Medicare Program; Changes to the Hospital Inpatient Prospective Payment Systems and Fiscal Year 2007 Rates; Final Fiscal Year 2007 Wage Indices and Payment Rates After Application of Revised Occupational Mix Adjustment to the Wage Index; Corrections

AGENCY:

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

ACTION:

Correction of notice.

SUMMARY:

This document corrects wage index and technical errors that appeared in the notice published in the Federal Register on October 11, 2006 entitled “Medicare Program; Hospital Inpatient Prospective Payment Systems and Fiscal Year 2007 Rates.

DATES:

Effective Date: Corrections listed in items 10 through 12 of section III. of this notice are effective as of October 1, 2006. The corrections to the wage index listed in items 2a, 3 through 8a, and 9a of section III. of this notice are effective as of November 3, 2006. The corrections to the wage index listed in items 1, 2b, 8b, and 9b of section III. of this notice are effective as of November 21, 2006.

FOR FURTHER INFORMATION CONTACT:

Marc Hartstein, (410) 786-4548.

SUPPLEMENTARY INFORMATION:

I. Background

In FR Doc. 06-8471 of October 11, 2006 (71 FR 59886), the notice entitled “Hospital Inpatient Prospective Payment Systems and Fiscal Year 2007 Rates: Final Fiscal Year 2007 Wage Indices and Payment Rates After Application of Revised Occupational Mix Adjustment to Wage Index” (hereinafter referred to as the “FY 2007 IPPS notice”), there were a number of technical errors that are identified and corrected in the Correction of Errors section (items 10 through 12 of section III. of this notice). These technical corrections are effective October 1, 2006.

In addition, in October 2006, we became aware of an error in the calculation of the FY 2007 wage index for a number of rural areas and several hospitals that are reclassified to those areas. The error also affected some hospitals in urban areas that are assigned the statewide rural wage index floor. Section 412.64(k)(1) of the regulations requires that wage index corrections made after October 1 are effective prospectively for the remainder of the fiscal year from the date the fiscal intermediaries are informed of the correction. We recalculated the wage indices for the affected hospitals, and on November 3, 2006, sent a Joint Signature Memorandum to the fiscal intermediaries informing them to pay hospitals using the corrected wage indices. Subsequent to the November 3, 2006 Joint Signature Memorandum, additional errors in the wage indices were brought to our attention and were corrected through a November 21, 2006 Joint Signature Memorandum. Therefore, the corrected FY 2007 wage indices are effective beginning November 3, 2006 or November 21, 2006. Accordingly, the wage index provisions of this correction notice are corrections to the tabulation of the rates paid to hospitals. We note that the corrections to the impact analysis (item 1 of section III. of this notice) are effective as of November 3, 2006 since the additional corrections made based on the November 21, 2006 Joint Signature Memorandum had no significant effect on the impact analysis.

II. Summary of the Corrections to the FY 2007 IPPS Notice

We made corrections to wage index values and geographic adjustment factors (GAFs) that were published in Tables 2, 4A-1, 4A-2, 4B-1, 4B-2, 4C-1, and 4C-2. In addition, we are making technical corrections to— (1) the out-migration adjustments and qualifying counties that were published in Table 4J; and (2) the list of diagnosis-related groups (DRGs), relative weighting factors, and geometric and arithmetic mean length of stay (LOS) that were published in Table 5.

III. Correction of Errors

In FR Doc. 06-8471 of October 11, 2006 (71 FR 59886), make the following corrections:

1. On pages 59893 and 59894, in Table I.—Impact Analysis of Changes for FY 2007, the figures in the last column (All FY 2007 changes ⁸) are corrected to read as follows:

2. On pages 59903 through to 59968, in Table 2.—Hospital Case-Mix Indexes for Discharges Occurring in Federal Fiscal Year 2005; Hospital Wage Indexes for Federal Fiscal Year 2007; Hospital Average Hourly Wages for Federal Fiscal Years 2005 (2001 Wage Data), 2006 (2002 Wage Data), and 2007 (2003 Wage Data); Wage Indexes and 3-Year Average of Hospital Average Hourly Wages, for the listed providers, the wage indexes are corrected to read as follows:

a. Effective November 3, 2006

b. Effective November 21, 2006.

3. On page 59968 in Table 2.—Hospital Case-Mix Indexes for Discharges Occurring in Federal Fiscal Year 2005; Hospital Wage Indexes for Federal Fiscal Year 2007; Hospital Average Hourly Wages for Federal Fiscal Years 2005 (2001 Wage Data), 2006 (2002 Wage Data), and 2007 (2003 Wage Data); Wage Indexes and 3-Year Average of Hospital Average Hourly Wages, the table is corrected by adding a note to the end of the table to read as follows:

Note:

Due to the expiration of section 508 of the MMA, the wage index values for some hospitals will change in the second half of the fiscal year. The wage index values in this table reflect an average of the first half of FY 2007 (October 1, 2006-March 31, 2007) and second half of FY 2007 (April 1-September 30, 2007).

4. On pages 59975 through to 59998, in Table 4A-1.—Wage Index and Capital Geographic Adjustment Factor (GAF) for Urban Areas by CBSA, for the listed CBSAs, the wage indexes and GAFs are corrected to read as follows:

5. On page 59998, in Table 4A-2.—Wage Index and Capital Geographic Adjustment Factor (GAF) for Certain Urban Areas by CBSA for the Period April 1 Through September 30, 2007, for the listed CBSAs, the wage indexes and GAFs are corrected to read as follows:

6. On pages 59998 and 59999, in Table 4B-1.—Wage Index and Capital Geographic Adjustment Factor (GAF) for Rural Areas by CBSA—FY 2007, for the listed CBSAs, the wage indexes and GAFs are corrected to read as follows:

7. On page 59999, in Table 4B-2.—Wage Index and Capital Geographic Adjustment Factor (GAF) for Certain Rural Areas by CBSA for the Period April 1 Through September 30, 2007, for the listed CBSA, the wage index and GAF is corrected to read as follows:

8. On pages 59999 through to 60003, in Table 4C-1.—Wage Index and Capital Geographic Adjustment Factor (GAF) for Hospitals That Are Reclassified by CBSA, for the listed CBSAs, the wage indexes and GAFs are corrected to read as follows:

a. Effective November 3, 2006.

b. Effective November 21, 2006.

9. On page 60003, in Table 4C-2.—Wage Index and Capital Geographic Adjustment Factor (GAF) for Certain Hospitals That Are Reclassified by CBSA for the Period April 1 Through September 30, 2007*, CBSAs 35300 and 19804 are corrected and CBSA 47894 is added. The wage indexes and GAFs are corrected to read as follows:

a. Effective November 3, 2006.

b. Effective November 21, 2006.

10. On pages 60004 through to 60012, in Table 4J.—Out-Migration Adjustment—FY 2007, provider number 010009 is corrected and provider number 010010 is added to read as follows:

a. Effective October 1, 2006.

11. On pages 60013 through to 60025, in Table 5.—List of Diagnosis-Related Groups (DRGS), Relative Weighting Factors, and Geometric and Arithmetic Mean Length of Stay (LOS), DRGs 525, 544, and 572 are corrected to read as follows:

a. Effective October 1, 2006.

12. On page 60025 in Table 5.—List of Diagnosis-Related Groups (DRGs), Relative Weighting Factors, and Geometric and Arithmetic Mean Length of Stay (LOS), the table is corrected by adding the following notes to the end of the table:

a. Effective October 1, 2006.

Note:

If there is an asterisk in the “Type” column this means that data is unavailable to calculate weights for these low volume DRGs. Therefore, last year's weights have been updated based on the percent change in normalization factors between FY 2006 and FY 2007.

Note:

If there is no value or dashes (that is, “----”) in either the geometric mean LOS or the arithmetic mean LOS columns, the volume of cases is insufficient to determine a meaningful computation of these statistics.

IV. Discussion of Effective Date and Notice and Comment Rulemaking

We ordinarily publish a notice of proposed rulemaking in the Federal Register to provide a period for public comment before the provisions of a rule take effect in accordance with section 553(b) of the Administrative Procedure Act (APA) (5 U.S.C. 553(b)). In addition, a final rule would ordinarily require a 30-day delay in effective date after the date of publication in the Federal Register. This correction of the rates published in the FY 2007 IPPS notice does not constitute a rule under the Administrative Procedure Act, because, in our FY 2007 IPPS final rule (71 FR 47870, August 18, 2006), we already published the methodologies and formulas we use for determining the wage index, geographic adjustment factors, and other rates. This notice does not change our methodology or formulas, but merely ensures that our rules are implemented correctly. As this notice is not a rule under the Administrative Procedure Act, no notice of proposed rulemaking or delay in effective date is necessary.