hospitals. Response : The BBRA's discretionary authority applies only to identifying additional excluded services within the particular categories that are specified in the legislation itself (that is, chemotherapy and its administration; radioisotope services; and, customized prosthetic devices) and not to other services that fall outside of those particular categories. Further, we are not exercising this discretionary authority at the present time, because we believe that the particular HCPCS codes identified in the BBRA represent the service exclusions within the specified categories that are appropriate under current circumstances. We note that language in the BBRA conference agreement requests the GAO to conduct a review of the appropriateness of the particular HCPCS codes that this legislation has designated for exclusion from consolidated billing. As we indicated in the proposed rule, we will carefully consider the GAO's findings when they become available, in order to determine whether further refinements in the codes identified on the exclusion list might be warranted. Moreover, we believe that the comments advocating broader exclusions, beyond the particular services identified in the BBRA, may reflect a misunderstanding of the overall objective of the consolidated billing provision. We do not view the identification of new service categories for exclusion from this provision in terms of a process of continual expansion to encompass an ever-broadening array of excluded services. As we noted in the May 12, 1998 interim final rule (63 FR 26297), the fundamental purpose of the consolidated billing provision is “* * * to make the SNF itself responsible for billing Medicare for essentially all of its residents' services, other than those identified in a small number of narrow and specifically delimited exclusions.” This is consistent with the type of discretionary authority that the BBRA provided, which we regard as essentially affording the flexibility to revise the list of excluded codes in response to changes of major significance that may occur over time (for example, the development of new medical technologies or other advances in the state of medical practice). Finally, regarding the comment on MRIs, we noted in the May 1998, interim final rule (63 FR 26298) that the exclusion of certain outpatient hospital services (in regulations at § 411.15(p)(3)(iii)) is targeted specifically at those services “* * * that, under commonly accepted standards of medical practice, lie exclusively within the purview of hospitals * * *” (emphasis added); that is, services which generally require the intensity of the hospital setting in order to be furnished safely and effectively. Thus, to the extent that advances in medical practice over time may make it feasible to perform such a service more widely in a less intensive, nonhospital setting, this would not argue in favor of unbundling the nonhospital performance of the service, but rather, of considering whether to rebundle the service entirely back to the SNF. Comment : A number of commenters noted that the BBRA has now excluded from consolidated billing those ambulance services that are furnished in conjunction with dialysis services, and asked that we extend this exclusion to apply as well to those ambulance services furnished in conjunction with the other newly excluded service categories identified in the BBRA (chemotherapy, radioisotope, etc.). Some suggested that we could accomplish this by administratively expanding the existing exclusion of certain high-intensity outpatient hospital services (in regulations at § 411.15(p)(3)(iii)) to encompass these newly excluded services (which would, in turn, result in excluding the associated ambulance services as well). Another argued that since many ambulance services have already been excluded from consolidated billing, it would be less complicated from an administrative standpoint simply to establish a categorical exclusion for all ambulance services. Response: We note that, prior to the BBRA's exclusion of dialysis-related ambulance services from consolidated billing, we received a number of similar recommendations to designate the statutorily-excluded category of dialysis services as also being one of the excluded outpatient hospital services under § 411.15(p)(3)(iii), as a means of permitting the associated ambulance transportation to be excluded as well. In response, we noted in the preamble to the July 30, 1999 final rule (64 FR 41673) that such a recommendation reflects * * * a misunderstanding of the underlying purpose of the outpatient hospital exclusion. This exclusion from consolidated billing does not serve as a mechanism for unbundling ambulance services per se. The * * * unbundling of ambulance services associated with * * * excluded outpatient hospital services occurs simply because the bundling of ambulance services is itself tied to a beneficiary's status as an SNF “resident” for consolidated billing purposes, which is suspended by the receipt of these excluded types of outpatient hospital services. Further, while the statute itself excludes a number of service categories from the consolidated billing requirement—including services of physicians and certain other practitioners that are defined as being entirely outside the scope of the Part A SNF benefit (see sections 1861(h)(7) and 1861(b)(4) of the Act)—the receipt of such services offsite does not have the effect of ending a beneficiary's status as an SNF “resident” for consolidated billing purposes and, consequently, does not result in unbundling the associated ambulance transportation. Thus, unbundling the ambulance transportation that is associated with the statutorily-excluded types of chemotherapy services, radioisotope services, and customized prosthetic devices would require legislation to amend the law itself, like that which Congress enacted in section 103(a)(2) of the BBRA with respect to dialysis-related ambulance services. Similarly, establishing a categorical exclusion of all ambulance services whatsoever would also require legislation to amend the law. Comment: A number of commenters raised issues regarding so-called “Part B” consolidated billing, in connection with services furnished to those beneficiaries in the SNF who are not in a covered Part A stay. (As we noted in the proposed rule, implementation of this aspect of consolidated billing has been delayed as a result of higher-priority systems renovations that had to be completed timely in order to achieve Year 2000 (Y2K) compliance.) Most of these commenters recommended extending the timeframe for implementation of Part B consolidated billing until after implementation of the PPS case-mix refinements set forth in the proposed rule, and a few even suggested reconsidering whether to implement this aspect of consolidated billing at all. One commenter suggested that bills for those types of items that are currently submitted to the Durable Medical Equipment Regional Carriers (DMERCs) should continue to be submitted to them under Part B consolidated billing, since the DMERCs have acquired specialized expertise in this area. Another recommended that HCFA should impose limitations on the amounts that suppliers can charge SNFs for Part B services. Response: Since the law provides that consolidated billing applies to services furnished to a SNF “resident” (regardless of whether Medicare covers a particular resident's stay), we do not have the discretion simply to decline to implement this aspect of the provision. As we indicated in the July 30, 1999 final rule (64 FR 41671), once we have determined the specific implementation timeframe for this aspect of consolidated billing, we will provide at least 90 days' advance notice in the Federal Register . However, specific operational instructions (such as those describing the details of particular billing procedures) are beyond the scope of this final rule, and will be addressed instead in HCFA program issuances. With regard to the suggestion that we limit the amount a supplier can charge a SNF for its services, we note that the Medicare transaction for a service that is subject to consolidated billing is the one that takes place between the Medicare program and the SNF itself. As we pointed out in the July 1999 final rule (64 FR 41677), a SNF's relationship with its supplier under consolidated billing is essentially a private contractual matter, and the specific terms of the supplier's payment by the SNF must be arrived at through direct negotiations between the two parties themselves. Comment : Under the current regulations at § 411.15(p)(3)(iv), a beneficiary's status as a SNF “resident” (for consolidated billing purposes) generally ends at the point of departure from the SNF. However, if the beneficiary returns to that or another SNF within 24 hours of departure, the beneficiary's status as a “resident” of the SNF from which he or she departed would continue during the absence, along with that SNF's consolidated billing responsibilities. As we noted in the proposed rule, since consolidated billing is currently in effect only for those SNF stays that are covered by Part A and paid by the PPS, this means in actual practice that such a beneficiary remains a SNF “resident” after leaving the SNF only if he or she then returns to the SNF by midnight. (This is because, under longstanding Medicare policy, a beneficiary generally must be present in the SNF at midnight of a given day in order for that day to be considered a Part A day.) We then proposed to revise the regulations to adopt this “midnight rule” in place of the current “24-hour rule,” which would essentially extend the policy currently in effect under Part A consolidated billing to apply to Part B consolidated billing as well. The commenters overwhelmingly supported this proposal, indicating that the resulting uniformity in policy would reduce the potential for confusion and billing errors. One commenter, while supporting the idea of following a uniform policy for both aspects of consolidated billing, suggested that the policy should be the “24-hour rule” that currently appears in the regulations rather than the “midnight rule.” The commenter cited, as a reason for taking this position, a concern over whether Part A payment under the SNF PPS recognizes those services that are furnished on the day of a beneficiary's discharge from the SNF, but before the actual moment of departure. Response : As recommended by the majority of commenters, we are revising the regulations to adopt the “midnight rule.” Thus, a beneficiary's status as a SNF “resident” for consolidated billing purposes ends upon departure, unless the beneficiary returns to that or another SNF by midnight of the day of departure. (As we explained in the proposed rule, a patient “day” begins at 12:01 A.M. and ends the following midnight, so that the phrase “midnight of the day of departure” refers to the midnight that immediately follows the actual moment of departure, rather than to the midnight that immediately precedes it.) With regard to the concern expressed by one commenter about services that are furnished on the day of (but before the actual moment of) discharge, we note that the SNF PPS does, in fact, recognize such services, as discussed below. Even though the day of discharge from a covered SNF stay is not itself a covered Part A day, under the pre-PPS (reasonable cost) SNF payment methodology, ancillary services furnished on that day but before the actual moment of departure were covered, included on the SNF's cost report, and reflected in final cost settlement. Accordingly, the cost of such services has been built into the SNF PPS base. This makes the PPS per diem amount somewhat higher than it would otherwise have been for all of the preceding SNF days that Part A does cover, even though the day of discharge itself is not a covered Part A day. Further, with regard to room and board, although the Medicare program uses a midnight-to-midnight approach as a convention for counting inpatient days, the routine costs for the covered day that immediately precedes the date of discharge would include (much like a hotel bill) the accommodations for that entire night. Comment : In excluding the additional services from consolidated billing and the SNF PPS (and, thus, qualifying them for separate payment under Part B), section 103 of the BBRA also mandated a corresponding proportional reduction in Part A SNF payments, beginning with FY 2001. We described our methodology for making this adjustment in the proposed rule (65 FR 19202), and indicated that we expected the amount of the adjustment to be minimal. However, due to the complexity of the process and the amount of time involved in completing it, we added that we would publish the actual adjusted rates themselves prospectively in the final rule. One commenter requested us to share the methodology that we actually used in making this adjustment. Another argued that the reduction in Part A payment essentially cancels out the fiscal relief provided by allowing the newly-excluded services to be billed to Part B. Response : Regarding our adjustment methodology, we have computed a reduction of 5 cents ($0.05) in the unadjusted urban and rural rates, using the identical data as used to establish the Part B add-on for a sample of approximately 1,500 SNFs from the 1995 base period. By matching the excluded codes specified in section 103 of the BBRA to the Part B bills, we identified an amount equal to a reduction of $0.05 in the Federal rate. While the amount of the reduction reflects those excluded codes that we were specifically able to identify, there may be additional excluded services that were not captured, since certain of these services were billed differently in 1995 than now, in a manner that may not have utilized the codes by which they were specified in the BBRA. We are, therefore, continuing to examine the billing practices in the PPS base year, and may revise our estimate of this reduction in the future to capture additional elements of allowable charges, as appropriate. Regarding the comment that characterized this adjustment as canceling out the fiscal relief that was otherwise provided by this section of the BBRA, we note that the reduction in Part A payment rates is specifically required by that same section of the law, in order to prevent the Medicare program from paying twice (once under Part A, and again under Part B) for the same service. Further, we believe that this comment may reflect a misunderstanding of the overall effect of this provision's fiscal relief. As amended by section 103(b) of the BBRA, section 1888(e)(4)(G)(iii) of the Act provides that the adjustment is to be made in such a way that the aggregate reduction in Part A payments is estimated to equal the aggregate increase in Part B payments attributable to the exclusion. Further, we note that the particular services were excluded in recognition that SNFs could experience “* * * high-cost, low probability events that could have devastating financial impacts because their costs far exceed” an individual SNF's PPS payment (H.R. Conf. Rep. No. 106-479 at 854). Thus, the actual result of this provision's mandatory Part A payment reduction is to take the expense of the excluded items (which could be financially devastating to an individual SNF that actually incurs it, if borne solely by that particular facility) and effectively redistribute it over the entire universe of providers. In much the same way that an insurance pool reduces the degree of financial risk to an individual member of the pool in the event of a catastrophic loss, effectively spreading the expense of the excluded items over such a large provider population helps minimize the potential financial liability that any individual provider might otherwise incur. I. [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/fr%3A00-19004. Public record. Not legal advice.