Medicare Program; Changes to the Hospital Outpatient Prospective Payment System and Calendar Year 2005 Payment Rates; Wage Index Tables and Corrections

AGENCY:

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

ACTION:

Correction of final rule with comment period.

SUMMARY:

This document corrects technical errors that appear in the final rule with comment period published in the Federal Register on November 15, 2004 entitled “Changes to the Hospital Outpatient Prospective Payment System and Calendar Year 2005 Payment Rates.” In addition, it provides additional information about the calendar year 2005 wage indices for this payment system that was not published in that final rule with comment period.

DATES:

Effective Date: This document is effective on January 1, 2005.

FOR FURTHER INFORMATION CONTACT:

Dana Burley, (410) 786-0378.

SUPPLEMENTARY INFORMATION:

I. Background

A. Corrections

In FR Doc. 04-24759 of November 15, 2004 (69 FR 65681), there were a few inadvertent technical and typographical errors that we are correcting and identifying in the “Correction of Errors” section below. The provisions in this correction are effective as if they had been included in the document published in the Federal Register on November 15, 2004, that is, as of January 1, 2005.

B. Wage Index

Section 1833(t)(2)(D) of the Social Security Act (the Act) requires the Secretary to determine a wage adjustment factor to adjust, for geographic wage differences, the portion of the Hospital Outpatient Prospective Payment System (OPPS) payment rate and the copayment standardized amount attributable to labor and labor-related cost. This adjustment must be made in a budget neutral manner. As we have done in prior years, we adopted the Hospital Inpatient Prospective Payment System (IPPS) wage indices and applied them to Tax Equality and Fiscal Responsibility Act (TEFRA) hospitals that participate in the OPPS but not the IPPS.

In determining the OPPS payment rate and the copayment standardized amount, we standardize 60 percent of estimated costs (the labor-related portion of costs) for geographic area wage variation using the IPPS wage indices that are calculated prior to adjustments for reclassification to remove the effects of differences in area wage levels.

As published in the original OPPS April 7, 2000 final rule (65 FR 18545), the OPPS has consistently adopted the final IPPS wage indices for adjusting the OPPS standard payment amounts for labor market differences. In accordance with section 1886(d)(3)(E) of the Act, the IPPS wage index is updated annually. In the August 16, 2004 OPPS proposed rule (69 FR 50541), we proposed to use the corrected proposed fiscal year (FY) 2005 hospital IPPS wage index for urban areas published in the Federal Register on June 25, 2004 (69 FR 35919) and the proposed FY 2005 hospital IPPS wage index for rural areas published in the Federal Register on May 18, 2004 (69 FR 28580) to determine the wage adjustments for the OPPS payment rates and the copayment standardized amount for calendar year (CY) 2005.

On November 15, 2004, we published the final rule with comment period for the OPPS and CY 2005 payment rates (69 FR 65681). In that final rule (69 FR 65842), we specified that, while we customarily publish the wage index tables in the final rule for the OPPS update, we were not including them as we were in the process of reviewing the wage indices for IPPS. We added that we would publish the finalized tables in a later Federal Register document.

II. Correction of Errors

In FR Doc. 04-24759 (69 FR 65681) make the following corrections:

1. On page 65697, line 38 of the center column, the code “73428” is corrected to read “74328.”

2. On page 65771, line 39 of the first column “January 1, 2006” is corrected to read, “January 1, 2007.”

3. On page 65778, Table 23 incorrectly lists C9218. Table 23 is corrected to exclude C9218.

4. On page 65841, line 22 of the third column, the payment rate for APC 375 is incorrectly identified as “$3,214.22.” The payment rate is corrected to read “$3,217.47.”

5. On page 65848, line 13 of the center column, the coinsurance amount for the partial hospitalization APC is incorrectly identified as “$56.33.” The coinsurance amount is corrected to read “$56.27.”

6. On page 65885, APC 9218 incorrectly notes status indicator “G.” The status indicator for APC 9218 is corrected to read “K.”

7. On page 66104, C9218 incorrectly notes status indicator “G.” The status indicator for C9218 is corrected to read “K.”

III. Wage Index Tables and Additional Information

As stated above, we adopted the final IPPS wage indices for adjusting the OPPS standard payment amounts for labor market differences. Accordingly, the final wage index tables for the IPPS and OPPS are included in the IPPS correction notice (CMS-1428-F2) published elsewhere in this issue. The applicable wage index tables published in the IPPS correction notice that we will adopt for OPPS calculations are referenced in the following chart:

In addition, as also noted above, we adopted the IPPS wage indices and applied them to TEFRA hospitals that participate in the OPPS but not the IPPS. For CY 2005, we will also implement an adjustment to the wage index to reflect the ”out-migration” of hospital employees who reside in one county but commute to work in a different county with a higher wage index, in accordance with section 505 of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003, Pub. L. 108-173 (August 11, 2004 IPPS final rule (69 FR 49061 through 49067), as revised and corrected on October 7, 2004 (69 FR 60242)). Hospitals paid under the IPPS located in the qualifying section 505 “out-migration” counties received a wage index increase. We are applying the same criterion to TEFRA hospitals paid under the OPPS but not paid under the IPPS. Therefore, TEFRA hospitals located in qualifying section 505 counties will also receive increases to their wage indices under OPPS. In the OPPS proposed rule (69 FR 50916), those TEFRA hospitals were included in Addendum K. Accordingly, in this notice, we are providing the finalized Addendum K below. This addendum includes the wage index adjustment for commuting hospital employees (out-migration) in qualifying counties under IPPS (Table 4J under IPPS) as well as information regarding TEFRA hospitals that are paid under the OPPS and that are located in qualifying section 505 counties and for which an adjustment will be made to their wage indices for CY 2005. Column 4 identifies the TEFRA hospitals by triple asterisks (* * *).

IV. Waiver of Proposed Rulemaking and Delayed Effective Date

We ordinarily publish a notice of proposed rulemaking in the Federal Register to provide a period for public comment before the provisions of a notice such as this are effective in accordance with section 553(b) of the Administrative Procedure Act (APA) (5 U.S.C. 553(b)). We also ordinarily provide a 30-day delay in the effective date of the provisions of a notice in accordance with section 553(d) of the APA (5 U.S.C. 553(d)). However, we can waive both the notice-and-comment procedure and the 30-day delay in effective date if the Secretary finds, for good cause, that it is impracticable, unnecessary, or contrary to the public interest, and incorporates a statement of the finding and the reasons in the notice.

We find it unnecessary to undertake notice-and-comment rulemaking because this correction notice merely provides minor technical and typographical corrections and does not make any substantive changes to the regulations. In addition, while we are presenting information regarding the wage index tables, we are not changing our payment methodology. We are adopting the IPPS wage indices and applying the methodology that has already been subject to public comment and subsequently finalized. As we stated in the OPPS final rule, we are now presenting the information regarding the wage index tables that was not available when the final rule was published. Thus, because the corrections are technical and typographical in nature, and the public has already been given the opportunity to comment on our method for calculating the wage adjustment factor and was informed earlier that the finalized wage index tables would be provided in a subsequent Federal Register document, we believe additional comment would be unnecessary.

Further, we believe a delayed effective date is unnecessary because this notice merely corrects inadvertent technical errors and provides the tables that display the wage index values applicable for the OPPS as explained in the OPPS final rule (69 FR 65842). There is no significant effect on the payment rates for any provider. Further, we believe imposing a 30-day delay in the effective date would be contrary to the public interest for outpatient providers. To the extent that any provider's rates are affected, we believe that it is imperative that appropriate wage index values are applied in as timely a manner as possible, and that any delay in applying the appropriate wage index values would be contrary to the public interest. Therefore, we find good cause to waive notice-and-comment procedures, as well as the 30-day delay in effective date.

Authority: Section 1833(t) of the Social Security Act (42 U.S.C. 1395l(t)).

(Catalog of Federal Domestic Assistance Program No. 93.773 Medicare—Hospital Insurance Program; and No. 93.774, Medicare—Supplementary Medical Insurance Program)