Medicare and Medicaid Programs; Salary Equivalency Guidelines for Physical Therapy, Respiratory Therapy, Speech Language Pathology, and Occupational Therapy Services

DEPARTMENT OF HEALTH AND HUMAN SERVICES

Health Care Financing Administration

42 CFR Part 413

[BPD-808-P]

RIN 0938-AG70

Medicare and Medicaid Programs; Salary Equivalency Guidelines for

Physical Therapy, Respiratory Therapy, Speech Language Pathology, and

Occupational Therapy Services

AGENCY: Health Care Financing Administration (HCFA), HHS.

ACTION: Proposed rule.

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SUMMARY: This proposed rule sets forth proposed revisions to the salary

equivalency guidelines for Medicare payment for the reasonable costs of

physical therapy and respiratory therapy services furnished under

arrangements by an outside contractor. The proposed rule also sets

forth proposed new salary equivalency guidelines for Medicare payment

for the reasonable costs of speech language pathology and occupational

therapy services furnished under arrangements by an outside contractor.

The proposed guidelines do not apply to inpatient hospital services and

hospice services. The guidelines would be used by Medicare fiscal

intermediaries to determine the maximum allowable cost of those

services.

The guidelines will not be effective until at least 60 days after

the date of publication of the final rule. However, to illustrate how

the schedules would operate, we have calculated the proposed revised

schedules for physical respiratory therapy services and proposed new

schedules for speech-language pathology and occupational therapy

services as if the guidelines were effective on April 1, 1997.

DATES: Comments will be considered if we receive them at the

appropriate address, as provided below, no later than 5 p.m. on May 27,

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-808-P, PO. Box 7517,

Baltimore, MD 21244-0517.

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, 200 Independence Avenue, SW,

Washington, DC 20201, or

Room C5-09-26, 7500 Security Boulevard, Baltimore, MD 21244-1850.

Because of staffing and resource limitations, we cannot accept

comments by facsimile (FAX) transmission.

If comments concern information collection or recordkeeping

requirements, please address a copy of comments to the following

address: Office of Management and Budget, Office of Information and

Regulatory Affairs, Room 3206, New Executive Office Building,

Washington, DC 20503, Attention: Allison Herron Eydt.

In commenting, please refer to file code BPD-808-P. 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

[[Page 14852]]

through Friday of each week from 8:30 a.m. to 5 p.m. (phone: (202) 690-

7890).

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.

Copies: To order copies of the Federal Register containing this

document, send your request to: New Orders, Superintendent of

Documents, PO. Box 371954, Pittsburgh, PA 15250-7954. Specify the date

of the issue requested and enclose a check or money order payable to

the Superintendent of Documents, or enclose your Visa or Master Card

number and expiration date. Credit card orders can also be placed by

calling the order desk at (202) 512-1800 or by faxing to (202) 512-

2250. The cost for each copy is $8.00. As an alternative, you can view

and photocopy the Federal Register document at most libraries

designated as Federal Depository Libraries and at many other public and

academic libraries throughout the country that receive the Federal

Register.

FOR FURTHER INFORMATION CONTACT: Jackie Gordon, (410) 786-4517.

SUPPLEMENTARY INFORMATION:

I. Background

Section 1861(v)(5) of the Social Security Act (the Act) requires

the Secretary to determine the reasonable cost of services furnished to

Medicare beneficiaries ``under an arrangement'' with a provider of

services, by therapists or other health-related personnel. The Health

Care Financing Administration (HCFA) pays the provider directly for

these services, rather than paying the therapist or supplying

organization. Under section 1861(w)(1) of the Act, this payment

discharges the beneficiary from liability to pay for the services.

Section 1861(v)(5) of the Act also specifies that the reasonable costs

for these services may not exceed an amount equal to the salary that

would reasonably have been paid for the services (together with any

additional costs that would have been incurred by the provider or other

organization) to the person performing them if they had been performed

in an employment relationship with a provider or other organization

(rather than under such arrangement), plus allowances for certain

expenses that may be incurred by the contracting therapy organization

in furnishing the services as the Secretary in regulations determines

to be appropriate.

These statutory requirements are implemented in existing

regulations at 42 CFR 413.106. The regulations apply to the services of

physical, occupational, speech, and other therapists and services of

other health specialists (other than physicians) furnished under

arrangements with a provider of services, a clinic, a rehabilitation

agency, or a public health agency. The regulations provide for:

Hourly salary equivalency amounts comprised of:

--A prevailing hourly salary rate based on the 75th percentile of the

range of salaries paid to full-time employee therapists by providers in

the geographic area, by type of therapy.

--Fringe benefit and expense factors to take into account fringe

benefits generally received by an employee therapist, as well as

expenses (such as maintaining an office, insurance, etc.) that a

therapist or therapist organization might incur in furnishing services

under arrangements.

A standard travel allowance to recognize time spent in

traveling to the provider's site or the patient's home.

As provided for in existing regulations at Sec. 413.106(e)

and explained in section 1412 of the Provider Reimbursement Manual, the

following are additional allowances for costs incurred for services

furnished by an outside supplier. In addition to the guidelines

established for the adjusted hourly salary equivalency amount and the

travel allowance, the following costs incurred for services furnished

by an outside supplier are recognized, provided the services are

properly documented as having been received by the provider.

--Overtime, if an outside supplier utilizes the services of its

employees (including the services of aides and assistants) at an

individual provider in excess of the provider's standard workweek;

--Administrative and supervisory duties, if an outside supplier

provides more than one therapist and at least one therapist spends more

than 20 percent of his or her time supervising other therapists and

performing administrative duties;

--Depreciable or leased equipment, including maintenance costs of

equipment remaining at the provider's site, that the outside supplier

uses in furnishing direct services to the provider's patients (may also

include equipment that is transported from one provider site to another

but excludes equipment owned by the provider);

--Supplies furnished by the supplier for direct patient care (e.g.,

gases and sprays for respiratory therapy), excluding items such as

envelopes, stamps, and typewriters that are reimbursed as overhead

expenses and included in the fringe benefit and expense factor;

--Travel expenses, based on 10 times the General Services

Administration mileage rate for each day an outside supplier travels to

a provider site;

--Aides, who are paid as an add-on based on the wage rate of a

comparable employee, such as a nurse's aide (all therapy types use

aides); (Because we have received several inquiries regarding

continuing to use wages of providers'' nurses aides as the basis for

comparison, we welcome comments on other methods for determining

guidelines for aides.)

--Assistants, who are paid as a function of the hourly salary

equivalency amount at 75 percent of these amounts. (All therapy types

use assistants except respiratory therapists.)

The provider must supply the intermediary with documentation that

supports these additional costs to the intermediary's satisfaction.

These are the only additional costs that will be recognized.

The regulations at 42 CFR 431.106 (b)(5) and (c) also provide for

an exemption for limited part-time or intermittent services if the

provider required the services of an outside supplier for a particular

type of therapy service and the total hours of services performed for

the provider, by type of service, average less than 15 hours per week

for those weeks in the cost reporting period during which services were

furnished by nonemployee therapists. (Travel time is not counted in the

computation, even if the actual time is used.) If a provider qualifies

for this exemption, the reasonable cost of such services is evaluated

on a reasonable rate per unit of service basis, except that payment for

these services in the aggregate, during the cost reporting period, may

not exceed the amount that would be allowable had the provider

purchased these services on a regular part-time basis for an average of

15 hours per week for the number of weeks in which services were

furnished. Where the contract provides for a method of payment other

than rate per unit of service (e.g., hourly rate or percentage of

charges), payment cannot

[[Page 14853]]

exceed the guideline adjusted hourly amounts plus other allowable

costs, even though the services are performed on a limited or

intermittent part-time basis.

In addition, the regulations at Sec. 413.106(f)(1) currently

provide for an exception because of a binding contract. An exception

may be granted to a provider that entered into a written binding

contract with a therapist or contracting organization prior to the date

the initial guidelines are published for a particular type of therapy.

This exception would not apply to physical and respiratory therapy

services furnished under arrangements because we have previously

published initial guidelines for these services. Before the exception

may be granted, however, the provider must submit the contract to its

intermediary, subject to review and approval by the HCFA regional

office. This exception may be granted for the contract period, but no

longer than 1 year from the date the guidelines for the particular

therapy are published. During the period in which a binding contract

exception is in effect, the cost of the services will be evaluated

under the prudent buyer concept. (Section 1414.1 of the Provider

Reimbursement Manual contains instructions on this exception.) This

exception does not apply to providers who enter into a contingency

contract with a therapist or contracting organization or another

provider. In a contingency contract, the provider and contractor agree

that if Medicare does not reimburse the provider for the rate that the

contract is set at the provider and contractor agree that the

contractor will make up the difference. We do not consider a

contingency contract a binding contract.

Also, the regulations at Sec. 413.106(f)(2) provide for an

exception for unique circumstances or special labor market conditions.

An exception may be granted when a provider demonstrates that the costs

for therapy services established by the guidelines are inappropriate to

a particular provider because of some unique circumstances or special

labor market conditions in the area. As explained in section 1414.2 of

the Provider Reimbursement Manual, exceptions will be granted only in

extraordinary circumstances. Before the exception may be granted, the

provider must submit appropriate evidence to its intermediary to

substantiate its claim. The provider's request for an exception,

together with substantiating documentation, must be submitted to the

intermediary each year, no later than 150 days after the close of the

provider's cost reporting period. Because providers had been required

to submit cost reports to intermediaries no later than 90 days after

the close of their cost reporting periods, we had required that the

provider's request for an exception, together with substantiating

documentation, also be submitted to the intermediary no later than 90

days after the close of its cost reporting period. On June 27, 1995 (60

FR 33137), we changed the due date for submission of cost reports to

150 days after the close of the provider's cost reporting period.

Accordingly, as explained under Section II.F. of this preamble, we are

proposing to revise the time period for a provider's request for an

exception, together with substantiating documentation, to 150 days

after the close of its cost reporting period. If the circumstances

giving rise to the exception remain unchanged from a prior cost

reporting period, however, the provider need only submit evidence to

the intermediary 150 days after the close of its cost reporting period

to establish that fact.

In order to establish an exception for unique circumstances, the

provider must submit evidence to establish that it has some unique

method of delivering therapy or other services, which affects its

costs, that is different from the other providers in the area. The

exception will be effective no earlier than the onset of the unique

circumstances.

In order to substantiate an exception for special labor market

conditions, the provider must submit evidence enabling the intermediary

to establish that the going rate in the area for a particular type of

service is higher than the guideline limit and that such services are

unavailable at the guideline amounts. It is the duty of the provider to

prove to the satisfaction of the intermediary that it has reasonably

exhausted all possible sources of this service without success.

The intermediary collects information on the rates that other

providers in the area generally pay therapists or other health care

specialists. Once this information is collected, the intermediary will

determine whether other providers in the area, in comparison to the

provider requesting the exception, generally pay therapists or other

health care specialists higher rates than the guideline amounts. (As

discussed in section II.F.3. of this notice, we specifically invite

comments on the exception process.)

Under Sec. 413.106(b)(6), HCFA issues guidelines establishing the

hourly salary equivalency amounts in geographical areas for therapy

services furnished to Medicare beneficiaries under arrangements. These

guidelines apply only to the amount of payment the Medicare program

makes to a provider for therapy services obtained under arrangements.

The guidelines are not intended to dictate or otherwise interfere in

the terms of a contract that a provider may wish to enter into with a

therapist or therapist organization. The guidelines do not apply to

services furnished by employees of a hospital or employees of other

providers. There is also an exception to the guidelines for inpatient

hospital services provided by hospitals paid under the prospective

payment system or subject to rate of increase limits

(Sec. 413.106(f)(4), in which case the services are evaluated under the

Medicare program's reasonable cost provisions as described at

Sec. 413.5). However, as explained under section II.F. of this

preamble, we are proposing regulations that would provide that the

salary equivalency guidelines will apply in situations where

compensation, at least in part, to a therapist employed by the provider

is based on a fee-for-service or on a percentage of income (or

commission). The entire compensation would be subject to the guidelines

in cases where the nature of the arrangements are most like an under

``arrangement'' situation, although technically the provider may treat

the therapists as employees. The guidelines would be applied in this

situation so that an employment relationship is not being used to

circumvent the guidelines. The guidelines would apply to skilled

nursing facilities (SNFs) providing therapy services under arrangements

that elect prospective payment under section 1888(d) of the Act because

that prospective payment system only applies to routine and capital

services and does not apply to ancillary services which include therapy

services.

Section 413.106(d) provides that, prior to the beginning of a

period to which a guideline will be applied, HCFA will publish a notice

in the Federal Register establishing the guideline amounts to be

applied to each geographical area by type of therapy. We have issued

schedules of salary equivalency guidelines for the reasonable costs of

physical therapy services since 1975, and for respiratory therapy

services since 1978. On September 30, 1983, we published a final notice

(48 FR 44922) that revised the methodology used to establish the

schedules, as well as the guidelines themselves. The guidelines

continue to apply to physical therapy and respiratory therapy services

provided under arrangements, as set forth in Sec. 413.106, with

hospitals, home health agencies (HHAs), SNFs, hospital-based HHAs,

hospital-based SNFs,

[[Page 14854]]

comprehensive outpatient rehabilitation facilities (CORFs), and

outpatient rehabilitation providers (ORPs). (Since we are now proposing

to issue guidelines for occupational therapists, the guidelines will

also apply to community mental health centers that provide occupational

therapy services furnished under arrangements.)

The September 30, 1983 final notice provided that, for providers

with cost reporting periods beginning after October 1, 1982, the

published guidelines would be revised upward by the projected 0.6

percent monthly inflation rate, not compounded. It also provided that,

if for any reason we did not publish a new schedule of guidelines to be

effective for cost reporting periods beginning on or after October 1,

1983 or did not announce other changes in the existing schedule, the

existing guidelines would remain in effect, increased by the projected

0.6 percent monthly inflation rate, not compounded, until a new

schedule of guidelines was issued. This monthly inflation rate was

based on a Data Resources Incorporated (DRI) forecast of the annual

rate of increase in each component of the salary equivalency amounts

(that is, salary, fringe benefits, rent, and other expenses), with each

component weighted to form a composite rate of increase for the 12-

month period ending March 31, 1984.

Since the last schedules of guidelines were issued in 1983, we have

received periodic comments on the methodology used to develop the

guidelines. Some of the issues raised in these comments concerned

limitations in the data available to us on therapists' salaries and

other expenses incurred in furnishing services under arrangements with

providers. We have received comments that payments for therapy services

performed in different provider settings and in urban and rural areas

differ and that the guidelines should reflect those differences. Other

commenters have expressed concern that the factors used to update the

fringe benefits and expense factors are not adequate. In addition, some

commenters raised concerns about more technical aspects of the

methodology, such as the method used to update the salary equivalency

amounts to account for inflation. We address all these concerns in this

proposed rule.

We have never issued schedules of salary equivalency guidelines for

speech language pathology and occupational therapy services provided

under arrangements even though section 1861(v)(5) of the Act explicitly

authorizes the Secretary to do so. Currently, payment for these

services is based on reasonable cost. However, we are aware that

without introducing guidelines for contracted speech-language pathology

and occupational therapy services, the Medicare program could be paying

for costs that are unreasonable and in excess of what Congress intended

under section 1861(v)(5) of the Act. In fact, as evidence of this, the

General Accounting Office (GAO) Report, ``Medicare: Tighter Rules

Needed to Curtail Overcharges for Therapy In Nursing Homes'' (GAO/HEHS-

95-23, March 1995) also found that nursing homes may be claiming

substantial amounts of unallowable or unreasonable costs, or both, for

therapy services provided to Medicare beneficiaries. The GAO

recommended ways that HCFA could curb Medicare losses on payments for

rehabilitation therapies provided to nursing home residents. GAO

concluded that, without salary equivalency guidelines for all therapy

services provided under arrangements to nursing homes, Medicare has

little control over payments to providers. In response to GAO's

recommendations, we indicated that, until guidelines were developed for

all therapy services, providers' therapy costs were subject to the test

of reasonableness as required by regulations at 42 CFR 413.9. We also

indicated that we were working on developing revised salary equivalency

guidelines for physical therapy and respiratory services and developing

guidelines for speech-language pathology and occupational therapy

services.

II. Provisions of the Proposed Rule

In this proposed rule, we would revise the methodology for

establishing the schedules for the maximum payment for physical therapy

and respiratory therapy services. We propose to revise the

determination of reasonable cost for physical therapy and respiratory

therapy furnished under arrangements by an outside contractor by

rebasing the guideline amounts.

We also propose to establish salary equivalency guidelines for

speech language pathology and occupational therapy services furnished

under arrangements by an outside contractor using the same methodology

we propose to use for determining reasonable cost for physical therapy

and respiratory therapy services.

In addition, we are proposing to: (1) Eliminate the exception to

the salary equivalency guidelines for a provider that entered into a

written binding contract with a therapist or contracting organization

prior to the date the initial guidelines are published; (2) apply the

salary equivalency guidelines in situations where compensation, at

least in part, to a therapist employed by the provider is based on a

fee-for-service or on a percentage of income (or commission). (Section

II.F. of this preamble contains a detailed discussion of these

proposals and other proposals we're seeking comments on.)

A. Data Sources for Schedules

In all previously issued salary equivalency guideline notices, we

have used the Bureau of Labor Statistics (BLS) hospital and nursing

home industry wage survey data as our sole source in accordance with

the Senate Committee on Finance recommendation (S. Rept. No. 1230, 92nd

Cong., 2nd Sess. 251 (1972)). Specifically, the Committee recommended

that, to the extent feasible, timely and accurate salary data compiled

by BLS on the 75th percentile of salaries should be used in determining

the prevailing salary amounts. However, in this proposed rule we have

decided not to use the BLS data as our sole, or even as our primary

source for developing the guidelines. We have a number of reasons for

this decision.

First, BLS issued its last hospital industry wage surveys in 1989

and 1991 and has discontinued conducting its survey of hospital wages.

Accordingly, even if we had chosen to use BLS survey data as our

primary source for this proposed rule, we would have needed to

investigate other therapy survey data sources for use in future

guidelines. In addition, although, the BLS survey data continue to meet

the rigorous publication standards of BLS and provide the only national

data that we are aware of for wages by occupation that are

statistically reliable, questions have been raised as to whether the

BLS data meet the Senate Committee on Finance's recommendation on

timeliness. We have taken this concern into consideration in this

proposed rule. Furthermore, the BLS hospital industry wage surveys of

1989 and 1991 include only hospital data. (The last BLS nursing home

industry wage survey was performed in 1985.) We believe it is

reasonable to include data on combined hospital and SNF wages in the

determination of the guidelines as was done previously because therapy

wage levels are primarily determined in occupational labor markets, not

industry labor markets. (We also needed to review the SNF therapy data

so that we could determine the wage levels in SNFs holding all other

factors (including local labor market conditions and working

conditions) constant.

[[Page 14855]]

For the above reasons we determined that we would not use the BLS

survey as the sole source of data for determining the guidelines. We,

therefore, decided to seek other survey data sources of hospital and

SNF industry specific occupational wage information. Regulations at 42

CFR 413.106(b)(6) provide that the guidelines may be derived from other

statistically valid survey data, in lieu of HCFA guidelines, provided

that the study designs, questionnaires, and instructions, as well as

the resultant survey data, are submitted to and approved in advance by

HCFA. Beginning in 1994, we solicited the therapy industry for such

statistically valid survey data. The therapy industry had long held

that nursing home wages for therapists were higher than hospital wages

for therapists because it was more difficult to hire and retain

therapists in nursing homes. However, other individuals with experience

in the therapy industry have indicated that some therapists prefer

working in nursing homes for the following reasons: Preference for

working with elderly; location of SNF closer to home; more

opportunities for physical therapy work in SNF; and working flexible

hours. The therapy industry initially provided us data in 1995, but

after our analysis we found the data to be inadequate for use at the

regional or national level for several reasons: The sample was not

representative; the data were not documented or audited; and primarily

large firms paid under contract to the SNF were surveyed.

In March 1996, the National Association for the Support of Long

Term Care (NASL), representing portions of the therapy industry,

submitted an October 1995 sample survey of salaried therapists in

hospitals and nursing homes to HCFA, as allowed under our regulations.

This survey did not meet the requirements of the regulations at

Sec. 413.106(b)(6), since the survey design, questionnaires, and

instructions were not approved by HCFA prior to the start of the

survey. Nevertheless, the survey did provide data that were current in

SNFs and hospitals. We, therefore, conducted a special analysis of this

NASL survey data, including a limited audit of the survey records.

Based on this analysis and limited audit, we determined that the survey

was not adequate as a sole or primary source of data in determining the

guidelines, but could be useful in combination with other data sources.

There were several reasons for this determination:

The data were not audited or certified by an independent

party. We were permitted to conduct an audit of the survey records only

under stringent restrictions designed to protect the confidentiality of

the survey respondents. Those restrictions made it impossible for us to

verify the survey results. For example, we were unable to compare

submitted survey data with data from other sources.

The verification survey, conducted to determine the

reliability of data submitted by mail, did not appear to be adequate.

Only five providers were included in the verification survey.

Specifically, we were not satisfied that the verification sample was

either sufficiently large or adequately representative.

The survey is not sufficiently representative. There were

variable response rates for hospitals and SNFs. The response rate for

hospitals was 10.8 percent and the response rate for SNFs was 29.9

percent. In addition, the sample seemed to include an

overrepresentation of large hospitals and chain-affiliated SNFs.

Because there is an underrepresentation of small hospitals and non-

chain SNFs in the NASL survey, we cannot be assured with this small

response rate that the large hospitals and chain-affiliated SNFs will

adequately represent the small hospitals and non-chain SNFs not

included in the survey. (The GAO stated in its report, ``Medicare Early

Resolution of Overcharges for Therapy in Nursing Homes is Unlikely'',

August 16, 1996, p. 7, regarding the NASL survey data, ``However, the

survey response rate was low (10 percent for hospitals and 30 percent

for SNFs), which raises questions about how representative the data

are.'' In a footnote on that page, GAO points out, ``Official

government surveys generate a much higher response rate. The BLS White

Collar Pay Survey (one component of which was the hospital salary data

survey on which the draft guidelines were based) had an overall

response rate of 82 percent. Typically, BLS response rates exceed 80

percent).''

Despite requests for the raw unedited data file, the file

was not provided to us.

We have questions about the validity of certain edits.

We were also concerned that supervisory time and

compensation in lieu of benefits were not consistently reported.

Additionally, we were concerned that the supervisory time included in

the NASL survey was above a certain threshold that we use in developing

the guidelines.

As we analyzed the NASL survey data, which as discussed above, was

submitted for the purpose of being used to develop the guideline

amounts, we also studied several other surveys of hospitals and nursing

homes, each of which are more recent than the BLS surveys, although

none was specifically submitted to be used in developing the

guidelines.

We analyzed five additional data sources for hospital wage rates

and two for freestanding SNF wage rates. The additional hospital data

sources examined were: the University of Texas National Hospital Survey

(1994 National Survey of Hospital and Medical School Salaries,

University of Texas Medical Branch, Galveston, TX, 1994, pp. 15-19);

the American Rehabilitation Association (ARA) Surveys of Freestanding

Hospitals and of Rehabilitation Units (1995 Salary Survey, American

Rehabilitation Association, pp. 53-59 and 94-101); the Maryland Health

Services Cost Review Commission's census of hospitals; the American

Health Care Association's (AHCA) report that includes hospital data

profile (1994 AHCA Survey, Sec. 1, p. 10, Buck Associates); and the

NASL 1995 survey of hospitals. For SNFs, we analyzed data from the 1995

NASL survey of SNFs, the January 1995 AHCA survey of SNFs (1995 AHCA

Survey, Sec. 3, p. 3, Buck Associates), and the 1996 survey of SNFs by

Mutual of Omaha, a Medicare intermediary. Several of these data sources

had regional wage levels. We drew the following conclusions about the

merits of these data sources for our purposes in determining

appropriate therapy salary guidelines (that is, not in relation to the

original purposes of the surveys):

The University of Texas National Hospital Survey data are

from October 1994. This annual voluntary hospital survey was conducted

for many years for hospitals in various regions of the country to use

to benchmark regional wage levels for specific health professional

occupations. While there are data from all regions of the United

States, the survey was not designed to be representative or

statistically valid at the regional level. It appears to give fairly

reasonable levels at the national level.

The American Health Care Association's report includes

data on both hospitals and SNFs. The SNF data for January 1995 are both

current and industry-specific. The data for SNFs, however, are unevenly

edited and appear to include some supervisors and additional salary in

lieu of benefits. The sample is heavily weighted by large chains that

are members of the Association. The SNF data appear as both employee-

weighted and facility-

[[Page 14856]]

weighted averages, and do not permit computation of accurate median

and 75th percentile levels.

The Maryland Health Services Cost Review Commission

conducts a census of all Maryland hospitals yearly. We analyzed data

from the 1995 census. While this is a complete census covering over 50

hospitals, it is for Maryland only. In addition, speech-language

pathologists are not included as a separate occupational category.

The American Rehabilitation Association's survey of its

members and prospective members collected July 1994 data. The response

rate was low, and the Association indicated in its report that these

data cannot be presumed to represent the full population of

rehabilitation facilities. No information on SNFs was reported due to

an inadequate sample. This survey appears to give reasonable wage

levels at the national level when compared to other data sources.

Mutual of Omaha conducted a 1995 survey of 2,000 SNF

Medicare providers that it services. The data are current and industry-

specific, but include only information on occupational therapists and

speech language pathologists. The survey was national in scope.

Although the survey's response rate was very high, only a small

percentage of records contained information on wage rates for full-time

employed therapists.

Our conclusion from this analysis was that none of the available

data sources met the statistical validity criteria recommended in the

Senate Committee on Finance Report and specified in the regulations

sufficiently well to serve as the sole or even primary source of data

for establishing the guidelines. Based on this examination, we

determined that a different approach was necessary. As we examined all

these potential data sources, we found that mean wage levels at the

national level for the most part clustered when adjustments were made

for definitional differences. This observation suggested to us that,

while no one of the data sources was adequate as a sole or primary

source of data for establishing the guidelines, employing all these

sources together could provide a useful and valid basis for the

guidelines to be used by intermediaries determining the maximum

allowable cost of therapy services furnished under arrangements.

Therefore, we concluded that we could blend data from the several

sources to develop a national ``best estimate'' of prevailing salary

levels as the basis for the guidelines. Under this approach, we give

weight to each data source, but preferential status to none. None of

the data sources or the average of all of the sources could provide

regional variations. A new method would have to be used for regional

variations.

In an occupational market, wage levels across settings for the same

occupation should bear rational relationships in competitive labor

markets when adjustments are made for compensating differentials for

fringe benefits, working conditions, risk of injury, and geographic

areas. This implies that therapists working in hospital and SNF

settings can migrate between practice settings with relatively little

difficulty. Because of the ease of mobility, labor market forces that

affect one therapist practice setting also influence other practice

settings. This is not to say that therapists' practice activities in

all settings are exactly the same. In setting the guideline amounts, we

acknowledged that, because of the ease of mobility of licensed therapy

workers across settings, a salary equivalency rate that is too high

could put upward pressure on the wages paid to therapists in the larger

hospital sector. Similarly, a rate that is too low could make it

difficult for providers subject to the guidelines to attract therapists

from the hospital setting.

We have decided, for the reasons discussed, not to use the NASL

industry survey as the sole or primary data source for setting the

guidelines. However, we do believe that it has sufficient strength to

include its data along with data from the other sources in a blend as

the basis for the salary equivalency guidelines. We have used a blend

of hospital and SNF therapist wages in the past to reflect occupational

markets and the associated mobility between the two settings. We had

considered at one point including a differential between therapist

wages in hospitals and nursing homes in the guideline amounts. We

reconsidered when we looked across all of the other data sources which

included all provider types. We noted clustering of wage levels across

provider types that made such a differential inappropriate for

occupational labor markets when adjustments are made for locality. We

believe that proposing to use the 75th percentile of blended hospital

and SNF wage data (weighted by relative employment levels in hospitals

and SNFs) to measure the occupational market for therapy services is

equitable. Our new approach in which all appropriate data sources were

used but adjusted for the mix of SNF and hospital therapy employees

will, therefore, provide a buffer for costs that SNFs and other

providers may incur in furnishing therapy services to Medicare

beneficiaries. We invite comments on this methodology, which is

described in more detail in section II.B. of this preamble.

We could not use Medicare cost report information for wage rates

because the cost reports for SNFs and other providers do not have

hourly wage rates for employees. The cost reports do provide aggregate

salaries of employees and costs other than salaries that would include

contract labor cost. However, they do not provide the hours worked

either by staff or contractors, except for contracted physical and

respiratory therapy services for which we have developed salary

equivalency guidelines for the services and do require hourly time

records.

We did use 1994 Medicare predominantly settled cost report data for

prospective payment systems (PPS) hospitals to obtain fringe benefit

information. We used Worksheet S-3, Part II from form HCFA-2552. These

data are used to adjust the labor portion of hospital payments under

the PPS. We believe their use is also appropriate here. We use the 1994

Medicare predominantly settled cost report data, because this is the

same data that HCFA used for its wage index update for prospective

payment system hospitals for FY 1997. This is the most recent Medicare

predominantly settled cost report data that has undergone special

scrutiny for the purpose of wage survey data. Moreover, BLS Employment

Cost Index information for March 1994 show that fringe benefits in

hospitals and SNFs are similar for professional and technical workers.

B. Methodology

In order to determine the hourly salary equivalency amounts, we

determined the ``best estimate'' of wages for both hospitals and SNFs.

We first found mean wage rates for each of the data sources listed

above.

BLS surveyed average hourly earnings (AHE) for all four therapies

in 1989. However, their January 1991 survey included the average hourly

earnings only for full-time physical and respiratory therapists. (BLS

January 1991 average hourly earnings for full-time physical and

respiratory therapists were found in the BLS Occupational Wage Survey:

Hospitals, January 1991, pp. 36-119. The hospitals in this survey

employed 50 or more workers.) We, therefore, needed to estimate 1991

average hourly wages for speech language pathology and occupational

therapy. To do so, we started with the BLS 1989 survey of all four

therapies as a baseline (BLS Industry Wage Survey: Hospitals, March

1989 (the latest previous survey), pp 33-118). The

[[Page 14857]]

hospitals in the 1989 survey employed 100 or more workers. Our analysis

of the University of Texas data for U.S. hospitals indicated that the

wages for speech language pathology and respiratory therapy increased

at a similar rate between 1989 and 1993. Wages for occupational therapy

and physical therapy also increased at a similar rate during that

period. Therefore, we determined that we could employ the 1989 ratios

of speech language pathology to respiratory therapy, and of

occupational therapy to physical therapy, in order to estimate 1991

wage levels for speech language pathology and occupational therapy.

Specifically, multiplying the ratio of 1989 average hourly occupational

therapy wages to 1989 average hourly physical therapy wages by 1991

physical therapy wages yielded estimated 1991 occupational therapy

wages. The following formula summarizes the computation (all values are

average hourly wages):

[(March 1989 AHE, OT)/(March 1989 AHE, PT)] x (January 1991

AHE, PT)=(estimated January 1991 AHE, OT).

Similarly, multiplying the ratio of 1989 average hourly speech

language pathology wages to 1989 average hourly respiratory therapy

wages by the 1991 average hourly respiratory therapy wages yielded

estimated 1991 average hourly speech language pathology wages. Again,

the following formula summarizes the computation (all values are

average hourly wages):

[(March 1989 AHE, SLP)/(March 1989 AHE, RT)] x (January 1991

AHE, RT)=estimated January 1991 AHE, SLP.

The American Health Care Association data provided facility-

weighted mean wage rates for SNFs. The Association has estimated that 5

percent of the SNF wage rates represented supervisors and additional

wages paid in lieu of fringe benefits. We used that estimate to reduce

the Association survey wage data to a nonsupervisory, no additional

salary in lieu of benefits basis.

We converted annual data in the American Rehabilitation Association

and University of Texas surveys to hourly wages using a divisor of 2080

hours, which represents a standard work year.

The Maryland Health Services Cost Review Commission census data

provided wage data, paid hours, and numbers of personnel for each

hospital. We eliminated data for employees who worked less than 35

hours or more than 40 hours a week to restrict the computation to full-

time employees only. We then determined the average hourly wage for

each hospital by dividing aggregate wages by the number of paid hours.

Finally, we computed the average hourly wages across all hospitals,

weighted by the number of employees in each hospital.

NASL data were first divided by 52 to arrive at weekly salary, then

divided by the number of hours worked per week which were also given in

the survey, to obtain hourly wage rates. As in the case of the Maryland

census data, we eliminated data for employees who worked less than 35

hours, or more than 40 hours, a week to restrict the computation to

full-time employees only.

We trended all data forward to the fourth quarter of 1995, the base

period for the NASL survey. For data from the University of Texas, the

American Rehabilitation Association, the American Health Care

Association, and the Maryland Commission census (all sources with 1994

or 1995 bases), we trended these data using average hourly earnings for

hospital workers published in the BLS Current Employment Statistics'

Survey, Standard Industrial Code 806 (Hospitals). To update the BLS

survey data from 1991, we derived rates of increase for the period from

January 1991 through January 1994 (the period which predates the other

data sources, which were surveyed in 1994-1996) based 50 percent on

American Hospital Association Panel wage data and 50 percent on the

average hourly earnings for hospital workers published in the BLS

Current Employment Statistics Survey, Standard Industrial Code 806

(Hospitals).

For the period from January 1994 through October 1995, we used only

the BLS Current Employment Statistics Survey as the basis for the rate

of increase in the BLS survey data (as we did for the other data

sources, which date from that period). The American Hospital

Association data had a higher rate of increase during the 1991-1993

period than the BLS data, resulting in cumulating 1995 therapist wage

levels that reflect current market conditions in 1995.

After all data were trended to fourth quarter 1995, we determined

the salary equivalency guideline amounts for April 1997 in five steps.

Those five steps were: (1) Determine average wages by therapy type,

separately for hospitals and nursing homes; (2) blend the hospital and

nursing home average wages by therapy type, to yield average wages by

therapy type for the four occupational markets; (3) approximate the

75th percentile of wages by therapy type; (4) calculate salary

equivalency guideline levels for fourth quarter 1995, by adding amounts

for fringe benefits, rent, etc.; and (5) update these guideline amounts

to April 1997, the proposed effective date.

In the first step, we determined the mean wage levels, by therapy

type, for hospitals in each of the available data sources. (Data

sources used for hospitals were: BLS, Industry Wage Survey: Hospitals,

March 1989 and Occupational Wage Survey: Hospitals, January 199l;

University of Texas National Hospital Survey 1994 National Survey of

Hospital and Medical School Salaries; American Rehabilitation

Association's surveys of freestanding hospitals and of rehabilitation

units, 1995 Salary Survey; Maryland Health Services Cost Review

Commission's census of hospitals; American Health Care Association

hospital report's data profile, 1994 AHCA Survey; and NASL 1995 survey

of hospitals.) We similarly determined the mean wage levels, by therapy

type, for nursing homes in each of the available data sources. (Data

sources used for SNFs were: 1995 NASL survey of SNFs; American Health

Care Association survey of SNFs, 1995 AHCA Survey; and the 1996 survey

of SNFs by Mutual of Omaha.) We then averaged the mean wage levels from

the available data sources by therapy type, separately for hospitals

and nursing homes.

In the second step, we blended the hospital and nursing home

average wage levels by therapy, to yield average wage levels by

therapist type across the four occupational markets. We employed a

blending process used in the previous salary equivalency guidelines

notice (48 FR 44922, September 30, 1983), to weight the occupational

averages by relative employment levels in hospitals and nursing homes,

respectively. To establish appropriate weights, we used employment of

therapists in nursing homes (SIC 805) and in hospitals (SIC 806), as

found in the BLS Occupational Employment Statistics Survey. (The most

recent available survey of employment in nursing homes is for 1993,

while the most recent survey data of employment in hospitals is for

1995.) We applied these weights to the mean hospital and SNF wage rates

by the four therapist types, as determined in the first step. The BLS

Occupational Employment Statistics Survey shows that the hospital

industry is a major employer of therapists of all types, while SNFs

employ fewer salaried therapists. The weights for hospitals and nursing

homes, respectively, are: For physical therapy, 85 percent and 15

percent; for occupational therapy, 85 percent and 15 percent; for

speech language pathology, 82 percent and 18

[[Page 14858]]

percent; and for respiratory therapy, 99 percent and 1 percent.

In the third step we approximated the 75th percentile of the

blended wage rates for each therapy occupation. It was necessary to

approximate the 75th percentile because, unlike our previous

computations of the guidelines, in this proposal we could not determine

percentile values directly from each of the sources. We have observed

in the BLS data and a regression analysis we performed on NASL data

that the 75th percentile was approximately 110 percent of the mean. We,

therefore, increased each of the four blended wage averages by 10

percent to approximate the 75th percentile of wages in each discipline

across the occupational market.

Salary equivalency guidelines are based on the therapists' time in

the facility. Adjustments to average hourly earnings data were

necessary to include a reasonable allowance for vacation, sick leave,

and administrative time. In order to convert the average hourly

earnings from an hours paid basis to an hours worked basis, we applied

a factor of 2080/1808 to the average hourly earnings determined thus

far, which is the same methodology used in the previous notice. The

1808 figure was computed based on 2080 hours (40 hours/week x 52

weeks; a standard work year) less 15 vacation days, 10 sick leave days

and 9 holidays equal to 34 days, or 272 hours. Data on leave benefits

come from the BLS Employee Benefits Survey. (U.S. Department of Labor,

Bureau of Labor Statistics: Employee Benefits in Small Private

Establishments, 1992, Bulletin 2441, U.S. Government Printing Office,

May 1994, pp. 10-20.)

In the fourth step we added fringe benefit and expense factors to

the prevailing salary rates determined for each therapy type. The

fringe benefit and expense factors are intended to recognize fringe

benefits that are received by an employee therapist, as well as

overhead expenses that a therapist or therapist organization might

incur in furnishing services under arrangements. These factors are

expressed as percentages of the prevailing hourly rate and are applied

to every hour of service furnished at the provider site. Fringe

benefits may include vacation and sick pay, insurance premiums, pension

payments, allowance for job-related training, meals, severance pay,

bonuses, etc.

We computed fringe benefits as a percent of total compensation

using fiscal year 1994 Medicare cost reports for hospitals under the

prospective payment system. We used the Medicare cost reports for

prospective payment system hospitals to obtain fringe benefit

information because these data are carefully scrutinized; they are used

to adjust the labor portion of hospital payments under the prospective

payment system. We believe these data are the best proxy for therapist

fringe benefit information, which is not available for SNFs. Also, the

BLS Employment Cost Index for March 1994 showed that fringe benefits

for professional and technical workers in hospitals and nursing homes

were similar. The fringe benefit component is about 14 percent of the

total salary equivalency amount.

The expense component takes into account expenses a therapist or

therapist organization might have, such as maintaining an office,

purchasing insurance, etc. We based the expense component of the

guidelines on an estimate of the costs of maintaining a therapy

services office. The general methodology for computing the expense

component is similar to that used in the 1983 notice (48 FR 44922,

September 30, 1983) but the factors have been revised. This component

has rental and non-rental portions.

To determine the rental portion of the expense component, we used

the 1991 rental income data (updated to fourth quarter 1995 using

Consumer Price Index (CPI) rental data) compiled by the Building Owners

and Managers Association International (BOMA) and published in the 1992

BOMA Experience Exchange Report for Downtown and Suburban Office

Buildings. (Building Owners and Managers Association International:

1992 BOMA Experience Exchange Report, Washington, DC, 1992, p. 27.)

BOMA reported a national rent average, excluding utility cost, of

$16.87 per square foot per year. We applied an occupancy factor of .971

to take into account the space used for rental building hallways,

elevators, etc., that are included in the BOMA rent figure but that are

not part of the area rented for an office. We then added the BOMA

utilities cost of $1.92 per square foot. We determined total rental

cost assuming a rental area of 250 square feet, the same rental area

used in prior schedules of guidelines. Total 1991 rental cost was

divided by 1808 (the hours factor applied to average hourly earnings)

to compute rental cost per hour worked in 1991.

The expense component includes costs of maintaining an office, such

as wages and salaries of administrative and clerical help, insurance,

telephones, etc. We believe that Medicare should only pay for services

at their reasonable cost. We estimated this component, including rent,

to be reasonable at 30 percent of total expenses in 1991. We based our

30 percent estimate of total expenses on informal discussion with the

rehabilitation industry. We request comments on whether this is a

reasonable estimate. This component had previously been lower because

it was based on a single person maintaining an office out of a home as

opposed to the costs of maintaining a business. The 1991 rent per

square foot amount and the other expenses amount were constant across

the four therapy types, although the weights of these factors vary by

therapy type (the weight for rent is lowest for physical therapy and

highest for respiratory therapy).

The dollar amount for 1991 rent per hour was trended to fourth

quarter 1995, using the proxy selected for rent, the CPI-U for Housing,

published by BLS. The 1991 dollar amounts for the remainder of the

other expenses factor were trended to October 1995, using their

selected proxies. This was done for each of the four therapy types. The

expense factor, including rent, is about 28 percent of the total salary

equivalency amount.

Using the 1994 Medicare cost reports allows us to recognize that

the relative values of certain factors, such as fringe benefits, have

increased more than the relative values of other factors such as rent

or wages and salaries. For instance, if the January 1991 values of the

proxies for office rent and clerical worker fringe benefits are assumed

to be equal to 1.0, then the fourth quarter 1995 values of these two

proxies are 1.131 for rent and 1.249 for clerical worker fringe

benefits. The values of these proxies have increased by different

percentages.

We summed the fourth quarter 1995 dollar values of the ``blended''

wages, fringe benefits, rent, and the remainder of the other expenses

factors to obtain salary equivalency guideline amounts for fourth

quarter 1995. We updated the resultant fourth quarter 1995 salary

equivalency guideline amounts to April 1997, using a DRI/McGraw-Hill

1996:3 forecast. The April 1997 national guidelines below are based on

the amounts determined above:

Physical Therapy.................................................$48.78

Occupational Therapy..............................................46.27

Speech Language Pathology.........................................44.51

Respiratory Therapy...............................................38.51

In previous schedules, statewide therapy guideline amounts were

calculated from the wage data for 22 Metropolitan Statistical Areas

(MSAs) provided by the BLS survey. We averaged prevailing hourly rates

for the surveyed MSAs within each State to

[[Page 14859]]

determine that State's therapy rate. We also grouped contiguous states

into regions and used an average of the surveyed MSA wage rates from

the region in order to determine the rate for States with no MSAs in

the BLS survey. As we acknowledged in the notice of the last schedule

(48 FR 44923), this method has two major shortcomings. First, where BLS

conducted more than one survey in a given State, such as New York,

providers located in the surveyed MSAs were subject to the State rate

even though actual salary data were available for those MSAs. Secondly,

direct application of individual MSA prevailing rates (or an average of

MSA rates) to establish guidelines is relatively insensitive to

geographic variations in wage rates.

Commenters on the existing guidelines have suggested that the

guidelines should both account more fully for local cost variation, and

more accurately reflect the different therapy service costs in urban

and rural regions. In addition, commenters have cautioned us to avoid

any methodology which would create unreasonable differences between

adjoining geographical regions. In developing these proposed

guidelines, we have reconsidered how to account for local cost

variations in the light of those comments. Two other long-term care

Medicare benefit programs, SNF care and home health care, use the

prospective payment system hospital wage index to adjust for local area

variations in labor-related costs. We have decided to employ a modified

version of the prospective payment system hospital wage index as the

best available method for taking local cost variation into account.

Specifically, we propose to employ the pre-reclassified hospital wage

index in order to establish the therapy guideline amounts for urban

areas. (We use the pre-reclassified wage index because

reclassifications apply to hospitals under the prospective payment

system only.) For the rural areas of each State, we propose to use a

weighted average of the wage index values for the urban areas of the

State. This modified geographic adjustment index accounts for two

salient features of the geographical variation in therapy costs. First,

within MSAs there is an association between therapist hourly salary and

fringe benefit rates and overall hospital hourly salary and fringe

benefit rates, because nursing facilities compete in the same labor

market areas as hospitals and other health care providers such as home

health agencies. In addition, the therapy market for rural (non-MSA)

areas tends to reflect the prevailing compensation conditions of the

urban areas in the region.

In order to determine the geographic adjustment for the rural

areas, it is first necessary to determine a weighted average of the

wage index values for the urban areas. We determined the weighted

average of the geographic adjustment index values for the MSAs in each

State by the following method. We began with the pre-reclassified

hospital wage index, based on the fiscal year 1993 Hospital Cost Report

Information System (HCRIS) data set of hospitals under the prospective

payment system, for each MSA. (This is the same data used as the basis

for the hospital wage index effective for hospitals on October 1, 1996

(that is, fiscal year 1997)). For each MSA, we then obtained the number

of total adjusted hours worked in prospective payment system hospitals

from the fiscal 1993 HCRIS data set. We applied two edits to this data.

We excluded all hospital cost reports that showed adjusted hourly

compensation outside of three standard deviations of the mean of the

distribution in order to eliminate erroneous reports. We also excluded

all cost reports from rural areas. A total of 2,837 hospitals under the

prospective payment system satisfied these edits. After obtaining the

number of hours worked in each MSA, we added hours from MSAs in each

State to determine the total number of hours worked in the State. For

MSAs that cover more than one State, we used only the hours from

hospitals inside a State boundary for determining the total hours

worked in the State. Once we determined the total hours worked in the

State, the ratio of hours worked in an MSA to total state hours

provided the weight for each MSA. We then multiplied each MSA's pre-

reclassified hospital wage index by the weight for the MSA, and added

the results to produce the geographic adjustment index for the non-MSA

(rural) areas of the State.

Finally, we normalized the index values to the national average so

that an area with an average geographic adjustment equal to the

national average would have a geographic adjustment index of 1.0. We

first computed a national area geographic adjustment index by

calculating the ratio of hospital hours worked in each MSA to national

hospital hours worked, multiplying this ratio by each MSA's geographic

adjustment index, and adding the results. We then divided this national

geographic adjustment index into the area geographic adjustment index

for each region to produce the normalized therapist geographic

adjustment index.

The results of these calculations are shown in Tables I and II.

Table I shows the geographic adjustment index values and hourly salary

equivalency amounts for each of the 318 MSAs in the 50 States and

Puerto Rico. Table II lists geographic adjustment index values and

hourly salary equivalency upper limits for the rural (that is, non-MSA)

areas of each State and Puerto Rico.

In this proposed rule, we computed the nonurban geographic

adjustment index for a State as a weighted-average index, using

hospital hours for each MSA in the State as the weights. We are

considering computing the nonurban geographic adjustment index by an

alternative method. We are soliciting comments on alternative methods

for determining the nonurban geographic adjustment index under these

guidelines.

C. Specific Number of Schedules

We are proposing one schedule of guidelines for respiratory

therapists, in contrast to the three schedules in the notice of

September 30, 1983. This decision is based on the fact that HCFA does

not differentiate in covering respiratory therapists by different

levels. Therefore, to make coverage conform with payment for

respiratory therapy services, we are proposing one schedule for

respiratory therapists. Information from fiscal intermediaries and the

American Association for Respiratory Care indicates that industry

practice is to use only one schedule. Also, in the BLS 1989 Hospital

Wage Industry Survey, there were four different wage classes and a

summary (weighted average) wage level for respiratory therapists. Only

class III and the summary level were reported for all 18 MSAs surveyed.

For respiratory therapists in 1991, there were two wage classes and a

summary wage level shown. Although the summary level occupational

definitions were comparable from 1989 to 1991, occupational definitions

for basic classes changed between surveys. The summary level was the

consistent category--present for all MSAs in both surveys and

encompassing all nonsupervisory levels of responsibility for both

surveys. We propose to continue to have one schedule of guidelines for

physical therapists. Likewise, we propose to establish one schedule of

guidelines for speech language pathologists and one for occupational

therapists.

The standard travel allowance is 50 percent of the salary

equivalency amount. It is longstanding policy that has been used in all

of the previous guideline notices. For example, the

[[Page 14860]]

proposed standard travel allowance amount for physical therapists in

Bangor, Maine would be determined as follows:

Bangor, Maine hourly salary equivalency amount................ $46.60

Standard travel allowance..................................... x . 50

---------

Section II.B reflects the proposed changes for computing the salary

component and fringe benefit expense factors.

The salary equivalency amount is made up of a salary component and

fringe benefit and expense factors, while the travel allowance, which

is an additional allowance, reflects payment for the therapist's time

spent in traveling to the provider site or to the patient's home. We

are proposing changes in the methodology for computing the salary

component and fringe benefit and expense factors. Although we are not

proposing to change the current methodology with respect to the

standard travel allowance in this proposed rule, we are seeking public

comment on an optional travel allowance methodology for use when

therapy services are furnished in areas in which geographic distance

creates unique labor markets as discussed in section II.F.1 of this

notice.

The schedules of guidelines that follow (Tables I and II) are based

on the projected amounts, while the standard travel allowance is 50

percent of the guideline amount for each therapy type.

D. Tables of Guidelines and Geographic Adjustment Indexes

The salary equivalency guideline amounts for each therapy type are

calculated in three steps: (1) Multiplication of the labor-related

share (83.379 percent of the composite weight) by the geographic

adjustment index and by the national salary equivalency rate for the

therapist type; (2) multiplication of the non-labor related share

(16.621 percent of the composite weight) by the national salary

equivalency rate for the therapist type; and (3) summation of the

results from steps 1 and 2. The salary equivalency guideline amounts

for each therapy type computed by this method are presented in Tables I

and II.

Table I.--Geographic Adjustment Index and Salary Equivalency Upper Guideline for Urban Areas

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

Occu- Speech

Urban area (constituent counties Index Physical pational language Respiratory

or county equivalents) therapy therapy pathology therapy

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

0040.. Abilene, TX, Taylor, TX........... 0.8112 41.10 38.99 37.50 32.45

0060.. Aguadilla, PR, Aguada, PR,

Aguadilla, PR, Moca, PR \1\...... 0.4271 26.29 24.94 23.99 20.75

0080.. Akron, OH, Portage, OH, Summit, OH 0.9931 48.50 46.00 44.25 38.29

0120.. Albany, GA, Dougherty, GA, Lee, GA 0.8665 43.35 41.12 39.56 34.22

0160.. Albany-Schenectady-Troy, NY,

Albany, NY, Montgomery, NY,

Rensselaer, NY, Saratoga, NY,

Schenectady, NY, Schoharie, NY... 0.8692 43.46 41.22 39.66 34.31

0200.. Albuquerque, NM, Bernalillo, NM,

Sandoval, NM, Valencia, NM....... 0.9418 46.41 44.02 42.35 36.64

0220.. Alexandria, LA, Rapides, LA....... 0.8183 41.39 39.26 37.77 32.68

0240.. Allentown-Bethlehem-Easton, PA,

Carbon, PA, Lehigh, PA,

Northampton, PA.................. 1.0071 49.07 46.54 44.77 38.74

0280.. Altoona, PA, Blair, PA............ 0.9585 47.09 44.67 42.97 37.18

0320.. Amarillo, TX, Potter, TX, Randall,

TX............................... 0.8799 43.90 41.64 40.05 34.65

0380.. Anchorage, AK, Anchorage, AK \1\.. 1.3329 64.35 61.04 58.71 50.80

0440.. Ann Arbor, MI, Lenawee, MI,

Livingston, MI, Washtenaw, MI.... 1.1754 55.91 53.04 51.02 44.14

0450.. Anniston, AL, Calhoun, AL......... 0.8087 41.00 38.89 37.41 32.37

0460.. Appleton-Oshkosh-Neenah, WI,

Calumet, WI, Outagamie, WI,

Winnebago, WI.................... 0.8960 44.55 42.26 40.65 35.17

0470.. Arecibo, PR, Arecibo, PR, Camuy,

PR, Hatillo, PR \1\.............. 0.4432 26.94 25.56 24.59 21.27

0480.. Asheville, NC, Buncombe, NC,

Madison, NC...................... 0.9408 46.37 43.99 42.31 36.61

0500.. Athens, GA, Clarke, GA, Madison,

GA, Oconee, GA................... 0.9482 46.67 44.27 42.59 36.85

0520.. Atlanta, GA, 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*........ 1.0112 49.24 46.70 44.93 38.87

0560.. Atlantic City-Cape May, NJ,

Atlantic City, NJ, Cape May, NJ.. 1.1165 53.52 50.76 48.83 42.25

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

GA, McDuffie, GA, Richmond, GA,

Aiken, SC, Edgefield, SC......... 0.8906 44.33 42.05 40.45 35.00

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

TX, Caldwell, TX, Hays, TX,

Travis, TX, Williamson, TX....... 0.9327 46.04 43.67 42.01 36.35

0680.. Bakersfield, CA, Kern, CA......... 1.0270 49.88 47.31 45.51 39.38

0720.. *Baltimore, MD, Anne Arundel, MD,

Baltimore, MD, Baltimore City,

MD, Carroll, MD, Harford, MD,

Howard, MD, Queen Annes, MD...... 0.9876 48.28 45.79 44.05 38.11

0733.. Bangor, ME, Penobscot, ME......... 0.9465 46.60 44.21 42.52 36.79

0743.. Barnstable-Yarmouth, MA,

Barnstable, MA................... 1.3759 64.07 60.77 58.46 50.58

0760.. Baton Rouge, LA, Ascension, LA,

East Baton Rouge, LA, Livingston,

LA, West Baton Rouge, LA......... 0.85 42.68 40.48 38.94 33.69

0840.. Beaumont-Port Arthur, TX, Hardin,

TX, Jefferson, TX, Orange, TX.... 0.8644 43.26 41.04 39.48 34.16

0860.. Bellingham, WA, Whatcom, WA....... 1.1407 54.50 51.70 49.73 43.03

0870.. Benton Harbor, MI, Berrien, MI.... 0.8573 42.98 40.76 39.21 33.93

[[Page 14861]]

0875.. Bergen-Passaic, NJ, Bergen, NJ,

Passaic, NJ*..................... 1.1878 56.42 53.52 51.48 44.54

0880.. Billings, MT, Yellowstone, MT..... 0.9158 45.36 43.02 41.39 35.81

0920.. Biloxi-Gulfport-Pascagoula, MS,

Hancock, MS, Harrison, MS,

Jackson, MS...................... 0.8622 43.18 40.95 39.40 34.09

0960.. Binghamton, NY, Broome, NY, Tioga,

NY............................... 0.8892 44.27 42.00 40.40 34.94

1000.. Birmingham, AL, Blount, AL,

Jefferson, AL, St. Clair, AL,

Shelby, AL....................... 0.9108 45.15 42.83 41.20 35.65

1010.. Bismarck, ND, Burleigh, ND,

Morton, ND....................... 0.7986 40.59 38.50 37.04 32.04

1020.. Bloomington, IN, Monroe, IN....... 0.8720 43.57 41.33 39.76 34.40

1040.. Bloomington-Normal, IL, McLean, IL 0.9061 44.96 42.65 41.03 35.49

1080.. Boise City, ID, Ada, ID, Canyon,

ID............................... 0.9457 46.57 44.18 42.49 36.77

1123.. Boston-Brockton-Nashua-MA-NH,

Bristol, MA, Essex, MA,

Middlesex, MA, Norfolk, MA,

Plymouth, MA, Suffolk, MA,

Worcester, MA, Hillsborough, NH,

Merrimack, NH, Rockingham, NH,

Strafford, NH*................... 1.1705 55.71 52.85 50.84 43.98

1125.. Boulder-Longmont, CO, Boulder, CO. 0.9597 47.14 44.72 43.01 37.22

1145.. Brazoria, TX, Brazoria, TX........ 0.9274 45.83 43.47 41.82 36.18

1150.. Bremerton, WA, Kitsap, WA......... 1.0987 52.79 50.08 48.17 41.68

1240.. Brownsville-Harlingen-San Benito,

TX, Cameron, TX.................. 0.8610 43.13 40.91 39.35 34.05

1260.. Bryan-College Station,TX, Brazos,

TX............................... 0.8921 44.39 42.11 40.51 35.05

1280.. Buffalo-Niagara Falls, NY, Erie,

NY, Niagara, NY*................. 0.9179 45.44 43.10 41.46 35.87

1303.. Burlington, VT, Chittenden, VT,

Franklin, VT, Grand Isle, VT..... 1.0148 49.38 46.84 45.06 38.99

1310.. Caguas, PR, Caguas, PR, Cayey, PR,

Cidra, PR, Gurabo, PR, San

Lorenzo, PR \1\.................. 0.4609 27.66 26.24 25.24 21.84

1320.. Canton-Massillon, OH, Carroll, OH,

Stark, OH........................ 0.8716 43.56 41.32 39.74 34.39

1350.. Casper, WY, Natrona, WY........... 0.8891 44.27 41.99 40.39 34.95

1360.. Cedar Rapids, IA, Linn, IA........ 0.8525 42.78 40.58 39.04 33.77

1400.. Champaign-Urbana, IL, Champaign,

IL............................... 0.9465 46.60 44.21 42.52 36.76

1440.. Charleston-North Charleston, SC,

Berkeley, SC, Charleston, SC,

Dorchester, SC................... 0.9034 44.85 42.54 40.93 35.41

1480.. Charleston, WV, Kanawha, WV,

Putnam, WV....................... 0.9601 47.16 44.73 43.03 37.23

1520.. Charlotte-Gastonia-Rock Hill, NC-

SC, Cabarrus, NC, Gaston, NC,

Lincoln, NC, Mecklenburg, NC,

Rowan, NC, Union, NC, York, SC*.. 0.9696 47.54 45.10 43.38 37.53

1540.. Charlottesville, VA, Albemarle,

VA, Charlottesville City, VA,

Fluvanna, VA, Greene, VA......... 0.9227 45.64 43.29 41.64 36.03

1560.. Chattanooga, TN-GA, Catoosa, GA,

Dade, GA, Walker, GA, Hamilton,

TN, Marion, TN................... 0.8917 44.38 42.09 40.49 35.03

1580.. Cheyenne, WY, Laramie, WY......... 0.7739 39.58 37.55 36.12 31.25

1600.. Chicago, IL, Cook, IL, DeKalb, IL,

DuPage, IL, Grundy, IL, Kane, IL,

Kendall, IL, Lake, IL, McHenry,

IL, Will, IL*.................... 1.0845 52.22 49.53 47.65 41.22

1620.. Chico-Paradise, CA, Butte, CA..... 1.0499 50.81 48.20 46.36 40.11

1640.. Cincinnati, OH-KY-IN, Dearborn,

IN, Ohio, IN, Boone, KY,

Campbell, KY, Gallatin, KY,

Grant, KY, Kenton, KY, Pendleton,

KY, Brown, OH, Clermont, OH,

Hamilton, OH, Warren, OH*........ 0.9644 47.33 44.90 43.19 37.37

1660.. Clarksville-Hopkinsville, TN-KY,

Christian, KY, Montgomery, TN.... 0.7777 39.74 37.69 36.26 31.37

1680.. Cleveland-Lorain-Elyria, OH,

Ashtabula, OH, Cuyahoga, OH,

Geauga, OH, Lake, OH, Lorain, OH,

Medina, OH*...................... 0.9964 48.63 46.13 44.38 38.39

1720.. Colorado Springs, CO, El Paso, CO. 0.9415 46.40 44.01 42.34 36.63

1740.. Columbia, MO, Boone, MO........... 0.8969 44.59 42.29 40.68 35.20

1760.. Columbia, SC, Lexington, SC,

Richland, SC..................... 0.9233 45.66 43.31 41.66 36.05

1800.. Columbus, GA-AL Russell, AL,

Chattanoochee, GA, Harris, GA,

Muscogee, GA..................... 0.7841 40.00 37.94 36.50 31.58

1840.. Columbus, OH, Delaware, OH,

Fairfield, OH, Franklin, OH,

Licking, OH, Madison, OH,

Pickaway, OH*.................... 0.9758 47.80 45.34 43.61 37.73

1880.. Corpus Christi, TX, Nueces, TX,

San Patricio, TX................. 0.8951 44.51 42.22 40.62 35.14

1900.. Cumberland, MD-WV, Allegany, MD,

Mineral, WV...................... 0.8740 43.66 41.41 39.83 34.46

1920.. Dallas, TX, Collin, TX, Dallas,

TX, Denton, TX, Ellis, TX,

Henderson, TX, Hunt, TX, Kaufman,

TX, Rockwall, TX*................ 0.9806 47.99 45.52 43.79 37.89

1950.. Danville, VA, Danville City, VA,

Pittsylvania, VA................. 0.8564 42.94 40.73 39.18 33.90

1960.. Davenport-Rock Island-Moline, IA-

IL, Scott, IA, Henry, IL, Rock

Island, IL....................... 0.8454 42.49 40.31 38.77 33.55

[[Page 14862]]

2000.. Dayton-Springfield, OH, Clark, OH,

Greene, OH, Miami, OH,

Montgomery, OH................... 0.9635 47.30 44.86 43.16 37.34

2020.. Daytona Beach, FL, Flagler, FL,

Volusia, FL...................... 0.8941 44.47 42.18 40.58 35.11

2030.. Decatur, AL, Lawrence, AL, Morgan,

AL............................... 0.8450 42.48 40.29 38.76 33.53

2040.. Decatur, IL, Macon, IL............ 0.7910 40.28 38.21 36.75 31.80

2080.. Denver, CO, Adams, CO, Arapahoe,

CO, Denver, CO, Douglas, CO,

Jefferson, CO*................... 1.0246 49.78 47.22 45.42 39.30

2120.. Des Moines, IA, Dallas, IA, Polk,

IA, Warren, IA................... 0.8885 44.25 41.97 40.37 34.93

2160.. Detroit, MI, Lapeer, MI, Macomb,

MI, Monroe, MI, Oakland, MI, St.

Clair, MI, Wayne, MI*............ 1.0809 52.07 49.36 47.51 41.11

2180.. Dothan, AL, Dale, AL, Houston, AL. 0.7801 39.84 37.79 36.35 31.45

2190.. Dover, DE, Kent, DE............... 0.9068 44.99 42.67 41.05 35.5

2200.. Dubuque, IA, Dubuque, IA.......... 0.8176 41.36 39.23 37.74 32.65

2240.. Duluth-Superior, MN-WI, St. Louis,

MN, Douglas, WI.................. 0.9491 46.71 44.31 42.62 36.88

2281.. Dutchess County, NY, Dutchess, NY. 1.0673 51.52 48.87 47.01 40.67

2290.. Eau Claire, WI, Chippewa, WI, Eau

Claire, WI....................... 0.8747 43.68 41.44 39.86 34.49

2320.. El Paso, TX, El Paso, TX.......... 0.9539 46.91 44.49 42.80 37.03

2330.. Elkhart-Goshen, IN, Elkhart, IN... 0.8871 44.19 41.91 40.32 34.88

2335.. Elmira, NY, Chemung, NY........... 0.8484 42.61 40.42 38.88 33.64

2340.. Enid, OK, Garfield, OK............ 0.7924 40.34 38.26 36.81 31.84

2360.. Erie, PA, Erie, PA................ 0.9232 45.66 43.31 41.66 36.04

2400.. Eugene-Springfield, OR, Lane, OR.. 1.1360 54.31 51.52 49.56 42.88

2440.. Evansville-Henderson, IN-KY,

Posey, IN, Vanderburgh, IN,

Warrick, IN, Henderson, KY....... 0.9054 44.93 42.62 41.00 35.47

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

Cass, ND......................... 0.9117 45.19 42.86 41.23 35.67

2560.. Fayetteville, NC, Cumberland, NC.. 0.9078 45.03 42.71 41.09 35.55

2580.. Fayetteville-Springdale-Rogers,

AR, Benton, AR, Washington, AR... 0.7277 37.70 35.76 34.40 29.77

2620.. Flagstaff, AZ-UT, Coconino, AZ,

Kane, UT......................... 0.9090 45.08 42.76 41.13 35.59

2640.. Flint, MI, Genesee, MI............ 1.1337 54.22 51.43 49.47 42.80

2650.. Florence, AL, Colbert, AL,

Lauderdale, AL................... 0.8001 40.65 38.56 37.09 32.09

2655.. Florence, SC, Florence, SC........ 0.8662 43.34 41.11 39.54 34.21

2670.. Fort Collins-Loveland, CO,

Larimer, CO...................... 1.0646 51.41 48.76 46.91 40.58

2680.. Ft. Lauderdale, FL, Broward, FL*.. 1.0632 51.35 48.71 46.86 40.54

2700.. Fort Myers-Cape Coral, FL, Lee, FL 0.9104 45.14 42.81 41.18 35.63

2710.. Fort Pierce-Port St. Lucie, FL,

Martin, FL, St. Lucie, FL........ 1.0250 49.80 47.23 45.44 39.31

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

Sebastian, AR, Sequoyah, OK...... 0.7926 40.34 38.27 36.81 31.85

2750.. Fort Walton Beach, FL, Okaloosa,

FL............................... 0.9265 45.79 43.43 41.78 36.15

2760.. Fort Wayne, IN, Adams, IN, Allen,

IN, DeKalb, IN, Huntington, IN,

Wells, IN, Whitley, IN........... 0.8870 44.18 41.91 40.32 34.88

2800.. Forth Worth-Arlington, TX Hood,

TX, Johnson, TX, Parker, TX,

Tarrant, TX*..................... 1.0233 49.73 47.17 45.37 39.26

2840.. Fresno, CA, Fresno, CA, Madera, CA 1.1265 53.93 51.15 49.20 42.57

2880.. Gadsden, AL, Etowah, AL........... 0.8951 44.51 42.22 40.62 35.14

2900.. Gainesville, FL, Alachua, FL...... 0.9509 46.78 44.38 42.69 36.93

2920.. Galveston-Texas City, TX,

Galveston, TX.................... 1.1084 53.19 50.45 48.53 41.99

2960.. Gary, IN Lake, IN, Porter, IN..... 0.9717 47.63 45.18 43.46 37.60

2975.. Glens Falls, NY, Warren, NY,

Washington, NY................... 0.8630 43.21 40.98 39.43 34.11

2980.. Goldsboro, NC, Wayne, NC.......... 0.8459 42.51 40.32 38.79 33.56

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

Grand Forks, ND.................. 0.9082 45.05 42.73 41.10 35.56

2995.. Grand Junction, CO, Mesa, CO...... 0.8402 42.28 40.11 38.58 33.38

3000.. Grand Rapids-Muskegon-Holland, MI,

Allegan, MI, Kent, MI, Muskegon,

MI, Ottawa, MI................... 1.0199 49.59 47.04 45.25 39.15

3040.. Great Falls, MT, Cascade, MT...... 0.8750 43.70 41.45 39.87 34.50

3060.. Greeley, CO, Weld, CO............. 0.9767 47.83 45.37 43.65 37.76

3080.. Green Bay, WI, Brown, WI.......... 0.9110 45.16 42.84 41.21 35.65

3120.. Greensboro-Winston-Salem-High

Point, NC, Alamance, NC,

Davidson, NC, Davie, NC, Forsyth,

NC, Guilford, NC, Randolph, NC,

Stokes, NC, Yadkin, NC*.......... 0.9388 46.29 43.91 42.24 36.54

3150.. Greenville, NC, Pitt, NC.......... 0.9150 45.32 42.99 41.36 35.78

3160.. Greenville-Spartanburg-Anderson,

SC, Anderson, SC, Cherokee, SC,

Greenville, SC, Pickens, SC,

Spartanburg, SC.................. 0.8998 44.70 42.40 40.79 35.29

3180.. Hagerstown, MD, Washington, MD.... 0.9248 45.72 43.37 41.72 36.10

3200.. Hamilton-Middletown, OH, Butler,

OH............................... 0.9565 47.01 44.59 42.90 37.11

3240.. Harrisburg-Lebanon-Carlisle, PA,

Cumberland, PA, Dauphin, PA,

Lebanon, PA, Perry, PA........... 1.0238 49.75 47.19 45.39 39.27

[[Page 14863]]

3283.. Hartford, CT, Hartford, CT,

Litchfield, CT, Middlesex, CT,

Tolland, CT*..................... 1.2465 58.81 55.78 53.66 46.42

3285.. Hattiesburg, MS, Forrest, MS,

Lamar, MS........................ 0.7309 37.84 35.89 34.52 29.87

3290.. Hickory-Morganton-Lenoir, NC,

Alexander, NC, Burke, NC,

Caldwell, NC, Catawba, NC........ 0.8694 43.47 41.23 39.66 34.32

3320.. Honolulu, HI, Honolulu, HI \1\.... 1.1552 56.92 53.99 51.93 44.93

3350.. Houma, LA, Lafourche, LA,

Terrebonne, LA................... 0.7915 40.30 38.23 36.77 31.82

3360.. Houston, TX, Chambers, TX, Fort

Bend, TX, Harris, TX, Liberty,

TX, Montgomery, TX, Waller, TX*.. 1.0079 49.10 46.57 44.80 38.76

3400.. Huntington-Ashland, WV-KY-OH,

Boyd, KY, Carter, KY, Greenup,

KY, Lawrence, OH, Cabell, WV,

Wayne, WV........................ 0.9247 45.72 43.37 41.72 36.09

3440.. Huntsville, AL, Limestone, AL,

Madison, AL...................... 0.8271 41.75 39.60 38.09 32.96

3480.. Indianapolis, IN, Boone, IN,

Hamilton, IN, Hancock, IN,

Hendricks, IN, Johnson, IN,

Madison, IN, Marion, IN, Morgan,

IN, Shelby, IN*.................. 0.9981 48.70 46.20 44.44 38.45

3500.. Iowa City, IA, Johnson, IA........ 0.9435 46.48 44.09 42.41 36.70

3520.. Jackson, MI, Jackson, MI.......... 0.9117 45.19 42.86 41.23 35.67

3560.. Jackson, MS, Hinds, MS, Madison,

MS, Rankin, MS................... 0.7946 40.43 38.35 36.89 31.91

3580.. Jackson, TN, Madison, TN.......... 0.8354 42.09 39.92 38.40 33.33

3600.. Jacksonville, FL, Clay, FL, Duval,

FL, Nassau, FL, St. Johns, FL.... 0.9158 45.36 43.02 41.39 35.81

3605.. Jacksonville, NC, Onslow, NC...... 0.7111 37.03 35.12 33.79 29.23

3610.. Jamestown, NY, Chautaqua, NY...... 0.7731 39.55 37.52 36.09 31.22

3620.. Janesville-Beloit, WI, Rock, WI... 0.8713 43.55 41.30 39.73 34.38

3640.. Jersey City, NJ, Hudson, NJ....... 1.1472 54.77 51.95 49.97 43.24

3660.. Johnson City-Kingsport-Bristol, TN-

VA, Carter, TN, Hawkins, TN,

Sullivan, TN, Unicoi, TN,

Washington, TN, Bristol City, VA,

Scott, VA, Washington, VA........ 0.8954 44.53 42.23 40.63 35.15

3680.. Johnstown, PA, Cambria, PA,

Somerset, PA..................... 0.8464 42.53 40.34 38.81 33.58

3700.. Jonesboro, AR..................... 0.7277 37.70 35.76 34.40 29.77

3710.. Joplin, MO, Jasper, MO, Newton, MO 0.7698 39.42 37.39 35.97 31.12

3720.. Kalamazoo-Battlecreek, MI,

Calhoun, MI, Kalamazoo, MI, Van

Buren, MI........................ 1.0625 51.32 48.68 46.83 40.52

3740.. Kankakee, IL, Kankakee, IL........ 0.9187 45.47 43.13 41.49 35.90

3760.. Kansas City, KS-MO, Johnson, KS,

Leavenworth, KS, Miami, KS,

Wyandotte, KS, Cass, MO, Clay,

MO, Clinton, MO, Jackson, MO,

Lafayette, MO, Platte, MO, Ray,

MO*.............................. 0.9553 46.96 44.55 42.85 37.07

3800.. Kenosha, WI, Kenosha, WI.......... 0.9217 45.60 43.25 41.60 36.00

3810.. Killeen-Temple, TX, Bell, TX,

Coryell, TX...................... 1.0474 50.71 48.10 46.27 40.03

3840.. Knoxville, TN, Anderson, TN,

Blount, TN, Knox, TN, Loudon, TN,

Sevier, TN, Union, TN............ 0.8569 42.96 40.75 39.20 33.92

3850.. Kokomo, IN, Howard, IN, Tipton, IN 0.8658 43.32 41.09 39.53 34.20

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

Crosse, WI....................... 0.8686 43.44 41.20 39.63 34.29

3880.. Lafayette, LA, Acadia, LA,

Lafayette, LA, St. Landry, LA,

St. Martin, LA................... 0.8228 41.57 39.43 37.93 32.82

3920.. Lafayette, IN, Clinton, IN,

Tippecanoe, IN................... 0.8851 44.11 41.84 40.25 34.82

3960.. Lake Charles, LA, Calcasieu, LA... 0.8098 41.04 38.93 37.45 32.40

3980.. Lakeland-Winter Haven, FL, Polk,

FL............................... 0.8843 44.07 41.81 40.22 34.80

4000.. Lancaster, PA, Lancaster, PA...... 0.9659 47.39 44.95 43.24 37.42

4040.. Lansing-East Lansing, MI, Clinton,

MI, Eaton, MI, Ingham, MI........ 1.0089 49.14 46.61 44.84 38.80

4080.. Laredo, TX, Webb, TX.............. 0.7129 37.10 35.19 33.86 29.29

4100.. Las Cruces, NM, Dona Ana, NM...... 0.8564 42.94 40.73 39.18 33.90

4120.. Las Vegas, NV-AZ, Mohave, AZ,

Clark, NV, Nye, NV*.............. 1.0956 52.67 49.96 48.06 41.58

4150.. Lawrence, KS, Douglas, KS......... 0.8665 43.35 41.12 39.56 34.22

4200.. Lawton, OK, Comanche, OK.......... 0.8431 42.40 40.22 38.69 33.47

4243.. Lewiston-Auburn, ME, Androscoggin,

ME............................... 0.9484 46.68 44.28 42.60 36.85

4280.. Lexington, KY, Bourbon, KY, Clark,

KY, Fayette, KY, Jessamine, KY,

Madison, KY, Scott, KY, Woodford,

KY............................... 0.8359 42.11 39.94 38.42 33.24

4320.. Lima, OH, Allen, OH, Auglaize, OH. 0.8801 43.90 41.64 40.06 34.66

4360.. Lincoln, NE, Lancaster, NE........ 0.9234 45.66 43.31 41.67 36.05

4400.. Little Rock-North Little Rock, AR,

Faulkner, AR, Lonoke, AR,

Pulaski, AR, Saline, AR.......... 0.8665 43.35 41.12 39.56 34.22

4420.. Longview-Marshall, TX, Gregg, TX,

Harrison, TX, Upshur, TX......... 0.8713 43.55 41.30 39.73 34.38

4480.. Los Angeles-Long Beach, CA, Los

Angeles, CA*..................... 1.2441 58.71 55.69 53.57 46.35

[[Page 14864]]

4520.. Louisville, KY-IN, Clark, IN,

Floyd, IN, Harrison, IN, Scott,

IN, Bullitt, KY, Jefferson, KY,

Oldham, KY....................... 0.9522 46.84 44.43 42.74 36.98

4600.. Lubbock, TX, Lubbock, TX.......... 0.8577 42.99 40.78 39.23 33.94

4640.. Lynchburg, VA, Amherst, VA,

Bedford, VA, Bedford City, VA,

Campbell, VA, Lynchburg City, VA. 0.8116 41.12 39.00 37.52 32.46

4680.. Macon, GA, Bibb, GA, Houston, GA,

Jones, GA, Peach, GA, Twiggs, GA. 0.8894 44.28 42.00 40.41 34.96

4720.. Madison, WI, Dane, WI............. 1.0100 49.19 46.66 44.88 38.83

4800.. Mansfield, OH, Crawford, OH,

Richland, OH..................... 0.8591 43.05 40.83 39.28 33.99

4840.. Mayaguez, PR, Anasco, PR, Cabo

Rojo, PR, Hormigueros, PR,

Mayaguez, PR, Sabana Grande, PR,

San German, PR\1\................ 0.4248 26.20 24.85 23.90 20.68

4880.. McAllen-Edinburg-Mission, TX,

Hidalgo, TX...................... 0.8552 42.89 40.68 39.14 33.86

4890.. Medford-Ashland, OR, Jackson, OR.. 1.0148 49.38 46.84 45.06 38.99

4900.. Melbourne-Titusville-Palm Bay, FL,

Brevard FL....................... 0.9140 45.28 42.95 41.32 35.75

4920.. Memphis, TN-AR-MS, Crittenden, AR,

DeSoto, MS, Fayette, TN, Shelby,

TN, Tipton, TN*.................. 0.8231 41.59 39.45 37.94 32.83

4940.. Merced, CA, Merced, CA............ 1.0744 51.81 49.14 47.27 40.90

5000.. Miami, FL, Dade, FL*.............. 1.0017 48.85 46.34 44.57 38.56

5015.. Middlesex-Somerset-Hunterdon, NJ,

Hunterdon, NJ, Middlesex, NJ,

Somerset, NJ*.................... 1.0969 52.72 50.01 48.11 41.62

5080.. Milwaukee-Waukesha, WI, Milwaukee,

WI, Ozaukee, WI, Washington, WI,

Waukesha, WI*.................... 0.9721 47.65 45.19 43.47 37.61

5120.. Minneapolis-St. Paul, 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*....................... 1.0862 52.29 49.60 47.71 41.28

5160.. Mobile, AL, Baldwin, AL, Mobile,

AL............................... 0.8044 40.82 38.72 37.25 32.23

5170.. Modesto, CA, Stanislaus, CA....... 1.0684 51.56 48.91 47.05 40.73

5190.. Monmouth-Ocean, NJ, Monmouth, NJ,

Ocean, NJ*....................... 1.0919 52.52 49.82 47.92 41.46

5200.. Monroe, LA, Ouachita, LA.......... 0.8276 41.77 39.62 38.11 32.97

5240.. Montgomery, AL, Autauga, AL,

Elmore, AL, Montgomery, AL....... 0.7938 40.39 38.31 36.86 31.89

5280.. Muncie, IN, Delaware, IN.......... 0.9791 47.93 45.46 43.73 37.84

5330.. Myrtle Beach, SC, Horry, SC....... 0.7852 40.04 37.98 36.54 31.61

5345.. Naples, FL, Collier, FL........... 1.0280 49.92 47.35 45.55 39.41

5360.. Nashville, TN, Cheatham, TN,

Davidson, TN, Dickson, TN,

Robertson, TN, Rutherford TN,

Sumner, TN, Williamson, TN,

Wilson, TN*...................... 0.9153 45.34 43.00 41.37 35.79

5380.. Nassau-Suffolk, NY, Nassau, NY,

Suffolk, NY*..................... 1.3654 63.64 60.37 58.07 50.24

5483.. New Haven-Bridgeport-Stamford-

Danbury-Waterbury, CT Fairfield,

CT New Haven, CT*................ 1.2805 60.19 57.09 54.92 47.52

5523.. New London-Norwich, CT, New

London, CT....................... 1.2359 58.37 55.37 53.26 46.08

5560.. New Orleans, LA, Jefferson, LA,

Orleans, LA, Plaquemines, LA, St.

Bernard, LA, St. Charles, LA, St.

James, LA, St. John The Baptist,

LA, St. Tammany, LA*............. 0.9368 46.21 43.83 42.16 36.48

5600.. New York, NY, Bronx, NY, Kings,

NY, New York, NY, Putnam, NY,

Queens, NY, Richmond, NY,

Rockland, NY, Westchester, NY*... 1.4266 66.13 62.73 60.34 52.21

5640.. Newark, NJ, Essex, NJ, Morris, NJ,

Sussex, NJ, Union, NJ, Warren,

NJ*.............................. 1.1855 56.32 53.43 51.39 44.47

5660.. Newburgh, NY-PA, Orange, NY, Pike,

PA............................... 1.0889 52.40 49.70 47.81 41.36

5720.. Norfolk-Virginia 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*........................ 0.8414 42.33 40.15 38.62 33.42

5775.. Oakland, CA, Alameda, CA, Contra

Costa, CA*....................... 1.5110 69.56 65.98 63.47 54.92

5790.. Ocala, FL, Marion, FL............. 0.9177 45.43 43.09 41.46 35.87

5800.. Odessa-Midland, TX, Ector, TX,

Midland, TX...................... 0.8549 42.88 40.67 38.13 33.85

5880.. Oklahoma City, OK, Canadian, OK,

Cleveland, OK, Logan, OK,

McClain, OK, Oklahoma, OK,

Pottawatomie, OK*................ 0.8437 42.42 40.24 38.71 33.49

5910.. Olympia, WA, Thurston, WA......... 1.0774 51.93 49.26 47.38 41.00

5920.. Omaha, NE-IA, Pottawattamie, IA,

Cass, NE, Douglas, NE, Sarpy, NE,

Washington, NE................... 0.9555 46.97 44.55 42.86 37.08

[[Page 14865]]

5945.. Orange County, CA, Orange, CA*.... 1.2061 57.16 54.22 52.16 45.13

5960.. Orlando, FL, Lake, FL, Orange, FL,

Osceola, FL, Seminole, FL*....... 0.9545 46.93 44.51 42.82 37.05

5990.. Owensboro, KY, Daviess, KY........ 0.7635 39.16 37.15 35.73 30.92

6015.. Panama City, FL, Bay, FL.......... 0.8125 41.15 39.04 37.55 32.49

6020.. Parkersburg-Marietta, WV-OH,

Washington, OH, Wood, WV......... 0.7939 40.40 38.32 36.86 31.89

6080.. Pensacola, FL, Escambia, FL, Santa

Rosa, FL......................... 0.8267 41.73 39.58 38.08 32.95

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

Tazewell, IL, Woodford, IL....... 0.8975 44.61 42.32 40.71 35.22

6160.. Philadelphia, PA-NJ, Burlington,

NJ, Camden, NJ, Gloucester, NJ,

Salem, NJ, Bucks, PA, Chester,

PA, Delaware, PA, Montgomery, PA,

Philadelphia, PA*................ 1.1326 54.17 51.39 49.43 42.77

6200.. Phoenix-Mesa, AZ, Maricopa, AZ,

Pinal, AZ*....................... 0.9888 48.32 45.84 44.09 38.15

6240.. Pine Bluff, AR, Jefferson, AR..... 0.7948 40.43 38.35 36.89 31.92

6280.. Pittsburgh, PA, Allegheny, PA,

Beaver, PA, Butler, PA, Fayette,

PA, Washington, PA, Westmoreland,

PA*.............................. 0.9778 47.88 45.41 43.69 37.80

6323.. Pittsfield, MA, Berkshire, MA..... 1.0636 51.37 48.72 46.87 40.55

6340.. Pocatello, ID, Bannock, ID........ 0.8854 44.12 41.85 40.26 34.83

6360.. Ponce, PR, Guayanilla, PR, Juana

Diaz, PR, Penuelas, PR, Ponce,

PR, Villalba, PR, Yauco, PR \1\.. 0.4722 28.12 26.68 25.66 22.20

6403.. Portland, ME, Cumberland, ME,

Sagadahoc, ME, York, ME.......... 0.9695 47.54 45.09 43.38 37.53

6440.. Portland-Vancouver, OR-WA,

Clackamas, OR, Columbia, OR,

Multnomah, OR, Washington, OR,

Yamhill, OR, Clark, WA*.......... 1.1324 54.17 51.38 49.42 42.76

6483.. Providence-Warwick, RI, Bristol,

RI, Kent, RI, Newport, RI,

Providence, RI, Washington, RI... 1.1180 53.58 50.82 48.89 42.30

6520.. Provo-Orem, UT, Utah, UT.......... 1.0196 49.58 47.03 45.24 39.14

6560.. Pueblo, CO, Pueblo, CO............ 0.8350 42.07 39.90 38.39 33.21

6580.. Punta Gorda, FL, Charlotte, FL.... 0.8419 42.35 40.17 38.64 33.43

6600.. Racine, WI Racine, WI............. 0.8905 44.33 42.05 40.45 34.99

6640.. Raleigh-Durham-Chapel Hill, NC,

Chatham, NC, Durham, NC,

Franklin, NC, Johnston, NC,

Orange, NC, Wake, NC............. 0.9805 47.99 45.52 43.79 37.88

6660.. Rapid City, SD, Pennington, SD.... 0.8522 42.77 40.57 39.02 33.76

6680.. Reading, PA, Berks, PA............ 0.9520 46.83 44.42 42.73 36.97

6690.. Redding, CA, Shasta, CA........... 1.1697 55.68 52.82 50.81 43.96

6720.. Reno, NV, Washoe, NV.............. 1.1105 53.27 50.53 48.61 42.06

6740.. Richland-Kennewick-Pasco, WA,

Benton, WA, Franklin, WA......... 1.0049 48.98 46.46 44.69 38.67

6760.. Richmond-Petersburg, VA, 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......................... 0.9267 45.80 43.44 41.79 36.16

6780.. Riverside-San Bernardino, CA,

Riverside, CA, San Bernardino,

CA*.............................. 1.1468 54.75 51.93 49.96 43.22

6800.. Roanoke, VA, Botetourt, VA,

Roanoke, VA, Roanoke City, VA,

Salem City, VA................... 0.8771 43.78 41.53 39.95 34.56

6820.. Rochester, MN, Olmsted, MN........ 1.0511 50.86 48.24 46.09 39.88

6840.. Rochester, NY, Genesee, NY,

Livingston, NY, Monroe, NY,

Ontario, NY, Orleans, NY, Wayne,

NY*.............................. 0.9725 47.66 45.21 43.49 37.63

6880.. Rockford, IL, Boone, IL, Ogle, IL,

Winnebago, IL.................... 0.9065 44.98 42.66 41.04 35.51

6895.. Rocky Mount, NC, Edgecombe, NC,

Nash, NC......................... 0.9026 44.82 42.51 40.90 35.38

6920.. Sacramento, CA, El Dorado, CA,

Placer, CA, Sacramento, CA*...... 1.2449 58.74 55.72 53.60 46.37

6960.. Saginaw-Bay City-Midland, MI, Bay,

MI, Midland, MI, Saginaw, MI..... 0.9688 47.51 45.07 43.35 37.51

6980.. St. Cloud, MN, Benton, MN,

Stearns, MN...................... 0.9532 46.88 44.46 42.77 37.01

7000.. St. Joseph, MO, Andrews, MO,

Buchanan, MO..................... 0.8619 43.16 40.94 39.38 34.08

7040.. St. Louis, MO-IL, 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*...... 0.9093 45.09 42.77 41.14 35.60

7080.. Salem, OR, Marion, OR, Polk, OR... 0.9805 47.99 45.52 43.79 37.88

7120.. Salinas, CA, Monterey, CA......... 1.3912 64.69 61.36 59.03 51.07

7160.. Salt Lake City-Ogden, UT, Davis,

UT, Salt Lake, UT, Weber, UT*.... 0.9754 47.78 45.32 43.60 37.72

[[Page 14866]]

7200.. San Angelo, TX, Tom Green, TX..... 0.7637 39.17 37.15 35.74 30.92

7240.. San Antonio, TX, Bexar, TX, Comal,

TX, Guadalupe, TX, Wilson, TX*... 0.8456 42.50 40.31 38.78 33.55

7320.. San Diego, CA, San Diego, CA*..... 1.2230 57.85 54.87 52.79 45.67

7360.. San Francisco, CA, Marin, CA, San

Francisco, CA, San Mateo, CA*.... 1.4373 66.57 63.14 60.74 52.55

7400.. San Jose, CA, Santa Clara, CA*.... 1.4634 67.63 64.15 61.71 53.39

7440.. San Juan-Bayamon, PR, Aguas

Buenas, PR, Barceloneta, PR,

Bayamon, PR, Canovanas, PR,

Carolina, PR, Catano, PR, Ceiba,

PR, Comerio, PR, Corozal, PR,

Dorado, PR, Fajardo, PR, Florida,

PR, Guaynabo, PR, Humacao, PR,

Juncos, PR, Los Piedras, PR,

Loiza, PR, Luguillo, PR, Manati,

PR, Morovis, PR, Naguabo, PR,

Naranjito, PR, Rio Grande, PR,

San Juan, PR, Toa Alta, PR, Toa

Baja, PR, Trujillo Alto, PR, Vega

Alta, PR, Vega Baja, PR, Yabucoa,

PR\1\ *.......................... 0.4542 27.39 25.98 24.99 21.62

7460.. San Luis Obispo-Atascadero-Paso

Robles, CA, San Luis Obispo, CA.. 1.1653 55.50 52.65 50.64 43.82

7480.. Santa Barbara-Santa Maria-Lompoc,

CA, Santa Barbara, CA............ 1.1331 54.19 51.40 49.45 42.78

7485.. Santa Cruz-Watsonville, CA, Santa

Cruz, CA......................... 1.3627 63.53 60.26 57.97 50.16

7490.. Santa Fe, NM, Los Alamos, NM,

Santa Fe, NM..................... 1.0909 52.48 49.78 47.88 41.43

7500.. Santa Rosa, CA, Sonoma, CA........ 1.2586 59.30 56.25 54.11 46.81

7510.. Sarasota-Bradenton, FL, Manatee,

FL, Sarasota, FL................. 0.9866 48.24 45.75 44.01 38.08

7520.. Savannah, GA, Bryan, GA, Chatham,

GA, Effingham, GA................ 0.9725 47.66 45.21 43.49 37.63

7560.. Scranton-Wilkes-Barre-Hazleton,

PA, Columbia, PA, Lackawanna, PA,

Luzerne, PA, Wyoming, PA......... 0.8821 43.98 41.72 40.13 34.72

7600.. Seattle-Bellevue-Everett, WA,

Island, WA, King, WA, Snohomish,

WA*.............................. 1.1474 54.78 51.96 49.98 43.24

7610.. Sharon, PA, Mercer, PA............ 0.8955 44.53 42.24 40.63 35.15

7620.. Sheboygan, WI, Sheboygan, WI...... 0.7825 39.93 37.88 36.44 31.53

7640.. Sherman-Denison, TX, Grayson, TX.. 0.8682 43.42 41.19 39.62 34.28

7680.. Shreveport-Bossier City, LA,

Bossier, LA, Caddo, LA, Webster,

LA............................... 0.9433 46.47 44.08 42.41 36.69

7720.. Sioux City, IA-NE, Woodbury, IA,

Dakota, NE....................... 0.8379 42.19 40.02 38.49 33.31

7760.. Sioux Falls, SD, Lincoln, SD,

Minnehaha, SD.................... 0.8688 43.44 41.21 39.64 34.30

7800.. South Bend, IN, St. Joseph, IN.... 1.0013 48.83 46.32 44.56 38.55

7840.. Spokane, WA, Spokane, WA.......... 1.0607 51.25 48.61 46.76 40.46

7880.. Springfield, IL, Menard, IL,

Sangamon, IL..................... 0.8740 43.66 41.41 39.83 34.46

7920.. Springfield, MO, Christian, MO,

Greene, MO, Webster, MO.......... 0.7885 40.18 38.11 36.66 31.72

8003.. Springfield, MA, Hampden, MA,

Hampshire, MA.................... 1.0670 51.51 48.85 47.00 40.66

8050.. State College, PA, Centre, PA..... 0.9614 47.21 44.78 43.08 37.27

8080.. Steubenville-Weirton, OH-WV,

Jefferson, OH, Brooke, WV,

Hancock, WV...................... 0.8331 41.99 39.83 38.32 33.15

8120.. Stockton-Lodi, CA, San Joaquin, CA 1.1420 54.56 51.75 49.78 43.07

8140.. Sumter, SC, Sumter, SC............ 0.7760 39.67 37.63 36.20 31.32

8160.. Syracuse, NY, Cayuga, NY, Madison,

NY, Onondaga, NY, Oswego, NY..... 0.9469 46.62 44.22 42.54 36.81

8200.. Tacoma, WA, Pierce, WA............ 1.0946 52.63 49.92 48.02 41.55

8240.. Tallahassee, FL, Gadsden, FL,

Leon, FL......................... 0.8379 42.19 40.02 38.49 33.31

8280.. Tampa-St. Petersburg-Clearwater,

FL, Hernando, FL, Hillsborough,

FL, Pasco, FL, Pinellas, FL*..... 0.9323 46.03 43.66 42.00 36.34

8320.. Terre Haute, IN, Clay, IN,

Vermillion, IN, Vigo, IN......... 0.8659 43.33 41.10 39.53 34.20

8360.. Texarkana, AR-Texarkana, TX,

Miller, AR, Bowie, TX............ 0.8570 42.96 40.75 39.20 33.92

8400.. Toledo, OH, Fulton, OH, Lucas, OH,

Wood, OH......................... 1.0443 50.58 47.98 46.15 39.93

8440.. Topeka, KS, Shawnee, KS........... 1.0166 49.46 46.91 45.13 39.04

8480.. Trenton, NJ, Mercer, NJ........... 1.0633 51.35 48.71 46.86 40.54

8520.. Tucson, AZ, Pima, AZ.............. 0.9140 45.28 42.95 41.32 35.75

8560.. Tulsa, OK, Creek, OK, Osage, OK,

Rogers, OK, Tulsa, OK, Wagoner,

OK............................... 0.8159 41.29 39.17 37.68 32.60

8600.. Tuscaloosa, AL, Tuscaloosa, AL.... 0.7846 40.02 37.96 36.52 31.59

8640.. Tyler, TX, Smith, TX.............. 1.0075 49.09 46.56 44.79 38.75

8680.. Utica-Rome, NY, Herkimer, NY,

Oneida, NY....................... 0.8480 42.60 40.41 38.87 33.63

8720.. Vallejo-Fairfield-Napa, CA, Napa,

CA, Solano, CA................... 1.4057 65.28 61.92 59.57 51.54

8735.. Ventura, CA, Ventura, CA.......... 1.1545 55.06 52.23 50.24 43.47

8750.. Victoria, TX, Victoria, TX........ 0.8459 42.51 40.32 38.79 33.56

[[Page 14867]]

8760.. Vineland-Millville-Bridgeton, NJ,

Cumberland, NJ................... 1.0072 49.06 46.55 44.78 38.74

8780.. Visalia-Tulare-Porterville, CA,

Tulare, CA....................... 1.0231 49.72 47.16 45.37 39.25

8800.. Waco, TX, McLennan, TX............ 0.7834 39.97 37.91 36.47 31.56

8840.. Washington, DC-MD-VA-WV, District

of Columbia, DC, Calvert, MD,

Charles, MD, Frederick, MD,

Montgomery, MD, Prince Georges,

MD, Alexandria City, VA,

Arlington, VA, Clarke, VA,

Culpeper, 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*..... 1.0909 52.48 49.78 47.88 41.43

8920.. Waterloo-Cedar Falls, IA, Black

Hawk, IA......................... 0.8774 43.79 41.54 39.96 34.57

8940.. Wausau, WI, Marathon, WI.......... 1.0405 50.43 47.83 46.01 39.81

8960.. West Palm Beach-Boca Raton, FL,

Palm Beach, FL................... 1.0283 49.93 47.36 45.56 39.42

9000.. Wheeling, OH-WV, Belmont, OH,

Marshall, WV, Ohio, WV........... 0.7623 39.11 37.10 35.69 30.88

9040.. Wichita, KS, Butler, KS, Harvey,

KS, Sedgwick, KS................. 0.9443 46.51 44.12 42.44 36.72

9080.. Wichita Falls, TX, Archer, TX,

Wichita, TX...................... 0.8105 41.07 38.96 37.48 32.43

9140.. Williamsport, PA, Lycoming, PA.... 0.8534 42.82 40.61 39.07 33.80

9160.. Wilmington-Newark, DE-MD, New

Castle, DE, Cecil, MD............ 1.1405 54.49 51.69 49.72 43.02

9200.. Wilmington, NC, New Hanover, NC,

Brunswick, NC.................... 0.9118 45.19 42.87 41.24 35.68

9260.. Yakima, WA, Yakima, WA............ 1.0105 49.21 46.68 44.90 38.85

9270.. Yolo, CA Yolo, CA................. 1.1535 55.02 52.19 50.21 43.44

9280.. York, PA, York, PA................ 0.9176 45.43 43.09 41.45 35.86

9320.. Youngstown-Warren, OH, Columbiana,

OH, Mahoning, OH, Trumbull, OH... 0.9819 48.04 45.57 43.84 37.93

9340.. Yuba City, CA, Sutter, CA Yuba, CA 1.0496 50.80 48.18 46.35 40.10

9360.. Yuma, AZ, Yuma, AZ................ 0.9572 47.04 44.62 42.92 37.14

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

\1\ Nonlabor portion increased in the following areas based on cost of living surveys conducted by the U.S.

Office of Personnel Management:

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

Adjustment

Location factor

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

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

Hawaii...................................................... 1.225

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

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

*Large Urban Area.

Table II.--Geographic Adjustment Index and Salary Equivalency Guideline Amounts for Nonurban Areas

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

Speech

Nonurban area Wage index Physical Occupational language Respiratory

therapy therapy therapy therapy

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

Alabama....................................... 0.8477 42.59 40.39 38.86 33.62

Alaska \1\.................................... 1.3329 64.35 61.04 58.71 50.80

Arizona....................................... 0.9718 47.63 45.18 43.46 37.60

Arkansas...................................... 0.8270 41.74 39.60 38.09 32.96

California.................................... 1.2551 59.16 56.11 53.98 46.70

Colorado...................................... 0.9895 48.35 45.86 44.12 38.17

Connecticut................................... 1.2644 59.53 56.47 54.32 47.00

Delaware...................................... 1.1100 53.25 50.51 48.59 42.04

Florida....................................... 0.9589 47.11 44.68 42.98 37.19

Georgia....................................... 0.9596 47.14 44.71 43.01 37.21

Hawaii \1\.................................... 1.1552 56.92 53.99 51.93 44.93

Idaho......................................... 0.9457 46.57 44.18 42.49 36.77

Illinois...................................... 1.0368 50.28 47.69 45.88 39.69

Indiana....................................... 0.9570 47.03 44.61 42.91 37.13

Iowa.......................................... 0.8889 44.26 41.98 40.39 34.94

Kansas........................................ 0.9553 46.96 44.55 42.85 37.07

Kentucky...................................... 0.9022 44.80 42.50 40.88 35.37

Louisiana..................................... 0.8884 44.24 41.96 40.37 34.93

Maine......................................... 0.9607 47.18 44.75 43.05 37.25

Maryland...................................... 1.0011 48.82 46.31 44.55 38.55

Massachusetts................................. 1.1619 55.36 52.52 50.52 43.71

Michigan...................................... 1.0717 51.70 49.04 47.17 40.81

[[Page 14868]]

Minnesota..................................... 1.0586 51.16 48.53 46.68 40.39

Mississippi................................... 0.8033 40.78 38.68 37.21 32.19

Missouri...................................... 0.8996 44.70 42.40 40.78 35.29

Montana....................................... 0.8980 44.63 42.33 40.72 35.23

Nebraska...................................... 0.9479 46.66 44.26 42.58 36.84

Nevada........................................ 1.1012 52.90 50.17 48.27 41.76

New Hampshire................................. 1.1705 55.71 52.85 50.84 43.98

New Jersey \2\................................ ........... ........... ............ ........... ...........

New Mexico.................................... 0.9501 46.75 44.34 42.66 36.91

New York...................................... 1.2428 58.66 55.64 53.52 46.31

North Carolina................................ 0.9456 46.57 44.17 42.49 36.76

North Dakota.................................. 0.8717 43.56 41.32 39.75 34.39

Ohio.......................................... 0.9764 47.82 45.36 43.63 37.75

Oklahoma...................................... 0.8320 41.95 39.79 38.28 33.12

Oregon........................................ 1.1085 53.19 50.46 48.54 41.99

Pennsylvania.................................. 1.0269 49.87 47.31 45.51 39.37

Puerto Rico \1\............................... 0.4539 27.38 25.97 24.98 21.62

Rhode Island \2\.............................. ........... ........... ............ ........... ...........

South Carolina................................ 0.8964 44.57 42.27 40.67 35.18

South Dakota.................................. 0.8638 43.24 41.02 39.46 34.14

Tennessee..................................... 0.8711 43.54 41.30 39.73 34.37

Texas......................................... 0.9492 46.71 44.31 42.62 36.88

Utah.......................................... 0.9824 48.06 45.59 43.86 37.94

Vermont....................................... 1.0148 49.38 46.84 45.06 38.99

Virginia...................................... 0.9249 45.73 43.37 41.72 36.10

Washington.................................... 1.1105 53.27 50.53 48.61 42.06

West Virginia................................. 0.9145 45.30 42.97 41.34 35.76

Wisconsin..................................... 0.9480 46.67 44.26 42.58 36.84

Wyoming....................................... 0.8386 42.22 40.04 38.52 33.33

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

\1\ Nonlabor portion increased in the following areas based on cost of living surveys conducted by the U.S.

Office of Personnel Management:

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

Adjustment

Location factor

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

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

Hawaii...................................................... 1.225

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

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

\2\ All counties within the State are classified urban.

E. Salary Equivalency Amount Updates

The adjusted hourly salary equivalency amounts were developed using

fourth quarter 1995 wage level data, 1994 fringe benefit data as a

share of wage levels, and fourth quarter 1995 dollar amounts for rent

and other expenses (updated from January 1991 to the fourth quarter of

1995 using their price proxies). In order to account for input price

inflation between the base period (fourth quarter 1995), the

illustrative implementation period of April 1997, and subsequent

updated periods, HCFA developed therapy-specific input price indexes,

using as weights the fourth quarter 1995 relative importance factors of

the salary equivalency market baskets guideline. The therapy-specific

input price indexes are fixed-weight, or Laspeyres type, input price

indexes that were constructed in two steps. First, a base period

(fourth quarter 1995) was selected and the proportion of total costs

accounted for by designated cost categories was estimated. In the

second step, a rate of price increase for each cost category was

multiplied by the expenditure's relative importance for that category.

(Section II.B of this preamble discusses the methodology used to

develop the base-period weights (fourth quarter 1995) for each therapy-

specific input price index.) The sum of these products for all cost

categories yielded the percentage change in the input price index.

Five indexes (base = fourth quarter 1995) were developed initially:

One each representing physical therapy, occupational therapy, speech

language pathology, respiratory therapy, and a weighted composite index

of all four therapy types. The individual therapy indexes were built

into the composite index based upon the relative proportion of total

therapy services. All input price indexes have the same cost categories

and price proxies. However the base period weights vary because of

slight differences in the cost structures associated with providing

each type of therapy. Table III presents the therapy-specific base

period weights as well as the price proxies proposed to represent

inflation for each cost category.

[[Page 14869]]

Table III.--Therapy Specific Adjusted Hourly Salary Equivalency Input Price Indexes (Base Period: Fourth Quarter

1995=100.000)

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

Base period weights by therapy type(1)

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

Speech Composite Proposed price

Physical Occupational language Respiratory therapy proxies

therapy therapy pathology therapy index

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

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

A. Therapist Compensation.... 73.720 72.304 71.208 66.733 71.900

Wages.................... 59.326 58.186 57.304 53.703 57.860 50% ECI

Civilian

Hospital

Workers/50%

ECI Private

Professional &

Technical

Workers Wages.

Benefits................. 14.395 14.118 13.904 13.030 14.039 50% ECI

Civilian

Hospital

Workers/50%

ECI Private

Professional &

Technical

Workers

Benefits.

B. Overhead.................. 26.273 27.696 28.792 33.275 28.099

Other Compensation....... 10.733 11.314 11.762 13.593 11.478

Other Wages.............. 8.779 9.255 9.621 11.119 9.389

Clerical Wages........... 4.422 4.661 4.846 5.600 4.729 ECI Wages

Private

Administrative

Support

Including

Clerical.(2)

Managerial Wages......... 4.357 4.593 4.775 5.519 4.660 ECI Wages

Private

Executive,

Administrative

, &

Managerial.(2)

Other Benefits........... 1.953 2.059 2.141 2.474 2.089

Clerical Benefits........ 0.987 1.041 1.082 1.251 1.056 ECI Benefits

Private

Administrative

Support

Including

Clerical.(2)

Managerial Benefits...... 0.966 1.018 1.059 1.223 1.033 ECI Benefits

Private

Executive,

Administrative

, &

Managerial.(2)

Office Costs............. 6.482 6.834 7.104 8.210 6.933 CPI-U Housing.

Other Costs.............. 9.058 9.549 9.927 11.472 9.688 CPI-U All Items

Less Food &

Energy.

Composite Index Share (3).... 0.313 0.412 0.153 0.122 1.000

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

(1) Base year weights were developed for each type of therapy offered under arrangement. These weights are

multiplied by price index levels to measure composite price change over time.

(2) ECI=Employment Cost Index. ECIs are fixed-weighted indexes which track labor cost free from the influence of

employment shifts among occupations and industries.

(3) The composite index share represents the proportion that each therapy index type represents of the composite

index. These shares were derived from estimates of the 1995 shares of therapy services offered under

arrangement by therapy type.

Despite the differences in the fourth quarter 1995 base-year

weights for the four therapists' input price indexes, there were

virtually no differences in the rates of increase for these indexes.

Therefore, we propose to use the composite index to adjust the hourly

salary equivalency amounts for inflation. Using the composite index is

advantageous because of its administrative simplicity and demonstrated

validity. Because the five indexes produce rates of increase that are

essentially the same, the gain in administrative ease does not come at

the expense of the validity of the inflation adjustment being used.

Table IV, which presents the calendar year rates of increase in the

four therapist indexes and the composite index, demonstrates their

similarity.

Table IV.--Therapy Input Price Indexes for Forecasting the Increase in the Cost of Therapy Services, Calendar

Years 1991-1999

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

Speech

Physical Occupational language Respiratory Composite

Calendar year therapist therapist pathologist therapist therapist

index index index index index \1\

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

Historical

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

1991.......................................... 4.8 4.8 4.8 4.8 4.8

1992.......................................... 4.0 4.0 4.0 4.0 4.0

1993.......................................... 3.5 3.5 3.5 3.5 3.5

1994.......................................... 3.0 3.0 3.1 3.0 3.1

1995.......................................... 2.6 2.6 2.6 2.6 2.6

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

Forecast \2\

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

1996.......................................... 3.1 3.1 3.1 3.1 3.1

1997.......................................... 3.2 3.2 3.2 3.2 3.2

1998.......................................... 3.2 3.2 3.2 3.2 3.2

1999.......................................... 3.3 3.3 3.3 3.3 3.3

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

Released by: HCFA, OACT, Office of National Health Statistics.

\1\ The outlays for services rendered in 1995 were used to develop the outlay-weighted composite therapy index.

\2\ Source: DRI/McGraw-Hill HHC 3rd QTR 1996;@USSIM/TRENDL25YR0896@CISSIM/CONTROL963.

[[Page 14870]]

Table IV shows calendar year rates of inflation for historical

years 1991 through 1995 and forecasted years 1996 through 1999. Salary

equivalency amount adjustments will be made on a monthly basis using

the factors in Table V.

Table V: Adjusted Hourly Salary Equivalency Amount Monthly Inflation

Factors Using Outlay Weighted Composite Index

[An example of how to use the inflation factors follows this table.]

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

Salary equivalency period Period

------------------------------------------------------------ inflation

Month Year factors

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

1 April......................................... 1997 1.00000

2 May........................................... 1997 1.00272

3 June.......................................... 1997 1.00546

4 July.......................................... 1997 1.00819

5 August........................................ 1997 1.01094

6 September..................................... 1997 1.01369

7 October....................................... 1997 1.01646

8 November...................................... 1997 1.01922

9 December...................................... 1997 1.02200

10 January....................................... 1998 1.02478

11 February...................................... 1998 1.02758

12 March......................................... 1998 1.03037

13 April......................................... 1998 1.03318

14 May........................................... 1998 1.03600

15 June.......................................... 1998 1.03882

16 July.......................................... 1998 1.04165

17 August........................................ 1998 1.04449

18 September..................................... 1998 1.04733

19 October....................................... 1998 1.05018

20 November...................................... 1998 1.05304

21 December...................................... 1998 1.05591

22 January....................................... 1999 1.05879

23 February...................................... 1999 1.06167

24 March......................................... 1999 1.06456

25 April......................................... 1999 1.06746

26 May........................................... 1999 1.07037

27 June.......................................... 1999 1.07329

28 July.......................................... 1999 1.07621

29 August........................................ 1999 1.07914

30 September..................................... 1999 1.08208

31 October....................................... 1999 1.08503

32 November...................................... 1999 1.08799

33 December...................................... 1999 1.09095

34 January....................................... 2000 1.09392

35 February...................................... 2000 1.09690

36 March......................................... 2000 1.09989

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

Source: DRI/McGraw-Hill HHC 3rd QTR 1996; @USSIM/TRENDL25YR0896

For example, the proposed national salary equivalency guideline

amount for physical therapists for cost reporting periods beginning

April 1997 is $48.78. The salary equivalency guideline amount for cost

reporting periods beginning in May 1997 would be determined as follows:

April 1997 national physical therapy salary equivalency amount...$48.78

May 1997 monthly inflation factor...............................1.00272

May 1997 national salary equivalency amount......................$48.91

We have developed monthly adjustment factors for May 1997 through

March 2000. If we do not publish new schedules of guidelines for cost

reporting periods beginning on or after April 1, 2000, or do not

announce other changes in the schedules, the schedules would remain in

effect, increased by the appropriate adjustment factor (0.00272

monthly, compounded) 1, until new guideline schedules are issued.

This is equivalent to a compounded annual rate of increase of 3.3

percent. The 3.3 percent rate of increase in the proposed guidelines is

based upon the forecast rate of increase in the composite therapists

input price index that HCFA's Office of the Actuary developed. For the

period between 1997 and 1999, the price proxies in the therapists input

price index were forecast in DRI/McGraw-Hill's 1996 third quarter

forecast.

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1 The monthly rate of inflation is 0.00272. It is

necessary to create the multiplicative factor that produces the next

monthly level. Each month's factor (Table V) is 1.00272 times the

previous month's factor.

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

The 3.3 percent forecast rate of increase is based upon the average

annual rate of increase for the period between 1997 and 1999. The 3.3

and 7.2 percent rates of increase are applied to their respective

salary equivalency guidelines in different ways. The 3.3 percent is

applied to the guidelines we are now proposing in a multiplicative

fashion. That is, the salary equivalency guideline amount for each

month is multiplied by one plus the 12th root of the 3.3 percent

average annual rate of increase for each month moved away from the

guideline base period. Conversely, the 7.2 percent rate of increase was

applied by adding 0.6 percent of the October 1982 base value to the

adjustment factor for each month after the guideline base period. The

effect of using the additive adjustment factor rather than the

multiplicative factor is that the additive factor gets progressively

smaller in percentage terms each year.

Choosing appropriate wage and price proxies for each expense

category necessarily involved making tradeoffs and exercising judgment.

HCFA used four, sometimes conflicting, criteria to evaluate the

strengths and weaknesses of each proxy in the therapy-specific input

price indexes: relevance, reliability, timeliness, and time-series

length. A relevant price variable should appropriately represent price

changes for specific goods or services within the expense category.

Relevance may encompass judgments about relative efficiency in the

market generating the price and wage increases and may include

normative factors relating to fairness and national policy objectives.

The second criterion, reliability, concerns sampling variability. If

the proxy wage-price variable has a high sampling variability or

inexplicable erratic patterns over time, its value is greatly

diminished since it is unlikely to accurately reflect price changes in

the associated expenditure category. In some cases, low sampling

variability can conflict with relevance, since the more specifically

the price variable is defined in terms of service, commodity, or

geographic area, the higher the potential sampling variability. An

example of such a conflict is the tradeoff that must be made when

considering two proxies, one of which is the product of a rigorously

designed survey methodology for a somewhat broader occupational or

industry grouping, while the other more closely surveys the targeted

industry or occupation, but from a nonscientifically designed,

nonrepresentative sample. Timeliness of actual published data is the

third criterion. For this reason, monthly and quarterly data take

priority over annual data. The fourth criterion is the length of time

the time-series data have been available. A well-established time

series is needed to provide a valid base from which to forecast future

price changes in the series.

The price proxies for the therapy-specific input price indexes are

based on BLS data and are one of the two following types:

Employment Cost Indexes (ECIs), which measure the rate of

change in employee wage rates and employer costs for employee benefits

per hour worked. These indexes are fixed-weight indexes that strictly

measure the change in wage rates and employee benefits per hour. They

are not affected by shifts in employment mix.

Consumer Price Indexes (CPIs), which measure change in the

prices of final goods and services purchased by the typical consumer.

They are fixed-weight price measures.

These price proxies ``best balance'' the criteria of relevance,

reliability, timeliness, and time-series length. For reasons that are

discussed later, the main issue in selecting price proxies for the

Therapists Input Price Index is relevance.

In selecting price proxies for updating payment rates for various

provider types (hospitals, offices of physicians, SNFs, home health

agencies, etc.), HCFA considers using internal price proxies (that is,

health-sector-specific data), external price proxies (that is,

exclusively based upon economy-wide

[[Page 14871]]

price proxies), or a blend of internal and external price proxies based

upon the competitive structure of the market and Medicare reasonable

cost principles.2

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2 See, for example, Changes to the Inpatient Hospital

Prospective Payment System and Fiscal Year 1997 Rates; Final rule.

61 FR 46192, August 30, 1996.

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It is generally accepted that prices for most nonlabor inputs are

not directly influenced or biased by health-sector-specific market

forces. As a result, we propose to use economy-wide price proxies for

approximate price changes for the nonlabor inputs. However, workers in

the four therapist occupations and industries are potentially affected

by market imperfections associated with both supply and demand.

Imperfections in these labor markets include third party payment, based

at least in part on actual labor costs rather than on costs in

efficiently operating competitive labor markets. Limitations on entry

and restrictions on job content also potentially influence compensation

levels and rates of increase relative to workers with similar

education, skills, and work effort, but in different occupations and

industries. Therefore, compensation of these workers should not be

considered totally free from market imperfections and health industry

influence. To the extent that supply and demand imperfections exist,

using health-sector-specific compensation proxies could manifest these

imperfections and, therefore, would not be the most socially or

economically desirable public policy. The Prospective Payment

Assessment Commission (ProPAC) has affirmed the blending of internal

and external compensation indexes for the prospective payment system.

The Physician Payment Review Commission also has recognized that it is

appropriate to use external compensation proxies for certain health

sector specific occupations such as physicians.

At the same time, it is important to recognize some of the unique

features of the four therapist labor markets that suggested that

health-sector-specific proxies may also have relevance. HCFA has chosen

to balance these internal and external forces by using an equal blend

of sector-specific compensation proxies (ECI Civilian Hospital Workers)

and economy-wide compensation price proxies (ECI Private Professional

and Technical Workers) for measuring therapist compensation price

growth.3 The proxies that are discussed in this section have been

chosen to most closely estimate the changes that will occur in the

different costs that are part of a salary equivalency guideline. We

have already estimated the level of base period costs for the fourth

quarter of 1995 that a provider would pay. The rehabilitation therapist

input price index (IPI) proxies escalate the base level 1995 fourth

quarter costs to the present (using actual price and wage change data)

and into the future (with forecasted data). Thus, a March 1998

guideline reflects what we believe the cost to an efficient provider to

employ a therapist will be in March 1998. The rehabilitation therapist

input price index using these price proxies, weighted by the shares of

costs of the expense categories they represent, is used to forecast the

escalation of these costs over time. The principles being adopted here

are the same as those in HCFA's use of a 50/50 blend of internal and

external price proxies elsewhere in Medicare regulatory policy to

adjust the professional and technical labor compensation component of

the prospective payment system hospital input price index (IPI).4

In other words, under the prospective payment system hospital IPI

(market basket), compensation for physical therapists, occupational

therapists, speech language pathologists, and respiratory therapists is

updated using the same price proxies and blend as are proposed for

these same therapists under arrangements. Consistent with its

application in the hospital IPI, HCFA's proposed therapy-specific input

price indexes apply the blend to professional and technical occupations

only. However, for clerical and managerial workers, who are employed in

significant proportions in nonhealth sectors of the overall economy,

HCFA's therapy-specific input price indexes use economy-wide

compensation proxies to measure price change just as is done in the

prospective payment system hospital IPI for clerical and managerial

workers.

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

3 The ECI for Civilian Hospital Workers provides data on

hospital workers in the total private economy and the public sector,

excluding the Federal Government. Because this price series

represents hospitals, it is health sector-specific.

4 See, for example, Changes to the Inpatient Hospital

Prospective Payment System and Fiscal Year 1997 Rates; Final rule.

61 FR 46192, August 30, 1996.

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F. Other Proposed Changes in Policies

1. Optional Travel Allowance

We particularly invite comments from the public on a proposal to

extend to other providers the optional travel allowance for therapy

furnished under arrangement by an outside contractor that is currently

available to HHAs. The optional travel allowance could be used when

therapy services are furnished in areas in which geographic distance

creates unique labor markets. The actual number of travel hours could

be used in lieu of the standard travel allowance. This would be used at

the option of the provider, who would maintain time records of visits.

Only the actual time spent in travel to reach the visit site would be

included in the actual travel time. Payment for the actual travel hours

would be based on the adjusted hourly salary equivalency amount for the

area, and this amount would not be affected by the additional allowance

for administrative-supervisory duties or by any other additional

allowances described in section 1412 of the Provider Reimbursement

Manual.

2. Data Sources for Future Salary Equivalency Guidelines

We have learned from the BLS that its 1991 ``Occupational Wage

Survey: Hospitals, January 1991'' is the last edition of the series

that it will produce. Prior BLS occupational wage surveys have been

used to establish salary equivalency guidelines for physical therapy

and respiratory therapy services furnished under arrangements, and we

are proposing to include as two of our data sources the 1989 and 1991

surveys trended forward. We developed our proposed guideline amounts

using many survey sources, we invite comments on alternative data

sources and methodologies for future updates.

3. Application of Guidelines

We are proposing to revise Sec. 413.106(c) to add a new paragraph

(c)(6) that would provide that the salary equivalency guidelines will

apply in situations where compensation to a therapist employed by the

provider is based, at least in part, on a fee-for-service or on a

percentage of income (or commission). The entire compensation would be

subject to the guidelines in cases where the nature of the arrangements

are most like an under ``arrangement'' situation, although technically

the provider may treat the therapists as employees. The guidelines

would be applied in this situation so that an employment relationship

is not being used to circumvent the guidelines.

Since June 1977, there has been longstanding governing policy at

section 1403 of the Provider Reimbursement Manual, Guideline

Application, regarding this issue for making payments to providers.

That instruction states, ``In situations where compensation, at least

in part, is based on a fee-for-service or on a percentage of income (or

commission), these arrangements will be considered

[[Page 14872]]

nonsalary arrangements, and the entire compensation will be subject to

the guidelines in this chapter.'' This instruction clearly requires the

intermediary to apply the salary equivalency guidelines in cases where

the provider is paying the physicial therapists on a fee-for-service

basis. This instruction considered the nature of those arrangements and

that they are most like an under ``arrangement'' situation, although

technically they are employees. Therefore, the instructions further the

statutory purpose as reflected in the legislative history of the salary

equivalency guidelines. This instruction addresses the fact that HCFA

recognizes that certain employment relationships would effectively

circumvent the guidelines and provided for these circumstances in

section 1403 of the Provider Reimbursement Manual.

4. Limiting Contracted Services To 40 Hours

While we were evaluating the data we used in developing the

guideline amounts, we became aware of a tendency for contracted therapy

hours in some cases to exceed 40 hours per therapist a week, the amount

of hours a full-time employee would generally work. While the Medicare

program does not dictate the mode of delivery of therapy services, we

do believe that under section 1861(v)(1)(A) of the Act, in making

payments for services on a reasonable cost basis, costs incurred that

are associated with providing therapy services that exceed the hours of

a full-time employee are unnecessary in the efficient delivery of

needed health services. It is our understanding that providers obtain

services on a contractual basis because the facility does not require

the services of a full-time employee and, therefore, it is more

efficient to contract for therapy services rather than hire a full-time

employee who may spend many hours not delivering services. Therefore,

we propose to eliminate the expense factor where the hours of therapy

services exceed 40 hours. Because the expense factor is associated with

costs of maintaining an outside contractor's office, we believe where

40 or more hours of service are provided per therapist, the contracted

services are being delivered in the same manner as a full-time salaried

employee. We invite comments on this proposal.

5. Outcomes Based Systems

We have received several comments requesting that the guidelines

not restrict differential therapy services (for example, ``full-

service'' programs offering supervision, outcomes measurement, and

therapy department support). Those comments have suggested that for

example, where providers incur additional costs for outcomes

measurement systems where Medicare beneficiaries benefit and thus, the

provider incurs less routine costs, the provider should be allowed to

claim those additional costs related to the outcomes measurement

system. We are aware of no outcomes measurement for therapy services

that would permit the adoption of the proposal for differentiated

services. However, we invite comments on the development of an outcomes

based system.

6. Exception for Binding Contract

Existing regulations at 42 CFR 413.106(f)(1) provide for an

exception to the salary equivalency guidelines for a provider that has

entered into a written binding contract with a therapist or contracting

organization prior to the date the initial guidelines are published.

Before the exception is granted, the provider was required to submit

the contract to its intermediary, subject to review and approval by the

HCFA regional office. The exception may be granted for the contract

period, but no longer than 1 year from the date the guidelines for the

particular therapy are published. During the period in which a binding

contract exception is in effect, the cost of the services is evaluated

under the prudent buyer concept. (Section 1414.1 of the Provider

Reimbursement Manual contains instructions on this exception.)

We are proposing to eliminate this exception. We believe that

providers should have been prudent purchasers of therapy services prior

to the establishment of guidelines for speech language pathology and

occupational therapy services and, therefore, should not be

disadvantaged if contracted speech-language pathology and occupational

therapy services are subject to the proposed guideline amounts. We also

wish to point out that there has never been an exception for providers

who enter into a contingency contract with a therapist or contracting

organization and we are not now providing such an exception. In a

contingency contract, the provider and contractor agree that, if

Medicare does not reimburse the provider for the rate that the contract

is set at, the provider and contractor agree that the provider will not

be liable for the difference.

7. Exceptions Process for Unique Circumstances or Special Labor Market

Conditions

Section 413.106 provides that a provider may request an exception

to the established hourly salary equivalency amount for unique

circumstances or special labor market conditions. The provider must

submit evidence or information to the intermediary, in accordance with

instructions issued in Sec. 1414.2 of the Provider Reimbursement

Manual, so that the intermediary can make a determination on the

request. We invite specific comments on the substantiating

documentation requirements and the process used to

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