Medicare Program; Schedule of Limits on Home Health Agency Costs Per Visit for Cost Reporting Periods Beginning on or After July 1, 1997

SUMMARY: This notice sets forth a revised schedule of limits on home

health agency costs that may be paid under the Medicare program for

cost reporting periods beginning on or after July 1, 1997. These limits

replace the per visit limits that were set forth in our July 1, 1996

notice with comment period (61 FR 34344). This notice also responds to

comments on the July 1, 1996 notice.

DATES: Effective Date: The schedule of limits is effective for cost

reporting periods beginning on or after July 1, 1997.

Comment Period: Written comments will be considered if we receive

them at the appropriate address, as provided below, no later than 5

p.m. on September 2, 1997.

ADDRESSES: Mail written comments (one original and three copies) to the

following address: Health Care Financing Administration, Department of

Health and Human Services, Attention: BPD-889-NC, P.O. Box 7517,

Baltimore, Maryland 21207-0517.

If you prefer, you may deliver your written comments (one original

and three copies) to one of the following addresses:

Room 309-G, Hubert H. Humphrey Building, 00 Independence Avenue, SW,

Washington, D.C. 20201, or

Room C5-09-26, Central Building 7500 Security Boulevard Baltimore,

Maryland 21244-1850.

Comments may also be submitted electronically to the following e-

mail address: [email protected] E-mail comments must include the

full name and address of the sender and must be submitted to the

referenced address in order to be considered. All comments must be

incorporated in the e-mail message because we may not be able to access

attachments. Electronically submitted comments will be available for

public inspection at the Independence Avenue address below.

Because of staffing and resource limitations, we cannot accept

comments by facsimile (FAX) transmission. In commenting, please refer

to file code BPD-889-NC. Comments received timely will be available for

public inspection as they are received, generally beginning

approximately 3 weeks after publication of a document, in Room 309-G of

the Department's offices at 200 Independence Avenue, SW, Washington,

DC, on Monday through Friday of each week from 8:30 a.m. to 5 p.m.

(Phone: (202) 690-7890).

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FOR FURTHER INFORMATION CONTACT: Michael Bussacca, (410) 786-4602.

SUPPLEMENTARY INFORMATION:

I. Background

Section 1861(v)(1)(A) of the Social Security Act (the Act)

authorizes the Secretary to establish limits on allowable costs

incurred by a provider of services that may be paid under the Medicare

program, based on estimates of the costs necessary in the efficient

delivery of needed health services. Under this authority, we have

maintained limits on home health agency (HHA) per-visit costs since

1979. The limits may be applied to direct or indirect overall costs or

to the costs incurred for specific items or services furnished by the

provider. Implementing regulations are located at 42 CFR 413.30.

Additional statutory provisions specifically governing the limits

applicable to HHAs are contained at section 1861(v)(1)(L) of the Act.

Section 1861(v)(1)(L)(i) of the Act specifies that the cost limits are

not to exceed 112 percent of the mean of the labor-related and nonlabor

per-visit costs for freestanding HHAs. Section 1861(v)(1)(L)(iii) of

the Act requires that the Secretary establish HHA cost limits on an

annual basis for cost reporting periods beginning on or after July 1 of

each year (except for cost reporting periods beginning on or after July

1, 1994, and before July 1, 1996). In establishing these limits, the

Act directs the Secretary to use the applicable hospital wage index, as

discussed below.

On July 1, 1996, we published in the Federal Register (61 FR 34344)

a notice with comment period that set forth a revised schedule of

limits on HHA costs that may be paid under the Medicare program for

cost reporting periods beginning on or after July 1, 1996. These limits

replaced the per-visit limits that were set forth in our February 14,

1995 notice with comment period (60 FR 8389). The July 1, 1996 limits

were computed using the actual cost-per-visit data from cost reporting

periods ending on or after June 30, 1991, and settled by October 1,

1995, and were adjusted by later estimates in the ``market basket''

index to reflect changes in the prices of goods and services furnished

by HHAs.

This notice with comment period sets forth revised cost limits for

cost reporting periods beginning on or after July 1, 1997. As required

by section 1861(v)(1)(L)(iii) of the Act, we are using the area wage

index applicable under section 1886(d)(3)(E) of the Act determined

using the survey of the most recent available wages and wage-related

costs of hospitals located in the geographic area in which the HHA is

located. For purposes of this notice, the HHA wage index is based on

the most recent hospital wage index, that is, the hospital wage index

effective for hospital discharges on or after October 1, 1996, which

uses Federal fiscal year (FY) 1993 wage data. As the statute also

specifies, in applying the hospital wage index to HHAs, no adjustments

are to be made to account for hospital reclassifications under section

1886(d)(8)(B) of the Act, decisions of the Medicare Geographic

Classification Review Board (MGCRB) under section

[[Page 35609]]

1886(d)(10) of the Act, or decisions by the Secretary.

II. Analysis of and Response to Public Comments

We received 28 items of timely correspondence on the July 1, 1996

notice with comment period. A summary of these comments and our

responses are discussed below.

Comment: One commenter suggested that an HHA based in a hospital

that has been redesignated by the MGCRB should be allowed to use the

same wage index as that used by the parent hospital.

Response: Section 1861(v)(1)(L)(iii) of the Social Security Act

requires us to use the wage index used for hospitals under the

inpatient hospital prospective payment system (PPS) using the survey of

the most recent available wages and wage-related costs of hospitals

located in the geographic area in which the HHA is located, determined

without regard to whether the hospitals have been reclassified to a new

geographic area. Given this explicit statutory requirement, the wage

index value for an area cannot reflect any redesignations by the MGCRB.

Comment: A number of commenters raised concerns regarding the

budget neutrality factor of 0.91, included in the July 1, 1996 notice

and its effect on the July 1, 1996 schedule of limits. They indicated

that the decrease in the budget neutrality factor, from 1.067, for the

limits effective July 1, 1993, to 0.91 for the cost limits effective

July 1, 1996, failed to account for industry growth and growing labor

costs. Commenters also expressed concern that this decrease would

create a reduction in cost limits that could threaten the quality of

services HHAs can affordably provide, especially in rural areas.

Response: Subsequent to the publication of the July 1, 1996

schedule of limits, we identified several errors in the data that were

used to calculate the budget neutrality factor of 0.91 in the July 1,

1996 notice. In order to ensure the accuracy of the factor, we

conducted an exhaustive review of all the data used in the calculation

of the 1996 limits. Based on corrected data, we have revised the budget

neutrality factor to be 1.078. Our fiscal intermediaries have been

directed, in Program Memorandum A-96-11, November 1996, to use this

revised factor in limits calculations for all cost reporting periods

beginning on or after July 1, 1996. Since the previous factor, in the

limits effective July 1, 1993, had a value of 1.067, the revised budget

neutrality factor of 1.078 had no substantial effect on the July 1,

1996 schedule of limits applied to any agency.

Comment: One commenter suggested that the limits take into account

the special circumstances of rural home health agencies.

Response: The July 1, 1996 limits were based on the latest

available settled cost reports. In calculating the limits, we

determined the average cost per visit for urban and rural agencies

separately. Therefore, the limits applied to rural HHAs are based on

the actual operating and cost experience of rural agencies, and are

reflective of the circumstances unique to an agency operating in a

rural area.

Comment: One commenter recommended that the wage index used in the

July 1, 1996 schedule of limits be that used in the hospital

prospective payment system that was effective on October 1, 1996.

Response: Section 1861(v)(1)(L)(iii) of the Act requires us to use

the area wage index applicable under section 1886(d)(3)(E) of the Act

determined using the survey of the most recent available wages and

wage-related costs of hospitals located in the geographic area in which

the HHA is located. Accordingly, in our July 1, 1996 notice, the HHA

wage index was based on the most recent hospital wage index at that

time, which was the index effective for hospital discharges on or after

October 1, 1995.

Comment: One commenter suggested that we include in our Federal

Register notices and the public use data file more details and

information on the methodology and data used in calculating the limits.

Response: In each of the Federal Register notices we have published

since 1979, we have striven to provide all of the information necessary

for the public to understand the reason and basis for our policies. At

the same time, we try to avoid dense and highly technical discussions

that would be of interest to few readers and that might be found to be

confusing or perceived as obfuscatory. We are always open to

suggestions on the adequacy of the information provided in the notices.

In response to the commenter, in this 1997 notice, we are providing

additional information on the assumptions used in computing the budget

neutrality adjustment. We will attempt to include more technical

details in future notices. We are also amenable to including additional

data items in the public use data file, and will expand this file as

requested.

Comment: Commenters wanted assurance that the effect of an increase

in the minimum wage had been considered when the forecast of the HHA

market basket was made for the July 1, 1996 schedule of limits.

Response: Public Law 104-188 signed on August 20, 1996, raised the

minimum wage of $4.25 per hour by $0.50 per hour in October 1996 to

$4.75 per hour, and an additional $0.40 per hour in September 1997 to

$5.15 per hour. The HHA input price index is a national, not a

regional, measure of price changes in a ``market basket'' reflecting

the inputs used by HHAs in providing covered home health services. The

forecast used for the HHA market basket in the July 1, 1996 notice did

reflect anticipated increases in the minimum wage, although the timing

and magnitude of the changes were different than those of the actual

legislated increases, enacted after the July 1, 1996 notice. There are

two areas where minimum wage increases can impact on the HHA market

basket. Each of these areas is discussed in detail below.

One area where an increase in the minimum wage can have an impact

on the HHA input price index is the annual percent increase of that

index. The impact of a minimum wage increase is reflected in the HHA

input price index as a ``one-time'' increase in the growth rate that is

distributed over time in a lagged manner. The increase is distributed

over time because of the two-step increase in the minimum wage, the use

of four-quarter moving-average percent changes, and the delayed

response by some firms to increased wages of employees that are

currently slightly above the new minimum. The minimum wage increase is

reflected in: (1) The price proxies for compensation of workers in the

HHA input price index, which are the five Employment Cost Indexes (ECI)

for each of the occupational categories; and (2) the noncompensation

price proxies as secondary impacts where labor is used in an earlier

stage of processing.

DRI/McGraw-Hill, under contract with HCFA to forecast the HHA

index, includes increases in the minimum wage in its macroeconomic

forecast assumptions. The increase in the minimum wage is incorporated

in the DRI models used to establish the economy-wide profile, as well

as the profile for individual occupations and sectors, for wages,

salaries, benefits, and noncompensation price inflation used in the HHA

input price index. While the inclusion of the minimum wage increases

directly affects the wage price proxy (five ECIs for the occupational

groupings) in the HHA input price index, it also indirectly affects the

growth of other nonlabor cost input

[[Page 35610]]

proxies in a lesser manner through a stages-of-processing methodology.

The first quarter 1996 DRI/McGraw-Hill forecast was used to

determine the HHA input price increases in the July 1, 1996 notice. In

its first quarter 1996 forecast, DRI anticipated minimum wage increases

in 1997 and 1998, and included its expectations in the model at that

time. When DRI made its first quarter 1996 forecast in March 1996, it

expected minimum wage increases of $0.45 per hour in April 1997 and an

additional $0.10 per hour in April 1998. These expectations contributed

to an increase in the HHA input price index growth rate between the

second quarter of 1997 and the second quarter of 1999. (The growth rate

is affected for nine quarters, in part because HCFA uses a four-quarter

moving-average percent change for price increases, meaning that an

increase in the minimum wage in the second quarter of 1998 will show up

in the calculation of the four-quarter moving-average percent change

for the second quarter of 1999.)

As mentioned above, the actual, legislated minimum wage increases

are $0.50 per hour in October 1996 and an additional $0.40 per hour in

September 1997. Because the July 1, 1996 notice was published before we

knew the exact amount of the minimum wage increase, the first quarter

1996 DRI forecast, the latest data available for use in that notice,

did not reflect the actual, legislated minimum wage increase. Beginning

with the second quarter 1996 DRI forecast, however, the legislated

minimum wage increase is reflected in all DRI forecasts. The HHA input

price index growth rate, based on the actual minimum wage increase,

will be impacted between the fourth quarter of 1996 and the fourth

quarter of 1998, instead of the period between the second quarter of

1997 and the second quarter of 1999 as anticipated in the first quarter

1996 DRI forecast. The forecasted impact will also be larger than was

anticipated in the first quarter 1996 forecast because the minimum wage

will increase $0.35 per hour more than was expected in early 1996.

To analyze the impact of the cumulative $0.90 per hour minimum wage

increase on the HHA input price index growth rate, we examined the

underlying wage distribution of the ECI occupational categories used in

the HHA compensation price proxies. We estimated the impact on those

workers in those occupational categories earning below or up to the

September 1997 national minimum wage of $5.15 an hour. An analysis of

the March 1995 Current Population Survey showed that roughly 10 percent

of workers in those occupational categories earned below $5.15. Those

workers earning just above this new minimum are also expected to be

affected by a modest ripple effect. DRI estimates the new minimum wage

will increase the growth rate in the HHA input price index by 0.25

percentage points between the fourth quarter of 1996 and the fourth

quarter of 1998.

We compared the first quarter 1996 DRI forecast used in the July 1,

1996 notice to the fourth quarter 1996 DRI forecast for the forecasted

FY 1996, FY 1997, and FY 1998 percent increases. The first quarter 1996

forecast was made based on DRI assumptions of how much and when the

minimum wage would increase, while the fourth quarter 1996 DRI forecast

was made after the August 1996 passage date of the minimum wage

legislation. Since the first of the two-step minimum wage increase did

not take place until October 1996, the FY 1996 percent increase in the

HHA market basket was not impacted by the increase in the minimum wage.

Our analysis showed that even though the full effect of the minimum

wage was not included in the July 1, 1996 notice, other negative

factors such as lower than expected benefits price increases and lower

than expected administrative and general expense price increases more

than offset the effect of the minimum wage increases. The FY 1997

increase is now being forecast by DRI to be lower than originally

expected in the first quarter of 1996 by 0.2 percentage points (3.1

percent vs 2.9 percent). The FY 1998 increase, however, is now being

forecast to increase roughly 0.1 percentage points faster than was

expected in the first quarter of 1996 (3.3 percent vs 3.2 percent). The

cumulative growth in the HHA market basket for FY 1997 and FY 1998 is

0.1 percentage points lower than was forecast in the July 1, 1996

notice.

The other area where a change in the minimum wage can impact the

HHA input price index is the cost category weights, although any impact

on percentage changes would be insignificant. Because the 1993 base

year for the HHA market basket is earlier than the October 1996 minimum

wage increase, this change is not represented in the cost category

weights. However, when HCFA updates the base year for the HHA index in

a future year, the minimum wage increase will be reflected in the wages

and salaries cost category weight.

Comment: Several commenters requested that we evaluate labor-

related share by provider or individual geographic area, not by

industry averages.

Response: The national industry share of labor-related costs is

used for adjusting area variations in compensation costs for the major

provider types, including PPS hospitals, skilled nursing facilities

(SNFs), and HHAs. The national average reflects a standard mix of

labor-related inputs relative to nonlabor inputs. Inefficient mixes of

inputs are not rewarded with higher payments. If the labor-related

share was somehow estimated at the individual provider level, it could

encourage individual providers to game the system to maximize payments.

Additionally, the required data to calculate or estimate labor-related

costs of the individual provider or in geographic areas are typically

not available. However, more data are available at the national level.

Comment: One commenter questioned why the HHA Input Price Index has

failed to address concerns that the home health industry has previously

submitted to HCFA , such as costs that change as a result of

modifications in hospital discharge practices or advancements in home

health technology.

Response: HCFA, by design, uses fixed weight or Laspeyres-type

indices to measure pure price increases for HHA services. A Laspeyres

index is used to measure the cost of a given market basket at different

points in time. The HHA Input Price Index answers the question of how

much more or less it would cost, at a later time, to purchase the same

mix of goods and services per HHA visit that was purchased in the base

period. Changes in costs as a result of modifications in hospital

discharge practices or advancements in home health technology are

appropriately handled in other ways in the HHA update framework. For

example, if discharge patterns change so that more high-skilled

physical therapist and registered nurse visits are needed relative to

HHA aide visits, this automatically is reflected in higher cost per

visit. Higher costs per visit within each of the various visit types

are reflected in the HHA Medicare cost report data and thus in payment

limit updates. If the effect of changing technology and changing

discharge practices is a change in the mix of goods and services, then

this is automatically taken into account when the weights are rebased.

When this occurs, the most recently available cost structure of the

industry, reflecting changes in technology, changed mix of goods and

services, etc., is reflected in the weights developed for the market

basket. Therefore, the cost limits methodology, which includes the

Input Price Index,

[[Page 35611]]

accounts for the changes in costs that were of concern to the

commenters.

Comment: One commenter questioned why HCFA uses data from outside

the home health care industry as a proxy for changes in home health

employees' compensation. In addition, one commenter pointed out that

HHAs also compete with employers in nonhealth industries, such as

retail and service industries.

Response: The HHA market basket wage and benefits labor categories

include: (1) Skilled nurses, therapists, and other professional and

technical workers; (2) managerial and supervisory workers; (3) clerical

workers; and (4) service workers. HHAs compete for these occupational

labor categories with employers both inside and outside the HHA care

sector. In the case of compensation for nurses and certain other health

care technicians and professionals, the hospital labor market may be

predominant. However, hospitals and HHAs also compete with other

industries to obtain certain skilled professional and technical staff

(for example, accountants and computer programmers). For professional

and technical workers (skilled nurses, therapists, and other

professional and technical workers), we believe that a price proxy that

reflects a blend of compensation variables internal and external to the

health sector is appropriate. The blend used is price proxies that are

equally weighted between ECI for civilian hospital workers and ECI for

economy-wide professional and technical workers. The PPS hospital

market basket has used this same blend of internal and external price

proxies for professional and technical workers since the 1980's.

Since HHAs compete primarily with employers outside the health care

sector for the other three occupational categories (managerial and

supervisory, clerical, and service workers), we use economy-wide

employment cost indices as price proxies for these three occupational

groups. The health care sector is included in economy-wide employment

cost indices. According to the Bureau of Labor Statistics Current

Employment Statistics Survey (establishment data), in March 1995 the

health care sector accounted for over 9 percent of employment in the

total nonfarm economy.

We ran a simulation using the compensation weights in the 1993-

based HHA Input Price Index to show the cumulative difference between

using the blend in the HHA Input Price Index of 50 percent ECI for

hospital workers, and 50 percent ECI for professional and technical

workers and using only the ECI for hospital workers (the internal

health sector component of the blend) over 10 years (fourth quarter of

1986 through the fourth quarter of 1996). The cumulative difference was

only 0.7 percentage points over 10 years. This amounts to an average

difference of less than 0.1 percentage point per year, indicating that

the blend, while technically more accurate, results in a rate of

increase that is almost identical to that measured by the nonblended

ECI.

Comment: One commenter questioned why data for hospital-based HHAs

were not included in the derivation of weights for the revised and

rebased market basket.

Response: Data for hospital-based HHAs were not used in the revised

and rebased HHA Input Price Index because Medicare cost reports for

hospital-based HHAs contain costs that, due to the stepdown of overhead

cost from the hospital, are not part of an efficient HHA cost

structure. In addition, the data for hospital-based HHAs were not as

detailed as the data for freestanding HHAs. We believe that an input

price index based on the cost structure of freestanding HHAs more

accurately represents the cost structure of the home health industry

than would a market basket based on the cost structure of both

freestanding and hospital-based HHAs. This same approach is used for

SNFs.

III. Updating the Wage Index on a Budget-Neutral Basis

Section 4207(d)(2) of the Omnibus Budget Reconciliation Act of 1990

(OBRA `90) (Public Law 101-508) requires that, in updating the wage

index, aggregate payments to HHAs will remain the same as they would

have been if the wage index had not been updated. Therefore, overall

payments to HHAs are not affected by changes in the wage index values.

To comply with the requirement of section 4207(d)(2) of OBRA `90

that updating the wage index be budget neutral, we determined that it

is necessary to apply a budget neutrality adjustment factor of 1.078 to

the labor-related portion of the July 1, 1997 cost limits. This

adjustment ensures that aggregate payments to HHAs are not affected by

the change to a wage index based on the hospital wage index published

on August 30, 1996 (61 FR 46166). The adjustment factor of 1.078 is the

same as the factor derived from the November 1996 calculations. When we

updated the data for the wage index, we did not find changes

significant enough to have an effect on the budget neutrality

adjustment factor.

To determine this factor, we analyzed both the data obtained from

the freestanding agencies used to determine the cost limits and the

settled cost report data covering the same time period for the

hospital-based agencies. For each agency in this database, we replaced

their current wage index with the one corresponding to the 1982

hospital wage index. Some Metropolitan Statistical Areas (MSAs) that

currently exist did not exist at the time this index was created and

therefore have no matching 1982 wage index. In the database we are

currently using, these unmatchable MSAs represented 2 percent of the

total visits. Since this percentage was small, we deleted these

agencies from the analysis. We then determined what Medicare program

payments would be using the 1982 wage index. Next, we determined

payments using the new wage index and adjusted the labor portion of the

payment by the factor necessary to match program payments if the 1982

wage index was used. (See the example in section VIII.A of this notice

regarding the adjustment of cost limits by the wage index and the

budget neutrality factor.)

IV. Update of Limits

The methodology used to develop the schedule of limits set forth in

this notice is the same as that used in setting the limits that were

effective July 1, 1996. We have updated the cost limits to reflect the

expected cost increases occurring between the cost reporting periods

for the data contained in the database and June 30, 1998.

A. Data Used

To develop the schedule of limits that is effective July 1, 1997,

we extracted actual cost per-visit data from settled Medicare cost

reports for periods ending on or after June 30, 1991, and settled by

October 1, 1995. The majority of the cost reports were from FY 1993. We

then adjusted the data using the latest available market basket indexes

to reflect expected cost increases occurring between the cost reporting

periods contained in our database and June 30, 1998.

Previous to the July 1, 1996 notice, HCFA used the market basket

index to adjust the cost report data to the midpoint (December 31) of

the first cost reporting period to which the limits applied (July 1).

The present limits adjust the data to the end of the first cost

reporting period to which the limits apply (June 30, 1998), a change

that will enable fiscal intermediaries to calculate the applicable

adjustment factors for HHAs with a cost reporting period of fewer than

12 months. Previously, the

[[Page 35612]]

intermediaries had to contact HCFA's central office for this

adjustment.

B. Wage Index

The wage index is used to adjust the labor-related portion of the

limits to reflect differing wage levels among areas. In setting this

schedule of limits, we used the FY 1997 hospital wage index, which is

based on 1993 hospital wage data.

Each HHA's labor market area is determined based on the definitions

of MSAs issued by the Office of Management and Budget (OMB). Section

1861(v)(1)(L) of the Act requires us to use the current hospital wage

index (that is, the FY 1997 hospital wage index, which was published in

the Federal Register on August 30, 1996 (61 FR 46256)) to establish the

HHA cost limits. Therefore, this schedule of limits reflects the MSA

definitions that are currently in effect under the hospital prospective

payment system.

We are continuing to incorporate exceptions to the MSA

classification system for certain New England counties that were

identified in the July 1, 1992 notice (57 FR 29410). These exceptions

have been recognized in setting hospital cost limits for cost reporting

periods beginning on and after July 1, 1979 (45 FR 41218), and were

authorized under section 601(g) of the Social Security Amendments of

1983 (Pubic Law 98-21). Section 601(g) of Public Law 98-21 requires

that any hospital in New England that was classified as being in an

urban area under the classification system in effect in 1979 will be

considered urban for the purposes of the hospital prospective payment

system. This provision is intended to ensure equitable treatment under

the hospital prospective payment system. Under this authority, the

following counties have been deemed to be urban areas for purposes of

payment under the inpatient hospital prospective payment system:

Litchfield County, CT in the Hartford, CT MSA.

York County, ME and Sagadahoc County, ME in the Portland,

ME MSA.

Merrimack County, NH in the Boston-Brockton-Nashua, MA-NH

MSA.

Newport County, RI in the Providence Fall-Warwick, RI MSA.

We are continuing to grant these urban exceptions for the purpose

of applying the HCFA hospital wage index to the HHA cost limits. These

exceptions result in the same New England County Metropolitan Area

(NECMA) definitions for hospitals, SNFs, and HHAs. In New England, MSAs

are defined on town boundaries rather than on county lines but exclude

parts of the four counties cited above that would be considered urban

under the MSA definition. Under this notice, those four counties are

urban under either definition, NECMA or MSA.

V. Provisions of the HHA Schedule of Limits

The schedule of limits set forth below was calculated using 112

percent of the mean per-visit costs of freestanding HHAs and is

adjusted by the latest estimates in the market basket index.

The schedule of limits effective for cost reporting periods

beginning on or after July 1, 1997, is based on the actual cost per-

visit data from settled Medicare cost reports for periods ending on or

after June 30, 1991, and settled by October 1, 1995, updated by the

market basket rate of increase and provides for the following:

A classification system based on whether an HHA is located

within an MSA, a NECMA, or a non-MSA area. (See Tables 4a and 4b in

section X. of this notice for the listing of MSAs, NECMAs, and rural

areas.)

The use of a single schedule of limits for hospital-based

and freestanding agencies. This single limit is based on the cost

experience of freestanding agencies.

The use of a market basket index, which was developed from

the price of goods and services purchased by HHAs to account for the

impact of changing wage and price levels on HHA costs.

The use of the current hospital wage index. The wage index

is used to adjust the labor-related portion of the limits. The employee

wage portion of the market basket index, including a proportionate

share of contract services (64.226 percent), and the employee benefits

portion (13.442 percent) are used to determine the labor component

(77.668 percent) of all HHA per-visit costs used to set the limits.

Separate treatment of the labor and nonlabor components of

per-visit costs. The separate components of costs are calculated by

obtaining actual HHA cost data for each agency for cost periods ending

on or after June 30, 1991 and settled before October 1, 1995, and

increasing those data by the actual and projected increases in the HHA

market basket index. We then separate each HHA's per-visit costs into

labor and nonlabor portions, and divide the labor portion by the wage

index value for the agency's location to control for the effect of

geographic variations in prevailing wage levels. Separate means are

computed for the labor and nonlabor components of per-visit costs. For

each comparison group, the resulting amounts are shown in Table 3 of

section IX. of this notice.

The application of a cost-of-living adjustment to the

nonlabor portion of the limit for HHAs located in Alaska, Hawaii,

Puerto Rico, and the U.S. Virgin Islands.

Limits that are determined for the per-visit cost of each

type of home health service: skilled nursing care, physical therapy,

speech pathology, occupational therapy, medical social services, and

home health aide.

Application of the limits in the aggregate after an HHA's

actual costs are adjusted. An HHA's actual costs are adjusted for

individual items of cost that are found to be excessive under Medicare

principles of provider payment and for costs that are not included in

the limitation amount. The limits are applied in the aggregate to the

cost remaining after these adjustments are made. Payment is limited to

the lower of the actual costs or the cost limits.

VI. Market Basket

The 1993-Based cost categories and weights are listed in Table 1

below.

Table 1.--1993-Based Cost Categories, Weights, and Price Proxies

----------------------------------------------------------------------------------------------------------------

1993-Based

Cost category market basket Price proxy

weight

----------------------------------------------------------------------------------------------------------------

Compensation, including allocated 77.668 ..........................................................

Contract Services' Labor.

Wages and Salaries, including 64.226 HHA Occupational Wage Index.

allocated Contract Services,

Labor.

Employee benefits, including 13.442 HHA Occupational Benefits Index.

allocated Contract Services'

Labor.

Operations & Maintenance........ 0.832 CPI-U Fuel & Other Utilities.

Administrative & General, including 9.569 ..........................................................

allocated Contract Services' Non-

Labor.

Telephone....................... 0.725 CPI-U Telephone.

[[Page 35613]]

Paper & Printing................ 0.529 CPI-U Household Paper, Paper Products & Stationery

Supplies.

Postage......................... 0.724 CPI-U Postage.

Other Administrative & General, 7.591 CPI-U Services.

including allocated Contract

Services Non-Labor.

Transportation...................... 3.405 CPI-U Private Transportation.

Capital-Related................. 3.204 ..........................................................

Insurance....................... 0.560 CPI-U Household Insurance.

Fixed Capital................... 1.764 CPI-U Owner's Equivalent Rent.

Movable Capital................. 0.880 PPI Machinery & Equipment.

Other Expenses, including 5.322 CPI-U All Items Less Food & Energy.

allocated Contract Services'

Non-Labor.

----------------

Total......................... 100.000

----------------------------------------------------------------------------------------------------------------

VII. Methodology for Determining Cost-Per-Visit Limits

A. Data

For this notice, the cost-per-visit limit values were determined by

extracting settled actual cost-per-visit data from Medicare cost

reports for cost reporting periods ending on or after June 30, 1991,

and settled before October 1, 1995. We then adjusted the data using the

latest available market basket factors to reflect expected cost

increases occurring between the cost reporting periods contained in our

database and June 30, 1998. The following adjustment factors were used

to compute the per-visit costs:

Table 2.--Factors for Inflating Database Dollars to June 30, 1998

------------------------------------------------------------------------

Inflation adjustment factors \1\

-------------------------------------------------------------------------

Fiscal year end 1992 1993 1994

------------------------------------------------------------------------

January 31....................... ........... 1.17097 1.13480

February 28...................... ........... 1.16778 1.13203

March 31......................... ........... 1.16457 1.12934

April 30......................... ........... 1.16135 1.12672

May 31........................... ........... 1.15816 1.12413

June 30.......................... 1.19400 1.15505 1.12152

July 31.......................... 1.19056 1.15202 1.11889

August 31........................ 1.18719 1.14906 1.11625

September 30..................... 1.18387 1.14614 1.11359

October 31....................... 1.18061 1.14327 1.11091

November 30...................... 1.17738 1.14043 1.10824

December 31...................... 1.17417 1.13761 1.10562

------------------------------------------------------------------------

B. Cost Reporting Periods Consisting of Fewer Than 12 Months

HHAs may have cost reporting periods that are fewer than 12 months

in duration. This may happen, for example, when a new provider enters

the Medicare program after its selected fiscal year has already begun,

or when a provider experiences a change of ownership before the end of

the cost reporting period. As explained in section IV. of this

preamble, the data used in calculating the cost limits were updated to

June 30, 1998. Therefore, the cost limits published in this notice are

for a 12-month cost reporting period beginning July 1, 1997 and ending

June 30, 1998. For 12-month cost reporting periods beginning after July

1, 1997 and before July 1, 1998, cost reporting year adjustment factors

are provided in Table 5. However, when a cost reporting period consists

of fewer than 12 months, adjustments must be made to the data that have

been developed for use with 12-month cost reporting periods. To promote

the efficient dissemination of cost limits to providers with cost

reporting periods of fewer than 12 months, we are publishing the

following examples and tables to enable intermediaries to calculate the

applicable adjustment factors.

Cost reporting periods of fewer than 12 months may not necessarily

begin on the first of the month or end on the last day of the month. In

order to simplify the process in calculating ``short period''

adjustment factors, if the short cost reporting period begins before

the sixteenth of the month, we will consider the period to have begun

on the first of that month. If the start period begins on or after the

sixteenth of the month, it will be considered to have begun at the

beginning of the next month. Also, if the short period ends before the

sixteenth of the month, we will consider the period to have ended at

the end of the preceding month; if the short period ends on or after

the sixteenth of the month, it will be considered to have ended at the

end of that month.

Examples:

1. After approval by its intermediary, an HHA changes its fiscal

year end from June 30 to December 31. Therefore, the HHA had a short

cost reporting period beginning on July 1, 1997 and ending on December

31, 1997. The cost limits that apply to this short period must be

adjusted as follows:

Step 1--From Table 6, sum the index levels for the months of July

1997 through December 1997: 6.81963.

Step 2--Divide the results from Step 1 by the number of months in

the short period.

6.819636=1.136605

[[Page 35614]]

Step 3--From Table 6, sum the index levels for the months in the

common period of July 1997 through June 1998.

13.75528

Step 4--Divide the results from Step 3 by the number of months in

the common period.

13.7552812=1.146273

Step 5--Divide the results from Step 2 by the results from Step 4.

This is the adjustment factor to be applied to the published limits

1.1366051.146273=.991566

Step 6--Apply the results from Step 5 to the published cost limits.

a. Urban Skilled Nursing Labor Portion.

$79.01 x .991566=$78.34

b. Urban Skilled Nursing Nonlabor Portion.

$22.28 x .991566=$22.09

2. A HHA with a fiscal year end of November 30, 1997 changes

ownership on September 21, 1998. The HHA is required to file a

terminated cost report for the period of December 1, 1997 to September

21, 1998. The cost limits that apply to this short period must be

adjusted as follows:

Step 1--From Table 6, sum the index level for the month of December

1997 through September 1998.

11.58995

Step 2--Divide the results from Step 1 by the number of months in

the short period.

11.5899510=158995

Step 3--From Table 6, sum the index levels for the months in the

common period of July 1997, through June 1998.

13.75528

Step 4--Divide the results from Step 3 by the number of months from

the common period.

13.7552812=1.146273

Step 5--Divide the results from Step 2 by the results from Step 4.

1.1589951.146273=1.011099

Step 6--Apply the results from Step 5 to the published cost limits.

a. Urban Skilled Nursing Labor Portion.

$79.01 x 1.01199=$79.89

b. Urban Skilled Nursing Non-Labor Portion.

$22.28 x 1.011099=$22.53

C. Standardization for Wage Levels

After adjustment by the market basket index, we divided each HHA's

per-visit costs into labor and nonlabor portions. The labor portion of

costs (77.668 percent as determined by the market basket) represents

the employee wage and benefit factor plus the contract services factor

from the market basket. We then divided the labor portion of per-visit

costs by the wage index applicable to the HHA's location to arrive at

an adjusted labor cost.

D. Adjustment for ``Outliers''

We transformed all per-visit cost data into their natural

logarithms and grouped them by type of service and MSA, NECMA, or non-

MSA location, in order to determine the mean cost and standard

deviation for each group. We then eliminated all ``outlier'' costs,

retaining only those per-visit costs within two standard deviations of

the mean in each service.

E. Basic Service Limit

We calculate a basic service limit equal to 112 percent of the mean

labor and nonlabor portions of the per-visit costs of freestanding HHAs

for each type of service. (See Table 3 in section IX.)

VIII. Computing the Adjusted Limit

A. Adjustment of Cost Limits by Wage Index

To arrive at the adjusted limit, which is to be applied to each

service furnished by an HHA, the HHA's intermediary first determines

the adjusted labor-related component by multiplying the labor-related

component of the limit by the appropriate wage index and by multiplying

the adjusted labor-related component by the special labor adjustment

for budget neutrality. (See example below and Tables 4a and 4b in

section X. of this notice.) The sum of the nonlabor component plus the

labor-related component is the adjusted limit applicable to an HHA.

Example--Calculation of Adjusted Occupational Therapy Limit for a

Freestanding HHA In Dallas, TX

------------------------------------------------------------------------

------------------------------------------------------------------------

Labor component (Table 3).................................. $85.97

Wage index value (Table 4a)................................ 0.9729

Labor portion.............................................. 83.64

Special labor adjustment for budget neutrality............. 1.078

Adjusted labor portion..................................... 90.16

Nonlabor component (Table 3)............................... 24.55

Adjusted occupational therapy limit........................ 114.71

------------------------------------------------------------------------

B. Adjustment for Reporting Year

If an HHA has a 12-month cost reporting period beginning on or

after August 1, 1997, the adjusted per-visit limit for each service is

again revised by an adjustment factor from Table 5 that corresponds to

the month and year in which the cost reporting period begins. Each

factor represents the compounded rate of monthly increase derived from

the projected annual increase in the market basket index, and is used

to account for inflation in costs that will occur after the date on

which the limits become effective.

For example, if the HHA in the example above had a cost reporting

period beginning January 1, 1998, its per-visit therapy limit would be

further adjusted as follows:

Computation of Revised Limit for Occupational Therapy

------------------------------------------------------------------------

------------------------------------------------------------------------

Adjusted per-visit limit.................................. $114.71

Adjustment factor from Table 5............................ 1.01588

Revised per-visit limit................................... 116.53

------------------------------------------------------------------------

In this example, the revised adjusted per-visit limit for

occupational therapy applicable to this HHA for the cost reporting

period beginning January 1, 1998, is $116.53 per visit.

If an HHA uses a cost reporting period that is not 12 months in

duration, a special calculation of the adjustment factor must be made.

This results from the fact that projections are computed to June 30,

1998. This calculation is done using the methodology described in

section VII.B.

IX. Schedule of Limits

The schedule of limits set forth below applies to cost reporting

periods beginning on or after July 1, 1997. The intermediaries will

compute the adjusted limits using the wage index published in Tables 4a

and 4b of section X. and will notify each HHA they service of its

applicable cost per-visit limit for each type of service. Each HHA's

aggregate limit cannot be determined prospectively, but depends on each

HHA's Medicare visits for each type of service for the cost reporting

periods subject to this notice.

The HHA costs that are subject to the limits include the cost of

medical supplies routinely furnished in conjunction with patient care.

Durable medical equipment, orthotics, prosthetics, and other medical

supplies directly identifiable as services to an individual patient are

excluded from the per-visit costs and are paid without regard to this

schedule of limits. (See Chapter IV of the Home Health Agency Manual

(HCFA Pub. 11).)

The intermediary will determine the limit for each HHA by

multiplying the number of Medicare visits for each type of service

furnished by the HHA, by the respective per-visit cost limit. The sum

of these amounts is compared to the HHA's total allowable cost.

[[Page 35615]]

Example: HHA X, a freestanding agency located in Richmond, VA,

furnished 5,000 covered skilled nursing visits, 2,000 physical therapy

visits, and 4,000 home health aide visits to Medicare beneficiaries

during its 12-month cost reporting period beginning July 1, 1997. The

aggregate cost limit for the HHA is calculated as follows:

Determining the Aggregate Cost Limit

----------------------------------------------------------------------------------------------------------------

Adjusted

Type of visit Visits Nonlabor labor Adjusted Aggregate

portion portion limit \1\ limit

----------------------------------------------------------------------------------------------------------------

Skilled nursing................................ 5,000 $22.28 $72.64 $100.59 $502,950

Physical therapy............................... 2,000 24.30 79.54 110.04 220,080

Home health aide............................... 4,000 10.88 35.25 48.88 195,520

----------------------------------------------------------------

Total Visits............................. 11,000 ........... ........... ........... ...........

Aggregate cost limit........................... ........... ........... ........... ........... 918,5501

----------------------------------------------------------------------------------------------------------------

\1\ Includes special labor adjustment of 1.078 for budget neutrality.

Before the limits are applied during settlement of the cost report,

the HHA's actual costs are reduced by the amount of individual items of

cost (for example, administrative compensation and contract services)

that are found to be excessive under the Medicare principles of

provider payment. That is, the intermediary reviews the various

reported costs, taking into account all the Medicare payment

principles; for example, the cost guidelines for physical therapy

furnished under arrangements (see 42 CFR 413.106) and the limitation on

costs that are substantially out of line with those comparable home

health agencies (see 42 CFR 413.9).

Table 3.--Per Visit Limits for Home Health Agencies

------------------------------------------------------------------------

Labor Nonlabor

Type of visit Limit portion portion \1\

------------------------------------------------------------------------

MSA (NECMA) location:

Skilled nursing care......... $101.20 $79.01 $22.28

Physical therapy............. 110.81 86.51 24.30

Speech pathology............. 111.60 86.96 24.64

Occupational therapy......... 110.52 85.97 24.55

Medical social services...... 146.39 114.01 32.38

Home health aide............. 49.22 38.34 10.88

Non-MSA location:

Skilled nursing care......... 113.07 92.35 20.72

Physical therapy............. 123.38 100.66 22.72

Speech pathology............. 134.19 109.22 24.97

Occupational therapy......... 133.22 108.26 24.96

Medical social services...... 189.57 154.33 35.24

Home health aide............. 49.03 40.03 9.00

------------------------------------------------------------------------

\1\ Nonlabor portion of limits for HHAs located in Alaska, Hawaii,

Puerto Rico, and the Virgin Islands are increased by multiplying them

by the following cost-of-living adjustment factors:

------------------------------------------------------------------------

Adjustment

Location factor

------------------------------------------------------------------------

Alaska..................................................... 1.250

Hawaii:

County of Honolulu..................................... 1.225

County of Hawaii....................................... 1.150

County of Kauai........................................ 1.200

County of Maui......................................... 1.225

County of Kalawao...................................... 1.225

Puerto Rico................................................ 1.100

Virgin Islands............................................. l.125

------------------------------------------------------------------------

X. Wage Indexes

Table 4a.--Wage Index for Urban Areas

------------------------------------------------------------------------

Urban area (Constituent

counties or county Wage index

equivalents)

------------------------------------------------------------------------

0040........................... Abilene, TX............ 0.8048

Taylor, TX

0060........................... Aguadilla, PR.......... 0.4237

Aguada, PR

Aguadilla, PR

Moca, PR

[[Page 35616]]

0080........................... Akron, OH.............. 0.9853

Portage, OH

Summit, OH

0120........................... Albany, GA............. 0.8597

Dougherty, GA

Lee, GA

0160........................... Albany-Schenectady- 0.8624

Troy, NY.

Albany, NY

Montgomery, NY

Rensselaer, NY

Saratoga, NY

Schenectady, NY

Schoharie, NY

0200........................... Albuquerque, NM........ 0.9344

Bernalillo, NM

Sandoval, NM

Valencia, NM

0220........................... Alexandria, LA......... 0.8119

Rapides, LA

0240........................... Allentown-Bethlehem- 0.9992

Easton, PA.

Carbon, PA

Lehigh, PA

Northampton, PA

0280........................... Altoona, PA............ 0.9510

Blair, PA

0320........................... Amarillo, TX........... 0.8730

Potter, TX

Randall, TX

0380........................... Anchorage, AK.......... 1.3224

Anchorage, AK

0440........................... Ann Arbor, MI.......... 1.1662

Lenawee, MI

Livingston, MI

Washtenaw, MI

0450........................... Anniston, AL........... 0.8023

Calhoun, AL

0460........................... Appleton-Oshkosh- 0.8890

Neenah, WI.

Calumet, WI

Outagamie, WI

Winnebago, WI

0470........................... Arecibo, PR............ 0.4397

Arecibo, PR

Camuy, PR

Hatillo, PR

0480........................... Asheville, NC.......... 0.9334

Buncombe, NC

Madison, NC

0500........................... Athens, GA............. 0.9408

Clarke, GA

Madison, GA

Oconee, GA

0520........................... *Atlanta, GA........... 1.0033

Barrow, GA

Bartow, GA

Carroll, GA

Cherokee, GA

Clayton, GA

Cobb, GA

Coweta, GA

DeKalb, 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

[[Page 35617]]

0560........................... Atlantic City--Cape 1.1077

May, NJ.

Atlantic City, NJ

Cape May, NJ

0600........................... Augusta-Aiken, GA-SC... 0.8836

Columbia, GA

McDuffie, GA

Richmond, GA

Aiken, SC

Edgefield, SC

0640........................... Austin-San Marcos, TX.. 0.9254

Bastrop, TX

Caldwell, TX

Hays, TX

Travis, TX

Williamson, TX

0680........................... Bakersfield, CA........ 1.0189

Kern, CA

0720........................... *Baltimore, MD......... 0.9798

Anne Arundel, MD

Baltimore, MD

Baltimore City, MD

Carroll, MD

Harford, MD

Howard, MD

Queen Annes, MD

0733........................... Bangor, ME............. 0.9391

Penobscot, ME

0743........................... Barnstable-Yarmouth, MA 1.3651

Barnstable, MA

0760........................... Baton Rouge, LA........ 0.8433

Ascension, LA

East Baton Rouge, LA

Livingston, LA

West Baton Rouge, LA

0840........................... Beaumont-Port Arthur, 0.8576

TX.

Hardin, TX

Jefferson, TX

Orange, TX

0860........................... Bellingham, WA......... 1.1317

Whatcom, WA

0870........................... Benton Harbor, MI...... 0.8506

Berrien, MI

0875........................... *Bergen-Passaic, NJ.... 1.1785

Bergen, NJ

Passaic, NJ

0880........................... Billings, MT........... 0.9086

Yellowstone, MT

0920........................... Biloxi-Gulfport- 0.8554

Pascagoula, MS.

Hancock, MS

Harrison, MS

Jackson, MS

0960........................... Binghamton, NY......... 0.8822

Broome, NY

Tioga, NY

1000........................... Birmingham, AL......... 0.9036

Blount, AL

Jefferson, AL

St. Clair, AL

Shelby, AL

1010........................... Bismarck, ND........... 0.7923

Burleigh, ND

Morton, ND

1020........................... Bloomington, IN........ 0.8652

Monroe, IN

1040........................... Bloomington-Normal, IL. 0.8990

McLean, IL

1080........................... Boise City, ID......... 0.9383

Ada, ID

Canyon, ID

1123........................... *Boston-Worcester 1.1613

Lawrence-Lowell-

Brockton, MA-NH.

Bristol, MA

Essex, MA

[[Page 35618]]

Middlesex, MA

Norfolk, MA

Plymouth, MA

Suffolk, MA

Worcester, MA

Hillsborough, NH

Merrimack, NH

Rockingham, NH

Strafford, NH

1125........................... Boulder-Longmont, CO... 0.9522

Boulder, CO

1145........................... Brazoria, TX........... 0.9201

Brazoria, TX

1150........................... Bremerton, WA.......... 1.0901

Kitsap, WA

1240........................... Brownsville-Harlingen- 0.8542

San Benito, TX.

Cameron, TX

1260........................... Bryan-College Station, 0.8851

TX.

Brazos, TX

1280........................... *Buffalo-Niagara Falls, 0.9107

NY.

Erie, NY

Niagara, NY

1303........................... Burlington, VT......... 1.0068

Chittenden, VT

Franklin, VT

Grand Isle, VT

1310........................... Caguas, PR............. 0.4573

Caguas, PR

Cayey, PR

Cidra, PR

Gurabo, PR

San Lorenzo, PR

1320........................... Canton-Massillon, OH... 0.8648

Carroll, OH

Stark, OH

1350........................... Casper, WY............. 0.8821

Natrona, WY

1360........................... Cedar Rapids, IA....... 0.8458

Linn, IA

1400........................... Champaign-Urbana, IL... 0.9391

Champaign, IL

1440........................... Charleston-North 0.8963

Charleston, SC.

Berkeley, SC

Charleston, SC

Dorchester, SC

1480........................... Charleston, WV......... 0.9526

Kanawha, WV

Putnam, WV

1520........................... *Charlotte-Gastonia- 0.9620

Rock Hill, NC-SC.

Cabarrus, NC

Gaston, NC

Lincoln, NC

Mecklenburg, NC

Rowan, NC

Union, NC

York, SC

1540........................... Charlottesville, VA.... 0.9155

Albemarle, VA

Charlottesville City,

VA

Fluvanna, VA

Greene, VA

1560........................... Chattanooga, TN-GA..... 0.8847

Catoosa, GA

Dade, GA

Walker, GA

Hamilton, TN

Marion, TN

1580........................... Cheyenne, WY........... 0.7678

Laramie, WY

1600........................... *Chicago, IL........... 1.0760

Cook, IL

DeKalb, IL

[[Page 35619]]

DuPage, IL Grundy, IL

Kane, IL

Kendall, IL

Lake, IL

McHenry, IL

Will, IL

1620........................... Chico-Paradise, CA..... 1.0417

Butte, CA

1640........................... *Cincinnati, OH-KY-IN.. 0.9570

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- 0.7716

Hopkinsville, TN-KY.

Christian, KY

Montgomery, TN

1680........................... *Cleveland-Lorain- 0.9886

Elyria, OH.

Ashtabula, OH

Cuyahoga, OH

Geauga, OH

Lake, OH

Lorain, OH

Medina, OH

1720........................... Colorado Springs, CO... 0.9341

El Paso, CO

1740........................... Columbia, MO........... 0.8899

Boone, MO

1760........................... Columbia, SC........... 0.9160

Lexington, SC

Richland, SC

1800........................... Columbus, GA-AL........ 0.7779

Russell, AL

Chattanoochee, GA

Harris, GA

Muscogee, GA

1840........................... *Columbus, OH.......... 0.9681

Delaware, OH

Fairfield, OH

Franklin, OH

Licking, OH

Madison, OH

Pickaway, OH

1880........................... Corpus Christi, TX..... 0.8881

Nueces, TX

San Patricio, TX

1900........................... Cumberland, MD-WV...... 0.8671

Allegany, MD

Mineral, WV

1920........................... *Dallas, TX............ 0.9729

Collin, TX

Dallas, TX

Denton, TX

Ellis, TX

Henderson, TX

Hunt, TX

Kaufman, TX

Rockwall, TX

1950........................... Danville, VA........... 0.8497

Danville City, VA

Pittsylvania, VA

1960........................... Davenport-Rock Island- 0.8388

Moline, IA-IL.

Scott, IA

Henry, IL

Rock Island, IL

[[Page 35620]]

2000........................... Dayton-Springfield, OH. 0.9559

Clark, OH

Greene, OH

Miami, OH

Montgomery, OH

2020........................... Daytona Beach, FL...... 0.8871

Flagler, FL

Volusia, FL

2030........................... Decatur, AL............ 0.8384

Lawrence, AL

Morgan, AL

2040........................... Decatur, IL............ 0.7848

Macon, IL

2080........................... *Denver, CO............ 1.0166

Adams, CO

Arapahoe, CO

Denver, CO

Douglas, CO

Jefferson, CO

2120........................... Des Moines, IA......... 0.8815

Dallas, IA

Polk, IA

Warren, IA

2160........................... *Detroit, MI........... 1.0724

Lapeer, MI

Macomb, MI

Monroe, MI

Oakland, MI

St. Clair, MI

Wayne, MI

2180........................... Dothan, AL............. 0.7740

Dale, AL

Houston, AL

2190........................... Dover, DE.............. 0.8997

Kent, DE

2200........................... Dubuque, IA............ 0.8112

Dubuque, IA

2240........................... Duluth-Superior, MN-WI. 0.9416

St. Louis, MN

Douglas, WI

2281........................... Dutchess County, NY.... 1.0589

Dutchess, NY

2290........................... Eau Claire, WI......... 0.8678

Chippewa, WI

Eau Claire, WI

2320........................... El Paso, TX............ 0.9464

El Paso, TX

2330........................... Elkhart-Goshen, IN..... 0.8801

Elkhart, IN

2335........................... Elmira, NY............. 0.8417

Chemung, NY

2340........................... Enid, OK............... 0.7862

Garfield, OK

2360........................... Erie, PA............... 0.9159

Erie, PA

2400........................... Eugene-Springfield, OR. 1.1271

Lane, OR

2440........................... Evansville-Henderson, 0.8983

IN-KY.

Posey, IN

Vanderburgh, IN

Warrick, IN

Henderson, KY

2520........................... Fargo-Moorhead, ND-MN.. 0.9045

Clay, MN

Cass, ND

2560........................... Fayetteville, NC....... 0.9007

Cumberland, NC

2580........................... Fayetteville-Springdale- 0.7220

Rogers, AR.

Benton, AR

Washington, AR

2620........................... Flagstaff, AZ-UT....... 0.9019

Coconino, AZ

[[Page 35621]]

Kane, UT

2640........................... Flint, MI.............. 1.1248

Genesee, MI

2650........................... Florence, AL........... 0.7938

Colbert, AL

Lauderdale, AL

2655........................... Florence, SC........... 0.8594

Florence, SC

2670........................... Fort Collins-Loveland, 1.0562

CO.

Larimer, CO

2680........................... *Ft. Lauderdale, FL.... 1.0548

Broward, FL

2700........................... Fort Myers-Cape Coral, 0.9032

FL.

Lee, FL

2710........................... Fort Pierce-Port St. 1.0169

Lucie, FL.

Martin, FL

St. Lucie, FL

2720........................... Fort Smith, AR-OK...... 0.7864

Crawford, AR

Sebastian, AR

Sequoyah, OK

2750........................... Fort Walton Beach, FL.. 0.9192

Okaloosa, FL

2760........................... Fort Wayne, IN......... 0.8800

Adams, IN

Allen, IN

DeKalb, IN

Huntington, IN

Wells, IN

Whitley, IN

2800........................... *Forth Worth-Arlington, 1.0153

TX.

Hood, TX

Johnson, TX

Parker, TX

Tarrant, TX

2840........................... Fresno, CA............. 1.1183

Fresno, CA

Madera, CA

2880........................... Gadsden, AL............ 0.8881

Etowah, AL

2900........................... Gainesville, FL........ 0.9434

Alachua, FL

2920........................... Galveston-Texas City, 1.0997

TX.

Galveston, TX

2960........................... Gary, IN............... 0.9641

Lake, IN

Porter, IN

2975........................... Glens Falls, NY........ 0.8562

Warren, NY

Washington, NY

2980........................... Goldsboro, NC.......... 0.8393

Wayne, NC

2985........................... Grand Forks, ND-MN..... 0.9011

Polk, MN

Grand Forks, ND

2995........................... Grand Junction, CO..... 0.8336

Mesa, CO

3000........................... Grand Rapids-Muskegon- 1.0119

Holland, MI.

Allegan, MI

Kent, MI

Muskegon, MI

Ottawa, MI

3040........................... Great Falls, MT........ 0.8681

Cascade, MT

3060........................... Greeley, CO............ 0.9690

Weld, CO

3080........................... Green Bay, WI.......... 0.9038

Brown, WI

3120........................... *Greensboro-Winston- 0.9332

Salem-High Point, NC.

Alamance, NC

Davidson, NC

Davie, NC

[[Page 35622]]

Forsyth, NC

Guilford, NC

Randolph, NC

Stokes, NC

Yadkin, NC

3150........................... Greenville, NC......... 0.9078

Pitt, NC

3160........................... Greenville-Spartanburg- 0.8927

Anderson, SC.

Anderson, SC

Cherokee, SC

Greenville, SC

Pickens, SC

Spartanburg, SC

3180........................... Hagerstown, MD......... 0.9175

Washington, MD

3200........................... Hamilton-Middletown, OH 0.9490

Butler, OH

3240........................... Harrisburg-Lebanon- 1.0158

Carlisle, PA.

Cumberland, PA

Dauphin, PA

Lebanon, PA

Perry, PA

3283........................... *Hartford, CT.......... 1.2367

Hartford, CT

Litchfield, CT

Middlesex, CT

Tolland, CT

3285........................... Hattiesburg, MS........ 0.7252

Forrest, MS

Lamar, MS

3290........................... Hickory-Morganton- 0.8626

Lenoir, NC.

Alexander, NC

Burke, NC

Caldwell, NC

Catawba, NC

3320........................... Honolulu, HI........... 1.1461

Honolulu, HI

3350........................... Houma, LA.............. 0.7853

Lafourche, LA

Terrebonne, LA

3360........................... *Houston, TX........... 1.0000

Chambers, TX

Fort Bend, TX

Harris, TX

Liberty, TX

Montgomery, TX

Waller, TX

3400........................... Huntington-Ashland, WV- 0.9174

KY-OH.

Boyd, KY

Carter, KY

Greenup, KY

Lawrence, OH

Cabell, WV

Wayne, WV

3440........................... Huntsville, AL......... 0.8206

Limestone, AL

Madison, AL

3480........................... *Indianapolis, IN...... 0.9903

Boone, IN

Hamilton, IN

Hancock, IN

Hendricks, IN

Johnson, IN

Madison, IN

Marion, IN

Morgan, IN

Shelby, IN

3500........................... Iowa City, IA.......... 0.9361

Johnson, IA

3520........................... Jackson, MI............ 0.9045

Jackson, MI

3560........................... Jackson, MS............ 0.7884

[[Page 35623]]

Hinds, MS

Madison, MS

Rankin, MS

3580........................... Jackson, TN............ 0.8288

Madison, TN

Chester, TN

3600........................... Jacksonville, FL....... 0.9086

Clay, FL

Duval, FL

Nassau, FL

St. Johns, FL

3605........................... Jacksonville, NC....... 0.7055

Onslow, NC

3610........................... Jamestown, NY.......... 0.7670

Chautaqua, NY

3620........................... Janesville-Beloit, WI.. 0.8645

Rock, WI

3640........................... Jersey City, NJ........ 1.1382

Hudson, NJ

3660........................... Johnson City-Kingsport- 0.8884

Bristol, TN-VA.

Carter, TN

Hawkins, TN

Sullivan, TN

Unicoi, TN

Washington, TN

Bristol City, VA

Scott, VA

Washington, VA

3680........................... Johnstown, PA.......... 0.8398

Cambria, PA

Somerset, PA

3700........................... Jonesboro, AR.......... 0.7220

Craighead, AR

3710........................... Joplin, MO............. 0.7638

Jasper, MO

Newton, MO

3720........................... Kalamazoo-Battlecreek, 1.0542

MI.

Calhoun, MI

Kalamazoo, MI

Van Buren, MI

3740........................... Kankakee, IL........... 0.9115

Kankakee, IL

3760........................... *Kansas City, KS-MO.... 0.9478

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............ 0.9145

Kenosha, WI

3810........................... Killeen-Temple, TX..... 1.0392

Bell, TX

Coryell, TX

3840........................... Knoxville, TN.......... 0.8502

Anderson, TN

Blount, TN

Knox, TN

Loudon, TN

Sevier, TN

Union, TN

3850........................... Kokomo, IN............. 0.8590

Howard, IN

Tipton, IN

3870........................... La Crosse, WI-MN....... 0.8618

Houston, MN

La Crosse, WI

[[Page 35624]]

3880........................... Lafayette, LA.......... 0.8163

Acadia, LA

Lafayette, LA

St. Landry, LA

St. Martin, LA

3920........................... Lafayette, IN.......... 0.8781

Clinton, IN

Tippecanoe, IN

3960........................... Lake Charles, LA....... 0.8034

Calcasieu, LA

3980........................... Lakeland-Winter Haven, 0.8774

FL.

Polk, FL

4000........................... Lancaster, PA.......... 0.9583

Lancaster, PA

4040........................... Lansing-East Lansing, 1.0010

MI.

Clinton, MI

Eaton, MI

Ingham, MI

4080........................... Laredo, TX............. 0.7073

Webb, TX

4100........................... Las Cruces, NM......... 0.8497

Dona Ana, NM

4120........................... *Las Vegas, NV-AZ...... 1.0870

Mohave, AZ

Clark, NV

Nye, NV

4150........................... Lawrence, KS........... 0.8597

Douglas, KS

4200........................... Lawton, OK............. 0.8365

Comanche, OK

4243........................... Lewiston-Auburn, ME.... 0.9410

Androscoggin, ME

4280........................... Lexington, KY.......... 0.8293

Bourbon, KY

Clark, KY

Fayette, KY

Jessamine, KY

Madison, KY

Scott, KY

Woodford, KY

4320........................... Lima, OH............... 0.8732

Allen, OH

Auglaize, OH

4360........................... Lincoln, NE............ 0.9161

Lancaster, NE

4400........................... Little Rock-North 0.8597

Little Rock, AR.

Faulkner, AR

Lonoke, AR

Pulaski, AR

Saline, AR

4420........................... Longview-Marshall, TX.. 0.8645

Gregg, TX

Harrison, TX

Upshur, TX

4480*.......................... Los Angeles-Long Beach, 1.2343

CA.

Los Angeles, CA

4520........................... Louisville, KY-IN...... 0.9447

Clark, IN

Floyd, IN

Harrison, IN

Scott, IN

Bullitt, KY

Jefferson, KY

Oldham, KY

4600........................... Lubbock, TX............ 0.8510

Lubbock, TX

4640........................... Lynchburg, VA.......... 0.8052

Amherst, VA

Bedford, VA

Bedford City, VA

Campbell, VA

Lynchburg City, VA

[[Page 35625]]

4680........................... Macon, GA.............. 0.8824

Bibb, GA

Houston, GA

Jones, GA

Peach, GA

Twiggs, GA

4720........................... Madison, WI............ 1.0021

Dane, WI

4800........................... Mansfield, OH.......... 0.8524

Crawford, OH

Richland, OH

4840........................... Mayaguez, PR........... 0.4215

Anasco, PR

Cabo Rojo, PR

Hormigueros, PR

Mayaguez, PR

Sabana Grande, PR

San German, PR

4880........................... McAllen-Edinburg- 0.8485

Mission, TX.

Hidalgo, TX

4890........................... Medford-Ashland, OR.... 1.0068

Jackson, OR

4900........................... Melbourne-Titusville- 0.9068

Palm Bay, FL.

Brevard, Fl

4920........................... *Memphis, TN-AR-MS..... 0.8166

Crittenden, AR

DeSoto, MS

Fayette, TN

Shelby, TN

Tipton, TN

4940........................... Merced, CA............. 1.0660

Merced, CA

5000........................... *Miami, FL............. 0.9938

Dade, FL

5015........................... *Middlesex-Somerset- 1.0883

Hunterdon, NJ.

Hunterdon, NJ

Middlesex, NJ

Somerset, NJ

5080........................... *Milwaukee-Waukesha, WI 0.9645

Milwaukee, WI

Ozaukee, WI

Washington, WI

Waukesha, WI

5120........................... *Minneapolis-St. Paul, 1.0777

MN-WI.

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

5160........................... Mobile, AL............. 0.7981

Baldwin, AL

Mobile, AL

5170........................... Modesto, CA............ 1.0600

Stanislaus, CA

5190........................... *Monmouth-Ocean, NJ.... 1.0833

Monmouth, NJ

Ocean, NJ

5200........................... Monroe, LA............. 0.8211

Ouachita, LA

5240........................... Montgomery, AL......... 0.7876

Autauga, AL

Elmore, AL

Montgomery, AL

5280........................... Muncie, IN............. 0.9714

[[Page 35626]]

Delaware, IN

5330........................... Myrtle Beach, SC....... 0.7790

Horry, SC

5345........................... Naples, FL............. 1.0199

Collier, FL

5360........................... *Nashville, TN......... 0.9081

Cheatham, TN

Davidson, TN

Dickson, TN

Robertson, TN

Rutherford TN

Sumner, TN

Williamson, TN

Wilson, TN

5380........................... *Nassau-Suffolk, NY.... 1.3547

Nassau, NY

Suffolk, NY

5483........................... *New Haven-Bridgeport- 1.2704

Stamford-Danbury-

Waterbury, CT.

Fairfield, CT

New Haven, CT

5523........................... New London-Norwich, CT. 1.2262

New London, CT

5560........................... * New Orleans, LA...... 0.9294

Jefferson, LA

Orleans, LA

Plaquemines, LA

St. Bernard, LA

St. Charles, LA

St. James, LA

St. John Baptist, LA

St. Tammany, LA

5600........................... * New York, NY......... 1.4154

Bronx, NY

Kings, NY

New York, NY

Putnam, NY

Queens, NY

Richmond, NY

Rockland, NY

Westchester, NY

5640........................... * Newark, NJ........... 1.1762

Essex, NJ

Morris, NJ

Sussex, NJ

Union, NJ

Warren, NJ

5660........................... Newburgh, NY-PA........ 1.0803

Orange, NY

Pike, PA

5720........................... * Norfolk-Virginia 0.8348

Beach-Newport News, VA-

NC.

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.......... 1.4991

Alameda, CA

Contra Costa, CA

5790........................... Ocala, FL.............. 0.9105

Marion, FL

5800........................... Odessa-Midland, TX..... 0.8482

Ector, TX

[[Page 35627]]

Midland, TX

5880........................... * Oklahoma City, OK.... 0.8371

Canadian, OK

Cleveland, OK

Logan, OK

McClain, OK

Oklahoma, OK

Pottawatomie, OK

5910........................... Olympia, WA............ 1.0689

Thurston, WA

5920........................... Omaha, NE-IA........... 0.9480

Pottawattamie, IA

Cass, NE

Douglas, NE

Sarpy, NE

Washington, NE

5945........................... * Orange County, CA.... 1.1966

Orange, CA

5960........................... * Orlando, FL.......... 0.9470

Lake, FL

Orange, FL

Osceola, FL

Seminole, FL

5990........................... Owensboro, KY.......... 0.7575

Daviess, KY

6015........................... Panama City, FL........ 0.8061

Bay, FL

6020........................... Parkersburg-Marietta, 0.7877

WV-OH.

Washington, OH

Wood, WV

6080........................... Pensacola, FL.......... 0.8202

Escambia, FL

Santa Rosa, FL

6120........................... Peoria-Pekin, IL....... 0.8905

Peoria, IL

Tazewell, IL

Woodford, IL

6160........................... * Philadelphia, PA-NJ.. 1.1237

Burlington, NJ

Camden, NJ

Gloucester, NJ

Salem, NJ

Bucks, PA

Chester, PA

Delaware, PA

Montgomery, PA

Philadelphia, PA

6200........................... * Phoenix-Mesa, AZ..... 0.9810

Maricopa, AZ

Pinal, AZ

6240........................... Pine Bluff, AR......... 0.7886

Jefferson, AR

6280........................... *Pittsburgh, PA........ 0.9701

Allegheny, PA

Beaver, PA

Butler, PA

Fayette, PA

Washington, PA

Westmoreland, PA

6323........................... Pittsfield, MA......... 1.0552

Berkshire, MA

6340........................... Pocatelo, ID........... 0.8784

Bannock ID

6360........................... Ponce, PR.............. 0.4685

Guayanilla, PR

Juana Diaz, PR

Penuelas, PR

Ponce, PR

Villalba, PR

Yauco, PR

6403........................... Portland, ME........... 0.9619

Cumberland, ME

[[Page 35628]]

Sagadahoc, ME

York, ME

6440........................... *Portland-Vancouver, OR- 1.1235

WA.

Clackamas, OR

Columbia, OR

Multnomah, OR

Washington, OR

Yamhill, OR

Clark, WA

6483........................... Providence-Warwick- 1.1092

Pawtucket, RI.

Bristol, RI

Kent, RI

Newport, RI

Providence, RI

Washington, RI

Statewide, RI

6520........................... Provo-Orem, UT......... 1.01116

Utah, UT

6560........................... Pueblo, CO............. 0.8284

Pueblo, CO

6580........................... Punta Gorda, FL........ 0.8999

Charlotte, FL

6600........................... Racine, WI............. 0.8835

Racine, WI

6640........................... Raleigh-Durham-Chapel 0.9728

Hill, NC.

Chatham, NC

Durham, NC

Franklin, NC

Johnston, NC

Orange, NC

Wake, NC

6660........................... Rapid City, SD......... 0.8455

Pennington, SD

6680........................... Reading, PA............ 0.9445

Berks, PA

6690........................... Redding, CA............ 1.1605

Shasta, CA

6720........................... Reno, NV............... 1.1018

Washoe, NV

6740........................... Richland-Kennewick- 0.9970

Pasco, WA.

Benton, WA

Franklin, WA

6760........................... Richmond-Petersburg, VA 0.9194

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 1.1379

Bernardino, CA.

Riverside, CA

San Bernardino, CA

6800........................... Roanoke, VA............ 0.8702

Botetourt, VA

Roanoke, VA

Roanoke City, VA

Salem City, VA

6820........................... Rochester, MN.......... 1.0428

Olmsted, MN

6840........................... *Rochester, NY......... 0.9649

Genesee, NY

Livingston, NY

Monroe, NY

Ontario, NY

Orleans, NY

[[Page 35629]]

Wayne, NY

6880........................... Rockford, IL........... 0.8994

Boone, IL

Ogle, IL

Winnebago, IL

6895........................... Rocky Mount, NC........ 0.8955

Edgecombe, NC

Nash, NC

6920........................... *Sacramento, CA........ 1.2351

El Dorado, CA

Placer, CA

Sacramento, CA

6960........................... Saginaw-Bay City- 0.9612

Midland, MI.

Bay, MI

Midland, MI

Saginaw, MI

6980........................... St. Cloud, MN.......... 0.9457

Benton, MN

Stearns, MN

7000........................... St. Joseph, MO......... 0.8551

Andrews, MO

Buchanan, MO

7040........................... *St. Louis, MO-IL...... 0.9022

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

7080........................... Salem, OR.............. 0.9728

Marion, OR

Polk, OR

7120........................... Salinas, CA............ 1.3803

Monterey, CA

7160........................... *Salt Lake City-Ogden, 0.9677

UT.

Davis, UT

Salt Lake, UT

Weber, UT

7200........................... San Angelo, TX......... 0.7577

Tom Green, TX

7240........................... *San Antonio, TX....... 0.8390

Bexar, TX

Comal, TX

Guadalupe, TX

Wilson, TX

7320........................... *San Diego, CA......... 1.2134

San Diego, CA

7360........................... *San Francisco, CA..... 1.4260

Marin, CA

San Francisco, CA

San Mateo, CA

7400........................... *San Jose, CA.......... 1.4519

Santa Clara, CA

7440........................... *San Juan-Bayamon, PR.. 0.4506

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

[[Page 35630]]

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- 1.1561

Atascadero-Paso

Robles, CA.

San Luis Obispo, CA

7480........................... Santa Barbara-Santa 1.1242

Maria-Lompoc, CA.

Santa Barbara, CA

7485........................... Santa Cruz-Watsonville, 1.3520

CA.

Santa Cruz, CA

7490........................... Santa Fe, NM........... 1.0823

Los Alamos, NM

Santa Fe, NM

7500........................... Santa Rosa, CA......... 1.2526

Sonoma, CA

7510........................... Sarasota-Bradenton, FL. 0.9789

Manatee, FL

Sarasota, FL

7520........................... Savannah, GA........... 0.9649

Bryan, GA

Chatham, GA

Effingham, GA

7560........................... Scranton-Wilkes-Barre- 0.8752

Hazleton, PA.

Columbia, PA

Lackawanna, PA

Luzerne, PA

Wyoming, PA

7600........................... *Seattle-Bellevue- 1.1384

Everett, WA.

Island, WA

King, WA

Snohomish, WA

7610........................... Sharon, PA............. 0.8885

Mercer, PA

7620........................... Sheboygan, WI.......... 0.7764

Sheboygan, WI

7640........................... Sherman-Denison, TX.... 0.8614

Grayson, TX

7680........................... Shreveport-Bossier 0.9359

City, LA.

Bossier, LA

Caddo, LA

Webster, LA

7720........................... Sioux City, IA-NE...... 0.8313

Woodbury, IA

Dakota, NE

7760........................... Sioux Falls, SD........ 0.8620

Lincoln, SD

Minnehaha, SD

7800........................... South Bend, IN......... 0.9934

St. Joseph, IN

7840........................... Spokane, WA............ 1.0524

Spokane, WA

7880........................... Springfield, IL........ 0.8671

Menard, IL

Sangamon, IL

7920........................... Springfield, MO........ 0.7823

Christian, MO

Greene, MO

Webster, MO

[[Page 35631]]

8003........................... Springfield, MA........ 1.0586

Hampden, MA

Hampshire, MA

8050........................... State College, PA...... 0.9538

Centre, PA

8080........................... Steubenville-Weirton, 0.8266

OH-WV.

Jefferson, OH

Brooke, WV

Hancock, WV

8120........................... Stockton-Lodi, CA...... 1.1330

San Joaquin, CA

8140........................... Sumter, SC............. 0.7699

Sumter, SC

8160........................... Syracuse, NY........... 0.9395

Cayuga, NY

Madison, NY

Onondaga, NY

Oswego, NY

8200........................... Tacoma, WA............. 1.0860

Pierce, WA

8240........................... Tallahassee, FL........ 0.8313

Gadsden, FL

Leon, FL

8280........................... * Tampa-St. Petersburg- 0.9250

Clearwater, FL.

Hernando, FL

Hillsborough, FL

Pasco, FL

Pinellas, FL

8320........................... Terre Haute, IN........ 0.8591

Clay, IN

Vermillion, IN

Vigo, IN

8360........................... Texarkana, AR- 0.8503

Texarkana, TX.

Miller, AR

Bowie, TX

8400........................... Toledo, OH............. 1.0361

Fulton, OH

Lucas, OH

Wood, OH

8440........................... Topeka, KS............. 1.0086

Shawnee, KS

8480........................... Trenton, NJ............ 1.0549

Mercer, NJ

8520........................... Tucson, AZ............. 0.9068

Pima, AZ

8560........................... Tulsa, OK.............. 0.8095

Creek, OK

Osage, OK

Rogers, OK

Tulsa, OK

Wagoner, OK

8600........................... Tuscaloosa, AL......... 0.7784

Tuscaloosa, AL

8640........................... Tyler, TX.............. 0.9996

Smith, TX

8680........................... Utica-Rome, NY......... 0.8413

Herkimer, NY

Oneida, NY

8720........................... Vallejo-Fairfield-Napa, 1.3947

CA.

Napa, CA

Solano, CA

8735........................... Ventura, CA............ 1.1454

Ventura, CA

8750........................... Victoria, TX........... 0.8393

Victoria, TX

8760........................... Vineland-Millville- 0.9993

Bridgeton, NJ.

Cumberland, NJ

8780........................... Visalia-Tulare- 1.0151

Porterville, CA.

Tulare, CA

8800........................... Waco, TX............... 0.7772

McLennan, TX

8840........................... *Washington, DC-MD-VA- 1.0823

WV.

[[Page 35632]]

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, 0.8705

IA.

Black Hawk, IA

8940........................... Wausau, WI............. 1.0323

Marathon, WI

8960........................... West Palm Beach-Boca 1.0202

Raton, FL.

Palm Beach, FL

9000........................... Wheeling, OH-WV........ 0.7563

Belmont, OH

Marshall, WV

Ohio, WV

9040........................... Wichita, KS............ 0.9369

Butler, KS

Harvey, KS

Sedgwick, KS

9080........................... Wichita Falls, TX...... 0.8041

Archer, TX

Wichita, TX

9140........................... Williamsport, PA....... 0.8467

Lycoming, PA

9160........................... Wilmington-Newark, DE- 1.1315

MD.

New Castle, DE

Cecil, MD

9200........................... Wilmington, NC......... 0.9046

New Hanover, NC

Brunswick, NC

9260........................... Yakima, WA............. 1.0026

Yakima, WA

9270........................... Yolo, CA............... 1.1444

Yolo, CA

9280........................... York, PA............... 0.9104

York, PA

9320........................... Youngstown-Warren, OH.. 0.9742

Columbiana, OH

Mahoning, OH

Trumbull, OH

9340........................... Yuba City, CA.......... 1.0414

Sutter, CA

Yuba, CA

9360........................... Yuma, AZ............... 0.9497

Yuma, AZ

------------------------------------------------------------------------

* Large Urban Area.

[[Page 35633]]

Table 4b.--Wage Index for Rural Areas

------------------------------------------------------------------------

Nonurban area Wage index

------------------------------------------------------------------------

Alabama.................................................... 0.7122

Alaska..................................................... 1.2444

Arizona.................................................... 0.7928

Arkansas................................................... 0.6954

California................................................. 1.0002

Colorado................................................... 0.8092

Connecticut................................................ 1.2759

Delaware................................................... 0.9447

Florida.................................................... 0.8668

Georgia.................................................... 0.7653

Hawaii..................................................... 1.0245

Idaho...................................................... 0.8277

Illinois................................................... 0.7553

Indiana.................................................... 0.8124

Iowa....................................................... 0.7373

Kansas..................................................... 0.7107

Kentucky................................................... 0.7753

Louisiana.................................................. 0.7232

Maine...................................................... 0.8317

Maryland................................................... 0.8427

Massachusetts.............................................. 1.0070

Michigan................................................... 0.8830

Minnesota.................................................. 0.8144

Mississippi................................................ 0.6793

Missouri................................................... 0.7261

Montana.................................................... 0.8128

Nebraska................................................... 0.7214

Nevada..................................................... 0.8775

New Hampshire.............................................. 0.9745

New Jersey \1\.............................................

New Mexico................................................. 0.8000

New York................................................... 0.8558

North Carolina............................................. 0.7950

North Dakota............................................... 0.7358

Ohio....................................................... 0.8332

Oklahoma................................................... 0.6942

Oregon..................................................... 0.9664

Pennsylvania............................................... 0.8453

Puerto Rico................................................ 0.4026

Rhode Island \1\...........................................

South Carolina............................................. 0.7668

South Dakota............................................... 0.7063

Tennessee.................................................. 0.7341

Texas...................................................... 0.7462

Utah....................................................... 0.8848

Vermont.................................................... 0.8921

Virginia................................................... 0.7713

Washington................................................. 0.9933

West Virginia.............................................. 0.7904

Wisconsin.................................................. 0.8430

Wyoming.................................................... 0.8177

------------------------------------------------------------------------

\1\ All counties within the State are classified urban.

Table 5.--Cost Reporting Year Adjustment Factor \1\

------------------------------------------------------------------------

The

If the HHA cost reporting period begins adjustment

factor is

------------------------------------------------------------------------

August 1, 1997............................................. 1.00251

September 1, 1997.......................................... 1.00509

October 1, 1997............................................ 1.00771

November 1, 1997........................................... 1.01038

December 1, 1997........................................... 1.01311

January 1, 1998............................................ 1.01588

February 1,1998............................................ 1.01871

March 1, 1998.............................................. 1.02154

April 1, 1998.............................................. 1.02435

May 1, 1998................................................ 1.02714

June 1, 1998............................................... 1.02993

------------------------------------------------------------------------

\1\ Based on compounded projected market basket inflation rates.

These adjustment factors are subject to change based on later

estimates of cost increases.

If, for any reason, we do not publish a new schedule of limits to

be effective on July 1, 1998 or do not announce other changes in the

current schedule by that date, the current limits will continue in

effect. Intermediaries will be notified of the adjustment factors to be

applied until a new schedule of limits or other provision is issued.

Table 6.--Monthly Index Levels for Calculating Inflation Factors to Be

Applied to Home Health Agency Cost Limits

------------------------------------------------------------------------

Month Index level

------------------------------------------------------------------------

July 1997.................................................. 1.12866

August 1997................................................ 1.13200

September 1997............................................. 1.13499

October 1997............................................... 1.13799

November 1997.............................................. 1.14100

December 1997.............................................. 1.14499

January 1998............................................... 1.14899

February 1998.............................................. 1.15300

March 1998................................................. 1.15500

April 1998................................................. 1.15700

May 1998................................................... 1.15900

June 1998.................................................. 1.16266

July 1998.................................................. 1.16632

August 1998................................................ 1.17000

September 1998............................................. 1.17299

October 1998............................................... 1.17599

November 1998.............................................. 1.17900

December 1998.............................................. 1.18266

January 1999............................................... 1.18632

February 1999.............................................. 1.19000

March 1999................................................. 1.19233

April 1999................................................. 1.19466

May 1999................................................... 1.19700

------------------------------------------------------------------------

Source: DRI/McGraw-Hill HCC, 1st QTR 1996; @USSIM/TREND 25YR0296 @CISSIM/

CONTROL961.

XI. Regulatory Impact Statement

For notices such as this, we generally prepare an initial

regulatory flexibility analysis that is consistent with the Regulatory

Flexibility Act (RFA) (5 U.S.C. 601 through 612) unless we certify that

the notice will not have a significant economic impact on a substantial

number of small entities. For purposes of the RFA, all HHAs are treated

as small entities.

As discussed below, this notice has an impact of less than $5

million on aggregate Medicare expenditures and we have no evidence that

the economic impact on most HHAs will be significant. Moreover, this

notice is necessary to implement the provisions of section

1861(v)(1)(L) of the Act; thus no alternatives to the provisions set

forth in this notice are available. However, because this notice may

have some effect on a large number of providers, we are providing a

voluntary regulatory flexibility analysis.

This notice with comment period sets forth a revised schedule of

HHA cost limits for cost reporting periods beginning on or after July

1, 1997. The methodology used to develop the schedule of limits set

forth in this notice is the same as that used in setting the limits

effective July 1, l996. In accordance with section 1861(v)(1)(L)(I) of

the Act, we are continuing to set the limits not to exceed 112 percent

of the mean of the labor-related and nonlabor per-visit costs for

freestanding HHAs. As required by section 1861(v)(1)(L)(iii) of the

Act, we are using the most recent hospital wage index to calculate the

HHA cost limits, that is, the hospital wage index effective for

discharges on or after October 1, 1996, which is based on 1993 wage

survey data. The wage index is used to adjust the labor-related portion

of the limits to reflect differing wage levels among areas. As

discussed in section II. of this notice, we are applying a budget

neutrality adjustment factor of 1.078 to the labor-related portion of

the limits to ensure that aggregate payments to HHAs are not affected

by the updating of the wage index. Based on the database used to

calculate the cost limits, there is no significant discernable

redistribution of expenditures between types of agencies (freestanding

or hospital-based) or regions as a result of this notice.

We are using settled cost report data from Medicare cost reports

for cost reporting periods ending on or after June 30, 1991, and

settled before October 1, 1995, to develop the HHA cost-per visit limit

values for each type of home health service: skilled nursing care,

physical therapy, speech pathology, occupational therapy, medical

social services, and home health aide. The majority of the cost reports

were from FY 1993. The data have been adjusted by the most recent

market basket factors to reflect the expected cost increases occurring

between the cost reporting periods for the data contained in the

database and June 30, 1998. The intermediary determines the aggregate

cost limit for each HHA by multiplying the number of Medicare visits

for each type of service furnished by the HHA by the respective

[[Page 35634]]

per-visit cost limit. Each HHA's aggregate limit cannot be determined

prospectively, but depends on each HHA's Medicare visits for each type

of service and actual costs for the cost reporting period subject to

this notice.

The methodology used to calculate these new limits is the same as

the 1996 cost limit methodology. The projected aggregate Medicare

expenditures under the new limits are approximately equal to the

projected aggregate expenditures under the old limits in effect for

cost reporting periods beginning on or after July 1, 1996, updated by

the market basket increases since those limits took effect. In the

absence of this notice, these market basket increases will still take

effect under current law. Therefore, this notice is expected to change

Medicare expenditures by less than $5 million.

The cost limits for HHAs are statutorily driven and the impact of

the market basket increases has already been reflected in the current

law baseline of the President's FY 1998 budget.

We are unable to identify the effects of changes to the cost limits

on individual HHAs. In general, we believe that most HHAs will

experience small revenue increases under the new limits; the degree of

that increase will vary depending on the proportion of an HHA's

revenues that come from Medicare, the distribution of services provided

by the HHA, and the HHA's ability to operate within the cost limits. As

stated earlier, there is no significant discernable redistribution

effect between freestanding and hospital-based home health agencies in

the aggregate.

Table 7 below illustrates the proportion of HHAs that are likely to

be affected by the limits. The results are based on both the data used

to determine the limits and all available settled hospital-based cost

reports for the same time period:

Table 7.--HHAs Exceeding the Cost Limits

------------------------------------------------------------------------

Percentage

HHAs in HHAs of HHAs

database exceeding exceeding

the limits the limits

------------------------------------------------------------------------

Total HHAs....................... 4986 1569 31

Freestanding..................... 3202 698 22

Hospital-based................... 1784 871 49

------------------------------------------------------------------------

Section 1102(b) of the Act requires the Secretary to prepare a

regulatory impact analysis if a notice may have a significant impact on

the operations of a substantial number of small rural hospitals. Such

an analysis must conform to the provisions of section 603 of the RFA.

For purposes of section 1102(b) of the Act, we define a small rural

hospital as a hospital located outside a Metropolitan Statistical Area

with fewer than 50 beds.

We are not preparing a rural impact statement because we have

determined, and certify, that this notice will not have a significant

impact on a substantial number of rural hospitals.

In accordance with the provisions of Executive Order 12866, this

notice was reviewed by the Office of Management and Budget.

XII. Other Required Information

A. Waiver of Proposed Notice

In adopting notices such as this, we ordinarily publish a proposed

notice in the Federal Register with a 60-day period for public comment

as required under section 1871(b)(1) of the Act. However, we may waive

this procedure if we find good cause that prior notice and comment are

impracticable, unnecessary or contrary to public interest.

Section 1861(v)(1)(L)(iii) of the Act requires that the Secretary

establish revised HHA cost limits for cost reporting periods beginning

on or after July 1, 1991 and annually thereafter (except for cost

reporting periods beginning on or after July 1, 1994 and before July 1,

1996). As discussed in section III above, in accordance with the

statute, we have used the same methodology to develop the schedule of

limits that was used in setting the limits effective for cost reporting

periods beginning on or after July 1, 1996. The cost limits have been

updated by the appropriate market basket adjustment factor to reflect

the cost increases occurring between the cost reporting periods for the

data contained in the database and June 30, 1998. In addition, as

required under section 1861(v)(1)(L)(iii) of the Act, we have updated

the wage index using the most recent hospital wage index.

If HHAs are to receive timely the benefits of these new cost limits

based on the updated wage index and market basket adjustment factors,

it is necessary that these limits be published in time to take effect

for cost reporting periods beginning on or after July 1, 1997. Because

the methodology used to develop this schedule of limits is for the most

part dictated by the statute and has been previously published for

public comment, we believe that in this instance it would be

impracticable, unnecessary and contrary to the public interest to

publish a proposed notice. Therefore, we find good cause to waive

publication of a proposed notice. However, we are providing a 60-day

period for public comment, as indicated at the beginning of this

notice.

C. Public Comments

Because of the large number of items of correspondence we normally

receive on a notice with comment period, we are not able to acknowledge

or respond to them individually. However, we will consider all comments

concerning the provisions of this notice that we receive by the date

and time specified in the Dates section of this notice, and we will

respond to those comments in a subsequent notice.

Authority: Section 1861(v)(1)(L) of the Social Security Act (42

U.S.C. 1395x(v)(1)(L)); section 4207(d) of Pub. L. 101-508 (42

U.S.C. 1395x (note)).

(Catalog of Federal Domestic Assistance Program No. 93.773

Medicare--Hospital Insurance)

Dated: April 9, 1997.

Bruce C. Vladeck,

Administrator, Health Care Financing Administration.

Dated: April 30, 1997.

Donna E. Shalala,

Secretary.

[FR Doc. 97-17235 Filed 6-30-97; 8:45 am]

BILLING CODE 4120-01-P